What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 210 added, 162 removed, 689 unchanged (35% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

11 unchanged sentences

Net gain on disposals ( 5.0 ) ( 25.8 ) ( 22.7 ) ( 28.2 )

(Income) loss from equity affiliates ( 48.7 ) 3.5 ( 93.4 ) 4.4

Asset impairment 1.7 — 1.7 —

Income from equity affiliates ( 27.5 ) ( 15.8 ) ( 120.9 ) ( 11.4 )

Operating profit (loss) 420.5 ( 43.8 ) 799.2 ( 88.8 )

6 unchanged sentences

Income (loss) from continuing operations, net of income taxes 384.4 ( 59.6 ) 675.9 ( 160.3 )

Loss from discontinued operations, net of income taxes ( 0.7 ) ( 2.3 ) ( 1.5 ) ( 4.3 )

(Loss) income from discontinued operations, net of income taxes ( 0.8 ) 24.3 ( 2.3 ) 20.0

Net income (loss) 383.6 ( 35.3 ) 673.6 ( 140.3 )

10 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(Amounts in millions, except per share data)

1 unchanged sentence

Cash and cash equivalents $ 1,354.5 $ 954.3

Accounts receivable, net of allowance for credit losses of $ 0.0 at June 30, 2022 and December 31, 2021

Accounts receivable, net of allowance for credit losses of $ 0.0 at September 30, 2022 and December 31, 2021

Inventories, net 277.4 226.7

19 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

100.0 shares authorized, no shares issued or outstanding as of June 30, 2022 and December 31, 2021

100.0 shares authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021

Series Common Stock — $ 0.01 per share par value;

50.0 shares authorized, no shares issued or outstanding as of June 30, 2022 and December 31, 2021

50.0 shares authorized, no shares issued or outstanding as of September 30, 2022 and December 31, 2021

Common Stock — $ 0.01 per share par value;

450.0 shares authorized, 187.1 shares issued and 143.9 shares outstanding as of June 30, 2022 and 176.3 shares issued and 133.3 shares outstanding as of December 31, 2021

450.0 shares authorized, 187.1 shares issued and 143.9 shares outstanding as of September 30, 2022 and 176.3 shares issued and 133.3 shares outstanding as of December 31, 2021

Additional paid-in capital 3,974.1 3,745.6

Treasury stock, at cost — 43.2 and 43.0 common shares as of June 30, 2022 and December 31, 2021

Treasury stock, at cost — 43.2 and 43.0 common shares as of September 30, 2022 and December 31, 2021

( 1,372.9 ) ( 1,370.3 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended

September 30,

(Dollars in millions)

1 unchanged sentence

Net income (loss) $ 673.6 $ ( 140.3 )

Loss from discontinued operations, net of income taxes 1.5 4.3

Loss (income) from discontinued operations, net of income taxes 2.3 ( 20.0 )

Income (loss) from continuing operations, net of income taxes 675.9 ( 160.3 )

4 unchanged sentences

Noncash share-based compensation 6.6 5.6

Asset impairment 1.7 —

Net gain on disposals ( 22.7 ) ( 28.2 )

Net loss (gain) on early debt extinguishment 34.5 ( 31.3 )

(Income) loss from equity affiliates ( 93.4 ) 4.4

Income from equity affiliates ( 120.9 ) ( 11.4 )

Foreign currency option contracts 4.4 5.3

10 unchanged sentences

Other, net 3.5 0.2

Net cash provided by (used in) continuing operations 12.1 ( 18.0 )

Net cash provided by continuing operations 508.9 0.5

Net cash used in discontinued operations ( 4.8 ) ( 18.9 )

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Six Months Ended June 30,

Nine Months Ended

September 30,

(Dollars in millions)

16 unchanged sentences

Distributions to noncontrolling interests ( 17.5 ) ( 3.9 )

Net cash provided by (used in) financing activities 75.1 ( 41.9 )

Net cash (used in) provided by financing activities ( 120.5 ) 15.9

Net change in cash, cash equivalents and restricted cash 444.7 ( 122.2 )

2 unchanged sentences

$ 1,399.0 $ 587.0

(1) The following table provides a reconciliation of “Cash, cash equivalents and restricted cash at end of period” at June 30, 2022

(1) The following table provides a reconciliation of “Cash, cash equivalents and restricted cash at end of period” at September 30, 2022

Cash and cash equivalents $ 1,354.5

4 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

43 unchanged sentences

Balance sheet information presented herein as of December 31, 2021 has been derived from the Company’s audited consolidated balance sheet at that date.

The Company’s results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2022.

The Company’s results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2022.

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

30 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

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

9 unchanged sentences

Revenue $ 353.2 $ 310.7 $ 290.5 $ 261.4 $ 126.7 $ 1,342.5

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

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

11 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

9 unchanged sentences

Revenue $ 959.3 $ 1,165.8 $ 771.4 $ 689.4 $ ( 230.1 ) $ 3,355.8

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

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

10 unchanged sentences

(1) Corporate and Other includes the following:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

(Dollars in millions)

Unrealized loss on derivative contracts related to forecasted sales $ ( 24.5 ) $ ( 23.7 ) $ ( 325.5 ) $ ( 25.6 )

Realized loss on derivative contracts related to forecasted sales ( 122.6 ) ( 7.1 ) ( 190.6 ) ( 15.0 )

Unrealized gains (losses) on derivative contracts related to forecasted sales $ 90.4 $ ( 238.4 ) $ ( 235.1 ) $ ( 264.0 )

Realized losses on derivative contracts related to forecasted sales ( 117.4 ) ( 13.1 ) ( 308.0 ) ( 28.1 )

Revenue from physical sale of coal (3)

3 unchanged sentences

Total Corporate and Other $ 126.7 $ ( 192.9 ) $ ( 230.1 ) $ ( 185.6 )

(2) Other includes revenue 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.

