Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||||
Date of Report (Date of earliest event reported): February 8, 2016 | |||||||
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 February 11, 2016 |
PEABODY ENERGY CORPORATION | |
February 11, 2016 | 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 February 11, 2016. |
![]() | PEABODY ENERGY News Release |
• | 2015 revenues of $5.61 billion lead to Adjusted EBITDA of $434.6 million, including $23.5 million in restructuring charges |
• | Diluted Loss Per Share from Continuing Operations totals $(102.62); Adjusted Diluted EPS totals $(36.39) |
• | Australian costs per ton improve 24% to record low for platform; U.S. costs per ton improve 5% even with lower volumes; Capital spending declines 35% to $127 million |
• | 2016 targets include 18 to 28 million ton decline in U.S.; Reduced hedging losses; Lower SG&A expense |
• | Amid difficult market conditions, additional aggressive steps underway to improve the business, preserve liquidity and reduce debt |
• | Liquidity totaled $1.20 billion at the end of December. Peabody also had $709.0 million in letters of credit. |
• | The company accessed the remaining capacity under its $1.65 billion revolving credit facility, which provides Peabody with the maximum amount of control and flexibility with respect to its liquidity position in light of continued challenging market conditions. |
• | Driving continuous improvement in safety, productivity and costs. In 2015, Peabody transformed its operations to respond to difficult market conditions. The company set a new record for safety, with a 13 percent reduction in the global safety incidence rate to 1.25 per 200,000 hours worked for employees and contractors. In the U.S. and Australia, Peabody improved costs by 5 percent and 24 percent, respectively, and gross margins across four of the company’s five operating segments averaged 26 percent. 2015 capital spending declined 35 percent, and extensive efforts were advanced to streamline the organization leading to a 22 percent reduction in SG&A expenses, the lowest levels in nearly a decade. Given ongoing market challenges, the company continues to drive cost improvements at all levels of the organization. |
• | Preserving liquidity while reducing debt. The company continued to preserve liquidity in 2015 by completing a bond offering, modifying its credit agreement, reducing costs and lowering capital spending. Peabody and its advisors are currently in discussions with debt holders to evaluate financial alternatives, including potential debt exchanges, debt buybacks and new financing, to preserve liquidity and delever the balance sheet. Peabody also has a number of committed obligations that expire or meaningfully decline in the next two years: |
◦ | The company’s final PRB reserve installment of approximately $250 million is scheduled to be paid in the second half of 2016. The payment is related to the company’s last lease-by-application process in 2012. As a result of investments in prior years, Peabody’s PRB reserves represent more than 25 years of current production, which provides a competitive advantage relative to other producers. |
