What changed in this filing

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Item 1. Financial Statements

2021-11-05 compared with 2021-08-06 · 249 added, 209 removed, 741 unchanged (38% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

10 unchanged sentences

Transaction costs related to joint ventures

— 12.9 — 17.1

Other operating (income) loss:

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

Net gain on disposals ( 25.8 ) ( 2.5 ) ( 28.2 ) ( 10.4 )

Asset impairment — — — 1,418.1

Loss from equity affiliates 3.5 6.0 4.4 15.1

(Income) loss from equity affiliates ( 15.8 ) 10.6 ( 11.4 ) 25.7

Operating loss ( 43.8 ) ( 15.8 ) ( 88.8 ) ( 1,620.2 )

3 unchanged sentences

Net periodic benefit (credit) costs, excluding service cost ( 8.6 ) 2.8 ( 26.0 ) 8.3

Net mark-to-market adjustment on actuarially determined liabilities — 13.0 — 13.0

Loss from continuing operations before income taxes ( 63.3 ) ( 64.9 ) ( 170.6 ) ( 1,736.7 )

1 unchanged sentence

Loss from continuing operations, net of income taxes ( 59.6 ) ( 64.8 ) ( 160.3 ) ( 1,739.4 )

Loss from discontinued operations, net of income taxes ( 2.3 ) ( 2.3 ) ( 4.3 ) ( 4.5 )

Income (loss) from discontinued operations, net of income taxes 24.3 ( 2.3 ) 20.0 ( 6.8 )

Net loss ( 35.3 ) ( 67.1 ) ( 140.3 ) ( 1,746.2 )

10 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

5 unchanged sentences

Other comprehensive (loss) income, net of income taxes ( 11.8 ) 174.8 ( 34.2 ) 169.7

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

Comprehensive (loss) income ( 47.1 ) 107.7 ( 174.5 ) ( 1,576.5 )

Net income (loss) attributable to noncontrolling interests 8.9 0.1 12.6 ( 5.1 )

Comprehensive loss attributable to common stockholders $ ( 39.8 ) $ ( 1,540.3 ) $ ( 131.1 ) $ ( 1,679.0 )

Comprehensive (loss) income attributable to common stockholders $ ( 56.0 ) $ 107.6 $ ( 187.1 ) $ ( 1,571.4 )

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Amounts in millions, except per share data)

1 unchanged sentence

Cash and cash equivalents $ 587.0 $ 709.2

Restricted cash

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

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

Inventories 224.5 261.6

20 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

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

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

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

Common Stock — $ 0.01 per share par value;

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

450.0 shares authorized, 165.3 shares issued and 122.3 shares outstanding as of September 30, 2021 and 140.5 shares issued and 97.8 shares outstanding as of December 31, 2020

Additional paid-in capital 3,605.1 3,364.6

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

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

( 1,370.2 ) ( 1,368.9 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

1 unchanged sentence

Net loss $ ( 140.3 ) $ ( 1,746.2 )

Loss from discontinued operations, net of income taxes 4.3 4.5

(Income) loss from discontinued operations, net of income taxes ( 20.0 ) 6.8

Loss from continuing operations, net of income taxes ( 160.3 ) ( 1,739.4 )

7 unchanged sentences

Net gain on early debt extinguishment ( 31.3 ) —

Loss from equity affiliates 4.4 15.1

(Income) loss from equity affiliates ( 11.4 ) 25.7

Foreign currency option contracts 5.3 ( 5.2 )

10 unchanged sentences

Other, net 0.2 ( 4.6 )

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

Net cash provided by (used in) continuing operations 0.5 ( 9.7 )

Net cash used in discontinued operations ( 18.9 ) ( 22.4 )

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

16 unchanged sentences

Distributions to noncontrolling interests ( 3.9 ) ( 3.5 )

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

Net cash provided by financing activities 15.9 273.9

Net change in cash, cash equivalents and restricted cash ( 122.2 ) 82.4

4 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

(Dollars in millions, except per share data)

(Dollars in millions)

Balance, beginning of period $ 1.5 $ 1.4 $ 1.4 $ 1.4

41 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 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.

The Company’s results of operations for the three and nine months ended September 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

21 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 June 30, 2021

Three Months Ended September 30, 2021

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

9 unchanged sentences

Revenues $ 260.7 $ 179.5 $ 247.1 $ 184.6 $ ( 192.9 ) $ 679.0

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

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

9 unchanged sentences

Revenues $ 163.0 $ 78.8 $ 264.8 $ 179.8 $ ( 15.4 ) $ 671.0

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

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

12 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

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

9 unchanged sentences

Revenues $ 526.1 $ 363.6 $ 737.2 $ 524.1 $ ( 7.1 ) $ 2,143.9

(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.

