$1 Billion Share
Repurchase Authorization
Amendment to Surety
Program
ST.
LOUIS, April 17, 2023 /PRNewswire/ -- Peabody
(NYSE:BTU) today announced that its Board of Directors ("Board")
has approved a new shareholder return framework which includes a
share repurchase plan, a fixed quarterly cash dividend and a
variable quarterly cash dividend component. The Board also
approved a new share repurchase program authorizing repurchases of
up to $1.0 billion of BTU common
stock. Additionally, Peabody amended its surety agreement to
limit collateral exposure and remove other restrictions.
Peabody plans to return to shareholders at least 65 percent of
annual Available Free Cash Flow (AFCF) retroactive to January 1, 2023. AFCF is defined as
quarterly operating cash flow minus investing cash flow;
distributions to noncontrolling interests; plus/minus changes to
restricted cash and collateral arrangements (excluding one-time
effects of the recent surety agreement amendment) and other
anticipated expenditures. Peabody expects to launch the
shareholder return program in the second quarter of 2023, following
the Company's announcement of first quarter earnings. The
balance of AFCF is expected to be allocated to value enhancing
growth projects, repurchase of potentially dilutive securities,
additional shareholder returns and capital preservation.
"With the achievement of our target to eliminate all senior
secured debt and fully pre-fund estimated final reclamation costs,
strong execution of operating plans and favorable market conditions
for our products, we are pleased to announce our program to return
value to shareholders," said Peabody President and Chief Executive
Officer Jim Grech. "These
actions allow us to return a designated portion of our cash flow to
shareholders while reinvesting in our long-term future and
maintaining a strong balance sheet, underpinning Peabody's
objective to be the coal producer of choice with an unmatched
opportunity to return free cash flow to shareholders."
Peabody anticipates the shareholder return program will include
a regular quarterly cash dividend of $0.075 per share. First half 2023 returns
are expected to include the regular quarterly cash dividend with
the remaining 65 percent of AFCF to be returned to shareholders
exclusively through share repurchases. Peabody plans to
transition to a more balanced shareholder return program of fixed
quarterly cash dividends, variable dividends and share repurchases
in the second half of 2023. All shareholder returns remain at
the Board's discretion.
Peabody amended the agreement with the providers of its
approximately $1.3 billion surety
program to establish a combined collateral limit of $722 million or 56 percent of total bonded
amount, complete pre-funding of the full estimated cost of final
reclamation of $753 million, remove
all restrictions on shareholder returns (subject to certain
liquidity requirements1) and extend the agreement
through December 31, 2026.
"The amended agreement with our surety partners ensures that all
Peabody lands are rightfully restored for future generations, and
further strengthens our financial outlook by removing significant
contingent collateral requirements through 2026," said Chief
Financial Officer Mark Spurbeck.
"This completes our immediate balance sheet restoration
objectives and we are well positioned to enhance stockholder value
while preserving our financial resiliency through future market
cycles."
At no time during the duration of the amended surety agreement
will collateral exceed the agreed limit, subject to minimum
liquidity1 and net leverage2
requirements. Peabody also terminated the bank letter of
credit facility which was previously used primarily for surety
collateral, further reducing interest costs and increasing
financial flexibility.
Peabody (NYSE: BTU) is a leading coal producer, providing
essential products for the production of affordable, reliable
energy and steel. Our commitment to sustainability underpins
everything we do and shapes our strategy for the future. For
further information, visit PeabodyEnergy.com.
Contact:
Karla
Kimrey
314.342.7890
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the securities laws. Forward-looking statements can
be identified by the fact that they do not relate strictly to
historical or current facts. They often include words or variation
of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "projects," "forecasts,"
"targets," "would," "will," "should," "goal," "could" or "may" or
other similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events, or results. All statements that address
operating performance, events, or developments that may occur in
the future are forward-looking statements, including statements
regarding the shareholder return framework, execution of the
Company's operating plans, market conditions for the Company's
products, reclamation obligations, financial outlook, and liquidity
requirements. All forward-looking statements speak only as of the
date they are made and reflect Peabody's good faith beliefs,
assumptions, and expectations, but they are not guarantees of
future performance or events. Furthermore, Peabody disclaims any
obligation to publicly update or revise any forward-looking
statement, except as required by law. By their nature,
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
suggested by the forward-looking statements. Factors that might
cause such differences include, but are not limited to, a variety
of economic, competitive, and regulatory factors, many of which are
beyond Peabody's control, including the that are described in
Peabody's Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2022, and other factors that Peabody may
describe from time to time in other filings with the SEC. You may
get such filings for free at Peabody's website
at www.peabodyenergy.com. You should understand that it
is not possible to predict or identify all such factors and,
consequently, you should not consider any such list to be a
complete set of all potential risks or uncertainties.
-------------------------------------
1 Liquidity as of the last day of any fiscal quarter
must be equal to or greater than (a) $400,000,000, or (b) the difference in the total
penal sum of all Surety Bonds less total cash or letter of credit
collateral held by all Sureties, whichever is greater.
2 Net Leverage Ratio is defined as: (i) the
ratio of funded indebtedness (excluding, for the avoidance of
doubt, 50% of any hybrid instruments that can be settled with
equity) of Peabody and its subsidiaries (less cash and cash
equivalents, and as reported on Peabody's balance sheet) taken as a
whole to Adjusted EBITDA as set forth in Peabody's quarterly Form
10-Q and annual Form 10-K, as applicable of Peabody and its
subsidiaries taken as a whole as of the last day of any quarter
exceeds 1.50 to 1.00 for the twelve-month period then ended for
which financial statements are available.
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SOURCE Peabody