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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 201 added, 129 removed, 607 unchanged (35% 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,

2024 2023 2024 2023

(Dollars in millions, except per share data)

9 unchanged sentences

Asset impairment — — — 2.0

Provision for NARM loss 1.8 —

Provision for NARM and Shoal Creek losses 1.9 33.7 3.7 33.7

Shoal Creek insurance recovery ( 109.5 ) — ( 109.5 ) —

Loss (income) from equity affiliates 1.3 ( 2.3 ) 5.0 ( 4.1 )

Operating profit 233.9 260.8 285.1 665.3

Interest expense 14.7 18.4

Interest expense, net of capitalized interest 10.7 13.3 25.4 31.7

Net loss on early debt extinguishment — 2.0 — 8.8

17 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

10 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Amounts in millions, except per share data)

1 unchanged sentence

Cash and cash equivalents $ 621.7 $ 969.3

Accounts receivable, net of allowance for credit losses of $ 0.0 at March 31, 2024 and December 31, 2023

Accounts receivable, net of allowance for credit losses of $ 0.0 at June 30, 2024 and December 31, 2023

Inventories, net 422.1 351.8

20 unchanged sentences

Preferred Stock — $ 0.01 per share par value;

100.0 shares authorized, no shares issued or outstanding as of March 31, 2024 and December 31, 2023

100.0 shares authorized, no shares issued or outstanding as of June 30, 2024 and December 31, 2023

Series Common Stock — $ 0.01 per share par value;

50.0 shares authorized, no shares issued or outstanding as of March 31, 2024 and December 31, 2023

50.0 shares authorized, no shares issued or outstanding as of June 30, 2024 and December 31, 2023

Common Stock — $ 0.01 per share par value;

450.0 shares authorized, 189.0 shares issued and 125.8 shares outstanding as of March 31, 2024 and 188.6 shares issued and 128.7 shares outstanding as of December 31, 2023

450.0 shares authorized, 189.1 shares issued and 125.9 shares outstanding as of June 30, 2024 and 188.6 shares issued and 128.7 shares outstanding as of December 31, 2023

Additional paid-in capital 3,987.2 3,983.0

Treasury stock, at cost — 63.2 and 59.9 common shares as of March 31, 2024 and December 31, 2023

Treasury stock, at cost — 63.2 and 59.9 common shares as of June 30, 2024 and December 31, 2023

( 1,825.5 ) ( 1,740.2 )

8 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

9 unchanged sentences

Asset impairment — 2.0

Noncash provision for NARM and Shoal Creek losses — 33.7

Net gain on disposals ( 9.6 ) ( 7.1 )

2 unchanged sentences

Loss (income) from equity affiliates 5.0 ( 4.1 )

Shoal Creek insurance recovery ( 109.5 ) —

Foreign currency option contracts 3.3 ( 0.6 )

15 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

2 unchanged sentences

Changes in accrued expenses related to capital expenditures ( 13.7 ) ( 5.4 )

Wards Well acquisition ( 143.8 ) —

Insurance proceeds attributable to Shoal Creek equipment losses 5.6 —

Proceeds from disposal of assets, net of receivables 15.5 12.0

27 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions, except per share data)

17 unchanged sentences

Dividends declared ($ 0.075 , $ 0.075 , $ 0.150 and $ 0.075 per share, respectively)

( 9.4 ) ( 10.9 ) ( 19.2 ) ( 10.9 )

Balance, end of period 1,332.5 820.7 1,332.5 820.7

25 unchanged sentences

Balance sheet information presented herein as of December 31, 2023 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, 2024 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2024.

The Company’s results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2024.

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

6 unchanged sentences

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

The Company will apply the guidance to any newly formed joint ventures.

