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New factors may emerge or changes to these risks could occur that could materially affect our business.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Risks Associated with Our Emergence from the Chapter 11 Cases
−Removed: As a result of our emergence from our Chapter 11 Cases, our historical financial information is not indicative of our future financial performance.
−Removed: Our capital structure was significantly altered through the implementation of our Plan.
−Removed: As a result, we are subject to the fresh start reporting rules required under the Financial Accounting Standards Board ASC Topic 852, Reorganizations.
−Removed: Under applicable fresh start reporting rules, our assets and liabilities were adjusted to fair values and our accumulated deficit was restated to zero.
−Removed: Accordingly, our consolidated financial condition and results of operations from and after April 2, 2017 are not directly comparable to the financial condition or results of operations reflected in our consolidated historical financial statements.
Risks Associated with Our Operations
Our profitability depends upon the prices we receive for our coal.
−Removed: We operate in a competitive and highly regulated industry that has previously experienced strong headwinds.
−Removed: Current pricing levels of both seaborne and domestic coal products may not be sustainable in the future.
−Removed: If coal prices decrease our operating results and profitability and value of our coal reserves could be materially and adversely affected.
+Added: We operate in a competitive and highly regulated industry that has experienced strong headwinds.
+Added: Depressed coal prices have reduced our revenues, and sustained prices at current levels or further declines in coal prices will adversely affect our operating results and financial condition.
+Added: Further declines in coal prices will adversely affect the value of our coal reserves.
Coal prices are dependent upon factors beyond our control, including:
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• the proximity, capacity and cost of transportation and terminal facilities;
−Removed: the relative price of natural gas and other energy sources used to generate electricity;
• competition with and the availability, quality and price of coal and alternative fuels, including natural gas, fuel oil, nuclear, hydroelectric, wind, biomass and solar power;
+Added: • governmental regulations and taxes, including tariffs or other trade restrictions as well as those establishing air emission standards for coal-fueled power plants or mandating or subsidizing increased use of electricity from renewable energy sources;
• the strength of the global economy;
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• weather patterns, severe weather and natural disasters;
−Removed: governmental regulations and taxes, including tariffs or other trade restrictions as well as those establishing air emission standards for coal-fueled power plants or mandating or subsidizing increased use of electricity from renewable energy sources;
• regulatory, administrative and judicial decisions, including those affecting future mining permits and leases;
• technological developments, including those related to alternative energy sources, those intended to convert coal-to-liquids or gas and those aimed at capturing, using and storing carbon dioxide.
−Removed: thermal coal, our approach is to selectively renew, or enter into new, long-term supply agreements when we can do so at prices we believe are favorable.
−Removed: For seaborne coal, we negotiate pricing for metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
Thermal coal accounted for the majority of our coal sales by volume during 2020 and 2019.
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Gas-fueled generation has displaced and is expected to continue to displace coal-fueled generation (particularly from older, less efficient coal-fueled generation units) as current and potentially increasing regulatory costs and other factors impact the operating decisions of electric power generators.
−Removed: In addition, some electric power generators are making uneconomic decisions to close coal-fueled generation units given ongoing pressure to shift away from coal generation.
+Added: In addition, some electric power generators have made decisions to close coal-fueled generation units given ongoing pressure to shift away from coal generation.
Many of the new power plants in the U.S.
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Any further reduction in the amount of coal consumed by electric power generators could reduce the volume and price of coal that we mine and sell.
−Removed: Lower demand for metallurgical coal by steel producers would reduce our revenues and could further reduce the price of our metallurgical coal.
We produce metallurgical coal that is used in the global steel industry.
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Lower demand for metallurgical coal in international markets could reduce the amount of metallurgical coal that we sell and the prices that we receive for it, thereby reducing our revenues and adversely impacting our earnings and the value of our coal reserves.
+Added: Peabody Energy Corporation 2020 Form 10-K
The balance between coal demand and supply, factoring in demand and supply of closely related and competing segments such as natural gas, both domestically and internationally, could materially reduce coal prices and therefore materially reduce our revenues and profitability.
−Removed: In the U.S., we compete with other fuel sources used for electricity generation, such as natural gas and renewables.
+Added: We compete with other fuel sources used for electricity generation, such as natural gas and renewables.
Our seaborne products compete with other producers as well as other fuel sources.
−Removed: Declines in the price of natural gas, or continued low natural gas prices, could cause demand for coal to decrease and adversely affect the price of coal.
+Added: Declines in the price of natural gas could cause demand for coal to decrease and adversely affect the price of coal.
Sustained periods of low natural gas prices or low prices for other fuels may also cause utilities to phase out or close existing coal-fueled power plants or reduce construction of new coal-fueled power plants.
−Removed: In the United States, no new coal-fueled power plants are being constructed or reopened after closure.
+Added: In the U.S., no new coal-fueled power plants are being constructed or reopened after closure.
These closures could have a material adverse effect on demand and prices for our coal, thereby reducing our revenues and materially and adversely affecting our business and results of operations.
−Removed: If a substantial number of our long-term coal supply agreements terminate, or if the pricing, volumes or other elements of those agreements materially adjust, our revenues and operating profits could suffer if we are unable to find alternate buyers willing to purchase our coal on comparable terms to those in our contracts.
+Added: If a substantial number of our long-term coal supply agreements, including those with our largest customers, terminate, or if the pricing, volumes or other elements of those agreements materially adjust, our revenues and operating profits could suffer if we are unable to find alternate buyers willing to purchase our coal on comparable terms to those in our contracts.
Most of our sales are made under coal supply agreements, which are important to the stability and profitability of our operations.
The execution of a satisfactory coal supply agreement is frequently the basis on which we undertake the development of coal reserves required to be supplied under the contract, particularly in the U.S.
+Added: For the year ended December 31, 2020, we derived 32% of our revenues from coal supply agreements from our five largest customers.
+Added: Those five customers were supplied primarily from 28 coal supply agreements (excluding trading and brokerage transactions) expiring at various times from 2021 to 2026.
Many of our coal supply agreements contain provisions that permit the parties to adjust the contract price upward or downward at specified times.
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Moreover, some of these agreements allow our customers to terminate their contracts in the event of changes in regulations affecting our industry that restrict the use or type of coal permissible at the customer’s plant or increase the price of coal beyond specified limits.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
+Added: On an ongoing basis, we discuss the extension of existing agreements or entering into new long-term agreements with various customers, but these negotiations may not be successful and these customers may not continue to purchase coal from us under long-term supply agreements.
The operating profits we realize from coal sold under supply agreements depend on a variety of factors.
−Removed: In addition, price adjustment and other provisions may increase our exposure to short-term coal price volatility provided by those contracts.
+Added: In addition, price adjustment and other contract provisions may increase our exposure to short-term coal price volatility.
If a substantial portion of our coal supply agreements were modified or terminated, we could be materially adversely affected to the extent that we are unable to find alternate buyers for our coal at the same level of profitability.
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As a result, we cannot predict the future strength of the coal industry overall or by mining region and cannot provide assurance that we will be able to replace existing long-term coal supply agreements at the same prices or with similar profit margins when they expire.
−Removed: The loss of, or significant reduction in, purchases by our largest customers could adversely affect our revenues.
−Removed: For the year ended December 31, 2019, we derived 33% of our total revenues from our five largest customers.
−Removed: Those five customers were supplied primarily from 43 coal supply agreements (excluding trading transactions) expiring at various times from 2020 to 2025.
−Removed: On an ongoing basis, we discuss the extension of existing agreements or entering into new long-term agreements with various customers, but these negotiations may not be successful and these customers may not continue to purchase coal from us under long-term supply agreements.
−Removed: If a number of these customers significantly reduce their purchases of coal from us, or if we are unable to sell coal to them on terms as favorable to us as the terms under our current agreements, our financial condition and results of operations could suffer materially.
