SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION

Pursuant to the indenture governing the 10.75% Senior Notes, certain 100% owned subsidiaries of the Company have fully and unconditionally guaranteed the notes on a joint and several basis.

As a result of the prepayment of the WML Notes, WML became a Guarantor Subsidiary. The following tables include WML as a Guarantor Subsidiary, including the 2013 information which has been recast.

Guarantees of the Senior Notes will be released under certain circumstances, including:

(1)

in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor Subsidiary, by way of merger, consolidation or otherwise, a sale or other disposition of all of the Equity Interests of such Guarantor Subsidiary then held by the Issuers or any Restricted Subsidiary; provided, that the sale or other disposition does not violate the “Asset Sales” provisions of the Indenture;


(2)	if such Guarantor Subsidiary is designated as an Unrestricted Subsidiary in accordance with the provisions of the Indenture, upon effectiveness of such designation;


(3)	upon Legal Defeasance or Covenant Defeasance (as such terms are defined in the indenture) or upon satisfaction and discharge of the Indenture;


(4)	upon the liquidation or dissolution of such Guarantor Subsidiary, provided no event of default has occurred and is continuing; or


(5)	at such time as such Guarantor Subsidiary is no longer required to be a Guarantor Subsidiary of the Senior Notes as described in the Indenture, provided no event of default has occurred and is continuing.

The following tables present unaudited consolidating financial information for (i) the issuer of the notes (Westmoreland Coal Company), (ii) the co-issuer of the notes (Westmoreland Partners), (iii) the guarantors under the notes, and (iv) the entities that are not guarantors under the notes:

CONSOLIDATING BALANCE SHEETS

June 30, 2014

(In thousands)



Assets	Parent/ Issuer		Co-Issuer		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Current assets:
Cash and cash equivalents	$	13,514	$	415	$	24,440		$	2,241		$	—		$	40,610
Receivables:
Trade	—		12,940		116,712			—			—			129,652
Loan and lease receivable	—		—		11,682			—			—			11,682
Contractual third-party reclamation receivables	—		—		7,940			—			—			7,940
Intercompany receivable/payable	132,824		32,639		(146,187		)	(19,275		)	(1		)	—
Other	673		210		2,294			45			(40		)	3,182
	133,497		45,789		(7,559		)	(19,230		)	(41		)	152,456
Inventories	—		5,319		147,834			1			—			153,154
Deferred income taxes	5,370		—		683			—			—			6,053
Other current assets	972		335		11,055			—			—			12,362
Total current assets	153,353		51,858		176,453			(16,988		)	(41		)	364,635
Property, plant and equipment:
Land and mineral rights	—		1,395		437,606			—			—			439,001
Plant and equipment	4,022		221,350		606,965			—			—			832,337
	4,022		222,745		1,044,571			—			—			1,271,338
Less accumulated depreciation, depletion and amortization	2,863		76,662		406,295			—			—			485,820
Net property, plant and equipment	1,159		146,083		638,276			—			—			785,518
Loan and lease receivable	—		—		85,344			—			—			85,344
Advanced coal royalties	—		—		7,134			—			—			7,134
Reclamation deposits	—		—		75,911			—			—			75,911
Restricted investments and bond collateral	63,322		—		41,189			—			—			104,511
Contractual third-party reclamation receivables	—		—		93,956			—			—			93,956
Investment in joint venture	—		—		33,273			—			—			33,273
Intangible assets	—		460		217			—			—			677
Investment in subsidiaries	480,871		—		—			3,770			(484,641		)	—
Other assets	21,825		—		10,937			3,500			(3,500		)	32,762
Total assets	$	720,530	$	198,401	$	1,162,690		$	(9,718	)	$	(488,182	)	$	1,583,721

CONSOLIDATING BALANCE SHEETS

June 30, 2014

(In thousands)



