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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 14, 2008 (May 14, 2008)
Arch Coal, Inc.
(Exact name of registrant as specified in its charter)
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| Delaware
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1-13105
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43-0921172 |
| (State or other jurisdiction of
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(Commission File Number)
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(I.R.S. Employer Identification No.) |
| incorporation) |
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CityPlace One
One CityPlace Drive, Suite 300
St. Louis, Missouri 63141
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: (314) 994-2700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 7.01 Regulation FD Disclosure.
On May 14, 2008, Steven F. Leer, Chairman and Chief Executive Officer of Arch Coal, Inc., will
deliver a presentation at the Merrill Lynch Global Metals, Mining & Steel Conference that will
include written communication comprised of slides. The slides from the presentation are attached
hereto as Exhibit 99.1 and are hereby incorporated by reference.
A copy of the slides will be available at http://investor.archcoal.com/events.cfm for
30 days.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is attached hereto and furnished herewith.
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| Exhibit |
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Description |
99.1
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Slides from the presentation at the Merrill Lynch Global Metals,
Mining & Steel Conference. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Dated: May 14, 2008 |
Arch Coal, Inc.
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By: |
/s/ Robert G. Jones
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Robert G. Jones |
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Vice President – Law, General Counsel and Secretary |
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Exhibit Index
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| Exhibit |
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Description |
99.1
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Slides from the presentation at the Merrill Lynch Global Metals,
Mining & Steel Conference. |
exv99w1
Exhibit 99.1
| Merrill Lynch Global Metals, Mining & Steel Conference |
| Steve Leer, Chairman and CEO Arch Coal, Inc. |
| Key Biscayne, FL
May 14, 2008 |
| Forward-Looking Information |
| This presentation 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
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, you should see the risk
factors described from time to time in the reports we file with the Securities and Exchange
Commission. |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Developing nations will increase energy use, putting pressure on global supply |
| Source: United Nations’ Human Development Report 2007, 2006 World Development Indicators (World
Bank) |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Coal’s advantage: abundant, secure and widely dispersed |
| Based on current production levels and proven reserves, coal should outlast both gas supplies and
oil reserves by roughly 4 times |
| Source: ACI, Bank of America, BP Statistical Review 2007 and Blackwell Energy Research |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Largest U.S. coal plant build-out since 1980 is ongoing, but not enough to satisfy America’s energy
needs |
| · Build-out of 16 GW equates to 54 million tons of new annual
coal demand over next five years |
| – Arch’s reserve base positioned to service two-thirds
of these plants |
| · Roughly 9 GW – another 33 million tons – in advanced permitting
stages |
| · Other fuels used for electric generation are challenged to
grow or represent niche players |
| · Reality is that we need all fuels –along with conservation and
efficiency – to meet our growing energy needs |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Reserve margins for the U.S. power grid will fall below target levels without adequate investment |
| Year when reserve margin is expected to fall below target level, by region |
| America has long had one of the world’s most reliable power systems. Without investment, that could
soon change. |
| Source: NERC 2007 Long-Term Reliability Assessment |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Coal is – and will remain – a vital part of America’s energy future |
| Source: EIA, Platts, Argus Coal Daily and NYMEX |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Over the long term, clean-coal technologies can broaden market demand for coal |
| A plug-in hybrid is one Coal can be converted Gasification can reduce |
| entry for coal into the into transportation fuel emissions and transform |
| transportation market coal into pipeline-quality |
| • Likely to create coal-to-liquids |
| significant off-peak facilities are • IGCC and CCS should |
| demand for electricity economically feasible enable coal to prosper |
| Public policy initiatives aimed at domestic energy security are spurring debate on energy
legislation and incentives for clean-coal technology development |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Since 1970, coal has been used in increasingly clean ways in the United States |
| · More progress is expected under existing regulations |
| · Higher efficiency rates and carbon capture technologies create opportunities for reducing
carbon intensity as well |
| Source: NMA, EPA NOx (Nitrogen Oxide), SO2 (Sulfur Dioxide), PM10 (Particulate Matter) |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Developed nations must adopt climate solutions and export them to developing nations |
| China surpassed the U.S. in GHG
emissions in 2007 |
| The growth rate of GHG emissions in
developing nations is likely to significantly
exceed that of developed nations |
| Developed nations must invest in more clean coal
technology research & development |
| Source: IEA World Energy Outlook 2006, Guardian |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Explosive growth in international coal markets underscores the shortage of energy around the globe |
| Americas Europe/Africa Asia/Pacific
Americas expected to Europe/Africa should Asia’s net exports
almost double net increase its net projected to decline
coal exports in 2008 imports in 2008 significantly in 2008 |
| – Driven by increase in – Significant export – Driven by strong |
| exports from USA declines from economic growth in |
| South Africa developing nations |
| expected to decline – Large switch from – Severe supply |
| from 2007 levels domestic to imported constraints in |
| coal in Europe traditional coal |
