Exhibit 99.1
Cowen Energy and Natural Resources Conference December 2017
Statement on Forward-Looking Information This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “targets,” “would,” “will,” “should,” “goal,” “could” or “may” or other similar expressions. Forward-looking statements provide management’s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volume, or other financial items, descriptions of management’s plans or objectives for future operations, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond the company’s control, that are described in our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2016, as amended on July 10, 2017 and Aug. 14, 2017, and in Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 11, 2017, as well as additional factors we may describe from time to time in other filings with the SEC. You may get such filings for free at our website at www.peabodyenergy.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. Adjusted EBITDA is a non-GAAP measure defined as income (loss) from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of the segment’s operating performance as displayed in the reconciliation. Adjusted EBITDA is used by management as one of the primary metrics to measure the Company’s operating performance. Management also believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. 2
Peabody: World’s Largest Private-Sector Coal Company We’re the only Global Pure-Play Coal Investment, and we have significant scale… high-quality assets and people… and diversity in geography and products Our Financial Approach Generate Cash Reduce Debt Invest Wisely Return Cash to Shareholders 3
Peabody: Who We Are; Where We Operate 23 operations 5.6 billion $4.7 billion In U.S. and Australia Tons of Reserves 2016 Revenues ~7,000 25+ countries Employees Served by Peabody Globally Operations Note: Information as of the year ended Dec. 31, 2016, with the exception of headcount which is provided as of Sept. 30, 2017. 4
What We Offer as a Leading Coal Company 2016 Mining Tons Sold (in millions) YTD 2017 Adjusted EBITDA by Mining Segment ($ in millions) U.S. Thermal U.S. Met Asia-Pacific Met Asia-Pacific Thermal 200 180 160 140 120 100 80 60 40 20 0 Peabody Arch Cloud Peak Alliance Whitehaven Foresight LP CNX Coal Australia Thermal $279.3 PRB $289.2 Australia Met $324.6 Western U.S. $129.4 Midwestern U.S. $146.0 Note: Mining tons sold classified by product and production location based on publicly available information. Adjusted EBITDA is a non-GAAP metric. Refer to the reconciliations to the nearest GAAP measures in the appendix. YTD through Sept. 30, 2017. 5
Transformed Peabody Delivering Powerful Results 2017 YOY Improvements ($ in millions) $3,275 $4,062 $1,070 $238 2016 2017 2016 2017 Revenues Adjusted EBITDA Major Recent Progress Sharply increased revenues, margins and Adjusted EBITDA Reduced debt by $300 million Executed $100 million in share buybacks Reduced term loan rate by 1.00% and modified terms to allow for greater shareholder returns Announced sales of non-core assets in Australia Advanced steps to free up restricted cash Secured $270 million revolver Note: Revenues and Adjusted EBITDA for nine months ending Sept. 30, 2017. Adjusted EBITDA is a non-GAAP metric. Refer to the reconciliations to the nearest GAAP measures in the appendix. Share repurchases as of Oct. 20, 2017. 6
Mining Operations Operations at Peabody’s North Antelope Rochelle Mine in Wyoming 7
Peabody Offers Top-Tier International Thermal Business with Substantial Margins Peabody targets 12.5 – 13.0 million tons of export thermal coal sales – Typically realizes 90 – 95% of Newcastle index price Australian Thermal leads company in Adjusted EBITDA margins in Q2 and Q3 Anchored by premier, low-cost Wilpinjong Mine – ~7 million ton domestic contract allows Peabody to access reserves for export volumes Australian Thermal Segment Adjusted EBITDA Margins 40% 35% 30% 25% 20% 15% 10% 5% 0% Average Newcastle Thermal Pricing 38% $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $- 26% 26% 25% 24% 24% 2012 2013 2014 2015 2016 Nine Months 2017 Note: Adjusted EBITDA margin is a non-GAAP metric and is equal to segment Adjusted EBITDA divided by segment revenue. Refer to the reconciliations to the nearest GAAP measures in the appendix. YTD through Sept. 30, 2017. 8
