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Item 9A. Controls and Procedures

2022-02-18 compared with 2021-02-23 · 688 added, 953 removed, 1861 unchanged (47% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to, among other things, provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is accumulated and communicated to senior management, including the principal executive officer and principal accounting officer, on a timely basis.

As of December 31, 2020, the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2020 were effective to provide reasonable assurance that the desired control objectives were achieved.

Peabody’s disclosure controls and procedures are designed to, among other things, provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is accumulated and communicated to senior management, including the principal executive officer and principal accounting officer, on a timely basis.

As of December 31, 2021, the end of the period covered by this Annual Report on Form 10-K, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures.

Based upon that evaluation, Peabody’s Chief Executive Officer and Chief Financial Officer have concluded that such disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2021 were effective to provide reasonable assurance that the desired control objectives were achieved.

Changes in Internal Control Over Financial Reporting

We periodically review our internal control over financial reporting as part of our efforts to ensure compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

In addition, we routinely review our system of internal control over financial reporting to identify potential changes to our processes and systems that may improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment.

Peabody periodically reviews its internal control over financial reporting as part of its efforts to ensure compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

In addition, Peabody routinely reviews its system of internal control over financial reporting to identify potential changes to its processes and systems that may improve controls and increase efficiency, while ensuring that the Company maintains an effective internal control environment.

Changes may include such activities as implementing new systems;

consolidating the activities of acquired business units;

migrating certain processes to our shared services organizations and/or managed third parties;

migrating certain processes to its shared services organizations and/or managed third parties;

formalizing and refining policies, procedures and control documentation requirements;

improving segregation of duties and adding monitoring controls.

In addition, when we acquire new businesses, we incorporate our controls and procedures into the acquired business as part of our integration activities.

There have been no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Peabody Energy Corporation 2020 Form 10-K

In addition, when Peabody acquires new businesses, it incorporate its controls and procedures into the acquired business as part of its integration activities.

There have been no changes in Peabody’s internal control over financial reporting that occurred during the three months ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for maintaining and establishing adequate internal control over financial reporting.

An evaluation of the effectiveness of the design and operation of our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as of the end of the period covered by this report was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer.

This evaluation is performed to determine if our internal controls over financial reporting provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

An evaluation of the effectiveness of the design and operation of the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as of the end of the period covered by this report was performed under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer.

This evaluation is performed to determine if the Company’s internal controls over financial reporting provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of inherent limitations, any system of internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an assessment of the effectiveness of our internal control over financial reporting using the criteria set by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).

Peabody Energy Corporation 2021 Form 10-K

Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting using the criteria set by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).

Based on this assessment, management concluded that the Company’s internal control over financial reporting was effective to provide reasonable assurance that the desired control objectives were achieved as of December 31, 2021.

Our Independent Registered Public Accounting Firm, Ernst & Young LLP, has audited our internal control over financial reporting, as stated in their unqualified opinion report included herein.

Kellow /s/ Mark A.

Peabody’s Independent Registered Public Accounting Firm, Ernst & Young LLP, has audited Peabody’s internal control over financial reporting, as stated in their unqualified opinion report included herein.

Grech /s/ Mark A.

President and Chief Executive Officer

7 unchanged sentences

In our opinion, Peabody Energy Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Peabody Energy Corporation as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) of the Company, and our report dated February 23, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Peabody Energy Corporation as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”) of the Company, and our report dated February 18, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

19 unchanged sentences

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

The information required by Item 401 of Regulation S-K is included under the caption Proposal I - “Election of Directors” in our 2021 Proxy Statement and in Part I, Item 1.

“Business” of this report under the caption “Information About Our Executive Officers.” The information required by Items 405, 406 and 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is included under the captions “Stock Ownership,” “Corporate Governance - Code of Business Conduct and Ethics” and “Additional Information Concerning the Board of Directors - Committee Overview - Audit Committee” in our 2021 Proxy Statement.

The information required by Item 401 of Regulation S-K is included under the caption Proposal 1 - “Election of Directors” in Peabody’s 2022 Proxy Statement and in Part I, Item 1.

“Business” of this report under the caption “Information About Our Executive Officers.” The information required by Items 405, 406 and 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is included under the captions “Stock Ownership,” “Additional Information Concerning the Board of Directors - Corporate Governance - Code of Business Conduct and Ethics” and “Additional Information Concerning the Board of Directors - Committee Overview - Audit Committee” in Peabody’s 2022 Proxy Statement.

Such information is incorporated herein by reference.

Executive Compensation.

The information required by Items 402 and 407(e)(4) and (e)(5) of Regulation S-K is included under the captions “Additional Information Concerning the Board of Directors - Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in our 2021 Proxy Statement and is incorporated herein by reference.

The information required by Items 402 and 407(e)(4) and (e)(5) of Regulation S-K is included under the captions “Additional Information Concerning the Board of Directors - Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report,” “Risk Assessment in Compensation Programs,” “Executive Compensation Tables” and “Pay Ratio Disclosure” in Peabody’s 2022 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 403 of Regulation S-K is included under the caption “Stock Ownership - Security Ownership of Directors and Management and Certain Beneficial Owners” in our 2021 Proxy Statement and is incorporated herein by reference.

The information required by Item 403 of Regulation S-K is included under the caption “Stock Ownership - Security Ownership of Directors and Management and Certain Beneficial Owners” in Peabody’s 2022 Proxy Statement and is incorporated herein by reference.

Equity Compensation Plan Information

As required by Item 201(d) of Regulation S-K, the following table provides information regarding our equity compensation plans as of December 31, 2020:

As required by Item 201(d) of Regulation S-K, the following table provides information regarding Peabody’s equity compensation plans as of December 31, 2021:

Number of Securities

11 unchanged sentences

Equity compensation plans approved by security holders

1,026,326 (1)

Equity compensation plans not approved by security holders

4 unchanged sentences

Refer to Note 17.

“Share-Based Compensation” to the accompanying consolidated financial statements for additional information regarding the material features of our current equity compensation plans.

Certain Relationships and Related Transactions, and Director Independence.

The information required by Items 404 and 407(a) of Regulation S-K is included under the captions “Review of Related Person Transactions” and “Additional Information Concerning the Board of Directors - Board Independence” in our 2021 Proxy Statement and is incorporated herein by reference.

“Share-Based Compensation” to the accompanying consolidated financial statements for additional information regarding the material features of Peabody’s current equity compensation plans.

Peabody Energy Corporation 2021 Form 10-K

Certain Relationships and Related Transactions, and Director Independence.

The information required by Items 404 and 407(a) of Regulation S-K is included under the captions “Review of Related Person Transactions” and “Additional Information Concerning the Board of Directors - Board Independence” in Peabody’s 2022 Proxy Statement and is incorporated herein by reference.

Principal Accountant Fees and Services.

The information required by Item 9(e) of Schedule 14A is included under the caption “Audit Fees” in our 2021 Proxy Statement and is incorporated herein by reference.

The information required by Item 9(e) of Schedule 14A is included under the caption “Audit Fees” in Peabody’s 2022 Proxy Statement and is incorporated herein by reference.

Exhibits and Financial Statement Schedules.

2 unchanged sentences

The following consolidated financial statements of Peabody Energy Corporation and the report thereon of the independent registered public accounting firm are included herein on the pages indicated:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operations — For the Years Ended December 31, 202 1 , 20 20 and 2 019

Consolidated Statements of Comprehensive (Loss) Income — For the Years Ended December 31, 2020, 2019 and 2018

Consolidated Statements of Comprehensive Income (Loss) — For the Years Ended December 31, 202 1 , 20 20 and 2 019

Consolidated Balance Sheets — December 31, 202 1 and 20 20

11 unchanged sentences

2.2 Order Confirming Debtors’ Second Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code on March 17, 2017 (Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K, filed March 20, 2017).

Peabody Energy Corporation 2021 Form 10-K

2.3 Asset Purchase Agreement, dated as of September 20, 2018, by and between Drummond Company, Inc.

2 unchanged sentences

(Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K/A filed on June 19, 2019).

Peabody Energy Corporation 2020 Form 10-K

3.1 Fourth Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed April 3, 2017).

9 unchanged sentences

4.7 Description of Securities (Incorporated by reference to Exhibit 4.7 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019).

4.8 Indenture dated as of January 29, 2021, by and among the Co-Issuers, Wilmington Trust, National Association, as trustee, and the Company (on a limited basis, to the extent of its obligations specifically set forth therein) (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on February 1, 2021).

4.9 Indenture dated as of January 29, 2021, by and among Peabody, the guarantors party thereto, and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on February 1, 2021).

4.10 Seventh Supplemental Indenture, dated as of January 8, 2021, by and among the Company and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on February 1, 2021).

4.11 Eighth Supplemental Indenture, dated as of January 29, 2021, by and among the Company and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed on February 1, 2021).

4.12 First Supplemental Indenture, dated as of February 3, 2021, by and among the Co-Issuers, Wilmington Trust, National Association, as trustee, and Peabody (on a limited basis, to the extent of its obligations specifically set forth therein) (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on February 5, 2021).

15 unchanged sentences

333-59073, filed July 14, 1998).

Peabody Energy Corporation 2021 Form 10-K

10.6 Federal Coal Lease WYW136142 (Incorporated by reference to Exhibit 10.8 of Amendment No.

4 unchanged sentences

North Antelope Rochelle South (Incorporated by reference to Exhibit 10.68 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).

Peabody Energy Corporation 2020 Form 10-K

10.9 Federal Coal Lease WYW150210:

29 unchanged sentences

Kellow (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 21, 2015).

Peabody Energy Corporation 2021 Form 10-K

10.28* Form of Addendum to Participation Agreement executed by Glenn L.

1 unchanged sentence

Meintjes (2020) (Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020).

10.29* Employment Transition Agreement, dated March 18, 2021, between Peabody Energy Corporation and Glenn L.

Kellow (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on March 18, 2021).

10.30* Contract of Employment, dated October 22, 2020, between Peabody Energy Australia Coal Pty Ltd and Darren R.

Yeates (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 26, 2020).

Peabody Energy Corporation 2020 Form 10-K

10.30* Restated Employment Agreement entered into as of January 7, 2013 by and between the Registrant and Charles F.

Meintjes (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed January 10, 2013).

10.31* Separation and Release Agreement, dated as of September 28, 2020, between Peabody Energy Corporation and Charles Meintjes (Incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).

10.31* Variation of Employment Contract, dated August 11, 2021, between Peabody Energy Australia Coal Pty Ltd and Darren R.

Yeates (Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K, filed August 13, 2021).

10.32* Restated Employment Agreement entered into as of December 20, 2012 by and between the Registrant and Kemal Williamson (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 26, 2012).

8 unchanged sentences

10.39 Sixth Amendment to the Sixth Amended and Restated Receivables Purchase Agreement, dated as of June 30, 2020, by and among P&L Receivables Company, LLC, Peabody Energy Corporation, all Committed Purchasers listed on the signature pages thereto, all Purchaser Agents listed on the signature pages thereto, all LC Participants listed on the signature pages thereto, and PNC Bank, National Association, as Administrator and as LC Bank (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020).

10.40 Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of April 18, 2016, by and among Peabody Energy Corporation, the guarantors party thereto, the lenders party thereto and Citibank, N.A.

as Administrative Agent and L/C Issuer (Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed April 22, 2016).

10.41 Amendment No.

1 to Superpriority Secured Debtor-in-Possession Credit Agreement, dated as of May 9, 2016, by and among Peabody Energy Corporation, the guarantors party thereto, the lenders party thereto and Citibank, N.A.

as Administrative Agent (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed May 24, 2016).

10.42 Amendment No.

2 to Superpriority Secured Debtor-in-Possession Credit Agreement, dated as of May 18, 2016, by and among Peabody Energy Corporation, the guarantors party thereto, the lenders party thereto, the issuing bank party thereto, and Citibank, N.A.

as Administrative Agent (Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed May 24, 2016).

10.43 Amendment No.

4 to the Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of October 11, 2016, by and among Peabody Energy Corporation, Peabody Global Funding, LLC (f/k/a Global Center for Energy and Human Development, LLC) and certain Debtors parties thereto as guarantors, the lenders party thereto and Citibank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on October 14, 2016).

10.44 Amendment No.

5 to Superpriority Secured Debtor-In-Possession Credit Agreement, by and among Peabody Energy Corporation, Peabody Global Funding, LLC (f/k/a Global Center for Energy and Human Development, LLC) and certain Debtors parties thereto as guarantors, the lenders party thereto and Citibank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed November 23, 2016).

Peabody Energy Corporation 2020 Form 10-K

10.45 Amendment No.

6 to Superpriority Secured Debtor-In-Possession Credit Agreement, by and among Peabody Energy Corporation, Peabody Global Funding, LLC and certain Debtors parties thereto as guarantors, the lenders party thereto and Citibank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed December 14, 2016).

10.46 Plan Support Agreement entered into as of December 22, 2016 by and among the Registrant and certain other parties thereto (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 23, 2016).

10.47 Private Placement Agreement entered into as of December 22, 2016 by and among the Registrant and certain of its creditors party thereto (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed December 23, 2016).

10.48 Amendment to Private Placement Agreement entered into as of December 28, 2016 by and among the Registrant and certain of its creditors party thereto (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 30, 2016).

10.49 Second Amendment to Private Placement Agreement entered into as of February 8, 2017 by and among the Registrant and certain of its creditors party thereto (Incorporated by reference to Exhibit 10.127 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016).

10.50 Backstop Commitment Agreement entered into as of December 22, 2016 by and among the Registrant and certain of its creditors party thereto (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed December 23, 2016).

10.51 Amendment to Backstop Commitment Agreement entered into as of December 28, 2016 by and among the Registrant and certain of its creditors party thereto (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed December 30, 2016).

10.52 Share Sale and Purchase Agreement entered into as of November 3, 2016 by and among Peabody Australia Mining Pty Ltd, Peabody Energy Australia Pty Ltd, South32 Aluminium (Holdings) Pty Ltd, and South32 Treasury Limited (Incorporated by reference to Exhibit 10.124 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016).

10.53 Exit Facility Commitment Letter entered into as of January 11, 2017, by and among the Registrant, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Credit Suisse AG, Credit Suisse Securities (USA) LLC, Macquarie Capital Funding LLC and Macquarie Capital (USA) Inc.

(Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 12, 2017).

10.40 Receivables Purchase Facility Commitment Letter entered into as of January 27, 2017, by and among the Registrant, P&L Receivables Company, LLC and PNC Bank, National Association (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 27, 2017).

2 unchanged sentences

10.43 Sixth Amended and Restated Receivables Purchase Agreement, dated as of April 3, 2017, by and among P&L Receivables Company, LLC, Peabody Energy Corporation, the various Sub-Servicers listed on the signature pages thereto, all Conduit Purchasers listed on the signature pages thereto, all Committed Purchasers listed on the signature pages thereto, all Purchaser Agents listed on the signature pages thereto, all LC Participants listed on the signature pages thereto, and PNC Bank, National Association, as Administrator and as LC Bank (Incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed April 3, 2017).

Peabody Energy Corporation 2021 Form 10-K

10.44 First Amendment to the Sixth Amended and Restated Receivables Purchase Agreement, dated as of June 30, 2017, by and among P&L Receivables Company, LLC, Peabody Energy Corporation, the various parties identified on the signature pages thereto as Sub-Servicers, Metropolitan Collieries Pty Ltd, and PNC Bank, National Association, as Administrator and as the sole Purchaser Agent, Committed Purchaser, LC Bank and LC Participant on the date thereof (Incorporated by reference to Exhibit 10.9 of the Registrant’s Quarterly Report on Form 10-Q, filed August 14, 2017).

1 unchanged sentence

10.46 Fifth Amendment to the Sixth Amended and Restated Receivables Purchase Agreement, dated as of April 3, 2019, by and among P&L Receivables Company, LLC, Peabody Energy Corporation, all Committed Purchasers listed on the signature pages thereto, all Purchaser Agents listed on the signature pages thereto, all LC Participants listed on the signature pages thereto, and PNC Bank, National Association, as Administrator and as LC Bank (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed April 4, 2019).

Peabody Energy Corporation 2020 Form 10-K

10.47 Credit Agreement dated as of April 3, 2017, among the Registrant, as Borrower, Goldman Sachs Bank USA, as Administrative Agent, and the other lenders party thereto (Incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K, filed April 3, 2017).

12 unchanged sentences

10.54 Amendment No.

7 by and among Peabody Energy Corporation, the subsidiaries of the Peabody Energy Corporation party thereto as reaffirming parties, the lenders party thereto, and JPMorgan Chase Bank, N.A., as successor administrative agent, dated as of September 17, 2019 (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).

7 to Credit Agreement by and among Peabody Energy Corporation, the subsidiaries of the Peabody Energy Corporation party thereto as reaffirming parties, the lenders party thereto, and JPMorgan Chase Bank, N.A., as successor administrative agent, dated as of September 17, 2019 (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).

10.55 Amendment No.

8 to Credit Agreement by and among Peabody Energy Corporation, the subsidiaries of Peabody Energy Corporation party thereto as reaffirming parties, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, dated as of January 29, 2021 (as successor to Goldman Sachs Bank USA in its capacity as administrative agent) (Incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K/A filed on February 1, 2021).

10.56 Credit Agreement, dated as of January 29, 2021, among the Co-Issuers, as borrowers, Peabody Energy Corporation, as parent, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K/A filed on February 1, 2021).

10.57 Credit Agreement, dated as of January 29, 2021, among the Registrant, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K/A filed on February 1, 2021).

10.58* Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 4.6 of the Registrant’s Registration Statement on Form S-8, filed April 3, 2017).

Peabody Energy Corporation 2021 Form 10-K

10.59 Registration Rights Agreement, dated as of April 3.

11 unchanged sentences

10.69* Form of Deferred Stock Unit Agreement under the Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).

Peabody Energy Corporation 2020 Form 10-K

10.70* Form of Restricted Stock Unit Agreement (Director Level and Above 2020 Off-Cycle Award) under the Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).

1 unchanged sentence

10.72* Form of Restricted Stock Unit Agreement under the Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 10.5 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020).

10.73* Form of 2021 Service-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on March 5, 2021) .

10.74* Form of Amendment No.

1 to 2021 Service-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on March 5, 2021).

10.75* † Form of 2022 Service-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (US Employees).

10.76* † Form of 2022 Performance-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (US Employees).

10.77* † Form of 2022 Restricted Stock Unit Agreement under the Peabody Energy Corporation 2017 Incentive Plan (US Employees).

10.78* † Form of 2022 Global Restricted Stock Unit Agreement under the Peabody Energy Corporation 2017 Incentive Plan (AUS Employees).

10.79* † Offer of Restricted Stock Units to Australian Resident Grantees under the Peabody Energy Corporation 2017 Incentive Plan (AUS Employees).

10.80* † Form of 2022 Service-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (AUS Employees).

Peabody Energy Corporation 2021 Form 10-K

10.81* † Form of 2022 Performance-Based Cash Award Agreement under the Peabody Energy Corporation 2017 Incentive Plan (AUS Employees).

10.82 Agreement, dated as of February 4, 2020, by and among Peabody Energy Corporation, Elliott Investment Management L.P., Elliott Associates, L.P.

7 unchanged sentences

10.87 Amended and Restated Transaction Support Agreement, dated as of December 31, 2020, between Peabody, certain subsidiaries of Peabody, the Revolving Lenders, the Administrative Agent, and the Consenting Noteholders (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed January 4, 2021).

10.90 First Amendment to Amended and Restated Transaction Support Agreement, dated as of January 29, 2021, between Peabody, certain subsidiaries of Peabody, the Revolving Lenders, the Administrative Agent, and the Consenting Noteholders (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 1, 2021).

10.88 First Amendment to Amended and Restated Transaction Support Agreement, dated as of January 29, 2021, between Peabody, certain subsidiaries of Peabody, the Revolving Lenders, the Administrative Agent, and the Consenting Noteholders (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A filed on February 1, 2021).

10.89† Agreement for Irrevocable Standby Letters of Credit, dated as of February 17, 2022, between Peabody and Goldman Sachs Bank USA.

21† List of Subsidiaries.

23.1† Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

23.2† Consent of Weir International, Inc.

23.2† Consents of Qualified Persons for Technical Report Summary for the North Antelope Rochelle Mine.

23.3† Consents of Qualified Persons for Technical Report Summary for the Shoal Creek Mine.

23.4† Consents of Qualified Persons for Technical Report Summary for the Wilpinjong Mine.

23.5† Consents of Qualified Persons for Technical Report Summary for the Coppabella Moorvale Joint Venture.

31.1† Certification of periodic financial report by the Registrant’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

5 unchanged sentences

95† Mine Safety Disclosure required by Item 104 of Regulation S-K.

96.1† Technical Report Summary for the North Antelope Rochelle Mine, effective as of December 31, 2021.

96.2† Technical Report Summary for the Shoal Creek Mine, effective as of December 31, 2021.

96.3† Technical Report Summary for the Wilpinjong Mine, effective as of December 31, 2021.

96.4† Technical Report Summary for the Coppabella Moorvale Joint Venture, effective as of December 31, 2021.

101.INS Inline XBRL Instance Document - the instance document does not appear in the interactive data file because XBRL tags are embedded within the Inline XBRL document

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101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

Peabody Energy Corporation 2021 Form 10-K

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

* These exhibits constitute all management contracts, compensatory plans and arrangements required to be filed as an exhibit to this form pursuant to Item 15(a)(3) and 15(b) of this report.

Peabody Energy Corporation 2020 Form 10-K

† Filed herewith.

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Signature Title Date

KELLOW President and Chief Executive Officer,

GRECH President and Chief Executive Officer,

Director (principal executive officer) February 18, 2022

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Michael Sutherlin

/s/ DARREN YEATES Director and Executive Vice President and Chief Operating Officer February 20, 2021

Darren Yeates

Peabody Energy Corporation 2021 Form 10-K

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Peabody Energy Corporation (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive (loss) income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with US generally accepted accounting principles.

