4 unchanged sentences
Cautionary Notice Regarding Forward-Looking Statements
−Removed: This report includes statements of Peabody’s expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and are intended to come within the safe harbor protection provided by those sections.
−Removed: These statements relate to future events or Peabody’s future financial performance, including, without limitation, the section captioned “Outlook” in this Item 2.
+Added: This report includes statements of Peabody’s expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and are intended to come within the safe harbor protection provided by those sections.
+Added: These statements relate to future events or Peabody’s future financial performance.
The Company uses words such as “anticipate,” “believe,” “expect,” “may,” “forecast,” “project,” “should,” “estimate,” “plan,” “outlook,” “target,” “likely,” “will,” “to be” or other similar words to identify forward-looking statements.
43 unchanged sentences
In 2020, the Company produced and sold 128.8 million and 132.6 million tons of coal, respectively, from continuing operations.
−Removed: At March 31, 2021, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia.
+Added: At June 30, 2021, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia.
Included in that count is Peabody’s 50% equity interest in Middlemount Coal Pty Ltd.
6 unchanged sentences
“Segment Information” to the accompanying unaudited condensed consolidated financial statements for further information regarding those segments and the components of its Corporate and Other segment.
+Added: Financing and Surety Transactions
+Added: During the fourth quarter of 2020 and the first quarter of 2021, the Company entered into a series of interrelated agreements with its surety bond providers, the revolving lenders under its credit agreement and certain holders of its senior secured notes to extend a significant portion of its near-term debt maturities to December 2024 and to stabilize collateral requirements for its existing surety bond portfolio.
+Added: During the second quarter of 2021, and continuing into the third quarter of 2021, the Company completed a series of additional financing transactions intended to improve its capital structure.
+Added: These transactions included at-the-market common stock issuances for cash proceeds, common stock issuances for the retirement of long-term debt and the retirement of long-term debt primarily through open market purchases.
+Added: Refer to the “Liquidity and Capital Resources” section contained within this Item 2 for a further discussion of these financing and surety transactions.
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.
−Removed: As further described in the “Results of Operations” section contained within this Item 2, the Company incurred restructuring charges of $2.1 million and $6.5 million during the three months ended March 31, 2021 and 2020, respectively, related to workforce reductions made across the organization through the use of both involuntary and voluntary reductions.
+Added: As further described in the “Results of Operations” section contained within this Item 2, the Company incurred restructuring charges of $2.1 million and $16.5 million during the three months ended June 30, 2021 and 2020, respectively, and $4.2 million and $23.0 million during the six months ended June 30, 2021 and 2020, respectively, related to workforce reductions made across the organization through both involuntary and voluntary 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.
−Removed: The restart of mine production and coal shipments is contingent upon successful completion of these initiatives and stable customer demand.
−Removed: 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.
−Removed: Additionally, the Shoal Creek labor contract expired on April 1, 2021 and negotiations with the workforce are ongoing.
−Removed: While discussions are ongoing with customers and workforce, the Metropolitan Mine full workforce returned to the mine in early May.
−Removed: 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.
+Added: The preparation plant upgrade project remains on schedule with completion expected in the middle of the third quarter of 2021.
+Added: The Shoal Creek labor contract expired in April 2021, and negotiations with the workforce are ongoing.
+Added: The Metropolitan Mine full workforce returned to the mine in early May.
+Added: 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.
+Added: 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.
+Added: That application is pending.
+Added: 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.
+Added: 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 2021, with minimal cash consideration received.
Results of Operations
14 unchanged sentences
Refer to the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2 for definitions and reconciliations to the most comparable measures under U.S.
−Removed: Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020
−Removed: Spot pricing for premium low-vol hard coking coal (Premium HCC), premium low-vol pulverized coal injection (Premium PCI) coal, Newcastle index thermal coal and API 5 thermal coal, and prompt month pricing for PRB 8,880 Btu/Lb coal and Illinois Basin 11,500 Btu/Lb coal during the three months ended March 31, 2021 is set forth in the table below.
−Removed: The seaborne pricing included in the table below is not necessarily indicative of the pricing the Company realized during the three months ended March 31, 2021 due to quality differentials and the majority of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically.
+Added: Three and Six Months Ended June 30, 2021 Compared to the Three and Six Months Ended June 30, 2020
+Added: Spot pricing for premium low-vol hard coking coal (Premium HCC), premium low-vol pulverized coal injection (Premium PCI) coal, Newcastle index thermal coal and API 5 thermal coal, and prompt month pricing for PRB 8,880 Btu/Lb coal and Illinois Basin 11,500 Btu/Lb coal during the three months ended June 30, 2021 is set forth in the table below.
+Added: The seaborne pricing included in the table below is not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2021 due to quality differentials and the majority of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically.
The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.
−Removed: In the U.S., the pricing included in the table below is also not necessarily indicative of the pricing the Company realized during the three months ended March 31, 2021 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors.
+Added: In the U.S., the pricing included in the table below is also not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2021 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors.
Such long-term contracts in the U.S.
1 unchanged sentence
Competition from alternative fuels such as natural gas and other fuel sources may also impact the Company’s realized pricing.
−Removed: High Low Average March 31, 2021
+Added: High Low Average June 30, 2021
Premium HCC (1)
12 unchanged sentences
(2) Prices expressed per ton.
−Removed: Within the global coal industry, supply and demand disruptions have been widespread as the COVID-19 pandemic has forced country-wide lockdowns and regional restrictions.
+Added: Within the global coal industry, supply and demand disruptions were widespread as the COVID-19 pandemic forced country-wide lockdowns and regional restrictions.
Future COVID-19-related developments are unknown, including the duration, severity, scope and the necessary government actions to limit the spread of COVID-19.
−Removed: The global coal industry data for the three months ended March 31, 2021 presented herein may not be indicative of the ultimate impacts of the COVID-19 pandemic given the various levels of response and unknown duration, and the potential for continued weak demand for the Company’s products.
−Removed: Within the seaborne metallurgical coal market, the imbalance between Australian export and Chinese delivered prices remains wide, with the delivered price into China trading at roughly double those seen free on board Australia as the unofficial ban on Australian coals remains in place.
−Removed: In addition, increased COVID-19 concerns in India are further weighing on Australian hard coking coal pricing.
−Removed: These factors continue to pressure the seaborne metallurgical coal market despite global steel production increasing 5% year-over-year.
−Removed: In contrast, the spread between Australian hard coking coal pricing and low-vol PCI has recently narrowed to near parity.
−Removed: Tight low-vol PCI supply, coupled with China paying a premium for Russian coals, have contributed to rising low-vol PCI prices.
−Removed: Within the seaborne thermal coal market, tight supplies and low inventory levels have kept Newcastle thermal coal pricing at improved levels year-to-date.
−Removed: China’s domestic thermal coal supply remains hampered by heightened safety inspections.
−Removed: In addition, India’s thermal coal stockpiles have been falling gradually since mid-December as government-owned plants have reduced intake and there has been a delay in typical restocking ahead of the monsoon season in June.
−Removed: As of the end of March 2021, India’s plant inventory levels were estimated at approximately 15 days burn versus 28 days a year ago.
−Removed: In the United States, overall electricity demand increased 2% year-over-year, positively impacted by cold weather during the three months ended March 31, 2021.
−Removed: Electricity generation from thermal coal has increased by 37% year-over-year as a result of higher natural gas prices.
−Removed: This has positively impacted coal’s share of electricity generation, with a rise to approximately 24% for the three months ended March 31, 2021, while causing natural gas’s share to decline to approximately 34%.
+Added: The global coal industry data for the six months ended June 30, 2021 presented herein may not be indicative of the ultimate impacts of the COVID-19 pandemic given the various levels of response and unknown duration.
+Added: Within the seaborne metallurgical coal market, record steel production and tight coal availability have driven Australian spot prices to the highest level in two years.
+Added: China’s unofficial ban on Australian coal remains in place and continues to support delivered China prices above those of all other markets.
+Added: This is incentivizing producers in Russia, the U.S.
+Added: and Canada to supply China with additional volumes, providing opportunities for Australia to supply customers typically serviced by these countries.
+Added: COVID-19 remains an ongoing risk to seaborne metallurgical coal demand and has recently impacted import volumes to India and Japan.
+Added: Within the seaborne thermal coal market, tight supplies and elevated demand have driven Newcastle thermal coal pricing to levels not seen in over 10 years.
