Westmoreland Reports Third Quarter 2012 Results; Announces Leadership Transition

Westmoreland Coal Company (NasdaqGM:WLB) today reported its third
quarter results for 2012, as well as a transition plan for
Westmoreland′s senior leadership.

Highlights:

• 
  Adjusted EBITDA increased 46.7% or $11.3 million during Q3 2012 to
  $35.5 million as compared to $24.2 million in Q3 2011. Year to date
  2012 Adjusted EBITDA was $77.4 million, an increase of $15.7 million
  or 25.4% over 2011 year to date Adjusted EBITDA of $61.7 million.
  
• 
  Total revenues were $161.3 million for Q3 2012 compared to $132.4
  million in Q3 2011, an increase of 21.8%.
  
• 
  Net income applicable to common shareholders of $7.3 million ($0.52
  per basic and $0.50 per diluted share) for Q3 2012 compared to a Q3
  2011 net income of $2.4 million ($0.18 per basic and diluted share).
  Year to date net loss for 2012 was $4.6 million compared to a year to
  date net loss for 2011 of $23.3 million. The 2011 net loss includes
  $20.2 million of charges related to the refinancing of debt.
  
• 
  The company improved its liquidity position during the quarter, ending
  the quarter with cash and cash equivalents of $53.7 million. It also
  had an additional $43.1 million available to it under existing lines
  of credit.
  
• 
  Westmoreland continued its strong safety performance achieving
  reportable and lost time incident rates approximately 63.5% and 46.8%,
  respectively, of the national averages for surface operations year to
  date through the third quarter of 2012.
  
• 
  Robert P. King, current President and Chief Operating Officer was
  appointed to the Board of Directors effective October ?24, 2012.
  
• 
  The company also announced that Keith E. Alessi, Westmoreland′s
  current Chief Executive Officer, will retire effective April ?5, 2013
  and will assume the position of Executive Chairman of the Board. Mr.
  King will assume the role of Chief Executive Officer on that date.
  

'This is a record quarter for the company as measured by Adjusted
EBITDA,? said Keith E. Alessi, Westmoreland′s Chief Executive Officer.
'The strong increases over prior year were largely driven by the
operating results of the Kemmerer mine and the continuing execution of
our low overhead, mine mouth model. To put the quarter in perspective,
the financial results of this single quarter exceeded the financial
results of the entire year of 2009. I feel that we demonstrated during
2010 and 2011 that we repaired the business and built a solid platform.
Now, in 2012, I believe that we are showing that we can grow our
business responsibly and profitably.?

'Year to date Adjusted EBITDA through the first three quarters exceeds
the Adjusted EBITDA we generated during the entire year of 2011. This
has allowed us to continue to deleverage the business and we ended the
quarter in a highly liquid position.?

'The Board of Directors and I have been preparing for a transition of
the day-to-day leadership of the business for some time now. The hiring
of Bob King earlier this year was an important step in this process. He
has made a positive impact on our business and I am confident that his
skills and deep industry experience will benefit the company as it
continues to seek growth opportunities. I look forward to continuing to
work closely with Bob in my role as Executive Chairman beginning in
April 2013. I am also pleased that our current Chairman, Dick ?Klingaman,
has agreed to transition to Lead Independent Director at the time I move
to the Executive Chair role.?

Richard Klingaman, Chairman of the Board, stated, 'I am thrilled that
Keith has agreed to resume the role of Executive Chairman. The
leadership team of Alessi and King brings experience, creativity, and
drive to Westmoreland as it continues to pursue its strategic plan to
create long term shareholder value.?

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 third quarter of 2012 of 1.07 and 0.53 versus the national surface
mine rates of 1.68 and 1.14, respectively.

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

Financial Results

Westmoreland′s Adjusted EBITDA increased to $35.5 million in Q3 2012
from $24.2 million in Q3 2011. This increase was predominately driven by
the January 31^st acquisition of the Kemmerer Mine. Q3 2012
Adjusted EBITDA was negatively impacted by reduced tonnage demand due to
reduced demand for power and increased wind generation. In addition,
ROVA was impacted by unscheduled outages.

Westmoreland′s revenues in Q3 2012 increased to $161.3 million compared
with $132.4 million in Q3 2011. This increase was primarily driven by
the addition of the Kemmerer Mine offset by the reduced tonnage and
unscheduled outages described above.

Westmoreland′s Q3 2012 net income increased by $4.9 million over prior
year. This increase was driven by the Kemmerer Mine′s performance, and
was partially offset with increased interest expense and other factors
described above.

Coal Segment Operating Results

The following table summarizes Westmoreland′s Q3 2012 and Q3 2011 coal
segment performance:

Westmoreland′s coal revenues and Adjusted EBITDA both increased
significantly during the third quarter of 2012 over prior year due
primarily to the Kemmerer Mine acquisition and were offset by reduced
tonnage demand due to reduced demand for power and increased wind
generation.

Power Segment Operating Results

The following table summarizes Westmoreland′s Q3 2012 and Q3 2011 power
segment performance:

Westmoreland′s power segment revenues and Adjusted EBITDA decreased in
Q3 2012 as ROVA experienced unplanned outages during the quarter.

Nonoperating Results

Third quarter 2012 corporate expenses increased as a result of higher
long-term compensation expenses. Interest expense for Q3 2012 also
increased to $11.1 million from $7.7 million in Q3 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 $53.7 million at September ?30,
2012 up from $30.8 million as of December ?31, 2011. Overall cash
increased by $22.9 million driven by the Kemmerer Mine′s strong initial
performance and working capital management following the acquisition.

Conference Call

A conference call regarding Westmoreland Coal Company′s third quarter
2012 results will be held on Friday, October ?26, 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