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target the best markets, with a filter that includes strategic fit, value consideration, <br />growth and cash requirements as the company further emphasizes its core mining <br />assets in the PRB, Illinois Basin and Australia. <br />OUTLOOK <br />Peabody has lowered 2016 U.S. sales guidance by 18 to 28 million tons below 2015 <br />levels. As a result, projected 2016 U.S. production is now fully priced, with 2017 production 35 <br />to 45 percent unpriced based on targeted 2016 production levels. After incorporating deferrals <br />to later periods and a change in customer mix, Peabody now has 116 million tons of PRB priced <br />for 2016 delivery at an average of $13.30 per ton. <br />2016 U.S. revenues and costs per ton targets primarily reflect a reduced proportion of <br />PRB sales compared to 2015. In the PRB, the company is working to optimize production <br />levels and mix at the North Antelope Rochelle Mine to maximize margins. 2016 guidance <br />includes the contributions from mines in Colorado and New Mexico, for which a sales <br />agreement is in place. <br />In Australia, Peabody is lowering targeted metallurgical coal production levels in 2016 to <br />reflect operational changes made in 2015, which is expected to result in lower PCI sales. The <br />company also plans to place the Burton Mine on care and maintenance by the end of 2016. <br />Peabody expects first quarter Adjusted EBITDA to reflect current reduced seaborne coal <br />pricing, lower PRB volumes, the impact of planned longwall moves at the Wambo and <br />Twentymile mines, and the realization of fuel and currency hedges that are expected to improve <br />each quarter as the year progresses. While cost improvements continue to remain a priority for <br />Peabody, current pricing levels are a strong headwind. The company also expects to have an <br />approximately $70 million benefit to continuing operations from the recently amended 2013 <br />agreement with the United Mine Workers of America. <br />2016 Guidance <br />Sales Volumes (tons in millions <br />U.S. 150-160 <br />Australia 34-36 <br />Trading & Brokerage 11-14 <br />Total 195-210 <br />U.S. Operations <br />Revenues Per Ton $19.65 — $19.95 <br />Costs Per Ton $14.70 — $15.00 <br />Australia Operations <br />Metallurgical Coal Sales 14 — 15 million tons <br />Export Thermal Coal Sales 12 — 13 million tons <br />Domestic Thermal Coal Sales —8 million tons <br />Costs Per Ton $45—$48 <br />Selling & Administrative $145 — $155 million <br />Expenses <br />