ACQUISITIONS

Acquisition of Buckingham Coal Company, LLC

On January 1, 2015, Westmoreland completed the acquisition of Buckingham Coal Company, LLC, an Ohio-based coal supplier (“Buckingham”), pursuant to an agreement dated January 1, 2015 among WCC Land Holding Company, Inc., an affiliate of the Company, for an initial cash purchase price of $34.0 million, reduced by a working capital adjustment of $1.6 million (the “Buckingham Acquisition”). The Buckingham operations are included in the Company’s Coal - U.S. segment.

The acquisition of Buckingham has been accounted for under the acquisition method of accounting that requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value.

The allocation of the purchase price is preliminary pending the completion of various analyses and the finalization of estimates. During the measurement period (which is not to exceed one year from the acquisition date), additional assets or liabilities may be recognized if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date. The preliminary allocation may be adjusted after obtaining additional information regarding, among other things, asset valuations, liabilities assumed and revisions of previous estimates. These adjustments may be significant and will be accounted for retrospectively.

A summary of the purchase consideration and a preliminary allocation of the purchase consideration follows (in millions):



	Provisional as of March 31, 2015
Purchase Price:
Cash paid - Initial payment	$	34.0
Cash received - Working capital adjustment	(1.6		)
Net cash consideration	$	32.4

Preliminary allocation of purchase price:
Assets:
Cash and cash equivalents	$	2.8
Inventories - materials and supplies	2.0
Inventories - coal	—
Other current assets	0.1
Total current assets	4.9
Land and mineral rights	11.0
Plant and equipment	24.7
Total Assets	40.6
Liabilities:
Trade payables and other accrued liabilities	(4.4		)
Asset retirement obligations	(1.0		)
Total current liabilities	(5.4		)
Asset retirement obligations, less current portion	(2.8		)
Total Liabilities	(8.2		)
Net fair value	$	32.4

Acquisition of General Partner of Westmoreland Resource Partners, LP

On December 31, 2014, the Company completed the acquisition of the GP (the “GP Acquisition”), and completed a contribution of certain royalty-bearing coal reserves to WMLP in return for WMLP common units (the “Contribution” and together with the GP Acquisition, the “WMLP Transactions”).

Westmoreland paid $30.0 million in December 2014 and $3.5 million in January 2015 to acquire the GP; and received 4,512,500 common units of WMLP (on a post-split basis following a 12-to-1 reverse split of WMLP’s common and general partner units) as consideration for the Contribution.

In connection with the closing, WMLP’s name was changed to Westmoreland Resource Partners, LP from Oxford Resource Partners, LP and the name of the GP was changed to Westmoreland Resources GP, LLC from Oxford Resources GP, LLC. The common units of WMLP trade on the NYSE under the symbol “WMLP”.

The acquisition of the GP has been accounted for under the acquisition method of accounting that requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value.

A summary of the purchase consideration and a preliminary allocation of the purchase consideration follows (in millions):



Purchase Price:
Cash paid at closing	$	30.0
Contingent consideration	3.5
Fair value of outstanding WMLP units ⁽¹⁾	10.8
Total purchase consideration	$	44.3

Preliminary allocation of purchase price:
Assets:
Trade receivables and other	$	22.5
Inventories - materials and supplies	7.4
Inventories - coal	6.6
Other current assets	1.3
Total current assets	37.8
Land and mineral rights	38.6
Plant and equipment	134.0
Advanced coal royalties	9.2
Restricted investments and bond collateral	10.6
Intangible assets	31.0
Other assets	0.2
Total Assets	261.4
Liabilities:
Trade payables and other accrued liabilities	(19.1		)
Asset retirement obligations	(7.8		)
Other current liabilities	(4.0		)
Total current liabilities	(30.9		)
Long-term debt, less current installments	(160.1		)
Asset retirement obligations, less current portion	(23.9		)
Warrants	(2.0		)
Other liabilities	(0.2		)
Total Liabilities	(217.1		)
Net Assets	44.3
Non-controlling Interest	(10.8		)
Invested Equity	$	33.5

(1) Represents the market price of WMLP units outstanding using the December 31, 2014 closing price of $1.00.

No goodwill was recorded in the GP Acquisition and $31.0 million of intangible assets to be amortized over a fifteen-year period were identified in the GP Acquisition. The intangible asset identified in the GP Acquisition is a favorable terminal lease at a dock in Ohio which was fair valued based on more favorable market prices than contracted prices in lease agreements as measured during a business combination.

Canadian Acquisition

On April 28, 2014, Westmoreland Coal Company acquired PMRU and CVRI. These Canadian operations include six producing thermal coal mines in the Canadian provinces of Alberta and Saskatchewan, a char production facility, and a 50% interest in an activated carbon plant.

Unaudited Pro Forma Information

The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisitions occurred on January 1, 2013, in the case of the Canadian Acquisition and the WMLP Transactions, and on January 1, 2014, in the case of the Buckingham Acquisition. The unaudited pro forma results have been prepared based on estimates and assumptions, which the Company believes are reasonable, however, they are not necessarily indicative of the consolidated results of operations had the acquisitions occurred on the dates indicated above, or of future results of operations.



(In thousands, except per share data)	Three Months Ended March 31,
	2014
Total Revenues
As reported	$	180,202
Pro forma (unaudited)	$	465,791

Operating Income
As reported	$	8,053
Pro forma (unaudited)	$	36,176

Net income (loss) applicable to common shareholders
As reported	$	(19,291	)
Pro forma (unaudited)	$	1,382

Net income (loss) per share applicable to common shareholders
As reported	$	(1.30	)
Pro forma (unaudited)	$	0.09