What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-06 · 327 added, 160 removed, 401 unchanged (55% of the section changed)

30 unchanged sentences

In 2025, Peabody sold 122.0 million tons of coal.

February 2026 marked the start-up of the Centurion Mine in the Seaborne Metallurgical segment.

As a result, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia at March 31, 2026.

The Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia at June 30, 2026.

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

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“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 category.

Pricing during the three months ended March 31, 2026 is set forth in the table below.

High Low Average March 31, 2026 May 1, 2026

Pricing during the three months ended June 30, 2026 is set forth in the table below.

High Low Average June 30, 2026 August 3, 2026

Premium low-vol hard coking coal (Premium HCC) (1)

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(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 March 31, 2026 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized.

The seaborne pricing included in the table above is not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2026 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 March 31, 2026 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors.

In the U.S., the pricing included in the table above is also not necessarily indicative of the pricing the Company realized during the three months ended June 30, 2026 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.

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Within the global coal industry, supply and demand for its products and the supplies used for mining are being impacted by recent geopolitical events and changes to trade policy, including tariffs and customs regulations.

As future developments related to geopolitical events and 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 three months ended March 31, 2026 presented herein may not be indicative of their ultimate impacts.

The seaborne metallurgical coal market experienced weather-related disruptions in Australia and supply tightness in key product segments.

This, combined with steady import demand from key metallurgical coal import markets, contributed to the increases in average quarterly pricing for premium coking coal (17%) and PCI (15%) during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025.

In China, the continued implementation of anti-involution policies, mandated steel production limits and the introduction of steel export quotas have the potential to lead to decreased Chinese steel exports, while increasing steel-trade protectionism is supportive of steel production and seaborne metallurgical coal demand in markets outside of China.

The biggest steel growth market, India, continued to see an increase in crude steel output in the quarter.

Recent geopolitical events have increased the cost of seaborne energy, which has the potential to significantly impact the global ferrous complex, by placing upward pressure on raw material costs and downward pressure on steel product pricing through weakened downstream demand.

Looking forward, the seaborne metallurgical coal price may remain volatile based on mining rates in Australia, geopolitical events, Chinese supply reforms and the pace of growth of the Indian steel industry.

Within the seaborne thermal coal market, global thermal coal prices started the year stable but increased during the three months ended March 31, 2026, due to the closure of the Strait of Hormuz and the conflict in the Middle East.

The conflict has elevated global liquefied natural gas (LNG) prices and created volatility in global thermal energy markets.

In China, power generation increased year-over-year through March 31, 2026, which has resulted in stronger thermal generation year-over-year.

However, both domestic coal production and coal imports have remained flat year-over-year through the three months ended March 31, 2026.

In India, stronger domestic coal production, lower import demand and slightly lower coal generation led to stable coal stockpiles.

Looking forward, seaborne thermal coal prices may remain volatile based on accessibility to shipping in the Strait of Hormuz and the duration of the ongoing conflict in the Middle East.

Approximately 20% of global LNG exports flow through the Strait of Hormuz, which has created volatility in the global LNG market, a main competitor of global coal generation.

In addition, summer re-stocking activity in the Northern Hemisphere may impact global thermal coal markets in the coming months.

In the U.S., overall electricity demand increased just under 1% year-over-year through the three months ended March 31, 2026.

Through the first three months of 2026, electricity generation from thermal coal decreased year-over-year, driven by lower natural gas prices, stronger renewable generation and milder winter weather in coal-heavy markets in the U.S.

Coal’s share of electricity generation decreased to approximately 16% for the three months ended March 31, 2026, while wind and solar’s combined generation share was at 20% and the share of natural gas generation remained stable at approximately 37%.

coal inventories have increased slightly compared to the end of 2025 through March 31, 2026.

Arbitration Relating to Terminated Anglo American 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 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).

As future developments related to geopolitical events and 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, 2026 presented herein may not be indicative of their ultimate impacts.