We have audited the accompanying consolidated balance sheets of Peabody Energy Corporation (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 18, 2022 expressed an unqualified opinion thereon.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Peabody Energy Corporation 2021 Form 10-K

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As part of this effort, our specialists interviewed members of the Company’s engineering staff, assessed the completeness of the mine reclamation estimate with respect to meeting mine closure and post closure plan regulatory requirements, and evaluated the reasonableness of the engineering estimates and assumptions.

Asset Impairment of North Antelope Rochelle Mine

Description of the Matter As discussed in Note 3 to the consolidated financial statements, during 2020, the Company recorded an impairment loss on certain long-lived assets related to its North Antelope Rochelle Mine based upon the expectation of reduced future sales volumes.

Accordingly, during the second quarter, the Company evaluated its long-lived assets for recoverability and determined that these assets were not recoverable and were impaired.

As a result, the Company recognized a $1,418.1 million impairment loss, which is the amount by which the carrying value exceeded the estimated fair value of these assets.

Auditing the Company's impairment measurement involved a high degree of subjectivity as estimates underlying the determination of fair value were based on assumptions about future market and economic conditions.

Significant assumptions used in the Company’s fair value estimate included future tons sold, coal prices for unpriced coal, production costs, transportation costs, and the cost of capital.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's processes to determine the fair value of the asset group and to measure the long-lived asset impairment.

This included controls over management's review of the significant assumptions underlying the fair value determination.

Our testing of the Company's impairment measurement included, among other procedures, evaluating the significant assumptions and operating data used to estimate fair value.

For example, we compared the significant assumptions used to estimate market participant cash flows to current industry and economic outlook, obtained support to evaluate projected operating data and recalculated management's estimate of fair value.

We also involved our specialists to assist in our evaluation of the methodologies utilized in developing the estimate of fair value, reviewing the significant assumptions utilized including the weighted average cost of capital, and to prepare comparative calculations of management’s fair value estimate.

/s/ Ernst & Young, LLP

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Restructuring charges 8.3 37.9 24.3

Transaction costs related to business combinations and joint ventures

23.1 21.6 7.4

Transaction costs related to joint ventures — 23.1 21.6

Other operating (income) loss:

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North Goonyella insurance recovery — — ( 125.0 )

Loss (income) from equity affiliates 60.1 ( 3.4 ) ( 68.1 )

(Income) loss from equity affiliates ( 82.1 ) 60.1 ( 3.4 )

Operating profit (loss) 432.2 ( 1,728.3 ) 61.7

Interest expense 183.4 139.8 144.0

Net (gain) loss on early debt extinguishment ( 33.2 ) — 0.2

Interest income ( 6.5 ) ( 9.4 ) ( 27.0 )

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( 43.4 ) ( 5.1 ) 67.4

Reorganization items, net — — ( 12.8 )

(Loss) income from continuing operations before income taxes ( 1,851.8 ) ( 142.3 ) 664.1

Income (loss) from continuing operations before income taxes 370.2 ( 1,851.8 ) ( 142.3 )

Income tax provision 22.8 8.0 46.0

(Loss) income from continuing operations, net of income taxes ( 1,859.8 ) ( 188.3 ) 645.7

(Loss) income from discontinued operations, net of income taxes ( 14.0 ) 3.2 18.1

Net (loss) income ( 1,873.8 ) ( 185.1 ) 663.8

Series A Convertible Preferred Stock dividends — — 102.5

Net (loss) income attributable to noncontrolling interests ( 3.5 ) 26.2 16.9

Net (loss) income attributable to common stockholders $ ( 1,870.3 ) $ ( 211.3 ) $ 544.4

(Loss) income from continuing operations:

Basic (loss) income per share $ ( 18.99 ) $ ( 2.07 ) $ 4.35

Diluted (loss) income per share $ ( 18.99 ) $ ( 2.07 ) $ 4.28

Net (loss) income attributable to common stockholders:

Basic (loss) income per share $ ( 19.14 ) $ ( 2.04 ) $ 4.50

Diluted (loss) income per share $ ( 19.14 ) $ ( 2.04 ) $ 4.43

Income (loss) from continuing operations, net of income taxes 347.4 ( 1,859.8 ) ( 188.3 )

Income (loss) from discontinued operations, net of income taxes 24.0 ( 14.0 ) 3.2

Net income (loss) 371.4 ( 1,873.8 ) ( 185.1 )

Net income (loss) attributable to noncontrolling interests 11.3 ( 3.5 ) 26.2

Net income (loss) attributable to common stockholders $ 360.1 $ ( 1,870.3 ) $ ( 211.3 )

Income (loss) from continuing operations:

Basic income (loss) per share $ 3.03 $ ( 18.99 ) $ ( 2.07 )

Diluted income (loss) per share $ 3.00 $ ( 18.99 ) $ ( 2.07 )

Net income (loss) attributable to common stockholders:

Basic income (loss) per share $ 3.24 $ ( 19.14 ) $ ( 2.04 )

Diluted income (loss) per share $ 3.22 $ ( 19.14 ) $ ( 2.04 )

See accompanying notes to consolidated financial statements

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PEABODY ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

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(Dollars in millions)

Net (loss) income $ ( 1,873.8 ) $ ( 185.1 ) $ 663.8

Postretirement plans and workers’ compensation obligations (net of respective net tax provision of $ 0.0 , $ 0.0 and $ 7.1 )

Net income (loss) $ 371.4 $ ( 1,873.8 ) $ ( 185.1 )

Postretirement plans (net of $ 0.0 tax provisions in each period)

93.1 168.1 ( 8.7 )

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Other comprehensive income (loss), net of income taxes 92.1 174.2 ( 8.5 )

Comprehensive (loss) income ( 1,699.6 ) ( 193.6 ) 702.5

Series A Convertible Preferred Stock dividends — — 102.5

Net (loss) income attributable to noncontrolling interests ( 3.5 ) 26.2 16.9

Comprehensive (loss) income attributable to common stockholders $ ( 1,696.1 ) $ ( 219.8 ) $ 583.1

Comprehensive income (loss) 463.5 ( 1,699.6 ) ( 193.6 )

Net income (loss) attributable to noncontrolling interests 11.3 ( 3.5 ) 26.2

Comprehensive income (loss) attributable to common stockholders $ 452.2 $ ( 1,696.1 ) $ ( 219.8 )

See accompanying notes to consolidated financial statements

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( 1,370.3 ) ( 1,368.9 )

(Accumulated deficit) retained earnings ( 1,273.3 ) 597.0

Accumulated deficit ( 913.2 ) ( 1,273.3 )

Accumulated other comprehensive income 297.9 205.8

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Cash Flows From Operating Activities

Net (loss) income $ ( 1,873.8 ) $ ( 185.1 ) $ 663.8

Loss (income) from discontinued operations, net of income taxes 14.0 ( 3.2 ) ( 18.1 )

(Loss) income from continuing operations, net of income taxes ( 1,859.8 ) ( 188.3 ) 645.7

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

Net income (loss) $ 371.4 $ ( 1,873.8 ) $ ( 185.1 )

(Income) loss from discontinued operations, net of income taxes ( 24.0 ) 14.0 ( 3.2 )

Income (loss) from continuing operations, net of income taxes 347.4 ( 1,859.8 ) ( 188.3 )

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

Depreciation, depletion and amortization 308.7 346.0 601.0

Noncash interest expense including loss on early extinguishment of debt

16.2 16.2 19.2

Noncash coal inventory revaluation ( 0.7 ) 8.3 —

Noncash interest expense, net 21.3 16.2 16.0

Deferred income taxes ( 7.5 ) 27.8 39.4

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Net gain on disposals ( 31.5 ) ( 15.2 ) ( 2.1 )

Loss (income) from equity affiliates 60.1 ( 3.4 ) ( 68.1 )

Net (gain) loss on early debt extinguishment ( 33.2 ) — 0.2

(Income) loss from equity affiliates ( 82.1 ) 60.1 ( 3.4 )

Provision for North Goonyella equipment loss — — 83.2

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Foreign currency option contracts 5.8 ( 13.0 ) 5.2

Noncash reorganization items, net — — ( 12.8 )

Changes in current assets and liabilities:

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Net cash used in discontinued operations ( 20.7 ) ( 24.7 ) ( 28.0 )

Net cash (used in) provided by operating activities ( 9.7 ) 677.4 1,489.7

Net cash provided by (used in) operating activities 420.0 ( 9.7 ) 677.4

See accompanying notes to consolidated financial statements

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Changes in accrued expenses related to capital expenditures 7.4 ( 6.1 ) 0.1

Federal coal lease expenditures — — ( 0.5 )

Insurance proceeds attributable to North Goonyella equipment losses

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Advances to related parties ( 0.5 ) ( 23.2 ) ( 27.3 )

Cash receipts from Middlemount Coal Pty Ltd — 14.7 106.7

Cash receipts from Middlemount Coal Pty Ltd and other related parties 44.7 — 14.7

Investment in equity securities — — ( 3.0 )

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Payment of debt issuance and other deferred financing costs ( 22.5 ) ( 7.0 ) ( 6.4 )

Proceeds from common stock issuances, net of costs 269.8 — —

Common stock repurchases — — ( 329.9 )

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Distributions to noncontrolling interests ( 4.0 ) ( 3.5 ) ( 23.5 )

Other, net — — 0.1

Net cash provided by (used in) financing activities 193.4 ( 701.3 ) ( 1,025.2 )

Net cash (used in) provided by financing activities ( 43.4 ) 193.4 ( 701.3 )

Net change in cash, cash equivalents and restricted cash 245.1 ( 23.0 ) ( 285.2 )

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Peabody Energy Corporation Stockholders’ Equity

Series A Convertible Preferred Stock Common

Stock Additional

Capital Treasury

Stock (Accumulated Deficit) Retained

Earnings Accumulated

Comprehensive (Loss) Income Noncontrolling

Stock Retained

(Accumulated Deficit) Accumulated

Comprehensive Income Noncontrolling

Interests Total

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December 31, 2018 $ 1.4 $ 3,304.7 $ ( 1,025.1 ) $ 1,074.5 $ 40.1 $ 56.0 $ 3,451.6

Impact of adoption of Accounting Standards Update 2014-09 — — — — ( 22.5 ) — — ( 22.5 )

Net income — — — — 646.9 — 16.9 663.8

Net (loss) income — — — ( 211.3 ) — 26.2 ( 185.1 )

Dividends declared ($ 2.410 per share)

— 8.1 — ( 266.2 ) — — ( 258.1 )

Postretirement plans and workers’ compensation obligations (net of $ 7.1 tax provision)

Postretirement plans (net of $ 0.0 tax provision)

— — — — ( 8.7 ) — ( 8.7 )

Foreign currency translation adjustment — — — — 0.2 — 0.2

Series A Convertible Preferred Stock conversions ( 576.0 ) 0.4 678.1 — ( 102.5 ) — — —

Share-based compensation for equity-classified awards — 38.3 — — — — 38.3

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December 31, 2019 $ 1.4 $ 3,351.1 $ ( 1,367.3 ) $ 597.0 $ 31.6 $ 58.7 $ 2,672.5

Net (loss) income — — — — ( 211.3 ) — 26.2 ( 185.1 )

Dividends declared ($ 2.410 per share)

— — 8.1 — ( 266.2 ) — — ( 258.1 )

Postretirement plans and workers’ compensation obligations (net of $ 0.0 tax provision)

Net loss — — — ( 1,870.3 ) — ( 3.5 ) ( 1,873.8 )

Postretirement plans (net of $ 0.0 tax provision)

— — — — 168.1 — 168.1

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Share-based compensation for equity-classified awards — 13.5 — — — — 13.5

Common stock repurchases — — — ( 329.9 ) — — — ( 329.9 )

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

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December 31, 2020 $ 1.4 $ 3,364.6 $ ( 1,368.9 ) $ ( 1,273.3 ) $ 205.8 $ 51.7 $ 981.3

Net loss — — — — ( 1,870.3 ) — ( 3.5 ) ( 1,873.8 )

Postretirement plans and workers’ compensation obligations (net of $ 0.0 tax provision)

Net income — — — 360.1 — 11.3 371.4

Postretirement plans (net of $ 0.0 tax provision)

— — — — 93.1 — 93.1

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Share-based compensation for equity-classified awards — 10.0 — — — — 10.0

Common stock issued in exchange for debt retirement 0.1 101.8 — — — — 101.9

Common stock issuances, net of cost 0.3 269.2 — — — — 269.5

Repurchase of employee common stock relinquished for tax withholding — — ( 1.4 ) — — — ( 1.4 )

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The Company’s mining operations are located in the United States (U.S.) and Australia, including an equity-affiliate mining operation in Australia.

The Company also markets and brokers coal from other coal producers and trades coal and freight-related contracts through trading and business offices in the U.S., Australia, China and the United Kingdom.

The Company’s other commercial activities include managing its coal reserve and real estate holdings, and supporting the development of clean coal technologies.

Refinancing Transactions

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.

Such agreements and related activities are described below.

Organizational Realignment

In July and August 2020, the Company effected certain changes to its corporate structure in contemplation of a debt-for-debt exchange, which included, among other steps, the formation of certain wholly-owned subsidiaries (the Co-Issuers) to indirectly own and conduct the operations of the Company’s Wilpinjong Mine in Australia and the designation of such entities as unrestricted subsidiaries under the Credit Agreement and its senior notes’ indenture (the Existing Indenture).

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 .

Surety Agreement

In November 2020, the Company entered into a surety transaction support agreement (Surety Agreement) with the providers of 99 % of its surety bond portfolio (Participating Sureties) to resolve approximately $ 800 million in additional collateral demands made by the Participating Sureties.

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

Upon completion of the Refinancing Transactions, as defined below, other provisions of the Surety Agreement became effective.

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

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

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, or attempt to cancel, any existing surety bond.

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

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Refinancing Transactions

On January 29, 2021 (the Settlement Date), the Company completed a series of transactions (collectively, the Refinancing Transactions) to, among other things, provide the Company with maturity extensions and covenant relief, while allowing it to maintain sufficient operating liquidity and financial flexibility.

The Refinancing Transactions included a senior notes exchange and related consent solicitation, a revolving credit facility exchange, and various amendments to the Company’s existing debt agreements, as summarized below.

Exchange Offer

On the Settlement Date, the Company settled an exchange offer (Exchange Offer) pursuant to which $ 398.7 million aggregate principal amount of the Company’s 6.000 % Senior Secured Notes due March 2022 (the 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 (New Co-Issuer Notes), (b) $ 195.1 million aggregate principal amount of new 8.500 % Senior Secured Notes due 2024 issued by the Company (New 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.

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.

In connection with the Exchange Offer, the Company must offer to purchase up to $ 22.5 million New Peabody Notes at 80 % of their accreted value, plus accrued and unpaid interest, subsequent to the Settlement Date.

The Company expects to complete this purchase during the first quarter of 2021.

Consent Solicitation

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

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

Revolver Transactions

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

The New Co-Issuer Term Loans mature on December 31, 2024 and bear interest at a rate of 10.00 % per annum.

On the Settlement Date, the Company entered into the New Company LC Agreement with the revolving lenders party to the Credit Agreement, pursuant to which the Company obtained a $ 324.0 million letter of credit facility under which the Company’s existing letters under the Credit Agreement were deemed to be issued.

The commitments under the New Company LC Agreement mature on December 31, 2024.

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

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

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.

The New 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 will be excluded from the calculation.

The Company capitalized $ 7.0 million of debt issuance costs incurred in relation to the Refinancing Transactions during the year ended December 31, 2020.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Plan of Reorganization and Emergence from Chapter 11 Cases

On April 13, 2016, PEC and a majority of its wholly owned domestic subsidiaries, as well as one international subsidiary in Gibraltar (collectively with PEC, the Debtors), filed voluntary petitions (the Bankruptcy Petitions) under Chapter 11 of Title 11 of the U.S.

Code (the Bankruptcy Code) in the U.S.

Bankruptcy Court for the Eastern District of Missouri (the Bankruptcy Court).

The Debtors’ Chapter 11 cases (the Chapter 11 Cases) were jointly administered under the caption In re Peabody Energy Corporation, et al.

For periods subsequent to filing the Bankruptcy Petitions, the Company applied the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 852, “Reorganizations,” in preparing its consolidated financial statements.

ASC 852 requires that financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

Accordingly, certain revenues, expenses, realized gains and losses and provisions for losses that were realized or incurred in the bankruptcy proceedings were recorded in “Reorganization items, net” in the consolidated statements of operations.

On March 17, 2017, the Bankruptcy Court entered an order, Docket No.

2763, confirming the Debtors’ Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession (as further modified, the Plan).

On April 3, 2017, (the Effective Date), the Debtors satisfied the conditions to effectiveness set forth in the Plan, the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases.

During the year ended December 31, 2018, the Company recorded an additional gain on the settlement of claims for $ 12.8 million related to certain unsecured claims.

The Company also markets and brokers coal from other coal producers and trades coal and freight-related contracts.

The Company’s other commercial activities include managing its coal reserves and resources and real estate holdings and supporting the development of clean coal technologies.

Newly Adopted Accounting Standards

Financial Instruments - Credit Losses.

In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 (Topic 326) related to the measurement of credit losses on financial instruments.

The new standard replaces the incurred loss methodology to record credit losses with a methodology that reflects the expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The Company adopted the standard on January 1, 2020 using the modified retrospective approach.

The Company will be required to use a forward-looking expected loss model for accounts receivables, loans and other financial instruments to record an allowance for the estimated contractual cash flows not expected to be collected.

The Company has not restated comparative information for 2019 and no adjustments to retained earnings were necessary as a result of adopting Topic 326.

Effective January 1, 2020, the Company recognizes an allowance for credit losses for financial assets carried at amortized cost to present the net amount expected to be collected as of the balance sheet date.

Such allowance is based on the credit losses expected to arise over the life of the asset (contractual term) which includes consideration of prepayments and is based on the Company’s expectations as of the balance sheet date.

Assets are written off when the Company determines that such financial assets are deemed uncollectible.

Write-offs are recognized as deductions from the allowance for credit losses.

Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in determining the necessary reserve at the balance sheet date.

The Company pools its accounts receivable based on similar risk characteristics in estimating its expected credit losses.

The Company also continuously evaluates such pooling decisions and adjusts as needed from period to period as risk characteristics change.

Fair Value Measurement.

In August 2018, the FASB issued ASU 2018-13, which amended the fair value measurement guidance by removing and modifying certain disclosure requirements, while also adding new disclosure requirements.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

All other amendments should be applied retrospectively to all periods presented upon their effective date.

The Company adopted the disclosure requirements effective January 1, 2020.

Compensation - Retirement Benefits.

In August 2018, the FASB issued ASU 2018-14 to add, remove and clarify disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

The Company adopted the disclosure requirements effective January 1, 2020.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income Taxes.

In December 2019, the FASB issued ASU 2019-12 as part of its effort to reduce the complexity of accounting standards.

The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740, including requirements related to (1) hybrid tax regimes, (2) the tax basis step-up in goodwill obtained in a transaction that is not a business combination, (3) separate financial statements of entities not subject to tax, (4) the intraperiod tax allocation exception to the incremental approach, (5) recognition of a deferred tax liability after an investor in a foreign entity transitions to or from the equity method of accounting, (6) interim-period accounting for enacted changes in tax law and (7) the year-to-date loss limitation in interim-period tax accounting.

ASU 2019-12 is effective on January 1, 2021 for calendar year-end public companies and early adoption is permitted.

The Company elected to early adopt ASU 2019-12 in the third quarter of 2020 and apply the guidance to the beginning of the annual period, effective January 1, 2020.

The singular current year impact of the adoption of this ASU is related to the intraperiod tax allocation exception.

Under this new guidance, the Company is no longer required to allocate income tax benefit to continuing operations to offset the tax effect of other comprehensive income in situations where there is a loss from continuing operations and income in all other sources of income.

Under the predecessor accounting guidance, the Company would have recorded approximately $ 38 million of incremental income tax benefit in continuing operations with an offsetting income tax expense in other comprehensive income.

Accounting Standards Not Yet Implemented

Equity Method Investments.

In January 2020, the FASB issued ASU 2020-01, which clarifies the interactions between ASC 321, ASC 323 and ASC 815.

In January 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-01, which clarifies the interactions between Accounting Standards Codification (ASC) 321, ASC 323 and ASC 815.

The new guidance addresses accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments.

ASU 2020-01 is effective on January 1, 2021 for calendar year-end public companies and early adoption is permitted.

The Company plans to adopt the requirements effective January 1, 2021.

Effects of Reference Rate Reform.

ASU 2020-01 is effective on January 1, 2021 for calendar year-end public companies.

The Company adopted the requirements effective January 1, 2021.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements or disclosures.

Accounting Standards Not Yet Implemented

Reference Rate Reform.

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

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

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

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

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

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

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

In November 2021, ASU 2021-09 was issued, which allows lessees to make an accounting policy election by class of underlying asset, rather than on an entity-wide basis, to use a risk-free rate as the discount rate when measuring and classifying leases.

The Company is required to apply the amendments for fiscal years beginning after December 15, 2021 and for interim periods with fiscal years beginning after December 15, 2022.

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

Government Assistance.

In November 2021, ASU 2021-10 was issued, which aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the financial statements.

The guidance is effective for annual periods beginning after December 15, 2021, with early application permitted.

The Company does not plan to early adopt the guidance in ASU 2021-10 and the Company does not expect the guidance to have a material impact on its disclosures.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The majority of the Company’s revenue is derived from the sale of coal under long-term coal supply agreements (those with initial terms of one year or longer and which often include price reopener and/or extension provisions) and contracts with terms of less than one year, including sales made on a spot basis.

6 unchanged sentences

A majority of these sales are executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically.

Industry commercial practice, and the Company’s typical practice, is to negotiate pricing for seaborne thermal coal contracts on an annual, spot or index basis and seaborne metallurgical coal contracts on a quarterly, spot or index basis.

The portion of sales volume under contracts with a duration of less than one year has increased in recent years.

In the case of periodically negotiated pricing, the Company may deliver coal under provisional pricing until a final agreed-upon price is determined.

