ST. LOUIS, Aug. 5, 2020 /PRNewswire/ -- Peabody (NYSE:
BTU) today announced its second quarter 2020 operating results,
including revenues of $626.7 million;
loss from continuing operations, net of income taxes of
$1.55 billion; net loss attributable
to common stockholders of $1.54
billion; diluted loss per share from continuing operations
of $15.76; and Adjusted
EBITDA1 of $23.4
million.
"Over the past quarter, we have remained committed to the health
and safety of our employees and communities in which we operate,
while also taking further action to improve our cost structure,"
said President and Chief Executive Officer Glenn Kellow. "Our U.S. thermal operations
have done a tremendous job of adapting to significantly lower
demand, while our seaborne operations have remained pressured by
the economic impacts of the COVID-19 pandemic. Continued
uncertainty in global markets requires us to further improve our
operating performance and ensure we have a scalable structure that
can respond to market conditions in the months ahead."
Second Quarter 2020 Results
Second quarter 2020 revenues of $626.7
million reflect the impact of substantially lower shipments
and weak pricing. Seaborne revenues declined $257.5 million on 48 percent lower metallurgical
volumes and depressed metallurgical and thermal coal prices,
largely driven by the ongoing COVID-19 pandemic. U.S. thermal
revenues declined $234.4 million due
to the closure of Kayenta in the third quarter of 2019 as well as
continued weakness in natural gas prices impacting coal
demand.
Twenty-eight percent lower volumes, combined with the impacts of
the Kayenta Mine closure in late 2019, contributed to a 47 percent
decline in depreciation, depletion, and amortization (DD&A)
from the prior year to $88.3
million.
Compared to the prior year, selling and administrative
(SG&A) expenses improved 35 percent, reflecting prior
restructuring efforts, including headcount reductions made earlier
this year. Year-to-date SG&A marks the lowest levels
reported since 2003.
Peabody impaired the value of its North Antelope Rochelle Mine
by $1.42 billion driven by changes in
multiple assumptions, including lower long-term natural gas prices,
timing of coal plant retirements and continued growth from
renewable generation. These factors have contributed to the
company projecting that coal's share of the U.S. generation mix
will continue to be lower than prior year levels.
During the quarter, Peabody incurred $16.5 million in restructuring charges associated
with headcount reductions and $12.9
million in transaction costs related to the pending
PRB/Colorado joint venture.
These costs have been excluded from Adjusted EBITDA.
Segment Performance
The seaborne thermal segment exported 2.5 million tons in the
second quarter at an average realized price of $49.87 per short ton. The remaining 2.1
million tons were delivered under a long-term domestic supply
contract. Year-to-date export thermal sales have totaled 5.1
million short tons.
Seaborne thermal segment costs per ton of $29.19 improved 5 percent compared to the prior
year and 9 percent compared to the prior quarter. Second
quarter costs reflect planned increases associated with the
United/Wambo joint venture transition and a longwall move at Wambo
Underground. These increases were offset by lower foreign
exchange rates and fuel costs as well as favorable royalties and
product mix.
Seaborne metallurgical shipments were significantly impacted by
both demand and production constraints. Compared to the prior
year, second quarter 2020 shipments of 1.1 million tons declined 48
percent, primarily at Shoal Creek and the Coppabella and Moorvale
mines. Significantly lower volumes across the segment, the
ongoing main line conveyor system upgrade project at Shoal Creek,
pit sequencing at Moorvale, a planned dragline outage at Coppabella
and the unfavorable impact of accounting for the lower net
realizable value of inventory at some mines contributed to seaborne
metallurgical costs rising to $120.72
per ton.
While PRB shipments declined 28 percent compared to the prior
year, costs per ton improved 5 percent to $9.26 per ton as the segment continues to respond
to weak industry conditions. As expected, costs per ton
improved from the first quarter by $1.02 per ton, driven primarily by realizing the
benefit of set room regained in the prior quarter, reducing repair
and maintenance expense, increasing productivity, and optimizing
blending of in-pit inventory. The segment earned 19 percent
Adjusted EBITDA margins, or $2.19 per
ton, in the quarter.
During the second quarter, the other U.S. thermal segment
shipped 3.8 million tons and delivered 22 percent Adjusted EBITDA
margins. Compared to the prior year, total segment Adjusted
EBITDA declined in part due to Kayenta's prior year contribution of
$35 million.
Balance Sheet and Liquidity
Peabody ended the second quarter with $848.5 million of cash and cash equivalents on
hand and $926.1 million of available
liquidity. Available liquidity decreased $261.6 million from March
31, 2020 to June 30, 2020 in
part due to operational needs as well as increased
collateralization of long-term obligations.
The company is undertaking a process to explore and evaluate
various strategic financing alternatives. In connection with
considering various options to enhance the company's financial
flexibility, Peabody has made changes to its corporate structure
and designated certain of its subsidiaries as unrestricted
subsidiaries under the senior notes indenture and the credit
agreement. The designated subsidiaries consist primarily of the
entities through which the company conducts the operations of its
Wilpinjong mine. Year-to-date, Wilpinjong generated 74
percent of total seaborne thermal segment Adjusted
EBITDA.
Market Update
While the global economy continues to navigate through the
ongoing COVID-19 pandemic, the timing, scope and scale of the
recovery remains uncertain. Ongoing demand uncertainty driven
by idled steel capacity in Europe
and the Asia-Pacific, weak overall
electricity generation and the implementation of Chinese import
restrictions have contributed to low seaborne coal
prices.
