Peabody Reports Earnings For Quarter And Year Ended December 31, 2019

¹ Adjusted EBITDA, Free Cash Flow and Net Debt are non-GAAP financial measures. Revenues per ton, costs per ton, Adjusted EBITDA margin per ton and percent are non-GAAP operating/statistical measures. Adjusted EBITDA margin is equal to segment Adjusted EBITDA divided by segment revenues. Please refer to the tables and related notes in this press release for a reconciliation of non-GAAP financial measures.

Condensed Consolidated Statements of Operations (Unaudited)

For the Quarters and Years Ended Dec. 31, 2019 and 2018

(In Millions, Except Per Share Data)

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

Tons Sold

40.8

46.2

165.5

186.7

Revenues

$

1,117.4

$

1,397.1

$

4,623.4

$

5,581.8

Operating Costs and Expenses ⁽¹⁾

825.1

1,021.5

3,536.6

4,071.4

Depreciation, Depletion and Amortization

121.6

175.9

601.0

679.0

Asset Retirement Obligation Expenses

13.8

15.1

58.4

53.0

Selling and Administrative Expenses

37.2

38.4

145.0

158.1

Restructuring Charges (Benefit)

23.0

(0.5)

24.3

1.2

Transaction Costs Related to Business Combinations and Joint Ventures

11.8

4.9

21.6

7.4

Other Operating (Income) Loss:

Net Loss (Gain) on Disposals

0.7

1.6

(2.1)

(48.2)

Gain on Formation of United Wambo Joint Venture

(48.1)

—

(48.1)

—

Asset Impairment

250.2

—

270.2

—

Provision for North Goonyella Equipment Loss

58.5

17.1

83.2

66.4

North Goonyella Insurance Recovery

—

—

(125.0)

—

Income from Equity Affiliates

(10.9)

(3.7)

(3.4)

(68.1)

Operating (Loss) Profit

(165.5)

126.8

61.7

661.6

Interest Expense

36.8

36.5

144.0

149.3

Loss on Early Debt Extinguishment

0.2

—

0.2

2.0

Interest Income

(4.5)

(9.3)

(27.0)

(33.6)

Net Periodic Benefit Costs, Excluding Service Cost

4.8

4.5

19.4

18.1

Net Mark-to-Market Adjustment on Actuarially Determined Liabilities

67.4

(125.5)

67.4

(125.5)

Reorganization Items, Net

—

—

—

(12.8)

(Loss) Income from Continuing Operations Before Income Taxes

(270.2)

220.6

(142.3)

664.1

Income Tax Provision (Benefit)

20.0

(12.9)

46.0

18.4

(Loss) Income from Continuing Operations, Net of Income Taxes

(290.2)

233.5

(188.3)

645.7

Income from Discontinued Operations, Net of Income Taxes

13.8

27.1

3.2

18.1

Net (Loss) Income

(276.4)

260.6

(185.1)

663.8

Less: Series A Convertible Preferred Stock Dividends

—

—

—

102.5

Less: Net Income Attributable to Noncontrolling Interests

13.4

8.0

26.2

16.9

Net (Loss) Income Attributable to Common Stockholders

$

(289.8)

$

252.6

$

(211.3)

$

544.4

Adjusted EBITDA ⁽²⁾

$

204.9

$

273.7

$

837.1

$

1,379.3

Diluted EPS - (Loss) Income from Continuing Operations ⁽³⁾⁽⁴⁾

$

(3.12)

$

1.97

$

(2.07)

$

4.28

Diluted EPS - Net (Loss) Income Attributable to Common Stockholders ⁽³⁾

$

(2.98)

$

2.20

$

(2.04)

$

4.43

(1)

Excludes items shown separately.

(2)

Adjusted EBITDA is a non-GAAP financial measure. Refer to the "Reconciliation of Non-GAAP Financial Measures" section in this document for definitions and reconciliations to the most comparable measures under U.S. GAAP.

