2016-02-22_ENFORCEMENT - C1982057

Home Browse Search

Table of Contents PEABODY ENERGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Financial Instruments with Off -Balance Sheet Risk As of December 31, 2014, the Company had the following financial instruments with off -balance -sheet risk: Workers' Reclamation Coal Lease Compensation Obligations Obligations Obligations Other(l) Total (Dollars in millions) Self bonding $ 1,361.4 $ — $ — $ — $ 1,361.4 Surety bonds 325.2 103.8 92.3 11.4 532.7 Bank guarantees 319.8 — — 117.4 437.2 Letters of credit 17.6 — 34.1 100.9 152.6 $ 2,024.0 $ 103.8 $ 126.4 $ 229.7 $ 2,483.9 (1) Other includes the $79.7 million in letters of credit related to Dominion Terminal Associates and the PBGC, as described below, and an additional $150.0 million in bank guarantees, letters of credit and surety bonds related to road maintenance, performance guarantees and other operations. The Company owns a 37.5% interest in Dominion Terminal Associates, a partnership that operates a coal export terminal in Newport News, Virginia under a 30 -year lease that permits the partnership to purchase the terminal at the end of the lease term for a nominal amount. The partners have severally (but not jointly) agreed to make payments under various agreements which in the aggregate provide the partnership with sufficient funds to pay rents and to cover the principal and interest payments on the floating-rate industrial revenue bonds issued by the Peninsula Ports Authority, and which are supported by letters of credit from a commercial bank. As of December 31, 2014, the Company's maximum reimbursement obligation to the commercial bank was in turn supported by four letters of credit totaling $42.7 million. The Company is party to an agreement with the PBGC and TXU Europe Limited, an affiliate of the Company's former parent corporation, under which the Company is required to make special contributions to two of the Company's defined benefit pension plans and to maintain a $37.0 million letter of credit in favor of the PBGC. If the Company or the PBGC gives notice of an intent to terminate one or more of the covered pension plans in which liabilities are not fully funded, or if the Company fails to maintain the letter of credit, the PBGC may draw down on the letter of credit and use the proceeds to satisfy liabilities under the Employee Retirement Income Security Act of 1974, as amended. The PBGC, however, is required to first apply amounts received from a $110.0 million guarantee in place from TXU Europe Limited in favor of the PBGC before it draws on the Company's letter of credit. On November 19, 2002, TXU Europe Limited was placed under the administration process in the U.K. (a process similar to bankruptcy proceedings in the U.S.) and continues under this process as of December 31, 2014. As a result of these proceedings, TXU Europe Limited may be liquidated or otherwise reorganized in such a way as to relieve it of its obligations under its guarantee. As of December 31, 2014, the Company's wholly-owned captive insurance subsidiary was party to a letter of credit arrangement for $22.7 million in relation to certain of its workers' compensation and other insurance -related obligations whereby that subsidiary has pledged $32.6 million of its investments in debt securities as collateral. This arrangement reduces the letters of credit drawn on the Company's 2013 Credit Facility and effectively lowers the fees associated with the related letters of credit. Patriot Bankruptcy Reorganization Refer to Note 25. "Matters Related to the Bankruptcy Reorganization of Patriot Coal Corporation" for a discussion of certain credit support provided to Patriot as part of the settlement agreement related to its emergence from bankruptcy, which support included $81.4 million of surety bonds and $22.4 million of letters of credit included in the table above, in addition to $18.4 million of corporate guarantees to Patriot beneficiaries as of December 31, 2014. Peabody Energy Corporation 2014 Form 10-K F- 64 Source: PEABODY ENERGY CORP. 10-K, February 25, 2015 Powered by Morningstar" Document Research=' The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.