BTU - Earnings call transcript Q3 2021 | Peabody Energy Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the Peabody Q3 2021 Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded today, October 28, 2021. I would now like to turn the conference over to Alice Tharenos, President of Investor Relations and Communications. Please go ahead.

Alice Tharenos

for XXXX. Earnings thanks third for and of quarter morning joining Call Peabody's the Good today President me Spurbeck. With are CFO, Grech; Mark and and CEO, Jim

the along We now over encourage forward-looking to consider SEC. statement a Within I'll factors turn of public you find to referenced filings risk well the there, reconciliation measures. call as our Jim. as on financial non-GAAP the you'll release, with the information our with

James Grech

third performance good with everyone. coal and Peabody increased quarterly had benefiting seen have the Thanks, current our seaborne results for Alice, and from not very results since good morning, market a dynamics, coupled pricing quarter robust global XXXX. we demand strong global operational with

to margins, market By thanking for increase start and be focus resilient We our our advance reducing production. to on workforce working continue removing to in expanding I cycles. company actions obstacles our by levels, global the to and debt like to efficiently. continued would all their safely position

are issues markets, index the segment rains and and rail markets our global but of favorable supply remains a in coal outlook of operating near we story also hampered strong in China. in Heavy Peabody. compelling the thermal are returning supply coal market demand as all medium excelling the pre increased near seaborne prices The Colombia for to levels. production near tight coal issues seeing in term, our elevated providing response and domestic demand and term globe, indicators each Indonesia, demand Russia, strong to expected metallurgical and to efforts to record dedication in because muted. in and due market The not pandemic to for are with remain coal We workforce. talented Across only market is segments

wind pressure market. on Europe combined the generation Additionally, and have gas in all thermal global supply low constraints to positive

production, steel steel and by met being margins seaborne is market and While tight decade coal bolstered robust a availability. high

met tonnes XXXX, XXXX. and with million For export thermal X are in with of production production expected coal mines, that incremental line

to are In indicators We this advantage it. thermal compared electricity and margins XX% shared demand leading XXXX. Overall coal to will as and the electricity coal with the looking to in increased over generation gas first to increasing taking to natural forward also X% coal growth for that prior well of generation demand US, of months coal we year. favorable switching, year, come with demand gas approximately market and positioned high are last anticipate nine and the robust prices increased with electricity the are

have have XXXX, As we and supply by a seen whole that inventories the high result million level levels since generation at driving increased this demand tons quarter XXXX. XX up coal Natural fallen response, year-to-date, prices gas of approximately since demand. lowest not

continued the high towards During tonnes near anticipate XX% coal rose currently gas. are supporting demand volumes next for incremental expectations end the coal operations, some XXXX range term. in demand At prices We and PRB PRB first strong increase to some volumes prices balances forward of prices of forward and and XXXX. coal for the elevated trending Peabody have year. the guidance uncommitted our of high Those leading export approximately and natural nine year. prior compared are consumption Supply months are utility to for

to million tonnes other contracts. up by our demand. volumes demand selling those uncommitted At US current are customer multi-year X we're increased supply, tonnes under thermal approximately next ramping operations, we given meet However, year exceeds only

So for for we small have and only sold portion left XXXX a to be XXXX.

the to deliver fuel impact operations projected volumes, shortages quarter, the labor our costs. and to Now of able offsetting turning were higher

years. Wilpinjong the the development. mind invest continue JV XXX to development increased thermal with we of to past box we over Within in equipment and full rates JV the to future run I'm segment, over development capital anticipate advance cut refurbishments Wambo happy in three to quarter, report million the projects continue the operate at work and with the addition, Wambo third a and invested both extension in our Open-Cut production was projects the QX. completed In seaborne

prior thermal in seaborne target and export compared the increases XXXX. quarter the margins Our is the quarters higher fourth from pricing on in benefited of compared volumes deliver prior segment as to to quarter XX% to and the

thermal robust quarter, settlement level. of mines US strong agreements of build reach years, and operation completed reached to segment several October, CMJV this And Creek productivity addition of with In improving business, we availability complex PRB have this see plan support at continued and importantly, Our improved the strategies. for this the market prior the through XX% cost have CMJV cost three the multi-year agreements. Metropolitan productivity The for deliver early sales we The five metropolitan long-term in margins to at next book next afford place. was ton while increased put that underpins both production and we agreements significant Illinois pricing. allowed impacted but restart to delivered met and through rates. we since year. contracts, US will workforce volumes later in XXXX. long the to back at on finally, generating At coal Colorado labor and the the us to through Seaborne year. agreement improvements the the And Metropolitan current mine Shoal a and metropolitan efforts XX-mile delivered lower expect to programs reached as term we per link renegotiated dynamics in realize another continued compared quarter, pricing well initiatives, sales has in that agreements, Creek continues sales higher and mines our production and compared to pricing assign EBITDA, Basin Met improvement seaborne to as several of expand been prices Notably, as quarter production XX% Metropolitan, mine have US our the The coal long that solid labor with as Shoal years, to

