ST. LOUIS, June 30, 2015 /PRNewswire/ -- Peabody Energy
(NYSE: BTU) today announced that second quarter 2015 Adjusted
EBITDA and Adjusted EPS are now expected to be below the original
targeted range due to weather-related shipment issues in the
Southern Powder River Basin and lower seaborne coal pricing.
- Peabody expects a timing-related impact of approximately
$40 million in the second quarter as
a result of a series of substantial rain and flash flooding events
in the Southern Powder River Basin primarily in June that reduced
production by 5.0 to 5.5 million tons. Peabody has largely resumed
normal production levels, and is scheduling to make up the deferred
shipments in the third and fourth quarters.
- The company was also impacted by approximately $20 million from the effects of lower pricing on
Australian metallurgical coal, with approximately half related to
spot coal sales during the quarter and half related to reduced coal
inventory valuation due to benchmark third quarter settlements.
Spot metallurgical coal prices declined 15 percent during the
quarter before increasing in recent weeks.
Regarding other factors expected to affect second quarter
results, in early June Peabody
announced a reduction of approximately 250 positions, or 25 percent
of its corporate and regional staff, with expected annual savings
of $40 to $45 million when fully
implemented later this year.
In addition, the company has initiated actions to reduce
approximately 250 employee and contractor positions at multiple
metallurgical and thermal coal mines in Australia. These actions are aimed at
increasing productivity, lowering costs and improving cash flows,
while reducing metallurgical coal volumes for sales when markets
improve. The company plans to provide additional details
regarding the future benefits of these programs and any targets in
its second quarter earnings release scheduled for Tuesday, July 28.
Peabody expects to incur an estimated $20
to $25 million in second quarter 2015 charges related to
these activities, and these charges were not included in the
company's previous financial targets. Approximately half of the
charges are associated with the previously announced corporate and
regional staff reductions, with the other half related to
Australia mine site-related
workforce reductions.
These actions are part of a comprehensive approach the company
is taking to improve the business across four key areas of
management emphasis: operational, SG&A, financial and
portfolio.
Peabody Energy is the world's largest private-sector coal
company and a global leader in sustainable mining, energy access
and clean coal solutions. The company serves metallurgical and
thermal coal customers in more than 25 countries on six continents.
For further information, visit PeabodyEnergy.com and
AdvancedEnergyForLife.com.
Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
The company uses words such as "anticipate," "believe," "expect,"
"may," "forecast," "project," "should," "estimate," "plan,"
"outlook," "target," "likely," "will," "to be" or other similar
words to identify forward-looking statements. These forward-looking
statements are based on numerous assumptions that the company
believes are reasonable, but they are open to a wide range of
uncertainties and business risks that may cause actual results to
differ materially from expectations as of June 30, 2015. These factors are difficult to
accurately predict and may be beyond the company's control. The
company does not undertake to update its forward-looking
statements. Factors that could affect the company's results
include, but are not limited to: supply and demand for the
company's coal products; price volatility and customer procurement
practices, particularly in international seaborne products and in
the company's trading and brokerage businesses; impact of
alternative energy sources, including natural gas and renewables;
global steel demand and the downstream impact on metallurgical coal
prices; impact of weather and natural disasters on demand and
production; reductions and/or deferrals of purchases by major
customers and the company's ability to renew sales contracts;
credit and performance risks associated with customers, suppliers,
contract miners, co-shippers, and trading, banks and other
financial counterparties; geologic, equipment, permitting, site
access, operational risks and new technologies related to mining;
transportation availability, performance and costs; availability,
timing of delivery and costs of key supplies, capital equipment or
commodities such as diesel fuel, steel, explosives and tires;
impact of take-or-pay agreements for rail and port commitments for
the delivery of coal; successful implementation of business
strategies; negotiation of labor contracts, employee relations and
workforce availability; changes in postretirement benefit and
pension obligations and their related funding requirements;
replacement and development of coal reserves; adequate liquidity
and the cost, availability and access to capital and financial
markets; ability to appropriately secure the company's obligations
for reclamation, federal and state workers' compensation, federal
coal leases and other obligations related to our operations;
effects of changes in interest rates and currency exchange rates
(primarily the Australian dollar); effects of acquisitions or
divestitures; economic strength and political stability of
countries in which the company has operations or serves customers;
legislation, regulations and court decisions or other government
actions, including, but not limited to, new environmental and mine
safety requirements; changes in income tax regulations,
sales-related royalties, or other regulatory taxes and changes in
derivative laws and regulations; litigation, including claims not
yet asserted; terrorist attacks or security threats, including
cybersecurity threats; impacts of pandemic illnesses; and other
risks detailed in the company's reports filed with the Securities
and Exchange Commission (SEC).
Included in the company's release of financial information
accounted for in accordance with generally accepted accounting
principles (GAAP) are certain non-GAAP financial measures, as
defined by SEC regulations. Adjusted EBITDA is defined as (loss)
income from continuing operations before deducting net interest
expense; income taxes; asset retirement obligation expenses;
depreciation, depletion, and amortization; asset impairment and
mine closure costs; charges for the settlement of claims and
litigation related to previously divested operations; and changes
in deferred tax asset valuation allowance and amortization of basis
difference related to equity affiliates. Adjusted EBITDA, which is
not calculated identically by all companies, is not a substitute
for operating income, net income or cash flow as determined in
accordance with United States GAAP. Management uses Adjusted EBITDA
as the primary metric to measure segment operating performance and
also believes it is useful to investors in comparing the company's
current results with those of prior and future periods and in
evaluating the company's operating performance without regard to
its capital structure or the cost basis of its assets.
CONTACT:
Vic Svec
314.342.7768
Logo -
http://photos.prnewswire.com/prnh/20120724/CG44353LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/peabody-energy-provides-update-on-second-quarter-2015-financial-targets-300107227.html
SOURCE Peabody Energy