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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 11-K

 

(Mark One)

 

x                    Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2014

 

OR

 

o                    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

 

Arch Coal, Inc. Employee Thrift Plan

(Full title of the plan and the address of the plan, if different from that of the issuer named below)

 

 

Name and Address of the issuer of the Securities
Held Pursuant to the Plan —

 

Arch Coal, Inc.

One CityPlace Drive, Suite 300
St. Louis, Missouri 63141

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

 

 

 



Table of Contents

 

Contents

 

 

Page

 

 

Report Of Independent Registered Public Accounting Firm

1

 

 

Financial Statements

 

 

 

Statement Of Net Assets Available For Benefits

2

 

 

Statement Of Changes In Net Assets Available For Benefits

3

 

 

Notes To Financial Statements

4 - 18

 

 

Supplementary Information

 

 

 

Schedule Of Assets Held At End Of Year

19 - 20

 



Table of Contents

 

Report Of Independent Registered

Public Accounting Firm

 

The Retirement Committee

Arch Coal, Inc. Employee Thrift Plan

St. Louis, Missouri

 

We have audited the accompanying statement of net assets available for benefits of the Arch Coal, Inc. Employee Thrift Plan (the Plan) as of December 31, 2014 and 2013, and the related statement 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 the standards of the Public Company Accounting Oversight Board (United States).  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 as of December 31, 2014 and 2013, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental schedule of assets (held at end of year) as of December 31, 2014 is presented for purposes of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  The supplemental schedule is the responsibility of the Plan’s management.  The supplemental schedule has been subjected to the auditing procedures applied in the 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.

 

/s/ RubinBrown LLP

St. Louis, Missouri

June 29, 2015

 



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

 

 

 

December 31,

 

 

 

2014

 

2013

 

Assets

 

 

 

 

 

Investments, At Fair Value

 

 

 

 

 

Mutual funds

 

$

199,398,891

 

$

206,956,923

 

Stable value fund

 

104,900,209

 

105,864,403

 

Company stock

 

8,169,449

 

17,580,458

 

Collective trust funds

 

197,923,419

 

197,420,006

 

Brokerage securities

 

9,916,878

 

13,397,056

 

Total Investments, At Fair Value

 

520,308,846

 

541,218,846

 

 

 

 

 

 

 

Receivables

 

 

 

 

 

Notes receivable from participants

 

28,751,371

 

28,032,930

 

Company contributions

 

26,368

 

47,290

 

Participant contributions

 

29,126

 

54,588

 

Total Receivables

 

28,806,865

 

28,134,808

 

 

 

 

 

 

 

Net Assets Reflecting Investments At Fair Value

 

549,115,711

 

569,353,654

 

 

 

 

 

 

 

Adjustment From Fair Value To Contract Value For Fully Benefit-Responsive Investment Contracts

 

(2,374,253

)

(1,584,347

)

 

 

 

 

 

 

Net Assets Available For Benefits

 

$

546,741,458

 

$

567,769,307

 

 

See the accompanying notes to financial statements.

 

2



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

STATEMENT OF CHANGES IN NET ASSETS

AVAILABLE FOR BENEFITS

 

 

 

For The Years

 

 

 

Ended December 31,

 

 

 

2014

 

2013

 

Additions To Net Assets Attributed To:

 

 

 

 

 

Contributions

 

 

 

 

 

Participant salary deferral

 

$

28,921,330

 

$

32,155,240

 

Company

 

22,763,988

 

25,179,450

 

Participant after-tax

 

1,658,903

 

1,698,613

 

Rollover

 

1,112,111

 

960,431

 

Total Contributions

 

54,456,332

 

59,993,734

 

 

 

 

 

 

 

Deductions From Net Assets Attributed To:

 

 

 

 

 

Benefits paid directly to participants

 

92,350,090

 

109,293,476

 

Administrative fees

 

869,681

 

830,328

 

Total Deductions

 

93,219,771

 

110,123,804

 

 

 

 

 

 

 

Investment Income

 

 

 

 

 

Dividends and interest

 

15,229,214

 

11,170,027

 

