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Walter Energy Announces Second Quarter 2011 Results
-- Sells Record 2.7 Million Metric Tons of Metallurgical Coal; Up 73.6 Percent
-- Generates GAAP Earnings per Share of $1.71; $2.36 per Diluted Share When Adjusted for Purchase Accounting and One-Time Charges
 -- Achieves Record Quarterly Consolidated Revenues of $773.0 Million From Continuing Operations, 88.3 Percent Increase From Second Quarter 2010
 -- Delivers 37.8 Percent EBITDA Growth to $267.6 Million
 -- Anticipates Second Half 2011 Metallurgical Coal Sales of Approximately 5.9 Million Metric Tons
 -- Expects 50 Percent Annual Metallurgical Coal Sales Volume Expansion by End of 2013

BIRMINGHAM, AL, Aug 03, 2011 (MARKETWIRE via COMTEX) -- Walter Energy (NYSE: WLT) (TSX: WLT), the world's leading, publicly traded "pure play" producer of metallurgical coal for the global steel industry, today announced net income of $107.4 million for the quarter ended June 30, 2011 compared to $116.2 million in the second quarter 2010. Diluted earnings per share of $1.71 in the second quarter 2011 compares to earnings of $2.16 in the same period last year. Results for the prior-year period exclude results from the Company's Western Coal Corp. ("Western") and North River Mine operations, as these were not acquired until the second quarter 2011. Western had operations in Canada, the United Kingdom and West Virginia. The North River Mine is located in Alabama.

The acquisitions completed in this quarter of Western and the North River Mine resulted in the allocations of cost to acquired property, mineral interests and inventories in amounts in excess of the historical cost value of these assets. Depreciation and depletion of these costs, and the costs included in acquired inventories sold during the quarter, net of tax, totaled $44.2 million, partially offset by a $15.0 million, net of tax, gain on the initial investment in Western in the first quarter 2011. Non-recurring costs associated with the acquisitions incurred during the quarter amounted to $11.8 million, net of tax. Adjusted net income was $148.4 million, or $2.36 per diluted share after excluding the above-described costs.

"Walter Energy continues to execute on its long-term strategic plan to grow its met coal production base, highlighted by the acquisition of Western in April and our execution of lease agreements on 68 million metric tons of Blue Creek coal reserves in May," said Joe Leonard, interim chief executive officer. "Those initiatives are beginning to show positive results as we increased met coal sales to a record 2.7 million metric tons in the quarter, and we expect to grow total met coal sales volumes by an additional 50 percent by the end of 2013. In addition, we have further organic and bolt-on growth opportunities in our pipeline to continue increasing and diversifying our metallurgical coal production footprint over the course of this decade to carry on our outstanding track record of creating value for our shareholders."

"During the quarter, we experienced difficult geology in Alabama and weather-related challenges at both our Alabama and Northeast British Columbia operations, which adversely affected production and sales results. We are putting these production issues behind us and expect to finish 2011 with second half met coal sales of approximately 5.9 million metric tons."

Segment Presentation

The Company is reporting results in three segments. The U.S. Operations segment includes Walter Energy's historical Underground Mining, Surface Mining and Walter Coke operating segments as well as the West Virginia mining operations acquired through the acquisition of Western on April 1, 2011 and, since May 7, 2011, the North River Mine. The Canadian and U.K. Operations segment includes mining operations in northeast British Columbia (Canada) and in South Wales (United Kingdom). These operations were also acquired through the acquisition of Western. The Other segment primarily includes corporate expenses.

Second Quarter 2011 Consolidated Financial and Operating Results

Consolidated revenues for the second quarter 2011 totaled $773.0 million, an 88.3 percent increase over the prior-year period. Revenue improvements were generated primarily by the addition of the Canada, West Virginia, U.K. and North River operations, and higher average metallurgical coal pricing at the U.S. operations.

Operating income totaled $153.6 million for the quarter compared to $170.2 million in the prior-year period. Operating income was lower than in the prior year, primarily as a result of the one-time charges mentioned above and higher per ton production costs, partially offset by operating income from the Canada, West Virginia and U.K. operations.