The resulting make-whole settlements are recognized when reasonably estimable.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Variable consideration resulting from provisional pricing arrangements is recognized based on the Company’s best estimate of the amount expected to be received at the time control is transferred to the customer.

The Company’s U.S.

17 unchanged sentences

Royalty income generally results from the lease or sublease of mineral rights to third parties, with payments based upon a percentage of the selling price or an amount per ton of coal produced.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Discontinued Operations

14 unchanged sentences

The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale in the consolidated balance sheets.

16 unchanged sentences

This reserve incorporates several factors, such as anticipated usage, inventory turnover and inventory levels.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property, Plant, Equipment and Mine Development

7 unchanged sentences

Costs to acquire computer hardware and the development and/or purchase of software for internal use are capitalized and depreciated over the estimated useful lives.

Coal reserves are recorded at cost, or at fair value in the case of nonmonetary exchanges of reserves or business acquisitions.

Depletion of coal reserves and amortization of advance royalties are computed using the units-of-production method utilizing only proven and probable reserves (as adjusted for recoverability factors) in the depletion base.

Coal reserves and resources are recorded at cost, or at fair value in the case of nonmonetary exchanges of reserves and resources or business acquisitions.

Depletion of coal reserves and resources and amortization of advance royalties are computed using the units-of-production method utilizing expected recoverable tons (as adjusted for recoverability factors) in the depletion base.

Mine development costs are principally amortized over the estimated lives of the mines using the straight-line method.

7 unchanged sentences

Total royalty expense was $ 263.0 million, $ 214.7 million and $ 388.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A substantial amount of the coal mined by the Company is produced from mineral reserves leased from the owner.

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The amount and type of compensation and the ability to proceed to grant of a mining tenement may be determined by agreement or court determination, as provided by law.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company determines if an arrangement is a lease at inception.

11 unchanged sentences

Investments accounted for under the equity method are initially recorded at cost and any difference between the cost of the Company’s investment and the underlying equity in the net assets of the joint venture at the investment date is amortized over the lives of the related assets that gave rise to the difference.

The Company’s pro-rata share of the operating results of joint ventures and basis difference amortization is reported in the consolidated statements of operations in “Loss (income) from equity affiliates.” Similarly, the Company’s pro-rata share of the cumulative foreign currency translation adjustment of its equity method investments whose functional currency is not the U.S.

The Company’s pro-rata share of the operating results of joint ventures and basis difference amortization is reported in the consolidated statements of operations in “(Income) loss from equity affiliates.” Similarly, the Company’s pro-rata share of the cumulative foreign currency translation adjustment of its equity method investments whose functional currency is not the U.S.

dollar is reported in the consolidated balance sheets as a component of “Accumulated other comprehensive income,” with periodic changes thereto reflected in the consolidated statements of comprehensive income.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company monitors its equity method investments for indicators that a decrease in investment value has occurred that is other than temporary.

19 unchanged sentences

Contemporaneous reclamation consists primarily of grading, topsoil replacement and re-vegetation of backfilled pit areas.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contingent Liabilities

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The Company includes the interest component of any litigation-related penalties within “Interest expense” in the consolidated statements of operations.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income taxes are accounted for using a balance sheet approach.

20 unchanged sentences

“Pension and Savings Plans” for information related to pension plans.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restructuring Activities

4 unchanged sentences

As of December 31, 2021, a $ 0.9 million accrual for restructuring charges remained in “Accounts payable and accrued expenses,” which is expected to be paid in the first quarter of 2022.

The Company recognizes at fair value all contracts meeting the definition of a derivative as assets or liabilities in the consolidated balance sheets, with the exception of certain coal trading contracts for which the Company has elected to apply a normal purchases and normal sales exception.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company recognizes at fair value all contracts meeting the definition of a derivative as assets or liabilities in the consolidated balance sheets, with the exception of certain sales contracts for which the Company has elected to apply a normal purchases and normal sales exception.

With respect to derivatives used in hedging activities, the Company assesses at hedge inception whether such derivatives are highly effective at offsetting the changes in the anticipated exposure of the hedged item.

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Because of the volatile and cyclical nature of coal prices and demand, it is reasonably possible that coal prices may decrease and/or fail to improve in the near term, which, absent sufficient mitigation such as an offsetting reduction in the Company’s operating costs, may result in the need for future adjustments to the carrying value of the Company’s long-lived mining assets and mining-related investments.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets.

1 unchanged sentence

In those cases involving mine closures, the related assets are evaluated at the individual asset level for remaining economic life based on transferability to ongoing operating sites or for expected salvage.

For its development and exploration properties and portfolio of surface land and coal reserve holdings, the Company considers several factors to determine whether to evaluate those assets individually or on a grouped basis for purposes of impairment testing.

For its development and exploration properties and portfolio of surface land and coal reserve and resource holdings, the Company considers several factors to determine whether to evaluate those assets individually or on a grouped basis for purposes of impairment testing.

Such factors include geographic proximity to one another, the expectation of shared infrastructure upon development based on future mining plans and whether it would be most advantageous to bundle such assets in the event of sale to a third party.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

When indicators of impairment are present, the Company evaluates its long-lived assets for recoverability by comparing the estimated undiscounted cash flows expected to be generated by those assets under various assumptions to their carrying amounts.

If such undiscounted cash flows indicate that the carrying value of the asset group is not recoverable, impairment losses are measured by comparing the estimated fair value of the asset group to its carrying amount.

As quoted market prices are unavailable for the Company’s individual mining operations, fair value is determined through the use of an expected present value technique based on the income approach, except for non-strategic coal reserves, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning.

As quoted market prices are unavailable for the Company’s individual mining operations, fair value is determined through the use of an expected present value technique based on the income approach, except for non-strategic coal reserves, resources, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning.

In those cases, a market approach is utilized based on the most comparable market multiples available.

1 unchanged sentence

The Company believes its assumptions to be consistent with those a market participant would use for valuation purposes.

The most critical assumptions underlying the Company’s projections and fair value estimates include those surrounding future tons sold, coal prices for unpriced coal, production costs (including costs for labor, commodity supplies and contractors), transportation costs, foreign currency exchange rates and a risk-adjusted, cost of capital (all of which generally constitute unobservable Level 3 inputs under the fair value hierarchy), in addition to market multiples for non-strategic coal reserves, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning (which generally constitute Level 2 inputs under the fair value hierarchy).

The most critical assumptions underlying the Company’s projections and fair value estimates include those surrounding future tons sold, coal prices for unpriced coal, production costs (including costs for labor, commodity supplies and contractors), transportation costs, foreign currency exchange rates and a risk-adjusted, cost of capital (all of which generally constitute unobservable Level 3 inputs under the fair value hierarchy), in addition to market multiples for non-strategic coal reserves, resources, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning (which generally constitute Level 2 inputs under the fair value hierarchy).

Refer to Note 3.

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Gains and losses from foreign currency remeasurement related to tax balances are included as a component of “Income tax provision,” while all other remeasurement gains and losses are included in “Operating costs and expenses” in the consolidated statements of operations.

The total impact of foreign currency remeasurement on the consolidated statements of operations was a net loss of $ 4.0 million and $ 2.7 million for the years ended December 31, 2020 and 2019, respectively, and a net gain of $ 1.4 million for the year ended December 31, 2018.

The total impact of foreign currency remeasurement on the consolidated statements of operations was a net loss of $ 3.1 million, $ 4.0 million, and $ 2.7 million for the years ended December 31, 2021, 2020 and 2019, respectively,

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company owns a 50 % equity interest in Middlemount Coal Pty Ltd.

10 unchanged sentences

“Share-Based Compensation” for information related to share-based compensation.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Exploration and Drilling Costs

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Significant estimates inherent in the preparation of these consolidated financial statements include, but are not limited to, accounting for sales and cost recognition, postretirement benefit plans, environmental receivables and liabilities, asset retirement obligations, evaluation of long-lived assets for impairment, income taxes including deferred tax assets, fair value measurements and contingencies.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Revenue Recognition

12 unchanged sentences

Total metallurgical — 719.8 — — — 719.8

Other 1.5 2.2 ( 2.8 ) 32.1 ( 15.6 ) 17.4

1.5 7.9 0.5 9.2 ( 3.7 ) 15.4

Revenues $ 934.0 $ 727.7 $ 971.2 $ 689.1 $ ( 3.7 ) $ 3,318.3

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2020

8 unchanged sentences

Total metallurgical — 484.3 — — — 484.3

Other 1.4 3.1 19.8 23.9 80.5 128.7

1.5 2.2 ( 2.8 ) 32.1 ( 15.6 ) 17.4

Revenues $ 711.8 $ 486.5 $ 991.1 $ 707.3 $ ( 15.6 ) $ 2,881.1

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31, 2019

8 unchanged sentences

Total metallurgical — 1,030.0 — — — 1,030.0

Other 1.2 4.4 — 27.1 111.8 144.5

Revenues $ 1,099.2 $ 1,553.0 $ 1,424.8 $ 1,393.0 $ 111.8 $ 5,581.8

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue by initial contract duration was as follows:

Year Ended December 31, 2020

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

Thermal Mining Corporate and Other (1)

(Dollars in millions)

One year or longer $ 349.2 $ 371.0 $ 945.0 $ 671.4 $ — $ 2,336.6

Less than one year 361.1 113.3 48.9 3.8 — 527.1

1.4 3.1 19.8 23.9 80.5 128.7

Revenues $ 971.7 $ 1,033.1 $ 1,228.7 $ 1,309.4 $ 80.5 $ 4,623.4

Year Ended December 31, 2019

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

Thermal Mining Corporate and Other (1)

(Dollars in millions)

One year or longer $ 589.2 $ 828.6 $ 1,087.6 $ 1,254.2 $ — $ 3,759.6

Less than one year 381.1 201.4 121.3 31.3 — 735.1

1.4 3.1 19.8 23.9 80.5 128.7

Revenues $ 971.7 $ 1,033.1 $ 1,228.7 $ 1,309.4 $ 80.5 $ 4,623.4

Year Ended December 31, 2018

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

Thermal Mining Corporate and Other (1)

(Dollars in millions)

One year or longer $ 799.5 $ 1,036.7 $ 1,283.9 $ 1,307.2 $ — $ 4,427.3

Less than one year 298.5 511.9 140.9 58.7 — 1,010.0

1.2 4.4 — 27.1 111.8 144.5

Revenues $ 1,099.2 $ 1,553.0 $ 1,424.8 $ 1,393.0 $ 111.8 $ 5,581.8

(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 of $ 113.7 million and $ 34.5 million and a net gain of $ 50.6 million related to unrealized mark-to-market adjustments on derivatives related to forecasted sales and other financial trading activity during the years ended December 31, 2021, 2020 and 2019, respectively.

Refer to Note 7.

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

(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, for which contract duration is not meaningful.

“Derivatives and Fair Value Measurements” for additional information.

Also included in Corporate and Other revenue are revenues with customers of $ 139.5 million, $( 28.9 ) million and $( 17.6 ) million during the years ended December 31, 2021, 2020 and 2019, respectively.

The Company recorded revenue related to delivered coal to customers of approximately $ 3,442 million, $ 2,835 million and $ 4,477 million during the years ended December 31, 2021, 2020 and 2019, 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

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Accounts receivable, net $ 350.5 $ 244.8

None of the above receivables included allowances for credit losses at December 31, 2021 or 2020.

No charges for credit losses were recognized during the years ended December 31, 2021 and 2020.

Included in “Operating costs and expenses” in the consolidated statements of operations were reductions of previously recorded credit losses of $ 4.4 million for the year ended December 31, 2019.

(3) Asset Impairment

The Company recognized no asset impairment charges during the year ended December 31, 2021.

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Trade receivables, net included no allowance for credit losses as of both December 31, 2020 and 2019.

Miscellaneous receivables, net included no allowance for credit losses as of both December 31, 2020 and 2019.

No charges for credit losses were recognized during the year ended December 31, 2020.

Included in “Operating costs and expenses” in the consolidated statements of operations were reductions of previously recorded credit losses of $ 4.4 million and $ 0.2 million for the years ended December 31, 2019 and 2018, respectively.

(3) Asset Impairment

During the year ended December 31, 2020, the Company recognized impairment charges of $ 1,418.1 million related to its North Antelope Rochelle Mine of the Powder River Basin Mining segment.

2 unchanged sentences

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

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

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

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

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

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

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

During the year ended December 31, 2020, the Company also recognized impairment charges of $ 69.3 million related to certain unassigned coal reserves in the Midwest due to their low probability of development.

During the year ended December 31, 2020, the Company also recognized impairment charges of $ 69.3 million related to certain unassigned coal reserves and resources in the Midwest due to their low probability of development.

During the year ended December 31, 2019, the Company recognized impairment charges of $ 192.0 million related to the El Segundo/Lee Ranch and Wildcat Hills Underground Mines of the Other U.S.

1 unchanged sentence

The related impairment charges were based upon the remaining probability-weighted discounted cash flows of those mines.

The Company also recognized impairment charges of $ 69.2 million related to certain unassigned coal reserves in the Midwest and Colorado due to their low probability of development, and $ 9.0 million related to the fair value of an investment in equity securities during the year ended December 31, 2019.

No impairment charges were recognized during the year ended December 31, 2018.

In addition to the impairment charges described above, the Company also recorded provisions related to its North Goonyella Mine during the years ended December 31, 2019 and 2018, as further described in Note 20.

The Company also recognized impairment charges of $ 69.2 million related to certain unassigned coal reserves and resources in the Midwest and Colorado due to their low probability of development and $ 9.0 million related to the fair value of an investment in equity securities during the year ended December 31, 2019.

In addition to the impairment charges described above, the Company also recorded provisions related to its North Goonyella Mine during the year ended December 31, 2019, as further described in Note 19.

“Other Events.”

The Company also identified certain assets with an aggregate carrying value of approximately $ 1.2 billion at December 31, 2020 in its Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S.

The Company has identified certain assets with an aggregate carrying value of approximately $ 0.5 billion at December 31, 2021 in its 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 December 31, 2020 and determined that no further impairment charges were necessary as of that date.

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

(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).

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 19.

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

Summarized Results of Discontinued Operations

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(Dollars in millions)

(Loss) income from discontinued operations, net of income taxes $ ( 14.0 ) $ 3.2 $ 18.1

Income (loss) from discontinued operations, net of income taxes $ 24.0 $ ( 14.0 ) $ 3.2

There were no significant revenues from discontinued operations during the years ended December 31, 2021, 2020 and 2019.

10 unchanged sentences

A significant portion of the liabilities in the table above relate to Patriot.

In 2012, Patriot filed voluntary petitions for relief under the Bankruptcy Code.

In 2012, Patriot filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S.

Code (the Bankruptcy Code).

In 2013, the Company entered into a definitive settlement agreement (2013 Agreement) with Patriot and the United Mine Workers of America (UMWA), on behalf of itself, its represented Patriot employees and its represented Patriot retirees, to resolve all then-disputed issues related to Patriot’s bankruptcy.

16 unchanged sentences

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company was $ 87.2 million and $ 90.1 million at December 31, 2021 and 2020, respectively.

In connection with the actuarial valuation, the Company recorded a mark-to-market adjustment of $ 4.2 million to increase the liability during the year ended December 31, 2020 and adjustments of $ 18.3 million and $ 33.7 million to decrease the liability during the years ended December 31, 2019 and 2018, respectively.

In connection with the actuarial valuation, the Company recorded mark-to-market adjustments of $ 2.1 million to decrease the liability during the year ended December 31, 2021, $ 4.2 million to increase the liability during the year ended December 31, 2020 and $ 18.3 million to decrease the liability during the year ended December 31, 2019.

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.

Combined Benefit Fund (Combined Fund).

The Combined Fund was created by the Coal Act in 1992 as a multi-employer plan to provide health care benefits to a closed group of retirees who last worked prior to 1976, as well as orphaned beneficiaries of bankrupt companies who were receiving benefits as orphans prior to the passage of the Coal Act.

No new retirees will be added to this group, which includes retirees formerly employed by certain Patriot subsidiaries and their predecessors.

Former employers are required to contribute to the Combined Fund according to a formula.

Peabody Energy Corporation 2021 Form 10-K

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Under the terms of the Patriot spin-off, Patriot was primarily liable to the Combined Fund for the approximately $ 40 million of its subsidiaries’ obligations at that time.

Once Patriot ceased meeting its obligations, the Company was held responsible for these costs and, as a result, recorded “(Loss) income from discontinued operations, net of income taxes” charges of $ 0.5 million, $ 0.7 million and $ 0.7 million during the years ended December 31, 2020, 2019 and 2018, respectively.

In connection with the actuarial valuation, the Company recorded mark-to-market adjustments of $ 0.9 million and $ 2.4 million to decrease the liability during the years ended December 31, 2020 and 2018, respectively, and an adjustment of $ 0.1 million to increase the liability during the year ended December 31, 2019.

The Company made payments into the fund of $ 1.6 million, $ 1.9 million and $ 2.2 million during the years ended December 31, 2020, 2019 and 2018, respectively, and estimates that the annual cash cost to fund these potential Combined Fund liabilities will range between $ 1 million and $ 1.5 million in the near-term, with those premiums expected to decline over time because the fund is closed to new participants.

The liability related to the fund was $ 13.2 million and $ 15.2 million at December 31, 2020 and 2019, respectively.

UMWA 1974 Pension Plan (UMWA Plan) Litigation.

On July 16, 2015, a lawsuit was filed by the UMWA Plan, the UMWA 1974 Pension Trust (Trust) and the Trustees of the UMWA Plan and Trust (Trustees) in the United States District Court for the District of Columbia, against the Company, Peabody Holding Company, LLC, a subsidiary of the Company, and Arch Resources, Inc.

(Arch), known as Arch Coal, Inc.

prior to May 15, 2020.

The plaintiffs sought, pursuant to the Employee Retirement Income Security Act of 1974, as amended (ERISA), and the Multiemployer Pension Plan Amendments Act of 1980, a declaratory judgment that the defendants were obligated to arbitrate any opposition to the Trustees’ determination that the defendants had statutory withdrawal liability as a result of the 2015 Patriot bankruptcy.

After a legal and arbitration process and with the approval of the Bankruptcy Court, on January 25, 2017, the UMWA Plan and the Company agreed to a settlement of the claim which entitled the UMWA Plan to $ 75 million to be paid by the Company in increments through 2021.

The balance of the liability, on a discounted basis, was $ 13.9 million and $ 26.0 million at December 31, 2020 and 2019, respectively.

(5) Inventories

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Materials and supplies inventories presented above have been shown net of reserves of $ 9.0 million and $ 10.4 million as of December 31, 2021 and 2020, respectively.

The coal inventories presented above include net realizable value adjustments of $ 7.6 million and $ 8.3 million as of December 31, 2020 and 2019, respectively.

(6) Equity Method Investments

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The Company’s equity method investments include its joint venture interest in Middlemount and certain other equity method investments.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below summarizes the book value of those investments and related financing receivables, which are reported in “Investments and other assets” in the consolidated balance sheets, and the related “Loss (income) from equity affiliates”:

Book Value at Loss (Income) from Equity Affiliates

Book Value at (Income) Loss from Equity Affiliates

December 31, Year Ended December 31,

6 unchanged sentences

$ 62.2 $ 24.6 $ ( 82.1 ) $ 60.1 $ ( 3.4 )

The Company received cash payments from Middlemount of $ 14.7 million and $ 106.7 million during the years ended December 31, 2019 and 2018, respectively, related to financing receivables.

The Company received cash payments from Middlemount of $ 43.5 million and $ 14.7 million during the years ended December 31, 2021 and 2019, respectively.

No payments were received from Middlemount during the year ended December 31, 2020.

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

At December 31, 2020, the revolving loan limit was $ 160 million Australian dollars, and Middlemount had not fully drawn upon the Revolving Loans.

The Revolving Loans bear interest at 10 % per annum and expire on December 31, 2023.

The carrying value of the portion of the Revolving Loans due to the Company’s Australian subsidiary, which is included in the total investment balance, was $ 46.2 million and $ 17.5 million as of December 31, 2020 and 2019, respectively, with the increase during the year ended December 31, 2020 attributable to the Company’s share of additional funding.

At December 31, 2021, the revolving loan limit was $ 50 million Australian dollars, and Middlemount had not drawn upon the Revolving Loans.

The value of the portion of the Revolving Loans due to the Company’s Australian subsidiary, which is included in the total investment balance, was $ 46.2 million as of December 31, 2020, with the decrease during the year ended December 31, 2021 primarily attributable to payments made by Middlemount.

As of both December 31, 2021 and 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 equity.

During the year ended December 31, 2018, the Company determined that a valuation allowance on Middlemount’s net deferred tax position was no longer necessary based on recent cumulative earnings and expectation of future earnings.

The determination resulted in approximately $ 9 million of income which was more than offset by a tax reserve of approximately $ 17 million due to an uncertain tax position relating to an ongoing income tax audit of Middlemount.

During the year ended December 31, 2019, Middlemount received notification that the Australian Taxation Office would no longer pursue its position, and the related tax reserve was released.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the year ended December 31, 2019, Middlemount received notification that the Australian Taxation Office would no longer pursue an uncertain tax position related to an earlier income tax audit.

The related tax reserve was released, resulting in approximately $ 17 million of income.

During the year ended December 31, 2020, the Company established a valuation allowance on Middlemount’s net deferred tax position of approximately $ 33 million primarily based upon recent cumulative losses.

During the year ended December 31, 2021, the Company determined that the valuation allowance was no longer necessary based on recent cumulative earnings and expectation of future earnings.

The determination resulted in approximately $ 33 million of income related to the release of the previously established valuation allowance.

During the year ended December 31, 2021, Middlemount entered into an insurance claim settlement agreement attributable to a business interruption and property damage claim from 2019, which resulted in $ 12.5 million of income for the Company (on a 50 % basis).

During the years ended December 31, 2021, 2020 and 2019, respectively, Middlemount generated revenues of approximately $ 265 million, $ 123 million and $ 160 million (on a 50 % basis).

1 unchanged sentence

(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.

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 December 31, 2021.

