Debt and Financing Arrangements



	December 31,
	2015		2014
	(In thousands)
Term loan due 2018 ($1.9 billion and $1.93 billion face value, respectively)	$	1,875,429	$	1,890,846
7.00% senior notes due 2019 at par	1,000,000		1,000,000
8.00% senior secured notes due 2019 at par	350,000		350,000
9.875% senior notes ($375.0 million face value) due 2019	365,600		363,493
7.25% senior notes due 2020 at par	500,000		500,000
7.25% senior notes due 2021 at par	1,000,000		1,000,000
Other	47,134		56,031
	5,138,163		5,160,370
Less current maturities of debt	5,107,210		36,885
Long-term debt	$	30,953	$	5,123,485

Acceleration of Debt Obligations; Automatic Stay

The filing of the Bankruptcy Petitions constituted an event of default that accelerated the Company's obligations under the documents governing each of its 7.00% senior notes due 2019, 9.875% senior notes due 2019, 8.00% senior secured second lien notes due 2019, 7.25% senior notes due 2020, 7.25% senior notes due 2021 (together, the “senior notes”) and senior secured first lien term loan due 2018. Immediately after filing the Bankruptcy Petitions, the Company began notifying all known current or potential creditors of the Debtors of the bankruptcy filings.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Bankruptcy Petitions automatically stayed most actions against the Debtors, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Debtors’ property. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors’ Chapter 11 Cases also automatically stayed the continuation of most legal proceedings, including the third party litigation matters described under Item 3, “Legal Proceedings,” or the filing of other actions against or on behalf of the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Debtors’ bankruptcy estates, unless and until the Court modifies or lifts the automatic stay as to any such claim. Notwithstanding the general application of the automatic stay described above, governmental authorities may determine to continue actions brought under their police and regulatory powers

Credit Facilities

As of September 30, 2015, availability under the Company's revolver was subject to limits on secured debt in its senior note indentures. At September 30, 2015, the limit under the most restrictive indenture did not provide meaningful availability under the revolver and, as a result, on November 6, 2015 the Company delivered an irrevocable 5 day notice to the administrative agent to voluntarily terminate all commitments thereunder, which terminated on November 11, 2015. The Company had no borrowings outstanding under the revolving credit facility at September 30, 2015 and had not been using it as a source of liquidity in the recent past.

The Company is also party to an accounts receivable securitization program under which eligible trade receivables are sold, without recourse, to a multi‑seller, asset‑backed commercial paper conduit. The entity through which these receivables are sold is consolidated into the Company's financial statements. The Company may borrow and draw letters of credit against the facility, and pays facility fees, program fees and letter of credit fees (based on amounts of outstanding letters of credit). The total aggregate borrowings and letters of credit are limited by eligible accounts receivable, as defined under the terms of the credit facility agreement. The credit agreement expires on December 8, 2017.

At December 31, 2015, the Company had no available borrowing capacity under its lines of credit.

Term Loan

On May 16, 2012, the Company borrowed $1.4 billion under a secured term loan facility, issued at a 1% discount. The proceeds from the term loan were used to retire all outstanding borrowings under the revolving credit facility and the outstanding $450.0 million principal amount of 6.75% Senior Notes due 2013 issued by Arch Western Finance, LLC, the Company’s indirect subsidiary. On November 21, 2012, the Company borrowed an incremental $250.0 million on the term loan facility at a 1% discount at the same rate as the initial borrowing. On December 17, 2013 the credit facility amendment increased the maximum amount of term loans allowed under the facility, and the Company borrowed an incremental $300.0 million aggregate principal amount at 98% of the face amount.

The term loan contains no financial maintenance covenants, is prepayable, and is secured by substantially all of the Company's assets. Quarterly principal payments of $3.5 million began in September 2012, increased to $4.125 million per quarter as a result of the incremental borrowing in November, 2012, and increased further to $4.875 million with the December 17, 2013 borrowing. A balloon payment of $1.8 billion is due in May, 2018. Interest is payable at a rate that is equal to a base of the greater of a LIBOR-based rate and 1.25%, plus 500 basis points.

2019 9.875% Notes

On November 21, 2012, the Company issued $375.0 million aggregate principal amount of 9.875% senior unsecured notes due 2019 (the “2019 9.875% Notes”) at an issue price of 95.934% of the face amount. Interest is payable on the 2019 9.875% Notes annually on June 15 and December 15. The Company may redeem some or all of the notes at prices that are reflected as a percentage of the principal amount, as follows: 104.938% commencing December 15, 2016; 102.469% commencing December 15, 2017; and 100% on or after December 15, 2018.

