[Q2 2025 Financial and Operational Overview](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Peabody reported a net loss of $27.6 million and Adjusted EBITDA of $93.3 million in Q2 2025, a significant decline from the prior year due to lower seaborne coal prices Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net (Loss) Income Attributable to Common Stockholders (millions) | $(27.6) | $199.4 | Decreased | | Diluted EPS | $(0.23) | $1.42 | Decreased | | Adjusted EBITDA (millions) | $93.3 | $309.7 | Decreased | - The company declared a dividend of **$0.075 per share** on common stock on July 31, 2025[4](index=4&type=chunk) - The prior year's Q2 results included an **$80.8 million insurance recovery** and benefited from significantly higher seaborne metallurgical (**32% higher**) and thermal (**35% higher**) coal prices[1](index=1&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Peabody achieved strong cost control in seaborne segments and improved PRB margins, with Centurion Mine development ahead of schedule and anticipated royalty reductions - The Centurion Mine in Australia is ahead of schedule, allowing the company to accelerate the planned start of longwall production to **February 2026**[4](index=4&type=chunk) - Strong U.S. thermal demand drove better-than-expected performance and substantial margin improvements in the **Powder River Basin (PRB)** segment[4](index=4&type=chunk) - Seaborne Metallurgical and Seaborne Thermal segments achieved costs **below company targets** for the second quarter[4](index=4&type=chunk) - The company expects to benefit by **$15 to $20 million** in H2 2025 from royalty reductions under the new "One Big Beautiful Bill Act," which is also expected to improve the competitiveness of PRB coal[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Seaborne Thermal](index=2&type=section&id=Seaborne%20Thermal) The Seaborne Thermal segment generated **$33.5 million** in Adjusted EBITDA in Q2 2025, with lower volumes due to disruptions partially offset by cost controls, leading to updated full-year guidance Seaborne Thermal Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 3.6 | 4.1 | | Revenue per Ton | $53.22 | $74.43 | | Costs per Ton | $44.10 | $49.14 | | Adjusted EBITDA Margin per Ton | $9.12 | $25.29 | | Adjusted EBITDA (millions) | $33.5 | $104.4 | - Full-year volume guidance was increased by **200,000 tons**, and full-year cost guidance was reduced by **$3 per ton** due to strong July shipments[5](index=5&type=chunk) [Seaborne Metallurgical](index=2&type=section&id=Seaborne%20Metallurgical) The Seaborne Metallurgical segment reported an Adjusted EBITDA loss of **$9.2 million** in Q2 2025 due to challenging pricing, but achieved increased volumes and lower costs, leading to reduced full-year cost guidance Seaborne Metallurgical Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 2.2 | 2.0 | | Revenue per Ton | $114.79 | $149.29 | | Costs per Ton | $118.97 | $117.47 | | Adjusted EBITDA Margin per Ton | $(4.18) | $31.82 | | Adjusted EBITDA (millions) | $(9.2) | $143.6* | - *Q2 2024 Adjusted EBITDA included an **$80.8 million insurance recovery**[6](index=6&type=chunk) - Due to strong first-half cost performance, full-year cost guidance is being lowered by **$7 per ton** to approximately **$118 per ton**[6](index=6&type=chunk) [Powder River Basin (PRB)](index=3&type=section&id=Powder%20River%20Basin%20(PRB)) The Powder River Basin segment delivered strong Q2 2025 results with **$43.0 million** in Adjusted EBITDA, exceeding shipment expectations and lowering per-ton costs, leading to increased full-year volume guidance Powder River Basin Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 20.0 | 15.8 | | Revenue per Ton | $13.82 | $14.02 | | Costs per Ton | $11.66 | $12.89 | | Adjusted EBITDA Margin per Ton | $2.16 | $1.13 | | Adjusted EBITDA (millions) | $43.0 | $17.8 | - Based on increased contract volumes, full-year volume guidance is raised by **5 million tons**, and cost targets are lowered by **$0.63 per ton**[7](index=7&type=chunk) [Other U.S. Thermal](index=3&type=section&id=Other%20U.S.%20Thermal) The Other U.S. Thermal segment reported **$13.5 million** in Adjusted EBITDA for Q2 2025, with lower volumes due to operational issues, but anticipates improvement after an August longwall move, maintaining full-year guidance Other U.S. Thermal Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 2.9 | 3.7 | | Revenue per Ton | $54.08 | $55.21 | | Costs per Ton | $49.39 | $45.53 | | Adjusted EBITDA Margin per Ton | $4.69 | $9.68 | | Adjusted EBITDA (millions) | $13.5 | $35.4 | - Performance is expected to improve at Twentymile after an August longwall move to a new panel, with the company maintaining full-year volume and cost guidance for this segment[8](index=8&type=chunk) [Financial Position and Corporate Updates](index=3&type=section&id=Financial%20Position%20and%20Corporate%20Updates) [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Peabody maintained a strong financial position with total liquidity approaching **$1 billion**, demonstrating operational resilience and a stable cash position despite investments and shareholder returns Liquidity Position as of June 30, 2025 | Item | Amount (in millions) | | :--- | :--- | | Cash | $585.9 | | Long-Term Debt | $343.8 | | Total Liquidity | Approaching $1,000 | - The company's cash position remained largely unchanged from the prior quarter after accounting for investments in Centurion, shareholder returns, and other working capital items[10](index=10&type=chunk) [Centurion Mine Project Update](index=3&type=section&id=Centurion%20Mine%20Project%20Update) The Centurion Mine development is progressing rapidly and is ahead of schedule, with longwall operations now anticipated to start in **February 2026**, remaining on budget with significant