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Document and Entity Information - USD ($) $ in Billions	3 Months Ended
Document and Entity Information - USD ($) $ in Billions	Mar. 31, 2010	May 05, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	ARCH COAL INC
Entity Central Index Key	0001037676
Document Type	10-Q
Document Period End Date	Mar. 31, 2010
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	Q1
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 2.2
Entity Common Stock, Shares Outstanding		162,475,801

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2010	Mar. 31, 2009
REVENUES
Coal sales	$ 711,874	$ 681,040
COSTS, EXPENSES AND OTHER
Cost of coal sales	550,750	547,126
Depreciation, depletion and amortization	88,519	73,269
Amortization of acquired sales contracts, net	10,753	(228)
Selling, general and administrative expenses	27,166	25,114
Change in fair value of coal derivatives and coal trading activities, net	5,877	(528)
Costs related to acquisition of Jacobs Ranch		3,350
Other operating income, net	(3,391)	(5,635)
Total operating expenses	679,674	642,468
Income from operations	32,200	38,572
Interest expense, net:
Interest expense	(35,083)	(20,018)
Interest income	338	6,468
Interest expense, net	(34,745)	(13,550)
Income (loss) before income taxes	(2,545)	25,022
Benefit from income taxes	(775)	(5,550)
Net income (loss)	(1,770)	30,572
Less: Net (income) loss attributable to noncontrolling interest	(26)	7
Net income (loss) attributable to Arch Coal, Inc.	$ (1,796)	$ 30,579
EARNINGS (LOSS) PER COMMON SHARE
Basic earnings (loss) per common share	$ (0.01)	$ 0.21
Diluted earnings (loss) per common share	$ (0.01)	$ 0.21
Basic weighted average shares outstanding	162,372	142,789
Diluted weighted average shares outstanding	162,372	142,848
Dividends declared per common share	$ 0.09	$ 0.09

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2010	Dec. 31, 2009
Current assets:
Cash and cash equivalents	$ 50,374	$ 61,138
Trade accounts receivable	238,770	190,738
Other receivables	31,178	40,632
Inventories	243,158	240,776
Prepaid royalties	42,090	21,085
Deferred income taxes	3,265	0
Coal derivative assets	14,801	18,807
Other	106,776	113,606
Total current assets	730,412	686,782
Property, plant and equipment, net	3,306,175	3,366,186
Other assets:
Prepaid royalties	82,358	86,622
Goodwill	113,701	113,701
Deferred income taxes	344,040	354,869
Equity investments	99,924	87,268
Other	136,676	145,168
Total other assets	776,699	787,628
Total assets	4,813,286	4,840,596
Current liabilities:
Accounts payable	149,243	128,402
Coal derivative liabilities	2,820	2,244
Deferred income taxes	0	5,901
Accrued expenses and other current liabilities	196,177	227,716
Current maturities of debt and short-term borrowings	243,398	267,464
Total current liabilities	591,638	631,727
Long-term debt	1,540,289	1,540,223
Asset retirement obligations	311,130	305,094
Accrued pension benefits	69,277	68,266
Accrued postretirement benefits other than pension	45,095	43,865
Accrued workers' compensation	27,990	29,110
Other noncurrent liabilities	113,735	98,243
Total liabilities	2,699,154	2,716,528
Redeemable noncontrolling interest	8,990	8,962
Stockholders' equity:
Common stock, $0.01 par value, authorized 260,000 shares, issued 163,960 and 163,953 shares, respectively	1,643	1,643
Paid-in capital	1,724,999	1,721,230
Treasury stock, 1,512 shares at March 31, 2010 and December 31, 2009, at cost	(53,848)	(53,848)
Retained earnings	449,515	465,934
Accumulated other comprehensive loss	(17,167)	(19,853)
Total stockholders' equity	2,105,142	2,115,106
Total liabilities and stockholders' equity	$ 4,813,286	$ 4,840,596

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands	Mar. 31, 2010	Dec. 31, 2009
Stockholders' equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	260,000	260,000
Common stock, shares issued	163,960	163,953
Treasury stock, shares	1,512	1,512

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2010	Mar. 31, 2009
OPERATING ACTIVITIES
Net income (loss)	$ (1,770)	$ 30,572
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization	88,519	73,269
Amortization of acquired sales contracts, net	10,753	(228)
Prepaid royalties expensed	6,599	9,461
Loss (gain) on dispositions of property, plant and equipment	17	(54)
Employee stock-based compensation	3,684	3,520
Changes in:
Receivables	(37,013)	(9,005)
Inventories	(2,382)	(14,202)
Coal derivative assets and liabilities	5,547	11,298
Accounts payable, accrued expenses and other current liabilities	(6,844)	(37,891)
Deferred income taxes	150	(14,440)
Other	26,071	4,827
Cash provided by operating activities	93,331	57,127
INVESTING ACTIVITIES
Capital expenditures	(31,975)	(191,886)
Proceeds from dispositions of property, plant and equipment	95	214
Purchases of investments and advances to affiliates	(10,071)	(5,881)
Additions to prepaid royalties	(23,340)	(20,315)
Reimbursement of deposit on equipment		3,209
Cash used in investing activities	(65,291)	(214,659)
FINANCING ACTIVITIES
Net increase (decrease) in borrowings under lines of credit and commercial paper program	(19,324)	137,265
Net payments on other debt	(4,742)	(5,363)
Debt financing costs	(200)	(4,449)
Dividends paid	(14,623)	(12,862)
Issuance of common stock under incentive plans	85	58
Cash provided by (used in) financing activities	(38,804)	114,649
Decrease in cash and cash equivalents	(10,764)	(42,883)
Cash and cash equivalents, beginning of period	61,138	70,649
Cash and cash equivalents, end of period	$ 50,374	$ 27,766