(1) Corporate and Other revenue includes net losses related to unrealized mark-to-market adjustments on derivatives related to forecasted sales and other financial trading activity of $ 238.4 million and $ 16.1 million during the three months ended September 30, 2021 and 2020, respectively, and $ 263.2 million and $ 13.7 million during the nine months ended September 30, 2021 and 2020, respectively.

Refer to Note 7.

“Derivatives and Fair Value Measurements” for additional information regarding the economic hedge activities.

“Derivatives and Fair Value Measurements” for additional information.

Also included in Corporate and Other revenue are revenues with customers of $ 55.5 million and $ 97.3 million during the three and nine months ended September 30, 2021, respectively, and ($ 13.0 ) million and ($ 32.1 ) million during the three and nine months ended September 30, 2020, respectively.

(2) Other includes revenues from arrangements such as customer contract-related payments associated with volume shortfalls, royalties related to coal lease agreements, sales agency commissions, farm income and property and facility rentals.

The Company recorded revenue related to delivered coal to customers of approximately $ 923 million and $ 665 million during the three months ended September 30, 2021 and 2020, respectively, and approximately $ 2,327 million and $ 2,093 million during the nine months ended September 30, 2021 and 2020, respectively.

Such amounts exclude unrealized and realized gains and losses on derivative contracts related to forecasted sales and certain other revenues unrelated to delivered coal.

Committed Revenue from Contracts with Customers

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.

The Company expects to recognize revenue subsequent to September 30, 2021 of approximately $ 4.6 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at September 30, 2021.

Approximately 42 % of such amount is expected to be recognized over the next twelve months and the remainder thereafter.

2 unchanged sentences

Accounts Receivable

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

June 30, 2021 December 31, 2020

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

September 30, 2021 December 31, 2020

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 276.0 $ 244.8

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.

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

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

Charges for credit losses of less than $ 0.1 million were recognized during the nine months ended September 30, 2021.

No charges for credit losses were recognized during the three months ended September 30, 2021 and 2020 or during the nine months ended September 30, 2020.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(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)

In the third quarter of 2021, the Company executed the sale of the closed Wilkie Creek Mine, which reduced its closed mine reclamation liabilities and associated costs.

Refer to Note 14.

“Other Events” for additional information associated with the Company’s sale of the Wilkie Creek Mine.

Summarized Results of Discontinued Operations

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

(Dollars in millions)

Loss from discontinued operations, net of income taxes $ ( 2.3 ) $ ( 2.3 ) $ ( 4.3 ) $ ( 4.5 )

Income (loss) from discontinued operations, net of income taxes $ 24.3 $ ( 2.3 ) $ 20.0 $ ( 6.8 )

Liabilities of Discontinued Operations

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in millions)

17 unchanged sentences

however, Patriot rejected this indemnity in its May 2015 bankruptcy.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

By statute, the Company had secondary liability for the black lung liabilities related to Patriot’s workers employed by former subsidiaries of the Company.

4 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 $ 89.7 million and $ 90.1 million at June 30, 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 September 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 June 30, 2021 and December 31, 2020 consisted of the following:

June 30, 2021 December 31, 2020

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

September 30, 2021 December 31, 2020

(Dollars in millions)

3 unchanged sentences

Total $ 224.5 $ 261.6

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.

Materials and supplies inventories presented above have been shown net of reserves of $ 9.8 million and $ 10.4 million as of September 30, 2021 and December 31, 2020, respectively.

(6) Equity Method Investments

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.

The Company had total equity method investments and financing receivables of $ 26.8 million and $ 24.6 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively, related to Middlemount Coal Pty Ltd (Middlemount).

Included in “(Income) loss from equity affiliates” in the unaudited condensed consolidated statements of operations were gains related to Middlemount of $ 15.8 million and $ 11.4 million during the three and nine months ended September 30, 2021, respectively, and losses of $ 10.6 million and $ 25.7 million during the three and nine months ended September 30, 2020, respectively.

The Company received cash payments from Middlemount of $ 7.6 million during the nine months ended September 30, 2021.

No payments were received from from Middlemount during the nine months ended September 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 June 30, 2021, the revolving loan limit was $ 160 million Australian dolla rs and the Revolving Loans were not fully drawn upon by Middlemount.

At September 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 $ 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.

T he value of the portion of the Revolving Loans due to the Company’s Australian subsidiary was $ 35.7 million and $ 46.2 million as of September 30, 2021 and December 31, 2020, respectively, with the decreas e during the nine months ended September 30, 2021 primarily attributable to payments made by Middlemount.

