What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-05 · 282 added, 198 removed, 668 unchanged (42% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions, except per share data)

2 unchanged sentences

Operating costs and expenses (exclusive of items shown separately below)

611.4 556.3 1,194.0 1,335.8

Depreciation, depletion and amortization 77.1 88.3 145.4 194.3

2 unchanged sentences

Restructuring charges

2.1 16.5 4.2 23.0

Transaction costs related to joint ventures

— 12.9 — 17.1

Other operating (income) loss:

Net loss (gain) on disposals 0.6 ( 8.1 )

Net (gain) loss on disposals ( 3.0 ) 0.2 ( 2.4 ) ( 7.9 )

Asset impairment — 1,418.1 — 1,418.1

Loss from equity affiliates 3.5 6.0 4.4 15.1

1 unchanged sentence

Interest expense 45.4 34.3 97.8 67.4

Gain on early debt extinguishment ( 3.5 ) —

Net gain on early debt extinguishment ( 11.8 ) — ( 15.3 ) —

Interest income ( 1.3 ) ( 2.4 ) ( 2.8 ) ( 5.5 )

16 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

3 unchanged sentences

Foreign currency translation adjustment ( 0.2 ) 6.1 ( 0.4 ) ( 0.7 )

Other comprehensive loss, net of income taxes ( 11.2 ) ( 9.0 )

Other comprehensive (loss) income, net of income taxes ( 11.2 ) 3.9 ( 22.4 ) ( 5.1 )

Comprehensive loss ( 36.5 ) ( 1,543.7 ) ( 127.4 ) ( 1,684.2 )

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(Amounts in millions, except per share data)

2 unchanged sentences

Restricted cash

Accounts receivable, net of allowance for credit losses of $ 0.0 at March 31, 2021 and December 31, 2020

Accounts receivable, net of allowance for credit losses of $ 0.0 at June 30, 2021 and December 31, 2020

Inventories 232.5 261.6

20 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

100.0 shares authorized, no shares issued or outstanding as of March 31, 2021 and December 31, 2020

100.0 shares authorized, no shares issued or outstanding as of June 30, 2021 and December 31, 2020

Series Common Stock — $ 0.01 per share par value;

50.0 shares authorized, no shares issued or outstanding as of March 31, 2021 and December 31, 2020

50.0 shares authorized, no shares issued or outstanding as of June 30, 2021 and December 31, 2020

Common Stock — $ 0.01 per share par value;

450.0 shares authorized, 141.2 shares issued and 98.3 shares outstanding as of March 31, 2021 and 140.5 shares issued and 97.8 shares outstanding as of December 31, 2020

450.0 shares authorized, 154.1 shares issued and 111.1 shares outstanding as of June 30, 2021 and 140.5 shares issued and 97.8 shares outstanding as of December 31, 2020

Additional paid-in capital 3,463.8 3,364.6

Treasury stock, at cost — 42.9 and 42.7 common shares as of March 31, 2021 and December 31, 2020

Treasury stock, at cost — 43.0 and 42.7 common shares as of June 30, 2021 and December 31, 2020

( 1,370.2 ) ( 1,368.9 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

3 unchanged sentences

Loss from continuing operations, net of income taxes ( 100.7 ) ( 1,674.6 )

Adjustments to reconcile loss from continuing operations, net of income taxes to net cash provided by (used in) operating activities:

Adjustments to reconcile loss from continuing operations, net of income taxes to net cash used in operating activities:

Depreciation, depletion and amortization 145.4 194.3

Noncash interest expense, net 10.8 8.0

Noncash coal inventory revaluation 5.5 —

Deferred income taxes ( 0.8 ) ( 0.5 )

Noncash share-based compensation 3.9 6.1

Net loss (gain) on disposals 0.6 ( 8.1 )

Gain on early debt extinguishment ( 3.5 ) —

Asset impairment — 1,418.1

Net gain on disposals ( 2.4 ) ( 7.9 )

Net gain on early debt extinguishment ( 15.3 ) —

Loss from equity affiliates 4.4 15.1

11 unchanged sentences

Other, net — ( 2.6 )

Net cash provided by (used in) continuing operations 74.1 ( 1.6 )

Net cash used in continuing operations ( 18.0 ) ( 32.7 )

Net cash used in discontinued operations ( 4.8 ) ( 20.4 )

Net cash provided by (used in) operating activities 71.0 ( 4.7 )

Net cash used in operating activities ( 22.8 ) ( 53.1 )

PEABODY ENERGY CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

6 unchanged sentences

Advances to related parties ( 0.2 ) ( 23.1 )

Cash receipts from Middlemount Coal Pty Ltd 2.3 —

Cash receipts from Middlemount Coal Pty Ltd and other related parties 2.6 —

Other, net — ( 0.6 )

1 unchanged sentence

Cash Flows From Financing Activities

Proceeds from long-term debt — 300.0

Repayments of long-term debt ( 83.1 ) ( 9.9 )

Payment of debt issuance and other deferred financing costs ( 22.5 ) —

Proceeds from common stock issuances, net of costs 65.1 —

Repurchase of employee common stock relinquished for tax withholding ( 1.3 ) ( 1.6 )

Distributions to noncontrolling interests ( 0.1 ) ( 3.5 )

Other, net 0.1 0.2

Net cash used in financing activities ( 63.3 ) ( 7.9 )

Net cash (used in) provided by financing activities ( 41.9 ) 285.0

Net change in cash, cash equivalents and restricted cash ( 147.3 ) 116.3

4 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions, except per share data)

Balance, beginning of period $ 1.4 $ 1.4 $ 1.4 $ 1.4

Common stock issuances, net of costs 0.1 — 0.1 —

Balance, end of period 1.5 1.4 1.5 1.4

1 unchanged sentence

Balance, beginning of period 3,366.4 3,353.3 3,364.6 3,351.1

3,364.6 3,351.1

Share-based compensation for equity-classified awards 2.1 3.9 3.9 6.1

Common stock issued in exchange for debt retirement 30.5 — 30.5 —

Common stock issuances, net of costs 64.8 — 64.8 —

Balance, end of period 3,463.8 3,357.2 3,463.8 3,357.2

3,366.4 3,353.3

Treasury stock

Balance, beginning of period ( 1,369.5 ) ( 1,368.1 ) ( 1,368.9 ) ( 1,367.3 )

( 1,368.9 ) ( 1,367.3 )

Repurchase of employee common stock relinquished for tax withholding ( 0.7 ) ( 0.8 ) ( 1.3 ) ( 1.6 )

( 0.6 ) ( 0.8 )

Balance, end of period ( 1,370.2 ) ( 1,368.9 ) ( 1,370.2 ) ( 1,368.9 )

( 1,369.5 ) ( 1,368.1 )

(Accumulated deficit) retained earnings

Balance, beginning of period ( 1,353.4 ) 467.3 ( 1,273.3 ) 597.0

( 1,273.3 ) 597.0

Net loss attributable to common stockholders ( 28.6 ) ( 1,544.2 ) ( 108.7 ) ( 1,673.9 )

Balance, end of period ( 1,382.0 ) ( 1,076.9 ) ( 1,382.0 ) ( 1,076.9 )

( 1,353.4 ) 467.3

Accumulated other comprehensive income

3 unchanged sentences

Foreign currency translation adjustment ( 0.2 ) 6.1 ( 0.4 ) ( 0.7 )

( 0.2 ) ( 6.8 )

Balance, end of period 183.4 26.5 183.4 26.5

3 unchanged sentences

Distributions to noncontrolling interests — ( 3.4 ) ( 0.1 ) ( 3.5 )

( 0.1 ) ( 0.1 )

Balance, end of period 55.3 50.0 55.3 50.0

Total stockholders’ equity $ 951.8 $ 989.3 $ 951.8 $ 989.3

$ 891.5 $ 2,533.3

See accompanying notes to unaudited condensed consolidated financial statements.

