Westmoreland Reports Second Quarter 2012 Results

Westmoreland Coal Company (NasdaqGM:WLB) today reported its second
quarter results for 2012.

Highlights:

• 
  Adjusted EBITDA increased $0.4 million during Q2 2012 to $14.6 million
  as compared to $14.2 million in Q2 2011. Year to date 2012 Adjusted
  EBITDA was $41.9 million, an 11.7 % increase over 2011 year to date
  Adjusted EBITDA of $37.5 million.
  
• 
  Total revenues were $132.8 million for Q2 2012 compared to $112.1
  million in Q2 2011, an increase of 18.5%.
  
• 
  Net loss applicable to common shareholders of $12.4 million ($0.89 per
  basic and diluted share) for Q2 2012 compared to a Q2 2011 net loss of
  $7.7 million ($0.59 per basic and diluted share). Year to date net
  loss for 2012 was $11.9 million compared to a year to date net loss
  for 2011 of $25.7 million. The 2011 net loss includes $20.2 million of
  charges related to the refinancing of debt.
  
• 
  During the second quarter, Westmoreland announced that it had improved
  its liquidity position by securing a new revolving credit facility and
  that it had amended its Note Purchase and Credit Agreement at its WML
  subsidiary.
  
• 
  During the second quarter, Westmoreland announced it had leased 56.4
  million tons of private coal adjacent to its Rosebud Mine in Colstrip,
  Montana. Westmoreland controls an estimated 486 million tons of proven
  and probable coal reserves across all of its operations as of June 30^th,
  plus an additional 214.4 million of indicated coal reserves.
  
• 
  Westmoreland continued its strong safety performance achieving
  reportable and lost time incident rates approximately 83.9% and 63.5%,
  respectively, of the national averages for surface operations through
  the second quarter of 2012.
  

'We consider this to be a very solid quarter when considering the fact
that the current year quarter included major scheduled outages at both
our Beulah Mine′s primary customer and at our ROVA facility. The
difference in Adjusted EBITDA for these two facilities was $6.9 million
less in the second quarter of 2012 than in 2011 when these facilities
were fully operational,? said Keith E. Alessi, Westmoreland′s Chief
Executive Officer. 'As we have previously stated, the timing of
maintenance outages can significantly impact comparability of quarters
and we had expected that our second quarter would be our weakest quarter
of the year. In the face of weak demand and a highly competitive market,
we remain pleased with the performance of our business, including the
performance from our recently acquired Kemmerer Mine.

'As a result of the purchase price accounting for the Kemmerer
transaction, we increased previously reported first quarter 2012
Adjusted EBITDA by $1.3 million. This is reflected in our year to date
numbers.

'At a time when many coal companies find themselves struggling with
liquidity concerns, our business model again proved itself as we have
generated positive free cash flow for the quarter and the year and find
ourselves in a highly liquid position. Unlike some others in the
industry who see weak demand in the 3^rd and 4^th
quarters, we continue to expect those quarters to see our historical
pick up in production and sales in line with our expectations.?

Safety

Safety performance at Westmoreland mines continues to be significantly
better than the national average for surface operations. Westmoreland
mines had reportable and lost time incident rates year to date through
the second quarter of 2012 of 1.30 and 0.66 versus the national surface
mine rates of 1.55 and 1.04, respectively.

Effective February 1, 2012, Westmoreland′s safety performance statistics
are inclusive of the Kemmerer Mine.

Financial Results

During the second quarter of 2012, Westmoreland revised its preliminary
allocation of the purchase price for the Kemmerer acquisition for $2.2
million of deferred revenue. Adjustments to preliminary fair values are
assumed to have been made as of the acquisition date. As a result,
revenues, operating income and Adjusted EBITDA for the first quarter of
2012 would have been higher by $1.3 million. The results in this press
release reflect this adjustment as if made in the first quarter of 2012.
The remaining $0.9 million of deferred revenue was recognized as revenue
in the second quarter of 2012.

