Delaware | 43-0921172 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer
Identification Number) |
One CityPlace Drive, Ste. 300, St. Louis, Missouri | 63141 | |
(Address of principal executive
offices)
|
(Zip code) |
Title of Each Class | Name of Each Exchange on Which Registered | |||
Common Stock, $.01 par value
|
New York Stock Exchange
Chicago Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
| market demand for coal and electricity; | |
| geologic conditions, weather and other inherent risks of coal mining that are beyond our control; | |
| competition within our industry and with producers of competing energy sources; | |
| excess production and production capacity; | |
| our ability to acquire or develop coal reserves in an economically feasible manner; | |
| inaccuracies in our estimates of our coal reserves; | |
| availability and price of mining and other industrial supplies; | |
| availability of skilled employees and other workforce factors; | |
| disruptions in the quantities of coal produced by our contract mine operators; | |
| our ability to collect payments from our customers; | |
| defects in title or the loss of a leasehold interest; | |
| railroad, barge, truck and other transportation performance and costs; | |
| our ability to successfully integrate the operations that we acquire; | |
| our ability to secure new coal supply arrangements or to renew existing coal supply arrangements; | |
| our relationships with, and other conditions affecting, our customers; | |
| the deferral of contracted shipments of coal by our customers; | |
| our ability to service our outstanding indebtedness; | |
| our ability to comply with the restrictions imposed by our credit facility and other financing arrangements; | |
| the availability and cost of surety bonds; | |
| failure by Magnum Coal Company, which we refer to as Magnum, a subsidiary of Patriot Coal Corporation, to satisfy certain below-market contracts that we guarantee; | |
| our ability to manage the market and other risks associated with certain trading and other asset optimization strategies; | |
| terrorist attacks, military action or war; | |
| our ability to obtain and renew various permits, including permits authorizing the disposition of certain mining waste; |
| existing and future legislation and regulations affecting both our coal mining operations and our customers coal usage, governmental policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulate matter or greenhouse gases; | |
| the accuracy of our estimates of reclamation and other mine closure obligations; | |
| the existence of hazardous substances or other environmental contamination on property owned or used by us; and | |
| the other factors affecting our business described below under the caption Risk Factors. |
ITEM 1.
BUSINESS.
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Actual
Estimated
Forecast
Annual Growth
Sector
2005
2010
2011
2020
2035
2009-2035
(Tons, in millions)
1,037
977
950
986
1,129
0.7
%
60
47
48
49
47
0.1
%
23
21
22
22
18
0.6
%
4
3
3
3
3
−0.2
%
16
105
n/a
1,126
1,048
1,022
1,076
1,302
1.0
%
Source:
EIA Annual Energy Outlook 2011
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Total Cost
of Property,
Plant and
Equipment
Captive
Contract
Mining
Tons Sold(2)
at December 31,
Assigned
Mining Complex
Mines(1)
Mines(1)
Equipment
Railroad
2008
2009
2010
2010
Reserves
(Million tons)
($ in millions)
(Million tons)
S
D, S
UP/BN
88.5
81.2
116.2
$
1,039.2
1,405.7
S
D, S
UP/BN
11.5
9.8
11.4
149.0
184.8
S
L
UP
0.2
0.1
0.1
22.8
14.8
U
LW, CM
UP
4.3
3.2
2.3
138.4
10.8
U
LW, CM
UP
3.3
2.8
2.9
164.3
17.1
U
LW, CM
UP
7.4
6.6
6.1
225.3
56.5
U
LW, CM
UP
5.3
4.0
4.8
466.9
63.7
S
U
L, E
NS/CSX
3.7
2.9
3.2
177.3
33.5
S(1), U(3)
U(4)
L, CM, HW
NS
2.4
1.6
1.5
144.7
29.9
U(3)
CM
NS/CSX
2.7
2.2
2.1
209.8
30.5
U
S(2)
L, LW, CM
CSX
4.3
4.4
5.1
466.9
80.9
133.6
118.8
155.7
$
3,204.6
1,928.1
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D = Dragline
UP = Union Pacific Railroad
L = Loader/truck
CSX = CSX Transportation
S = Shovel/truck
BN = Burlington Northern-Santa Fe Railway
E = Excavator/truck
NS = Norfolk Southern Railroad
LW = Longwall
CM = Continuous miner
HW = Highwall miner
(1)
Amounts in parentheses indicate the
number of captive and contract mines at the mining complex at
December 31, 2010. Captive mines are mines that we own and
operate on land owned or leased by us. Contract mines are mines
that other operators mine for us under contracts on land owned
or leased by us.
(2)
Tons of coal we purchased from
third parties that were not processed through our loadout
facilities are not included in the amounts shown in the table
above.
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development of new emergency response plans that address
post-accident communications, tracking of miners, breathable
air, lifelines, training and communication with local emergency
response personnel;
establishment of additional requirements for mine rescue teams;
notification of federal authorities in the event of certain
events;
increased penalties for violations of the applicable federal
laws and regulations; and
requirement that standards be implemented regarding the manner
in which closed areas of underground mines are sealed.
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Acid Rain.
Title IV of the Clean Air Act,
promulgated in 1990, imposed a two-phase reduction of sulfur
dioxide emissions by electric utilities. Phase II became
effective in 2000 and applies to all coal-fueled power plants
with a capacity of more than 25-megawatts. Generally, the
affected power plants have sought to comply with these
requirements by switching to lower sulfur fuels, installing
pollution control devices, reducing electricity generating
levels or purchasing or trading sulfur dioxide emissions
allowances. Although we cannot accurately predict the future
effect of this Clean Air Act provision on our operations, we
believe that implementation of Phase II has been factored
into the pricing of the coal market.
Particulate Matter.
The Clean Air Act requires
the U.S. Environmental Protection Agency, which we refer to
as EPA, to set national ambient air quality standards, which we
refer to as NAAQS, for certain pollutants associated with the
combustion of coal, including sulfur dioxide, particulate
matter, nitrogen oxides and ozone. Areas that are not in
compliance with these standards, referred to as non-attainment
areas, must take steps to reduce emissions levels. For example,
NAAQS currently exist for particulate matter measuring 10
micrometers in diameter or smaller (PM10) and for fine
particulate matter measuring 2.5 micrometers in diameter or
smaller (PM2.5). The EPA designated all or part of 225 counties
in 20 states as well as the District of Columbia as
non-attainment areas with respect to the PM2.5 NAAQS. Those
designations have been challenged. Individual states must
identify the sources of emissions and develop emission reduction
plans. These plans may be state-specific or regional in scope.
Under the Clean Air Act, individual states have up to
12 years from the date of designation to secure emissions
reductions from sources contributing to the problem. In
addition, EPA has announced that it intends to propose a
revision to the PM2.5 NAAQS in February of 2011 with a final
regulation being
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promulgated in October of 2011. Future regulation and
enforcement of the new PM2.5 standard will affect many power
plants, especially coal-fueled power plants, and all plants in
non-attainment areas.
Ozone.
Significant additional emission control
expenditures will be required at coal-fueled power plants to
meet the new NAAQS for ozone. Nitrogen oxides, which are a
byproduct of coal combustion, are classified as an ozone
precursor. As a result, emissions control requirements for new
and expanded coal-fueled power plants and industrial boilers
will continue to become more demanding in the years ahead. For
example, on March 27, 2008, EPA promulgated a new 75 parts
per billion (ppb) ozone primary NAAQS. On September 16,
2009, EPA announced that it will reconsider the new standard,
and on January 19, 2010, EPA proposed its reconsidered
NAAQS (75 Fed Reg 2938), proposing to adopt a new, more
stringent primary ambient air quality standard for ozone and to
change the way in which the secondary standard is calculated.
Should these NAAQS withstand scrutiny, additional emission
control expenditures will likely be required at coal-fueled
power plants.
NOx SIP Call.
The NOx SIP Call program was
established by the EPA in October 1998 to reduce the transport
of ozone on prevailing winds from the Midwest and South to
states in the Northeast, which said that they could not meet
federal air quality standards because of migrating pollution.
The program was designed to reduce nitrous oxide emissions by
one million tons per year in 22 eastern states and the District
of Columbia. Phase II reductions were required by May 2007.
As a result of the program, many power plants have been or will
be required to install additional emission control measures,
such as selective catalytic reduction devices. Installation of
additional emission control measures will make it more costly to
operate coal-fueled power plants, which could make coal a less
attractive fuel.
Clean Air Interstate Rule.
The EPA finalized
the Clean Air Interstate Rule, which we refer to as CAIR, in
March 2005. CAIR calls for power plants in 28 eastern states and
the District of Columbia to reduce emission levels of sulfur
dioxide and nitrous oxide pursuant to a cap and trade program
similar to the system now in effect for acid deposition control
and to that proposed by the Clean Skies Initiative. The
stringency of the cap may require some coal-fueled power plants
to install additional pollution control equipment, such as wet
scrubbers, which could decrease the demand for low-sulfur coal
at these plants and thereby potentially reduce market prices for
low-sulfur coal. Emissions are permanently capped and cannot
increase. In July 2008, in
State of North Carolina v.
EPA
and consolidated cases, the U.S. Court of Appeals
for the District of Columbia Circuit disagreed with the
EPAs reading of the Clean Air Act and vacated CAIR in its
entirety. In December 2008, the U.S. Court of Appeals for
the District of Columbia Circuit revised its remedy and remanded
the rule to the EPA. EPA proposed a revised transport rule on
August 2, 2010, (75 Fed Reg 45209) and received
thousands of comments on the proposal. The rule making is
expected to be finalized in July of 2011 and it is possible that
additional power plant controls may be required under the
replacement rule, which may affect the market for coal.
Mercury.
In February 2008, the U.S. Court
of Appeals for the District of Columbia Circuit vacated the
EPAs Clean Air Mercury Rule, which we refer to as CAMR,
and remanded it to the EPA for reconsideration. The EPA is
reviewing the court decision and evaluating its impacts. Before
the court decision, some states had either adopted CAMR or
adopted state-specific rules to regulate mercury emissions from
power plants that are more stringent than CAMR. CAMR, as
promulgated, would have permanently capped and reduced mercury
emissions from coal-fueled power plants by establishing mercury
emissions limits from new and existing coal-fueled power plants
and creating a market-based
cap-and-trade
program that was expected to reduce nationwide emissions of
mercury in two phases. Under CAMR, coal-fueled power plants
would have had until 2010 to cut mercury emission levels from 48
tons to 38 tons a year and until 2018 to bring that level down
to 15 tons, a 69% reduction. On December 24, 2009, the EPA
announced that it had recommended to the Office of Management
and Budget an Information Collection Request that would require
all US power plants with coal or oil-fired generating units to
submit emissions information. With this information the EPA
intends to propose standards for all air toxic emissions,
including mercury, for coal and oil-fired units by
March 10, 2011. The EPA hopes to make these new standards
final by November 16, 2011. Regardless of how the EPA
responds on reconsideration or how states implement their
state-specific mercury rules, rules imposing
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stricter limitations on mercury emissions from power plants will
likely be promulgated and implemented. Any such rules may
adversely affect the demand for coal.
Regional Haze.
The EPA has initiated a
regional haze program designed to protect and improve visibility
at and around national parks, national wilderness areas and
international parks, particularly those located in the southwest
and southeast United States. Under the Regional Haze Rule,
affected states were required to submit regional haze SIPs
by December 17, 2007, that, among other things, was to
identify facilities that would have to reduce emissions and
comply with stricter emission limitations. The vast majority of
states failed to submit their plans by December 17, 2007,
and EPA issued a Finding of Failure to Submit plans on
January 15, 2009 (74 Fed. Reg. 2392), which could trigger
Federal implementation plans. EPA has taken no enforcement
action against states to finalize implementation plans.
Nonetheless, this program may result in additional emissions
restrictions from new coal-fueled power plants whose operations
may impair visibility at and around federally protected areas.
This program may also require certain existing coal-fueled power
plants to install additional control measures designed to limit
haze-causing emissions, such as sulfur dioxide, nitrogen oxides,
volatile organic chemicals and particulate matter. These
limitations could affect the future market for coal.
New Source Review.
A number of pending
regulatory changes and court actions are affecting the scope of
the EPAs new source review program, which under certain
circumstances requires existing coal-fueled power plants to
install the more stringent air emissions control equipment
required of new plants. The changes to the new source review
program may impact demand for coal nationally, but as the final
form of the requirements after their revision is not yet known,
we are unable to predict the magnitude of the impact.
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Wastewater Discharge.
Section 402 of the
Clean Water Act creates a process for establishing effluent
limitations for discharges to streams that are protective of
water quality standards through the National Pollutant Discharge
Elimination System, which we refer to as the NPDES, or an
equally stringent program delegated to a state regulatory
agency. Regular monitoring, reporting and compliance with
performance standards are preconditions for the issuance and
renewal of NPDES permits that govern discharges into waters of
the United States, especially on selenium, sulfate and specific
conductance. Discharges that exceed the limits specified under
NPDES permits can lead to the imposition of penalties, and
persistent non-compliance could lead to significant penalties,
compliance costs and delays in coal production. In addition, the
imposition of future restrictions on the discharge of certain
pollutants into waters of the United States could increase the
difficulty of obtaining and complying with NPDES permits, which
could impose additional time and cost burdens on our operations.
You should see Item 3 Legal Proceedings for
more information about certain regulatory actions pertaining to
our operations.
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Dredge and Fill Permits.