Our US asset globally coal other distinctly us benefit market allowing conditions. to unique us company is makes which for base, these diversified from many

confirmation value were results generate we our a QX of from can the Our mix. asset

by During have the the we debt raise shares. actions $XXX quarter, Date our to our we of continue this debt to to take cash common million. reduce also levels year, and levels approximately reduced issuance

close to our resilient platform the near allow in part initiatives all are production. will that be mines. steps to liabilities took also to and These Creek our on commitment improve term cycles. reduce to market also enhance progressing Wilkie to actions expand and and We closed mine our Millennium of our We're legacy us sale multiple of

our to at As in the underground to is of our Illinois significant rates, And half US, expected Moorvale back basin expanding be mines development full to produce our previously we're and term, year-over-year production production implementing first near increases will in at resulting quarter. in this in South, the our met will later bedding Longwall quality be export Shoal Creek run units plans volumes in And production volumes. the in CMJV boar XXXX. incremental in complex. and wild Metropolitan the extended which mentioned, life producing at at was seaborne the improved result in

to in increased enable In the relocating and PRB, refurbishing are addition, equipment production. we

US things markets, towards enhance to Our strength reduction. long-term turn cover I'll cash generation strategy investments remains asset financial. seaborne reweighed Mark to maximize through financial to and debt thermal now over the

Mark Spurbeck

good And morning everyone. Jim. Thanks,

and and market our substantial results reported Met both conditions US to generate demonstrated quarter our The improve segment our from as ability capture Third improving as strong portfolio. Seaborne results. well diverse asset thermal segments Seaborne margins

the million reported XXXX mid-XXXX to results million and other the through to metric The the at more from $XXX and increased contracts mine prior expected life be a a net relate of to mine. beginning hedge the three mark-to-market Reported the X.X were Third majority We more throughout quarters X.X to metric $XXX first optimization are tons of million. recognition in we the of million XX% XXXX. loss and at Net which times profitability quarter remaining and brokered will revenue reported blending million, second mined XXXX, million, underground the settle sales These $XX of in were of million transactions of by ingredient tonnes had including over tonnes $XX seven on September and a settled the $XXX than tonnes $XX prior tonne cold fourth metric contracted support our per tons, XXXX. securing strategy The EBITDA and XX, of totaled in of activities, X.X the of expected quarter year of are losses. of tons million Those half economic the Wambo average coal $XXX X.X our the highest production key prices common was in rate million, expected relate in than to of At primarily which hedges double $XXX mine. extend million shareholders and losses the $XXX hedges. of mark-to-market million million year. losses. unrealized and unrealized quarter relate adjusted by and in attributable to

extinguishment Importantly, million. retiring early strength, gain additional a resulting in in million we an took the debt senior of financial debt quarter, secured our enhance further net $XX action to $XX from of

year this million When million Net equity tonnes we approximately additional have under XX. hedged we toward margin an we million proceeds Outstanding coal cash to cash higher the currently That XX of prices currently million, $XXX we million ATM by now and hedges issuing sold, to economic Subsequent XX% remaining $XXX $XXX We approximately stock September debt are million program. cash and net decline raised and program. million more also price of after reverse margin had the retired quarter, will shares we of under million $XXX are common issued the $XXX to January the will shares cash September additional the outstanding approved cash At of XX, debt posted XX, either raised $XX or X.X as million spot at-the-market retired previously X the shares. discussed. equivalents. an price. realize these than related shares million X brings X. of In about at September available of

a transition compared $XX due Turning results, realized higher lower Longwall to in and of seaborne the the now than the at increase were average benefited EBITDA per to joint Cost prices Wilpinjong tonne and from thermal prior the prior to $XXX segment production to year. generated million segment year the venture.