| – Driven by lower export nations |
| Global coal supply and demand flows suggest that the world is short of coal by 25 million to 35
million metric tons in 2008, with continued significant supply deficits in 2009 and beyond |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| In the United States, Arch expects growth in coal demand to accelerate over the next three years |
| (in million tons) 2008 2009 2010 |
| Growth at Existing Coal Plants +11 +11 +11
New Coal Plant Demand 1/ 4 22 19
Increase in Gross Exports 20 10 10
Decline in Imports 8 1 -
Incremental Demand Growth +43 +44 +40
Cumulative +87 +127 |
| 1/ Net of coal plant retirements. |
| U.S. coal demand to grow by more than 3% annually through 2010 |
| – U.S. coal generation fleet has increased average utilization by 1 percent annually over
the past 10 years |
| – New coal plant build-out will expand coal consumption meaningfully |
| – U.S. is expected to become a more significant net exporter given shortage of coal supply
worldwide and available port capacity |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| While U.S. generator stockpile levels are comfortable, inventories are declining in the East |
| • Eastern stockpile levels • Western stockpile levels • Total generator stockpile |
| have declined 7.6 million have increased 5.2 levels have declined 2.4 |
| tons year-to-date million tons year-to-date million tons year-to-date |
| • In Central Appalachia, • Expect levels to decline • Typically, stockpiles |
| stocks could fall to near- as demand in the East for build from January |
| critical levels by autumn replacement tons grows through March |
| Source: ACI and Energy Ventures Analysis, Inc. |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| PRB coal has gained market share in border states just east of the Mississippi River |
| Border States East of MS Border States East of MS Border States East of MS |
| Burn by Coal Type circa 1990 Burn by Coal Type circa 1995 Burn by Coal Type circa 2007 |
| • Eastern border state • By 1995, power plants • Current 69 percent |
| power plants in Wisconsin, in these four states mix of PRB coal has |
| Illinois, Tennessee and increased their mix of been achieved with |
| Mississippi historically PRB coal from 22 relatively modest |
| burned a small mix of percent to 42 percent capital investment |
| PRB coal in just five years |
| Source: ACI and Energy Velocity *Border states represent WS, IL, TN and MS |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| We foresee increased PRB market expansion |
| opportunities further east of the Mississippi River |
| · Eastern power plants in non-border states are
generally comparable to plants in the border
states of WS, IL, TN and MS |
| · These non-border state plants could
theoretically increase their mix of PRB coal as
plants in the border states have done |
| · If plants in non-border states were to switch
to PRB coal, the equivalent PRB volume
opportunity would represent a potential of 300
million tons |
| Source: ACI and Energy Velocity |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch Coal is positioned for the future |
| · One of the largest coal producers in the U.S. |
| · Core business is providing U.S. power generators with cleaner-burning, low-sulfur coal for
electric generation |
| – Supplies roughly 12% of U.S. coal needs |
| – Provides source fuel for roughly 6% of U.S. electricity |
| · Talented workforce operates large, modern mines |
| · Industry leader in mine safety, productivity and reclamation |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch’s national scope of operations and reserve base includes presence in four major U.S. coal
basins |
Powder River Basin
1. Coal Creek 2. Black
Thunder |
Western Bituminous
1. Skyline 2.
Dugout 3. Sufco 4.
West Elk |
Illinois Basin
Knight Hawk |
| 1. Mountain Laurel
2. Coal-Mac
3. Cumberland River
4. Lone Mountain |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch is continuing to enhance reputation as a responsible energy company |
| · Operating the world’s safest coal mines |
| – Awarded MSHA’s Sentinels of Safety honor for operating the nation’s safest
underground coal mines in 2006 and 2007 |
| – Ranked first among coal industry peers for safety performance last year |
| · Acting as responsible citizens and good environmental stewards |
| – Inaugural 2007 social responsibility report elevates awareness of Arch’s environmental programs |
| – Earned 3 National Good Neighbor Awards in 4 years |
| · Achieving superior financial performance |
| – Forbes recognized Arch as one of the 100 most trustworthy U.S. companies of 2008 |
| – Expect 2008 to be a record earnings year for Arch |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch has one of the industry’s strongest and cleanest balance sheets |
| Source: SEC filings compiled by ACI |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch’s mines are strategically positioned to respond to dynamic trends in coal markets |
| Central Appalachia Western Bituminous Powder River Basin |
| continents supply pressures in other regions and |
| eastern U.S. are sufficient PRB rail |
| boosting demand capacity should pull |
| markets in 2008; largest producer |
| 5-6 million in 2009 rising domestic prices |
| · Pursuing incremental significant export |
| margin opportunities business export PRB coal |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch is advancing clean-coal technology development via a proposed coal-to-liquids plant in Wyoming |
| · World oil consumption needs are growing, and increasingly
will be supplied by OPEC |
| · CTL can have a positive impact on the U.S. economy,
security and environment |
| · Arch owns an equity interest in DKRW Advanced Fuels |
| · Proposed plant would capture CO2 |
| to enhance recovery in domestic oil
fields |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch’s selective approach to signing new contracts retains future upside potential |
| Source: ACI, Argus Coal Daily 5/9/08 |
| LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL |
| Arch continuously evaluates all avenues for value creation |
| Invest in core businesses to enhance profit growth and return on capital, evaluate
opportunities to further upgrade and expand reserve base |
| Consider investments to expand market for coal (and improve coal’s value proposition) through
Btu-conversion and other advanced coal technologies |
| Consider acquisitions or other investments that strategically fit and create value |
| Capital Structure Enhancement |
| Maintain strong balance sheet, and consider other vehicles for value creation, such as
share repurchases or dividend increases, when advantageous |
| Merrill Lynch Global Metals, Mining & Steel Conference |
Steve Leer, Chairman and CEO Arch Coal, Inc.
Key Biscayne, FL May 14, 2008 |