As of both September 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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(7) Derivatives and Fair Value Measurements

Corporate Risk Management Activities

From time to time, the Company may utilize various types of derivative instruments to manage its exposure to risks in the normal course of business, including (1) foreign currency exchange rate risk and the variability of cash flows associated with forecasted Australian dollar expenditures made in its Australian mining platform, (2) price risk of fluctuating coal prices related to forecasted sales or purchases of coal, or changes in the fair value of a fixed price physical sales contract, (3) price risk and the variability of cash flows related to forecasted diesel fuel purchased for use in its operations and (4) interest rate risk on long-term debt.

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

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.

On a limited basis, the Company engages in the direct and brokered trading of coal and freight-related contracts.

Except those contracts for which the Company has elected to apply a normal purchases and normal sales exception, all derivative coal trading contracts are accounted for at fair value.

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

Foreign Currency Option Contracts

As of September 30, 2021, the Company had currency options outstanding with an aggregate notional amount of $ 595.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending June 30, 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 $ 0.80 to $ 0.81 over the nine-month period ending March 31, 2022.

dollar exchange rate exceed amounts ranging from $ 0.77 to $ 0.81 over the nine-month period ending June 30, 2022.

Derivative Contracts Related to Forecasted Sales

As of September 30, 2021, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 2.9 million tonnes.

Such financial contracts may include futures, forwards and options.

Included in this total are 2.1 million tonnes related to financial derivatives entered to support the profitability of the Wambo Underground Mine as part of a strategy to extend the mine life through mid-2023.

Of this total, 1.4 million tonnes will settle in 2022 and 0.7 million tonnes will settle in 2023 at expected average pricing of approximately $ 84 per tonne (Newcastle index).

The remaining 0.8 million tonnes aggregate notional volume related to other coal financial contracts will settle in the fourth quarter of 2021 ( 0.2 million tonnes) and 2022 ( 0.6 million tonnes).

Additionally, the Company classifies certain physical forward sales contracts as derivatives for which the normal purchase, normal sales exception does not apply.

During the three months ended September 30, 2021, the Company recorded an unrealized mark-to-market loss of $ 238.4 million on these coal derivative contracts, which includes approximately $ 183 million of unrealized mark-to-market losses on financial derivatives, and approximately $ 55 million on physical forward sales contracts.

Financial Trading Contracts

On a limited basis, the Company may enter coal or freight derivative contracts for trading purposes.

Such financial contracts may include futures, forwards and options.

The Company held nominal financial trading contracts as of September 30, 2021.

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

On a limited basis, the Company engages in the direct and brokered trading of coal and freight-related contracts (coal trading).

Except those contracts for which the Company has elected to apply a normal purchases and normal sales exception, all derivative coal trading contracts are accounted for at fair value.

Tabular Derivatives Disclosures

3 unchanged sentences

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020 (1)

Asset Derivative Liability Derivative Asset Derivative Liability Derivative

1 unchanged sentence

Foreign currency option contracts $ 1.1 $ — $ 10.3 $ —

Coal contracts related to forecasted sales 1.8 ( 28.9 ) 0.9 ( 8.8 )

Coal trading contracts 83.2 ( 88.6 ) 23.4 ( 23.1 )

Derivative contracts related to forecasted sales 113.0 ( 385.2 ) 16.7 ( 24.7 )

Financial trading contracts 1.5 — 0.4 —

Total derivatives 115.6 ( 385.2 ) 27.4 ( 24.7 )

Effect of counterparty netting ( 113.0 ) 113.0 ( 16.2 ) 16.2

Variation margin posted 31.9 — 6.5 —

Net derivatives and margin as classified in the balance sheets $ 1.9 $ ( 1.5 ) $ 10.9 $ ( 1.7 )

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 $ 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.

Variation margin (received) posted ( 1.5 ) 215.8 ( 0.3 ) 6.8

Net derivatives and variation margin as classified in the balance sheets $ 1.1 $ ( 56.4 ) $ 10.9 $ ( 1.7 )

(1) Certain comparative amounts have been reclassified to conform with the 2021 presentation.

The reclassifications do not impact the prior year presentation of the accompanying condensed consolidated balance sheets.

The Company generally posts or receives variation margin cash with its clearing broker on the majority of its financial derivatives as market values of the financial derivatives fluctuate.

As of September 30, 2021, the Company had posted $ 239.6 million aggregate margin cash, consisting of $ 214.3 million variation margin cash and $ 25.3 million initial margin.