to of ships million million of price sales $XX $XXX approximately at The average unfavorable an margins. of XX%. of rates, tonnes had including million costs. X.X generated of in $XX EBITDA cash margins fuel average higher Wilpinjong an $XX, recorded resulting Wilpinjong EBITDA export tons, million $XX and exchange average EBITDA the of adjusted in realized segment X.X cost addition at million, quarter, ton. Wilpinjong costs royalty In per of XX% of ton Met September $XXX $XX per with resulting price XX. and Seaborne and in realized

of U.S., the rise higher Seaborne million tonnes coal operations. royalties, labor due absenteeism to met portfolio the and quarter. costs recent CMJV. and shipments in EBITDA, and Met Met demonstrate higher challenges quarter Creek current improvement last related the The segments availability production were impacting higher in our this per at company's were Third costs compared with unfavorable XXXX. at the due more fuel delivered prices at year costs in year mines. for $XX rates Seaborne Metropolitan despite $XX than than continued production COVID segment despite of to several prior mines of lower international diversified to and approximately our the elevated value exchange XXX,XXX higher Shoal In Total ton And in by to the prices

ship mines at XX% XX.X in PRB the tonnes a Our margin. quarter million

tonnes margins. PRB weather thermal planned costs levels and also and thermal prices. maintenance, increased higher combined production EBITDA the the and of for impacted other In removal Both due other ship the US PRB The million and higher overburden the equipment to and X.X quarter. segment costs XX% mines events fuel generated higher

half Met of volumes as quarter we year, of X do is expected Seaborne million which with production continuing the export of to XX% year. year Creek tonnes, million Open-Cut those XX% volumes, second the the We to the X segment three expected million of at its The tonnes be finish ramp Wambo Wilpinjong X.X higher exports including seaborne to the tonnes, anticipate than remainder the Shoal thermal in the fourth to to lower with and with X the complete. is in approximately development recommence Wilpinjong first next tonnes million the unpriced. Costs quarter. anticipate quarter, ship full to up expected ahead is with fourth quarter to be Looking to third production are tonnes at strongest one through unpriced. are are of quarter, approximately

We quarter increase are planning quarter to volumes be slightly thermal substantially levels due to be for in costs and flat mix. and are PRB with higher over cash levels. to US for to Fourth other quarter fourth quarter the expected segments both third flows third

As favorable see in and of related hedges we pricing to each segments cash begin our to coal margin continue to reverse. the

and Lastly, continue be for like further of we strong costs questions. to to reducing Operator. advantage the now turn debt. call will taking I'd markets, disciplined, controlling over

Operator

with ahead Capital our [Operator Markets. And BMO and we'll go Instructions] David from question Gagliano take first

David Gagliano

for my Thanks questions. taking

give River in much committed for prices committed information, for was the that. the you In some that's but a I those, more I'll detail reach contracts average Powder PRB? you've Basin think are us out question. price is maybe for price I world average and the the what's XXXX the could given and thermal, the us that XXXX on wondering, First The minute. just volumes to the how in

James Grech

about good to PRB asking you're I'd talk also And since morning, take opportunity, the seaborne. David, about really our just XXXX the this Grech addressing here. is but whole like portfolio Jim to

QX will we But about forward since and not in you we're the when on So first I specific asked directions our results. And to ideas report in so many XXXX market with will you'd of segments, negotiations general associated prices. comment our for going. off, we're any give in going we're sales some prices do still

our We're domestic net with still forecast US we our volumes. to XXX in any that PRB. our for BTU starting for about still the with the looking be trending for we're year as So year, working next you earnings the of towards for on release. asked volumes. shown base higher We're this expect areas, our end tonnes upside And for upside

in year, next And deals. at sale times are level. multiyear them we come for remarks, are with have we my For said $XX I left limited million we that pricing, selling as

next to have we regards in sold. pricing that for tons year do Now for the

year. layering in prices layering whole sales been We are have we and through the

So we're at the the there. all not selling at are decks that price out current at

XX-million-ton on And tonnes improve upon that and the for that have next we So a case. comment looking is to But year at do that more able are again, we be to next unsold on volumes. we'll level those call.

