What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 277 added, 185 removed, 568 unchanged (45% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions, except per share data)

9 unchanged sentences

Asset impairment — — 2.0 —

Provision for NARM and Shoal Creek loss 33.7 — 33.7 —

Income from equity affiliates ( 2.3 ) ( 48.7 ) ( 4.1 ) ( 93.4 )

Operating profit (loss) 404.5 ( 70.6 )

Operating profit 260.8 449.3 665.3 378.7

Interest expense 13.3 37.6 31.7 77.0

2 unchanged sentences

Net periodic benefit credit, excluding service cost ( 9.7 ) ( 12.3 ) ( 19.4 ) ( 24.5 )

Income (loss) from continuing operations before income taxes 402.1 ( 120.8 )

Income tax provision (benefit) 118.0 ( 1.0 )

Income (loss) from continuing operations, net of income taxes 284.1 ( 119.8 )

Income from continuing operations before income taxes 278.3 422.6 680.4 301.8

Income tax provision 74.2 11.3 192.2 10.3

Income from continuing operations, net of income taxes 204.1 411.3 488.2 291.5

Loss from discontinued operations, net of income taxes ( 1.3 ) ( 0.7 ) ( 2.6 ) ( 1.5 )

Net income (loss) 282.8 ( 120.6 )

Net income (loss) attributable to noncontrolling interests 14.3 ( 1.1 )

Net income (loss) attributable to common stockholders $ 268.5 $ ( 119.5 )

Income (loss) from continuing operations:

Basic income (loss) per share $ 1.87 $ ( 0.87 )

Diluted income (loss) per share $ 1.69 $ ( 0.87 )

Net income (loss) attributable to common stockholders:

Basic income (loss) per share $ 1.86 $ ( 0.88 )

Diluted income (loss) per share $ 1.68 $ ( 0.88 )

Net income 202.8 410.6 485.6 290.0

Net income attributable to noncontrolling interests 23.6 1.1 37.9 —

Net income attributable to common stockholders $ 179.2 $ 409.5 $ 447.7 $ 290.0

Income from continuing operations:

Basic income per share $ 1.27 $ 2.85 $ 3.14 $ 2.08

Diluted income per share $ 1.16 $ 2.55 $ 2.85 $ 1.93

Net income attributable to common stockholders:

Basic income per share $ 1.26 $ 2.84 $ 3.12 $ 2.07

Diluted income per share $ 1.15 $ 2.54 $ 2.83 $ 1.93

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions)

Net income (loss) $ 282.8 $ ( 120.6 )

Net income $ 202.8 $ 410.6 $ 485.6 $ 290.0

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

2 unchanged sentences

Other comprehensive loss, net of income taxes ( 13.8 ) ( 16.9 ) ( 27.4 ) ( 28.4 )

Comprehensive income (loss) 269.2 ( 132.1 )

Net income (loss) attributable to noncontrolling interests 14.3 ( 1.1 )

Comprehensive income (loss) attributable to common stockholders $ 254.9 $ ( 131.0 )

Comprehensive income 189.0 393.7 458.2 261.6

Net income attributable to noncontrolling interests 23.6 1.1 37.9 —

Comprehensive income attributable to common stockholders $ 165.4 $ 392.6 $ 420.3 $ 261.6

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(Amounts in millions, except per share data)

1 unchanged sentence

Cash and cash equivalents $ 1,080.5 $ 1,307.3

Accounts receivable, net of allowance for credit losses of $ 0.0 at March 31, 2023 and December 31, 2022

Accounts receivable, net of allowance for credit losses of $ 0.0 at June 30, 2023 and December 31, 2022

Inventories, net 312.9 296.1

21 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

100.0 shares authorized, no shares issued or outstanding as of March 31, 2023 and December 31, 2022

100.0 shares authorized, no shares issued or outstanding as of June 30, 2023 and December 31, 2022

Series Common Stock — $ 0.01 per share par value;

50.0 shares authorized, no shares issued or outstanding as of March 31, 2023 and December 31, 2022

50.0 shares authorized, no shares issued or outstanding as of June 30, 2023 and December 31, 2022

Common Stock — $ 0.01 per share par value;

450.0 shares authorized, 188.4 shares issued and 144.7 shares outstanding as of March 31, 2023 and 187.1 shares issued and 143.9 shares outstanding as of December 31, 2022

450.0 shares authorized, 188.6 shares issued and 135.9 shares outstanding as of June 30, 2023 and 187.1 shares issued and 143.9 shares outstanding as of December 31, 2022

Additional paid-in capital 3,979.4 3,975.9

Treasury stock, at cost — 43.7 and 43.2 common shares as of March 31, 2023 and December 31, 2022

Treasury stock, at cost — 52.7 and 43.2 common shares as of June 30, 2023 and December 31, 2022

( 1,572.4 ) ( 1,372.9 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

Cash Flows From Operating Activities

Net income (loss) $ 282.8 $ ( 120.6 )

Net income $ 485.6 $ 290.0

Loss from discontinued operations, net of income taxes 2.6 1.5

Income (loss) from continuing operations, net of income taxes 284.1 ( 119.8 )

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

Income from continuing operations, net of income taxes 488.2 291.5

Adjustments to reconcile income from continuing operations, net of income taxes to net cash provided by operating activities:

Depreciation, depletion and amortization 156.9 146.7

3 unchanged sentences

Asset impairment 2.0 —

Provision for NARM and Shoal Creek loss 33.7 —

Net gain on disposals ( 7.1 ) ( 17.7 )

14 unchanged sentences

Other, net — 3.3

Net cash provided by (used in) continuing operations 389.4 ( 272.5 )

