Supplemental 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 Company and the subsidiaries which are guarantors under the senior notes are Debtors in the Chapter 11 Cases. The following tables present condensed consolidating financial information for (i) the Company (Debtor), (ii) the issuer of the senior notes (Debtor), (iii) the guarantors under the senior notes (Debtor), and (iv) the entities which are not guarantors under the senior notes (Arch Receivable Company, LLC and the Company’s subsidiaries outside the United States) (Non-Debtors). These tables provide substantially the same information as would be presented pursuant to the disclosure requirements of

ASC 852 with respect to condensed combined financial statements of entities in reorganization proceedings.

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	420,298		$	—		$	—		$	420,298
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	3,351			416,239			—			(548		)	419,042
Depreciation, depletion and amortization	738			57,721			—			—			58,459
Amortization of acquired sales contracts, net	—			1			—			—			1
Change in fair value of coal derivatives and coal trading activities, net	—			1,158			—			—			1,158
Asset impairment and mine closure costs	3,101			40,600			—			—			43,701
Selling, general and administrative expenses	12,959			5,268			1,135			(343		)	19,019
Other operating (income) expense, net	(3,455		)	(7,117		)	(880		)	891			(10,561		)
	16,694			513,870			255			—			530,819
Loss from investment in subsidiaries	(78,965		)	—			—			78,965			—
Loss from operations	(95,659		)	(93,572		)	(255		)	78,965			(110,521		)
Interest expense, net
Interest expense (contractual interest of $100,767 for the three months ended June 30, 2016)	(66,126		)	(6,607		)	(2,312		)	29,772			(45,273		)
Interest and investment income	6,924			22,565			1,216			(29,772		)	933
	(59,202		)	15,958			(1,096		)	—			(44,340		)

Expenses related to proposed debt restructuring	—			—			—			—			—
Reorganization items, net	(21,271		)	—			—			—			(21,271		)
	(21,271		)	—			—			—			(21,271		)

Income (loss) from continuing operations before income taxes	(176,132		)	(77,614		)	(1,351		)	78,965			(176,132		)
Benefit from income taxes	(245		)	—			—			—			(245		)
Net loss	$	(175,887	)	$	(77,614	)	$	(1,351	)	$	78,965		$	(175,887	)
Total comprehensive loss	$	(178,294	)	$	(80,467	)	$	(1,351	)	$	81,818		$	(178,294	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Three Months Ended June 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	644,462		$	—		$	—		$	644,462
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	5,908			561,191			—			(847		)	566,252
Depreciation, depletion and amortization	1,013			96,359			—			—			97,372
Amortization of acquired sales contracts, net	—			(1,644		)	—			—			(1,644		)
Change in fair value of coal derivatives and coal trading activities, net	—			1,211			—			—			1,211
Asset impairment and mine closure costs	1,225			17,921			—			—			19,146
Selling, general and administrative expenses	17,166			6,270			1,325			(493		)	24,268
Other operating (income) expense, net	(138		)	7,483			(1,282		)	1,340			7,403
	25,174			688,791			43			—			714,008
Loss from investment in subsidiaries	(30,462		)	—			—			30,462			—
Loss from operations	(55,636		)	(44,329		)	(43		)	30,462			(69,546		)
Interest expense, net
Interest expense	(119,231		)	(6,576		)	(1,127		)	27,360			(99,574		)
Interest and investment income	6,675			20,256			1,391			(27,360		)	962
	(112,556		)	13,680			264			—			(98,612		)

Expenses related to debt restructuring	(4,016		)	—			—			—			(4,016		)