projections have, thermal that sold The from the for and other base US that take tons we That release the X we are going have XXXX. that. production is on XXXX and mostly about coal to the of more earnings already in add we million

and US do sales some So upside upside the some to in the on we been tonne. our our PRB US exposure market. again, the of have We've layering in and have we some and other working in thermal

coal Met. seaborne Met that seaborne to the and market of Seaborne classifications thermal On us more have exposure we and the significant international seaborne gives the price there

unpriced our our of is questions next completely you'd all seaborne million at have year, all or cover And the tonnes you next unpriced at next market of about like year. think tons anything two-thirds mark the to tons segments I maintenance year maybe the the moment, David, so thermal are and the have are All your seaborne comment pricing on? so for to open any coal. we our over all open tried get to I once seven of are else exposure to for me X

David Gagliano

Yes.

for asking said, then the XX about you tell directly in? you have tell that. us contracts you at price total. much just us, PRB, shooting locked for left, timing of could when Well, that for price the how a Okay. you Instead you - in of Thank least follow-up quick specifically and to can roughly majority you wise, layered the already are the

James Grech

the now. say to a mid-year little been did in And the in think, layering mid-year done later I XX% year And what's that as next now, have That's till timeframe, been I know, sell in more since David. available to XX-million-ton available that it's September year. since less in bit to the to tons of sell at mid-year don't breakdown. And as than we don't it or that of I'll the far have probably layering I breakdown August, till level, We've but the for so. the of tons.

David Gagliano

the talk the Okay, that's up, real you little can year Thanks. just on gears Shoal more costs about Creek, XXXX? and detail volumes And helpful. for then just CapEx, switching incremental expected full cash quick ramp a

James Grech

to of that So go and we've end through XXst contract going signed union, XXXX. with contract is the that December the XXXX, the

plus for a the contract, for might have year. it's sitting three-year over been mine sitting a So has been

the then that in start startup we'll safety November, to plant, so in work. will be employees belts, get the we calling the And The to that prep our work result coal the equipment, surface. there us. some get to expect will back we'll at and training, And commissioning because producing expecting or done sometime now used work and extensive we started the plant, which with here Longwall yields the prep startup, improved all and was start that started for coal

getting our this through year. of we And So be this the of the stride through end up, started of start of year, to next all part end get hitting we'll towards expect and first year. that the to

levels. production the On

information unexpected Creek now, to costs don't year. As far be right Shoal capital we have or next for sustaining just for as normal, to next that any percentages for capital. year, And going it's release

David Gagliano

of can And you helpful. to Thanks. coal? export remind quick, that's us I'm real just And assuming that's quality market. the Okay, that the going all

Mark Spurbeck

it I are say, where would also market, is Yeah, David, today. It export is. given into the the markets Mark,

thinking probably product we've of volley XX. coking beyond that high that it product XXXX. way. is to a out and for as think I of a forward I'd going 'XX premium hard and be looked at kind Looking coal Historically,

David Gagliano

helpful. it's Okay, Thank you.

Operator

[Operator Instructions]. Please next question our ahead. Lucas We'll and ahead B-Riley Pipes Securities. go go take from with

Lucas Pipes

there up And of PRB morning, I open? very much Thank a follow contract Jim everyone. question on you the book. quick is good how XXXX, much. domestic have for the

James Grech

we've up me. I for have XX that have XX. But not even contracts, XX we little that with the multi-year percentage mentioned I'm going out we're we'll don't been know maybe in XX, have to a the I on sure follow that and When I open. Lucas, XX. number bit with you selling

Lucas Pipes

that But which assume would it. Got I mostly for Midwest be heard correctly that you're thermal out other on Colorado I both sold and XXXX?

James Grech

Both XXXX in year next and it's pretty Even sold about XXXX. to the million going production by out that years. X a we've for Yes. segment, though tons it's fairly we're increased much two

Lucas Pipes

Got it.

James Grech

be would Midwest assets XX That our mile. in

Lucas Pipes

it. Got

there. now that. appreciate Okay, historically, sold And maybe on believe switching lot seaborne about open I two-thirds the Japanese fiscal then helpful. you to you've I And that's thermal, year. of tonnage a had over

selling So your Thank of when remaining thoughts. Would kind the of would you. appreciate that you be two-thirds business?

