##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2005                                                 
|          
|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. 333-124319-17


ALPHA NR HOLDING, INC.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                            
|------------------------------------------------------------------ |  | -------------------------------------------
|Delaware                                                           |  | 02-0590704                                 
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification Number)
|One Alpha Place, P.O. Box 2345, Abingdon, Virginia                 |  | 24212                                      
|(Address of principal executive offices)                           |  | (Zip Code)                                 

Registrants telephone number, including area code:


(276) 619-4410


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


None


o þ


þ o


þ o


S-K 10-K 10-K. þ


12b-2).


o o þ


12b-2). o þ














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##### Table of Contents



CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS








| |   |                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | market demand for coal, electricity and steel;                                                                                                                                                       
|
| |  | future economic or capital market conditions;                                                                                                                                                        
|
| |  | weather conditions or catastrophic weather-related damage;                                                                                                                                           
|
| |  | our production capabilities;                                                                                                                                                                         
|
| |  | the consummation of financing, acquisition or disposition
    transactions and the effect thereof on our business;                                                                                   
|
| |  | our ability to successfully integrate the operations we acquired
    in the Nicewonder Acquisition with our existing operations, and
    to successfully operate NCIs highway construction business;
|
| |  | our plans and objectives for future operations and expansion or
    consolidation;                                                                                                                   
|
| |  | our relationships with, and other conditions affecting, our
    customers;                                                                                                                           
|
| |  | timing of changes in customer coal inventories;                                                                                                                                                      
|
| |  | long-term coal supply arrangements;                                                                                                                                                                  
|
| |  | inherent risks of coal mining beyond our control;                                                                                                                                                    
|
| |  | environmental laws, including those directly affecting our coal
    mining and production, and those affecting our customers
    coal usage;                                                        
|
| |  | competition in coal markets;                                                                                                                                                                         
|
| |  | railroad, barge, truck and other transportation performance and
    costs;                                                                                                                           
|
| |  | availability of mining and processing equipment and parts;                                                                                                                                           
|
| |  | our assumptions concerning economically recoverable coal reserve
    estimates;                                                                                                                      
|
| |  | employee workforce factors;                                                                                                                                                                          
|
| |  | regulatory and court decisions;                                                                                                                                                                      
|
| |  | future legislation and changes in regulations, governmental
    policies or taxes;                                                                                                                   
|
| |  | changes in postretirement benefit obligations;                                                                                                                                                       
|
| |  | our liquidity, results of operations and financial
    condition; and                                                                                                                                
|
| |  | other factors, including the other factors discussed in
    Item 1A, Risk Factors of this report.                                                                                                  





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##### 










2005 ANNUAL REPORT ON
FORM 10-K


TABLE OF CONTENTS


|                                                                             |  |                                                                                                                      |  |      |     | 
|---------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                             |  |                                                                                                                      |  | Page |    
|                                                                             |  |                                                                                                                      |  |      |    
|PART I                                                                      
|Item 1.                                                                      |  | Business                                                                                                             |  |      | 2   | 
|Item 1A.                                                                     |  | Risk Factors                                                                                                         |  |      | 19  | 
|Item 2.                                                                      |  | Properties                                                                                                           |  |      | 37  | 
|Item 3.                                                                      |  | Legal Proceedings                                                                                                    |  |      | 41  | 
|Item 4.                                                                      |  | Submission of Matters to a Vote of Security
    Holders                                                              |  |      | 41  | 
|PART II                                                                     
|Item 5.                                                                      |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |  |      | 41  | 
|Item 6.                                                                      |  | Selected Financial Data                                                                                              |  |      | 42  | 
|Item 7.                                                                      |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operation                             |  |      | 45  | 
|Item 7A.                                                                     |  | Quantitative and Qualitative Disclosures
    about Market Risk                                                       |  |      | 62  | 
|Item 8.                                                                      |  | Financial Statements and Supplementary
    Data                                                                      |  |      | 63  | 
|Item 9.                                                                      |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |  |      | 107 | 
|Item 9A.                                                                     |  | Controls and Procedures                                                                                              |  |      | 107 | 
|Item 9B.                                                                     |  | Other Information                                                                                                    |  |      | 107 | 
|PART III                                                                    
|Item 10.                                                                     |  | Directors and Executive Officers of the
    Registrant                                                               |  |      | 110 | 
|Item 11.                                                                     |  | Executive Compensation                                                                                               |  |      | 110 | 
|Item 12.                                                                     |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |  |      | 110 | 
|Item 13.                                                                     |  | Certain Relationships and Related
    Transactions                                                                   |  |      | 110 | 
|Item 14.                                                                     |  | Principal Accounting Fees and Services                                                                               |  |      | 110 | 
|PART IV                                                                     
|Item 15.                                                                     |  | Exhibits, Financial Statement Schedules                                                                              |  |      | 111 | 
|EX-12: STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|EX-31.A: CERTIFICATION                                                      
|EX-31.B: CERTIFICATION                                                      
|EX-32.A: CERTIFICATION                                                      
|EX-32.B: CERTIFICATION                                                      



1



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##### Table of Contents






PART I







|        |         
|------- | --------
|Item 1. | Business

Overview












History




2



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##### Table of Contents























3



---



##### Table of Contents





Mining Methods




Underground Mining.




Surface Mining.


Coal Characteristics




4



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##### Table of Contents



Heat Value.


Sulfur Content.




Ash & Moisture Content.


Coking Characteristics.


Mining Operations




5



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##### Table of Contents





Regional Business Units


|                       |  |                         |  |                            |  |                    |    |  |         |  |               |       |               |  |          |  |  |               |         |  |  |  |        | 
|---------------------- |  | ----------------------- |  | -------------------------- |  | ------------------ | -- |  | ------- |  | ------------- | ----- | ------------- |  | -------- |  |  | ------------- | ------- |  |  |  | ------ | 
|                       |  |                         |  |                            |  | Number and Type of |    |  |         |  |              
|                       |  |                         |  |                            |  | Mines as of        |    |  |         |  |              
|                       |  |                         |  |                            |  | February 1, 2006   |    |  |         |  | 2005          |      
|                       |  |                         |  |                            |  |                    |    |  |         |  | Production of |      
|                       |  |                         |  | Preparation plant(s) as of |  | Under-             |    |  |         |  |               |       | Saleable Tons | 
|Regional Business Unit |  | Location                |  | February 1, 2006           |  | ground             |    |  | Surface |  |               | Total |               |  | Railroad |  |  | (in 000s)(1) |        
|                       |  |                         |  |                            |  |                    |    |  |         |  |               |       |               |  |          |  |  |               |        
|Paramont               |  | Virginia                |  | Toms Creek                 |  |                    | 9  |  |         |  | 5             |       |               |  | 14       |  |  |               | NS      |  |  |  | 5,679  | 
|Dickenson-Russell      |  | Virginia                |  | McClure River and Moss #3  |  |                    | 6  |  |         |  | 1             |       |               |  | 7        |  |  |               | CSX, NS |  |  |  | 2,056  | 
|Kingwood               |  | West Virginia           |  | Whitetail                  |  |                    | 1  |  |         |  | 0             |       |               |  | 1        |  |  |               | CSX     |  |  |  | 1,546  | 
|Brooks Run             |  | West Virginia           |  | Erbacon                    |  |                    | 3  |  |         |  | 1             |       |               |  | 4        |  |  |               | CSX     |  |  |  | 2,298  | 
|Welch                  |  | West Virginia           |  | Litwar, Kepler and Herndon |  |                    | 15 |  |         |  | 0             |       |               |  | 15       |  |  |               | NS      |  |  |  | 2,542  | 
|AMFIRE                 |  | Pennsylvania            |  | Clymer and Portage         |  |                    | 6  |  |         |  | 12            |       |               |  | 18       |  |  |               | NS      |  |  |  | 4,291  | 
|Enterprise             |  | Kentucky                |  | Roxana                     |  |                    | 4  |  |         |  | 3             |       |               |  | 7        |  |  |               | CSX     |  |  |  | 1,525  | 
|Callaway               |  | West Virginia/ Virginia |  |                            |  |                    | 0  |  |         |  | 3             |       |               |  | 3        |  |  |               | NS      |  |  |  | 665    | 
|                       |  |                         |  |                            |  |                    |    |  |         |  |               |       |               |  |          |  |  |               |        
|                       |  |                         |  | Total                      |  |                    | 44 |  |         |  | 25            |       |               |  | 69       |  |  |               |         |  |  |  | 20,602 | 






|    |                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes coal purchased from third-party producers that was
    processed at our subsidiaries preparation plants in 2005.
    Excludes 457,000 tons of coal produced in 2004 by NKC. We sold
    NKC on April 14, 2005.









Paramont.


6



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##### Table of Contents



Dickenson-Russell.


Kingwood.


Brooks Run.


Welch.


AMFIRE.


Enterprise.


7



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##### Table of Contents





Callaway.


Marketing, Sales and Customer Contracts






|     |  |                                   |      |  |                          |  |    |      |  |  |                  |  |  |  |    |  
|---- |  | --------------------------------- | ---- |  | ------------------------ |  | -- | ---- |  |  | ---------------- |  |  |  | -- | -
|     |  | Steam Coal Sales(1)               |      |  | Metallurgical Coal Sales | 
|     |  |                                   |      |  |                          | 
|Year |  | Tons                              |      |  | % of Total Sales         |  |    | Tons |  |  | % of Total Sales | 
|     |  |                                   |      |  |                          |  |    |      |  |  |                  | 
|     |  | (In millions, except percentages) |     
|2005 |  |                                   | 16.7 |  |                          |  | 63 | %    |  |  | 10.0             |  |  |  | 37 | %
|2004 |  |                                   | 15.8 |  |                          |  | 63 | %    |  |  | 9.5              |  |  |  | 37 | %
|2003 |  |                                   | 15.3 |  |                          |  | 71 | %    |  |  | 6.3              |  |  |  | 29 | %

8



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##### Table of Contents








|    |                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Steam coal sales include sales to utility and industrial
    customers. Sales of steam coal to industrial customers, who we
    define as consumers of steam coal who do not generate
    electricity for sale to third parties, accounted for
    approximately 3%, 4% and 5% of total sales in 2005, 2004 and
    2003, respectively.



|     |  |                                   |     |             |                  |  |    |              |               |   |                |  |  |  |    |  
|---- |  | --------------------------------- | --- | ----------- | ---------------- |  | -- | ------------ | ------------- | - | -------------- |  |  |  | -- | -
|     |  |                                   |     | Export Tons |                  |  |    |              | Export Sale   |  
|     |  |                                   |     | Sold as a   |                  |  |    |              | Revenues as a |  
|     |  | Export Tons                       |     |             | Percentage of    |  |    | Export Sale  |               |   | Percentage of  | 
|Year |  | Sold                              |     |             | Total Coal Sales |  |    | Revenues (1) |               |   | Total Revenues | 
|     |  |                                   |     |             |                  |  |    |              |               |   |                | 
|     |  | (In millions, except percentages) |    
|2005 |  |                                   | 8.4 |             |                  |  | 31 | %            |               | $ | 737.1          |  |  |  | 45 | %
|2004 |  |                                   | 8.1 |             |                  |  | 32 | %            |               | $ | 597.9          |  |  |  | 48 | %
|2003 |  |                                   | 4.9 |             |                  |  | 22 | %            |               | $ | 220.8          |  |  |  | 28 | %






|    |                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Export sale revenues in 2005 and 2004 include approximately
    $0.6 million and $4.0 million, respectively, in
    equipment export sales. All other export sale revenues are coal
    sales revenues and freight and handling revenues.









9



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Distribution




Competition








10



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Other Operations




Highway Construction Business.


Maxxim Rebuild.


Dominion Terminal Associates.


Miscellaneous.


Employee and Labor Relations




Environmental and Other Regulatory Matters




11



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##### Table of Contents









Mining Permits and Approvals.




Surface Mining Control and Reclamation Act.






12



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##### Table of Contents











Surety Bonds.


Clean Air Act.


13



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Acid Rain. Title IV of the Clean Air Act required a
    two-phase reduction of sulfur dioxide emissions by electric
    utilities. Phase II became effective in 2000 and applies to
    all coal-fired power plants generating greater than 25
    Megawatts. Generally, the affected electricity generators have
    sought to meet these requirements by switching to lower sulfur
    fuels, installing pollution control devices, reducing
    electricity generating levels or purchasing sulfur dioxide
    emission allowances. Although we cannot accurately predict the
    future effect of this Clean Air Act provision on our operations,
    we believe that implementation of Phase II has resulted in,
    and will continue to result in, an upward pressure on the price
    of lower sulfur coals, as coal-fired power plants continue to
    comply with the more stringent restrictions of Title IV.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Fine Particulate Matter. The Clean Air Act requires the
    U.S. Environmental Protection Agency (the EPA)
    to set standards, referred to as National Ambient Air Quality
    Standards (NAAQS), for certain pollutants. Areas
    that are not in compliance (referred to as non-attainment
    areas) with these standards must take steps to reduce
    emissions levels. For example, NAAQS currently exist for
    particulate matter with an aerodynamic diameter less than or
    equal to 10 microns, or PM10, and for fine particulate matter
    with an aerodynamic diameter less than or equal 2.5 microns, or
    PM2.5. The EPA designated all or part of 225 counties in
    20 states as well as the District of Columbia as
    non-attainment areas with respect to the PM2.5 NAAQS. Individual
    states must identify the sources of emissions and develop
    emission reduction plans. These plans may be state-specific or
    regional in scope. Under the Clean Air Act, individual states
    have up to twelve years from the date of designation to secure
    emissions reductions from sources contributing to the problem.
    Meeting the new PM2.5 standard may require reductions of
    nitrogen oxide and sulfur dioxide emissions. Future regulation
    and enforcement of the new PM2.5 standard will affect many power
    plants, especially coal-fired plants and all plants in
    non-attainment areas.
|
| |  | Ozone. Significant additional emissions control
    expenditures will be required at coal-fired power plants to meet
    the current NAAQS for ozone. Nitrogen oxides, which are a
    by-product of coal combustion, are classified as an ozone
    precursor. Accordingly, emissions control requirements for new
    and expanded coal-fired power plants and industrial boilers will
    continue to become more demanding in the years ahead. For
    example, in November 2005 EPA issued a final rule, called the
    Phase 2 Ozone Rule, describing the action that states must
    take to reduce ground level ozone. The EPA designated counties
    in 32 states as non-attainment areas under the new
    standard. These states will have until June 2007 to develop
    plans, referred to as state implementation plans or SIPs, for
    pollution control measures that allow them to comply with the
    standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | NOx SIP Call. The NOx SIP Call program was established by
    the EPA in October of 1998 to reduce the transport of ozone on
    prevailing winds from the Midwest and South to states in the
    Northeast, which said they could not meet federal air quality
    standards because of migrating pollution. The program is
    designed to reduce nitrous oxide emissions by one million tons
    per year in 22 eastern states and the District of Columbia.
    Installation of additional control measures, such as selective
    catalytic reduction devices, required under the final rules will
    make it more costly to operate coal-fired electricity generating
    plants, thereby making coal a less attractive fuel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Clear Skies Initiative. The Bush Administration has
    proposed a plan, commonly referred to as the Clear Skies
    Initiative, that could result in dramatic reductions in nitrous
    oxide, sulfur dioxide, and mercury emissions by power plants
    through cap-and-trade programs similar to the
    existing Acid Rain regulations and current NOx budget programs.
    It is currently not possible to predict what, if any, new
    regulatory requirements will ultimately evolve out of this
    initiative.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Clean Air Interstate Rule. The EPA finalized the Clean
    Air Interstate Rule (CAIR) on March 10, 2005. The new
    CAIR calls for power plants in 29 eastern states and the
    District of Columbia to reduce                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | emission levels of sulfur dioxide and nitrous oxide. The rule
    requires states to regulate power plants under a cap and trade
    program similar to the system now in effect for acid deposition
    control and to that proposed by the Clear Skies Initiative. When
    fully implemented, this rule is expected to reduce regional
    sulfur dioxide emissions by over 70% and nitrogen oxides
    emissions by over 60% from 2003 levels. The stringency of the
    cap may require many coal-fired electricity generation plants to
    install additional pollution control equipment, such as wet
    scrubbers, to comply, which could decrease the demand for low
    sulfur coal at these plants and thereby potentially reduce
    market prices for low sulfur coal. Emissions are permanently
    capped and cannot increase. On December 3, 2005, the EPA
    published a notice that it was reconsidering four specific
    issues that are involved in this rule and was accepting public
    comment until January 13, 2006. The rule is also subject to
    judicial challenge, which makes its impact difficult to assess.                                                                                                                                                                                                                                                                       
|
| |  | Clean Air Mercury Rule. On March 15, 2005, the EPA
    issued the Clean Air Mercury Rule to permanently cap and reduce
    mercury emissions from coal-fired power plants. The Clean Air
    Mercury Rule establishes mercury emissions limits from new and
    existing coal-fired power plants and creates a market-based
    cap-and-trade program that is expected to reduce nationwide
    utility emissions of mercury in two phases. Several states and
    environmental groups have filed suits in the U.S. Court of
    Appeals for the District of Columbia challenging the EPAs
    decision to allow emissions trading and its decision to reverse
    a regulatory finding in 2000 that would have required emission
    limits for mercury based maximum achievable control technology
    under section 112 of the Clean Air Act. Many of the
    challenges seek to impose more stringent rules. In addition,
    efforts have commenced in Congress to legislatively disapprove
    the rules. The EPA recently announced that it is seeking further
    public comment on the Clean Air Mercury Rule and is
    reconsidering the decision not to regulate mercury and other
    pollutants from coal-fired power plants under the Clean Air
    Acts hazardous air pollution program. Stricter limitations
    on mercury emissions from power plants may adversely affect the
    demand for coal.
|
| |  | Carbon Dioxide. In February 2003, a number of states
    notified the EPA that they planned to sue the agency to force it
    to set new source performance standards for utility emissions of
    carbon dioxide and to tighten existing standards for sulfur
    dioxide and particulate matter for utility emissions. In June
    2003, three of these states sued the EPA seeking a court order
    requiring the EPA to designate carbon dioxide as a criteria
    pollutant and to issue a new NAAQS for carbon dioxide. If these
    lawsuits result in the issuance of a court order requiring the
    EPA to set emission limitations for carbon dioxide and/or lower
    emission limitations for sulfur dioxide and particulate matter,
    it could reduce the amount of coal our customers would purchase
    from us.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Regional Emissions Trading. Eleven Northeast and
    Mid-Atlantic states are working cooperatively to develop a
    regional cap and trade program that would initially cover carbon
    dioxide emissions from power plants in the region. No formal
    model rule has been made public to date. There are a number of
    uncertainties regarding this initiative, including the
    applicable baseline of emissions to be permitted, initial
    allocations, required emissions reductions, availability of
    offsets, the extent to which states will adopt the program,
    whether it will be linked with programs in other states or in
    Canadian provinces, and the timing for implementation of the
    program. There can be no assurance at this time that a carbon
    dioxide cap and trade program, if implemented by the states
    where our customers operate, will not affect the future market
    for coal in this region.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Regional Haze. The EPA has initiated a regional haze
    program designed to protect and to improve visibility at and
    around national parks, national wilderness areas and
    international parks. This program restricts the construction of
    new coal-fired power plants whose operation may impair
    visibility at and around federally protected areas. Moreover,
    this program may require certain existing coal-fired power
    plants to install additional control measures designed to limit
    haze-causing emissions, such as sulfur dioxide, nitrogen oxides,
    volatile organic chemicals and particulate matter. These
    limitations could affect the future market for coal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

15



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##### Table of Contents



Clean Water Act.






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Section 402 of the Clean Water Act. Section 402
    of the CWA establishes in-stream water quality criteria and
    treatment standards for wastewater discharge through the
    National Pollutant Discharge Elimination System
    (NPDES). Regular monitoring and compliance with
    reporting requirements and performance standards are
    preconditions for the issuance and renewal of NPDES permits that
    govern the discharge of pollutants into water. The imposition of
    future restrictions on the discharge of certain pollutants into
    waters of the United States could affect the permitting process,
    increase the costs and difficulty of obtaining and complying
    with NPDES permits and could adversely affect our coal
    production.







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Section 404 of the Clean Water Act. Permits under
    Section 404 of the CWA are required for coal companies to
    conduct dredging or filling activities in jurisdictional waters
    for the purpose of creating slurry ponds, water impoundments,
    refuse areas, valley fills or other mining activities.
    Jurisdictional waters typically include ephemeral, intermittent,
    and perennial streams and may in certain instances include
    man-made conveyances that have a hydrologic connection to a
    stream or wetland.



16



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##### Table of Contents



Mine Safety and Health.




Coal Industry Retiree Health Benefit Act of 1992.


Endangered Species Act.


Resource Conservation and Recovery Act.




17



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##### Table of Contents







Federal and State Superfund Statutes.


Climate Change.




Additional Information


1-800-SEC-0330




18



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|         |             
|-------- | ------------
|Item 1A. | Risk Factors



| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | A substantial or extended decline in coal prices could
    reduce our revenues and the value of our coal reserves.





| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | the supply of and demand for domestic and foreign coal;                                                                           
|
| |  | the demand for electricity;                                                                                                       
|
| |  | domestic and foreign demand for steel and the continued
    financial viability of the domestic and/or foreign steel
    industry;
|
| |  | the proximity to, capacity of, and cost of transportation
    facilities;                                                         
|
| |  | domestic and foreign governmental regulations and taxes;                                                                          
|
| |  | air emission standards for coal-fired power plants;                                                                               
|
| |  | regulatory, administrative, and judicial decisions;                                                                               
|
| |  | the price and availability of alternative fuels, including the
    effects of technological developments; and                     
|
| |  | the effect of worldwide energy conservation measures.                                                                             





| |                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our coal mining production and delivery is subject to
    conditions and events beyond our control, which could result in
    higher operating expenses and/or decreased production and sales
    and adversely affect our operating results.





| |   |                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | delays and difficulties in acquiring, maintaining or renewing
    necessary permits or mining or surface rights;                                                  
|
| |  | changes or variations in geologic conditions, such as the
    thickness of the coal deposits and the amount of rock embedded
    in or overlying the coal deposit;
|
| |  | mining and processing equipment failures and unexpected
    maintenance problems;                                                                                 
|
| |  | limited availability of mining and processing equipment and
    parts from suppliers;                                                                             
|
| |  | interruptions due to transportation delays;                                                                                                                       
|
| |  | adverse weather and natural disasters, such as heavy rains and
    flooding;                                                                                      
|
| |  | accidental mine water discharges;                                                                                                                                 
|
| |  | the termination of material contracts by state or other
    governmental authorities;                                                                             
|
| |  | the unavailability of qualified labor;                                                                                                                            
|
| |  | strikes and other labor-related interruptions; and                                                                                                                
|
| |  | unexpected mine safety accidents, including fires and explosions
    from methane and other sources.                                                              

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| |                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Any change in coal consumption patterns by steel producers
    or North American electric power generators resulting in a
    decrease in the use of coal by those consumers could result in
    lower prices for our coal, which would reduce our revenues and
    adversely impact our earnings and the value of our coal
    reserves.





