UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 8-K

Transcription

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 9, 2011 WESTMORELAND COAL COMPANY (Exact Name of Registrant as Specified in Charter) Delaware (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 2 North Cascade Avenue, 2 nd Floor, Colorado Springs, CO (Address of Principal Executive Offices) (Zip Code) Registrant s telephone number, including area code: (719) (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 12) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a- Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

2 Item Results of Operations and Financial Condition On May 9, 2011, Westmoreland Coal Company (the Company ) issued a press release announcing its financial results for the three months ended March 31, A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. On May 9, 2011, beginning at 10:00 a.m. Eastern Time, the Company hosted a conference call with investors to discuss the Company s financial and operating results for the three months ended March 31, The conference call was made available to the public via conference call and webcast. The transcript of the conference call is attached hereto as Exhibit The information in this Current Report on Form 8-K and the Exhibits attached hereto are being furnished and shall not be deemed filed for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Item Financial Statements and Exhibits (d) Exhibits Exhibit No. Description 99.1 Press Release dated May 9, Transcript of Investor Conference Call

3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WESTMORELAND COAL COMPANY Date: May 11, 2011 By: /s/ Kevin A. Paprzycki Kevin A. Paprzycki, Chief Financial Officer (a duly authorized officer)

4 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated May 9, Transcript of Investor Conference Call

5 EXHIBIT 99.1 news release Westmoreland Coal Company (719) Telephone 2 N. Cascade Ave., 2nd Floor Colorado Springs, CO Westmoreland Reports First Quarter 2011 Results Colorado Springs, CO May 9, Westmoreland Coal Company (NASDAQ:WLB) today reported its first quarter results for Highlights: Operating income increased $2.1 million (40.0%) from $5.3 million in Q to $7.4 million in Q Adjusted EBITDA increased $2.1 million (9.7%) during Q to $23.3 million as compared to $21.2 million in Q Net loss applicable to common shareholders of $18.0 million ($1.45 per basic and diluted share) for Q which included $17.0 million of losses on the extinguishment of debt and a $3.2 million conversion premium on the Company s convertible notes pursuant to the first quarter bond issuance and refinancing. The Q net loss was $3.2 million ($0.30 per basic and diluted share). Total revenues were $127.8 million for Q1 2011, 1.0% higher than revenues for Q This was accomplished on lower volume due to the expiration of an unprofitable coal contract. Westmoreland again continued its strong safety performance achieving reportable and lost time incident rates approximately 20.0% and 29.8%, respectively, of the national averages for surface operations for the first quarter of During the first quarter of 2011, Westmoreland s Beulah Mine received the Lignite Energy Council s Safety Excellence Award for the mine or plant with the lowest accident incident rate in the lignite industry and Westmoreland s Jewett Mine received the 2011 Railroad Commission of Texas Coal Mining Reclamation Award for its Wilkerson Springs Creek Relocation.

6 The first quarter of 2011 was the sixth straight quarter in which we increased our operating profit and adjusted EBITDA over the prior year quarter said Keith E. Alessi, Westmoreland s President and CEO. As previously announced, we incurred substantial charges during the quarter related to the refinancing of debt and placement of our senior subordinated debt issuance in February The expiration of an unfavorable coal contract led to improved results in our coal operation despite lower sales. Strong hydro-power conditions combined with scheduled maintenance shutdowns by our coal customers and our ROVA plant will negatively impact our Q versus the Q results. However, this is in line with our expectations. We are very pleased with our safety performance during the first quarter of We once again beat the national surface mine averages by a significantly large margin due to the continuation of our Beulah Mine s award winning safety performance. We are also extraordinarily proud of the reclamation award that our Jewett Mine recently received from the Railroad Commission in Texas. These achievements underscore our commitment to safe and responsible mining practices. Westmoreland s Q net loss includes $17.0 million of losses on the extinguishment of debt and $3.2 million of mark-to-market expense from the conversion of the Company s previously outstanding convertible notes. Westmoreland s Q net loss included $4.8 million of expense related to the valuation of the conversion feature in the Company s convertible notes. Excluding the $20.2 million of refinancing and debt conversion expense in Q and the $4.8 million of mark-to-market expense on the convertible debt in Q1 2010, the Company s net loss decreased by $0.6 million. The Company s revenues in Q increased to $127.8 million compared with $126.4 million in Q This revenue increase was driven by stronger tonnage sales and favorable pricing at the Company s Absaloka Mine which offset the expiration of an unprofitable coal contract at its Rosebud Mine. Westmoreland s Adjusted EBITDA increased to $23.3 million in Q from $21.2 million in Q Coal Segment Operating Results The following table summarizes the Company s Q and Q coal segment performance: Three Months Ended March 31, Increase / (Decrease) $ % Revenues (in thousands) $ 104,136 $ 103,550 $ % Operating income (in thousands) 8,819 7,352 1, % Adjusted EBITDA (in thousands) 21,285 20,237 1, % Tons sold - millions of equivalent tons (0.7) (11.1)% Operating income per ton sold $ 1.57 $ 1.17 $ 0.40 $ 34.9% The Company s coal revenues for the first quarter of 2011 were $104.1 million. Sales increased on stronger tonnages by its Absaloka Mine that offset the expiration of an unprofitable coal contract at the Rosebud Mine. The expiration of the unprofitable coal contract also drove Q increases in the Company s coal segment operating income and Adjusted EBITDA.