Income (loss) from continuing operations before income taxes	(172,208		)	(30,649		)	221			30,462			(172,174		)
Provision for (benefit from) income taxes	(4,105		)	—			34			—			(4,071		)
Net income (loss)	$	(168,103	)	$	(30,649	)	$	187		$	30,462		$	(168,103	)
Total comprehensive income (loss)	$	(167,887	)	$	(30,811	)	$	187		$	30,624		$	(167,887	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	848,404		$	—		$	—		$	848,404
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	5,537			833,916			—			(1,095		)	838,358
Depreciation, depletion and amortization	1,494			120,664			—			—			122,158
Amortization of acquired sales contracts, net	—			(832		)	—			—			(832		)
Change in fair value of coal derivatives and coal trading activities, net	—			2,368			—			—			2,368
Asset impairment and mine closure costs	6,330			122,891			—			—			129,221
Selling, general and administrative expenses	26,497			10,651			2,407			(710		)	38,845
Other operating (income) expense, net	(4,552		)	(8,268		)	(1,766		)	1,805			(12,781		)
	35,306			1,081,390			641			—			1,117,337
Loss from investment in subsidiaries	(202,953		)	—			—			202,953			—
Loss from operations	(238,259		)	(232,986		)	(641		)	202,953			(268,933		)
Interest expense, net
Interest expense (contractual interest of $199,332 for the six months ended June 30, 2016)	(132,365		)	(12,973		)	(4,541		)	60,155			(89,724		)
Interest and investment income	14,034			45,858			2,334			(60,155		)	2,071
	(118,331		)	32,885			(2,207		)	—			(87,653		)

Expenses related to proposed debt restructuring	(2,213		)	—			—			—			(2,213		)
Reorganization items, net	(25,146		)	—			—			—			(25,146		)
	(27,359		)	—			—			—			(27,359		)

Loss from continuing operations before income taxes	(383,949		)	(200,101		)	(2,848		)	202,953			(383,945		)
Provision for (benefit from) income taxes	(1,360		)	—			4			—			(1,356		)
Net loss	$	(382,589	)	$	(200,101	)	$	(2,852	)	$	202,953		$	(382,589	)
Total comprehensive loss	$	(384,136	)	$	(203,956	)	$	(2,852	)	$	206,808		$	(384,136	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Six Months Ended June 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	1,321,467		$	—		$	—		$	1,321,467
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	13,378			1,116,877			—			(1,681		)	1,128,574
Depreciation, depletion and amortization	2,073			200,171			2			—			202,246
Amortization of acquired sales contracts, net	—			(5,034		)	—			—			(5,034		)
Change in fair value of coal derivatives and coal trading activities, net	—			2,431			—			—			2,431
Asset impairment and mine closure costs	1,225			17,921			—			—			19,146
Selling, general and administrative expenses	32,605			12,514			2,773			(1,019		)	46,873
Other operating (income) expense, net	3,562			12,760			(2,533		)	2,700			16,489
	52,843			1,357,640			242			—			1,410,725
Loss from investment in subsidiaries	(9,413		)	—			—			9,413			—
Loss from operations	(62,256		)	(36,173		)	(242		)	9,413			(89,258		)
Interest expense, net
Interest expense	(237,286		)	(13,340		)	(2,402		)	54,202			(198,826		)
Interest and investment income	14,747			40,030			2,760			(54,202		)	3,335
	(222,539		)	26,690			358			—			(195,491		)

Expenses related to debt restructuring	(4,016		)	—			—			—			(4,016		)

Income (loss) from continuing operations before income taxes	(288,811		)	(9,483		)	116			9,413			(288,765		)
Provision for (benefit from) income taxes	(7,513		)	—			46			—			(7,467		)
Net income (loss)	$	(281,298	)	$	(9,483	)	$	70		$	9,413		$	(281,298	)
Total comprehensive income (loss)	$	(277,478	)	$	(6,405	)	$	70		$	6,335		$	(277,478	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Balance Sheets