Australian Seaborne Metallurgical Portfolio Represents Marked Improvement; Further Strengthening Platform Peabody targets 11.5 to 12.0 million tons of met coal sales Substantial steps taken to improve platform, including: – Improved efficiencies, lower costs through owner-operator conversions – Aligned and leaner workforce – Enhanced mine planning – Transition of high-cost Burton Mine to care and maintenance Driving further productivity at North Goonyella and Coppabella, mines with largest met reserves Evaluating opportunities to lead to stable metallurgical coal volumes over time Improvement in YTD Australian Metallurgical Adjusted EBITDA Margins 40% 30% 20% 10% 0% -10% -20% -30% -18% YTD 2016 YTD 2017 31% Note: Adjusted EBITDA margin is a non-GAAP metric. Refer to the reconciliations to the nearest GAAP measures in the appendix. Adjusted EBITDA margin is equal to segment Adjusted EBITDA divided by segment revenue. YTD through Sept. 30, 2017. 9
U.S. Mining Segment Represents Significant Scale, Stable Operating Performance Peabody position in PRB anchored by world’s largest coal mine – North Antelope Rochelle Mine – PRB mining complex serves scores of customers in nearly half of states in U.S. Illinois Basin and Western operations benefit from transportation advantages to local customer base Multi-year contracts typical; Essentially all of 2017 U.S. sales volume is priced – ~75% – 80% of 2018 volumes are priced 150 million tons. Peabody’s North Antelope Rochelle Mine Note: Contract information as of the quarter ended Sept. 30, 2017. 2018 priced volumes based on approximately 10
Peabody PRB Strategy Focused on Margin Discipline Operates three of four most productive mines in U.S. Produces from more than dozen pits in PRB – Ability to move people, equipment and contracts – Cost profile can vary up to $6 per ton among pits Unique “dial-a-blend” technology matches products with individual customer specs No capital needed for new reserves for nearly a decade Adjusted EBITDA Margin of PRB Producers (2014 – 1H 2017 Avg.) 30% 25% 20% 15% 10% 5% 0% 25% 21% 16% Peer Avg. 9% BTU Peer A Peer B Peer C Source: Public company reports. Other PRB producers include Cloud Peak, Arch and Alpha Natural Resources/Contura. Adjusted EBITDA margin is a non-GAAP measure and may not be calculated identically by all companies. Please refer to the appendix for information on this non-GAAP measure. Adjusted EBITDA margin is equal to segment Adjusted EBITDA divided by segment revenue. Productivity defined as total production divided by employee hours based on 2016 data. Reserve life based on current production levels. 11
Peabody “DNA” Interwoven from PRB, Midwest and Australian Heritage Midwest: Capital D Cost Con Australia: Continuous Improvement, Global Mining PRB: Large Scale, Innovative Process Technologies Trading and Shared Services: Support, Platform Optimization THE PEABODY WAY 12
Strong Operations Driven by Technology, Spirit of Continuous Improvement Case Study: Dozer Push Dozer Push Used in ILB Leads to Strong Performance Australian Semi-Autonomous Dozer Project in Process Methodology Transferred to Large-Scale Mining in PRB Semi-autonomous technology in use at Peabody’s Wilpinjong Mine, part of the company’s constant focus on reducing costs per yard of earth moved 13
Geographic and Product Diversity Targeted to Deliver Maximum Value for Shareholders Adj. EBITDA Contributions Led by 3 Different Mining Segments in Past 5 Quarters (dollars in millions) U.S. provides solid revenue visibility; Australia offers substantial earnings strength during mid-to-high parts of cycle U.S. assets located in basins most competitive with natural gas; Australia positioned to serve higher- growth Asia-Pacific demand Increased risk-adjusted returns; non-correlative demand drivers Synergies with scalable SG&A, shared services, best practices in mining methods $160 $140 $120 $100 $80 $60 $40 $20 $0 -$20 -$40 -$60 3Q16 4Q16 1Q17 2Q17 3Q17 PRB Midwest West Aus. Met Aus. Thermal Note: Adjusted EBITDA is a non-GAAP metric. Refer to the reconciliations to the nearest GAAP measures in the appendix. 14
Industry Fundamentals Coal railed from Peabody’s El Segundo Mine in New Mexico 15