EBITDA for the second quarter 2011 was $267.6 million, compared to $194.1 million in the second quarter 2010. EBITDA improved in the current period primarily as a result of higher earnings acquired through the acquisition of Western and a gain in the value of the initial stock investment in Western acquired by the Company on January 20, 2011.

Walter Energy sold a record 2.7 million metric tons of metallurgical coal compared to 1.5 million metric tons of metallurgical coal sold in the previous year. Total metallurgical coal production volumes improved 58.7 percent to 2.5 million metric tons compared to the second quarter 2010. The increases in sales and production were primarily the result of tons from the Canada, West Virginia and Wales operations.

U.S. Operations

The U.S. Operations segment reported revenues of $506.9 million in the second quarter 2011, compared to $410.0 million in the prior-year period. Operating income was $168.7 million, down $13.4 million from the prior-year period. Revenues were higher primarily due to the addition of the West Virginia and North River mining operations and higher average metallurgical coal selling prices, partially offset by lower sales volumes from the underground Alabama operations. Operating income was lower primarily due to higher cost per ton associated with lower metallurgical production volumes in Alabama and increased freight expense, partially offset by higher average metallurgical coal pricing.

Metallurgical coal sales volumes from the U.S. operations totaled 1.5 million metric tons in the second quarter 2011, essentially even with the prior-year period. Sales volumes in the current period were constrained by metallurgical coal availability resulting from production impacts related to a geological 'squeeze' at Mine No. 7 and issues related to the April 27 Alabama tornadoes. Second quarter 2011 metallurgical coal sales prices at the U.S. operations averaged $236.37 per metric ton, up from $213.13 per metric ton in the prior-year period. Average pricing improvements were primarily the result of higher average second quarter contract pricing, partially offset by sales of 706,000 carryover tons with lower first quarter pricing in the current period. U.S. Operations produced 1.6 million metric tons of metallurgical coal in the quarter, up 4.7 percent from the second quarter 2010, as the addition of metallurgical coal production from West Virginia more than offset the impacts of production issues in Alabama. U.S. production costs were $75.16 per metric ton, up 13.2 percent from the second quarter 2010, primarily as a result of lower production volumes from the Alabama underground operations.

Canadian and U.K. Operations

The Company's Canadian and U.K. Operations segment reported operating income of $12.4 million for the second quarter 2011 on revenues of $265.6 million. Operating income was adversely impacted by the purchase accounting adjustments described previously.

This segment sold 1.1 million metric tons of metallurgical coal in the second quarter 2011 at an average sales price of $231.54 per metric ton. The Canadian and U.K. Operations segment produced 0.9 million metric tons of metallurgical coal in the quarter at an average cost of $137.35 per metric ton. Challenging weather conditions and permit delays in Northeast British Columbia impacted sales and production volumes, as well as production costs, in the quarter. The permits have subsequently been received.

Other

The Other segment reported $15.6 million in higher operating losses from the prior-year period, primarily due to Western and North River acquisition costs.

Liquidity and Capital Expenditures

At June 30, 2011, the Company had available liquidity of approximately $424.0 million, consisting of cash, cash equivalents and marketable securities of $134.2 million, plus $289.7 million available under the Company's $375 million revolver.

Capital expenditures for the quarter were $92.1 million, compared to $30.7 million for the second quarter last year. The increase in capital spending in the second quarter was primarily related to the expansion of the Canadian operations, with $51.7 million in spending at the Canadian and U.K. operations and $13.9 million in additional spending at the U.S. operations compared to the prior year.

Business Outlook

The Company anticipates second half 2011 metallurgical coal sales of approximately 5.9 million metric tons. Going forward, the Company expects annual metallurgical coal sales volume to grow by approximately 50 percent by the end of 2013.

Use of Non-GAAP Measures

This release contains the use of certain non-GAAP (U.S. Generally Accepted Accounting Principles) measures such as "adjusted earnings per diluted share" and "adjusted net income" as well as EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). These non-GAAP measures are provided as supplemental to, and not as replacement of nor equal to, financial measures prepared in accordance with GAAP. Management feels that these non-GAAP measures provide additional insights into the performance of the Company that they believe are helpful to investors and they reflect how management analyzes Company performance and compares that performance against other Companies. A reconciliation of non-GAAP to GAAP measures is provided in the financial section of this release.