◦ | Peabody’s existing currency and fuel hedges decline in 2016 and expire by the end of 2017. As these positions expire, the company expects progressively lower cash settlements in 2016 and 2017 relative to realized 2015 hedge losses of $436.8 million. |
◦ | The company proactively assigned excess Australian port capacity to another producer, which is expected to reduce infrastructure costs by approximately $60 million through 2020. In addition, Peabody recently amended contracts to reduce certain U.S. transportation and logistics costs expected to be due in early 2017. In connection with these amendments, Peabody will realize a net reduction of approximately $45 million in estimated liquidated damage payments that otherwise would have become due in early 2017. |
◦ | The company recently amended its 2013 agreement with the United Mine Workers of America, improving Peabody’s expected 2017 cash flows by $70 million while deferring the 2016 payments over 10 months. |
• | Reshaping the portfolio to unlock value. Peabody announced the planned sale of its New Mexico and Colorado assets for $358 million in November, and the purchaser is currently arranging financing. Peabody also announced plans to divest its interest in the Prairie State Energy Campus for $57 million. In 2015, the company realized cash proceeds of $70 million related to its ongoing resource management activities through the sale of surplus land and coal reserves. Peabody continues to evaluate its portfolio to target the best markets, with a filter that includes strategic fit, value consideration, growth and cash requirements as the company further emphasizes its core mining assets in the PRB, Illinois Basin and Australia. |
2016 Guidance | |
Sales Volumes (in million tons) | |
U.S. | 150 - 160 |
Australia | 34 - 36 |
Trading & Brokerage | 11 - 14 |
Total | 195 - 210 |
U.S. Operations | |
Revenue Per Ton | $19.65 - $19.95 |
Costs Per Ton | $14.70 - $15.00 |
Australia Operations | |
Metallurgical Coal Sales | 14 - 15 million tons |
Export Thermal Coal Sales | 12 - 13 million tons |
Domestic Thermal Coal Sales | ~8 million tons |
Costs per Ton | $45 - $48 |
Selling & Administrative | $145 - $155 million |
Expenses | |
Depreciation, Depletion and | $470 - $530 million |
Amortization | |
Capital Expenditures | $120 - $140 million |
Condensed Consolidated Statements of Operations (Unaudited) | ![]() | ||||||||||||||||
For the Quarters and Years Ended Dec. 31, 2015 and 2014 | |||||||||||||||||
(In Millions, Except Per Share Data) | |||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||
Dec. | Dec. | Dec. | Dec. | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Tons Sold | 57.9 | 64.3 | 228.8 | 249.8 | |||||||||||||
Revenues | $ | 1,313.1 | $ | 1,684.5 | $ | 5,609.2 | $ | 6,792.2 | |||||||||
Operating Costs and Expenses (1) | 1,233.3 | 1,401.2 | 5,007.7 | 5,716.9 | |||||||||||||
Depreciation, Depletion and Amortization | 141.6 | 171.8 | 572.2 | 655.7 | |||||||||||||
Asset Retirement Obligation Expenses | 5.1 | 34.5 | 45.5 | 81.0 | |||||||||||||
Selling and Administrative Expenses | 47.6 | 55.5 | 176.4 | 227.1 | |||||||||||||
Restructuring and Pension Settlement Charges | 0.5 | 26.0 | 23.5 | 26.0 | |||||||||||||
Other Operating (Income) Loss: | |||||||||||||||||
Net Gain on Disposal of Assets | (24.8 | ) | (15.5 | ) | (45.0 | ) | (41.4 | ) | |||||||||
Asset Impairment | 377.0 | 154.4 | 1,277.8 | 154.4 | |||||||||||||
