Debt and Financing Arrangements



	Successor		Predecessor
	December 31, 2016		December 31, 2015
(In thousands)
Term loan due 2021 ($325.7 million face value)	$	325,684	$	—
Term loan due 2018 ($1.9 billion and $1.93 billion face value, respectively)	—		1,875,429
7.00% senior notes due 2019 at par	—		1,000,000
8.00% senior secured notes due 2019 at par	—		350,000
9.875% senior notes ($375.0 million face value) due 2019	—		365,600
7.25% senior notes due 2020 at par	—		500,000
7.25% senior notes due 2021 at par	—		1,000,000
Other	37,195		47,134
Debt issuance costs	—		(64,857		)
	362,879		5,073,306
Less current maturities of debt	11,038		5,042,353
Long-term debt	$	351,841	$	30,953

Successor Company Debt

New First Lien Debt Facility

Borrowings under the New First Lien Debt Facility bear interest at a per annum rate equal to, at the option of Arch Coal, either (i) a London interbank offered rate plus an applicable margin of 9%, subject to a 1% LIBOR floor (the “LIBOR Rate”), or (ii) a base rate plus an applicable margin of 8%. Interest payments will be payable in cash, unless Arch Coal’s liquidity (as defined therein) after giving effect to the applicable interest payment would not exceed $300 million, in which case interest may be payable in kind (any such interest that is paid in kind, the “PIK Interest”). The term loans provided under the New First Lien Debt Facility (the “Term Loans”) are subject to quarterly principal amortization payments in an amount equal $816,250. To the extent any interest is paid as PIK Interest on any interest payment date, the amount of the Term Loans in respect of which such PIK Interest is payable will be deemed to have accrued additional interest over the preceding interest period at 1.00%, which additional interest will be capitalized and added to the principal amount of outstanding Term Loans. The New First Lien Debt Facility is guaranteed by all existing and future wholly owned domestic subsidiaries of Arch Coal (collectively, the “Subsidiary Guarantors” and, together with Arch Coal, the “Exit Loan Parties”), subject to customary exceptions, and is secured by first priority security interests on substantially all assets of the Exit Loan Parties, including 100% of the voting equity interests of directly owned domestic subsidiaries and 65% of the voting equity interests of directly owned foreign subsidiaries, subject to customary exceptions. Arch Coal has the right to prepay Term Loans at any time and from time to time in whole or in part without premium or penalty, upon written notice, except that any prepayment of Term Loans that bear interest at the LIBOR Rate other than at the end of the applicable interest periods therefor shall be made with reimbursement for any funding losses and redeployment costs of the Lenders resulting therefrom. The New First Lien Debt Facility is subject to certain usual and customary mandatory prepayment events, including 100% of net cash proceeds of (i) debt issuances (other than debt permitted to be incurred under the terms of the New First Lien Debt Facility) and (ii) non-ordinary course asset sales or dispositions, subject to customary thresholds, exceptions and reinvestment rights. The New First Lien Debt Facility contains customary affirmative covenants and representations. The New First Lien Debt Facility also contains customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) indebtedness, (ii) liens and guaranties, (iii) liquidations, mergers, consolidations, acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) changes in organizational documents, (xiii) transactions with respect to bonding subsidiaries and (xiv) hedging transactions. The New First Lien Debt Facility does not contain any financial maintenance covenant. The New First Lien Debt Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross-events of default to indebtedness of at least $35 million, (v) cross-events of default to surety, reclamation or similar bonds securing obligations with an aggregate face amount of at least $50 million, (vi) uninsured judgments in excess of $35 million, (vii) any loan document shall cease to be a legal, valid and binding agreement, (viii) uninsured losses or proceedings against assets with a value in excess of $35 million, (ix) ERISA events, (x) a change of control or (xi) bankruptcy or insolvency proceedings relating to Arch Coal or any material subsidiary of Arch Coal. The New First Lien Debt Facility will mature on the date that is five years after the Effective Date.

Securitization Facility

On the Effective Date, Arch Coal extended and amended its existing $200 million trade accounts receivable securitization facility provided to Arch Receivable Company, LLC, a non-Debtor special-purpose entity that is a wholly owned subsidiary of Arch Coal (“Arch Receivable”) (the “Extended Securitization Facility”), which continues to support the issuance of letters of credit and reinstates Arch Receivable’s ability to request cash advances, as existed prior to the filing of the voluntary petitions for relief under the Bankruptcy Code. Pursuant to the Extended Securitization Facility, the Debtors agreed to a revised schedule of fees payable to the administrator and the providers of the Extended Securitization Facility. The Extended Securitization Facility will terminate at the earliest of (i) three years from the Effective Date, (ii) if the Liquidity (defined in the Extended

Securitization Facility and consistent with the definition in the New First Lien Debt Facility) is less than $175 million for a period of 60 consecutive days, the date that is the 364th day after the first day of such 60 consecutive day period and (iii) the occurrence of certain predefined events substantially consistent with the existing transaction documents. Under the Extended Securitization Facility, Arch Receivable and certain of the Reorganized Debtors (as defined above) party to the Extended Securitization Facility have granted to the administrator of the Extended Securitization Facility a first priority security interest in eligible trade accounts receivable generated by such Debtors from the sale of coal and all proceeds thereof. As of December 31, 2016, letters of credit totaling $154.4 million were outstanding under the Extended Securitization Facility and the borrowing base was $83.4 million. As a result, cash collateral of $71.0 million has been placed in the Extended Securitization Facility at December 31, 2016 and there is no availability for borrowings.

Predecessor Company Debt

The following debt instruments were fully discharged by the Bankruptcy Court:

•7.00% Senior Notes due 2019;

•7.25% Senior Notes due 2020;

•7.25% Senior Notes due 2021;

•9.875% Senior Notes due 2019;

•8.00% Second Lien Notes due 2019;

•Term loan due 2018;

For additional information see Note 3, “Emergence from Bankruptcy and Fresh Start Accounting.”

Debt Maturities

The contractual maturities of debt as of December 31, 2016 are as follows:



Year	(In thousands)
2017	$	11,038
2018	10,324
2019	11,479
2020	11,761
2021	317,987
Thereafter	290
	$	362,879

Financing Costs

The Company paid financing costs of $23.0 million during the period January 1 through October 1, 2016; and zero and $4.5 million during the years ended December 31, 2015 and 2014, respectively, in conjunction with its financing activities.

The Company incurred $2.2 million of legal fees and financial advisory fees associated with debt restructuring activities in during the period January 1 through October 1, 2016. Additionally, the Company incurred $24.2 million of legal fees and financial advisory fees associated with debt restructuring activities during 2015. 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. All amounts have been reflected in the line, “Net loss resulting from early retirement and refinancing of debt” in the Consolidated Statement of Operations.