Foreign Currency Option Contracts

As of December 31, 2021, the Company had currency options outstanding with an aggregate notional amount of $ 535.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending September 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 $ 0.76 to $ 0.80 over the nine-month period ending September 30, 2022.

Derivative Contracts Related to Forecasted Sales

As of December 31, 2021, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 2.5 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 0.4 million tonnes aggregate notional volume related to other coal financial contracts will settle in 2022.

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

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2020, the Company had currency options outstanding with an aggregate notional amount of $ 575.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the first nine months of 2021.

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 $ 0.75 to $ 0.81 over the first nine months of 2021.

As of December 31, 2020, the Company held coal-related financial contracts related to a portion of its forecasted sales for an aggregate notional volume of 0.8 million tonnes.

Such financial contracts include futures, forwards and options.

All 0.8 million tonnes will settle in 2021.

The Company had no diesel fuel or interest rate derivatives in place as of December 31, 2020.

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.

Coal brokering is conducted both as principal and agent in support of various coal production-related activities that may involve coal produced from the Company’s mines, coal sourcing arrangements with third-party mining companies or offtake agreements with other coal producers.

The Company also provides transportation-related services, which involve both financial derivative contracts and physical contracts.

Collectively, coal and freight-related hedging activities include both economic hedging and, from time to time, cash flow hedging in support of the Company’s coal trading strategy.

Revenues from such transactions include realized and unrealized gains and losses on derivative instruments, including those that arise from coal deliveries related to contracts accounted for on an accrual basis under the normal purchases and normal sales exception.

Offsetting and Balance Sheet Presentation

During the year ended December 31, 2021, the Company recorded an unrealized mark-to-market loss of $ 115.1 million on these coal derivative contracts, which includes approximately $ 86 million of unrealized mark-to-market losses on financial derivatives and approximately $ 29 million on physical forward sales contracts.

During the year ended December 31, 2020, the Company recorded an unrealized mark-to-market loss of $ 29.6 million, which included approximately $ 28 million of unrealized mark-to-market losses on financial derivatives and approximately $ 1 million on physical forward sales contracts.

During the year ended December 31, 2019, the Company recorded an unrealized mark-to-market gain of $ 42.2 million, which included approximately $ 42 million of unrealized mark-to-market gains on financial derivatives.

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 December 31, 2021.

Tabular Derivatives Disclosures

The Company has master netting agreements with certain of its counterparties which allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination.

1 unchanged sentence

For classification purposes, the Company records the net fair value of all the positions with a given counterparty as a net asset or liability in the consolidated balance sheets.

The Company’s coal trading assets and liabilities include financial instruments cleared through various exchanges, which involve the daily net settlement of open positions.

The Company must post cash collateral in the form of initial margin, in addition to variation margin, on exchange-cleared positions that are in a net liability position and receives variation margin when in a net asset position.

The Company also transacts in coal trading financial swaps and options through over-the-counter (OTC) markets with financial institutions and other non-financial trading entities under International Swaps and Derivatives Association (ISDA) Master Agreements, which contain symmetrical default provisions.

Certain of the Company’s coal trading agreements with OTC counterparties also contain credit support provisions that may periodically require the Company to post, or entitle the Company to receive, variation margin.

Physical coal and freight-related purchase and sale contracts included in the Company’s coal trading assets and liabilities are executed pursuant to master purchase and sale agreements that also contain symmetrical default provisions and allow for the netting and setoff of receivables and payables that arise during the same time period.

The Company offsets its coal trading asset and liability derivative positions, and variation margin related to those positions, on a counterparty-by-counterparty basis in the consolidated balance sheets.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

3 unchanged sentences

Foreign currency option contracts $ 1.4 $ — $ 10.3 $ —

Coal contracts related to forecasted sales 0.9 ( 8.8 ) 20.1 ( 0.1 )

Coal trading contracts 23.4 ( 23.1 ) 81.1 ( 74.2 )

Derivative contracts related to forecasted sales 59.5 ( 184.2 ) 16.7 ( 24.7 )

Financial trading contracts 3.4 — 0.4 —

Total derivatives 64.3 ( 184.2 ) 27.4 ( 24.7 )

Effect of counterparty netting ( 59.5 ) 59.5 ( 16.2 ) 16.2

Variation margin posted (held) 6.5 — ( 22.1 ) —

Net derivatives and margin as classified in the balance sheets $ 10.9 $ ( 1.7 ) $ 5.9 $ —

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 consolidated balance sheets.

Effects of Derivatives on Measures of Financial Performance

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

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

Variation margin (received) posted ( 3.4 ) 95.2 ( 0.3 ) 6.8

Net derivatives and variation margin as classified in the balance sheets $ 1.4 $ ( 29.5 ) $ 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 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 December 31, 2021, the Company had posted $ 130.1 million aggregate margin cash, consisting of $ 91.8 million variation margin cash and $ 38.3 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, is included in “Other current assets” and the net amount of liability derivatives, net of variation margin, is included in “Accounts payable and accrued expenses” in the accompanying 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 consolidated balance sheets.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 consolidated statements of operations.

Year Ended December 31, 2021

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

Financial Instrument

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

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts

$ 12.9 $ 5.8 $ 7.1

Coal contracts related to forecasted sales

( 23.8 ) 5.8 ( 29.6 )

Coal trading contracts

( 0.7 ) 4.2 ( 4.9 )

Operating costs and expenses $ ( 5.7 ) $ 1.8 $ ( 7.5 )

Derivative contracts related to forecasted sales Revenues ( 160.7 ) ( 45.6 ) ( 115.1 )

Financial trading contracts Revenues 6.1 4.6 1.5

Total $ ( 160.3 ) $ ( 39.2 ) $ ( 121.1 )

Year Ended December 31, 2020 (1)

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

Financial Instrument

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

$ ( 3.7 ) $ ( 4.9 ) $ 1.2

Coal contracts related to forecasted sales

67.6 25.4 42.2

Coal trading contracts

( 0.3 ) ( 8.7 ) 8.4

Operating costs and expenses $ 12.9 $ 5.8 $ 7.1

Derivative contracts related to forecasted sales Revenues 4.7 34.3 ( 29.6 )

Financial trading contracts Revenues ( 0.7 ) 4.2 ( 4.9 )

Total $ 16.9 $ 44.3 $ ( 27.4 )

Year Ended December 31, 2019 (1)

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

Financial Instrument

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

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts

$ ( 9.1 ) $ ( 8.4 ) $ ( 0.7 )

Coal contracts related to forecasted sales

115.7 97.4 18.3

Coal trading contracts

( 2.9 ) ( 5.3 ) 2.4

Operating costs and expenses $ ( 3.7 ) $ ( 4.9 ) $ 1.2

Derivative contracts related to forecasted sales Revenues 86.6 44.4 42.2

Financial trading contracts Revenues ( 0.3 ) ( 8.7 ) 8.4

Total $ 82.6 $ 30.8 $ 51.8

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the years ended December 31, 2020, 2019 and 2018, 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 consolidated statements of operations.

(1) ‘Results realized in income on derivatives’ have been revised to exclude revenues arising from coal deliveries earned by the Company’s trading and brokerage function of ($ 28.5 ) million and ($ 18.8 ) million for the years ended December 31, 2020 and 2019, 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 consolidated statements of cash flows.

5 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:

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

December 31, 2021

2 unchanged sentences

Foreign currency option contracts $ — $ 1.4 $ — $ 1.4

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

Coal trading contracts — 6.8 — 6.8

Derivative contracts related to forecasted sales — ( 124.7 ) — ( 124.7 )

Financial trading contracts — 3.4 — 3.4

Equity securities — — 4.0 4.0

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

Total net (liabilities) assets $ — $ ( 119.9 ) $ 4.0 $ ( 115.9 )

December 31, 2020 (1)

2 unchanged sentences

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

Coal contracts related to forecasted sales — 21.2 — 21.2

Coal trading contracts — ( 16.4 ) — ( 16.4 )

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 $ — $ 5.9 $ 4.0 $ 9.9

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 $ 91.8 million as of December 31, 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.

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Below is a summary of the Company’s valuation techniques for Level 1 and 2 financial assets and liabilities:

• Foreign currency option contracts:

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:

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:

based on observed prices in an inactive market (Level 3).

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• 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.

• 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 December 31, 2021 and 2020:

• Cash and cash equivalents, 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.

• 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).

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

6 unchanged sentences

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

The fair value of the Company’s coal derivative assets and liabilities reflects adjustments for credit risk.

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

Generally, the Company’s Level 3 instruments or contracts are valued using bid/ask price quotations and other market assessments obtained from multiple, independent third-party brokers or other transactional data incorporated into internally-generated discounted cash flow models.

15 unchanged sentences

Purchases — — 3.0

Settlements — — 1.7

End of period $ 4.0 $ 4.0 $ 4.0

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Credit and Nonperformance Risk.

The fair value of the Company’s coal derivative assets and liabilities reflects adjustments for credit risk.

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

The Company’s policy is to independently evaluate each customer’s creditworthiness prior to entering into transactions and to regularly monitor the credit extended.

If the Company engages in a transaction with a counterparty that does not meet its credit standards, the Company seeks to protect its position by requiring the counterparty to provide an appropriate credit enhancement.

Also, when appropriate (as determined by its credit management function), the Company has taken steps to reduce its exposure to customers or counterparties whose credit has deteriorated and who may pose a higher risk of failure to perform under their contractual obligations.

These steps include obtaining letters of credit or cash collateral (margin), requiring prepayments for shipments or the creation of customer trust accounts held for the Company’s benefit to serve as collateral in the event of a failure to pay or perform.

To reduce its credit exposure related to trading and brokerage activities, the Company seeks to enter into netting agreements with counterparties that permit the Company to offset asset and liability positions with such counterparties and, to the extent required, the Company will post or receive margin amounts associated with exchange-cleared and certain OTC positions.

The Company also continually monitors counterparty and contract non-performance risk, if present, on a case-by-case basis.

Performance Assurances and Collateral

The Company is required by the exchanges upon which it transacts to post collateral, known as initial margin, which represents an estimate of potential future adverse price movements across the Company’s portfolio under normal market conditions.

The Company posted initial margin of $ 3.0 million and $ 7.9 million as of December 31, 2020 and 2019, respectively, which is reflected in “Other current assets” in the consolidated balance sheets.

As of December 31, 2020 and 2019, respectively, the Company had posted $ 0.9 million and $ 1.3 million in excess of initial margin requirements.

The Company is required to post variation margin on positions that are in a net liability position and is entitled to receive and hold variation margin on positions that are in a net asset position with an exchange and certain of its OTC derivative contract counterparties.

As of December 31, 2020 the Company had posted $ 6.5 million of variation margin, while it was in receipt of $ 22.1 million in variation margin at December 31, 2019.

Certain of the Company’s derivative trading instruments require the parties to provide additional performance assurances whenever a material adverse event jeopardizes one party’s ability to perform under the instrument.

If the Company was to sustain a material adverse event (using commercially reasonable standards), its counterparties could request collateralization on derivative trading instruments in which the Company holds a net liability position.

Based on the aggregate fair values of such net liability positions at December 31, 2020 and 2019, the Company would have been required to post additional collateral of approximately $ 1.6 million and less than $ 0.1 million, respectively.

As of December 31, 2020 and 2019, the Company was not required to post collateral to counterparties for such positions.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(8) Intangible Contract Assets and Liabilities

The Company has recorded intangible assets and liabilities to reflect the fair value of certain U.S.

coal supply agreements as a result of differences between contract terms and estimated market terms for the same coal products, and also recorded intangible liabilities related to unutilized capacity under its port and rail take-or-pay contracts.

The balances, net of accumulated amortization, and respective balance sheet classifications at December 31, 2020 and 2019, are set forth in the following tables:

December 31, 2020

Assets Liabilities Net Total

(Dollars in millions)

Coal supply agreements $ 7.9 $ ( 17.3 ) $ ( 9.4 )

Take-or-pay contracts — ( 34.7 ) ( 34.7 )

Total $ 7.9 $ ( 52.0 ) $ ( 44.1 )

Balance sheet classification:

Investments and other assets $ 7.9 $ — $ 7.9

Accounts payable and accrued expenses — ( 4.4 ) ( 4.4 )

Other noncurrent liabilities — ( 47.6 ) ( 47.6 )

Total $ 7.9 $ ( 52.0 ) $ ( 44.1 )

December 31, 2019

Assets Liabilities Net Total

(Dollars in millions)

Coal supply agreements $ 20.7 $ ( 21.4 ) $ ( 0.7 )

Take-or-pay contracts — ( 40.0 ) ( 40.0 )

Total $ 20.7 $ ( 61.4 ) $ ( 40.7 )

Balance sheet classification:

Investments and other assets $ 20.7 $ — $ 20.7

Accounts payable and accrued expenses — ( 8.4 ) ( 8.4 )

Other noncurrent liabilities — ( 53.0 ) ( 53.0 )

Total $ 20.7 $ ( 61.4 ) $ ( 40.7 )

Amortization of the intangible assets and liabilities related to coal supply agreements occurs ratably based upon coal volumes shipped per contract and is recorded as a component of “Depreciation, depletion and amortization” in the accompanying consolidated statements of operations.

Such amortization amounted to $ 4.2 million, $ 23.2 million and $ 93.0 million during the years ended December 31, 2020, 2019 and 2018, respectively.

During the year ended December 31, 2020, the Company also charged to expense intangible assets of $ 4.5 million related to a coal supply agreement deemed to have been impaired, as further described in Note 3.

“Asset Impairment.” The Company anticipates net amortization of sales contracts, based upon expected shipments, to be a credit of less than $ 1 million for the year 2021, credits of approximately $ 2 million per year for the years 2022 through 2024, and a credit of $ 3 million for the year 2025.

Future unutilized capacity and the amortization periods related to the take-or-pay contract intangible liabilities are based upon estimates of forecasted usage.

Such amortization, which is classified as a reduction to “Operating costs and expenses” in the accompanying consolidated statements of operations, amounted to $ 8.2 million, $ 16.6 million and $ 26.6 million during the years ended December 31, 2020, 2019 and 2018, respectively.

The Company anticipates net amortization of take-or-pay contract intangible liabilities for the years 2021 through 2025 to be approximately $ 4 million, $ 3 million, $ 3 million, $ 4 million and $ 1 million, respectively, and $ 20 million in total thereafter.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(8) Property, Plant, Equipment and Mine Development

6 unchanged sentences

Property, plant, equipment and mine development, net $ 2,950.6 $ 3,051.1

Land and coal interests included coal reserves with a net book value of $ 1.5 billion as of December 31, 2020 and $ 2.8 billion as of December 31, 2019.

Such coal reserves were comprised of mineral rights for leased coal interests and advance royalties that had a net book value of $ 0.8 billion and $ 2.0 billion as of December 31, 2020 and 2019, respectively, and coal reserves held by fee ownership of $ 0.7 billion and $ 0.8 billion at December 31, 2020 and 2019, respectively.

The amount of coal reserves unassigned to active mining operations, and thus not subject to current depletion, including certain exploratory properties, was $ 0.1 billion as of both December 31, 2020 and 2019.

Land and coal interests included coal reserves and resources with a net book value of $ 1.4 billion as of December 31, 2021 and $ 1.5 billion as of December 31, 2020.

Such coal reserves and resources were comprised of mineral rights for leased coal interests and advance royalties that had a net book value of $ 0.8 billion as of both December 31, 2021 and 2020, and coal reserves and resources held by fee ownership of $ 0.6 billion and $ 0.7 billion at December 31, 2021 and 2020, respectively.

The amount of coal reserves and resources unassigned to active mining operations, and thus not subject to current depletion, including certain exploratory properties, was $ 0.1 billion as of both December 31, 2021 and 2020.

(9) Income Taxes

(Loss) income from continuing operations before income taxes for the periods presented below consisted of the following:

Income (loss) from continuing operations before income taxes for the periods presented below consisted of the following:

Year Ended December 31,

13 unchanged sentences

federal — 23.4 20.3

( 7.5 ) 4.4 19.3

State — — ( 0.2 )

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a reconciliation of the expected statutory federal income tax (benefit) expense to the Company’s income tax provision for the periods presented below:

The following is a reconciliation of the expected statutory federal income tax expense (benefit) to the Company’s income tax provision for the periods presented below:

Year Ended December 31,

1 unchanged sentence

(Dollars in millions)

Expected income tax (benefit) expense at U.S.

Expected income tax expense (benefit) at U.S.

federal statutory rate $ 77.7 $ ( 388.9 ) $ ( 29.9 )

Changes in valuation allowance, income tax ( 101.3 ) 410.1 ( 32.0 )

Remeasurement due to the Tax Cuts and Jobs Act — — 9.5

Changes in tax reserves 1.9 ( 7.7 ) 3.0

3 unchanged sentences

Global intangible low-taxed income 67.0 — 6.1

Tax credits ( 26.5 ) — —

Remeasurement of foreign income tax accounts ( 1.8 ) 2.9 ( 0.1 )

3 unchanged sentences

Certain reconciliation items included in the above table exclude the remeasurement of foreign income tax accounts as these foreign currency effects are separately presented.

On December 22, 2017, the Tax Cuts and Jobs Act (the Act) was signed into law making significant changes to the U.S.

Internal Revenue Code.

Key provisions of the Act that impacted the Company include:

(i) repeal of the corporate alternative minimum tax (AMT) system, (ii) reduction of the U.S.

federal corporate tax rate from 35% to 21% and (iii) the new global intangible low-taxed income (GILTI).

Deferred tax assets and liabilities attributable to the U.S.

were remeasured from 35% to the reduced tax rate of 21%.

Upon completion of the filing of both U.S.

and foreign tax returns for the 2017 tax year, the Company recorded an additional provision of $ 9.5 million related to the remeasurement and an offsetting valuation allowance during the year ended December 31, 2018.

The Company elected to recognize the tax on GILTI as a period expense in the period the tax is incurred and due to foreign tested losses, the Company did no t record a provision for the year ended December 31, 2020.

The Company recorded a provision of $ 6.1 million and $ 68.2 million for the years ended December 31, 2019 and 2018, which was fully offset by the release of valuation allowance associated with the net operating losses (NOLs) that absorbed the GILTI inclusion.

Due to the repeal of the corporate AMT system, the Company’s existing AMT credits as of December 31, 2017 were anticipated to be refunded through the 2021 federal tax return.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act was signed into law and contains numerous tax provisions including the acceleration of refunds of previously generated AMT credits.

In 2020, the Company received AMT credit refunds of $ 46.9 million and is expecting an additional refund of $ 1.2 million in 2021.

The Company recognizes the tax on global intangible low-taxed income (GILTI) as a period expense and recorded a provision of $ 67.0 million and $ 6.1 million for the years ended December 31, 2021 and 2019, respectively, which was fully offset by the release of valuation allowance associated with the net operating losses (NOLs) that absorbed the GILTI inclusion.

The Company did not record a provision for the year ended December 31, 2020 due to tested foreign losses.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act was signed into law and contained numerous tax provisions including the acceleration of refunds of previously generated alternative minimum tax (AMT) credits.

During the years ended December 31, 2021 and 2020, the Company received AMT credit refunds of $ 1.2 million and $ 46.9 million, respectively.

The Company does not expect any further AMT refunds.

The Taxpayer Certainty and Disaster Relief Act of 2020 and the American Rescue Plan Act were enacted on December 27, 2020 and March 1, 2021, respectively.

These acts did not have a material impact on the Company’s tax provision for 2021 or 2020.

Peabody Energy Corporation 2021 Form 10-K

10 unchanged sentences

Take-or-pay obligations 9.5 11.0

Hedge activities 36.8 2.4

Interest limitation 7.9 —

Investments and other assets 81.8 88.0

8 unchanged sentences

Operating lease right-of-use assets 9.4 13.5

Coal supply agreements 3.1 3.1

Investments and other assets 7.6 4.7

7 unchanged sentences

federal NOLs of $ 2.6 billion.

During 2020 the Company reduced its gross Australia NOLs by $ 1.3 billion in Australian dollars due to a cancellation of intercompany debt in accordance with Australia tax law.

The Company’s tax loss carryforwards and credits of $ 1.3 billion as of December 31, 2021 were comprised primarily of net Australia NOLs and capital tax loss carryforwards of $ 491.6 million, net federal NOLs of $ 534.2 million, state NOLs of $ 85.2 million, tax general business credits (GBCs) of $ 139.1 million and other foreign NOLs of $ 15.8 million.

16 unchanged sentences

Gross unrecognized tax benefits $ 11.0 $ 9.1

The amount of the Company’s gross unrecognized tax benefits decreased by $ 7.4 million since December 31, 2019 due primarily to adjustments for effectively settled positions, partially offset by additions for current positions.

The amount of the Company’s gross unrecognized tax benefits increased by $ 1.9 million since December 31, 2020 due primarily to additions for current positions partially offset by adjustments for effectively settled positions.

The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $ 11.0 million and $ 9.1 million at December 31, 2021 and 2020, respectively.

6 unchanged sentences

(Reductions) additions for prior year tax positions ( 1.1 ) ( 9.3 ) 0.3

Reductions for settlements with tax authorities — — ( 0.5 )

Balance at end of period $ 11.0 $ 9.1 $ 16.5

The Company recognizes interest and penalties related to unrecognized tax benefits in its income tax provision.

The Company recorded $ 0.4 million of gross interest and penalties for both of the years ended December 31, 2019 and 2018, and reversed gross interest and penalties of $ 0.4 million for the year ended December 31, 2020.

The Company had $ 5.4 million and $ 5.8 million of accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2020 and 2019, respectively.

The Company expects a decrease of $ 2.2 million in its net unrecognized tax benefits during the next twelve months is reasonably possible.

The Company recorded $ 0.2 million and $ 0.4 million of gross interest and penalties for the years ended December 31, 2021 and 2019, respectively, and reversed gross interest and penalties of $ 0.4 million for the year ended December 31, 2020.

The Company had $ 5.7 million, $ 5.4 million and $ 5.8 million of accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2021, 2020 and 2019, respectively.

The Company does not expect a significant change in its net unrecognized tax benefits during the next twelve months.