Year-to-date through June, global steel production declined 6
percent compared to the prior year. Excluding China, global
steel production for that same period fell 14 percent. As a
result, demand from major metallurgical coal importing countries –
excluding China – has been down
year-to-date.
While China had strong
year-to-date thermal coal imports through June (up 18 million
tonnes), recently imposed import restrictions have begun to hamper
demand. In addition, economic activity in India remains weak, driving year-to-date June
imports down 20 million tonnes compared to the prior year.
Other major importing countries also continue to be impacted by
slower economic activity. Supply responses began to emerge in
the second quarter, with Indonesia
thermal coal exports down 17 million tonnes year-to-date through
June. While Australian thermal coal exports have remained in
line with the prior year, exports from the other major supply
regions have all declined year-to-date.
U.S. thermal coal conditions remain especially challenging given
weak overall electricity demand, high customer inventory levels and
continued low natural gas prices. These factors have
accelerated the secular decline already underway in the
industry. Total U.S. electricity generation year-to-date
through June was down approximately 4 percent, with coal generation
falling 31 percent to 17 percent of the generation mix as natural
gas and wind took market share, rising to 39 percent and 9 percent,
respectively, of the generation mix.
While Peabody's mine operations were not materially impacted by
the COVID-19 pandemic during the quarter, the company has responded
to weaker demand by lowering production across its operations to
meet demand.
Operational Update
The company is continuing to advance its program to reposition
the cost structure of the corporate functions and mines to counter
the impacts of reduced demand and low pricing. These
initiatives include temporarily idling production at some mines;
adjusting shift schedules to match demand; reducing the number of
units in operation; offloading take-or-pay commitments; and
eliminating additional positions, among other items. Major
activities include the following:
- Since April, the company reduced an additional 450 positions,
including contractors, across several mines, bringing total
reductions across the operations and corporate and support
functions to approximately 1,020 positions. Over the past 18
months, Peabody has reduced its workforce by approximately 24
percent.
- At Metropolitan, Peabody reduced approximately 34 percent of
its workforce, including contractors, and scaled back production in
response to weak seaborne demand.
- The company restructured the Coppabella and Moorvale mines to
operate as a single mining complex, which is anticipated to result
in increased efficiencies and lower costs. In addition, the mine
reduced three excavators/truck and shovel units in response to
challenging PCI demand.
- In addition, Peabody furloughed approximately 280 positions,
including contractors, at its Wambo Underground Mine beginning in
mid-June (at the conclusion of its recent longwall move) for 59
days. The company also furloughed employees during at an extended
longwall move at Twentymile and shortened work schedules at several
other U.S. thermal coal mines.
- Peabody reduced holding costs at North Goonyella to
approximately $5 million per quarter,
beginning in the third quarter of 2020.
- While work is still underway, since initiation of the program,
10 out of 17 currently owned and operated mines have demonstrated
improvements in cost per ton when comparing second quarter 2020
results to full-year 2019 results, despite significant volume
declines.
In addition, the company continues to weigh its strategic
development alternatives while the North Goonyella commercial
process is advancing. The pending PRB/Colorado joint venture with Arch also
continues to progress through the court system, with an expected
ruling by the end of the third quarter of 2020.
Outlook
Given continued uncertainties with respect to COVID-19,
including the duration, severity, scope, and necessary government
actions to limit the spread, Peabody is continuing its suspension
of full-year 2020 guidance targets.
Based on current customer nominations, Peabody has the following
sales priced for delivery in 2020:
- 87 million tons of PRB coal priced at an average price of
$11.36 per ton, implying 46 million
tons to be delivered in the second half of 2020.
- 18 million tons of other U.S. thermal coal priced at an average
price of $36 per ton, implying 9
million tons to be delivered in the second half of 2020.
- 7.2 million tons of seaborne thermal coal priced at an average
price of $58 per short ton, implying
2.1 million of already priced tons to be delivered in the second
half of 2020.
Ultimately, deliveries will be dependent on general economic
conditions, weather, natural gas prices and other factors.
Peabody continues to closely monitor volumes and is aggressively
protecting its contractual rights.
The company remains focused on preserving cash and operational
liquidity during these challenging times. Full-year SG&A
expense is now expected to be approximately $110 million, while 2020 capital expenditures
have been reduced to $200
million. The company is maintaining full compliance
with all regulatory reclamation requirements, but given operational
sequencing is lowering its 2020 ARO cash spend to $50 million. While Peabody now expects
lower SG&A, capital and ARO expenditures, further action is
required. The company remains committed to repositioning its
cost structure in light of reduced demand and lower
pricing.
Today's earnings call is scheduled for 10
a.m. CDT and can be accessed via the company's website at
PeabodyEnergy.com.
Peabody (NYSE: BTU) is a leading coal producer, serving
customers in more than 25 countries on six continents. We
provide essential products to fuel baseload electricity for
emerging and developed countries and create the steel needed to
build foundational infrastructure. Our commitment to
sustainability underpins our activities today and helps to shape
our strategy for the future. For further information, visit
PeabodyEnergy.com.
Contact:
Julie
Gates
314.342.4336
|
|
|
1 Adjusted EBITDA is a non-GAAP
financial measure. Revenues per ton, costs per ton, Adjusted
EBITDA margin per ton and percent are non-GAAP
operating/statistical measures. Adjusted EBITDA margin is
equal to segment Adjusted EBITDA divided by segment revenues.
Please refer to the tables and related notes in this press release
for a reconciliation and definition of non-GAAP financial
measures.
