Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Jefferies Industrials Conference 2023
37 slides from Peabody Energy's conference presentation, Sep 6, 2023
Slide 1: Building Brighter Futures - Jefferies Industrials Conference
B U I L D I N G B R I G H T E R F U T U R E S September 6/7, 2023 Jefferies Industrials Conference
Slide 2: Disclosure Regarding Forward-Looking Statements
2 Disclosure Regarding Forward-Looking Statements This presentation 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 va
Slide 3: Peabody Quick Facts
3 Peabody Quick Facts1 Confidential 1 All statistics are for the year ended December 31, 2022. 2 Total Recordable Incident Frequency Rate (‘TRIFR’) equals recordable incidents per 200,000 hours worked; MSHA reported total U.S. TRIFR for 2022 of 2.77 3 Adjusted EBITDA is a non-GAAP financial measure.
Slide 4: Peabody Serves Broad Global Customer Base
4 Note: The company attributes revenue to individual regions based on the location of the physical delivery of the coal. Revenue breakdown for FY 2022. Peabody Serves Broad Global Customer Base 0% 20% 40% France Chile Belgium Indonesia South Korea Brazil Vietnam India Australia Taiwan Other Japan U.
Slide 5: Peabody's Business Segments
5 Peabody’s Business Segments Mines Full Year 2022 Seaborne Thermal • Wilpinjong • Wambo Underground • Wambo OC JV • Tons Sold (millions) • Revenue per Ton • Costs per Ton • Adjusted EBITDA Margin per Ton • Adjusted EBITDA (millions) 15.6 $86.07 $44.65 $41.42 $647.6 Seaborne Metallurgical • Shoal Cr
Slide 6: Financial Strength
Financial Strength Peabody BUILDING BRIGHTER FUTURES 6
Slide 7: Financial Strategy
7 Financial Strategy • Generate cash in excess of liquidity and capital requirements • Eliminated all senior secured debt • Pre-funded all final reclamation at full estimated cost to defease liability • Other debt-like obligations include legacy retiree healthcare, pension and black lung liabilities
Slide 8: Financial Strength from Portfolio Diversity
8 Financial Strength from Portfolio Diversity Note: Adjusted EBITDA is a non-GAAP financial measure. Refer to the definitions and reconciliations to the nearest GAAP measure in the appendix. H1 2023 Adjusted EBITDA ($ in millions) Seaborne Thermal $362 Seaborne Metallurgical $193 PRB $62 Other US Th
Slide 9: Shareholder Return Program
9 Shareholder Return Program Quarter Ended Six Months Ended Jun. 2023 Jun. 2023 (Dollars in millions) Cash Flow from Operations: $ 353.4 $ 739.7 - Cash Flows Used in Investing Activities (61.5) (120.0) - Distributions to Noncontrolling Interest — (22.8) +/- Changes to Restricted Cash and Collateral
Slide 10: Balance Sheet Strength
10 Balance Sheet Strength $1,563 $1,143 $320 $320 $709 $954 $1,307 $1,081 $187 $925 2020 2021 2022 June-23 $24$17 Funded Debt and Cash Balances ($ in millions) Note: Reflects principal amount of funded debt outstanding at end of period, excluding finance lease obligations and debt issuance costs. El
Slide 11: Market Overview
Market Overview Peabody BUILDING BRIGHTER FUTURES 1
Slide 12: Supply Side Response Limited Due to High Barriers to Entry
12 Supply Side Response Limited Due to High Barriers to Entry Coal Supply Development Constraints Reduced Capital Investment NGO Activity Political Environment Increased Permit Scrutiny Labor Shortage Increased Regulation
Slide 13: Seaborne Market Dynamics
13 Seaborne Market Dynamics • Fundamental demand profile and supply constraints favor prices staying higher than historical levels • Supply response challenged by lack of capital investment and ever-increasing barriers to entry • Recent price action reflects a reduction in inventories following a wa
