BTU - Earnings call transcript Q1 2022 | Peabody Energy Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the Peabody Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following today’s presentation instructions will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today, April 28, 2022. I would now like to turn the conference over to Alice Tharenos. ahead. go Please

Alice Tharenos

thanks first and President Peabody’s call Spurbeck. earnings CEO, Good of for XXXX. the Mark CFO, quarter Grech; are With for Jim morning, and joining me and today

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

Jim Grech

and everyone. realize we results the morning, Alice, set the for of quarter, Thanks, the first good In remainder stage strong year. to the

Our dynamics and logistical persisting operations a are issues market products the our deliver strong we globally, with performed well for poised given faced. XXXX. operational to And strong

overcame to and Australia the shortages we in recapture plan labor COVID-induced of production record and instituted over challenges related a and recovery year. volumes to logistic During the remainder rainfall the quarter,

to sheet U.S. the seaborne we RX at and efforts initiatives with progression our launch progressing financial volumes plans for advanced expansion strategic strategies platform. mines, we our of mitigated And and Renewables, U.S. increase several While balance sales of the the strengthened risks.

Company remains and remaining cycles actions advance focus position be competitive and through to cost market levels. long-term Our in resilient sales debt all by the margins to expanded while capturing to production strategies, our reducing

efficiently, working shortages and would thank labor global our challenges. safely their given weather, to focus quarter, like Before I on on I logistical the expand employees for distractions and continued COVID, particularly from

and years a specifically of over of like a have teams, dedication efforts talented our workforce. the Francisco highlight without of four who plant significant to gone the both the is injury. success prep now achievement reportable result Shoal Creek Our I’d and

our imports of EU fundamentals Across market. market all continues continued the market segments demand Russia. European near-term exposure to imports supply pricing with of an segments already driven each mitigate coal ban upswell elevated Russian from buyers has impact seeking constraints. volatility be our the and demand on line. price ban, continues Russian caused the in the has announced total market in regions has significant be for outlook we markets supply increased to strong. Japan globe, now for the seaborne Seaborne The on with operating to remain coal and and to coal indicators, strong conflict. outside demand coal to indices already robust albeit turbulent unclear all also the tight of to this global market by an and further The and dynamics with market. time favorable Russia-Ukraine Turning anticipate And

ban Russian rains fuel heavy in remain COVID market outside coal thermal incremental Australia’s coal was we near export seaborne already stretched. the of and and of coal, Indonesian imposed the to to global and producers look the demand impacted limited a Overall, volatile to prices is conflict weather the producers elevated certain interruptions. importers expect January as supply supply coal government Within Thermal supply available impacted thermal term. by Russia-Ukraine balance supply with wet the prior pressured demand and from and and market, on

February year prior increased for renewable and U.S. Utility product especially the and average. seen a persists impacted the in demand risk constraints well traded since prices buyers fundamentals ban this LNG volume. products, trade some positively tons. underlying $X from of XXXX remain electricity Coal overall or generation with activity million States, have PRB increased remains below logistics X% strong conflict, reduction from Russian year-over-year, continues since rose with coal compared relatively the above approximately global not XXXX, first to of to weather. are of thermal gas logistic to in PCI about with U.S. remain XX% record expected met by export coal given X% and to of pricing. pushed demand weather demand for to United for high to flows. Russia wet markets present due Within year-over-year approximately Energy strong. Australian have to exports, hit global demand consumption have PRB high with production electricity the remainder comparatives as China’s and declined In outside a five-year X% in it its of China X market record market, for continued Natural accounts strong exposure, COVID, robust period. attempting margins suppress to the and to increased coal due In market from Russia-Ukraine constructive mitigate declined inventories the XXXX approximately at and demand of but continues global being traditional side harder production are unofficial impact metallurgical steel demand per due tight levels Combined, for on and to for place levels makes share generation. seaborne XXXX to decade Ongoing levels with industrial generation we the the steel coal indicators slightly storage supply. supply as moderate quarter, remaining Coal to levels shortages challenges. than decline MMBtu, electricity market even redistribute XX%. high December the as with Strong more very

