Supplemental Consolidating Financial Information

Pursuant to the indentures governing Arch Coal, Inc.’s senior notes, certain wholly-owned subsidiaries of Arch Coal have fully and unconditionally guaranteed the senior notes on a joint and several basis.

Arch Coal 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.

The notes were discharged upon emergence from bankruptcy and are no longer outstanding.

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	550,305		$	—		$	—		$	550,305
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	4,927			446,104			—			(604		)	450,427
Depreciation, depletion and amortization	695			68,728			—			—			69,423
Amortization of acquired sales contracts, net	—			104			—			—			104
Change in fair value of coal derivatives and coal trading activities, net	—			488			—			—			488
Asset impairment and mine closure costs	—			46			—			—			46
Selling, general and administrative expenses	14,241			5,285			1,363			(391		)	20,498
Other operating (income) expense, net	(1,599		)	(1,001		)	(871		)	995			(2,476		)
	18,264			519,754			492			—			538,510
Income from investment in subsidiaries	45,675			—			—			(45,675		)	—
Income (loss) from operations	27,411			30,551			(492		)	(45,675		)	11,795
Interest expense, net
Interest expense (contractual interest of $101,520 for the three months ended September 30, 2016)	(68,022		)	(6,705		)	(2,238		)	30,801			(46,164		)
Interest and investment income	6,850			23,130			1,403			(30,801		)	582
	(61,172		)	16,425			(835		)	—			(45,582		)

Expenses related to proposed debt restructuring	—			—			—			—			—
Reorganization items, net	(20,904		)	—			—			—			(20,904		)
	(20,904		)	—			—			—			(20,904		)

Income (loss) from continuing operations before income taxes	(54,665		)	46,976			(1,327		)	(45,675		)	(54,691		)
Benefit from income taxes	(3,244		)	—			(26		)	—			(3,270		)
Net income (loss)	$	(51,421	)	$	46,976		$	(1,301	)	$	(45,675	)	$	(51,421	)
Total comprehensive income (loss)	$	(49,765	)	$	48,800		$	(1,301	)	$	(47,499	)	$	(49,765	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	688,544		$	—		$	—		$	688,544
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	3,211			537,471			—			(490		)	540,192
Depreciation, depletion and amortization	896			103,069			—			—			103,965
Amortization of acquired sales contracts, net	—			(1,994		)	—			—			(1,994		)
Change in fair value of coal derivatives and coal trading activities, net	—			(3,559		)	—			—			(3,559		)
Asset impairment and mine closure costs	21,292			2,099,000			—			—			2,120,292
Losses from disposed operations resulting from Patriot Coal bankruptcy	149,314			—			—			—			149,314
Selling, general and administrative expenses	18,059			6,725			1,489			(542		)	25,731
Other operating (income) expense, net	3,503			(12,343		)	(817		)	1,032			(8,625		)
	196,275			2,728,369			672			—			2,925,316
Loss from investment in subsidiaries	(2,025,900		)	—			—			2,025,900			—
Loss from operations	(2,222,175		)	(2,039,825		)	(672		)	2,025,900			(2,236,772		)
Interest expense, net
Interest expense	(120,404		)	(6,629		)	(1,199		)	28,473			(99,759		)
Interest and investment income	6,710			20,781			1,654			(28,473		)	672
	(113,694		)	14,152			455			—			(99,087		)

Expenses related to debt restructuring	(7,482		)	—			—			—			(7,482		)

Loss from continuing operations before income taxes	(2,343,351		)	(2,025,673		)	(217		)	2,025,900			(2,343,341		)
Provision for (benefit from) income taxes	(343,875		)	—			10			—			(343,865		)
Net loss	$	(1,999,476	)	$	(2,025,673	)	$	(227	)	$	2,025,900		$	(1,999,476	)
Total comprehensive loss	$	(2,000,570	)	$	(2,026,697	)	$	(227	)	$	2,026,924		$	(2,000,570	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	1,398,709		$	—		$	—		$	1,398,709
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	10,463			1,280,020			—			(1,698		)	1,288,785
Depreciation, depletion and amortization	2,188			189,393			—			—			191,581
Amortization of acquired sales contracts, net	—			(728		)	—			—			(728		)
Change in fair value of coal derivatives and coal trading activities, net	—			2,856			—			—			2,856
Asset impairment and mine closure costs	6,330			122,937			—			—			129,267
Selling, general and administrative expenses	40,738			15,936			3,770			(1,101		)	59,343
Other operating (income) expense, net	(6,151		)	(9,268		)	(2,637		)	2,799			(15,257		)
	53,568			1,601,146			1,133			—			1,655,847
Loss from investment in subsidiaries	(157,279		)	—			—			157,279			—
Loss from operations	(210,847		)	(202,437		)	(1,133		)	157,279			(257,138		)
Interest expense, net
Interest expense (contractual interest of $300,852 for the nine months ended September 30, 2016)	(200,387		)	(19,678		)	(6,779		)	90,956			(135,888		)
Interest and investment income	20,884			68,988			3,737			(90,956		)	2,653
	(179,503		)	49,310			(3,042		)	—			(133,235		)