In addition, our revenue could be adversely affected by a decline in customer purchases (including contractually obligated purchases) due to lack of demand and oversupply, cost of competing fuels and environmental and other governmental regulations.
−Removed: One of our five largest customers, the Navajo Generating Station, was exclusively served by our Kayenta Mine, included in our Western U.S.
−Removed: Mining operations, that had no other customers.
−Removed: During the third quarter of 2019, the Kayenta Mine shipped its final tons.
−Removed: The mine’s approximate Adjusted EBITDA contribution, approximate depreciation, depletion and amortization and asset retirement obligation expense, and tons of coal sold are presented in the table below for the respective periods.
−Removed: Depreciation, depletion and amortization and asset retirement obligation expense for the Successor periods are not comparable to those of the Predecessor periods due to the revaluation of the Company’s property, plant, equipment, and mine development to fair value in connection with fresh start reporting.
−Removed: Year Ended December 31, 2019
−Removed: Year Ended December 31, 2018
−Removed: April 2 through December 31, 2017
−Removed: January 1 through April 1, 2017
−Removed: (Dollars and tons in millions)
−Removed: Adjusted EBITDA
−Removed: Depreciation, depletion and amortization and asset retirement obligation expense
−Removed: Tons of coal sold
−Removed: Our trading and hedging activities do not cover certain risks and may expose us to earnings volatility and other risks.
−Removed: We historically entered into hedging arrangements designed primarily to manage price volatility of the Australian dollar, coal and diesel fuel.
−Removed: Currently, we primarily enter into derivative financial instruments, including financial swaps and options, designed to manage coal price volatility and increases in the Australian dollar exchange rate.
−Removed: We are currently subject to price volatility on diesel fuel utilized in our mining operations.
−Removed: We may in the future enter into hedging arrangements to manage this price risk, or other exposures.
−Removed: Some of these derivative trading instruments require us to post margin based on the value of those instruments and other credit factors.
−Removed: If the fair value of our hedge portfolio moves significantly, or if laws or regulations are passed requiring all hedge arrangements to be exchange-traded or exchange-cleared, we could be required to post additional margin, which could negatively impact our liquidity.
−Removed: Through our trading and hedging activities, we are also exposed to nonperformance and credit risk with various counterparties, including exchanges and other financial intermediaries.
−Removed: Should the counterparties to these arrangements fail to perform, we may be forced to enter into alternative arrangements, which could negatively impact our profitability and/or liquidity.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Our operating results could be adversely affected by unfavorable economic and financial market conditions.
−Removed: Our profits are affected, in large part, by industry conditions.
−Removed: Industry conditions are subject to a variety of factors beyond our control.
−Removed: A global economic recession and/or a worldwide financial and credit market disruption could have a negative impact on us and on the coal industry generally.
−Removed: If any of these conditions occur, if coal prices recede to or below levels experienced in 2015 and early 2016 for a prolonged period or if there are downturns in economic conditions, particularly in developing countries such as China and India, our business, financial condition or results of operations could be adversely affected.
−Removed: While we are focused on cost control, productivity improvements, increased contributions from our higher-margin operations and capital discipline, there can be no assurance that these actions, or any others we may take, would be sufficient in response to challenging economic and financial conditions.
−Removed: Our ability to collect payments from our customers could be impaired if their creditworthiness or contractual performance deteriorates.
−Removed: Our ability to receive payment for coal sold and delivered or for financially settled contracts will depend on the continued creditworthiness and contractual performance of our customers and counterparties.
−Removed: Our customer base has changed with deregulation in the U.S.
−Removed: as utilities have sold their power plants to their non-regulated affiliates or third parties.
−Removed: These new customers may have credit ratings that are below investment grade or are not rated.
−Removed: If deterioration of the creditworthiness of our customers occurs or if they fail to perform the terms of their contracts with us, our accounts receivable securitization program and our business could be adversely affected.
+Added: Peabody Energy Corporation 2020 Form 10-K
Risks inherent to mining could increase the cost of operating our business, and events and conditions that could occur during the course of our mining operations could have a material adverse impact on us.
−Removed: Our mining operations are subject to conditions that can impact the safety of our workforce, or delay coal deliveries or increase the cost of mining at particular mines for varying lengths of time.
+Added: Our mining operations are subject to conditions that can impact the safety of our workforce, delay coal deliveries or increase the cost of mining at particular mines for varying lengths of time.
These conditions include:
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• unforeseen delays in implementation of mining technologies that are new to our operations.
−Removed: We maintain insurance policies that provide limited coverage for some of the risks referenced above, and those insurance policies may lessen the impact associated with these risks.
+Added: We maintain insurance policies that provide limited coverage for some of the risks referenced above, which may lessen the impact associated with these risks.
However, there can be no assurance as to the amount or timing of recovery under our insurance policies in connection with losses associated with these risks.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Our North Goonyella Mine in Queensland, Australia experienced a fire in a portion of the mine during September 2018 and mining operations have been suspended since then.
−Removed: During the first quarter of 2019, we completed segmenting of the mine into multiple zones to facilitate a phased reventilation and re-entry of the mine.
−Removed: We commenced reventilation of the first zone of the mine during the second quarter of 2019 and subsequently re-entered the area in the third quarter.
−Removed: Following these activities and a detailed review and assessment of North Goonyella, we determined that due to the time, cost and required regulatory approach to ventilate and re-enter the rest of the mine, we will not pursue attempts to access certain portion of the mine through existing mine workings, but instead will move to the southern panels.
−Removed: We are currently in discussions with the Queensland Mines Inspectorate (QMI) regarding ventilation and re-entry of the second zone of the current mine configuration.
−Removed: Based on the planned approach, we expect no meaningful production from North Goonyella for three or more years.
−Removed: In 2020, we are commencing a commercial process for North Goonyella in conjunction with the existing mine development.
−Removed: The process comes in response to expressions of interest from potential strategic partners and other producers.
−Removed: Commercial outcomes could include a strategic financial partner, joint venture structure or complete sale of North Goonyella.
−Removed: Based on the success of discussions with QMI and/or progression of the commercial process being launched, we will determine the appropriate level, if any, and timing of capital expenditures.
−Removed: If after exploring all reasonable mine-planning steps focused on resuming mining activities at the North Goonyella Mine and other commercial outcomes, we determine that we are unable to extract coal from the southern panels of the mine, our results of operations, financial condition and cash flows could be materially and adversely impacted.
−Removed: In addition, the costs that may be incurred to return the mine to active operations (if the mine returns to active operations) are uncertain and could be significant.
−Removed: Refer to Item 7.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding our North Goonyella Mine.
−Removed: If transportation for our coal becomes unavailable or uneconomic for our customers, our ability to sell coal may be diminished.
−Removed: Transportation costs represent a significant portion of the total cost of coal use and the cost of transportation is a critical factor in a customer’s purchasing decision.
−Removed: Increases in transportation costs and the lack of sufficient rail and port capacity could lead to reduced coal sales.
−Removed: We depend upon rail, barge, trucking, overland conveyor and ocean-going vessels to deliver coal to our customers.
−Removed: While our coal customers typically arrange and pay for transportation of coal from the mine or port to the point of use, disruption of these transportation services because of weather-related problems, infrastructure damage, strikes, lock-outs, lack of fuel or maintenance items, underperformance of the port and rail infrastructure, congestion and balancing systems which are imposed to manage vessel queuing and demurrage, non-performance or delays by co-shippers, transportation delays or other events could temporarily impair our ability to supply coal to our customers and thus could adversely affect our results of operations.
−Removed: A decrease in the availability or increase in costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires could decrease our anticipated profitability.
