| Schedule of Condensed Consolidating Statements of Income |
Condensed Consolidating Statements of Operations Three Months Ended March 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Revenues |
| $ | — |
|
| $ | 677,005 |
|
| $ | — |
|
| $ | — |
|
| $ | 677,005 |
| Costs, expenses and other |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Cost of sales (exclusive of items shown separately below) |
| 7,470 |
|
| 555,686 |
|
| — |
|
| (834 | ) |
| 562,322 |
| Depreciation, depletion and amortization |
| 1,060 |
|
| 103,812 |
|
| 2 |
|
| — |
|
| 104,874 |
| Amortization of acquired sales contracts, net |
| — |
|
| (3,390 | ) |
| — |
|
| — |
|
| (3,390 | ) | Change in fair value of coal derivatives and coal trading activities, net |
| — |
|
| 1,220 |
|
| — |
|
| — |
|
| 1,220 |
| Asset impairment and mine closure costs | | — |
| | — |
| | — |
| | — |
| | — |
| Selling, general and administrative expenses |
| 15,439 |
|
| 6,243 |
|
| 1,448 |
|
| (525 | ) |
| 22,605 |
| Other operating (income) expense, net |
| 3,700 |
|
| 5,278 |
|
| (1,251 | ) |
| 1,359 |
|
| 9,086 |
| |
| 27,669 |
|
| 668,849 |
|
| 199 |
|
| — |
|
| 696,717 |
| Income from investment in subsidiaries |
| 21,050 |
|
| — |
|
| — |
|
| (21,050 | ) |
| — |
| Income (Loss) from operations |
| (6,619 | ) |
| 8,156 |
|
| (199 | ) |
| (21,050 | ) |
| (19,712 | ) | Interest expense, net |
| |
|
| |
|
| |
|
| |
|
| |
| Interest expense |
| (118,056 | ) |
| (6,763 | ) |
| (1,275 | ) |
| 26,842 |
|
| (99,252 | ) | Interest and investment income |
| 8,072 |
|
| 19,774 |
|
| 1,369 |
|
| (26,842 | ) |
| 2,373 |
| |
| (109,984 | ) |
| 13,011 |
|
| 94 |
|
| — |
|
| (96,879 | ) | | | | | | | | | | | | Income (loss) from continuing operations before income taxes |
| (116,603 | ) |
| 21,167 |
|
| (105 | ) |
| (21,050 | ) |
| (116,591 | ) | Provision for (benefit from) income taxes |
| (3,408 | ) |
| — |
|
| 12 |
|
| — |
|
| (3,396 | ) | Net income (loss) |
| $ | (113,195 | ) | | $ | 21,167 |
| | $ | (117 | ) | | $ | (21,050 | ) | | $ | (113,195 | ) | Total comprehensive income (loss) |
| $ | (109,591 | ) | | $ | 24,407 |
| | $ | (117 | ) | | $ | (24,290 | ) | | $ | (109,591 | ) |
Condensed Consolidating Statements of Operations Three Months Ended March 31, 2014
| | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non- Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Revenues | | $ | — |
| | $ | 735,971 |
| | $ | — |
| | $ | — |
| | $ | 735,971 |
| Costs, expenses and other | | |
| | |
| | |
| | |
| | |
| Cost of sales (exclusive of items shown separately below) | | 3,389 |
| | 683,775 |
| | — |
| | (850 | ) | | 686,314 |
| Depreciation, depletion and amortization | | 1,472 |
| | 102,942 |
| | 9 |
| | — |
| | 104,423 |
| Amortization of acquired sales contracts, net | | — |
| | (3,696 | ) | | — |
| | — |
| | (3,696 | ) | Change in fair value of coal derivatives and coal trading activities, net | | — |
| | 914 |
| | — |
| | — |
| | 914 |
| Asset impairment and mine closure costs | | — |
| | — |
| | — |
| | — |
| | — |
| Selling, general and administrative expenses | | 19,944 |
| | 7,865 |
| | 1,803 |
| | (476 | ) | | 29,136 |
| Other operating (income) expense, net | | 1,593 |
| | (9,480 | ) | | (1,437 | ) | | 1,326 |
| | (7,998 | ) | | | 26,398 |
| | 782,320 |
| | 375 |
| | — |
| | 809,093 |
| Loss from investment in subsidiaries | | (35,347 | ) | | — |
| | — |
| | 35,347 |
| | — |
| Loss from operations | | (61,745 | ) | | (46,349 | ) | | (375 | ) | | 35,347 |
| | (73,122 | ) | Interest expense, net | | |
| | |
| | |
| | |
| | |
| Interest expense | | (113,655 | ) | | (6,324 | ) | | (1,050 | ) | | 24,558 |
