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• Peabody's total liabilities to net worth ratio is greater than 2.5, rendering them
<br />ineligible for self -bonding under 30 C.F.R. § 800.23(b)(3)(ii) and (iii). According
<br />to Peabody's most recent Form 10-K filed with the U.S. Securities and Exchange
<br />Commission, the company's total liabilities were reported to be $10,464,600,000
<br />and the company's net worth, as indicated by stockholders' equity, was reported
<br />to be $2,726,500,000, yielding a liabilities to net worth ratio of 3.84.3
<br />Furthermore, as of the third quarter of 2015, the company's total liabilities were
<br />reported to be $10,353,000,000 and net worth was reported to be $1,310,400,000,
<br />yielding a liabilities to net worth ratio of 7.90.4
<br />Dec. 31, 2014 Sept. 30, 2015
<br />Total Liabilities $10,464,600,000 $10,350,000,000
<br />Net Worth $2,726,500,000 $1,310,400,000
<br />Liabilities to Net Worth Ratio 3.84 7.90
<br />• The company's total amount of outstanding self -bonds exceed 25% of their
<br />tangible net worth in the U.S., rendering them ineligible for self -binding under 30
<br />C.F.R. § 800.23(d). According to Peabody's most recent Form 10-K, as of the end
<br />of 2014, Peabody's total amount of self -bonding amounted to $1,361,400,000.5
<br />This is more than 100% of the company's current net worth, as indicated by
<br />stockholders' equity. Furthermore, even though there is a chance that Peabody
<br />may sell its Colorado and New Mexico assets, such a sale would, according to
<br />reports, eliminate only $300 million in self -bonding obligations.6 This would
<br />eliminate only a small amount of total reclamation liability and still place the
<br />company's total liabilities to net worth ratio far above 2.5.
<br />In spite of this, Peabody has generally asserted that it still is allowed to self -bond for its
<br />mining operations. The reason is because the guarantor of its self -bond is Peabody Investments
<br />Corporation, a subsidiary of Peabody Energy, which the company claims does meet the
<br />requirements for self -bonding. Although there is a complete lack of transparency to verify this
<br />http•//www streetinsider com/Credit+Ratings,/UPDATE%3A+S'/o26P+Downerades+Peabod +y Energy+( BTU)+to+B
<br />B-%3B+Outlook+to+Stable/'l 0725 752.html.
<br />3 Peabody Energy, "2014 10-K," available at
<br />littp://app.quotemedia.com/data/downloadFiliny?webmasterld=101533&ref=10101273&type=HTML&symbol=BT
<br />U&companyName=Peabod +y Ener,y+Corp &formType=10-K&dateFiled=2015-02-25. Excerpts attached as
<br />Exhibit 1.
<br />4 Peabody Energy, "Peabody Announces Results for the Quarter Ended September 30, 2015," website available at
<br />http•//peabodyenergy investorroom com/2015-10-27-Peabody-Enerev-Announces-Results-For-The-Quarter-Ended-
<br />September-30-2015?printable. Attached as Exhibit 2.
<br />5 Supra. Note 3.
<br />6 PR Newswire, "Peabody Enters into Agreement to Sell New Mexico and Colorado Assets," website available at
<br />http•//www prnewswire.cgm/news-releases/peabody-energy-enters-into-agreement-to-sell-new-mexico-and-
<br />colorado-assets-300182 846.htm 1.
<br />3
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