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Supplemental Condensed Consolidating Financial Information
6 Months Ended
Jun. 30, 2013
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
Three Months Ended June 30, 2013
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues

$


$
766,332


$


$


$
766,332

Costs, expenses and other













 

Cost of sales (exclusive of items shown separately below)

1,829


654,369






656,198

Depreciation, depletion and amortization

1,475


109,601


9




111,085

Amortization of acquired sales contracts, net



(2,209
)





(2,209
)
Change in fair value of coal derivatives and coal trading activities, net



(9,008
)





(9,008
)
Asset impairment and mine closure costs
 
20,482

 

 

 

 
20,482

Selling, general and administrative expenses

22,205


10,729


1,368




34,302

Other operating income, net

(1,101
)

(7,041
)

(97
)



(8,239
)
 

44,890


756,441


1,280




802,611

Income from investment in subsidiaries

26,961






(26,961
)


Income (loss) from operations

(17,929
)

9,891


(1,280
)

(26,961
)

(36,279
)
Interest expense, net:

 


 


 


 


 

Interest expense

(110,946
)

(5,825
)

(1,059
)

23,074


(94,756
)
Interest and investment income

7,201


15,566


1,523


(23,074
)

1,216

 

(103,745
)

9,741


464




(93,540
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes

(121,674
)

19,632


(816
)

(26,961
)

(129,819
)
Benefit from income taxes

(49,468
)







(49,468
)
Income (loss) from continuing operations

(72,206
)

19,632


(816
)

(26,961
)

(80,351
)
Income from discontinued operations, net of tax
 

 
8,145

 

 

 
8,145

Net income (loss)
 
$
(72,206
)
 
$
27,777

 
$
(816
)
 
$
(26,961
)
 
$
(72,206
)
Total comprehensive income (loss)

$
(68,163
)
 
$
28,123

 
$
(816
)
 
$
(27,307
)
 
$
(68,163
)
Condensed Consolidating Statements of Operations
Six Months Ended June 30, 2013


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

 
$
1,503,702

 
$

 
$

 
$
1,503,702

Costs, expenses and other
 
 
 
 
 
 
 
 
 
 

Cost of sales (exclusive of items shown separately below)
 
4,712

 
1,301,229

 

 

 
1,305,941

Depreciation, depletion and amortization
 
2,880

 
218,380

 
18

 

 
221,278

Amortization of acquired sales contracts, net
 

 
(5,019
)
 

 

 
(5,019
)
Change in fair value of coal derivatives and coal trading activities, net
 

 
(7,700
)
 

 

 
(7,700
)
Asset impairment and mine closure costs
 
20,482

 

 

 

 
20,482

Selling, general and administrative expenses
 
43,903

 
20,763

 
2,845

 

 
67,511

Other operating income, net
 
(7,009
)
 
(2,963
)
 
(1,109
)
 

 
(11,081
)
 
 
64,968

 
1,524,690

 
1,754

 

 
1,591,412

Income from investment in subsidiaries
 
19,492

 

 

 
(19,492
)
 

Loss from operations
 
(45,476
)
 
(20,988
)
 
(1,754
)
 
(19,492
)
 
(87,710
)
Interest expense, net:
 
 

 
 

 
 

 
 

 
 

Interest expense
 
(221,761
)
 
(12,130
)
 
(2,100
)
 
46,161

 
(189,830
)
Interest and investment income
 
16,161

 
30,998

 
3,054

 
(46,161
)
 
4,052

 
 
(205,600
)
 
18,868

 
954

 

 
(185,778
)
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations before income taxes
 
(251,076
)
 
(2,120
)
 
(800
)
 
(19,492
)
 
(273,488
)
Benefit from income taxes
 
(108,821
)
 

 

 

 
(108,821
)
Loss from continuing operations
 
(142,255
)
 
(2,120
)
 
(800
)
 
(19,492
)
 
(164,667
)
Income from discontinued operations, net of tax
 

 
22,412

 

 

 
22,412

Net income (loss)
 
$
(142,255
)
 
$
20,292

 
$
(800
)
 
$
(19,492
)
 
$
(142,255
)
Total comprehensive income (loss)
 
$
(136,721
)
 
$
20,202

 
$
(800
)
 
$
(19,402
)
 
$
(136,721
)