7 Power Segment Operating Results The following table summarizes the Company s Q and Q power segment performance: Three Months Ended March 31, Increase / (Decrease) $ % (In thousands) Revenues $ 23,628 $ 22,889 $ % Operating income 4,619 4, % Adjusted EBITDA 7,352 6, % Megawatts hours The Company s power segment revenues for the first quarter of 2011 increased to $23.6 million compared to $22.9 million in first quarter This $0.7 million increase is primarily from contractual price increases, which also drove the increases in operating income and Adjusted EBITDA. Heritage Segment Operating Results The Company s first quarter 2011 heritage operating expenses remained comparable to the reduced first quarter 2010 levels of $4.3 million. Heritage segment Adjusted EBITDA remained at a negative $4.2 million in Q and Q Corporate Segment Operating Results The Company s corporate segment operating expenses for the first quarter of 2011 were $1.8 million, which was comparable to $1.9 million in the first quarter of Corporate segment Adjusted EBITDA improved to a negative $1.2 million in Q from a negative $1.6 million in Q Nonoperating Results The Company s interest expense for the first quarter of 2011 increased to $7.0 million compared with $5.7 million for the first quarter of 2010 due to the higher overall debt levels resulting from the Company s bond offering. The Company s other expense for the first quarter of 2011 decreased to $3.0 million compared with $3.8 million of expense for the first quarter of Excluding the impact of the expense on the conversion feature in the Company s convertible debt, its other expense increased $0.6 million primarily due to gains on sales of securities during the first quarter of Cash Flow from Operations and Liquidity Cash provided by operating activities increased by $2.9 million during Q compared to Q driven by the Company s increase in operating profit. Following Westmoreland s first quarter bond offering and improved profits, the Company anticipates that its cash flows from operations, cash on hand and available borrowing capacity will be sufficient to meet its investing, financing, and working capital needs for several years.

8 Conference Call A conference call regarding Westmoreland Coal Company s first quarter 2011 results will be held on Monday, May 9, 2011, at 10:00 a.m. Eastern Time. Call-in instructions are available on the Company s web site and have been provided in a separate news release. Safety Safety performance at Westmoreland mines continues to be significantly better than the national average for surface operations. Westmoreland mines had reportable and lost time incident rates year to date through the first quarter of 2011 of 0.37 and 0.37 versus the national surface mine rates of 1.85 and 1.24, respectively. The reportable incident rate and lost time rate for the first quarter of 2011 compared favorably to the first quarter 2010 rates of Reportable Lost Time First Quarter First Quarter Additional Information 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 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 Cautionary Note Regarding Forward-Looking Statements This news release 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 statements include, but are not limited to the Company s expectation that its cash flows from operations, cash on hand and available borrowing capacity will be sufficient to meet its investing, financing, and working capital needs for the next several years. Forward-looking statements are based on the Company 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. The Company s actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore 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 and the following: changes in the Company s postretirement medical benefit and pension obligations and the impact of recently enacted healthcare legislation; changes in the Company s black lung obligations, changes in the Company s experience related to black lung claims, and impact of the recently enacted healthcare legislation; the Company s potential inability to expand or continue current coal operations due to limitations in obtaining bonding capacity for new mining permits;

9 the Company s potential inability to maintain compliance with debt covenant and waiver agreement requirements; the potential inability of the Company s subsidiaries to pay dividends to them due to restrictions in the Company s debt arrangements, reductions in planned coal deliveries or other business factors; risks associated with the structure of ROVA s contracts with its lenders, coal suppliers and power purchaser, which could dramatically affect the overall profitability of ROVA; the effect of Environmental Protection Agency inquiries and regulations on the operations of ROVA; the effect of prolonged maintenance or unplanned outages at the Company s operations or those of its major power generating customers, including unplanned outages at its customers due to the impact of weather-related variances; future legislation and changes in regulations, governmental policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulate matter or greenhouse gases; and the other factors that are described in Risk Factors in the Company s Form 10-K for fiscal year Any forward-looking statements made by the Company in this news release speaks only as of the date on which it was made. Factors or events that could cause the Company s actual results to differ may emerge from time-to-time, and it is not possible for the Company to predict all of them. The Company 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. # # # Contact: Kevin Paprzycki (719)