Net appreciation in fair value of investments

 

1,526,906

 

62,254,893

 

Net Investment Income

 

16,756,120

 

73,424,920

 

 

 

 

 

 

 

Interest Income On Notes Receivable From Participants

 

979,470

 

1,023,672

 

 

 

 

 

 

 

Net Increase (Decrease)

 

(21,027,849

)

24,318,522

 

 

 

 

 

 

 

Net Assets Available For Benefits - Beginning Of Year

 

567,769,307

 

543,450,785

 

 

 

 

 

 

 

Net Assets Available For Benefits - End Of Year

 

$

546,741,458

 

$

567,769,307

 

 

See the accompanying notes to financial statements.

 

3



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

NOTES TO FINANCIAL STATEMENTS

December 31, 2014 And 2013

 

1.                                      Description Of The 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 Plan Document 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 that covers substantially all salaried employees, 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.  It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

 

Contributions

 

Participants may elect to defer between 1% and 50% of compensation.  Highly compensated employees may contribute up to 16% of compensation.  Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions.  Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans (rollover).  The Company is required to make matching contributions to all participants equal to 100% of the participant salary deferral contributions up to the first 6% of eligible compensation, with the exception of participants who are hourly eligible employees of Mountain Laurel, who instead, receive a fixed 8% employer contribution.

 

The Plan includes an automatic enrollment provision for all eligible employees.  The automatic enrollment provides for default salary deferral contributions of 6% of eligible compensation, which will be invested in a target retirement fund.  The participant has the option to make changes to the salary deferral percentage and investment allocation at any time.

 

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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

Participant Accounts

 

Each participant’s account is credited with the participant’s salary deferral and rollover contributions; the Company’s matching contribution, and Company discretionary contributions, if applicable, and an allocation of Plan earnings.  The allocation of earnings is determined by the earnings of the participant’s investment selection based on each participant’s account balance, as defined in the Plan Document.  In addition, each participant’s account is charged for applicable Plan expenses.  The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

 

Vesting

 

Participants are fully vested in their salary deferral and rollover contributions plus actual earnings.  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 upon the completion of three full years of service.  The hourly employees at Mountain Laurel are fully vested after the completion of two full years of service.  Former participants in the International Coal Group, Inc. 401(k) Savings and Retirement Plan (which merged into the Plan as of January 1, 2012) are 20% vested after the completion of one year of service, 40% vested after the completion of two years of service, and 100% vested after the completion of three years of service.

 

All participants become fully vested upon death while employed, total disability, or normal retirement age, regardless of the number of months of participation.

 

Notes Receivable From Participants

 

Active participants, with some exceptions, may borrow from their account a minimum of $500 or up to a maximum equal to the lesser of $50,000 or 50% of their vested account balances.  Note terms range from one to five years or up to fifteen years for the purchase of a primary residence.  The notes are secured by the balance in the participant’s account and bear interest at the prime rate listed in the Wall Street Journal on the first day of the month the loan is processed.  Principal and interest are paid ratably through weekly and bi-weekly payroll deductions.  At December 31, 2014, interest rates on the notes receivable range from 3.25% to 9.25%.  The final installments are due at various dates through November 2029.

 

Payment Of Benefits

 

Upon death, termination of service, retirement, or attainment of age 70-1/2, a participant may receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account.  Participant accounts with vested balances of $1,000 or less will be automatically distributed unless otherwise instructed.

 

5



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

In-Service Withdrawals

 

Subject to certain qualifications, upon reaching age 59-1/2 or upon experiencing a qualifying financial hardship, a participant may withdraw all or part of his or her vested account.  Hardship withdrawals will be approved only if they conform to the Plan provisions and established Internal Revenue Service (IRS) safe harbors.  A participant (excluding hourly employees of Mountain Laurel) may also withdraw all or part of his or her vested portion of Company contributions if he or she has participated in the Plan for at least three consecutive years.  A participant may withdraw after-tax participant contributions after he or she has participated in the Plan for 12 months.