−Removed: Our mining operations require a reliable supply of mining equipment, replacement parts, fuel, explosives, tires, steel-related products (including roof control materials), lubricants and electricity.
−Removed: There has been some consolidation in the supplier base providing mining materials to the coal industry, such as with suppliers of explosives in the U.S.
−Removed: and both surface and underground equipment globally, that has limited the number of sources for these materials.
−Removed: In situations where we have chosen to concentrate a large portion of purchases with one supplier, it has been to take advantage of cost savings from larger volumes of purchases and to ensure security of supply.
−Removed: If the cost of any of these inputs increased significantly, or if a source for these supplies or mining equipment were unavailable to meet our replacement demands, our profitability could be reduced or we could experience a delay or halt in our production.
−Removed: Take-or-pay arrangements within the coal industry could unfavorably affect our profitability.
+Added: Our take-or-pay arrangements could unfavorably affect our profitability.
We have substantial take-or-pay arrangements, predominately in Australia, totaling $1.2 billion, with terms ranging up to 22 years, that commit us to pay a minimum amount for rail and port commitments for the delivery of coal even if those commitments go unused.
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Also, we may not be able to utilize the amount of capacity for which we have previously paid.
−Removed: Additionally, coal companies, including us, may continue to deliver coal during times when it might otherwise be optimal to suspend operations because these take-or-pay provisions effectively convert a variable cost of selling coal to a fixed operating cost.
−Removed: We have contract-based intangible liabilities primarily consisting of unutilized capacity under port and rail take-or-pay contracts.
−Removed: Future unutilized capacity and the amortization periods related to the take-or-pay contract intangible liabilities are based upon estimates of forecasted usage.
−Removed: We anticipate that the amortization of the intangible liability, which is classified as a reduction to “Operating costs and expenses,” will extend through 2043.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: An inability of trading, brokerage, mining or freight counterparties to fulfill the terms of their contracts with us could reduce our profitability.
−Removed: In conducting our trading, brokerage and mining operations, we utilize third-party sources of coal production and transportation, including contract miners and brokerage sources, to fulfill deliveries under our coal supply agreements.
−Removed: Employee relations at mines that use contractors are the responsibility of the contractor.
−Removed: Our profitability or exposure to loss on transactions or relationships is dependent upon the reliability (including financial viability) and price of the third-party suppliers;
−Removed: our obligation to supply coal to customers in the event that weather, flooding, natural disasters or adverse geologic mining conditions restrict deliveries from our suppliers;
−Removed: our willingness to participate in temporary cost increases experienced by our third-party coal suppliers;
−Removed: our ability to pass on temporary cost increases to our customers;
−Removed: the ability to substitute, when economical, third-party coal sources with internal production or coal purchased in the market and the ability of our freight sources to fulfill their delivery obligations.
−Removed: Market volatility and price increases for coal or freight on the international and domestic markets could result in non-performance by third-party suppliers under existing contracts with us, in order to take advantage of the higher prices in the current market.
−Removed: Such non-performance could have an adverse impact on our ability to fulfill deliveries under our coal supply agreements.
+Added: Additionally, we may continue to deliver coal during times when it might otherwise be optimal to suspend operations because these take-or-pay provisions effectively convert a variable cost of selling coal to a fixed operating cost.
We may not recover our investments in our mining, exploration and other assets, which may require us to recognize impairment charges related to those assets.
−Removed: The value of our assets have from time to time been adversely affected by numerous uncertain factors, some of which are beyond our control, including unfavorable changes in the economic environments in which we operate, lower-than-expected coal pricing, technical and geological operating difficulties, an inability to economically extract our coal reserves and unanticipated increases in operating costs.
−Removed: During the year ended December 31, 2019, the Company recorded $270.2 million of impairment charges related to such factors, as further described in Note 5.
+Added: The value of our assets have from time to time been adversely affected by numerous uncertain factors, some of which are beyond our control, including unfavorable changes in the economic environments in which we operate;
+Added: declining coal-fired electricity generation;
+Added: lower-than-expected coal pricing;
+Added: technical and geological operating difficulties;
+Added: an inability to economically extract our coal reserves;
+Added: and unanticipated increases in operating costs.
+Added: During the years ended December 31, 2020 and 2019, the Company recorded $1,487.4 million and $270.2 million of impairment charges related to such factors, as further described in Note 3.
“Asset Impairment” to the accompanying consolidated financial statements.
These factors may trigger the recognition of additional impairment charges in the future, which could have a substantial impact on our results of operations.
−Removed: Because of the volatile and cyclical nature of U.S.
−Removed: and international coal markets, it is reasonably possible that our current estimates of projected future cash flows from our mining assets may change in the near term, which may result in the need for adjustments to the carrying value of our assets.
−Removed: Our ability to operate our company effectively could be impaired if we lose key personnel or fail to attract qualified personnel.
−Removed: We manage our business with a number of key personnel, the loss of whom could have a material adverse effect on us, absent the completion of an orderly transition.
−Removed: In addition, we believe that our future success will depend greatly on our continued ability to attract and retain highly skilled and qualified personnel, particularly personnel with mining experience.
−Removed: We cannot provide assurance that key personnel will continue to be employed by us or that we will be able to attract and retain qualified personnel in the future.
−Removed: Failure to retain or attract key personnel could have a material adverse effect on us.
+Added: Because of the volatile and cyclical nature of coal markets, it is reasonably possible that our current estimates of projected future cash flows from our mining assets may change in the near term, which may result in the need for adjustments to the carrying value of our assets.
We could be negatively affected if we fail to maintain satisfactory labor relations.
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Also, if we fail to maintain good relations or successfully negotiate contracts with our employees who are represented by unions, we could potentially experience labor disputes, strikes, work stoppages, slowdowns or other disruptions in production that could negatively impact our profitability.
+Added: Peabody Energy Corporation 2020 Form 10-K
We could be adversely affected if we fail to appropriately provide financial assurances for our obligations.
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As of December 31, 2020, we had $1,633.6 million of outstanding surety bonds and $437.6 million of letters of credit with third parties in order to provide required financial assurances for post-mining reclamation, workers’ compensation and other insurance obligations, coal lease-related and other obligations and performance guarantees.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Our financial assurance obligations may increase or become more costly due to a number of factors, and surety bonds and letters of credit may not be available to us, particularly in light of some banks and insurance companies’ announced unwillingness to support fossil fuel companies.
−Removed: Alternative forms of financial assurance such as self-bonding may be further restricted or terminated where currently available.
+Added: Our financial assurance obligations may increase or become more costly due to a number of factors, and surety bonds and letters of credit may not be available to us, particularly in light of some banks and insurance companies’ announced unwillingness to support thermal coal producers and other fossil fuel companies.
+Added: Alternative forms of financial assurance such as self-bonding have been severely restricted or terminated in most of the regions where our mines reside.
Our failure to retain, or inability to obtain, surety bonds, bank guarantees or letters of credit, or to provide a suitable alternative, could have a material adverse effect on us.
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• inability to provide or fund collateral for current and future third-party issuers of surety bonds, bank guarantees or letters of credit.
−Removed: Our failure to maintain adequate bonding would invalidate our mining permits and prevent mining operations from continuing, which would cast substantial doubt on our ability to continue as a going concern.
+Added: As further described in “Liquidity and Capital Resources” of Part II, Item 7.
+Added: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Company reached a surety transaction support agreement with the providers of 99% of its surety bond portfolio to resolve approximately $800 million in additional collateral demands made by the sureties.
+Added: The sureties have agreed to a standstill through December 31, 2024, during which time, the sureties will not demand any additional collateral, draw on letters of credit posted for the benefit of themselves, or cancel any existing surety bond.
+Added: Our failure to provide adequate collateral, or abide by other terms in the agreement, could invalidate the agreement and materially and adversely affect our business and results of operations.