Liabilities and Shareholders’ Deficit	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Current liabilities
Current installments of long-term debt	$	—		$	—		$	42,401		$	—		$	—		$	42,401
Accounts payable and accrued expenses:
Trade and other accrued liabilities	5,240			7,996			114,423			684			(5		)	128,338
Interest payable	30,315			—			474			—			(39		)	30,750
Production taxes	—			1,081			38,936			2,657			(1		)	42,673
Workers’ compensation	707			—			—			—			—			707
Postretirement medical benefits	12,042			—			773			1,139			1			13,955
SERP	390			—			—			—			—			390
Deferred revenue	—			9,581			1,980			—			—			11,561
Asset retirement obligations	—			—			31,131			—			—			31,131
Other current liabilities	593			5,279			6,102			—			(1		)	11,973
Total current liabilities	49,287			23,937			236,220			4,480			(45		)	313,879
Long-term debt, less current installments	698,015			—			96,128			—			(3,500		)	790,643
Workers’ compensation, less current portion	6,629			—			—			—			—			6,629
Excess of black lung benefit obligation over trust assets	9,841			—			—			—			—			9,841
Postretirement medical benefits, less current portion	184,902			—			68,766			18,105			—			271,773
Pension and SERP obligations, less current portion	12,776			97			9,110			239			—			22,222
Deferred revenue, less current portion	—			35,949			4,728			—			(1		)	40,676
Asset retirement obligations, less current portion	—			927			357,326			—			—			358,253
Intangible liabilities	—			5,072			—			—			—			5,072
Deferred income taxes	5,370			—			10,144			—			—			15,514
Other liabilities	707			5,790			3,167			200			—			9,864
Intercompany receivable/payable	13,648			—			(13,849		)	14,654			(14,453		)	—
Total liabilities	981,175			71,772			771,740			37,678			(17,999		)	1,844,366
Shareholders’ deficit
Preferred stock	96			—			—			—			—			96
Common stock	38,173			5			110			132			(247		)	38,173
Other paid-in capital	133,140			52,848			441,269			(124		)	(493,993		)	133,140
Accumulated other comprehensive loss	(53,615		)	(160		)	16,075			(3,067		)	(12,848		)	(53,615		)
Accumulated earnings (deficit)	(378,439		)	73,936			(66,504		)	(44,337		)	36,905			(378,439		)
Total equity (deficit)	(260,645		)	126,629			390,950			(47,396		)	(470,183		)	(260,645		)
Total liabilities and shareholders’ deficit	$	720,530		$	198,401		$	1,162,690		$	(9,718	)	$	(488,182	)	$	1,583,721

CONSOLIDATING BALANCE SHEETS

December 31, 2013

(In thousands)



Assets	Parent/ Issuer			Co-Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Current assets:
Cash and cash equivalents	$	25,326		$	3,341	$	27,451	$	4,992		$	—		$	61,110
Receivables:
Trade	—			12,934		46,985		6,277			—			66,196
Contractual third-party reclamation receivables	—			—		8,487		—			—			8,487
Intercompany receivable/payable	(16,273		)	—		2,761		(19,353		)	32,865			—
Other	1,616			210		3,256		28			(24		)	5,086
	(14,657		)	13,144		61,489		(13,048		)	32,841			79,769
Inventories	—			6,161		33,811		—			—			39,972
Deferred income taxes	5,355			—		870		—			(870		)	5,355
Restricted investments and bond collateral	—			5,998		—		—			—			5,998
Other current assets	789			143		11,069		834			—			12,835
Total current assets	16,813			28,787		134,690		(7,222		)	31,971			205,039
Property, plant and equipment:
Land and mineral rights	—			1,395		276,793		—			—			278,188
Plant and equipment	3,973			220,872		432,851		—			—			657,696
	3,973			222,267		709,644		—			—			935,884
Less accumulated depreciation, depletion and amortization	2,707			71,653		371,488		—			—			445,848
Net property, plant and equipment	1,266			150,614		338,156		—			—			490,036
Advanced coal royalties	—			—		7,311		—			—			7,311
Reclamation deposits	—			—		74,921		—			—			74,921
Restricted investments and bond collateral	15,134			—		54,101		—			—			69,235
Contractual third-party reclamation receivables	—			—		88,303		—			—			88,303
Intangible assets	—			1,283		237		—			—			1,520
Investment in subsidiaries	280,843			—		—		3,770			(284,613		)	—
Other assets	8,636			—		1,683		2,000			(1,999		)	10,320
Total assets	$	322,692		$	180,684	$	699,402	$	(1,452	)	$	(254,641	)	$	946,685