these XXXX strong we’re a our terms pricing these proposal coal products. coal averages. at XXXX remaining seeing and of XXXX for dynamics compelling recent requests increases thermal dynamics, demand With set and of above in contracting for sales demand in stage All U.S. with prices our

quarter. first the to turning Now

hindered the across were for by plans COVID-related segment, remainder fourth quarter, we and In sequencing rains quarter. platform our As our were ratable seaborne of we the the in the volumes year. further as severe sales first thermal quarter below levels mine the first projected, results stage in progress through after as rainfalls record shortages set our stronger staffing reestablishment the

volumes a longwall these full scheduled in to a Underground. Wambo inventory Against to recapture started instituted and with recovery XXXX. of sales eye plan we Underground challenges, mine at move that Wambo with projected And three drew production guidance the until at we the our down longwall set will over for efforts Additionally, extend line XXXX. development an life panels we the additional year deliver to future, remainder

expect that Our seaborne while XXX,XXX longwall only we Shoal And as production higher with anticipated longwall completed. continued the selling volumes a we to the Creek, we substantially met inventory in to timing lower the be now drawn down the tons, line of XX,XXX commenced second progresses. ramp At segment year. at of The quarters quarter. quarter, a tons to which result A receive sequencing, higher coal has as And performed half Metropolitan, is compared production projected, in coals. high-vol producing saw prices year move, up other of with the mine in volumes will as as prior and second CMJV building higher costs prime in type which

with track Moorvale midyear. with of CMJV development on South complex, our at first are We coal anticipated

of from in metallurgical outside delivering ownership and operating strong the share productivity attributable benefit Middlemount continues to first of Now, tons XX% dynamics improvements, market quarter. XXX,XXX our our mines,

PRB, on increased for quarters. of reflective production our and rail Midwest, we a Our in volumes mines training other for of the existing both Demand up challenges recruiting extended costs sales several business thermal and we as And basins, are to new remove were and customers. overburden, performance and other PRB the for by our product projects following and PRB mines at ramp continuing investment and annual remainder U.S. executing both development logistics to onetime result and an workforce. fuel continue stage XXXX to the not incremental costs. are as completing volumes strong remains the the meet of setting we’ve higher this of this where with demand, we work the strong, through And challenges experiencing place to volumes In higher logistic new customer to overhauls deliver equipment year. for we prices been like

We PRB, choice, supply we for for XX customers be the strong of segment committed, us providing tons is thermal approximately XXXX, capturing U.S. market producer XXXX. and essentially that have prices. our position long-term to continue sales other explore the In while our to long-term security million strategies committed

for investments choice. ESG to stakeholders. can of support expanded customers commitment be believe better and the ambitions producer value our We offering adding and our practices our of emissions our being that to targets support net that coal also have by We strengthening ESG zero complementary value the a

to Our commitment for of taking new includes goals reduction by reduction operations assets targets emissions action establishment meet a and of and leveraging existing on targeted our projects technology. the pipeline emissions

also existing in emission and utility pursue step our ESG in land Indiana. important forward launched value energy battery the joint mining not an we better allow Renewables, renewable us of As coal quarter, RX ambitions, X support solar this scale to our projects on ambitions. venture storage formed the tracts to a of development but create zero from net previous and These Illinois only assets, customers’ supporting

simple. for vision of future coal position Our to want We the strengthen producer choice. continue to is as a our

resilient to by championing our excellence will in and a financial be and cycles grow practicing delivering products this allow maintaining do customers’ to all strength, needs, of will our We support diversity stakeholders. us with to This ESG operational practices.

