The following discussion and analysis is provided to increase understanding of, and should be read in conjunction with, the Condensed Consolidated Financial Statements and accompanying notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2008.

Forward-Looking Information

From time to time, we make certain comments and disclosures in reports, including this report, or through statements made by our officers that may be forward-looking in nature. Examples include statements related to our future outlook, anticipated capital expenditures, projected cash flows and borrowings and sources of funding. We caution readers that forward-looking statements, including disclosures that use words such as "target," "goal," "objective," "believe," "anticipate," "expect," "estimate," "intend," "may," "plan," "project," "will" and similar words or statements are subject to certain risks, trends and uncertainties that could cause actual cash flows, results of operations, financial condition, cost reductions, acquisitions, dispositions, financing transactions, operations, expansion, consolidation and other events to differ materially from the expectations expressed or implied in such forward-looking statements. Any forward-looking statements are also subject to a number of assumptions regarding, among other things, future economic, competitive and market conditions. These assumptions are based on facts and conditions, as they exist at the time such statements are made as well as predictions as to future facts and conditions, the accurate prediction of which may be difficult and involve the assessment of circumstances and events beyond our control. We disclaim any intent or obligation to update these forward-looking statements unless required by securities law, and we caution the reader not to rely on them unduly.

We have based any forward-looking statements we have made on our current expectations and assumptions about future events and circumstances that are subject to risks, uncertainties and contingencies that could cause results to differ materially from those discussed in the forward-looking statements, including, but not limited to:

(i) our cash flows, results of operation or financial condition;

(ii) the successful completion of acquisition, disposition or financing transactions and the effect thereof on our business;

(iii) governmental policies, laws, regulatory actions and court decisions affecting the coal industry or our customers' coal usage;

(iv) legal and administrative proceedings, settlements, investigations and claims and the availability of insurance coverage related thereto;

(v) inherent risks of coal mining beyond our control, including weather and geologic conditions or catastrophic weather-related damage;

(vi) our production capabilities to meet market expectations and customer requirements;

(vii) our ability to obtain coal from brokerage sources or contract miners in accordance with their contracts;

(viii) our ability to obtain and renew permits necessary for our existing and planned operations in a timely manner;

(ix) the cost and availability of transportation for our produced coal;

(x) our ability to expand our mining capacity;

(xi) our ability to manage production costs, including labor costs;

(xii) adjustments made in price, volume or terms to existing coal supply agreements;

(xiii) the worldwide market demand for coal, electricity and steel;

(xiv) environmental concerns related to coal mining and combustion and the cost and perceived benefits of alternative sources of energy such as natural gas and nuclear energy;

(xv) competition among coal and other energy producers, in the United States and internationally;

(xvi) our ability to timely obtain necessary supplies and equipment;

(xvii) our reliance upon and relationships with our customers and suppliers;

(xviii) the creditworthiness of our customers and suppliers;

(xix) our ability to attract, train and retain a skilled workforce to meet replacement or expansion needs;

(xx) our assumptions and projections concerning economically recoverable coal reserve estimates;

(xxi) our failure to enter into anticipated new contracts;

(xxii) future economic or capital market conditions;

(xxiii) foreign currency fluctuations;

(xxiv) the availability and costs of credit, surety bonds and letters of credit that we require;

(xxv) the lack of insurance against all potential operating risks;

(xxvi) our assumptions and projections regarding pension and other post-retirement benefit liabilities;

(xxvii) our interpretation and application of accounting literature related to mining specific issues; and

(xxviii) the successful implementation of our strategic plans and objectives for future operations and expansion or consolidation.

We are including this cautionary statement in this Quarterly Report on Form 10-Q to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf, of us. Any forward-looking statements should be considered in context with the various disclosures made by us about our businesses in our public filings with the SEC, including without limitation the risk factors more specifically described in Part II Item 1A. Risk Factors of this Quarterly Report on Form 10-Q and in Part I Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2008.

Available Information

We file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's website at www.sec.gov. You may also read and copy any document we file at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. We make available, free of charge through our Internet website, www.masseyenergyco.com (which website is not incorporated by reference into this report), our annual report, quarterly reports, current reports, proxy statements, section 16 reports and other information (and any amendments thereto) as soon as practicable after filing or furnishing the material to the SEC, in addition to our Corporate Governance Guidelines, codes of ethics and the charters of the Audit, Compensation, Executive, Finance, Governance and Nominating, and Safety, Environmental, and Public Policy Committees. These materials also may be requested at no cost by telephone at (866) 814-6512 or by mail at: Massey Energy Company, Post Office Box 26765, Richmond, Virginia 23261, Attention: Investor Relations.