20



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| |                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A decline in demand for metallurgical coal would limit our
    ability to sell our high quality steam coal as higher-priced
    metallurgical coal and could affect the economic viability of
    certain of our mines that have higher operating costs.







| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Acquisitions that we have completed since our formation,
    as well as acquisitions that we may undertake in the future,
    involve a number of risks, any of which could cause us not to
    realize the anticipated benefits.





| |   |                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | uncertainties in assessing the value, strengths, and potential
    profitability of, and identifying the extent of all weaknesses,
    risks, contingent and other liabilities (including environmental
    or mine safety liabilities) of, acquisition candidates;
|
| |  | the potential loss of key customers, management and employees of
    an acquired business;                                                                                                                                                                         
|
| |  | the ability to achieve identified operating and financial
    synergies anticipated to result from an acquisition;                                                                                                                                                 
|
| |  | problems that could arise from the integration of the acquired
    business; and                                                                                                                                                                                   
|
| |  | unanticipated changes in business, industry or general economic
    conditions that affect the assumptions underlying our rationale
    for pursuing the acquisition.                                                                                              

21



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| |                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The inability of the sellers of our Predecessor and
    acquired companies to fulfill their indemnification obligations
    to us under our acquisition agreements could increase our
    liabilities and adversely affect our results of operations and
    financial position.





| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our inability to continue or expand the existing road
    construction and mining business of the Nicewonder Companies
    could adversely affect the expected benefits from the Nicewonder
    Acquisition.



22



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| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | The loss of, or significant reduction in, purchases by our
    largest customers could adversely affect our revenues and
    profitability.





| |                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in purchasing patterns in the coal industry may
    make it difficult for us to extend existing supply contracts or
    enter into new long-term supply contracts with customers, which
    could adversely affect the capability and profitability of our
    operations.





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| |                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain provisions in our long-term supply contracts may
    reduce the protection these contracts provide us during adverse
    economic conditions or may result in economic penalties upon our
    failure to meet specifications.









| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Disruption in supplies of coal produced by contractors and
    other third parties could temporarily impair our ability to fill
    customers orders or increase our costs.



24



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| |                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Competition within the coal industry may adversely affect
    our ability to sell coal, and excess production capacity in the
    industry could put downward pressure on coal prices.











| |                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Fluctuations in transportation costs and the availability
    or reliability of transportation could affect the demand for our
    coal or temporarily impair our ability to supply coal to our
    customers.







25



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| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Our business will be adversely affected if we are unable
    to develop or acquire additional coal reserves that are
    economically recoverable.







| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We face numerous uncertainties in estimating our
    recoverable coal reserves, and inaccuracies in our estimates
    could result in decreased profitability from lower than expected
    revenues or higher than expected costs.



26



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | future coal prices, operating costs, capital expenditures,
    severance and excise taxes, royalties and development and
    reclamation costs;                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | future mining technology improvements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | the effects of regulation by governmental agencies; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | geologic and mining conditions, which may not be fully
    identified by available exploration data and may differ from our
    experiences in areas we currently mine. As a result, actual coal
    tonnage recovered from identified reserve areas or properties,
    and costs associated with our mining operations, may vary from
    estimates. Any inaccuracy in our estimates related to our
    reserves could result in decreased profitability from lower than
    expected revenues or higher than expected costs.



| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Defects in title of any leasehold interests in our
    properties could limit our ability to mine these properties or
    result in significant unanticipated costs.





| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Mining in Central and Northern Appalachia is more complex
    and involves more regulatory constraints than mining in other
    areas of the United States, which could affect our mining
    operations and cost structures in these areas.





| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our work force could become increasingly unionized in the
    future, which could adversely affect the stability of our
    production and reduce our profitability.





| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | Our unionized work force could strike in the future, which
    could disrupt production and shipments of our coal and increase
    costs.



27



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| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Our ability to collect payments from our customers could
    be impaired if their creditworthiness deteriorates.







| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The government extensively regulates our mining
    operations, which imposes significant costs on us, and future
    regulations could increase those costs or limit our ability to
    produce and sell coal.





| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | employee health and safety;                                                    
|
| |  | mandated benefits for retired coal miners;                                     
|
| |  | mine permitting and licensing requirements;                                    
|
| |  | reclamation and restoration of mining properties after mining is
    completed;
|
| |  | air quality standards;                                                         
|
| |  | water pollution;                                                               
|
| |  | plant and wildlife protection;                                                 
|
| |  | the discharge of materials into the environment;                               
|
| |  | surface subsidence from underground mining; and                                
|
| |  | the effects of mining on groundwater quality and availability.                 





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| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | Extensive environmental regulations affect our customers
    and could reduce the demand for coal as a fuel source and cause
    our sales to decline.











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| |                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our operations may impact the environment or cause
    exposure to hazardous substances, and our properties may have
    environmental contamination, which could result in material
    liabilities to us.









| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be unable to obtain and renew permits necessary for
    our operations, which would reduce our production, cash flow and
    profitability.



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| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to implement required public-company
    internal controls over financial reporting in the required time
    frame or with adequate compliance, and implementation of the
    controls will increase our costs.

out-of out-of


31



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| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Our ability to operate our company effectively could be
    impaired if we fail to attract and retain key personnel.



S-1 333-129030).




| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A shortage of skilled labor in the Appalachian region
    could pose a risk to achieving improved labor productivity and
    competitive costs and could adversely affect our
    profitability.



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| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our significant indebtedness could harm our business by
    limiting our available cash and our access to additional capital
    and could force us to sell material assets or take other actions
    to attempt to reduce our indebtedness.









| |   |                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increase our vulnerability to general adverse economic and
    industry conditions;                                                                                                                                                                                                  
|
| |  | make it more difficult to self-insure and obtain surety bonds or
    letters of credit;                                                                                                                                                                                              
|
| |  | limit our ability to enter into new long-term sales contracts;                                                                                                                                                                                                                       
|
| |  | make it more difficult for us to pay interest and satisfy our
    debt obligations, including our obligations with respect to the
    notes;                                                                                                                                         
|
| |  | require us to dedicate a substantial portion of our cash flow
    from operations to payments on our indebtedness, thereby
    reducing the availability of our cash flow to fund working
    capital, capital expenditures, acquisitions and other general
    corporate activities;
|
| |  | limit our ability to obtain additional financing to fund future
    working capital, capital expenditures, research and development,
    debt service requirements or other general corporate
    requirements;                                                                      
|
| |  | limit our flexibility in planning for, or reacting to, changes
    in our business and in the coal industry;                                                                                                                                                                         
|
| |  | place us at a competitive disadvantage compared to less
    leveraged competitors; and                                                                                                                                                                                               
|
| |  | limit our ability to borrow additional funds.                                                                                                                                                                                                                                        



33



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| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Despite our current leverage, we may still be able to
    incur substantially more debt. This could further exacerbate the
    risks associated with our significant indebtedness.





| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The covenants in our credit facility and the indenture
    governing the notes impose restrictions that may limit our
    operating and financial flexibility.







| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Failure to obtain or renew surety bonds on acceptable
    terms could affect our ability to secure reclamation and coal
    lease obligations, which could adversely affect our ability to
    mine or lease coal.





| |   |                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | lack of availability, higher expense or unfavorable market terms
    of new bonds;                                                                                                                   
|
| |  | restrictions on availability of collateral for current and
    future third-party surety bond issuers under the terms of our
    credit facility or the indenture governing our senior
    notes; and
|
| |  | the exercise by third-party surety bond issuers of their right
    to refuse to renew the surety.                                                                                                    

Failure
to maintain capacity for required letters of credit could limit
our available borrowing capacity under our credit facility,
limit our ability to obtain or renew surety bonds and negatively
impact our


34



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ability to obtain additional financing to fund future
working capital, capital expenditure or other general corporate
requirements.






| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If our assumptions regarding our likely future expenses
    related to benefits for non-active employees are incorrect, then
    expenditures for these benefits could be materially higher than
    we have predicted.







| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Demand for our coal changes seasonally and could have an
    adverse effect on the timing of our cash flows and our ability
    to service our existing and future indebtedness.



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| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our earnings will be reduced in future periods as a result
    of our parents issuance of shares of its common stock to members of
    management as part of the Internal Restructuring.





| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | The AMCI Parties may have significant influence on our
    company and may have conflicts of interest with us or you in the
    future.





| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Terrorist attacks and threats, escalation of military
    activity in response to such attacks or acts of war may
    negatively affect our business, financial condition and results
    of operations.



36



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|        |           
|------- | ----------
|Item 2. | Properties

Coal Reserves










37



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|                                     |  |                            |               |                       |             |                       |                |     |                       |             |           |   |   |       |       |   |         |  |      |         |      |  |       |   |      |  |      |  
|------------------------------------ |  | -------------------------- | ------------- | --------------------- | ----------- | --------------------- | -------------- | --- | --------------------- | ----------- | --------- | - | - | ----- | ----- | - | ------- |  | ---- | ------- | ---- |  | ----- | - | ---- |  | ---- | -
|                                     |  |                            |               | Recoverable           |             |                       | Sulfur Content |     |                       | Average Btu |          
|                                     |  |                            |               | Reserves Proven &     |             |                       |                |     |                       |             |          
|Regional Business Unit               |  | State                      |               |                       | Probable(1) |                       |                | <1% |                       |             | 1.0%-1.5% |   |   | >1.5% |       |   | >12,500 |  |      | <12,500 |     
|                                     |  |                            |               |                       |             |                       |                |     |                       |             |           |   |   |       |       |   |         |  |      |         |     
|                                     |  |                            |               | (In millions of tons) |             |                       |                |     |                      
|                                     |  |                            |               |                       |             | (In millions of tons) |                |     | (In millions of tons) |            
|Paramont/ Alpha Land and Reserves(2) |  |                            | Virginia      |                       |             |                       | 153.3          |     |                       |             | 110.1     |   |   |       | 31.4  |   |         |  | 11.8 |         |      |  | 150.7 |   |      |  | 2.6  |  
|Dickenson-Russell                    |  |                            | Virginia      |                       |             |                       | 30.9           |     |                       |             | 30.9      |   |   |       | 0     |   |         |  | 0    |         |      |  | 30.9  |   |      |  | 0    |  
|Kingwood                             |  |                            | West Virginia |                       |             |                       | 29.2           |     |                       |             | 0         |   |   |       | 17.7  |   |         |  | 11.6 |         |      |  | 29.2  |   |      |  | 0    |  
|Brooks Run                           |  |                            | West Virginia |                       |             |                       | 25.4           |     |                       |             | 7.1       |   |   |       | 18.3  |   |         |  | 0    |         |      |  | 10.5  |   |      |  | 14.9 |  
|Welch                                |  |                            | West Virginia |                       |             |                       | 96.4           |     |                       |             | 96.4      |   |   |       | 0     |   |         |  | 0    |         |      |  | 96.4  |   |      |  | 0    |  
|AMFIRE                               |  |                            | Pennsylvania  |                       |             |                       | 65.5           |     |                       |             | 14.7      |   |   |       | 21.8  |   |         |  | 29.0 |         |      |  | 56.9  |   |      |  | 8.6  |  
|Enterprise                           |  |                            | Kentucky      |                       |             |                       | 63.7           |     |                       |             | 24.8      |   |   |       | 37.2  |   |         |  | 1.6  |         |      |  | 62.3  |   |      |  | 1.4  |  
|Callaway                             |  | West Virginia and Virginia |               |                       | 25.1        |                       |                |     | 25.1                  |             |           |   | 0 |       |       |   | 0       |  |      |         | 10.9 |  |       |   | 14.2 | 
|                                     |  |                            |               |                       |             |                       |                |     |                       |             |           |   |   |       |       |   |         |  |      |         |     
|Totals                               |  |                            |               |                       |             |                       | 489.5          |     |                       |             | 309.1     |   |   |       | 126.4 |   |         |  | 54.0 |         |      |  | 447.8 |   |      |  | 41.7 |  
|Percentages                          |  |                            |               |                       |             |                       |                |     |                       |             | 63        | % |   |       | 26    | % |         |  | 11   | %       |      |  | 92    | % |      |  | 8    | %






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Recoverable reserves represent the amount of proven and probable
    reserves that can actually be recovered taking into account all
    mining and preparation losses involved in producing a saleable
    product using existing methods under current law. The reserve
    numbers set forth in the table exclude reserves for which we
    have leased our mining rights to third parties. Reserve
    information reflects a moisture factor of 6.5%. This moisture
    factor represents the average moisture present on our delivered
    coal.
|   
|(2) | Includes proven and probable reserves in Virginia controlled by
    our subsidiary Alpha Land and Reserves, LLC as of
    December 31, 2005. Alpha Land and Reserves, LLC subleases a
    portion of the mining rights to its proven and probable reserves
    in Virginia to our subsidiary Paramont Coal Company Virginia,
    LLC.                                                                                                                                                                                                                 

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|                                     |  |                            |               |                       |             |                       |            |             |                 |            |               |   |     |       |       |   |        |  |      |              |      |  |       |                         |  |                        
|------------------------------------ |  | -------------------------- | ------------- | --------------------- | ----------- | --------------------- | ---------- | ----------- | --------------- | ---------- | ------------- | - | --- | ----- | ----- | - | ------ |  | ---- | ------------ | ---- |  | ----- | ----------------------- |  | -----------------------
|                                     |  |                            |               | Recoverable           |             |                       | Total Tons |             |                 | Total Tons |               |   |    
|                                     |  |                            |               | Reserves Proven &     |             |                       |            |             |                 |            |               |   |    
|Regional Business Unit               |  | State                      |               |                       | Probable(1) |                       |            | Assigned(2) |                 |            | Unassigned(2) |   |     | Owned |       |   | Leased |  |      | Coal Type(3)
|                                     |  |                            |               |                       |             |                       |            |             |                 |            |               |   |     |       |       |   |        |  |      |             
|                                     |  |                            |               | (In millions of tons) |             |                       |            |             |                 |            |              
|                                     |  |                            |               |                       |             | (In millions of tons) |            |             | (In millions of |            |               |  
|                                     |  |                            |               |                       |             |                       |            | tons)       |                 |            |              
|Paramont/ Alpha Land and Reserves(4) |  |                            | Virginia      |                       |             |                       | 153.3      |             |                 |            | 71.0          |   |     |       | 82.3  |   |        |  | 0    |              |      |  | 153.3 |                         |  | Steam and Metallurgical
|Dickenson-Russell                    |  |                            | Virginia      |                       |             |                       | 30.9       |             |                 |            | 28.7          |   |     |       | 2.2   |   |        |  | 0    |              |      |  | 30.9  |                         |  | Steam and Metallurgical
|Kingwood                             |  |                            | West Virginia |                       |             |                       | 29.2       |             |                 |            | 20.8          |   |     |       | 8.4   |   |        |  | 0    |              |      |  | 29.2  |                         |  | Steam and Metallurgical
|Brooks Run                           |  |                            | West Virginia |                       |             |                       | 25.4       |             |                 |            | 12.6          |   |     |       | 12.8  |   |        |  | 2.9  |              |      |  | 22.5  |                         |  | Steam and Metallurgical
|Welch                                |  |                            | West Virginia |                       |             |                       | 96.4       |             |                 |            | 50.8          |   |     |       | 45.6  |   |        |  | 1.3  |              |      |  | 95.1  |                         |  | Steam and Metallurgical
|AMFIRE                               |  |                            | Pennsylvania  |                       |             |                       | 65.5       |             |                 |            | 62.4          |   |     |       | 3.1   |   |        |  | 3.4  |              |      |  | 62.1  |                         |  | Steam and Metallurgical
|Enterprise                           |  |                            | Kentucky      |                       |             |                       | 63.7       |             |                 |            | 10.8          |   |     |       | 52.9  |   |        |  | 7.1  |              |      |  | 56.6  |                         |  | Steam                  
|Callaway                             |  | West Virginia and Virginia |               |                       | 25.1        |                       |            |             | 22.9            |            |               |   | 2.2 |       |       |   | 1.1    |  |      |              | 24.0 |  |       | Steam and Metallurgical
|                                     |  |                            |               |                       |             |                       |            |             |                 |            |               |   |     |       |       |   |        |  |      |             
|Totals                               |  |                            |               |                       |             |                       | 489.5      |             |                 |            | 280.0         |   |     |       | 209.5 |   |        |  | 15.8 |              |      |  | 473.7 |                         |  |                        
|Percentages                          |  |                            |               |                       |             |                       |            |             |                 |            | 57            | % |     |       | 43    | % |        |  | 3    | %            |      |  | 97    | %                       |  |                        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Recoverable reserves represent the amount of proven and probable
    reserves that can actually be recovered taking into account all
    mining and preparation losses involved in producing a saleable
    product using existing methods under current law. The reserve
    numbers set forth in the table exclude reserves for which we
    have leased our mining rights to third parties. Reserve
    information reflects a moisture factor of 6.5%. This moisture
    factor represents the average moisture present on our delivered
    coal.
|   
|(2) | Assigned reserves represent recoverable coal reserves that can
    be mined without a significant capital expenditure for mine
    development, whereas unassigned reserves will require
    significant capital expenditures to mine the reserves.                                                                                                                                                                                                                                                                                                   
|   
|(3) | Almost all of our reserves that we currently market as
    metallurgical coal also possess quality characteristics that
    would enable us to market them as steam coal.                                                                                                                                                                                                                                                                                                                                                                             
|   
|(4) | Includes proven and probable reserves in Virginia controlled by
    our subsidiary Alpha Land and Reserves, LLC as of
    December 31, 2005. Alpha Land and Reserves, LLC subleases a
    portion of the mining rights to its proven and probable reserves
    in Virginia to our subsidiary Paramont Coal Company Virginia,
    LLC.                                                                                                                                                                                                                 

39



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40



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

General.


Nicewonder Litigation.







|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities



41



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data





42



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|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |   |         |         |         |   |        |         |         | 
|--------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------ | --------- | --------------------------------------- | ------------ | ------ | ------------ | ---------- | - | ------------ | ------- | ------- | ------------ | ---- | ----- | ------------ | - | ------- | ------- | ------- | - | ------ | ------- | ------- | 
|                                        |                                                                                                                      | Alpha NR                                                |        |           | ANR Fund IX Holdings, L.P. and Alpha NR |              |        |             
|                                        |                                                                                                                      | Holding, Inc.                                           |        |           | Holding, Inc. and Subsidiaries          |              |        | Predecessor  |           
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |           
|                                        |                                                                                                                      |                                                         |        |           |                                         | December 14, |        |              | January 1, |   |              |        
|                                        |                                                                                                                      | Year Ended                                              |        |           | Year Ended                              |              |        | Year Ended   |            |   | 2002 to      |         |         | 2002 to      |      |       | Year Ended   |  
|                                        |                                                                                                                      | December 31,                                            |        |           | December 31,                            |              |        | December 31, |            |   | December 31, |         |         | December 13, |      |       | December 31, |  
|                                        |                                                                                                                      | 2005                                                    |        |           | 2004                                    |              |        | 2003         |            |   | 2002         |         |         | 2002         |      |       | 2001         |  
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | (In thousands, except
per share amounts and ratios)     |       
|Statement of Operations Data:           |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |   |         |         |         |   |        |        
|Revenues:                               |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |   |         |         |         |   |        |        
|                                        | Coal revenues                                                                                                        |                                                         | $      | 1,414,513 |                                         |              | $      | 1,079,733    |            |   | $            | 694,591 |         |              | $    | 6,260 |              |   | $       | 154,715 |         |   | $      | 227,237 |        
|                                        | Freight and handling revenues                                                                                        |                                                         |        | 185,555   |                                         |              |        | 141,100      |            |   |              | 73,800  |         |              |      | 1,009 |              |   |         | 17,001  |         |   |        | 25,808  |        
|                                        | Other revenues                                                                                                       |                                                         |        | 27,267    |                                         |              |        | 31,869       |            |   |              | 13,458  |         |              |      | 101   |              |   |         | 6,031   |         |   |        | 8,472   |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Total revenues                                          |        |           | 1,627,335                               |              |        |              | 1,252,702  |   |              |         | 781,849 |              |      |       | 7,370        |   |         |         | 177,747 |   |        |         | 261,517 | 
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|Costs and expenses:                     |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |   |         |         |         |   |        |        
|                                        | Cost of coal sales (exclusive of items shown separately below)                                                       |                                                         |        | 1,184,092 |                                         |              |        | 920,359      |            |   |              | 626,265 |         |              |      | 6,268 |              |   |         | 158,924 |         |   |        | 219,545 |        
|                                        | Freight and handling costs                                                                                           |                                                         |        | 185,555   |                                         |              |        | 141,100      |            |   |              | 73,800  |         |              |      | 1,009 |              |   |         | 17,001  |         |   |        | 25,808  |        
|                                        | Cost of other revenues                                                                                               |                                                         |        | 23,675    |                                         |              |        | 22,994       |            |   |              | 12,488  |         |              |      | 120   |              |   |         | 7,973   |         |   |        | 8,156   |        
|                                        | Depreciation, depletion and amortization                                                                             |                                                         |        | 73,122    |                                         |              |        | 55,261       |            |   |              | 35,385  |         |              |      | 274   |              |   |         | 6,814   |         |   |        | 7,866   |        
|                                        | Selling, general and administrative expenses (exclusive of
    depreciation and amortization shown separately above) |                                                         |        | 89,102    |                                         |              |        | 43,881       |            |   |              | 21,926  |         |              |      | 471   |              |   |         | 8,797   |         |   |        | 9,370   |        
|                                        | Costs to exit business                                                                                               |                                                         |        |          |                                         |              |        |             |            |   |              |        |         |              |      |      |              |   |         | 25,274  |         |   |        | 3,500   |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Total costs and expenses                                |        |           | 1,555,546                               |              |        |              | 1,183,595  |   |              |         | 769,864 |              |      |       | 8,142        |   |         |         | 224,783 |   |        |         | 274,245 | 
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|Refund of federal black lung excise tax |                                                                                                                      |                                                         |       |           |                                         |              |       |              |            |   |             |         |         |              |     |       |              |   | 2,049   |         |         |   | 16,213 |        
|Other operating income, net             |                                                                                                                      |                                                         |       |           |                                         |              |       |              |            |   |             |         |         |              |     |       |              |   | 1,430   |         |         |   | 94     |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Income (loss) from operations                           |        |           | 71,789                                  |              |        |              | 69,107     |   |              |         | 11,985  |              |      |       | (772         | ) |         |         | (43,557 | ) |        |         | 3,579   | 
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|Other income (expense):                 |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |   |         |         |         |   |        |        
|                                        | Interest expense                                                                                                     |                                                         |        | (29,647   | )                                       |              |        | (20,041      | )          |   |              | (7,848  | )       |              |      | (203  | )            |   |         | (35     | )       |   |        |        |        
|                                        | Interest income                                                                                                      |                                                         |        | 1,064     |                                         |              |        | 531          |            |   |              | 103     |         |              |      | 6     |              |   |         | 2,072   |         |   |        | 1,993   |        
|                                        | Miscellaneous income                                                                                                 |                                                         |        | 91        |                                         |              |        | 722          |            |   |              | 574     |         |              |      |      |              |   |         |        |         |   |        | 1,250   |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Total other income (expense), net                       |        |           | (28,492                                 | )            |        |              | (18,788    | ) |              |         | (7,171  | )            |      |       | (197         | ) |         |         | 2,037   |   |        |         | 3,243   | 
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Income (loss) before income taxes and minority interest |        |           | 43,297                                  |              |        |              | 50,319     |   |              |         | 4,814   |              |      |       | (969         | ) |         |         | (41,520 | ) |        |         | 6,822   | 
|Income tax expense (benefit)            |                                                                                                                      |                                                         | 18,953 |           |                                         |              | 5,150  |              |            |   | 898          |         |         |              | (334 | )     |              |   | (17,198 | )       |         |   | (1,497 | )      
|Minority interest                       |                                                                                                                      |                                                         | 2,918  |           |                                         |              | 22,781 |              |            |   | 1,164        |         |         |              |     |       |              |   |        |         |         |   |       |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Income (loss) from continuing operations                |        |           | 21,426                                  |              |        |              | 22,388     |   |              |         | 2,752   |              |      |       | (635         | ) |         |         | (24,322 | ) |        |         | 8,319   | 
|Loss from discontinued operations       |                                                                                                                      |                                                         | (213   | )         |                                         |              | (2,373 | )            |            |   | (490         | )       |         |              |     |       |              |   |        |         |         |   |       |        
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  
|                                        |                                                                                                                      | Net income (loss)                                       |        | $         | 21,213                                  |              |        | $            | 20,015     |   |              | $       | 2,262   |              |      | $     | (635         | ) |         | $       | (24,322 | ) |        | $       | 8,319   | 
|                                        |                                                                                                                      |                                                         |        |           |                                         |              |        |              |            |   |              |         |         |              |      |       |              |  

