Peabody Energy Corporation · NYSE:BTU
Peabody Energy — BMO Global Metals, Mining & Critical Minerals Conference 2022
40 slides from Peabody Energy's conference presentation, Mar 1, 2022
Slide 1: Coal Producer of Choice in a Net-Zero Emissions Focused World
B U I L D I N G B R I G H T E R F U T U R E S Coal Producer of Choice in a Net-Zero Emissions Focused World Jim Grech, President & CEO | March 1, 2022
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: 2021 Peabody Quick Facts
3 2021 Peabody Quick Facts(1) 1. All statistics for the year ended December 31, 2021. 2. Total Recordable Incident Frequency Rate (“TRIFR”) equals recordable incidents per 200,000 hours worked; MSHA reported total U.S. TRIFR for 2020 of 2.69. 3. Adjusted EBITDA is a non-GAAP financial measure. Refer
Slide 4: Foundational Building Blocks For The Coal Producer of Choice
4 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 5: Foundational Building Blocks For The Coal Producer of Choice
5 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 6: Financial Strength from Portfolio Diversity
6 Financial Strength from Portfolio Diversity • Adjusted EBITDA of $917 million in 2021 with $444 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 deli
Slide 7: Foundational Building Blocks For The Coal Producer of Choice
7 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 8: Peabody Snapshot
8 • PRB Thermal • Other US Thermal Mining Operations • Seaborne Met • Seaborne Thermal Peabody Snapshot Surface Mine Underground Mine
Slide 9: Portfolio Diversity Makes Peabody Unique
9 Portfolio Diversity Makes Peabody Unique Coal delivered primarily to Asia Pacific market Australian operations anchored by low cost Wilpinjong Mine Consistently high margins throughout price cycle Adjusted EBITDA of $353 million in 2021 Seaborne Thermal Seaborne Met U.S. Thermal Coal delivered to
Slide 10: Foundational Building Blocks For The Coal Producer of Choice
10 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 11: Operational Excellence is the Foundation of Our Operations
11 Operational Excellence is the Foundation of Our Operations • Commitment to Safe, Sustainable operations drives all activities – 1st to achieve CoreSafety Certification – Award winning Mine Rescue teams – Sentinels of Safety Award 2017 & 2018 – 1.18 TRIFR(1) vs industry average of 2.69 • Operate c
Slide 12: Foundational Building Blocks For The Coal Producer of Choice
12 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 13: Emphasis on ESG to Create Long-Term Stakeholder Value
13 Emphasis on ESG to Create Long-Term Stakeholder Value • Responsible coal mining, reducing impact from operations and making best use of natural resources • Targets for greenhouse gas reduction, water conservation, waste management and land reclamation • Collaborating with stakeholders on a pipeli
Slide 14: Commitment to Sustainability and ESG Goals as the Coal Producer of Choice
14 Commitment to Sustainability and ESG Goals as the “Coal Producer of Choice” • Our customers must balance the need for a timely transition with the continued need for coal generation to supply reliable, low-cost energy • We are embracing the world’s transition to net- zero emissions as an opportun
Slide 15: Foundational Building Blocks For The Coal Producer of Choice
15 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 16: Building on Current Strength to Enhance Financial Resiliency
16 Building on Current Strength to Enhance Financial Resiliency • Positioning balance sheet to be resilient across market cycles through debt and other liability reductions • Reduced senior secured debt by $420 million or 25% in 2021 • Reduced total liabilities by ~$600 million since 2019 – a 22% re
Slide 17: Foundational Building Blocks For The Coal Producer of Choice
17 Foundational Building Blocks For The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Operational Excellence Financial Strength ESG Champion The Coal Producer of Choice Diversity of Products
Slide 18: Global Demand for Coal – Strong Economies Need Affordable Energy
18 Global Demand for Coal – Strong Economies Need Affordable Energy • Demand rebound in mid- 2021 to fuel global economic recovery • Developing Asian countries continue to increase coal consumption • While western countries have begun transition to net- zero emissions • However, this is costly, and
Slide 19: Thermal and Met Coal Price Performance
19 -50% 50% 150% 250% Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Thermal Coal Price Performance Thermal - NEWC (prompt) Thermal - PRB (prompt) Market Dynamics • Robust price indices and demand for each of our market segments • Supply challenges coincide with period of elevated demand • High barriers to entr
Slide 20: Organic Growth Opportunities to Accomplish Net-Zero Emissions Aspiration
20 Opportunities to create additional value with our existing assets Organic Growth Opportunities to Accomplish Net-Zero Emissions Aspiration 1. Measured and Indicated Resources per Peabody 10-K for the year ended December 31, 2021. • Met Coal Resources: 724 million tons of resources(1) - Opportunit
Slide 21: ESG Pipeline Highlight: R3 Renewables
21 ESG Pipeline Highlight: R3 Renewables Reclaim, Reimagine, Repower • 50% ownership in R3 Renewables to develop utility scale projects on reclaimed mining properties • Creates value while utilizing Peabody’s core competencies in environmental management and permitting, in addition to monetizing exi
Slide 22: The Role of Technology in the World's Net-Zero Transition
22 The Role of Technology in the World’s Net-Zero Transition • Deployment of technology is imperative to reaching a sustainable, net-zero emissions future • Proven technology exists today to eliminate carbon emissions, including: - High-efficiency, low-emissions coal-fueled generation (HELE), - CCS
Slide 23: Technology Development
23 Technology Development • 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 - Peabody Adva
Slide 24: Coal Producer of Choice – Building Brighter Futures
24 Coal Producer of Choice – Building Brighter Futures Providing essential products for the production of affordable, reliable energy and steel Positioned to be the Coal Producer of Choice • Resilient in all markets • Growing with our stakeholders Remain committed to coal as foundation for the futur
Slide 25: Thank You!