Conference Call Web Cast

Interim Chief Executive Officer Joe Leonard, President - U.S. Operations Walt Scheller, President - Canadian and U.K. Operations Neil Winkelmann, Chief Accounting Officer Robert Kerley and other members of the Company's leadership team will discuss Walter Energy's second quarter results, its outlook and other general business matters during a conference call and live Web cast to be held Thursday, August 4, 2011, at 9 a.m. Eastern Daylight Time. To listen to the event live or in archive, visit the Company Web site at www.walterenergy.com.

About Walter Energy

Walter Energy is the world's leading, publicly traded "pure play" metallurgical coal producer for the global steel industry. The Company also produces thermal coal and industrial coal, anthracite, metallurgical coke and coal bed methane gas. The Company has strategic access to high-growth steel markets in Asia, South America and Europe. Walter Energy employs approximately 4,400 employees and contractors with operations in the United States, Canada and United Kingdom. For more information about Walter Energy, please visit the company website at www.walterenergy.com.

Safe Harbor Statement

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and may involve a number of risks and uncertainties. Forward-looking statements are based on information available to management at the time, and they involve judgments and estimates. Forward-looking statements include expressions such as "believe," "anticipate," "expect," "estimate," "intend," "may," "plan," "predict," "will," and similar terms and expressions. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to various risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements: the market demand for coal, coke and natural gas as well as changes in pricing and costs; the availability of raw material, labor, equipment and transportation; changes in weather and geologic conditions; changes in extraction costs, pricing and assumptions and projections concerning reserves in our mining operations; changes in customer orders; pricing actions by our competitors, customers, suppliers and contractors; changes in governmental policies and laws, including with respect to safety enhancements and environmental initiatives; availability and costs of credit, surety bonds and letters of credit; and changes in general economic conditions. Forward-looking statements made by us in this release, or elsewhere, speak only as of the date on which the statements were made. See also the "Risk Factors" in our 2010 Annual Report on Form 10-K and subsequent filings with the SEC which are currently available on our website at www.walterenergy.com. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us or our anticipated results. We have no duty to, and do not intend to, update or revise the forward-looking statements in this release, except as may be required by law. In light of these risks and uncertainties, readers should keep in mind that any forward-looking statement made in this press release may not occur. All data presented herein is as of the date of this release unless otherwise noted.

- WLT -


                    WALTER ENERGY, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            ($ in thousands, except per share and share amounts)
                                 Unaudited

                                                   For the three months
                                                      ended June 30,
                                               ----------------------------
                                                  2011 (1)         2010
                                               -------------  -------------
Revenues:
  Sales                                        $     766,716  $     405,709
  Miscellaneous income                                 6,284          4,913
                                               -------------  -------------
                                                     773,000        410,622
                                               -------------  -------------

Costs and expenses:
  Cost of sales (exclusive of depreciation and
   depletion)                                        462,061        184,086
  Depreciation and depletion                          89,426         23,885
  Selling, general and administrative (2)             57,521         22,057
  Postretirement benefits                             10,343         10,361
                                               -------------  -------------
                                                     619,351        240,389
                                               -------------  -------------

Operating income                                     153,649        170,233
  Interest expense                                   (32,047)        (4,164)
  Interest income                                        160            277
  Other income (3)                                    24,503              -
                                               -------------  -------------
Income from continuing operations before
 income taxes                                        146,265        166,346
Income tax expense                                    38,907         50,236
                                               -------------  -------------
Income from continuing operations                    107,358        116,110
Discontinued operations (4)                                -             53
                                               -------------  -------------
Net income                                     $     107,358  $     116,163
                                               =============  =============

Basic income per share:
Income from continuing operations              $        1.72  $        2.18
Discontinued operations                                    -              -
                                               -------------  -------------

Net income                                     $        1.72  $        2.18
                                               =============  =============