XXXX. advanced the in working of through implement we in life to capture life to to and improve to We platform, And to changing reserves. flexibility platform, to Underground North on with until incremental of Goonyella us and land Moorvale three And volumes strategic we additional South returns the development extend are tons give In demand. the south our activity this multiple strategies initiatives. and begun plans at XX met customer to vision developed advancing of panels mine in progressing quality development the our of our U.S., addition plans Wambo extend million thermal to to the continue meet seaborne short-term potentially sales we project have and longwall CMJV,

we in into these at our And activities Boar importantly, remain the refurbishments. strength of and of balance examples Midwest financial Some PRB Wild on most are the complex new the expanding sheet. focused areas

cover and now convertible Mark notes made offering. we This things repayment financial additional completed details. quarter, turn a to over I’ll debt to the

Mark Spurbeck

good morning, and Jim, everyone. Thanks,

were We on First recorded and broad over XX% in platform pressures substantially a the strong sales were U.S. result segments. a of meet attributable reported the a shareholders $XX prices times year X in more net quarter. higher income substantially customer the adjusted have Costs billion, realized prior than to million to $XXX to from debt costs, share. per $XXX loss items, a for prior higher increase or This losses mark-to-market by demand. $X.XX activities inflationary million and unrealized production extinguishment. in early from net of impacted full-year million EBITDA loss hedging included volumes each of higher sales-sensitive the common million quarter been response $XX a would $X year prior charge period. than our coal thermal these from operating $XXX Absent reported million, of We the year, investments coal

about segment higher on X.X generated segment longwall $XX than per and sold overburden in $XXX. tons under Wambo COVID-related results. fourth The start and to XXX,XXX million move the segment priced of at million, the production production, hedge and rainfall, lower XXX,XXX the tons ratable of Turning at coal higher record and $XX XXXX impacted of delivery full-year staffing than The average by per shortages, ton now at of quarter, EBITDA Underground. less expected. lower thermal XXX,XXX to Both and metric Wambo tons cost costs, were quarter tons removal the program metric volumes as seaborne due first ton the in the

realized the resulting shipped price Wilpinjong adjusted of million of and generating export the to Costs prior part due for margins. volumes overburden as of approximately seaborne favorably quarter. of $XXX sales mine export expected the margin due fourth of the $XXX a XX%. million an increased tons, ton in ton of tons, higher lower at realized higher start and staffing $XX onetime quarter, the were average Wilpinjong removal lower including than the despite expected full Costs to than XXX,XXX million year. EBITDA. met for higher X tons. over from of impacted shipped remainder ratable during of cost less prices $XXX the per ton $XXX year X.X and PRB of segment tons quarter more realized the per EBITDA production sales, than to thermal The higher of prices Metropolitan increased an for X $XX costs fuel CMJV. at move of pressures the to from million ton about compared EBITDA EBITDA quarter million seaborne increase resulting the In and $XX at to Costs inflationary Wilpinjong The ton, production mines average per quarter. generated per quarter $X related As other delivered segment, shortages. costs the to million March U.S., XX% XX.X compared levels recorded due fourth longwall higher the to had mines million, of million $XX royalties, than the to segment million, per sequencing the our The tons and costs prices achieve in $X.XX EBITDA prior cash Higher quarter the also of delivered volumes. XX. with higher quarter the up

prices certain segment to realized costs XXX,XXX the fuel $X.X increased X.X while prices, margins production other shipped in XX%. higher enable Costs production rehabilitation tons to and tons The to U.S. increased EBITDA thermal Twentymile. activities quarter million at increased mines onetime Higher to due first million. higher

Next, items. a quick update on financing

demonstrate We XXXX. the retired to of We from cost strengthen the utilized $XX our retire commitment offering and $XXX to secured convertible senior and extend in maturity an secured the X.XX% to debt million higher unsecured continue notes sheet. debt balance proceeds additional quarter to senior million,

coal a underlying Newcastle the was all financing is XX drew with over as million $XXX volatility this our to repaid cash upward to which proceeds had the As coal we recover hedges in light XX.X we of million we ATM unprecedented of in note, support we and cash It prices, the expect coal the related sale XX. volatile previously the completed margin from result deliver of of physical requirements, posted important at quarter in the next fully million, cash program. shares under March of the In months. $XXX announced of facility

price exposure We underlying resulted hedge even million further the converting in reduced $XX fixed requirements transactions eliminated by of margin sales. initial return exchange-related on tons higher to tons of prices These also additional XXX,XXX approximately the in margin a requirements event margin. of and of

of hedge exposure settle and equivalents XXX,XXX tons remaining $XXX to cash of cash. metric restricted projected is At XXst, cash, with March XXXX. X.X remainder those the million Our tons had of we million over