Net cash provided by continuing operations 745.2 12.1

Net cash used in discontinued operations ( 5.5 ) ( 2.7 )

Net cash provided by (used in) operating activities 386.3 ( 273.7 )

Net cash provided by operating activities 739.7 9.4

PEABODY ENERGY CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

5 unchanged sentences

Distributions from joint ventures 365.8 280.8

Advances to related parties ( 0.1 ) ( 1.2 )

Cash receipts from Middlemount Coal Pty Ltd and other related parties 1.7 143.9

6 unchanged sentences

Proceeds from common stock issuances, net of costs — 222.0

Common stock repurchases ( 173.0 ) —

Repurchase of employee common stock relinquished for tax withholding ( 13.7 ) ( 2.6 )

Dividends paid ( 10.8 ) —

Distributions to noncontrolling interests ( 22.8 ) ( 13.8 )

Other, net — 0.1

Net cash (used in) provided by financing activities ( 225.4 ) 75.1

15 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended March 31,

(Dollars in millions)

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

2023 2022 2023 2022

(Dollars in millions, except per share data)

Balance, beginning of period $ 1.9 $ 1.9 $ 1.9 $ 1.8

3 unchanged sentences

Balance, beginning of period 3,977.6 3,969.5 3,975.9 3,745.6

Dividend equivalent units on dividends declared 0.1 — 0.1 —

Share-based compensation for equity-classified awards 1.7 3.4 3.4 5.4

3 unchanged sentences

Balance, beginning of period ( 1,386.1 ) ( 1,372.3 ) ( 1,372.9 ) ( 1,370.3 )

Common stock repurchases ( 173.0 ) — ( 173.0 ) —

Unsettled common stock repurchases ( 11.2 ) — ( 11.2 ) —

Excise tax payable on common stock repurchases ( 1.6 ) — ( 1.6 ) —

Repurchase of employee common stock relinquished for tax withholding ( 0.5 ) ( 0.6 ) ( 13.7 ) ( 2.6 )

2 unchanged sentences

Balance, beginning of period 652.4 ( 1,032.7 ) 383.9 ( 913.2 )

Net income (loss) attributable to common stockholders 268.5 ( 119.5 )

Net income attributable to common stockholders 179.2 409.5 447.7 290.0

Dividends declared ($ 0.075 , $ 0.000 , $ 0.075 , and $ 0.000 per share, respectively)

( 10.9 ) — ( 10.9 ) —

Balance, end of period 820.7 ( 623.2 ) 820.7 ( 623.2 )

7 unchanged sentences

Balance, beginning of period 55.0 44.1 63.5 59.0

Net income (loss) attributable to noncontrolling interests 14.3 ( 1.1 )

Net income attributable to noncontrolling interests 23.6 1.1 37.9 —

Distributions to noncontrolling interests — — ( 22.8 ) ( 13.8 )

15 unchanged sentences

Balance sheet information presented herein as of December 31, 2022 has been derived from the Company’s audited consolidated balance sheet at that date.

The Company’s results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2023.

The Company’s results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2023.

Although there are new accounting pronouncements issued by the Financial Accounting Standards Board that the Company will adopt, as applicable, the Company does not believe any of these accounting pronouncements will have a material impact on its unaudited condensed consolidated financial statements or disclosures.

5 unchanged sentences

With respect to its seaborne reporting 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 March 31, 2023

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

Thermal Mining Corporate and Other (1)

Three Months Ended June 30, 2023

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

Thermal Corporate and Other (1)

(Dollars in millions)

9 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended March 31, 2022

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

Thermal Mining Corporate and Other (1)

Three Months Ended June 30, 2022

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

Thermal Corporate and Other (1)

(Dollars in millions)

7 unchanged sentences

Revenue $ 354.9 $ 533.8 $ 229.7 $ 224.9 $ ( 21.4 ) $ 1,321.9

Six Months Ended June 30, 2023

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

Thermal Corporate and Other (1)

(Dollars in millions)

Domestic $ 69.4 $ — $ 564.8 $ 446.1 $ — $ 1,080.3

Export 676.3 — — — — 676.3

Total thermal 745.7 — 564.8 446.1 — 1,756.6

Metallurgical coal

Export — 658.8 — — — 658.8

Total metallurgical — 658.8 — — — 658.8

0.3 2.1 0.2 3.2 211.6 217.4

Revenue $ 746.0 $ 660.9 $ 565.0 $ 449.3 $ 211.6 $ 2,632.8

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended June 30, 2022

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

Thermal Corporate and Other (1)

(Dollars in millions)

Domestic $ 80.2 $ — $ 481.4 $ 422.7 $ — $ 984.3

Export 525.4 — — 1.0 — 526.4

Total thermal 605.6 — 481.4 423.7 — 1,510.7

Metallurgical coal

Export — 851.3 — — — 851.3

Total metallurgical — 851.3 — — — 851.3

0.5 3.8 ( 0.5 ) 4.3 ( 356.8 ) ( 348.7 )

Revenue $ 606.1 $ 855.1 $ 480.9 $ 428.0 $ ( 356.8 ) $ 2,013.3

(1) Corporate and Other includes the following:

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions)

2 unchanged sentences

Revenue from physical sale of coal (3)

23.3 122.0 107.8 143.3

Trading revenue 0.1 0.3 0.1 10.4

3.8 3.4 25.6 5.6

Total Corporate and Other $ 37.2 $ ( 21.4 ) $ 211.6 $ ( 356.8 )

7 unchanged sentences

Accounts Receivable

“Accounts receivable, net” at March 31, 2023 and December 31, 2022 consisted of the following:

March 31, 2023 December 31, 2022

“Accounts receivable, net” at June 30, 2023 and December 31, 2022 consisted of the following:

June 30, 2023 December 31, 2022

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 325.5 $ 465.5

None of the above receivables included allowances for credit losses at March 31, 2023 or December 31, 2022.

