Peabody Energy Corporation

Good day and welcome to the Peabody Q3 2025 earnings conference call. All participants will be in the 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 a question. To ask a question, you may press star, then one on a touch-tone phone. 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 Vic Sevek of Investor Relations. Please go ahead.

Thanks, Operator, and good morning, all. Thank you for joining today to take part in Peabody's third quarter call. Remarks today will be from Peabody's President and CEO, Jim Gregg, CFO, Mark Sperbeck, and Chief Commercial Officer, Malcolm Roberts. Following the remarks, of course, we'll open up the call to questions. Now, we do have some forward-looking statements today, and you'll find our full statement on forward-looking information in the release. We do encourage you to consider the risk factors referenced there, as well as our public filings with the SEC. And I'll now turn the call over to Jim.

Thanks, Vic, and good morning, everyone. I'm pleased to report that Peabody continues to perform quite well with great safety results, good volumes, strong cost containment, a pristine balance sheet, and an outlook that points to more of the same. Our third quarter was punctuated by strong thermal coal shipments and historically low met coal costs. Also, I'm delighted to say that the long well production at our flagship Centurion mine begins next quarter. We expect shipments of Centurion's premium hard coking coal to expand sevenfold in 2026. to 3.5 million tons and even more beyond that time. Development and hiring remains on track and long well equipment is beginning to be installed underground ahead of the February start. Over the 25 plus year mine life, we expect Centurion to be our lowest cost metallurgical coal mine. And by itself, the mine should boost our average met coal portfolio realizations as a percent of benchmark from the 70% mark this year to roughly 80% in 2026. All of this occurs against market pricing that is toward the lower end of the pricing cycle. To steal a bit of Malcolm's thunder, I'll share a belief that all three of our end markets could have upside pricing pressure in 2026. Mark will tell you that we have designed Peabody to produce positive EBITDA even during the toughest times. while generating substantial cash flows during mid to higher parts of the cycle. We're now at an interesting inflection point on how investors should be looking at our company. Our capital investment in Centurion is tapering down, even as the Longwell mining begins next quarter, setting us up to expand free cash flows in both directions. That bodes well for shareholder returns using our established policies. Let's now turn to what we're seeing in U.S. fundamentals. One of the world's largest hedge funds recently commented to us that Peabody was at the intersection of some of the most significant themes going on in America. And I couldn't agree more. Consider a few of these. The AI data center theme continues to play out with new investments being announced weekly. When coupled with plans for increased U.S. manufacturing, this means power generation will struggle to keep up with demand for the foreseeable future. US coal plants reliability and affordability also continues to be emphasized. During the coldest days of last winter, for instance, fossil fuels provided more than 90% of the additional US generation needed versus just 4% for wind and solar. The often quoted national average of 16% of electricity from coal also doesn't do justice to the workload reliability, and economics that coal power generation provides in certain states. For example, our home state of Missouri gets approximately 60% of its electricity from coal, while California has virtually no coal-fueled power. As a result, Missouri's average cost of electricity was just 11 cents per kilowatt hour last year. The California power averaged 27 cents, nearly two and a half times that of Missouri. The third quarter continued to see 202C executive orders to keep coal fuel generating plants open and utilities announcing additional extensions. The count of life extensions for U.S. coal fuel generation now totals 58 units and 46 gigawatts of generation, more than a quarter of the total installed base. This comes as the Trump administration continues to implement common sense policy. In the third quarter alone, we saw federal funding and emergency orders to extend the lives of coal plants, a 5.5% reduction in the federal coal royalty rate, and an upcoming 2.5% production tax credit from the One Big Beautiful Bill. We also saw a growing national focus on securing rare earth elements and critical minerals. We have long said that our leading U.S. thermal coal platform and particularly our Powder River Basin position represents a free option for investors. To extend that analogy, today that option is nicely in the money. With that brief overview, Malcolm, I'll now turn the call over to you to give more color on the markets.