Peabody Energy Corp 8-K, filed Nov 9, 2020
Peabody Energy Corp (BTU)
About this 8-K
Peabody Energy Corp filed this 8-K on November 9, 2020.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 2.02 | Results of Operations and Financial Condition. |
To the extent applicable, the disclosures in Item 7.01 below are incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
Peabody Energy Corporation (the “Company”), an ad hoc committee of holders (the “Noteholders”) of the Company’s 6.000% senior secured notes due 2022 (the “2022 Notes”), and an ad hoc committee of lenders (the “Revolving Lenders”) under the Company’s revolving credit facility (the “Revolving Credit Facility”) entered into confidentiality agreements (as amended, the “Confidentiality Agreements”) and have been engaged in discussions relating to a potential transaction under which the Company is seeking to provide for maturity extensions and covenant relief, while maintaining sufficient operating liquidity and financial flexibility. The material terms of the potential transactions are set forth in the term sheets (the “Term Sheets”) included in the Cleansing Material (as defined below). At this time, no agreement has been reached among the Noteholders, the Revolving Lenders and the Company regarding a potential transaction.
Beginning on or around October 14, 2020, the Company commenced confidential discussions and negotiations under separate Confidentiality Agreements with the Noteholders and the Revolving Lenders. As part of such discussions and negotiations, on October 14, 2020, the Company made presentations to the Noteholders and the Revolving Lenders. On November 1, 2020, the Noteholders and the Revolving Lenders made a joint counterproposal regarding a potential transaction. On the same day, the Company sent a revised proposal to the Noteholders and the Revolving Lenders, and on November 4, 2020, the Noteholders and the Revolving Lenders made another joint counterproposal to the Company regarding a potential transaction. The Company has informed the Noteholders and the Revolving Lenders that the November 4, 2020 joint counterproposal is unacceptable to the Company.
In accordance with the Confidentiality Agreements, the Company is making disclosure herein of certain information (including material non-public information) provided to the Noteholders and the Revolving Lenders, and to their respective financial and legal advisers (the “Cleansing Material”) in connection with the above referenced discussions and negotiations. The Cleansing Material included certain preliminary projections for the Company’s third quarter results, which were subsequently updated. The Company’s final third quarter results will be reported in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 that will be filed on November 9, 2020. The Cleansing Material is attached in Exhibits 99.1, 99.2 and 99.3 hereto and incorporated herein by reference.
The information furnished in this Item 7.01, including Exhibits 99.1, 99.2 and 99.3 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The filing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.
Forward-looking statements.
This Current Report on Form 8-K contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “targets,” “would,” “will,” “should,” “goal,” “could” or “may” or other similar expressions. Forward-looking statements provide management’s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that Peabody expects will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volume, or other financial items, descriptions of management’s plans or objectives for future operations, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect Peabody’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, Peabody disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, (i) Peabody’s ability to effect the transaction described in the Term Sheets, (ii) the availability of alternative transactions, (iii) general market conditions and (iv) a variety of economic, competitive and regulatory factors, many of which are beyond Peabody’s control, including the impact of the COVID-19 outbreak and factors that are described in Peabody’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and other factors that Peabody may describe from time to time in other filings with the SEC. You may get such filings for free at Peabody’s website at www.peabodyenergy.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. |
Description | |
| 99.1 | ||
| 99.2 | ||
| 99.3 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PEABODY ENERGY CORPORATION | ||||||
| November 9, 2020 |
By: | /s/ Scott T. Jarboe | ||||
| Name: | Scott T. Jarboe | |||||
| Title: | Chief Legal Officer | |||||
Discussion Materials October 14, 2020 Exhibit 99.1
Legal Disclaimer Important Information This presentation is strictly confidential and has been prepared by Peabody Energy Corporation (“Peabody” or the “Company”) solely for informational purposes. Recipients of this presentation may not reproduce, disclose or otherwise redistribute, in whole or in part, this presentation or its contents to any other person. In addition, references to this presentation shall be deemed to include any information that has been or may be supplied in writing or orally in connection herewith or in connection with any further inquiries. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of Peabody or any of its subsidiaries. If a transaction follows, it will be made only in reliance on applicable exemptions from the registration requirements under the U.S. Securities Act of 1933. The distribution of this presentation and any offering, purchase or sale of securities that may be issued by Peabody or any of its subsidiaries in certain jurisdictions is restricted by law, and no such offer or solicitation is being made in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. Persons into whose possession this presentation may come are required by the Company to comply with all applicable laws and regulations in effect in any jurisdiction in or from which it invests or receives or possesses this presentation. This presentation also contains non-GAAP financial measures. The Company has provided a reconciliation of such non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. GAAP in the Appendix to this presentation. Note Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are based on management’s beliefs and assumptions and can be identified by the fact that they do not relate strictly to historical or current facts. All statements that reflect information or predictions regarding the operating performance of the Company or its subsidiaries, or other events or other developments that may occur in the future, are forward-looking statements. Such forward-looking statements may include, but are not limited to, actions relating to strategic financing alternatives, liquidity, capital structure, demand for the Company’s products, estimates of sales targets, cost savings, capital expenditures, other expense items, market share, industry volume, other financial items, descriptions of management’s plans or objectives for future operations and descriptions of assumptions underlying any of the above. All forward-looking statements are based on information currently available to management, speak only as of the date they are made and are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements, including the factors that are described in Peabody’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020. Peabody disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law.
Table of Contents Executive Summary Situation Overview Overview of the Wilpinjong Drop-Down Business Update & Financial Forecast Proposed Transaction Appendix
I.Executive Summary
Executive Summary Peabody Energy Corporation (“Peabody” or the “Company”) is seeking to enter into a Transaction Support Agreement (“TSA”) with its Revolving Credit Facility (“RCF”) Lenders, holders of Senior Secured Notes due 2022 (the “2022 Notes”), and sureties that will extend maturity runway, relieve covenant pressure, and stabilize the Company’s liquidity outlook Peabody reported its Q2’20 earnings on August 5, 2020; the quarter was marked by significant challenges and depressed results associated with substantially lower demand both in the U.S. domestic and seaborne markets amidst the COVID-19 pandemic, as well as weak seaborne metallurgical and thermal pricing, among other factors Current projections indicate a slow seaborne market recovery over the next 12 months, with future demand impacted by economic conditions and public policy related to the COVID-19 pandemic in key demand centers The disruption in coal markets exacerbated certain near-term challenges faced by the Company, including (i) tightening financial maintenance covenant headroom on its RCF, (ii) the maturity of $459 million principal amount of 2022 Notes in March 2022, and (iii) liquidity pressure and increasing collateral calls from sureties Sureties have requested hundreds of millions of dollars in additional collateral in 2020 and have the right to request 100% collateralization at any time To facilitate a potential debt-for-debt exchange transaction, the Company designated its Wilpinjong mine and related entities as unrestricted subsidiaries on August 4, 2020 Wilpinjong is a first-quartile seaborne thermal mine (which also makes significant sales to a domestic customer) and is the Company’s most valuable mining complex Peabody projects that the mine will generate substantial free cash flow in the near- and long-term that can be used to support debt service on structurally senior debt issued at the unrestricted subsidiary group Additionally, as part of the broader drop-down transaction, the Company transferred $100 million of cash to the group that was later designated as unrestricted subsidiaries to provide operating liquidity and address Wilpinjong’s capital needs over the next 12 months Against this backdrop, Peabody is seeking to work with its 2022 Noteholders, RCF Lenders and sureties to effectuate a holistic transaction that provides for maturity extensions and covenant relief, while maintaining sufficient operating liquidity for the Company over the long-term
II.Situation Overview
Company Overview ($ and tons in millions) Operating performance Revenue ($mm) Adjusted ebitda ($mm) Peabody is a leading global coal miner, with interests in 18 mining operations across the U.S. and Australia Peabody has 4.1 billion tons of proven and probable coal reserves, with thermal and metallurgical coal accounting for 78% and 22% of total reserves, respectively In 2019, Peabody produced and sold ~165 million tons of coal Thermal coal accounted for roughly 75% of the Company’s revenues and 95% of tons sold, respectively The Company’s operations are divided into 4 key segments: (i) Seaborne Thermal, (ii) Seaborne Metallurgical, (iii) Powder River Basin, and (iv) Other U.S. Thermal (which includes the former Midwest and Western segments) All mines in the United States produce thermal coal, with the exception of Shoal Creek which is a met coal producer (acquired in September 2018) In Australia, thermal and metallurgical coal account for ~58% and ~42% of FY’19 revenue and ~77% and ~23% of FY’19 tons sold, respectively Headquartered in St. Louis, Missouri, the Company had ~5,400 employees as of June 30, 2020 Business Description Operational and Financial Summary Business Mix (FY’19) Tons Sold by Region Revenue by Region 1 Excludes tons sold under the “Corporate & Other” segment.