hiring progress - The start of longwall operations is now anticipated in **February 2026**, earlier than previously guided[11](index=11&type=chunk) - The mine has hired **260 of its planned 400 employees** and intends to start installing longwall shields in November[11](index=11&type=chunk) [Moranbah North Acquisition Update](index=3&type=section&id=Moranbah%20North%20Acquisition%20Update) Peabody asserts a Material Adverse Change (MAC) regarding the Moranbah North Mine acquisition due to an ignition incident and lack of production timetable, with an update expected after the **August 19th** cure period expiration - Peabody asserts that a **Material Adverse Change (MAC)** has occurred under the purchase agreements for the Moranbah North Mine due to an ignition incident and lack of a credible timetable for production resumption[14](index=14&type=chunk) - The company has not reached a revised agreement with the seller and will provide a further update after the **90-day MAC cure period** expires on **August 19th**[14](index=14&type=chunk) [Company Outlook](index=4&type=section&id=Company%20Outlook) [Third Quarter 2025 Outlook](index=4&type=section&id=Third%20Quarter%202025%20Outlook) For Q3 2025, Peabody anticipates increased volumes in PRB and Other U.S. Thermal segments, providing specific volume, pricing, and cost targets across all four operating segments Q3 2025 Segment Outlook | Segment | Expected Volume | Expected Costs per Ton | Other Details | | :--- | :--- | :--- | :--- | | Seaborne Thermal | 3.9M tons | $45 - $50 | 2.7M tons are for export | | Seaborne Metallurgical | 2.2M tons | $110 - $120 | Expected to achieve 70-75% of premium hard coking coal price index | | PRB U.S. Thermal | 23.0M tons | $11.00 - $11.50 | Average price of $13.45/ton | | Other U.S. Thermal | 3.7M tons | $45 - $49 | Average price of $51.10/ton | [Full Year 2025 Guidance](index=5&type=section&id=Full%20Year%202025%20Guidance) Peabody updated its full-year 2025 guidance, raising volume targets for Seaborne Thermal and PRB while lowering cost-per-ton targets for multiple segments, with total capital expenditures projected at **$420 million** - The company is raising full-year 2025 guidance for Seaborne Thermal and PRB volumes and lowering cost-per-ton targets for Seaborne Thermal, Seaborne Met, and PRB segments[4](index=4&type=chunk)[15](index=15&type=chunk) Full Year 2025 Segment Guidance | Segment | Total Volume (millions of short tons) | Average Cost per Short Ton | | :--- | :--- | :--- | | Seaborne Thermal | 14.6 - 15.2 | $45.00 - $48.00 | | Seaborne Metallurgical | 8.0 - 9.0 | $115.00 - $120.00 | | PRB U.S. Thermal | 80.0 - 84.0 | $11.50 - $12.00 | | Other U.S. Thermal | 13.4 - 14.4 | $43.00 - $47.00 | Full Year 2025 Financial Metrics | Metric | 2025 Full Year ($ in millions) | | :--- | :--- | | SG&A | $95 | | Total Capital Expenditures | $420 | | ARO Cash Spend | $50 | [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Peabody reported total revenues of **$890.1 million** and an operating loss of **$38.4 million** in Q2 2025, a significant decline from the prior year, resulting in a net loss of **$27.6 million** attributable to common stockholders Statement of Operations Highlights (in Millions) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $890.1 | $1,042.0 | | Operating (Loss) Profit | $(38.4) | $233.9 | | Net (Loss) Income Attributable to Common Stockholders | $(27.6) | $199.4 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Peabody's balance sheet reported total assets of **$5,763.4 million**, total liabilities of **$2,089.3 million**, and cash and cash equivalents of **$585.9 million** Balance Sheet Summary (in Millions) | Account | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $585.9 | $700.4 | | Total Current Assets | $1,627.3 | $1,780.7 | | Total Assets | $5,763.4 | $5,953.7 | | Total Current Liabilities | $737.0 | $827.5 | | Total Liabilities | $2,089.3 | $2,244.9 | | Total Stockholders' Equity | $3,674.1 | $3,708.8 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash provided by operating activities was **$23.2 million**, while investing activities used **$91.1 million** and financing activities used **$15.8 million** Statement of Cash Flows Highlights (in Millions) | Account | Q2 2025 | Six Months Ended Jun 30, 2025 | | :--- | :--- | :--- | | Net Cash Provided By Operating Activities | $23.2 | $143.1 | | Net Cash Used In Investing Activities | $(91.1) | $(180.7) | | Net Cash Used In Financing Activities | $(15.8) | $(44.9) | [Reconciliation of Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) The company provides a reconciliation of net income to Adjusted EBITDA, a non-GAAP measure, showing a Q2 2025 Adjusted EBITDA of **$93.3 million** after adjustments from a **$25.6 million** net loss from continuing operations Adjusted EBITDA Reconciliation (Q2 2025, in Millions) | Item | Amount | | :--- | :--- | | (Loss) Income from Continuing Operations, Net of Income Taxes | $(25.6) | | Depreciation, Depletion and Amortization | $93.4 | | Interest Expense, Net | $11.1 | | Income Tax (Benefit) | $(2.7) | | Other Adjustments | $17.1 | | **Adjusted EBITDA** | **$93.3** | [Supplemental Financial Data](index=10&type=section&id=Supplemental%20Financial%20Data) This section provides a detailed breakdown of Q2 2025 revenues and Adjusted EBITDA by business segment, with U.S. Thermal segments generating **$430.8 million** in revenue and Seaborne segments generating **$447.3 million** Q2 2025 Revenue and Adjusted EBITDA by Segment (in Millions) | Segment | Revenue | Adjusted EBITDA | | :--- | :--- | :--- | | Seaborne Thermal | $195.1 | $33.5 | | Seaborne Metallurgical | $252.2 | $(9.2) | | Powder River Basin | $275.7 | $43.0 | | Other U.S. Thermal | $155.1 | $13.5 | | **Total (Excluding Corp/Other)** | **$878.1** | **$80.8** |

