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):  February 8, 2017 (February 8, 2017)

Arch Coal, Inc.

(Exact name of registrant as specified in its charter)

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))

Item 2.02              Results of Operations and Financial Condition.

On February 8, 2017, Arch Coal, Inc. (the “Company”) issued a press release containing its fourth quarter 2016 financial results.  A copy of the press release is attached hereto as exhibit 99.1.

The information contained in Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01              Financial Statements and Exhibits.

(d)                                 Exhibits

The following exhibits are attached hereto and filed herewith.

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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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Exhibit Index

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Exhibit 99.1

News from

Arch Coal, Inc.

FOR FURTHER INFORMATION:

Logan Bonacorsi
Investor Relations

314/994-2766

FOR IMMEDIATE RELEASE

Arch Coal, Inc. Reports Fourth Quarter 2016 Results

Delivers strong cost performance in each operating segment

Simplified capital structure with solid cash position

Initiates 2017 full-year guidance

ST. LOUIS, Feb. 8, 2017 — Arch Coal, Inc. (NYSE: ARCH) today reported fourth quarter 2016 net income of $33.4 million or $1.31 per diluted share. Revenues for the period totaled $575.7 million on 26.8 million tons of coal sales. The company reported adjusted earnings before interest, taxes, depreciation, depletion, amortization and reorganization items (“adjusted EBITDAR”) of $94.5 million(1).

Notably, less than nine months after filing for Chapter 11, Arch Coal successfully completed its financial restructuring and emerged from bankruptcy as a reorganized company on October 5, 2016. As a result, Arch applied fresh start accounting as of October 1, 2016; therefore, its financial statements after September 30 are not comparable to the financial statements prior to that date. Certain non-GAAP comparative analysis is available in the operational results section of this release and in the investor section of archcoal.com.

“Arch achieved a strong financial and operational performance in the fourth quarter — our first earnings period following the completion of our successful restructuring,” said John W. Eaves, Arch’s chief executive officer. “These results demonstrate the positive momentum in our business and the potential we have to elevate our performance still further as the industry continues to evolve. We are confident in our ability to leverage our strong operating portfolio, commercial and logistical expertise and enhanced financial foundation to deliver long-term value for our shareholders.”

Arch’s Financial Position

As a result of its financial restructuring, the company greatly reduced its total indebtedness and interest expense, creating a strong financial platform fortified to support its operations in every

(1)  Adjusted EBITDAR is defined and reconciled in the “Reconciliation of Non-GAAP measures” in this release.

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phase of the coal market cycle. In total, the company eliminated nearly $4.8 billion of debt obligations and $330 million of annual cash interest expense. Currently, Arch’s debt level totals $363 million, with approximately $38 million of annual interest expense. Taking into account reorganization payments made at the time of emergence, Arch’s cash and short-term investment balance grew from $309 million at September 30 to over $393 million at December 31.

“Our successful financial restructuring has dramatically transformed our capital structure, enhanced our balance sheet and provided the kind of financial flexibility that will enable us to compete successfully in today’s marketplace,” said John T. Drexler, Arch’s senior vice president and chief financial officer. “Our fourth quarter performance illustrates the overall strength of the new Arch Coal, and our liquidity position will enable us to execute our strategy, capitalize fully on our low-cost operating portfolio, and generate long-term shareholder value.”

Arch’s Fundamental Foundation

Arch remains a leader in surface and underground mine safety, with a total incident rate more than two times better than the industry average. During 2016, Arch operations were honored with the top state safety awards in West Virginia, Wyoming and Colorado. Arch was also honored with a national Sentinels of Safety award and its Leer operation was recognized by the National Institute for Occupational Safety and Health (NIOSH) with the Technology Innovation Award.

Arch once again excelled in environmental stewardship, recording a company-best performance, with nine complexes completing 2016 with a perfect environmental record as measured by the Surface Mining Control and Reclamation Act (SMCRA). In the past year, dedication to environmental management has earned Arch and its subsidiaries 11 significant state awards, including top reclamation accolades in West Virginia, Wyoming and Colorado.

“Through the unwavering commitment of our entire workforce, Arch continues to stand out among its peers in safety and environmental performance,” said Paul A. Lang, Arch’s president and chief operating officer. “We have long believed that safe and responsible operations are the most efficient operations, and we will continue to focus diligently on the core values that serve as the foundation of our company.”

Arch’s Operational Results

“Our operations turned in a solid cost performance during the fourth quarter of 2016 — with the metallurgical portfolio reinforcing our low-cost position among U.S. metallurgical suppliers,” said Lang.  “Looking ahead we will continue to focus on maintaining our disciplined approach to cost control, maximizing the value of our diverse product slate and expanding margins in each of our operating segments.”

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Cash cost per ton is defined and reconciled under “Reconciliation of non-GAAP measures”.

Mining complexes included in this segement are Beckley, Leer, Lone Mountain, Mountain Laurel and Sentinel

In the Metallurgical segment, the company shipped 1.7 million tons of coking coal at an average realized price of $75.36 per ton, a 30-percent increase over the average realized price in the prior quarter, with the remaining volume consisting of a mix of pulverized coal injection (PCI), thermal and lower quality thermal byproduct coal. Realizations benefited from higher pricing on new coking coal sales and stronger pricing on index-based contracts that shipped during the quarter. During the fourth quarter, segment cash margins expanded more than three-fold compared to the prior quarter, reaching $12.63 per ton, with the average sales price increasing $10.24 per ton. Stronger pricing on coking and PCI sales helped offset the impact of increased shipments of lower-priced thermal and thermal byproduct coal. Two planned longwall moves in the region contributed to the modest increase in cash costs when compared with the third quarter. Arch believes its metallurgical segment costs are at the very low end of the industry cost curve.