| | (96,471 | ) | Interest and investment income | | 7,601 |
| | 17,651 |
| | 1,149 |
| | (24,558 | ) | | 1,843 |
| | | (106,054 | ) | | 11,327 |
| | 99 |
| | — |
| | (94,628 | ) | | |
| |
| |
| |
| |
| Income (loss) from continuing operations before income taxes | | (167,799 | ) | | (35,022 | ) | | (276 | ) | | 35,347 |
| | (167,750 | ) | Provision for (benefit from) income taxes | | (43,660 | ) | | — |
| | 49 |
| | — |
| | (43,611 | ) | Net loss | | $ | (124,139 | ) | | $ | (35,022 | ) | | $ | (325 | ) | | $ | 35,347 |
| | $ | (124,139 | ) | Total comprehensive loss | | $ | (126,769 | ) | | $ | (36,428 | ) | | $ | (325 | ) | | $ | 36,753 |
| | $ | (126,769 | ) |
|
| Schedule of Condensed Consolidating Balance Sheets |
Condensed Consolidating Balance Sheets March 31, 2015 | | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Assets | | | | |
| | |
| | |
| | |
| Cash and cash equivalents | | $ | 577,832 |
| | $ | 100,430 |
| | $ | 11,710 |
| | $ | — |
| | $ | 689,972 |
| Short term investments | | 249,518 |
| | — |
| | — |
| | — |
| | 249,518 |
| Receivables | | 10,184 |
| | 10,894 |
| | 197,321 |
| | (4,650 | ) | | 213,749 |
| Inventories | | — |
| | 240,113 |
| | — |
| | — |
| | 240,113 |
| Other | | 82,714 |
| | 44,828 |
| | 10,095 |
| | — |
| | 137,637 |
| Total current assets | | 920,248 |
| | 396,265 |
| | 219,126 |
| | (4,650 | ) | | 1,530,989 |
| | | | | | | | | | | | Property, plant and equipment, net | | 9,860 |
| | 6,361,096 |
| | — |
| | 379 |
| | 6,371,335 |
| | | | | | | | | | | | Investment in subsidiaries | | 7,487,172 |
| | — |
| | — |
| | (7,487,172 | ) | | — |
| Intercompany receivables | | — |
| | 2,139,722 |
| | — |
| | (2,139,722 | ) | | — |
| Note receivable from Arch Western | | 675,000 |
| | — |
| | — |
| | (675,000 | ) | | — |
| Other | | 125,994 |
| | 285,227 |
| | 1,395 |
| | — |
| | 412,616 |
| Total other assets | | 8,288,166 |
| | 2,424,949 |
| | 1,395 |
| | (10,301,894 | ) | | 412,616 |
| Total assets | | $ | 9,218,274 |
| | $ | 9,182,310 |
| | $ | 220,521 |
| | $ | (10,306,165 | ) | | $ | 8,314,940 |
| | | | | | | | | | | | Liabilities and Stockholders’ Equity | | |
| | |
| | |
| | |
| | |
| Accounts payable | | $ | 12,377 |
| | $ | 155,080 |
| | $ | 23 |
| | $ | — |
| | $ | 167,480 |
| Accrued expenses and other current liabilities | | 117,096 |
| | 208,275 |
| | 782 |
| | (4,650 | ) | | 321,503 |
| Current maturities of debt | | 24,645 |
| | 9,723 |
| | — |
| | — |
| | 34,368 |
| Total current liabilities | | 154,118 |
| | 373,078 |
| | 805 |
| | (4,650 | ) | | 523,351 |
| Long-term debt | | 5,081,468 |
| | 36,514 |
| | — |
| | — |
| | 5,117,982 |
| Intercompany payables | | 1,946,138 |
| | — |
| | 193,584 |
| | (2,139,722 | ) | | — |
| Note payable to Arch Coal | | — |
| | 675,000 |
| | — |
| | (675,000 | ) | | — |
| Asset retirement obligations | | 1,000 |
| | 403,844 |
| | — |
| | — |
| | 404,844 |
| Accrued pension benefits | | 5,323 |
| | 9,113 |
| | — |
| | — |
| | 14,436 |
| Accrued postretirement benefits other than pension | | 4,643 |
| | 29,810 |
| | — |
| | — |
| | 34,453 |
| Accrued workers’ compensation | | 10,046 |
| | 88,637 |
| | — |
| | — |
| | 98,683 |
| Deferred income taxes | | 419,064 |
| | — |
| | — |
| | — |
| | 419,064 |
| Other noncurrent liabilities | | 36,530 |
| | 105,069 |
| | 205 |
| | — |
| | 141,804 |
| Total liabilities | | 7,658,330 |
| | 1,721,065 |
| | 194,594 |
| | (2,819,372 | ) | | 6,754,617 |
| Stockholders’ equity | | 1,559,944 |
| | 7,461,245 |
| | 25,927 |
| | (7,486,793 | ) | | 1,560,323 |
