Exhibit 99.1
| Walter Energy, Inc. |
P.O. Box 20608 | |
Tampa, Florida 33622-0608 | |
| |
www.walterenergy.com |
FOR IMMEDIATE RELEASE | Press Release |
October 26, 2010 |
|
Investor Contact: Mark H. Tubb
Vice President - Investor Relations
813.871.4027
mtubb@walterenergy.com
Media Contact: Michael A. Monahan
Director - - Corporate Communications
205.745.2628
mmonahan@walterenergy.com
WALTER ENERGY ANNOUNCES THIRD QUARTER 2010 EARNINGS OF $2.57 PER DILUTED SHARE
Underground Mining Segment Generates Record Operating Income of $202.8 Million on Coking Coal Sales of 1.9 Million Tons
Company Affirms 2010 Coking Coal Sales Outlook of 7.2 - 7.5 Million Tons and 8.5 - 9.0 Million Tons in 2011
(TAMPA, Fla.) - Walter Energy (NYSE: WLT), a leading U.S. producer and exporter of premium hard coking coal for the global steel industry, today reported income from continuing operations of $137.0 million, or $2.57 per diluted share, for the quarter ended Sept. 30, 2010, compared to $24.4 million, or $0.45 per diluted share in the third quarter 2009.
“Walter Energy generated substantial year-over-year earnings growth in the third quarter on robust pricing for our premium hard coking coal,” the Company’s Interim Chief Executive Officer Joe Leonard said. “We expect to see demand for our premium hard coking coal continue throughout the fourth quarter and, as a result, we are on pace for an outstanding 2010.”
Third Quarter 2010 Financial Results
Net sales and revenues for the third quarter 2010 totaled $464.3 million compared to $278.3 million in the prior-year period. Operating income totaled $207.8 million for the quarter, compared to $42.4 million in the prior-year period. Revenue and operating income improvements were primarily due to higher coking coal pricing in the underground mining segment.
Underground Mining
The underground mining segment reported net sales and revenues of $404.2 million in the third quarter 2010, compared to $233.1 million in the prior-year period. Operating income was $202.8 million, compared to operating income of $44.1 million in the same period last year. Revenues were higher primarily due to significantly higher average contract pricing versus the prior-year period. Revenues in the current period include the sale of approximately 153,000 tons of carryover coking coal at prices exceeding $315 per ton. Improved coking coal pricing also led to record operating income for the quarter and a 50 percent operating income margin.
Coking coal sales totaled 1.9 million tons in the third quarter, comparable to sales volumes in the prior-year period, at an average selling price of $206.62 per short ton FOB Port, a 69.8 percent increase over average selling prices of $121.66 per ton in the same period last year.
Total coking coal production was 1.8 million tons in the quarter, compared to 1.5 million tons in the third quarter 2009. The increase in production was generated primarily from incremental tons from the Mine No. 7 East expansion. Production costs for the quarter averaged $58.85 per ton, or $1.75 lower than in the prior-year period, primarily as cost improvements at Mine No. 7 offset increased spending at Mine No. 4.
“We overcame several production and transportation issues throughout the quarter to generate very solid third quarter results,” said Jim Walter Resources President & Chief Operating Officer Walt Scheller. “Production and sales remain on track and we are confident that we can achieve strong fourth quarter and full-year results.”
The natural gas business sold 3.5 billion cubic feet of gas at an average price of $4.61 per thousand cubic feet in the third quarter 2010 compared to 1.5 billion cubic feet at an average price of $3.29 per thousand cubic feet in the prior-year period. Results for the quarter include production and sales from the HighMount natural gas acquisition, which more than doubled natural gas production.
Surface Mining
The surface mining segment reported net sales and revenues of $34.2 million in the third quarter 2010, compared to $25.2 million in the prior-year period, primarily from improved sales volumes and pricing versus the prior-year period. Although revenues increased by 35.5 percent, operating income in the third quarter 2010 was essentially unchanged from the prior-year period, primarily as a result of higher mining ratios and difficult geologic conditions in the current quarter.
Surface mining coal sales were 368,000 tons during the third quarter, up 21.9 percent compared to the prior-year period primarily due to coal blending opportunities and inventory availability. Production was 391,000 tons, up 8.9 percent compared to the third quarter last year.