Portfolio Review Asset Map Reserve Summary in million short tons H:\! GRAPHICS\! MAPS\Map Projects\Griffin Over\2020-07-28\Peabody US Assets.ai, Peabody AUS Assets.ai 1 1 Peabody’s share of production and reserves, and coal quality metrics are presented on a consolidated basis for Wambo Open-Cut and Wambo Underground. ($ and tons in millions)
Capitalization Table ($ in millions) Peabody was levered at ~2.2x Net Debt / LTM Adj. EBITDA (on a book basis) and had ~$860 million of liquidity at the end of Q3’20 During Q3’20, the Company posted $53.2 million in additional letters of credit and a AU$50 million bank guarantee to sureties and other counterparties Source:Bloomberg and Company filings.
Situation Overview and Q2’20 Update Peabody’s second quarter 2020 was marked by challenging seaborne and domestic market conditions that materially weighed on results and exacerbated issues of declining liquidity, increasing leverage, and refinancing risk with stressed securities prices Peabody reported Q2’20 earnings results on August 5, 2020, including revenues of $627 million, net loss attributable to common stockholders of $1.5 billion, and Adjusted EBITDA of $23 million While the Company continued to improve its surface operations and reduce costs per ton—even as volumes dropped—the global economic disruption associated with the COVID-19 pandemic and lower demand in the U.S. domestic market drove revenues and profitability meaningfully down in the quarter Seaborne revenues declined $258 million year-over-year due to lower met volumes and depressed met and thermal coal prices, as the COVID-19 pandemic significantly disrupted seaborne demand U.S. thermal revenues declined $234 million year-over-year due to the closure of Kayenta and persistently low natural gas prices that further pressured and accelerated the decline in domestic coal demand Peabody ended the quarter with $926 million of liquidity, down $263 million from Q1’20 due to (i) negative cash flow from operations and (ii) increased collateral calls from sureties Peabody posted ~$135 million of additional collateral to sureties YTD (~$77 million in Q2’20) and currently has hundreds of millions of dollars in additional outstanding requests from sureties In light of the increasing collateral requests and the continued challenging market environment, Peabody began to evaluate various strategic financing alternatives to address near- and medium-term uncertainty On August 4, 2020, the Company designated the Wilpinjong mine and its related legal entities as unrestricted subsidiaries with the objective of consummating a debt-for-debt exchange, as discussed further herein Additionally, the Company contributed $100 million of cash to the group of entities that was later designated as unrestricted in connection with the drop-down transaction
Summary of Near-Term Challenges The global economic disruption from the COVID-19 pandemic has increased Peabody’s near-term financial challenges, including (i) tightening financial maintenance covenant headroom, (ii) the maturity of $459 million principal amount of Notes in 2022, and (iii) decreasing liquidity and increased pressure on account of collateral calls from sureties RCF Covenant Compliance Peabody is at risk of non-compliance with its 2.0x RCF First Lien Leverage covenant later this year due to the negative impact on EBITDA associated with the COVID-19 pandemic, continued secular pressures on domestic coal pricing and demand, and depressed seaborne pricing, among other factors Maturity Runway The Company faces the maturity of $459 million principal amount of 2022 Notes in March 2022 Additionally, $540 million of RCF Commitments have a springing maturity to September 2021 if the 2022 Notes are not repaid in full at that time Surety Collateral Demands Peabody has received considerable collateral requests from sureties due to increased uncertainty from tightening covenant headroom and approaching maturities, as highlighted by the recent credit rating downgrades by S&P and Moody’s; a perceived failure to address either of the challenges above could lead to accelerated collateral calls which would increase the pressure on liquidity in the near-term The Company has a ~$1.6 billion surety program in place to support the performance of reclamation and certain other obligations Sureties are contractually permitted to request collateral of up to 100% of their exposure at any time Weak Q2 numbers and subsequent credit downgrades have prompted an increased volume of collateral requests as each surety provider individually seeks to de-risk its position through collateral calls At present, hundreds of millions of dollars of collateral requests remain outstanding
III.Overview of the Wilpinjong Drop-Down
“New” Corporate Structure On August 4, 2020, using baskets in the Credit Agreement and Indentures, Peabody designated the Wilpinjong mine and its related legal entities as unrestricted subsidiaries to enhance the Company’s financial flexibility and create a path for a potential debt-for-debt exchange Peabody Energy Corporation Peabody Investments Corp. Peabody Investments (Gibraltar) Limited Peabody Energy (Gibraltar) Limited Peabody Australia Holdco Pty Ltd Peabody International (Gibraltar) Limited Peabody Holland B.V. Peabody Energy Australia Pty Ltd Peabody Energy Finance Pty Ltd Peabody Global Holdings, LLC Peabody International Investments, Inc. Peabody COALSALES Pacific Pty Ltd Peabody MCC (Gibraltar) Limited Peabody Energy Australia Coal Pty Ltd Peabody International Holdings, LLC Peabody Energy Australia PCI Pty Ltd Wilpinjong PIC Acquisition Corp. PIC AU Holdings, LLC PIC AU Holdings Corporation Peabody Australia Mining Pty Ltd New Ausco ~50.1% ~49.9% New Unrestricted Subsidiaries US Corporation US Limited Liability Company US Entity Treated as Tax Partnership Company organized under the laws of Gibraltar Company organized under the laws of Australia Company organized under the laws of the Netherlands Key $100 million of cash
Overview of Wilpinjong ($ in millions) Mine Overview Wilpinjong is a leading thermal coal surface mine with historical and projected stable cash flows and low-cost operations, located in New South Wales, Australia Highly-efficient dozer/casting and truck and shovel operation among the largest coal mines in Australia Represents the majority of the Company’s Australian EBITDA and cash flow Wilpinjong is one of Australia’s lowest-cost coal mining operations, currently positioned in the 1st decile of the Australian thermal coal cost curve Sustainable low-cost structure underpinned by favorable strip ratios Cash costs per ton projected to average low-to-mid-$20s over the next several years The mine produced and sold ~14 million tons of coal in FY’18 and FY’19 and had 104 million tons of proven and probable reserves as of FY’19 The ongoing Wilpinjong Extension Project increases mine life through 2030 Significant extension opportunity beyond 2030, with adjacent coal deposits over which Peabody currently holds surface rights, offers long-term upside potential Wilpinjong supplies both domestic Australian (~58%) and export markets (~42%) Long-term domestic contract covers the supply of ~7 – 8 million tons per annum to certain power stations (projected to decrease to ~5.5 million tons per year from 2023 onwards) Export of ~6 million tons per year through either Newcastle or Port Waratah The entities holding this mining complex were designated as unrestricted subsidiaries under the Credit Agreement and Indenture on August 4, 2020 Operational and Financial Summary Pricing vs. Benchmark Cash Costs ($/st) Capex ($) Tons Sold (Mst) Capex increase associated with the Wilpinjong Extension Project that extends mine life to 2030 Location
Australian Thermal Coal Cost Curve Wilpinjong is a premier seaborne thermal coal mine (with significant domestic sales) currently positioned in the 1st decile of the Australian thermal coal cost curve Australian Thermal Coal Cost Curve — Total Cash (USD/st, includes transportation costs) Wilpinjong 1st Decile 2nd Decile 3rd Decile 4th Decile 5th Decile 6th Decile 7th Decile 8th Decile 9th Decile 10th Decile (tons in millions) Source:Wood Mackenzie.
Wilpinjong — Mining Equipment Type Description Count Major HME CAT 6060 Excavator 1 Liebherr 9400 Excavator 1 Liebherr 9350 Excavator 4 CAT994H Loaders 2 MT4400 Haul Trucks 6 CAT793 Haul Trucks 5 CAT789 Haul Trucks 19 CAT-D11 Dozers (Prim Dozer Push) 12 Atlas Copco (D65) Hammer Drill 2 Atlas Copco Rotary Drill (Pit Viper 235 ) 2 Ancillary Equipment CAT-D11 Dozers (CHPP) 1 CAT-D10 Dozers 1 CAT-24 Grader 4 CAT-16M Grader 2 CAT-14H Grader 6 Haulmax-3900 Service Cart 5 CAT785 Watercarts 19 CAT845G Wheel Dozer 12 Hitachi-1200 Excavator 2 Liebherr 9250 Excavator 2 Komatsu WA600 Loader 1 Komatsu WA500 Loader 1 Haulmax-3900 Float 4 Sliepner Excavator transported 2 Haulmax-3900 Service Cart (parked-up) 6
Wilpinjong — Financial Summary ($ in millions) The tables below summarize Wilpinjong’s pro forma financials over the last four fiscal quarters Financials adjusted pro forma for the management services agreement with Peabody and related costs Pro Forma & Other Adjustments include realized exchange rate gains / losses and costs related to the Wilpinjong management services agreements. Current Liabilities include (i) trade payables, (ii) non-trade payables, (iii) salaries, payroll taxes, long service leave, vacations and other work-related liabilities, (iv) accrued royalties, (v) accrued rail and port charges, and (vi) current portions of ARO liabilities and operating lease obligations, among other items. Reflects GAAP accounting procedures related to differences in book and tax bases of certain assets and liabilities. Includes Asset Retirement Obligations. Includes certain non-current operating lease liabilities. 1 2 3 2 4 5 2
IV.Business Update & Financial Forecast
Global Customer Base Note: The Company attributes revenue to individual regions based on the location of the physical delivery of the coal. Revenue breakdown for FY’19. Peabody serves a broad global customer base and generates nearly half of its revenue from outside of the U.S.