+Added: China’s domestic thermal coal supply remains hampered by heightened safety inspections and mine suspensions.
+Added: The relaxation of China’s import controls combined with tight domestic supply has pushed import demand higher.
+Added: In addition, India’s thermal coal imports improved ahead of the monsoon season.
+Added: However, supply response to elevated demand has been muted year-to-date, sending thermal coal prices higher.
+Added: In the United States, overall electricity demand increased 4% year-over-year, positively impacted by weather and the prior year economic impacts of COVID.
+Added: Electricity generation from thermal coal has notably improved year-over-year as a result of higher natural gas prices and stronger overall electricity demand.
+Added: This has positively impacted coal’s share of electricity generation, with a rise to approximately 22% for the six months ended June 30, 2021, while causing natural gas’s share to decline to approximately 36%.
Stronger coal use has contributed to decreasing coal stockpile levels.
Since December 2020, coal inventories have fallen by approximately 17 million tons.
−Removed: Through the three months ended March 31, 2021, utility consumption of PRB coal rose approximately 35% compared to the prior year period.
−Removed: The Company’s revenues for the three months ended March 31, 2021 decreased compared to the same periods in 2020 ($194.9 million) primarily due to lower sales volumes and lower realized prices.
−Removed: Results from continuing operations, net of income taxes for the three months ended March 31, 2021 increased compared to the same period in the prior year ($51.6 million) as the result of lower operating costs and expenses due largely to the sales volume decline as well as production efficiencies and other cost improvements ($196.9 million) and lower depreciation, depletion and amortization ($37.7 million).
−Removed: These favorable variances were offset by the unfavorable revenue variance described above and increased interest expense ($19.3 million) primarily resulting from fees related to new debt arrangements entered into during the three months ended March 31, 2021.
−Removed: Adjusted EBITDA for the three months ended March 31, 2021 reflected a year-over-year increase of $24.3 million.
−Removed: As of March 31, 2021, the Company’s available liquidity was approximately $604 million.
+Added: Through the six months ended June 30, 2021, utility consumption of PRB coal rose approximately 35% compared to the prior year period.
+Added: The Company’s revenues for the three months ended June 30, 2021 increased compared to the same period in 2020 ($96.7 million) primarily due to the impact of higher sales volumes and higher seaborne thermal pricing.
+Added: Revenues for the six months ended June 30, 2021 decreased compared to the same period in 2020 ($98.2 million) primarily due to lower realized prices and lower sales volumes.
+Added: Results from continuing operations, net of income taxes for the three months ended June 30, 2021 increased compared to the same period in the prior year ($1,522.3 million) primarily due to the asset impairment charges recorded in the prior year period ($ 1,418.1 million) and the favorable revenue variance described above.
+Added: Results from continuing operations, net of income taxes for the six months ended June 30, 2021 increased compared to the same period in the prior year ($1,573.9 million) primarily due to the asset impairment charges recorded in the prior year period ($ 1,418.1 million), lower operating costs and expenses driven by the sales volume decline as well as production efficiencies and other cost improvements ($141.8 million) and lower depreciation, depletion and amortization ($48.9 million).
+Added: These favorable variances were offset by the unfavorable revenue variance described above and increased interest expense ($30.4 million) primarily resulting from fees and higher borrowing rates related to new debt arrangements entered into during the first quarter of 2021.
+Added: Adjusted EBITDA for the three and six months ended June 30, 2021 reflected a year-over-year increase of $98.7 million and $123.0 million, respectively.
+Added: As of June 30, 2021, the Company’s available liquidity was approximately $564 million.
Refer to the “Liquidity and Capital Resources” section contained within this Item 2 for a further discussion of factors affecting the Company’s available liquidity.
The following table presents tons sold by operating segment:
−Removed: Three Months Ended Decrease
−Removed: March 31, to Volumes
−Removed: 2021 2020 Tons %
−Removed: (Tons in millions)
+Added: Three Months Ended June 30, (Decrease ) Increase
+Added: to Volumes Six Months Ended June 30, (Decrease ) Increase
+Added: 2021 2020 Tons % 2021 2020 Tons %
+Added: (Tons in millions) (Tons in millions)
Seaborne Thermal Mining 4.1 4.6 (0.5) (11) % 8.2 9.2 (1.0) (11) %
9 unchanged sentences
The following table presents supplemental financial data by operating segment:
−Removed: Three Months Ended (Decrease)
−Removed: March 31, Increase
+Added: Three Months Ended June 30, Increase
+Added: (Decrease) Six Months Ended June 30, Increase
2021 2020 $ % 2021 2020 $ %
25 unchanged sentences
The following table presents revenues by reporting segment:
−Removed: Three Months Ended (Decrease) Increase
−Removed: March 31, to Revenues
+Added: Three Months Ended June 30, Increase (Decrease) to Revenues Six Months Ended June 30, Increase (Decrease) to Revenues
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Seaborne Thermal Mining $ 194.1 $ 162.0 $ 32.1 20 % $ 370.5 $ 363.1 $ 7.4 2 %
6 unchanged sentences
Seaborne Thermal Mining.
−Removed: Segment revenues decreased during the three months ended March 31, 2021 compared to the same period in the prior year due to unfavorable volume and mix variances ($18.6 million) and unfavorable realized coal pricing ($6.1 million).
+Added: Segment revenues increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year due to favorable realized coal pricing (three months, $46.6 million;
+Added: six months, $40.9 million), offset by unfavorable volume and mix variances (three months, $14.5 million;
+Added: six months, $33.5 million).
Seaborne Metallurgical Mining.
−Removed: Segment revenues decreased during the three months ended March 31, 2021 compared to the same period in the prior year due to unfavorable volume and mix variances ($101.3 million) and unfavorable realized coal pricing ($4.4 million).
−Removed: The unfavorable volume variances resulted from the idling of the Shoal Creek and Metropolitan Mines during the fourth quarter of 2020, lower demand and the closure of the Millennium Mine during the second quarter of 2020.
+Added: Segment revenues increased during the three months ended June 30, 2021 compared to the same period in the prior year due to favorable volume and mix variances ($33.2 million), partially offset by unfavorable realized coal pricing ($3.8 million).
+Added: Segment revenues decreased during the six months ended June 30, 2021 compared to the same period in the prior year due to unfavorable volume and mix variances ($66.7 million) and unfavorable realized coal pricing ($9.6 million).
+Added: The unfavorable volume variances resulted from the Shoal Creek Mine being idled through the first half of 2021, the Metropolitan Mine being idled through the first quarter of 2021 and the closure of the Millennium Mine during the second quarter of 2020.
+Added: These unfavorable volume variances were partially offset by improved demand at the Coppabella and Moorvale Mines.
Powder River Basin Mining.
−Removed: Segment revenues decreased during the three months ended March 31, 2021 compared to the same period in the prior year primarily due to lower demand ($31.6 million) and unfavorable realized coal pricing ($6.6 million).
+Added: Segment revenues increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year primarily due to increased demand (three months, $47.3 million;
+Added: six months, $15.8 million), partially offset by unfavorable realized coal pricing (three months, $4.5 million;
+Added: six months, $11.2 million).
Thermal Mining.
−Removed: Segment revenues decreased during the three months ended March 31, 2021 compared to the same period in the prior year primarily due to lower demand.
+Added: Segment revenues increased during the three months ended June 30, 2021 compared to the same period in the prior year due to favorable realized pricing ($5.9 million) and higher demand ($4.2 million).
+Added: Segment revenues decreased during the six months ended June 30, 2021 compared to the same period in the prior year due to primarily due to lower demand ($38.0 million), partially offset by favorable realized pricing ($5.1 million).
Corporate and Other.
−Removed: Segment revenues increased during the three months ended March 31, 2021 compared to the same period in the prior year primarily due to higher results from trading activities.
+Added: Segment revenues decreased during the three months ended June 30, 2021 compared to the same period in the prior year primarily due to lower results from trading activities.
Adjusted EBITDA
The following table presents Adjusted EBITDA for each of the Company’s reporting segments:
−Removed: Three Months Ended (Decrease) Increase
−Removed: March 31, to Segment Adjusted EBITDA
+Added: Three Months Ended June 30, Increase to Segment Adjusted EBITDA Six Months Ended June 30, Increase to Segment Adjusted EBITDA
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Seaborne Thermal Mining
10 unchanged sentences
Seaborne Thermal Mining.
