BTU - Peabody Energy Corporation

Operator: Good day, and welcome to the Peabody Q3 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Vic Svec of Investor Relations. Please go ahead. Vic Svec: Thanks, operator, and good morning, all. Thank you for joining today to take part in Peabody's third quarter call. Remarks today will be from Peabody's President and CEO, Jim Grech; CFO, Mark Spurbeck; and Chief Commercial Officer, Malcolm Roberts. Following the remarks, of course, we'll open up the call to questions. Now we do have some forward-looking statements today, and you'll find our full statement on forward-looking information in the release. We do encourage you to consider the risk factors referenced there as well as our public filings with the SEC. And I'll now turn the call over to Jim. Jim Grech: Thanks, Vic, and good morning, everyone. I'm pleased to report that Peabody continues to perform quite well with great safety results, good volumes, strong cost containment, a pristine balance sheet and an outlook that points to more of the same. Our third quarter was punctuated by strong thermal coal shipments and historically low met coal costs. Also, I'm delighted to say that the longwall production at our flagship Centurion mine begins next quarter. We expect shipments of Centurion's premium hard coking coal to expand sevenfold in 2026 to 3.5 million tons and even more beyond that time. Development and hiring remains on track and longwall equipment is beginning to be installed underground ahead of the February start. Over the 25-plus year mine life, we expect Centurion to be our lowest cost metallurgical coal mine. And by itself, the mine should boost our average met coal portfolio realizations as a percent of benchmark from the 70% mark this year to roughly 80% in 2026. All of this occurs against market pricing that is toward the lower end of the pricing cycle. To steal a bit of Malcolm's thunder, I'll share our belief that all 3 of our end markets could have upside pricing pressure in 2026. Mark will tell you that we have designed Peabody to produce positive EBITDA even during the toughest times while generating substantial cash flows during mid- to higher parts of the cycle. We're now at an interesting inflection point on how investors should be looking at our company. Our capital investment in Centurion is tapering down even as the longwall mining begins in the next quarter, setting us up to expand free cash flows in both directions. That bodes well for shareholder returns using our established policies. Let's now turn to what we're seeing in U.S. fundamentals. One of the world's largest hedge funds recently commented to us that Peabody was at the intersection of some of the most significant themes going on in America, and I couldn't agree more. Consider a few of these. The AI data center theme continues to play out with new investments being announced weekly. When coupled with plans for increased U.S. manufacturing, this means power generation will struggle to keep up with demand for the foreseeable future. U.S. coal plants reliability and affordability also continues to be emphasized. During the coldest days of last winter, for instance, fossil fuels provided more than 90% of the additional U.S. generation needed versus just 4% for wind and solar. The often quoted national average of 16% of electricity from coal also doesn't do justice to the workload, reliability and economics that coal power generation provides in certain states. For example, our home state of Missouri gets approximately 60% of its electricity from coal, while California has virtually no coal-fuel power. As a result, Missouri's average cost of electricity was just $0.11 per kilowatt hour last year, but California power averaged $0.27, nearly 2.5x that of Missouri. The third quarter continued to see 202 (c) executive orders to keep coal-fueled generating plants open and utilities announcing additional extensions. The count of life extensions for U.S. coal fuel generation now totals 58 units and 46 gigawatts of generation, more than 1/4 of the total installed base. This comes as the Trump administration continues to implement common sense policies. In the third quarter alone, we saw federal funding and emergency orders to extend the lives of coal plants, a 5.5% reduction in the federal coal royalty rate and an upcoming 2.5% production tax credit from the one big beautiful bill. We also saw a growing national focus on securing rare earth elements and critical minerals. We have long said that our leading U.S. thermal coal platform and particularly our Powder River Basin position represents a free option for investors. To extend that analogy, today, that option is nicely in the money. With that brief overview, Malcolm, I'll now turn the call over to you to give more color on the markets. Malcolm Roberts: Thanks, Jim, and good morning, everyone. I'll begin with a look at the seaborne markets, where the notable change in metallurgical coal this past quarter has been how unchanged those markets have been. Consider this, the normally volatile premium hard coking coal benchmark price averaged $184 per metric ton in the third quarter, which is the same as the price it averaged in Q2 and just $1 per ton lower than Q1. The global steel story has continued to center around China's anti-involution policies, which appear to be firming as the country looks to trim unprofitable supply. China's crude steel production is down roughly 3% year-to-date. Unfortunately, domestic steel demand has also been sluggish, so Chinese steel exports are still running at elevated levels. Lower crude steel production in traditional markets outside China has tempered the benefit of new blast furnaces in India and the incremental coal imports they represent. I'll remind listeners that while China imports less than 20% of its metallurgical coal demand, India imports 90% of its steelmaking coal needs. We note that in recent days, China has been aggressively pursuing imports of premium seaborne coking coals as domestic pricing in China has risen to a level that makes imports attractive. Seaborne met coal supply continued to see challenges this past quarter with some producers struggling at these sustained low pricing levels. we estimate that 45 million tons of seaborne met coal production or 15% of seaborne supply is earning an unsustainable level of revenue at current price levels. Benchmark prices today stand at approximately $195 per metric ton. Next year's forward curve is in the $215 range. This coming quarter, we'll be looking at the pace of Chinese policies and the strength of the restocking cycle in both India and China. Seaborne thermal coal saw some support in the third quarter with the average benchmark price up 8%. Positives for demand include developed Asian markets in Korea and Taiwan favoring Australian imports over Russian coals, while Chinese coastal plant stockpiles stand at a 12-month low. Anti-involution policies are touching all of China's coal mines, where the 276-day work limits, safety checks and production quotas invariably have an impact on most. Enforcement has been observed, but has been sporadic. On the supply side, seaborne thermal production is adjusting with large exporting nations such as Indonesia and Colombia curtailing unprofitable production. An improving market balance is reflected in the forward seaborne thermal benchmark price contango with next year's Newcastle pricing up 9% above current levels. During Q4, we anticipate winter restocking post shoulder season, and we'll see if the recent rebound in Chinese imports accelerates. Within U.S. markets, I'll reinforce Jim's initial remarks. The favorable trends we've discussed all year are well intact. Through 9 months, total U.S. electricity demand is up 2% over the prior year. That relates mostly to the early-stage build-out of data centers and increased load growth from AI. Electricity demand growth only looks to expand with ICF International, for instance, forecasting 25% growth within 5 years and 78% growth within 25 years. Peabody has been saying that increasing utilization of existing coal plants represents the best form of incremental power in the U.S., and that's exactly what has occurred year-to-date. Percentage growth in U.S. coal generation has been 5x greater than overall electricity generation growth. The 11% increase in U.S. coal burn this year has been driven by good fundamentals, including natural gas prices that have averaged $3.45 per MMBtu, leading to gas generation being down 3%. And those trends may well be repeated next year with a forward curve for natural gas averaging an even stronger $4. Our view is spare generation capacity could provide substantial growth in coal consumption while filling the electron gap. First, consider the landscape in the U.S. Renewables continue to be built out, but don't solve the massive 24/7 reliability needs when the wind doesn't blow and the sun doesn't shine. Renewable saturation is a real concept. Gas plants are being built. However, new turbines ordered today may be 5 years away from being delivered given backlogs. Additional nuclear generation is fine, but at least a decade or 15 years away from reality. For those keeping score on coal plant longevity, add 3 coal-fueled plants in North Carolina to the list of those being extended. And these plants aren't just being kept in service, they are generating more electrons. The U.S. coal fleet ran at just 42% of capacity in 2024. The fleet can never run at 100%, of course, but optimal levels could look a lot like 2008 when coal plants ran at 72% utilization. Closing that gap could add 10% of generation to the U.S. electrical grid without needing to add any new plants. And that increase could translate to some 250 million tons or more per year of additional thermal coal demand. Now that isn't a projection, of course. It's just simple math. However, it does provide a compelling case for coal rebound in the U.S. and one that has already begun to play out this year. From a supply standpoint, providing those additional tons to meet growing U.S. generation can come somewhat from running mines harder and utilizing latent capacity. You've seen that from Peabody with U.S. shipments up 7% year-to-date. With higher coal burn, we also estimate that U.S. generated inventories are down 14% from this time last year. Market fundamentals continue to tighten. We've begun to see price indices increase while natural gas prices have risen across the curve. Coal continued to present attractive economics. That's a brief review of the coal market dynamics. I'll now pass the call over to Mark. Mark Spurbeck: Thanks, Malcolm, and good morning, all. I'll start with a quick overview. We delivered another strong financial quarter with adjusted EBITDA increasing from Q2, driven by higher Powder River Basin shipments, better-than-expected seaborne thermal coal volume and the lowest metallurgical coal costs we've seen in several years despite burdensome Queensland royalties. At September 30, our cash position was $603 million and total liquidity exceeded $950 million, ensuring we have the financial flexibility to manage short-term market volatility while fully capturing upside from more favorable pricing. Together with the increased operating leverage from Centurion, we expect to be positioned to generate free cash flow and deliver outsized returns to shareholders. Let's take a closer look at our financial performance for the third quarter. We recorded a GAAP net loss attributable to common stockholders of $70.1 million or $0.58 per diluted share, which included $54 million of acquisition termination costs, primarily related to financing arrangements, transition services and legal fees. We reported adjusted EBITDA of just under $100 million, generated $122 million in operating cash flow and continued completing development at Centurion South, now just 3 months away from starting the longwall. Turning to operating segment performance. Seaborne Thermal recorded $41 million of adjusted EBITDA and 17% margins. Sales volumes exceeded company expectations with an increase of 500,000 tons quarter-over-quarter as the company recovered the delayed tons from long Newcastle shipping queues in Q2 and then some. The segment expanded margins by 10% from Q2, demonstrating the continued strength of our low-cost Australian thermal platform. The Seaborne Metallurgical segment reported adjusted EBITDA of $28 million. Revenue per ton rose 6% quarter-over-quarter due to a higher product quality mix, enhanced by 210,000 tons of Centurion premium hard coking coal. Costs were significantly better than company targets with cost improvements achieved at all 5 met coal operations. The U.S. thermal mines generated $59 million of adjusted EBITDA on the improved domestic demand that Jim and Malcolm discussed. On a year-to-date basis, our U.S. thermal platform has delivered nearly $150 million of cash flow and EBITDA has outpaced capital by an almost 5:1 margin. The Powder River Basin delivered $52 million of adjusted EBITDA, a 20% increase from the prior quarter. Margin per ton improved 6%, driven by higher volume and reported costs at the low end of guidance. The new lower federal royalty rate improved costs by $0.70 per ton, but reduced revenue by $0.30 as certain contracts require law changes to be passed on to customers. To get a better sense of the momentum building in the PRB, shipments are up 10% year-over-year, yet margins have improved by 39%, resulting in a 53% increase in reported EBITDA compared to the prior year. The other U.S. Thermal segment contributed a modest $7 million of adjusted EBITDA in the third quarter. Sales volumes met company expectations despite an unplanned 5-week dragline outage at Bear Run, which led to a production loss of 400,000 tons. That was mostly offset by a drawdown of inventory, resulting in a net sales reduction of 100,000 tons. Related repair costs totaled $2.5 million, temporarily increasing costs above expected levels. The dragline resumed operating on September 18, and we don't anticipate any impact on fourth quarter production. Also, the Twentymile team completed the longwall move to the 11 East Panel in October, and we expect to return to normal production rates going forward, though we anticipate less than ratable sales in the fourth quarter as we rebuild inventory. Lastly, we recorded a onetime $5.5 million charge in the Corporate and Other segment for the settlement of claims related to a dispute over the calculation of overtime at our U.S. operations. Looking ahead to the fourth quarter, seaborne thermal volumes are expected to be 3.2 million tons, including 2.1 million tons of export coal, 200,000 tons of which are priced on average at $100 per ton. 800,000 tons of Newcastle product and 1.1 million tons of high ash coal remain unpriced. Seaborne thermal costs are expected to be between $45 per ton and $48 per ton, an improvement over prior implied fourth quarter guidance. As a reminder, Wambo Underground came offline in the third quarter. Going forward, we anticipate a seaborne thermal quality mix of 40% Newcastle and 60% higher ash product. Seaborne met volumes are targeted at 2.4 million tons, up 300,000 tons from the third quarter, while costs are expected to be $112.50 per ton better than prior full year guidance. In the PRB, we expect shipments of 23 million tons at cost of $11.25 per ton, both better than prior implied fourth quarter guidance. Other U.S. thermal coal shipments are expected to be just slightly below third quarter at 3.6 million tons as we rebuild inventory and production ramps up at Twentymile following the longwall move. Costs are anticipated to be approximately $45 per ton, a $5 improvement from prior quarter. With Wambo Underground closing as planned, we anticipate certain non-reclamation costs to be reported in the Corporate and Other segment. These costs are very much front-end loaded and estimated at $9 million in the fourth quarter. After third quarter's results, we are making favorable changes to full year guidance for the second quarter in a row. Seaborne thermal volumes are anticipated to be 350,000 tons higher at 15.1 million to 15.4 million. Seaborne met cost targets have improved by an additional $2.50 per ton to $115 per ton at the midpoint. PRB volumes are anticipated to be 3 million tons higher at 84 million to 86 million, while costs are being lowered another $0.25 per ton to $11.25 per ton to $11.75 per ton. With the recent challenges at Bear Run and Twentymile behind us, we are adjusting other U.S. thermal full year volume to be at or slightly below the previous low end of guidance at 13.2 million to 13.4 million tons and full year cost $2 per ton higher at $45 per ton to $49 per ton. In summary, we delivered another straightforward quarter, underscoring the continued discipline of our operations team. With the Centurion South investment nearly complete, we're well positioned to significantly expand margins. We expect another consistent quarter to end the year. We remain confident in our ability to bring Centurion online early next year and deliver stronger cash flow. Our robust balance sheet provides flexibility to navigate near-term seaborne weakness, capitalize on accelerating cash flows as conditions improve and create significant value for our shareholders. Thank you. I'll now turn the call back over to Jim. Jim Grech: Thanks, Mark. I'd like to briefly review our core priorities, which play into Peabody's compelling investment themes. First, we are highly focused on safe, productive and environmentally sound operations. That's our key to everything else we do. Second, we are on our final approach to Centurion's longwall start-up. Centurion joins our multiproduct met coal platform that will see a volume increase of approximately 25% in 2026. Third, we believe our low-cost thermal coal platform will continue to deliver EBITDA well ahead of its modest CapEx needs. Fourth, our leading U.S. thermal position will continue to benefit from the rising domestic generation trends. And fifth, we will maintain a fortress balance sheet with a focus on maximizing shareholder returns. Our sixth priority is also our newest, which is to leverage our #1 U.S. coal production position to assess our potential to meet growing U.S. needs for rare earth elements and critical minerals. We told you last quarter that we saw rare earth and critical mineral potential in preliminary studies performed in conjunction with the University of Wyoming and that a new sampling and laboratory analysis program was beginning in the third quarter. Preliminary data from our targeted zones indicate that we have similar or better concentration than others have reported in the PRB. We acknowledge that we are in the early stages in our assessment of our potential to produce critical minerals and rare earth elements with sustainable processes that could potentially generate attractive returns for our shareholders. In continuation of this assessment, we have multiple activities currently underway. We have accelerated our drilling program as we continue our assessment of both types and concentrations of rare earth elements in conjunction with several third-party labs. We are in discussion with multiple departments in the Trump administration regarding rare earth and critical mineral priorities and potential for funding. We also have been in early discussions with a number of potential technology partners regarding processing platforms. I would describe our actions as aggressive and pacing yet disciplined in approach. By our year-end reporting early next year, we will look to provide a greater sense of mineral types and concentrations while also discussing next stage plans. With that, operator, we can now open up the line to questions. Operator: [Operator Instructions] First question comes from the line of Nick Giles with B. Riley Securities. Nick Giles: My first question, obviously, some key tailwinds for domestic thermal this year. And Malcolm, you mentioned optimal coal-fired utilizations could be in the 70s. That would imply 250 million tons of demand. In this blue sky scenario, how should we think about Peabody's response? I mean, what's the maximum level of output we could see Peabody producing the PRB? How much capital would be required? And how long would it take to ultimately achieve this level? Malcolm Roberts: Look, Nick, I'll talk about the market and then capital, I'll hand over to Jim or Mark, depending on who wants to take it. Look, when we look at this market, there was quite a bit of latent capacity available over the last couple of years that we're seeing fill up very quickly. And so it's a great question that you asked because the expansion is going to come from really 2 things. One is going to be customer commitments and adding on capacity is not something you do for 1 year. So it's going to need customer commitments. And then we'll be looking for the price signals. And we'll see what the market does in terms of price signals to bring those additional tons on. I think that's the best way to look at it. But I would say we see ourselves approaching absorbing the latent capacity that we've had over the last couple of years. Mark or Jim? Mark Spurbeck: Nick, I think Malcolm's got it exactly right. I mean you look at what we've done, particularly in the PRB, increasing our volumes by 10 million tons from the beginning of the year. So that latent capacity really being taken up in the market. We've seen our peers do something similar. So there's going to be additional demand if any of these projections for load growth continue to bear out like we've seen so far this year. The amount of capital it's going to take remains to be seen. But certainly, we're going to have to see the economics and prices in the coal to justify the additional investment. I think there's 2 things, Nick, when I think about additional production, one is the capital, and that's mainly the equipment fleet, but two, also the labor and getting a workforce assembled to produce those additional tons. So Malcolm had it right, latent capacity being taken up and additional volumes are going to come at higher costs. Nick Giles: This is really helpful. Just as a follow-up here. I mean, you mentioned price signals, customer commitments. What would you need to see from a duration perspective? Would you need to see 2030 type commitments at this point to deploy incremental capital? And then just any volume figure, I mean, could we see 10 million more tons, 20 million more tons? I appreciate any clarity there? Mark Spurbeck: Well, we've -- with that 10 million ton increase this year, that's pretty much running at our full run rate. So there's no additional latent capacity to speak of, particularly at our NARM mine, which is the largest mine. With regard to the type of commitments, we're seeing those types of commitments. We're seeing multiyear commitments from customers already, a lot of inquiries around that. It would be -- it would look the same as any other investment. We'd have to see a return. How much can we do on an as-needed basis on a leasing basis versus outright investment and purchase. So to be determined, Nick, on that. But we fully expect with that latent capacity being taken up this year to see that upward pricing pressure. We're seeing it already. We expect that to continue next year, particularly if that forward curve on gas above $4 is right next year. Nick Giles: Got it. Switching gears. Obviously, you have Centurion coming on here shortly, and that will reweight you more towards the benchmark. But with the termination of the Anglo deal, I just wanted to ask how you're thinking about M&A opportunities in met going forward. I mean do you still have a desire to further reweight your met portfolio to higher quality grades beyond what we'll see at Centurion? Jim Grech: Nick, Jim here. And our focus has been on growing the seaborne metallurgical coal. And with the position we're in right now, our entire focus is on getting that Centurion mine up and running and getting it to the maximum capacity possible. And we're in good shape to do that. One of the things that we are addressing, which is going well, as Mark said, is labor. We've got 260 of the 400 employees hired that we need to get to full capacity, and we anticipate being able to get up to full labor complement as the longwall is coming online. So our focus really is on getting the Centurion mine up and running, maximizing the output from that mine and then really taking advantage of the U.S. tailwinds that we have and following up on your questions of getting as many tons out as economically as we can from our U.S. platform. That's really where our focus is. And if the market unfolds as we think it has the potential next year to do so with the upward pricing pressures domestically, internationally, our focus on our organic assets, we see some very robust cash flow potential. And of course, that can work back to share buybacks and so on for our shareholders. So that's really where the focus of our company is going forward. Operator: The next question comes from Nathan Martin with Benchmark Company. Nathan Martin: Just back to the PRB for 1 second. You said the operation, I think, Mark, is basically running at the max at this point. If we look out to the next 2 years, '26, '27, are you guys seeing enough demand to continue running at that max? And roughly how contracted are you and what price at that level? Malcolm Roberts: Malcolm here. Look, I think there are 2 questions. Are we confident about running at max capacity for the next couple of years? The answer is definitely yes in the PRB. I think your second question was what we think price levels will be. It's I can't comment on that, except we are encouraged by where we've seen index price movements and where we're doing business today. Nathan Martin: And Malcolm, just to clarify… go ahead, sorry. Jim Grech: I'm sorry, Nate. If there's something to take from what Malcolm has been saying and Mark as well is that we're seeing an environment in the market where it's certainty and demand increase and the ability for U.S. producers to quickly add production is going to be the challenge, and that should result in upward pricing pressure. So there's going to be some value to the first movers on the customer side that step out and enter into these multiyear agreements and securing the reliability that they're looking for. And we've been seeing some of that. So -- but this inflection point has a real potential to hit the market of the demand increasing quickly, the coal plant utilization wanting to increase to go along with it and how quickly can the production side respond. And for that production side to respond, we need to see more long-term agreements put in place where we can justify the investment, as Mark was talking about. So it's going to make for, I think, a pretty volatile pricing environment going forward if these demand projections hold as we're seeing many consultants forecasting. Nathan Martin: Got it. I appreciate those comments, guys. And then shifting to the Met segment, clearly, a nice quarter-over-quarter improvement in cost per ton there. If you look ahead to '26 and the start of Centurion longwall, should we expect that to drive another incremental improvement? I think I believe you said that was going to be the lowest cost operation in the segment. How should we think about how met segment costs could compare to 2025 guidance? Would just be helpful to get some puts and takes there? Mark Spurbeck: Yes, Nate, Mark. We're not sharing guidance for 2026 yet. We'll do that, obviously, on our next call. Over that 25-year life Centurion will be the lowest cost producer in the portfolio. We talked about the South having some shorter panels, lower production run rate of 3.5 million tons or so next year versus life of mine of 4.7 million. So there'll be some give or takes there. I wouldn't look for any step change next year. Nathan Martin: Mark, that's fair. And then maybe just one final -- it would be great to get thoughts on potential scenarios for how you guys see the arbitration process with Anglo playing out. And then specifically, are there any further adjustments to your results like the $54 million charge, let's say, that we saw this quarter expected going forward? Jim Grech: Yes. Nate, I'll talk about the process, and then I'll let Mark comment after that about any other adjustments. And our analysis of the MAC, which was a prospective analysis, we feel has been confirmed by events and the passage of time and of course, the enormous loss of value that we see. So we've hired 2 prominent law firms, Jones Day and Quinn Emanuel, and they've done their analysis and they join us in their high level of confidence in our position. An arbitration process probably takes years, all right? And we're on the front end of that arbitration process. I can't predict you how long it's going to take, but it will take a while to get to any resolution. But as each day passes by, we get more and more firm in our conviction of our position. And now as far as any other expenses with that or looking forward, I'll give that to Mark. Mark Spurbeck: Yes, on the $54 million charge for the quarter, that really brings the year-to-date charge to $75 million. That's a lot of costs that would have been capitalized had we been able to complete the transaction, primarily related to the bridge financing arrangements. That was significantly most of it, about $45 million of the charge year-to-date. There's also about $15 million of professional fees and transition services that is really a catch-up to where we're at, and that's obviously stopped now. So Nate, I wouldn't expect anything significant like you've seen. There will obviously be some legal defense costs going forward. We estimate that at about $5 million a year. Operator: The next question comes from the line of George Eadie with UBS. George Eadie: Can I ask more about rare earths and the PRB? So in terms of details, we'll get by year-end, should we expect to see grades volumes, costs and potential time line to get to market all of those by year-end? Jim Grech: So George, what we said is we're in the very early stages of our assessment, which is ongoing, and we're getting some preliminary data in. It's analyzed. We're getting more data in and more analysis is needed. We've accelerated our drilling program with that as well. So what we're planning to give at the end of the first -- at our year-end results, which we'll do in February, is a preliminary analysis of indicative element types and concentrations. So that's what we're looking -- that's what we're saying we'll be giving at that point in time. George Eadie: Okay. And you guys called out earlier similar or better grades than peers. Is it reasonable then for me to assume that it's a similar mix like other peers, so sort of heavy in scandium and gallium where the value is? And just sort of lastly on that, like can you help maybe elaborate on discussions on partnerships with the current administration? I guess you're a leading player in both coal and critical minerals, 2 clear top priorities. Like how can you help us understand a bit better like what could happen and how they're approaching this in your discussions? Jim Grech: George, so there's a few things there. First off, I'm not going to get speculative on the types and concentrations. We'll have that in just a few months here. We just want to make sure that we're very thorough in how we approach this. We take a disciplined systematic approach to how we're going to do this. And we'll get all the sampling done. We'll get all the data in and at the -- and when we give our year-end reports at the end of the -- in February, we'll give the information we have at that time. So we're not going to get too speculative at all right now on the concentrations and types. We have been very active within the -- with the Trump administration, meeting with various departments in Washington and we even have some more upcoming here in the near future. So we're working closely with them. And as you said, we are -- with the volumes that we do in coal and with the rare earth elements, we do have a unique position. And we also have a unique position that we do that both in the U.S. and Australia. And with the Trump administration and the recent agreement with Australia, we are looking at the potential for rare earth elements along with -- at our coal mines in Australia as well. So we're very unique in that position. And one other thing I'd like to point out that we're very unique in when it comes to the potential for rare earth elements is the massive scale, which we have in the PRB, which cannot be duplicated. We have the workforce, we have the equipment. We have the logistics facility, and we're currently mining 80 million tons of coal a year and moving over 400 million cubic yards of earth a year. No one else can duplicate that. And I would just say, while we aren't trying to get shovel ready here if there is an opportunity, we are already shoveling in the PRB. So that is a unique position we have. And as we get data and we can solidify our analysis, we'll certainly bring that out. George Eadie: Okay. Yes. No, that's clear. And just sorry, one last one, maybe for Mark. But on the Anglo termination, I might have missed it slightly earlier, but there was a $29 million deposit return. Is there another $46 million to come still? Is that right, the $75 million total? And can you just maybe remind me what the $54 million that has gone through in Q3? And if there's anything more in terms of costs beyond that legal $5 million a year you flagged before? Mark Spurbeck: You're right, George. On the remaining deposit, we expect that to be returned to us. We've asked for that in short order. Not clear why only a portion of the deposit was returned to us. Secondly, on the $54 million of costs, about $35 million of that was related to the financing, the bridge financing, which has now been terminated as we announced previously. And the additional amount was almost entirely related to kind of professional fees and transition services, which have completely been halted at this point. So they won't be going forward. The only thing we'll have going forward is kind of the arbitration legal fees, and we anticipate that to be about $5 million per year. Operator: The next question comes from Matthew [ Key ] with Texas Capital. Unknown Analyst: I have a macro one on the rare earth side. We saw this morning that the U.S. and China reached a tentative deal to pause some of those export controls on rare earth elements for about a year. What impact, if any, do you think this will impact government support for domestic rare earth projects? Jim Grech: Yes, Matthew, that's -- I'm not really sure I have a specific answer to that. I will comment on is that I know that there is a strong desire to have a domestic supply of rare earth elements here by our government. So there could be an international supply, maybe things with China. I'm not sure how that will play out. But I do know there is a very strong desire for conventional or unconventional supply right here native in the United States. And so I would expect that would continue, but I don't want to speak for the administration on that. That's just my expectation. Unknown Analyst: Got it. That's helpful. And just a follow-up on M&A in the seaborne met side. Given that you are in arbitration with Anglo and that could take some time, would you not really be considering any additional M&A in seaborne met until that arbitration process with Anglo is completed? Jim Grech: Well, first off, I'll just say that, again, our belief that the arbitration process will be successful for us isn't going to be a hindrance in anything we -- is not going to hold us back from doing anything in the future. We have 100% confidence in that process, and we are not going to stop anything strategic with our company because of that process. So I'd just like to put that out there right now and clear that up. But as you're asking about M&A, again, I'll just say our focus right now is on our organic assets, getting Centurion online, getting the full value of that for our shareholders and leaning into this market upside that we see happening both U.S. and internationally next year and making sure our platform is capitalized. We have the maintenance in order, we have the staffing in order to take full advantage of the upside we see coming in the market and to generate some very robust cash flows. That's where our focus is right now. Okay. Thank you, operator, and thanks to everyone for the time today. I'll thank our Peabody team, which amid everything else turned in safety performance that remains near our all-time record performance of 2024. We look forward to keeping all of you up to date on our progress as we finish up in 2025. Thank you. Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.

Operator: Good day, and welcome to the Peabody Q2 2025 Earnings Conference Call. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference over to Vik Svec, Vice President, Investor Relations. Please go ahead, sir. Vic Svec: Well, thank you, operator, and good morning, everyone. Thanks for joining today to take part in Peabody's second quarter call. Remarks today will be from Peabody's President and CEO, Jim Grech; CFO, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Following remarks, of course, we'll open up the call to questions. Now we do have some forward-looking observations today. You'll find our full statement on forward-looking information in the press release. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. And I'll now turn the call over to Jim. James C. Grech: Thanks, Vic, and good morning, everyone. Peabody has had a great first half of the year. We've had record safety, solid volumes, strong cost containment. And on the basis of both our performance and our prospects, I'm pleased to report that we're raising our full year guidance. To echo my first quarter theme, the Peabody team continued to do an excellent job of controlling the controllables in the first half, with second quarter costs coming in below our expectations. Our ability to manage cost is a key driver of success at a time of cyclical market softness in the seaborne markets. Also of note, today, we announced an acceleration of longwall operations at our flagship premium hard coking coal mine, Centurion. We're now targeting longwall start-up in February 2026. This improved timeline reflects strong execution across our operations team. By way of progress, we plan to start installing longwall shields in November. Workforce expansion remains a key focus, and we already have approximately 260 employees hired. Through an active recruitment process, we aim to reach a headcount of around 400 by early 2026 to support full production. I'd be remiss if I didn't also speak of the strong tailwinds in the U.S. markets. Last quarter, the President signed executive orders to revitalize the U.S. coal industry and expand the use of coal fuel generation. And earlier this month, the One Big Beautiful Bill was passed. It delivers long overdue relief to American coal producers by reducing royalty burdens, streamlining permitting and restoring regulatory certainty, enabling the industry to compete, invest and power the nation with confidence. How does the Bill benefit Peabody? First, the reduction in federal royalty rates on mining leases from 12.5% to 7% is expected to generate substantial savings in the PRB beginning this quarter. Based on initial analysis, Peabody anticipates $15 million to $20 million in net benefits from the royalty changes in the second half of 2025, and this should also improve PRB competitiveness going forward. Also, the bill provides a 2.5% production tax credit starting January 1 for eligible domestic coal used in steelmaking, a benefit that applies to our Shoal Creek metallurgical mine in Alabama. As evidence of the need for renewed focus and common sense in U.S. energy policies, this legislation, combined with rising electricity demand marks a clear turning point for U.S. coal. It reframes coal not as an inconvenient truth relic, but as a critical cornerstone of grid reliability and energy independence. The June 2025 heat wave made this clear. As demand surged across PJM and MISO, it was coal and natural gas that kept the grid stable, while renewables were unable to scale quickly enough. To frame the new electricity landscape in the U.S., just one independent system operator recently forecasted a 32 gigawatt increase in power demand by 2030 and 30 gigawatts are related to data centers. To put this in context, they noted that increase is comparable to adding 20 million new homes to the grid in the next 5 years. When thinking about coal in the future, I'd ask you to focus on 6 surprising words. The world is turning towards coal. I'll remind investors that the IEA reports that the world set a record for coal demand in 2024 after doing so also in 2023 and has not yet peaked. And U.S. coal is clearly in comeback mode as it should be. The U.S. has more energy in its coal reserves than any nation has in any one energy source. Malcolm, I'll now turn the call over to you to give a bit more color on the markets. Malcolm Roberts: Thanks, Jim. And I'll add a few details regarding U.S. dynamics before turning to seaborne markets. In the U.S., we have seen a great first half of the year with coal fuel generation up a whopping 15% over the first half of 2024. That's a function of coal increasing share given higher natural gas prices relative to the prior year as well as a growing electricity generation pie as industrial activity and emerging data center demand underwrites continued electricity demand growth. That terrific picture has translated into higher demand more than improved pricing at this stage. We note customer stockpiles are down some 15 million tonnes versus this time last year. That represents an 11% reduction from a year ago, the lowest level since 2022. That bodes well for tightening the U.S. thermal supply and demand fundamentals as we move forward. In addition to existing coal plants running much harder this year, we continue to see deferrals of retirements within the U.S. coal fleet. Simply put, most utilities need all the electrons they can muster and coal plants offer some of the best incremental generating capacity with predictable fuel costs, reliable performance and readily storable fuel that is ready for dispatch 24 hours a day, 7 days a week. Deferrals of coal plant retirements have directly translated into new coal supply agreements for Peabody, a phenomenon that we expect to continue. We have increased PRB volumes this year and are sold out at our flagship North Antelope Rochelle mine at these higher levels. My final point is that recent moves in the U.S. to increase LNG exports, including the recent U.S. agreement for major new energy purchases by Europe should only tighten U.S. natural gas supplies as it moves to a greater parity with seaborne LNG. Seaborne thermal coal markets are also finding support in recent weeks. Demand has been driven by hot summer weather in Asia and really across the whole Northern Hemisphere. And that has reduced stockpiles and driven stronger bids. We have seen greater spot demand from our premium markets such as Japan as they move to secure additional supplies as coal burn exceeds anticipated levels. China's import demand had been under pressure due to a 6% increase in domestic coal production through May, along with stronger renewable generation, thermal power generation is down 3% year-to-date, limiting their appetite for imported coal. In India, high stockpiles and lower electricity demand has also been keeping import volumes subdued. Thermal supply is adjusting to softer demand and lower prices with Indonesia and Colombia, in particular, reducing exports. For seaborne metallurgical coal, we naturally avoid forecasting prices, but we are observing meaningful supply curtailments and policy adjustments that suggest we are midway through what is typically an 18- to 24-month downward portion of the price cycle, and we are beginning to see some green shoots. China remains the world's largest coal consumer, given that it accounts for over 60% of global steel production. And there, we are seeing some classic early signs of a market turnaround. That's true in steel, where recent production curves have been announced, which are expected to have a dampening effect on Chinese steel exports moving forward, aiding steel production from countries that rely on met coal imports to a greater degree. It's true in coal production where the government has just announced its cracking down on provinces and coal mining companies exceeding production quotas, and it's true in infrastructure, where projects such as Yarlung Tsangpo Dam in Tibet are being developed. This dam will be by far the largest in the world, will use large amounts of steel and concrete and will cost more than 100x than the Hoover Dam in the U.S. on a current dollar basis. These elements combined to suggest that the Chinese playbook is being executed similar to past downturns. While China remains a key influence this time around, Indian demand growth may drive the next leg of recovery. India enters the monsoon season with just 36 days of inventory and limited restocking activity. We look for a number of new blast furnaces to accelerate seaborne coal demand growth by 8 million to 9 million tonnes during the second half of 2025. I'll remind investors that the production of a tonne of steel in India uses 4x to 5x the amount of seaborne metallurgical coal as a ton of Chinese steel, given that India doesn't have notable domestic quantities of met coal. This phase of the met coal cycle also reflects the supply contraction in prior times. By our estimate, over 25 million tonnes of met coal capacity remains offline globally with substantially more volume in loss-making mode at these levels. Bottom line, while this part of the cycle has not been pleasant, we see it playing out in a similar way to past cycles. We are seeing early signs of an upturn with the real question of not if, but instead when. That's a brief review of the coal market dynamics. I'll now turn the call over to Mark. Mark A. Spurbeck: Thanks, Malcolm, and good morning, all. As Jim mentioned, we had another strong quarter and continue to successfully navigate a challenging seaborne price environment. Seaborne pricing continued to ebb with the broader industrial cycle, steel production and power generation in the second quarter. But with the cyclicality comes great opportunity. Our strategy remains to manage the lower points of the cycle to capture outsized free cash flow when we return to better price points. Peabody manages that volatility with a fortress balance sheet, effective capital allocation, operating cost discipline and a diversified asset portfolio. This quarter, our U.S. thermal platform led the way, generating $57 million of adjusted EBITDA. Let me add some insight into the second quarter financials. We recorded a GAAP net loss attributable to common stockholders of $27.6 million or $0.23 per diluted share, while generating adjusted EBITDA of $93 million. The team turned in another great quarter of cost management with 3 of 4 segments coming in better than company targets. PRV volumes came in higher than expected. We generated $23 million in operating cash flow, using some cash from the balance sheet to continue development at Centurion, now just 6 months away from longwall production of premium hard coking coal. We ended the quarter with $586 million of cash and nearly $1 billion of liquidity. Let's review the quarterly segment results. The Seaborne Thermal segment recorded $33.5 million of adjusted EBITDA and 17% margins, even with a loss of 400,000 tons from end-of-quarter port congestion. Regardless, the segment still beat second quarter cost guidance. Margins remain robust in the face of a modest price environment, underscoring the strength of our position on the thermal cost curve. The Seaborne Metallurgical segment reported adjusted EBITDA loss of $9.2 million or 23% lower average realized prices year-over-year. Costs remained well below company targets as the team continued to control the controllables while investing in the Coppabella Highwall with additional overburden movement to ensure more reliable production for years to come. The U.S. thermal mines generated $57 million of adjusted EBITDA. This platform continues to demonstrate why we believe the U.S. business with its stable free cash flows and low capital requirements is underappreciated and remains a key part of our leading diversified asset portfolio. In the Powder River Basin, sales volumes exceeded expectations even with 11 inches of rain over 60 days in Q2 or nearly their full year average rainfall. With that rain came excess moisture, leading to a negative $0.20 per ton quality adjustment to realized sales price, making the $2.16 per ton margin even more impressive. The PRB improved margins by better than $1 per ton year-over-year and generated $43 million of adjusted EBITDA. The other U.S. thermal segment delivered $13.5 million of adjusted EBITDA. Sales volumes were less than expected as Bear Run experienced poor rail performance and Twentymile continued to operate in challenging mining conditions in the 6 East panel. The Twentymile is eagerly anticipating finishing that panel in the next couple of weeks. We will begin moving the longwall to a new district in mid-August and should start cutting coal in the [indiscernible] East panel at the beginning of the fourth quarter. The [indiscernible] East Panel is positioned at the edge of a coal seam with much better geology, and we expect to return to historical production rates. Looking ahead to the third quarter, Seaborne thermal volumes are expected to be 3.9 million tons, including 2.7 million export, 600,000 of which are priced on average at $82 per ton, while 1 million tons of Newcastle product and 1.1 million tons of high ash coal are unpriced. Seaborne thermal cost per ton are expected to be between $45 and $50 per ton, in line with full year guidance. Seaborne met volumes are targeted at 2.2 million tons, consistent with the second quarter, while costs are expected to improve a bit further to $115 per ton. In the PRB, we expect a significant increase in volume to 23 million tons. Costs are also expected to improve from the second quarter and come in lower at about $11.25 per ton, leading to continued robust margins. Other U.S. thermal coal shipments are expected to increase to 3.7 million tons with better rail performance at Bear Run. Costs are also anticipated to improve to approximately $47 per ton. Rounding out the discussion with several favorable changes to full year guidance. Seaborne thermal volumes are anticipated to be 200,000 tons higher and cost $3 per ton better at $45 to $48 per ton. Seaborne met cost targets are better by $7.50 per ton to $150 to $120 per ton. With the strong first half and recent legislation, the company is increasing PRB volumes by 5 million tons and lowering full year cost by $0.63 to $11.5 to $12. We are also reducing full year CapEx $30 million to $420 million. Jim, I'll now turn the call back to you. James C. Grech: Thanks, Mark. Before turning to questions, I'll now give a brief update on the previously planned acquisition of assets from Anglo American. Here's where we are. It has now been 4 full months since the ignition incident at Anglo's Moranbah North mine, and yet there is still no credible timetable on the resumption of sustainable longwall mining. Impacts on the value of the assets include monthly lost production and revenue, carrying costs of tens of millions of dollars per month, expected capital related to new longwall equipment that will be needed for sustainable longwall mining, significant probable derate of future productive capacity at the mine and questions around both the availability and willingness of the workforce to resume safe underground longwall mining in the current panel if regulators ever allow it. Our understanding of conditions underground, along with the continued passage of time has further confirmed our strong belief that a material adverse change has occurred. A thorough review has led to this perspective by our underground mining team, our engineering staff, third-party experts and executive management. While some modest near-term activity may occur, this should not be mistaken as being equivalent to having a predictable timeline and quantifiable cost and productivity impact assessments associated with achieving sustainable mining in the current longwall panel. Four full months after the event, the exact cause of the ignition event remains unclear. And by Peabody safety standards, we would not restart operations at the current longwall phase. We are highly confident that sustainable longwall mining won't take place at Moranbah North until after a new longwall is fully commissioned in a new section of the mine in 2026. The priorities we identified several months ago have not changed. Peabody intends to rely on its rights under the purchase agreements, which give Peabody the ability to terminate. Any revised deal would require a substantial revision in value and structure that reflects the material change in the previously agreed-upon transaction as well as safe, sustainable longwall mining at Moranbah North at forecasted volumes and cost. Peabody has not reached a revised agreement with the seller, and we intend to provide a further update on August 19 after the 90-day MAC cure period expires. We appreciate your patience as we conclude a process that has now been underway for nearly a year. With that, operator, we can now open up the line to questions. Operator: [Operator Instructions] And today's first question comes from George Ede with UBS Unidentified Analyst: Thanks for the time today and hope you are keeping well. Could you maybe please help us start with Moranbah North and the MA. Just help us understand how you're thinking about going forward under the MAC in the scenario where you're found liable in, say, 2 years. This may be unlikely in your view, but I'm sure it's a scenario you've considered and have put quite a bit of thought into. So could you maybe help us how you would think about paying for such a liability and maybe some color how we should be thinking about it in terms of potential cash build and returns over the interim period if you were to declare a MAC. James C. Grech: Yes. George, thanks for the question. Look, we're very, very confident in our MAC position going forward. So if you look at what's been going on at the mine, as I said in my comments, it's still to be determined the exact cause of the ignition, right? So the impacts of future operating conditions are unknown. There's no known credible restart date for this mine. And while that's occurring, while the mine hasn't restarted, there's significant monthly carrying costs being occurred. And we -- as I said in my comments, we consider what the future scenario that longwall panel is going to be sealed off and the need of a new longwall being in place in a different area of the mine will be the path to getting sustainable longwall production again at that mine, and it's probably going to be at a significant derate going forward because of new operating conditions because of the past operating history of the mine. And on top of that, you have all this monthly lost production and revenue. So again, we are very, very confident in our MAC going forward. And if we have to pursue this in arbitration, we are ready to do so. Unidentified Analyst: Just on that, if you do continue with the MAC, if we get 2 years down on a small chance maybe in your view that you are sound liable, like how should we think about cash returns in the balance sheet over the next 2 years going to that period, even though it might be very unlikely, it still is a chance. James C. Grech: So again, George, I'm not sure your question exactly. We have our program in place where we returned 65% of our adjusted free cash flow back to our shareholders at least 65% of our adjusted free cash flow. So that's the program we have in place. So if you're asking about that, that's not going to change. And if you're asking about a possible arbitration ruling or something, we don't -- we're not taking a -- we're not going to put any reserve for that because that's more likely than not that we would face damages. So your questions for us are just purely hypothetical about damages occurring. We are 100% confident in our MAC, and we are 100% confident if we go to arbitration that we would be proved correct in the position we're taking. Unidentified Analyst: Okay. No, that's fair. And maybe just switching gears to Centurion. Can you remind us maybe what the latest there is on the sell-down timing? And then given this is a restart project and we spend a lot of time talking about longwall reliability of the Goonyella theme, is there any chance or any talks of a clause in that contract with the sell-down that a buyer could potentially have the right to walk away or adjust terms if certain production hurdles haven't been met? Is that something that's being considered? Mark A. Spurbeck: George, again, you're asking a hypothetical, and I'm not going to go down that path. And if we were in negotiations, I wouldn't comment on those negotiations. But again, as for Centurion, that's the potential is the sell-down of Centurion, and it's no way a commitment that we're going to do so. We'll make a decision how we're going to handle Centurion based on what's best for our shareholders going forward and has nothing at all to do with, obviously, this Anglo situation. So I have no comment on any possible terms because there aren't any possible terms to be discussed right now. James C. Grech: Okay. Timing though, is there any indication you can give of when it could potentially happen or. No, there's nothing -- I'm not going to give any timing indication. We have had a lot of interest, and we have had some discussions at this point in time, but we feel in no hurry to make a decision at this point in time on Centurion. Operator: And today's next question comes from Chris LaFemina with Jefferies. Christopher LaFemina: I just wanted to ask a couple of follow-ups actually on the Anglo deal. So Anglo this morning talked about being constructive and flexible in their discussions with Peabody. And it sounds like the discussions obviously haven't gone very well. And the first question I would have is whether you're in current discussions with Anglo have hit an impasse and now things are kind of on hold and maybe you restart negotiations before the August 19 deadline. But are you speaking with them now or are things just kind of everybody on the sidelines right now? James C. Grech: Yes, we've had very candid and respectful conversations with Anglo. And we at the highest levels between the 2 companies. But I'll say the status is right now, we just have a very fundamental disagreement over the quantum of the impact. We are obviously 100% certain there's a MAC, and we feel we have all of the data, it's evident to back that up. And right now, my assumption is that Anglo is saying that there isn't a MAC occurring. So we have a fundamental disagreement over the mine, the status of the mine and the quantum of the impacts of what's occurred at the mine. So we've had some very -- again, very respectful discussions. I'm appreciative of the give and take that's been going back and forth. But again, we just have a fundamental disagreement of the status of the mine now, how it's been over the past 4 months, how it's going to be for the rest of this year and how it's going to be next year going forward. Christopher LaFemina: So the dispute here is related to whether Moranbah North is a MAC event. And is there a potential solution where you meet in the middle where you kind of structured the initial deal with the [indiscernible] asset on contingent deferred payments. How about something like that related to Moranbah North? I mean if they -- if you think it won't come back online, they do, well, you don't pay for it unless it does kind of thing. I mean is that -- is there some sort of -- I'm sorry to ask a hypothetical question, but just trying to think of where the 2 sides can meet in the middle where you can -- basically, if the mine comes online, you pay for it, if it doesn't, you don't. James C. Grech: Chris, you sound like you're trying to be a mediator in a dispute. So I appreciate the efforts. But look, I'm not going to get into any negotiations on an earnings call. And August 19 date isn't that far away from us. And at that time, we can just talk freely about everything that's going on. Christopher LaFemina: Okay. And then just the last question. If you do go to arbitration, let's assume that were unfortunately to happen. Does the BUMA transaction terminate as well? What are the consequences of going to arbitration? James C. Grech: Yes. If we terminate the deal, then the BUMA transact -- the deal we have with BUMA terminates as well. It's back to back. Operator: And the next question is from Nick Giles with B. Riley Securities. Nicholas Giles: Just a first follow-up on Anglo. I mean the views on Moranbah North impact continue to differ substantially. So I was just wondering if you had any additional color on what should we be looking for on August 19 when you come out with this update? I mean, should we be thinking that the termination will shortly follow? Can you just kind of remind us of the factors and potential timelines at play on the back of that update? James C. Grech: Yes, Nick, again, I'm not going to get into negotiations or hypotheticals of what may be occurring on August 19. I'll just say that there was a 90-day period to cure the MAC. And at the end of the 90-day period, we have the right to terminate the agreement. And that's the situation, and we'll wait until August 19. Nicholas Giles: Understood, Jim. And apologies if I missed them all, but you did list a number of factors that underpin Peabody's view that the MAC has occurred. And I couldn't quite compare those to the ones that you provided last quarter. So I was just wondering if -- could you provide us what -- which of those factors are somewhat incremental or which have changed in your mind? James C. Grech: Yes, Nick, I'm not sure to compare to previous statements you're asking me to. I don't have that in front of me to compare one set of statements to the other. What I will say is in order to solve a problem, you have to understand what the problem is. And to date, the exact cause of the ignition has not been determined. So again, so how do you address that is -- still needs to be addressed, all right? And then there is the status of the current longwall. And is that longwall recoverable in the current panel? Will it be running again in that panel, which, again, we don't think is a scenario that's going forward. And then you're going to have rates -- probable derates of the facility going forward because of future operating conditions that are put on based on the past operating history of the mine. And then also, you have all the monthly loss production and revenue. And we think this is going to go on well into -- not well into -- I shouldn't say that into some point in time next year. So all of those factors are in there. And again, I'm not sure how that compares to what I said previously. Nicholas Giles: Got it. Understood. Appreciate Jim you walking us through what you can here. But maybe just on the operating side, you've lowered your seaborne thermal cost guidance by $3 a ton at the midpoint. So unless I'm mistaken, I think the full year guide still implies that costs could be higher in the second half. So just wondering what are the ultimate drivers there? I mean we do have Wambo coming offline, which I know was to lower cost. So I'm just trying to figure out which factors are offsetting each other. Mark A. Spurbeck: Nick, it's Mark. You're right. The team has done an absolutely incredible job managing costs. We talked about this last quarter, another great quarter of costs, really leading us to believe that those costs are going to be lower on a full year basis. We did lower them $3. We missed 400,000 tons purely due to port congestion. We've seen a lot of that come back in July. We've raised our full year guidance by 200,000 tons in the segment, and the net result is lower cost by $3 for the full year. So really happy with all the progress we've made. Operator: Our next question comes from Katja Jancic with BMO Capital Markets. Katja Jancic: Maybe going back to Centurion. Given that it is -- the development is progressing ahead of schedule, can you talk a bit more about how this could impact the sales targets there? Mark A. Spurbeck: Katya, it's Mark again. A couple of things. One, yes, pulled that longwall production forward earlier into the first quarter of next year, really just 6 months from now. So very exciting time. Think back the company is self-funded by organic cash flow, $600 million to date on the development of that key asset, about $100 million to go in the south before that longwall production starts. Pulling it forward earlier, we'll obviously start production earlier. But when you look at the timing of the production there, it probably also may accelerate a longwall move, their first longwall move. So previously, we have 3.5 million tons out there for next year production. We're not changing that yet today. Katja Jancic: Okay. And then maybe on the PRB cost, just to confirm, that includes now the new royalty rate? Mark A. Spurbeck: Yes, it does. So the lower reduction from 12.5% to 7% is baked into that guidance. So increased volumes by 5 million tons in the PRB for the full year, seeing continued strong demand. We will have a benefit to our costs in the second half of the year due to that lower royalty rate. As we mentioned last quarter, a portion of that does go back to certain customers. We'll actually see that as a net reduction in revenue, our average realized sales price. So a little bit comes out there. But net-net, we're looking at about a $0.40 per ton benefit to Peabody over second half tons. So that's in that $15 million to $20 million range. Katja Jancic: And then going to next year, I think on an annualized basis, it would be closer to $60 million, if I'm not mistaken. Is there opportunity to further increase the potential benefit versus what you're getting right now? Mark A. Spurbeck: Yes. Going forward, obviously, that benefit, as Jim mentioned in his remarks, will make the PRB coal just more cost competitive. So we expect that to help overall volumes. How much of that is the Peabody's account will depend on new contracts as we sign that up. Right now, we're probably about 2/3 signed up for '26 and maybe 50% for '27. Operator: [Operator Instructions] And the next question comes from Nathan Martin with -- the Benchmark Company. Nathan Pierson Martin: I think a lot of my questions have been touched on, but you mentioned Shoal Creek will benefit from the 2.5% production tax credit for met coal that was included in the Big Beautiful Bill. Could you guys put a savings estimate kind of around that like you did for the PRB? Mark A. Spurbeck: Yes, Nate, just a reminder, that doesn't take effect until January 1, 2026. So nothing in the full year guidance for that. But I put it about $5 million a year. Nathan Pierson Martin: Okay. And then maybe while I have you, I know I've talked about this on numerous occasions, but once again, operating costs this quarter as well as resource management results added significantly to the 2Q adjusted EBITDA. Any specifics there to call out? I know these segments are lumpy, but can you talk about what your expectations are here for the second half? Are there any other big drivers you see there? Mark A. Spurbeck: Yes, Nate, you're right. We did have some unexpected performance really from some asset sales in the second quarter. We had a continuous minor sale at the Wambo underground mine. As you recall, that will be closing down in the third quarter as well as some miscellaneous U.S. land sales. We have a large portfolio of land and from time to time, we optimize that portfolio, make sales of these assets. It is lumpy and unpredictable. I will say that, that offset the 400,000 tons we lost in the U.S. thermal business really mostly due to that poor rail performance at the Bear Run mine as well as the 400,000 tons we lost just simply due to port congestion, which we're making back up, obviously, in the second half by increasing that full year guidance. So those 2 kind of really offset each other and everything is on track. Nathan Pierson Martin: Are there any big items you kind of see over the second half, Mark, or still uncertain? Mark A. Spurbeck: No. As far as the other items, there's nothing to forecast there. Nathan Pierson Martin: Okay. Got it. Helpful. And then maybe finally, just switching gears. As I'm sure you guys are aware, one of your peers in the PRB is ramping up the new rare earth mine. It's been getting a lot of attention. Jim, has Peabody done any testing of its reserves at this point to see what, if any, reads are present? Just thinking about this given the favorable administration and regulatory backdrop we're seeing currently. James C. Grech: Yes, Nate, that's a timely question. We are advancing into what I'll call a second phase of our rare earth element evaluation program in the PRB. And we had an initial study that we did with the University of Wyoming that we concluded last year. So now we're into the second phase. But the initial data from that study suggested that our roof and floor strata adjacent to the current mining seams could contain some elevated levels of these rare earth elements at both our NARM complex and our Rawhide complex. And these initial indications that we have seem to show that we have better -- the same or better concentrations than others are reporting the PRB. And I will say one thing that is important to note as we move forward with this, the rare earth elements that are sitting in these clays are very accessible to us because we're already uncovering them in the coal mining process. We need to develop new mines to excavate this overburden. So this quarter, we're going to do some more sampling and laboratory analysis at our sites. So we're in some very early days, but we certainly have more than enough information justifying going forward. So this is not very -- any real appreciable capital for us right now. We're in the study phase, Very, very encouraging initially. But I guess I'll leave it. Stay tuned for some more information as we advance this. Operator: And the next question is a follow-up from Nick Giles with B. Riley Securities. Nicholas Giles: Just one on liquidity. You ended the quarter with $586 million of cash. And I was wondering if you could remind us how much of that cash is fully unencumbered? And then maybe related, sorry if I missed this, but how much has been spent or how much spend remains at Centurion to ultimately bring you to commercial production? Mark A. Spurbeck: Yes. Thanks, Nick. No concerns here. On the cash on the balance sheet, that total amount of cash and cash equivalents of about $586 million is unrestricted, unencumbered and fully available to the company. You do see on our balance sheet a separate line item for restricted cash and collateral of about $800 million, $850 million. Again, that primarily relates to all the prefunded of the reclamation liability across the globe. And then as far as Centurion capital for the South development, there's about another $100 million in the second half of the year that would get us to longwall production. Again, our initial target on that was $489 million. I think if you add that $100 million, you might get to about $495 million. So almost right on the dot. Nicholas Giles: Great. That's really helpful. Maybe just on the restricted cash and collateral, can you remind us, are there any relevant time lines we should be thinking about as far as unlocking some of that restricted cash? Just don't want to leave anything out there. Mark A. Spurbeck: Yes. There's about $520 million of that is related to the surety agreement with our reclamation providers for future -- bonding providers for future reclamation. We have been able to reduce that amount over the last year, 1.5 years. And really, that's done by continuing to do the reclamation work and getting bond releases. At the beginning of the year, we talked about a $100 million reduction. So we've had some pretty good success there. Again, it's lumpy as that work gets done and as bond releases get approved. But we continue to knock that down. Operator: And this concludes today's question-and-answer session. I would now like to turn today's conference back over to Jim Grech for any closing remarks. James C. Grech: Well, thank you, operator, and thanks to everyone for the time today. And I also want to make sure I give recognition to our Peabody team, which amid everything else that's going on, we are again turning in record safety performance on track to beat last year's performance, which was the best in our 140-plus year history. So very appreciative of that. So we look forward to keeping all of you up to date on our progress as the year rolls on. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