(3)

During the quarter and year ended December 31, 2019, weighted average diluted shares outstanding were 97.3 million and 103.7 million, respectively. During the quarter and year ended December 31, 2018, diluted EPS was calculated under the two-class method which treats participating securities as having rights to earnings that otherwise would have been available to common stockholders and assumes that participating securities are not exercised or converted. As such, weighted average diluted shares outstanding were 114.7 million and 121.0 million during the quarter and year ended December 31, 2018, respectively, and excluded weighted average shares outstanding related to the participating securities of 2.1 million for the year ended December 31, 2018.

(4)

Reflects (loss) income from continuing operations, net of income taxes less preferred stock dividends and net income attributable to noncontrolling interests.

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Supplemental Financial Data (Unaudited)

For the Quarters and Years Ended Dec. 31, 2019 and 2018

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

Tons Sold (In Millions)

Seaborne Thermal Mining Operations

5.4

5.5

19.5

19.1

Seaborne Metallurgical Mining Operations

1.9

2.3

8.1

11.0

Powder River Basin Mining Operations

27.6

30.0

108.1

120.3

Midwestern U.S. Mining Operations

3.7

4.6

16.0

18.9

Western U.S. Mining Operations

1.9

3.5

11.9

14.7

Total U.S. Thermal Mining Operations

33.2

38.1

136.0

153.9

Corporate and Other

0.3

0.3

1.9

2.7

Total

40.8

46.2

165.5

186.7

Revenue Summary (In Millions)

Seaborne Thermal Mining Operations

$

251.0

$

325.3

$

971.7

$

1,099.2

Seaborne Metallurgical Mining Operations

201.4

299.0

1,033.1

1,553.0

Powder River Basin Mining Operations

325.2

340.3

1,228.7

1,424.8

Midwestern U.S. Mining Operations

147.1

193.3

669.7

801.0

Western U.S. Mining Operations

191.5

152.6

639.7

592.0

Total U.S. Thermal Mining Operations

663.8

686.2

2,538.1

2,817.8

Corporate and Other

1.2

86.6

80.5

111.8

Total

$

1,117.4

$

1,397.1

$

4,623.4

$

5,581.8

Total Reporting Segment Costs Summary (In Millions) ⁽¹⁾

Seaborne Thermal Mining Operations

$

167.5

$

187.8

$

642.3

$

647.2

Seaborne Metallurgical Mining Operations

188.2

273.2

892.9

1,111.6

North Goonyella Equipment & Development Costs

16.9

49.0

77.6

58.0

Seaborne Metallurgical Mining Operations, Excluding North Goonyella Equipment & Development Costs

171.3

224.2

815.3

1,053.6

Powder River Basin Mining Operations

251.3

280.5

1,007.5

1,140.3

Midwestern U.S. Mining Operations

116.4

160.0

539.0

655.8

Western U.S. Mining Operations

102.1

101.6

409.0

446.6

Total U.S. Thermal Mining Operations

469.8

542.1

1,955.5

2,242.7

Corporate and Other

31.1

28.3

73.5

115.2

Total

$

856.6

$

1,031.4

$

3,564.2

$

4,116.7

Other Supplemental Financial Data (In Millions)

Adjusted EBITDA - Seaborne Thermal Mining Operations

$

83.5

$

137.5

$

329.4

$

452.0

Adjusted EBITDA - Seaborne Metallurgical Mining Operations

13.2

25.8

140.2

441.4

North Goonyella Equipment & Development Costs

16.9

49.0

77.6

58.0

Adjusted EBITDA - Seaborne Metallurgical Mining Operations, Excluding North Goonyella Equipment & Development Costs

30.1

74.8

217.8

499.4

Adjusted EBITDA - Powder River Basin Mining Operations

73.9

59.8

221.2

284.5

Adjusted EBITDA - Midwestern U.S. Mining Operations

30.7

33.3

130.7

145.2

Adjusted EBITDA - Western U.S. Mining Operations

89.4

51.0

230.7

145.4

Adjusted EBITDA - Total U.S. Thermal Mining Operations

194.0

144.1

582.6

575.1

Middlemount ⁽²⁾

(4.9)

8.1

(9.8)

51.1

Resource Management Results ⁽³⁾

2.2

1.9

8.2

44.7

Selling and Administrative Expenses

(37.2)

(38.4)

