FInancial informationI have done some digging down into a sample of the documents for PNC’s coal company finance. Here’s what they show.

Aggregate numbers in the RAN 2010-2011 list, PNC was contributing a lot of money to coal company financing:

Contributing to not less than $8.75 billion in credit (typically in revolving lines of credit

Underwriting (as part of syndicates) for $4.2 billion in bond issues for the five companies

PNC underwriting: $92.5 million (plus additional unknown underwriting amounts) for those bond issues.

These total include each significant financial transaction for the coal companies - where PNC participated - during that time period.

• PNC shared those transactions with other participants: e.g. for the bond issues it was a junior underwriter, for the credit transactions there were other lenders.

Not all the transactions in the RAN list reflect the bank loans and bond issues which support the MTR coal company finance as of now. In both the credit transactions and the bond issues the companies were basically refinancing existing debt: using the proceeds of a bond issue to repay existing debt, or amending and extending an existing line of credit to extend its effective date or increase the amount available. for one with new terms.

• Only a fraction of the debt and underwriting totals is money the companies are now using to finance their operations. The status quo: current PNC coal company finance

PNC and other banks are currently financing the coal companies through various forms letters of credit. Some of the available credit has been drawn down and used; the rest is still on standby. By a very rough extrapolation,

• The total credit commitments by all banks for all companies probably exceed $1 billion. • The credit actually used – the amount owed - for borrowing is a fraction of that amount. • PNC’s commitments of the total under the letters of credit and its actual lending when the credit used are undetermined fractions of those amounts.

(These commitments would be shown for the companies’ most recent regular

SEC 10-K filings. PNC’s particular credit commitments and the coal companies’ actual draws against PNC aren’t shown in these SEC materials.)

• The letters of commitment are contracts that run out on various set dates within the next few years. • Until the contracts expire (on those dates) PNC is obligated by those contracts to make additional credit available to the coal companies.• Under typical credit arrangements the lender receives

o Fees up fronto Commitment fees – paying to make the credit available before it is

actually drawno Interest once the credit is used for borrowingo

The available PNC and SEC documents do not show how much PNC made available to the credit financing. However, based on those documents it is possible to analyze how the “credit facilities” (revolving and other credit) were structured, and to estimate some of the income it received.

In one example, PNC was "joint lead arranger" for CONSOL’s %1.5 billion May 2011 credit agreement.

1. This was a credit transaction running for a finite period, five years, rather than an ongoing investment in CONSOL.

2. PNC would actually not provide money to Alpha until Alpha drew down on the available credit.

3. CONSOL was a highly-leveraged borrower which would have to pay premium interest and fees for this credit

4. PNC was a joint lead arranger for the transaction. An arranger for this kind of highly-leveraged premium fee transaction would typically collect a fee of between 1% to 5% of the total amount of the credit.

5. In this case that fee would range from $15 million to $75 million. As a joint arranger PNC would share this fee, receiving half: an estimated $7.5 million to $37.5 million, just for helping arranging for the lines of credit.

6. However, before Alpha drew down the money, it would have to pay a (floating, significant profit margin) “commitment fee” just for having the money available. Interest (also at a floating rate plus a margin) would be due only after drawing down funds.

7. Interest and commitment fees would depend on how much CONSOL had previously drawn and prevailing inter-bank rates. PNC and other lenders would receive a margin (the exact total

would require further analysis, nut would be significant pre-determined fee income available for profit.

8. PNC received similar fees, depending on its role, for each amendment to its credit agreements with the coal companies. Each arrangement was a separate transaction for which it received a new fee.

PNC and the other banks are currently financing the coal companies by their current respective commitments for these letters of credits. These commitments would be shown for the companies’ most recent regular SEC 10-K filings. I haven’t analyzed the data, but the total credit commitments by all banks for all companies probably exceed $1 billion. PNC’s commitments are an undetermined fraction of that crude estimate. (PNC’s credit commitments and the coal companies’ actual draws aren’t shown in these SEC materials.)

This analysis implies some contrasts with underwriting. When PNC underwrote bond issues, its participation and income had a different structure.

In June 2011, Alpha had two bond issues, one $800 million issue and one $800 million issue. PNC participated in the $800 million issue as a junior underwriter for $20 million.

1. “Underwriting” is a guarantee that the security (here a bond) will have an investor-buyer (e.g. a pension fund) in the ongoing market for the bonds. The elapsed time from when the bonds issue to investor purchase is usually a day or less.

2. Therefore PNC’s involvement (participation in the underwriting guarantee) for this transaction was brief, lasting only a day or less.