| Total liabilities and stockholders’ equity | | $ | 9,218,274 |
| | $ | 9,182,310 |
| | $ | 220,521 |
| | $ | (10,306,165 | ) | | $ | 8,314,940 |
|
Condensed Consolidating Balance Sheets December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Assets | | |
| | |
| | |
| | |
| | |
| Cash and cash equivalents | | $ | 572,185 |
| | $ | 150,358 |
| | $ | 11,688 |
| | $ | — |
| | $ | 734,231 |
| Short term investments | | 248,954 |
| | — |
| | — |
| | — |
| | 248,954 |
| Receivables | | 9,656 |
| | 15,933 |
| | 211,043 |
| | (4,615 | ) | | 232,017 |
| Inventories | | — |
| | 190,253 |
| | — |
| | — |
| | 190,253 |
| Other | | 89,211 |
| | 41,455 |
| | 6,630 |
| | — |
| | 137,296 |
| Total current assets | | 920,006 |
| | 397,999 |
| | 229,361 |
| | (4,615 | ) | | 1,542,751 |
| | | | | | | | | | | | Property, plant and equipment, net | | 10,470 |
| | 6,442,623 |
| | 2 |
| | 363 |
| | 6,453,458 |
| | | | | | | | | | | | Investment in subsidiaries | | 7,464,221 |
| | — |
| | — |
| | (7,464,221 | ) | | — |
| Intercompany receivables | | — |
| | 2,021,110 |
| | — |
| | (2,021,110 | ) | | — |
| Note receivable from Arch Western | | 675,000 |
| | — |
| | — |
| | (675,000 | ) | | — |
| Other | | 131,884 |
| | 300,058 |
| | 1,572 |
| | — |
| | 433,514 |
| Total other assets | | 8,271,105 |
| | 2,321,168 |
| | 1,572 |
| | (10,160,331 | ) | | 433,514 |
| Total assets | | $ | 9,201,581 |
| | $ | 9,161,790 |
| | $ | 230,935 |
| | $ | (10,164,583 | ) | | $ | 8,429,723 |
| | | | | | | | | | | | Liabilities and Stockholders’ Equity | | |
| | |
| | |
| | |
| | |
| Accounts payable | | $ | 23,394 |
| | $ | 156,664 |
| | $ | 55 |
| | $ | — |
| | $ | 180,113 |
| Accrued expenses and other current liabilities | | 85,899 |
| | 220,017 |
| | 1,095 |
| | (4,615 | ) | | 302,396 |
| Current maturities of debt | | 27,625 |
| | 9,260 |
| | — |
| | — |
| | 36,885 |
| Total current liabilities | | 136,918 |
| | 385,941 |
| | 1,150 |
| | (4,615 | ) | | 519,394 |
| Long-term debt | | 5,084,839 |
| | 38,646 |
| | — |
| | — |
| | 5,123,485 |
| Intercompany payables | | 1,817,755 |
| | — |
| | 203,355 |
| | (2,021,110 | ) | | — |
| Note payable to Arch Coal | | — |
| | 675,000 |
| | — |
| | (675,000 | ) | | — |
| Asset retirement obligations | | 981 |
| | 397,915 |
| | — |
| | — |
| | 398,896 |
| Accrued pension benefits | | 5,967 |
| | 10,293 |
| | — |
| | — |
| | 16,260 |
| Accrued postretirement benefits other than pension | | 4,430 |
| | 28,238 |
| | — |
| | — |
| | 32,668 |
| Accrued workers’ compensation | | 9,172 |
| | 85,119 |
| | — |
| | — |
| | 94,291 |
| Deferred income taxes | | 422,809 |
| | — |
| | — |
| | — |
| | 422,809 |
| Other noncurrent liabilities | | 50,919 |
| | 102,461 |
| | 386 |
| | — |
| | 153,766 |
| Total liabilities | | 7,533,790 |
| | 1,723,613 |
| | 204,891 |
| | (2,700,725 | ) | | 6,761,569 |
| Stockholders’ equity | | 1,667,791 |
| | 7,438,177 |
| | 26,044 |
| | (7,463,858 | ) | | 1,668,154 |
| Total liabilities and stockholders’ equity | | $ | 9,201,581 |
| | $ | 9,161,790 |
| | $ | 230,935 |
| | $ | (10,164,583 | ) | | $ | 8,429,723 |
|
|
| Schedule of Condensed Consolidating Statements of Cash Flows |
Condensed Consolidating Statements of Cash Flows Three Months Ended March 31, 2015
| | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Cash provided by (used in) operating activities | | $ | (114,542 | ) | | $ | 96,944 |
| | $ | 13,325 |
| | $ | — |
| | $ | (4,273 | ) | Investing Activities | | | | | | | | | | | Capital expenditures | | (450 | ) | | (22,430 | ) | | — |
| | — |
| | (22,880 | ) | Additions to prepaid royalties | | — |
| | (213 | ) | | — |
| | — |