Tax Returns Subject to Examination

The Company’s federal income tax returns for the 2018 through 2019 tax years are subject to potential examinations by the Internal Revenue Service.

The Company’s federal income tax returns for the 2019 and 2020 tax years are subject to potential examinations by the Internal Revenue Service.

The Company’s state income tax returns for the tax years 2014 and thereafter remain potentially subject to examination by various state taxing authorities due to NOL carryforwards.

1 unchanged sentence

Foreign Earnings

As of December 31, 2020, the Company has a consolidated earnings deficit outside the U.S.

but with some immaterial unremitted earnings in certain jurisdictions.

The Company continues to be permanently reinvested with respect to its historical earnings.

As of December 31, 2021, the Company has unremitted earnings relating to certain wholly owned subsidiaries that are not permanently reinvested due to terms of certain debt agreements.

There is no residual cash taxes on the unremitted earnings due to the existence of NOLs.

The Company has an earnings deficit for remaining investments outside the U.S.

and continues to be permanently reinvested with respect to its historical earnings.

However, when appropriate, the Company has the ability to access foreign cash without incurring residual cash taxes due to the existence of NOLs.

3 unchanged sentences

Tax Payments and Refunds

The following table summarizes the Company’s income tax refunds, net for the periods presented below:

The following table summarizes the Company’s income tax payments (refunds), net for the periods presented below:

Year Ended December 31,

4 unchanged sentences

12.9 3.1 36.3

Total income tax refunds, net $ ( 39.9 ) $ ( 9.1 ) $ ( 64.0 )

Total income tax payments (refunds), net $ 11.6 $ ( 39.9 ) $ ( 9.1 )

(10) Accounts Payable and Accrued Expenses

1 unchanged sentence

(Dollars in millions)

Accrued payroll and related benefits $ 163.9 $ 186.2

Trade accounts payable $ 201.7 $ 146.3

Accrued payroll and related benefits 170.5 163.9

Other accrued expenses 161.3 120.6

3 unchanged sentences

Liabilities associated with discontinued operations 45.0 62.3

Liabilities from coal trading activities 29.5 1.7

Income taxes payable 20.2 2.3

Accrued insurance 17.8 15.7

Operating lease liabilities 16.4 24.5

Accrued health care insurance 15.7 15.8

Accrued interest 15.5 15.0

Workers’ compensation obligations 8.5 9.0

Intangible take-or-pay contracts 4.4 8.4

Income taxes payable 2.3 2.6

Liabilities from coal trading activities 1.7 —

Accrued interest 6.0 15.5

Accounts payable and accrued expenses $ 872.1 $ 745.7

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(11) Long-term Debt

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

Debt Instrument (defined below, as applicable) 2021 2020

(Dollars in millions)

6.000 % Senior Secured Notes due March 2022

6.000 % Senior Secured Notes due March 2022 (2022 Notes)

$ 23.1 $ 459.0

6.375 % Senior Secured Notes due March 2025

Senior Secured Term Loan due 2025, net of original issue discount 388.2 392.1

8.500 % Senior Secured Notes due December 2024 (2024 Peabody Notes)

10.000 % Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)

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

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

Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan) 322.8 388.2

Revolving credit facility — 216.0

4 unchanged sentences

Long-term debt $ 1,078.2 $ 1,502.9

Refinancing Transactions

On January 29, 2021 (the Settlement Date), the Company completed a series of transactions (collectively, the Refinancing Transactions) to, among other things, provide the Company with maturity extensions and covenant relief, while allowing it to maintain near-term operating liquidity and financial flexibility.

The Refinancing Transactions included a senior notes exchange and related consent solicitation, a revolving credit facility exchange and various amendments to the Company’s existing debt agreements, as summarized below.

As further discussed in Note 22.

“Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees,” upon completion of the Refinancing Transactions, the surety transaction support agreement (Surety Agreement) entered into with the Company’s surety bond providers in November 2020 became effective.

On the Settlement Date, the Company settled an exchange offer (Exchange Offer) pursuant to which $ 398.7 million aggregate principal amount of the Company’s 6.000 % Senior Secured Notes due March 2022 (the 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 December 2024 (2024 Co-Issuer Notes) issued by certain wholly-owned subsidiaries of the Company (the Co-Issuers), (b) $ 195.1 million aggregate principal amount of new 8.500 % Senior Secured Notes due December 2024 issued by the Company (2024 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.

The Company’s Wilpinjong Mine in Australia is owned and operated by a subsidiary of the Co-Issuers.

The Exchange Offer was accounted for as a debt modification based upon the relative similarity of the present value of the future cash flows of the instruments.

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 consolidated statements of operations during the year ended December 31, 2021.

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

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

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Refinancing Transactions

As previously described in Note 1.

“Summary of Significant Accounting Policies,” the Company completed the Exchange Offer and Revolver Transactions on January 29, 2021.

Pursuant to the Exchange Offer, $ 398.7 million aggregate principal amount of the 2022 Notes were exchanged for aggregate consideration consisting of $ 193.9 million aggregate principal amount of New Co-Issuer Notes, $ 195.1 million aggregate principal amount of New Peabody Notes, and a cash payment of approximately $ 9.4 million.

In connection with the Revolver Transactions, the Company paid down $ 10.0 million of its existing revolving loans and exchanged the remaining balance for $ 206.0 million of New Co-Issuer Term Loans.

6.000 % and 6.375 % Senior Secured Notes

Upon emergence from the Chapter 11 Cases, the Company entered into the Existing Indenture with Wilmington Trust, National Association, as trustee, relating to its issuance of $ 500.0 million aggregate principal amount of the 2022 Notes and $ 500.0 million aggregate principal amount of 6.375 % senior secured notes due 2025 (the 2025 Notes and, together with the 2022 Notes, the Senior Notes).

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

The Senior Notes were issued at par value.

The Company paid aggregate debt issuance costs of $ 49.5 million related to the offering, which are being amortized over the respective terms of the Senior Notes.

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

During the years ended December 31, 2020, 2019 and 2018, the Company recorded interest expense of $ 72.2 million, $ 72.0 million and $ 71.9 million, respectively, related to the Senior Notes.

On August 9, 2018, the Company executed an amendment to the Existing Indenture following the solicitation of consents from the requisite majorities of holders of each series of Senior Notes.

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

The Company paid consent fees to Senior Note holders which amounted to $ 19.8 million.

Such consent fees were capitalized as additional debt issuance costs to be amortized over the respective terms of the Senior Notes.

During the fourth quarter of 2019, the Company made open-market purchases of $ 41.0 million of the 2022 Notes for $ 39.9 million, plus accrued interest.

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

2024 Co-Issuer Notes

The terms of the 2024 Co-Issuer Notes are governed by an indenture, as amended and restated as of February 3, 2021, by and among the Co-Issuers, Wilmington Trust, National Association, as trustee, and, on a limited basis, the Company (2024 Co-Issuer Notes Indenture).

The 2024 Co-Issuer Notes mature on December 31, 2024 and bear interest at an annual rate of 10.000 %.

The Company paid aggregate debt issuance costs of $ 5.6 million, which are being amortized over the terms of the notes.

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

During the year ended December 31, 2021, the Company recorded interest expense of $ 19.6 million related to the 2024 Co-Issuer Notes.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are subject to mandatory prepayment offers at the end of each six-month period, beginning with June 30, 2021, whereby the Excess Cash Flow (as defined in the 2024 Co-Issuer Notes Indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of the 2024 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.

Such prepayments may be accepted or declined at the option of the debt holders.

Based upon the Wilpinjong Mine’s results for the six-month period ended December 31, 2021, a total offer to prepay $105.6 million of principal was made on a pro rata basis in February 2022, including $51.2 million of the Co-Issuer Notes and $54.4 million of the Co-Issuer Term Loan.

The offer for the Co-Issuer Notes expires March 14, 2022.

The Company expects to prepay $17.2 million of principal under the now-expired Co-Issuer Term Loan offer, which is reflected within the current portion of long-term debt in the accompanying consolidated balance sheet as of December 31, 2021.

There was no prepayment offer made with respect to the six-month period ended June 30, 2021.

The 2024 Co-Issuer Notes Indenture contains customary covenants that, among other things, limit the Co-Issuers’ and their subsidiaries’ ability to incur additional Indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from subsidiaries, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets, and place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Co-Issuers.

The 2024 Co-Issuer Notes are not guaranteed by any of the Co-Issuers’ subsidiaries and thus are structurally subordinated to any existing or future Indebtedness or other liabilities, including trade payables, of any such subsidiaries.

The 2024 Co-Issuer Notes initially are secured by liens on substantially all of the assets of the Co-Issuers, including by (i) 100 % of the capital stock of PIC Acquisition Corp.

owned by PIC AU Holdings LLC and (ii) all other property subject or purported to be subject, from time to time, to a lien under the Co-Issuers’ collateral trust agreement (collectively, the Wilpinjong Collateral).

The Co-Issuers may redeem some or all of the 2024 Co-Issuer Notes at the redemption prices and on the terms specified in the 2024 Co-Issuer Notes Indenture.

The 2024 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 2024 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.

In addition, the holders of the 2024 Co-Issuer Notes have the right, under certain circumstances specified in the 2024 Co-Issuer Notes Indenture, to exchange their 2024 Co-Issuer Notes for 2024 Peabody Notes.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Co-Issuer Term Loans due 2024

The Co-Issuer Term Loans mature on December 31, 2024 and bear interest at a rate of 10.000 % per annum.

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

During the year ended December 31, 2021, the Company recorded interest expense of $ 20.5 million related to the Co-Issuer Term Loans.

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

The Co-Issuer Term Loan Agreement is guaranteed and secured to the same extent as the 2024 Co-Issuer Notes as described above.

In addition, the Co-Issuer Term Loan Agreement contains events of default substantially similar to those described above for the 2024 Co-Issuer Notes Indenture.

The Co-Issuer Term Loans are subject to the Excess Cash Flow offer described above.

2024 Peabody Notes

The terms of the 2024 Peabody Notes are governed by an indenture, as amended and restated as of February 3, 2021, by and among Peabody, the guarantors party thereto, and Wilmington Trust, National Association, as trustee (the 2024 Peabody Notes Indenture).

The 2024 Peabody Notes mature on December 31, 2024.

The Company paid aggregate debt issuance costs of $ 5.7 million, which are being amortized over the terms of the notes.

The 2024 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 2024 Peabody Notes, which is payable on June 30 and December 31 of each year, commencing on June 30, 2021.

During the year ended December 31, 2021, the Company recorded interest expense of $ 12.9 million related to the 2024 Peabody Notes, which included in-kind interest of approximately $ 2.9 million.

As a requirement of the Exchange Offer, during the three months ended March 31, 2021, the Company purchased $ 22.4 million of the 2024 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) loss on early debt extinguishment” during the year ended December 31, 2021.

The notes were subsequently canceled.

As previously described in Note 1.

“Summary of Significant Accounting Policies,” the Existing Indenture was amended as it relates to the remaining 2022 Notes.

The 2024 Peabody Notes Indenture contains customary covenants that, among other things, limit the Company’s and its restricted subsidiaries’ ability to incur additional Indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from restricted subsidiaries, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of its assets, and place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company.

The 2024 Peabody Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the Peabody Guarantors (as defined below) on the Peabody Collateral (as defined below).

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

Company LC Agreement

On the Settlement Date, the Company entered into the Company LC Agreement with the revolving lenders party to the Credit Agreement, pursuant to which the Company obtained a $ 324.0 million letter of credit facility under which its existing letters under the Credit Agreement were deemed to be issued.

The Company paid aggregate debt issuance costs of $ 4.1 million.

The commitments under the Company LC Agreement mature on December 31, 2024.

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 year ended December 31, 2021, the Company recorded interest expense and fees of $ 21.9 million related to the Company LC Agreement.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with the Revolver Transactions, the Company amended its 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 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.

The Company LC Agreement is guaranteed and secured to the same extent of the 2024 Peabody Notes as described above.

In addition, the Company LC Agreement contains events of default substantially similar to those described above for the 2024 Peabody Notes.

The 2024 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 2024 Peabody Notes and the priority lien obligations under the Company LC Agreement within 30 days of the end of such fiscal quarter at a price equal to the weighted average repurchase price paid over that quarter (Mandatory Repurchase Offer).

6.375 % Senior Secured Notes due 2025

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

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

The 2025 Notes were issued at par value.

The Company paid aggregate debt issuance costs of $ 25.1 million related to the offering, which are being amortized over the term of the 2025 Notes.

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 $ 35.7 million, $ 36.7 million and $ 36.3 million during the years ended December 31, 2021, 2020 and 2019, 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.

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

The 2025 Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by substantially all of the Company’s domestic restricted subsidiaries (the Peabody Guarantors) and secured by (a) first priority liens over (1) substantially all of the assets of the Company and the Peabody Guarantors, except for certain excluded assets, (2) 100 % of the capital stock of each domestic restricted subsidiary of the Company, (3) 100 % of the capital stock of each first tier foreign subsidiary of the Company or a foreign subsidiary holding company and (4) all intercompany debt owed to the Company or any Peabody Guarantor, in each case, subject to certain exceptions (the Peabody Collateral), and (b) second priority liens over the Wilpinjong Collateral (as defined below).

The 2025 Notes are secured on a pari passu basis by the same collateral securing the Credit Agreement (as defined below), and the other priority lien debt of the Company, including the New Peabody Notes and the New Company LC Agreement described below.

The 2025 Notes are secured on a pari passu basis by the same collateral securing the Credit Agreement, and the other priority lien debt of the Company, including the 2024 Peabody Notes and the Company LC Agreement described above.

Credit Agreement/Senior Secured Term Loan due 2025

The Company originally entered into the Credit Agreement during 2017, which provided for a $ 950.0 million senior secured term loan (the Senior Secured Term Loan) due in 2022.

Proceeds from the Senior Secured Term Loan were received net of an original issue discount and deferred financing costs of $ 37.3 million that are being amortized over its term.

The Credit Agreement has been amended periodically over its term to add a revolving loan facility, to increase the capacity and extend the maturity date of the revolving loan facility, to extend the maturity date of the Senior Secured Term Loan to 2025 and to make various changes to terms such as those related to interest, fees and payment restrictions.

In connection with certain of the amendments, the Company voluntarily prepaid $ 46.0 million of Senior Secured Term Loan principal and incurred $ 10.4 million of deferred financing costs related to the revolving loan facility.

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

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Credit Agreement

The Company entered into a credit agreement, dated as of April 3, 2017, among the Company, as borrower, Goldman Sachs Bank USA, as administrative agent, and other lenders party thereto (the Credit Agreement).

The Credit Agreement originally provided for a $ 950.0 million senior secured term loan (the Senior Secured Term Loan), which was to mature in 2022 prior to the amendments described below.

As previously described in Note 1.

“Summary of Significant Accounting Policies,” the Credit Agreement was amended in connection with the Refinancing Transactions.

Following the voluntary prepayments and amendments described below, the Credit Agreement provided for a $ 400.0 million first lien senior secured term loan, which bore interest at LIBOR plus 2.75 % per annum as of December 31, 2020.

During the years ended December 31, 2020, 2019 and 2018, the Company recorded interest expense of $ 15.6 million, $ 22.2 million and $ 24.0 million, respectively, related to the Senior Secured Term Loan.

Proceeds from the Senior Secured Term Loan were received net of an original issue discount and deferred financing costs of $ 37.3 million that are being amortized over its term.

The 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 loan principal was voluntarily prepayable at 101 % of the principal amount repaid if prepayment occurred prior to October 2018 (subject to certain exceptions, including prepayments made with internally generated cash) and is voluntarily prepayable at any time thereafter without premium or penalty.

The Senior Secured Term Loan may require mandatory principal prepayments of up to 75 % of Excess Cash Flow (as defined in the Credit Agreement) for any fiscal year if the Company’s Total Leverage Ratio (as defined in the Credit Agreement and calculated at December 31, net of any unrestricted cash) is greater than 2.00 :1.00.

The mandatory principal prepayment requirement changes to (i) 50 % of Excess Cash Flow if the Company’s Total Leverage Ratio is less than or equal to 2.00 :1.00 and greater than 1.50 :1.00, (ii) 25 % of Excess Cash Flow if the Company’s Total Leverage Ratio is less than or equal to 1.50 :1.00 and greater than 1.00 :1.00 or (iii) zero if the Company’s Total Leverage Ratio is less than or equal to 1.00 :1.00.

If required, mandatory prepayments resulting from Excess Cash Flows are payable within 100 days after the end of each fiscal year.

The calculation of mandatory prepayments would be reduced commensurately by the amount of previous voluntary prepayments.

In certain circumstances, the Senior Secured Term Loan requires that Excess Proceeds (as defined in the Credit Agreement) of $ 10.0 million or greater received from sales of Company assets be applied against the loan principal, unless such proceeds are reinvested within one year.

The Senior Secured Term Loan also requires that any net insurance proceeds be applied against the loan principal, unless such proceeds are reinvested within one year.

At December 31, 2021 the Senior Secured Term Loan had a balance of $ 322.8 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 $ 12.8 million, $ 15.6 million and $ 22.2 million during the years ended December 31, 2021, 2020 and 2019, respectively, related to the Senior Secured Term Loan, which bore interest at LIBOR plus 2.75 % per annum as of December 31, 2021.

The Senior Secured Term Loan may require mandatory principal prepayments of Excess Cash Flow (as defined in the Credit Agreement) for any fiscal year based upon the Company’s Total Leverage Ratio (as defined in the Credit Agreement and calculated at December 31, net of any unrestricted cash).

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 December 31, 2021.

The Company recorded interest expense and fees of $ 1.4 million, $ 15.9 million and $ 6.2 million, during the years ended December 31, 2021, 2020 and 2019, respectively, related to the revolving loan facility.

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.

Obligations under the Credit Agreement are guaranteed by the Peabody Guarantors and are secured by first priority liens on the Peabody Collateral and second priority liens on the Wilpinjong Collateral (as defined below).

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 New Peabody Notes and the New Company LC Agreement described below.

Since entering into the Credit Agreement, the Company has repaid $ 561.0 million of the original $ 950.0 million loan principal amount on the Senior Secured Term Loan in various installments, including $ 546.0 million which was voluntarily prepaid.

In September 2017, the Company entered into an amendment to the Credit Agreement which permitted the Company to add an incremental revolving credit facility in addition to the Company’s ability to add one or more incremental term loan facilities under the Credit Agreement.

The incremental revolving credit facility and/or incremental term loan facilities can be in an aggregate principal amount of up to $ 350.0 million plus additional amounts so long as the Company remains in compliance with the Total Leverage Ratio covenant as set forth in the Credit Agreement.

In April 2018, the Company entered into another amendment to the Credit Agreement which lowered the interest rate on the Senior Secured Term Loan to its current level of LIBOR plus 2.75 % and eliminated an existing 1.0 % LIBOR floor.

The amendment also extended the maturity of the Senior Secured Term Loan by three years to 2025 and eliminated previous capital expenditure restriction covenants on both the Senior Secured Term Loan and the incremental revolving credit facility described below.

In connection with this amendment, the Company voluntarily repaid $ 46.0 million of principal on the Senior Secured Term Loan.

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 2024 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 December 31, 2021.

Subsequent Financing Transactions

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

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.

The at-the-market equity offering program was further expanded to 32.5 million shares during 2021.

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, September 17, 2021, and December 17, 2021, relating to the offer and sale of the shares.

During the year ended December 31, 2021, the Company sold approximately 24.8 million shares for net cash proceeds of $ 269.8 million.

During the year ended December 31, 2021, the Company retired $ 91.4 million of 2024 Peabody Notes, $ 117.8 million of 2025 Notes and $ 61.7 million of its Senior Secured Term Loan primarily through various open market purchases at an aggregate cost of $ 232.4 million.

The Company recorded a gain on early debt extinguishment of $ 28.8 million, net of debt issuance costs and original issue discount related to the retired debt of $ 9.7 million.

Also during the year ended December 31, 2021, the Company completed multiple bilateral transactions with holders of the 2022 Notes, the 2025 Notes and the 2024 Peabody Notes in which the Company issued an aggregate 10.0 million shares of its common stock in exchange for $ 37.3 million aggregate principal amount of the 2022 Notes, $ 47.2 million aggregate principal amount of the 2025 Notes and $ 21.6 million aggregate principal amount of the 2024 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 2024 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 2024 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.

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the fourth quarter of 2017, the Company entered into the incremental revolving credit facility (the Revolver) for an aggregate commitment of $ 350.0 million for general corporate purposes and paid aggregate debt issuance costs of $ 4.7 million.

In September 2019, the Company entered into an amendment to the Credit Agreement which increased the aggregate commitment amount under the Revolver to $ 565.0 million and extended the maturity date on $ 540.0 million of the commitments from November 2020 to September 2023.

The remaining $ 25.0 million commitment matured in November 2020.

The Company incurred $ 5.7 million of additional debt issuance costs in connection with the amendment.

As a result of the amendment, such loans, letters of credit and unused capacity related to the $ 540.0 million of extended commitments bear interest and incur fees at rates dependent upon the Company’s First Lien Leverage Ratio (as defined in the Credit Agreement) beginning in 2020.

Specific to the Revolver, the Credit Agreement required that the Company maintain a 2.00 :1.00 First Lien Leverage Ratio, calculated on a trailing twelve-month basis and modified to limit unrestricted cash netting to $ 800.0 million.

This covenant was eliminated in connection with the Refinancing Transactions and was not applicable at December 31, 2020.

The Company borrowed $ 315.0 million under the Revolver and subsequently repaid $ 99.0 million of this amount during the year ended December 31, 2020.

At December 31, 2020, the Revolver was also utilized for letters of credit of $ 323.8 million, primarily in support of the Company’s reclamation obligations, as further described in Note 23.

“Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees.” At December 31, 2020, the remaining availability under the Revolver was $ 0.2 million.

At December 31, 2020, applicable Revolver rates were LIBOR plus 3.25 % for revolving loans, 0.50 % per annum for unused capacity and 3.375 % per annum for letters of credit fees.

