Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||||
Date of Report (Date of earliest event reported): July 28, 2015 | |||||||
PEABODY ENERGY CORPORATION | |||||||
(Exact name of registrant as specified in its charter) | |||||||
Delaware | 1-16463 | 13-4004153 | |||||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||
701 Market Street, St. Louis, Missouri | 63101-1826 | ||||||
(Address of principal executive offices) | (Zip Code) | ||||||
Registrant's telephone number, including area code: (314) 342-3400 | |||||||
N/A | |||||||
(Former name or former address, if changed since last report.) | |||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||||
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||||
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||||
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||||
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description of Exhibit |
99.1 | Press Release of Peabody Energy Corporation dated July 28, 2015. |
PEABODY ENERGY CORPORATION | |
July 28, 2015 | By: /s/ Amy B. Schwetz |
Name: Amy B. Schwetz | |
Title: Executive Vice President and Chief Financial Officer | |
Exhibit No. | Description |
99.1 | Press Release of Peabody Energy Corporation dated July 28, 2015. |
![]() | News Release |
CONTACT: Vic Svec (314) 342-7768 |
• | Second quarter revenues of $1.34 billion lead to Adjusted EBITDA of $87.0 million, including $21.2 million in restructuring charges |
• | Diluted loss per share from Continuing Operations totals $(3.71) including $(3.06) in impairments; Adjusted Diluted EPS totals $(0.65), including $(0.07) from restructuring |
• | Second quarter Australian costs improve 28% to $52 per ton; Australian margins expand to $6.48 per ton as cost improvements overcome declining market conditions |
• | PRB margins per ton total $3.11 despite $0.65 per ton weather-related impact; SG&A expenses decline 30% to lowest level in 8 years |
• | Reducing annual metallurgical coal sales targets by 1 million tons; Now targeting nearly 20% improvement in 2015 Australian costs per ton |
• | Operational Excellence: Peabody is implementing a series of actions at its operations to increase productivity, decrease costs, improve cash flows and reduce coking coal and low-vol PCI volumes given current market conditions. The company now targets a workforce reduction of more than 300 positions across multiple mines in Australia, and is lowering metallurgical production by approximately 3 million tons per year. Actions include reducing annualized metallurgical coal production by 1.5 million tons at the North Goonyella Mine, 1.2 million tons at the Coppabella Mine and 600,000 tons at the Metropolitan Mine. The company reduced its 2015 metallurgical sales target by approximately 1 million tons to reflect the remaining impact of lower production and inventory sales. |
• | Lean Organization: The company initiated the reduction of approximately 250 corporate and regional positions to create a leaner organization and lower costs. When fully implemented later this year, these reductions are expected to save $40 to $45 million per year. These reductions represent approximately 25 percent of corporate and regional support positions, and the majority of the reductions occurred in the second quarter. Actions also include delayering the organization and closing offices in Evansville, Indiana and Gillette, Wyoming. After a 30 percent reduction in second quarter SG&A to the lowest level in eight years, Peabody is targeting more than a 20 percent improvement in 2015 SG&A. |
