Peabody Energy Q4 2025 Peabody Energy Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Peabody Energy Corp Earnings Call
Speaker #1: Good day, and welcome to the
Speaker #1: PEABODY quarter four, 2025 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.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone.
Speaker #1: To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Kayla Finkling, Director of Investor Relations.
Speaker #1: Please go ahead.
Kala Finklang: Thanks, operator, and good morning, everyone. We appreciate you joining us for Peabody's fourth quarter and full year 2025 earnings call. Joining me today are Peabody's President and CEO, Jim Grech, Chief Financial Officer, Mark Spurbeck, and Chief Commercial Officer, Malcolm Roberts. After our prepared remarks, we will open up the call for questions. Before we begin, I want to remind you that our remarks today will include forward-looking statements. Please review the full statement contained in our earnings release and consider the risk factors referenced there, along with our filings with the SEC. I'll now turn the call over to Jim.
Speaker #2: Thanks, Operator, and good morning, everyone. We appreciate you joining us for PEABODY's fourth quarter and full year, 2025 earnings call. Joining me today are PEABODY's President and CEO, Jim Grech, Chief Financial Officer, Mark Spurbeck, and Chief Commercial Officer, Malcolm Roberts.
Speaker #2: After a prepared remarks, we will open up the call for questions. Before we begin, I want to remind you that our remarks today will include forward-looking statements.
Operator: After our prepared remarks, we will open up the call for questions. Before we begin, I want to remind you that our remarks today will include forward-looking statements. Please review the full statement contained in our earnings release and consider the risk factors referenced there, along with our filings with the SEC. I'll now turn the call over to Jim. Thanks, Kayla, and good morning, everyone. I couldn't be more proud of the work of our Peabody team, which turned in an excellent quarter and year that was marked by a number of achievements. We are also seeing improving market fundamentals and have a full agenda of priorities for the new year. Safety always comes first at our operations, and we turned in another record safety year with an incident rate of 0.71 per 200,000 hours worked. That's 12% better than our prior all-time record set just a year ago.
Speaker #2: Please review the full statement contained in our earnings release and consider the risk factors referenced there along with our filings with the SEC. I'll now turn the call over to
Speaker #2: Jim. Thanks, Kayla, and good morning,
Jim Grech: Thanks, Kayla, and good morning, everyone. I couldn't be more proud of the work of our Peabody team, which turned in an excellent quarter and year that was marked by a number of achievements. We are also seeing improving market fundamentals and have a full agenda of priorities for the new year. Safety always comes first at our operations, and we turned in another record safety year with an incident rate of 0.71 per 200,000 hours worked. That's 12% better than our prior all-time record set just a year ago.
Speaker #3: Everyone, I couldn't be more proud of the work of our Peabody team, which turned in an excellent quarter and year that was marked by a number of achievements.
Speaker #3: We are also seeing improving market fundamentals and have a full agenda of priorities for the new year. Safety always comes first at our operations, and we turned in another record safety year, with an incident rate of 0.71 per 200,000 hours worked.
Speaker #3: That's 12% better than our prior all-time record set just a year ago. It is still safer to work in a PEABODY coal mine than a grocery store or shopping rates.
Operator: It is still safer to work in a Peabody coal mine than a grocery store or shopping mall based on national incident rates. Peabody also prides itself on environmental excellence, as witnessed in 2025, where we reclaimed twice as many acres as we disturbed. This allows us to shrink our footprint and reduce our financial obligations over time. We also tied our all-time record low for environmental notices of violation. Operationally and financially, the quarter was right down the fairway in meeting or surpassing expectations across key metrics. Mark will cover these results in more detail in a few minutes. I'm pleased to announce that I was in Australia last week, where the team was installing the very last shield and putting the finishing touches on the Centurion mine in advance of starting Longwall mining, well ahead of its original schedule.
Jim Grech: It is still safer to work in a Peabody coal mine than a grocery store or shopping mall based on national incident rates. Peabody also prides itself on environmental excellence, as witnessed in 2025, where we reclaimed twice as many acres as we disturbed. This allows us to shrink our footprint and reduce our financial obligations over time. We also tied our all-time record low for environmental notices of violation. Operationally and financially, the quarter was right down the fairway in meeting or surpassing expectations across key metrics. Mark will cover these results in more detail in a few minutes. I'm pleased to announce that I was in Australia last week, where the team was installing the very last shield and putting the finishing touches on the Centurion mine in advance of starting Longwall mining, well ahead of its original schedule.
Speaker #3: PEABODY also prides itself on environmental excellence, as witnessed in 2025, where we reclaimed twice as many acres as we disturbed. This allows us to shrink our footprint and reduce our financial obligations over time.
Speaker #3: We also tied our all-time record low for environmental notices of violation. Operationally and financially, the quarter was right down the fairway in meeting or surpassing expectations across key metrics.
Speaker #3: Mark will cover these results in more detail in a few minutes. I'm pleased to announce that I was in Australia last week, where the team was installing the very last shield and putting the finishing touches on the Centurion mine in advance of starting long wall mining.
Speaker #3: Well ahead of its original schedule. I have to say, the culture that has been built at Centurion is outstanding, and our team is charged up and has started mining some of the best metallurgical coal in the world.
Operator: I have to say, the culture that has been built at Centurion is outstanding, and our team is charged up and has started mining some of the best metallurgical coal in the world. Let me remind you of some of the extensive benefits Centurion has on the Peabody portfolio. First, Centurion is expected to ship an average of 4.7 million tons per year of premium hard coking coal in a world that we remain convinced is structurally short of that product over time. We expect the mine to deliver 3.5 million tons in 2026, ramping up to that 4.7 mark by 2028. Second, Centurion's product is of the highest quality, and coupled with proximity to key demand nodes in Asia, results in full benchmark pricing. Our realizations across our entire met coal segment are expected to increase from 70% of the recognized benchmark in 2025 to 80% this year.
Jim Grech: I have to say, the culture that has been built at Centurion is outstanding, and our team is charged up and has started mining some of the best metallurgical coal in the world. Let me remind you of some of the extensive benefits Centurion has on the Peabody portfolio. First, Centurion is expected to ship an average of 4.7 million tons per year of premium hard coking coal in a world that we remain convinced is structurally short of that product over time. We expect the mine to deliver 3.5 million tons in 2026, ramping up to that 4.7 mark by 2028. Second, Centurion's product is of the highest quality, and coupled with proximity to key demand nodes in Asia, results in full benchmark pricing. Our realizations across our entire met coal segment are expected to increase from 70% of the recognized benchmark in 2025 to 80% this year.
Speaker #3: Let me remind you of some of the extensive benefits Centurion has on the Peabody portfolio. First, Centurion is expected to ship an average of 4.7 million tons per year of premium hard coking coal in a world that we remain convinced is structurally short of that product over time.
Speaker #3: We expect to mine to deliver 3.5 million tons in 2026, ramping up to that 4.7 mark by 2028. Second, Centurion's product is of the highest quality, and coupled with proximity to key demand nodes in Asia, results in full benchmark pricing.
Speaker #3: Our realizations across our entire met coal segment are expected to increase from 70% of the recognized benchmark in 2025 to 80% this year. And as volumes ramp to 4.7 million tons, we expect it will further exceed that 80%.
Operator: And as volumes ramp to 4.7 million tons, we expect it will further exceed that 80%. Third, this mine is a long-lived asset. Combined with the Wards Well acquisition in 2024 that allows significant development to the north, Centurion accesses the coveted Goonyella middle seam and is expected to have a mine life of 25+ years with an integrated mine plan of 140 million tons. Finally, we previously reported a net present value for the project of $1.6 billion, with all-in costs of $105 per short ton in 2024 at an average benchmark price of $210 per metric ton, a level we are already above today. Our latest assessment is that Centurion alone represents an NPV of $2.1 billion at $225 benchmark pricing. So, top realizations with full benchmark pricing, low costs, and a long mine life.
Jim Grech: And as volumes ramp to 4.7 million tons, we expect it will further exceed that 80%. Third, this mine is a long-lived asset. Combined with the Wards Well acquisition in 2024 that allows significant development to the north, Centurion accesses the coveted Goonyella middle seam and is expected to have a mine life of 25+ years with an integrated mine plan of 140 million tons. Finally, we previously reported a net present value for the project of $1.6 billion, with all-in costs of $105 per short ton in 2024 at an average benchmark price of $210 per metric ton, a level we are already above today. Our latest assessment is that Centurion alone represents an NPV of $2.1 billion at $225 benchmark pricing. So, top realizations with full benchmark pricing, low costs, and a long mine life.
Speaker #3: Third, this mine is a long-lived asset. Combined with awards while acquisition in 2024, that allows significant development to the north, Centurion accesses the coveted Gunilla middle seam and is expected to have a mine life of 25-plus years with an integrated mine plan of 140 million tons.
Speaker #3: Finally, we previously reported a net present value for the project of $1.6 billion, with all-in cost of $105 per short ton in 2024 dollars at an average benchmark price of $210 per metric ton.
Speaker #3: A level we are already above today. Our latest assessment is that Centurion alone represents an NPV of 2.1 billion dollars at 225 dollars benchmark pricing.
Speaker #3: So, top realizations with full benchmark pricing, low cost, and a long mine life. Centurion is truly the cornerstone asset of our strategy to maximize long-term shareholder value and to intentionally reweight our portfolio toward higher-margin metallurgical coal.
Operator: Centurion is truly the cornerstone asset in our strategy to maximize long-term shareholder value and to intentionally reweight our portfolio toward higher-margin metallurgical coal. This event marks the culmination of years of disciplined strategic investment and positions Centurion to deliver the scale, cost performance, and premium product quality needed to meet the growing global demand for high-grade steelmaking coal. Also, during the quarter, we continue to make good progress in our asset optimization activities. Here, our goal is straightforward. Our Peabody Development Division is tasked with evaluating our vast land and mineral holdings to maximize our long-term earnings and cash flow potential from these assets. Actions include our work to locate renewable projects on formerly mined lands, notably in the United States with R3 Renewables.
Jim Grech: Centurion is truly the cornerstone asset in our strategy to maximize long-term shareholder value and to intentionally reweight our portfolio toward higher-margin metallurgical coal. This event marks the culmination of years of disciplined strategic investment and positions Centurion to deliver the scale, cost performance, and premium product quality needed to meet the growing global demand for high-grade steelmaking coal. Also, during the quarter, we continue to make good progress in our asset optimization activities. Here, our goal is straightforward. Our Peabody Development Division is tasked with evaluating our vast land and mineral holdings to maximize our long-term earnings and cash flow potential from these assets. Actions include our work to locate renewable projects on formerly mined lands, notably in the United States with R3 Renewables.
Speaker #3: This event marks the culmination of years of disciplined, strategic investment, and it positions Centurion to deliver the scale, cost performance, and premium product quality needed to meet the growing global demand for high-grade steelmaking coal.