−Removed: Segment Adjusted EBITDA decreased during the three months ended March 31, 2021 compared to the same period in the prior year as a result of unfavorable foreign currency impacts ($16.5 million), unfavorable volume variances ($14.6 million) and lower realized net coal pricing ($5.6 million).
−Removed: The decrease was partially offset by various cost improvements ($7.5 million).
+Added: Segment Adjusted EBITDA increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year as a result of higher realized net coal pricing (three months, $42.9 million;
+Added: six months, $37.6 million) and cost improvements across the operations and product mix (three months, $27.2 million;
+Added: six months, $33.6 million).
+Added: The increases were partially offset by unfavorable foreign currency impacts (three months, $9.7 million;
+Added: six months, $26.7 million) and unfavorable volume variances (three months, $9.7 million;
+Added: six months, $23.4 million).
Seaborne Metallurgical Mining.
−Removed: Segment Adjusted EBITDA increased during the three months ended March 31, 2021 compared to the same period in the prior year due to cost improvements at certain mines ($18.6 million) and lower costs for materials, services, repairs and labor ($21.2 million) as a result of the idling of the Metropolitan Mine during the fourth quarter of 2020 and the closure of the Millennium Mine during the second quarter of 2020.
−Removed: The increase was offset by unfavorable foreign currency impacts ($28.2 million).
+Added: Segment Adjusted EBITDA increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year due to favorable volume variances (three months, $18.0 million;
+Added: six months, $13.4 million) and cost improvements at certain mines (three months, $12.0 million;
+Added: six months, $42.0 million), offset by unfavorable foreign currency impacts (three months, $15.0 million;
+Added: six months, $40.3 million).
Powder River Basin Mining.
−Removed: Segment Adjusted EBITDA increased during the three months ended March 31, 2021 compared to the same period in the prior year due to lower costs for materials, services, repairs and labor ($7.4 million) and favorable mine sequencing impacts ($3.8 million).
−Removed: The increase was partially offset by the impact of lower volumes ($4.9 million) and lower realized net coal pricing ($3.8 million).
+Added: Segment Adjusted EBITDA increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year due to favorable mine sequencing impacts (three months, $21.8 million;
+Added: six months, $27.5 million) and favorable volume variances (three months, $9.9 million).
+Added: The increases were offset by higher costs for materials, services, repairs and labor (three months, $12.5 million;
+Added: six months, $5.9 million) and the unfavorable impacts of higher commodity pricing (three months, $10.3 million;
+Added: six months, $10.2 million).
Thermal Mining.
−Removed: Segment Adjusted EBITDA decreased during the three months ended March 31, 2021 compared to the same period in the prior year due to unfavorable volume and mix variances ($21.5 million), offset by lower costs for materials, services, repairs and labor ($21.3 million).
+Added: Segment Adjusted EBITDA increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year due to favorable volume variances (three months, $15.0 million;
+Added: six months, $16.9 million) and favorable mine sequencing impacts (three months, $10.0 million;
+Added: six months, $9.9 million), offset by the unfavorable impacts of higher commodity pricing (three months, $7.9 million;
+Added: six months, $9.5 million) and higher costs for materials, services, repairs and labor (three months, $7.3 million;
+Added: six months, $4.9 million).
Corporate and Other Adjusted EBITDA.
The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
−Removed: Three Months Ended Increase (Decrease)
−Removed: March 31, to Adjusted EBITDA
+Added: Three Months Ended June 30, Increase to Adjusted EBITDA Six Months Ended June 30, Increase (Decrease) to Adjusted EBITDA
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Middlemount (1)
$ (4.1) $ (6.4) $ 2.3 36 % $ (6.4) $ (16.1) $ 9.7 60 %
−Removed: Resource management activities (2)
+Added: Resource management
+Added: activities (2)
3.9 0.8 3.1 388 % 4.3 8.8 (4.5) (51) %
6 unchanged sentences
(1) Middlemount’s results are before the impact of related changes in deferred tax asset valuation allowance and reserves and amortization of basis difference.
−Removed: Middlemount’s standalone results included (on a 50% attributable basis) aggregate amounts of depreciation, depletion and amortization, asset retirement obligation expenses, net interest expense and income taxes of $11.7 million and $4.4 million during the three months ended March 31, 2021 and 2020, respectively.
+Added: Middlemount’s standalone results included (on a 50% attributable basis) aggregate amounts of depreciation, depletion and amortization, asset retirement obligation expenses, net interest expense and income taxes of $11.1 million and $8.8 million during the three months ended June 30, 2021 and 2020, respectively, and $22.8 million and $13.2 million during the six months ended June 30, 2021 and 2020, respectively.
(2) Includes gains (losses) on certain surplus coal reserve and surface land sales and property management costs and revenues.
(3) Includes trading and brokerage activities, costs associated with post-mining activities, gains (losses) on certain asset disposals, minimum charges on certain transportation-related contracts, costs associated with suspended operations including the North Goonyella Mine and expenses related to the Company’s other commercial activities.
−Removed: The increase in Corporate and Other Adjusted EBITDA during the three months ended March 31, 2021 compared to the same period in the prior year was primarily driven by favorable trading results ($12.1 million);
−Removed: lower postretirement healthcare costs ($11.3 million) primarily due to changes made to one of the Company’s postretirement health care benefit plans during the third quarter of 2020;
+Added: The increase in Corporate and Other Adjusted EBITDA during the three and six months ended June 30, 2021 compared to the same periods in the prior year was driven by lower postretirement healthcare costs (three months, $11.2 million;
+Added: six months, $22.4 million) primarily due to changes made to one of the Company’s postretirement health care benefit plans announced in 2020;
+Added: lower containment and holding costs for the Company’s North Goonyella Mine (three months, $8.2 million;
+Added: six months, $14.4 million);
+Added: favorable trading results (six months, $11.8 million);
a favorable variance in Middlemount’s results due to the combined impact of improved production and cost improvements;
−Removed: lower containment and holding costs for the Company’s North Goonyella Mine ($6.1 million);
−Removed: and favorable corporate hedging results ($5.7 million).
−Removed: These favorable results were partially offset by resource management gains recorded in the prior year period ($7.5 million).
+Added: and favorable corporate hedging results (six months, $6.2 million).
Loss From Continuing Operations, Net of Income Taxes
The following table presents loss from continuing operations, net of income taxes:
−Removed: Three Months Ended Increase (Decrease)
−Removed: March 31, to Income
+Added: Three Months Ended June 30, Increase (Decrease) to Income Six Months Ended June 30, Increase (Decrease) to Income
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Adjusted EBITDA (1)
4 unchanged sentences
Transaction costs related to joint ventures — (12.9) 12.9 100 % — (17.1) 17.1 100 %
+Added: Asset impairment — (1,418.1) 1,418.1 100 % — (1,418.1) 1,418.1 100 %
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates 0.5 0.4 0.1 25 % 2.0 1.1 0.9 82 %
Interest expense (45.4) (34.3) (11.1) (32) % (97.8) (67.4) (30.4) (45) %
−Removed: Gain on early debt extinguishment 3.5 — 3.5 n.m.
+Added: Net gain on early debt extinguishment 11.8 — 11.8 n.m.
+Added: 15.3 — 15.3 n.m.
Interest income 1.3 2.4 (1.1) (46) % 2.8 5.5 (2.7) (49) %
−Removed: Unrealized losses on economic hedges (1.9) (2.2) 0.3 14 %
+Added: Unrealized (losses) gains on economic hedges (23.7) 7.0 (30.7) (439) % (25.6) 4.8 (30.4) (633) %
Unrealized (losses) gains on non-coal trading derivative contracts (1.2) 2.8 (4.0) (143) % (8.8) 2.9 (11.7) (403) %
6 unchanged sentences
The following table presents a summary of depreciation, depletion and amortization expense by segment:
−Removed: Three Months Ended Increase (Decrease)
−Removed: March 31, to Income
+Added: Three Months Ended June 30, (Decrease) Increase to Income Six Months Ended June 30, (Decrease) Increase to Income
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Seaborne Thermal Mining
10 unchanged sentences
Additionally, the following table presents a summary of the Company’s weighted-average depletion rate per ton for active mines in each of its mining segments:
−Removed: Three Months Ended
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2021 2020 2021 2020
Seaborne Thermal Mining $ 2.47 $ 2.08 $ 2.17 $ 1.99
Seaborne Metallurgical Mining
+Added: 1.03 1.81 1.02 2.38
Powder River Basin Mining 0.24 0.80 0.24 0.79
Thermal Mining
−Removed: Depreciation, depletion and amortization expense decreased during the three months ended March 31, 2021 compared to the same period in the prior year primarily due to the impact of the asset impairment recorded at the North Antelope Rochelle Mine during the second quarter of 2020 ($25.2 million) and decreased depletion driven by lower sales volumes ($6.6 million).
