Peabody Reports Earnings For Quarter Ended September 30, 2020
ST. LOUIS, Nov. 9, 2020 /PRNewswire/ -- Peabody (NYSE: BTU) today announced its third quarter 2020 operating results, including revenues of $671.0 million; loss from continuing operations, net of income taxes of $64.8 million; net loss attributable to common stockholders of $67.2 million; diluted loss per share from continuing operations of $0.66; and Adjusted EBITDA(1) of $95.4 million.
"Peabody drove strong cost performance within our thermal segments during the third quarter, including record-low PRB costs per ton," said President and Chief Executive Officer Glenn Kellow. "We have had a number of achievements across the portfolio and look to further build upon our progress as we tackle structural improvements within the seaborne met segment. In addition to our ongoing portfolio enhancements, we have been working to achieve specific financing objectives. While we have made progress, there is still more to do. Together, these actions are intended to provide a solid base to strengthen our financial and operating performance."
Third Quarter 2020 Results
Third quarter revenues declined 39 percent from the prior year to $671.0 million due to lower volumes, mix changes and weaker seaborne pricing. U.S. thermal revenues declined $215.4 million, including $82.6 million from Kayenta's closure in the third quarter of 2019.
Operating costs and expenses also fell by 39 percent, reflecting the benefit of cost saving initiatives taken to date, as well as lower volumes. These initiatives included further headcount reductions, which resulted in a restructuring charge of $8.1 million in the third quarter.
The company also modified its approach to its non-represented retiree medical coverage to better align with evolving business conditions and industry benchmarks. Given this change, the company's postretirement benefit obligation was adjusted to fair value, utilizing lower discount rates, which resulted in a $13.0 million loss in the quarter and a $174.5 million reduction in the liability. Peabody ended the third quarter with $814.6 million of cash and cash equivalents and $860.1 million of available liquidity.
Segment Performance
During the quarter, the seaborne thermal segment shipped 4.6 million tons, with 2.7 million tons exported at an average realized price of $45.86 per short ton. The remaining 1.9 million tons were sold under a long-term domestic contract.
Seaborne thermal segment costs per ton of $27.59 improved 22 percent compared to the prior year due to strong cost performance from the Wambo surface mine and Wilpinjong. Lower ratio and improved geology contributed to significantly lower year-over-year costs at the surface operations.
In the quarter, the seaborne met segment shipped 1.1 million tons at an average realized price of $71.88 per short ton. Compared to the prior year, third quarter 2020 realized pricing was impacted by lower pricing and a higher mix of PCI sales.
Seaborne met costs per ton, excluding prior year North Goonyella equipment and development costs, improved 15 percent from the prior year to $96.87. Lower costs per ton were driven by ongoing actions to improve the cost structure at Metropolitan, Coppabella and Moorvale. Year-to-date 2020 met costs per ton included an approximately $5 per ton impact related to an adjustment to record certain mines' inventory at net realizable value.
Peabody's U.S. thermal mines delivered strong cost performance driven by optimizing the company's maintenance program through use of condition-based monitoring. These benefits largely offset the impacts of lower demand.
Third quarter PRB Adjusted EBITDA of $78.3 million increased $7.6 million from the prior year on record low PRB costs per ton of $7.93, despite a 22 percent decline in shipments. Third quarter PRB costs benefited from lower maintenance spending, and fuel and sales related costs associated with reduced volumes, including a one-time benefit of $0.35 per ton.
The other U.S. thermal segment earned $51.6 million of Adjusted EBITDA in the quarter on continued strong cost performance. Costs per ton declined 22 percent from the prior year to $26.52 due to reduced maintenance spending, favorable mix impacts, and lower personnel costs, among other items.
Financing Update
As part of the company's comprehensive process to explore financing alternatives, the company engaged with its surety bond providers to reach a mutual agreement to support Peabody's continued reclamation efforts. In early November, Peabody reached a standstill agreement with its surety bond providers for the company's $1.6 billion surety program to resolve approximately $800 million of collateral requests made in the third quarter and limit future collateral requirements.