Many mining
activities, such as the development of refuse impoundments,
fresh water impoundments, refuse fills, valley fills, and other
similar structures, may result in impacts to waters of the
United States, including wetlands, streams and, in certain
instances, man-made conveyances that have a hydrologic
connection to such streams or wetlands. Under the Clean Water
Act, coal companies are required to obtain a Section 404
permit from the Army Corps of Engineers, which we refer to as
the Corps, prior to conducting such mining activities. The Corps
is authorized to issue general nationwide permits
for specific categories of activities that are similar in nature
and that are determined to have minimal adverse effects on the
environment. Permits issued pursuant to Nationwide Permit 21,
which we refer to as NWP 21, generally authorize the disposal of
dredged and fill material from surface coal mining activities
into waters of the United States, subject to certain
restrictions. Since March 2007, permits under NWP 21 were
reissued for a five-year period with new provisions intended to
strengthen environmental protections. There must be appropriate
mitigation in accordance with nationwide general permit
conditions rather than less restricted state-required mitigation
requirements, and permitholders must receive explicit
authorization from the Corps before proceeding with proposed
mining activities.
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Name
Age
Position
62
Mr. Besten has served as our Senior Vice President-Strategic
Development since 2002.
41
Mr. Drexler has served as our Senior Vice President and Chief
Financial Officer since April 2008. Mr. Drexler served as our
Vice President-Finance and Accounting from March 2006 to April
2008. From March 2005 to March 2006, Mr. Drexler served as our
Director of Planning and Forecasting. Prior to March 2005, Mr.
Drexler held several other positions within our finance and
accounting department.
53
Mr. Eaves has served as our President and Chief Operating
Officer since April 2006. Mr. Eaves has also been a director
since February 2006. From 2002 to April 2006, Mr. Eaves served
as our Executive Vice President and Chief Operating Officer. Mr.
Eaves also serves on the board of directors of ADA-ES, Inc. and
CoaLogix.
56
Ms. Feldman has served as our Vice President-Human Resources
since 2003. From 1997 to 2003, Ms. Feldman was the Vice
President-Human Resources and Public Affairs of Solutia Inc.
54
Mr. Jones has served as our Senior Vice President-Law, General
Counsel and Secretary since August 2008. Mr. Jones served as
Vice President-Law, General Counsel and Secretary from 2000 to
August 2008.
50
Mr. Lang has served as our Senior Vice President-Operations
since December 2006. Mr. Lang served as President of Western
Operations from July 2005 through December 2006 and President
and General Manager of Thunder Basin Coal Company, L.L.C. from
1998 through July 2005.
58
Mr. Leer has served as our Chairman and Chief Executive Officer
since April 2006. Mr. Leer served as our President and Chief
Executive Officer from 1992 to April 2006. Mr. Leer also serves
on the board of directors of the Norfolk Southern Corporation,
USG Corp., the Business Roundtable, the BRT, the University of
the Pacific and Washington University and is past chairman of
the Coal Industry Advisory Board. Mr. Leer is a past chairman
and continues to serve on the board of directors of the Center
for Energy and Economic Development, the National Coal Council
and the National Mining Association.
56
Mr. Peugh has served as our Vice President-Business Development
since 1995.
47
Mr. Slone has served as our Vice President-Government, Investor
and Public Affairs since August 2008. Mr. Slone served as our
Vice President-Investor
Relations and Public Affairs from 2001 to August 2008.
55
Mr. Warnecke has served as our Vice President-Marketing and
Trading since August 2005. From June 2005 until March 2007, Mr.
Warnecke served as President of our Arch Coal Sales Company,
Inc. subsidiary, and from April 2004 until June 2005, Mr.
Warnecke served as Executive Vice President of Arch Coal Sales
Company, Inc. Prior to June 2004, Mr. Warnecke was Senior Vice
President-Sales, Trading and Transportation of Arch Coal Sales
Company, Inc.
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Assigned reserves
Recoverable reserves designated for mining by a specific
operation.
Btu
A measure of the energy required to raise the temperature of one
pound of water one degree of Fahrenheit.
Compliance coal
Coal which, when burned, emits 1.2 pounds or less of sulfur
dioxide per million Btus, requiring no blending or other sulfur
dioxide reduction technologies in order to comply with the
requirements of the Clean Air Act.
Continuous miner
A machine used in underground mining to cut coal from the seam
and load it onto conveyors or into shuttle cars in a continuous
operation.
Dragline
A large machine used in surface mining to remove the overburden,
or layers of earth and rock, covering a coal seam. The dragline
has a large bucket, suspended by cables from the end of a long
boom, which is able to scoop up large amounts of overburden as
it is dragged across the excavation area and redeposit the
overburden in another area.
Longwall mining
One of two major underground coal mining methods, generally
employing two rotating drums pulled mechanically back and forth
across a long face of coal.
Low-sulfur coal
Coal which, when burned, emits 1.6 pounds or less of sulfur
dioxide per million Btus.
Preparation plant
A facility used for crushing, sizing and washing coal to remove
impurities and to prepare it for use by a particular customer.
Probable reserves
Reserves for which quantity and grade and/or quality are
computed from information similar to that used for proven
reserves, but the sites for inspection, sampling and measurement
are farther apart or are otherwise less adequately spaced.
Proven reserves
Reserves for which (a) quantity is computed from dimensions
revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from the results of detailed
sampling and (b) the sites for inspection, sampling and
measurement are spaced so closely and the geologic character is
so well defined that size, shape, depth and mineral content of
reserves are well established.
Reclamation
The restoration of land and environmental values to a mining
site after the coal is extracted. The process commonly includes
recontouring or shaping the land to its approximate
original appearance, restoring topsoil and planting native grass
and ground covers.
Recoverable reserves
The amount of proven and probable reserves that can actually be
recovered from the reserve base taking into account all mining
and preparation losses involved in producing a saleable product
using existing methods and under current law.
Reserves
That part of a mineral deposit which could be economically and
legally extracted or produced at the time of the reserve
determination.
Room-and-pillar
mining
One of two major underground coal mining methods, utilizing
continuous miners creating a network of rooms within
a coal seam, leaving behind pillars of coal used to
support the roof of a mine.
Unassigned reserves
Recoverable reserves that have not yet been designated for
mining by a specific operation.
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ITEM 1A.
RISK
FACTORS.
the domestic and foreign supply and demand for coal;
the quantity and quality of coal available from competitors;
competition for production of electricity from non-coal sources,
including the price and availability of alternative fuels;
domestic air emission standards for coal-fueled power plants and
the ability of coal-fueled power plants to meet these standards
by installing scrubbers or other means;
adverse weather, climatic or other natural conditions, including
natural disasters;
domestic and foreign economic conditions, including economic
slowdowns;
legislative, regulatory and judicial developments, environmental
regulatory changes or changes in energy policy and energy
conservation measures that would adversely affect the coal
industry, such as legislation limiting carbon emissions or
providing for increased funding and incentives for alternative
energy sources;
the proximity to, capacity of and cost of transportation and
port facilities; and
market price fluctuations for sulfur dioxide emission allowances.
poor mining conditions resulting from geological, hydrologic or
other conditions that may cause instability of highwalls or
spoil piles or cause damage to nearby infrastructure or mine
personnel;
a major incident at the mine site that causes all or part of the
operations of the mine to cease for some period of time;
mining, processing and plant equipment failures and unexpected
maintenance problems;
adverse weather and natural disasters, such as heavy rains or
snow, flooding and other natural events affecting operations,
transportation or customers;
unexpected or accidental surface subsidence from underground
mining;
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accidental mine water discharges, fires, explosions or similar
mining accidents; and
competition
and/or
conflicts with other natural resource extraction activities and
production within our operating areas, such as coalbed methane
extraction or oil and gas development.
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the location, availability, quality and price of alternative
energy sources for power generation, such as natural gas, fuel
oil, nuclear, hydroelectric, wind, biomass and solar
power; and
technological developments, including those related to
alternative energy sources.
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quality of the coal;
geological and mining conditions, which may not be fully
identified by available exploration data
and/or
may
differ from our experiences in areas where we currently mine;
the percentage of coal ultimately recoverable;
the assumed effects of regulation, including the issuance of
required permits, taxes, including severance and excise taxes
and royalties, and other payments to governmental agencies;
assumptions concerning the timing for the development of the
reserves; and
assumptions concerning equipment and productivity, future coal
prices, operating costs, including for critical supplies such as
fuel, tires and explosives, capital expenditures and development
and reclamation costs.
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limiting our ability to obtain additional financing to fund
growth, such as new LBA acquisitions or other mergers and
acquisitions, working capital, capital expenditures, debt
service requirements or other cash requirements
exposing us to the risk of increased interest costs if the
underlying interest rates rise;
limiting our ability to invest operating cash flow in our
business due to existing debt service requirements;
making it more difficult to obtain surety bonds, letters of
credit or other financing, particularly during weak credit
markets;
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causing a decline in our credit ratings;
limiting our ability to compete with companies that are not as
leveraged and that may be better positioned to withstand
economic downturns;
limiting our ability to acquire new coal reserves
and/or
plant
and equipment needed to conduct operations; and
limiting our flexibility in planning for, or reacting to, and
increasing our vulnerability to, changes in our business, the
industry in which we compete and general economic and market
conditions.
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limitations on land use;
mine permitting and licensing requirements;
reclamation and restoration of mining properties after mining is
completed;
management of materials generated by mining operations;
the storage, treatment and disposal of wastes;
remediation of contaminated soil and groundwater;
air quality standards;
water pollution;
protection of human health, plant-life and wildlife, including
endangered or threatened species;
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protection of wetlands;
the discharge of materials into the environment;
the effects of mining on surface water and groundwater quality
and availability; and
the management of electrical equipment containing
polychlorinated biphenyls.
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ITEM 1B.
UNRESOLVED
STAFF COMMENTS.
ITEM 2.
PROPERTIES.
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Total
Past Reserve
Assigned
Sulfur Content
Reserve Control
Mining Method
Estimates
Recoverable
(lbs. per million Btus)
As Received
Under-
Reserves
Proven
Probable
<1.2
1.2-2.5
>2.5
Btus per lb.(1)
Leased
Owned
Surface
ground
2007
2008
1,605
1,581
24
1,514
91
8,852
1,592
13
1,605
1,476
1,733
84
50
34
74
9
1
11,337
83
1
84
89
105
64
52
12
64
11,278
64
64
71
75
175
165
10
59
111
5
12,779
168
7
77
98
176
167
1,928
1,848
80
1,711
211
6
9,397
1,907
21
1,682
246
1,812
2,080
(1)
As received Btus per lb. includes
the weight of moisture in the coal on an as sold basis.
Total
Unassigned
Sulfur Content
Recoverable
(lbs. per million Btus)
As Received
Reserve Control
Mining Method
Reserves
Proven
Probable
<1.2
1.2-2.5
>2.5
Btus per lb.(1)
Leased
Owned
Surface
Underground
489
405
84
440
49
9,567
396
93
314
175
1,353
1,041
312
1,353
8,575
1,353
1,353
73
21
52
41
32
11,454
72
1
73
45
37
8
45
11,384
45
45
193
125
68
33
122
38
12,843
137
56
29
164
364
223
141
364
11,305
57
307
2
362
2,517
1,852
665
1,912
203
402
9,623
2,060
457
1,698
819
(1)
As received Btus per lb. includes
the weight of moisture in the coal on an as sold basis.
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42
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ITEM 3.
LEGAL
PROCEEDINGS.
43
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44
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ITEM 4.
RESERVED
45
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Section 104 Citations:
Total number of
violations of mandatory health or safety standards that could
significantly and substantially contribute to the cause and
effect of a coal or other mine safety or health hazard under
section 104 of the Mine Act for which we have received a
citation from MSHA;
Section 104(b) Orders:
Total number of
orders issued under section 104(b) of the Mine Act;
Section 104(d) Citations/Orders:
Total
number of citations and orders for unwarrantable failure of the
mine operator to comply with mandatory health or safety
standards under Section 104(d) of the Mine Act;
Section 107(a) Orders:
Total number of
imminent danger orders issued under section 107(a) of the Mine
Act; and
Total Dollar Value of Proposed MSHA
Assessments:
Total dollar value of proposed
assessments from MSHA under the Mine Act.
Total Dollar Value of
Section 104
Section 104(b)
Section 10k4(d)
Section 107(a)
Proposed MSHA
Mining complex(1)
Citations
Orders
Citations/Orders
Orders
Assessments
(In thousands)(2)
$
0
$
0
$
0.1
17
1
3
1
$
0
8
1
$
10.5
6
2
$
8.3
10
1
$
22.9
$
0.1
29
2
1
22.7
36
$
52.1
50
$
69.2
$
0
(1)
MSHA assigns an identification
number to each coal mine and may or may not assign separate
identification numbers to related facilities such as preparation
plants. We are providing the information in this table by mining
complex rather than MSHA identification number because we
believe this format will be more useful to investors than
providing information based on MSHA identification numbers. For
descriptions of each of these mining operations please refer to
the descriptions under Item 1. Business, in Part I.
(2)
Amounts included under the heading
Total Dollar Value of Proposed MSHA Assessments are
the total dollar amounts for proposed assessments received from
MSHA on or before February 1, 2011 for citations and orders
occurring during the three-month period ended December 31,
2010.