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
For the Quarters
and Six Months Ended Jun. 30, 2020 and 2019
|
|
|
|
|
|
|
|
|
|
(In Millions, Except
Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Tons Sold
|
28.3
|
|
|
39.4
|
|
|
63.9
|
|
|
79.9
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
626.7
|
|
|
$
|
1,149.0
|
|
|
$
|
1,472.9
|
|
|
$
|
2,399.6
|
|
Operating Costs and
Expenses (1)
|
556.3
|
|
|
857.8
|
|
|
1,335.8
|
|
|
1,806.0
|
|
Depreciation,
Depletion and Amortization
|
88.3
|
|
|
165.4
|
|
|
194.3
|
|
|
337.9
|
|
Asset Retirement
Obligation Expenses
|
14.1
|
|
|
15.3
|
|
|
31.7
|
|
|
29.1
|
|
Selling and
Administrative Expenses
|
25.2
|
|
|
38.9
|
|
|
50.1
|
|
|
75.6
|
|
Restructuring
Charges
|
16.5
|
|
|
0.4
|
|
|
23.0
|
|
|
0.6
|
|
Transaction Costs
Related to Joint Ventures
|
12.9
|
|
|
1.6
|
|
|
17.1
|
|
|
1.6
|
|
Other Operating Loss
(Income):
|
|
|
|
|
|
|
|
Net Loss (Gain) on
Disposals
|
0.2
|
|
|
(0.2)
|
|
|
(7.9)
|
|
|
(1.7)
|
|
Asset
Impairment
|
1,418.1
|
|
|
—
|
|
|
1,418.1
|
|
|
—
|
|
Provision for North
Goonyella Equipment Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
24.7
|
|
North Goonyella
Insurance Recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(125.0)
|
|
Loss (Income) from
Equity Affiliates
|
6.0
|
|
|
(9.7)
|
|
|
15.1
|
|
|
(13.2)
|
|
Operating (Loss)
Profit
|
(1,510.9)
|
|
|
79.5
|
|
|
(1,604.4)
|
|
|
264.0
|
|
Interest
Expense
|
34.3
|
|
|
36.0
|
|
|
67.4
|
|
|
71.8
|
|
Interest
Income
|
(2.4)
|
|
|
(7.2)
|
|
|
(5.5)
|
|
|
(15.5)
|
|
Net Periodic Benefit
Costs, Excluding Service Cost
|
2.7
|
|
|
4.8
|
|
|
5.5
|
|
|
9.7
|
|
(Loss) Income from
Continuing Operations Before Income Taxes
|
(1,545.5)
|
|
|
45.9
|
|
|
(1,671.8)
|
|
|
198.0
|
|
Income Tax (Benefit)
Provision
|
(0.2)
|
|
|
3.0
|
|
|
2.8
|
|
|
21.8
|
|
(Loss) Income from
Continuing Operations, Net of Income Taxes
|
(1,545.3)
|
|
|
42.9
|
|
|
(1,674.6)
|
|
|
176.2
|
|
Loss from
Discontinued Operations, Net of Income Taxes
|
(2.3)
|
|
|
(3.4)
|
|
|
(4.5)
|
|
|
(6.8)
|
|
Net (Loss)
Income
|
(1,547.6)
|
|
|
39.5
|
|
|
(1,679.1)
|
|
|
169.4
|
|
Less: Net (Loss)
Income Attributable to Noncontrolling Interests
|
(3.4)
|
|
|
2.4
|
|
|
(5.2)
|
|
|
8.1
|
|
Net (Loss) Income
Attributable to Common Stockholders
|
$
|
(1,544.2)
|
|
|
$
|
37.1
|
|
|
$
|
(1,673.9)
|
|
|
$
|
161.3
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
|
23.4
|
|
|
$
|
230.0
|
|
|
$
|
60.2
|
|
|
$
|
484.1
|
|
|
|
|
|
|
|
|
|
Diluted EPS - (Loss)
Income from Continuing Operations (3)(4)
|
$
|
(15.76)
|
|
|
$
|
0.37
|
|
|
$
|
(17.12)
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - Net
(Loss) Income Attributable to Common
Stockholders (3)
|
$
|
(15.78)
|
|
|
$
|
0.34
|
|
|
$
|
(17.16)
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes items shown
separately.
|
(2)
|
Adjusted EBITDA is a
non-GAAP financial measure. Refer to the "Reconciliation of
Non-GAAP Financial Measures" section in this document for
definitions and reconciliations to the most comparable measures
under U.S. GAAP.
|
(3)
|
During the quarters
ended June 30, 2020 and 2019, weighted average diluted shares
outstanding were 97.9 million and 108.1 million, respectively.
During the six months ended June 30, 2020 and 2019, weighted
average diluted shares outstanding were 97.5 million and 109.3
million, respectively.
|
(4)
|
Reflects (loss)
income from continuing operations, net of income taxes less net
(loss) income attributable to noncontrolling interests.
