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Supplemental Condensed Consolidating Financial Information
12 Months Ended
Dec. 31, 2012
Supplemental Condensed Consolidating Financial Information [Abstract]  
Supplemental Condensed Consolidating Financial Information Text Block
Supplemental Condensed Consolidating Financial Information
 
Pursuant to the indentures governing Arch Coal, Inc.’s senior notes, certain wholly-owned subsidiaries of the Company have fully and unconditionally guaranteed the senior notes on a joint and several basis. The following tables present condensed consolidating financial information for (i) the Company, (ii) the issuer of the senior notes, (iii) the guarantors under the senior notes, and (iv) the entities which are not guarantors under the senior notes (Arch Receivable Company, LLC and the Company’s subsidiaries outside the U.S.):






Condensed Consolidating Statements of Operations
Year Ended December 31, 2012
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues

$


$
4,159,038


$


$


$
4,159,038

Costs, expenses and other

 


 


 


 


 

Cost of sales

10,918


3,427,095






3,438,013

Depreciation, depletion and amortization

5,392


520,083


33




525,508

Amortization of acquired sales contracts, net



(25,189
)





(25,189
)
Change in fair value of coal derivatives and coal trading activities, net



(16,590
)





(16,590
)
Coal derivative settlements, non-hedging



(43,990
)





(43,990
)
Selling, general and administrative expenses

84,198


41,316


8,785




134,299

Contract settlement resulting from Patriot Coal bankruptcy



58,335






58,335

Legal contingencies



(79,532
)





(79,532
)
Mine closure and asset impairment costs



523,568






523,568

Goodwill and other intangible asset impairment



346,423






346,423

Other operating income, net

(13,391
)

9,559


(16,387
)



(20,219
)
 

87,117


4,761,078


(7,569
)



4,840,626

Income from investment in subsidiaries

(569,795
)





569,795



Income (loss) from operations

(656,912
)

(602,040
)

7,569


569,795


(681,588
)
Interest expense, net:

 


 


 


 


 

Interest expense

(366,614
)

(35,207
)

(3,221
)

87,416


(317,626
)
Interest income

28,097


57,303


7,494


(87,416
)

5,478

 

(338,517
)

22,096


4,273




(312,148
)
Other nonoperating expense

 


 


 


 


 

Net loss resulting from early retirement and refinancing of debt

(21,975
)

(1,693
)





(23,668
)
Bridge financing costs related to ICG










 

(21,975
)

(1,693
)





(23,668
)
Income (loss) before income taxes

(1,017,404
)

(581,637
)

11,842


569,795


(1,017,404
)
Provision for (benefit from) income taxes

(333,717
)







(333,717
)
Net income (loss)

(683,687
)

(581,637
)

11,842


569,795


(683,687
)
Less: Net income attributable to noncontrolling interest

(268
)







(268
)
Net income (loss) attributable to Arch Coal, Inc.

$
(683,955
)

$
(581,637
)

$
11,842


$
569,795


$
(683,955
)
Total comprehensive income (loss)

$
(692,239
)
 
$
(587,616
)
 
$
11,842

 
$
575,774

 
$
(692,239
)

.




Condensed Consolidating Statements of Operations
Year Ended December 31, 2011

 

 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues
 
$

 
$
4,285,895

 
$

 
$

 
$
4,285,895

Costs, expenses and other
 
 

 
 

 
 

 
 

 
 

Cost of sales
 
22,926

 
3,244,984

 

 

 
3,267,910

Depreciation, depletion and amortization
 
2,876

 
463,711

 


 

 
466,587

Amortization of acquired sales contracts, net
 

 
(22,069
)
 

 

 
(22,069
)
Change in fair value of coal derivatives and coal trading activities, net
 

 
(2,907
)
 

 

 
(2,907
)
Coal derivative settlements, non-hedging
 

 
7

 

 

 
7

Selling, general and administrative expenses
 
74,589

 
40,940

 
3,527

 

 
119,056

Mine closure and asset impairment costs
 
7,316

 

 

 

 
7,316

Acquisition and transition costs
 
47,360

 

 

 

 
47,360

Other operating income, net
 
(23,306
)
 
12,615

 
(250
)
 

 
(10,941
)
 
 
131,761

 
3,737,281

 
3,277

 

 
3,872,319

Income from investment in subsidiaries
 
556,442

 

