Organization and Business	12 Months Ended
Dec. 31, 2012
Organization and Business
Organization and Business	1. Organization and Business CPE Inc. is one of the largest producers of coal in the U.S. and the PRB, based on our 2012 coal sales. We operate some of the safest mines in the coal industry. According to MSHA data, in 2012, we had one of the lowest employee all injury incident rates among the largest U.S. coal producing companies. We currently operate solely in the PRB, the lowest cost region of the major coal producing regions in the U.S, where we operate three wholly-owned surface coal mines, the Antelope mine, the Cordero Rojo mine and the Spring Creek mine, and own a 50% non-operating interest in a fourth surface mine, the Decker mine. We also have two major development projects, the Youngs Creek project and the potential Crow project. We continue to seek ways to increase our future export capacity through existing and proposed new Pacific Northwest export terminals, including our option agreement with SSA Marine and potential option at the Millennium terminal that would be granted upon closing our Decker transaction with Ambre Energy. Our Antelope and Cordero Rojo mines are located in Wyoming and are two of the four largest coal mines in the U.S. Our Spring Creek mine is located in Montana, and is the largest U.S. exporter of thermal coal into South Korea. Our mines produce subbituminous thermal coal with low sulfur content, and we sell our coal primarily to domestic and foreign electric utilities. We do not produce any metallurgical coal. Thermal coal is primarily consumed by electric utilities and industrial consumers as fuel for electricity generation and steam output. In 2012, the coal we produced generated approximately 4% of the electricity produced in the U.S. As of December 31, 2012, we controlled approximately 1.3 billion tons of proven and probable reserves. For information regarding our revenue and long-lived assets by geographic area, as well as revenue from external customers, Adjusted EBITDA and total assets by segment, please see Note 20 of Notes to Consolidated Financial Statements in Item 8. During 2012, we acquired rights to substantial undeveloped coal and complementary surface assets in the Northern PRB ("Youngs Creek project"). In January 2013, we executed an option to lease agreement ("Option Agreement") and a corresponding exploration agreement ("Exploration Agreement") with the Crow Tribe of Indians, which are subject to approval by the Department of the Interior. This potential coal project (the "Crow project") is located on the Crow Indian Reservation in southeast Montana, near our Spring Creek mine and Youngs Creek project. We are in the process of evaluating the development options for the Youngs Creek project and the potential Crow project, but believe that their proximity to the Spring Creek mine represents an opportunity to optimize our mine developments in the Northern PRB. On December 5, 2012, we and the other 50% owner in the Decker mine, Ambre Energy, announced that we entered into agreements for Ambre Energy to purchase our 50% interest in the Decker mine and assume all reclamation liabilities. The agreements will also provide for the joint resolution and dismissal of the pending Decker litigation. The transaction is expected to close in the first half of 2013 and is subject to the satisfaction of various closing conditions, including Ambre's full replacement of our approximate $70.7 million in outstanding reclamation and lease bonds for the Decker mine. The consideration for the Decker interests includes a cash component of A$57 million, if paid by Ambre by March 31, 2013. Alternatively, Ambre will issue a promissory note to us for A$64 million payable at a later date. Upon completion of the transaction, Ambre will also grant us an option for up to 5 million tonnes per year of its throughput capacity at the proposed new Millennium Bulk Terminals coal export facility, which is owned 62% by Ambre and 38% by Arch Coal and is currently in the permitting phase. Our throughput capacity would have an initial term of 10 years, with four renewal options for five-year renewal terms. If the transaction is completed, the deconsolidation of the Decker accounts from our consolidated balance sheet will not have a material impact on our assets and liabilities, except for the release of the related ARO liability, which was $74.4 million at December 31, 2012. For purposes of this report, the term "Northern PRB" refers to the area within the PRB that lies within Montana and the northern part of Sheridan County, Wyoming. Our Spring Creek mine, the Decker mine, the Youngs Creek project and the potential Crow project are located in the Northern PRB. History CPE Inc. acquired approximately 51% and the managing member interest in CPE Resources in exchange for a promissory note which was repaid with proceeds from its initial public offering of its common stock ("IPO") on November 19, 2009. Rio Tinto retained ownership of the remaining 49% until December 15, 2010, when CPE Inc. priced a secondary offering of its common stock on behalf of Rio Tinto. In connection with the secondary offering, CPE Inc. exchanged shares of common stock for the 49% common membership units of CPE Resources held by Rio Tinto and completed the secondary offering on behalf of Rio Tinto (the "Secondary Offering"), resulting in our acquisition of 100% of Rio Tinto's holdings in CPE Resources. As a result of this transaction, CPE Resources became a wholly-owned subsidiary of CPE Inc., and Rio Tinto no longer holds an interest in CPE Resources.