Speaker #3: Also, during the quarter, we continue to make good progress in our asset optimization activities. Here our goal is straightforward: our PEABODY development division is tasked with evaluating our vast land and mineral holdings to maximize our long-term earnings and cash flow potential from these assets.
Speaker #3: Actions include our work to locate renewable projects and formally mine lands, notably in the United States with our three renewables. We're also working on Australia to Centurion mine, developing a gas power station to convert waste gas to electricity, starting a 5 megawatts, and expanding to 20 megawatts.
Operator: We're also working in Australia at the Centurion Mine, developing a gas power station to convert waste gas to electricity, starting at 5MW and expanding to 20MW. Activities also include a small plant facility to capture coal seam gas that will then be converted into LNG. During Q4, Peabody Development advanced activities in several developing areas. First, we conducted additional work to assess the rare earth and critical mineral potential at our U.S. mines, with extensive testing conducted at our PRB mines. Second, we held initial discussions with government officials and private partners regarding the siting of power plants that would make use of Peabody's extensive U.S. coal reserves. Third, we are working with the Trump administration to increase U.S. coal exports from the West Coast to the growing Asian coal markets.
Jim Grech: We're also working in Australia at the Centurion Mine, developing a gas power station to convert waste gas to electricity, starting at 5MW and expanding to 20MW. Activities also include a small plant facility to capture coal seam gas that will then be converted into LNG. During Q4, Peabody Development advanced activities in several developing areas. First, we conducted additional work to assess the rare earth and critical mineral potential at our U.S. mines, with extensive testing conducted at our PRB mines. Second, we held initial discussions with government officials and private partners regarding the siting of power plants that would make use of Peabody's extensive U.S. coal reserves. Third, we are working with the Trump administration to increase U.S. coal exports from the West Coast to the growing Asian coal markets.
Speaker #3: Activities also include a small plant facility to capture coal seam gas that will then be converted into LNG. During the fourth quarter, PEABODY development advanced activities in several developing areas.
Speaker #3: First, we conducted additional work to assess the rare earth and critical mineral potential at our U.S. mines with extensive testing conducted at our PRB mines.
Speaker #3: Second, we held initial discussions with government officials and private partners regarding the siting of power plants that would make use of PEABODY's extensive U.S.
Speaker #3: coal reserves. And third, we are working with the Trump administration to increase U.S. coal exports from the West Coast to the growing Asian coal markets.
Speaker #3: Earlier this week, I had the opportunity to participate in the CSIS-sponsored event, Securing Critical Coal Mineral Supply, a government-industry dialogue. Held in partnership with the Critical Minerals Administration.
Operator: Earlier this week, I had the opportunity to participate in the CSIS-sponsored event, Securing Critical Mineral Supply: A Government-Industry Dialogue, held in partnership with the Critical Minerals Ministerial, and the Trump administration. I want to express our appreciation to the White House National Energy Dominance Council, and Department of Energy for including us in this dialogue. This discussion underscored the growing national focus on strengthening domestic critical mineral supply chains, and the important role US companies can play in that effort. We were pleased to contribute our perspective, particularly as we continue to evaluate opportunities where Peabody's assets, expertise, and partnerships may support emerging critical mineral initiatives. We look forward to continued engagement as the federal government, and industry work together to address strategic supply chain challenges. Regarding Peabody's progress in pursuing opportunities with rare earth, and critical minerals, let me share where we are at this stage.
Jim Grech: Earlier this week, I had the opportunity to participate in the CSIS-sponsored event, Securing Critical Mineral Supply: A Government-Industry Dialogue, held in partnership with the Critical Minerals Ministerial, and the Trump administration. I want to express our appreciation to the White House National Energy Dominance Council, and Department of Energy for including us in this dialogue. This discussion underscored the growing national focus on strengthening domestic critical mineral supply chains, and the important role US companies can play in that effort. We were pleased to contribute our perspective, particularly as we continue to evaluate opportunities where Peabody's assets, expertise, and partnerships may support emerging critical mineral initiatives. We look forward to continued engagement as the federal government, and industry work together to address strategic supply chain challenges. Regarding Peabody's progress in pursuing opportunities with rare earth, and critical minerals, let me share where we are at this stage.
Speaker #3: I want to express our appreciation to the White House National Energy Dominance Council, and Department of Energy for including us in this dialogue. This discussion underscored the growing national focus on strengthening domestic critical mineral supply chains and the important role U.S.
Speaker #3: companies can play in that effort. We were pleased to contribute our perspective particularly as we continue to evaluate opportunities where PEABODY's assets expertise and partnerships may support emerging critical mineral initiatives.
Speaker #3: We look forward to continued engagement as a federal government and industry work together to address strategic supply chain challenges. Regarding PEABODY's progress in pursuing opportunities with rare earth and critical minerals, let me share where we are at at this stage.
Speaker #3: Peabody has conducted a robust critical mineral testing program since the middle of last year, with over 800 samples from the PRB alone. In addition to the standard array of light rare earth elements, our assessments to date have uncovered promising concentrations of heavy rare earths and other critical minerals.
Operator: Peabody has conducted a robust critical mineral testing program since the middle of last year, in excess of 800 samples from the PRB alone. In addition to the standard array of light rare earth elements, our assessments to date have uncovered promising concentrations of heavy rare earths and other critical minerals. We are encouraged by the presence of heavy rare earths, which account for an estimated 21% to 28% of the critical mineral oxide concentrations. I would also note that targeted concentrations of germanium and gallium in select locations show good potential. In addition to our testing program, Peabody is developing flow sheets with multiple third parties to support the technical and economic assessments, as well as the ultimate production of rare earth products. Peabody is also continuing to work with government agencies at the state and federal level.
Jim Grech: Peabody has conducted a robust critical mineral testing program since the middle of last year, in excess of 800 samples from the PRB alone. In addition to the standard array of light rare earth elements, our assessments to date have uncovered promising concentrations of heavy rare earths and other critical minerals. We are encouraged by the presence of heavy rare earths, which account for an estimated 21% to 28% of the critical mineral oxide concentrations. I would also note that targeted concentrations of germanium and gallium in select locations show good potential. In addition to our testing program, Peabody is developing flow sheets with multiple third parties to support the technical and economic assessments, as well as the ultimate production of rare earth products. Peabody is also continuing to work with government agencies at the state and federal level.
Speaker #3: We encourage by the presence of heavy rare earths, which account for an estimated 21 to 28 percent of the critical mineral oxide concentrations. I would also note the targeted concentrations of germanium and gallium in select locations show good potential.
Speaker #3: In addition to our testing program, PEABODY is developing flow sheets with multiple third parties to support the technical and economic assessments as well as the ultimate production of rare earth products.
Speaker #3: PEABODY is also continuing to work with government agencies at the state and federal level. We were pleased to be to receive funding of a $6.25 million grant by the Wyoming Energy Authority for a pilot processing plant in the state.
Operator: We were pleased to receive funding of a $6.25 million grant by the Wyoming Energy Authority for a pilot processing plant in the state. The application now goes through a public comment period before consideration by the governor later this month. At this time, we are taking an options-based approach using multiple feedstock locations and process partners. We do so to expand our opportunities for success and potentially accelerate time to market. These are still early days in our rare earth and critical mineral journey, but we are sufficiently encouraged to continue our progress here to further evaluate the commercial potential. We look forward to showing more detail as this work reaches appropriate milestones. Turning to energy policy, several weeks ago, I was honored to be appointed by the U.S. Secretary of Energy to chair the newly reconstituted National Coal Council.
Jim Grech: We were pleased to receive funding of a $6.25 million grant by the Wyoming Energy Authority for a pilot processing plant in the state. The application now goes through a public comment period before consideration by the governor later this month. At this time, we are taking an options-based approach using multiple feedstock locations and process partners. We do so to expand our opportunities for success and potentially accelerate time to market. These are still early days in our rare earth and critical mineral journey, but we are sufficiently encouraged to continue our progress here to further evaluate the commercial potential. We look forward to showing more detail as this work reaches appropriate milestones. Turning to energy policy, several weeks ago, I was honored to be appointed by the U.S. Secretary of Energy to chair the newly reconstituted National Coal Council.
Speaker #3: The application now goes through a public comment period before consideration by the governor later this month. At this time, we are taking in options-based approach using multiple feedstock locations and process partners.
Speaker #3: We do so to expand our opportunities for success and potentially accelerate time to market. These are still early days in our rare earth and critical mineral journey, but we are sufficiently encouraged to continue our progress here to further evaluate the commercial potential.
Speaker #3: We look forward to sharing more detail as this work reaches appropriate milestones. Turning to energy policy, several weeks ago I was honored to be appointed by the U.S.
Speaker #3: Secretary of Energy to chair the newly reconstituted National Coal Council. The key priority of the NCC will be to advise the administration on ways to expand use of coal fuel generation, build new coal plants, and export greater quantities of U.S.
Operator: The key priority of the NCC will be to advise the administration on ways to expand use of coal fuel generation, build new coal plants, and export greater quantities of US coal. Why should coal be central to any discussion of US energy policy? Coal is, quite simply, America's largest energy asset. More than that, America has more energy in its coal than any nation has in any one energy source. More energy than Saudi Arabia has in its oil and more energy than Russia has in its natural gas. It would be irresponsible to not use this unique asset for the benefit of the American people. It's clear that Peabody is at the intersection of multiple policy and market trends, both structural and cyclical, that are moving in a highly favorable direction.
Jim Grech: The key priority of the NCC will be to advise the administration on ways to expand use of coal fuel generation, build new coal plants, and export greater quantities of US coal. Why should coal be central to any discussion of US energy policy? Coal is, quite simply, America's largest energy asset. More than that, America has more energy in its coal than any nation has in any one energy source. More energy than Saudi Arabia has in its oil and more energy than Russia has in its natural gas. It would be irresponsible to not use this unique asset for the benefit of the American people. It's clear that Peabody is at the intersection of multiple policy and market trends, both structural and cyclical, that are moving in a highly favorable direction.
Speaker #3: Coal. Why should coal be central to any discussion of U.S. energy policy? Coal is, quite simply, America's largest energy asset. More than that, America has more energy in its coal than any nation has in any one energy source.
Speaker #3: More energy than Saudi Arabia has in its oil, and more energy than Russia has in its natural gas. We'd be irresponsible to not use this unique asset for the benefit of the American people.
Speaker #3: It's clear that PEABODY is at the intersection of multiple policy and market trends, both structural and cyclical, that are moving in a highly favorable direction.
Speaker #3: To set the stage for our market discussion, I'll note that the International Energy Agency recently came out with their annual coal report. 2025 once again set an all-time record for global coal use at 8.8 billion metric tons.
Operator: To set the stage for our market discussion, I'll note that the International Energy Agency recently came out with their annual coal report. 2025 once again set an all-time record for global coal use at 8.8 billion metric tons. That means that world coal use has nearly doubled in the 25 years since the new century started, as nations pulled people from poverty, urbanized, and electrified, a trend that continues today. This occurs at a time when U.S. winter entered a deep freeze and, unsurprisingly to us, coal moved to the top of the dispatch list on many of the most extreme days. Renewables were largely unavailable in multiple regions, and natural gas prices more than doubled in just one week, as utilities were forced to compete with residential customers and businesses at their most vulnerable times.
