##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2010
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to .
 Commission file number: 333-107569-03
 Arch Western Resources, LLC
  Delaware
(State or other jurisdiction 
of incorporation or organization)
    
    43-1811130
(I.R.S. Employer
Identification Number)One CityPlace Drive, Suite 300, St. Louis, Missouri
(Address of principal executive offices)
    
    63141
(Zip code)
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



Table of Contents
 PagePart I FINANCIAL INFORMATION
    
    
    1Item 1.
    
    Financial Statements
    
    
    1Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4.
    
    Controls and Procedures
    
    
    22Part II OTHER INFORMATION
    
    
    23Item 1.
    
    Legal Proceedings
    
    
    23Item 1A.
    
    Risk Factors
    
    
    23Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3.
    
    Defaults Upon Senior Securities
    
    
    23Item 4.
    
    Reserved
    
    
    23Item 5.
    
    Other Information
    
    
    23Item 6.
    
    Exhibits
    
    
    24EX-31.1EX-31.2EX-32.1EX-32.2
  i




---



##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands)
 Three Months Ended June 30
    
    
    Six Months Ended June 302010
    
    
    2009
    
    
    2010
    
    
    2009(unaudited)RevenuesCoal sales
    
    $
    481,478
    
    
    $
    360,806
    
    
    $
    954,325
    
    
    $
    777,056Costs, expenses and otherCost of coal sales
    
    
    396,570
    
    
    
    320,295
    
    
    
    794,079
    
    
    
    681,667Depreciation, depletion and amortization
    
    
    40,087
    
    
    
    36,303
    
    
    
    84,127
    
    
    
    74,768Amortization of acquired sales contracts, net
    
    
    5,214
    
    
    
    58
    
    
    
    15,967
    
    
    
    (170
    )Selling, general and administrative expenses
    
    
    11,408
    
    
    
    7,240
    
    
    
    19,249
    
    
    
    17,068Other operating income, net
    
    
    (1,114
    )
    
    
    (922
    )
    
    
    (2,504
    )
    
    
    (1,871
    )452,165
    
    
    
    362,974
    
    
    
    910,918
    
    
    
    771,462Income (loss) from operations
    
    
    29,313
    
    
    
    (2,168
    )
    
    
    43,407
    
    
    
    5,594Interest expense, net:Interest expense
    
    
    (17,571
    )
    
    
    (15,831
    )
    
    
    (35,074
    )
    
    
    (33,349
    )Interest income, primarily from Arch Coal, Inc.
    
    
    14,103
    
    
    
    11,566
    
    
    
    26,018
    
    
    
    23,366(3,468
    )
    
    
    (4,265
    )
    
    
    (9,056
    )
    
    
    (9,983
    )Net income (loss)
    
    $
    25,845
    
    
    $
    (6,433
    )
    
    $
    34,351
    
    
    $
    (4,389
    )Net income (loss) attributable to redeemable
membership interest
    
    $
    118
    
    
    $
    (35
    )
    
    $
    144
    
    
    $
    (42
    )Net income (loss) attributable to
non-redeemable membership interest
    
    $
    25,727
    
    
    $
    (6,398
    )
    
    $
    34,207
    
    
    $
    (4,347
    )
  1




---



##### Table of Contents



Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
 June 30,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    32,506
    
    
    $
    6,819Receivables
    
    
    1,889
    
    
    
    8,379Receivable from Arch Coal, Inc.
    
    
    280,625
    
    
    
    Inventories
    
    
    153,953
    
    
    
    165,650Other
    
    
    17,379
    
    
    
    23,350Total current assets
    
    
    486,352
    
    
    
    204,198Property, plant and equipment, net
    
    
    1,498,916
    
    
    
    1,548,300Other assets:Receivable from Arch Coal, Inc.
    
    
    1,388,153
    
    
    
    1,541,243Other
    
    
    13,848
    
    
    
    14,172Total other assets
    
    
    1,402,001
    
    
    
    1,555,415Total assets
    
    $
    3,387,269
    
    
    $
    3,307,913LIABILITIES AND MEMBERSHIP INTERESTSCurrent liabilities:Accounts payable
    
    $
    86,163
    
    
    $
    74,508Accrued expenses
    
    
    146,549
    
    
    
    144,432Commercial
paper and current portion of long-term debt
    
    
    339,155
    
    
    
    49,452Total current liabilities
    
    
    571,867
    
    
    
    268,392Long-term debt
    
    
    676,941
    
    
    
    954,782Asset retirement obligations
    
    
    286,268
    
    
    
    274,914Accrued postretirement benefits other than pension
    
    
    29,377
    
    
    
    28,819Accrued pension benefits
    
    
    36,178
    
    
    
    34,523Accrued workers compensation
    
    
    3,573
    
    
    
    4,067Other noncurrent liabilities
    
    
    33,050
    
    
    
    26,744Total liabilities
    
    
    1,637,254
    
    
    
    1,592,241Redeemable membership interest
    
    
    9,993
    
    
    
    8,962Non-redeemable membership interest
    
    
    1,740,022
    
    
    
    1,706,710Total liabilities and membership interests
    
    $
    3,387,269
    
    
    $
    3,307,913
  2




---



##### Table of Contents



Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
 Six Months Ended June 302010
    
    
    2009(unaudited)OPERATING ACTIVITIESNet income (loss)
    
    $
    34,351
    
    
    $
    (4,389
    )Adjustments to reconcile net income (loss) to cash provided by operating activities:Depreciation, depletion and amortization
    
    
    84,127
    
    
    
    74,768Amortization of acquired sales contracts, net
    
    
    15,967
    
    
    
    (170
    )Changes in:Receivables
    
    
    6,490
    
    
    
    402Inventories
    
    
    11,697
    
    
    
    (19,105
    )Accounts payable and accrued expenses
    
    
    17,193
    
    
    
    (18,600
    )Other
    
    
    26,583
    
    
    
    22,793Cash provided by operating activities
    
    
    196,408
    
    
    
    55,699INVESTING ACTIVITIESCapital expenditures
    
    
    (38,203
    )
    
    
    (85,377
    )Change in receivable from Arch Coal, Inc.
    
