Westmoreland Reports Third Quarter 2011 Results

Westmoreland Coal Company (NasdaqGM:WLB) today reported its third
quarter results for 2011.

Highlights:

• 
  Operating income increased $0.8 million from $7.8 million in Q3 2010
  to $8.6 million in Q3 2011. Year to date 2011 operating income was
  $15.0 million compared to 2010 year to date operating income of $14.5
  million.
  
• 
  Adjusted EBITDA increased $1.4 million during Q3 2011 to $24.2 million
  as compared to $22.8 million in Q3 2010. Year to date 2011 Adjusted
  EBITDA was $61.7 million compared to year to date 2010 Adjusted EBITDA
  of $60.4 million.
  
• 
  Net income applicable to common shareholders of $2.4 million ($0.18
  per basic and diluted share) for Q3 2011 compared to Q3 2010 net
  income of $ 2.5 million ($0.23 per basic and diluted share). Year to
  date net loss for 2011 was $23.3 million compared to a year to date
  2010 net income of $0.2 million. The 2011 net loss includes $17.0
  million in charges related to the refinancing of debt in February 2011
  and $3.2 million of expense on the conversion feature′s fair value
  adjustment.
  
• 
  Westmoreland again continued its strong safety performance achieving
  reportable and lost time incident rates 55.5% and 52.5%, respectively,
  of the national averages for surface operations for the third quarter
  of 2011.
  
• 
  During the third quarter of 2011, Westmoreland′s Western Energy Mine
  received an Excellence in Surface Coal Mining Award from the Office of
  Surface Mining for its reclamation efforts at the Company′s mine in
  Colstrip, Montana.
  

'We are very pleased with our third quarter results,? said Keith E.
Alessi, Westmoreland′s President and CEO. 'Despite losing significant
tons again this quarter to flooding and record levels of hydropower
generation, we managed to increase both our operating income and
Adjusted EBITDA over the prior year. Additionally, through excellent
preparation and response, our ROVA Power operation minimized its
downtime and mitigated impacts Hurricane Irene had on our third quarter
operations.?

'We are also very pleased with the continuation of our strong safety
performance during the third quarter of 2011 as we again beat the
national surface mine averages. We take great pride in another major
mining award as our Western Energy Mine in Colstrip, Montana received
the Office of Surface Mining′s Directors Award for Excellence in Surface
Coal Mining.?

'During the quarter we made progress on one of our key strategic
initiatives, the addition of new coal reserves, as we continued
negotiations with resource owners at several at our mines. We hope to
complete at least one of these negotiations by year end. In line with
another of our key strategic initiatives, we also continue to explore
opportunities to grow our business through the acquisition of operations
that fit our core mine mouth business model.?

Westmoreland′s 2011 year to date net income includes $17.0 million of
charges related to the refinancing of debt in February 2011 and $3.2
million of expense on the fair value adjustment on the conversion
feature in the Company′s convertible debt that was for the most part
converted to common stock and retired in February 2011. 2010 year to
date net income included $0.9 million of expense related to the impact
of the fair value adjustment of the conversion feature and the related
debt discount. Excluding those items, net income decreased by $0.5
million.

The Company′s revenues in Q3 2011 increased to $132.4 million compared
with $124.1 million in the third quarter of 2010. This increase was
primarily driven by an increase in the Company′s coal segment revenues
due to increased sales at its Absaloka, Beulah, and Jewett Mines.
Favorable pricing also contributed to the increased revenues.

Westmoreland′s Adjusted EBITDA increased to $24.2 million in Q3 2011
from $22.8 million in Q3 2010.

Coal Segment Operating Results

The following table summarizes the Company′s Q3 2011 and Q3 2010 coal
segment performance:

Westmoreland ′s coal revenues for the third quarter of 2011 increased to
$108.8 million compared with $100.5 million in the third quarter of
2010. This $8.3 million increase was primarily due to increased sales at
the Absaloka, Beulah, and Jewett Mines. Favorable pricing also
contributed to the increased revenues. Overall tons sold decreased
during the quarter due to lower sales at the Rosebud Mine as a result of
favorable hydropower conditions, however revenues were largely
unaffected due to favorable pricing.