Supply and Demand Dynamics — COVID-19 Impact China net importer of steel for first time in 11 years in June; Heightened import restriction risk weighing on market Slower economic activity in India suppresses coal demand, total coal imports down ~30Mt August YTD Indonesia thermal coal exports down 27Mt July YTD Recent uptick in U.S. natural gas prices could provide more favorable backdrop for coal Australian met exports down 10Mt July YTD consistent with weaker demand due to COVID-19 European demand remains weak following COVID-related shutdowns Total U.S. generation mix down 2% Aug. YTD; coal generation down 24%, while natural gas and subsidized renewables gain share Note: Data as of August 5, 2020.
Key Operating Initiatives The global market uncertainty requires Peabody to further improve its operating performance, ensuring it has a scalable cost structure. Key initiatives include: Progressing cost repositioning program to counter impacts of reduced demand / low pricing Reduced ~25% of workforce over past 18 months Focusing on cash preservation and operational liquidity Capex, SG&A reduced to $200M & $110M Advancing several commercial processes, including options for North Goonyella Exploring and evaluating various strategic financing alternatives to enhance financial flexibility
ESG Approach Commitment to environmental, social and governance (“ESG”) practices underpins activities and shapes long-term strategy, with an ESG approach centered on: Minimizing the environmental footprint of our operations Begin with a deep appreciation and understanding for land and communities where Peabody operates Strive to maximize resource recovery and conserve energy; brings co-benefits of reducing costs and lowering emissions Work to reduce water use and waste and apply recycling programs Progressively restore, monitor and maintain areas disturbed by mining Participation in focused research, projects and partnerships to advance low-emissions technologies Providing substantial benefits to society Peabody products fuel baseload electricity for emerging and developed countries; create steel needed to build foundational infrastructure Committed to safety as a way of life and support UN Sustainable Development Goals and UN Global Compact Seek a workforce comprised of diverse backgrounds, thoughts and experiences Foster inclusive workplace and invest in employees through competitive total rewards and development opportunities Provide significant direct / indirect economic benefits Ensuring strategies/activities serve interests of stakeholders Focus on strong corporate governance practices Management compensation based on safety, FCF per share, Adjusted EBITDA, ROIC, TSR, and environmental performance Apply robust enterprise risk management process at all levels of organization Participate constructively in political process and provide recommendations to policymakers on global energy, environment and economic matters Commit to transparency and disclosures; participate in ongoing communication with key stakeholders 1 2 3
Financial Forecast — RemainCo (Tons and $ in millions) Note:Q3’20 financials include Wilpinjong’s results prior to its designation as an unrestricted subsidiary (July 2020). 2020 PRB pricing and 2020–2024 Midwest pricing reflect weighted-average pricing across all mines/products in the PRB and Midwest (committed and uncommitted). Excludes Middlemount tons sold. Pricing & Production Assumptions Set forth below are summaries of RemainCo’s financial projections through FY’21 and the underlying key assumptions for the forecast Q3’20E projections reflect preliminary results and are subject to change Summary Projections
Financial Forecast — U-Sub ($ in millions) Wilpinjong is projected to generate positive free cash flow through FY’24 and has the ability to support structurally senior debt issued at the unrestricted subsidiary level in an exchange for existing Peabody debt Q3’20E projections reflect preliminary results and are subject to change Projections do not include any debt incurred at Wilpinjong parent company in connection with an exchange transaction Note:Q3’20 financials reflect Wilpinjong’s results after its designation as an unrestricted subsidiary (August and September 2020).
V.Proposed Transaction
Pro Forma Corporate Structure Peabody Energy Corporation Peabody Investments Corp. Peabody Investments (Gibraltar) Limited Peabody Energy (Gibraltar) Limited Peabody Australia Holdco Pty Ltd Peabody International (Gibraltar) Limited Peabody Holland B.V. Peabody Energy Australia Pty Ltd Peabody Energy Finance Pty Ltd Peabody Global Holdings, LLC Peabody International Investments, Inc. Peabody COALSALES Pacific Pty Ltd Peabody MCC (Gibraltar) Limited Peabody Energy Australia Coal Pty Ltd Peabody International Holdings, LLC Peabody Energy Australia PCI Pty Ltd Wilpinjong PIC Acquisition Corp. PIC AU Holdings, LLC PIC AU Holdings Corporation Peabody Australia Mining Pty Ltd New Ausco ~50.1% ~49.9% $175mm New Structurally Senior Term Loan due 2025 $175mm New Structurally Senior Notes due 2025 New Extended Maturity Notes due 2025 Revolving Credit Facility First Lien Term Loan due 2025 6.000% Senior Notes due 2022 6.375% Senior Notes due 2025 Existing Debt New Notes
Sources & Uses and Pro Forma Capitalization Selected Commentary Participating RCF Lenders exchange the current $540 million1 of RCF commitments for $175 million of New Structurally Senior Term Loans and $319 million of RCF commitments with an extended 2025 maturity $459 million of 2022 Notes exchange for: $175 million of New Structurally Senior Notes $240 million of New Extended Maturity Notes due March 2025 Set forth below are the illustrative sources and uses and capitalization pro forma for the proposed Transaction Assumes 100% participation of 2022 Noteholders Excludes $25 million of the $565 million of RCF commitments that will expire in November 2020.
Projected Pro Forma Financials ($ in millions) RemainCo EBITDA includes management fees and tax sharing payments from Wilpinjong. Wilpinjong EBITDA is net of management fees and “Other” cash flows includes tax sharing payments to RemainCo. Assumes the ARS and RCF facilities are paid down to provide collateral to sureties in the form of letters of credit once available capacity is exhausted. Includes $4 million of annual Term Loan amortization. Assumes Wilpinjong excess cash flow sweep of 75% of levered free cash flow if Net Leverage is greater than 1.5x, 50% of levered free cash flow if Net Leverage is below 1.5x, paid in arrears at the beginning of Q4 of each year. Closing illustratively assumed on October 31, 2020. Ending cash at closing for RemainCo includes ~$25 million of illustrative transaction fees and ~$56 million of ARS paydown associated with the Surety Resolution. Assumes $100 million of collateral posted to sureties in Q4’20 and $25 million in FY’21 and FY’22 pursuant to the proposed Surety Resolution
VI.Appendix
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (Unaudited) (cont’d)
Reconciliation of Non-GAAP Financial Measures (Unaudited) (cont’d)
Presentation Title Project Gibraltar — Company Proposal 1 November 2020 CONFIDENTIAL W:\Restructuring\Co-Active\Peabody Energy\Project Gibraltar\Presentation\2020.11.01 - Proposal Comparisons\2020.11.01 - Proposal Comparison_v16.pptx Time Stamp : 9 March 2017 10:42:26 Exhibit 99.2
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) Surety Resolution Standstill Period Sureties to agree to the following terms / restrictions until December 31, 2025: Not to demand additional collateral on the existing surety bonds or new bonds after issuance Not to draw on letters of credit posted for the benefit of the sureties Not to cancel, or attempt to cancel, any existing surety bond Agreed Agreed Incremental Collateral $100 million of total additional collateral posted at closing Second liens on certain equipment at closing (fair market value of ~$200 million) $25 million of incremental collateral provided per annum, plus the following amounts: $0.20/ton per annum for each $100 million of TTM free cash flow, posted on a quarterly basis Subject to compliance with debt covenants, 25% of any excess cash following the required application of net proceeds from certain asset sales (greater than $10 million) $75 million of total additional collateral posted at closing Agreed on second liens, but second liens on equipment collateral to be silent Dollar-for-dollar paydown whenever incremental collateral is posted to sureties will be shared pro rata based on principal balance of debt between the RemainCo Term Loan and the New Extended Maturity Notes $100 million of total additional collateral posted at closing Agreed on second liens which will be silent No debt paydown for New RemainCo Term Loan and/or New Extended Maturity Notes associated with incremental collateral provided to sureties post-closing $25 million of incremental collateral provided per annum, plus the following amounts: $0.20/ton per annum for each $100 million of TTM free cash flow, posted on a quarterly basis Subject to compliance with debt covenants, 25% of any excess cash following the required application of net proceeds from certain asset sales (greater than $10 million) Other Terms Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed Sureties not to increase premiums on any existing surety bonds or new bonds by more than 25% post-closing Exchange contingent on a surety resolution that is acceptable to both the RCF Lenders and 2022 Noteholders Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed Minimum surety participation of 98% Proposal Comparison — Surety Resolution Company Proposal Project Gibraltar — Company Proposal The tables below and on the following pages summarize the key terms of (i) the Company’s initial proposal for a comprehensive exchange transaction and surety resolution, as presented on October 14, 2020, (ii) the RCF Lenders and 2022 Noteholders’ joint counterproposal received on November 1, 2020, and (iii) the Company’s counterproposal 1