Executive Overview

We operate coal mines and processing facilities in Central Appalachia, which generate revenues and cash flow through the mining, processing and selling of steam and metallurgical grade coal, primarily of a low sulfur content. We also generate income and cash flow through other coal-related businesses, including the management of material handling facilities. Other revenue is obtained from royalties, rentals, gas well revenues, gains on the sale of non-strategic assets and miscellaneous income.

We reported net income for the first quarter of $43.4 million, or $0.51 per diluted share, compared to $41.9 million, or $0.52 per diluted share, for the first quarter of 2008. The reported net income for the first quarter of 2009 included a pre-tax gain of $7.1 million ($0.07 per basic share) on the sale of certain coal reserves and the recognition of $12.2 million in pre-tax income ($0.11 per basic share) ($5.1 million benefit recorded in Cost of purchased coal revenue and $7.1 million in interest income) from the receipt of black lung excise tax refunds as authorized by federal legislation passed in October 2008. Results for the first quarter of 2008 included a $13.6 million pre-tax gain ($0.13 per basic share) on an exchange of coal reserves.

Produced tons sold were 10.8 million in the quarter, compared to 9.6 million in the first quarter of 2008. We produced 11.4 million and 10.0 million tons in the first quarter of 2009 and 2008, respectively. The higher coal production in 2009 was primarily the result of new mines started in 2008. Exports decreased to 1.6 million tons versus 1.8 million tons in the first quarter of 2009 versus 2008. Quarterly shipments of produced tons for the remaining quarters in 2009 are expected to be lower than during the first quarter of 2009. Increasing coal stockpiles and weak demand for electric power generation and steel production in both domestic and international markets have created challenges among our customer base to accept shipments of coal according to contracted schedules. We are working with our customers to modify shipment schedules and amend contract terms where necessary or appropriate, which may affect our revenues and margins in future periods.

During the first quarter of 2009, Produced coal revenue increased by 25% compared to the first quarter of 2008 reflecting higher shipments in 2009 and a 12% increase in average produced coal revenue per ton sold. Our average Produced coal revenue per ton sold in the first quarter of 2009 increased to $63.03 compared to $56.36 in the first quarter of 2008. Our average Produced coal revenue per ton in the first quarter of 2009 for metallurgical tons sold increased by 28% to $102.99 from $80.63 in the first quarter of 2008. The improvement in average Produced coal revenue per ton is largely attributable to prices contracted during a period of increased demand and resultant higher pricing for all grades of coal in the United States secured in new coal sales agreements as lower-priced contracts expired.

Our Average cash cost per ton sold (see Note 1 below) was $52.55, compared to $45.62 in the previous year's first quarter. The increased cost level is primarily due to higher sales-related costs from the growth in average per ton realization, increased trucking and equipment rental costs, and higher labor costs, that more than offset lower stock-based compensation accruals. In response to the current difficult market conditions, we have taken certain actions to reduce overall costs including the idling of several higher cost mines, limitation of overtime, selective general and administrative cost reductions, renegotiation of supply contracts and the implementation of significant wage and benefit reductions beginning on May 1, 2009. Additional cost cutting initiatives are under consideration for implementation during the remainder of 2009.

The continuing recession, credit crisis and related turmoil in the global financial system has had and may continue to have a negative impact on our business, financial condition and liquidity. We may face significant future challenges if conditions in the financial markets do not improve or continue to worsen. Worldwide demand for coal has been adversely impacted, particularly for our metallurgical grade coals, which we expect will have a negative effect on our revenues. The competitiveness of coal exported from the United States has been negatively impacted by strengthening of the U.S. dollar and the decline of freight costs of ocean going vessels allowing coal produced in more distant countries, such as Australia, to compete with U.S. exports in the Atlantic Basin. Moreover, volatility and disruption of financial markets could affect the creditworthiness of our customers and/or limit our customers' ability to obtain adequate financing to maintain operations and result in a further decrease in sales volume that could have a negative impact on our cash flows, results of operations or financial condition.

                                                                Three Months Ended
                                                        March 31,                  March 31,
                                                           2009                      2008
                                                      $        per ton            $      per ton
                                                       (In Millions, Except Per Ton Amounts)
Total costs and expenses                         $   695.3                 $     575.6
Less: Freight and handling costs                      57.8                        65.0
Less: Cost of purchased coal revenue                   5.2                         9.9
Less: Depreciation, depletion and amortization        72.6                        60.2
Less: Other expense                                    0.8                         0.8
Less: Gain on derivative instruments                 (8.9)                           -
Average cash cost                                $   567.8       $52.55     $    439.7    $45.62

