<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 1999
OR
(_) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to ______.
Commission File Number 1-13105
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: Arch Coal, Inc. Employee Thrift Plan
B. Name of issuer of the securities to be held pursuant to the plan and the
address of its principal executive office: Arch Coal, Inc., City Place One,
Suite 300, St. Louis, Missouri 63141
<PAGE>
FINANCIAL STATEMENTS AND EXHIBIT
Financial Statements and Schedule
Independent Auditors' Report
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Schedule of Assets Held for Investment Purposes
Exhibit
23 - Consent of Stone Carlie & Company, L.L.C., Independent Auditors
<PAGE>
===============================================================================
ARCH COAL, INC.
EMPLOYEE THRIFT PLAN
St. Louis, Missouri
FINANCIAL STATEMENTS
WITH SUPPLEMENTAL SCHEDULE
AND INDEPENDENT AUDITORS' REPORT
YEARS ENDED DECEMBER 31, 1999 AND 1998
===============================================================================
<PAGE>
Contents
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<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report............................................ 1
Financial Statements
Statements of Net Assets Available for Benefits....................... 2
Statements of Changes in Net Assets Available for Benefits............ 3
Notes to Financial Statements........................................... 4 - 11
Supplemental Schedule
Schedule of Assets Held for Investment Purposes....................... 13 - 14
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administrator
Arch Coal, Inc. Employee Thrift Plan
We have audited the accompanying statements of net assets available for benefits
of the Arch Coal, Inc. Employee Thrift Plan as of December 31, 1999 and 1998 and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule
of assets held for investment purposes as of December 31, 1999 is presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Stone Carlie & Company, L.L.C.
St. Louis, Missouri
June 23, 2000
<PAGE>
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
--------------------
1999 1998
---- ----
<S> <C> <C>
Assets
Participant directed investments $245,262,368 $204,677,941
------------ ------------
Receivables
Participant 520,657 536,310
Employer 357,934 278,765
------------ ------------
Total receivables 878,591 815,075
------------ ------------
Net assets available for benefits $246,140,959 $205,493,016
============ ============
</TABLE>
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The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE>
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1999 1998
---- ----
<S> <C> <C>
Additions to net assets attributed to:
Investment income
Realized and unrealized gains, net $ 33,782,429 $ 8,818,097
Interest and dividend income 6,073,425 4,694,440
------------ ------------
Net investment income 39,855,854 13,512,537
------------ ------------
Contributions
Participant 14,712,325 9,071,893
Employer 9,688,907 7,357,213
------------ ------------
Total contributions 24,401,232 16,429,106
------------ ------------
Total additions 64,257,086 29,941,643
------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants 23,489,197 11,171,569
Administrative expenses 119,946 40,137
------------ ------------
Total deductions 23,609,143 11,211,706
------------ ------------
Net increase prior to transfers 40,647,943 18,729,937
Transfers from other plans - 91,224,911
------------ ------------
Net increase 40,647,943 109,954,848
Net assets available for benefits,
beginning of year 205,493,016 95,538,168
------------ ------------
Net assets available for benefits, end of year $246,140,959 $205,493,016
============ ============
</TABLE>
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The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
NOTE 1 - DESCRIPTION OF PLAN
The Arch Coal, Inc. Employee Thrift Plan (the Plan) was established by
Arch Coal, Inc. (the Company) for the benefit of the eligible employees
of the Company, its subsidiaries and controlled affiliates.
The following description of the Plan provides only general
information. Participants should refer to the Summary Plan
Description, copies of which are available from the Company, for a more
complete description of the Plan's provisions.
Certain provisions of the Plan as described below do not apply to or
have been modified for certain subsidiaries and affiliates of the
Company.
General
The Plan is a defined contribution plan established by the Company
under the provisions of Section 401(a) of the Internal Revenue Code
(IRC), which includes a qualified deferred arrangement as described in
Section 401(k) of the IRC, for the benefit of eligible employees. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
The Company has established a Pension Committee to oversee the
activities of the Plan and has appointed the Senior Vice President -
Law and Human Resources as Plan Administrator. Plan investments are
held in a trust with Chase Manhattan Bank as trustee. American Century
Retirement Plan Services is the Plan's recordkeeper.
Eligibility
Participation in the Plan is open to all full-time salaried employees,
all full-time nonunion hourly employees, and certain union employees
where specified by applicable collective bargaining agreements of the
Company, its subsidiaries, and any controlled affiliates that elect to
participate in the Plan.