Operator: Good day, and welcome to Peabody Q1 2025 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Vic Svec. Please go ahead. Vic Svec: Well, thank you, operator, and good morning all. Thank you for joining today to take part in Peabody's first quarter call. Remarks today will be from Peabody's President and CEO, Jim Grech; CFO, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Following the remarks naturally, we will open up the call to questions. We do have some forward-looking statement information today. And you'll find our statements on forward-looking info in the release. We do encourage you to consider the risk factors reference here as well as those in our public filings with the SEC. And I'll now turn the call over to Jim. Jim Grech: Thanks Vic and good morning everyone. It's clear that Peabody has had an excellent start to the year. The platform demonstrated two significant attributes that I'll emphasize today: first, the balance and resiliency of our diversified global portfolio; and second, the ability of our team to manage to the market and control the controllables. I'll summarize some of our highlights before turning this call over to Malcolm. First of all, our Peabody team did a great job of cost control in the first quarter coming in below our expectations for both the seaborne thermal and met coal segments and our U.S. thermal segments came in at the low end of our first quarter cost target range. Our ability to manage costs is a key driver of success at a time of cyclical market softness in the seaborne markets. Peabody also is on budget and ahead of schedule for the Centurion Mine with our ramp up of production slated for early next year. I'll remind investors that this is an operation projected to have a low cost structure and among the highest realizations in the steelmaking coal universe. So we expect Centurion to garner the highest margins in the Peabody system over time. I was also privileged to take part in a White House event several weeks ago. There the President signed executive orders to revitalize the U.S. coal industry and expand the use of coal-fired generation. The orders are intended to halt a premature, an ill-advised retirement of coal generation. This comes at time of rising electricity demand and concerns around generation to serve growing U.S. load for data centers, AI and a return of American manufacturing. This occurs against a backdrop where coal plant retirements have been receding and the life spans of U.S. coal plants continue to be extended. Last quarter I quoted the coal plant retirements that were deferred at 26 gigawatts and the National Mining Association now tallies 35 gigawatts of deferrals. That's on a total installed base of 172 gigawatts. In 2024, the existing coal fleet only ran at 42% utilization compared with 72% at their historic levels. The coal plants can shoulder a heavier load of meeting U.S. generation demands, including multiple years of data center growth. That's why our position is aligned with the administrations. We believe that all coal power generators need to defer U.S. coal plant retirements as the situation on the ground has clearly changed. We believe generators should unretire coal plants that have recently been mothballed. And we believe the existing fleet can and should run at much higher utilization levels than it has. And the last point, the U.S. generating fleet has clearly run at higher capacity factors since the first of the year. With coal-fueled generation up a stunning 20% over the prior year, it is clear that coal took market share from higher priced natural gas and other energy sources. Additionally, colder than average winter temperatures in early 2025 led to increased heating demands elevating coal consumption. I will note that no sooner was the ink dry on the executive orders than we received a call from a utility that we currently provide coal to. They were asking about our ability to supply coal on an extended basis for a major power plant that was on the drawing board for early closure. And just a week later, closer to home, we signed an agreement with Associated Electric Cooperative to supply coal requirements for two plants in Missouri. This agreement is expected to total more than 50 million tons of our premium Powder River Basin coal. That would be seven million to eight million tons per year for a minimum of seven years. I’ll make a few points about this type of agreement. First of all, for those who continue to predict the demise of coal, we continue to see substantial U.S. coal demand many years into the future. Second, rural electric co-ops like Associated tend to be very close to their end customers. Their boards are often made up of ranchers, farmers and business people who rely on abundant, reliable and affordable power. And finally, Missouri faces some of the same new challenges of rising electricity demand that most states are grappling with. Missouri officials have raised alarms that they may not have the power to supply their expected load growth even before new data centers come to the state. We’re aware of other midwestern states that join some coastal regions and needing to turn away economic growth opportunities since they can’t promise the reliable power supply needed to meet this potential new demand. That simply shouldn’t be happening in the United States in 2025. It can be directly linked to the short sighted rush in some states to replace reliable and affordable power sources with weather dependent, heavily subsidized intermittent power sources. I’ll note that we are also seeing multiple states pass legislation this year that bolsters coal-fueled electricity. These laws often require that any existing power generation replacements be online before coal plants potentially retire, and they also mandate that these energy forms be reliably dispatchable. That’s something that weather-dependent, intermittent power sources such as wind and solar for all our benefits lack. As the largest U.S. coal supplier, it’s worth noting that it has been some time since we’ve seen policy trends and supply demand fundamentals both move in the right direction that these are exactly the current market dynamics. That’s a brief summary of highlights from recent months. I’ll now turn to an update on Peabody’s acquisition of premium steelmaking coal mines in Australia from Anglo American. Yesterday we notified Anglo of a material adverse change that impacted Peabody’s planned acquisition of the steelmaking coal assets from Anglo. The material adverse change notice relates to issues involving the Moranbah North Mine, which, as you may know, remains inactive following what was described as a gas ignition event in March. While we have been nearing completion of the steps necessary to complete the acquisition, the issues at Moranbah North have created significant uncertainty around the acquisition. A substantial share of the acquisition value was associated with Moranbah North. A number of facts have brought us now to our position that a material adverse change has occurred. I’ll share several examples. First, standing here today, there is no known timetable for resuming longwall production. Second, we understand that workers had reentered the mine to conduct safety inspections only. Third, the Queensland Mining Union safety representative has stated in the media that he believes it will take a year or years to resume longwall production. Fourth, in conjunction with this incident, the Queensland government has called for a sweeping review into coal mining safety, which we expect could further delay a return to mining. And finally, Peabody’s own experience is that recovery from mine ignitions can take longer, oftentimes much longer than originally contemplated. Under the company’s acquisition agreements if the material adverse change notice is not resolved to Peabody satisfaction and done so in a limited timeframe specified in the agreements, then Peabody may elect to terminate the agreements. We obviously will keep the market apprised of major developments here. Malcolm, I’ll now turn the call over to you to discuss global market fundamentals in more detail. Malcolm Roberts: Thanks Jim. And I’ll add a few details to your comments regarding U.S. Dynamics before turning to seaborne markets. There’s no question that the strong start to U.S. generation has drawn down stockpiles of both mines and customers. We estimate that U.S. generator inventories have declined by more than 25% on a day’s-burn basis since the beginning of the year. Elevated natural gas prices and the intermittent nature of renewables left a strong opening for U.S. coal burn to increase, and it did. For the full year the EIA is projecting coal generation to increase 5% while U.S. coal production declined 6%, which is a strong market fundamental as the year progresses. Year-to-date we have seen good interest in increased volumes as well as near maximums being taken under requirements contracts where we agree to supply all the coal a plant may need. Turning to seaborne thermal coal, thermal coal markets have been well supplied following a weak winter in Asia that both trimmed back demand and provided a backdrop for production. As a result, thermal coal prices reached four year lows in March. At sub $100 thermal coal, prices for high energy products we've begun to see some production rationalisation that can only be expected to accelerate the longer that thermal coal prices remain around current levels. The demand story for thermal coal remains intact with 600 gigawatt of coal fuel generation under construction or in various stages of development, most of which is in Asia. For every coal plant retired in the U.S. over the last decade, more than three plants have switched on in China and India. Within Seaborne Metallurgical coal markets, the beginning of the year has been weak as China has continued to increase steel exports and experience soft domestic demand. When reviewing current met pricing, one true axiom is that one cannot predict future prices, but as we look through past cycles, there are certain elements that need to be in place before market improvement. We see many of those elements today. The average 5-year benchmark price is $80 above March spot levels and at our lowest mark in nearly four years. We estimate that more than 100 million metric tons of seaborne met coal production are underwater at March spot prices, representing some 30% of total seaborne med coal supply. This suggests supply will come out of the market and support a recovery in prices. Almost on cue, we've seen prices rebound modestly from the March low and we'll see what traction that gains. We do note that supply has begun to look increasingly challenged with economics, wet weather in supply regions and unscheduled production outages, all combining to result in a much tighter market where we sit today than where the market was at the end of March. It has been our view that the second half will be stronger with blast furnaces in India coming online. We continue to see India taking over the growth in global metallurgical coal demand in coming years. Finally, a word on tariffs, while the ultimate impact of tariffs may be most felt in an easing of global GDP, we remain optimistic this will be a temporary phenomenon. I would like to point out that China and tariffs have proven to be an immaterial issue for Peabody as less than half a percent of Peabody's volumes were flowing from the U.S. to China. This small volume is now being placed in other markets and of course, we import no coal into the U.S. That's a brief review of coal market dynamics. I'll now turn over to Mark. Mark Spurbeck: Thanks Malcolm and good morning. I would like to echo Jim's comments on our strong start to the year and add a bit more insight on the financial results. In the first quarter, we recorded net income attributable to common stockholders of $34 million or $0.27 per diluted share and adjusted EBITDA of $144 million. Amid challenging market conditions, Peabody's diversified global core portfolio and strong balance sheet continue to deliver value for shareholders. Favorable cost performance across all segments and better-than-anticipated volume from the Seaborne Thermal platform drove strong EBITDA results. We generated $30 million in free cash flow, net of $47 million of continued development at Centurion. From a balance sheet perspective, at March 31, we held nearly $700 million of cash and had over $1 billion of liquidity. Our reclamation obligations remain fully funded and we continued our cash positive net debt position. And we again declared a $0.075 per share dividend. Let's now review segment results. The Seaborne Thermal segment recorded $84 million of adjusted EBITDA and 32% margins. Wilpinjong exceeded production forecasts, exporting an additional 400,000 tons and the segment achieved average cost per ton $6 below first quarter guidance. The Seaborne Thermal platform continues to deliver high margins throughout the cycle. Over the last three years, adjusted EBITDA has outpaced capital expenditures by a 9:1 margin, driving nearly $1.5 billion in cash flow. The Seaborne Metallurgical segment reported $13 million of adjusted EBITDA. With lagging market conditions, we slowed the return from a longwall move at Shoal Creek and increased stockpiles resulting in sales modestly below company targets. The team did a good job reining in cost here as well achieving $12 per ton better than expected. The U.S. thermal mines generated $69 million of adjusted EBITDA in the first quarter. This business epitomizes stable cash flows and low capital reinvestment. 2025 business is fully contracted at planned and production levels and meaningful pieces of 2026 and 2027 are already in the books. The PRB mines exceeded expectations for the quarter by shipping 19.6 million tons, given the sharp increase in coal fuel generation that Jim noted. With the strong start to 2025, the company anticipates increasing demand throughout the year. PRB costs are at the low end of expectations and the segment generated $36 million of adjusted EBITDA. The other U.S. thermal mines delivered $33 million of adjusted EBITDA. Sales were modestly less than expected as the company replenished stockpiles following a longwall move at 20 mile. Compared to the previous quarter, costs per ton were down 6% and at the low end of company expectations. Looking ahead to the second quarter, Seaborne Thermal volumes are expected to be 4 million tons including 2.5 million export tons, 800,000 of which are priced on average at $77 per ton, while 1 million tons of Newcastle product and 700,000 tons of high ash product are unpriced. Costs per ton are expected to be between $45 and $50 per ton more in line with full year guidance after first quarter’s outstanding performance. Seaborne Met are expected to be 2.2 million tons, a significant increase from Q1 results as both Shoal Creek and the Coppabella Moorvale joint venture return to full year production run rates. Costs are expected to be between $120 and $130 per ton as we have a longwall move at Metropolitan and we continue to reconfigure Coppabella for long-term success. In the PRB, we expect to ship 19 million tons slightly lower than last quarter as we enter the traditional shoulder season. Costs are expected to be up modestly for the quarter in the range of $12.50 to $13 per ton due to lower anticipated shipments. The other U.S. thermal coal shipments are expected to increase over the first quarter to 3.3 million tons as 20 mile returns to normal production levels. Costs are anticipated to be between $41 and $45 per ton, a little better than the first quarter on higher anticipated volumes. In summary, we delivered a strong first quarter remained laser focused on cost containment in a soft price environment and achieved development rates ahead of plan at Centurion. Together with the second quarter, we expect to be right on plan through the first half of 2025 and positioned for an even stronger second half of the year. Jim, I’ll now turn the call back to you. Jim Grech: Thanks Mark. I’ll conclude by saying I trust what you have seen here today is what I see every day when I look at Peabody. A management team that has delivered and is committed to delivering strong results across all cycles, a business that is very well situated against the macro trends moving through the system. A portfolio that is well-positioned and improving in its ability to maximize margins and generate substantial cash flows and a leader in our industry with our large scale, broad diversification, superior quality product mix and long lived asset base that will be working to create increasing shareholder value for decades to come. In total, a company I’m extremely proud to be part of, one you can be proud to be associated with. Operator, we can now open up the line to questions. Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Nick Giles from B. Riley Securities. Please go ahead. Nick Giles: Thank you, Operator. Good morning, everyone. Guys, I first wanted to say nice job on the quarter here. My first question with yesterday’s announcement of your notification of a MAC related to Moranbah North, you mentioned a few factors that you believe constitute a MAC and I was curious if you could outline what the process could look like from here. And I can appreciate these things take longer, is there a view that the mine could be at risk of being permanently sealed or is it a matter of taking longer than currently outlined? Thank you very much. Jim Grech: Hey, Nick, thanks for joining us on the call. And as you said, we got off to a really good start for the year. I'm very proud of what the company has accomplished in the first quarter and setting us up for the rest of the year. I think you asked two different questions there. One is on the timing and then I think the second was about the MAC itself and what constitutes it. On the first one on the timing, there's a 10-day period, which angle has to formally respond back to us on the MAC itself and how they intend to go forward. And then after that, it could be up to 90 days or less to work through a cure period. So it sort of sets the boundaries there of where we're at on timing. And there's quite a few variables in there that could affect the 90 days to make it, a shorter period. But that would be the outermost length of time to try to agree on some type of cure. And so on your other question, on the MAC itself, I will say that, we said there was – I cited some variables in my comments and we are under NDA, so there's only so much information that we can put out there. I will say though, that we have employed quite a few technical experts, consultants, plus our own internal team and we went through a very rigorous analysis of the situation and its potential impacts and we view them to be – have the potential to be very, very significant. So in elaborating on the comments that I made just a few moments ago, as we stand here today, there is no known timetable for resuming Longwall production sustainably. That is just not known. And it is even known if the current Longwall will ever run again. That is not known at this point in time. Our own experience has been from mine ignitions. The timelines can take long or even longer than you anticipated, and in our experience, unfortunately, had us sealing in a Longwall. We also understand, as I noted, that the workers have not yet reentered the mine to do any production work, only to do inspections. We're getting on 40 days here now where no work other than inspections, no production work has been done in that mine. So to have a timeline that says from when the ignition occurred to a Longwall running sustainably in three to four months to us does not seem reasonable and is again part of the data that we've used and analysis to do the MAC. And the last point I'd like to make there, Nick, is the Queensland Mine Safety represented has stated in the media that he believes it will take a year or years to resume Longwall production. So again, based on a lot of data that we didn't cover and the facts that I've just talked about in a very rigorous technical analysis and economic analysis, we feel very comfortable with the MAC notice that we've given to Anglo. Nick Giles: Jim, I really appreciate all those comments. This is very helpful. So under the – assuming that a MAC has in fact been triggered, you did note in the release yesterday that Peabody may elect to terminate the agreement if the MAC is not resolved. And maybe just a clarifying question on your comments there. Should we assume that this resolution would be not only a resumption of Longwall mining, but a sustained resolution – sustained Longwall mining. And so to you, what does that look like? Is there – would there be a target level of production in mine? Just any more color around that would be helpful. Jim Grech: Nick, I'm not going to get into too many details here. I don't want to get into negotiations on our earnings call. But I'll just say that we need to see a sustainable longwall production, a longwell that is up and running well for a period of time. And so I just like to leave it at that. And we’ll see where that takes us, if anywhere in future discussions. Nick Giles: Hey, fair enough. And one more if I could, I mean, how should we think about the permanent financing process as these issues at Moranbah North play out? Should we assume those discussions are on hold or any color you could share around that. Mark Spurbeck: Good morning, Nick, it’s Mark. Yes, with regard to financing, we kicked off our marketing had wall crossed nearly 50 firms, very strong interest in underwriting the transaction, large support. Unfortunately, when we were scheduled to kick off our management discussions and meetings with these investors, the event happened the very same day. We held those conversations. But it’s clear now that with all of the uncertainty around Moranbah North and as Jim mentioned, this most significant piece of the transaction, investors much like us, aren’t willing to underwrite that uncertainty. So until further clarity is noted, our financing is on hold. Nick Giles: Guys, again, I really appreciate all the comments. So continued best of luck. Mark Spurbeck: Thanks Nick. Operator: Thank you. Your next question comes from Chris LaFemina from Jefferies. Please go ahead. Chris LaFemina: Hey guys, thanks for taking my questions. I have a few questions related to the Anglo deal. The first is just on the MAC itself. I mean, Moranbah North has a history of gas related safety stoppages and Anglo had always talked about the risks in the mine. It had ground disability issues and again, high levels of gas. And they’ve had incidents in the past. And obviously this one seems to be a little bit more severe, but it’s not really that inconsistent with what we’ve seen historically in this asset. So the first question is what’s different about this event that makes it a material adverse change versus what we’ve seen historically in this mine. Jim Grech: Chris, again I’m not going to start getting into past events versus this event. I’m just going to comment on our belief under our agreements with Anglo that this constitutes a MAC from where we sit today. And again, on the points I just made in responding to Nick, we feel very, very confident in our approach and the claim that we’ve made based on the data that we’ve done with this incident. Chris LaFemina: Okay. Thanks. And then secondly on timing so that Anglo has a 90 day response period to present a MAC cure, and if it’s to your satisfaction, obviously the deal can still go forward. And if it’s not, if we assume that there’s some progress, what has to happen for the long stop date extension to kick in? So because I mean, I think there’s two different extension options, which can actually take us to early next year or middle of next year. And obviously the more time that we have, the more likely it is this mine can actually come back online. So do you have to agree with the request for a long stop extension in order for that to actually happen or does Anglo have to prove that there’s progress and there’s an arbitrator that decides on that? How does that all work? Jim Grech: Chris, you got a lot of questions or a lot of different points in there. And again, for the process that we have here with the MAC, they have 10 days to respond how they wish to go forward or not. And if we’re going to try to cure, it could be up to 90 days to work through that process. And I’ll just state again, we have to be satisfied with the cure to accept it. If not, we do have the option to proceed with the termination. So the long stop date and what you’re talking about I think has to – again, not trying to get into this too much. But I think that’s referring to just the closing process of the sale and that’s a different process. So don’t get the two of them intertwined with each other. Chris LaFemina: Okay. Got it. And then finally, just in terms of different possibilities here, I mean if we assume that this mine comes back online, well then the deal will close if the mine is [Audio Dip] I would think would trigger clearly a MAC. But what if there’s kind of a scenario where there’s a timeline, but the timeline is relatively long. And would you consider various different structures around the deal? So for example, in the initial transaction you have these contingent deferred payments on a Grosvenor restart. Is that the kind of thing you consider from Moranbah North as well? I mean, is it really around structure and price and you still want to get the deal done? If you’re confident that this mine can come back online even if you do have the option to walk away from the deal because of the MAC. I’m not sure if I asked that question well, but… Jim Grech: You asked it well, Chris. But I'm just not going to get into speculation on different structures how this can be solved going forward. We'll get into those discussions with Anglo. I'm looking forward hopefully to getting into those constructive discussions with Anglo. I will just say that whatever, however we go forward, there just has to be a recognition that there is a significant value impact on Moranbah North because of this situation. And again, a pathway to sustainable Longwall performance is a key thing that we'll be looking for. Chris LaFemina: Got it. Thanks guys. Good luck. Jim Grech: Thanks, Chris. Operator: Thank you. Your next question comes from Katja Jancic from BMO Capital Markets. Please go ahead. Katja Jancic: Hi. Thank you for taking my questions. Maybe just one more quick one on the acquisition side, I think you mentioned that all financing is now on hold. Does that also include potentially selling any minority interest in the Centurion line? Jim Grech: Katja, there is no correlation or tie in between the two processes. They would go forward or not completely independent of each other. They were not intertwined in any way, fashion or means at all. Now the Centurion process we have been exploring and continue to explore a potential partial sale. We've had a very, very robust response to that. But we're still real early in the processes of deciding whether we want to proceed or not on that. It's still early days on that. But again, I'll make it very clear there is no correlation between any potential sale of any aspect of Centurion and the Anglo [ph] process. Katja Jancic: Okay, that's good. Thank you. And then maybe focusing a little bit on the cost. Obviously a very good quarter on the cost side. But then when I look at second quarter guide, can you talk about why we're going back to more annualized numbers and what are some of the puts and takes that really drove the first quarter cost down and these that potentially are not repeating in second quarter? Mark Spurbeck: Good morning Katja. Yes, a couple of things to note. First quarter performance is absolutely outstanding and want to thank all of our mine general managers and operations leadership for really turning in a strong performance in first quarter. Laser focused on costs. We saw a reduction in overtime, shifts in contractors and improved productivity. So really off to a great start to 2025. When we look at volumes, volumes coming down in the second quarter in the PRB quarter-over-quarter. See the same thing in Seaborne Thermal. Seaborne Met we do see some volumes increasing quarter-over-quarter but costs going up there. I'll remind you as we talked last quarter that we continue to reset Coppabella for long-term consistency and success. For the full year, we're going to move about an additional 6 million BCMs which is expected to increase segment cost nearly $5 a ton for the full year. We got a good start to that in first quarter but less than ratable. So we're expecting more of that in the second quarter. So you can see that, right now we're definitely trending toward the low end of some of those cost guidances for the year. I do see upside in Seaborne Met costs, I do see upside in Seaborne Thermal costs. And as Jim noted and I as well in the remarks, I see upside in PRB volumes going forward with strong demand and strong start to 2025. So we've had a really good start to the year. We're one quarter into the year, we haven't changed our full year guidance but are definitely trending in the right direction. Katja Jancic: Thank you. Mark Spurbeck: You're welcome. Operator: Thank you. Your next question comes from Nathan Martin from the Benchmark Company. Please go ahead. Nathan Martin: Thanks operator. Good morning everyone. Congrats on the quarter. I'm going to come to the Shoal Creek Mine for a second. You guys mentioned the slower restart of the Longwall there due to market conditions. Is this just a lack of demand, low price? Maybe a combination of both? And then with net costs in the first quarter well below guidance and Mark, you just highlighted some of the items there, even on fewer shipments, did the delayed restart of Shoal Creek have anything to do with that? Did that help? How should we think about that mine going forward this year? Malcolm Roberts: Nate, Malcolm here. I'll let Mark talk to cost. Look what we saw during the quarter for I think everyone in the U.S. saw this but during March it was a pretty bleak period looking to put product, particularly high vol product into the market. There was a lot of threats of retaliatory tariffs and the like. And the spot market dropped to on a short basis potential for high vol product very close to two figures. We were seeing others do deals at those types of levels and we decided to hold some volume back. So to give you an idea, we held back about 170,000 tons of sales we otherwise would have planned to have made. The markets recovered from there. People are – the China issue, people have rebalanced volumes and the like. So we've got through that. But it was prudent to hold off the restart of the long haul because we wanted to be sure that we had the product placed for the next quarter and you don't want to stop along once you've started it. So that was really what we did there. That may have helped cost, but Mark might be able to help a little bit with that. Mark Spurbeck: Yes. Sure, Nate. Shoal Creek did not help improve costs in the first quarter. It actually probably impaired it a bit with the lower production increase cost there. Shoal Creek is not – is probably below our average cost for the full segment. So really the first quarter performance was just outstanding productivity and cost management at the other mines. Nathan Martin: Okay. That's helpful. Just maybe a follow-up there. I mean, Platts, I think high vol A index is around $176 of a metric ton today. If we look at the net back there, Malcolm, like what does that look like are you guys still making a margin? It sounds like you should based on Mark's comment that it's one of your lower cost met mines. Malcolm Roberts: Yes, look, this will be the third quarter that I talk to this issue. And the issue is, is that there's a high vol index which is an FOB index for predominantly supply into the Atlantic market. But the Atlantic market is pretty lackluster in demand at this time. So you've really got to look at what the delivered price is into Asia. And at the moment, the delivered price into Asia is somewhere between say $160 and $170. And the freight on that is somewhere between $30 to $35. So that gives you an idea on a metric basis what the netback would be FOB. So it’s a little way below the high vol A index would be how I see it. Nathan Martin: Okay. Appreciate that. Then shifting over to the Seaborne Thermal segment. Obviously strong quarter there in the first quarter, 4.4 million tons sales above your original guidance. It's like 2Q guidance is 4 million tons. So that puts you guys at what 8.4 million tons in the first half, which we annualize is well above the high end of full year guidance. So maybe talk to us a little bit about what's expected in the second half? Is there something that's going to weigh on shipments? Or could we be positioned to maybe improve on that full year guidance range? Mark Spurbeck: Nate, a couple of things. First, remember that the Wambo underground mine is coming offline mid-year end of production there. So we won't see any production in the second half of the year from the Wambo underground for that segment. I'd also say Wilpinjong had a very, very strong first quarter, as we noted, an additional 400,000 tons above expectations that will not repeat itself. So pull that out and you're looking at lower production for Wilpinjong in the second half of the year as well. Nathan Martin: Got it. Mark, thanks for that reminder. And then maybe finally, Jim, you mentioned, attending the signing of the executive orders aimed at supporting U.S. coal production and coal fired power generation. You called out a couple items, but maybe it'd be great to get some additional thoughts on how you think some of these could impact your business, whether it's federal leasing or two-year waivers from MATS or any other potential changes? Thanks. Jim Grech: Yes, Nate. As far as leasing goes, that really doesn't have any impact on us. We have very strong leases and we have decades and decades of reserves. If there's some decreases in royalties which would be occurring that would be certainly helpful to us. But our position is really strong and our leases out west or in the Midwest with the reserves we control as well. And I think the most impactful, there's a lot of changes, a lot of regulations. It's sort of dizzying when you look at everything, the EPA tried to do over the past years to damage coal fired generation and to undo that. We can talk for hours about all of the things that have to be done. And I will say that through the executive orders and the meetings that we've had with the EPA, with the DOE and the DOI, they're focused on all of those items. But if I had to give you one specific thing, Nate, the edict to not close down any more coal plants and to look at un-retiring recently mothballed ones and giving that support so coal generators can feel comfortable to keep the plants open and to start contracting out for those plants. And I gave the one sort of example, and I'll say it's generic because we've had more than one of coal consumers contacting our marketing team to now start supplying them coal again or for longer terms when they thought those plants were going be shutdown. And of course, the associated contract, which we have been working on some time, as they are very committed to their cogeneration and a long-term relationship with us. But to enter into that seven-year agreement for the substantial tons is what we're seeing is, again, more – much more interest to enter into term agreements. And I'll tie both of those together as it relates to Peabody. If you're a coal consumer and you want to make sure you have a reliable supply of coal for your plant for many years, you want to go to a low cost producer or a producer that has reserves to back up these long-term commitments, and our U.S. assets check all those boxes for our customers. Nathan Martin: Very helpful, Jim. I'll leave it there. Appreciate the time, gentlemen, and best of luck. Jim Grech: Thank you, Nate. Operator: Thank you. Your next follow-up question comes from Nick Giles from B. Riley Securities. Please go ahead. Nick Giles: Thanks for taking my follow-up. Nate asked it well. So I'll turn to the agreement with Associated, which is nice to see. Maybe just to ask it in a different way. Does this agreement change the way you're thinking about deploying capital in the PRB or at your Other U.S. Thermal mines? And then is there any color around pricing and margin that you can provide? I'm not sure we've seen the agreement flow through to PRB spot prices, but obviously this could be impacting duration, so appreciate any color? Jim Grech: Yes. So Nick, I think Mark made the point, and we've made them at other times, that our U.S. assets are very, very low capital for the amount of cash flow that they generate. And we've always invested in them with the expectation that those mines are going to be running for the life of their reserves. So we've never shortchanged the capital on them, and that's part of the commitment we've made to our customers that while other coal companies may be wavering or other coal generation plants may be looking to shutdown, we're going to be here for you, you can count on us, and we're investing to be here for you. So it doesn't change at all what we're doing with our capital investment or our maintenance, because we've always been situating ourselves to be here for the long-term and to have very good margins. Now, I think the second part of your question, if I was trying to understand, Nick, were you asking specifically about the pricing mechanisms in the Associated contract? Was that what you were asking about, just in general? Nick Giles: Both, both. Jim Grech: Yes. Nick, I'd just say that it gets into the confidential nature of the contract. I'm not sure we're really free to be talking about the pricing mechanisms within that contract. But if you want to talk about, yes, I guess all I'll say is, Anit [ph], it's market based. I'll just leave it at that, if that's helpful, Nick, and I won't go any further than that. And if you're talking about our other – the rest of our portfolio and the margins and the contracting, I think I'll just refer back to what we have in the guidance maybe as best to answer that, because it's sort of a broad question, Nick. If there's something more specific, we'll be happy to follow-up with you on that. But does that give you enough of what you're looking for? Nick Giles: That's enough. I guess maybe asked in a different way, as you're still generating a healthy margin in the PRB. And so, what should give us the confidence that we can underwrite a margin like this into the long-term, especially as PRB volumes could decline? Jim Grech: Well, I think there's a few things. First off, you can look at our track record and our history, and you can look at the strength of our reserves. So our cost structure and what we've been specifically in the last six months to nine months, what we've done with our cost structures, I think you can expect to see us that going forward and – with that. So on the cost side, the basis of our reserves, how we've historically performed, I think should give you all the confidence in the world for that. And then, going forward, market prices are always a product of supply and demand. And we have the best reserve position in the basin. We have the lowest cost reserve position in the basin. So, whether other producers are here for the time that we can be here. I'll leave that up to somebody else to comment on. But we feel very, very good about our position compared to other companies. And, the demand side for all the things we talked about has a lot of tailwinds behind it. So, today's prices or stronger prices, our costs are going to be very predictable. And we feel very good about those margins. Nick Giles: Jim, that's all very helpful. And I agree that your competitive advantage in the PRB is underappreciated. So, if I could sneak in one more. Nice to see Centurion ahead of schedule. Apologies if I missed it, but what was the spend towards Centurion in Q1 and what remains in 2025? Jim Grech: Yes. Nick, I'll give that one over to Mark to respond to. Mark Spurbeck: Sure, Jim. In the first quarter, we spent $47 million toward the development of Centurion. When you're looking at the total to get that longwall into production in the Southern district, there's about $150 million left. Nick Giles: Got it. Thanks. Jim Grech: Yes, it's really quite an achievement. I think, Nick, a lot of people misappreciate that as well that we fully funded and self-finance the entire development of Centurion when you include the north the acquisition awards. Well, we've spent $540 million to date on that, all self-financed, while still continuing to provide shareholder returns and dividends. So looking forward to getting that done. I think should be in Longwall Production first quarter next year. Nick Giles: Good to hear, guys. Thanks again for all the color. Best of luck. Jim Grech: Thank you, Nick. Mark Spurbeck: Thank you. Jim Grech: Thank you, operator. And thanks to everyone for the time today. I also want to give recognition to our Peabody team and our continued focus on safe, low cost, environmentally responsible operations. So, we look forward to keeping you up to date on our progress as the year rolls on. Thank you. Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Good day, and welcome to the Peabody Energy Corporation Q4 2024 earnings call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Vic Schveck. Please go ahead. Vic Schveck: Well, thank you, operator, and good morning, everyone. Jim Grech: Thank you all for joining today to take part in Peabody Energy Corporation's fourth quarter conference call. Remarks today will be from Peabody Energy Corporation's President and CEO, Jim Grech, CFO, Mark Spurbeck, and our Chief Marketing Officer, Malcolm Roberts. Following the remarks, of course, we will open up the call to questions. Now we do have some forward-looking statement information today, and you will find our statements on forward-looking info in the release. We do encourage you to consider the risk factors that we reference here along with our public filings with the SEC. And I will now turn the call over to Trudy. Trudy: Thanks, Vic. Good morning, everyone. Peabody Energy Corporation had a strong finish to 2024, marked by a highly productive quarter that sets the foundation for multiple years of substantial growth and value creation. Consider that in the past three months, we turned in solid fourth-quarter results even in the face of some geologic and pricing challenges. Shipped the first coal to market from the Centurion mine, agreed to buy multiple premium hard coking coal mines from Anglo American, entered into an agreement with clean energy leader RWE to develop renewable energy projects on reclaimed mine lands, completed a year in which we returned $221 million to shareholders while continuing to reinvest in the business, set a new 140-plus year company record for lowest accident rates, reclaimed 70% more land than we disturbed while freeing up more than $100 million in reclamation bonding obligations, and again, achieved the top rating for governance by ratings firm ISS. We know of no other coal company that can cite that record of recent positive momentum. And while it is an impressive list, by no means can we say that we are hitting on all cylinders yet. Jim Grech: Case in point, keyboard and my coal prices are up 45% in the past year as we move through the low ups of the cycle, expectations of improvement later in the year. US coal demand has not yet caught the uplift that can be expected from growing domestic power demand, which we believe will occur over time. And we have worked through geologic challenges at our Twenty Mile mine with increased production just now taking hold. I will spend a moment updating you on our major actions to transform Peabody Energy Corporation into a company focused on serving growing met coal demands at Asian steel mills. Late in the quarter, Peabody Energy Corporation shipped its first coal from the Centurion mine to a Southeast Asian steel mill. We now have four continuous miners in coal in Centurion's Southern District and expect two continuous miners to enter coal in the Northern District in the third quarter. For 2025, we are looking at half a million tons of development coal from Centurion, ahead of a projected 3.5 million tons in 2026, when longwall production in the Southern District begins. I am also pleased to report that Peabody Energy Corporation's planned acquisition of premium hard coking coal mines in Australia from Anglo American is progressing well. Since signing the agreement, we have been active on a number of fronts. We have received regulatory approvals from several jurisdictions, advanced the contractual preemption process, started the permanent financing process, and have begun in-depth integration planning. We are now targeting completion of the acquisition next quarter, obviously subject to clearing the closing conditions. I will remind investors of the many strategic and financial aspects that make this transaction so appealing. First of all, this positions Peabody Energy Corporation as a leading seaborne met coal fire. On a pro forma basis, we expect three-fourths of Peabody Energy Corporation's EBITDA in 2026 to come from metallurgical coal. This is also an acquisition that we believe is accretive to cash flows across all periods. The transaction boosts both coke and coke quality, improving realizations and mine lives with averages of more than 20 years. Geographically, we will have the logistics advantage of having most of our met coal production and sales in the Pacific Rim. As global steel production continues to shift to Asia, we are highly confident that there are some $100 million a year in synergies to be captured post-acquisition. Finally, we believe that the strong cash flows of the acquired assets will accommodate continued shareholder returns and lead to a favorable rerating of the stock. From the acquired mines, we are projecting 11.3 million tons of saleable production in our first full year of ownership in 2026. Since our November announcement, our confidence in those numbers has only grown. For example, a number of operational improvements are being implemented by Anglo, and as we speak, the new longwall at Morinby North is being ordered. In a moment, I will turn the call over to Malcolm Roberts, our Chief Marketing Officer, to talk through the global coal markets. As a lead-in, I would note that the US is experiencing the strongest confluence of policy and commercial tailwinds that we have seen in more than two decades. Consider these facts. First of all, after some 15 years of flat electricity load growth in the US, utility experts and industry observers are now expecting 2% to 3% annual load growth in coming years due to data centers and increased electrification. Second, following multiple years of premature retirements in coal-fueled generation, we have now seen deferrals in retirement plans extending the life of 51 coal units in 17 states, constituting 26 gigawatts of power, and up to power 20 million homes. Third, we have a new administration that is vocally pro-coal and is already taking steps to facilitate common-sense policies to assist our utility customers while also encouraging greater exports of LNG to Europe. Fourth, we are seeing a favorable environment to increase utilization of existing coal plants, which ran at 72% of capacity on average early last decade but most recently were only averaging 42% utilization. And finally, we have new entrants into merchant power generation and look to change up the dynamics of recent years. Peabody Energy Corporation itself has been approached by household name private equity funds that are looking for creative means to match up reliable low-cost coal plants with growing data center needs or backfill generation to feed a capacity-hungry grid. Having covered US markets, Malcolm, I will ask you to complete the discussion with seaborne supply-demand dynamics. Malcolm Roberts: Thanks, Jim. You have given a good overview of US policy and market trends. Those trends, along with strong winter weather, have drawn down stockpiles in our mines and at our customers. US thermal coal production is largely spoken for during the first half of the year, and we expect to see our customer base come to market for additional volumes as the year progresses. In our discussions with customers, they are anecdotally confirming that the narrative of data centers driving electricity demand growth is real. Now I will turn to what we are seeing in global seaborne markets, starting with met. Near-term seaborne met markets remain well supplied as the Chinese domestic economy remains soft. China's apparent steel consumption declined by approximately 5% in 2024 to just under 900 million tons, leading to net steel exports to increase by 30% to the highest level since 2015. Another way of viewing steel from our perspective is its refined metallurgical coal, so China's strong steel exports translated into otherwise weaker met coal demand elsewhere. Steel production outside of China has remained largely steady as a result of growth in India. However, margins have become challenged. Like most observers, we do not view China as the growth engine for coal demand growth over time, though. That role is likely to be played by India, and in 2025, we expect an 8% increase in Indian steel production underwritten by several new blast furnaces coming online. From a supply perspective, we are seeing some tightness in the premium low-volatile PCI segment. In the coking coal segment, there have been notable disruptions in high-volatile coking coal production, including mine fires and bankruptcies. That is partially offsetting some of the easing of demand from Atlantic buyers. Longer-term, we anticipate the demand and supply fundamentals to drive increasing price spreads between premium hard coking coals and lesser grades. Of course, this is a thesis underpinning the development of the Centurion mine and our premium hard coking coal acquisition. Turning to seaborne thermal markets, to wrap up 2024, China increased total coal imports to 543 million metric tons, a 14.4% increase from 2023. China's imports of Australian coal increased by over 50% during the same period. The increase in Chinese imports was the key contributor to global seaborne demand growth during 2024. Within the global seaborne thermal market, we have seen a mix in the Northern Hemisphere, colder weather in the Atlantic, and warmer winter weather in Asia. Recent demand for imports has been mixed, with stockpiles in jurisdictions such as China and India higher than normal. Attention is now turning to industrial activity following Lunar New Year breaks in China and Asia more generally in the coming weeks. As the year progresses, we will see how Europe restocking of natural gas may influence LNG pricing and the relative competitiveness of Australian high-energy coal. We will also observe how recently announced trade tariffs influence seaborne trade flows, as the relative price competitiveness of US coal exports to China are likely impacted. That is a brief review of the coal market dynamics. I will leave it there for now and welcome the opportunity to provide further details in Q&A. And now I will turn the call over to Mark. Mark Spurbeck: Thanks, Malcolm, and good morning. Jim noted our strong finish to the year. And I will provide some additional color. In the fourth quarter, we recorded net income attributable to common stockholders of $31 million or $0.25 per diluted share and adjusted EBITDA of $177 million. The company generated $121 million of operating cash flow from continuing operations. This contributed to a full-year net income attributable to common stockholders of $371 million and adjusted EBITDA of $872 million. The company generated $613 million of operating cash flow from continuing operations. In 2024, we returned $121 million to shareholders through share repurchases and dividends and advanced Centurion through its first coal shipment in the fourth quarter. I would note since restarting our shareholder return program, we have returned $600 million to shareholders and invested $500 million in the development and expansion of Centurion. At December 31st, Peabody Energy Corporation had $700 million of cash and available liquidity of $1.1 billion, and our reclamation obligations remain fully funded. We believe this financial strength and balanced capital allocation will best reward our shareholders over time. Also positioned Peabody Energy Corporation for the Anglo acquisition, marking a deliberate progression in Peabody Energy Corporation's financial and strategic transformation. Looking ahead, Peabody Energy Corporation's capital allocation will be heavily shaped by our pending acquisition. As a reminder, we have structured the transaction with a combination of upfront, deferred, and contingent payments. This is all designed to enable the anticipated cash flows from the acquired assets to self-fund the transaction and set up a higher baseline sustainable shareholder returns. Let's now review the segment results. The fourth quarter, Seaborne Thermal recorded $112 million of adjusted EBITDA on margins of 36%. Tons shipped were ahead of expectations, and that was primarily due to higher than anticipated production at Wambo Underground. Seaborne thermal cost per ton remained stable with the third quarter, beating expectations. For the full year, Seaborne Thermal segment reported $430 million of adjusted EBITDA. Shipments increased nearly a million tons from 2023, and costs were down about a dollar per ton, resulting in EBITDA margins of 35%. The segment generated over $350 million of free cash flow. The Seaborne Met segment reported $23 million of adjusted EBITDA in the fourth quarter. Shipments increased 500,000 tons compared to the third quarter, in line with expectations. Cost per ton improved a better than expected 12% due to higher than anticipated production at Shoal Creek, as well as a weaker Australian dollar. This was partly offset by lower production at Capabella. The average realized price was down about $21 per ton compared to last quarter due to a higher mix of Shoal Creek sales. We also saw benchmark prices for PCI and high vol A coals each down about $15 a ton quarter over quarter. For the full year, the Seaborne Met segment reported $243 million of adjusted EBITDA. Shipments increased 400,000 tons year over year to 7.3 million. The segment achieved EBITDA margins of 15%, a favorable result considering that market prices pushed realizations down $44 per ton in the year. Switching to US thermal, the mines generated $93 million of adjusted EBITDA in the fourth quarter, resulting in $72 million of free cash flow. PRB mines shipped 23 million tons, well ahead of expectations. Continued operational discipline kept costs at $11.50 per ton, the same as last quarter, and that let us maintain the same 17% margins in the fourth quarter and generate $53 million of adjusted EBITDA. The other US thermal mines delivered $41 million of adjusted EBITDA. In the Midwest, shipments reached contractual agreements with certain customers to offset lower 2020 production. Production was 200,000 tons less than expected as the previously disclosed geological conditions at Twenty Mile required us to step the longwall around a rock lens. We have turned the corner on that issue, and longwall production recently resumed, with the mindset for a strong 2025. Together, the US thermal mines produced $289 million of adjusted EBITDA in 2024 and required just $54 million of capital, resulting in $235 million of free cash flow. The last comment I will make on Q4 results relates to other operating costs. We recorded a $41 million noncash charge for the remeasurement of our Australian balance sheet at year-end due to a lower A dollar exchange rate. The weaker Australian dollar benefited operating costs throughout the quarter, providing a bit of a built-in natural hedge to earnings. But as the A dollar weakened throughout the quarter, the period-end remeasurement resulted in a significant net negative impact to Q4 EBITDA. Looking ahead to 2025, I will briefly review guidance for the full year. You see that some analysts are including the Anglo acquisition in their 2025 estimates for Peabody Energy Corporation, but our guidance excludes contributions until the transaction is complete. This year, Seaborne thermal volumes are expected to be lower than 2024 due to reduced production at Wilpin Young and the closing of the Wambo Underground mine midyear, which will be partly offset by higher production from Llamos surface operations. Additionally, domestic cost-plus sales requirements are down another 400,000 tons in 2025, allowing us to achieve export pricing on that volume. Shipments are targeted to be 14.7 million tons, including 9.3 million export tons. Costs are projected to be consistent with 2024 levels at $47 to $52 per ton. Seaborne metallurgical volumes are projected to increase over 1 million tons to 8.5 million, primarily due to higher volume at Shoal Creek and the continued ramp-up at Centurion. This occurs even as we work through the high wall stability challenges at Coppabella as we reconfigure the mine for an optimal long-term solution. Segment costs are targeted at $120 to $130 per ton, in line with last year. In the PRB, we are forecasting shipments between 72 and 78 million tons and currently have 71 million tons priced at $13.85. Costs are expected to remain mostly flat with 2024 levels, $12 to $12.75 per ton. Other US thermal volumes are expected to be about 14 million tons. We have 13.6 million tons priced at $52 and expect costs in the range of $43 to $47 per ton, consistent with last year. Total capital expenditures for 2025 are estimated at $450 million, including $80 million in project capital primarily for the continued development of Centurion. In summary, we delivered on our 2024 goals and remain committed to financial discipline and growing free cash flow per share. 2025 promises to be a busy year that will be shaped by the Anglo acquisition, advancing Centurion, and US policy. For more on that, I will turn the call back to Jim. Jim Grech: Thanks, Mark. I will turn briefly to Peabody Energy Corporation's main focus areas for the new year. It is fair to say that we begin 2025 with an ambitious agenda. Our first focus is an every-year item, the relentless pursuit of safe, productive, and environmentally sound operations. Our second focus this year is to continue to ramp up the flagship Centurion mine on time and on budget. I am pleased to report that development is running ahead of schedule, and all systems are go for our planned longwall start-up early next year. Our third priority is to complete our premium hard coking coal acquisition, which together with Centurion will transform Peabody Energy Corporation's product financial profile. Priority number four is to serve growing Asian thermal coal demand through our low-cost Australian export platform. With longer-term mine extensions teed up, it is no surprise that the International Energy recently reported that last year, the world used a record amount of coal, 8.77 billion metric tons, representing more than one ton for every man, woman, and child on earth. IEA also projects that global coal use will continue to grow for the next several years. Our fifth priority is to leverage our low-cost US coal production to capitalize on emerging favorable policy and commercial themes, and that dynamic continues to unfold as we speak. And finally, we work every day to enhance long-term cash flow per share creation. While the actions we are undertaking today are enhancing our shareholder value proposition in three areas: earnings growth, sustainable shareholder returns, and multiples expansion over time. And it is fair to say that our share price is reflecting none of the potential uplift in valuation from our recent actions. I have never been more optimistic about the prospects for Peabody Energy Corporation and look forward to seeing those positive actions translate into tangible share price appreciation as we continue to execute. Operator, we are now ready to take questions. Operator: We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, the first question comes from Nick Giles with B. Riley Securities. Please go ahead. Nick Giles: Thank you, operator. Good morning, everyone. Hello. My first question is around the preemption rights process. I was wondering if you could add any color around what those conversations have looked like, and I had the same question for any potential stake sale. Is there a preference for incremental stakes in the Anglo assets versus any stake at Centurion? Thank you very much. Jim Grech: Hey, Nick. Good morning. Jim Grech here. On the preemption question, that is part of any sales process. It is a typical contract term when you have joint venture partners. It is progressing well. The timeline for the deadlines on it is sometime in mid-March. We expect that deadline to come and pass, and we will move forward with the closing of the transaction. On the asset sales, could you again ask that question again so I am sure we respond to it correctly? Nick Giles: Yes. Thanks, Jim. That is very helpful. And just on the asset sales, I was wondering if there would be a preference for additional stakes at the Anglo assets versus one at Centurion. Jim Grech: Nick, you know, we would, if anybody, if the discussions lead to fair value, full value offers on the asset sales, we would look at some minority sales in those assets, whether it is with the Anglo assets or Centurion. So we are anticipating that to be part of the financing process that we have here for the acquisition. And some of those steps have been undertaken already. But, you know, it is too early to call what, if any, would be the results of that. Nick Giles: Got it. Jim, that is very helpful. Shifting gears, MET guidance of 8.5 million tons at the midpoint. I assume we are on half a million tons could come from Centurion, but how should we think about bridging from the 2024 level to 2025, and then similarly on the cost side, costs are up at the midpoint versus 2024. So how should we bridge those as well? Thank you very much. Mark Spurbeck: Good morning, Nick, and welcome to the call. I read your note this morning, and you looked like your model was perfect. So congratulations. I think you are doing a better job than Lucas already in your first call. But, yeah, I say that tongue in cheek. I am sure Lucas is listening in. So to answer your question on Seaborne, Matt, you are right. We are up over a million tons and about four to five hundred thousand more year over year as that Centurion. Shoal Creek is also up about six hundred thousand tons. So that is the delta there. As far as costs go, we are forecasting $120 to $130, full year 2024 is $123. So pretty consistent. I would say there are two things that may lead it to be a bit higher, and that is one, I mentioned in my remarks we are resetting Capella for optimal long-term solution. We are going to be moving more ways, about six million bank cubic meters more year over year. And do not forget, we had a pretty weak Aussie dollar as well in 2024. Nick Giles: Mark, I appreciate all the color. To you and the team, continue best of luck. Thank you. Operator: Next question comes from Nathan Martin with The Benchmark Company. Please go ahead. Nathan Martin: Thanks, operator. Good morning, everyone. Jim Grech: Good morning, Nate. Nathan Martin: Maybe just one more question on the Anglo acquisition. You know, you guys mentioned several regulatory approvals have come already. What is left? Anything there from the standpoint that could hold you guys up beyond that targeted Q2 closing? Jim Grech: Nate, we have had some in the restaurant process and, you know, the various international ones, and I think we have one left in Australia. Initial indications are everything is going just fine with them. And the timing in those regulatory approvals is anywhere from later in February to maybe end of March, first week of April. So, it spans that time frame. So just like with the preemptions, you know, we just have to work through the process. There is a time frame involved. We are stepping through it. And right now, everything looks good to us, Nate. Nathan Martin: Sounds good, Jim. And then maybe coming back to the preemptions or really just minority interest sales, does your preference change at all? Or, you know, how should we think about the balance between minority interest sales and debt for the transaction? Jim Grech: Well, I will just have a comment on the sales process, and then I will let Mark get to some of the details. But, you know, as I said, we started the beginning of looking at potential minority sales positions in the Anglo asset and Centurion. And we have had some very robust interest in the assets coming from many different sectors in the US, Australian, international. So again, I am not going to sit here and say what is going to happen because everything is in negotiation, but I will say that there has been very robust interest at the beginning here of this process. Mark Spurbeck: Nate, not a lot has changed from when we announced the transaction and our plans for the permanent financing. The $1.7 billion upfront payment, we expect to be, you know, funded primarily with debt, you know, the lion's share being high-yield secured notes. You know, we have talked about the project-level equity, the minority stake sales as being another key option there. And as Jim mentioned, those discussions are underway. You know, the timing as well as magnitude of those sell-downs become factors here. And then lastly, we would, you know, potentially round out with convertible notes or other financing. So not a lot has changed. I will say that that process is underway. It is going well in the early stages. There is strong inbound interest. We continue to test market capacity, and we are highly confident that we will arrange the financing along the lines we originally announced. Nathan Martin: And Mark, any commentary around potentially needing to issue common equity? I know that is a question investors are focused on. Mark Spurbeck: Yeah. You know, I would probably echo Jim's comments that, you know, reflect our belief that a lot of the value in Peabody Energy Corporation and the pending acquisition are not currently reflected in our share price. Unfortunately, we do not get to pick the time when these types of assets become available. We recognize, you know, spot coal prices are down. But we did not buy these multi-decade assets for short-term changes in spot prices, which can influence the coal equities. Our number one goal remains to enhance shareholder value. And you do that by increasing free cash flow per share. We simulate free cash flow out of the acquisition, you know, our P50 case without Grosvenor results in over $800 million of free cash flow in the initial five years after all of deferred and price contingent consideration, effectively paying one half of that initial consideration off, leaving us with a very manageable permanent debt slice of the capital stack and a significantly higher free cash flow base to provide sustainable shareholder returns. So, you know, we recognize the need to appreciate the volatility in seaborne coal prices and remain prudent to ensure financial resiliency throughout the price cycle so we can execute the strategy. You know, the coal equities have all traded down since the announcement. And we are going to take a good hard look at it. It is the last on our priority list. But we have all the tools in the kit, and we continue to assess what the market will provide. Nathan Martin: Great. Appreciate those thoughts, guys. And then maybe just one final, but we want to leave Malcolm out. I know you touched on this briefly in your prepared remarks, but coming back to China's new 15% tariff on US coal imports. Obviously, the bulk of Peabody Energy Corporation's export sales come from Australia, but you know, how do you see that tariff potentially impacting your business as well as the seaborne markets in general? Malcolm Roberts: Yeah. Look. You know, one thing with the markets is they are a little bit like a balloon. If you push some, and so, you know, US exports are getting pushed here in terms of their price competitiveness into Asia. And for us, we have got about 600,000 tons of product that went to China last year. And that would mean that if we did nothing and continued supplying to China, we would have a 15% lower price. And it really does not help when that is the clearing level and that is your alternative because other customers now, when you look to sell to them in Asia, will be looking at what that alternative is. It is positive for Australia in the sense that Australia becomes more and more competitive in Asia, which is the growth base for met coal demand. But for us, it is probably not such a big issue. I would like not to have seen this happen. But, look, you know, the markets will readjust. Maybe there may be more product go to, US product go to India, and more Australian product go to China to balance that out. Or, you know, more US product to Europe, and less Australian product to Europe. You know, the market will work that out. But to deal with that, we need some price signals. And the price signals to make that readjustment could be a little bit painful in terms of our short credit returns over the next quarter or so. But, look, let us wait and see how it all plays out. But, hopefully, it has given you my perspective on them. Nathan Martin: That is great. And just to clarify, Malcolm, the 600,000 tons to China, is that from Shoal Creek you are referring to specifically? Malcolm Roberts: Yeah. That is Shoal Creek. Nathan Martin: Okay. Got it. Appreciate the time, guys, and best of luck in 2025. Jim Grech: Thanks, Nate. Operator: Next question comes from Katja Janczyk with BMO Capital Markets. Please go ahead. Katja Janczyk: Hi. Thank you for taking my question. Maybe going back to the Metco cost guide, can you talk a bit more about how much Capabella is negatively impacting costs? Because I would assume with production higher, in general, and medical prices lower, the cost should still be trending more positively or lower? Mark Spurbeck: Gotcha. Two things. One, you know, for Q1, you know, we are guiding a little bit higher than the full year on a ratable basis, expected and anticipated at only $113. But we think that Q1, we know what will be impactful. But for the full year, we have put our guidance at $120 to $130. 2024 came in at $123. You know, as I mentioned before, it is really just moving those additional six million BCMs and the really weak A dollar throughout 2024, particularly in the back half of the year, that is driving the difference. Otherwise, we see them pretty consistent. And really, we do not see any significant inflation or other issues. So that is really the story. Does that help? Katja Janczyk: No. No. That is helpful. Thank you. And then maybe there was some report that Dalrymple port was impacted by weather. Are you seeing any impact from that year-to-date? And are there any issues with production given the weather currently in Australia? Malcolm Roberts: Hi, Katja. Malcolm here. Look, this is pretty normal. Monsoonal trough has come over Queensland probably ten days ago and moved from the north of Queensland to the south, and so over the past week, Dalrymple Bay has received around 400 millimeters of rain, and most of the rain has remained coastal. What that means is that the ability to stack coal or reclaim coal when it is very wet with rain is very limited. So there have been outages at the port. And there has been, like, a let us call it a seven-day interruption. But I view that as very short-term. In terms of our mines, we have had a little bit of seasonal rain there but nothing that has created a remarkable interruption at this stage. Katja Janczyk: Okay. Thank you. Operator: Again, if you have a question, our next question comes from Chris with Jefferies. Please go ahead. Chris LaFemina: Thanks, operator. Hey, guys. Thanks for taking my question. I wanted to ask about the thermal coal segments. If we look at the 2025 guidance, it is basically lower volumes and probably lower margins. I mean, costs are flattish, and prices are going to be down at the cost of the pier. They actually to be up. But I wanted to kind of understand where the thermal segments will be heading after 2025. So it is helpful that we have, you know, you have given us some met coal guidance for 2026 on costs and obviously on volumes as well. But with thermal coal hitting because this C1 thermal volumes have been heading lower, PRB obviously heading lower. And it is hard to offset the negative impact of cost leverage when you have declining volume. So we are looking at a thermal coal business that is going to have a flat to rising cost base and declining volumes, and then the EBITDA upside really just depends on higher prices, or is there anything else going on there that could lead to margin expansion and EBITDA growth without prices going up? Jim Grech: Yeah, Chris. I will comment on the US platform, and then Mark and maybe Malcolm can give you some comments on the Australian platform. On the US platform, you know, the PRB tonnages, we have the ability to move those tons up and down. And, you know, some of the forecasts that you see may be pre all of the momentum we are getting currently here within the last few months in the US market. With the, you know, the Trump administration, the strong push for reliability and keeping coal plants open, the load growth. And so in the US, if the market demands are there, which we think, you know, those tailwinds are certainly getting much, much stronger. We can certainly respond with the tonnages in the PRB. Of course, we will also maintain some pricing discipline on that as well to do that. So in the US, I would say the tonnage that you see any decreases made are based on market assumptions and not the physical asset base. So with that, I will let the other guys talk about the Australian platforms then. Mark Spurbeck: Yeah. Good morning, Chris. Just, you know, briefly on seaborne thermal, you know, we are down, you know, this year, year over year. And we kind of talked a bit about this last quarter, but to just to reemphasize, I mean, we pulled, you know, about 200,000 tons forward to Wambo Underground in the fourth quarter and really, you know, really beaten Seaborn and Thermo in the fourth quarter. You know, we have already announced that that underground will cease operations midyear. So, you know, we are going to be down about 800,000 tons year over year at the Wambo Underground for comparison purposes. And Wilpin Young is declining as well, about a million, million four tons. Partially offset by the Wambo open cut, which we expect to be up 10%, maybe another 300,000 tons there. So that is really the delta year over year. And, you know, going forward, we have not provided any guidance beyond 2025 except for what we anticipate from the acquisition. Just to put a marker out there. So we have not given any Peabody Energy Corporation guidance. You know, we have talked about this in the past. The Wilpin Young production continues to decline until we open up pit nine and ten. An extension, a few years out. But along with that is a continued decline in the domestic ton requirements. So I think this year, you know, we are probably looking at in that little over five million tons of export out of Wilpin Young. And I think over the next five years, you are going to see something pretty close to that, about 4.8 to 5 on average. So I really see that being pretty consistent. And then as Jim mentioned, the US piece is really just demand-driven. Chris LaFemina: Okay. Thanks for that. And just secondly on Grosvenor, I think Anglo had some comments this morning about having put some cameras down in the mine, and they saw limited damage, which is pretty encouraging, actually. And I think it seems like there is potential for that to maybe come online a bit sooner than people had expected based on what has been discovered so far. Just could you comment on your understanding of what is happening there and what your thought is about the potential restart for that asset in terms of timing, etcetera? Jim Grech: Yeah, Chris. That is encouraging news to hear that you just mentioned about what Anglo stated. You know, we are really not in a good position to start putting out estimates of when we will open that mine back up and the costs to do that until we get ownership of it and can really see the conditions firsthand. So I will say that, you know, we do have optimism that we will be able to do that based on what we have been able to do with the Centurion mine. The experience we have, and the work we have with the regulators certainly are well-positioned to bring that mine back online, but we are not going to start giving out estimates on timeline or cost or anything. It is just a little too early for us because we just do not have enough information to do that yet. Chris LaFemina: Understood. Thank you, and good luck. Jim Grech: Thank you. Operator: Next question is a follow-up from Nick Giles. Please go ahead. Nick Giles: Thank you very much, operator. Mark, maybe in response to your earlier comments, you outperformed my model pretty meaningfully in the PRB, so I am sure Lucas took notice of that. But wanted to come back to Shoal Creek. It seems like production was stronger there, but wanted to get your take on kind of where realizations are today and maybe bigger picture, where does this asset fit in your portfolio longer term, and could a sale of the asset be an additional lever you could pull in the case of permanent financing? Mark Spurbeck: I will start, and then maybe Malcolm can talk about realizations a bit more. But, yeah, Shoal Creek is really operating extremely well. You know, did a great year. We expect even better things in 2025, as I noted earlier. So operationally, it is hitting on all cylinders, doing absolutely everything that we anticipated they would do with the new longwall kit. You know, realizations have been a bit of a challenge, but maybe, Malcolm, you want to add a little color to that? Malcolm Roberts: Look. Sure. Last call, I did give a sort of a breakdown as to where those Asian realizations are. And, obviously, with Europe not as strong for us at the moment, you know, a lot of our returns are coming from Asia. And at the moment, you know, to be honest, you are talking an FOB return on a short-term basis of somewhere between $120 and $130 for that grade of product. That is where the price point is if you are selling into Asia. Nick Giles: Appreciate the color. Best of luck. Jim Grech: Thank you. Operator: The next question is from Matt Warder with The CoalTrader.com. Please go ahead. Matt Warder: Hey, guys. Hope all is well over there. I actually had a follow-up question to Nick, who basically stole most of my thunder there. The realizations for Shoal Creek, is that basically just getting whacked due to the freight differential over to Asia? Is that the culprit there? Malcolm Roberts: Yeah. Matt, Lucas, there are two things. You know, if you look at the top CSR coal, highest CSR coal, we are talking about those being at around $180 FOB in Australia. And now when we talk about closer to 60 CSR top coals, which Shoal Creek is, their returns are about $150 FOB metric. Then you have to take a freight differential off that and convert it to short tons, and that is how I get to my $120 to $130. Matt Warder: Okay. That is all good. Also, with regard to the guidance, how are you guys looking at semi-soft and PCI realizations in 2025 this year? Any color on that would be really helpful. Malcolm Roberts: Yeah. So within the existing Peabody Energy Corporation portfolio, we do not really sell into the semi-soft market. But what I can, and I would like to talk about the semi-soft market because, you know, that market is quite long at the moment, particularly out of Newcastle. So, you know, it has been a swing to Quentin semi-softs. And so that is part of what is happening with Newcastle returns. So there is a lot of that what used to be that lower semi-soft product now coming back into thermal. We think about Newcastle Thermal, that is the challenge there. So, yeah, semi-soft is quite challenged. In Europe, there have been in Poland, there have been a couple of outages, which we have seen some semi-soft demand come out of there, but really, semi-soft is quite weak. But when it comes to PCI, there are two types of PCI. There is low vol PCI, high-quality PCI coming from mines such as Coppabella and Morinby North. And then there are byproduct PCIs, which tend to be higher in volatile matter. So when you come to that premium low vol category, we see that as really quite short and challenged and the like. And, you know, we probably see the relative price point at over 80% for that coal at the moment relative to prime low vol hot coking coal. Matt Warder: Gotcha. That is pretty helpful. If I can switch gears for a second, I think it was Jim had a comment about receiving inbounds from PE firms about base load power for data centers. Is that something you guys are pursuing at all at this point? I know it was a kind of a discussion point with Thomas for a while there. Is that just wondered how you guys are thinking about that at this point in time. Jim Grech: Well, Matt, first off, welcome to our earnings call. We appreciate the interest and the questions from yourself. Thank you for that. Secondly, you know, we are getting inbounds from companies that are trying to figure out how to serve this growing electrical load demands and do it reliably. And so people are looking at coal plants, and then if they are looking at coal plants, they want to know that it has long-term supply to those coal plants. So with the long life and low-cost reserves, we are, people naturally come to us and ask us if there is anything that we can work together, things that we would do, would we supply that, would we participate in that? So we are getting those inbounds. It has certainly picked up with the Trump administration and their favorable stance towards coal. I would not say there is anything imminent or, you know, breaking on that, but, you know, from a few months ago where we had none of that type of interest coming in or almost none, it has been noticeably increased here in the recent, you know, month or two. Matt Warder: Oh, that is interesting. I mean, I think that is something that the whole industry could take advantage of going forward. I did have one last sort of question which pertains to the Anglo assets, specifically their CapEx. If I recall correctly from the presentation, I think you are targeting a couple hundred million per year in CapEx for the first two or three years, and then it goes to a maintenance CapEx level of, like, $150, like, $13 per clean ton. Am I thinking about that right? And if so, what is the elevated level in the first couple of years? What was that being put toward? Mark Spurbeck: Matt, you got that exactly right. Those are the numbers we have used. Really, the initial couple of years being higher is really due to some of the objectives we have to get that production levels up to what we forecasted. There is a new longwall, obviously, Morinby North, which is a big part in 2026. We also talked about some fleet enhancements at Cap Collins and etcetera. So there is a handful of things getting both the north and south district going to Morinby North, walk on, walk off capabilities, that kind of stuff. And there is for those types of things, and then we do see that leveling out to about $150 on an average basis going forward for, you know, I think we looked at it in the model probably for the next ten years on a sustainable basis. Matt Warder: Okay. That is great. I think that is all I have here right now, but I will turn it back over. Thanks a lot for the call. Jim Grech: You bet, Matt. Thank you. Operator: This concludes our question and answer session. I would like to turn the conference back over to Jim Grech for any closing remarks. Jim Grech: Thank you, operator, and thank you all for the time today. I would also like to express my gratitude to the Peabody Energy Corporation team for the many excellent accomplishments we had in 2024, and we are planning a highly productive next several months. So we look forward to keeping everyone apprised of our progress. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Good day, and welcome to the Peabody Energy Third Quarter 2024 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Karla Kimrey, Vice President, Investor Relations and Communications. Please go ahead. Karla Kimrey: Good morning, and thanks for joining Peabody's earnings call for the third quarter of 2024. With me today are President and CEO, Jim Grech; CFO, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. Jim Grech: Thanks, Karla, and good morning, everyone. Thank you for taking the time to join us today and for your interest in Peabody. In the third quarter, Peabody achieved solid performance across all segments, with notable results in both the seaborne thermal and U.S. thermal segments. We completed $100 million in share repurchases during the quarter, leaving our total repurchases for the year to $180 million. This is a reflection of our continued commitment to returning value to our shareholders. Earlier this month, I hope you were able to participate in our Centurion presentation. If not, I encourage you to view it on our website. At Centurion, we continue to make significant progress towards starting the longwall production in the first quarter of 2026. Thus far, we have produced first development coal and commissioned 2 continuous mining units. The prep plant washed its first coal in September, and we have scheduled our first customer shipment for the fourth quarter. As Centurion continues to exceed budgeted development rates, we've had to accelerate the CapEx spend roughly $30 million as a result of the rapid pace of development. Now moving on to our operating segments. Overall, our third quarter operational results aligned with our forecast, and our mines continue to perform safely. Seaborne thermal demand continues to grow, and pricing remains stable. We shipped higher-than-expected export volumes on strong production from Wilpinjong. As part of our ongoing commitment to maximizing value from our portfolio, we have reevaluated the time line to closure for the Wambo underground mine. While initially expecting to run until mid-2026, we have determined that it makes better financial sense to bring forward the mine's closure to mid-2025 due to some challenging geological conditions. In 2025, the Wambo underground mine is expected to produce approximately 800,000 tonnes, which is nearly 400,000 tonnes less than in 2024. In our seaborne metallurgical side, we made the opportunistic decision to withhold nearly 90,000 tonnes of shipments at Shoal Creek during the period -- during a; period of challenging logistics and weak spot prices in the third quarter. The Black Warrior River, which has been closed for unscheduled repairs, is now operational. Spot prices have improved, and we expect shipments of Shoal Creek coal to substantially improve in the fourth quarter. The PRB experienced a slow start due to low natural gas prices, but volumes picked up in the third quarter. Shipments exceeded expectations due to higher-than-anticipated customer nominations and improved rail performance. Operationally, our PRB mines continued their effective cost management on material, repairs and labor spend. Other U.S. thermal shipments and costs were in line with expectations, despite low customer nominations. At our Twentymile mine, we will temporarily see lower yield and productivity as the mine has been experiencing some geological challenges, but we anticipate returning to normal operating conditions in the first quarter of 2025. Overall, we are very proud of our operations performance this quarter. Now I'll turn it over to Malcolm Roberts, our Chief Marketing Officer, who will be delivering our outlook on the markets today. Malcolm? Malcolm Roberts: Thank you, Jim. Seaborne thermal processing remained resilient during the quarter. Demand for thermal coal continues to grow, and this growth is Asia centric. In Australia, the Newcastle high-energy thermal market experienced strong restocking demand from the Asia Pacific region to support spot pricing throughout the quarter, pricing averaging $140 per metric tonne. And thermal coal imports in Asia increased year-on-year, with India leading at 12% growth, followed by China at 8% and North Asia at 2%. Earlier this month, the International Energy Agency published its annual World Energy Outlook, a comprehensive review of the likely parts of supply and demand for fossil fuels and renewable sources of energy. Within this context, the agency estimate -- estimates that coal consumption in 2030 will now be 6% higher than their 2023 forecast. To put this into perspective, the 2024 increase on forecast demand is comparable to the total coal consumption of Japan. Within the seaborne metallurgical coal market, premium hard coking coal fell to $180 per tonne in early September for the first time since June 2021. Weak steel demand was the key driver. The global steel market presents thin profit margins as steel exports from China accelerated. These elevated levels of steel export weighed on steel makers globally. Met coal demand was stifled by production cuts at blast furnaces around the world, redirecting term contract cargoes into the spot market. India was unable to absorb this extra spot volume, which has meant that China has resumed its position as the clearing market for spot cargoes. During late September, China announced stimulus measures improving sentiment. Market anticipation of improved demand and lower Chinese steel exports strengthened steel pricing, encouraging steelmakers to ramp up production. This has had a direct impact on steelmaking raw materials, such as metallurgical coal. And as a result, pricing has shown some recent improvement. Overall, the market for metallurgical coal remains finely balanced and exposed to volatility, influenced by the rate of exports from Australia and economic performance in China. In the United States, electricity generation continues to grow, with the grid load increasing by 3% from 2023 levels on a year-to-date basis. Total South PRB coal production volume increased by 33% during the quarter compared to quarter 2, with a total production volume of 51.2 million tonnes. Peabody's South PRB share of total production in Q3 was 43% compared to 38% for the same quarter last year. Generally, the current market dynamic continues to be challenged by comparatively low gas -- natural gas prices. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thanks, Malcolm. It's nice to be here with everyone this morning. In the third quarter, Peabody recorded net income attributable to common stockholders of $101.3 million or $0.74 per diluted share and adjusted EBITDA of $224.8 million. Operating cash flow of $360 million reflects a favorable reduction in working capital, resulting in available free cash flow of $263.2 million for the quarter. During the quarter, we completed the previously announced $100 million share buyback, repurchasing nearly 4.5 million shares at an average price of $22.55 per share. At September 30, we had $773 million of cash and today declared another $0.075 per share dividend. Turning to the segment results. Seaborne thermal recorded $120 million in adjusted EBITDA, $16 million better than the prior quarter. Both Wilpinjong and Wambo increased production and reported lower costs quarter-over-quarter, resulting in segment cost below guidance at $47 per tonne. Together with a $7 increase in realized export prices, segment EBITDA margin increased to 38%. Production exceeded sales by 300,000 tonnes, increasing previously expected fourth quarter sales volumes. The seaborne metallurgical segment generated approximately $28 million in adjusted EBITDA. As Malcolm mentioned, benchmark coal prices fell to their lowest point since 2021, and there was a particularly weak market for spot sales. Shoal Creek shipped only 125,000 tonnes in the quarter as we opportunistically limited spot sales and avoided higher transportation cost due to whole Black outage. Metro had an outstanding quarter and made up for the lower sales volumes at Shoal Creek, keeping the segment in line with previous guidance at 1.7 million tonnes. With the whole Black outage resolved, we expect higher production in sales from Shoal Creek this quarter as reflected in fourth quarter guidance. The U.S. thermal lines produced $80 million of adjusted EBITDA in the quarter, $27 million better than the second quarter. U.S. thermal operations shipped 26.1 million tonnes and realized an average EBITDA margin of $3.07 per tonne. Through the first 3 quarters of the year, the U.S. thermal operations have generated $196 million of EBITDA, while only requiring $32.3 million of maintenance capital. The PRB shipped a better-than-anticipated 22.1 million tonnes. The segment reported $51.7 million of adjusted EBITDA, as all 3 of the mines did an outstanding job managing costs for another quarter. EBITDA margins more than doubled from the second quarter to $2.34 per tonne. The other U.S. thermal coal mines generated $28 million in adjusted EBITDA. Shipments and costs, all in line with expectations. Looking ahead to the remainder of the year, we are making a couple of tweaks to full year guidance. Seaborne thermal volumes are now expected to be 200,000 tonnes higher at 16.2 million tonnes and other U.S. thermal costs are up $2 to $45 per tonne. We've added $50 million into capital for 2024, primarily to reflect accelerated development at Centurion as well as timing of spend at Wambo. For the fourth quarter, seaborne thermal operations expect another steady quarter with volumes of 4.1 million tonnes, including 2.5 million export tonnes. 400,000 tonnes are priced at approximately $120, while 800,000 tonnes of Newcastle product and 1.3 million tonnes of high ash product remain unpriced. Costs are projected to be between $48 and $53 per tonne. Seaborne metallurgical volumes are forecasted at 2.3 million tonnes, a substantial increase from the first 3 quarters of the year. The Black outage, which impacted Shoal Creek have been resolved, and we also expect our first shipment of development coal from Centurion. Segment costs are anticipated to improve to $120 to $125 per tonne. PRB shipments are expected to be 21.2 million tonnes at an average realized price of $13.50. We've continued focus on cost discipline. Costs are forecasted at $11.50 to $12 per tonne, continuing to improve on full year average costs. Other U.S. thermal shipments are expected to remain steady at 3.9 million tonnes. Average realized prices are anticipated to be $52.40 with costs at $46 per tonne. In summary, we completed the repurchase of another 4.5 million shares, generated over $260 million in available free cash flow, are set up for an even stronger operational fourth quarter, and we continue to make excellent progress in developing Centurion, soon to be a cornerstone metallurgical coal asset and Peabody's global coal portfolio. Operator, I'd now like to turn the call over for questions. Operator: [Operator Instructions] And the first question comes from Lucas Pipes with B. Riley Securities. Lucas Pipes: My first question is on the surety side. And I wondered if you could remind us what the bonding obligations are today with the surety providers underwrite off that obligation and how that might evolve over the next couple of years and to what extent additional capital might be unlocked there. Mark Spurbeck: Lucas, it's Mark. Couple of things or thoughts on the sureties. Nothing has really changed from what I've said previously. We don't expect the bonding requirements to change significantly nor the level of collateral against it. I will remind you, we did get about $110 million in bond reductions early first half of the year and also got some of that collateral back. But that's kind of our run rate right now. And outside of any changes in laws or changes in our footprint, we wouldn't expect to see anything substantially different. Lucas Pipes: Got it. I appreciate that. On the met coal cost side, things -- costs have been trending a little bit more towards the higher end of guidance. And I wonder to what extent one-offs like the lock on the Warrior River contributed to that development. And so as we look out to 2025, is the Q4 guidance maybe more indicative? Or are there other moving pieces to keep in mind? Mark Spurbeck: Yes. A couple of thoughts, Lucas. One, we're not providing '25 guidance yet, just to be clear, so I won't speak to that. I do think we've been toward the higher end of our guidance for the segment as a whole. I think in fourth quarter, you'll see that Metrop's production is going to come down a little bit after it's a really incredible third quarter. Shoal Creek production is going to be going up. Net-net, there's going to be some additional production, and you're going to see a modest decrease in those costs quarter-over-quarter. But for the full year, we'll probably come in towards the -- maybe a little bit toward the -- above the midpoint on cost guidance for the segment. Lucas Pipes: I want to quickly touch on capital returns and capital allocation. A lot of your peers have taken a step back from buybacks given the softer met coal price environment today. You had a strong free cash flow quarter in Q3. You pointed to a solid operational outlook for Q4. So should we anticipate a continued activity on the buyback front? Or does this market environment have an impact on how you approach capital returns? Mark Spurbeck: Sure, Lucas. First, you’re right. We completed that $100 million share repurchase in the quarter. I mentioned last quarter, if opportunistically we saw an attractive price point, we could maybe accelerate that buyback based on the favorable outlook for the second half. We were able to accomplish that, getting almost 4.5 million shares bought back at an average price of $22.55. So really pleased with the third quarter performance. Looking out the last quarter, we talked about the $200 million, $300 million of free cash flow in the second half of the year and really had a tremendous third quarter, achieved all of that in the third quarter. That was helped with working capital, as I mentioned in the prepared remarks. The Shoal Creek insurance recovery collection as well as the reduction in receivables really boosted that. Going forward, we’re committed to the 65% to 100% of free cash flow. Nothing has changed there. We’ll continue to look at it. We’ll see where fourth quarter comes in with realized pricing. If you look at year-to-date, we’re probably about $100 million ahead year-to-date, and that was really an acceleration from the third quarter. But stay tuned, and we’ll take a look at it in the fourth quarter, knowing that our program does have the flexibility to step out in front of it if we see an opportunity to do so. Operator: The next question comes from Katja Jancic with BMO Capital Markets. Katja Jancic: Maybe starting on the Wambo shutdown next year. Am I understanding this correctly? So the volume next year on the seaborne thermal is going to be down 400,000 tonnes. Jim Grech: So we -- Katja, Jim Grech here. We haven't given guidance for next year on the tonnages, but we're saying year-over-year in total for Wambo underground itself, the -- typically, it's running about 1.2 million tonnes a year. And next year, with the acceleration of the closure, that mine will be at 800,000 tonnes. Katja Jancic: And can you remind me, is that -- that's Newcastle grade, correct? Jim Grech: Correct, yes. Katja Jancic: So there could be a negative mix shift a bit next year as well. Jim Grech: That's possible, yes. Katja Jancic: Okay. And then maybe on the Shoal Creek. So I think you mentioned 120,000 tonnes were shipped in 3Q, and there should be a meaningful -- a material increase in 4Q. Can you provide a little more color on how much you expected to ship in 4Q? Malcolm Roberts: Yes. It will be around 600,000 to 700,000 tonnes. Katja Jancic: And in which -- or which markets are you targeting? Malcolm Roberts: Well, there's going to be a component of spot in there. And as I said in my remarks, the clearing market for spot is China or Southeast Asia right now. Katja Jancic: And it's -- because spot market, if we look at the high-vol A pricing, it hasn't really improved that much. So it's still pretty subdued. Is -- do you still see value in selling into the spot market at these prices? Malcolm Roberts: Well, look, there’s the high-vol A market, which is the FOB market. And then there is the CFR market. And look, when I gave the part of the Centurion presentation, I spoke about where all the growth is in Asia, and that’s where the tonnes need to go. So if you have a look at September, when you look at Asian pricing, as I said, we’re down to $180 FOB Australia. And as we sit here today, it recovers to $204. But if you’re selling high-vol into Asia, you have to sell on – really, on a CFR basis. So what that means is cost and FOB, plus freight. And so I could probably give you a work example here to help you sort of get your ideas around that. At the moment, PLV is quoted as delivered in China. That’s Australia – from Australia with freight at $215 a tonne. And then if you look at – generally look at normal high-vol coals, they could probably achieve somewhere between 80% and 90% of that price delivered. So if you do that math, you come to a number, let’s call it, $183. And then you take freight off that, and that’s the freight from the U.S.A. to China. And that would tell you that today, FOB price for a midrange high-vol A coal is around $143 a tonne. Does it make sense? As I said in my remarks, that is where the demand is. So if you want to keep going, that’s the level, and that’s where you need to go. Operator: The next question comes from Nathan Martin with the Benchmark Company. Nathan Martin: Congrats on the third quarter results. I'm going to start on the CapEx front, Mark. You guys called out $50 million CapEx increase for full year '24. It looks like $10 million of that was sustaining. So maybe first, what's the driver there? And then the other $40 million growth, is that all Centurion? How does that accelerated spend at Centurion maybe impact the time line going forward? Mark Spurbeck: Yes, you got your math right there, Nate. The $10 million is probably sustaining. That mostly is component capital. So componentized items on the equipment fleet that, really, it's maintenance, but just based on the dollar value and the life we capitalize at as capital. If you add that $10 million to sustaining, that will probably put us towards the top end of our annual range of $150 million, maybe a little bit below, but closer to that $150 million now. Of the growth, $30 million of that is Centurion. Maybe some of -- the other $10 million is some of the Wambo open cut and really pulling that forward from next year into this year. Again, that's for equipment. At Centurion, continuing -- the development rates continue to exceed expectations, doing really well. Part of that is continuing that and getting another mine or kind of a rental or a higher continuous miner in there to keep those development rates going up. They continue to exceed expectations, as I mentioned, but too early to tell or commit to any sort of accelerated time line and bringing that longwall into production. Nathan Martin: Okay. Perfect, Mark. Appreciate those thoughts. With the Wambo open-cut capital being spent there, is there an expectation that tonnage from the open cut will offset some of the underground tonnage that's expected to fall off last -- excuse me, next year? Mark Spurbeck: Yes. I do think that next year, we're going to see a little bit better production and more production out of the open cut at Wambo. Again, this spend was kind of orchestrated to get that fully ramped up, and we're close there. But we should see year-over-year increases in production. And that will help offset some of the lower underground productions, as Jim mentioned. Nathan Martin: Okay. Got it. Off to what kind of base this year is the expectation to be? Mark Spurbeck: I'm sorry, I didn't quite catch that, Nate. Nathan Martin: The Wambo open cut base level of production you're expecting this year, you said next year, hopefully, it would increase year-over-year. So what kind of base are we looking at for '24? Mark Spurbeck: I don't know. We're probably 3 million tonnes and going up from there. Maybe we'll see a 10% increase. Nathan Martin: Okay. Perfect. And then maybe shifting over to Shoal Creek, specifically on the whole lock. I appreciate your comments there. What I heard was the fix in place is probably more temporary and not long term. Is that correct? And if so, do you guys expect any impact or future impact to Shoal Creek sales if and when more work needs to be done there? Jim Grech: Nate, there is -- as you said, the repairs are temporary, but we're coordinating with the Army Corps of Engineers. We're not expecting as they do the work to make the permanent repairs to really impact the shipments. They're going to time the work and work with the transporters on the river to minimize or have anything that's even negligible impacts on the shipments in the future. So that's our expectation to not have any negative impacts as these repairs are done in the future. Nathan Martin: Okay, Jim. That's good to hear. And then maybe just finally on Centurion. Congrats again on getting initial coal there and washed. As you said, it looks like first coal sales here in the fourth quarter. How should we think about the sale of those development tonnes between now and when the longwall starts up as in potential volumes, costs, et cetera? Malcolm Roberts: So I would have said that next year, we'd sell probably up around 480,000 tonnes in 2025. That's not guidance, that's what I'd estimate. And at that level, that would probably equate to say 6 shipments, so maybe shipment every 2 months, something like that. Nathan Martin: Okay, Malcolm. And would that tonnage flow through the normal P&L? Would that be reflected in seaborne met shipments? Malcolm Roberts: Yes, it’ll be recognized as revenue – to the revenue account. Operator: And the next question comes from Chris LaFemina with Jefferies. Chris LaFemina: So just quickly on Wambo, and I apologize if you got to this earlier, I just -- I hopped on the call late. But what was the EBITDA contribution in the third quarter from Wambo? Mark Spurbeck: Chris, I don't have it in front of me between the 2 and 3 underground mines or thermal mines. Just look at... Chris LaFemina: Is there a ballpark number you can give us on that? Or no? Mark Spurbeck: No. Chris LaFemina: Okay. Secondly, just in terms of capital allocation, you guys obviously have a very strong balance sheet. You're generating cash flow. Good to see the buyback in the quarter. There's also obviously some coal asset sales that are being considered in the market today. And I'm wondering how you think about just M&A in general. And should we look at the $100 million buyback in the quarter as a signal that maybe you're not looking at aggressive M&A opportunities? Or is it kind of -- you want to keep those options open if something very compelling arises, you would like to get involved? Jim Grech: Yes. Chris, Jim here. And as is with our past practice, we don’t make any comments on M&A activity. So I’m just going to leave it at that. Thank you. Operator: [Operator Instructions] Our next question comes from again Lucas Pipes with B. Riley Securities. Lucas Pipes: Jim, with the election next week, I wanted to ask how much of a priority it is to reopen the PRB for leases. I understand it's not a priority today in terms of your capital outlays, but with stronger power demand growth, advancements in CCS, for example, maybe one day it will make sense again. So how would you engage with the new administration on this topic? Jim Grech: Well, Lucas, I'm going to speak from a Peabody perspective, not an industry-wide perspective, but we have leases and reserves in place for many decades to come. So our position there as far as lease holdings and reserve holdings is very, very strong. So if the demand does increase significantly above our projections, we can lean into that very easily with the reserve base that we have. There is nothing more that we need to do with that. Lucas Pipes: In terms of long-term optionality. Jim Grech: Well, if you're talking about optionality over the long term about optionality being to increase tonnage levels, we have that secured already with the lease holdings that we have, if that's what you meant by optionality. We can increase the output in the PRB if the demand and, obviously, the economics are there with the lease holdings we have for decades to come still. Mark Spurbeck: Yes. Lucas, we got, I think, 1.5 billion tonnes in front of us under lease. So lease is not an issue for us for decades. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks. Jim Grech: Well, in closing, I’d like to thank our dedicated team for their hard work and focus on our first value safety. We’re very pleased that 2 of our operations, Shoal Creek and Segundo received the prestigious Sentinels of Safety Award from the National Mining Association for their outstanding safety performance. Additionally, our Metropolitan and Wilpinjong mines were recognized for their outstanding safety achievements at the New South Wales Mining Health, Safety and Community awards. Additionally, I’d like to thank our shareholders, customers, vendors for their continued support. We remain focused on delivering value through operational excellence and the successful execution of our strategic priorities. So operator, that concludes our call. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Good day, and welcome to the Peabody Second Quarter 2024 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Karla Kimrey, VP, Investor Relations. Please go ahead. Karla Kimrey: Good morning, and thank you for joining Peabody's call for the second quarter of 2024. With me today are President and CEO, Jim Grech; CFO, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. Now I'll turn the call over to Jim. Jim Grech: Thanks, Karla, and good morning, everyone. Thank you for taking the time to join us today and for your interest in Peabody. I am pleased to report the second quarter results came in as forecasted, and we have a confident outlook for the second half of 2024. More importantly, to date, Peabody is having a remarkable year with safety, our number one value as five of our mines have had zero reportable injuries. Peabody is committed to increasing shareholder value through a balanced approach of maximizing shareholder returns and investing in organic metallurgical coal growth at Centurion. Our resilient balance sheet allows us to be flexible and dynamic in the prevailing market conditions. As a result, and in accordance with our shareholder return policy and favorable outlook for the remainder of the year, we have committed an additional $100 million for opportunistic share repurchases. Centurion, our world-class hard coking coal growth project is going very well. The initial underground development rates are exceeding expectations. We are able to mine our first development coal in June, and in July, we commissioned our second continuous miner. We are on budget and expect to ship coal from this mine to customers in the fourth quarter and are on target for longwall coal in the first quarter of 2026. With the recent acquisition of the Wards Well deposit, we have extended the mine life to over 25 years with an average annual production of approximately 4.7 million tons. This quality of coal is an established cornerstone of coking coal blends highlighting the potential for sustainable financial returns and is a unique opportunity to re-weight Peabody's earnings to Seaborne met. Now moving on to our operating segments. Overall, second quarter operational results came in as forecasted and our mines performed safely. The Seaborne Thermal Segment performed to expectations. Our Wilpinjong mine continued to operate well with improved equipment availability and truck utilization. As Malcolm address, the Asian thermal market continues to see demand growth for our Wilpinjong product and as such we have increased volume expectations for the remainder of 2024. The Seaborne met segment also came in as forecasted. Our volumes, costs and realized prices were as expected. Australia did experience some significant rain in the last week of the quarter and some shipments out of the CMJV were delayed. Additionally, CMJV will be mining through challenging geotechnical conditions, which is reflected in our reduced full year guidance. The Demopolis Lock in Alabama was opened ahead of schedule in mid-May. While we were pleased with the U.S. Army Corps of Engineers bringing to the Demopolis Lock online earlier than expected, unfortunately, another lock, the Holt Lock, was determined to be unstable on June 22. The Corp. is planning to install a bulkhead as a temporary fix by the end of September to early October, which can open the lock intermittently to allow traffic to pass until a permanent fix is achieved. As we did while the Demopolis lock was down, we will continue to utilize alternative rail transportation at Shoal Creek and slightly reduced volumes reflected in the full year guidance. I want to thank our rail and other logistics providers for their continued partnership and support. And the PRB shipments were slightly higher than expectations as we came out of the shoulder season. The segment had strong cash performance with a continued emphasis on operational efficiency, resulting in improved margins. While we expect a stronger second half of the year, we felt it was prudent to reduce full year guidance as customer inventories remain high, along with depressed natural gas prices. Other U.S. thermal costs and revenues were in line with expectations. Shipments were slightly less than expected and up 16% as we began delivering against new contracts originated during the first quarter. In total, for the U.S. thermal markets, we saw nominations and volumes increase as the quarter moved on. We continue to see this in July also. Malcolm Roberts, our Chief Marketing Officer, will be delivering our outlook on the markets today. Malcom? Malcolm Roberts: Thanks, Jim. Seaborne thermal coal continue to range trade for the quarter. In Australia, the Newcastle high-energy thermal market is best described as balanced. The United States imposed further economic sanctions on Russia, resulting in some bias reducing Russian coal purchases. Improved Newcastle demand was met with higherrates of production and the Newcastle high energy thermal coal spot price averaged $136 per metric ton during the second quarter. Asian thermal coal imports have grown this year with China continuing to show increases in electricity demand supporting seaborne thermal coal imports, coupled with strong demand growth in Vietnam. Both China and Vietnam have recorded strong year-to-date increases in imports of approximately 15% and 37%, respectively. Within the Seaborne Metallurgical coal market, premium hard coking coal prices during the quarter averaged $242 per metric ton. Parts of the global steel market reported tepid demand and thin profit margins during the quarter subduing demand growth for metallurgical coal. In India, steel production was disrupted due to election activities and the onset of monsoon season while China steel production was mixed with the historically weak market dragging on demand, partially offset by economic stimulus targeted in the real estate sector. Coking coal prices find periodic support during the quarter because of supply side disruptions, including rail and port maintenance containing exports in Queensland restricted USA exports from Baltimore and historically low production in China. The June incident at a major hard coking coal mine in Queensland is expected to constrain premium hard coking coal supply in future quarters. Despite these supply side constraints, coking coal supply proved sufficient to meet demand during the second quarter. In the PCI segment, prices improved during the quarter, supported by constrained supply and some buyers switching to Australian supply in place of Russia. The spot price of PCI increased 23% during the quarter to finish the quarter at $182 per metric ton, a 78% relativity to premium hard coking coal. Overall, the metallurgical coal market remains finally balanced exposed to volatility influenced by the rate of exports from Australia and economic performance in China, India and elsewhere. In the United States, during the six months ended June 30, electricity generation from thermal coal has increased slightly year-over-year, driven by an overall increase in electricity demand. This is despite low natural gas prices and stronger renewable generation. The EIA in its July update to the short-term energy outlook forecast an increase in the use of coal to generate electricity this year, leading to a 12% reduction in inventories by year-end. I'll now turn over to Mark to cover the financial details. Mark Spurbeck: Thanks, Malcolm, and good morning, everyone. In the second quarter, we recorded net income attributable to common stockholders of $199.4 million, or $1.42 per diluted share, and adjusted EBITDA of $309.7 million. During the quarter, we reached an insurance settlement for $109.5 million. We included $80.8 million of the settlement in adjusted EBITDA while the remaining $28.7 million was recorded as the recovery of property and underground development that was previously a written off. This element covers all property and business interruption losses suffered at Shoal Creek last year. We received a $5.6 million advance payment in the second quarter and will receive the remaining $103.9 million this quarter. At June 30, we had $622 million of cash after acquiring Wards Well and making $113 million of income tax payments, which were both noted on our last call. During the quarter, we paid a $0.075 per share cash dividend and for the first quarter since restarting the shareholder return program we didn't repurchase shares. However, with a strong operational recovery in the second quarter and a favorable free cash flow forecast in the second half of the year, today we announced an additional $100 million available for share buybacks. And for the sixth quarter in a row, declared a $0.075 per share dividend. Turning now to second quarter segment results. Seaborne Thermal recorded $104 million in adjusted EBITDA, $10 million better than the prior quarter on much improved production from the Wambo complex, resulting an additional Newcastle quality export tons. The segment's adjusted EBITDA margin of 34% was better than the previous quarter as higher realized prices more than offset the increase in costs from a higher mix of Wambo production. The Seaborne Met segment generated $144 million of adjusted EBITDA, including the insurance settlement, or $63 million related to second quarter production, a 30% increase compared to first quarter's $48 million result in an apples-to-apples comparison. Each mine in the segment increased shipments quarter-over-quarter. And as noted earlier, we expect to collect over $100 million of cash at Shoal Creek in the third quarter. The U.S. thermal mines produced $53 million of adjusted EBITDA. The PRB shipped 15.8 million tons below first quarter's volume is expected due to the traditional second quarter shoulder season. The segment reported $17.8 million of adjusted EBITDA as the mines did an outstanding job managing costs, which despite significantly lower tons kept average unit costs flat and increased margin approximately 30% from first quarter levels to $1.13 per ton. The Other U.S. Thermal segment generated $35 million in adjusted EBITDA. Shipments increased 450,000 tons from the first quarter and we are expecting even stronger shipments in both the third and fourth quarters. Our U.S. thermal platform continues to demonstrate strong, positive margins and free cash flows. On a combined basis, the U.S. thermal operations shipped 19.5 million tons and realized an adjusted EBITDA margin of $2.73 per ton in the second quarter, after shipping 21.9 million tons and an adjusted EBITDA margin of $2.88 per ton, in the first quarter. For the first half of the year, our U.S. thermal mines have produced $116 million of adjusted EBITDA, while requiring only $17.7 million of capital. With the first half in the books, we expect robust free cash flow in the second half despite a couple of challenges. As Jim noted, we have adjusted full year guidance for three items. Seaborne thermal volume increased 500,000 tons as Wilpinjong continues to outperform expectations, particularly with the strong demand and price support for higher ash products. Seaborne net volume was reduced 600,000 tons due to the challenging geological conditions at the CMJV and the impact of two successive lock outages on the Black Warrior River at Shoal Creek. The combined volume impacts are expected to increase segment costs for the full year by $8 per ton. We lowered PRD volumes by five million tons as customer inventories remained high and natural gas prices remained stubbornly low. We have not negotiated deferrals on any of the 85 million price tons. And as we have done previously, we will manage customer volumes, while maintaining Peabody's value in all contracts. Taking a look at the third quarter, we expect another seaborne thermal order very consistent with the first two. Shipments are expected to be four million tons, including 2.5 million export tons. 600,000 tons are priced on average at $120.45, while one million tons of Newcastle product and 900,000 tons of high ash products are unpriced. Costs are anticipated to remain stable at $48 to $53 per ton. Seaborne Met shipments are expected to be 1.7 million tons at the midpoint of the first and second quarters. Lower tonnage from Q2 is due to a planned longwall move at Shoal Creek, and we should also see production and shipment levels rebalance at Metropolitan after shipments ran ahead of production by 200,000 tons in the second quarter. After the recent recovery in PCI prices, we expect to realize better prices relative to the benchmark and achieve 70% to 80% of the premium hard coking coal price. Costs are expected to be slightly better than the midpoint between the first and second quarters and land between $120 and $130 per ton. Following the traditional shoulder season and building on the momentum we experienced in the latter part of the second quarter, we expect PRB volume to increase nearly six million tons to 21.5 million in the third quarter. With higher shipments, we also expect to benefit from lower fixed cost per unit and are forecasting costs at $11.50 to $12.50 per ton, increasing margin quarter-over-quarter again to $1.75 per ton in the third quarter. Other U.S. Thermal shipments are also anticipated to be ahead of prior quarter at four million tons and costs are expected to remain flat at $44 to $48 per ton. In summary, we hit all operating targets in the second quarter, reached a key milestone by achieving first development coal at Centurion and negotiated a favorable settlement for last year's loss at Shoal Creek. The third quarter outlook is equally good. And today, we announced another $100 million available for share buybacks. Operator, I'd now like to turn the call over for questions. Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Lucas Pipes with B. Riley. Please go ahead. Lucas Pipes: Thank you very much, operator. Good morning, everyone. Jim, Mark, my first question is on the capital allocation side. You have a formula for capital returns, I think it's 65% of available free cash flow. And so two questions on the back of this. One, how should we think about the additional allocation of $100 million to buybacks? Is that you saying, look, with this price environment, we really just want to commit. So, maybe if cash flow is a little lower, you have the available cash to return it. So, you want to make that statement. I was just trying to understand it because presumably with the formula that additional allocation would technically not be necessary. So, I appreciate the context. And then bigger picture with capital allocation. There are some met coal assets for sale in Australia. I've heard of some opportunities in the U.S. market, too. How do you think about M&A more broadly? Or are you really just focused on your organic growth opportunities and returning capital to shareholders? Thank you very much for all your color. Jim, did I. Can you hear me? Jim Grech: Hi, Lucas. Good morning. Lucas Pipes: Good morning. Jim Grech: Lucas, I would like to comment some on your first question and turn it over to Mark, and then we'll come to your second question. So, on the first question I would like to just note that we say on our 65%, we say at least 65%. And we certainly have the optionality to go above that when we have the cash and we feel comfortable to do so. And so what we're doing here is a prime example of that and our commitment to be focused on increasing the shareholder value with the share buyback. But I think you have some more detail on that about the rest of the year. So Mark, I'll let you comment on that. Mark Spurbeck: Yes, good morning Lucas. Listen, with the continued development, it's ensuring, and I think $81 million year-to-date on that capital, probably $200 million since starting in the cash purchase award as well here in the second quarter. We always knew we wouldn't generate a lot of free cash flow in the first half of the year. But as Jim mentioned, our resilient balance sheet allows us to be opportunistic when market presents opportunities. I think our stock recently crossed a 50-day moving average and the 100-day moving average. As coal generally traded off with coal prices. So we see this as a really attractive point in time and an opportunity to further reduce our share count as we steadily march closer to Centurion coming online. As we noted even on our last call, our program is designed to be flexible and give us an opportunity to be opportunistic with the resilient balance sheet. As far as the remainder of the year, we do see good free cash flows in the second half. And depending on where prices shake out, we should continue to generate free cash flow in the second half and into next year. But to be clear, no change to the program. Jim Grech: Lucas in repose to your second I'm sorry, go ahead, Lucas. Any questions on your first – you have a follow-up. Lucas Pipes: No. Yes, that's – yes, exactly. I think you know what I wanted to follow-up on the M&A side. Jim Grech: Yes. So Lucas, I just want to stress that as a company, our focus is on creating shareholder value and the focus is on that right now. And with that, there is three or four areas that are at the forefront for that. One is maintaining our balance sheet strength and financial stability, which has taken us a long time to get to, and we're going to continue doing that. We're very focused on the share buybacks and maintaining our dividend. As Mark said, we've done the dividend seven quarters in a row, and we've just put another $100 million into the share buybacks. We are also very focused on our organic growth with the investment that we have in the Centurion mine and also just continuing investment in our operations, keeping reliable, and safe and predictable. That is the overwhelming focus. Assets come and go on the market and everything that's out there like with every coal company comes across our desk. But our focus is on maximizing shareholder value. And that's where the number one focus is, and that's where we're at. Assets come by. Certainly, every company takes a look at them. But right now, I think I said up on the points that we're very much focused on. Lucas Pipes: Very helpful. I appreciate that. I want to turn for my second question to kind of the operational outlook on the met coal side. First, the anticipated geological issues at CMJV, when did you first become aware of those issues? What exactly is the issue? And then how long do you think those could last, could this split into 2025? And then on the hold lock, if you could maybe elaborate on the mitigation efforts, the anticipated impact to 2024 volumes and any costs that might be associated with your mitigation efforts? And then from a numbers accounting perspective if there are additional costs with that be reflected in your met coal cost guidance or would it actually come out of your realizations that you guide to? So just a clarification on that, would appreciate it. Thank you very much. Jim Grech: Yes, Lucas. So first off, on the lock outage, as we said, we were expecting that bulkhead to be installed here towards the end of September. The stability is there on the lock, then the lock would then be expected as well to be opened back up for shipments, maybe not as efficiently as they would without the issue, but for those shipments to resume. We don't think the overall expense that we'll see is material between now and the end of the year. On the high side, may be an incremental $8 million to $10 million of expense if this goes through the end of the year and we keep shipments going. But that's – that would be the extent of it. And again, we're looking at ultimate trans. And that's the cost of alternate transportation and we have a couple of different routes we're looking at again to try to bring that expense down even further. So that would be the extent of the lock outage. As far as Coppabella, defaulting is standard that occurs in the coal seams there. We have it all the time. And what happened is we had more faulting than we anticipated. It's not uncommon to occur. We work through it, and we're working through the section right now that, again, had more than we anticipated, and we expect to get through that here through the end of the year. So again, there's nothing out of the ordinary with what's going on at Coppabella. There's always faulting. We've got a little bit more than anticipated, and we're just working through that right now. Lucas Pipes: That's helpful. On the $8 million to $10 million of potential costs with the hold lock, would that go through met coal unit costs? Or would it kind of come out of the realizations? Mark Spurbeck: Yes. Lucas, its Mark. That's all included in our segment costs. And it's included at 93%. Lucas Pipes: Excellent. I really appreciate all the color. And to the entire team continued best of luck. Thank you. Karla Kimrey: Thank you, Lucas. We can take the next question. Operator: The next question comes from Katja Jancic with BMO Capital Markets. Please go ahead. Katja Jancic: Hi, thank you for taking my questions. Maybe staying for a bit on the met segment. Can you provide a little more color on the 600,000 tons decline? How much of that reduction, how much of that is hold lock? Jim Grech: The majority of that is going to be with the CMJV. I think maybe about 100,000 tons of that may be with the approximate catch, about 100,000 tons is the whole lock and the other 500 or so is with the CMJV. Katja Jancic: And then maybe I think last quarter, the indication was that two-thirds of Shoal Creek will ship in the second half because of the Demopolis locked outage. So is there a difference between these two locks, how much of impact they can have? Jim Grech: We have the impacts of both of them. But again, in the overall impact because we've been looking at alternate transportation routes, it's all factored into the guidance we have and that's as I said, we think it's going to be about 100,000 tons reduction net after we do the ultimate logistics to the tonnages for Shoal Creek for the year. Katja Jancic: Okay. And then on the Centurion, can you remind us how much you expect to ship the development tons in 4Q? And how we should think about shipments going into next year? Mark Spurbeck: Yes. Look, definitely [ph]. Last time, I think we said around 100,000. Right now, we'd be saying probably 60,000 to 70,000 by the end of the year. Katja Jancic: And for next year? Mark Spurbeck: I'd call around 200,000 tons. Katja Jancic: Perfect. Thank you so much. Operator: The next question comes with Nathan Martin from The Benchmark Company. Please go ahead. Nathan Martin: Yes. Thanks operator. Good morning everyone. Congrats on the second quarter results, guys. Maybe just sticking with Centurion for a second. Could you just remind us, are there any permit or regulatory hurdles remaining before you get to the anticipated longwall start up in the first quarter of 2026. Jim Grech: No, Nate. We have all the permits and regulatory regulation hurdles passed. So what we're doing right now is we were focused on the development. And in the month of June, as we said in the comments, development went better than expected in the month of June, we actually developed about three times the amount of footage that we had anticipated getting the prep plant up and running right now and degassing the longwall section ahead of mining. Those are – if you're looking at the thing that we're focused on that we need to stay focused on to get us to mining, and those are really the issues ahead of us not really permitting or regulatory. Nathan Martin: Okay. Got it. Thanks, Jim. And then just related to the spend, I think you guys mentioned in the release, you spent about $200 million thus far of the expected $489 million. Mark, I think I caught you saying you spent about $81 million year-to-date versus that correct? Secondly, how much would that leave for the second half? And then how much of the remaining that $489 million would be spent in 2025 and 2026 at this point. Mark Spurbeck: Yes, that's right, Nate. We got about $81 million through the June 30. There's probably about $75 million more for the second half of the year. That would bring us up to about $275 million from the start of the project. We probably have about $165 million in 2025 and the remainder of $30 million, $40 million would be in 2026. Still on budget for the $489 million. Nathan Martin: Okay. Perfect. Thanks, Mark. And then maybe over to CMJV. I know Lucas asked a little bit about this. But I guess, maybe my question is – and I'll tie it into this other piece, too. I know you guys mentioned, I think it was you, Mark, as well that we now expect to achieve roughly 70% to 80% of the [indiscernible] benchmark net price versus 65% to 70% previously. I think I heard part of that with the increase in PCI prices likely driven by some of the Russian PCI full coming out of the market. But is there anything else that's driving that increase there? I was curious to CMJV, what kind of coal qualities are you mining right now that are going to be reduced? Is that helping your mix overall? Just it would be great to get any thoughts there. Jim Grech: Look, no I'll say that our mix is pretty constant, and our full year guidance has about 55% PCI sales incorporated within it. Mark Spurbeck: Yes. So most of that – most of that increase is the PCI price recovery relative to the benchmark. I think there is a slight increase in the mix with in semi-hard coming out of Moorvale to improve the mix as well. Nathan Martin: Okay. Great. Appreciate the time guys. Best of luck in the second half. Mark Spurbeck: Thanks, Nate. Jim Grech: Thanks, Nate. Operator: The next question comes from Lucas Pipes with B. Riley. Please go ahead. Lucas Pipes: Thank you very much operator. Thank you very much for taking my follow-up question. In the release this morning, you described Centurion as a 25-year opportunity at 4.7 million tons. And I remember February 26 presentation where you kind of break out Centurion volumes by year 2026, 3.7, 3.5, the year after, 4.5, 4.4, 3.4. So obviously below that the 4.7 million you cited this morning. Is the 4.7 million is that reflecting words well. And if I remember right, you were planning to update the market maybe on a more comprehensive mine plan update. So just wondering if that process has been completed, and if we should expect anything else. Thank you very much for your color. Mark Spurbeck: Lucas a couple of things. One, the – you're right; the presentation only showed the GM South or the North Goonyella proper area that we originally acquired. Those guidance, those tons, 3.7 million to 4 million tons for the first four years has not changed. The 4.7 million tons over the 25-year life takes into account the awards well area as well. Longer panels, more tons between longwall moves, we're going to get more production on an annual basis. But nothing's changed in those first few years. It just again, demonstrates the value of the awards well brings to this project. As far as an overall update, we are still doing that study, again, maximizing those volumes, figuring out costs and integrating that plan together. We do plan to come to the market here in the second half of the year and give a full update and maybe a presentation on a project on a stand-alone basis. Lucas Pipes: Really appreciate the clarification. Look forward to that. And again, best of luck. Mark Spurbeck: Thanks, Lucas. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks. Jim Grech: I'd like to thank everyone for joining our call today, and I'd especially like to thank our employees for their outstanding focus on safety in the first half of 2024. Also you at our Kayenta Mine and our North Antelope Rochelle Mine, they were both recognized for their outstanding reclamation efforts, and I really want to thank our employees for the work they've done on the reclamation at those mines to achieve those awards. I'd also like to thank our investors, customers and vendors for their continued support. Operator, that concludes our call. Operator: This concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