Jim Grech: To set the stage for our market discussion, I'll note that the International Energy Agency recently came out with their annual coal report. 2025 once again set an all-time record for global coal use at 8.8 billion metric tons. That means that world coal use has nearly doubled in the 25 years since the new century started, as nations pulled people from poverty, urbanized, and electrified, a trend that continues today. This occurs at a time when U.S. winter entered a deep freeze and, unsurprisingly to us, coal moved to the top of the dispatch list on many of the most extreme days. Renewables were largely unavailable in multiple regions, and natural gas prices more than doubled in just one week, as utilities were forced to compete with residential customers and businesses at their most vulnerable times.
Speaker #3: That means that world coal use has nearly doubled in the 25 years since the new century started. As nations pull people from poverty, urbanized, and electrified.
Speaker #3: A trend that continues today. This occurs at a time when U.S. winter entered a deep freeze and, unsurprisingly to us, coal moved to the top of the dispatch list on many of the most extreme days.
Speaker #3: Renewables were largely unavailable on multiple regions. And natural gas prices more than doubled in just one week. As utilities were forced to compete with residential customers and businesses at their most vulnerable times.
Speaker #3: Not so with coal plants, which can stockpile months of fuel supplies and face nowhere close to the price volatility and surges of some other forms of energy.
Operator: Not so with coal plants, which can stockpile months of fuel supplies and face nowhere close to the price volatility and surges of some other forms of energy. Peabody is seeing substantial strength in the markets for both domestic thermal and seaborne metallurgical coal markets. For more on supply-demand dynamics, I'll turn things over to our Chief Commercial Officer, Malcolm Roberts. Thanks, Jim, and good morning all. I'll start with the seaborne metallurgical coal markets, where benchmark pricing has risen to its highest mark in 18 months, an increase of 15% from $190 per ton levels of the beginning of Q4. Since the beginning of the year, pricing has increased to further 15%. For several quarters now, we've been projecting that Chinese anti-evolution policies would tighten up the supply and demand dynamics in the global metallurgical coal markets. That trend continues in China.
Jim Grech: Not so with coal plants, which can stockpile months of fuel supplies and face nowhere close to the price volatility and surges of some other forms of energy. Peabody is seeing substantial strength in the markets for both domestic thermal and seaborne metallurgical coal markets. For more on supply-demand dynamics, I'll turn things over to our Chief Commercial Officer, Malcolm Roberts.
Speaker #3: PEABODY is seeing substantial strength in the markets for both domestic thermal and seaborne on supply-demand dynamics, I'll turn things over to our chief commercial officer, Malcolm
Malcolm Roberts: Thanks, Jim, and good morning all. I'll start with the seaborne metallurgical coal markets, where benchmark pricing has risen to its highest mark in 18 months, an increase of 15% from $190 per ton levels of the beginning of Q4. Since the beginning of the year, pricing has increased to further 15%. For several quarters now, we've been projecting that Chinese anti-evolution policies would tighten up the supply and demand dynamics in the global metallurgical coal markets. That trend continues in China.
Speaker #2: Thanks, Jim. Roberts. And good morning all. I'll start with the seaborne metallurgical coal markets. We're benchmark pricing has risen to its highest mark in 18 months.
Speaker #2: An increased 15 percent from 190 dollars per tonne levels of the beginning of the fourth quarter. Since the beginning of the year, pricing has increased to further 15 percent.
Speaker #2: For several quarters now, we've been projecting that Chinese anti-evolution policies would tighten up the supply and demand dynamics in the global metallurgical coal markets.
Speaker #2: That trend continues in China, we've seen a shuttering of unprofitable steel mills, increased implementation of 276-day work limits, and other on-the-ground changes that have worked together to form the foundation for Metcoal pricing as we moved into 2026.
Operator: We've seen a shuttering of unprofitable steel mills, increased safety checks at coal mines, implementation of 276-day work limits, and other on-the-ground changes that have worked together to form a foundation for met coal pricing as we moved into 2026. 2025 saw the increase of blast furnaces along the coast in India, and the gradual transition of global steel production from China to India is a trend that we expect to continue during 2026. We expect India to increase its direct purchase of coking coal, as well as supportive coke imports from countries such as Indonesia that also don't have major domestic metallurgical coal supplies. China is still exporting more steel than the world needs, and in the process is suppressing steelmaking from other nations that rely on the seaborne markets for a much greater percentage of their coking coal needs.
Malcolm Roberts: We've seen a shuttering of unprofitable steel mills, increased safety checks at coal mines, implementation of 276-day work limits, and other on-the-ground changes that have worked together to form a foundation for met coal pricing as we moved into 2026. 2025 saw the increase of blast furnaces along the coast in India, and the gradual transition of global steel production from China to India is a trend that we expect to continue during 2026. We expect India to increase its direct purchase of coking coal, as well as supportive coke imports from countries such as Indonesia that also don't have major domestic metallurgical coal supplies. China is still exporting more steel than the world needs, and in the process is suppressing steelmaking from other nations that rely on the seaborne markets for a much greater percentage of their coking coal needs.
Speaker #2: 2025 saw the increase of blast furnaces along the coast in India, and the gradual transition of global steel production from China to India is a trend that we expect to continue during 2026.
Speaker #2: We expect India to increase its direct purchase of coking coal, as well as supportive coke imports from countries such as Indonesia that also don't have major domestic metallurgical coal supplies.
Speaker #2: China is still exporting more steel than the world needs, and in the process is suppressing steelmaking from other nations that rely on the seaborne markets for much for a much greater percentage of their coking coal needs.
Speaker #2: We've begun to see some protectionism come into play in Europe and India that will likely support domestic steel production during 2026. Metallurgical coal, and in particular hard coking coal, markets were tightening and prices were improving even before the monsoon season settled into Queensland.
Operator: We've begun to see some protectionism come into play in Europe and India that will likely support domestic steel production during 2026. Metallurgical coal, and in particular hard coking coal markets, were tightening, and prices were improving even before the monsoon season settled into Queensland, further constraining some met coal production and transportation. Overall, this market backdrop makes it perfect time to bring on increased shipments from the Centurion Mine. Thermal markets have remained largely stable in recent months. The benchmark Newcastle product is approximately $115 per ton. That's within a 10% of where it was two years ago, one year ago, and one quarter ago. That's the epitome of a trading range, even with a substantial amount of individual countries' supply and demand dynamics affecting individual coal flows. But it also remains a highly profitable trade for Peabody with lower-cost seaborne thermal coal production.
Malcolm Roberts: We've begun to see some protectionism come into play in Europe and India that will likely support domestic steel production during 2026. Metallurgical coal, and in particular hard coking coal markets, were tightening, and prices were improving even before the monsoon season settled into Queensland, further constraining some met coal production and transportation. Overall, this market backdrop makes it perfect time to bring on increased shipments from the Centurion Mine. Thermal markets have remained largely stable in recent months. The benchmark Newcastle product is approximately $115 per ton. That's within a 10% of where it was two years ago, one year ago, and one quarter ago. That's the epitome of a trading range, even with a substantial amount of individual countries' supply and demand dynamics affecting individual coal flows. But it also remains a highly profitable trade for Peabody with lower-cost seaborne thermal coal production.
Speaker #2: Further constraining cement, coal production, and transportation. Overall, this market backdrop makes it a perfect time to bring on increased shipments from the Centurion Mine. Thermal markets.
Speaker #2: Have remained largely stable in recent months. The benchmark Newcastle product is approximately 115 dollars per tonne, that's within a 10 percent of where it was two years ago, one year ago, and one quarter ago.
Speaker #2: That's the epitome of a trading range. Even with a substantial amount of individual countries supply and demand dynamics affecting individual coal flows, but it also remains a highly profitable trade for PEABODY with lower cost seaborne thermal coal production.
Speaker #2: A fundamental to watch on the supply side is the recent government policy adjustments in Indonesia, where production quotas for thermal coal, if enforced, could have the effect of removing more than 100 million tonnes of thermal coal from the seaborne market in 2026.
Operator: Fundamental to watch on the supply side is the recent government policy adjustments in Indonesia, where production quotas for thermal coal, if enforced, could have the effect of removing more than 100 million tons of thermal coal from the seaborne market in 2026. How all this plays out is yet to be seen. However, if followed through on this dynamic, it can be seen as positive for Newcastle pricing as the year progresses. This occurs against a backdrop in which Asian countries continue to add coal generation capacity. China added some 80 GW of new capacity in 2025, and China is expected to launch more than 100 coal units this year. India's coal-fired capacity is being projected to rise 87% to reach 420 GW by 2047.
Malcolm Roberts: Fundamental to watch on the supply side is the recent government policy adjustments in Indonesia, where production quotas for thermal coal, if enforced, could have the effect of removing more than 100 million tons of thermal coal from the seaborne market in 2026. How all this plays out is yet to be seen. However, if followed through on this dynamic, it can be seen as positive for Newcastle pricing as the year progresses. This occurs against a backdrop in which Asian countries continue to add coal generation capacity. China added some 80 GW of new capacity in 2025, and China is expected to launch more than 100 coal units this year. India's coal-fired capacity is being projected to rise 87% to reach 420 GW by 2047.
Speaker #2: How all this plays out is yet to be seen. However, if followed through. On this dynamic can be seen as positive for Newcastle pricing, as the year progresses.
Speaker #2: a backdrop in This occurs against which Asian countries continue to add coal generation capacity. China added some 80 gigawatts of new capacity in 2025, and China is expected to launch more than 100 coal units this year.
Speaker #2: India's coal-fired capacity has been projected to rise 87 percent to reach 420 gigawatts by 2047. Indonesia, the world's largest thermal coal exporter, saw power capacity more than double in the last decade.
Operator: Indonesia, the world's largest thermal coal exporter, saw power capacity more than double in the last decade, and Southeast Asian coal demand is growing at a 4% compound annual growth rate, while Vietnam set another record for coal use in 2025. Turning to US coal markets, I'd point to one number that is most noteworthy of all. Coal fuel generation was up an estimated 13% year-over-year in 2025, 13%. That ran well ahead of any projections. That occurred at a time when coal production was up just an estimated 4% in 2025. To make that equation work, utility stockpiles declined an estimated 15% year-over-year. Coal has reemerged as a solution because demand growth was not only unforeseen but unplanned for because other forms of energy are constrained and because existing US coal plants can run much harder.