XXXX turn let’s Now, our to outlook.

first and and quarter for higher we challenges investments inflationary to be segment, and are production of in are at full planned for prices, anticipated the tons royalties coal, seaborne quarters, subsequent In range year. due due higher higher of anticipated higher on levels and than are of the per pressures targets. the million Newcastle stronger expected X the prices. of tons ton continued thermal first costs currently the X the end Based increased spot production ash to the maintaining in year cost With production volume the exposed tons more year benchmark to export quarter, full and guidance million price including X to much Wilpinjong margins million coal remainder

longwall Wambo Wilpinjong’s we elevated to impacts completes mine quarter, from and cost reestablish the sequencing and production overburdening we as move. continue rate Second expect removal

are Second at average million higher from to Newcastle $XX to million of and an unpriced. X.X X.X expected tons tons product quarter benchmark XXX,XXX and XXX,XXX of seaborne increase tons priced thermal tons export with coal Wilpinjong of ash sales

to Moving seaborne met the segment.

Metropolitan of increase Second due are higher mix quarter million continues Shoal to Shoal quarter to at quarter anticipated longwall the to volumes the at ton ramp coal, than as for and higher Coppabella. per X.X costs sequencing are first be to tons a up. restart expected Creek Cost to Creek mine

provided Other million expected negatively the due Although COVID we investment of U.S. X to up year seaborne increase operations the a for disruption and lower guidance, shortages be end anticipated costs be rail platform beyond in uncertainty supply Costs segments staffing diminish. the of as volumes to impact to both are In higher our result higher higher to impacts onetime expected exist our year have second U.S. contracted PRB further considered quarter, continued anticipated and third In guidance customer for are today. guidance thermal to sales volumes costs. and the through full to pressures. higher chain first quarter, than to may are to widespread Full the lower be quarter performance PRB, the at is not tons. demand. expected meet the are quarter, to the ramp regarding does production first inflationary assuming

capital In turn now maintain to on was I’d the disciplined for the the are our full debt. reducing deliver year. achieved a will cash And challenges over we results face. strong higher Lastly, we summary, to of of platform our rest approach quarter further the across year volumes Operator? allocation, flows the and to results for reflect like year. we This to remainder track the in margins despite improved building first increasingly segments investments all questions. with for call

Operator

ahead Thank you. your David BMO [Operator with question. please Instructions] go Gagliano Capital Markets, Mr. with

David Gagliano

on for PRB to taking there’s come questions. with a my quite that Okay. down regards Thanks hedges costs within should stuff. and Obviously, going that bit all the company Wambo and the

on we’re side. still it weaving So, through our

actually operations to quarter. statement. flow question. million So, just the from the we a don’t cash you in to Can right a I’m -- don’t cash have $XXX cut Cash going full, flow believe, I negative was

some in give I negative few comes think in Q That’s drivers first the fairly big question. you I main just us a there? a as to for that Can cash the outflows. in were what days. sense meaningful my think, the onetime there’s

Mark Spurbeck

AP, million unrealized which Yes, of was also you additional capital quarter in morning, flow. building timing the that that. for Good due $XXX charges, of working negative operating It’s It on the that’s -- That is hedges margin It’s included There’s is coal mark-to-market largely Mark. cash David. referenced. inventory. posted. mark-to-market Wambo been to about million $XXX

David Gagliano

Okay.

the previously that capital actual correct? is well million of outflow, was there which $XXX cash on $XXX hedges. from And cash build as the outflow was Is it then, Sorry, disclosed that? top of an million working

Mark Spurbeck

That is correct.