Condensed Consolidating Statements of Operations
Three Months Ended June 30, 2012

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

 
$
965,685

 
$

 
$

 
$
965,685

Costs, expenses and other
 
 

 
 

 
 

 
 

 
 

Cost of sales (exclusive of items shown separately below)
 
2,291

 
797,267

 

 

 
799,558

Depreciation, depletion and amortization
 
1,344

 
123,183

 
9

 

 
124,536

Amortization of acquired sales contracts, net
 

 
(4,451
)
 

 

 
(4,451
)
Change in fair value of coal derivatives and coal trading activities, net
 

 
(32,054
)
 

 

 
(32,054
)
Asset impairment and mine closure costs
 

 
525,583

 

 

 
525,583

Goodwill impairment
 

 
115,791

 

 

 
115,791

Selling, general and administrative expenses
 
21,775

 
11,895

 
1,508

 

 
35,178

Other operating income, net
 
6,471

 
(8,034
)
 

 

 
(1,563
)
 
 
31,881

 
1,529,180

 
1,517

 

 
1,562,578

Income from investment in subsidiaries
 
(553,726
)
 

 

 
553,726

 

Loss from operations
 
(585,607
)
 
(563,495
)
 
(1,517
)
 
553,726

 
(596,893
)
Interest expense, net:
 
 

 
 

 
 

 
 

 
 

Interest expense
 
(89,729
)
 
(9,143
)
 
(695
)
 
20,839

 
(78,728
)
Interest and investment income
 
6,142

 
13,832

 
1,953

 
(20,839
)
 
1,088

 
 
(83,587
)
 
4,689

 
1,258

 

 
(77,640
)
Other nonoperating expense
 
 
 
 
 
 
 
 
 
 
Net loss resulting from early retirement and refinancing of debt
 
(17,349
)
 
(1,693
)
 

 

 
(19,042
)
 
 

 

 

 

 

Loss from continuing operations before income taxes
 
(686,543
)
 
(560,499
)
 
(259
)
 
553,726

 
(693,575
)
Benefit from income taxes
 
(251,119
)
 

 

 

 
(251,119
)
Loss from continuing operations
 
(435,424
)
 
(560,499
)
 
(259
)
 
553,726

 
(442,456
)
Income from discontinued operations, net of tax
 

 
7,032

 

 

 
7,032

Net loss
 
(435,424
)
 
(553,467
)
 
(259
)
 
553,726

 
(435,424
)
Less: Net income attributable to noncontrolling interest
 
(65
)
 

 

 

 
(65
)
Net loss attributable to Arch Coal, Inc.
 
$
(435,489
)
 
$
(553,467
)
 
$
(259
)
 
$
553,726

 
$
(435,489
)
Total comprehensive loss
 
$
(438,473
)
 
$
(556,835
)
 
$
(259
)
 
$
557,094

 
$
(438,473
)







Condensed Consolidating Statements of Operations
Six Months Ended June 30, 2012

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

 
$
1,925,922

 
$

 
$

 
$
1,925,922

Costs, expenses and other
 
 
 
 
 
 
 
 
 

Cost of sales (exclusive of items shown separately below)
 
5,258

 
1,600,559

 

 

 
1,605,817

Depreciation, depletion and amortization
 
2,560

 
253,114

 
15

 

 
255,689

Amortization of acquired sales contracts, net
 

 
(18,468
)
 

 

 
(18,468
)
Change in fair value of coal derivatives and coal trading activities, net
 

 
(35,667
)
 

 

 
(35,667
)
Asset impairment and mine closure costs
 

 
525,583

 

 

 
525,583

Goodwill impairment
 

 
115,791

 

 

 
115,791

Selling, general and administrative expenses
 
40,418

 
21,533

 
4,088

 

 
66,039

Other operating income, net
 
3,360

 
(10,766
)
 
(12,360
)
 

 
(19,766
)
 
 
51,596

 
2,451,679

 
(8,257
)
 

 
2,495,018

Income from investment in subsidiaries
 
(487,046
)
 

 

 
487,046

 

Income (loss) from operations
 
(538,642
)
 
(525,757
)
 
8,257

 
487,046

 
(569,096
)
Interest expense, net:
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(171,809
)
 
(20,468
)
 
(1,733
)
 