CONSOLIDATING BALANCE SHEETS

December 31, 2013

(In thousands)



Liabilities and Shareholders’ Deficit	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Current liabilities
Current installments of long-term debt	$	20,392		$	—		$	23,951		$	—		$	—		$	44,343
Accounts payable and accrued expenses:
Trade	6,840			10,119			38,061			2,487			—			57,507
Interest payable	11,302			—			40			—			(21		)	11,321
Production taxes	—			3			36,522			5,380			—			41,905
Workers’ compensation	717			—			—			—			—			717
Postretirement medical benefits	12,042			—			774			1,139			—			13,955
SERP	390			—			—			—			—			390
Deferred revenue	—			9,024			5,044			—			—			14,068
Asset retirement obligations	—			—			23,353			—			—			23,353
Other current liabilities	—			5,053			417			—			(1		)	5,469
Total current liabilities	51,683			24,199			128,162			9,006			(22		)	213,028
Long-term debt, less current installments	224,582			—			72,912			—			(2,000		)	295,494
Workers’ compensation, less current portion	6,744			—			—			—			—			6,744
Excess of black lung benefit obligation over trust assets	8,675			—			—			—			—			8,675
Postretirement medical benefits, less current portion	185,858			—			66,439			18,077			—			270,374
Pension and SERP obligations, less current portion	13,069			99			10,765			243			—			24,176
Deferred revenue, less current portion	—			41,297			5,270			—			—			46,567
Asset retirement obligations, less current portion	—			892			255,619			—			—			256,511
Intangible liabilities	—			5,606			—			—			—			5,606
Deferred income taxes	5,355			—			—			—			—			5,355
Other liabilities	584			—			6,687			983			(6,220		)	2,034
Intercompany receivable/payable	14,021			—			(7,851		)	14,654			(20,824		)	—
Total liabilities	510,571			72,093			538,003			42,963			(29,066		)	1,134,564
Shareholders’ deficit
Preferred stock	160			—			—			—			—			160
Common stock	36,479			5			110			132			(247		)	36,479
Other paid-in capital	134,861			52,835			157,984			(124		)	(210,695		)	134,861
Accumulated other comprehensive loss	(63,595		)	(164		)	6,425			(3,086		)	(3,175		)	(63,595		)
Accumulated earnings (deficit)	(295,784		)	55,915			(3,120		)	(41,337		)	(11,458		)	(295,784		)
Total equity (deficit)	(187,879		)	108,591			161,399			(44,415		)	(225,575		)	(187,879		)
Total liabilities and shareholders’ deficit	$	322,692		$	180,684		$	699,402		$	(1,452	)	$	(254,641	)	$	946,685

CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended June 30, 2014

(In thousands)