June 30, 2016



	Parent/Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	207,932		$	50,426	$	11,456	$	—		$	269,814
Short term investments	203,417			—		—		—			203,417
Restricted cash	—			—		102,236		—			102,236
Receivables	11,935			992		136,479		(4,942		)	144,464
Inventories	—			172,698		—		—			172,698
Other	22,370			26,502		2,697		—			51,569
Total current assets	445,654			250,618		252,868		(4,942		)	944,198

Property, plant and equipment, net	6,198			3,486,927		—		428			3,493,553

Investment in subsidiaries	4,648,697			—		—		(4,648,697		)	—
Intercompany receivables	—			2,269,237		—		(2,269,237		)	—
Note receivable from Arch Western	675,000			—		—		(675,000		)	—
Other	42,945			203,399		1,130		—			247,474
Total other assets	5,366,642			2,472,636		1,130		(7,592,934		)	247,474
Total assets	$	5,818,494		$	6,210,181	$	253,998	$	(7,597,448	)	$	4,685,225

Liabilities and Stockholders’ Deficit
Liabilities not subject to compromise
Accounts payable	$	28,774		$	49,237	$	32	$	—		$	78,043
Accrued expenses and other current liabilities	66,771			90,356		843		(4,942		)	153,028
Current maturities of debt	—			—		—		—			—
Total current liabilities	95,545			139,593		875		(4,942		)	231,071
Long-term debt	—			—		—		—			—
Intercompany payables	2,038,697			—		230,540		(2,269,237		)	—
Note payable to Arch Coal	—			675,000		—		(675,000		)	—
Asset retirement obligations	1,043			389,591		—		—			390,634
Accrued pension benefits	3,795			16,058		—		—			19,853
Accrued postretirement benefits other than pension	72,070			15,216		—		—			87,286
Accrued workers’ compensation	16,887			102,110		—		—			118,997
Other noncurrent liabilities	11,249			22,461		208		—			33,918
Total liabilities not subject to compromise	2,239,286			1,360,029		231,623		(2,949,179		)	881,759

Liabilities subject to compromise	5,206,626			223,830							5,430,456

Total liabilities	7,445,912			1,583,859		231,623		(2,949,179		)	6,312,215

Stockholders’ equity (deficit)	(1,627,418		)	4,626,322		22,375		(4,648,269		)	(1,626,990		)
Total liabilities and stockholders’ deficit	$	5,818,494		$	6,210,181	$	253,998	$	(7,597,448	)	$	4,685,225

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Balance Sheets

December 31, 2015



	Parent/Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	337,646		$	100,428	$	12,707	$	—		$	450,781
Short term investments	200,192			—		—		—			200,192
Restricted cash	—			—		97,542		—			97,542
Receivables	12,463			3,153		124,581		(4,430		)	135,767
Inventories	—			196,720		—		—			196,720
Other	18,160			38,794		969		—			57,923
Total current assets	568,461			339,095		235,799		(4,430		)	1,138,925

Property, plant and equipment, net	7,747			3,610,869		—		413			3,619,029

Investment in subsidiaries	4,887,905			—		—		(4,887,905		)	—
Intercompany receivables	—			2,253,312		—		(2,253,312		)	—
Note receivable from Arch Western	675,000			—		—		(675,000		)	—
Other	39,302			243,806		819		—			283,927
Total other assets	5,602,207			2,497,118		819		(7,816,217		)	283,927
Total assets	$	6,178,415		$	6,447,082	$	236,618	$	(7,820,234	)	$	5,041,881