Strong Near-Term Seaborne Thermal and Metallurgical Coal Demand at Play in 2017 Seaborne Thermal Coal Seaborne Metallurgical Coal Chinese thermal imports up 15 million tonnes through 9 months India demand down ~16 million tonnes through September – Stockpiles reach lowest levels in 2 years in August; supportive of additional imports South Korea imports up 23%, or 15 million tonnes, through September Australian spot pricing remains robust at ~$90 per tonne Full year 2017 demand expected to rise 10 to 15 million tonnes from 2016 levels Global steel production up 5% through nine months Record Chinese steel production supports 9 million tonne increase in imports through September Q3 index-based settlement for hard coking coal at ~$170 per tonne 2017 seaborne demand expected to increase ~10 million tonnes compared with prior year Source: Industry data and Peabody Global Analytics. Data compared to the same nine-month period in 2016. 16
ASEAN Countries Expected to Drive Longer-Term Industry Thermal Coal Demand Growth Some 30 countries on six continents have new coal-fueled generation coming online between 2017 and 2018 – ~65 gigawatts starting up each year – Majority of new plants are supercritical/ultra-supercritical Expected demand growth primarily centered in Southeast Asia, which is best served by Australia and Indonesia – Continued strong import demand expected from China, India, Japan and S. Korea Expected Seaborne Thermal Demand Growth from 2016 – 2019 (tonnes in millions) 20 15 10 5 0 -5 -10 -15 15 – 20 (10 – 15) Pacific Atlantic Source: Industry data and Peabody Global Analytics. 17
Seaborne Metallurgical Coal at Fragile Supply-Demand Balance at ~300 Million Tons Industry-Wide Supply disruptions emerge after long period of benign events Short-term pricing mechanisms bring greater volatility Challenge to make long- term capital decisions with little revenue visibility India expected to lead growth in import demand over next several years Spot HCC Pricing (dollars per tonne) China Increases Import Demand (+12MT) Cyclone Debbie Impacts (10 – 15 MT of supply) $350 $300 $250 $200 $150 $100 $50 $0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Source: Industry data and Peabody Global Analytics. 18
PRB Generation Increases 8% Above 2016 Levels, While Natural Gas Declines 12% PRB demand up 18 million tons through September – PRB stockpiles down 5 days to 55 days of maximum burn Mild 2017 weather in coal-heavy regions impacts demand PRB and ILB competitive against natural gas: – SPRB: $2.50 to $2.75/mmBtu – ILB: $3.00 to $3.50/mmBtu – CAPP: $3.75 to $4.25/mmBtu Fuel Generation Change YTD 2017 Total Coal Generation Demand 10% 5% 0% -5% -10% -15% -20% 8% PRB ILB Natural Gas CAPP -1% -5% 12% -20% Source: Industry reports and Peabody Global Energy Analytics. YTD generation through Sept. 2017 versus the prior year. 19
U.S., Australia Advance Pro-Energy Economy; Recognize Importance of Coal in Energy Mix U.S. EPA proposes repeal of Clean Power Plan Perry study and proposed FERC grid resiliency pricing rule represent first step in examining grid complexity U.S. EPA Administrator declares: “The war against coal is over.” Australia scraps renewable subsidies; requires electricity retailers to guarantee reliability Peabody continues to support high-efficiency, low-emissions technology and advancement of carbon capture, use and storage technologies Previous U.S. Announcements Repeal of “Stream Protection Rule” Office of Natural Resources Revenue proposes to rescind Coal Valuation Rule EPA files notice of intent to review and rescind “Waters of the U.S.” act Review of Clean Power Plan and favorable D.C. circuit ruling Issuance of Energy Independence executive order DOI issues secretarial order ending coal leasing moratorium Source: Industry reports. 20
Financial Approach 21