|
|
|
|
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
Supplemental
Financial Data (Unaudited)
|
|
For the Quarters
and Six Months Ended Jun. 30, 2020 and 2019
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Tons Sold (In
Millions)
|
|
|
|
|
|
|
|
Seaborne Thermal
Mining Operations
|
4.6
|
|
|
4.7
|
|
|
9.2
|
|
|
9.2
|
|
Seaborne
Metallurgical Mining Operations
|
1.1
|
|
|
2.1
|
|
|
3.1
|
|
|
4.4
|
|
Powder River Basin
Mining Operations
|
17.9
|
|
|
25.0
|
|
|
41.4
|
|
|
50.3
|
|
Other U.S. Thermal
Mining Operations (1)
|
3.8
|
|
|
7.2
|
|
|
8.7
|
|
|
15.1
|
|
Total U.S. Thermal
Mining Operations
|
21.7
|
|
|
32.2
|
|
|
50.1
|
|
|
65.4
|
|
Corporate and
Other
|
0.9
|
|
|
0.4
|
|
|
1.5
|
|
|
0.9
|
|
Total
|
28.3
|
|
|
39.4
|
|
|
63.9
|
|
|
79.9
|
|
|
|
|
|
|
|
|
|
|
Revenue Summary (In
Millions)
|
|
|
|
|
|
|
|
Seaborne Thermal
Mining Operations
|
$
|
162.0
|
|
|
$
|
220.2
|
|
|
$
|
363.1
|
|
|
$
|
471.2
|
|
Seaborne
Metallurgical Mining Operations
|
91.6
|
|
|
290.9
|
|
|
284.8
|
|
|
615.4
|
|
Powder River Basin
Mining Operations
|
205.8
|
|
|
282.6
|
|
|
472.4
|
|
|
569.9
|
|
Other U.S. Thermal
Mining Operations (1)
|
152.0
|
|
|
309.6
|
|
|
344.3
|
|
|
644.4
|
|
Total U.S. Thermal
Mining Operations
|
357.8
|
|
|
592.2
|
|
|
816.7
|
|
|
1,214.3
|
|
Corporate and
Other
|
15.3
|
|
|
45.7
|
|
|
8.3
|
|
|
98.7
|
|
Total
|
$
|
626.7
|
|
|
$
|
1,149.0
|
|
|
$
|
1,472.9
|
|
|
$
|
2,399.6
|
|
|
|
|
|
|
|
|
|
|
Total Reporting
Segment Costs Summary (In Millions) (2)
|
|
|
|
|
|
|
|
Seaborne Thermal
Mining Operations
|
$
|
134.3
|
|
|
$
|
145.8
|
|
|
$
|
280.3
|
|
|
$
|
302.1
|
|
Seaborne
Metallurgical Mining Operations
|
127.7
|
|
|
233.5
|
|
|
353.6
|
|
|
472.2
|
|
North Goonyella
Equipment & Development Costs (3)
|
—
|
|
|
28.4
|
|
|
—
|
|
|
31.4
|
|
Seaborne Metallurgical
Mining Operations, Excluding North Goonyella Equipment &
Development Costs
|
127.7
|
|
|
205.1
|
|
|
353.6
|
|
|
440.8
|
|
Powder River Basin
Mining Operations
|
166.5
|
|
|
242.4
|
|
|
407.7
|
|
|
493.3
|
|
Other U.S. Thermal
Mining Operations (1)
|
119.1
|
|
|
226.5
|
|
|
272.9
|
|
|
485.4
|
|
Total U.S. Thermal
Mining Operations
|
285.6
|
|
|
468.9
|
|
|
680.6
|
|
|
978.7
|
|
Corporate and
Other
|
16.9
|
|
|
19.7
|
|
|
35.0
|
|
|
39.9
|
|
Total
|
$
|
564.5
|
|
|
$
|
867.9
|
|
|
$
|
1,349.5
|
|
|
$
|
1,792.9
|
|
|
|
|
|
|
|
|
|
|
Other Supplemental
Financial Data (In Millions)
|
|
|
|
|
|
|
|
Adjusted EBITDA -
Seaborne Thermal Mining Operations
|
$
|
27.7
|
|
|
$
|
74.4
|
|
|
$
|
82.8
|
|
|
$
|
169.1
|
|
Adjusted EBITDA -
Seaborne Metallurgical Mining Operations
|
(36.1)
|
|
|
57.4
|
|
|
(68.8)
|
|
|
143.2
|
|
North Goonyella
Equipment & Development Costs (3)
|
—
|
|
|
28.4
|
|
|
—
|
|
|
31.4
|
|
Adjusted EBITDA -
Seaborne Metallurgical Mining Operations, Excluding North Goonyella
Equipment & Development Costs
|
(36.1)
|
|
|
85.8
|
|
|
(68.8)
|
|
|
174.6
|
|
Adjusted EBITDA -
Powder River Basin Mining Operations
|
39.3
|
|
|
40.2
|
|
|
64.7
|
|
|
76.6
|
|
Adjusted EBITDA - Other
U.S. Thermal Mining Operations (1)
|
32.9
|
|
|
83.1
|
|
|
71.4
|
|
|
159.0
|
|
Adjusted EBITDA -
Total U.S. Thermal Mining Operations
|
72.2
|
|
|
123.3
|
|
|
136.1
|
|
|
235.6
|
|
Middlemount
(4)
|
(6.4)
|
|
|
10.0
|
|
|
(16.1)
|
|
|
13.9
|
|
Resource Management
Results (5)
|
0.8
|
|
|
1.7
|
|
|
8.8
|
|
|
3.7
|
|
Selling and
Administrative Expenses
|
(25.2)
|
|
|
(38.9)
|
|
|
(50.1)
|
|
|
(75.6)
|
|
Other Operating
Costs, Net (6)
|
(9.6)
|
|
|
2.1
|
|
|
(32.5)
|
|
|
(5.8)
|
|
Adjusted EBITDA
(2)
|
$
|
23.4
|
|
|
$
|
230.0
|
|
|
$
|
60.2
|
|
|
$
|
484.1
|
|
|
|
|
|
|
|
|
|
|
Note:
See footnote explanations on following page
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Financial Data (Unaudited)
|
|
For the Quarters
and Six Months Ended Jun. 30, 2020 and 2019
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues per Ton -
Mining Operations (7)
|
|
|
|
|
|
|
|
Seaborne
Thermal
|
$
|
35.10
|
|
|
$
|
46.41
|
|
|
$
|
39.58
|
|
|
$
|
51.18
|
|
Seaborne
Metallurgical
|
86.80
|
|
|
138.42
|
|
|
92.61
|
|
|
140.45
|
|
Powder River
Basin
|
11.45
|
|
|
11.33
|
|
|
11.40
|
|
|
11.34
|
|
Other U.S. Thermal
(1)
|
39.81
|
|
|
43.04
|
|
|
39.49
|
|
|
42.60
|
|
Total U.S.