David Gagliano

helpful. been know right. just just and others. question, And All this Okay. asked not then, by That’s those I me lines, by me along you’ve but

You allocation here, sense aside give second updated shareholder can is reduction. a mentioned surety a as first capital addressing focus thoughts for to plans the you debt bond us as and there? quarter Setting covenants regarding returns, additional

Mark Spurbeck

transparent We’ve of want the a Company to the couple has outstanding. debt things. that very Dave, been level reduce of Yes. we

to debt are convertible the that outstanding. leaving I senior that at convertible further X.XX% And the just would debt completed We down debt note secured with in pleased all look very and going the we reduction quarter. other eliminate

So, that’s repaid, number we’ll senior and have million credit Once $XXX letter facility, to one done. job bonds, getting of the secured as that mentioned. you debt address we the which surety backstops look

mentioned, one continue would of prohibit look debt, going Jim value. of And obligations we shareholders considered, opportunities. in example the first. senior So, prime funding, which comfortable we do table. to invest the the would We that, surety we’re certainly, we at Also, future is to shareholder organic is be opportunities to are be at of those on secured with reclamation. to for North interest looking need in shareholder return care take once that Goonyella, of would returns to the capital things that. All everything

David Gagliano

price tons release, terms million million commitments, PRB And Okay. increased in that’s committed XXXX I there’s just in XX tons. give an the you press a for to of for bullet, on sales information PRB XXXX? That’s Can XX more it committed that average then, us think, helpful. XXXX says the

Jim Grech

to RFP, and which of multiple the for we’re It’s the at for Yes. front point here. pace in RFPs ‘XX is ahead time. coal our, for years. I’ll selling more sales active potential this us willingness the year, of for have also out our next The in go -- usual the from Hey year for customers ‘XX. million say, tons from Dave, seeing following And XX for Jim we Grech

our at and we’re say give a at pricing, year. the than past, So, that far of not we’ve pricing change that our from to seen us is specific to year. out this it strong so Dave, what will going but PRB led what that in is for is average The higher position pricing time average the for I this moment, sold this

our So, helps the -- about And guidance complexity We about Btu the wanted know directional with if different XX.XX some of as give qualities. you out. going. some run that overall PRB where and just we’re a portfolio, too. to you know with I of to I point our average that

average seeing our than average, on So for for year. this numbers higher have we we’re prices

David Gagliano

Okay. million PRB That’s the all for just And What’s on next million. volume U.S. given helpful. thermal in growth dynamic of then on volume XXXX to read for actually quite the a Thank PRB volumes XX target the market early Peabody, year, coal XX you. sudden? for year, a this

Jim Grech

the would very and that, I into demand Dave. One two Well, this and the demand is there, is for factors year say, us next there’s strong year.

to get demand and later be and year, time year. good the going that next take of piece deliver It’s the the will ability to of later year, of them as capacity coal with continue have us this to the we the for that is much for I over there those them lead that up. which ship is get but or year, year. trained, all the should both The long staffing for have rail the challenges PRB have. run the to crews coal this there about more opportunity this to in to The second in producers is railroad feel and areas

year on, to stronger railroad as good coming tonnage the produce quarter giving on very not that things first we’re So, our they for operations as in we’ve keep demand, year us the in done lining position investment for goes ranges year. I with good be next if the But PRB. for up and think the are next strong guidance on could a year are,

David Gagliano

helpful. Thanks. That’s Okay.

one one. And sorry, quick last just

you to all you unrealized produced, how is I just outflow the clarify. all out the works you volume again to Can correct? that to mean, hedge come may confusion opportunity some -- wanted should Perhaps earlier. once regarding the be the -- come that will back for there cash really clarify give flagged Just that that there

Mark Spurbeck

Dave, right. Yes. that’s

we post at or X.X have the for today, ton ton, outstanding. the to have of $XX prices It’s average above to dollar million level, hedges very of dollar tons that per With essentially, think if trade to that it an above margin. and -- close And we in selling are Wambo losses, we And we as will we those $XX for do. the deliver open were per whatever for we it, post regard what metric $X March. margin. coal, which book lock we important that will $XX keep that So $X.X million that posted this difference we spot won’t the something between we in the prices, when we be do is make up the and

Operator

Lucas And next Securities have with our with Riley Pipes we question. B.

