Peabody Energy Corporation · NYSE:BTU
Peabody Energy — BMO Global Metals, Mining & Critical Minerals Conference 2023
36 slides from Peabody Energy's conference presentation, Feb 27, 2023
Slide 1: Building Brighter Futures
B U I L D I N G B R I G H T E R F U T U R E S Jim Grech, President & CEO | February 28, 2023 BMO Global Metals, Mining & Critical Minerals Conference
Slide 2: Disclosure Regarding Forward-Looking Statements
2 Disclosure Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of applicable 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
Slide 3: 2022 Peabody Quick Facts
3 2022 Peabody Quick Facts(1) 1. All statistics 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. Refer
Slide 4: Peabody Snapshot
4 • PRB Thermal • Other US Thermal Mining Operations • Seaborne Met • Seaborne Thermal Peabody Snapshot Surface Mine Underground Mine
Slide 5: Peabody's Three Strategies for Value Creation
5 Peabody’s Three Strategies for Value Creation Continuing to reweight investments toward greater seaborne thermal and metallurgical coal to capture higher growth Asian demand Optimizing our lowest-cost and highest-margin U.S. thermal assets to maximize cash generation De-risking our balance sheet a
Slide 6: Seaborne Coal Demand Growing in Key Countries
6 Seaborne Coal Demand Growing in Key Countries • ASEAN and Indian coal markets expected to continue to grow in coming years for both seaborne met and thermal demand • Peabody’s existing coal portfolio positioned to capture value from demand growth Global Seaborne Met and Thermal Coal Demand Source:
Slide 7: Long Term – The World Needs Steel, Steel Needs Metallurgical Coal
7 Long Term – The World Needs Steel, Steel Needs Metallurgical Coal • In 2020, the number of buildings in the world over 200 meters high was 1,725 – a 557% increase since 2000 • The higher the building, the higher the steel intensity required • Steel is crucial for rail transport • A wind turbine is
Slide 8: Seaborne Market Dynamics
8 Seaborne Market Dynamics • Russia / Ukraine conflict has redefined trade flows • Supply response challenged by lack of capital investment and ever-increasing barriers to entry • Fundamental demand profile and supply constraints favor prices staying higher than historical levels • Positioned to ben
Slide 9: Supply Side Response Limited Due to High Barriers to Entry
9 Supply Side Response Limited Due to High Barriers to Entry Coal Supply Development Constraints Reduced Financing Participants NGO Activity Political Environment Increased Permit Scrutiny Labor Shortage Increased Regulation
Slide 10: Portfolio Diversity
Portfolio Diversity Peabody BUILDING BRIGHTER FUTURES 10
Slide 11: Peabody's Business Segments
11 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 15.6 $86.07 $44.65 $41.42 Seaborne Metallurgical • Shoal Creek • Metropolitan • Coppabella / M
Slide 12: Financial Strength from Portfolio Diversity
12 Financial Strength from Portfolio Diversity • Adjusted EBITDA of $1.8 billion in 2022 with $501 million in the fourth quarter driven by strong seaborne market pricing • Exposure to growing seaborne markets provides outsized margins in favorable market conditions • U.S. operations consistently del
Slide 13: Portfolio Diversity Makes Peabody Unique
13 Seaborne Met Coal delivered to Asia Pacific and Atlantic markets Diversity of supply and sourcing from U.S. and Australia Positioned to benefit across price cycles with sustainable cost structure Adjusted EBITDA of $782 million in 2022 Portfolio Diversity Makes Peabody Unique Coal delivered prima
Slide 14: Seaborne Met Coal Demand Growing – Supply Response Constrained
14 68 92 148 101 95 67 42 38 30 15 17 17 19 29 64 80 63 300 340 354 2022 2030 2050 India Japan/Korea/Taiwan China Brazil Vietnam Others Seaborne Met Coal Demand Growing – Supply Response Constrained – Portfolio Well-Positioned • China’s rapid urbanization drove met coal consumption growth the last 1
Slide 15: Seaborne Met Business Segment Operations Overview
15 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 16: Unique Organic Growth Opportunity: North Goonyella Redevelopment
16 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 17: North Goonyella Redevelopment: World-Class Infrastructure in Place
17 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 18: Thermal Coal Demand