Operator: Good day, and welcome to the Peabody First Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Karla Kimrey. Please go ahead. Karla Kimrey: Good morning, and thanks for joining Peabody Energy call for the First Quarter of 2024. With me today are President and CEO, Jim Grech, CFO; Mark Spurbeck, and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. Now I'll turn the call over to Jim. Jim Grech: Thanks, Karla, and good morning, everyone. First quarter operational results were highlighted by a number of challenges and successes. There were unforeseen production challenges in Australia that are now behind us. While thermal coal shipments in the U.S. were impacted by unseasonably warm winter weather and low natural gas prices. Within our Seaborne Met segment, Shoal Creek continues to exceed production expectations, although shipments have been hampered by the failure of the Demopolis lock. We continue to strategically invest in our portfolio through the development of Centurion, and completed the acquisition of the adjacent Wards Well coal deposit, which extends the mine life to over 25 years. Before I expand on the markets, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Now turning to the global coal markets. Seaborne Thermal coal markets traded within a tighter range for the first quarter. The normal winter and low natural gas prices have continued to weigh on demand for thermal coal, coupled with a steady supply from the East Coast of Australia, resulting in Newcastle coal trading within a range of $120 to $135 per ton. Asian thermal coal imports are expected to remain robust, with China continuing to show increases in electricity demand with first quarter Seaborne Thermal coal imports estimated at a year-over-year increase of approximately 15%. Within the Seaborne Metallurgical coal market, coking coal prices declined during the quarter. Metallurgical coal demand was hampered by a thin steel margin globally, except for India, where robust economic output supported steelmaking profitability. PCI prices also were treated during the quarter. However, not to the extent of higher quality coking coals. During April, we have seen improving steel margins and seasonal restocking finding pricing support for metallurgical coal markets. In the United States, electricity generation for the first quarter of 2024 proved to be particularly challenging with a warm winter and significantly lower gas prices resulting in coal share electricity generation nationally declining to approximately 15% during the first quarter. With that said, coal continues to be a critical component to the country's energy generation, when looked at regionally in the US. As an example, coal power was relied upon and accounted for over 40% of generation in the MISO and SPP regions in various instances in January 2024 again, proving the importance of coal for a reliable grid. Now moving on to our operating segments. The Seaborne Thermal segments had higher volumes than anticipated, with additional warping on volumes going to the domestic market as a carryover from the train derailment on the mainline in December. Average realized prices and costs per ton were lower than anticipated due to higher production at Wilpinjong, where we opportunistically mined some [indiscernible] which we do when the market supports it. The higher production at Wilpinjong was offset by an extended longwall ramp-up at Wambo. Looking forward, we expect a higher proportion of Newcastle [spec coal] due to increased production from the Wambo complex. The Seaborne Met segment shipments were in line with expectations. Volumes are lower than ratable for the year due to an anticipated longwall move at Metropolitan and mine sequencing at the CMJV. Segment cost per ton were at the high end of our range, impacted by an unplanned Coppabella dragline outage and the acceleration of planned coal prep plant repairs at the CMJV, partially offset by higher production at Shoal Creek. Our sales mix was impacted due to mining some lower quality coal at CMJV due to mine sequencing. As we look forward to the full year, our sales mix should improve with additional sales in Shoal Creek through the anticipated opening of the Demopolis Block. In the PRB shipments were lower than expected as a result of an unseasonably warm winter and prompt natural gas prices that averaged $2.10. Segment cost per ton came in higher than expected due to lower volumes, but were somewhat offset by rationalization of discretionary cost spend. Although PRB demand for the quarter was challenged, we are contracted to 85 million tons for the year. Our full year guidance assumes a normal summer and fall with customers meeting our commitments. Our customers have different demands or needs. We will work with them to be responsive, while still retaining the full value of our contracts. In other U.S. thermal, shipments were below expectations as we had a few customers reduce their shipments due to high inventories and low natural gas pricing. Segment margins were higher than anticipated due to favorable sales realization, which included some sales contract cancellation settlements. Even with the current market conditions, our exceptional sales team was able to book some new business. So, our price volumes for the year did not change. Outside of our active operations, we continue to make progress at the Centurion mine, our key metallurgical coal growth projects. We've had some delays in the delivery dates of some mining equipment from the manufacturer, but expect development in coal to occur in the second quarter. As previously announced, we closed an Wards Well transaction last month. We're currently developing an integrated mine plan and we'll discuss it more fully in the future. The recruitment of the initial Centurion mine development workforce is complete even though labor remains tight in the mining industry in Australia. We continue to expect the first longwall coal in early 2026 and capital expenditures remain in line with previous guidance. We are pleased to announce that for the first time in nearly 12 years, we are mining at our Lee Ranch mine in New Mexico. In 2022, we secured a new long-term contract which extended the life of our New Mexico operation and supported the transition from El Segundo back to Lee Ranch. In summary, we have had some challenges this quarter. But as we look out to the full year, our operations and sales have us well-positioned. We completed two longwall moves in Australia, coal quality is improving, and our production plans give us confidence in reaffirming our full year guidance. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thanks Jim. In the first quarter, we recorded net income attributable to common stockholders of $40 million or $0.29 per diluted share and adjusted EBITDA of $161 million. Included in these results was an estimated $18 million non-cash remeasurement charge from the weaker Australian dollar. The company generated $120 million of operating cash flow and had $61 million of capital expenditures with more than half of it dedicated to Centurion. During the quarter, we continued to execute on our shareholder return program and repurchased 3.2 million shares or 3% of shares outstanding. Under the existing $1 billion share repurchase program, we have $570 million of remaining share repurchase authorization. The company ended the quarter with $856 million of cash, fully funded reclamation accounts and the new $320 million revolving credit facility. Turning now to the first quarter segment results. Seaborne Thermal recorded $94 million of adjusted EBITDA. First quarter shipments were 100,000 tons more than anticipated and higher Wilpinjong production offset lower production at Wambo. For lower cost Wilpinjong production was offset by lower realized prices, resulting in EBITDA margins of 33%, in line with the previous quarter. The Seaborne Metallurgical segment generated $48 million of adjusted EBITDA. Average realized pricing was less than anticipated due to mining lower quality coking at the CMJV. And PCI coal prices remained weak, relative to premium hard coking coal. Costs of $139 per ton were at the higher end of guidance due to unplanned equipment and [wash plant] repair costs at the CMJV. The U.S. thermal mines produced $63 million of adjusted EBITDA in the quarter and lower than expected shipments that Jim previously mentioned. The PRB mines shipped 18.7 million tons and generated $16 million of adjusted EBITDA. Cost came in at $12.74 per ton higher than expected due to lower production costs. The other U.S. thermal segment generated adjusted EBITDA of $47 million. We shipped 3.2 million tons, about 400,000 tons less than anticipated, but also benefited from contract cancellation settlements, which increased revenue and EBITDA margins above fourth quarter levels. Cost of $45.25 per ton were in line with guidance, as lower maintenance and repair spend offset less volume. Looking ahead to the second quarter, Seaborne Thermal volumes are expected to increase to 4.1 million tons, including 2.7 million export tons with higher volumes out of the Wambo complex. 400,000 export tons were priced on average at $146 per ton, with 1.3 million tons of high ash product and 1 million tons of Newcastle [spec] product unpriced. Costs are expected to remain consistent with the prior quarter at $45 to $50 per ton. Seaborne Metallurgical volumes are expected to be 1.9 million tons, 500,000 tons higher than the first quarter as the Metropolitan longwall move is now complete and mine sequencing improves at the CMJV. Volumes are expected to achieve 65% to 70% of the premium hard coking coal price, based on the projected sales mix and current price relativities. With higher production, costs are anticipated to improve to $110 to $120 per ton in line with full year guidance. PRB shipments are expected to be 15.5 million tons lower than ratable, as we enter the traditional second quarter [shoulder] season. Costs will be temporarily elevated at $12.75 to $13.75 per ton due to lower shipments and resulting higher strip ratio. Other U.S. thermal coal shipments of 3.8 million tons are expected to be higher than the prior quarter, as we recently signed new contracts for 1.8 million tons to be delivered this year. We expect costs of $44 to $48 per ton in the quarter. Additionally in the second quarter, we have the $134 million cash purchase of Wards Well and are expecting tax payments of nearly $120 million in Australia, covering the remaining 2023 liability in the first half of 2024 estimated payments. With an implied stronger second quarter, we are reaffirming full year guidance. We expect to generate significant cash flow in the second half of the year and remain committed to returning capital to shareholders. Strategically, we continue to take steps to deliver long-term value. We closed the Wards Well acquisition in April and continued development at Centurion. We expect first continuous minor development coal this quarter and are on track to commence longwall operations in the first quarter of 2026 on-time and on-budget. Operator, I'd now like to turn the call over for questions. Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Lucas Pipes from B. Riley Securities. Please go ahead. Lucas Pipes: Mark I want to start with a few questions on the finance side. You noted the U.S. Reclamation bond release of $105 million. And I wondered if you could maybe walk us through the cash flow implications of that release, if any? And then just around cash flows in Q1, I'd anticipate something similar in Q2 with the Wards Well acquisition closing. Could you speak to any other kind of cash flow impact in Q2 be it working capital or otherwise? And then just with that lumpiness how do you think about staying in the market from a buyback perspective? Do you have the flexibility to be opportunistic? Or do you kind of pause it here and then resume it in the second half is when you noted cash flow would be stronger again? Thank you very much. Mark Spurbeck: Yes, Lucas, thank you for those questions. And I'll try to hit on all of them. And really good results with some bond reductions in the first quarter. Credit to our team here for, one, getting the reclamation work done; but two, also following up and getting those bonds released. On average those bonds are probably collateralized at about 55%. So, there was some cash returned. We also moved around from some other bonds in Australia. So, there was a cash inflow. So, you see a reduction in that restricted cash and cash collateral on the balance sheet. Offsetting that from a cash flow perspective, though, there was some use of working capital. So net-net, there are $120 million of operating cash flow is how you should look at that. You mentioned a little lumpy here with Q1 with the performance we turned in as expected. Q2 will be similar. We have the $134 million cash purchase at Wards Well, and I know you remarked the tax payments from Australia about $120 million. That makes up both the remaining liability from 2023 as well as first half of 2024 for estimated payments. So, a couple of significant cash usages here in the second quarter. But again, going out we've at the second half well positioned based on guidance and the forward price strip, you can see some pretty significant cash flow depending on your price deck, plus that $300 million to $400 million is an opportunity we have out in front of us from a cash flow perspective. Maybe lastly, just touching on the program, I'll note a couple of things. One, everything we do, including our [repurchase] term program is designed for long-term value and durability. Since we restarted the program, we've announced a return of just under $0.5 billion, $50 million in dividends and about $430 million in share buybacks through the repurchase program. We have essentially created 15% growth in earnings and free cash flow on a per share basis with that share reduction. We have completed the balance sheet initiatives we set out two or three years ago to do, which included one very important step that no one else has done, and that is pre-funding 100% of our global reclamation liability. This puts us in a leading position in the industry going forward, taking that big liability off the table and eliminating a big liquidity and capital risk going forward. So, we believe that puts us in a great position to continue developing our premium hard coking coal project in Centurion. And with our quarterly fixed cash dividend, the program's durability remains through periods of lower cash flow, but also very flexible to increase in periods of above-average free cash flow on direction of our board. So lastly, I'd note, and I think you asked, are we going to be opportunistic or flexible? Yes, I think our program tend to be flexible. And as we look out in the full year, we see some strong cash flows going forward, and we have the flexibility in our program to look on things on an annual basis and get back in the market on an opportunistic basis when our board deems it appropriate. So, lot of flexibility, a lot of opportunity in front of us going forward, and we remain committed to returning additional capital to shareholders. Lucas Pipes: Mark, really appreciate that. I think you hit on all the points there. So, thank you for that. Jimmy, I want to get your perspective on a couple regulatory things. First, EPA last week unveiled a new power plan rule. Could you maybe comment on what you think the impact is to your domestic business? And how you think from a strategic perspective you can mitigate any impact? And then over in Australia, there's, I think, a new labor rule coming that in regards to contractor pay. If you could maybe comment on that and what the impact might be in Australia? Would appreciate your thoughts on those two developments. Thank you. Jim Grech: So on the first one, with the EPA and the new suite of rules and the Clean Power plan rules. I do have some comments on that. But I do want to start out and just recognize the fact that approximately three-quarters of the EBITDA generated from our company comes from our Seaborne Thermal and Met Segment. So that doesn't mean we're not concerned about these regulations. But again, majority of the EBITDA comes from our Seaborne platform. And one of the things you said, what it's going to mean for our domestic business? Well, a lot of these thing is going into effect, if they did go into effect in the later years. So, I don't see any near-term impacts. And the question is still out, is there any beating longer-term impacts. So, we've stated many times that as a company, we believe in a diverse energy mix, and that includes coal and renewables to having good reliability and energy security and affordability. With this suite of regulations, we do believe though that the EPA has overstepped its authority granted to it by Congress and its threatening grid reliability at a time of increased energy demand. So what's different, I think, this time around from the -- this has happened in past years, there's several things Lucas that has to be taken into account in trying to assess what potential impact that we're going to see from these regulations. One is what's going on now, which is it hasn't been happening for many, many years is surging power demand forecast for the next five years and you've had relatively flat load growth for quite a period in our country. And now with the manufacturing centers of electric vehicles, data centers, AI centers and so on there's tremendous load growth projected. So again, you get what's the impact on new US coal markets, while as a result of that projected load growth, in past quarters, over 20 power plants have announced delays in retirement dates. So actually, you look at that in the US thermal market from that perspective is actually growing. The second thing that's out there that I think is very, very different from when EPA has done this in the past with these proposed regulation is the national [indiscernible] of a concern of grid reliability and not having enough existing baseload generation to support this load growth. And what does that mean is there is a Groundswell of opposition or stated concern with these proposed EPA regulations. You've got PERC, [indiscernible] PJM, MISO, electric utilities, which you haven't heard from in the past. Politicians from both sides of the aisle are talking about their concerns with these proposed regulations [indiscernible] leading national newspapers, The Wall Street Journal, Washington Post, New York Times overnight. There's a very good article in Fox news and opinion piece stating their concerns of this grid reliability. That's very, very different in the past, this Groundswell of opposition and concern over these regulations. And what I think is going to happen is you're going to see a very swift and significant pushback in the US court system. Over 20 state attorney generals have already announced their intentions to fight the proposed regulations, working with the National Mining Association America's power to mount the US mining industry, support legal challenges and we expect to see court stays on this at some time this year. So, the crux of your question is what do we think is going to happen? Nothing in the near-term and I think there's enough opposition in the long-term to really put some doubt the impact of these will have on US generation mix particularly given the fact that power plant lines are being extended because of the load growth. The second question you had was about the new labor rules and Australia contractor same job, same pay. We've included all that in our guidance already. That really isn't effective until November first. And any impact we see is going to be in there and we don't have as many contractors on our payroll as other mining companies in Australia. So, there is some impact. It's not significant and it's already in our forecast going forward after November 1st. Lucas Pipes: Thank you very much for that detailed answer on the EPA side. Very, very helpful. On the second part roughly what percentage of your Australian workforce consists of contractors, or labor costs? I guess a few ways to slice it. But I guess, if it starts November then we have 2 out of 12 months impact. So just trying to get a sense for what it could mean for next year on a full year basis? Jim Grech: I don't have that right in front me, but we'll get it right back to you. When we'll get, we'll follow up with you on that one to give you the correct number on that. Operator: The next question comes from Nathan Martin from Benchmark Company. Please go ahead. Nathan Martin: To start off with Centurion, you guys still targeting development coal there sometime here in the second quarter it looks like. What's your plan and timing, I guess as far as selling or marketing those tons is concerned? Malcolm Roberts: Look, we've already started including contracts for the development coal coming out of Centurion. So, during the quarter a blue-chip North Asian customers agreed to a two-year contract and we look forward to making our first shipment later this year. Nathan Martin: And Malcolm, are there any limitations there from a transportation standpoint at this point? Malcolm Roberts: Absolutely no transport issues. We've been fully set up within the Goonyella system with contracts and the like to be able to have to ship that product. Nathan Martin: And then maybe stick with transportation for a second. I think, Jim, you made some comments about the Demopolis lock outage. Just to be clear, what kind of impact are you still seeing there at Shoal Creek? Clearly, your second quarter net sales guidance is up quarter-over-quarter, but just a little more color there would be great. Jim Grech: I'll comment on the lock and then I'll turn it over to Malcolm to talk about you know the sales. The lock we've been saying we expect it to be back Nathan in service by the end of May and the [indiscernible] Engineers came out this morning and actually said I think it's going to be May 22nd. It'll be back in service so more than a week earlier than planned. So that's some good news that we have for us. Now in regards to your question about the impact on sales I'll let Malcolm comment on that. Malcolm Roberts: We've been railing some product to the to the port at McDuffie. However, what this really means is that for the second half of the year we're going to be weighted probably two thirds of our annual volume from Shoal Creek to the second half of the year and one third for the first half as a result. But we really do forward that lot coming back and we're advised today 22nd of May. Nathan Martin: And maybe shifting over and I know I asked about this last quarter and I think you know Jim you clearly made some comments in your prepare remarks too. But the PRB shipment is below your first quarter target, second quarter guidance down 3 million tons plus or minus. Again, we know seasonally that's typical during the shoulder season. But would be great kind of get your thoughts on what gives you confidence to maintain your full year guidance range at this point? I mean it looks to me like you will need to increase second half shipments by at least 12 million tons just to kind of hit the low end of that range. So, it would be great to just get a little bit more thought around that piece. Thank you. Jim Grech: First off, the tonnage levels that we're looking at for the second and then particularly the third and fourth quarter are well within tonnage ranges that we shipped in the past. So as far as the quantity of coal and our ability to produce it, and I do believe the railroads are going to be able to move it as well, which is a key item in the third and fourth quarter. So logistically, operationally, we feel very good about that. Our sales book is strong and the indications we have from our customers is that right now we are expecting to have some normal pull in that third and fourth quarter on those tons. We've already seen an uptick in some nominations for May. It was a little stronger than we thought it was going to be and we're getting some early indications we could see that again in June. So, it looks like there's recovery starting to occur in the PRB and the indications we're getting from our customers at this time. Operational logistically, we feel -- again, we feel that [the way we're reaffirming that] guidance for the full year. Nathan Martin: And then maybe just one more. Mark to you. I don't want to leave you out. I know Lucas touched on this earlier. Some of the moving pieces on the cash side here in the second quarter that are expected. Your available free cash flow I think was actually negative at the end of the first quarter. How could this impact your ability to repurchase shares again here in the second quarter? Mark Spurbeck: You're right. The table shows the minus four there off of Q1 and with the cash purchase awards well and the cash tax payments, not expecting a robust number for Q2. But again, our program is designed to be flexible. It is on an annual basis. We're very happy with our liquidity position and we see some strong cash flows coming forward here in the second half of the year. Operator: The next question comes from Katja Jancic from BMO Capital Markets. Please go ahead. Katja Jancic: Maybe just staying a bit on the share buybacks. Is there any possibility that you could use some of the cash on the balance sheet since it's so strong for buybacks? Mark Spurbeck: As I mentioned the program is based on an annual look and we have flexibility. As I mentioned with Nate, we feel comfortable with our liquidity and you know strong cash flows coming in the second half of the year. So, we are designed to be flexible and we haven't announced anything but we have that built in to do we deem appropriate and to be opportunistic as the market presents. Katja Jancic: And maybe then on the Centurion. I think for this year for second half you expect to ship 150000 tons or that was prior expectation? Is that still -- does that still hold? And then maybe looking to next year what could potential contribution from Centurion be? Mark Spurbeck: So this year we look to we look to ship about 100,000 tons for the current year. And I think production next year on a development basis is probably in the 400,000 ton range. And as Malcolm mentioned we already have blue-chip Asian customers kind of knocking down our doors trying to contract some of that coal. So really set up strong. Operator: Our next question is a follow-up from Lucas Pipes from B. Riley Securities. Please go ahead. Lucas Pipes: Thank you very much for taking my follow-up question. I'll start with a quick one. The high ash product could you remind us what pricing has been quarter-to-date for that API 5? And then where does Wilpinjong typically price as a percentage against that index? Thank you. Malcolm Roberts: We got to put 5% to 20% discount against the 5 API 5 index, which is the China Index which is a 5500 [indiscernible] 22% ash product. We supply a higher product slightly higher than that. So that represents the discount we're going to. Lucas Pipes: And Shoal Creek in Q1 MSHA data was very helpful. Was very, very strong on. And so, I wondered if you could maybe comment it on kind of the operational outlook from here. I assume there's maybe a little bit of a normalization, but would be helpful to hear how you think about operations at Shoal Creek for the remainder of the year? Thank you. Jim Grech: I think MSHA data had about 600,000 tons in Q1 which again is a very, very strong quarter for the mine. Very, very happy with what the team has done down there and show that new fit for purpose longwall that we had down there. It's really making a difference. But we do have a longwall move later in the year, we have miners' vacation and so on for to content [indiscernible] and we didn't have all of those things occurring in the first quarter. So, to keep that pace up is would be very challenging later in the year with all the things that we have. I just don't see it staying at that pace in the following quarter with the longwall moves and the miners' vacation that we have ahead of us. Operator: There are no more questions in the queue. This concludes our question-and-answer session. Jim Grech: [indiscernible] joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I'd also like to thank our investors, customers and vendors for your continued support. Operator that concludes our call. Thank you. Operator: Conference has now concluded. And thank you for attending today's presentation.

