þ		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

o		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code: (314) 994-2700

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     At December 5, 2008, the registrant’s common equity consisted solely of undenominated membership interests, 99.5% of which were held by Arch Western Acquisition Corporation and 0.5% of which were held by a subsidiary of BP p.l.c.

 

 

     This Amendment No. 1 to the Quarterly Report on Form 10-Q for the period ended September 30, 2008 is being filed to include the unaudited condensed consolidating financial information for Arch Western Resources, LLC and its issuer, guarantor and non-guarantor subsidiaries that was inadvertently omitted from Note 10 to the unaudited condensed consolidated financial statements included in the Quarterly Report on Form 10-Q filed by the registrant with the Securities and Exchange Commission on November 14, 2008 (the “Original Report”).

     In addition, pursuant to the rules of the Securities and Exchange Commission, Item 6 of Part II to the Original Report has been updated to include currently dated certifications from our principal executive officer and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

     Except as described above, this Form 10-Q/A does not amend, update or change any other items or disclosures included in the Original Report.

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 30
		2008				2007				2008				2007
		(unaudited)
REVENUES
Coal sales		$	440,718			$	405,055			$	1,337,880			$	1,161,610
COSTS, EXPENSES AND OTHER
Cost of coal sales			363,500				317,541				1,059,349				908,879
Depreciation, depletion and amortization			37,243				35,200				114,769				100,658
Selling, general and administrative expenses allocated from Arch Coal, Inc.			5,391				6,258				22,281				19,196
Other operating income, net			(1,048	)			(808	)			(3,168	)			(8,794	)
			405,086				358,191				1,193,231				1,019,939
Income from operations			35,632				46,864				144,649				141,671
Interest 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				73,640
			3,828				8,310				10,245				19,822
Non-operating expense			—				(607	)			—				(3,146	)
Income before minority interest			39,460				54,567				154,894				158,347
Minority interest			(3,722	)			(4,460	)			(9,475	)			(14,024	)
Net income		$	35,738			$	50,107			$	145,419			$	144,323
Net income attributable to redeemable membership interest		$	179			$	251			$	727			$	722
Net income attributable to non-redeemable membership interest		$	35,559			$	49,856			$	144,692			$	143,601

The accompanying notes are an integral part of the condensed consolidated financial statements.

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

The accompanying notes are an integral part of the condensed consolidated financial statements.

Arch Western Resources, LLC and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)

		Nine Months Ended September 30
		2008				2007
		(unaudited)
OPERATING ACTIVITIES
Net income		$	145,419			$	144,323
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization			114,769				100,658
Prepaid royalties expensed			95				3,440
Net gain on dispositions of property, plant and equipment			(336	)			(5,923	)
Minority interest			9,475				14,024
Other non-operating expense			—				3,146
Changes in:
Receivables			310				12,673
Inventories			18,492				(9,851	)
Accounts payable and accrued expenses			3,236				(35,176	)
Other			29,587				36,556
Cash provided by operating activities			321,047				263,870
INVESTING ACTIVITIES
Capital 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				6,338
Additions to prepaid royalties			(200	)			(200	)
Reimbursement of deposits on equipment			2,697				18,325
Cash used in investing activities			(338,745	)			(313,664	)
FINANCING ACTIVITIES
Net proceeds from commercial paper			23,102				49,992
Debt financing costs			(233	)			(139	)
Cash provided by financing activities			22,869				49,853
Increase in cash and cash equivalents			5,171				59
Cash and cash equivalents, beginning of period			248				186
Cash and cash equivalents, end of period		$	5,419			$	245

The accompanying notes are an integral part of the condensed consolidated financial statements.

Arch Western Resources, LLC and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)

1. Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements include the accounts of Arch Western Resources, LLC and its subsidiaries and controlled entities (the “Company”). Arch Coal, Inc. (“Arch Coal”) has a 99.5% common membership interest in the Company, while BP p.l.c. has a 0.5% common membership interest and a 0.5% preferred membership interest in the Company. Intercompany transactions and accounts have been eliminated in consolidation.

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and U.S. Securities and Exchange Commission regulations. In the opinion of management, all adjustments, consisting of normal, recurring accruals considered necessary for a fair presentation, have been included. Results of operations for the three and nine month periods ended September 30, 2008 are not necessarily indicative of results to be expected for the year ending December 31, 2008. These financial statements should be read in conjunction with the audited financial statements and related notes as of and for the year ended December 31, 2007 included in Arch Western Resources, LLC’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.

2. Accounting Policies

     Accounting Pronouncements Adopted

     On January 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“Statement No. 157”). Statement No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements under other accounting pronouncements that require or permit fair value measurements. Statement No. 157 is effective prospectively for financial instruments recorded at fair value on a recurring basis. The FASB deferred the effective date of Statement No. 157 for one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis, which the Company will adopt effective January 1, 2009.