(145.0)

(158.1)

Transaction Costs Related to Business Combinations and Joint Ventures

(11.8)

(4.9)

(21.6)

(7.4)

Other Operating Costs, Net ⁽⁴⁾

(34.1)

(0.4)

(46.9)

(19.5)

Adjusted EBITDA ⁽¹⁾

$

204.9

$

273.7

$

837.1

$

1,379.3

Note: See footnote explanations on following page

Supplemental Financial Data (Unaudited)

For the Quarters and Years Ended Dec. 31, 2019 and 2018

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

Revenues per Ton - Mining Operations ⁽⁵⁾

Seaborne Thermal

$

45.97

$

58.80

$

49.69

$

57.58

Seaborne Metallurgical

104.62

131.89

127.62

141.06

Powder River Basin

11.81

11.35

11.37

11.84

Midwestern U.S.

39.95

42.53

41.90

42.44

Western U.S.

97.86

43.26

53.48

40.20

Total U.S. Thermal

20.00

18.03

18.66

18.31

Costs per Ton - Mining Operations ⁽⁵⁾⁽⁶⁾

Seaborne Thermal

$

30.68

$

33.91

$

32.84

$

33.90

Seaborne Metallurgical

97.69

120.57

110.30

100.97

North Goonyella Equipment & Development Costs

8.78

21.62

9.59

5.27

Seaborne Metallurgical, Excluding North Goonyella Equipment & Development Costs

88.91

98.95

100.71

95.70

Powder River Basin

9.13

9.36

9.32

9.47

Midwestern U.S.

31.61

35.21

33.72

34.75

Western U.S.

52.13

28.80

34.19

30.33

Total U.S. Thermal

14.15

14.24

14.38

14.57

Adjusted EBITDA Margin per Ton - Mining Operations ⁽⁵⁾⁽⁶⁾

Seaborne Thermal

$

15.29

$

24.89

$

16.85

$

23.68

Seaborne Metallurgical

6.93

11.32

17.32

40.09

North Goonyella Equipment & Development Costs

8.78

21.62

9.59

5.27

Seaborne Metallurgical, Excluding North Goonyella Equipment & Development Costs

15.71

32.94

26.91

45.36

Powder River Basin

2.68

1.99

2.05

2.37

Midwestern U.S.

8.34

7.32

8.18

7.69

Western U.S.

45.73

14.46

19.29

9.87

Total U.S. Thermal

5.85

3.79

4.28

3.74

(1)

Total Reporting Segment Costs and Adjusted EBITDA are non-GAAP financial measures. Refer to the "Reconciliation of Non-GAAP Financial Measures" section in this document for definitions and reconciliations to the most comparable measures under U.S. GAAP.

(2)

We account for our 50% equity interest in Middlemount Coal Pty Ltd. (Middlemount), which owns the Middlemount Mine, under the equity method. Middlemount's standalone results exclude the impact of related changes in deferred tax asset valuation allowance and reserves and amortization of basis difference recorded by the company in applying the equity method. Middlemount's standalone results include (on a 50% attributable basis):

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

(In Millions)

Tons sold

0.3

0.6

1.5

2.1

Depreciation, depletion and amortization and asset retirement obligation expenses

$

7.8

$

3.1

$

23.1

$

14.9

Net interest expense

2.7

3.9

9.1

13.9

Income tax (benefit) provision

(5.5)

2.6

(7.1)

18.0

(3)

Includes gains (losses) on certain surplus coal reserve and surface land sales, property management costs and revenues, the Q3 2018 gain of $20.5 million on the sale of surplus coal resources associated with the Millennium Mine and the Q1 2018 gain of $20.6 million on the sale of certain surplus land assets in Queensland's Bowen Basin.

(4)

Includes trading and brokerage activities, costs associated with post-mining activities, certain coal royalty expenses, minimum charges on certain transportation-related contracts, restructuring charges and the Q1 2018 gain of $7.1 million recognized on the sale of our interest in the Red Mountain Joint Venture.

