Supplemental Guarantor and Non-Guarantor Financial Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Guarantor and Non-Guarantor Financial Information

Schedule of Supplemental Condensed Consolidating Balance Sheets

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2014

(in thousands)

	Parent (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Cash and cash equivalents	$	421,533	$	1,117	$	45,882	$	—		$	468,532
Trade receivables, net	—		88,959		2,098		—			91,057
Other receivables	123,659		2,193		1,185		—			127,037
Intercompany receivables	—		206,118		14,952		(221,070		)	—
Inventories	—		110,882		90,716		—			201,598
Deferred income taxes	15,986		—		833		—			16,819
Prepaid expenses	3,424		40,044		2,722		—			46,190
Other current assets	10,363		7,029		2,150		—			19,542
Total current assets	574,965		456,342		160,538		(221,070		)	970,775
Mineral interests, net	—		135,377		2,701,424		—			2,836,801
Property, plant and equipment, net	7,558		726,478		732,261		—			1,466,297
Investment in subsidiaries	3,233,399		6,459		—		(3,239,858		)	—
Other long-term assets	87,928		17,857		6,471		—			112,256
	$	3,903,850	$	1,342,513	$	3,600,694	$	(3,460,928	)	$	5,386,129
LIABILITIES AND STOCKHOLDERS' EQUITY
Current debt	$	—	$	7,209	$	5,118	$	—		$	12,327
Accounts payable	2,296		30,697		5,987		—			38,980
Accrued expenses	43,088		60,762		21,468		—			125,318
Intercompany payables	221,070		—		—		(221,070		)	—
Pension and other postretirement benefits obligation	95		28,937		—		—			29,032
Other current liabilities	168,444		27,172		20,336		—			215,952
Total current liabilities	434,993		154,777		52,909		(221,070		)	421,609
Long-term debt	3,117,886		5,704		53		—			3,123,643
Pension and other postretirement benefits obligation	10,502		630,729		—		—			641,231
Deferred income taxes	23,766		—		706,919		—			730,685
Other long-term liabilities	35,122		96,599		55,659		—			187,380
Total liabilities	3,622,269		887,809		815,540		(221,070		)	5,104,548
Stockholders' equity	281,581		454,704		2,785,154		(3,239,858		)	281,581
	$	3,903,850	$	1,342,513	$	3,600,694	$	(3,460,928	)	$	5,386,129

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS

DECEMBER 31, 2013

(in thousands)

	Parent (Issuer)		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total Consolidated
ASSETS
Cash and cash equivalents	$	234,150	$	1,620	$	25,048	$	—		$	260,818
Trade receivables, net	—		92,027		57,089		—			149,116
Other receivables	113,936		3,157		15,554		—			132,647
Intercompany receivables	—		29,735		58,169		(87,904		)	—
Intercompany loans receivable	63,549		1,104,282		—		(1,167,831		)	—
Inventories	—		176,981		135,666		—			312,647
Deferred income taxes	23,957		12,716		394		—			37,067
Prepaid expenses	2,245		34,317		2,460		—			39,022
Other current assets	15,257		440		2,334		—			18,031
Total current assets	453,094		1,455,275		296,714		(1,255,735		)	949,348
Mineral interests, net	—		157,812		2,747,190		—			2,905,002
Property, plant and equipment, net	7,248		824,729		805,575		—			1,637,552
Deferred income taxes	3,049		—		—		(3,049		)	—
Investment in subsidiaries	4,409,683		6,401		—		(4,416,084		)	—
Other long-term assets	73,564		13,186		12,208		—			98,958
	$	4,946,638	$	2,457,403	$	3,861,687	$	(5,674,868	)	$	5,590,860
LIABILITIES AND STOCKHOLDERS' EQUITY
Current debt	$	—	$	1,424	$	7,786	$	—		$	9,210
Accounts payable	5,604		68,370		18,738		—			92,712
Accrued expenses	34,551		57,036		42,283		—			133,870
Intercompany payables	87,904		—		—		(87,904		)	—
Intercompany loans payable	1,104,282		—		63,549		(1,167,831		)	—
Pension and other postretirement benefits obligation	94		37,031		—		—			37,125
Other current liabilities	164,364		22,443		20,177		—			206,984
Total current liabilities	1,396,799		186,304		152,533		(1,255,735		)	479,901
Long-term debt	2,763,957		22		5,643		—			2,769,622
Pension and other postretirement benefits obligation	263		572,505		—		—			572,768
Deferred income taxes	—		24,079		801,837		(3,049		)	822,867
Other long-term liabilities	32,925		87,944		72,139		—			193,008
Total liabilities	4,193,944		870,854		1,032,152		(1,258,784		)	4,838,166
Stockholders' equity	752,694		1,586,549		2,829,535		(4,416,084		)	752,694
	$	4,946,638	$	2,457,403	$	3,861,687	$	(5,674,868	)	$	5,590,860

