Westmoreland Resource Partners LP
Westmoreland Resource Partners LP — BMO Capital Markets 25th Global Metals and Mining Conference 2016
20 slides from Westmoreland Resource Partners LP's conference presentation, Feb 29, 2016
Slide 1: BMO Capital Markets: 25th Global Metals and Mining Conference
BMO Capital Markets: 25° Global Metals and Mining Conference March 1, 2016 Qwesrmorerann COAL COMPANY BMO a) Capital Markets westmoreland.com | NASDAQ:WLB westmorelandmip.com NYSE:WMLP
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Examples of forward-looking state
Slide 3: The Westmoreland Difference
The Westmoreland Difference Lowest Cost Fuel Model Highly Differentiated Business Model Long Term Cost Protected Contracts Consistent Cash Generation Positioned for Long-Term Value The Westmoreland Difference The Westmoreland Model Positioned to Drive Shareholder Value > | Qwsmonerann COAL COMPANY
Slide 4: Diversified North American Coal Leader
Diversified North American Coal Leader Summary Two Public Companies e Formed in 1854, the oldest independent coal WESTMORELAND WESTMORELAND company in the United States COAL COMPANY a eNE RS e Operations include: = 18 surface mine operations in U.S. and Canada nee NASDAGHWEE) NSE ME = A long-wall mi
Slide 5: Portfolio of Mine Mouth and Transportation Advantaged Operations
Portfolio of Mine Mouth and Transportation Advantaged Operations — aa *. “y ae NL Be, TT ~ em, [ ~a4o. ‘\ ee "4 / | A caf Nar / | /~ ie es < 4 ~_ al Valley @ t @ Genesee f XX ~Paintearth 27 Poplar River \ xO Se a Shee © ee Estevan 4 es Rosebud re Ti f= vas @ Beulah ¥ Se Z OHIO Tuscarawas @ @ Cadiz P
Slide 6: Westmoreland's Unique and Predictable Operating Model
Westmoreland’s Unique and Predictable Operating Model e Primarily simple surface mining method executed with draglines and shovels Lowest Cost e Mine-mouth positioning, close proximity to customer facilities Fuel Model = Significant savings to customers by minimizing transportation = High barriers t
Slide 7: Long-Term Protected Contracts Strengthen Business Model
Long-Term Protected Contracts Strengthen Business Model Contracted Position Adds Strength To Forecast (% Contracted) Minimal Exposure To Coal Pricing Volatility 97% Open Market 92% 1% 9 89% 26% 73% Cost pus Cost Indexed 60% 2016 2017 2018 2019 2020 Weighted average remaining contract length of ~12 y
Slide 8: Unique Approach to Reclamation Minimizes Exposure to Westmoreland
Unique Approach to Reclamation Minimizes Exposure to Westmoreland ) $585 Westmoreland net exposure ~25% of reclamation liability Gross Reclamation! Customer Reclamation Bond - Reclamation Deposits Westmoreland Liability Responsibility’ Cash Collateral (Previously Collected) Net Exposure No self bond
Slide 9: Solid Reserve Base
Solid Reserve Base Coal Reserves and Resources in millions of tons Average reserve life extends beyond 2035 3,500 PSSssesty H San Juan { 2011A 2015E 2015E 7 Proven & Probable Proven & Probable Total Resources Recently announced moratorium on federal leases has minimal impact on Westmoreland Qwsmoner
Slide 10: Westmoreland Customers Purchase Fuel Well Below the Competition
Westmoreland Customers Purchase Fuel Well Below the Competition Comparison vs. Other Coal Regions ($/MBtu) Comparison vs. Natural Gas ($/MBtu) © Westmoreland —— Natural Gas (Henry Hub) $7.50 2.69 § $2.66 $2.57 $6.00 $183 54.80 $1.45 $2.50 ae = CAAP Rockies NAAP PRB il. Basin = WB 2010 2011 2012 2013
Slide 11: Coal is the Primary Fuel in the Markets Served
Coal is the Primary Fuel in the Markets Served Power Generation by Fuel Type In Markets Served‘) Power Generation by Fuel In The United States (trillion kWh) IB coal MM NaturalGas | Nuclear Ml Hydroelectric [Other 5.5 5.0 45 4.0 Natural Gas 3.5 3.0 Renewables 25 20 4 1.5 1.0 0.5 Petroleum & Other 0.