Walter Coke
Walter Coke reported net sales and revenues of $47.9 million in the third quarter 2010, compared to $23.3 million in the prior-year period. Walter Coke generated $6.3 million in operating income in the quarter versus a $0.2 million loss in the prior-year period, primarily on higher metallurgical coke sales volumes and pricing levels compared to the prior-year period.
Metallurgical coke sales in the third quarter 2010 totaled 111,000 tons at an average price of $385.04 per ton compared to 38,000 tons sold in the prior-year period at an average price of $361.95 per ton. Volume and pricing improvements were primarily the result of an improved domestic steel market.
Corporate and Other
At Sept. 30, 2010, the Company had available liquidity of $458.2 million, including cash of $218.4 million and $239.8 million available under its credit facility.
Through Sept. 30, 2010, the Company’s effective tax rate increased slightly to 32.3 percent. The estimated effective tax rate for the fourth quarter 2010 is expected to be 31.6 percent.
Business Outlook
Walter Energy’s business outlook includes the following:
Underground Mining(1) |
| Q3-2010 A |
| Q4-2010 E |
|
Coal Sales (short tons, in millions) |
| 1.9 |
| 1.7 - 2.0 |
|
Average Operating Margin(2) Per Ton |
| $108 |
| $84 - $87 |
|
Surface Mining |
| Q3-2010 A |
| Q4-2010 E |
|
Coal Sales (short tons) |
| 368,000 |
| 382,000 - 403,000 |
|
Average Operating Margin(2) Per Ton |
| $17 |
| $13 - $17 |
|
|
|
|
|
|
|
Walter Coke |
| Q3-2010 A |
| Q4-2010 E |
|
Coke Sales (tons) |
| 111,000 |
| 85,000 - 88,000 |
|
Average Operating Margin(2) Per Ton |
| $56 |
| $44 - $58 |
|
Quarter-to-quarter variability in timing, availability and pricing of shipments may result in significant shifts in income between quarters.
(1) Includes the coking coal operation at Jim Walter Resources; excludes the coal bed methane operations.
(2) Operating margin is defined as operating income (Earnings Before Interest & Taxes) from each business shown.
Coking coal contract pricing in the fourth quarter is expected to average $215 per metric ton, FOB Port, or approximately, $195 per short ton. Coking coal margins are also projected to be lower due to higher costs in the fourth quarter, primarily as a result of the expected delay in starting the second longwall panel in the East expansion at Mine No. 7.
The Company maintains its previous expectation that 2011 coking coal production and sales will be between 8.5 and 9.0 million tons. All pricing on 2011 coking coal sales remains open.
Conference Call Web Cast
Interim Chief Executive Officer Joe Leonard and members of the Company’s leadership team will discuss Walter Energy’s third quarter results, its outlook and other general business matters during a conference call and live Web cast to be held on Wednesday, Oct. 27, 2010, at 10 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 a leading U.S. producer and exporter of premium hard coking coal for the global steel industry and also produces steam coal and industrial coal, metallurgical coke and coal bed methane gas. The Company has revenues of approximately $1.4 billion and employs approximately 2,100 people. For more information about Walter Energy, please visit the Company Web site 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 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 2009 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 Sept. 30, 2010 unless otherwise noted.