Loss from Equity Affiliates: | |||||||||||||||||
Results of Operations (1) | 3.5 | 9.6 | 12.0 | 49.6 | |||||||||||||
Change in Deferred Tax Asset Valuation Allowance | (0.6 | ) | 52.3 | (1.0 | ) | 52.3 | |||||||||||
Amortization of Basis Difference | 0.7 | 1.7 | 4.9 | 5.7 | |||||||||||||
Loss from Equity Affiliates | 3.6 | 63.6 | 15.9 | 107.6 | |||||||||||||
Operating Loss | (470.8 | ) | (207.0 | ) | (1,464.8 | ) | (135.1 | ) | |||||||||
Interest Income | (1.1 | ) | (3.7 | ) | (7.7 | ) | (15.4 | ) | |||||||||
Interest Expense: | |||||||||||||||||
Interest Expense | 121.4 | 103.7 | 465.0 | 414.0 | |||||||||||||
Interest Charges Related to Litigation | — | 1.5 | 0.4 | 12.6 | |||||||||||||
Loss on Debt Extinguishment | — | — | 67.8 | 1.6 | |||||||||||||
Interest Expense | 121.4 | 105.2 | 533.2 | 428.2 | |||||||||||||
Loss from Continuing Operations Before Income Taxes | (591.1 | ) | (308.5 | ) | (1,990.3 | ) | (547.9 | ) | |||||||||
Income Tax (Benefit) Provision: | |||||||||||||||||
(Benefit) Provision | (44.4 | ) | 169.1 | (59.2 | ) | 203.9 | |||||||||||
Tax Benefit Related to Asset Impairment | (7.9 | ) | — | (75.3 | ) | — | |||||||||||
Remeasurement Expense (Benefit) Related to Foreign Income Tax Accounts | 0.5 | 1.2 | (0.5 | ) | (2.7 | ) | |||||||||||
Income Tax (Benefit) Provision | (51.8 | ) | 170.3 | (135.0 | ) | 201.2 | |||||||||||
Loss from Continuing Operations, Net of Income Taxes | (539.3 | ) | (478.8 | ) | (1,855.3 | ) | (749.1 | ) | |||||||||
Income (Loss) from Discontinued Operations, Net of Income Taxes | 20.5 | (34.2 | ) | (182.2 | ) | (28.2 | ) | ||||||||||
Net Loss | (518.8 | ) | (513.0 | ) | (2,037.5 | ) | (777.3 | ) | |||||||||
Less: Net (Loss) Income Attributable to Noncontrolling Interests | (0.8 | ) | 1.6 | 7.1 | 9.7 | ||||||||||||
Net Loss Attributable to Common Stockholders | $ | (518.0 | ) | $ | (514.6 | ) | $ | (2,044.6 | ) | $ | (787.0 | ) | |||||
Adjusted EBITDA | $ | 53.0 | $ | 207.7 | $ | 434.6 | $ | 814.0 | |||||||||
Diluted EPS - Loss from Continuing Operations (2)(3) | $ | (29.55 | ) | $ | (26.88 | ) | $ | (102.62 | ) | $ | (42.52 | ) | |||||
Diluted EPS - Net Loss Attributable to Common Stockholders (2) | $ | (28.43 | ) | $ | (28.79 | ) | $ | (112.66 | ) | $ | (44.09 | ) | |||||
Adjusted Diluted EPS (2) | $ | (9.27 | ) | $ | (18.18 | ) | $ | (36.39 | ) | $ | (34.03 | ) | |||||
(1) | Excludes items shown separately. | ||||||||||||||||
(2) | Weighted average diluted shares outstanding were 18.2 million and 17.9 million for the quarters ended Dec. 31, 2015 and 2014, respectively, and 18.1 million and 17.9 million for the years ended Dec. 31, 2015 and 2014, respectively,as retroactively restated to reflect the company's 1-for-15 reverse stock split that became effective on Oct. 1, 2015. | ||||||||||||||||
(3) | Reflects loss from continuing operations, net of income taxes less net (loss) 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 Years Ended Dec. 31, 2015 and 2014 | ||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||
Dec. | Dec. | Dec. | Dec. | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenue Summary (In Millions) | ||||||||||||||||||
U.S. Mining Operations | $ | 840.4 | $ | 983.6 | $ | 3,529.4 | $ | 4,023.8 | ||||||||||
Australian Mining Operations | 465.6 | 676.3 | 2,005.4 | 2,671.8 | ||||||||||||||