10 Westmoreland Coal Company and Subsidiaries Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, (In thousands, except per share data) Revenues $ 127,764 $ 126,439 Cost, expenses and other: Cost of sales 97,510 97,677 Depreciation, depletion and amortization 11,245 11,392 Selling and administrative 9,305 9,976 Heritage health benefit expenses 3,778 3,915 Loss on sales of assets Other operating income (1,597) (1,906) 120, ,125 Operating income 7,440 5,314 Other income (expense): Interest expense (6,967) (5,723) Loss on extinguishment of debt (17,030) - Interest income Other loss (3,017) (3,836) (26,632) (9,149) Loss before income taxes (19,192) (3,835) Income tax benefit from operations (460) (90) Net loss (18,732) (3,745) Less net loss attributable to noncontrolling interest (1,121) (890) Net loss attributable to the Parent company (17,611) (2,855) Less preferred stock dividend requirements Net loss applicable to common shareholders $ (17,951) $ (3,195) Net loss per share applicable to common shareholders: Basic and diluted $ (1.45) $ (0.30) Weighted average number of common shares outstanding: Basic and diluted 12,369 10,521

11 Westmoreland Coal Company and Subsidiaries Summary Financial Information (Unaudited) Three Months Ended March 31, (In thousands) Cash Flow Net cash provided by operating activities $ 16,182 $ 13,296 Net cash used in investing activities (5,884) (3,941) Net cash provided by (used in) financing activities 28,911 (2,114) March 31, 2011 December 31, 2010 (In thousands) Balance Sheet Data (Unaudited) Total assets $ 787,987 $ 750,306 Total debt $ 294,362 $ 242,104 Working capital deficit $ (1,024) $ (35,793) Total deficit $ (173,927) $ (162,355) Common shares outstanding 13,155 11,161 Three Months Ended March 31, (In thousands) Adjusted EBITDA by Segment Coal $ 21,285 $ 20,237 Power 7,352 6,881 Heritage (4,170) (4,255) Corporate (1,183) (1,635) Total $ 23,284 $ 21,228

12 Three Months Ended March 31, (In thousands) Reconciliation of Adjusted EBITDA to net loss Net loss $ (18,732) $ (3,745) Income tax benefit from continuing operations (460) (90) Other loss 3,017 3,836 Interest income (382) (410) Loss on extinguishment of debt 17,030 - Interest expense 6,967 5,723 Depreciation, depletion and amortization 11,245 11,392 Accretion of ARO and receivable 2,700 3,003 Amortization of intangible assets and liabilities EBITDA 21,548 19,794 Loss on sale of assets Share-based compensation 1,653 1,363 Adjusted EBITDA $ 23,284 $ 21,228 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 the Company s operating performance and the Company believes that EBITDA and Adjusted EBITDA are useful to an investor in evaluating the Company s 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 the Company s operations from period to period by removing the effect of the Company s capital structure and asset base from its 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 the Company 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 the Company s results as reported under GAAP. For example, EBITDA and Adjusted EBITDA: do not reflect the Company s 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, the Company s 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 the Company s debt obligations.

13 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 the Company s industry and in other industries may calculate EBITDA and Adjusted EBITDA differently from the way that the Company 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 the Company to invest in the growth of its business. The Company compensates for these limitations by relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA only as supplemental data.