−Removed: The decrease in the weighted-average depletion rate per ton for the Seaborne Metallurgical Mining segment during the three months ended March 31, 2021 compared to the same period in the prior year reflects the volume and mix variances which impacted the Company’s revenues as described above.
−Removed: The decrease in the weighted-average depletion rate per ton for the Powder River Basin Mining segment during the three months ended March 31, 2021 compared to the same period in the prior year reflects the asset impairment recorded during the second quarter of 2020.
+Added: 1.17 0.96 1.15 1.02
+Added: Depreciation, depletion and amortization expense decreased during the three and six months ended June 30, 2021 compared to the same periods in the prior year primarily due to the impact of the asset impairment recorded at the North Antelope Rochelle Mine during the second quarter of 2020 (three months, $18.8 million;
+Added: six months, $44.0 million).
+Added: The decrease in the weighted-average depletion rate per ton for the Seaborne Metallurgical Mining segment during the three and six months ended June 30, 2021 compared to the same periods in the prior year reflects the volume and mix variances which impacted the Company’s revenues as described above.
+Added: The decrease in the weighted-average depletion rate per ton for the Powder River Basin Mining segment during the three and six months ended June 30, 2021 compared to the same periods in the prior year reflects the asset impairment recorded during the second quarter of 2020.
Restructuring Charges.
−Removed: Restructuring charges decreased during the three months ended March 31, 2021 compared to the same period in the prior year as the result of workforce reductions made across the organization during the prior year through the use of involuntary and voluntary reductions, as discussed in Note 14.
−Removed: “Other Events” to the accompanying unaudited condensed consolidated financial statements.
+Added: Restructuring charges decreased during the three and six months ended June 30, 2021 compared to the same periods in the prior year as the result of workforce reductions made across the organization during the prior year.
Transaction Costs Related to Joint Ventures.
1 unchanged sentence
which was terminated during the third quarter of 2020.
+Added: Asset Impairment.
+Added: During the three and six months ended June 30, 2020, the Company recognized $1,418.1 million in aggregate asset impairment charges related to the fair value of its North Antelope Rochelle Mine in its Powder River Basin Mining segment as discussed in Note 8.
+Added: “Property, Plant, Equipment and Mine Development” to the accompanying unaudited condensed consolidated financial statements.
Interest Expense.
−Removed: Interest expense increased during the three months ended March 31, 2021 compared to the same period in the prior year as the result of a series of refinancing transactions completed by the Company during the first quarter of 2021, which included a senior notes exchange, a revolving credit facility exchange and various amendments to the Company’s existing debt agreements as further discussed in Note 11.
+Added: Interest expense increased during the three and six months ended June 30, 2021 compared to the same periods in the prior year as the result of a series of refinancing transactions completed by the Company during the first quarter of 2021 as described in Note 11.
“Long-term Debt” to the accompanying unaudited condensed consolidated financial statements.
−Removed: Gain on Early Debt Extinguishment.
−Removed: The gain recognized during the three months ended March 31, 2021 related to the senior notes exchange completed during the first quarter of 2021 as further discussed in Note 11.
+Added: Net Gain on Early Debt Extinguishment.
+Added: The gain recognized during the three and six months ended June 30, 2021 was primarily related to debt retirements made through various open market purchases during the second quarter of 2021 and the senior notes exchange completed during the first quarter of 2021 as further discussed in Note 11.
“Long-term Debt” to the accompanying unaudited condensed consolidated financial statements.
+Added: Unrealized (Losses) Gains on Economic Hedges.
+Added: Unrealized (losses) gains primarily relate to mark-to-market activity from economic hedge activities intended to hedge future coal sales.
+Added: For additional information, refer to Note 7.
+Added: “Derivatives and Fair Value Measurements” to the accompanying unaudited condensed consolidated financial statements.
Unrealized (Losses) Gains on Non-Coal Trading Derivative Contracts.
3 unchanged sentences
Income Tax Benefit (Provision) .
−Removed: The decrease in the income tax provision for the three months ended March 31, 2021 compared to the same period in the prior year was primarily due to differences in forecasted taxable income, partially offset by an increase in the provision related to the remeasurement of foreign income tax accounts.
+Added: The increase in the income tax benefit for the three months ended June 30, 2021 compared to the same period in the prior year was primarily due to differences in forecasted taxable income and a decrease in the provision related to the remeasurement of foreign income tax accounts.
+Added: The increase in the income tax benefit for the six months ended June 30, 2021 compared to the same period in the prior year was primarily due to differences in forecasted taxable income, partially offset by an increase in the provision related to the remeasurement of foreign income tax accounts.
Refer to Note 10.
2 unchanged sentences
The following table presents net loss attributable to common stockholders:
−Removed: Three Months Ended Increase
−Removed: March 31, to Income
+Added: Three Months Ended June 30, Increase
+Added: to Income Six Months Ended June 30, Increase
2021 2020 $ % 2021 2020 $ %
−Removed: (Dollars in millions)
+Added: (Dollars in millions) (Dollars in millions)
Loss from continuing operations, net of income taxes $ (23.0) $ (1,545.3) $ 1,522.3 99 % $ (100.7) $ (1,674.6) $ 1,573.9 94 %
6 unchanged sentences
The following table presents diluted EPS:
−Removed: Three Months Ended Increase
−Removed: March 31, to EPS
+Added: Three Months Ended June 30, Increase
+Added: to EPS Six Months Ended June 30, Increase
2021 2020 $ % 2021 2020 $ %
5 unchanged sentences
Diluted EPS is commensurate with the changes in results from continuing operations and discontinued operations during that period.
−Removed: Diluted EPS reflects weighted average diluted common shares outstanding of 98.4 million and 97.2 million for the three months ended March 31, 2021 and 2020, respectively.
+Added: Diluted EPS reflects weighted average diluted common shares outstanding of 101.2 million and 97.9 million for the three months ended June 30, 2021 and 2020, respectively, and 99.8 million and 97.5 million for the six months ended June 30, 2021 and 2020, respectively.
Reconciliation of Non-GAAP Financial Measures
1 unchanged sentence
Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of its segment’s operating performance, as displayed in the reconciliations below.
−Removed: Three Months Ended
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2021 2020 2021 2020
(Dollars in millions)
1 unchanged sentence
Depreciation, depletion and amortization
+Added: 77.1 88.3 145.4 194.3
Asset retirement obligation expenses
+Added: 15.1 14.1 31.0 31.7
Restructuring charges
+Added: 2.1 16.5 4.2 23.0
Transaction costs related to joint ventures
+Added: — 12.9 — 17.1
+Added: Asset impairment
+Added: — 1,418.1 — 1,418.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates
+Added: (0.5) (0.4) (2.0) (1.1)
Interest expense
−Removed: Gain on early debt extinguishment (3.5) —
+Added: 45.4 34.3 97.8 67.4
+Added: Net gain on early debt extinguishment (11.8) — (15.3) —
Interest income
−Removed: Unrealized losses on economic hedges 1.9 2.2
+Added: (1.3) (2.4) (2.8) (5.5)
+Added: 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)
Take-or-pay contract-based intangible recognition
+Added: (1.1) (2.7) (2.2) (5.3)
Income tax (benefit) provision
+Added: (4.8) (0.2) (6.6) 2.8
Total Adjusted EBITDA
2 unchanged sentences
Costs per Ton is equal to Revenues per Ton less Adjusted EBITDA Margin per Ton, and are reconciled to operating costs and expenses as follows:
−Removed: Three Months Ended
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2021 2020 2021 2020
(Dollars in millions)
3 unchanged sentences
Take-or-pay contract-based intangible recognition
+Added: 1.1 2.7 2.2 5.3
Net periodic benefit (credit) costs, excluding service cost (8.7) 2.7 (17.4) 5.5
2 unchanged sentences
The following table presents Reporting Segment Costs by reporting segment:
−Removed: Three Months Ended
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2021 2020 2021 2020
(Dollars in millions)
6 unchanged sentences
The following tables present tons sold, revenues, Reporting Segment Costs and Adjusted EBITDA by mining segment:
−Removed: Three Months Ended March 31, 2021
+Added: Three Months Ended June 30, 2021
Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.