    
    (143,330
    )
    
    
    60,464Proceeds from dispositions of property, plant and equipment
    
    
    74
    
    
    
    30Additions to prepaid royalties
    
    
    (2,635
    )
    
    
    (2,207
    )Reimbursement of deposits on equipment
    
    
    
    
    
    
    3,209Cash used in investing activities
    
    
    (184,094
    )
    
    
    (23,881
    )FINANCING ACTIVITIESNet proceeds from (repayments on) commercial paper
    
    
    12,545
    
    
    
    (26,927
    )Debt financing costs
    
    
    (63
    )
    
    
    (125
    )Contribution from non-redeemable membership interest
    
    
    891
    
    
    
    Cash provided by (used in) financing activities
    
    
    13,373
    
    
    
    (27,052
    )Increase in cash and cash equivalents
    
    
    25,687
    
    
    
    4,766Cash and cash equivalents, beginning of period
    
    
    6,819
    
    
    
    2,851Cash and cash equivalents, end of period
    
    $
    32,506
    
    
    $
    7,617
  3




---



##### Table of Contents



Arch Western Resources, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Basis of Presentation
   2. Accounting Policies
  3. Inventories
  June 30,
    
    
    December 31,2010
    
    
    2009(In thousands)Coal
    
    $
    41,099
    
    
    $
    42,316Repair parts and supplies, net of allowance
    
    
    112,854
    
    
    
    123,334$
    153,953
    
    
    $
    165,650
  4. Debt
  5. Fair Values of Financial Instruments
  Cash and cash equivalents:
 Debt:
 6. Comprehensive Income (Loss)
  4




---



##### Table of Contents



Three Months Ended June 30
    
    
    Six Months Ended June 302010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands)Net income (loss)
    
    $
    25,845
    
    
    $
    (6,433
    )
    
    $
    34,351
    
    
    $
    (4,389
    )Other comprehensive income (loss):Pension, postretirement and other
post-employment benefits
reclassifications into net income
    
    
    (1,177
    )
    
    
    375
    
    
    
    (851
    )
    
    
    293Total comprehensive income (loss)
    
    $
    24,668
    
    
    $
    (6,058
    )
    
    $
    33,500
    
    
    $
    (4,096
    )
 7. Related Party Transactions
      8. Contingencies
  9. Segment Information
  5




---



##### Table of Contents



Corporate,Other andPRB
    
    WBIT
    
    Eliminations
    
    Consolidated(In thousands)Three months ended June 30, 2010Coal sales
    
    $
    349,369
    
    
    $
    132,109
    
    
    $
    
    
    
    $
    481,478Income from operations
    
    
    24,714
    
    
    
    13,864
    
    
    
    (9,265
    )
    
    
    29,313Depreciation, depletion and amortization
    
    
    21,922
    
    
    
    18,165
    
    
    
    
    
    
    
    40,087Amortization of acquired sales contracts, net
    
    
    5,214
    
    
    
    
    
    
    
    
    
    
    
    5,214Capital expenditures
    
    
    3,674
    
    
    
    20,703
    
    
    
    
    
    
    
    24,377Three months ended June 30, 2009Coal sales
    
    $
    248,785
    
    
    $
    112,021
    
    
    $
    
    
    
    $
    360,806Income (loss) from operations
    
    
    9,330
    
    
    
    (4,265
    )
    
    
    (7,233
    )
    
    
    (2,168
    )Depreciation, depletion and amortization
    
    
    17,861
    
    
    
    18,442
    
    
    
    
    
    
    
    36,303Amortization of acquired sales contracts, net
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    58Capital expenditures
    
    
    8,092
    
    
    
    27,412
    
    
    
    
    
    
    
    35,504Six months ended June 30, 2010Coal sales
    
    $
    689,535
    
    
    $
    264,790
    
    
    $
    
    
    
    $
    954,325Income from operations
    
    
    34,861
    
    
    
    26,310
    
    
    
    (17,764
    )
    
    
    43,407Total assets
    
    
    1,025,456
    
    
    
    654,493
    
    
    
    1,707,320
    
    
    
    3,387,269Depreciation, depletion and amortization
    
    
    45,700
    
    
    
    38,427
    
    
    
    
    
    
    
    84,127Amortization of acquired sales contracts, net
    
    
    15,967
    
    
    
    
    
    
    
    
    
    
    
    15,967Capital expenditures
    
    
    4,399
    
    
    
    33,804
    
    
    
    
    
    
    
    38,203Six months ended June 30, 2009Coal sales
    
    $
    544,095
    
    
    $
    232,961
    
    
    $
    
    
    
    $
    777,056Income (loss) from operations
    
    
    34,722
    
    
    
    (11,302
    )
    
    
    (17,826
    )
    
    
    5,594Total assets
    
    
    850,482
    
    
    
    709,731
    
    
    