12 unchanged sentences

Balance sheet information presented herein as of December 31, 2020 has been derived from the Company’s audited consolidated balance sheet at that date.

The Company’s results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2021.

The Company’s results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2021.

(2) Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

7 unchanged sentences

Accounting Standards Not Yet Implemented

Effects of Reference Rate Reform.

Reference Rate Reform.

In March 2020, ASU 2020-04 was issued, which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused by reference rate reform (including reform of the London Interbank Offered Rate (LIBOR) or other reference rate reform).

This guidance is effective for all entities as of March 12, 2020 through December 31, 2022.

The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis.

In January 2021, the FASB issued ASU 2021-01 to permit entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculation price alignment interest in connection with reference rate reform activities.

The Company is still completing its evaluation of the impact of ASU 2020-04 and ASU 2021-01 and plans to elect optional expedients as reference rate reform activities occur.

While the Company is still evaluating, it does not expect the guidance to have a material impact on its consolidated financial statements or disclosures.

The Company is still completing its evaluation of the impact of the guidance and plans to elect optional expedients as reference rate reform activities occur.

The Company does not expect the guidance to have a material impact on its consolidated financial statements or disclosures.

(3) Revenue Recognition

6 unchanged sentences

With respect to its seaborne mining segments, the Company classifies as “Export” certain revenue from domestically-delivered coal under contracts in which the price is derived on a basis similar to export contracts.

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.

5 unchanged sentences

Metallurgical coal

Export — 120.4 — — — 120.4

Total metallurgical — 120.4 — — — 120.4

0.2 0.6 ( 0.2 ) 0.9 ( 2.4 ) ( 0.9 )

Revenues $ 194.1 $ 121.0 $ 248.6 $ 162.1 $ ( 2.4 ) $ 723.4

Three Months Ended June 30, 2020

Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.

Thermal Mining Corporate and Other (1)

(Dollars in millions)

Domestic $ 38.3 $ — $ 205.8 $ 144.1 $ — $ 388.2

Export 123.5 — — — — 123.5

Total thermal 161.8 — 205.8 144.1 — 511.7

Metallurgical coal

Export — 91.4 — — — 91.4

Total metallurgical — 91.4 — — — 91.4

1 unchanged sentence

Revenues $ 162.0 $ 91.6 $ 205.8 $ 152.0 $ 15.3 $ 626.7

Three Months Ended March 31, 2020

Six Months Ended June 30, 2021

Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.

5 unchanged sentences

Metallurgical coal

Domestic — 2.7 — — — 2.7

Export — 204.3 — — — 204.3

2 unchanged sentences

Revenues $ 370.5 $ 208.5 $ 477.0 $ 311.4 $ 7.3 $ 1,374.7

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2020

Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.

Thermal Mining Corporate and Other (1)

(Dollars in millions)

Domestic $ 74.8 $ — $ 472.4 $ 328.7 $ — $ 875.9

Export 287.2 — — — — 287.2

Total thermal 362.0 — 472.4 328.7 — 1,163.1

Metallurgical coal

Export — 283.9 — — — 283.9

Total metallurgical — 283.9 — — — 283.9

1.1 0.9 — 15.6 8.3 25.9

Revenues $ 363.1 $ 284.8 $ 472.4 $ 344.3 $ 8.3 $ 1,472.9

(1) Corporate and Other revenue includes gains and losses related to mark-to-market adjustments from economic hedge activities intended to hedge future coal sales.

3 unchanged sentences

Committed Revenue from Contracts with Customers

The Company expects to recognize revenue subsequent to March 31, 2021 of approximately $ 3.6 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at March 31, 2021.

The Company expects to recognize revenue subsequent to June 30, 2021 of approximately $ 3.6 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at June 30, 2021.

Approximately 46 % of such amount is expected to be recognized over the next twelve months and the remainder thereafter.

1 unchanged sentence

This estimate of future revenue does not include any revenue related to contracts with variable prices per ton that cannot be reasonably estimated, such as the majority of seaborne metallurgical and seaborne thermal coal contracts where pricing is negotiated or settled quarterly or annually.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable

“Accounts receivable, net” at March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021 December 31, 2020

“Accounts receivable, net” at June 30, 2021 and December 31, 2020 consisted of the following:

June 30, 2021 December 31, 2020

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 250.7 $ 244.8

Trade receivables, net included no allowance for credit losses as of both March 31, 2021 and December 31, 2020.

Miscellaneous receivables, net included no allowance for credit losses as of both March 31, 2021 and December 31, 2020.

No charges for credit losses were recognized during the three months ended March 31, 2021 and 2020 .

Trade receivables, net included no allowance for credit losses as of both June 30, 2021 and December 31, 2020.

Miscellaneous receivables, net included no allowance for credit losses as of both June 30, 2021 and December 31, 2020.

Charges for credit losses of less than $ 0.1 million were recognized during the three and six months ended June 30, 2021.

No charges for credit losses were recognized during the three and six months ended June 30, 2020.

(4) Discontinued Operations

1 unchanged sentence

Thermal Mining segment assets that have ceased production and other previously divested legacy operations, including Patriot Coal Corporation and certain of its wholly-owned subsidiaries (Patriot).

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summarized Results of Discontinued Operations

Results from discontinued operations were as follows during the periods presented below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

2 unchanged sentences

Liabilities classified as discontinued operations included in the Company’s condensed consolidated balance sheets were as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(Dollars in millions)

10 unchanged sentences

On October 9, 2015, Patriot’s bankruptcy court entered an order confirming Patriot’s plan of reorganization, which provided, among other things, for the sale of substantially all of Patriot’s assets to two different buyers.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Black Lung Occupational Disease Liabilities.

11 unchanged sentences

Whether the Company will ultimately be required to fund certain of those obligations in the future as a result of Patriot’s May 2015 bankruptcy remains uncertain.

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $ 89.8 million and $ 90.1 million at March 31, 2021 and December 31, 2020, respectively.

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $ 89.7 million and $ 90.1 million at June 30, 2021 and December 31, 2020, respectively.

While the Company has recorded a liability, it intends to review each claim on a case-by-case basis and contest liability estimates as appropriate.

1 unchanged sentence

The Company cannot reliably estimate the potential liabilities for Patriot’s workers employed by former subsidiaries of the Company that are presently active in the workforce because of the potential for such workers to continue to work for another coal operator that is a going concern.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(5) Inventories

Inventories as of March 31, 2021 and December 31, 2020 consisted of the following:

March 31, 2021 December 31, 2020

Inventories as of June 30, 2021 and December 31, 2020 consisted of the following:

June 30, 2021 December 31, 2020

(Dollars in millions)

3 unchanged sentences

Total $ 232.5 $ 261.6

Materials and supplies inventories presented above have been shown net of reserves of $ 10.5 million and $ 10.4 million as of March 31, 2021 and December 31, 2020, respectively.

The coal inventory balances above are presented net of net realizable value adjustments of $ 5.5 million as of March 31, 2021.

Materials and supplies inventories presented above have been shown net of reserves of $ 10.2 million and $ 10.4 million as of June 30, 2021 and December 31, 2020, respectively.

(6) Equity Method Investments

The Company had total equity method investments of $ 21.2 million and $ 24.6 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, related to Middlemount Coal Pty Ltd (Middlemount).

Included in “Loss from equity affiliates” in the unaudited condensed consolidated statements of operations were losses related to Middlemount of $ 0.9 million and $ 9.1 million during the three months ended March 31, 2021 and 2020, respectively.

The Company received cash payments from Middlemount of $ 2.3 million during the three months ended March 31, 2021.