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Total Dollar Value of
Section 104
Section 104(b)
Section 104(d)
Section 107(a)
Proposed MSHA
Mining complex(1)
Citations
Orders
Citations/Orders
Orders
Assessments
(In thousands)(2)
8
$
19.5
$
2.2
2
$
1.4
52
2
3
1
$
90.1
30
1
$
42.2
37
6
1
$
94.4
50
1
3
$
332.4
18
$
19.7
96
1
5
1
$
307.4
174
1
8
$
400.6
134
1
$
275.6
$
0.5
(1)
MSHA assigns an identification
number to each coal mine and may or may not assign separate
identification numbers to related facilities such as preparation
plants. We are providing the information in this table by mining
complex rather than MSHA identification number because we
believe this format will be more useful to investors than
providing information based on MSHA identification numbers. For
descriptions of each of these mining operations please refer to
the descriptions under Item 1. Business, in Part I.
(2)
Amounts included under the heading
Total Dollar Value of Proposed MSHA Assessments are
the total dollar amounts for proposed assessments received from
MSHA on or before February 1, 2011 for citations and orders
occurring during the twelve-month period ended December 31,
2010.
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77
78
79
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
2010
March 31
June 30
September 30
December 31
$
0.09
$
0.10
$
0.10
$
0.10
28.34
28.52
27.08
35.52
20.07
19.26
19.09
24.20
22.85
19.81
26.71
35.06
2009
March 31
June 30
September 30
December 31
$
0.09
$
0.09
$
0.09
$
0.09
20.63
19.94
24.10
25.86
11.77
12.52
13.01
19.41
13.37
15.37
22.13
22.25
you invested $100 in Arch Coal common stock and in each index at
the closing price on December 31, 2005;
all dividends were reinvested;
48
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annual reweighting of the peer groups; and
you continued to hold your investment through December 31,
2010.
Among Arch Coal, Inc., The S&P Midcap 400 Index and an
Industry Peer Group
Fiscal year ending December 31.
12/05
12/06
12/07
12/08
12/09
12/10
100.00
75.99
114.58
41.96
58.52
93.75
100.00
110.32
119.12
75.96
104.36
132.16
100.00
91.92
169.45
66.43
136.93
173.81
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ITEM 6.
SELECTED
FINANCIAL DATA.
Year Ended December 31
2010
2009
2008
2007
2006
(1) (2)
(3)
(4)
(5)
(Amounts in thousands, except per share data)
$
3,186,268
$
2,576,081
$
2,983,806
$
2,413,644
$
2,500,431
(8,924
)
12,056
55,093
7,292
323,984
123,714
461,270
230,631
338,095
158,857
42,169
354,330
174,929
260,931
(219
)
(378
)
$
0.98
$
0.28
$
2.47
$
1.23
$
1.83
$
0.97
$
0.28
$
2.45
$
1.21
$
1.80
$
4,880,769
$
4,840,596
$
3,978,964
$
3,594,599
$
3,320,814
207,568
55,055
46,631
(35,370
)
46,471
1,538,744
1,540,223
1,098,948
1,085,579
1,122,595
566,728
544,578
482,651
412,484
384,498
2,237,507
2,115,106
1,728,733
1,531,686
1,365,594
$
0.3900
$
0.3600
$
0.3400
$
0.2700
$
0.2200
162,605
162,441
142,833
143,158
142,179
$
697,147
$
382,980
$
679,137
$
330,810
$
308,102
400,672
321,231
292,848
242,062
208,354
314,657
323,150
497,347
488,363
623,187
500,000
570,322
326,452
(505,627
)
(196,549
)
(85,815
)
13,493
133,476
192,300
(768,819
)
63,373
54,969
48,847
38,945
31,815
162,763
126,116
139,595
135,010
134,976
156,282
119,568
133,107
126,624
126,015
6,825
7,477
6,037
8,495
10,092
(1)
In the second quarter of 2010, we
exchanged 68.4 million tons of coal reserves in the
Illinois Basin for an additional 9% ownership interest in Knight
Hawk Holdings, LLC (Knight Hawk), increasing our ownership to
42%. We recognized a pre-tax gain of $41.6 million on the
transaction, representing the difference between the fair value
and net book value of the coal reserves, adjusted for our
retained ownership interest in the reserves through the
investment in Knight Hawk.
(2)
On August 9, 2010, we issued
$500.0 million in aggregate principal amount of
7.25% senior unsecured notes due in 2020 at par. We used
the net proceeds from the offering and cash on hand to fund the
redemption on September 8, 2010 of $500.0 million
aggregate principal amount of our outstanding 6.75% senior
notes due in 2013 at a redemption price of 101.125%. We
recognized a loss on the redemption of $6.8 million.
50
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(3)
On October 1, 2009, we
purchased the Jacobs Ranch mining complex in the Powder River
Basin from Rio Tinto Energy America for a purchase price of
$768.8 million. To finance the acquisition, the Company
sold 19.55 million shares of its common stock and
$600.0 million in aggregate principal amount of senior
unsecured notes. The net proceeds received from the issuance of
common stock were $326.5 million and the net proceeds
received from the issuance of the 8.75% senior unsecured
notes were $570.3 million.
(4)
On June 29, 2007, we sold
select assets and related liabilities associated with our Mingo
Logan Ben Creek mining complex in West Virginia for
$43.5 million. We recognized a net gain of
$8.9 million in 2007 resulting from the sale.
(5)
On October 27, 2005, we
conducted a precautionary evacuation of our West Elk mine after
we detected elevated readings of combustion-related gases in an
area of the mine where we had completed mining activities but
had not yet removed final longwall equipment. We estimate that
the idling resulted in $30.0 million of lost profits during
the first quarter of 2006, in addition to the effect of the
idling and fire-fighting costs incurred during the fourth
quarter of 2005 of $33.3 million. We recognized insurance
recoveries related to the event of $41.9 million during the
year ended December 31, 2006.
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
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52
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Increase (Decrease)
Year Ended December 31
in Net Income
2010
2009
Amount
%
(Amounts in thousands, except per ton data and
percentages)
$
3,186,268
$
2,576,081
$
610,187
23.7
%
162,763
126,116
36,647
29.1
%
$
19.58
$
20.43
$
(0.85
)
(4.2
)%
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Increase (Decrease)
Year Ended December 31
in Net Income
2010
2009
$
%
(Amounts in thousands, except percentages)
$
2,395,812
$
2,070,715
$
(325,097
)
(15.7
)%
365,066
301,608
(63,458
)
(21.0
)
35,606
19,623
(15,983
)
(81.5
)
118,177
97,787
(20,390
)
(20.9
)
8,924
(12,056
)
(20,980
)
(174.0
)
(41,577
)
41,577
N/A
13,726
13,726
100.0
(19,724
)
(39,036
)
(19,312
)
(49.5
)
$
2,862,284
$
2,452,367
$
(409,917
)
(16.7
)%
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Year Ended December 31
Increase (Decrease)
2010
2009
$
%
132,350
96,083
36,267
37.8
%
$
12.06
$
12.43
$
(0.37
)
(3.0
)%
$
1.09
$
0.79
$
0.30
38.0
%
$
366,375
$
233,623
$
132,752
56.8
%
16,311
16,747
(436
)
(2.6
)%
$
29.61
$
29.11
$
0.50
1.7
%
$
3.32
$
1.55
$
1.77
114.2
%
$
138,579
$
113,192
$
25,387
22.4
%
14,102
13,286
816
6.1
%
$
68.93
$
59.58
$
9.35
15.7
%
$
13.25
$
6.22
$
7.03
113.0
%
$
283,787
$
201,736
$
82,051
40.7
%
(1)
Coal sales prices per ton exclude
certain transportation costs that we pass through to our
customers. We use these financial measures because we believe
the amounts as adjusted better represent the coal sales prices
we achieved within our operating segments. Since other companies
may calculate coal sales prices per ton differently, our
calculation may not be comparable to similarly titled measures
used by those companies. For 2010, transportation costs per ton
were $0.08 for the Powder River Basin, $3.34 for the Western
Bituminous region and $4.99 for Central Appalachia. For the
2009, transportation costs per ton were $0.11 for the Powder
River Basin, $3.18 for the Western Bituminous region and $2.89
for Central Appalachia.
(2)
Operating margin per ton sold is
calculated as coal sales revenues less cost of coal sales and
depreciation, depletion and amortization divided by tons sold.
(3)
Adjusted EBITDA is defined as net
income attributable to the Company before the effect of net
interest expense, income taxes, depreciation, depletion and
amortization and the amortization of acquired sales contracts.
Adjusted EBITDA may also be adjusted for items that may not
reflect the trend of future results. Segment Adjusted EBITDA is
reconciled to net income at the end of this Results of
Operations section.
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Decrease
Year Ended December 31
in Net Income
2010
2009
$
%
(Amounts in thousands, except percentages)
$
(142,549
)
$
(105,932
)
$
(36,617
)
(34.6
)%
2,449
7,622
(5,173
)
(67.9
)
$
(140,100
)
$
(98,310
)
$
(41,790
)
(42.5
)%
Decrease
Year Ended December 31
in Net Income
2010
2009
$
%
(Amounts in thousands, except percentages)
$
(6,776
)
$
$
(6,776
)
(100
)%
Decrease
Year Ended December 31
in Net Income
2010
2009
$
%
(Amounts in thousands, except percentages)
$
17,714
$
(16,775
)
$
(34,489
)
(205.6
)%
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Year Ended December 31
Decrease
2009
2008
Amount
%
(Amounts in thousands, except
per ton data and percentages)
$
2,576,081
$
2,983,806
$
(407,725
)
(13.7
)%
126,116
139,595
(13,479
)
(9.7
)%
$
20.43
$
21.37
$
(0.94
)
(4.4
)%
Increase (Decrease)
Year Ended December 31
in Net Income
2009
2008
$
%
(Dollars in thousands)
$
2,070,715
$
2,183,922
113,207
5.2
%
301,608
293,553
(8,055
)
(2.7
)
19,623
(705
)
(20,328
)
N/A
97,787
107,121
9,334
8.7
(12,056
)
(55,093
)
(43,037
)
(78.1
)
13,726
(13,726
)
(100.0
)
(39,036
)
(6,262
)
32,774
523.4
$
2,452,367
$
2,522,536
$
70,169
2.8
%
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Year Ended December 31
Increase (Decrease)
2009
2008
Amount
%
(Amounts in thousands, except
per ton data and percentages)
96,083
102,557
(6,474
)
(6.3
)%
$
12.43
$
11.30
$
1.13
10.0
%
$
0.79
$
1.02
$
(0.23
)
(22.5
)%
$
233,623
$
226,342
$
7,281
3.2
%
16,747
20,606
(3,859
)
(18.7
)%
$
29.11
$
27.46
$
1.65
6.0
%
$
1.55
$
5.69
$
(4.14
)
(72.8
)%
$
113,192
$
202,434
$
(89,242
)
(44.1
)%
13,286
16,432
(3,146
)
(19.1
)%
$
59.58
$
66.72
$
(7.14
)
(10.7
)%
$
6.22
$
17.53
$
(11.31
)
(64.5
)%
$
201,736
$
444,425
$
(242,689
)
(54.6
)%
(4)
Coal sales prices per ton exclude
certain transportation costs that we pass through to our
customers. We use these financial measures because we believe
the amounts as adjusted better represent the coal sales prices
we achieved within our operating segments. Since other companies
may calculate coal sales prices per ton differently, our
calculation may not be comparable to similarly titled measures
used by those companies. For the year ended December 31,
2009, transportation costs per ton were $0.11 for the Powder
River Basin, $3.18 for the Western Bituminous region and $2.89
for Central Appalachia. For the year ended December 31,
2008, transportation costs per ton were $0.03 for the Powder
River Basin, $4.54 for the Western Bituminous region and $4.02
for Central Appalachia.
(5)
Operating margin per ton is
calculated as coal sales revenues less cost of coal sales and
depreciation, depletion and amortization, including amortization
of acquired sales contracts, divided by tons sold.
58
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(6)
Adjusted EBITDA is defined as net
income attributable to the Company before the effect of net
interest expense, income taxes, depreciation, depletion and
amortization and the amortization of acquired sales contracts.
Adjusted EBITDA may also be adjusted for items that may not
reflect the trend of future results. Segment Adjusted EBITDA is
reconciled to net income at the end of this Results of
Operations section.
Decrease
Year Ended December 31
in Net Income
2009
2008
$
%
(Dollars in thousands)
$
(105,932
)
$
(76,139
)
$
(29,793
)
(39.1
)%
7,622
11,854
(4,232
)
(35.7
)
$
(98,310
)
$
(64,285
)
$
(34,025
)
(52.9
)%
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Increase
Year Ended December 31
in Net Income
2009
2008
$
%
(Dollars in thousands)
$
(16,775
)
$
41,774
$
58,549
140.2
%
Year Ended December 31
2010
2009
2008
$
788,741
$
548,551
$
873,201
(64,622
)
(89,890
)
(119,964
)
724,119
458,661
753,237
(365,066
)
(301,608
)
(293,553
)
(35,606
)
(19,623
)
705
(142,549
)
(105,932
)
(76,139
)
2,449
7,622
11,854
(6,776
)
(13,726
)
(17,714
)
16,775
(41,774
)
$
158,857
$
42,169
$
354,330
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December 31
2010
2009
(In thousands)
$
56,904
$
49,453
204,000
451,618
954,782
587,126
585,441
500,000
14,093
14,011
1,609,741
1,807,687
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62
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Year Ended December 31
2010
2009
2008
(Dollars in thousands)
$
697,147
$
382,980
$
679,137
(389,129
)
(1,130,382
)
(527,545
)
(275,563
)
737,891
(86,023
)
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Year Ended December 31
2010
2009
2008
2007
2006
2.17
x
1.26
x
4.91
x
2.37
x
3.86x
(1)
Earnings consist of income from
operations before income taxes and are adjusted to include only
distributed income from affiliates accounted for on the equity
method and fixed charges (excluding capitalized interest). Fixed
charges consist of interest incurred on indebtedness, the
portion of operating lease rentals deemed representative of the
interest factor and the amortization of debt expense.