In November 2023, ASU 2023-07 was issued, which requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss that are currently required annually;

20 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, 2024

Three Months Ended June 30, 2024

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

9 unchanged sentences

Revenue $ 307.5 $ 294.3 $ 221.9 $ 202.0 $ 16.3 $ 1,042.0

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

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

9 unchanged sentences

Revenue $ 399.5 $ 372.5 $ 259.7 $ 199.9 $ 37.2 $ 1,268.8

Six Months Ended June 30, 2024

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

Thermal Corporate and Other (1)

(Dollars in millions)

Domestic $ 77.5 $ — $ 475.5 $ 378.3 $ — $ 931.3

Export 513.7 — — — — 513.7

Total thermal 591.2 — 475.5 378.3 — 1,445.0

Metallurgical coal

Export — 538.0 — — — 538.0

Total metallurgical — 538.0 — — — 538.0

0.2 3.3 0.5 15.3 23.3 42.6

Revenue $ 591.4 $ 541.3 $ 476.0 $ 393.6 $ 23.3 $ 2,025.6

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(1) Corporate and Other includes the following:

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

2 unchanged sentences

Revenue from physical sale of coal (3)

12.1 23.3 14.2 107.8

Trading revenue — 0.1 — 0.1

4.2 3.8 9.1 25.6

Total Corporate and Other $ 16.3 $ 37.2 $ 23.3 $ 211.6

4 unchanged sentences

and revenue related to the Company’s assignment of rights to its excess port and rail capacity.

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

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts Receivable

“Accounts receivable, net” at March 31, 2024 and December 31, 2023 consisted of the following:

March 31, 2024 December 31, 2023

“Accounts receivable, net” at June 30, 2024 and December 31, 2023 consisted of the following:

June 30, 2024 December 31, 2023

(Dollars in millions)

2 unchanged sentences

Accounts receivable, net $ 511.6 $ 389.7

None of the above receivables included allowances for credit losses at March 31, 2024 or December 31, 2023.

No charges for credit losses were recognized during the three months ended March 31, 2024 or 2023.

None of the above receivables included allowances for credit losses at June 30, 2024 or December 31, 2023.

No charges for credit losses were recognized during the three and six months ended June 30, 2024 or 2023.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(4) Inventories

“Inventories, net” as of March 31, 2024 and December 31, 2023 consisted of the following:

March 31, 2024 December 31, 2023

“Inventories, net” as of June 30, 2024 and December 31, 2023 consisted of the following:

June 30, 2024 December 31, 2023

(Dollars in millions)

3 unchanged sentences

Inventories, net $ 422.1 $ 351.8

Materials and supplies inventories, net presented above have been shown net of reserves of $ 6.4 million and $ 7.2 million as of March 31, 2024 and December 31, 2023, respectively.

Materials and supplies inventories, net presented above have been shown net of reserves of $ 6.6 million and $ 7.2 million as of June 30, 2024 and December 31, 2023, respectively.

(5) Equity Method Investments

The Company’s equity method investments include its joint venture interest in Middlemount Coal Pty Ltd (Middlemount), R3 Renewables LLC (R3) and certain other equity method investments.

The Company’s equity method investments include its interests in Middlemount Coal Pty Ltd (Middlemount), R3 Renewables LLC (R3) and certain other equity method investments.

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

Loss (Income) from Equity Affiliates

Book Value at Three Months Ended March 31,

March 31, 2024 December 31, 2023 2024 2023

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

June 30, 2024 December 31, 2023 2024 2023 2024 2023

(Dollars in millions)

2 unchanged sentences

Total equity method investments $ 51.6 $ 49.6 $ 1.3 $ ( 2.3 ) $ 5.0 $ ( 4.1 )

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 $ 4.5 million and $ 2.0 million to R3 during the three months ended March 31, 2024 and 2023, respectively.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company contributed $ 8.4 million and $ 3.5 million to R3 during the six months ended June 30, 2024 and 2023, respectively.

(6) Derivatives and Fair Value Measurements

3 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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign Currency

The Company utilizes options and collars to hedge currency risk associated with anticipated Australian dollar operating expenditures.

As of March 31, 2024, the Company held average rate options with an aggregate notional amount of $ 516.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar operating expenditures over the nine-month period ending December 31, 2024.

As of June 30, 2024, the Company held average rate options with an aggregate notional amount of $ 455.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar operating expenditures over the nine-month period ending March 31, 2025.

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 $ 0.69 to $ 0.72 over the nine-month period ending December 31, 2024.