 

Forfeited Accounts

 

Forfeited amounts of Company contributions are used to offset future Company contributions to the Plan.  At December 31, 2014 and 2013, forfeited amounts that were available to reduce future Company contributions were $566,388 and $421,538, respectively.  During the Plan years ended December 31, 2014 and 2013, $1,060,411  and $1,143,242, respectively, in forfeited funds were used to offset Company contributions.

 

Investment Options

 

Upon enrollment in the Plan, a participant may direct contributions in a number of investment options offered by the Plan.

 

Administrative Expense

 

Generally, all expenses related to the administration of the Plan are paid from Plan assets.  Fees related to the administration of notes receivable from participants and investment advisory services are charged directly to the participant’s account and are included in administrative expenses.

 

6



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

2.                                      Summary Of Significant Accounting Policies

 

Basis Of Accounting

 

The financial statements of the Plan are prepared under the accrual basis of accounting.

 

Estimates And Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of additions to and deductions from net assets during the reporting period.  Actual results could differ from those estimates.

 

Investment Valuation And Income Recognition

 

The Plan’s investments are reported at fair value.  Fair value is the price that would be received in an asset sale or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  See Note 3 for a discussion of fair value measurements.

 

Interest income is recorded as earned on the accrual basis.  Purchases and sales of securities are recorded on a trade-date basis.  Dividends are recorded on the ex-dividend date.  Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

 

Investment contracts held by a defined contribution plan are required to be reported at fair value.  However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan.  The Plan invests in fully-benefit responsive investment contracts through its investment in the Invesco Stable Value Fund.  The statement of net assets available for benefits presents the fair value of the investment contracts, as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value.  The statement of changes in net assets available for benefits is prepared on a contract value basis.

 

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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

Notes Receivable From Participants

 

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.  Delinquent participant notes are reclassified as distributions based upon the terms of the Plan Document.

 

Payment Of Benefits

 

Benefits are recorded when paid.

 

Recent Accounting Pronouncement

 

In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent). Under this ASU, investments for which the practical expedient is used to measure fair value at NAV must be removed from the fair value hierarchy. Instead, those investments must be included as a reconciling line item so that the total fair value amount of investments in the disclosure is consistent with the amount on the statement of net assets. Plan management is currently evaluating the impact of ASU No. 2015-07, which will be effective for the Plan beginning January 1, 2016.

 

3.                                      Investments

 

The Company has established a Retirement Committee to oversee the activities of the Plan and has appointed the Vice President - Human Resources as the Plan Administrator.  Mercer Fiduciary Trust Company and Mercer HR Services (collectively, Mercer) is the Trustee and Recordkeeper for the Plan, respectively.

 

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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

Investments consist of the following:

 

 

 

December 31,

 

 

 

2014

 

2013

 

Mutual Funds

 

 

 

 

 

American Century Income and Growth Fund

 

$

16,310,969

 

$

17,101,555

 

Growth Fund of America

 

34,875,833

*

37,297,808

*

Investment Company of America Fund

 

4,877,270

 

4,992,119

 

Royce Special Equity Fund

 

5,201,167

 

6,624,016

 

Dodge & Cox Balanced Fund

 

54,334,986

*

55,615,532

*

Franklin Templeton Balance Sheet Fund

 

11,466,022

 

14,335,935

 

Harding Loevner International Equity Fund

 

41,427,924

*

36,516,640

 

PIMCO Total Return Fund

 

21,652,761

 

24,382,429

*

Jennison Mid Cap Growth Fund

 

9,251,959

 

10,090,889

 

Total Mutual Funds

 

199,398,891

 

206,956,923

 

 

 

 

 

 

 

Stable Value Fund

 

 

 

 

 

(At Contract Value)

 

102,525,956

*

104,280,056

*

 

 

 

 

 

 

Company Stock

 

8,169,449

 

17,580,458

 

 

 

 

 

 

 

Collective Trust Funds

 

 

 

 

 

Wells Fargo Dow Jones Target Today

 

364,712

 

429,823

 

Wells Fargo Dow Jones Target 2010

 

1,546,056

 

2,163,860

 

Wells Fargo Dow Jones Target 2015

 