|                                                            |                                       |   |           |          |   |   |         |         |   |   |         |          |   |   |         |         |   |   |          |         |   |   |          |        |   |  | 
|----------------------------------------------------------- | ------------------------------------- | - | --------- | -------- | - | - | ------- | ------- | - | - | ------- | -------- | - | - | ------- | ------- | - | - | -------- | ------- | - | - | -------- | ------ | - |  | 
|Balance sheet data (at period end):                         |                                       |   |           |          |   |   |         |         |   |   |         |          |   |   |         |         |   |   |          |         |   |   |          |       
|Cash and cash equivalents                                   |                                       | $ | 39,622    |          |   | $ | 7,391   |         |   | $ | 11,246  |          |   | $ | 8,444   |         |   | $ | 88       |         |   | $ | 175      |       
|Operating and working capital                               |                                       |   | 40,760    |          |   |   | 56,257  |         |   |   | 32,714  |          |   |   | (12,223 | )       |   |   | (4,268   | )       |   |   | (22,958  | )     
|Total assets                                                |                                       |   | 1,016,939 |          |   |   | 477,121 |         |   |   | 379,336 |          |   |   | 108,442 |         |   |   | 156,328  |         |   |   | 139,467  |       
|Notes payable and long-term debt, including current portion |                                       |   | 485,803   |          |   |   | 201,705 |         |   |   | 84,964  |          |   |   | 25,743  |         |   |   |         |         |   |   |         |       
|Stockholders equity and partners capital (deficit)        |                                       |   | 222,951   |          |   |   | 45,933  |         |   |   | 86,367  |          |   |   | 23,384  |         |   |   | (132,997 | )       |   |   | (136,593 | )     
|Statement of cash flows data:                               |                                       |   |           |          |   |   |         |         |   |   |         |          |   |   |         |         |   |   |          |         |   |   |          |       
|Net cash provided by (used in):                             |                                       |   |           |          |   |   |         |         |   |   |         |          |   |   |         |         |   |   |          |         |   |   |          |       
|                                                            | Operating activities                  |   | $         | 153,837  |   |   | $       | 106,776 |   |   | $       | 54,104   |   |   | $       | (295    | ) |   | $        | (13,816 | ) |   | $        | 10,655 |  
|                                                            | Investing activities                  |   |           | (339,387 | ) |   |         | (86,202 | ) |   |         | (100,072 | ) |   |         | (38,893 | ) |   |          | (22,054 | ) |   |          | (9,203 | )
|                                                            | Financing activities                  |   |           | 217,781  |   |   |         | (24,429 | ) |   |         | 48,770   |   |   |         | 47,632  |   |   |          | 35,783  |   |   |          | (1,462 | )
|Capital expenditures                                        |                                       |   | 122,342   |          |   |   | 72,046  |         |   |   | 27,719  |          |   |   | 960     |         |   |   | 21,866   |         |   |   | 10,218   |       
|Other financial data (unaudited)                            |                                       |   |           |          |   |   |         |         |   |   |         |          |   |   |         |         |   |   |          |         |   |   |          |       
|                                                            | EBITDA, as adjusted(1)                |   | $         | 144,908  |   |   | $       | 119,327 |   |   | $       | 47,663   |   |   | $       | (498    | ) |   |          |         |   |   |          |        |  
|                                                            | Ratio of earnings to fixed charges(2) |   |           | 2.32     |   |   |         | 2.34    |   |   |         | 1.46     |   |   |         | (3.55   | ) |   |          | (77.94  | ) |   |          | 12.76  |  
|                                                            | Deficiency amount(2)                  |   |           |         |   |   |         |        |   |   |         |         |   |   |         | (969    | ) |   |          | (41,520 | ) |   |          |       |  






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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | EBITDA, as adjusted, is defined as net income (loss) plus
    interest expense, income tax expense (benefit), depreciation,
    depletion and amortization, less interest income, and adjusted
    for minority interest. EBITDA, as adjusted, is used by
    management to measure operating performance, and management also
    believes it is a useful indicator of our ability to meet debt
    service and capital expenditure requirements. Because EBITDA, as
    adjusted, is not calculated identically by all companies, our
    calculation may not be comparable to similarly titled measures
    of other companies.



|                                         |  |                         |         |         |              |   |         |              |  |   |        |   |  |   |      |  
|---------------------------------------- |  | ----------------------- | ------- | ------- | ------------ | - | ------- | ------------ |  | - | ------ | - |  | - | ---- | -
|                                         |  |                         |         |         |              |   |         | December 14, | 
|                                         |  |                         |         | 2002 to |             
|                                         |  | Year Ended December 31, |         |         | December 31, |  
|                                         |  |                         |         |         |              |  
|                                         |  | 2005                    |         |         | 2004         |   |         | 2003         |  |   | 2002   |  
|                                         |  |                         |         |         |              |   |         |              |  |   |        |  
|Net income (loss)                        |  | $                       | 21,213  |         |              | $ | 20,015  |              |  | $ | 2,262  |   |  | $ | (635 | )
|Interest expense                         |  |                         | 29,647  |         |              |   | 20,041  |              |  |   | 7,848  |   |  |   | 203  |  
|Interest income                          |  |                         | (1,064  | )       |              |   | (531    | )            |  |   | (103   | ) |  |   | (6   | )
|Income tax expense (benefit)             |  |                         | 18,861  |         |              |   | 3,960   |              |  |   | 668    |   |  |   | (334 | )
|Depreciation, depletion and amortization |  |                         | 73,405  |         |              |   | 56,012  |              |  |   | 36,054 |   |  |   | 274  |  
|                                         |  |                         |         |         |              |   |         |              |  |   |        |  
|EBITDA                                   |  |                         | 142,062 |         |              |   | 99,497  |              |  |   | 46,729 |   |  |   | (498 | )
|Minority interest                        |  |                         | 2,846   |         |              |   | 19,830  |              |  |   | 934    |   |  |   |     |  
|                                         |  |                         |         |         |              |   |         |              |  |   |        |  
|EBITDA, as adjusted                      |  | $                       | 144,908 |         |              | $ | 119,327 |              |  | $ | 47,663 |   |  | $ | (498 | )
|                                         |  |                         |         |         |              |   |         |              |  |   |        |  

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | For purposes of this computation,
earnings consists of income (loss) before income taxes
and after minority interest plus fixed charges and amortization of
capitalized interest. Fixed charges consist of interest
expense on all indebtedness plus capitalized interest and
amortization of deferred costs of financing and the estimated
interest component of lease rental expense. The deficiency amount is
calculated for periods for which the ratio of earnings to fixed
charges is less than one-to-one.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



Overview












Predecessor and 2003 Acquisitions.


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Internal Restructuring and Our Parents Initial Public Offering.






NKC Disposition.


46



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Nicewonder Acquisition and 2005 Financing.






| |                                      
| | -------------------------------------
| | Coal Pricing Trends and Uncertainties





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Unaudited Pro Forma Financial Information




|                                  |  |                         |           |   |      |  |           |   | 
|--------------------------------- |  | ----------------------- | --------- | - | ---- |  | --------- | - | 
|                                  |  | Year Ended December 31, |          
|                                  |  |                         |          
|                                  |  | 2005                    |           |   | 2004 | 
|                                  |  |                         |           |   |      | 
|Revenues                          |  | $                       | 1,799,129 |   |      |  | 1,397,315 |  
|                                  |  |                         |           |   |      | 
|Income from continuing operations |  | $                       | 22,315    |   |      |  | 15,676    |  
|Loss from discontinued operations |  |                         | (266      | ) |      |  | (4,054    | )
|                                  |  |                         |           |   |      | 
|Net income                        |  | $                       | 22,049    |   |      |  | 11,622    |  
|                                  |  |                         |           |   |      | 

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| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004



| |        
| | -------
| | Summary





| |         
| | --------
| | Revenues

|                                    |  |                                     |           |  |                     |   |           |           |  |   |         |   |  |  |     |   
|----------------------------------- |  | ----------------------------------- | --------- |  | ------------------- | - | --------- | --------- |  | - | ------- | - |  |  | --- | --
|                                    |  | Year Ended December 31,             |           |  | Increase (Decrease) |  
|                                    |  |                                     |           |  |                     |  
|                                    |  | 2005                                |           |  | 2004                |   |           | $ or Tons |  |   | %       |  
|                                    |  |                                     |           |  |                     |   |           |           |  |   |         |  
|                                    |  | (In thousands, except per ton data) |          
|Coal revenues                       |  | $                                   | 1,414,513 |  |                     | $ | 1,079,733 |           |  | $ | 334,780 |   |  |  | 31  | % 
|Freight and handling revenues       |  |                                     | 185,555   |  |                     |   | 141,100   |           |  |   | 44,455  |   |  |  | 32  | % 
|Other revenues                      |  |                                     | 27,267    |  |                     |   | 31,869    |           |  |   | (4,602  | ) |  |  | (14 | %)
|                                    |  |                                     |           |  |                     |   |           |           |  |   |         |  
|Total revenues                      |  | $                                   | 1,627,335 |  |                     | $ | 1,252,702 |           |  | $ | 374,633 |   |  |  | 30  | % 
|                                    |  |                                     |           |  |                     |   |           |           |  |   |         |  
|Tons sold                           |  |                                     | 26,698    |  |                     |   | 25,326    |           |  |   | 1,372   |   |  |  | 5   | % 
|Coal sales realization per ton sold |  | $                                   | 52.98     |  |                     | $ | 42.63     |           |  | $ | 10.35   |   |  |  | 24  | % 

Coal Revenues.


Freight and Handling Revenues.


Other Revenues.


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| |                   
| | ------------------
| | Costs and Expenses

|                                                                                                                     |  |                                     |           |  |                     |   |           |   |  |   |         |  |  |  |     |  
|-------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | --------- |  | ------------------- | - | --------- | - |  | - | ------- |  |  |  | --- | -
|                                                                                                                     |  | Year Ended December 31.             |           |  | Increase (Decrease) |  
|                                                                                                                     |  |                                     |           |  |                     |  
|                                                                                                                     |  | 2005                                |           |  | 2004                |   |           | $ |  |   | %       | 
|                                                                                                                     |  |                                     |           |  |                     |   |           |   |  |   |         | 
|                                                                                                                     |  | (In thousands, except per ton data) |          
|Cost of coal sales (exclusive of items shown separately below)                                                       |  | $                                   | 1,184,092 |  |                     | $ | 920,359   |   |  | $ | 263,733 |  |  |  | 29  | %
|Freight and handling costs                                                                                           |  |                                     | 185,555   |  |                     |   | 141,100   |   |  |   | 44,455  |  |  |  | 32  | %
|Cost of other revenues                                                                                               |  |                                     | 23,675    |  |                     |   | 22,994    |   |  |   | 681     |  |  |  | 3   | %
|Depreciation, depletion and amortization                                                                             |  |                                     | 73,122    |  |                     |   | 55,261    |   |  |   | 17,861  |  |  |  | 32  | %
|Selling, general and administrative expenses (exclusive of
    depreciation and amortization shown separately above) |  |                                     | 89,102    |  |                     |   | 43,881    |   |  |   | 45,221  |  |  |  | 103 | %
|                                                                                                                     |  |                                     |           |  |                     |   |           |   |  |   |         | 
|Total costs and expenses                                                                                             |  | $                                   | 1,555,546 |  |                     | $ | 1,183,595 |   |  | $ | 371,951 |  |  |  | 31  | %
|                                                                                                                     |  |                                     |           |  |                     |   |           |   |  |   |         | 
|Cost of coal sales per ton sold                                                                                      |  | $                                   | 44.35     |  |                     | $ | 36.34     |   |  | $ | 8.01    |  |  |  | 22  | %

Cost of Coal Sales.


Freight and Handling Costs.


Cost of Other Revenues.


Depreciation, Depletion and Amortization.


Selling, General and Administrative Expenses.


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| |                 
| | ----------------
| | Interest Expense





| |                
| | ---------------
| | Interest Income





| |                   
| | ------------------
| | Income Tax Expense









| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared to Year Ended
    December 31, 2003



| |        
| | -------
| | Summary





| |         
| | --------
| | Revenues

|                                    |  |                                     |           |  |                     |   |         |           |  |   |         |  |  |  |     |  
|----------------------------------- |  | ----------------------------------- | --------- |  | ------------------- | - | ------- | --------- |  | - | ------- |  |  |  | --- | -
|                                    |  | Year Ended December 31,             |           |  | Increase (Decrease) |  
|                                    |  |                                     |           |  |                     |  
|                                    |  | 2004                                |           |  | 2003                |   |         | $ or Tons |  |   | %       | 
|                                    |  |                                     |           |  |                     |   |         |           |  |   |         | 
|                                    |  | (In thousands, except per ton data) |          
|Coal revenues                       |  | $                                   | 1,079,733 |  |                     | $ | 694,591 |           |  | $ | 385,142 |  |  |  | 55  | %
|Freight and handling revenues       |  |                                     | 141,100   |  |                     |   | 73,800  |           |  |   | 67,300  |  |  |  | 91  | %
|Other revenues                      |  |                                     | 31,869    |  |                     |   | 13,458  |           |  |   | 18,411  |  |  |  | 137 | %
|                                    |  |                                     |           |  |                     |   |         |           |  |   |         | 
|Total revenues                      |  | $                                   | 1,252,702 |  |                     | $ | 781,849 |           |  | $ | 470,853 |  |  |  | 60  | %
|                                    |  |                                     |           |  |                     |   |         |           |  |   |         | 
|Tons sold                           |  |                                     | 25,326    |  |                     |   | 21,613  |           |  |   | 3,713   |  |  |  | 17  | %
|Coal sales realization per ton sold |  | $                                   | 42.63     |  |                     | $ | 32.14   |           |  | $ | 10.49   |  |  |  | 33  | %

51



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Coal Revenues.


Freight and Handling Revenues.


Other Revenues.




| |                   
| | ------------------
| | Costs and Expenses

|                                                                                                                     |  |                                     |           |  |                     |   |         |   |  |   |         |  |  |  |     |  
|-------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | --------- |  | ------------------- | - | ------- | - |  | - | ------- |  |  |  | --- | -
|                                                                                                                     |  | Year Ended December 31,             |           |  | Increase (Decrease) |  
|                                                                                                                     |  |                                     |           |  |                     |  
|                                                                                                                     |  | 2004                                |           |  | 2003                |   |         | $ |  |   | %       | 
|                                                                                                                     |  |                                     |           |  |                     |   |         |   |  |   |         | 
|                                                                                                                     |  | (In thousands, except per ton data) |          
|Cost of coal sales (exclusive of items shown separately below)                                                       |  | $                                   | 920,359   |  |                     | $ | 626,265 |   |  | $ | 294,094 |  |  |  | 47  | %
|Freight and handling costs                                                                                           |  |                                     | 141,100   |  |                     |   | 73,800  |   |  |   | 67,300  |  |  |  | 91  | %
|Cost of other revenues                                                                                               |  |                                     | 22,994    |  |                     |   | 12,488  |   |  |   | 10,506  |  |  |  | 84  | %
|Depreciation, depletion and amortization                                                                             |  |                                     | 55,261    |  |                     |   | 35,385  |   |  |   | 19,876  |  |  |  | 56  | %
|Selling, general and administrative expenses (exclusive of
    depreciation and amortization shown separately above) |  |                                     | 43,881    |  |                     |   | 21,926  |   |  |   | 21,955  |  |  |  | 100 | %
|                                                                                                                     |  |                                     |           |  |                     |   |         |   |  |   |         | 
|Total costs and expenses                                                                                             |  | $                                   | 1,183,595 |  |                     | $ | 769,864 |   |  | $ | 413,731 |  |  |  | 54  | %
|                                                                                                                     |  |                                     |           |  |                     |   |         |   |  |   |         | 
|Cost of coal sales per ton sold                                                                                      |  | $                                   | 36.34     |  |                     | $ | 28.98   |   |  | $ | 7.36    |  |  |  | 25  | %

Cost of Coal Sales.


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Freight and Handling Costs.


Cost of Other Revenues.


Depreciation, Depletion and Amortization.


Selling, General and Administrative Expenses.




| |                 
| | ----------------
| | Interest Expense





| |                
| | ---------------
| | Interest Income





| |                   
| | ------------------
| | Income Tax Expense



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Liquidity and Capital Resources










| |           
| | ----------
| | Cash Flows







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| |                                   
| | ----------------------------------
| | Credit Facility and Long-term Debt



|                          |                                        |              |         |         | 
|------------------------- | -------------------------------------- | ------------ | ------- | ------- | 
|                          |                                        | December 31, |        
|                          |                                        | 2005         |        
|                          |                                        |              |        
|10% Senior notes due 2012 |                                        | $            | 175,000 |        
|Term Loan B               |                                        |              | 250,000 |        
|Variable rate term notes  |                                        |              | 293     |        
|Capital lease obligation  |                                        |              | 1,496   |        
|                          |                                        |              |        
|                          | Total long-term debt                   |              |         | 426,789 | 
|Less current portion      |                                        |              | (3,242  | )      
|                          |                                        |              |        
|                          | Long-term debt, net of current portion |              | $       | 423,547 | 
|                          |                                        |              |        



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| |      
| | -----
| | Other





| |                                    
| | -----------------------------------
| | Analysis of Material Debt Covenants







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We must maintain a leverage ratio, defined as
    the ratio of consolidated adjusted debt (consolidated debt less
    unrestricted cash and cash equivalents) to Adjusted EBITDA (as
    defined in the new credit agreement), of not more than 4.00 at
    December 31, 2005, March 31, June 30,
    September 30 and December 31, 2006, 3.75 at
    March 31, June 30, September 30 and
    December 31, 2007, and 3.50 at March 31, 2008 and each
    quarter end thereafter, with Adjusted EBITDA being computed
    using the most recent four quarters; and
|
| |  | We must maintain an interest coverage ratio,
    defined as the ratio of Adjusted EBITDA to cash interest
    expense, of 2.50 or greater on the last day of any fiscal
    quarter.                                                                                                                                                                                                                                                                                                                                                                             





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|                                          |  |                |         |   |              |   |        |               |  |   |              |   |  |               |        |   |  |   |         |  
|----------------------------------------- |  | -------------- | ------- | - | ------------ | - | ------ | ------------- |  | - | ------------ | - |  | ------------- | ------ | - |  | - | ------- | -
|                                          |  | Three Months   |         |   | Three Months |   |        | Three Months  |  |   | Three Months |   |  | Twelve Months |       
|                                          |  | Ended          |         |   | Ended        |   |        | Ended         |  |   | Ended        |   |  | Ended         |       
|                                          |  | March 31,      |         |   | June 30,     |   |        | September 30, |  |   | December 31, |   |  | December 31,  |       
|                                          |  | 2005           |         |   | 2005         |   |        | 2005          |  |   | 2005         |   |  | 2005          |       
|                                          |  |                |         |   |              |   |        |               |  |   |              |   |  |               |       
|                                          |  | (In thousands) |        
|Net Income                                |  | $              | (25,429 | ) |              | $ | 26,019 |               |  | $ | 8,210        |   |  | $             | 12,413 |   |  | $ | 21,213  |  
|Interest expense, net                     |  |                | 5,533   |   |              |   | 6,456  |               |  |   | 6,439        |   |  |               | 10,155 |   |  |   | 28,583  |  
|Income tax expense                        |  |                | 2,457   |   |              |   | 9,050  |               |  |   | 3,542        |   |  |               | 3,812  |   |  |   | 18,861  |  
|Depreciation, depletion, and amortization |  |                | 14,480  |   |              |   | 15,048 |               |  |   | 16,277       |   |  |               | 27,600 |   |  |   | 73,405  |  
|                                          |  |                |         |   |              |   |        |               |  |   |              |   |  |               |       
|EBITDA                                    |  |                | (2,959  | ) |              |   | 56,573 |               |  |   | 34,468       |   |  |               | 53,980 |   |  |   | 142,062 |  
|Minority interest(1)                      |  |                | 2,846   |   |              |   |       |               |  |   |             |   |  |               |       |   |  |   | 2,846   |  
|Other allowable adjustments               |  |                |         |   |              |   | 683    |               |  |   |              |   |  |               | 452    |   |  |   | 1,135   |  
|Accretion expense                         |  |                | 878     |   |              |   | 878    |               |  |   | 878          |   |  |               | 880    |   |  |   | 3,514   |  
|Amortization of deferred gains            |  |                | (358    | ) |              |   | (358   | )             |  |   | (358         | ) |  |               | (402   | ) |  |   | (1,476  | )
|Nicewonder EBITDA                         |  |                | 16,509  |   |              |   | 16,509 |               |  |   | 18,581       |   |  |               | 4,832  |   |  |   | 56,431  |  
|Stock-based compensation charge           |  |                | 36,407  |   |              |   | 3,381  |               |  |   | 3,381        |   |  |               | 3,350  |   |  |   | 46,519  |  
|                                          |  |                |         |   |              |   |        |               |  |   |              |   |  |               |       
|Adjusted EBITDA                           |  | $              | 53,323  |   |              | $ | 77,666 |               |  | $ | 56,950       |   |  | $             | 63,092 |   |  | $ | 251,031 |  
|                                          |  |                |         |   |              |   |        |               |  |   |              |   |  |               |       
|Leverage ratio(2)                         |  |                |         |   |              |   |        |               |  |   |              |   |  |               |        |   |  |   | 1.85    |  
|Interest coverage ratio(3)                |  |                |         |   |              |   |        |               |  |   |              |   |  |               |        |   |  |   | 8.12    |  






|    |                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Because our credit facility and our senior notes are issued by
    our subsidiaries, we are required to adjust our EBITDA for our
    minority interest which does not exist at the subsidiary level.
|   
|(2) | Leverage ratio is defined in our credit facility as total debt
    divided by adjusted EBITDA.                                                                                                       
|   
|(3) | Interest coverage ratio is defined in our credit facility as
    adjusted EBITDA divided by cash interest expense.                                                                                   

Contractual Obligations




|                                     |  |      |         |  |           |   |        |           |  |   |            |  |  |       |         |  |  |   |         | 
|------------------------------------ |  | ---- | ------- |  | --------- | - | ------ | --------- |  | - | ---------- |  |  | ----- | ------- |  |  | - | ------- | 
|                                     |  | 2006 |         |  | 2007-2008 |   |        | 2009-2010 |  |   | After 2010 |  |  | Total |        
|                                     |  |      |         |  |           |   |        |           |  |   |            |  |  |       |        
|Long-term debt and capital leases(1) |  | $    | 3,242   |  |           | $ | 5,816  |           |  | $ | 5,231      |  |  | $     | 412,500 |  |  | $ | 426,789 | 
|Equipment purchase commitments       |  |      | 64,342  |  |           |   |       |           |  |   |           |  |  |       |        |  |  |   | 64,342  | 
|Operating leases                     |  |      | 5,099   |  |           |   | 4,668  |           |  |   | 1,590      |  |  |       | 7,284   |  |  |   | 18,641  | 
|Minimum royalties                    |  |      | 10,388  |  |           |   | 18,821 |           |  |   | 16,650     |  |  |       | 27,859  |  |  |   | 73,718  | 
|Coal purchase commitments            |  |      | 258,490 |  |           |   | 27,420 |           |  |   |           |  |  |       |        |  |  |   | 285,910 | 
|Coal contract buyout                 |  |      | 680     |  |           |   | 1,360  |           |  |   | 1,247      |  |  |       |        |  |  |   | 3,287   | 
|                                     |  |      |         |  |           |   |        |           |  |   |            |  |  |       |        
|Total                                |  | $    | 342,241 |  |           | $ | 58,085 |           |  | $ | 24,718     |  |  | $     | 447,643 |  |  | $ | 872,687 | 
|                                     |  |      |         |  |           |   |        |           |  |   |            |  |  |       |        






|    |                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Long-term debt and capital leases include principal amounts due
    in the years shown. Interest payable on these obligations,
    assuming a rate of 8.0% on our variable rate loan, would be
    approximately $37.6 million in 2006, $74.3 million in
    2007 to 2008, $73.4 million in 2009 to 2010, and
    $62.4 million after 2010.