B U I L D I N G B R I G H T E R F U T U R E S Thank You!
Slide 26: Appendix Materials
Appendix Materials Peabody
Slide 27: Investment Highlights
27 Investment Highlights Financial strength from strong projected cash flows and liability reductions Cost competitive assets, resilient across markets Diversified portfolio of assets, makes Peabody unique amongst peers and provides competitive advantage Strategically positioned to serve growing Asi
Slide 28: Peabody's Business Segments
28 Peabody’s Business Segments Mines Full Year 2021 Seaborne Thermal • Wilpinjong • Wambo Underground • Wambo OC JV • Tons Sold (millions) • Revenues per Ton • Costs per Ton • Adjusted EBITDA Margin per Ton 17.3 $54.09 $33.64 $20.45 Seaborne Metallurgical • Shoal Creek • Metropolitan • Coppabella /
Slide 29: Review of Recent Operating Initiatives
29 Review of Recent Operating Initiatives Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal • Completed development at Wilpinjong Extension and Wambo Open-Cut • Completed ramp up of Metropolitan longwall production • Ramping up longwall production at Shoal Creek • Advanci
Slide 30: Seaborne Thermal: Tier One Assets with Strong Margins
30 Seaborne Thermal: Tier One Assets with Strong Margins • Wilpinjong is one of Australia’s lowest-cost coal mining operations with approximately six million tons of annual export volumes • Wambo UG and OC achieve Newcastle benchmark pricing while Wilpinjong export prices at a discount to the API5 •
Slide 31: Seaborne Metallurgical: Delivering Increased Volumes into Robust Markets
31 Seaborne Metallurgical: Delivering Increased Volumes into Robust Markets • Improvement initiatives at met operations for sustainability across market cycles • Shoal Creek ramping up production in H1 2022 • Moorvale South at CMJV, expected production in mid- 22 • Middlemount JV provides additional
Slide 32: Powder River Basin: Operates as a Complex to Maximize Returns
32 Powder River Basin: Operates as a Complex to Maximize Returns • Three operations provide diversity of products and sourcing options • Lowest cost producer in the basin; most competitive against natural gas • Focused on multi-year sales agreements and expanding margins • Incremental 2022 productio
Slide 33: Other U.S. Thermal: Supplies Regional Demand with Strong Margins
33 $47 $39 $41 $43.50 $34 $30 $31 $32.50 28 Mt 18 Mt 17 Mt 18 - 19 Mt 2019 2020 2021 2022E Other U.S. Thermal Volumes, Revenues per Ton and Costs per Ton Illinois Basin Kayenta El Segundo Twentymile Revenues per Ton Costs per Ton Other U.S. Thermal: Supplies Regional Demand with Strong Margins • Ram
Slide 34: Impact of Convertible Offering on Pro Forma Debt
34 Impact of Convertible Offering on Pro Forma Debt $320 $323 $78 $206 $194 $63 $23 $257 2022 2023 2024 2025 2026 2027 2028 Pro Forma Debt Maturity Profile ($ in millions) (1) $275 million convertible principal amount offering size plus an additional $45mm greenshoe, prior to any fees and expenses.
Slide 35: Reconciliation of Non-GAAP Measures
2 35 Reconciliation of Non- GAAP Measures
Slide 36: Reconciliation of Non-GAAP Measures
36 Reconciliation of Non-GAAP Measures Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Dec. 31, 2019 Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2021 Tons Sold (In Mill ions) Seaborne Thermal Mining Operations 19.5 19.0 4.1
Slide 37: Reconciliation of Non-GAAP Measures
37 Reconciliation of Non-GAAP Measures Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Dec. 31, 2019 Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2021 Reconciliation of Non-GAAP Financial Measures (In Mill ions) (Loss) Incom
Slide 38: Reconciliation of Non-GAAP Measures
38 Reconciliation of Non-GAAP Measures Dec. 31, 2021 Reconciliation of Non-GAAP Financial Measures (In Millions) Current Portion of Long-Term Debt 59.6$ Long-Term Debt, Less Current Portion 1,078.2 Less: Cash and Cash Equivalents (954.3) Net Debt (9) 183.5$ Calculation of Non-GAAP Financial Measures
Slide 39: Reconciliation of Non-GAAP Measures: Definitions
39 Reconciliation of Non-GAAP Measures: Definitions (1) Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Dec. 31, 2019 Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2021 Net unrealized gain (loss) 50.6$ (34.5)$ (4.9)$ (19.9)$
Slide 40: Reconciliation of Non-GAAP Measures: Definitions
40 Reconciliation of Non-GAAP Measures: Definitions (5) (6) (7) (8) (9) (10) (11) We recorded a $125.0 million insurance recovery during the year ended December 31, 2019 related to losses incurred at our North Goonyella Mine. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to
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