Lucas Pipes

talk I everyone. Hey. about bit QX. little morning, Good want to a

on seaborne of coal thermal side, X.X million So, expect you tons. the sales

tons. observe, I booked transparent investors and the is $XX, X.X million Newcastle. most have And not said that’s price that XXX,XXX leaves Wilpinjong you X And X, I the for that at million API XXX,XXX believe. to so given You think least tons, Wilpinjong, the tons

So, outlook could to prices QX Thank as market, today’s we a good point in you maybe Wilpinjong realizations? range for there on so you. have a reasonable

Mark Spurbeck

Yes. Good morning, Lucas.

discount roughly on tons unpriced, ash X export X. million API to a X.X as of tons product. ton. So, is X.X for at with API thermal, $XX, to a -- right, price of X are tons $XXX that priced you’re seaborne the you Wilpinjong million million quarter. is high there’s the the today XXX,XXX relates that at said, the That is for

a essentially the to ash, should a in to of XX% it’s take tons of are discount You XX% forward if the discount even get Newcastle, higher off And product. with then, benchmark there And that that little Wilpi be about bit line it could need higher price to to product curve. XXX,XXX that. to

Lucas Pipes

Got it. metric all are prices you the mentioned And tons.

So, the for well? you of short ton million as do conversion your metric tons X tons, short

Mark Spurbeck

Exactly.

Lucas Pipes

prompt it. there Got would Newcastle a or the What’s sell good benchmark helpful. month look for prompt on quarter? at? the you to And, tons That’s

Mark Spurbeck

That XXX,XXX been price this those reference for JRP, a for tons. will be the or Probably on those Japanese yet has lot not of year. tons settled

line As should a was $XXX for only of reference off a year, price. point, $XXX that with last in of it but it year view forward kind the current be

Lucas Pipes

you. helpful. I met for question helpful. That’s that. Very Thank coal. appreciate Okay. a And similar

you a composition tons, met? XXX,XXX So tons tons the $XXX. X.X for price million have at X.X realistic that open you hedged of expect million What’s sales of

Mark Spurbeck

coking yes, XX% it’s met an essentially XX% We -- premium coking look Wambo, platform -- at premium coal. At discount it’s a and at hard our about of about to hard coal.

Lucas Pipes

Sorry.

that coal? XX% pricing benchmark? pricing said XX% You was -- And at coking XX% hard the of at also

Mark Spurbeck

Now, level for coking hard price. there’s we met premium of to various or a clear, the be a on XX% benchmark products There’s achieved portfolio more. different coal, -- coal half dozen

Lucas Pipes

helpful. it. That’s Got

million, So, be you market, prices be been given in booked that have -- the remaining a could that -- tons, $XXX this quarter-to-date? XXX,XXX conservative on X.X where even the would indication of where you’d sell the

Mark Spurbeck

unpriced got you you think don’t it’s I you’d price or price-dependent, a and as above hard priced, much that tons X.X XXX,XXX to whatever coal. completely on the at million premium discount $XXX It’s coking position, but Yes. be said.

Jim Grech

Lucas, hi. Jim here.

that we XXX,XXX produced pricing Creek XX,XXX tons, the only remarks, we’d it. our In of on we’re maybe sold had that the example, but an moment. seeing mentioned Shoal As at

some have move. we inventory So,

tons far XXX,XXX And range $XXX about we moved so in of month-to-date at it in April. the XXX,XXX, month-to-date April, numbers in

seeing So, right Creek Shoal that’s the pricing type product of on we’re the now.

Lucas Pipes

helpful. Very, appreciate really I the color. very

Jim Grech

short-term so on clear. a a too, basis keep just basis, -- that’s on short-term it That’s

Lucas Pipes

Volume and respectively? price,

Jim Grech

Yes.