Trading and Brokerage Operations | 0.1 | 12.1 | 42.8 | 58.4 | ||||||||||||||
Other | 7.0 | 12.5 | 31.6 | 38.2 | ||||||||||||||
Total | $ | 1,313.1 | $ | 1,684.5 | $ | 5,609.2 | $ | 6,792.2 | ||||||||||
Tons Sold (In Millions) | ||||||||||||||||||
Powder River Basin Mining Operations | 35.7 | 37.3 | 138.8 | 142.6 | ||||||||||||||
Midwestern U.S. Mining Operations | 4.6 | 6.1 | 21.2 | 25.0 | ||||||||||||||
Western U.S. Mining Operations | 4.2 | 5.8 | 17.9 | 23.8 | ||||||||||||||
Australian Metallurgical Mining Operations | 4.0 | 4.8 | 15.7 | 17.2 | ||||||||||||||
Australian Thermal Mining Operations | 5.1 | 5.5 | 20.1 | 21.0 | ||||||||||||||
Trading and Brokerage Operations | 4.3 | 4.8 | 15.1 | 20.2 | ||||||||||||||
Total | 57.9 | 64.3 | 228.8 | 249.8 | ||||||||||||||
Revenues per Ton - Mining Operations | ||||||||||||||||||
Powder River Basin (1) | $ | 13.23 | $ | 13.02 | $ | 13.45 | $ | 13.49 | ||||||||||
Midwestern U.S. (2) | 45.59 | 45.99 | 46.18 | 47.99 | ||||||||||||||
Western U.S. | 37.30 | 37.86 | 38.09 | 37.90 | ||||||||||||||
Total - U.S. (1)(2) | 18.87 | 20.02 | 19.84 | 21.03 | ||||||||||||||
Australian Metallurgical | 64.63 | 87.97 | 75.04 | 93.81 | ||||||||||||||
Australian Thermal | 40.71 | 46.39 | 41.00 | 50.46 | ||||||||||||||
Total - Australia | 51.18 | 65.97 | 55.96 | 69.99 | ||||||||||||||
Operating Costs per Ton - Mining Operations (3) | ||||||||||||||||||
Powder River Basin (1) | $ | 9.64 | $ | 9.62 | $ | 9.97 | $ | 9.92 | ||||||||||
Midwestern U.S. | 34.64 | 34.31 | 33.49 | 35.70 | ||||||||||||||
Western U.S. | 28.43 | 28.08 | 27.78 | 26.69 | ||||||||||||||
Total - U.S. (1) | 14.01 | 14.84 | 14.57 | 15.37 | ||||||||||||||
Australian Metallurgical | 68.65 | 84.33 | 76.20 | 102.60 | ||||||||||||||
Australian Thermal | 32.95 | 35.40 | 31.36 | 37.87 | ||||||||||||||
Total - Australia | 48.58 | 58.44 | 51.07 | 67.03 | ||||||||||||||
Gross Margin per Ton - Mining Operations (3) | ||||||||||||||||||
Powder River Basin (1) | $ | 3.59 | $ | 3.40 | $ | 3.48 | $ | 3.57 | ||||||||||
Midwestern U.S. (2) | 10.95 | 11.68 | 12.69 | 12.29 | ||||||||||||||
Western U.S. | 8.87 | 9.78 | 10.31 | 11.21 | ||||||||||||||
Total - U.S. (1)(2) | 4.86 | 5.18 | 5.27 | 5.66 | ||||||||||||||
Australian Metallurgical | (4.02 | ) | 3.64 | (1.16 | ) | (8.79 | ) | |||||||||||
Australian Thermal | 7.76 | 10.99 | 9.64 | 12.59 | ||||||||||||||
Total - Australia | 2.60 | 7.53 | 4.89 | 2.96 | ||||||||||||||
Other Supplemental Financial Data (In Millions) | ||||||||||||||||||
Adjusted EBITDA - U.S. Mining | $ | 216.2 | $ | 254.3 | $ | 937.2 | $ | 1,082.8 | ||||||||||
Adjusted EBITDA - Australian Mining | 23.7 | 77.3 | 175.4 | 113.0 | ||||||||||||||
Adjusted EBITDA - Trading and Brokerage | (3.4 | ) | 7.2 | 27.0 | 14.9 | |||||||||||||
Adjusted EBITDA - Resource Management (4) | 14.9 | 16.2 | 32.2 | 30.9 | ||||||||||||||
Corporate Hedging Results | (110.2 | ) | (42.4 | ) | (436.8 | ) | (49.6 | ) | ||||||||||
Selling and Administrative Expenses | (47.6 | ) | (55.5 | ) | (176.4 | ) | (227.1 | ) | ||||||||||
Restructuring and Pension Charges | (0.5 | ) | (26.0 | ) | (23.5 | ) | (26.0 | ) | ||||||||||
Other Operating Costs, Net (5) | (40.1 | ) | (23.4 | ) | (100.5 | ) | (124.9 | ) | ||||||||||
Adjusted EBITDA | 53.0 | 207.7 | 434.6 | 814.0 | ||||||||||||||