Malcolm Roberts: Indonesia, the world's largest thermal coal exporter, saw power capacity more than double in the last decade, and Southeast Asian coal demand is growing at a 4% compound annual growth rate, while Vietnam set another record for coal use in 2025. Turning to US coal markets, I'd point to one number that is most noteworthy of all. Coal fuel generation was up an estimated 13% year-over-year in 2025, 13%. That ran well ahead of any projections. That occurred at a time when coal production was up just an estimated 4% in 2025. To make that equation work, utility stockpiles declined an estimated 15% year-over-year. Coal has reemerged as a solution because demand growth was not only unforeseen but unplanned for because other forms of energy are constrained and because existing US coal plants can run much harder.
Speaker #2: And Southeast Asian coal demand is growing at a 4 percent compound annual growth rate, while Vietnam set another record for coal use in 2025.
Speaker #2: Turning to U.S. coal markets, I'd point to one number that is most noteworthy of all. Coal fuel is estimated to be down 13 percent year over year in 2025, 13 percent.
Speaker #2: That ran well ahead of any projections. That occurred at a time when coal production was percent in 2025. To make that equation work, utility stockpiles declined an estimated 15 percent year over year.
Speaker #2: Coal was re-emerged as a solution because demand growth was not only unforeseen, but unplanned for because other forms of energy are constrained, and because existing U.S.
Speaker #2: coal plants can run much calls coal plants the best form of incremental generation for the next several years. Other forms will struggle to provide incremental growth versus what is planned.
Operator: That's why Peabody calls coal plants the best form of incremental generation for the next several years. Other forms will struggle to provide incremental growth versus what is planned. Let's check through the list. Renewables continue to be built out, but don't solve the problem of data centers and factories that need 24/7 generation. Natural gas has been increasingly relied upon, but gas generation has a substantial backlog. Many gas plants ordered today are unlikely to be placed in service before 2030. Gas prices have remained highly volatile in recent months, of course. Nuclear generation faces lead times and permitting that make it at best a 10-, 15-, or 20-year solution. And then there's existing coal plants, which ran at 42% of capacity in 2024 versus 72% at historical high levels. Running those plants harder could add up to 10% of total US.
Malcolm Roberts: That's why Peabody calls coal plants the best form of incremental generation for the next several years. Other forms will struggle to provide incremental growth versus what is planned. Let's check through the list. Renewables continue to be built out, but don't solve the problem of data centers and factories that need 24/7 generation. Natural gas has been increasingly relied upon, but gas generation has a substantial backlog. Many gas plants ordered today are unlikely to be placed in service before 2030. Gas prices have remained highly volatile in recent months, of course. Nuclear generation faces lead times and permitting that make it at best a 10-, 15-, or 20-year solution. And then there's existing coal plants, which ran at 42% of capacity in 2024 versus 72% at historical high levels. Running those plants harder could add up to 10% of total US.
Speaker #2: Let's check through the harder. list. Renewables That's why PEABODY solve the problem of data centers and factories that need 24/7 generation. Natural gas has been increasingly relied upon, but gas generation has a substantial backlog.
Speaker #2: Many gas plants ordered today are unlikely to be placed in service before 2030. Gas prices have remained highly volatile in recent months, of course, nuclear generation faces lead times and permitting that make it a best to 10, 15, or 20 year solution.
Speaker #2: And they then ran at 42 percent of their existing coal plants' capacity in 2024, versus 72 percent at historical high levels. Running those plants harder could add up to 10 percent of total U.S.
Speaker #2: power generation from 2024 levels, and accommodate U.S. power demand growth by itself for multiple years. That would also translate into more than 250 million tonnes per year in additional coal demand.
Operator: Power generation from 2024 levels and accommodate U.S. power demand growth by itself for multiple years. That would also translate into more than 250 million tons per year in additional coal demand. Coal plants offer a great cost advantage for utilities and consumers. A recent report punctuates this. Energy Ventures Analysis looked at the cost of replacing existing coal plant generation with comparable new generation from other sources, and these results strongly favor continuing to operate existing coal plants. For instance, replacing retiring coal plants with new solar sources would be 10 times more expensive than continuing to operate the coal plants. Coupled with economics, grid stability supports coal plant extensions. Plants that were slated for retirement have been extended in record numbers, with 35GW of coal plants having seen their proposed retirements be deferred. Just several weeks ago, we saw another plant extended into 2026.
Malcolm Roberts: Power generation from 2024 levels and accommodate U.S. power demand growth by itself for multiple years. That would also translate into more than 250 million tons per year in additional coal demand. Coal plants offer a great cost advantage for utilities and consumers. A recent report punctuates this. Energy Ventures Analysis looked at the cost of replacing existing coal plant generation with comparable new generation from other sources, and these results strongly favor continuing to operate existing coal plants. For instance, replacing retiring coal plants with new solar sources would be 10 times more expensive than continuing to operate the coal plants. Coupled with economics, grid stability supports coal plant extensions. Plants that were slated for retirement have been extended in record numbers, with 35GW of coal plants having seen their proposed retirements be deferred. Just several weeks ago, we saw another plant extended into 2026.
Speaker #2: Coal plants offer a great cost advantage for utilities and consumers. A recent report punctuates this. Energy ventures analysis looked at the cost of replacing existing coal plant generation with comparable new generation from other sources.
Speaker #2: And these results strongly favour continuing to operate existing coal plants. For instance, replacing retiring coal plants with new solar sources would be 10 times more expensive than continuing to operate the coal plants.
Speaker #2: Coupled with economics, grid stability supports coal plant extensions. Plants that were slated for retirement have been extended in record numbers, with 35 gigawatts of coal plants having seen their proposed retirements be deferred.
Speaker #2: Just several weeks ago, we saw another plant extended into 2026. How is this changing utility behaviour? In one more punctuation point added to the coal as backstory, PEABODY reached agreement recently with a major Midwestern utility for more than $20 million tonnes of Illinois-based coal over five years.
Operator: How is this changing utility behavior? In one more punctuation point added to the coal's backstory, Peabody reached agreement recently with a major Midwestern utility for more than 20 million tons of Illinois-based coal over five years. The contract exceeds $1 billion in total sales over time. We have sourcing flexibility from multiple mines and market reopeners. This is just one more sign, of course, that USA coal plants are here for the long term. Mark, over to you. Thanks, Malcolm, and good morning all. Let me start with a brief overview of our financial performance. In Q4, we reported net income attributable to common stockholders of $10.4 million or $0.09 per diluted share, an Adjusted EBITDA of $118 million, a 19% increase from the prior quarter, supported by higher seaborne thermal realizations and consistent focus on controlling the controllables.
Malcolm Roberts: How is this changing utility behavior? In one more punctuation point added to the coal's backstory, Peabody reached agreement recently with a major Midwestern utility for more than 20 million tons of Illinois-based coal over five years. The contract exceeds $1 billion in total sales over time. We have sourcing flexibility from multiple mines and market reopeners. This is just one more sign, of course, that USA coal plants are here for the long term. Mark, over to you.
Speaker #2: The contract exceeds $1 billion in total sales over time. We have sourcing flexibility from multiple mines and market reopeners. This is just one more sign, of course, that USA coal plants are here for the long term.
Speaker #2: Mark, over to you. Thanks, Malcolm, and good morning, all. Let me start with a brief overview of our financials. We reported net income attributable to common stockholders of $10.4 million, or $0.09 per diluted share.
Mark Spurbeck: Thanks, Malcolm, and good morning all. Let me start with a brief overview of our financial performance. In Q4, we reported net income attributable to common stockholders of $10.4 million or $0.09 per diluted share, an Adjusted EBITDA of $118 million, a 19% increase from the prior quarter, supported by higher seaborne thermal realizations and consistent focus on controlling the controllables.
Speaker #2: And adjusted EBITDA of $118 million, a 19 percent increase from the prior quarter, supported by higher seaborne thermal realisations and a consistent focus on controlling the controllable.
Speaker #2: We generated $69 million of operating cash flow from continuing operations, during the quarter, and $336 million for the full year. PEABODY ended the year with $575 million in cash and total liquidity above $900 million.
Operator: We generated $69 million of operating cash flow from continuing operations during the quarter and $336 million for the full year. Peabody ended the year with $575 million in cash and total liquidity above $900 million, reflecting disciplined capital deployment through the period of intense development at Centurion and consistent cash generation despite lower-than-mid cycle seaborne coal prices. We ended 2025 with another quarter of strong execution. For the full year, results met or exceeded original guidance for seven of eight volume and cost metrics. Seaborne thermal delivered 3.3 million tons, exceeding expectations. Realized export pricing averaged $81.80 per ton, up 7% from the third quarter. Cost came in below the low end of guidance and 12% lower quarter-over-quarter, supporting a robust 31% adjusted EBITDA margin and $63.5 million of fourth quarter EBITDA.
Mark Spurbeck: We generated $69 million of operating cash flow from continuing operations during the quarter and $336 million for the full year. Peabody ended the year with $575 million in cash and total liquidity above $900 million, reflecting disciplined capital deployment through the period of intense development at Centurion and consistent cash generation despite lower-than-mid cycle seaborne coal prices. We ended 2025 with another quarter of strong execution. For the full year, results met or exceeded original guidance for seven of eight volume and cost metrics. Seaborne thermal delivered 3.3 million tons, exceeding expectations. Realized export pricing averaged $81.80 per ton, up 7% from the third quarter. Cost came in below the low end of guidance and 12% lower quarter-over-quarter, supporting a robust 31% adjusted EBITDA margin and $63.5 million of fourth quarter EBITDA.
Speaker #2: Reflecting disciplined capital deployment through the period of intense development at Centurion, and consistent cash generation despite lower than mid-cycle seaborne coal prices. We ended 2025 with another quarter of strong execution.
Speaker #2: For the full year, results met or exceeded original guidance for seven of eight volume and cost metrics. Seaborne thermal delivered 3.3 million tonnes exceeding expectations.
Speaker #2: Realized export pricing averaged per tonne, up 7 percent from the third quarter. Cost came in below the low end of guidance and 12 percent lower quarter over quarter, supporting a robust 31 percent adjusted, $63.5 million of fourth quarter EBITDA.
Speaker #2: For the full year, the segment reported $222 million of adjusted EBITDA, and total capital requirements were a mere $40 million. Costs were down over $3 per tonne year over year, driven by disciplined cost management and higher production at the Wambo open cut.
Operator: For the full year, the segment reported $222 million of Adjusted EBITDA, and total capital requirements were a mere $40 million. Costs were down over $3 per ton year-over-year, driven by disciplined cost management and higher production at the Wambo Open Cut. Seaborne met shipped 2.5 million tons, up 400,000 from Q3 and above the Q4 target. Realized pricing began to improve, and costs at $113 per ton were consistent with expectations. The segment delivered $24.6 million of Adjusted EBITDA in Q4. For the year, the segment generated $56 million of Adjusted EBITDA. Shipments increased 1.3 million tons year-over-year to 8.6 million. But better yet, full-year costs beat original guidance by more than $10 per ton.
