Peabody Energy Corporation · NYSE:BTU
Peabody Energy — BMO Global Metals, Mining & Critical Minerals Conference 2024
44 slides from Peabody Energy's conference presentation, Feb 26, 2024
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 February 26-28, 2024 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 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, 2023. 2 Total Recordable Incident Frequency Rate (‘TRIFR’) equals recordable incidents per 200,000 hours worked; MSHA reported total U.S. TRIFR for 2023 of 2.72. 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 2023. Peabody Serves Broad Global Customer Base 0% 20% 40% India France Indonesia Vietnam Brazil Other Taiwan Australia China Japan U.S. Revenue from Cust
Slide 5: Portfolio Diversity and Financial Strength
5 Portfolio Diversity and Financial Strength Note: Adjusted EBITDA is a non-GAAP financial measure. Refer to the definitions and reconciliations to the nearest GAAP measure in the appendix. (1) Includes $10 million related to dividend declared on February 8, 2024 and $80 million available for additi
Slide 6: Peabody Undervalued Relative to Peers
6 Peabody Undervalued Relative to Peers Source: Latest public company filings, IBES consensus estimates and FactSet market data as of 31-Jan-2024 | Note: Debt calculations for Enterprise Value include unaffected asset retirement obligations and accrued pensions and other post-retirement benefit cost
Slide 7: Financial Strength
Financial Strength Peabody BUILDING BRIGHTER FUTURES qi
Slide 8: Financial Strategy
8 Financial Strategy • Generate cash in excess of liquidity and capital requirements • Repaid all senior secured debt • Pre-funded global reclamation in excess of full estimated cost to complete • $1.0+ billion of available liquidity • Shareholder returns of $471 million based on 2023 Available Free
Slide 9: Shareholder Return Program Announced
9 Shareholder Return Program Announced 2023 Total Shareholder Returns of $471 million Year Ended Dec. 2023 (Dollars in millions) Cash Flow from Operations: $1,035.5 - Cash Flows Used in Investing Activities (342.6) - Distributions to Noncontrolling Interest (59.0) +/- Changes to Restricted Cash and
Slide 10: Centurion Mine Complex: Unique Growth Project
10 Centurion Mine Complex: Unique Growth Project
Slide 11: Centurion Mine Complex: Organic Growth
11 Centurion Mine Complex: Organic Growth Tier one premium hard coking coal mine complex utilizing $1.0 billion of existing infrastructure and equipment Mine life potential of 25+ years through 130Mt integrated mine plan with the anticipated acquisition of a large portion of the Wards Well coal depo
Slide 12: Centurion Mine Complex: World-Class Infrastructure in Place
12 Centurion Mine Complex: 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 villag
Slide 13: Centurion Mine Complex: A Premier, Tier One Premium Hard Coking Coal Mine
13 Centurion Mine Complex: A Premier, Tier One Premium Hard Coking Coal Mine Current Development Area • Targeting first development coal in April 2024 and longwall production in 2026 • Goonyella Middle Seam expected to support five years of longwall production from 20 million tons of reserves • Proj
Slide 14: Centurion: Project Summary – Current Development Area
14 Centurion: Project Summary – Current Development Area Projections Description Mine Goonyella Middle (“GM”) Seam Through Existing Mine Workings (excludes Wards Well) Reserves GM Seam: 20 million tons Product Low Vol Premium Hard Coking Coal Production ~3.9 million saleable tons per year First Coal
Slide 15: Centurion Mine Complex: 2024 Goals
15 Centurion Mine Complex: 2024 Goals Current Development Area • Commission development equipment to commence construction of underground roadways • Continue to onboard operators and maintenance personnel to support underground development and preparation for longwall mining • Complete refurbishment
Slide 16: Centurion: The World's Best Coking Coal
16 Centurion: “The World’s Best Coking Coal” Centurion Quality is Perfect Balance of High Coal Reactivity and Coke Strength Very high coke strength - +68 CSR means highly productive coke Very low ash for premium coking coal - Less than 10% ash, increasingly rare Low sulphur - Supports steel mills
Slide 17: Market Overview
Market Overview Peabody
Slide 18: Supply Side Response Limited Due to High Barriers to Entry
18 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 19: Seaborne Market Dynamics
19 Seaborne Market Dynamics • Fundamental demand profile and supply constraints favor prices staying higher than historical levels • Supply response challenged by lack of capital investment, ever-increasing barriers to entry, and resource depletion • Seaborne thermal coal pricing has reverted toward
Slide 20: Seaborne Met Coal Demand Growing – Supply Response Constrained
20 Seaborne Met Coal Demand Growing – Supply Response Constrained – Organic Centurion Development • China’s rapid urbanization drove met coal consumption growth the last 15 years; India is projected to drive the next ~25 years and was the growth story of 2023 • Australia projected to continue to dom
Slide 21: Seaborne Thermal Coal Demand – New Supply Required
21 Seaborne Thermal Coal Demand – New Supply Required • Demand is projected to exceed installed and probable supply through the 2030s • Operating resources are in decline and could fall well short of forecast demand • China’s growth in ’23 suggests potential for China’s seaborne demand to exceed for
Slide 22: U.S. Electricity Generation Mix Remains Very Reliant on Coal
