UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM
10-Q/A
 Amendment No. 1
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2008
 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
    
    43-1811130(State or other jurisdiction 
of incorporation or organization)
    
    (I.R.S. Employer
Identification Number)One CityPlace Drive, Suite 300, St. Louis, Missouri
    
    63141(Address of principal executive offices)
    
    (Zip code)
  þ 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




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##### 



Explanatory Note




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##### 



PART I
FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands)
 Three Months Ended September 30
    
    
    Nine Months Ended September 302008
    
    
    2007
    
    
    2008
    
    
    2007(unaudited)REVENUESCoal sales
    
    $
    440,718
    
    
    $
    405,055
    
    
    $
    1,337,880
    
    
    $
    1,161,610COSTS, EXPENSES AND OTHERCost of coal sales
    
    
    363,500
    
    
    
    317,541
    
    
    
    1,059,349
    
    
    
    908,879Depreciation, depletion and amortization
    
    
    37,243
    
    
    
    35,200
    
    
    
    114,769
    
    
    
    100,658Selling, general and administrative expenses
allocated from Arch Coal, Inc.
    
    
    5,391
    
    
    
    6,258
    
    
    
    22,281
    
    
    
    19,196Other operating income, net
    
    
    (1,048
    )
    
    
    (808
    )
    
    
    (3,168
    )
    
    
    (8,794
    )405,086
    
    
    
    358,191
    
    
    
    1,193,231
    
    
    
    1,019,939Income from operations
    
    
    35,632
    
    
    
    46,864
    
    
    
    144,649
    
    
    
    141,671Interest income, net:Interest expense
    
    
    (15,237
    )
    
    
    (18,119
    )
    
    
    (48,819
    )
    
    
    (53,818
    )Interest income, primarily from Arch Coal, Inc.
    
    
    19,065
    
    
    
    26,429
    
    
    
    59,064
    
    
    
    73,6403,828
    
    
    
    8,310
    
    
    
    10,245
    
    
    
    19,822Non-operating expense
    
    
    
    
    
    
    (607
    )
    
    
    
    
    
    
    (3,146
    )Income before minority interest
    
    
    39,460
    
    
    
    54,567
    
    
    
    154,894
    
    
    
    158,347Minority interest
    
    
    (3,722
    )
    
    
    (4,460
    )
    
    
    (9,475
    )
    
    
    (14,024
    )Net income
    
    $
    35,738
    
    
    $
    50,107
    
    
    $
    145,419
    
    
    $
    144,323Net income attributable to redeemable
membership interest
    
    $
    179
    
    
    $
    251
    
    
    $
    727
    
    
    $
    722Net income attributable to non-redeemable
membership interest
    
    $
    35,559
    
    
    $
    49,856
    
    
    $
    144,692
    
    
    $
    143,601
  1




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##### 



Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,419
    
    
    $
    248Receivables
    
    
    3,249
    
    
    
    3,559Inventories
    
    
    123,134
    
    
    
    141,626Other
    
    
    20,418
    
    
    
    27,128Total current assets
    
    
    152,220
    
    
    
    172,561Property, plant and equipment, net
    
    
    1,338,556
    
    
    
    1,225,993Other assets:Receivable from Arch Coal, Inc.
    
    
    1,549,172
    
    
    
    1,427,833Other
    
    
    25,052
    
    
    
    25,800Total other assets
    
    
    1,574,224
    
    
    
    1,453,633Total assets
    
    $
    3,065,000
    
    
    $
    2,852,187LIABILITIES AND MEMBERSHIP INTERESTSCurrent liabilities:Accounts payable
    
    $
    103,130
    
    
    $
    82,254Accrued expenses
    
    
    111,090
    
    
    
    128,754Commercial paper
    
    
    98,060
    
    
    
    74,959Total current liabilities
    
    
    312,280
    
    
    
    285,967Long-term debt
    
    
    956,490
    
    
    
    957,514Asset retirement obligations
    
    
    206,043
    
    
    
    194,190Accrued postretirement benefits other than pension
    
    
    39,032
    
    
    