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Payments Due by Period
2011
2012-2013
2014-2015
After 2016
Total
(Dollars in thousands)
$
190,366
$
673,063
$
177,500
$
1,302,813
$
2,343,742
31,862
53,109
37,496
18,131
140,598
60,881
82,368
44,727
69,412
257,388
86,029
119,949
135,220
134,931
476,129
149,039
16,337
17,332
48,089
230,797
$
518,177
$
944,826
$
412,275
$
1,573,376
$
3,448,654
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Workers
Reclamation
Lease
Compensation
Obligations
Obligations
Obligations
Other
Total
(Dollars in thousands)
$
406,203
$
$
$
$
406,203
213,600
50,848
12,200
25,060
301,708
50,963
14,527
65,490
66
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67
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The expected long-term rate of return on plan assets is an
assumption reflecting the average rate of earnings expected on
the funds invested or to be invested to provide for the benefits
included in the projected benefit obligation. We establish the
expected long-term rate of return at the beginning of each
fiscal year based upon historical returns and projected returns
on the underlying mix of invested assets. The pension
plans investment targets are 65% equity, 30% fixed income
securities and 5% cash. Investments are
68
Table of Contents
rebalanced on a periodic basis to approximate these targeted
guidelines. The long-term rate of return assumption used to
determine pension expense was 8.5% for 2010 and 2009. The
long-term rate of return assumptions are less than the
plans actual
life-to-date
returns. Any difference between the actual experience and the
assumed experience is recorded in other comprehensive income and
amortized into earnings in the future. The impact of lowering
the expected long-term rate of return on plan assets 0.5% for
2010 would have been an increase in expense of approximately
$1.1 million.
The discount rate represents our estimate of the interest rate
at which pension benefits could be effectively settled. Assumed
discount rates are used in the measurement of the projected,
accumulated and vested benefit obligations and the service and
interest cost components of the net periodic pension cost. In
estimating that rate, rates of return on high-quality
fixed-income debt instruments are required. We utilize a bond
portfolio model that includes bonds that are rated
AA or higher with maturities that match the expected
benefit payments under the plan. The discount rate used to
determine pension expense was 5.97% for 2010 and 6.85% for 2009.
The impact of lowering the discount rate 0.5% for 2010 would
have been an increase in expense of approximately
$3.6 million.
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ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
2011
2012
(Tons in millions)
Tons
Price
Tons
Price
98.1
$
13.52
59.4
$
13.99
7.1
10.2
17.1
$
32.13
9.9
$
35.46
3.8
$
105.28
0.2
$
99.00
6.4
$
65.97
0.3
$
58.30
1.2
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ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
ITEM 9A.
CONTROLS
AND PROCEDURES.
ITEM 9B.
OTHER
INFORMATION.
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION.
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
72
Table of Contents
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES.
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES.
73
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Signatures
Capacity
Date
Chairman and Chief Executive Officer
(Principal Executive Officer)
March 1, 2011
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
March 1, 2011
Vice President and Chief
Accounting Officer
(Principal Accounting Officer)
March 1, 2011
Director
March 1, 2011
President, Chief Operating Officer and Director
March 1, 2011
Director
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
74
Table of Contents
Signatures
Capacity
Date
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
Director
March 1, 2011
*By:
75
Table of Contents
Exhibit
Description
2
.1
Purchase and Sale Agreement, dated as of December 31, 2005,
by and between Arch Coal, Inc. and Magnum Coal Company
(incorporated herein by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on January 6, 2006).
2
.2
Amendment No. 1 to the Purchase and Sale Agreement, dated
as of February 7, 2006, by and between Arch Coal, Inc. and
Magnum Coal Company (incorporated by reference to
Exhibit 2.1 to the registrants Annual Report on
Form 10-K
for the year ended December 31, 2005).
2
.3
Amendment No. 2 to the Purchase and Sale Agreement, dated
as of April 27, 2006, by and between Arch Coal, Inc. and
Magnum Coal Company (incorporated herein by reference to
Exhibit 2.1 to the registrants Quarterly Report on
Form 10-Q
for the period ended June 30, 2006).
2
.4
Amendment No. 3 to the Purchase and Sale Agreement, dated
as of August 29, 2007, by and between Arch Coal, Inc. and
Magnum Coal Company (incorporated herein by reference to
Exhibit 2.1 to the registrants Quarterly Report on
Form 10-Q
for the period ended September 30, 2007).
2
.5
Agreement, dated as of March 27, 2008, by and between Arch
Coal, Inc. and Magnum Coal Company (incorporated herein by
reference to Exhibit 2.1 to the registrants Quarterly
Report on
Form 10-Q
for the period ended March 31, 2008).
2
.6
Amendment No. 1 to Agreement, dated as of February 5,
2009, by and between Arch Coal, Inc. and Magnum Coal Company
(incorporated herein by reference to Exhibit 2.6 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 2008).
3
.1
Restated Certificate of Incorporation of Arch Coal, Inc.
(incorporated herein by reference to Exhibit 3.1 to the
registrants Current Report on
Form 8-K
filed on May 5, 2006).
3
.2
Arch Coal, Inc. Bylaws, as amended effective as of
December 5, 2008 (incorporated herein by reference to
Exhibit 3.1 to the registrants Current Report on
Form 8-K
filed on December 10, 2008).
4
.1
Indenture, dated as of June 25, 2003, by and among Arch
Western Finance, LLC, Arch Coal, Inc., Arch Western Resources,
LLC, Arch of Wyoming, LLC, Mountain Coal Company, L.L.C.,
Thunder Basin Coal Company, L.L.C. and The Bank of New York, as
trustee (incorporated herein by reference to Exhibit 4.1 to
the Registration Statement on
Form S-4
(Reg.
No. 333-107569)
filed by Arch Western Finance, LLC on August 1, 2003).
4
.2
First Supplemental Indenture dated October 22, 2004 among
Arch Western Finance, LLC, Arch Western Resources, LLC, Arch of
Wyoming, LLC, Arch Western Bituminous Group, LLC, Mountain Coal
Company, L.L.C., Thunder Basin Coal Company, L.L.C., Triton Coal
Company, LLC, and The Bank of New York, as trustee (incorporated
herein by reference to Exhibit 4.4 to the registrants
Current Report on
Form 8-K
filed on October 28, 2004).
4
.3
Indenture, dated as of July 31, 2009 by and among Arch
Coal, Inc., the subsidiary guarantors named therein and U.S.
Bank National Association, as trustee (incorporated herein by
reference to Exhibit 4.1 to the registrants Current
Report on
Form 8-K
filed on July 31, 2009).
4
.4
First Supplemental Indenture, dated as of February 8, 2010,
by and among Arch Coal, Inc., the subsidiary guarantors named
therein and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.1 to the
registrants Quarterly Report on Form 10-Q for the period
ended March 31, 2010).
4
.5
Second Supplemental Indenture, dated as of March 12, 2010,
by and among Arch Coal, Inc., the subsidiary guarantors named
therein and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.5 to the
registrants Registration Statement on
Form S-4
filed on April 7, 2010)
4
.6
Third Supplemental Indenture, dated as of May 7, 2010, by
and among Arch Coal, Inc., the subsidiary guarantors named
therein and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.3 to the
registrants Quarterly Report on
Form 10-Q
for the period ended March 31, 2010)
4
.7
Fourth Supplemental Indenture, dated December 16, 2010, by
and among Arch Coal West, LLC, Arch Coal, Inc., the subsidiary
guarantors named therein and U.S. Bank National Association, as
trustee
4
.8
Indenture, dated as of August 9, 2010, by and between Arch
Coal, Inc. and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.1 to the
registrants Current Report on
Form 8-K
filed on August 9, 2010)
4
.9
First Supplemental Indenture, dated as of August 9, 2010,
by and among Arch Coal, Inc., the subsidiary guarantors named
therein, and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.2 to the
registrants Current Report on
Form 8-K
filed on August 9, 2010)
76
Table of Contents
Exhibit
Description
4
.10
Second Supplemental Indenture, dated as of December 16,
2010, by and among Arch Coal West, LLC, Arch Coal, Inc., the
subsidiary guarantors named therein and U.S. Bank National
Association, as trustee
10
.1
Credit Agreement, dated as of December 22, 2004, by and
among Arch Coal, Inc., the Banks party thereto, PNC Bank,
National Association, as administrative agent, Citicorp USA,
Inc., JPMorgan Chase Bank, N.A., and Wachovia Bank, National
Association, as co-syndication agents, and Fleet National Bank,
as documentation agent (incorporated herein by reference to
Exhibit 99.1 to the Current Report on
Form 8-K
filed by the registrant on December 28, 2004).
10
.2
First Amendment to Credit Agreement, dated as of June 23,
2006, by and among Arch Coal, Inc., the banks party thereto,
Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and Wachovia Bank,
National Association, each in its capacity as syndication agent,
Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks
(incorporated by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on June 27, 2006).
10
.3
Second Amendment to Credit Agreement, dated as of
October 3, 2006, by and among Arch Coal, Inc., the banks
party thereto, Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and
Wachovia Bank, National Association, each in its capacity as
syndication agent, Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks
(incorporated by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on October 6, 2006).
10
.4
Third Amendment to Credit Agreement, dated as of March 6,
2009, by and among Arch Coal, Inc., the banks party thereto,
Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and Wachovia Bank,
National Association, each in its capacity as syndication agent,
Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks
(incorporated by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on March 12, 2009).
10
.5
Fourth Amendment to Credit Agreement, dated as of
August 27, 2009, by and among Arch Coal, Inc., the banks
party thereto, Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and
Wachovia Bank, National Association, each in its capacity as
syndication agent, Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks.
(incorporated by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on August 28, 2009).
10
.6
Fifth Amendment to Credit Agreement, dated as of March 19,
2010, by and among Arch Coal, Inc., the banks party thereto,
Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and Wachovia Bank,
National Association, each in its capacity as syndication agent,
Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks.
(incorporated by reference to Exhibit 10.1 to the
registrants Current Report on
Form 8-K
filed on March 23, 2010).
10
.7
Sixth Amendment to Credit Agreement, dated as of
November 24, 2010, by and among Arch Coal, Inc., the banks
party thereto, Citicorp USA, Inc., JPMorgan Chase Bank, N.A. and
Wachovia Bank, National Association, each in its capacity as
syndication agent, Bank of America, N.A. (as
successor-by-merger
to Fleet National Bank), as documentation agent, and PNC Bank,
National Association, as administrative agent for the banks.
10
.8*
Employment Agreement, dated November 10, 2006, between Arch
Coal, Inc. and Steven F. Leer (incorporated by reference to
Exhibit 10.1 to the Current Report on
Form 8-K
filed by the registrant on November 16, 2006).
10
.9*
Form of Employment Agreement for Executive Officers of Arch
Coal, Inc. (other than Steven F. Leer) (incorporated by
reference to Exhibit 10.2 to the Current Report on
Form 8-K
filed by the registrant on November 16, 2006).
10
.10
Coal Lease Agreement dated as of March 31, 1992, among
Allegheny Land Company, as lessee, and UAC and Phoenix Coal
Corporation, as lessors, and related guarantee (incorporated
herein by reference to the Current Report on
Form 8-K
filed by Ashland Coal, Inc. on April 6, 1992).
10
.11
Federal Coal Lease dated as of June 24, 1993 between the
U.S. Department of the Interior and Southern Utah Fuel Company
(incorporated herein by reference to Exhibit 10.17 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
Table of Contents
Exhibit
Description
10
.12
Federal Coal Lease between the U.S. Department of the Interior
and Utah Fuel Company (incorporated herein by reference to
Exhibit 10.18 to the registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.13
Federal Coal Lease dated as of July 19, 1997 between the
U.S. Department of the Interior and Canyon Fuel Company, LLC
(incorporated herein by reference to Exhibit 10.19 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.14
Federal Coal Lease dated as of January 24, 1996 between the
U.S. Department of the Interior and the Thunder Basin Coal
Company (incorporated herein by reference to Exhibit 10.20
to the registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.15
Federal Coal Lease Readjustment dated as of November 1,
1967 between the U.S. Department of the Interior and the Thunder
Basin Coal Company (incorporated herein by reference to
Exhibit 10.21 to the registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.16
Federal Coal Lease effective as of May 1, 1995 between the
U.S. Department of the Interior and Mountain Coal Company
(incorporated herein by reference to Exhibit 10.22 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.17
Federal Coal Lease dated as of January 1, 1999 between the
Department of the Interior and Ark Land Company (incorporated
herein by reference to Exhibit 10.23 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 1998).
10
.18
Federal Coal Lease dated as of October 1, 1999 between the
U.S. Department of the Interior and Canyon Fuel Company, LLC
(incorporated herein by reference to Exhibit 10 to the
registrants Quarterly Report on
Form 10-Q
for the quarter ended September 30, 1999).
10
.19
Federal Coal Lease effective as of March 1, 2005 by and
between the United States of America and Ark Land LT, Inc.
covering the tract of land known as Little Thunder
in Campbell County, Wyoming (incorporated by reference to
Exhibit 99.1 to the Current Report on
Form 8-K
filed by the registrant on February 10, 2005).