40,510

 
(153,500
)
Interest and investment income
 
10,811

 
27,943

 
3,865

 
(40,510
)
 
2,109

 
 
(160,998
)
 
7,475

 
2,132

 

 
(151,391
)
Other non-operating expense
 
 
 
 
 
 
 
 
 
 
Net loss resulting from early retirement of ICG debt
 
(17,349
)
 
(1,693
)
 

 

 
(19,042
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
(716,989
)
 
(519,975
)
 
10,389

 
487,046

 
(739,529
)
Benefit from income taxes
 
(282,974
)
 

 

 

 
(282,974
)
Income (loss) from continuing operations
 
(434,015
)
 
(519,975
)
 
10,389

 
487,046

 
(456,555
)
Income from discontinued operations, net of tax
 

 
22,540

 

 

 
22,540

Net Income (loss)
 
(434,015
)
 
(497,435
)
 
10,389

 
487,046

 
(434,015
)
Less: Net income attributable to noncontrolling interest
 
(268
)
 

 

 

 
(268
)
Net Income (loss) attributable to Arch Coal, Inc.
 
$
(434,283
)
 
$
(497,435
)
 
$
10,389

 
$
487,046

 
$
(434,283
)
Total comprehensive income (loss)
 
$
(429,764
)
 
$
(499,359
)
 
$
10,389

 
$
488,970

 
$
(429,764
)


Condensed Consolidating Balance Sheets
June 30, 2013
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
531,805

 
$
100,447

 
$
11,953

 
$

 
$
644,205

Restricted cash
 
1,085

 

 

 

 
1,085

Short term investments
 
248,464

 

 

 

 
248,464

Receivables
 
51,720

 
25,508

 
264,005

 
(4,695
)
 
336,538

Inventories
 

 
356,653

 

 

 
356,653

Other
 
97,171

 
70,748

 
473

 

 
168,392

Total current assets
 
930,245

 
553,356

 
276,431

 
(4,695
)
 
1,755,337

 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
26,118

 
7,205,048

 
55

 

 
7,231,221

 
 
 
 
 
 
 
 
 
 
 
Investment in subsidiaries
 
8,291,665

 

 

 
(8,291,665
)
 

Intercompany receivables
 
(1,496,992
)
 
1,746,169

 
(249,177
)
 

 

Note receivable from Arch Western
 
675,000

 

 

 
(675,000
)
 

Other
 
164,358

 
579,723

 
90

 

 
744,171

Total other assets
 
7,634,031

 
2,325,892

 
(249,087
)
 
(8,966,665
)
 
744,171

Total assets
 
$
8,590,394

 
$
10,084,296

 
$
27,399

 
$
(8,971,360
)
 
$
9,730,729

 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

Accounts payable
 
$
29,870

 
$
202,495

 
$
68

 
$

 
$
232,433

Accrued expenses and other current liabilities
 
61,806

 
250,096

 
424

 
(4,695
)
 
307,631

Current maturities of debt
 
20,790

 
3,052

 

 

 
23,842

Total current liabilities
 
112,466

 
455,643

 
492

 
(4,695
)
 
563,906

Long-term debt
 
5,057,310

 
21,324

 

 

 
5,078,634

Note payable to Arch Coal
 

 
675,000

 

 
(675,000
)
 

Asset retirement obligations
 
1,685

 
413,175

 

 

 
414,860

Accrued pension benefits
 
33,759

 
33,144

 

 

 
66,903

Accrued postretirement benefits other than pension
 
14,372

 
31,986

 

 

 
46,358

Accrued workers’ compensation
 
23,601

 
55,403

 

 

 
79,004

Deferred income taxes
 
565,047

 

 

 

 
565,047

Other noncurrent liabilities
 
71,240

 
133,612

 
251

 

 
205,103

Total liabilities
 
5,879,480

 
1,819,287

 
743

 
(679,695
)
 
7,019,815

Stockholders’ equity
 
2,710,914

 
8,265,009

 
26,656

 
(8,291,665
)
 
2,710,914

Total liabilities and stockholders’ equity
 
$
8,590,394

 
$
10,084,296

 
$
27,399

 
$
(8,971,360
)
 
$
9,730,729






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
 
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 Statements of Cash Flows
Six Months Ended June 30, 2013

 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash provided by (used in) operating activities
 
$
(217,517
)
 
