What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-08-08 · 189 added, 139 removed, 617 unchanged (35% of the section changed)

11 unchanged sentences

When considering these forward-looking statements, you should keep in mind the cautionary statements in this document and in the Company’s other Securities and Exchange Commission (SEC) filings, including, but not limited to, the more detailed discussion of these factors and other factors that could affect its results contained in Item 1A.

“Risk Factors” of Part II of this Quarterly Report on Form 10-Q and Item 1A.

“Risk Factors” of Part II of this Quarterly Report on Form 10-Q, Item 1A.

“Risk Factors” of Part II of its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed with the SEC on August 8, 2024 and Item 1A.

“Risk Factors” and Item 3.

19 unchanged sentences

In 2023, the Company produced and sold 126.7 million and 126.2 million tons of coal, respectively, from continuing operations.

At June 30, 2024, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia.

At September 30, 2024, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia.

Included in that count is Peabody’s 50% equity interest in Middlemount Coal Pty Ltd (Middlemount), which owns the Middlemount Mine in Queensland, Australia.

7 unchanged sentences

“Segment Information” to the accompanying unaudited condensed consolidated financial statements for further information regarding those segments and the components of its Corporate and Other segment.

Spot pricing for premium low-vol hard coking coal (Premium HCC), premium low-vol pulverized coal injection (Premium PCI) coal, Newcastle index thermal coal and API 5 index thermal coal, and prompt month pricing for PRB 8,880 Btu/Lb coal and Illinois Basin 11,500 Btu/Lb coal during the three months ended June 30, 2024 is set forth in the table below.

The seaborne pricing included in the table below is not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2024 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized.

The seaborne pricing included in the table below is not necessarily indicative of the pricing the Company realized during the three months ended September 30, 2024 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized.

The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.

In the U.S., the pricing included in the table below is also not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2024 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors.

In the U.S., the pricing included in the table below is also not necessarily indicative of the pricing the Company realized during the three months ended September 30, 2024 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors.

Such long-term contracts in the U.S.

1 unchanged sentence

Competition from alternative fuels such as natural gas and other fuel sources may also impact the Company’s realized pricing.

High Low Average June 30, 2024 August 2, 2024

High Low Average September 30, 2024 November 4, 2024

Premium HCC (1)

13 unchanged sentences

Within the global coal industry, supply and demand for its products and the supplies used for mining continue to be impacted by the ongoing Russian-Ukrainian conflict.

As future developments related to the Russian-Ukrainian conflict and geopolitical instability in key energy producing regions are unknown, the global coal industry data for the six months ended June 30, 2024 presented herein may not be indicative of their ultimate impacts.

Within the seaborne metallurgical coal market, coking coal prices have retreated from a high base during the six months ended June 30, 2024.

As future developments related to the Russian-Ukrainian conflict and geopolitical instability in key energy producing regions are unknown, the global coal industry data for the nine months ended September 30, 2024 presented herein may not be indicative of their ultimate impacts.

Within the seaborne metallurgical coal market, coking coal prices have retreated from a high base during the nine months ended September 30, 2024.

Parts of the global steel market have reported tepid demand and thin profit margins during this period, restricting demand growth for metallurgical coal.

In India, steel production was disrupted due to election activities and more recently the onset of the monsoon season;

while in China, steel production was mixed with a weak property market slowing demand, partially offset by economic stimulus targeting the real estate sector.

Australian high-quality coking coal showed signs of supply improvement during the six months ended June 30, 2024 which has weighed on coking coal prices, however periodic price support has been observed via various supply side disruptions, including rail and port maintenance curtailing exports in Queensland, the restriction of U.S.

exports in Baltimore, Maryland and low domestic coal production in China.

The June 2024 incident at the Grosvenor Mine in Queensland, Australia has further limited global exports.

Despite these constraints, coking coal supply proved sufficient to meet demand during the period.

In the PCI segment, prices were initially under pressure early in the year from reduced steel making productivity targets under thin margin conditions, but have since found support from shifting of trade flows from Russian to Australian supply amidst newly announced sanctions.

In China, continued weakness in the property sector has contributed to lower domestic steel demand and steel production in 2024 and has also supported increased steel exports.

The increased availability of competitively priced Chinese imports has pressured steel margins for steel producers in other countries, although India has recorded year-over-year production growth due to its increased domestic consumption.

Meanwhile, global supply of coking coal has been relatively stable during the nine months ended September 30, 2024, and has met global demand despite various disruption events, such as a fire at the Grosvenor Mine in Australia and shipping interruptions at the U.S.’s Baltimore, Maryland port.

In the PCI segment, prices were initially under pressure early in the year with a wide discount to coking coal caused in part by reduced steel making productivity targets under thin margin conditions.

PCI relativities to coking coal have since improved.

In September 2024, increased government stimulus activity in China has supported an uptick in Chinese ferrous futures prices, which has in turn contributed to improved spot pricing for seaborne metallurgical coal.

In the coming period, seasonal restocking patterns and ongoing economic stimulus may lend support to metallurgical coal pricing.

Overall, the market for metallurgical coal remains finely balanced and exposed to volatility, influenced by the rate of exports from Australia and economic performance in China, India and elsewhere.

Within the seaborne thermal coal market, global thermal coal prices were rangebound during the six months ended June 30, 2024, driven by healthy supply meeting elevated demand in Asian markets.

In China, overall total generation demand has been elevated while domestic coal production has declined, which has driven stronger coal import demand year-over-year through the six months ended June 30, 2024.

Within the seaborne thermal coal market, global thermal coal prices continued to remain stable during the nine months ended September 30, 2024, driven by healthy supply meeting elevated demand in Asian markets.

In China, overall total generation demand has been elevated while domestic coal production has remained relatively flat, which has driven stronger coal import demand year-over-year through the nine months ended September 30, 2024.

In India, strong growth in coal generation has supported increased import demand, despite elevated domestic coal production.

Overall, global thermal coal markets remain turbulent amid ample supply and seasonal demand requirements in the Northern Hemisphere, as well as volatile global natural gas markets.