	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	21,803		$	266,153		$	—		$	—	$	287,956
Costs and expenses:
Cost of sales	(247		)	21,592			227,044			—			—		248,389
Depreciation, depletion and amortization	79			2,485			21,915			—			—		24,479
Selling and administrative	12,003			1,169			15,921			(384		)	—		28,709
Heritage health benefit expenses	3,178			—			—			210			—		3,388
Gain on sales of assets	—			—			(43		)	—			—		(43		)
Restructuring charges	796			101			6,646			—			—		7,543
Derivative loss	—			5,930			—			—			—		5,930
Income from equity affiliates	—			—			(799		)	—			—		(799		)
	15,809			31,277			270,684			(174		)	—		317,596
Operating income (loss)	(15,809		)	(9,474		)	(4,531		)	174			—		(29,640		)
Other income (expense):
Interest expense	(18,609		)	(74		)	(3,111		)	(1		)	9		(21,786		)
Loss on extinguishment of debt	(63		)	—			(12,571		)	(1		)	—		(12,635		)
Interest income	145			4			1,433			—			—		1,582
Gain on foreign exchange	1,557			—			1,092			—			—		2,649
Other income	—			—			483			—			—		483
	(16,970		)	(70		)	(12,674		)	(2		)	9		(29,707		)
Income (loss) before income taxes and income of consolidated subsidiaries	(32,779		)	(9,544		)	(17,205		)	172			9		(59,347		)
Equity in income of subsidiaries	(30,462		)	—			—			—			30,462		—
Income (loss) before income taxes	(63,241		)	(9,544		)	(17,205		)	172			30,471		(59,347		)
Income tax expense (benefit)	(87		)	—			(74		)	1			3,967		3,807
Net income (loss)	(63,154		)	(9,544		)	(17,131		)	171			26,504		(63,154		)
Less net loss attributable to noncontrolling interest	—			—			—			—			—		—
Net income (loss) attributable to the Parent company	$	(63,154	)	$	(9,544	)	$	(17,131	)	$	171		$	26,504	$	(63,154	)

CONSOLIDATING STATEMENTS OF OPERATIONS

Three Months Ended June 30, 2013

(In thousands)



	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	23,162		$	134,449		$	9,538		$	(4,650	)	$	162,499
Costs and expenses:
Cost of sales	(372		)	14,901			113,640			7,009			(4,650		)	130,528
Depreciation, depletion and amortization	94			2,551			12,753			—			(1		)	15,397
Selling and administrative	4,259			872			7,232			(394		)	—			11,969
Heritage health benefit expenses	2,844			—			—			265			—			3,109
Gain on sales of assets	—			—			(74		)	—			—			(74		)
Other operating income	—			—			(10,405		)	—			—			(10,405		)
	6,825			18,324			123,146			6,880			(4,651		)	150,524
Operating income (loss)	(6,825		)	4,838			11,303			2,658			1			11,975
Other income (expense):
Interest expense	(7,591		)	(10		)	(2,479		)	(5		)	9			(10,076		)
Loss on extinguishment of debt	(64		)	—			—			—			—			(64		)
Interest income	46			5			232			6			(9		)	280
Other income (loss)	2			—			130			(2		)	—			130
	(7,607		)	(5		)	(2,117		)	(1		)	—			(9,730		)
Income (loss) before income taxes and income of consolidated subsidiaries	(14,432		)	4,833			9,186			2,657			1			2,245
Equity in income of subsidiaries	16,648			—			—			—			(16,648		)	—
Income (loss) before income taxes	2,216			4,833			9,186			2,657			(16,647		)	2,245
Income tax expense (benefit)	(1		)	—			1,139			—			(1,110		)	28
Net income (loss)	2,217			4,833			8,047			2,657			(15,537		)	2,217
Less net loss attributable to noncontrolling interest	2,499			—			—			—			—			2,499
Net income (loss) attributable to the Parent company	$	(282	)	$	4,833		$	8,047		$	2,657		$	(15,537	)	$	(282	)

CONSOLIDATING STATEMENTS OF OPERATIONS

Six Months Ended June 30, 2014

(In thousands)