Coal segment operating income was $9.7 million in the third quarter of
2011 compared to $8.9 million in the third quarter of 2010. This $0.8
million increase was primarily driven by favorable pricing.

Power Segment Operating Results

The following table summarizes the Company′s Q3 2011 and Q3 2010 power
segment performance:

The Company ′s power segment revenues for the third quarter of 2011 were
comparable with our third quarter 2010 power segment revenues.

Power segment operating income decreased to $4.7 million in the third
quarter of 2011 compared to $5.1 million in the third quarter of 2010.
This $0.4 million decrease was primarily from increased property tax
expense.

Heritage Segment Operating Results

The Company′s third quarter 2011 heritage operating expenses of $4.1
million are comparable to $4.7 million in the third quarter of 2010.

Corporate Segment Operating Results

The Company′s corporate segment operating expenses for the third quarter
of 2011 of $1.7 million are comparable to $1.4 million in the third
quarter of 2010.

Nonoperating Results

The Company′s interest expense for the third quarter of 2011 increased
to $7.7 million compared with $5.8 million for the third quarter of
2010. This increase was primarily due to the higher overall debt levels
resulting from the February 2011 note offering.

The Company′s other income for the third quarter of 2011 of $0.1 million
was comparable to the third quarter of 2010.

Cash Flow from Operations and Liquidity

Cash provided by operating activities decreased by $3.6 million in the
nine months ended September 30, 2011 compared to the nine months ended
September 30, 2010, primarily due to the increase in interest payments
in 2011 related to the issuance of the Company′s new notes in February
2011.

Safety

Safety performance at Westmoreland mines continued to be significantly
better than the national average for surface operations.

Conference Call

A conference call regarding Westmoreland Coal Company′s third quarter
2011 results will be held on Tuesday, November 8, 2011, at 10:00 a.m.
Eastern Time. Call-in instructions are available on the Company′s web
site and have been provided in a separate news release.

Additional Information

Westmoreland Coal Company is the oldest independent coal company in the
United States. The Company′s coal operations include coal mining in the
Powder River Basin in Montana and lignite mining operations in Montana,
North Dakota and Texas. Its power operations include ownership of the
two-unit ROVA coal-fired power plant in North Carolina. For more
information visit www.westmoreland.com.

Cautionary Note Regarding Forward-Looking
Statements

This news release contains 'forward-looking statements.? Forward-looking
statements can be identified by words such as 'anticipates,? 'intends,?
'plans,? 'seeks,? 'believes,? 'estimates,? 'expects? and similar
references to future periods. Forward-looking statements include, but
are not limited to, the Company′s hope to complete at least one of coal
reserve acquisitions by year end.

Forward-looking statements are based on the Company′s current
expectations and assumptions regarding its business, the economy and
other future conditions. Because forward-looking statements relate to
the future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. The Company′s
actual results may differ materially from those contemplated by the
forward-looking. The Company cautions you therefore against relying on
any of these forward-looking statements. They are statements neither of
historical fact nor guarantees or assurances of future performance.
Important factors that could cause actual results to differ materially
from those in the forward-looking statements include political,
economic, business, competitive, market, weather and regulatory
conditions and the following:

• 
  changes in the Company′s postretirement medical benefit and pension
  obligations and the impact of recently enacted healthcare legislation;
  
• 
  changes in the Company′s black lung obligations, changes in the
  Company′s experience related to black lung claims, and impact of the
  recently enacted healthcare legislation;
  
• 
  the Company′s potential inability to expand or continue current coal
  operations due to limitations in obtaining bonding capacity for new
  mining permits;
  
• 
  the Company′s potential inability to maintain compliance with debt
  covenant requirements;
  