     On January 1, 2008, Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115 (“Statement No. 159”) became effective. Statement No. 159 permits entities the choice to measure certain financial instruments and other items at fair value. The Company did not elect to measure any financial instruments or other items at fair value under Statement No. 159.

     Accounting Standards Issued and Not Yet Adopted

     In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“Statement No. 160”). Statement No. 160 requires that a noncontrolling interest (minority interest) in a consolidated subsidiary be displayed in the consolidated balance sheet as a separate component of equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the consolidated statement of income. Statement No. 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. Statement No. 160 is effective for fiscal years beginning on or after December 15, 2008. Early adoption is not allowed. The Company does not expect that the adoption of Statement No. 160 will have a material impact on the Company’s financial position or results of operations.

     In October 2008, the FASB issued Staff Position FAS 157-3 Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (“FSP FAS 157-3”), effective upon issuance. FSP FAS 157-3 clarifies the application of FASB Statement No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The Company does not expect that the adoption of FSP FAS 157-3 will have a material impact on the Company’s financial position or results of operations.

3. Inventories

     Inventories consist of the following:

		September 30,				December 31,
		2008				2007
		(In thousands)
Coal		$	18,238			$	42,942
Repair parts and supplies, net of allowance			104,896				98,684
		$	123,134			$	141,626

4. Property Transactions

     During the nine months ended September 30, 2007, the Company sold non-strategic reserves in the Powder River Basin and recognized a gain on the sale of $6.0 million, reflected in other operating income, net in the accompanying condensed consolidated statements of income.

5. Debt

     On April 11, 2008, the Company amended its commercial paper placement program and the related revolving credit facility to increase the maximum aggregate principal amount outstanding to $100.0 million from $75.0 million.

6. Comprehensive Income

     Comprehensive income consists of net income and other comprehensive income. Other comprehensive income items under Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, are transactions recorded in membership interests during the year, excluding net income and transactions with members.

     The following table details the components of comprehensive income:

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2008				2007				2008				2007
		(In thousands)
Net income		$	35,738			$	50,107			$	145,419			$	144,323
Other comprehensive income:
Net pension, postretirement and other post-employment benefits adjustments reclassified to income			(318	)			371				(158	)			1,243
Net losses on derivatives reclassified to income			—				607				—				3,146
Total comprehensive income		$	35,420			$	51,085			$	145,261			$	148,712

7. Related Party Transactions

     Transactions with Arch Coal may not be at arms length. If the transactions were negotiated with an unrelated party, the impact could be material to the Company’s results of operations.

     The Company’s cash transactions are managed by Arch Coal. Cash paid to or from the Company that is not considered a distribution or a contribution is recorded in an Arch Coal receivable account. In addition, any amounts owed between the Company and Arch Coal are recorded in the account. At September 30, 2008 and December 31, 2007, the receivable from Arch Coal was $1.5 billion and $1.4 billion, respectively. This amount earns interest from Arch Coal at the prime interest rate. Interest earned on the note was $19.0 million and $26.3 million for the three months ended September 30, 2008 and 2007, respectively, and $58.9 million and $73.2 million for the nine months ended September 30, 2008 and 2007, respectively. The receivable is payable on demand by the Company; however, it is currently management’s intention to not demand payment of the receivable within the next year. Therefore, the receivable is classified on the accompanying condensed consolidated balance sheets as noncurrent.

     On February 10, 2006, Arch Coal established an accounts receivable securitization program. Under the program, the Company sells its receivables to Arch Coal without recourse at a discount based on the prime rate and days sales outstanding. During the three months ended September 30, 2008 and 2007, the Company sold $420.1 million and $374.8 million, respectively, of trade accounts receivable to Arch Coal at a total discount of $1.6 million and $2.4 million, respectively. During the nine months ended September 30, 2008 and 2007, the Company sold $1.3 billion and $1.1 billion, respectively, of trade accounts receivable to Arch Coal at a total discount of $5.8 million and $7.5 million, respectively. These transactions are recorded through the Arch Coal receivable account.

     For each of the three month periods ended September 30, 2008 and 2007, the Company incurred production royalties of $8.7 million payable to Arch Coal under sublease agreements. For each of the nine month periods ended September 30, 2008 and 2007, the Company incurred production royalties of $26.5 million payable to Arch Coal under sublease agreements.

     The Company is charged selling, general and administrative services fees by Arch Coal. Expenses are allocated based on Arch Coal’s best estimates of proportional or incremental costs, whichever is more representative of costs incurred by Arch Coal on behalf of the Company. Amounts allocated to the Company by Arch Coal were $5.4 million and $6.3 million for the three months ended September 30, 2008 and 2007, respectively, and $22.3 million and $19.2 million for the nine months ended September 30, 2008 and 2007, respectively.