No payments were received from from Middlemount during the three months ended March 31, 2020.

The Company had total equity method investments and financing receivables of $ 17.5 million and $ 24.6 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020, respectively, related to Middlemount Coal Pty Ltd (Middlemount).

Included in “Loss from equity affiliates” in the unaudited condensed consolidated statements of operations were losses related to Middlemount of $ 3.5 million and $ 4.4 million during the three and six months ended June 30, 2021, respectively, and losses of $ 6.0 million and $ 15.1 million during the three and six months ended June 30, 2020, respectively.

The Company received cash payments from Middlemount of $ 2.3 million during the six months ended June 30, 2021.

No payments were received from from Middlemount during the six months ended June 30, 2020.

One of the Company’s Australian subsidiaries and the other shareholder of Middlemount are parties to an agreement, as amended from time to time, to provide a revolving loan (Revolving Loans) to Middlemount.

The Company’s participation in the Revolving Loans will not, at any time, exceed its 50 % equity interest of the revolving loan limit.

At March 31, 2021, the revolving loan limit was $ 160 million Australian dolla rs and the Revolving Loans were not fully drawn upon by Middlemount.

At June 30, 2021, the revolving loan limit was $ 160 million Australian dolla rs and the Revolving Loans were not fully drawn upon by Middlemount.

The Revolving Loans bear interest at 10 % per annum and expire on December 31, 2021.

T he value of the portion of the Revolving Loans due to the Company’s Australian subsidiary was $ 43.3 million and $ 46.2 million as of March 31, 2021 and December 31, 2020, respectively, with the decreas e during the three months ended March 31, 2021 primarily attributable to payments made by Middlemount.

As of both March 31, 2021 and December 31, 2020, the financing receivables and Revolving Loans are accounted for as in-substance common stock due to the limited fair value attributed to Middlemount’s equi ty.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

T he value of the portion of the Revolving Loans due to the Company’s Australian subsidiary was $ 42.9 million and $ 46.2 million as of June 30, 2021 and December 31, 2020, respectively, with the decreas e during the six months ended June 30, 2021 primarily attributable to payments made by Middlemount.

As of both June 30, 2021 and December 31, 2020, the financing receivables and Revolving Loans are accounted for as in-substance common stock due to the limited fair value attributed to Middlemount’s equi ty.

(7) Derivatives and Fair Value Measurements

2 unchanged sentences

These risk management activities are actively monitored for compliance with the Company’s risk management policies.

As of March 31, 2021, the Company had currency options outstanding with an aggregate notional amount of $ 575.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending December 31, 2021.

As of June 30, 2021, the Company had currency options outstanding with an aggregate notional amount of $ 580.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending March 31, 2022.

The instruments are quarterly average rate options which entitle the Company to receive payment on the notional amount should the quarterly average Australian dollar-to-U.S.

dollar exchange rate exceed amounts ranging from $ 0.76 to $ 0.81 over the nine-month period ending December 31, 2021.

As of March 31, 2021, the Company held coal-related financial contracts related to a portion of its forecasted sales for an aggregate notional volume of 1.5 million tonnes.

Such financial contracts include futures, forwards and options.

Of the aggregate notional volume, 0.5 million tonnes will settle in 2021 and the remainder will settle in 2022.

The Company had no diesel fuel or interest rate derivatives in place as of March 31, 2021.

dollar exchange rate exceed amounts ranging from $ 0.80 to $ 0.81 over the nine-month period ending March 31, 2022.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of June 30, 2021, the Company held coal-related financial contracts related to a portion of its forecasted sales for an aggregate notional volume of 2.8 million tonnes.

Such financial contracts may include include futures, forwards and options.

Of the aggregate notional volume, 0.4 million tonnes will settle during the second half of 2021, 2.0 million tonnes will settle in 2022, and the remainder will settle in 2023.

The Company had no diesel fuel or interest rate derivatives in place as of June 30, 2021.

Coal Trading Activities

6 unchanged sentences

The fair value of derivatives reflected in the accompanying condensed consolidated balance sheets are set forth in the table below.

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Asset Derivative Liability Derivative Asset Derivative Liability Derivative

8 unchanged sentences

The net amount of asset derivatives, net of margin, are included in “Other current assets” and the net amount of liability derivatives, net of margin, are included in “Accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheets.

The Company had a current asset representing cash collateral held as initial margin for derivative positions primarily related to coal derivatives of $ 6.5 million and $ 3.0 million at March 31, 2021 and December 31, 2020, respectively.

The Company had a current asset representing cash collateral held as initial margin for derivative positions primarily related to coal derivatives of $ 14.4 million and $ 3.0 million at June 30, 2021 and December 31, 2020, respectively.

These amounts are not included with the derivatives presented in the table above and are included in “Other current assets” in the accompanying condensed consolidated balance sheets.

Currently, the Company does not seek cash flow hedge accounting treatment for its derivative financial instruments and thus changes in fair value are reflected in current earnings.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Currently, the Company does not seek cash flow hedge accounting treatment for its currency- or coal-related derivative financial instruments and thus changes in fair value are reflected in current earnings.

The tables below show the amounts of pre-tax gains and losses related to the Company’s derivatives.

Three Months Ended March 31, 2021

Total (loss) gain recognized in income Gain realized in income on derivatives Unrealized loss recognized in income on derivatives

Three Months Ended June 30, 2021

Total (loss) gain recognized in income Gain (loss) realized in income on derivatives Unrealized (loss) gain recognized in income on derivatives

Financial Instrument

4 unchanged sentences

Total $ ( 7.4 ) $ 13.7 $ ( 21.1 )

Three Months Ended March 31, 2020

Total loss recognized in income (Loss) gain realized in income on derivatives Unrealized gain (loss) recognized in income on derivatives

Three Months Ended June 30, 2020

Total gain (loss) recognized in income (Loss) gain realized in income on derivatives Unrealized gain recognized in income on derivatives

Financial Instrument

4 unchanged sentences

Total $ 14.7 $ 3.2 $ 11.5

During the three months ended March 31, 2021 and 2020, gains and losses on foreign currency option contracts were included in “Operating costs and expenses,” and gains and losses on coal contracts related to forecasted sales and those related to coal trading contracts were included in “Revenues” in the accompanying unaudited condensed consolidated statements of operations.

Six Months Ended June 30, 2021

Total (loss) gain recognized in income Gain (loss) realized in income on derivatives Unrealized (loss) gain recognized in income on derivatives

Financial Instrument

(Dollars in millions)

Foreign currency option contracts $ ( 4.2 ) $ 4.6 $ ( 8.8 )

Coal contracts related to forecasted sales 0.6 26.2 ( 25.6 )

Coal trading contracts 0.7 ( 0.1 ) 0.8

Total $ ( 2.9 ) $ 30.7 $ ( 33.6 )

Six Months Ended June 30, 2020

Total gain (loss) recognized in income (Loss) gain realized in income on derivatives Unrealized gain (loss) recognized in income on derivatives

Financial Instrument

(Dollars in millions)

Foreign currency option contracts $ 1.3 $ ( 1.6 ) $ 2.9

Coal contracts related to forecasted sales 4.1 ( 0.6 ) 4.7

Coal trading contracts ( 0.3 ) 2.2 ( 2.5 )

Total $ 5.1 $ — $ 5.1

During the three and six months ended June 30, 2021 and 2020, gains and losses on foreign currency option contracts were included in “Operating costs and expenses,” and gains and losses on coal contracts related to forecasted sales and those related to coal trading contracts were included in “Revenues” in the accompanying unaudited condensed consolidated statements of operations.