Basis of Accounting	3 Months Ended
Basis of Accounting	Mar. 31, 2010
Basis of Accounting [Abstract]
Basis of Accounting	1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Arch Coal, Inc. and its subsidiaries and controlled entities (the “Company”). The Company’s primary business is the production of steam and metallurgical coal from surface and underground mines located throughout the United States, for sale to utility, industrial and export markets. The Company’s mines are located in southern West Virginia, eastern Kentucky, Virginia, Wyoming, Colorado and Utah. All subsidiaries (except as noted below) are wholly-owned. 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 month period ended March 31, 2010 are not necessarily indicative of results to be expected for the year ending December 31, 2010. 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, 2009 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission. The Company owns a 99% membership interest in a joint venture named Arch Western Resources, LLC (“Arch Western”) which operates coal mines in Wyoming, Colorado and Utah. The Company also acts as the managing member of Arch Western.

Accounting Policies	3 Months Ended
Accounting Policies	Mar. 31, 2010
Accounting Policies [Abstract]
Accounting Policies	2. Accounting Policies There are no new accounting pronouncements whose adoption is expected to have a material impact on the Company’s consolidated financial statements.

Property Transactions	3 Months Ended
Property Transactions	Mar. 31, 2010
Property Transactions [Abstract]
Property Transactions	3. Property Transactions On March 18, 2010, the Company was awarded a Montana state coal lease for the Otter Creek tracts for a price of $85.8 million. Arch now controls approximately 1.5 billion tons of coal reserves in Montana’s Otter Creek area, including a coal lease secured in November 2009. The Company believes these Northern PRB reserves will help the Company competitively serve U.S. power producers, supply additional coal for export to Asian markets or potentially house the site of a future coal-conversion facility. The Company has entered into other non-cancelable royalty lease agreements and federal lease bonus payments under which future minimum payments are due. These payments under such agreements are capitalized as a cost of the underlying mineral reserves. Annual payments under these arrangements, including the payment under the new Otter Creek lease due in April 2010, will be $109.2 million in 2010 and $23.4 million in 2011, 2012, 2013 and 2014.

Healthcare Reform Legislation	3 Months Ended
Healthcare Reform Legislation	Mar. 31, 2010
Healthcare Reform Legislation [Abstract]
Healthcare Reform Legislation	4. Healthcare Reform Legislation On March 23,2010, the Patient Protection and Affordable Care Act (PPACA) and a companion bill, the Health Care and Education Reconciliation Act of 2010, (collectively, the Acts) were signed into law which requires a minimum level of health care coverage for individuals and requires that employers provide a minimum level of coverage for full-time employees or pay penalties. Some of the plan coverage requirements that will have an impact on the Company’s costs include bans on exclusions for pre-existing conditions, extension of dependent coverage through age 26, mandatory coverage of preventative services and the elimination of lifetime dollar limits for covered individuals. The Acts also provide for an excise tax of 40% on high-cost health care plans. The Acts also addressed workers’ compensation programs for pneumoconiosis (occupational disease), extending the period of time during which miners can file claims and providing benefit payments to surviving spouses. Certain coverage provisions do not go into effect until 2014, and the excise tax will begin in 2018, but there are a number of dependent coverage and insurance market reforms that will take effect immediately. Full implementation of the Acts will run through 2020. The Company is currently evaluating the Acts to determine whether there are changes that will be required to be made to its employee benefit plans. The Company expects that federal agencies will continue to develop guidance for complying with Acts. We don’t believe that the coverage standards will have a significant impact on future healthcare benefits that the Company provides for eligible active and retired employees or on projected occupational disease benefits, however, until further implementation guidance is provided, it is not reasonably possible to estimate the full extent of the Acts.

Fair Value Measurements

3 Months Ended

Mar. 31, 2010

Fair Value Measurements [Abstract]

Fair Value Measurements

5. Fair Value Measurements

The hierarchy of fair value measurements prioritizes the inputs to valuation techniques used to measure fair value. The levels of the hierarchy, as defined below, give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

	•		Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets. Level 1 assets include available-for-sale equity securities and coal futures that are submitted for clearing on the New York Mercantile Exchange.

	•		Level 2 is defined as observable inputs other than Level 1 prices. These include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s level 2 assets and liabilities include commodity contracts (coal and heating oil) with fair values derived from quoted prices in over-the-counter markets or from prices received from direct broker quotes.

	•		Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. These include the Company’s commodity option contracts (primarily coal and heating oil) valued using modeling techniques, such as Black-Scholes, that require the use of inputs, particularly volatility, that are not observable.

The table below sets forth, by level, the Company’s financial assets and liabilities that are accounted for at fair value:


	Fair Value at March 31, 2010
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Investments in equity securities	$	3,404	$	3,355	$	—	$	49
Derivatives		30,952		—		21,325		9,627

Total assets	$	34,356	$	3,355	$	21,325	$	9,676


Liabilities:
Derivatives	$	2,820	$	2,300	$	538	$	(18	)

The Company’s contracts with certain of its counterparties allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. For classification purposes, the Company records the net fair value of all the positions with these counterparties as a net asset or liability. Each level in the table above displays the underlying contracts according to their classification in the accompanying condensed consolidated balance sheet, based on this counterparty netting.

