Arch Coal Reports Closing of Sale of Canyon Fuel Unit, Expecting Pretax Gain $120M

Arch Coal, Inc. (NYSE: ACI) ("Arch")today announced that it has completed the sale of its subsidiary, Canyon FuelCompany, LLC ("Canyon Fuel") to Bowie Resources, LLC for $423 million in cash,which is inclusive of working capital adjustments. The sale includes the Sufcoand Skyline longwall mines, the Dugout Canyon continuous miner operation andapproximately 105 million tons of bituminous coal reserves, all located inUtah."The sale of our Utah operations is advantageous for Arch and ourshareholders, allowing us to monetize assets in our portfolio that aren't coreto our long-term strategic plans," said John W. Eaves, Arch's president andCEO. "We are pleased with the value this transaction creates, as the sale putsArch in a strong position for an evolving domestic coal market."In addition to the cash proceeds received, Arch expects to record a pre-taxgain of approximately $120 million in the third quarter of 2013 related to theCanyon Fuel sale. Arch also forecasts cumulative capital and administrativecost savings of more than $200 million from 2014 through 2017 due to thedivestiture of its Utah assets. Furthermore, following the Canyon Fueltransaction, Arch anticipates further streamlining its operations to achievean additional $10 million in annual administrative cost reductions."This divestiture pulls forward multiple years of cash flows and reducesArch's future capital and cost outlays," said Eaves. "Moreover, the sale ofour Utah assets provides an incremental boost in liquidity, further enhancingour financial flexibility and positioning Arch for future debt reduction ascoal markets rebound.""I would like to thank the Utah employees for their contributions in safety,stewardship and overall performance," said Eaves. "They have contributedgreatly to Arch's success over the past 15 years. We commend them for theirefforts and we wish them well."Arch is retaining the West Elk mine in Colorado and approximately 300 milliontons of bituminous coal reserves in the Western Bituminous Region. Included inthat total are the Saddleback Hills and Elk Mountain reserves in southeasternWyoming."The divestiture of Canyon Fuel further streamlines our asset portfolio andshifts our focus to the most value-enhancing parts of our business, such asbuilding out and upgrading our Appalachian metallurgical coal platform andoptimizing our low-cost thermal coal franchise to serve the domestic andexport coal markets," added Eaves.U.S.-based Arch Coal, Inc. is one of the world's top coal producers for theglobal steel and power generation industries, serving customers in 25countries on five continents. Its network of mining complexes is the mostdiversified in the United States, spanning every major coal basin in thenation. The company controls more than 5 billion tons of high-qualitymetallurgical and thermal coal reserves, with access to all major railroads,inland waterways and a growing number of seaborne trade channels. For moreinformation, visit www.archcoal.com.