Organization and Business

12 Months Ended

Dec. 31, 2012

1. Organization and Business

CPE Inc. is one of the largest producers of coal in the U.S. and the PRB, based on our 2012 coal sales. We operate some of the safest mines in the coal industry. According to MSHA data, in 2012, we had one of the lowest employee all injury incident rates among the largest U.S. coal producing companies.

We currently operate solely in the PRB, the lowest cost region of the major coal producing regions in the U.S, where we operate three wholly-owned surface coal mines, the Antelope mine, the Cordero Rojo mine and the Spring Creek mine, and own a 50% non-operating interest in a fourth surface mine, the Decker mine. We also have two major development projects, the Youngs Creek project and the potential Crow project. We continue to seek ways to increase our future export capacity through existing and proposed new Pacific Northwest export terminals, including our option agreement with SSA Marine and potential option at the Millennium terminal that would be granted upon closing our Decker transaction with Ambre Energy.

Our Antelope and Cordero Rojo mines are located in Wyoming and are two of the four largest coal mines in the U.S. Our Spring Creek mine is located in Montana, and is the largest U.S. exporter of thermal coal into South Korea. Our mines produce subbituminous thermal coal with low sulfur content, and we sell our coal primarily to domestic and foreign electric utilities. We do not produce any metallurgical coal. Thermal coal is primarily consumed by electric utilities and industrial consumers as fuel for electricity generation and steam output. In 2012, the coal we produced generated approximately 4% of the electricity produced in the U.S. As of December 31, 2012, we controlled approximately 1.3 billion tons of proven and probable reserves. For information regarding our revenue and long-lived assets by geographic area, as well as revenue from external customers, Adjusted EBITDA and total assets by segment, please see Note 20 of Notes to Consolidated Financial Statements in Item 8.

During 2012, we acquired rights to substantial undeveloped coal and complementary surface assets in the Northern PRB ("Youngs Creek project"). In January 2013, we executed an option to lease agreement ("Option Agreement") and a corresponding exploration agreement ("Exploration Agreement") with the Crow Tribe of Indians, which are subject to approval by the Department of the Interior. This potential coal project (the "Crow project") is located on the Crow Indian Reservation in southeast Montana, near our Spring Creek mine and Youngs Creek project. We are in the process of evaluating the development options for the Youngs Creek project and the potential Crow project, but believe that their proximity to the Spring Creek mine represents an opportunity to optimize our mine developments in the Northern PRB.

On December 5, 2012, we and the other 50% owner in the Decker mine, Ambre Energy, announced that we entered into agreements for Ambre Energy to purchase our 50% interest in the Decker mine and assume all reclamation liabilities. The agreements will also provide for the joint resolution and dismissal of the pending Decker litigation. The transaction is expected to close in the first half of 2013 and is subject to the satisfaction of various closing conditions, including Ambre's full replacement of our approximate $70.7 million in outstanding reclamation and lease bonds for the Decker mine. The consideration for the Decker interests includes a cash component of A$57 million, if paid by Ambre by March 31, 2013. Alternatively, Ambre will issue a promissory note to us for A$64 million payable at a later date. Upon completion of the transaction, Ambre will also grant us an option for up to 5 million tonnes per year of its throughput capacity at the proposed new Millennium Bulk Terminals coal export facility, which is owned 62% by Ambre and 38% by Arch Coal and is currently in the permitting phase. Our throughput capacity would have an initial term of 10 years, with four renewal options for five-year renewal terms. If the transaction is completed, the deconsolidation of the Decker accounts from our consolidated balance sheet will not have a material impact on our assets and liabilities, except for the release of the related ARO liability, which was $74.4 million at December 31, 2012.

For purposes of this report, the term "Northern PRB" refers to the area within the PRB that lies within Montana and the northern part of Sheridan County, Wyoming. Our Spring Creek mine, the Decker mine, the Youngs Creek project and the potential Crow project are located in the Northern PRB.

History

CPE Inc. acquired approximately 51% and the managing member interest in CPE Resources in exchange for a promissory note which was repaid with proceeds from its initial public offering of its common stock ("IPO") on November 19, 2009. Rio Tinto retained ownership of the remaining 49% until December 15, 2010, when CPE Inc. priced a secondary offering of its common stock on behalf of Rio Tinto. In connection with the secondary offering, CPE Inc. exchanged shares of common stock for the 49% common membership units of CPE Resources held by Rio Tinto and completed the secondary offering on behalf of Rio Tinto (the "Secondary Offering"), resulting in our acquisition of 100% of Rio Tinto's holdings in CPE Resources. As a result of this transaction, CPE Resources became a wholly-owned subsidiary of CPE Inc., and Rio Tinto no longer holds an interest in CPE Resources.