+Added: Our failure to maintain adequate bonding would invalidate our mining permits and prevent mining operations from continuing, which could result in our inability to continue as a going concern.
Our mining operations are extensively regulated, which imposes significant costs on us, and future regulations and developments could increase those costs or limit our ability to produce coal.
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Any of these actions could have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: The possibility exists that new legislation, regulations or orders related to the environment or employee health and safety may be adopted and may materially adversely affect our mining operations, our cost structure or our customers’ ability to use coal.
+Added: Peabody Energy Corporation 2020 Form 10-K
+Added: New legislation, regulations or orders related to the environment or employee health and safety may be adopted and may materially adversely affect our mining operations, our cost structure or our customers’ ability to use coal.
New legislation or administrative regulations (or new interpretations by the relevant government of existing laws, regulations and approvals), including proposals related to the protection of the environment or the reduction of greenhouse gas emissions that would further regulate and tax the coal industry, may also require us or our customers to change operations significantly or incur increased costs.
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Liability under RCRA, CERCLA and similar state statutes is without regard to fault, and typically is joint and several, meaning that a person may be held responsible for more than its share, or even all, of the liability involved.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
We may be unable to obtain, renew or maintain permits necessary for our operations, or we may be unable to obtain, renew or maintain such permits without conditions on the manner in which we run our operations, which would reduce our production, cash flows and profitability.
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In recent years, the permitting required for coal mining has been the subject of increasingly stringent regulatory and administrative requirements and extensive litigation by environmental groups.
+Added: Additionally, our operations may be affected by sites within or near mining areas deemed to have cultural heritage significance to indigenous peoples, and our mining permits may be rescinded or modified, or our mining plans may be voluntarily adjusted, to mitigate against adverse impacts to such sites.
The costs, liabilities and requirements associated with these permitting requirements and any related opposition may be extensive and time-consuming and may delay commencement or continuation of exploration or production which would adversely affect our coal production, cash flows and profitability.
Further, required permits may not be issued or renewed in a timely fashion or at all, or permits issued or renewed may be conditioned in a manner that may restrict our ability to efficiently and economically conduct our mining activities, any of which would materially reduce our production, cash flows and profitability.
−Removed: The Corps regulates certain activities affecting navigable waters and waters of the U.S., including wetlands.
−Removed: Section 404 of the CWA requires mining companies like us to obtain Corps permits to place material in streams for the purpose of creating slurry ponds, water impoundments, refuse areas, valley fills or other mining activities.
−Removed: In recent years, the Section 404 permitting process has been subject to increasingly stringent regulatory and administrative requirements as well as a series of court challenges, which have resulted in increased costs and delays in the permitting process.
−Removed: Additionally, increasingly stringent requirements governing coal mining also are being considered or implemented under the SMCRA, the National Pollution Discharge Elimination System permit process and various other environmental programs.
−Removed: Potential future laws, regulations and policies could result in material adverse impacts on our operations, financial condition or cash flows, in view of the significant uncertainty surrounding each of these potential future laws, regulations and policies.
−Removed: Our mining operations are subject to extensive forms of taxation, which imposes significant costs on us, and future regulations and developments could increase those costs or limit our ability to produce coal competitively.
−Removed: Federal, state, provincial or local governmental authorities in nearly all countries across the global coal mining industry impose various forms of taxation, including production taxes, sales-related taxes, royalties, environmental taxes, mining profits taxes and income taxes.
−Removed: If new legislation or regulations related to various forms of coal taxation, which increase our costs or limit our ability to compete in the areas in which we sell our coal, are adopted, our business, financial condition or results of operations could be adversely affected.
+Added: Concerns about the impacts of coal combustion on global climate are increasingly leading to consequences that have affected and could continue to affect demand for our products or our securities and our ability to produce, including increased governmental regulation of coal combustion and unfavorable investment decisions by electricity generators.
+Added: Global climate issues continue to attract public and scientific attention.
+Added: Numerous reports, such as the Fourth and the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues.
+Added: In turn, increasing government attention is being paid to global climate issues and to emissions of greenhouse gases, including emissions of carbon dioxide from coal combustion by power plants.
+Added: Peabody Energy Corporation 2020 Form 10-K
+Added: The enactment of future laws, the passage of regulations, or other executive orders regarding emissions from the use of coal by the U.S., some of its states or other countries, or other actions to limit such emissions, could result in electricity generators switching from coal to other fuel sources.
+Added: Further, policies limiting available financing for the development of new coal mines or coal-fueled power stations could adversely impact the global supply and demand for coal.
+Added: The potential financial impact on us of such future laws, regulations or other policies will depend upon the degree to which any such laws or regulations force electricity generators to diminish their reliance on coal as a fuel source.
+Added: That, in turn, will depend on a number of factors, including the specific requirements imposed by any such laws, regulations or other policies, the time periods over which those laws, regulations or other policies would be phased in, the state of development and deployment of CCUS technologies as well as acceptance of CCUS technologies to meet regulations and the alternative uses for coal.
+Added: Similarly, higher-efficiency coal-fired power plants may also be an option for meeting laws or regulations related to emissions from coal use.
+Added: Several countries, including some major coal users such as China, India and Japan, included using higher-efficiency coal-fueled power plants in their plans under the Paris Agreement.
+Added: From time to time, we attempt to analyze the potential impact on the Company of as-yet-unadopted, potential laws, regulations and policies.
+Added: Such analyses require that we make significant assumptions as to the specific provisions of such potential laws, regulations and policies, which sometimes show that if implemented in the manner assumed by the analyses, the potential laws, regulations and policies could result in material adverse impacts on our operations, financial condition or cash flows.
+Added: We do not believe that such analyses reasonably predict the quantitative impact that future laws, regulations or other policies may have on our results of operations, financial condition or cash flows.
+Added: Numerous activist groups are devoting substantial resources to anti-coal activities to minimize or eliminate the use of coal as a source of electricity generation, domestically and internationally, thereby further reducing the demand and pricing for coal, and potentially materially and adversely impacting our future financial results, liquidity and growth prospects.
+Added: Several non-governmental organizations have undertaken campaigns to minimize or eliminate the use of coal as a source of electricity generation in the U.S.
+Added: and across the globe.
+Added: In an effort to stop or delay coal mining activities, activist groups have brought lawsuits challenging the issuance of individual coal leases, and challenging the federal coal leasing program more broadly.
+Added: Other lawsuits challenge historical and pending regulatory approvals, permits and processes that are necessary to conduct coal mining operations or to operate coal-fueled power plants, including so-called “sue and settle” lawsuits where regulatory authorities in the past have reached private agreements with environmental activists that often involve additional regulatory restrictions or processes being implemented without formal rulemaking.
+Added: The effect of these and other similar developments has made it more costly and difficult to maintain our business.
+Added: These cost increases and/or substantial or extended declines in the prices we receive for our coal due to these or other factors could reduce our revenue and profitability, cash flows, liquidity, and value of our coal reserves and could result in material losses.
+Added: Our trading and hedging activities do not cover certain risks and may expose us to earnings volatility and other risks.
+Added: In addition to coal price volatility, we are currently subject to price volatility on diesel fuel utilized in our mining operations and the Australian dollar.
+Added: We may in the future enter into hedging arrangements to manage these risks, or other exposures.
+Added: Some of these hedging instruments may require us to post margin based on the value of those instruments and other credit factors.
+Added: If the fair value of our hedge portfolio moves significantly, or if laws or regulations are passed requiring all hedge arrangements to be exchange-traded or exchange-cleared, we could be required to post additional margin, which could negatively impact our liquidity.
+Added: Peabody Energy Corporation 2020 Form 10-K
If the assumptions underlying our asset retirement obligations for reclamation and mine closures are materially inaccurate, our costs could be significantly greater than anticipated.
