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position of every coal company in the United States and have contributed to 50 coal <br />company bankruptcy filings since 2012. <br />Table 4: Selected Price Trends from CAPP, PRB and Illinois Basin: 2012 <br />CAPP -NYMEX <br />68.001 <br />47.55 <br />1 -30% J 120.00 <br />1 August 2008 <br />PRB 8800 <br />11.95 <br />9.95 <br />-17% 19.00 <br />1 January 2006 <br />ILB 11500 <br />65.451 <br />40.40 <br />-3836 1 90.00 <br />1 Auaust 2008 <br />The principal drivers of these dramatic and now persistent low coal prices are low natural gas <br />prices, renewable energy and regulatory uncertainty. Natural gas prices peaked in June 2008 <br />at $12.69 mmbtu dropping to $2.67/mmbtu by early 2012.15 Since then the price of natural gas <br />has declined further and is currently in the $2/mmbtu ronge.16 The EIA projects natural gas <br />prices rising through 2017 to $3.32/ mmbtu. 17 <br />Coal prices in critical regions across the United States are expected to stay low in the coming <br />years. The EIA's Short Term Energy Outlook through 2017 projects lower coal prices for coal <br />plant operators from 2015 levels.18 Both Platts19 and SNL's forward-looking outlooks20 anticipate <br />modest growth in coal prices across all sectors during this period. SNL is projecting a price of <br />$9.48 per ton for PRB 8800 through 2016.21 These trends are reason to anticipate further <br />downward pressure on Peabody's revenue position. Yet, Peabody Energy estimates in its 40 <br />2015 report that its current PRB pricing is at $13.45 per ton for 2015,22 and they show a small <br />increase in their contract priced coal for 2016. <br />In the international seaborne coal trade, low prices are expected to continue for the <br />foreseeable future. The price of Newcastle coal peaked in July 2011 at $142.00 per ton.23 The <br />current price of Newcastle coal is $52 per metric ton. Over the next seven years the price of <br />seaborne coal is expected to decline further and hit $42.10 in 2022 (see Table 5).24 The <br />seaborne thermal market is currently oversupplied as China and India are making strides to <br />reduce their respective dependence on imported coal. In addition to a weak outlook for the <br />thermal seaborne sector, metallurgical markets are expected to remain weak as most major <br />steel producing and consuming nations curtail demand.2s <br />15 https 11wvwv eia govldnav/ng/hist/rngwhhdm htm , Henry Hub Natural Gas Prices. 1998-2016. <br />1e Some private analysts see the $2 mmbtu price through 2018. Tom Palicki, Lack of demand may keep natural gas prices <br />near $2mmbtu until 2018, SNL February 10, 2016. <br />17 http:/hvww.eia,gov/forecasts/stea/report/natgas.cfm <br />18 http 11www eia gov/forecasts/steo/query/ Custom Table Builder/U.S. Coal/Cost of Coal Delivered to Electric Generating <br />Plants, 2012-2017. <br />19 Platts Coal Trader, Platts Daily OTC Assessments, February 2, 2016 <br />20 SNL, SNL Coal Price Forecast. All Regions, February 6, 2016. This is a propnetary database. Information available upon <br />request. <br />21 SNL, SNL Coal Price Forecast, Powder River Basin, PRB 8800, February 6, 2016 This is a proprietary database. <br />Information available upon request. <br />22 Form 8K-2016 Year End <br />23 http:/twww,indexmundi.com/commodities/?commodity=coal-australian&months=60 <br />24 http://www.barchart.com/commoddyfuturesdiCE NewCastle Coal_Futures/LO <br />25 httpl/www rba gov au/publications/builebn/2015fjun/pdf/bu-0615-3 pdf <br />Peabody's Strategies for Survival Ignore Market Realities and Risk Backfiring <br />