| | (213 | ) | Proceeds from disposals and divestitures | | — |
| | 46 |
| | — |
| | — |
| | 46 |
| Purchases of marketable securities | | (101,793 | ) | | — |
| | — |
| | — |
| | (101,793 | ) | Proceeds from sale or maturity of marketable securities and other investments | | 99,914 |
| | — |
| | — |
| | — |
| | 99,914 |
| Investments in and advances to affiliates | | — |
| | (1,843 | ) | | — |
| | — |
| | (1,843 | ) | Cash used in investing activities | | (2,329 | ) | | (24,440 | ) | | — |
| | — |
| | (26,769 | ) | Financing Activities | | |
| | |
| | | | |
| | |
| Payments on term loan | | (4,875 | ) | | — |
| | — |
| | — |
| | (4,875 | ) | Net payments on other debt | | (2,751 | ) | | (2,059 | ) | | — |
| | — |
| | (4,810 | ) | Debt financing costs | | — |
| | — |
| | — |
| | — |
| | — |
| Dividends paid | | — |
| | — |
| | — |
| | — |
| | — |
| Withdrawals (deposits) of restricted cash | | — |
| | — |
| | (3,532 | ) | | — |
| | (3,532 | ) | Transactions with affiliates, net | | 130,144 |
| | (120,373 | ) | | (9,771 | ) | | — |
| | — |
| Cash provided by (used in) financing activities | | 122,518 |
| | (122,432 | ) | | (13,303 | ) | | — |
| | (13,217 | ) | Increase (decrease) in cash and cash equivalents | | 5,647 |
| | (49,928 | ) | | 22 |
| | — |
| | (44,259 | ) | Cash and cash equivalents, beginning of period | | 572,185 |
| | 150,358 |
| | 11,688 |
| | — |
| | 734,231 |
| Cash and cash equivalents, end of period | | $ | 577,832 |
| | $ | 100,430 |
| | $ | 11,710 |
| | $ | — |
| | $ | 689,972 |
|
Condensed Consolidating Statements of Cash Flows Three Months Ended March 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | Parent/Issuer | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | | | (In thousands) | Cash provided by (used in) operating activities | | $ | (150,338 | ) | | $ | 142,978 |
| | $ | (32,915 | ) | | $ | — |
| | $ | (40,275 | ) | Investing Activities | | | | | | | | | | |
| Capital expenditures | | (492 | ) | | (13,962 | ) | | — |
| | — |
| | (14,454 | ) | Additions to prepaid royalties | | — |
| | (591 | ) | | — |
| | — |
| | (591 | ) | Proceeds from disposals and divestitures | | 26,319 |
| | 1,876 |
| | — |
| | — |
| | 28,195 |
| Purchases of short term investments | | (119,176 | ) | | — |
| | — |
| | — |
| | (119,176 | ) | Proceeds from sales of short term investments | | 117,681 |
| | — |
| | — |
| | — |
| | 117,681 |
| Investments in and advances to affiliates | | (1,016 | ) | | (2,226 | ) | | — |
| | — |
| | (3,242 | ) | Cash provided by (used in) investing activities | | 23,316 |
| | (14,903 | ) | | — |
| | — |
| | 8,413 |
| Financing Activities | | |
| | |
| | | | |
| | |
| Contributions from parent | | — |
| | — |
| | — |
| | — |
| | — |
| Payments on term loan | | (4,875 | ) | | — |
| | — |
| | — |
| | (4,875 | ) | Debt financing costs | | (1,957 | ) | | — |
| | — |
| | — |
| | (1,957 | ) | Net payments on other debt | | (4,521 | ) | | — |
| | — |
| | — |
| | (4,521 | ) | Dividends paid | | (2,123 | ) | | — |
| | — |
| | — |
| | (2,123 | ) | Transactions with affiliates, net | | 95,067 |
| | (128,140 | ) | | 33,073 |
| | — |
| | — |
| Cash provided by (used in) financing activities | | 81,591 |
| | (128,140 | ) | | 33,073 |
| | — |
| | (13,476 | ) | Increase (decrease) in cash and cash equivalents | | (45,431 | ) | | (65 | ) | | 158 |
| | — |
| | (45,338 | ) | Cash and cash equivalents, beginning of period | | 799,333 |
| | 100,418 |
| | 11,348 |
| | — |
| | 911,099 |
| Cash and cash equivalents, end of period | | $ | 753,902 |
| | $ | 100,353 |
| | $ | 11,506 |
| | $ | — |
| | $ | 865,761 |
|
|