- WLT -
WALTER ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share and share amounts)
Unaudited
|
| For the three months |
| ||||
|
| ended September 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
Net sales and revenues: |
|
|
|
|
| ||
Net sales |
| $ | 460,163 |
| $ | 276,331 |
|
Miscellaneous income |
| 4,099 |
| 1,974 |
| ||
|
| 464,262 |
| 278,305 |
| ||
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales (exclusive of depreciation) |
| 200,498 |
| 190,678 |
| ||
Depreciation |
| 25,905 |
| 18,214 |
| ||
Selling, general and administrative |
| 19,703 |
| 19,350 |
| ||
Postretirement benefits |
| 10,369 |
| 7,712 |
| ||
|
| 256,475 |
| 235,954 |
| ||
|
|
|
|
|
| ||
Operating income |
| 207,787 |
| 42,351 |
| ||
Interest expense |
| (4,179 | ) | (4,780 | ) | ||
Interest income |
| 175 |
| 152 |
| ||
Income from continuing operations before income taxes |
| 203,783 |
| 37,723 |
| ||
Income tax expense |
| 66,811 |
| 13,355 |
| ||
Income from continuing operations |
| 136,972 |
| 24,368 |
| ||
Discontinued operations (1) |
| (757 | ) | (560 | ) | ||
Net income |
| $ | 136,215 |
| $ | 23,808 |
|
|
|
|
|
|
| ||
Basic income per share: |
|
|
|
|
| ||
Income from continuing operations |
| $ | 2.59 |
| $ | 0.46 |
|
Discontinued operations |
| (0.02 | ) | (0.01 | ) | ||
|
|
|
|
|
| ||
Basic net income per share |
| $ | 2.57 |
| $ | 0.45 |
|
|
|
|
|
|
| ||
Weighted average number of shares outstanding |
| 52,919,764 |
| 52,903,686 |
| ||
|
|
|
|
|
| ||
Diluted income per share: |
|
|
|
|
| ||
Income from continuing operations |
| $ | 2.57 |
| $ | 0.45 |
|
Discontinued operations |
| (0.02 | ) | (0.01 | ) | ||
|
|
|
|
|
| ||
Diluted net income per share |
| $ | 2.55 |
| $ | 0.44 |
|
|
|
|
|
|
| ||
Weighted average number of diluted shares outstanding |
| 53,392,885 |
| 53,761,367 |
| ||
(1) Discontinued operations includes the results of our closed Homebuilding and Kodiak operations for both periods.
WALTER ENERGY, INC. AND SUBSIDIARIES
RESULTS BY OPERATING SEGMENT
($ in thousands)
Unaudited
|
| For the three months |
| ||||
|
| ended September 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
NET SALES AND REVENUES: |
|
|
|
|
| ||
Underground Mining |
| $ | 404,186 |
| $ | 233,060 |
|
Surface Mining |
| 34,182 |
| 25,229 |
| ||
Walter Coke |
| 47,891 |
| 23,307 |
| ||
Other |
| 784 |
| 910 |
| ||
Consolidating eliminations of intersegment activity |
| (22,781 | ) | (4,201 | ) | ||
|
| $ | 464,262 |
| $ | 278,305 |
|
|
|
|
|
|
| ||
OPERATING INCOME (LOSS): |
|
|
|
|
| ||
Underground Mining |
| $ | 202,813 |
| $ | 44,120 |
|
Surface Mining |
| 6,709 |
| 6,777 |
| ||
Walter Coke |
| 6,288 |
| (223 | ) | ||
Other |
| (7,731 | ) | (8,403 | ) | ||
Consolidating eliminations of intersegment activity |
| (292 | ) | 80 |
| ||
Operating income |
| $ | 207,787 |
| $ | 42,351 |
|
WALTER ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share and share amounts)
Unaudited
|
| For the nine months |
| ||||
|
| ended September 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
Net sales and revenues: |
|
|
|
|
| ||
Net sales |
| $ | 1,173,982 |
| $ | 721,502 |
|
Miscellaneous income |
| 12,951 |
| 9,060 |
| ||
|
| 1,186,933 |
| 730,562 |
| ||
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales (exclusive of depreciation) |
| 574,095 |
| 436,487 |
| ||
Depreciation |
| 71,959 |
| 54,216 |
| ||
Selling, general and administrative |
| 60,453 |
| 51,426 |
| ||
Postretirement benefits |
| 31,099 |
| 23,137 |
| ||
|
| 737,606 |
| 565,266 |
| ||
|
|
|
|
|
| ||
Operating income |
| 449,327 |
| 165,296 |
| ||
Interest expense |
| (13,120 | ) | (13,995 | ) | ||
Interest income |
| 633 |
| 628 |
| ||
Income from continuing operations before income taxes |
| 436,840 |
| 151,929 |
| ||
Income tax expense |
| 141,063 |
| 43,375 |
| ||
Income from continuing operations |
| 295,777 |
| 108,554 |
| ||
Discontinued operations (1) |
| (1,848 | ) | (572 | ) | ||
Net income |
| $ | 293,929 |
| $ | 107,982 |
|
|
|
|
|
|
| ||
Basic income per share: |
|
|
|
|
| ||
Income from continuing operations |
| $ | 5.56 |
| $ | 2.05 |
|
Discontinued operations |
| (0.04 | ) | (0.01 | ) | ||
|
|
|
|
|
| ||
Basic net income per share |
| $ | 5.52 |
| $ | 2.04 |
|
|
|
|
|
|
| ||
Weighted average number of shares outstanding |
| 53,224,084 |
| 53,051,794 |
| ||
|
|
|
|
|
| ||
Diluted income per share: |
|
|
|
|
| ||
Income from continuing operations |
| $ | 5.50 |
| $ | 2.02 |
|
Discontinued operations |
| (0.03 | ) | (0.01 | ) | ||
|
|
|
|
|
| ||
Diluted net income per share |
| $ | 5.47 |
| $ | 2.01 |
|
|
|
|
|
|
| ||
Weighted average number of diluted shares outstanding |
| 53,771,716 |
| 53,695,337 |
| ||
(1) Discontinued operations includes the results of our closed Homebuilding and Kodiak operations for both periods, while 2009 also includes the results of our Financing segment, which was spun off in April 2009.