Strengthening Capital Structure to Allow for Flexibility and Sustainability Through Cycles 131.4 million common shares outstanding (fully converted) 55% preferred shares converted Continuing multi-pronged initiative to further release restricted cash – ~$140 million released since emergence Over $3 billion of U.S. NOLs expected in 2018 Over A$4billion Australian NOL position Debt and Liquidity Balances Unrestricted Cash & Cash Equivalents $925.0 million Available Capacity under ARS $17.7 million Total Liquidity $942.7 million Restricted Cash Collateral $538.1 million Term Loan due 2022 3.50% + LIBOR $645 million 6.000% Sr. Secured Notes due 2022 $500 million 6.375% Sr. Secured Notes due 2025 $500 million Prominent Uses of Unrestricted Cash Outside of Adjusted EBITDA in 2017 Capital Expenditures $165 – $195 million (Full-Year 2017) ($101 million YTD) Interest Expense $37 – $39 million (Q4 2017) Note: Debt and liquidity balances as of Sept. 30, 2017. Common shares outstanding as of Oct. 30, 2017. Fully converted shares exclude ~3.5 million shares underlying unvested equity awards under Peabody’s long-term incentive plan. Preferred shares converted as of Dec. 1, 2017. Restricted cash collateral includes $7.8 million of restricted cash classified as current on the balance sheet. 22
Executing On Our Stated Financial Approach Generate Cash Maintaining cost discipline to enhance margins Capitalizing on buoyant seaborne coal conditions Targeting release of $200 – $400 million of restricted cash through 2018 Reduce Debt Completed $300 million of voluntary debt repayments Targeting additional $200 million of debt reduction by Dec. 2018 Gross debt target of $1.2 – $1.4 billion over time Invest Wisely Entered into agreements to sell non- core assets in Australia Continuing to evaluate opportunities to improve portfolio based on strict criteria Return Cash to Shareholders Executed $100 million, or 20%, of $500 million share repurchase program within 3 months of launch Board to evaluate sustainable dividend targeted for first quarter 2018 23
Peabody A Leading Voice in Advocating for Sustainable Mining, Energy Access and Clean Coal Technologies Investment Principles for Best-in-Class Coal Companies designed to provide distinguishing elements to help investment community make portfolio decisions Operate safely Sustainable Maximize resource recovery Seek ongoing improvement Mining in environmental performance Commit to land restoration Work to achieve universal Energy electricity access; affordability and reliability Access Engagement to address major energy challenges Support for deployment Clean Coal of HELE and CCUS Drive policies to achieve goal Technologies of near-zero emissions for next-generation coal fleet 24
Strong Cash Flows and Smart Cash Use Continue Virtuous Cycle Multiple Actions in Recent Months Reduce Term Loan Interest Rate By 1.00%; Modify Terms Generate Strongest Adjusted EBITDA Since 2012 Closed on $270M Revolving Credit Facility Secondary Offering Diversifies Ownership Debt Repayments total $300M; Launch Credit Facility Amendment Initiative Released ~$25M in Restricted Cash October November Repurchase $40M in Shares September Announce Majority Sale of Inactive Burton Mine Share repurchases total ~$100M through October Outline Capital Allocation Initiatives Enter Into Sale of 50% Interest in Prep Plant Associated with Millennium Mine August Strength Enables more strength Note: Total share repurchases equal ~$100 million through Oct. 20, 2017 (includes $40 million during secondary offering, $29 million in third quarter and $31 million in October). 25
APPENDIX North Antelope Rochelle Mine Loadout Facility 26
Appendix: 2017 Targets Sales Volumes (Short Tons) Capital Expenditures $165 – $195 million PRB 120 – 125 million ILB 18 – 19 million Quarterly SG&A Expense ~$35 million Western 13 – 14 million Total U.S. 151—158 million Quarterly Interest Expense $37 – $39 million Aus. Metallurgical1 11.5 – 12.0 million Q4 2017 Cost Sensitivities4 Aus. Export Thermal2 12.5 – 13.0 million $0.05 Decrease in A$ FX Rate5 + ~$25 – $28 million Aus. Domestic Thermal ~7 million $0.05 Increase in A$ FX Rate5 ~ <$5 million Total Australia 31 – 32 million Fuel (+/- $10/barrel) +/- ~$8 million U.S. Operations—Revenues Per Ton 2017 Priced Position PRB $12.50 – $12.75 PRB Average Price/Ton ~$12.60 ILB $42.00 – $43.00 ILB Average Price/Ton ~$42.65 Total U.S. $18.55 – $18.75 Australia Export Thermal ~11.5 million tons Australia Export Thermal ~$68 U.S. Operations—Costs Per Ton Average Price/Short Ton PRB $9.50 – $9.75 ILB $32.00 – $33.00 2018 Priced Position Total U.S. $13.85 – $14.25 PRB Average Price/Ton $12.27 ILB Average Price/Ton $42.30 Australia Operations—Costs per Ton (USD)3 Australia Export Thermal ~3 million tons Metallurgical $85 – $95 Australia Export Thermal ~$72 Thermal $31 – $35 Average Price/Short Ton Total Australia $51 – $54 Essentially all of Peabody’s expected 2017 U.S. sales volume is priced as of Sept. 30, 2017; ~75% – 80% of 2018 volumes are priced (based on approximately 150 million tons); approximately 35% of 2019 volumes are priced (based on approximately 150 million tons). 27