Looking ahead, global thermal coal markets remain turbulent amid tighter supply ahead of winter restocking requirements in the Northern Hemisphere, as well as volatile global natural gas markets.

In the U.S., overall electricity demand increased approximately 3% year-over-year.

Through the six months ended June 30, 2024, electricity generation from thermal coal has increased slightly year-over-year driven by higher overall electricity demand and despite low natural gas prices and stronger renewable generation.

Coal’s share of electricity generation has declined to approximately 14% for the six months ended June 30, 2024, while wind and solar’s combined generation share is at 19% and the share of natural gas generation has decreased slightly to 40%.

coal inventories have declined through June 30, 2024, resulting in stockpiles slightly below levels seen at the end of 2023.

During the six months ended June 30, 2024, utility consumption of PRB coal was unchanged compared to the prior year period.

Through the nine months ended September 30, 2024, electricity generation from thermal coal has decreased year-over-year driven by continued low natural gas prices and stronger renewable generation.

Coal’s share of electricity generation has declined to approximately 15% for the nine months ended September 30, 2024, while wind and solar’s combined generation share is at 17% and the share of natural gas generation has remained level at 43%.

coal inventories have declined through September 30, 2024, resulting in stockpiles declining more than 10 million tons below levels seen at the end of 2023.

During the nine months ended September 30, 2024, utility consumption of PRB coal has declined compared to the prior year period.

Centurion Mine

Peabody’s redevelopment of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, continues to advance as planned.

The first development coal was mined in June 2024, and a second continuous mine was commissioned in July 2024.

The first coal shipments from the Centurion Mine are expected in the fourth quarter of 2024, and the Company is targeting the commencement of longwall production in the first quarter of 2026.

Approximately $200 million of the $489 million of capital expenditures to reach longwall production has been completed as of June 30, 2024.

The benchmark premium hard coking coal from Centurion is expected to receive a premium price relative to other metallurgical coals.

Through September 30, 2024, two continuous miners units have been commissioned, the first development coal was produced and the first coal was washed.

The first coal shipment from the Centurion Mine is expected in the fourth quarter of 2024, and the Company is targeting the commencement of longwall production in the first quarter of 2026.

Approximately $250 million of the $489 million of capital expenditures to reach longwall production has been completed as of September 30, 2024.

Wards Well Acquisition.

8 unchanged sentences

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.

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.

Results of Operations

Three and Six Months Ended June 30, 2024 Compared to the Three and Six Months Ended June 30, 2023

The increase in income from continuing operations, net of income taxes for the three months ended June 30, 2024 compared to the same period in the prior year ($6.7 million) was driven by the current year insurance recovery related to the 2023 event at the Shoal Creek Mine ($109.5 million), lower operating costs and expenses ($58.1 million), and lower year-over-year provisions for taxes ($34.8 million) and the losses at the NARM and Shoal Creek Mines ($31.8 million).

These favorable variances were offset by lower revenue ($226.8 million) due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year, lower seaborne coal pricing and volume decreases in the U.S.

thermal segments.

The decrease in income from continuing operations, net of income taxes for the six months ended June 30, 2024 compared to the same period in the prior year ($231.7 million) was driven by lower revenue ($607.2 million) due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year, lower seaborne coal pricing and volume decreases in the U.S.

Three and Nine Months Ended September 30, 2024 Compared to the Three and Nine Months Ended September 30, 2023

The decrease in income from continuing operations, net of income taxes for the three months ended September 30, 2024 compared to the same period in the prior year ($16.3 million) was driven by higher operating costs and expenses ($42.1 million), partially offset by a lower year-over-year provision for taxes ($20.8 million) and higher revenue ($9.1 million) due to higher seaborne thermal coal pricing.

The decrease in income from continuing operations, net of income taxes for the nine months ended September 30, 2024 compared to the same period in the prior year ($248.0 million) was driven by lower revenue ($598.1 million) due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year, lower seaborne coal pricing and volume decreases in the U.S.

thermal segments.

This unfavorable variance was partially offset by a lower tax provision ($132.7 million), the current year insurance recovery related to the 2023 event at the Shoal Creek Mine ($109.5 million), lower operating costs and expenses ($90.5 million) and lower year-over-year provision for losses at the NARM and Shoal Creek Mines ($30.0 million).

Adjusted EBITDA for the three and six months ended June 30, 2024 reflected year-over-year decreases of $48.5 million and $278.6 million, respectively.

This unfavorable variance was partially offset by a lower tax provision ($153.5 million), the current year insurance recovery related to the 2023 event at the Shoal Creek Mine ($109.5 million), lower operating costs and expenses ($48.4 million) and a lower year-over-year provision for losses at the NARM and Shoal Creek Mines ($33.3 million).

Adjusted EBITDA for the three and nine months ended September 30, 2024 reflected year-over-year decreases of $45.2 million and $323.8 million, respectively.

The following table presents tons sold by operating segment:

Three Months Ended June 30, Increase (Decrease)

to Volumes Six Months Ended June 30, Increase (Decrease)

Three Months Ended September 30, (Decrease) Increase

to Volumes Nine Months Ended September 30, Increase (Decrease)

2024 2023 Tons % 2024 2023 Tons %

5 unchanged sentences

Total tons sold from operating segments 31.9 32.6 (0.7) (2) % 84.8 92.7 (7.9) (9) %

Corporate and Other — 0.2 (0.2) (100) % 0.1 0.3 (0.2) (67) %

Corporate and Other — — — n.m.

0.1 0.3 (0.2) (67) %

Total tons sold 31.9 32.6 (0.7) (2) % 84.9 93.0 (8.1) (9) %

1 unchanged sentence

The following table presents supplemental financial data by operating segment:

Three Months Ended June 30, (Decrease)

Increase Six Months Ended June 30, (Decrease)

Three Months Ended September 30, Increase

(Decrease) Nine Months Ended September 30, (Decrease)

2024 2023 $ % 2024 2023 $ %

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The following table presents revenue by reporting segment:

Three Months Ended June 30, (Decrease) Increase to Revenue Six Months Ended June 30, Decrease to Revenue

Three Months Ended September 30, Increase (Decrease) to Revenue Nine Months Ended September 30, Decrease to Revenue

2024 2023 $ % 2024 2023 $ %

7 unchanged sentences

Seaborne Thermal.