    36,805Accrued workers compensation
    
    
    8,920
    
    
    
    8,784Other noncurrent liabilities
    
    
    49,369
    
    
    
    30,725Total liabilities
    
    
    1,572,134
    
    
    
    1,513,985Redeemable membership interest
    
    
    8,723
    
    
    
    8,000Minority interest
    
    
    192,493
    
    
    
    183,018Non-redeemable membership interest
    
    
    1,291,650
    
    
    
    1,147,184Total liabilities and membership interests
    
    $
    3,065,000
    
    
    $
    2,852,187
  2




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##### 



Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
 Nine Months Ended September 302008
    
    
    2007(unaudited)OPERATING ACTIVITIESNet income
    
    $
    145,419
    
    
    $
    144,323Adjustments to reconcile net income to cash provided by operating activities:Depreciation, depletion and amortization
    
    
    114,769
    
    
    
    100,658Prepaid royalties expensed
    
    
    95
    
    
    
    3,440Net gain on dispositions of property, plant and equipment
    
    
    (336
    )
    
    
    (5,923
    )Minority interest
    
    
    9,475
    
    
    
    14,024Other non-operating expense
    
    
    
    
    
    
    3,146Changes in:Receivables
    
    
    310
    
    
    
    12,673Inventories
    
    
    18,492
    
    
    
    (9,851
    )Accounts payable and accrued expenses
    
    
    3,236
    
    
    
    (35,176
    )Other
    
    
    29,587
    
    
    
    36,556Cash provided by operating activities
    
    
    321,047
    
    
    
    263,870INVESTING ACTIVITIESCapital expenditures
    
    
    (230,829
    )
    
    
    (99,830
    )Increase in receivable from Arch Coal, Inc.
    
    
    (110,791
    )
    
    
    (238,297
    )Proceeds from dispositions of property, plant and equipment
    
    
    378
    
    
    
    6,338Additions to prepaid royalties
    
    
    (200
    )
    
    
    (200
    )Reimbursement of deposits on equipment
    
    
    2,697
    
    
    
    18,325Cash used in investing activities
    
    
    (338,745
    )
    
    
    (313,664
    )FINANCING ACTIVITIESNet proceeds from commercial paper
    
    
    23,102
    
    
    
    49,992Debt financing costs
    
    
    (233
    )
    
    
    (139
    )Cash provided by financing activities
    
    
    22,869
    
    
    
    49,853Increase in cash and cash equivalents
    
    
    5,171
    
    
    
    59Cash and cash equivalents, beginning of period
    
    
    248
    
    
    
    186Cash and cash equivalents, end of period
    
    $
    5,419
    
    
    $
    245
  3




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##### 



Arch Western Resources, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Basis of Presentation
   2. Accounting Policies
 Accounting Pronouncements Adopted
 Fair Value Measurements
 The Fair Value Option
for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Accounting Standards Issued and Not Yet Adopted
 Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51
 Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active
 4




---



##### 



3. Inventories
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Coal
    
    $
    18,238
    
    
    $
    42,942Repair parts and supplies, net of allowance
    
    
    104,896
    
    
    
    98,684$
    123,134
    
    
    $
    141,626
 4. Property Transactions
  5. Debt
  6. Comprehensive Income
 Reporting
Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Net income
    
    $
    35,738
    
    
    $
    50,107
    
    
    $
    145,419
    
    
    $
    144,323Other comprehensive income:Net pension, postretirement and other
post-employment benefits adjustments
reclassified to income
    
    
    (318
    )
    
    
    371
    
    
    
    (158
    )
    
    
    1,243Net losses on derivatives reclassified to income
    
    
    
    
    
    
    607
    
    
    
    
    
    
    
    3,146Total comprehensive income
    
    $
    35,420
    
    
    $
    51,085
    
    
    $
    145,261
    
    
    $
    148,712
 7. Related Party Transactions
   5




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##### 



8. Contingencies
  9. Segment Information
   6




---



##### 



Corporate,Other andPRB
    
    WBIT
    
    Eliminations
    
    Consolidated(In thousands)Three months ended September 30, 2008Coal sales
    
    $
    280,365
    
    
    $
    160,353
    
    
    $
    
    
    