• 
  the potential inability of the Company′s subsidiaries to pay dividends
  to them due to restrictions in the Company′s debt arrangements,
  reductions in planned coal deliveries or other business factors;
  
• 
  the Company′s potential inability to enter into new coal supply
  agreements with existing customers due to the unfavorable result of
  competitive bid processes or the shutdown of a power facility due to
  new environmental legislation or regulations;
  
• 
  risks associated with the structure of ROVA′s contracts with its
  lenders, coal suppliers and power purchaser, which could dramatically
  affect the overall profitability of ROVA;
  
• 
  the effect of Environmental Protection Agency inquiries and
  regulations on the operations of ROVA;
  
• 
  the effect of prolonged maintenance or unplanned outages at the
  Company′s operations or those of its major power generating customers,
  including unplanned outages at its customers due to the impact of
  weather-related variances;
  
• 
  future legislation and changes in regulations, governmental policies
  and taxes, including those aimed at reducing emissions of elements
  such as mercury, sulfur dioxides, nitrogen oxides, particulate matter
  or greenhouse gases; and
  
• 
  the other factors that are described in 'Risk Factors? in the
  Company′s Form 10-K for fiscal year 2010 and in subsequent Quarterly
  Reports on 10-Q .
  

Any forward-looking statements made by the Company in this news release
speaks only as of the date on which it was made. Factors or events that
could cause the Company′s actual results to differ may emerge from
time-to-time, and it is not possible for the Company to predict all of
them. The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as may be required by law.

# # #

Westmoreland Coal Company and Subsidiaries

Summary
Financial Information (Unaudited)

EBITDA and Adjusted EBITDA are supplemental measures of financial
performance that are not required by, or presented in accordance with,
GAAP. EBITDA and Adjusted EBITDA are included in this news release
because they are key metrics use d by management to assess the Company′s
operating performance and the Company believes that EBITDA and Adjusted
EBITDA are useful to an investor in evaluating the Company′s operating
performance because these measures:

• 
  are used widely by investors to measure a company′s operating
  performance without regard to items excluded from the calculation of
  such terms, which can vary substantially from company to company
  depending upon accounting methods and book value of assets, capital
  structure and the method by which assets were acquired, among other
  factors; and
  
• 
  help investors to more meaningfully evaluate and compare the results
  of the Company′s operations from period to period by removing the
  effect of the Company′s capital structure and asset base from its
  operating results.
  

Neither EBITDA nor Adjusted EBITDA is a measure calculated in accordance
with GAAP. The items excluded from EBITDA and Adjusted EBITDA are
significant in assessing the Company′s operating results. EBITDA and
Adjusted EBITDA have limitations as analytical tools, and should not be
considered in isolation from, or as a substitute for, analysis of the
Company′s results as reported under GAAP. For example, EBITDA and
Adjusted EBITDA:

• 
  do not reflect the Company′s cash expenditures, or future requirements
  for capital and major maintenance expenditures or contractual
  commitments;
  
• 
  do not reflect income tax expenses or the cash requirements necessary
  to pay income taxes;
  
• 
  do not reflect changes in, or cash requirements for, the Company′s
  working capital needs; and
  
• 
  do not reflect the significant interest expense, or the cash
  requirements necessary to service interest or principal payments, on
  certain of the Company′s debt obligations.
  

In addition, although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized will often have to
be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect
any cash requirements for such replacements. Other companies in the
Company′s industry and in other industries may calculate EBITDA and
Adjusted EBITDA differently from the way that the Company does, limiting
their usefulness as comparative measures. Because of these limitations,
EBITDA and Adjusted EBITDA should not be considered as measures of
discretionary cash available to the Company to invest in the growth of
its business. The Company compensates for these limitations by relying
primarily on its GAAP results and using EBITDA and Adjusted EBITDA only
as supplemental data.

Westmoreland Coal Company

Kevin Paprzycki, 719-442-2600