10
.20
Modified Coal Lease (WYW71692) executed January 1, 2003 by
and between the United States of America, through the Bureau of
Land Management, as lessor, and Triton Coal Company, LLC, as
lessee, covering a tract of land known as North
Rochelle in Campbell County, Wyoming (incorporated by
reference to Exhibit 10.24 to the registrants Annual
Report on
Form 10-K
for the year ended December 31, 2004).
10
.21
Coal Lease (WYW127221) executed January 1, 1998 by and
between the United States of America, through the Bureau of Land
Management, as lessor, and Triton Coal Company, LLC, as lessee,
covering a tract of land known as North Roundup in
Campbell County, Wyoming (incorporated by reference to
Exhibit 10.24 to the registrants Annual Report on
Form 10-K
for the year ended December 31, 2004).
10
.22
State Coal Lease executed October 1, 2004 by and between
The State of Utah, Thru School & Institutional
Trust Lands Admin, as lessor, and Ark Land Company and Arch
Coal, Inc., as lessees, covering a tract of land located in
Seiever County, Utah (incorporated by reference to
Exhibit 10.20 to the registrants Annual Report on
Form 10-K
for the year ended December 31, 2006).
10
.23
State Coal Lease executed September 1, 2000 by and between
The State of Utah, Thru School & Institutional
Trust Lands Admin, as lessor, and Canyon Fuel Company, LLC,
as lessee, for lands located in Carbon County, Utah
(incorporated by reference to Exhibit 10.21 to the
registrants Annual Report on
Form 10-K
for the year ended December 31, 2006).
10
.24
Federal Coal Lease executed September 1, 1996 by and
between the Bureau of Land Management, as lessor, and Canyon
Fuel Company, LLC, as lessee, covering a tract of land known as
The North Lease in Carbon County, Utah (incorporated
by reference to Exhibit 10.22 to the registrants
Annual Report on
Form 10-K
for the year ended December 31, 2006).
10
.25
State Coal Lease executed January 18, 2008 by and between
The State of Utah, Thru School & Institutional
Trust Lands Admin, as lessor, and Ark Land Company, as
lessee, for lands located in Emery County, Utah (incorporated by
reference to Exhibit 10.21 to the registrants Annual
Report on
Form 10-K
for the year ended December 31, 2008).
10
.26
Form of Indemnity Agreement between Arch Coal, Inc. and
Indemnitee (as defined therein) (incorporated herein by
reference to Exhibit 10.15 to the Registration Statement on
Form S-4
(Registration
No. 333-28149)
filed by the registrant on May 30, 1997).
10
.27*
Arch Coal, Inc. Incentive Compensation Plan For Executive
Officers (incorporated herein by reference to Appendix B to
the proxy statement on Schedule 14A filed by the registrant
on March 22, 2010).
Table of Contents
Exhibit
Description
10
.28*
Arch Coal, Inc. Deferred Compensation Plan (incorporated herein
by reference to Exhibit 10.3 to the registrants
Current Report on
Form 8-K
filed on December 11, 2008).
10
.29*
Arch Coal, Inc. 1997 Stock Incentive Plan (as amended and
restated on October 21, 2010) (incorporated herein by
reference to Exhibit 10.1 to the registrants Current
Report on
Form 8-K
filed on October 27, 2010).
10
.30*
Arch Mineral Corporation 1996 ERISA Forfeiture Plan
(incorporated herein by reference to Exhibit 10.20 to the
Registration Statement on
Form S-4
(Registration
No. 333-28149)
filed by the registrant on May 30, 1997).
10
.31*
Arch Coal, Inc. Outside Directors Deferred Compensation
Plan (incorporated herein by reference to Exhibit 10.4 of
the registrants Current Report on
Form 8-K
filed on December 11, 2008).
10
.32*
Arch Coal, Inc. Supplemental Retirement Plan (as amended on
December 5, 2008) (incorporated herein by reference to
Exhibit 10.2 to the registrants Current Report on
Form 8-K
filed on December 11, 2008).
10
.33
Amended and Restated Receivables Purchase Agreement, dated as of
February 24, 2020, among Arch Receivable Company, LLC, Arch
Coal Sales Company, Inc., Market Street Funding LLC, as issuer,
the financial institutions from time to time party thereto, as
LC Participants, and PNC Bank, National Association, as
Administrator on behalf of the Purchasers and as LC Bank
(incorporated herein by reference to Exhibit 10.2 to the
registrants Quarterly Report on
Form 10-Q
for the period ended March 31, 2010).
10
.34*
Form of Restricted Stock Unit Contract (incorporated herein by
reference to Exhibit 10.5 to the registrants Current
Report on
Form 8-K
filed on February 24, 2006).
10
.35*
Form of Non-Qualified Stock Option Agreement (for stock options
granted prior to February 21, 2008) (incorporated herein by
reference to Exhibit 10.35 to the registrants Annual
Report on
Form 10-K
for the year ended December 31, 2006).
10
.36*
Form of 2008 Restricted Stock Unit Contract for
Messrs. Leer and Eaves (incorporated herein by reference to
Exhibit 10.3 to the registrants Current Report on
Form 8-K
filed on February 27, 2008).
10
.37*
Form of 2008 Non-Qualified Stock Option Agreement for
Messrs. Leer and Eaves (incorporated herein by reference to
Exhibit 10.4 to the registrants Current Report on
Form 8-K
filed on February 27, 2008).
10
.38*
Form of Non-Qualified Stock Option Agreement (for stock options
granted on or after February 21, 2008) (incorporated herein
by reference to Exhibit 10.5 to the registrants
Current Report on
Form 8-K
filed on February 27, 2008).
10
.39*
Form of Performance Unit Contract (incorporated herein by
reference to Exhibit 10.2 to the registrants Current
Report on
Form 8-K
filed on February 23, 2009).
10
.40*
Form of Director Indemnity Agreement.
10
.41
First Amendment to Amended and Restated Receivables Purchase
Agreement, dated January 31, 2011, among Arch Receivable
Company, LLC, Arch Coal Sales Company, Inc. and the other
parties thereto.
12
.1
Computation of ratio of earnings to combined fixed charges and
preference dividends.
21
.1
Subsidiaries of the registrant.
23
.1
Consent of Ernst & Young LLP.
23
.2
Consent of Weir International, Inc.
24
.1
Power of Attorney.
31
.1
Rule 13a-14(a)/15d-14(a)
Certification of Steven F. Leer.
31
.2
Rule 13a-14(a)/15d-14(a)
Certification of John T. Drexler.
32
.1
Section 1350 Certification of Steven F. Leer.
32
.2
Section 1350 Certification of John T. Drexler.
101
Interactive Data File
(Form 10-K
for the year ended December 31, 2010 furnished in XBRL).
The financial information contained in the XBRL-related
documents is unaudited and unreviewed
and, in accordance with Rule 406T of
Regulation S-T,
is not deemed filed for purposes of Sections 11
and 12 of the Securities Act of 1933, as amended, and
Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to liability under these sections.
*
Denotes management contract or compensatory plan arrangements.
Table of Contents
F-2
F-4
F-5
F-6
F-7
F-8
F-9
F-50
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
John T. Drexler
Senior Vice President and Chief
Financial Officer
F-4
Table of Contents
Year Ended December 31
2010
2009
2008
(In thousands, except per share data)
$
3,186,268
$
2,576,081
$
2,983,806
2,395,812
2,070,715
2,183,922
365,066
301,608
293,553
35,606
19,623
(705
)
118,177
97,787
107,121
8,924
(12,056
)
(55,093
)
(41,577
)
13,726
(19,724
)
(39,036
)
(6,262
)
2,862,284
2,452,367
2,522,536
323,984
123,714
461,270
(142,549
)
(105,932
)
(76,139
)
2,449
7,622
11,854
(140,100
)
(98,310
)
(64,285
)
(6,776
)
(6,776
)
177,108
25,404
396,985
17,714
(16,775
)
41,774
159,394
42,179
355,211
(537
)
(10
)
(881
)
$
158,857
$
42,169
$
354,330
$
0.98
$
0.28
$
2.47
$
0.97
$
0.28
$
2.45
162,398
150,963
143,604
163,210
151,272
144,416
$
0.39
$
0.36
$
0.34
F-5
Table of Contents
F-6
Table of Contents
Three Years Ended December 31,
2010
Accumulated
Treasury
Other
Preferred
Common
Paid-In
Retained
Stock, at
Comprehensive
Stock
Stock
Capital
Earnings
Cost
Loss
Total
(In thousands, except per share data)
$
1
$
1,436
$
1,358,695
$
173,186
$
$
(1,632
)
$
1,531,686
354,330
354,330
(31,907
)
(31,907
)
(684
)
(684
)
(349
)
(349
)
1,005
1,005
(44,128
)
(44,128
)
(1,401
)
(1,401
)
354,330
(77,464
)
276,866
(48,769
)
(48,769
)
(12
)
(12
)
2
(2
)
(1
)
4
(3
)
(24
)
(1
)
(25
)
5
6,314
6,319
(53,848
)
(53,848
)
16,516
16,516
1,447
1,381,496
478,734
(53,848
)
(79,096
)
1,728,733
42,169
42,169
12,176
12,176
718
718
(86
)
(86
)
2,436
2,436
43,999
43,999
42,169
59,243
101,412
(54,969
)
(54,969
)
196
326,256
326,452
0
0
0
0
84
84
13,394
13,394
1,643
1,721,230
465,934
(53,848
)
(19,853
)
2,115,106
158,857
158,857
9,750
9,750
110
110
1,841
1,841
221
221
1,514
1,514
158,857
13,436
172,293
(63,373
)
(63,373
)
0
0
0
2
1,762
1,764
11,717
11,717
$
$
1,645
$
1,734,709
$
561,418
$
(53,848
)
$
(6,417
)
$
2,237,507
F-7
Table of Contents
Year Ended December 31
2010
2009
2008
(In thousands)
$
159,394
$
42,179
$
355,211
365,066
301,608
293,553
35,606
19,623
(705
)
34,605
29,746
36,227
11,717
13,394
12,618
9,839
7,450
4,829
(41,577
)
6,776
(7,287
)
47,794
(9,871
)
5,160
(28,518
)
(13,783
)
9,554
32,266
(41,183
)
87,807
(44,764
)
21,823
(12,405
)
(34,668
)
15,222
2,488
4,142
4,202
23,997
18,741
16,437
(813
)
(2,909
)
(528
)
7,220
(23,104
)
(14,915
)
697,147
382,980
679,137
(314,657
)
(323,150
)
(497,347
)
(768,819
)
330
825
1,135
(27,355
)
(26,755
)
(19,764
)
(46,185
)
(10,925
)
(7,466
)
(1,262
)
(4,767
)
(6,800
)
3,209
2,697
(389,129
)
(1,130,382
)
(527,545
)
500,000
584,784
(505,627
)
326,452
(53,848
)
(196,549
)
(85,815
)
13,493
82
(2,986
)
(2,907
)
(12,751
)
(29,659
)
(233
)
(63,373
)
(54,969
)
(48,847
)
1,764
84
6,319
891
(275,563
)
737,891
(86,023
)
32,455
(9,511
)
65,569
61,138
70,649
5,080
$
93,593
$
61,138
$
70,649
$
134,866
$
76,801
$
71,620
$
36,765
$
17,482
$
22,830
F-8
Table of Contents
1.
Accounting
Policies
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
2.
Property
Transactions
F-13
Table of Contents
3.
Goodwill
$
40,032
6,800
46,832
4,767
62,102
113,701
1,262
$
114,963
4.
Accumulated
Other Comprehensive Income (Loss)
Pension,
Postretirement
and Other
Accumulated
Post-
Other
Derivative
Employment
Available-for-
Comprehensive
Instruments
Benefits
Sale Securities
Loss
(In thousands)
$
280
$
(842
)
$
(1,070
)
$
(1,632
)
(71,129
)
(50,925
)
1,024
(121,030
)
25,600
18,334
(368
)
43,566
(45,249
)
(33,433
)
(414
)
(79,096
)
72,553
20,124
(136
)
92,541
(26,118
)
(7,230
)
50
(33,298
)
1,186
(20,539
)
(500
)
(19,853
)
2,711
15,406
2,877
20,994
(976
)
(5,546
)
(1,036
)
(7,558
)
$
2,921
$
(10,679
)
$
1,341
$
(6,417
)
F-14
Table of Contents
5.
Equity
Investments
Knight Hawk
DKRW
DTA
Tenaska
Total
(In thousands)
$
43,894
$
26,907
$
12,149
$
$
82,950
1,503
1,503
(2,167
)
4,467
2,300
6,366
(1,783
)
(3,575
)
1,008
48,093
25,124
14,544
87,761
(5,164
)
2,925
(2,239
)
6,674
(1,535
)
(3,393
)
1,746
49,603
23,589
14,076
87,268
77,637
9,768
87,405
(12,639
)
4,264
(8,375
)
16,649
(1,628
)
(3,868
)
11,153
$
131,250
$
21,961
$
14,472
$
9,768
$
177,451
F-15
Table of Contents
6.
Inventories
December 31
2010
2009
(In thousands)
$
115,647
$
99,161
119,969
141,615
$
235,616
$
240,776
7.
