Acquisitions

On August 31, 2012, NACoal acquired, through a wholly owned subsidiary, four related companies - Reed Minerals, Inc., Reed Hauling Inc., C&H Mining Company, Inc. and Reed Management, LLC - from members of and entities controlled by the Reed family. These companies, known as Reed Minerals, are based in Jasper, Alabama and are involved in the mining of steam and metallurgical coal. The results of Reed Minerals' operations have been included in the Company's consolidated financial statements since August 31, 2012.

Reed Minerals mines and markets steam coal and metallurgical coal for sale primarily into the power generation and steel markets. Steam coal is primarily sold to a cooperative association which provides fuel under a long-term contract with a significant U.S. utility. Metallurgical coal is sold to several customers. Reed Minerals operates three mines on leased reserves in central Alabama. For the year ended December 31, 2011, Reed Minerals sold 0.9 million tons of coal and had revenue of approximately $86.0 million and net income of approximately $4.0 million.

The acquisition, which was funded using borrowings under NACoal's unsecured revolving line of credit, was completed for a

preliminary purchase price of approximately $64.8 million. The terms of the transaction also include an earn-out contingent on

the average coal selling price received on the first 15 million tons of coal sold by NACoal from the Reed Minerals operations average coal selling price received on the first 15 million tons of coal sold by NACoal from the Reed Minerals operations.

The earn-out payments will be paid quarterly. No earn-out payments were made during the third quarter of 2012.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed of Reed Minerals at the acquisition date of August 31, 2012. NACoal is in the process of finalizing its accounting for the transaction including obtaining third-party valuations of certain assets and liabilities. In addition, NACoal continues to evaluate the fair value of any contingent consideration which may be paid. Changes in the assumptions used to calculate the preliminary fair values will affect the allocation of the purchase price to the assets and liabilities of the acquisition. Accordingly, these initial measurements are subject to change.



	At August 31, 2012

Assets:
Property, plant and equipment (including mineral rights)	$	54.6
Other non-current assets	2.5
Goodwill	7.5
Other intangible assets	15.9
Total assets acquired	$	80.5

Liabilities:
Other current liabilities	$	0.7
Other long-term liabilities	15.0
Total liabilities assumed	$	15.7

Net assets acquired	$	64.8

The results of Reed Minerals included in the Company's unaudited condensed consolidated statement of comprehensive income (loss) from the acquisition date through September 30, 2012 are as follows:



	September 30, 2012

Revenues	$	7.7
Operating profit	$	—
Net income	$	—