4,317,207

 

4,958,956

 

Wells Fargo Dow Jones Target 2020

 

19,338,364

 

22,331,080

 

Wells Fargo Dow Jones Target 2025

 

10,831,062

 

10,970,523

 

Wells Fargo Dow Jones Target 2030

 

17,880,445

 

18,972,674

 

Wells Fargo Dow Jones Target 2035

 

12,521,026

 

12,701,989

 

Wells Fargo Dow Jones Target 2040

 

21,092,442

 

20,770,249

 

Wells Fargo Dow Jones Target 2045

 

18,135,504

 

17,280,675

 

Wells Fargo Dow Jones Target 2050

 

20,507,944

 

18,221,547

 

Northern Trust Collective Daily S&P 500 Equity Index Fund

 

71,388,657

*

68,618,630

*

Total Collective Trust Funds

 

197,923,419

 

197,420,006

 

 

 

 

 

 

 

Brokerage Securities

 

9,916,878

 

13,397,056

 

 

 

 

 

 

 

 

 

$

517,934,593

 

$

539,634,499

 

 


*Investment represents 5% or more of net assets available for benefits.

 

9



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

During 2014 and 2013, the Plan’s investments, including gains and losses on investments bought and sold, as well as held during the year, appreciated (depreciated) in value as follows:

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Mutual funds

 

$

8,700,086

 

$

34,840,521

 

Company stock

 

(10,834,116

)

(9,541,677

)

Collective trust funds

 

6,317,642

 

37,004,055

 

Brokerage securities

 

(2,656,706

)

(48,006

)

 

 

 

 

 

 

 

 

$

1,526,906

 

$

62,254,893

 

 

Stable Value Fund

 

The Plan invests in the Invesco Stable Value Fund (the Fund), a benefit-responsive investment managed exclusively for the Plan by Invesco Institutional, N.A. (Invesco).  Invesco maintains the contributions in a managed account, which is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses.  The Fund’s key objectives are to provide preservation of principal, maintain a stable interest rate, and provide daily liquidity at contract value for participant withdrawals and transfers in accordance with the provisions of the Plan.

 

The Fund invests in synthetic guaranteed investment contracts (GICs), which are wrap contracts paired with an underlying investment or investments, usually a portfolio, owned by the Plan, of common collective trust funds.  The Fund purchases wrapper contracts from financial services institutions.  Synthetic GICs credit a stated interest rate for a specified period of time.  Investment gains and losses are amortized over the expected duration through the calculation of the interest rate applicable to the Plan on a prospective basis.  Synthetic GICs provide for a variable crediting rate, which typically resets monthly and quarterly, and the issuer of the wrap contract provides assurance that future adjustments to the crediting rate cannot result in a crediting rate less than zero.  The crediting rate is primarily based on the current yield-to-maturity of the covered investments, plus or minus amortization of the difference between the market value and contract value of the covered investments over the duration of the covered investments at the time of the computation.  The crediting rate is most affected by the change in the annual effective yield-to-maturity of the underlying securities, but is also affected by the difference between the contract value and the market value of the covered investments.  Depending on the change in duration from reset period to reset period, the magnitude of the impact to the crediting rate of the contract to market difference is heightened or lessened.

 

10



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

As described in Note 2, because the Fund is fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to the Fund.  Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.

 

Certain events limit the ability of the Plan to transact at contract value with the issuer.  Such events include the following: (1) material, adverse amendments to the Plan documents (including complete or partial Plan termination or merger with another plan), or (2) the decision by the Company to withdraw all assets from the funds and reinvest in another investment vehicle.  The Plan Administrator does not believe that the occurrence of any such value event, which would limit the Plan’s ability to transact at contract value with participants, is probable.

 

The investment contracts included in the Fund had an average yield of 1.47% and 1.30% for the years ended December 31, 2014 and 2013, respectively.  The average crediting interest rate was 1.83% and 1.55% at December 31, 2014 and 2013, respectively.

