Page 79 - 2019 Annual Report

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
At December 31, 2019, the Company had $21.0 million in cash and short-term investments that are considered cash
equivalents. The Company manages its cash and cash equivalents to ensure short-term operating cash needs are met and
excess funds are managed efficiently. The Company subsidizes shortages in operating cash through credit facilities. The
Company utilizes excess cash to either pay-down credit facility borrowings or invest in money market funds, money market
demand deposit accounts or offshore time deposit accounts. Money market demand deposits and offshore time deposit
accounts are exposed to bank solvency risk. Money market demand deposit accounts are FDIC insured up to $250,000. The
Company’s investments in bank funds generally exceed the $250,000 FDIC insurance limit.

Cash on hand, along with the Company’s projected internal cash flows and availability of financing resources, including its
access to debt and equity capital markets, is expected to continue to be sufficient to provide the capital resources necessary
to support anticipated operating needs, cover debt service requirements, meet capital expenditures and discretionary
investment needs, fund certain acquisition opportunities that may arise and allow for payment of dividends for the
foreseeable future. Borrowings under the Revolving Facility are unsecured and may be used for general corporate purposes.
The Company’s ability to borrow or issue securities is dependent upon, among other things, prevailing economic, financial
and market conditions. At December 31, 2019, the Company had $757.7 million of unused borrowing capacity under its
Revolving Facility and Trade Receivable Facility.

The Company may be required to obtain additional financing in order to fund certain strategic acquisitions or to refinance
outstanding debt. Any strategic acquisition of size would likely require an appropriate balance of newly-issued equity with
debt in order to maintain a composite investment-grade credit rating. Furthermore, the Company is exposed to credit
markets through the interest cost related to its variable-rate debt, which includes the Floating Rate Senior Notes due in 2020
and borrowings under its Revolving Facility and Trade Receivable Facility.

Contractual and Off Balance Sheet Obligations
Postretirement medical benefits will be paid from the Company’s assets. The obligation, if any, for retiree medical payments
is subject to the terms of the plan. At December 31, 2019, the Company’s recorded benefit obligation related to these
benefits totaled $13.0 million.
The Company has other retirement benefits related to pension plans. At December 31, 2019, the qualified pension plans
were underfunded by $3.4 million. The Company estimates that it will make contributions of $50.0 million to qualified
pension plans in 2020. Any contributions beyond 2020 are currently undeterminable and will depend on the investment
return on the related pension assets. However, management’s practice is to fund at least the service cost annually. At
December 31, 2019, the Company had a total obligation of $106.4 million related to unfunded nonqualified pension plans
and expects to make contributions of $10.2 million to these plans in 2020.
At December 31, 2019, the Company had $27.2 million accrued for uncertain tax positions, including interest and correlative
effects of $1.7 million. Such liabilities may become payable if the tax positions are not sustained upon examination by a
taxing authority.
In connection with normal, ongoing operations, the Company enters into market-rate leases for property, plant and
equipment and royalty commitments principally associated with leased land and mineral reserves. Additionally, the Company
enters into equipment rentals to meet shorter-term, nonrecurring and intermittent needs. Effective January 1, 2019, the
Company adopted Accounting Standards Codification 842 – Leases (ASC 842), which requires virtually all leases, excluding
mineral interest leases, to be recorded on the consolidated balance sheet (see Note A – New Accounting Pronouncements to
the audited consolidated financial statements). At December 31, 2019, the Company had $486.6 million in operating lease
obligations and $8.7 million in finance lease obligations. Management anticipates that, in the ordinary course of business, the
Company will enter into additional royalty agreements for land and mineral reserves during 2020. As permitted, short-term
leases are excluded from ASC 842 requirements and future noncancelable obligations for these leases as of December 31,
2019 are not immaterial.
The Company has purchase commitments for property, plant and equipment of $93.4 million as of December 31, 2019. The
Company also has other purchase obligations related to energy and service contracts which totaled $82.9 million as of
December 31, 2019.

Celebrating 25 Years as a Public Company Annual Report ♦ Page 77