Slide 12: Serving High Quality Investment Grade Customers
Serving High Quality Investment Grade Customers “th ATCO Siete nrg. PN N/OResources Capital €> TALEN= Powe r ENERGY (2) Xcel Energy’ “wPaciFICORP TransAlta fi SaskPower Powering the future® The Westmoreland Difference The Westmoreland Model Positioned to Drive Shareholder Value Qwsmonerann COAL COMP
Slide 13: Industry Leading Safety
Industry Leading Safety Lost Time Incident Rate National Surface Mine Average [ll Westmoreland 1.23 1.23 4.19 1.13 oe : 1.28 0.88 0.80 2010A 2011A 2012A 2013A 2014A 2015E Sentinels of Safety Award 2NMA Sentinels of Safety Award 2NMA John T. Ryan Safety Award John T. Ryan Safety Award Colstrip Mine 2
Slide 14: Proven Record of Successful Acquisition Integration
Proven Record of Successful Acquisition Integration e 2016 focus on integrating San Juan acquisition e Strong historical record for enhancing productivity of acquired assets e Consistent cost reduction through implementation of the Westmoreland business model e Proven record for reducing net leverag
Slide 15: Delivering Value Through Consistent Financial Results
Delivering Value Through Consistent Financial Results Tons Sold (Mst) Adjusted EBITDA (US$ mm) Capex (US$ mm) $54-$56 $53-$56 $70-$75 $235-$275 oar $45 $215-$225 $50 $25 $22 $22 $28 $29 $21 2011 2012 2013-2014 «-2015E 2016E 2011 2012 2013 «2014 -«-2015E 2016E 2011 2012 2013 ©2014 +2015E 2016E Record
Slide 16: Focus on Leverage Reductions
Focus on Leverage Reductions Summary Historical Leverage (Net Debt / LTM EBITDA) e Consistent history of rapid delevering following 6.2x acquisitions e Predictable cash flows allow acquisition leverage e Rigorous internal budgeting process to minimize capital and operating costs gigslll or 2008-2010
Slide 17: 2016 Guidance Detail
2016 Guidance Detail 71 WESTMORELAND TM inpionerane meson ~egonetay A) Coal Sales (Mst) 42.0 - 46.0 6.0 - 8.0 5.0 - 6.0 53.0 - 60.0 Adjusted EBITDA (USS mm) $135 - $150 $60 - $75 $40 - $50 \ $235 - $275 Capex (USS mm) $41 - $45 $15 - $19 $3 - $7 $59 - $71 Other Cash Impacts” (USS mm) $21 - $27 $5 -
Slide 18: In US$ millions except per share amounts
In US$ millions except per share amounts EBITDA $250 Less: Maintenance Capex ($64) Less: Other Cash Impacts ($30) Unlevered FCF $157 Less: Interest Expense ($88) Levered FCF $69 Basic Shares Outstanding 18.1 Share Price $5.17 Unlevered FCF per Share $8.68 Levered FCF per Share $3.81 FCF Yield 74% 17
Slide 19: Long-Term Value Drivers
Long-Term Value Drivers Contract mining opportunities MLP structure in place to take advantage of strong cash flows Uplift from non-core ROVA and Coal Valley asset expirations Strengthening the balance sheet through strategic de-leveraging Maximizing capital leasing opportunities Executing on workin
Slide 20: The Westmoreland Difference
The Westmoreland Difference Lowest Cost Fuel Model Highly Differentiated Business Model Long Term Cost Protected Contracts Positioned for Long-Term Value The Westmoreland Difference The Westmoreland Model Consistent Cash Generation Positioned to Drive Shareholder Value 19 | Qwsmonerann COAL COMPANY