Company Reports Earnings From Continuing Operations of $1.75 per Diluted Share for Fourth Quarter and $7.25 per Diluted Share for Full Year 2010

$1.6 Billion in Full-Year 2010 Revenues on Record Coking Coal Sales of 7.2 Million Tons

Fourth Quarter EBITDA Triples to $171.5 Million; Full-Year EBITDA Climbs to Nearly $700 Million

Acquisition of Western Coal Corp. Progressing; Closing Anticipated on April 1, 2011

Tampa, FL – Walter Energy, a leading U.S. producer and exporter of premium hard coking coal for the global steel industry, today announced earnings from continuing operations of $1.75 per diluted share and EBITDA of $171.5 million for the quarter ended Dec. 31, 2010, compared to earnings from continuing operations of $0.62 per diluted share and EBITDA of $55.6 million in the fourth quarter 2009.

The Company also reported full-year 2010 earnings from continuing operations of $7.25 per diluted share and EBITDA of $692.8 million compared to full year 2009 earnings of $2.64 per diluted share and EBITDA of $275.1 million.

"We generated strong fourth quarter earnings on higher coking coal sales volumes and prices," said Walter Energy Interim Chief Executive Officer Joe Leonard. "For the full year, earnings increased by almost 175 percent over 2009, reflecting strong pricing and production growth from our organic growth initiatives. Globally, events continue to limit availability of premium coking coals and we see supply-demand imbalance continuing in our favor as global steel production improves on its record 2010 output."

"Strategically, we continue to make excellent progress on our transformative acquisition of Western Coal, which, when completed, will make Walter Energy the leading, publicly traded 'pure play' coking coal producer in the world. In addition, the combination increases the size, scale and diversity of our operations, significantly enhancing the Company's financial profile and geographic reach, particularly into Asia. We also recently completed the acquisition of a river terminal facility at the Port of Mobile to ensure unconstrained shipping capacity for our long-term coking coal production plans from our mines in Alabama, to maintain low mine-to-vessel costs and to make us less reliant on third parties," he said.

Full-Year 2010 Financial Results

For the full year 2010, revenues were $1.6 billion, a $621 million increase compared to 2009's full-year results. EBITDA also increased to $692.8 million, a $417.7 million improvement versus the prior year. The improvement was largely due to record revenues and operating income at the underground mining segment of $1.3 billion and $580.7 million, respectively, on significant year-over-year coking coal pricing and volume increases.

Fourth Quarter 2010 Financial Results

Revenues for the fourth quarter 2010 totaled $400.8 million compared to $236.3 million in the prior-year period. Operating income totaled $144.7 million for the quarter, compared to $36.9 million in the prior-year period. Revenue and operating income improvements were primarily due to higher coking coal pricing and volumes in the Company's underground mining operations.

Fourth quarter 2010 operating income includes $5.9 million in costs associated with Walter Energy's impending acquisition of Western Coal and $2.3 million in costs at Walter Coke related to long-term environmental monitoring. These charges negatively impacted earnings for the quarter by approximately $0.10 per diluted share.

Underground Mining

The underground mining segment reported revenues of $350.9 million in the fourth quarter 2010, compared to $179.7 million in the prior-year period. Operating income was $144.6 million, more than triple the segment's operating income in the same period last year. Revenues and operating income were higher primarily due to significantly higher average coking coal contract pricing along with higher sales volumes versus the prior-year period. The effect of these favorable items was partially offset by higher royalty and freight costs.

Coking coal sales totaled 1.7 million tons in the fourth quarter, up 25.1 percent compared to the prior-year period, at an average selling price of $196.47 per short ton FOB Port, a 55.3 percent increase over average selling prices of $126.48 per ton in the same period last year.

Total coking coal production was 1.5 million tons in the quarter, almost 200,000 tons higher than in the fourth quarter 2009. The increase in production was generated from incremental tons from the Mine No. 7 East expansion and from improved recovery rates at the No. 4 Mine. Production costs for the quarter averaged $64.68 per ton, or $2.76 lower than in the prior-year period, primarily due to volume improvements at both mines, partially offset by higher labor and supply cost at Mine No. 7.