    $
    440,718Income (loss) from operations
    
    
    16,254
    
    
    
    22,788
    
    
    
    (3,410
    )
    
    
    35,632Total assets
    
    
    1,798,793
    
    
    
    2,049,686
    
    
    
    (783,479
    )
    
    
    3,065,000Depreciation, depletion and amortization
    
    
    19,132
    
    
    
    18,111
    
    
    
    
    
    
    
    37,243Capital expenditures
    
    
    29,432
    
    
    
    30,017
    
    
    
    
    
    
    
    59,449Three months ended September 30, 2007Coal sales
    
    $
    261,150
    
    
    $
    143,905
    
    
    $
    
    
    
    $
    405,055Income (loss) from operations
    
    
    29,226
    
    
    
    23,228
    
    
    
    (5,590
    )
    
    
    46,864Total assets
    
    
    1,686,897
    
    
    
    1,892,733
    
    
    
    (819,475
    )
    
    
    2,760,155Depreciation, depletion and amortization
    
    
    18,276
    
    
    
    16,924
    
    
    
    
    
    
    
    35,200Capital expenditures
    
    
    7,397
    
    
    
    17,737
    
    
    
    
    
    
    
    25,134Nine months ended September 30, 2008Coal sales
    
    $
    824,621
    
    
    $
    513,259
    
    
    $
    
    
    
    $
    1,337,880Income (loss) from operations
    
    
    65,303
    
    
    
    101,391
    
    
    
    (22,045
    )
    
    
    144,649Depreciation, depletion and amortization
    
    
    55,481
    
    
    
    59,288
    
    
    
    
    
    
    
    114,769Capital expenditures
    
    
    105,994
    
    
    
    124,835
    
    
    
    
    
    
    
    230,829Nine months ended September 30, 2007Coal sales
    
    $
    750,566
    
    
    $
    411,044
    
    
    $
    
    
    
    $
    1,161,610Income (loss) from operations
    
    
    85,078
    
    
    
    68,836
    
    
    
    (12,243
    )
    
    
    141,671Depreciation, depletion and amortization
    
    
    52,029
    
    
    
    48,629
    
    
    
    
    
    
    
    100,658Capital expenditures
    
    
    21,483
    
    
    
    78,347
    
    
    
    
    
    
    
    99,830
  Three Months Ended
    
    
    Nine Months EndedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Income from operations
    
    $
    35,632
    
    
    $
    46,864
    
    
    $
    144,649
    
    
    $
    141,671Interest expense
    
    
    (15,237
    )
    
    
    (18,119
    )
    
    
    (48,819
    )
    
    
    (53,818
    )Interest income
    
    
    19,065
    
    
    
    26,429
    
    
    
    59,064
    
    
    
    73,640Non-operating expense
    
    
    
    
    
    
    (607
    )
    
    
    
    
    
    
    (3,146
    )Income before minority interest
    
    $
    39,460
    
    
    $
    54,567
    
    
    $
    154,894
    
    
    $
    158,347
 10. Supplemental Condensed Consolidating Financial Information
  7




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##### 



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended September 30, 2008
(in thousands)
 Non-Parent
    
    
    
    
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    323,277
    
    
    $
    117,441
    
    
    $
    
    
    
    $
    440,718Cost of coal sales
    
    
    (1,744
    )
    
    
    
    
    
    
    274,979
    
    
    
    90,965
    
    
    
    (700
    )
    
    
    363,500Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    22,270
    
    
    
    14,973
    
    
    
    
    
    
    
    37,243Selling, general and administrative
expenses allocated from Arch Coal
    
    
    5,391
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,391Other operating income, net
    
    
    (237
    )
    
    
    
    
    
    
    (431
    )
    
    
    (1,080
    )
    
    
    700
    
    
    
    (1,048
    )3,410
    
    
    
    
    
    
    
    296,818
    
    
    
    104,858
    
    
    
    
    
    
    