(3) Includes revenues recognized upon the physical sale of coal purchased from the Company’s operating segments, and sold to customers through the Company’s coal trading business as part of settling certain derivative contracts.

(2) Includes revenue 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.

(3) Includes revenue recognized upon the physical sale of coal purchased from the Company’s operating segments and sold to customers through the Company’s coal trading business as part of settling certain derivative contracts.

Primarily represents the difference between the price contracted with the customer and the price allocated to the operating segment.

2 unchanged sentences

Accounts Receivable

“Accounts receivable, net” at June 30, 2022 and December 31, 2021 consisted of the following:

June 30, 2022 December 31, 2021

“Accounts receivable, net” at September 30, 2022 and December 31, 2021 consisted of the following:

September 30, 2022 December 31, 2021

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 426.4 $ 350.5

None of the above receivables included allowances for credit losses at June 30, 2022 or December 31, 2021.

No charges for credit losses were recognized during the three and six months ended June 30, 2022 or 2021.

None of the above receivables included allowances for credit losses at September 30, 2022 or December 31, 2021.

No charges for credit losses were recognized during the three and nine months ended September 30, 2022 or 2021.

(4) Inventories

“ Inventories, net” as of June 30, 2022 and December 31, 2021 consisted of the following:

June 30, 2022 December 31, 2021

“ Inventories, net” as of September 30, 2022 and December 31, 2021 consisted of the following:

September 30, 2022 December 31, 2021

(Dollars in millions)

3 unchanged sentences

Inventories, net $ 277.4 $ 226.7

Materials and supplies inventories, net presented above have been shown net of reserves of $ 8.2 million and $ 9.0 million as of June 30, 2022 and December 31, 2021.

Materials and supplies inventories, net presented above have been shown net of reserves of $ 7.6 million and $ 9.0 million as of September 30, 2022 and December 31, 2021.

(5) Equity Method Investments

The Company had total equity method investments and financing receivables of $ 12.3 million and $ 62.2 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively, related to Middlemount Coal Pty Ltd (Middlemount).

Included in “(Income) loss from equity affiliates” in the unaudited condensed consolidated statements of operations was income related to Middlemount of $ 49.5 million and $ 95.2 million during the three and six months ended June 30, 2022, respectively, and losses of $ 3.5 million and $ 4.4 million during the three and six months ended June 30, 2021, respectively.

The Company received cash payments from Middlemount of $ 143.2 million and $ 2.3 million during the six months ended June 30, 2022 and 2021, respectively.

The Company had total equity method investments and financing receivables of $ 32.8 million and $ 62.2 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively, related to Middlemount Coal Pty Ltd (Middlemount).

Included in “Income from equity affiliates” in the unaudited condensed consolidated statements of operations was income related to Middlemount of $ 28.4 million and $ 15.8 million during the three months ended September 30, 2022 and 2021, respectively, and $ 123.6 million and $ 11.4 million during the nine months ended September 30, 2022 and 2021, respectively.

The Company received cash payments from Middlemount of $ 151.5 million and $ 7.6 million during the nine months ended September 30, 2022 and 2021, respectively.

One of the Company’s Australian subsidiaries is party to an agreement to provide a revolving loan to Middlemount.

The Company’s participation in the revolving loan will not, at any time, exceed its 50 % equity interest of the revolving loan limit, which was $ 50 million Australian dolla rs at June 30, 2022.

The Compa ny’s participation in the revolving loan will not, at any time, exceed its 50 % equity interest of the revolving loan limit, which was $ 50 million Australian dollars at September 30, 2022.

The revolving loan bears interest at 10 % per annum and expires on December 31, 2023.

T here was no outstanding revolving loan at June 30, 2022 or December 31, 2021.

There was no outstanding revolving loan at September 30, 2022 or December 31, 2021.

(6) Derivatives and Fair Value Measurements

1 unchanged sentence

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 June 30, 2022.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

The Company had no diesel fuel or interest rate derivatives in place as of September 30, 2022.

Foreign Currency Option Contracts

As of June 30, 2022, the Company had currency options outstanding with an aggregate notional amount of $ 758.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending March 31, 2023.

As of September 30, 2022, the Company had currency options outstanding with an aggregate notional amount of $ 855.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending June 30, 2023.

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 $ 0.74 to $ 0.80 over the nine-month period ending March 31, 2023.

dollar exchange rate exceed amounts ranging from $ 0.70 to $ 0.80 over the nine-month period ending June 30, 2023.

Derivative Contracts Related to Forecasted Sales

As of June 30, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 1.0 million tonnes.

As of September 30, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 1.0 million tonnes.

Such financial contracts may include futures, forwards and options.

Included in this total are 0.9 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, 0.4 million tonnes will settle in 2022 and 0.5 million tonnes will settle in 2023 at expected average pricing of approximately $ 84 per tonne (Newcastle index).

Of this total, 0.3 million tonnes will settle in 2022 and 0.6 million tonnes will settle in 2023.

The remaining 0.1 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.

During the three months ended June 30, 2022, the Company recorded a net unrealized mark-to-market loss of $ 24.5 million on these coal derivative contracts, which includes approximately $ 40 million of unrealized mark-to-market losses on financial derivatives and approximately $ 15 million of unrealized mark-to-market gains on physical forward sales contracts.

During the six months ended June 30, 2022, the Company recorded a net unrealized mark-to-market loss of $ 325.5 million on these coal derivative contracts, which includes approximately $ 306 million of unrealized mark-to-market losses on financial derivatives and approximately $ 20 million of unrealized mark-to-market losses on physical forward sales contracts.