Thermal
|
16.42
|
|
|
18.43
|
|
|
16.28
|
|
|
18.57
|
|
|
|
|
|
|
|
|
|
|
Costs per Ton -
Mining Operations (7)(8)
|
|
|
|
|
|
|
|
Seaborne
Thermal
|
$
|
29.19
|
|
|
$
|
30.73
|
|
|
$
|
30.56
|
|
|
$
|
32.82
|
|
Seaborne
Metallurgical
|
120.72
|
|
|
111.12
|
|
|
115.00
|
|
|
107.77
|
|
North Goonyella
Equipment & Development Costs (3)
|
—
|
|
|
13.51
|
|
|
—
|
|
|
7.17
|
|
Seaborne
Metallurgical, Excluding North Goonyella Equipment &
Development Costs
|
120.72
|
|
|
97.61
|
|
|
115.00
|
|
|
100.60
|
|
Powder River
Basin
|
9.26
|
|
|
9.72
|
|
|
9.84
|
|
|
9.82
|
|
Other U.S. Thermal
(1)
|
31.22
|
|
|
31.47
|
|
|
31.31
|
|
|
32.08
|
|
Total U.S.
Thermal
|
13.11
|
|
|
14.59
|
|
|
13.57
|
|
|
14.97
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin per Ton - Mining Operations (7)(8)
|
|
|
|
|
|
|
|
Seaborne
Thermal
|
$
|
5.91
|
|
|
$
|
15.68
|
|
|
$
|
9.02
|
|
|
$
|
18.36
|
|
Seaborne
Metallurgical
|
(33.92)
|
|
|
27.30
|
|
|
(22.39)
|
|
|
32.68
|
|
North Goonyella
Equipment & Development Costs (3)
|
—
|
|
|
13.51
|
|
|
—
|
|
|
7.17
|
|
Seaborne
Metallurgical, Excluding North Goonyella Equipment &
Development Costs
|
(33.92)
|
|
|
40.81
|
|
|
(22.39)
|
|
|
39.85
|
|
Powder River
Basin
|
2.19
|
|
|
1.61
|
|
|
1.56
|
|
|
1.52
|
|
Other U.S. Thermal
(1)
|
8.59
|
|
|
11.57
|
|
|
8.18
|
|
|
10.52
|
|
Total U.S.
Thermal
|
3.31
|
|
|
3.84
|
|
|
2.71
|
|
|
3.60
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Beginning Q1 2020, we
have combined the Midwestern U.S. Mining segment with the
Western U.S. Mining segment to reflect the manner in which our
chief operating decision maker now views our businesses for
purposes of reviewing performance, allocating resources and
assessing future prospects and strategic execution. All periods
presented have been recast for comparability.
|
(2)
|
Total Reporting
Segment Costs and Adjusted EBITDA are non-GAAP financial measures.
Refer to the "Reconciliation of Non-GAAP Financial Measures"
section in this document for definitions and reconciliations to the
most comparable measures under U.S. GAAP.
|
(3)
|
Costs incurred from
January 1, 2020 forward are included within Other Operating
Costs, Net. Costs incurred prior to January 1, 2020 remain
within the Seaborne Metallurgical segment.
|
(4)
|
We account for our
50% equity interest in Middlemount Coal Pty Ltd. (Middlemount),
which owns the Middlemount Mine, under the equity method.
Middlemount's standalone results exclude the impact of related
changes in deferred tax asset valuation allowance and reserves and
amortization of basis difference recorded by the company in
applying the equity method. Middlemount's standalone results
include (on a 50% attributable basis):
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(In
Millions)
|
|
Tons sold
|
0.3
|
|
|
0.6
|
|
|
0.8
|
|
|
1.0
|
|
|
Depreciation,
depletion and amortization and asset retirement obligation
expenses
|
$
|
8.4
|
|
|
$
|
3.5
|
|
|
$
|
14.3
|
|
|
$
|
7.1
|
|
|
Net interest
expense
|
3.2
|
|
|
1.8
|
|
|
5.9
|
|
|
4.0
|
|
|
Income tax (benefit)
provision
|
(2.8)
|
|
|
4.2
|
|
|
(7.0)
|
|
|
5.9
|
|
(5)
|
Includes gains
(losses) on certain surplus coal reserve and surface land sales and
property management costs and revenues.
|
(6)
|
Includes trading and
brokerage activities, costs associated with post-mining activities,
minimum charges on certain transportation-related contracts and
costs associated with suspended operations including the North
Goonyella Mine.
|
(7)
|
Revenues per Ton,
Costs per Ton and Adjusted EBITDA Margin per Ton are metrics used
by management to measure each of our mining segment's operating
performance. Revenues per Ton and Adjusted EBITDA Margin per Ton
are equal to revenues by segment and Adjusted EBITDA by segment,
respectively, divided by segment tons sold. Costs per Ton is equal
to Revenues per Ton less Adjusted EBITDA Margin per Ton. Management
believes Costs per Ton and Adjusted EBITDA Margin per Ton best
reflect controllable costs and operating results at the mining
segment level. We consider all measures reported on a per ton basis
to be operating/statistical measures; however, we include
reconciliations of the related non-GAAP financial measures
(Adjusted EBITDA and Total Reporting Segment Costs) in the
"Reconciliation of Non-GAAP Financial Measures" section in this
document.
|
(8)
|
Includes
revenue-based production taxes and royalties; excludes
depreciation, depletion and amortization; asset retirement
obligation expenses; selling and administrative expenses;
restructuring charges; asset impairment; provision for North
Goonyella equipment loss and related insurance recovery;
amortization of take-or-pay contract-based intangibles; and certain
other costs related to post-mining activities.