• | Portfolio Management: Peabody completed approximately $35 million of non-core asset sales in the U.S. and Australia over the last several months. The company is aggressively reviewing additional portfolio optimization opportunities, and will continue to increase divestment actions in the second half of 2015 through sales of non-core reserves, surface lands and other properties. |
• | Financial Strength: The company is pursuing multiple avenues to maximize near-term liquidity and is targeting reduced leverage over time. Peabody benefits from lower annual cash payments in 2017 related to completion of PRB reserve installments, lower health benefit trust payments, and potential lower currency rates and fuel prices as legacy hedge transactions roll off. The company also has no significant maturities until late 2018. As part of the plan to maximize liquidity, the board of directors decided to suspend the company’s quarterly dividend on shares of its common stock, and will evaluate whether to reinstate the dividend in the future as circumstances warrant. The board of directors also authorized a reverse split of common stock, subject to shareholder approval. If the reverse stock split is implemented, the number of authorized, issued and outstanding shares of common stock would be reduced in accordance with the exchange ratio selected by the company, among five alternative ratios between 1-for-8 and 1-for-20 as approved by shareholders. |
New | Prior Guidance | |
2015 Guidance | (where changed) | |
Sales Volumes (in million tons) U.S. Australia Trading & Brokerage Total | 180 - 190 34 - 36 11 - 19 225 - 245 | 35 - 37 20 - 28 235 - 255 |
U.S. Operations Revenue Per Ton (vs 2014) Costs Per Ton (vs 2014) | $19.95 - $20.40 $14.65 - $15.00 | 3% - 5% lower 3% - 5% lower |
Australia Operations Metallurgical Coal Sales Export Thermal Coal Sales Domestic Thermal Coal Sales Costs Per Ton | 14 - 15 million tons 12 - 13 million tons 8 million tons $53 - $56 | 15 - 16 million tons |
Selling & Administrative Expenses | $170 - $180 million | |
Depreciation, Depletion and Amortization | $580 - $620 million | $600 - $640 million |
Capital Expenditures | $160 - $170 million | $170 - $190 million |
Currency and Fuel Hedge Position | ||||
Potential lower costs compared to 2015 and sensitivities are in millions of U.S. dollars | ||||
Australian Dollar Hedging | 2015 | 2016 | 2017 | |
Percent Hedged - from 6/30/15 | 56% | 42% | 22% | |
Hedge Rate | $0.96 | $0.92 | $0.88 | |
All-in Rate - full year | $0.89 | $0.83 | $0.78 | |
Potential Lower Costs Compared to 2015 | $161 | $277 | ||
Fuel Hedging | 2015 | 2016 | 2017 | |
Percent Hedged - from 6/30/15 | 90% | 64% | 44% | |
Hedge Price (per barrel equivalent) | $84 | $85 | $79 | |
All-in Price (per barrel equivalent) - full year | $82 | $75 | $70 | |
Potential Lower Costs Compared to 2015 | $26 | $44 | ||