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end-of


|                               |  |        |       |  |           |   |        |           |  |   |               |  |  |       |         |  |  |   |         | 
|------------------------------ |  | ------ | ----- |  | --------- | - | ------ | --------- |  | - | ------------- |  |  | ----- | ------- |  |  | - | ------- | 
|                               |  | Within |       |  |           |   |        |           |  |   |              
|                               |  | 1 Year |       |  | 2-3 Years |   |        | 4-5 Years |  |   | After 5 Years |  |  | Total |        
|                               |  |        |       |  |           |   |        |           |  |   |               |  |  |       |        
|Reclamation                    |  | $      | 7,190 |  |           | $ | 9,873  |           |  | $ | 12,865        |  |  | $     | 45,895  |  |  | $ | 75,823  | 
|Postretirement                 |  |        | 115   |  |           |   | 711    |           |  |   | 2,707         |  |  |       | 283,833 |  |  |   | 287,366 | 
|Workers compensation benefits |  |        | 1,019 |  |           |   | 875    |           |  |   | 309           |  |  |       | 4,717   |  |  |   | 6,920   | 
|                               |  |        |       |  |           |   |        |           |  |   |               |  |  |       |        
|Total                          |  | $      | 8,324 |  |           | $ | 11,459 |           |  | $ | 15,881        |  |  | $     | 334,445 |  |  | $ | 370,109 | 
|                               |  |        |       |  |           |   |        |           |  |   |               |  |  |       |        

Off-Balance Sheet Arrangements












Outlook




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Critical Accounting Estimates and Assumptions




Reclamation. Accounting for Asset Retirement Obligations.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Discount Rate. SFAS No. 143 requires that asset
    retirement obligations be recorded at fair value. In accordance
    with the provisions of SFAS No. 143, we utilize
    discounted cash flow techniques to estimate the fair value of
    our obligations. We base our discount rate on the rates of
    treasury bonds with maturities similar to expected mine lives,
    adjusted for our credit standing.                                                                                                                                  
|
| |  | Third-Party Margin. SFAS No. 143 requires the
    measurement of an obligation to be based upon the amount a third
    party would demand to assume the obligation. Because we plan to
    perform a significant amount of the reclamation activities with
    internal resources, a third-party margin was added to the
    estimated costs of these activities. This margin was estimated
    based upon our historical experience with contractors performing
    similar types of reclamation activities. The inclusion of this
    margin will

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| |  |                                                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | result in a recorded obligation that is greater than our
    estimates of our cost to perform the reclamation activities. If
    our cost estimates are accurate, the excess of the recorded
    obligation over the cost incurred to perform the work will be
    recorded as a gain at the time that reclamation work is
    completed.



Coal Reserves.




| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | geological conditions;                                                                      
|
| |  | historical production from the area compared with production
    from other producing areas;
|
| |  | the assumed effects of regulations and taxes by governmental
    agencies;                  
|
| |  | assumptions governing future prices; and                                                    
|
| |  | future operating costs.                                                                     



Postretirement Medical Benefits.




|                                                        |  |                 |     |  |                 |   |      |  
|------------------------------------------------------- |  | --------------- | --- |  | --------------- | - | ---- | -
|                                                        |  | One-Percentage- |     |  | One-Percentage- |  
|                                                        |  | Point Increase  |     |  | Point Decrease  |  
|                                                        |  |                 |     |  |                 |  
|Effect on total service and interest cost components    |  | $               | 97  |  |                 | $ | (60  | )
|Effect on accumulated postretirement benefit obligation |  |                 | 959 |  |                 |   | (740 | )



|                                                        |  |                |        |   |                |   |       | 
|------------------------------------------------------- |  | -------------- | ------ | - | -------------- | - | ----- | 
|                                                        |  | One Half-      |        |   | One Half-      |  
|                                                        |  | Percentage-    |        |   | Percentage-    |  
|                                                        |  | Point Increase |        |   | Point Decrease |  
|                                                        |  |                |        |   |                |  
|Effect on total service and interest cost components    |  | $              | (367   | ) |                | $ | 384   | 
|Effect on accumulated postretirement benefit obligation |  |                | (4,350 | ) |                |   | 4,813 | 

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-65-year




Workers Compensation.


Coal Workers Pneumoconiosis.


Income Taxes.




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New Accounting Pronouncements


Share-Based Payment Accounting for
Stock  Based Compensation. Accounting for Stock Issued to Employees




Discussion of Seasonality Impacts on Operations









|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Discussions about Market
    Risk









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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting
Firm














| |             
| | ------------
| | /s/ KPMG LLP





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                               |                                                                                                |                                                                      |         |         |           |  |         |        |         | 
|-------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------- | ------- | --------- |  | ------- | ------ | ------- | 
|                                                               |                                                                                                | December 31,                                                         |        
|                                                               |                                                                                                |                                                                      |        
|                                                               |                                                                                                | 2005                                                                 |         |         | 2004      | 
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | (In thousands)                                                       |        
|ASSETS                                                        
|Current assets:                                                |                                                                                                |                                                                      |         |         |           |  |         |       
|                                                               | Cash and cash equivalents                                                                      |                                                                      | $       | 39,622  |           |  | $       | 7,391  |        
|                                                               | Trade accounts receivable, net                                                                 |                                                                      |         | 147,961 |           |  |         | 95,828 |        
|                                                               | Notes and other receivables                                                                    |                                                                      |         | 10,330  |           |  |         | 10,835 |        
|                                                               | Inventories                                                                                    |                                                                      |         | 84,885  |           |  |         | 54,569 |        
|                                                               | Due from affiliate                                                                             |                                                                      |         | 3,423   |           |  |         | 323    |        
|                                                               | Deferred income taxes                                                                          |                                                                      |         |        |           |  |         | 4,674  |        
|                                                               | Prepaid expenses and other current assets                                                      |                                                                      |         | 35,975  |           |  |         | 28,915 |        
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total current assets                                                 |         |         | 322,196   |  |         |        | 202,535 | 
|Property, plant, and equipment, net                            |                                                                                                |                                                                      | 582,750 |         |           |  | 217,964 |       
|Goodwill                                                       |                                                                                                |                                                                      | 18,641  |         |           |  | 18,641  |       
|Other intangibles, net                                         |                                                                                                |                                                                      | 11,014  |         |           |  | 1,155   |       
|Deferred income taxes                                          |                                                                                                |                                                                      | 38,967  |         |           |  |        |       
|Other assets                                                   |                                                                                                |                                                                      | 43,371  |         |           |  | 36,826  |       
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total assets                                                         |         | $       | 1,016,939 |  |         | $      | 477,121 | 
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                              
|LIABILITIES AND STOCKHOLDERS EQUITY AND PARTNERS
    CAPITAL
|Current liabilities:                                           |                                                                                                |                                                                      |         |         |           |  |         |       
|                                                               | Current portion of long-term debt                                                              |                                                                      | $       | 3,242   |           |  | $       | 1,693  |        
|                                                               | Notes payable                                                                                  |                                                                      |         | 59,014  |           |  |         | 15,228 |        
|                                                               | Bank overdraft                                                                                 |                                                                      |         | 17,060  |           |  |         | 10,024 |        
|                                                               | Trade accounts payable                                                                         |                                                                      |         | 99,746  |           |  |         | 51,050 |        
|                                                               | Deferred income taxes                                                                          |                                                                      |         | 11,243  |           |  |         |       |        
|                                                               | Accrued expenses and other current liabilities                                                 |                                                                      |         | 91,131  |           |  |         | 68,283 |        
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total current liabilities                                            |         |         | 281,436   |  |         |        | 146,278 | 
|Long-term debt, net of current portion                         |                                                                                                |                                                                      | 423,547 |         |           |  | 184,784 |       
|Workers compensation benefits                                 |                                                                                                |                                                                      | 5,901   |         |           |  | 4,678   |       
|Postretirement medical benefits                                |                                                                                                |                                                                      | 24,461  |         |           |  | 15,637  |       
|Asset retirement obligation                                    |                                                                                                |                                                                      | 46,296  |         |           |  | 32,888  |       
|Deferred gains on sale of property interests                   |                                                                                                |                                                                      | 5,762   |         |           |  | 5,516   |       
|Deferred income taxes                                          |                                                                                                |                                                                      |        |         |           |  | 7,718   |       
|Other liabilities                                              |                                                                                                |                                                                      | 6,585   |         |           |  | 4,911   |       
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total liabilities                                                    |         |         | 793,988   |  |         |        | 402,410 | 
|                                                               |                                                                                                |                                                                      |         |         |           | 
|Minority interest                                              |                                                                                                |                                                                      |        |         |           |  | 28,778  |       
|                                                               |                                                                                                |                                                                      |         |         |           | 
|Stockholders equity and partners capital:                    |                                                                                                |                                                                      |         |         |           |  |         |       
|Alpha NR Holding, Inc.:                                        |                                                                                                |                                                                      |         |         |           |  |         |       
|                                                               | Preferred stock  par value $0.01, 1,000 shares
    authorized, none issued                    |                                                                      |         |        |           |  |         |       |        
|                                                               | Common stock  par value $0.01, 1,000 shares
    authorized, 100 shares issued and outstanding |                                                                      |         |        |           |  |         |       |        
|                                                               | Additional paid-in capital                                                                     |                                                                      |         | 204,438 |           |  |         | 22,153 |        
|                                                               | Retained earnings                                                                              |                                                                      |         | 18,513  |           |  |         | 18,828 |        
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total Alpha NR Holding, Inc. stockholders equity                    |         |         | 222,951   |  |         |        | 40,981  | 
|Alpha Fund IX Holdings, L.P.:                                  |                                                                                                |                                                                      |         |         |           |  |         |       
|                                                               | Partners capital                                                                              |                                                                      |         |        |           |  |         | 4,952  |        
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total stockholders equity and partners capital                     |         |         | 222,951   |  |         |        | 45,933  | 
|                                                               |                                                                                                |                                                                      |         |         |           | 
|                                                               |                                                                                                | Total liabilities and stockholders equity and
    partners capital |         | $       | 1,016,939 |  |         | $      | 477,121 | 
|                                                               |                                                                                                |                                                                      |         |         |           | 



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME


|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |           |        |       |         |         |       | 
|---------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ---------- | --------- | --------- | ------ | ------ | --------- | --------- | ------ | ----- | ------- | ------- | ----- | 
|                                   |                                                                                                                      | Year Ended December 31,                                                         |           
|                                   |                                                                                                                      |                                                                                 |           
|                                   |                                                                                                                      | 2005                                                                            |            |           | 2004      |        |        | 2003      |          
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | (In thousands, except per share amounts)                                        |           
|Revenues:                          |                                                                                                                      |                                                                                 |            |           |           |        |        |           |           |        |       |        
|                                   | Coal revenues                                                                                                        |                                                                                 | $          | 1,414,513 |           |        | $      | 1,079,733 |           |        | $     | 694,591 |        
|                                   | Freight and handling revenues                                                                                        |                                                                                 |            | 185,555   |           |        |        | 141,100   |           |        |       | 73,800  |        
|                                   | Other revenues                                                                                                       |                                                                                 |            | 27,267    |           |        |        | 31,869    |           |        |       | 13,458  |        
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Total revenues                                                                  |            |           | 1,627,335 |        |        |           | 1,252,702 |        |       |         | 781,849 |      
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|Costs and expenses:                |                                                                                                                      |                                                                                 |            |           |           |        |        |           |           |        |       |        
|                                   | Cost of coal sales (exclusive of items shown separately below)                                                       |                                                                                 |            | 1,184,092 |           |        |        | 920,359   |           |        |       | 626,265 |        
|                                   | Freight and handling costs                                                                                           |                                                                                 |            | 185,555   |           |        |        | 141,100   |           |        |       | 73,800  |        
|                                   | Cost of other revenues                                                                                               |                                                                                 |            | 23,675    |           |        |        | 22,994    |           |        |       | 12,488  |        
|                                   | Depreciation, depletion and amortization                                                                             |                                                                                 |            | 73,122    |           |        |        | 55,261    |           |        |       | 35,385  |        
|                                   | Selling, general and administrative expenses (exclusive of
    depreciation and amortization shown separately above) |                                                                                 |            | 89,102    |           |        |        | 43,881    |           |        |       | 21,926  |        
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Total costs and expenses                                                        |            |           | 1,555,546 |        |        |           | 1,183,595 |        |       |         | 769,864 |      
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Income from operations                                                          |            |           | 71,789    |        |        |           | 69,107    |        |       |         | 11,985  |      
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|Other income (expense):            |                                                                                                                      |                                                                                 |            |           |           |        |        |           |           |        |       |        
|                                   | Interest expense                                                                                                     |                                                                                 |            | (29,647   | )         |        |        | (20,041   | )         |        |       | (7,848  | )      
|                                   | Interest income                                                                                                      |                                                                                 |            | 1,064     |           |        |        | 531       |           |        |       | 103     |        
|                                   | Miscellaneous income                                                                                                 |                                                                                 |            | 91        |           |        |        | 722       |           |        |       | 574     |        
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Total other income (expense), net                                               |            |           | (28,492   | )      |        |           | (18,788   | )      |       |         | (7,171  | )    
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Income from continuing operations before income taxes and
    minority interest |            |           | 43,297    |        |        |           | 50,319    |        |       |         | 4,814   |      
|Income tax expense                 |                                                                                                                      |                                                                                 | 18,953     |           |           |        | 5,150  |           |           |        | 898   |        
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Income before minority interest                                                 |            |           | 24,344    |        |        |           | 45,169    |        |       |         | 3,916   |      
|Minority interest                  |                                                                                                                      |                                                                                 | 2,918      |           |           |        | 22,781 |           |           |        | 1,164 |        
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Income from continuing operations                                               |            |           | 21,426    |        |        |           | 22,388    |        |       |         | 2,752   |      
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|Discontinued operations (Note 25): |                                                                                                                      |                                                                                 |            |           |           |        |        |           |           |        |       |        
|                                   |                                                                                                                      | Loss from discontinued operations before income taxes and
    minority interest |            |           | (378      | )      |        |           | (6,514    | )      |       |         | (950    | )    
|                                   |                                                                                                                      | Income tax benefit                                                              |            |           | (93       | )      |        |           | (1,190    | )      |       |         | (230    | )    
|                                   |                                                                                                                      | Minority interest                                                               |            |           | (72       | )      |        |           | (2,951    | )      |       |         | (230    | )    
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      | Loss from discontinued operations                                               |            |           | (213      | )      |        |           | (2,373    | )      |       |         | (490    | )    
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          
|                                   |                                                                                                                      |                                                                                 | Net income |           | $         | 21,213 |        |           | $         | 20,015 |       |         | $       | 2,262 | 
|                                   |                                                                                                                      |                                                                                 |            |           |           |        |        |           |          



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
PARTNERS CAPITAL


|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------- | - | ----------- | -------------- | - | -------- | ------------ |  | ----- | ------------- | - |  | --------- | ---------- | - | --------- | - | ------ | - |  | - | ------- | -
|                                                                                                                   |  |                                          |   | ANR Fund IX |                |   |         
|                                                                                                                   |  | Alpha NR Holding, Inc.                   |   |             | Holdings, L.P. |   |         
|                                                                                                                   |  |                                          |   |             |                |   |          | Total        | 
|                                                                                                                   |  |                                          |   | Retained    |                |   |          |              |  |       | Stockholders |  
|                                                                                                                   |  |                                          |   | Additional  |                |   | Earnings |              |  | Total |               |   |  |           | Equity and |  
|                                                                                                                   |  | Common                                   |   |             | Paid-In        |   |          | (Accumulated |  |       | Stockholders |   |  | Partners |            |   | Partners |  
|                                                                                                                   |  | Stock                                    |   |             | Capital        |   |          | Deficit)     |  |       | Equity        |   |  | Capital   |            |   | Capital   |  
|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |  
|                                                                                                                   |  | (In thousands, except per share amounts) |  
|Balances, December 31, 2002                                                                                        |  | $                                        |  |             |                | $ | 21,384   |              |  | $     | (529          | ) |  | $         | 20,855     |   |           | $ | 2,529  |   |  | $ | 23,384  |  
|Net income                                                                                                         |  |                                          |  |             |                |   |          |              |  |       | 1,971         |   |  |           | 1,971      |   |           |   | 291    |   |  |   | 2,262   |  
|Contributed capital                                                                                                |  |                                          |  |             |                |   | 15,153   |              |  |       |              |   |  |           | 15,153     |   |           |   | 1,868  |   |  |   | 17,021  |  
|Note payable to affiliate contributed to capital                                                                   |  |                                          |  |             |                |   | 39,173   |              |  |       |              |   |  |           | 39,173     |   |           |   | 4,827  |   |  |   | 44,000  |  
|Noncash distribution of Virginia Tax Credit                                                                        |  |                                          |  |             |                |   |         |              |  |       |              |   |  |           |           |   |           |   | (300   | ) |  |   | (300    | )
|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |  
|Balances, December 31, 2003                                                                                        |  |                                          |  |             |                |   | 75,710   |              |  |       | 1,442         |   |  |           | 77,152     |   |           |   | 9,215  |   |  |   | 86,367  |  
|Net income                                                                                                         |  |                                          |  |             |                |   |         |              |  |       | 17,386        |   |  |           | 17,386     |   |           |   | 2,629  |   |  |   | 20,015  |  
|Noncash distribution of Virginia Tax Credit                                                                        |  |                                          |  |             |                |   |         |              |  |       |              |   |  |           |           |   |           |   | (292   | ) |  |   | (292    | )
|Distributions                                                                                                      |  |                                          |  |             |                |   | (53,557  | )            |  |       |              |   |  |           | (53,557    | ) |           |   | (6,600 | ) |  |   | (60,157 | )
|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |  
|Balances, December 31, 2004                                                                                        |  |                                          |  |             |                |   | 22,153   |              |  |       | 18,828        |   |  |           | 40,981     |   |           |   | 4,952  |   |  |   | 45,933  |  
|Noncash distribution of Virginia Tax Credit                                                                        |  |                                          |  |             |                |   |         |              |  |       |              |   |  |           |           |   |           |   | (40    | ) |  |   | (40     | )
|Net income prior to Internal Restructuring                                                                         |  |                                          |  |             |                |   |         |              |  |       | 2,320         |   |  |           | 2,320      |   |           |   | 379    |   |  |   | 2,699   |  
|Distribution to First Reserve Fund IX, L.P. and ANR
    Fund IX Holdings, L.P. prior to the Internal Restructuring |  |                                          |  |             |                |   |         |              |  |       | (7,920        | ) |  |           | (7,920     | ) |           |   | (1,243 | ) |  |   | (9,163  | )
|Adjustments to give effect to the Internal Restructuring (Note 2)                                                  |  |                                          |  |             |                |   | 48,168   |              |  |       | (13,228       | ) |  |           | (34,940    | ) |           |   | (4,048 | ) |  |   | 30,892  |  
|Change in net deferred income taxes recognized upon the
completion of the Internal Restructuring                   |  |                                          |  |             |                |   | 34,498   |              |  |       |              |   |  |           | 34,498     |   |           |   |       |   |  |   | 34,498  |  
|Capital contribution by Parent for stock-based compensation                                                        |  |                                          |  |             |                |   | 46,435   |              |  |       |              |   |  |           | 46,435     |   |           |   |       |   |  |   | 46,435  |  
|Capital contribution by Parent for equity issued by Parent in
connection with Acquisition                          |  |                                          |  |             |                |   | 53,184   |              |  |       |              |   |  |           | 53,184     |   |           |   |       |   |  |   | 53,184  |  
|Net income subsequent to Internal Restructuring                                                                    |  |                                          |  |             |                |   |         |              |  |       | 18,513        |   |  |           | 18,513     |   |           |   |       |   |  |   | 18,513  |  
|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |  
|Balances, December 31, 2005                                                                                        |  | $                                        |  |             |                |   | 204,438  |              |  |       | 18,513        |   |  |           | 222,951    |   |           |   |       |   |  |   | 222,951 |  
|                                                                                                                   |  |                                          |   |             |                |   |          |              |  |       |               |   |  |           |            |   |           |  