The natural gas business sold 3.4 billion cubic feet of gas at an average price of $4.06 per thousand cubic feet in the fourth quarter 2010 compared to 1.4 billion cubic feet at an average price of $4.09 per thousand cubic feet in the prior-year period. Increased production and sales for the quarter resulted from the Company's Walter Black Warrior Basin natural gas subsidiary acquired in May 2010.

Surface Mining

The surface mining segment reported revenues of $35.9 million for the fourth quarter 2010, compared to $26.0 million in the prior-year period on increased sales volumes and pricing. Although revenues increased 37.8 percent, operating income in the fourth quarter 2010 only increased 7.0 percent due to higher depreciation, diesel and blasting costs.

Coal sales from the surface mining segment were 348,000 tons during the fourth quarter, up 6.7 percent compared to the prior-year period primarily due to incremental sales volumes from the recently opened Reid School metallurgical coal mine. Production was 406,000 tons, up 35.3 percent compared to the fourth quarter last year primarily from additional tons produced at the Reid School Mine.

Walter Coke

Walter Coke reported revenues of $37.9 million in the fourth quarter 2010, compared to $37.4 million in the prior-year period. Walter Coke generated $5.4 million in operating income in the quarter, compared to a slight loss in the prior-year period. Operating income improvements were driven primarily by price increases and improved plant efficiencies, partially offset by higher coal raw material costs and a $2.3 million environmental charge. In addition, fourth quarter 2009 results included a $4.5 million charge related to the closure of Walter Coke's fiber plant.

The Company sold 87,000 tons of metallurgical coke in the fourth quarter 2010 at an average price of $381.96 per ton compared to 88,000 tons sold in the prior-year period at an average price of $312.11 per ton. Pricing increases were primarily attributable to improved demand in the domestic automotive and steel markets.

Corporate and Other

At Dec. 31, 2010, the Company had available liquidity of $533.5 million, including cash of $293.4 million and $240.1 million available under its credit facility.

Financial Summary & Business Outlook

In the fourth quarter 2010, coking coal sales volumes were at the low end of the previously issued expectations range due to a longer-than-expected longwall move in December and difficult mining conditions at both of our underground mines late in the quarter. These conditions continued into January and, along with the impact of planned first quarter 2011 longwall moves, the Company expects first quarter sales volumes to be in the range of 1.6 to 1.8 million tons.

Given the loss of production through mid-February 2011, the Company estimates that its full-year coking coal sales will be, at best, 8.5 million tons, with up to 500,000 tons of the total coming from purchased coal opportunities.

First quarter 2011 coking coal operating margins reflect an average selling price of $215 per metric ton FOB port ($195 per short ton FOB port), which includes a mix of carryover tons at $209 per metric ton as well as new contract tons for the quarter at or above the $225 per metric ton benchmark price. The average realized selling price will also be affected by lower priced purchased coal. First quarter 2011 coking coal production costs are expected to be in line with the fourth quarter 2010 results.

In the surface mining segment, although fourth quarter 2010 shipments were lower than expected due to lighter-than-expected customer demand, the segment expects to sell between 406,000 and 426,000 tons of metallurgical, steam and industrial coal in the first quarter 2011, with all expected steam and industrial sales volumes contractually priced. Operating income in the first quarter 2011 is expected to be negatively impacted by a shift in sales mix to lower-margin coal contracts, higher cost due to unfavorable mining ratios and higher fuel prices.

At Walter Coke, first quarter sales volumes are expected to be approximately 100,000 tons. Operating margins are expected to reflect higher metallurgical coke prices, offset by higher coal raw material costs.

Western Coal Acquisition Update

Walter Energy said it continues to make very good progress on its acquisition of Western Coal Corp. Western Coal issued its Circular to its shareholders on Feb. 4, 2011 and a vote of the Western Coal shareholders is scheduled for March 8, 2011. As announced on Jan. 20, 2011, the Company acquired a 9.15 percent stake in Western Coal from funds advised by Audley Capital for $293.7 million. The Company remains on track to close on the acquisition on April 1, 2011.