14 EXHIBIT 99.2 Transcript of Westmoreland Coal (WLB) Investor Conference Call May 9, 2011 Participants Keith E. Alessi, President and Chief Executive Officer Kevin A. Paprzycki, Chief Financial Officer Douglas P. Kathol, Executive Vice President Presentation Operator Good morning ladies and gentlemen and welcome to the Westmoreland Coal Company s Investor conference call. At this time, all telephone participants are in a listen only mode. Following the formal presentation, instructions will be given for the question and answer session which will be conducted by telephone. Web participants wishing to ask a question will need to dial in by telephone to the audio portion of the call. If anyone needs operator assistance at any time during the conference, please press the * followed by the zero on your telephone keypad. As a reminder, this conference is being recorded today and the replay will be made available as soon as practical on the investor portion of the Westmoreland website through May 23 rd, Management s remarks today may contain forward-looking statements based on the company 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. The company s actual results may differ materially from the results discussed in any such forward-looking statements. For a summary of risk factors and other information regarding forward-looking statements, please refer to the company s form 10-K for fiscal year 2010, as well as the company s form 10-Q for the first quarter filed with the Securities and Exchange Commission on May 9 th, Any forward-looking statements represent the company s views only as of today and should not be relied upon as representing its views as of any subsequent date. While the company may elect to update forward-looking statements, at some point in the future, it specifically disclaims any obligation to do so, even if its estimates change and therefore you should not rely on these forward-looking statements as representing the company s views as of any date subsequent to today. Mr. Keith E. Alessi, President and Chief Executive Officer of Westmoreland Coal Company will be delivering today s remarks. Thank you, Mr. Alessi. Please begin. Thank you and good morning to everybody for joining the first quarter call. I am certain you have all seen the press release that went out this morning describing the results of operation for the first quarter. When we chatted at year end, or when the year-end numbers were released with our 10-K, most of the information that is in there related to the bond offering was disclosed so there is really no new news in here. This quarter, was very much in line with our expectations in terms of both operating income and EBITDA. We were pleased with the quarter. I have very brief remarks to make as a result because you

15 know our business really doesn t change much from a quarter-to-quarter basis. I think one of the comments that I have made in the press release and I would reiterate here is that we have gone through a period of time where quarter-to-quarter we have been able to improve our results over the prior and that it s been six straight quarters we have been able to do that. Much of that is a function of the turnaround efforts and the improvement of the operations that we have seen over that period of time. We knew when we sat down looking at 2011, that the second quarter would probably be the quarter that that streak would break simply because one of our larger customers had a regularly scheduled maintenance outage during the quarter, coming up in the second quarter here in 2011 where they were online during So, we expect the second quarter to be in line with our expectations but I am not certain it will be as strong as Q2 last year. The other thing that s affecting Q2 right now and its something that every year we take a good look at is the high grow season out west. This has been an extraordinarily heavy snow pack in the mountains. That impacts our Colstrip customers particularly. Again, they saw this coming and had projected it. With their large unit out for maintenance, it s kind of a moot point while it s out for maintenance. The question is when will it come back up. We do not expect it to be a long period of time but clearly that will impact Q2 also. But we are optimistic. The year is still coming along as we pretty much had seen it laying out when we sat down at the beginning of the year. We continue to make progress on a number of fronts. Our WRI operation is one that we have spent a lot of time and energy focusing on and we are seeing some signs of improvement in some of the issues we dealt with historically there. So we feel pretty good about life and pretty good about the quarter. I did point out at the end of the release and it is something we continue to be very proud of is our safety record and also we were able to pick up a very nice reclamation award down at our Texas mine, which was a real tribute to the folks down there and my understanding is that we have quite a few people from across the country coming down to take a look at what we did with the Wilkerson Springs Creek relocation and we re proud of that too. So with that I ll just open it up for questions and Kevin Paprzycki is with us this morning and so is Doug Kathol if there s questions you have for them. Operator Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. Callers in the queue are requested to limit their number of questions to one primary question and one follow-up question. If you desire to ask additional questions, please re-enter the queue. One moment please while we poll for questions. Thank you. Our first question comes from Brian Taddeo of Gleacher & Company. Please state your question. <Q>: Hi. Good morning everybody. Morning. <Q>: A couple of question. First, can you just give us an update on what the rail situation is looking like, WRI now? I think there might have been a couple of issues late last year, early this year in moving coal. I just wanted to see what the situation was like now. Yeah, it s improved. Doug, you can give more specific detail.

16 Doug Kathol Westmoreland Coal Company Executive Vice President Right. We have seen significant improvement over the last six weeks. We have been working diligently with the customer and also we have been working extensively with the BN Railroad. We have had meetings with them and we are seeing an improved service as a result. <Q>: Have there been any missed deliveries? Doug Kathol Westmoreland Coal Company Executive Vice President There were earlier in the year. Most recently, this last two months we ve seen again a much improved, and we have not missed any deliveries but they have missed a few loads, yes. I think that s an important point to point out. We can only do, you know what s within our control and over the last 60 days, none of the misses have a result of us. It s been either the customer was unable to take it because of issues at their end or there weren t crews for the railroad. <Q>: Got you. Okay, one other question I had, actually a couple more. The distributions from WML up to the parent, were there any in the quarter or can you comment quarter and year to date? Kevin can comment on what was available for distribution. We can take them up whenever we decide to take them up and just to manage our lines of credit and what not, in order not to have drawn a line of credit downstairs and send money upstairs. We sometimes park money in different places but, Kevin, you can talk about what the available amount would have been. Kevin Paprzycki Westmoreland Coal Company CFO Hi Brian, we had about $5 million that was available to come up to the parent in the quarter. <Q>: Sorry, that s as of quarter end or? Kevin Paprzycki Westmoreland Coal Company CFO Sorry that was in the second quarter that was from the first quarter performance. <Q>: Got you, okay. And actually what s the current cash balance or liquidity balance of the company right now? Total company it s in the $40 million, mid 40s, 45-ish. <Q>: $45 million in cash. Right. <Q>: And then still the whole revolver down at WML? The revolver at WML is undrawn largely and then we never did put in place a revolver up at the parent. <Q>: Great. Okay. Thank you very much.