"We are grateful for the tremendous collaboration with our surety providers to reach a first-of-its-kind solution that offers a greater line of sight into Peabody's future collateral requirements," said Executive Vice President and Chief Financial Officer Mark Spurbeck. "The agreement lays the foundation for stability and provides the necessary support for our longstanding commitment to reclamation. We are now focused on continuing to work with our 2022 noteholders and revolving credit lenders to effectuate a holistic transaction that provides for maturity extensions and covenant relief, while maintaining sufficient operating liquidity and financial flexibility."
Providers of 99 percent of the company's surety bond portfolio have agreed to the following terms and conditions:
-- Under the terms of the transaction support agreement, Peabody will post
$75 million of collateral and provide second liens on $200 million of
certain mining equipment for the benefit of the surety providers.
-- In addition, Peabody will post an additional $25 million of collateral
per year through 2025 for the benefit of the surety providers. The
collateral postings will also further increase to the extent the company
generates more than $100 million of free cash flow (as defined in the
transaction support agreement) in any twelve-month period or has asset
sales in excess of $10 million.
-- Surety providers have agreed to a standstill through the earlier of
December 2025 or the maturity date of the company's credit agreement (as
amended or refinanced). During which time, surety bond providers agree
not to demand any additional collateral; draw on letters of credit
posted for the benefit of themselves; or cancel, or attempt to cancel,
any existing surety bond.
Based on the company's current outlook, it is probable that Peabody's fourth quarter 2020 results will not be sufficient to meet the minimum required net leverage ratio as defined under the revolving credit agreement. Peabody has been engaged in discussions with its revolving credit lenders and an ad hoc group of 2022 noteholders. While no agreement has been reached with these parties to date, Peabody expects to continue to have discussions with all or certain of these constituencies in the future. The surety standstill outlined above is contingent upon the company ultimately completing a deal with its revolving credit lenders and 2022 noteholders by Dec. 31, 2020, which can be extended at the company's discretion to Jan. 29, 2021 for purposes of increasing participation.
The additional collateral demands and probable financial covenant noncompliance under the revolving credit facility, requires that the company's debt be reported as current on its balance sheet as of Sept. 30, 2020. Upon completion of a comprehensive resolution with its revolving credit lenders and 2022 noteholders, Peabody would expect its debt to be classified as current or non-current based upon the timing of its stated maturity.
Operational/Portfolio Update
The company has benefited from a comprehensive improvement program with board oversight across operational and functional aspects of the business, and continues to drive structural changes throughout the organization.
Actions recently taken include:
-- Further scaled back production and the workforce at Wambo Underground,
including temporarily suspending production for 59 days during the third
quarter in response to challenging demand conditions. The mine is
focused on enhancing its competitive position to enable continued mining
in the current district post-2021.
-- Temporarily idled Shoal Creek in early October to reset the cost
structure of the mine. Costs per ton in 2020 have been elevated due to a
combination of weak demand, lower productivity rates, and poor
geological conditions in the final H-panel. Production is expected to be
suspended for the next several months. Idle costs are anticipated to
average approximately $4 million per month.
-- Idling an excavator fleet at Moorvale in November in light of elevated
inventory levels and weak pricing.
Other initiatives, including the following, are also underway across the portfolio:
-- Resetting Metropolitan's cost structure by improving development rates
and scaling the mine to reduce longwall output in periods of weak market
conditions. In addition, the mine is in discussions with its customers
and workforce to reach agreements that best serve the needs of all
stakeholders and enable the mine to continue to operate during
challenging market conditions.
-- Middlemount is beginning to see the benefits of a recent change in
management earlier this year, along with recognizing cost improvement
initiatives. Fourth quarter Middlemount volumes are fully committed amid
improving customer demand.
-- Sharing of production at the United Wambo joint venture is anticipated
to begin later this year. While production will be lower in the near
term, Peabody will benefit from lower strip ratios and access to
otherwise stratified reserves, enabling continued production of a
high-quality seaborne thermal product.