Participant Accounts
Individual accounts are maintained for each participant to reflect the
participant's share of the Plan's income, the Company's contribution
and the participant's contribution. Allocations are based on
participant account balances, as defined.
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Page 4
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Contributions
Participants may contribute up to 16% of compensation, as defined by
the Plan, on a pre-tax, after-tax, or combined basis. The Company
matches 100% of the first 6% of compensation contributed by each
participant. Participant and Company contributions are made with each
weekly or biweekly payroll. Contributions to the plan, including
employee and employer contributions, are subject to various limitations
imposed by the Internal Revenue Code.
Vesting
Participants are fully vested in their contributions and all earnings
thereon. All eligible employees of the Company at December 31, 1997
became fully vested in the Plan. Eligible employees hired subsequent
to December 31, 1997 vest in Company contributions and earnings thereon
upon the completion of three full and consecutive years of service.
All participants become fully vested upon death while employed, total
disability, or at normal retirement age (age 65), regardless of the
number of months of participation.
Forfeitures of terminated participants' nonvested amounts are used to
reduce the Company's future contributions. Restoration of such
forfeitures to reemployed participants is made in accordance with the
Plan's provisions.
Withdrawals
Upon death, disability, retirement, or termination of employment, a
participant or his or her designated beneficiary may elect to withdraw
the value of the participant's vested interest in his or her account.
The normal form of payment is a lump-sum distribution. Alternative
forms of payment include annuity purchase, installments, and direct
rollover.
Active participants can make hardship withdrawals of pre-tax employee
contributions in certain circumstances and can make withdrawals of
vested employer contributions, after-tax employee contributions, or
rollover contributions on a non-hardship basis. All such withdrawals
are subject to various restrictions and may be subject to income tax
penalties.
Loans to Participants
Participants who have been in the Plan for at least 12 months may
borrow a portion of their account in accordance with the provisions of
the Plan. No loan shall be made if, immediately after the loan, the
unpaid balance of all loans to the participant would exceed the lesser
of $50,000 or 50% of the vested portion of the participant's account.
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Page 5
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Loans to Participants (Continued)
The maximum repayment period for a loan not used for the acquisition of
a participant's primary residence is five years. If a loan is used for
the acquisition of a participant's primary residence, the maximum
repayment period is 15 years. All outstanding participant loans must
be repaid upon the participant's termination of employment with the
Company.
Loans are secured by assignment of the participant's account and the
participant's collateral promissory note for the amount of the loan.
Interest rates are based on the prime rate on the first working day of
the month in which the loans are made.
Investment Options
Participants direct contributions, including Company matching
contributions, into one or more investment options in 1% increments.
Participants may change their investment elections daily. A
description of each investment option available at December 31, 1999 is
provided below:
. Arch Coal, Inc. Common Stock Fund - Funds are invested in Arch Coal,
Inc. common stock.
. ARCO Common Stock Fund - Funds are invested in common stock of the
Atlantic Richfield Company (Arco). This fund option is only
available to former employees of Arco who became employees of the
Company through the Company's acquisition of Arco's coal operations,
as further described in Note 3. No contributions or transfers into
this fund option are allowed. Furthermore, this fund option is
temporary and participants must transfer any remaining balances to
other options at the earlier of 90 days after the effective date of
the pending merger of Arco and BP Amoco or December 31, 2003.
. Primco Stable Value Fund - This fund invests in long-term investment
contracts issued by a variety of insurance carriers, collective
trusts, pooled separate accounts, and money market funds. The
objective of this fund is to generate current income, while
providing protection against loss of capital. The investment
contracts included in this fund had average yields of 5.66% and
6.01% for the years ended December 31, 1999 and 1998, respectively.
The average crediting interest rates were 5.94% and 5.54% at
December 31, 1999 and 1998, respectively. The fair value of the
investment contracts was $53,822,660 and $45,480,266 at December 31,
1999 and 1998, respectively.
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Page 6
<PAGE>
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Investment Options (Continued)
. American Century GNMA Fund - This fund invests in mortgage-backed
Ginnie Mae certificates. The investment objective is to generate
current interest income while limiting exposure to loss of capital.
. Dodge & Cox Balanced Fund - This fund invests in a combination of
stocks and bonds and seeks to provide current income and the
opportunity for long-term growth.
. J.P. Morgan Diversified Fund - This fund invests in a combination of
stocks and bonds and seeks to provide current income and the
opportunity for long-term growth.
. American Century Income and Growth Fund - This fund invests
primarily in dividend-paying common stocks and seeks to provide
current income and long-term growth.