7 unchanged sentences
The resulting estimated asset retirement obligation could change significantly if actual amounts change significantly from our assumptions, which could have a material adverse effect on our results of operations and financial condition.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
Our future success depends upon our ability to continue acquiring and developing coal reserves that are economically recoverable.
3 unchanged sentences
“Properties” involves the use of certain estimates and those estimates could be inaccurate.
−Removed: Information about our reserves consists of estimates based on engineering, economic and geological data assembled and analyzed by our staff.
−Removed: Some of the factors and assumptions which impact economically recoverable coal reserve estimates include geological conditions, historical production from the area compared with production from other producing areas, the assumed effects of regulations and taxes by governmental agencies and assumptions governing future prices and future operating costs.
Actual production, revenues and expenditures with respect to our coal reserves may vary materially from estimates.
18 unchanged sentences
If we are unable to fund these activities, we may not be able to maintain or increase our existing production rates and we could be forced to change our business strategy, which could have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
+Added: Peabody Energy Corporation 2020 Form 10-K
We face numerous uncertainties in estimating our economically recoverable coal reserves and inaccuracies in our estimates could result in lower than expected revenues, higher than expected costs and decreased profitability.
19 unchanged sentences
Any material inaccuracy in our estimates related to our reserves could result in lower than expected revenues, higher than expected costs or decreased profitability which could materially and adversely affect our business, results of operations, financial position and cash flows.
−Removed: Our global operations increase our exposure to risks unique to international mining and trading operations.
−Removed: Our international platform increases our exposure to country risks, international regulatory requirements and the effects of changes in currency exchange rates.
−Removed: Some of our international activities are in developing countries where the economic strength, business practices and counterparty reputations may not be as well developed as in our U.S.
−Removed: or Australian operations.
−Removed: We are exposed to various business, political and sovereign risks, including political instability, heightened levels of corruption or fraud in certain markets, the potential for expropriation of assets, costs associated with the repatriation of earnings and the potential for unexpected changes in regulatory requirements.
−Removed: Despite our efforts to perform due diligence, screening, training and auditing of internal and external business agents, vendors, partners and customers to mitigate these risks, our results of operations, financial position or cash flows could be adversely affected by these activities.
−Removed: Our proposed joint venture with Arch may not be completed.
−Removed: On June 18, 2019, we entered into a definitive implementation agreement with Arch to establish a joint venture that will combine the respective Powder River Basin and Colorado mining operations of Peabody and Arch.
−Removed: The closing of our proposed joint venture with Arch is subject to various conditions to closing, including the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of certain other required regulatory approvals and the absence of injunctions or other legal restraints preventing the formation of the joint venture.
−Removed: These closing conditions may not be satisfied, and in that circumstance we may be unable or unwilling to complete this joint venture.
−Removed: If the closing has not occurred on or prior to June 18, 2020 and all required regulatory approvals have not been obtained, the Implementation Agreement may be terminated by either Peabody or Arch no later than June 29, 2020 following written notice and the payment by the terminating party to the non-terminating party of a termination fee of $40 million;
−Removed: provided, however, that the non-terminating party may elect to extend the Implementation Agreement until September 18, 2020.
−Removed: If the non-terminating party exercises this option to extend, the termination fee payable to the non-terminating party by the terminating party if the closing does not occur on or prior to September 18, 2020 will be reduced to $25 million.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
+Added: Additionally, our reserve estimates may be adversely affected in the future by the SEC’s recent rule amendments revising property disclosure requirements for publicly-traded mining companies.
+Added: We will be required to comply with these new rules in 2021.
Joint ventures, partnerships or non-managed operations may not be successful and may not comply with our operating standards.
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Failure by non-controlled joint venture partners or contractors to adhere to operational standards that are equivalent to ours could unfavorably affect safety results, operating costs and productivity and adversely impact our results of operations and reputation.
−Removed: The benefits that are expected to result from the proposed joint venture with Arch will depend, in part, on our ability to realize the anticipated cost synergies in the transaction, our and Arch’s ability to successfully integrate our Powder River Basin and Colorado mining operations, and our and Arch’s ability to successfully manage the joint venture on a going-forward basis.
−Removed: It is not certain that we will realize these benefits at all, and if we do, it is not certain how long it will take to achieve these benefits.
−Removed: If, for example, we are unable to achieve the anticipated cost savings, or if there are unforeseen integration costs, or if we and Arch are unable to operate the joint venture smoothly in the future, the financial performance of the joint venture may be negatively affected.
We may undertake further repositioning plans that would require additional charges.
1 unchanged sentence
These actions may result in further restructuring charges, cash expenditures and the consumption of management resources, any of which could cause our operating results to decline and may fail to yield the expected benefits.
−Removed: We could be exposed to significant liability, reputational harm, loss of revenue, increased costs or other risks if we sustain cyber-attacks or other security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us, our employees, our customers or other third-parties.
−Removed: We use digital technology to conduct our business operations and engage with our customers, vendors, employees, financial institutions and other partners.
−Removed: Our business depends on the reliable and secure operation of computer systems, network infrastructure, digital communication technologies and other information technology.
−Removed: Problems may arise in both our internally managed systems and those of third parties.
−Removed: We have implemented security protocols and systems with the intent of maintaining the physical security of our operations and protecting our and our counterparties’ confidential information and information related to identifiable individuals against unauthorized access.
−Removed: Despite such efforts, we may be subject to security breaches which could result in unauthorized access to our facilities or the information we are trying to protect.
−Removed: Unauthorized physical access to one of our facilities or electronic access to our information systems could result in, among other things, unfavorable publicity, litigation by affected parties, damage to sources of competitive advantage, disruptions to our operations, loss of customers, financial obligations for damages related to the theft or misuse of such information and costs to remediate such security vulnerabilities, any of which could have a substantial impact on our results of operations, financial condition or cash flows.
+Added: Peabody Energy Corporation 2020 Form 10-K
+Added: Our business, results of operations, financial condition and prospects could be materially and adversely affected by the recent COVID-19 pandemic and the related effects on public health.
+Added: Our operations are susceptible to widespread outbreaks of illness or other public health issues, such as the continuing global COVID-19 pandemic.
+Added: The COVID-19 pandemic could have a material adverse effect on our business, results of operations, financial condition and prospects, including our ability to comply with covenants under our debt agreements.
+Added: The COVID-19 pandemic has caused governments around the world, including in the U.S.
+Added: and Australia, to implement quarantines, travel bans and shutdowns, which have significantly restricted the movement of people and goods.
+Added: The continuing spread of COVID-19 has contributed to adverse changes in general domestic and global economic conditions and disrupted domestic and international credit markets.
+Added: Within the global coal industry, supply and demand disruptions resulting from the COVID-19 pandemic have been widespread and have adversely impacted us and our customers, as further described in Part II, Item 7.
+Added: “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
+Added: Governmental mandates, and our efforts to act in the best interests of our employees, customers, suppliers, vendors and joint venture and other business partners, have affected and are continuing to affect our business and operations, causing us to modify a number of our normal business practices.
+Added: Additional governmental mandates could require forced shutdowns of our mines and other facilities for extended or indefinite periods and widespread outbreaks in locations significant to our operations could adversely affect our workforce, resulting in serious health issues and absenteeism.
+Added: In addition, the COVID-19 pandemic may cause supply chains and distribution channels to be interrupted, slowed or rendered inoperable.
+Added: If our operations are curtailed, we may need to seek alternate sources of supply for commodities, services and labor, which may be more expensive.
+Added: Alternate sources may not be available or may result in delays in shipments to our customers.
+Added: Further, if our customers’ businesses are similarly affected, they might delay, reduce or cancel purchases from us.