17 Mm hmm. Operator Thank you. As a reminder, if you would like to ask a question, please press *1 on your telephone keypad. Callers in the queue are requested to limit their number of questions to one primary and one followup question. One moment please while we poll for questions. Thank you. Our next question is from Bob Clutterbuck of Clutterbuck funds. Please state your question. <Q>: Hi Keith, how are you? Good Bob. <Q>: And sorry I missed the very beginning of the call so if you ve already answered this don t answer it again but could you give any insight or commentary on where we stand on potentially increasing reserves? No, I did not comment on it but I am glad you did ask the question. We made it a priority for 2011 to in fact increase reserves. I think sometime here during the second quarter we will probably be in a position to announce some specifics around that but virtually all of our operations, we have been diligently moving towards adding on to the reserve base as we have. As you know, what we tend to do is match reserve acquisition with underlying contracts but there are also other opportunistic situations that we try to exploit but as soon as we have more specifics we will disclose those and I would suspect there in Q2 sometime or at least by this time next, or it will be third quarter of course when we announce Q2 results so I would suspect by the next quarterly call we will have some more detail around that. Something I did not mention that of course has been covered with an 8-K and a press release was the move to NASDAQ here a couple of weeks back and that we consider that to be an extremely positive thing for our shareholders when that occurred. <Q>: Okay, terrific. Thanks Keith. Yep, thanks Bob. Operator As a reminder ladies and gentlemen, if you would like to ask a question, you may press *1 on your telephone keypad. Callers in queue are asked to limit their number of questions to one primary and one followup question. One moment please while we poll for questions. Our next question is coming from the line of Charles Fisher of LF Partners. Please state your question. <Q>: Good morning Keith. I was wondering if you can give us some color on the outlook for additional coal sales either at Absaloka or some of the other mines? Yeah, certainly at Colstrip, Beulah and Jewett, those are driven primarily and almost exclusively by the demand of the associated power plant. So you know we make our projections at the beginning of the year as I indicated. You know, you don t know what hydro season might look like this year, it s running a

18 little longer at Colstrip and of course the next thing you turn the corner and you wonder what the summer is going to look like. Depending on the summer, you could see a little bit extra volume. I think our people have budgeted pretty conservatively for the summer, so if we had a pretty hot summer, we might see more than what we have projected. The real opportunity for additional coal sales is as you indicated up at Absaloka. I think we ve talked about it over the last two quarters that we are hoping to get the Western Y put in some time this year and do some test shipments to some potential customers to the west but there s nothing imminent there. We continue as I am sure all other coal companies do, get enquiries from international markets. That activity has heated up, particularly after the situation in Japan with the nuclear plants. Doug and his folks field calls on almost a daily basis. We sort through those leads. We try to figure out who is real and who is not. We are working with one party as we speak about trying to get some tonnage over to them to do some test burning but those again are long-term situations dependent upon port capacity and things like that. So over the back half of this year, I don t look for any major additions, but I hope to make some progress in terms of identifying some customers for 2012 and One thing that we are actively doing is looking over the landscape and determining whether we think there are other mines that look like the mines we operate today that would make nice additions to our portfolio of assets. During the last 90 days we in fact looked at one that on the surface looked like it might be a fit for us, but at the end of the day, for a variety of reasons, including valuation issues, we chose not to pursue. But we will continue to be active looking at potential there. I think that s more likely to be where substantial growth would come from. Any growth we would get at Absaloka would be in the million ton range. It wouldn t be substantial in the short term. <Q>: Thanks Keith. Operator Thank you. There are no further questions at this time. I would like to turn the floor back over to Mr. Alessi for further comments. Thanks. I suspected that we wouldn t get a lot of questions this quarter because our business model is pretty predictable and pretty steady at this point so we appreciate everybody joining us this morning. We will be talking in about 90 days. Operator This concludes today s investor conference call. If you would like to access this call for digital replay, you may dial using account number 286 and conference ID number Thank you.