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Peabody's Debt Exchange Produces Very little Financial Benefit and Its <br />Collateral Claims are Based on Overly Optimistic value Assumptions <br />After the transaction, Peabody will still not be able to cover the cost of operations and the <br />new debt load. Simply stated: the company declared losses of $768 million in 2015 (minus <br />losses from impairments). The 2015 interest payment was $465 million. An estimated $47 million <br />in interest payment leaves the company on an enterprise level with operating losses offer <br />interest payments of approximately $600 million (see Table 1). <br />Put another way, Peabody's 2015 interest payments of $465 million constituted 8.27% of the <br />company's enterprise -wide revenues. Using 2015 data, this number increases slightly after the <br />debt swap, with the company still paying 8.5% of revenues for interest (assuming the four mines <br />are no longer considered part of Peabody's enterprise -wide balance sheet). This analysis is <br />based on an assumption about the accounting treatment of the new vehicle used by <br />Peabody and the strength of the protections offered in the debt exchange documents. <br />Peabody's Financial Profile of the Four Mines Ignores the Downward <br />Spiral of Coal Prices <br />Peabody's financial disclosures on the mines present a partial and overly optimistic picture of <br />the financial condition of these mines. First, the disclosure is based only on historical data for <br />the last five years. The company is requesting that investors consider these mines as solvent <br />operations going forward. However, Peabody offers no indication of any of its forward-looking <br />assumptions regarding these mines, particularly the price of coal. <br />Table 6: Energy Adjusted Comparison: Peabody ILB Mines vs. ILB Spot Prices 2011-2016 <br />ILB 11000 —Wild Boar 11000 <br />—Francisco 11500 Gateway 11000 <br />3 <br />3 2 r <br />.a <br />E <br />E <br />V), 1v <br />0 <br />11 -Feb 12 -Feb 13 -Feb 14 -Feb 15 -Feb 16 -Feb <br />Peabody's Strategies for Survival Ignore Market Realities and Risk Backfiring <br />12 <br />