Audley Capital Comments on Glass Lewis Report Regarding Walter Energy

  Audley Capital Comments on Glass Lewis Report Regarding Walter Energy

  Urges Stockholders to Vote “FOR” ALL of Audley Capital’s Highly-Qualified
                   Director Nominees on the GOLD Proxy Card

Business Wire

NEW YORK -- April 12, 2013

Audley Capital Advisors LLP (including certain related funds and investment
vehicles, “Audley Capital”) today issued the following statement regarding the
report on Walter Energy, Inc. (NYSE: WLT) (TSX: WLT) (“Walter Energy” or “the
Company”) issued by Glass Lewis & Co. (“Glass Lewis”) on April 11, 2013.
Audley Capital urges shareholders to vote FOR its five nominees for election
to the Board of Directors at the Company’s upcoming 2013 Annual Meeting of
Stockholders on April 25, 2013.

“Glass Lewis recognized the very same issues and concerns at Walter Energy
that motivated Audley Capital to propose new, experienced director nominees to
strengthen the Board. Our nominees are proven executives and are committed to
improving the Company and its balance sheet – even in the face of volatile
coal pricing. However, we believe Glass Lewis failed to judge Walter Energy
against appropriate industry peers and fell into the same flawed analysis the
Company has advanced by focusing on thermal coal producers, rather than the
Company’s metallurgical coal peers – hiding much greater levels of risk and
concern.” said Julian Treger, Managing Partner of Audley Capital Advisors.

Added Treger, “Walter Energy has the promise of being the premier met coal
producer in the world. For years, we believe the current Board has mismanaged
the Company and its balance sheet. While the Company makes every effort to
justify its significant underperformance and attack Audley Capital’s nominees,
we have continued to advocate for change and the implementation of new
initiatives that will benefit all stockholders. Audley Capital’s nominees have
a tremendous record of value creation and they are committed to helping Walter
Energy realize its true potential. We look forward to the support of our
fellow stockholders at the Annual Meeting, where we will have the opportunity
to reverse what we see as repeated missteps by the current Board by electing
new directors who will bring a fresh, dynamic and creative approach to the
Walter Energy Board.”

Audley Capital believes that Glass Lewis’s analysis is also significantly
flawed because it tracks the Company’s stock performance only through February
19, 2013 – following Walter Energy’s self-selected reference point. However,
between February 19^th, 2013, and April 11^th, 2013, the Company’s stock price
has decreased a dramatic 40% – erasing almost $1 billion in market
capitalization. We believe this massive destruction of shareholder value and
share underperformance against peers was exacerbated by the higher interest
burden voluntarily taken on by the Company. This is a critical point when
judging the actions of the current Board, which in our view should have been
taken into account by Glass Lewis in its report.

In its report, Glass Lewis does acknowledge numerous areas of concern at
Walter Energy which have also been raised by independent third parties,

Glass Lewis View         Third Party Support     Audley Capital Analysis
“…we see that the         “We remain cautious on
Company’s total return    shares of Walter         Walter Energy’s stock
over this period [April   Energy, Inc.             performance since Western
1, 2011 – February 19,    (WLT-NYSE). The          Coal deal close in April
2013] (-70.24%) falls     Company's levered        2011: -82%. Additionally,
below that of the peer    balance sheet in the     tracking performance only
group and the Dow Jones   midst of weakened met    through February 19^th is
U.S. Coal Index           coal pricing and         misleading, given that the
(-63.25% and -67.10%,     demand is likely to      Company’s stock lost 40%
respectively) and well    become a growing         of its value between
below the return on the   source of equity         February 19 and April 11,
Russell 3000 Index        investor risk.” –        2013.
(+14.34%).”               KeyBanc; March 28,
                          “We agree with Audley
                          that Walter entered
                          the current downturn
                          with excessive debt
                          levels following the
                          2011 acquisition of
                          Western Coal. In
                          retrospect, Walter       Walter Energy has a net
“Overall, we recognize    would have been better   debt to book value of
that the Company’s debt   served by using equity   equity ratio of 228%,
level is on the high      rather than debt to      while the Company’s peers’
side relative to peers    fund the majority of     net debt/stockholders’
and that deleveraging     the transaction, which   equity ratios range from
should be a priority.”    was the approach taken   47% to 144%.
                          by top met coal
                          competitor Alpha
                          Natural Resources (ANR
                          – Hold - $9.50) in its
                          acquisition of Massey
                          Energy in 2011.” –
                          Stifel; February 20,
“As noted by the          “We estimate Walter’s
Dissident, we see that    SG&A expense to be       SG&A costs at the Company
the Company’s SG&A        $131 million, or 5.0%    are higher than Walter
costs relative to sales   of revenues in 2013.     Energy’s U.S. peer group
are on the high side      This compares with a     and we believe savings of
compared to peers and     peer group average of    at least $10.0 million per
we agree a disciplined    3.0% of revenues for     quarter and $40.0 million
review of the Company’s   Walter’s four largest    per year should be
cost structure could      U.S. peers.” – Stifel;   targeted.
benefit shareholders.”    February 20, 2013
“Regarding executive
management, we agree
that the considerable
CEO turnover at the
Company over the past
five years is                                      There have been four CEOs
troubling, particularly   “We agree with Audley    over the past five years
with regard to Mr.        that the high turnover   (including the current CEO
Calder who was            at Walter’s CEO          and an “interim” CEO who
appointed CEO if the      position over the past   served for more than a
Company in April 2011     five years has been      year). We believe this is
in connection with the    unsettling.” – Stifel;   not healthy corporate
acquisition of Western    February 20, 2013        governance and is
Coal only to resign                                inarguably an issue of
three months later,                                high concern.
citing differences of
opinion between himself
and the board on
matters of strategic
“We believe the                                    Audley Capital’s director
Dissident presents a                               nominees include
talented roster of        “Recent news of          individuals with extensive
director nominees who     potential board          experience in the
collectively possess      challenges are           metallurgical coal
significant executive     rekindling thoughts of   industry on an
and board level           potential moves to       international basis and
experience at public      stimulate value.” –      possess the skills
mining companies and on   Sterne Agee; February    required to manage
other areas that could    22, 2013                 multi-jurisdictional coal
benefit shareholders,                              operations and their
in our view.”                                      financing.

*Audley Capital has not requested or obtained the consent of any third party

Audley Capital urges stockholders to vote FOR its five director nominees by
immediately completing and returning their GOLD proxy card or by submitting
proxies by telephone or through the Internet. Investors that need assistance
or have any questions or need assistance voting your shares, please call our
proxy solicitor, Okapi Partners LLC, at (877) 208-8903.

Additional Information

Further information regarding the director nominees and other persons who may
be deemed participants, and other matters, are set forth in a definitive proxy
statement filed with the Securities and Exchange Commission (“SEC”).


Audley Capital Advisors LLP
Julian Treger, Managing Partner
+44 20 7529 6900
Okapi Partners LLC
Bruce Goldfarb/Charles Garske/Patrick McHugh
Sard Verbinnen & Co
Dan Gagnier/Brian Shiver
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