Total Potential Lower Costs Compared to 2015 | $187 | $321 | ||
Cost Sensitivity | ||||
Unhedged AUD position sensitivity to $0.05 move | $27 | $69 | $93 | |
Unhedged Fuel position sensitivity to $10 bbl move | $3 | $16 | $24 |
Condensed Consolidated Statements of Operations (Unaudited) | ![]() | ||||||||||||||||
For the Quarters and Six Months Ended Jun. 30, 2015 and 2014 | |||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||
Jun. | Jun. | Jun. | Jun. | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Tons Sold | 51.9 | 61.7 | 112.5 | 123.0 | |||||||||||||
Revenues | $ | 1,339.3 | $ | 1,758.0 | $ | 2,877.2 | $ | 3,384.8 | |||||||||
Operating Costs and Expenses (1) | 1,198.8 | 1,467.6 | 2,520.4 | 2,862.4 | |||||||||||||
Depreciation, Depletion and Amortization | 147.1 | 163.1 | 294.6 | 320.3 | |||||||||||||
Asset Retirement Obligation Expenses | 13.9 | 15.9 | 28.1 | 31.5 | |||||||||||||
Selling and Administrative Expenses | 41.6 | 59.2 | 91.0 | 118.7 | |||||||||||||
Restructuring Charges | 21.2 | — | 21.2 | — | |||||||||||||
Other Operating (Income) Loss: | |||||||||||||||||
Net Gain on Disposal of Assets | (12.2 | ) | (2.2 | ) | (12.3 | ) | (12.0 | ) | |||||||||
Asset Impairment | 900.8 | — | 900.8 | — | |||||||||||||
Loss from Equity Affiliates: | |||||||||||||||||
Results of Operations | 2.9 | 20.3 | 4.3 | 25.7 | |||||||||||||
Change in Deferred Tax Asset Valuation Allowance | (1.1 | ) | — | (0.8 | ) | — | |||||||||||
Amortization of Basis Difference | 2.1 | 1.3 | 3.5 | 2.5 | |||||||||||||
Loss from Equity Affiliates | 3.9 | 21.6 | 7.0 | 28.2 | |||||||||||||
Operating (Loss) Profit | (975.8 | ) | 32.8 | (973.6 | ) | 35.7 | |||||||||||
Interest Income | (2.7 | ) | (4.4 | ) | (5.2 | ) | (8.0 | ) | |||||||||
Interest Expense: | |||||||||||||||||
Interest Expense | 118.9 | 103.6 | 225.5 | 206.9 | |||||||||||||
Loss on Debt Extinguishment | 8.3 | 1.6 | 67.8 | 1.6 | |||||||||||||
Interest Expense | 127.2 | 105.2 | 293.3 | 208.5 | |||||||||||||
Loss from Continuing Operations Before Income Taxes | (1,100.3 | ) | (68.0 | ) | (1,261.7 | ) | (164.8 | ) | |||||||||
Income Tax (Benefit) Provision: | |||||||||||||||||
(Benefit) Provision | (25.7 | ) | 5.3 | (22.5 | ) | (45.8 | ) | ||||||||||
Tax Benefit Related to Asset Impairment | (67.4 | ) | — | (67.4 | ) | — | |||||||||||
Remeasurement Benefit Related to Foreign Income Tax Accounts | — | (1.3 | ) | (0.2 | ) | (2.7 | ) | ||||||||||
Income Tax (Benefit) Provision | (93.1 | ) | 4.0 | (90.1 | ) | (48.5 | ) | ||||||||||
Loss from Continuing Operations, Net of Income Taxes | (1,007.2 | ) | (72.0 | ) | (1,171.6 | ) | (116.3 | ) | |||||||||
(Loss) Income from Discontinued Operations, Net of Income Taxes | (36.3 | ) | 0.8 | (45.2 | ) | 1.0 | |||||||||||
Net Loss | (1,043.5 | ) | (71.2 | ) | (1,216.8 | ) | (115.3 | ) | |||||||||
Less: Net Income Attributable to Noncontrolling Interests | 1.8 | 2.1 | 5.1 | 6.5 | |||||||||||||
Net Loss Attributable to Common Stockholders | $ | (1,045.3 | ) | $ | (73.3 | ) | $ | (1,221.9 | ) | $ | (121.8 | ) | |||||
Adjusted EBITDA | $ | 87.0 | $ | 213.1 | $ | 252.6 | $ | 390.0 | |||||||||
Diluted EPS - Loss from Continuing Operations (2)(3) | $ | (3.71 | ) | $ | (0.28 | ) | $ | (4.34 | ) | $ | (0.46 | ) | |||||