Core Insights - Peabody reported a net loss of $27.6 million for Q2 2025, a significant decline from a net income of $199.4 million in the same quarter last year, with Adjusted EBITDA dropping to $93.3 million from $309.7 million [1][7][23] - The company experienced strong performance in the Powder River Basin (PRB) segment, driven by robust U.S. thermal coal demand and effective cost management [2][7] - Peabody has raised its full-year volume guidance for Seaborne Thermal and PRB coal while lowering cost-per-ton targets across multiple segments [7][14] Financial Performance - Q2 2025 Adjusted EBITDA was $93.3 million, down from $309.7 million in Q2 2024, reflecting lower shipments and pricing pressures [1][23] - The company reported total revenue of $890.1 million for Q2 2025, compared to $1,042.0 million in Q2 2024 [23][32] - Operating costs for Q2 2025 were $789.4 million, slightly lower than $803.9 million in the same quarter last year [23][32] Segment Performance - Seaborne Thermal segment sold 3.6 million tons in Q2 2025, down from 4.1 million tons in Q2 2024, with an Adjusted EBITDA of $33.5 million [4][32] - Seaborne Metallurgical segment sold 2.2 million tons, with an Adjusted EBITDA loss of $9.2 million, impacted by a challenging pricing environment [5][32] - The PRB segment achieved an Adjusted EBITDA of $43.0 million, benefiting from strong demand and lower costs [8][32] Operational Updates - The Centurion Mine's longwall production start has been accelerated to February 2026 due to effective execution and development progress [12] - Peabody expects to benefit from federal royalty reductions, estimating an impact of $15 to $20 million in the second half of 2025 [7][14] Guidance and Outlook - Full-year 2025 guidance for Seaborne Thermal is now set at 14.6 to 15.2 million tons, with a cost target of $45.00 to $48.00 per ton [20] - PRB volume guidance has been raised to 80.0 to 84.0 million tons, with an average cost target of $11.50 to $12.00 per ton [20] - The company maintains its full-year volume and cost guidance for Other U.S. Thermal coal [9][20]