Operator: Good morning, and welcome to the Peabody Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Karla Kimrey, Vice President of Investor Relations. Please go ahead. Karla Kimrey : Good morning, and thanks for joining Peabody's earnings call for the fourth quarter and full year of 2023. With me today are President and CEO, Jim Grech; CFO, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. Jim Grech : Thanks, Karla, and good morning, everyone. For the full year 2023, our operations performed as expected, delivering another year of strong results, allowing us to further enhance shareholder value. We prefunded our long-term mine closure and reclamation obligations and implemented a robust shareholder return plan, which resulted in reducing our shares outstanding by over 11%. We also continued to strategically reinvest in our met portfolio through our Centurion development project, the pending acquisition of a large portion of the Wards Well reserved adjacent to the project and the purchase of the new longwall kits at our Shoal Creek and Metropolitan operations. In the fourth quarter of 2023, we produced strong results despite a non-Peabody-related train development on the mainline in Australia that interrupted some deliveries in December. We continue to advance development of our Centurion premium hard coking coal project and successfully put the new longwall at Shoal Creek into production ahead of schedule. Given the March Mine fire at Shoal Creek, this was an incredible achievement that would not have been possible without the efforts of our dedicated employees working close coordination with MSHA. Before I expand on the markets, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Coming off our annual global injury rate in company history last year, this year, we achieved our second best annual global injury rate and a record low injury rate in Australia for a calendar year. Our Wilpinjong mine celebrated 2 years with no lost time incidents. Our 20-mile mine win the Sentinels of Safety Award for the second year in a row, recognizing the mine as the safest underground mine in the U.S. Now turning to the global coal markets. Seaborne thermal coal markets were range-bound during the quarter. Elevated cold natural gas inventories in the Northern Hemisphere have continued to weigh on demand for high-energy thermal coal, coupled with an increased supply from the East Coast of Australia, resulting in Newcastle coal trading within a range of $120 to $150 a ton. Asian thermal coal imports continue to grow with China reporting that thermal coal imports totaled 354 million metric tons for 2023, increasing by 62% compared with the year ago level and were by far the largest contributor to Asian import growth. In contrast, Japan and Korea are on track to record mild decreases in imports for 2023. Within the Seaborne Metallurgical coal market, the volatility would characterize the first 9 months of 2023 continued during the balance of the year. The steel sector outside of China showed growth in crude steel output during the 3 months ended December 31, 2023, led mainly by India and its ongoing strong economic expansion. Total crude steel output during the period, however, contracted because of a sharp decline in Chinese production, where steel producers reported thin margins and slower domestic demand. Premium hard coking coal indices finished the quarter marginally lower, around $323 a ton. The outlook for the Metallurgical coal market remains positive with seaborne supply remaining below historical levels, combining with strong Indian purchase interest and new import demand for steelmaking coal within Southeast Asia. In comparison, PCI and semi-soft coking coals observed more substantial price reductions. In United States, electricity generation from thermal coal has declined year-on-year due to low gas prices and the impacts of renewable generation. The near-term demand outlook is anticipated to be challenged by comparatively high generator inventories as we transition into the post winter shoulder season. Renewables continue to grow as part of the energy mix. However, we have seen several of our customers delay the retirement of some of their plants in order to ensure grid reliability. Now moving on to our operating segments. Our seaborne thermal fourth quarter coal volumes came in at 3.7 million tons, which was lower than anticipated, primarily due to a trained development on the main language serves our Wilpinjong mine. The development occurred on December 6 and impacted shipments for 10 days. Segment costs per ton were at the high end of our range due to the lower shipments. Our Seaborne met segment shipments were 2.1 million tons in the quarter, in line with expectations, while total segment costs were better than anticipated at $108 per ton. In December, we were able to successfully commence new long-haul production at Shoal Creek in the newly developed L panel district ahead of schedule. In the PRB shipments of 23.6 million tons were better than anticipated. This quarter, Peabody increased our production share of the total PRB shipments from 39% in the third quarter to 43% in the fourth quarter. In other U.S. thermal shipments were 3.7 million tons, slightly below our expectations as we had a few customers reduce their demand due to high inventories and natural gas pricing. Outside of our active operations, we continue to make progress at the Centurion mine, our key Metallurgical coal growth project. In December, we renamed North Goonyella as a Centurion mine, signifying a new chapter in our operations. The Centurion complex will include the former North Goonyella mine, along with the new Wards Well deposit, which is adjacent to our existing property. We anticipate closing on the Wards Well transaction in the second quarter. At site, we continue to advance on initiatives to support the commencement of development coal in April, including installation of a new conveyor system and the commissioning of equipment for underground development. We're also making progress with building out the workforce as we welcome our first group of permanent underground workers. We will continue to onboard additional underground operators and maintenance staff to support scaling up of development. We continue to expect our first sales of development coal in the second half of 2024 and longwall coal in 2026. We entered the new year with a diverse platform that gives us the stability and consistency to deliver results, allowing us to return cash to shareholders and advance major projects as we re-weight our portfolio to more seaborne coal. As we look forward to 2024, we are focused on executing our strategy by continuing to deliver consistent, predictable and reliable performance from our operations. Advancing Centurion, our Tier 1 premium hard coking coal development project and delivering value to our shareholders through our previously announced shareholder return program. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck : Thanks, Jim. In the fourth quarter, we recorded net income attributable to common stockholders of $192 million or $1.33 per diluted share and adjusted EBITDA of $345 million. For the full year, we recorded net income of $760 million or $5 per diluted share and adjusted EBITDA of $1.4 billion. The company generated $1.1 billion of operating cash flow from continuing operations. and $724 million of available free cash flow. Based on these results, we have announced the return of $471 million to shareholders, primarily through share buybacks. Through December 31st, we have repurchased $16.1 million shares better than 11% of shares outstanding and have $80 million more to deploy in the first quarter. Turning now to segment results. In the fourth quarter, Seaborne Thermal recorded $100 million of adjusted EBITDA. Tons shipped were less than anticipated, primarily due to a rail issue in the mainline, which limited Wilen Young shipments and moved costs toward the higher end of guidance. For the full year, the Seaborne Thermal segment reported $577 million of adjusted EBITDA. Export shipments increased to 10 million tons, and the segment achieved adjusted EBITDA margins of 43%. The Seaborne Metallurgical segment generated $166 million of adjusted EBITDA in the fourth quarter, more than double the prior quarter's result as both shipments and realized prices were substantially higher. Cost of $108 per ton were below the low end of guidance at Shoal Creek achieved a great earlier-than-expected start of the new longwall in the L Panel district. For the full year, the Seaborne Metallurgical segment reported $438 million of adjusted EBITDA. Shipments increased to 6.9 million tons despite a tough transition year at Shoal Creek. The segment achieved adjusted EBITDA margins of 34%, a favorable result considering our average realized price was $55 per ton lower than last year as a result of weaker PCI coal prices. The PRB mines shipped 23.6 million tons, our highest quarterly volume since 2019, a testament to our team's full recovery from the midyear tornado disruption, putting themselves in a position to seize an opportunity to load additional trains. Higher shipments were partially offset by additional repairs and other costs, resulting in $38 million of adjusted EBITDA for the quarter. For the full year, adjusted EBITDA was $154 million, more than double last year, as we continue to benefit from the sales book we built during 2021 and 2022 where we favored longer-term contracts with improved pricing over shorter-term contracts at spot pricing levels. Year-over-year, our PRB average realized price increased $0.85 per ton or nearly 7%. And over the last 2 years, our PRB average realized price is up 25%. The other U.S. thermal mines delivered $42 million of adjusted EBITDA in the fourth quarter. Production was impacted by the planned longwall move at 20 miles and lower volumes from certain customers reduced shipments below guidance. However, we benefited from a substantial increase in the average realized price to $57 per ton due to buyouts and compensation payments from these customers. As a result, segment EBITDA exceeded implied guidance. For the full year, adjusted EBITDA was $208 million, and we achieved segment adjusted EBITDA margins of 23%. Together, the U.S. thermal mines produced $361 million of adjusted EBITDA in 2023, an increase of $51 million over the previous year. Looking ahead to 2024, we expect another year of consistent operating and financial results. More thermal volumes are expected to be very similar to 2023. However, we anticipate benefiting from a higher proportion of Newcastle spec product due to mine sequencing at the Wambo Open-Cut Mine. Shipments are anticipated to be 15 million to 16 million tons, including 10 million export tons and costs are projected to be consistent with 2023 levels at $45 to $50 per ton. Seaborne metallurgical volumes are projected to increase by 1 million tons to $8 million, primarily due to a full year of production from the newly installed longwall at Shoal Creek. Segment costs are expected to improve to $110 to $120 per ton. In the PRB, we are forecasting shipments of 80 million to 87 million tons, and we have 85 million tons priced at $13.70. Costs are expected to remain mostly flat with 2023 levels at $11.75 to $12.5 per ton. Other U.S. thermal volume is expected to be 15 million tons, down slightly from 2023 as we transition from the El Segundo to Lee Ranch reserves out west. We have 15.2 million tons priced at $53.70 and expect costs in the range of $41 to $45 per ton, largely consistent with last year. Total capital expenditures are estimated at $375 million, including $235 million of project capital, primarily for the continued development of Centurion and sustaining capital of $140 million. Additionally, we expect to close the previously announced acquisition of the Wards Well coal deposit. Specifically for the first quarter, Seaborne thermal volumes are expected to be 3.9 million tons, including 2.5 million export tons as we ramp up from the Wambo underground longwall move from the fourth quarter of last year. Cost per ton are expected to be consistent with prior quarter at $48 to $53 per ton. Seaborne metallurgical volumes are expected to be lower than ratable at 1.4 million tons, with costs temporarily elevated at $130 to $140 per ton, primarily due to a longwall move at Metropolitan and mine sequencing at the CMJV. We also continue to monitor the Demopolous lock situation, a lack under repair that has the potential to temporarily increase transportation cost at Shoal Creek, but we don't anticipate a financial impact to first quarter results. We expect to ship 21 million tons of PRB coal in the quarter, with costs largely consistent with the prior quarter and $11.75 to $12.50 per ton. Other U.S. thermal coal shipments are expected to be in line with the prior quarter at 3.6 million tons, while costs improved to $41 to $45 per ton. In summary, Peabody delivered another year of consistently strong results and generated substantial EBITDA and most importantly, free cash flow. Peabody's diversified portfolio of mines is uniquely positioned, having generated approximately 40% of adjusted EBITDA from the Seaborne metallurgical segment, 40% from the Seaborne Thermal segment. and 20% from the U.S. thermal segments over the last 2 years. After repaying the last of our secured debt in 2022, last year, we prefunded all future mine closure and reclamation obligations, further enhancing the company's financial strength and flexibility. With our financial and environmental liabilities addressed, we reinstated a robust shareholder return program and announced the return of $471 million to our shareholders based on 2023 results. Last month, we announced a new $320 million revolving credit facility, further enhancing the company's financial resiliency during the development period at Centurion. We anticipate achieving our goal of further waiting Peabody's long-term cash flow towards premium hard coking coal when longwall production begins in 2026. We remain focused on creating shareholder value operating safe and efficient mines, maximizing free cash flow and shareholder returns and continuing development of Centurion, all while maintaining our financial strength. Operator, I'd now like to turn the call over for questions. Operator: [Operator Instructions] And our first question comes from Lucas Pipes of B. Riley Securities. Lucas Pipes: My first question is on the met coal guidance for 2024. Nice outlook there. And twofold question. First, would you be able to provide a breakdown of the quality of met coal at the midpoint, call it 8 million tons? And then how many development tons from Centurion would be included in that guide? Mark Spurbeck: Lucas. Yes, we're real pleased with the 8 million tons for the full year 2024, really stepping up 1 million tons and really based on good production from Shoal Creek. As you're aware, we have a little bit of development coal we expect Centurion. While we'll be getting that coal and building inventories, probably sales will be light closer to 100 -- 150,000 tons. When we look at the total over the portfolio, we're probably looking at about 4 million tons of PCI and 1.5 million high-vol product primarily from Shoal Creek. Lucas Pipes: The balance. Maybe I didn't catch it all. Mark Spurbeck: Yes. The rest of that is Metropolitan. Got it, which is kind of a semi-hard coking coal. Lucas Pipes: What would be the best index for Metropolitan? Mark Spurbeck: I mean, we continue to look at the whole portfolio and achieving that off of a premium hard coking coal at 65% to 70%. But Malcolm, maybe you want to address the relativities of those products. Malcolm Roberts : Yes. Look, we don't list impendently each of our assumed relativities, but Metro is clearly priced against prime low vol hard coking coal at a small discount to that. Lucas Pipes: Very helpful. I appreciate that. Then kind of staying on the met coal side. For Centurion, could you remind us of the CapEx budget, the total CapEx budget has that evolved? Is that under review? And kind of looking out to 2025 and beyond, what would be left in terms of capital expenditures at the end of this year? Mark Spurbeck: Yes, Luca. I'll break that down. So as we previously announced, the North Goonyella historical legacy portion of Centurion and it's a total CapEx of $489 million. $125 million of that has been spent as of 12/31. We have in the budget of $150 million for 2024. And that would leave about $200 million for 2025 for the North Goonyella side. Now the Wards Well piece. We look to close that here in the second quarter of this year. We do have $50 million of capital development for the words well portion of Centurion in 2024. We haven't come up with a full project CapEx beyond that. We're still in the process of developing an integrated mine plan, and we'll provide that guidance at a later date. Jim Grech: And Lucas, I'd like to add to that, that CapEx, the portions of it that are associated with equipment and conveyors and so on and miners has pretty much been spent -- ordered and those costs are known. A large part of what Mark is talking about is the development cost which get capitalized until we get into production. So as far as equipment and being exposed to inflationary pressures, we feel that that's pretty much behind us. and we feel pretty good about those capital numbers because, again, it's mainly associated with development going forward. Lucas Pipes: Very helpful. I'll squeeze one last theme, and it's around your balance sheet and capital returns. So kind of a 3-pronged question. I'll try to be brief. But -- congratulations on the revolver. How does that fit into kind of your capital structure going forward? Does that unlock additional capital return opportunities? And related, how do you think about kind of cash on your balance sheet today? Is that the right level going forward, again, it kind of ties into the revolver, of course? And then how should we think about net interest income or expense given that cash balance? I would appreciate your thoughts on this. Mark Spurbeck: Yes. All right. So you stuck kind of 3 questions in there and the last one, Lucas. Happy to answer those questions, though. And I'll start and just remind everything we've done from a balance sheet perspective over the last 2 years has addressed the evolving capital markets for our industry, which operates with above-average volatility in both demand and market pricing. We will not risk the company's financial strength. And we took an opportunity to solidify our financial resiliency, pretty inevitable dips in the market with this new revolving credit facility. We think that was particularly prudent during the development phase of Centurion, our premium Seaborne metallurgical coal growth engine. The revolving credit facility does provide an attractive opportunity to utilize it for letters of credit for surety and other commercial requirements, something that we would be particularly comfortable doing on a Tier 1 met coal mine with a 20-plus year life. I will add that Moody's did take note, bumped our rating up a notch. And while this financial strength comes at a cost of additional liquidity, we continue to benefit from lower surety bonding fees, lower FX hedging costs as well as lower D&O premium. So there is a net benefit there in addition to the interest income that you've mentioned -- we get a safe treasury like yields. So at today's market, probably 4.5% to 5% is a good market to use on those cash balances. Operator: The next question comes from Katja Jancic of BMO Capital Markets. Katja Jancic : First, just to confirm, you expect Shoal Creek to add 1.5 million tons this year? Mark Spurbeck: Yes. We haven't provided guidance on an initial mine level, but that's in the right ballpark. We had a really good start to the quarter. We probably think production is probably in that ballpark. Katja Jancic : And can you just remind us what is the production capacity at Shoal Creek at this point, the max? Mark Spurbeck: That mine has done more than 1.5 historically. But given where we're at in the mine geological conditions, we're comfortable with those levels. Katja Jancic : Okay. And then just quickly, you -- the major project CapEx at $235 million. And I think you mentioned the Centurion is about $150 million. Can you talk a bit about what the rest that is -- what are some of the other projects included in that? Mark Spurbeck: Yes. There's $150 million for the North Goonyella portion of Centurion. There's about $50 million for the Wards Well portion of that, assuming we get that closed in the second quarter. There's also probably $15 million, $20 million at the Wambo Open-Cut joint venture that -- that we're -- that's run by Glencore. Operator: The next question comes from Nathan Martin of Benchmark. Nathan Martin : We will start on the seaborne thermal side, guiding to 9 million to 11 million tons of exports there. What's the approximate production split between the high-quality tons, you get the Newcastle like pricing and then the higher ash, lower-quality product that prices of API to? I know you guys mentioned in your release, the split is roughly even on the unpriced tons, but just specifically wondering on production between Guam and open on this year, I think, Mark, you might have mentioned some positive sequencing along the lines there. And then, how do you guys see going forward, the overall production levels and quality splits of that segment changing over the next several years just given some of the extension projects, I believe you've talked about you're working on? Mark Spurbeck: I'll take that first question. And you're right, there's some better Newcastle spec product this year on an overall portfolio basis, just given the mine sequencing at the open cut, probably looking somewhere in the neighborhood of 4.5 million to 5 million tons of Newcastle spec product, which as you know, our export tons. Go ahead. Nathan Martin : Great. [indiscernible] I just had any thoughts on how the splits and the production levels in that segment trend over the next couple of years just given some of the projects that looks like you guys are working on? Mark Spurbeck: So we haven't given any guidance beyond '24. I will say that, that outlook is fairly stable for the next several years. there are extension projects that are under study. We haven't announced anything. But as we get further down the road and complete those studies, we'll be updating the market. Nathan Martin : Okay. Got it. Maybe over to the met segment quickly, forecasting a quarter-over-quarter drop there in shipments, I think, to $1.4 million from $2.1 million in the fourth quarter. maybe get a little more color on that expected decline? Is it vessel timing? Is it something else? I know, Mark, you mentioned you're keeping eye on the lock outage in Demopolis as well. So any additional thoughts there? Maybe are you investigating any transportation alternatives that, that continues? And then on the cost per ton side, I'm assuming for expected shipments driving that range higher for the first quarter versus the full year range. But any thoughts on maybe how you expect both those items segment shipments and cost to trend throughout the year? Any other longwall moves or so to flag? I think you flagged one in the first quarter. Mark Spurbeck: Yes. I'll start with the volumes, just address the first quarter. Some of that was covered in my remarks. This is typical, or I should say, we've had -- we've experienced the last couple of years. Really, there's a longwall move at Metro that's bringing down some first quarter volumes. And then there's just typical mine sequencing at the CMJV. It did have an absolutely fantastic fourth quarter. But just where they're at in the mines in the pit, there will be lower production coming in the first quarter. So it is less than ratable, similar to last year circumstances. It will increase as we go throughout the year to make up that full balance. And then, Jim, do you want to cover the lock issue? Jim Grech: Yes. Nate, with the lock issue, the timing that we have -- that industry has from the Army Core engineers is for the locks to be back in service sometime in mid-May, that's their current estimate. And so in the interim, we've made alternate transportation routes. We've got 2 different ones. One is all barge and another one is barge and rail that we're putting in place to keep the coal moving. We don't see that impacting our first quarter volumes or our full year volumes for Shoal Creek sales volumes. We do think there may be a dip in the second quarter depending when that lot gets back in place. with the sales tons in the second quarter. But again, it won't affect the full year sales numbers for Shoal Creek. Nathan Martin : Very helpful color, guys. And then maybe just one more. Looking at the U.S. thermal business, you flagged how low nat gas prices, high stockpiles are weighing on demand. They did a couple of contract buyouts, I think. So – if I look at PRB in particular, a fantastic year for you guys from that segment, guiding to sales that are maybe only down 1 million or 2 tons, I think, at the midpoint year-over-year. Obviously, you’ve already contracted 85 million tons there as well. So maybe can you talk about how conversations have gone are going with your utility partners out there, whether or not you feel like there could be pressure on that number eventually just given the current market dynamics we’re seeing? Malcolm Roberts : Yes. It’s Mal. I’ll take that one. Look, we’re very comfortable with the way that we sold and the level that we’re sold to. I think in terms of the market this year, we might see the generators going to the spot market to a lesser degree than they have in previous years, but we’re pretty comfortable with our contracted level and getting that delivered. Operator: The next question comes from Chris LaFemina of Jefferies. Chris LaFemina : So just actually a couple of questions around the met coal business and around capital allocation. So you have the ramp-up of North Goonyella, which I assume is going to be premium low-vol product that gets benchmark pricing. Is that accurate? Malcolm Roberts : Absolutely. In my opinion, a lot of people's opinion is this is the supreme coal, lead top level coal and most likely at the top level or at a premium. Chris LaFemina : And is that true over the reserve life of the asset? Or does the quality degree over time? Jim Grech: That's very true of the hold off of the asset. And the words well reserve addition is the same type of quality. So we don't expect any degradation in the quality at all as we transfer from the old North Goonyella reserves to the Wards Well reserves, same quality. Chris LaFemina : That's very encouraging. So the markets are beginning to believe in kind of stronger for longer met coal pricing. And you're generating cash flow now, you're pivoting to growth in met coal you have fairly substantial organic growth, but would you consider looking at M&A opportunities, particularly in met coal, if they were to arise? Or is really the focus now on delivering the organic growth projects and continuing with the capital returns? Jim Grech: Yes. Chris, our focus is on delivering the shareholder returns and the organic growth is always the topic of our list because it's the least risk. We have the most control over that. And that continues to be our focus internally. Now as M&A comes along, we opportunistically look at anything that comes our way. We always take a look at it, Chris. Now how active we are as a different thing. But as things come our way, we take a look at it and then make a determination if it could benefit our shareholders or not, but it's down the list. Organic opportunities are at the very top of the list. Chris LaFemina : Yes. What's nice about the buyback is that you're basically increasing your production on a per share basis at a low valuation and is ramping up met coal volumes and reducing your share count. The leverage of the met coal market obviously becomes much greater. So we -- just an observation, we definitely like that, and good luck with it all. Jim Grech: Thank you, Chris. That's the exact same observation we have too. Operator: The next question comes from Michael Dudas of Vertical Research Partners. Michael Dudas : Two questions. First on thermal U.S. Jim, you mentioned about some -- and we've seen in the markets some coal plants closures being deferred given the dynamics on grid and reliability, etcetera. Maybe you could share with us like relative to maybe 6 to 12 months ago and how you're looking at your customer base? And has there been any major changes on over the next several years or maybe even sooner, the retirement on your customers and where you're selling the coal, does that change? Is that maybe it will lengthen the opportunity to monetize your reserves in the U.S.? Just wanted to get a thought about that. Jim Grech: Mike, the discussions we have with our customers is -- one of the things that we've noticed is now desires to have longer-term contracts put in place because of the combination of the concern about the reliability of supply and the potential for plants having longer lives than was originally thought to be the case. And I would say that the conversations we're having with our customers and what we're seeing is plants that maybe we're going to close in the next few years, looking at them going out to 29 or 30. It's not -- nobody is making commitments or predictions gone that, but it is a very good trend to see that -- see that occurring. And again, because I'm sure you know that this year is reliability, right? The reliability of the grid backed up by baseload power and the need to keep these points around to do that. So it's an encouraging start getting us through stronger through the end of this decade, and we'll see where it leads to from there. Michael Dudas : I appreciate those thoughts. Secondly, as you know a little bit of market intelligence on your part, as you look out maybe to the second half of this year, do you think there's a better chance for the thermal markets to recover nicely or see pressure on the seaborne net side, given where fundamentals are I agree with Chris is out about the short scarcity of met coal, but how are you thinking given what you're seeing? And is relative to, of course, the hives and gas prices, how that plays through with on the supply side and such for move over the next 6, 12 months? Jim Grech: Yes, Mike, before we answer to make sure we got the question clear. Are you talking about seaborne thermal and seaborne met and between them and -- Michael Dudas : Yes. Malcolm Roberts : Yes, Sure. I'll take that. When it comes to the seaborne met market, we are quite encouraged by what we saw during Q4 with increased crude steel production rates outside of China, and we expect those rates to continue during Q1 and into Q2. And we also are encouraged in the metallurgical coal space by very constrained supply. So supply having got back to those 2019 levels, which we use as a bit of a baseline to look at that. And we still see supply challenge moving through 2024. Turning to Thermal coal. Newcastle Coal is in -- is in solid demand. However, at times, we get a little ahead of the demand. So we sit right now with prices around $120. We think that supply is a little ahead. We had quite a strong supply growth out of East Coast Australia during Q4. But look, we think the prospects for Newcastle thermal coal, and that's the coal that we really put into the export market to improve as we move through the year. as we've still got inventories to be taken down in the Northern Hemisphere. So we're optimistic about the rest of the year. Karla Kimrey : Operator, do we have another question? Operator: The next question is a follow-up from Lucas Pipes of B. Riley Securities. Lucas Pipes: My first one is on Wilpinjong. I looked at the technical report some time ago, and it that's last year's technical report, I believe. And it showed kind of lower volume starting this year. I wondered if you could maybe comment on that, I guess, we'll get an updated version with the 10-K. But if you could maybe comment on kind of mine of life of Wilpinjong and your outlook on production for this year and the coming years? And then I guess you have to kind of net that against what goes domestic versus export. So if you could comment on that and kind of the net contribution of Wilpinjong to your Seaborne thermal portfolio over time? We would really appreciate the color. Jim Grech: Yes. Lucas, we'll start. We'll have Malcolm talk about the contracting of the domestic versus the export and some color on that to the extent that we can talk about that. And then we'll follow up with your question about the reserves and the outlook. So Malcolm, if you could go first. Malcolm Roberts : Yes. Look, we -- as we move past 20 -- 2027, 2028, the proportion of export coal, we expect to increase. However, there are some extension options and production options to increase based on that as well at Wilpinjong, which we can -- we've got a very busy drilling program there at the moment. Mark Spurbeck: Year-over-year, we're probably looking at -- it's only about 300,000, 400,000 tons lighter in '24 versus '23 in -- so -- and as Malcolm says, I would say the export volumes are probably similar year-over-year as well. So pretty consistent performance there. And obviously, we already mentioned the better performance out of the Wambo time increasing the proportion of new gas. Lucas Pipes: Got it. And should I think about kind of the higher output versus the prior plan as efficiency gains and unanticipated kind of optimization opportunities. How should I think about that? Mark Spurbeck: Yes. I think it's a combination of both of those things, Lucas. We continue to mine various looking forward, going out beyond '24. Certainly, there's studies. We talked about that earlier, that we are conducting. There's several expansion opportunities, and we'll continue to study those. And when we get further down the line, you'll see an updated production profile in a technical report. Jim Grech: Lucas, maybe also you're talking about Wambo would come out of that longwall move at the end of last year and have the long haul running this year, too. I'm not sure what time frame you're talking about with the tonnage profile. Lucas Pipes: Yes, that was kind of Wilpinjong over the next -- a couple of years -- Jim Grech: Wilpinjong. Okay, I'm sorry. Go ahead. Lucas Pipes: No, very helpful. I appreciate that discussion. I guess some helpful context. Follow-up on Wards Well. I think earlier you mentioned $50 million of capital this year. I wondered if you could maybe expand on what you would envision to invest in with that capital? Is it machines? Is it infrastructure for the eventual extraction of those reserves, would appreciate your comments on that? Mark Spurbeck: Yes. I think it's a combination of both, Lucas. I mean there will be some -- and certainly, we'll begin driving an underground development towards those reserves, which is all capitalized. So that's the preliminary estimate of $50 million for 2024. Lucas Pipes: Okay. That's helpful. And then on the domestic side, I wanted to kind of ask about your contract portfolio beyond this year. Can you frame up kind of where the book stands as a percentage of this year's production for 2025? And ballpark, what sort of pricing direction should we anticipate? Jim Grech: Yes. Lucas, for 2025, our domestic book right now, if we look at the PRB and we gauge it against the midpoint of the guidance this year, we're better than 60% committed. And the other U.S. thermal same way if you look at the midpoint of guidance this year and you take that to 2025 or about 75% committed. And we have not yet issued any outlook on pricing for 2025. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks. Jim Grech : Well, thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I'd also like to thank our investors, customers and vendors for your continued support. Operator, that concludes our call. Operator: The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.

Operator: Good day and welcome to the Peabody's earnings call for the Third Quarter of 2023. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Karla Kimrey. Please go ahead. Karla Kimrey: Good morning, and thanks for joining Peabody's earnings call for the third quarter of 2023. With me today are President and Chief Executive Officer, Jim Grech; Chief Financial Officer, Mark Spurbeck; and our Chief Marketing Officer, Malcolm Roberts. Within the earnings release, you'll find our statement on forward-looking information, as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the Securities and Exchange Commission. I'll now turn the call over to Jim. Jim Grech: Thanks, Karla, and good morning everyone. In the third quarter of 2023, we delivered strong operational results with better-than-expected production and effective cost management. We also advanced initiatives at Shoal Creek in North Goonyella that illustrate our ongoing commitment to continue investing in our seaborne metallurgical portfolio. During the quarter, our Board approved full funding at North Goonyella for the completion of initial development through the commencement of longwall operations in 2026. We are also excited to announce that we have reached an agreement to acquire a large portion of the Wards Well coal deposit adjacent to our existing North Goonyella mine. This is a tremendous opportunity to extend a world-class coal deposit and leverage our existing infrastructure and equipment. Before I expand on the quarter, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Now, turning to the global coal markets. Seaborne thermal coal markets remained volatile during the quarter with modest pricing improvements. Robust, but moderating coal and natural gas inventories in the Northern Hemisphere have continued to weigh on demand for high-energy thermal coal, coupled with better supply prospects due to drier weather on Australia's East Coast, resulting in Newcastle coal trading within a range of $130 to $160 a ton. China's year-to-date imports of lower-grade thermal coals continue to significantly surpass the prior year, with an increase in the annual thermal coal input run rate of approximately 93% over 2022 levels. India has also increased seaborne market participation, as our power demand continues to grow. Recent import trends have led the IEA to report that elevated global demand for thermal coal imports so far during 2023 are pointing to 6% year-on-year growth in overall seaborne coal trade versus 2022. Within the seaborne metallurgical market, global crude steel output during the quarter continued to be variable, with weaker production rates in Europe and South America, offset by notable year-on-year crude steel production growth in some Asian markets. Metallurgical coal supply has remained constrained with the rate of exports from Queensland remaining below historical rates and premium hard coking coal remaining highly sought after. Premium hard coking coal indices finished the quarter around $330 a ton, recording a 42% increase during the quarter. The outlook for metallurgical coal remains positive with seaborne supply remaining below historical levels combining with strong purchase interest out of India and new import demand for steelmaking coals within the Southeast Asian region. In the United States, electricity generation from thermal coal has declined year-on-year due to low gas prices and growing renewable generation although quarter-on-quarter improvement in coal burn was recorded through a warm end to the summer. Natural gas prices continue to recover during the quarter, with US natural gas pricing currently at around $3 per MMBtu. Near-term demand for US thermal coal is anticipated to be supported by higher gas prices, while also challenged by comparatively high generator inventories. Now, moving on to our operating segments. As expected, our seaborne thermal third quarter coal exports came in at 2.7 million tons. Segment cost per tons were lower than the second quarter, due to stronger production and lower sales price sensitive costs. Our seaborne met segment shipments were 1.5 million tons. Total segment costs per ton were 20% lower than the second quarter due to strong production and lower sales price sensitive costs offset by timing of sales. At Shoal Creek, we continue to make significant progress towards resuming targeted longwall production early in the first quarter of 2024, with the potential that this could be pulled forward into Q4 2023, as developmental coal production is ahead of target due to favorable geological conditions in the L panel area and installation of the new fit-for-purpose longwall is well underway. In the PRB shipments of 22.7 million tons were better than anticipated. Caballo produced 4.2 million tons, the most in the quarter since 2012. The NARM complex produced almost 16 million tons, similar to the third quarter last year and the mine has recovered nicely after tornado damage facilities in June. Higher production and lower maintenance costs allowed us to reduce costs by nearly 8% from the previous quarter while expanding margins by more than 70%. In other US thermal shipments were 4.2 million tons as expected and above the 3.8 million tons from the previous quarter due to increased customer demand. Our customers did see their inventories come down in July and August but September likely saw inventories increase again. Looking to 2024, we said comfortably with about 80 million tons priced at $13.77 a ton in the PRB and nearly 15 million tons priced at $51.18 per ton in other US thermal. In addition to our active operations, we continue to advance redevelopment efforts at North Goonyella, the key organic growth metallurgical opportunity within the portfolio. As anticipated, we achieved a significant milestone when we received the required approvals to reenter Zone B. Reentry has occurred, ventilation has been established and we are operating under normal mining processes. The conditions in Zone B are better than expected with no impediments to the installation of conveyors and access to our southern longwall blocks. Next steps in Zone B include the installation of new ground support, removal of the old conveyor system and installation of a new conveyor system to support commencement of development operations. This new conveyor system, which runs from the surface to the coal phase will result in improved reliability and capacity. New continuous miners and development equipment that were ordered in late 2022 are scheduled for delivery in Q1 2024 for the commencement of development coal. Since commencing redevelopment in North Goonyella in late 2022, the company has invested $75 million of the initial approved redevelopment capital expenditures, which includes further ventilation, equipment, conveyors and infrastructure updates. Overall, our operations had an outstanding quarter, enabling us to deliver consistent and predictable results and highlighting the benefits of our unique diversified portfolio. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thank you, Jim. In the third quarter, we recorded net income attributable to common stockholders of $120 million or $0.82 per diluted share and adjusted EBITDA of $270 million. The company generated $87.5 million of operating cash flow from continuing operations, which included an increase in working capital of $81 million, largely reversing the second quarter working capital benefit as expected. We also reached a $72 million cash settlement with the Department of Labor for Black Lung liabilities related to discontinued operations. The settlement discharged a $76 million legacy liability from the company's balance sheet and eliminated the almost certain risk of a much larger collateral requirement proposed in the new DOL rules. Through October 20, we have returned $307 million to shareholders, reduced our share count by 9.3% and have $713 million of remaining authorization under our share repurchase program. We remain steadfast in our commitment to return at least 65% of annual available free cash flow to shareholders. After the recently declared third quarter cash dividend of $0.075 per share based on year-to-date results, $103 million is currently available for additional share repurchases. Turning now to third quarter segment results. Seaborne thermal recorded $116 million of adjusted EBITDA. Higher production at Wilpinjong and a lower mix of Wambo underground production, reduced cost to $43.68 per ton below the low-end of our guidance. Despite lower price realizations from additional high-ash Wilpinjong production, adjusted EBITDA margins were approximately 40%. The seaborne metallurgical segment generated $79 million of adjusted EBITDA, cost per ton were below the low-end of guidance, mostly due to lower sales price sensitive costs. Lower-than-anticipated price realizations resulted from the widening price gap between premium hard coking coal and PCI coal. PCI achieved only 64% of the benchmark price in the third quarter, compared to 86% in the previous quarter. Despite the relative weakness in PCI coal prices, the segment reported 32% adjusted EBITDA margins. The US thermal mines produced $103 million of adjusted EBITDA, an increase of 32% over the prior quarter, benefiting from much stronger demand for PRB coal. The PRB mines generated $54 million of adjusted EBITDA and shipped 22.7 million tons, exceeding guidance by more than 8%. PRB margins improved substantially to $2.38 per ton, up from $1.38 last quarter due to higher shipments and lower maintenance costs. The other US thermal mines delivered $49 million of adjusted EBITDA. Shipments of 4.2 million tons were in line with expectations, while costs were a bit higher due to timing of repairs, contracted services and higher fuel costs. Taking a peak at our outlook, full year guidance has improved in a couple of areas. We are lowering seaborne thermal cost guidance $5 per ton to $45 to $50, as we expect full year volumes to be at the higher end of the 15 million to 16 million ton range. Our reclamation efforts continue to be efficient and we are reducing the expected cash required for final reclamation by $5 million to a range of $60 million to $70 million. Specifically for the fourth quarter seaborne thermal export volumes are expected to increase to 2.8 million tons. 500,000 tons are priced on average at $161 per ton and 1.5 million ton of high-ash product and 800,000 tons of Newcastle products are un-priced. Costs are expected to be $45 to $50 per ton. Seaborne metallurgical volumes are projected to be 45% higher at 2.2 million in tons due to the absence of a longwall move, continued development coal coming out of Shoal Creek and a reversal of the mine sequencing and sales timing that impacted the third quarter. 200,000 tons are priced at $164 per ton and the remaining un-priced volumes are expected to achieve 65% to 70% of the premium hard coking coal price. Costs are expected to be $110 to $120 per ton. In the PRB, we are anticipating shipments of 21 million tons, resulting in full year volumes at the high-end of our guidance range. In the fourth quarter, we expect average realized prices of $13.30 per ton and cost of $11.55 per ton. Other US thermal shipments are expected to be 4.1 million tons in line with the third quarter, resulting in full year volumes at the low-end of our guidance range. In the fourth quarter, we anticipate an average price of $51.40 and costs of approximately $43 to $44 per ton. In summary, we delivered another quarter of solid operating results and we expect to do the same in the fourth quarter. We eliminated a legacy liability and removed a potentially large liquidity requirement. We are excited about our organic growth opportunities in the seaborne metallurgical segment and will maintain rigorous attention to operating costs and capital allocation discipline. Operator, I'd now like to turn the call over for questions. Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Lucas Pipes with B. Riley Securities. Please go ahead. Lucas Pipes: Thank you very much, operator. Good morning, everyone. Jim Grech: Good morning, Lucas. Lucas Pipes: My first question is on Wards Well and I want to make sure I understand that the structure of that deal right? It's $136 million cash and then a royalty -- contingent royalty of $200 million. Does the $136 million of cash kind of -- does that get paid on closing? And then the $200 million, exactly what is that contingent upon? I think it says recovery of capital. What capital does that refer to which is really appreciate some additional color around the timing of initial and later cash flows? And then I have a second question on Wards Well. And that is when would you expect to mine that adjacent deposit? Thank you very much for your color on that? Jim Grech: Yes. Hi, Lucas, Jim Grech here. And first off congratulations on that beautiful [indiscernible] you had just a few days ago. Lucas Pipes: Thank you. Jim Grech: So some important thing… Lucas Pipes: Thank you. Jim Grech: So the $136 million is -- let me see if I can remember all your questions here. That will be paid on closing. We expect that to go up sometime in the first quarter of next year. And the $200 million of royalty again that's recovered -- we start paying that out after we cover a full project investment with -- in the project. So that's going to be some years into the future probably not if it is at the end of this decade if not into early -- into the 2030 time frame that we would expect that royalty to start being paid. Is that -- and I'm sorry you had a couple of other questions and I'd try to answer. Could you repeat them for me? Lucas Pipes: Yes. No that covered the first part. The second part was about that -- when you would expect to mine those reserves. Jim Grech: Yes. So what we have Lucas we literally closed on this deal just a few hours ago so we're happy we could do that and get it into the release here. And what we're looking at is optimizing the mining plan right now. The way it's laid out is we would still mine the North Goonyella reserves first. And what we're looking at is the timing of when we would then jump into the Wards Well reserves. They're contiguous. They're right up against our property. And so some of the different scenarios we're running is mine just a few panels in North Goonyella then jump right up to Wards Well. Or maybe mine even a few more panels in North Goonyella, which would take us out towards the end of the decade and then jump up to Wards Well. So we're looking at what gives us the best cost structure with the different mine plans. So it could be a few years out to maybe four or five years out depending on how we -- after we start longwall production right? So it depends on what gives us the best cost structure. What's very good about those reserves though Lucas is having that optionality is because it's the same call scene. We're using the same conveyor systems, the same longwall, the same development units. And it's just which direction we take the mine whether we go to the north of the south faster. We're not going down to a different scene down at a different elevation. And we have lots of optionality as far as the mine plan now. So again we're still looking at that. But a few years out after longwall starts would probably be the earliest we hit those reserves. And again, we're still -- we've just signed a deal. And you asked about the payment. Again that would come at closure which again we expect that to be in the first quarter. Lucas Pipes: Very helpful. Thank you for that color, Jim. My second question stays with North Goonyella. You raised the CapEx guidance this morning. We've seen obviously across the industry pretty material increases in capital costs. And at this stage how far down the rabbit hole are you in terms of derisking the capital for North Goonyella? I would appreciate a sense for your confidence level and were maybe some risks linger in this broadly inflationary environment. Thank you. Jim Grech: Yes. Lucas as you said, we're not immune to cost increases just like the rest of the industry. But given the relatively short time frame we start development mining here in the first quarter. We've got the miners on order to be delivered here in the first quarter. The conveyor structure that's all in place. There's still some more capital to be spent, but a lot of it has been ordered or on order or been spent already. A big part of the increase we have has been in labor cost which at this point is also capitalized. And so those have increased and we think we've captured that in our forecast. That's a big part of the change in the capitalization is on the labor expense. So given the short time frame and the amount that's already been ordered or spent we feel pretty good about those numbers and then being accurate based on all those reasons. Labor is still a bit of a wildcard but we think we've captured everything with the labor cost that we could see going forward. Lucas Pipes: Thank you, Jim. Very helpful. I'll squeeze one last one in. On the met coal side for 2024 a few moving pieces. I know it's a little early to ask for guidance. But just between development coal that -- the good update on Shoal Creek what is a reasonable range for your coking coal volumes in this transition period before North Goonyella is fully ramped? Mark Spurbeck : Yes, Lucas, it's Mark. We're not giving guidance for 2024 yet. Obviously Shoal Creek has done a really good job with some of the continuous minor development coal we're getting now and we expect that to be ramped back up beginning Q1 of next year. That did about 800000 tons last year. It's probably a high point with two million tons. They're probably somewhere in the middle there for next year. That's the big change. Lucas Pipes: And all the other operations no major changes that you would expect there? Mark Spurbeck: That's right. Lucas Pipes: All right. Thank you very much. I’ll turn it over. Best of luck. Mark Spurbeck: Thanks, Lucas. Jim Grech: Thanks, Lucas. Operator: [Operator Instructions] The next question comes from Nathan Martin with Benchmark Company. Please go ahead Nathan Martin : Hey, good morning everyone. Thanks for taking my questions. Maybe just one last one on North Goonyella. Now the project is fully approved. We've got the CapEx update. Can you guys give us any idea on the cadence of that spend? It looks like roughly $400 million or so left between now and 2026. And then also you mentioned something in the release about regulatory costs that increase there. I know you previously said the reentry was the major approval needed. But is there anything else from a regulatory perspective that we need to be mindful of? Thanks. Jim Grech: Yes. Nate, I'll answer the regulatory side of that and then Mark can address the cadence question that you had. In Australia the Safeguard Act was passed the legislation I think it was end of July which affected many industries in Australia but us included. And so we just got the detail of what that involves and the compliance costs that go along with it. So those regulatory impacts were something that we had to work into and do our forecast for the mine. That's the main one. There's been some other changes legislatively potentially that we see with the work rules and so on that we've accounted for but the main regulatory impact that we're talking about is that Safeguard Act that came into effect there late in the summer. Mark Spurbeck : Yes, Nate, we've got about $75 million spent left to date on the redevelopment at North Goonyella. I look at CapEx of about $150 million to $160 million for 2024 and 2025 million. The rest of that capital would come in after the longwall production begins at the beginning of 2026. Nathan Martin : Great color there guys. I appreciate that. And then maybe shifting over to the seaborne thermal segment. Great job on the costs there. Obviously full year cost per ton guidance down by about $5. I guess the question is what's driving that improvement? And is this kind of a new base we should think about going forward in 2024, or are there some other factors to consider? Mark Spurbeck : A couple of things Nate. One certainly hitting volumes on costs have been very helpful in seaborne thermal. The Aussie dollar is historically weak. That's also helping us on the costs. We saw costs come down quarter-over-quarter. Some of that was lower sales price sensitive costs and the higher production. And we're not providing guidance for 2024 just yet. We'll do that next quarter. Nathan Martin: Okay. Thanks for that Mark. And then maybe at the U.S. thermal business side of the house. Jim I appreciate your update on 2024 thermal sales and price there. Should we kind of assume you guys are close to sold out at those levels? I think you said PRB 80 million tons at $13.77 and other thermal at 15 million at $51.18. Jim Grech: I think if you look at the guidance ranges we're providing this year for the different markets that can give you a pretty good range of what we think about for the tons for next year at this time and where we sit with these sales within those guidance ranges. Nathan Martin: Okay. Just to be sure so you're saying maybe somewhere within this year's guidance ranges for 2024 is not a bad place to start. Jim Grech: Yes and maybe towards the higher end of the guidance ranges. Nathan Martin: Okay. Good. Very helpful. I’ll leave it there. I appreciate the time. Best of luck in the fourth quarter. Jim Grech: Thanks, Nate. Operator: With no further questions this concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks. Jim Grech: Thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I'd also like to thank our customers investors insurance providers and vendors for your continued support. Operator that concludes our call. Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may all now disconnect.