Schedule of Supplemental Condensed Consolidating Statements of Operations

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Revenues:
Sales	$	—		$	1,136,548		$	237,874		$	—	$	1,374,422
Miscellaneous income	1,206			13,631			18,086			—		32,923
	1,206			1,150,179			255,960			—		1,407,345
Cost and expenses:
Cost of sales (exclusive of depreciation and depletion)	—			963,015			303,742			—		1,266,757
Depreciation and depletion	2,456			148,218			111,851			—		262,525
Selling, general and administrative	6,276			47,167			18,572			—		72,015
Other postretirement benefits	(177		)	55,653			—			—		55,476
Restructuring and asset impairments	564			52,223			4,721			—		57,508
	9,119			1,266,276			438,886			—		1,714,281
Operating loss	(7,913		)	(116,097		)	(182,926		)	—		(306,936		)
Interest income (expense), net	(299,405		)	6,458			(2,956		)	—		(295,903		)
Gain on extinguishment of debt	33,673			—			—			—		33,673
Other income (loss), net	704			(2		)	(56		)	—		646
Loss before income tax benefit	(272,941		)	(109,641		)	(185,938		)	—		(568,520		)
Income tax benefit	(184		)	—			(97,768		)	—		(97,952		)
Equity in net losses of subsidiaries	(197,811		)	—			—			197,811		—
Net loss	$	(470,568	)	$	(109,641	)	$	(88,170	)	$	197,811	$	(470,568	)

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2013

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Revenues:
Sales	$	—		$	1,304,806		$	531,537		$	—	$	1,836,343
Miscellaneous income	88			11,201			12,999			—		24,288
	88			1,316,007			544,536			—		1,860,631
Cost and expenses:
Cost of sales (exclusive of depreciation and depletion)	—			985,176			573,129			—		1,558,305
Depreciation and depletion	2,150			157,065			152,299			—		311,514
Selling, general and administrative	4,393			53,415			42,186			—		99,994
Other postretirement benefits	(218		)	59,118			—			—		58,900
Restructuring and asset impairments	—			(7,763		)	10,646			—		2,883
	6,325			1,247,011			778,260			—		2,031,596
Operating income (loss)	(6,237		)	68,996			(233,724		)	—		(170,965		)
Interest income (expense), net	(252,144		)	27,877			2,684			—		(221,583		)
Loss on extinguishment of debt	(6,875		)	—			—			—		(6,875		)
Other income (loss), net	(300		)	(1,336		)	218			—		(1,418		)
Income (loss) before income tax expense (benefit)	(265,556		)	95,537			(230,822		)	—		(400,841		)
Income tax expense (benefit)	(51,821		)	111,527			(101,544		)	—		(41,838		)
Equity in net losses of subsidiaries	(145,268		)	—			—			145,268		—
Net loss	$	(359,003	)	$	(15,990	)	$	(129,278	)	$	145,268	$	(359,003	)

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2012

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations		Total Consolidated
Revenues:
Sales	$	—		$	1,702,246	$	679,514		$	—	$	2,381,760
Miscellaneous income (loss)	2,233			21,047		(5,145		)	—		18,135
	2,233			1,723,293		674,369			—		2,399,895
Cost and expenses:
Cost of sales (exclusive of depreciation and depletion)	—			1,142,914		654,077			—		1,796,991
Depreciation and depletion	1,379			165,300		149,553			—		316,232
Selling, general and administrative	11,716			72,962		48,789			—		133,467
Other postretirement benefits	(449		)	53,301		—			—		52,852
Restructuring and asset impairments	—			—		49,070			—		49,070
Goodwill impairment	—			74,319		990,090			—		1,064,409
	12,646			1,508,796		1,891,579			—		3,413,021
Operating income (loss)	(10,413		)	214,497		(1,217,210		)	—		(1,013,126		)
Interest income (expense), net	(151,488		)	22,909		(4,418		)	—		(132,997		)
Loss on extinguishment of debt	(5,555		)	—		—			—		(5,555		)
Other loss, net	—			—		(13,081		)	—		(13,081		)
Income (loss) from continuing operations before income tax expense (benefit)	(167,456		)	237,406		(1,234,709		)	—		(1,164,759		)
Income tax expense (benefit)	(68,615		)	73,379		(103,968		)			(99,204		)
Income (loss) from continuing operations	(98,841		)	164,027		(1,130,741		)	—		(1,065,555		)
Income from discontinued operations	—			5,180		—			—		5,180
Equity in net losses of subsidiaries	(961,534		)	—		—			961,534		—
Net income (loss)	$	(1,060,375	)	$	169,207	$	(1,130,741	)	$	961,534	$	(1,060,375	)