As of December 31, 2020, the Company had posted $ 9.5 million aggregate margin cash, consisting of $ 6.5 million variation margin cash and $ 3.0 million initial margin.

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

The amounts of initial margin are not included with the derivatives presented in the tabular disclosures 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.

The tables below show the amounts of pre-tax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Three Months Ended September 30, 2021

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

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts $ ( 1.2 ) $ — $ ( 1.2 )

Coal contracts related to forecasted sales ( 7.6 ) 16.1 ( 23.7 )

Coal trading contracts 1.4 ( 2.4 ) 3.8

Foreign currency option contracts Operating costs and expenses $ ( 1.0 ) $ ( 1.6 ) $ 0.6

Derivative contracts related to forecasted sales Revenues ( 251.5 ) ( 13.1 ) ( 238.4 )

Financial trading contracts Revenues 0.7 0.7 —

Total $ ( 251.8 ) $ ( 14.0 ) $ ( 237.8 )

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

Three Months Ended September 30, 2020 (1)

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

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts $ 2.2 $ ( 0.6 ) $ 2.8

Coal contracts related to forecasted sales 12.6 5.7 6.9

Coal trading contracts ( 0.1 ) ( 1.9 ) 1.8

Foreign currency option contracts Operating costs and expenses $ 3.9 $ 3.2 $ 0.7

Derivative contracts related to forecasted sales Revenues ( 3.3 ) 12.8 ( 16.1 )

Financial trading contracts Revenues ( 0.2 ) ( 0.2 ) —

Total $ 0.4 $ 15.8 $ ( 15.4 )

Six Months Ended June 30, 2021

Nine Months Ended September 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

Derivative Instrument Classification

(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

Foreign currency option contracts Operating costs and expenses $ ( 5.3 ) $ 3.0 $ ( 8.3 )

Derivative contracts related to forecasted sales Revenues ( 292.1 ) ( 28.1 ) ( 264.0 )

Financial trading contracts Revenues 1.4 0.6 0.8

Total $ ( 296.0 ) $ ( 24.5 ) $ ( 271.5 )

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

Nine Months Ended September 30, 2020 (1)

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

Derivative Instrument Classification

(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 )

Foreign currency option contracts Operating costs and expenses $ 5.2 $ 1.6 $ 3.6

Derivative contracts related to forecasted sales Revenues 19.6 30.9 ( 11.3 )

Financial trading contracts Revenues ( 0.5 ) 1.9 ( 2.4 )

Total $ 24.3 $ 34.4 $ ( 10.1 )

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.

(1) 2020 ‘gain/(loss) realized in income on derivatives’ has been revised to exclude revenues arising from coal deliveries earned by the Company’s trading and brokerage function of ($ 13.0 ) million and ($ 32.1 ) million for the three and nine month periods ending September 30, 2020, respectively, to be comparable to the presentation of the 2021 amounts.

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.

7 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.

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:

June 30, 2021

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

As noted below, variation margin cash associated with the derivative balances is excluded from this table.

September 30, 2021

Level 1 Level 2 Level 3 Total

1 unchanged sentence

Foreign currency option contracts $ — $ 1.1 $ — $ 1.1

Coal contracts related to forecasted sales — ( 33.7 ) — ( 33.7 )

Coal trading contracts — 33.1 — 33.1

Derivative contracts related to forecasted sales — ( 272.2 ) — ( 272.2 )

Financial trading contracts — 1.5 — 1.5

Equity securities — — 4.0 4.0

Total net financial assets $ — $ 0.4 $ 4.0 $ 4.4

Total net (liabilities) assets $ — $ ( 269.6 ) $ 4.0 $ ( 265.6 )

December 31, 2020 (1)

2 unchanged sentences

Foreign currency option contracts $ — $ 10.3 $ — $ 10.3

Coal contracts related to forecasted sales — ( 7.9 ) — ( 7.9 )

Coal trading contracts — 6.8 — 6.8

Derivative contracts related to forecasted sales — ( 7.9 ) — ( 7.9 )

Financial trading contracts — 0.4 — 0.4

Equity securities — — 4.0 4.0

Total net financial assets $ — $ 9.2 $ 4.0 $ 13.2

Total net assets $ — $ 2.8 $ 4.0 $ 6.8

(1) December 31, 2020 ‘total net assets’ has been revised to exclude $ 6.5 million variation margin cash for comparability to 2021 presentation.

Variation margin cash was $ 214.3 million as of September 30, 2021.

For Level 1 and 2 financial assets and liabilities, the Company utilizes both direct and indirect observable price quotes, including interest rate yield curves, exchange indices, broker/dealer quotes, published indices, issuer spreads, benchmark securities and other market quotes.