No charges for credit losses were recognized during the three months ended March 31, 2023 or 2022.

None of the above receivables included allowances for credit losses at June 30, 2023 or December 31, 2022.

No charges for credit losses were recognized during the three and six months ended June 30, 2023 or 2022.

PEABODY ENERGY CORPORATION

1 unchanged sentence

(3) Inventories

“ Inventories, net” as of March 31, 2023 and December 31, 2022 consisted of the following:

March 31, 2023 December 31, 2022

“ Inventories, net” as of June 30, 2023 and December 31, 2022 consisted of the following:

June 30, 2023 December 31, 2022

(Dollars in millions)

3 unchanged sentences

Inventories, net $ 312.9 $ 296.1

Materials and supplies inventories, net presented above have been shown net of reserves of $ 9.4 million and $ 9.5 million as of March 31, 2023 and December 31, 2022.

Materials and supplies inventories, net presented above have been shown net of reserves of $ 8.5 million and $ 9.5 million as of June 30, 2023 and December 31, 2022.

(4) Equity Method Investments

2 unchanged sentences

(Income) Loss from Equity Affiliates

Book Value at Three Months Ended March 31,

March 31, 2023 December 31, 2022 2023 2022

Book Value at Three Months Ended June 30, Six Months Ended June 30,

June 30, 2023 December 31, 2022 2023 2022 2023 2022

(Dollars in millions)

2 unchanged sentences

Total equity method investments $ 40.9 $ 34.1 $ ( 2.3 ) $ ( 48.7 ) $ ( 4.1 ) $ ( 93.4 )

The Company received no cash payments from Middlemount during the three months ended March 31, 2023.

Payments of $ 47.0 million were received from Middlemount during the three months ended March 31, 2022.

The Company received no cash payments from Middlemount during the six months ended June 30, 2023.

Payments of $ 143.2 million were received from Middlemount during the six months ended June 30, 2022.

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 dollars at March 31, 2023.

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 dollars at June 30, 2023.

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

There was no outstanding revolving loan at March 31, 2023 or December 31, 2022.

There was no outstanding revolving loan at June 30, 2023 or December 31, 2022.

In March 2022, the Company entered into a joint venture with unrelated partners to form R3.

R3 was formed with the intent of developing various sites, including certain reclaimed mining land held by the Company in the U.S., for utility-scale photovoltaic solar generation and battery storage.

The Company contributed $ 2.0 million to R3 during both the three months ended March 31, 2023 and 2022.

The Company contributed $ 3.5 million and $ 2.5 million to R3 during the six months ended June 30, 2023 and 2022, respectively.

(5) 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 March 31, 2023.

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 June 30, 2023.

Foreign Currency Option Contracts

The Company has historically utilized currency forwards and options to hedge currency risk associated with anticipated Australian dollar expenditures.

As of March 31, 2023, the Company held average rate options with an aggregate notional amount of $ 632.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending December 31, 2023.

As of June 30, 2023, the Company held average rate options with an aggregate notional amount of $ 486.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending March 31, 2024.

The instruments 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 $ 0.70 to $ 0.75 over the nine-month period ending December 31, 2023.

As of March 31, 2023, the Company also held purchased collars with an aggregate notional amount of $ 350.0 million Australian dollars related to anticipated Australian dollar expenditures during the third and fourth quarters of 2023.

dollar exchange rate exceed amounts ranging from $ 0.70 to $ 0.75 over the nine-month period ending March 31, 2024.

As of June 30, 2023, the Company also held purchased collars with an aggregate notional amount of $ 514.0 million Australian dollars related to anticipated Australian dollar expenditures during the nine-month period ending March 31, 2024.

The purchased collars have a floor and ceiling of approximately $ 0.60 and $ 0.75 , respectively, whereby the Company will incur a loss on the instruments for rates below the floor and a gain for rates above the ceiling.

Derivative Contracts Related to Forecasted Sales

As of March 31, 2023, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 0.3 million tonnes.

Such financial contracts may include futures, forwards and options.

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.

All such tonnes will settle in 2023.

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 March 31, 2023, the Company recorded a net unrealized mark-to-market gain of $ 118.7 million on financial coal derivative contracts, and no unrealized mark-to-market gains or losses on physical forward sales contracts.

During the three months ended March 31, 2022, the Company recorded a net unrealized mark-to-market loss of $ 301.0 million on these coal derivative contracts, which included approximately $ 237 million of unrealized mark-to-market losses on financial derivatives and approximately $ 64 million of unrealized mark-to-market losses on physical forward sales contracts.

As of June 30, 2023, the Company had no coal derivative contracts related to its forecasted sales.

Historically, such financial contracts have included futures, forwards and options.

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, 2023, the Company recorded a net unrealized mark-to-market gain of $ 40.3 million on financial coal derivative contracts, and no unrealized mark-to-market gains or losses on physical forward sales contracts.

During the three months ended June 30, 2022, the Company recorded a net unrealized mark-to-market loss of $ 24.5 million on coal derivative contracts, which included 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, 2023, the Company recorded a net unrealized mark-to-market gain of $ 159.0 million on financial coal derivative contracts, and no unrealized mark-to-market gains or losses 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 coal derivative contracts, which included 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.

Financial Trading Contracts

1 unchanged sentence

Such financial contracts may include futures, forwards and options.

The Company held nominal financial trading contracts as of March 31, 2023.