 

 
(556,442
)
 

Income (loss) from operations
 
424,681

 
548,614

 
(3,277
)
 
(556,442
)
 
413,576

Interest expense, net:
 
 

 
 

 
 

 
 

 
 

Interest expense
 
(256,221
)
 
(46,565
)
 
(2,224
)
 
74,824

 
(230,186
)
Interest income
 
16,281

 
55,072

 
6,780

 
(74,824
)
 
3,309

 
 
(239,940
)
 
8,507

 
4,556

 

 
(226,877
)
Other nonoperating expense
 
 

 
 

 
 

 
 

 
 

Net loss resulting from early retirement and refinancing of debt
 

 
(1,958
)
 

 

 
(1,958
)
Bridge financing costs related to ICG
 
(49,490
)
 

 

 

 
(49,490
)
 
 
(49,490
)
 
(1,958
)
 

 

 
(51,448
)
Income (loss) before income taxes
 
135,251

 
555,163

 
1,279

 
(556,442
)
 
135,251

Provision for (benefit from) income taxes
 
(7,589
)
 

 

 

 
(7,589
)
Net income (loss)
 
142,840

 
555,163

 
1,279

 
(556,442
)
 
142,840

Less: Net income attributable to noncontrolling interest
 
(1,157
)
 

 

 

 
(1,157
)
Net income (loss) attributable to Arch Coal, Inc.
 
$
141,683

 
$
555,163

 
$
1,279

 
$
(556,442
)
 
$
141,683

Total comprehensive income (loss)
 
$
141,240

 
$
552,663

 
$
1,279

 
$
(553,942
)
 
$
141,240












Condensed Consolidating Statements of Operations
Year Ended December 31, 2010

 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues
 
$

 
$
3,186,268

 
$

 
$

 
$
3,186,268

Costs, expenses and other
 
 

 
 

 
 

 
 

 
 

Cost of sales
 
11,523

 
2,384,289

 

 

 
2,395,812

Depreciation, depletion and amortization
 
2,933

 
362,133

 

 

 
365,066

Amortization of acquired sales contracts, net
 

 
35,606

 

 

 
35,606

Change in fair value of coal derivatives and coal trading activities, net
 

 
8,924

 

 

 
8,924

Coal derivative settlements, non-hedging
 

 
(4,542
)
 

 

 
(4,542
)
Selling, general and administrative expenses
 
79,580

 
36,091

 
2,506

 

 
118,177

Gain on Knight Hawk transaction
 

 
(41,577
)
 

 

 
(41,577
)
Other operating income, net
 
(10,258
)
 
(4,924
)
 

 

 
(15,182
)
 
 
83,778

 
2,776,000

 
2,506

 

 
2,862,284

Income from investment in subsidiaries
 
393,363

 

 

 
(393,363
)
 

Income (loss) from operations
 
309,585

 
410,268

 
(2,506
)
 
(393,363
)
 
323,984

Interest expense, net:
 
 

 
 

 
 

 
 

 
 

Interest expense
 
(143,606
)
 
(64,377
)
 
(2,849
)
 
68,283

 
(142,549
)
Interest income
 
11,129

 
52,899

 
6,704

 
(68,283
)
 
2,449

 
 
(132,477
)
 
(11,478
)
 
3,855

 

 
(140,100
)
Other nonoperating expense
 
 

 
 

 
 

 
 

 
 

Net loss resulting from early retirement and refinancing of debt
 

 
(6,776
)
 

 

 
(6,776
)
Bridge financing costs related to ICG
 

 

 

 

 

 
 

 
(6,776
)
 

 

 
(6,776
)
Income (loss) before income taxes
 
177,108

 
392,014

 
1,349

 
(393,363
)
 
177,108

Provision for (benefit from) income taxes
 
17,714

 

 

 

 
17,714

Net income (loss)
 
159,394

 
392,014

 
1,349

 
(393,363
)
 
159,394

Less: Net income attributable to noncontrolling interest
 
(537
)
 

 

 

 
(537
)
Net income (loss) attributable to Arch Coal, Inc.
 