WALTER ENERGY, INC. AND SUBSIDIARIES
RESULTS BY OPERATING SEGMENT
($ in thousands)
Unaudited
|
| For the nine months |
| ||||
|
| ended September 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
NET SALES AND REVENUES: |
|
|
|
|
| ||
Underground Mining |
| $ | 998,800 |
| $ | 607,670 |
|
Surface Mining |
| 97,872 |
| 73,527 |
| ||
Walter Coke |
| 144,056 |
| 63,864 |
| ||
Other |
| 2,150 |
| 2,039 |
| ||
Consolidating eliminations of intersegment activity |
| (55,945 | ) | (16,538 | ) | ||
|
| $ | 1,186,933 |
| $ | 730,562 |
|
|
|
|
|
|
| ||
OPERATING INCOME (LOSS): |
|
|
|
|
| ||
Underground Mining |
| $ | 436,042 |
| $ | 166,610 |
|
Surface Mining |
| 17,309 |
| 17,630 |
| ||
Walter Coke |
| 27,026 |
| (1,295 | ) | ||
Other |
| (27,683 | ) | (18,217 | ) | ||
Consolidating eliminations of intersegment activity |
| (3,367 | ) | 568 |
| ||
Operating income |
| $ | 449,327 |
| $ | 165,296 |
|
WALTER ENERGY, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
|
| For the three months |
| For the nine months |
| ||||||||
|
| ended September 30, |
| ended September 30, |
| ||||||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
Operating Data: |
|
|
|
|
|
|
|
|
| ||||
Underground Mining |
|
|
|
|
|
|
|
|
| ||||
Tons sold by type (in thousands): |
|
|
|
|
|
|
|
|
| ||||
Metallurgical coal, contracts |
| 1,789 |
| 1,868 |
| 5,244 |
| 4,618 |
| ||||
Purchased coal |
| 81 |
| 3 |
| 207 |
| 97 |
| ||||
|
| 1,870 |
| 1,871 |
| 5,451 |
| 4,715 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Average selling price per short ton |
| $ | 206.62 |
| $ | 121.66 |
| $ | 175.87 |
| $ | 124.11 |
|
|
|
|
|
|
|
|
|
|
| ||||
Tons sold by mine (in thousands): |
|
|
|
|
|
|
|
|
| ||||
Mine No. 4 |
| 713 |
| 748 |
| 2,115 |
| 2,109 |
| ||||
Mine No. 7 |
| 1,076 |
| 1,120 |
| 3,129 |
| 2,509 |
| ||||
Total |
| 1,789 |
| 1,868 |
| 5,244 |
| 4,618 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Coal cost of sales (exclusive of depreciation): |
|
|
|
|
|
|
|
|
| ||||
Mine No. 4 per ton |
| $ | 86.26 |
| $ | 73.09 |
| $ | 78.16 |
| $ | 69.98 |
|
Mine No. 7 per ton |
| $ | 78.11 |
| $ | 85.95 |
| $ | 77.10 |
| $ | 70.82 |
|
Weighted average cost of sales per ton |
| $ | 81.36 |
| $ | 80.80 |
| $ | 77.53 |
| $ | 70.44 |
|
Purchased coal costs (in thousands) |
| $ | 8,936 |
| $ | 92 |
| $ | 20,389 |
| $ | 4,048 |
|
Other costs (in thousands) (1) |
| $ | 818 |
| $ | 4,983 |
| $ | 7,607 |
| $ | 11,340 |
|
|
|
|
|
|
|
|
|
|
| ||||
Tons of coal produced (in thousands): |
|
|
|
|
|
|
|
|
| ||||
Mine No. 4 |
| 664 |
| 687 |
| 2,108 |
| 2,113 |
| ||||
Mine No. 7 |
| 1,134 |
| 849 |
| 3,016 |
| 2,617 |
| ||||
Total |
| 1,798 |
| 1,536 |
| 5,124 |
| 4,730 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Coal production costs per ton: (2) |
|
|
|
|
|
|
|
|
| ||||
Mine No. 4 |
| $ | 64.65 |
| $ | 58.27 |
| $ | 58.58 |
| $ | 55.45 |
|
Mine No. 7 |
| $ | 55.46 |
| $ | 62.48 |
| $ | 59.21 |
| $ | 62.43 |
|
Weighted average production costs per ton |
| $ | 58.85 |
| $ | 60.60 |
| $ | 58.95 |
| $ | 59.31 |
|
|
|
|
|
|
|
|
|
|
| ||||