The Company held nominal financial trading contracts as of June 30, 2023.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Asset Derivative Liability Derivative Asset Derivative Liability Derivative

5 unchanged sentences

Effect of counterparty netting ( 30.4 ) 30.4 ( 100.6 ) 100.6

Variation margin posted (received) — 48.8 ( 11.7 ) 209.7

Variation margin (received) posted — — ( 11.7 ) 209.7

Net derivatives and variation margin as classified in the balance sheets $ 0.9 $ — $ 3.0 $ —

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 March 31, 2023, the Company had posted $ 59.8 million aggregate margin cash, consisting of $ 48.8 million variation margin cash and $ 11.0 million initial margin.

As of June 30, 2023, the Company had no margin cash posted.

As of December 31, 2022, the Company had posted $ 255.5 million aggregate margin cash, consisting of $ 198.0 million variation margin cash and $ 57.5 million initial margin.

1 unchanged sentence

The amounts of initial margin are not included with the derivatives presented in the tabular disclosures above and are included in “Other current assets” in the accompanying condensed consolidated balance sheets.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED 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 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 March 31, 2023

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

Three Months Ended June 30, 2023

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

Derivative Instrument Classification

4 unchanged sentences

Total $ 10.0 $ ( 19.3 ) $ 29.3

Three Months Ended March 31, 2022

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

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

Derivative Instrument Classification

4 unchanged sentences

Total $ ( 154.3 ) $ ( 122.9 ) $ ( 31.4 )

Six Months Ended June 30, 2023

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

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts Operating costs and expenses $ ( 5.2 ) $ ( 5.8 ) $ 0.6

Derivative contracts related to forecasted sales Revenue 78.1 ( 80.9 ) 159.0

Financial trading contracts Revenue 0.1 31.2 ( 31.1 )

Total $ 73.0 $ ( 55.5 ) $ 128.5

Six Months Ended June 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

(Dollars in millions)

Foreign currency option contracts Operating costs and expenses $ ( 5.2 ) $ ( 2.2 ) $ ( 3.0 )

Derivative contracts related to forecasted sales Revenue ( 516.1 ) ( 190.6 ) ( 325.5 )

Financial trading contracts Revenue 10.4 0.2 10.2

Total $ ( 510.9 ) $ ( 192.6 ) $ ( 318.3 )

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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value Measurements

4 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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED 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.

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

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

March 31, 2023

June 30, 2023

Level 1 Level 2 Level 3 Total

4 unchanged sentences

Equity securities — — 0.3 0.3

Total net assets (liabilities) $ 0.3 $ ( 48.8 ) $ — $ ( 48.5 )

Total net assets $ — $ 0.9 $ 0.3 $ 1.2

December 31, 2022

13 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 March 31, 2023 and December 31, 2022:

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of June 30, 2023 and December 31, 2022:

• 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.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(Dollars in millions)

9 unchanged sentences

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

During the three months ended March 31, 2023, the entity in which the Company held a Level 3 investment in equity securities completed a merger transaction and its shares were exchanged for the shares of the newly-combined entity, which are publicly traded.

During the six months ended June 30, 2023, the entity in which the Company held a Level 3 investment in equity securities completed a merger transaction and its shares were exchanged for the shares of the newly-combined entity, which are publicly traded.

The Company recorded an impairment loss of $ 2.0 million upon the exchange of shares, and will mark the investment to market as a Level 1 asset prospectively.

The Company had no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2023 and 2022.

The Company had no transfers between Levels 1, 2 and 3 during the three and six months ended June 30, 2023 and 2022.

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

(6) Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of March 31, 2023 and December 31, 2022 is set forth in the table below:

March 31, 2023 December 31, 2022

The composition of property, plant, equipment and mine development, net, as of June 30, 2023 and December 31, 2022 is set forth in the table below:

June 30, 2023 December 31, 2022

(Dollars in millions)

5 unchanged sentences

(7) Income Taxes

The Company's effective tax rate before remeasurement for the three months ended March 31, 2023 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company’s income tax provision of $ 118.0 million and income tax benefit of $ 1.0 million for the three months ended March 31, 2023 and 2022, respectively, included tax provisions of $ 0.4 million and $ 1.6 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s estimated full year pretax income is expected to be primarily generated in Australia.

The Company's effective tax rate before remeasurement for the six months ended June 30, 2023 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance.

The Company’s income tax provisions of $ 74.2 million and $ 11.3 million for the three months ended June 30, 2023 and 2022, respectively, included a tax provision of $ 0.3 million and a tax benefit of $ 3.5 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provisions of $ 192.2 million and $ 10.3 million for the six months ended June 30, 2023 and 2022, respectively, included a tax provision of $ 0.7 million and a tax benefit of $ 1.9 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s estimated full year pretax income and income tax expense are expected to be primarily generated in Australia.

PEABODY ENERGY CORPORATION

1 unchanged sentence

(8) Long-term Debt

The Company’s total indebtedness as of March 31, 2023 and December 31, 2022 consisted of the following:

Debt Instrument (defined below, as applicable) March 31, 2023 December 31, 2022

The Company’s total indebtedness as of June 30, 2023 and December 31, 2022 consisted of the following:

Debt Instrument (defined below, as applicable) June 30, 2023 December 31, 2022

(Dollars in millions)

12 unchanged sentences

The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms.

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.

During the first quarter of 2023, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes.

As a result, the 2028 Convertible Notes are not convertible at the option of the holders during the second quarter of 2023.

As of March 31, 2023, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $ 92.6 million.

The 2028 Convertible Notes bore 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’ indenture requires conversion rate adjustments upon the payment of dividends to holders of the Company’s common stock once such cumulative dividends impact the conversion rate by at least 1 %.

Under the applicable conversion rate formula, the $ 0.075 per share dividend declared on April 27, 2023 and paid on May 31, 2023 yielded a revised conversion rate of 50.5451 shares per $1,000 principal amount of 2028 Convertible Notes, which did not meet the 1 % threshold to impact the existing conversion rate of 50.3816 .

The conversion rate may be impacted prospectively, based upon cumulative dividends paid.

During the first and second quarters of 2023, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes.

As a result, the 2028 Convertible Notes were not convertible at the option of the holders during the second quarter of 2023, and will not be similarly convertible during the third quarter of 2023.

As of June 30, 2023, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $ 29.2 million.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Interest Charges

1 unchanged sentence

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 March 31,

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

2023 2022 2023 2022

(Dollars in millions)

4 unchanged sentences

Non-cash interest expense $ 1.7 $ 5.2 $ 3.3 $ 9.0

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at March 31, 2023.

The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2023.

The April 2023 termination of the Company’s credit agreement and related letter of credit facility, as described in Note 11.

3 unchanged sentences

Net periodic pension cost (credit) included the following components:

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions)

4 unchanged sentences

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

As of March 31, 2023, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

As of June 30, 2023, 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 2023 based on minimum funding requirements and does not expect to make any discretionary contributions in 2023 at this time.

2 unchanged sentences

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

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

The benefit obligation was not transferred to Prudential and the Peabody Plan continues to administer and pay the retirement benefits of Peabody Plan participants and is reimbursed by Prudential for the payment of all benefits covered by the GAC.

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

The benefit obligation was not transferred to Prudential and the Peabody Plan continued to administer and pay the retirement benefits of Peabody Plan participants and was reimbursed by Prudential for the payment of all benefits covered by the GAC.

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

There was no impact on the monthly retirement benefits paid to Peabody Plan participants and no material impact on contributions for the Peabody Plan in 2022 or 2023 as a result of this transaction.

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

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

In February 2023, as part of the Peabody Plan termination process, the Company announced a program to offer a voluntary lump-sum pension payout to certain active and deferred participants of the Peabody Plan which would fully settle the Peabody Plan’s obligation to them.

The program provided participants with a limited-time opportunity to elect to receive a lump-sum settlement of their pension benefit or begin to receive their benefit in the form of a monthly annuity in May 2023.

Participants not electing the lump-sum settlement or annuity options will have their pension benefit transferred to a highly qualified insurance company.

Through May 1, 2023, the Company settled $ 21.5 million of its pension obligations for active and deferred participants in the Peabody Plan with an equal amount paid from plan assets.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

In June 2022, the Peabody Plan’s participants were notified of the Peabody Plan termination and PIC 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 Plan.

In May 2023, PIC received a favorable determination from the Internal Revenue Service as to the Peabody Plan’s qualified status with respect to its plan termination.

In February 2023, as part of the Peabody Plan termination process, PIC announced a program to offer a voluntary lump-sum pension payout to certain active and deferred participants of the Peabody Plan which would fully settle the Peabody Plan’s obligation to them.

During the six months ended June 30, 2023, the Company settled $ 21.9 million of its pension obligations for active and deferred participants in the Peabody Plan with an equal amount paid from plan assets.

As part of the completion of the standard Employee Retirement Income Security Act plan termination process for the Peabody Plan, on July 31, 2023, the GAC with Prudential was converted from a buy-in group annuity contract to a buy-out group annuity contract, irrevocably transferring the remaining benefit obligation and administration to Prudential.

The Peabody Plan no longer administers or pays the retirement benefits of Peabody Plan participants.

No cash contributions are expected to be required to complete the termination process for the Peabody Plan.

Net periodic postretirement benefit credit included the following components:

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions)

17 unchanged sentences

For diluted EPS purposes, the potentially dilutive common stock is assumed to have been converted at the beginning of the period (or at the time of issuance, if later).

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 and approximately 1.2 million for the three months ended March 31, 2023 and 2022, 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.

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, which includes the amortization of debt issuance costs, related to the convertible debt.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for the three and six months ended June 30, 2023 and 2022 because to do so would have been anti-dilutive for those periods.

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.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

(In millions, except per share data)

Basic EPS numerator:

Income (loss) from continuing operations, net of income taxes $ 284.1 $ ( 119.8 )

Net income (loss) attributable to noncontrolling interests 14.3 ( 1.1 )

Income (loss) from continuing operations attributable to common stockholders 269.8 ( 118.7 )

Income from continuing operations, net of income taxes $ 204.1 $ 411.3 $ 488.2 $ 291.5

Net income attributable to noncontrolling interests 23.6 1.1 37.9 —

Income from continuing operations attributable to common stockholders 180.5 410.2 450.3 291.5

Loss from discontinued operations, net of income taxes ( 1.3 ) ( 0.7 ) ( 2.6 ) ( 1.5 )

Net income (loss) attributable to common stockholders $ 268.5 $ ( 119.5 )

Net income attributable to common stockholders $ 179.2 $ 409.5 $ 447.7 $ 290.0

Diluted EPS numerator:

Income (loss) from continuing operations, net of income taxes $ 284.1 $ ( 119.8 )

Income from continuing operations, net of income taxes $ 204.1 $ 411.3 $ 488.2 $ 291.5

Tax adjusted interest expense related to 2028 Convertible Notes 3.5 2.5 6.1 3.5

Net income (loss) attributable to noncontrolling interests 14.3 ( 1.1 )

Income (loss) from continuing operations attributable to common stockholders 272.4 ( 118.7 )

Net income attributable to noncontrolling interests 23.6 1.1 37.9 —

Income from continuing operations attributable to common stockholders 184.0 412.7 456.4 295.0

Loss from discontinued operations, net of income taxes ( 1.3 ) ( 0.7 ) ( 2.6 ) ( 1.5 )

Net income (loss) attributable to common stockholders $ 271.1 $ ( 119.5 )

Net income attributable to common stockholders $ 182.7 $ 412.0 $ 453.8 $ 293.5

EPS denominator:

Weighted average shares outstanding — basic

142.3 144.0 143.4 140.1

Dilutive impact of share-based compensation awards 0.6 1.8 0.7 1.5

2 unchanged sentences

Basic EPS attributable to common stockholders:

Income (loss) from continuing operations $ 1.87 $ ( 0.87 )

Income from continuing operations $ 1.27 $ 2.85 $ 3.14 $ 2.08

Loss from discontinued operations ( 0.01 ) ( 0.01 ) ( 0.02 ) ( 0.01 )

Net income (loss) attributable to common stockholders $ 1.86 $ ( 0.88 )

Net income attributable to common stockholders $ 1.26 $ 2.84 $ 3.12 $ 2.07

Diluted EPS attributable to common stockholders:

Income (loss) from continuing operations $ 1.69 $ ( 0.87 )

Income from continuing operations $ 1.16 $ 2.55 $ 2.85 $ 1.93

Loss from discontinued operations ( 0.01 ) ( 0.01 ) ( 0.02 ) —

Net income (loss) attributable to common stockholders $ 1.68 $ ( 0.88 )

Net income attributable to common stockholders $ 1.15 $ 2.54 $ 2.83 $ 1.93

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(11) Financial Instruments and Other Guarantees

3 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 condensed consolidated balance sheets.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the Company’s financial instruments that carry off-balance-sheet risk.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Reclamation Support Other Support (1)

9 unchanged sentences

(1) Instruments support obligations related to pension and health care plans, workers’ compensation, property and casualty insurance, customer and vendor contracts, and certain restoration ancillary to prior mining activities.

(2) March 31, 2023 balances exclude $ 223.8 million of letters of credit outstanding under the LC Facility and $ 101.3 million of letters of credit outstanding under the Company’s accounts receivable securitization program that were cancelled by April 14, 2023.

The collateral obligations related to such letters of credit were met by the March 31, 2023 funding of collateral trust accounts in connection with the surety agreement amendment described below.

(2) Amounts do not include cash collateralized letters of credit.

5 unchanged sentences

Under the April 2023 amendment, the Company and surety providers agreed to a maximum aggregate collateral amount of $ 721.8 million based upon bonding levels at the effective date of the amendment.

This maximum collateral amount represents a negotiated increase from the uncapped cumulative collateral amount prior to the amendment and may vary prospectively as future bonding levels increase or decrease.

The amendment also removes restrictions on the payment of dividends and share repurchases, and extends the agreement through December 31, 2026.

This maximum collateral amount represented a negotiated increase from the uncapped cumulative collateral amount prior to the amendment and will vary prospectively as bonding levels increase or decrease.

The amendment also removed restrictions on the payment of dividends and share repurchases, and extended the agreement through December 31, 2026.

In order to maintain the new maximum collateral standstill, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter.

The minimum liquidity test requires the Company to maintain liquidity at the greater of $ 400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers.

The Company must also maintain a maximum net leverage ratio of 1.5 to 1.0 , where the numerator consists of its funded debt, net of cash, and the denominator consists of its Adjusted EBITDA for the trailing twelve months.

1 unchanged sentence

The Company’s ability to pay dividends and make share repurchases is also subject to the quarterly minimum liquidity test.

Such compliance requirements will commence for the second quarter of 2023.

The Company is in compliance with such requirements, which commenced for the second quarter of 2023.

The Company granted second liens on $ 200.0 million of mining equipment under the original agreement, which remain in force under the April 2023 amendment.

2 unchanged sentences

The amendment became effective on April 14, 2023, when the Company terminated a credit agreement which, as amended, provided for $ 237.2 million of capacity for irrevocable standby letters of credit (LC Facility).

The $ 223.8 million of letters of credit that were outstanding under the LC Facility at March 31, 2023 were subsequently cancelled and, in certain cases, replaced by cash-collateralized letters of credit or letters of credit issued under the Company’s accounts receivable securitization program.

The now-terminated LC Facility had an original capacity of $ 324.0 million and was subsequently amended at various dates to reduce its capacity and effect certain other changes, including in February 2023 to reduce capacity by $ 65.0 million, accelerate the expiration date to December 31, 2023 from December 31, 2024, and eliminate the prepayment premium due upon any reduction of commitments thereunder prior to July 29, 2023.

The Company recorded early debt extinguishment losses of $ 6.8 million during the three months ended March 31, 2023, primarily as a result of the February 2023 amendment.

All letters of credit that were outstanding under the LC Facility were cancelled upon its termination and, in certain cases, replaced by cash-collateralized letters of credit or letters of credit issued under the Company’s accounts receivable securitization program.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recorded early debt extinguishment losses of $ 8.8 million during the six months ended June 30, 2023 as a result of the February 2023 amendment and subsequent termination.

Prior to its termination, undrawn letters of credit under the LC Facility bore interest at 6.00 % per annum and unused commitments were subject to a 0.50 % per annum commitment fee.

5 unchanged sentences

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

At March 31, 2023, the Com pany had no outstanding borrowings and $ 190.7 million o f letters of credit outstanding under the Securitization Program, primarily in support of reclamation obligations.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 15.3 million at March 31, 2023.

The Company was not required to post cash collateral under the Securitization Program at March 31, 2023.

By April 14, 2023, $ 101.3 million of letters of credit outstanding under the Securitization Program were cancelled in connection with the surety agreement amendment and related trust accounts described above.

The Company incurred interest and fees associated with the Securitization Program of $ 1.0 million and $ 0.9 million during the three months ended March 31, 2023 and 2022, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

At June 30, 2023, the Com pany had no outstanding borrowings and $ 117.8 million o f letters of credit outstanding under the Securitization Program, primarily in support of reclamation obligations.

Availability under the Securitizatio n Program, which is adjusted for certain ineligible receivables, was $ 34.8 million at June 30, 2023.

The Company was not required to post cash collateral under the Securitization Program at June 30, 2023.

The Company incurred interest and fees associated with the Securitization Program of $ 0.8 million and $ 0.9 million during the three months ended June 30, 2023 and 2022, respectively, and $ 1.9 million and $ 1.8 million during the six months ended June 30, 2023 and 2022, 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 March 31, 2023, letters of credit of $ 245.3 million were outstanding under the agreement, which were collateralized by cash of approximately $ 250.0 million.

At June 30, 2023, letters of credit of $ 168.2 million were outstanding under the agreement, which were collateralized by cash of $ 173.2 million.

PEABODY ENERGY CORPORATION

5 unchanged sentences

The Company’s other collateral generally includes deposits held by regulatory authorities or financial institutions over which the Company has no control or ability to access.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(Dollars in millions)

12 unchanged sentences

interest and other earnings on such funds accrue to the Company.

(3) Balance relates to the Company’s mandatory repurchase of $ 30.0 million priority lien obligations under the LC Facility during 2022 at approximately 95 %.

The Company received $ 30.0 million upon termination of the LC Facility on April 14, 2023 .

(3) Balance related to the Company’s mandatory repurchase of $ 30.0 million priority lien obligations under the LC Facility during 2022 at approximately 95 %.

The Company received approximately $ 30.0 million upon termination of the LC Facility on April 14, 2023 .

(12) Commitments and Contingencies

Unconditional Purchase Obligations

As of March 31, 2023, purchase commitments for capital expenditures were $ 105.4 million, all of which is obligated within the next two years, with $ 97.4 million obligated within the next 12 months.

As of June 30, 2023, purchase commitments for capital expenditures were $ 100.8 million, all of which is obligated within the next two years, with $ 94.1 million obligated within the next 12 months.

There were no other material changes to the Company’s commitments from the information provided in Note 21.

12 unchanged sentences

Metropolitan Collieries Pty Ltd (MCPL), a wholly-owned subsidiary of PEC, removed accumulated material from the sedimentation dams to restore full site stormwater capacity by December 31, 2022 and has identified and is implementing additional controls for the management of sediment moving forward.

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 and a review process of the Metropolitan Mine’s environmental protection license is ongoing.

The Environment Protection Authority is investigating potential offenses against the environmental protection legislation arising from the stormwater discharges from the site.

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 and whether there are potential offenses against the environmental protection legislation arising from the stormwater discharges from the site.

The Environmental Protection Authority has also completed a review of MCPL’s environmental protection license and has implemented some additional compliance conditions.

Puerto Rico Climate Change Lawsuit .

4 unchanged sentences

On April 21, 2023, the plaintiffs filed a Notice of Voluntary Dismissal dismissing all claims against the Company without prejudice.

Oregon Climate Change Lawsuit.

On July 20, 2023, Peabody Energy was served with a summons issued on behalf of Multnomah County, Oregon.

The complaint seeks damages from the Company and other major energy producers for allegedly causing an “extreme heat event” in Multnomah County in late June and early July 2021.

The causes of action, pursuant to Oregon state law, include a failure to warn, false or misleading advertisement and public nuisance.

The Company will defend the claim and will continue to assert all applicable defenses available in regards to these claims.

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.

7 unchanged sentences

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

In May 2015, Patriot again filed voluntary petitions for relief under the Bankruptcy Code in the U.S.

District Court for the Eastern District of Virginia and subsequently initiated a process to sell substantially all of its assets to qualified bidders.

In May 2015, Patriot again filed voluntary petitions for relief under the Bankruptcy Code and subsequently initiated a process to sell substantially all of its assets to qualified bidders.

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.

10 unchanged sentences

Management believes that inconsistencies exist among the applicable statutes, regulations promulgated under those statutes and the DOL’s interpretative guidance.

The Company has sought clarification from the DOL regarding these inconsistencies.

The Company has sought clarification from the DOL regarding these inconsistencies and has challenged the DOL’s position in individual black lung claims.

The amount of these liabilities could be reduced in the future.

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 $ 80.7 million and $ 82.3 million at March 31, 2023 and December 31, 2022, respectively.

The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $ 80.0 million and $ 82.3 million at June 30, 2023 and December 31, 2022, respectively.

The liability, which is classified as discontinued operations, is included in the Company’s condensed consolidated balance sheets 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.

3 unchanged sentences

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.

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

Thermal and Corporate and Other.

The Company’s chief operating decision maker, defined as its Chief Executive Officer, uses Adjusted EBITDA as the primary metric to measure the segments’ operating performance and allocate resources.

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 a non-GAAP financial measure defined as income 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.

Management believes non-GAAP performance measures are used by investors to measure the Company’s operating performance.

Management believes this non-GAAP performance measure is also used by investors to measure the Company’s operating performance.

Adjusted EBITDA is not intended to serve as an alternative to U.S.

1 unchanged sentence

Reportable segment results were as follows:

Three Months Ended March 31,

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

2023 2022 2023 2022

(Dollars in millions)

Seaborne Thermal Mining $ 346.5 $ 251.2

Seaborne Metallurgical Mining 288.4 321.3

Powder River Basin Mining 305.3 251.2

Thermal Mining 249.4 203.1

Seaborne Thermal $ 399.5 $ 354.9 $ 746.0 $ 606.1

Seaborne Metallurgical 372.5 533.8 660.9 855.1

Powder River Basin 259.7 229.7 565.0 480.9

Thermal 199.9 224.9 449.3 428.0

Corporate and Other 37.2 ( 21.4 ) 211.6 ( 356.8 )

1 unchanged sentence

Adjusted EBITDA:

Seaborne Thermal Mining $ 164.0 $ 90.5

Seaborne Metallurgical Mining 90.8 181.0

Powder River Basin Mining 35.8 7.6

Thermal Mining 64.2 50.0

Seaborne Thermal $ 197.5 $ 176.8 $ 361.5 $ 267.3

Seaborne Metallurgical 102.5 299.7 193.3 480.7

Powder River Basin 26.2 ( 2.0 ) 62.0 5.6

Thermal 51.9 61.9 116.1 111.9

Corporate and Other ( 19.9 ) 41.4 15.9 39.8

2 unchanged sentences

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 March 31,

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

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

2023 2022 2023 2022

(Dollars in millions)

Income (loss) from continuing operations, net of income taxes $ 284.1 $ ( 119.8 )

Income from continuing operations, net of income taxes $ 204.1 $ 411.3 $ 488.2 $ 291.5

Depreciation, depletion and amortization 80.6 73.8 156.9 146.7

2 unchanged sentences

Asset impairment — — 2.0 —

Provision for NARM and Shoal Creek loss 33.7 — 33.7 —

Changes in amortization of basis difference related to equity affiliates ( 0.4 ) ( 0.6 ) ( 0.7 ) ( 1.2 )

3 unchanged sentences

Unrealized (gains) losses on derivative contracts related to forecasted sales ( 40.3 ) 24.5 ( 159.0 ) 325.5

Unrealized losses (gains) on foreign currency option contracts 2.2 ( 3.3 )

Unrealized (gains) losses on foreign currency option contracts ( 2.8 ) 6.3 ( 0.6 ) 3.0

Take-or-pay contract-based intangible recognition ( 0.6 ) ( 0.7 ) ( 1.2 ) ( 1.4 )

Income tax provision (benefit) 118.0 ( 1.0 )

Income tax provision 74.2 11.3 192.2 10.3

Adjusted EBITDA $ 358.2 $ 577.8 $ 748.8 $ 905.3

(14) Other Events

Share Repurchases

During the three months ended June 30, 2023, the Company repurchased approximately 8.9 million shares of its common stock for $ 184.2 million, including commission fees.

Of this amount, $ 11.2 million related to repurchases which settled subsequent to June 30, 2023.

The Company recognized excise taxes of $ 1.6 million related to the repurchases, which were unpaid at June 30, 2023.

The Company includes commission fees and excise taxes, as incurred, with the cost of treasury stock.

Subsequent to June 30, 2023, the Company repurchased an additional 3.1 million shares for $ 67.0 million.

North Antelope Rochelle Mine Tornado

On June 23, 2023, the Company’s North Antelope Rochelle Mine sustained damage from a tornado which led to a temporary suspension of operations.

The mine resumed operations on June 25, 2023.

During the three and six months ended June 30, 2023, the Company recorded a provision for loss of $ 5.0 million related to the tornado damage.

The provision includes $ 4.0 million for materials and supplies inventories and $ 1.0 million for buildings and equipment.

This provision represents the best estimate of potential loss based on the assessments made to date.

The Company continues to assess the loss and anticipates that incremental repair costs will be recorded in future periods.

Shoal Creek Incident

On March 29, 2023, the Company’s Shoal Creek Mine experienced a fire involving void fill material utilized to stabilize the roof structure of the mine.

All mine personnel were safely evacuated from the mine.

The Mine Safety and Health Administration (MSHA) has allowed mine rescue-equipped personnel into the mine at various times to assess the situation.

On April 26, 2023, MSHA approved a temporary sealing program which was completed on April 28, 2023, and the Company continues to monitor air quality in the affected underground area.

On June 20, 2023, the Company announced that the Shoal Creek Mine, in coordination with the Mine Safety and Health Administration, had safely completed localized sealing of the affected area of the mine.

Development coal production has been resumed in a new area of the mine.

During the three and six months ended June 30, 2023, the Company recorded a provision for loss of $ 28.7 million related to the fire.

The provision includes $ 17.8 million related to longwall development and other costs and $ 10.9 million for equipment deemed inoperable within the affected area of the mine.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Port and Rail Capacity Assignment

During the three months ended March 31, 2023, the Company entered into an agreement to assign the right to its excess port and rail capacity related to its North Goonyella Mine to an unrelated party in exchange for $ 30.0 million Australian dollars.

During the six months ended June 30, 2023, the Company entered into an agreement to assign the right to its excess port and rail capacity related to its North Goonyella Mine to an unrelated party in exchange for $ 30.0 million Australian dollars.

Half of such amount was received by the Company upon entry into the agreement, and half is payable in June 2024, subject to certain conditions.

The Company recorded revenue of $ 19.2 million and a discounted long-term receivable of $ 9.2 million in connection with the transaction during the three months ended March 31, 2023.

In connection with the transaction, the Company recorded revenue of $ 19.2 million during the six months ended June 30, 2023 and had a discounted receivable of $ 9.3 million included in “Accounts receivable, net” as of June 30, 2023.

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