The unsecured senior notes are guaranteed by substantially all of the Company's subsidiaries, except for Arch Receivable Company, LLC, which is the conduit for the accounts receivable securitization program, and the Company's subsidiaries outside the U.S.

2019 Secured Notes

On December 17, 2013, the Company issued $350.0 million aggregate principal amount of 8.00% senior secured second lien notes due 2019 (the “2019 Secured Notes”) at par. The 2019 Secured Notes are secured by the same assets that secure indebtedness under the senior secured term loan, but on a second priority basis, subject to certain exceptions and permitted liens. Interest is payable on the 2019 Secured Notes on January 15 and July 15 of each year. The Company may redeem some or all of the notes at prices that are reflected as a percentage of the principal amount, as follows: 104.0% commencing January 15, 2016, 102.0% commencing January 15, 2017, and 100% on or after January 15, 2018.

2020 Notes

The Company has outstanding $500.0 million in aggregate principal amount of 7.25% senior unsecured notes due in 2020 (“2020 Notes”) at par. Interest is payable on the 2020 Notes on April 1 and October 1 of each year. The Company may redeem some or all of the 2020 Notes during the respective 12 month periods at prices that are reflected as a percentage of the principal amount, as follows: 103.625% commencing October 1, 2015; 102.417% commencing October 1, 2016; 101.208% commencing October 1, 2017; and 100% on or after October 1, 2018.

2019 7% Notes and 2021 Notes

The Company has outstanding $1.0 billion of 7.00% unsecured senior notes due 2019 (“2019 7% Notes”) and $1.0 billion of 7.25% unsecured senior notes due 2021 (“2021 Notes”). Interest is payable on the 2019 7% Notes and 2021 Notes on June 15 and December 15 of each year. The Company may redeem some or all of the 2019 7% Notes at prices that are reflected as a percentage of the principal amount, as follows: 103.5% commencing June 15, 2015; 101.75% commencing June 15, 2016; and 100% on or after June 15, 2017. The Company may redeem some or all of the 2021 Notes at prices that are reflected as a percentage of the principal amount, as follows: 103.625% commencing June 15, 2016; 102.417% commencing June 15, 2017; 101.208% commencing June 15, 2018 and 100% on or after June 15, 2019. In each case, accrued and unpaid interest at the redemption date is due upon redemption.

Other Debt Retirements

On December 17, 2013, the Company retired the outstanding $600 million in aggregate principal amount of 8.75% senior unsecured notes due 2016 (“2016 Notes”) for $628.7 million with the proceeds from the incremental term loan and the 2019 Secured Notes. The Company recorded a $41.0 million loss related to this transaction which is reflected in the line "Net loss resulting from early retirement of debt and debt restructuring" in the Consolidated Statements of Operations.

Debt Maturities

The contractual maturities of debt as of December 31, 2015 are as follows, although $5.1 billion is classified as current

due to the default caused by the Company's bankruptcy filing.



Year
2016	$	35,674
2017	30,484
2018	1,858,567
2019	1,731,317
2020	501,642
Thereafter	1,000,574
	$	5,158,258

Debt Covenants

Terms of the Company's credit facilities and leases contain covenants that limit the ability of the Company to, among other things, acquire, dispose, merge or consolidate assets; incur additional debt; pay dividends and make distributions or repurchase stock; make investments; create liens; issue and sell capital stock of subsidiaries; enter into restrictions affecting the ability of restricted subsidiaries to make distributions, loans or advances to the Company; engage in transactions with affiliates and enter into sale and leaseback transactions. Failure by the Company to comply with such covenants could result in an event of default, which, if not cured or waived, could have a material adverse effect on the Company.

Financing Costs

The Company did not incur any financing costs in 2015 and paid financing costs of $4.5 million and $20.5 million in conjunction with its financing activities during the years ended December 31, 2014 and 2013, respectively.

During the year ended December 31, 2015, the Company wrote off $3.7 million of deferred financing costs related to the termination of the revolver facility. Additionally, the company incurred $24.2 million of legal fees and financial advisory fees associated with debt restructuring activities in 2015. All amounts have been reflected in the line, "Net loss resulting from early retirement and refinancing of debt" in the Consolidated Statement of Operations.