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
Condensed
Consolidated Balance Sheets
|
|
As of Jun. 30,
2020 and Dec. 31, 2019
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Jun. 30,
2020
|
|
Dec. 31,
2019
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
|
848.5
|
|
|
$
|
732.2
|
|
Accounts Receivable,
Net
|
191.4
|
|
|
329.5
|
|
Inventories
|
301.6
|
|
|
331.5
|
|
Other Current
Assets
|
241.2
|
|
|
220.7
|
|
Total Current
Assets
|
1,582.7
|
|
|
1,613.9
|
|
Property, Plant,
Equipment and Mine Development, Net
|
3,178.4
|
|
|
4,679.1
|
|
Operating Lease
Right-of-Use Assets
|
50.7
|
|
|
82.4
|
|
Investments and Other
Assets
|
132.1
|
|
|
139.1
|
|
Deferred Income
Taxes
|
4.9
|
|
|
28.3
|
|
Total
Assets
|
$
|
4,948.8
|
|
|
$
|
6,542.8
|
|
|
|
|
|
|
Current Portion of
Long-Term Debt
|
$
|
10.9
|
|
|
$
|
18.3
|
|
Accounts Payable and
Accrued Expenses
|
788.9
|
|
|
957.0
|
|
Total Current
Liabilities
|
799.8
|
|
|
975.3
|
|
Long-Term Debt, Less
Current Portion
|
1,597.0
|
|
|
1,292.5
|
|
Deferred Income
Taxes
|
28.3
|
|
|
28.8
|
|
Asset Retirement
Obligations
|
665.8
|
|
|
654.1
|
|
Accrued
Postretirement Benefit Costs
|
583.0
|
|
|
593.4
|
|
Operating Lease
Liabilities, Less Current Portion
|
42.0
|
|
|
52.8
|
|
Other Noncurrent
Liabilities
|
243.6
|
|
|
273.4
|
|
Total
Liabilities
|
3,959.5
|
|
|
3,870.3
|
|
|
|
|
|
|
Common
Stock
|
1.4
|
|
|
1.4
|
|
Additional Paid-in
Capital
|
3,357.2
|
|
|
3,351.1
|
|
Treasury
Stock
|
(1,368.9)
|
|
|
(1,367.3)
|
|
(Accumulated Deficit)
Retained Earnings
|
(1,076.9)
|
|
|
597.0
|
|
Accumulated Other
Comprehensive Income
|
26.5
|
|
|
31.6
|
|
Peabody Energy
Corporation Stockholders' Equity
|
939.3
|
|
|
2,613.8
|
|
Noncontrolling
Interests
|
50.0
|
|
|
58.7
|
|
Total Stockholders'
Equity
|
989.3
|
|
|
2,672.5
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
4,948.8
|
|
|
$
|
6,542.8
|
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
For the Quarters
and Six Months Ended Jun. 30, 2020 and 2019
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash Flows From
Operating Activities
|
|
|
|
|
|
|
|
Net Cash (Used In)
Provided By Continuing Operations
|
$
|
(31.1)
|
|
|
$
|
197.8
|
|
|
$
|
(32.7)
|
|
|
$
|
398.6
|
|
Net Cash Used in
Discontinued Operations
|
(17.3)
|
|
|
(18.4)
|
|
|
(20.4)
|
|
|
(21.6)
|
|
Net Cash (Used In)
Provided By Operating Activities
|
(48.4)
|
|
|
179.4
|
|
|
(53.1)
|
|
|
377.0
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
|
|
|
Additions to
Property, Plant, Equipment and Mine Development
|
(54.5)
|
|
|
(61.0)
|
|
|
(85.8)
|
|
|
(96.8)
|
|
Changes in Accrued
Expenses Related to Capital Expenditures
|
(2.9)
|
|
|
4.0
|
|
|
(14.3)
|
|
|
0.2
|
|
Insurance Proceeds
Attributable to North Goonyella Equipment Losses
|
—
|
|
|
23.2
|
|
|
—
|
|
|
23.2
|
|
Proceeds from
Disposal of Assets, Net of Receivables
|
1.5
|
|
|
4.8
|
|
|
12.0
|
|
|
15.8
|
|
Amount Attributable
to Acquisition of Shoal Creek Mine
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.4)
|
|
Contributions to
Joint Ventures
|
(95.7)
|
|
|
(101.2)
|
|
|
(192.0)
|
|
|
(219.6)
|
|
Distributions from
Joint Ventures
|
89.8
|
|
|
94.6
|
|
|
188.2
|
|
|
205.5
|
|
Advances to Related
Parties
|
(16.2)
|
|
|
(3.0)
|
|
|
(23.1)
|
|
|
(4.5)
|
|
Cash Receipts from
Middlemount Coal Pty Ltd
|
—
|
|
|
13.6
|
|
|
—
|
|
|
14.7
|
|
Other, Net
|
(0.5)
|
|
|
(0.9)
|
|
|
(0.6)
|
|
|
(0.1)
|
|
Net Cash Used In
Investing Activities
|
(78.5)
|
|
|
(25.9)
|
|
|
(115.6)
|
|
|
(64.0)
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from
Long-Term Debt
|
300.0
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
Repayments of
Long-Term Debt
|
(2.7)
|
|
|
(9.2)
|
|
|
(9.9)
|
|
|
(17.5)
|
|
Payment of Debt
Issuance and Other Deferred Financing Costs
|
—
|
|
|
(0.8)
|
|
|
—
|
|
|
(0.8)
|
|
Common Stock
Repurchases
|
—
|
|
|
(57.2)
|
|
|
—
|
|
|
(156.0)
|
|
Repurchase of
Employee Common Stock Relinquished for Tax Withholding
|
(0.8)
|
|
|
(10.9)
|
|
|
(1.6)
|
|
|
(12.3)
|
|
Dividends
Paid
|
—
|
|
|
(14.9)
|
|
|
—
|
|
|
(229.3)
|
|
Distributions to
Noncontrolling Interests
|
(3.4)
|
|
|
(0.1)
|
|
|
(3.5)
|
|
|
(14.4)
|
|
Other, Net
|
(0.2)
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Net Cash Provided
By (Used In) Financing Activities
|
292.9
|
|
|
(93.0)
|
|
|
285.0
|
|
|