8 unchanged sentences
Adjusted EBITDA Margin per Ton $ 17.31 $ (18.76) $ 2.02 $ 11.13
−Removed: Three Months Ended March 31, 2020
+Added: Three Months Ended June 30, 2020
Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.
8 unchanged sentences
Adjusted EBITDA Margin per Ton $ 5.91 $ (33.92) $ 2.19 $ 8.59
−Removed: Free Cash Flow is defined as net cash provided by (used in) operating activities less net cash used in investing activities and excludes cash outflows related to business combinations.
+Added: Six Months Ended June 30, 2021
+Added: Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.
+Added: Thermal Mining
+Added: (Amounts in millions, except per ton data)
+Added: Tons sold 8.2 2.4 43.2 7.8
+Added: Revenues $ 370.5 $ 208.5 $ 477.0 $ 311.4
+Added: Reporting Segment Costs 270.6 257.3 401.4 230.9
+Added: Adjusted EBITDA $ 99.9 $ (48.8) $ 75.6 $ 80.5
+Added: Revenues per Ton $ 45.15 $ 86.31 $ 11.04 $ 39.75
+Added: Costs per Ton 32.97 106.51 9.29 29.47
+Added: Adjusted EBITDA Margin per Ton $ 12.18 $ (20.20) $ 1.75 $ 10.28
+Added: Six Months Ended June 30, 2020
+Added: Seaborne Thermal Mining Seaborne Metallurgical Mining Powder River Basin Mining Other U.S.
+Added: Thermal Mining
+Added: (Amounts in millions, except per ton data)
+Added: Tons sold 9.2 3.1 41.4 8.7
+Added: Revenues $ 363.1 $ 284.8 $ 472.4 $ 344.3
+Added: Reporting Segment Costs 280.3 353.6 407.7 272.9
+Added: Adjusted EBITDA $ 82.8 $ (68.8) $ 64.7 $ 71.4
+Added: Revenues per Ton $ 39.58 $ 92.61 $ 11.40 $ 39.49
+Added: Costs per Ton 30.56 115.00 9.84 31.31
+Added: Adjusted EBITDA Margin per Ton $ 9.02 $ (22.39) $ 1.56 $ 8.18
+Added: Free Cash Flow is defined as net cash used in operating activities less net cash used in investing activities and excludes cash outflows related to business combinations.
See the table below for a reconciliation of Free Cash Flow to its most comparable measure under U.S.
−Removed: Three Months Ended
+Added: Six Months Ended June 30,
(Dollars in millions)
−Removed: Net cash provided by (used in) operating activities $ 71.0 $ (4.7)
+Added: Net cash used in operating activities $ (22.8) $ (53.1)
Net cash used in investing activities (82.6) (115.6)
Free Cash Flow $ (105.4) $ (168.7)
−Removed: As part of its normal planning and forecasting process, Peabody utilizes a broad approach to develop macroeconomic assumptions for key variables, including country-level gross domestic product, industrial production, fixed asset investment and third-party inputs, driving detailed supply and demand projections for key demand centers for coal, electricity generation and steel.
−Removed: Specific to the U.S., the Company evaluates individual plant needs, including expected retirements, on a plant by plant basis in developing its demand models.
−Removed: Supply models and cost curves concentrate on major supply regions/countries that impact the regions in which the Company operates.
−Removed: The Company’s estimates involve risks and uncertainties and are subject to change based on various factors as summarized in the “Cautionary Notice Regarding Forward-Looking Statements” section contained within this Item 2.
−Removed: The Company’s near-term outlook is intended to coincide with the next 12 to 24 months, with subsequent periods addressed in its long-term outlook.
−Removed: Peabody is continuing to monitor the rapidly evolving COVID-19 pandemic and any impacts related to both its near-term and long-term outlook.
−Removed: Near-Term Outlook
−Removed: Within the global coal industry, supply and demand disruptions have been widespread as the COVID-19 pandemic has forced country-wide lockdowns and regional restrictions.
−Removed: Future COVID-19-related developments are unknown, including the duration, severity, scope and the necessary government actions to limit the spread of COVID-19.
−Removed: Within the seaborne metallurgical coal market, the imbalance between Australian export and Chinese delivered prices remains wide, with the delivered price into China trading at roughly double those seen free on board Australia as the unofficial ban on Australian coals remains in place.
−Removed: In addition, increased COVID-19 concerns in India are further weighing on Australian hard coking coal pricing.
−Removed: These factors continue to pressure the seaborne metallurgical coal market despite global steel production increasing 5% year-over-year.
−Removed: In contrast, the spread between Australian hard coking coal pricing and low-vol PCI has recently narrowed to near parity.
−Removed: Tight low-vol PCI supply, coupled with China paying a premium for Russian coals, have contributed to rising low-vol PCI prices.
−Removed: Within the seaborne thermal coal market, tight supplies and low inventory levels have kept Newcastle thermal coal pricing at improved levels year-to-date.
−Removed: China’s domestic thermal coal supply remains hampered by heightened safety inspections.
−Removed: In addition, India’s thermal coal stockpiles have been falling gradually since mid-December as government-owned plants have reduced intake and there has been a delay in typical restocking ahead of the monsoon season in June.
−Removed: As of the end of March 2021, India’s plant inventory levels were estimated at approximately 15 days burn versus 28 days a year ago.
−Removed: In the United States, overall electricity demand increased 2% year-over-year, positively impacted by cold weather during the three months ended March 31, 2021.
−Removed: Electricity generation from thermal coal has increased by 37% year-over-year as a result of higher natural gas prices.
−Removed: This has positively impacted coal’s share of electricity generation, with a rise to approximately 24% for the three months ended March 31, 2021, while causing natural gas’s share to decline to approximately 34%.
−Removed: Stronger coal use has contributed to decreasing coal stockpile levels.
−Removed: Since December 2020, coal inventories have fallen by approximately 20 million tons.
−Removed: Through the three months ended March 31, 2021, utility consumption of PRB coal rose approximately 35% compared to the prior year period.
−Removed: Ultimately, U.S.
−Removed: thermal coal demand will be dependent on general economic conditions, weather, natural gas prices, utility inventory levels and other factors.
−Removed: Long-Term Outlook
−Removed: There were no significant changes to the Company’s Long-Term Outlook subsequent to December 31, 2020.
−Removed: Information regarding the Company’s Long-Term Outlook is outlined in Part II.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K for the year ended December 31, 2020.
Regulatory Update
6 unchanged sentences
coal mining operations both directly and indirectly.
−Removed: The Clean Air Act requires the EPA to review national ambient air quality standards (NAAQS) every five years to determine whether revision to current standards are appropriate.
+Added: The CAA requires the United States Environmental Protection Agency (EPA) to review national ambient air quality standards (NAAQS) every five years to determine whether revision to current standards are appropriate.
As part of this recurring review process, the EPA in 2020 proposed to retain the ozone standards promulgated in 2015, including current secondary standards, and subsequently promulgated final standards to this effect.
Fifteen states and other petitioners have filed a petition for review of the rule in the D.C.
−Removed: Circuit, State of New York v.
−Removed: The EPA also proposed to retain the particulate matter (PM) standards promulgated in 2012.
+Added: The litigation is currently in abeyance following a motion filed by the EPA to allow for review of the standards.
+Added: The EPA also proposed in 2020 to retain the particulate matter (PM) standards last revised in 2012.
On December 18, 2020, the EPA issued a final rule to retain both the primary annual and 24-hour PM standards for fine particulate matter (PM 2.5 ) and the primary 24-hour standard for coarse particulate matter (PM 10 ) and secondary PM 10 standards.
This rule has also been challenged in the D.C.
−Removed: Circuit by several states and environmental organizations, State of California v.
+Added: Circuit by several states and environmental organizations.
+Added: The case is currently in abeyance following a motion filed by the EPA to allow for review of the standards.
More stringent PM or ozone standards would require new state implementation plans to be developed and filed with the EPA and may trigger additional control technology for mining equipment or result in additional challenges to permitting and expansion efforts.
−Removed: This could also be the case with respect to the implementation for other NAAQS for nitrogen oxide and SO 2 although the EPA promulgated a final rule on March 18, 2019 that retains, without revision, the existing NAAQS for SO 2 of 75 ppb averaged over an hour.
+Added: This could also be the case with respect to other NAAQS for nitrogen dioxide (NO 2 ) and sulfur dioxide (SO 2 ), although there is no significant pending EPA rulemaking with respect to those pollutants.