The following table summarizes the change in the fair values of financial instruments categorized as level 3.


	Three Months
	Ended
	March 31, 2010
	(In thousands)
Beginning balance	$	8,217
Realized and unrealized losses recognized in earnings		(2,212	)
Realized and unrealized losses recognized in other comprehensive income		(1,022	)
Settlements, purchases and issuances		4,711

Ending balance	$	9,694

Net unrealized losses during the three months ended March 31, 2010 related to level 3 financial instruments held on March 31, 2010 were $1.3 million.

Fair Value of Long-Term Debt

At March 31, 2010 and December 31, 2009, the fair value of the Company’s senior notes and other long-term debt, including amounts classified as current, was $1,832.6 million and $1,844.1 million, respectively. Fair values are based upon observed prices in an active market when available or from valuation models using market information.

Derivatives

3 Months Ended

Mar. 31, 2010

Derivatives [Abstract]

Derivatives

6. Derivatives

The Company generally utilizes derivative financial instruments to manage exposures to commodity prices. Additionally, the Company may hold certain coal derivative financial instruments for trading purposes.

All derivative financial instruments are recognized in the balance sheet at fair value. In a fair value hedge, the Company hedges the risk of changes in the fair value of a firm commitment, typically a fixed-price coal sales contract. Changes in both the hedged firm commitment and the fair value of a derivative used as a hedge instrument in a fair value hedge are recorded in earnings. In a cash flow hedge, the Company hedges the risk of changes in future cash flows related to a forecasted purchase or sale. Changes in the fair value of the derivative instrument used as a hedge instrument in a cash flow hedge are recorded in other comprehensive income. Amounts in other comprehensive income are reclassified to earnings when the hedged transaction affects earnings and are classified in a manner consistent with the transaction being hedged. The Company formally documents the relationships between hedging instruments and the respective hedged items, as well as its risk management objectives for hedge transactions.

The Company evaluates the effectiveness of its hedging relationships both at the hedge’s inception and on an ongoing basis. Any ineffective portion of the change in fair value of a derivative instrument used as a hedge instrument in a fair value or cash flow hedge is recognized immediately in earnings. The ineffective portion is based on the extent to which exact offset is not achieved between the change in fair value of the hedge instrument and the cumulative change in expected future cash flows on the hedged transaction from inception of the hedge in a cash flow hedge or the change in the fair value of the firm commitment in a fair value hedge.

Diesel fuel price risk management

The Company is exposed to price risk with respect to diesel fuel purchased for use in its operations. The Company purchases approximately 50 to 60 million gallons of diesel fuel annually in its operations. To reduce the volatility in the price of diesel fuel for its operations, the Company uses forward physical diesel purchase contracts, as well as heating oil swaps and purchased call options. At March 31, 2010, the Company had protected the price of approximately 64% of its expected purchases for fiscal year 2010 and 30% for fiscal year 2011. Since the changes in the price of heating oil highly correlate to changes in the price of the hedged diesel fuel purchases, the heating oil swaps and purchased call options qualify for cash flow hedge accounting. The Company held heating oil swaps and purchased call options for approximately 41.0 million gallons as of March 31, 2010.

Coal risk management positions

The Company may sell or purchase forward contracts and options in the over-the-counter coal market in order to manage its exposure to coal prices. The Company has exposure to the risk of fluctuating coal prices related to forecasted sales or purchases of coal or to the risk of changes in the fair value of a fixed price physical sales contract. Certain derivative contracts may be designated as hedges of these risks.

At March 31, 2010, the Company held derivatives for risk management purposes totaling 1.0 million tons of coal sales and 0.8 million tons of coal purchases that are expected to settle during the remainder of 2010 and 0.3 million tons of coal sales that are expected to settle in 2011.

Coal trading positions

The Company may sell or purchase forward contracts, swaps and options in the over-the-counter coal market for trading purposes. The Company may also include non-derivative contracts in its trading portfolio. The Company is exposed to the risk of changes in coal prices on its coal trading portfolio. The timing of the estimated future realization of the value of the trading portfolio is 56% in the remainder of 2010 and 44% in 2011.

Tabular derivatives disclosures

The Company’s contracts with certain of its counterparties allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. Such netting arrangements reduce our credit exposure related to these counterparties. For classification purposes, the Company records the net fair value of all the positions with these counterparties as a net asset or liability. The amounts shown in the table below represent the fair value position of individual contracts, regardless of the net position presented in the accompanying condensed consolidated balance sheet. The fair value and location of derivatives reflected in the accompanying condensed consolidated balance sheet are as follows:

Fair Value of Derivatives
(in thousands)


	March 31, 2010								December 31, 2009
	Asset			Liability					Asset			Liability
	Derivatives			Derivatives					Derivatives			Derivatives
Derivatives Designated as Hedging Instruments
Heating oil	$	16,151		$	—				$	13,954		$	(2,432	)
Coal		3,415			(5,585	)				3,075			(6,355	)

Total		19,566			(5,585	)				17,029			(8,787	)
Derivatives Not Designated as Hedging Instruments
Coal — held for trading purposes		32,464			(23,652	)				41,544			(31,262	)
Coal		7,892			(2,553	)				11,459			(1,898	)

Total		40,356			(26,205	)				53,003			(33,160	)

Total derivatives		59,922			(31,790	)				70,032			(41,947	)
Effect of counterparty netting		(28,970	)		28,970					(39,227	)		39,227

Net derivatives as classified in the balance sheet	$	30,952		$	(2,820	)	$	28,132	$	30,805		$	(2,720	)	$	28,085

Net derivatives as reflected on the balance sheets


		March 31,			December 31,
		2010			2009
Heating oil	Other current assets	$	16,151		$	11,998
	Accrued expenses and other current liabilities		—			(476	)

Coal	Coal derivative assets		14,801			18,807
	Coal derivative liabilities		(2,820	)		(2,244	)

		$	28,132		$	28,085

The Company had a current asset for the right to reclaim cash collateral of $11.5 million and $12.5 million at March 31, 2010 and December 31, 2009. These amounts are not included with the derivatives presented in the table above and are included in “other current assets” in the accompanying condensed consolidated balance sheets.

