Peabody CFO Amy Schwetz Employee Letter on Recent SEC Filings
Following the company's recent filings with the U.S. Securities and Exchange Commission, Peabody Energy Executive Vice President and Chief Financial Officer Amy Schwetz sent the below business update to Peabody employees to keep the workforce informed of the company's latest financial strategies and actions.
March 16, 2016
Dear Fellow Employee:
As you know, Peabody has been pursuing a number of actions with respect to our three core priorities – operational, financial and portfolio – to improve the business against a rugged and sustained industry downturn. The company continues to focus diligently on our dual financial objectives to preserve liquidity and reduce debt.
Along those lines, Peabody Energy made several disclosures that we wanted to bring to your attention.
First of all, Peabody has filed its Form 10-K annual report. The 10-K includes an opinion (known as a "going concern opinion") from our independent auditors reflecting their view that our current financial path – absent significant improvements, asset sales and/or other favorable changes – may not be sustainable over the course of the year. One practical effect is that this opinion impacts our credit agreement and may result in an acceleration of our debt obligations.
We also disclosed that the company has elected to exercise a 30-day grace period related to interest payments that were due on March 15. This grace period is allowed, and companies using their grace periods may do so for a number of reasons. In our case, we plan to continue to use this time to have conversations with our lenders about our alternatives, while maintaining options around our interest payments.
Both of these disclosures are available in additional detail through our SEC filings at PeabodyEnergy.com.
None of this changes our approach toward best practices in mining and our mission and values. Safety is our number one value, and we continue our focus on sustainability to create high-quality land restoration for generations that follow. Our mines continue in the normal course of operations and continue to deliver strong underlying performance. We continue our service to our valued customers. Regarding our important relationships with suppliers, we continue to transact as normal, abiding by the terms of our vendor agreements.
For employees, our business moves forward in ordinary course, and this has no effect on day-to-day operations. Still, we recognize these events may cause uncertainty or contribute to speculation. We will continue to provide updates as appropriate. As always, please contact your manager or feel free to reach out to Employee Communications at EmployeeCommunications@PeabodyEnergy.com if you have questions. Thank you.
Executive Vice President and Chief Financial Officer
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