2 unchanged sentences

• Foreign currency option contracts are valued utilizing inputs obtained in quoted public markets (Level 2) except when credit and non-performance risk is considered to be a significant input, then the Company classifies such contracts as Level 3.

• Coal contracts related to forecasted sales and coal trading contracts are generally valued based on unadjusted quoted prices in active markets (Level 1) or a valuation that is corroborated by the use of market-based pricing (Level 2) except when credit and non-performance risk is considered to be a significant input (greater than 10% of fair value), then the Company classifies as Level 3.

• Derivative contracts related to forecasted sales and financial trading contracts are generally valued based on unadjusted quoted prices in active markets (Level 1) or a valuation that is corroborated by the use of market-based pricing (Level 2) except when credit and non-performance risk is considered to be a significant input (greater than 10 % of fair value), then the Company classifies as Level 3.

• Investments in equity securities are based on observed prices in an inactive market (Level 3).

Other Financial Instruments .

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.

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

• Cash and cash equivalents, accounts receivable, including those within the Company’s accounts receivable securitization program, margining cash, 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).

2 unchanged sentences

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.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in millions)

6 unchanged sentences

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 and six months ended June 30, 2021 and 2020.

The Company had no transfers between Levels 1, 2 and 3 during the three and nine months ended September 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 June 30, 2021 and December 31, 2020 is set forth in the table below:

June 30, 2021 December 31, 2020

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

September 30, 2021 December 31, 2020

(Dollars in millions)

5 unchanged sentences

Asset Impairment and Other At-Risk Assets

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.

During the nine months ended September 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;

5 unchanged sentences

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.

No asset impairment charges were recorded during the three and nine months ended September 30, 2021 or the three months ended September 30, 2020.

The Company has identified certain assets with an aggregate carrying value of approximately $ 1.1 billion at September 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 June 30, 2021 and determined that no impairment charges were necessary as of that date.

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

PEABODY ENERGY CORPORATION

9 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.

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

12 unchanged sentences

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

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

September 30, 2021 December 31, 2020

(Dollars in millions)

17 unchanged sentences

Finance leases 8.8 %

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

21 unchanged sentences

(10) Income Taxes

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.

The Company's effective tax rate before remeasurement for the nine months ended September 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 $ 3.7 million and $ 0.1 million for the three months ended September 30, 2021 and 2020, respectively, included a tax benefit of $ 1.1 million and a tax provision of $ 1.1 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax benefit of $ 10.3 million and income tax provision of $ 2.7 million for the nine months ended September 30, 2021 and 2020, respectively, included a tax benefit of $ 1.6 million and a tax provision of $ 0.4 million, respectively, related to the remeasurement of foreign income tax accounts.

As described in Note 11.

4 unchanged sentences

(11) Long-term Debt

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

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

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

(Dollars in millions)

24 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 six months ended June 30, 2021.

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 nine months ended September 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.

6 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 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.

During the three and nine months ended September 30, 2021, the Company recorded interest expense of $ 5.4 million and $ 14.3 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.

6 unchanged sentences

The Co-Issuers may redeem some or all of the Co-Issuer Notes at the redemption prices and on the terms specified in the Co-Issuer Notes Indenture.

The Co-Issuer Notes Indenture contains certain events of default, including, in certain circumstances, (i) specified events occurring at the Wilpinjong Mine, (ii) the termination or modification of the Surety Agreement, (iii) the Company’s failure to comply with any obligation under the transaction support agreement entered into prior to, and in contemplation of, the Refinancing Transactions and (iv) the termination of the management services agreements between the Company and the Co-Issuers.

The Co-Issuer Notes Indenture contains certain events of default, including, in certain circumstances, (i) specified events occurring at the Wilpinjong Mine, (ii) the termination or certain modifications of the Surety Agreement, (iii) the Company’s failure to comply with any obligation under the transaction support agreement entered into prior to, and in contemplation of, the Refinancing Transactions and (iv) the termination of the management services agreements between the Company and the Co-Issuers.

If the Co-Issuer Notes are accelerated or otherwise become due and payable as a result of an event of default, certain additional premium amounts may become due and payable in addition to unpaid principal and interest at the time of acceleration.

5 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 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.

During the three and nine months ended September 30, 2021, the Company recorded interest expense of $ 3.8 million and $ 10.8 million, respectively, related to the Peabody Notes, which included in-kind interest of approximately $ 0.8 million and $ 2.4 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 “Net gain on early debt extinguishment” during the six months ended June 30, 2021.

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

The notes were subsequently canceled.