Schedule of Supplemental Condensed Consolidating Statements of Comprehensive Income

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING

STATEMENTS OF COMPREHENSIVE INCOME

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net loss	$	(470,568	)	$	(109,641	)	$	(88,170	)	$	197,811		(470,568		)
Other comprehensive loss:
Change in pension and other postretirement benefit plans, net of tax	(33,819		)	(30,275		)	—			30,275			(33,819		)
Change in unrealized gain on hedges, net of tax	1,679			3			—			(3		)	1,679
Change in foreign currency translation adjustment	(23,650		)	—			(23,650		)	23,650			(23,650		)
Total other comprehensive loss, net of tax	(55,790		)	(30,272		)	(23,650		)	53,922			(55,790		)
Total comprehensive loss	$	(526,358	)	$	(139,913	)	$	(111,820	)	$	251,733		$	(526,358	)

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING

STATEMENTS OF COMPREHENSIVE INCOME

YEAR ENDED DECEMBER 31, 2013

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Net loss	$	(359,003	)	$	(15,990	)	$	(129,278	)	$	145,268		$	(359,003	)
Other comprehensive income (loss):
Change in pension and other postretirement benefit plans, net of tax	100,892			91,501			—			(91,501		)	100,892
Change in unrealized gain on hedges, net of tax	2,524			58			—			(58		)	2,524
Change in foreign currency translation adjustment	6,073			—			6,073			(6,073		)	6,073
Change in unrealized loss on investments, net of tax	(897		)	—			(897		)	897			(897		)
Total other comprehensive income (loss), net of tax	108,592			91,559			5,176			(96,735		)	108,592
Total comprehensive income (loss)	$	(250,411	)	$	75,569		$	(124,102	)	$	48,533		$	(250,411	)

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING

STATEMENTS OF COMPREHENSIVE INCOME

YEAR ENDED DECEMBER 31, 2012

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Total Consolidated
Net income (loss)	$	(1,060,375	)	$	169,207		$	(1,130,741	)	$	961,534		$	(1,060,375	)
Other comprehensive income (loss):
Change in pension and other postretirement benefit plans, net of tax	(40,501		)	(90,876		)	—			90,876			(40,501		)
Change in unrealized gain (loss) on hedges, net of tax	(3,416		)	95			(2,533		)	2,438			(3,416		)
Change in foreign currency translation adjustment	1,774			—			1,774			(1,774		)	1,774
Change in unrealized gain on investments, net of tax	769			—			769			(769		)	769
Total other comprehensive income (loss), net of tax	(41,374		)	(90,781		)	10			90,771			(41,374		)
Total comprehensive income (loss)	$	(1,101,749	)	$	78,426		$	(1,130,731	)	$	1,052,305		$	(1,101,749	)

Schedule of Supplemental Condensed Consolidating Statement of Cash Flows

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Cash flows provided by (used in) operating activities	$	(179,786	)	$	53,037		$	(12,955	)	$	—		$	(139,704	)
INVESTING ACTIVITIES
Additions to property, plant and equipment	(3,279		)	(82,889		)	(6,831		)	—			(92,999		)
Proceeds from sale of property, plant and equipment	(44		)	30,156			—			—			30,112
Intercompany loans made	(5,200		)	—			—			5,200			—
Intercompany loans received	1,828			—			—			(1,828		)	—
Other	—			—			488			—			488
Cash flows used in investing activities	(6,695		)	(52,733		)	(6,343		)	3,372			(62,399		)
FINANCING ACTIVITIES
Proceeds from issuance of debt	869,800			—			—			—			869,800
Retirements of debt	(411,766		)	(7,626		)	(7,773		)	—			(427,165		)
Dividends paid	(2,625		)	—			—			—			(2,625		)
Debt issuance costs	(27,748		)	—			—			—			(27,748		)
Advances from (to) consolidated entities	(53,602		)	6,812			46,790			—			—
Intercompany notes borrowings	—			—			5,200			(5,200		)	—
Intercompany notes payments	—			—			(1,828		)	1,828			—
Proceeds from stock-options exercised	108			—			—			—			108
Other	(303		)	7			(7		)	—			(303		)
Cash flows provided by (used in) financing activities	373,864			(807		)	42,382			(3,372		)	412,067
Effect of foreign exchange rates on cash	—			—			(2,250		)	—			(2,250		)
Net increase (decrease) in cash and cash equivalents	187,383			(503		)	20,834			—			207,714
Cash and cash equivalents at beginning of period	234,150			1,620			25,048			—			260,818
Cash and cash equivalents at end of period	$	421,533		$	1,117		$	45,882		$	—		$	468,532