+Added: Adverse changes in the general domestic and global economic conditions and disrupted domestic and international credit markets, could negatively affect our customers’ ability to pay us as well as our ability to access capital that could negatively affect our liquidity.
+Added: Despite our efforts to manage these realized and potential impacts, their ultimate impact also depends on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic as well as third-party actions taken to contain its spread and mitigate its public health effects.
+Added: While the ultimate impacts of the COVID-19 pandemic on our business are unknown, we expect continued interference with general commercial activity, which may further negatively affect both demand and prices for our products.
+Added: We also face disruption to supply chain and distribution channels, potentially increasing costs of production, storage and distribution, and potential adverse effects to our workforce, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Our expenditures for postretirement benefit obligations could be materially higher than we have predicted if our underlying assumptions prove to be incorrect.
−Removed: We provide postretirement health and life insurance benefits to eligible employees.
+Added: We pay postretirement health and life insurance benefits to eligible retirees.
Our total accumulated postretirement benefit obligation related to such benefits was a liability of $442.9 million as of December 31, 2020, of which $29.7 million was classified as a current liability.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
These liabilities are actuarially determined.
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Additionally, our reported defined benefit pension funding status may be affected, and we may be required to increase employer contributions, due to increases in our defined benefit pension obligation or poor financial performance in asset markets in future years.
+Added: Peabody Energy Corporation 2020 Form 10-K
Our defined benefit pension plans are subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
4 unchanged sentences
Any of those consequences could have a material adverse effect on our results of operations, financial conditions or available liquidity.
−Removed: Concerns about the impacts of coal combustion on global climate are increasingly leading to consequences that have affected and could continue to affect demand for our products or our securities and our ability to produce, including increased governmental regulation of coal combustion and unfavorable investment decisions by electricity generators.
−Removed: Global climate issues continue to attract public and scientific attention.
−Removed: Numerous reports, such as the Fourth and the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues.
−Removed: In turn, increasing government attention is being paid to global climate issues and to emissions of greenhouse gases, including emissions of carbon dioxide from coal combustion by power plants.
−Removed: The enactment of future laws or the passage of regulations regarding emissions from the use of coal by the U.S., some of its states or other countries, or other actions to limit such emissions, could result in electricity generators switching from coal to other fuel sources.
−Removed: Further, policies limiting available financing for the development of new coal mines or coal-fueled power stations could adversely impact the global supply and demand for coal.
−Removed: The potential financial impact on us of such future laws, regulations or other policies will depend upon the degree to which any such laws or regulations force electricity generators to diminish their reliance on coal as a fuel source.
−Removed: That, in turn, will depend on a number of factors, including the specific requirements imposed by any such laws, regulations or other policies, the time periods over which those laws, regulations or other policies would be phased in, the state of development and deployment of CCUS technologies as well as acceptance of CCUS technologies to meet regulations and the alternative uses for coal.
−Removed: Similarly, higher-efficiency coal-fired power plants may also be an option for meeting laws or regulations related to emissions from coal use.
−Removed: Several countries, including some major coal users such as China, India and Japan, included using higher-efficiency coal-fueled power plants in their plans under the Paris Agreement.
−Removed: From time to time, we attempt to analyze the potential impact on the Company of as-yet-unadopted, potential laws, regulations and policies.
−Removed: Such analyses require that we make significant assumptions as to the specific provisions of such potential laws, regulations and policies, which sometimes show that if implemented in the manner assumed by the analyses, the potential laws, regulations and policies could result in material adverse impacts on our operations, financial condition or cash flows.
−Removed: We do not believe that such analyses reasonably predict the quantitative impact that future laws, regulations or other policies may have on our results of operations, financial condition or cash flows.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Numerous activist groups are devoting substantial resources to anti-coal activities to minimize or eliminate the use of coal as a source of electricity generation, domestically and internationally, thereby further reducing the demand and pricing for coal, and potentially materially and adversely impacting our future financial results, liquidity and growth prospects.
−Removed: Several non-governmental organizations have undertaken campaigns to minimize or eliminate the use of coal as a source of electricity generation in the U.S.
−Removed: and across the globe.
−Removed: In an effort to stop or delay coal mining activities, activist groups have brought lawsuits challenging the issuance of individual coal leases, and challenging the federal coal leasing program more broadly.
−Removed: Other lawsuits challenge historical and pending regulatory approvals, permits and processes that are necessary to conduct coal mining operations or to operate coal-fueled power plants, including so-called “sue and settle” lawsuits where regulatory authorities in the past have reached private agreements with environmental activists that often involve additional regulatory restrictions or processes being implemented without formal rulemaking.
−Removed: The effect of these and other similar developments has been to make it more costly and difficult to maintain our business.
−Removed: These cost increases and/or a substantial or extended decline in the prices we receive for our coal due to these or other factors could reduce our revenue and profitability, cash flows, liquidity, and value of our coal reserves and could result in losses.
+Added: We are subject to various general operating risks which may be fully or partially outside of our control.
+Added: Our results of operations, financial position or cash flows could be adversely impacted by various general operating risks which may be fully or partially outside of our control.
+Added: Such risks stem from internal and external sources and include:
+Added: • global economic recessions and/or credit market disruptions;
+Added: • deterioration of the creditworthiness of our customers or counterparties to financial instruments, and their ability to perform under contracts;
+Added: • inability of suppliers and other counterparties, including those related to transportation, contract mining, service provision, and coal trading and brokerage, to fulfil the terms of their contracts with us;
+Added: • decreases in the availability or increases in costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires;
+Added: • disruption to, or increased costs within, the transportation chain for coal, including rail, barge, trucking, overland conveyor, ports and ocean-going vessels;
+Added: • failure to attract and retain skilled and qualified personnel, particularly as the prevalence of coal-fired electricity generation declines;
+Added: • new or increased forms of taxation imposed by federal, state, provincial or local governmental authorities, including production taxes, sales-related taxes, royalties, environmental taxes, mining profits taxes and income taxes;
+Added: • uncertainties associated with our global operating platform, including country and political risks, international regulatory requirements, and foreign currency rates;
+Added: • cyber-attacks or other security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us, our employees, our customers or other third-parties.
Risks Related to Our Indebtedness and Capital Structure
1 unchanged sentence
As of December 31, 2020, we had approximately $1.5 billion of Indebtedness outstanding, excluding finance leases and debt issuance costs.
+Added: As more fully described within “Liquidity and Capital Resources” of Part II, Item 7.
+Added: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in January 2021 we entered into a series of interrelated transactions with our surety bond providers, the revolving lenders under our credit agreement and certain holders of our senior secured notes to extend a significant portion of our near-term debt maturities to December 2024 and to stabilize collateral requirements for our existing surety bond portfolio.
+Added: While our aggregate amount of Indebtedness did not materially change as a result of these transactions, our incremental cost of borrowing and cash paid for interest expenses will increase prospectively.
+Added: Peabody Energy Corporation 2020 Form 10-K
The degree to which we are leveraged could have important consequences, including, but not limited to:
4 unchanged sentences
• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, business development or other general corporate requirements;
+Added: • limiting our ability to refinance or otherwise exchange existing debt at commercially acceptable rates;
• making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing, particularly during periods in which credit markets are weak;
5 unchanged sentences
The terms of our Indebtedness provide that if we cannot meet our debt service obligations, the lenders could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.
−Removed: A downgrade in our credit ratings or other unfavorable indicators could result in, among other matters, additional required financial assurances related to our reclamation bonding requirements, a requirement to post additional collateral on derivative trading instruments that we may enter into, the loss of trading counterparties for corporate hedging and trading and brokerage activities or an increase in the cost of, or a limit on our access to, various forms of credit used in operating our business.