Weighted average number of shares outstanding
 (5)                                              62,312,691     53,363,356
                                               =============  =============

Diluted income per share:
Income from continuing operations              $        1.71  $        2.16
Discontinued operations                                    -              -
                                               -------------  -------------

Net income                                     $        1.71  $        2.16
                                               =============  =============

Weighted average number of diluted shares
 outstanding (5)                                  62,706,063     53,869,762
                                               =============  =============


(1) Includes the results of Western since the date of acquisition of April
    1, 2011 as well as the effect of related purchase accounting as detailed
    within the Supplemental Information exhibits.
(2) The 2011 second quarter includes $7.2 million of costs associated with
    the acquisition of Western.
(3) The 2011 second quarter includes a gain recognized on April 1, 2011 of
    $20.6 million as a result of remeasuring to fair value Western shares
    acquired from Audley Capital in January 2011.
(4) Discontinued operations includes the results of our closed Homebuilding
    and Kodiak operations for the second quarter 2010.
(5) The 2011 second quarter weighted average number of shares outstanding
    includes the issuance of 8,951,558 common shares on April 1, 2011 in
    connection with the acquisition of Western.


                    WALTER ENERGY, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            ($ in thousands, except per share and share amounts)
                                 Unaudited

                                                    For the six months
                                                      ended June 30,
                                               ----------------------------
                                                  2011 (1)         2010
                                               -------------  -------------
Revenues:
  Sales                                        $   1,173,291  $     713,819
  Miscellaneous income                                 8,443          8,852
                                               -------------  -------------
                                                   1,181,734        722,671
                                               -------------  -------------

Costs and expenses:
  Cost of sales (exclusive of depreciation and
   depletion)                                        680,521        373,597
  Depreciation and depletion                         117,784         46,054
  Selling, general and administrative (2)             89,403         40,750
  Postretirement benefits                             20,610         20,730
                                               -------------  -------------
                                                     908,318        481,131
                                               -------------  -------------

Operating income                                     273,416        241,540
  Interest expense                                   (35,603)        (8,941)
  Interest income                                        316            458
  Other income (3)                                    24,503              -
                                               -------------  -------------
Income from continuing operations before
 income taxes                                        262,632        233,057
Income tax expense                                    73,461         74,252
                                               -------------  -------------
Income from continuing operations                    189,171        158,805
Discontinued operations (4)                                -         (1,091)
                                               -------------  -------------
Net income                                     $     189,171  $     157,714
                                               =============  =============

Basic income per share:
Income from continuing operations              $        3.24  $        2.98
Discontinued operations                                    -          (0.02)
                                               -------------  -------------

Net income                                     $        3.24  $        2.96
                                               =============  =============

Weighted average number of shares outstanding
 (5)                                              58,389,805     53,365,768
                                               =============  =============

Diluted income per share:
Income from continuing operations              $        3.22  $        2.94
Discontinued operations                                    -          (0.02)
                                               -------------  -------------

Net income                                     $        3.22  $        2.92
                                               =============  =============

Weighted average number of diluted shares
 outstanding (5)                                  58,759,784     53,949,123
                                               =============  =============


(1) Includes the results of Western since the date of acquisition of April
    1, 2011 as well as the effect of related purchase accounting as detailed
    within the Supplemental Information exhibits.
(2) The 2011 period includes $17.1 million of costs associated with the
    acquisition of Western.
(3) The 2011 period includes a gain recognized on April 1, 2011 of $20.6
    million as a result of remeasuring to fair value Western shares acquired
    from Audley Capital in January 2011.
(4) Discontinued operations includes the results of our closed Homebuilding
    and Kodiak operations for the 2010 period.
(5) The 2011 period weighted average number of shares outstanding includes
    the issuance of 8,951,558 common shares on April 1, 2011 in connection
    with the acquisition of Western.