During the six months ended June 30, 2026, regional divergence in supply and demand fundamentals in the seaborne metallurgical coal market contributed to a 29% increase in the Premium HCC price and a 17% rise in the Premium PCI price.

Weather-related interruptions and operational challenges in Australia periodically constrained export availability and provided support to Premium HCC and Premium PCI prices.

Seaborne supply remained responsive to periods of price strength, with producer output recovering following disruption events.

Robust blast furnace output in China and domestic coal supply constraints following a major mine accident in Shanxi Province which triggered widespread safety inspections and production suspensions, contributed to tighter domestic coking coal availability and increased Chinese imports of seaborne coal.

While India remains the largest growth market for steel production, monsoon-related disruptions and softer steel margins contributed to a moderation in metallurgical coal import demand during the period.

Continued geopolitical tensions, constrained availability of premium metallurgical coal products and disruptions to global trade routes contributed to ongoing volatility across energy, freight and raw material markets during the first half of 2026.

Despite these headwinds, underlying steel production and industrial activity in key consuming markets continues to provide support for seaborne metallurgical coal demand.

During the six months ended June 30, 2026, the seaborne thermal coal market remained supported by national government energy security policies.

Elevated liquefied natural gas (LNG) prices and continued volatility across global energy markets encouraged utilities in several importing regions to consider greater coal utilization, particularly in import-dependent regions, such as Asia and Europe.

Chinese power demand remained resilient, supported by rising industrial activity and seasonal requirements, while domestic coal production growth moderated import demand.

In India, high levels of domestic coal output continued to limit seaborne imports, as record high electricity consumption provided underlying support for domestic production.

Thermal coal prices are expected to remain sensitive to geopolitical developments affecting energy trade flows, developments in LNG markets, Indonesia’s coal policy reforms, Asian inventory levels and global weather patterns influencing power demand trends.

Demand for energy from thermal coal remains an important component of the global power generation mix through the remainder of 2026 as governments and utilities continue to prioritize reliable and affordable energy supply.

In the U.S., overall electricity demand increased just under 1% year-over-year through the six months ended June 30, 2026.

Through the first six months of 2026, electricity generation from thermal coal decreased year-over-year, driven by lower natural gas prices, stronger renewable generation and milder spring temperatures in coal-heavy markets in the U.S.

Coal’s share of electricity generation decreased to approximately 14% for the six months ended June 30, 2026, while wind and solar’s combined generation share increased to 22% and the share of natural gas generation remained stable at approximately 37%.

coal inventories have increased almost 10 million tons compared to the end of 2025 through June 30, 2026.

Financing and Liquidity Transactions

During the second quarter of 2026, Peabody completed multiple financing transactions.

The Company issued $250.0 million of new convertible senior unsecured notes and used the proceeds of the offering and available cash to purchase a capped call with a cap price of $50.61 per share and to repurchase $241.2 million of the existing convertible senior unsecured notes for cash consideration of $386.8 million.

These transactions lowered the Company’s borrowing rates, extended debt maturities to 2031 and reduced potential common share dilution from the convertible notes by approximately 6.2 million shares to approximately 10.7 million potential shares.

From an economic perspective, the $145.6 million premium paid above par value to repurchase the existing convertible senior notes was equivalent to repurchasing approximately 5.0 million shares at a weighted average price of $28.92 per share.

The Company also entered into standard agreements with surety providers in the U.S.

and Australia during the quarter, which reduced total reclamation collateral requirements and released formerly restricted cash and cash collateral.

And finally, the Company amended its existing revolving credit facility to increase funding capacity, lower interest rates and extend the maturity date.

Refer to the “Liquidity and Capital Resources” section contained within this Item 2 for a further discussion of these financing and liquidity transactions.

Arbitration Relating to Terminated Anglo American plc (Anglo) Acquisition

On November 25, 2024, Peabody entered into definitive agreements (the Purchase Agreements) to acquire from Anglo certain assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia (collectively, the Assets), 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 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.

On August 19, 2025, Peabody terminated the Purchase Agreements.