-- The North Goonyella commercial process and review of strategic
alternatives is ongoing.
-- In the U.S., Peabody intends to continue to adjust to changing demand
profiles and enhance its competitiveness against natural gas and
subsidized renewables following the termination of its PRB/Colorado
joint venture agreement with Arch. In September, the court issued its
decision to support the FTC's efforts to block the transaction.
Market Update
The global economy is showing a marked improvement in industrial production, even as the timing of a recovery varies across countries and sectors. Seaborne coal pricing remains muted and below pre-pandemic levels and rising COVID-19 cases worldwide continue to pose a threat to commodity pricing.
Steel industry fundamentals are improving in most regions relative to COVID-driven lows earlier in the year, although seaborne met coal demand has yet to recover to pre-pandemic levels. While China is leading the steel production recovery, met coal imports have been muted given unofficial import controls. In addition, year to date through September, India's met imports fell 8 million tonnes compared to the prior year. Looking ahead, Peabody projects global seaborne met coal demand to show consistent, albeit modest, growth over the next several years. During this time, India is expected to account for the vast majority of overall demand growth amid significant steel capacity additions and lack of domestic reserves. ASEAN countries are also projected to be a notable contributor to growth as demand in Japan and Korea remains largely stable. Australia is projected to continue to account for more than 50 percent of seaborne supply.
Within seaborne thermal, weak demand continues to pressure prices. India imports have declined 24 million tonnes due to inventory overhangs and higher domestic production, while China imports are down 9 million tonnes year to date through September. ASEAN countries are the only major importing regions showing sizable year-over-year growth, with imports up 9 million tonnes year to date through September. Longer term, coal is expected to maintain a leading position in the electricity generation mix. In absolute terms, coal is expected to grow while its share of overall generation is expected to decline. ASEAN countries and India are expected to be drivers for seaborne coal demand growth due to increased electrification and economic gains. This growth is anticipated to more than offset sharp declines in global coal use from developed economies, including the U.S. and Western Europe. From a supply-side perspective, year-to-date thermal exports for every major exporting country are down relative to the prior year. Indonesia leads the decline with thermal exports down 34 million tonnes, followed by Colombia and the United States. In fact, Colombia exports marked an all-time low in September.
In the U.S., the impacts of COVID-19 have accelerated a multi-year decline in coal demand. Year-to-date through September, coal generation is down 24 percent and represents 19 percent of the overall generation mix. While still at elevated levels, strong summer draws have lowered U.S. utility coal inventories to just under 130 million tons, or approximately 56 days based on maximum usage. Current natural gas forwards are above $3.00 for the remainder of the year and into 2021.
Outlook
Based on current estimates, fourth quarter seaborne volumes are expected to improve modestly, while U.S. thermal volumes are expected to decline slightly compared to the third quarter. Seaborne met costs are anticipated to rise primarily due to a planned longwall move at Metropolitan and changes in product mix, while seaborne thermal costs are expected to be largely in line with the third quarter. Current fourth quarter 2020 priced and committed sales are as follows:
-- 23 million tons of PRB sales at an average realized price of $11.28 per
ton
-- 5 million tons of other U.S. thermal sales at an average realized price
of $36 per ton
-- 2 million tons of seaborne thermal export sales at an average realized
price of $47 per short ton
-- 0.7 million tons of seaborne met sales at an average realized price of
$88 per short ton
In addition, 2020 full year capital expenditures and SG&A have been reduced to approximately $185 million and $105 million, respectively.
Current 2021 market expectations reflect improvement in seaborne coal demand as economies continue to recover from COVID-19. In addition, modestly higher forward natural gas prices are expected to offset the impact of additional retirements within the U.S. thermal market. Other factors that will determine Peabody's 2021 sales volume include the anticipated resumption of production at Shoal Creek in early 2021 as well as lower production due to the United Wambo joint venture transition.