5 unchanged sentences

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

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.

During the three and nine months ended September 30, 2021, the Company recorded interest expense of $ 5.7 million and $ 14.9 million, respectively, related to the Co-Issuer Term Loans.

PEABODY ENERGY CORPORATION

8 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 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.

During the three and nine months ended September 30, 2021, the Company recorded interest expense and fees of $ 6.0 million and $ 15.9 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.

1 unchanged sentence

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 will be excluded from the calculation.

As such, liquidity attributable to the Co-Issuers, its subsidiaries and other unrestricted subsidiaries is excluded from the calculation.

The Company LC Agreement is guaranteed and secured to the same extent of the Peabody Notes as described above.

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

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:

The Peabody Notes Indenture and the Company LC Agreement allow 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).

5 unchanged sentences

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

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.

The Company recorded interest expense of $ 9.5 million and $ 9.2 million during the three months ended September 30, 2021 and 2020, respectively, and $ 27.9 million and $ 27.5 million during the nine months ended September 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.

10 unchanged sentences

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

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

At September 30, 2021 the Senior Secured Term Loan had a balance of $ 328.7 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.

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.

The Company recorded interest expense of $ 3.3 million and $ 3.4 million, during the three months ended September 30, 2021 and 2020, respectively, and $ 10.1 million and $ 12.1 million during the nine months ended September 30, 2021 and 2020, respectively, related to the Senior Secured Term Loan, which bore interest at LIBOR plus 2.75 % per annum as of September 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 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 Company recorded interest expense and fees of $ 1.4 million during the nine months ended September 30, 2021, and $ 5.1 million and $ 10.8 million, during the three and nine months ended September 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 September 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 including the minimum liquidity covenant under the Company LC Agreement at June 30, 2021.

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

Subsequent Financing Transactions

3 unchanged sentences

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.

During September 2021, the Company announced that it could offer and sell up to an additional 12.5 million shares, for a total of 25.0 million shares authorized through the at-the-market offering program.

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 prospectus supplements dated June 4, 2021 and September 17, 2021, relating to the offer and sale of the shares.

During the three and nine months ended September 30, 2021, the Company sold approximately 9.0 million shares and 17.1 million shares, respectively, for net cash proceeds of $ 112.1 million and $ 177.2 million, respectively.

Between October 1, 2021 and November 2, 2021, the Company settled sales of an additional 3.2 million shares for net proceeds of $ 43.4 million.

During the three months ended September 30, 2021, the Company retired $ 22.1 million of Peabody Notes, $ 2.3 million of 2025 Notes and $ 38.9 million of its Senior Secured Term Loan primarily through various open market purchases at an aggregate cost of $ 46.7 million.

The Company recorded a gain on early debt extinguishment of $ 15.0 million, net of debt issuance costs and original issue discount related to the retired debt of $ 1.6 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.

During the nine months ended September 30, 2021, the Company retired $ 40.1 million of Peabody Notes, $ 19.7 million of 2025 Notes and $ 56.7 million of its Senior Secured Term Loan primarily through various open market purchases at an aggregate cost of $ 85.9 million.

The Company recorded a gain on early debt extinguishment of $ 26.9 million, net of debt issuance costs and original issue discount related to the retired debt of $ 3.7 million.

Also during the three months ended September 30, 2021, the Company completed multiple bilateral transactions with holders of the 2022 Notes, the 2025 Notes and the Peabody Notes in which the Company issued an aggregate 2.2 million shares of its common stock in exchange for $ 6.4 million aggregate principal amount of the 2022 Notes, $ 17.9 million aggregate principal amount of the 2025 Notes and $ 5.5 million aggregate principal amount of the Peabody Notes.

Based upon the fair value of the Company’s common stock at the respective settlement dates, the Company recorded a net gain on early debt extinguishment of $ 1.0 million in connection with the transactions.

During the nine months ended September 30, 2021, the Company completed multiple bilateral transactions with holders of the 2022 Notes, the 2025 Notes and the Peabody Notes in which the Company issued an aggregate 6.7 million shares of its common stock in exchange for $ 37.3 million aggregate principal amount of the 2022 Notes, $ 17.9 million aggregate principal amount of the 2025 Notes and $ 5.5 million aggregate principal amount of the Peabody Notes.

Based upon the fair value of the Company’s common stock at the respective settlement dates, the Company recorded a net gain on early debt extinguishment of $ 0.9 million in connection with the transactions.

The issuance of shares of common stock in exchange for the 2022 Notes, the 2025 Notes and the Peabody Notes was made in reliance on the exemption from registration provided in Section 3(a)(9) under the Securities Act of 1933, based in part on representations of holders of the 2022 Notes, the 2025 Notes and the Peabody Notes, and 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.