The effects of derivatives on measures of financial performance are as follows:

Three Months Ended March 31
(in thousands)

Loss on Derivatives

Gain on Hedged

Used in Fair Value

Hedged Items in

Items In Fair Value

Derivatives used in

Hedge Relationships

Fair Value Hedge

Hedge Relationships

Fair Value Hedging Relationships

2010

2009

Hedge Relationships

2010

2009

Coal

—

(3,188

)

Firm commitments

—

3,188


														Gain (Loss)
														Recognized in
							Losses							Income (Ineffective
	Gain (Loss)						Reclassified from							Portion and Amount
	Recognized in OCI						OCI into Income							Excluded from
Derivatives used in	(Effective Portion)						(Effective Portion)							Effectiveness Testing)
Cash Flow Hedging Relationships	2010			2009			2010			2009				2010		2009
Heating oil	$	12		$	(2,865	)	$	(2,229	)	$	(12,217	)	2	$	—	$	—
Coal sales		(401	)		(1,690	)		(129	)		(2,984	)	1		—		—
Coal purchases		902			(3,932	)		(336	)		—		2		—		—

Totals	$	513		$	(8,487	)	$	(2,694	)	$	(15,201	)		$	—	$	—


Derivatives Not Designated as
Hedging Instruments	Gain (Loss)
	2010			2009
Coal — unrealized	$	(4,922	)	$	181	3

Coal — realized	$	1,600		$	—	4

Location in Statement of Income:


1-Coal sales

2-Cost of coal sales

3-Change in fair value of coal derivatives and coal trading activities, net

4-Other operating income, net

During the three months ended March 31, 2010 and 2009, the Company recognized net unrealized and realized losses of $1.0 million and net unrealized and realized gains of $0.3 million, respectively, related to its trading portfolio (including derivative and non-derivative contracts). These balances are included in the caption “Change in fair value of coal derivatives and coal trading activities, net” in the accompanying condensed consolidated statements of income and are not included in the previous table.

During the next twelve months, based on fair values at March 31, 2010, gains on derivative contracts designated as hedge instruments in cash flow hedges of approximately $8.9 million are expected to be reclassified from other comprehensive income into earnings.

Inventories

3 Months Ended

Mar. 31, 2010

Inventories [Abstract]

Inventories

7. Inventories

Inventories consist of the following:


	March 31,		December 31,
	2010		2009
	(In thousands)
Coal	$	109,768	$	99,161
Repair parts and supplies, net of allowance		133,390		141,615

	$	243,158	$	240,776

The repair parts and supplies are stated net of an allowance for slow-moving and obsolete inventories of $13.8 million at March 31, 2010, and $13.4 million at December 31, 2009.

Debt

3 Months Ended

Mar. 31, 2010

Debt [Abstract]

Debt

8. Debt


	March 31,		December 31,
	2010		2009
	(In thousands)
Commercial paper	$	53,229	$	49,453
Indebtedness to banks under credit facilities		180,900		204,000
6.75% senior notes ($950.0 million face value) due July 1, 2013		954,440		954,782
8.75% senior notes ($600.0 million face value) due August 1, 2016		585,848		585,441
Other		9,270		14,011

		1,783,687		1,807,687
Less current maturities of debt and short-term borrowings		243,398		267,464

Long-term debt	$	1,540,289	$	1,540,223

The current maturities of debt and short-term borrowings includes amounts borrowed that are supported by credit facilities that have a term of less than one year and amounts borrowed under credit facilities with terms longer than one year that the Company does not intend to refinance on a long-term basis, based on cash projections and management’s plans.

Amendments to agreements

On February 24, 2010, the Company entered into an amendment to its accounts receivable securitization program revising certain terms to expand the pool of receivables included in the program. The credit facility supporting the borrowings under the program was also renewed and now expires on February 23, 2011. The size of the program continues to allow for aggregate borrowings and letters of credit of up to $175.0 million, as limited by eligible accounts receivable.

On March 19, 2010 the Company entered into an amendment to our $860.0 million secured revolving credit facility. The amendment enables Arch Coal to make certain intercompany loans to its subsidiary, Arch Western Resources LLC (“AWR”), without repaying the existing loan from AWR to Arch Coal.

On March 25, 2010, the Company entered into an amendment to its commercial paper program which decreased the maximum aggregate principal amount of the program to $75 million from $100 million. The commercial paper program is supported by a line of credit that has been renewed and expires on April 30, 2011.

Availability

As of March 31, 2010 and December 31, 2009, the Company had $90.0 million and $120.0 million of borrowings outstanding under the revolving credit facility, respectively. At March 31, 2010, the Company had availability of approximately $728.0 million under the revolving credit facility. The Company had borrowings under the accounts receivable securitization program of $90.9 million at March 31, 2010 and $84.0 million at December 31, 2009. The Company also had letters of credit outstanding under the securitization program of $64.0 million as of March 31, 2010. At March 31, 2010, the Company had availability of $8.0 million under the accounts receivable securitization program.