Westmoreland′s Adjusted EBITDA increased to $14.6 million in Q2 2012
from $14.2 million in Q2 2011. This increase was predominately driven by
the January 31^st acquisition of the Kemmerer Mine. Q2 2012
Adjusted EBITDA was negatively impacted by the timing of planned
maintenance outages by each of our mine′s primary customers as well as
reduced tonnage demand due to natural gas, hydro, and wind generation.
In addition, ROVA executed its large planned maintenance outage during
the second quarter and was also impacted by unscheduled outages.

Westmoreland′s revenues in Q2 2012 increased to $132.8 million compared
with $112.1 million in Q2 2011. This increase was primarily driven by
the addition of the Kemmerer Mine offset by the maintenance outages
described above.

Westmoreland′s Q2 2012 net loss increased by $4.7 million. This increase
in loss was driven by increased interest expense accrued and other
factors described above, and was partially offset by the Kemmerer Mine′s
performance.

Coal Segment Operating Results

The following table summarizes Westmoreland′s Q2 2012 and Q2 2011 coal
segment performance:

Westmoreland′s coal revenues and Adjusted EBITDA both increased
significantly during the second quarter of 2012 over prior year. Sales
and Adjusted EBITDA increased due both to the Kemmerer Mine acquisition
and were offset by the timing of planned maintenance outages by each of
our mine′s primary customers as well as reduced tonnage demand due to
natural gas, hydro, and wind generation.

Power Segment Operating Results

The following table summarizes Westmoreland′s Q2 2012 and Q2 2011 power
segment performance:

Westmoreland′s power segment revenues and Adjusted EBITDA decreased in
Q2 2012 as ROVA executed its large planned maintenance outage during the
second quarter coupled with the adverse impact of an unplanned outage
during the quarter.

Nonoperating Results

Second quarter 2012 heritage operating expenses increased as a result of
unfavorable interest rates, and corporate expenses also increased as a
result of one-time recruiting and compensation expenses related to a new
executive position. Interest expense for Q2 2012 also increased to $11.0
million from $7.6 million in Q2 2011 as a result of the Kemmerer
acquisition debt issued in January 2012.

Cash Flow from Operations and Liquidity

Cash and Cash Equivalents increased to $47.3 million at June 30, 2012 up
from $30.8 million as of December ?31, 2011. Overall cash increased by
$16.5 million driven by the Kemmerer Mine′s strong initial performance
and working capital management following the acquisition.

On June 29, 2012, Westmoreland entered into a five-year, $20.0 million
revolving line of credit carved out by the indenture governing the
Parent Notes with an expiration date of June 28, 2017. The revolver may
support up to $2.0 million of letters of credit, which would reduce the
available balance.

On June ?28, 2012, WML amended its term debt and revolving line of credit
debt agreements to maintain its pension plans at a minimum of 80%
funded, as opposed to the prior covenant of 90% funded.

Conference Call

A conference call regarding Westmoreland Coal Company′s second quarter
2012 results will be held on Monday, July 30, 2012, at 10:00 a.m.
Eastern Time. Call-in instructions are available on our web site and
have been provided in a separate news release.

About Westmoreland Coal Company

Westmoreland Coal Company is the oldest independent coal company in the
United States. Its coal operations include coal mining in the Powder
River Basin in Montana, sub-bituminous mining in Wyoming, 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

Forward-looking statements are based on Westmoreland′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. Our actual
results may differ materially from those contemplated by the
forward-looking statements. Westmoreland cautions you 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.

Any forward-looking statements made by Westmoreland in this news release
speak only as of the date on which it was made. Westmoreland 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.

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 used by management to assess Westmoreland′s
operating performance and Westmoreland believes that EBITDA and Adjusted
EBITDA are useful to an investor in evaluating our 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 Westmoreland′s operations from period to period by removing the
  effect of our capital structure and asset base from our 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 Westmoreland′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 our
results as reported under GAAP. For example, EBITDA and Adjusted EBITDA:

• 
  do not reflect our 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, our 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 our 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 our
industry and in other industries may calculate EBITDA and Adjusted
EBITDA differently from the way that Westmoreland 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 us to invest in the growth of its
business. Westmoreland 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, 855-922-6463