$
158,857

 
$
392,014

 
$
1,349

 
$
(393,363
)
 
$
158,857

Total comprehensive income (loss)
 
$
172,885

 
$
400,664

 
$
1,349

 
$
(402,013
)
 
$
172,885













Condensed Consolidating Balance Sheets
December 31, 2012
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
671,313

 
$
100,468

 
$
12,841

 
$

 
$
784,622

Restricted cash
 
3,453

 

 

 

 
3,453

Short term investments
 
234,305

 

 

 

 
234,305

Receivables
 
49,281

 
40,452

 
247,171

 
(4,824
)
 
332,080

Inventories
 

 
365,424

 

 

 
365,424

Other
 
106,786

 
86,877

 
557

 

 
194,220

Total current assets
 
1,065,138

 
593,221

 
260,569

 
(4,824
)
 
1,914,104

 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
27,476

 
7,309,550

 
72

 

 
7,337,098

 
 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
 
8,254,508

 

 

 
(8,254,508
)
 

Intercompany receivables
 
(1,367,739
)
 
1,600,311

 
(232,572
)
 

 

Note receivable from Arch Western
 
675,000

 

 

 
(675,000
)
 

Other
 
187,171

 
568,314

 
90

 

 
755,575

Total other assets
 
7,748,940

 
2,168,625

 
(232,482
)
 
(8,929,508
)
 
755,575

Total assets
 
$
8,841,554

 
$
10,071,396

 
$
28,159

 
$
(8,934,332
)
 
$
10,006,777

 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

Accounts payable
 
$
19,859

 
$
204,370

 
$
189

 
$

 
$
224,418

Accrued expenses and other current liabilities
 
65,293

 
259,162

 
124

 
(4,824
)
 
319,755

Current maturities of debt and short-term borrowings
 
32,054

 
842

 

 

 
32,896

Total current liabilities
 
117,206

 
464,374

 
313

 
(4,824
)
 
577,069

Long-term debt
 
5,061,925

 
23,954

 

 

 
5,085,879

Note payable to Arch Coal
 

 
675,000

 

 
(675,000
)
 

Asset retirement obligations
 
1,646

 
408,059

 

 

 
409,705

Accrued pension benefits
 
33,456

 
34,174

 

 

 
67,630

Accrued postretirement benefits other than pension
 
13,953

 
31,133

 

 

 
45,086

Accrued workers’ compensation
 
25,323

 
56,306

 

 

 
81,629

Deferred income taxes
 
664,182

 

 

 

 
664,182

Other noncurrent liabilities
 
69,296

 
151,360

 
374

 

 
221,030

Total liabilities
 
5,986,987

 
1,844,360

 
687

 
(679,824
)
 
7,152,210

Stockholders’ equity
 
2,854,567

 
8,227,036

 
27,472

 
(8,254,508
)
 
2,854,567

Total liabilities and stockholders’ equity
 
$
8,841,554

 
$
10,071,396

 
$
28,159

 
$
(8,934,332
)
 
$
10,006,777





Condensed Consolidating Balance Sheets
December 31, 2011
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
61,375

 
$
75,425

 
$
1,349

 
$

 
$
138,149

Restricted cash
 
10,322

 

 

 

 
10,322

Short term investments
 

 

 

 

 

Receivables
 
65,187

 
27,001

 
378,608

 
(1,617
)
 
469,179

Inventories
 

 
377,490

 

 

 
377,490

Other
 
81,732

 
105,282

 
620

 

 
187,634

Total current assets
 
218,616

 
585,198

 
380,577

 
(1,617
)
 
1,182,774

 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
21,241

 
7,918,816

 
9,093

 

 
7,949,150

 
 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
 
8,813,080

 

 

 
(8,813,080
)
 

Intercompany receivables
 
(1,190,342
)
 
1,448,902

 
(258,560
)
 

 

Note receivable from Arch Western
 
225,000

 

 

 
(225,000
)
 

Other
 
(85,668
)
 
1,167,501

 
202

 

 
1,082,035

Total other assets
 
7,762,070

 
2,616,403

 
(258,358
)
 
(9,038,080
)
 
1,082,035

Total assets
 
$
8,001,927

 
$
11,120,417

 
$
131,312

 
$
(9,039,697
)
 
$
10,213,959

 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

Accounts payable
 
$
30,576

 
$
353,180

 
$
26

 
$

 
$
383,782

Accrued expenses and other current liabilities
 
75,121

 
282,446

 
85

 
(1,617
)
 