Operator: Welcome to the Peabody Second Quarter Earnings Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note that this event is being recorded. And at this time, I would now like to turn the conference over to Karla Kimrey, Vice President of Investor Relations. Please go ahead. Karla Kimrey: Good morning. And thank you for joining Peabody’s earnings call for the second quarter of 2023. With me today, our President and CEO Jim Grech, CFO Mark Spurbeck and our Chief Marketing Officer Malcolm Roberts. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there along with our public filings with the SEC. I'll now turn the call over to Jim. Jim Grech: Thanks, Karla. And good morning, everyone. In the second quarter of 2023, our unique diversified portfolio allowed us to successfully execute against our plan while operating in a volatile market environment. In the quarter, we initiated our annual shareholder return program with a fixed dividend and a meaningful share buyback plan. We returned $262 million through our shareholder return program in the last quarter. For address the markets, I want to thank our global employees for their continued focus on working safely and efficiently. Now turning to the global coal markets, seaborne thermal coal markets remain volatile, with prices declining during the second quarter, comparatively high coal and natural gas inventories in the northern hemisphere following an unseasonably warm winter have weighed on demand leading to a weaker pricing environment for high energy thermal coals. China's year-to-date thermal coal imports point to significant increases in consumption of seaborne thermal coal, with an annual thermal coal import run rate of approximately 400 million tons per year, representing approximately a 90% increase over 2022 levels. India too has shown signs of improved economic activity during the first half of 2023 and with it increased power demand and elevated coal imports. Overall, demand for seaborne thermal coal is robust and supply remains constrained across major supply regions. We anticipate at the onset of peak summer energy demand in the northern hemisphere followed by a restocking in preparation for winter will contribute to a normalization of inventory levels, providing support to seaborne thermal coal markets. Within the seaborne metallurgical market, global crude steel output during the quarter was variable with interruptions that European blast furnaces, offset by notable year-on-year crude steel production growth in both China and India. Metallurgical coal supply has remained constrained primarily due to residual impacts of wet weather events in Queensland during the first quarter of 2023. The rate of exports from Queensland remains below historical rates and premium hard coking coal pricing remains elevated finishing the quarter at $233 a ton. The outlook for the metallurgical coal market remains positive with subdued seaborne supply combined with anticipated increases in import demand for steelmaking raw materials along with improving crude steel production rates in Europe, North Asia and India. In the United States overall electricity demand decreased nearly 4% year-over-year negatively impacted by weather. Through the six months ended June 30, 2023, electricity generation from thermal coal has declined year-over-year due to low gas prices and nearly level renewable generation. Coal inventories have increased approximately 50% during the six months ended June 30, 2023. Natural gas prices have recovered modestly from the lows of earlier this year with U.S. natural gas prompt pricing at $2.65 per mmBtu. The EIA is currently forecasting U.S. natural gas prices to average $2.80 per mmBtu in the second half of 2023 up from the $2.40 per mmBtu in the first half of the year. Overall, near-term demand for U.S. thermal coal is anticipated to improve in the third quarter in comparison to the second quarter. Now moving on to our operating segments. As expected our seaborne thermal coal exports came in at 2.6 million tons higher than the prior quarter as a Wambo Longwall move was completed and wet weather which impacted the first quarter was abated. Segment cost per ton were aligned with the first quarter as higher production was offset by the timing of equipment repair and maintenance costs. Our seaborne met coal shipments were stronger than expected a 2 million tons due to strong sales out of the CMJV complex. In the second quarter, we had good success with our operations at Shoal Creek, as we recovered from the first quarter fire. During the second quarter, we're able to seal off the two longwall panels in the J panel area of the mine. We resumed with development coal production and the new L panel area were anticipate better mining conditions. A new longwall kit for the mine is expected to be delivered by the end of the year. In the PRB, shipments were lower than anticipated. Shipments are impacted by low costs -- low customer demand due to low natural gas pricing, high coal inventory levels and the June tornado event at NARM. In addition to basin had an abnormal amount of rainfall, which caused a slowdown at some of our operations. The second quarter is typically the wettest in the basin, which also impacts the transportation corridors. In other U.S. thermal shipments are impacted by lower customer demand as a result of low natural gas prices and high utility inventories. Looking solely at our sold position here the volume should increase in the second half. The consumption of PRB coal has been down given low natural gas prices and generally unfavorable weather conditions in the first half. We are working with our customers to be responsive to their needs while retaining the value in our contracts. Our adjusted guidance reflects our current assessment of sales going forward taking into account the current U.S. market conditions. In addition to our active operations, the company continues to advance redevelopment efforts at North Goonyella with key project milestones and critical cold path items on track. Activity today to have included procuring equipment, refurbishment and replacement of surface infrastructure Zone A remediation, completion of drilling program for Zone B re-ventilation advancing work necessary to reenter Zone B. The next significant milestone re-ventilation and reentry of Zone B is currently targeted for mid September subject to regulatory approval. Since commencing redevelopment in North Goonyella in late 2022, the company has invested $53 million of the initial approved redevelopment capital expenditures, which includes further ventilation, equipment, conveyors and infrastructure updates in anticipation of reaching development coal production subject to regulatory approvals in the first quarter of 2024. Before I turn it over to Mark, I would like to address a tornado event that impacted my NARM. On June 23, our North Antelope Rochelle Mine and the PRB was struck by an EF-2 tornado. Six people that have to temporarily go to the hospital but fortunately, no one was critically injured. While we are back to full shipments, we did have considerable damage to the surface buildings. We appreciate all our employees efforts in returning the mind to full operations. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim. In the second quarter, we recorded net income attributable to common stockholders of $179 million or $1.15 per diluted share and adjusted EBITA of $358 million. The second quarter results included a $34 million charge for the write-off of certain underground development and equipment at Shoal Creek and property losses related to the tornado at NARM. The company's leading diversified portfolio of mines generated $353 million of cash flow from operations enhanced by $109 million working capital benefit, which will largely reverse next quarter. With our balance sheet built to withstand the volatility and lower prices we saw in the second quarter, we were pleased to return $262 million to shareholders, including a cash dividend of $11 million and share repurchases of $251 million. This reduced our share count by 8.3% in just one quarter. We currently have 749 million of remaining authorization under the 1 billion share repurchase program. We remain committed to returning at least 65% of annual available free cash flow keeping returns right sized based on operating and financial performance. After the recently declared second quarter cash dividend of $0.075 per share at least $142 million remains available for shareholder returns expected to be used for additional share repurchases. Turning now to the second quarter segment results. Seaborne Thermal recorded $198 million of adjusted EBITA 20% higher than the prior quarter despite a significant decline in the average Newcastle benchmark price. Higher production rates drove costs to the low end of our guidance range and higher export shipments resulted in adjusted EBITDA margins of approximately $50 per ton. The seaborne metallurgical segments generated $103 million of adjusted EBITDA shipments of 2 million tons exceeded expectations and were over 50% higher than the previous quarter, due to higher sales from the CMJV as they recovered from first quarter rains. Costs were $13 per ton lower primarily due to higher production and lower sales price sensitive costs. The U.S. thermal mines produce $78 million of adjusted EBITDA impacted by fewer shipments due to low natural gas prices and higher utility customer inventories. The PRB mines generated $26 million of adjusted EBITDA. Tons sold for 3.1 million tons lower than the prior quarter. We lost approximately 1 million tons at the end of the quarter due to their tornado that struck the NARM mine and volume on two requirements contracts were 1.2 million tons lower than expected. The other U.S. thermal mines delivered $52 million of adjusted EBITDA. Tons sold decreased by approximately 700,000 tons compared to the prior quarter, but a laser like focus on operations drove costs down to less than $40 per ton maintaining adjusted EBITDA margins of 26%. With the first half complete, we've updated our outlook for the remainder of the year. Seaborne thermal volume has increased 500,000 tons to 15 million to 16 million tons due to higher expected production at Wilpinjong. Seaborne metallurgical volume is expected to be 500,000 tons lower at 6.5 million to 7.5 million tons due to less than previously anticipated production at the CMJV and Shoal Creek. PRB shipments have been revised downward to 80 million to 85 million tons reflecting the impacts of low natural gas prices, utility inventories and mild weather to-date in major coal generation regions. For similar reasons other U.S. thermal volumes have been reduced to 16.5 million to 17.5 million tons. We should note that committed sales volumes exceed our thermal guidance given the continued low natural gas price and rail limitations, we expect customers in limited situations to request deferral of volume into next year. We will only entertain such requests if we preserve the full economic value of existing commitments. Specifically for the third quarter, seaborne thermal export volumes are expected to increase to 2.7 million tons approximately 300,000 tons are priced on average at $181 per ton and 1.4 million tons of high ash product and a million tons of Newcastle product are unpriced. Costs are expected to be lower quarter-over-quarter at $45 to $50 per ton. Seaborne metallurgical volumes are projected to be lower than the second quarter at 1.5 million tons due to a longwall move at metropolitan. 200,000 tons are priced at $216 and the remaining unpriced volumes are expected to achieve 70% to 80% of the premium hard coking coal price index. Lower premium hard coking coal prices and a widening gap to PCI coals are anticipated to result in more favorable price sensitive costs, lowering expected costs to $115 to $125 per ton. In the PRB, we are anticipating shipments to increase to 21 million tons at an average price of $13.80 per ton and cost of approximately $11.75 per ton. Other U.S. thermal shipments are expected to increase from the second quarter to approximately 4.2 million tons an average price of $50.50 per ton and cost of approximately $41 per ton. In summary, we have a unique diversified portfolio of assets and the necessary financial flexibility to succeed in all markets. We will maintain rigorous discipline to capital allocation and expect to return at least 65% of annual available free cash flow to shareholders. Operator, I'd now like to turn the call over for questions. Operator: Thank you [Operator Instructions] At this time, we will take our first question from Lucas Pipes with B Riley. Please go ahead. Lucas Pipes: Thank you very much, operator. Good morning, everyone. And great to see those capital allocation to shareholders during the quarter. Jim Grech: Thanks, Lucas. Lucas Pipes: And I wanted to start my first question on that point of shareholder returns, you know that the $142 million that remain available. So we kind of think of as those being used for buybacks over the next three months. So it's kind of you deploy $142 million to buybacks between now and the time you report Q3 results and then essentially when those Q3 results get announced, you reup it with whatever then free cash 65% of the free cash flow during available free cash flow from Q3 results that kind of the cadence now going forward? Mark Spurbeck: Yes. Good morning, Lucas. And thanks for hanging in us. And I know what is a very, very busy earnings call day. So appreciate the questions. With regard to the shareholder return program, you are correct. We remain committed to returning at least 65% of available free cash flow on an annual basis. And you'll see the calculation in the earnings release that sums up to that. Certainly last quarter, we did above the 65%. Lucas Pipes: Got it. Got it. Okay, that's -- but it's not like it'd be more than $142 million over the next three months in terms of buybacks, you would kind of reconvene in three months look at Q3 results and that would determine the forward pace? Mark Spurbeck: Again, we're going to return at least 65% and, we don't share any specific details. It's fair to think of it that way Lucas, but I'll refer you to last quarter where we didn't do a bit more than the 65% in the last quarter. But we will [indiscernible] it up each quarter and show 65% on a year-to-date annual basis. Lucas Pipes: Got it. That's clear. That's clear. Thank you for that. And then turning to operations, good to see the increase in the thermal guidance for the year. I wondered if you could maybe elaborate a little bit on the key drivers for that. And then on Shoal Creek, should we think of that mine as a one longwall mine going forward? Thanks for your color on that. Jim Grech: So I'll talk about Shoal Creek first. And hi, Lucas, Jim Grech, here. Good to hear your voice again. Lucas Pipes: Same here. Thank you, Jim. Jim Grech: Yes. So the -- we have the new longwall coming in delivery has already started. So we're expecting to get that delivered here by the end of this year and have it operating so very early into 2024. The intention prior to the mine fire was to have the two longwalls operating at the mine. And we saw the second longwall, it's behind the sealed area. And we have to wait until we have permission to enter back into that area Lucas to see the status of the equipment and what we can do with it? Can we start operating again, in that panel? Do we have to extract the longwall? So I would say the timing and the certainty of the second one is in question. The first one the new longwall certainly is on track to be installed. So I would say by the end of this year, we're certainly a one longwall mine. Next year, we're for sure one longwall mine with the potential for two but we really don't know till we get back behind those seals, which is at best a couple months away. Mark Spurbeck: And maybe I'll follow up on the seaborne thermal. A couple of things for the additional terms. More higher ash tons at a Wilpinjong in the Wambo Open-Cut joint venture are doing extremely well. So volumes are up there. You also note pretty good reduction in costs for the next quarter. And again, I think it's Wambo Open-Cut the production going up and cost doing better as well as some additional Wilpinjong tons there. And also some lower sales price sensitive costs. Jim Grech: And, Lucas just if another point I wanted to make on Shoal Creek was, even though we're looking at the one longwall, it's in the L panels where we have started our development coal mining and the coal seams look very good. Very good conditions for us right there. So, we've given -- we've talked about the output of the mine before and I'm confident with the one longwall mine in the mining conditions we're in, there's going to be no drop-off from our expectations from the production levels that we've had in the past, we're going to be again, the L panel has some very, very good mining conditions from what we're seeing so far. Lucas Pipes: Very helpful color on both fronts. Thank you for that. And then a quick follow up on the JV and I looked at the cash flow statement for the quarter and contributions to JV were roughly equal to distributions from the JV. And that's -- is that only Middlemount or does that also include Wambo and if it is Middlemount, we expect maybe additional cash to come in from that side would appreciate your perspective and clarification on that point. Mark Spurbeck: Yes, Lucas, it is only Middlemount there. So not a lot of cash flow from Middlemount currently, I'd expect the results to be kind of similar in the second half of the year as well, certainly not what we saw last year. Lucas Pipes: All right. Well, I have more questions, but I'll jump back in the queue. Thank you very much. Jim Grech: Thank you. Operator: [Operator Instruction] Our next question here will come from Nathan Martin with The Benchmark Company. Please go ahead. Nathan Martin: Hey, good morning, everyone. Thanks for taking my questions. Jim Grech: Good morning, Nathan. Nathan Martin: Maybe I'll just start on North Goonyella. I Appreciate the update there in the release, could we maybe get a refresher on the expected spending and timing of that spending on the project as you guys move towards anticipated longwall production in 2026? And then what and when are some of the regulatory hurdles you expect? Jim Grech: Yes, Nathan, the first we've got it in two tranches of spending as we've discussed in the past, the first one is $140 million, which we're spending this year a lot of that this year and early next year. And the -- and what we're seeing is the major regulatory hurdle that we have to overcome or I should say overcome to get approval of is the permission to reenter the Zone B area which is the sealed area. And at the combination of degassing that area and the ventilation of that area. And we expect to be able to reenter Zone B in sometime in September. That is the major regulatory hurdle that we have to get through. So after we can reenter Zone B and we get a good assessment of the situation there. Then we have to go back to with our board and get the approval of spend the remaining it's approximately $230 million to $240 million. And then that would get us into full longwall production there early in 2026. So, again, I just like to reiterate the major regulatory hurdle that we have to get through is the permission to reenter Zone B and we're looking for that to come sometime in September of this year. Nathan Martin: Great, Jim, appreciate that refresher there. And then maybe just shifting gears over to the domestic thermal side of the house. You did obviously update your guidance there. You talk a little bit about some of the conversations you're having with utility customers. Do you guys believe at least at this point that that guidance fully incorporates potential domestic thermal deferrals or are you still having ongoing conversations and negotiations? Jim Grech: Nate, we believe that fully encompasses all of the potential deferrals in the guidance that we've shown there. Nathan Martin: Hey got it Jim. And then actually what have you as well, in the past you've been helpful kind of given us an idea of where you guys are committed for 2024 in PRB and other thermal any updates you can give us there, maybe what percentage of tons are committed there and also what base would be great as well? Jim Grech: Yes, it's about 70% committed at midpoint and guidance, I'd say there hasn't been a specific change over the quarter. That was specifically done on purpose given the fact that it's been a pretty slow market, declining price market. So we'll look to see more coming through here in the next quarter as the market picks up. So again 70% on the Illinois Basin and probably about 85% in the PRB for next year. Nathan Martin: Perfect. Appreciate that up to their mark. And then maybe just one kind of bigger question -- bigger picture question for you Jim to wrap up. There's some M&A opportunities out there a few met coal assets in Australia up for sale. I know you'd like we can't make specific comments regarding Peabody and M&A. But if you kind of remind us how you guys think about and rank your potential purchases of maybe seaborne net assets or thermal assets and how would you kind of compare those two maybe the progress you're making on reopening North Goonyella? Thanks. Jim Grech: Nate, what I would say is in orders of prioritization organic growth investing in our own assets, extending leases, investing in equipment to bring down costs, increase efficiencies, those always have the best returns for our shareholders, and those always our number one emphasis or number one priority, and that's what's exhibited by North Goonyella. Then secondly, if we do get into M&A not saying we are -- we aren't -- we've stated many times, and it hasn't changed, that our focus is on the seaborne markets, we see the seaborne markets as growth markets in demand in both metallurgical and thermal. And we have more -- much more of a focus on the metallurgical seaboard markets, but we certainly would look at both markets for potential growth in the future. Nathan Martin: Great. Very helpful. I appreciate the time, guys. Best of luck in the second half. Karla Kimrey: Thanks so much. Jim Grech: Thank you, Nate. Karla Kimrey: Next question. Operator: Our next question will come from Lucas Pipes with B Riley. Please go ahead on your follow up. Lucas Pipes: Thank you very much for taking my follow up question. It's a quick one. In terms of hedges on the thermal coal side, I may have missed it. But I didn't see a disclosure in the press release this morning. And so I wondered if you could remind us what's outstanding there. And I know there was cash collateral requirement in the past as those hedges roll-off. Could there be cash coming back here in the third quarter from that side would appreciate just discussion and I think we're close to the end. So it would be good to just make sure I have everything in my model as that program concludes? Thank you. Mark Spurbeck: Yes, Lucas, the program has fully been unwounded June 30. So all the initial margin was returned, I think was about $11 million in the second quarter. And all the variation margin was returned by a higher realized prices and taken into our EBITDA results. So programs fully unwound and we're no longer got hedges for coal sales. Lucas Pipes: That's very good to hear. That's it from now. I appreciate the color. And best of luck to you and to team. Jim Grech: Thanks, Lucas. Operator: And with that, there are no further questions. So I'd like to turn the conference back over to Mr. Jim Grech for any additional closing remarks. Jim Grech: Thanks. Thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I'd also like to thank our customers, investors, insurance providers and vendors for their continued support. And finally, I'd like to thank everyone in the [Gillette] community who responded during the tornado at NARM. Operator, that concludes our call. Operator: The conference is now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines. And have a wonderful day.

Operator: Good day, and welcome to the Peabody First Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Karla Kimrey, Vice President of Investor Relations. Please go ahead. Karla Kimrey: Good morning, and thank you for joining Peabody’s earnings call for the first quarter of 2023. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you’ll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. Now, I’ll turn the call over to Jim. Jim Grech: Thanks, Karla, and good morning, everyone. In the first quarter of 2023, Peabody’s diverse portfolio produced another strong quarter of financial results. For the past 18 months, we have aggressively been de-leveraging our balance sheet and we remain committed to a disciplined approach for capital allocation. In April, we announced a shareholder return program that will consist of a fixed dividend component, share repurchases and variable dividends. We are starting a program with a heavy weighting towards share repurchases and expected transition to a plan including share repurchases, variable dividends, and fixed dividends. Before expand on the markets and operations, I would like to thank our global employees for their continued focus on working safely and efficiently. Without the dedication of our talented workforce, we would not be in the strong financial position we are in today. Now, turning to global coal markets. Global thermal coal prices stabilized in March and recently showed improvement amid supply disruptions in Colombia, South Africa, and ongoing strong demand from India, China, and ASEAN countries. Although shoulder seasoned conditions and healthy fuel stocks are influencing demand elsewhere. China has ended its unofficial ban of Australian coal imports providing additional demand for Australian thermal coal, which has resulted in Australian import rates of over 4 million tons per month. Domestic coal production and renewable generation have been strong to start the year. However, import demand has been higher year-over-year as overall coal demand has been strong. While it is early in the year, the first quarter of 2023 run rate of imports this close to an all time high of approximately 400 million tons. India too has shown signs of improved economic activity early in 2023, resulting in increased power demand, and elevated coal imports despite elevated domestic production. Overall, demand for seaborne thermal coal is robust and supply it remains constrained across the globe. However, we acknowledge that lower LNG prices and high coal inventory levels in Europe are short-term headwinds in terms of pricing across the globe. Within the seaborne metallurgical coal market, the quarter was characterized by ongoing volatility as global macroeconomic turbulence, counteracted improving demand, and further weather induced supply disruptions in Australia. Met coal price volatility continued and early March increases eroded in the second half of the month amid macroeconomic sediment. To the lowest level since mid-January, albeit remaining healthy at around $250 per metric ton for headline hard-coking coal. In the United States this quarter, natural gas prices have weakened further due to near record gas production levels. U.S. natural gas prompt prices are approximately $2.25 per mmBtu. EIA is currently forecasting Henry Hub natural gas spot prices to increase above $3 per mmBtu during the second half of 2023 in response to higher feed end volumes to LNG exports while natural gas production rates remain flat. Overall, near-turn demand for U.S. thermal coal is expected to be muted as a result of low gas prices and stronger renewable generation. However, as summer weather brings stronger total low demand and increased LNG export pressure gas prices, coal demand has the potential to increase in the second half of 2023. Now, moving on to our operating segments. Our seaborne thermal segments first quarter exports were stronger than anticipated due to better than expected production out of [indiscernible] As a result of more efficient mine sequencing and Wambo Open-Cut as a result of improved productivity. Cash cost per tons were lower than anticipated due to the increased coal production as well as lower overall spend. Our Seaborne met production was down from the fourth quarter due to lower volumes at Shoal Creek and rail and transport congestion on Australia due to heavy rains earlier in the year. On March 29, 2023, the Shoal Creek mine experienced and the J2 longwall panel, a fire involving void fill material utilized to stabilize the roof structure of the mine. All mine personnel were safely evacuated from the mine. MSHA has allowed mine rescue equipped personnel into the mine at various times to assess the situation and perform work in preparation for installing temporary seals. On April 26, MSHA approved a temporary sealing program limited to only the affected underground area, which consists of the J2 panel and previously mined J1 panel. At North Goonyella, we continue to advance redevelopment efforts and expect to spend approximately $120 million as planned in 2023. As a reminder, North Goonyella is a premium grade hard coking coal longwall operation in Queensland, Australia with over 70 million tons of reserves. This operation’s grade of coking coal is considered to be the cornerstone of coking coal feedstocks globally. North Goonyella is expected to meaningfully increase Peabody’s metallurgical coal production and generate approximately 25% returns at historical long-term prices in this initial phase. In the U.S., PRB sales volumes recovered due to higher customer nominations and better rail performance. We are able to pull forward some maintenance into the first quarter to improve truck availability and lower cost for the remainder of 2023. Our other U.S. thermal mines continue to perform well as expected. We are still essentially fully committed at our U.S. domestic operations for 2023, and the railroads are showing improvement in their service levels. While we are sold out, we are working with our customers to be responsive to their needs while retaining the value in our contracts. Our guidance reflects our current assessment of sales going forward, taking to account the current U.S. market conditions. I’ll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim. In the first quarter, we recorded net income attributable common stockholders of $269 million or $1.68 per diluted share and adjusted EBITDA of $391 million, a nearly 20% increase from the prior year quarter. We reported operating cash flow of $386 million and had $892 million of cash at March 31, after completing the pre-funding of all long-term mine closure and reclamation and adjusting cash collateral for other performance obligations. More importantly, we delivered on our commitments to amend the surety agreement and eliminate the bank letter of credit facility. With our balance sheet initiatives complete, we were pleased to announce a comprehensive shareholder return program. The board has authorized a $1 billion share buyback program and implemented a regular quarterly cash dividend of $0.075 per share for current yield of approximately 1.25%. Under the program, first quarter performance will result in $170.2 million being returned to shareholders, including nearly $160 million for share buybacks or about 6.6 million shares at the current price, better than 4.5% of outstanding common shares. Turning now to the first quarter segment results. Seaborne Thermal recorded $164 million of adjusted EBITDA. As expected, export shipments were lower than the prior quarter due to a longwall move at Wambo, but exceeded expectations by 300,000 tons due to higher than anticipated production from both Wilpinjong and the Wambo Open-Cut joint venture. Higher production rates help drive cost to a lower than expected $51 per ton. With the winding down of the legacy hedge program, we realized an average export price nearly the same as the fourth quarter, despite a 33% decline in the average New Castle benchmark. Overall, the segment reported a 47% adjusted EBITDA margin. The Seaborne Metallurgical segment generated $90.8 million of adjusted EBITDA. As expected volumes were lower than the prior quarter due to heavy rains in Queensland and the challenging conditions at Shoal Creek. The average realized price was flat quarter-over-quarter, while cost increase to $151 per ton due to lower production, resulting in adjusted EBITDA margins of 31%. The U.S. thermal mines delivered a $100 million of adjusted EBITDA. 21% better than the prior quarter, despite challenging market conditions. The PRB mines generated 35.8 million of adjusted EBITDA. Revenue per ton was a record $13.89 as we continue to benefit from the roll off of lower price contracts. 22 million tons were shipped on forecast, while costs of $12.26 per ton were above expectations as we opportunistically pulled certain equipment repair costs forward into the first quarter. The other U.S. thermal mines delivered 64.2 million of adjusted EBITDA. Production and costs were both in line with expectations resulting in adjusted EBITDA margins of 26%. Now turning to the balance sheet. At March 31, we had $892 million of cash. During the quarter in connection with the surety amendment and elimination of the bank letter of credit facility, we increased restricted cash and collateral to 937 million, including 760 million for reclamation and mine closure and 177 million for other performance obligations such as long-term port and rail commitments, black lung workers’ compensation, and legacy pension requirements. Importantly, the revised surety agreement eliminates a substantial liquidity risk by establishing a collateral cap of 56% of the bonded amount and guarantees Peabody’s access to third-party bonding through December 31, 2026. Combined, we believe we have positioned Peabody with the best balance sheet in the industry, free from uncertain credit markets and built to withstand market cycles. Looking forward, we will maintain rigorous discipline to capital allocation, expecting to return at least 65% of available free cash flow to shareholders will never receive the company’s financial resiliency. Lastly, let’s turn to our outlook. Our full year guidance remains unchanged with updates limited only to priced positions. As a reminder, Shoal Creek was transitioning in 2023 until production ramped up later in the year with better conditions. Currently higher than anticipated production from Metropolitan is partially offsetting lost production from Shoal Creek. For the second quarter, we are expecting improvements in our Seaborne segment’s performance and another consistent reliable quarter from the U.S. thermal segments. Seaborne Thermal export volumes are expected to be 500,000 tons higher as Wambo Underground completed a longwall move in the first quarter and Wilpinjong continues to produce at first quarter’s heightened levels. Approximately 1 million tons are priced on average at 243 and 1.2 million tons of high ash product and 400,000 tons of Newcastle product are unpriced. Costs are expected to remain at $50 to $55 per ton. Seaborne metallurgical volumes are projected to be 400,000 tons higher as CMJV shipments recover from the impacts of heavy rains that impacted logistics in Queensland during the first quarter. Above 500,000 tons are priced on average at 244 and remaining tons are expected to achieve 75% to 80% of prevailing hard coking coal prices. Costs are expected to decline to $135 to $145 per ton. In the PRB, we are projecting shipments of 21 million tons priced on average at $13.70. And costs are expected to be $12 per ton. Full year price volumes of 91 million tons are now 1 million tons less than previous expectations better reflecting contract minimums given market conditions. Other U.S. thermal volumes are expected to be 4.3 million tons at an average price of $52.50 and cost of $41 per ton. Full year priced volumes of 18 million tons are also now 600,000 tons less. We previously anticipated annual cash interest payments of 60 million inclusive of surety bond fees with a substantial increase in restricted cash and collateral generating a conservative U.S. treasury like yield. We no longer anticipate significant net cash interest for the year. In summary, the company continued to generate substantial free cash flow. We amended and extended the surety agreement. We positioned Peabody with the most resilient balance sheet in the industry. We initiated a robust shareholder return program and continued to invest in long-term growth at North Goonyella. I’d now like to turn the call over for questions. Operator? Operator: [Operator Instructions] The first question today comes from Lucas Pipes with B Riley. Please go ahead. Lucas Pipes: Thank you very much, operator. Good morning, everyone. And congratulations on the commencement of the capital return program that job really well done. My first question is in regards to the cadence of met coal [ph] shipments over the course of this year, and then also the cadence of your met coal costs. So when I kind of back into the full year guidance versus what you’ve done in Q1 and what your outlook is for Q2, we’re looking at a pretty meaningful ramp up in volumes and concurrent decline in cost. And I just wondered if you could provide a little bit more color as to the key drivers there, where you would expect volumes to ramp up within your portfolio. Thank you very much for your color on that. Jim Grech: Good morning, Lucas. And thanks for the comments on the shareholder return program. We’re excited to finally kick that off. You’re right. As we announced at the beginning of the year, the first quarter was going to be less than rateable in our lowest production quarter for the year. We do expect that to consistently improve largely given improved performance at the CMJV as well as the Wambo Underground was undergoing a longwall move in the first quarter. So that really drove first quarter volumes lower. We’re still on target in our range for seaborne met clearly with some uncertainty around Shoal Creek. There’s a potential to be at the lower end of that range. But we’ll see how that plays out through the remainder of the year. Lucas Pipes: Thank you for that. And on Shoal Creek, the temporarily sealed section is that the rounding, the existing operating longwall at Shoal Creek, or would that be adjacent to it? I’m just trying to get a better sense for where the affected areas are and what it could mean for production over the course of this year. I know you have a second longwall on schedule for later this year. Any comments regarding the start of that one? Thank you very much for your color on it. Jim Grech: Yes. Hi, Lucas. It’s good to hear from you again. And I’ll talk about the ceiling and then the other longwall, but I just want to start out by saying that safety dictates every step that we take forward at Shoal Creek. And we’re working very closely with MSHA in this regard. And because that’s our top priority, the path forward that I’ll talk about here can have a lot of variability as we react to conditions in the mine. And if needed, we will reset our path to the safest way to proceed. But I will say that the conditions that the mine have been relatively stable, which has been great. And so with that in mind and the potential for variability, though, our current path forward right now is, as you said, we’re going to put in temporary seals, which they can be put in very quickly, and there’s not as extensive construction process as a more substantial set of seals. And because of that, putting them quickly we can also pick out a localized area of the mine to do that with which as you said, Lucas, that’s just in the J2 panel, and the seals will cut off the J2 panel and the already mined J1 panel area. And so we are in the mine actively doing that right now. I will say that MSHA undermined rescue apparatus and attended by mine rescue personnel. We have been in the mine numerous times since the incident has occurred. So again, I’m going to get back to the relatively stable conditions in the mine. So we’re putting the seals in and in this localized area if all continues to go well, we expect those temporary seals to be put in today – finalized today. And then the plan after that to going forward, is to then flood the area with nitrogen with the goal of eliminating any existing sources of potential ignition. So this whole process could take a few weeks to getting the seals in, putting the nitrogen in, and getting MSHA and us both getting comfortable with the conditions in the mine. After that we’re going to work with MSHA to assess the situation and with MSHA’s guidance, how best to safely proceed in the mine. But the key to the new longwall coming into the mine, Lucas, as you’ve noted, is the seals that we have, the temporary seals are just in the J2 and J1 area. This plan isolates this part of the mine, but if all goes well, again, working with MSHA, we still should have access hopefully to the rest of the mine, which is most importantly the L panel area. So the L panel area, we’ve already – the development is complete already for the new longwall. And we are on schedule as we have been the same schedule to arrive sometime in Q3 and get into much better mining conditions in the J panel. So again, a lot of variability, but the plan is contain isolated to the J1 and J2 still have access to the rest of the mine, most importantly, the L panels where development is done. And then the new longwall will come in the third quarter. Well, that’s the outlook as it stands at the moment. Lucas, of course, subject to change, but that’s where we’re at right now. Lucas Pipes: That is a lot of color. I appreciate that. I’ll turn it over for now. Thank you very much. Jim Grech: Next question, please. Operator: The next question comes from Nathan Martin with The Benchmark Company. Please go ahead. Nathan Martin: Hey, good morning everyone. And I’ll echo Lucas’ comments. Congrats on getting the surety agreements completed, and then pivoting to shareholder returns. Jim Grech: Thanks, Nathan. Nathan Martin: Maybe Mark for you in regards to the available free cash flow calculation you guys laid out this morning, how should we think about modeling that non-controlling interest and restricted cash, line item going forward is the expectation that they might be fairly consistent or could they be lumping – lumpy, excuse me, any guidance there would be very helpful? Thanks. Mark Spurbeck: Sure. Two things. First on the distributions to non-controlling interest. That’s a minority interest in the Wambo complex 25%. So that’ll be variable based on results from the Wambo mine. And then on the restricted cash and collateral, with the progress we’ve made in first quarter, we’re fairly comfortable with that number. There is some variability. We’ll certainly manage it. But we don’t expect significant changes right now outside of a change in law. New bonding requirements are also a possibility that would increase that. But don’t expect significant changes in that restricted cash and collateral here in the immediate future. Nathan Martin: Got it. So that $40 million run rate, plus or minus is a good way to think about that then? Mark Spurbeck: Yes, no, the – just to be clear Nathan, the amount [ph] we have on the balance sheet now is good. And I’m not expecting an increase here over the next couple quarters. And we’ll look to continue to manage that throughout the year. But the biggest risk is changes to laws and regulations. Nathan Martin: Okay. Got it. So Mark, to be clear that $43 million that is in your calculation of available cash – free cash flow, that probably goes closer to zero because you don’t expect a change in the overall number. Mark Spurbeck: That’s right. I don’t expect a significant change over the next couple of quarters. Nathan Martin: Got it. Okay. Makes sense. Appreciate that clarification. And also I have you can – can we touch again on the other operating cost line item? I know I’ve asked about the last couple quarters had been running at $30 million a quarter, I think the back half of last year, you had mentioned you expect another decent quarter. Again, it was actually up $26 million quarter-over-quarter it looks like maybe driven by some of the sales of logistics capacity you guys called out. But it’d be great to get your thoughts on how that line could look over the next few quarters. Mark Spurbeck: Sure. You’re right. The sale or assignment of excess port and rail capacity that was a one-time gain of $19 million in the first quarter, wouldn’t expect that to repeat. And then the other big item was about $34 million in trading operations. You referenced the previous two quarters that that was basically realizing higher prices in some of the hedged tons and the delay in the delivery of the physical tons and it with an improving price environment, we actually had gains there. Those were real and consistent with our operations. In the first quarter of this year that $34 million gain is largely based on some whole purchases that coal trade made as part of our blending operations. They were able to sell that at prices – realize prices higher than what they purchased those coals at. That’s a timing thing. And with a declining price environment we’ve experienced here in the first quarter, we expect that to reverse here in the second quarter. So that’s kind of a one-time thing that’ll reverse out in the next quarter or two. Nathan Martin: So to wrap that up, maybe that that $50 million-ish plus this quarter kind of gets closer to zero to $5 million, just any indication on an absolute value. Mark Spurbeck: Yes, that’s right. If you normalize those two items, that’s right. We include like some of our past mining obligations in there. There’s some corporate and other stuff in there, but pretty modest and the cold trading from a blending operations, I think that $5 million number is something that we’ve targeted before. Nathan Martin: Great. Appreciate that, that color. And then maybe guys, finally, could we get some additional thoughts on the domestic thermal coal market here? I think there were some comments in your prepared remarks, but specifically how are you seeing your customer’s stockpiles? Are you having any deferral discussions at this point? And maybe as we look into 2024, you gave us some numbers previously around PRB and other thermal commitments. Could we get an update there and maybe any thoughts on pricing? Appreciate it. Jim Grech: Yes. Hi Nate, good morning. So the current guidance that we’ve put out reflects the current market dynamics and results of the discussions with our customers right now. So as you probably know, our position for 2023 is sold out. So as our customers have different demands or different needs, we work with them to be responsive to that while we still retain the full value of our contracts. But again, with all that said, and any expected changes, that’s all reflected in our current guidance. As far as 2024 on the PRB, we’re about 85% sold position and about 70% sold in our other position. So we got a very strong sales book for next year already in place. And we don’t – we haven’t given up price guidance yet on any of those positions. Nathan Martin: Got it. And then how would you describe, maybe, Jim, the rail service you’re seeing in the U.S. right now, is that driving any of the expected quarter-to-quarter decline in U.S. thermal shipments, or is that more market driven or any thoughts there? Jim Grech: Nate, so far I would say for this year, January and February were tough operations for the railroads. The service challenges they had along with some really challenging weather made for some pretty rough numbers for us. But March was a significant improvement, and we’ve seen that same level of service so far in April. So we’re feeling a lot better about the rail service out west and their ability to meet the customer demands going forward. So big improvement there. So now my view on it is going forward is going to be more of fluctuation of market demand and the customer poll dictating the flow of the coal versus rail performance. Nathan Martin: Great. Appreciate your comments and thoughts, Jim, and Mark as well. Leave it there. Best of luck and the remainder of the year. Jim Grech: Thank you. Mark Spurbeck: Thanks, Nate. Karla Kimrey: Next question. Operator: Next question comes from Katja Jancic with BMO. Please go ahead. Katja Jancic: Hi, thank you for taking my question. Maybe going back to the capital return framework, you have nearly $900 million of cash, which I assume is unrestricted on balance sheet. Could any of that be used potentially for the maybe buybacks or special dividends later in the year? Mark Spurbeck: Hi Katja and congratulations to you. With regard to the cash and the balance sheet, as we mentioned previously, we’re going to maintain substantial liquidity in the balance sheet to weather the volatile pricing cycles and a credit challenged industry. The way I look at this represents the opportunity cost or the call option premium for the free cash flow yield that Peabody generates in the current price cycle. We’ve always mentioned that the shareholder returns there’ll be a minimum of 65% of available free cash flow, but it is on a forward-looking basis. We’re real comfortable given the current marking conditions where we’re at from a liquidity standpoint in that $800 million to $1 billion range. Katja Jancic: Okay. Maybe just on the second half of the year when you’re applying to have a more balanced capital return framework, can you talk over is this going to be 50% variable dividend, 50% share buybacks or how should we think about that? Mark Spurbeck: Yes. I think certainly it’s at the Board’s discretion. We’re starting with a very heavy focus on share buybacks given the current free cash flow yield. But we do look to probably transition to a more balanced approach between dividends and buybacks going forward. It’s going to be at the Board’s discretion, but 50/50 split is something that we may achieve at some point. Katja Jancic: Okay. Thank you very much. Mark Spurbeck: Thank you. Karla Kimrey: Thank you. Next question. Operator: The next question comes from Michael Dudas with Vertical Research Partners. Please go ahead. Michael Dudas: Hi, good morning, everyone. Karla Kimrey: Good morning. Michael Dudas: Jim, the – I wanted to make if you could share your views, there’s been wee [ph] little bit of consolidation and activity in the global mining space, especially in the coal sector in Australia and elsewhere. So I just want to share your views on how you’re seeing that play out, what your thoughts about it. And as you’ve recapitalized in a terrific job on getting the company’s balance sheet is where it is, maybe reiterate your thoughts on how Peabody may or may not fit into those types of opportunities going forward. Jim Grech: Yes. Michael, well, first off, thanks for getting on the call. It’s great to hear from you again. The as far as you know, Peabody and what we look at as far as potential M&A, we’ve stated before, and it’s still a case that our focus is on seaborne – the seaborne markets and assets that serve the seaborne markets, more heavily focused on metallurgical. But if there’s a good thermal play out there we take a look at it, but our main focus is seaborne metallurgical is where we’re looking. Yes, and there has seemed to be some uptick in M&A activity out there. A lot of discussions going on. To me, it the – it hasn’t – what hasn’t changed though, Michael is the availability of financing to do deals, right? It seems to me that you’re looking at scenarios where people ever have to use equity or cash on hand or cash they generate because of the financing or attractive financing isn’t really there. So while there is an uptick in activity, I still think the challenge that people are going have is, again, how to do the financing for some of these assets. Michael, did I answer all the questions that you asked or is there… Michael Dudas: No, that’s very helpful though. That makes quite a bit of sense, because there are those dynamics on capital, which of course is probably going to lead to a much tighter market for global thermal and met coals in the future. So my second part of my question would be maybe, Jim, as you assess how your customers are reacting, looking at things – obviously, it’s a very volatile market, but as you look forward into later this year maybe into next. Are you more encouraged or cautious about the direction of demand and maybe pricing in the markets for the quality of thermal and met that you guys ship into the market? Jim Grech: Yes, I’d say on a global scale, we’re more encouraged not just later this year, next year, but I’ll just say going through the rest of the decade. That’s being, Michael, just to oversimplify it, a fact of supply and demand. We see demand growing both in thermal and metallurgical on the seaborne markets and the constraints to supply growth that have been there are still there access to new capital permitting ESG pressures, lack of hiring employees. So while the volatility is going to be there in the pricing, as you see right now, there’s some maybe downtick in demand, because of weather or some excess gas on the market. The underlying fundamentals this year, next year through the decade, are still really strong in the fact that we think demand is going to be growing and supply is going to have a hard time responding to it. Michael Dudas: Makes sense, Jim. Thanks for your thoughts. Jim Grech: Thanks again, Michael, for getting on the call. Karla Kimrey: Next question? Operator: [Operator Instructions] The next question is a follow-up from Lucas Pipes with B. Riley. Please go ahead. Lucas Pipes: Thank you very much, operator. Thank you very much for taking my follow-up questions. And Jim, the first one I wanted to touch on is just kind of the acute state of the met coal market today. It’s softened a bit, price is still strong by historical standards, but I wondered if you could shed a little bit of light on what you’re seeing from your customers and the various geographies and what you think is causing this back. Thank you very much. Jim Grech: Yes. I’ll break that into two parts of the answer, sort of shorter term and longer term. In the shorter term, what we saw was China, the exports of steel out of that really flooding the market here in the first few months of the year. And we’ve seen that pull back significantly now, as you’re getting into – there’s a lot of domestic growth going on in China and the demand for steel as we’re already seeing less exports of steel from China and more use for internal consumption of it. So that goes with a need for more coal imports into China and being less steel out on the market from China opens the way for other countries now to be pushing their product out there. So we’ve seen the dip in the prices still at a very healthy price at around the $250. But we think the conditions are there now with what’s we see with China and its steel production for production in other countries to fill that void on the international market. So there’s potential there for strength with that. And then again, long – longer term, I’ll just go back to the same supply and demand dynamic that I mentioned with Michael and that seeing again, not very quick response from the supply side if at all, and as demand increases, having that out of balance equilibrium in the supply and demand side on the international met markets. Lucas Pipes: I appreciate that. Thank you. And then switching topics, a little bit of a complicated question, but as much detail as you could provide, I would appreciate. When I think about your restricted cash defusing the reclamation liability effectively, but then also the larger bonding requirement at the minimum liquidity requirement that comes with that. So over time, I would expect kind of both the NPV and the bonding requirement to come down. And this should unlock a fair bit of capital. But first, can you comment on kind of the expected pace of those declines. And then what sort of reclamation costs would be associated on the other side of it as you reclaim land and return mind areas to their original state. So again, just trying to get a sense for the NPV of that liability, how it may change in also the bonding requirement, how capital might be unlocked there. Thank you very much for your color on this. Mark Spurbeck: Certainly, Lucas. I guess I’ll start with the first question. The collateral cap on the surety program is a percentage of what is currently bonded. It’s a little bit different by individual market and by characteristics of the bonds they’ve written, but it’s 56%. You are correct, as bonds are released after work is completed that would naturally come down. So that’ll be completely dependent upon new bonding requirements and new operations. So we have not seen a significant change in that amount from a GAAP liability perspective over the last several years. And I don’t expect to see one going forward for the next several years either. The total bonding has come down recently, but I expect it to be pretty stable going forward. And then as far as the expense that goes on, we have guided to $60 million to $70 million of kind of ARO cash spend. That’s been pretty consistent over the last several years, and I’d expect that to continue. Lucas Pipes: Got it. So over the next few years in a nutshell, we shouldn’t expect meaningful changes either on the bonding requirement or the present value that you have cash collateralized of that amount. Is that right? Mark Spurbeck: That’s correct, Lucas. Again, that $900 million plus number we have in the balance sheet for total restricted cash and collateral not expecting to see significant changes going forward. If there’s changes in laws or some additional new bonding requirements, then that could go up. But we’ll do our best to offset that by completing reclamation work and continuing to get bond releases. Lucas Pipes: Got it. That’s very helpful. I appreciate that, Mark, thank you for the color. And then just to go back to Shoal Creek one more time. With the temporary seal program being initiated, that due to an abundance of caution or have there been signs of lingering hotspots, for example, underground that cost this measure to be – thank you very much. Jim Grech: Yes. The readings – while I have been very stable at the mine have not been zero when it comes to like, levels of hydrogen or CO. So this is – and so we’re putting the temporary seals in again with MSHA to make sure that it is a safe environment for us to get into access the rest of the mine and hopefully back to this area here. So I don’t know if I call it an abundance of caution, Lucas, we’re comfortable with this approach and working with MSHA on it. So the temporary seals I think are a good indication, yes, that we get to get in there quickly and localize the area, where it’s at. So I guess I’d leave it at that. Lucas Pipes: Okay. No, no, that’s helpful. Thanks again for all the color and best of luck. Jim Grech: Thank you, Lucas. Karla Kimrey: We have any more questions? Operator: There are no further questions at this time. So I would like to turn the conference back over to Mr. Jim Grech for any additional or closing remarks. Jim Grech: Well, I’d like to thank you all for joining us today, and I’d especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I’d also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: Thank you. That does conclude today’s teleconference. We do appreciate your participation. You may now disconnect.

Operator: Welcome to the Peabody Fourth Quarter Earnings Call. [Operator Instructions]. Please note today's event is being recorded. I would now like to turn the conference over to Karla Kimrey, Vice President of Investor Relations. Please go ahead. Karla Kimrey: Good morning, and thanks for joining Peabody's earnings call for the fourth quarter of 2022. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. James Grech: Thanks, Karla, and good morning, everyone. Before we get started this morning, I'd like to take a moment and welcome Karla Kimrey to her new role as Vice President of Investor Relations and Communications for Peabody. Karla has over 25 years of experience in Investor Relations with 7 of those in the coal industry. In the fourth quarter and full year 2022, Peabody's diverse portfolio produced substantial and, in many cases, record-breaking results. We had record free cash flow in the quarter and record net income attributable to common stockholders. This performance enabled us to retire all our remaining senior secured debt which was a key milestone in the execution of our anticipated shareholder return program, which we expect to be implemented in the near future. We did have weather challenges in the quarter that we had to overcome in both the U.S. and Australia. In the U.S., the extreme cold weather in December resulted in a substantially disrupted rail service for the PRB. In Australia, the intense rainfall during the quarter impacted production, sales and in turn costs. Additionally, we did feel the impact of greater than anticipated inflation across all our operations, and we're working diligently to control those costs. Before I go into the discussion on markets and our platform, I speak for our entire management team as we would like to sincerely thank our global employees for their continued hard work and their focus on working safely. In 2022, we had our lowest annual global injury rate ever, and 3 of our mines reported 0 incidents. Dedication and commitment of our employees allowed us to deliver the strong results we're announcing today. As we look forward, the diversity of our platform from a product standpoint to a geographic one has allowed us to take advantage of favorable market conditions while safely managing through the operational challenges. Now turning to the global coal markets. Seaborne coal prices remain volatile with near-term markets being driven by shorter-term issues, such as an abnormally warm European winter, reduced coal production levels during the wet season in Australia and in Indonesia and a trade flow of LNG. Market focus is now on the reopening of China's industrial activities post their stringent COVID-19 suppression efforts. This is expected to set the trajectory of China's energy requirements in the near-term, and early indications suggest an increase in demand for seaborne thermal coal. During January, Australian thermal coal producers began supplying coal to China, the first time in over 18 months. Elsewhere, there is evidence of economies taking measures to ensure adequate supply of scarce seaborne thermal coal, such as India, where a new minimum import requirement for domestic power stations has been set for 2023. Overall, we anticipate continued near-term market volatility as coal demand fluctuates and supply remains constrained across the globe. Global thermal coal markets remain fundamentally sound with pricing above historical levels. And this takes into account recent downward trends in seaborne thermal prices that are in response to a warm European winter, leading to higher gas storage levels and coal inventories. Within the seaborne metallurgical market, steel output remains subdued, but there are signs of increasing output in response to improved steel prices in some markets. Even under these conditions, the supply of key metallurgical products has remained constrained due to geopolitical issues and production disruptions from wet weather and coal operation outages, which have led to a further tightening of the market, resulting in higher prices. The metallurgical coal market is also expected to be supported by increased import demand for steelmaking raw materials as China increases steel production rates in response to an anticipated rebound in economic growth. In the United States, overall electricity demand increased more than 3% year-over-year, positively impacted by weather and economic activity. However, electricity generation from thermal coal has declined year-over-year due to coal conservation by utilities, transportation issues impacting coal deliveries and higher renewable generation. In 2022, coal inventories at utilities declined approximately 6% or 5 million tons. Natural gas prices have come off due to a combination of very mild winter weather and near record gas production levels. U.S. natural prompt gas prices are approximately $2.50 per MMBtu, the lowest level since January 2021. Yet the EIA is currently forecasting that the Henry Hub natural gas spot price will average approximately $3.40 per MMBtu for 2023. Now moving on to the fourth quarter. Our operations generated record free cash flow in the quarter despite ongoing recovery from heavy rains in Australia and weather-related rail disruptions in the PRB. Our seaborne thermal segment had its highest quarterly sales volume for the year as Wilpinjong and Wambo bounce back from the prior quarter's heavy rains, which continued into the fourth quarter resulting in a quarterly rainfall, which was about 40% higher than the historical 10-year average for the fourth quarter. Our seaborne met segment benefited from 22% higher realized prices over the third quarter 2022 realizations. We successfully completed a longwall move at Metropolitan and are ramping back up to full production in the first quarter of 2023. In the U.S., PRB sales volumes were negatively impacted in the quarter primarily because of the abnormally cold weather in late December, which significantly restricted rail movements in the basin. We had 2 cold snaps in December. During the first one, our PRB operations only had 8 or 9 trains a day versus the planned 18. During the second cold snap, we only had 1 train a day when 18 were planned. Our other U.S. thermal mines performed well. Gateway and Bear Run produced strong volumes and ramped up as expected. Wild Boar opened 2 new pits, enabling us to sell some higher-priced coal albeit at higher cost to produce but at much better margins. We are able to extend the life of our operations in New Mexico with a new 8-year contract extension at attractive terms. We are essentially sold out at all of our U.S. domestic operations for 2023 and the railroads are focusing on improving service levels from last year's challenges, including weather and staffing levels. I'm proud to say that in 2022, our company's operations had very effective reclamation efforts. In the U.S., we were able to reclaim 1.5 acres for every acre disturbed and 1.25 acres overall, including our Australian operations. At North Goonyella, we have begun the initial redevelopment efforts and expect to spend approximately $120 million in 2023. Our drilling program is underway with 2 rigs operating 24 hours a day to support the reventilation and planned reentry to a previously sealed area called Zone B. We are commissioning the main ventilation fan and that is targeted to start operating in the very near future. Also, orders have been place for critical equipment, including 2 new continuous miners, shuttle cars, conveyors and electrical installation equipment. As a reminder, North Goonyella is a premium grade hard coking coal longwall operation in Queensland, Australia with over 70 million tons of reserves. This operation is a grade of coking coal is considered to be the cornerstone of coking coal feedstocks globally. North Goonyella is expected to meaningfully increase Peabody's metallurgical coal production and generate approximately 25% returns at historical long-term prices in this initial phase. We continue, along with other companies, to urge the Queensland government to roll back their extreme royalty structure. This is resulting in discouraging investment in the loss of jobs and local business opportunities that we can deliver to local communities. I am proud to say we had a terrific 2022, setting a stage for another strong year with a significantly improved balance sheet, which allows us to focus on implementing shareholder value return programs. I'll now turn it over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim, and good morning, everyone. In the fourth quarter, we recorded net income attributable to common stockholders of $632 million or $3.92 per diluted share and adjusted EBITDA of $501 million. We reported record free cash flow of $580 million and had $1.3 billion of cash at December 31 after repaying all of the remaining senior secured debt. For the full year, we had record net income attributable to common stockholders of $1.3 billion, a 260% increase over the prior year. Adjusted EBITDA more than doubled to $1.8 billion. Our strong financial performance allowed us to retire all $545 million of the remaining senior secured debt in the fourth quarter, completing the repayment of over $1.1 billion for the full year. Further, we are actively addressing the reclamation surety agreement to arrive at a sensible straightforward path to prefund all final reclamation costs and eliminate the remaining restriction on shareholder returns. We are optimistic this will be completed in the near future. Turning now to fourth quarter and full year results. In the quarter, seaborne thermal recorded adjusted EBITDA of $209 million a 22% increase over the third quarter as export volumes increased 700,000 tons to $2.3 million. Cost per ton were 12% lower due to higher volumes and lower sales price sensitive costs. The segment generated $648 million of adjusted EBITDA for the full year, an increase of more than 80% compared to 2021. Adjusted EBITDA margin per ton more than doubled resulting in margins of 48%. The Seaborne Metallurgical segment generated $188 million of adjusted EBITDA in the fourth quarter, up 66% from the prior quarter driven by 22% higher realized pricing and 200,000 additional tons. Costs increased $14 per ton due to higher sales price sensitive costs and a longwall move at Metropolitan. For the full year, adjusted EBITDA was $782 million, up over 330% from 2021. Adjusted EBITDA margin was 48%, nearly 2x that of the prior year. The U.S. thermal mines delivered $82.5 million of adjusted EBITDA in the quarter and $310 million for the full year, both higher than the prior year comparable periods. The PRB mines generated $24.7 million of adjusted EBITDA in the quarter and $68.2 million for the year. The story for the fourth quarter was weather further impacting already challenging rail performance. Severe winter weather in December resulted in the loss of approximately 1.1 million tons. Together with higher black lung excise taxes from the Inflation Reduction Act, costs were temporarily higher, squeezing margins to $1.17 per ton in the fourth quarter. The other U.S. thermal mines generated $57.8 million of adjusted EBITDA and $242.4 million for the year, an increase of nearly 50% compared to the prior year. During the quarter, we shipped 5 million tons beating prior guidance. For the year, the segment increased shipments by 1.5 million tons and improved adjusted EBITDA margins to 25%. Now happily turning to the balance sheet. At December 31, we had $1.3 billion of cash after repaying all of the remaining senior secured debt. Accounts receivable stood at $465 million, reflecting strong fourth quarter shipments and robust realized prices. At December 31, we had $255 million of cash margin posted for the remaining 552,000 metric tons of Wambo coal hedges that will settle in the first half of 2023. We also increased our cash collateral for final reclamation to $150 million. Let's turn to our outlook for 2023. Seaborne thermal volumes are anticipated to be 15 million tons, including 9 million to 10 million export tons. Exports are increasing 1.5 million tons compared to 2022 as production shifts towards higher quality Wambo tons and away from lower-cost Wilpinjong tons. Approximately 1.5 million export tons are priced on average at $206, which includes the remaining hedges at $84 per metric ton. We are expecting to ship 5.5 million tons to domestic Australian customers, inclusive of the recent New South Wales domestic supply requirements. Costs are projected to be $52 to $57 per ton, reflecting higher export tons, a greater mix of Newcastle quality Wambo tons and higher sales price sensitive costs. While unit costs are expected to increase about $10 from 2022, we will see substantial margin expansion from the additional export tons. First quarter seaborne thermal export volumes are expected to be 1.8 million tons, less than ratable due to a longwall move at Wambo and recovery from heavy rains in the quarter. Related costs per ton are also expected to be temporarily higher at $60 to $65 per ton. Seaborne metallurgical volumes are projected to be 7 million to 8 million tons an increase of nearly 1 million tons over the prior year, primarily driven by the completion of the Moorvale South project and Shoal Creek's continued progression through tough geological conditions. Approximately 900,000 tons are priced on average at $216. Costs are expected to remain at $120 to $130 per ton as lower sales price sensitive costs are offset by continued inflationary pressures. First quarter seaborne metallurgical volumes are expected to be lower than ratable at 1.4 million tons due to heavy rain in Queensland and challenging conditions at Shoal Creek. Costs are expected to be temporarily higher at $140 to $150 per ton. Lastly, Middlemount results for 2023 are expected to be ratable to the just completed quarter. In the PRB, we are projecting volumes up to 95 million tons with 92 million tons priced on average at $13.60. Costs are expected to be $11.25 to $12 per ton about $0.50 lower than last year as higher volume and lower strip ratio more than offset higher royalties and black lung taxes. Adjusted EBITDA margins per ton are expected to double from the margins realized last year. Other U.S. thermal volumes are expected to remain at current elevated levels of 18 million to 19 million tons. We have 18.6 million tons priced at an average of $50.50, and costs are expected to be $38 to $42 per ton. Capital expenditures are estimated at $325 million, including $200 million of high-return project capital which includes $120 million for the development of North Goonyella and $40 million for the Shoal Creek longwall kit. The remaining sustaining capital of $125 million is at the low end of our previously announced run rate. In summary, the company continued to generate substantial free cash flow from our unique diversified portfolio finished the year with $1.3 billion of cash and no secured debt and made prudent progress toward a revised agreement with our reclamation surety providers. Together, Peabody has set the foundation for a financially resilient company with an unmatched opportunity to return free cash flow to shareholders. I'd now like to turn the call over for questions. Operator? Operator: [Operator Instructions]. Our first question from Lucas Pipes of B. Riley Securities. Lucas Pipes: Jim, it sounds like -- first, congratulations on the good work. And it sounds like you are really close to a capital return announcement. And I wondered if you've given some thought as to what the structure could look like across the industry we've seen frameworks where almost all of the free cash flow is paid out. You've seen others where 35%, 35% to 50% is paid out and kind of the payout ratio stepped up as balance sheet milestones are reached. How do you think about the magnitude of capital returns once you have to . James Grech: Lucas, and thank you for those kind words. We are in active negotiations right now with the sureties. So it's -- we don't want to get too far ahead of ourselves with details, but we did make some comments at Investor Day about some of the concepts we were looking at. And Mark, do you want to elaborate on some of those, please? Mark Spurbeck: Yes. Sure. Lucas, good to be with you this morning. As we mentioned at Investor Day, any shareholder return program that we're looking at is certainly going to be proportional to free cash flow and it's going to be flexible to return cash to shareholders through both buybacks and dividends. When we look at a broad spectrum of companies with shareholder returns programs, those companies that return the most and utilize both dividends and buybacks have performed best over time. So that's not lost on us. Closer to home, we like what we've seen from some in our industry, and we have a few good templates to use and improve upon. As Jim mentioned, we're not ready to share any more details with you today, but expect more in the near future. Lucas Pipes: Very helpful, Jim and Mark. And for my second question, I wanted to turn a little bit to the domestic market. It's been roughly 6 weeks since natural gas prices corrected very meaningfully. And wondered first, how has this impacted your outlook, if at all? And as you look to the 2024 domestic book in the PRB and other domestic thermal, how are price negotiations going? How are contract negotiations going? And could you share what you have currently priced for enterprise if possible for 2024 in the domestic segment? James Grech: Lucas, so for 2023, we have a solid sales book, as we stated. We are completely sold out both in the PRB and our other U.S. thermal mines. So we have a really strong hand there. And so far, the shipments have been going. The nominations have been there and the demand has been there. Our customers, particularly our PRB customers are still short of their target inventories even though they're burning less coal are still short of their inventory. So the demand is there. The challenge we're having is with rail service in the PRB, which was a challenge we had last year and has continued into the start of this year, still with crew shortages, but also there's been some tough weather in the PRB. We are expecting to see that turn around here in the coming months, both railroads have additional crews coming on in February this month. So we're expecting to see some improvements in the rail performance. And at the moment, that really, Lucas, is nothing that I would say that we're seeing from the customer side. It's more of a transportation issue, which is a carryover from last year. The question you had about 2024, we again have a very strong sales book for 2024. In the PRB were sold to around 80% of that midpoint of our 2023 guidance. And in our other U.S. operations were sold around to about 60% that midpoint of our 2023 guidance. And those were all locked in last year. And I would say we -- in terms of pricing, we don't discuss specific pricing going forward at that time. But since they were locked in last year, I would just say that the pricing is what we would consider to be favorable. Operator: [Operator Instructions]. Our next question comes from Nathan Martin at the Benchmark Company. Nathan Martin: Congrats on getting the senior secured debt paydown. Maybe looking at a bigger quick picture question to start. Jim, you made a couple of brief comments on this in your opening remarks. But how does China's reopening to Australian coal specifically affect Peabody? How much of an opportunity does that possibly present to you guys? James Grech: Nate, if I could, I'd like to answer that in the scope of maybe a bigger view of the market in total, which would encapsulate Peabody in China. The market in total in the international markets, we've said and still are saying that there is a significant barriers to entry on the supply side. So when market demands increase, the supply side does not respond because of these high barriers to entry. So taking that into account that there is no quick supply side response, if we just start looking at the seaborne met markets and where they are now and what the potential impact of China could be on that. The prices right now are currently 88% above 2022 lows. So sitting in at $380 range versus $203 million, and that's because demand right now is solid and is showing some signs of increasing demand in India, Japan, Korea and even some in Europe has increased. And at this point in time, in January, we had more metallurgical coal floating in the seaborne markets at any time since July of last year. So the metallurgical demand has been good and is increasing in some of these markets. Now you throw China into that mix and then you add in the weather disruptions that have occurred in Australia and that's why you're seeing these current prices with the strength they have with potential for those prices to be sustained or maybe even improve depending on how quickly China gets back into the market and starts pulling coal out of the market. Seaborne Thermal maybe we're at the opposite end at the moment in the market right now. The prices are lowest that they've been since January of last year, mainly due to the mild winters in Europe and in the Eastern U.S. But the same -- Nate, the same fundamentals exist in the Seaborne market, maybe even more severe when it comes to the barriers of entry than metallurgical coal, there's no quick supply response, if at all. So we think with the growing return to normal weather, we think there's going to be growing energy demand. You see if the increased demand for metallurgical coal would be some signs of increased energy demand. You had China into that mix and we see the thermal prices rebounding -- international thermal prices rebounding later this year. Nathan Martin: Very helpful, Jim. I appreciate those comments. And maybe sticking with the Aussie operations for a second. I think you guys touched on this a little bit, but seaborne thermal cost guidance for '23, higher than expected, up about like $7 to $12 year-over-year to a range of $52 to $57, if my math is correct. I mean -- can you be a little bit more specific around what's driving that increase? Is it something in particular at Wambo or Wilpinjong? Just any additional color would be great. Mark Spurbeck: Yes, Nate. It's really driven by the mix, and it's really the shift of production to Wambo, both the open cut joint venture with Glencore as well as the underground mine in Wambo. Again, that produces a Newcastle quality thermal coal and away from Wilpinjong. Wilpinjong is going to produce less. That's our lowest cost mine in the portfolio and one of the lowest cost seaborne thermal producers in all of Australia, less production at Wilpinjong. More importantly, though, is the increase in the export tons. Those export tons, increasing 1.5 million tons, we're going to see some substantial margin expansion given those additional export tons. And they come along with a little bit higher cost, Wambo, particularly the underground, higher cost structure, as you can imagine, also need to wash some additional coals at Wilpinjong as well as the port and rail cost for those export tons. So that's really driving it. There's some higher sales price sensitive costs as we look at realizations as well. But I'll gladly take $10 higher cost for another 1.5 million export tons in that margin expansion. Nathan Martin: Appreciate that, Mark. And then maybe while I have you, you gave us some good guidance last quarter on the other operating cost line item. Again, I know that's kind of lumpy with trading and brokerage. You also called out, I think, another $200 million of hedges looking to roll off in the first half. Any thoughts on how that line item or the hedges could look like over the next few quarters? Mark Spurbeck: Yes, 2 things. One, remember, in the first quarter of '22, we had realized about $35 million of hedge losses that's really just weather-related production delays and delivering some of those hedge tons later in the year. And in the third quarter, if you remember, we delivered a portion of those tons when the average price was $420 per metric ton versus the $264 in the first quarter. We recorded about a $27 million gain in coal trade in the third quarter. Again, in a similar fashion in the fourth quarter, we delivered the remainder of those tons when the average price was $380. So realized another $24 million in coal trading profits in the fourth quarter. As we go into next year, we're seeing opportunities for -- in our blending program and our coal trading program. So as we've typically done, we see some of that as well as delivering some of the fixed price tons that we had. So I'd expect a decent quarter here in the first quarter for coal trade again. Operator: Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to Mr. Jim Grech for any closing -- additional or closing remarks. James Grech: Thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on our various initiatives. I'd also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