Natural gas sales, in mmcf (in thousands) |
| 3,501 |
| 1,507 |
| 7,210 |
| 4,780 |
| ||||
Natural gas average sale price per mcf |
| $ | 4.61 |
| $ | 3.29 |
| $ | 4.73 |
| $ | 4.32 |
|
Natural gas cost of sales per mcf |
| $ | 2.19 |
| $ | 2.41 |
| $ | 2.48 |
| $ | 2.54 |
|
|
|
|
|
|
|
|
|
|
| ||||
Surface Mining |
|
|
|
|
|
|
|
|
| ||||
Tons sold (in thousands) |
| 368 |
| 302 |
| 1,128 |
| 908 |
| ||||
Tons of coal produced (in thousands) |
| 391 |
| 359 |
| 1,105 |
| 1,027 |
| ||||
Average selling price per short ton |
| $ | 87.93 |
| $ | 78.90 |
| $ | 82.28 |
| $ | 74.23 |
|
Coal production costs per ton |
| $ | 70.33 |
| $ | 54.25 |
| $ | 67.81 |
| $ | 60.13 |
|
(1) | Consists of charges (credits) not directly allocable to a specific underground mine. |
|
|
(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 Company-paid outbound freight, postretirement benefits, asset retirement obligation expenses, royalties, and Black Lung excise taxes. |
WALTER ENERGY, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
|
| For the three months |
| For the nine months |
| ||||||||
|
| ended September 30, |
| ended September 30, |
| ||||||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
Operating Data (continued): |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Walter Coke: |
|
|
|
|
|
|
|
|
| ||||
Metallurgical coke tons sold (in thousands) |
| 111 |
| 38 |
| 346 |
| 112 |
| ||||
Metallurgical coke average sales price per ton |
| $ | 385.04 |
| $ | 361.95 |
| $ | 370.45 |
| $ | 342.07 |
|
|
|
|
|
|
|
|
|
|
| ||||
Depreciation ($ in thousands): |
|
|
|
|
|
|
|
|
| ||||
Underground Mining |
| $ | 21,334 |
| $ | 14,824 |
| $ | 59,814 |
| $ | 43,760 |
|
Surface Mining |
| 3,380 |
| 2,142 |
| 8,755 |
| 6,694 |
| ||||
Walter Coke |
| 1,019 |
| 1,140 |
| 3,054 |
| 3,418 |
| ||||
Other |
| 172 |
| 108 |
| 336 |
| 344 |
| ||||
|
| $ | 25,905 |
| $ | 18,214 |
| $ | 71,959 |
| $ | 54,216 |
|
|
|
|
|
|
|
|
|
|
| ||||
Capital expenditures ($ in thousands): |
|
|
|
|
|
|
|
|
| ||||
Underground Mining |
| $ | 29,837 |
| $ | 13,350 |
| $ | 64,646 |
| $ | 50,847 |
|
Surface Mining |
| 4,790 |
| 912 |
| 8,691 |
| 12,720 |
| ||||
Walter Coke |
| 520 |
| 311 |
| 2,671 |
| 3,362 |
| ||||
Other |
| 43 |
| 376 |
| 4,222 |
| 383 |
| ||||
|
| $ | 35,190 |
| $ | 14,949 |
| $ | 80,230 |
| $ | 67,312 |
|
WALTER ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
Unaudited
|
| As of |
| ||||
|
| September 30, |
| December 31, |
| ||
|
| 2010 |
| 2009 |
| ||
ASSETS |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 218,419 |
| $ | 165,279 |
|
Receivables, net |
| 170,648 |
| 70,500 |
| ||
Inventories |
| 87,017 |
| 99,278 |
| ||
Deferred income taxes |
| 42,787 |
| 110,576 |
| ||
Prepaid expenses |
| 28,795 |
| 22,702 |
| ||
Other current assets |
| 4,627 |
| 4,363 |
| ||
Current assets of discontinued operations (1) |
| 6,105 |
| 15,197 |
| ||
Total current assets |
| 558,398 |
| 487,895 |
| ||
Property, plant and equipment, net |
| 739,963 |
| 522,931 |
| ||
Deferred income taxes |
| 163,390 |
| 178,338 |
| ||
Other long-term assets |