                    WALTER ENERGY, INC. AND SUBSIDIARIES
                        RESULTS BY OPERATING SEGMENT
                              ($ in thousands)
                                 Unaudited

                              For the three months     For the six months
                                 ended June 30,          ended June 30,
                             ----------------------  ----------------------
                                2011        2010        2011        2010
                             ----------  ----------  ----------  ----------

REVENUES: (1)
U.S. Operations              $  506,852  $  410,034  $  914,788  $  721,305
Canadian and U.K. Operations    265,575           -     265,575           -
Other                               573         588       1,371       1,366
                             ----------  ----------  ----------  ----------
  Revenues                   $  773,000  $  410,622  $1,181,734  $  722,671
                             ==========  ==========  ==========  ==========

OPERATING INCOME (LOSS): (1)
U.S. Operations              $  168,671  $  182,067  $  307,644  $  261,492
Canadian and U.K. Operations     12,448           -      12,448           -
Other (2)                       (27,470)    (11,834)    (46,676)    (19,952)
                             ----------  ----------  ----------  ----------
  Operating income           $  153,649  $  170,233  $  273,416  $  241,540
                             ==========  ==========  ==========  ==========

DEPRECIATION AND DEPLETION:
 (1)
U.S. Operations              $   39,269  $   23,798  $   67,438  $   45,890
Canadian and U.K. Operations     49,965           -      49,965           -
Other                               192          87         381         164
                             ----------  ----------  ----------  ----------
  Depreciation and Depletion $   89,426  $   23,885  $  117,784  $   46,054
                             ==========  ==========  ==========  ==========

CAPITAL EXPENDITURES: (1)
U.S. Operations              $   40,684  $   26,784  $   84,820  $   40,861
Canadian and U.K. Operations     51,699           -      51,699           -
Other                              (259)      3,919        (102)      4,179
                             ----------  ----------  ----------  ----------
  Capital Expenditures       $   92,124  $   30,703  $  136,417  $   45,040
                             ==========  ==========  ==========  ==========


(1) Beginning in the second quarter of 2011 the Company reports all
    operations located in the U.S. under the U.S. Operations segment which
    includes Walter Energy's historical operating segments of Underground
    Mining, Surface Mining and Walter Coke along with the West Virginia
    mining operations acquired through the acquisition of Western on April
    1, 2011. The Company reports its mining operations located in northeast
    British Columbia (Canada) and South Wales (United Kingdom), both
    acquired through the Western Coal acquisition, under the Canadian and
    U.K. Operations segment. The Other segment primarily includes corporate
    expenses.

(2) Amounts for the three and six months ended June 30, 2011 include $7.2
    million and $17.1 million, respectively, of costs associated with the
    April 1, 2011 acquisition of Western.



                    WALTER ENERGY, INC. AND SUBSIDIARIES
                          SUPPLEMENTAL INFORMATION
                                  Unaudited

                                  For the three months   For the six months
                                     ended June 30,        ended June 30,
                                 --------------------- ---------------------
                                  2011 (1)     2010     2011 (1)     2010
                                 ---------- ---------- ---------- ----------
Operating Data (per metric ton):

U.S. Operations:

  Metallurgical Coal
    Tons of coal sold (in
     thousands)                       1,549      1,542      3,036      3,156
    Average selling price per
     ton                         $   236.37 $   213.13 $   224.97 $   175.94
    Tons of coal produced (in
     thousands)                       1,648      1,574      3,148      3,133
    Coal production costs per
     ton (2)                     $    75.16 $    66.37 $    75.77 $    65.24

  Thermal Coal
    Tons of coal sold (in
     thousands)                       1,014        288      1,335        573
    Average selling price per
     ton                         $    73.69 $    80.82 $    78.73 $    82.68
    Tons of coal produced (in
     thousands)                         881        275      1,150        532
    Coal production costs per
     ton (2)                     $    63.15 $    77.17 $    67.43 $    70.18

Canadian and U.K. Operations:

  Metallurgical Coal
    Tons of coal sold (in
     thousands)                       1,128          -      1,128          -
    Average selling price per
     ton                         $   231.54 $        - $   231.54 $        -
    Tons of coal produced (in
     thousands)                         850          -        850          -
    Coal production costs per
     ton (2)                     $   137.35 $        - $   137.35 $        -

Combined Mining Operations:

    Tons of metallurgical coal
     sold (in thousands) (3)          2,677      1,542      4,164      3,156
    Tons of metallurgical coal
     produced (in thousands) (3)      2,498      1,574      3,998      3,133
    Tons of thermal coal sold
     (in thousands) (3)               1,033        288      1,354        573
    Tons of thermal coal
     produced (in thousands) (3)        906        275      1,175        532


(1) Includes results of Western since the date of acquisition, April 1,
    2011.