+Added: A downgrade in our credit ratings or other unfavorable indicators could result in, among other matters, a requirement to post additional collateral on derivative trading instruments that we may enter into, the loss of trading counterparties for corporate hedging and trading and brokerage activities or an increase in the cost of, or a limit on our access to, various forms of credit used in operating our business.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to sell assets, seek additional capital or seek to restructure or refinance our Indebtedness.
2 unchanged sentences
We may not be able to complete those sales and the proceeds may not be adequate to meet any debt service obligations then due.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Despite our indebtedness, we may still be able to incur substantially more debt, including secured debt, which could further increase the risks associated with our indebtedness.
−Removed: We may be able to incur substantial additional indebtedness in the future, including additional secured debt.
−Removed: Although covenants under the indenture governing our senior secured notes and the agreements governing our other indebtedness, including our credit facility, revolver and finance leases limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions can be substantial.
+Added: Despite our Indebtedness, we may still be able to incur more debt, which could further increase the risks associated with our Indebtedness.
+Added: We may be able to incur additional Indebtedness in the future.
+Added: Although covenants under the indentures governing our senior secured notes and the agreements governing our other Indebtedness, including our credit facility, revolver and finance leases, limit our ability to incur additional Indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions can be material.
In addition, the indenture governing the senior secured notes and the agreements governing our other Indebtedness do not limit us from incurring obligations that do not constitute Indebtedness as defined therein.
−Removed: The terms of our indenture governing our senior secured notes and the agreements and instruments governing our other indebtedness impose restrictions that may limit our operating and financial flexibility.
−Removed: The indenture governing our senior secured notes and the agreements governing our other indebtedness contain certain restrictions and covenants which restrict our ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.
−Removed: Our credit facility also contains a mandatory prepayment provision providing that certain amounts of excess cash flow (as defined in the agreements governing the facility) must be utilized to make payments on the outstanding balance under that facility.
+Added: The terms of the indentures governing our senior secured notes and the agreements and instruments governing our other Indebtedness and surety bonding obligations impose restrictions that may limit our operating and financial flexibility.
+Added: The indentures governing our senior secured notes and the agreements governing our other Indebtedness and surety bonding obligations contain certain restrictions and covenants which restrict our ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.
+Added: Peabody Energy Corporation 2020 Form 10-K
These covenants limit, among other things, our ability to:
• incur additional Indebtedness;
−Removed: pay dividends on or make distributions in respect of stock or make certain other restricted payments or investments;
+Added: • pay dividends on or make distributions in respect of stock or make certain other restricted payments, such as share repurchases;
+Added: • make capital investments;
• enter into agreements that restrict distributions from certain subsidiaries;
• sell or otherwise dispose of assets;
+Added: • use for general purposes the cash received from certain allowable asset sales or disposals;
• enter into transactions with affiliates;
1 unchanged sentence
• merge, consolidate or sell all or substantially all of our assets;
−Removed: place restrictions on the ability of subsidiaries to pay dividends or make other payments to us.
+Added: • receive dividends or other payments from subsidiaries in certain cases.
Our ability to comply with these covenants may be affected by events beyond our control and we may need to refinance existing debt in the future.
A breach of any of these covenants together with the expiration of any cure period, if applicable, could result in a default under our senior secured notes.
−Removed: If any such default occurs, subject to applicable grace periods, the holder of our senior secured notes may elect to declare all outstanding senior secured notes, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.
+Added: If any such default occurs, subject to applicable grace periods, the holders of our senior secured notes may elect to declare all outstanding senior secured notes, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.
If the obligations under our senior secured notes were to be accelerated, our financial resources may be insufficient to repay the notes and any other Indebtedness becoming due in full.
4 unchanged sentences
In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies who are not subject to such restrictions.
−Removed: The number and quantity of viable financing alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions and insurance companies associated with concerns about environmental impacts of coal combustion, and negative views around our efforts with respect to environmental and social matters and related governance considerations could harm the perception of our company by certain investors or result in the exclusion of our securities from consideration by those investors.
−Removed: Global climate issues, including with respect to greenhouse gases such as carbon dioxide and methane and the relationship that greenhouse gases have with climate change, continue to attract significant public and scientific attention.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
−Removed: Certain banks, other financing sources and insurance companies have taken actions to limit available financing and insurance coverage for the development of new coal-fueled power plants and coal producers and utilities that derive a majority of their revenue from thermal coal, which also may adversely impact the future global demand for coal.
−Removed: Increasingly, the actions of such financial institutions and insurance companies are informed by non-standardized “sustainability” scores, ratings and benchmarking studies provided by various organizations that assess corporate governance related to environmental and social matters.
+Added: The number and quantity of viable financing and insurance alternatives available to us may be significantly impacted by unfavorable lending and investment policies by financial institutions and insurance companies associated with concerns about environmental impacts of coal combustion, and negative views around our efforts with respect to environmental and social matters and related governance considerations could harm the perception of our company by a significant number of investors or result in the exclusion of our securities from consideration by those investors.
+Added: Certain banks, other financing sources and insurance companies have taken actions to limit available financing and insurance coverage for the development of new coal-fueled power plants and coal producers and utilities that derive a majority of their revenue from coal, and particularly from thermal coal.
+Added: This may adversely impact the future global demand for coal.
+Added: Increasingly, the actions of such financial institutions and insurance companies are informed by non-standardized “sustainability” scores, ratings and benchmarking studies provided by various organizations that assess environmental, social and governance matters.
Further, there have been efforts in recent years by members of the general financial and investment communities, including investment advisors, sovereign wealth funds, public pension funds, universities and other institutional investors, to divest themselves and to promote the divestment of securities issued by companies involved in the fossil fuel extraction market, or that have low ratings or scores in studies and assessments of the type noted above, including coal producers.
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• making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing;
−Removed: limiting our flexibility in business development activities such as mergers, acquisitions and divestures.
+Added: • limiting our flexibility in business development activities such as mergers, acquisitions and divestitures.
+Added: Peabody Energy Corporation 2020 Form 10-K
Risks Related to Ownership of Our Securities
−Removed: The price of our securities may be volatile.
+Added: The price of our securities may be volatile and could fall below the minimum allowed by New York Stock Exchange (NYSE) listing requirements.
The price of our common stock (Common Stock) may fluctuate due to a variety of market and industry factors that may materially reduce the market price of our Common Stock regardless of our operating performance, including, among others:
7 unchanged sentences
• announcements concerning us or our competitors;
+Added: • the purchase and sale of shares of our Common Stock by significant shareholders;
• lack of trading liquidity;
−Removed: the general state of the securities market.
−Removed: In addition, the stock market in general has experienced significant volatility that often has been unrelated to the operating performance of companies whose shares are traded.
−Removed: These market fluctuations could adversely affect the trading price of our Common Stock, regardless of our actual operating performance.
+Added: • the general volatility of securities markets.
As a result of all of these factors, investors in our Common Stock may not be able to resell their stock at or above the price they paid or at all.
+Added: In the recent past, our closing stock price has fallen below $1.00 per share for a limited number of trading days.
+Added: If our stock were to trade below $1.00 per share for 30 consecutive trading days, NYSE could commence suspension and delisting procedures.
Further, we could be the subject of securities class action litigation due to any such stock price volatility, which could divert management’s attention and have a material adverse effect on our results of operation.
3 unchanged sentences
Such issuances or grants could constitute a significant portion of the then-outstanding Common Stock, which may result in significant dilution in ownership of Common Stock.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
There may be circumstances in which the interests of a significant stockholder could be in conflict with other stakeholders’ interests.
2 unchanged sentences
Such transactions may advance the interests of the significant stockholder and not necessarily those of other stakeholders, which might adversely affect us or other holders of our Common Stock or debt instruments.