Derivative
Instruments
F-16
Table of Contents
December 31, 2010
December 31, 2009
Fair Value of Derivatives
Asset
Liability
Asset
Liability
(In thousands)
Derivatives
Derivatives
Derivatives
Derivatives
$
13,475
$
$
13,954
$
(2,432
)
2,009
(2,350
)
3,075
(6,355
)
15,484
(2,350
)
17,029
(8,787
)
34,445
(24,087
)
41,544
(31,262
)
1,139
(912
)
11,459
(1,898
)
35,584
(24,999
)
53,003
(33,160
)
51,068
(27,349
)
70,032
(41,947
)
(22,402
)
22,402
(39,227
)
39,227
$
28,666
$
(4,947
)
$
23,719
$
30,805
$
(2,720
)
$
28,085
F-17
Table of Contents
Year Ended December 31,
(In thousands)
Gain on Derivatives
Hedged Items in
Loss on Hedged Items
Derivatives used in
Used in Fair Value
Fair Value Hedge
In Fair Value Hedge
Fair Value Hedging Relationships
Hedge Relationships
Relationships
Relationships
2010
2009
2010
2009
(In thousands)
(In thousands)
$
3
$
2,586
3
Firm commitments
$
3
$
(2,586
)
3
Gain (Loss)
Recognized in
Gains (Losses)
Income (Ineffective
Gain (Loss)
Reclassified from
Portion and Amount
Derivatives used in
Recognized in OCI
OCI into Income
Excluded from
Cash Flow Hedging Relationships
(Effective Portion)
(Effective Portion)
Effectiveness Testing)
2010
2009
2010
2009
2010
2009
$
(149
)
$
10,309
$
437
2
$
(49,055
)
2
$
$
(4,714
)
(7,441
)
(1,602
)
1
(6,999
)
1
5,145
1,089
(1,202
)
2
(13,181
)
2
$
282
$
3,957
$
(2,367
)
$
(69,235
)
$
$
Derivatives Not Designated as
Hedging Instruments
Gain (Loss)
2010
2009
$
(10,991
)
3
$
9,673
3
$
4,542
4
$
4
F-18
Table of Contents
8.
Accrued
Expenses and Other Current Liabilities
December 31
2010
2009
(In thousands)
$
51,327
$
41,773
107,969
88,980
52,843
55,557
6,659
7,439
8,862
5,315
17,751
28,652
$
245,411
$
227,716
9.
Taxes
Year Ended December 31
2010
2009
2008
(In thousands)
$
34,304
$
21,295
$
24,066
2,283
864
1,027
36,587
22,159
25,093
(18,506
)
(39,492
)
35,545
(367
)
558
(18,864
)
(18,873
)
(38,934
)
16,681
$
17,714
$
(16,775
)
$
41,774
Year Ended December 31
2010
2009
2008
(In thousands)
$
61,800
$
8,888
$
138,637
(49,152
)
(29,463
)
(45,336
)
2,299
(61
)
4,060
(383
)
725
(57,973
)
3,150
3,136
2,386
$
17,714
$
(16,775
)
$
41,774
F-19
Table of Contents
December 31
2010
2009
(In thousands)
$
170,592
$
142,070
102,355
118,643
71,533
59,648
38,557
33,749
15,366
31,352
19,846
19,004
14,788
13,604
80,378
59,877
513,415
477,947
(737
)
(1,120
)
512,678
476,827
76,690
72,163
68,538
45,189
13,669
10,507
158,897
127,859
353,781
348,968
(7,775
)
(5,901
)
$
361,556
$
354,869
F-20
Table of Contents
$
4,070
122
909
(223
)
4,878
1,593
205
(6
)
6,670
1,493
85
(3,830
)
$
4,418
F-21
Table of Contents
10.
Debt and
Financing Arrangements
December 31
2010
2009
(In thousands)
$
56,904
$
49,453
204,000
451,618
954,782
587,126
585,441
500,000
14,093
14,011
1,609,741
1,807,687
70,997
267,464
$
1,538,744
$
1,540,223
F-22
Table of Contents
F-23
Table of Contents
11.
Fair
Values of Financial Instruments
Level 1 is defined as observable inputs such as quoted
prices in active markets for identical assets. Level 1
assets include
available-for-sale
equity securities and coal futures that are submitted for
clearing on the New York Mercantile Exchange.
Level 2 is defined as observable inputs other than
Level 1 prices. These include quoted prices for similar
assets or liabilities in an active market, quoted prices for
identical assets and liabilities in markets that are not active,
or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities. The Companys level 2 assets
and liabilities include commodity contracts (coal and heating
oil) with quoted prices in
over-the-counter
markets or direct broker quotes.
Level 3 is defined as unobservable inputs in which little
or no market data exists, therefore requiring an entity to
develop its own assumptions. These include the Companys
commodity option contracts
F-24
Table of Contents
(primarily coal and heating oil) valued using modeling
techniques, such as Black-Scholes, that require the use of
inputs, particularly volatility, that are rarely observable.
Fair Value at December 31, 2010
Total
Level 1
Level 2
Level 3
(In thousands)
$
8,071
$
7,236
$
$
835
28,666
2,005
17,873
8,788
$
36,737
$
9,241
$
17,873
$
9,623
$
4,947
$
$
4,507
$
440
Year Ended
December 31, 2010
(In thousands)
$
8,217
(10,356
)
593
10,729
$
9,183
12.
Asset
Retirement Obligations
F-25
Table of Contents
Year Ended December 31
2010
2009
(In thousands)
$
310,409
$
258,851
26,615
23,427
75,109
8,934
(43,709
)
(2,839
)
(3,269
)
$
343,119
$
310,409
(8,862
)
(5,315
)
$
334,257
$
305,094
13.
Accrued
Workers Compensation
F-26
Table of Contents
Year Ended December 31
2010
2009
2008
(In thousands)
$
727
$
531
$
481
675
558
449
(1,860
)
(2,879
)
(3,882
)
(458
)
(1,790
)
(2,952
)
9,263
8,904
10,277
$
8,805
$
7,114
$
7,325
December 31
2010
2009
(In thousands)
$
9,702
$
7,413
727
531
675
558
6,993
1,913
(685
)
(713
)
$
17,412
$
9,702
Year Ended December 31
2010
2009
2008
5.96
%
6.11
%
6.65
%
3.00
%
3.00
%
3.00
%
F-27
Table of Contents
December 31
2010
2009
(In thousands)
$
17,412
$
9,702
24,537
26,847
41,949
36,549
6,659
7,439
$
35,290
$
29,110
14.
Employee
Benefit Plans
F-28
Table of Contents
F-29
Table of Contents
Pension Benefits
Other Postretirement Benefits
Year Ended December 31,
2010
2009
2008
2010
2009
2008
(In thousands)
$
15,870
$
13,444
$
12,917
$
1,509
$
2,954
$
2,937
15,822
15,946
14,636
2,083
3,667
3,716
(19,392
)
(17,719
)
(17,932
)
173
193
(213
)
(2,364
)
2,161
3,458
7,130
3,967
3,213
(2,918
)
(2,897
)
(3,644
)
585
$
19,603
$
16,416
$
12,621
$
(1,690
)
$
5,885
$
6,467
*
The Company does not fund its other
postretirement benefit obligations.
Other
Pension
Postretirement
Benefits
Benefits
2010
2009
2010
2009
5.71
%
5.97
%
5.23
%
5.67
%
3.39
%
3.39
%
N/A
N/A
Pension Benefits
Other Postretirement Benefits
2010
2009
2008
2010
2009
2008
5.97
%
6.85
%
6.50
%
5.67
%
6.85%/5.68%
6.50
%
3.39
%
3.39
%
3.39
%
N/A
N/A
N/A
8.50
%
8.50
%
8.50
%
N/A
N/A
N/A
F-30
Table of Contents
Total
Level 1
Level 2
Level 3
2010
2009
2010
2009
2010
2009
2010
2009
(In thousands)
$
10,647
$
$
10,647
$
$
$
$
$
46,851
50,411
21,163
29,884
25,688
20,527
77,632
58,520
38,397
33,255
39,235
25,265
24,995
14,466
24,995
14,466
3,053
11,582
2,492
11,582
561
3,469
955
3,469
955
1,073
979
1,073
979
13,737
14,959
13,737
14,959
13,679
6,386
13,679
6,386
45,628
43,283
45,628
43,283
6,110
5,975
1,616
6,110
4,359
839
4,383
4,245
839
138
$
247,713
$
211,899
$
72,699
$
80,582
$
175,014
$
131,317
$
$
(A)
Equity securities includes
investments in 1) common stock, 2) preferred stock and
3) mutual funds. Investments in common and preferred stocks
are valued using quoted market prices multiplied by the number
of shares owned. Investments in mutual funds are valued at the
net asset value per share multiplied by the number of shares
held as of the measurement date and are traded on listed
exchanges.
(B)
U.S. government securities includes
agency and treasury debt. These investments are valued using
dealer quotes in an active market.
(C)
Non-U.S.
government securities includes debt securities issued by foreign
governments and are valued utilizing a price spread basis
valuation technique with observable sources from investment
dealers and research vendors.
(D)
U.S. government asset and mortgage
backed securities includes government-backed mortgage funds
which are valued utilizing an income approach that includes
various valuation techniques and sources such as discounted cash
flows models, benchmark yields and securities, reported trades,
issuer trades and/or other applicable data.
(E)
Corporate fixed income is primarily
comprised of corporate bonds and certain corporate asset-backed
securities that are denominated in the U.S. dollar and are
investment-grade securities. These investments are valued using
dealer quotes.
F-31
Table of Contents
(F)
State and local government
securities include different U.S. state and local municipal
bonds and asset backed securities, these investments are valued
utilizing a market approach that includes various valuation
techniques and sources such as value generation models, broker
quotes, benchmark yields and securities, reported trades, issuer
trades and/or other applicable data.
(G)
Other fixed income investments are
actively managed fixed income vehicles that are valued at the
net asset value per share multiplied by the number of shares
held as of the measurement date.
(H)
Short-term investments include
governmental agency funds, government repurchase agreements,
commingled funds, and pooled funds and mutual funds.
Governmental agency funds are valued utilizing an option
adjusted spread valuation technique and sources such as interest
rate generation processes, benchmark yields and broker quotes.
Investments in governmental repurchase agreements, commingled
funds and pooled funds and mutual funds are valued at the net
asset value per share multiplied by the number of shares held as
of the measurement date.
(I)
Other investments includes cash,
forward contracts, derivative instruments, credit default swaps,
interest rate swaps and mutual funds. Investments in interest
rate swaps are valued utilizing a market approach that includes
various valuation techniques and sources such as value
generation models, broker quotes in active and non-active
markets, benchmark yields and securities, reported trades,
issuer trades and/or other applicable data. Forward contracts
and derivative instruments are valued at their exchange listed
price or broker quote in an active market. The mutual funds are
valued at the net asset value per share multiplied by the number
of shares held as of the measurement date and are traded on
listed exchanges.
Other
Pension
Postretirement
Benefits
Benefits
(In thousands)
$
15,428
$
3,143
17,989
3,369
20,707
3,556
22,279
3,745
21,994
3,984
155,033
21,494
$
253,430
$
39,291
15.
Capital
Stock
F-32
Table of Contents
16.
Stock
Based Compensation and Other Incentive Plans
Weighted Average
Aggregate
Average
Common
Exercise
Intrinsic
Contract
Shares
Price
Value
Life
(In thousands)
(In thousands)
3,935
$
25.17
778
22.64
(155
)
11.39
(14
)
30.22
4,544
25.18
$
59,919
6.10
2,643
25.51
33,993
4.47
F-33
Table of Contents
Weighted Average
Common Shares
Grant-Date Fair Value
(In thousands)
1,899
$
12.36
778
9.43
(768
)
13.73
(8
)
9.57
1,901
10.61
Year Ended December 31
2010
2009
2008
$
9.43
$
6.63
$
21.29
2.16
%
1.75
%
2.86
%
1.99
%
2.56
%
0.6
%
57.1
%
69.3
%
45.7
%
4.5
4.5
4.7
F-34
Table of Contents
Restricted Stock
Restricted Stock Units
Weighted Average
Weighted Average
Common
Grant-Date
Common
Grant-Date
Shares
Fair Value
Shares
Fair Value
(In thousands)
(In thousands)
76
$
27.43
54
$
52.69
12
22.03
(12
)
32.66
(2
)
56.84
74
24.69
54
52.69
F-35
Table of Contents
17.
Risk
Concentrations
F-36
Table of Contents
18.
Earnings
per Common Share
Year Ended December 31
2010
2009
2008
(In thousands)
162,398
150,963
143,604
812
309
779
33
163,210
151,272
144,416
19.
Leases
Operating
Leases
Royalties
(In thousands)
$
31,862
$
31,388
28,559
14,792
24,550
15,786
22,344
18,469
15,152
18,948
18,131
69,412
$
140,598
$
168,795
F-37
Table of Contents
20.
Guarantees
F-38
Table of Contents
21.
Contingencies
22.
Segment
Information
F-39
Table of Contents
Corporate,
Other and
PRB
WBIT
CAPP
Eliminations
Consolidated
(In thousands)
$
1,606,236
$
537,542
$
1,042,490
$
$
3,186,268
146,555
58,082
193,943
(74,596
)
323,984
2,295,786
677,611
706,624
1,200,748
4,880,769
185,218
80,497
97,764
1,587
365,066
35,606
35,606
38,142
65,470
70,839
140,206
314,657
$
1,205,492
$
540,694
$
829,895
$
$
2,576,081
82,341
29,722
105,241
(93,590
)
123,714
2,421,917
687,873
734,309
996,497
4,840,596
127,378
83,781
88,409
2,040
301,608
19,934
(311
)
19,623
58,275
67,299
48,673
148,903
323,150
$
1,162,056
$
659,389
$
1,162,361
$
$
2,983,806
109,032
121,261
296,699
(65,722
)
461,270
1,577,260
685,383
782,951
933,370
3,978,964
117,417
82,215
92,189
1,732
293,553
336
(1,041
)
(705
)
123,909
162,698
81,860
128,880
497,347
Year Ended December 31
2010
2009
2008
(In thousands)
$
323,984
$
123,714
$
461,270
(142,549
)
(105,932
)
(76,139
)
2,449
7,622
11,854
(6,776
)
$
177,108
$
25,404
$
396,985
F-40
Table of Contents
23.