Today's earnings call is scheduled for 10 a.m. CT 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 Nine Months Ended Sept. 30, 2020 and 2019
---
(In Millions, Except Per Share Data)
Quarter Ended Nine Months Ended
---
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
---
Tons Sold 34.7 44.8 98.6 124.7
Revenues $
671.0 $
1,106.4 $
2,143.9 $
3,506.0
Operating Costs and Expenses (1) 550.9 905.5 1,886.7 2,711.5
Depreciation, Depletion and Amortization 72.2 141.5 266.5 479.4
Asset Retirement Obligation Expenses 14.3 15.5 46.0 44.6
Selling and Administrative Expenses 27.2 32.2 77.3 107.8
Restructuring Charges 8.1 0.7 31.1 1.3
Transaction Costs Related to Joint Ventures 6.0 8.2 23.1 9.8
Other Operating Loss (Income):
Net Gain on Disposals (2.5) (1.1) (10.4) (2.8)
Asset Impairment - 20.0 1,418.1 20.0
Provision for North Goonyella Equipment Loss - 24.7
North Goonyella Insurance Recovery - (125.0)
Loss from Equity Affiliates 10.6 20.7 25.7 7.5
Operating (Loss) Profit (15.8) (36.8) (1,620.2) 227.2
Interest Expense 34.9 35.4 102.3 107.2
Interest Income (1.6) (7.0) (7.1) (22.5)
Net Periodic Benefit Costs, Excluding Service Cost 2.8 4.9 8.3 14.6
Net Mark-to-Market Adjustment on Actuarially Determined Liabilities 13.0 13.0
(Loss) Income from Continuing Operations Before Income Taxes (64.9) (70.1) (1,736.7) 127.9
Income Tax (Benefit) Provision (0.1) 4.2 2.7 26.0
(Loss) Income from Continuing Operations, Net of Income Taxes (64.8) (74.3) (1,739.4) 101.9
Loss from Discontinued Operations, Net of Income Taxes (2.3) (3.8) (6.8) (10.6)
Net (Loss) Income (67.1) (78.1) (1,746.2) 91.3
Less: Net Income (Loss) Attributable to Noncontrolling Interests 0.1 4.7 (5.1) 12.8
Net (Loss) Income Attributable to Common Stockholders $
(67.2) $
(82.8) $
(1,741.1) $
78.5
Adjusted EBITDA (2) $
95.4 $
159.2 $
155.6 $
643.3
Diluted EPS - (Loss) Income from Continuing Operations (3)(4) $
(0.66) $
(0.77) $
(17.76) $
0.83
Diluted EPS - Net (Loss) Income Attributable to Common $
(0.69) $
(0.81) $
(17.83) $
0.73
Stockholders (3)
(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
September 30,
2020 and
2019,
weighted
average
diluted
shares
outstanding
were 97.9
million and
102.2
million,
respectively.
During the
nine months
ended
September 30,
2020 and
2019,
weighted
average
diluted
shares
outstanding
were 97.6
million and
107.4
million,
respectively.