    1,486,789
    
    
    
    3,047,002Depreciation, depletion and amortization
    
    
    36,604
    
    
    
    38,164
    
    
    
    
    
    
    
    74,768Amortization of acquired sales contracts, net
    
    
    141
    
    
    
    (311
    )
    
    
    
    
    
    
    (170
    )Capital expenditures
    
    
    41,871
    
    
    
    43,506
    
    
    
    
    
    
    
    85,377
  Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands)Income (loss) from operations
    
    $
    29,313
    
    
    $
    (2,168
    )
    
    $
    43,407
    
    
    $
    5,594Interest expense
    
    
    (17,571
    )
    
    
    (15,831
    )
    
    
    (35,074
    )
    
    
    (33,349
    )Interest income
    
    
    14,103
    
    
    
    11,566
    
    
    
    26,018
    
    
    
    23,366Net income (loss)
    
    $
    25,845
    
    
    $
    (6,433
    )
    
    $
    34,351
    
    
    $
    (4,389
    )
 6




---



##### Table of Contents



10. Subsequent Event
  11. Supplemental Condensed Consolidating Financial Information
  7




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended June 30, 2010
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    387,161
    
    
    $
    94,317
    
    
    $
    
    
    
    $
    481,478Cost of coal sales
    
    
    (2,088
    )
    
    
    
    
    
    
    325,633
    
    
    
    74,192
    
    
    
    (1,167
    )
    
    
    396,570Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    27,958
    
    
    
    12,129
    
    
    
    
    
    
    
    40,087Amortization of acquired sales
contracts, net
    
    
    
    
    
    
    
    
    
    
    5,214
    
    
    
    
    
    
    
    
    
    
    
    5,214Selling, general and administrative
expenses
    
    
    11,408
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,408Other operating income, net
    
    
    (56
    )
    
    
    
    
    
    
    (759
    )
    
    
    (1,466
    )
    
    
    1,167
    
    
    
    (1,114
    )9,264
    
    
    
    
    
    
    
    358,046
    
    
    
    84,855
    
    
    
    
    
    
    
    452,165Income from investment in subsidiaries
    
    
    38,366
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,366
    )
    
    
    Income from operations
    
    
    29,102
    
    
    
    
    
    
    
    29,115
    
    
    
    9,462
    
    
    
    (38,366
    )
    
    
    29,313Interest expense
    
    
    (17,155
    )
    
    
    (16,230
    )
    
    
    
    
    
    
    (218
    )
    
    
    16,032
    
    
    
    (17,571
    )Interest income
    
    
    13,898
    
    
    
    16,032
    
    
    
    185
    
    
    
    20
    
    
    
    (16,032
    )
    
    
    14,103(3,257
    )
    
    
    (198
    )
    
    
    185
    
    
    
    (198
    )
    
    
    
    
    
    
    (3,468
    )Net income
    
    $
    25,845
    
    
    $
    (198
    )
    
    $
    29,300
    
    
    $
    9,264
    
    
    $
    (38,366
    )
    
    $
    25,845
 8




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended June 30, 2009
(in thousands)
 Non-Parent
    
    
    
    
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    283,203
    
    
    $
    77,603
    
    
    $
    
    
    
    $
    360,806Cost of coal sales
    
    
    30
    
    
    
    
    
    
    
    258,283
    
    
    
    62,604
    
    
    
    (622
    )
    
    
    320,295Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    23,972
    
    
    
    12,331
    
    
    
    
    
    
    
    36,303Amortization of acquired sales
contracts, net
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    58Selling, general and administrative
expenses
    
    
    7,240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,240Other operating income, net
    
    
    (63
    )
    
    
    
    
    
    
    (571
    )
    
    
    (910
    )
    
    
    622
    
    
    
    (922
    )7,207
    
    
    
    
    
    
    
    281,742
    
    
    
    74,025
    
    
    
    
    
    
    
    362,974Income from investment in subsidiaries
    
    
    6,060
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,060
    )
    
    
    Income (loss) from operations
    
    
    (1,147
    )
    
    
    
    
    
    
    1,461
    
    
    
    3,578
    
    
    
    (6,060
    )
    
    
    (2,168
    )Interest expense
    
    
    (16,807
    )
    
    
    (16,004
    )
    
    
    1,151
    
    
    
    (203
    )
    
    
    16,032
    
    
    
    (15,831
    )Interest income
    
    
    11,521
    
    
    
    16,032
    
    
    
    2
    
    
    
    43
    
    
    
    (16,032
    )
    
    
    11,566(5,286
    )
    
    
    28
    
    
    
    1,153
    
    
    
    (160
    )
    
    
    
    
    
    
    (4,265
    )Net income (loss)
    
    $
    (6,433
    )
    
    $
    28
    
    
    $
    2,614
    
    
    $
    3,418
    
    
    $
    (6,060
    )
    
    $
    (6,433
    )
 9




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Six Months Ended June 30, 2010
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    765,596
    
    
    $
    188,729
    
    
    $
    
    
    
    $
    954,325Cost of coal sales
    
    
    (1,121
    )
    
    
    
    
    
    
    650,193
    
    
    
    147,571
    
    
    
    (2,564
    )
    
    
    794,079Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    58,694
    
    
    
    25,433
    
    
    
    
    
    
    
    84,127Amortization of acquired sales
contracts, net
    
    
    
    
    
    
    
    
    
    
    15,967
    
    
    
    
    
    
    
    
    
    
    
    15,967Selling, general and administrative
expenses
    
    
    19,249
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,249Other operating income, net
    