356,035

Current maturities of debt and short-term borrowings
 
172,564

 
1,987

 
106,300

 

 
280,851

Total current liabilities
 
278,261

 
637,613

 
106,411

 
(1,617
)
 
1,020,668

Long-term debt
 
3,308,674

 
453,623

 

 

 
3,762,297

Note payable to Arch Coal
 

 
225,000

 

 
(225,000
)
 

Asset retirement obligations
 
877

 
445,907

 

 

 
446,784

Accrued pension benefits
 
19,198

 
29,046

 

 

 
48,244

Accrued postretirement benefits other than pension
 
13,843

 
28,466

 

 

 
42,309

Accrued workers’ compensation
 
17,272

 
54,676

 

 

 
71,948

Deferred income taxes
 
621,483

 
355,270

 

 

 
976,753

Other noncurrent liabilities
 
152,745

 
102,553

 
84

 

 
255,382

Total liabilities
 
4,412,353

 
2,332,154

 
106,495

 
(226,617
)
 
6,624,385

Redeemable noncontrolling interest
 
11,534

 

 

 

 
11,534

Stockholders’ equity
 
3,578,040

 
8,788,263

 
24,817

 
(8,813,080
)
 
3,578,040

Total liabilities and stockholders’ equity
 
$
8,001,927

 
$
11,120,417

 
$
131,312

 
$
(9,039,697
)
 
$
10,213,959




Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2012

 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash provided by (used in) operating activities
 
$
(571,576
)
 
$
781,551

 
$
122,829

 
$

 
$
332,804

Investing Activities
 
 
 
 
 
 
 
 
 
 

Change in restricted cash
 
6,869

 

 

 

 
6,869

Capital expenditures
 
(4,424
)
 
(390,801
)
 

 

 
(395,225
)
Proceeds from dispositions of property, plant and equipment
 

 
1,328

 
21,497

 

 
22,825

Investments in and advances to affiliates
 
(6,287
)
 
(13,134
)
 

 
1,663

 
(17,758
)
Purchases of short term investments
 
(236,862
)
 

 

 

 
(236,862
)
Proceeds from sales of short term investments
 
1,754

 

 

 

 
1,754

Purchase of noncontrolling interest
 
(17,500
)
 

 

 

 
(17,500
)
Additions to prepaid royalties
 

 
(13,269
)
 

 

 
(13,269
)
Cash provided by (used in) investing activities
 
(256,450
)
 
(415,876
)
 
21,497

 
1,663

 
(649,166
)
Financing Activities
 
 

 
 

 
 
 
 

 
 

Contributions from parent
 

 
1,663

 

 
(1,663
)
 

Proceeds from the issuance of senior notes
 
359,753

 

 

 

 
359,753

Proceeds from term note issuance
 
1,633,500

 

 

 

 
1,633,500

Payments to retire debt
 

 
(452,934
)
 

 

 
(452,934
)
Net decrease in borrowings under lines of credit and commercial paper program
 
(375,000
)
 

 
(106,300
)
 

 
(481,300
)
Payments on term note
 
(7,625
)
 

 

 

 
(7,625
)
Net payments on other debt
 
(682
)
 

 

 

 
(682
)
Debt financing costs
 
(50,022
)
 

 
(546
)
 

 
(50,568
)
Dividends paid
 
(42,440
)
 

 

 

 
(42,440
)
Issuance of common stock under incentive plans
 
5,131

 

 

 

 
5,131

Transactions with affiliates, net
 
(84,651
)
 
110,639

 
(25,988
)
 

 

Cash provided by (used in) financing activities
 
1,437,964

 
(340,632
)
 
(132,834
)
 
(1,663
)
 
962,835

Increase in cash and cash equivalents
 
609,938

 
25,043

 
11,492

 

 
646,473

Cash and cash equivalents, beginning of period
 
61,375

 
75,425

 
1,349

 

 
138,149

Cash and cash equivalents, end of period
 
$
671,313

 
$
100,468

 
$
12,841

 
$

 
$
784,622














Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2011
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash provided by (used in) operating activities
 
$
(187,039
)
 
$
998,082

 
$
(168,801
)
 
$

 
$
642,242

Investing Activities
 
 
 
 
 
 
 
 
 
 

Acquisition of ICG, net of cash acquired
 
(2,894,339
)
 

 

 

 
(2,894,339
)
Change in restricted cash
 
5,167

 