Prior to September 30, 2021, the Company reached agreements to retire an additional $ 17.0 million of aggregate principal, which will settle subsequent to September 30, 2021.

This included $ 5.0 million of its Senior Secured Term Loan through similar open market purchases for an aggregate cost of $ 3.3 million, and by issuing an aggregate 0.8 million shares of its common stock in exchange for $ 12.0 million aggregate principal amount of the Peabody Notes in a similar manner as noted above.

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

Between October 1, 2021 and November 2, 2021, the Company reached additional agreements to issue an aggregate 1.1 million shares of its common stock in exchange for $ 19.0 million aggregate principal amount of the 2025 Notes, which was reflected within the long-term debt in the accompanying condensed consolidated balance sheet at September 30, 2021.

As a result of the Company’s open market purchases of its debt during the three months ended September 30, 2021, on October 22, 2021, the Company announced a Mandatory Repurchase Offer of up to $ 15.8 million of Peabody Notes, at 73.590 % 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 November 22, 2021, unless extended by the Company.

Finance Lease Obligations

1 unchanged sentence

“Leases” for additional information associated with the Company’s finance leases, which pertain to the financing of mining equipment used in operations.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(12) Pension and Postretirement Benefit Costs

1 unchanged sentence

Net periodic pension benefit included the following components:

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

Net periodic pension benefit $ ( 0.6 ) $ ( 0.4 ) $ ( 1.7 ) $ ( 1.1 )

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

As of September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

Amortization of prior service credit ( 11.0 ) ( 2.2 ) ( 33.0 ) ( 6.6 )

Net actuarial loss — 13.0 — 13.0

Net periodic postretirement benefit (benefit) cost $ ( 8.1 ) $ 17.0 $ ( 24.2 ) $ 24.9

4 unchanged sentences

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.

In October 2021, the Company announced changes to its postretirement health care benefit plan for certain represented retirees.

Effective January 1, 2022, the Company will not provide medical coverage to certain existing retirees but will continue to offer a life insurance benefit to eligible retirees.

As of September 30, 2021, the health care benefit obligation attributed to these certain existing retirees is approximately $ 160 million.

The impact of the changes will reduce the Company’s postretirement benefit obligation during the fourth quarter of 2021.

The liability is expected to be remeasured, with the resulting benefit of the plan changes recorded in “Accumulated other comprehensive income” and amortized to future earnings based upon the estimated remaining life expectancies of certain plan participants.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(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 six months ended June 30, 2021:

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

Foreign Currency Translation

7 unchanged sentences

Current period change ( 1.2 ) — ( 1.2 )

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)

September 30, 2021 $ 0.6 $ 171.0 $ 171.6

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 September 30, 2021 and 2020, respectively, and $ 33.0 million and $ 6.6 million du ring the nine months ended September 30, 2021 and 2020, respectively, are included in “Net periodic benefit (credit) costs, excluding service cost” in the unaudited condensed consolidated statements of operations.

(14) Other Events

2 unchanged sentences

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 $ 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 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.

Such charges included as “Restructuring charges” in the Company's unaudited condensed consolidated statements of operations amounted to $ 1.7 million and $ 5.9 million for the three and nine months ended September 30, 2021, respectively, and $ 8.1 million and $ 31.1 million for the three and nine months ended September 30, 2020, respectively, were associated with both involuntary and voluntary workforce reductions.

In September 2021, the Company reached a new collective bargaining agreement with the UMWA on behalf of the hourly workforce of its Shoal Creek Mine.

The Company idled the mine in the fourth quarter of 2020 due to market conditions.

During the idle period the Company undertook activities, including a preparation plant upgrade project, to increase productivity, lower costs and improve yields from the operation in the future.

The Company expects to begin production at Shoal Creek Mine in the second half of the fourth quarter of 2021, with ramp up through the first quarter of 2022.

The full workforce of the Metropolitan Mine, which was idled in December 2020, returned to the mine in May 2021.

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 fourth quarter of 2021.

The underground workforce enterprise agreement expired in January 2021 and was renegotiated in October 2021.

During July 2021, the Company executed transactions to sell its closed Millennium and Wilkie Creek Mines, which reduced its closed mine reclamation liabilities and associated costs.

The Millennium Mine was sold for minimal cash consideration and the assumption of the majority of the mine’s reclamation liabilities.

The Company will remain responsible for $ 9.4 million of reclamation liabilities and retains certain royalty rights on future sales.

The Company recorded a gain of $ 26.1 million in connection with the sale, and will recognize royalty revenue when it is deemed collectible.