Mark Spurbeck: For the full year, the segment reported $222 million of Adjusted EBITDA, and total capital requirements were a mere $40 million. Costs were down over $3 per ton year-over-year, driven by disciplined cost management and higher production at the Wambo Open Cut. Seaborne met shipped 2.5 million tons, up 400,000 from Q3 and above the Q4 target. Realized pricing began to improve, and costs at $113 per ton were consistent with expectations. The segment delivered $24.6 million of Adjusted EBITDA in Q4. For the year, the segment generated $56 million of Adjusted EBITDA. Shipments increased 1.3 million tons year-over-year to 8.6 million. But better yet, full-year costs beat original guidance by more than $10 per ton.
Speaker #2: Seaborne met shipped 2.5 million tonnes, up 400,000 from the third quarter, and above the fourth quarter target. Realized pricing began to improve and cost at $113 per tonne was consistent with expectations.
Speaker #2: The segment delivered $24.6 million of adjusted EBITDA in Q4. For the year, the segment generated $56 million of adjusted EBITDA. Shipments increased 1.3 million tonnes year over year to 8.6 million tonnes.
Speaker #2: But better yet, full-year costs beat original guidance by more than $10 per tonne. Peabody's Met segment will be further meaningfully improved with the startup of Centurion, increasing volume to 10.8 million tonnes in 2026, and increasing segment-wide price realizations 10 percent versus the premium hard coking coal index.
Operator: Peabody's met segment will be further meaningfully improved with the startup of Centurion, increasing volume to 10.8 million tons in 2026 and increasing segment-wide price realizations 10% versus the premium hard coking coal index. The U.S. thermal platform contributed $63 million of Adjusted EBITDA in the fourth quarter. For the full year, the segment generated nearly $250 million of Adjusted EBITDA against only $57 million of capex, demonstrating the consistent free cash flow generation capability of our reliable, low-cost U.S. thermal portfolio. Over the last five years, the U.S. thermal business has generated $1.1 billion of cash net of capital investment. The PRB operations shipped 22.3 million tons in the quarter and 84.5 million tons for the full year, almost 5 million tons or 6% more than the prior year, answering the call for more reliable and affordable power as a result of increasing load growth.
Mark Spurbeck: Peabody's met segment will be further meaningfully improved with the startup of Centurion, increasing volume to 10.8 million tons in 2026 and increasing segment-wide price realizations 10% versus the premium hard coking coal index. The U.S. thermal platform contributed $63 million of Adjusted EBITDA in the fourth quarter. For the full year, the segment generated nearly $250 million of Adjusted EBITDA against only $57 million of capex, demonstrating the consistent free cash flow generation capability of our reliable, low-cost U.S. thermal portfolio. Over the last five years, the U.S. thermal business has generated $1.1 billion of cash net of capital investment. The PRB operations shipped 22.3 million tons in the quarter and 84.5 million tons for the full year, almost 5 million tons or 6% more than the prior year, answering the call for more reliable and affordable power as a result of increasing load growth.
Speaker #2: The U.S. thermal platform contributed $63 million of adjusted EBITDA in the fourth quarter. For the full year, the segment generated nearly $250 million of adjusted EBITDA, against only $57 million of CapEx, demonstrating the consistent free cash flow generation capability of our reliable, low-cost U.S. operations.
Speaker #2: thermal portfolio. Over the last five years, the U.S. thermal business has generated $1.1 billion of cash, net of capital investment. The PEABODY operations shipped 22.3 million tonnes in the quarter, and year, almost $5 million tonnes or 6 percent more than the prior year.
Speaker #2: Answering the call for more reliable and affordable power as a result of increasing load growth. The segment contributed $44.8 million of adjusted EBITDA in Q4 and $175.8 million for the full year.
Operator: The segment contributed $44.8 million of Adjusted EBITDA in Q4 and $175.8 million for the full year. Interestingly, a 6% increase in tons resulted in a 20% increase in EBITDA margin year-over-year in a mostly flat price environment, demonstrating torque to higher volumes, tight cost management, and the benefit of reduced federal royalties. The other U.S. thermal segment contributed $18.1 million of Adjusted EBITDA in the fourth quarter on shipments of 3.7 million tons, exceeding expectations. Twentymile is performing well in its new longwall panel, and mining is expected to continue through the second half of 2027 as we fulfill the existing contract with the Hayden Generating Station in Colorado. Full-year Adjusted EBITDA reached $71.4 million. Looking ahead to 2026, I'll briefly review guidance for the full year.
Mark Spurbeck: The segment contributed $44.8 million of Adjusted EBITDA in Q4 and $175.8 million for the full year. Interestingly, a 6% increase in tons resulted in a 20% increase in EBITDA margin year-over-year in a mostly flat price environment, demonstrating torque to higher volumes, tight cost management, and the benefit of reduced federal royalties. The other U.S. thermal segment contributed $18.1 million of Adjusted EBITDA in the fourth quarter on shipments of 3.7 million tons, exceeding expectations. Twentymile is performing well in its new longwall panel, and mining is expected to continue through the second half of 2027 as we fulfill the existing contract with the Hayden Generating Station in Colorado. Full-year Adjusted EBITDA reached $71.4 million. Looking ahead to 2026, I'll briefly review guidance for the full year.
Speaker #2: Interestingly, a 6 percent increase in tonnes resulted in a 20 percent increase in EBITDA margin year over year, and a mostly flat price environment, demonstrating torque to higher volumes, tight cost management, and the benefit of reduced federal royalties.
Speaker #2: segment contributed $18.1 million The other U.S. thermal of adjusted EBITDA in the fourth quarter on shipments of $3.7 million tonnes exceeding expectations. 20 Mile is performing well in its new long wall panel and mining is expected to continue through the second half of 2027 as we fulfill the existing contract with the Hayden plant in Colorado.
Speaker #2: Full year adjusted EBITDA reached $71.4 million. Looking ahead to 2026, I'll briefly review guidance for the full year. Seaborne thermal volumes are expected to be lower than 2025 due to the closure of the Wambo underground mine in Q3 last year, and lower production at Wilpanyong due to reduced operating phases as the mine progresses into narrowing pits ahead of the Pit 9 and 10 extensions.
Operator: Seaborne thermal volumes are expected to be lower than 2025 due to the closure of the Wambo Underground mine in Q3 last year and lower production at Wilpinjong due to reduced operating phases as the mine progresses into narrowing pits ahead of the Pit 9 and 10 extensions. Shipments are targeted at 12.5 million tons, including 8 million export tons. Costs are projected to be above 2025 levels at $50 per ton on lower production. We anticipate a quality mix of 45% Newcastle and 55% higher ash product. Seaborne met volumes are projected to increase over 2 million tons to 10.8 million with the start of longwall production at Centurion. At the CMJV complex, we expect production to increasingly transition to the Coppabella mine as it completes the additional bench of pre-strip to improve high-wall stability in Q3 2026 and Moorvale depletes its reserves.
Operator: Seaborne thermal volumes are expected to be lower than 2025 due to the closure of the Wambo Underground mine in Q3 last year and lower production at Wilpinjong due to reduced operating phases as the mine progresses into narrowing pits ahead of the Pit 9 and 10 extensions. Shipments are targeted at 12.5 million tons, including 8 million export tons. Costs are projected to be above 2025 levels at $50 per ton on lower production. We anticipate a quality mix of 45% Newcastle and 55% higher ash product. Seaborne met volumes are projected to increase over 2 million tons to 10.8 million with the start of longwall production at Centurion. At the CMJV complex, we expect production to increasingly transition to the Coppabella mine as it completes the additional bench of pre-strip to improve high-wall stability in Q3 2026 and Moorvale depletes its reserves.
Speaker #2: Shipments are targeted at 12.5 million tonnes, including 8 million export tonnes. Costs are projected to be above 2025 levels at $50 per tonne on lower production.
Speaker #2: We anticipate a quality mix of 45 percent Newcastle and 55 percent higher ash product. Seaborne met volumes are projected to increase over $2 million tonnes to $10.8 million, with the start of long wall production at Centurion.
Speaker #2: At the CMJV complex, we expect production to increasingly transition to the Capabella Mine as it completes the additional bench of pre-strip to improve highwall stability in the third quarter of 2026, and Mooreville depletes its reserves.
Speaker #2: Met coal costs are targeted at $113 per lower than last year. And we anticipate segment-wide average price realisations increasing to 80 percent of the premium hard coking coal index.
Operator: Met coal costs are targeted at $113 per ton, about a dollar lower than last year, and we anticipate segment-wide average price realizations increasing to 80% of the premium hard coking coal index. For U.S. thermal, we expect a very similar year to 2025. In the PRB, we expect shipments between 82 and 88 million tons and have 78 million tons priced at $13.40. Costs are expected to be consistent with 2025 levels at $11.50 per ton. Other U.S. thermal volumes are expected to be 13.7 million tons. We have 13.2 million tons priced at $54.40 and expect costs of $47 per ton, also in line with or better than 2025 results. Total capital expenditures are estimated at $340 million, $70 million lower than 2025 as Centurion begins longwall production. As we reflect on 2025, Peabody delivered a year marked by disciplined execution and strategic investment.
Operator: Met coal costs are targeted at $113 per ton, about a dollar lower than last year, and we anticipate segment-wide average price realizations increasing to 80% of the premium hard coking coal index. For U.S. thermal, we expect a very similar year to 2025. In the PRB, we expect shipments between 82 and 88 million tons and have 78 million tons priced at $13.40. Costs are expected to be consistent with 2025 levels at $11.50 per ton. Other U.S. thermal volumes are expected to be 13.7 million tons. We have 13.2 million tons priced at $54.40 and expect costs of $47 per ton, also in line with or better than 2025 results. Total capital expenditures are estimated at $340 million, $70 million lower than 2025 as Centurion begins longwall production. As we reflect on 2025, Peabody delivered a year marked by disciplined execution and strategic investment.
Speaker #2: For U.S. thermal, we expect a very similar year to 2025. In the PEABODY, we expect shipments between 82 and 88 million tonnes, and have 78 million tonnes priced at $13.40.
Speaker #2: Costs are expected to be consistent with 2025 levels at $11.50 per tonne. Other U.S. thermal volumes are expected to be 13.7 million tonnes. We have 13.2 million tonnes priced at $54.40 and expect costs of $47 per tonne.
Speaker #2: Also, in line with or better than 2025 results. Total capital expenditures are estimated at $340 million. $70 million lower than 2025 as Centurion begins long wall production.
Speaker #2: As we reflect on 2025, Peabody delivered a year marked by disciplined execution and strategic investment. Our balance sheet remains robust and provides sufficient flexibility through price cycles, and the step change in met coal production reshapes our competitive position.
Operator: Our balance sheet remains robust and provides sufficient flexibility through price cycles, and the step change in met coal production reshapes our competitive position. We have invested approximately $750 million of organic cash flow to develop and expand Centurion, an investment that significantly enhances our leverage to premium hard coking coal markets and provides a cornerstone asset for the next 25 years. As a result, Peabody enters 2026 from a position of strength with an enhanced met platform, rapidly improving PLV benchmark prices, continued strong cash-flowing thermal operations, and overall supportive market conditions. Together, these factors position the company exceptionally well for the year ahead. I'll now turn the call back over to Jim. Thanks, Mark. That closes the book on a successful 2025, and let's focus for a minute on our full slate of priorities for the new year.
