Peabody Energy Corporation

Good day and welcome to the Peabody second quarter 2024 earnings 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 choose. Please note, this event is being recorded. I would now like to turn the conference over to Carla Kimrey, VP, Investor Relations. Please go ahead.

Good morning, and thank you for joining Peabody's call for the second quarter of 2024. 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. Now, I'll turn the call over to Jim.

Thanks, Carla, and good morning, everyone. Thank you for taking the time to join us today and for your interest in Peabody. I am pleased to report the second quarter results came in as forecasted and we have a confident outlook for the second half of 2024. More importantly, to date, Peabody is having a remarkable year with safety, our number one value, as five of our mines have had zero reportable injuries. Peabody is committed to increasing shareholder value through a balanced approach of maximizing shareholder returns and investing in organic metallurgical co-growth at Centurion. Our resilient balance sheet allows us to be flexible and dynamic in the prevailing market conditions. As a result, and in accordance with our shareholder return policy and favorable outlook for the remainder of the year, we have committed an additional $100 million for opportunistic share repurchases. Centurion, a world-class hard cocaine coal growth project, is going very well. The initial underground development rates are exceeding expectations. We were able to mine our first development coal in June, and in July we commissioned our second continuous miner. We are on budget and expect to ship coal from this mine to customers in the fourth quarter and are on target for long-wall coal in the first quarter of 2026. With the recent acquisition of the Ward's Well Deposit, we have extended the mine life to over 25 years with an average annual production of approximately 4.7 million tons. This quality of coal is an established cornerstone of coking coal blends, highlighting the potential for sustainable financial returns and is a unique opportunity to reweight Peabody's earnings to Seabourn Med. Now moving on to our operating segments. Overall, second quarter operational results came in as forecasted and our mines performed safely. The Seabourn thermal segment performed to expectations. Our Wolpenjohn mine continued to operate well with improved equipment availability and truck utilization. As Malcolm will address, the Asian thermal market continues to see demand growth for our Wilkin joint product, and as such, we have increased volume expectations for the remainder of 2024. The seaborne met segment also came in as forecasted. Our volumes, costs, and realized prices were as expected. Australia did experience some significant rain in the last week of the quarter, and some shipments out of the CMJV were delayed. Additionally, CMJB will be mining through challenging geotechnical conditions, which is reflected in our reduced four-year guidance. The Demopolis Lock in Alabama was opened ahead of schedule in mid-May. While we were pleased with U.S. Army Corps of Engineers bringing the Demopolis Lock online earlier than expected, unfortunately, another lock, the Holt Lock, was determined to be unstable on June 22nd. The Corps is planning to install a bunkhead as a temporary fix by the end of September to early October, which could open the lock intermittently to allow traffic to pass until a permanent fix is achieved. As we did while the Maples lock was down, we will continue to utilize alternative rail transportation at Shoal Creek at slightly reduced volumes reflected in the full year guidance. I want to thank our rail and other logistics providers for their continued partnership and support. In the PRB, shipments were slightly higher than expectations as we came out of the shoulder season. The segment had strong cash performance with a continued emphasis on operational efficiency, resulting in improved margins. While we expect a stronger second half of the year, we felt it was prudent to reduce full year guidance as customer inventories remain high, along with depressed natural gas prices. Other U.S. thermal costs and revenues were in line with expectations. Shipments were slightly less than expected, but up 16% as we began delivering against new contracts originated during the first quarter. In total, for the U.S. thermal markets, we saw nominations and volumes increase as the quarter moved on. We continue to see this in July also. Malcolm Roberts, our Chief Marketing Officer, will be delivering our outlook on the markets today. Malcolm?