2016-02-29_ENFORCEMENT - C1982056

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Table 10 : Comparison of Selected Peabody Investment Corporation and Peabody Energy Corporation Asset and liability Accounting from Consolidated Balance Sheets, December 201 t7_ Land and coal interests 7.657 7.657 Buildings and Improvements 1.079 1.079 Machinery 1.699 1.699 Depreciation (3010) (3010) Total Property, Plant & Equip 7426 7426 Liabilities Total Current Liabilities 1441.3 1513.7 Long term debt 97.3 2706.8 Deferred Income 451.1 539.8 Asset Retirement Obligations 501.3 501.3 Accrued postretirement costs 963.9 963.9 Other noncurrent liabilities 437.7 448.3 Total Liabilities 3892.6 6673.8 Stockholder Equity 8620.5 4689.3 The applicant, a subsidiary of PIC, is New Mexico Coal Resources (NMCR). NMCR uses the PIC balance sheet as the basis for demonstrating compliance with SMCRA rules. NMCR's representation is that PIC, as its parent, meets the criteria for eligibility for self -bonding. PIC would therefore possess the assets and liquidity necessary to finance reclamation activities at the cessation of mining if NMCR is unable to pay for it themselves. Program Rules, Weak Self -Bonding Administration by States and Accounting Treatments Obscure PEC's Failure to Meet the Financial Solvency Test for Self -Bonding The use of PIC as the substitute parent for Peabody Energy Corporation allows for an accounting treatment that significantly decreases the Long Term debt liability for PIC and increases the stockholder equity accounting when compared to Peabody Energy Corporation. PIC is also allowed under this accounting treatment to claim as part of its B7 Ernst and Young, Consolidated Financial Statements, Peabody Investments Corporation and Subsidiaries Year Ended December 31, 2010, p 2. 64http.1/www.peabodyener-gy.com/content/162/sec-filings, Form 10K, February 28, 2011, Consolidated Balance Sheets p. F- 3. Peabodys Strategies for Survival Ignore Market Realities and Risk Backfiring 17