4 unchanged sentences
Due to a lack of quoted market prices and the long-term, illiquid nature of the positions, the Company has not quantified market price risk related to its non-trading, long-term coal supply agreement portfolio.
−Removed: Peabody Energy Corporation 2021 Form 10-K
Coal Trading Activities and Related Commodity Price Risk
13 unchanged sentences
The Company uses stress testing and scenario analysis to help provide visibility in such cases, as discussed further below.
+Added: Peabody Energy Corporation 2022 Form 10-K
VaR analysis allows the Company to aggregate market price risk across products in the portfolio, compare market price risk on a consistent basis and identify the drivers of risk and changes thereto over time.
11 unchanged sentences
Future Realization.
−Removed: As of December 31, 2021, the total estimated future realization of the value of the Company’s trading portfolio is expected to occur over 2022 and 2023.
+Added: As of December 31, 2022, the total estimated future realization of the value of the Company’s trading portfolio is expected to occur during 2023.
Peabody also monitors other types of risk associated with its coal trading activities, including credit, market liquidity and counterparty nonperformance.
−Removed: Peabody Energy Corporation 2021 Form 10-K
Credit and Nonperformance Risk
8 unchanged sentences
Peabody also continually monitors counterparty and contract nonperformance risk, if present, on a case-by-case basis.
+Added: Peabody Energy Corporation 2022 Form 10-K
Foreign Currency Risk
7 unchanged sentences
dollar exchange rate at December 31, 2022, the currency option contracts outstanding at that date would limit the Company’s net exposure to a $0.10 unfavorable change in the exchange rate to approximately $167 million for the next twelve months.
+Added: Subsequent to December 31, 2022, the Company entered into additional average rate options with an aggregate notional amount of $135.0 million Australian dollars related to the second and third quarters of 2023 and purchased collars with an aggregate notional amount of $150.0 million Australian dollars related to the second half of 2023.
+Added: The additional average rate options have a strike price of $0.75.
+Added: The purchased collars have a floor and ceiling of $0.63 and $0.75, respectively, whereby the Company would incur a loss on the instruments for rates below the floor and gain for rates above the ceiling.
+Added: The Company anticipates it will continue to use options and collars to hedge Australian dollar currency risk.
Coal Price Risk
6 unchanged sentences
The Company has the flexibility to increase volumes should demand warrant.
−Removed: Peabody is estimating 2022 thermal coal sales volumes from its Seaborne Thermal Mining segment of 17.0 million to 18.5 million tons comprised of thermal export volume of 9.5 million to 10.5 million tons and domestic volume of 7.5 million to 8.0 million tons.
+Added: Peabody is estimating 2023 thermal coal sales volumes from its Seaborne Thermal Mining segment of 14.5 million to 15.5 million tons comprised of thermal export volume of 9.0 million to 10.0 million tons and domestic volume of 5.5 million tons.
Peabody is estimating full year 2023 metallurgical coal sales from its Seaborne Metallurgical Mining segment of 7.0 million to 8.0 million tons.
Sales commitments in the metallurgical coal market are typically not long-term in nature, and the Company is therefore subject to fluctuations in market pricing.
+Added: As of December 31, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 0.6 million tonnes.
+Added: Such financial contracts may include futures, forwards and options.
+Added: The notional volume is related predominantly to financial derivatives entered to support the profitability of the Wambo Underground Mine as part of a strategy to extend the mine’s life.
+Added: All such tonnes will settle in 2023.
+Added: The Newcastle thermal coal index was $398.50 per tonne on December 31, 2022, and the Company had posted $198 million of variation margin for the related derivative contracts at such date.
+Added: A change in the Newcastle forward curve of $100 per tonne would increase or decrease the Company’s variation margin requirement by approximately $55 million and result in comparable unrealized gains or losses.
Diesel Fuel Price Risk
1 unchanged sentence
As of December 31, 2022, the Company did not have any diesel fuel derivative instruments in place.
−Removed: The Company also manages the price risk of diesel fuel through the use of cost pass-through contacts with certain customers.
+Added: The Company also manages the price risk of diesel fuel through the use of cost pass-through contracts with certain customers.
The Company expects to consume 100 to 110 million gallons of diesel fuel during the next twelve months.
A $10 per barrel change in the price of crude oil (the primary component of a refined diesel fuel product) would increase or decrease its annual diesel fuel costs by approximately $26 million based on its expected usage.
−Removed: Peabody Energy Corporation 2021 Form 10-K
Interest Rate Risk
Peabody’s objectives in managing exposure to interest rate changes are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs.
−Removed: From time to time, Peabody manages its debt to achieve a certain ratio of fixed-rate debt and variable-rate debt as a percent of net debt through the use of various hedging instruments.
−Removed: As of December 31, 2021, Peabody had approximately $849.9 million of fixed-rate borrowings and $323.3 million of variable-rate borrowings outstanding and had no interest rate swaps in place.
−Removed: A one percentage point increase in interest rates would result in an annualized increase to interest expense of approximately $3 million on its variable-rate borrowings.
−Removed: With respect to its fixed-rate borrowings, a one percentage point increase in interest rates would result in a decrease of approximately $20 million in the estimated fair value of these borrowings.
+Added: As of December 31, 2022, Peabody had approximately $320.0 million of fixed-rate borrowings and no variable-rate borrowings outstanding and had no interest rate swaps in place.
+Added: A one percentage point increase in interest rates would result in a decrease of approximately $23 million in the estimated fair value of these borrowings.
+Added: Peabody Energy Corporation 2022 Form 10-K
Financial Statements and Supplementary Data.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.