During the years ended December 31, 2020, 2019 and 2018, the Company recorded interest expense and fees of $ 15.9 million, $ 6.2 million and $ 7.2 million, respectively, related to the Revolver.

The Company’s voluntary prepayments of $ 546.0 million of Senior Secured Term Loan principal and related amendments have been accounted for as a combination of partial debt extinguishments and debt modifications, depending upon the circumstances in each instance.

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

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

Secured Borrowing under Receivables Securitization Program

As further described in Note 23.

“Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees,” the Company’s receivables securitization program provides for up to $ 250.0 million in funding accounted for as a secured borrowing, limited to the availability of eligible receivables.

During September 2020, the Company borrowed $ 60.0 million under the receivables securitization program, all of which was subsequently repaid during the fourth quarter of 2020.

Any borrowings under the receivables securitization program have a maturity date of April 2022, bear an interest rate of LIBOR plus 1.50 % and may be secured by a combination of collateral and the trade receivables underlying the receivables securitization program, from time to time.

As a result of the Company’s open market purchases of its debt during the three months ended December 31, 2021, on January 14, 2022, the Company announced a Mandatory Repurchase Offer of up to $ 38.6 million of 2024 Peabody Notes, at 94.940 % 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 March 4, 2022, unless extended by the Company.

Finance Lease Obligations

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

Refinancing Transactions and New Debt Agreements

As previously described in Note 1.

“Summary of Significant Accounting Policies,” the Company entered into several new debt agreements and amended existing debt agreements in connection with the Refinancing Transactions.

The following provides additional information regarding the terms and conditions of such new agreements.

New Co-Issuer Notes

The terms of the New Co-Issuer Notes are governed by an indenture, as amended and restated as of February 3, 2021, by and among the Co-Issuers, Wilmington Trust, National Association, as trustee, and, on a limited basis, the Company (New Co-Issuer Notes Indenture).

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The New Co-Issuer Notes bear interest at an annual rate of 10.000 %, which is payable on March 31, June 30, September 30 and December 31 of each year, commencing on March 31, 2021.

The New Co-Issuer Notes will mature on December 31, 2024.

The New Co-Issuer Notes will be 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 New Co-Issuer Notes Indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of the New Co-Issuer Notes and the New Co-Issuer Term Loans on a pro rata basis, provided that the liquidity attributable to the Co-Issuers would not fall below $ 60.0 million.

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

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

The New Co-Issuer Notes initially are secured by liens on substantially all of the assets of the Co-Issuers, including by (i) 100 % of the capital stock of PIC Acquisition Corp.

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

The New 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.

If the New 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.

In addition, the holders of the New Co-Issuer Notes have the right, under certain circumstances specified in the New Co-Issuer Notes Indenture, to exchange their New Co-Issuer Notes for New Peabody Notes.

New Peabody Notes

The terms of the New Peabody Notes are governed by an indenture, as amended and restated as of February 3, 2021, by and among Peabody, the guarantors party thereto, and Wilmington Trust, National Association, as trustee (the New Peabody Notes Indenture).

The New 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 New Peabody Notes, which is payable on June 30 and December 31 of each year, commencing on June 30, 2021.

The New Peabody Notes will mature on December 31, 2024.

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

The New Peabody Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the Peabody Guarantors on the Peabody Collateral.

The obligations are secured on a pari passu basis by the same collateral that secures the 2025 Notes, the Credit Agreement and the New Company LC Agreement described below.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

New Co-Issuer Term Loans

The New Co-Issuer Term Loans mature on December 31, 2024 and bear interest at a rate of 10.00 % per annum.

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

The New Co-Issuer Term Loan Agreement is guaranteed and secured to the same extent as the New Co-Issuer Notes as described above.

In addition, the New Co-Issuer Term Loan Agreement contains events of default substantially similar to those described above for the New Co-Issuer Notes Indenture.

New Company LC Agreement

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

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

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

(i) the Company’s unrestricted subsidiaries’ liquidity must be greater than or equal to $ 200.0 million after giving effect to such repurchases, and (ii) for every $ 4 of principal repurchased in any fiscal quarter, the Company must make an offer on a pro rata basis to purchase $ 1 of principal amount of debt from holders of the New Peabody Notes and New 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.

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

7 unchanged sentences

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

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of lease expense during the years ended December 31, 2020 and 2019 were as follows:

The components of lease expense for the periods presented below were as follows:

Year Ended December 31,

2021 2020 2019

(Dollars in millions)

9 unchanged sentences

Total finance lease cost $ 8.6 $ 4.3 $ 16.8

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

18 unchanged sentences

Finance leases 8.5 %

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Supplemental cash flow information related to leases during the years ended December 31, 2020 and 2019 was as follows:

Supplemental cash flow information related to leases for the periods presented below was as follows:

Year Ended December 31,

2021 2020 2019

(Dollars in millions)

6 unchanged sentences

Finance leases 24.4 1.6 1.6

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

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company's leases have remaining lease terms ranging from 1 year to 20.0 years, and may include options to extend the terms, as applicable.

The contractual maturities of lease liabilities were as follows:

3 unchanged sentences

2023 16.9 5.9

2023 16.8 1.5

2027 and thereafter 0.3 7.2

2 unchanged sentences

Total lease liabilities $ 43.6 $ 29.3

Disclosures Related to Periods Prior to Adoption of ASU 2016-02 “Leases (Topic 842)”

Rental expense under operating leases, including expense related to short-term operating leases, was $ 158.0 million, during the year ended December 31, 2018 .

(13) Asset Retirement Obligations

10 unchanged sentences

Balance at end of period — closed or inactive locations $ 208.0 $ 256.4

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The credit-adjusted, risk-free interest rates utilized to estimate the Company’s asset retirement obligations ranged from 7.89 % for life of mines 3 years or less to 10.12 % for life of mines greater than 20 years for both U.S.

7 unchanged sentences

Life insurance benefits are provided to future hourly retirees in accordance with the applicable labor agreement.

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

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Year Ended December 31,

5 unchanged sentences

Amortization of prior service credit ( 46.4 ) ( 17.3 ) ( 8.7 )

Net actuarial loss (gain) 16.5 78.3 ( 128.4 )

Net periodic postretirement benefit cost (benefit) $ 21.7 $ 99.0 $ ( 91.9 )

The actuarial loss for all benefit plans in 2020 was primarily due to the decrease in the discount rate used to measure the benefit obligation offset by the favorable impact of claims experience for the year and updating the mortality base tables and improvement scales to those published by the Society of Actuaries for all participants except those receiving medical benefits under the UMWA Coal Action design.

Net actuarial (gain) loss ( 54.5 ) 16.5 78.3

Net periodic postretirement benefit (benefit) cost $ ( 90.4 ) $ 21.7 $ 99.0

The actuarial gain for all benefit plans in 2021 was primarily due to the increase in the discount rate used to measure the benefit obligation, favorable impact of claims experience for the year, and updating the mortality base table and improvement scale to those published by the Society of Actuaries considering the plan’s experience for participants receiving medical benefits under the UMWA Coal Act design.

The actuarial loss for all benefit plans in 2019 was primarily due to the decrease in the discount rate used to measure the benefit obligation and unfavorable medical claims experience for the year.

The actuarial gain for all benefit plans in 2018 was primarily due to the increase in the discount rate used to measure the benefit obligation, favorable medical claims experience for the year and the impact of Medicare Part D amendment from the 2018 Bipartisan Budget Act.

The following includes pre-tax amounts recorded in “Accumulated other comprehensive income”:

7 unchanged sentences

$ ( 93.1 ) $ ( 168.1 ) $ 8.7

The Company amortizes prior service credit over an amortization period of the average remaining service period to full eligibility for participating employees at the time of the plan change or the expected lifetime of participants in the plan ( 3.9 years and 4.9 years were the remaining amortization periods at January 1, 2021 and 2020, respectively for the plan changes effective December 31, 2018).

New prior service credits established during 2020 are described below.

Prior service credits established during 2021 and 2020 are described below.

The estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost during the year ending December 31, 2022 is $ 53.8 million.

10 unchanged sentences

Plan amendments ( 139.5 ) ( 185.4 )

Benefits paid ( 42.9 ) ( 47.7 )

Actuarial loss 18.6 80.0

Benefits paid and administrative fees (net of Medicare Part D reimbursements) ( 34.5 ) ( 42.9 )

Actuarial (gain) loss ( 55.5 ) 18.6

Accumulated postretirement benefit obligation at end of period 258.7 476.6

9 unchanged sentences

Noncurrent obligation (included in “Accrued postretirement benefit costs”) $ ( 212.1 ) $ ( 413.2 )

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 no longer provide medical coverage to certain existing retirees but will continue to offer a life insurance benefit to eligible retirees.

The impact of the changes on future benefits reduced the Company’s accumulated postretirement benefit obligation by $ 139.5 million.

The reduction was attributable to the elimination of health care benefits for certain represented retirees.

The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings based upon the estimated remaining life expectancies of certain plan participants ( 14.2 years was the amortization period when it was established on October 1, 2021).

In September 2020, the Company announced changes to its postretirement health care benefit plans for non-represented employees and retirees.

Effective January 1, 2021, the Company will no longer subsidize medical costs for Medicare eligible individuals or provide life insurance to salaried and hourly non-union retirees.

The Company will provide non-Medicare eligible salaried and hourly non-union retirees and eligible dependents a health reimbursement arrangement.

Effective January 1, 2021, the Company no longer subsidizes medical costs for Medicare eligible individuals or provides life insurance to salaried and hourly non-union retirees.

The Company provides non-Medicare eligible salaried and hourly non-union retirees and eligible dependents a health reimbursement arrangement.

There were no changes to benefits for represented participants.

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The reduction was attributable to the elimination of health care benefits upon covered individuals’ attainment of Medicare eligibility and the elimination of life insurance benefits for certain non-represented participants.

The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income.” The $ 174.5 million reduction for elimination of health care benefits upon attainment of Medicare eligibility for salaried and non-union hourly retirees and eligible dependents is being amortized to earnings over an average remaining service period to full eligibility for participating employees of 5.1 years when it was established on September 30, 2020.

The remaining $ 10.9 million for the elimination of life insurance benefits and elimination of health care benefits upon attainment of Medicare eligibility for select non-union retirees was amortized to earnings over the average remaining life expectancy of the affected plan, which was 10.5 years as of December 31, 2020.

The weighted-average assumptions used to determine the benefit obligations for the plans as of the end of each year were as follows:

Discount rate 2.55 % 3.40 %

Measurement date December 31, 2020 December 31, 2019

The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income.” The $ 174.5 million reduction for elimination of health care benefits upon attainment of Medicare eligibility for salaried and non-union hourly retirees and eligible dependents is being amortized to earnings over an average remaining service period to full eligibility for participating employees ( 3.9 years and 4.9 years were the remaining amortization periods at January 1, 2022 and 2021, respectively).

The remaining $ 10.9 million for the elimination of life insurance benefits and elimination of health care benefits upon attainment of Medicare eligibility for select non-union retirees is being amortized to earnings over the average remaining life expectancy of the affected plan ( 9.5 years and 10.5 years were the remaining amortization periods at January 1, 2022 and 2021, respectively).

A prior service credit established in December 2018 is being amortized to earnings over an average remaining service period to full eligibility for participating employees ( 2.9 years and 3.9 years were the remaining amortization periods at January 1, 2022 and 2021, respectively).

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted-average assumptions used to determine net periodic benefit cost (benefit) for the plans during each period were as follows:

The weighted-average assumptions used to determine the benefit obligations for the plans as of the end of each year were as follows:

Discount rate 2.84 % 2.55 %

Measurement date December 31, 2021 December 31, 2020

The weighted-average assumptions used to determine net periodic benefit (benefit) cost for the plans during each period were as follows:

Year Ended December 31,

4 unchanged sentences

The expected rate of return on plan assets is determined by taking into consideration expected long-term returns associated with each major asset class based on long-term historical ranges, inflation assumptions and the expected net value from active management of the assets based on actual results.

Effective January 1, 2021 the Company lowered its expected pre-tax rate of return on plan assets from 7.00 % to 5.75 % reflecting the impact of the Company’s asset allocation and capital market expectations.

The asset allocation of plan assets and long-term capital market expectations remain unchanged from December 31, 2020 therefore the Company’s expected pre-tax rate of return on plan assets will remain at 5.75 % for 2022.

The accumulated postretirement benefit obligation exceeded plan assets for all plans as of December 31, 2021 and 2020.

13 unchanged sentences

Non-Represented Retiree VEBA Trust (the Non-Represented Trust) are invested in accordance with the investment policy established by the Peabody VEBA Retirement Committee after consultation with outside investment advisors and actuaries.

As of December 31, 2020, the asset allocation strategy for the Non-Represented trust is 30 % in equity and 70 % in fixed income assets.

As of December 31, 2019, the asset allocation strategy for the Non-Represented trust was 50 % in equity and 50 % in fixed income assets.

As of December 31, 2021 and 2020, the asset allocation strategy for the Non-Represented Trust is 30 % in equity and 70 % in fixed income assets.

The asset strategy may vary over time based on changes in the status of the Non-Represented Plan, the Company’s risk posture and other factors.

Assets of the Peabody Holding Company LLC Represented Retiree VEBA Trust (the Represented Trust) are invested in cash funds at December 31, 2020 and 2019.

In 2021 the Peabody Holding Company LLC Represented Retiree VEBA Trust (the Represented Trust) was terminated.

At December 31, 2020 assets of the Represented Trust were invested in cash funds.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A financial instrument’s level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

6 unchanged sentences

The mutual funds are traded on a national securities exchange in an active market, are valued using daily publicly quoted net asset value (NAV) prices and accordingly classified within Level 1 of the valuation hierarchy.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

International equity securities.

18 unchanged sentences

government securities are classified within the Level 2 valuation hierarchy.

The Non-Represented Trust invests in cash funds to manage liquidity resulting from payment of participant benefits and certain administrative fees.

The investment consists of a U.S.

Government money market fund which is classified within the Level 1 valuation hierarchy.

The Non-Represented and Represented Trusts invest in cash funds to manage liquidity resulting from payment of participant benefits and certain administrative fees.

The investments consist of non-interest bearing cash funds and U.S.

Government money market fund which are classified within the Level 1 valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

1 unchanged sentence

The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

The following tables present the fair value of assets in the Non-Represented Trust by asset category and by fair value hierarchy:

The following tables present the fair value of assets in the Non-Represented and Represented Trusts by asset category and by fair value hierarchy:

December 31, 2021

21 unchanged sentences

Annual contributions to the Non-Represented and Represented Trusts are discretionary.

During the year ended December 31, 2020, the Company made contributions of $ 10.7 million to the Non-Represented Trust and $ 9.6 million to the Represented Trust.

During the year ended December 31, 2021, the Company made no contributions to either trust.

Estimated Future Benefit Payments

12 unchanged sentences

As part of this voluntary lump-sum program, the Company settled $ 51.6 million of its pension obligations for active salaried employees and former salaried employees in the Peabody Plan with an equal amount paid from plan assets.

As a result, the Company recorded a settlement gain of $ 2.7 million during the year ended December 31, 2020.

The settlement gain was reflected in “Net periodic benefit (credit) costs, excluding service cost” on the consolidated statement of operations.

As a result, the Company recorded a settlement gain of $ 2.7 million during the year ended December 31, 2020, which was reflected in “Net periodic benefit (credit) costs, excluding service cost” on the consolidated statement of operations.

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net periodic pension benefit included the following components:

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

Year Ended December 31,

5 unchanged sentences

Settlement — ( 2.7 ) —

Net actuarial (gain) loss ( 25.6 ) ( 16.6 ) 4.2

Net periodic pension benefit $ ( 29.7 ) $ ( 12.5 ) $ ( 4.9 )

Net actuarial loss (gain) 12.7 ( 25.6 ) ( 16.6 )

Net periodic pension cost (benefit) $ 10.4 $ ( 29.7 ) $ ( 12.5 )

The actuarial loss for all pension plans in 2021 was primarily due to actual returns on plan assets lower than expected returns for the year offset by the increase in the discount rate used to measure the benefit obligation.

The actuarial gain for all pension plans in 2020 was primarily due to actual returns on plan assets exceeding the expected returns for the year and the favorable impact of updating the mortality base tables and improvement scales to those published by the Society of Actuaries, offset by the decline in the discount rate used to measure the benefit obligation.

The actuarial gain for all pension plans in 2019 was primarily due to actual returns on plan assets exceeding the expected returns for the year, offset by the decline in the discount rate used to measure the benefit obligation.

The actuarial loss for all pension plans in 2018 was primarily due to actual returns on plan assets lower than expected returns for the year offset by the increase in the discount rate used to measure the benefit obligation.

The following summarizes the change in benefit obligation, change in plan assets and funded status of the Pension Plans:

5 unchanged sentences

Benefits paid ( 55.9 ) ( 57.5 )

Actuarial loss 43.4 78.0

Actuarial (gain) loss ( 29.4 ) 43.4

Settlement — ( 51.6 )

3 unchanged sentences

Actual return on plan assets ( 19.2 ) 101.4

Employer contributions — 20.0

Benefits paid ( 55.9 ) ( 57.5 )

12 unchanged sentences

Measurement date December 31, 2021 December 31, 2020

The weighted-average assumptions used to determine net periodic pension benefit during each period were as follows:

The weighted-average assumptions used to determine net periodic pension cost benefit during each period were as follows:

Year Ended December 31,

4 unchanged sentences

Effective January 1, 2021, the Company lowered its expected rate of return on plan assets from 3.60 % to 2.80 % reflecting the impact of the Company’s asset allocation and capital market expectations.

Effective January 1, 2022, the Company raised its expected rate of return on plan assets from 2.80 % to 3.20 % reflecting the impact of the Company’s asset allocation and capital market expectations.

As of December 31, 2021 and 2020, the accumulated benefit obligation for all plans was $ 751.7 million and $ 816.4 million, respectively, which was equal to the projected benefit obligation for those periods.

9 unchanged sentences

The Retirement Committees’ intention is to liquidate these real estate holdings when allowable per the terms of the limited partnership agreements.

Generally, dissolution and liquidation of the limited partnerships is required before the Master Trust’s real estate holdings can be liquidated and is estimated to occur at various times through 2022.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Generally, dissolution and liquidation of the limited partnerships is required before the Master Trust’s real estate holdings can be liquidated.

Assets of the Master Trust are under management by third-party investment managers, which are selected and monitored by the Retirement Committees.

3 unchanged sentences

Fixed income investment guidelines only allow for exchange-traded derivatives if the investment manager deems the derivative vehicle to be more attractive than a similar direct investment in an underlying cash market or to manage the duration of the fixed income portfolio.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A financial instrument’s level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

38 unchanged sentences

Some limited partnerships issue dividends to their investors in the form of cash distributions that the Pension Plans invest elsewhere within the Master Trust.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Private mutual funds .

5 unchanged sentences

The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following tables present the fair value of assets in the Master Trust by asset category and by fair value hierarchy:

27 unchanged sentences

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the total value of assets of the plans.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below sets forth a summary of changes in the fair value of the Master Trust’s Level 3 investments:

7 unchanged sentences

Balance, end of period $ 0.3 $ 1.2 $ 4.1

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contributions

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

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 December 31, 2021, the Company’s qualified plans are expected to be at or above the Pension Protection Act thresholds.

Minimum funding standards are legislated by ERISA and are modified by pension funding stabilization provisions included in the Moving Ahead for Progress in the 21st Century Act of 2012, the Highway and Transportation Funding Act of 2014 and the Bipartisan Budget Act of 2015.

The Company was not required to make any payments to its qualified pension plans in 2021 based on minimum funding requirements and did not make any discretionary contributions in 2021.

8 unchanged sentences

In May 2020 the Company amended one of its plans to eliminate the formula for calculating matching contributions and provide the Company sole discretion in making any matching contributions.

In addition, in May 2020 the Company also temporarily suspended matching contributions due to challenging business conditions of COVID-19.

During the period May 2020 to December 2020 the Company suspended matching contributions due to challenging business conditions of COVID-19.

In January 2021 the Company reinstated matching contributions.

The expense for these plans was $ 9.7 million, $ 9.6 million and $ 27.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

A performance contribution feature in one of the plans allows for additional discretionary contributions from the Company.

There was no performance contribution granted for the years ended December 31, 2020 and 2019.

There were no discretionary performance contributions paid during the year ended December 31, 2020.

Prior performance contributions of $ 8.9 million and $ 8.5 million were paid during the years ended December 31, 2019 and 2018, respectively.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Discretionary contribution features in the plans allow for additional contributions from the Company.

There were no discretionary contributions granted for the years ended December 31, 2021, 2020 and 2019.

There were no discretionary contributions paid during the years ended December 31, 2021 and 2020.

A discretionary contribution of $ 8.9 million was paid during the year ended December 31, 2019.

Superannuation

3 unchanged sentences

There was no performance contribution granted for the years ended December 31, 2021, 2020 and 2019.

There were no discretionary performance contributions paid during the year ended December 31, 2020.

Prior performance contributions of approximately $ 3 million were paid during both of the years ended December 31, 2019 and 2018.

There were no discretionary performance contributions paid during the years ended December 31, 2021 and 2020.

A prior performance contribution of approximately $ 3 million was paid during the year ended December 31, 2019.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(16) Stockholders’ Equity

11 unchanged sentences

Shares outstanding at the beginning of the period 97.8 96.9 110.4

Shares issued for preferred share conversions — — 25.5

Shares issued for vested restricted stock units 1.0 1.3 1.5

Shares issued for disputed claims — — 0.1

Shares issued in exchange for debt retirement 10.0 — —

Shares issued under at-the-market equity offering program 24.8 — —

Shares repurchased ( 0.3 ) ( 0.4 ) ( 15.0 )

2 unchanged sentences

The Board is authorized to issue up to 100.0 million shares of preferred stock, par value $ 0.01 per share.

On the Effective Date, 50.0 million shares of the preferred stock were designated as Series A Convertible Preferred Stock.

On January 31, 2018, the remaining outstanding shares of Series A Convertible Preferred Stock were converted into shares of Common Stock.