Segment revenue decreased during the three and six months ended June 30, 2024 compared to the same periods in the prior year due to unfavorable realized prices ($117.4 million and $217.8 million, respectively), partially offset by favorable export volumes ($25.4 million and $63.2 million, respectively).

Segment revenue increased during the three months ended September 30, 2024 compared to the same period in the prior year due to favorable mix variances.

Segment revenue decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to unfavorable realized prices ($214.2 million), partially offset by favorable export volume ($75.4 million).

Seaborne Metallurgical.

Segment revenue decreased during the three months ended June 30, 2024 compared to the same period in the prior year due to unfavorable realized prices ($56.8 million) and mix variances ($21.4 million).

Segment revenue decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to unfavorable realized prices ($181.1 million), offset by favorable volume and mix variances ($61.5 million) driven by increased production at the Shoal Creek Mine.

Segment revenue decreased during the three and nine months ended September 30, 2024 compared to the same periods in the prior year due to unfavorable realized prices ($28.1 million and $195.1 million, respectively), partially offset by favorable volume and mix variances ($23.6 million and $71.0 million, respectively).

Powder River Basin.

Segment revenue decreased during the three and six months ended June 30, 2024 compared to the same periods in the prior year due to unfavorable volumes ($38.2 million and $85.7 million, respectively) resulting from decreased demand driven by low natural gas pricing and mild weather.

Segment revenue increased during the three months ended June 30, 2024 compared to the same period in the prior year due to favorable realized prices ($3.2 million).

Segment revenue decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to unfavorable volumes ($69.4 million) resulting from decreased demand driven by low natural gas pricing and mild weather, partially offset by increased sales contract cancellation settlements ($13.1 million).

Segment revenue decreased during the three months ended September 30, 2024 compared to the same period in the prior year due to unfavorable volume.

Segment revenue decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to unfavorable volume ($91.5 million) resulting from decreased demand driven by low natural gas pricing and mild weather and unfavorable realized prices ($6.7 million), partially offset by increased revenue from sales contract cancellation settlements.

Segment revenue decreased during the three months ended September 30, 2024 compared to the same period in the prior year primarily due to unfavorable realized prices ($10.9 million) due in part to mix variances.

Segment revenue decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to unfavorable volume ($71.9 million) resulting from decreased demand driven by low natural gas pricing and mild weather and unfavorable realized prices ($10.0 million), partially offset by increased revenue from sales contract cancellation settlements ($14.7 million).

Corporate and Other.

Segment revenue decreased during the three months ended June 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($40.3 million) as all derivative contracts settled in 2023;

offset by favorable results from trading activities ($19.0 million).

Segment revenue decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($159.0 million);

prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15.

Segment revenue increased during the three months ended September 30, 2024 compared to the same period in the prior year due to favorable results from trading activities ($16.4 million).

Segment revenue decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($159.0 million) as all derivative contracts settled in 2023 and prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15.

“Other Events” to the accompanying unaudited condensed consolidated financial statements.

and lower results from trading activities ($12.8 million).

Adjusted EBITDA

The following table presents Adjusted EBITDA for each of the Company’s reporting segments:

Three Months Ended June 30, (Decrease) Increase to Segment Adjusted EBITDA Six Months Ended June 30, Decrease to Segment Adjusted EBITDA

Three Months Ended September 30, Increase (Decrease) to Segment Adjusted EBITDA Nine Months Ended September 30, Decrease to Segment Adjusted EBITDA

2024 2023 $ % 2024 2023 $ %

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Seaborne Thermal.

Segment Adjusted EBITDA decreased during the three and six months ended June 30, 2024 compared to the same periods in the prior year as a result of lower realized prices net of sales price sensitive costs ($106.0 million and $200.8 million, respectively), partially offset by favorable volume and mix variances ($15.4 million and $39.2 million, respectively).

Segment Adjusted EBITDA increased during the three months ended September 30, 2024 compared to the same period in the prior year due to favorable mix variances, partially offset by lower realized prices net of sales price sensitive costs.

Segment Adjusted EBITDA decreased during the nine months ended September 30, 2024 compared to the same period in the prior year as a result of lower realized prices net of sales price sensitive costs ($203.3 million), partially offset by favorable volume and mix variances ($39.3 million).

Seaborne Metallurgical.

Segment Adjusted EBITDA increased during the three months ended June 30, 2024 compared to the same period in the prior year due to the Shoal Creek insurance recovery ($80.8 million) further discussed in Note 15.

“Other Events” in the accompanying unaudited condensed consolidated financial statements and favorable mix variances ($15.4 million) driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, despite the lock outages during 2024.

These increases were offset by lower realized prices net of sales price sensitive costs ($41.3 million) and unfavorable operational costs ($24.3 million).

Segment Adjusted EBITDA decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($151.0 million) and unfavorable operational costs ($47.7 million).

These decreases were offset by favorable volumes ($88.4 million) driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, despite the lock outages during 2024;

and the Shoal Creek insurance recovery ($80.8 million).

Segment Adjusted EBITDA decreased during the three months ended September 30, 2024 compared to the same period in the prior year due to unfavorable operational costs ($42.2 million) and lower realized prices net of sales price sensitive costs ($26.4 million).

These decreases were offset by favorable volume ($20.9 million).

Segment Adjusted EBITDA decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($164.5 million) and unfavorable operational costs ($92.7 million).

These decreases were offset by favorable volume ($104.0 million) driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, despite the lock outages during 2024;

and the Shoal Creek insurance recovery ($80.8 million) further discussed in Note 15.

“Other Events” in the accompanying unaudited condensed consolidated financial statements

Powder River Basin.

Segment Adjusted EBITDA decreased during the three and six months ended June 30, 2024 compared to the same periods in the prior year due to unfavorable volumes ($14.1 million and $44.9 million, respectively) and increased lease spend ($3.4 million and $5.4 million, respectively), offset by lower costs for materials, services, repairs and labor ($9.7 million and $22.3 million, respectively) and favorable commodity pricing ($1.4 million and $8.2 million, respectively).