    
    (365
    )
    
    
    
    
    
    
    (1,532
    )
    
    
    (3,171
    )
    
    
    2,564
    
    
    
    (2,504
    )17,763
    
    
    
    
    
    
    
    723,322
    
    
    
    169,833
    
    
    
    
    
    
    
    910,918Income from investment in subsidiaries
    
    
    60,575
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60,575
    )
    
    
    Income from operations
    
    
    42,812
    
    
    
    
    
    
    
    42,274
    
    
    
    18,896
    
    
    
    (60,575
    )
    
    
    43,407Interest expense
    
    
    (34,251
    )
    
    
    (32,460
    )
    
    
    
    
    
    
    (426
    )
    
    
    32,063
    
    
    
    (35,074
    )Interest income
    
    
    25,790
    
    
    
    32,063
    
    
    
    186
    
    
    
    42
    
    
    
    (32,063
    )
    
    
    26,018(8,461
    )
    
    
    (397
    )
    
    
    186
    
    
    
    (384
    )
    
    
    
    
    
    
    (9,056
    )Net income (loss)
    
    $
    34,351
    
    
    $
    (397
    )
    
    $
    42,460
    
    
    $
    18,512
    
    
    $
    (60,575
    )
    
    $
    34,351
 10




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Six Months Ended June 30, 2009
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-
GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    609,147
    
    
    $
    167,909
    
    
    $
    
    
    
    $
    777,056Cost of coal sales
    
    
    864
    
    
    
    
    
    
    
    547,285
    
    
    
    134,985
    
    
    
    (1,467
    )
    
    
    681,667Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    49,147
    
    
    
    25,621
    
    
    
    
    
    
    
    74,768Amortization of acquired sales
contracts, net
    
    
    
    
    
    
    
    
    
    
    (170
    )
    
    
    
    
    
    
    
    
    
    
    (170
    )Selling, general and administrative
expenses
    
    
    17,068
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,068Other operating income, net
    
    
    (132
    )
    
    
    
    
    
    
    (1,212
    )
    
    
    (1,994
    )
    
    
    1,467
    
    
    
    (1,871
    )17,800
    
    
    
    
    
    
    
    595,050
    
    
    
    158,612
    
    
    
    
    
    
    
    771,462Income from investment in subsidiaries
    
    
    24,139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,139
    )
    
    
    Income from operations
    
    
    6,339
    
    
    
    
    
    
    
    14,097
    
    
    
    9,297
    
    
    
    (24,139
    )
    
    
    5,594Interest expense
    
    
    (33,902
    )
    
    
    (32,037
    )
    
    
    982
    
    
    
    (455
    )
    
    
    32,063
    
    
    
    (33,349
    )Interest income
    
    
    23,174
    
    
    
    32,063
    
    
    
    29
    
    
    
    163
    
    
    
    (32,063
    )
    
    
    23,366(10,728
    )
    
    
    26
    
    
    
    1,011
    
    
    
    (292
    )
    
    
    
    
    
    
    (9,983
    )Net income (loss)
    
    $
    (4,389
    )
    
    $
    26
    
    
    $
    15,108
    
    
    $
    9,005
    
    
    $
    (24,139
    )
    
    $
    (4,389
    )
 11




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
June 30, 2010
(in thousands)
 Guarantor
    
    
    Non-GuarantorParent Company
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash and cash equivalents
    
    $
    2,390
    
    
    $
    
    
    
    $
    30,053
    
    
    $
    63
    
    
    $
    
    
    
    $
    32,506Receivables
    
    
    673
    
    
    
    
    
    
    
    587
    
    
    
    629
    
    
    
    
    
    
    
    1,889Receivable from Arch Coal
    
    
    280,625
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    280,625Inventories
    
    
    
    
    
    
    
    
    
    
    112,173
    
    
    
    41,780
    
    
    
    
    
    
    
    153,953Other
    
    
    4,299
    
    
    
    2,146
    
    
    
    3,692
    
    
    
    7,242
    
    
    
    
    
    
    
    17,379Total current assets
    
    
    287,987
    
    
    
    2,146
    
    
    
    146,505
    
    
    
    49,714
    
    
    
    
    
    
    
    486,352Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    1,225,879
    
    
    
    273,037
    
    
    
    
    
    
    
    1,498,916Investment in subsidiaries
    
    
    2,682,792
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,682,792
    )
    
    
    Receivable from Arch Coal
    
    
    1,363,466
    
    
    
    
    
    
    
    
    
    
    
    24,687
    
    
    
    
    
    
    
    1,388,153Intercompanies
    
    
    (2,499,917
    )
    
    
    993,857
    
    
    
    1,237,183
    
    
    
    268,877
    
    
    
    
    
    
    
    Other
    
    
    1,105
    
    
    
    4,252
    
    
    
    4,262
    
    
    
    4,229
    
    
    
    
    
    
    
    13,848Total other assets
    
    
    1,547,446
    
    
    
    998,109
    
    
    
    1,241,445
    
    
    
    297,793
    
    
    
    (2,682,792
    )
    
    
    1,402,001Total assets
    
    $
    1,835,433
    
    
    $
    1,000,255
    
    
    $
    2,613,829
    
    
    $
    620,544
    
    
    $
    (2,682,792
    )
    
    $
    3,387,269Accounts payable
    
    $
    5,691
    
    
    $
    
    
    
    $
    65,991
    
    
    $
    14,481
    
    
    $
    
    
    