The following table summarizes the Series A Convertible Preferred Stock activity during the periods presented below:

Year Ended December 31, 2018

Shares outstanding at the beginning of the period 13.5

Shares converted to Common Stock ( 13.5 )

Shares outstanding at the end of the period —

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The shares of Series A Convertible Preferred Stock retained the status of authorized but unissued shares of preferred stock following the conversion and accordingly, the Company has 100.0 million authorized shares of preferred stock.

The Board can determine the terms and rights of each series, including whether dividends (if any) will be cumulative or non-cumulative and the dividend rate of the series, redemption or sinking fund provisions, conversion terms, prices and rates and amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company and whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation.

8 unchanged sentences

Share repurchases.

On August 1, 2017, the Board authorized a $ 500.0 million share repurchase program of the outstanding shares of the Company’s common stock and/or preferred stock (Repurchase Program).

On April 25, 2018, the Company announced that the Board authorized the expansion of the Repurchase Program to $ 1.0 billion.

On October 30, 2018, the Company announced that the Board authorized an additional expansion of the Repurchase Program to $ 1.5 billion.

On August 1, 2017, the Board authorized a $ 500.0 million share repurchase program of the outstanding shares of the Company’s common stock and/or preferred stock (Repurchase Program), which was eventually expanded to $ 1.5 billion during 2018.

The Repurchase Program does not have an expiration date and may be discontinued at any time.

3 unchanged sentences

As of December 31, 2021, there was $ 160.5 million available for repurchase under the Repurchase Program.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share repurchases were suspended by the Company during 2019, and as further described in Note 22.

“Summary of Significant Accounting Policies,” during the fourth quarter of 2020, the Company entered into transaction support agreements with its surety bond providers which prohibit the repurchase of shares through December 31, 2024, unless otherwise agreed to by the parties to the agreements.

“Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees,” during the fourth quarter of 2020, the Company entered into a transaction support agreement with its surety bond providers which prohibits the repurchase of shares through the earlier of December 31, 2025, or the maturity of the Credit Agreement (currently March 31, 2025), unless otherwise agreed to by the parties to the agreements.

Additionally, restrictive covenants in the Company’s credit facility and in the indentures governing its senior secured notes also limit the Company’s ability to repurchase shares.

1 unchanged sentence

The specific timing, price and size of purchases depended upon the share price, general market and economic conditions and other considerations, including compliance with various debt agreements in effect at the time repurchases were made.

On August 14, 2018, Peabody Energy Corporation entered into a share repurchase agreement (the Share Repurchase Agreement) by and among the Company and its related parties, Elliott Associates, LP, Liverpool Limited Partnership and Sprayberry Investments Inc.

to repurchase 7.2 million shares of the Company’s common stock for an aggregate purchase price of approximately $ 300 million, which is included in the total amount of repurchases noted above.

Pursuant to the Share Repurchase Agreement, the purchase price per share of $ 41.82 represented a 1.7 % discount from the closing sale price of the common stock on the New York Stock Exchange on August 13, 2018.

The repurchase transaction was made in conjunction with the Company’s existing share repurchase program and closed on August 21, 2018.

Shares relinquished.

The Company routinely allows employees to relinquish Common Stock to pay estimated taxes upon the vesting of restricted stock units and the payout of performance units that are settled in Common Stock under its equity incentive plans.

The number of shares of Common Stock relinquished was 0.4 million for each of the years ended December 31, 2020, 2019 and 2018.

The number of shares of Common Stock relinquished was 0.3 million for the year ended December 31, 2021 and 0.4 million for both the years ended December 31, 2020 and 2019.

The value of the Common Stock tendered by employees was based upon the closing price on the dates of the respective transactions.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(17) Share-Based Compensation

19 unchanged sentences

These deferred stock units generally vest on a monthly basis over 12 months and are settled in Common Stock three years after the date of grant.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock Units

On the Effective Date, the Company granted restricted stock units under the 2017 Incentive Plan and the terms of the relevant restricted stock unit agreement to all employees, including its executive officers (the Emergence Awards).The Emergence Awards granted to the Company’s executive officers vested ratably on each of the first three anniversaries of the Effective Date, subject to, among other things, each such executive officer’s continued employment with the Company.

The Emergence Awards became fully vested upon each such executive officer’s termination of employment by the Company and its subsidiaries without Cause or by the executive for Good Reason (each, as defined in the 2017 Incentive Plan or award agreement) or due to a termination of employment with the Company and its subsidiaries by reason of death or Disability (as defined in the 2017 Incentive Plan or award agreement).

In order to receive the Emergence Awards, the executive officers were required to execute restrictive covenant agreements protecting the Company’s interests.

There are no unvested Emergence Awards outstanding as of December 31, 2020.

The Company grants restricted stock units to certain senior management and non-senior management employees.

3 unchanged sentences

The payouts for active grants awarded during the years ended December 31, 2021, 2020 and 2019 will be settled in the Company’s Common Stock.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of restricted stock unit activity is as follows:

10 unchanged sentences

The total fair value of restricted stock units and DEUs vested was $ 3.3 million, $ 5.6 million and $ 40.3 million during the years ended December 31, 2021, 2020 and 2019, respectively.

In March 2021 the Company entered into a transition agreement with its former chief executive officer which resulted in a modification to restricted stock units granted.

Under terms of the agreement, any restricted stock units held by the former chief executive officer that would have vested under their original terms during the twelve months following the specified termination vested upon such date.

As a result of this modification, the Company avoided additional compensation expense of approximately $ 1.3 million for the year ended December 31, 2021.

Performance Units

3 unchanged sentences

In addition, the payout of the performance units can be increased or decreased by up to 25 % of the award based on three-year stock price performance compared to a custom peer group (market condition).

There were no performance units granted during the year ended December 31, 2021.

Awards granted during the years ended December 31, 2020 and 2019 will be settled in the Company's Common Stock.

3 unchanged sentences

Nonvested at December 31, 2020 858,588 1.5

Granted 686,082

Vested ( 118,031 )

Forfeited ( 89,651 )

Nonvested at December 31, 2021 650,906 0.7

As of December 31, 2020, no performance units had vested.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2021, there were 131,203 performance units and DEU’s vested that had an aggregate intrinsic value of $ 0.5 million and a conversion price per share of $ 3.89 .

The performance units receive DEUs upon payment of cash dividends to holders of Common Stock.

1 unchanged sentence

As of December 31, 2021, there were approximately 17,000 nonvested DEUs.

In March 2021 the Company entered into a transition agreement with its former chief executive officer which resulted in a modification to performance units granted.

Under terms of the agreement, a portion of the performance units held by the former chief executive officer as of the specified termination date remain eligible to vest based on actual performance through the original performance period.

As a result of this modification, the Company avoided additional compensation expense of approximately $ 2.5 million for the year ended December 31, 2021.

The performance condition awards were valued utilizing the grant date fair values of the Company’s Common Stock adjusted for dividends foregone during the vesting period.

5 unchanged sentences

Dividend yield — % — %

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(18) Accumulated Other Comprehensive Income

The following table sets forth the after-tax components of accumulated other comprehensive (loss) income and changes thereto:

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto:

Adjustment Prior Service

Credit (Cost) Associated

Credit Associated

Postretirement

2 unchanged sentences

December 31, 2018 $ ( 4.5 ) $ 44.6 $ 40.1

Reclassification from other comprehensive income to earnings — ( 8.7 ) ( 8.7 )

Current period change 0.2 — 0.2

6 unchanged sentences

December 31, 2021 $ 0.8 $ 297.1 $ 297.9

Postretirement health care and life insurance benefits reclassified from “Accumulated other comprehensive income” to earnings of $ 17.3 million and $ 8.7 million during the years ended December 31, 2020 and 2019, respectively, are included in “Net periodic benefit (credit) costs, excluding service cost” in the accompanying consolidated statements of operations.

There were no amounts reclassified out of “Accumulated other comprehensive income” into earnings during the year ended December 31, 2018.

Comprehensive loss differed from net loss by the amount of the change in prior service cost of postretirement plans (see Note 15.

Postretirement health care and life insurance benefits reclassified from “Accumulated other comprehensive income” to earnings of $ 46.4 million, $ 17.3 million and $ 8.7 million during the years ended December 31, 2021, 2020 and 2019, respectively, are included in “Net periodic benefit (credit) costs, excluding service cost” in the accompanying consolidated statements of operations.

Comprehensive income (loss) differed from net income (loss) by the amount of the change in prior service credit associated with postretirement plans (see Note 14.

“Postretirement Health Care and Life Insurance Benefits” for information related to the Company’s postretirement plans) and foreign currency translation adjustment related to the Company’s investments in Middlemount, whose functional currency is the Australian dollar.

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(19) Other Events

Cost Repositioning Program

As part of its cost repositioning program, the Company idled nine individual mines for periods ranging from one week to multiple months throughout the year ended December 31, 2020.

Included in the count was the Shoal Creek Mine in Alabama, which was idled in October 2020 to reset the cost structure of the mine amid weak pricing and demand, and the Metropolitan Mine in New South Wales, Australia, which was idled in late December 2020.

Restructuring Charges

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

Costs associated with restructuring actions can include the impact of early mine closures, voluntary and involuntary workforce reductions, office closures and other related activities.

Costs associated with restructuring activities amounted to $ 8.3 million, $ 37.9 million, and $ 24.3 million during the years ended December 31, 2021, 2020 and 2019, respectively, and are included as “Restructuring charges” in the Company's consolidated statements of operations.

Such costs were primarily associated with voluntary and involuntary workforce reductions.

Divestitures and Other Transactions

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 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 consolidated statements of operations.

United Wambo Joint Venture with Glencore

In December 2019, after receiving the requisite regulatory and permitting approvals, the Company formed an unincorporated joint venture with Glencore plc (Glencore), in which the Company holds a 50 % interest, to combine the existing operations of the Company’s Wambo Open-Cut Mine in Australia with the adjacent coal reserves of Glencore’s United Mine.

In December 2019 the Company formed an unincorporated joint venture with Glencore plc (Glencore), in which the Company holds a 50 % interest, to combine the existing operations of the Company’s Wambo Open-Cut Mine in Australia with the adjacent coal reserves of Glencore’s United Mine.

The Company proportionally consolidates the entity based upon its economic interest.

Both parties contributed mining tenements upon formation of the joint venture (United Wambo Joint Venture), and combined operations commenced in December 2020.

During the year ended December 31, 2020, the Company contributed approximately $ 72 million towards construction and development, which is reflected as “Additions to property, plant, equipment and mine development” in the accompanying consolidated statements of cash flows.

As per the joint venture agreement, the Company fully owned and operated the Wambo Open-Cut Mine through the date that combined operations commenced.

At that date, the parties contributed mining equipment and other assets, and certain additional construction and development activities are ongoing.

During the years ended December 31, 2021 and 2020, the Company contributed approximately $ 59 million and $ 72 million, respectively, towards construction and development, which is reflected as “Additions to property, plant, equipment and mine development” in the accompanying consolidated statements of cash flows.

Glencore is responsible for managing the mining operations of the joint venture.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company accounted for its interest in the United Wambo Joint Venture at fair value and recognized a gain of $ 48.1 million, which was classified in “Gain on formation of United Wambo Joint Venture” in the accompanying consolidated statements of operations during the year ended December 31, 2019.

The gain represented the difference between the fair value of the Company’s interest in the joint venture, $ 63.7 million, and the carrying value of the Company’s net assets contributed upon formation, $ 15.6 million.

The fair value of the Company’s interest in the joint venture was based on applying the income and cost valuation methods to the combined mining tenements and included a provision for the estimated fair value of related asset retirement obligations.

PRB Colorado Joint Venture with Arch

On June 18, 2019, the Company entered into a definitive implementation agreement with Arch, to establish a joint venture that would have combined their respective Powder River Basin (PRB) and Colorado operations.

On February 26, 2020, the U.S.

Federal Trade Commission (FTC) sought a preliminary injunction to challenge the Company’s proposed joint venture.

On September 29, 2020, the United States District Court for the Eastern District of Missouri (the District Court) granted the FTC’s request for a preliminary injunction.

Effective September 30, 2020, Peabody and Arch terminated their agreement to establish the joint venture.

Acquisition of Shoal Creek Mine

On December 3, 2018, the Company completed the acquisition of the Shoal Creek metallurgical coal mine, preparation plant and supporting assets located in Alabama (Shoal Creek Mine) from Drummond Company, Inc.

for a purchase price of $ 389.8 million after customary purchase price adjustments, which was funded with available cash on hand.

The acquisition expanded the Company’s seaborne metallurgical mining platform.

The acquisition excluded all liabilities other than reclamation and the Company is not responsible for other liabilities relating to the operation of the Shoal Creek Mine prior to the acquisition date, including employee benefit plans and post-employment benefits.

In connection with completing the acquisition, a new collective bargaining agreement was reached with the union-represented workforce that eliminates participation in the multi-employer pension plan and replaces it with a 401(k) retirement plan.

The purchase accounting allocations were recorded in the accompanying consolidated financial statements as of, and for the period subsequent to the acquisition date.

The Company finalized the valuation of the net assets acquired and related purchase price allocation during the year ended December 31, 2019.

The total purchase price was allocated as follows:

$ 365.3 million to property, plant, equipment and mine development;

$ 39.9 million to inventories;

$ 11.3 million to asset retirement obligations;

and $ 4.1 million to various current liabilities.

Determining the fair value of assets acquired and liabilities assumed required judgment and the utilization of independent valuation experts, and included the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items.

Due to the unobservable inputs to the valuation, the fair value would be considered Level 3 in the fair value hierarchy.

The results of Shoal Creek Mine subsequent to the acquisition date are included in the accompanying consolidated statements of operations and are reported in the Seaborne Metallurgical Mining segment.

The Shoal Creek Mine contributed revenues of $ 12.8 million and less than $ 0.1 million of net income from December 4, 2018 through December 31, 2018.

This excludes acquisition costs recorded during the year ended December 31, 2018 of $ 7.4 million, which primarily consisted of professional fees.

These acquisition costs are recorded in the “Transaction costs related to business combinations and joint ventures” line item in the consolidated statements of operations.

The following unaudited pro forma financial information provides the estimated combined results of operations of the Company and Shoal Creek Mine for the year ended December 31, 2018, on a pro forma basis, as though the operations of the Shoal Creek Mine had been combined with the Company’s operations as of January 1, 2018:

revenues of $ 6,008.4 million;

income from continuing operations, net of income taxes of $ 826.6 million;

basic earnings per share from continuing operations of $ 5.84 ;

and diluted earnings per share from continuing operations of $ 5.75 .

The pro forma income from continuing operations, net of income taxes includes adjustments to operating costs to reflect the additional expense for the estimated impact of the fair value adjustment for coal inventory, a reduction in postretirement benefit costs resulting from the new collective bargaining agreement described above, and the estimated impact on depreciation, depletion and amortization for the fair value adjustment for property, plant and equipment (including coal reserve assets).

On a pro forma basis, the acquisition would have had no impact on taxable income due to the Company’s federal NOLs, as further described in Note 10.

“Income Taxes.”

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pro forma information is not provided for the years ended December 31, 2020 or 2019 because the operations of the Shoal Creek Mine are reflected in the Company’s actual consolidated results for the entire year.

The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had the operations of the Company and Shoal Creek Mine been combined during those periods or that may be attained in the future.

North Goonyella

The Company’s North Goonyella Mine in Queensland, Australia experienced a fire in a portion of the mine during September 2018 and mining operations have been suspended since then.

During the years ended December 31, 2019 and 2018, the Company recorded provisions for equipment losses of $ 83.2 million and $ 66.4 million, respectively, related to the fire, representing the best estimate of losses to date.

No additional provisions for equipment losses were recorded during the year ended December 31, 2020.

The Company has also incurred containment and idling costs subsequent to the mine’s suspension which amounted to $ 32.3 million, $ 111.5 million and $ 58.0 million during the years ended December 31, 2020, 2019 and 2018, respectively.

In March 2019, the Company entered into an insurance claim settlement agreement with its insurers and various re-insurers under a combined property damage and business interruption policy and recorded a $ 125 million insurance recovery, the maximum amount available under the policy above a $ 50 million deductible.

The Company has collected the full amount of the recovery.

The Company’s North Goonyella Mine in Queensland, Australia experienced a fire in 2018 which resulted in the suspension of mining operations.

During the years ended December 31, 2019 and 2018, the Company recorded provisions for equipment losses of $ 83.2 million and $ 66.4 million, respectively, related to the fire.

During 2019, the Company collected a $ 125 million insurance recovery under a property damage and business interruption policy.

The Company has incurred containment and idling costs subsequent to the mine’s suspension which amounted to $ 13.0 million, $ 32.3 million and $ 111.5 million during the years ended December 31, 2021, 2020 and 2019, respectively.

The Company is currently evaluating various alternatives regarding the future utility of the mine.

In the event that no future mining occurs at the North Goonyella Mine or the Company is unable to find a commercial alternative, the Company may record additional charges for the remaining carrying value of the North Goonyella Mine of up to approximately $ 300 million, which is included in the at-risk value described in Note 3.

In the event that no future mining occurs at the North Goonyella Mine or the Company is unable to find a commercial alternative, the Company may record additional charges for the remaining carrying value of the North Goonyella Mine of up to approximately $ 0.3 billion, which is included in the at-risk value described in Note 3.

“Asset Impairment.” Incremental exposures above the aforementioned include take-or-pay obligations and other costs associated with idling or closing the mine.

Divestitures and Other Transactions

The Company’s Kayenta Mine closed during August 2019 upon termination of its coal supply agreement with the Navajo Generating Station (NGS) in Arizona.

The NGS was the sole customer of the Kayenta Mine and the coal supply agreement provided for consideration to the Company related to its post-mining obligations for retiree healthcare and reclamation costs.

A cumulative portion of such consideration, $ 53.5 million, was held in trust and released to the Company upon termination.

During the fourth quarter of 2019, the parties entered into a settlement agreement to finalize such consideration for an additional $ 78.5 million payable to the Company.

Of this amount, $ 35.4 million was receivable at December 31, 2019, all of which was collected during the year ended December 31, 2020.

In June 2018, Peabody entered into an agreement to sell approximately 23 million tonnes of metallurgical coal resources adjacent to its Millennium Mine to Stanmore Coal Limited for approximately $ 22 million.

The sale was completed in July 2018 and the Company recorded a gain of $ 20.5 million which is included within “Net gain on disposals” in the accompanying consolidated statements of operations for the year ended December 31, 2018.

On February 6, 2018, the Company sold its 50 % interest in the Red Mountain Joint Venture (RMJV) with BHP Billiton Mitsui Coal Pty Ltd (BMC) for $ 20.0 million and recorded a gain of $ 7.1 million, which is included within “Net gain on disposals” in the accompanying consolidated statements of operations for the year ended December 31, 2018.

RMJV operated the coal handling and preparation plant utilized by the Company’s Millennium Mine.

BMC assumed the reclamation obligations and other commitments associated with the assets of RMJV.

The Millennium Mine had continued usage of the coal handling and preparation plant and the associated rail loading facility until the end of 2019 via a coal washing take-or-pay agreement with BMC.

In January 2018, Peabody entered into an agreement to sell its share in certain surplus land assets in Queensland’s Bowen Basin to Pembroke Resources South Pty Ltd for approximately $ 37 million Australian dollars, net of transaction costs.

The necessary approval of the Australian Foreign Investment Review Board to complete the transaction was received on March 29, 2018, satisfying all the conditions precedent to the sale, and the Company recorded a gain of $ 20.6 million, which is included within “Net gain on disposals” in the accompanying consolidated statements of operations for the year ended December 31, 2018.

Peabody Energy Corporation 2021 Form 10-K

6 unchanged sentences

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

During the period which included the Company’s Series A Convertible Preferred Stock, basic and diluted EPS were computed using the two-class method, which is an earnings allocation that determines EPS for each class of common stock and participating securities according to dividends declared and participation rights in undistributed earnings.

The Company’s Series A Convertible Preferred Stock was considered a participating security because holders were entitled to receive dividends on an if-converted basis.

Diluted EPS assumes that participating securities are not executed or converted.

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

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

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

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

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

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.

For further discussion of the Company’s share-based compensation awards, see Note 17.

“Share-Based Compensation.”

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 2.2 million, 1.9 million and less than 0.1 million for the years ended December 31, 2020, 2019 and 2018 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 less than 0.1 million for the year ended December 31, 2021, and approximately 2.2 million and 1.9 million for the years ended December 31, 2020 and 2019, 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 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

3 unchanged sentences

EPS numerator:

(Loss) income from continuing operations, net of income taxes

$ ( 1,859.8 ) $ ( 188.3 ) $ 645.7

Series A Convertible Preferred Stock dividends — — 102.5

Net (loss) income attributable to noncontrolling interests ( 3.5 ) 26.2 16.9

(Loss) income from continuing operations attributable to common stockholders, before allocation of earnings to participating securities

( 1,856.3 ) ( 214.5 ) 526.3

Earnings allocated to participating securities — — 7.9

(Loss) income from continuing operations attributable to common stockholders, after allocation of earnings to participating securities (1)

( 1,856.3 ) ( 214.5 ) 518.4

(Loss) income from discontinued operations, net of income taxes ( 14.0 ) 3.2 18.1

Income from discontinued operations allocated to participating securities — — 0.3

(Loss) income from discontinued operations attributable to common stockholders, after allocation of earnings to participating securities ( 14.0 ) 3.2 17.8

Net (loss) income attributable to common stockholders, after allocation of earnings to participating securities (1)

$ ( 1,870.3 ) $ ( 211.3 ) $ 536.2

Income (loss) from continuing operations, net of income taxes $ 347.4 $ ( 1,859.8 ) $ ( 188.3 )

Net income (loss) attributable to noncontrolling interests 11.3 ( 3.5 ) 26.2

Income (loss) from continuing operations attributable to common stockholders 336.1 ( 1,856.3 ) ( 214.5 )

Income (loss) from discontinued operations, net of income taxes 24.0 ( 14.0 ) 3.2

Net income (loss) attributable to common stockholders $ 360.1 $ ( 1,870.3 ) $ ( 211.3 )

EPS denominator:

2 unchanged sentences

Weighted average shares outstanding — diluted 112.0 97.7 103.7

97.7 103.7 121.0

Basic EPS attributable to common stockholders:

(Loss) income from continuing operations $ ( 18.99 ) $ ( 2.07 ) $ 4.35

(Loss) income from discontinued operations ( 0.15 ) 0.03 0.15

Net (loss) income attributable to common stockholders $ ( 19.14 ) $ ( 2.04 ) $ 4.50

Income (loss) from continuing operations $ 3.03 $ ( 18.99 ) $ ( 2.07 )

Income (loss) from discontinued operations 0.21 ( 0.15 ) 0.03

Net income (loss) attributable to common stockholders $ 3.24 $ ( 19.14 ) $ ( 2.04 )

Diluted EPS attributable to common stockholders:

(Loss) income from continuing operations $ ( 18.99 ) $ ( 2.07 ) $ 4.28

(Loss) income from discontinued operations ( 0.15 ) 0.03 0.15

Net (loss) income attributable to common stockholders $ ( 19.14 ) $ ( 2.04 ) $ 4.43

(1) The reallocation adjustment for participating securities to arrive at the numerator to calculate diluted EPS was $ 0.1 million for the year ended December 31, 2018.