Lucas Pipes

Super.

but that seems noise and is side, cleared October, deal today, so -- again year this last up. On starting hopefully, earlier you’ve been that possibly it the having now, and get with hedge to to like

for kind XXX,XXX XXX,XXX per rolling year the of rest So, quarter tons you think XXXX, the for tons off have we XXXX, XXX,XXX tons should for of the XXXX for hedge? about

Mark Spurbeck

exactly not it’s flat. Lucas, Yes.

the So, you’re the of rest tons right on for the year.

second under this tons year. to in XXX,XXX going roll off Just quarter are the of

last home reference, tons at out the XXXX us Without to that for place of mine. Wambo in And the just would we cruise remaining have developing XX. go three in that put we’re life more to these we we So, to the extend I’d announced saw it’s mine will June back, to like than with if next -- -- leave X today, year. million early less life And place hedges important the we several just we panels years. it, extend Underground as you that sent for remember,

we’re open. we’d we this to extended while profitable And to year give spot for hedges. even the So, -- with this kept optionality coal that we’ve be love year, going those prices

Now, we’ve several extend life for that more been able years. to

Operator

with next question. has Benchmark The Martin Nathan Company our

Nathan Martin

last Maybe fixed you on the Good expect fixed for future? tons everybody. hedges convert those that to the one more a in prices to price, the Hey. Lucas with questions. just Thanks guys conversions follow-up near on morning, my hedged of possibly taking that to any -- do

Mark Spurbeck

It’s at, continue It essentially favorable forward finding it is the to terms, we look do to there’s forward. is at to a to continue that counterparties today’s prices. And do in an that Nate. there If lock something to want the opportunity for that, physical premium we will prices challenging. or

we So, want all of to for maintain our P&L. that optionality

So, look at we continue it. to

current with a the We do and maximize to spot we’re remaining that feel maximize liquidity perspective. in of good hedge position going in shareholder liquidity the Company’s Company. from We’re returns value the a

Nathan Martin

margin think you I right? requirements $XX reduced Is And said by XXX,XXX million. converted you to future that clarify, about that just the

Mark Spurbeck

Yes.

sales those it margin, exchange converted to and from we position, about million That of returned hedge So, got was prices just $XX then, physical open have fixed there’s million to then the positions. margin we requirements us. on margin future don’t changes open of back initial to the in any once eliminated an And tons. $XX return related

Nathan Martin

guys Is the transportation sales as it. it service, on of be those ranges cost talked then of it. And half to -- side. in higher, we guidance the about function rail as get buyer segments. side it cooperating all maintained a across the talk the Got your about. pressures higher hopefully, that the headwind, volume over cost Okay. the of start well. just pricing Obviously, move should some challenge looks to like you I mean, advantage year? towards inflationary maybe back will the with Maybe the of Maybe confidence shifting your the you start ranges. year, Got despite within

we that in you. saw any and do Thank how first the about similar to just onetime we here additional what think quarter? maybe So costs

Mark Spurbeck

from Maybe and start questions. Yes. backwards I’ll work your

costs, the $X.XX as about lot was platform, equipment as of overburden, pit that our costs. inventory, Really, again set room in so goes that’s U.S. and the costs removal refurbishments forward. the onetime kind to essentially of investments a in some On on onetime going well mobilization really away U.S. contractor That

a Similar dragline expect in there. and U.S. pit was some headcount and There development some a we thermal reduction portfolio. refurbishment. the other So,

to in some really is in And there, the overall those out issue Jim rail is a with those So, to drove first critical. those PRB costs. Obviously, behind are us. important here as rail getting is going quarter. achieving the be volume mentioned, up costs Again, the volumes key

the staff up up On absenteeism COVID-related the and seaborne rainfall and second longwall move or costs and record platform, at wet in in shortages, quarter. just weather also started, that quarter. really here will finished the first the drove be Wambo significantly There’s that a

logistics now. in as finish continues probably reestablish -- the in first when wet impacts, still seaborne the cost as And from good quarter really We $X earlier mentioned mean this of all getting and of a of wildcard out a recover Shoal completely for I be in and not with rainfall. But, could that and platform was as a but we record in certainly, kind the my up second we’re seaborne to hopefully Creek expect and I up tick COVID the guidance, the continues drove higher look rain. quarter do as expect rest right mean, in mine -- that elevated do second up costs a we to to continue it coal an in to the supply at the remarks, we season costs $X the I chain quarter. performance proportion impact quarter. Wilpinjong ramp and the We be sequencing panel staffing the and So, it platform. on well rain out I the low-yielding those year and of or think to have real those

