In our view, replacing our highly-qualified, engaged and independent directors with the Audley Capital bloc consisting of Mr. Treger and his four other nominees would be detrimental to the value of your investment.
OUR BUSINESS PLAN POSITIONS YOUR COMPANY FOR PROFITABLE GROWTH
The full focus of our Board and management is to position Walter Energy for vigorous and profitable growth in anticipation of the recovery of met coal prices.
We know our job is to continue to perform in the face of industry challenges. To that end, we have aggressively pursued critical steps to improve our results and reposition our assets. This effort has been led by Chief Executive Walter Scheller, who was appointed CEO by your Board 18 months ago and brings a significant track record of success in our industry. Following are notable 2012 milestones:
•Safely increased production of high quality met coal by 35% to a record 11.7 million metric tons while reducing total reportable injuries by 26% from 2011.
•Improved average met coal cash cost per ton of production by 6% in 2012 compared to 2011 and 20% in the fourth quarter of 2012 compared to the fourth quarter of 2011.
•Curtailed production at low margin mines by more than 1 million metric tons and transitioned the Brule and Willow Creek mines from contractor-operated to owner-operated.
•Reduced SG&A by 19% and tightened capital spending.
•Maximized cash flow to pursue further debt reduction and improved liquidity and debt maturity profile.
•Transformed the management team, adding three talented new executives in key positions and elevating two experienced and proven leaders to run its two key operating businesses.
As we enter 2013, we have the capacity to produce in excess of 15 million metric tons of high quality met coal in our existing operations when market conditions warrant. We also continue to drive greater efficiencies throughout our business and seize opportunities to generate greater cash flow to improve our financial flexibility and continue development of our new Blue Creek Energy Mine in Alabama.
YOUR BOARD HAS A RECORD OF DELIVERING SUPERIOR SHAREHOLDER VALUE
These positive developments are the most recent in a successful, long-term transformation of your Company that has created significant value for shareholders under the leadership of your Board. Walter Energy's directors are among the most experienced and accomplished in the mining industry and hold themselves and management accountable for acting in the best interests of all shareholders. To highlight a few key Board achievements:
•Successfully engineered the evolution of Walter Energy into a focused, pure-play metallurgical coal mining company.
•Implemented spin-offs of Mueller Water and Walter Investment Management, unlocking significant value for shareholders.
•Presided over the major strategic acquisitions of Western Coal and the Chevron mineral leases. The now fully-integrated acquisitions have provided Walter Energy with operating, geographic and customer diversification with a 30+ year reserve life and in-place valuable growth options.
The broad and diverse expertise of our Board will continue to serve Walter Energy well. Three experienced coal mining executives are on our Board, as well as directors with expert knowledge of the corporate governance, finance, accounting and regulatory requirements applicable to Walter Energy. Together they provide a balance of fresh perspectives and continuity, with four of the ten having served less than two years.
Most Popular Stories
- NSA Defends Global Cellphone Tracking Legality
- Ad Counts Rise in 2013 for Hispanic Magazines
- Top Websites for U.S. Hispanics
- Networks Vie for U.S. Hispanic TV Viewers
- Saab Gets Back into the Game; U.S. Auto Sales Soar
- Apple Activates Customer-Tracking iBeacon
- Dell Offers Undisclosed Number of Employee Buyouts
- 2013 Tech Gift Guide: iPad Mini Still Hot; Chromecast a Great Low-Cost Option
- Authorities Close to Deal with JPMorgan Chase over Madoff Response
- A Biography of Jonathan Ive, Apple's Creative Chief