Operator: Our balance sheet remains robust and provides sufficient flexibility through price cycles, and the step change in met coal production reshapes our competitive position. We have invested approximately $750 million of organic cash flow to develop and expand Centurion, an investment that significantly enhances our leverage to premium hard coking coal markets and provides a cornerstone asset for the next 25 years. As a result, Peabody enters 2026 from a position of strength with an enhanced met platform, rapidly improving PLV benchmark prices, continued strong cash-flowing thermal operations, and overall supportive market conditions. Together, these factors position the company exceptionally well for the year ahead. I'll now turn the call back over to Jim.
Speaker #2: We have invested approximately $750 million of organic cash flow to develop and expand Centurion, an investment that significantly enhances our leverage to premium hard coking coal markets and provides a cornerstone asset for the next 25 years.
Speaker #2: As a result, Peabody enters 2026 from a position of strength, with an enhanced met platform, rapidly improving Peabody benchmark prices, continued strong cash-flowing thermal operations, and overall supportive market conditions.
Speaker #2: Together, these factors position the company exceptionally well for the year ahead. I'll now turn the call back over to Jim. Thanks, Mark. That closes the book on a successful 2025, and let's focus for a minute on our full slate of priorities for the new year.
Jim Grech: Thanks, Mark. That closes the book on a successful 2025, and let's focus for a minute on our full slate of priorities for the new year.
Speaker #2: PEABODY's key focus areas include driving safe, reliable, and efficient operations across the portfolio. That's essential in the mining industry, and remains our clear number one priority.
Operator: Peabody's key focus areas include driving safe, reliable, and efficient operations across the portfolio. That's essential in the mining industry and remains our clear number one priority. Achieving full operational performance at the Centurion Mine, the promise of Centurion now turns to reality for our shareholders. I'll remind investors that this feeds into the increasingly short premium hard coking coal market, contributing to strong EBITDA-to-CapEx margins from Peabody's high cash-flowing thermal coal assets. That's true for both the seaborne and U.S. thermal business. Preserving balance sheet strength and improving free cash flow to support shareholder returns, our first priority for the use of cash remains shareholder returns, and all other potential investments must pass a high hurdle to compete for funding. Finally, progressing work streams to best advance and monetize commercial Peabody development opportunities. With that, operator, we're happy to turn the call over for questions.
Jim Grech: Peabody's key focus areas include driving safe, reliable, and efficient operations across the portfolio. That's essential in the mining industry and remains our clear number one priority. Achieving full operational performance at the Centurion Mine, the promise of Centurion now turns to reality for our shareholders. I'll remind investors that this feeds into the increasingly short premium hard coking coal market, contributing to strong EBITDA-to-CapEx margins from Peabody's high cash-flowing thermal coal assets. That's true for both the seaborne and U.S. thermal business. Preserving balance sheet strength and improving free cash flow to support shareholder returns, our first priority for the use of cash remains shareholder returns, and all other potential investments must pass a high hurdle to compete for funding. Finally, progressing work streams to best advance and monetize commercial Peabody development opportunities. With that, operator, we're happy to turn the call over for questions.
Speaker #2: Achieving full operational performance at the Centurion mine, the promise of Centurion now turns to reality for our shareholders. I'll remind investors that this feeds into the increasingly short premium hard coking coal market.
Speaker #2: Continuing the strong EBITDA to CapEx margins from PEABODY's high cash flowing thermal coal assets. That's true for both the Seaborne and U.S. thermal business.
Speaker #2: Preserving balance sheet strength and improving free cash flow to support shareholder returns. Our first priority for the use of cash remains shareholder returns. And all other potential investments must pass a high hurdle to compete for funding.
Speaker #2: And finally, progressing work streams to best advance and monetize commercial PEABODY development opportunities. With that, Operator, we're happy to turn the call over for
Speaker #2: Questions. We will now begin the question and answer.
Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Katja Jancic with BMO Capital Markets. Please go ahead. Hi. Thank you for taking my questions. Starting on the cost guide for 2026, especially for your Australian operations, what do you assume for the Australian dollar in the cost guide? And then also, what do you assume on the met side for met pricing? Good morning, Katja. For the Australian dollar, we're looking at 70 cents, pretty much where we're at today.
Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Katja Jancic with BMO Capital Markets. Please go ahead.
Speaker #3: session. To ask a question, you may press star, then one on your touchstone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.
Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.
Speaker #3: The first Yonkich with BMO Capital Markets. Please go ahead.
Speaker #4: Hi. Thank you for taking my questions. Starting on the cost guide for 26, especially for your Australian operations, what do you assume for the Australian dollar in the cost guide?
Katja Jancic: Hi. Thank you for taking my questions. Starting on the cost guide for 2026, especially for your Australian operations, what do you assume for the Australian dollar in the cost guide? And then also, what do you assume on the met side for met pricing?
Speaker #4: And then also, what do you assume on the met side for met pricing?
Mark Spurbeck: Good morning, Katja. For the Australian dollar, we're looking at 70 cents, pretty much where we're at today. And then we're using a $225 benchmark pricing.
Speaker #5: Good morning, Katya. For the Australian dollar, we're looking at $0.70. Pretty much where we're at today. And then now we're using a $225 benchmark
Operator: And then we're using a $225 benchmark pricing. And then on the Centurion development, just looking ahead, can you remind us how much CapEx is potentially still left, especially to get to that northern part? Yeah. So we're obviously starting the longwall here imminently in the south, so that initial $500 million has been spent. We talked about $750 million in total. There was some already allocated to the north as well as the acquisition Wards Well. When we move forward now into 2026, nothing's changed from what I said before. It's probably about $100 million a year in development for the north for the next 3 years. On top of that, there's some sustaining capital in the south, call it $25 million a year. Okay. Thank you. The next question comes from Nick Giles with B. Riley Securities. Please go ahead. Hey. Thanks very much, operator. Good morning, guys.
Speaker #5: pricing. And then on
Katja Jancic: And then on the Centurion development, just looking ahead, can you remind us how much CapEx is potentially still left, especially to get to that northern part?
Speaker #4: the Centurion development, just looking ahead, can you remind us how much get to that northern part? CapEx is potentially still left, especially to
Mark Spurbeck: Yeah. So we're obviously starting the longwall here imminently in the south, so that initial $500 million has been spent. We talked about $750 million in total. There was some already allocated to the north as well as the acquisition Wards Well. When we move forward now into 2026, nothing's changed from what I said before. It's probably about $100 million a year in development for the north for the next 3 years. On top of that, there's some sustaining capital in the south, call it $25 million a year.
Speaker #5: Yeah. So we're obviously starting the long wall here imminently in the south, so that initial $500 million has been spent. We talked about $750 in total.
Speaker #5: There were some already allocated to the north as well as the acquisition awards well. When we move forward now into 2026, nothing's changed from what I've said before.
Speaker #5: It's probably about $100 million a year in development for the north for the next three years. On top of that, there's some sustaining capital in the south, call it $25 million a year.
Katja Jancic: Okay. Thank you.
Speaker #4: Okay. Thank
Speaker #4: you. The next question comes from Nick
Operator: The next question comes from Nick Giles with B. Riley Securities. Please go ahead.
Speaker #3: Giles with BRILEY Securities. Please go
Speaker #3: Go ahead. Hey, thanks very much, Operator.
Nick Giles: Hey. Thanks very much, operator. Good morning, guys. My first one was just on the domestic thermal side. I mean, pricing in the PRB stepped down in 2025. Volumes rose. It seems like there could be a similar setup in 2026. So my question is, how should we think about pricing in 2027 and beyond? I mean, is there a scenario where prices revert to the upside, or is there kind of limited torque because of existing contracts? Appreciate any color there.
Speaker #6: Good morning, guys. My first one was just on the domestic thermal side. I mean, pricing in the PEABODY stepped down in 2025. Volumes rose.
Operator: My first one was just on the domestic thermal side. I mean, pricing in the PRB stepped down in 2025. Volumes rose. It seems like there could be a similar setup in 2026. So my question is, how should we think about pricing in 2027 and beyond? I mean, is there a scenario where prices revert to the upside, or is there kind of limited torque because of existing contracts? Appreciate any color there. And Malcolm, would you like to comment on that, please? Yeah. Sure. Look, the way we price is we layer in volumes probably from 3 to 4 years before the delivery period. And I'm not going to give specific guidance in terms of how contracted we are for 2027, but there's still quite a lot of contracting to be done there.
Speaker #6: It seems like there could be a similar setup in 2026. So my question is, how should we think about pricing in 2027 and beyond?
Speaker #6: I mean, is there a scenario where prices revert to the upside, or is there kind of limited torque because of existing contracts? Appreciate any color.
Speaker #6: there. And Malcolm, would you like to comment
Jim Grech: And Malcolm, would you like to comment on that, please?
Speaker #2: please?
Malcolm Roberts: Yeah. Sure. Look, the way we price is we layer in volumes probably from 3 to 4 years before the delivery period. And I'm not going to give specific guidance in terms of how contracted we are for 2027, but there's still quite a lot of contracting to be done there. So that should be exposed to a favorable pricing environment because our view is that this is a favorable pricing environment vis-à-vis the last two or three years.
Speaker #7: Yeah, sure. on that, Look, the way we price is we layer in volumes probably on from three to four years before the delivery period.
Speaker #7: And I'm not going to give specific guidance in terms of 2027, but there's still quite a lot of contracting to be done there. And so that should be exposed to a favorable pricing environment, because our view is that this is a favorable pricing environment vis-à-vis the last two or three years.
Operator: So that should be exposed to a favorable pricing environment because our view is that this is a favorable pricing environment vis-à-vis the last two or three years. Got it. Thanks for that, Malcolm. Then on the volume side, I mean, do you think there's demand for incremental tons beyond your current guide? I know increasing volumes is a different story, but would there be incremental demand? Absolutely. I think so. I mean, we've started the year with quite a lot lower inventories. We've had a reasonable cold snap, and we're already seeing those RFPs out there in the market. We're responding to those today. So I still see incremental demand. There was incremental demand last year. I see something playing out fairly similar. And I guess in terms of Peabody participating on that, our view is value over volume.
Speaker #5: Got it. Thanks for that, Malcolm. And then on the volume side, I mean, do you think there's demand for incremental tons beyond your current guide?
Nick Giles: Got it. Thanks for that, Malcolm. Then on the volume side, I mean, do you think there's demand for incremental tons beyond your current guide? I know increasing volumes is a different story, but would there be incremental demand?
Speaker #5: I know increasing volumes is a different story, but would there be incremental demand?