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |        |         |         |          |        |         |          |  
|--------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------- | ----------------------------------------- | ------ | ------- | -------- | ------- | ------ | ------- | ------- | -------- | ------ | ------- | -------- | -
|                      |                                                                                       | Year Ended December 31,                           |                                               
|                      |                                                                                       |                                                   |                                               
|                      |                                                                                       | 2005                                              |                                                |                                           | 2004   |         |          | 2003    |       
|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |       
|                      |                                                                                       | (In thousands)                                    |                                               
|Operating activities: |                                                                                       |                                                   |                                                |                                           |        |         |          |         |        |         |         |         
|                      | Net income                                                                            |                                                   | $                                              | 21,213                                    |        |         | $        | 20,015  |        |         | $       | 2,262    |       
|                      | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                   |                                                |                                           |        |         |          |         |        |         |         |          |       
|                      |                                                                                       | Depreciation, depletion and amortization          |                                                |                                           | 73,405 |         |          |         | 56,012 |         |         |          | 36,054 |        
|                      |                                                                                       | Amortization and write-off of debt issuance costs |                                                |                                           | 3,357  |         |          |         | 4,474  |         |         |          | 1,276  |        
|                      |                                                                                       | Minority interest                                 |                                                |                                           | 2,846  |         |          |         | 19,830 |         |         |          | 934    |        
|                      |                                                                                       | Accretion of asset retirement obligation          |                                                |                                           | 3,514  |         |          |         | 3,301  |         |         |          | 2,699  |        
|                      |                                                                                       | Virginia tax credit                               |                                                |                                           | (343   | )       |          |         | (4,872 | )       |         |          | (4,313 | )      
|                      |                                                                                       | Stock-based compensation  non-cash               |                                                |                                           | 46,520 |         |          |         | 91     |         |         |          |       |        
|                      |                                                                                       | Gain on sale of discontinued operations           |                                                |                                           | (704   | )       |          |         |       |         |         |          |       |        
|                      |                                                                                       | Impairment charge                                 |                                                |                                           |       |         |          |         | 5,100  |         |         |          |       |        
|                      |                                                                                       | Deferred income taxes                             |                                                |                                           | 3,736  |         |          |         | 2,711  |         |         |          | 668    |        
|                      |                                                                                       | Other non-cash items                              |                                                |                                           | (515   | )       |          |         | 42     |         |         |          | (550   | )      
|                      |                                                                                       | Changes in operating assets and liabilities:      |                                                |                                           |        |         |          |         |        |         |         |          |        |        
|                      |                                                                                       |                                                   | Trade accounts receivable                      |                                           |        | (52,102 | )        |         |        | (25,775 | )       |          |        | (21,056 | )       
|                      |                                                                                       |                                                   | Notes and other receivables                    |                                           |        | 13,276  |          |         |        | (1,062  | )       |          |        | (2,358  | )       
|                      |                                                                                       |                                                   | Inventories                                    |                                           |        | (24,279 | )        |         |        | (21,040 | )       |          |        | 13,014  |         
|                      |                                                                                       |                                                   | Due from affiliate                             |                                           |        | (3,423  | )        |         |        |        |         |          |        |        |         
|                      |                                                                                       |                                                   | Prepaid expenses and other current assets      |                                           |        | 12,587  |          |         |        | 5,568   |         |          |        | 793     |         
|                      |                                                                                       |                                                   | Other assets                                   |                                           |        | (6,033  | )        |         |        | 805     |         |          |        | (3,051  | )       
|                      |                                                                                       |                                                   | Trade accounts payable                         |                                           |        | 48,462  |          |         |        | 9,742   |         |          |        | 12,234  |         
|                      |                                                                                       |                                                   | Accrued expenses and other current liabilities |                                           |        | 5,453   |          |         |        | 27,243  |         |          |        | 16,392  |         
|                      |                                                                                       |                                                   | Workers compensation benefits                 |                                           |        | 1,155   |          |         |        | 3,018   |         |          |        | 1,660   |         
|                      |                                                                                       |                                                   | Postretirement medical benefits                |                                           |        | 8,824   |          |         |        | 4,975   |         |          |        | 1,236   |         
|                      |                                                                                       |                                                   | Asset retirement obligation expenditures       |                                           |        | (4,142  | )        |         |        | (3,306  | )       |          |        | (2,252  | )       
|                      |                                                                                       |                                                   | Other liabilities                              |                                           |        | 1,030   |          |         |        | (96     | )       |          |        | (1,538  | )       
|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |       
|                      |                                                                                       |                                                   |                                                | Net cash provided by operating activities |        |         | 153,837  |         |        |         | 106,776 |          |        |         | 54,104   |  
|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |       
|Investing activities: |                                                                                       |                                                   |                                                |                                           |        |         |          |         |        |         |         |         
|                      | Capital expenditures                                                                  |                                                   |                                                | (122,342                                  | )      |         |          | (72,046 | )      |         |         | (27,719  | )     
|                      | Proceeds from disposition of property, plant, and equipment                           |                                                   |                                                | 5,450                                     |        |         |          | 1,096   |        |         |         | 65,174   |       
|                      | Purchase of net assets of acquired companies                                          |                                                   |                                                | (221,869                                  | )      |         |          | (2,891  | )      |         |         | (133,757 | )     
|                      | Equity investment                                                                     |                                                   |                                                | (1,234                                    | )      |         |          | (4,500  | )      |         |         |         |       
|                      | Issuance of note receivable to coal supplier                                          |                                                   |                                                |                                          |        |         |          | (10,000 | )      |         |         |         |       
|                      | Collections on note receivable from coal supplier                                     |                                                   |                                                | 5,608                                     |        |         |          | 1,519   |        |         |         |         |       
|                      | Payment of additional consideration on previous acquisition                           |                                                   |                                                | (5,000                                    | )      |         |          | 0       |        |         |         |         |       
|                      | Decrease (increase) in due from affiliate                                             |                                                   |                                                |                                          |        |         |          | 620     |        |         |         | (3,770   | )     
|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |       
|                      |                                                                                       |                                                   |                                                | Net cash used in investing activities     |        |         | (339,387 | )       |        |         | (86,202 | )        |        |         | (100,072 | )
|                      |                                                                                       |                                                   |                                                |                                           |        |         |          |         |       



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |         |   |        |         |        | 
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | ------- | ------- | - | ------ | -------- | ------- | - | ------ | ------- | ------ | 
|                                                     |                                                                                         | Year Ended December 31,                             |       
|                                                     |                                                                                         |                                                     |       
|                                                     |                                                                                         | 2005                                                |        |         | 2004    |   |        | 2003     |        
|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |        
|                                                     |                                                                                         | (In thousands)                                      |       
|Financing activities:                                |                                                                                         |                                                     |        |         |         |   |        |          |         |   |        |        
|                                                     | Repayments of notes payable                                                             |                                                     |        | (15,228 | )       |   |        | (14,425  | )       |   |        | (15,600 | )     
|                                                     | Proceeds from issuance of long-term debt                                                |                                                     |        | 323,000 |         |   |        | 175,000  |         |   |        | 58,518  |       
|                                                     | Repayments on long-term debt                                                            |                                                     |        | (82,743 | )       |   |        | (61,422  | )       |   |        | (30,054 | )     
|                                                     | Increase in bank overdraft                                                              |                                                     |        | 7,036   |         |   |        | 4,170    |         |   |        | 5,854   |       
|                                                     | Distributions to prior members of ANR Holdings, LLC prior to
    Internal Restructuring |                                                     |        | (7,732  | )       |   |        | (115,572 | )       |   |        | (3,085  | )     
|                                                     | Debt issuance costs                                                                     |                                                     |        | (8,201  | )       |   |        | (10,525  | )       |   |        | (5,181  | )     
|                                                     | Advances from affiliates                                                                |                                                     |        |        |         |   |        |         |         |   |        | 20,047  |       
|                                                     | Capital contributions                                                                   |                                                     |        |        |         |   |        |         |         |   |        | 3,118   |       
|                                                     | Issuance of common stock                                                                |                                                     |        |        |         |   |        |         |         |   |        | 15,153  |       
|                                                     | Other                                                                                   |                                                     |        | 1,649   |         |   |        | (1,655   | )       |   |        |        |       
|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |        
|                                                     |                                                                                         | Net cash provided by (used in) financing activities |        |         | 217,781 |   |        |          | (24,429 | ) |        |         | 48,770 | 
|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |        
|Net increase (decrease) in cash and cash equivalents |                                                                                         |                                                     | 32,231 |         |         |   | (3,855 | )        |         |   | 2,802  |        
|Cash and cash equivalents at beginning of period     |                                                                                         |                                                     | 7,391  |         |         |   | 11,246 |          |         |   | 8,444  |        
|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |        
|Cash and cash equivalents at end of period           |                                                                                         | $                                                   | 39,622 |         |         | $ | 7,391  |          |         | $ | 11,246 |        
|                                                     |                                                                                         |                                                     |        |         |         |   |        |          |        



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(In thousands, except percentages and share data)




|    |                                   
|--- | ----------------------------------
|(1) | Business and Basis of Presentation



| |                          
| | -------------------------
| | Organization and Business













| |                      
| | ---------------------
| | Basis of Presentation





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                            
|--- | -------------------------------------------
|(2) | Internal Restructuring and Public Offerings





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Alpha Coal Management, LLC (ACM) was dissolved and
    liquidated, after which (1) the interests in ANR Holdings
    previously held by ACM were distributed to and held directly by
    the Companys officers and employees who were owners of ACM
    prior to its dissolution and (2) outstanding options to
    purchase units in ACM were automatically converted into options
    to purchase up to 596,985 shares of Alpha Natural
    Resources, Inc. common stock at an exercise price of
    $12.73 per share, and Alpha Natural Resources, Inc. assumed
    the obligations of ACM under the Alpha Coal Management, LLC 2004
    Long-Term Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | Alpha Natural Resources, Inc. assumed the obligations of ANR
    Holdings to make distributions to (1) affiliates of AMCI in
    an aggregate amount of $6,000, representing the approximate
    incremental tax resulting from the recognition of additional tax
    liability resulting from the Internal Restructuring and
    (2) First Reserve Fund IX, L.P. in an aggregate amount
    of approximately $4,500, representing the approximate value of
    tax attributes conveyed as a result of the Internal
    Restructuring (collectively, the Sponsor Distributions). The
    Sponsor Distributions to affiliates of AMCI are payable in five
    equal installments on the dates for which estimated income tax
    payments are due in each of April 2005, June 2005, September
    2005, January 2006 and April 2006. The Sponsor Distributions to
    First Reserve Fund IX, L.P. are payable in three
    installments of approximately $2,100, $2,100 and $300 on
    December 15, 2007, 2008 and 2009, respectively. The Sponsor
    Distributions will be payable in cash or, to the extent Alpha
    Natural Resources, Inc. is not permitted by the terms of the
    senior credit facility or the indenture governing the senior
    notes to pay the Sponsor Distributions in cash, in shares of
    Alpha Natural Resources, Inc. common stock.
|
| |  | First Reserve Fund IX, L.P., the direct parent of Alpha NR
    Holding, Inc., contributed all of the outstanding common stock
    of Alpha NR Holding, Inc. to Alpha Natural Resources, Inc. in
    exchange for 12,462,992 shares of Alpha Natural Resources,
    Inc. common stock and demand promissory notes in an aggregate
    adjusted principal amount of $206,734.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | ANR Fund IX Holdings, L.P., Madison Capital Funding, LLC
    and affiliates of AMCI contributed all of their membership
    interests in ANR Holdings to Alpha Natural Resources, Inc. in
    exchange for 13,052,431 shares of Alpha Natural Resources,
    Inc. common stock and demand promissory notes in an aggregate
    adjusted principal amount of $310,958.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | The officers and employees who were the members of ACM
    contributed all of their interests in ANR Holdings to Alpha
    Natural Resources, Inc. in exchange for 2,772,157 shares of
    Alpha Natural Resources, Inc. common stock. Of these shares,
    82,297 were for the officers and employees purchased
    interest. One half of the remainder, 1,344,930 shares, were
    immediately vested and resulted in compensation expense being
    recorded at $19 per share (based upon the initial public
    offering price for the Companys stock on February 18,
    2005), or $25,554 in total. The remaining 1,344,930 shares vest
    over the two year period ending December 31, 2006. The
    $25,554 in compensation expense related to these shares was
    deferred and is being amortized to expense over the vesting
    period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | The Board of Directors of Alpha Natural Resources, Inc. declared
    a pro rata distribution to the former members of ANR Holdings in
    an aggregate amount equal to the net proceeds Alpha Natural
    Resources, Inc. received upon the exercise by the underwriters
    of their over-allotment option with respect to the public
    offering described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Company, the FR Affiliates and affiliates of AMCI amended
    certain of the post-closing arrangements previously entered into
    as part of the Companys acquisition of U.S. AMCI.                                                    
|
| |  | Alpha Natural Resources, Inc. contributed the membership
    interests in ANR Holdings received in the Internal Restructuring
    to Alpha NR Holding, Inc. and another indirect wholly-owned
    subsidiary of Alpha Natural Resources, Inc.







|    |                                                         
|--- | --------------------------------------------------------
|(3) | Summary of Significant Accounting Policies and Practices



|    |                          
|--- | -------------------------
|(a) | Cash and Cash Equivalents





|    |                                                                  
|--- | -----------------------------------------------------------------
|(b) | Trade Accounts Receivable and Allowance for Doubtful
    Accounts





|    |            
|--- | -----------
|(c) | Inventories





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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                               
|--- | ------------------------------
|(d) | Property, Plant, and Equipment

units-of




|    |                                
|--- | -------------------------------
|(e) | Impairment of Long-Lived Assets

Accounting for the
Impairment or Disposal of Long-lived Assets




|    |         
|--- | --------
|(f) | Goodwill

Goodwill and Other Intangible
Assets




|    |                          
|--- | -------------------------
|(g) | Health Insurance Programs





|    |             
|--- | ------------
|(h) | Income Taxes

Accounting for Income Taxes


72



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                            
|--- | ---------------------------
|(i) | Asset Retirement Obligation

Accounting for Asset Retirement
Obligations.






|    |          
|--- | ---------
|(j) | Royalties





|                                                      |  |   |        |  
|----------------------------------------------------- |  | - | ------ | -
|Balance at December 31, 2002                          |  | $ |       |  
|Additions associated with acquisitions                |  |   | 4,694  |  
|                                                      |  |   |       
|Balance at December 31, 2003                          |  |   | 4,694  |  
|Provision for non-recoupable advance mining royalties |  |   | 758    |  
|Write-offs of advance mining royalties                |  |   | (11    | )
|                                                      |  |   |       
|Balance at December 31, 2004                          |  |   | 5,441  |  
|Provision for non-recoupable advance mining royalties |  |   | 580    |  
|Write-offs of advance mining royalties                |  |   | (1,191 | )
|                                                      |  |   |       
|Balance at December 31, 2005                          |  | $ | 4,830  |  
|                                                      |  |   |       



|    |                    
|--- | -------------------
|(k) | Revenue Recognition



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|    |                         
|--- | ------------------------
|(l) | Deferred Financing Costs





|    |                                                         
|--- | --------------------------------------------------------
|(m) | Virginia Coalfield Employment Enhancement Tax
    Credit





|    |                                                                   
|--- | ------------------------------------------------------------------
|(n) | Workers Compensation and Pneumoconiosis (Black Lung)
    Benefits



| |                      
| | ---------------------
| | Workers Compensation





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                    
| | -------------------
| | Black Lung Benefits









|    |                                            
|--- | -------------------------------------------
|(o) | Postretirement Benefits Other Than Pensions





|    |                   
|--- | ------------------
|(p) | Equity Investments





|    |                          
|--- | -------------------------
|(q) | Equity-Based Compensation

Accounting for Stock
Issued to Employees


75



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                               |  |                         |        |   |      |   |        |  
|-------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                               |  | Year Ended December 31, |       
|                                                                                                               |  |                         |       
|                                                                                                               |  | 2005                    |        |   | 2004 |  
|                                                                                                               |  |                         |        |   |      |  
|Net income                                                                                                     |  | $                       | 21,213 |   |      | $ | 20,015 |  
|Add: stock option expense included in net income,
    net of income taxes and minority interest                |  |                         | 484    |   |      |   | 50     |  
|Deduct: stock option expense determined under fair-value method,
    net of income taxes and minority interest |  |                         | (1,322 | ) |      |   | (72    | )
|                                                                                                               |  |                         |        |   |      |  
|Pro forma net income, adjusted for effect of fair value of stock
    options                                   |  | $                       | 20,375 |   |      | $ | 19,993 |  
|                                                                                                               |  |                         |        |   |      |  





|                         |  |   |      |  
|------------------------ |  | - | ---- | -
|Expected life (years)    |  |   | 4.0  |  
|Expected volatility      |  |   | 38.0 | %
|Risk-free interest rate  |  |   | 3.38 | %
|Expected annual dividend |  | $ | 0.10 |  





|    |                              
|--- | -----------------------------
|(r) | New Accounting Pronouncements

Share-Based Payment Accounting for
Stock Based Compensation. Accounting for Stock
Issued to Employees


76



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                 
|--- | ----------------
|(s) | Use of Estimates





|    |                  
|--- | -----------------
|(t) | Reclassifications





|    |            
|--- | -----------
|(4) | Inventories



|                       |                   |              |        |        |      |   |        |        | 
|---------------------- | ----------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                       |                   | December 31, |       
|                       |                   |              |       
|                       |                   | 2005         |        |        | 2004 |  
|                       |                   |              |        |        |      |  
|Raw coal               |                   | $            | 6,401  |        |      | $ | 3,888  |       
|Saleable coal          |                   |              | 65,318 |        |      |   | 42,899 |       
|Materials and supplies |                   |              | 13,166 |        |      |   | 7,782  |       
|                       |                   |              |        |        |      |  
|                       | Total inventories |              | $      | 84,885 |      |   | $      | 54,569 | 
|                       |                   |              |        |        |      |  

77



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                          
|--- | -----------------------------------------
|(5) | Prepaid Expenses and Other Current Assets



|                         |                                                 |              |        |        |      |   |        |        | 
|------------------------ | ----------------------------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                         |                                                 | December 31, |       
|                         |                                                 |              |       
|                         |                                                 | 2005         |        |        | 2004 |  
|                         |                                                 |              |        |        |      |  
|Prepaid insurance        |                                                 | $            | 20,306 |        |      | $ | 16,577 |       
|Advance mining royalties |                                                 |              | 3,435  |        |      |   | 4,831  |       
|Refundable income taxes  |                                                 |              | 6,012  |        |      |   | 2,798  |       
|Other prepaid expenses   |                                                 |              | 6,222  |        |      |   | 4,709  |       
|                         |                                                 |              |        |        |      |  
|                         | Total prepaid expenses and other current assets |              | $      | 35,975 |      |   | $      | 28,915 | 
|                         |                                                 |              |        |        |      |  



|    |                               
|--- | ------------------------------
|(6) | Property, Plant, and Equipment



|                                                           |                                     |              |         |         |      |   |         |         | 
|---------------------------------------------------------- | ----------------------------------- | ------------ | ------- | ------- | ---- | - | ------- | ------- | 
|                                                           |                                     | December 31, |        
|                                                           |                                     |              |        
|                                                           |                                     | 2005         |         |         | 2004 |  
|                                                           |                                     |              |         |         |      |  
|Land                                                       |                                     | $            | 11,986  |         |      | $ | 5,380   |        
|Mineral rights                                             |                                     |              | 297,573 |         |      |   | 85,245  |        
|Plant and mining equipment                                 |                                     |              | 372,189 |         |      |   | 188,891 |        
|Vehicles                                                   |                                     |              | 3,351   |         |      |   | 2,058   |        
|Mine development                                           |                                     |              | 39,017  |         |      |   | 11,205  |        
|Office equipment and software                              |                                     |              | 8,170   |         |      |   | 7,264   |        
|Construction in progress                                   |                                     |              | 5,419   |         |      |   | 1,769   |        
|                                                           |                                     |              |         |         |      |  
|                                                           |                                     |              | 737,705 |         |      |   | 301,812 |        
|Less accumulated depreciation, depletion, and amortization |                                     |              | 154,955 |         |      |   | 83,848  |        
|                                                           |                                     |              |         |         |      |  
|                                                           | Property, plant, and equipment, net |              | $       | 582,750 |      |   | $       | 217,964 | 
|                                                           |                                     |              |         |         |      |  







|    |         
|--- | --------
|(7) | Goodwill



|                                         |  |   |        | 
|---------------------------------------- |  | - | ------ | 
|Balance as of December 31, 2002          |  | $ |       | 
|Acquisition of U.S. AMCI                 |  |   | 17,121 | 
|                                         |  |   |       
|Balance as of December 31, 2003          |  |   | 17,121 | 
|2004 Adjustments                         |  |   | 1,520  | 
|                                         |  |   |       
|Balance as of December 31, 2004 and 2005 |  | $ | 18,641 | 
|                                         |  |   |       



78



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                  
|--- | -----------------
|(8) | Other Intangibles



|                       |  |                   |        |  |                   |   |       |                |  |   |              |  |  |   |       | 
|---------------------- |  | ----------------- | ------ |  | ----------------- | - | ----- | -------------- |  | - | ------------ |  |  | - | ----- | 
|                       |  | December 31, 2005 |        |  | December 31, 2004 |  
|                       |  |                   |        |  |                   |  
|                       |  | Gross Carrying    |        |  | Accumulated       |   |       | Gross Carrying |  |   | Accumulated  | 
|                       |  | Amount            |        |  | Amortization      |   |       | Amount         |  |   | Amortization | 
|                       |  |                   |        |  |                   |   |       |                |  |   |              | 
|Sales contracts        |  | $                 | 7,227  |  |                   | $ | 1,757 |                |  | $ | 3,248        |  |  | $ | 2,249 | 
|Customer relationships |  |                   | 4,762  |  |                   |   | 159   |                |  |   |             |  |  |   |      | 
|Noncompete agreements  |  |                   | 1,177  |  |                   |   | 236   |                |  |   | 250          |  |  |   | 94    | 
|                       |  |                   |        |  |                   |   |       |                |  |   |              | 
|                       |  | $                 | 13,166 |  |                   | $ | 2,152 |                |  | $ | 3,498        |  |  | $ | 2,343 | 
|                       |  |                   |        |  |                   |   |       |                |  |   |              | 





|    |             
|--- | ------------
|(9) | Other Assets



|                                     |                    |              |        |        |      |   |        |        | 
|------------------------------------ | ------------------ | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                                     |                    | December 31, |       
|                                     |                    |              |       
|                                     |                    | 2005         |        |        | 2004 |  
|                                     |                    |              |        |        |      |  
|Advance mining royalties, net        |                    | $            | 11,557 |        |      | $ | 8,841  |       
|Deferred loan costs, net             |                    |              | 15,081 |        |      |   | 10,237 |       
|Deferred common stock offering costs |                    |              |       |        |      |   | 3,665  |       
|Notes receivable                     |                    |              | 102    |        |      |   | 3,451  |       
|Investment in terminaling facility   |                    |              | 1,005  |        |      |   | 1,005  |       
|Investment in Excelven Pty Ltd       |                    |              | 5,735  |        |      |   | 4,500  |       
|Virginia tax credit receivable       |                    |              | 9,418  |        |      |   | 4,806  |       
|Other                                |                    |              | 473    |        |      |   | 321    |       
|                                     |                    |              |        |        |      |  
|                                     | Total other assets |              | $      | 43,371 |      |   | $      | 36,826 | 
|                                     |                    |              |        |        |      |  



|     |              
|---- | -------------
|(10) | Notes Payable



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                               
|---- | ----------------------------------------------
|(11) | Accrued Expenses and Other Current Liabilities



|                                                                   |                                                      |              |        |        |      |   |        |        | 
|------------------------------------------------------------------ | ---------------------------------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                                                                   |                                                      | December 31, |       
|                                                                   |                                                      |              |       
|                                                                   |                                                      | 2005         |        |        | 2004 |  
|                                                                   |                                                      |              |        |        |      |  
|Wages and employee benefits                                        |                                                      | $            | 24,874 |        |      | $ | 20,201 |       
|Current portion of asset retirement obligation                     |                                                      |              | 7,190  |        |      |   | 6,691  |       
|Taxes other than income taxes                                      |                                                      |              | 10,697 |        |      |   | 6,136  |       
|Freight                                                            |                                                      |              | 9,717  |        |      |   | 12,376 |       
|Contractor escrow                                                  |                                                      |              | 771    |        |      |   | 1,615  |       
|Deferred gains on sales of property interests                      |                                                      |              | 941    |        |      |   | 808    |       
|Deferred revenues                                                  |                                                      |              | 4,589  |        |      |   | 1,086  |       
|Current portion of self-insured workers compensation
    benefits |                                                      |              | 1,019  |        |      |   | 911    |       
|Workers compensation insurance premium payable                    |                                                      |              | 4,320  |        |      |   | 3,567  |       
|Interest payable                                                   |                                                      |              | 3,944  |        |      |   | 1,632  |       
|Additional consideration for acquisition                           |                                                      |              | 13,738 |        |      |   | 5,000  |       
|Accrued initial public offering costs                              |                                                      |              |       |        |      |   | 2,010  |       
|Other                                                              |                                                      |              | 9,331  |        |      |   | 6,250  |       
|                                                                   |                                                      |              |        |        |      |  
|                                                                   | Total accrued expenses and other current liabilities |              | $      | 91,131 |      |   | $      | 68,283 | 
|                                                                   |                                                      |              |        |        |      |  



|     |               
|---- | --------------
|(12) | Long-Term Debt



|                          |                      |                                        |         |       |         |   |         |       |         | 
|------------------------- | -------------------- | -------------------------------------- | ------- | ----- | ------- | - | ------- | ----- | ------- | 
|                          |                      | December 31,                           |        
|                          |                      |                                        |        
|                          |                      | 2005                                   |         |       | 2004    |  
|                          |                      |                                        |         |       |         |  
|Term loan                 |                      | $                                      | 250,000 |       |         | $ |        |      
|10% Senior notes due 2012 |                      |                                        | 175,000 |       |         |   | 175,000 |      
|Revolving credit facility |                      |                                        |        |       |         |   | 8,000   |      
|Variable rate term notes  |                      |                                        | 293     |       |         |   | 1,466   |      
|Capital lease obligation  |                      |                                        | 1,496   |       |         |   | 1,995   |      
|Other                     |                      |                                        |        |       |         |   | 16      |      
|                          |                      |                                        |         |       |         |  
|                          |                      | Total long-term debt                   |         |       | 426,789 |   |         |       | 186,477 | 
|                          | Less current portion |                                        |         | 3,242 |         |   |         | 1,693 |        
|                          |                      |                                        |         |       |         |  
|                          |                      | Long-term debt, net of current portion |         | $     | 423,547 |   |         | $     | 184,784 | 
|                          |                      |                                        |         |       |         |  



| |                 
| | ----------------
| | Debt Refinancing



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












| |                               
| | ------------------------------
| | 10% Senior Notes Due June 2012