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) RCF Exchange Exchange Offer Offer to: (i) Exchange $219 million of RCF commitments at an exchange price of 80% for $175 million of New Structurally Senior Term Loans, and (ii) Extend the maturity of the remaining ~$321 million of RCF commitments at par to March 31, 2025 Removal of the “springing maturity” Offer to: (i) Exchange $206 million of funded RCF commitments at an exchange price of par for $206 million of New Structurally Senior Term Loans issued by Wilpinjong All LCs to stay at RemainCo Exchange the remaining $334 million of RCF commitments into a New RemainCo Term Loan due September 17, 2023 Prefunded Synthetic LC Facility to be created in the amount of any LCs outstanding as of the close of the transaction Removal of the “springing maturity” Upon closing, $77.25 million to be used to provide a paydown of the New RemainCo Term Loan at par Minimum RCF Lender participation of 100% Offer to: (i) Exchange $242 million of funded RCF commitments at an exchange price of 85% for $206 million of New Structurally Senior Term Loans Agreed on LCs to stay at RemainCo (ii) Exchange the remaining $298 million of RCF commitments into a New RemainCo Term Loan due March 31, 2025 Prefunded Synthetic LC Facility to be created in the amount of any LCs outstanding as of the close of the transaction Removal of the “springing maturity” No New RemainCo Term Loan paydown at close Agreed on 100% minimum RCF Lender participation Treatment of Stub RCF Same as existing RCF 2020 Stub RCF to be paid in full at maturity Agreed Fees None 200bps cash exchange fee for all debt exchanged to Wilpinjong 200bps cash amendment fee for all RCF debt at RemainCo after the exchange transaction Same, but 50bps Proposal Comparison — RCF Exchange Company Proposal Project Gibraltar — Company Proposal 2
Proposal Comparison — 2022 Notes Exchange Company Proposal Project Gibraltar — Company Proposal Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) 2022 Notes Exchange Exchange Offer Offer to exchange: (i) $219 million of 2022 Notes at an exchange price of 80% for $175 million of New Structurally Senior Notes (ii) $240 million of 2022 Notes at par for a like amount of New Extended Maturity Notes due 2025 Minimum 2022 Noteholder participation of 95% Participating Noteholders to provide exit consents to strip all covenants and release liens Offer to exchange: (i) $194 million of 2022 Notes at an exchange price of par for $194 million of New Structurally Senior Notes (ii) Up to $265 million of 2022 Notes at par for a like amount of New Extended Maturity Notes due 2023 Upon closing, $72.75 million to be used to repurchase a portion of the exchanged 2022 Notes at par Minimum 2022 Noteholder participation of 95% Offer to exchange: (i) $228 million of 2022 Notes at an exchange price of 85% for $194 million of New Structurally Senior Notes (ii) $231 million of 2022 Notes at par for a like amount of New Extended Maturity Notes due 2025 No cash paydown at close Agreed on 95% minimum 2022 Noteholder participation Fees None 200bps cash exchange fee for all 2022 Notes exchanged to Wilpinjong 200bps cash consent fee for all New Extended Maturity Notes Early consent consideration to be discussed Same, but 50bps Non-Participating 2022 Noteholders Removal of all liens and covenants under the 2022 Notes Indenture Structural subordination relative to all assets of PEC credit group and unrestricted subsidiaries holding Wilpinjong equity Removal of all liens and covenants under the 2022 Notes Indenture 2022 Notes not exchanged to be repaid in full upon scheduled maturity Agreed on removal of all liens and covenants under the 2022 Notes Indenture 3
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New Structurally Senior Debt Amount $350 million $400 million Agreed Interest Rate 7.5% per annum, payable quarterly in cash 12% per annum, payable quarterly in cash 7.125% per annum, payable quarterly in cash Amortization / ECF Sweep No fixed amortization ECF sweep shared pro-rata between the New Structurally Senior Notes and the New Structurally Senior Term Loans: NewCo Issuer’s Net Leverage ≥ 1.50x: 75% ECF sweep NewCo Issuer’s Net Leverage < 1.50x: 50% ECF sweep 1.25% quarterly mandatory amortization payments 100% ECF sweep and 100% of net cash proceeds from asset sales and casualty events to pay debt at Wilpinjong, shared pro-rata based on principal balance of debt between the New Structurally Senior Notes and the New Structurally Senior Term Loans No fixed amortization payments Agreed on ECF sweep and use of asset sale / casualty event proceeds Maturity October 15, 2025 September 17, 2023 March 31, 2025 Collateral Structural seniority on U-Sub’s assets via subsidiary stock pledges Pledge by Wilpinjong HoldCo of 100% of Wilpinjong Equity Subject to continued due diligence regarding direct lien grant and/or guarantee by Wilpinjong Subsidiary To the extent a direct lien grant or guarantee is prohibited, include a springing lien grant and/or guarantee upon the termination of such prohibition Agreed Call Protection None NC2 / 106 (3 months) / Par (3 months), subject to specified carve-outs Additional make-whole such as a fee or special call in an event of default NC1 / 103.5 / 101 / par thereafter No make-whole or special call in event of default Proposal Comparison — Key Terms of New Structurally Senior Debt Company Proposal Project Gibraltar — Company Proposal 4
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New Structurally Senior Debt Voting Thresholds N/A Voting thresholds substantially consistent with existing Credit Agreement / Indenture as appropriate Agreed Covenants Restricted Payments: To be negotiated Permitted Indebtedness / Liens: Other debt / liens covenants to be negotiated Financial Maintenance Covenants: None Financial Covenants: Minimum DSCR: 1.5x at Wilpinjong, starting in Q3’21 Minimum Liquidity: $50 million MFN on any financial covenants to other lenders Permitted Indebtedness: No additional debt nor any liens at the issuer or any subsidiaries, including Wilpinjong OpCo Investments / Restricted Payments: No baskets for Investment / Restricted Payments (other than for the Management Fee to RemainCo) from the Wilpinjong Subsidiary under the New Credit Agreement / New Indenture Restrict all subsidiaries and eliminate the ability to designate new subsidiaries as unrestricted Asset sale, merger and other high-yield covenants with baskets and exceptions to be agreed Financial Covenants: None Permitted Indebtedness: No additional pari passu or senior debt nor any liens (other than de minimis liens to be negotiated) at the issuer or any subsidiaries, including Wilpinjong OpCo Junior / unsecured debt baskets to be negotiated Investments / Restricted Payments: Agreed,1 but de minimis baskets to be negotiated Agreed on restriction of all subsidiaries and no ability to designate subsidiaries as unrestricted Asset sale, merger and other high-yield covenants with baskets and exceptions to be agreed Proposal Comparison — Key Terms of New Structurally Senior Debt (cont’d) Company Proposal Project Gibraltar — Company Proposal 1.For the avoidance of doubt, the Management Fee shall be inclusive of any tax sharing payments. 5
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New RemainCo Term Loan Interest Rate Same as existing RCF L+725bps cash per annum 100bps LIBOR Floor 7.25% PIK per annum Same as existing RCF Prefunded Synthetic LC Facility Fees Same as existing RCF Interest Rate: L+7.25% cash (100bps LIBOR Floor), 7.25% PIK per annum Fronting Fee: 0.25% per annum Additional Customary Administrative Fees to be paid by Borrower to individual LC issuer Same as existing RCF LC Limit Same as existing RCF LC capacity under the RCF limited to the current amount outstanding at transaction close No LCs permitted on new projects or exposure Agreed on maximum LC capacity determined based on amount outstanding at closing Maximum capacity to be fixed through maturity, and any LCs that roll off or expire will not result in a reduction in capacity; Company to have ability to issue new LCs to the extent existing LCs roll off or expire Maturity March 31, 2025 September 17, 2023 March 31, 2025 Additional Collateral N/A Second lien in Wilpinjong collateral Pledge of unencumbered 35% of first-tier foreign equity Priority lien on existing collateral and additional material property previously excluded from collateral (subject to due diligence) Same provision for guarantees Agreed on second lien in Wilpinjong collateral Agreed on pledge of the 35% unencumbered first-tier foreign equity subject to tax diligence Agreed on granting liens on any collateral that currently does not have a perfected lien, subject to: Reasonable thresholds to be discussed No liens on any assets that currently do not constitute collateral Additional collateral / liens to be provided equally to existing Term Loan and 2025 Notes1 Call Protection N/A NC2 / 106 (3 months) / Par (3 months), subject to specified carve-outs Additional make-whole such as a fee or special call in an event of default No call protection Proposal Comparison — Key Terms of New RemainCo Term Loan Company Proposal Project Gibraltar — Company Proposal Parity treatment required under existing intercreditor agreement. 6