    $
    86,163Accrued expenses
    
    
    2,152
    
    
    
    32,063
    
    
    
    100,595
    
    
    
    11,739
    
    
    
    
    
    
    
    146,549Commercial
paper and current portion of long-term debt
    
    
    61,998
    
    
    
    277,157
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339,155Total current liabilities
    
    
    69,841
    
    
    
    309,220
    
    
    
    166,586
    
    
    
    26,220
    
    
    
    
    
    
    
    571,867Long-term debt
    
    
    
    
    
    
    676,941
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    676,941Asset retirement obligations
    
    
    
    
    
    
    
    
    
    
    275,761
    
    
    
    10,507
    
    
    
    
    
    
    
    286,268Accrued postretirement benefits other
than pension
    
    
    6,270
    
    
    
    
    
    
    
    15,147
    
    
    
    7,960
    
    
    
    
    
    
    
    29,377Accrued pension benefits
    
    
    9,377
    
    
    
    
    
    
    
    19,361
    
    
    
    7,440
    
    
    
    
    
    
    
    36,178Accrued workers compensation
    
    
    (1,468
    )
    
    
    
    
    
    
    1,178
    
    
    
    3,863
    
    
    
    
    
    
    
    3,573Other noncurrent liabilities
    
    
    1,398
    
    
    
    
    
    
    
    31,602
    
    
    
    50
    
    
    
    
    
    
    
    33,050Total liabilities
    
    
    85,418
    
    
    
    986,161
    
    
    
    509,635
    
    
    
    56,040
    
    
    
    
    
    
    
    1,637,254Redeemable membership interest
    
    
    9,993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,993Non-redeemable membership interest
    
    
    1,740,022
    
    
    
    14,094
    
    
    
    2,104,194
    
    
    
    564,504
    
    
    
    (2,682,792
    )
    
    
    1,740,022Total liabilities and membership interests
    
    $
    1,835,433
    
    
    $
    1,000,255
    
    
    $
    2,613,829
    
    
    $
    620,544
    
    
    $
    (2,682,792
    )
    
    $
    3,387,269
 12




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2009
(in thousands)
 Guarantor
    
    
    Non-GuarantorParent Company
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash and cash equivalents
    
    $
    6,714
    
    
    $
    
    
    
    $
    61
    
    
    $
    44
    
    
    $
    
    
    
    $
    6,819Receivables
    
    
    5,536
    
    
    
    
    
    
    
    2,123
    
    
    
    720
    
    
    
    
    
    
    
    8,379Inventories
    
    
    
    
    
    
    
    
    
    
    127,907
    
    
    
    37,743
    
    
    
    
    
    
    
    165,650Other
    
    
    10,423
    
    
    
    2,153
    
    
    
    3,892
    
    
    
    6,882
    
    
    
    
    
    
    
    23,350Total current assets
    
    
    22,673
    
    
    
    2,153
    
    
    
    133,983
    
    
    
    45,389
    
    
    
    
    
    
    
    204,198Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    1,258,695
    
    
    
    289,605
    
    
    
    
    
    
    
    1,548,300Investment in subsidiaries
    
    
    2,621,530
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,621,530
    )
    
    
    Receivable from Arch Coal
    
    
    1,509,032
    
    
    
    
    
    
    
    
    
    
    
    32,211
    
    
    
    
    
    
    
    1,541,243Intercompanies
    
    
    (2,364,534
    )
    
    
    993,857
    
    
    
    1,141,474
    
    
    
    229,203
    
    
    
    
    
    
    
    Other
    
    
    1,785
    
    
    
    5,325
    
    
    
    2,543
    
    
    
    4,519
    
    
    
    
    
    
    
    14,172Total other assets
    
    
    1,767,813
    
    
    
    999,182
    
    
    
    1,144,017
    
    
    
    265,933
    
    
    
    (2,621,530
    )
    
    
    1,555,415Total assets
    
    $
    1,790,486
    
    
    $
    1,001,335
    
    
    $
    2,536,695
    
    
    $
    600,927
    
    
    $
    (2,621,530
    )
    
    $
    3,307,913Accounts payable
    
    $
    4,176
    
    
    $
    
    
    
    $
    55,514
    
    
    $
    14,818
    
    
    $
    
    
    
    $
    74,508Accrued expenses
    
    
    2,885
    
    
    
    32,063
    
    
    
    97,649
    
    
    
    11,835
    
    
    
    
    
    
    
    144,432Commercial paper
    
    
    49,452
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,452Total current liabilities
    
    
    56,513
    
    
    
    32,063
    
    
    
    153,163
    
    
    
    26,653
    
    
    
    
    
    
    
    268,392Long-term debt
    
    
    
    
    
    
    954,782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    954,782Asset retirement obligations
    
    
    
    
    
    
    
    
    
    
    264,873
    
    
    
    10,041
    
    
    
    
    
    
    
    274,914Accrued postretirement benefits other
than pension
    
    
    6,346
    
    
    
    
    
    
    
    14,858
    
    
    
    7,615
    
    
    
    
    
    
    
    28,819Accrued pension benefits
    
    
    11,307
    
    
    
    
    
    
    
    16,936
    
    
    
    6,280
    
    
    
    
    
    
    
    34,523Accrued workers compensation
    
    
    (1,199
    )
    
    
    
    
    
    
    1,217
    
    
    
    4,049
    
    
    
    
    
    
    
    4,067Other noncurrent liabilities
    
    
    1,847
    
    
    
    
    
    
    
    24,864
    
    
    