Cash cost per ton is defined and reconciled under “Reconciliation of non-GAAP measures”.

Mining complexes included in this segment are Black Thunder and Coal Creek

In the Powder River Basin, the company shipped 21.8 million tons as stronger natural gas prices contributed to solid demand from power generators. Average sales price per ton declined 3 percent versus the third quarter, driven by sales mix between mines. While cash costs in the segment rose due to volume decline, Arch still achieved an exceptional cost performance when compared to historical levels. Looking ahead, costs in the Powder River Basin are expected to normalize in the range of $10.20 to $10.70 per ton as Black Thunder settles into its anticipated new level of production of 70 to 80 million tons per year.

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Cash cost per ton is defined and reconciled under “Reconciliation of non-GAAP measures”.

Mining complexes included in this segement are Coal-Mac, Viper and West Elk

In the Other Thermal segment, which now includes the Coal-Mac operation in West Virginia, cash margins reached $12.22 per ton, an increase of 7 percent versus the third quarter, driven primarily by solid overall cost performance. Improved pricing on international sales due to West Elk’s ability to capitalize on the uptick in Newcastle prices helped offset weaker shipments from the Viper mine, which was hampered by an extended operating outage at its largest customer.

Key Market Developments

Metallurgical Coal Markets

·                  Global metallurgical markets rebounded significantly in the latter part of 2016, with average pricing assessments off the East Coast of the United States increasing by 130 percent year-over-year for High-Vol A coking coal.

·                  Arch attributes the increase in metallurgical pricing to several developments, including production restrictions in China and the impact of a multi-year period of reduced global investment and supply rationalization.

·                  Looking ahead, the company expects the market to address the undersupplied conditions of 2016, with new supply coming online in response to stronger price signals. With this supply response, we expect the market to return to a healthy balance, with prices stabilizing at levels needed to keep the market in relative equilibrium.

·                  The World Steel Association expects global demand for steel to increase by 0.5 percent in 2017, with more robust growth projected for key Atlantic Basin markets, including the United States, Europe and Brazil.

·                  Moreover, Arch is projecting additional strengthening in the seaborne market, with sizeable increases in demand for high-quality, imported coking coal in India, and a continuation of the conditions that bolstered China’s participation in seaborne markets in the year’s second half.

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Thermal Coal Markets

·                  Despite a relatively mild winter thus far, natural gas is trading in a higher range than a year ago. Assuming this trend continues, it should spur higher utilization rates at coal-based power plants and stronger thermal coal consumption levels throughout 2017.

·                  Although still elevated, stockpiles at U.S. coal-based power plants declined by more than 35 million tons, or 17 percent, during the course of 2016, according to company estimates. Arch expects this stockpile liquidation to continue at least through the first half of 2017.

·                  Given current production rates and assuming normal weather, Arch anticipates utility stockpiles to reach target levels sometime in the third quarter of 2017.  Once that occurs, thermal coal demand and shipments should increase and market conditions should improve.

·                  Additionally, the new Administration should prove to be positive for Arch’s metallurgical and thermal franchises. Arch anticipates that the new Administration will constructively address the regulatory burden that has pressured the industry in recent years, resulting in stabilization in domestic thermal coal demand in the intermediate term. Further, Arch anticipates a sharp focus on maintaining a competitive domestic steel sector.

Company Outlook

Arch has established sales targets for 2017 of between 7.2 million and 7.8 million tons of metallurgical coal, which includes PCI coal, and between 88 million and 96 million tons of thermal coal. At the midpoint of its guidance level, Arch is nearly 75 percent committed on coking coal sales for the full year, with nearly 35 percent of that committed volume exposed to index and other pricing mechanisms. At the midpoint of guidance, Arch’s thermal sales are nearly 85 percent committed for the full year.

“As we progress through 2017, we expect metallurgical prices to remain well above the levels that prevailed during the first half of 2016,” said Eaves. “Moreover, we anticipate improving conditions in U.S. thermal markets, particularly later in the year. Given the highly competitive cost structures of our metallurgical, Powder River Basin and complementary thermal operations, we believe we are advantageously positioned to capitalize on the still-strong metallurgical markets and continuing recovery in U.S. thermal markets.”

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“We are enthusiastic about Arch’s future and the opportunities that lie before us. We are intently focused on solidifying our position as a premier U.S. coal supplier — maintaining our disciplined operating approach, enhancing our customer service and delivering significant returns for our shareholders.”

A conference call regarding Arch Coal’s fourth quarter 2016 financial results will be webcast live today at 11 a.m. Eastern time. The conference call can be accessed via the “investor” section of the Arch Coal website (http://investor.archcoal.com).

Forward-Looking Statements: This press release 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.

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Arch Coal, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(A) Adjusted EBITDAR and Adjusted diluted income per common share are defined and reconciled under “Reconciliation of Non-GAAP Measures” later in this release.

Arch Coal, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

Arch Coal, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

Arch Coal, Inc. and Subsidiaries

Schedule of Consolidated Debt

(In thousands)

Arch Coal, Inc. and Subsidiaries

Operational Performance

(In millions, except per ton data)