PEABODY ENERGY CORP 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. As used in this report, the terms “Peabody” or “the Company” refer to Peabody Energy Corporation or its applicable subsidiary or subsidiaries. Unless otherwise noted herein, disclosures in this Quarterly Report on Form 10-Q relate only to the Company’s continuing operations. When used in this filing, the term “ton” refers to short or net tons, equal to 2,000 pounds (907.18 kilograms), while “tonne” refers to metric tons, equal to 2,204.62 pounds (1,000 kilograms). Cautionary Notice Regarding Forward-Looking Statements This report includes statements of the Company’s expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and are intended to come within the safe harbor protection provided by those sections. These statements relate to future events or the Company’s future financial performance. The Company uses words such as “anticipate,” “believe,” “expect,” “intend,” “may,” “forecast,” “project,” “should,” “estimate,” “goal,” “plan,” “outlook,” “target,” “likely,” “could,” “will,” “would,” “to be” or other similar words to identify forward-looking statements. Without limiting the foregoing, all statements relating to the Company’s future operating results, anticipated capital expenditures, future cash flows and borrowings, and sources of funding are forward-looking statements and speak only as of the date of this report. These forward-looking statements are based on numerous assumptions and expectations that the Company believes in good faith to be reasonable, but are subject to a wide range of uncertainties and business risks, and actual results may differ materially from those discussed in these statements. These factors are difficult to accurately predict and may be beyond the Company’s control. 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, Item 1A. “Risk Factors” of Part II of its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 filed with the SEC on May 8, 2025 and Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of Part I of its Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 20, 2025. These forward-looking statements speak only as of the date on which such statements were made, and the Company undertakes no obligation to update these statements except as required by federal securities laws. Non-GAAP Financial Measures The following discussion of Peabody’s results of operations includes references to and analysis of Adjusted EBITDA and Total Segment Costs, which are financial measures not recognized in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Adjusted EBITDA is used by the chief operating decision maker, defined as Peabody’s President and Chief Executive Officer, 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. Total Segment Costs is also used by management as a component of a metric to measure each segment’s operating performance. Also included in the following discussion of Peabody’s results of operations are references to Revenue per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton for each reporting segment. These metrics are used by management to measure each reporting segment’s operating performance. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the reporting segment level. The Company considers all measures reported on a per ton basis to be operating/statistical measures; however, the Company includes reconciliations of the related non-GAAP financial measures (Adjusted EBITDA and Total Segment Costs) in the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2. Peabody believes non-GAAP measures are used by investors to measure its operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Refer to the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2 for definitions and reconciliations to the most comparable measures under U.S. GAAP. 27 Table of Contents Overview Peabody is a leading producer of metallurgical and thermal coal. In 2024, Peabody produced and sold 118.1 million and 118.0 million tons of coal, respectively, from continuing operations. At June 30, 2025, 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. 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. Refer to Note 15. “Segment Information” to the accompanying unaudited condensed consolidated financial statements for further information regarding those segments and the components of the Company’s Corporate and Other segment. Pricing during the three months ended June 30, 2025 is set forth in the table below. High Low Average June 30, 2025 August 1, 2025 Premium low-vol hard coking coal (Premium HCC) (1) $ 195.80 $ 169.00 $ 184.22 $ 173.50 $ 183.20 Premium low-vol pulverized coal injection (Premium PCI) coal (1) 141.00 129.00 137.77 137.75 145.60 Newcastle index thermal coal (1) 109.41 91.69 100.49 107.60 113.85 API 5 index thermal coal (1) 71.03 65.72 68.28 66.00 67.49 PRB 8,800 Btu/Lb coal (2) 14.20 14.00 14.10 14.00 14.00 Illinois Basin 11,500 Btu/Lb coal (2) 48.25 45.00 46.52 48.25 48.50 (1) Spot pricing expressed per metric tonne. (2) Prompt month pricing expressed per short ton. The seaborne pricing included in the table above is not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2025 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 above is also not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2025 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. may vary significantly in many respects, including price adjustment features, price reopener terms, coal quality requirements, quantity parameters, permitted sources of supply, treatment of environmental constraints, extension options, force majeure and termination and assignment provisions. Competition from alternative fuels such as natural gas and other fuel sources may also impact the Company’s realized pricing. Within the global coal industry, supply and demand for its products and the supplies used for mining are being impacted by recent changes to trade policy, including tariff and customs regulations. As future developments related to trade policy, including additional or retaliatory tariffs, delays in implementing previously announced changes or ongoing negotiations between countries, are unknown, the global coal industry data for the six months ended June 30, 2025 presented herein may not be indicative of their ultimate impacts. Within the seaborne metallurgical coal market, several unplanned outages at non-Peabody mines and wet weather created a spot supply shortage of key grades during the early part of the quarter, with the market trading higher as a result. However, metallurgical coal spot demand slowed toward the end of the quarter, resulting in softened prices. Volatility in global trade policies continued to weigh on steel exports in some Asian markets, while the early onset of monsoonal weather affected coal procurement in India. In China, steel production was adversely impacted by continued softness in the property sector, which saw a decline in floor space under construction in April and May. As a result, lower metallurgical coal import demand in China created a redistribution of coal originally bound for China to other destinations, placing further pressure on metallurgical coal index prices. Emerging evidence of supply curtailment in some regions points to prices intersecting the global cost curve. Looking forward, the seaborne metallurgical coal price may remain volatile based on the pace of growth of the Indian steel industry, changing global trade policies and global supply curtailment actions. 