81



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                               
| | ------------------------------
| | Prior Senior Credit Facilities

1 2


1 2




| |                   
| | ------------------
| | Other Indebtedness











82



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |            |                      |   |         |         | 
|------------------------ | ---------- | -------------------- | - | ------- | ------- | 
|Year ending December 31: |            |                      |   |        
|                         | 2006       |                      | $ | 3,242   |        
|                         | 2007       |                      |   | 3,000   |        
|                         | 2008       |                      |   | 2,816   |        
|                         | 2009       |                      |   | 2,731   |        
|                         | 2010       |                      |   | 2,500   |        
|                         | Thereafter |                      |   | 412,500 |        
|                         |            |                      |  
|                         |            | Total long-term debt |   | $       | 426,789 | 
|                         |            |                      |  



|                                  |      |                                                |      |     |       | 
|--------------------------------- | ---- | ---------------------------------------------- | ---- | --- | ----- | 
|Year ending December 31:          |      |                                                |      |    
|                                  | 2006 |                                                | $    | 600 |      
|                                  | 2007 |                                                |      | 600 |      
|                                  | 2008 |                                                |      | 360 |      
|                                  | 2009 |                                                |      | 240 |      
|                                  |      |                                                |     
|                                  |      | Total future minimum lease payments            |      |     | 1,800 | 
|Less amount representing interest |      |                                                | (304 | )  
|                                  |      |                                                |     
|                                  |      | Present value of future minimum lease payments |      |     | 1,496 | 
|Less current portion              |      |                                                | (449 | )  
|                                  |      |                                                |     
|                                  |      | Long-term capital lease obligation             |      | $   | 1,047 | 
|                                  |      |                                                |     

83



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##### Table of Contents



ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                            
|---- | ---------------------------
|(13) | Asset Retirement Obligation



|                                      |                                                        |  |        |        | 
|------------------------------------- | ------------------------------------------------------ |  | ------ | ------ | 
|                                      | Total asset retirement obligation at December 31, 2002 |  | $      | 15,107 | 
|Coastal Coal Company, LLC acquisition |                                                        |  | 12,861 |       
|U.S. AMCI acquisition                 |                                                        |  | 8,768  |       
|Mears Enterprises, Inc. acquisition   |                                                        |  | 2,079  |       
|Accretion for 2003                    |                                                        |  | 2,699  |       
|Sites added in 2003                   |                                                        |  | 1,165  |       
|Expenditures in 2003                  |                                                        |  | (2,252 | )     
|                                      |                                                        |  |       
|                                      | Total asset retirement obligation at December 31, 2003 |  |        | 40,427 | 
|Accretion for 2004                    |                                                        |  | 3,301  |       
|2004 acquisitions                     |                                                        |  | 1,189  |       
|Sites added in 2004                   |                                                        |  | 3,657  |       
|Revisions in estimated cash flows     |                                                        |  | (5,689 | )     
|Expenditures in 2004                  |                                                        |  | (3,306 | )     
|                                      |                                                        |  |       
|                                      | Total asset retirement obligation at December 31, 2004 |  |        | 39,579 | 
|Accretion for 2005                    |                                                        |  | 3,514  |       
|2005 acquisitions                     |                                                        |  | 7,883  |       
|Sites added in 2005                   |                                                        |  | 3,977  |       
|Revisions in estimated cash flows     |                                                        |  | 2,676  |       
|Expenditures in 2005                  |                                                        |  | (4,142 | )     
|                                      |                                                        |  |       
|                                      | Total asset retirement obligation at December 31, 2005 |  | $      | 53,487 | 
|                                      |                                                        |  |       



|     |                                              
|---- | ---------------------------------------------
|(14) | Deferred Gains on Sales of Property Interests







84



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ALPHA NR HOLDING INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |                                    
|---- | -----------------------------------
|(15) | Fair Value of Financial Instruments

Disclosures About Fair Value of
Financial Instruments


Cash and Cash Equivalents, Trade Accounts Receivables,
Note Payable, Bank Overdraft, Trade Accounts Payable, and
Other Current Liabilities:


Notes Receivable:


Long-term Debt:


|                          |                      |              |         |         |      |   |         |         | 
|------------------------- | -------------------- | ------------ | ------- | ------- | ---- | - | ------- | ------- | 
|                          |                      | December 31, |        
|                          |                      |              |        
|                          |                      | 2005         |         |         | 2004 |  
|                          |                      |              |         |         |      |  
|10% Senior notes due 2012 |                      | $            | 193,375 |         |      | $ | 209,970 |        
|Term loan                 |                      |              | 250,000 |         |      |   |        |        
|Revolving credit facility |                      |              |        |         |      |   | 8,000   |        
|Variable rate term notes  |                      |              | 293     |         |      |   | 1,466   |        
|Capital lease obligation  |                      |              | 1,496   |         |      |   | 2,196   |        
|Other                     |                      |              |        |         |      |   | 16      |        
|                          |                      |              |         |         |      |  
|                          | Total long-term debt |              | $       | 445,164 |      |   | $       | 221,648 | 
|                          |                      |              |         |         |      |  



|     |                       
|---- | ----------------------
|(16) | Employee Benefit Plans



| |                                                        
| | -------------------------------------------------------
| | (a)     Postretirement Benefits
    Other Than Pensions





85



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ALPHA NR HOLDING INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                        |                                                     |                                                 |         |        |        |   |         |        |        |   |         |       |        | 
|--------------------------------------- | --------------------------------------------------- | ----------------------------------------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ----- | ------ | 
|                                        |                                                     | Year Ended December 31,                         |        
|                                        |                                                     |                                                 |        
|                                        |                                                     | 2005                                            |         |        | 2004   |   |         | 2003   |       
|                                        |                                                     |                                                 |         |        |        |   |         |        |       
|Change in benefit obligation:           |                                                     |                                                 |         |        |        |   |         |        |        |   |         |      
|                                        | Accumulated benefit obligation-beginning of period: |                                                 | $       | 43,783 |        |   | $       | 11,532 |        |   | $       | 5,951 |       
|                                        |                                                     | Service cost                                    |         |        | 3,906  |   |         |        | 2,266  |   |         |       | 656    | 
|                                        |                                                     | Interest cost                                   |         |        | 2,489  |   |         |        | 1,375  |   |         |       | 580    | 
|                                        |                                                     | Actuarial (gain) or loss                        |         |        | 3,514  |   |         |        | 1,526  |   |         |       | 870    | 
|                                        |                                                     | Benefits paid                                   |         |        | (60    | ) |         |        | (38    | ) |         |       |       | 
|                                        |                                                     | Plan amendments                                 |         |        | (4,147 | ) |         |        | 27,122 |   |         |       |       | 
|                                        |                                                     | Postretirement benefits assumed in acquisitions |         |        |       |   |         |        |       |   |         |       | 3,475  | 
|                                        |                                                     |                                                 |         |        |        |   |         |        |       
|                                        |                                                     | Accumulated benefit obligation-end of period    |         | $      | 49,485 |   |         | $      | 43,783 |   |         | $     | 11,532 | 
|                                        |                                                     |                                                 |         |        |        |   |         |        |       
|Funded status                           |                                                     | $                                               | (49,485 | )      |        | $ | (43,783 | )      |        | $ | (11,532 | )    
|Unrecognized prior service cost         |                                                     |                                                 | 19,114  |        |        |   | 25,725  |        |        |   |        |      
|Unrecognized net actuarial loss         |                                                     |                                                 | 5,910   |        |        |   | 2,421   |        |        |   | 870     |      
|                                        |                                                     |                                                 |         |        |        |   |         |        |       
|Accrued postretirement medical benefits |                                                     | $                                               | (24,461 | )      |        | $ | (15,637 | )      |        | $ | (10,662 | )    
|                                        |                                                     |                                                 |         |        |        |   |         |        |       



|                                   |                           |                         |       |       |      |   |       |       |  |   |     |       | 
|---------------------------------- | ------------------------- | ----------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | --- | ----- | 
|                                   |                           | Year Ended December 31, |      
|                                   |                           |                         |      
|                                   |                           | 2005                    |       |       | 2004 |   |       | 2003  | 
|                                   |                           |                         |       |       |      |   |       |       | 
|Service cost                       |                           | $                       | 3,906 |       |      | $ | 2,266 |       |  | $ | 656 |      
|Interest cost                      |                           |                         | 2,489 |       |      |   | 1,375 |       |  |   | 580 |      
|Amortization of net (gain) or loss |                           |                         | 27    |       |      |   | (24   | )     |  |   |    |      
|Amortization of prior service cost |                           |                         | 2,463 |       |      |   | 1,396 |       |  |   |    |      
|                                   |                           |                         |       |       |      |   |       |       | 
|                                   | Net periodic benefit cost |                         | $     | 8,885 |      |   | $     | 5,013 |  |   | $   | 1,236 | 
|                                   |                           |                         |       |       |      |   |       |       | 





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ALPHA NR HOLDING INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                        |  |            |     |  |            |   |      |  
|------------------------------------------------------- |  | ---------- | --- |  | ---------- | - | ---- | -
|                                                        |  | One        |     |  | One        |  
|                                                        |  | Percentage |     |  | Percentage |  
|                                                        |  | Point      |     |  | Point      |  
|                                                        |  | Increase   |     |  | Decrease   |  
|                                                        |  |            |     |  |            |  
|Effect on accumulated postretirement benefit obligation |  | $          | 959 |  |            | $ | (740 | )
|Effect on total service and interest cost components    |  |            | 97  |  |            |   | (60  | )





|                         |           |       |   |        |        | 
|------------------------ | --------- | ----- | - | ------ | ------ | 
|Year ending December 31: |           |       |   |       
|                         | 2006      |       | $ | 115    |       
|                         | 2007      |       |   | 143    |       
|                         | 2008      |       |   | 568    |       
|                         | 2009      |       |   | 1,105  |       
|                         | 2010      |       |   | 1,601  |       
|                         | 2011-2015 |       |   | 17,817 |       
|                         |           |       |  
|                         |           | Total |   | $      | 21,349 | 
|                         |           |       |  



Accounting and Disclosure
Requirements related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003


Accounting
and Disclosure Requirements related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003




| |                     
| | --------------------
| | (b)     Savings Plan



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                      
| | -------------------------------------
| | (c)     Self-Insured Medical
    Plan





| |                                        
| | ---------------------------------------
| | (d)     Multi-Employer Pension
    Plan







| |                                             
| | --------------------------------------------
| | (e)     Equity-Based Compensation
    Awards







88



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                   |  |           |           |           |          |   |       | 
|---------------------------------- |  | --------- | --------- | --------- | -------- | - | ----- | 
|                                   |  |           |           | Weighted- |         
|                                   |  |           |           | Average   |         
|                                   |  | Number of |           |           | Exercise |  
|                                   |  | Shares    |           |           | Price    |  
|                                   |  |           |           |           |          |  
|Conversion of ACM options          |  |           | 596,985   |           |          | $ | 12.73 | 
|Granted at initial public offering |  |           | 692,905   |           |          | $ | 19.00 | 
|Additional grants                  |  |           | 70,000    |           |          | $ | 23.69 | 
|Exercised                          |  |           | (15,601   | )         |          | $ | 12.73 | 
|Forfeited                          |  |           | (90,696   | )         |          | $ | 14.11 | 
|                                   |  |           |           |           |          |  
|Outstanding at December 31, 2005   |  |           | 1,253,593 |           |          | $ | 16.71 | 
|                                   |  |           |           |           |          |  



|                         |  |             |         |           |              |  |           |          |  |   |       | 
|------------------------ |  | ----------- | ------- | --------- | ------------ |  | --------- | -------- |  | - | ----- | 
|                         |  |             |         | Weighted- |              |  | Weighted- |         
|                         |  |             |         | Average   |              |  | Average   |         
|                         |  | Number      |         |           | Remaining    |  |           | Exercise | 
|Range of Exercise Prices |  | Outstanding |         |           | Life (Years) |  |           | Price    | 
|                         |  |             |         |           |              |  |           |          | 
|$12.73                   |  |             | 510,688 |           |              |  | 8.8       |          |  | $ | 12.73 | 
|$19.00                   |  |             | 672,905 |           |              |  | 9.1       |          |  | $ | 19.00 | 
|$23.50 - $24.85          |  |             | 70,000  |           |              |  | 9.4       |          |  | $ | 23.69 | 







|     |                               
|---- | ------------------------------
|(17) | Workers Compensation Benefits





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |                           
|---- | --------------------------
|(18) | Related Party Transactions











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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|     |            
|---- | -----------
|(19) | Commitments



| |                 
| | ----------------
| | Operating Leases



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                         |            |          |   |           |           |  |      |           |       |  |       |        |        |  |   |        |        | 
|------------------------ | ---------- | -------- | - | --------- | --------- |  | ---- | --------- | ----- |  | ----- | ------ | ------ |  | - | ------ | ------ | 
|                         |            |          |   | Equipment |           |  | Coal |           |       | 
|                         |            | Facility |   |           | and Other |  |      | Royalties |       |  | Total |       
|                         |            |          |   |           |           |  |      |           |       |  |       |       
|Year ending December 31: |            |          |   |           |           |  |      |           |       |  |       |        |        |  |   |       
|                         | 2006       |          | $ | 1,237     |           |  | $    | 3,862     |       |  | $     | 10,388 |        |  | $ | 15,487 |       
|                         | 2007       |          |   | 1,020     |           |  |      | 2,206     |       |  |       | 10,079 |        |  |   | 13,305 |       
|                         | 2008       |          |   | 918       |           |  |      | 524       |       |  |       | 8,742  |        |  |   | 10,184 |       
|                         | 2009       |          |   | 833       |           |  |      |          |       |  |       | 8,496  |        |  |   | 9,329  |       
|                         | 2010       |          |   | 757       |           |  |      |          |       |  |       | 8,154  |        |  |   | 8,911  |       
|                         | Thereafter |          |   | 7,284     |           |  |      |          |       |  |       | 27,859 |        |  |   | 35,143 |       
|                         |            |          |   |           |           |  |      |           |       |  |       |       
|                         |            | Total    |   | $         | 12,049    |  |      | $         | 6,592 |  |       | $      | 73,718 |  |   | $      | 92,359 | 
|                         |            |          |   |           |           |  |      |           |       |  |       |       







| |                  
| | -----------------
| | Other Commitments





|     |                         
|---- | ------------------------
|(20) | Mergers and Acquisitions



| |                 
| | ----------------
| | 2005 Acquisition



| |                      
| | ---------------------
| | Nicewonder Coal Group



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                               |                           |   |         |         |  
|------------------------------ | ------------------------- | - | ------- | ------- | -
|Current assets                 |                           | $ | 22,937  |        
|Property, plant, and equipment |                           |   | 311,315 |        
|Intangibles                    |                           |   | 11,064  |        
|Other noncurrent assets        |                           |   | 1,704   |        
|                               |                           |   |        
|                               | Total assets acquired     |   |         | 347,020 |  
|                               |                           |   |        
|Current liabilities            |                           |   | (10,236 | )      
|Asset retirement obligation    |                           |   | (7,229  | )      
|Other noncurrent liabilities   |                           |   | (1,355  | )      
|                               |                           |   |        
|                               | Total liabilities assumed |   |         | (18,820 | )
|                               |                           |   |        
|                               | Net assets acquired       |   | $       | 328,200 |  
|                               |                           |   |        





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |  |                         |           |   |      |  |           |   | 
|--------------------------------- |  | ----------------------- | --------- | - | ---- |  | --------- | - | 
|                                  |  | Year Ended December 31, |          
|                                  |  |                         |          
|                                  |  | 2005                    |           |   | 2004 | 
|                                  |  |                         |           |   |      | 
|Revenues                          |  | $                       | 1,799,129 |   |      |  | 1,397,315 |  
|                                  |  |                         |           |   |      | 
|Income from continuing operations |  | $                       | 22,315    |   |      |  | 15,676    |  
|Loss from discontinued operations |  |                         | (266      | ) |      |  | (4,054    | )
|                                  |  |                         |           |   |      | 
|Net income                        |  | $                       | 22,049    |   |      |  | 11,622    |  
|                                  |  |                         |           |   |      | 



| |                  
| | -----------------
| | 2004 Acquisitions



| |                             
| | ----------------------------
| | Moravian Run Reclamation Co.





| |                          
| | -------------------------
| | Cooney Bros. Coal Company





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                  
| | -----------------
| | 2003 Acquisitions



| |                     
| | --------------------
| | Coastal Coal Company







|                               |                           |   |         |         |  
|------------------------------ | ------------------------- | - | ------- | ------- | -
|Current assets                 |                           | $ | 31,614  |        
|Property, plant, and equipment |                           |   | 40,342  |        
|Intangibles                    |                           |   | 3,937   |        
|Other noncurrent assets        |                           |   | 18,269  |        
|                               |                           |   |        
|                               | Total assets acquired     |   |         | 94,162  |  
|                               |                           |   |        
|Current liabilities            |                           |   | (11,700 | )      
|Asset retirement obligation    |                           |   | (12,861 | )      
|Other noncurrent liabilities   |                           |   | (1,431  | )      
|Notes payable                  |                           |   | (398    | )      
|                               |                           |   |        
|                               | Total liabilities assumed |   |         | (26,390 | )
|                               |                           |   |        
|                               | Net assets acquired       |   | $       | 67,772  |  
|                               |                           |   |        

American Metals and Coal International, Inc.








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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                |                           |   |         |         |  
|------------------------------- | ------------------------- | - | ------- | ------- | -
|Current assets                  |                           | $ | 47,005  |        
|Property, plant, and equipment  |                           |   | 94,732  |        
|Goodwill                        |                           |   | 17,121  |        
|Other noncurrent assets         |                           |   | 976     |        
|                                |                           |   |        
|                                | Total assets acquired     |   |         | 159,834 |  
|                                |                           |   |        
|Current liabilities             |                           |   | (17,307 | )      
|Asset retirement obligation     |                           |   | (8,768  | )      
|Postretirement medical benefits |                           |   | (3,475  | )      
|Other noncurrent liabilities    |                           |   | (1,051  | )      
|Notes payable                   |                           |   | (7,934  | )      
|                                |                           |   |        
|                                | Total liabilities assumed |   |         | (38,535 | )
|                                |                           |   |        
|                                | Net assets acquired       |   | $       | 121,299 |  
|                                |                           |   |        



| |                        
| | -----------------------
| | Mears Enterprises, Inc.







|                               |                       |   |        |        | 
|------------------------------ | --------------------- | - | ------ | ------ | 
|Current assets                 |                       | $ | 280    |       
|Property, plant, and equipment |                       |   | 39,476 |       
|Intangibles                    |                       |   | 200    |       
|Other noncurrent assets        |                       |   | 100    |       
|                               |                       |   |       
|                               | Total assets acquired |   |        | 40,056 | 
|Asset retirement obligation    |                       |   | (2,079 | )     
|                               |                       |   |       
|                               | Net assets acquired   |   | $      | 37,977 | 
|                               |                       |   |       



|           |  |   |         | 
|---------- |  | - | ------- | 
|Revenues   |  | $ | 902,766 | 
|Net income |  |   | 5,769   | 

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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                   
|---- | ----------------------------------
|(21) | Concentrations and Major Customers

year-to




|     |                    
|---- | -------------------
|(22) | Segment Information





|                                          |  |            |           |  |           |           |        |              |  |   |          |   |  |   |           | 
|----------------------------------------- |  | ---------- | --------- |  | --------- | --------- | ------ | ------------ |  | - | -------- | - |  | - | --------- | 
|                                          |  |            |           |  |           | Corporate |        |              | 
|                                          |  | Coal       |           |  |           |           | and    |              |  |  
|                                          |  | Operations |           |  | All Other |           |        | Eliminations |  |   | Combined |  
|                                          |  |            |           |  |           |           |        |              |  |   |          |  
|Revenues                                  |  | $          | 1,609,942 |  |           | $         | 42,335 |              |  | $ | (24,942  | ) |  | $ | 1,627,335 | 
|Depreciation, depletion, and amortization |  |            | 70,832    |  |           |           | 2,171  |              |  |   | 119      |   |  |   | 73,122    | 
|EBITDA, as adjusted                       |  |            | 229,476   |  |           |           | 4,601  |              |  |   | (88,785  | ) |  |   | 145,292   | 
|Capital expenditures                      |  |            | 118,379   |  |           |           | 296    |              |  |   | 3,357    |   |  |   | 122,032   | 
|Total assets                              |  |            | 948,431   |  |           |           | 85,329 |              |  |   | (16,821  | ) |  |   | 1,016,939 | 