$
287,055

 
$
(17,493
)
 
$

 
$
52,045

Investing Activities
 
 
 
 
 
 
 
 
 
 

Capital expenditures
 
(1,511
)
 
(167,553
)
 

 

 
(169,064
)
Minimum royalty payments
 

 
(10,162
)
 

 

 
(10,162
)
Proceeds from dispositions of property, plant and equipment
 

 
5,080

 

 

 
5,080

Proceeds from sales-leaseback transactions
 

 
34,919

 

 

 
34,919

Purchases of short term investments
 
(61,870
)
 

 

 

 
(61,870
)
Proceeds from sales of short term investments
 
47,097

 

 

 

 
47,097

Investments in and advances to affiliates
 
(3,012
)
 
(5,385
)
 

 
255

 
(8,142
)
Change in restricted cash
 
2,368

 

 

 

 
2,368

Cash used in investing activities
 
(16,928
)
 
(143,101
)
 

 
255

 
(159,774
)
Financing Activities
 
 

 
 

 
 
 
 

 
 

Contributions from parent
 

 
255

 

 
(255
)
 

Payments on term note
 
(8,250
)
 

 

 

 
(8,250
)
Payments to retire debt
 

 
(255
)
 

 

 
(255
)
Net payments on other debt
 
(11,448
)
 

 

 

 
(11,448
)
Dividends paid
 
(12,735
)
 

 

 

 
(12,735
)
Transactions with affiliates, net
 
127,370

 
(143,975
)
 
16,605

 

 

Cash provided by (used in) financing activities
 
94,937

 
(143,975
)
 
16,605

 
(255
)
 
(32,688
)
Decrease in cash and cash equivalents
 
(139,508
)
 
(21
)
 
(888
)
 

 
(140,417
)
Cash and cash equivalents, beginning of period
 
671,313

 
100,468

 
12,841

 

 
784,622

Cash and cash equivalents, end of period
 
$
531,805

 
$
100,447

 
$
11,953

 
$

 
$
644,205














Condensed Consolidating Statements of Cash Flows
Six Months Ended June 30, 2012
 
 
 
Parent/Issuer
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash provided by (used in) operating activities
 
$
(430,689
)
 
$
482,454

 
$
43,543

 
$

 
$
95,308

Investing Activities
 
 
 
 
 
 
 
 
 
 

Capital expenditures
 
(3,973
)
 
(198,100
)
 

 

 
(202,073
)
Minimum royalty payments
 

 
(8,634
)
 

 

 
(8,634
)
Proceeds from dispositions of property, plant and equipment
 

 
1,054

 
21,497

 

 
22,551

Investments in and advances to affiliates
 
(3,683
)
 
(6,992
)
 

 
1,383

 
(9,292
)
Change in restricted cash
 
4,582

 

 

 

 
4,582

Cash provided by (used in) investing activities
 
(3,074
)
 
(212,672
)
 
21,497

 
1,383

 
(192,866
)
Financing Activities
 
 

 
 

 
 
 
 

 
 

Contributions from parent
 

 
1,383

 

 
(1,383
)
 

Proceeds from issuance of term loan
 
1,386,000

 

 

 

 
1,386,000

Payments to retire debt
 

 
(452,654
)
 

 

 
(452,654
)
Net decrease in borrowings under lines of credit
 
(375,000
)
 

 
(16,300
)
 

 
(391,300
)
Net payments from other debt
 
(11,164
)
 

 

 

 
(11,164
)
Debt financing costs
 
(34,335
)
 

 
(46
)
 

 
(34,381
)
Dividends paid
 
(29,696
)
 

 

 

 
(29,696
)
Proceeds from exercise of options under incentive plans
 
5,131

 

 

 

 
5,131

Transactions with affiliates, net
 
(173,017
)
 
211,684

 
(38,667
)
 

 

Cash provided by (used in) financing activities
 
767,919

 
(239,587
)
 
(55,013
)
 
(1,383
)
 
471,936

Increase in cash and cash equivalents
 
334,156

 
30,195

 
10,027

 

 
374,378

Cash and cash equivalents, beginning of period
 
66,542

 
70,258

 
1,349

 

 
138,149

Cash and cash equivalents, end of period
 
$
400,698

 
$
100,453

 
$
11,376

 
$

 
$
512,527