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2013

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Cash flows provided by (used in) operating activities	$	(204,982	)	$	246,428		$	(68,522	)	$	—		$	(27,076	)
INVESTING ACTIVITIES
Additions to property, plant and equipment	(2,294		)	(130,061		)	(21,541		)	—			(153,896		)
Proceeds from sales of investments	—			—			1,559			—			1,559
Intercompany loans made	(40,236		)	—			—			40,236			—
Intercompany loans received	30,500			—			—			(30,500		)	—
Other	—			—			1,824			—			1,824
Cash flows used in investing activities	(12,030		)	(130,061		)	(18,158		)	9,736			(150,513		)
FINANCING ACTIVITIES
Proceeds from issuance of debt	897,412			—			—			—			897,412
Retirements of debt	(496,062		)	(11,840		)	(7,293		)	—			(515,195		)
Dividends paid	(16,889		)	—			—			—			(16,889		)
Tax effect from stock-based compensation arrangements	(717		)	—			—			—			(717		)
Debt issuance costs	(41,588		)	—			—			—			(41,588		)
Advances from (to) consolidated entities	25,072			(97,311		)	72,239			—			—
Intercompany notes borrowings	—			—			40,236			(40,236		)	—
Intercompany notes payments	—			(13,639		)	(16,861		)	30,500			—
Proceeds from stock-options exercised	279			—			—			—			279
Other	(178		)	(115		)	—			—			(293		)
Cash flows provided by (used in) financing activities	367,329			(122,905		)	88,321			(9,736		)	323,009
Effect of foreign exchange rates on cash	—			—			(1,203		)	—			(1,203		)
Net increase (decrease) in cash and cash equivalents	150,317			(6,538		)	438			—			144,217
Cash and cash equivalents at beginning of period	83,833			8,158			24,610			—			116,601
Cash and cash equivalents at end of period	$	234,150		$	1,620		$	25,048		$	—		$	260,818

WALTER ENERGY, INC. AND SUBSIDIARIES

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2012

(in thousands)

	Parent (Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Consolidated
Cash flows provided by (used in) operating activities	$	(373,256	)	$	742,100		$	(38,937	)	$	—		$	329,907
INVESTING ACTIVITIES
Additions to property, plant and equipment	(4,395		)	(157,833		)	(229,284		)	—			(391,512		)
Proceeds from sales of investments	—			—			13,239			—			13,239
Intercompany loans made	(293,170		)	—			—			293,170			—
Intercompany loans received	16,513			—			—			(16,513		)	—
Investments in equity affiliates	(238,083		)	—			—			238,083			—
Distributions from equity affiliates	271,847			—			—			(271,847		)	—
Other	—			855			43			—			898
Cash flows used in investing activities	(247,288		)	(156,978		)	(216,002		)	242,893			(377,375		)
FINANCING ACTIVITIES
Proceeds from issuance of debt	496,510			—			—			—			496,510
Borrowings under revolving credit agreement	—			—			510,650			—			510,650
Repayments on revolving credit agreement	—			—			(519,453		)	—			(519,453		)
Retirements of debt	(343,255		)	(12,140		)	(37,456		)	—			(392,851		)
Dividends paid	(31,246		)	—			—			—			(31,246		)
Tax effect from stock-based compensation arrangements	217			—			—			—			217
Proceeds from stock-options exercised	161			—			—			—			161
Cash paid upon exercise of warrants	(11,535		)	—			—			—			(11,535		)
Debt issuance costs	(24,532		)	—			—			—			(24,532		)
Advances from (to) consolidated entities	519,737			(568,099		)	48,362			—			—
Intercompany notes borrowings	—			8,499			284,671			(293,170		)	—
Intercompany notes payments	—			—			(16,513		)	16,513			—
Investment from Parent	—			238,083			—			(238,083		)	—
Intercompany dividends	—			(261,102		)	(10,745		)	271,847			—
Other	(766		)	—			—			—			(766		)
Cash flows provided by (used in) financing activities	605,291			(594,759		)	259,516			(242,893		)	27,155
Cash flows provided by (used in) continuing operations	(15,253		)	(9,637		)	4,577			—			(20,313		)
CASH FLOWS FROM DISCONTINUED OPERATIONS
Cash flows provided by investing activities	—			9,500			—			—			9,500
Cash flows provided by discontinued operations	—			9,500			—			—			9,500
Effect of foreign exchange rates on cash	—			—			(1,016		)	—			(1,016		)
Net increase (decrease) in cash and cash equivalents	$	(15,253	)	$	(137	)	$	3,561		—			$	(11,829	)
Cash and cash equivalents at beginning of period	99,086			8,295			21,049			—			128,430
Cash and cash equivalents at end of period	$	83,833		$	8,158		$	24,610		$	—		$	116,601