During the three months ended September 30, 2022, the Company recorded a net unrealized mark-to-market gain of $ 90.4 million on these coal derivative contracts, which includes approximately $ 49 million of unrealized mark-to-market gains on financial derivatives and approximately $ 41 million of unrealized mark-to-market gains on physical forward sales contracts.

During the nine months ended September 30, 2022, the Company recorded a net unrealized mark-to-market loss of $ 235.1 million on these coal derivative contracts, which includes approximately $ 257 million of unrealized mark-to-market losses on financial derivatives and approximately $ 22 million of unrealized mark-to-market gains on physical forward sales contracts.

Financial Trading Contracts

1 unchanged sentence

Such financial contracts may include futures, forwards and options.

The Company held nominal financial trading contracts as of June 30, 2022.

The Company held nominal financial trading contracts as of September 30, 2022.

Tabular Derivatives Disclosures

3 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Asset Derivative Liability Derivative Asset Derivative Liability Derivative

7 unchanged sentences

Net derivatives and variation margin as classified in the balance sheets $ 1.4 $ ( 7.7 ) $ 1.4 $ ( 29.5 )

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 June 30, 2022, the Company had posted $ 544.2 million aggregate margin cash, consisting of $ 427.4 million variation margin cash and $ 116.8 million initial margin.

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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of September 30, 2022, the Company had posted $ 465.9 million aggregate margin cash, consisting of $ 377.8 million variation margin cash and $ 88.1 million initial margin.

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.

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 condensed consolidated balance sheets.

1 unchanged sentence

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

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

Three Months Ended June 30, 2022

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

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

Three Months Ended September 30, 2022

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

Derivative Instrument Classification

4 unchanged sentences

Total $ ( 29.7 ) $ ( 118.5 ) $ 88.8

Three Months Ended June 30, 2021 (1)

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

Three Months Ended September 30, 2021

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

Derivative Instrument Classification

6 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

5 unchanged sentences

Total $ ( 540.6 ) $ ( 311.2 ) $ ( 229.4 )

Six Months Ended June 30, 2021 (1)

Nine Months Ended September 30, 2021

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

5 unchanged sentences

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

(1) ‘Results realized in income on derivatives’ has been revised to exclude revenue from the physical sale of coal by the Company’s trading and brokerage function of $ 23.2 million and $ 41.1 million for the three and six months ended June 30, 2021, respectively, to be comparable to the presentation of the 2022 amounts.

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

9 unchanged sentences

Variation margin cash associated with the derivative balances is excluded from this table.

June 30, 2022

September 30, 2022

Level 1 Level 2 Level 3 Total

20 unchanged sentences

Other Financial Instruments .

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of June 30, 2022 and December 31, 2021:

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of September 30, 2022 and December 31, 2021:

• Cash and cash equivalents, restricted cash, 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.

4 unchanged sentences

The fair value of debt, shown below, is principally based on reported market values and estimates based on interest rates, maturities, credit risk, underlying collateral and completed market transactions.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(Dollars in millions)

13 unchanged sentences

therefore, a change in one unobservable input would not necessarily correspond with a change in another unobservable input.

The Company had no transfers between Levels 1, 2 and 3 during the three and six months ended June 30, 2022 and 2021.

The Company had no transfers between Levels 1, 2 and 3 during the three and nine months ended September 30, 2022 and 2021.

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

The Company recorded an impairment loss of $ 1.7 million related to its Level 3 investment in equity securities during the three months ended September 30, 2022.

(7) Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of June 30, 2022 and December 31, 2021 is set forth in the table below:

June 30, 2022 December 31, 2021

The composition of property, plant, equipment and mine development, net, as of September 30, 2022 and December 31, 2021 is set forth in the table below:

September 30, 2022 December 31, 2021

(Dollars in millions)

5 unchanged sentences

Asset Impairment and Other At-Risk Assets

The Company has identified certain assets with an aggregate carrying value of approximately $ 0.5 billion at June 30, 2022 in its Other U.S.

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

The Company conducted a review of those assets as of June 30, 2022 and determined that no impairment charges were necessary as of that date.

The Company has identified certain assets with an aggregate carrying value of $ 209.2 million at September 30, 2022 in its Other U.S.

Thermal Mining segment whose recoverability is most sensitive to customer demand, customer concentration risk and future economic viability.

The Company conducted a review of those assets as of September 30, 2022 and determined that no impairment charges were necessary as of that date.

PEABODY ENERGY CORPORATION

1 unchanged sentence

(8) Income Taxes

The Company's effective tax rate before remeasurement for the six months ended June 30, 2022 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company's effective tax rate before remeasurement for the nine months ended September 30, 2022 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company is expecting to utilize substantial net operating losses in Australia and the U.S.

in 2022 based on estimated pretax income.

The Company’s income tax provision of $ 11.3 million and income tax benefit of $ 4.8 million for the three months ended June 30, 2022 and 2021, respectively, included tax benefits of $ 3.5 million and $ 0.3 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provision of $ 10.3 million and income tax benefit of $ 6.6 million for the six months ended June 30, 2022 and 2021, respectively, included tax benefits of $ 1.9 million and $ 0.5 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provision of $ 10.7 million and income tax benefit of $ 3.7 million for the three months ended September 30, 2022 and 2021, respectively, included tax benefits of $ 1.6 million and $ 1.1 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provision of $ 21.0 million and income tax benefit of $ 10.3 million for the nine months ended September 30, 2022 and 2021, respectively, included tax benefits of $ 3.5 million and $ 1.6 million, respectively, related to the remeasurement of foreign income tax accounts.