Core Viewpoint - Peabody Energy (NYSE: BTU) is identified as the largest thermal coal producer in the US and is considered undervalued, presenting a potential investment opportunity despite the general aversion to coal stocks [1] Company Summary - Peabody Energy is the largest producer of thermal coal in the United States, which typically leads to skepticism among investors due to the industry's reputation [1] - The stock is described as genuinely mispriced, indicating that it may be undervalued compared to its true worth [1]

Company Announcement - Peabody (NYSE: BTU) will announce its results for the quarter ended June 30, 2025, on July 31, 2025 [1] - A conference call with management is scheduled for 10 a.m. CT on the same day [1] - Instructions for conference call participation and accessing a replay will be available on PeabodyEnergy.com prior to the call [1] Company Profile - Peabody is a leading coal producer, providing essential products for the production of affordable and reliable energy and steel [1] - The company's commitment to sustainability shapes its strategy for the future [1]

Core Insights - Peabody Energy Corp (NYSE:BTU) has seen a significant decline, trading at $13.24, down 1.9%, and has lost 37% in 2025, indicating a long-term bearish trend [1] - The stock is near a historically bearish trendline, suggesting that the pullback may continue [1] - The stock has been below its 100-day moving average for at least eight of the last ten trading days, with 80% of the last two months spent below this trendline [2] Technical Analysis - Historical data shows that after similar signals in the past five years, the stock declined one month later every time, averaging an 8.07% drop, which could place BTU near $12 [2] - The current call/put volume ratio of 1.83 indicates a higher level of bullish sentiment among options traders, ranking above 83% of readings from the past year [4] - The Schaeffer's Volatility Index (SVI) of 59% suggests that options traders are pricing in low volatility expectations, ranking in the 31st percentile of its annual range [5] Analyst Recommendations - All four brokerage firms covering Peabody stock have a "strong buy" recommendation, indicating potential for bearish sentiment to unwind in the future [4]