    405,086Income from investment in subsidiaries
    
    
    42,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42,187
    )
    
    
    Income from operations
    
    
    38,777
    
    
    
    
    
    
    
    26,459
    
    
    
    12,583
    
    
    
    (42,187
    )
    
    
    35,632Interest expense
    
    
    (18,069
    )
    
    
    (12,616
    )
    
    
    (117
    )
    
    
    (466
    )
    
    
    16,031
    
    
    
    (15,237
    )Interest income, primarily from Arch Coal
    
    
    18,752
    
    
    
    16,031
    
    
    
    54
    
    
    
    259
    
    
    
    (16,031
    )
    
    
    19,065683
    
    
    
    3,415
    
    
    
    (63
    )
    
    
    (207
    )
    
    
    
    
    
    
    3,828Minority interest
    
    
    (3,722
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,722
    )Net income
    
    $
    35,738
    
    
    $
    3,415
    
    
    $
    26,396
    
    
    $
    12,376
    
    
    $
    (42,187
    )
    
    $
    35,738
 8




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended September 30, 2007
(in thousands)
 Non-Parent
    
    
    
    
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales revenues
    
    $
    
    
    
    $
    
    
    
    $
    299,503
    
    
    $
    105,552
    
    
    $
    
    
    
    $
    405,055Cost of coal sales
    
    
    (618
    )
    
    
    
    
    
    
    238,234
    
    
    
    80,558
    
    
    
    (633
    )
    
    
    317,541Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    23,534
    
    
    
    11,666
    
    
    
    
    
    
    
    35,200Selling, general and administrative
expenses allocated from Arch Coal
    
    
    6,258
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,258Other operating income
    
    
    (50
    )
    
    
    
    
    
    
    (565
    )
    
    
    (826
    )
    
    
    633
    
    
    
    (808
    )5,590
    
    
    
    
    
    
    
    261,203
    
    
    
    91,398
    
    
    
    
    
    
    
    358,191Income from investment in subsidiaries
    
    
    53,022
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,022
    )
    
    
    Income from operations
    
    
    47,432
    
    
    
    
    
    
    
    38,300
    
    
    
    14,154
    
    
    
    (53,022
    )
    
    
    46,864Interest expense
    
    
    (18,144
    )
    
    
    (15,311
    )
    
    
    (107
    )
    
    
    (587
    )
    
    
    16,030
    
    
    
    (18,119
    )Interest income, primarily from Arch Coal
    
    
    25,886
    
    
    
    16,030
    
    
    
    115
    
    
    
    428
    
    
    
    (16,030
    )
    
    
    26,4297,742
    
    
    
    719
    
    
    
    8
    
    
    
    (159
    )
    
    
    
    
    
    
    8,310Non-operating expense
    
    
    (607
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (607
    )Minority interest
    
    
    (4,460
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,460
    )Net income
    
    $
    50,107
    
    
    $
    719
    
    
    $
    38,308
    
    
    $
    13,995
    
    
    $
    (53,022
    )
    
    $
    50,107
 9




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Nine Months Ended September 30, 2008
(in thousands)
 Non-Parent
    
    
    
    
    
    
    Guarantor
    
    
    GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    1,015,659
    
    
    $
    322,221
    
    
    $
    
    
    
    $
    1,337,880Cost of coal sales
    
    
    78
    
    
    
    
    
    
    
    813,546
    
    
    
    247,547
    
    
    
    (1,822
    )
    
    
    1,059,349Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    68,439
    
    
    
    46,330
    
    
    
    
    
    
    
    114,769Selling, general and administrative
expenses allocated from Arch Coal
    
    
    22,281
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,281Other operating income, net
    
    
    (314
    )
    
    
    
    
    
    
    (2,095
    )
    
    
    (2,581
    )
    
    
    1,822
    
    
    
    (3,168
    )22,045
    
    
    
    
    
    
    
    879,890
    
    
    
    291,296
    
    
    
    
    
    
    
    1,193,231Income from investment in subsidiaries
    
    
    174,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (174,019
    )
    
    
    Income from operations
    
    
    151,974
    
    
    