The Company classifies the cash effects of its derivatives within the “Cash Flows From Operating Activities” section of the unaudited condensed consolidated statements of cash flows.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value Measurements

4 unchanged sentences

and Level 3 - inputs are unobservable, or observable but cannot be market-corroborated, requiring the Company to make assumptions about pricing by market participants.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables set forth the hierarchy of the Company’s net financial asset positions for which fair value is measured on a recurring basis:

March 31, 2021

June 30, 2021

Level 1 Level 2 Level 3 Total

20 unchanged sentences

Other Financial Instruments .

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of March 31, 2021 and December 31, 2020:

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of June 30, 2021 and December 31, 2020:

• Cash and cash equivalents, restricted cash, accounts receivable, including those within the Company’s accounts receivable securitization program, notes receivable and accounts payable have carrying values which approximate fair value due to the short maturity or the liquid nature of these instruments.

• Long-term debt fair value estimates are based on observed prices for securities when available (Level 2), and otherwise on estimated borrowing rates to discount the cash flows to their present value (Level 3).

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Market risk associated with the Company’s fixed- and variable-rate long-term debt relates to the potential reduction in the fair value and negative impact to future earnings, respectively, from an increase in interest rates.

The fair value of debt, shown below, is principally based on reported market values and estimates based on interest rates, maturities, credit risk, underlying collateral and completed market transactions, which have been limited in recent history.

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(Dollars in millions)

3 unchanged sentences

Estimated fair value $ 1,179.4 $ 987.6

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s risk management function, which is independent of the Company’s coal trading function, is responsible for valuation policies and procedures, with oversight from executive management.

1 unchanged sentence

The Company’s exposure is substantially with electric utilities, energy marketers, steel producers and nonfinancial trading houses.

The Company had no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2021 and 2020.

The Company had no transfers between Levels 1, 2 and 3 during the three and six months ended June 30, 2021 and 2020.

The Company’s policy is to value all transfers between levels using the beginning of period valuation.

(8) Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of March 31, 2021 and December 31, 2020 is set forth in the table below:

March 31, 2021 December 31, 2020

The composition of property, plant, equipment and mine development, net, as of June 30, 2021 and December 31, 2020 is set forth in the table below:

June 30, 2021 December 31, 2020

(Dollars in millions)

5 unchanged sentences

Asset Impairment and Other At-Risk Assets

The Company has identified certain assets with an aggregate carrying value of approximately $ 1.2 billion at March 31, 2021 in its Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S.

During the three and six months ended June 30, 2020, the Company recognized an asset impairment charge of $ 1,418.1 million related to its North Antelope Rochelle Mine of the Powder River Basin Mining segment.

Of this amount, $ 1,393.7 million related to the property, plant, equipment and mine development assets;

$ 19.9 million related to operating lease right-of-use assets;

and $ 4.5 million related to contract-based intangible assets.

The outlook for the mine was negatively impacted by the accelerated decline of coal-fired electricity generation in the U.S., driven by the reduced utilization of plants and plant retirements, sustained low natural gas pricing and the increased use of renewable energy sources.

These factors led to the expectation of reduced future sales volumes.

The impairment charge was based upon the remaining estimated discounted cash flows of the mine.

Such cash flows were based upon estimates which generally constitute unobservable Level 3 inputs under the fair value hierarchy, including, but not limited to, future tons sold, coal prices for unpriced coal, production costs (including costs for labor, commodity supplies and contractors), transportation costs and a risk-adjusted, cost of capital.

No asset impairment charges were recorded during the three and six months ended June 30, 2021.

The Company has identified certain assets with an aggregate carrying value of approximately $ 1.2 billion at June 30, 2021 in its Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S.

Thermal Mining and Corporate and Other segments whose recoverability is most sensitive to coal pricing, cost pressures, customer demand, customer concentration risk and future economic viability.

The Company conducted a review of those assets for recoverability as of March 31, 2021 and determined that no impairment charges were necessary as of that date.

The Company conducted a review of those assets for recoverability as of June 30, 2021 and determined that no impairment charges were necessary as of that date.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has operating and finance leases for mining and non-mining equipment, office space and certain other facilities under various non-cancellable agreements.

7 unchanged sentences

Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments, and the Company assumes that no amounts could be recovered from third parties.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of lease expense during the three months ended March 31, 2021 and 2020 were as follows:

Three Months Ended March 31,

The components of lease expense during the three and six months ended June 30, 2021 and 2020 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

9 unchanged sentences

Total finance lease cost $ 2.3 $ 1.1 $ 3.4 $ 4.7

Supplemental balance sheet information related to leases at March 31, 2021 and December 31, 2020 was as follows:

March 31, 2021 December 31, 2020

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental balance sheet information related to leases at June 30, 2021 and December 31, 2020 was as follows:

June 30, 2021 December 31, 2020

(Dollars in millions)

17 unchanged sentences

Finance leases 9.0 %

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental cash flow information related to leases during the three months ended March 31, 2021 and 2020 was as follows:

Three Months Ended March 31,

Supplemental cash flow information related to leases during the three and six months ended June 30, 2021 and 2020 was as follows:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

6 unchanged sentences

Finance leases 16.7 0.8 20.3 0.9

The Company's leases have remaining lease terms ranging from less than 1 year to 21.0 years years, some of which include options to extend the terms deemed reasonably certain of exercise.

T he contractual maturities of lease liabilities were as follows:

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company's leases have remaining lease terms ranging from less than 1 year to 20.5 years, and may include options to extend the terms, as applicable.

The contractual maturities of lease liabilities were as follows:

Period Ending December 31, Operating Leases Finance Leases

8 unchanged sentences

(10) Income Taxes

The Company's effective tax rate before remeasurement for the three months ended March 31, 2021 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company’s income tax benefit of $ 1.8 million and income tax provision of $ 3.0 million for the three months ended March 31, 2021 and 2020, respectively, included tax benefits of $ 0.2 million and $ 3.3 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company's effective tax rate before remeasurement for the six months ended June 30, 2021 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company’s income tax benefit of $ 4.8 million and $ 0.2 million for the three months ended June 30, 2021 and 2020, respectively, included a tax benefit of $ 0.3 million and a tax provision of $ 2.6 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax benefit of $ 6.6 million and income tax provision of $ 2.8 million for the six months ended June 30, 2021 and 2020, respectively, included tax benefits of $ 0.5 million and $ 0.7 million, respectively, related to the remeasurement of foreign income tax accounts.

As described in Note 11.

2 unchanged sentences

tax purposes a debtor recognizes cancellation of debt income (CODI) upon discharge of its outstanding indebtedness for an amount of consideration less than the adjusted issue price of such indebtedness.

The Company will recognize CODI from the Refinancing Transactions of approximately $ 60 million, and the income will be offset by the Company’s operating losses.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recognized CODI from the Refinancing Transactions of approximately $ 60 million, and the income will be offset by the Company’s operating losses.

(11) Long-term Debt

The Company’s total funded indebtedness (Indebtedness) as of March 31, 2021 and December 31, 2020 consisted of the following:

Debt Instrument (defined below, as applicable) March 31, 2021 December 31, 2020

The Company’s total funded indebtedness (Indebtedness) as of June 30, 2021 and December 31, 2020 consisted of the following:

Debt Instrument (defined below, as applicable) June 30, 2021 December 31, 2020

(Dollars in millions)

4 unchanged sentences

6.375 % Senior Secured Notes due March 2025 (2025 Notes)

Senior Secured Term Loan due 2024 (Co-Issuer Term Loan) 206.0 —

Senior Secured Term Loan due 2024 (Co-Issuer Term Loans) 206.0 —

Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan) 368.6 388.2

5 unchanged sentences

Long-term debt $ 1,324.1 $ 1,502.9

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Refinancing Transactions

8 unchanged sentences

As such, no gain or loss was recorded in connection with the Exchange Offer.