(4) Reflects
(loss) income
from
continuing
operations,
net of income
taxes less
net income
(loss)
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 Nine Months Ended Sept. 30, 2020 and 2019
---
Quarter Ended Nine Months Ended
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
Tons Sold (In Millions)
---
Seaborne Thermal Mining Operations 4.6 4.9 13.8 14.1
Seaborne Metallurgical Mining Operations 1.1 1.8 4.2 6.2
Powder River Basin Mining Operations 23.6 30.2 65.0 80.5
Other U.S. Thermal Mining Operations (1) 4.8 7.2 13.5 22.3
Total U.S. Thermal Mining Operations 28.4 37.4 78.5 102.8
Corporate and Other 0.6 0.7 2.1 1.6
Total 34.7 44.8 98.6 124.7
Revenue Summary (In Millions)
---
Seaborne Thermal Mining Operations $
163.0 $
249.5 $
526.1 $
720.7
Seaborne Metallurgical Mining Operations 78.8 216.3 363.6 831.7
Powder River Basin Mining Operations 264.8 333.6 737.2 903.5
Other U.S. Thermal Mining Operations (1) 179.8 326.4 524.1 970.8
Total U.S. Thermal Mining Operations 444.6 660.0 1,261.3 1,874.3
Corporate and Other (15.4) (19.4) (7.1) 79.3
Total $
671.0 $
1,106.4 $
2,143.9 $
3,506.0
Total Reporting Segment Costs Summary (In Millions)
(2)
---
Seaborne Thermal Mining Operations $
127.7 $
172.7 $
408.0 $
474.8
Seaborne Metallurgical Mining Operations 106.1 232.5 459.7 704.7
North Goonyella Equipment & Development Costs (3) - 29.3 60.7
Seaborne Metallurgical Mining Operations, Excluding North Goonyella 106.1 203.2 459.7 644.0
Equipment & Development Costs
Powder River Basin Mining Operations 186.5 262.9 594.2 756.2
Other U.S. Thermal Mining Operations (1) 128.2 244.1 401.1 729.5
Total U.S. Thermal Mining Operations 314.7 507.0 995.3 1,485.7
Corporate and Other 7.4 1.2 42.4 41.1
Total $
555.9 $
913.4 $
1,905.4 $
2,706.3
Other Supplemental Financial Data (In Millions)
---
Adjusted EBITDA - Seaborne Thermal Mining Operations $
35.3 $
76.8 $
118.1 $
245.9
Adjusted EBITDA - Seaborne Metallurgical Mining Operations (27.3) (16.2) (96.1) 127.0
North Goonyella Equipment & Development Costs (3) - 29.3 60.7
Adjusted EBITDA - Seaborne Metallurgical Mining Operations, (27.3) 13.1 (96.1) 187.7
Excluding North Goonyella Equipment & Development Costs
Adjusted EBITDA - Powder River Basin Mining Operations 78.3 70.7 143.0 147.3
Adjusted EBITDA - Other U.S. Thermal Mining Operations (1) 51.6 82.3 123.0 241.3
Adjusted EBITDA - Total U.S. Thermal Mining Operations 129.9 153.0 266.0 388.6
Middlemount (4) (11.1) (18.8) (27.2) (4.9)
Resource Management Results (5) 1.0 2.3 9.8 6.0
Selling and Administrative Expenses (27.2) (32.2) (77.3) (107.8)
Other Operating Costs, Net (6) (5.2) (5.7) (37.7) (11.5)
Adjusted EBITDA (2) $
95.4 $
159.2 $
155.6 $
643.3
Note: See footnote explanations on following page
Supplemental Financial Data (Unaudited)
For the Quarters and Nine Months Ended Sept. 30, 2020 and 2019
---
Quarter Ended Nine Months Ended
---
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
Revenues per Ton - Mining Operations (7)
---
Seaborne Thermal $
35.28 $
51.06 $
38.14 $
51.14
Seaborne Metallurgical 71.88 120.94 87.16 134.80
Powder River Basin 11.26 11.02 11.35 11.22
Other U.S. Thermal (1) 37.20 45.45 38.67 43.52
Total U.S. Thermal 15.68 17.62 16.07 18.22
Costs per Ton - Mining Operations (7)(8)
---
Seaborne Thermal $
27.59 $
35.33 $
29.58 $
33.69
Seaborne Metallurgical 96.87 130.01 110.20 114.22
North Goonyella Equipment & Development Costs (3) - 16.38 9.84
Seaborne Metallurgical, Excluding North Goonyella Equipment & 96.87 113.63 110.20 104.38
Development Costs
Powder River Basin 7.93 8.69 9.15 9.39
Other U.S. Thermal (1) 26.52 34.00 29.60 32.70
Total U.S. Thermal 11.10 13.54 12.68 14.44
Adjusted EBITDA Margin per Ton - Mining Operations (7)(8)
---
Seaborne Thermal $
7.69 $
15.73 $
8.56 $
17.45
Seaborne Metallurgical (24.99) (9.07) (23.04) 20.58
North Goonyella Equipment & Development Costs (3) - 16.38 9.84
Seaborne Metallurgical, Excluding North Goonyella Equipment & (24.99) 7.31 (23.04) 30.42
Development Costs
Powder River Basin 3.33 2.33 2.20 1.83