Quarterly
Financial Information
(Unaudited)
March 31
June 30
September 30
December 31
(a)
(b)
(In thousands, except per share data)
$
711,874
$
764,295
$
874,705
$
835,394
61,852
100,461
119,957
107,514
32,200
106,499
98,347
86,938
(1,770
)
66,274
46,859
48,031
(0.01
)
0.41
0.29
0.29
(0.01
)
0.41
0.29
0.29
March 31
June 30
September 30
December 31
(c)(d)
(c)
(c)
(c)
(In thousands, except per share data)
$
681,040
$
554,612
$
614,957
$
725,472
60,873
18,614
54,199
50,449
38,572
7,309
48,338
29,495
30,572
(15,161
)
25,216
1,552
0.21
(0.11
)
0.16
0.01
0.21
(0.11
)
0.16
0.01
(a)
In the second quarter of 2010, the
Company exchanged 68.4 million tons of coal reserves in the
Illinois Basin for an additional 9% ownership interest in Knight
Hawk. The Company recognized a gain of $41.6 million on the
transaction.
(b)
The Companys Dugout Canyon
mine in Carbon County, Utah suspended operations on
April 29, 2010 after an increase in carbon monoxide levels
resulted from a heating event in a previously mined area. After
permanently sealing the area, full coal production resumed on
May 21, 2010. On June 22, 2010, an ignition event at
the longwall resulted in a second evacuation of all underground
employees at the mine. All employees were safely evacuated in
both events. The resumption of mining required rendering the
mines atmosphere inert, ventilating the longwall area,
determining the cause of the ignition, implementing preventive
measures, and securing an MSHA-approved longwall ventilation
plan. The longwall system resumed production at normalized
levels by the end of September. In 2009, we shipped an average
of 0.8 million tons per quarter from the Dugout Canyon
mine. As a result of the outages in the second and third
quarters, we shipped 0.6 million in the second quarter of
2010 and 0.2 million in the third quarter of 2010 from the
Dugout Canyon mine.
(c)
The Jacobs Ranch mining complex was
acquired on October 1, 2009 for $768.8 million. We
expensed costs related to the acquisition of $3.4 million,
$3.0 million, $0.8 million, and $6.5 million in
the first, second, third and fourth quarters of 2009,
respectively.
(d)
In the first quarter of 2009, the
Company recognized income of $6.8 million to adjust its estimate
of black lung excise tax refunds.
24.
Supplemental
Condensed Consolidating Financial Information
F-41
Table of Contents
Year Ended December 31, 2010
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
$
1,137,980
$
2,048,288
$
$
3,186,268
11,526
797,917
1,679,872
(93,503
)
2,395,812
2,933
194,847
167,286
365,066
35,606
35,606
79,580
7,355
38,496
(7,254
)
118,177
8,924
8,924
(41,577
)
(41,577
)
(10,259
)
(115,994
)
5,772
100,757
(19,724
)
83,780
851,472
1,927,032
2,862,284
393,366
(393,366
)
309,586
286,508
121,256
(393,366
)
323,984
(143,606
)
(2,763
)
(64,463
)
68,283
(142,549
)
11,128
456
59,148
(68,283
)
2,449
(132,478
)
(2,307
)
(5,315
)
(140,100
)
(6,776
)
(6,776
)
(6,776
)
(6,776
)
177,108
284,201
109,165
(393,366
)
177,108
17,714
17,714
159,394
284,201
109,165
(393,366
)
159,394
(537
)
(537
)
$
158,857
$
284,201
$
109,165
$
(393,366
)
$
158,857
F-42
Table of Contents
Year Ended December 31, 2009
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
$
924,692
$
1,651,389
$
$
2,576,081
7,481
713,782
1,398,663
(49,211
)
2,070,715
3,678
138,125
159,805
301,608
19,623
19,623
49,672
7,504
46,563
(5,952
)
97,787
(12,056
)
(12,056
)
13,726
13,726
(12,909
)
(85,460
)
4,170
55,163
(39,036
)
61,648
761,895
1,628,824
2,452,367
165,183
(165,183
)
103,535
162,797
22,565
(165,183
)
123,714
(92,371
)
(2,442
)
(70,668
)
59,549
(105,932
)
14,240
720
52,211
(59,549
)
7,622
(78,131
)
(1,722
)
(18,457
)
(98,310
)
25,404
161,075
4,108
(165,183
)
25,404
(16,775
)
(16,775
)
42,179
161,075
4,108
(165,183
)
42,179
(10
)
(10
)
$
42,169
$
161,075
$
4,108
$
(165,183
)
$
42,169
F-43
Table of Contents
Year Ended December 31, 2008
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Eliminations
Consolidated
(In thousands)
$
937
$
1,224,861
$
1,758,008
$
$
2,983,806
3,905
821,959
1,395,176
(37,118
)
2,183,922
3,122
135,012
155,419
293,553
(705
)
(705
)
71,094
8,662
34,502
(7,137
)
107,121
(55,093
)
(55,093
)
(10,950
)
(49,706
)
10,139
44,255
(6,262
)
67,171
860,834
1,594,531
2,522,536
535,452
(535,452
)
469,218
364,027
163,477
(535,452
)
461,270
(103,642
)
(5,493
)
(77,757
)
110,753
(76,139
)
31,409
3,735
87,463
(110,753
)
11,854
(72,233
)
(1,758
)
9,706
(64,285
)
396,985
362,269
173,183
(535,452
)
396,985
41,774
41,774
355,211
362,269
173,183
(535,452
)
355,211
(881
)
(881
)
$
354,330
$
362,269
$
173,183
$
(535,452
)
$
354,330
F-44
Table of Contents
December 31, 2010
F-45
Table of Contents
December 31, 2009
F-46
Table of Contents
Year Ended December 31, 2010
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
(238,736
)
$
503,766
$
432,117
$
697,147
(4,814
)
(198,243
)
(111,600
)
(314,657
)
251
79
330
(24,381
)
(2,974
)
(27,355
)
(40,421
)
(5,764
)
(46,185
)
(1,262
)
(1,262
)
(46,497
)
(228,137
)
(114,495
)
(389,129
)
500,000
500,000
(505,627
)
(505,627
)
(120,000
)
(76,549
)
(196,549
)
82
82
(12,022
)
(729
)
(12,751
)
(63,373
)
(63,373
)
1,764
1,764
891
891
(61,760
)
(275,629
)
337,389
244,691
(275,629
)
(244,625
)
(275,563
)
(40,542
)
72,997
32,455
54,255
64
6,819
61,138
$
13,713
$
64
$
79,816
$
93,593
F-47
Table of Contents
Year Ended December 31, 2009
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
(168,427
)
$
338,956
$
212,451
$
382,980
(2,940
)
(194,756
)
(125,454
)
(323,150
)
(768,819
)
(768,819
)
734
91
825
(23,991
)
(2,764
)
(26,755
)
(8,000
)
(2,925
)
(10,925
)
(4,767
)
(4,767
)
3,209
3,209
(784,526
)
(220,938
)
(124,918
)
(1,130,382
)
584,784
584,784
326,452
326,452
(85,000
)
(815
)
(85,815
)
(2,986
)
(2,986
)
(29,456
)
(203
)
(29,659
)
(54,969
)
(54,969
)
84
84
200,562
(118,015
)
(82,547
)
939,471
(118,015
)
(83,565
)
737,891
(13,482
)
3
3,968
(9,511
)
67,737
61
2,851
70,649
$
54,255
$
64
$
6,819
$
61,138
F-48
Table of Contents
Year Ended December 31, 2008
Guarantor
Non-Guarantor
Parent/Issuer
Subsidiaries
Subsidiaries
Consolidated
(In thousands)
$
(176,710
)
$
446,029
$
409,818
$
679,137
(3,210
)
(207,530
)
(286,607
)
(497,347
)
757
378
1,135
(19,229
)
(535
)
(19,764
)
(3,000
)
(4,466
)
(7,466
)
(6,800
)
(6,800
)
2,697
2,697
(13,010
)
(230,468
)
(284,067
)
(527,545
)
(53,848
)
(53,848
)
45,000
(31,507
)
13,493
(2,907
)
(2,907
)
(233
)
(233
)
(48,847
)
(48,847
)
6,319
6,319
306,962
(215,554
)
(91,408
)
252,679
(215,554
)
(123,148
)
(86,023
)
62,959
7
2,603
65,569
4,778
54
248
5,080
$
67,737
$
61
$
2,851
$
70,649
F-49
Table of Contents
Additions
Balance at
(Reductions)
Charged to
Beginning of
Charged to Costs
Other
Balance at
Year
and Expenses
Accounts
Deductions(a)
End of Year
(In thousands)
$
109
$
$
$
109
$
13,406
1,962
2,667
12,701
1,120
(383
)
737
$
225
$
(17
)
$
$
99
$
109
12,760
1,302
656
13,406
395
725
1,120
$
216
$
42
$
$
33
$
225
13,500
1,548
2,288
12,760
69,326
(57,973
)
(3,899
)(b)
7,059
395
(a)
Reserves utilized, unless otherwise
indicated.
(b)
Relates to the reversal of tax
benefits from the exercise of employee stock options that was
recorded as paid-in capital.
F-50
1
2
ARCH COAL, INC.
as Issuer |
||||
By: | /s/John T. Drexler | |||
Name: | John T. Drexler | |||
Title: |
Senior Vice President and
Chief Financial Officer |
|||
ALLEGHENY LAND COMPANY
ARCH COAL SALES COMPANY, INC. ARCH COAL TERMINAL, INC. ARCH COAL WEST, LLC ARCH DEVELOPMENT, LLC ARCH ENERGY RESOURCES, LLC ARCH RECLAMATION SERVICES, INC. ARK LAND COMPANY ARK LAND KH, INC. ARK LAND LT, INC. ARK LAND WR, INC. ASHLAND TERMINAL, INC. CATENARY COAL HOLDINGS, INC. COAL-MAC, INC. CUMBERLAND RIVER COAL COMPANY LONE MOUNTAIN PROCESSING, INC. MINGO LOGAN COAL COMPANY MOUNTAIN GEM LAND, INC. MOUNTAIN MINING, INC. MOUNTAINEER LAND COMPANY OTTER CREEK COAL, LLC PRAIRIE HOLDINGS, INC. WESTERN ENERGY RESOURCES, INC. each as a Guarantor |
||||
By: | /s/ John T. Drexler | |||
Name: | John T. Drexler | |||
Title: | Vice President | |||
U.S. BANK NATIONAL ASSOCIATION
as Trustee |
||||
By: | /s/ Brian J. Kabbes | |||
Name: | Brian J. Kabbes | |||
Title: | Vice President | |||
1
2
ARCH COAL, INC.
as Issuer |
||||
By: | /s/ John T. Drexler | |||
Name: | John T. Drexler | |||
Title: | Senior Vice President and Chief Financial Officer | |||
ALLEGHENY LAND COMPANY
ARCH COAL SALES COMPANY, INC. ARCH COAL TERMINAL, INC. ARCH COAL WEST, LLC ARCH DEVELOPMENT, LLC ARCH ENERGY RESOURCES, LLC ARCH RECLAMATION SERVICES, INC. ARK LAND COMPANY ARK LAND KH, INC. ARK LAND LT, INC. ARK LAND WR, INC. ASHLAND TERMINAL, INC. CATENARY COAL HOLDINGS, INC. COAL-MAC, INC. CUMBERLAND RIVER COAL COMPANY LONE MOUNTAIN PROCESSING, INC. MINGO LOGAN COAL COMPANY MOUNTAIN GEM LAND, INC. MOUNTAIN MINING, INC. MOUNTAINEER LAND COMPANY OTTER CREEK COAL, LLC PRAIRIE HOLDINGS, INC. WESTERN ENERGY RESOURCES, INC. each as a Guarantor |
||||
By: | /s/ John T. Drexler | |||
Name: | John T. Drexler | |||
Title: | Vice President | |||
U.S. BANK NATIONAL ASSOCIATION
as Trustee |
||||
By: | /s/ Brian J. Kabbes | |||
Name: | Brian J. Kabbes | |||
Title: | Vice President | |||
ARCH COAL, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Treasurer | ||||
ALLEGHENY LAND COMPANY
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARCH COAL SALES COMPANY, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARCH COAL TERMINAL, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARCH ENERGY RESOURCES, LLC
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARCH RECLAMATION SERVICES, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARK LAND COMPANY
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARK LAND KH, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ARK LAND WR, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
ASHLAND TERMINAL, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
CATENARY COAL HOLDINGS, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
COAL-MAC, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
CUMBERLAND RIVER COAL COMPANY
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
LONE MOUNTAIN PROCESSING, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
MINGO LOGAN COAL COMPANY
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
MOUNTAIN GEM LAND, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
MOUNTAIN MINING, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
MOUNTAINEER LAND COMPANY
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
PRAIRIE HOLDINGS, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
WESTERN ENERGY RESOURCES, INC.
|
||||
By: | /s/ James E. Florczak | |||
Name: James E. Florczak | ||||
Title: Vice President and Treasurer | ||||
BANK LEUMI USA
|
||||
By: | /s/ Joung Hoo Hong | |||
Name: Joun Hoo Hong | ||||
Title: First Vice President | ||||
BANK OF AMERICA, N.A.