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New RemainCo Term Loan Covenants Removal of First Lien Leverage Ratio maintenance covenant Removal of qualified opinion trigger for Event of Default Closing of substantially all Permitted Investment and Restricted Payment baskets; de minimis exceptions to be negotiated Financial Maintenance Covenants: 1L Net Leverage covenant suspended until 12/31/2021, replaced with a $300 million minimum liquidity covenant at RemainCo 1L Net Leverage Covenant to be reinstated at 6.0x as of Q1’22 1L Net Leverage Covenant to be based off New Credit Agreement EBITDA Minimum DSCR: 1.0x at RemainCo starting in Q4’21 MFN on any financial covenants offered to other lenders New RemainCo Term Loan holders will benefit from financial maintenance covenants, but New Extended Maturity Notes holders will share pro rata in any consent fee, paydown or future collateral received on account of any financial maintenance covenant waiver, consent, forbearance, or amendment Investment / Restricted Payments Covenants: Close all Investment and Restricted Payment baskets under the New Credit Agreement Restrict all subsidiaries and eliminate the ability to designate new subsidiaries as unrestricted Eliminate reinvestment rights on sale proceeds in New Credit Agreement All sale proceeds must pay off New RemainCo Term Loan and New Extended Maturity Notes at RemainCo pro rata based on principal balance of debt Other Covenants: On existing asset sale definition, eliminate threshold and exceptions to application of covenant To discuss issuance of additional Priority Lien Debt to holders of Wilpinjong debt if the Wilpinjong subsidiaries fail to meet certain performance thresholds Limit indebtedness extended by a Loan Party to a non-Loan Party, even if evidenced by a promissory note No non-cash consideration with respect to asset sales proceeds Other document terms/changes to be agreed Financial Maintenance Covenants: None Investment / Restricted Payments Covenants: Agreed on Investments / Restricted Payments and ability to designate new unrestricted subsidiaries, but de minimis exceptions to be negotiated Asset Sale Provisions: No change to mandatory asset sale provisions, reinvestment rights, etc. Other Covenants Reject all proposed1 changes Proposal Comparison — Key Terms of New RemainCo Term Loan (cont’d) Company Proposal Project Gibraltar — Company Proposal Flexibility of existing Loan Party to non-Loan Party indebtedness necessary to provide funding mechanism for the Company's Australian entities. 7
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New RemainCo Term Loan ECF Sweep N/A 100% ECF Sweep to be shared pro rata based on principal amount of debt between New RemainCo Term Loan and New Extended Maturity Notes Definition of Excess Cash Flow to be discussed incorporating additional collateral payments to sureties and current Credit Agreement ECF Sweep No ECF Sweep given commitments to Term Loan Lenders and sureties New RemainCo Term Loan Paydown N/A The New RemainCo Term Loan and New Extended Maturity Notes shall share pro rata based on principal balance of debt in a dollar-for-dollar paydown whenever incremental collateral is posted to sureties as agreed to in any surety settlement In September 2021 or upon earlier payment thereof, the New RemainCo Term Loan shall receive a principal paydown equivalent to the principal amount of 2022 Notes that are not exchanged as part of the original transaction No mandatory principal paydown at closing or in the future Other Terms N/A Definition of New Credit Agreement EBITDA: to match financial statement definition of EBITDA To discuss with Company Voting Thresholds: Substantially consistent with existing Credit Agreement Definition of New Credit Agreement EBITDA: No change to existing definition Agreed on voting thresholds Proposal Comparison — Key Terms of New RemainCo Term Loan (cont’d) Company Proposal Project Gibraltar — Company Proposal 8
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New Extended Maturity Notes Interest Rate Same as existing 2022 Notes L+725bps cash per annum 100bps LIBOR Floor 7.25% PIK per annum Same as existing 2022 Notes Maturity March 31, 2025 September 17, 2023 March 31, 2025 Additional Collateral N/A Second lien in Wilpinjong collateral Pledge of unencumbered 35% of first-tier foreign equity Priority lien on existing collateral and additional material property previously excluded from collateral (subject to due diligence) Same provision for guarantees Agreed on second lien in Wilpinjong collateral Agreed on pledge of the 35% unencumbered first-tier foreign equity subject to tax diligence Agreed on granting liens on any collateral that currently does not have a perfected lien, subject to: Reasonable thresholds to be discussed No liens on any assets that currently do not constitute collateral Additional collateral / liens to be provided equally to existing Term Loan and 2025 Notes1 Call Protection N/A NC2 / 106 (3 months) / Par (3 months), subject to specified carve-outs Additional make-whole such as a fee or special call in an event of default No call protection Amortization / ECF Sweep N/A 100% ECF Sweep to be shared pro rata based on principal amount of debt between New RemainCo Term Loan and New Extended Maturity Notes Definition of Excess Cash Flow to be discussed incorporating additional collateral payments to sureties and current Credit Agreement ECF Sweep No fixed amortization No ECF Sweep given commitments to Term Loan Lenders and sureties Proposal Comparison — Key Terms of New Extended Maturity Notes Company Proposal Project Gibraltar — Company Proposal Parity treatment required under existing intercreditor agreement. 9
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) New Extended Maturity Notes Other Terms All other terms substantially similar to existing 2022 Notes provided, however, substantially all Restricted Payment and Permitted Investment capacity will be closed; de minimis exceptions to be negotiated Covenants: To receive the same rights/treatment as the New RemainCo Term Loan with respect to all covenants and other mandatory prepayments New RemainCo Term Loan holders will benefit from financial maintenance covenants, but New Extended Maturity Notes holders will share pro rata in any consent fee, paydown or future collateral received on account of any financial maintenance covenant waiver, consent, forbearance, or amendment Definition of New Credit Agreement EBITDA: to match financial statement definition of EBITDA To discuss with Company Voting Thresholds: Two-thirds for amendments and 75% to change collateral Consent consideration must be paid to all holders, and exchange offers must be open to all Financial Maintenance Covenants: None Definition of New Credit Agreement EBITDA: No change to existing definition Voting Thresholds: Agreed, but consent consideration to be paid only to consenting holders Proposal Comparison — Key Terms of New Extended Maturity Notes (cont’d) Company Proposal Project Gibraltar — Company Proposal 10
Company Proposal (10.14) Creditor Proposal (11.01) Company Counterproposal (11.01) Other Terms Professional Fee Expenses N/A Company to pay RCF Lenders’ and 2022 Noteholders’ professional fees (including Australian counsel) as detailed in their Engagement Letters with the Lenders/Noteholders Agree, but subject to negotiation of PJT’s engagement letter Due Diligence N/A All transactions are contingent upon legal and business due diligence acceptable in all respects to advisors to the 2022 Noteholders and RCF Lenders, in each case in their sole discretion, regarding, among other things, Wilpinjong transfer transactions and exchange transaction Agreed, but no diligence out in transaction support agreement upon signing Definitive Documents N/A All transactions are subject to definitive transaction documents acceptable in all respects to the 2022 Noteholders and RCF Lenders, in each case in their sole discretion Agreed Company to have blanket fiduciary out Indemnity N/A Transaction documents to contain indemnification of exchange participants by all Company entities acceptable to 2022 Noteholders and RCF Lenders Agreed Releases N/A N/A Transaction documents to contain customary mutual releases, including releases of directors and officers Proposal Comparison — Other Terms Company Proposal Project Gibraltar — Company Proposal 11
Disclaimer Project Gibraltar — Company Proposal CONFIDENTIAL The information herein has been prepared by Lazard and Jones Day (collectively, “we”) based upon information supplied by Peabody Energy Corporation (“Peabody” or the “Company”) or publicly available information, and portions of the information herein may be based upon certain statements, estimates and forecasts provided by the Company with respect to the anticipated future performance of the Company. We have relied upon the accuracy and completeness of the foregoing information, and have not assumed any responsibility for any independent verification of such information or any independent valuation or appraisal of any of the assets or liabilities of the Company, or any other entity, or concerning solvency or fair value of the Company or any other entity. With respect to financial forecasts, we have assumed that they have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of the Company as to the future financial performance of the Company. We assume no responsibility for and express no view as to such forecasts or the assumptions on which they are based. The information set forth herein is based upon economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof, unless indicated otherwise. These materials and the information contained herein are confidential and may not be disclosed publicly or made available to third parties without the prior written consent of Lazard; provided, however, that you may disclose to any and all persons the U.S. federal income tax treatment and tax structure of the transaction described herein and the portions of these materials that relate to such tax treatment or structure. Lazard is acting as investment banker to the Company, and will not be responsible for and will not provide any tax, accounting, actuarial, legal or other specialist advice.