Operator: Good day, and welcome to the Peabody Third Quarter Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. And at this time, I would like to turn the call over to Ms. Alice Tharenos, Vice President of Investor Relations. Please go ahead, ma'am. Alice Tharenos: Good morning, and thanks for joining Peabody's earnings call for the third quarter of 2022. With me today are President and CEO, Jim Grech and CFO, Mark Spurbeck. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. Jim Grech: Thanks, Alice, and good morning, everyone. In the third quarter, our diversified assets delivered strong performance results, generating free cash flow of over $460 million and adjusted EBITDA of $439 million, while recovering from significant weather events in Australia in the early part of the third quarter. We have set the stage to finish the year even stronger, with higher projected volume compared to prior quarters and markets supporting continued strong margins. With the cash generated, we continue to strengthen our balance sheet by advancing our debt reduction strategy with voluntary repurchases, bringing us closer to eliminating all senior secured debt, which will allow us greater financial flexibility in the future. And I am pleased to share that we have commenced the redevelopment efforts at North Goonyella. Before I expand on the quarter and the range of some of our Australian operations, I would like to sincerely thank our global employees for continuing to work safely and efficiently and keeping us focused in the face of adverse events and distractions. Dedication and commitment of our talented workforce allows us to deliver strong results. I would also like to congratulate the teams at both Twentymile and Shoal Creek for winning the 2021 Sentinels of Safety Award for their outstanding safety performance, United States most prestigious award recognizing mining safety. I'm extremely proud of this accomplishment and the commitment to safety that this exemplifies. Now, turning to global coal markets. Across the globe, all coal price indices remain at strong levels. The outlook for all our operating segments continue to be favorable with the constrained supply base serving a market that is reallocating the scarce availability of coal. Seaborne coal markets remain volatile with near-term markets being driven by continued energy supply security issues caused by the Russia-Ukraine conflict, the global inflationary environment, concerns with the severity of the impending win in Europe, and the wet season in Australia and Indonesia. Seaborne thermal coal prices remain elevated as around the globe, coal fuel generation is called upon for affordable, reliable energy security. The Russia-Ukraine conflict continues to impact markets. The cessation of coal imports from Russia by European countries is creating the need to source from alternative locations, including Australia and the US. Furthermore, an underwater pipeline explosion is reducing Russian gas pipeline flows into Europe and is putting additional reliance on imported coal to meet the upcoming European winter demand. Overall, global thermal coal markets remained strong, with pricing well supported due to market tightness. Within the seaborne metallurgical market, steel output remains depressed, impacted by both seasonal and macroeconomic considerations. However, offsetting this are steelmakers in Atlantic markets, switching away from Russian coal imports and seeking supply from other regions such as Australia, U.S. and Canada, particularly for PCI coals. While energy shortages and inflationary concerns in some markets present a risk to near-term industrial activity, the underlying market fundamentals remain constructive, as metallurgical coal supply has declined and any additional production disruptions from wet weather and coal operation outages will lead to a further tightening of the market. In the United States, the coal market continues to be very tight, as strong demand for electricity generation competes with persisting transportation issues, impacting supply to utilities. Overall, electricity demand increased more than 3% year-over-year, positively impacted by weather and economic activity. However, year-to-date electricity generation from thermal coal has declined year-over-year, due to coal conservation by utilities to build coal stockpiles, given concerns with rail performance. US natural gas prices remain elevated, although lower than record highs earlier this year. Numerous factors will impact coal utilization heading into winter, including resolution of transportation issues, weather, renewable generation and natural gas prices. Across the US, we continue to see growing caution regarding the pace of energy transition and the value of dispatchable capacity. Evidence of this are announcements of coal plant retirements being delayed, with most utilities citing grid reliability concerns or delayed renewable projects. This speaks to continued strong coal demand for US coals. Overall, we anticipate continued near-term market volatility as coal demand fluctuates and supply remains constrained across the globe. Our diversified platform is positioned to participate in each of these markets, optimizing results by managing the needs of our diversified customer base. Now, turning to the third quarter. Our third quarter results were strong despite recovering from significant weather and logistical challenges experienced in the first half of the year and early part of the third quarter. During the quarter, we set the stage to finish the year even stronger, with higher volume projected for delivery in the fourth quarter. Wet weather continues to be a theme impacting production at our Australian operations, with the current rain resulting in decreases in fourth quarter estimated production at some of our operations. In our seaborne thermal segment, the impact of additional heavy rain in early July and absenteeism associated with COVID impacts and industry-wide staffing pressures resulted in lower third quarter production volumes and increased costs as compared to prior quarters. Year-to-date, Wambo and Wilpinjong have received more than 190% and 155%, respectively of the 10-year historical rain averages. Last week, as a result of major rain we had a temporary stoppage in production at Wilpinjong. The continuing rainy weather conditions in New South Wales pose a risk to these operations, even with increased water management capabilities put in place. Based on weather events in the early part of the quarter, we have reduced our thermal export sales expectation by over 500,000 tonnes for the fourth quarter. Our Seaborne Met segment delivered higher volumes this quarter and is set to deliver even higher volume next quarter. Metropolitan produced higher volume following completion of a longwall move in the first half of the year. This higher volume offset lower sales volume at Shoal Creek from continued production challenges due to geologic conditions and the impacts of a barge and loader issue at the port, impacting timing of September vessels. We anticipate these issues will continue throughout the year with full year 2022 sales expectations at Shoal Creek reduced to 900,000 tons. Wet weather earlier in October has impacted CMJV production expectation for the quarter, resulting in anticipated sales being reduced by about 150,000 tons. Outside of our operating segments, our 50% ownership share of the Middlemount JV delivered 400,000 attributable tons in the third quarter, with production continuing to be impacted by the severe range earlier in the year. This operation has also suffered from additional range quarter-to-date and is anticipated to have lower sales, lower results in the fourth quarter as compared to the third quarter. In the PRB, higher customer nominations and improving rail performance resulted in an increase of nearly 4 million tonnes shipped as compared to the prior quarter. The higher volume favorably impacted our per-ton costs. We are cautiously optimistic for improving rail performance going into the fourth quarter. Our other US thermal mines continue to achieve consistent strong results with the increased volume delivered in the third quarter despite experiencing some real performance issues, primarily at the El Segundo Mine in New Mexico. Going into the fourth quarter, we are expecting to finish the year strong with higher cash flow generation projected as compared to prior quarters. We remain focused on strengthening the balance sheet with further substantial senior secured debt retirement and prefunding of our long-term reclamation obligations. After considerable evaluation, I am pleased to share that we are moving forward with initial steps to our market value of the company's North Goonyella mine. A premium hard coking coal longwall operation in Australia with 70 million tons of company-controlled reserves. The project is a unique opportunity and that it will benefit from substantial existing infrastructure and equipment in place at the mine including a new 300-meter longwall system, a proven coal handling preparation plant, dedicated rail lot for transport to the Dalrymple Bay Coal Terminal and an accommodation village with housing and service amenities for more than 400 workers. This infrastructure makes this opportunity superior to other green and brownfield projects that do not have a significant infrastructure in place. North Goonyella is expected to generate attractive returns at historical long-term price assumptions while reweighting Peabody's long-term production and revenue towards metallurgical coal in line with our strategy. Initial redevelopment capital expenditures of $140 million over the next 18 months has been approved. Development costs beyond the current Board approved amounts are estimated to be an additional $240 million bringing total estimated capital to approximately $380 million over three years with longwall operations expected to commence in 2026. Beyond this project, North Goonyella has additional strategic value with 50 million tons of remaining company controlled reserves in addition to multiple other regional options for further extensions. Options for further development on our existing and regional reserves continue to be assessed in light of the adverse impact of the changes to the Queensland government's royalty regime. As we take the first steps toward redevelopment at North Goonyella, we continue to urge the Queensland government to roll back their extreme royalty structure, which will not only discourage investment in Queensland but also risks to tens of thousands of jobs and local business opportunities that coal mine delivers to regional communities. Finally, as you may have seen, Coronado Global Resources recently issued announcement confirming that we are engaged in discussions about a potential combination. It is important to note that while there can be no assurance of any such transaction, we do regularly evaluate a range of strategic options to strengthen our position as a coal producer of choice for both thermal and met coal, and any actions we take will always be consistent with the focus and our commitment to creating value for shareholders. At this time, we do not have any updates to share, and we will not be commenting further on that matter today. I'll now turn things over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim and good morning, everyone. In the third quarter, we recorded net income attributable to common shareholders of $375 million or $2.33 per diluted share and adjusted EBITDA of $439 million. Year-to-date, adjusted EBITDA was $1.3 billion, nearly three times the prior year results. For the quarter, we reported free cash flow of $461 million, the best result in 18 quarters and had approximately $1.4 billion of cash and cash equivalents at September 30. Our unique best-in-class diversified portfolio continues to set Peabody apart. Our Seaborne Thermal segment led the way with premium Australian thermal coal priced on average above $420 per metric ton, substantially higher than the premium hard coking coal average price of about $250. Together with higher demand in the US, each of our operating segments reported higher per ton margins compared to the second quarter, except seaborne metallurgical coal, which despite achieving $30 per ton in lower cost, realized lower market pricing. Turning now to the third quarter segment results. Seaborne Thermal generated $171 million of adjusted EBITDA and benefited from higher realized prices, resulting in a 48% adjusted EBITDA margin. The segment exported 1.6 million tons at an average realized price of $188, approximately $45 higher than the second quarter. Costs were $5 per ton higher, impacted by both lower weather-related production at the Wambo Open-Cut joint venture and higher sales price-sensitive costs. Included in the Seaborne Thermal segment is the Wilpinjong Mine, which shipped 2.8 million tons, including over 700,000 export tons. Wilpinjong realized an average sales price of $72 per ton, about 15% lower than the prior quarter due to less tons available for export. Wilpinjong recorded $115 million of adjusted EBITDA for the quarter, repaid $136 million of its debt, and had over $200 million of cash at September 30. Seaborne Met generated $113 million of adjusted EBITDA as lower average realized prices of $180 per ton were partially offset by higher production and lower costs compared to the second quarter, resulting in a 36% adjusted EBITDA margin. The segment sold 1.8 million tons, about 13% more than the prior quarter. Costs were $30 per ton lower due to higher production at Metropolitan and lower sales price-sensitive costs. The US thermal mines delivered $111 million of adjusted EBITDA, our best quarter year-to-date. The investments we made early in the year continue to allow for higher production levels and the PRB began to benefit from some of the uncovered coal in the first half of the year. The PRB shipped 22.3 million tons, about 4 million more than the second quarter, despite rail service, meeting only 83% of customer nominations. Cost per ton were $1.26 lower quarter-over-quarter due to higher production, resulting in a 13% adjusted EBITDA margin. The other US thermal mines shipped 4.8 million tons, 400,000 tons higher than the second quarter. Better realized pricing offset higher labor and repair costs, resulting in higher margins per ton and a 28% adjusted EBITDA margin. Now, a look at the balance sheet. At September 30, we had $1.4 billion of cash and cash equivalents, $485 million more than total debt. During the quarter, we retired an additional $186 million of secured debt and have $143 million of additional repurchase offers on the Wilpinjong 10% debt currently outstanding. At September 30, we classified all remaining secured debt as a current liability on the balance sheet, underscoring our intent and ability to retire all debt other than the 2028 convertible notes in the next 12 months. During the third quarter, we posted an additional $31 million of cash collateral toward future reclamation obligations, bringing total cash collateral supporting surety bonds to $88 million. Based on third quarter free cash flow results, an additional $62 million will be posted in the fourth quarter. At September 30, we had $466 million of cash margins supporting the Wambo Underground mine hedge program, $78 million less than the June 30 balance. We have approximately 900,000 metric tons still exposed to margin variations, all of which will roll off over the next three quarters. Now, let's turn to our outlook for the remainder of the year. As Jim mentioned, we updated fourth quarter guidance to account for the expected impacts to our Australian mines from the recent range. Despite these adjustments, we expect the seaborne thermal and metallurgical segments to report their highest quarterly sales volumes of the year in the fourth quarter. The seaborne thermal segment is expected to ship 2.4 million tons, with 1.2 million export tons priced on average at 122, including 564,000 metric tons hedged at $84. There are also 1.2 million unpriced tons with 100,000 tons expected to price at Newcastle benchmark levels and 1.1 million tons expected to price in line with API 5 coal due to current coal quality and market conditions. Costs are expected to improve to $40 per tonne due to higher production quarter-over-quarter. Seaborne Metallurgical volume is expected to be approximately 2 million tons, with 200,000 tons priced at 244 and the unpriced tons expected to achieve 75% to 80% of the premium hard coking coal benchmark price. Based on production mix, costs are expected to be $125 per ton. In the PRB, we expect to ship 23 million tons at an average price of $13.50. Costs are expected to be $11.50 per tonne, resulting in our best quarterly margin of the year at $2 per ton. Other US thermal volume is now expected to be 4.7 million tons, with costs at $40. Lower segment expectations are primarily due to poor rail service at our El Segundo mine. Despite these adjustments, volumes and costs are expected to be largely in line with third quarter results. Looking out to 2023 on US thermal volumes, we have 82 million PRB tons priced at $13.25 with some higher-quality 8,800 Btu coal uncommitted and 18.6 million other US general tons priced at $50.70 per ton. We expect to finish the year with an improved balance sheet and significantly less debt $150 million of cash funding for future reclamation, enhanced financial flexibility and the redevelopment of North Goonyella underway. I'd now like to turn the call over for questions. Operator? Operator: Thank you. We will now begin the question-and-answer session [Operator Instructions] And the first question will come from Nathan Martin with Benchmark. Please go ahead Nathan Martin: Thanks, operator. Good morning, everyone. Congrats on the quarter and thanks for taking my questions. I guess we'll start moving forward with North Goonyella redevelopment, obviously, a high-quality met coal project there, confirmed discussions with Coronado, which is obviously a net levered producer. So -- and maybe it would be great to get your thoughts on kind of the met markets as you see them going forward as they seem to be getting your attention as of late. Thanks. Jim Grech: Nate, the metallurgical seaborne markets, as we've said in the past, have been a focus area for growth for us, particularly in the Asian markets, which we serve. And they continue to be a focus for us and areas that we would look to strategically grow into the future. The North Goonyella project is a part of fulfilling that strategy and our outlook on these markets. And we're very, very bullish on that project because we think it's unique metallurgical coal product versus any other opportunity like that in the world. And that is because of two reasons. One, it's a high-quality metallurgical coal. And two, because we have such substantial infrastructure in place already with the rail route, the longwall, the accommodation village. There's a significant amount of investment already just sitting there. And to put the incremental investment that we need to, to bring that mine, enter back into the mine and bring it back into service to us is just an outstanding opportunity that we've obviously taken steps to embark upon. So again, it fits right in with our view that the seaborne met markets are a potential growth area for us in the future. Nathan Martin: Appreciate those comments, Jim. Maybe kind of looking ahead, first, you guys raised CapEx, obviously, around looks like $20 million for this year, $210 million, again, driven by the North Goonyella project. Any early thoughts on what CapEx could look like in 2023. I think maintenance this year was about $110 million. Is that still kind of a fair number to use? And what do you expect spending to look like in 2023 on North Goonyella as you move forward? Thanks. Mark Spurbeck: Nate, it's Mark. We're not providing any guidance for 2023 yet, specific to North Goonyella, though we announced the essentially $136 million, that's going to be spent over the next six quarters, really through the end of the first quarter of 2024. So that's kind of the spend North Goonyella for that first chunk. We also noted that there's about $230 million or $240 million of additional development at North Goonyella, above what we've announced and approved, that would be spent over the following two years after that first $136 million. So you're really looking at about $370 million total for – for North Goonyella now, really over the next 3.5 years, pretty proportionately or on a straight line. Nathan Martin: Got it. Thanks for that information, Mark. And then maybe just coming back to the quarter for a second. I noticed other operating cost line item was higher lease than I had expected. I know that tends to be a little lumpy, as I think it's largely driven by trading and brokerage activities, as you guys have noted in the past, but -- could we get some color there? And maybe even more importantly, how do you see that line item shaping up in the fourth quarter and beyond? Thanks. Jim Grech: Yeah. Thanks for that question. Two things, that's mostly that other. We do run through the former North Goonyella holding cost event running through there, but that is primarily the trading activities that you mentioned. We typically use that to maximize our blending opportunities and generally make a modest yet meaningful profit for the company. Particularly this quarter, though, it's a good question because as a reminder, we realized some hedge losses in the first quarter of this year as weather-related production delays, deferred shipment of about 180,000 hedge tons at spot prices, when we delivered into other fixed price contracts, other physical contracts that we had delivered to a fixed prices. That loss was reported through coal trade in the first quarter and the result simply from the timing difference of delivering that physical coal and the hedge contracts. Now if you recall, first quarter average prices was about $264 per metric ton, now here in the third quarter, we delivered some of those tons when the average price was $420 a metric ton. So we realized about $27 million in coal trading profits during the quarter just from that timing difference. But those truly are real earnings based on selling that coal at $420 million versus $2.64. Nathan Martin: And any thoughts, Mark, on how that might look like going forward or how to model that? Jim Grech: Yeah. So there's still about 900,000 tons that we have on that program that are rolling off. I would say we probably recovered about half of those deferred tons from the first quarter. So I'd expect a similar -- at same prices as to-date, I expect a similar coal-trading profit in that ballpark for the fourth quarter. Nathan Martin: Got it. That's very helpful. Appreciate that. And then, I guess just maybe one final item, if I could. We've seen, obviously, the heavy rains you guys spoke about in your prepared remarks in October, sounds like you've kind of incorporated in your guidance as best as possible. What else are you guys doing to kind of deal with those heavy rains? And how comfortable are you with the 2.4 million tons of fourth quarter exports you're guiding to at this point? Thanks. Jim Grech: Yeah, Nathan and the -- like I said, we've incorporated our best estimates into the forecast for the impacts of those rains and even we have in our forecast, some allowance for other rain events. So we feel good about the forecast we have out there, pending anything that I would call it, extensive or out of the ordinary occurring, we do have some allowances for that already in the numbers. What we've been doing is on our -- on the site each site is distinctly different ways to manage the water with the much larger volumes if they are to reoccur and treating the water. So eventually, we can remove it from site. So each of the different sites have put in plans in place to handle these larger amounts of water that we already have on-site currently, and that may be coming again in the future. So again, we're taking the steps that we can take to be ready for this -- these types of events occurring again. Nathan Martin: Thank you, Jim. I'll pass it on. Appreciate the time. And best of luck during the fourth quarter. Jim Grech: Yeah. Thank you, Nathan. Operator: The next question will come from Lucas Pipes with B. Riley Securities. Please go ahead. Lucas Pipes: Thank you. Thank you very much, operator. Good morning, everyone, and good job in the quarter. Jim Grech: Good morning, Lucas. Thank you. Lucas Pipes: I do want to follow-up on the North Goonyella decision. And specifically, you know that the market puts a very significant premium on capital returns. So how do you think about pursuing this organic growth project, while also meeting market expectations for ongoing capital returns, especially as we look out to 2023? Thank you very much for your perspective. Mark Spurbeck: Thanks, Lucas. It's Mark. I'll take a crack at that. We've talked here for a few quarters now about our strategy. First, deleveraging the balance sheet. As you know, shareholder returns are restricted with our secured debt as well as our surety agreement. Since the start of '21, we repaid about $700 million of debt. And at the same time, we've increased our cash balance from about $700 million to $1.4 billion. With the classification, the current liabilities of all of our secured debt, it's a clear signal that we will eliminate that remaining $550 million over the next 12 months. Specifically, Wilken Yang has about $195 million of debt outstanding. We have offers, as I mentioned in my remarks, outstanding to repurchase that debt -- to date, we have received tenders into those offers for substantially all of that debt. So I expect that to be cleared up in short order. We're also addressing the unfunded $300 million LC facility that cost about $20 million a year to maintain -- that matures in 2024 and will not be renewed. Currently, that facility is providing noncash collateral for future reclamation liabilities. As you may recall, our shared agreement also requires some additional collateral based on free cash flow. And as noted, $62 million of collateral has been posted here in the fourth quarter. bringing our total prepaid reclamation fund to 150 million. So the last part is the street agreement. So let me just add here that we continue to have really good discussions with our surety partners. We've discovered a lot of common ground. We're certainly aligned on the company's continued deleveraging efforts, and we are seeking a final reclamation surety agreement to cash collateralize that future reclamation to a reasonable level relative to the actual liability and then remove those restrictions from shareholder returns as well. We expect to continue to finalize that here in the coming months. So, with that -- with those shackles as they removed, we have an opportunity to do a couple of things. We regain that financial flexibility, we can reinvest in organic projects like North Genial. Jim mentioned, world-class premium hard coking coal that can deliver 3 million to 4 million tonnes a year of that coal for an investment of $370 million over the next -- the investment of $370 million over the next 3.5 years. That's a 25% return, and that's only utilizing 28% of the existing reserves in that project. So while we have a great organic portfolio opportunities, we're also looking to do that side-by-side with shareholder returns and elimination of this debt. Lucas Pipes: Mark, really appreciate that comprehensive answer. That is very helpful. one of the pieces in all of this is also M&A. When you think about capital returns in North Goela -- and then also M&A, how do those pieces -- how do those pieces fit together? Thank you very much for your perspective. Jim Grech: Lucas, as Mark said, given the strong cash generation projects after we look at strengthening our balance sheet, and as Mark said, removing those shackles for us, we then can look at different things that aren't mutually exclusive, whether it's shareholder returns, organic growth or M&A. So participating one doesn't necessarily preclude participating in the other -- what we do have a focus on now is what is the best overall decisions for our shareholders. And that overrides anything that we're doing as far as what we're going to be doing with the capital once we have these shackles in this financial flexibility to do some more maneuvering with the cash in the company. Lucas Pipes: Helpful. And given that you've signaled the go ahead here in North Goonyella, is it fair to conclude that, that is clearly better than what you're seeing available on the M&A front? Jim Grech: Again, I'm not going to comment on any M&A activities. As I said, with the shareholder returns, organic growth or M&A, they don't have to be mutually exclusive. The North Goonyella project stands alone on its own merits. Again, with the returns that Mark mentioned, and I would say the lower execution risk of a project like that versus something that's greenfield, because there's so much infrastructure in place, we know the reserves. We look at it as a very low-risk organic growth opportunity, the stand-alone is a very, very good decision for our company. Lucas Pipes: Okay. Thank you. And the last one for me, unfortunately, also on the capital structure allocation front, I'll maybe jump back in with operational questions later. But in terms of -- Mark, you -- again, really appreciate response earlier, very helpful. You mentioned paying off all the secured debt over the next 12 months. You're in discussions with the sureties. Would it be possible to provide a little bit more granularity on the potential timing of the secured debt payments? Would you expect that to be early 2023 first quarter and then with the sureties, would you expect to arrive at a conclusion to those discussions around the same time. Thank you very much for your perspective. Mark Spurbeck: Yes. I appreciate those questions, Lucas. Certainly, from a secured debt perspective, I mentioned the Wilpinjong debt, $195 million. So the big piece of that, we have offers outstanding substantially all of that's been tendered. So that should be cleaned up here, hopefully, in the next quarter -- in the fourth quarter here. The other secured debt, the term loan that can be repaid without penalty and premium at a time of our choosing and the 2025 notes are currently callable as well at a very small premium to part. So, we can take that out and we expect to do so in the next 12 months. As far as the sureties go, my partners, like I mentioned, we're having really productive conversations. We have a lot of common ground. So, I think the time line is the same. I'd expect to have that wrapped up here by the end of the first quarter of next year. Lucas Pipes: Very helpful. Again, I appreciate all the color and keep up the good work. Thank you. Jim Grech: Thanks Lucas. Operator: The next question will come from David Gagliano with BMO Capital Markets. Please go ahead. David Gagliano: Hi. Thanks for taking my questions. I think a lot of the questions that I had on my mind have already been addressed. But I did want to just clarify a little bit on North Goonyella, just the timing here we have. Can you -- so CapEx is $140 million by 1Q 2024 and then total $370 million. Can you give us a sense as to the timing of the ramp-up of production? And also, it's earlier read on reasonable range for cash costs? Mark Spurbeck: On the production, we will start seeing development coal coming in 2024, Dave. That's the plan for that and then, longwall coal coming sometime in the first half of 2026. So, that's the timing of when we see the production flowing. I'm sorry, what was the other question you had? David Gagliano: I mean I know, it's early days, and I know, we've been in and out of North Goonyella over the years. My other question was a reasonable range for cash costs in 2026 as best you can tell in 2022? Mark Spurbeck: You're talking North Goonyella cash costs. David Gagliano: Right. Mark Spurbeck: I think we're probably looking at $95 to $100 a ton. David Gagliano: All right. Perfect. And then on the M&A commentary and the commentary that North Goonyella M&A are not mutually exclusive. When you look at M&A, would you – are you considering – what's the more likely type of opportunities you're looking at? Is it full corporate activity or acquisitions, or is it asset by asset, or if you could just give us a sense as to what types of things are under consideration. Mark Spurbeck: Dave, the – our strategy for growth, whether it's organic or M&A, if it were to occur, is to go to the seaborne markets with the markets being preferred over the thermal markets. But again, not to say we wouldn't look at it, but a high preference to expand in the seaborne metallurgical markets is the direction we'd like to go in the future. And we would look at any type of opportunity that would make sense to us. So, I would put any limits on what we would look at as far as the type of opportunity. David Gagliano: Okay. And then just along the same lines, in terms of incremental investments elsewhere geographically, can you comment a little bit about thoughts about the US thermal strategic plans. It wasn't too long ago, Peabody and Arch are trying to get together out there. Obviously, you didn't work out from an antitrust perspective. Obviously, things have changed a lot. And I'm just curious what the current thinking is with regards to future meaningful investments in the US Powder River Basin, for example, or just in the US normal business in general? Jim Grech: Yeah. So in regards to the -- an M&A question, I think if that's what you're asking, again, our focus is David Gagliano: Organic or inorganic both, actually. Yeah. Jim Grech: Yeah. So – our focus is the seaborne metallurgical growth. So in the domestic US thermal, we like the assets that we have. They're low-cost assets both in the PRB and in the Midwest. And earlier in the year, we've announced some investments in equipment for those mines. And we've also – in the first half of the year, we invested in uncovering some more coal in the PRB to be ready to meet some demand here. So our investments in our US assets, Dave, are to, I'd call it, small incremental growth off of our existing asset base, nothing significant or as far as capital investments there. It's basically taken what we have, putting some more of the equipment back into service, hiring people to man the equipment, and then that can fluctuate with demand, that would be how we're looking at our US assets – US thermal assets. David Gagliano: Understood. Okay. And then just the last one for me on the same topic, when you assess your existing portfolio, do you see divestment opportunities within that portfolio? Jim Grech: I don't like to comment on M&A or divestments. Again, whatever is makes some more sense for our shareholders. We're always open to looking at it and we'll look at for that opportunity. David Gagliano: Okay. Great. Thanks very much for taking my question. Jim Grech: Yes. Thank you, Dave. Operator: As there are no further questions, I would like to turn the conference back over to Mr. Jim Grech for any closing remarks. Please go ahead. End of Q&A: Jim Grech: Well, thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on all our various initiatives. I'd also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: This concludes today's teleconference. We do appreciate your participation. You may now disconnect.

Operator: Welcome to the Peabody Second Quarter Earnings Call. [Operator Instructions]. And at this time, I would now like to turn the conference over to Alice Tharenos, Vice President of Investor Relations. Please go ahead. Alice Tharenos: Good morning, and thank you for joining Peabody's earnings call for the second quarter of 2022. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. James Grech: Thanks, Alice, and good morning, everyone. In the second quarter, our diversified assets delivered strong results, generating free cash flow of over $340 million and adjusted EBITDA of $578 million, our highest in more than a decade despite ongoing weather and logistical challenges. We continue to expect a strong second half with higher projected volumes compared to the first half of the year in all our segments and markets, although volatile supporting continued high prices. During the quarter, we delivered increased sales volumes in every segment except the PRB, capturing strong market prices, which resulted in higher margins. With cash generated, we continue to strengthen our balance sheet by advancing our debt reduction strategy with voluntary repurchases, bringing us closer to eliminating all senior secured debt, which will allow us greater financial flexibility in the future. Before I expand on the quarter, I would like to sincerely thank our global employees for their continued focus on working safely and efficiently, which has been truly remarkable given the adverse weather and logistics challenges we have been facing. Without the dedication of our talented workforce, we would not have had the outstanding second quarter results we are reporting today. Now turning to global coal markets; across the globe, all coal price indices remain at elevated levels, representing a dynamic demand that continues to test the ability of supply in most of our market segments. The outlook for all our operating segments continue to be favorable with the constrained base serving a market that is reallocating the scarce availability of coal. Seaborne coal markets are currently facing disruption resulting from the Russia-Ukraine conflict. Our coal supply in Australia continues to be challenged by weather and staff absenteeism primarily as a result of continued COVID impacts. And in the U.S., coal exports continue to be challenged by Eastern rail logistics issues. Seaborne thermal prices remain near record levels as around the globe, coal fuel generation is called upon for energy security and reliability. High natural gas prices are providing strong economic incentives for generators to maximize coal generation. Evidence of this is the restart of available coal fuel generation in Europe. The Russia-Ukraine conflict is also impacting markets. The cessation of coal imports from Russia by European countries is creating a need to source from alternative locations, including Australia and the U.S. Furthermore, reduced Russian gas pipeline closed into Europe and an LNG terminal outage in the U.S. are further challenging international gas supply. Actions to ration gas supply in preparation for the European winter, including the recent 15% reduction of use EU agreement further support coal fuel generation. Compounding these issues, Australian supply continues to be challenged by historically high levels of rainfall with most recent supply interruptions associated with heavy July range and in the U.S. rail performance is limiting export volumes to further constraining near-term supply. Overall, global thermal coal markets remain robust, with pricing at historical record levels that is incentivizing high energy coal to markets where it provides the most value. Within the seaborne metallurgical market, anticipated steel output for July to September has been trimmed in North Asia and Europe as a result of falling steel prices and high distributor inventories. There are signs of weakening end user demand due to falling economic confidence in the face of increasing inflationary pressures globally. As steelmakers introduce output production cuts, we have seen a weakening of incremental metallurgical coal demand. Moving forward and offset to some of this impact, our steelmakers in the Atlantic market, switching away from Russian coal imports and seeking supply from other regions such as Australia, U.S. and Canada, particularly for PCI coals. Robust thermal coal prices are above met coal prices which is creating switching opportunities for European buyers who can overcome technical barriers. And this dynamic can be viewed as a positive for the met coal market balance in the coming months. While energy shortages and inflationary concerns in some markets present a lift to near-term industrial activity, the underlying market fundamentals remain constructive as metallurgical coal supply remains static. In the United States, the coal markets continue to be tight as supply remains constrained. Transportation issues linger in the PRB and demand for coal has increased to meet summer electricity demand. Overall, the electricity demand increased more than 4% year-over-year, positively impacted by weather and economic activity. Year-to-date, electricity generation from thermal coal has declined year-over-year due to coal conservation by utilities to build coal stocks given concerns with rail performance. U.S. natural gas prices remain elevated at levels not seen since 2008 with weather driving market tightness, and this is occurring even with a higher supply as a result of increased production and an LNG terminal outage keeping more gas in the domestic market. Across the U.S., we are seeing growing caution regarding the pace of the energy transition, value of dispatchable capacity. Evidence of this are announcements of coal plant retirements being delayed with most utility citing grid reliability concerns or delayed renewable projects. This speaks to continued strong coal demand for U.S. coals. Overall, we anticipate continued near-term market volatility as coal demand fluctuates and supply remains constrained across the globe. Our diversified platform is positioned to participate in each of these markets, optimizing results by managing the needs of our diversified customer base. Now turning to the second quarter; our second quarter results were strong despite several external factors at our operations that are delaying plans to deliver increased production volumes across our platform. We have included the impact of these factors and other adjustments in our updated second half guidance, which indicates lower results for the third quarter with improvements in the fourth quarter. In our Seaborne Thermal segment, the impact of heavy rain and COVID-related staffing shortages continue to hinder our recovery plans to recapture full year projection, production volumes at Wilpinjong and Wambo. In early July, La Nina record flooding event with more than 7 inches of rain, intensified productivity challenges. This event resulted in interruptions to our Wambo operations and rail services, further reducing production expectations as the mines recover from flooding. We drew down inventory to deliver second quarter sales in line with guidance. However, we've had to update second half guidance to reflect lower sales volumes, additional royalties and other costs in the third quarter as the mines recover from these events. Our Seaborne Met segment is on track to deliver higher volumes and deliver on guidance as the year progresses. The CMJV delivered higher volumes and had its first shipments from Moorvale South. At Metropolitan, we completed the longwall move and are positioned for higher volumes in the second half. At Shoal Creek, we transitioned to the J2 longwall panel following production challenges in the J1 panel, and we project the mine to deliver higher volumes in the second half. Outside of our operating segments, our 50% ownership share of Middlemount benefited from strong metallurgical market dynamics, delivering nearly 400,000 attributable tons in the second quarter. Production here was also impacted by severe rains and COVID absenteeism during the quarter, which is also expected to impact third quarter production. In the PRB, further degradation of rail performance resulted in 2 million tons shipped less denominated by customers in the first quarter and 4 million tons less in the second quarter. This has unfavorably impacted our costs as we continue to remove overburden at a higher production rate, which will benefit those operations in the future. For 2022, although we have 90 million tons under customer commitments, sales volumes will be dependent on rail performance. Our other U.S. thermal mines continued to deliver strong results with increasing volumes expected in the second half. Demand for our U.S. thermal products remain strong, and we continue to place new business with both existing and new customers. We continue to explore sales strategies that position Peabody to be the long-term producer of choice, providing our customers long-term supply, security and capturing strong prices. In the PRB, for 2023, we have approximately 6 million to 8 million tons priced at $13.28 a ton, with an average BTU of 8,600 and our remaining uncommitted volumes of the higher-quality 8,800 BTU coal while our other U.S. thermal segment has 16.6 million tons priced at $46.80 a ton for 2023 delivery. In the quarter, we also issued our ESG report, which lays out the steps we have taken to strengthen our commitments and to reposition ourselves to better support the ESG targets of our stakeholders. This includes a commitment to setting targets and developing programs to enhance our position as a champion of ESG practices. Finally, we continue to advance R3 Renewables efforts to pursue the development of utility scale solar and battery storage on six tracks of previous coal mining land in Illinois and Indiana. We have finalized our management team and commenced site evaluations with our project developer, Treaty Oak. Our vision for the future is simple. We want to continue to strengthen our position as a coal producer of choice. We will do this by maintaining financial strength, reliably delivering a diversity of products to support our customers' needs, practicing operational excellence and champion ESG practices. This will allow us to be resilient in all cycles and to grow with our stakeholders. We are progressing this vision through multiple strategic initiatives. In our met platform, in addition to completing development of Moorvale South to improve quality and extend life at the CMJV, we continue to assess development of 70 million tons of southern reserves at North Goonyella. And in our Seaborne Thermal platform, we are extending the life of Wambo underground with further longwall development. In the U.S., we continued to implement sales strategies and plans to capture incremental volumes and to give a flexibility in our mine plans to meet changing customer demand. Some examples of these activities are expansion into new areas at our Wild Boar complex in the Midwest and additional mining units at Francisco and Gateway. And most importantly, we remain focused on the financial strength of the balance sheet with further debt repayments. I'll now turn things over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim, and good morning, everyone. In the second quarter, we recorded net income attributable to common shareholders of $410 million or $2.54 per diluted share and adjusted EBITDA of $578 million, nearly 5x the prior year results. We generated free cash flow of $342 million, ending the quarter with more cash than debt for the first time as a public company. Second quarter revenue was $1.3 billion, an 83% increase from the prior year as our diversified products continue to realize substantially higher prices with premium Australian thermal coal doing particularly well, recently achieving prices more than double premium hard coking coal. These terrific prices result in higher sales price sensitive costs and together with fuel costs and other inflationary pressures, higher overburden removal in the PRB and the Shoal Creek transition to the J2 longwall panel, costs were higher than the prior year. Turning now to the second quarter segment results; Seaborne Thermal generated $177 million of EBITDA, nearly double first quarter results due to higher realized prices and additional export sales, resulting in 50% EBITDA margins. The segment exported 2.2 million tons, $400,000 higher than the first quarter. The $143 per ton average realized export price was $24 higher than the first quarter as index-linked prices were partially offset by fixed price sales and hedged tons. Second quarter costs were impacted by higher sales price sensitive costs and fuel prices. Included in the Seaborne Thermal segment is the Wilpinjong Mine, which shipped 3.3 million tons, including 1.5 million export tons. Wilpinjong realized an average sales price of $85 per ton, 70% higher than the prior quarter due to stronger international prices and a higher mix of export tons. Wilpinjong recorded $170 million of adjusted EBITDA for the quarter and had over $200 million of cash at June 30. The Seaborne Met segment generated $300 million of EBITDA, more than $100 million higher than the first quarter as average realized prices of $331 per ton compared favorably to cost of $145, resulting in 56% EBITDA margins. The segment sold 1.6 million tons, about 33% more than the prior quarter as higher volume from the CMJV offset lower-than-expected production at Shoal Creek. Cost per ton increased as a result of additional sales price-sensitive costs, Shoal Creek transition costs and higher fuel and other commodity prices. In the U.S., our thermal mines delivered $60 million of EBITDA. The PRB shipped 18.5 million tons, about 2 million tons less than the first quarter as rail service continued to hamper shipments to customers with only 82% of customer nominations met in the quarter. Costs increased compared to the first quarter attributable to additional overburden removal in the absence of available rail as well as higher fuel prices, partially offset by lower contractor costs. The higher overburden removal relative to tons shipped has driven up first half costs and will start to benefit from that as we shift some of the uncovered coal to customers in the second half of this year. The other U.S. thermal mines shipped 4.4 million tons as the Midwest mines increased sales 400,000 tons compared to the first quarter, and the segment reported higher EBITDA margins of 28%. Costs increased due to higher fuel and other commodity costs, partially offset by onetime first quarter costs. Now a quick look at financing items; at June 30, we had $1.1 billion of cash and cash equivalents, $74 million more than total debt. During the second quarter, we retired another $51 million of secured debt. Subsequent to June 30, we retired an additional $116 million, including $94 million of Wilpinjong senior notes pursuant to an offer that was upsized from the original $50 million offer, bringing year-to-date debt repayments to $290 million. Immediately upon closing the Wilpinjong senior notes offer, we launched a reciprocal offer to the Wilpinjong term loan holders for an additional $44 million, which we expect to close in a little less than a month. Now, let's turn to our full year outlook. As Jim mentioned, we have updated second half guidance to account for weather impacts on our Australian mine plans, higher sales price sensitive costs and higher fuel and other commodity prices. In the Seaborne Thermal segment, to account for the lost productivity from severe rains, we lowered full year expectations by 1 million to 1.3 million tons. We increased expected cost by $8 per ton to reflect higher sales price-sensitive costs, fuel prices and lower production. We expect strong second half results from the segment based on 2.3 million export tons priced on average at $140 and about 2.4 million unpriced tons, including 800,000 tons, which are expected to price at Newcastle benchmark levels and 1.6 million tons expected to price in line with API 5 coal due to current coal quality and market conditions. Seaborne metallurgical volume is expected to be a bit higher than previous guidance, and we narrowed the range by increasing the lower end by 300,000 tons. Higher second half volumes are anticipated due to higher production at the Metropolitan, Moorvale South and Shoal Creek mines. With essentially all second half tons unpriced, the current product mix is expected to achieve 75% to 80% of the premium hard coking coal benchmark. Cost per ton for the full year have increased $15 primarily as a result of the recently announced highly progressive Queensland royalty regime, which took effect July 1 and higher fuel prices. In the PRB, we have experienced increasingly poor rail service. We shipped 89% of customer nominations in the first quarter, only 82% in the second quarter and July month-to-date is down to 77%. Based on current rail performance, we've lowered full year sales volumes by 5 million to 8 million tons. PRB costs for the full year have been raised about $1.25 as a result of the lower expected volume, higher fuel costs and general inflationary pressures. Other U.S. thermal volume was raised 500,000 tons to 18.5 million tons or 19.5 million tons, while costs were increased $4 to reflect higher fuel, maintenance and other costs to achieve higher volumes. Essentially, all remaining U.S. thermal tons are priced and committed, but sales continue to be dependent on rail availability. With these updates, we expect a second half with strong margins and cash flows. Lastly, we will maintain our disciplined approach to capital allocation using free cash flow to continue repaying secured debt and cash collateralized reclamation obligations. I'd now like to turn the call over for questions. Operator? Operator: [Operator Instructions]. And we'll take our first question from Lucas Pipes, B. Riley Securities. Lucas Pipes: I wanted to first ask a bit about North Goonyella and specifically, there was the new royalty regime announced here a month ago or so for Queensland. And if I kind of think back to prior quarters and questions around capital returns, North Goonyella, it sounds like it factored into this. So with the changes on the royalty side, is this organic project may be moving further down the priority list and speedier and greater capital returns are maybe even more attractive than they already were? James Grech: Yes. So North Goonyella, you talked about the new royalty regime in Queensland. And just a couple of quick comments on that. First, Lucas is the -- our Metropolitan Mine is not affected by that because it's not in Queensland, it affects CMJV and Middlemount and of course, North Goonyella when brought back online. So North Goonyella is still a attractive option for organic growth, probably our best organic growth opportunity that we have in the company. And we're still doing work on the surface and a lot of engineering studies and evaluation with that project, which we have been doing throughout the year. So it's still a very high priority for us in the list of all of our projects that we're looking at as being financially attractive. Lucas Pipes: I'll switch topics for now. So 2023 is obviously not far away anymore, and this is an understatement. Lots of movement on the pricing internationally but also domestic, you pointed to increase 2023 commitments. But can you give us an update where -- kind of how much and what price your various products are committed and priced for 2023? What's left to sell, and that would really allow us to properly calibrate your earnings power, not just -- obviously, we have the coming quarters here, but into next year, given the very significant pricing. James Grech: Yes. Lucas, as far as we have sold as I've said in my comments, in the PRB, we've got the 68 million tons sold at $13.28 and that's in the 8,600 Btu. We still have all of our unsold PRB in 2023 is the 8,800 quality coal. And on other thermal coal in the U.S., we've got 16.6 million tons sold at $46.80 a ton. And so we haven't given guidance yet as to our tonnages for next year. So we're not prepared to do that at this time, but that's what we have sold there. I will say that in the metallurgical markets as far as interest for next year, we are getting interest from our customers for commitments now to sell metallurgical coal next year in greater quantities than we have sold to them this year. So of course, those will probably come at index prices in doing those sales, but it is an interesting dynamic since you're asking about 2023 that in the metallurgical markets, we're getting customer interest to make commitments now for significantly increased tonnage amount of what we sold to them this year. Lucas Pipes: And I'll ask one final question before turning it over. The international Seaborne Thermal coal markets, extremely robust, rare premium over met coal. Are you selling into that thermal coal market already? And would that also factor into what you just mentioned on 2023 met coal commitments? James Grech: Lucas, when you talk about selling into those markets, are you talking about metallurgical coal being sold into the market? Lucas Pipes: Correct, correct, correct. Yes. James Grech: Okay. I understand your question. Lucas Pipes: Yes. No, yes, it's about switching met coal volumes into the seaborne thermal coal market. James Grech: Yes. We've started looking at having that occurring into the third quarter and some of those sales mainly from our Shoal Creek mine so as far as this year. What I referred to for next year was strictly metallurgical coal and interest for metallurgical coal buyers to be locking down tons for next year. Operator: Next, we'll move on to Nathan Martin, Benchmark Company. Nathan Martin: I guess I'll start. There was a headline this week. I think that the Japanese annual contract settling around $375 a metric ton. It would be great to get your thoughts around that. And then are you incorporating that value in any of your updated Seaborne Thermal segment price guidance? James Grech: Obviously, that's not the traditional -- we haven't had a traditional JRP settlement occurring this year. So what we've been doing is bilateral settlement negotiations are what we're undertaking. And so the results of anything that we have settled Nate is in the guidance already. There is a sensitivity to talking about prices on our side since the JRP isn't settled because we do have ongoing negotiations right now in these bilateral agreements. So I guess I'd like to leave it as the prices that we have settled are in the guidance going forward, and we're still in active negotiations on other tons. So I prefer not to comment on prices while we're in active negotiations. Nathan Martin: Maybe moving on to kind of Lucas' question, again, talk about crossover met into the thermal markets, you're giving kind of the unprecedented premium thermal prices are displaying over met in today's market. What -- said differently, what kind of opportunity do you think there could be there maybe not only for Peabody, but even globally, what kind of barriers to entry do you guys see to making that happen? James Grech: Well, Nate, I'll come to answer that and please, if I don't answer your question, just follow-up, so I make sure I do. When you say barriers to entry, the number one thing I think you look at is just technical is the quality of the metallurgical coal, the volatile matter, the BTUs, the ash and the sulfur, what type of thermal markets can it go to so not all metallurgical coal move into thermal markets. So I'd say that's the number one thing, if you look at the cost, obviously, but then you [indiscernible] coal actually be consumed in boilers. And so that's the issue. I think you mentioned something in barriers to entry. And whether it's thermal coal or metallurgical coal, the barriers to entry for incremental production or new production, I should say, is pretty high. And so there isn't any big more metallurgical coal projects coming online. And so as that coal goes into the thermal markets, what the tons that can, it automatically makes the supply side less in the metallurgical markets, which at some time we'd hope would result in a quicker price rebound into those markets. So high barriers to entry for new supply and the switching is very, very much dependent on the quality of the coal. Mark Spurbeck: Maybe one more thing I'd add. Yeah, just wanted to add, we're talking about switching from that into thermal. And as Jim mentioned, there's a lot of technical barriers for that to happen. So on the margin, there are some tons that can go in there. But I don't want to lost in the discussion. It's a great time for Peabody's diversified portfolio and the 8 million to 9 million tons of Seaborne Thermal that we are selling at these grade prices of north of $400 per ton on a Newcastle level. Nathan Martin: Yes. Mark, I agree, absolutely. That was kind of the genesis of my initial question around the $375 number that was floated out there this week. Obviously, a record result since that comes to fruition. Jim, yeah, I appreciate those thoughts. I mean, I guess I was also kind of thinking tonnage-wise, maybe what's out there or are we going to see restrictions in the near term, given maybe some tonnage is already contracted on the met side, so it could not participate in the thermal market or things like that. James Grech: Yes. I'll just speak for our company. With -- if we have commitments under contract, we're going to honor those commitments. So we just can't take all of our metallurgical coal and then switch it over to the thermal market. So really, you're talking about uncommitted tons or incremental tons that we can bring to market. And right now, again, that's mainly our Shoal Creek Mine. We are looking some at our Australian mines and Metropolitan mine as one of them for some other sources of that ton. So I don't have a hard number for you at the moment Nate as to how many tons we're looking at because we're still evaluating that. Again, if we could just flip the coal into thermal market, that would be great, but we got to find specific markets that can handle our coal quality. And so it takes a little bit of time to do that. Nathan Martin: Totally understand. Very helpful, Jim, and then maybe just one final thing. I think you guys mentioned about 264,000 tons of your hedged thermal coal, $84 sold during the quarter. Looks like you mentioned maybe still around for 3Q anticipated. Can we just get an update on how many tons are left there and when you expect those to roll off? Appreciate it. James Grech: Yes, Nate. We now have less than 1 million metric tons after the roll-off of those Q2 hedges. They will roll off over the next 12 months, finishing in the first half of next year. I would like to roll off a little bit heavier in the second half of that, so maybe 425,000 tons over the next half or in the second half of '22 and about 500,000 tons to 550,000 tons in the first half of '23. Nathan Martin: Okay. So 425,000 tons over the second half and 500,000 tons? James Grech: 550,000 in the second -- first half of next year, that's right. Operator: And next we move on to David Gagliano with BMO Capital Markets. David Gagliano: Great. I have a series of questions that are related, actually, so most of the questions have already been asked. But just a little more detail on some of the topics that you've covered. First bucket, capital allocation. I was wondering if you could speak a little bit to -- if Peabody has a total debt reduction target specifically, if you could quantify that? That's my first question. James Grech: Yes, good morning, David. On capital allocation, as we said, everything we do is with a keen eye to increase shareholder value. And we've said for a while now that the repayment of the senior secured debt is the pathway to do, and that's the first step. Since the start of 2021, we've repaid more than $625 million of debt. We expect to continue that course and so we've eliminated the secured debt. We have about $600 million of that remaining. And once that's repaid, we'll then look to address the unfunded $320 million LC facility that matures in 2024. That facility is used right now for noncash collateral for the reclamation liabilities. That needs to be replaced as we continue to fund long-term reclamation liabilities. David Gagliano: Okay. And then on the North Goonyella restart, I know it's still being evaluated. Is there a range? Historically, there was a range and it was fairly wide. Is there a range that you can give us in terms of potential capital expenditures associated with the options you're looking at in North Goonyella? James Grech: Yes, Dave, we haven't settled on those numbers yet internally. It's still part of our evaluation. We're looking at the mine plan. So when we're ready to give that to you, Dave, we will, but it would be premature for me to do that at this moment. David Gagliano: Okay. And then on the shareholder return side, any update on negotiations with surety bond holders regarding restrictions on buybacks and dividends? James Grech: Yes. Just as a reminder, both our debt documents and the surety agreement prohibit shareholder returns at this point. We need to address the secured debt in the LC facility, which I spoke about earlier. That will position us to have further discussions with the surety providers. And we're looking really to reach a long-term plan to fully fund our final reclamation obligations. David Gagliano: Okay. Now switching gears over to the market commentary and Peabody's position here. First of all, on the thermal, domestic thermal, thank you very much for the price for 2023. It's helpful for the PRB volumes that are committed and priced. Of that 68 million, I think 7 million were priced in the second quarter. And obviously, those -- the overall price is an average of all the prices that we've seen as the contracts were layered in. My question is what was the price for the 7 million tons of PRB coal that was committed in the second quarter for 2023 delivery? James Grech: Dave, we'll have to -- I mean, we may have to catch that one up with you later. I don't have that type of number with me, the specific number that you're asking. David Gagliano: Sure. It doesn't have to be specific. Is it -- I'm trying to get at what the current market is for 2023 contracts relative to that average, that $13.28. Can you give us a framework as to relatively speaking, how high it is relative to that $13.28? I'm guessing it's higher. James Grech: Yes. Again, I'll use the same comment I used with some of the other calls. We're still in negotiations for other coals that we have there and some of the coal we sold was the 8,800 and the coal we have left to sell is the 8,800. So since we're still in negotiations, Dave, I'm just not going to comment on those prices right now. David Gagliano: Okay. And then just in terms of the approach to the volumes out of the Powder River Basin for 2023, assuming rails fix themselves, what is a near-term maximum quarterly volume, if everything goes well out of the PRB for Peabody? It's my first part of that question. And secondly, is Peabody evaluating plans to increase volumes in the PRB in 2023? And would Peabody spend capital to expand capacity in the PRB? That's it for me on that piece. James Grech: Yes, David. Listen, we had to take our guidance on the PRB given the rail service. We were -- our top end of our old guidance was 95 million tons. Certainly, the demand is there. Rail has been the confining factor to-date, assuming that rail is fixed and in regular conversations with rail providers and expect that to be fixed here as we go through the second half of this year and be back to full service levels next year. I would expect that we would be at those levels that we had in our original guidance. Certainly, demand continues to be strong with all the pressures on natural gas prices. Thermal is certainly attractive here. So strong demand, I would say that without giving any guidance for '23 is we're not prepared to do so, I would look at it as consistent with our original guidance for this year. David Gagliano: Okay. And is there capital expenditures for incremental capacity additions in the PRB under evaluation? Are there capital expenditures under evaluation at this point? James Grech: Yes. If you look, we did increase those tonnages or planned tonnages this year from the prior year, certainly did that in the Midwest as well. There's certainly always under consideration how we can increase tonnage around the margins. At this point, it's mostly equipment. David Gagliano: Okay. And then -- sorry, I'm going on, this is my last one. If the world stays where it is, obviously, netback pricing is more attractive in the export market, I think even out of the PRB. I was wondering if you could just frame from a realistic perspective, the order of magnitude of Peabody's U.S. thermal that could shift into the global export markets in 2023. James Grech: Sorry, Dave, I want to make sure I understood your question was the last part of it was how much of the U.S. met coal could shift into the thermal markets. Was that the question? David Gagliano: Sorry. No, if I said, met, I apologize. What I was asking was how much realistically would Peabody export out of the U.S. on the thermal side, incremental in 2023 versus current given where netback prices are now? James Grech: Yes. Well, in the U.S., there's a lot of assumptions there. You mentioned the rail. And our first commitment is to our existing contracts and our long-term customers. And to us at the moment, every ton that you shift to export is one you take away from a domestic customer that you're not shipping to. So we want to make sure that we are loyal and serving the needs of our base customers before we start shipping coal out of the country for commitments that we have already. The second part of that becomes -- is their port capacity and is the rail capacity available. And right now, there is an incremental rail capacity available and the ports are almost in the same situation. So it's something that we take a look at, Dave, but I -- any substantial tons, I guess, is what you're getting at. I don't see that occurring for us even though we take a look at it, but I don't see that being something that we'd be doing with our PRB for next year. Operator: Thank you. And there are no further questions. So I would like to turn the conference back over to Mr. Jim Grech for any additional or closing remarks. James Grech: Yes. Thanks for everybody for joining us today. And again, as I said at the beginning, I'd especially like to thank our employees for remaining focused on safety and continuing to execute on our various initiatives and also thanking our customers, investors, insurance providers and our vendors for your continued support. Operator, that concludes our call. Operator: Thank you. That does conclude today's teleconference. We do appreciate your participation. You may now disconnect.

