Peabody Energy Corporation · NYSE:BTU
Peabody Energy — J.P. Morgan High Yield & Leveraged Finance Conference 2022
31 slides from Peabody Energy's conference presentation, Feb 28, 2022
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 J.P. Morgan High Yield & Leveraged Finance Conference Mark Spurbeck, Chief Financial Officer | February 28, 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: The Coal Producer of Choice
4 The Coal Producer of Choice Resilient in All Cycles Growing with Stakeholders Diversity of Products Financial Strength Operational Excellence ESG Champion The Coal Producer of Choice
Slide 5: Financial Strength
5 Financial Strength • 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 deliver positive cash flows •
Slide 6: Peabody Snapshot
6 • PRB Thermal • Other US Thermal Mining Operations • Seaborne Met • Seaborne Thermal Peabody Snapshot Surface Mine Underground Mine
Slide 7: Portfolio Diversity Makes Peabody Unique
7 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 8: Operational Excellence
8 Operational Excellence • 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 cost-competitive mines by driving oper
Slide 9: Seaborne Thermal: Tier One Assets with Strong Margins
9 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 10: Seaborne Metallurgical: Delivering Increased Volumes into Robust Markets
10 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 11: Powder River Basin: Operates as a Complex to Maximize Returns
11 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 12: Other U.S. Thermal: Supplies Regional Demand with Strong Margins
12 $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 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
14 Commitment to Sustainability and ESG Goals as the “Coal Producer of Choice” • We are embracing the world’s transition to net-zero emissions as an opportunity to create further value for our stakeholders by reducing emissions at our operations and developing ways to support our customers’ ESG comm
Slide 15: Organic Growth Opportunities to Accomplish Net-Zero Emissions Aspiration
15 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 16: Global Demand for Coal – Strong Economies Need Affordable Energy
16 Global Demand for Coal – Strong Economies Need Affordable Energy • Our customers must balance transition to renewables with the continued need for coal generation to supply reliable, low-cost energy • While western countries have begun transition to net-zero emissions, this is costly, and renewab
Slide 17: Thermal and Met Coal Price Performance
17 -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 18: Building on Current Strength to Enhance Financial Resiliency
18 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 19: Impact of Convertible Offering on Pro Forma Debt
19 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 20: Coal Producer of Choice – Building Brighter Futures
20 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 21: 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 22: Appendix Materials
Appendix Materials Peabody
Slide 23: Investment Highlights
23 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 24: Peabody's Business Segments
24 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 $20.45 Seaborne Metallurgical • Shoal Creek • Metropolitan • Coppabella /
Slide 25: Review of Recent Operating Initiatives
25 Review of Recent Operating Initiatives Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal • Completed development at Wilpinjong Extension and Wambo Open-Cut • Completed ramp up of Metropolitan longwall production • Ramping up longwall production at Shoal Creek • Advanci
Slide 26: 2022 Guidance Table
26 2022 Guidance Table Certain forward-looking measures and metrics presented are non-GAAP financial and operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without
Slide 27: Reconciliation of Non-GAAP Measures
27 Reconciliation of Non-GAAP Measures Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Dec. 31, 2019 Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2021 Tons Sold (In Mill ions) Seaborne Thermal Mining Operations 19.5 19.0 4.1
Slide 28: Reconciliation of Non-GAAP Measures
28 Reconciliation of Non-GAAP Measures Year Ended Year Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Dec. 31, 2019 Dec. 31, 2020 Mar. 31, 2021 Jun. 30, 2021 Sept. 30, 2021 Dec. 31, 2021 Dec. 31, 2021 Reconciliation of Non-GAAP Financial Measures (In Mill ions) (Loss) Incom
Slide 29: Reconciliation of Non-GAAP Measures
29 Reconciliation of Non-GAAP Measures Dec. 31, 2021 Reconciliation of Non-GAAP Financial Measures (In Millions) Current Portion of Long-Term Debt 59.6$ 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 30: Reconciliation of Non-GAAP Measures: Definitions
30 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 31: Reconciliation of Non-GAAP Measures: Definitions
31 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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