28 Table of Contents Within the seaborne thermal coal market, global thermal coal prices continued to soften during the six months ended June 30, 2025, driven by weakening demand conditions and oversupply as seen by higher stockpiles in Asian markets. In China, overall total electricity demand has increased slightly year-over-year through June 30, 2025, however the share of renewables in the generation mix continues to grow, pressuring coal generation. In addition, domestic coal production has been stronger year-over-year, all of which has led to an increase in coal stockpiles in China and weaker coal import demand through the six months ended June 30, 2025. In India, elevated domestic coal production, lower import demand and declining coal generation has led to elevated coal stockpiles. Looking ahead, global thermal coal markets should continue to remain under pressure as elevated stockpiles limit import demand over the next few months. In addition, volatile global natural gas markets can impact global thermal coal markets. In the U.S., overall electricity demand increased over 2% year-over-year. Through the six months ended June 30, 2025, electricity generation from thermal coal has increased year-over-year, driven by higher natural gas prices and stronger total generation. Coal’s share of electricity generation has increased to approximately 16% for the six months ended June 30, 2025, while wind and solar’s combined generation share is at 20% and the share of natural gas generation has declined to approximately 38%. U.S. coal inventories have declined through June 30, 2025, resulting in stockpiles declining almost 8 million tons below levels seen at the end of 2024. Centurion Mine Peabody’s development of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, continues to advance as planned, making progress toward full-scale longwall production in February 2026. With over half of the planned headcount hired to-date, the Company intends to start installing longwall shields in the fourth quarter of 2025. Labor Relations Formal negotiations for a new labor agreement at the Metropolitan Mine have now been concluded with an in-principle agreement between the Company, the Mining and Energy Union and employees. After recent industrial action, employees returned to work on August 1, 2025. Employees will officially vote on the new labor agreement with the voting process opening on August 10, 2025 and concluding on August 13, 2025. Planned Acquisition On November 25, 2024, Peabody entered into definitive agreements (the Purchase Agreements) with Anglo American plc (Anglo), to acquire 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 Pt Bukit Makmur Mandiri Utama or one of its subsidiaries (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. Peabody has secured a bridge facility commitment to finance the acquisition. The Company intends to replace the bridge facility with permanent financing, including debt capacity, additional investment by existing joint venture partners and other financing to supplement as warranted. 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. See Note 9. “Long-term Debt” and Note 11. “Other Events” for further information. 29 Table of Contents Results of Operations Three and Six Months Ended June 30, 2025 Compared to the Three and Six Months Ended June 30, 2024 Summary The decrease in results from continuing operations, net of income taxes for the three and six months ended June 30, 2025 compared to the same periods in the prior year ($236.4 million and $243.8 million, respectively) was driven by lower revenue primarily due to lower seaborne coal pricing ($151.9 million and $198.5 million, respectively) and the prior year insurance recovery at the Shoal Creek Mine ($109.5 million, three and six months). This unfavorable variance was partially offset by lower year-over-year income taxes ($42.1 million and $57.3 million, respectively) and lower operating costs and expenses ($14.5 million and $58.5 million, respectively). Adjusted EBITDA for the three and six months ended June 30, 2025 reflected a year-over-year decrease of $216.4 million and $232.9 million, respectively. Tons Sold The following table presents tons sold by operating segment: Three Months Ended June 30, (Decrease) Increase to Volumes Six Months Ended June 30, (Decrease) Increase to Volumes 2025 2024 Tons % 2025 2024 Tons % (Tons in millions) (Tons in millions) Seaborne Thermal 3.6 4.1 (0.5) (12) % 8.0 8.1 (0.1) (1) % Seaborne Metallurgical 2.2 2.0 0.2 10 % 4.0 3.4 0.6 18 % Powder River Basin 20.0 15.8 4.2 27 % 39.6 34.5 5.1 15 % Other U.S. Thermal 2.9 3.7 (0.8) (22) % 6.0 6.9 (0.9) (13) % Total tons sold from operating segments 28.7 25.6 3.1 12 % 57.6 52.9 4.7 9 % Corporate and Other — — — n.m. — 0.1 (0.1) (100) % Total tons sold 28.7 25.6 3.1 12 % 57.6 53.0 4.6 9 % 30 Table of Contents Supplemental Financial Data The following table presents supplemental financial data by operating segment: Three Months Ended June 30, (Decrease) Increase Six Months Ended June 30, (Decrease) Increase 2025 2024 $ % 2025 2024 $ % Revenue per Ton (1) Seaborne Thermal $ 53.22 $ 74.43 $ (21.21) (28) % $ 57.25 $ 72.86 $ (15.61) (21) % Seaborne Metallurgical 114.79 149.29 (34.50) (23) % 119.40 159.10 (39.70) (25) % Powder River Basin 13.82 14.02 (0.20) (1) % 13.92 13.80 0.12 1 % Other U.S. Thermal 54.08 55.21 (1.13) (2) % 54.20 57.33 (3.13) (5) % Costs per Ton (1)(2) Seaborne Thermal $ 44.10 $ 49.14 $ (5.04) (10) % $ 42.61 $ 48.44 $ (5.83) (12) % Seaborne Metallurgical 118.97 117.47 1.50 1 % 118.39 126.46 (8.07) (6) % Powder River Basin 11.66 12.89 (1.23) (10) % 11.92 12.81 (0.89) (7) % Other U.S. Thermal 49.39 45.53 3.86 8 % 46.43 45.40 1.03 2 % Adjusted EBITDA Margin per Ton (1)(2) Seaborne Thermal $ 9.12 $ 25.29 $ (16.17) (64) % $ 14.64 $ 24.42 $ (9.78) (40) % Seaborne Metallurgical (4.18) 31.82 (36.00) (113) % 1.01 32.64 (31.63) (97) % Powder River Basin 2.16 1.13 1.03 91 % 2.00 0.99 1.01 102 % Other U.S. Thermal 4.69 9.68 (4.99) (52) % 7.77 11.93 (4.16) (35) % (1) This is an operating/statistical measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP. (2) Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring charges; asset impairment; amortization of take-or-pay contract-based intangibles; insurance recoveries; and certain other costs related to post-mining activities. Revenue The following table presents revenue by reporting segment: Three Months Ended June 30, (Decrease) Increase to Revenue Six Months Ended June 30, (Decrease) Increase to Revenue 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Seaborne Thermal $ 195.1 $ 307.5 $ (112.4) (37) % $ 460.2 $ 591.4 $ (131.2) (22) % Seaborne Metallurgical 252.2 294.3 (42.1) (14) % 472.3 541.3 (69.0) (13) % Powder River Basin 275.7 221.9 53.8 24 % 551.3 476.0 75.3 16 % Other U.S. Thermal 155.1 202.0 (46.9) (23) % 323.8 393.6 (69.8) (18) % Corporate and Other 12.0 16.3 (4.3) (26) % 19.5 23.3 (3.8) (16) % Revenue $ 890.1 $ 1,042.0 $ (151.9) (15) % $ 1,827.1 $ 2,025.6 $ (198.5) (10) % Seaborne Thermal. Segment revenue decreased during the three months ended June 30, 2025 compared to the same period in the prior year due to unfavorable realized prices ($69.5 million) and unfavorable export volume ($42.9 million). Segment revenue decreased during the six months ended June 30, 2025 compared to the same period in the prior year due to unfavorable realized prices ($146.9 million), offset by favorable mix variances ($15.7 million). Seaborne Metallurgical. Segment revenue decreased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to unfavorable realized prices ($80.4 million and $155.5 million, respectively), offset by favorable volume ($38.3 million and $86.5 million, respectively). 