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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                          |  |            |           |  |           |           |         |              |  |   |          |   |  |   |           | 
|----------------------------------------- |  | ---------- | --------- |  | --------- | --------- | ------- | ------------ |  | - | -------- | - |  | - | --------- | 
|                                          |  |            |           |  |           | Corporate |         |              | 
|                                          |  | Coal       |           |  |           |           | and     |              |  |  
|                                          |  | Operations |           |  | All Other |           |         | Eliminations |  |   | Combined |  
|                                          |  |            |           |  |           |           |         |              |  |   |          |  
|Revenues                                  |  | $          | 1,234,640 |  |           | $         | 28,571  |              |  | $ | (10,509  | ) |  | $ | 1,252,702 | 
|Depreciation, depletion, and amortization |  |            | 51,732    |  |           |           | 1,435   |              |  |   | 2,094    |   |  |   | 55,261    | 
|EBITDA, as adjusted                       |  |            | 166,159   |  |           |           | 2,808   |              |  |   | (43,877  | ) |  |   | 125,090   | 
|Capital expenditures                      |  |            | 68,940    |  |           |           | 332     |              |  |   | 1,167    |   |  |   | 70,439    | 
|Total assets                              |  |            | 396,935   |  |           |           | 105,727 |              |  |   | (25,541  | ) |  |   | 477,121   | 



|                                          |  |            |         |  |           |           |        |              |  |   |          |   |  |   |         | 
|----------------------------------------- |  | ---------- | ------- |  | --------- | --------- | ------ | ------------ |  | - | -------- | - |  | - | ------- | 
|                                          |  |            |         |  |           | Corporate |        |              | 
|                                          |  | Coal       |         |  |           |           | and    |              |  |  
|                                          |  | Operations |         |  | All Other |           |        | Eliminations |  |   | Combined |  
|                                          |  |            |         |  |           |           |        |              |  |   |          |  
|Revenues                                  |  | $          | 771,791 |  |           | $         | 18,277 |              |  | $ | (8,219   | ) |  | $ | 781,849 | 
|Depreciation, depletion, and amortization |  |            | 32,421  |  |           |           | 1,867  |              |  |   | 1,097    |   |  |   | 35,385  | 
|EBITDA, as adjusted                       |  |            | 69,098  |  |           |           | 719    |              |  |   | (21,873  | ) |  |   | 47,944  | 
|Capital expenditures                      |  |            | 21,656  |  |           |           | 516    |              |  |   | 5,210    |   |  |   | 27,382  | 
|Total assets                              |  |            | 342,019 |  |           |           | 70,797 |              |  |   | (33,480  | ) |  |   | 379,336 | 



|                                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------------------ |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                             |  | Year Ended December 31, |        
|                                                             |  |                         |        
|                                                             |  | 2005                    |         |   | 2004 |   |         | 2003 | 
|                                                             |  |                         |         |   |      |   |         |      | 
|Total segment EBITDA, as adjusted from continuing operations |  | $                       | 145,002 |   |      | $ | 125,090 |      |  | $ | 47,944  |  
|Interest expense                                             |  |                         | (29,647 | ) |      |   | (20,041 | )    |  |   | (7,848  | )
|Interest income                                              |  |                         | 1,064   |   |      |   | 531     |      |  |   | 103     |  
|Income tax expense                                           |  |                         | (18,953 | ) |      |   | (5,150  | )    |  |   | (898    | )
|Depreciation, depletion and amortization                     |  |                         | (73,122 | ) |      |   | (55,261 | )    |  |   | (35,385 | )
|Minority interest                                            |  |                         | (2,918  | ) |      |   | (22,781 | )    |  |   | (1,164  | )
|                                                             |  |                         |         |   |      |   |         |      | 
|Income from continuing operations                            |  | $                       | 21,426  |   |      | $ | 22,388  |      |  | $ | 2,752   |  
|                                                             |  |                         |         |   |      |   |         |      | 



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |              
|---- | -------------
|(23) | Contingencies



|    |                                                                     
|--- | --------------------------------------------------------------------
|(a) | Guarantees and Financial Instruments with Off-balance
    Sheet Risk





|    |           
|--- | ----------
|(b) | Litigation





|    |                    
|--- | -------------------
|(c) | Other Contingencies





|     |                        
|---- | -----------------------
|(24) | Discontinued Operations



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                       |                      |                         |        |      |      |   |         |        |   |   |         |      |  
|------------------------------------------------------ | -------------------- | ----------------------- | ------ | ---- | ---- | - | ------- | ------ | - | - | ------- | ---- | -
|                                                       |                      | Year Ended December 31, |       
|                                                       |                      |                         |       
|                                                       |                      | 2005                    |        |      | 2004 |   |         | 2003   |  
|                                                       |                      |                         |        |      |      |   |         |        |  
|Total revenues                                         |                      | $                       | 4,523  |      |      | $ | 17,016  |        |   | $ | 10,717  |     
|Total costs and expenses (excluding impairment charge) |                      |                         | (5,607 | )    |      |   | (18,442 | )      |   |   | (11,668 | )   
|Impairment charge                                      |                      |                         |       |      |      |   | (5,100  | )      |   |   |        |     
|Gain on sale of discontinued operations                |                      |                         | 704    |      |      |   |        |        |   |   |        |     
|                                                       |                      |                         |        |      |      |   |         |        |  
|                                                       | Loss from operations |                         |        | (380 | )    |   |         | (6,526 | ) |   |         | (951 | )
|Miscellaneous income                                   |                      |                         | 2      |      |      |   | 12      |        |   |   | 1       |     
|Income tax benefit from discontinued operations        |                      |                         | (93    | )    |      |   | (1,190  | )      |   |   | (230    | )   
|Minority interest in loss from discontinued operations |                      |                         | (72    | )    |      |   | (2,951  | )      |   |   | (230    | )   
|                                                       |                      |                         |        |      |      |   |         |        |  
|Loss from discontinued operations                      |                      | $                       | (213   | )    |      | $ | (2,373  | )      |   | $ | (490    | )   
|                                                       |                      |                         |        |      |      |   |         |        |  



|     |                                   
|---- | ----------------------------------
|(25) | Supplemental Cash Flow Disclosures









| |   |                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital contribution by Alpha for equity issued by Alpha in
connection with the Nicewonder Acquisition of $53,184.                                                                                                                         
|
| |  | The short-term financing of prepaid insurance premiums in the
    amount of $19,059.                                                                                                                                                       
|
| |  | Increase in deferred gains on sales of property interests and
    decrease in other liabilities of $1,169 for revisions in
    estimated cash flows underlying asset retirement obligations
    relating to properties which had been sold.
|
| |  | Various transactions in connection with the Internal
    Restructuring. See Notes 2 and 28.                                                                                                                                                





| |   |                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increase in other assets of $2,372 for the Virginia Coalfield
    Employment Enhancement Tax Credit receivable. This represents
    the portion of the tax credit allocated to Alpha NR Holding, Inc.                                                                                
|
| |  | The short-term financing of prepaid insurance premiums in the
    amount of $15,228.                                                                                                                                                                                                 
|
| |  | Settlement of the net working capital acquired in conjunction
    with the acquisition of U.S. AMCI recorded as an increase
    in goodwill of $1,520, a decrease in due from affiliate of
    $2,501 and a decrease in accrued expenses of $981.                                    
|
| |  | Increase in deferred gains on sales of property interests and
    decrease in other liabilities of $1,480 for revisions in
    estimated contract reclamation liability assumed in conjunction
    with the acquisition of the Virginia coal operations of Pittston
    Coal Company.
|
| |  | Decrease in deferred gains on sales of property interests of
    $5,000 as a result of additional consideration payable for the
    acquisition of the Virginia coal operations of Pittston Coal
    Company.                                                                        

100



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Increase in other assets of $2,434 for the Virginia Coalfield
    Employment Enhancement Tax Credit receivable. This represents
    the portion of the tax credit allocated to Alpha NR Holding, Inc.
|
| |  | The short-term financing of prepaid insurance premiums in the
    amount of $14,425.                                                                                                                 
|
| |  | The conversion of $44,000 of related party notes payable to
    contributed capital.                                                                                                                 
|
| |  | Seller financing of acquired entities of $23,600.                                                                                                                                                    
|
| |  | Issuance of membership interests in ANR Holdings, LLC of $68,960
    for the acquisition of U.S. AMCI.                                                                                               



|     |                  
|---- | -----------------
|(26) | Minority Interest





| |   |                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | First, to the holders of preferred sharing ratios on a pro rata
    basis to the extent of any losses that had been allocated to
    them in prior periods,                     
|
| |  | Second, to the holders of preferred sharing ratios on a pro rata
    basis up to the cumulative unallocated preferred yield (based on
    an annual preferred yield of 12%), and
|
| |  | Third, to the holders of common sharing ratios on a pro rata
    basis.                                                                                                         





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |            
|---- | -----------
|(27) | Investments



| |                             
| | ----------------------------
| | Dominion Terminal Associates







| |                 
| | ----------------
| | Excelven Pty Ltd





|     |             
|---- | ------------
|(28) | Income Taxes



102



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |                         |        |   |      |   |        |      |  |   |      |  
|----------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ---- | -
|                        |  | Year Ended December 31, |       
|                        |  |                         |       
|                        |  | 2005                    |        |   | 2004 |   |        | 2003 | 
|                        |  |                         |        |   |      |   |        |      | 
|Continuing operations   |  | $                       | 18,953 |   |      | $ | 5,150  |      |  | $ | 898  |  
|Discontinued operations |  |                         | (93    | ) |      |   | (1,190 | )    |  |   | (230 | )
|                        |  |                         |        |   |      |   |        |      | 
|                        |  | $                       | 18,860 |   |      | $ | 3,960  |      |  | $ | 668  |  
|                        |  |                         |        |   |      |   |        |      | 



|                          |         |                         |        |        |      |   |       |       |  |   |     |     | 
|------------------------- | ------- | ----------------------- | ------ | ------ | ---- | - | ----- | ----- |  | - | --- | --- | 
|                          |         | Year Ended December 31, |       
|                          |         |                         |       
|                          |         | 2005                    |        |        | 2004 |   |       | 2003  | 
|                          |         |                         |        |        |      |   |       |       | 
|Current tax expense:      |         |                         |        |        |      |   |       |       |  |   |     |    
|                          | Federal |                         | $      | 13,841 |      |   | $     | 1,625 |  |   | $   |    | 
|                          | State   |                         |        | 1,364  |      |   |       |      |  |   |     |    | 
|                          |         |                         |        |        |      |   |       |       | 
|                          |         |                         | 15,205 |        |      |   | 1,625 |       |  |   |    |    
|                          |         |                         |        |        |      |   |       |       | 
|Deferred tax expense:     |         |                         |        |        |      |   |       |       |  |   |     |    
|                          | Federal |                         |        | 3,740  |      |   |       | 2,918 |  |   |     | 894 | 
|                          | State   |                         |        | 8      |      |   |       | 607   |  |   |     | 4   | 
|                          |         |                         |        |        |      |   |       |       | 
|                          |         |                         | 3,748  |        |      |   | 3,525 |       |  |   | 898 |    
|                          |         |                         |        |        |      |   |       |       | 
|Total income tax expense: |         |                         |        |        |      |   |       |       |  |   |     |    
|                          | Federal |                         |        | 17,581 |      |   |       | 4,543 |  |   |     | 894 | 
|                          | State   |                         |        | 1,372  |      |   |       | 607   |  |   |     | 4   | 
|                          |         |                         |        |        |      |   |       |       | 
|                          |         | $                       | 18,953 |        |      | $ | 5,150 |       |  | $ | 898 |    
|                          |         |                         |        |        |      |   |       |       | 



|                                        |                                            |                           |        |        |        |   |        |        |       |   |       |        |     | 
|--------------------------------------- | ------------------------------------------ | ------------------------- | ------ | ------ | ------ | - | ------ | ------ | ----- | - | ----- | ------ | --- | 
|                                        |                                            | Year Ended December 31,   |       
|                                        |                                            |                           |       
|                                        |                                            | 2005                      |        |        | 2004   |   |        | 2003   |      
|                                        |                                            |                           |        |        |        |   |        |        |      
|Federal statutory income tax expense    |                                            | $                         | 15,154 |        |        | $ | 17,612 |        |       | $ | 1,685 |       
|Increases (reductions) in taxes due to: |                                            |                           |        |        |        |   |        |        |       |   |       |       
|                                        | Nondeductible stock-based compensation     |                           |        | 16,056 |        |   |        |       |       |   |       |       |    
|                                        | Percentage depletion allowance             |                           |        | (4,625 | )      |   |        | (3,376 | )     |   |       | (1,087 | )  
|                                        | Extraterritorial income exclusion          |                           |        | (2,381 | )      |   |        | (1,225 | )     |   |       |       |    
|                                        | State taxes, net of federal tax impact     |                           |        | 2,016  |        |   |        | 395    |       |   |       | 3      |    
|                                        | Change in valuation allowance              |                           |        | (6,077 | )      |   |        | 559    |       |   |       | 815    |    
|                                        | Taxes not provided for minority interest   |                           |        | (1,021 | )      |   |        | (8,189 | )     |   |       | (625   | )  
|                                        | Taxes not provided for pass-through entity |                           |        | (142   | )      |   |        | (779   | )     |   |       | 91     |    
|                                        | Other, net                                 |                           |        | (27    | )      |   |        | 153    |       |   |       | 16     |    
|                                        |                                            |                           |        |        |        |   |        |        |      
|                                        |                                            | Actual income tax expense |        | $      | 18,953 |   |        | $      | 5,150 |   |       | $      | 898 | 
|                                        |                                            |                           |        |        |        |   |        |        |      

103



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                                    |                                |                                    |         |         |         |   |        |        |        |  
|------------------------- | -------------------------------------------------- | ------------------------------ | ---------------------------------- | ------- | ------- | ------- | - | ------ | ------ | ------ | -
|                          |                                                    | December 31,                   |                                   
|                          |                                                    |                                |                                   
|                          |                                                    | 2005                           |                                    |         | 2004    |        
|                          |                                                    |                                |                                    |         |         |        
|Deferred tax assets:      |                                                    |                                |                                    |         |         |         |   |       
|                          | Property, plant and equipment                      |                                | $                                  | 78,526  |         |         | $ |       |       
|                          | Asset retirement obligation                        |                                |                                    | 20,855  |         |         |   |       |       
|                          | Goodwill                                           |                                |                                    | 18,214  |         |         |   |       |       
|                          | Postretirement medical benefits                    |                                |                                    | 9,538   |         |         |   |       |       
|                          | Workers compensation benefits                     |                                |                                    | 4,730   |         |         |   |       |       
|                          | Deferred gains on sales of property interests      |                                |                                    | 2,614   |         |         |   |       |       
|                          | Minimum tax credit carryforwards                   |                                |                                    | 8,989   |         |         |   | 1,249  |       
|                          | Net operating loss carryforwards                   |                                |                                    |        |         |         |   | 5,598  |       
|                          | Other                                              |                                |                                    | 4,074   |         |         |   | 207    |       
|                          |                                                    |                                |                                    |         |         |        
|                          |                                                    |                                | Gross deferred tax assets          |         |         | 147,540 |   |        |        | 7,054  |  
|                          | Less valuation allowance                           |                                |                                    | (93,525 | )       |         |   | (1,374 | )     
|                          |                                                    |                                |                                    |         |         |        
|                          |                                                    | Total net deferred tax assets  |                                    |         | 54,015  |         |   |        | 5,680  |       
|                          |                                                    |                                |                                    |         |         |        
|Deferred tax liabilities: |                                                    |                                |                                    |         |         |         |   |       
|                          | Prepaid insurance and other prepaid expenses       |                                |                                    | (12,882 | )       |         |   |       |       
|                          | Advance mining royalties                           |                                |                                    | (5,174  | )       |         |   |       |       
|                          | Virginia tax credit                                |                                |                                    | (3,672  | )       |         |   | (1,855 | )     
|                          | Investment in limited liability company subsidiary |                                |                                    |        |         |         |   | (6,869 | )     
|                          | Other                                              |                                |                                    | (4,563  | )       |         |   |       |       
|                          |                                                    |                                |                                    |         |         |        
|                          |                                                    | Total deferred tax liabilities |                                    |         | (26,291 | )       |   |        | (8,724 | )     
|                          |                                                    |                                |                                    |         |         |        
|                          |                                                    |                                | Net deferred tax asset (liability) |         | $       | 27,724  |   |        | $      | (3,044 | )
|                          |                                                    |                                |                                    |         |         |        



|                                         |  |              |         |   |      |   |        |  
|---------------------------------------- |  | ------------ | ------- | - | ---- | - | ------ | -
|                                         |  | December 31, |        
|                                         |  |              |        
|                                         |  | 2005         |         |   | 2004 |  
|                                         |  |              |         |   |      |  
|Current asset                            |  | $            |        |   |      | $ | 4,674  |  
|Current liability                        |  |              | (11,243 | ) |      |   |       |  
|Noncurrent asset                         |  |              | 38,967  |   |      |   |       |  
|Noncurrent liability                     |  |              |        |   |      |   | (7,718 | )
|                                         |  |              |         |   |      |  
|Total net deferred tax asset (liability) |  | $            | 27,724  |   |      | $ | (3,044 | )
|                                         |  |              |         |   |      |  

104



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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                                                       |  |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------- | -
|ANR Fund IX Holdings, L.P. and Alpha NR Holding, Inc. and
    Subsidiaries:                                                            |  |   |          |  
|Net deferred tax liability at December 31, 2004                                                                                        |  | $ | (3,044   | )
|Deferred tax benefit recorded in period from January 1,
    2005 to February 11, 2005 for continuing and discontinued
    operations   |  |   | 192      |  
|                                                                                                                                       |  |   |         
|Deferred tax liability balance at February 11, 2005                                                                                    |  | $ | (2,852   | )
|                                                                                                                                       |  |   |         
|Alpha NR Holding, Inc.:                                                                                                                |  |   |          |  
|Deferred tax liability balance on February 12, 2005                                                                                    |  | $ | (2,852   | )
|Gross deferred tax asset generated from the Internal
    Restructuring                                                                 |  |   | 149,790  |  
|Valuation allowance                                                                                                                    |  |   | (115,286 | )
|                                                                                                                                       |  |   |         
|Net deferred tax asset recorded as part of Internal
    Restructuring, with offsetting increase to additional paid-in
    capital      |  |   | 34,504   |  
|Deferred tax expense recorded in period from February 12,
    2005 to December 31, 2005 for continuing and discontinued
    operations |  |   | (3,928   | )
|                                                                                                                                       |  |   |         
|Net deferred tax asset at December 31, 2005                                                                                            |  | $ | 27,724   |  
|                                                                                                                                       |  |   |         



|                                                                                   |                                                                                                                        |   |        |         |  
|---------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | - | ------ | ------- | -
|Valuation allowance at December 31, 2004                                           |                                                                                                                        | $ | 1,374  |        
|Changes in the valuation allowance not affecting income tax
    expense:           |                                                                                                                        |   |        |        
|                                                                                   | Offset to gross deferred tax asset recorded in connection with
    the Internal Restructuring (discussed below)        |   |        | 115,286 |  
|                                                                                   | Reduction of previously recorded valuation allowance attributable to acquisition
    of Premium Energy, Inc. (Note 20) |   |        | (20,105 | )
|                                                                                   | Allowance established against deferred tax assets recorded in
    connection with Nicewonder Acquisiton (Note 20)      |   |        | 3,047   |  
|Reduction of valuation allowance recorded as a reduction to
    income tax expense |                                                                                                                        |   | (6,077 | )      
|                                                                                   |                                                                                                                        |   |       
|Valuation allowance at December 31, 2005                                           |                                                                                                                        | $ | 93,525 |        
|                                                                                   |                                                                                                                        |   |       





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ALPHA NR HOLDING, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |                                            
|---- | -------------------------------------------
|(29) | Quarterly Financial Information (Unaudited)

|                                           |  |                              |         |   |         |   |         |         |  |   |         |  |  |   |         | 
|------------------------------------------ |  | ---------------------------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- |  |  | - | ------- | 
|                                           |  | Year Ended December 31, 2005 |        
|                                           |  |                              |        
|                                           |  | First                        |         |   | Second  |   |         | Third   |  |   | Fourth  | 
|                                           |  | Quarter                      |         |   | Quarter |   |         | Quarter |  |   | Quarter | 
|                                           |  |                              |         |   |         |   |         |         |  |   |         | 
|Total revenues                             |  | $                            | 312,157 |   |         | $ | 417,636 |         |  | $ | 397,689 |  |  | $ | 499,853 | 
|Income (loss) from operations              |  |                              | (14,022 | ) |         |   | 41,640  |         |  |   | 18,141  |  |  |   | 26,320  | 
|Income (loss) from continuing operations   |  |                              | (25,323 | ) |         |   | 26,127  |         |  |   | 8,210   |  |  |   | 12,412  | 
|Income (loss) from discontinued operations |  |                              | (480    | ) |         |   | 266     |         |  |   |        |  |  |   |        | 
|Net income (loss)                          |  |                              | (25,801 | ) |         |   | 26,393  |         |  |   | 8,210   |  |  |   | 12,412  | 







|                                  |  |                              |         |   |         |   |         |         |  |   |         |   |  |   |         |  
|--------------------------------- |  | ---------------------------- | ------- | - | ------- | - | ------- | ------- |  | - | ------- | - |  | - | ------- | -
|                                  |  | Year Ended December 31, 2004 |        
|                                  |  |                              |        
|                                  |  | First                        |         |   | Second  |   |         | Third   |  |   | Fourth  |  
|                                  |  | Quarter                      |         |   | Quarter |   |         | Quarter |  |   | Quarter |  
|                                  |  |                              |         |   |         |   |         |         |  |   |         |  
|Total revenues                    |  | $                            | 242,723 |   |         | $ | 339,875 |         |  | $ | 341,709 |   |  | $ | 328,395 |  
|Income from operations            |  |                              | 5,048   |   |         |   | 35,009  |         |  |   | 22,908  |   |  |   | 6,142   |  
|Income from continuing operations |  |                              | 1,412   |   |         |   | 12,449  |         |  |   | 7,267   |   |  |   | 1,260   |  
|Loss from discontinued operations |  |                              | (175    | ) |         |   | (206    | )       |  |   | (1,846  | ) |  |   | (145    | )
|Net income                        |  |                              | 1,236   |   |         |   | 12,243  |         |  |   | 5,421   |   |  |   | 1,115   |  





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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of disclosure controls and procedures. 15d-15(e)


Changes in internal control over financial reporting. 10-K.




Limitations of the effectiveness of internal control.







|         |                   
|-------- | ------------------
|Item 9B. | Other Information.



107



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Third Amended and Restated Employment Agreement with Michael
J. Quillen. gross-up gross-up




Employment Agreement with Kevin S. Crutchfield.