 

 

 
5,167

Capital expenditures
 
(12,809
)
 
(528,021
)
 
(106
)
 

 
(540,936
)
Proceeds from dispositions of property, plant and equipment
 

 
25,887

 

 

 
25,887

Investments in and advances to affiliates
 
(633,534
)
 
(33,553
)
 

 
605,178

 
(61,909
)
Additions to prepaid royalties
 

 
(29,957
)
 

 

 
(29,957
)
Consideration paid related to prior business acquisition
 
(829
)
 

 

 

 
(829
)
Cash provided by (used in) investing activities
 
(3,536,344
)
 
(565,644
)
 
(106
)
 
605,178

 
(3,496,916
)
Financing Activities
 
 

 
 

 
 
 
 

 
 

Contributions from parent
 

 
605,178

 

 
(605,178
)
 

Proceeds from the issuance of senior notes
 
2,000,000

 

 

 

 
2,000,000

Proceeds from the issuance of common stock, net
 
1,267,933

 

 

 

 
1,267,933

Payments to retire debt
 

 
(605,178
)
 

 

 
(605,178
)
Net decrease in borrowings under lines of credit and commercial paper program
 
375,000

 
(56,904
)
 
106,300

 

 
424,396

Net proceeds from other debt
 
5,334

 

 

 

 
5,334

Debt financing costs
 
(114,799
)
 
(16
)
 
(8
)
 

 
(114,823
)
Dividends paid
 
(80,748
)
 

 

 

 
(80,748
)
Issuance of common stock under incentive plans
 
2,316

 

 

 

 
2,316

Transactions with affiliates, net
 
316,009

 
(379,973
)
 
63,964

 

 

Cash provided by (used in) financing activities
 
3,771,045

 
(436,893
)
 
170,256

 
(605,178
)
 
2,899,230

Increase (decrease) in cash and cash equivalents
 
47,662

 
(4,455
)
 
1,349

 

 
44,556

Cash and cash equivalents, beginning of period
 
13,713

 
79,880

 

 

 
93,593

Cash and cash equivalents, end of period
 
$
61,375

 
$
75,425

 
$
1,349

 
$

 
$
138,149











Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2010

 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash provided by (used in) operating activities
 
$
(230,966
)
 
$
943,361

 
$
(15,248
)
 
$

 
$
697,147

Investing Activities
 
 
 
 
 
 
 
 
 
 

Capital expenditures
 
(4,814
)
 
(309,843
)
 

 

 
(314,657
)
Proceeds from dispositions of property, plant and equipment
 

 
330

 

 

 
330

Investments in and advances to affiliates
 
(13,821
)
 
(32,364
)
 

 

 
(46,185
)
Additions to prepaid royalties
 

 
(27,355
)
 

 

 
(27,355
)
Consideration paid related to prior business acquisition
 
(1,262
)
 

 

 

 
(1,262
)
Cash used in investing activities
 
(19,897
)
 
(369,232
)
 

 

 
(389,129
)
Financing Activities
 
 

 
 

 
 
 
 

 
 

Proceeds from the issuance of senior notes
 
500,000

 

 

 

 
500,000

Payments to retire debt
 

 
(505,627
)
 

 

 
(505,627
)
Net decrease in borrowings under lines of credit and commercial paper program
 
(120,000
)
 
7,451

 
(84,000
)
 

 
(196,549
)
Net proceeds from other debt
 
82

 

 

 

 
82

Debt financing costs
 
(12,022
)
 
(390
)
 
(339
)
 

 
(12,751
)
Dividends paid
 
(63,373
)
 

 

 

 
(63,373
)
Issuance of common stock under incentive plans
 
1,764

 

 

 

 
1,764

Contribution from non-controlling interest
 
891

 

 

 

 
891

Transactions with affiliates, net
 
(97,021
)
 
(2,566
)
 
99,587

 

 

Cash provided by (used in) financing activities
 
210,321

 
(501,132
)
 
15,248

 

 
(275,563
)
Increase (decrease) in cash and cash equivalents
 
(40,542
)
 
72,997

 

 

 
32,455

Cash and cash equivalents, beginning of period
 
54,255

 
6,883

 

 

 
61,138

Cash and cash equivalents, end of period
 
$
13,713

 
$
79,880

 
$

 
$

 
$
93,593