Other U.S. Thermal (1) 10.68 11.45 9.07 10.82
Total U.S. Thermal 4.58 4.08 3.39 3.78
(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 Nine Months Ended
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
(In Millions)
Tons sold 0.4 0.2 1.2 1.2
Depreciation, depletion and amortization and asset retirement obligation $
9.2 $
8.2 $
23.5 $
15.3
expenses
Net interest expense 4.1 2.4 10.0 6.4
Income tax benefit (4.7) (7.5) (11.7) (1.6)
(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 Sept. 30, 2020 and Dec. 31, 2019
(Dollars In Millions)
(Unaudited)
Sept. 30, 2020 Dec. 31, 2019
Cash and Cash Equivalents $
814.6 $
732.2
Accounts Receivable, Net 192.9 329.5
Inventories 319.7 331.5
Other Current Assets 209.2 220.7
Total Current Assets 1,536.4 1,613.9
Property, Plant, Equipment and Mine Development, Net 3,152.3 4,679.1
Operating Lease Right-of-Use Assets 44.9 82.4
Investments and Other Assets 122.4 139.1
Deferred Income Taxes 4.9 28.3
Total Assets $
4,860.9 $
6,542.8
Current Portion of Long-Term Debt $
1,600.1 $
18.3
Accounts Payable and Accrued Expenses 774.3 957.0
Total Current Liabilities 2,374.4 975.3
Long-Term Debt, Less Current Portion - 1,292.5
Deferred Income Taxes 28.9 28.8
Asset Retirement Obligations 671.2 654.1
Accrued Postretirement Benefit Costs 419.6 593.4
Operating Lease Liabilities, Less Current Portion 7.1 52.8
Other Noncurrent Liabilities 258.9 273.4
Total Liabilities 3,760.1 3,870.3
Common Stock 1.4 1.4
Additional Paid-in Capital 3,361.0 3,351.1
Treasury Stock (1,368.9) (1,367.3)
(Accumulated Deficit) Retained Earnings (1,144.1) 597.0
Accumulated Other Comprehensive Income 201.3 31.6
Peabody Energy Corporation Stockholders' Equity 1,050.7 2,613.8
Noncontrolling Interests 50.1 58.7
Total Stockholders' Equity 1,100.8 2,672.5
Total Liabilities and Stockholders' Equity $
4,860.9 $
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 Nine Months Ended Sept. 30, 2020 and 2019
---
(Dollars In Millions)
Quarter Ended Nine Months Ended
---
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
---
Cash Flows From Operating Activities
Net Cash Provided By (Used In) Continuing Operations $
23.0 $
179.2 $
(9.7) $
577.8
Net Cash Used in Discontinued Operations (2.0) (3.6) (22.4) (25.2)
Net Cash Provided By (Used In) Operating Activities 21.0 175.6 (32.1) 552.6
Cash Flows From Investing Activities
Additions to Property, Plant, Equipment and Mine Development (46.1) (86.0) (131.9) (182.8)
Changes in Accrued Expenses Related to Capital Expenditures (0.6) (5.8) (14.9) (5.6)
Insurance Proceeds Attributable to North Goonyella Equipment Losses - 23.2
Proceeds from Disposal of Assets, Net of Receivables 3.4 11.8 15.4 27.6
Amount Attributable to Acquisition of Shoal Creek Mine - (2.4)
Contributions to Joint Ventures (83.2) (106.8) (275.2) (326.4)
Distributions from Joint Ventures 82.8 111.2 271.0 316.7
Advances to Related Parties - (8.0) (23.1) (12.5)
Cash Receipts from Middlemount Coal Pty Ltd - 14.7
Other, Net (0.1) (0.7) (0.1)
Net Cash Used In Investing Activities (43.8) (83.6) (159.4) (147.6)
Cash Flows From Financing Activities
Proceeds from Long-Term Debt 60.0 360.0
Repayments of Long-Term Debt (71.1) (6.4) (81.0) (23.9)
Payment of Debt Issuance and Other Deferred Financing Costs - (5.6) (6.4)
Common Stock Repurchases - (144.2) (300.2)
Repurchase of Employee Common Stock Relinquished for Tax - (1.6) (12.3)
Withholding
Dividends Paid - (14.6) (243.9)
Distributions to Noncontrolling Interests - (9.0) (3.5) (23.4)
Other, Net - 0.1 0.1
Net Cash (Used In) Provided By Financing Activities (11.1) (179.7) 273.9 (610.0)
Net Change in Cash, Cash Equivalents and Restricted Cash (33.9) (87.7) 82.4 (205.0)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period 848.5 900.1 732.2 1,017.4
Cash, Cash Equivalents and Restricted Cash at End of Period $
814.6 $
812.4 $
814.6 $
812.4
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 Nine Months Ended Sept. 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 Nine Months Ended
Sept. Sept. Sept. Sept.