(2) The two-class method assumes that participating securities are not exercised or converted.

As such, weighted average diluted shares outstanding excluded 2.1 million shares related to the participating securities for the year ended December 31, 2018.

As of January 31, 2018, all 30.0 million shares of Series A Convertible Preferred Stock issued upon the Effective Date had been converted into 59.3 million shares of Common Stock, which is inclusive of the shares that had been issued for the payable in-kind preferred stock dividends.

Income (loss) from continuing operations $ 3.00 $ ( 18.99 ) $ ( 2.07 )

Income (loss) from discontinued operations 0.22 ( 0.15 ) 0.03

Net income (loss) attributable to common stockholders $ 3.22 $ ( 19.14 ) $ ( 2.04 )

Peabody Energy Corporation 2021 Form 10-K

7 unchanged sentences

In Australia, the coal mining industry is unionized and the majority of hourly workers employed at the Company’s Australian mining operations are members of trade unions.

The Construction, Forestry, Maritime, Mining and Energy Union generally represents the Company’s Australian subsidiaries’ hourly production and engineering employees, including those employed through contract mining relationships.

The Company believes labor relations with its employees are good.

Should that condition change, the Company could experience labor disputes, work stoppages or other disruptions in production that could negatively impact the Company’s results of operations and cash flows.

The following table presents the Company’s active mining operations as of December 31, 2020 in which the employees are represented by organized labor unions:

Mine Current Agreement Expiration Date

November 2024

Shoal Creek (2)

Owner-operated mines:

Wilpinjong (3)

Metropolitan (5)

Wambo Underground (6)

The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) generally represents the Company’s Australian subsidiaries’ hourly production and engineering employees, including those employed through contract mining relationships.

The following table presents the Company’s active and inactive mining operations as of December 31, 2021 in which the employees are represented by organized labor unions:

Mine Approximate Number of Active Employees Represented Union Current Agreement Expiration Date or Date Amendable

Kayenta 15 UMWA November 2024

Shoal Creek 280 UMWA December 2024

Wilpinjong 480 CFMMEU June 2024

Coppabella (1)

Wambo Open-Cut (6)

(1) Prior to its closure in 2019, hourly workers at the Company’s Kayenta Mine in Arizona were represented by the UMWA under the Western Surface Agreement, which was effective through September 16, 2019.

The Company concluded negotiations with the UMWA for a 4 year agreement covering the hourly workers expected to be involved in mining reclamation.

(2) Hourly workers at the Company’s Shoal Creek Mine in Alabama are represented by the UMWA under the Shoal Creek Wage Agreement, which is effective through April 1, 2021.

This agreement covers hourly employees who generated approximately 1 % of the Company’s U.S.

production during the year ended December 31, 2020.

The hourly employees at the mine are temporarily laid off for an extended period and the Company issued a notice to the union in January 2021 to terminate the labor agreement and commence negotiations for a new agreement.

(3) The current Wilpinjong labor agreement for Wilpinjong Mine expired in May 2020.

Management, employees and the union are currently negotiating a new agreement.

Hourly employees of this mine comprise approximately 39 % of the Company’s Australian subsidiaries’ hourly employees, who generated approximately 59 % of the Company’s Australian production during the year ended December 31, 2020.

(4) Employees of the Company’s Moorvale Mine operate on individual contracts underpinned by a non-union enterprise agreement.

Employees are managed according to their individual contracts rather than the enterprise agreement.

The current memorandum of understanding agreeing to a rollover of the existing enterprise agreement expires in June 2023.

Hourly employees of this mine comprise approximately 15 % of the Company’s Australian subsidiaries’ hourly employees, who generated approximately 5 % of the Company’s Australian production during the year ended December 31, 2020.

(5) Employees of the Company’s Metropolitan Mine operate under a separate labor agreement, which expires in January 2021.

Management, employees and the union have commenced negotiations for a new agreement.

There is also a deputy labor agreement which expires in April 2022.

During 2019, the Company insourced the operation of the Metropolitan coal handling and preparation plant and the hourly employees are employed under a separate labor agreement that expires in May 2021.

Hourly employees of this mine comprise approximately 14 % of the Company’s Australian subsidiaries’ hourly employees, who generated approximately 4 % of the Company’s Australian production during the year ended December 31, 2020.

Peabody Energy Corporation 2020 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(6) Employees of the Wambo Open-Cut Mine operate under a separate enterprise agreement which will expire in March 2022.

The Wambo Open Cut enterprise agreement and employees transferred to Glencore on December 1, 2020 as part of the new Joint Venture.

Employees of the Company's Wambo Underground Mine operate under a separate labor agreement.

That agreement will expire in March 2021.

The Wambo coal handling and preparation plant hourly employees are under a separate labor agreement that expires in December 2021.

Hourly employees of these mines comprise approximately 8 % of the Company’s Australian subsidiaries’ hourly employees, who generated approximately 23 % of the Company’s Australian production during the year ended December 31, 2020.

(7) Employees of the Company’s Coppabella Mine operate under a separate enterprise agreement which expires in June 2021.

Hourly employees of this mine comprise approximately 23 % of the Company’s Australian subsidiaries’ hourly employees, who generated approximately 9 % of the Company’s Australian production during the year ended December 31, 2020.

280 CFMMEU June 2021

150 N/A June 2023

Underground employees 145 CFMMEU May 2025

Handling and preparation plant employees (1)

20 CFMMEU May 2021

Wambo Underground

Underground employees 75 CFMMEU November 2025

Handling and preparation plant employees (1)

20 CFMMEU December 2021

(1) The Company and the CFMMEU are currently negotiating a new labor agreement.

(2) Employees of the Moorvale Mine operate on individual contracts under a direct engagement model.

Such contracts are modeled after the Company’s former labor agreement with CFMMEU which ended in 2017.

According to a memorandum of understanding between the Company and employees, individual contracts may be renegotiated in June 2023.

Employees of the North Goonyella Mine operated under a labor agreement which expired in December 2018.

Due to the idling of the mine, as further described in Note 19.

“Other Events,” hourly employees were terminated and there are no employees employed under the agreement and there are no current negotiations for a new labor agreement.

“Other Events,” hourly employees were terminated and there are no employees employed under the agreement.

Peabody applied to the Fair Work Commission in December 2021 to terminate the labor agreement.

(22) Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees

4 unchanged sentences

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 consolidated balance sheets.

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

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

Peabody Energy Corporation 2021 Form 10-K

PEABODY ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Upon completion of the Refinancing Transactions described in Note 11.

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

The collateral postings 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.

Based upon the Company’s free cash flow for the year ended December 31, 2021, additional collateral of $13.0 million was posted in January 2022 in the form of letters of credit.

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

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

In connection 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 consolidated balance sheets.

Reclamation Bonding

2 unchanged sentences

At December 31, 2021, the Company’s asset retirement obligations of $ 719.8 million were supported by surety bonds of $ 1,294.7 million, as well as letters of credit issued under the Company’s receivables securitization program and Revolver.

Letters of credit issued at December 31, 2020 amounted to $ 315.0 million, which served as collateral for surety bonds in support of asset retirement obligations.

Letters of credit issued at December 31, 2021, which served as collateral for surety bonds in support of asset retirement obligations, amounted to $ 323.0 million.

Accounts Receivable Securitization

1 unchanged sentence

The receivables securitization program (Securitization Program) is subject to customary events of default set forth in the Receivables Purchase Agreement.

The Securitization Program expires April 1, 2022 and provides for up to $ 250.0 million in funding accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program, from time to time.

The Receivables Purchase Agreement was amended in January 2022 to extend the Securitization Program to January 2025 and reduce the available funding capacity from $ 250.0 million to $ 175.0 million.

Such funding is accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program, from time to time.

Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations.

During 2020, the Receivables Purchase Agreement was amended to reduce certain dilutive constraints on eligible receivables and modify the Company’s reporting requirements under the Securitization Program.

Under the terms of the Securitization Program, the Company contributes the trade receivables of its participating subsidiaries on a revolving basis to P&L Receivables, its wholly-owned, bankruptcy-remote subsidiary, which then sells the receivables to unaffiliated banks.

2 unchanged sentences

The borrowings under the Securitization Program bear interest at LIBOR plus 1.5 % per annum and remain outstanding throughout the term of the agreement, subject to the Company maintaining sufficient eligible receivables, by continuing to contribute trade receivables to P&L Receivables, unless an event of default occurs.

At December 31, 2021, the Company had no outstanding borrowings and $ 143.9 million of letters of credit issued under the Securitization Program.

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

Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $ 26.3 million at December 31, 2021.

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

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At December 31, 2020, the Company had no outstanding borrowings and $ 112.3 million of letters of credit issued under the Securitization Program.

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

Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $ 19.3 million at December 31, 2020.

The Company had no collateral posted under the Securitization Program at either December 31, 2020 or 2019.

The Company incurred interest and fees associated with the Securitization Program of $ 2.9 million, $ 2.6 million and $ 3.3 million during the years ended December 31, 2021, 2020 and 2019, respectively, which have been recorded as “Interest expense” in the accompanying statements of operations.

Collateralized Letter of Credit Agreement

In February 2022, the Company entered into a new agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit in support of reclamation bonding.

The agreement requires the Company to provide cash collateral at a level of 103% of the aggregate amount of letters of credit outstanding under the arrangement (limited to $5.0 million total excess collateralization.) Outstanding letters of credit bear a fixed fee in the amount of 0.75% per annum.

The Company receives a deposit rate of 0.25% per annum on the amount of cash collateral posted in support of letters of credit, with the rate subject to increases over time.

The agreement has an initial expiration date of December 31, 2025.

Cash Collateral Arrangements and Restricted Cash

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

The Company had no such cash collateral or restricted cash requirements as of either December 31, 2020 or 2019.

The Company had $ 323.1 million held by third parties related to such obligations at December 31, 2017.

All such collateral was returned to the Company during the year ended December 31, 2018, largely as the result of replacing collateral balances with third-party surety bonding in Australia.

The Company had no such cash collateral or restricted cash requirements as of December 31, 2021, 2020, and 2019.

The Company is the lessee under numerous equipment and property leases.

3 unchanged sentences

In this regard, the Company recorded provisions of $ 0.3 million and $ 50.4 million during the years ended December 31, 2019 and 2018, respectively, for the loss of leased equipment at the North Goonyella Mine as described in Note 20.

In this regard, the Company recorded a provision of $ 0.3 million during the year ended December 31, 2019, for the loss of leased equipment at the North Goonyella Mine as described in Note 19.

“Other Events.”

4 unchanged sentences

Unconditional Purchase Obligations

As of December 31, 2020, purchase commitments for capital expenditures were $ 37.0 million, all of which is obligated in the next five years, with $ 29.3 million obligated within the next 12 months.

As of December 31, 2021, purchase commitments for capital expenditures were $ 32.9 million, all of which is obligated within the next four years, with $ 24.9 million obligated within the next 12 months.

In Australia, the Company has generally secured the ability to transport coal through rail contracts and ownership interests in five east coast coal export terminals that are primarily funded through take-or-pay arrangements with terms ranging up to 21 years.

11 unchanged sentences

Securities Class Action.

On September 28, 2020, the Oklahoma Firefighters Pension and Retirement System brought a securities lawsuit against the Company and certain of its officers in the U.S.

District Court for the Southern District of New York on behalf of a putative class of shareholders (Plaintiffs) who purchased Company stock between April 3, 2017, and October 28, 2019 (Class Period), for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (Securities Class Action).

Plaintiffs allege that defendants made false or misleading statements and/or failed to disclose certain adverse facts pertaining to safety practices at the Company’s North Goonyella Mine and that, after a September 28, 2018 fire at the mine, made false or misleading statements and/or failed to disclose certain adverse facts pertaining to the feasibility of the Company’s plan to restart the mine after the fire.

On September 28, 2020, the Oklahoma Firefighters Pension and Retirement System brought a lawsuit, styled In Re Peabody Energy Corporation Securities Litigation No.

1:20-cv-08024 (PKC), against the Company and certain of its officers in the U.S.

District Court for the Southern District of New York (the Court) on behalf of a putative class of shareholders (Plaintiffs) who held Company stock between April 3, 2017 and October 28, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (Securities Class Action).

Plaintiffs allege that the defendants made false or misleading statements and/or failed to disclose certain adverse facts pertaining to safety practices at the Company’s North Goonyella Mine and the events leading up to a fire at the mine, and that, after a September 28, 2018 fire at the mine, made false or misleading statements and/or failed to disclose certain adverse facts pertaining to the feasibility of the Company’s plan to restart the mine after the fire.

The Company believes the lawsuit lacks merit and intends to vigorously defend against the allegations.

On January 12, 2021, the Court appointed Oregon Public Employees Retirement Fund as lead plaintiff.

On January 12, 2021, the Court appointed the Oregon Public Employees Retirement Fund as lead plaintiff.

On January 25, 2021, the Court entered a scheduling order for this matter.

Plaintiffs must file their amended complaint by March 19, 2021.

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

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

Plaintiffs filed their amended complaint on March 19, 2021.

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

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

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

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

Derivative Actions.

On December 22, 2020, a plaintiff, putatively on behalf of the Company, brought a shareholder derivative lawsuit in the United States District Court for the District of Delaware against certain directors and a former officer of the Company, as defendants.

On December 22, 2020, a plaintiff (Phelps), putatively on behalf of the Company, brought a shareholder derivative lawsuit, styled Phelps v.

Samantha Algaze, et al.

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

22, 2020), in the U.S.

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

The Company was also named as a nominal defendant.

Plaintiff did not make a demand on the Company’s board before instituting the lawsuit, and alleges such demand would have been futile.

In the complaint, Plaintiff alleges that defendants allegedly failed to disclose adverse facts relating to the safety practices at the Company’s North Goonyella mine, thereby leading to a September 28, 2018 fire, and allegedly failed to disclose adverse facts pertaining to the feasibility of reopening the mine.

The plaintiff did not make a demand on the Company’s board before instituting the lawsuit and alleges such demand would have been futile.

In the complaint, the plaintiff alleges that the defendants failed to disclose adverse facts relating to the safety practices at the Company’s North Goonyella Mine, thereby leading to a September 28, 2018 fire, and allegedly failed to disclose adverse facts pertaining to the feasibility of reopening the mine.

The derivative complaint alleges (i) contribution against certain current and former officers for securities fraud based on the Securities Class Action, and against all defendants, (ii) breach of fiduciary duties, (iii) waste of corporate assets for causing the Company to incur legal liability and (iv) unjust enrichment.

On February 10, 2021, a second plaintiff, putatively on behalf of the Company, filed a similar shareholder derivative lawsuit in the United States District Court for the District of Delaware against the directors, two current officers and a former officer of the Company, as defendants.

On February 10, 2021, a second plaintiff (Di Fusco), putatively on behalf of the Company, filed a similar shareholder derivative lawsuit, styled Di Fusco v.

Glenn Kellow, et al.

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

10, 2021), in the U.S.

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

The Company was named as a nominal defendant.

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

The Company believes both lawsuits lack merit and intends 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.

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.

2 unchanged sentences

(24) Segment and Geographic Information

During the year ended December 31, 2019, the Cottage Grove and Kayenta Mines closed, and the Company announced the planned closures of the Wildcat HiIls Underground and Somerville Central Mines.

Due to these changes, the Company revised its reportable segments beginning in the first quarter of 2020 to reflect the manner in which the chief operating decision maker (CODM) views the Company’s businesses going forward for purposes of reviewing performance, allocating resources and assessing future prospects and strategic execution.

The Company now reports its results of operations primarily through the following reportable segments:

The Company reports its results of operations primarily through the following reportable segments:

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

Thermal Mining and Corporate and Other.

Prior period results have been recast for comparability.

Peabody Energy Corporation 2021 Form 10-K

9 unchanged sentences

The mines in that segment utilize both surface and underground extraction processes to mine low-sulfur, high Btu thermal coal.

The Company’s Seaborne Metallurgical Mining operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama.

The mines in that segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal (low-sulfur, high Btu coal).

The Company’s Seaborne Metallurgical Mining operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama, USA.

The mines in that segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal.

The metallurgical coal qualities include hard coking coal, semi-hard coking coal, semi-soft coking coal and pulverized coal injection coal.

9 unchanged sentences

Thermal Mining operations mine both bituminous and sub-bituminous coal deposits.

The Company’s Corporate and Other segment includes selling and administrative expenses, including its technical and shared services functions;

results from equity affiliates;

corporate hedging activities;

trading and brokerage activities;

results from certain mining and export/transportation joint ventures;

minimum charges on certain transportation-related contracts;

the closure of inactive mining sites;

and certain commercial matters.

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

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

The Company’s Corporate and Other segment includes selling and administrative expenses, results from equity affiliates, corporate hedging activities, trading and brokerage activities, minimum charges on certain transportation-related contracts, the closure of inactive mining sites and certain commercial matters.

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

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

Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance, as displayed in the reconciliation below.

The Company has retrospectively modified its calculation of Adjusted EBITDA to exclude restructuring charges and transaction costs related to business combinations and joint ventures as management does not view these items as part of its normal operations.

Management believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt.

10 unchanged sentences

88.6 25.1 41.4 24.2 3.8 183.1

Loss from equity affiliates — — — — 60.1 60.1

Income from equity affiliates — — — — ( 82.1 ) ( 82.1 )

Peabody Energy Corporation 2021 Form 10-K

10 unchanged sentences

100.7 50.8 13.2 23.3 3.4 191.4

Income from equity affiliates

— — — — ( 3.4 ) ( 3.4 )

Loss from equity affiliates — — — — 60.1 60.1

Segment results for the year ended December 31, 2019 were as follows:

7 unchanged sentences

42.1 143.4 42.8 54.0 3.1 285.4

Federal coal lease expenditures — — — 0.5 — 0.5

Income from equity affiliates

29 unchanged sentences

1,610.9 2,776.9 291.3 4,679.1

Operating lease right-of-use assets 32.1 30.3 20.0 82.4

Peabody Energy Corporation 2021 Form 10-K

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

Year Ended December 31,

1 unchanged sentence

(Dollars in millions)

(Loss) income from continuing operations, net of income taxes $ ( 1,859.8 ) $ ( 188.3 ) $ 645.7

Income (loss) from continuing operations, net of income taxes $ 347.4 $ ( 1,859.8 ) $ ( 188.3 )

Depreciation, depletion and amortization 308.7 346.0 601.0

1 unchanged sentence

Restructuring charges 8.3 37.9 24.3

Transaction costs related to business combinations and joint ventures 23.1 21.6 7.4

Transaction costs related to joint ventures — 23.1 21.6

Gain on formation of United Wambo Joint Venture — — ( 48.1 )

4 unchanged sentences

Interest expense 183.4 139.8 144.0

Net (gain) loss on early debt extinguishment ( 33.2 ) — 0.2

Interest income ( 6.5 ) ( 9.4 ) ( 27.0 )

1 unchanged sentence

( 43.4 ) ( 5.1 ) 67.4

Reorganization items, net — — ( 12.8 )

Unrealized losses (gains) on economic hedges 29.6 ( 42.2 ) ( 18.3 )

Unrealized (gains) losses on non-coal trading derivative contracts ( 7.1 ) ( 1.2 ) 0.7

Unrealized losses (gains) on derivative contracts related to forecasted sales 115.1 29.6 ( 42.2 )

Unrealized losses (gains) on foreign currency option contracts 7.5 ( 7.1 ) ( 1.2 )

Take-or-pay contract-based intangible recognition ( 4.3 ) ( 8.2 ) ( 16.6 )

9 unchanged sentences

45.5 % 56.2 % 53.6 %

Japan 13.3 % 15.4 % 10.1 %

Taiwan 14.4 % 7.7 % 6.0 %

Japan 14.2 % 13.3 % 15.4 %

Australia 7.7 % 6.9 % 5.8 %

China 3.8 % 3.8 % 5.9 %

India 5.4 % 2.6 % 1.2 %

Indonesia 3.0 % 0.2 % 0.5 %

Vietnam 2.0 % 2.4 % 2.0 %

South Korea 1.4 % 0.8 % 2.9 %

China — % 3.8 % 3.8 %

Other 6.4 % 6.1 % 8.8 %

19 unchanged sentences

Reserve for materials and supplies 7.9 3.5 ( 1.0 ) — 10.4

Allowance for credit losses 4.4 ( 4.4 ) — — —

Tax valuation allowances 2,068.4 373.2 — ( 154.3 ) (2) 2,287.3

7 unchanged sentences

(2) Includes the impact of a decrease in Australia NOLs due to a cancellation of intercompany debt, partially offset by the impact of the increase in the Australian dollar exchange rates.

(3) Includes the impact of the decrease in Australian dollar exchange rates, partially offset by the impact of final attribute reduction adjustments in the U.S.

Peabody Energy Corporation 2021 Form 10-K

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures