U.S. Coal Demand and Peabody Strategic Overview
Reconciliation of Non-GAAP Measures: Definitions
(1) Operating Profit is a non-GAAP measure defined as income (loss) from continuing operations before deducting net interest expense, income taxes, net periodic
benefit costs, excluding service cost and reorganization items, net. Operating Profit is used by management as one of the primary metrics to measure our operating
performance. Management also believes non-GAAP performance measures are used by investors to measure our operating performance and lenders to measure our
ability to incur and service debt.
(2) Adjusted EBITDA is a non-GAAP measure defined as income (loss) 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 the segments' operating performance as displayed in the reconciliation. Adjusted EBITDA is used by management as one of the
primary metrics to measure our operating performance. Management also believes non-GAAP performance measures are used by investors to measure our operating
performance and lenders to measure our ability to incur and service debt.
(3) Common Equity is a non-GAAP measure defined as total stockholders' equity less preferred stock.
(4) Operating Margin is a non-GAAP measure defined as Operating Profit divided by revenues. Operating Margin is used by management as one of the metrics to
measure our operating performance.
(5) Adjusted EBITDA Margin is a non-GAAP measure defined as Adjusted EBITDA divided by revenues. Adjusted EBITDA Margin is used by management as one of the
metrics to measure our operating performance.
(6) Profit Margin is a non-GAAP measure defined as net income divided by revenues. Profit Margin is used by management as one of the metrics to measure our
operating performance.
(7) Return on Common Equity is a non-GAAP measure defined as net income attributable to common stockholders divided by average Common Equity. While
management does not internally use Return on Common Equity as a means to measure performance, management believes it is comparable to return on invested
capital, which management does use internally as a means to measure its ability to generate a return on invested capital.
Note: The above metrics are not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly titled measures
presented by other companies.
Peabody
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