May 10, 2016 - Westmoreland Coal Company (NasdaqGM:WLB) today reported financial results for the 2016 first quarter and affirmed its full-year 2016 outlook.

First Quarter Highlights

• Revenues of $354.7 million, from tons sold of 13.8 million

• Net income applicable to common shareholders of $30.6 million, or $1.67 per diluted share, including a $47.9 million, or $2.62 per diluted share, tax benefit resulting from the change in valuation of tax assets following the San Juan acquisition

• Adjusted EBITDA(1) of $63.0 million

• Cash flow provided by operating activities of $18.2 million

• Free cash flow(1) of $14.0 million

“Despite weak power demand during the first quarter, which was one of the warmest quarters on record, our mine-mouth and cost-protected model again helped us deliver solid results, especially cash flows,” said Kevin Paprzycki, Westmoreland’s Chief Executive Officer. “We continue to make progress on our cash generation initiatives as we work towards paying down our debt late in the year. Our goal is to create value for Westmoreland’s investors by generating cash and strengthening our balance sheet.”

Safety

Westmoreland is committed to achieving the highest safety standards. Reflected in the safety performance in the first quarter of 2016 is an admirable accomplishment of 21 years with no lost time incidents at Westmoreland’s Sheerness mine, near Hanna, Alberta.

Consolidated and Segment Results

The record-setting warm weather and the power pricing environment in many of Westmoreland’s markets impacted the first quarter results. Westmoreland made progress in the quarter implementing cost curtailment initiatives and integrating San Juan Coal Company following the January 31 acquisition. The consolidated and Coal - U.S. segment results benefited year over year from having two months of San Juan results included in the first quarter of 2016.

The Coal - U.S. segment experienced market softness as our customers reduced their power generation due to the low number of heating days this winter. Coal - Canada results were impacted by low demand, however operating improvements led to increased profitability. Lower open market pricing in Ohio pressured results at Coal - WMLP.

Cash Flow and Liquidity

The $14.0 million of free cash flow Westmoreland generated in the quarter was comprised of cash flow provided by operations of $18.2 million, less capital expenditures of $5.5 million, plus net cash collected under a certain contract for loan and lease receivables of $1.3 million. Working capital investments, which included the initial underwriting of San Juan’s accounts receivables, reduced Westmoreland’s free cash flow by $16.9 million in the first quarter.

Westmoreland ended the 2016 first quarter with $17.8 million of cash and cash equivalents on hand. Contributing to the $5.2 million decrease from year end were, among other items, first quarter’s free cash flow generation, $11.0 million cash debt reductions, approximately $6 million of cash used, net of loan proceeds received, to purchase San Juan and $3.2 million of cash used for additional bonding. Westmoreland had outstanding debt at quarter end of $1,129.0 million, an increase from year end driven by the San Juan financing.

At March 31, 2016, Westmoreland had zero drawn on its revolving credit facility and had, net of letters of credit, $36.3 million available to draw. An additional $15 million was available to Westmoreland Resource Partners through its revolving credit facility, which is not available to the parent for borrowings.

Full-Year Guidance

Commenting on the outlook, Paprzycki said, “After taking into account the current market conditions, we still expect to achieve the guidance we issued in February. We have visibility into our cash flow stream because we entered this year with nearly 90% of our tons under cost-protected contracts. Our cash generation, considering normal seasonality, will strengthen following the second quarter which typically experiences the year’s lowest energy demand. We will look to reduce debt later in the year with our increased cash flow.”

Westmoreland’s 2016 guidance remains:

Coal tons sold $235 - $275 million

Free cash flow $59 - $71 million

Cash interest approximately $90 million

Notes

(1) Westmoreland presents certain non-GAAP financial measures including Adjusted EBITDA and free cash flow that management believes provide meaningful supplemental information and provide meaningful comparability to prior periods. Reconciliations of non-GAAP to GAAP measures are presented in the accompanying tables.