Diluted EPS - Net Loss Attributable to Common Stockholders (2) | $ | (3.84 | ) | $ | (0.27 | ) | $ | (4.51 | ) | $ | (0.46 | ) | |||||
Adjusted Diluted EPS (2) | $ | (0.65 | ) | $ | (0.28 | ) | $ | (1.27 | ) | $ | (0.47 | ) | |||||
(1) | Excludes items shown separately. | ||||||||||||||||
(2) | Weighted average diluted shares outstanding were 272.3 million and 268.0 million for the quarters ended Jun. 30, 2015 and 2014, respectively, and 271.2 million and 267.9 million for the six months ended Jun. 30, 2015 and 2014, respectively. | ||||||||||||||||
(3) | Reflects loss from continuing operations, net of income taxes, less net income attributable to noncontrolling interests. | ||||||||||||||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. | |||||||||||||||||
Supplemental Financial Data (Unaudited) | ![]() | |||||||||||||||||
For the Quarters and Six Months Ended Jun. 30, 2015 and 2014 | ||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||
Jun. | Jun. | Jun. | Jun. | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenue Summary (In Millions) | ||||||||||||||||||
U.S. Mining Operations | $ | 822.3 | $ | 1,031.2 | $ | 1,787.3 | $ | 2,016.2 | ||||||||||
Australian Mining Operations | 505.9 | 707.4 | 1,054.1 | 1,319.2 | ||||||||||||||
Trading and Brokerage Operations | 1.5 | 10.3 | 18.2 | 31.3 | ||||||||||||||
Other | 9.6 | 9.1 | 17.6 | 18.1 | ||||||||||||||
Total | $ | 1,339.3 | $ | 1,758.0 | $ | 2,877.2 | $ | 3,384.8 | ||||||||||
Tons Sold (In Millions) | ||||||||||||||||||
Powder River Basin Mining Operations | 30.4 | 34.1 | 67.6 | 69.8 | ||||||||||||||
Midwestern U.S. Mining Operations | 5.2 | 6.2 | 11.1 | 12.4 | ||||||||||||||
Western U.S. Mining Operations | 4.3 | 6.0 | 9.0 | 11.8 | ||||||||||||||
Australian Metallurgical Mining Operations | 4.0 | 4.8 | 7.7 | 7.9 | ||||||||||||||
Australian Thermal Mining Operations | 4.6 | 4.9 | 9.7 | 10.0 | ||||||||||||||
Trading and Brokerage Operations | 3.4 | 5.7 | 7.4 | 11.1 | ||||||||||||||
Total | 51.9 | 61.7 | 112.5 | 123.0 | ||||||||||||||
Revenues per Ton - Mining Operations | ||||||||||||||||||
Powder River Basin (1) | $ | 13.47 | $ | 14.63 | $ | 13.58 | $ | 13.83 | ||||||||||
Midwestern U.S. | 46.09 | 49.09 | 46.60 | 49.03 | ||||||||||||||
Western U.S. | 39.36 | 38.09 | 38.67 | 37.58 | ||||||||||||||
Total - U.S. (1) | 20.55 | 22.27 | 20.35 | 21.44 | ||||||||||||||
Australian Metallurgical | 78.99 | 95.76 | 83.96 | 100.22 | ||||||||||||||
Australian Thermal | 41.99 | 50.95 | 42.37 | 52.90 | ||||||||||||||
Total - Australia | 58.96 | 73.16 | 60.77 | 73.77 | ||||||||||||||
Operating Costs per Ton (2) | ||||||||||||||||||
Powder River Basin (1) | $ | 10.36 | $ | 10.19 | $ | 10.11 | $ | 10.00 | ||||||||||
Midwestern U.S. | 33.34 | 37.84 | 33.46 | 36.98 | ||||||||||||||
Western U.S. | 27.84 | 26.33 | 27.38 | 26.62 | ||||||||||||||
Total - U.S. (1) | 15.27 | 15.97 | 14.85 | 15.63 | ||||||||||||||
Australian Metallurgical | 79.11 | 106.14 | 82.24 | 115.16 | ||||||||||||||
Australian Thermal | 29.91 | 39.65 | 31.57 | 38.48 | ||||||||||||||
Total - Australia | 52.48 | 72.61 | 53.99 | 72.30 | ||||||||||||||
Gross Margin per Ton (2) | ||||||||||||||||||