3. Because Alpha was a risky borrower, the bonds paid 6% annual interest, about 1% more than for similar corporate bonds at that time.

4. The typical investment-underwriting fee (for all underwriters collectively) would probably be about 1% of the bond issue.

5. As a junior underwriter PNC would probably have received about $100,000 for its $20 million underwriting of the $800 million June 2011 Alpha bond issue.

6. It would not have received any further fees from the\is bond issue.

When PNC provided credit (actual borrowing or committing to make money available) the commitment was for five years. Second, when PNC was bond underwriting, it actually fronting money only for a very period, only a day or so, from when it bought the bonds from the issuer until when it turned around and sold them to investors. Moreover, it

got very little income for doing this. For example, Extrapolating, PNC would not have made more than $2 million income for all of its coal company bond underwriting during 2010 and 2011.

However, supplying credit is another story. The origination fees and "arranger" fees for a borrower with weak credit - as the coal companies are and were - might amount to from 2% to 5% of each newly amended credit agreement transaction. This comes to a lot of money, for each transaction and in total.

To take another example, PNC was "co-arranger" for Alpha's $1.2 billion May 2010 credit agreement. It would have received at least $5 million, and perhaps several times that much, just for arranging this one line of credit.

PNC received similar fees each time a borrower came back to refinance and  it arranged or managed a newly amended agreement.  For the fees from all of the coal credit transactions this would amount to a range of $25 million to $75 or $100 million (or more) fee income only, for supplying credit during 2010 and 2011. This income is just for setting up the separate transactions - there would be other continuing fees and interest afterwards.

These estimates suggest taking a closer look specifically at the fee income PNC has gotten for supplying credit to the coal companies.

I think it's important to get these numbers right and use them in public for several reasons:

Credibility Using hard dollars - I think -  would be more likely to draw blood

when challenging a dollar technocrat like Demchak, or Rohr in a different way

To me (as a lawyer), specifics are more persuasive then generalizations (as in the challenge example above)

Understanding why PNC took credit income out of the 2010 MTR policy, (as opposed to project finance and majority MTR operations): it held onto the lucrative part of coal financing

If PNC says we got the numbers wrong we can say: "OK, open your books, we'll get an agreed upon set of facts, and then we can talk about what to do about this."

On a very different front, the research suggests that faith-based challenges might be a powerful way to go after Rohr (devout Catholic, Notre Dame alumnus), and Demchak (Bethany College, a Disciples of Christ school). For Rohr, the basic message could be based on Pope Francis's teachings about environmental stewardship and concern for

the poor, and their clear conflict with MTR.

This might play out for direct action at Trustee meetings and the like at Notre Dame, through alliances with environmental student groups there, other faith-based Catholic environmental groups, or even a direct approach to the Diocese of Pittsburgh or Rohr's parish priest. A Meeting for Worship outside a church while Mass is being said inside would be a highly-charged frame. God - or the Inner Light - is there in both places.

EQAT could use similar tactics if it could ally with student environmental groups where the individuals are directors or trustees: Rohr (Notre Dame), Jordan (Bethany College), and Usher (Pitt).

Sorry to go on and on about money. PNC is, after all, about money. It could a powerful weapon if we can get the ammunition right.Thanks.DW_______________

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Move to Inbox More 7 of 524 Financial informationI have done some digging down into a sample of the documents for PNC’s coal company finance. Here’s what they show. Aggregate numbers in the RAN 2010-2011 list, PNC was contributing a lot of money to coal company financing:

• Contributing to not less than $8.75 billion in credit (typically in revolving lines of credit• Underwriting (as part of syndicates) for $4.2 billion in bond issues for the five companies• PNC underwriting: $92.5 million (plus additional unknown underwriting amounts) for those bond issuesThe available PNC and SEC documents do not show how much PNC made available to the credit financing. However, based on those documents it is possible to analyze how the “credit facilities” (revolving and other credit) were structured, and to estimate some of the income it received. In one example, PNC was "joint lead arranger" for CONSOL’s %1.5 billion May 2011 credit agreement.1. This was a credit transaction running for a finite period, five years, rather than an ongoing investment in CONSOL.2. PNC would actually not provide money to Alpha until Alpha drew down on the available credit. 3. CONSOL was a highly-leveraged borrower which would have to pay premium interest and fees for this credit4. PNC was a joint lead arranger for the transaction. An arranger for this kind of highly-leveraged premium fee transaction would typically collect a fee of between 1% to 5% of the total amount of the credit. 5. In this case that fee would range from $15 million to $75 million. As a joint arranger PNC would share this fee, receiving half: an estimated $7.5 million to $37.5 million, just for helping arranging for the lines of credit. 6. However, before Alpha drew down the money, it would have to pay a (floating, significant profit margin) “commitment fee” just for having the money

