Westmoreland Reports 2012 Year End Results

Westmoreland Coal Company (NasdaqGM:WLB) today reported its results for
fiscal year 2012.

Highlights:

• 
  Westmoreland delivered record revenue and Adjusted EBITDA in 2012
  
• 
  2012 revenues grew 19.7% to $600.4 million and Adjusted EBITDA grew
  44.2% to $105.4 million
  
• 
  Operating income improved 171.7% to $28.9 million
  
• 
  2012 net loss applicable to common shareholders decreased to $8.6
  million from $34.5 million in 2011
  
• 
  2012 operating cash flows of $57.1 million enabled $23.0 million
  buyback of 10.75% senior secured notes during the fourth quarter and a
  year-end cash position of $31.6 million
  
• 
  Net leverage ratio declined to 3.00
  
• 
  Expected production volume and Adjusted EBITDA growth in 2013
  
• 
  Westmoreland continued its strong safety performance achieving
  reportable and lost time incident rates approximately 67.9% and 42.5%,
  respectively, of the national averages for surface operations for the
  year ended December 31, 2012
  

'We built upon the strong trends established earlier in the year and
delivered an excellent fourth quarter? said Keith E. Alessi,
Westmoreland's CEO. 'We achieved these results despite the fact that our
major Beulah mine customer experienced an unexpected maintenance issue,
which shut the plant down for the last seven weeks of the quarter.
Fourth quarter adjusted EBITDA increased to $28.0 million, up 145.1%
from the prior year. Fourth quarter operating income increased to $8.6
million, up 296.1% from the prior year. This contributed to our record
2012 results. During the quarter, we repurchased $23.0 million of our
10.75% senior secured notes and ended the year with a net leverage ratio
of 3.00. At the time of the Kemmerer mine acquisition in January 2012,
the proforma net leverage ratio was approximately 4.2. During 2012, we
retired a total of $44.8 million in debt and incurred $42.7 million in
debt-related interest expenses. We believe that our strategy of
deleveraging is a sound one and, as we continue to do so, the related
reduction in interest expense will improve our net income.?

'As we enter 2013, we expect revenue and costs per ton to be in line
with those experienced in 2012. Although weather, maintenance and other
issues impact our ultimate coal tonnage, we currently project that we
will sell between 23.0 and 25.0 million tons in 2013, versus 21.7
million in 2012. If we are able to achieve these tonnages, we would
expect adjusted EBITDA to fall in a range between $112.0 and $120.0
million. This range reflects the Beulah mine outage, which extended
until February 14, 2013 and will impact first quarter 2013 results. We
plan to spend between $23.0 and $28.0 million in capital expenditures
and expect to continue to use any cash generated after interest expenses
to retire debt.?

'We remain proud of our safety record, company-wide, and are
particularly pleased with safety improvements made at the Kemmerer mine
since the acquisition in early 2012.?

Safety

2012 safety performance at Westmoreland mines was significantly better
than national averages for surface operations, in line with our past
experience.

In addition, Westmoreland received national and state safety awards and
honors in 2012; including the prestigious National Mining Association's
Sentinels of Safety Award for Exemplary Safety Performance at our
Rosebud Mine and the Carolina Star Award, North Carolina's highest
recognition for workplace safety at our ROVA power plant.

Financial Results

2012 Adjusted EBITDA increased to $105.4 million from $73.1 million in
2011. Westmoreland's revenues in 2012 increased to $600.4 million
compared with $501.7 million in 2011. These improvements were driven by
the acquisition and performance of the Kemmerer Mine, which offset
challenging operating conditions including customer shutdowns, reduced
demand due to increased wind generation and mild weather, and multiple
unscheduled ROVA outages.

Westmoreland's 2012 net loss to common shareholders decreased by $25.9
million, from $34.5 ($2.61 per basic and diluted share) in 2011 to $8.6
million ($0.61 per basic and diluted share) in 2012. Excluding the
impact of debt extinguishment in both 2011 and 2012, the net loss
decreased by $7.6 million.

Q4 2012 Adjusted EBITDA increased to $28.0 million from $11.4 million in
2011, despite seven weeks of Q4 shutdown by the Beulah Mine's customer.
Q4 2012 revenues increased to $159.0 million from $129.4 million in Q4
2011. Westmoreland's Q4 2012 net loss to common shareholders was $4.0
million and was impacted by the Beulah Mine's customer outage, a $2.0
million debt extinguishment loss, and $1.3 million of non-cash income
tax expense.

Coal Segment Operating Results

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

Westmoreland's coal revenues and Adjusted EBITDA both increased
significantly during 2012 over prior year due primarily to the Kemmerer
Mine acquisition which offset challenging operating conditions including
customer outages and reduced demand due to increased wind generation and
mild weather.

Power Segment Operating Results

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

Westmoreland's power revenues and Adjusted EBITDA for 2012 decreased due
to a large planned maintenance outage during the second quarter and
other unscheduled outages during the year.

Nonoperating Results

Heritage cash expenditures continued to improve in 2012, decreasing from
$15.2 million in 2011 to $14.8 million in 2012. Heritage expenses for
2012 also decreased due to favorable claims experience in our black lung
and workers' compensation actuarial benefit calculations.

Corporate expenses for 2012 increased due to one-time executive
recruiting and higher long-term compensation expenses. Interest expense
for 2012 also increased to $42.7 million from $29.8 million in 2011 as a
result of the Kemmerer acquisition debt issued in January 2012.

Cash Flow, Liquidity, and Leverage

2012 operating cash flows increased to $57.1 million, enabling the
buyback of $23.0 million of 10.75% senior notes during the fourth
quarter and a strong ending cash position of $31.6 million. Total debt
repayment during 2012 was $44.8 million.

As of December 31, 2012, Westmoreland had total liquidity of $74.7
million, including cash on hand, and $23.1 million and $20.0 million of
credit availability under the WML and corporate revolving lines of
credit, respectively. Both of the credit facilities had no borrowings
with one outstanding letter of credit in the amount of $1.9 million on
the WML line.

During 2012, Westmoreland improved both its Gross Leverage Ratio and Net
Leverage Ratio, with the Net Leverage ratio decreasing to 3.00.

Conference Call

A conference call regarding Westmoreland Coal Company's 2012 results
will be held on March 1, 2013, 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. The Company's 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, including that Westmoreland may not achieve
the projected sales tons, adjusted EBITDA or capital expenditure
targets. 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