(2) Coal production costs per ton are a component of inventoriable costs,
    including depreciation. Other costs not included in coal production
    costs per ton include depletion of mineral interests, Company-paid
    outbound freight, postretirement benefits, asset retirement obligation
    expenses, royalties, and Black Lung excise taxes.

(3) Combined mining operations include thermal coal tons sold of 19,000 and
    25,000 produced from the Canadian and U.K. Operations segment for the
    three and six month periods ended June 30, 2011.


                    WALTER ENERGY, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                              ($ in thousands)
                                 Unaudited

                                                          As of
                                             ------------------------------
                                                June 30,      December 31,
                                              2011 (1) (2)        2010
                                             --------------  --------------
ASSETS
Cash and cash equivalents                    $      134,211  $      293,410
Receivables, net                                    332,512         143,238
Inventories                                         200,885          97,631
Deferred income taxes                                46,338          62,371
Prepaid expenses                                     67,909          28,179
Investments                                          70,060               -
Other current assets                                 47,209          10,710
                                             --------------  --------------
  Total current assets                              899,124         635,539
Mineral interests, net                            4,393,313          17,305
Property, plant and equipment, net                1,453,112         772,696
Deferred income taxes                                     -         149,520
Goodwill                                            251,035               -
Other long-term assets                              153,766          82,705
                                             --------------  --------------
  TOTAL ASSETS                               $    7,150,350  $    1,657,765
                                             ==============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current debt                                 $       81,976  $       13,903
Accounts payable                                    134,162          70,692
Accrued expenses                                    217,836          52,399
Accumulated postretirement benefits
 obligation                                          25,379          24,753
Other current liabilities                            42,844          32,100
                                             --------------  --------------
  Total current liabilities                         502,197         193,847
Long-term debt                                    2,386,769         154,570
Deferred income taxes                             1,409,412               -
Accumulated postretirement benefits
 obligation                                         463,917         451,348
Other long-term liabilities                         363,030         262,934
                                             --------------  --------------
TOTAL LIABILITIES                                 5,125,325       1,062,699
STOCKHOLDERS' EQUITY                              2,025,025         595,066
                                             --------------  --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $    7,150,350  $    1,657,765
                                             ==============  ==============

(1) Includes accounts of Western acquired on April 1, 2011. The purchase
    price has been preliminarily allocated to the assets acquired and
    liabilities assumed based upon their estimated fair values at the date
    of acquisition. A full and detailed valuation of the assets and
    liabilities is being completed and certain information and analysis
    remains pending at this time. Accordingly, the allocation is preliminary
    and is expected to change as additional information becomes available
    and is assessed by the Company. The impact of such changes may be
    material.

(2) In January 2011, we acquired approximately 25.3 million common shares of
    Western from funds advised by Audley Capital for $293.7 million in cash.
    On April 1, 2011 we acquired the remaining common shares of Western for
    $3.4 billion, funded through $2.2 billion in long-term debt and the
    issue of approximately 9.0 million common shares of Walter Energy, Inc.
    valued at $1.2 billion.


                    WALTER ENERGY, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                          AND COMPREHENSIVE INCOME
                   FOR THE SIX MONTHS ENDED JUNE 30, 2011
                              ($ in thousands)
                                 Unaudited

                                                                 Accumulated
                                                                    Other
                                  Capital in   Compre-             Compre-
                           Common  Excess of   hensive  Retained   hensive
                  Total    Stock   Par Value   Income   Earnings    Loss
               ---------- ------- ---------- ---------- -------- ----------
Balance at
 December 31,
 2010          $  595,066 $   531 $  355,540            $411,383 $ (172,388)