Powder River Basin (1) | $ | 3.11 | $ | 4.44 | $ | 3.47 | $ | 3.83 | ||||||||||
Midwestern U.S. | 12.75 | 11.25 | 13.14 | 12.05 | ||||||||||||||
Western U.S. | 11.52 | 11.76 | 11.29 | 10.96 | ||||||||||||||
Total - U.S. (1) | 5.28 | 6.30 | 5.50 | 5.81 | ||||||||||||||
Australian Metallurgical | (0.12 | ) | (10.38 | ) | 1.72 | (14.94 | ) | |||||||||||
Australian Thermal | 12.08 | 11.30 | 10.80 | 14.42 | ||||||||||||||
Total - Australia | 6.48 | 0.55 | 6.78 | 1.47 | ||||||||||||||
Other Supplemental Financial Data (In Millions) | ||||||||||||||||||
Adjusted EBITDA - U.S. Mining | $ | 211.5 | $ | 291.6 | $ | 483.0 | $ | 546.2 | ||||||||||
Adjusted EBITDA - Australian Mining | 55.8 | 5.3 | 117.7 | 26.3 | ||||||||||||||
Adjusted EBITDA - Trading and Brokerage | (2.8 | ) | 6.3 | 1.0 | 4.4 | |||||||||||||
Adjusted EBITDA - Resource Management (3) | 9.9 | 1.7 | 11.1 | 11.2 | ||||||||||||||
Corporate Hedging Results | (105.9 | ) | 7.2 | (209.7 | ) | (14.0 | ) | |||||||||||
Selling and Administrative Expenses | (41.6 | ) | (59.2 | ) | (91.0 | ) | (118.7 | ) | ||||||||||
Restructuring Charges | (21.2 | ) | — | (21.2 | ) | — | ||||||||||||
Other Operating Costs, Net (4) | (18.7 | ) | (39.8 | ) | (38.3 | ) | (65.4 | ) | ||||||||||
Adjusted EBITDA | 87.0 | 213.1 | 252.6 | 390.0 | ||||||||||||||
Operating Cash Flows | (59.8 | ) | 26.2 | (56.4 | ) | 80.3 | ||||||||||||
Acquisitions of Property, Plant and Equipment | 25.8 | 40.3 | 50.9 | 64.7 | ||||||||||||||
(1) | The finalization of pricing under a customer sales agreement resulted in additional Powder River Basin revenues per ton, operating costs per ton, and gross margin per ton of $1.27, $0.24, and $1.03, respectively for the quarter ended Jun 30, 2014, and $0.48, $0.09, and $0.39, respectively, for the six months ended Jun. 30, 2014. The impact on Total - U.S. revenues per ton, operating costs per ton, and gross margin per ton was $0.93, $0.17, and $0.76, respectively, for the quarter ended Jun. 30, 2014, and $0.36, $0.07, and $0.29, respectively, for the six months ended Jun. 30, 2014. | |||||||||||||||||
(2) | Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring charges; asset impairment; and certain other costs related to post-mining activities. | |||||||||||||||||
(3) | Includes certain asset sales, property management costs and revenues, and coal royalty expense. | |||||||||||||||||
(4) | Includes loss from equity affiliates (before the impact of related changes in deferred tax asset valuation allowance and amortization of basis difference) and costs associated with post-mining activities. | |||||||||||||||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. |
Condensed Consolidated Balance Sheets | ![]() | |||||||
As of Jun. 30, 2015 and Dec. 31, 2014 | ||||||||
(Dollars In Millions) | ||||||||
(Unaudited) | ||||||||
Jun. 30, 2015 | Dec. 31, 2014 | |||||||
Cash and Cash Equivalents | $ | 487.1 | $ | 298.0 | ||||
Accounts Receivable, Net | 301.7 | 563.1 | ||||||
Inventories | 395.6 | 406.5 | ||||||
Deferred Income Taxes | 78.4 | 80.0 | ||||||
Other Current Assets | 431.2 | 363.4 | ||||||
Total Current Assets | 1,694.0 | 1,711.0 | ||||||
Property, Plant, Equipment and Mine Development, Net | 9,494.0 | 10,577.3 | ||||||
Deferred Income Taxes | 1.5 | 0.7 | ||||||
