Laserfiche WebLink
Mr. Howard Strand <br />Page 3 <br />April 20, 2018 <br />Transmission Association (see Attachment A — Ownership Information and Attachment B — <br />Representative Tri-State Bond Document-Colowyo Coal Company, LP). Tri -State's designation <br />as a parent corporatate guarantor for the three Tri-State mines included in the Complaint is <br />consistent with the Rules. <br />Division's Analysis of Tri -State's Financial Data <br />Tri -State's' financial data for the end of year 2017 (EY17) is provided in Attachment C. <br />Additionally, the Division's analysis of the EY17 financial data is provided in Attachment D. <br />The balance sheet lists assets of approximately $4.9 billion and liabilities of approximately $3.75 <br />billion, giving a tangible net worth of approximately $1.1 billion. EY17 shows current assets of <br />approximately $0.43 billion and current liabilities of approximately $0.44 billion. Tri-State <br />provided a line item stating that their fixed assets (property, plant and equipment less the book <br />value of land and coal in place) in the United States are approximately $3.7 billion. <br />Rule 3.02.4(2)(e)(i)(C)(I) through (III) details self -bonding financial criteria based on the balance <br />sheet(s) provided by Tri-State. Pursuant to Rule 3.02.4(e)(i)(C) only one of the three financial <br />criterion must be met for Tri-State to be eligible for self -bonding. A failure to meet two of the <br />three criterion does not negate a company's elgibility to self -bond its operations. <br />Rule 3.02.4(2)(e)(i)(C)(I) requires a most recent bond issuance rating of "A" from either Moody's <br />or Standard and Poor's (S&P). Tri-State maintains a rating of "A" on all long term bonds and <br />commercial paper with ,Standard and Poor's based on S&P's most recent pronouncement dated <br />September 11, 2017 (See, Attachment E). The three mines are, therefore, in compliance with the <br />requirements of Rule 3.02.4(2)(e)(i)(C)(I). Since an operator is only required to meet one of the <br />financial tests in Rule 3.02.4(2)(e)(i)(C), Tri-State uses their bond issuance rating to meet this <br />requirement. <br />In addition to meeting at least one of the three financial criterion in Rule 3.02.4(2)(e)(i)(C), Rule <br />3.02.4(2)(e)(iv) requires that the total amount of outstanding and proposed self -bonds for an <br />applicant not exceed 25% of the guarantor's tangible net worth in the United States. Based upon <br />Tri -State's EY17 balance sheet they have a tangible net worth of approximately $1.1 billion and a <br />total self -bond obligation of approximately $121 million (including the Dry Fork Mine in <br />Wyoming). This gives Tri-State a percentage of self bonds to tangible net worth of <br />approximately 11%, which is below the allowed limit of 25%. Based upon Tri -State's EY17 <br />balance sheet, it meets the Rule 3.02.4(2)(e)(iv) requirements. <br />Based upon Tri -State's EYl7 balance sheet and its September 11, 2017 S&P Rating, it met at <br />least one of the three financial criterion pursuant to Rule 3.02.4(2)(e)(i)(C), and their total self - <br />bonding liability does not exceed 25% of its tangible net worth pursuant to Rule 3.02.4(2)(e)(iv). <br />Based upon all the available financial data for Tri-State, it remains eligible for self -bonding. The <br />