Exhibit 99.3
Project Oz JOINT RCF/2022 NOTEHOLDER PROPOSAL TO COMPANY November 4, 2020 Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents
I. Surety Resolution Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents 0
Proposed Surety Resolution Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/3) Standstill Period > Sureties to agree to the following terms/restrictions until December 31, 2025 - Not to demand additional collateral on the existing surety bonds or new bonds after issuance - Not to draw on letters of credit posted for the benefit of the sureties - Not to cancel, or attempt to cancel, any existing surety bond Agreed Agreed Incremental Collateral $75mm of total additional collateral posted at closing Second liens on certain equipment at closing (fair market value of ~$200mm) Second liens on equipment collateral to be silent Dollar-for-dollar pay down whenever incremental collateral is posted to sureties will be shared pro rata based on principal balance of debt between the Remain Co Term Loan and the New Extended Maturity Notes $100 million of total additional collateral posted at closing Agreed on second liens which will be silent No debt pay down for New Remain Co Term Loan and/or New Extended Maturity Notes associated with incremental collateral provided to sureties post-closing $25 million of incremental collateral provided per annum, plus the following amounts: - $0.20/ton per annum for each $100 million of TTM free cash flow, posted on a quarterly basis - Subject to compliance with debt covenants, 25% of any excess cash following the required application of net proceeds from certain asset sales (greater than $10 million) $75mm of total additional collateral posted at closing Second liens on certain equipment at closing (fair market value of ~$200mm) - Second liens on equipment collateral to be silent Plus the following amounts: - $0.20/ton per annum for each $100 million of TTM free cash flow, posted on a quarterly basis - Subject to compliance with debt covenants, 25% of any excess cash following the required application of net proceeds from certain asset sales (greater than $10 million), but reinvestment rights in debt agreements don’t apply for this purpose Removed dollar for dollar pay down with surety collateral postings Other Terms Exchange contingent on a surety resolution that is acceptable to both the RCF Lenders and 2022 Noteholders Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed Minimum surety participation of 98% Exchange contingent on a surety resolution that is acceptable to both the RCF Lenders and 2022 Noteholders Peabody to forego any future dividends or share repurchases during the standstill period, unless otherwise agreed 3
II. Proposed RCF Exchange Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents
Proposed RCF Exchange Exchanged Wilpinjong New Structurally Senior Term Loans Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) New Structurally Senior Term Loans Exchange Offer > Offer to—Exchange $206mm of funded RCF commitments at an exchange price of par for $206mm of New Structurally Senior Term Loans issued by Wilpinjong o All LCs to stay at RemainCo > Offer to—(i) exchange $242mm of 2022 Notes at an exchange price of 85% for $206mm of New Structurally Senior Term Loans at Wilpinjong o All LCs to stay at RemainCo > Offer to—Exchange $206mm of funded RCF commitments at an exchange price of par for $206mm of New Structurally Senior Term Loans issued by Wilpinjong o All LCs to stay at RemainCo Interest Rate > 12.0% per annum, payable quarterly in cash> 7.125%> 12.0% per annum, payable quarterly in cash Exchange Fee> > >2.00% cash exchange fee for all debt exchanged to Wilpinjong 1.25% quarterly mandatory amortization payments 100% of Excess Cash Flow at Wilpinjong and 100% of net cash proceeds from asset sales and casualty events to pay > 0.50% cash exchange fee for all debt exchanged to Wilpinjong > No mandatory amortization payments > Agreed on Excess Cash Flow proceeds > 2.00% cash exchange fee for all debt exchanged to Wilpinjong > 1.25% quarterly mandatory amortization payments > Agreed on Excess Cash Flow proceeds Amortizationdebt at Wilpinjong, shared pro rata based on principal balance of debt between the New Structurally Senior Term Loans and New Structurally Senior Secured Notes at Wilpinjong Maturity> >September 17, 2023 100% by Wilpinjong HoldCo of Wilpinjong Equity - > March 31, 2025 > Agreed Subject to continued due diligence regarding direct lien grant and/or guarantee by Wilpinjong Subsidiary > December 31, 2023 > Agreed Collateral-To the extent a direct lien grant or guarantee is prohibited, include a springing lien grant and/or guarantee upon the termination of such prohibition
Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents Proposed RCF Exchange Exchanged Wilpinjong New Structurally Senior Term Loans (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1)RCF/2022 Noteholder Proposal (11/4) >Financial Covenants> Financial Covenants: None> Financial Covenants -Minimum DSCR: 1.5x at> Permitted Indebtedness:-Minimum DSCR: 1.0x at Wilpinjong, Wilpinjong, starting in Q3 2021 -No additional pari passu or senior starting in Q3 2021 -Minimum Liquidity: $50 million debt nor any liens (other than de-Minimum Liquidity: $50 million -MFN on any financial covenants to minim is liens to be negotiated) at the -MFN on any financial covenants to other lenders issuer or any subsidiaries, including other lenders >Permitted Indebtedness: Wilpinjong OpCo > Permitted Indebtedness: -No additional debt nor any liens at-Junior / unsecured debt baskets to be-No additional debt nor any liens at the the issuer or any subsidiaries, negotiated issuer or any subsidiaries, including including Wilpinjong OpCo > Investments / Restricted Payments: Wilpinjong OpCo >Investments/Restricted Payments Agreed(1), but de minim is baskets to be > Investments/Restricted Payments -No baskets for Investment /negotiated-No baskets for Investment / Loans Covenants Restricted Payments (other than for the Management Fee to Remain Co) from the Wilpinjong Subsidiary under the New Credit > Agreed on restriction of all subsidiaries and no ability to designate subsidiaries as unrestricted > Asset sale, merger and other high-yield Restricted Payments (other than for the Management Fee to Remain Co) from the Wilpinjong Subsidiary under the New Credit Agreement Term Senior >Restrict all subsidiaries and eliminate the ability to designate new subsidiaries as unrestricted Agreement be agreed covenants with baskets and exceptions to ability to designate new subsidiaries as> Restrict all subsidiaries and eliminate the unrestricted > Asset sale, merger and other high yield >Asset sale, merger and other high yield covenants with baskets and exceptions to be covenants with baskets and exceptions agreed Structurally to be agreed >Voting thresholds substantially> Agreed> Agreed New Voting consistent with existing Credit Thresholds Agreement >NC2 / 106 (3 months) / Par (3 months),> NC1 / 103.5 / 101 / par thereafter> NC2 / 105 (6 months) / Par thereafter, Call subject to specified carve-outs> No make-whole or special call in event of subject to specified carve-outs Protection>Additional make-whole such as a fee or default> Additional make-whole such as a fee or special call in an event of default special call in an event of default >Requires the Company payment of RCF> Agree, but subject to negotiation of PJT’s> Requires the Company payment of RCF Professional Lender and Noteholders professional fees engagement letter Lender and Noteholders professional fees Fee(including Australian counsel) as detailed ( including Australian counsel) as detailed in Expenses in their Engagement Letters with the their Engagement Letters with the Lenders/Noteholders Lenders/Noteholders (1) For the avoidance of doubt, the Management Fee shall be inclusive of any tax sharing payments.