Segment Adjusted EBITDA decreased during the three and six months ended June 30, 2024 compared to the same periods in the prior year due to unfavorable volumes ($22.3 million and $59.7 million, respectively), offset by favorable mine sequencing ($2.4 million and $11.5 million, respectively) and increased sales contract cancellation settlements (six months, $13.1 million).

Segment Adjusted EBITDA decreased during the three and nine months ended September 30, 2024 compared to the same periods in the prior year due to increased lease spend ($4.6 million and $10.0 million, respectively), unfavorable volume ($4.0 million and $49.3 million, respectively) and increased overburden removal costs ($3.6 million and $10.9 million, respectively).

These decreases were offset by favorable commodity pricing ($7.7 million and $15.6 million, respectively) and lower costs for materials, services, repairs and labor ($6.3 million and $28.5 million, respectively).

Segment Adjusted EBITDA decreased during the three and nine months ended September 30, 2024 compared to the same periods in the prior year due to unfavorable volume ($12.2 million and $52.4 million, respectively), lower realized prices net of sales price sensitive costs ($10.5 million and $11.1 million, respectively) and higher costs for materials, services, repairs and labor ($3.7 million and $10.2 million, respectively).

These decreases were offset by favorable mine sequencing ($3.5 million and $16.0 million, respectively) and increased sales contract cancellation settlements ($1.6 million and $14.7 million, respectively).

Corporate and Other Adjusted EBITDA.

The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:

Three Months Ended June 30, (Decrease) Increase to Adjusted EBITDA Six Months Ended June 30, (Decrease) Increase to Adjusted EBITDA

Three Months Ended September 30, (Decrease) Increase to Adjusted EBITDA Nine Months Ended September 30, (Decrease) Increase to Adjusted EBITDA

2024 2023 $ % 2024 2023 $ %

12 unchanged sentences

(2) Includes gains (losses) on certain surplus coal reserve, coal resource and surface land sales and property management costs and revenue.

(3) Includes trading and brokerage activities, costs associated with post-mining activities, gains (losses) on certain asset disposals, minimum charges on certain transportation-related contracts, costs associated with suspended operations including the Centurion Mine, the impact of foreign currency remeasurement and expenses related to the Company’s other commercial activities.

Corporate and Other Adjusted EBITDA increased during the three months ended June 30, 2024 compared to the same period in the prior year due to favorable trading results ($14.7 million) and the favorable net impact of foreign currency rate changes ($9.4 million).

Corporate and Other Adjusted EBITDA decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to unfavorable trading results ($25.5 million);

prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15.

(3) Includes trading and brokerage activities, costs associated with post-mining activities, gains (losses) on certain asset disposals, minimum charges on certain transportation-related contracts, results from the Company’s equity method investment in R3 Renewables LLC, costs associated with suspended operations including the Centurion Mine, the impact of foreign currency remeasurement and expenses related to the Company’s other commercial activities.

Corporate and Other Adjusted EBITDA increased during the three months ended September 30, 2024 compared to the same period in the prior year due to the favorable net impact of foreign currency rate changes ($17.1 million) and favorable trading results ($14.4 million), partially offset by unfavorable variances in Middlemount’s results driven by lower sales volume and pricing.

Corporate and Other Adjusted EBITDA decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15.

“Other Events” to the accompanying unaudited condensed consolidated financial statements;

and the unfavorable net impact of foreign currency rate changes ($5.4 million).

unfavorable trading results ($11.1 million);

and unfavorable variances in Middlemount’s results driven by lower sales volume and pricing.

These decreases were partially offset by the favorable net impact of foreign currency rate changes ($11.6 million).

Income From Continuing Operations, Net of Income Taxes

The following table presents income from continuing operations, net of income taxes:

Three Months Ended June 30, (Decrease) Increase to Income Six Months Ended June 30, (Decrease) Increase to Income

Three Months Ended September 30, (Decrease) Increase to Income Nine Months Ended September 30, (Decrease) Increase to Income

2024 2023 $ % 2024 2023 $ %

12 unchanged sentences

Interest expense, net of capitalized interest (9.7) (13.8) 4.1 30 % (35.1) (45.5) 10.4 23 %

Net loss on early debt extinguishment — (2.0) 2.0 100 % — (8.8) 8.8 100 %

Net loss on early debt extinguishment — — — n.m.

— (8.8) 8.8 100 %

Interest income 17.7 20.3 (2.6) (13) % 53.7 56.5 (2.8) (5) %

9 unchanged sentences

The following table presents a summary of depreciation, depletion and amortization expense by reporting segment:

Three Months Ended June 30, (Decrease) Increase to Income Six Months Ended June 30, (Decrease) Increase to Income

Three Months Ended September 30, (Decrease) Increase to Income Nine Months Ended September 30, (Decrease) Increase to Income

2024 2023 $ % 2024 2023 $ %

8 unchanged sentences

Additionally, the following table presents a summary of the Company’s weighted-average depletion rate per ton for active mines in each of its operating segments:

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

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

2024 2023 2024 2023

3 unchanged sentences

Thermal 1.55 1.23 1.59 1.25

The increases in the weighted-average depletion rate per ton for both the Seaborne Metallurgical and the Other U.S.

Thermal segments during the three and six months ended June 30, 2024 compared to the same periods in the prior year reflect the impact of volume and mix variances across the segments.

The changes in the weighted-average depletion rate per ton for both the Seaborne Metallurgical and the Other U.S.

Thermal segments during the three and nine months ended September 30, 2024 compared to the same periods in the prior year reflect the impact of volume and mix variances across the segments.

Provision for NARM and Shoal Creek Losses.

6 unchanged sentences

Of this amount, Adjusted EBITDA excludes an allocated amount applicable to total equipment losses recognized at the time of the insurance recovery, which consisted of $28.7 million recognized during the year ended December 31, 2023.

The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, is included in Adjusted EBITDA for the three and six months ended June 30, 2024.