 

Collective Trust Funds

 

Equity Index Fund

 

The Plan invests in a collective trust fund of which the primary objective is to approximate the risk and return of the S&P 500 Index.  This index is commonly used to represent the large cap segment of the U.S. equity market.  The Plan does not have any unfunded commitments relating to its investments or any significant restrictions on redemptions.  Participant-directed redemptions can be made on any business day and do not have a redemption notice period.

 

Target Date Funds

 

The Plan invests in collective trust funds in which the primary objective is to approximate the risk and return of the Dow Jones Target Index Funds.  The funds invest in a combination of equity, fixed income and money market securities using an asset allocation strategy.  The Plan does not have any unfunded commitments relating to their investments or any significant restrictions on redemptions.  Participant-directed redemptions can be made on any business day and do not have a redemption notice period.

 

11



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

Fair Value Measurements

 

The Plan follows current accounting standards, which establish a framework for measuring fair value.  The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value are described below:

 

Level 1                                                        Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

 

Level 2                                                        Inputs to the valuation methodology include:

 

·                  Quoted prices for similar assets or liabilities in active markets;

 

·                  Quoted prices for identical or similar assets or liabilities in inactive markets;

 

·                  Inputs other than quoted prices that are observable for the asset or liability;

 

·                  Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

 

Level 3                                                        Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

12



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

Following is a description of the valuation methodologies used for assets measured at fair value:

 

Money Market Fund And Mutual Funds

 

Valued at the daily closing price as reported by the fund.  The funds held by the Plan are open-end funds that are registered with the Securities and Exchange Commission.  These funds are required to publish their daily net asset value (NAV) and to transact at that price.  The funds held by the Plan are deemed to be actively traded.

 

Stable Value Fund

 

Valued at NAV based on the market value of the underlying investment assets divided by the number of units outstanding at the end of the Plan year.  The NAV, as provided by the trustee, is used as a practical expedient to estimate fair value.  The fund seeks to provide preservation of principal, maintain a stable interest rate and provide daily liquidity at contract value for participant withdrawals and transfers in accordance with the provisions of the Plan.

 

Collective Trust Funds

 

Valued at the NAV of units of a collective trust.  The NAV, as provided by the trustee, is used as a practical expedient to estimate fair value.  The NAV is based on the fair value of the underlying investments held by the fund less its liabilities.  This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV.

 

Company Stock And Brokerage Securities

 

Valued at the closing price reported on the active market on which the individual securities are traded.

 

The methods described above may produce fair value calculations that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

13



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

The following tables set forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of:

 

 

 

December 31, 2014

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Mutual funds

 

 

 

 

 

 

 

 

 

Growth funds

 

$

90,756,883

 

$

 

$

 

$

90,756,883

 

Balanced fund

 

54,334,986

 

 

 

54,334,986

 

Blended funds

 

4,877,270

 

 

 

4,877,270

 

Value funds

 

27,776,991

 

 

 

27,776,991

 

Income fund

 

21,652,761

 

 

 

21,652,761

 

Total mutual funds

 

199,398,891

 

 

 

199,398,891

 

 

 

 

 

 

 

 

 

 

 

Collective trust funds

 

 

 

 

 

 

 

 

 

Target date funds

 

 

126,534,762

 

 

126,534,762

 

Equity index fund

 

 

71,388,657

 

 

71,388,657

 

Total collective trust funds

 

 

197,923,419

 

 

197,923,419

 

 

 

 

 

 

 

 

 

 

 

Stable value fund

 

 

 

 

 

 

 

 

 

Collective trust funds

 

 

99,508,715

 

 

99,508,715

 

Money market fund

 

5,357,278

 

 

 

5,357,278

 

Other

 

 

34,216

 

 

34,216

 

Total stable value fund

 

5,357,278

 

99,542,931

 

 

104,900,209

 

 

 

 

 

 

 

 

 

 

 

Company stock

 

8,169,449

 

 

 

8,169,449

 

 

 

 

 

 

 

 

 

 

 

Brokerage securities

 

 

 

 

 

 

 

 

 

Money market fund

 

2,594,734

 

 

 

2,594,734

 

Corporate stocks

 

 

 

 

 

 

 

 

 