Malcolm Roberts: Absolutely. I think so. I mean, we've started the year with quite a lot lower inventories. We've had a reasonable cold snap, and we're already seeing those RFPs out there in the market. We're responding to those today. So I still see incremental demand. There was incremental demand last year. I see something playing out fairly similar. And I guess in terms of Peabody participating on that, our view is value over volume. So it'll be about where the price point is for those incremental tons. But I think, as we've said in previous calls, the latent supply and capacity in the basin is starting to become quite stretched. So I'd expect that people be pretty careful as to how they bid into these opportunities moving into this year.
Speaker #2: Absolutely. I think so. I mean, we've started the year with quite a lot lower inventories. We've had a reasonable cold snap, and we're already seeing those RFPs out there in the market.
Speaker #2: We're responding to those today. So I still see incremental demand. There was incremental demand last year. I see something playing out fairly similar. And I guess in terms of PEABODY participating on that, our view is value over volume.
Speaker #2: So it'll be about where the price point is. For those incremental tons. But I think, as we've said in previous calls, the latent supply and capacity in the basin is starting to become quite stretched.
Operator: So it'll be about where the price point is for those incremental tons. But I think, as we've said in previous calls, the latent supply and capacity in the basin is starting to become quite stretched. So I'd expect that people be pretty careful as to how they bid into these opportunities moving into this year. Understood. I appreciate all that color. One more, if I could. I mean, when we look at seaborne thermal costs, the midpoint set at $50 a ton, pretty meaningful step up there year-over-year. So just was curious on what are the drivers there? Is it really just the lower volumes? Is it mainly the drag at Wilpinjong? And how should we see things improve over the course of the year? Thanks a lot. Yeah. Nick, for year-over-year costs in seaborne thermal, it's really a story of the lower production volume.
Speaker #2: So, I'd expect that people will be pretty careful as to how they bid into these opportunities moving into this year.
Nick Giles: Understood. I appreciate all that color. One more, if I could. I mean, when we look at seaborne thermal costs, the midpoint set at $50 a ton, pretty meaningful step up there year-over-year. So just was curious on what are the drivers there? Is it really just the lower volumes? Is it mainly the drag at Wilpinjong? And how should we see things improve over the course of the year? Thanks a lot.
Speaker #5: Understood. I appreciate all that color. One more, if I could. I mean, when we look at Seaborne Thermal costs, the midpoint's at $50 a ton.
Speaker #5: Pretty meaningful step up there year on year. So just was curious on what are the drivers there? Is it really just the lower volumes?
Speaker #5: Is it mainly the drag at Wulpin Yong and how should we see things improve over the course of the year? Thanks a lot. Yeah, Nick, for year-over-year costs in Seaborne Thermal, it's really a story of the lower production volume.
Jim Grech: Yeah. Nick, for year-over-year costs in seaborne thermal, it's really a story of the lower production volume. So certainly an increase from lower production at Wilpinjong. There's a bit also lower production at Wambo Open Cut, but much less so. And then the answer to Katja's question there about a 70-cent Aussie dollar, that's about 4 cents higher than we realized last year. So that has probably about a $3, $4 impact as well.
Speaker #5: So certainly an increase from lower production at Wulpin Yong. There's also a bit lower production at Wampa Wulpin Cut, but much less so. And then the answer to Katya's question there about a $0.70 Aussie dollar—that's about $0.04 higher than we realized last year.
Operator: So certainly an increase from lower production at Wilpinjong. There's a bit also lower production at Wambo Open Cut, but much less so. And then the answer to Katja's question there about a 70-cent Aussie dollar, that's about 4 cents higher than we realized last year. So that has probably about a $3, $4 impact as well. Got it. Very helpful. Well, guys, nice work at Centurion, and continue best of luck. Thanks, Nick. The next question comes from Nathan Martin with The Benchmark Company. Please go ahead. Thanks, operator. Good morning, everyone. Mark, just curious, how should we think about the cadence of shipments as the year progresses, especially for the seaborne met and seaborne thermal segments? We've seen the Q1 probably anticipated to be the weakest, just given the Centurion longwall will just be starting up. And obviously, you've got the sequencing. You called out at Wilpinjong.
Speaker #5: So that has probably about a $3, $4 impact as
Speaker #5: well.
Nick Giles: Got it. Very helpful. Well, guys, nice work at Centurion, and continue best of luck.
Speaker #6: Got
Speaker #6: It. Very helpful. Well, guys, nice work at Centurion, and continued best of luck.
Jim Grech: Thanks, Nick.
Operator: The next question comes from Nathan Martin with The Benchmark Company. Please go ahead.
Speaker #3: Thanks, Nick. Next question comes from Nathan Martin with The Benchmark Company. Please go ahead.
Nathan Martin: Thanks, operator. Good morning, everyone. Mark, just curious, how should we think about the cadence of shipments as the year progresses, especially for the seaborne met and seaborne thermal segments? We've seen the Q1 probably anticipated to be the weakest, just given the Centurion longwall will just be starting up. And obviously, you've got the sequencing. You called out at Wilpinjong. So any other operational items as well to keep in mind for the year, longwall moves, etc., just when we think about that cadence?
Speaker #8: Thanks, Operator. Good morning, everyone. Mark, just curious—how should we think about the cadence of shipments as the year progresses, especially for the Seaborne Met and Seaborne Thermal segments?
Speaker #8: We've seen the first quarter probably anticipated to be the weakest just given the Centurion long wall will just be starting up. And obviously, you've got the sequencing.
Speaker #8: You called out Wulpin items as well to keep in mind for the year, long wall moves, etc., just when we think about that cadence?
Operator: So any other operational items as well to keep in mind for the year, longwall moves, etc., just when we think about that cadence? Thanks. Yeah. You've got your finger on the right items there, Nate. Seaborne thermal, much less than ratable in the first quarter. And that's Wilpinjong and Wambo Open Cut being less than ratable just simply from a mine sequencing perspective. So that'll bounce up nice for us in Q2 and even higher in Q3. When we think about seaborne met, we do have the two longwall moves. So both Metropolitan and Shoal Creek are going through longwall moves. So that's going to lower the production. And obviously, just getting about two months of production from Centurion versus a full quarter.
Speaker #8: Thanks.
Mark Spurbeck: Thanks. Yeah. You've got your finger on the right items there, Nate. Seaborne thermal, much less than ratable in the first quarter. And that's Wilpinjong and Wambo Open Cut being less than ratable just simply from a mine sequencing perspective. So that'll bounce up nice for us in Q2 and even higher in Q3. When we think about seaborne met, we do have the two longwall moves. So both Metropolitan and Shoal Creek are going through longwall moves. So that's going to lower the production. And obviously, just getting about two months of production from Centurion versus a full quarter. When we think about Centurion, that's going to ramp up probably about 700,000 tons in Q1, about 1 million to 1.1 million in Q2 and Q3, and then it'll fall back down in Q4 as we have a longwall move.
Speaker #5: Yeah. You got your finger
Speaker #5: on the right items there, Nate. Seaborne thermal, much less than rateable in the first quarter. And that's Wulpin Yong and Wampa Open Cut being less than rateable just simply from a mine sequencing perspective.
Speaker #5: So that'll bounce up nicely for us in Q2, and even higher in Q3. When we think about Seaborne met, we do have the two longwall moves.
Speaker #5: So, both Metrop and Shoal Creek are going through longwall moves, so that's going to lower the production. And obviously, just getting about two months of production from Centurion versus a full quarter.
Speaker #5: When we think about Centurion, that's going to ramp up probably about 700,000 tons in Q1, about a million to a million one in Q2 and Q3, and then it'll fall back down in Q4 as we have a long wall
Operator: When we think about Centurion, that's going to ramp up probably about 700,000 tons in Q1, about 1 million to 1.1 million in Q2 and Q3, and then it'll fall back down in Q4 as we have a longwall move. Very helpful, Mark. Appreciate that. And then maybe sticking with the seaborne met segments, I understand you guys now expect to realize approximately 80% of the benchmark there with the additional Centurion tons coming on. But could you maybe just give us a sense of kind of the quality breakdown there, maybe a percentage selling at PLV index versus high volume versus PCI, etc.? So really, the only change year-over-year is Centurion. So think of all of those tons, 3.5 million tons selling at benchmark, full benchmark pricing, maybe even a small premium.
Speaker #5: move. Very helpful,
Nathan Martin: Very helpful, Mark. Appreciate that. And then maybe sticking with the seaborne met segments, I understand you guys now expect to realize approximately 80% of the benchmark there with the additional Centurion tons coming on. But could you maybe just give us a sense of kind of the quality breakdown there, maybe a percentage selling at PLV index versus high volume versus PCI, etc.?
Speaker #8: Mark. Appreciate that. And then maybe sticking with the Seaborne met segment, I understand you guys now expect to realize approximately 80% of the benchmark there with the additional Centurion tons coming on.
Speaker #8: But could you maybe just give us a sense of kind of the quality breakdown there? Maybe a percentage selling at Peabody Index versus 5.08 versus PCI,
Speaker #8: etc.? So really
Mark Spurbeck: So really, the only change year-over-year is Centurion. So think of all of those tons, 3.5 million tons selling at benchmark, full benchmark pricing, maybe even a small premium. And then the rest of that portfolio will be selling at what it's historically done in that 70% range.
Speaker #5: the only change year over year is Centurion. So think of all of those tons, 3.5 million tons selling at benchmark, premium. And then the rest of that portfolio will be selling at what it historically done.
Operator: And then the rest of that portfolio will be selling at what it's historically done in that 70% range. Okay. Perfect. And then just maybe one to end on shareholder returns. As you guys said, spend for Centurion kind of winding down here. Met prices have improved here in the near term. When do you expect to be able to begin generating enough available free cash flow in order to return to your share buyback? Thanks. Yeah. As Jim mentioned, it's our number one focus from a capital allocation perspective is shareholder returns. I think back on 2025, on the amount of dollars we invested to get Centurion online, $250 to 260 million last year alone. So we'll be down substantially at Centurion from a capital perspective, probably $150 million less going forward. We also had a lot of expenses related to the previously announced proposed transaction with Anglo.
Speaker #5: And that's 70% range.
Nathan Martin: Okay. Perfect. And then just maybe one to end on shareholder returns. As you guys said, spend for Centurion kind of winding down here. Met prices have improved here in the near term. When do you expect to be able to begin generating enough available free cash flow in order to return to your share buyback? Thanks.
Speaker #8: Okay. Perfect. And then just maybe one to end on shareholder returns. As you guys said, spend for Centurion kind of winding down here. Met term.
Speaker #8: When do you expect to be able to generate enough available free cash flow in order to return to your share buyback? Thanks.
Mark Spurbeck: Yeah. As Jim mentioned, it's our number one focus from a capital allocation perspective is shareholder returns. I think back on 2025, on the amount of dollars we invested to get Centurion online, $250 to 260 million last year alone. So we'll be down substantially at Centurion from a capital perspective, probably $150 million less going forward. We also had a lot of expenses related to the previously announced proposed transaction with Anglo.