Results of Operations

Three months ended March 31, 2009 compared to three months ended March 31, 2008

Revenues

                                    Three Months Ended
                                         March 31,
                                                                Increase        % Increase
                                    2009          2008         (Decrease)       (Decrease)
                                               (In Thousands)
 Revenues
   Produced coal revenue          $ 681,027     $ 543,231     $    137,796               25 %
   Freight and handling revenue      57,782        65,042           (7,260 )            (11 )%
   Purchased coal revenue             9,940        10,674             (734 )             (7 )%
   Other revenue                     19,339        25,678           (6,339 )            (25 )%
 Total revenues                   $ 768,088     $ 644,625     $    123,463               19 %

The following is a breakdown by market served of the changes in produced tons sold and average produced coal revenue per ton sold for the first quarter of 2009 compared to the first quarter of 2008:

                                              Three Months Ended
                                                   March 31,
                                                                            Increase          % Increase
                                              2009           2008          (Decrease)         (Decrease)
                                              (In Millions, Except Per Ton Amounts)
Produced tons sold:
  Utility                                          8.3           6.3                2.0                  32 %
  Metallurgical                                    1.8           2.3               (0.5 )               (22 )%
  Industrial                                       0.7           1.0               (0.3 )               (30 )%
   Total                                          10.8           9.6                1.2                  13 %

Produced coal revenue per ton sold:
  Utility                                  $     54.14     $   47.89     $         6.25                  13 %
  Metallurgical                                 102.99         80.63              22.36                  28 %
  Industrial                                     65.34         55.21              10.13                  18 %
   Weighted average                        $     63.03     $   56.36     $         6.67                  12 %

Shipments of utility coal increased in the first three months of 2009 compared to the same period in 2008 as production of utility quality coal increased, mainly as a result of new mines started in 2008. Shipments of metallurgical and industrial coal declined during the first three months of 2009 compared to the same period in 2008 due to lower customer demand, as the United States and world economies suffered through a continuing severe recession. The average per ton sales price for utility, metallurgical and industrial coal were higher in the first three months of 2009 compared to the first three months of 2008, attributable to prices contracted during prior periods when demand and pricing were elevated for all grades of coal in the United States.

Freight and handling revenue decreased due to a reduction in fuel surcharges in the first quarter of 2009 compared to the first quarter of 2008, and by a decrease in export tons sold from 1.8 million in the first quarter of 2008 to 1.6 million in the first quarter of 2009.

Other revenue includes refunds on railroad agreements, royalties related to coal lease agreements, gas well revenue, gains on the sale of non-strategic assets and reserve exchanges, joint venture revenue and other miscellaneous revenue. Other revenue for the first quarter of 2009 includes a pre-tax gain of $7.1 million on the sale of our interest in certain coal reserves to a third party (see Note 4 to the Notes to Condensed Consolidated Financial Statements for further discussion). In addition, royalty income was higher in 2009 than in 2008, offset by lower railroad refund income in 2009 compared to 2008. Other revenue for the first quarter of 2008 includes a pre-tax gain of $13.6 million on an exchange of coal reserves.

Costs

                                              Three Months Ended
                                                   March 31,
                                                                          Increase        % Increase
                                              2009          2008         (Decrease)       (Decrease)
                                                         (In Thousands)
Costs and expenses
  Cost of produced coal revenue             $ 545,925     $ 418,227     $    127,698               31 %
  Freight and handling costs                   57,782        65,042           (7,260 )            (11 )%
  Cost of purchased coal revenue                5,206         9,864           (4,658 )            (47 )%
Depreciation, depletion and amortization, applicable
to:
   Cost of produced coal revenue               71,618        59,348           12,270               21 %
   Selling, general and administrative          1,021           904              117               13 %
  Selling, general and administrative          21,870        21,479              391                2 %
  Other expense                                   783           786               (3 )              0 %
  Gain on derivative instruments               (8,867 )           -           (8,867 )            100 %
Total costs and expenses                    $ 695,338     $ 575,650     $    119,688               21 %

Cost of produced coal revenue increased primarily due to increased volume of produced tons sold from 9.6 million in the first quarter of 2008 to 10.8 million in the first quarter of 2009. Other reasons for the cost increase are additional sales-related costs on higher produced coal revenues, which include additional production royalties and severance taxes, increased trucking and equipment rental costs and higher labor costs.

Freight and handling costs decreased due to a reduction in fuel surcharges in the first quarter of 2009 compared to the first quarter of 2008, and by a decrease in export tons sold from 1.8 million in the first quarter of 2008 to 1.6 million in the first quarter of 2009.

Cost of purchased coal revenue decreased due to a $5.1 million black lung excise tax refund recorded in the first quarter of 2009.

Depreciation, depletion and amortization increased due to higher production levels and increased capital expenditures in recent prior periods.

Gain on derivative instruments represents net gains of $8.9 million related to purchase and sales contracts that qualify as derivatives (see Note 11 to the Notes to Condensed Consolidated Financial Statements for further discussion).

