Bulletin
Investor Alert

New York Markets Open in:

Feb. 23, 2021, 6:40 a.m. EST

10-K: PEABODY ENERGY CORP

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

(EDGAR Online via COMTEX) -- Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Overview In 2020, we produced and sold 128.8 million and 132.6 million tons of coal, respectively, from continuing operations. As of December 31, 2020, we report our results of operations primarily through the following reportable segments: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S. Thermal Mining and Corporate and Other. The business of our seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of our thermal and metallurgical coal sold within Australia. Generally, revenues from individual countries vary year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. We classify our seaborne mines within the Seaborne Thermal Mining or Seaborne Metallurgical Mining segments based on the primary customer base and coal reserve type of each mining operation. A small portion of the coal mined by the Seaborne Thermal Mining segment is of a metallurgical grade. Similarly, a small portion of the coal mined by the Seaborne Metallurgical Mining segment is of a thermal grade. Additionally, we may market some of our metallurgical coal products as a thermal coal product from time to time depending on market conditions. Our Seaborne Thermal Mining operations consist of mines in New South Wales, Australia. The mines in that segment utilize both surface and underground extraction processes to mine low-sulfur, high Btu thermal coal. Our Seaborne Metallurgical Mining operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama. The mines in that segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal (low-sulfur, high Btu coal). The metallurgical coal qualities include hard coking coal, semi-hard coking coal, semi-soft coking coal and PCI coal. The principal business of our thermal mining segments in the U.S. is the mining, preparation and sale of thermal coal, sold primarily to electric utilities in the U.S. under long-term contracts, with a relatively small portion sold as international exports as conditions warrant. Our Powder River Basin Mining operations consist of our mines in Wyoming. The mines in that segment are characterized by surface mining extraction processes, coal with a lower sulfur content and Btu and higher customer transportation costs (due to longer shipping distances). Our Other U.S. Thermal Mining operations historically reflect the aggregation of our Illinois, Indiana, New Mexico, Colorado and Arizona mining operations. The mines in that segment are characterized by a mix of surface and underground mining extraction processes, coal with a higher sulfur content and Btu and lower customer transportation costs (due to shorter shipping distances). Geologically, our Powder River Basin Mining operations mine sub-bituminous coal deposits and our Other U.S. Thermal Mining operations mine both bituminous and sub-bituminous coal deposits. Our Corporate and Other segment includes selling and administrative expenses, including our technical and shared services functions; results from equity affiliates; corporate hedging activities; trading and brokerage activities; results from certain mining and export/transportation joint ventures; minimum charges on certain transportation-related contracts; the closure of inactive mining sites; and certain commercial matters. Resource Management. As of December 31, 2020, we controlled approximately 3.0 billion tons of proven and probable coal reserves and approximately 450,000 acres of surface property through ownership and lease agreements. We have an ongoing asset optimization program whereby our property management group regularly reviews these reserves and surface properties for opportunities to generate earnings and cash flow through the sale or exchange of non-strategic coal reserves and surface lands. These surface lands include acres where we have completed post-mining reclamation. In addition, we generate revenue through royalties from coal reserves and oil and gas rights leased to third parties and farm income from surface lands under third-party contracts. Middlemount Mine. We own a 50% equity interest in Middlemount, which owns the Middlemount Mine in Queensland, Australia. The mine predominantly produces semi-hard coking coal and LV PCI coal for sale into seaborne coal markets through Abbot Point Coal Terminal, with some capacity also secured at Dalrymple Bay Coal Terminal. Mining operations first commenced at the Middlemount Mine in late 2011. During the years ended December 31, 2020, 2019 and 2018, the mine sold 3.2 million, 2.9 million and 4.2 million tons of coal, respectively (on a 100% basis). Peabody Energy Corporation 2020 Form 10-K 53

Table of Contents

Table of Contents







                                                       High          Low        Average       December 31, 2020
         Premium HCC (1)                            $ 163.40      $ 97.60      $ 124.11      $           101.60
         Premium PCI coal (1)                       $ 102.80      $ 65.75      $  78.42      $            91.50
         Newcastle index thermal coal (1)           $  85.31      $ 47.99      $  60.24      $            83.72
         API 5 thermal coal (1)                     $  59.63      $ 35.16      $  44.74      $            55.00
         PRB 8,800 Btu/Lb coal (2)                  $  12.10      $ 11.55      $  11.83      $            11.85
         Illinois Basin 11,500 Btu/Lb coal (2)      $  33.80      $ 27.75      $  30.27      $            29.75
        (1)  Prices expressed per tonne.
        (2)  Prices expressed per ton.
        