	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	43,815		$	424,351		$	(7	)	$	—		$	468,159
Costs and expenses:
Cost of sales	(471		)	38,046			349,389			55			—			387,019
Depreciation, depletion and amortization	156			5,009			35,373			—			—			40,538
Selling and administrative	16,968			2,062			23,783			(773		)	—			42,040
Heritage health benefit expenses	6,504			—			—			428			—			6,932
Gain on sales of assets	—			—			(5		)	—			—			(5		)
Restructuring charges	796			499			6,646			—			—			7,941
Derivative loss	—			5,930			—			—			—			5,930
Equity in net income of unconsolidated affiliates	—			—			(799		)	—			—			(799		)
Other operating income	—			—			150			1			—			151
	23,953			51,546			414,537			(289		)	—			489,747
Operating income (loss)	(23,953		)	(7,731		)	9,814			282			—			(21,588		)
Other income (expense):
Interest expense	(37,282		)	(118		)	(5,199		)	—			15			(42,584		)
Loss on extinguishment of debt	(62		)	—			(12,572		)	(1		)	—			(12,635		)
Interest income	269			7			1,608			15			(15		)	1,884
Gain (loss) on foreign exchange	(5,233		)	—			1,092			—			—			(4,141		)
Other income	—			—			576			—			—			576
	(42,308		)	(111		)	(14,495		)	14			—			(56,900		)
Income (loss) before income taxes and income of consolidated subsidiaries	(66,261		)	(7,842		)	(4,681		)	296			—			(78,488		)
Equity in income of subsidiaries	(16,148		)	—			—			—			16,148			—
Income (loss) before income taxes	(82,409		)	(7,842		)	(4,681		)	296			16,148			(78,488		)
Income tax expense (benefit)	(224		)	—			5,041			—			(1,120		)	3,697
Net income (loss)	(82,185		)	(7,842		)	(9,722		)	296			17,268			(82,185		)
Less net loss attributable to noncontrolling interest	—			—			—			—			—			—
Net income (loss) attributable to the Parent company	$	(82,185	)	$	(7,842	)	$	(9,722	)	$	296		$	17,268		$	(82,185	)

CONSOLIDATING STATEMENTS OF OPERATIONS

Six Months Ended June 30, 2013

(In thousands)



	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	42,498		$	274,187		$	20,889		$	(13,627	)	$	323,947
Costs and expenses:
Cost of sales	(770		)	31,856			223,417			20,073			(13,627		)	260,949
Depreciation, depletion and amortization	187			5,082			24,554			—			—			29,823
Selling and administrative	8,207			1,726			14,680			(758		)	—			23,855
Heritage health benefit expenses	6,533			—			—			527			—			7,060
Gain on sales of assets	—			—			(308		)	—			—			(308		)
Other operating income	—			—			(15,142		)	—			—			(15,142		)
	14,157			38,664			247,201			19,842			(13,627		)	306,237
Operating income (loss)	(14,157		)	3,834			26,986			1,047			—			17,710
Other income (expense):
Interest expense	(15,175		)	(20		)	(5,048		)	(10		)	17			(20,236		)
Loss on extinguishment of debt	(64		)	—			—			—			—			(64		)
Interest income	76			15			493			10			(17		)	577
Other income (loss)	—			—			200			(2		)	—			198
	(15,163		)	(5		)	(4,355		)	(2		)	—			(19,525		)
Income (loss) before income taxes and income of consolidated subsidiaries	(29,320		)	3,829			22,631			1,045			—			(1,815		)
Equity in income of subsidiaries	27,450			—			—			—			(27,450		)	—
Income (loss) before income taxes	(1,870		)	3,829			22,631			1,045			(27,450		)	(1,815		)
Income tax expense (benefit)	—			—			4,458			—			(4,403		)	55
Net income (loss)	(1,870		)	3,829			18,173			1,045			(23,047		)	(1,870		)
Less net loss attributable to noncontrolling interest	797			—			—			—			—			797
Net income (loss) attributable to the Parent company	$	(2,667	)	$	3,829		$	18,173		$	1,045		$	(23,047	)	$	(2,667	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30, 2014

(In thousands)