    33
    
    
    
    
    
    
    
    26,744Total liabilities
    
    
    74,814
    
    
    
    986,845
    
    
    
    475,911
    
    
    
    54,671
    
    
    
    
    
    
    
    1,592,241Redeemable membership interest
    
    
    8,962
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,962Non-redeemable membership interest
    
    
    1,706,710
    
    
    
    14,490
    
    
    
    2,060,784
    
    
    
    546,256
    
    
    
    (2,621,530
    )
    
    
    1,706,710Total liabilities and membership
interests
    
    $
    1,790,486
    
    
    $
    1,001,335
    
    
    $
    2,536,695
    
    
    $
    600,927
    
    
    $
    (2,621,530
    )
    
    $
    3,307,913
 13




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2010
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    ConsolidatedCash provided by (used in) operating activities
    
    $
    (18,021
    )
    
    
    
    
    
    $
    173,321
    
    
    $
    41,108
    
    
    $
    196,408Investing ActivitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (29,361
    )
    
    
    (8,842
    )
    
    
    (38,203
    )Change in receivable from Arch Coal
    
    
    (150,854
    )
    
    
    
    
    
    
    
    
    
    
    7,524
    
    
    
    (143,330
    )Proceeds from dispositions of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    45
    
    
    
    29
    
    
    
    74Additions to prepaid royalties
    
    
    
    
    
    
    
    
    
    
    (2,509
    )
    
    
    (126
    )
    
    
    (2,635
    )Cash used in investing activities
    
    
    (150,854
    )
    
    
    
    
    
    
    (31,825
    )
    
    
    (1,415
    )
    
    
    (184,094
    )Financing ActivitiesNet proceeds from commercial paper
    
    
    12,545
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,545Debt financing costs
    
    
    (63
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63
    )Contribution from non-redeemable membership interest
    
    
    891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    891Transactions with affiliates, net
    
    
    151,178
    
    
    
    
    
    
    
    (111,504
    )
    
    
    (39,674
    )
    
    
    Cash provided by (used in) financing
activities
    
    
    164,551
    
    
    
    
    
    
    
    (111,504
    )
    
    
    (39,674
    )
    
    
    13,373Increase (decrease) in cash and cash equivalents
    
    
    (4,324
    )
    
    
    
    
    
    
    29,992
    
    
    
    19
    
    
    
    25,687Cash and cash equivalents, beginning of
period
    
    
    6,714
    
    
    
    
    
    
    
    61
    
    
    
    44
    
    
    
    6,819Cash and cash equivalents, end of period
    
    $
    2,390
    
    
    $
    
    
    
    $
    30,053
    
    
    $
    63
    
    
    $
    32,506
 14




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2009
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    ConsolidatedCash provided by (used in) operating activities
    
    $
    (54,165
    )
    
    $
    422
    
    
    $
    85,110
    
    
    $
    24,332
    
    
    $
    55,699Investing ActivitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (70,322
    )
    
    
    (15,055
    )
    
    
    (85,377
    )Change in receivable from Arch Coal
    
    
    56,561
    
    
    
    
    
    
    
    
    
    
    
    3,903
    
    
    
    60,464Proceeds from dispositions of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    25
    
    
    
    30Additions to prepaid royalties
    
    
    
    
    
    
    
    
    
    
    (2,207
    )
    
    
    
    
    
    
    (2,207
    )Reimbursement of deposits on equipment
    
    
    
    
    
    
    
    
    
    
    3,209
    
    
    
    
    
    
    
    3,209Cash provided by (used in) investing activities
    
    
    56,561
    
    
    
    
    
    
    
    (69,315
    )
    
    
    (11,127
    )
    
    
    (23,881
    )Financing ActivitiesNet payments on commercial paper
    
    
    (26,927
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,927
    )Debt financing costs
    
    
    (125
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125
    )Transactions with affiliates, net
    
    
    29,455
    
    
    
    (422
    )
    
    
    (15,818
    )
    
    
    (13,215
    )
    
    
    Cash provided by (used in) financing
activities
    
    
    2,403
    
    
    
    (422
    )
    
    
    (15,818
    )
    
    
    (13,215
    )
    
    
    (27,052
    )Increase (decrease) in cash and cash equivalents
    
    
    4,799
    
    
    
    
    
    
    
    (23
    )
    
    
    (10
    )
    
    
    4,766Cash and cash equivalents, beginning of
period
    
    
    2,690
    
    
    
    
    
    
    
    84
    
    
    
    77
    
    
    
    2,851Cash and cash equivalents, end of period
    
    $
    7,489
    
    
    $
    
    
    
    $
    61
    
    
    $
    67
    
    
    $
    7,617
 15




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
 This document contains forward-looking statements  that is, statements related to future,
not past, events. In this context, forward-looking statements often address our expected future
business and financial performance, and often contain words such as expects, anticipates,
intends, plans, believes, seeks, or will. Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. For us, particular uncertainties arise
from changes in the demand for our coal by the domestic electric generation industry; from
legislation and regulations relating to the Clean Air Act and other environmental initiatives; from
regulations relating to mine safety; from operational, geological, permit, labor and
weather-related factors; from fluctuations in the amount of cash we generate from operations; from
future integration of acquired businesses; and from numerous other matters of national, regional
and global scale, including those of a political, economic, business, competitive or regulatory
nature. These uncertainties may cause our actual future results to be materially different than
those expressed in our forward-looking statements. We do not undertake to update our
forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by law. For a description of some of the risks and uncertainties that
may affect our future results, see Risk Factors under Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2009.
 Overview
      16