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. Please go ahead. Alice Tharenos: Good morning, and thanks for joining Peabody’s earnings call for the first quarter of 2022. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you’ll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I’ll now turn the call over to Jim. Jim Grech: Thanks, Alice, and good morning, everyone. In the first quarter, we set the stage to realize strong results for the remainder of the year. Our operations performed well given the operational and logistical issues faced. And with strong market dynamics persisting for our products globally, we are poised to deliver a strong 2022. During the quarter, we overcame production and logistic challenges in Australia related to record rainfall and COVID-induced labor shortages and instituted a recovery plan to recapture volumes over the remainder of the year. While progressing efforts to increase volumes at our U.S. mines, we strengthened the balance sheet and mitigated financial risks. And we advanced several strategic initiatives with the launch of R3 Renewables, progression of our U.S. sales strategies and expansion plans for the seaborne platform. Our focus remains to advance actions to position the Company to be resilient in all market cycles by capturing expanded margins through production and sales strategies, while remaining long-term cost competitive and reducing our debt levels. Before I expand on the quarter, I would like to thank our global employees for their continued focus on working safely and efficiently, particularly given distractions from weather, COVID, labor shortages and logistical challenges. Our success is a result of the dedication and efforts of our talented workforce. I’d like to specifically highlight the significant achievement of the Shoal Creek and Francisco prep plant teams, who both have now gone over four years without a reportable injury. Turning to the market. Across the globe, all coal price indices and demand in each of our market segments continues to be strong. The near-term outlook for all our operating segments continues to be favorable with strong market indicators, increased global demand and continued supply constraints. Seaborne coal market fundamentals remain robust with significant volatility in the markets driven by the Russia-Ukraine conflict. The EU total ban on Russian coal imports has European buyers seeking to mitigate exposure to Russian coal imports and has caused an upswell on already elevated demand and pricing for supply from regions outside of Russia. Japan has now also announced the ban, albeit with an unclear time line. And we anticipate this to further impact market dynamics of the already tight and turbulent seaborne market. Within the seaborne thermal market, demand and supply balance is stretched. Thermal coal supply was already pressured prior to the Russia-Ukraine conflict with Indonesian producers impacted from wet weather and a January government imposed export ban on coal, and Australia’s producers impacted by heavy rains and COVID interruptions. Overall, we expect the global thermal coal prices to remain elevated and the market volatile as certain importers look to fuel demand of coal outside of Russian supply and limited incremental supply available in the near term. Within the seaborne metallurgical market, market indicators are robust with global steel production outside of China at decade high levels and steel product margins remaining strong. Ongoing impact from COVID, wet weather and logistics constraints continues to suppress global met supply. Strong demand persists from buyers attempting to mitigate Russian exposure, especially for PCI products, given Russia accounts for about 35% of global traded volume. China’s unofficial ban on Australian coal remains in place and continues to redistribute traditional trade flows. Energy shortages in some markets present a risk to industrial activity but the underlying market fundamentals remain constructive with strong demand and pricing. In the United States, overall electricity demand increased more than 3% year-over-year, positively impacted by weather. In the first quarter, electricity generation from thermal coal declined year-over-year due to strong comparatives in February 2021 as well as record renewable generation. Coal share of electricity generation declined slightly to approximately 22%. Coal inventories have continued to decline since December 2021 with a reduction of approximately 5% or 5 million tons. Utility consumption of PRB coal rose approximately 1% compared to the prior year period. Combined, this increased PRB demand with increased demand for U.S. export coal due to the Russia-Ukraine conflict, and it makes for U.S. market as very tight with the supply side being pushed even harder with its logistic challenges. Natural gas prices have hit high to above $7 per MMBtu, levels we have not seen since 2008, and are expected to remain high for the remainder of 2022 due to record demand for LNG exports, relatively moderate production levels and storage levels below the five-year average. With these dynamics, we’re seeing U.S. thermal coal demand remaining strong with recent increases in sales proposal requests and contracting for 2023 at prices above our 2022 averages. All these dynamics set a compelling stage for 2022 in terms of demand and pricing of our coal products. Now turning to the first quarter. As projected, our first quarter sales volumes were below ratable levels across the platform as we set the stage for stronger results as we progress through the remainder of the year. In our seaborne thermal segment, after severe rains in the fourth quarter, our mine sequencing reestablishment plans were hindered by further record rainfalls and COVID-related staffing shortages in the first quarter. Additionally, we started a scheduled longwall move at Wambo Underground. Against these production challenges, we drew down inventory to deliver sales in line with guidance and instituted a recovery plan to recapture full year projected volumes over the remainder of 2022. And with an eye to the future, we set our development efforts at Wambo Underground for three additional longwall panels that will extend the mine life until 2026. Our seaborne met segment performed as projected, with higher volumes anticipated as the year progresses. At Metropolitan, we commenced a longwall move, which is now completed. And at Shoal Creek, we continued to ramp up longwall production in the quarter, producing 270,000 tons while only selling 70,000 tons, building inventory that will be drawn down in the second quarter. And we expect to receive prices substantially in line with other prime high-vol A type coals. The CMJV saw higher costs and lower volumes as compared to prior quarters as a result of timing of mine sequencing, which has higher coal production in the second half of the year. We are on track with development of Moorvale South at our CMJV complex, with first coal anticipated midyear. Now, outside of our operating mines, our 50% ownership share of Middlemount continues to benefit from strong metallurgical market dynamics and productivity improvements, delivering 500,000 attributable tons in the first quarter. Our PRB sales volumes were reflective of rail performance and our investment to ramp up production for following quarters. And costs for both our PRB mines and other U.S. thermal mines increased as a result of higher fuel prices and onetime costs. In the PRB, as we work through logistics challenges to meet strong annual customer demand, we’ve been setting the stage to deliver higher volumes for the remainder of 2022 by continuing to remove overburden, completing equipment overhauls and recruiting and training an extended workforce. And in the Midwest, where we are not experiencing logistic challenges like the other basins, we are executing on the development of several projects at incremental volumes this year. Demand for this product remains strong, and we continue to place new business with both existing and new customers. We continue to explore sales strategies that position us to be the long-term producer of choice, providing our customers long-term supply security and capturing strong market prices. In the PRB, for 2023, we have approximately 59 million tons committed, while our other U.S. thermal segment is essentially committed for 2023. We have also expanded our value offering for our customers by strengthening our ESG commitment to better support the ESG ambitions of our stakeholders. We believe that investments and practices that support the net zero emissions targets can be value adding and complementary to being a coal producer of choice. Our commitment includes establishment of the emissions reduction targets for operations and taking action on a pipeline of projects targeted to meet emissions reduction goals by leveraging our existing assets and new technology. As an important step forward in supporting our ESG ambitions, this quarter, we launched R3 Renewables, a renewable energy joint venture formed to pursue the development of utility scale solar and battery storage on 6 tracts of previous coal mining land in Illinois and Indiana. These projects not only create value from the existing assets, but also allow us to better support our customers’ net zero emission ambitions. Our vision for the future is simple. We want to continue to strengthen our position as a coal producer of choice. We will do this by maintaining financial strength, delivering a diversity of products to support our customers’ needs, practicing operational excellence and championing ESG practices. This will allow us to be resilient in all cycles and to grow with our stakeholders. We are progressing this vision through multiple strategic initiatives. And our met platform, in addition to advancing development of Moorvale South to improve quality and extend life at the CMJV, we advanced project activity to potentially land to the south working with North Goonyella and developed 70 million tons of reserves. And in our seaborne thermal platform, we have begun development of three additional longwall panels to extend the life of the Wambo Underground until 2026. In the U.S., we continue to implement sales strategies and plans to capture short-term returns on incremental volumes and to give us flexibility in our mine plans to meet changing customer demand. Some examples of these activities are expanding into new areas at our Wild Boar complex in the Midwest and PRB refurbishments. And most importantly, we remain focused on the financial strength of the balance sheet. This quarter, we made additional debt repayment and completed a convertible notes offering. I’ll now turn things over to Mark to cover the financial details. Mark Spurbeck: Thanks, Jim, and good morning, everyone. First quarter coal sales were over $1 billion, a 58% increase from the prior year, a result of substantially higher realized prices from each of our operating segments. Costs were impacted by higher sales-sensitive costs, broad inflationary pressures and investments in the U.S. thermal platform to meet full-year production volumes in response to strong customer demand. We recorded a net loss attributable to common shareholders of $120 million or $0.88 per share. This included a $301 million charge for unrealized mark-to-market losses from coal hedging activities and a $24 million loss on early debt extinguishment. Absent these items, net income would have been substantially higher than the prior year period. We reported adjusted EBITDA of $327 million, more than 5 times the $61 million reported in the prior year quarter. Turning now to segment results. The seaborne thermal segment generated EBITDA of $91 million, less than the fourth quarter due to lower volumes and higher costs, and the delivery of 264,000 metric tons of Wambo coal at $84 per ton under the hedge program and 215,000 metric tons priced in 2021 on average at $116. The segment sold 3.8 million tons in the first quarter, about 575,000 tons lower than full-year ratable production, as expected. Both production and cost per ton were impacted by record rainfall, COVID-related staffing shortages, higher overburden removal and the start of the longwall move at Wambo Underground. As part of the seaborne thermal segment, Wilpinjong shipped 3 million tons, including 1 million export tons. Costs increased to $28 per ton due to higher overburden removal costs and staffing shortages. Wilpinjong realized an average sales price of $50 per ton, higher than the prior quarter, despite lower export sales, generating an EBITDA margin of approximately 43%. Wilpinjong recorded $64 million of adjusted EBITDA for the quarter and had over $210 million of cash at March 31. The seaborne met segment generated EBITDA of $181 million, higher than the prior quarter as average realized prices of $258 per ton compared favorably to cost of $113 million, resulting in 56% EBITDA margins. The segment delivered expected volumes for the quarter of 1.2 million tons, about 500,000 tons less than full year ratable production due to the start of a longwall move at Metropolitan and mine sequencing at the CMJV. Costs per ton were up from the fourth quarter due to higher royalties, resulting from higher realized prices and the lower volumes. In the U.S., our mines delivered $58 million of EBITDA. The PRB mines shipped 20.6 million tons in the quarter. Costs per ton increased $1.81 compared to the fourth quarter with more than $1 of the increase related to onetime costs to achieve higher expected production levels for the remainder of the year. Higher fuel prices and other inflationary pressures also impacted costs during the quarter. The other U.S. thermal mines shipped 4.2 million tons while production increased 175,000 tons to $4.4 million. Costs increased due to higher fuel prices, onetime activities to enable higher production and certain rehabilitation costs at Twentymile. Higher realized prices in the first quarter increased segment EBITDA margins to 25%. Next, a quick update on financing items. We continue to demonstrate our commitment to strengthen the balance sheet. We retired an additional $42 million of senior secured debt in the quarter and utilized proceeds from the $320 million, 3.25% unsecured convertible notes offering to retire higher cost senior secured debt and extend maturity to 2028. As a result of the unprecedented upward volatility in Newcastle coal prices, we had $482 million of cash posted in support of our coal hedges at March 31. It is important to note, we expect to recover all of this cash as we deliver the underlying physical coal over the next 15 months. In light of volatile cash margin requirements, we completed the previously announced financing facility and drew $225 million, which was fully repaid in the quarter with proceeds from the sale of 10.1 million shares under the related ATM program. We also reduced exposure to additional margin requirements in the event of even higher prices by converting 750,000 hedge tons of fixed price sales. These transactions eliminated further margin requirements on the underlying tons and resulted in a return of approximately $50 million of exchange-related initial margin. Our remaining hedge exposure is 1.4 million metric tons with 900,000 of those tons projected to settle over the remainder of 2022. At March 31st, we had $848 million of cash, cash equivalents and restricted cash. Now, let’s turn to our 2022 outlook. With the first quarter investments and planned production levels in subsequent quarters, we are maintaining full year production and cost targets. In the seaborne thermal segment, costs per ton for the full year are anticipated to be at the higher end of the guidance range due to production challenges in the first quarter, continued inflationary pressures and increased royalties due to higher anticipated prices. Based on price volume and more than 5 million export tons exposed to currently much higher spot prices, including 2 million tons of Newcastle benchmark coal and 3 million tons of higher ash Wilpinjong coal, stronger margins are expected for the remainder of the year. Second quarter, we expect production and cost impacts from Wilpinjong’s elevated overburdening removal rate to continue as we reestablish mine sequencing and Wambo completes the longwall move. Second quarter seaborne thermal export sales are expected to increase to 2.2 million tons with 1.2 million tons priced at an average of $95 and 700,000 tons of higher ash product from Wilpinjong and 300,000 tons of Newcastle benchmark coal unpriced. Moving to the seaborne met segment. Second quarter volumes are anticipated to increase to 1.6 million tons as Shoal Creek continues to ramp up. Cost per ton for the quarter are expected to be higher than the first quarter due to a higher mix of Shoal Creek coal, longwall restart costs at Metropolitan and mine sequencing at Coppabella. Although we have considered impacts to our full year guidance, continued uncertainty regarding COVID staffing shortages and supply chain disruption exist and may negatively impact our seaborne operations beyond the guidance provided today. In the PRB, production is anticipated to ramp up through the third quarter to meet higher contracted customer demand. Full year costs for the U.S. platform are anticipated to be at the higher end of guidance due to widespread inflationary pressures. In the second quarter, PRB sales are expected to be higher than the first quarter, assuming rail performance does not further diminish. Other U.S. thermal volumes are expected to increase to 5 million tons. Costs for both segments are expected to be lower in the first quarter, as a result of higher volumes and lower onetime investment costs. Lastly, we will maintain our disciplined approach to capital allocation, further reducing debt. In summary, first quarter results reflect our investments in building a platform for improved results for the rest of the year. This was achieved despite the challenges we face. And we are on track to deliver full year volumes with higher margins and increasingly strong cash flows across all segments for the remainder of the year. I’d now like to turn the call over to questions. Operator? Operator: Thank you. [Operator Instructions] Mr. David Gagliano with BMO Capital Markets, please go ahead with your question. David Gagliano: Okay. Thanks for taking my questions. Obviously, there’s quite a bit going on within the company with regards to the Wambo hedges and PRB costs that should come down and all that stuff. So, we’re still weaving through it on our side. So, I’m going to actually cut right to the cash flow question. Cash from operations was a negative $273 million in the quarter. Can you just -- we don’t have a full, I don’t believe, cash flow statement. I think that comes in the Q in a few days. Can you just give us a sense as to what were the main drivers for the big negative in there? I think, there’s some fairly meaningful onetime cash outflows. That’s my first question. Mark Spurbeck: Good morning, David. It’s Mark. Yes, negative operating cash flow. That is largely due to mark-to-market -- unrealized mark-to-market on the Wambo coal hedges that you referenced. It was $352 million for the quarter of additional margin that’s been posted. There’s also working capital charges, building inventory. It’s timing of AP, which is about $110 million included in that. David Gagliano: Okay. Sorry, it was $352 million of an actual cash outflow, which is the previously disclosed cash outflow from the hedges. Is that correct? And then, there was $110 million working capital build as well on top of that? Mark Spurbeck: That is correct. David Gagliano: Okay. All right. That’s helpful. And then, just along those lines, I know you’ve been asked this question, not just by me but by me and others. You mentioned capital allocation focus is debt reduction. Setting aside the first quarter for a second here, can you give us as a sense as to additional plans regarding shareholder returns, addressing surety bond covenants and updated thoughts there? Mark Spurbeck: Yes. Dave, a couple of things. We’ve been very transparent that we want to reduce the level of debt the Company has outstanding. We are very pleased with the 3.25% convertible note that we completed in the quarter. And I would look at further debt reduction going down to eliminate all the other senior secured debt and just leaving that convertible debt outstanding. So, that’s job number one and getting that done. Once we have senior secured debt repaid, we’ll look to address the $325 million letter of credit facility, which backstops the surety bonds, as you mentioned. So, we’re going to continue to look at funding, the surety obligations for future reclamation. And once we are comfortable with that, certainly, everything we do is in the interest of shareholder value. We would be looking at opportunities to invest in organic opportunities. North Goonyella, that Jim mentioned, is one prime example of that. Also, return of capital to shareholders would be on the table. All things considered, we need to take care of the senior secured debt, which would prohibit those shareholder returns first. David Gagliano: Okay. That’s helpful. And then, in terms of the 2023 PRB commitments, there’s a bullet, I think, in the press release, it says increased 2023 PRB committed sales to 59 million tons. Can you give us more information on just an average price for that 59 million tons that’s committed for 2023? Jim Grech: Yes. Hey Dave, Jim Grech here. The 59 million tons for next year, which is ahead of our, I’ll say, our usual pace for selling coal for the following year at this point in time. And we also have active RFPs in front of us for more potential sales for ‘23 and ‘24. It’s -- we’re seeing from the RFP, the willingness from the customers to go out for multiple years. So, that is a change from what we’ve seen in the past, and it led to that strong sold position for us at this time of the year. The specific pricing, Dave, we’re not going to give out at this moment, but I will say that our average pricing so far is higher than what our average PRB pricing is for this year. So, if that helps some and give you some directional guidance as to where we’re going. And I know you know the complexity of our PRB with the different qualities. We run about a -- average Btu of about 86.70 overall with our portfolio, too. I just wanted to point that out. So on average, we’re seeing numbers higher than we have for our average prices for this year. David Gagliano: Okay. That’s actually helpful. Thank you. And then just on the volumes for the PRB next year, target volume this year, 88 million to 95 million. What’s the early read on volume growth for 2023 in PRB for Peabody, given quite a dynamic U.S. thermal coal market all of a sudden? Jim Grech: Well, I would say, there’s two factors into that, Dave. One is the demand there, and the demand is very strong for us this year and next year. The second piece of that is the ability for all PRB producers to deliver the coal with the rail challenges that we have and continue to have. I feel good about both of those areas over the long run of this year, later this year. The railroad is staffing up. It’s going to take time for them to get the crews in and get them trained, but that capacity will be there later in the year, which should lead us to have the opportunity to ship as much coal or more this year, and the demand is there for next year. So, we’re not giving guidance on ranges for next year. But if things keep lining up as they are, strong demand, our operations with the first quarter investment that we’ve done are in good position to produce and the railroad coming on stronger as the year goes on, I think next year could be a very good year for tonnage for us in the PRB. David Gagliano: Okay. That’s helpful. Thanks. And sorry, just one quick last one. Just really wanted to give the opportunity again to clarify. Perhaps there may be some confusion out there regarding how the cash outflow works for the unrealized hedge that you flagged earlier. Can you just clarify that that will all -- I mean, that should come -- all come back to you once the volume is produced, correct? Mark Spurbeck: Yes. Dave, that’s right. So essentially, today, we have 1.4 million tons outstanding. With regard to the Wambo hedges at an average of $84 per metric ton, think of $1 per ton for $1.4 million or whatever above that -- dollar for dollar as the prices are above that $84 level, we have to post that margin. It’s very important that we keep the trade book open and we post this margin. And if we were to close it, we lock in those losses, is something we won’t do. And when we do deliver that coal, we will be selling it for the spot prices, which will make up the difference between the $84 and what we posted in March. Operator: And we have Lucas Pipes with B. Riley Securities with our next question. Lucas Pipes: Hey. Good morning, everyone. I want to talk a little bit about Q2. So, on the seaborne thermal coal side, you expect sales of 2.2 million tons. You have 1.2 million booked at $95, so that leaves least 1 million tons. And I think you said that 700,000 tons, Wilpinjong, and 300,000 tons Newcastle. And the Wilpinjong price is not the most transparent for investors to observe, given that’s the API 5, I believe. So, could you maybe point as to a reasonable range for Wilpinjong prices in today’s market, so we have a good outlook there on Q2 realizations? Thank you. Mark Spurbeck: Good morning, Lucas. Yes. So, on the -- you’re right, for seaborne thermal, there’s 2.2 million tons of export tons for the quarter. 1.2 million of that is priced at $95, as you said, with the 1 million tons that are unpriced, 700,000 relates to the high ash Wilpinjong product. That price is at a discount to API 5. API 5 today is roughly $190 a ton. You need to take about a 10% to 20% discount off of that to get to the Wilpi product. And if it’s higher ash, it could be even a little bit higher discount to that. And then, there are 300,000 tons of Newcastle, essentially benchmark product that should price in line with the forward curve. Lucas Pipes: Got it. And all the prices you mentioned are metric tons. So, for your 1 million tons of short tons, you do the metric short ton conversion as well? Mark Spurbeck: Exactly. Lucas Pipes: That’s helpful. Got it. And, would you sell on the prompt month for the Newcastle tons or prompt quarter? What’s a good benchmark there to look at? Mark Spurbeck: Probably a lot of those tons will be on the JRP, or Japanese reference price for those 300,000 tons. That has not yet been settled for this year. As a reference point, it was only $110 last year, but it should be in line with kind of a forward view for the year off of that $325 current price. Lucas Pipes: Okay. That’s helpful. Very helpful. Thank you. I appreciate that. And a similar question for met coal. So you expect 1.6 million tons, you have 200,000 tons hedged at $418. What’s a realistic composition for the sales price of that open 1.4 million tons of met? Mark Spurbeck: At Wambo, yes, it’s -- it’s essentially about 85% of premium hard coking coal. We look at our -- at a met platform and about an 85% discount to premium hard coking coal. Lucas Pipes: Sorry. You said that was 85% hard coking coal? And pricing at 85% -- pricing also at 85% of the benchmark? Mark Spurbeck: Now, to be clear, on a portfolio level for met coal, we achieved 85% of the premium hard coking coal benchmark price. There’s various -- there’s half a dozen different products or more. Lucas Pipes: Got it. That’s helpful. So, the $418 that you booked on the 200,000 tons, that would be -- in this market, could be -- even a conservative indication of where you’d sell the remaining 1.4 million, given where prices have been quarter-to-date? Mark Spurbeck: Yes. It’s $418 on 200,000 tons priced, and you got that 1.4 million or whatever unpriced at a discount to premium hard coking coal. I don’t think you’d be much above the price position, but it’s completely price-dependent, as you said. Jim Grech: Lucas, hi. Jim here. As an example, maybe on the pricing that we’re seeing at the moment. In our remarks, we mentioned that Shoal Creek had produced 270,000 tons, but we’d only sold 70,000 of it. So, we have some inventory move. And so far month-to-date in April, we moved about 127,000, 129,000 tons of it at numbers in the $420 range month-to-date in April. So, that’s the type of pricing we’re seeing on the Shoal Creek product right now. Lucas Pipes: Very, very helpful. I really appreciate the color. Jim Grech: That’s on a short-term basis -- that’s on a short-term basis, too, just so keep it clear. Lucas Pipes: Volume and price, respectively? Jim Grech: Yes. Lucas Pipes: Super. On the hedge side, it seems like you’ve been having to deal with that last October, so -- and earlier this year and now, possibly again today, but hopefully, that noise is starting to get cleared up. So, you have 900,000 tons for 2022, 500,000 tons for 2023, should we think about kind of 300,000 tons per quarter for the rest of the year rolling off for the 2022 hedge? Mark Spurbeck: Yes. Lucas, it’s not exactly flat. So, you’re right on the tons for the rest of the year. Just under 450,000 tons are going to roll off in the second quarter of this year. So, that will leave us with less than 1 million tons remaining at June 30. And just for reference, I’d like to -- if we go back, it’s important to remember, we place -- we put these hedges in place early in 2021 to extend the life of the Wambo Underground mine. Without it, we would have sent the cruise home last year. And as you saw today, we just announced that we’re developing the next three panels to extend that mine life out for several more years. So, while we’d love to give the spot prices for coal this year, we’re going to be profitable this year even with those hedges. And we’ve extended -- we kept that optionality open. Now, we’ve been able to extend that life for several more years. Operator: Nathan Martin with The Benchmark Company has our next question. Nathan Martin: Hey. Good morning, everybody. Thanks for taking my questions. Maybe just a follow-up on that last one that Lucas -- with the conversions on the hedges to fixed price, do you guys expect to possibly convert any more of those hedged tons to fixed prices in the near future? Mark Spurbeck: It’s something that we continue to look at, Nate. It is challenging. If there’s an opportunity to do it at favorable terms, we will continue to do that, finding counterparties that want to lock in essentially today’s prices or the forward prices. And there is a premium for physical to the forward. So, we want to maintain all of our optionality for that P&L. So, we continue to look at it. We’re going to maximize shareholder value and maximize returns of the Company. We do feel with the remaining hedge position in the Company’s current liquidity that we’re in a good spot from a liquidity perspective. Nathan Martin: And just to clarify, I think you said that the 750,000 you converted reduced future margin requirements by about $50 million. Is that right? Mark Spurbeck: Yes. So, it eliminated any future margin requirements from changes in prices on those tons. And then, there’s $50 million of exchange related to initial margin, just to open the positions. That was returned once we converted the fixed physical sales and don’t have an open hedge position, then we got about $50 million of margin return back to us. Nathan Martin: Okay. Got it. Got it. Maybe shifting over to the cost side. I mean, you guys -- despite the challenge in the start of the year, maintained all your buyer cost guidance ranges it looks like across the segments. Maybe just talk about your confidence to get within those ranges. Is it a function of higher sales volume as we move towards the back half of the year? Obviously, pricing should be higher, some advantage of the headwind, inflationary pressures you talked about. And then maybe on the transportation side with rail service, hopefully, that will start cooperating as well. So just how do we think about that and maybe any additional onetime costs similar to what we saw here in the first quarter? Thank you. Mark Spurbeck: Yes. Maybe I’ll start and work backwards from your questions. On the onetime costs, really that’s our investments in the U.S. platform, about $1.08 in the U.S. Really, that was to again set room on pit inventory, so a lot of overburden, removal costs as well as some equipment refurbishments and onetime kind of contractor mobilization costs. That goes away essentially going forward. So, we expect a reduction there. Similar in the other U.S. thermal portfolio. There was some headcount and some pit development and a dragline refurbishment. So, really drove up some costs here in the first quarter. Again, those are behind us. Obviously, volume in the PRB is critical. And as Jim mentioned, rail is a key issue there, getting those volumes out with the rail is going to be important to achieving those overall costs. On the seaborne platform, wet weather and the record rainfall and COVID-related absenteeism or just staff shortages, really drove up costs significantly in the first quarter. There’s also a longwall move at Wambo that started, and that will be finished up here in the second quarter. So, those costs all in probably drove up costs $8 or $9 in the seaborne platform this quarter. We do expect cost to continue to be elevated in the second quarter as we kind of reestablish mine sequencing at Wilpinjong and recover from the record rainfall. And I think we -- and that was a really good performance in the first quarter. We do expect that to tick up with a higher proportion of Shoal Creek coal in the second quarter as it continues to ramp up and finish out a real low-yielding panel right now. But, when I look for the rest of the year and getting those guidance, I mean -- and we mentioned it in my earlier remarks, but certainly, the COVID impacts, the staffing as well as supply chain logistics continues to be a wildcard and hopefully rain. I mean, we’re still not completely out of the wet season and rain could have an impact on the seaborne platform. Jim Grech: Nate, what I would say, though, is the investments that Mark referenced that we made in the first quarter and our fleet in general, our mines, whether it’s in Australia or the U.S. are in good shape and they’re ready to go in the second quarter and the rest of the year. We’ve increased our staffing. We’ve capitalized and got the equipment in good shape to run. We’ve got our development caught up and ready to go. So, our fleet in general is ready to go to meet the increased demand. And I would say the biggest potential headwind we have is the things that we can’t control being, as Mark just said, weather, COVID, and rail performance. But operationally, I said, the investments we’ve made have put us in a good position to produce well for the rest of the year. Nathan Martin: Very helpful, guys. Thank you. And then, maybe Shoal Creek, just for a second, Jim, you mentioned shipments rolling out 71,000 tons, I think, on 270,000 of production, building some inventory there. As far as the ramp [ph] is concerned, does everything still seem on schedule to kind of hit that 1.5 million ton level this year? And when should we start to see the sales pick up to kind of match production, because obviously, some of you guys have great demand for that coal, given the current marketplace? Thanks. Jim Grech: Yes. Those sales were supposed to occur more into the first quarter. So, they slid into the second quarter. And so, that’s why we were off to such a good start in April at the mine because those are actually March sales. So, we expect the sales to be consistent over the rest of the year. And we expect mining conditions to improve. We’re in a panel right now that we’re going to get out of in May as some challenging yield and getting the better mining conditions. And so, we should see our cost structure stabilizing upon improving it as we get through the rest of the year. So, sales are good. The mine is coming along well from having been shut down. Like I said, we should be getting better mining conditions, say, June forward for the facility. Nathan Martin: Just wondering, Jim, the slippage is at largely transportation related or something else? Was it a rail or barge, et cetera? Jim Grech: It’s just the congestion down the ports, down there in the Gulf just had things back up... Nathan Martin: Got it. And then, just one final one. Again, Jim, to you, I think. North Goonyella, you touched on it very briefly in your prepared remarks. I think you said last call, hopefully you’d be in a position to give more info on that project by this call. So, I was just hoping if you could share your current thoughts, maybe any updates on time line, capital costs, volume, et cetera. That would be helpful. Thank you. Jim Grech: Yes, Nate. So right now, we are currently installing main mine fans to assist future underground operations and working on surface conveyors. So, all of the work is on the surface. And looking forward, we’re still finalizing our cost and estimates and engineering plans and looking at further reventilation leading to reentry into the mine. So, we’re making progress, but the specifics that you’re asking for, we still don’t have them settled. So, I’m just not going to -- not prepared to comment on time line and costs, other than the detail that I gave you. We are making progress. The reentry into the mine would take us down. We plan to go toward our southern reserves. We have about 70 million tons of reserves that are available to us. So, looking forward, that’s the goal. Nathan Martin: Any expectation, Jim, at this time before you make a decision whether to move forward or not? Jim Grech: We have to refine the engineering plans and work with the QMI there to make sure that they’re acceptable and then we can make -- get better cost estimates. Just doing that process of making sure our engineering is sound, our cost estimates are sound before we would make those types of decisions. Operator: And that does conclude our question-and-answer session. I’d like to turn the call back over to Mr. Jim Grech for any additional or closing comments. Jim Grech: Thank you. And as we stated here a few times in the call, we had some adversity in the first quarter with the weather and COVID and the railroads, and it was also a period of investment in our fleet getting ready to serve our customers and the demands that we have going forward in the rest of the year. So, we’ve been successful on that, and we are there. Our mines are ready to go. So, we’re looking forward to a good finish with the second, third and fourth quarter for this year. So, thank you all for joining us today. I’d especially like to thank our employees remaining focused on safety and for continuing to execute on our various initiatives. And I’d also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: Thank you. And this concludes the Peabody Q1 2022 earnings presentation. Thank you for participating.

Operator: Good morning, ladies and gentlemen, and welcome to the Peabody Q4 2021 Earnings 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, February 10, 2022. I would now like to turn the conference over to Alice Tharenos, Vice President of Investor Relations and Communications. Please go ahead, ma’am. Alice Tharenos: Thank you. Good morning and thanks for joining Peabody’s earnings call for the fourth quarter of 2021. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you’ll find our statement of forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. With that, I’ll now turn the call over to Jim. Jim Grech: Thanks, Alice, and good morning, everyone. Peabody recorded robust fourth quarter results, demonstrating the capability of our diverse portfolio of mines, which continues to benefit from strong global market fundamentals driven by the vital necessity for coal to produce reliable, affordable energy and steel to fuel the global economy. Overall, our operations performed well and were aligned with our expectations, delivering volumes and results despite industry-wide challenges that were more substantial than we anticipated related to weather and COVID impacts. With strong market dynamics and significant forward sales commitments, we restarted longwall production at our Shoal Creek mine, advanced development of Moorvale South and our positioned for increased production at our U.S. thermal segment to meet near-term demand for our products. Our focus remains advanced options to position the Company to be resilient in all market cycles, by capturing expanded margins through production and sales strategies, while remaining long-term cost competitive and reducing our debt levels. I would like to thank our global employees for their continued focus on working safely and efficiently, particularly in light of meeting the challenges presented by the pandemic. In 2021, our recordable injury rate was the lowest in over a decade, an example of the dedication and efforts of our talented workforce. And for the second year in a row, our Rawhide and Twentymile operations had zero reportable incidents during the year. I’d also like to take the opportunity to compliment the workforces at Shoal Creek and Metropolitan for their efforts and performance during the longwall restarts at these locations. Across the globe, all coal price indices and demand in each of our market segments continues to be strong. The near-term outlook for all our operating segments continues to be favorable with strong market indicators and increased global demand providing a persuasive story for coal and Peabody. Seaborne thermal and metallurgical coal markets are expected to remain robust in the near to medium term, as supply challenges coincided with a period of elevated demand. Indonesia’s January coal export ban, record rainfall and late 2021 across the East Coast of Australia, COVID impacts across the globe, and Russian transportation congestion, all factors contributing to constrained supply for seaborne thermal coal. Additional demand factors included increased industrial production resulting in growing demand for coal-fired electricity generation, high LNG prices resulting in low switching, and peak winter demand in the Northern Hemisphere. These supply and demand factors are combining to create an increased price environment for seaborne thermal coal. The seaborne metallurgical coal market has experienced similar supply constraints as the seaborne thermal market. Demand is benefiting from high global steel output outside of China, incentivized by strong steel product margins. Key important markets consumption is now above pre-pandemic levels. In the U.S., thermal coal market indicators continue to be favorable with increased electricity demand, and higher natural gas prices compared to prior year. For 2021, electricity demand increased 3% over last year, with coal share of electricity generation increasing to approximately 22%. Total U.S. coal burn was up approximately 15% while utility consumption of PRB coal increased approximately 22% compared to the prior year. Looking ahead, total electricity generation for 2022 is expected to grow by another 1% as the economy continued to recover from COVID impact. U.S. thermal coal prices remain elevated as supplies remain tight. Continued strong U.S. exports as a result of high seaborne thermal prices, along with elevated and volatile natural gas prices, reflecting the uncertainty of winter weather and gas storage levels are putting pressure on market sentiment. Coal stockpiles in the U.S. have fallen by approximately 35 million ton, more than 25% since the end of 2020. All these dynamics set a compelling stage for 2022 in terms of demand and pricing for our coal products. Now, turning to the fourth quarter. Our operations generated substantial cash flows, realizing expanded seaborne margins as a result of continued strong market demand. Our teams delivered on our projected volumes for the quarter, despite production challenges. In addition, we continued efforts to capture near-term returns from incremental 2020 U.S. thermal production, with equipment optimizations and new hires. Within our seaborne thermal segment, the Wilpinjong extension and Wambo Open-Cut JV projects have essentially completed development work, with operations reaching full production run rates. Margins continue to expand both due to higher pricing and lower costs. Our seaborne met segment captured margins of $105 per ton due to robust market prices. I’m happy to share that we successfully restarted longwall operations at Shoal Creek late in the quarter and delivered 70,000 tons of high-vol A product into the market at price level substantially in line with benchmark prices. We are on track with development of Moorvale South, which will provide improved quality and extended life at our CMJV complex. We anticipate first coal and development completion in mid-2022. PRB sales volumes were negatively affected by winter weather and COVID impacts to production and rail performance, and costs for both our PRB mines and other U.S. thermal mines increased as a result of higher fuel prices and one-time costs associated with efforts at incremental near-term production to capture market demand. We are being disciplined in adding incremental volume, capturing short-term returns on investments for our stakeholders and remaining focused on the long-term cost competitiveness of our operations. Favorable U.S. coal markets have allowed us to build a strong book of forward business with settlement of several long-term sales agreements and improved prices. We continue to explore sales strategies that position us to be the long-term producers choice, providing our customers long-term supply security. And the PRB at 2021 production levels were essentially fully committed for 2022 and 55% committed for 2023. While the other U.S. thermal operations are essentially committed for the next two years at these levels. Outside of our operating segment reporting, our ownership share of Middlemount delivered 2 million tons of semi-hard and PCI met coal in 2021 with 400,000 tons in the fourth. In the quarter, the operation posted EBITDA margins of 58%, benefiting not only from current market dynamics, but also cost and productivity improvement efforts. Our Q4 results are further validation of the value of our globally diversified asset base, which makes us distinctly unique from other coal companies. Our long-term strategy remains to reweighed investments towards seaborne markets, maximize U.S. thermal asset cash generation and enhance financial strength to debt reduction. We are progressing the strategy with multiple initiatives. In our met platform, we are advancing development of Moorvale South to improve quality and extend life at our CMJV. At Shoal Creek, we’re ramping up longwall production and at Metropolitan and the CMJV, we are maintaining productivity and cost improvements. And notably, we’re looking at the potential to restart North Goonyella utilizing our existing reserves that we control. At Middlemount, we continue to ramp up production with equipment fleets added last year. As Wambo Underground, we’re doing economics for development of additional underground panels. In the U.S., we are implementing plans to capture short-term returns and incremental volumes, and to give us flexibility in our mine plans to meet customer demands, with additional underground production units and development in the ILB in addition to refurbishing and relocating equipment in the PRB. And across the platform, we’re focusing on long-term resiliency by maintaining cost structure improvements that we’ve achieved with continued emphasis on productivity and cost controls and continue to strengthen the balance sheet with debt and legacy liability reductions. I’ll now turn things over to Mark to cover the financials. Mark Spurbeck: Thanks, Jim, and good morning, everyone. Fourth quarter revenue was nearly $1.3 billion, an increase of more than 86% from the third quarter and 72% from the prior year, reflecting robust improvements in seaborne pricing and recognition of $149 million of unrealized mark-to-market gains and financial coal hedges. We recorded net income attributable to common shareholders of $513 million or $3.93 per share. We recorded adjusted EBITDA of $444 million, a 54% increase over the $289 million recorded in the third quarter, and 4 times the prior year results. In the fourth quarter, we generated free cash flow of $427 million, about 25% of our market capitalization, driven by the performance of our seaborne platform, and the return of $110 million of cash margin related to financial coal hedges. Importantly, we continue to execute on our commitment to strengthen the balance sheet. We retired an additional $200 million of senior secured debt in the quarter. For the full year, we retired approximately $420 million, more than 25% of the debt outstanding at the beginning of the year, reducing leverage from 6 times to 1.2 times trailing 12 months EBITDA, or just 0.2 times on a net basis. And just this morning, we announced $106 million repurchase offer for the Wilpinjong term loan and notes. Based on that line, excess cash flows in just the last six months. This offer represents more than 25% of the outstanding Wilpinjong debt. At December 31st, we had $954 million of cash and cash equivalents, an increase of $367 million from the fourth quarter and available liquidity was approximately $1 billion. Turning now to the segment results. The seaborne thermal segment generated EBITDA of $149 million, a 43% increase compared to the third quarter, leveraging a 12% increase in average realized prices. Cost per ton were 5% lower than the prior quarter, primarily due to lower mining ratio, resulting in EBITDA margin of 50%. Heavy rainfall in the Hunter Valley and COVID related staffing shortages reduced overburden removal and constrained shipments, which kept sales volumes for the quarter at levels just above the prior quarter. Wilpinjong shipped 3.5 million tons in the quarter, including 1.6 million export tons. Consistent with third quarter levels, while average costs declined to $24 per ton compared to $26 in the prior year quarter. Wilpinjong realized an average sales price of $48, resulting in the EBITDA margin of approximately 50%. Wilpinjong delivered $85 million of adjusted EBITDA in the quarter, $219 million for the full year and had over $200 million of cash at December 31. The seaborne met segment generated EBITDA of $170 million, a nearly 195% increase compared to the prior quarter. An average realized price of $211 per ton compares favorably the cost of $106, resulting in 50% EBITDA margins. Fourth quarter met shipments were about 100,000 tons higher than last quarter, due to sustained production improvements at Metropolitan and restarting Shoal Creek. Costs per ton were higher compared to the third quarter, due to the Shoal Creek restart, persistent wet weather at the CMJV and higher royalties. Our seaborne platforms across the board delivered 50% margins in the fourth quarter. In the U.S., our mines delivered $60.9 million of EBITDA. The PRB mines shipped 22.5 million tons in the quarter as winter weather and COVID-related impacts to production and rail performance reduced shipments by an estimated 1 million tons. Cost per ton increased $0.75 compared to the third quarter to $10 per ton with about half of that increase related to additional overburden removal and ramping up equipment to achieve higher expected production levels in 2022. Winter weather events, COVID and higher fuel pricing also impacted costs during the quarter. The other U.S. thermal mines shipped 4.6 million tons, slightly ahead of the third quarter, and generated 20% EBITDA margins. Costs increased compared to the prior quarter due to higher fuel prices, and one time activities to enable higher expected production in 2022. Now, let’s turn to our 2022 outlook. Starting with the seaborne thermal segment. We anticipate volume of 17 million to 18 million tons, including about 10 million export tons. Approximately 4 million export tons are priced on average at $80. Costs are expected to increase by about 10% or a little over $3, driven by inflation, fuel prices, royalties, and higher repair spend at Wilpinjong. Based on price volume and about 6 million export tons exposed at currently higher spot prices, substantially higher margins are expected in the New Year. Seaborne thermal sales in the first quarter are anticipated to be approximately 750,000 tons lower than ratable guidance due to a scheduled long, long move starting in the quarter at Wambo and lower volumes at Wilpinjong as a reestablished mine sequencing following the previously mentioned weather events. The seaborne met segment is expected to ship 6.5 million to 7.5 million tons with substantially all tons unpriced, providing significant leverage to the spot market. We anticipate production at Shoal Creek to ramp up during the first half of the year with full year production of about 1.5 million tons. Costs of $100 to $110 per ton are projected to be in line with fourth quarter results. In the first quarter, Seaborne net volumes are anticipated to be approximately 500,000 tons lower than ratable guidance due to lower volume at Shoal Creek as it ramps up longwall production and mine sequencing at the CMJV. Although we are actively managing and we have considered in our guidance, continued uncertainty regarding COVID impacts to our workforce and supply chain exists, and they negatively impact our Seaborne operations beyond the guidance provided today. In the PRB, even a margin per ton is expected to increase 40% in 2022. We are projecting volumes of 88 million and 95 million tons, and have 86 million tons priced at an average of $12.40. And any additional production will be opened currently much higher spot prices. Costs per ton are anticipated to increase about 8%, primarily due to higher sales linked royalties and taxes, higher fuel and certain costs early in the year to increase production above 2021 levels. Other U.S. thermal volumes are planned to increase by up to 2 million tons to 18 million to 19 million, and we have 18 million tons priced $3 above 2021 prices. Costs are anticipated to increase by $1.50 per ton, resulting in higher margins in 2022. Capital expenditures are anticipated to be approximately $190 million with $80 million earmarked for major projects and growth, including Moorvale South development, final equipment delivery at the Wambo JV and additional equipment refurbishment at our U.S. operations. In summary, higher margins across all segments are expected to generate increasingly strong cash flows, capitalizing on favorable coal markets, and in particular our seaborne assets delivering the expected torque from higher international coal prices. Lastly, we will maintain our disciplined approach to capital allocation, further reducing debt to best position the Company for continued success. I’d now like to turn the call over for questions. Madison? Operator: [Operator Instructions] We’ll go ahead and take our first question from David Gagliano with BMO Capital Markets. David Gagliano: Hi. Great. Thanks for taking my questions. And congratulations on the significant improvements and the strong results. There’s a lot covered on those prepared remarks. I just have a few questions for a little bit more detail. But my first one is really a bigger picture question regarding capital allocation. Obviously, balance sheet meaningfully improved, high free cash flow. You talked about a number of internal initiatives which I’ll come back to in a second. What are your capital allocation/capital return plans? And if you could just remind us of any constraints on returning cash to shareholders associated with the debt, surety bonding? And also, what’s a reasonable timeline regarding shareholder returns? Mark Spurbeck: Thanks, Dave. Good morning. I appreciate the comment. Respond to your question about capital allocation, we’re very happy with the progress made in our debt reduction levels. $420 million more than 25% of the debt outstanding at the beginning of the year, still leaves us with funded debt of about $1.1 billion. Listen, we’ve been very clear and transparent that reduction of these debt levels need to continue. We expect to do so in the coming year. From next step perspective, I would say that we look at leverage on a one time EBITDA basis in a mid cycle significantly lower than the $900 million to $1 billion, might be looking at next year plus. I would think we would probably try to get that down to a mid-cycle EBITDA closer to $500 million. So, looking to continue the progress of debt reduction. And your last question I believe was kind of restriction and shareholder returns. You are right the credit agreement, as well as the agreement with our surety providers limits the ability to repurchase shares or paying dividends on our stock throughout the extended duration of those agreements, which runs through the end of 2024. David Gagliano: Does it preclude you or just limits? That’s I’m just curious. Mark Spurbeck: It precludes us unless otherwise agreed to. David Gagliano: Okay. All right. Thanks for clarifying. And then, just on operationally, in your prepared remarks, I believe you mentioned considering restarting North Goonyella. I was wondering if you could talk a little bit about that in more detail. What’s the capital costs timeline with respect to volumes? And presumably the sales process for North Goonyella is now off the table. Is that right? Jim Grech: Hey, Dave. Good morning. This is Jim. Yes, we’re in the very early days of looking at the restarting of North Goonyella. And what I mean by early days is we’re looking at this -- the permitting or rechecking our engineering and the geology of all that data and running economic models on it. So, we started that process. And I think, by the time we get to the next quarter’s earnings call, we can probably have a lot better indication in data as to what we’re looking at. Two things that are addressed, some of the questions you had. One is the timeline and what we are looking at mining to the south with those reserves. And the reason that’s important is we have complete control of those reserves going to the south. And we have many, many years of mining -- longwall mining that we can do by going south. The development to go south is probably about a two-year project. So, we’ll have development coal with the miner sections and then eventually bringing on the longwall. So, whenever we initiate that process of starting the actual development, to longwall, starting to run -- be about a two year process by going to our southern reserve. So as far as capital and all of those other questions you have, again, we’re very early in the process, but as we get further along, we’ll have that information. David Gagliano: And then just last question for me for now. On the PRB, in the prepared remarks, I believe it was mentioned 55% is priced in 2023. Can you just give us a sense when was that priced? And if you use this talk around averages for the volumes that are already priced? That would be really helpful. And then, somewhat related question. On the -- I think it’s 2 million to 9 million of potential spot sales for 2022. I was wondering if you could comment a little more about is there any additional flex beyond that. And when we talk about spot, there’s reference prices out there that are kind of all over the place. Can you give us a sense as to what your view is of the spot market right now? Jim Grech: Dave, I’ll do this chronologically and starting with 2022. Referencing the guidance targets we have, we 86 million tons priced for 2022 with the range of 88 million to 95 million of production. So, when we’re looking at sales that could transact in the current market or this year in these pricing conditions, it’s -- what would be above the 86 million tons of somewhere in that guidance range. That’s what we’d be looking for. I think you characterized it as spot. The pricing, I would say that, the way the indexes are out there right now, you’re seeing these pricing in the mid to upper 20s is where the spot market is at the moment. Now, whether that holds for the rest of the year, that remains to be seen. But I will say that there’s some interesting developments on the demand side that are occurring that will add to some pull from our domestic market. We actually have customers coming to us from the Southeast Asia and Atlantic basin asking for PRB coal and deliveries. And it’s a transportation challenge with the rail capacity that we have out west to add even more incremental tons going down to Houston. But the netbacks on those potential deals are attractive. Now, the thing is, logistically, we can pull -- can we pull it off? But the point I’m trying to make is there’s the type of demand that we’re seeing in the PRB, we feel it’s strong. And if somehow the markets remain as strong and there’s more export demand, that will only add to the pool on that market. But I will caution that there is transportation issues to work out before we could do anything like that. For 2023, it’s too early in the year to give you pricing guidance, we’re not going to do that. We did price a lot of that coal and our negotiations in the fourth quarter of last year. As we took 2022 sales, we also took 2023 and quite honestly 2024 sales with those negotiations. And one final point I’d like to make as you’re trying to run your models. The pricing, our average BTU is at about 8,670 across our platform for 2022, not 8,800 or higher BTU. So, you also got to take that into account when you’re looking at the pricing for us for 2022 and beyond. Operator: I will go ahead and take our next question from Lucas Pipes with B. Riley Securities. Lucas Pipes: Hey. Good morning, everyone. And congratulations on a strong fourth quarter. I wanted to ask a little bit about the cadence of met coal shipments throughout the year, so with Shoal Creek ramping up. What’s a good range here in the first quarter, especially given the current price environment, of course, it’s particularly attractive. And also, with an eye towards Q1, you have, I believe, 4 million tons of seaborne thermal coal priced. Should we assume that essentially, Q1 is fully priced and the 6 million tons of available tons is Q2 through Q4, or would you maybe say that your committed tons are already kind of spread out throughout the year? Jim Grech: Hey, Lucas. Good to hear from you again. Jim Grech here. And as far as the met goes, the Shoal Creek is -- Mark gave the guidance for the year, the 1.5 million tons, and that will be ramping up here in the first quarter and into the second quarter. And also, with our CMJV in Australia, we’re still going to have some recovery from the rains that we had at the end of last year and getting the water out of the pits. So, it won’t be ratable when you look at the numbers that we have on the guidance table, and Mark can give you some color on that and also on your questions on the seaborne thermal. So, Mark? Mark Spurbeck: Starting with met. I know that if you look at our midpoint of guidance, 7 million tons for the year, give you about 1,750 per quarter. We mentioned in the prepared remarks, it will be 500,000 tons lower in the quarter. So probably more like 1.25 million tons in that first quarter as we ramp up more to full run rate. And then on seaborne thermal, I think the question -- we also mentioned how we’d be lower than ratable given some of the mine sequencing issues and Wilpinjong getting that overburden removed. So we’re going to be down from ratable guidance there, about 750,000 tons for the quarter. And I think your last question was how much of that seaborne thermal is open for pricing. Given lower than ratable, we’ll have less than ratable unpriced. It’s not fully priced, but there might be about 0.5 million tons that I’d say is unpriced for that first quarter. Lucas Pipes: And on Wilpinjong, I wanted to follow-up a little bit on the cost guidance. I believe, it’s 35 to -- sorry, it’s $25 to $28 per short ton on the cost side and that would be somewhat higher than where you’re selling the domestic tons. Are you selling the domestic tons at a loss or is there something else going on with maybe transportation and royalties? Mark Spurbeck: Let me clarify that cost in our guidance table is a consolidated or all ton cost. The domestic tons incurred less washing, less transportation. So they’re at a much lower cost than the export tons. We do not sell the domestic tons and a loss, it is essentially a cost-plus contract. So there’s an incremental margin on those domestic tons. But certainly, all of the juice comes from the export tons. Lucas Pipes: Then my last question is on the ATM. What’s -- in light of this really strong cash generation here in the fourth quarter and the strong outlook for 2022, what are your expectations around that program? Thank you. Jim Grech: Yes. So, two things, Lucas. I think, one, you saw a slowdown on the sales in the fourth quarter, lowest number of shares sold at about $7.7 million during the quarter compared -- since the program started in the second quarter. A lot of that was earlier in the fourth quarter. We did announce in December an extension of that program. It does give us another 7.5 million tons available to us. It is one tool in our bag. But we will use that very judiciously. And it’s an option for us if it’s the best option, but you did see a slowdown on it, but very happy with the progress we’re making with organic cash flows and ability to continue to reduce bad debt. Operator: And we’ll go ahead and take our next question from Nathan Martin with The Benchmark Company. Nathan Martin: Congrats on the quarter. Thanks for taking my questions. I think, the bulk of them have probably been touched on, but maybe I’ll ask around Middlemount. Your big quarter-over-quarter step-up in EBITDA contribution, I think about 9 million tons -- excuse me $9 million to $45 million in the fourth quarter. I guess, I was wondering if the $45 million number somewhat repeatable, assuming that prices remain flat or just any color on there? Thank you. Jim Grech: Hey Nathan, Jim Grech here. I’d like to talk about the tonnages first. We’ve got Middlemount in total was up to about 4 million tons, a little over 4 million tons last year, and we project that to be the same, maybe 100,000 tons more this year. So, that’s at 100%. And of course, we get our 50%. The other piece that I would say of the cash generation is what we’re doing on the cost side. And over the last year to year and a half, we’ve had some significant improvements at the mine, both in productivity and then how the structure of the mine is. We’ve added another fleet there of excavator and trucks, which allowing for more of that increased output. And we’ve had a GM there that has come from Peabody in the last year, year and a half that he’s been there and rebase the mine with the added equipment, and we’ve also invested in the prep plant. And so, we feel from the cost basis and how efficiently the mine is running with the management that we have there, that we feel pretty good about maintaining the cost side of the equation going through this year. And again, the tonnages are going to be in that 50% of a 4.1 million or 4.2 million ton forecast. Mark Spurbeck: Yes. Maybe I’ll just add to adjust the financials, $71 million for the quarter, $12.5 million of that was related to an insurance recovery from a property claim that we had going back to 2019. From a cash flow return perspective, $45 million in the quarter. I would say -- I think your question is repeatable. And certainly, with the -- our share of 2 million tons of production that Jim mentioned and the product they have, it’s kind of a 50% semi-hard coking coal and 50% PCI. So realizing 80% or better of premium hard coking coal prices. We certainly expect to continue to generate cash from that asset. It’s great exposure. It’s hard -- met coal that sometimes people forget since it’s not in our consolidated operating results. Nathan Martin: I guess, maybe just going back to Shoal Creek real quickly. What’s kind of been the reception of that coal? Obviously, your fourth quarter production, I think, came in a lot higher than most people had expected, over 400,000 tons. Jim, I think you mentioned you sold about 70,000 tons in the quarter. So, maybe what’s your expectation on inventories for that line going forward? Just any more thoughts? Jim Grech: Nathan, first off, I’d like to say we’re very, very pleased with how the mine has started back up, and we did get that 70,000 tons of sale in Q4 last year pretty much a high-vol A level type of pricing. The start-up has gone well. I will say something that I’m very keen on because it relates in the dollars and cents, the safety at the mine has been outstanding as it started back up. So, we’re going to keep that ramp-up going here through the fourth quarter -- I mean, through the first quarter, that 1.5 million ton level for the year. So, it won’t be completely ratable as you look at the year. Now, as far as the pricing going forward, we’re getting a lot of interest in both, the Atlantic and Pacific markets, more interested than we’ve seen in over 10 years that that might even now has been shut down for a little while here. So, I would say that the market is waiting for us to get these tons out there with the quality and of course, the cost coming from the United States into these markets. So, I think the market is -- we’re getting a very strong reception, but we haven’t booked any long-term sales yet as we’re ramping up. We’re just -- we’re putting out vessels and taking advantage of the spot market at the moment. Mark Spurbeck: And maybe one thing I would add, you mentioned production for Shoal Creek in the quarter, I don’t think we announced that. You mentioned 400,000. It was just over a little over 100,000. We sold 70,000 tons in the fourth quarter. And just to be clear, maybe add to Jim’s comment about the ramp-up of production. Looking at that 1.5 million tons for the full year, it’s certainly not going to be ratable. It’s going to be a ramp-up. If I had to predict, we probably come in at maybe 600,000 or so tons in the first half of the year with better production there on the back end of the year. Nathan Martin: And just for reference of $400,000 I mentioned was due to industry [ph] data. So I don’t know maybe there’s some discrepancy there, it sounds like. Okay. Mark Spurbeck: Yes. If it’s so, that was wrong. Nathan Martin: Okay. Got it. Good to know then. And then maybe just finally, guys, thoughts around transportation and logistics. Obviously, you called out issues there, labor, COVID, La Niña. What are we seeing today from a logistics standpoint, both here in the U.S. and Australia? Maybe any thoughts on when you hope things could normalize? Thanks. Jim Grech: I think in both countries, the COVID impacts are there and have been affecting the logistics, and I think the weather in Australia had more of an impact. But as we’re looking at it going forward, Nathan, in the United States here, we are seeing some improvement in the rail as here just recently in the last couple of weeks and we’re hoping that momentum carries us through going forward. So, that seems to be in a positive direction, and hopefully that trend continues. In Australia, there were some issues with the rains, and as I mentioned COVID, but not to -- the limiting factors for us, if there are any limiting factors is going to be with our own production here in the first quarter again recovering from all that rain at the end of last year in the COVID absenteeism, and we are recovering from both. And that’s all incorporated into the full year guidance that we gave out on the tons. So, I would say that in Australia, there really isn’t -- the transportation, we’re not seeing it as a limiting factor for us here going forward. Operator: All right. Mr. Grech, it appears there are no further questions at this time. Jim Grech: Well, thank you all for joining us today. I’d especially like to thank our employees remaining focused on safety and for continuing to execute on our various productivity and cost improvement initiatives. I’d also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: This concludes the Peabody Q4 2021 Earnings Call. Thank you for participating.