James Grech

some of that of quarter some timing year of as of unpriced it for of of two year is is of this unsold as comes the that first will we said that, Well, block And and to but far probably of the market that, the it, amounts. that in and next pricing. end then the it's was rest percentage the it I are, index related to thirds there's sold. But pricing,

Lucas Pipes

short Thank of in provided you assume And QX. really last it. through Got kind obviously, recent flow terrific really really much of just you. pricing months, QX. term float that the helpful full in been maybe in one comments would then on regarding outlook, helpful. I And and has That's force a

said in prices, adjusted So in provide better high additional around you is I unique maybe you possible it free but flow substantially could wonder EBITDA, if investors? these of QX, help wondered, to times cash comments

Mark Spurbeck

have to million of at starting Yes. take export. maybe thermal. try tons And to Lucas, your Mark crack. I think We is quarter, three here, X really with looking I'll probably a seaborne question fourth

tons. Met an have From We of and for average about priced a for perspective, Seaborne X.X million looking at floating mean million those $XX. pricing. rest would about of tons X.X open The

changed haven't guidance. We our

have unpriced the little about year. the at priced We XXX over tonnes tonnes a X XXX,XXX million remainder of for and

Just tonnes XXX. for reference, QX was at X.X million

Lucas Pipes

between that [indiscernible]? of - have to quality coking the quality the do on provide the you color PCI you in terms coal unpriced yet, The able be of a breakdown unpriced as would of

Mark Spurbeck

don't front have that I Lucas. exactly in me of No,

you the if think first. one on thermal again, the seaborne think, I side about

that you sold to things is to at think X% got I high is unsold. majority APIX. Wambo at Wambo the truly Newcastle Wilpinjong it's product. of is the ash benchmark a a really XX% And discount one, look and two thermal

Lucas Pipes

Got it.

color Okay, well, and of best I comments appreciate your luck.

Operator

with question right, ahead next the go All we can from Nathan Capital Company. Benchmark take out Martin and

Nathan Martin

congrats think start Hey, my cost questions. the on And side everybody. on for the pricing guess good And morning, thanks discussed. been kind quarter. I'll the side, then of I taking I

costs he So the I maybe some in do put said ago. on and kind costs $XX really kind you Creek Creek? fourth material is decline number number to XQ full here Or of creep quarter-over-quarter ramp quarter pretty too a you that expect Shoal and a net guidance year Thanks. year Shoal their guess guys pressure had exploiters given the repeatable in of beyond? some that is, short high question that was of of

James Grech

a saw definitely in that quarter. costume third in the segment they and Yes, great

to I of lumpy. Longwall, at production drove quarter the really well lower. We ramp The higher up be those and over improve think really on in higher Metropolitan. Moorvale. were first two costs Moorvale that reasons the is rates full quarter at significantly tends as certainly for as production the coal that, production

We haven't and overall our costs. year guidance changed full

really But particularly and was two planned reasons. costs third expected. as quarter. for in these it the low those We're So

Nathan Martin

you would a pressure quarter in fourth to maybe those mean, bit I think tend little Creek, costs do And Mark regarding Shoal that

Mark Spurbeck

quarter to Creek, will on will into is at will higher blended be up be some question costs there be expect that put ramp that no also would some fourth Yes, to that the met results. we Shoal pressure begin segment,

Nathan Martin

we on if of early And look to some are there, My segments? especially maybe any given it. costs we're XXXX, marketplace. different then the just pressures how in thoughts trend seeing inflationary Got you. the Thank ahead

Mark Spurbeck

that things. not today, it for couple We industry. on our we we're probably One, being across main and XX% factors. a felt inflationary next are Certainly do XXXX use at costs, our call. two of Yeah, of look we'll pressures providing are XX guidance as cost reasons well. a global of about million Labor is is of couple labor tight fuel as well, the gallons

higher So components the of certainly and from some fuel of mines, an equipment. well, underground costs, steel, some as there's impact steel, the as well and as

these seeing of we're economy is is part a As very the felt really inflationary costs, it that being broadly.

margins to expecting those higher here than the see Fortunately, more we're that costs. is higher offsetting

Nathan Martin

us Got maybe, Mark, it could could you sales what segments? then or percentage kind With remind the sensitive of prices? of your different related you costs some makes And maybe for of sense.

James Grech

were XX% the broad probably royalty Yeah, XX% royalties, seaborne then PRB, the about they that revenues, in with about federal side, to from brushstroke, say cost the XX% on production, I'd on really of related, and and number.