Fees paid to third parties of $ 10.6 million were included in “Interest expense” in the accompanying unaudited condensed consolidated statements of operations during the three months ended March 31, 2021.

Following the settlement of the Exchange Offer, approximately $ 60.3 million aggregate principal amount of the 2022 Notes remain outstanding and are governed by the existing senior notes’ indenture (the Existing Indenture), as amended by the supplemental indenture described below.

Concurrently with the Exchange Offer, the Company solicited consents from holders of the 2022 Notes to certain proposed amendments to its Existing Indenture to (i) eliminate substantially all of the restrictive covenants, certain events of default applicable to the 2022 Notes and certain other provisions contained in the Existing Indenture and (ii) release the collateral securing the 2022 Notes and eliminate certain other related provisions contained in the Existing Indenture.

Fees paid to third parties of $ 10.6 million were included in “Interest expense” in the accompanying unaudited condensed consolidated statements of operations during the six months ended June 30, 2021.

Concurrently with the Exchange Offer, the Company solicited consents from holders of the 2022 Notes to certain proposed amendments to its existing senior notes’ indenture (the Existing Indenture) to (i) eliminate substantially all of the restrictive covenants, certain events of default applicable to the 2022 Notes and certain other provisions contained in the Existing Indenture and (ii) release the collateral securing the 2022 Notes and eliminate certain other related provisions contained in the Existing Indenture.

The Company received the requisite consents from holders of the 2022 Notes and entered into a supplemental indenture to the Existing Indenture, which became operative on January 29, 2021.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In connection with the Refinancing Transactions, the Company restructured the revolving loans under its existing credit agreement (the Credit Agreement) by (i) making a pay down of revolving loans thereunder in the aggregate amount of $ 10.0 million, (ii) the Co-Issuers incurring $ 206.0 million of term loans under a credit agreement, dated as of the Settlement Date (Co-Issuer Term Loans, Co-Issuer Term Loan Agreement), (iii) the Company entering into a letter of credit facility (the Company LC Agreement) and (iv) amending the Credit Agreement (collectively, the Revolver Transactions).

4 unchanged sentences

Beginning March 31, 2021, interest is payable on March 31, June 30, September 30 and December 31 of each year.

During the three months ended March 31, 2021, the Company recorded interest expense of $ 3.6 million related to the Co-Issuer Notes.

During the three and six months ended June 30, 2021, the Company recorded interest expense of $ 5.3 million and $ 8.9 million, respectively, related to the Co-Issuer Notes.

The Co-Issuer Notes are subject to amortization at the end of each six-month period, beginning with June 30, 2021, whereby the Excess Cash Flow (as defined in the Co-Issuer Notes Indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of the Co-Issuer Notes and the Co-Issuer Term Loans on a pro rata basis, provided that the liquidity attributable to the Co-Issuers would not fall below $ 60.0 million.

The Co-Issuer Notes Indenture contains customary covenants that, among other things, limit the Co-Issuers’ and their subsidiaries’ ability to incur additional Indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from subsidiaries, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets, and place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Co-Issuers.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Co-Issuer Notes are not guaranteed by any of the Co-Issuers’ subsidiaries and thus are structurally subordinated to any existing or future Indebtedness or other liabilities, including trade payables, of any such subsidiaries.

10 unchanged sentences

The Peabody Notes bear interest at an annual rate of 8.500 %, consisting of 6.000 % per annum in cash and an additional 2.500 % per annum to be paid-in-kind through an increase of the principal amount of the outstanding Peabody Notes, which is payable on June 30 and December 31 of each year, commencing on June 30, 2021.

During the three months ended March 31, 2021, the Company recorded interest expense of $ 3.1 million related to the Peabody Notes, which included approximately $ 0.8 million of in-kind interest.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the three and six months ended June 30, 2021, the Company recorded interest expense of $ 3.9 million and $ 7.0 million, respectively, related to the Peabody Notes, which included in-kind interest of approximately $ 0.8 million and $ 1.6 million, respectively.

As a requirement of the Exchange Offer, during the three months ended March 31, 2021, the Company purchased $ 22.4 million of the Peabody Notes at 80 % of their accreted value, plus accrued and unpaid interest.

In connection with the purchases, the Company recognized a net gain of $ 3.5 million to “Gain on early debt extinguishment.” The notes were subsequently canceled.

In connection with the purchases, the Company recognized a net gain of $ 3.5 million to “Net gain on early debt extinguishment” during the six months ended June 30, 2021.

The notes were subsequently canceled.

The Peabody Notes Indenture contains customary covenants that, among other things, limit the Company’s and its restricted subsidiaries’ ability to incur additional Indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from restricted subsidiaries, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of its assets, and place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company.

The Peabody Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the Peabody Guarantors (as defined below) on the Peabody Collateral (as defined below).

The obligations are secured on a pari passu basis by the same collateral that secures the 6.375 % senior secured notes due 2025 (the 2025 Notes), the Credit Agreement and the Company LC Agreement described below.

The obligations are secured on a pari passu basis by the same collateral that secures the 6.375 % Senior Secured Notes due March 2025 (the 2025 Notes), the Credit Agreement and the Company LC Agreement described below.

Co-Issuer Term Loans

1 unchanged sentence

The Company paid aggregate debt issuance costs of $ 7.1 million, that are being amortized over its term.

During the three months ended March 31, 2021, the Company recorded interest expense of $ 3.7 million related to the Co-Issuer Term Loans.

During the three and six months ended June 30, 2021, the Company recorded interest expense of $ 5.5 million and $ 9.2 million, respectively, related to the Co-Issuer Term Loans.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Co-Issuer Term Loan Agreement contains customary covenants that, among other things, limit the Co-Issuers’ and their subsidiaries’ ability to incur additional Indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from subsidiaries, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets, and place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Co-Issuers.

6 unchanged sentences

Undrawn letters of credit under the Company LC Agreement bear interest at 6.00 % per annum and unused commitments are subject to a 0.50 % per annum commitment fee.

During the three months ended March 31, 2021, the Company recorded interest expense and fees of $ 4.1 million related to the Company LC Agreement.

During the three and six months ended June 30, 2021, the Company recorded interest expense and fees of $ 5.8 million and $ 9.9 million, respectively, related to the Company LC Agreement.

In connection with the Revolver Transactions, the Company amended its Credit Agreement to make certain changes in consideration of the Company LC Agreement.

4 unchanged sentences

In addition, the Company LC Agreement contains events of default substantially similar to those described above for the Peabody Notes.

Under the Company LC Agreement, the Company is permitted to effectuate open market debt repurchases, subject to certain limitations, including, but not limited to:

(i) the Company’s unrestricted subsidiaries’ liquidity must be greater than or equal to $ 200.0 million after giving effect to such repurchases and (ii) for every $ 4 of principal repurchased in any fiscal quarter, the Company must make an offer on a pro rata basis to purchase $ 1 of principal amount of debt from holders of the Peabody Notes and Company LC Agreement within 30 days of the end of such fiscal quarter at a price equal to the weighted average repurchase price paid over that quarter.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The indenture which governs the Peabody Notes and the Company LC Agreement allows the Company to make open market debt repurchases, subject to certain limitations, including, but not limited to:

(i) the Company’s unrestricted subsidiaries’ liquidity must be greater than or equal to $ 200.0 million after giving effect to such repurchases and (ii) for every $ 4 of principal repurchased in any fiscal quarter, the Company must make an offer on a pro rata basis to purchase $ 1 of principal amount of debt from holders of the Peabody Notes and the priority lien obligations under the Company LC Agreement within 30 days of the end of such fiscal quarter at a price equal to the weighted average repurchase price paid over that quarter (Mandatory Repurchase Offer).