(5)

Revenues per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton are metrics used by management to measure each of our mining segment's operating performance. Revenues per Ton and Adjusted EBITDA Margin per Ton are equal to revenues by segment and Adjusted EBITDA by segment, respectively, divided by segment tons sold. Costs per Ton is equal to Revenues per Ton less Adjusted EBITDA Margin per Ton. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the mining segment level. We consider all measures reported on a per ton basis to be operating/statistical measures; however, we include reconciliations of the related non-GAAP financial measures (Adjusted EBITDA and Total Reporting Segment Costs) in the "Reconciliation of Non-GAAP Financial Measures" section in this document.

(6)

Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring charges; asset impairment; provision for North Goonyella equipment loss and related insurance recovery; amortization of fresh start reporting adjustments related to take-or-pay contract-based intangibles; and certain other costs related to post-mining activities.

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Condensed Consolidated Balance Sheets

As of Dec. 31, 2019 and 2018

(Dollars In Millions)

(Unaudited)

Dec. 31, 2019

Dec. 31, 2018

Cash and Cash Equivalents

$

732.2

$

981.9

Accounts Receivable, Net

329.5

450.4

Inventories

331.5

280.2

Other Current Assets

220.7

243.1

Total Current Assets

1,613.9

1,955.6

Property, Plant, Equipment and Mine Development, Net

4,679.1

5,207.0

Operating Lease Right-of-Use Assets

82.4

—

Investments and Other Assets

139.1

212.6

Deferred Income Taxes

28.3

48.5

Total Assets

$

6,542.8

$

7,423.7

Current Portion of Long-Term Debt

$

18.3

$

36.5

Accounts Payable and Accrued Expenses

957.0

1,022.0

Total Current Liabilities

975.3

1,058.5

Long-Term Debt, Less Current Portion

1,292.5

1,330.5

Deferred Income Taxes

28.8

9.7

Asset Retirement Obligations

654.1

686.4

Accrued Postretirement Benefit Costs

593.4

547.7

Operating Lease Liabilities, Less Current Portion

52.8

—

Other Noncurrent Liabilities

273.4

339.3

Total Liabilities

3,870.3

3,972.1

Common Stock

1.4

1.4

Additional Paid-in Capital

3,351.1

3,304.7

Treasury Stock

(1,367.3)

(1,025.1)

Retained Earnings

597.0

1,074.5

Accumulated Other Comprehensive Income

31.6

40.1

Peabody Energy Corp. Stockholders' Equity

2,613.8

3,395.6

Noncontrolling Interests

58.7

56.0

Total Stockholders' Equity

2,672.5

3,451.6

Total Liabilities and Stockholders' Equity

$

6,542.8

$

7,423.7

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Quarters and Years Ended Dec. 31, 2019 and 2018

(Dollars In Millions)

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

Cash Flows From Operating Activities

Net Cash Provided By Continuing Operations

$

127.6

$

233.1

$

705.4

$

1,516.9

Net Cash Used in Discontinued Operations

(2.8)

(4.2)

(28.0)

(27.2)

Net Cash Provided By Operating Activities

124.8

228.9

677.4

1,489.7

Cash Flows From Investing Activities

Additions to Property, Plant, Equipment and Mine Development

(102.6)

(114.5)

(285.4)

(301.0)

Changes in Accrued Expenses Related to Capital Expenditures

5.7

7.1

0.1

0.1

Federal Coal Lease Expenditures

—

—

—

(0.5)

Insurance Proceeds Attributable to North Goonyella Equipment Losses

—

—

23.2

—

Proceeds from Disposal of Assets, Net of Receivables

2.4

7.4

30.0

76.4

Amount Attributable to Acquisition of Shoal Creek Mine

—

(387.4)

(2.4)

(387.4)

Contributions to Joint Ventures

(92.7)

(117.1)

(419.1)

(475.3)

Distributions from Joint Ventures

92.1

128.7

408.8

483.7

Advances to Related Parties

(14.8)

(8.2)

(27.3)

(13.8)

Cash Receipts from Middlemount Coal Pty Ltd

—

25.6

14.7

106.7

Investment in Equity Securities

(3.0)

—

(3.0)

(10.0)

Other, Net

(0.8)

6.6

(0.9)