(430.3)
|
|
Net Change in
Cash, Cash Equivalents and Restricted Cash
|
166.0
|
|
|
60.5
|
|
|
116.3
|
|
|
(117.3)
|
|
Cash, Cash
Equivalents and Restricted Cash at Beginning of
Period
|
682.5
|
|
|
839.6
|
|
|
732.2
|
|
|
1,017.4
|
|
Cash, Cash
Equivalents and Restricted Cash at End of Period
|
$
|
848.5
|
|
|
$
|
900.1
|
|
|
$
|
848.5
|
|
|
$
|
900.1
|
|
|
|
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited)
|
|
|
For the Quarters
and Six Months Ended Jun. 30, 2020 and 2019
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Management believes that non-GAAP performance measures are used by
investors to measure our operating performance and lenders to
measure our ability to incur and service debt. These measures are
not intended to serve as alternatives to U.S. GAAP measures of
performance and may not be comparable to similarly-titled measures
presented by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
Jun.
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
Continuing Operations, Net of Income Taxes
|
$
|
(1,545.3)
|
|
|
$
|
42.9
|
|
|
$
|
(1,674.6)
|
|
|
$
|
176.2
|
|
|
Depreciation,
Depletion and Amortization
|
88.3
|
|
|
165.4
|
|
|
194.3
|
|
|
337.9
|
|
|
Asset Retirement
Obligation Expenses
|
14.1
|
|
|
15.3
|
|
|
31.7
|
|
|
29.1
|
|
|
Restructuring
Charges
|
16.5
|
|
|
0.4
|
|
|
23.0
|
|
|
0.6
|
|
|
Transaction Costs
Related to Joint Ventures
|
12.9
|
|
|
1.6
|
|
|
17.1
|
|
|
1.6
|
|
|
Asset
Impairment
|
1,418.1
|
|
|
—
|
|
|
1,418.1
|
|
|
—
|
|
|
Provision for North
Goonyella Equipment Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
24.7
|
|
|
North Goonyella
Insurance Recovery - Equipment (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(91.1)
|
|
|
Changes in Deferred
Tax Asset Valuation Allowance and Reserves and Amortization of
Basis Difference Related to Equity Affiliates
|
(0.4)
|
|
|
0.3
|
|
|
(1.1)
|
|
|
0.3
|
|
|
Interest
Expense
|
34.3
|
|
|
36.0
|
|
|
67.4
|
|
|
71.8
|
|
|
Interest
Income
|
(2.4)
|
|
|
(7.2)
|
|
|
(5.5)
|
|
|
(15.5)
|
|
|
Unrealized Gains on
Economic Hedges
|
(7.0)
|
|
|
(22.4)
|
|
|
(4.8)
|
|
|
(62.2)
|
|
|
Unrealized (Gains)
Losses on Non-Coal Trading Derivative Contracts
|
(2.8)
|
|
|
0.3
|
|
|
(2.9)
|
|
|
0.1
|
|
|
Take-or-Pay
Contract-Based Intangible Recognition
|
(2.7)
|
|
|
(5.6)
|
|
|
(5.3)
|
|
|
(11.2)
|
|
|
Income Tax (Benefit)
Provision
|
(0.2)
|
|
|
3.0
|
|
|
2.8
|
|
|
21.8
|
|
|
Adjusted EBITDA
(2)
|
$
|
23.4
|
|
|
$
|
230.0
|
|
|
$
|
60.2
|
|
|
$
|
484.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and
Expenses
|
$
|
556.3
|
|
|
$
|
857.8
|
|
|
$
|
1,335.8
|
|
|
$
|
1,806.0
|
|
|
Unrealized Gains
(Losses) on Non-Coal Trading Derivative Contracts
|
2.8
|
|
|
(0.3)
|
|
|
2.9
|
|
|
(0.1)
|
|
|
Take-or-Pay
Contract-Based Intangible Recognition
|
2.7
|
|
|
5.6
|
|
|
5.3
|
|
|
11.2
|
|
|
North Goonyella
Insurance Recovery - Cost Recovery and Business Interruption
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.9)
|
|
|
Net Periodic Benefit
Costs, Excluding Service Cost
|
2.7
|
|
|
4.8
|
|
|
5.5
|
|
|
9.7
|
|
|
Total Reporting
Segment Costs (3)
|
$
|
564.5
|
|
|
$
|
867.9
|
|
|
$
|
1,349.5
|
|
|
$
|
1,792.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used In)
Provided By Operating Activities
|
$
|
(48.4)
|
|
|
$
|
179.4
|
|
|
$
|
(53.1)
|
|
|
$
|
377.0
|
|
|
Net Cash Used In
Investing Activities
|
(78.5)
|
|
|
(25.9)
|
|
|
(115.6)
|
|
|
(64.0)
|
|
|
Add Back: Amount
Attributable to Acquisition of Shoal Creek Mine
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
Free Cash Flow
(4)
|
$
|
(126.9)
|
|
|
$
|
153.5
|
|
|
$
|
(168.7)
|
|
|
$
|
315.4
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We recorded a $125.0
million insurance recovery during the six months ended
June 30, 2019 related to losses incurred at our North
Goonyella Mine. Of this amount, Adjusted EBITDA excludes an
allocated amount applicable to total equipment losses recognized at
the time of the insurance recovery settlement, which consisted of
$24.7 million and $66.4 million recognized during the six months
ended June 30, 2019 and the year ended December 31, 2018,
respectively. The remaining $33.9 million, applicable to
incremental costs and business interruption losses, is included in
Adjusted EBITDA for the six months ended June 30,
2019.