6.375 % Senior Secured Notes

On February 15, 2017, the Company entered into the Existing Indenture with Wilmington Trust, National Association, as trustee, relating to its issuance of $ 500.0 million aggregate principal amount of the 2025 Notes.

The 2025 Notes were issued on February 15, 2017 in a private transaction exempt from the registration requirements of the Securities Act of 1933.

The 2025 Notes were issued on February 15, 2017 in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act).

The 2025 Notes were issued at par value.

1 unchanged sentence

Interest payments on the 2025 Notes are scheduled to occur each year on March 31 and September 30 until maturity.

During the three months ended March 31, 2021 and 2020, the Company recorded interest expense of $ 9.2 million and $ 9.1 million, respectively, related to the 2025 Notes.

On August 9, 2018, the Company executed an amendment to the Existing Indenture following the solicitation of consents from the requisite majority of holders of the 2025 Notes.

The amendment permits a category of restricted payments at any time not to exceed the sum of $ 650.0 million, plus an additional $ 150.0 million per calendar year, commencing with calendar year 2019, with unused amounts in any calendar year carrying forward to and available for restricted payments in any subsequent calendar year.

The Company paid consent fees to 2025 Note holders which amounted to $ 14.9 million.

Such consent fees were capitalized as additional debt issuance costs to be amortized over the term of the 2025 Notes.

The Company recorded interest expense of $ 9.2 million during both the three months ended June 30, 2021 and 2020, and $ 18.4 million and $ 18.3 million during the six months ended June 30, 2021 and 2020, respectively, related to the 2025 Notes.

With respect to the 2025 Notes, the Existing Indenture contains customary conditions of default and imposes certain restrictions on the Company’s activities, including its ability to incur debt, incur liens, make investments, engage in fundamental changes such as mergers and dissolutions, dispose of assets, enter into transactions with affiliates and make certain restricted payments, such as cash dividends and share repurchases.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The 2025 Notes rank senior in right of payment to any subordinated Indebtedness and equally in right of payment with any senior Indebtedness to the extent of the collateral securing that Indebtedness.

7 unchanged sentences

The Company also voluntarily repaid an additional $ 500.0 million of Senior Secured Term Loan principal in various installments.

At March 31, 2021 the Senior Secured Term Loan had a balance of $ 387.3 million.

At June 30, 2021 the Senior Secured Term Loan had a balance of $ 368.6 million.

The Senior Secured Term Loan requires quarterly principal payments of $ 1.0 million and periodic interest payments through December 2024 with the remaining balance due in March 2025.

During the three months ended March 31, 2021 and 2020, the Company recorded interest expense of $ 3.3 million and $ 4.9 million, respectively, related to the Senior Secured Term Loan, which bore interest at LIBOR plus 2.75 % per annum as of March 31, 2021.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recorded interest expense of $ 3.5 million and $ 3.8 million, during the three months ended June 30, 2021 and 2020, respectively, and $ 6.8 million and $ 8.7 million during the six months ended June 30, 2021 and 2020, respectively, related to the Senior Secured Term Loan, which bore interest at LIBOR plus 2.75 % per annum as of June 30, 2021.

In connection with the Revolver Transactions, the Company amended the Credit Agreement to make certain changes in consideration of the Company LC Agreement.

After giving effect to the Revolver Transactions, there remain no revolving commitments or revolving loans under the Credit Agreement.

Further, all covenants specific to the former revolving credit facility under the Credit Agreement were eliminated in connection with the Refinancing Transactions and were not applicable at March 31, 2021.

During the three months ended March 31, 2021 and 2020, the Company recorded interest expense and fees of $ 1.4 million and $ 1.7 million, respectively, related to the revolving loan facility.

Further, all financial covenants specific to the former revolving credit facility under the Credit Agreement were eliminated in connection with the Refinancing Transactions and were not applicable at June 30, 2021.

The Company recorded interest expense and fees of $ 1.4 million during the six months ended June 30, 2021, and $ 4.0 million and $ 5.7 million, during the three and six months ended June 30, 2020, respectively, related to the revolving loan facility.

No interest expense or fees related to the revolving loan facility were recorded during the three months ended June 30, 2021.

The Credit Agreement contains customary conditions of default and imposes certain restrictions on the Company’s activities, including its ability to incur liens, incur debt, make investments, engage in fundamental changes such as mergers and dissolutions, dispose of assets, enter into transactions with affiliates and make certain restricted payments, such as cash dividends and share repurchases.

1 unchanged sentence

The obligations are secured on a pari passu basis by the same collateral securing the 2025 Notes and the other priority lien debt of the Company, including the Peabody Notes and the Company LC Agreement described above.

The Company was compliant with all covenants under its debt agreements at March 31, 2021.

The Company was compliant with all covenants under its debt agreements including the minimum liquidity covenant under the Company LC Agreement at June 30, 2021.

Subsequent Financing Transactions

Subsequent to the Refinancing Transactions, the Company completed a series of financing transactions intended to improve its capital structure.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In June 2021, the Company announced an at-the-market equity offering program pursuant to which the Company could offer and sell up to 12.5 million shares of its common stock.

Such sales are allowed using methods permissible under Rule 415 of the Securities Act.

The shares are offered and sold pursuant to the Company’s Registration Statement on Form S-3, which was declared effective by the Securities and Exchange Commission on April 23, 2021, as supplemented by a prospectus supplement dated June 4, 2021, relating to the offer and sale of the shares.

During the three months ended June 30, 2021, the Company sold approximately 8.1 million shares for net cash proceeds of $ 65.1 million.

Subsequent to June 30, 2021, the Company settled sales of an additional 2.7 million shares for net proceeds of $ 21.5 million.

During the three months ended June 30, 2021, the Company retired $ 18.0 million of Peabody Notes, $ 17.4 million of 2025 Notes and $ 17.8 million of its Senior Secured Term Loan primarily through various open market purchases at an aggregate cost of $ 39.2 million.

The Company recorded a gain on early debt extinguishment of $ 11.9 million, net of debt issuance costs and original issue discount related to the retired debt of $ 2.1 million.

Also during the three months ended June 30, 2021, the Company completed multiple bilateral transactions with holders of the 2022 Notes in which the Company issued an aggregate 4.5 million shares of its common stock in exchange for $ 30.9 million aggregate principal amount of the 2022 Notes.

Based upon the fair value of the Company’s common stock at the respective settlement dates, the Company recorded a net loss on early debt extinguishment of $ 0.1 million in connection with the transactions.

The issuance of shares of common stock in exchange for the 2022 Notes was exempt from registration under the Securities Act, on the basis that the exchange was completed with existing holders of the Company’s securities, and no commission or other remuneration was paid or given for soliciting the exchange.

The Company also reached agreements to retire an additional $ 49.5 million of aggregate principal, which will settle subsequent to June 30, 2021.

This included $ 44.0 million of its Senior Secured Term Loan due 2025 and $ 1.5 million of 2025 Notes through similar open market purchases for an aggregate cost of $ 30.2 million, and by issuing an aggregate 0.5 million shares of its common stock in exchange for $ 4.0 million aggregate principal amount of the 2022 Notes in a similar manner noted above.

Such amounts are reflected within the current portion of long-term debt in the accompanying condensed consolidated balance sheets at June 30, 2021.

As a result of the Company’s open market purchases of its debt during the three months ended June 30, 2021, on July 7, 2021, the Company announced a Mandatory Repurchase Offer of up to $ 13.3 million of its 2024 Peabody Notes, at 73.840 % of their aggregate accreted value, plus accrued and unpaid interest, and a concurrent repurchase offer of priority lien obligations under the Company LC Agreement.