3.8

Net Cash Used In Investing Activities

(113.7)

(451.8)

(261.3)

(517.3)

Cash Flows From Financing Activities

Repayments of Long-Term Debt

(47.2)

(12.0)

(71.1)

(85.0)

Payment of Debt Issuance and Other Deferred Financing Costs

—

—

(6.4)

(21.2)

Common Stock Repurchases

(29.7)

(135.1)

(329.9)

(834.7)

Repurchase of Employee Common Stock Relinquished for Tax Withholding

—

—

(12.3)

(14.5)

Dividends Paid

(14.2)

(15.0)

(258.1)

(59.6)

Distributions to Noncontrolling Interests

(0.1)

—

(23.5)

(10.3)

Other, Net

(0.1)

—

—

0.1

Net Cash Used In Financing Activities

(91.3)

(162.1)

(701.3)

(1,025.2)

Net Change in Cash, Cash Equivalents and Restricted Cash

(80.2)

(385.0)

(285.2)

(52.8)

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

812.4

1,402.4

1,017.4

1,070.2

Cash, Cash Equivalents and Restricted Cash at End of Period

$

732.2

$

1,017.4

$

732.2

$

1,017.4

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

For the Quarters and Years Ended Dec. 31, 2019 and 2018

(Dollars In Millions)

Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance and lenders to measure our ability to incur and service debt. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance

and may not be comparable to similarly-titled measures presented by other companies.

Quarter Ended

Year Ended

Dec.

Dec.

Dec.

Dec.

2019

2018

2019

2018

(Loss) Income from Continuing Operations, Net of Income Taxes

$

(290.2)

$

233.5

$

(188.3)

$

645.7

Depreciation, Depletion and Amortization

121.6

175.9

601.0

679.0

Asset Retirement Obligation Expenses

13.8

15.1

58.4

53.0

Gain on Formation of United Wambo Joint Venture

(48.1)

—

(48.1)

—

Asset Impairment

250.2

—

270.2

—

Provision for North Goonyella Equipment Loss

58.5

17.1

83.2

66.4

North Goonyella Insurance Recovery - Equipment ⁽¹⁾

—

—

(91.1)

—

Changes in Deferred Tax Asset Valuation Allowance and Reserves and Amortization of Basis Difference Related to Equity Affiliates

(19.1)

3.8

(18.8)

(18.3)

Interest Expense

36.8

36.5

144.0

149.3

Loss on Early Debt Extinguishment

0.2

—

0.2

2.0

Interest Income

(4.5)

(9.3)

(27.0)

(33.6)

Net Mark-to-Market Adjustment on Actuarially Determined Liabilities

67.4

(125.5)

67.4

(125.5)

Reorganization Items, Net

—

—

—

(12.8)

Unrealized Losses (Gains) on Economic Hedges

2.0

(54.6)

(42.2)

(18.3)

Unrealized (Gains) Losses on Non-Coal Trading Derivative Contracts

(1.0)

(0.7)

(1.2)

0.7

Fresh Start Take-or-Pay Contract-Based Intangible Recognition

(2.7)

(5.2)

(16.6)

(26.7)

Income Tax Provision (Benefit)

20.0

(12.9)

46.0

18.4

Adjusted EBITDA ⁽²⁾

$

204.9

$

273.7

$

837.1

$

1,379.3

Operating Costs and Expenses

$

825.1

$

1,021.5

$

3,536.6

$

4,071.4

Unrealized Gains (Losses) on Non-Coal Trading Derivative Contracts

1.0

0.7

1.2

(0.7)

Fresh Start Take-or-Pay Contract-Based Intangible Recognition

2.7

5.2

16.6

26.7

North Goonyella Insurance Recovery - Cost Recovery and Business Interruption ⁽¹⁾

—

—

(33.9)

—

Net Periodic Benefit Costs, Excluding Service Cost

4.8

4.5

19.4

18.1

Restructuring Charges (Benefit)

23.0

(0.5)

24.3

1.2

Total Reporting Segment Costs ⁽³⁾

$

856.6

$

1,031.4

$

3,564.2

$

4,116.7

Net Cash Provided By Operating Activities

$

124.8

$

228.9

$

677.4

$

1,489.7

Net Cash Used In Investing Activities

(113.7)