Speaker #5: Yeah. As Jim mentioned, it's our number one focus from a capital allocation perspective—shareholder returns. I think back on 2025, the Centurion online—$250, $260 million last year alone.
Speaker #5: So we'll be down substantially at Centurion from a capital perspective, probably 150 million dollars less going forward. We also had a lot of expenses related to the previously announced proposed transaction with Anglo.
Speaker #5: So we're starting the year at about 230 million dollars better than we look at amount of dollars we invested to get at 250 right now.
Operator: So we're starting the year at about $230 million better. And then when you look at premium hard coking coal prices being at $250 right now, substantially better than prior years, particularly with Centurion coming online. So at today's prices, I think anyone could look at the guidance we provide and see some substantial free cash flow generation. And our policy remains the same to return that to shareholders. Jim mentioned it's the number one priority. With the Centurion development risk off the table, that return should be much closer to 100% versus 65%. All right. Thanks, Mark. I'll pass it on. Appreciate the time. Best of luck this year. Thanks, Nate. Again, if you have a question, please press star, then one. The next question comes from George Eadie with UBS. Please go ahead. Yeah. Hi, Tim, Jim, Mark, Malcolm. So maybe first question for Malcolm.
Mark Spurbeck: So we're starting the year at about $230 million better. And then when you look at premium hard coking coal prices being at $250 right now, substantially better than prior years, particularly with Centurion coming online. So at today's prices, I think anyone could look at the guidance we provide and see some substantial free cash flow generation. And our policy remains the same to return that to shareholders. Jim mentioned it's the number one priority. With the Centurion development risk off the table, that return should be much closer to 100% versus 65%.
Speaker #5: Substantially better than prior years, particularly with Centurion coming online. So at today's prices, I think anyone could look at the guidance you provided and see some substantial free cash flow generation.
Speaker #5: to return that to shareholders. Jim And our policy remains the same mentioned it's the number one priority with the Centurion development risk off the table.
Speaker #5: That return should be much closer to 100% versus
Nathan Martin: All right. Thanks, Mark. I'll pass it on. Appreciate the time. Best of luck this year.
Speaker #8: All right. Thanks, Mark. I'll pass it on. Appreciate the time. Best of luck this year.
Speaker #5: Thanks,
Mark Spurbeck: Thanks, Nate.
Speaker #5: Nate, again, if you have a question, please.
Operator: Again, if you have a question, please press star, then one. The next question comes from George Eadie with UBS. Please go ahead.
Speaker #3: Press star, then one. The next question comes from George ahead.
George Eadie: Yeah. Hi, Tim, Jim, Mark, Malcolm. So maybe first question for Malcolm. Just following up on the question before, can you help me? What percent of prices in the PRB are cost-linked? I guess my question is, if you're locking in contracts for late 2027 delivery at just under $17 a short ton, which it looks like the futures is now at, if costs hold flat for those tons alone, can you essentially capture all that $5 a short ton margin? Is that right and a good way to think about it?
Speaker #9: Yeah. Hi, team. Jim, Mark, Malcolm. So maybe first question for Malcolm. Can you just follow up on the question before? Can you help me?
Operator: Just following up on the question before, can you help me? What percent of prices in the PRB are cost-linked? I guess my question is, if you're locking in contracts for late 2027 delivery at just under $17 a short ton, which it looks like the futures is now at, if costs hold flat for those tons alone, can you essentially capture all that $5 a short ton margin? Is that right and a good way to think about it? Yeah. George, it's a little difficult for me to get into the specifics of each of the contracts. But generally, we don't have a lot of rise and fall for costs within the PRB contracts. They rise and fall on the basis of government policy impositions, taxes, those types of things.
Speaker #9: What percent of prices in the Peabody cost link— I guess my question is, if you're locking in contracts for late 2027 delivery just under $17 a short ton, which it looks like the futures is now at, if costs hold flat for those tons alone, can you essentially capture all that $5 a short ton margin?
Speaker #9: Is that right? And a good way to think about it.
Malcolm Roberts: Yeah. George, it's a little difficult for me to get into the specifics of each of the contracts. But generally, we don't have a lot of rise and fall for costs within the PRB contracts. They rise and fall on the basis of government policy impositions, taxes, those types of things. So when pricing business, we got to take a view of what costs are and what the market can bear out there. But we're not really a cost-plus business. We look at what we think the fair market level is out there, and we'll pitch that in that year's dollars, effectively.
Speaker #5: Yeah, George, it's a little difficult for me to get into the specifics of each of the contracts, but generally, we don't have a lot of rise and fall for costs within the Peabody contracts.
Speaker #5: They rise and fall on the basis of government policy impositions, taxes, those types of things. So when pricing business, we got to take a view of what costs are and what the market can bear out there.
Operator: So when pricing business, we got to take a view of what costs are and what the market can bear out there. But we're not really a cost-plus business. We look at what we think the fair market level is out there, and we'll pitch that in that year's dollars, effectively. Okay. Then in terms of taxes and so forth, rebates, how much does that sort of run at? Is it fair to assume 20% of that price upside gets taken away and those sort of factors? Or is it more about a give-and-take negotiation and those contracts' prices aren't exactly what you'll get? Yeah. Look, I think you got it about right. I mean, if you go across our book, you could say royalties, taxes, and the like could be 20, 25%, something like that.
Speaker #5: But we're not really a cost-plus business. We look at what we think the fair market level is out there, and we'll pitch that in that year's dollars.
Speaker #5: effectively. Okay.
George Eadie: Okay. Then in terms of taxes and so forth, rebates, how much does that sort of run at? Is it fair to assume 20% of that price upside gets taken away and those sort of factors? Or is it more about a give-and-take negotiation and those contracts' prices aren't exactly what you'll get?
Speaker #9: Then in terms of taxes and so forth, rebates, how much does that sort of run out? Is it fair to assume 20% of that price upside gets taken away in those sorts of factors, or is it more about a give-and-take negotiation in those contracts—prices aren't exactly what you'll—
Speaker #9: get? Yeah.
Malcolm Roberts: Yeah. Look, I think you got it about right. I mean, if you go across our book, you could say royalties, taxes, and the like could be 20, 25%, something like that. So if you think about that, if prices go up, some of that gets taken away.
Speaker #5: Look, I think you got it about right. I mean, if you go across our book, you could say royalties, taxes, and the like. It could be 20, 25 percent, something like that.
Speaker #5: So, if you think about that, if prices go up, some of that gets taken away.
Operator: So if you think about that, if prices go up, some of that gets taken away. Yep. Okay. No, thanks. And maybe back to Jim and Mark, but just on volumes in Australia, more about when does that deplete exactly which quarter? And just on that, given a better 2027, hopefully, for Coppabella, is sort of 1 million ton down year-over-year net for that JV sort of a right way to think about it potentially? George, first question on Moorvale, I think, was the question. We will be mining there all of this year. And into 2024, well, probably second half of the year will wind down at Moorvale, and it'll really transition all to Coppabella. So looking for a little bit of decline year-over-year as the combined entity. But I would say we'll be done midyear at Moorvale. Okay. Yep.
George Eadie: Yep. Okay. No, thanks. And maybe back to Jim and Mark, but just on volumes in Australia, more about when does that deplete exactly which quarter? And just on that, given a better 2027, hopefully, for Coppabella, is sort of 1 million ton down year-over-year net for that JV sort of a right way to think about it potentially?
Speaker #9: Yeah, okay. No, thanks. On volumes in Australia, more about when does that deplete exactly— which quarter? And just on that, maybe back to Jim and Mark, but just given a better '27, hopefully, for copper bellar, is sort of a million ton down year-on-year net for that JV sort of the right way to think about it, potentially?
Speaker #5: George, first question. I'm more available, I think, was the question. We will be mining there all of this year, and into 2020. Well, probably the second half of the year, we'll wind down.
Mark Spurbeck: George, first question on Moorvale, I think, was the question. We will be mining there all of this year. And into 2024, well, probably second half of the year will wind down at Moorvale, and it'll really transition all to Coppabella. So looking for a little bit of decline year-over-year as the combined entity. But I would say we'll be done midyear at Moorvale.
Speaker #5: At more available, and it'll really transition all the copper bellar. So over year, as the combined entity, but I would say we'll be done mid-year looking for a little bit of decline year at more
Speaker #5: available. Okay.
George Eadie: Okay. Yep. Thanks for that one, Mark. Sorry, just on volumes as well there, Wilpinjong, can you remind us where that's at operationally and CapEx? Is there anything sort of material to come back end of the decade with the sort of pit sequencing and that going on?
Speaker #9: Yeah. Thanks for that one, Mark. And sorry, just on volumes as well there, we'll be known. Can you remind us where that's at operationally in CapEx?
Operator: Thanks for that one, Mark. Sorry, just on volumes as well there, Wilpinjong, can you remind us where that's at operationally and CapEx? Is there anything sort of material to come back end of the decade with the sort of pit sequencing and that going on? Yeah. So it's really sustaining capital for the next two, three years. We talked about the pit kind of 8, 9, 10 extensions back end of the decade, probably 2029, where we'll see a slug of capital. And that'll be fleet and equipment as well, maybe total of $100 million that far out. Okay. Thanks. I'll jump back on the gate. Cheers. Thank you, George. This concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks.
Speaker #9: Is there anything, sort of material, to come back end of the decade with the sort of pit sequencing and that going on?
Mark Spurbeck: Yeah. So it's really sustaining capital for the next two, three years. We talked about the pit kind of 8, 9, 10 extensions back end of the decade, probably 2029, where we'll see a slug of capital. And that'll be fleet and equipment as well, maybe total of $100 million that far out.
Speaker #5: Yeah. So it's really sustaining capital for the next two, three years. We talked about the pit kind of eight, nine, ten extensions. Back end of the decade, probably 20, 29, where we'll see a slug of capital.
Speaker #5: And that'll be fleet and equipment as well—maybe a total of $100 million that far out.
George Eadie: Okay. Thanks. I'll jump back on the gate. Cheers.
Speaker #9: Okay, thanks. I'll jump back in the queue.
Speaker #9: Cheers. Thank you,
Speaker #9: Cheers. Thank you,
Mark Spurbeck: Thank you, George.
Speaker #5: George, this concludes our questions and answers.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Grech for any closing remarks.
Speaker #3: Answer session. I would like to turn the conference back to remarks.
Speaker #5: Well, thanks for your time today, both for our longstanding investors as well as the many of you who have been new to the story in the recent months.
Operator: Well, thanks for your time today, both for our longstanding investors as well as the many of you who have been new to the story in the recent months. I believe we have a great year ahead of us, and we're looking forward to keeping you updated as the year goes on. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Jim Grech: Well, thanks for your time today, both for our longstanding investors as well as the many of you who have been new to the story in the recent months. I believe we have a great year ahead of us, and we're looking forward to keeping you updated as the year goes on. Thank you.
Speaker #5: I believe we have a great year ahead of us, and we're looking forward to keeping you updated as the year goes on. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