Liabilities and Stockholders’ Deficit
Accounts payable	$	8,495		$	119,633	$	3	$	—		$	128,131
Accrued expenses and other current liabilities	162,268			170,575		1,037		(4,430		)	329,450
Current maturities of debt	5,031,603			10,750		—		—			5,042,353
Total current liabilities	5,202,366			300,958		1,040		(4,430		)	5,499,934
Long-term debt	—			30,953		—		—			30,953
Intercompany payables	2,043,308			—		210,005		(2,253,313		)	—
Note payable to Arch Coal	—			675,000		—		(675,000		)	—
Asset retirement obligations	1,005			395,654		—		—			396,659
Accrued pension benefits	12,390			14,983		—		—			27,373
Accrued postretirement benefits other than pension	79,826			19,984		—		—			99,810
Accrued workers’ compensation	24,247			88,023		—		—			112,270
Other noncurrent liabilities	59,976			58,847		348		—			119,171
Total liabilities	7,423,118			1,584,402		211,393		(2,932,743		)	6,286,170
Stockholders’ equity (deficit)	(1,244,703		)	4,862,680		25,225		(4,887,491		)	(1,244,289		)
Total liabilities and stockholders’ deficit	$	6,178,415		$	6,447,082	$	236,618	$	(7,820,234	)	$	5,041,881

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash provided by (used in) operating activities	$	(102,998	)	$	56,656		$	(13,910	)	$	—	$	(60,252	)
Investing Activities
Capital expenditures	(26		)	(74,111		)	—			—		(74,137		)
Additions to prepaid royalties	—			(217		)	—			—		(217		)
Proceeds from (consideration paid for) disposals and divestitures	—			(3,303		)	—			—		(3,303		)
Purchases of marketable securities	(98,750		)	—			—			—		(98,750		)
Proceeds from sale or maturity of marketable securities and other investments	94,589			—			—			—		94,589
Investments in and advances to affiliates	—			(2,890		)	—			—		(2,890		)
Withdrawals (deposits) of restricted cash	—			—			(4,695		)	—		(4,695		)
Cash used in investing activities	(4,187		)	(80,521		)	(4,695		)	—		(89,403		)
Financing Activities
Net payments on other debt	(4,372		)	(5,921		)	—			—		(10,293		)
Expenses related to proposed debt restructuring	(2,213		)	—			—			—		(2,213		)
Debt financing costs	(15,625		)	—			(3,181		)	—		(18,806		)
Transactions with affiliates, net	(319		)	(20,216		)	20,535			—		—
Cash provided by (used in) financing activities	(22,529		)	(26,137		)	17,354			—		(31,312		)
Decrease in cash and cash equivalents	(129,714		)	(50,002		)	(1,251		)	—		(180,967		)
Cash and cash equivalents, beginning of period	337,646			100,428			12,707			—		450,781
Cash and cash equivalents, end of period	$	207,932		$	50,426		$	11,456		$	—	$	269,814

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash provided by (used in) operating activities	$	(295,792	)	$	163,345		$	6,872		$	—	$	(125,575	)
Investing Activities
Capital expenditures	(815		)	(98,546		)	—			—		(99,361		)
Additions to prepaid royalties	—			(409		)	—			—		(409		)
Proceeds from disposals and divestitures	—			991			—			—		991
Purchases of short term investments	(161,336		)	—			—			—		(161,336		)
Proceeds from sales of short term investments	157,729			—			—			—		157,729
Investments in and advances to affiliates	(788		)	(4,350		)	—			—		(5,138		)
Change in restricted cash	—			—			(37,885		)	—		(37,885		)
Cash used in investing activities	(5,210		)	(102,314		)	(37,885		)	—		(145,409		)
Financing Activities												—
Payments on term loan	(9,750		)	—			—			—		(9,750		)
Net payments on other debt	(5,973		)	(3,853		)	—			—		(9,826		)
Expenses related to debt restructuring	(4,016		)	—			—			—		(4,016		)
Transactions with affiliates, net	116,224			(146,968		)	30,744			—		—
Cash provided by (used in) financing activities	96,485			(150,821		)	30,744			—		(23,592		)
Decrease in cash and cash equivalents	(204,517		)	(89,790		)	(269		)	—		(294,576		)
Cash and cash equivalents, beginning of period	572,185			150,358			11,688			—		734,231
Cash and cash equivalents, end of period	$	367,668		$	60,568		$	11,419		$	—	$	439,655