Expenses related to proposed debt restructuring	(2,213		)	—			—			—			(2,213		)
Reorganization items, net	(46,050		)	—			—			—			(46,050		)
	(48,263		)	—			—			—			(48,263		)

Loss from continuing operations before income taxes	(438,613		)	(153,127		)	(4,175		)	157,279			(438,636		)
Benefit from income taxes	(4,603		)	—			(23		)	—			(4,626		)
Net loss	$	(434,010	)	$	(153,127	)	$	(4,152	)	$	157,279		$	(434,010	)
Total comprehensive loss	$	(433,901	)	$	(155,158	)	$	(4,152	)	$	159,310		$	(433,901	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues	$	—		$	2,010,011		$	—		$	—		$	2,010,011
Costs, expenses and other
Cost of sales (exclusive of items shown separately below)	16,589			1,654,348			—			(2,171		)	1,668,766
Depreciation, depletion and amortization	2,969			303,240			2			—			306,211
Amortization of acquired sales contracts, net	—			(7,028		)	—			—			(7,028		)
Change in fair value of coal derivatives and coal trading activities, net	—			(1,128		)	—			—			(1,128		)
Asset impairment and mine closure costs	22,517			2,116,921			—			—			2,139,438
Losses from disposed operations resulting from Patriot Coal bankruptcy	149,314			—			—			—			149,314
Selling, general and administrative expenses	50,664			19,239			4,262			(1,561		)	72,604
Other operating (income) expense, net	7,065			417			(3,350		)	3,732			7,864
	249,118			4,086,009			914			—			4,336,041
Loss from investment in subsidiaries	(2,035,313		)	—			—			2,035,313			—
Loss from operations	(2,284,431		)	(2,075,998		)	(914		)	2,035,313			(2,326,030		)
Interest expense, net
Interest expense	(357,690		)	(19,969		)	(3,601		)	82,675			(298,585		)
Interest and investment income	21,457			60,811			4,414			(82,675		)	4,007
	(336,233		)	40,842			813			—			(294,578		)

Expenses related to debt restructuring	(11,498		)	—			—			—			(11,498		)

Loss from continuing operations before income taxes	(2,632,162		)	(2,035,156		)	(101		)	2,035,313			(2,632,106		)
Provision for (benefit from) income taxes	(351,388		)	—			56			—			(351,332		)
Net loss	$	(2,280,774	)	$	(2,035,156	)	$	(157	)	$	2,035,313		$	(2,280,774	)
Total comprehensive loss	$	(2,278,048	)	$	(2,033,102	)	$	(157	)	$	2,033,259		$	(2,278,048	)

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Balance Sheets

September 30, 2016



	Parent/Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(In thousands)
Assets
Cash and cash equivalents	$	388,338		$	420	$	11,447	$	—		$	400,205
Short term investments	111,451			—		—		—			111,451
Restricted cash	—			—		81,563		—			81,563
Receivables	15,750			6,830		165,154		(4,985		)	182,749
Inventories	—			159,410		—		—			159,410
Other	21,333			20,007		2,605		—			43,945
Total current assets	536,872			186,667		260,769		(4,985		)	979,323

Property, plant and equipment, net	5,644			3,428,861		—		436			3,434,941

Investment in subsidiaries	5,958,449			—		—		(5,958,449		)	—
Intercompany receivables	—			3,713,223		—		(3,713,223		)	—
Note receivable from Arch Western	675,000			—		—		(675,000		)	—
Other	39,988			203,265		545		—			243,798
Total other assets	6,673,437			3,916,488		545		(10,346,672		)	243,798
Total assets	$	7,215,953		$	7,532,016	$	261,314	$	(10,351,221	)	$	4,658,062