(451.8)

(261.3)

(517.3)

Add Back: Amount Attributable to Acquisition of Shoal Creek Mine

—

387.4

2.4

387.4

Free Cash Flow ⁽⁴⁾

$

11.1

$

164.5

$

418.5

$

1,359.8

(1)

We recorded a $125.0 million insurance recovery during the year ended December 31, 2019 related to losses incurred at our North Goonyella Mine. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to total equipment losses recognized at the time of the insurance recovery settlement, which consisted of $24.7 million and $66.4 million recognized during the years ended December 31, 2019 and 2018, respectively. The remaining $33.9 million, applicable to incremental costs and business interruption losses, is included in Adjusted EBITDA for the year ended December 31, 2019.

(2)

Adjusted EBITDA is defined as (loss) income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses, depreciation, depletion and amortization and reorganization items, net. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of our segment's operating performance as displayed in the reconciliation above. Adjusted EBITDA is used by management as the primary metric to measure each of our segment's operating performance.

(3)

Total Reporting Segment Costs is defined as operating costs and expenses adjusted for the discrete items that management excluded in analyzing each of our segment's operating performance as displayed in the reconciliation above. Total Reporting Segment Costs is used by management as a metric to measure each of our segment's operating performance.

(4)

Free Cash Flow is defined as net cash provided by operating activities less net cash used in investing activities and excludes cash outflows related to business combinations. Free Cash Flow is used by management as a measure of our financial performance and our ability to generate excess cash flow from our business operations.

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

As of Dec. 31, 2019

(Dollars In Millions)

Note: Management believes that non-GAAP performance measures are used by investors to measure our operating performance and lenders to measure our ability to incur and service debt. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

(Unaudited)

Dec. 31, 2019

Current Portion of Long-Term Debt

$

18.3

Long-Term Debt, Less Current Portion

1,292.5

Less: Cash and Cash Equivalents

(732.2)

Net Debt ⁽¹⁾

$

578.6

(1)

Net Debt is defined as current portion of long-term debt plus long-term debt, less current portion less cash and cash equivalents. Net Debt is reviewed by management as an indicator of our overall financial flexibility, capital structure and leverage.

This information is intended to be reviewed in conjunction with the company's filings with the SEC.

Segment Performance

Segment

Volume
(millions of
short tons)

Contracted
Pricing per
Short Ton

Average Cost
per Short Ton

PRB – Priced

~96

$11.13

~$9.70

Other U.S. Thermal – Priced

~20

$37

~$31.75

Seaborne Thermal (Export) – Priced

~3.2

~$65

~$32

Seaborne Thermal (Export) – Total

~11.5

Seaborne Thermal (Domestic)

~7.7

Seaborne Metallurgical

~8.3

~$95

Other Annual Financial Metrics ($ in 4millions)

SG&A

~$135

DD&A

~$425

Net Cash Interest Payments

~$110

Interest Expense (Including Non-Cash)

~$135

Capital Expenditures

~$250

ARO Cash Spend

~$65

Supplemental Pricing Information

U.S. Thermal

PRB and Other U.S. Thermal volumes reflect volumes priced as of Dec. 31, 2019. Peabody has the flexibility to increase volumes should demand warrant.

Seaborne Thermal

~65% of Peabody's annual export seaborne thermal sales realize the NEWC index price with the remaining 35% realizing the API 5 price. Peabody's 2020 priced position reflects a combination of NEWC and API 5 quality in USD per short ton.

Seaborne Metallurgical

On average, Peabody's total metallurgical sales realize ~75% of the premium hard-coking coal index price. Peabody's total metallurgical sales are expected to be comprised of ~40% hard-coking coal and ~60% PCI.

Note: Seaborne thermal costs reflect the weighted average cost for both export and domestic volumes.

Certain forward-looking measures and metrics presented are non-GAAP financial and operating/statistical measures. Due to the volatility and variability of certain items needed to reconcile these measures to their nearest GAAP measure, no reconciliation can be provided without unreasonable cost or effort.