Stock-Based Compensation	3 Months Ended
Stock-Based Compensation	Mar. 31, 2010
Stock-Based Compensation [Abstract]
Stock-Based Compensation	9. Stock-Based Compensation During the three months ended March 31, 2010, the Company granted options to purchase approximately 0.8 million shares of common stock with a weighted average exercise price of $22.65 per share and a weighted average grant-date fair value of $9.42 per share. The options’ fair value was determined using the Black-Scholes option pricing model, using a weighted average risk-free rate of 2.18%, a weighted average dividend yield of 2.00% and a weighted average volatility of 57.10%. The options’ expected life is 4.43 years and the options vest ratably over four years. The options provide for the continuation of vesting for retirement-eligible recipients that meet certain criteria. The expense for these options will be recognized through the date that the employee first becomes eligible to retire and is no longer required to provide service to earn part or all of the award. The Company recognized stock-based compensation expense from all plans of $3.7 million and $3.5 million for the three months ended March 31, 2010 and 2009, respectively. This expense is primarily included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Workers Compensation Expense

3 Months Ended

Mar. 31, 2010

Workers' Compensation Expense [Abstract]

Workers' Compensation Expense

10. Workers’ Compensation Expense

The following table details the components of workers’ compensation expense:


	Three Months Ended March 31
	2010			2009
	(In thousands)
Self-insured occupational disease benefits:
Service cost	$	155		$	120
Interest cost		144			112
Net amortization		(548	)		(971	)

Total occupational disease		(249	)		(739	)
Traumatic injury claims and assessments		1,676			1,505

Total workers’ compensation expense	$	1,427		$	766

Employee Benefit Plans

3 Months Ended

Mar. 31, 2010

Employee Benefit Plans [Abstract]

Employee Benefit Plans

11. Employee Benefit Plans

The following table details the components of pension benefit costs:


	Three Months Ended March 31
	2010			2009
	(In thousands)
Service cost	$	3,873		$	3,229
Interest cost		4,121			3,659
Expected return on plan assets		(4,166	)		(4,483	)
Amortization of prior service cost (credit)		43			(53	)
Amortization of other actuarial losses		2,405			803

Net benefit cost	$	6,276		$	3,155

The following table details the components of other postretirement benefit costs:


	Three Months Ended March 31
	2010			2009
	(In thousands)
Service cost	$	446		$	734
Interest cost		648			929
Amortization of prior service cost (credit)		(503	)		864
Amortization of other actuarial gains		(470	)		(911	)

Net benefit cost	$	121		$	1,616

Comprehensive Income

3 Months Ended

Mar. 31, 2010

Comprehensive Income [Abstract]

Comprehensive Income

12. Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income items are transactions recorded in stockholders’ equity during the year, excluding net income and transactions with stockholders.

The following table presents the components of comprehensive income:


	Three Months Ended March 31
	2010			2009
	(In thousands)
Net income (loss) attributable to Arch Coal, Inc.	$	(1,796	)	$	30,579
Other comprehensive income, net of income taxes:
Pension, postretirement and other post-employment benefits, reclassifications into net income		592			(171	)
Unrealized gains on available-for-sale securities		9			(38	)
Unrealized gains and losses on derivatives, net of reclassifications into net income:
Unrealized gains (losses) on derivatives		362			(5,432	)
Reclassifications of losses into net income		1,723			9,728


Total comprehensive income	$	890		$	34,666

Earnings Per Share

3 Months Ended

Mar. 31, 2010

Earnings per Share [Abstract]

Earnings per Share

13. Earnings per Share

The following table provides the basis for earnings per share calculations by presenting the income available to common stockholders of the Company and by reconciling basic and diluted weighted average shares outstanding:


	Three Months Ended March 31
	2010			2009
	(In thousands)
Income (loss) for basic earnings per share calculation:
Income (loss) allocated to common stockholders	$	(1,794	)	$	30,546


Weighted average shares outstanding:
Basic weighted average shares outstanding		162,372			142,789
Effect of common stock equivalents under incentive plans		—			59


Diluted weighted average shares outstanding		162,372			142,848

The effect of options to purchase 2.4 million and 1.7 million shares of common stock were excluded from the calculation of diluted weighted average shares outstanding for the three months ended March 31, 2010 and 2009, respectively, because the exercise price of these options exceeded the average market price of the Company’s common stock for these periods. The additional dilutive effect of options, restricted stock and restricted stock units totaling 0.7 million shares of common stock were excluded from the calculation of diluted weighted average shares outstanding for the three months ended March 31, 2010 because of the net loss for the quarter.