As of March 31, 2024, the Company also held purchased collars with an aggregate notional amount of $ 431.0 million Australian dollars related to anticipated Australian dollar operating expenditures during the nine-month period ending December 31, 2024.

dollar exchange rate exceed amounts ranging from $ 0.70 to $ 0.71 over the nine-month period ending March 31, 2025.

As of June 30, 2024, the Company also held purchased collars with an aggregate notional amount of $ 507.0 million Australian dollars related to anticipated Australian dollar operating expenditures during the nine-month period ending March 31, 2025.

The purchased collars have a floor and ceiling of approximately $ 0.59 and $ 0.72 , 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, 2024, the Company had no coal derivative contracts related to its forecasted sales.

As of June 30, 2024, the Company had no coal derivative contracts related to its forecasted sales.

Historically, such financial contracts have included futures and forwards.

2 unchanged sentences

Such financial contracts may include futures, forwards and options.

The Company held nominal financial trading contracts as of March 31, 2024.

The Company held nominal financial trading contracts as of June 30, 2024.

Tabular Derivatives Disclosures

2 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, the Company had asset derivatives comprised of foreign currency option contracts with a fair value of $ 0.7 million and $ 6.2 million, respectively.

As of June 30, 2024 and December 31, 2023, the Company had asset derivatives comprised of foreign currency option contracts with a fair value of $ 2.2 million and $ 6.2 million, respectively.

The net amount of asset derivatives is included in “Other current assets” in the accompanying condensed consolidated balance sheets.

3 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 March 31, 2024

Three Months Ended June 30, 2024

Total gain recognized in income Loss realized in income on derivatives Unrealized gain recognized in income on derivatives

Derivative Instrument Classification

(Dollars in millions)

Foreign currency option contracts Operating costs and expenses $ 0.8 $ ( 1.6 ) $ 2.4

Total $ 0.8 $ ( 1.6 ) $ 2.4

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

(Dollars in millions)

Foreign currency option contracts Operating costs and expenses $ ( 0.1 ) $ ( 2.9 ) $ 2.8

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

Financial trading contracts Revenue 0.1 13.9 ( 13.8 )

Total $ 10.0 $ ( 19.3 ) $ 29.3

Six Months Ended June 30, 2024

Total loss recognized in income Loss realized in income on derivatives Unrealized loss recognized in income on derivatives

3 unchanged sentences

Total $ ( 5.7 ) $ ( 2.4 ) $ ( 3.3 )

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

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

11 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 asset positions for which fair value is measured on a recurring basis.

March 31, 2024

June 30, 2024

Level 1 Level 2 Level 3 Total

9 unchanged sentences

Total net assets $ 0.4 $ 6.2 $ — $ 6.6

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For Level 1 and 2 financial assets and liabilities, the Company utilizes both direct and indirect observable price quotes, including interest rate yield curves, exchange indices, broker/dealer quotes, published indices, issuer spreads, benchmark securities and other market quotes.

3 unchanged sentences

• Derivative contracts related to forecasted sales and financial trading contracts are generally valued based on unadjusted quoted prices in active markets (Level 1) or a valuation that is corroborated by the use of market-based pricing (Level 2) except when credit and non-performance risk is considered to be a significant input (greater than 10 % of fair value), then the Company classifies as Level 3.

• Investments in equity securities are currently based on unadjusted quoted prices in active markets (Level 1).

• Investments in equity securities are based on unadjusted quoted prices in active markets (Level 1).

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, 2024 and December 31, 2023:

The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of June 30, 2024 and December 31, 2023:

• 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.

2 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Dollars in millions)

6 unchanged sentences

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

Significant increases or decreases in the inputs in isolation could result in a significantly higher or lower fair value measurement.

The unobservable inputs do not have a direct interrelationship;

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.

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 months ended March 31, 2024 and 2023.

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

The Company had no transfers between Levels 1, 2 and 3 during the three and six months ended June 30, 2024 and 2023.

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 March 31, 2024 and December 31, 2023 is set forth in the table below:

March 31, 2024 December 31, 2023

The composition of property, plant, equipment and mine development, net, as of June 30, 2024 and December 31, 2023 is set forth in the table below:

June 30, 2024 December 31, 2023

(Dollars in millions)

4 unchanged sentences

Property, plant, equipment and mine development, net $ 3,003.1 $ 2,844.1

Asset Impairment and Other At-Risk Assets

The Company identified certain assets with an aggregate carrying value of approximately $ 219 million at March 31, 2024 in its Other U.S.

At-Risk Assets

The Company identified certain assets with an aggregate carrying value of approximately $ 214 million at June 30, 2024 in its Other U.S.

Thermal segment whose recoverability is most sensitive to customer concentration risk.

(8) Income Taxes

The Company's effective tax rate before remeasurement for the three months ended March 31, 2024 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 $ 20.1 million and $ 118.0 million for the three months ended March 31, 2024 and 2023, respectively, included a tax benefit of $ 5.8 million and a tax provision of $ 0.4 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company's effective tax rate before remeasurement for the six months ended June 30, 2024 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 $ 39.4 million and $ 74.2 million for the three months ended June 30, 2024 and 2023, respectively, included tax provisions of $ 1.9 million and $ 0.3 million, respectively, related to the remeasurement of foreign income tax accounts.

The Company’s income tax provisions of $ 59.5 million and $ 192.2 million for the six months ended June 30, 2024 and 2023, respectively, included a tax benefit of $ 3.9 million and a tax provision of $ 0.7 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.

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

During both the three and six months ended June 30, 2024, the Company’s net unrecognized tax benefits decreased by $ 1.3 million and its gross interest and penalties decreased by $ 6.1 million due to expiration of statutes.

(9) Long-term Debt

The Company’s total indebtedness as of March 31, 2024 and December 31, 2023 consisted of the following:

Debt Instrument (defined below, as applicable) March 31, 2024 December 31, 2023

The Company’s total indebtedness as of June 30, 2024 and December 31, 2023 consisted of the following:

Debt Instrument (defined below, as applicable) June 30, 2024 December 31, 2023

(Dollars in millions)

8 unchanged sentences

The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem its then-existing senior secured notes, and to pay related premiums, fees and expenses relating to the offering and redemptions.

2 unchanged sentences

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

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The initial conversion rate for the 2028 Convertible Notes was 50.3816 shares of the Company’s common stock per $ 1,000 principal amount of 2028 Convertible Notes, which represented an initial conversion price of approximately $ 19.85 per share of the Company’s common stock.

The terms of the indenture require 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 %.

Effective February 21, 2024, the conversion rate was increased to 51.0440 shares of the Company’s common stock per $ 1,000 principal amount of 2028 Convertible Notes, which represented an adjusted conversion price of approximately $ 19.59 per share of the Company’s common stock.

The conversion rate is subject to further adjustment under certain circumstances in accordance with the terms of the indenture.

During the first quarter of 2024, 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 will not be convertible at the option of the holders during the second quarter of 2024.

As of March 31, 2024, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $ 76.3 million.

Under the applicable conversion rate formula, the $ 0.075 per share dividend declared on May 2, 2024 and paid on June 5, 2024 yielded a revised conversion rate of 51.2148 shares per $ 1,000 principal amount of 2028 Convertible Notes, which did not meet the 1 % threshold to impact the existing conversion rate of 51.0440 .

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

The conversion rate is also subject to further adjustment under certain circumstances in accordance with the terms of the indenture.

During the first and second quarters of 2024, 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 2024, and will not be similarly convertible during the third quarter of 2024.

As of June 30, 2024, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $ 41.3 million.

Revolving Credit Facility

5 unchanged sentences

Unused capacity under the 2024 Credit Agreement bears a commitment fee of 0.50 % per annum.

As of March 31, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $ 99.0 million outstanding as of March 31, 2024.

As of June 30, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $ 98.0 million outstanding as of June 30, 2024.

These letters of credit support the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees as further described in Note 12.

“Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $ 221.0 million at March 31, 2024.

“Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $ 222.0 million at June 30, 2024.

The 2024 Credit Agreement contains customary covenants that, among other things and subject to certain exceptions (including compliance with financial ratios), may limit the Company and its subsidiaries’ ability to incur additional indebtedness, make certain restricted payments or investments, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets.

5 unchanged sentences

The following table presents the components of the Company’s interest expense related to its indebtedness and financial assurance instruments such as surety bonds and letters of credit.

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,

Additionally, the table sets forth the amount of cash paid for interest, net of capitalized 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,

2024 2023 2024 2023

(Dollars in millions)

3 unchanged sentences

Amortization of debt issuance costs 2.0 0.7 3.2 2.3

Capitalized interest ( 1.7 ) — ( 1.7 ) —

Other 1.2 1.6 2.9 3.3

Interest expense $ 14.7 $ 18.4

Cash paid for interest $ 11.5 $ 19.1

Interest expense, net of capitalized interest $ 10.7 $ 13.3 $ 25.4 $ 31.7

Cash paid for interest, net of capitalized interest $ 12.6 $ 22.9 $ 24.1 $ 41.9

Non-cash interest expense $ 1.9 $ 1.7 $ 3.2 $ 3.3

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at March 31, 2024.

The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2024.

(10) Pension and Postretirement Benefit Costs

1 unchanged sentence

Net periodic pension cost included the following components:

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

2 unchanged sentences

Net periodic pension cost $ 0.4 $ 0.8 $ 0.8 $ 1.6

Prior to January 1, 2024, the Company had two qualified pension plans.

At January 1, 2023, the Company had two qualified pension plans.

During the year ended December 31, 2023, the Company settled its pension obligation for one of its qualified plans.

3 unchanged sentences

Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006.

As of March 31, 2024, the Company’s remaining qualified plan was expected to be at or above the Pension Protection Act thresholds.

As of June 30, 2024, the Company’s remaining qualified plan was expected to be at or above the Pension Protection Act thresholds.

The Company is not required to make any cash contributions to its remaining qualified pension plan in 2024 based on minimum funding requirements and does not expect to make any discretionary cash contributions in 2024.

2 unchanged sentences

Net periodic postretirement benefit credit included the following components:

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

18 unchanged sentences

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

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for the three months ended March 31, 2024 and 2023 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 six months ended June 30, 2024 and 2023 because to do so would have been anti-dilutive for those periods.

Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company’s average stock price during the applicable period.

3 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

(In millions, except per share data)

14 unchanged sentences

Weighted average shares outstanding — basic

126.0 142.3 127.0 143.4

Dilutive impact of share-based compensation awards 0.5 0.6 0.5 0.7

17 unchanged sentences

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

March 31, 2024

June 30, 2024

Reclamation Support Other Support (1)

16 unchanged sentences

In order to maintain the maximum collateral agreement, 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 $ 521.8 million at March 31, 2024.

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.

The Company is in compliance with such requirements at March 31, 2024.

The Company is in compliance with such requirements at June 30, 2024.

To fund the maximum collateral amount, the Company deposited $ 566.3 million into trust accounts for the benefit of certain surety providers on March 31, 2023.

2 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 $ 6.8 million during the three months ended March 31, 2023, primarily as a result of the February 2023 amendment.

The Company recorded early debt extinguishment losses of $ 8.8 million during the six months ended June 30, 2023, primarily 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.

2 unchanged sentences

Accounts Receivable Securitization

In 2017, the Company entered into the Sixth Amended and Restated Receivables Purchase Agreement, as amended from time to time (the Receivables Purchase Agreement.) The receivables securitization program authorized under the agreement (Securitization Program) is subject to customary events of default.

The Receivables Purchase Agreement was amended in February 2023 to increase the available funding capacity from $ 175.0 million to $ 225.0 million and adjust the relevant interest rate for borrowings to a SOFR.

In 2017, the Company entered into the Sixth Amended and Restated Receivables Purchase Agreement, as amended from time to time (the Receivables Purchase Agreement).

The receivables securitization program authorized under the agreement (Securitization Program) is subject to customary events of default.

Such funding is accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program.

Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations, which has been the Company’s primary utilization.

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, 2024, the Com pany h ad no outstanding borrowings and $ 53.1 million of letters of credit outstanding under the Securitization Program.

Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $ 80.7 million at March 31, 2024.

The Company was not required to post cash collateral under the Securitization Program at March 31, 2024.

The Company incurred interest and fees associated with the Securitization Program of $ 0.8 million and $ 1.0 million during the three months ended March 31, 2024 and 2023, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Borrowings under the Securitization Program bear interest at a 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, 2024, the Com pany h ad no outstanding borrowings and $ 56.2 million of letters of credit outstanding under the Securitization Program.

Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $ 97.1 million at June 30, 2024.

The Company was not required to post cash collateral under the Securitization Program at June 30, 2024.

The Company incurred interest and fees associated with the Securitization Program of $ 0.6 million and $ 0.8 million during the three months ended June 30, 2024 and 2023, respectively, and $ 1.4 million and $ 1.9 million during the six months ended June 30, 2024 and 2023, respectively, which have been recorded as “Interest expense, net of capitalized interest” in the accompanying unaudited condensed consolidated statements of operations.

Credit Support Facilities

In February 2022, the Company entered into an agreement which provides up to $ 250.0 million of capacity for irrevocable standby letters of credit, primarily to support reclamation bonding requirements.

The agreement requires the Company to provide cash collateral at a level of 103 % of the aggregate amount of letters of credit outstanding under the arrangement (limited to $ 5.0 million total excess collateralization.) Outstanding letters of credit bear a fixed fee in the amount of 0.75 % per annum.

Outstanding letters of credit bear a fixed fee in the amount of 0.75 % per annum.

The Company receives a variable deposit rate on the amount of cash collateral posted in support of letters of credit.

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

At March 31, 2024, letters of credit of $ 116.6 million were outstanding under the agreement, which were collateralized by cash of $ 120.1 million.

At June 30, 2024, letters of credit of $ 116.6 million were outstanding under the agreement, which were collateralized by cash of $ 120.1 million.

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements.

During the three months ended March 31, 2024, the Company capitalized $ 1.1 million of debt issuance costs related to these bank guarantee facilities.

During the six months ended June 30, 2024, the Company capitalized $ 1.4 million of debt issuance costs related to these bank guarantee facilities.

The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029.

At March 31, 2024, the bank guarantee facilities were backed by cash of $ 177.0 million.

At June 30, 2024, the bank guarantee facilities were backed by cash of $ 179.5 million.

PEABODY ENERGY CORPORATION

5 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Dollars in millions)

13 unchanged sentences

Unconditional Purchase Obligations

As of March 31, 2024, purchase commitments for capital expenditures were $ 100.0 million, all of which is obligated within the next two years, with $ 92.9 million obligated within the next 12 months.

As of June 30, 2024, purchase commitments for capital expenditures were $ 90.9 million, all of which is obligated within the next two years, with $ 83.7 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

On March 15, 2024, the Company pled guilty to two of the charges related to water pollution, and two charges related to a failure to adequately maintain plant and equipment were consolidated into one charge to which the Company also pled guilty.

No plea has been entered for the remaining charge that has been held over to a sentencing hearing to be scheduled later in the year.

No plea has been entered for the remaining charge that has been held over to a sentencing hearing that is scheduled for November 2024.

Penalties will be determined at that sentencing hearing.

During the three months ended March 31, 2024, the Company recorded an immaterial provision to establish a current liability that the Company believes is probable and reasonably estimable.

During the six months ended June 30, 2024, the Company recorded an immaterial provision to establish a current liability that the Company believes is probable and reasonably estimable.

PEABODY ENERGY CORPORATION

2 unchanged sentences

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.

The complaint sought 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, included a failure to warn, false or misleading advertisement and public nuisance.

In July 2024, Peabody was dismissed from this case, without prejudice.

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.

12 unchanged sentences

Reportable segment results were as follows:

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

15 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

(Dollars in millions)

4 unchanged sentences

Asset impairment — — — 2.0

Provision for NARM loss 1.8 —

Provision for NARM and Shoal Creek losses 1.9 33.7 3.7 33.7

Shoal Creek insurance recovery - property damage ( 28.7 ) — ( 28.7 ) —

Changes in amortization of basis difference related to equity affiliates ( 0.3 ) ( 0.4 ) ( 0.7 ) ( 0.7 )

Interest expense 14.7 18.4

Interest expense, net of capitalized interest 10.7 13.3 25.4 31.7

Net loss on early debt extinguishment — 2.0 — 8.8

1 unchanged sentence

Unrealized gains on derivative contracts related to forecasted sales — ( 40.3 ) — ( 159.0 )

Unrealized losses on foreign currency option contracts 5.7 2.2

Unrealized (gains) losses on foreign currency option contracts ( 2.4 ) ( 2.8 ) 3.3 ( 0.6 )

Take-or-pay contract-based intangible recognition ( 0.8 ) ( 0.6 ) ( 1.5 ) ( 1.2 )

2 unchanged sentences

(15) Other Events

Coal Deposit Acquisition

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

The acquisition was completed on April 16, 2024 for cash consideration of approximately $ 134 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.

Wards Well Acquisition

The Company entered into a definitive agreement dated October 26, 2023, to acquire the southern part of the Wards Well tenements (Wards Well) which are adjacent to the Company’s Centurion Mine in Queensland, Australia.

The acquisition, which was accounted for as an asset acquisition, was completed on April 16, 2024.

The acquired asset was measured at the cost of the acquisition based on the total consideration, allocated on the basis of relative fair value.

The total consideration of $ 153.4 million, consisting of cash consideration of $ 134.4 million, cash transaction costs of $ 9.4 million and the non-cash settlement of existing receivables with the acquiree of $ 9.6 million, was recorded in “Property, plant, equipment and mine development, net” in the condensed consolidated balance sheets as of June 30, 2024.

The agreement also includes an initial contingent royalty of up to $ 200 million.

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

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

The Company will adjust the cost basis of the assets acquired if and when the contingent royalty is paid or becomes payable.

Share Repurchases

During the three months ended March 31, 2024, the Company repurchased approximately 3.2 million shares of its common stock for $ 80.5 million, including commission fees.

As of March 31, 2024, the Company had accrued excise taxes of $ 4.0 million related to share repurchases, which were unpaid at March 31, 2024.

During the six months ended June 30, 2024, the Company repurchased approximately 3.2 million shares of its common stock for $ 80.5 million, including commission fees.

No shares were repurchased during the three months ended June 30, 2024.

The Company had accrued excise taxes of $ 4.0 million related to share repurchases, which were unpaid at June 30, 2024.

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

At March 31, 2024, $ 569.6 million remained available under its share repurchase program.

At June 30, 2024, $ 569.6 million remained available under its share repurchase program.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

North Antelope Rochelle Mine Tornado

1 unchanged sentence

The mine resumed operations on June 25, 2023.

During the three months ended March 31, 2024, the Company recorded a provision for loss of $ 1.8 million for incremental repair costs related to the tornado damage.

The Company anticipates that immaterial incremental repair costs will continue to be recognized in the second quarter of 2024.

Shoal Creek Incident

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, which included $ 4.0 million for materials and supplies inventories and $ 1.0 million for buildings and equipment.

During the three and six months ended June 30, 2024, the Company recorded $ 1.9 million and $ 3.7 million, respectively, for incremental repair costs related to the tornado damage.

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.

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.

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, which included $ 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.

In October 2023, 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.

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During June 2024, the Company reached a settlement with its insurers and various re-insurers and recognized a $ 109.5 million insurance recovery which the Company included in its results of operations for the three and six months ended June 30, 2024.

During the six months ended June 30, 2024, the Company collected $ 5.6 million of the insurance recovery.

Since this portion of the recovery related to equipment damage for which the Company previously recognized the provision for loss, the Company has classified the amount within the “Cash Flows From Investing Activities” section of the unaudited condensed consolidated statements of cash flows.

The remaining $ 103.9 million of the insurance recovery was recorded as a receivable within “Accounts receivable, net” in the condensed consolidated balance sheets as of June 30, 2024.

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 Centurion Mine 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 Centurion 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 was payable in June 2024, subject to certain conditions.

In connection with the transaction, the Company recorded revenue of $ 19.2 million during the three months ended March 31, 2023 and had a discounted receivable of $ 9.8 million included in “Accounts receivable, net” as of March 31, 2024.

In association with the completion of the Wards Well acquisition described above, the remaining receivable was settled as of April 16, 2024.

In connection with the transaction, the Company recorded revenue of $ 19.2 million during the six months ended June 30, 2023.

In association with the completion of the Wards Well acquisition described above, the remaining receivable was settled as part of the consideration on April 16, 2024.

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