Group 1 - Peabody Energy is a coal producing company based in the United States, previously operating in states such as Wyoming, Colorado, New Mexico, Missouri, Illinois, and Indiana [1] - The company's production was primarily focused on thermal coal, which was exported to various countries [1] - Starting this year, Peabody began mining acreage, indicating a potential shift in operational strategy [1] Group 2 - The company is of interest to individual investors seeking value in commodity production, particularly those with sustained free cash flows and low leverage [1] - There is a focus on companies that are in distress but have high recovery potential, especially in emerging markets with high margins [1] - A solid pro-shareholder attitude is emphasized, including sustained buyback programs and dividend distributions [1]

Group 1 - The Trump administration is expected to repeal the Biden administration's policy aimed at curbing emissions from power plants [1] - Peabody Energy Corporation (PTU) saw a short-term increase in stock price, with an overall rise during the day [1]

Group 1 - Peabody Energy Corporation is a U.S.-listed coal mining company with significant domestic coal production and sales [1] - The majority of Peabody's adjusted EBITDA in recent years has been derived from two seaborne operations [1] Group 2 - The investment strategy focuses on turnarounds in natural resource industries with a typical holding period of 2-3 years [2] - The portfolio has achieved a compounded annual growth rate of 28% over the last 6 years [2]

Core Viewpoint - The coal industry, particularly Peabody Energy, presents hidden investment opportunities despite the prevailing shift towards renewable energy, with Peabody trading at a significant discount to its intrinsic value and showcasing strong financials and growth potential [1][16]. Company Overview - Peabody Energy, established in 1883 and headquartered in St. Louis, Missouri, is a leading global coal producer with 17 mines in the U.S. and Australia, focusing on both thermal and metallurgical coal [2]. - The North Antelope Rochelle Mine in Wyoming is Peabody's largest operation, producing over 60 million tons of thermal coal annually, while its Australian mines cater to the growing metallurgical coal demand in Asia [2]. Diversified Portfolio - Peabody's diversified portfolio includes thermal coal, which faces challenges in developed markets, and metallurgical coal, which remains essential for steel production, especially in rapidly growing economies like China and India [3]. - The company exports to over 26 countries, generating 55-63% of its revenue from international markets, which provides resilience against regional market fluctuations [3]. Financial Performance - Peabody's share price of $14.61 reflects a P/E ratio of 6.5, significantly below the industry average of 9.04, indicating a 40% undervaluation [4]. - The price-to-book (P/B) ratio stands at 0.42, and the price-to-sales (P/S) ratio is 0.4, with a market capitalization of $1.54 billion, only 40% of its annual revenue of $4.24 billion [4]. - The company has a low enterprise value-to-EBITDA ratio of 1.7, a debt-to-assets ratio of 7.8%, and a debt-to-equity ratio of 12.8%, showcasing strong financial health and minimal leverage [5]. Profitability Metrics - Peabody's profitability metrics include a 10.5% operating margin, 10.5% net margin, 11.1% return on equity, and 10.3% return on assets, indicating competitive performance against higher-priced rivals [6]. Industry Challenges and Opportunities - The coal industry faces challenges, with thermal coal prices around $95 per ton and metallurgical coal at $183 per ton, influenced by demand fluctuations and production costs [9]. - Long-term challenges include environmental regulations and the push for renewables, but coal remains vital for energy security in developing economies, with India and Southeast Asia driving demand [10][11]. - Peabody's low debt and high cash flow position it well to navigate price volatility and capitalize on the growing demand for metallurgical coal [12]. Growth Catalysts - Analysts project a price target of $27.60 for Peabody, suggesting an 88.9% upside from its current price, driven by potential rebounds in coal prices and steady demand for metallurgical coal [14]. - The reactivation of the Centurion Mine in Australia enhances Peabody's position in the metallurgical coal segment, aligning with Asia's industrial growth [12]. Conclusion - Peabody Energy is positioned as a compelling investment opportunity within the coal sector, characterized by undervaluation, strong fundamentals, and strategic market positioning, making it a prime candidate for investors seeking value [16].

Group 1 - Peabody is strategically shifting its portfolio towards higher-margin metallurgical coal production [1] - The company is in the process of acquiring coal mines from Anglo American in Australia [1] - Despite these strategic moves, the energy sector is facing market challenges, with companies being punished [1]