---



##### Table of Contents



Results of Operations
 Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009
 Summary
 Revenues.
 Three Months Ended June 30
    
    Increase (Decrease)2010
    
    2009
    
    Amount
    
    %(Amounts in thousands, except per ton data and percentages)Coal sales
    
    $
    481,478
    
    
    $
    360,806
    
    
    $
    120,672
    
    
    
    33.4
    %Tons sold
    
    
    33,922
    
    
    
    23,649
    
    
    
    10,273
    
    
    
    43.4
    %Coal sales realization per ton sold
    
    $
    14.19
    
    
    $
    15.26
    
    
    $
    (1.07
    )
    
    
    (7.0
    )%
  Costs, expenses and other.
 Increase (Decrease)Three Months Ended June 30
    
    
    in Net Income2010
    
    
    2009
    
    
    $
    
    
    %(Amounts in thousands, except percentages)Cost of coal sales
    
    $
    396,570
    
    
    $
    320,295
    
    
    $
    (76,275
    )
    
    
    (23.8
    )%Depreciation, depletion and amortization
    
    
    40,087
    
    
    
    36,303
    
    
    
    (3,784
    )
    
    
    (10.4
    )Amortization of acquired sales contracts, net
    
    
    5,214
    
    
    
    58
    
    
    
    (5,156
    )
    
    
    N/ASelling, general and administrative expenses
    
    
    11,408
    
    
    
    7,240
    
    
    
    (4,168
    )
    
    
    (57.6
    )Other operating income, net
    
    
    (1,114
    )
    
    
    (922
    )
    
    
    192
    
    
    
    20.8$
    452,165
    
    
    $
    362,974
    
    
    $
    (89,191
    )
    
    
    (24.6
    )%
 Cost of coal sales.
 Depreciation, depletion and amortization and amortization of acquired sales contracts, net.
 Selling, general and administrative expenses.
 17




---



##### Table of Contents



Operating segment results
 Three Months Ended June 30
    
    Increase (Decrease)2010
    
    2009
    
    $
    
    %Powder River BasinTons sold (in thousands)
    
    
    29,927
    
    
    
    20,176
    
    
    
    9,751
    
    
    
    48.3
    %Coal sales realization per ton sold (1)
    
    $
    11.58
    
    
    $
    12.28
    
    
    $
    (0.70
    )
    
    
    (5.7
    )%Operating margin per ton sold (2)
    
    $
    0.80
    
    
    $
    0.43
    
    
    $
    0.37
    
    
    
    86.0
    %Western BituminousTons sold (in thousands)
    
    
    3,995
    
    
    
    3,473
    
    
    
    522
    
    
    
    15.0
    %Coal sales realization per ton sold (1)
    
    $
    30.08
    
    
    $
    29.93
    
    
    $
    0.15
    
    
    
    0.5
    %Operating margin per ton sold (2)
    
    $
    3.09
    
    
    $
    (1.51
    )
    
    $
    4.60
    
    
    
    304.6
    %
 
 (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 the three months
ended June 30, 2010, transportation costs per ton were $0.09 for the Powder River Basin and
$2.98 for the Western Bituminous region. For the three months ended June 30, 2009,
transportation costs per ton were $0.05 for the Powder River Basin and $2.32 for the Western
Bituminous region.(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. Powder River Basin 
 Western Bituminous
 Net interest expense
 (Increase )Decrease inThree Months Ended June 30
    
    
    Net Income2010
    
    
    2009
    
    
    $
    
    
    %(Amounts in thousands, except percentages)Interest expense
    
    $
    (17,571
    )
    
    $
    (15,831
    )
    
    $
    (1,740
    )
    
    
    (11.0
    )%Interest income
    
    
    14,103
    
    
    
    11,566
    
    
    
    2,537
    
    
    
    21.9$
    (3,468
    )
    
    $
    (4,265
    )
    
    $
    797
    
    
    
    18.7
    %
   18




---



##### Table of Contents



Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009
 Summary
 Revenues.
 Six Months Ended June 30
    
    Increase (Decrease)2010
    
    2009
    
    Amount
    
    %(Amounts in thousands, except per ton data and percentages)Coal sales
    
    $
    954,325
    
    
    $
    777,056
    
    
    $
    177,269
    
    
    
    22.8
    %Tons sold
    
    
    67,730
    
    
    
    49,905
    
    
    
    17,825
    
    
    
    35.7
    %Coal sales realization per ton sold
    
    $
    14.09
    
    
    $
    15.57
    
    
    $
    (1.48
    )
    
    
    (9.5
    )%Coal sales increased in the first half of 2010 from the first half of 2009, primarily due
to the contribution of the Jacobs Ranch mining complex to us in the fourth quarter of 2009. Our
coal sales realizations per ton were lower in the first half of 2010 due to lower realizations per
ton in our Powder River Basin segment, as well as the impact on our average selling price of the
higher Powder River Basin volumes. We have provided more information about the tons sold and the
coal sales realizations per ton by operating segment under the heading Operating segment results.Costs, expenses and other.The following table summarizes costs, expenses and other
components of operating income for the six months ended June 30, 2010 and compares them with the
information for the six months ended June 30, 2009:Increase (Decrease)Six Months Ended June 30
    
    
    in Net Income2010
    
    
    2009
    
    
    $
    
    
    %(Amounts in thousands, except percentages)Cost of coal sales
    
    
    794,079
    
    
    
    681,667
    
    
    $
    (112,412
    )
    