The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, is included in Adjusted EBITDA for the nine months ended September 30, 2024.

Interest Expense, Net of Capitalized Interest.

The decrease in expense during the three and six months ended June 30, 2024 compared to the same periods in the prior year was driven by lower interest and fees for financial assurance instruments and the capitalization of interest related to the redevelopment of the Centurion Mine.

The decrease in expense during the three and nine months ended September 30, 2024 compared to the same periods in the prior year was driven by lower interest and fees for financial assurance instruments and the capitalization of interest related to the redevelopment of the Centurion Mine.

Net Loss on Early Debt Extinguishment.

1 unchanged sentence

“Financial Instruments and Other Guarantees” to the accompanying unaudited condensed consolidated financial statements.

Interest Income.

The decrease in interest income during the three months ended June 30, 2024 was primarily due to lower average cash balances, including restricted cash balances on which the Company earns interest, in the current year.

Unrealized Gains on Derivative Contracts Related to Forecasted Sales.

3 unchanged sentences

Income Tax Provision.

The decrease in the income tax provision during the three and six months ended June 30, 2024 compared to the same periods in the prior year was primarily due to lower pretax income.

The decrease in the income tax provision during the three and nine months ended September 30, 2024 compared to the same periods in the prior year was primarily due to lower pretax income.

Refer to Note 8.

2 unchanged sentences

The following table presents net income attributable to common stockholders:

Three Months Ended June 30, Increase (Decrease)

to Income Six Months Ended June 30, (Decrease) Increase

Three Months Ended September 30, Decrease

to Income Nine Months Ended September 30, Decrease

2024 2023 $ % 2024 2023 $ %

1 unchanged sentence

Income from continuing operations, net of income taxes $ 112.5 $ 128.8 $ (16.3) (13) % $ 369.0 $ 617.0 $ (248.0) (40) %

Loss from discontinued operations, net of income taxes (1.6) (1.3) (0.3) (23) % (2.3) (2.6) 0.3 12 %

(Loss) income from discontinued operations, net of income taxes (1.0) 2.5 (3.5) (140) % (3.3) (0.1) (3.2) (3,200) %

Net income 111.5 131.3 (19.8) (15) % 365.7 616.9 (251.2) (41) %

1 unchanged sentence

Net income attributable to common stockholders $ 101.3 $ 119.9 $ (18.6) (16) % $ 340.3 $ 567.6 $ (227.3) (40) %

(Loss) Income from Discontinued Operations, Net of Income Taxes.

The decrease in the results from discontinued operations, net of income taxes during the three and nine months ended September 30, 2024 compared to the same periods in the prior year was primarily due to the prior year gain recognized on the settlement of the Patriot federal black lung liabilities.

Net Income Attributable to Noncontrolling Interests.

The decrease in the results attributable to noncontrolling interests during the three and six months ended June 30, 2024 compared to the same periods in the prior year was primarily due to a decline in the financial results of Peabody’s majority-owned Wambo operations in which there is an outside non-controlling interest.

The decrease in the results attributable to noncontrolling interests during the three and nine months ended September 30, 2024 compared to the same periods in the prior year was primarily due to a decline in the financial results of Peabody’s majority-owned Wambo operations in which there is an outside non-controlling interest.

Diluted Earnings per Share (EPS)

The following table presents diluted EPS:

Three Months Ended June 30, Increase

to EPS Six Months Ended June 30, Decrease

Three Months Ended September 30, Decrease

to EPS Nine Months Ended September 30, Decrease

2024 2023 $ % 2024 2023 $ %

1 unchanged sentence

Income from continuing operations $ 0.74 $ 0.80 $ (0.06) (8) % $ 2.47 $ 3.68 $ (1.21) (33) %

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

(Loss) income from discontinued operations — 0.02 (0.02) (100) % (0.03) — (0.03) n.m.

Net income attributable to common stockholders $ 0.74 $ 0.82 $ (0.08) (10) % $ 2.44 $ 3.68 $ (1.24) (34) %

Diluted EPS is commensurate with the changes in results from continuing operations and discontinued operations during that period.

Diluted EPS reflects weighted average diluted common shares outstanding of 142.8 million and 159.0 million for the three months ended June 30, 2024 and 2023, respectively, and 143.8 million and 160.2 million for the six months ended June 30, 2024 and 2023, respectively.

Diluted EPS reflects weighted average diluted common shares outstanding of 141.6 million and 149.9 million for the three months ended September 30, 2024 and 2023, respectively, and 143.1 million and 156.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Reconciliation of Non-GAAP Financial Measures

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Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing each of its segment’s operating performance, as displayed in the reconciliations below.

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

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

2024 2023 2024 2023

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Total Reporting Segment Costs is defined as operating costs and expenses adjusted for the discrete items that management excluded in analyzing each of its segments’ operating performance, as displayed in the reconciliations below.

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

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

2024 2023 2024 2023

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The following table presents Total Reporting Segment Costs by reporting segment:

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

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

2024 2023 2024 2023

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The following tables present tons sold, revenue, Total Reporting Segment Costs and Adjusted EBITDA by operating segment:

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

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Total Reporting Segment Costs 193.2 214.7 253.6 188.3

Adjusted EBITDA, excluding Shoal Creek insurance recovery $ 104.4 $ 62.8 $ 17.8 $ 35.4

Shoal Creek insurance recovery - business interruption — 80.8 — —

Adjusted EBITDA $ 120.0 $ 27.8 $ 51.7 $ 28.4

2 unchanged sentences

Adjusted EBITDA Margin per Ton $ 29.20 $ 16.56 $ 2.34 $ 7.02

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

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

7 unchanged sentences

Adjusted EBITDA Margin per Ton $ 27.70 $ 51.64 $ 2.38 $ 11.61

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

9 unchanged sentences

Adjusted EBITDA Margin per Ton $ 26.03 $ 27.33 $ 1.52 $ 10.11

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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

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See the table below for a reconciliation of Available Free Cash Flow to its most comparable measure under U.S.

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(Dollars in millions)

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Numerous legal challenges to the final rule were filed in the U.S.