EPA Regulation of Greenhouse Gas Emissions from Existing Fossil Fuel-Fired EGUs.
2 unchanged sentences
The CPP required that the states individually or collectively create systems that would reduce carbon emissions from any EGU located within their borders by 28% in 2025 and 32% in 2030 (compared with a 2005 baseline).
−Removed: The EPA has since proposed to repeal the CPP and in August 2018 issued a proposed rule to replace the CPP, with the Affordable Clean Energy (ACE) Rule.
+Added: The EPA subsequently proposed to repeal the CPP and in August 2018 issued a proposed rule to replace the CPP, with the Affordable Clean Energy (ACE) Rule.
In June 2019, the EPA issued a combined package that finalized the CPP repeal rule as well as the replacement rule, ACE.
9 unchanged sentences
In 2011, the EPA finalized the CSAPR, which requires the District of Columbia and 27 states from Texas eastward (not including the New England states or Delaware) to reduce power plant emissions that cross state lines and significantly contribute to ozone and/or fine particle pollution in other states.
−Removed: In 2016, the EPA published the final CSAPR Update Rule which imposed reductions in nitrogen oxides emissions beginning in 2017 in 22 states subject to CSAPR.
+Added: In 2016, the EPA published the final CSAPR Update Rule which imposed additional reductions in nitrogen oxide emissions beginning in 2017 in 22 states subject to CSAPR.
In October 2020, the EPA proposed a rule to address a previous D.C.
−Removed: Circuit remand as well as NOx emissions in 21 states targeted by the CSAPR Update Rule.
−Removed: On March 15, 2021, the EPA signed a final rule which determined that 9 states do not significantly contribute to downwind nonattainment and/or maintenance issues and therefore do not need additional emission reductions.
−Removed: For 12 other states, however, EPA issued Federal Implementation Plans to lower state ozone season NOx budgets in 2021 to 2024, although limited emission trading can be used for compliance.
+Added: Circuit remand of the CSAPR Update Rule.
+Added: On March 15, 2021, the EPA signed a final rule which imposed further reductions of NOx emmissions in 12 states while determining that 9 states did not significantly contribute to downwind nonattainment and/or maintenance issues and therefore did not require additional emission reductions.
+Added: In order to implement reductions in the 12 identified states, the EPA issued Federal Implementation Plans to lower state ozone season NOx budgets in 2021 to 2024, although limited emission trading can be used for compliance.
Mercury and Air Toxic Standards (MATS) .
7 unchanged sentences
CWA Definition of “Waters of the United States” .
−Removed: In January 2020 the EPA and the Corps finalized the Navigable Waters Protection Rule to revise the definition of “Waters of the United States” and thereby establish the scope of federal regulatory authority under the CWA.
−Removed: A federal district judge in Colorado preliminarily enjoined the Navigable Waters Protection Rule in the State of Colorado on June 19, 2020, but the new rule took effect in all other states on June 22, 2020.
−Removed: Court of Appeals for the Tenth Circuit reversed the preliminary injunction in Colorado on March 2, 2021, so the Navigable Waters Protection Rule is in effect nationwide.
−Removed: Litigation over the 2020 Navigable Waters Protection Rule remains pending in several federal district courts.
+Added: In January 2020 the EPA and the Army Corps of Engineers (Corps) finalized the Navigable Waters Protection Rule to revise the definition of “Waters of the United States” and thereby establish the scope of federal regulatory authority under the CWA.
+Added: The Navigable Waters Protection Rule is currently in effect in all fifty states, but on June 9, 2021, the EPA and the Corps announced their intent to initiate a new rulemaking proceeding to replace the rule with a new definition of “Waters of the United States.” Litigation over the 2020 Navigable Waters Protection Rule remains pending in several federal district courts.
Regulatory Matters - Australia
14 unchanged sentences
and establish an Environment Assurance Commissioner to monitor and audit bilateral agreements and other processes under the EPBC Act.
+Added: The bill passed the Australian Parliament’s House of Representatives in June 2021 and will now be considered by the Australian Senate during its August sittings.
Native Title and Cultural Heritage.
6 unchanged sentences
Global Climate
−Removed: In the U.S., Congress has considered legislation addressing global climate issues and greenhouse gas emissions, but to date, no such legislation has been signed into law.
+Added: In the U.S., Congress has considered legislation addressing global climate issues and greenhouse gas emissions, but to date, no legislation directly affecting fossil fuel-fired powerplants has been signed into law.
+Added: Congress did include climate legislation, the American Innovation and Manufacturing Act of 2020, within a large appropriations bill for the 2021 fiscal year.
+Added: This legislation was enacted in December, 2020, and will require phasedown of the production and use of hydrofluorocarbons (HFCs) in the United States.
While it is possible that the U.S.
−Removed: will adopt legislation in the future, the timing and specific requirements of any such legislation are uncertain.
+Added: will adopt broader legislation in the future, the timing and specific requirements of any such legislation are uncertain.
In the absence of new U.S.
3 unchanged sentences
EPA, 549 U.S.
−Removed: 497 (2007) the EPA commenced several rulemaking projects as described under “Regulatory Matters - U.S.” In particular, in 2015, the EPA announced final rules (known as the CPP) for regulating carbon dioxide emissions from existing and new fossil fuel-fired EGUs.
−Removed: Twenty-seven states and governmental entities, as well as utilities, industry groups, trade associations, coal companies (including Peabody), and other entities, challenged the CPP in federal court.
−Removed: Implementation of the CPP was stayed by the U.S.
−Removed: Supreme Court pending resolution of its legal challenges.
−Removed: In October 2017, the EPA proposed to change its legal interpretation of section 111(d) of the CAA, the authority that the agency relied on for the original CPP.
−Removed: The EPA relied on the proposed reinterpretation until August 2018, when it proposed the Affordable Clean Energy Rule (the ACE Rule) to replace the CPP with a system where states would develop emissions reduction plans using BSER measures (essentially efficiency heat rate improvements), and the EPA would approve the state plans if they use EPA-approved candidate technologies.
−Removed: The EPA thereafter repealed the CPP and promulgated the final ACE Rule on July 8, 2019.
−Removed: On January 19, 2021, the D.C.
−Removed: Circuit Court of Appeals vacated and remanded the ACE Rule, including the repeal of the CPP and amendments to implementing regulations that extended compliance timelines.
−Removed: Several changes in the NSR program have also been issued through guidance and rulemaking as described under “Regulatory Matters – U.S.” in the Company’s Annual Report on Form 10-K and herein.
+Added: 497 (2007) the EPA commenced several rulemaking projects as described under “Regulatory Matters - U.S.” As described above, however, the EPA’s rules affecting existing fossil-fuel fired power plants (i.e.
+Added: the ACE Rule and the EPA’s repeal of the CPP) were vacated and remanded back to the EPA by the D.C.
+Added: Circuit Court of Appeals.
+Added: Greenhouse gas requirements for new, reconstructed and modified fossil fuel fired power plants remain in effect.
+Added: Several changes in the New Source Review (NSR) program, a permitting plan under the CAA for new source construction and major modifications, have also been issued through guidance and rulemaking as described under “Regulatory Matters – U.S.” in the Company’s Annual Report on Form 10-K.
The NSR program provides for the pre-construction review of new, reconstructed and modified stationary sources and results in determinations concerning the emission control technology that must be installed and operated at a source.
11 unchanged sentences
Many of the states and provinces that left WCI, RGGI and MGGRA, along with many that continue to participate, have joined the new North America 2050 initiative, which seeks to reduce greenhouse gas emissions and create economic opportunities in ways not limited to cap-and-trade programs.
−Removed: Separately, California has committed through Executive Order B-55-18 and SB 100 to 100 percent “clean energy” by 2045.
+Added: Separately, California has committed through Executive Order B-55-18 and SB 100 to 100 percent “clean energy” by 2045 and the state of Washington has passed legislation to commit to carbon neutrality by 2050.
Several other U.S.
22 unchanged sentences
has announced the goal of a completely emissions-free power grid by 2035, but has not provided specificity for a regulatory framework to achieve that goal.
−Removed: The Company anticipates a series of executive actions and/or orders from the current presidential administration aimed at curbing emission levels.
+Added: The Company anticipates a series of executive actions and/or orders from the current presidential administration aimed at curbing emission levels as well as associated rulemaking using the CAA and potentially other statutory authorities.