(9) Long-term Debt

The Company’s total indebtedness as of June 30, 2022 and December 31, 2021 consisted of the following:

Debt Instrument (defined below, as applicable) June 30, 2022 December 31, 2021

The Company’s total indebtedness as of September 30, 2022 and December 31, 2021 consisted of the following:

Debt Instrument (defined below, as applicable) September 30, 2022 December 31, 2021

(Dollars in millions)

11 unchanged sentences

Long-term debt $ 322.3 $ 1,078.2

2021 Financing Activity and Subsequent Repurchases

(1) The Company has the positive intent and ability to retire additional debt in the next twelve months using working capital.

As such, all debt with the exception of the 2028 Convertible Notes and finance lease obligations was classified within “Current portion of long-term debt” in the accompanying condensed consolidated balance sheets at September 30, 2022.

2021 Financing Activity and Subsequent Debt Repurchases

During the first quarter of 2021, the Company completed a series of financing transactions to provide the Company with maturity extensions and covenant relief, while allowing it to maintain near-term operating liquidity.

These transactions included a senior notes exchange, a revolving credit facility exchange, various amendments to the Company’s existing debt agreements, and a support agreement with the Company’s surety bond providers.

Subsequent to these transactions, the Company completed additional financing transactions which included the implementation of an at-the-market equity offering program pursuant to which the Company sold approximately 24.8 million shares of common stock for net cash proceeds of $ 269.8 million, the retirement of $ 270.9 million principal amount of existing debt through various open market purchases at an aggregate cost of $ 232.4 million, and the issuance of an aggregate 10.0 million shares of common stock in exchange for an additional $ 106.1 million principal amount of existing debt through multiple bilateral transactions with debt holders.

Subsequent to these transactions, the Company completed additional financing transactions during 2021 which included the implementation of an at-the-market equity offering program pursuant to which the Company sold approximately 24.8 million shares of common stock for net cash proceeds of $ 269.8 million, the retirement of $ 270.9 million principal amount of existing debt through various open market purchases at an aggregate cost of $ 232.4 million, and the issuance of an aggregate 10.0 million shares of common stock in exchange for an additional $ 106.1 million principal amount of existing debt through multiple bilateral transactions with debt holders.

PEABODY ENERGY CORPORATION

5 unchanged sentences

The Company’s purchase of the principal and commitment amounts under the Company LC Agreement was effected by the posting of $ 28.5 million of collateral with the administrative agent and did not reduce the availability under the facility.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are also 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 such notes and loans on a pro rata basis, provided that the liquidity attributable to the Wilpinjong Mine would not fall below $ 60.0 million.

During the three months ended September 30, 2022, the Company repurchased $ 48.8 million aggregate principal amount of its Senior Secured Term Loan and 2025 Notes for $ 46.6 million in various open market transactions.

As a result of these repurchases, the Company made a mandatory offer to repurchase $ 12.2 million of priority lien obligations under the Company LC Agreement at 95.57 % on October 17, 2022.

The offer will expire on November 16, 2022.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are also 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 may be applied to the principal of such notes and loans on a pro rata basis, provided that the liquidity attributable to the Wilpinjong Mine 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 required offer to prepay $ 105.6 million of total principal resulted in the prepayment of $ 17.2 million of Co-Issuer Term Loans principal, $ 0.3 million of 2024 Co-Issuer Notes principal, and a related loss on early debt extinguishment of $ 0.5 million during the three months ended March 31, 2022.

Based upon the Wilpinjong Mine’s results for the six-month period ended June 30, 2022, the Company was required to offer to prepay $ 65.1 million of total principal subsequent to June 30, 2022.

The holders of the Co-Issuer Term Loans unanimously declined their $ 37.9 million pro rata portion of the offer and the $ 27.2 million pro rata portion of the offer to the holders of the 2024 Co-Issuer Notes will expire on August 29, 2022.

Voluntary repurchases of Co-Issuer Term Loans are permissible through a modified Dutch auction process.

During the three months ended June 30, 2022, the Company solicited bids under such process from all holders of Co-Issuer Term Loans for the repurchase of up to $ 50.0 million principal amount at prices acceptable to the Company.

The auction process resulted in the repurchase of $ 50.0 million principal amount at a weighted average price of 103.91 %, or $ 52.0 million.

The Company recorded a related loss on early debt extinguishment of $ 3.3 million during the three months ended June 30, 2022.

Additionally, the indenture which governs the 2024 Co-Issuer Notes requires that, within 30 business days following a repurchase of the Co-Issuer Term Loans such as that undertaken through the auction process described above, the Company must also offer to repurchase an equivalent principal amount of the 2024 Co-Issuer Notes at the equivalent purchase price.

As such, the required offer for $ 50.0 million aggregate principal amount was made by the Company on May 26, 2022 and subsequently increased to $ 93.9 million, at the Company’s discretion, subsequent to June 30, 2022.

Prior to expiration of the offer, an excess aggregate principal amount of 2024 Co-Issuer Notes had been validly tendered, but the terms of the offer limited the repurchase to $ 93.9 million.

Such amount was classified within “Current portion of long-term debt” in the accompanying condensed consolidated balance sheets at June 30, 2022.

The Company completed the repurchase on July 25, 2022 for $ 97.5 million.

The credit agreement which governs the Co-Issuer Term Loans requires parity between the holders of Co-Issuer Term Loans and holders of the 2024 Co-Issuer Notes with respect to repurchase offers.

Accordingly, the discretionary increase to the 2024 Co-Issuer Notes repurchase offer compelled the Company to offer to repurchase an additional $ 43.9 million of aggregate principal amount of Co-Issuer Term Loans at 103.91 % subsequent to June 30, 2022.

The offer will expire August 22, 2022.

Such amount was classified within “Current portion of long-term debt” in the accompanying condensed consolidated balance sheets at June 30, 2022.

Prior to June 30, 2022, the Company reached agreements to repurchase $ 22.6 million aggregate principal amount of its Senior Secured Term Loan for $ 21.3 million in open market transactions.

The repurchases settled subsequent to June 30, 2022, and the aggregate principal amount was classified within “Current portion of long-term debt” in the accompanying condensed consolidated balance sheets at June 30, 2022.

As a result of these repurchases, the Company will offer to repurchase $ 5.7 million of priority lien obligations under the Company LC Agreement at approximately 94% during the three months ending December 31, 2022.

Based upon the Wilpinjong Mine’s results for the six-month period ended December 31, 2021, a required offer to prepay $ 105.6 million of total principal resulted in the prepayment of $ 17.2 million of Co-Issuer Term Loans principal and $ 0.3 million of 2024 Co-Issuer Notes principal during the three months ended March 31, 2022.

Based upon the Wilpinjong Mine’s results for the six-month period ended June 30, 2022, the Company offered to prepay $ 65.1 million of total principal at 103.91 % during the three months ended September 30, 2022.

The holders of the Co-Issuer Term Loans unanimously declined their $ 37.9 million pro rata portion of the offer and the holders of the 2024 Co-Issuer Notes tendered for prepayment $ 18.2 million principal amount of their $ 27.2 million pro rata portion of the offer.

The Company completed the prepayment during the three months ended September 30, 2022.

Voluntary repurchases of Co-Issuer Term Loans are permissible through various methods, including a modified Dutch auction process in which the Company may solicit acceptable prices from holders.

During the three months ended June 30, 2022, the Company solicited bids from all holders of Co-Issuer Term Loans for the repurchase of up to $ 50.0 million principal amount, resulting in that full amount of principal being repurchased at a weighted average price of 103.91 %, or $ 52.0 million in total.

During the three months ended September 30, 2022, the Company solicited bids from all holders of Co-Issuer Term Loans for the repurchase of up to $ 75.0 million principal amount, resulting in $ 20.4 million of principal being repurchased at a weighted average price of 105.91 %, or $ 21.6 million in total.

The indenture which governs the 2024 Co-Issuer Notes requires that, within 30 business days following a repurchase of the Co-Issuer Term Loans such as that undertaken through the auction processes described above, the Company must also offer to repurchase an equivalent principal amount of the 2024 Co-Issuer Notes at the equivalent purchase price.

Further, the credit agreement which governs the Co-Issuer Term Loans requires parity between the holders of Co-Issuer Term Loans and holders of the 2024 Co-Issuer Notes with respect to repurchase offers.

As a result of the modified Dutch auction process completed during the three months ended June 30, 2022, the required equivalent offer to purchase $ 50.0 million aggregate principal amount of 2024 Co-Issuer Notes was made by the Company on May 26, 2022 and was subsequently increased to $ 93.9 million, at the Company’s discretion.

The offer was fully tendered and the Company completed the repurchase on July 25, 2022 for $ 97.5 million.

The discretionary increase to the 2024 Co-Issuer Notes repurchase offer compelled the Company to offer to repurchase an additional $ 43.9 million principal amount of Co-Issuer Term Loans at 103.91 % which resulted in the valid tender and purchase of $ 3.8 million principal for $ 4.0 million during the three months ended September 30, 2022.

As a result of the modified Dutch auction process completed during the three months ended September 30, 2022, the Company offered to repurchase the outstanding $ 81.6 million principal amount of 2024 Co-Issuer Notes at 105.91 % on September 19, 2022, which exceeded the required offer amount.

To maintain parity with respect to the holders of the Co-Issuer Term Loans, the Company simultaneously offered to repurchase $ 61.2 million principal amount of Co-Issuer Term Loans at 105.91 %.

Both offers will expire on November 18, 2022.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s various debt repurchases during 2022 resulted in the realization of net losses from early debt extinguishment of $ 8.7 million and $ 11.5 million during the three months and nine months ended September 30, 2022, respectively.

3.250 % Convertible Senior Notes due 2028

5 unchanged sentences

The 2028 Convertible Notes will bear interest from March 1, 2022 at a rate of 3.250 % per year payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022.

The 2028 Convertible Notes will be convertible at the option of the holders only in the following circumstances:

The 2028 Convertible Notes are convertible at the option of the holders only in the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ended June 30, 2022, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

18 unchanged sentences

On March 7, 2022, the Company entered into a credit agreement, by and among the Company, as borrower, Goldman Sachs Lending Partners LLC, as administrative agent, and the lenders party thereto (the Credit Agreement).

The Credit Agreement provides for a $ 150 million unsecured revolving credit facility (the Revolving Facility), which will mature on April 1, 2025 and bears interest at a rate of 10.0 % per annum on drawn amounts.

The Revolving Facility is intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the Company’s coal derivative contracts, which fluctuate depending upon underlying market coal prices.

The Credit Agreement provided for a $ 150 million unsecured revolving credit facility (the Revolving Facility), was scheduled to mature on April 1, 2025 and bore interest at a rate of 10.0 % per annum on drawn amounts.

The Revolving Facility was intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the Company’s coal derivative contracts, which fluctuate depending upon underlying market coal prices.

Concurrently with the Credit Agreement, the Company entered into an agreement with Goldman Sachs & Company LLC to act as sales agent for at-the-market equity offerings of up to $ 225.0 million of the Company’s common stock.

During the three months ended March 31, 2022, the Company borrowed and repaid $ 225.0 million under the Revolving Facility using net proceeds of $ 222.0 million from at-the-market issuances of 10.1 million shares of common stock and available cash.

The Company had no outstanding borrowings and no availability under the Revolving Facility at June 30, 2022.