Guarantees	3 Months Ended
Guarantees	Mar. 31, 2010
Guarantees [Abstract]
Guarantees	14. Guarantees The Company has agreed to continue to provide surety bonds and letters of credit for the reclamation and retiree healthcare obligations of Magnum Coal Company (“Magnum”) related to the properties the Company sold to Magnum on December 31, 2005. The purchase agreement requires Magnum to reimburse the Company for costs related to the surety bonds and letters of credit and to use commercially reasonable efforts to replace the obligations. If the surety bonds and letters of credit related to the reclamation obligations are not replaced by Magnum within a specified period of time, Magnum must post a letter of credit in favor of the Company in the amounts of the reclamation obligations. At March 31, 2010, the Company had approximately $91.6 million of surety bonds related to properties sold to Magnum. As a result of Magnum’s purchase by Patriot Coal Corporation, Magnum will be required to post letters of credit in the Company’s favor for the full amount of the reclamation obligation on or before February 2011. Magnum also acquired certain coal supply contracts with customers who have not consented to the contracts’ assignment from the Company to Magnum. The Company has committed to purchase coal from Magnum to sell to those customers at the same price it is charging the customers for the sale. In addition, certain contracts were assigned to Magnum, but the Company has guaranteed Magnum’s performance under the contracts. The longest of the coal supply contracts extends to the year 2017. If Magnum is unable to supply the coal for these coal sales contracts then the Company would be required to purchase coal on the open market or supply contracts from its existing operations. At market prices effective at March 31, 2010, the cost of purchasing 12.7 million tons of coal to supply the contracts that have not been assigned over their duration would exceed the sales price under the contracts by approximately $330.7 million, and the cost of purchasing 2.4 million tons of coal to supply the assigned and guaranteed contracts over their duration would exceed the sales price under the contracts by approximately $49.1 million. The Company has also guaranteed Magnum’s performance under certain operating leases, the longest of which extends through 2011. If the Company were required to perform under its guarantees of the operating lease agreements, it would be required to make $2.1 million of lease payments. As the Company does not believe that it is probable that it would have to purchase replacement coal or fulfill its obligations under the lease guarantees, no losses have been recorded in the condensed consolidated financial statements as of March 31, 2010. However, if the Company would have to perform under these guarantees, it could potentially have a material adverse effect on the business, results of operations and financial condition of the Company. In connection with the Company’s acquisition of the coal operations of Atlantic Richfield Company (ARCO) and the simultaneous combination of the acquired ARCO operations and the Company’s Wyoming operations into the Arch Western joint venture, the Company agreed to indemnify the other member of Arch Western against certain tax liabilities in the event that such liabilities arise prior to June 1, 2013 as a result of certain actions taken, including the sale or other disposition of certain properties of Arch Western, the repurchase of certain equity interests in Arch Western by Arch Western or the reduction under certain circumstances of indebtedness incurred by Arch Western in connection with the acquisition. If the Company were to become liable, the maximum amount of potential future tax payments is $39.2 million at March 31, 2010, which is not recorded as a liability in the Company’s condensed consolidated financial statements. Since the indemnification is dependent upon the initiation of activities within the Company’s control and the Company does not intend to initiate such activities, it is remote that the Company will become liable for any obligation related to this indemnification. However, if such indemnification obligation were to arise, it could potentially have a material adverse effect on the business, results of operations and financial condition of the Company.

Contingencies	3 Months Ended
Contingencies	Mar. 31, 2010
Contingencies [Abstract]
Contingencies	15. 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.

Segment Information

3 Months Ended

Mar. 31, 2010

Segment Information [Abstract]

Segment Information

16. Segment Information

The Company has three reportable business segments, which are based on the major low-sulfur coal basins in which the Company operates. Each of these reportable business segments includes 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; the Western Bituminous (WBIT) segment, with operations in Utah, Colorado and southern Wyoming; and the Central Appalachia (CAPP) segment, with operations in southern West Virginia, eastern Kentucky and Virginia.

Operating segment results for the three months ended March 31, 2010 and 2009 are presented below. Results for the operating segments include all direct costs of mining, including all depreciation, depletion and amortization related to the mining operations, even if the assets are not recorded at the operating segment level. See discussion of segment assets below. Corporate, Other and Eliminations includes the change in fair value of coal derivatives and coal trading activities, net; corporate overhead; land management; other support functions; and the elimination of intercompany transactions.

The asset amounts below represent an allocation of assets used in the segments’ cash-generating activities. The amounts in Corporate, Other and Eliminations represent primarily corporate assets (cash, receivables, investments, plant, property and equipment) as well as goodwill, unassigned coal reserves, above-market acquired sales contracts and other unassigned assets.


								Corporate,
								Other and
	PRB		WBIT			CAPP		Eliminations			Consolidated
	(In thousands)
Three months ended March 31, 2010
Coal sales	$	359,415	$	132,713		$	219,746	$	—		$	711,874
Income (loss) from operations		16,561		12,430			37,593		(34,384	)		32,200
Total assets		2,358,957		683,124			740,401		1,030,804			4,813,286
Depreciation, depletion and amortization		44,621		20,370			23,174		354			88,519
Amortization of acquired sales contracts, net		10,753		—			—		—			10,753
Capital expenditures		725		13,101			11,637		6,512			31,975

Three months ended March 31, 2009
Coal sales	$	311,242	$	122,557		$	247,241	$	—		$	681,040
Income (loss) from operations		31,214		(7,655	)		43,551		(28,538	)		38,572
Total assets		1,679,614		688,254			797,215		924,666			4,089,749
Depreciation, depletion and amortization		29,384		19,795			23,634		456			73,269
Amortization of acquired sales contracts, net		83		(311	)		—		—			(228	)
Capital expenditures		33,779		16,094			12,981		129,032			191,886

A reconciliation of segment income from operations to consolidated income before income taxes is presented below.