	Parent/Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Net income (loss)	$	(63,154	)	$	(9,544	)	$	(17,131	)	$	171	$	26,504		$	(63,154	)
Other comprehensive income (loss)
Amortization of accumulated actuarial gains or losses, pension	359			2			122			6		(130		)	359
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit	5			—			(36		)	5		31			5
Tax effect of other comprehensive income gains	64			—			—			—		—			64
Change in foreign currency translation adjustment	9,477			—			9,477			—		(9,477		)	9,477
Other comprehensive income (loss)	9,905			2			9,563			11		(9,576		)	9,905
Comprehensive income (loss) attributable to the Parent company	$	(53,249	)	$	(9,542	)	$	(7,568	)	$	182	$	16,928		$	(53,249	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30, 2013

(In thousands)



	Parent/Issuer			Co-Issuer		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Net income (loss)	$	2,217		$	4,833	$	8,047		$	2,657	$	(15,537	)	$	2,217
Other comprehensive income (loss)
Amortization of accumulated actuarial gains or losses, pension	1,004			8		239			—		(247		)	1,004
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit	1,001			—		214			—		(214		)	1,001
Unrealized and realized gains and losses on available-for-sale securities	(39		)	—		(40		)	—		40			(39		)
Other comprehensive income (loss)	1,966			8		413			—		(421		)	1,966
Comprehensive income (loss) attributable to the Parent company	$	4,183		$	4,841	$	8,460		$	2,657	$	(15,958	)	$	4,183

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Six Months Ended June 30, 2014

(In thousands)



	Parent/Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Net income (loss)	$	(82,185	)	$	(7,842	)	$	(9,722	)	$	296	$	17,268		$	(82,185	)
Other comprehensive income (loss)
Amortization of accumulated actuarial gains or losses, pension	717			4			244			11		(259		)	717
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit	10			—			(72		)	10		62			10
Tax effect of other comprehensive income gains	(224		)	—			—			—		—			(224		)
Change in foreign currency translation adjustment	9,477			—			9,477			—		(9,477		)	9,477
Other comprehensive income (loss)	9,980			4			9,649			21		(9,674		)	9,980
Comprehensive income (loss) attributable to the Parent company	$	(72,205	)	$	(7,838	)	$	(73	)	$	317	$	7,594		$	(72,205	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Six Months Ended June 30, 2013

(In thousands)



	Parent/Issuer			Co-Issuer		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Net income (loss)	$	(1,870	)	$	3,829	$	18,173		$	1,045	$	(23,047	)	$	(1,870	)
Other comprehensive income (loss)
Amortization of accumulated actuarial gains or losses, pension	1,745			14		432			—		(446		)	1,745
Amortization of accumulated actuarial gains or losses, transition obligations, and prior service costs, postretirement medical benefit	2,002			—		427			—		(427		)	2,002
Unrealized and realized gains and losses on available-for-sale securities	(39		)	—		(40		)	—		40			(39		)
Other comprehensive income (loss)	3,708			14		819			—		(833		)	3,708
Comprehensive income (loss) attributable to the Parent company	$	1,838		$	3,843	$	18,992		$	1,045	$	(23,880	)	$	1,838

CONSOLIDATING STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2014

(In thousands)