The offers expire on August 6, 2021, unless extended by the Company.

Finance Lease Obligations

4 unchanged sentences

Net periodic pension benefit included the following components:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

Service cost for benefits earned $ 0.1 $ 0.1 $ 0.1 $ 0.1

Interest cost on projected benefit obligation 5.1 7.0 10.2 14.0

1 unchanged sentence

Net periodic pension benefit $ ( 0.5 ) $ ( 0.3 ) $ ( 1.1 ) $ ( 0.7 )

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Annual contributions to the qualified plans are made in accordance with minimum funding standards and the Company’s agreement with the Pension Benefit Guaranty Corporation.

Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006 (generally 80 %).

As of March 31, 2021, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

Minimum funding standards are legislated by the Employee Retirement Income Security Act of 1974 and are modified by pension funding stabilization provisions included in the Moving Ahead for Progress in the 21st Century Act of 2012, the Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015 and the American Rescue Plan Act of 2021.

The Company is not required to make any contributions to its qualified pension plans in 2021 based on minimum funding requirements and does not expect to make any discretionary contributions in 2021.

As of June 30, 2021, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

The Company is not required to make any contributions to its qualified pension plans in 2021 based on minimum funding requirements and does not expect to make any discretionary contributions in 2021 at this time.

Net periodic postretirement benefit (benefit) cost included the following components:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

2 unchanged sentences

Expected return on plan assets ( 0.2 ) ( 0.4 ) ( 0.4 ) ( 0.8 )

( 0.2 ) ( 0.4 )

Amortization of prior service credit ( 11.0 ) ( 2.2 ) ( 22.0 ) ( 4.4 )

( 11.0 ) ( 2.2 )

Net periodic postretirement benefit (benefit) cost $ ( 8.0 ) $ 3.9 $ ( 16.1 ) $ 7.9

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In September 2020, the Company announced changes to its postretirement health care benefit plans for non-represented employees and retirees which reduced its accumulated postretirement benefit obligation, as further described in Note 15.

2 unchanged sentences

The Company has established two Voluntary Employees Beneficiary Association (VEBA) trusts to pre-fund a portion of benefits for non-represented and represented retirees.

The Company does not expect to make any discretionary contributions to either of the VEBA trusts in 2021 and plans to utilize VEBA assets to make benefit payments.

The Company does not expect to make any discretionary contributions to either of the VEBA trusts in 2021 and plans to utilize a portion of VEBA assets to make certain benefit payments.

(13) Accumulated Other Comprehensive Income

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto recorded during the three months ended March 31, 2021:

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto recorded during the six months ended June 30, 2021:

Foreign Currency Translation

7 unchanged sentences

Current period change ( 0.4 ) — ( 0.4 )

March 31, 2021 $ 1.6 $ 193.0 $ 194.6

Postretirement health care and life insurance benefits reclassified from other comprehensive income to earnings of $ 11.0 million and $ 2.2 million du ring the three months ended March 31, 2021 and 2020, respectively, are included in “Net periodic benefit (credit) costs, excluding service cost” in the unaudited condensed consolidated statements of operations.

June 30, 2021 $ 1.4 $ 182.0 $ 183.4

Postretirement health care and life insurance benefits reclassified from other comprehensive income to earnings of $ 11.0 million and $ 2.2 million during the three months ended June 30, 2021 and 2020, respectively, and $ 22.0 million and $ 4.4 million du ring the six months ended June 30, 2021 and 2020, respectively, are included in “Net periodic benefit (credit) costs, excluding service cost” in the unaudited condensed consolidated statements of operations.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(14) Other Events

Cost Repositioning Program

From time to time, the Company initiates restructuring activities in connection with its repositioning efforts to appropriately align its cost structure or optimize its coal production relative to prevailing market conditions.

1 unchanged sentence

Costs associated with restructuring activities are recognized in the period incurred.

Such charges included as “Restructuring charges” in the Company's unaudited condensed consolidated statements of operations amounted to $ 2.1 million and $ 6.5 million for the three months ended March 31, 2021 and 2020, respectively, and were associated with both involuntary and voluntary workforce reductions.

Such charges included as “Restructuring charges” in the Company's unaudited condensed consolidated statements of operations amounted to $ 2.1 million and $ 4.2 million for the three and six months ended June 30, 2021, respectively, and $ 16.5 million and $ 23.0 million for the three and six months ended June 30, 2020, respectively, were associated with both involuntary and voluntary workforce reductions.

The Shoal Creek Mine remains idled as the Company continues activities to increase productivity, lower costs and improve yields from the operation in the future.

The restart of mine production and coal shipments is contingent upon successful completion of these initiatives and stable customer demand.

Included in the initiatives is a preparation plant upgrade project, which is anticipated to be commissioned by the middle of the third quarter of 2021.

Additionally, the Shoal Creek labor contract expired on April 1, 2021 and negotiations with the workforce are ongoing.

While discussions are ongoing with customers and workforce, the Metropolitan Mine full workforce returned to the mine in early May.

Development work at the mine has been ongoing through the idle period and longwall production is anticipated to restart in the second quarter of 2021, with ramp up to full production in the third quarter of 2021.

The preparation plant upgrade project remains on schedule with completion expected in the middle of the third quarter of 2021.

The Shoal Creek labor contract expired in April 2021, and negotiations with the workforce are ongoing.

The Metropolitan Mine full workforce returned to the mine in early May.

Development work at the mine has been ongoing and longwall production restarted late in the second quarter of 2021, with a ramp up to planned production levels in the third quarter of 2021.

The underground workforce enterprise agreement expired in January 2021 and after a period of ongoing negotiation, an application was made to terminate the underground labor agreement.

That application is pending.

Subsequent to June 30, 2021, the Company executed transactions to sell its closed Millennium and Wilkie Creek Mines to reduce its closed mine reclamation liabilities and associated costs.

The Company is in process of assessing the financial impacts of the sales, but anticipates recording cumulative gains of $ 40 million to $ 50 million in the third quarter of 202 1, with minimal cash consideration received.

(15) Earnings per Share (EPS)

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Dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For all but the performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method.

For all but performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method.

Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period.

Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation.

For the performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted.

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 1.3 million and 3.0 million for the three months ended March 31, 2021 and 2020, respectively, because to do so would have been anti-dilutive for those periods.

For performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted.

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 1.2 million and 2.2 million for the three months ended June 30, 2021 and 2020, respectively, and 1.2 million and 2.5 million for the six months ended June 30, 2021 and 2020, respectively, because to do so would have been anti-dilutive for those periods.

Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company’s average stock price during the applicable period.

Anti-dilution also occurs when a company reports a net loss from continuing operations, and the dilutive impact of all share-based compensation awards are excluded accordingly.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(In millions, except per share data)

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(16) Financial Instruments and Other Guarantees

In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-she et risk and are not reflected in the accompanying condensed consolidated balance sheets.

At March 31, 2021, such instruments included $ 1,570.8 million of surety bonds and $ 423.4 million of letters of credit.

The Company is a party to various guarantees and financial instruments that carry off-balance-she et risk and are not reflected in the accompanying condensed consolidated balance sheets.

At June 30, 2021, such instruments included $ 1,555.0 million of surety bonds and $ 435.4 million of letters of credit.

Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees.

Reclamation bonding requirements are typically established by statute or under mining permits.

At June 30, 2021, the Company’s asset retirement obligations of $ 741.8 million were supported by surety bonds of $ 1,379.0 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement.

Letters of credit issued at June 30, 2021 which served as collateral for surety bonds in support of asset retirement obligations amounted to $ 310.5 million.

In November 2020, the Company entered into a Surety Agreement with the providers of 99 % of its surety bond portfolio (Participating Sureties) to resolve previous collateral demands made by the Participating Sureties.