Slide 14: Seaborne Met Coal Demand Growing – Supply Response Constrained
14 Seaborne Met Coal Demand Growing – Supply Response Constrained – Organic N. Goonyella Development • China’s rapid urbanization drove met coal consumption growth the last 15 years; India is projected to drive the next ~25 years • Australia projected to continue to dominate seaborne met coal supply
Slide 15: Thermal Coal Leads all Generation Sources
15 Thermal Coal Leads all Generation Sources Global Electricity Demand Continues to Grow Source: S&P Capital IQ World Electric Power Plants Mar 2023. • Global electricity demand expected to grow by 2.9% between 2020 and 2025 • Coal is forecasted to remain the largest source of electricity generation
Slide 16: U.S. Electricity Generation Mix Remains Very Reliant on Coal
16 MISO SPP ERCOT PJM U.S. Electricity Generation Mix Remains Very Reliant on Coal Generation Source: Graph based on EIA, S&P Capital IQ , ISOs and Peabody analysis (8/20/2022 – 8/19/2023). Each dataset is represented by a boxed area where the central line signifies the median (P50) value, the botto
Slide 17: U.S. Thermal - Best and Most Diverse Assets in the Right Regions
17 U.S. Thermal - Best and Most Diverse Assets in the Right Regions • Peabody is the largest producer in the PRB and is committed to serve customers’ long-term needs – a differentiator • Peabody has a unique ability to supply low-cost products out of the PRB with various qualities ranging from 8,200
Slide 18: Business Operations
Business Operations Peabody BUILDING BRIGHTER FUTURES 18
Slide 19: Seaborne Met Business Segment Operations Overview
19 Seaborne Met Business Segment Operations Overview Strategic Advantage: Multiple locations and products, positioned to serve Asia Pacific and Atlantic market Metropolitan Mine Production: 1.8 million tons Reserves: 10 million tons Type: Underground - Longwall Product: Semi-hard (65%), PCI (25%), T
Slide 20: Seaborne Thermal Business Segment Operations Overview
20 Seaborne Thermal Business Segment Operations Overview Strategic Advantage: High margin operations positioned to serve Asia Pacific market Wilpinjong Mine Production: 12.1 million tons (export and domestic) Reserves: 67 million tons Type: Surface – Dozer/Cast, Truck/Shovel Product: Export (5,000-6
Slide 21: PRB Business Segment Operations Overview
21 North Antelope Rochelle Mine (NARM) Production: 60.4 million tons Reserves: 1,423 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Sub-Bit Thermal (~8,800 BTU/lb, <0.50 lbs SO2) Rail: BNSF and UP Location: Wyoming PRB Business Segment Operations Overview Strategic Advantag
Slide 22: Other U.S. Thermal Business Segment Operations Overview
22 Other U.S. Thermal Business Segment Operations Overview Strategic Advantage: Located to serve regional customers in high coal utilization regions Bear Run Mine Production: 6.7 million tons Reserves: 136 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Thermal ~11,000 Btu/l
Slide 23: Other U.S. Thermal Operations Overview (continued)
23 Other U.S. Thermal Business Segment Operations Overview (continued) with competitive cost operations and ample reserves / resources Gateway North Mine Production: 2.4 million tons Reserves: 43 million tons Type: Underground – Continuous Miner Product: Thermal ~11,000 Btu/lb, 5.4 lbs. SO2 Rail: UP
Slide 24: Organic Development
Organic Development Peabody BUILDING BRIGHTER FUTURES 24
Slide 25: North Goonyella Redevelopment
25 North Goonyella Redevelopment World-Class Infrastructure in Place • Brownfield redevelopment benefits from significant infrastructure with replacement cost estimated at more than $1 billion • Infrastructure includes: Coal Handling Prep Plant (CHPP) with successful history Dedicated accommodation