Confidential Proposed RCF Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RemainCo Term Loan RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > The remaining $334mm of RCF > (Exchange the remaining $298 million of > The remaining $334mm of RCF commitments will exchange into a RCF commitments into a New RemainCo commitments will exchange into a RemainCo Term Loan and retain the Term Loan due March 31, 2025 RemainCo Term Loan and extend the September 17, 2023 maturity—Prefunded Synthetic LC Facility to maturity to December 31, 2023 RemainCo—All LCs to stay at RemainCo be created in the amount of any—All LCs to stay at RemainCo—Prefunded Synthetic LC Facility to LCs outstanding as of the close of—Prefunded Synthetic LC Facility to be Term Loan be created in the amount of any the transaction created in the amount of any LCs LCs outstanding as of the close of—Removal of the “springing outstanding as of the close of the the transaction maturity” transaction—Removal of “springing maturity”—Removal of “springing maturity” > Second lien in Wilpinjong collateral > Agreed on second lien in Wilpinjong > Agreed > Pledge of unencumbered 35% of first- collateral > Pledge of unencumbered 35% of first-tier tier foreign equity > Agreed on pledge of the 35% foreign equity > Priority lien on existing collateral and unencumbered first-tier foreign equity > Priority lien on existing collateral and additional material property previously subject to tax diligence additional material property previously excluded from collateral (subject to due > Agreed on granting liens on any excluded from collateral (subject to due diligence) collateral that currently does not have a diligence)—Same provision for guarantees perfected lien, subject to:—Same provision for guarantees Additional—Reasonable thresholds to be > Additional collateral / liens to be provided Collateral discussed equally to existing Term Loan and 2025 —No liens on any assets that Notes(1) currently do not constitute collateral > Additional collateral / liens to be provided equally to existing Term Loan and 2025 Notes(1) Interest > L+7.25% Cash, 7.25% PIK, 1.0% LIBOR > Same as existing RCF > L+6.50% Cash, 8.00% PIK, 1.0% LIBOR Rate Floor per annum Floor per annum > Interest: L+7.25% Cash, 7.25% PIK, > Same as existing RCF > Interest: L+6.50% Cash, 8.00% PIK, 1.0% 1.0% LIBOR Floor per annum LIBOR Floor per annum Prefunded > Fronting Fee: 0.25% per annum > Fronting Fee: 0.25% per annum Synthetic LC > Additional Customary Administrative > Additional Customary Administrative Fees Facility Fees Fees to be Paid by Borrower to to be Paid by Borrower to individual LC individual LC issuer issuer (1) Parity treatment required under existing intercreditor agreement. 7
Confidential Proposed RCF Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RemainCo Term Loan (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > LC capacity under the RCF limited to the > Agreed on maximum LC capacity > Agreed, subject to reduction in maximum current amount outstanding at determined based on amount outstanding capacity based on Paydowns transaction close at closing Letter of—No LCs permitted on new projects—Maximum capacity to be fixed or exposure through maturity, and any LCs that Credit Limit roll off or expire will not result in a reduction in capacity; Company to have ability to issue new LCs to the extent existing LCs roll off or expire Amendment > 2.00% cash amendment fee for all RCF > 0.50% cash amendment fee for all RCF debt > 2.00% cash amendment fee for all RCF debt debt at RemainCo after the exchange at RemainCo after the exchange at RemainCo after the exchange transaction Fee transaction transaction > Financial Maintenance Covenants > Financial Maintenance Covenants: None > Financial Maintenance Covenants—1L Net Leverage covenant—1L Net Leverage covenant suspended until 12/31/2021, suspended until 12/31/2021, replaced with a $300 million replaced with a $200 million minimum liquidity covenant at minimum liquidity covenant at RemainCo RemainCo o 1L Net Leverage Covenant o 1L Net Leverage Covenant to to be reinstated at 6.0x as be reinstated in Q1 2022 with of Q1 2022 a 15% cushion to the o 1L Net Leverage Covenant Company’s business plan to be based off New Credit o 1L Net Leverage Covenant to Agreement EBITDA be based off New Credit —Minimum DSCR: 1.0x at Agreement EBITDA Covenants RemainCo starting in Q4 21—Minimum DSCR: 1.0x at RemainCo —MFN on any financial covenants starting in Q4 21 offered to other lenders—MFN on any financial covenants —RemainCo Term Loan holders will offered to other lenders benefit from financial—RemainCo Term Loan holders will maintenance covenants, but New benefit from financial maintenance Extended Maturity Notes holders covenants, but New Extended will share pro rata in any consent Maturity Notes holders will share pro fee, paydown or future collateral rata in any consent fee, paydown or received on account of any future collateral received on account financial maintenance covenant of any financial maintenance waiver, consent, forbearance, or covenant waiver, consent, amendment forbearance, or amendment 8
Confidential Proposed RCF Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RemainCo Term Loan (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > Investment/Restricted Payments Covenants > Investment / Restricted Payments > Investment/Restricted Payments Covenants—Close all Investment and Restricted Covenants: Agreed on Investments /—Close all Investment and Restricted Payment Payment baskets under the New Credit Restricted Payments and ability to baskets under the New Credit Agreement Agreement designate new unrestricted—Restrict all subsidiaries and eliminate the ability —Restrict all subsidiaries and eliminate subsidiaries, but de minimis to designate new subsidiaries as unrestricted the ability to designate new exceptions to be negotiated—Eliminate reinvestment rights on sale proceeds subsidiaries as unrestricted > Asset Sale Provisions: in New Credit Agreement, > No change to mandatory asset sale —Eliminate reinvestment rights on sale o All sale proceeds must pay off RemainCo provisions, reinvestment rights, etc. proceeds in New Credit Agreement, (1) Term Loan and New Extended Maturity > Other Covenants Reject all proposed o All sale proceeds must pay off changes Notes at RemainCo pro rata based on RemainCo Term Loan and New principal balance of debt Extended Maturity Notes at > Other Covenants RemainCo pro rata based on—On existing asset sale definition, eliminate principal balance of debt threshold and exceptions to application of > Other Covenants covenant Covenants —On existing asset sale definition,—To discuss issuance of additional Priority Lien (Cont’d) eliminate threshold and exceptions to Debt to holders of Wilpinjong debt if the application of covenant Wilpinjong subsidiaries fail to meet certain —To discuss issuance of additional performance thresholds Priority Lien Debt to holders of—Limit indebtedness extended by a Loan Party to Wilpinjong debt if the Wilpinjong a non-Loan Party, even if evidenced by a subsidiaries fail to meet certain promissory note performance thresholds—No non-cash consideration with respect to asset —Limit indebtedness extended by a Loan sales proceeds Party to a non-Loan Party, even if—Other document terms/changes to be agreed evidenced by a promissory note—No non-cash consideration with respect to asset sales proceeds—Other document terms/changes to be agreed > NC2 / 106 (3 months) / Par (3 months), > No call protection > NC2 / 105 (6 months) / Par thereafter, subject to Call subject to specified carve-outs specified carve-outs Protection > Additional make-whole such as a fee or > Additional make-whole such as a fee or special call in special call in an event of default an event of default > 2020 Stub Revolver to be paid in full at > Agreed > Agreed Treatment maturity of Stub Revolver (1) Flexibility of existing Loan Party to non-Loan Party indebtedness necessary to provide funding 9 mechanism for the Company’s Australian entities.
Confidential Proposed RCF Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RemainCo Term Loan (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) Participation > Requires participation of 100% of revolving > Agreed > Agreed Thresholds lenders > Upon closing, $77.25 million will be used > No RemainCo Term Loan paydown at > Upon closing, $77.25 million will be used to to provide a paydown of the RemainCo close provide a paydown of the RemainCo Term Term Loan at par > No mandatory principal paydown at Loan at par > The RemainCo Term Loan and New closing or in the future > 1.25% quarterly mandatory amortization Extended Maturity Notes shall share pro payments, subject to a minimum liquidity test rata based on principal balance of debt in a > In September 2021 or upon earlier payment RemainCo dollar-for-dollar paydown whenever thereof, the RemainCo Term Loan shall Term Loan incremental collateral is posted to sureties receive a principal paydown equivalent to the Paydown/ as agreed to in any surety settlement principal amount of 2022 Notes that are not Mandatory > In September 2021 or upon earlier exchanged as part of the original transaction Amortization payment thereof, the RemainCo Term Loan shall receive a principal paydown equivalent to the principal amount of 2022 Notes that are not exchanged as part of the original transaction > 100% of Excess Cash Flow to be shared pro > No ECF Sweep given commitments to > 100% of Excess Cash Flow to be shared pro rata based on principal amount of debt Term Loan Lenders and sureties rata based on principal amount of debt between RCF Term Loan and New between RemainCo Term Loan and New Extended Maturity Notes Extended Maturity Notes —Definition of Excess Cash Flow to be—Definition of Excess Cash Flow to be Excess Cash discussed incorporating additional discussed incorporating additional Flow Sweep collateral payments to sureties and collateral payments to sureties and current Credit Agreement Excess current Credit Agreement Excess Cash Cash Flow Sweep Flow Sweep Definition of > To match financial statement definition of > No change to existing definition > To match financial statement definition of New Credit EBITDA EBITDA Agreement—To discuss with Company—To discuss with Company EBITDA > Voting thresholds substantially consistent > Agreed > Agreed Voting with existing Credit Agreement Thresholds 10
III. Proposed 2022 Notes Exchange Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents 11