| 83,878 |
| 70,192 |
| ||
TOTAL ASSETS |
| $ | 1,545,629 |
| $ | 1,259,356 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
Accounts payable |
| $ | 61,941 |
| $ | 44,211 |
|
Accrued expenses |
| 56,176 |
| 39,034 |
| ||
Current debt |
| 18,956 |
| 13,351 |
| ||
Accumulated postretirement benefits obligation |
| 23,648 |
| 23,563 |
| ||
Other current liabilities |
| 17,611 |
| 18,513 |
| ||
Current liabilities of discontinued operations (1) |
| 4,761 |
| 7,310 |
| ||
Total current liabilities |
| 183,093 |
| 145,982 |
| ||
Long-term debt |
| 156,778 |
| 163,147 |
| ||
Accumulated postretirement benefits obligation |
| 434,277 |
| 429,096 |
| ||
Other long-term liabilities |
| 260,059 |
| 261,736 |
| ||
TOTAL LIABILITIES |
| 1,034,207 |
| 999,961 |
| ||
STOCKHOLDERS’ EQUITY |
| 511,422 |
| 259,395 |
| ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 1,545,629 |
| $ | 1,259,356 |
|
(1) Includes the remaining assets and liabilities of the Company’s closed Homebuilding and Kodiak businesses.
WALTER ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010
($ in thousands)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
| ||||||
|
|
|
|
|
| Capital in |
|
|
|
|
| Other |
| ||||||
|
|
|
| Common |
| Excess of |
| Comprehensive |
| Retained |
| Comprehensive |
| ||||||
|
| Total |
| Stock |
| Par Value |
| Income |
| Earnings |
| Loss |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance at December 31, 2009 |
| $ | 259,395 |
| $ | 533 |
| $ | 374,522 |
|
|
| $ | 50,852 |
| $ | (166,512 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net income |
| 293,929 |
|
|
|
|
| $ | 293,929 |
| 293,929 |
|
|
| |||||
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Change in pension and postretirement benefit plans |
| 9,862 |
|
|
|
|
| 9,862 |
|
|
| 9,862 |
| ||||||
Change in unrealized gain on hedges |
| (57 | ) |
|
|
|
| (57 | ) |
|
| (57 | ) | ||||||
Comprehensive income |
|
|
|
|
|
|
| $ | 303,734 |
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Purchases of stock under stock repurchase program |
| (65,438 | ) | (9 | ) | (65,429 | ) |
|
|
|
|
|
| ||||||
Stock issued upon the exercise of stock options |
| 10,273 |
| 6 |
| 10,267 |
|
|
|
|
|
|
| ||||||
Dividends paid, $0.35 per share |
| (18,654 | ) |
|
|
|
|
|
| (18,654 | ) |
|
| ||||||
Stock-based compensation |
| 2,342 |
| — |
| 2,342 |
|
|
|
|
|
|
| ||||||
Excess tax benefit from stock-based compensation arrangements |
| 22,784 |
|
|
| 22,784 |
|
|
|
|
|
|
| ||||||
Other |
| (3,014 | ) | (1 | ) | (3,013 | ) |
|
|
|
|
|
| ||||||
Balance at September 30, 2010 |
| $ | 511,422 |
| $ | 529 |
| $ | 341,473 |
|
|
| $ | 326,127 |
| $ | (156,707 | ) | |
WALTER ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
Unaudited
|
| For the nine months ended September 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
OPERATING ACTIVITIES |
|
|
|
|
| ||
Net income |
| $ | 293,929 |
| $ | 107,982 |
|
Loss (income) from discontinued operations |
| 1,848 |
| 572 |
| ||
Income from continuing operations |
| 295,777 |
| 108,554 |
| ||
|
|
|
|
|
| ||