31 Table of Contents Powder River Basin. Segment revenue increased during the three months ended June 30, 2025 compared to the same period in the prior year due to favorable volume ($56.1 million) driven by increased demand. The increase was offset by unfavorable realized prices ($2.3 million) which reflected the impact of quality adjustments for moisture due to wet weather in the current year. Segment revenue increased during the six months ended June 30, 2025 compared to the same period in the prior year due to favorable volume ($73.9 million) resulting from increased demand and favorable realized prices ($1.4 million). Other U.S. Thermal. Segment revenue decreased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to unfavorable volume ($39.6 million and $43.1 million, respectively) resulting from decreased demand and rail performance issues in the Midwest and challenging geological issues at the Twentymile Mine, unfavorable realized prices ($5.6 million and $11.5 million, respectively) and decreased revenue from sales contract cancellation settlements ($1.7 million and $15.2 million, respectively). Corporate and Other. The decrease in segment revenue during the three and six months ended June 30, 2025 compared to the same periods in the prior year was driven by lower results from trading activities. Segment Costs The following table presents costs by reporting segment: Three Months Ended June 30, (Decrease) Increase to Total Segment Costs Six Months Ended June 30, (Decrease) Increase to Total Segment Costs 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Seaborne Thermal $ 161.6 $ 203.1 $ (41.5) (20) % $ 342.5 $ 393.2 $ (50.7) (13) % Seaborne Metallurgical 261.4 231.5 29.9 13 % 468.3 430.2 38.1 9 % Powder River Basin 232.7 204.1 28.6 14 % 472.0 441.8 30.2 7 % Other U.S. Thermal 141.6 166.6 (25.0) (15) % 277.4 311.7 (34.3) (11) % Corporate and Other (10.9) (8.4) (2.5) (30) % (6.5) 19.1 (25.6) (134) % Total Segment Costs (1) $ 786.4 $ 796.9 $ (10.5) (1) % $ 1,553.7 $ 1,596.0 $ (42.3) (3) % (1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP. Seaborne Thermal. Segment Costs decreased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to lower costs for labor, repairs and outside services resulting from timing of maintenance and operational improvements ($15.1 million and $35.0 million, respectively), lower sales related costs driven by both lower realized prices and volume ($7.8 million and $5.3 million, respectively), lower variable expense (three months, $6.7 million) resulting from lower volume (three months, 0.5 million tons) and favorable commodity pricing ($2.6 million and $7.4 million, respectively). Seaborne Metallurgical. Segment Costs increased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to higher variable operational and sales related costs driven by increased volumes (0.2 million tons and 0.6 million tons, respectively) and development of the Centurion Mine. Powder River Basin. Segment Costs increased during the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to higher sales related costs ($13.6 million and $19.1 million, respectively) driven by favorable volume (4.2 million tons and 5.1 million tons, respectively) and higher costs for repairs and outside services ($9.3 million and $5.1 million, respectively) due in part to unplanned dragline outages and haul truck repairs. Other U.S. Thermal. The decrease in Segment Costs during the three and six months ended June 30, 2025 compared to the same periods in the prior year was driven by lower volume (0.8 million tons and 0.9 million tons, respectively) and lower costs for labor ($6.2 million and $8.9 million, respectively). Corporate and Other. Segment Costs decreased during the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral. 32 Table of Contents 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) Increase to Segment Adjusted EBITDA 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Seaborne Thermal $ 33.5 $ 104.4 $ (70.9) (68) % $ 117.7 $ 198.2 $ (80.5) (41) % Seaborne Metallurgical (9.2) 143.6 (152.8) (106) % 4.0 191.9 (187.9) (98) % Powder River Basin 43.0 17.8 25.2 142 % 79.3 34.2 45.1 132 % Other U.S. Thermal 13.5 35.4 (21.9) (62) % 46.4 81.9 (35.5) (43) % Corporate and Other 12.5 8.5 4.0 47 % (10.1) (36.0) 25.9 72 % Adjusted EBITDA (1) $ 93.3 $ 309.7 $ (216.4) (70) % $ 237.3 $ 470.2 $ (232.9) (50) % (1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP. Seaborne Thermal. Segment Adjusted EBITDA decreased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to lower realized prices net of sales price sensitive costs ($67.3 million and $143.3 million, respectively) and unfavorable volume (three months, $23.9 million), offset by favorable operational costs ($11.0 million and $43.9 million, respectively) driven by timing of maintenance and operational improvements. Seaborne Metallurgical. Segment Adjusted EBITDA decreased during the three months ended June 30, 2025 compared to the same period in the prior year due to the prior year Shoal Creek insurance recovery ($80.8 million), lower realized prices net of sales price sensitive costs ($59.3 million) and unfavorable volumes at the Australian operations ($16.0 million). Segment Adjusted EBITDA decreased during the six months ended June 30, 2025 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($122.5 million) and the prior year Shoal Creek insurance recovery ($80.8 million), offset by favorable operational costs ($11.6 million) driven by favorable volumes. Powder River Basin. Segment Adjusted EBITDA increased during the three and six months ended June 30, 2025 compared to the same periods in the prior year due to favorable volume ($30.0 million and $37.8 million, respectively) and decreased overburden removal costs ($6.6 million and $12.0 million, respectively), offset by higher costs for materials, services, repairs and labor ($12.6 million and $8.6 million, respectively). Other U.S. Thermal. Segment Adjusted EBITDA decreased during the three months ended June 30, 2025 compared to the same period in the prior year primarily due to higher costs for materials, services and repairs ($10.5 million), unfavorable volume ($7.8 million) and lower realized prices net of sales price sensitive costs ($5.4 million). Segment Adjusted EBITDA decreased during the six months ended June 30, 2025 compared to the same period in the prior year due to decreased sales contract cancellation settlements ($15.2 million), higher costs for materials, services and repairs ($11.2 million), unfavorable volume ($10.2 million) and lower realized prices net of sales price sensitive costs ($8.9 million). 33 Table of Contents 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 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Middlemount (1) $ (1.3) $ 1.9 $ (3.2) (168) % $ (8.2) $ 1.1 $ (9.3) (845) % Resource management activities (2) 17.3 9.9 7.4 75 % 22.8 14.3 8.5 59 % Selling and administrative expenses (23.5) (22.1) (1.4) (6) % (47.1) (44.1) (3.0) (7) % Other items, net (3) 20.0 18.8 1.2 6 % 22.4 (7.3) 29.7 407 % Corporate and Other Adjusted EBITDA $ 12.5 $ 8.5 $ 4.0 47 % $ (10.1) $ (36.0) $ 25.9 72 % (1) Middlemount’s results are before the impact of related changes in amortization of basis difference. (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, results from the Company’s equity method investment in renewable energy joint ventures, costs associated with suspended operations, holding costs associated with 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 and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($8.3 million and $28.4 million, respectively), higher gains on equipment and land sales ($7.2 million and $10.4 million, respectively) and favorable results from the Company’s equity method investment in renewable energy joint ventures ($5.8 million and $8.3 million, respectively). These favorable variances were offset by unfavorable trading results ($5.4 million and $1.9 million, respectively) and unfavorable variances in Middlemount’s results driven by lower sales pricing. 34 Table of Contents (Loss) Income From Continuing Operations, Net of Income Taxes The following table presents (loss) 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 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Adjusted EBITDA (1) $ 93.3 $ 309.7 $ (216.4) (70) % $ 237.3 $ 470.2 $ (232.9) (50) % Depreciation, depletion and amortization (93.4) (82.9) (10.5) (13) % (185.5) (162.7) (22.8) (14) % Asset retirement obligation expenses (13.8) (12.9) (0.9) (7) % (27.4) (25.8) (1.6) (6) % Restructuring charges (3.5) (0.1) (3.4) (3,400) % (5.2) (0.2) (5.0) (2,500) % Transaction costs related to business combinations (18.8) — (18.8) n.m. (21.2) — (21.2) n.m. Provision for NARM loss — (1.9) 1.9 100 % — (3.7) 3.7 100 % Shoal Creek insurance recovery - property damage — 28.7 (28.7) (100) % — 28.7 (28.7) (100) % Changes in amortization of basis difference related to equity affiliates 0.8 0.3 0.5 167 % 1.4 0.7 0.7 100 % Interest expense, net of capitalized interest (11.1) (10.7) (0.4) (4) % (22.6) (25.4) 2.8 11 % Interest income 13.8 16.8 (3.0) (18) % 29.2 36.0 (6.8) (19) % Unrealized gains (losses) on foreign currency option contracts 4.1 2.4 1.7 71 % 8.4 (3.3) 11.7 355 % Take-or-pay contract-based intangible recognition 0.3 0.8 (0.5) (63) % 0.5 1.5 (1.0) (67) % Income tax benefit (provision) 2.7 (39.4) 42.1 107 % (2.2) (59.5) 57.3 96 % (Loss) income from continuing operations, net of income taxes $ (25.6) $ 210.8 $ (236.4) (112) % $ 12.7 $ 256.5 $ (243.8) (95) % (1) This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP. Depreciation, Depletion and Amortization. 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 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) Seaborne Thermal $ (31.0) $ (28.7) $ (2.3) (8) % $ (64.4) $ (56.3) $ (8.1) (14) % Seaborne Metallurgical (30.4) (22.9) (7.5) (33) % (59.2) (44.7) (14.5) (32) % Powder River Basin (14.6) (12.8) (1.8) (14) % (27.4) (25.3) (2.1) (8) % Other U.S. Thermal (15.8) (16.6) 0.8 5 % (31.5) (30.6) (0.9) (3) % Corporate and Other (1.6) (1.9) 0.3 16 % (3.0) (5.8) 2.8 48 % Total $ (93.4) $ (82.9) $ (10.5) (13) % $ (185.5) $ (162.7) $ (22.8) (14) % 35 Table of Contents 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, 2025 2024 2025 2024 Seaborne Thermal $ 2.00 $ 2.08 $ 2.00 $ 2.09 Seaborne Metallurgical 3.23 2.47 3.00 2.60 Powder River Basin 0.32 0.35 0.32 0.36 Other U.S. Thermal 1.81 1.69 1.82 1.62 Depreciation, depletion and amortization expense increased during the three and six months ended June 30, 2025 compared to the same periods in the prior year primarily due to increased depreciation resulting from asset additions. 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 six months ended June 30, 2025 compared to the same periods in the prior year reflect the impact of volume and mix variances across the segments. Restructuring Charges. The increase in restructuring charges during the current year is due to the upcoming closure of the Wambo Underground Mine. Transaction Costs Related to Business Combinations. The charges recorded during the current year relate to the planned acquisition of multiple metallurgical coal mines from Anglo which was announced during the fourth quarter of 2024. In additional to typical costs, such as legal and professional fees, the charges for the three and six months ended June 30, 2025 include a $10.4 million duration fee on the bridge loan facility. Refer to Note 11. “Other Events” in the accompanying unaudited condensed consolidated financial statements for further information regarding the planned Anglo acquisition. Shoal Creek Insurance Recovery - Property Damage . During June 2024, the Company reached a settlement related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 11. “Other Events” in the accompanying unaudited condensed consolidated financial statements. Of this amount, Adjusted EBITDA excluded an allocated amount applicable to losses recognized at the time of the insurance recovery related to longwall development and equipment deemed inoperable within the affected area of the mine, 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, was included in Adjusted EBITDA for the three and six months ended June 30, 2024. Interest Income. The decrease in income during the three and six months ended June 30, 2025 compared to the same periods in the prior year was driven by lower average cash balances during the current period. Unrealized Gains (Losses) on Foreign Currency Option Contracts. Unrealized gains (losses) primarily relate to mark-to-market activity on foreign currency option contracts. For additional information, refer to Note 6. “Derivatives and Fair Value Measurements” to the accompanying unaudited condensed consolidated financial statements. Income Tax Benefit (Provision). The decrease in the income taxes during the three and six months ended June 30, 2025 compared to the same periods in the prior year was primarily due to lower expected pretax income. Refer to Note 8. “Income Taxes” to the accompanying unaudited condensed consolidated financial statements for additional information. 36 Table of Contents Net (Loss) Income Attributable to Common Stockholders The following table presents net (loss) income attributable to common stockholders: Three Months Ended June 30, (Decrease) Increase to Income Six Months Ended June 30, (Decrease) Increase to Income 2025 2024 $ % 2025 2024 $ % (Dollars in millions) (Dollars in millions) (Loss) income from continuing operations, net of income taxes $ (25.6) $ 210.8 $ (236.4) (112) % $ 12.7 $ 256.5 $ (243.8) (95) % Loss from discontinued operations, net of income taxes (0.4) (1.6) 1.2 75 % (0.7) (2.3) 1.6 70 % Net (loss) income (26.0) 209.2 (235.2) (112) % 12.0 254.2 (242.2) (95) % Less: Net income attributable to noncontrolling interests 1.6 9.8 (8.2) (84) % 5.2 15.2 (10.0) (66) % Net (loss) income attributable to common stockholders $ (27.6) $ 199.4 $ (227.0) (114) % $ 6.8 $ 239.0 $ (232.2) (97) % Net Income Attributable to Noncontrolling Interests. The decrease in net income attributable to noncontrolling interests during the three and six months ended June 30, 2025 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, Decrease to EPS Six Months Ended June 30, (Decrease) Increase to EPS 2025 2024 $ % 2025 2024 $ % Diluted EPS attributable to common stockholders: (Loss) income from continuing operations $ (0.22) $ 1.43 $ (1.65) (115) % $ 0.06 $ 1.72 $ (1.66) (97) % Loss from discontinued operations (0.01) (0.01) — — % — (0.02) 0.02 100 % Net (loss) income attributable to common stockholders $ (0.23) $ 1.42 $ (1.65) (116) % $ 0.06 $ 1.70 $ (1.64) (96) % 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 121.7 million and 142.8 million for the three months ended June 30, 2025 and 2024, respectively, and 122.3 million and 143.8 million for the six months ended June 30, 2025 and 2024, respectively. 37 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA is 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. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (Dollars in millions) (Loss) income from continuing operations, net of income taxes $ (25.6) $ 210.8 $ 12.7 $ 256.5 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) Income tax (benefit) provision (2.7) 39.4 2.2 59.5 Total Adjusted EBITDA $ 93.3 $ 309.7 $ 237.3 $ 470.2 Total 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, 2025 2024 2025 2024 (Dollars in millions) Operating costs and expenses $ 789.4 $ 803.9 $ 1,559.6 $ 1,618.1 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 Net periodic benefit credit, excluding service cost (7.4) (10.2) (14.8) (20.3) Total Segment Costs $ 786.4 $ 796.9 $ 1,553.7 $ 1,596.0 The following table presents Total Segment Costs by reporting segment: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (Dollars in millions) Seaborne Thermal $ 161.6 $ 203.1 $ 342.5 $ 393.2 Seaborne Metallurgical 261.4 231.5 468.3 430.2 Powder River Basin 232.7 204.1 472.0 441.8 Other U.S. Thermal 141.6 166.6 277.4 311.7 Corporate and Other (10.9) (8.4) (6.5) 19.1 Total Segment Costs $ 786.4 $ 796.9 $ 1,553.7 $ 1,596.0 38 Table of Contents Revenue per Ton and Adjusted EBITDA Margin per Ton are equal to revenue by segment and Adjusted EBITDA by segment (excluding insurance recoveries), respectively, divided by segment tons sold. Costs per Ton is equal to Revenue per Ton less Adjusted EBITDA Margin per Ton. The following tables present tons sold, revenue, Total Segment Costs and Adjusted EBITDA by operating segment: Three Months Ended June 30, 2025 Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal (Amounts in millions, except per ton data) Tons sold 3.6 2.2 20.0 2.9 Revenue $ 195.1 $ 252.2 $ 275.7 $ 155.1 Total Segment Costs 161.6 261.4 232.7 141.6 Adjusted EBITDA $ 33.5 $ (9.2) $ 43.0 $ 13.5 Revenue per Ton $ 53.22 $ 114.79 $ 13.82 $ 54.08 Costs per Ton 44.10 118.97 11.66 49.39 Adjusted EBITDA Margin per Ton $ 9.12 $ (4.18) $ 2.16 $ 4.69 Three Months Ended June 30, 2024 Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal (Amounts in millions, except per ton data) Tons sold 4.1 2.0 15.8 3.7 Revenue $ 307.5 $ 294.3 $ 221.9 $ 202.0 Total Segment Costs 203.1 231.5 204.1 166.6 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 $ 104.4 $ 143.6 $ 17.8 $ 35.4 Revenue per Ton $ 74.43 $ 149.29 $ 14.02 $ 55.21 Costs per Ton 49.14 117.47 12.89 45.53 Adjusted EBITDA Margin per Ton $ 25.29 $ 31.82 $ 1.13 $ 9.68 Six Months Ended June 30, 2025 Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal (Amounts in millions, except per ton data) Tons sold 8.0 4.0 39.6 6.0 Revenue $ 460.2 $ 472.3 $ 551.3 $ 323.8 Total Segment Costs 342.5 468.3 472.0 277.4 Adjusted EBITDA $ 117.7 $ 4.0 $ 79.3 $ 46.4 Revenue per Ton $ 57.25 $ 119.40 $ 13.92 $ 54.20 Costs per Ton 42.61 118.39 11.92 46.43 Adjusted EBITDA Margin per Ton $ 14.64 $ 1.01 $ 2.00 $ 7.77 39 Table of Contents Six Months Ended June 30, 2024 Seaborne Thermal Seaborne Metallurgical Powder River Basin Other U.S. Thermal (Amounts in millions, except per ton data) Tons sold 8.1 3.4 34.5 6.9 Revenue $ 591.4 $ 541.3 $ 476.0 $ 393.6 Total Segment Costs 393.2 430.2 441.8 311.7 Adjusted EBITDA, excluding Shoal Creek insurance recovery $ 198.2 $ 111.1 $ 34.2 $ 81.9 Shoal Creek insurance recovery - business interruption — 80.8 — — Adjusted EBITDA $ 198.2 $ 191.9 $ 34.2 $ 81.9 Revenue per Ton $ 72.86 $ 159.10 $ 13.80 $ 57.33 Costs per Ton 48.44 126.46 12.81 45.40 Adjusted EBITDA Margin per Ton $ 24.42 $ 32.64 $ 0.99 $ 11.93 Regulatory Update Other than as described in the following section, there were no significant changes to the Company’s regulatory or global climate matters subsequent to December 31, 2024. This section should be considered in connection with the Company’s regulatory and global climate matters as outlined in Part I, Item 1. “Business” in its Annual Report on Form 10-K for the year ended December 31, 2024. Regulatory Matters - U.S. Black Lung Benefits Act Self-Insurance Requirements . The Black Lung Benefits Act requires each coal mine operator to secure the payment of its potential benefits liability by either qualifying as a self-insurer or by purchasing and maintaining a commercial insurance contract. The Department of Labor’s Office of Workers’ Compensation Programs (OWCP) is responsible for authorizing coal mine operators to self-insure and for setting the security amounts. As part of its ongoing efforts to reform the self-insurance program to ensure that operators are adequately securing their liabilities, the OWCP finalized a rule on December 12, 2024 to update its regulations for authorizing operators to self-insure and for determining appropriate security amounts. The changed requirements for security posted to self-insure black lung liabilities could result in the Company being required to post additional security for its obligations. The Trump Administration recently issued letters to impacted companies that the 60-day deadline to provide information was no longer applicable and that no additional information was required at this time. They also announced that OWCP would provide additional guidance in due course. Recent Announcement by the U.S. Environmental Protection Agency (EPA). In response to an executive order issued by President Trump requiring agencies to identify regulations for regulatory roll back, the EPA announced on March 12, 2025, that it will reconsider several EPA actions, including: • Regulation of greenhouse gas (GHG) emissions from new and existing fossil fuel-fired electric generating units (EGUs); • National Ambient Air Quality Standards for fine particulate matter (PM); • Cross State Air Pollution Rule (CSAPR); • Mercury and Air Toxic Standards (MATS); • Implementation of the Regional Haze Program; • Final September 2023 rule clarifying the scope of federal regulatory authority over wetland and non-navigable waters; • Final rule regarding effluent limitations guidelines for the steam electric power generating industry; and • Rules for disposal of coal combustion residuals. 40 Table of Contents On June 17, 2025, in accordance with the agency’s earlier announcement, the EPA proposed to repeal all GHG emissions standards for new and existing fossil fuel-fired power plants and, in the alternative, to repeal emission guidelines for existing fossil fuel-fired power plants and requirements for modified coal-fired steam generating to use carbon capture and sequestration technology. In addition, on June 17, 2025, the EPA proposed to repeal parts of a final 2024 MATS rule regarding filterable PM standards and requirements and a revised mercury standard for existing lignite-fired electric generating units. Peabody will continue to monitor these items as changes could have significant impact on the U.S. coal mining industry, Peabody’s mining operations and its customers. Complaints Filed Against “Climate Superfund Laws” and Announced State Actions . On April 30 and May 1, 2025, respectively, the U.S. Department of Justice filed complaints for declaratory and injunctive relief against the states of Michigan and Hawaii regarding alleged liability of fossil fuel companies for past GHG emissions and against New York and Vermont for “climate superfund” laws. These complaints allege that existing litigation and state laws interfere with federal law, including the Clean Air Act, and with interstate and foreign commerce. The Company will monitor this litigation and its potential impact on the U.S. coal mining industry, its mining operations and customers. National Environmental Policy Act (NEPA) . NEPA, signed into law in 1970, requires federal agencies to review the environmental impacts of their decisions and issue either an environmental assessment or an environmental impact statement. Peabody must provide information to agencies when it proposes actions that will be under the authority of the federal government. The NEPA process involves public participation and can involve lengthy timeframes. Since July 2020, the White House Council on Environmental Quality (CEQ) has revised its longstanding NEPA regulations on several occasions. On January 20, 2025, President Trump issued Executive Order 14154, which directed the CEQ to propose rescinding its NEPA regulations and to provide guidance to federal agencies on implementing NEPA and to coordinate the revision of the agencies’ own implementing regulations. On February 25, 2025, the CEQ published an Interim Final Rule removing all CEQ NEPA regulations from the Code of Federal Regulations. The CEQ has clarified that individual agencies are free to continue following or to amend their own NEPA implementation procedures, which largely conformed to the CEQ’s regulations. On May 28, 2025, the CEQ withdrew its January 9, 2023 interim guidance on consideration of GHG emissions and climate change when conducting environmental reviews pursuant to NEPA. SEC Climate-Related Disclosures . On March 6, 2024, the SEC adopted final rules it expected would enhance and standardize climate-related disclosures by public companies and in public offerings. Specifically, the final rules required disclosure of, among other things, climate-related risks that have had or are reasonably likely to have a material impact on a public company’s business strategy, results of operations or financial condition; certain GHG emissions associated with a public company along with, in many cases, an attestation report by a GHG emissions attestation provider; and certain climate-related financial metrics to be included in a company’s audited financial statements. The final rules were challenged by multiple parties, and the cases were consolidated into a judicial review by the U.S. Court of Appeals for the Eighth Circuit (Eighth Circuit). On April 4, 2024, the SEC voluntarily stayed implementation of the final rules pending such judicial review. On March 27, 2025, the SEC announced that it would end its defense of the final rules. On April 24, 2025, the Eighth Circuit directed the SEC to provide a status update in the ongoing litigation concerning the final rules. On July 23, 2025, the SEC indicated that it does not intend to review or reconsider the final rules but requested that the Eighth Circuit proceed with the litigation and decide the case. One Big Beautiful Bill Act of 2025 . The One Big Beautiful Bill Act of 2025 (OBBBA) was signed into law on July 4, 2025. Several provisions of the legislation could materially affect the Company’s operations, financial condition or cash flows, including a reduction to the federal royalty rate on coal production and the addition of metallurgical coal which is suitable for use in the production of steel to the list of critical minerals eligible for the Section 45X tax credit through 2029 at a rate of 2.5% of production costs. While Peabody currently estimates benefits of approximately $15 million to $20 million in the second half of 2025 related to the federal royalty reduction provisions of the legislation, the Company will continue to evaluate the applicability and effect of the OBBBA as more guidance is issued. Regulatory Matters - Australia Industrial Relations Laws. A national industrial relations system, the Fair Work Act and National Employment Standards, applies to all private sector employers and employees where the employer is a corporation. The matters regulated under the national system include general employment conditions, unfair dismissal, enterprise bargaining, bullying claims, industrial action and resolution of workplace disputes. Most of the hourly workers employed in the Company’s mines are also covered by the Black Coal Mining Industry Award and company specific enterprise agreements approved under the national system. 41 Table of Contents In December 2022, the federal government passed The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, which amends the Fair Work Act. The legislation introduced several changes to workplace laws in Australia including changes to enterprise agreement making and termination; when industrial action can be taken; and access to multi-employer bargaining or single interest employer authorizations. Following this amendment, the Wambo Underground Mine and four other mines in New South Wales (NSW) were served with an application for a single interest employer authorization which was granted by the Fair Work Commission (Commission) against three employers including Peabody. An application to the Commission to remove the Wambo Underground Mine from the authorization due to its pending closure was granted by the Commission on July 3, 2025. On December 7, 2023, the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 was passed by the Australian Federal Parliament. The legislation allows unions, employees and/or hosts to make application to the Commission for a ‘regulated labour hire arrangement order’ that, if successful, requires labor hire employers to provide similar wages and conditions to regulated workers as those provided to employees of the host. The Commission must make the order requested if it is satisfied that (1) the employer supplies (or will supply) employee(s) to a regulated host to perform work for the host; (2) the regulated host has 15 employees or more; and (3) the regulated host has an enterprise agreement that would apply to the regulated employees if they were directly employed by the host, unless the Commission is satisfied that it is not fair and reasonable to do so. These orders do not apply to contactor arrangements, only labor hire. Various union applications for regulated labor hire arrangement orders to apply at Australian coal mining operations have been successfully made, and are currently being considered by the Commission. Orders have been made in relation to labor hire employers who provide labor to Peabody Energy Australia PCI Mine Management Pty Ltd (now a regulated host) at its Coppabella Mine and to Helensburgh Coal Pty Ltd (now a regulated host) at the Metropolitan Mine. The Australian Parliament has passed various other pieces of legislation changing the Australian industrial and employment landscape. This includes the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 which was passed on February 12, 2024 and made many changes, including to the definition of who is a casual employee and the definition of who is a contractor versus employee. The change to the casual employment definition was introduced to move away from a decision of the High Court of Australia in which an employee in the Australian coal mining industry who was rostered to work full-time hours on a 12-month roster was found to be employed on a casual basis pursuant to the terms of his contract of employment and therefore not entitled to receive the benefits that permanent employees receive (e.g. paid annual leave). Native Title and Cultural Heritage Laws. Since 1992, the Australian courts have recognized that native title to lands and water, as recognized under the laws and customs of the Aboriginal inhabitants of Australia, may have survived the process of European settlement. These developments are supported by the federal Native Title Act which recognizes and protects native title, and under which a national register of native title claims has been established. Native title rights do not extend to minerals; however, native title rights can be affected by mining activities unless those rights have previously been extinguished, thereby requiring negotiation with the traditional owners (and potentially the payment of compensation) prior to the grant of certain mining tenements. There is also federal and state legislation to prevent damage to Aboriginal cultural heritage and archaeological sites. Both NSW and Queensland have additional state specific legislation in place that enables Aboriginal people to claim freehold title to available land currently owned by the state government. If and when title to any claimable land is transferred to the relevant Aboriginal people, then ongoing consultation and compensation arrangements will need to be in place with the new landowner. There is claimable land within proximity to all Company operations in NSW and Queensland and accordingly, as and when any claims are processed by the respective state government, the Company will need to progress consultation and compensation arrangements to ensure that its access rights are maintained. The Company continues to monitor the progress of any claims that have the potential to impact on its operations. Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (ATSIHP). The purpose of the ATSIHP Act is to ensure the preservation and protection from harm or desecration of areas and objects in Australia and in Australian waters, that are of particular significance to Aboriginal people. Under the ATSIHP Act, the Commonwealth Minister for Indigenous Australians can make declarations in relation to areas or objects for the purposes of protecting Aboriginal and Torres Strait Islander heritage. Declarations are made in response to applications made by an Aboriginal person or group showing that the area or object is significant with respect to Aboriginal culture and is under threat of injury or desecration. Such a declaration may prevent any development being carried out on the relevant area of land. In 2024, the federal minister made a declaration under the ATSIHP Act over an area that had been approved under state and federal environmental and planning laws for a gold mining project. The project proponent has indicated that the decision renders the mine project unviable and has initiated Federal Court proceedings seeking a judicial review of the decision-making process. Hearings into the matter are expected to occur in December 2025. 42 Table of Contents Risks and Regulations Related to Global Climate Change Other than as described in the following section, there have been no significant changes to the Company’s global climate matters subsequent to December 31, 2024. Refer to Part I, Item 1. “Business” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for information regarding the Company’s global climate matters. Regulations Related to Global Climate Change The Kyoto Protocol, adopted in December 1997 by the signatories to the 1992 United Nations Framework Convention on Climate Change (UNFCCC), established a binding set of GHG emission targets for developed nations. The U.S. signed the Kyoto Protocol but it has never been ratified by the U.S. Senate. Australia ratified the Kyoto Protocol in December 2007 and became a full member in March 2008. There were discussions to develop a treaty to replace the Kyoto Protocol after the expiration of its commitment period in 2012, including at the UNFCCC conferences in Cancun (2010), Durban (2011), Doha (2012) and Paris (2015). At the Durban conference, an ad hoc working group was established to develop a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC, applicable to all parties. At the Doha meeting, an amendment to the Kyoto Protocol was adopted, which included new commitments for certain parties in a second commitment period, from 2013 to 2020. In December 2012, Australia signed on to the second commitment period. During the UNFCCC conference in Paris, France in late 2015, an agreement was adopted calling for voluntary emissions reduction contributions after the second commitment period ended in 2020 (the Paris Agreement). The agreement was entered into force on November 4, 2016 after ratification and execution by more than 55 countries, including Australia, that account for at least 55% of global GHG emissions. On January 20, 2021, the U.S. reentered the Paris Agreement by accepting the agreement and all of its articles and clauses, after having announced its withdrawal from the agreement in November 2019. On January 20, 2025, pursuant to the Executive Order on Putting America First In International Environmental Agreements, President Trump directed the U.S. Ambassador to the United Nations to submit a formal notification withdrawing the United States from the Paris Agreement. Liquidity and Capital Resources Overview The Company’s primary source of cash is proceeds from the sale of its coal production to customers. The Company has also generated cash from the sale of non-strategic assets, including coal reserves, coal resources and surface lands, and, from time to time, borrowings under its credit facilities and the issuance of securities. The Company’s primary uses of cash include the cash costs of coal production, capital expenditures, coal reserve lease and royalty payments, debt service costs, finance and operating lease payments, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, dividends, share repurchases and selling and administrative expenses. The Company has also used cash for early debt retirements and acquisitions. Any future determinations to return capital to stockholders, such as dividends or share repurchases, will depend on a variety of factors, including the Company’s net income or other sources of cash, liquidity position and potential alternative uses of cash, such as internal development projects or acquisitions, as well as economic conditions and expected future financial results. 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. Liquidity As of June 30, 2025, the Company’s cash and cash equivalents balances totaled $585.9 million, including approximately $370 million held by U.S. subsidiaries, approximately $204 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the six months ended June 30, 2025, 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. 43 Table of Contents The Company’s available liquidity decreased from $1,072.5 million as of December 31, 2024 to $958.9 million as of June 30, 2025. Available liquidity was comprised of the following: June 30, 2025 December 31, 2024 (Dollars in millions) Cash and cash equivalents $ 585.9 $ 700.4 Revolving credit facility availability 270.7 233.7 Accounts receivable securitization program availability 102.3 138.4 Total liquidity $ 958.9 $ 1,072.5 Capital Returns to Shareholders The Company paid dividends of $18.3 million during the six months ended June 30, 2025. 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 3.250% Convertible Senior Notes due March 2028 (the 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. 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. 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. 44 Table of Contents 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 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. 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. Capital Expenditures Due to the reduction of certain sustaining capital expenditures, the Company revised its expected 2025 capital expenditures from approximately $450 million to $420 million. Indebtedness The Company’s total indebtedness as of June 30, 2025 and December 31, 2024 is presented in the table below. 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 The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at June 30, 2025, of approximately $16 million in 2025, $17 million in 2026, $13 million in 2027, $326 million in 2028, less than $1 million in 2029 and $10 million thereafter. Cash paid for interest, net of capitalized interest related to the Company’s indebtedness and financial assurance instruments amounted to $24.1 million during both the six months ended June 30, 2025 and 2024. 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. 45 Table of Contents 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. 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. 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. Accounts Receivable Securitization Program As described in Note 13. “Financial Instruments and Other Guarantees” of the accompanying unaudited condensed consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017. 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 program. 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, 2025, the Company had no outstanding borrowings and $58.6 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, 2025. The accounts receivable securitization program was amended in January 2025 to extend its maturity to January 2028. Covenant Compliance The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2025. 46 Table of Contents Cash Flows The following table summarizes the Company’s cash flows for the six months ended June 30, 2025 and 2024, as reported in the accompanying unaudited condensed consolidated financial statements. Six Months Ended June 30, 2025 2024 (Dollars in millions) Net cash provided by operating activities $ 143.1 $ 126.8 Net cash used in investing activities (180.7) (316.8) 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 1,382.6 1,650.2 Cash, cash equivalents and restricted cash at end of period $ 1,300.1 $ 1,319.7 Operating Activities. The increase in net cash provided by operating activities for the six months ended June 30, 2025 compared to the same period in the prior year was primarily driven by a year-over-year increase in operating cash flow from working capital ($303.9 million), offset by a decrease in cash from collateral arrangements resulting from prior year collateral releases ($154.9 million) and lower cash generated from mining operations. Investing Activities. The decrease in net cash used in investing activities for the six months ended June 30, 2025 compared to the same period in the prior year was driven by a decrease due to the prior period Wards Well acquisition ($143.8 million) and higher net distribution from joint ventures ($28.3 million). These variances were partially offset by higher payment of capital accruals ($28.3 million). Financing Activities. The decrease in net cash used by financing activities for the six months ended June 30, 2025 compared to the same period in the prior year was primarily driven by decreases in common stock repurchases ($83.1 million) and payment of debt issuance and other deferred financing costs ($9.3 million). Off-Balance-Sheet Arrangements 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. 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. 47 Table of Contents Not presented in the above table is $847.1 million of restricted cash and other balances serving as collateral which are included in the accompanying condensed consolidated balance sheets at June 30, 2025, as described in Note 13. “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 increased $37.3 million during the six months ended June 30, 2025 due to an increase in bonding requirements and the impact of foreign currency rate changes. At June 30, 2025, the Company had total asset retirement obligations of $729.1 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. At June 30, 2025, the Company’s reclamation bonding requirements were supported by approximately $740 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. GAAP. Critical Accounting Policies and Estimates The Company’s discussion and analysis of its financial condition, results of operations, liquidity and capital resources is based upon its financial statements, which have been prepared in accordance with U.S. GAAP. The Company is also required under U.S. GAAP to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. At June 30, 2025, the Company identified certain assets with an aggregate carrying value of approximately $71 million in its Other U.S. Thermal segment whose recoverability is most sensitive to customer concentration risk. The Company’s critical accounting policies and estimates are discussed in Part II, Item 7. “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, 2024. The Company’s critical accounting policies remain unchanged at June 30, 2025, and there have been no material changes in the Company’s critical accounting estimates. Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented See Note 2. “Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented” to the Company’s unaudited condensed consolidated financial statements for a discussion of newly adopted accounting standards and accounting standards not yet implemented.