Interest Income

Interest income increased due to a $7.1 million black lung excise tax refund recorded in the first quarter of 2009 offset by a significant reduction in interest earned on money market funds.

Interest Expense

Interest expense increased due to the adoption of FSP APB 14-1 during the first quarter 2009 resulting in additional interest expense of $4.5 million in the first quarter of 2009 (see Note 5 to the Notes to Condensed Consolidated Financial Statements for further discussion).

Income Taxes

Our effective tax rate is sensitive to changes in estimates of annual pre-tax earnings and percentage depletion. The increase in the effective tax rate from the first quarter of 2008 to the first quarter of 2009 is primarily the result of differences in pre-tax income, the impact of percentage depletion and projected changes in temporary taxable and deductible differences. Our first quarter 2008 income tax benefit was impacted by a favorable adjustment for interest received from the IRS in connection with the closing of a prior period audit.

Liquidity and Capital Resources

At March 31, 2009, our available liquidity was $666.2 million, comprised of Cash
and cash equivalents of $566.7 million and $99.5 million of availability from
our asset-based revolving credit facility. We also have a $24.9 million
investment in the Primary Fund, which is recorded in Short-term investment. Our
total debt-to-book capitalization ratio was 52.9% at March 31, 2009.

Our Debt was comprised of the following:

                                                                                    As Adjusted
                                                            March 31, 2009       December 31, 2008
                                                                        (In Thousands)
6.875% senior notes due 2013, net of discount
   of $3,792 and $3,959, respectively                      $        756,208     $           756,041
3.25% convertible senior notes due 2015, net of discount
   of $148,916 and $153,462, respectively                           522,084                 517,538
6.625% senior notes due 2010                                         21,949                  21,949
2.25% convertible senior notes due 2024                               9,647                   9,647
4.75% convertible senior notes due 2023                                  70                      70
Capital lease obligations                                             6,441                   6,912
     Total debt                                                   1,316,399               1,312,157
Amounts due within one year                                          (2,048 )                (1,976 )
     Total long-term debt                                  $      1,314,351     $         1,310,181

We believe that we are currently in compliance with all of our debt covenants.

Common Stock Offering Program

On February 3, 2009, pursuant to Rule 424(b)(5),we filed a prospectus supplement with the Securities and Exchange Commission ("SEC") allowing us to sell up to 5.0 million shares of Common Stock from time to time at our discretion. The proceeds from any shares of Common Stock sold will be used for general corporate purposes, which may include funding for acquisitions or investments in business, products, technologies, and repurchases and repayment of our indebtedness. As of March 31, 2009, no shares of Common Stock had been sold pursuant to this program.

Cash Flow

Net cash provided by operating activities was $40.9 million for the three months ended March 31, 2009 compared to $137.4 million for the three months ended March 31, 2008. Cash provided by operating activities reflects Net income adjusted for non-cash charges and changes in working capital requirements.

Net cash utilized by investing activities was $75.6 million and $122.2 million for the three months ended March 31, 2009 and 2008, respectively. The cash used in investing activities reflects capital expenditures in the amount of $103.7 million and $123.5 million for the three months ended March 31, 2009 and 2008, respectively. These capital expenditures are for replacement of mining equipment, the expansion of mining and shipping capacity and projects to improve the efficiency of mining operations. Additionally, the three months ended March 31, 2009 and 2008 included $13.6 million and $1.4 million, respectively, of proceeds provided by the sale of assets.

Net cash utilized by financing activities was $5.6 million compared to net cash provided of $10.6 million for the three months ended March 31, 2009 and 2008, respectively. Financing activities for the three months ended March 31, 2009 and 2008 primarily reflects change in debt levels, as well as the exercising of stock options and payments of dividends.

We believe that cash on hand, cash generated from operations and our borrowing capacity will be sufficient to meet our working capital requirements, scheduled debt payments, potential share repurchases and debt repurchases, anticipated dividend payments, expected settlements of outstanding litigation and anticipated capital expenditures for at least the next twelve months. Nevertheless, our ability to satisfy our debt service obligations, repurchase shares and debt, pay dividends, pay settlements or judgments in respect of pending litigation or fund planned capital expenditures, will substantially depend upon our future operating performance, which will be affected by prevailing economic conditions in the coal industry, debt covenants and financial, business and other factors, some of which are beyond our control. We frequently evaluate potential acquisitions. In the past, we have funded acquisitions primarily with cash generated from operations. As a result of the cash needs we have described above and possible acquisition opportunities, in the future we may consider a variety of financing sources, including debt or equity financing. Currently, other than our asset-based revolving credit facility, we have no commitments for any additional financing. We cannot be certain that we can obtain additional financing on terms that we find acceptable, if at all, through the issuance of equity securities or the incurrence of additional debt. Additional equity financing may dilute our . . .