Court of Appeals for the D.C.

Circuit (D.C.

Court of Appeals for the District of Columbia (D.C.

Sixteen separate petitions for review were filed, and the challengers include 25 states, utilities, mining companies (including Peabody), labor unions, trade organizations and other groups.

32 unchanged sentences

Any new fossil-fuel steam EGU (where construction or reconstruction was commenced after June 18, 2014) will need to comply with standards promulgated in 2015.

The final rule is subject to numerous legal challenges that have been consolidated in the U.S.

Court of Appeals for the Eighth Circuit (Eighth Circuit).

If the Eighth Circuit affirms the final rule, as implemented by the EPA and states, it could have a substantial impact on the use of coal and natural gas for the generation of electricity.

The final rule is subject to numerous legal challenges that have been consolidated in the D.C.

Petitioners filed an emergency application for a stay of the rule with the U.S.

Supreme Court which was denied in an order issued by the U.S.

Supreme Court on October 16, 2024.

In a statement respecting this denial, Justices Kavanaugh and Gorsuch expressed the view that the petitioners “have shown a strong likelihood of success on the merits as to at least some of their challenges” but because efforts to comply would not need to be initiated until June 2025, they would be “unlikely to suffer irreparable harm before the Court of Appeals for the D.C.

Circuit decides the merits” of the pending litigation.

Justice Thomas would have granted the application for a stay;

the views of other Justices regarding the merits of the litigation are unknown.

If the rule is ultimately affirmed and implemented by the EPA and states, it could have a substantial impact on the use of coal and natural gas for the generation of electricity.

Effluent Limitations Guidelines for the Steam Electric Power Generating Industry.

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Supreme Court.

The EPA subsequently issued a policy memorandum on August 5, 2024, that provides an administrative stay of the rule;

Circuit thereafter issued a partial remand of the rule to allow the EPA to respond to comments regarding the severability of the rule’s provisions.

Mercury and Air Toxic Standards (MATS) .

In 2012, the EPA published the final MATS rule, which revised the NSPS for NO x , sulfur dioxide and PM for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants.

MACT standards limit emissions of mercury, acid gas HAPs, non-mercury HAP metals and organic HAPs.

On March 6, 2023, the EPA issued a final rule which reaffirmed its determination to regulate coal- and oil-fired EGUs under CAA section 112, including the regulation of HAPs from EGUs after considering cost.

On April 24, 2023, the EPA proposed to amend the 2012 MATS rule and require an additional two-thirds reduction in the filterable PM emission of non-mercury HAP metals from existing coal-fired power plants and to reduce the mercury standard for lignite plants by 70%.

On April 25, 2024, the EPA issued its final MATS rule which significantly tightens the filterable particulate matter (fPM) emissions limit for existing coal-fired EGU’s, lowering the standard from 0.030 lb/MMBtu to 0.010 lb/MMBtu.

Regional Haze.

3 unchanged sentences

The EPA subsequently filed a motion to approve the consent judgement in the U.S.

District Court for the District of Columbia which remains pending.

District Court for the District of Columbia which was granted.

Federal Coal Leasing Moratorium .

23 unchanged sentences

Regulatory Matters - Australia

Coal Mine Subsidence Compensation Amendment Act 2024 (NSW).

On August 15, 2024, the Coal Mine Subsidence Compensation Amendment Act 2024 No.

48 (NSW) was passed into law.

The amendment act amends the Coal Mine Subsidence Compensation Act 2017 No.

37 (NSW), implementing all nine recommendations of the 2023 statutory review.

The amendments are designed to strengthen the compensation framework to ensure people affected by coal mine subsidence in New South Wales (NSW) can access compensation and support.

The key amendments include extension of the chief executive’s powers to evacuate people from land they reasonably believe has been damaged as a result of subsidence and that may cause danger to a member of the public;

make payment from the fund for temporary accommodation for people who have been evacuated;

requirement of the Subsidence Advisory to assess claims as soon as reasonably practicable after receiving a compensation claim;

limitation on claims if pre-mining inspection was required and refused by the claimant and addition of powers to direct pre-mining inspections;

requiring information and documents from coalmine operators;

and clarifying the roles of Subsidence Advisory and mine operators in the assessment and determination of claims.

Work Health and Safety Act 2011 (NSW) .

On June 4, 2024, the Work Health and Safety Amendment (Industrial Manslaughter) Bill 2024 (Bill) was introduced to the NSW Parliament.

The Bill subsequently passed the NSW Parliament on June 20, 2024.

The Bill amends the Work Health and Safety Act 2011 (NSW) (NSW WHS Act) to include the offense of industrial manslaughter.

The offense will apply to a person conducting a business or undertaking (PCBU) or an officer of a PCBU who engages in conduct that constitutes a failure to comply with the person’s health and safety duty and causes the death of a worker or another individual to whom the duty is owed;

and the person engages in conduct with gross negligence.

The maximum penalty is $20 million Australian dollars for a body corporate or 25 years imprisonment for an individual.

The Bill also provides for an alternative finding of guilt.

That is, where a person is charged with industrial manslaughter, and on trial the court or jury is not satisfied that the person is guilty but is satisfied that the person is guilty of an offense against section 31 (Gross negligence or reckless conduct— Category 1) of the NSW WHS Act, the person may be found guilty and liable to punishment for that offense.

Environmental Protection (Powers and Penalties) and Other Legislation Amendment Act 2024 (QLD) (Powers and Penalties Act).

On June 18, 2024, the Environmental Protection (Powers and Penalties) and Other Legislation Amendment Act 2024 (QLD) (Powers and Penalties Act) received assent.

The Powers and Penalties Act amends the powers and penalties provisions of the Environmental Protection Act 1994 (EP Act), facilitates a more proactive approach to environmental risk management and ensures timely and effective regulatory responses to environmental harm.

The key changes include the general environmental duty becoming an offense provision, an increase in maximum penalties and the consolidation of the various enforcement instruments presently available under the EP Act into a single Environmental Enforcement Order.

National Greenhouse and Energy Reporting Act 2007 (NGER Act).

9 unchanged sentences

The impacts of this change are currently being assessed.