In October 2017, the Australian Federal Government released a plan aimed at delivering an affordable and reliable energy system that meets Australia’s international commitments to emissions reduction.
4 unchanged sentences
The Climate Solutions Fund is an extension of the former Emissions Reduction Fund.
−Removed: The government has confirmed that it remains committed to meeting Australia’s Paris Agreement targets but that the focus of energy policy will be on driving down electricity prices.
+Added: The government has confirmed that it remains committed to meeting Australia’s Paris Agreement targets but has not formally committed to net zero emissions by 2050 with the focus of energy policy on the use of technology to accelerate the development and commercialization of low and zero emissions technologies and driving down electricity prices.
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.
9 unchanged sentences
The Company’s primary source of cash is proceeds from the sale of its coal production to customers.
−Removed: The Company has also generated cash from the sale of non-strategic assets, including coal reserves and surface lands, borrowings under its credit facilities and, from time to time, the issuance of securities.
+Added: The Company has also generated cash from the sale of non-strategic assets, including coal reserves and surface lands, and, from time to time, borrowings under its credit facilities and the issuance of securities.
The Company’s primary uses of cash include the cash costs of coal production, capital expenditures, coal reserve lease and royalty payments, debt service costs, capital and operating lease payments, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, and selling and administrative expenses.
4 unchanged sentences
“Unregistered Sales of Equity Securities and Use of Proceeds.”
−Removed: As of March 31, 2021, the Company’s cash balances totaled $580.2 million, including approximately $396 million held by U.S.
+Added: As of June 30, 2021, the Company’s cash balances totaled $548.3 million, including approximately $366 million held by U.S.
subsidiaries and $153 million held by Australian subsidiaries, approximately $102 million of which was held by the subsidiaries that conduct the operations of its Wilpinjong Mine.
−Removed: The Company’s remaining balance was held by other foreign subsidiaries in accounts predominantly domiciled in the U.S.
−Removed: A significant majority of the cash held by its foreign subsidiaries is denominated in U.S.
+Added: The remaining cash balance was held by other foreign subsidiaries in accounts predominantly domiciled in the U.S.
+Added: A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S.
This cash is generally used to support non-U.S.
liquidity needs, including capital and operating expenditures in Australia.
−Removed: The Company’s available liquidity declined from $728.7 million as of December 31, 2020 to $603.8 million as of March 31, 2021.
−Removed: Available liquidity, which excluded $43.5 million of restricted cash as of March 31, 2021, was comprised of the following:
−Removed: March 31, 2021 December 31, 2020
+Added: The Company’s available liquidity declined from $728.7 million as of December 31, 2020 to $564.1 million as of June 30, 2021.
+Added: Available liquidity, which excluded $13.6 million of restricted cash as of June 30, 2021, was comprised of the following:
+Added: June 30, 2021 December 31, 2020
(Dollars in millions)
Cash and cash equivalents $ 548.3 $ 709.2
−Removed: Revolving credit facility availability 22.8 0.2
+Added: Credit facility availability 15.5 0.2
Accounts receivable securitization program availability 0.3 19.3
Total liquidity $ 564.1 $ 728.7
+Added: The Company’s total funded indebtedness (Indebtedness) as of June 30, 2021 and December 31, 2020 is presented in the table below.
+Added: Debt Instrument (defined below, as applicable) June 30, 2021 December 31, 2020
+Added: (Dollars in millions)
+Added: 6.000% Senior Secured Notes due March 2022 (2022 Notes)
+Added: $ 29.5 $ 459.0
+Added: 8.500% Senior Secured Notes due December 2024 (Peabody Notes)
+Added: 10.000% Senior Secured Notes due December 2024 (Co-Issuer Notes)
+Added: 6.375% Senior Secured Notes due March 2025 (2025 Notes)
+Added: Senior Secured Term Loan due 2024 (Co-Issuer Term Loans) 206.0 —
+Added: Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan) 368.6 388.2
+Added: Revolving credit facility — 216.0
+Added: Finance lease obligations 32.3 27.3
+Added: Debt issuance costs (51.1) (42.7)
+Added: 1,418.1 1,547.8
+Added: Current portion of long-term debt 94.0 44.9
+Added: Long-term debt $ 1,324.1 $ 1,502.9
+Added: The Company’s Indebtedness was significantly impacted subsequent to December 31, 2020 as a result of various agreements and transactions described below.
Refinancing and Related Transactions
4 unchanged sentences
In connection with the change in structure, the Company’s subsidiary which owns and operates its Wilpinjong Mine in Australia became a subsidiary of the Co-Issuers.
−Removed: The Co-Issuers and the Wilpinjong subsidiary were designated as unrestricted subsidiaries under the Company’s Credit Agreement and its senior notes’ indenture (the Existing Indenture).
−Removed: In connection with these actions, the Company contributed $100.0 million to the Co-Issuers to provide the Wilpinjong Mine with operating liquidity and address its capital needs over the next twelve months.
+Added: The Co-Issuers and the Wilpinjong subsidiary were designated as unrestricted subsidiaries under the Company’s credit agreement (Credit Agreement) and its senior notes’ indenture (the Existing Indenture).
+Added: In connection with these actions, the Company contributed $100.0 million to the Co-Issuers to provide the Wilpinjong Mine with operating liquidity and address its near-term capital needs.
Surety Agreement
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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.
−Removed: 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 have asset sales in excess of $10.0 million.
−Removed: Further, the Participating Sureties have agreed to a standstill through December 31, 2024, 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.
+Added: 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.
+Added: 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.
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Exchange Offer
−Removed: On January 29, 2021, the Company settled an exchange offer (Exchange Offer) pursuant to which $398.7 million aggregate principal amount of its 6.000% Senior Secured Notes due March 2022 (2022 Notes) were validly tendered, accepted by the Company and exchanged for aggregate consideration consisting of (a) $193.9 million aggregate principal amount of new 10.000% Senior Secured Notes due 2024 issued by the Co-Issuers (Co-Issuer Notes), (b) $195.1 million aggregate principal amount of new 8.500% Senior Secured Notes due 2024 issued by Peabody (Peabody Notes), and (c) a cash payment of approximately $9.4 million.
+Added: On the Settlement Date, the Company settled an exchange offer (Exchange Offer) pursuant to which $398.7 million aggregate principal amount of its 6.000% Senior Secured Notes due March 2022 (2022 Notes) were validly tendered, accepted by the Company and exchanged for aggregate consideration consisting of (a) $193.9 million aggregate principal amount of new 10.000% Senior Secured Notes due 2024 issued by the Co-Issuers (Co-Issuer Notes), (b) $195.1 million aggregate principal amount of new 8.500% Senior Secured Notes due 2024 issued by Peabody (Peabody Notes), and (c) a cash payment of approximately $9.4 million.
In connection with the settlement of the Exchange Offer, the Company also paid early tender premiums totaling $4.0 million in cash.
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“Long-term Debt” for additional information associated with the Co-Issuer Notes and the Peabody Notes.
−Removed: 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 Indenture, as amended by the supplemental indenture described below.
−Removed: As required under the Exchange Offer, the Company purchased $22.4 million Peabody Notes at 80% of their accreted value, plus accrued and unpaid interest, during the first quarter of 2021 and recognized a related net gain of $3.5 million.
+Added: As required under the Exchange Offer, the Company purchased $22.4 million of the Peabody Notes at 80% of their accreted value, plus accrued and unpaid interest, during the first quarter of 2021 and recognized a related net gain on extinguishment of $3.5 million.
Consent Solicitation
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In connection with the Revolver Transactions, the Company amended the Credit Agreement to make certain changes in consideration of the Company LC Agreement.
−Removed: After giving effect to the Revolver Transactions, there remain no revolving commitments or revolving loans under the Credit Agreement and the first lien net leverage ratio covenant was eliminated, effectively negating the compliance requirement at December 31, 2020 and prospectively.
+Added: After giving effect to the Revolver Transactions, there remain no revolving commitments or revolving loans under the Credit Agreement and the first lien net leverage ratio covenant was eliminated.
The Company LC Agreement requires that the Company’s restricted subsidiaries maintain minimum aggregate liquidity of $125.0 million at the end of each quarter through December 31, 2024.
As such, liquidity attributable to the Co-Issuers, its subsidiaries and other unrestricted subsidiaries is excluded from the calculation.
−Removed: Liquidity calculated in this manner amounted to $475.3 million at March 31, 2021.