Appendix: 2017 Targets 1 Metallurgical coal sales volumes may range from ~50%-60% PCI and ~40%-50% coking coal (including semi-hard and semi-soft coking coals). Approximately 55% of seaborne metallurgical sales may be executed on a spot basis, with the remainder priced under quarterly contracts or linked to an index. The company also has exposure to approximately 2 million tons of metallurgical coal related to the Middlemount Mine, a 50/50 joint venture accounted for in (Income) Loss from Equity Affiliates. Peabody’s North Goonyella and Coppabella mines typically receive the PLV HCC index quoted price and set the PLV PCI benchmark, respectively, with the remainder of products sold at discounts to these values based on coal qualities and properties. On a weighted-average basis across all metallurgical products, Peabody typically realizes approximately 85% -90% of the PLV HCC index quoted price for its coking products, and 90%-95% of the premium LV PCI benchmark price for its PCI products. 2 A portion of Peabody’s seaborne thermal coal products sell at or above the Newcastle index, with the remainder sold at discounts relative to the Newcastle index based on coal qualities and properties. On a weighted-average basis across all seaborne thermal products, Peabody typically realizes approximately 90%-95% of the Newcastle index price. 3 Assumes 4Q 2017 average A$ FX rate of $0.79. 4 Sensitivities reflect approximate impacts of changes in variables on financial performance. When realized, actual impacts may differ significantly. 5 As of Sept. 30, 2017, Peabody had purchased average rate call options in aggregate notional amount of approximately AUD $450 million to manage market price volatility associated with the Australian dollar with strike price levels of approximately $0.78 and settlement dates through December 2017. Sensitivities provided are relative to an assumed average A$ FX exchange rate of $0.79 for remainder of 2017. For 2018, Peabody purchased average rate call options in aggregate notional amount of approximately AUD $675 million with strike price levels of approximately $0.85 and settlement dates through June 2018. Note 1: Peabody classifies its Australian Metallurgical or Thermal Mining segments based on the primary customer base and reserve type. A small portion of the coal mined by the Australian Metallurgical Mining segment is of a thermal grade and vice versa. Peabody may market some of its metallurgical coal products as a thermal product from time to time depending on industry conditions. Per ton metrics presented are non-GAAP measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without unreasonable cost or effort. Note 2: A sensitivity to changes in seaborne pricing should consider Peabody’s estimated split of PCI and coking coal products, the ratio of PLV PCI benchmark to PLV HCC index quoted price, the weighted average discounts across all products to the applicable PLV HCC index quoted price or PLV PCI benchmark or Newcastle index prices, in addition to impacts on sales-related costs in Australia, and applicable conversions between short tons and metric tonnes as necessary. Note 3: As of Oct. 30, 2017, Peabody would have approximately 131.4 million shares of common stock outstanding, assuming full conversion of Peabody’s preferred stock (including make-whole shares issuable upon conversion of the preferred stock). The fully converted shares issued value excludes approximately 3.5 million shares underlying unvested equity awards under Peabody’s long-term incentive plan. As of Dec. 1, 2017 holders of approximately 55% of preferred stock issued at emergence had converted their shares into common stock. Post the Oct. 31, 2017, PIK dividend, every 1 million preferred shared converted equals ~$7.5 million of non-cash dividends. 28