|
|
(2)
|
Adjusted EBITDA is
defined as (loss) income from continuing operations before
deducting net interest expense, income taxes, asset retirement
obligation expenses and depreciation, depletion and amortization.
Adjusted EBITDA is also adjusted for the discrete items that
management excluded in analyzing each of our segment's operating
performance as displayed in the reconciliation above. Adjusted
EBITDA is used by management as the primary metric to measure each
of our segment's operating performance. We have retrospectively
modified our calculation of Adjusted EBITDA to exclude
restructuring charges and transaction costs related to joint
ventures as management does not view these items as part of our
normal operations.
|
|
(3)
|
Total Reporting
Segment Costs is defined as operating costs and expenses adjusted
for the discrete items that management excluded in analyzing each
of our segment's operating performance as displayed in the
reconciliation above. Total Reporting Segment Costs is used by
management as a metric to measure each of our segment's operating
performance. We have retrospectively modified our calculation of
Total Reporting Segment Costs to exclude restructuring charges as
management does not view this item as part of our normal
operations.
|
|
(4)
|
Free Cash Flow is
defined as net cash (used in) provided by operating activities less
net cash used in investing activities and excludes cash outflows
related to business combinations. Free Cash Flow is used by
management as a measure of our financial performance and our
ability to generate excess cash flow from our business
operations.
|
|
|
|
|
|
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures (Unaudited)
|
|
|
As of Jun. 30,
2020 and Dec. 31, 2019
|
|
|
|
|
|
|
|
(Dollars In
Millions)
|
|
|
|
|
|
|
|
|
|
|
Note:
Management believes that non-GAAP performance measures are used by
investors to measure our operating performance and lenders to
measure our ability to incur and service debt. These measures are
not intended to serve as alternatives to U.S. GAAP measures of
performance and may not be comparable to similarly-titled measures
presented by other companies.
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Jun. 30,
2020
|
|
Dec. 31,
2019
|
|
|
|
|
|
|
|
Current Portion of
Long-Term Debt
|
$
|
10.9
|
|
|
$
|
18.3
|
|
|
Long-Term Debt, Less
Current Portion
|
1,597.0
|
|
|
1,292.5
|
|
|
Less: Cash and Cash
Equivalents
|
(848.5)
|
|
|
(732.2)
|
|
|
Net Debt
(1)
|
$
|
759.4
|
|
|
$
|
578.6
|
|
|
|
|
|
|
|
|
(1)
|
Net Debt is defined
as current portion of long-term debt plus long-term debt, less
current portion less cash and cash equivalents. Net Debt is
reviewed by management as an indicator of our overall financial
flexibility, capital structure and leverage.
|
|
|
|
|
|
|
|
This information
is intended to be reviewed in conjunction with the company's
filings with the SEC.
|
|
Forward-Looking Statements
This press release 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 variation
of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "projects," "forecasts,"
"targets," "would," "will," "should," "goal," "could" or "may" or
other similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events or results. All statements that address
operating performance, events, or developments that Peabody expects
will occur in the future are forward-looking statements. They may
include estimates of sales targets, cost savings, capital
expenditures, other expense items, actions relating to strategic
initiatives, demand for the company's products, liquidity, capital
structure, market share, industry volume, other financial items,
descriptions of management's plans or objectives for future
operations and descriptions of assumptions underlying any of the
above. All forward-looking statements speak only as of the date
they are made and reflect Peabody's good faith beliefs, assumptions
and expectations, but they are not guarantees of future performance
or events. Furthermore, Peabody disclaims any obligation to
publicly update or revise any forward-looking statement, except as
required by law. By their nature, forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those suggested by the forward-looking
statements. Factors that might cause such differences include, but
are not limited to, a variety of economic, competitive and
regulatory factors, many of which are beyond Peabody's control,
including the ongoing impact of the COVID-19 pandemic and factors
that are described in Peabody's Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2019, and
other factors that Peabody may describe from time to time in other
filings with the SEC. You may get such filings for free at
Peabody's website at www.peabodyenergy.com. You should understand
that it is not possible to predict or identify all such factors
and, consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
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SOURCE Peabody