Table of Contents

Table of Contents







        Tons Sold
        The following table presents tons sold by operating segment:
                                                                                                                          (Decrease) Increase
                                                                         Year Ended December 31,                              to Volumes
                                                                     2020                         2019                  Tons                   %
                                                                                        (Tons in millions)
        Seaborne Thermal Mining                                        19.0                         19.5                    (0.5)             (2.6) %
        Seaborne Metallurgical Mining                                   5.6                          8.1                    (2.5)            (30.9) %
        Powder River Basin Mining                                      87.2                        108.1                   (20.9)            (19.3) %
        Other U.S. Thermal Mining                                      18.3                         27.9                    (9.6)            (34.4) %
        Total tons sold from mining segments                          130.1                        163.6                   (33.5)            (20.5) %
        Corporate and Other                                             2.5                          1.9                     0.6              31.6  %
        Total tons sold                                               132.6                        165.5                   (32.9)            (19.9) %
        








        Supplemental Financial Data
        The following table presents supplemental financial data by operating segment:
                                                                    Year Ended December 31,                  (Decrease) Increase
                                                                    2020                2019                 $                  %
        Revenues per Ton - Mining Operations (1)
        Seaborne Thermal                                       $      37.46          $  49.69          $   (12.23)             (24.6) %
        Seaborne Metallurgical                                        86.33            127.62              (41.29)             (32.4) %
        Powder River Basin                                            11.37             11.37                   -                  -  %
        Other U.S. Thermal                                            38.73             46.85               (8.12)             (17.3) %
        Costs per Ton - Mining Operations (1) (2)
        Seaborne Thermal                                       $      28.87          $  32.84          $    (3.97)             (12.1) %
        Seaborne Metallurgical (3)                                   109.44            110.30               (0.86)              (0.8) %
        Powder River Basin                                             9.14              9.32               (0.18)              (1.9) %
        Other U.S. Thermal                                            29.51             33.91               (4.40)             (13.0) %
        Adjusted EBITDA Margin per Ton - Mining Operations (1)
        (2)
        Seaborne Thermal                                       $       8.59          $  16.85          $    (8.26)             (49.0) %
        Seaborne Metallurgical (3)                                   (23.11)            17.32              (40.43)            (233.4) %
        Powder River Basin                                             2.23              2.05                0.18                8.8  %
        Other U.S. Thermal                                             9.22             12.94               (3.72)             (28.7) %
        


(1)This is an operating/statistical measure not recognized in accordance with U.S. GAAP. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.

Table of Contents







        Revenues
        The following table presents revenues by reporting segment:
                                                                                        Decrease
                                              Year Ended December 31,                 to Revenues
                                                2020               2019             $              %
                                                       (Dollars in millions)
        Seaborne Thermal Mining         $       711.8           $   971.7      $   (259.9)       (26.7) %
        Seaborne Metallurgical Mining           486.5             1,033.1          (546.6)       (52.9) %
        Powder River Basin Mining               991.1             1,228.7          (237.6)       (19.3) %
        Other U.S. Thermal Mining               707.3             1,309.4          (602.1)       (46.0) %
        Corporate and Other                     (15.6)               80.5           (96.1)      (119.4) %
        Revenues                        $     2,881.1           $ 4,623.4      $ (1,742.3)       (37.7) %
        


Seaborne Thermal Mining. The decrease in our Seaborne Thermal Mining segment revenues for the year ended December 31, 2020 compared to the prior year was driven by unfavorable realized coal pricing ($220.3 million) and unfavorable volume and mix variances ($39.6 million).







                                                                                                            (Decrease) Increase to
                                                                    Year Ended December 31,                    Adjusted EBITDA
                                                                    2020                2019                 $                  %
                                                                               (Dollars in millions)
        Seaborne Thermal Mining                                $      163.2          $  329.4          $   (166.2)             (50.5) %
        Seaborne Metallurgical Mining                                (130.2)            140.2              (270.4)            (192.9) %
        Powder River Basin Mining                                     194.8             221.2               (26.4)             (11.9) %
        Other U.S. Thermal Mining                                     168.4             361.4              (193.0)             (53.4) %
        Corporate and Other                                          (137.4)           (169.2)               31.8               18.8  %
        Adjusted EBITDA (1)                                    $      258.8          $  883.0          $   (624.2)             (70.7) %
        


. . .

Feb 23, 2021

COMTEX_381582281/2041/2021-02-23T06:40:00

Is there a problem with this press release? Contact the source provider Comtex at editorial@comtex.com. You can also contact MarketWatch Customer Service via our Customer Center.

(c) 1995-2021 Cybernet Data Systems, Inc. All Rights Reserved

This Story has 0 Comments
Be the first to comment

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.