	Three Months Ended March 31
	2010			2009
	(In thousands)
Income from operations	$	32,200		$	38,572
Interest expense		(35,083	)		(20,018	)
Interest income		338			6,468

Income (loss) before income taxes	$	(2,545	)	$	25,022

Supplemental Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2010

Supplemental Condensed Consolidating Financial Information [Abstract]

Supplemental Condensed Consolidating Financial Information

17. Supplemental Condensed Consolidating Financial Information

Pursuant to the indenture governing the 8.75% 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 issuer of the notes (Arch Coal), (ii) the guarantors under the notes, and (iii) the entities which are not guarantors under the notes:

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2010
(in thousands)


				Guarantor			Non-Guarantor
	Parent/Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenue
Coal Sales	$	—		$	239,027		$	472,847		$	—		$	711,874

Costs, expenses and other
Cost of coal sales		2,829			168,718			397,509			(18,306	)		550,750
Depreciation, depletion and amortization		752			43,717			44,050			—			88,519
Amortization of acquired sales contracts, net		—			—			10,753			—			10,753
Selling, general and administrative expenses		18,643			1,806			8,403			(1,686	)		27,166
Change in fair value of coal derivatives		—			5,877			—			—			5,877
Other operating (income) expense, net		(1,961	)		(22,722	)		1,300			19,992			(3,391	)


		20,263			197,396			462,015			—			679,674
Income from investment in subsidiaries		47,267			—			—			(47,267	)		—


Income from operations		27,004			41,631			10,832			(47,267	)		32,200

Interest expense, net:
Interest expense		(31,432	)		(579	)		(18,115	)		15,043			(35,083	)
Interest income		1,883			89			13,409			(15,043	)		338

		(29,549	)		(490	)		(4,706	)		—			(34,745	)


Income (loss) before income taxes		(2,545	)		41,141			6,126			(47,267	)		(2,545	)
Benefit from income taxes		(775	)		—			—			—			(775	)


Net income (loss)		(1,770	)		41,141			6,126			(47,267	)		(1,770	)
Less: Net income attributable to noncontrolling interest		(26	)		—			—			—			(26	)


Net income (loss) attributable to Arch Coal	$	(1,796	)	$	41,141		$	6,126		$	(47,267	)	$	(1,796	)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended March 31, 2009
(in thousands)


				Guarantor			Non-Guarantor
	Parent/Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenue
Coal Sales	$	—		$	264,790		$	416,250		$	—		$	681,040

Costs, expenses and other
Cost of coal sales		(628	)		197,957			361,372			(11,575	)		547,126
Depreciation, depletion and amortization		854			33,942			38,473			—			73,269
Amortization of acquired sales contracts, net		—			—			(228	)		—			(228	)
Selling, general and administrative expenses		13,944			2,288			10,388			(1,506	)		25,114
Change in fair value of coal derivatives		—			(528	)		—			—			(528	)
Costs related to acquisition of Jacobs Ranch		3,350			—			—			—			3,350
Other operating (income) expense, net		(1,416	)		(18,053	)		753			13,081			(5,635	)


		16,104			215,606			410,758			—			642,468
Income from investment in subsidiaries		49,063			—			—			(49,063	)		—


Income from operations		32,959			49,184			5,492			(49,063	)		38,572

Interest expense, net:
Interest expense		(16,895	)		(710	)		(18,775	)		16,362			(20,018	)
Interest income		8,958			382			13,490			(16,362	)		6,468

		(7,937	)		(328	)		(5,285	)		—			(13,550	)


Income before income taxes		25,022			48,856			207			(49,063	)		25,022
Benefit from income taxes		(5,550	)		—			—			—			(5,550	)


Net income		30,572			48,856			207			(49,063	)		30,572
Less: Net loss attributable to noncontrolling interest		7			—			—			—			7


Net income attributable to Arch Coal	$	30,579		$	48,856		$	207		$	(49,063	)	$	30,579

CONDENSED CONSOLIDATING BALANCE SHEETS
March 31, 2010
(in thousands)


				Guarantor		Non-Guarantor
	Parent/Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	39,970		$	64	$	10,340	$	—		$	50,374
Receivables		16,526			12,054		241,368		—			269,948
Inventories		—			83,021		160,137		—			243,158
Other		32,073			112,924		21,935		—			166,932

Total current assets		88,569			208,063		433,780		—			730,412


Property, plant and equipment, net		7,770			1,783,027		1,515,378		—			3,306,175

Investment in subsidiaries		4,178,203			—		—		(4,178,203	)		—
Intercompany receivables		(1,787,725	)		304,824		1,482,901		—			—
Other		454,565			306,677		15,457		—			776,699

Total other assets		2,845,043			611,501		1,498,358		(4,178,203	)		776,699

Total assets	$	2,941,382		$	2,602,591	$	3,447,516	$	(4,178,203	)	$	4,813,286


Liabilities and Stockholders’ Equity
Accounts payable	$	14,534		$	49,276	$	85,433	$	—		$	149,243
Accrued expenses and other current liabilities		27,122			37,494		134,289		—			198,905
Deferred income taxes		92			—		—		—			92
Current maturities of debt and short-term borrowings		99,268			—		144,130		—			243,398

Total current liabilities		141,016			86,770		363,852		—			591,638

Long-term debt		585,849			—		954,440		—			1,540,289
Asset retirement obligations		755			29,837		280,538		—			311,130
Accrued pension benefits		28,501			4,913		35,863		—			69,277
Accrued postretirement benefits other than pension		16,096			—		28,999		—			45,095
Accrued workers’ compensation		10,496			14,053		3,441		—			27,990
Other noncurrent liabilities		44,537			27,051		42,147		—			113,735

Total liabilities		827,250			162,624		1,709,280		—			2,699,154
Redeemable noncontrolling interest		8,990			—		—		—			8,990
Stockholders’ equity		2,105,142			2,439,967		1,738,236		(4,178,203	)		2,105,142