Consumer goods

 

245,693

 

 

 

245,693

 

Financial

 

298,698

 

 

 

298,698

 

Services

 

703,227

 

 

 

703,227

 

Basic materials

 

1,439,232

 

 

 

1,439,232

 

Industrial goods

 

267,159

 

 

 

267,159

 

Technology

 

473,814

 

 

 

473,814

 

Healthcare

 

225,019

 

 

 

225,019

 

Utilities

 

133,149

 

 

 

133,149

 

Other

 

1,601,821

 

 

 

1,601,821

 

Mutual funds

 

 

 

 

 

 

 

 

 

Growth funds

 

372,512

 

 

 

372,512

 

Balanced fund

 

107,589

 

 

 

107,589

 

Blended funds

 

328,318

 

 

 

328,318

 

Value funds

 

96,475

 

 

 

96,475

 

Income funds

 

133,229

 

 

 

133,229

 

Other funds

 

889,086

 

 

 

889,086

 

Other

 

7,123

 

 

 

7,123

 

Total brokerage securities

 

9,916,878

 

 

 

9,916,878

 

 

 

 

 

 

 

 

 

 

 

Total investments at fair value

 

$

222,842,496

 

$

297,466,350

 

$

 

$

520,308,846

 

 

14



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ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

 

 

December 31, 2013

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Mutual funds

 

 

 

 

 

 

 

 

 

Growth funds

 

$

90,529,353

 

$

 

$

 

$

90,529,353

 

Balanced fund

 

55,615,532

 

 

 

55,615,532

 

Blended funds

 

4,992,119

 

 

 

4,992,119

 

Value funds

 

31,437,490

 

 

 

31,437,490

 

Income fund

 

24,382,429

 

 

 

24,382,429

 

Total mutual funds

 

206,956,923

 

 

 

206,956,923

 

 

 

 

 

 

 

 

 

 

 

Collective trust funds

 

 

 

 

 

 

 

 

 

Target date funds

 

 

128,801,376

 

 

128,801,376

 

Equity index fund

 

 

68,618,630

 

 

68,618,630

 

Total collective trust funds

 

 

197,420,006

 

 

197,420,006

 

 

 

 

 

 

 

 

 

 

 

Stable value fund

 

 

 

 

 

 

 

 

 

Collective trust funds

 

 

101,272,934

 

 

101,272,934

 

Money market fund

 

4,556,116

 

 

 

4,556,116

 

Other

 

 

35,353

 

 

35,353

 

Total stable value fund

 

4,556,116

 

101,308,287

 

 

105,864,403

 

 

 

 

 

 

 

 

 

 

 

Company stock

 

17,580,458

 

 

 

17,580,458

 

 

 

 

 

 

 

 

 

 

 

Brokerage securities

 

 

 

 

 

 

 

 

 

Money market fund

 

3,418,206

 

 

 

3,418,206

 

Corporate stocks

 

 

 

 

 

 

 

 

 

Consumer goods

 

647,680

 

 

 

647,680

 

Financial

 

211,707

 

 

 

211,707

 

Services

 

611,911

 

 

 

611,911

 

Basic materials

 

1,576,668

 

 

 

1,576,668

 

Industrial goods

 

239,492

 

 

 

239,492

 

Technology

 

362,083

 

 

 

362,083

 

Healthcare

 

197,999

 

 

 

197,999

 

Utilities

 

56,015

 

 

 

56,015

 

Other

 

2,097,601

 

 

 

2,097,601

 

Mutual funds

 

 

 

 

 

 

 

 

 

Growth funds

 

1,293,646

 

 

 

1,293,646

 

Balanced fund

 

235,397

 

 

 

235,397

 

Blended funds

 

63,731

 

 

 

63,731

 

Value funds

 

871,425

 

 

 

871,425

 

Income funds

 

15,790

 

 

 

15,790

 

Other funds

 

1,497,705

 

 

 

1,497,705

 

Total brokerage securities

 

13,397,056

 

 

 

13,397,056

 

 

 

 

 

 

 

 

 

 

 

Total investments at fair value

 

$

242,490,553

 

$

298,728,293

 

$

 

$

541,218,846

 

 

There have been no changes in the methodologies used at December 31, 2014 or 2013.