Operator: Good morning, ladies and gentlemen, and welcome to the Peabody Q3 2021 Earnings Call. . 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: Good morning and thanks for joining Peabody's Earnings Call for the third quarter of 2021. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim. James Grech: Thanks, Alice, and good morning, everyone. Peabody had a very good third quarter with our results benefiting from current robust global coal market dynamics, strong operational performance coupled with increased seaborne pricing and global demand for the quarterly results we have not seen since 2018. We continue to advance actions to position the company to be resilient in all market cycles. By expanding our margins, reducing our debt levels, and removing obstacles to increase production. I would like to start by thanking our global workforce for their continued focus on working safely and efficiently. We are excelling not only because of strong coal markets, but also due to the dedication and efforts of our talented workforce. Across the globe, we are seeing record coal index prices in each market segment and demand returning to near pre pandemic levels. The near term market outlook for all our operating segments is favorable with strong market indicators and increased global demand providing a compelling story for coal and Peabody. The seaborne thermal and metallurgical coal markets are expected to remain tight in the near to medium term, as supply response to elevated demand remains muted. Heavy rains in Indonesia, rail issues in Russia, production issues in Colombia and hampered domestic supply in China. Additionally, gas supply constraints and low wind generation in Europe have all combined to positive pressure on the global thermal market. While a seaborne met market is being bolstered by robust steel production, and decade high steel margins and tight coal availability. For 2022, with 2 million tonnes of incremental production expected that are met coal mines, and thermal export production in line with 2021. We are well positioned and are looking forward to taking advantage of this demand and the margins that we anticipate will come with it. In the US, thermal coal market indicators are also favorable with increased electricity demand and high natural gas prices leading to gas to coal switching, and robust growth in coal generation as compared to prior year. Overall electricity demand increased 3% over the last year, with coal shared electricity generation increasing to approximately 23% for the first nine months of 2021. As a result of increased demand and supply response, whole inventories have fallen by approximately 54 million tons year-to-date, the lowest level since 1997. Natural gas prices at high levels this quarter that we have not seen since 2014, driving up coal generation demand. During the first nine months utility consumption of PRB coal rose approximately 30% compared to prior year. Supply and demand balances are leading to high forward prices for natural gas. Those forward prices and strong coal export demand are supporting expectations of continued elevated coal prices in the near term. At Peabody PRB operations, the increase volumes and are trending towards the high end of our guidance range for 2021 and anticipate some incremental volumes next year. We currently have some uncommitted tonnes for 2022. However, given current demand exceeds supply, we're only selling those uncommitted tonnes under multi-year contracts. At our other US thermal operations, we are ramping up volumes next year by approximately 2 million tonnes to meet increased customer demand. So we only have a small portion left to be sold for 2022 and for 2023. Now turning to the quarter, our operations were able to deliver projected volumes, offsetting the impact of labor shortages and higher fuel costs. In addition, we continue to invest in the future with increased equipment refurbishments and mind development. Within our seaborne thermal segment, the Wilpinjong extension and the Wambo Open-Cut JV development projects continue to advance with over 200 million of capital invested over the past three years. I'm happy to report the box cut development work was completed at both projects in the third quarter, and we anticipate the Wambo JV to operate a full production run rates in Q4. Our seaborne thermal margins benefited from pricing increases of 66% in the quarter compared to the prior and the segment is on target to deliver higher export volumes in the fourth quarter as compared to prior quarters and 2021. Our Seaborne Met segment continues to deliver on efforts to expand margins through cost and productivity improvement initiatives, as well as sales strategies. In the quarter, the CMJV complex and Metropolitan delivered 36% higher volumes at 16% lower cost per ton as compared to the prior year. The CMJV continued to realize productivity improvements and metropolitan and metropolitan reach plan long while production rates. At Metropolitan, we reached the long term sales agreement that underpins the mine for the next three years, with the pricing link to seaborne met coal pricing. And importantly, both Metropolitan and Shoal Creek completed renegotiated labor agreements. The workforce has been back at Shoal Creek since early October, and we expect to restart production later this year. The US thermal mines delivered another solid quarter generating significant EBITDA, availability of labor impacted production at several of our US mines this quarter, but we see this improving through programs that we have put in place. And finally, robust US coal market dynamics have allowed us to build a strong book afford business, with settlement of several long-term sales agreements, and improved prices as compared to current level. Notably, in addition to multi-year PRB contracts, we have reached agreements that will support the continued operation of our 20-mile mine in Colorado for the next five years, and assign agreements in the Illinois Basin was increased pricing through 2025. Our globally diversified asset base, which makes us distinctly unique for many other US coal company is allowing us to benefit from these market conditions. Our Q3 results were a confirmation of the value we can generate from our asset mix. During the quarter, we also continue to take actions to reduce our debt levels and raise cash to the issuance of common shares. Date this year, we have reduced our debt levels by approximately $250 million. We also took steps to reduce our close mine and legacy liabilities to the sale of our Millennium and Wilkie Creek closed mines. These actions are part of our commitment to enhance our platform to be resilient in all market cycles. We're also progressing on multiple initiatives that will allow us to expand and improve near term production. As previously mentioned, Shoal Creek will be back in production later this quarter. And Metropolitan the Longwall was producing at full run rates, resulting in significant year-over-year increases to our seaborne met export volumes. Moorvale South, which will result in improved quality and extended life at our CMJV is expected to be in production in the first half of 2022. And in the US, we're implementing plans to produce incremental volumes at our mines in the near term, bedding underground production units in the Illinois basin and expanding development at our wild boar complex. In addition, in the PRB, we are refurbishing and relocating equipment to enable increased production. Our long-term strategy remains to reweighed investments towards seaborne markets, maximize US thermal asset cash generation and enhance financial strength through debt reduction. I'll now turn things over to Mark to cover the financial. Mark Spurbeck: Thanks, Jim. And good morning everyone. Third quarter results demonstrated our ability to capture improve market conditions and generate substantial margins from our diverse asset portfolio. The thermal segments both US and Seaborne as well as our improving Seaborne Met segment reported strong results. Third quarter sales were over $900 million our highest in seven quarters and increased by more than 30% from the prior year. Reported revenue was $679 million, net of $238 million of unrealized mark-to-market losses. Those losses primarily relate to economic coal hedges. At September 30, we had hedges on 2.9 million metric tons, the majority of which were contracted in the first half of 2021 and relate to 2.1 million metric tons of expected production at our Wambo underground mine. These tonnes are expected to be mined and settled at a rate of 1.4 million tonnes in 2022, and 0.7 million tonnes in 2023. The hedge contracts support the profitability of the mine by securing average prices of $84 per metric tonne through mid-2023 and are a key ingredient of a strategy to extend the expected life of the mine. The remaining tons relate to brokered cold transactions and other blending and optimization activities, which will settle beginning in the fourth quarter and throughout 2022. Net loss attributable to common shareholders totaled $44 million, including recognition of the $238 million unrealized mark-to-market losses. We reported adjusted EBITDA of $289 million, more than double the $122 million reported in the second quarter and three times the prior year results of $95 million. Importantly, we took further action to enhance our financial strength, retiring an additional $93 million of senior secured debt in the quarter, resulting in a net gain from early debt extinguishment of $16 million. We also retired an additional 30 million after September 30. That brings debt retired this year to approximately $250 million, more than 16% of debt outstanding at January 1. In the quarter, we raised net cash proceeds of $112 million by issuing 9 million shares of common stock under the at-the-market equity program. Subsequent to September 30, we raised an additional $39 million and issued 2.8 million shares. Outstanding shares are now approximately $126 million and we have about 5 million shares remaining available under the currently approved ATM program. At September 30, we had $587 million of cash and cash equivalents. Net of $240 million of cash margin posted related to the economic coal hedges previously discussed. When these tonnes are sold, we will realize either the currently higher spot price or cash margin will reverse as prices decline toward the hedged price. Turning now to the segment results, the seaborne thermal segment generated EBITDA of $104 million and benefited from a $23 increase in average realized prices compared to the prior year. Cost per tonne were higher than prior year due to lower production at Wilpinjong and the transition to the Longwall joint venture. In addition to unfavorable exchange rates, higher fuel and royalty costs. Wilpinjong ships 3.5 million tonnes in the quarter, including 1.6 million export tons, at an average cost of $26 per ton. Wilpinjong realized average sales price of $42 resulting in EBITDA margins of approximately 40%. Wilpinjong recorded $56 million of adjusted EBITDA and had $145 million of cash at September 30. The Seaborne Met segment generated EBITDA of $57 million, with an average realized price of $120 per ton and costs of $82, resulting in 32% margins. Third quarter met shipments were approximately 400,000 tonnes higher than last year due to higher production at Metropolitan and the CMJV. Total costs for the Seaborne Met segment were lower by more than $15 per ton compared to prior year due to elevated costs at Shoal Creek in 2020. And this despite higher royalties, unfavorable exchange rates and higher fuel prices in the current quarter. The continued improvement in costs and recent rise in international coal prices demonstrate the value of our Seaborne Met segments to the company's diversified portfolio of mines. In the U.S., our mines delivered $82 million of EBITDA, despite challenges with labor availability and COVID related absenteeism impacting production at several operations. Our PRB mines ship 22.7 million tonnes in the quarter at a 15% margin. The other US thermal mines ship the combined 4.5 million tonnes and generated 24% EBITDA margins. Both the PRB and other thermal segment costs increased due to higher levels of planned equipment maintenance, and higher fuel prices. In the PRB higher overburden removal and weather events also impacted costs and production for the quarter. Looking ahead to the remainder of the year, we anticipate higher seaborne thermal volumes, including to three to 4 million exports tonnes, of which approximately 50% are unpriced. Costs are expected to be lower than the third quarter as the Wambo Open-Cut is at full production and Wilpinjong development is complete. Wilpinjong volumes are expected to be approximately 4 million tonnes, with 2 million export tonnes to finish the year with its strongest quarter. The Seaborne Met segment is expected to ship one to 1.5 million tonnes in the fourth quarter, with 75% of those tonnes unpriced. We anticipate production at Shoal Creek do recommence in the second half of the fourth quarter, with ramp up continuing through the first quarter of next year. We are planning for PRB and other US thermal volumes to be flat with third quarter levels and costs for both segments to be slightly higher in the fourth quarter due to mix. Fourth quarter cash flows are expected to increase substantially over third quarter levels. As we continue to see favorable pricing in each of our segments and the cash margin related to coal hedges begin to reverse. Lastly, we will continue to be disciplined, taking advantage of strong markets, controlling costs and further reducing debt. I'd now like to turn the call over for questions. Operator. Operator: And we'll go ahead and take our first question from David Gagliano with BMO Capital Markets. David Gagliano: Thanks for taking my questions. I think maybe I'll just reach out to the 2022 world for a minute. In thermal, you've given us some information, but I was wondering, could you give us more detail on that. The contracts that are committed in the Powder River Basin and the prices for those, the average price is the volumes that's committed and how much what's the average price for 2022 in the PRB? First question. James Grech: David, good morning, Jim Grech here. And I'd like to take this opportunity, since you're asking about 2022 is really just to talk about the whole portfolio addressing the PRB but also our seaborne. So first off, you'd asked about prices. And since we're still in negotiations for 2022 in many of our market segments, we're not going to comment on any specific prices associated with forward sales will do so when we report our Q4 results. But I will in general give you some ideas and the directions we're going. So starting with our domestic US you asked about the PRB. We're trending towards the higher end of our forecast for this year as shown in our earnings release. And we expect that to be the base for our tonnes for next year, with upside for any 100 BTU areas, we're still looking for volumes. We're still working on net upside volumes. For next year, we have limited times left for sale at that $90 million come level. And as I said in my remarks, we are pricing, we are selling them with multiyear deals. Now in regards to pricing for next year for the tons that we do have sold. We are layering we have been layering in prices and sales through the whole year. So we're not selling at all at the at the current price decks that are out there. So that is a case. But again, we do have unsold tonnes for next year at that 90-million-ton level and we are looking to improve upon those volumes. And we'll be able to comment on that more on the next call. The other US thermal that we have, we are going to take the base that we have from the projections in the earnings release and add about 2 million more tons of production on that. That coal is already sold mostly for 2022 and 2023. So in the US again, we have some exposure to the market. We've been layering some of the sales in and we do have some upside in our other US thermal and working on upside and our PRB tonne. On the international the seaborne gives us significant more market price exposure to classifications of coal that we have there seaborne Met and seaborne thermal and the Seaborne Met. All of our tons are unpriced at the moment, so we have completely open to the market next year and our seaborne maintenance is seven over 7 million tons of coal. And the seaborne thermal about two-thirds of our tonnes are unpriced for next year, so are open to the mark exposure for pricing next year. David, I think I tried to cover all the segments or maybe get all your questions all at once you have any anything else you'd like me to comment on? David Gagliano: Yes. Okay. Thank you for that. Well, just a quick follow-up could you - for the PRB, at least tell us you said, shooting for 90 total. Instead of asking about the price directly can you tell us, how much you have left, specifically to price and then roughly when timing wise, you layered in the majority of the contracts that are already locked in? James Grech: And the layering in of the tons. That's been done since I'll say mid-year to till now. And I don't know, the breakdown of mid-year to later in the year. We've been layering it in since mid-year till now, I think, probably did a little bit more in the August, September timeframe, but I don't have that breakdown. David. And as far as what's available to sell at that 90-million-ton level, it's less than 10% of the tons that we have available to sell for next year or so. David Gagliano: Okay, that's helpful. Thanks. And then just switching gears real quick Shoal Creek, can you just talk about a little more detail on the ramp up, incremental CapEx, expected cash costs and volumes for the full year 2022? James Grech: So we've that signed the contract with the union, and that contract is going to go through the end of 2024, December 31st 2024. So it's a plus three-year contract, the mine has been sitting for might have been sitting for over a year. And so the startup or the startup, now we started with safety training, get calling employees back to work. The equipment, expecting the belts, and all that work started and we expect the Longwall to start producing some coal sometime here in November, that coal will be used and we'll get that to the surface. And then we'll start commissioning our prep plant, because there was extensive work done at the prep plant, which will result in improved yields for us. So to get through all of that getting started up, we'll be through the end of this year, and we expect to start hitting our stride towards the end of this year. And the first part of next year. On the production levels. As far as capital for next year, it's just going to be normal, sustaining capital. And right now, we don't have any information to release that unexpected percentages or costs for Shoal Creek for next year. David Gagliano: Okay, that's helpful. Thanks. And just real quick, I'm assuming that's all going to the export market. And can you remind us the quality of that coal? Mark Spurbeck: Yeah, David, Mark, it is. It is also into the export market, I would say, given where the markets are today. Looking forward to 22. I'd be thinking that is kind of a high volley product for 2022. Historically, we've looked at as a premium hard coking coal product and probably going out '23 and beyond I think of it that way. David Gagliano: Okay, it's helpful. Thank you. Operator: . We'll go ahead and take our next question from Lucas Pipes with B-Riley Securities. Please go ahead. Lucas Pipes: Thank you very much. And good morning, everyone. I have a quick follow up question there on the domestic contract book. Jim for 2023, how much of the PRB is open? James Grech: Lucas, I don't have that number with me. I know we've been selling for 23 and 24. When I mentioned multi-year contracts, we're going out 23 24, maybe even a little bit in the 25. But we'll have to follow up with you on that I'm not sure the percentage that we have open. Lucas Pipes: Got it. But I heard correctly that on other thermal which I assume would be both Colorado and Midwest that you're mostly sold out for 2023? James Grech: Both 2022 and 2023. Even though we've increased production by about 2 million tons a year in that segment, we're going to it's fairly it's pretty much sold out for the next two years. Yes. Lucas Pipes: Got it. James Grech: That would be our Midwest assets in 20 mile. Lucas Pipes: Got it. Okay, now that's helpful. I appreciate that. And then maybe switching over to seaborne thermal, I believe you had about two-thirds open there. And historically, you've sold a lot of tonnage on the Japanese fiscal year. So kind of when would you be selling the remaining two-thirds of that business? Would appreciate your thoughts. Thank you. James Grech: Well, there's some percentage of it that are, probably two thirds of it, I said was unpriced of that, but some of that is sold. But it's related to index pricing, and then the rest of it is comes to market pricing. And as far as the timing of that, we will block that the end of this year and in the first quarter of next year for the unsold amounts. Lucas Pipes: Got it. That's really helpful. Thank you. And then maybe just a last one on the short term outlook, you provided really helpful kind of comments regarding Q4. And obviously, pricing has been terrific in recent months, and I assume much of that would really float flow through in full force in Q4. So I wondered, is it possible to provide additional comments around adjusted EBITDA, free cash flow in Q4, you said substantially better but wonder in these unique times of high prices, if you could maybe help investors? Mark Spurbeck: Yes. Lucas, Mark here, I'll try to take a crack. And I think your question is really looking at fourth quarter, maybe starting with seaborne thermal. We probably have three to 4 million tons of export. We have about 1.7 million of those tons priced at an average of $92. The rest would mean floating and open for pricing. From a Seaborne Met perspective, looking for about 1.3 million tons. We haven't changed our guidance. We have a little over 300,000 tonnes priced at about 161 and 1 million tonnes unpriced for the remainder of the year. Just for reference, Q3 was 1.5 million tonnes at 118. Lucas Pipes: The quality of the unpriced as yet, between PCI coking coal do you have - would you be able to provide a color on that in terms of the quality breakdown of the unpriced ? Mark Spurbeck: No, I don't exactly have that in front of me Lucas. I think, again, if you think about the one on the seaborne thermal side first. I think that you got to look at two things one, Wilpinjong is really high ash thermal and it's sold at a 5% to 20% discount the API5. Wambo is truly a benchmark Newcastle product. And majority of the Wambo is unsold. Lucas Pipes: Got it. Okay, well, I appreciate your color comments and best of luck. Operator: All right, we can go ahead and take out next question from Nathan Martin with the Benchmark Capital Company. Nathan Martin: Hey, good morning, everybody. And congrats on the quarter. And thanks for taking my questions. I guess I'll start on the cost side, I think kind of the pricing side then been discussed. So maybe you guys had a pretty material quarter-over-quarter decline in net costs 3Q and he said some of that was really too high short creep costs a year ago. I guess the question is, is that number kind of repeatable here in the fourth quarter and beyond? Or do you expect Shoal Creek ramp to kind of put some pressure on that number given their full year guidance of $93 exploiters Shoal Creek? Thanks. James Grech: Yes, and they definitely saw a great costume in that segment in the third quarter. I think really two reasons for that, first the ramp up of Metropolitan. The full production rates at the Longwall, really quarter over quarter improve that as well as significantly higher production in Moorvale. Moorvale is tends to be lumpy. We were certainly on the coal and at higher production drove those costs lower. We haven't changed our overall full year guidance and costs. So it really was as planned and expected. But these costs in the third quarter. We're particularly low for those two reasons. Nathan Martin: And Mark regarding Shoal Creek, I mean, do you think that would tend to maybe pressure those costs a little bit in fourth quarter Mark Spurbeck: Yes, no question is we begin to ramp up at Shoal Creek, there will be some will be some higher costs that will be blended into that met segment, would expect that to also put pressure on the fourth quarter results. Nathan Martin: Got it. Thank you. And then maybe if we just look ahead to 2022, any early thoughts on how costs are different segments? My trend there, especially given some of the inflationary pressures we're seeing in the marketplace. Mark Spurbeck: Yeah, two things. One, we're not providing cost guidance for 2022 today, we'll do that on our next call. Certainly inflationary pressures are being felt across the industry. We look at it and a couple of reasons are a couple of main factors. Labor is tight as well, labor is probably 25% of our global costs, we use about 80 million gallons of fuel as well. So some higher fuel costs, and certainly steel, there's an impact of steel, as well, from some of the underground mines, as well as the components and equipment. As we're seeing these inflationary costs, it is really a part of the economy that is being felt very broadly. Fortunately, the higher margins that we're expecting to see here is more than offsetting those higher costs. Nathan Martin: Got it makes sense. And then maybe, Mark, could you could you kind of remind us what percentage maybe of your costs or sales sensitive related for some of the different segments? With prices? James Grech: Yeah, broad brushstroke, I'd say from on the seaborne side, about 10% of revenues, really royalty related, and cost production, and then in the PRB, with the federal royalties, they were probably about 25% to 30% on that number. Nathan Martin: Perfect, very helpful. And then can you just finishing with a bigger picture question. Maybe Jim, can I get your thoughts around some of the headlines we're seeing in China regarding power shortages, and maybe more recently, the talk of proposed thermal price caps, and maybe how you see that playing out or affecting the body's business in that marketplace? Thanks. James Grech: Yes, need to have a - Good Morning first off, I have a few comments on that, historically, Peabody has not so much of our coal in China in 2020, only about 2% of our product went to China. But obviously, what China does with their coal and their policies affects the world markets. And so, our view is there's a policy, there's a lot of speculative trading that goes on in the markets. But we always go back to the fundamentals of supply and demand, and talk about price caps and so on. But the fundamentals are that demand is strong. And we expect it to stay strong through the winter, at least and into next year. And the supply is, constrained. And any quick responses from supply is going to be muted for a number of factors. So, if you take the speculative trading out of it that, as a lot of fluctuations in the prices, and announcements about price caps, we still think the fundamentals are very strong for prices, because demand is going to be stronger than supply, as we've seen right now. And we expect that to continue to next year. Nathan Martin: Got it. Thanks. Thanks for those Jim. And I appreciate the time information. Best of luck to you guys in the fourth quarter. Mark Spurbeck: Thank you. And we'll go ahead and take our next question again from David Gagliano with BMO Capital Markets. David Gagliano: Hi, sorry to hop on. Again, I just have a few follow-ups here. I just want to clarify one thing on the fourth quarter the export thermal implied volumes that are unpriced. I think it's 1.3 to 2.3 million tonnes. How much would you say was Wambo versus Wilpinjong? Mark Spurbeck: Yeah, we didn't answer - I don't have that number in front of me. Let us get back to that. David. Alice Tharenos: On Wambo we have 0.3 - 300,000 tonnes and Wilpinjong we have 1.2 million tonnes. David Gagliano: Right. So, okay, that make sense. Okay. I thought I misunderstood. Okay, thanks. And then just on the other thermal business. Visibility's pretty low in some of these regions in the US and some of this could be going into the export market 20-mile mine, that kind of thing. I'm just kind of curious, can you give us a little more color on the pricing given that it's sold out for the next couple of years, even at the higher volumes and understanding proprietary issues, maybe just give us like a blended average price or something for the other thermal business and some information if possible how much of that other thermal is actually destined potentially for the export market defending? James Grech: Okay, so I'll talk about the markets in. Mark, if you want to comment on the pricing after I talk about the about the markets. First off our other thermal, we have the El Segundo mine in there, we have and the 20-mile mine, and then our Midwestern mine. So there's, there's quite a mix of markets and contracts that cover all of that. So again, it's David saying, one price index, or one thing that you can look at is tough, because of the mix that we have in there. There was a small amount of 20-mile that went to export this year earlier in the year when the market was softer here in the US. But that was just call out a one off, we don't expect to that to continue. So all of that coal that we talked about is going to be domestic, free for US consumption, we're not really going to be exporting that in the forward sales that we have, at the mines, again, 20-mile, the five-year extension we had, is certainly going to take up almost all the coal that mine net domestic. And then in the Midwestern mines, we signed a contract for a large amount of that through 2025. And again, through 2023 it's also domestically to utilities in the Midwest. So there'll be no export tonnes at any of those mines. To get into pricing, it's a little complex, because of the mix of the mines that we have in that category. And again, I'm not sure that there's really a specific indicee that we can point to that they follow that for the pricing. David Gagliano: Right, exactly. And that was really the point of the question on my side that given the broad mix there and things like that, can you just give us just tell us the weighted average price that you've locked in with - because I don't think it would give away any proprietary information within that bucket? James Grech: David, as we said on our next earnings call, we'll give some color on forward pricing and costs and tonnages, we're not giving out any of that information right now, because even though things are mostly sold, we still have negotiations ongoing. So until we close those out here, we're not going to comment on the pricing for next year. David Gagliano: Okay, then just my last question on back to Shoal Creek for a minute for 2022. I understand the limitations on cost information at this stage. But obviously, there's quite a bit of capital that went into the mine, I'm assuming quite a bit of capital and in the mine last year, so a lot of changes. And in terms of the cost structure, can you frame it, perhaps within the context of the rest of the Seaborne Met segment, our cost at Shoal Creek likely to be on average higher in line or lower than the rest of the Seaborne Met segment. Mark Spurbeck: David its Mark couple of thoughts one, I mean, Shoal Creek has historically been on the higher end of that costs will actually be higher than the other met costs. I mean, when you look at this, I would just - when you compare it to prior results that we had, prior to the temporary shutdown, we'd expect it to be higher temporarily as well. And remember, we're in probably less favorable geology, as we ramped this back up where we ended. So yields will be lower, we did invest capital, as you mentioned in the plant to improve that, but we'll certainly be looking at some higher costs as we start this back up. David Gagliano: Okay, and then just duration of those higher costs, is that through 2022? Or we're just talking about Q1 and then saving to it's kind of a normal number after that? Mark Spurbeck: I would say you'd expect it to be higher for 2022 referring back to more normal run rates after that. David Gagliano: Okay. Thanks. Operator: All right, we'll go ahead and take our next question, again, from Lucas Pipes with B Riley Security. Lucas Pipes: Thank you. Thank you very much for taking my follow-up. Jim and team I wanted to get your thoughts on the M&A environment out there. Are we more or less likely here to see maybe some consolidation, the space? This has been a really elusive subject over the last few years, but I would appreciate your thoughts on that. Thank you very much. James Grech: Yes, well, it's been elusive. And one of the issues has been the availability of capital to do anything, whether it's capital improvements, or M&A. But Lucas, I was just think, along with Peabody and other coal companies, I would just think of the industry in general since everybody's liquidity is better, and stock prices are improving, versus where it was a year or two ago, all of those things lend tools that could be used to have more money than it has been in the past. And my belief is as many others that consolidation does need to occur in the market. So just, still, even with these strong prices, there's still too many different players out there, the cost structures, the consolidation would do well on the cost side particularly for the US market. So I think consolidation still needs to occur. And, again, I'll say the industry in general was a lot healthier to do it with stronger stock prices and more liquidity, but the availability of capital is still a challenge for anybody in the coal segment. Lucas Pipes: And when you when you think about your portfolio, are there areas where you'd say this is maybe less of a strategic priority than other areas, that is more of a strategic priority. So if you would to share with investors your thoughts as to how the portfolio could be optimized, I would very much appreciate that? James Grech: Well, just I view on strategy, for the company, I think the first thing that our company is focused on and Mark said, and I said is we have to pay down debt. And that's the number one focus that we have is pay down debt. And once we pay down debt and become more resilient for these market cycles, which we think the volatility is going to be more severe and more frequent than we've seen historically. Because the supply side can't react as quick as it has historically. So by far and away our first strategies that I'd like to tell any investor shareholders is pay down debt. Then after that, we would be looking at organic growth off of our own assets. We've talked about that, both in Australia and the US, in the tons that we're looking at for increasing next year, very low cost tons, it's minimal capital investment. It's using equipment that we've had, sitting or refurbishing it and hiring the people to run the equipment. So the next part of that would be the organic growth off of what we have, and maybe looking at picking up some reserves selectively to do that. The next part of that, I would say, Lucas, would be growing with our customers. And I put that into a few buckets. One of them is I thinking our customers in industry is seeing the value of having longer term relationships, longer term contracts, because there are fewer players, even though there's more consolidation that needs to occur. And we need to be capitalized and we need to attract and retain employees at our mines because the longer term contracts, a lot of do that. But when you start growing with the customers there are other opportunities out there, to look at different ways to do things with general power generation, with renewables, we are a large surface whole property holder. So all of those types of things I would say our growth force and growing with our customers and then for the analysis that get us down M&A. Now what will we look at for M&A, we do favor a weighting towards the seaborne markets. We think that's where the growth is and the sustained demand both on the thermal and met. But in the US, we are also dedicated to the US thermal markets, even though it's in secular decline, we still think there are going to be demand for the producers that are left to reliable producers. And so again, in the US markets, we're very comfortable with the assets we have, and think they're well placed for what we see the future is of the colonies in the United States. Lucas Pipes: Jim, very much appreciate that. And, again, best of luck. Thank you. James Grech: Thank you, Lucas. Operator: And Jim, it appears there are no further questions at this time. James Grech: Well thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety, and for continue to execute on our various productivity and cost improvement initiatives. I'd also like to thank our customers, investors, insurance providers and vendors for your continued support. Operator, that concludes our call. Operator: This concludes the Peabody Q3 2021 earnings presentation. Thank you all for participating.

Operator: Good day, ladies and gentlemen, and welcome to Peabody Energy's Second Quarter 2021 Earnings Conference Call. . As a reminder, this conference is being recorded today, August -- today, July 29, 2021. I would now like to turn the conference over to Alice Tharenos. Please go ahead. Alice Tharenos: Thank you. Good morning and thanks for joining Peabody's Earnings Call for the Second Quarter of 2021. With me today are President and CEO, Jim Grech; and CFO, Mark Spurbeck. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. James Grech: Thanks, Alice, and good morning, everyone. Peabody had an encouraging quarter as our assets are continuing to deliver solid operational performance, and we're seeing robust global coal market demand with strong economic indicators as economies continue to recover from the pandemic. We are progressing on actions to expand our margins and reduce our debt levels and are well-positioned to benefit from market recovery. Higher volumes for the second half of 2021 are projected at a time of robust markets but before I cover the highlights for the quarter, I'd like to begin by thanking our global workforce for their continued focus and working safely and efficiently. I've been impressed by the dedication and efforts of our team, and I'm confident we will continue to build on improvements we have achieved to date. As planned, in every segment, our assets are expected to deliver increased production in the second half of the year as we benefit from our efforts at a time of elevated demand. Within our seaborne thermal platform, we expect higher volumes from the advancement of development at the Wambo JV and the Wilpinjong extension projects. Within our U.S. thermal platform, we expect PRB demand to continue at the strong pace we have seen in the second quarter, and we are positioned to deliver all customer volumes. And in the Illinois Basin, we're expecting productivity improvements from our Indiana Open-Cut Mines due to new pit development and equipment enhancement projects. And finally, at our met mines, we expect higher volumes from the CMJV and from the Metropolitan Longwall reaching planned production. Now turning to the quarter. Second quarter results show EBITDA improvements in every operating segment as compared to prior year as our assets are responding favorably to increased market demand with lower costs as a result of improvement efforts across the company. Our Seaborne Thermal segment benefited from increased prices compared to the prior year, resulting in margins of 37%. I'm happy to say the Wambo JV development and the Wilpinjong extension projects with over $50 million of capital invested year-to-date are both on target to deliver higher volumes in the second half as compared to the first half of 2021. Our U.S. thermal mines delivered another solid quarter, generating EBITDA of nearly $90 million. The operations continued to deliver low-cost while benefiting from market recovery with more than a 20% year-over-year increase in volumes. In the quarter, we recognized improvements in our Seaborne Met segment cost was a 14% decrease versus the prior year, led by productivity improvements at the CMJV. At Metropolitan Longwall production restarted. We are confident a long-term agreement with our domestic customer will be completed within Q3. And at Shoal Creek, we are on target to complete the plant upgrade project in mid-Q3 and we continue productive discussions with the union regarding the expired labor agreement, and we continue to review options with customers as we see that there is a robust demand for the Shoal Creek product in the near term market. We also took steps in the quarter to reduce our debt levels and raise cash through the issuance of common shares. Mark will have more detail on this in his comments. Mark Spurbeck: Thanks, Jim, and good morning, everyone. Second quarter results continue to demonstrate our focus on cost management and performance improvement. Three of the four operating segments reported lower costs compared to the prior year, and maybe more importantly, three out of four operating segments reported lower costs compared to the first quarter. Most notably, our seaborne thermal operations reduced cost per ton by 19% quarter-over-quarter. Second quarter revenue increased 15% from the prior year to $723 million on higher volumes at our U.S. thermal and seaborne met operations and higher average realized pricing for our seaborne thermal export products. Loss from continuing operations, net of income taxes, totaled $23 million, including $25 million in unrealized losses on economic hedges. We reported adjusted EBITDA of $122 million, a nearly $100 million improvement compared to prior year second quarter results of $23 million, and doubled the $61 million reported in the first quarter of this year, demonstrating the strength of our diversified assets. Importantly, we took further action to enhance our financial strength following the completion of the financing activities in the first quarter. At June 30, we had raised net cash proceeds of $65 million by issuing 8.1 million shares of common stock under the previously announced at-the-market equity program. Subsequent to June 30, we raised an additional $21.5 million and issued 2.7 million shares. We put much of that money to immediate work and retired nearly $84 million of additional debt as of June 30. We completed open market repurchases of $53 million of senior secured debt and completed multiple bilateral debt for equity exchanges, retiring $30.9 million of the 2022 senior secured notes in exchange for 4.5 million shares of common stock. These transactions resulted in a net gain from early debt extinguishment of $11.8 million in the second quarter. We reached further agreements to retire an additional $50 million of debt that we'll settle after June 30, which is expected to result in a net gain of approximately $15 million in the third quarter. For the year, including amounts that we'll settle after June 30, we will have reduced debt by a combined $176 million. Turning now to the segment results. The Seaborne Thermal segment benefited from a $12 increase in average realized price per ton compared to the prior year and held costs nearly flat despite lower volume, unfavorable exchange rates, and higher fuel and royalty costs. Seaborne thermal volumes were 500,000 tons lower than the prior year due to the transition to the United Wambo Open-Cut Joint Venture and timing of shipments from Wilpinjong. Operator: . We'll go first to Lucas Pipes with B. Riley Securities. Lucas Pipes: Jim, great to hear your voice, and congratulations on a strong quarter. James Grech: Thank you, Lucas. It's good to hear your voice as well. Lucas Pipes: Maybe to start with a higher-level question. Your background is on the commercial side, and this is a really, really strong market globally, but also, it appears there's a resurgence in domestic demand. Can you touch on where you see the opportunities from a pricing perspective as you look across your portfolio? James Grech: Well, Lucas, whether it's domestically or internationally, global coal demand is on the increase. Now, some markets like the U.S. over the long-term are going to have a secular decline. But in total, globally, we see coal demand increasing. And I'll talk about the supply side response to that. But my view is that's going to lead to increased price volatility to the upside. And the reason I'm saying that is the supply response to these increased demands is just not there like it's been historically. The lack of capital available to the space, the trouble with permitting, the difficulty in getting workers, the elasticity of supply-demand is just not what it used to be. And so, domestically, we're seeing that right now; internationally, we're seeing that right now. And I think the volatility to the upside is just going to increase as we go forward because, overall, I see demand globally increasing with supply not keeping pace with it. Lucas Pipes: Very, very helpful. And a quick follow-up question on that. When you think about -- so when you look across the space, a number of your peers, to your point, are considering reducing their thermal coal footprint in the seaborne markets as well, what role could Peabody play in that? Is M&A feasible here and how would you think about financing opportunities? Any thoughts you can appreciate -- any thoughts you could share, I would really appreciate that. James Grech: Lucas, if there's ongoing M&A activities, we don't comment on them. But I would say that we are showing our commitment to the seaborne thermal markets with the investments we're making at Wambo Underground with extending another panel here, the 23 panel, the Wilpinjong extension that we have going on there right now. So these are assets that we have in hand, and we are putting capital into them for their expansion and their continued life because we see the seaborne thermal market as a good market to be in. Lucas Pipes: Thank you. Really appreciate that. And then last one for now to switch topics. When I look at your guidance for 2021, roughly across three different buckets, $95 million in legacy liability costs, can you share a perspective on what the tail is to those liabilities, are some of them were one-off or how should we model them going forward? Mark Spurbeck: Lucas, it's Mark. I think a couple of things that you're referring to in the release and in our guidance table. $60 million for final reclamation. I think that $50 million to $60 million is a pretty good run rate for the foreseeable future here in the next few years as we continue to do the right thing and reclaim lands. There's also $30 million of retiree health care. That is there -- that's probably a pretty good run rate as well for the next few years. It is related to retiree health care, and it will reduce over time. But for the foreseeable future, I'd use that number. And then the last thing on that list, there's $15 million for the settlement of the multi-employer pension plan. That has actually had been a series of payments. That $15 million this year was the last payment that we have to make for that settlement. We actually completed that in July. Operator: We'll take our next question from Nathan Martin with The Benchmark Company. Nathan Martin: Welcome, Jim, and congrats on the quarter. James Grech: Thank you, Nathan. Nathan Martin: I appreciate all the guidance you guys provided in the earnings release. I want to start with some questions, I guess, on the seaborne met side. Could you give us an idea of what the quality split is looking like for this year between the hard coking coal and PCI products within your seaborne met volume guidance? And then maybe what kind of discounts, if any, are you guys seeing relative to those indices? Mark Spurbeck: Yes, Nathan, it's Mark. I'll take a stab at this. Again, looking at 2 million tons for the CMJV in the second half and up to -- about 800,000 tons from Metrop, CMJV generally produces a benchmark PCI product. That's near $145 a ton today. Metrop produces really a blend, a soft hard coke -- semi-soft coking coal and a PCI blend. We probably realized about 80% of the premium hard coking coal benchmark from a pricing perspective on that. With a little over 2 million tons on price for the remainder of the year, there's certainly some upside here in the portfolio on prices given the current conditions. There is a bit that is priced. There's probably about 400,000 tons of the CMJV currently priced at about $100 a ton. Operator: Thank you. That will conclude our question-and-answer session. At this time, I'd like to turn the call... Mark Spurbeck: Operator, I think there was a follow-on from Nathan if we can give him a second. Operator: . Nathan Martin: Yes. I apologize for that, guys, I was on mute. Mark, I appreciate that color. If I just look at the cost as well in the seaborne met side of the business, I see a full year guidance now at $93, excluding Shoal Creek. Maybe can you guys give us an idea of the ongoing costs for Shoal Creek or maybe even North Goonyella because obviously, the reported costs in the first half were over $100 a ton. Is that still a good way to think about it on a reported basis or should that come down? Just any thought there. Mark Spurbeck: A couple of thoughts. One, so North Goonyella is completely out. The holding costs there have been held stable here for the last 6 months to a year. Shoal Creek is out; holding costs there, about $10 million a quarter so far. Obviously, we're reinvesting in that asset, looking to move forward when the opportunity presents. In the current quarter, I'd say that we had some costs, Metrop ramping up, there's probably about a $4 million cost on the ramp-up. There is also a full month of holding costs there. So there's probably $7 million or $8 million of costs at Metrop that were included in the quarter that wouldn't be there on a go-forward basis. Nathan Martin: Got it, Mark. Thank you for that. And then I guess just sticking with Shoal Creek for a second, if you guys still expect the prep plant to be finished sometime here in 3Q, labor negotiations ongoing. I guess, if we assume a contract that's worked out, are there any limitations to ramping the mine back up immediately, whether it is geology or customer related, I think, as Jim pointed out in his prepared remarks? Mark Spurbeck: Well, Nathan, with the mine having sat for a while, there's going to be a gradual ramp-up back to full production. So on day 1, it would not come back at full production. And we put money into the prep plant into other parts of the facility. So there would be some commissioning period of starting the mine up before we could hit full production at some point a few months after start-up. Nathan Martin: Can you remind us what full production might look like at this point, 2 million, 3 million tons something around there? Mark Spurbeck: It can produce about 2 million, 2.5 million tons a year, in that range. Nathan Martin: And is that, again, like a high-vol A or more of a low-vol product? James Grech: That's more of a high-vol A product. Nathan Martin: Perfect. And then just one final question for me, guys. Thinking about CapEx, obviously, nice to see you lowered guidance here about $25 million to $200 million this year, which does include the $100 million for those, obviously thermal projects I'm assuming. If you look ahead, at what point does the major project spending wrap up? Jim, you mentioned a couple other projects. When can you guys think you can move down to more maintenance-like levels of spending and what might that look like on an absolute dollar basis? Mark Spurbeck: Yes. Nathan, a couple of things. We lowered that guidance, $25 million to $200 million this year. There is some additional further out project capital of $25 million that really resulted in that number. We said it before, I'd still say, $100 million on a sustaining basis is the right number. If you look at that $25 million reduction, does that fall into '22, most likely so. Maybe we got about $25 million, but the Wilpinjong extension project and the Wambo Open-Cut Joint Venture, those projects substantially complete this year. So we should be at a -- much closer to a sustaining $100 million next year with maybe that $25 million reduction falling in '22 from this year. Nathan Martin: Any early thoughts, Mark, on these projects as Jim mentioned, the Moorvale South or the Longwall 23 panel at Wambo? Mark Spurbeck: Yes. Both are great projects for the company. The Moorvale South, we will be on that in the second half of this year, and looks obviously quite promising. And then at today's prices and current economics, the Wambo Longwall panel 22, we announced we had done that earlier this year. Looking at 23 now, certainly looks to be quite attractive and very similar to 22. Operator: We'll take our next question from Matthew Fields with Bank of America. Matthew Fields: Welcome, Jim. James Grech: Thank you, Matthew. Matthew Fields: My first question is on the Australian thermal side. Obviously, with the new gas, oil price as strong as it is, you're seeing more of a lag due to the domestic contract. What can you do about that kind of domestic tonnage and maybe is there a price escalator in there, is there a way to kind of shift more into the export market while prices are so strong? What can you do to kind of help realizations on the thermal side in Australia? Mark Spurbeck: Yes, Matt, the domestic tonnage out of Wilpinjong there is really based on customer needs and really gives the first coal from the mine, I'll say. That's pretty ratable over the year. Looking at exporting about 3.7 million tons in the second half, 2.5 million of those tons are unpriced with the remainder priced at about $63 a ton. So certainly looking at some higher prices in the second half and higher volumes on the export side, in particular. As a reminder, Wilpinjong sold at a discount -- a high ash product, a discount to the API 5 index, which is currently above $90, but don't confuse that with a Newcastle's benchmark product. Matthew Fields: Sure. Thank you. And then on the balance sheet side, your release said that you had another $50 million of debt retirements to be settled after the quarter end. Can you just give us some detail on what tranches that $50 million entails? Mark Spurbeck: Yes. Most of that $50 million is in the term loan. It's just a delayed settlement of those. We've reached agreements to repurchase those at a substantial discount, as you saw from the expected gain in the quarter. Just a matter of timing, getting those settled. Most of that was the term loans I mentioned. There's about $5 million of additional 2022 notes that we've done debt for equity exchanges for us well. Some are the ones that we closed in the quarter. Matthew Fields: Okay. Thank you. And then, you're poised to generate a decent amount of cash flow in the back half here. Where in your capital structure, do you intend to kind of target that cash generation, is it in Australia, is it in the BTU corporate notes or the term loan? Can you just give us an idea of what your priorities are? Mark Spurbeck: Yes. Matt, as we said before, priority #1 is to maintain operating liquidity, and that hasn't changed. Certainly, in the current price environment, much higher cash flow generation opportunity these prices prevail, I'll remind everyone, the Wilpinjong free cash flow, which we just got done talking about the volumes and the pricing there, there is an excess cash flow sweep that's embedded with those notes. So anything generated at Wilpinjong, 100% of the excess cash flow will be swept to reduce the debt there at Wilpinjong, both the notes and the term loan at Wilpinjong. And then we'll continue to opportunistically look at opportunities to find ways to continue to deleverage and reduce debt if remaining cash flows provide that opportunity. Operator: We'll go next to Lucas Pipes with B. Riley Securities. Lucas Pipes: Thank you very much for taking my follow-up question. And I want to return to the market for just a moment here. Jim, when we talked about the market earlier, right, you mentioned the strength and your positive outlook. And I think what's so remarkable here is that the strength is occurring despite the Chinese ban of Australian coal. And you're in a unique position with your Australian portfolio to maybe comment on what is driving the strength, right? If you're not selling directly to China from Australia, what is driving prices higher in your opinion? Would really appreciate your thoughts on that? And then anything as it relates to CFR prices in China and how you might be able to take advantage of that in the future? Would also appreciate your thoughts on that. James Grech: Lucas, first off, historically, like in 2020, for example, only about 2% of our coal was sold into China. So the -- we didn't have to rebalance our portfolio very much with the event of the Australian coal going into China. And the market in general or in total, though, has rebounced, right? There's so much demand out there with the coal, the Australian coal that isn't going to China is finding its way to other markets. And then American coal is an example of finding its way to China. So I think the strong demand that's out there is certainly having an impact and the -- with the Chinese ban on Australian coal, now you're starting to see the Atlantic prices, metallurgical prices rising as well. So the market has found a way to balance itself. But again, for us, we historically have not been a seller of a lot of our coal into China. Lucas Pipes: As you look to restart Shoal Creek, could -- how accessible would the Chinese market be for that product? James Grech: Well, Shoal Creek, historically, it's had customers that are not in the market in China. But when we restarted that mine, that would certainly -- some of the customer inquiries, we are getting for coal are from that market. So we have commitments to our existing customers and we have a loyalty to our existing customers as well. So we'll make sure that we're meeting their needs. They are not in the China market. But we'll also, if we have the opportunity, certainly place some coal in that market. Operator: That will conclude our question-and-answer session today. At this time, I'd like to turn the call back over to Jim Grech for any additional or closing remarks. James Grech: Well, thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety, and for continuing to execute on our various productivity and cost improvement initiatives. I'd also like to thank our customers, investors, insurance providers, and our vendors for your continued support. Operator, that concludes our call. Operator: Thank you. That will conclude today's call. We appreciate your participation.

Operator: Good day, ladies and gentlemen and welcome to the Peabody Energy Q1 2021 Earnings Conference. 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. I would now like to turn the conference over to Ms. Alice Tharenos. Please go ahead, ma'am. Alice Tharenos: Good morning and thanks for joining Peabody's earnings call for the first quarter of 2021. With me today are President and CEO, Glenn Kellow; and CFO, Mark Spurbeck. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP measures. We encourage you to consider the Risk Factors referenced there along with our public filings with the SEC. I'll now turn the call over to Glenn. Glenn Kellow: Thanks Alice and good morning everyone. Before we get started this morning, I'd like to take a moment and welcome Alice to her new role as Head of IR and Communications for Peabody. Alice has over 20 years of financial and commercial experience with our company in the U.S. and overseas. Turning now to the quarter, we continue to see operational and productivity improvements take hold across the company. We're off to a good start on safety, particularly in the United States with injury rates for the quarter was [Technical Difficulty] Operator: Hello, this is the operator. It does seem as though the speaker's line has been muted and is no longer broadcasting audio to the conference. Please standby just for a few moments while we attempt to fix this issue. Thank you. Again, apologies for the inconvenience, but we are trying to reconnect the speakers. Call should be back to normal within a few moments. Again, thank you for your patience. Again we are still trying to reconnect our speakers today. So, please, if you could continue to standby while we do try and reconnect them. Thank you again for your patience. Again I would like to thank everyone for your continued patience. As I do believe the speakers are on their way back and the issue should be resolved shortly. Thank you. Perfect, it does look like we do have our speakers joining us back here today. So, I would now like to turn the call back over to Alice Tharenos to continue her remarks and again, apologies to everyone for the delay there. Glenn Kellow: Thank you. And yes, apologies. Somehow we were we were disconnected, but we could slink [ph] hello again and look, I'm just going to resume the comments. We were talking about the fact that our safety performance had improved probably 50% over the last year. We have lower cost per ton in three of our four operating segments compared to the prior year and further reduced SG&A spending. While seaborne thermal volumes and costs were temporarily impacted by flooding, and a ship letter outage, we anticipate performance progressively improving throughout the year. US thermal mines also performed well, lowering cost per ton 9% from the prior year, an outstanding performance given volumes were down 13%. Seaborne met cost per ton improve modestly over the prior year even as volumes were muted by idle mines and the ongoing pandemic. Productivity improvements at Coppabella and Moorvale contributed to the complex of becoming an $0.11 unfavorable increase in foreign currency rates. We continue to take action to improve our met coal operating performance. And while we recognize there certainly is more work to do, we are taking our foot off the pedal. At Shoal Creek, while the mine remains idle, we are continuing activities to increase productivity, lower costs, and improve yields in the future, resuming production and shipments are contingent upon completion of these initiatives, as well as stable customer demand. On these fronts, our labor contract expired April 1st and we've been in active negotiations with the union. We have made the decision also to upgrade the PRB plant to capture a yield improvement and we continue discussions with customers about our mine restart. As a reminder, that mine has historically had large and long-term customer relationships with the majority of volume as pricing off the hard coking coal market. We'd anticipate the PRB planned project to be completed in mid-quarter three. At Metropolitan, while discussions are ongoing with customers and the workforce, the full [Indiscernible] will return to the mine in early May. Development work has been partly ongoing through the idle period and normal production is anticipated to begin in the second quarter with the ramping up to full production plans in the third quarter of this year. You will recall that we've been continuing commercial process for North Goonyella. We've been impacted by a variety of factors. And while the process is ongoing, at this stage, it has not presented us with an any attractive executable options. We continue to be active across a range of fronts, regulatory, mine planning, and commercial and believe North Goonyella is a valuable asset with world-class infrastructure. You might also have seen that we recently entered into an agreement to sell our closed Millennium Line and assign a portion of the related asset retirement obligations to owners of a neighboring deposit. While this is still subject to closing conditions, it is an example of that continual evaluation of options. From a broader market perspective, seaborne thermal coal conditions remain favorable, while China's import restrictions are a significant disruptive factor to seaborne metallurgical coal prices, and continue to weigh on Australian hard coking coal, while lowball PCI has narrowed to near parity. Tight supply and low inventory levels of kept new counts of thermal pricing at improved levels year-to-date. China's domestic thermal supply remains hampered by heightened safety inspections. India's plants stocks have been falling gradually since mid-December, as government-owned plants reduce intake and there has been a delay in typical restocking ahead of the monsoon season in June. As at the end of March, India's planned inventory levels [Indiscernible] at approximately 15 days versus some 28 days a year ago. Our low costs thermal coal platform is well-positioned seaborne to take advantage of these higher near-term prices. Within the seaborne met coal market, the imbalance between Australian export and Chinese delivered prices remains wide. The delivered price into China is currently trading at roughly double those seen FOB Australia as the unofficial ban on Australian coals remains in place. In addition increased COVID concerns with the crisis in India are further weighing on Australian hard coking coal pricing. These factors continue to pressure the stable and met market, despite global steel production increasing 5% year-over-year. In contrast, the spread between Australian hard coking coal pricing and lowball PCI pricing has recently narrowed to near parity. Lowball PCI supply coupled with China paying a premium for Russian coals have contributed to rising lowball PCI prices. Here in the U.S., overall electricity demand increased 2% over last year, positively impacted by cold weather. Higher natural gas prices resulted in us thermal coal share of electricity generation increasing by 37% to 24%, while natural gas declines of 34%. As a result, coal inventories have fallen by 20 million tons since December. During the quarter, utility consumption of PRB coal rose approximately 35% compared to the prior year. I'll now turn things over to Mark to cover the financials. Mark Spurbeck: Thanks Glenn and good morning everyone. First quarter results demonstrated our continued focus on cost management and performance improvement, as cash flows from operations increased to $71 million compared to a net use in the prior year. This result was achieved despite lower volumes and average realized pricing. Compared to last year's first quarter, total volumes declined 15% with net shipments down 50% primarily due to the Shoal Creek and Metropolitan mines remaining suspended during the quarter. Lower pricing also weighed on results as average realized prices declined over $8 per ton for seaborne met products and $0.35 per ton for PRB thermal coals. Cost savings initiatives continued to garner results at the corporate office as well, with SG&A down 13% year-over-year, allowing us to revise our full year estimated SG&A costs down another $5 million. At this run rate, Peabody's annual SG&A expense would be at its lowest level since 1999. Interest expense of $52 million includes $11 million of one-time fees that were expensed upon completion of the refinancing transactions early in the quarter. Higher borrowing costs and amortization of related debt issuance costs also contributed to an increase in interest expense year-over-year. Loss from continuing operations net of income taxes totaled $78 million. Adjusted EBITDA of $61 million was 66% or $24 million higher than the first quarter of last year. Turning now to segment results. As expected, seaborne thermal costs and volumes were unfavorably impacted by the transition to the United Wambo joint venture. In addition, the stronger Australian dollar, historic flooding in New South Wales, and related impacts on the logistics chain and an unexpected ship loader outage at the Newcastle NCIG port raised cost in the quarter. While we were fortunate not to suspend any of these operations, first quarter shipments were about 400 tons lower than expected due to the logistics challenges. Continued strong performance at Wilpinjong partly offset these higher costs. During the quarter, Wilpinjong young sold 2.9 million tons, including 1.1 million export tons at an average cost of $23. Wilpinjong recorded $25 million of adjusted EBITDA and had $104 million of cash at March 31st. First quarter met volumes were impacted by Shoal Creek and Metropolitan remaining idled. However, we are seeing strong demand return for PCI products. We continue to take action to lower costs to a more competitive level and indeed, variable costs came down year-over-year. Cost per ton were in line with the prior year, despite shipments being down 1 million tons. Excluding idled mine costs, met costs were $84 per ton, about $3.5 lower than our average realized price for the quarter. Productivity improvements at Coppabella and Moorvale contributed to the cost declining $13 per ton, even with the unfavorable exchange rate impact. In the U.S., PRB cost decreased 7% year-over-year due to ongoing cost reduction initiatives and favorable pit sequencing. Cost per ton reductions were achieved even with shipments down 12%, of which an estimated 1 million tons was timing related from disruptions due to severe weather in February. Cost per ton also declined in the other U.S. thermal segment as we continue to benefit from ongoing cost management initiatives and productivity improvements. From a balance sheet perspective, we used some cash and completed the refinancing transactions, repaid approximately $54 million of debt, made scheduled interest payments, and reinvested in our asset portfolio with capital and net contributions to joint ventures. In addition, lower receivables, largely related to timing of seaborne shipments, resulted in outstanding letters of credit temporarily exceeding the balance of eligible receivables under our accounts receivable securitization facility. This required us to post $44 million of cash collateral recorded as restricted cash to back these LCs. As eligible receivables increase, this cash collateral would be returned to us. At March 31st, we had nearly $624 million of cash, cash equivalents, and restricted cash. Looking ahead to the remainder of the year, we are planning for PRB volumes in line with 2020. Currently, we have about 95% of those volumes priced. Other U.S. thermal shipments are expected to total 16 million tons. Cost for both segments are expected to be largely in line with the prior year. Seaborne thermal volumes and costs are expected to progressively improve from first quarter levels. We expect this segment to ship 17 million tons, including nine to 10 million tons of export coal. Compared to 2020, seaborne thermal costs are expected to increase given the lower volumes, higher expected royalties, and current unfavorable exchange rates. Seaborne met volumes are contingent upon the ongoing improvement programs and activities at Shoal Creek as well as customer demand. Metropolitan is expected to ramp up to a normal run rate in the third quarter. At Coppabella and Moorvale, volumes are expected to increase due to stronger customer demand and productivity improvements. As mentioned earlier, we are targeting lower SG&A than previously thought and maintaining our prior capital expenditure guidance of $225 million, which includes $135 million for significant reinvestment in Australian-based seaborne platforms. Looking ahead to next year, we are targeting lower capital expenditures due to a substantial reduction in major project spending. I'd now like to turn the call over for questions. Operator? Operator: Thank you. [Operator Instructions] Okay. So, we will now take our first question from David at BMO Capital Markets. Please go ahead. David Gagliano: All right. Thank you and thanks for taking my questions. I just have -- I have a -- I have a couple of short-term-ish and then one strategic question. On the short-term-ish type of questions. First of all, the second quarter outlook for flat or similar results. I was wondering wanting to get in talk through the puts and takes there. It looks like obviously, seaborne thermal prices are higher, there's some cost issues in the first quarter that seemed like they were one-time-ish in the seaborne thermal business. So, I would have expected a bit of a sequential improvement in the second quarter. So, I'm curious if you just talk through what the offsets are? That's my first question. And then, just real quickly, if you could just touch on what the volume expectations are from the Metropolitan mine, once it's restarted in the third quarter? And then my last -- sorry I'm going on -- but my last strategic question is if you could just give us an update on the CEO search. Thank you. Mark Spurbeck: Hi David, it's Mark. On seaborne thermal, you're right, we're seeing improved pricing in the thermal markets, Newcastle thermal. We are continuing to transition to the Wambo Open Cut joint venture. So, volumes are improving, but still lower than run rates, not expecting significant though overall improvement in the next quarter. Glenn Kellow: Maybe I'll take the next one, incentive Metropolitan, we've been continuing some development during this idle period. We're bringing back the workforce next week -- the remainder of the workforce next week. We'd expect to ramp up through the through the rest of the second quarter into the third quarter. That mine by reference produced about 1.3 million tons last year. And it is going to vary depending on longwall outages and longwall more move timings as well those ongoing cost demand. Your third question on the CEO search, the Board have indicated that -- the Company has indicated that it's undertaking both an external search and an internal search. And that process is still ongoing. David Gagliano: Okay, just real quick -- thank you for that by the way. And just a real quick follow-up on the -- back to the first question. I understand the commentary on the thermal, but just overall that the commentary was basically a kind of a similar, I believe, second quarter result versus the first quarter. So, where are the offsets to the positives that we're seeing in thermal -- seaborne thermal and the cost situation probably in seaborne thermal on a quarter-over-quarter basis? Mark Spurbeck: David, let me reiterate. I think Wilpinjong continues to perform according to the guidance that's out there and fairly consistent. I think, the Wambo Open Cut joint venture we have that impact. The underground as possibly had some inventory reductions in the quarter. We won't probably see that in the second quarter. Does that answer your question? David Gagliano: So, let me just ask it more directly. Are unit costs going up, flat, or down in seaborne thermal quarter-over-quarter in the second quarter? And similar question for the Met business as well? Mark Spurbeck: Thermal volumes coming down. David Gagliano: Okay. Mark Spurbeck: The unit cost improving sequentially over the first quarter. David Gagliano: And then on the met side? Mark Spurbeck: And on the met cost -- yes, again, the met volumes are really going to be contingent upon the ramp up of Metropolitan. The CM JV is having lower production in the second quarter. David Gagliano: Okay. Thank you. Operator: Thank you. We will now take our next question from Lucas at B. Riley Securities. Please go ahead. Lucas Pipes: Hey, good morning everyone. Question on Shoal Creek, you mentioned in the release a couple of activities to improve productivity there and I wanted to -- could you elaborate at what specifically would be happening underground or maybe at the surface even? Would appreciate that. And then also in terms of the negotiations on the labor side, anything you could share there? Would appreciate that. Thank you. Glenn Kellow: Thanks Lucas. And the thing I called out in terms of activity we made the decision to make some enhancements to the prep plant to upgrade yields. And that outage will take us through into the third quarter -- now in the middle of the of the third quarter. With respect to the labor discussion -- negotiations, as you would expect, are probably limited given their active discussions underway, limited on what I can say other than we are in discussions around ways in which we as a company believe that we can improve our competitiveness and productivity through that process. Lucas Pipes: I appreciate that and then follow-up on the prep plant modification. So, is it fair to conclude that Shoal Creek wouldn't be restarted before all those upgrades are completed? Glenn Kellow: Certainly that would be the limiting factor on shipments. With -- that would be true, it could be possible to run underground production before that time. Lucas Pipes: That's helpful. Thank you. And then bigger picture question. Over the years, there have been discussions around the logic behind a potential separation of seaboard and more domestic U.S. assets. Is that something that is potentially contemplated that could make sense? Or what do you see kind of Peabody evolving over the foreseeable future? Would appreciate any thoughts you can share? Thank you. Glenn Kellow: Lucas, as was indicated, there is a transition of the CEO underway. And that's probably best for the incoming CEO in terms of being able to respond to. Clearly the company, when you look across the portfolio, has an extremely strong U.S. thermal business. We have what we regard as the lowest cost and best position assets and the best basin in the PRB. Our Midwest business did exceptionally well in the quarter had very strong returns. And similarly, our seaborne thermal business is a strong business that's produced attractive margins. We've got more work to do on our met -- on the met front, you've seen the steps we've taken to improve that activity. And -- but there is more work to do at the same time, we believe in the long-term outlook for metallurgical coal. Lucas Pipes: I appreciate that. Thank you and best of luck. Glenn Kellow: Thanks Lucas. Operator: Thank you. So, that is all the questions we have in the queue at this time. So, I would like to turn the conference back over to Glenn Kellow. Glenn Kellow: Thank you, operator and look, apologies again for the technical disruptions that was at the start of the call. Thank you for joining us today. I'd especially like to thank our employees for continuing to keep safety at the forefront of all we do and continuing to execute on our various cost improvement initiatives. I'd also like to thank our customers, investors, and insurance providers for your continued support. Operator, that concludes our call today. Operator: Thank you. So, this does conclude today's call and you may now disconnect. Alice Tharenos: Good bye.