2020 2019 2020 2019
(Loss) Income from Continuing Operations, Net of Income Taxes $
(64.8) $
(74.3) $
(1,739.4) $
101.9
Depreciation, Depletion and Amortization 72.2 141.5 266.5 479.4
Asset Retirement Obligation Expenses 14.3 15.5 46.0 44.6
Restructuring Charges 8.1 0.7 31.1 1.3
Transaction Costs Related to Joint Ventures 6.0 8.2 23.1 9.8
Asset Impairment - 20.0 1,418.1 20.0
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 (0.5) (1.6) 0.3
and Amortization of Basis Difference Related to Equity Affiliates
Interest Expense 34.9 35.4 102.3 107.2
Interest Income (1.6) (7.0) (7.1) (22.5)
Net Mark-to-Market Adjustment on Actuarially Determined Liabilities 13.0 13.0
Unrealized Losses (Gains) on Economic Hedges 16.1 18.0 11.3 (44.2)
Unrealized Gains on Non-Coal Trading Derivative Contracts (0.7) (0.3) (3.6) (0.2)
Take-or-Pay Contract-Based Intangible Recognition (1.5) (2.7) (6.8) (13.9)
Income Tax (Benefit) Provision (0.1) 4.2 2.7 26.0
Adjusted EBITDA (2) $
95.4 $
159.2 $
155.6 $
643.3
Operating Costs and Expenses $
550.9 $
905.5 $
1,886.7 $
2,711.5
Unrealized Gains on Non-Coal Trading Derivative Contracts 0.7 0.3 3.6 0.2
Take-or-Pay Contract-Based Intangible Recognition 1.5 2.7 6.8 13.9
North Goonyella Insurance Recovery - Cost Recovery and Business - (33.9)
Interruption (1)
Net Periodic Benefit Costs, Excluding Service Cost 2.8 4.9 8.3 14.6
Total Reporting Segment Costs (3) $
555.9 $
913.4 $
1,905.4 $
2,706.3
Net Cash Provided By (Used In) Operating Activities $
21.0 $
175.6 $
(32.1) $
552.6
Net Cash Used In Investing Activities (43.8) (83.6) (159.4) (147.6)
Add Back: Amount Attributable to Acquisition of Shoal Creek Mine - 2.4
Free Cash Flow (4) $
(22.8) $
92.0 $
(191.5) $
407.4
(1) We recorded a $125.0 million
insurance recovery during
the nine months ended
September 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 nine months ended
September 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 nine months ended
September 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 provided by (used
in) 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 Sept. 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)
Sept. 30, 2020 Dec. 31, 2019
Current Portion of Long-Term Debt $
1,600.1 $
18.3
Long-Term Debt, Less Current Portion - 1,292.5
Less: Cash and Cash Equivalents (814.6) (732.2)
Net Debt (1) $
785.5 $
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