 

15



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

4.                                      Plan Termination

 

Although it has not expressed 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 of ERISA.  In the event of Plan termination, participants will become 100% vested in their accounts.

 

5.                                      Income Tax Status

 

The Plan obtained its latest determination letter on December 16, 2013 in which the IRS stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code.  The Plan Administrator believes the Plan and the related continue to be tax exempt.

 

Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS.  The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.  The Plan’s federal tax returns for tax years 2011 and later remain subject to examination by taxing authorities.

 

6.                                      Risks And Uncertainties

 

The Plan invests in various investment securities.  Investment securities are exposed to various risks such as interest rate, market and credit risks.  Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statement of Net Assets Available For Benefits.

 

16



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

7.                                      Related Party And Party-In-Interest Transactions

 

The Plan’s investments include shares of common stock of the Company, the Plan Sponsor.  At December 31, 2014 and 2013, the Plan held 1,280,539 shares and 3,935,794 of Company common stock valued at $8,169,449 and $17,530,458, respectively. During the years ended December 31, 2014 and 2013, the Plan recorded Company common stock dividend income of $40,148 and $445,132, respectively.

 

The Plan also has service agreements with Mercer to provide various administrative and trust services.  These transactions qualify as allowable party-in-interest transactions.

 

8.                                      Reconciliation Of Financial Statements To Form 5500

 

Following is a reconciliation of net assets available for benefits and net increase per the financial statements to the Form 5500:

 

 

 

December 31,

 

 

 

2014

 

2013

 

Net assets available for benefits per the financial statements

 

$

546,741,458

 

$

567,769,307

 

Adjustment from contract value to fair value for fully benefit-responsive contracts

 

2,374,253

 

1,584,347

 

 

 

 

 

 

 

Net Assets Available For Benefits Per The Form 5500

 

$

549,115,711

 

$

569,353,654

 

 

The following is a reconciliation of the net decrease in net assets available for benefits per the financial statements to the Form 5500 for the year ended December 31, 2014:

 

Net decrease per the financial statements

 

$

(21,027,849

)

Adjustment from contract value to fair value for fully benefit-responsive contracts - prior year

 

(1,584,347

)

Adjustment from contract value to fair value for fully benefit-responsive contracts - current year

 

2,374,253

 

 

 

 

 

Net Loss Per The Form 5500

 

$

(20,237,943

)

 

17



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

Notes To Financial Statements (Continued)

 

9.                                      Subsequent Events

 

Effective January 1, 2015, hourly eligible employees of Mountain Laurel will no longer receive a fixed 8% employer contribution.  Effective January 1, 2015, the hourly eligible employees of Mountain Laurel will receive matching contributions equal to 100% of their salary deferral contributions up to the first 6% of eligible compensation.

 

18



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

E.I.N.: 43-0921172   PLAN NO.: 006

SCHEDULE OF ASSETS HELD AT END OF YEAR

Page 1 Of 2

December 31, 2014

 

 

 

 

 

Current

 

Identity Of Issuer

 

Description Of Investment

 

Value

 

 

 

 

 

 

 

Mutual Funds

 

 

 

 

 

American Century

 

American Century Income and Growth Fund

 

$

16,310,969

 

American Fund Corporation

 

Growth Fund of America

 

34,875,833

 

American Fund Corporation

 

Investment Company of America

 

4,877,270

 

Royce

 

Royce Special Equity Fund

 

5,201,167

 

Dodge & Cox Funds

 

Dodge & Cox Balanced Fund

 

54,334,986

 

Franklin Investments

 

Franklin Templeton Balance Sheet Fund

 

11,466,022

 

Harding Loevner

 

Harding Loevner International Equity Fund

 

41,427,924

 

PIMCO Investments

 

PIMCO Total Return Fund

 

21,652,761

 

Jennison Investments

 

Jennison Mid Cap Growth Fund

 

9,251,959

 

Total Mutual Funds

 

 

 