In accordance with the Surety Agreement, the Company initially provided $ 75.0 million of collateral, in the form of letters of credit.

Upon completion of the Refinancing Transactions described in Note 11.

“Long-term Debt,” other provisions of the Surety Agreement became effective.

In particular, the Company granted second liens on $ 200.0 million of certain mining equipment and will post an additional $ 25.0 million of collateral per year from 2021 through 2024 for the benefit of the Participating Sureties.

The collateral postings may also further increase to the extent the Company generates more than $ 100.0 million of free cash flow (as defined in the Surety Agreement) in any twelve-month period or has cumulative asset sales in excess of $ 10.0 million, as of the last quarter end during the term of the agreement.

Further, the Participating Sureties have agreed to a standstill through the earlier of December 31, 2025, or the maturity of the Credit Agreement (currently March 31, 2025), during which time, the Participating Sureties will not demand any additional collateral, draw on letters of credit posted for the benefit of themselves or cancel any existing surety bond.

The Company will not pay dividends or make share repurchases during the standstill period, unless otherwise agreed between parties.

In connection withe Refinancing Transactions, at the Settlement Date, all letters of credit issued under the Company’s former revolving credit facility were deemed issued under the Company LC Agreement in support of the same obligations.

The Company periodically evaluates the instruments for on-balance sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance.

The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying condensed consolidated balance sheets.

In connection with the Refinancing Transactions described in Note 11.

“Long-term Debt,” at the Settlement Date, all letters of credit issued under the Company’s former revolving credit facility were deemed issued under the Company LC Agreement in support of the same obligations.

The Company is required to provide various forms of financial assurance in support of its mining reclamation obligations in the jurisdictions in which it operates.

Such requirements are typically established by statute or under mining permits.

At March 31, 2021, the Company’s asset retirement obligations of $ 735.9 million were supported by surety bonds of $ 1,394.5 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement.

Letters of credit issued at March 31, 2021 which served as collateral for surety bonds in support of asset retirement obligations amounted to $ 297.7 million.

PEABODY ENERGY CORPORATION

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The Securitization Program does not receive off-balance sheet accounting treatment due to the Company’s ability to repurchase the receivables in certain circumstances.

At March 31, 2021, the Com pany had no outstanding borrowings and $ 120.8 million o f letters of credit issued under the Securitization Program.

The letters of credit were primarily in support of portions of the Company’s obligations for property and casualty insurance.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 0.8 million at March 31, 2021.

The Company had $ 43.5 million of collateral posted under the Securitization Program at March 31, 2021 and none at December 31, 2020 .

The Company incurred interest and fees associated with the Securitization Program of $ 0.7 million during the three months ended March 31, 2021 and 2020, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Cash Collateral Arrangements and Restricted Cash

From time to time, the Company is required to remit cash to certain regulatory authorities and other third parties as collateral for financial assurances associated with a variety of long-term obligations and commitments surrounding employee related matters and the mining, reclamation and shipping of its production.

At March 31, 2021, the Company had $ 43.5 million of cash collateral and restricted cash requirements due to outstanding letters of credit temporarily exceeding the balance of eligible receivables at quarter-end.

The Company had no such requirements at December 31, 2020 .

At June 30, 2021, the Com pany had no outstanding borrowings and $ 125.5 million o f letters of credit issued under the Securitization Program.

The letters of credit were primarily in support of reclamation obligations.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 0.3 million at June 30, 2021.

The Company had $ 13.6 million of cash collateral posted under the Securitization Program at June 30, 2021 due to outstanding letters of credit temporarily exceeding the balance of eligible receivables at quarter-end and none at December 31, 2020 .

This cash collateral is recorded as “Restricted cash” in the accompanying condensed consolidated balance sheets.

The Company incurred interest and fees associated with the Securitization Program of $ 0.7 million and $ 0.8 million during the three months ended June 30, 2021 and 2020, respectively, and $ 1.4 million and $ 1.5 million during the six months ended June 30, 2021 and 2020, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Substantially all of the Company’s U.S.

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Unconditional Purchase Obligations

As of March 31, 2021, purchase commitments for capital expenditures were $ 46.0 million, all of which is obligated within the next four years, with $ 38.4 million obligated within the next 12 months.

As of June 30, 2021, purchase commitments for capital expenditures were $ 28.1 million, all of which is obligated within the next four years, with $ 20.6 million obligated within the next 12 months.

There were no other material changes to the Company’s commitments from the information provided in Note 24.

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Plaintiffs filed their amended complaint on March 19, 2021.

The defendants filed a pre-motion letter on April 30, 2021 and the Plaintiffs’ response letter is due May 6, 2021.

The defendants must file their motion to dismiss by June 7, 2021.

Additional briefings at this phase of litigation should be completed by the end of August 2021.

The defendants filed a pre-motion letter on April 30, 2021 while the Plaintiffs’ response letter was filed on May 6, 2021.

The defendants filed their motion to dismiss on June 7, 2021.

The Plaintiffs’ opposition brief to the motion to dismiss was filed on July 22, 2021.

Additional briefings at this phase of litigation are anticipated to be completed by the conclusion of August 2021.

Derivative Actions.

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1:20-cv-01747-UNA (D.

22, 2020), in the United States District Court for the District of Delaware against certain directors and a former officer of the Company, as defendants.

22, 2020), in the U.S.

District Court for the District of Delaware against certain directors and former officers of the Company, as defendants.

The Company was also named as a nominal defendant.

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1:21-cv-00183-UNA (D.

10, 2021), in the United States District Court for the District of Delaware against the directors, two current officers and a former officer of the Company, as defendants.

10, 2021), in the U.S.

District Court for the District of Delaware against the directors and current and former officers of the Company, as defendants.

The Company was named as a nominal defendant.

This suit makes claims similar to those made in the Phelps matter, but asserts a claim for alleged misstatements in a proxy statement under Section 14(a) of the Securities and Exchange Act of 1934.

In late March 2021, the parties filed a stipulation agreeing to consolidate and stay both derivative actions for judicial efficiency and cost until the United States District Court for the District of Delaware ruled on the motion to dismiss in the Securities Class Action.

In late March 2021, the parties filed a stipulation agreeing to consolidate and stay both derivative actions for judicial efficiency and cost until the Court ruled on the motion to dismiss in the Securities Class Action.

The Company also believes that the derivative actions lack merit and intended to vigorously defend against the allegations.

Litigation Relating to Continuing Operations

At times, the Company becomes a party to other disputes, including those related to contract miner performance, claims, lawsuits, arbitration proceedings, regulatory investigations and administrative procedures in the ordinary course of business in the U.S., Australia and other countries where the Company does business.

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Reportable segment results were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

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A reconciliation of consolidated loss from continuing operations, net of income taxes to Adjusted EBITDA follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollars in millions)

4 unchanged sentences

Transaction costs related to joint ventures — 12.9 — 17.1

Asset impairment — 1,418.1 — 1,418.1

Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates ( 0.5 ) ( 0.4 ) ( 2.0 ) ( 1.1 )

Interest expense 45.4 34.3 97.8 67.4

Gain on early debt extinguishment ( 3.5 ) —

Net gain on early debt extinguishment ( 11.8 ) — ( 15.3 ) —

Interest income ( 1.3 ) ( 2.4 ) ( 2.8 ) ( 5.5 )

Unrealized losses on economic hedges 1.9 2.2

Unrealized losses (gains) on economic hedges 23.7 ( 7.0 ) 25.6 ( 4.8 )

Unrealized losses (gains) on non-coal trading derivative contracts 1.2 ( 2.8 ) 8.8 ( 2.9 )

3 unchanged sentences

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.

What changed 10-Q

Item 1. Financial Statements