    
    (16.5
    )%Depreciation, depletion and amortization
    
    
    84,127
    
    
    
    74,768
    
    
    
    (9,359
    )
    
    
    (12.5
    )Amortization of acquired sales contracts, net
    
    
    15,967
    
    
    
    (170
    )
    
    
    (16,137
    )
    
    
    N/ASelling, general and administrative expenses
    
    
    19,249
    
    
    
    17,068
    
    
    
    (2,181
    )
    
    
    (12.8
    )Other operating income, net
    
    
    (2,504
    )
    
    
    (1,871
    )
    
    
    633
    
    
    
    33.8910,918
    
    
    
    771,462
    
    
    $
    (139,456
    )
    
    
    (18.1
    )%
 Cost of coal sales.
 Depreciation, depletion and amortization and amortization of acquired sales contracts, net.
 Selling, general and administrative expenses.
 19




---



##### Table of Contents



Operating segment results
 Six Months Ended June 30
    
    Increase (Decrease)2010
    
    2009
    
    $
    
    %Powder River BasinTons sold (in thousands)
    
    
    59,608
    
    
    
    42,533
    
    
    
    17,075
    
    
    
    40.2
    %Coal sales realization per ton sold (3)
    
    $
    11.48
    
    
    $
    12.66
    
    
    $
    (1.18
    )
    
    
    (9.3
    )%Operating margin per ton sold (4)
    
    $
    0.56
    
    
    $
    0.79
    
    
    $
    (0.23
    )
    
    
    (29.1
    )%Western BituminousTons sold (in thousands)
    
    
    8,122
    
    
    
    7,372
    
    
    
    750
    
    
    
    10.2
    %Coal sales realization per ton sold (3)
    
    $
    29.52
    
    
    $
    28.96
    
    
    $
    0.56
    
    
    
    1.9
    %Operating margin per ton sold (4)
    
    $
    2.84
    
    
    $
    (1.82
    )
    
    $
    4.66
    
    
    
    256.0
    %
 
 (3)
    
    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 six months
ended June 30, 2010, transportation costs per ton were $0.09 for the Powder River Basin and
$3.08 for the Western Bituminous region. For the six months ended June 30, 2009,
transportation costs per ton were $0.13 for the Powder River Basin and $2.64 for the Western
Bituminous region.(4)
    
    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. Powder River Basin 
 Western Bituminous 
 Net interest expense
 Increase (Decrease) inSix Months Ended June 30
    
    
    Net Income2010
    
    
    2009
    
    
    $
    
    
    %(Amounts in thousands, except percentages)Interest expense
    
    $
    (35,074
    )
    
    $
    (33,349
    )
    
    $
    (1,725
    )
    
    
    (5.2
    )%Interest income
    
    
    26,018
    
    
    
    23,366
    
    
    
    2,652
    
    
    
    11.3
    %$
    (9,056
    )
    
    $
    (9,983
    )
    
    $
    927
    
    
    
    9.3
    %
   20




---



##### Table of Contents



Liquidity and Capital Resources
 Liquidity and capital resources
       21




---



##### Table of Contents



Six Months Ended June 302010
    
    2009(in thousands)Cash provided by (used in):Operating activities
    
    $
    196,408
    
    
    $
    55,699Investing activities
    
    
    (184,094
    )
    
    
    (23,881
    )Financing activities
    
    
    13,373
    
    
    
    (27,052
    )
    Critical Accounting Policies
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    
 Item 4.
    
    Controls and Procedures.
  22




---



##### Table of Contents



PART II
OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors.
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3.
    
    Defaults Upon Senior Securities.
  
 Item 4.
    
    Reserved
 
 Item 5.
    
    Other Information.
   
    
    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;
    
    Total number of orders issued under section 104(b) of the Mine Act;
    
    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;
    
    Total number of imminent danger orders issued under section 107(a) of the Mine Act; and
    
    Total dollar value of proposed assessments from MSHA under the Mine Act.
 23




---



##### Table of Contents



Mine ActSection 104
    
    
    
    
    
    Mine Act Section
    
    Mine ActSignificant
    
    
    
    
    
    104(d)
    
    Section 107(a)
    
    Total Dollar Value ofand
    
    Mine Act
    
    Unwarrantable
    
    Imminent
    
    Proposed MSHASubstantial
    
    Section 104(b)
    
    Failure
    
    Danger
    
    AssessmentsMining complex(1)
    
    Citations
    
    Orders
    
    Citations/Orders
    
    Orders
    
    (in thousands)(2)Power River Basin:Black Thunder
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12Coal Creek
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Western Bituminous:Arch of Wyoming
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Dugout Canyon
    
    
    16
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    $
    10Skyline
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4Sufco
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    22West Elk
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    $
    91
 
 (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 of our
Annual Report on Form 10-K for the fiscal year ended December 31, 2009.(2)
    
    Amounts included under the heading Proposed MSHA Assessments are the total
dollar amounts for proposed assessments received from MSHA on or before August 4, 2010, for
citations and orders occurring during the three-month period ended June 30, 2010.    
 Item 6.
    
    Exhibits.
  Exhibit
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Paul A. Lang.31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of John T. Drexler.32.1
    
    Section 1350 Certification of Paul A. Lang.32.2
    
    Section 1350 Certification of John T. Drexler.
 24




---



##### Table of Contents



Signatures
  Arch Western Resources, LLCBy:
    /s/ John T. DrexlerJohn T. DrexlerVice PresidentAugust 16, 2010 25