−Removed: A significant stockholder may also sell shares of our Common Stock into the market from time to time, and we cannot predict the effect, if any, that such future sales may have on the market price of our Common Stock.
The payment of dividends on our stock or repurchases of our stock is dependent on a number of factors, and future payments and repurchases cannot be assured.
−Removed: Restrictive covenants in our credit facility and in the indenture governing our senior secured notes limit our ability to pay cash dividends and repurchase shares.
−Removed: Other debt instruments to which we or our subsidiaries are, or may be, a party, also contain restrictive covenants that may limit our ability to pay dividends or for us to receive dividends from our subsidiaries, any of which may negatively impact the trading price of the Common Stock.
−Removed: In addition, holders of capital stock will only be entitled to receive such cash dividends as our Board of Directors may declare out of funds legally available for such payments, and our Board of Directors may only authorize us to repurchase shares of our capital stock with funds legally available for such repurchases.
−Removed: The payment of future cash dividends and future repurchases will depend upon our earnings, economic conditions, liquidity and capital requirements, and other factors, including our leverage and other financial ratios.
+Added: As more fully described within “Liquidity and Capital Resources” of Part II, Item 7.
+Added: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” during the fourth quarter of 2020, we entered into transaction support agreements with our surety bond providers which prohibit the payment of dividends on our stock or repurchases of our stock through December 31, 2024, unless otherwise agreed to by the parties to the agreements.
+Added: Restrictive covenants in our credit facility and in the indentures governing our senior secured notes also limit our ability to pay cash dividends and repurchase shares.
+Added: Such restrictions may negatively impact the trading price of the Common Stock.
+Added: The payment of future cash dividends and future repurchases will depend upon these restrictions, as well as our earnings, economic conditions, liquidity and capital requirements, and other factors, including our leverage and other financial ratios.
Accordingly, we cannot make any assurance that future dividends will be paid or future repurchases will be made.
−Removed: Other Business Risks
+Added: Peabody Energy Corporation 2020 Form 10-K
+Added: General Business Risks
We may not be able to fully utilize our deferred tax assets.
1 unchanged sentence
and numerous foreign jurisdictions, most significantly Australia.
−Removed: As of December 31, 2019, we had gross deferred income tax assets, including net operating loss carryforwards, and liabilities of $2,208.1 million and $140.2 million , respectively, as described further in Note 12.
+Added: As of December 31, 2020, we had gross deferred income tax assets, including net operating loss (NOL) carryforwards, and liabilities of $2,311.6 million and $54.4 million, respectively, as described further in Note 10.
“Income Taxes” to the accompanying consolidated financial statements.
−Removed: At that date, we also had recorded a valuation allowance of $2,068.4 million , substantially comprised of a full valuation allowance against our net deferred tax asset positions in the U.S.
−Removed: and Australia driven by recent cumulative book losses, as determined by considering all sources of available income (including items classified as discontinued operations or recorded directly to “Accumulated other comprehensive income”), which limited our ability to look to future taxable income in assessing the likelihood of realizing those assets.
−Removed: The Company’s ability to use its net operating loss carryforwards may be limited if it experiences an “ownership change” as defined in Section 382 (Section 382) of the Internal Revenue Code of 1986, as amended.
+Added: At that date, we also had recorded a valuation allowance of $2,287.3 million.
+Added: The Company’s ability to use its NOL carryforwards may be limited if it experiences an “ownership change” as defined in Section 382 (Section 382) of the Internal Revenue Code of 1986, as amended.
An ownership change generally occurs if certain stockholders increase their aggregate percentage ownership of a corporation’s stock by more than 50 percentage points over their lowest percentage ownership at any time during the testing period, which is generally the three-year period preceding any potential ownership change.
−Removed: There is no assurance that the Company will not experience a future ownership change under Section 382 that may significantly limit or possibly eliminate its ability to use its net operating loss carryforwards.
−Removed: Potential future transactions involving the sale or issuance of our Common Stock, including the exercise of conversion options under the terms of any convertible debt that Peabody may issue in the future, the repurchase of such debt with Common Stock, any issuance of Common Stock for cash and the acquisition or disposition of such stock by a stockholder owning 5% or more of our Common Stock, or a combination of such transactions, may increase the possibility that the Company will experience a future ownership change under Section 382.
−Removed: Under Section 382, a future ownership change would subject the Company to additional annual limitations that apply to the amount of pre-ownership change net operating losses that may be used to offset post-ownership change taxable income.
−Removed: This limitation is generally determined by multiplying the value of a corporation’s stock immediately before the ownership change by the applicable long-term tax-exempt rate.
−Removed: Any unused annual limitation may, subject to certain limits, be carried over to later years, and the limitation may under certain circumstances be increased by built-in gains in the assets held by such corporation at the time of the ownership change.
−Removed: This limitation could cause the Company’s U.S.
−Removed: federal income taxes to be greater, or to be paid earlier, than they otherwise would be, and could cause all or a portion of the Company’s net operating loss carryforwards to expire unused.
−Removed: Similar rules and limitations may apply for state income tax purposes.
−Removed: The Company’s ability to use its net operating loss carryforwards will also depend on the amount of taxable income it generates in future periods.
−Removed: Its net operating loss carryforwards may expire before the Company can generate sufficient taxable income to use them in full.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
Although we may be able to utilize some or all of those deferred tax assets in the future if we have income of the appropriate character in those jurisdictions (subject to loss carryforward and tax credit expiry, in certain cases), there is no assurance that we will be able to do so.
3 unchanged sentences
Acquisitions and divestitures are a potentially important part of our long-term strategy, subject to our investment criteria, and involve a number of risks, any of which could cause us not to realize the anticipated benefits.
−Removed: We may engage in acquisition or divestiture activity based on our set of investment criteria to produce outcomes that increase shareholder value.
−Removed: As it relates to divestitures, we may dispose of certain assets within our portfolio if we determine that the price received is more beneficial to us than keeping the assets within our portfolio.
−Removed: Conversely, acquisitions are a potentially important part of our long-term strategy, and we may pursue acquisition opportunities.
−Removed: If we fail to accurately estimate the future results and value of an acquired or divested business and the related risk associated with such a transaction, or are unable to successfully integrate the businesses or properties we acquire, our business, financial condition or results of operations could be negatively affected.
+Added: We may engage in acquisition or divestiture activity based on our set of investment criteria to produce outcomes that increase shareholder value or provide potential strategic benefits.
+Added: If we fail to accurately estimate the future results and value of an acquired or divested business or assets and the related risk associated with such a transaction, or are unable to successfully integrate the businesses or assets we acquire, our business, financial condition or results of operations could be negatively affected.
Moreover, any transactions we pursue could materially impact our liquidity and an acquisition could increase capital resource needs and may require us to incur Indebtedness, seek equity capital or both.
We may not be able to satisfy these liquidity and capital resource needs on acceptable terms or at all.
−Removed: In addition, future acquisitions could result in our assuming significant long-term liabilities relative to the value of the acquisitions.
−Removed: In addition to the above, any acquisition would be accompanied by risks associated with integrating and assimilating the operations and personnel of any acquired companies, failure to realize the anticipated synergies and maximize the financial and strategic position of the combined enterprise and inability to maintain uniform standards, policies and controls across the organization.
−Removed: Additionally, the acquired companies, assets or properties may have unknown liabilities which could be significant.
+Added: In addition, future acquisitions could result in our assuming significant long-term liabilities, including potentially unknown liabilities, relative to the value of the acquisitions.
Our certificate of incorporation and by-laws include provisions that may discourage a takeover attempt.
8 unchanged sentences
Unresolved Staff Comments.
−Removed: Peabody Energy Corporation
−Removed: 2019 Form 10-K
+Added: Peabody Energy Corporation 2020 Form 10-K
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.