(as successor by merger to Fleet National Bank and LaSalle Bank National Association), individually and as Documentation Agent |
||||
By: | /s/ Adam H. Fey | |||
Name: Adam H. Fey | ||||
Title: Vice President | ||||
BANK OF MONTREAL
|
||||
By: | /s/ Joseph W. Linder | |||
Name: Joseph W. Linder | ||||
Title: Vice President | ||||
CREDIT AGRICOLE CORPORATE AND
INVESTMENT BANK |
||||
By: | /s/ Joseph Philbin | |||
Name: Joseph Philbin | ||||
Title: Director | ||||
By: | /s/ Blake Wright | |||
Name: Blake Wright | ||||
Title: Managing Director | ||||
CITICORP USA, INC.
, individually and as
Syndication Agent |
||||
By: | /s/ Thomas W. Ng | |||
Name: Thomas W. Ng | ||||
Title: Vice President | ||||
COMMERCE BANK, N.A.
|
||||
By: | /s/ Douglas P. Best | |||
Name: Douglas P. Best | ||||
Title: Vice President | ||||
JPMORGAN CHASE BANK, N.A.
,
individually and as Syndication Agent |
||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
MIZUHO CORPORATE BANK, LTD. | ||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
MORGAN STANLEY BANK
|
||||
By: | /s/ Scott Taylor | |||
Name: Scott Taylor | ||||
Title: Authorized Signatory | ||||
NATIXIS | ||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
|||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
PNC BANK, NATIONAL ASSOCIATION
, individually, as
Administrative Agent and as Collateral Agent
|
||||
By: | /s/ Richard C. Munsick | |||
Name: Richard C. Munsick | ||||
Title: Senior Vice President | ||||
REGIONS BANK
|
||||
By: | /s/ John Holland | |||
Name: John Holland | ||||
Title: Senior Vice President | ||||
SOVEREIGN BANK
|
||||
By: | /s/ Robert D. Lanigan | |||
Name: Robert D. Lanigan | ||||
Title: SVP | ||||
M&I Marshall & Ilsley Bank, f/n/a
SOUTHWEST BANK, AN M&I BANK |
||||
By: | /s/ Roy C. Postel | |||
Name: Roy C. Postel | ||||
Title: Senior Vice President | ||||
THE BANK OF NEW YORK MELLON | ||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
THE ROYAL BANK OF SCOTLAND PLC
|
||||
By: | /s/ Steve Ray | |||
Name: Steve Ray | ||||
Title: Director | ||||
UBS LOAN FINANCE LLC | ||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
|||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
UMB BANK, N.A. | ||||||
|
||||||
|
By: | |||||
|
Name: |
|
||||
|
Title: |
|
||||
|
|
UNION BANK, N.A. (formerly known as
Union Bank of California, N.A.) |
||||
By: | /s/ Hideyuki Okamoto | |||
Name: /s/ Hideyuki Okamoto | ||||
Title: Vice President | ||||
US BANK NATIONAL ASSOCIATION
|
||||
By: | /s/ John M. Eyerman | |||
Name: John M. Eyerman | ||||
Title: A.V.P. | ||||
WELLS FARGO BANK, N.A.
, successor-in-interest by merger
to WACHOVIA BANK, NATIONAL ASSOCIATION, individually and
as Syndication Agent
|
||||
By: | /s/ Jonathan R. Richardson | |||
Name: Jonathan R. Richardson | ||||
Title: Senior Vice President | ||||
If to the Indemnitee:
|
At the address set below his signature hereto. | |
|
||
If to the Company:
|
Arch Coal, Inc.
Suite 300 One CityPlace Drive St. Louis, Missouri 63141 |
- 2 -
- 3 -
ARCH RECEIVABLE COMPANY, LLC, as
Seller |
||||
By: | /s/ James E. Florczak | |||
Name: | James E. Florczak | |||
Title: | Vice President & Treasurer | |||
ARCH COAL SALES COMPANY, INC., as Servicer
|
||||
By: | /s/ James E. Florczak | |||
Name: | James E. Florczak | |||
Title: | Vice President & Treasurer | |||
S-1 |
First Amendment to A&R RPA
(Arch Coal) |
PNC BANK, NATIONAL ASSOCIATION,
as Administrator |
||||
By: | /s/ William P. Falcon | |||
Name: | William P. Falcon | |||
Title: | Vice President | |||
PNC BANK, NATIONAL ASSOCIATION,
as a Purchaser Agent |
||||
By: | /s/ William P. Falcon | |||
Name: | William P. Falcon | |||
Title: | Vice President | |||
S-2 |
First Amendment to A&R RPA
(Arch Coal) |
PNC BANK, NATIONAL ASSOCIATION,
as the LC Bank and as an LC Participant |
||||
By: | /s/ Richard Munsick | |||
Name: | Richard Minsick | |||
Title: | Senior Vice President | |||
S-3 |
First Amendment to A&R RPA
(Arch Coal) |
MARKET STREET FUNDING LLC,
as a Conduit Purchaser and as a Related Committed Purchaser |
||||
By: | /s/ Doris J. Hearn | |||
Name: | Doris J. Hearn | |||
Title: | Vice President | |||
S-4 |
First Amendment to A&R RPA
(Arch Coal) |
ATLANTIC ASSET SECURITIZATION LLC,
as a Conduit Purchaser |
||||
By: | /s/ Konstantina Kourmpetis | |||
Name: | Konstantina Kourmpetis | |||
Title: | Managing Director | |||
By: | /s/ Sam Pilcer | |||
Name: | Sam Pilcer | |||
Title: | Managing Director | |||
S-5 |
First Amendment to A&R RPA
(Arch Coal) |
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as a Related Committed Purchaser and as a Purchaser Agent |
||||
By: | /s/ Konstantina Kourmpetis | |||
Name: | Konstantina Kourmpetis | |||
Title: | Managing Director | |||
By: | /s/ Sam Pilcer | |||
Name: | Sam Pilcer | |||
Title: | Managing Director | |||
S-6 |
First Amendment to A&R RPA
(Arch Coal) |
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
as an LC Participant |
||||
By: | /s/ Konstantina Kourmpetis | |||
Name: | Konstantina Kourmpetis | |||
Title: | Managing Director | |||
By: | /s/ Sam Pilcer | |||
Name: | Sam Pilcer | |||
Title: | Managing Director | |||
S-7 |
First Amendment to A&R RPA
(Arch Coal) |
ACKNOWLEDGED AND AGREED:
ARCH COAL, INC. |
||||
By: | /s/ James E. Florczak | |||
Name: | James E. Florczak | |||
Title: | Treasurer | |||
S-8 |
First Amendment to A&R RPA
(Arch Coal) |
Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(Dollars in thousands, except ratios) | ||||||||||||||||||||
Earnings:
|
||||||||||||||||||||
Pretax income, excluding income or loss from equity investments
|
$ | 165,534 | $ | 23,020 | $ | 395,977 | $ | 157,224 | $ | 265,688 | ||||||||||
Adjustments:
|
||||||||||||||||||||
Fixed charges
|
153,467 | 118,075 | 99,562 | 103,251 | 87,402 | |||||||||||||||
Distributed income from equity investments
|
9,917 | 5,164 | 2,167 | 1,672 | | |||||||||||||||
Capitalized interest, net of amortization
|
4,417 | 3,143 | (8,351 | ) | (16,849 | ) | (14,578 | ) | ||||||||||||
Arch Western Resources, LLC dividends on preferred membership
interest
|
(107 | ) | (58 | ) | (107 | ) | (85 | ) | (99 | ) | ||||||||||
Total earnings
|
$ | 333,228 | $ | 149,344 | $ | 489,248 | $ | 245,213 | $ | 338,416 | ||||||||||
Fixed charges:
|
||||||||||||||||||||
Interest expense
|
$ | 142,549 | $ | 105,932 | $ | 76,139 | $ | 74,865 | $ | 64,364 | ||||||||||
Capitalized interest
|
| 824 | 11,703 | 17,967 | 14,807 | |||||||||||||||
Arch Western Resources, LLC dividends on preferred membership
interest
|
107 | 58 | 107 | 85 | 99 | |||||||||||||||
Portions of rent which represent an interest factor
|
10,811 | 11,261 | 11,613 | 10,334 | 8,135 | |||||||||||||||
Total fixed charges
|
153,467 | 118,075 | 99,562 | 103,251 | 87,405 | |||||||||||||||
Preferred stock dividends
|
| | 12 | 219 | 378 | |||||||||||||||
Total fixed charges and preferred stock dividends
|
$ | 153,467 | $ | 118,075 | $ | 99,574 | $ | 103,470 | $ | 87,783 | ||||||||||
Ratio of earnings to combined fixed charges and preference
dividends
|
2.17 | x | 1.26 | x | 4.91 | x | 2.37 | x | 3.86 | x |
Arch Coal Asia-Pacific PTE. LTD.
|
100 | % | ||
|
||||
Arch Coal Australia PTY LTD
|
100 | % | ||
Arch Coal Australia Holdings PTY LTD
|
100 | % | ||
|
||||
Arch Reclamation Services, Inc.
|
100 | % | ||
|
||||
Arch Western Acquisition Corporation
|
100 | % | ||
|
||||
Arch Western Resources, LLC
|
99 | % | ||
Arch of Wyoming, LLC
|
100 | % | ||
Arch Western Finance LLC
|
100 | % | ||
Arch Western Bituminous Group LLC
|
100 | % | ||
Canyon Fuel Company, LLC
|
65 | %* | ||
Mountain Coal Company, LLC
|
100 | % | ||
Thunder Basin Coal Company, L.L.C.
|
100 | % | ||
Triton Coal Company, L.L.C.
|
100 | % | ||
Ark Land Company
|
100 | % | ||
Western Energy Resources, Inc.
|
100 | % | ||
Ark Land KH, Inc.
|
100 | % | ||
Ark Land LT, Inc.
|
100 | % | ||
Ark Land WR, Inc.
|
100 | % | ||
|
||||
Allegheny Land Company
|
100 | % | ||
|
||||
Apogee Holdco, Inc.
|
100 | % | ||
|
||||
Arch Coal Sales Company, Inc.
|
100 | % | ||
Arch Energy Resources, LLC
|
100 | % | ||
|
||||
Arch Coal Terminal, Inc.
|
100 | % | ||
|
||||
Arch Coal West, LLC
|
100 | % | ||
|
||||
Arch Development, LLC
|
100 | % | ||
|
||||
Arch Receivable Company, LLC
|
100 | % | ||
|
||||
Ashland Terminal, Inc.
|
100 | % | ||
|
||||
Canyon Fuel Company, LLC
|
35 | %* | ||
|
||||
Catenary Coal Holdings, Inc.
|
100 | % | ||
Cumberland River Coal Company
|
100 | % | ||
Lone Mountain Processing, Inc.
|
100 | % | ||
|
||||
Catenary Holdco, Inc.
|
100 | % | ||
|
||||
Coal-Mac, Inc.
|
100 | % | ||
|
||||
Energy Development Co.
|
100 | % | ||
|
||||
Hobet Holdco, Inc.
|
100 | % |
Jacobs Ranch Holdings I LLC
|
100 | % | ||
Jacobs Ranch Holdings II LLC
|
100 | % | ||
Jacobs Ranch Coal LLC
|
100 | % | ||
|
||||
Mingo Logan Coal Company
|
100 | % | ||
|
||||
Mountain Gem Land, Inc.
|
100 | % | ||
|
||||
Mountain Mining, Inc.
|
100 | % | ||
|
||||
Mountaineer Land Company
|
100 | % | ||
|
||||
Otter Creek Coal, LLC
|
100 | % | ||
|
||||
P.C. Holding, Inc.
|
100 | % | ||
|
||||
Prairie Holdings, Inc.
|
100 | % | ||
Prairie Coal Company, LLC
|
100 | % | ||
|
||||
Saddleback Hills Coal Company
|
100 | % |
* | NOTE: Canyon Fuel is listed in two places |
(1) | Registration Statement (Form S-3 No. 333-157880) of Arch Coal, Inc. and in the related Prospectus, | ||
(2) | Registration Statements (Form S-8 Nos. 333-30565 and 333-112536) pertaining to the Arch Coal, Inc. 1997 Stock Incentive Plan and in the related Prospectus, | ||
(3) | Registration Statement (Form S-8 Nos. 333-32777 and 333-156593) pertaining to the Arch Coal, Inc. and Subsidiaries Employee Thrift Plan and in the related Prospectus, | ||
(4) | Registration Statements (Form S-8 Nos. 333-68131 and 333-147459) pertaining to the Arch Coal, Inc. Deferred Compensation Plan and in the related Prospectus, and | ||
(5) | Registration Statements (Form S-8 Nos. 333-112537 and 333-127548) pertaining to the Arch Coal, Inc. Retirement Account Plan, |
By:
|
||
Name:
|
John W. Sabo | |
Title:
|
Executive Vice President | |
Date:
|
February 25, 2011 |
|
Director | |||||
|
President, Chief Operating Officer and Director | |||||
|
Director | |||||
|
Director | |||||
|
Director | |||||
|
Director | |||||
|
Director | |||||
|
Chairman and Chief Executive Officer | |||||
|
Director | |||||
|
Director |
Director
Director
Director
Director