Comprehensive
 income:
Net income        189,171                    $  189,171  189,171
Other
 comprehensive
 income, net
 of tax:
  Change in
   pension and
   post-
   retirement
   benefit
   plans            6,234                         6,234               6,234
  Change in
   unrealized
   loss on
   investment      (4,494)                       (4,494)             (4,494)
  Change in
   unrealized
   loss on
   hedges            (713)                         (713)               (713)
  Change in
   foreign
   currency
   translation
   adjustment      (1,101)                       (1,101)             (1,101)
                                             ----------
Comprehensive
 income                                      $  189,097
                                             ==========

Stock issued
 upon the
 exercise of
 stock options      5,924       3      5,921
Dividends
 paid, $0.25
 per share        (14,434)                               (14,434)
Stock-based
 compensation       5,328              5,328
Excess tax
 benefit from
 stock-based
 compensation
 arrangements       8,780              8,780
Issuance of
 common stock
 in connection
 with the
 Western
 acquisition    1,224,126      90  1,224,036
Replacement
 stock options
 and warrants
 issued in
 connection
 with the
 Western
 acquisition       16,302       -     16,302
Other              (5,164)      -     (5,164)
               ---------- ------- ----------            -------- ----------
Balance at
 June 30, 2011 $2,025,025 $   624 $1,610,743            $586,120 $ (172,462)
               ========== ======= ==========            ======== ==========




                    WALTER ENERGY, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              ($ in thousands)
                                 Unaudited

                                                 For the six months ended
                                                         June 30,
                                               ----------------------------
                                                  2011 (1)         2010
                                               -------------  -------------

OPERATING ACTIVITIES
Net income                                     $     189,171  $     157,714
  Loss from discontinued operations                        -          1,091
                                               -------------  -------------
  Income from continuing operations                  189,171        158,805

Adjustments to reconcile income from
 continuing operations to net cash flows
 provided by operating activities:
  Depreciation and depletion                         117,784         46,054
  Deferred income tax                                (14,840)        73,108
  Gain on investment in Western Coal Corp.           (20,553)             -
  Other                                               27,521          5,485

  Decrease (increase) in assets, net of effect
   of business acquisitions:
    Receivables                                      (61,301)       (65,865)
    Inventories                                       14,660         19,562
    Other current assets                                  30          4,555
  Increase (decrease) in liabilities, net of
   effect of business acquisitions:
    Accounts payable                                 (29,612)        18,879
    Accrued expenses and other current
     liabilities                                      36,769             98
                                               -------------  -------------
      Cash flows provided by operating
       activities                                    259,629        260,681
                                               -------------  -------------

INVESTING ACTIVITIES
  Additions to property, plant and equipment        (136,417)       (45,040)
  Acquisition of Western Coal Corp., net of
   cash acquired                                  (2,432,693)             -
  Acquisition of HighMount Exploration &
   Production Alabama, LLC                                 -       (209,964)
  Other                                                5,286         (5,236)
                                               -------------  -------------
      Cash flows used in investing activities     (2,563,824)      (260,240)
                                               -------------  -------------

FINANCING ACTIVITIES
  Proceeds from issuance of debt                   2,370,725              -
  Borrowings under revolving credit agreement         41,461              -
  Repayment on revolving credit agreement            (20,725)             -
  Retirements of debt                               (174,035)        (8,727)
  Dividends paid                                     (14,434)       (12,044)
  Purchases of stock under stock repurchase
   program                                                 -        (53,543)
  Debt issuance costs                                (80,027)             -
  Other                                               21,496          5,953
                                               -------------  -------------
      Cash flows provided by (used in)
       financing activities                        2,144,461        (68,361)
                                               -------------  -------------
      Cash flows used in continuing operations      (159,734)       (67,920)
                                               -------------  -------------

CASH FLOWS FROM DISCONTINUED OPERATIONS
  Cash flows used in operating activities                  -         (4,735)
  Cash flows provided by investing activities              -          2,294
  Cash flows provided by (used in) financing
   activities                                              -              -
                                               -------------  -------------
      Cash flows used in discontinued
       operations                                          -         (2,441)
                                               -------------  -------------