. MAS Value Institutional Fund - This fund invests primarily in common
stocks and seeks long-term growth by following a value-oriented
investment approach.
. Franklin Balance Sheet Fund - This fund invests in common stocks,
preferred stocks, and debt securities and seeks high total return
and long-term growth by following a value-oriented investment
approach.
. American Century Equity Index Fund - This fund invests in a broad
portfolio of common stocks and seeks to track the performance of the
Standard & Poor's 500 Index.
. American Century Ultra Fund - This fund, formerly the Twentieth
Century Ultra Fund, invests primarily in common stocks with above-
average growth potential and above-average price volatility.
. American Century International Growth Fund - This fund, formerly the
Twentieth Century International Growth Fund, invests primarily in
common stocks of foreign companies and seeks long-term growth
subject to the volatility inherent in international investing.
. Schwab Personal Choice Retirement Account - This is an option
wherein a plan participant can make self-directed investments
directly in equity and debt securities through a Charles Schwab &
Company brokerage account.
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Page 7
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Administrative Expenses
The Company pays the salaries and related benefits of employees who
administer the Plan. Participants pay loan fees. All other
administrative expenses are paid by the Plan. Administrative expenses
do not include investment advisory fees, which directly reduce net
investment income.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions set forth in ERISA. In
the event of Plan termination, participants will become fully vested in
their accounts. The net assets of the Plan will be allocated to
provide benefits to participants as prescribed by ERISA.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis
of accounting.
Investment Valuation
Investments of the Plan are stated at fair value. Publicly traded
securities are valued at their quoted market prices. Investments in
mutual funds are valued at published market value on the last business
day of the plan year. Investment contracts are stated at contract
value (which represents cost plus accumulated interest, less funds to
pay for certain benefits and loans to participants) because they are
fully benefit responsive. The fair value of the participation units
owned by the Plan in the collective trust funds and pooled separate
accounts are based on quoted redemption values on the last business day
of the plan year.
Participant notes receivable are valued at their outstanding balances,
which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
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Page 8
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Adoption of SOP 99-3
The Plan has adopted Accounting Standards Executive Committee Statement
of Position 99-3, "Accounting for and Reporting of Certain Defined
Benefit Plan Investments and Other Disclosure Matters." Certain prior
year disclosures have been modified for consistent presentation.
NOTE 3 - PLAN MERGERS AND ASSET TRANSFERS
On January 1, 1998, the Company merged three similar plans sponsored by
the Company and its subsidiaries into the Plan and amended the Plan to
reflect this merger. The value of assets transferred is based on the
value of the assets of the merged plans as of December 31, 1997.
Effective June 1, 1998, in connection with the Company's acquisition of
the domestic coal related operations of Arco, certain Arco defined
contribution plan assets allocated to former Arco employees who became
employees of the Company and its affiliates as a result of the
acquisition were transferred to the Plan. The Plan was amended to
reflect and allow this asset transfer.
The assets transferred to the Plan as a result of these plan mergers
and asset transfers during the year ended December 31, 1998 are as
follows:
<TABLE>
<CAPTION>
Assets
Transfer from Transferred
--------------------------------------------- -------------
<S> <C>
Ashland Coal, Inc. Employee Thrift Plan $29,108,983
Mingo Logan Coal Company Retirement Plan
and Mingo Logan Hourly Employees Savings Plan 7,799,114
Coal Mac, Inc. Savings and Retirement Plan 4,767,169
Arco Thrift and Savings Plans 49,549,645
-----------
$91,224,911
===========
</TABLE>
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Page 9
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 4 - INVESTMENTS
The following presents investments of the Plan, including investments
that represent five percent or more of the Plan's net assets. All
investments are participant directed.