Statements of Cash Flows	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	(82,185	)	$	(7,842	)	$	(9,722	)	$	296		$	17,268		$	(82,185	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in income of subsidiaries	16,148			—			—			—			(16,148		)	—
Depreciation, depletion, and amortization	156			5,009			35,373			—			—			40,538
Accretion of asset retirement obligation and receivable	—			34			9,254			—			—			9,288
Non-cash tax benefits	(224		)	—			—			—			—			(224		)
Amortization of intangible assets and liabilities, net	—			290			20			—			—			310
Share-based compensation	1,934			14			497			—			—			2,445
Gain on sales of assets	—			—			(5		)	—			—			(5		)
Amortization of deferred financing costs	494			—			715			—			—			1,209
Loss on extinguishment of debt	62			—			12,572			1			—			12,635
Loss on sales of investment securities	—			—			3			—			—			3
Loss on derivative	—			5,930			—			—			—			5,930
Loss on foreign exchange	5,233			—			(1,092		)	—			—			4,141
Income from equity affiliates	—			—			(799		)	—			—			(799		)
Distributions from equity affiliates	—			—			730			—			—			730
Changes in operating assets and liabilities:
Receivables, net	943			(6		)	(18,474		)	4,733			1,534			(11,270		)
Inventories	—			842			21,929			(1		)	—			22,770
Excess of black lung benefit obligation over trust assets	1,166			—			—			—			—			1,166
Deferred income tax	—			—			3,854			—			—			3,854
Accounts payable and accrued expenses	17,348			(1,101		)	(3,164		)	(4,526		)	(19		)	8,538
Deferred revenue	—			(4,791		)	(3,633		)	—			—			(8,424		)
Income tax payable	—			—			528			—			—			528
Accrual for workers’ compensation	(125		)	—			—			—			—			(125		)
Asset retirement obligations	—			—			(3,364		)	2			—			(3,362		)
Accrual for postretirement medical benefits	(885		)	—			2,256			38			—			1,409
Pension and SERP obligations	166			2			(507		)	7			—			(332		)
Other assets and liabilities	(7,429		)	(273		)	4,113			(1,193		)	6,587			1,805
Distributions received from subsidiaries	76,800			—			—			—			(76,800		)	—



Net cash provided by (used in) operating activities	29,602			(1,892		)	51,084			(643		)	(67,578		)	10,573
Cash flows from investing activities:
Additions to property, plant and equipment	16			(255		)	(17,122		)	—			—			(17,361		)
Change in restricted investments and bond collateral and reclamation deposits	(48,188		)	5,998			11,673			—			—			(30,517		)
Cash payments related to Canadian acquisition	(282,788		)	—			(39,849		)	—			—			(322,637		)
Cash acquired related to Canadian acquisition	—			—			8,103			—			—			8,103
Net proceeds from sales of assets	—			—			213			—			—			213
Proceeds from the sale of investments	—			—			246			—			—			246
Increase in loan and lease receivable	—			—			(1,120		)	—			—			(1,120		)
Receipts from loan and lease receivable	—			—			2,164			—			—			2,164
Receivable from customer for property and equipment purchases	—			—			—			—			—			—
Other	—			—			(82		)	—			—			(82		)
Net cash provided by (used in) investing activities	(330,960		)	5,743			(35,774		)	—			—			(360,991		)
Cash flows from financing activities:
Change in book overdrafts	—			—			1,605			—			—			1,605
Borrowings from long-term debt	454,219			—			—			—			—			454,219
Repayments of long-term debt	(1,015		)	—			(96,523		)	—			—			(97,538		)
Borrowings on revolving lines of credit	—			—			10,000			—			—			10,000
Repayments on revolving lines of credit	—			—			(10,000		)	—			—			(10,000		)
Debt issuance costs and other refinancing costs	(15,407		)	—			(11,646		)	—			—			(27,053		)
Dividends/distributions	(470		)	(8,500		)	(68,300		)	—			76,800			(470		)
Exercise of stock options	193			—			—			—			—			193
Transactions with Parent/affiliates	(147,974		)	1,723			157,581			(2,108		)	(9,222		)	—
Net cash provided by (used in) financing activities	289,546			(6,777		)	(17,283		)	(2,108		)	67,578			330,956
Effect of foreign exchange rates on cash	—			—			(1,038		)	—			—			(1,038		)
Net decrease in cash and cash equivalents	(11,812		)	(2,926		)	(3,011		)	(2,751		)	—			(20,500		)
Cash and cash equivalents, beginning of period	25,326			3,341			27,451			4,992			—			61,110
Cash and cash equivalents, end of period	$	13,514		$	415		$	24,440		$	2,241		$	—		$	40,610