8. Contingencies

     The Company is a party to numerous claims and lawsuits with respect to various matters. The Company provides for costs related to contingencies when a loss is probable and the amount is reasonably estimable. After conferring with counsel, it is the opinion of management that the ultimate resolution of pending claims will not have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company.

9. Segment Information

     The Company has two reportable business segments, which are based on the major low-sulfur coal basins in which the Company operates. Both of these reportable business segments include a number of mine complexes. The Company manages its coal sales by coal basin, not by individual mine complex. Geology, coal transportation routes to customers, regulatory environments and coal quality are generally consistent within a basin. Accordingly, market and contract pricing have developed by coal basin. Mine operations are evaluated based on their per-ton operating costs (defined as including all mining costs but excluding pass-through transportation expenses), as well as on other non-financial measures, such as safety and environmental performance. The Company’s reportable segments are the Powder River Basin (PRB) segment, with operations in Wyoming, and the Western Bituminous (WBIT) segment, with operations in Utah, Colorado and southern Wyoming.

     Operating segment results for the three and nine month periods ended September 30, 2008 and 2007 are presented below. Results for the operating segments include all direct costs of mining. Corporate, Other and Eliminations includes corporate overhead, other support functions, and the elimination of intercompany transactions.

										Corporate,
										Other and
		PRB				WBIT				Eliminations				Consolidated
		(In thousands)
Three months ended September 30, 2008
Coal sales		$	280,365			$	160,353			$	—			$	440,718
Income (loss) from operations			16,254				22,788				(3,410	)			35,632
Total assets			1,798,793				2,049,686				(783,479	)			3,065,000
Depreciation, depletion and amortization			19,132				18,111				—				37,243
Capital expenditures			29,432				30,017				—				59,449
Three months ended September 30, 2007
Coal sales		$	261,150			$	143,905			$	—			$	405,055
Income (loss) from operations			29,226				23,228				(5,590	)			46,864
Total assets			1,686,897				1,892,733				(819,475	)			2,760,155
Depreciation, depletion and amortization			18,276				16,924				—				35,200
Capital expenditures			7,397				17,737				—				25,134
Nine months ended September 30, 2008
Coal sales		$	824,621			$	513,259			$	—			$	1,337,880
Income (loss) from operations			65,303				101,391				(22,045	)			144,649
Depreciation, depletion and amortization			55,481				59,288				—				114,769
Capital expenditures			105,994				124,835				—				230,829
Nine months ended September 30, 2007
Coal sales		$	750,566			$	411,044			$	—			$	1,161,610
Income (loss) from operations			85,078				68,836				(12,243	)			141,671
Depreciation, depletion and amortization			52,029				48,629				—				100,658
Capital expenditures			21,483				78,347				—				99,830

     A reconciliation of segment income from operations to consolidated income before minority interest follows:

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2008				2007				2008				2007
		(In thousands)
Income from operations		$	35,632			$	46,864			$	144,649			$	141,671
Interest expense			(15,237	)			(18,119	)			(48,819	)			(53,818	)
Interest income			19,065				26,429				59,064				73,640
Non-operating expense			—				(607	)			—				(3,146	)
Income before minority interest		$	39,460			$	54,567			$	154,894			$	158,347

10. Supplemental Condensed Consolidating Financial Information

     Pursuant to the indenture governing the Arch Western Finance senior notes, certain wholly-owned subsidiaries of the Company have fully and unconditionally guaranteed the senior notes on a joint and several basis. The following tables present unaudited condensed consolidating financial information for (i) the Company, (ii) the issuer of the senior notes (Arch Western Finance, LLC, a wholly-owned subsidiary of the Company), (iii) the Company’s wholly-owned subsidiaries (Thunder Basin Coal Company, L.L.C., Mountain Coal Company, L.L.C., and Arch of Wyoming, LLC), on a combined basis, which are guarantors under the Notes, and (iv) its majority owned subsidiary (Canyon Fuel Company, LLC) which is not a guarantor under the Notes:

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended September 30, 2008
(in thousands)

														Non-
		Parent								Guarantor				Guarantor
		Company				Issuer				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Coal sales		$	—			$	—			$	323,277			$	117,441			$	—			$	440,718
Cost of coal sales			(1,744	)			—				274,979				90,965				(700	)			363,500
Depreciation, depletion and amortization			—				—				22,270				14,973				—				37,243
Selling, general and administrative expenses allocated from Arch Coal			5,391				—				—				—				—				5,391
Other operating income, net			(237	)			—				(431	)			(1,080	)			700				(1,048	)
			3,410				—				296,818				104,858				—				405,086
Income from investment in subsidiaries			42,187				—				—				—				(42,187	)			—
Income from operations			38,777				—				26,459				12,583				(42,187	)			35,632
Interest 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	)			19,065
			683				3,415				(63	)			(207	)			—				3,828
Minority interest			(3,722	)			—				—				—				—				(3,722	)
Net income		$	35,738			$	3,415			$	26,396			$	12,376			$	(42,187	)		$	35,738