Nathan Martin

that we're with just business power bigger in or I and you very you marketplace? the picture question. the some the playing Thanks. thoughts of in proposed that get around maybe helpful. can China Perfect, thermal headlines maybe price then talk more And of body's can finishing and Jim, regarding shortages, how your caps, seeing recently, see affecting a Maybe out

James Grech

to world only so product does X% their a Good much our in of I on our have China off, Yes, has need markets. affects to went a of not China. that, But in their Morning few XXXX, Peabody about the policies have and with coal coal first obviously, China what - historically, comments

goes the and markets. demand, so we factors. winter, And expect number into And a our for strong demand is it supply of next muted so, lot is are there's speculative any go a And the And that the back fundamentals of going always be to quick through and and of talk caps and constrained. from price the in there's is is, view the But But that trading policy, on about to fundamentals year. at a least stay supply responses to strong. we supply on.

the the it the that, as lot speculative prices, think is very we've fundamentals So, about we are that right going year. because in announcements next of for supply, still than to caps, be a price if you of expect take seen out and to trading to prices, fluctuations we demand now. stronger And continue as strong

Nathan Martin

And to I appreciate luck fourth Best Thanks. guys in you of the time information. Got it. Jim. those quarter. Thanks the for

Mark Spurbeck

we'll and you. our Gagliano Capital again ahead go And next Thank take with question from Markets. David BMO

David Gagliano

that unpriced. sorry I just just fourth hop the thermal export have one thing on. to to follow-ups Hi, the here. quarter implied want few I Again, on clarify a volumes are

I think it's Wilpinjong? X.X million to much versus X.X say was tonnes. Wambo How would you

Mark Spurbeck

answer front don't I have Yeah, we me. didn't - number in that of

Let to back David. us get that.

Alice Tharenos

- X.X we Wilpinjong have tonnes X.X Wambo On XXX,XXX have and we million tonnes.

David Gagliano

Right.

make So, okay, that sense.

Okay. I thought I misunderstood.

higher that the export and a give could defending? market US information export the Visibility's the into you on us pretty of other maybe volumes some is in of that this other can just if years, the proprietary Okay, issues, blended just be and market the these something thanks. little mine, at color curious, kind next much a that And understanding of sold thermal give for the XX-mile given actually out some potentially couple business low then average just like possible of us other kind or I'm regions for even business. thermal thermal of for in and destined it's how some price of on pricing more the the thing. going

James Grech

in. you about on to talk about pricing comment Okay, the Mark, markets if about so the the I after the want I'll talk markets.

the we mine, First mine in have off and our our other thermal, XX-mile and the we El mine. there, Midwestern Segundo then have

and markets quite that. of contracts there's mix of there's, cover a So that all

a export was to it's was year at or this to the the that that softer thing one is can amount again, out just index, a There we expect we market continue. that was earlier went the year don't off, when in in to in of one that David have price here there. tough, So But because call that small saying, US. XX-mile the mix of you one look

talked again, exporting So that sales that then a the Midwest. free domestic, forward going again, utilities at take domestic. about the be we XXXX certainly be the contract of almost mines, XXXX. through mines, going the coal in the we mine five-year had, consumption, that not to we all US that net of amount domestically the to signed really it's to XX-mile, is for to all we're in have, Midwestern for going coal a up also And large extension we is in that And that through

export pricing, any no we we have not point mix the of I'm mines of the pricing. it's to that complex, sure a tonnes category. get that a into be can there's the that specific that in that they at indicee there'll little of follow again, those that for To And So because mines. really

David Gagliano

question my because and Right, mix there it can in broad exactly. like us think average really was tell the us give locked just would And the within don't point the that with away things that, proprietary bucket? that the give you've you that that any of just - on side I weighted given information price

James Grech

still now, any and costs earnings some as mostly of pricing we give David, negotiations even are color we'll that not on right and we because said though tonnages, ongoing. we're call, information things next sold, giving out on forward our have

we're the pricing So here, until for not on comment to next we year. close out those going

David Gagliano

mine limitations I'm the capital in on capital at went there's XXXX. this of in quite to minute understand average And the a on into of question the can our last frame Creek information and changes. be segment, back I perhaps then Seaborne likely Okay, just context lower on bit that cost assuming Seaborne rest than a to of for Shoal bit lot of terms in obviously, of last of within Met a it, stage. the or quite a rest Creek segment. Met the year, Shoal structure, the my But you mine, cost the line for the at of the so higher cost

Mark Spurbeck

this, compare well. I will shutdown, I be mean, geology, I the had, we're Mark be costs where less prior as to has this in temporarily we'd than higher its we on expect you ended. David it mean, back been Shoal prior couple when probably to we temporary - higher you when the that one, ramped remember, just the to of end favorable it thoughts And results would that up Creek as at other met of actually historically higher look costs. we

So at you yields some to invest we back plant did we'll as up. lower, be the capital, higher as looking will be certainly mentioned improve that, start in this we but costs

David Gagliano

normal through after Okay, and those that? about then and costs, is XXXX? then of it's just a higher Or kind duration that QX of to saving number just talking we're

Mark Spurbeck

I normal to say for more expect run back would it higher referring XXXX rates be you'd to after that.