108



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gross-up gross-up






109



---



##### Table of Contents



S-K)





PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services



|                      |  |      |           |  |      |   |           | 
|--------------------- |  | ---- | --------- |  | ---- | - | --------- | 
|                      |  | 2005 |           |  | 2004 |  
|                      |  |      |           |  |      |  
|Audit Fees            |  | $    | 2,133,761 |  |      | $ | 2,705,517 | 
|Audit-Related Fees(1) |  |      | 437,054   |  |      |   | 147,750   | 
|Tax Fees              |  |      |          |  |      |   |          | 
|All Other Fees        |  |      |          |  |      |   |          | 
|                      |  |      |           |  |      |  
|Total                 |  | $    | 2,570,815 |  |      | $ | 2,853,267 | 
|                      |  |      |           |  |      |  





110



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PART IV







|         |                                        
|-------- | ---------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules





| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | (1): The following financial statements are filed as part of
    this annual report under Item 8:

|                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------
|Alpha NR Holding, Inc. and Subsidiaries                                                                                    
|Report of Independent Registered Public Accounting Firm                                                                    
|Consolidated Balance Sheets, December 31, 2005 and 2004                                                                    
|Consolidated Statements of Income, years ended December 31,
    2005, 2004 and 2003                                        
|Consolidated Statements of Stockholders Equity and
    Partners Capital, years ended December 31, 2005, 2004
    and 2003
|Consolidated Statements of Cash Flows, years ended
    December 31, 2005, 2004 and 2003                                    
|Notes to Consolidated Financial Statements                                                                                 



| |                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) Financial Statement Schedules. All schedules for which
    provision is made in the applicable accounting regulations of
    the SEC are not required under the related instructions, are
    inapplicable or not material, or the information called for
    thereby is otherwise included in the consolidated financial
    statements and therefore has been omitted.
|
| | (3) Listing of Exhibits. See Exhibit Index following
    the signature page of this annual report.                                                                                                                                                                                                                                                                          

111



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SIGNATURES






| |                       
| | ----------------------
| | ALPHA NR HOLDING, INC.



| |     |                    
| | --- | -------------------
| | By: | /s/ David C. Stuebe

| |                      
| | ---------------------
| |                      
| | Name: David C. Stuebe

| |        |                                                      
| | ------ | -----------------------------------------------------
| | Title: | Vice President, Chief Financial Officer and Treasurer



attorneys-in 10-K attorneys-in


|                                         |  |                |  |                                                                                           |  | 
|---------------------------------------- |  | -------------- |  | ----------------------------------------------------------------------------------------- |  | 
|Signature                                |  | Date           |  | Title                                                                                    
|                                         |  |                |  |                                                                                          
|                                        
|/s/ Michael J. QuillenMichael J. Quillen |  | March 31, 2006 |  | President, Chief Executive Officer and Director (Principal
    Executive Officer)        
|                                        
|/s/ David C. StuebeDavid C. Stuebe       |  | March 31, 2006 |  | Vice President, Chief Financial Officer and Treasurer (Principal Financial
    Officer)  
|                                        
|/s/ Eddie W. NeelyEddie W. Neely         |  | March 31, 2006 |  | Vice President, Assistant Secretary
    and Controller
    (Principal Accounting Officer)



---



##### Table of Contents



10-K EXHIBIT
INDEX


|            |   |                        |  |                                                                                                                                                                                                                                                                                                                                                                           
|----------- | - | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |   | Description of Exhibit
|            |   |                       
|            | 2 | .1                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Dickenson-Russell Coal Company, LLC, dated as of
    October 29, 2002, as amended (Incorporated by reference to
    the Registration Statement on Form S-1 of Alpha Natural
    Resources, Inc. (File No. 333-121002) filed on
    December 6, 2004.)                                               
|           
|            | 2 | .2                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Paramont Coal Company Virginia, LLC, dated as of
    October 29, 2002, as amended (Incorporated by reference to
    the Registration Statement on Form S-1 of Alpha Natural
    Resources, Inc. (File No. 333-121002) filed on
    December 6, 2004.)                                               
|           
|            | 2 | .3                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Alpha Land and Reserves, LLC, dated as of October 29,
    2002, as amended (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                          
|           
|            | 2 | .4                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Alpha Coal Sales Co., LLC, dated as of October 29,
    2002, as amended (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                             
|           
|            | 2 | .5                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Alpha Terminal Company, LLC, dated as of October 29,
    2002, as amended (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                           
|           
|            | 2 | .6                     |  | Asset Purchase Agreement by and between Pittston Coal Company
    and Maxxim Rebuild Co., LLC, dated as of October 29, 2002,
    as amended (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                               
|           
|            | 2 | .7                     |  | Purchase and Sale Agreement by and among El Paso CGP
    Company and AMFIRE, LLC dated as of November 14, 2002, as
    amended (Incorporated by reference to the Registration Statement
    on Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)                                                                            
|           
|            | 2 | .8                     |  | Contribution Agreement among the FRC Parties, the AMCI Parties,
    ANR Holdings, LLC and the Additional Persons listed on the
    signature pages dated as of March 11, 2003, as amended
    (Incorporated by reference to the Registration Statement on
    Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)             
|           
|            | 2 | .9                     |  | Purchase and Sale Agreement made and entered into as of
    January 31, 2003 by and among Alpha Land and Reserves, LLC
    and CSTL, LLC (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                                  
|           
|            | 2 | .10                    |  | Purchase and Sale Agreement dated as of April 9, 2003 by
    and between Alpha Land and Reserves, LLC and CSTL LLC
    (Incorporated by reference to the Registration Statement on
    Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)                                                                                    
|           
|            | 2 | .11                    |  | Purchase and Sale Agreement dated as of April 9, 2003 by
    and between Dickenson-Russell Coal Company, LLC and WBRD LLC
    (Incorporated by reference to the Registration Statement on
    Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)                                                                             
|           
|            | 2 | .12                    |  | Letter agreement dated April 9, 2003 among Alpha Natural
    Resources, LLC, Dickenson-Russell Company, LLC, Alpha Land and
    Reserves, LLC, CSTL LLC, WBRD LLC, and Natural Resources
    Partners L.P. (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)
|           
|            | 2 | .13                    |  | Asset Purchase Agreement by and among S&M Mining, S&M
    Mining, Inc. and AMFIRE Mining Company, LLC dated
    October 29, 2003, as amended (Incorporated by reference to
    the Registration Statement on Form S-1 of Alpha Natural
    Resources, Inc. (File No. 333-121002) filed on
    December 6, 2004.)                                                          



---



##### Table of Contents



|            |   |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------- | - | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |   | Description of Exhibit
|            |   |                       
|           
|            | 2 | .14                    |  | Asset Purchase Agreement by and among DLR Coal Co., DLR Mining,
    Inc. and AMFIRE Mining Company, LLC dated October 29, 2003,
    as amended (Incorporated by reference to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on December 6, 2004.)                                                                                                                                                                                                                 
|           
|            | 2 | .15                    |  | Asset Purchase Agreement by and between Mears Enterprises, Inc.
    and AMFIRE Mining Company, LLC dated October 29, 2003, as
    amended (Incorporated by reference to the Registration Statement
    on Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)                                                                                                                                                                                                                      
|           
|            | 2 | .16                    |  | Internal Restructuring Agreement dated as of February 11,
    2005 by and among Alpha Natural Resources, Inc., Alpha NR
    Ventures, Inc., ANR Holdings, LLC, the FRC Parties named
    therein, the AMCI Parties named therein, Madison Capital Funding
    LLC, Alpha Coal Management, LLC and the Management Members named
    therein (Incorporated by reference to Exhibit 2.16 to the
    Annual Report on Form 10-K of Alpha Natural Resources, Inc.
    (File No. 1-32423) filed on March 30, 2005.)                  
|           
|            | 2 | .17                    |  | Sixth Amendment to Contribution Agreement by and among the FRC
    Parties, the AMCI Parties, ANR Holdings, LLC and Alpha Natural
    Resources, Inc. (Incorporated by reference to Exhibit 2.17
    to the Annual Report on Form 10-K of Alpha Natural
    Resources, Inc. (File No. 1-32423) filed on March 30,
    2005.)                                                                                                                                                                                                   
|           
|            | 2 | .18                    |  | Asset Purchase Agreement dated April 14, 2005, by and among
    Gallup Transportation and Transloading Company, LLC, NATIONAL
    KING COAL LLC and NKC Acquisition, LLC (Incorporated by
    reference to Exhibit 2.1 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on April 15, 2005.)                                                                                                                                                                                 
|           
|            | 2 | .19                    |  | Acquisition Agreement dated as of September 23, 2005 among
    Alpha Natural Resources, LLC, Mate Creek Energy of W. Va., Inc.,
    Virginia Energy Company, the unitholders of Powers Shop, LLC,
    and the shareholders of White Flame Energy, Inc., Twin Star
    Mining, Inc. and Nicewonder Contracting, Inc. (the
    Acquisition Agreement) (Incorporated by reference to
    Exhibit 2.1 to the Current Report on Form 8-K of Alpha
    Natural Resources, Inc. (File No. 1-32423) filed on
    September 26, 2005.)
|           
|            | 2 | .20                    |  | Membership Unit Purchase Agreement dated as of
    September 23, 2005 among Premium Energy, LLC and the
    unitholders of Buchanan Energy Company, LLC (the
    Membership Unit Purchase Agreement) (Incorporated by
    reference to Exhibit 2.2 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on September 26, 2005.)                                                                                                                                               
|           
|            | 2 | .21                    |  | Agreement and Plan of Merger dated as of September 23, 2005
    among Alpha Natural Resources, Inc., Alpha Natural Resources,
    LLC, Premium Energy, LLC, Premium Energy, Inc. and the
    shareholders of Premium Energy, Inc. (the Premium Energy
    Shareholders) (the Merger Agreement)
    (Incorporated by reference to Exhibit 2.3 to the Current
    Report on Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on September 26, 2005.)                                                   
|           
|            | 2 | .22                    |  | Indemnification Agreement dated as of September 23, 2005
    among Alpha Natural Resources, Inc., Alpha Natural Resources,
    LLC, Premium Energy, LLC, the other parties to the Acquisition
    Agreement, the Premium Energy Shareholders, and certain of the
    unitholders of Buchanan Energy Company, LLC (Incorporated by
    reference to Exhibit 2.4 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on September 26, 2005.)                                     
|           
|            | 2 | .23                    |  | Letter Agreement dated of as September 23, 2005 among Alpha
    Natural Resources, Inc., Alpha Natural Resources, LLC, Premium
    Energy, LLC and the other parties to the Acquisition Agreement,
    the Membership Unit Purchase Agreement and the Merger Agreement
    (Incorporated by reference to Exhibit 2.5 to the Current
    Report on Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on September 26, 2005.)                                                                               



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##### Table of Contents



|            |    |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------- | -- | ---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description of Exhibit
|            |    |                       
|           
|            | 2  | .24                    |  | Letter Agreement dated October 26, 2005 (the Letter
    Agreement) among Alpha Natural Resources, Inc., Alpha
    Natural Resources, LLC, Premium Energy, LLC, Premium Energy,
    Inc. and the Sellers Representative named therein amending
    certain provisions of(i) the Acquisition Agreement dated
    September 23, 2005, among certain parties to the Letter
    Agreement and certain other parties named therein, (ii) the
    Agreement and Plan of Merger dated September 23, 2005,
    among the parties to the Letter Agreement and certain other
    parties named therein and (iii) the Indemnification
    Agreement dated September 23, 2005, among the parties to
    the Letter Agreement and certain other parties named therein.
    (Incorporated by reference to Exhibit 2.1 to the Current
    Report on Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)
|           
|            | 2  | .25                    |  | Assignment of Rights Under Certain Agreements executed as of
    October 26, 2005 among Alpha Natural Resources, LLC, Mate
    Creek Energy, LLC, Callaway Natural Resources, Inc., Premium
    Energy, LLC and Virginia Energy Company, LLC (Incorporated by
    reference to Exhibit 2.2 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|           
|            | 3  | .1                     |  | Restated Certificate of Incorporation of Alpha NR Holding, Inc.
(Incorporated by reference to Exhibit 3.11 to the Registration
Statement on Form S-4 of Alpha NR Holding, Inc. (File
No. 333-124319-17) filed on April 26, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|           
|            | 3  | .2                     |  | Bylaws of Alpha NR Holding, Inc. (Incorporated by reference to
Exhibit 3.12 to the Registration Statement on Form S-4 of Alpha NR
Holding, Inc. (File No. 333-124319-17) filed on April 26, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|           
|            | 4  | .1                     |  | Indenture dated as of May 18, 2004 among Alpha Natural
    Resources, LLC, Alpha Natural Resources Capital Corp., the
    Guarantors named therein and Wells Fargo Bank, N.A., as Trustee
    (Incorporated by reference to Exhibit 10.5 to the
    Registration Statement on Form S-1 of Alpha Natural
    Resources, Inc. (File No. 333-121002) filed on
    December 6, 2004.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|           
|            | 4  | .2                     |  | First Supplemental Indenture dated as of February 1, 2005
    among Alpha Natural Resources, LLC, Alpha Natural Resources
    Capital Corp., the Guarantors party thereto and Wells Fargo
    Bank, N.A., as Trustee (Incorporated by reference to
    Exhibit 4.3 to the Annual Report on Form 10-K of Alpha
    Natural Resources, Inc. (File No. 1-32423) filed on
    March 30, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|           
|            | 4  | .3                     |  | Second Supplemental Indenture dated as of March 30, 2005
    among Alpha Natural Resources, LLC, Alpha Natural Resources
    Capital Corp., Alpha NR Holding, Inc., Alpha NR Ventures, Inc.,
    ANR Holdings, LLC, the Guarantors party thereto and Wells Fargo
    Bank, N.A., as Trustee (Incorporated by reference to
    Exhibit 4.4 to the Annual Report on Form 10-K of Alpha
    Natural Resources, Inc. (File No. 1-32423) filed on
    March 30, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|           
|            | 4  | .4                     |  | Third Supplemental Indenture dated as of October 26, 2005
    among Alpha Natural Resources, LLC, Alpha Natural Resources
    Capital Corp., Alpha NR Holding, Inc., ANR Holdings, LLC, the
    Guarantors party thereto, the Guaranteeing Subsidiaries party
    thereto and Wells Fargo Bank, N.A., as Trustee (Incorporated by
    reference to Exhibit 10.3 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                         
|           
|            | 4  | .5                     |  | Fourth Supplemental Indenture dated as of January 3, 2006
    among Alpha Natural Resources, LLC, Alpha Natural Resources
    Capital Corp., Alpha NR Holding, Inc., the Guarantors party
    thereto, the Guaranteeing Subsidiaries party thereto and Wells
    Fargo Bank, N.A., as Trustee (Incorporated by reference to
    Exhibit 4.6 to the Registration Statement on Form S-1
    of Alpha Natural Resources, Inc. (File No. 333-129030)
    filed on January 9, 2006.)                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|           
|            | 10 | .1                     |  | Credit Agreement dated as of October 26, 2005, among Alpha
    NR Holding, Inc., Alpha Natural Resources, LLC, the Lenders and
    Issuing Banks party thereto from time to time, Citicorp North
    America, Inc., as administrative agent and as collateral agent
    for the Lenders and Issuing Banks, UBS Securities LLC as
    syndication agent, the co-documentation agents party thereto,
    Citigroup Global Markets Inc. and UBS Securities LLC, as joint
    lead arrangers and joint book managers. (Incorporated by
    reference to Exhibit 10.1 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)                                                                                                                                                                                                                                        



---



##### Table of Contents



|            |    |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------- | -- | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description of Exhibit
|            |    |                       
|           
|            | 10 | .2                     |  | Guarantee and Collateral Agreement, dated as of October 26,
    2005, made by each of the Grantors as defined therein, in favor
    of Citicorp North America, Inc., as administrative agent and as
    collateral agent for the banks and other financial institutions
    or entities from time to time parties to the Credit Agreement
    and the other Secured Parties, as defined therein. (Incorporated
    by reference to Exhibit 10.2 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)
|           
|            | 10 | .3                    |  | Third Amended and Restated Employment Agreement between Alpha
    Natural Resources Services, LLC and Michael J. Quillen dated
    March 22, 2006 (Incorporated by reference to
Exhibit 10.3 to the Annual Report on Form 10-K of Alpha
Natural Resources, Inc. (File No. 1-32423) filed on
March 28, 2006.)                                                                                                                                                                                                                                                             
|           
|            | 10 | .4                    |  | Employment Agreement between Alpha Natural Resources, LLC and D.
    Scott Kroh dated January 1, 2003, as amended (Incorporated
    by reference to Exhibit 10.7 to the Registration Statement
    on Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on December 6, 2004.)                                                                                                                                                                                                                                                                    
|           
|            | 10 | .5                    |  | Employment Agreement between Alpha Natural Resources Services,
    LLC and Kevin S. Crutchfield dated March 22, 2006
(Incorporated by reference to Exhibit 10.5 to the Annual Report
on Form 10-K of Alpha Natural Resources, Inc. (File
No. 1-32423) filed on March 28, 2006.)                                                                                                                                                                                                                                                                                          
|           
|            | 10 | .6                     |  | Amended and Restated Stockholder Agreement dated as of
    October 26, 2005, by and among Alpha Natural Resources,
    Inc., the FRC Parties named therein, the AMCI Parties named
    therein, Madison Capital Funding LLC, the Nicewonder Parties
    named therein, and the other stockholders named therein.
    (Incorporated by reference to Exhibit 10.5 to the Current
    Report on Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)                                                                                
|           
|            | 10 | .7                     |  | Letter agreement dated October 25, 2005, by the FRC Parties
    named therein and the AMCI Parties named therein, amending
    certain provisions of the Stockholder Agreement. (Incorporated
    by reference to Exhibit 10.4 to the Current Report on
    Form 8-K of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on October 31, 2005.)                                                                                                                                                                                                                 
|           
|            | 10 | .8                     |  | Letter agreement dated December 8, 2005, by the FRC Parties
    named therein and the AMCI Parties named therein and Alpha
    Natural Resources, Inc., amending certain provisions of the
    Stockholder Agreement (Incorporated by reference to
    Exhibit 10.1 to the Current Report on Form 8-K of
    Alpha Natural Resources, Inc. (File No. 1-32423) filed on
    December 12, 2005.)                                                                                                                                                                           
|           
|            | 10 | .9                    |  | Alpha Natural Resources Annual Incentive Bonus (AIB) Plan
    (the AIB Plan) (Incorporated by reference to
    Exhibit 10.9 to Amendment No. 2 to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on February 2, 2005.)                                                                                                                                                                                                                                                                                    
|           
|            | 10 | .10                   |  | Amended and Restated Alpha Coal Management LLC 2004 Long-Term
    Incentive Plan (Incorporated by reference to Exhibit 10.10
    to Amendment No. 2 to the Registration Statement on
    Form S-1 of Alpha Natural Resources, Inc. (File
    No. 333-121002) filed on February 2, 2005.)                                                                                                                                                                                                                                                                                 
|           
|            | 10 | .11                   |  | Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan
    (Incorporated by reference to Exhibit 10.11 to Amendment
    No. 2 to the Registration Statement on Form S-1 of
    Alpha Natural Resources, Inc. (File No. 333-121002) filed
    on February 2, 2005.)                                                                                                                                                                                                                                                                                                  
|           
|            | 10 | .12                   |  | Form of Alpha Natural Resources, Inc. Grantee Stock Option
    Agreement for Alpha Natural Resources, Inc. 2005 Long-Term
    Incentive Plan (Incorporated by reference to Exhibit 10.15
    to the Annual Report on Form 10-K of Alpha Natural
    Resources, Inc. (File No. 1-32423) filed on March 30,
    2005.)                                                                                                                                                                                                                                                     
|           
|            | 10 | .13                   |  | Form of Alpha Natural Resources, Inc. Restricted Stock Agreement
    for Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan
    (for grants on or prior to March 3, 2006) (Incorporated by
    reference to Exhibit 4.7 to the Registration Statement on
    Form S-8 of Alpha Natural Resources, Inc. (File
    No. 333-127528) filed on August 15, 2005.)                                                                                                                                                                                                     
|           
|            | 10 | .14                   |  | Form of Alpha Natural Resources, Inc. Restricted Stock Agreement
    for Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan
    (for grants after March 3, 2006) (Incorporated by reference
    to Exhibit 10.1 to the Current Report on Form 8-K of
    Alpha Natural Resources, Inc. (File No. 1-32423) filed on
    March 10, 2006.)                                                                                                                                                                                                                         
|           
|            | 10 | .15                   |  | Form of Alpha Natural Resources, Inc. Performance Share Award
    Agreement for Alpha Natural Resources, Inc. 2005 Long-Term
    Incentive Plan (Incorporated by reference to Exhibit 10.2
    to the Current Report on Form 8-K of Alpha Natural
    Resources, Inc. (File No. 1-32423) filed on March 10,
    2006.)                                                                                                                                                                                                                                                   



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##### Table of Contents



|            |        |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------- | ------ | ---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |        | Description of Exhibit
|            |        |                       
|           
|            | 10     | .16                   |  | Coal Mining Lease dated April 9, 2003, effective as of
    April 1, 2003, by and between CSTL LLC (subsequently
    renamed ACIN LLC) and Alpha Land and Reserves, LLC, as amended
    (the ACIN Lease) (Incorporated by reference to
    Exhibit 10.12 to Amendment No. 1 to the Registration
    Statement on Form S-1 of Alpha Natural Resources, Inc.
    (File No. 333-121002) filed on January 12, 2005.)
|           
|            | 10     | .17                    |  | Two Partial Surrender Agreements and Fourth Amendment to Coal
    Mining Lease, each dated September 1, 2005, by and between
    ACIN LLC and Alpha Land and Reserves, LLC, amending the ACIN
    Lease (Incorporated by reference to Exhibit 10.17 to the
Annual Report on Form 10-K of Alpha Natural Resources, Inc. (File
No. 1-32423) filed on March 28, 2006.)                                              
|           
|            | 10     | .18                    |  | Partial Surrender Agreement dated November 1, 2005, by and
    between ACIN LLC and Alpha Land and Reserves, LLC, amending the
    ACIN Lease (Incorporated by reference to Exhibit 10.18 to the
Annual Report on Form 10-K of Alpha Natural Resources, Inc. (File
No. 1-32423) filed on March 28, 2006.)                                                                                                        
|           
|            | 10     | .19                   |  | Performance period and payout methodology for performance share
    award grants during 2006 under the Alpha Natural Resources, Inc.
    2005 Long-Term Incentive Plan as reported on Alpha Natural
    Resources, Inc.s current report on Form 8-K filed on
    March 9, 2006 and incorporated by this reference                                                                                               
|           
|            | 10     | .20                   |  | Amended and Restated Alpha Natural Resources, Inc. and
    Subsidiaries Deferred Compensation Plan (Incorporated by
    reference to Exhibit 10.1 to the Quarterly Report on
    Form 10-Q of Alpha Natural Resources, Inc. (File
    No. 1-32423) filed on August 15, 2005.)                                                                                                                                    
|           
|            | 10     | .21                   |  | Summary of Alpha Natural Resources, Inc. Director Compensation
    Policy (Incorporated by reference to Exhibit 10.21
    to the Annual Report on Form 10-K of Alpha Natural
    Resources, Inc. (File No. 1-32423) filed on March 30,
    2005.)                                                                                                                                                                
|           
|            | 10     | .22                   |  | Performance goals and target bonuses set for 2006 under the AIB
    Plan for Alpha Natural Resources, Inc.s executive officers
    as reported on Alpha Natural Resources, Inc.s Current
    Report on Form 8-K filed on January 31, 2006 and
    incorporated by this reference                                                                                                                               
|           
|            | 10     | .23                   |  | Summary of Retention Compensation Plan approved for certain
    executive officers of Alpha Natural Resources, Inc.
    (Incorporated by reference to Exhibit 10.27 to the
    Registration Statement on Form S-1 of Alpha Natural
    Resources, Inc. (File No. 333-129030) filed on
    December 2, 2005.)                                                                                                     
|           
|            | 10     | .24                   |  | Plan Document and Summary Plan Description of the Alpha Natural
    Resources, Inc. Key Employee Separation Plan (Incorporated by
reference to Exhibit 10.24 to the
Annual Report on Form 10-K of Alpha Natural Resources, Inc. (File
No. 1-32423) filed on March 28, 2006.)                                                                                                                                     
|           
|            | 12     | *                      |  | Statement regarding computation of
Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                                           
|           
|            | 31(a)* |                        |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        
|           
|            | 31(b)* |                        |  | Certification Pursuant to Rule 13a-14(a) under the
    Securities Exchange Act of 1934, as adopted pursuant to
    §302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        
|           
|            | 32(a)* |                        |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                     
|           
|            | 32(b)* |                        |  | Certification Pursuant to 18 U.S.C. §1350, As Adopted
    Pursuant to §906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                     






|  |                
|- | ---------------
|* | Filed herewith.



|  |                                                                                                                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Confidential treatment has been granted with respect to portions
    of the exhibit. Confidential portions have been omitted from
    this public filing and have been filed separately with the
    Securities and Exchange Commission.
| 
| | Management contract or compensatory plan or arrangement.