Adjustments to reconcile income from continuing operations to net cash flows provided by operating activities: |
|
|
|
|
| ||
Depreciation |
| 71,959 |
| 54,216 |
| ||
Decrease in deferred income taxes |
| 85,703 |
| 12,906 |
| ||
Other |
| (12,553 | ) | 8,171 |
| ||
|
|
|
|
|
| ||
Decrease (increase) in assets, net of effect of business acquisition: |
|
|
|
|
| ||
Receivables |
| (91,783 | ) | 18,126 |
| ||
Inventories |
| 12,580 |
| (30,213 | ) | ||
Other current assets |
| 12,839 |
| 11,267 |
| ||
Increase (decrease) in liabilities, net of effect of business acquisition: |
|
|
|
|
| ||
Accounts payable |
| 14,966 |
| (12,126 | ) | ||
Accrued expenses and other current liabilities |
| 33,584 |
| (6,131 | ) | ||
Cash flows provided by (used in) operating activities |
| 423,072 |
| 164,770 |
| ||
|
|
|
|
|
| ||
INVESTING ACTIVITIES |
|
|
|
|
| ||
Additions to property, plant and equipment |
| (80,230 | ) | (67,312 | ) | ||
Acquisition (1) |
| (209,964 | ) | — |
| ||
Other |
| (4,105 | ) | 3,667 |
| ||
Cash flows provided by (used in) investing activities |
| (294,299 | ) | (63,645 | ) | ||
|
|
|
|
|
| ||
FINANCING ACTIVITIES |
|
|
|
|
| ||
Retirements of debt |
| (19,711 | ) | (55,260 | ) | ||
Dividends paid |
| (18,654 | ) | (15,887 | ) | ||
Cash spun off to Financing |
| — |
| (33,821 | ) | ||
Purchases of stock under stock repurchase program |
| (65,438 | ) | (27,963 | ) | ||
Other |
| 30,043 |
| (5,262 | ) | ||
Cash flows provided by (used in) financing activities |
| (73,760 | ) | (138,193 | ) | ||
Cash flows provided by (used in) continuing operations |
| 55,013 |
| (37,068 | ) | ||
|
|
|
|
|
| ||
CASH FLOWS FROM DISCONTINUED OPERATIONS |
|
|
|
|
| ||
Cash flows provided by (used in) operating activities |
| (6,146 | ) | 24,133 |
| ||
Cash flows provided by (used in) investing activities |
| 3,453 |
| 25,732 |
| ||
Cash flows provided by (used in) financing activities |
| — |
| (41,385 | ) | ||
Cash flows provided by (used in) discontinued operations |
| (2,693 | ) | 8,480 |
| ||
|
|
|
|
|
| ||
Net increase (decrease) in cash and cash equivalents |
| $ | 52,320 |
| $ | (28,588 | ) |
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
| $ | 165,279 |
| $ | 116,074 |
|
Add: Cash and cash equivalents of discontinued operations at beginning of period |
| 1,254 |
| 1,598 |
| ||
Net increase (decrease) in cash and cash equivalents |
| 52,320 |
| (28,588 | ) | ||
Less: Cash and cash equivalents of discontinued operations at end of period |
| 434 |
| 1,269 |
| ||
Cash and cash equivalents at end of period |
| $ | 218,419 |
| $ | 87,815 |
|
|
|
|
|
|
| ||
SUPPLEMENTAL DISCLOSURES |
|
|
|
|
| ||
|
|
|
|
|
| ||
Non-cash transactions: |
|
|
|
|
| ||
Financing of one-year property insurance policy |
| $ | 18,947 |
| $ | 8,515 |
|
Dividend to spin off Financing |
|
|
| $ | 437,407 |
| |
(1) On May 28, 2010, the Company acquired HighMount Exploration & Production Alabama, LLC for a cash payment of $210.0 million. The fair value of the assets acquired and the liabilities assumed totaled $217.6 and $7.6 million, respectively.