    
    
    
    
    135,769
    
    
    
    30,925
    
    
    
    (174,019
    )
    
    
    144,649Interest expense
    
    
    (55,141
    )
    
    
    (40,027
    )
    
    
    (393
    )
    
    
    (1,352
    )
    
    
    48,094
    
    
    
    (48,819
    )Interest income, primarily from Arch Coal
    
    
    58,061
    
    
    
    48,094
    
    
    
    196
    
    
    
    807
    
    
    
    (48,094
    )
    
    
    59,0642,920
    
    
    
    8,067
    
    
    
    (197
    )
    
    
    (545
    )
    
    
    
    
    
    
    10,245Minority interest
    
    
    (9,475
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,475
    )Net income
    
    $
    145,419
    
    
    $
    8,067
    
    
    $
    135,572
    
    
    $
    30,380
    
    
    $
    (174,019
    )
    
    $
    145,419
 10




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Nine Months Ended September 30, 2007
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCoal sales
    
    $
    
    
    
    $
    
    
    
    $
    870,193
    
    
    $
    291,417
    
    
    $
    
    
    
    $
    1,161,610Cost of coal sales
    
    
    (838
    )
    
    
    
    
    
    
    692,866
    
    
    
    218,746
    
    
    
    (1,895
    )
    
    
    908,879Depreciation, depletion and amortization
    
    
    
    
    
    
    
    
    
    
    67,362
    
    
    
    33,296
    
    
    
    
    
    
    
    100,658Selling, general and administrative
expenses allocated from Arch Coal
    
    
    19,196
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,196Other operating (income) expense
    
    
    (6,115
    )
    
    
    
    
    
    
    (1,912
    )
    
    
    (2,662
    )
    
    
    1,895
    
    
    
    (8,794
    )12,243
    
    
    
    
    
    
    
    758,316
    
    
    
    249,380
    
    
    
    
    
    
    
    1,019,939Income from investment in subsidiaries
    
    
    155,721
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155,721
    )
    
    
    Income from operations
    
    
    143,478
    
    
    
    
    
    
    
    111,877
    
    
    
    42,037
    
    
    
    (155,721
    )
    
    
    141,671Interest expense
    
    
    (54,065
    )
    
    
    (45,747
    )
    
    
    (311
    )
    
    
    (1,776
    )
    
    
    48,081
    
    
    
    (53,818
    )Interest income, primarily from Arch Coal
    
    
    72,080
    
    
    
    48,081
    
    
    
    351
    
    
    
    1,209
    
    
    
    (48,081
    )
    
    
    73,64018,015
    
    
    
    2,334
    
    
    
    40
    
    
    
    (567
    )
    
    
    
    
    
    
    19,822Non-operating expense
    
    
    (3,146
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,146
    )Minority interest
    
    
    (14,024
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,024
    )Net income (loss)
    
    $
    144,323
    
    
    $
    2,334
    
    
    $
    111,917
    
    
    $
    41,470
    
    
    $
    (155,721
    )
    
    $
    144,323
 11




---



##### 



CONDENSED CONSOLIDATING BALANCE SHEETS
September 30, 2008
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash and cash equivalents
    
    $
    5,327
    
    
    $
    
    
    
    $
    26
    
    
    $
    66
    
    
    $
    
    
    
    $
    5,419Receivables
    
    
    904
    
    
    
    
    
    
    
    1,322
    
    
    
    1,023
    
    
    
    
    
    
    
    3,249Inventories
    
    
    
    
    
    
    
    
    
    
    98,407
    
    
    
    24,727
    
    
    
    
    
    
    
    123,134Other
    
    
    2,945
    
    
    
    2,157
    
    
    
    6,935
    
    
    
    8,381
    
    
    
    
    
    
    
    20,418Total current assets
    
    
    9,176
    
    
    
    2,157
    
    
    
    106,690
    
    
    
    34,197
    
    
    
    
    
    
    
    152,220Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    1,007,282
    
    
    
    331,274
    
    
    
    
    
    
    
    1,338,556Investment in subsidiaries
    
    
    2,317,081
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,317,081
    )
    
    
    Receivable from Arch Coal, Inc.
    
