What changed in this filing

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Item 1. Financial Statements

2023-11-03 compared with 2023-08-03 · 149 added, 141 removed, 704 unchanged (29% 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,

2023 2022 2023 2022

7 unchanged sentences

Restructuring charges 0.9 1.0 3.0 2.8

Other operating income:

Other operating (income) loss:

Net gain on disposals ( 1.4 ) ( 5.0 ) ( 8.5 ) ( 22.7 )

10 unchanged sentences

Income from continuing operations, net of income taxes 128.8 384.4 617.0 675.9

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

Income (loss) from discontinued operations, net of income taxes 2.5 ( 0.8 ) ( 0.1 ) ( 2.3 )

Net income 131.3 383.6 616.9 673.6

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,

2023 2022 2023 2022

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(Amounts in millions, except per share data)

1 unchanged sentence

Cash and cash equivalents $ 988.5 $ 1,307.3

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

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

Inventories, net 352.0 296.1

21 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

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

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

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

Common Stock — $ 0.01 per share par value;

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

450.0 shares authorized, 188.6 shares issued and 132.2 shares outstanding as of September 30, 2023 and 187.1 shares issued and 143.9 shares outstanding as of December 31, 2022

Additional paid-in capital 3,981.2 3,975.9

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

Treasury stock, at cost — 56.4 and 43.2 common shares as of September 30, 2023 and December 31, 2022

( 1,655.7 ) ( 1,372.9 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

9 unchanged sentences

Asset impairment 2.0 1.7

Provision for NARM and Shoal Creek loss 33.7 —

Noncash provision for NARM and Shoal Creek loss 33.7 —

Net gain on disposals ( 8.5 ) ( 22.7 )

19 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

18 unchanged sentences

Distributions to noncontrolling interests ( 58.9 ) ( 17.5 )

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

Net cash used in financing activities ( 364.5 ) ( 120.5 )

Net change in cash, cash equivalents and restricted cash 214.0 444.7

14 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,

2023 2022 2023 2022

12 unchanged sentences

Common stock repurchases ( 91.0 ) — ( 264.0 ) —

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

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

Net change in unsettled common stock repurchases 8.6 — ( 2.6 ) —

Excise tax accrued on common stock repurchases ( 0.9 ) — ( 2.5 ) —

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

32 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 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.

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

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

Accounting Standards Not Yet Implemented

Joint Ventures.

In August 2023, Accounting Standards Update 2023-05 was issued, which requires joint ventures to recognize and measure the initial contributions of monetary and nonmonetary assets and its net assets at fair value.

The Company is required to apply the amendments for joint ventures with a formation date on or after January 1, 2025.

A joint venture that was formed before January 1, 2025 may apply the amendments retrospectively.

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

(3) Revenue Recognition

4 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 June 30, 2023

Three Months Ended September 30, 2023

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

11 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

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

9 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Seaborne Thermal Seaborne Metallurgical Powder River Basin 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 Seaborne Metallurgical Powder River Basin 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,

2023 2022 2023 2022

15 unchanged sentences

Accounts Receivable

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

June 30, 2023 December 31, 2022

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

September 30, 2023 December 31, 2022

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 348.4 $ 465.5

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.

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

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

PEABODY ENERGY CORPORATION

1 unchanged sentence

(4) Inventories

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

June 30, 2023 December 31, 2022

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

September 30, 2023 December 31, 2022

(Dollars in millions)

3 unchanged sentences

Inventories, net $ 352.0 $ 296.1

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.

Materials and supplies inventories, net presented above have been shown net of reserves of $ 7.8 million and $ 9.5 million as of September 30, 2023 and December 31, 2022.

(5) Equity Method Investments

2 unchanged sentences

(Income) Loss from Equity Affiliates

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

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

Book Value at Three Months Ended September 30, Nine Months Ended September 30,

September 30, 2023 December 31, 2022 2023 2022 2023 2022

(Dollars in millions)

2 unchanged sentences

Total equity method investments $ 47.5 $ 34.1 $ ( 5.6 ) $ ( 27.5 ) $ ( 9.7 ) $ ( 120.9 )

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.

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

Payments of $ 151.5 million were received from Middlemount during the nine months ended September 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 June 30, 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 September 30, 2023.

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

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

There was no outstanding revolving loan at September 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 $ 3.5 million and $ 2.5 million to R3 during the six months ended June 30, 2023 and 2022, respectively.

The Company contributed $ 5.5 million and $ 10.9 million to R3 during the nine months ended September 30, 2023 and 2022, respectively.

(6) Derivatives and Fair Value Measurements

5 unchanged sentences

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.

The Company had no diesel fuel or interest rate derivatives in place as of September 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 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 Company has historically utilized currency forwards and options to hedge currency risk associated with anticipated Australian dollar operating expenditures.

As of September 30, 2023, the Company held average rate options with an aggregate notional amount of $ 615.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar operating expenditures over the nine-month period ending June 30, 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 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.

dollar exchange rate exceed amounts ranging from $ 0.70 to $ 0.72 over the nine-month period ending June 30, 2024.

As of September 30, 2023, the Company also held purchased collars with an aggregate notional amount of $ 339.0 million Australian dollars related to anticipated Australian dollar operating expenditures during the six-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 June 30, 2023, the Company had no coal derivative contracts related to its forecasted sales.

As of September 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.

During the three months ended September 30, 2023, the Company recorded no unrealized mark-to-market gains or losses on coal derivative contracts.

During the three months ended September 30, 2022, the Company recorded a net unrealized mark-to-market gain of $ 90.4 million on coal derivative contracts, which included 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, 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 nine months ended September 30, 2022, the Company recorded a net unrealized mark-to-market loss of $ 235.1 million on coal derivative contracts, which included 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, 2023.

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

PEABODY ENERGY CORPORATION

5 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Asset Derivative Liability Derivative Asset Derivative Liability Derivative

8 unchanged sentences

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, 2023, the Company had no margin cash posted.

As of September 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.

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.

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

2 unchanged sentences

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 June 30, 2023

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

Three Months Ended September 30, 2023

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

Derivative Instrument Classification

1 unchanged sentence

Foreign currency option contracts Operating costs and expenses $ ( 2.7 ) $ ( 2.2 ) $ ( 0.5 )

Derivative contracts related to forecasted sales Revenue 10.0 ( 30.3 ) 40.3

Financial trading contracts Revenue ( 0.1 ) ( 19.7 ) 19.6

Total $ ( 2.8 ) $ ( 21.9 ) $ 19.1

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

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

5 unchanged sentences

Total $ 70.3 $ ( 77.3 ) $ 147.6

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

16 unchanged sentences

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

June 30, 2023

September 30, 2023

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, 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 September 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.

June 30, 2023 December 31, 2022

September 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 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 and six months ended June 30, 2023 and 2022.

During the nine months ended September 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.

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

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

(7) Property, Plant, Equipment and Mine Development

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

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

September 30, 2023 December 31, 2022

(Dollars in millions)

4 unchanged sentences

Property, plant, equipment and mine development, net $ 2,805.5 $ 2,865.0

Asset Impairment and Other At-Risk Assets

The Company identified certain assets with an aggregate carrying value of approximately $ 388 million at September 30, 2023 in its Powder River Basin and Other U.S.

Thermal segments whose recoverability is most sensitive to customer demand and customer concentration risk.

The Company conducted a review of those assets as of September 30, 2023 and determined that no impairment charges were necessary as of that date.

(8) Income Taxes

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 effective tax rate before remeasurement for the nine months ended September 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 $ 46.5 million and $ 10.7 million for the three months ended September 30, 2023 and 2022, respectively, included tax benefits of $ 3.3 million and $ 1.6 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provisions of $ 238.7 million and $ 21.0 million for the nine months ended September 30, 2023 and 2022, respectively, included tax benefits of $ 2.6 million and $ 3.5 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.

2 unchanged sentences

(9) Long-term Debt

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

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

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

(Dollars in millions)

5 unchanged sentences

Long-term debt $ 320.9 $ 320.6

During 2022, the Company utilized various methods allowable or required under its then-existing debt agreements to retire all of its senior secured long-term debt, leaving only its unsecured 3.250 % Convertible Senior Notes due 2028 (the 2028 Convertible Notes), which are further described below, and various finance lease obligations outstanding at December 31, 2022.

During 2022, the Company utilized various methods allowable or required under its then-existing debt agreements to retire all of its senior secured long-term debt, leaving only its unsecured 3.250 % Convertible Senior Notes due March 2028 (2028 Convertible Notes), which are further described below, and various finance lease obligations outstanding at December 31, 2022.

2028 Convertible Notes

6 unchanged sentences

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 .

Under the applicable conversion rate formula, the $ 0.150 per share dividends declared and paid during the nine months ended September 30, 2023 yielded a revised conversion rate of 50.7205 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.

During the first three 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 or third quarters of 2023, and will not be similarly convertible during the fourth quarter of 2023.

As of September 30, 2023, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $ 99.0 million.

PEABODY ENERGY CORPORATION

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,

2023 2022 2023 2022

6 unchanged sentences

Covenant Compliance

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

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

The April 2023 termination of the Company’s credit agreement and related letter of credit facility, as described in Note 12.

3 unchanged sentences

Net periodic pension cost (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,

2023 2022 2023 2022

(Dollars in millions)

Service cost for benefits earned $ 0.1 $ 0.1 $ 0.1 $ 0.1

Interest cost on projected benefit obligation 3.6 5.3 18.4 16.0

3 unchanged sentences

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

As of June 30, 2023, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds.

As of September 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 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.

Under the commitment agreement, the Peabody Plan purchased a buy-in group annuity contract (GAC) from Prudential for approximately $ 500 million, which was funded directly by the Peabody Plan’s assets.

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

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.

6 unchanged sentences

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.

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.

On July 31, 2023, as part of the completion of the standard Employee Retirement Income Security Act plan termination process for the Peabody Plan, 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.

During the nine months ended September 30, 2023, the Company settled $ 442.0 million of its pension obligations for active and deferred participants in the Peabody Plan with an equal amount paid from plan assets.

Any settlement gain or loss related to the termination process will be recorded during the fourth quarter, but the Company does not expect a material impact to its results.

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,

2023 2022 2023 2022

21 unchanged sentences

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.

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for the three and nine months ended September 30, 2023 and 2022 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.

1 unchanged sentence

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,

2023 2022 2023 2022

4 unchanged sentences

Income from continuing operations attributable to common stockholders 117.4 375.9 567.7 667.4

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

Income (loss) from discontinued operations, net of income taxes 2.5 ( 0.8 ) ( 0.1 ) ( 2.3 )

Net income attributable to common stockholders $ 119.9 $ 375.1 $ 567.6 $ 665.1

4 unchanged sentences

Income from continuing operations attributable to common stockholders 120.4 378.5 576.8 673.5

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

Income (loss) from discontinued operations, net of income taxes 2.5 ( 0.8 ) ( 0.1 ) ( 2.3 )

Net income attributable to common stockholders $ 122.9 $ 377.7 $ 576.7 $ 671.2

7 unchanged sentences

Income from continuing operations $ 0.88 $ 2.61 $ 4.06 $ 4.72

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

Income (loss) from discontinued operations 0.02 ( 0.01 ) ( 0.01 ) ( 0.02 )

Net income attributable to common stockholders $ 0.90 $ 2.60 $ 4.05 $ 4.70

1 unchanged sentence

Income from continuing operations $ 0.80 $ 2.34 $ 3.68 $ 4.33

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

Income (loss) from discontinued operations 0.02 ( 0.01 ) — ( 0.02 )

Net income attributable to common stockholders $ 0.82 $ 2.33 $ 3.68 $ 4.31

7 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Reclamation Support Other Support (1)

15 unchanged sentences

Prior to the April 2023 amendment, the Company had posted cumulative collateral of $ 557.8 million, primarily in the form of letters of credit.

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.

Under the April 2023 amendment, the Company and its 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 represented a negotiated increase from the uncapped cumulative collateral amount prior to the amendment and will vary prospectively as bonding levels increase or decrease.

1 unchanged sentence

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, which was $ 533.6 million at June 30, 2023.

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.

10 unchanged sentences

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 $ 8.8 million during the six months ended June 30, 2023 as a result of the February 2023 amendment and subsequent termination.

The Company recorded early debt extinguishment losses of $ 8.8 million during the nine months ended September 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 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.

At September 30, 2023, the Com pany had no outstanding borrowings and $ 107.4 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 $ 79.8 million at September 30, 2023.

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

The Company incurred interest and fees associated with the Securitization Program of $ 0.9 million and $ 1.2 million during the three months ended September 30, 2023 and 2022, respectively, and $ 2.8 million and $ 3.4 million during the nine months ended September 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 June 30, 2023, letters of credit of $ 168.2 million were outstanding under the agreement, which were collateralized by cash of $ 173.2 million.

At September 30, 2023, letters of credit of $ 167.0 million were outstanding under the agreement, which were collateralized by cash of $ 172.0 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.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(Dollars in millions)

16 unchanged sentences

Unconditional Purchase Obligations

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.

As of September 30, 2023, purchase commitments for capital expenditures were $ 91.1 million, all of which is obligated within the next two years, with $ 84.7 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.

9 unchanged sentences

Over the past few 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.

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 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 .

On November 22, 2022, the Municipalities of Puerto Rico filed a class action complaint for damages against several major energy fuel producers, including Peabody Energy.

This lawsuit represents the latest in a series of lawsuits that have been brought in both state and federal court around the United States, generally seeking to impose liability on the energy fuel producers for the effects allegedly caused by climate change.

Many of these lawsuits have been brought on behalf of governmental entities (counties, cities, and towns) by plaintiff law firms on a contingent fee arrangement.

The causes of action in the Puerto Rico lawsuit include public and private nuisance, liability for failure to warn, consumer fraud, antitrust and claims under the Racketeer Influenced and Corrupt Organizations Act.

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

While stormwater collected at the mine site is managed through two sedimentation dams, at times the heavy rainfall 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 was discharged from the mine site.

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 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 commenced a prosecution for five breaches of the Protection of the Environment Operations Act 1997 on September 6, 2023.

Oregon Climate Change Lawsuit.

20 unchanged sentences

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

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

The Company’s accounting for the black lung liabilities related to Patriot was based on an interpretation of applicable statutes.

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

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

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

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Company’s accounting for the black lung liabilities related to Patriot is based on an interpretation of applicable statutes.

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 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 $ 80.0 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.

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.

On August 8, 2023, the Company entered into a settlement agreement to resolve the liability dispute with the DOL.

In accordance with the settlement agreement, the Company paid $ 72.0 million to settle the Patriot Federal Black Lung Claims, with the exception of approximately $ 4.2 million of certain claims for attorney’s fees and additional compensation due to claimants not paid during appeal.

As a result of the settlement, the Company recognized a $ 3.9 million gain within “Income (loss) from discontinued operations, net of income taxes” during the three and nine months ended September 30, 2023 .

(14) Segment Information

9 unchanged sentences

Reportable segment results were as follows:

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

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

2023 2022 2023 2022

16 unchanged sentences

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,

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

2023 2022 2023 2022

11 unchanged sentences

Unrealized (gains) losses on derivative contracts related to forecasted sales — ( 90.4 ) ( 159.0 ) 235.1

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

Unrealized losses (gains) on foreign currency option contracts 0.5 1.4 ( 0.1 ) 4.4

Take-or-pay contract-based intangible recognition ( 0.7 ) ( 0.8 ) ( 1.9 ) ( 2.2 )

2 unchanged sentences

(15) Other Events

Coal Deposit Acquisition

The Company entered into a definitive agreement dated October 26, 2023, with Stanmore SMC Pty Ltd (Stanmore) to acquire the southern part of Stanmore’s Wards Well tenements (Wards Well area) which are adjacent to the Company’s North Goonyella Mine in Queensland, Australia.

The acquisition terms include cash consideration of $ 136 million and a contingent royalty of up to $ 200 million.

The royalty will only be payable once the Company has recovered its investment and development costs of the Wards Well area and if the average sales price achieved exceeds certain thresholds.

No royalty is payable if the Company does not commence mining in the Wards Well area.

Completion of the transaction is subject to the satisfaction of certain conditions, including regulatory approvals.

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.

During the three and nine months ended September 30, 2023, the Company repurchased approximately 3.7 million shares and 12.6 million shares, respectively, of its common stock for $ 82.4 million and $ 266.6 million, respectively, including commission fees.

Of this amount, $ 2.6 million related to repurchases which settled subsequent to September 30, 2023.

As of September 30, 2023, the Company had accrued excise taxes of $ 2.5 million related to the repurchases, which were unpaid at September 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.

At September 30, 2023, $ 733.6 million remained available under its share repurchase program.

From October 1, 2023 through October 27, 2023, the Company repurchased an additional 1.1 million shares for $ 27.3 million.

North Antelope Rochelle Mine Tornado

1 unchanged sentence

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.

During the three and nine months ended September 30, 2023, the Company recorded a provision for loss of $ 3.3 million and $ 8.3 million, respectively, related to the tornado damage.

The combined provision includes $ 4.0 million for materials and supplies inventories, $ 1.0 million for buildings and equipment and $ 3.3 million for incremental repair costs.

The Company anticipates that incremental repair costs will continue to be recorded in future periods.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Shoal Creek Incident

2 unchanged sentences

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.

During the nine months ended September 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)

In October, the Company filed an insurance claim against applicable insurance policies with combined business interruption and property loss limits of $ 125 million above a $ 50 million deductible.

Port and Rail Capacity Assignment

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.

During the nine months ended September 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.

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.

In connection with the transaction, the Company recorded revenue of $ 19.2 million during the nine months ended September 30, 2023 and had a discounted receivable of $ 9.4 million included in “Accounts receivable, net” as of September 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