Operating Cash Flows | 76.2 | 86.5 | (14.4 | ) | 336.6 | |||||||||||||
Acquisitions of Property, Plant and Equipment | 49.9 | 86.9 | 126.8 | 194.4 | ||||||||||||||
Coal Reserve Lease Expenditures | 187.4 | 187.3 | 277.2 | 276.7 | ||||||||||||||
(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 $0.23, $0.04, and $0.19, respectively, for the year ended Dec. 31, 2014. The impact on Total - U.S. revenues per ton, operating costs per ton, and gross margin per ton was $0.18, $0.04, and $0.14, respectively, for that period. | |||||||||||||||||
(2) | The finalization of pricing under a customer sales agreement resulted in lower Midwestern U.S. revenues per ton and gross margin per ton of $1.56 for the quarter ended Dec. 31, 2014. The impact on Total - U.S. revenues per ton and gross margin per ton was $0.19 for that period. | |||||||||||||||||
(3) | Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring and pension settlement charges; asset impairment; and certain other costs related to post-mining activities. | |||||||||||||||||
(4) | Includes certain asset sales, property management costs and revenues, and coal royalty expense. | |||||||||||||||||
(5) | Includes loss from equity affiliates (before the impact of related changes in deferred tax asset valuation allowance and amortization of basis difference), costs associated with post-mining activities, and minimum charges on certain transportation-related contracts. | |||||||||||||||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. |
Condensed Consolidated Balance Sheets | ![]() | |||||||
As of Dec. 31, 2015 and 2014 | ||||||||
(In Millions) | ||||||||
(Unaudited) | ||||||||
Dec. 31, 2015 | Dec. 31, 2014 | |||||||
Cash and Cash Equivalents | $ | 261.3 | $ | 298.0 | ||||
Accounts Receivable, Net | 221.3 | 563.1 | ||||||
Inventories | 307.8 | 406.5 | ||||||
Deferred Income Taxes | 53.5 | 80.0 | ||||||
Other Current Assets | 402.1 | 363.4 | ||||||
Total Current Assets | 1,246.0 | 1,711.0 | ||||||
Property, Plant, Equipment and Mine Development, Net | 9,258.5 | 10,577.3 | ||||||
Deferred Income Taxes | 2.2 | 0.7 | ||||||
Investments and Other Assets | 466.0 | 902.1 | ||||||
Total Assets | $ | 10,972.7 | $ | 13,191.1 | ||||
Current Portion of Long-Term Debt | $ | 23.0 | $ | 21.2 | ||||
Accounts Payable and Accrued Expenses | 1,446.3 | 1,809.2 | ||||||
Other Current Liabilities | 15.6 | 32.7 | ||||||
Total Current Liabilities | 1,484.9 | 1,863.1 | ||||||
Long-Term Debt, Less Current Portion | 6,292.6 | 5,965.6 | ||||||
Deferred Income Taxes | 69.1 | 89.1 | ||||||
Other Noncurrent Liabilities | 2,256.2 | 2,546.8 | ||||||
Total Liabilities | 10,102.8 | 10,464.6 | ||||||
Stockholders' Equity | 869.9 | 2,726.5 | ||||||
Total Liabilities and Stockholders' Equity | $ | 10,972.7 | $ | 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 Years Ended Dec. 31, 2015 and 2014 | |||||||||||||||||
(In Millions, Except Per Share Data) | Quarter Ended | Year Ended | |||||||||||||||
Dec. | Dec. | Dec. | Dec. | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Adjusted EBITDA | $ | 53.0 | $ | 207.7 | $ | 434.6 | $ | 814.0 | |||||||||
Depreciation, Depletion and Amortization | 141.6 | 171.8 | 572.2 | 655.7 | |||||||||||||
Asset Retirement Obligation Expenses | 5.1 | 34.5 | 45.5 | 81.0 | |||||||||||||