    
    1,512,419
    
    
    
    
    
    
    
    
    
    
    
    36,753
    
    
    
    
    
    
    
    1,549,172Intercompanies
    
    
    (2,209,985
    )
    
    
    973,976
    
    
    
    1,101,979
    
    
    
    134,030
    
    
    
    
    
    
    
    Other
    
    
    960
    
    
    
    8,007
    
    
    
    11,517
    
    
    
    4,568
    
    
    
    
    
    
    
    25,052Total other assets
    
    
    1,620,475
    
    
    
    981,983
    
    
    
    1,113,496
    
    
    
    175,351
    
    
    
    (2,317,081
    )
    
    
    1,574,224Total assets
    
    $
    1,629,651
    
    
    $
    984,140
    
    
    $
    2,227,468
    
    
    $
    540,822
    
    
    $
    (2,317,081
    )
    
    $
    3,065,000Accounts payable
    
    $
    2,272
    
    
    $
    
    
    
    $
    83,095
    
    
    $
    17,763
    
    
    $
    
    
    
    $
    103,130Accrued expenses
    
    
    3,843
    
    
    
    16,031
    
    
    
    81,081
    
    
    
    10,135
    
    
    
    
    
    
    
    111,090Commercial paper
    
    
    98,060
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,060Total current liabilities
    
    
    104,175
    
    
    
    16,031
    
    
    
    164,176
    
    
    
    27,898
    
    
    
    
    
    
    
    312,280Long-term debt
    
    
    
    
    
    
    956,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    956,490Accrued postretirement benefits other
than pension
    
    
    25,608
    
    
    
    
    
    
    
    2,486
    
    
    
    10,938
    
    
    
    
    
    
    
    39,032Asset retirement obligations
    
    
    
    
    
    
    
    
    
    
    193,120
    
    
    
    12,923
    
    
    
    
    
    
    
    206,043Accrued workers compensation
    
    
    4,232
    
    
    
    
    
    
    
    643
    
    
    
    4,045
    
    
    
    
    
    
    
    8,920Other noncurrent liabilities
    
    
    2,770
    
    
    
    
    
    
    
    40,389
    
    
    
    6,210
    
    
    
    
    
    
    
    49,369Total liabilities
    
    
    136,785
    
    
    
    972,521
    
    
    
    400,814
    
    
    
    62,014
    
    
    
    
    
    
    
    1,572,134Redeemable membership interest
    
    
    8,723
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,723Minority interest
    
    
    192,493
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    192,493Non-redeemable membership interest
    
    
    1,291,650
    
    
    
    11,619
    
    
    
    1,826,654
    
    
    
    478,808
    
    
    
    (2,317,081
    )
    
    
    1,291,650Total liabilities and membership
interests
    
    $
    1,629,651
    
    
    $
    984,140
    
    
    $
    2,227,468
    
    
    $
    540,822
    
    
    $
    (2,317,081
    )
    
    $
    3,065,000
 12




---



##### 



CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2007
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash and cash equivalents
    
    $
    78
    
    
    $
    
    
    
    $
    16
    
    
    $
    154
    
    
    $
    
    
    
    $
    248Receivables
    
    
    1,145
    
    
    
    
    
    
    
    1,224
    
    
    
    1,190
    
    
    
    
    
    
    
    3,559Inventories
    
    
    
    
    
    
    
    
    
    
    98,638
    
    
    
    42,988
    
    
    
    
    
    
    
    141,626Other
    
    
    11,342
    
    
    
    2,153
    
    
    
    5,868
    
    
    
    7,765
    
    
    
    
    
    
    
    27,128Total current assets
    
    
    12,565
    
    
    
    2,153
    
    
    
    105,746
    
    
    
    52,097
    
    
    
    
    
    
    
    172,561Property, plant and equipment, net
    
    
    
    
    
    
    
    
    
    
    864,575
    
    
    
    361,418
    
    
    
    
    
    
    
    1,225,993Investment in subsidiaries
    
    
    2,140,722
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,140,722
    )
    
    
    Receivable from Arch Coal, Inc.
    