Q3 2017 Adjusted EBITDA Margins Average 30% Across Mining Segments Adjusted EBITDA Q3 2017 YTD 2017 Margins per Ton Aus. Thermal 37% 38% Aus. Met 34% 31% PRB 27% 24% Midwestern 24% 25% Western 22% 30% Total 30% 29% Australian thermal leads Adjusted EBITDA margins Met coal volumes increase 75% compared to Q2 2017 – Record volumes at North Goonyella Mine – Rails recover after Cyclone Debbie – Costs decline $31 per ton from Q2 2017 U.S. segments generate 25% margins in Q3 – PRB margins up 12%, even as revenues per ton down 3% Maintaining or lowering cost targets in all segments Note: Adjusted EBITDA margin is a non-GAAP metric and is equal to segment Adjusted EBITDA divided by segment revenue. Refer to the reconciliation to the nearest non-GAAP measures in the appendix. All comparisons are to second quarter 2017 unless otherwise noted. 29
Peabody Mission, Values and Strategy Our Mission To create superior value for our shareholders as the leading global supplier of coal, which enables economic prosperity and a better quality of life. Our Values Safety: We commit to safety and Customer Focus: We provide Leadership: We have the courage People: We offer an inclusive health as a way of life. customers with quality products to lead, and do so through work environment and and excellent service. inspiration, innovation, engage, recognize and Excellence: We are accountable collaboration and execution. develop employees. for our own success. We operate cost-competitive mines by Integrity: We act in an honest Sustainability: We take applying continuous improvement and ethical manner. responsibility for the environment, and technology-driven solutions. benefit our communities and restore the land for generations that follow. Our Strategy Leading position in U.S. PRB and ILB basins Australian metallurgical and thermal coal platform to capture higher growth Asian markets Operational Excellence: Drive safety, productivity, cost efficiency and reclamation performance. Financial Strength: Achieve and maintain target capital structure that enables sustainable performance through all market cycles and deploy disciplined capital allocation to maximize shareholder returns. Strategic Portfolio Management: Continually enhance the value of our portfolio; high- quality assets in the right markets. Advance Coal Mining and Use: Protect our license to operate, advocate favorable energy policy and advances in generation technology including HELE and CCUS. People: Employ the best people in the industry and align their talents to maximize their full potential. 30
Holistic View of Debt and Other Obligations Sustainable capital structure – Focus on leverage and other long-term liabilities balanced with returning cash to shareholders over time Staggered debt maturities at 5 and 8 years B+ and B1 corporate ratings from S&P and Moody’s, respectively Manageable post-retirement benefits Future annual post-retirement health care payments expected to be ~$55 to $60 million Pension plan ~80% funded Final reclamation costs accounted for through ARO liability Majority of reclamation occurs throughout mining process Annual final reclamation payments expected to be ~$25 to $35 million Total Debt ~$1.7 B; Net Debt of ~$0.8 B Market Capitalization $ 4 billion 6.000% Senior Secured Notes $ 500 million due 2022 6.375% Senior Secured Notes $ 500 million due 2025 Term Loan due 2022 (3.5% +L) $ 645 million Other net debt $ 14 million Unrestricted Cash (9/30/17) $ 925 million Other Liabilities YE 2016 FY 2016 FY 2016 Million $ Liability Expense Cash Postretirement $ 812.1 $ 56.1 $48.4 Health Care Pension $ 186.3 $ 23.7 $1.1 Consolidated $ 758.8 $ 41.8 $28.7 ARO Note: Market capitalization based on 133.7 million fully converted common shares outstanding and common share price of $29.96 on Oct. 20, 2017. Term Loan interest rate of 3.50% plus LIBOR, with a LIBOR floor of 1.00%. Other net debt includes $84 million of capital leases and other obligations , net of approximately $70 million in debt issuance costs. 31