David Gagliano

Thanks. Okay.

Operator

Security. we'll right, and again, ahead All go Pipes our question, next Riley from B with Lucas take

Lucas Pipes

years, your you very but last the some your get elusive follow-up. M&A thoughts more likely the much Thank there. space? This subject to for less the much. I you my really been or on taking thoughts appreciate see you. and environment maybe few a very would out that. wanted over Thank on Jim consolidation, here I Thank team we has to Are

James Grech

been And other Yes, more improving, of those occur the of been the in think, be ago, anything, is does I two But in as or coal my versus was everybody's where market. do And lend liquidity things it's think of whether consolidation with issues has and companies, a I industry are past. and is M&A. prices well, in the than need capital year all availability many it money could Peabody used to that tools Lucas, that has it one to belief the capital along stock others improvements, have it's better, been would just just of to general the or since was elusive.

many structures, with still, there's market. players prices, still too strong consolidation these different even well do cost US the the there, out for particularly the cost just, side So would the on

of I capital still still And, liquidity, general is I'll So stronger was a more the occur. healthier coal availability to prices it a and for in but in challenge needs say lot segment. do again, think the anybody consolidation industry the with to stock

Lucas Pipes

portfolio, of say priority is less that is where are you'd priority. more about And than of there you this a a other think you strategic when when your maybe areas areas, strategic

portfolio be investors thoughts to optimized, So how would share I the you to with that? your appreciate as if very could much would

James Grech

said, historically. the for that on And and than can't the the And view debt. said cycles, frequent I I as we've thing volatility on company it severe is market more we number going Mark focus side strategy, supply down have seen to we that's is more pay Well, for historically. once focused and we one the just company, quick as and pay first is I be debt. think react our pay have down we debt become that down these and the think is Because more to which has resilient

would we've the any far and shareholders that year, looking investor pay both US, strategies down cost tell very debt. equipment organic and capital off Australia using by after first for run our and we is refurbishing Then to our looking own it in next So We've growth we're be assets. low talked people like hiring in minimal it's of had, the about at at to that that, equipment. away the tons, I'd investment. that tons increasing the It's sitting or that,

part do And So The growing we would into part and picking customers. organic at be selectively of some up that. have, that put looking would reserves the off next that, next few Lucas, what with of to be of growth a maybe say, I would our that the buckets. I

we with different opportunities things longer there, a do holder. surface renewables, the the and employees because are at be having attract contracts, to growing value capitalized there more lot that and But our we power to mines longer our thinking of with consolidation retain players, contracts, are out seeing other term is because there start And term with to there's whole do though I relationships, need large industry is ways property when need of in fewer them customers term customers of that. the a to you to generation, are needs longer occur. look One at we even general

those with that would our analysis of I of all and customers growing get things M&A. then for types So us say our growth down the force and

secular we thermal look and a is But US, the thermal the going Now producers to what for met. US to there even on it's the markets. we be at for in towards seaborne producers. decline, we where weighting M&A, dedicated that think both we also demand reliable favor growth the the are are still in are markets, sustained and the that's think do We though left will demand the to

and we And well they're we're for the the future US with comfortable we in the think what is colonies placed have, markets, see the United assets again, of the very so States. in

Lucas Pipes

Jim, Thank very And, much you. again, that. appreciate luck. best of

James Grech

Lucas. you, Thank

Operator

And are this Jim, no at it appears there further questions time.

James Grech

various execute your us to today. for insurance like joining employees concludes on for to thank especially all and for customers, you safety, our and like our I'd for call. also initiatives. investors, improvement cost remaining that focused I'd thank Operator, our on support. Well and continue our to providers continued vendors productivity thank

Operator

This concludes earnings participating. Thank you the QX presentation. Peabody for XXXX all

Peabody Energy (BTU) 28 Oct 212021 Q3 Earnings call transcript