available. Interest (also at a floating rate plus a margin) would be due only after drawing down funds.7. Interest and commitment fees would depend on how much CONSOL had previously drawn and prevailing inter-bank rates. PNC and other lenders would receive a margin (the exact total would require further analysis, nut would be significant pre-determined fee income available for profit.8. PNC received similar fees, depending on its role, for each amendment to its credit agreements with the coal companies. Each arrangement was a separate transaction for which it received a new fee.This analysis implies some contrasts with underwriting. When PNC underwrote bond issues, its participation and income had a different structure.In June 2011, Alpha had two bond issues, one $800 million issue and one $800 million issue. PNC participated in the $800 million issue as a junior underwriter for $20 million.1. “Underwriting” is a guarantee that the security (here a bond) will have an investor-buyer (e.g. a pension fund) in the ongoing market for the bonds. The elapsed time from when the bonds issue to investor purchase is usually a day or less.2. Therefore PNC’s involvement (participation in the underwriting guarantee) for this transaction was brief, lasting only a day or less.3. Because Alpha was a risky borrower, the bonds paid 6% annual interest, about 1% more than for similar corporate bonds at that time. 4. The typical investment-underwriting fee (for all underwriters collectively) would probably be about 1% of the bond issue. 5. As a junior underwriter PNC would probably have received about $100,000 for its $20 million underwriting of the $800 million June 2011 Alpha bond issue.6. It would not have received any further fees from the\is bond issue.When PNC provided credit (actual borrowing or committing to make money available) the commitment was for five years. Second, when PNC was bond underwriting, it actually fronting money only for a very period, only a day or so, from when it bought the bonds from the issuer until when it turned around and sold them to investors. Moreover, it got very little income for doing this. For example, Extrapolating, PNC would not have made more than $2 million income for all of its coal company bond underwriting during 2010 and 2011.However, supplying credit is another story. The origination fees and "arranger" fees for a borrower with weak credit - as the coal companies are and were - might amount to from 2% to 5% of each newly amended credit agreement transaction. This comes to a lot of money, for each transaction and in total.

To take another example, PNC was "co-arranger" for Alpha's $1.2 billion May 2010 credit agreement. It would have received at least $5 million, and perhaps several times that much, just for arranging this one line of credit.PNC received similar fees each time a borrower came back to refinance and it arranged or managed a newly amended agreement. For the fees from all of the coal credit transactions this would amount to a range of $25 million to $75 or $100 million (or more) fee income only, for supplying credit during 2010 and 2011. This

income is just for setting up the separate transactions - there would be other continuing fees and interest afterwards.These estimates suggest taking a closer look specifically at the fee income PNC has gotten for supplying credit to the coal companies.

I think it's important to get these numbers right and use them in public for several reasons:• Credibility• Using hard dollars - I think - would be more likely to draw blood when challenging a dollar technocrat like Demchak, or Rohr in a different way• To me (as a lawyer), specifics are more persuasive then generalizations (as in the challenge example above)• Understanding why PNC took credit income out of the 2010 MTR policy, (as opposed to project finance and majority MTR operations): it held onto the lucrative part of coal financingIf PNC says we got the numbers wrong we can say: "OK, open your books, we'll get an agreed upon set of facts, and then we can talk about what to do about this."On a very different front, the research suggests that faith-based challenges might be a powerful way to go after Rohr (devout Catholic, Notre Dame alumnus), and Demchak (Bethany College, a Disciples of Christ school). For Rohr, the basic message could be based on Pope Francis's teachings about environmental stewardship and concern for the poor, and their clear conflict with MTR.

This might play out for direct action at Trustee meetings and the like at Notre Dame, through alliances with environmental student groups there, other faith-based Catholic environmental groups, or even a direct approach to the Diocese of Pittsburgh or Rohr's parish priest. A Meeting for Worship outside a church while Mass is being said inside would be a highly-charged frame. God - or the Inner Light - is there in both places.EQAT could use similar tactics if it could ally with student environmental groups where the individuals are directors or trustees: Rohr (Notre Dame), Jordan (Bethany College), and Usher (Pitt).Sorry to go on and on about money. PNC is, after all, about money. It could a powerful weapon if we can get the ammunition right.