Total liabilities and stockholders’ equity	$	2,941,382		$	2,602,591	$	3,447,516	$	(4,178,203	)	$	4,813,286

CONDENSED CONSOLIDATING BALANCE SHEETS
December 31, 2009
(in thousands)


				Guarantor		Non-Guarantor
	Parent/Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	54,255		$	64	$	6,819	$	—		$	61,138
Receivables		16,339			15,574		199,457		—			231,370
Inventories		—			75,126		165,650		—			240,776
Other		28,741			101,407		23,350		—			153,498

Total current assets		99,335			192,171		395,276		—			686,782


Property, plant and equipment, net		7,783			1,809,340		1,549,063		—			3,366,186

Investment in subsidiaries		4,127,075			—		—		(4,127,075	)		—
Intercompany receivables		(1,679,003	)		232,076		1,446,927		—			—
Other		455,972			317,486		14,170		—			787,628

Total other assets		2,904,044			549,562		1,461,097		(4,127,075	)		787,628

Total assets	$	3,011,162		$	2,551,073	$	3,405,436	$	(4,127,075	)	$	4,840,596


Liabilities and Stockholders’ Equity
Accounts payable	$	12,828		$	41,066	$	74,508	$	—		$	128,402
Accrued expenses and other current liabilities		50,925			36,394		144,510		—			231,829
Income taxes		4,032			—		—		—			4,032
Current maturities of debt and short-term borrowings		134,012			—		133,452		—			267,464

Total current liabilities		201,797			77,460		352,470		—			631,727

Long-term debt		585,441			—		954,782		—			1,540,223
Asset retirement obligations		927			29,253		274,914		—			305,094
Accrued pension benefits		29,001			4,742		34,523		—			68,266
Accrued postretirement benefits other than pension		15,046			—		28,819		—			43,865
Accrued workers’ compensation		10,595			14,448		4,067		—			29,110
Other noncurrent liabilities		44,287			27,213		26,743		—			98,243

Total liabilities		887,094			153,116		1,676,318		—			2,716,528
Redeemable noncontrolling interest		8,962			—		—		—			8,962
Stockholders’ equity		2,115,106			2,397,957		1,729,118		(4,127,075	)		2,115,106

Total liabilities and stockholders’ equity	$	3,011,162		$	2,551,073	$	3,405,436	$	(4,127,075	)	$	4,840,596

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2010
(in thousands)


				Guarantor			Non-Guarantor
	Parent/Issuer			Subsidiaries			Subsidiaries			Consolidated
Cash provided by (used in) operating activities	$	(74,952	)	$	112,334		$	55,949		$	93,331

Investing Activities
Capital expenditures		(711	)		(17,438	)		(13,826	)		(31,975	)
Proceeds from dispositions of property, plant and equipment		—			21			74			95
Additions to prepaid royalties		—			(20,831	)		(2,509	)		(23,340	)
Purchases of investments and advances to affiliates		(8,856	)		(1,215	)		—			(10,071	)

Cash used in investing activities		(9,567	)		(39,463	)		(16,261	)		(65,291	)

Financing Activities
Net increase (decrease) in borrowings under lines of credit and commercial paper program		(30,000	)		—			10,676			(19,324	)
Net payments on other debt		(4,742	)		—			—			(4,742	)
Debt financing costs		—			—			(200	)		(200	)
Dividends paid		(14,623	)		—			—			(14,623	)
Issuance of common stock under incentive plans		85			—			—			85
Transactions with affiliates, net		119,514			(72,871	)		(46,643	)		—

Cash provided by (used in) financing activities		70,234			(72,871	)		(36,167	)		(38,804	)

Increase (decrease) in cash and cash equivalents		(14,285	)		—			3,521			(10,764	)
Cash and cash equivalents, beginning of period		54,255			64			6,819			61,138

Cash and cash equivalents, end of period	$	39,970		$	64		$	10,340		$	50,374

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2009
(in thousands)


				Guarantor			Non-Guarantor
	Parent/Issuer			Subsidiaries			Subsidiaries			Consolidated
Cash provided by (used in) operating activities	$	(58,182	)	$	88,489		$	26,820		$	57,127

Investing Activities
Capital expenditures		(953	)		(141,060	)		(49,873	)		(191,886	)
Proceeds from dispositions of property, plant and equipment		—			214			—			214
Additions to prepaid royalties		—			(20,315	)		—			(20,315	)
Purchases of investments and advances to affiliates		(5,000	)		(881	)		—			(5,881	)
Reimbursement of deposits on equipment		—			—			3,209			3,209

Cash used in investing activities		(5,953	)		(162,042	)		(46,664	)		(214,659	)

Financing Activities
Net increase (decrease) in borrowings under lines of credit and commercial paper program		170,000			—			(32,735	)		137,265
Net payments on other debt		(5,363	)		—			—			(5,363	)
Debt financing costs		(4,449	)		—			—			(4,449	)
Dividends paid		(12,862	)		—			—			(12,862	)
Issuance of common stock under incentive plans		58			—			—			58
Transactions with affiliates, net		(123,869	)		73,556			50,313			—

Cash provided by financing activities		23,515			73,556			17,578			114,649

Increase (decrease) in cash and cash equivalents		(40,620	)		3			(2,266	)		(42,883	)
Cash and cash equivalents, beginning of period		67,737			61			2,851			70,649

Cash and cash equivalents, end of period	$	27,117		$	64		$	585		$	27,766