    
    1,399,046
    
    
    
    
    
    
    
    (112
    )
    
    
    28,899
    
    
    
    
    
    
    
    1,427,833Intercompanies
    
    
    (2,105,212
    )
    
    
    981,359
    
    
    
    1,064,385
    
    
    
    59,468
    
    
    
    
    
    
    
    Other
    
    
    802
    
    
    
    9,617
    
    
    
    11,611
    
    
    
    3,770
    
    
    
    
    
    
    
    25,800Total other assets
    
    
    1,435,358
    
    
    
    990,976
    
    
    
    1,075,884
    
    
    
    92,137
    
    
    
    (2,140,722
    )
    
    
    1,453,633Total assets
    
    $
    1,447,923
    
    
    $
    993,129
    
    
    $
    2,046,205
    
    
    $
    505,652
    
    
    $
    (2,140,722
    )
    
    $
    2,852,187Accounts payable
    
    $
    3,434
    
    
    $
    
    
    
    $
    62,504
    
    
    $
    16,316
    
    
    $
    
    
    
    $
    82,254Accrued expenses
    
    
    2,863
    
    
    
    32,063
    
    
    
    83,515
    
    
    
    10,313
    
    
    
    
    
    
    
    128,754Commercial paper
    
    
    74,959
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,959Total current liabilities
    
    
    81,256
    
    
    
    32,063
    
    
    
    146,019
    
    
    
    26,629
    
    
    
    
    
    
    
    285,967Long-term debt
    
    
    
    
    
    
    957,514
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    957,514Accrued postretirement benefits other
than pension
    
    
    24,482
    
    
    
    
    
    
    
    2,485
    
    
    
    9,838
    
    
    
    
    
    
    
    36,805Asset retirement obligations
    
    
    
    
    
    
    
    
    
    
    182,101
    
    
    
    12,089
    
    
    
    
    
    
    
    194,190Accrued workers compensation
    
    
    4,293
    
    
    
    
    
    
    
    1,053
    
    
    
    3,438
    
    
    
    
    
    
    
    8,784Other noncurrent liabilities
    
    
    (310
    )
    
    
    
    
    
    
    25,886
    
    
    
    5,149
    
    
    
    
    
    
    
    30,725Total liabilities
    
    
    109,721
    
    
    
    989,577
    
    
    
    357,544
    
    
    
    57,143
    
    
    
    
    
    
    
    1,513,985Redeemable membership interest
    
    
    8,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,000Minority interest
    
    
    183,018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183,018Non-redeemable membership interest
    
    
    1,147,184
    
    
    
    3,552
    
    
    
    1,688,661
    
    
    
    448,509
    
    
    
    (2,140,722
    )
    
    
    1,147,184Total liabilities and membership
interests
    
    $
    1,447,923
    
    
    $
    993,129
    
    
    $
    2,046,205
    
    
    $
    505,652
    
    
    $
    (2,140,722
    )
    
    $
    2,852,187
 13




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2008
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    ConsolidatedCash provided by (used in) operating
activities
    
    $
    (19,582
    )
    
    $
    (7,369
    )
    
    $
    282,710
    
    
    $
    65,288
    
    
    $
    321,047Investing ActivitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (248,046
    )
    
    
    17,217
    
    
    
    (230,829
    )Increase in receivable from Arch Coal
    
    
    (102,825
    )
    
    
    
    
    
    
    (112
    )
    
    
    (7,854
    )
    
    
    (110,791
    )Proceeds from dispositions of property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    23
    
    
    
    378Additions to prepaid royalties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    (200
    )Reimbursement of deposits on equipment
    
    
    
    
    
    
    
    
    
    
    2,697
    
    
    
    
    
    
    
    2,697Cash used in investing activities
    
    
    (102,825
    )
    
    
    
    
    
    
    (245,106
    )
    
    
    9,186
    
    
    