New South Wales (NSW) Environmental .

New South Wales Environmental .

Under the NSW Environmental Planning and Assessment Act 1979 (EPA Act), environmental planning instruments must be considered when approving a mining project development application.

17 unchanged sentences

The proposed development can only proceed once the biodiversity offset obligations have been satisfied.

On July 18, 2024, following an independent review of the BC Act, the NSW government announced it would amend the BC Act to reform the biodiversity offsets scheme by introducing a new statutory standard requiring mining proponents to demonstrate how they have genuinely avoided and minimized impacts to biodiversity and removing the option for major mining proponents to meet a credit obligation through a commitment to ecological mine site rehabilitation .

When enacted, these and other proposed changes have the potential to affect approval processes for future NSW mining projects.

On July 18, 2024, following an independent review of the BC Act, the NSW government announced it would amend the BC Act to reform the biodiversity offsets scheme.

On August 13, 2024, the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024 was introduced into NSW Parliament and, if passed into law, will require mining proponents to demonstrate they have genuinely avoided, minimized and offset impacts to biodiversity.

The bill reinforces the current government’s intent that biodiversity offsets are a last resort.

Additionally, the bill proposes to replace the current ‘no net loss’ standard for biodiversity with the requirement for proponents to achieve ‘net positive’ biodiversity outcomes.

If enacted, these and other proposed changes have the potential to affect approval processes for future NSW mining projects.

NSW Parliament is expected to pass the bill by late November 2024.

New South Wales Coal Directions .

4 unchanged sentences

The Australian Energy Regulator has confirmed that the directions have ended, and the last report was submitted on July 12, 2024.

Aboriginal and Torres Strait Islander Heritage Protection Act 1984.

On August 16, 2024, Australia’s Minister for the Environment and Water made a declaration under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 over a riverine area in NSW that is a proposed tailings dam site for a gold mining project.

The declaration prohibits any mining or related development activity in the area despite the project having previously obtained all necessary environmental and planning approvals under state and federal government laws.

The project proponent has indicated that the decision renders the mine project as no longer financially viable given the time required to develop and receive approvals for an alternative tailings dam site.

The decision has the potential to affect future mining approvals in Australia.

The proponent has until early November to apply for a judicial review of the minister’s decision.

Risks Related to Global Climate Change

9 unchanged sentences

The Company’s ability to early retire debt, declare dividends or repurchase shares in the future will depend on its future financial performance, which in turn depends on the successful implementation of its strategy and on financial, competitive, regulatory, technical and other factors, general economic conditions, demand for and selling prices of coal and other factors specific to its industry, many of which are beyond the Company’s control.

As of June 30, 2024, the Company’s cash and cash equivalents balances totaled $621.7 million, including approximately $388 million held by U.S.

As of September 30, 2024, the Company’s cash and cash equivalents balances totaled $772.9 million, including approximately $420 million held by U.S.

subsidiaries, approximately $336 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S.

5 unchanged sentences

in the form of intercompany dividends.

During the six months ended June 30, 2024, no profits from foreign subsidiaries were repatriated.

During the nine months ended September 30, 2024, no profits from foreign subsidiaries were repatriated.

If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.

The Company’s available liquidity decreased from $1,059.7 million as of December 31, 2023 to $940.8 million as of June 30, 2024.

The Company’s available liquidity increased to $1,089.9 million as of September 30, 2024 from $1,059.7 million as of December 31, 2023.

Available liquidity was comprised of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(Dollars in millions)

4 unchanged sentences

Capital Returns to Shareholders

The Company repurchased approximately 3.2 million shares of its common stock for $80.5 million, including commission fees, and paid dividends of $19.1 million during the six months ended June 30, 2024.

The Company repurchased approximately 7.7 million shares of its common stock for $180.5 million, including commission fees, and paid dividends of $28.5 million during the nine months ended September 30, 2024.

Surety Agreement Amendment and Collateral Requirements

4 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 $508.6 million at June 30, 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 June 30, 2024.

The Company is in compliance with such requirements at September 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.

7 unchanged sentences

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

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.

At September 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.

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

At September 30, 2024, the bank guarantee facilities were backed by cash of $187.9 million.

Revolving Credit Facility

4 unchanged sentences

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

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.

As of September 30, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $98.6 million outstanding as of September 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 $222.0 million at June 30, 2024.

“Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $221.4 million at September 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.

1 unchanged sentence

subsidiaries, as well as a pledge of two Australian subsidiaries.

The Company’s total indebtedness as of June 30, 2024 and December 31, 2023 is presented in the table below.

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

Capital Expenditures

The Company increased its targeted capital expenditures for 2024 from approximately $375 million to $425 million.

The increase is primarily driven by the acceleration of the planned capital spend at the Centurion Mine as development rates have advanced ahead of projected timelines and timing of spend at the Wambo Open-Cut Mine.

The Company’s total indebtedness as of September 30, 2024 and December 31, 2023 is presented in the table below.

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

(Dollars in millions)

4 unchanged sentences

Long-term debt $ 323.7 $ 320.7

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at June 30, 2024, of approximately $16 million in 2024, $18 million in 2025, $16 million in 2026, $13 million in 2027 and $326 million in 2028.

Cash payments for interest related to the Company’s indebtedness and financial assurance instruments amounted to $24.1 million and $41.9 million during the six months ended June 30, 2024 and 2023, respectively.

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at September 30, 2024, of approximately $8 million in 2024, $20 million in 2025, $17 million in 2026, $13 million in 2027 and $326 million in 2028.

Cash paid for interest, net of capitalized interest related to the Company’s indebtedness and financial assurance instruments amounted to $32.6 million and $56.7 million during the nine months ended September 30, 2024 and 2023, respectively.

2028 Convertible Notes

4 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.

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.

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

Accounts Receivable Securitization Program

4 unchanged sentences

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

At June 30, 2024, the Company had no outstanding borrowings and $56.2 million of letters of credit outstanding under the program.

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

At September 30, 2024, the Company had no outstanding borrowings and $60.4 million of letters of credit outstanding under the program.