CONSOLIDATING STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2013

(In thousands)



Statements of Cash Flows	Parent/ Issuer			Co-Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net income (loss)	$	(1,870	)	$	3,829		$	18,173		$	1,045		$	(23,047	)	$	(1,870	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in income of subsidiaries	(27,450		)	—			—			—			27,450			—
Depreciation, depletion, and amortization	187			5,082			24,554			—			—			29,823
Accretion of asset retirement obligation and receivable	—			32			6,305			1			—			6,338
Amortization of intangible assets and liabilities, net	—			312			19			(5		)	—			326
Share-based compensation	1,567			23			2,181			—			—			3,771
Gain on sales of assets	—			—			(308		)	—			—			(308		)
Amortization of deferred financing costs	1,541			—			315			—			—			1,856
Loss on extinguishment of debt	64			—			—			—			—			64
Loss on sales of investment securities	—			—			(28		)	—			—			(28		)
Changes in operating assets and liabilities:
Receivables, net	(227		)	(1,995		)	4,419			(239		)	1,729			3,687
Inventories	—			(1,632		)	(345		)	—			—			(1,977		)
Excess of black lung benefit obligation over trust assets	(280		)	—			—			(1		)	—			(281		)
Accounts payable and accrued expenses	(1,957		)	4,101			904			(1,146		)	(201		)	1,701
Deferred revenue	—			(4,190		)	(2,025		)	1			—			(6,214		)
Income tax payable	—			—			(55		)	(1		)	—			(56		)
Accrual for workers’ compensation	(284		)	—			—			—			—			(284		)
Asset retirement obligations	—			—			(5,422		)	(2		)	—			(5,424		)
Accrual for postretirement medical benefits	(40		)	—			4,010			124			—			4,094
Pension and SERP obligations	695			9			826			(13		)	—			1,517
Other assets and liabilities	(49		)	101			(1,489		)	(374		)	—			(1,811		)
Distributions received from subsidiaries	36,600			—			—			—			(36,600		)	—
Net cash provided by (used in) operating activities	8,497			5,672			52,034			(610		)	(30,669		)	34,924
Cash flows from investing activities:
Additions to property, plant and equipment	(575		)	(698		)	(12,189		)	(4		)	(1		)	(13,467		)
Change in restricted investments and bond collateral and reclamation deposits	(807		)	(5		)	(7,902		)	—			—			(8,714		)
Net proceeds from sales of assets	—			—			577			—			—			577
Proceeds from the sale of investments	—			—			6,807			—			—			6,807



Receivable from customer for property and equipment purchases	—			—			(307		)	(1		)	—			(308		)
Net cash used in investing activities	(1,382		)	(703		)	(13,014		)	(5		)	(1		)	(15,105		)
Cash flows from financing activities:
Change in book overdrafts	—			—			1,777			—			—			1,777
Repayments of long-term debt	(500		)	—			(15,561		)	(9		)	—			(16,070		)
Borrowings on revolving lines of credit	—			—			6,000			—			—			6,000
Repayments on revolving lines of credit	—			—			(6,000		)	—			—			(6,000		)
Debt issuance costs and other refinancing costs	(26		)	—			(156		)	—			—			(182		)
Dividends/distributions	(680		)	(9,000		)	(27,600		)	—			36,600			(680		)
Transactions with Parent/affiliates	(5,080		)	(38		)	8,699			2,349			(5,930		)	—
Net cash provided by (used in) financing activities	(6,286		)	(9,038		)	(32,841		)	2,340			30,670			(15,155		)
Net increase (decrease) in cash and cash equivalents	829			(4,069		)	6,179			1,725			—			4,664
Cash and cash equivalents, beginning of period	14,836			4,545			10,237			1,992			—			31,610
Cash and cash equivalents, end of period	$	15,665		$	476		$	16,416		$	3,717		$	—		$	36,274