    (338,745
    )Financing ActivitiesNet proceeds from commercial paper
    
    
    23,102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,102Debt financing costs
    
    
    (219
    )
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (233
    )Transactions with affiliates, net
    
    
    104,773
    
    
    
    7,383
    
    
    
    (37,594
    )
    
    
    (74,562
    )
    
    
    Cash provided by (used in) financing
activities
    
    
    127,656
    
    
    
    7,369
    
    
    
    (37,594
    )
    
    
    (74,562
    )
    
    
    22,869Increase (decrease) in cash and cash equivalents
    
    
    5,249
    
    
    
    
    
    
    
    10
    
    
    
    (88
    )
    
    
    5,171Cash and cash equivalents, beginning of
period
    
    
    78
    
    
    
    
    
    
    
    16
    
    
    
    154
    
    
    
    248Cash and cash equivalents, end of period
    
    $
    5,327
    
    
    $
    
    
    
    $
    26
    
    
    $
    66
    
    
    $
    5,419
 14




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2007
(in thousands)
 Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-GuarantorCompany
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    ConsolidatedCash provided by (used in) operating
activities
    
    $
    (2,464
    )
    
    $
    (13,114
    )
    
    $
    189,338
    
    
    $
    90,110
    
    
    $
    263,870Investing ActivitiesCapital expenditures
    
    
    
    
    
    
    
    
    
    
    (50,431
    )
    
    
    (49,399
    )
    
    
    (99,830
    )Increase in receivable from Arch Coal
    
    
    (237,675
    )
    
    
    
    
    
    
    (2
    )
    
    
    (620
    )
    
    
    (238,297
    )Proceeds from dispositions of property, plant and equipment
    
    
    6,000
    
    
    
    
    
    
    
    259
    
    
    
    79
    
    
    
    6,338Additions to prepaid royalties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    (200
    )Reimbursement of deposits on equipment
    
    
    
    
    
    
    
    
    
    
    18,325
    
    
    
    
    
    
    
    18,325Cash used in investing activities
    
    
    (231,675
    )
    
    
    
    
    
    
    (31,849
    )
    
    
    (50,140
    )
    
    
    (313,664
    )Financing ActivitiesNet proceeds from commercial paper
    
    
    49,992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,992Debt financing costs
    
    
    (139
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (139
    )Transactions with affiliates, net
    
    
    184,424
    
    
    
    13,114
    
    
    
    (157,616
    )
    
    
    (39,922
    )
    
    
    Cash provided by (used in) financing
activities
    
    
    234,277
    
    
    
    13,114
    
    
    
    (157,616
    )
    
    
    (39,922
    )
    
    
    49,853Decrease in cash and cash equivalents
    
    
    138
    
    
    
    
    
    
    
    (127
    )
    
    
    48
    
    
    
    59Cash and cash equivalents, beginning of
period
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    25
    
    
    
    186Cash and cash equivalents, end of period
    
    $
    138
    
    
    $
    
    
    
    $
    34
    
    
    $
    73
    
    
    $
    245
 15




---



##### 



PART II
OTHER INFORMATION
 
 Item 6. Exhibits.
  Exhibit
    
    Description3.1
    
    Certificate of Formation (incorporated herein by reference to
Exhibit 3.3 to the Form S-4 (File No. 333-107569) filed on August
1, 2003 by Arch Western Finance, LLC, Arch Western Resources, LLC,
Arch of Wyoming, LLC, Mountain Coal Company, L.L.C., and Thunder
Basin Coal Company, L.L.C.).3.2
    
    Limited Liability Company Agreement (incorporated herein by
reference to Exhibit 3.4 to the Form S-4 (File No. 333-107569)
filed on August 1, 2003 by Arch Western Finance, LLC, Arch Western
Resources, LLC, Arch of Wyoming, LLC, Mountain Coal Company,
L.L.C., and Thunder Basin Coal Company, L.L.C.).31.1
    
    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.
 23




---



##### 



Signatures
  Arch Western Resources, LLCBy:
    
    /s/ John T. DrexlerJohn T. DrexlerVice PresidentDecember 5, 2008
 24