Peabody Energy Corporation

Good morning and welcome to the Peabody fourth quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Carla Kimrey, Vice President of Investor Relations. Please go ahead.

Good morning, and thanks for joining Peabody's earnings call for the fourth quarter and full year of 2023. With me today are President and CEO Jim Grech, CFO Mark Sperbeck, and our Chief Marketing Officer Malcolm Roberts. Within the earnings release, you will find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim.

Thanks, Carla, and good morning, everyone. For the full year 2023, our operations performed as expected, delivering another year of strong results, allowing us to further enhance shareholder value. We pre-funded our long-term mine closure and reclamation obligations and implemented a robust shareholder return plan, which resulted in reducing our shares outstanding by over 11 percent. We also continued to strategically reinvest in our MET portfolio for our Centurion development project, the pending acquisition of a large portion of the Ward's Well Reserve adjacent to the project, and the purchase of the new lawn wall kits at our Shoal Creek and Metropolitan operations. In the fourth quarter of 2023, we produced strong results despite a non-Peabody-related train derailment on the main line in Australia that interrupted some deliveries in December. We continued to advance development of our Centurion Premium hard coking coal project and successfully put the new long wall at Chill Creek into production ahead of schedule. Given the March mine fire at Chill Creek, this was an incredible achievement that would not have been possible without the efforts of our dedicated employees working in close coordination with MSHA. Before I expand on the markets, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Coming off our lowest annual global injury rate in company history last year, this year we achieved our second best annual global injury rate and a record low injury rate in Australia for a calendar year. Our Wolpenjohn mine celebrated two years with no lost time incidents. Our 20-mile mine won the Sentinels of Safety Award for the second year in a row. recognizing the mine as the safest underground mine in the U.S. Now, turning to the global coal markets. Seaborne thermal coal markets were range-bound during the quarter. Elevated coal and natural gas inventories in the Northern Hemisphere have continued to weigh on demand for high-energy thermal coal, coupled with an increased supply from the east coast of Australia, resulting in Newcastle coal trading within a range of $120 to $150 a tonne. Asian thermal coal imports continue to grow, with China reporting that thermal coal imports totaled 354 million metric tons for 2023, increasing by 62% compared with the year-ago level, and were by far the largest contributor to Asian import growth. In contrast, Japan and Korea are on track to record mild decreases in imports for 2023. Within the seaborne metallurgical coal market, the volatility which characterized the first nine months of 2023 continued during the balance of the year. The steel sector outside of China showed growth in crude steel output during the three months ended December 31, 2023, led mainly by India and its ongoing strong economic expansion. Total crude steel output during the period, however, contracted because of a sharp decline in Chinese production where steel producers reported thin margins and slower domestic demand. Premium hard coking coal indices finished a quarter marginally lower, around $323 a ton. The outlook for the metallurgical coal market remains positive, with seaborne supply remaining below historical levels, combining with strong Indian purchase interest and new import demand for steelmaking coals within Southeast Asia. In comparison, PCI and semi-soft coking coals observed more substantial price reductions. In the United States, electricity generation from thermal coal has declined year-on-year due to low gas prices and the impacts of renewable generation. The near-term demand outlook is anticipated to be challenged by comparatively high generator inventories as we transition into the post-winter shoulder season. Renewables continue to grow as part of the energy mix. We have seen several of our customers delay the retirement of some of their plants in order to ensure grid reliability. Now moving on to our operating segments. Our seaborne thermal fourth quarter coal volumes came in at 3.7 million tons, which was lower than anticipated primarily due to a train derailment on the main line which serves our Wilpin Yonge mine. The derailment occurred on December 6 and impacted shipments for 10 days. Segment costs per ton were at the high end of our range due to the lower shipments. Our seaborne MET segment shipments were 2.1 million tons in the quarter in line with expectations, while total segment costs were better than anticipated at $108 per ton. In December, we were able to successfully commence new longwall production at Shoal Creek in the newly developed L panel district ahead of schedule. And the PRB shipments of 23.6 million tons were better than anticipated, This quarter, Peabody increased our production share of the total PRB shipments from 39% in the third quarter to 43% in the fourth quarter. Another U.S. thermal shipments were 3.7 million tons, slightly below expectations as we had a few customers reduce their demand due to high inventories and natural gas pricing. Outside of our active operations, we continue to make progress at the Centurion Mine, our key metallurgical coal growth project. In December, we renamed North Gunyella as a Centurion mine, signifying a new chapter in our operations. The Centurion complex will include the former North Gunyella mine along with the new Ward's Well deposit, which is adjacent to our existing property. We anticipate closing on the Ward's Well transaction in the second quarter. At site, we continue to advance on initiatives to support the commencement of development coal in April. including installation of a new conveyor system and the commissioning of equipment for underground development. We're also making progress with building out the workforce as we welcomed our first group of permanent underground workers. We'll continue to onboard additional underground operators and maintenance staff to support scaling up of development. We continue to expect our first sales of development coal in the second half of 2024 and longwall coal in 2026. We enter the new year with a diverse platform that gives us the stability and consistency to deliver results, allowing us to return cash to shareholders and advance major projects as we weight our portfolio to more seaborne coal. As we look forward to 2024, we are focused on executing our strategy by continuing to deliver consistent, predictable, and reliable performance from our operations, advancing Centurion, our Tier 1 premium hard coking coal development project, and delivering value to our shareholders through our previously announced shareholder return program. I'll now turn it over to Mark to cover the financial details. Thanks, Jim.