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Three Months Ended September 30, 2007
(in thousands)

														Non-
		Parent								Guarantor				Guarantor
		Company				Issuer				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Coal sales revenues		$	—			$	—			$	299,503			$	105,552			$	—			$	405,055
Cost of coal sales			(618	)			—				238,234				80,558				(633	)			317,541
Depreciation, depletion and amortization			—				—				23,534				11,666				—				35,200
Selling, general and administrative expenses allocated from Arch Coal			6,258				—				—				—				—				6,258
Other operating income			(50	)			—				(565	)			(826	)			633				(808	)
			5,590				—				261,203				91,398				—				358,191
Income from investment in subsidiaries			53,022				—				—				—				(53,022	)			—
Income from operations			47,432				—				38,300				14,154				(53,022	)			46,864
Interest 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	)			26,429
			7,742				719				8				(159	)			—				8,310
Non-operating expense			(607	)			—				—				—				—				(607	)
Minority interest			(4,460	)			—				—				—				—				(4,460	)
Net income		$	50,107			$	719			$	38,308			$	13,995			$	(53,022	)		$	50,107

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Nine Months Ended September 30, 2008
(in thousands)

														Non-
		Parent								Guarantor				Guarantor
		Company				Issuer				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Coal sales		$	—			$	—			$	1,015,659			$	322,221			$	—			$	1,337,880
Cost of coal sales			78				—				813,546				247,547				(1,822	)			1,059,349
Depreciation, depletion and amortization			—				—				68,439				46,330				—				114,769
Selling, general and administrative expenses allocated from Arch Coal			22,281				—				—				—				—				22,281
Other operating income, net			(314	)			—				(2,095	)			(2,581	)			1,822				(3,168	)
			22,045				—				879,890				291,296				—				1,193,231
Income from investment in subsidiaries			174,019				—				—				—				(174,019	)			—
Income from operations			151,974				—				135,769				30,925				(174,019	)			144,649
Interest 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	)			59,064
			2,920				8,067				(197	)			(545	)			—				10,245
Minority interest			(9,475	)			—				—				—				—				(9,475	)
Net income		$	145,419			$	8,067			$	135,572			$	30,380			$	(174,019	)		$	145,419

CONDENSED CONSOLIDATING STATEMENTS OF INCOME
Nine Months Ended September 30, 2007
(in thousands)

		Parent								Guarantor				Non-Guarantor
		Company				Issuer				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Coal sales		$	—			$	—			$	870,193			$	291,417			$	—			$	1,161,610
Cost of coal sales			(838	)			—				692,866				218,746				(1,895	)			908,879
Depreciation, depletion and amortization			—				—				67,362				33,296				—				100,658
Selling, general and administrative expenses allocated from Arch Coal			19,196				—				—				—				—				19,196
Other operating (income) expense			(6,115	)							(1,912	)			(2,662	)			1,895				(8,794	)
			12,243				—				758,316				249,380				—				1,019,939
Income from investment in subsidiaries			155,721				—				—				—				(155,721	)			—
Income from operations			143,478				—				111,877				42,037				(155,721	)			141,671
Interest 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	)			73,640
			18,015				2,334				40				(567	)			—				19,822
Non-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

CONDENSED CONSOLIDATING BALANCE SHEETS
September 30, 2008
(in thousands)

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

CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2007
(in thousands)

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

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2008
(in thousands)

		Parent								Guarantor				Non-Guarantor
		Company				Issuer				Subsidiaries				Subsidiaries				Consolidated
Cash provided by (used in) operating activities		$	(19,582	)		$	(7,369	)		$	282,710			$	65,288			$	321,047
Investing Activities
Capital 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				378
Additions to prepaid royalties			—				—				—				(200	)			(200	)
Reimbursement of deposits on equipment			—				—				2,697				—				2,697
Cash used in investing activities			(102,825	)			—				(245,106	)			9,186				(338,745	)
Financing Activities
Net proceeds from commercial paper			23,102				—				—				—				23,102
Debt 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	)			22,869
Increase (decrease) in cash and cash equivalents			5,249				—				10				(88	)			5,171
Cash and cash equivalents, beginning of period			78				—				16				154				248
Cash and cash equivalents, end of period		$	5,327			$	—			$	26			$	66			$	5,419