The Company issued a notice to terminate the facility on August 1, 2022 with an effective date of August 4, 2022.

The Credit Agreement contains customary covenants that, among other things, limit the Company’s and its 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.

Borrowings under the Revolving Facility are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by substantially all of the Company’s material domestic subsidiaries (excluding any unrestricted subsidiaries).

The Company made no additional borrowings and terminated the facility on August 4, 2022.

Retirement of 2022 Notes

3 unchanged sentences

Additionally, the table sets forth the amount of cash paid for interest and the amount of non-cash interest expense primarily related to the amortization of debt issuance costs.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Non-cash interest expense $ 4.6 $ 4.9 $ 13.6 $ 15.2

The Senior Secured Term Loan is the Company’s only outstanding variable rate debt, which bore interest at LIBOR plus 2.75 % per annum ( 4.37 %) at June 30, 2022.

The Senior Secured Term Loan is the Company’s only outstanding variable rate debt, which bore interest at LIBOR plus 2.75 % per annum ( 5.83 %) at September 30, 2022.

The rate increased to 6.33 % on October 26, 2022.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt agreements at June 30, 2022, including the minimum aggregate liquidity requirement under the Company LC Agreement which requires the Company’s restricted subsidiaries to maintain minimum aggregate liquidity of $ 125.0 million at the end of each quarter through December 31, 2024.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company was compliant with all relevant covenants under its debt agreements at September 30, 2022, including the minimum aggregate liquidity requirement under the Company LC Agreement which requires the Company’s restricted subsidiaries to maintain minimum aggregate liquidity of $ 125.0 million at the end of each quarter through December 31, 2024.

(10) Pension and Postretirement Benefit Costs

The components of net periodic pension and postretirement benefit costs, excluding the service cost for benefits earned, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net periodic pension credit included the following components:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

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

As of June 30, 2022, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

As of September 30, 2022, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

The Company is not required to make any contributions to its qualified pension plans in 2022 based on minimum funding requirements and does not expect to make any discretionary contributions in 2022 at this time.

In March 2022, Peabody Investments Corp., a wholly owned subsidiary of the Company, entered into a commitment agreement relating to the Peabody Investments Corp.

Retirement Plan (the Plan) with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Plan.

Under the commitment agreement, the Plan purchased a group annuity contract (Group Annuity Contract) from Prudential for approximately $ 500 million and Prudential will reimburse the Plan for future benefit payments to be made to the Plan’s participants.

Under the terms of this transaction, the Plan will continue to administer and pay the retirement benefits of Plan participants but will be reimbursed by Prudential for the payment of all benefits covered by the Group Annuity Contract.

The purchase of the Group Annuity Contract was funded directly by the Plan’s assets.

There will be no impact on the monthly retirement benefits paid to Plan participants.

In addition, there will be no material impact on discretionary contributions for the Plan in 2022 or on the Company’s earnings in 2022 as a result of this transaction.

In May 2022, the Board of Directors of Peabody Investments Corp.

approved commencing a standard Employee Retirement Income Security Act plan termination with an effective date of plan termination of July 31, 2022.

In June 2022, the Plan’s participants were notified of the plan termination.

In March 2022, Peabody Investments Corp.

(PIC), a wholly-owned subsidiary of PEC, entered into a commitment agreement relating to the Peabody Investments Corp.

Retirement Plan (the Peabody Retirement Plan) with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Peabody Retirement Plan.

Under the commitment agreement, the Peabody Retirement Plan purchased a group annuity contract (GAC) from Prudential for approximately $ 500 million and Prudential will reimburse the Peabody Retirement Plan for benefit payments to be made to the Peabody Retirement Plan’s participants.

The Peabody Retirement Plan continues to administer and pay the retirement benefits of Peabody Retirement Plan participants and is reimbursed by Prudential for the payment of all benefits covered by the GAC.

The purchase of the GAC was funded directly by the Peabody Retirement Plan’s assets.

There will be no impact on the monthly retirement benefits paid to Peabody Retirement Plan participants and no material impact on contributions for the Peabody Retirement Plan in 2022 as a result of this transaction.

In May 2022, the Board of Directors of PIC approved the termination of the Peabody Retirement Plan effective July 31, 2022.

In June 2022, the Peabody Retirement Plan’s participants were notified of the Peabody Retirement Plan termination and the Peabody Retirement Plan filed an application with the Internal Revenue Service to request a determination as to the qualified status under §401(a) of the Internal Revenue Code of 1986 with respect to the amendment and termination of the Peabody Retirement Plan.

Once all regulatory approvals are received, benefits will be distributed to participants or transferred to an insurance company.

Anticipated asset distribution, via voluntary lump sum payouts for active and deferred participants, is expected in the first half of 2023, following which participants not electing a lump sum and all participants in payment status will be transferred to a highly qualified insurance company.

Net periodic postretirement benefit credit included the following components:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

8 unchanged sentences

The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings.

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

The Company does not expect to make any discretionary contributions to the VEBA trust in 2022 and plans to utilize a portion of VEBA assets to make certain benefit payments.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Company does not expect to make any discretionary contributions to the VEBA trust in 2022 and plans to utilize a portion of VEBA assets to make certain benefit payments.

(11) Earnings per Share (EPS)

10 unchanged sentences

In periods where the potentially dilutive common stock is included in the computation of diluted EPS, the numerator will be adjusted to add back tax adjusted interest expense related to the convertible debt.

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for both the three and six months ended June 30, 2022, and approximately 1.2 million for both the three and six months ended June 30, 2021, 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 both the three and nine months ended September 30, 2022, and approximately 0.9 million and 0.8 million for the three and nine months ended September 30, 2021, 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.