Change in Deferred Tax Asset Valuation Allowance Related to Equity Affiliates | (0.6 | ) | 52.3 | (1.0 | ) | 52.3 | |||||||||||
Amortization of Basis Difference Related to Equity Affiliates | 0.7 | 1.7 | 4.9 | 5.7 | |||||||||||||
Interest Income | (1.1 | ) | (3.7 | ) | (7.7 | ) | (15.4 | ) | |||||||||
Interest Expense | 121.4 | 105.2 | 533.2 | 428.2 | |||||||||||||
Income Tax (Benefit) Provision, Excluding Tax Items Shown Separately Below | (44.4 | ) | 169.1 | (59.2 | ) | 203.9 | |||||||||||
Adjusted Loss from Continuing Operations (1) | (169.7 | ) | (323.2 | ) | (653.3 | ) | (597.4 | ) | |||||||||
Asset Impairment | 377.0 | 154.4 | 1,277.8 | 154.4 | |||||||||||||
Tax Benefit Related to Asset Impairment | (7.9 | ) | — | (75.3 | ) | — | |||||||||||
Remeasurement Expense (Benefit) Related to Foreign Income Tax Accounts | 0.5 | 1.2 | (0.5 | ) | (2.7 | ) | |||||||||||
Loss from Continuing Operations, Net of Income Taxes | $ | (539.3 | ) | $ | (478.8 | ) | $ | (1,855.3 | ) | $ | (749.1 | ) | |||||
Net (Loss) Income Attributable to Noncontrolling Interests | $ | (0.8 | ) | $ | 1.6 | $ | 7.1 | $ | 9.7 | ||||||||
Diluted EPS - Loss from Continuing Operations (2) | $ | (29.55 | ) | $ | (26.88 | ) | $ | (102.62 | ) | $ | (42.52 | ) | |||||
Asset Impairment, Net of Income Taxes | 20.25 | 8.62 | 66.26 | 8.63 | |||||||||||||
Remeasurement Expense (Benefit) Related to Foreign Income Tax Accounts | 0.03 | 0.08 | (0.03 | ) | (0.14 | ) | |||||||||||
Adjusted Diluted EPS | $ | (9.27 | ) | $ | (18.18 | ) | $ | (36.39 | ) | $ | (34.03 | ) | |||||
(1) | In order to arrive at the numerator used to calculate Adjusted Diluted EPS, it is necessary to deduct net (loss) income attributable to noncontrolling interests from this amount. | ||||||||||||||||
(2) | Reflects loss from continuing operations, net of income taxes, less net (loss) income attributable to noncontrolling interests. | ||||||||||||||||
This information is intended to be reviewed in conjunction with the company's filings with the SEC. |
Supplemental Hedging Data | |||||||||
As of January 31, 2016 | |||||||||
Australian Dollar Hedging | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | FY 2017 | ||||
Percent Hedged - as of 1/31/16 | 60% | 58% | 41% | 36% | 26% | ||||
Hedge Rate | $0.95 | $0.91 | $0.90 | $0.91 | $0.88 | ||||
All-in Rate | $0.85 | $0.83 | $0.79 | $0.78 | $0.74 | ||||
Fuel Derivatives Hedging | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | FY 2017 | ||||
Percent Hedged - as of 1/31/16 | 70% | 62% | 67% | 74% | 45% | ||||
Hedge Price (per gallon equivalent) | $2.48 | $2.61 | $2.41 | $2.38 | $2.35 | ||||
All-in Price (per gallon equivalent) | $2.02 | $2.00 | $1.97 | $2.06 | $1.73 | ||||
Cost Sensitivity | |||||||||
Unhedged AUD position sensitivity to $0.05 move | $10 | $10 | $15 | $16 | $74 | ||||
Unhedged Fuel position sensitivity to $0.25/gal move | $2 | $3 | $3 | $2 | $18 | ||||
Note: Hedge percentages only include economic hedges expected to be realized in each respective period presented. Estimated hedge percentages and cost sensitivities based on 2016 projected requirements of ~$2.0 billion AUD and ~130 million gallons of diesel fuel. Fuel hedge percentages include derivative hedges, such as swaps or options, and exclude Coal Supply Agreement hedges, which are a fuel cost pass-through provision in certain customer contracts. |