The gain is included within “Net gain on disposals” in the accompanying unaudited condensed consolidated statements of operations.

The Wilkie Creek Mine was sold for minimal cash consideration and full assumption of the mine’s reclamation liabilities.

The Company retains certain royalty rights on future sales.

The Company recorded a gain of $ 24.6 million in connection with the sale, and will recognize royalty revenue when it is deemed collectible.

The gain is included within “Income (loss) from discontinued operations, net of income taxes” in the accompanying unaudited condensed consolidated statements of operations.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(15) Earnings per Share (EPS)

7 unchanged sentences

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.

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 0.9 million and 2.1 million for the three months ended September 30, 2021 and 2020, respectively, and 0.8 million and 2.3 million for the nine months ended September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

4 unchanged sentences

Loss from continuing operations attributable to common stockholders ( 68.5 ) ( 64.9 ) ( 172.9 ) ( 1,734.3 )

Loss from discontinued operations, net of income taxes

( 2.3 ) ( 2.3 ) ( 4.3 ) ( 4.5 )

Income (loss) from discontinued operations, net of income taxes 24.3 ( 2.3 ) 20.0 ( 6.8 )

Net loss attributable to common stockholders $ ( 44.2 ) $ ( 67.2 ) $ ( 152.9 ) $ ( 1,741.1 )

3 unchanged sentences

Loss from continuing operations $ ( 0.60 ) $ ( 0.66 ) $ ( 1.65 ) $ ( 17.76 )

Loss from discontinued operations

( 0.02 ) ( 0.02 ) ( 0.04 ) ( 0.04 )

Income (loss) from discontinued operations 0.22 ( 0.03 ) 0.19 ( 0.07 )

Net loss attributable to common stockholders $ ( 0.38 ) $ ( 0.69 ) $ ( 1.46 ) $ ( 17.83 )

1 unchanged sentence

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.

At September 30, 2021, such instruments included $ 1,462.4 million of surety bonds and $ 443.2 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.

At September 30, 2021, the Company’s asset retirement obligations of $ 710.2 million were supported by surety bonds of $ 1,293.4 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 September 30, 2021 which served as collateral for surety bonds in support of asset retirement obligations amounted to $ 316.1 million.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

6 unchanged sentences

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.

In connection with the 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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable Securitization

5 unchanged sentences

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

At September 30, 2021, the Com pany had no outstanding borrowings and $ 133.6 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.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 12.6 million at September 30, 2021.

The Company was not required to post cash collateral under the Securitization Program at either September 30, 2021 or December 31, 2020.

The Company incurred interest and fees associated with the Securitization Program of $ 1.0 million and $ 0.8 million during the three months ended September 30, 2021 and 2020, respectively, and $ 3.0 million and $ 2.9 million during the nine months ended September 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.

1 unchanged sentence

The maximum amounts payable under the Company’s debt agreements are equal to the respective principal and interest payments.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(17) Commitments and Contingencies

Unconditional Purchase Obligations

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.

As of September 30, 2021, purchase commitments for capital expenditures were $ 23.4 million, all of which is obligated within the next four years, with $ 16.2 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.

4 unchanged sentences

The Company discusses its significant legal proceedings below, including ongoing proceedings and those that impacted the Company’s results of operations for the periods presented.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Litigation Relating to Continuing Operations

11 unchanged sentences

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.

The defendants filed their reply to Plaintiff’s opposition on August 23, 2021, completing briefing at this phase of the litigation.

Derivative Actions.

15 unchanged sentences

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 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.

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 rules on the motion to dismiss in the Securities Class Action.

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

6 unchanged sentences

The Company’s chief operating decision maker uses Adjusted EBITDA as the primary metric to measure the segments’ operating performance.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Adjusted EBITDA is a non-GAAP financial measure defined as loss from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization.

4 unchanged sentences

Reportable segment results were as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

13 unchanged sentences

Total $ 289.1 $ 95.4 $ 472.3 $ 155.6

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

10 unchanged sentences

Interest income ( 1.4 ) ( 1.6 ) ( 4.2 ) ( 7.1 )

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 )

Net mark-to-market adjustment on actuarially determined liabilities — 13.0 — 13.0

Unrealized losses on derivative contracts related to forecasted sales 238.4 16.1 264.0 11.3

Unrealized (gains) losses on foreign currency option contracts ( 0.6 ) ( 0.7 ) 8.2 ( 3.6 )

Take-or-pay contract-based intangible recognition ( 1.0 ) ( 1.5 ) ( 3.2 ) ( 6.8 )

2 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