3 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Income (loss) from continuing operations attributable to common stockholders 375.9 ( 68.5 ) 667.4 ( 172.9 )

Loss from discontinued operations, net of income taxes ( 0.7 ) ( 2.3 ) ( 1.5 ) ( 4.3 )

(Loss) income from discontinued operations, net of income taxes ( 0.8 ) 24.3 ( 2.3 ) 20.0

Net income (loss) attributable to common stockholders $ 375.1 $ ( 44.2 ) $ 665.1 $ ( 152.9 )

4 unchanged sentences

Income (loss) from continuing operations attributable to common stockholders 378.5 ( 68.5 ) 673.5 ( 172.9 )

Loss from discontinued operations, net of income taxes ( 0.7 ) ( 2.3 ) ( 1.5 ) ( 4.3 )

(Loss) income from discontinued operations, net of income taxes ( 0.8 ) 24.3 ( 2.3 ) 20.0

Net income (loss) attributable to common stockholders $ 377.7 $ ( 44.2 ) $ 671.2 $ ( 152.9 )

7 unchanged sentences

Income (loss) from continuing operations $ 2.61 $ ( 0.60 ) $ 4.72 $ ( 1.65 )

Loss from discontinued operations

( 0.01 ) ( 0.02 ) ( 0.01 ) ( 0.04 )

(Loss) income from discontinued operations ( 0.01 ) 0.22 ( 0.02 ) 0.19

Net income (loss) attributable to common stockholders $ 2.60 $ ( 0.38 ) $ 4.70 $ ( 1.46 )

1 unchanged sentence

Income (loss) from continuing operations $ 2.34 $ ( 0.60 ) $ 4.33 $ ( 1.65 )

Loss from discontinued operations

( 0.01 ) ( 0.02 ) — ( 0.04 )

(Loss) income from discontinued operations ( 0.01 ) 0.22 ( 0.02 ) 0.19

Net income (loss) attributable to common stockholders $ 2.33 $ ( 0.38 ) $ 4.31 $ ( 1.46 )

1 unchanged sentence

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

At June 30, 2022, such instruments included $ 1,453.5 million of surety bonds and $ 475.1 million of letters of credit.

At September 30, 2022, such instruments included $ 1,380.5 million of surety bonds and $ 505.4 million of letters of credit.

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

10 unchanged sentences

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 through June 30, 2022, additional collateral of $ 13.0 million was posted during the three months ended March 31, 2022 and $ 25.7 million was posted subsequent to June 30, 2022, in the form of cash-collateralized letters of credit.

At June 30, 2022, the Company’s asset retirement obligations of $ 725.1 million were supported by surety bonds of $ 1,276.9 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement.

Letters of credit issued at June 30, 2022 which served as collateral for surety bonds in support of asset retirement obligations amounted to $ 346.4 million.

Based upon the Company’s free cash flow since entering into the surety agreement, additional collateral of $ 38.7 million was posted during the nine months ended September 30, 2022 and $ 57.4 million was posted subsequent to September 30, 2022, primarily in the form of cash-collateralized letters of credit.

At September 30, 2022, the Company’s asset retirement obligations of $ 725.8 million were supported by surety bonds of $ 1,234.6 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement.

Letters of credit issued at September 30, 2022 which served as collateral for surety bonds in support of asset retirement obligations amounted to $ 369.9 million.

Accounts Receivable Securitization

5 unchanged sentences

Borrowings under the Securitization Program bear interest at BSBY plus 2.1 % per annum and remain outstanding throughout the term of the agreement, subject to the Company maintaining sufficient eligible receivables.

At June 30, 2022, the Com pany had no outstanding borrowings and $ 161.5 million o f letters of credit outstanding under the Securitization Program.

At September 30, 2022, the Com pany had no outstanding borrowings and $ 164.1 million o f letters of credit outstanding under the Securitization Program.

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

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 13.5 million at June 30, 2022.

The Company was not required to post cash collateral under the Securitization Program at June 30, 2022.

The Company incurred interest and fees associated with the Securitization Program of $ 0.9 million and $ 0.7 million during the three months ended June 30, 2022 and 2021, respectively, and $ 1.8 million and $ 1.4 million during the six months ended June 30, 2022 and 2021, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 10.9 million at September 30, 2022.

The Company was not required to post cash collateral under the Securitization Program at September 30, 2022.

The Company incurred interest and fees associated with the Securitization Program of $ 1.2 million and $ 1.0 million during the three months ended September 30, 2022 and 2021, respectively, and $ 3.4 million and $ 3.0 million during the nine months ended September 30, 2022 and 2021, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Collateralized Letter of Credit Agreement

3 unchanged sentences

The agreement has an initial expiration date of December 31, 2025.

At June 30, 2022, collateralized letters of credit of $ 12.3 million were outstanding under the agreement .

At September 30, 2022, collateralized letters of credit of $ 43.2 million were outstanding under the agreement.

The underlying collateral balance of $ 44.5 million at September 30, 2022 is included with “Investments and other assets” in the accompanying condensed consolidated balance sheets.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 30, 2022, the Company had other collateral balances of $ 60.9 million posted, including $ 43.8 million related to reclamation, which are included with “Investments and other assets” in the accompanying condensed consolidated balance sheets.

Such collateral balances amounted to $ 23.8 million at December 31, 2021, including $ 15.0 million related to reclamation.

(13) Commitments and Contingencies

Unconditional Purchase Obligations

As of June 30, 2022, purchase commitments for capital expenditures were $ 42.3 million, all of which is obligated within the next three years, with $ 35.4 million obligated within the next 12 months.

As of September 30, 2022, purchase commitments for capital expenditures were $ 77.8 million, all of which is obligated within the next three years, with $ 71.3 million obligated within the next 12 months.