22 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 (1/01/2023 – 2/12/2024). Each dataset is represented by a boxed area where the central line signifies the median (P50) value, the bottom
Slide 23: U.S. Thermal - Best and Most Diverse Assets
23 U.S. Thermal - Best and Most Diverse Assets • 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 • Peabody’s ILB mines have the ability to meet customer requ
Slide 24: Operations Overview
Operations Overview Peabody BUILDING BRIGHTER FUTURES 24
Slide 25: Seaborne Met Segment Operations Overview
25 Seaborne Met Segment Operations Overview Strategic Advantage: Multiple locations and products, positioned to serve Asia Pacific and Atlantic market Metropolitan Mine Production: 2.2 million tons Reserves: 10 million tons Type: Underground - Longwall Product: Semi-hard (65%), PCI (25%), Thermal (1
Slide 26: Seaborne Thermal Segment Operations Overview
26 Seaborne Thermal Segment Operations Overview Strategic Advantage: High margin operations positioned to serve Asia Pacific market Wilpinjong Mine Production: 12.0 million tons (export and domestic) Reserves: 57 million tons Type: Surface - Dozer/Cast, Truck/Shovel Product: Export (5,000-6,000 kcal
Slide 27: Powder River Basin Segment Operations Overview
27 North Antelope Rochelle Mine (NARM) Production: 62.0 million tons Reserves: 1,364 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 Segment Operations Overview Strategic Advantage: Low-co
Slide 28: Other U.S. Thermal Segment Operations Overview
28 Other U.S. Thermal Segment Operations Overview Strategic Advantage: Located to serve regional customers in high coal utilization regions Bear Run Mine Production: 5.5 million tons Reserves: 72 million tons Type: Surface - Dragline, Dozer/Cast, Truck/Shovel Product: Thermal ~11,000 Btu/lb, 4.5 lbs
Slide 29: Other U.S. Thermal Segment Operations Overview (continued)
29 Other U.S. Thermal Segment Operations Overview (continued) with competitive cost operations and ample reserves / resources Gateway North Mine Production: 2.5 million tons Reserves: 26 million tons Type: Underground – Continuous Miner Product: Thermal ~11,000 Btu/lb, 5.4 lbs. SO2 Rail: UP Location
Slide 30: Sustainability
Sustainability Peabody
Slide 31: Sustainability Objectives
31 Sustainability Objectives • 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 aimed at reducing emi
Slide 32: Opportunity to Create Additional Value with Our Existing Assets
32 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 33: Technology and Collaboration
33 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 34: Committed to Safety and Health as a Way of Life
34 Committed to Safety and Health as a Way of Life • Twentymile Mine won the Sentinels of Safety Award for the second year in a row, recognizing the mine as the safest underground mine in the U.S. • Annual Global Injury Rate - 2022 Lowest Rate in Company History - 2023 Second Lowest Rate in Company
Slide 35: Commitment to Sustainability Shapes Our Strategy for the Future
35 Commitment to Sustainability Shapes Our Strategy for the Future 2,400 2,300 3,230 2021 2022 2023 Acres Reclaimed Gained final bond release approval on over 2,600 acres in 2023
Slide 36: Appendix Materials
Appendix Materials Peabody
Slide 37: Peabody's Business Segments
37 Peabody’s Business Segments Mines Full Year 2023 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) 15.5 $85.94 $48.66 $37.28 $576.8 Seaborne Metallurgical • Shoal C
Slide 38: Seaborne Thermal Life-Extension Opportunities
38 Seaborne Thermal Life-Extension Opportunities • Exploring 4,125 acres immediately adjacent to Wilpinjong • Drilling program on track for completion in Q1 2024 • Two phase extension and approval process • Environmental assessments underway Wilpinjong • Revised mine plan extends current UG mine lif
Slide 39: Seaborne Metallurgical Life-Extension Opportunities
39 Seaborne Metallurgical Life-Extension Opportunities • Moorvale South extension • Targeting to develop 15Mt+ of metallurgical resource • Drilling program completed • Preparing project and environmental assessments CMJV • Commenced drilling program on metallurgical coal exploration lease • Peabody
Slide 40: 2024 Guidance Table
40 2024 Guidance Table Certain forward-looking measures and metrics presented are non-GAAP financial and operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without
Slide 41: Reconciliation of Non-GAAP Measures
41 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 44. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Tons Sold (In Mill ions) Seaborne Thermal 15.5 Seaborne Metallurgical 6.9 Powder River Basin 87.2 Other U.S. Thermal 16.2 Total U.S.
Slide 42: Reconciliation of Non-GAAP Measures
42 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 44. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Reconcil iation of Non-GAAP Financial Measures (In Mill ions) Income from Continuing Operations, Net of Income Taxes 347.4$ 1,317.4$
Slide 43: Reconciliation of Non-GAAP Measures
43 Reconciliation of Non-GAAP Measures Note: Refer to definitions and footnotes on slide 44. Year Ended Year Ended Year Ended Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Segment Free Cash Flow (In Mill ions) Seaborne Thermal Adjusted EBITDA 353.1$ 647.6$ 576.8$ Less: Segment additions to property, pla
Slide 44: Reconciliation of Non-GAAP Measures: Definitions
44 Reconciliation of Non-GAAP Measures: Definitions (1) (2) (3) (4) (5) Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not b
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