199,398,891

 

 

 

 

 

 

 

Company Stock

 

 

 

 

 

Arch Coal, Inc.*

 

Common stock

 

8,169,449

 

 

 

 

 

 

 

Collective Trust Funds

 

 

 

 

 

Wells Fargo

 

Wells Fargo Dow Jones Target Today

 

364,712

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2010

 

1,546,056

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2015

 

4,317,207

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2020

 

19,338,364

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2025

 

10,831,062

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2030

 

17,880,445

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2035

 

12,521,026

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2040

 

21,092,442

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2045

 

18,135,504

 

Wells Fargo

 

Wells Fargo Dow Jones Target 2050

 

20,507,944

 

Northern Trust

 

Collective Daily S&P 500 Equity Index Fund

 

71,388,657

 

Total Collective Trust Funds

 

 

 

197,923,419

 

 

 

 

 

 

 

Brokerage Securities

 

 

 

 

 

Mercer Securities*

 

Mercer Securities Account (Participant Directed Brokerage Accounts)

 

9,916,878

 

 

 

 

 

 

 

Balance Carried Forward

 

 

 

415,408,637

 

 

19



Table of Contents

 

ARCH COAL, INC. EMPLOYEE THRIFT PLAN

 

E.I.N.: 43-0921172   PLAN NO.: 006

SCHEDULE OF ASSETS HELD AT END OF YEAR

Page 2 Of 2

December 31, 2014

 

 

 

 

 

Current

 

Identity Of Issuer

 

Description Of Investment

 

Value

 

 

 

 

 

 

 

Balance Brought Forward

 

 

 

$

415,408,637

 

 

 

 

 

 

 

Stable Value Fund

 

 

 

 

 

AGL

 

IGT Invesco Intermediate Government/Credit Fund

 

2,224,165

 

AGL

 

IGT Invesco Short Duration Fund

 

11,070,461

 

AGL

 

IGT Jennison 1-5 Year Government Credit Fund

 

8,898,855

 

ING Life & Annuity

 

IGT Invesco Short-Term Bond Fund

 

19,103,087

 

Voya Retirement & Annuity

 

IGT Voya Short Duration

 

5,972,788

 

Transamerica

 

IGT Invesco Short-Term Bond Fund

 

13,936,536

 

Transamerica

 

IGT Invesco Core Fixed Income Fund

 

2,907,320

 

Transamerica

 

IGT BlackRock Core Fixed Income Fund

 

2,897,093

 

Transamerica

 

IGT Goldman Sachs Core

 

2,887,090

 

Transamerica

 

IGT PIMCO Core Fixed Income Fund

 

2,876,850

 

Monumental Life Insurance Co.

 

Wrapper Contract

 

34,216

 

Prudential Insurance Company

 

IGT Jennison Intermediate Government/Credit Fund

 

8,967,080

 

Prudential Insurance Company

 

IGT Invesco Intermediate Government/Credit Fund

 

8,918,482

 

Prudential Insurance Company

 

IGT PIMCO Intermediate Government/Credit Fund

 

8,848,908

 

State Street Bank & Trust Co.

 

Money Market Fund

 

5,357,278

 

Total Stable Value Fund

 

 

 

104,900,209

 

 

 

 

 

 

 

Plan Participants*

 

Notes receivable, bearing interest at 3.25% - 9.25%, due at various dates through November 2029

 

28,751,371

 

 

 

 

 

 

 

Total

 

 

 

$

549,060,217

 

 


* Represents party-in-interest

 

The above information is a required disclosure for IRS Form 5500, Schedule H, Part IV, line 4i.

 

20



Table of Contents

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on their behalf by the undersigned thereunto duly authorized.

 

 

Arch Coal, Inc. Employee Thrift Plan

 

 

 

 

By:

/s/ Allen R. Kelley

 

 

Allen R. Kelley

 

 

Plan Administrator

 

 

June 29, 2015

 

 

21



Table of Contents

 

Exhibit Index

 

Exhibit

 

Description

 

 

 

23.1

 

Consent of Independent Registered Public Accounting Firm

 

22