There were no other material changes to the Company’s commitments from the information provided in Note 23.

4 unchanged sentences

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

Litigation Relating to Continuing Operations

Litigation and Matters Relating to Continuing Operations

Securities Class Action.

2 unchanged sentences

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.

Plaintiffs alleged 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.

On January 12, 2021, the Court appointed the Oregon Public Employees Retirement Fund as lead plaintiff.

4 unchanged sentences

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

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

The defendants filed their reply to Plaintiffs’ opposition on August 23, 2021, which completed briefing.

On March 7, 2022, the Court granted in part and denied in part the defendants’ motion to dismiss.

As a result of this decision, only Plaintiffs’ allegations relating to the Company’s September 25, 2018 statements remain in the case.

As a result of this decision, only Plaintiffs’ allegations relating to the Company’s September 25, 2018 statements remained in the case.

On May 13, 2022, the Court entered a Case Management and Scheduling Order.

2 unchanged sentences

The stipulation of settlement will not contain any admission of liability, wrongdoing or responsibility by any of the parties and will provide that upon final approval of the settlement, the case will be dismissed with prejudice, with mutual releases by all parties.

On October 13, 2022, the Court entered an Order of Preliminary Approval of the settlement agreement.

A hearing date of February 7, 2023 is set for final approval of the settlement agreement.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Derivative Actions.

8 unchanged sentences

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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

5 unchanged sentences

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

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

In light of the March 7, 2022 decision on the motion to dismiss in the Securities Class Action, the parties are discussing how to proceed with the derivative actions, which currently remained stayed.

The Company also believes that the derivative actions 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 ruled on the motion to dismiss in the Securities Class Action.

In light of the settlement agreement in the Securities Class Action, on September 7, 2022, the Court entered Stipulation and Order of Voluntary Dismissal Without Prejudice Pursuant to Fed.

419a)(1)(A)(ii) for the Phelps and Di Fusco matters;

effectively closing the shareholder derivative lawsuits.

Metropolitan Mine Stormwater Discharge.

Over the past two years, there has been significantly high rainfall in New South Wales, including unprecedented rain totals at the Metropolitan Mine site.

While stormwater collected at the mine site is managed through two sedimentation dams, at times the heavy rainfall has presented challenges with managing the significant volumes of stormwater as the surface water management infrastructure has not had sufficient capacity.

As a result, on multiple occasions throughout 2021 and 2022 stormwater has been discharged from the mine site.

During this period of time, Metropolitan Collieries Pty Ltd (MCPL), a wholly-owned subsidiary of PEC, has been actively undertaking works, including the use of long reach excavators and pumping systems, to remove accumulated material from the sedimentation dams to restore full site stormwater capacity.

Despite the measures undertaken by MCPL to manage and improve the situation, the Environment Protection Authority is currently undertaking an investigation in relation to the discharges of sediment laden water from the mine site.

The Environment Protection Authority is investigating potential offenses against the environmental protection legislation.

MCPL is fully cooperating with the Environment Protection Authority in relation to this investigation and has also engaged external consultants to undertake a review of the surface water management infrastructure.

MCPL is in ongoing discussions with the Environmental Protection Authority with respect to the timeline for the restoration of stormwater capacity and sediment removal.

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.

10 unchanged sentences

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Patriot had federal and state black lung occupational disease liabilities related to workers employed in periods prior to Patriot’s spin-off from the Company in 2007.

10 unchanged sentences

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

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $ 86.6 million and $ 87.2 million at June 30, 2022 and December 31, 2021, respectively.

The liability, which is classifed as discontinued operations, is included in the Company’s condensed consolidated balance sheet within “Accounts payable and accrued expenses” and “Other noncurrent liabilties.” 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.

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $ 85.7 million and $ 87.2 million at September 30, 2022 and December 31, 2021, respectively.

The liability, which is classified as discontinued operations, is included in the Company’s condensed consolidated balance sheet within “Accounts payable and accrued expenses” and “Other noncurrent liabilities.” 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.

The amount of the Company’s recorded liability reflects only Patriot workers employed by former subsidiaries of the Company that are presently retired, disabled or otherwise not actively employed.

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(14) Segment Information

8 unchanged sentences

GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reportable segment results were as follows:

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

Total $ 438.9 $ 289.1 $ 1,344.2 $ 472.3

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Restructuring charges 1.0 1.7 2.8 5.9

Asset impairment 1.7 — 1.7 —

Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates ( 0.5 ) ( 6.4 ) ( 1.7 ) ( 8.4 )

2 unchanged sentences

Interest income ( 4.9 ) ( 1.4 ) ( 6.3 ) ( 4.2 )

Unrealized losses on derivative contracts related to forecasted sales 24.5 23.7 325.5 25.6

Unrealized losses on foreign currency option contracts 6.3 1.2 3.0 8.8

Unrealized (gains) losses on derivative contracts related to forecasted sales ( 90.4 ) 238.4 235.1 264.0

Unrealized losses (gains) on foreign currency option contracts 1.4 ( 0.6 ) 4.4 8.2

Take-or-pay contract-based intangible recognition ( 0.8 ) ( 1.0 ) ( 2.2 ) ( 3.2 )

1 unchanged sentence

Adjusted EBITDA $ 438.9 $ 289.1 $ 1,344.2 $ 472.3

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(15) Other Events

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.

At September 30, 2022, the Company remains responsible for $ 6.4 million of reclamation liabilities.

The Company recorded a gain of $ 26.1 million in connection with the sale, which is included within “Net gain on disposals” in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021.

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

The Company recorded a gain of $ 24.6 million in connection with the sale, which is included within “(Loss) income from discontinued operations, net of income taxes” in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements