Item 1. Financial Statements
Item 1. Financial Statements.
PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions, except per share data)
Revenue $ 890.1 $ 1,042.0 $ 1,827.1 $ 2,025.6
Costs and expenses
Operating costs and expenses (exclusive of items shown separately below) 789.4 803.9 1,559.6 1,618.1
Depreciation, depletion and amortization 93.4 82.9 185.5 162.7
Asset retirement obligation expenses 13.8 12.9 27.4 25.8
Selling and administrative expenses 23.5 22.1 47.1 44.1
Restructuring charges 3.5 0.1 5.2 0.2
Transaction costs related to business combinations 18.8 — 21.2 —
Other operating (income) loss:
Net gain on disposals ( 14.8 ) ( 7.5 ) ( 20.0 ) ( 9.6 )
Provision for NARM loss — 1.9 — 3.7
Shoal Creek insurance recovery — ( 109.5 ) — ( 109.5 )
Loss from equity affiliates 0.9 1.3 7.6 5.0
Operating (loss) profit ( 38.4 ) 233.9 ( 6.5 ) 285.1
Interest expense, net of capitalized interest 11.1 10.7 22.6 25.4
Interest income ( 13.8 ) ( 16.8 ) ( 29.2 ) ( 36.0 )
Net periodic benefit credit, excluding service cost ( 7.4 ) ( 10.2 ) ( 14.8 ) ( 20.3 )
(Loss) income from continuing operations before income taxes ( 28.3 ) 250.2 14.9 316.0
Income tax (benefit) provision ( 2.7 ) 39.4 2.2 59.5
(Loss) income from continuing operations, net of income taxes ( 25.6 ) 210.8 12.7 256.5
Loss from discontinued operations, net of income taxes ( 0.4 ) ( 1.6 ) ( 0.7 ) ( 2.3 )
Net (loss) income ( 26.0 ) 209.2 12.0 254.2
Less: Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2
Net (loss) income attributable to common stockholders $ ( 27.6 ) $ 199.4 $ 6.8 $ 239.0
(Loss) income from continuing operations:
Basic (loss) income per share $ ( 0.22 ) $ 1.59 $ 0.06 $ 1.90
Diluted (loss) income per share $ ( 0.22 ) $ 1.43 $ 0.06 $ 1.72
Net (loss) income attributable to common stockholders:
Basic (loss) income per share $ ( 0.23 ) $ 1.58 $ 0.06 $ 1.88
Diluted (loss) income per share $ ( 0.23 ) $ 1.42 $ 0.06 $ 1.70
See accompanying notes to unaudited condensed consolidated financial statements.
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PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions)
Net (loss) income $ ( 26.0 ) $ 209.2 $ 12.0 $ 254.2
Postretirement plans (net of $ 0.0 tax provisions in each period)
( 10.2 ) ( 13.3 ) ( 20.4 ) ( 26.5 )
Foreign currency translation adjustment 1.8 0.5 2.2 ( 1.4 )
Other comprehensive loss, net of income taxes ( 8.4 ) ( 12.8 ) ( 18.2 ) ( 27.9 )
Comprehensive (loss) income ( 34.4 ) 196.4 ( 6.2 ) 226.3
Less: Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2
Comprehensive (loss) income attributable to common stockholders $ ( 36.0 ) $ 186.6 $ ( 11.4 ) $ 211.1
See accompanying notes to unaudited condensed consolidated financial statements.
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PEABODY ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2025 December 31, 2024
(Amounts in millions, except per share data)
ASSETS
Current assets
Cash and cash equivalents $ 585.9 $ 700.4
Accounts receivable, net of allowance for credit losses of $ 0.0 at June 30, 2025 and December 31, 2024
322.7 359.3
Inventories, net 417.5 393.4
Other current assets 301.2 327.6
Total current assets 1,627.3 1,780.7
Property, plant, equipment and mine development, net 3,056.3 3,081.5
Operating lease right-of-use assets 74.6 119.3
Restricted cash and collateral 847.1 809.8
Investments and other assets 158.1 162.4
Total assets $ 5,763.4 $ 5,953.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt $ 14.6 $ 15.8
Accounts payable and accrued expenses 722.4 811.7
Total current liabilities 737.0 827.5
Long-term debt, less current portion 329.2 332.3
Deferred income taxes 38.4 40.9
Asset retirement obligations, less current portion 673.3 667.8
Accrued postretirement benefit costs 117.9 120.4
Operating lease liabilities, less current portion 50.3 86.7
Other noncurrent liabilities 143.2 169.3
Total liabilities 2,089.3 2,244.9
Stockholders’ equity
Preferred Stock — $ 0.01 per share par value; 100.0 shares authorized, no shares issued or outstanding as of June 30, 2025 and December 31, 2024
— —
Series Common Stock — $ 0.01 per share par value; 50.0 shares authorized, no shares issued or outstanding as of June 30, 2025 and December 31, 2024
— —
Common Stock — $ 0.01 per share par value; 450.0 shares authorized, 189.3 shares issued and 121.6 shares outstanding as of June 30, 2025 and 189.1 shares issued and 121.4 shares outstanding as of December 31, 2024
1.9 1.9
Additional paid-in capital 3,996.0 3,990.5
Treasury stock, at cost — 67.7 common shares as of June 30, 2025 and December 31, 2024
( 1,927.3 ) ( 1,926.5 )
Retained earnings 1,434.1 1,445.8
Accumulated other comprehensive income 120.6 138.8
Peabody Energy Corporation stockholders’ equity 3,625.3 3,650.5
Noncontrolling interests 48.8 58.3
Total stockholders’ equity 3,674.1 3,708.8
Total liabilities and stockholders’ equity $ 5,763.4 $ 5,953.7
See accompanying notes to unaudited condensed consolidated financial statements.
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PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2025 2024
(Dollars in millions)
Cash Flows From Operating Activities
Net income $ 12.0 $ 254.2
Loss from discontinued operations, net of income taxes 0.7 2.3
Income from continuing operations, net of income taxes 12.7 256.5
Adjustments to reconcile income from continuing operations, net of income taxes to net cash provided by operating activities:
Depreciation, depletion and amortization 185.5 162.7
Noncash interest expense 3.3 3.2
Deferred income taxes ( 2.4 ) 18.7
Noncash share-based compensation 5.3 4.1
Net gain on disposals ( 20.0 ) ( 9.6 )
Noncash income from port and rail capacity assignment — ( 0.3 )
Loss from equity affiliates 7.6 5.0
Shoal Creek insurance recovery — ( 109.5 )
Unrealized (gains) losses on foreign currency option contracts ( 8.4 ) 3.3
Changes in current assets and liabilities:
Accounts receivable 51.3 ( 27.3 )
Inventories ( 24.2 ) ( 70.4 )
Other current assets 23.7 18.4
Accounts payable and accrued expenses ( 60.2 ) ( 234.0 )
Collateral arrangements ( 5.3 ) 149.6
Asset retirement obligations 5.0 ( 2.7 )
Postretirement benefit obligations ( 22.9 ) ( 30.1 )
Pension obligations ( 4.9 ) —
Other, net ( 1.8 ) ( 7.6 )
Net cash provided by continuing operations 144.3 130.0
Net cash used in discontinued operations ( 1.2 ) ( 3.2 )
Net cash provided by operating activities 143.1 126.8
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PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
Six Months Ended June 30,
2025 2024
(Dollars in millions)
Cash Flows From Investing Activities
Additions to property, plant, equipment and mine development ( 164.6 ) ( 167.0 )
Changes in accrued expenses related to capital expenditures ( 42.0 ) ( 13.7 )
Wards Well acquisition — ( 143.8 )
Insurance proceeds attributable to Shoal Creek equipment losses — 5.6
Proceeds from disposal of assets, net of receivables 12.5 15.5
Contributions to joint ventures ( 291.3 ) ( 373.5 )
Distributions from joint ventures 306.7 360.6
Other, net ( 2.0 ) ( 0.5 )
Net cash used in investing activities ( 180.7 ) ( 316.8 )
Cash Flows From Financing Activities
Repayments of long-term debt ( 7.6 ) ( 4.6 )
Payment of debt issuance and other deferred financing costs ( 1.8 ) ( 11.1 )
Common stock repurchases — ( 83.1 )
Excise taxes paid related to common stock repurchases ( 1.7 ) —
Repurchase of employee common stock relinquished for tax withholding ( 0.8 ) ( 4.1 )
Dividends paid ( 18.3 ) ( 19.1 )
Distributions to noncontrolling interests ( 14.7 ) ( 18.5 )
Net cash used in financing activities ( 44.9 ) ( 140.5 )
Net change in cash, cash equivalents and restricted cash ( 82.5 ) ( 330.5 )
Cash, cash equivalents and restricted cash at beginning of period (1)
1,382.6 1,650.2
Cash, cash equivalents and restricted cash at end of period (2)
$ 1,300.1 $ 1,319.7
(1) The following table provides a reconciliation of “Cash, cash equivalents and restricted cash at beginning of period”:
Cash and cash equivalents $ 700.4
Restricted cash included in “Restricted cash and collateral” 682.2
Cash, cash equivalents and restricted cash at beginning of period $ 1,382.6
(2) The following table provides a reconciliation of “Cash, cash equivalents and restricted cash at end of period”:
Cash and cash equivalents $ 585.9
Restricted cash included in “Restricted cash and collateral” 714.2
Cash, cash equivalents and restricted cash at end of period $ 1,300.1
See accompanying notes to unaudited condensed consolidated financial statements.
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PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions, except per share data)
Common Stock
Balance, beginning of period $ 1.9 $ 1.9 $ 1.9 $ 1.9
Balance, end of period 1.9 1.9 1.9 1.9
Additional paid-in capital
Balance, beginning of period 3,993.4 3,985.1 3,990.5 3,983.0
Dividend equivalent units on dividends declared — — 0.2 0.1
Share-based compensation for equity-classified awards 2.6 2.1 5.3 4.1
Balance, end of period 3,996.0 3,987.2 3,996.0 3,987.2
Treasury stock
Balance, beginning of period ( 1,927.3 ) ( 1,824.8 ) ( 1,926.5 ) ( 1,740.2 )
Common stock repurchases — — — ( 83.1 )
Net change in unsettled common stock repurchases — — — 2.6
Excise tax accrued on common stock repurchases — — — ( 0.7 )
Repurchase of employee common stock relinquished for tax withholding — ( 0.7 ) ( 0.8 ) ( 4.1 )
Balance, end of period ( 1,927.3 ) ( 1,825.5 ) ( 1,927.3 ) ( 1,825.5 )
Retained earnings
Balance, beginning of period 1,470.9 1,142.5 1,445.8 1,112.7
Net (loss) income attributable to common stockholders ( 27.6 ) 199.4 6.8 239.0
Dividends declared ($ 0.075 , $ 0.075 , $ 0.150 and $ 0.150 per share, respectively)
( 9.2 ) ( 9.4 ) ( 18.5 ) ( 19.2 )
Balance, end of period 1,434.1 1,332.5 1,434.1 1,332.5
Accumulated other comprehensive income
Balance, beginning of period 129.0 174.5 138.8 189.6
Postretirement plans (net of $ 0.0 tax provisions in each period)
( 10.2 ) ( 13.3 ) ( 20.4 ) ( 26.5 )
Foreign currency translation adjustment 1.8 0.5 2.2 ( 1.4 )
Balance, end of period 120.6 161.7 120.6 161.7
Noncontrolling interests
Balance, beginning of period 47.2 47.4 58.3 60.5
Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2
Distributions to noncontrolling interests — — ( 14.7 ) ( 18.5 )
Balance, end of period 48.8 57.2 48.8 57.2
Total stockholders’ equity $ 3,674.1 $ 3,715.0 $ 3,674.1 $ 3,715.0
See accompanying notes to unaudited condensed consolidated financial statements.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of Peabody Energy Corporation (PEC) and its consolidated subsidiaries and affiliates (along with PEC, the Company or Peabody). Interests in subsidiaries controlled by the Company are consolidated with any outside stockholder interests reflected as noncontrolling interests, except when the Company has an undivided interest in a joint venture. In those cases, the Company includes its proportionate share in the assets, liabilities, revenue and expenses of the jointly controlled entities within each applicable line item of the unaudited condensed consolidated financial statements. All intercompany transactions, profits and balances have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, these financial statements reflect all normal, recurring adjustments necessary for a fair presentation. Balance sheet information presented herein as of December 31, 2024 has been derived from the Company’s audited consolidated balance sheet at that date. The Company’s results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2025.
(2) Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented
Newly Adopted Accounting Standards
The Company did not adopt any new accounting standards that had a material impact on its unaudited condensed consolidated financial statements or disclosures.
Accounting Standards Not Yet Implemented
Income Taxes . In December 2023, Accounting Standards Update (ASU) 2023-09 was issued, which requires public entities to disclose more information primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated results of operations, cash flows and financial condition.
Expense Disaggregation . In November 2024, ASU 2024-03 was issued, which requires public entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated results of operations, cash flows and financial condition.
Induced Conversions of Convertible Debt . In November 2024, ASU 2024-04 was issued, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this ASU affect entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2025 and interim reporting periods within those periods. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company will apply this guidance upon its adoption, as applicable.
(3) Revenue Recognition
Refer to Note 1. “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, for the Company’s policies regarding “Revenue” and “Accounts receivable, net.”
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Disaggregation of Revenue
Revenue by product type and market is set forth in the following tables. With respect to its seaborne reportable segments, the Company classifies as “Export” certain revenue from domestically-delivered coal under contracts in which the price is derived on a basis similar to export contracts.
Three Months Ended June 30, 2025
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate and Other (1)
Consolidated
(Dollars in millions)
Thermal coal
Domestic $ 35.8 $ — $ 275.7 $ 155.0 $ — $ 466.5
Export 159.3 — — — — 159.3
Total thermal 195.1 — 275.7 155.0 — 625.8
Metallurgical coal
Export — 251.9 — — — 251.9
Total metallurgical — 251.9 — — — 251.9
Other — 0.3 — 0.1 12.0 12.4
Revenue $ 195.1 $ 252.2 $ 275.7 $ 155.1 $ 12.0 $ 890.1
Three Months Ended June 30, 2024
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate and Other (1)
Consolidated
(Dollars in millions)
Thermal coal
Domestic $ 36.9 $ — $ 221.4 $ 200.3 $ — $ 458.6
Export 270.6 — — — — 270.6
Total thermal 307.5 — 221.4 200.3 — 729.2
Metallurgical coal
Export — 294.0 — — — 294.0
Total metallurgical — 294.0 — — — 294.0
Other — 0.3 0.5 1.7 16.3 18.8
Revenue $ 307.5 $ 294.3 $ 221.9 $ 202.0 $ 16.3 $ 1,042.0
Six Months Ended June 30, 2025
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate and Other (1)
Consolidated
(Dollars in millions)
Thermal coal
Domestic $ 73.5 $ — $ 551.2 $ 323.7 $ — $ 948.4
Export 386.6 — — — — 386.6
Total thermal 460.1 — 551.2 323.7 — 1,335.0
Metallurgical coal
Export — 471.6 — — — 471.6
Total metallurgical — 471.6 — — — 471.6
Other 0.1 0.7 0.1 0.1 19.5 20.5
Revenue $ 460.2 $ 472.3 $ 551.3 $ 323.8 $ 19.5 $ 1,827.1
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Six Months Ended June 30, 2024
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate and Other (1)
Consolidated
(Dollars in millions)
Thermal coal
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
Other 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
(1) Corporate and Other includes the following:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions)
Revenue from physical sale of coal (2)
$ 7.8 $ 12.1 $ 11.8 $ 14.2
Other 4.2 4.2 7.7 9.1
Total Corporate and Other $ 12.0 $ 16.3 $ 19.5 $ 23.3
(2) 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. Primarily represents the difference between the price contracted with the customer and the price allocated to the operating segment.
Accounts Receivable
“Accounts receivable, net” at June 30, 2025 and December 31, 2024 consisted of the following:
June 30, 2025 December 31, 2024
(Dollars in millions)
Trade receivables, net $ 264.3 $ 294.9
Miscellaneous receivables, net 58.4 64.4
Accounts receivable, net $ 322.7 $ 359.3
None of the above receivables included allowances for credit losses at June 30, 2025 or December 31, 2024. No charges for credit losses were recognized during the three and six months ended June 30, 2025 or 2024.
(4) Inventories
“Inventories, net” as of June 30, 2025 and December 31, 2024 consisted of the following:
June 30, 2025 December 31, 2024
(Dollars in millions)
Materials and supplies, net $ 167.2 $ 157.5
Raw coal 100.4 109.6
Saleable coal 149.9 126.3
Inventories, net $ 417.5 $ 393.4
Materials and supplies inventories, net presented above have been shown net of reserves of $ 2.4 million and $ 3.5 million as of June 30, 2025 and December 31, 2024, respectively.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(5) Equity Method Investments
The Company’s equity method investments include its interests in Middlemount Coal Pty Ltd. (Middlemount), R3 Renewables LLC (R3), R3 Renewables II LLC (R3 II) 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 from equity affiliates” in the unaudited condensed consolidated statements of operations:
Loss (Income) from Equity Affiliates
Book Value at Three Months Ended June 30, Six Months Ended June 30,
June 30, 2025 December 31, 2024 2025 2024 2025 2024
(Dollars in millions)
Equity method investment related to Middlemount $ 48.2 $ 52.7 $ 0.5 $ ( 2.3 ) $ 6.8 $ ( 1.9 )
Equity method investment related to R3 — — — 3.6 — 6.9
Equity method investment related to R3 II 3.4 5.8 0.4 — 0.8 —
Total equity method investments $ 51.6 $ 58.5 $ 0.9 $ 1.3 $ 7.6 $ 5.0
R3 and R3 II
In March 2022, the Company entered into a joint venture with unrelated partners to form R3, an entity in which the Company held a 50 % interest. 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 $ 8.4 million to R3 during the six months ended June 30, 2024.
In November 2024, R3 sold seven projects to an unrelated party and contributed its remaining three projects to a new entity (R3 II). The unrelated party purchased 75 % of the equity in R3 II for cash and contingent consideration for the future obligation to pay seller’s milestone payments. R3 used the proceeds from the equity purchase of R3 II to repurchase shares from the other investors of R3, such that Peabody is the only remaining equity holder of R3, which has a 25 % equity interest in R3 II.
(6) Derivatives and Fair Value Measurements
Derivatives
From time to time, the Company may utilize various types of derivative instruments to manage its exposure to risks in the normal course of business, including (1) foreign currency exchange rate risk and the variability of cash flows associated with forecasted Australian dollar expenditures made in its Australian mining platform and (2) price risk of fluctuating coal prices related to forecasted sales or purchases of coal, or changes in the fair value of a fixed price physical sales contract. These risk management activities are actively monitored for compliance with the Company’s risk management policies.
On a limited basis, the Company engages in the direct and brokered trading of coal and freight-related contracts. Except those contracts for which the Company has elected to apply a normal purchases and normal sales exception, all derivative coal trading contracts are accounted for at fair value.
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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 June 30, 2025, the Company held average rate options with an aggregate notional amount of $ 490.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar operating expenditures over the nine-month period ending March 31, 2026. 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 $ 0.67 to $ 0.70 over the nine-month period ending March 31, 2026. As of June 30, 2025, the Company also held purchased collars with an aggregate notional amount of $ 506.0 million Australian dollars related to anticipated Australian dollar operating expenditures during the nine-month period ending March 31, 2026. The purchased collars have a floor ranging from approximately $ 0.57 to $ 0.61 and a ceiling ranging from $ 0.66 to $ 0.71 , whereby the Company will incur a loss on the instruments for quarterly average Australian dollar-to-U.S. dollar exchange rates below the floor and a gain for quarterly average rates above the ceiling.
Derivative Contracts Related to Forecasted Sales
As of June 30, 2025, the Company had no coal derivative contracts related to its forecasted sales. Historically, such financial contracts have included futures and forwards.
Financial Trading Contracts
On a limited basis, the Company may enter coal or freight derivative contracts for trading purposes. Such financial contracts may include futures, forwards and options. The Company held no financial trading contracts as of June 30, 2025.
Tabular Derivatives Disclosures
The Company has master netting agreements with certain of its counterparties which allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. Such netting arrangements reduce the Company’s credit exposure related to these counterparties. 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 June 30, 2025, the Company had an asset derivative comprised of foreign currency option contracts with a fair value of $ 5.2 million. As of December 31, 2024, the Company had a liability derivative comprised of foreign currency option contracts with a fair value of $ 3.6 million. The net amount of asset derivatives is included in “Other current assets” and the net amount of liability derivatives is included in “Accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheets.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Currently, the Company does not seek cash flow hedge accounting treatment for its derivative financial instruments and, thus, changes in fair value are reflected in current earnings. The tables below show the amounts of pretax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.
Three Months Ended June 30, 2025
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 $ 3.6 $ ( 0.5 ) $ 4.1
Total $ 3.6 $ ( 0.5 ) $ 4.1
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
Six Months Ended June 30, 2025
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 $ 7.2 $ ( 1.2 ) $ 8.4
Total $ 7.2 $ ( 1.2 ) $ 8.4
Six Months Ended June 30, 2024
Total loss recognized in income Loss realized in income on derivatives Unrealized loss recognized in income on derivatives
Derivative Instrument Classification
(Dollars in millions)
Foreign currency option contracts Operating costs and expenses $ ( 5.7 ) $ ( 2.4 ) $ ( 3.3 )
Total $ ( 5.7 ) $ ( 2.4 ) $ ( 3.3 )
The Company classifies derivative-related activity within the “Cash Flows From Operating Activities” section of the unaudited condensed consolidated statements of cash flows.
Fair Value Measurements
The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. These levels include: Level 1 - inputs are quoted prices in active markets for the identical assets or liabilities; Level 2 - inputs are other than quoted prices included in Level 1 that are directly or indirectly observable through market-corroborated inputs; and Level 3 - inputs are unobservable, or observable but cannot be market-corroborated, requiring the Company to make assumptions about pricing by market participants.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables set forth the hierarchy of the Company’s net asset (liability) positions for which fair value is measured on a recurring basis.
June 30, 2025
Level 1 Level 2 Level 3 Total
(Dollars in millions)
Foreign currency option contracts $ — $ 5.2 $ — $ 5.2
Total net assets $ — $ 5.2 $ — $ 5.2
December 31, 2024
Level 1 Level 2 Level 3 Total
(Dollars in millions)
Foreign currency option contracts $ — $ ( 3.6 ) $ — $ ( 3.6 )
Equity securities 1.0 — — 1.0
Total net assets (liabilities) $ 1.0 $ ( 3.6 ) $ — $ ( 2.6 )
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. In the case of certain debt securities, fair value is provided by a third-party pricing service. Below is a summary of the Company’s valuation techniques for Level 1 and 2 financial assets and liabilities:
• Foreign currency option contracts are valued utilizing inputs obtained in quoted public markets (Level 2) except when credit and non-performance risk is considered to be a significant input, then the Company classifies such contracts as Level 3.
• 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 June 30, 2025 and December 31, 2024:
• Cash and cash equivalents, restricted cash, accounts receivable, including those within the Company’s accounts receivable securitization program, notes receivable and accounts payable have carrying values which approximate fair value due to the short maturity or the liquid nature of these instruments.
• Long-term debt fair value estimates are based on observed prices for securities when available (Level 2), and otherwise on estimated borrowing rates to discount the cash flows to their present value (Level 3).
Market risk associated with the Company’s fixed-rate long-term debt relates to the potential reduction in the fair value from an increase in interest rates. The fair value of debt, shown below, is principally based on reported market values and estimates based on interest rates, maturities, credit risk, underlying collateral and completed market transactions.
June 30, 2025 December 31, 2024
(Dollars in millions)
Total debt at par value $ 349.1 $ 354.4
Less: Unamortized debt issuance costs ( 5.3 ) ( 6.3 )
Net carrying amount $ 343.8 $ 348.1
Estimated fair value $ 363.6 $ 438.0
The Company had no transfers between Levels 1, 2 and 3 during the three and six months ended June 30, 2025 and 2024. The Company’s policy is to value all transfers between levels using the beginning of period valuation.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(7) Property, Plant, Equipment and Mine Development
The composition of property, plant, equipment and mine development, net, as of June 30, 2025 and December 31, 2024 is set forth in the table below:
June 30, 2025 December 31, 2024
(Dollars in millions)
Land and coal interests $ 2,645.8 $ 2,648.5
Buildings and improvements 746.7 726.7
Machinery and equipment 2,201.2 2,078.8
Less: Accumulated depreciation, depletion and amortization ( 2,537.4 ) ( 2,372.5 )
Property, plant, equipment and mine development, net $ 3,056.3 $ 3,081.5
At-Risk Assets
The Company identified certain assets with an aggregate carrying value of approximately $ 71 million at June 30, 2025 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 six months ended June 30, 2025 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 benefit of $ 2.7 million and income tax provision of $ 39.4 million for the three months ended June 30, 2025 and 2024, respectively, included tax provisions of $ 1.4 million and $ 1.9 million, respectively, related to the remeasurement of foreign income tax accounts. The Company’s income tax provisions of $ 2.2 million and $ 59.5 million for the six months ended June 30, 2025 and 2024, respectively, included a tax provision of $ 1.9 million and a tax benefit of $ 3.9 million, respectively, related to the remeasurement of foreign income tax accounts. Due to existing valuation allowances, the income tax expense will primarily be related to the Australian income.
(9) Long-term Debt
The Company’s total indebtedness as of June 30, 2025 and December 31, 2024 consisted of the following:
Debt Instrument (defined below, as applicable) June 30, 2025 December 31, 2024
(Dollars in millions)
3.250 % Convertible Senior Notes due March 2028 (2028 Convertible Notes)
$ 320.0 $ 320.0
BUMA Loan Note 9.8 9.3
Finance lease obligations 19.3 25.1
Less: Debt issuance costs ( 5.3 ) ( 6.3 )
343.8 348.1
Less: Current portion of long-term debt 14.6 15.8
Long-term debt $ 329.2 $ 332.3
2028 Convertible Notes
On March 1, 2022, through a private offering, the Company issued the 2028 Convertible Notes in the aggregate principal amount of $ 320.0 million. The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.
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. The Company capitalized $ 11.2 million of debt issuance costs related to the offering, which are being amortized over the terms of the notes.
The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The 2028 Convertible Notes bear interest at a rate of 3.250 % per year, payable semi-annually in arrears on March 1 and September 1 of each year.
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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 19, 2025, the conversion rate was increased to 51.7762 shares of the Company’s common stock per $ 1,000 principal amount of 2028 Convertible Notes, which represented an adjusted conversion price of approximately $ 19.31 per share. Under the applicable conversion rate formula, the $ 0.075 per share dividend declared on May 6, 2025 and paid on June 4, 2025 yielded a revised conversion rate of 52.0421 shares per $ 1,000 principal amount of 2028 Convertible Notes, which did not meet the 1 % threshold to impact the existing conversion rate of 51.7762 . 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 second quarter of 2025, 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 during the third quarter of 2025.
As of June 30, 2025, the if-converted value of the 2028 Convertible Notes did not exceed the principal amount.
Revolving Credit Facility
The Company established a revolving credit facility with a maximum aggregate principal amount of $ 320.0 million in revolving commitments by entering into a credit agreement, dated as of January 18, 2024 (the 2024 Credit Agreement), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, PNC Bank, National Association, as administrative agent, and the lenders party thereto. The Company paid aggregate debt issuance costs of $ 9.7 million.
The revolving commitments and any related loans, if applicable (any such loans, the Revolving Loans), established by the 2024 Credit Agreement terminate or mature, as applicable, on January 18, 2028, subject to certain conditions relating to the Company’s outstanding 2028 Convertible Notes. The Revolving Loans bear interest at a secured overnight financing rate (SOFR) plus an applicable margin ranging from 3.50 % to 4.25 %, depending on the Company’s total net leverage ratio (as defined under the 2024 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50 % to 3.25 %, at the Company’s option. Letters of credit issued under the 2024 Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.50 % to 4.25 % plus a fronting fee equal to 0.125 % per annum. Unused capacity under the 2024 Credit Agreement bears a commitment fee of 0.50 % per annum. On November 25, 2024, the Company amended the 2024 Credit Agreement to, among other things, permit (i) Peabody’s planned acquisition of multiple coal mines from Anglo American plc (Anglo) as further discussed in Note 11. “Other Events,” (ii) the related bridge loan facility and (iii) the incurrence of additional indebtedness to finance the acquisition, subject to compliance with certain pro forma financial covenants. The Company paid aggregate deferred financing costs of $ 0.9 million as part of the amendment.
As of June 30, 2025, the 2024 Credit Agreement had only been utilized for letters of credit, including $ 49.3 million outstanding as of June 30, 2025. 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 13. “Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $ 270.7 million at June 30, 2025.
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. The 2024 Credit Agreement is secured by substantially all assets of the Company and its U.S. subsidiaries, as well as a pledge of two Australian subsidiaries.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
BUMA Loan Note
The Company has agreed to, following the closing of the Anglo acquisition, sell a portion of the assets (the Dawson Assets) to Pt Bukit Makmur Mandiri Utama or one of its subsidiaries (BUMA). Accordingly, on November 25, 2024, concurrent with its entry into the purchase agreements for the Anglo acquisition, the Company entered into a loan note deed with BUMA pursuant to which BUMA will lend to the Company the funds required to purchase the Dawson Assets under the Anglo acquisition purchase agreements and fund certain other obligations in relation to the Dawson Assets (the BUMA Loan Note). The Company received $ 9.3 million in BUMA Loan Note proceeds during the year ended December 31, 2024 to fund a portion of the deposit to Anglo for the planned acquisition. The BUMA Loan Note bears interest at a coupon rate of 10 % per year. During the six months ended June 30, 2025, the Company capitalized $ 0.5 million interest expense to the BUMA Loan Note principal balance in accordance with the terms of the loan note deed.
Refer to Note 11. “Other Events” for additional information associated with the Anglo acquisition.
Bridge Loan Facility
Concurrently with its entry into definitive agreements to acquire the Anglo assets, the Company entered into a bridge loan facility commitment letter (the Bridge Commitment Letter, and the senior secured 364-day bridge facility provided for therein, the Bridge Facility), pursuant to which the lenders agreed to provide the Bridge Facility to the Company in the amount of up to $ 2.075 billion in order to finance the planned acquisition in part. The Company expects to replace the Bridge Facility with permanent financing prior to the closing date, but there can be no assurance such financing will occur and any such expectation is subject to market conditions. During the three months ended June 30, 2025, the Company paid a $ 10.4 million duration fee on the Bridge Facility.
To the extent borrowings are made under the Bridge Facility, any loans would bear interest at a SOFR plus an applicable margin of 8.00 % or a base rate plus an applicable margin of 7.00 %, at the Company’s option. Such applicable margin would increase by an additional 0.75 % on the date that is 90 days following the closing date of the planned acquisition. Any borrowings under the Bridge Facility would mature 364 days from the initial funding date, which would be on or around the closing date of the planned acquisition.
The availability of borrowings under the Bridge Facility is subject to the satisfaction of certain customary conditions for transactions of this type. Any definitive financing documentation for the Bridge Facility will contain customary representations and warranties, covenants and events of defaults for transactions of this type. Upon execution of any definitive financing documentation for the Bridge Facility, the Bridge Facility will be guaranteed by substantially all U.S. subsidiaries of the Company and secured by substantially all assets of the Company, its U.S. subsidiaries and, subject to certain conditions, certain of the Company’s Australian subsidiaries.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Interest Charges
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, 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,
2025 2024 2025 2024
(Dollars in millions)
2028 Convertible Notes $ 2.6 $ 2.6 $ 5.2 $ 5.2
Finance lease obligations 0.3 0.5 0.7 0.9
Financial assurance instruments 6.4 6.1 13.6 14.9
Amortization of debt issuance costs 1.4 2.0 2.8 3.2
Receivables securitization program 0.6 0.6 1.2 1.4
Capitalized interest ( 1.7 ) ( 1.7 ) ( 3.9 ) ( 1.7 )
Other 1.5 0.6 3.0 1.5
Interest expense, net of capitalized interest $ 11.1 $ 10.7 $ 22.6 $ 25.4
Cash paid for interest, net of capitalized interest $ 14.2 $ 12.6 $ 24.1 $ 24.1
Non-cash interest expense $ 1.7 $ 1.9 $ 3.3 $ 3.2
Covenant Compliance
The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2025.
(10) Pension and Postretirement Benefit Costs
The components of net periodic pension, postretirement benefit and workers’ compensation costs, excluding the service cost for benefits earned, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.
The Company sponsors a qualified pension plan. Annual contributions to the qualified plan are made in accordance with minimum funding standards and the Company’s agreement with the Pension Benefit Guaranty Corporation (PBGC). Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006. As of June 30, 2025, the 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 the qualified plan in 2025 based on minimum funding requirements. During the six months ended June 30, 2025, the Company made a discretionary cash contribution of $ 5.0 million to the qualified plan which allowed for termination of the Company’s agreement with the PBGC and resulted in the release of a $ 37.0 million letter of credit that had been maintained in favor of the PBGC.
Net periodic postretirement benefit credit included the following components:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions)
Service cost for benefits earned $ 0.1 $ 0.1 $ 0.2 $ 0.2
Interest cost on accumulated postretirement benefit obligation 1.9 2.3 3.9 4.6
Expected return on plan assets ( 0.1 ) ( 0.1 ) ( 0.2 ) ( 0.2 )
Amortization of prior service credit ( 10.2 ) ( 13.3 ) ( 20.4 ) ( 26.5 )
Net periodic postretirement benefit credit $ ( 8.3 ) $ ( 11.0 ) $ ( 16.5 ) $ ( 21.9 )
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company has established a Voluntary Employees’ Beneficiary Association (VEBA) trust to pre-fund a portion of benefits for non-represented retirees. The Company does not expect to make any discretionary contributions to the VEBA trust in 2025 and plans to utilize a portion of VEBA assets to make certain benefit payments.
(11) Other Events
Planned Anglo American Acquisition
On November 25, 2024, Peabody entered into definitive agreements (the Purchase Agreements), to acquire from Anglo a portion of the assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia, including Anglo’s interests in the Moranbah North and Grosvenor mines, the Moranbah South development project, the Capcoal complex, the Roper Creek mine and the Dawson complex (comprising the Dawson Main/Central operating mine, the Dawson South operating mine, the Dawson South Exploration project and the Theodore South exploration project, collectively, the Dawson Assets). The Company has agreed to, following the prospective closing of the Anglo acquisition, sell the Dawson Assets to BUMA.
The Purchase Agreements required Peabody to acquire the balance, or a portion thereof, of the remaining interest in the Moranbah North and Grosvenor mines upon receipt of a tag-along notice from any joint venture participant (the Tag-Along Notice). On January 15, 2025, Peabody received a Tag-Along Notice pursuant to which Peabody acquired an additional 0.5 % interest in the Moranbah North and Grosvenor mines for consideration of up to approximately $ 13 million.
The Purchase Agreements, as adjusted for the receipt of the Tag-Along Notice, contemplate an upfront cash payment of $ 2.058 billion, including a deposit of $ 75.0 million paid to Anglo upon execution of the Purchase Agreements, and fixed deferred cash payments totaling $ 726.0 million that will be payable in annual installments over a four-year period commencing on the first anniversary of the closing date of the acquisition, and additional contingent cash payments capped at $ 1.004 billion, comprised of (a) royalty payments contingent on the price of coal exceeding agreed-upon thresholds for each of the five years following the closing date of the acquisition and (b) payments contingent on the potential restart of the Grosvenor mine. The total consideration for the acquisition would be up to approximately $ 3.788 billion if the maximum amounts under the contingencies described above become payable.
On May 5, 2025, Peabody announced that it had notified Anglo and BUMA of a Material Adverse Change (MAC) impacting Peabody’s planned acquisition, due to issues involving the Moranbah North Mine, which remains inactive following what was described as a gas ignition event on March 31, 2025. As of July 31, 2025, no credible timetable has been given regarding resumption of sustainable longwall production. Peabody’s understanding of the conditions underground, along with the continued passage of time, has further confirmed that a MAC has occurred under the Purchase Agreements. Peabody has not reached a revised agreement with the seller and intends to provide a further update after the 90-day MAC cure period has expired.
Wards Well Acquisition
On April 16, 2024, the Company acquired the southern part of the Wards Well tenements (Wards Well) which are adjacent to the Company’s Centurion Mine in Queensland, Australia. The acquisition was accounted for as an asset acquisition. 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.
The agreement also included 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.
Shoal Creek
On March 29, 2023, the Company’s Shoal Creek Mine experienced a fire. 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.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 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 a provision for loss, the Company classified the amount within the “Cash Flows From Investing Activities” section of the unaudited condensed consolidated statements of cash flows.
(12) Earnings per Share (EPS)
Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding. As such, the Company includes the 2028 Convertible Notes and share-based compensation awards in its potentially dilutive securities. Generally, dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive.
For all but performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method. Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation. For performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted.
A conversion of the 2028 Convertible Notes may result in payment in the Company’s common stock. For diluted EPS purposes, the potentially dilutive common stock is assumed to have been converted at the beginning of the period (or at the time of issuance, if later). In periods where the potentially dilutive common stock is included in the computation of diluted EPS, the numerator will be adjusted to add back tax adjusted interest expense, which includes the amortization of debt issuance costs, related to the convertible debt. The computation of diluted EPS excluded 16.6 million and 16.5 million shares related to the 2028 Convertible Notes for the three and six months ended June 30, 2025, respectively, because their inclusion would have been anti-dilutive for those periods.
The computation of diluted EPS also excluded aggregate share-based compensation awards of 1.1 million and less than 0.1 million for the three months ended June 30, 2025 and 2024, respectively, and 0.3 million and less than 0.1 million for the six months ended June 30, 2025 and 2024, respectively, because to do so would have been anti-dilutive for those periods. Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company’s average stock price during the applicable period. Anti-dilution also occurs when a company reports a net loss from continuing operations, and the dilutive impact of all share-based compensation awards are excluded accordingly.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS.
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(In millions, except per share data)
Basic EPS numerator:
(Loss) income from continuing operations, net of income taxes $ ( 25.6 ) $ 210.8 $ 12.7 $ 256.5
Less: Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2
(Loss) income from continuing operations attributable to common stockholders ( 27.2 ) 201.0 7.5 241.3
Loss from discontinued operations, net of income taxes ( 0.4 ) ( 1.6 ) ( 0.7 ) ( 2.3 )
Net (loss) income attributable to common stockholders $ ( 27.6 ) $ 199.4 $ 6.8 $ 239.0
Diluted EPS numerator:
(Loss) income from continuing operations, net of income taxes $ ( 25.6 ) $ 210.8 $ 12.7 $ 256.5
Add: Tax adjusted interest expense related to 2028 Convertible Notes — 3.0 — 6.1
Less: Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2
(Loss) income from continuing operations attributable to common stockholders ( 27.2 ) 204.0 7.5 247.4
Loss from discontinued operations, net of income taxes ( 0.4 ) ( 1.6 ) ( 0.7 ) ( 2.3 )
Net (loss) income attributable to common stockholders $ ( 27.6 ) $ 202.4 $ 6.8 $ 245.1
EPS denominator:
Weighted average shares outstanding — basic
121.7 126.0 121.7 127.0
Dilutive impact of share-based compensation awards — 0.5 0.6 0.5
Dilutive impact of 2028 Convertible Notes — 16.3 — 16.3
Weighted average shares outstanding — diluted 121.7 142.8 122.3 143.8
Basic EPS attributable to common stockholders:
(Loss) income from continuing operations $ ( 0.22 ) $ 1.59 $ 0.06 $ 1.90
Loss from discontinued operations ( 0.01 ) ( 0.01 ) — ( 0.02 )
Net (loss) income attributable to common stockholders $ ( 0.23 ) $ 1.58 $ 0.06 $ 1.88
Diluted EPS attributable to common stockholders:
(Loss) income from continuing operations $ ( 0.22 ) $ 1.43 $ 0.06 $ 1.72
Loss from discontinued operations ( 0.01 ) ( 0.01 ) — ( 0.02 )
Net (loss) income attributable to common stockholders $ ( 0.23 ) $ 1.42 $ 0.06 $ 1.70
(13) Financial Instruments and Other Guarantees
In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-she et risk and are not reflected in the accompanying condensed consolidated balance sheets. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance-sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying condensed consolidated balance sheets.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes the Company’s financial instruments that carry off-balance-sheet risk.
June 30, 2025
Reclamation Support Other Support (1)
Total
(Dollars in millions)
Surety bonds $ 925.8 $ 88.2 $ 1,014.0
Letters of credit (2)
55.2 52.7 107.9
981.0 140.9 1,121.9
Less: Letters of credit in support of surety bonds (3)
( 55.2 ) ( 0.1 ) ( 55.3 )
Obligations supported, net $ 925.8 $ 140.8 $ 1,066.6
(1) Instruments support obligations related to leases, health care plans, workers’ compensation, property and casualty insurance, customer and vendor contracts and certain restoration ancillary to prior mining activities.
(2) Amounts do not include cash-collateralized letters of credit.
(3) Certain letters of credit serve as collateral for surety bonds at the request of surety bond providers.
Surety Agreement Amendment and Collateral Requirements
In April 2023, the Company amended its existing agreement with the providers of its surety bond portfolio, dated November 6, 2020. Under the April 2023 amendment, the Company and its surety providers agreed to a maximum aggregate collateral amount based upon bonding levels which will vary prospectively as bonding levels increase or decrease. The amendment also extended the agreement through December 31, 2026. 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 $ 494.4 million at June 30, 2025. 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. For purposes of calculating the ratio, only 50 % of the outstanding principal amount of the Company’s 2028 Convertible Notes is deemed to be funded debt. 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, 2025.
At June 30, 2025, the Company’s maximum aggregate collateral amount was $ 519.6 million , which was comprised of $ 392.7 million in trust accounts and letters of credit of $ 126.9 million held for the benefit of certain surety providers.
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 securitization program authorized under the agreement (Securitization Program) is subject to customary events of default. The Securitization Program provides up to $ 225.0 million of funding capacity which 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. The accounts receivable securitization program was amended in January 2025 to extend its maturity to January 2028. During the six months ended June 30, 2025, the Company capitalized $ 1.7 million of debt issuance costs related to the amendment.
Borrowings under the Securitization Program bear interest at SOFR plus 2.1 % per annum and remain outstanding throughout the term of the agreement, subject to the Company maintaining sufficient eligible receivables.
At June 30, 2025, the Company had no outstanding borrowings and $ 58.6 million of letters of credit outstanding under the Securitization Program. Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $ 102.3 million at June 30, 2025. The Company was not required to post cash collateral under the Securitization Program at June 30, 2025.
The Company incurred interest and fees associated with the Securitization Program of $ 0.6 million during both the three months ended June 30, 2025 and 2024, and $ 1.2 million and $ 1.4 million during the six months ended June 30, 2025 and 2024, respectively, which have been recorded as “Interest expense, net of capitalized interest” in the accompanying unaudited condensed consolidated statements of operations.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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. 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 June 30, 2025, letters of credit of $ 115.6 million were outstanding under the agreement, which were collateralized by cash of $ 119.1 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, 2025, the bank guarantee facilities were backed by cash of $ 202.4 million.
Restricted Cash and Collateral
The following table summarizes the Company’s “Restricted cash and collateral” in the accompanying condensed consolidated balance sheets. Restricted cash balances are held in controlled accounts with minimum balance requirements; withdrawals are subject to the approval of account beneficiaries, such as the Company’s surety providers, who have perfected security interests in the funds. 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. Portions of the restricted cash balances and deposits are held in accounts denominated in Australian dollars.
June 30, 2025 December 31, 2024
(Dollars in millions)
Restricted cash (1)
Surety trust accounts (2)
$ 392.7 $ 394.6
Credit support facilities (2) (3)
321.5 287.6
714.2 682.2
Other cash collateral (1)
Deposits with regulatory authorities for reclamation and other obligations (3)
132.9 127.6
Restricted cash and collateral $ 847.1 $ 809.8
(1) Restricted cash balances are combined with unrestricted cash and cash equivalents in the accompanying unaudited condensed consolidated statements of cash flows; changes between unrestricted cash and cash equivalents and restricted cash balances are thus not reflected in the operating, investing or financing activities therein. Changes in other cash collateral balances are reflected as operating activities therein.
(2) Surety trust accounts, the funding for collateralized letters of credit and cash supporting the bank guarantee facilities are comprised of highly liquid investments with original maturities of three months or less; interest and other earnings on such funds accrue to the Company.
(3) At June 30, 2025, the Australian dollar denominated balances supporting the bank guarantee facilities and the deposits with regulatory authorities were $ 309 million and $ 203 million, respectively. At December 31, 2024, the Australian dollar denominated balances supporting the bank guarantee facilities and the deposits with regulatory authorities were $ 271 million and $ 205 million, respectively.
(14) Commitments and Contingencies
Commitments
Unconditional Purchase Obligations
As of June 30, 2025, purchase commitments for capital expenditures were $ 66.8 million, all of which is obligated within the next 12 months.
There were no other material changes to the Company’s commitments from the information provided in Note 21. “Commitments and Contingencies” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contingencies
From time to time, the Company or its subsidiaries are involved in legal proceedings arising in the ordinary course of business or related to indemnities or historical operations. The Company believes it has recorded adequate reserves for these liabilities. The Company discusses its significant legal proceedings below, including ongoing proceedings and those that impacted the Company’s consolidated results of operations for the periods presented.
Litigation and Matters Relating to Continuing Operations
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. Based on current information, the Company believes that such other pending or threatened proceedings are likely to be resolved without a material adverse effect on its consolidated financial condition, results of operations or cash flows. The Company reassesses the probability and the ability to estimate contingent losses as new information becomes available.
(15) Segment Information
The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal and Corporate and Other.
The Company’s chief operating decision maker (CODM), defined as the President and Chief Executive Officer, uses Adjusted EBITDA as the primary financial metric to measure each segment’s operating performance against expected results and to allocate resources, including capital investment in mining operations and potential expansions. Adjusted EBITDA is a non-GAAP financial measure defined as (loss) income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance, as displayed in the reconciliations below. Management believes this non-GAAP measure is used by investors to measure the Company’s operating performance. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.
Segment results were as follows:
Three Months Ended June 30, 2025
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate
and Other Consolidated
(Dollars in millions)
Revenue $ 195.1 $ 252.2 $ 275.7 $ 155.1 $ 12.0 $ 890.1
Less Significant Segment Expenses:
Labor costs 37.7 61.3 52.9 48.9
Repair costs 29.0 41.4 32.6 39.6
Outside services 26.9 85.8 28.8 37.6
Commodities expense 19.9 12.6 35.8 17.7
Sales related costs 44.8 58.7 73.9 9.4
Other expenses (1)
3.3 1.6 8.7 ( 11.6 )
Adjusted EBITDA 33.5 ( 9.2 ) 43.0 13.5 12.5 93.3
Additions to property, plant, equipment and mine development 9.6 72.9 5.5 5.4 0.8 94.2
Loss from equity affiliates — — — — 0.9 0.9
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Three Months Ended June 30, 2024
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate
and Other Consolidated
(Dollars in millions)
Revenue $ 307.5 $ 294.3 $ 221.9 $ 202.0 $ 16.3 $ 1,042.0
Less Significant Segment Expenses:
Labor costs 41.4 52.4 49.5 55.1
Repair costs 36.0 43.5 26.1 35.8
Outside services 31.3 54.7 26.0 36.4
Commodities expense 22.5 15.9 34.4 19.8
Sales related costs 52.6 62.0 60.3 12.1
Other expenses (1)
19.3 ( 77.8 ) 7.8 7.4
Adjusted EBITDA 104.4 143.6 17.8 35.4 8.5 309.7
Additions to property, plant, equipment and mine development 18.2 75.8 7.5 2.8 1.3 105.6
Loss from equity affiliates — — — — 1.3 1.3
Six Months Ended June 30, 2025
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate
and Other Consolidated
(Dollars in millions)
Revenue $ 460.2 $ 472.3 $ 551.3 $ 323.8 $ 19.5 $ 1,827.1
Less Significant Segment Expenses:
Labor costs 72.8 116.3 102.7 99.1
Repair costs 53.8 88.4 64.1 73.7
Outside services 53.7 157.9 59.9 73.4
Commodities expense 39.0 26.0 74.5 37.2
Sales related costs 99.4 112.7 149.2 19.4
Other expenses (1)
23.8 ( 33.0 ) 21.6 ( 25.4 )
Adjusted EBITDA 117.7 4.0 79.3 46.4 ( 10.1 ) 237.3
Additions to property, plant, equipment and mine development 18.1 126.1 9.4 10.0 1.0 164.6
Loss from equity affiliates — — — — 7.6 7.6
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Six Months Ended June 30, 2024
Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal Corporate
and Other Consolidated
(Dollars in millions)
Revenue $ 591.4 $ 541.3 $ 476.0 $ 393.6 $ 23.3 $ 2,025.6
Less Significant Segment Expenses:
Labor costs 79.1 101.7 101.3 108.0
Repair costs 73.9 76.2 61.0 68.2
Outside services 62.3 109.3 57.9 73.0
Commodities expense 46.4 31.6 75.5 39.1
Sales related costs 104.7 114.0 130.1 25.7
Other expenses (1)
26.8 ( 83.4 ) 16.0 ( 2.3 )
Adjusted EBITDA 198.2 191.9 34.2 81.9 ( 36.0 ) 470.2
Additions to property, plant, equipment and mine development 32.7 115.2 12.5 5.1 1.5 167.0
Loss from equity affiliates — — — — 5.0 5.0
(1) Other expenses for the mining operations primarily include lease expense; non-sales related taxes; insurance expense; joint facility charges; and credits related to the capitalization of costs to the balance sheet. For the three and six months ended June 30, 2024, the Seaborne Metallurgical segment includes $ 80.8 million related to the portion of the Shoal Creek insurance recovery that was applicable to incremental costs and business interruption recoveries.
Total assets are reflected at the division level only for the Company’s operating segments and are not allocated between each individual segment as such information is not regularly reviewed by the Company’s CODM. Further, some assets service more than one segment within the division and an allocation of such assets would not be meaningful or representative on a segment by segment basis. Assets related to closed, suspended or otherwise inactive mines are included within the Corporate and Other category.
The following table presents total assets at the division level:
June 30, 2025 December 31, 2024
(Dollars in millions)
Seaborne $ 2,455.2 $ 2,465.3
U.S. Thermal 1,309.3 1,346.9
Corporate and Other 1,998.9 2,141.5
Total assets $ 5,763.4 $ 5,953.7
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PEABODY ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A reconciliation of consolidated (loss) income from continuing operations before income taxes to Adjusted EBITDA follows:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(Dollars in millions)
(Loss) income from continuing operations before incomes taxes $ ( 28.3 ) $ 250.2 $ 14.9 $ 316.0
Depreciation, depletion and amortization 93.4 82.9 185.5 162.7
Asset retirement obligation expenses 13.8 12.9 27.4 25.8
Restructuring charges 3.5 0.1 5.2 0.2
Transaction costs related to business combinations 18.8 — 21.2 —
Provision for NARM loss — 1.9 — 3.7
Shoal Creek insurance recovery - property damage — ( 28.7 ) — ( 28.7 )
Changes in amortization of basis difference related to equity affiliates ( 0.8 ) ( 0.3 ) ( 1.4 ) ( 0.7 )
Interest expense, net of capitalized interest 11.1 10.7 22.6 25.4
Interest income ( 13.8 ) ( 16.8 ) ( 29.2 ) ( 36.0 )
Unrealized (gains) losses on foreign currency option contracts ( 4.1 ) ( 2.4 ) ( 8.4 ) 3.3
Take-or-pay contract-based intangible recognition ( 0.3 ) ( 0.8 ) ( 0.5 ) ( 1.5 )
Total Adjusted EBITDA $ 93.3 $ 309.7 $ 237.3 $ 470.2
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.