Slide 26: Unique Organic Growth Opportunity: North Goonyella Redevelopment
26 Unique Organic Growth Opportunity: North Goonyella Redevelopment Takeaways Redevelopment utilizing existing infrastructure and equipment in place Premium grade hard coking coal, considered the cornerstone of coking coal feedstocks globally Proximity advantage to supply India and wider Asia. Regio
Slide 27: North Goonyella Redevelopment Project Stages
27 • Stage 1 capital of $140 million anticipated to be completed in early 2024 • Stage 2 capital of $240 million, over two years, to complete development and allow longwall mining of 20 million tons beginning in 2026 • The only approval needed from regulators is to re-enter Zone B • Various options
Slide 28: Seaborne Thermal Life-Extension Opportunities
28 Seaborne Thermal Life-Extension Opportunities • Targeting to prove 50Mt+ of reserves in area immediately adjacent to Wilpinjong • Extensive drilling program in progress throughout 2023 • Environmental baseline fieldwork surveys underway Wilpinjong • Recently re-oriented mine plan extending curren
Slide 29: ESG Focus
ESG Focus Peabody
Slide 30: Emphasis on ESG for Stakeholder Engagement
30 Emphasis on ESG for Stakeholder Engagement • Responsible coal mining, reducing impact from operations and making best use of natural resources while creating economic value • Targets for greenhouse gas reduction and land reclamation • Collaborating with stakeholders on a pipeline of projects aime
Slide 31: Opportunity to Create Additional Value with Our Existing Assets
31 Opportunity to Create Additional Value with Our Existing Assets Peabody Development • Land: 175,000+ surface acres owned in U.S. - Opportunity: develop solar energy and storage projects such as R3 Renewables - Potential for carbon capture and underground storage • Water: 38 million gallons manage
Slide 32: Technology and Collaboration
32 Technology and Collaboration • We support research and key initiatives in low emissions projects and partnerships such as: - Low Emission Technology Australia (LETA) - Carbon Utilization Research Council (CURC) • University of Wyoming School of Energy Resources - Peabody Advanced Coal Technology
Slide 33: Appendix Materials
Appendix Materials Peabody
Slide 34: Segment Performance
34 Segment Performance Seaborne Thermal 15 - 16 11 $87.00 $50.00 - $55.00 9.5 - 10.5 5.5 $148.85 NA ~5.5 5.5 $25.20 NA 6.5 - 7.5 3.5 $202.00 $120.00 - $130.00 80 - 85 91 $13.63 $11.50 - $12.25 16.5 - 17.5 18 $52.12 $38.00 - $42.00 2023 Full Year $90 $200 $325 $65 - $75 Seaborne Metallurgical PRB and
Slide 35: Reconciliation of Non-GAAP Measures
35 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 37. Year Ended Dec. 31, 2022 H1 2023 Tons Sold (In Mill ions) Seaborne Thermal 15.6 7.6 Seaborne Metallurgical 6.6 3.3 Powder River Basin 82.6 40.9 Other U.S. Thermal 18.4 8.3 Total U.S. Thermal 101.0 49.2 Corpo
Slide 36: Reconciliation of Non-GAAP Measures
36 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 37. Year Ended Dec. 31, 2022 H1 2023 Reconcil iation of Non-GAAP Financial Measures (In Mill ions) Income from Continuing Operations, Net of Income Taxes 1,317.4$ 488.2$ Depreciation, Depletion and Amortization
Slide 37: Reconciliation of Non-GAAP Measures: Definitions
37 Reconciliation of Non-GAAP Measures: Definitions (1) Year Ended Dec. 31, 2022 H1 2023 Net unrealized (loss) gain (35.8)$ 159.0$ (2) (3) (4) Year Ended Dec. 31, 2022 H1 2023 Tons sold 1.6 0.6 7.4$ 3.3$ Net interest expense - - Income tax provision 55.3 2.6 (5) (6) Adjusted EBITDA is defined as inc
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