Net decrease in cash and cash equivalents      $    (159,734) $     (70,361)
                                               =============  =============

Cash and cash equivalents at beginning of
 period                                        $     293,410  $     165,279
Add: Cash and cash equivalents of discontinued
 operations at beginning of period                       535          1,254
Net decrease in cash and cash equivalents           (159,734)       (70,361)
Less: Cash and cash equivalents of
 discontinued operations at end of period                  -            470
                                               -------------  -------------
Cash and cash equivalents at end of period     $     134,211  $      95,702
                                               =============  =============

(1) Includes the results of Western since the date of acquisition, April 1,
2011.



                    WALTER ENERGY, INC. AND SUBSIDIARIES
                          SUPPLEMENTAL INFORMATION
                                 Unaudited

RECONCILIATION OF EBITDA TO AMOUNTS REPORTED UNDER US GAAP:

                              For the three months     For the six months
                                 ended June 30,          ended June 30,
                             ----------------------  ----------------------
($ in thousands)                2011        2010        2011        2010
                             ----------  ----------  ----------  ----------

Net income                   $  107,358  $  116,163  $  189,171  $  157,714
  Add interest expense           32,047       4,164      35,603       8,941
  Less interest income             (160)       (277)       (316)       (458)
  Add income tax expense         38,907      50,236      73,461      74,252
  Add depreciation and
   depletion expense             89,426      23,885     117,784      46,054
  (Income) loss from
   discontinued operations            -         (53)          -       1,091
Earnings from continuing
 operations before interest,
 income taxes, and
 depreciation and depletion
 (EBITDA) (1)                $  267,578  $  194,118  $  415,703  $  287,594
                             ==========  ==========  ==========  ==========



RECONCILIATION OF ADJUSTED NET INCOME AND EARNINGS PER SHARE TO AMOUNTS
 REPORTED UNDER US GAAP:



                                            For the three      Impact on
                                             months ended    Fully Diluted
                                            June 30, 2011       Earnings
                                           ($ in millions)     Per Share
                                           ---------------  ---------------
Net income                                 $         107.4  $          1.71

  Adjustments for purchase accounting and
   other one-time items (net of tax):
    Add increased depreciation and
     depletion on acquisition costs
     allocated to property and mineral
     interests in excess of historical
     costs                                            27.2             0.43
    Add acquisition costs allocated to
     inventories acquired and sold in the
     period in excess of historical costs             17.0             0.27
    Add acquisition and integration costs              8.1             0.13
    Less gain on investment in Western
     shares                                          (15.0)           (0.24)
    Add other non-recurring corporate
     expenses                                          3.7             0.06
                                           ---------------  ---------------
  Total adjustments                                   41.0             0.65

                                           ---------------  ---------------
Adjusted net income and adjusted diluted
 earnings per share (2)                    $         148.4  $          2.36
                                           ===============  ===============

Weighted average number of diluted shares
 outstanding                                                     62,706,063
                                                            ===============



(1) EBITDA is defined as earnings from continuing operations before interest
    expense, interest income, income taxes, and depreciation and depletion
    expense.  EBITDA is a financial measure which is not calculated in
    conformity with U.S. Generally Accepted Accounting Principles (GAAP) and
    should be considered supplemental to, and not as a substitute or
    superior to financial measures calculated in conformity with GAAP.  We
    believe that EBITDA is a useful measure as some investors and analysts
    use EBITDA to compare us against other companies and to help analyze our
    ability to satisfy principal and interest obligations and capital
    expenditure needs.  EBITDA may not be comparable to similarly titled
    measures used by other entities.

(2) Adjusted net income and adjusted diluted earnings per share are
    financial measures which are not calculated in conformity with U.S.
    Generally Accepted Accounting Principles (GAAP) and should be considered
    supplemental to, and not as a substitute or superior to financial
    measures calculated in conformity with GAAP. We believe that these
    measure are useful as some investors and analysts look to compare our
    current quarter results against those of past quarters and those of
    other companies to help evaluate our overall operating results.


SOURCE: Walter Energy

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Walter Energy, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.


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