The Company was not required to post cash collateral under the securitization program at September 30, 2024.

Covenant Compliance

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

The following table summarizes the Company’s cash flows for the six months ended June 30, 2024 and 2023, as reported in the accompanying unaudited condensed consolidated financial statements.

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

The following table summarizes the Company’s cash flows for the nine months ended September 30, 2024 and 2023, as reported in the accompanying unaudited condensed consolidated financial statements.

Available Free Cash Flow is a financial measure not recognized in accordance with U.S.

Refer to the “Reconciliation of Non-GAAP Financial Measures” section above for definitions and reconciliations to the most comparable measures under U.S.

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

7 unchanged sentences

Operating Activities.

The decrease in net cash provided by operating activities for the six months ended June 30, 2024 compared to the same period in the prior year was driven by a year-over-year decrease in operating cash flow from working capital ($461.9 million), primarily attributable to income tax payments and accruals ($191.3 million), an increase in accounts receivable due to timing of sales and overall higher price per ton ($176.6 million) and Shoal Creek inventories build due to the Demopolis Lock outage that continued through May 2024 ($55.0 million);

The decrease in net cash provided by operating activities for the nine months ended September 30, 2024 compared to the same period in the prior year was driven by a year-over-year decrease in operating cash flow from working capital ($260.9 million), primarily attributable to income tax payments and accruals ($218.8 million) and Shoal Creek inventories build due to the lock outages during 2024 ($61.1 million);

the prior year receipt of cash related to variation margin requirements associated with derivative financial instruments ($198.0 million);

and lower cash generated from mining operations.

These unfavorable variances were partially offset by a decrease in cash used for collateral requirements ($266.5 million).

These unfavorable variances were partially offset by decreases in cash used for collateral requirements ($289.2 million) and discontinued operations ($74.9 million) primarily related to the prior year use of cash to settle disputed black lung claims.

Investing Activities.

The increase in net cash used in investing activities for the six months ended June 30, 2024 compared to the same period in the prior year was driven by the acquisition of Wards Well ($143.8 million) and higher capital expenditures and payments of capital accruals ($53.0 million).

The increase in net cash used in investing activities for the nine months ended September 30, 2024 compared to the same period in the prior year was driven by the acquisition of Wards Well ($143.8 million) and higher capital expenditures ($75.3 million).

Financing Activities.

The decrease in net cash used by financing activities for the six months ended June 30, 2024 compared to the same period in the prior year was primarily driven by a decrease in common stock repurchases ($89.9 million), partially offset by an increase in dividends paid ($8.3 million).

The decrease in net cash used by financing activities for the nine months ended September 30, 2024 compared to the same period in the prior year was primarily driven by decreases in common stock repurchases ($80.9 million) and distributions to noncontrolling interest ($24.1 million), partially offset by an increase in payment of debt issuance and other deferred financing costs ($10.8 million).

Off-Balance-Sheet Arrangements

4 unchanged sentences

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

June 30, 2024

September 30, 2024

Reclamation Support Other Support (1)

10 unchanged sentences

(3) Certain letters of credit serve as collateral for surety bonds at the request of surety bond providers.

Not presented in the above table is $825.1 million of restricted cash and other balances serving as collateral which are included in the accompanying condensed consolidated balance sheets at June 30, 2024, as described in Note 12.

Not presented in the above table is $839.0 million of restricted cash and other balances serving as collateral which are included in the accompanying condensed consolidated balance sheets at September 30, 2024, as described in Note 12.

“Financial Instruments and Other Guarantees” of the accompanying unaudited condensed consolidated financial statements.

Such collateral is primarily in support of the financial instruments noted above, including in relation to the Company’s surety bond portfolio, its collateralized letter of credit agreement, its bank guarantee facilities and amounts held directly with beneficiaries which are not supported by surety bonds.

The restricted cash and collateral balance at June 30, 2024 decreased from $957.6 million at December 31, 2023 due to collateral releases related to reductions in reclamation bonding requirements, replacement of cash-collateralized letters of credit with letters of credit under the new revolving credit facility and the impact of foreign currency rate changes.

At June 30, 2024, the Company had total asset retirement obligations of $699.9 million.

The restricted cash and collateral balance decreased $118.6 million during the nine months ended September 30, 2024 due to collateral releases related to reductions in reclamation bonding requirements, replacement of cash-collateralized letters of credit with letters of credit under the new revolving credit facility and the impact of foreign currency rate changes.

At September 30, 2024, the Company had total asset retirement obligations of $701.4 million.

Bonding requirement amounts may differ significantly from the re lated asset retirement obligation because such requirements are calculated under the assumption that reclamation begins currently, whereas the Company’s accounting liabilities are discounted from the end of a mine’s economic life (when final reclamation work would begin) to the balance sheet date.

As noted above, the Company’s reclamation bonding requirements decreased during the six months ended June 30, 2024 primarily due to an approximate $110 million reduction in U.S.

As noted above, the Company’s reclamation bonding requirements decreased during the nine months ended September 30, 2024, primarily due to an approximate $110 million reduction in U.S.

reclamation bonding requirements.

At June 30, 2024, the Company’s reclamation bonding requirements were supported by approximately $720 million of restricted cash and other balances serving as collateral, which exceeds the financial liability for final mine reclamation as calculated in accordance with U.S.

At September 30, 2024, the Company’s reclamation bonding requirements were supported by approximately $725 million of restricted cash and other balances serving as collateral, which exceeds the financial liability for final mine reclamation as calculated in accordance with U.S.

Critical Accounting Policies and Estimates

5 unchanged sentences

Actual results may differ from these estimates.

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

At September 30, 2024, the Company identified certain assets with an aggregate carrying value of approximately $207 million in its Other U.S.

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

1 unchanged sentence

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K for the year ended December 31, 2023.

The Company’s critical accounting policies remain unchanged at June 30, 2024, and there have been no material changes in the Company’s critical accounting estimates.

The Company’s critical accounting policies remain unchanged at September 30, 2024, and there have been no material changes in the Company’s critical accounting estimates.

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

1 unchanged sentence

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 2. Management’s Discussion and Analysis