Jim Grech

fleet got would the in are we though, what U.S. our and the mines, investments that it’s our the shape of to and and good up our to in equipment quarter go they’re increased in run. made go. Australia rest and referenced in our Nate, ready We’ve the second We’ve shape the ready the We’ve quarter good the say, first capitalized or development I year. Mark whether in got and staffing. caught in general, is that to

we position produce the made potential So, the we is said, performance. as in things demand. to have I Mark said, go I operationally, that just can’t And and the the control headwind COVID, we’ve our fleet put increased the rest being, in the have us good a to ready to for year. would general is weather, well biggest But meet rail of investments say

Nathan Martin

a Thank there. Creek, mentioned out tons, guys. think, I And second, production, Shoal on you XX,XXX you. helpful, Jim, XXX,XXX for maybe inventory of rolling some shipments just Very then, building

when of on As schedule X.X concerned, kind that guys the still of you that great year? the given kind Thanks. of for the to to see million is coal, this to up production, sales as [ph] should far have ton some match marketplace? hit everything does And ramp current level demand pick because seem obviously, we start

Jim Grech

Those more occur to the supposed into were quarter. Yes. first sales

into So, second slid the quarter. they

a were good the sales. to And start mine at that’s March in actually we why off those such so, are because April

be conditions we So, the to over improve. consistent And to mining year. sales the rest expect of we expect the

conditions. in we’re May out some of that a panel as in yield We’re now mining the getting to better get and challenging going right

stabilizing improving so, through should as we it the of And cost the upon year. see our we rest structure get

facility. from shut having I the coming be been conditions, mine getting forward is So, mining June down. we well are for The Like should said, sales along say, better good.

Nathan Martin

Just largely barge, the wondering, something rail related Was a slippage or at et it cetera? Jim, else? transportation or is

Jim Grech

down ports, the back the congestion just just It’s had things down the in there up... Gulf

Nathan Martin

one very one. in think. your Again, to you you, remarks. touched North prepared briefly it. Jim, just Got it Goonyella, on I then, final And

give last a think project info that position you to in more be call, said on hopefully you’d I by this call.

hoping could any Thank time costs, you So, if be I et capital was volume, updates thoughts, current helpful. That share on you. your cetera. would maybe just line,

Jim Grech

Nate. Yes,

fans operations main future So right conveyors. are underground surface and assist installing working mine to now, currently we on

on the at and estimates forward, looking And surface. still into we’re further the reventilation the cost reentry looking to of is finalizing and work and all our engineering leading mine. So, plans

we’re specifics making you’re asking them for, that but the So, progress, we still have settled. don’t

to just on and the to going gave costs, I not that you. detail line -- time So, prepared I’m other not than comment

our us plan We into go We take reserves. reentry mine the are to toward down. The making progress. southern would

million reserves available us. XX tons are about have to of that We

So, looking forward, that’s the goal.

Nathan Martin

Jim, move this expectation, at Any forward not? or decision make before you a time to whether

Jim Grech

sure estimates. -- have to We there the to refine cost get can acceptable and QMI with make and that make then we the plans they’re engineering work better

sure Just of process we sound estimates sound, types making cost doing are is of decisions. our that engineering those before would our make

Operator

conclude And additional turn call Grech our session. or does I’d for any that to the Jim comments. question-and-answer over to back Mr. closing like

Jim Grech

forward was of investment ready railroads, as it you. serve few our COVID that and the first we And in also period the year. in Thank some quarter to weather the demands the adversity had and fleet have call, a times we getting and rest stated the the and here in going the in customers we with our of a

we there. we’ve So, are and that, successful been on

mines to are ready Our go.

So, and with this third the finish we’re to good quarter second, looking for forward year. fourth a

continuing like insurance your our remaining various safety support. employees also execute initiatives. and thank you and for I’d Operator, focused continued customers, like to on to our investors, thank joining So, that vendors to providers thank us concludes for all today. our on And call. for our I’d especially

Operator

Peabody you And this QX concludes presentation. Thank you. the participating. XXXX for Thank earnings

Peabody Energy (BTU) 28 Apr 222022 Q1 Earnings call transcript