18 Thermal Coal Demand • ASEAN and Indian coal markets expected to continue to grow in coming years for seaborne thermal demand • Drivers of market volatility are energy security issues driven by Russia / Ukraine conflict • Peabody’s existing coal portfolio well positioned to deliver into growth reg
Slide 19: Thermal Coal Lead all Generation Sources
19 Thermal Coal Lead all Generation Sources Global Electricity Demand Continues to Grow 40% 35% 28% 24% 2%10% 16% 21% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2015 2020 2025 World Electricity Generation (TWh) Coal Natural Gas Oil Nuclear Hydro Renewables Source: BP Energy Outlook, S&P Capit
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: Seaborne Thermal Life-Extension Opportunities
21 Seaborne Thermal Life-Extension Opportunities • Targeting to prove up 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 cur
Slide 22: U.S. Thermal - Best and Most Diverse Assets in the Right Regions
22 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 23: PRB Business Segment Operations Overview
23 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 24: Other U.S. Thermal Business Segment Operations Overview
24 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 25: Other U.S. Thermal Operations Overview (continued)
25 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 26: Opportunity to Create Additional Value with Our Existing Assets
26 Opportunity to Create Additional Value with Our Existing Assets Peabody Development 1. Measured and Indicated Resources per Peabody 10-K for the year ended December 31, 2022. • Met Coal Resources: 720 million tons of resources(1) - Opportunity: reweight investments towards met coal developments s
Slide 27: Technology and Collaboration
27 Technology and Collaboration • We support research and key initiatives in low emissions projects and partnerships such as: - Low Emission Technology Australia (LETA) - Carbon Capture Coalition - Carbon Utilization Research Council (CURC) • University of Wyoming School of Energy Resources - Peabod
Slide 28: Financial Strategy
28 Financial Strategy • Generate cash in excess of liquidity and capital requirements • Eliminated all senior secured debt in 2022 • Establishing pre-funded trust for all final reclamation at full estimated cost to defease liability • Other debt-like obligations include legacy retiree healthcare and
Slide 29: Returning Value to Shareholders
29 Returning Value to Shareholders • A de-risked balance sheet and strong cash flow projections allow us to deliver shareholder returns AND reinvest in the portfolio with high- return projects • Developing shareholder return program - Proportionate to free cash flow generation - Flexible to include
Slide 30: A Compelling Opportunity
30 A Compelling Opportunity Our global scale and diversification enable us to target the most attractive market segments Exposed to growing global demand through our met and thermal seaborne segments, while our low-cost US thermal segments produce strong cash flows at attractive margins throughout m
Slide 31: Questions?
Questions? Peabody BUILDING BRIGHTER FUTURES 31
Slide 32: Appendix Materials
Appendix Materials Peabody
Slide 33: 2023 Guidance Table
33 2023 Guidance Table Certain forward-looking measures and metrics presented are non-GAAP financial and operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without
Slide 34: Reconciliation of Non-GAAP Measures
34 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 36. Quarter Ended Year Ended Dec. 31, 2022 Dec. 31, 2022 Tons Sold (In Mill ions) Seaborne Thermal Mining Operations 4.1 15.6 Seaborne Metallurgical Mining Operations 2.0 6.6 Powder River Basin Mining Operations
Slide 35: Reconciliation of Non-GAAP Measures
35 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 36. Quarter Ended Year Ended Dec. 31, 2022 Dec. 31, 2022 Reconcil iation of Non-GAAP Financial Measures (In Mill ions) Income from Continuing Operations, Net of Income Taxes 641.5$ 1,317.4$ Depreciation, Depleti
Slide 36: Reconciliation of Non-GAAP Measures: Definitions
36 Reconciliation of Non-GAAP Measures: Definitions (1) Quarter Ended Year Ended Dec. 31, 2022 Dec. 31, 2022 Net unrealized gain (loss) 199.3$ (35.8)$ (2) (3) (4) Quarter Ended Year Ended Dec. 31, 2022 Dec. 31, 2022 Tons sold 0.4 1.6 1.7$ 7.4$ Net interest expense (0.2) - Income tax provision 4.8 55
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