+Added: Liquidity calculated in this manner amounted to $444.9 million at June 30, 2021.
+Added: The indenture which governs the Peabody Notes and the Company LC Agreement allow the Company to make open market debt repurchases, subject to certain limitations, including, but not limited to:
+Added: (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).
Other Debt Financing
−Removed: The Refinancing Transactions did not significantly impact the Company’s existing senior secured term loan under the Credit Facility, or its $500.0 million of 6.375% senior secured notes due March 2025.
−Removed: The senior secured term loan had a balance of $387.3 million at March 31, 2021.
+Added: The Refinancing Transactions did not significantly impact the Company’s existing senior secured term loan under the Credit Facility (Senior Secured Term Loan), or its $500.0 million of 6.375% senior secured notes due March 2025 (2025 Notes), but these debt instruments were impacted by subsequent financing transactions described below.
The term loan requires quarterly principal payments of $1.0 million and periodic interest payments, currently at LIBOR plus 2.75%, through December 2024 with the remaining balance due in March 2025.
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The Company is also subject to customary affirmative and negative covenants.
−Removed: The Company was compliant with all covenants under its debt agreements at March 31, 2021.
−Removed: Considering the Refinancing Transactions, the Company expects to incur approximately $200 million of interest expense, including approximately $50 million of non-cash interest expense, during the year ended December 31, 2021.
+Added: 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.
+Added: Subsequent Financing Transactions
+Added: Subsequent to the Refinancing Transactions, the Company completed a series of financing transactions intended to improve its capital structure.
+Added: 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.
+Added: Such sales are allowed using methods permissible under Rule 415 of the Securities Act.
+Added: 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.
+Added: During the three months ended June 30, 2021, the Company sold approximately 8.1 million shares for net cash proceeds of $65.1 million.
+Added: Subsequent to June 30, 2021, the Company settled sales of an additional 2.7 million shares for net proceeds of $21.5 million.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The Company also reached agreements to retire an additional $49.5 million of aggregate principal, which will settle subsequent to June 30, 2021.
+Added: 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.
+Added: Such amounts are reflected within the current portion of long-term debt in the accompanying condensed consolidated balance sheets at June 30, 2021.
+Added: 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.
+Added: The offers expire on August 6, 2021, unless extended by the Company.
+Added: Considering the Refinancing Transactions and the subsequent financing transactions described above, the Company expects to incur approximately $190 million of interest expense, including approximately $40 million of non-cash interest expense, during the year ended December 31, 2021.
Accounts Receivable Securitization Program
As described in Note 16.
−Removed: “Financial Instruments and Other Guarantees” of the accompanying unaudited condensed consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017 which currently expires in 2022.
+Added: “Financial Instruments and Other Guarantees” of the accompanying unaudited condensed consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017 which currently matures in 2022.
+Added: The Company intends to renew the facility prior to maturity.
The program provides for up to $250.0 million in funding, limited to the availability of eligible receivables, accounted for as a secured borrowing.
Funding capacity under the program may also be utilized for letters of credit in support of other obligations.
−Removed: At March 31, 2021, the Company h a d no outstanding borrowings and $120.8 million of letters of credit issued under the program, which were primarily in support of portions of the Company’s obligations for property and casualty insurance.
−Removed: The Company had $43.5 million of cash collateral posted under the Securitization Program at March 31, 2021 due to outstanding letters of credit temporarily exceeding the balance of eligible receivables at quarter-end.
+Added: At June 30, 2021, the Company h a d no outstanding borrowings and $125.5 million of letters of credit issued under the program, which were primarily in support of portions of the Company’s reclamation obligations.
+Added: 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.
Capital Requirements
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Cash Flows and Free Cash Flow
−Removed: The following table summarizes the Company’s cash flows for the three months ended March 31, 2021 and 2020, as reported in the accompanying unaudited condensed consolidated financial statements.
+Added: The following table summarizes the Company’s cash flows for the six months ended June 30, 2021 and 2020, as reported in the accompanying unaudited condensed consolidated financial statements.
Free Cash Flow is a financial measure not recognized in accordance with U.S.
Refer to the “Reconciliation of Non-GAAP Financial Measures” section above for definitions and reconciliations to the most comparable measures under U.S.
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
(Dollars in millions)
−Removed: Net cash provided by (used in) operating activities $ 71.0 $ (4.7)
+Added: Net cash used in operating activities $ (22.8) $ (53.1)
Net cash used in investing activities (82.6) (115.6)
−Removed: Net cash used in financing activities (63.3) (7.9)
+Added: 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
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Cash, cash equivalents and restricted cash at end of period $ 561.9 $ 848.5
−Removed: Net cash provided by (used in) operating activities $ 71.0 $ (4.7)
+Added: Net cash used in operating activities $ (22.8) $ (53.1)
Net cash used in investing activities (82.6) (115.6)
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Operating Activities.
−Removed: The net increase in net cash (used in) provided by operating activities for the three months ended March 31, 2021 compared to the same period in the prior year was driven by a year-over-year increase in cash generated by Company’s mining operations and a favorable change in net cash flows associated with its working capital ($59.0 million).
+Added: The decrease in net cash used in operating activities for the six months ended June 30, 2021 compared to the same period in the prior year was driven by a year-over-year increase in cash generated by Company’s mining operations, partially offset by an unfavorable change in net cash flows associated with its working capital ($67.2 million).
Investing Activities.
−Removed: The increase in net cash used in investing activities for the three months ended March 31, 2021 compared to the same period in the prior year was driven by higher capital expenditures ($19.0 million) and higher net contributions to joint ventures ($35.8 million).
+Added: The decrease in net cash used in investing activities for the six months ended June 30, 2021 compared to the same period in the prior year was driven by lower advances to related parties and joint ventures, on a net basis ($34.8 million).
Financing Activities.
−Removed: The increase in net cash used in financing activities for the three months ended March 31, 2021 compared to the same period in the prior year was driven by comparatively higher long-term debt repayments ($33.0 million), including $37.3 million associated with the Refinancing Transactions, and the payment of deferred financing costs associated with the Refinancing Transactions ($22.5 million).
+Added: The decrease in net cash provided by financing activities for the six months ended June 30, 2021 compared to the same period in the prior year was driven by $300.0 million of revolving loan borrowings in the prior year, higher repayments of debt principal ($73.2 million) and payments for deferred financing costs ($22.5 million) in the current year, partially offset by $65.1 million proceeds from the issuance of common stock in the current year.
Off-Balance-Sheet Arrangements
In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying condensed consolidated balance sheets.
−Removed: At March 31, 2021, such instruments inc lude d $1,570.8 million of surety bonds and $423.4 million o f letters of credit.
+Added: At June 30, 2021, such instruments inc lude d $1,555.0 million of surety bonds and $435.4 million o f letters of credit.
Such financial instruments provide support for its reclamation bonding requirements, lease obligations, insu rance policies and various other performance guarantees.
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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 its condensed consolidated balance sheets.
−Removed: As of March 31, 2021, the Company was party to financial instruments with off-balance-sheet risk in support of the following obligations:
+Added: As of June 30, 2021, the Company was party to financial instruments with off-balance-sheet risk in support of the following obligations:
Reclamation Health and welfare (1)
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This change in practice has had an unfavorable impact on its liquidity due to increased collateral requirements and surety and related fees.
−Removed: At March 31, 2021, the Company had total asset retirement obligations of $735.9 million which were backed by a combination of surety bonds, bank guarantees and letters of credit.
+Added: At June 30, 2021, the Company had total asset retirement obligations of $741.8 million which were backed by a combination of surety bonds, bank guarantees and letters of credit.
Bonding requirement amounts may differ significantly from the re lated asset retirement obligation because such requirements are calculated under the assumption that reclamation begins currently, whereas the Company’s accounting liabilities are discounted from the end of a mine’s economic life (when final reclamation work would begin) to the balance sheet date.
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Actual results may differ from these estimates.
−Removed: At March 31, 2021, the Company identified certain assets with an aggregate carrying value of approximately $1.2 billion in its Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S.
+Added: At June 30, 2021, the Company identified certain assets with an aggregate carrying value of approximately $1.2 billion 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.
−Removed: 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.
+Added: 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.
The Company’s critical accounting policies are discussed in Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K for the year ended December 31, 2020.
−Removed: The Company’s critical accounting policies remain unchanged at March 31, 2021.
+Added: The Company’s critical accounting policies remain unchanged at June 30, 2021.
Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented
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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.