Peabody at a Glance: Pre and Post Emergence Challenges Pre-Filing Post-Filing High debt levels Attempted multiple debt exchanges Reduced debt by $5.2 billion to $1.97 billion (as of emergence) Self bonding agreements in Wyoming, Reduced U.S. bonding requirements New Mexico, Indiana and Illinois with by ~$450 million from 2015 through Uncertainty around coal compliance discretion by the states restoration, bond release and review mine reclamation bonding Surety bonds supporting coal mine reclamation of bonding calculations 100% third-party bonding facilities at reasonable collateral requirements SG&A reduced to lowest levels in a decade; Completed final LBA payment Fixed charges includes headcount reductions and office No new LBAs needed for nearly a decade closures Significant losses from pricing declines Pursuing additional cost reductions Excluded from U.S. Chapter 11 protection Burton placed on care and maintenance Australia platform Entered into $250 million intercompany facility Strengthening Australian met coal to protect the business platform Legacy currency and Up to ~$100 million in losses per quarter Settled as part of Chapter 11 No new currency hedging since 2014 New options-based approach to mitigate fuel hedging material risks Renegotiation and restructuring of various Contracts supplier contracts and leases to achieve more favorable terms Amended VEBA agreement with UMWA Settled MEPP claim for $75 million to improve cash flows by $70 million Gold Fields liabilities funded with trust Patriot MEPP claim totals $642 million Negotiated reduction in port access Legacy liabilities Gold Fields/Blue Tee liabilities from Hanson Modified non-qualified pension and spinoff 401(k) plans Kinder Morgan take-or-pay agreement 32
Appendix: Reconciliation of Non-GAAP Measures 2017 2016 2017 2016 Successor Predecessor Successor Predecessor Predecessor Quarter Ended April 2 through January 1 through Nine Months Ended September 30 September 30 April 1 September 30 (In Millions) Tons Sold Powder River Basin Mining Operations 33.7 33.0 62.2 31.0 80.0 Midwestern U.S. Mining Operations 4.9 4.9 9.5 4.5 13.8 Western U.S. Mining Operations 4.0 4.3 7.2 3.4 10.0 Total U.S. Mining Operations 42.6 42.2 78.9 38.9 103.8 Australian Metallurgical Mining Operations 3.5 3.2 5.5 2.2 10.1 Australian Thermal Mining Operations 5.2 5.4 9.8 4.6 15.8 Total Australian Mining Operations 8.7 8.6 15.3 6.8 25.9 Trading and Brokerage Operations 0.7 2.0 1.4 0.4 5.4 Total 52.0 52.8 95.6 46.1 135.1 Revenue Summary Powder River Basin Mining Operations $ 420.9 $ 419.6 $ 786.3 $ 394.3 $ 1,062.2 Midwestern U.S. Mining Operations 207.7 211.0 402.6 193.2 599.6 Western U.S. Mining Operations 155.7 162.4 281.1 149.7 387.0 Total U.S. Mining Operations 784.3 793.0 1,470.0 737.2 2,048.8 Australian Metallurgical Mining Operations 415.9 232.5 703.7 328.9 682.8 Australian Thermal Mining Operations 265.8 197.9 505.0 224.8 561.4 Total Australian Mining Operations 681.7 430.4 1,208.7 553.7 1,244.2 Trading and Brokerage Operations 19.4 2.7 24.6 15.0 16.5 Other (8.2) (19.0) 32.2 20.3 (35.0) Total $ 1,477.2 $ 1,207.1 $ 2,735.5 $ 1,326.2 $ 3,274.5 33
Appendix: Reconciliation of Non-GAAP Measures 2017 2016 2017 2016 Successor Predecessor Successor Predecessor Predecessor Quarter Ended April 2 through January 1 through Nine Months Ended September 30 September 30 April 1 September 30 (In Millions) Reconciliation of Non-GAAP Financial Measures Income (Loss) from Continuing Operations, Net of Income Taxes $ 233.7 $ (97.7) $ 335.1 $ (195.5) $ (488.6) Depreciation, Depletion and Amortization 194.5 117.8 342.8 119.9 345.5 Asset Retirement Obligation Expenses 11.3 12.7 22.3 14.6 37.3 Selling and Administrative Expenses Related to Debt Restructuring — — — — 21.5 Change in Deferred Tax Asset Valuation Allowance Related to Equity Affiliates (3.4) (0.6) (7.7) (5.2) (0.6) Asset Impairment — — — 30.5 17.2 Interest Expense 42.4 58.5 83.8 32.9 243.7 Loss on Early Debt Extinguishment 12.9 — 12.9 — —Interest Income (2.0) (1.3) (3.5) (2.7) (4.0) Reorganization Items, Net — 29.7 — 627.2 125.1 Break Fees Related to Terminated Asset Sales — — (28.0) — —Unrealized Losses (Gains) on Economic Hedges 10.8 21.9 1.4 (16.6) 49.1 Unrealized Losses (Gains) on Non-Coal Trading Derivative Contracts 1.7 — (1.5) — —Coal Inventory Revaluation — — 67.3 — —Take-or-Pay Contract-Based Intangible Recognition (6.5) — (16.4) — —Income Tax Benefit (84.1) (10.8) (79.4) (263.8) (108.2) Adjusted EBITDA (1) $ 411.3 $ 130.2 $ 729.1 $ 341.3 $ 238.0 Adjusted EBITDA (1) Powder River Basin Mining Operations $ 112.7 $ 123.9 $ 197.5 $ 91.7 $ 278.3 Midwestern U.S. Mining Operations 49.5 59.1 96.0 50.0 172.4 Western U.S. Mining Operations 34.5 34.3 79.4 50.0 83.2 Total U.S. Mining Operations 196.7 217.3 372.9 191.7 533.9 Australian Metallurgical