Peabody Reports Earnings For Quarter Ended March 31, 2017; Revises Financial Targets For Full-Year 2017

ST. LOUIS, MO – Peabody Energy reported first quarter revenues rose 29 percent to $1.33 billion.driven by a 26 percent increase in Powder River Basin shipments, 17 percent rise in Western sales volumes, and 139 percent and 44 percent average revenue-per-ton increases in Australian metallurgical and thermal coal, respectively. "Peabody’s first quarter results were significantly improved over the prior year across the platform, reflecting sharply higher coal demand in the United States and expanded Australian margins for both thermal and metallurgical coal," said Peabody President and Chief Executive Officer Glenn Kellow. "Whilst several temporary issues in Australia prevented the quarter from meeting our full potential, our performance was greatly improved with excellent cash generation from our operations.  We look forward to advancing with a strengthened balance sheet, rebounding shipments in Queensland, and retention of the Metropolitan Mine in New South Wales."

"With profitable operations across the U.S. and Australian platforms, Peabody looks forward to generating cash, further reducing debt and returning cash to shareholders over time," said Peabody Executive Vice President and Chief Financial Officer Amy Schwetz.  "We have a new capital structure and focused capital discipline that is designed to serve shareholders well through all cycles."

Industry fundamentals improved in the first quarter of 2017 relative to the prior year both in the United States and Asia-Pacific regions.  First quarter coal shipments rose sharply in the U.S., with seaborne thermal and metallurgical coal prices running well above prior-year levels.

While coal consumption for U.S. electricity generation increased 3 percent year over year through March in response to higher natural gas prices, first quarter heating degree days were 4 percent lower than prior year and 19 percent below the 10-year average, muting electricity demand.  Still, with natural gas prices on average 55 percent above the prior year in the first quarter, natural gas generation declined 16 percent.  Despite lower-than-expected coal demand, U.S. coal shipments increased 14 percent, limiting coal stockpile draws.  For full-year 2017, Peabody projects U.S. coal consumption from electricity generation to increase approximately 30 to 40 million tons compared to 2016 levels.

Within the U.S. policy arena, Peabody remains very encouraged by priorities and strong actions from a federal administration that recognizes coal as an important part of the energy mix and supports coal mining and coal use.  Recently, the administration has taken steps to reverse onerous regulations through the repeal of the so-called "Stream Protection Rule" and review of the Clean Power Plan.  The Energy Independence executive order was also passed, while the secretary of energy requested a review of the impacts of renewable-fuel subsidies on baseload electricity generation, reliability and costs.