Investments and Other Assets | 671.9 | 902.1 | ||||||
Total Assets | $ | 11,861.4 | $ | 13,191.1 | ||||
Current Portion of Long-Term Debt | $ | 20.4 | $ | 21.2 | ||||
Accounts Payable and Accrued Expenses | 1,486.7 | 1,809.2 | ||||||
Other Current Liabilities | 21.3 | 32.7 | ||||||
Total Current Liabilities | 1,528.4 | 1,863.1 | ||||||
Long-Term Debt, Less Current Portion | 6,284.8 | 5,965.6 | ||||||
Deferred Income Taxes | 87.9 | 89.1 | ||||||
Other Noncurrent Liabilities | 2,304.3 | 2,546.8 | ||||||
Total Liabilities | 10,205.4 | 10,464.6 | ||||||
Stockholders' Equity | 1,656.0 | 2,726.5 | ||||||
Total Liabilities and Stockholders' Equity | $ | 11,861.4 | $ | 13,191.1 | ||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. | ||||||||
Reconciliation of Non-GAAP Financial Measures (Unaudited) | ![]() | ||||||||||||||||
For the Quarters and Six Months Ended Jun. 30, 2015 and 2014 | |||||||||||||||||
(Dollars In Millions, Except Per Share Data) | Quarter Ended | Six Months Ended | |||||||||||||||
Jun. | Jun. | Jun. | Jun. | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Adjusted EBITDA | $ | 87.0 | $ | 213.1 | $ | 252.6 | $ | 390.0 | |||||||||
Depreciation, Depletion and Amortization | 147.1 | 163.1 | 294.6 | 320.3 | |||||||||||||
Asset Retirement Obligation Expenses | 13.9 | 15.9 | 28.1 | 31.5 | |||||||||||||
Change in Deferred Tax Asset Valuation Allowance Related to Equity Affiliates | (1.1 | ) | — | (0.8 | ) | — | |||||||||||
Amortization of Basis Difference Related to Equity Affiliates | 2.1 | 1.3 | 3.5 | 2.5 | |||||||||||||
Interest Income | (2.7 | ) | (4.4 | ) | (5.2 | ) | (8.0 | ) | |||||||||
Interest Expense | 127.2 | 105.2 | 293.3 | 208.5 | |||||||||||||
Income Tax (Benefit) Provision, Excluding Tax Items Shown Separately Below | (25.7 | ) | 5.3 | (22.5 | ) | (45.8 | ) | ||||||||||
Adjusted Loss from Continuing Operations (1) | (173.8 | ) | (73.3 | ) | (338.4 | ) | (119.0 | ) | |||||||||
Asset Impairment | 900.8 | — | 900.8 | — | |||||||||||||
Tax Benefit Related to Asset Impairment | (67.4 | ) | — | (67.4 | ) | — | |||||||||||
Remeasurement Benefit Related to Foreign Income Tax Accounts | — | (1.3 | ) | (0.2 | ) | (2.7 | ) | ||||||||||
Loss from Continuing Operations, Net of Income Taxes | $ | (1,007.2 | ) | $ | (72.0 | ) | $ | (1,171.6 | ) | $ | (116.3 | ) | |||||
Net Income Attributable to Noncontrolling Interests | $ | 1.8 | $ | 2.1 | $ | 5.1 | $ | 6.5 | |||||||||
Diluted EPS - Loss from Continuing Operations (2) | $ | (3.71 | ) | $ | (0.28 | ) | $ | (4.34 | ) | $ | (0.46 | ) | |||||
Asset Impairment, Net of Income Taxes | 3.06 | — | 3.07 | — | |||||||||||||
Remeasurement Benefit Related to Foreign Income Tax Accounts | — | — | — | (0.01 | ) | ||||||||||||
Adjusted Diluted EPS | $ | (0.65 | ) | $ | (0.28 | ) | $ | (1.27 | ) | $ | (0.47 | ) | |||||
(1) | In order to arrive at the numerator used to calculate Adjusted Diluted EPS, it is necessary to deduct net income attributable to noncontrolling interests from this amount. | ||||||||||||||||
(2) | Reflects loss from continuing operations, net of income taxes, less net income attributable to noncontrolling interests. | ||||||||||||||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. |