Mining Operations 143.1 (34.5) 215.0 109.6 (121.0) Australian Thermal Mining Operations 97.8 48.9 203.7 75.6 137.2 Total Australian Mining Operations 240.9 14.4 418.7 185.2 16.2 Trading and Brokerage Operations 2.7 (9.4) (2.4) 8.8 (41.3) Selling and Administrative Expenses (Excluding Debt Restructuring) (33.4) (32.1) (67.8) (37.2) (93.1) Other Operating Costs, Net (1.8) (12.3) 1.9 20.4 (32.5) Restructuring Charges (1.1) (0.3) (1.1) — (15.5) Gain on UMWA VEBA Settlement — — — — 68.1 Corporate Hedging Results 7.3 (47.4) 6.9 (27.6) (197.8) Adjusted EBITDA (1) $ 411.3 $ 130.2 $ 729.1 $ 341.3 $ 238.0 (1) Adjusted EBITDA is a non-GAAP measure defined as income (loss) from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance as displayed in the reconciliation. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. 34
Appendix: Reconciliation of Non-GAAP Measures Predecessor Year Ended December 31, 2016 2015 2014 2013 2012 Tons Sold (In Millions) Powder River Basin Mining Operations 113.1 138.8 142.6 135.2 140.3 Midwestern U.S. Mining Operations 18.3 21.2 25.0 26.3 27.4 Western U.S. Mining Operations 13.7 17.9 23.8 23.6 24.9 Total U.S. Mining Operations 145.1 177.9 191.4 185.1 192.6 Australian Metallurgical Mining Operations 13.4 15.7 17.2 15.0 14.0 Australian Thermal Mining Operations 21.3 20.1 21.0 19.9 19.0 Total Australian Mining Operations 34.7 35.8 38.2 34.9 33.0 Trading and Brokerage Operations 7.0 15.1 20.2 31.7 22.9 Total 186.8 228.8 249.8 251.7 248.5 Revenues (In Millions) Powder River Basin Mining Operations $1,473.3 $ 1,865.9 $ 1,922.9 $1,767.3 $1,983.0 Midwestern U.S. Mining Operations 792.5 981.2 1,198.1 1,335.5 1,403.7 Western U.S. Mining Operations 526.0 682.3 902.8 902.3 966.3 Total U.S. Mining Operations 2,791.8 3,529.4 4,023.8 4,005.1 4,353.0 Australian Metallurgical Mining Operations 1,090.4 1,181.9 1,613.8 1,773.4 2,187.5 Australian Thermal Mining Operations 824.9 823.5 1,058.0 1,131.2 1,316.1 Total Australian Mining Operations 1,915.3 2,005.4 2,671.8 2,904.6 3,503.6 Trading and Brokerage Operations 28.9 52.6 38.8 68.7 200.9 Other (20.7) 21.8 57.8 35.3 20.0 Total $4,715.3 $ 5,609.2 $ 6,792.2 $7,013.7 $8,077.5 Reconciliation of Non-GAAP Financial Measures Loss from continuing operations, net of income taxes $ (663.8) $ (1,783.2) $ (695.3) $ (537.3) $ (470.9) Depreciation, depletion and amortization 465.4 572.2 655.7 740.3 663.4 Asset retirement obligation expenses 41.8 45.5 81.0 66.5 67.0 Asset impairment and mine closure costs 247.9 1,277.8 154.4 528.3 929.0 Selling and administrative expenses related to debt restructuring 21.5 — ———Settlement charges related to the Patriot bankruptcy reorganization —— — 30.6 —Change in deferred tax asset valuation allowance related to equity affiliates (7.5) (1.0) 52.3 ——Amortization of basis difference related to equity affiliates — 4.9 5.7 6.3 4.6 Interest income (5.7) (7.7) (15.4) (15.7) (24.5) Interest expense 298.6 465.4 426.6 408.3 402.3 Loss on early debt extinguishment 29.5 67.8 1.6 16.9 3.3 Reorganization items, net 159.0 — ———Unrealized (gains) losses on economic hedges 39.8 9.8 (19.6) 2.7 1.0 Income tax (benefit) provision (94.5) (207.1) 147.4 (197.0) 262.3 Adjusted EBITDA (1) $ 532.0 $ 444.4 $ 794.4 $1,049.9 $1,837.5 Adjusted EBITDA (1) (In Millions) Powder River Basin Mining Operations $ 379.9 $ 482.9 $ 509.0 $ 435.4 $ 542.0 Midwestern U.S. Mining Operations 217.3 269.7 306.9 426.0 405.6 Western U.S. Mining Operations 101.6 184.6 266.9 258.0 279.7 Total U.S. Mining Operations 698.8 937.2 1,082.8 1,119.4 1,227.3 Australian Metallurgical Mining Operations (16.3) (18.2) (151.1) (120.0) 238.4 Australian Thermal Mining Operations 217.6 193.6 264.1 270.0 337.7 Total Australian Mining Operations 201.3 175.4 113.0 150.0 576.1 Trading and Brokerage Operations (32.4) 36.8 (4.7) (17.2) 120.7 Other (335.7) (705.0) (396.7) (202.3) (86.6) Adjusted EBITDA (1) $ 532.0 $ 444.4 $ 794.4 $1,049.9 $1,837.5 (1) Adjusted EBITDA is a non-GAAP measure defined as income (loss) from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of the segment’s operating performance as displayed in the reconciliation. Adjusted EBITDA is used by management as one of the primary metrics to measure the Company’s operating performance. Management also believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. 35