Confidential Proposed 2022 Notes Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents Exchanged Wilpinjong New Structurally Senior Secured Notes RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > Offer to > Offer to > Offer to —(i) exchange $194mm of 2022—(i) exchange $219mm of 2022 Notes—(i) exchange $194mm of 2022 Notes Notes at an exchange price of par at an exchange price of 80% for at an exchange price of par for for $194mm of New Structurally $175mm of New Structurally Senior $194mm of New Structurally Senior Exchange Offer Senior Secured Notes Term Loans and Secured Notes—(ii) $240mm of 2022 Notes at par for a like amount of New Extended Maturity Notes due 2025 > 12.0% per annum, payable quarterly in > 7.5% per annum, payable quarterly in cash > 12.0% per annum, payable quarterly in Interest Rate cash cash > 2.00% cash exchange fee for all 2022 > N/A > 2.00% cash exchange fee for all 2022 Notes Exchange Fee Notes exchanged to Wilpinjong exchanged to Wilpinjong > 1.25% quarterly mandatory amortization > No fixed amortization; 50-75% excess cash > 1.25% quarterly mandatory amortization Notes payments flow sweep shared pro rata with the New payments > 100% of Excess Cash Flow at Wilpinjong Structurally Senior Secured Notes: > 100% of Excess Cash Flow at Wilpinjong and 100% of net cash proceeds from—U-Sub Net Leverage ³ 1.50x: 75% and 100% of net cash proceeds from asset Amortization asset sales and casualty events to pay ECF Sweep sales and casualty events to pay debt at debt at Wilpinjong, shared pro rata based—U-Sub Net Leverage < 1.50x: 50% Wilpinjong, shared pro rata based on Secured on principal balance of debt between the ECF Sweep principal balance of debt between the New New Structurally Senior Term Loans and Structurally Senior Term Loans and New New Structurally Senior Secured Notes at Structurally Senior Secured Notes at Senior Wilpinjong Wilpinjong Maturity > September 17, 2023 > October 15, 2025 > December 31, 2023 > 100% by Wilpinjong HoldCo of Wilpinjong > Structural seniority on U-Sub’s assets via > 100% by Wilpinjong HoldCo of Wilpinjong Equity subsidiary stock pledges Equity > Subject to continued due diligence > Subject to continued due diligence Structurally regarding direct lien grant and/or regarding direct lien grant and/or guarantee by Wilpinjong Subsidiary guarantee by Wilpinjong Subsidiary > To the extent a direct lien grant or > To the extent a direct lien grant or New Collateral guarantee is prohibited, include a guarantee is prohibited, include a springing springing lien grant and/or guarantee lien grant and/or guarantee upon the upon the termination of such prohibition termination of such prohibition 12
Confidential Proposed 2022 Notes Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents Exchanged Wilpinjong New Structurally Senior Secured Notes (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > Financial Covenants > Restricted Payments: To be negotiated > Financial Covenants—Minimum DSCR: 1.5x at Wilpinjong, > Permitted Indebtedness/Liens: Other—Minimum DSCR: 1.0x at Wilpinjong, starting in Q3 2021 debt/liens covenants to be negotiated starting in Q3 2021—Minimum Liquidity: $50 million > Financial Maintenance Covenants: None—Minimum Liquidity: $50 million—MFN on any financial covenants to—MFN on any financial covenants to other lenders other lenders > Permitted Indebtedness: > Permitted Indebtedness: —No additional debt nor any liens at—No additional debt nor any liens at the issuer or any subsidiaries, the issuer or any subsidiaries, including Wilpinjong OpCo including Wilpinjong OpCo > Investments/Restricted Payments > Investments/Restricted Payments—No baskets for Investment /—No baskets for Investment / Restricted Payments (other than Restricted Payments (other than for Notes for the Management Fee to the Management Fee to RemainCo) Covenants RemainCo) from the Wilpinjong from the Wilpinjong Subsidiary under Subsidiary under the New the New Indenture Secured Indenture > Restrict all subsidiaries and eliminate the > Restrict all subsidiaries and eliminate the ability to designate new subsidiaries as ability to designate new subsidiaries as unrestricted Senior unrestricted > Asset sale, merger and other high yield > Asset sale, merger and other high yield covenants with baskets and exceptions to covenants with baskets and exceptions to be agreed Structurally be agreed New > NC2 / 106 (3 months) / Par (3 months), > N/A > NC2 / 105 (6 months) / Par thereafter, Call subject to specified carve-outs subject to specified carve-outs Protection > Additional make-whole such as a fee or > Additional make-whole such as a fee or special call in an event of default special call in an event of default > Requires the Company payment of RCF > N/A > Requires the Company payment of RCF Professional Lender and Noteholders professional fees Lender and Noteholders professional fees (including Australian counsel) as detailed (including Australian counsel) as detailed in Fee Expenses in their Engagement Letters with the their Engagement Letters with the Lenders/Noteholders Lenders/Noteholders 13
Confidential Proposed 2022 Notes Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents New Extended Maturity Notes RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > Exchange up to $265mm of 2022 Notes > Maturity: March 31, 2025 > Exchange up to $265mm of 2022 Notes at an New at an exchange rate of par for new 2023 > All other terms substantially similar to exchange rate of par for new 2023 notes to be Extended notes to be issued by RemainCo (the existing 2022 Notes provided, however, issued by RemainCo (the “New Extended Maturity “New Extended Maturity Notes”) substantially all Restricted Payment and Maturity Notes”) Notes > Maturity: Extended to September 17, Permitted Investment capacity will be closed; > Maturity: Extended to December 31, 2023 2023 de minimis exceptions to be negotiated > Second lien in Wilpinjong collateral > N/A > Second lien in Wilpinjong collateral > Pledge of unencumbered 35% of first- > Pledge of unencumbered 35% of first-tier tier foreign equity foreign equity > First lien on existing collateral and > First lien on existing collateral and additional Additional additional material property previously material property previously excluded from Collateral excluded from collateral (subject to due collateral (subject to due diligence) diligence)—Same provision for guarantees—Same provision for guarantees > Additional collateral / liens to be provided equally to existing Term Loan and 2025 Notes(1) Interest > L+7.25% Cash, 7.25% PIK, 1.0% LIBOR > Same as existing RCF > L+6.50% Cash, 8.00% PIK, 1.0% LIBOR Floor per Rate Floor per annum annum > 2.00% cash consent fee for all New > N/A > 2.00% cash consent fee for all New Extended Consent Extended Maturity Notes Maturity Notes Fee > Early consent consideration to > Early consent consideration to be be discussed discussed > Upon closing, $72.75 million will used to > N/A > Upon closing, $72.75 million will used to repurchase a portion of the exchanged repurchase a portion of the exchanged 2022 Paydown 2022 Notes at par Notes at par > 1.25% quarterly mandatory amortization payments, subject to a minimum liquidity test > NC2 / 106 (3 months) / Par (3 months), > N/A > NC2 / 105 (6 months) / Par thereafter, subject Call subject to specified carve-outs to specified carve-outs Protection > Additional make-whole such as a fee or > Additional make-whole such as a fee or special special call in an event of default call in an event of default Definition > To match financial statement definition > N/A > To match financial statement definition of of New of EBITDA EBITDA—To discuss with Company—To discuss with Company Credit Agreement EBITDA (1) Parity treatment required under existing intercreditor agreement. 14
Confidential Proposed 2022 Notes Exchange Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents New Extended Maturity Notes (Cont’d) RCF/2022 Noteholder Proposal (11/1) Company Proposal (11/1) RCF/2022 Noteholder Proposal (11/4) > To receive the same rights/treatment as > Not specified > To receive the same rights/treatment as the the RemainCo Term Loan with respect to RemainCo Term Loan with respect to all all covenants and other mandatory covenants and other mandatory prepayments prepayments > RemainCo Term Loan holders will benefit from > RemainCo Term Loan holders will benefit financial maintenance covenants, but New from financial maintenance covenants, Extended Maturity Notes holders will share pro Covenants but New Extended Maturity Notes rata in any consent fee, paydown or future holders will share pro rata in any consent collateral received on account of any financial fee, paydown or future collateral received maintenance covenant waiver, consent, on account of any financial maintenance forbearance, or amendment covenant waiver, consent, forbearance, or amendment > 100% of Excess Cash Flow to be shared > N/A > 100% of Excess Cash Flow to be shared pro rata pro rata based on principal amount of based on principal amount of debt between debt between RCF Term Loan and New RemainCo Term Loan and New Extended Excess Cash Extended Maturity Notes Maturity Notes —Definition of Excess Cash Flow to be—Definition of Excess Cash Flow to be Flow Sweep discussed incorporating additional discussed incorporating additional collateral payments to sureties and collateral payments to sureties and current Credit Agreement Excess current Credit Agreement Excess Cash Cash Flow Sweep Flow Sweep Participation > To consummate this transaction, at least > To consummate this transaction, at least > To consummate this transaction, at least 95% of 95% of the 2022 Notes must vote to 95% of the 2022 Notes must vote to the 2022 Notes must vote to exchange Threshold exchange exchange > 2/3rds for amendments and 75% to > As specified in Indenture > 2/3rds for amendments and 75% to change Voting change collateral collateral > Consent consideration must be paid to all > Consent consideration must be paid to all Thresholds holders, and exchange offers must be holders, and exchange offers must be open to open to all all Non- > Removal of all liens and covenants under > Removal of all liens and covenants under > Removal of all liens and covenants under the the 2022 Notes Indenture the 2022 Notes Indenture 2022 Notes Indenture Participating—Structural subordination relative to 2022 all assets of PEC credit group and Noteholders unrestricted subsidiaries holding Wilpinjong equity Non- > 2022 Notes not exchanged will be repaid > N/A > 2022 Notes not exchanged will be repaid in full Exchanged in full upon scheduled maturity upon scheduled maturity Note Paydown 15
IV. General Terms Confidential Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents 16
Confidential General Terms Prepared at the Direction of Counsel Subject to FRE 408 and Local Equivalents RCF/2022 Noteholder Proposal (11/1) Company Proposal RCF/2022 Noteholder Proposal (11/4) > All transactions are contingent upon legal > Agreed, but no diligence out in transaction > All transactions are contingent upon legal and business due diligence acceptable in support agreement upon signing and business due diligence acceptable in all all respects to advisors to the 2022 respects to advisors to the 2022 Due Noteholders and RCF Lenders, in each Noteholders and RCF Lenders, in each case Diligence case in their sole discretion, regarding, in their sole discretion, regarding, among among other things, Wilpinjong transfer other things, Wilpinjong transfer transactions and exchange transaction transactions and exchange transaction > All transactions are subject to definitive > Agreed > All transactions are subject to definitive transaction documents acceptable in all > Company to have blanket fiduciary out transaction documents acceptable in all Definitive respects to the 2022 Noteholders and RCF respects to the 2022 Noteholders and RCF Documents Lenders, in each case in their sole Lenders, in each case in their sole discretion discretion > Transaction documents to contain > Agreed > Agreed indemnification of exchange participants Indemnity by all Company entities acceptable to 2022 Noteholders and RCF Lenders > N/A > Transaction documents to contain > [To discuss] Releases customary mutual releases, including releases of directors and officers 17
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