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
------------ ------------
<S> <C> <C>
Arch Coal, Inc., 361,725 and 160,738
shares $ 4,112,048 $ 2,787,504
Atlantic Richfield Company, 128,320 and
308,325 shares 11,099,956 20,123,472
Schwab Personal Choice Retirement
Accounts, various investments 10,958,112 1,859,894
American Century Ultra Fund, 786,917
and 642,666 shares 36,025,059 21,471,454
American Century International Growth
Fund, 726,769 and 648,734 shares 10,879,735 6,214,873
American Century GNMA Fund, 657,036
and 764,369 shares 6,662,346 8,171,106
American Century Income and Growth
Fund, 1,075,023 and 1,027,329 shares 36,604,531 30,049,366
Franklin Balance Sheet Fund, 170,854 and
240,845 shares 5,205,903 7,610,710
MAS Value Institutional Fund, 720,078
and 750,647 shares 8,734,546 10,861,857
J.P. Morgan Diversified Fund, 510,873 and
427,755 shares 8,541,803 6,634,479
Dodge & Cox Balanced Fund, 211,681 and
197,783 shares 13,909,518 12,899,397
American Century Equity Index Fund,
4,408,537 shares 25,878,111 -
Barclays S&P 500 Equity Index Fund,
711,053 units - 20,826,732
Primco Stable Value Fund, 4,954,137 and
4,238,744 units 55,209,896 44,826,413
Participant notes receivable, 6.00% -
9.75% 11,440,804 10,340,684
------------ ------------
$245,262,368 $204,677,941
============ ============
</TABLE>
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Page 10
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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NOTE 5 - TAX STATUS OF THE PLAN
The Plan obtained its latest determination letter on August 9, 1996, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan's
tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
NOTE 6 - TRANSACTIONS WITH PARTIES-IN-INTEREST
The Company engages the services of a third-party service provider to
assist it in carrying out certain administrative and recordkeeping
functions under the Plan. The Plan has investments in the common stock
of the Company as well as in mutual funds sponsored by the third-party
service provider and a collective trust sponsored by the Plan Trustee.
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Page 11
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ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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SUPPLEMENTAL SCHEDULE
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Page 12
<PAGE>
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
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SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES
December 31, 1999
<TABLE>
<CAPTION>
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Par or Current
Lessor, or Similar Party Maturity Value Value
---------------------------- ------------------------- -------
<S> <C> <C>
Participant Directed Investments
--------------------------------
Common stock:
Arch Coal, Inc. Stock Fund 361,725 shares $ 4,112,048
Atlantic Richfield Company Stock Fund 128,320 shares 11,099,956
Schwab Personal Choice
Retirement Accounts various 10,958,112
------------
26,170,116
------------
Mutual funds:
American Century Ultra Fund 786,917 shares 36,025,059
American Century International
Growth Fund 726,769 shares 10,879,735
American Century GNMA Fund 657,036 shares 6,662,346
American Century Income and
Growth Fund 1,075,023 shares 36,604,531
Franklin Balance Sheet Fund 170,854 shares 5,205,903
MAS Value Institutional Fund 720,078 shares 8,734,546
J.P. Morgan Diversified Fund 510,873 shares 8,541,803
Dodge & Cox Balanced Fund 211,681 shares 13,909,518
American Century Equity Index Fund 4,408,537 shares 25,878,111
------------
152,441,552
------------
Participant loans 6.00% - 9.75% 11,440,804
------------
</TABLE>
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See independent auditors' report. Page 13
<PAGE>
SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES (Continued)
December 31, 1999
<TABLE>
<CAPTION>
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Par or Current
Lessor, or Similar Party Maturity Value Value
---------------------------------------- ------------------------- -------
<S> <C> <C>
Participant Directed Investments, Continued
Collective trusts:
Bankers Trust Delaware - Basic $ 1,570,565
Chase Manhattan Bank Pooled
Cash Investment Fund 4,058,941
------------
5,629,506
------------
Investment contracts:
Allstate Life Insurance Co. 8,366,563
State Street Bank & Trust 3,660,474
United of Omaha Life Insurance 501,550
Business Men's Assurance MBIA 1,512,992
GE Life & Annuity 1,516,034
Jackson National Life 1,006,256
Metropolitan Life Insurance Company 1,423,140
Monumental Life Insurance Company 6,095,344
Monumental Life Insurance Company 1,515,536
UBS AG 1,443,643
------------
27,041,532
------------
Pooled separate accounts:
John Hancock Mutual Life 5,521,203
Allstate Life Insurance Co. 1,109,933
Bankers Trust Delaware 6,611,338
State Street Bank & Trust 6,102,207
Transamerica Life & Annuity 3,194,177
------------
22,538,858
------------
$245,262,368
============
</TABLE>
--------------------------------------------------------------------------------
See independent auditors' report. Page 14
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the duly
authorized Plan Administrator has executed this annual report.
ARCH COAL, INC. EMPLOYEE THRIFT PLAN
Date: June 28, 2000 By: /s/ Bradley M. Allbritten
---------------------------------------------
Bradley M. Allbritten
Plan Administrator
<PAGE>
INDEX TO EXHIBIT
Exhibit 23 Consent of Stone Carlie & Company, L.L.C.,
Independent Auditors
