"Arch delivered a solid operating performance in the third quarter of 2014," said John W. Eaves, Arch's president and chief executive officer. "In particular, our western thermal operations improved cash margins per ton versus the second quarter due to increased shipment levels, higher price realizations and continued strong cost control."

For the first nine months of 2014, Arch generated adjusted EBITDA from continuing operations of $164 million compared with $218 million in the prior-year period. Revenues declined slightly year-over-year to $2.2 billion for the nine months ended Sept. 30, 2014 on lower sales volume.

"Looking ahead, we expect our western thermal operations, particularly in the Powder River Basin, to benefit from incrementally improving rail service in the fourth quarter of 2014 and in 2015," added Eaves. "In addition, we expect our metallurgical coal platform in Appalachia to benefit from a higher contribution by the low-cost Leer mine coupled with the favorable impact of idling the higher-cost Cumberland River complex."

Financial Position

During the third quarter of 2014, Arch generated $80 million in cash from operations and spent $23 million on capital outlays, resulting in positive free cash flow of $57 million.

As of Sept. 30, 2014, Arch increased its cash and short-term investments balance to $1.05 billion compared with approximately $990 million at June 30, 2014. In addition, the company's available liquidity, which includes its cash position and undrawn borrowings on its credit facilities, totaled more than $1.3 billion at the end of September.

"Arch continues to successfully execute its plan to control costs and expenses, reduce capital outlays and preserve liquidity," said John T. Drexler, Arch's senior vice president and chief financial officer. "To that end, we are further reducing our expectations for corporate administrative expense and capital spending in 2014, and expect to end the year with approximately $1 billion in cash and short-term investments. This strong liquidity position, coupled with no debt maturities until mid-2018, provides Arch with the financial flexibility needed to navigate current coal market conditions."

Core Values

Arch continued to improve upon its industry-leading safety record in the third quarter of 2014. The company's total incident rate for the first nine months of 2014 was 15 percent better than achieved during the comparable time period in 2013. In September, the Coal-Mac complex in Appalachia completed three consecutive years without a lost-time incident, and the Coal Creek mine in the Powder River Basin reached one year without a reportable incident.

Arch also built upon its environmental compliance record for the three months ended Sep. 30, 2014. The Vindex mine was honored during the third quarter of 2014 with an environmental award for its excellence in reforestation from the Appalachian Regional Reforestation Initiative.

"We made further strides in reaching Arch's safety and environmental goals during the third quarter of 2014," said Paul A. Lang, Arch's executive vice president and chief operating officer. "Five of our complexes attained A Perfect Zero – the dual accomplishment of operating without an environmental violation or reportable safety incident – during the quarter just ended. We commend our employees for their dedication and hard work, and view this unwavering focus on our core values as essential to long-term success."

Operational Results

"Arch's cash margin per ton increased quarter-over-quarter by 24 percent in the Powder River Basin and 7 percent in the Bituminous Thermal segment," said Lang. "That margin expansion helped offset lower cash margin per ton in Appalachia in the third quarter, which stemmed from the impact of two scheduled longwall moves and costs associated with the previously announced idling of Cumberland River. Good cost control remains a top priority at Arch, and we are currently projecting a strong end to 2014 in terms of cost containment."