Liabilities and Stockholders’ Deficit
Liabilities not subject to compromise
Accounts payable	$	37,516		$	52,410	$	40	$	—		$	89,966
Accrued expenses and other current liabilities	69,723			157,989		1,050		(4,982		)	223,780
Current maturities of debt	1,002			2,396		—		—			3,398
Total current liabilities	108,241			212,795		1,090		(4,982		)	317,144
Long-term debt	—			30,037		—		—			30,037
Intercompany payables	3,474,361			—		238,862		(3,713,223		)	—
Note payable to Arch Coal	—			675,000		—		(675,000		)	—
Asset retirement obligations	1,062			393,637		—		—			394,699
Accrued pension benefits	4,034			19,682		—		—			23,716
Accrued postretirement benefits other than pension	71,722			15,401		—		—			87,123
Accrued workers’ compensation	17,620			102,208		—		—			119,828
Other noncurrent liabilities	26,718			38,824		282		—			65,824
Total liabilities not subject to compromise	3,703,758			1,487,584		240,234		(4,393,205		)	1,038,371

Liabilities subject to compromise	5,188,722			107,063							5,295,785

Total liabilities	8,892,480			1,594,647		240,234		(4,393,205		)	6,334,156

Stockholders’ equity (deficit)	(1,676,527		)	5,937,369		21,080		(5,958,016		)	(1,676,094		)
Total liabilities and stockholders’ deficit	$	7,215,953		$	7,532,016	$	261,314	$	(10,351,221	)	$	4,658,062

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

Nine Months Ended September 30, 2016



	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash provided by (used in) operating activities	$	(186,456	)	$	198,137		$	(42,915	)	$	—	$	(31,234	)
Investing Activities
Capital expenditures	(166		)	(82,268		)	—			—		(82,434		)
Additions to prepaid royalties	—			(305		)	—			—		(305		)
Proceeds from (consideration paid for) disposals and divestitures	—			(2,921		)	—			—		(2,921		)
Purchases of marketable securities	(98,750		)	—			—			—		(98,750		)
Proceeds from sale or maturity of marketable securities and other investments	187,006			—			—			—		187,006
Investments in and advances to affiliates	—			(3,440		)	—			—		(3,440		)
Change in restricted cash	—			—			15,979			—		15,979
Cash provided by (used) in investing activities	88,090			(88,934		)	15,979			—		15,135
Financing Activities
Net payments on other debt	(4,430		)	(7,653		)	—			—		(12,083		)
Expenses related to proposed debt restructuring	(2,213		)	—			—			—		(2,213		)
Debt financing costs	(17,000		)	—			(3,181		)	—		(20,181		)
Transactions with affiliates, net	172,701			(201,558		)	28,857			—		—
Cash provided by (used in) financing activities	149,058			(209,211		)	25,676			—		(34,477		)
Increase (decrease) in cash and cash equivalents	50,692			(100,008		)	(1,260		)	—		(50,576		)
Cash and cash equivalents, beginning of period	337,646			100,428			12,707			—		450,781
Cash and cash equivalents, end of period	$	388,338		$	420		$	11,447		$	—	$	400,205

Arch Coal, Inc. and Subsidiaries

(Debtor-in-Possession)

Condensed Consolidating Statements of Cash Flows

Nine Months Ended September 30, 2015



	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash provided by (used in) operating activities	$	(353,386	)	$	279,503		$	(5,799	)	$	—	$	(79,682	)
Investing Activities
Capital expenditures	(956		)	(108,294		)	—			—		(109,250		)
Additions to prepaid royalties	—			(5,808		)	—			—		(5,808		)
Proceeds from disposals and divestitures	—			1,020			—			—		1,020
Purchases of marketable securities	(203,094		)	—			—			—		(203,094		)
Proceeds from sale or maturity of marketable securities and other investments	248,362			—			—			—		248,362
Investments in and advances to affiliates	(788		)	(7,156		)	—			—		(7,944		)
Change in restricted cash	—			—			(44,732		)	—		(44,732		)
Cash provided by (used in) investing activities	43,524			(120,238		)	(44,732		)	—		(121,446		)
Financing Activities												—
Payments on term loan	(14,625		)	—			—			—		(14,625		)
Net payments on other debt	(5,814		)	(6,378		)	—			—		(12,192		)
Expenses related to proposed debt restructuring	(11,498		)	—			—			—		(11,498		)
Transactions with affiliates, net	132,257			(182,761		)	50,504			—		—
Cash provided by (used in) financing activities	100,320			(189,139		)	50,504			—		(38,315		)
Decrease in cash and cash equivalents	(209,542		)	(29,874		)	(27		)	—		(239,443		)
Cash and cash equivalents, beginning of period	572,185			150,358			11,688			—		734,231
Cash and cash equivalents, end of period	$	362,643		$	120,484		$	11,661		$	—	$	494,788