The termination of the Purchase Agreements followed Peabody’s prior delivery of a notice of a Material Adverse Change (MAC) as a result of an ignition event at the Moranbah North mine on March 31, 2025, which had led to the closure of the mine.

Following Peabody’s termination of the Purchase Agreements, Anglo returned $29.0 million of the $75.0 million deposit previously paid by Peabody, and Peabody has demanded the outstanding $46.0 million of the deposit also be returned.

“Commitments and Contingencies” to the accompanying unaudited condensed consolidated financial statements for further information.

On September 23, 2025, various subsidiaries of Anglo initiated International Chamber of Commerce arbitration proceedings in London, United Kingdom, against Peabody and certain of its affiliates.

Anglo’s complaint alleges, among other things, that Peabody wrongfully terminated the Purchase Agreements and seeks, among other things, declarations that the ignition event at the Moranbah North mine did not constitute a MAC, as well as damages for losses in an unspecified amount, plus costs and interest.

Peabody remains confident that a MAC occurred, and that it was entitled to terminate the Purchase Agreements.

Potential Recovery of Rare Earth Elements (REEs)

Peabody is advancing its evaluation of the potential recovery of REEs and critical minerals through ongoing testing to evaluate mineral types and concentrations at certain of its operations.

The Company has continued to progress technical and economic studies, advance commercial partnerships and pursue multiple federal and state funding pathways to support domestic supply chain development.

At that time, Anglo’s complaint alleged, among other things, that Peabody wrongfully terminated the Purchase Agreements and sought, among other things, declarations that the ignition event at the Moranbah North mine did not constitute a MAC, as well as damages for losses in an unspecified amount, plus costs and interest.

On June 5, 2026, Anglo filed its Statement of Claim, in which it purported to quantify, for the first time in the arbitration proceedings, the damages that it is demanding at approximately $755.0 million.

This amount primarily consists of $628.4 million in claimed losses, representing what Anglo contends is the difference in value of the Assets between November 25, 2024 and August 19, 2025, with the remainder consisting of Anglo’s claimed additional costs and interest on such claimed losses and costs.

Peabody disputes Anglo’s allegations in the arbitration proceedings and submits it properly terminated the Purchase Agreements.

With respect to Anglo’s calculation of its supposed damages, Peabody believes it is fundamentally flawed for several reasons, including because Anglo’s calculation assumes that the substantial portion of any loss in value is not attributable to the MAC and specifically the ignition event at Moranbah North.

In this regard, Peabody remains confident that a MAC occurred, and that it was entitled to terminate the Purchase Agreements.

However, while Peabody strongly disagrees with Anglo’s claim that the ignition event at the Moranbah North mine did not constitute a MAC, it is reasonably possible that the Company may incur a loss in connection with Anglo’s claim.

That said, given Peabody’s strong view that it was entitled to terminate the Purchase Agreements, as well as the fundamental disagreement over the basis for Anglo’s calculation of its alleged damages, Peabody is unable to provide a reasonable estimate of any possible loss or range of loss relating to this matter.

In addition, Peabody expects to receive the remaining $46.0 million purchase deposit under the termination provisions of the Purchase Agreements.

A final hearing in the arbitration proceedings is scheduled for September 2027.

Potential Recovery of Rare Earth Elements (REE)

In early July 2026, it was announced that Peabody had been awarded a grant from the U.S.

Department of Energy to advance REE and critical minerals (CM) development opportunities in the Powder River Basin.

Combined with the Wyoming Energy Authority grant awarded in February 2026, the Company continues to advance its evaluation of the potential recovery of REE and CM and other REE/CM opportunities.

Centurion Update

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The issues were resolved, but the disruptions constrained cutting speeds which contributed to temporary challenges to roof conditions.

The Company implemented a comprehensive response plan focused on proactive strata management, targeted equipment optimization and deployment of additional technical and operational resources.

The Company anticipates completing commissioning and production ramp-up in the second quarter of 2026 and running at full longwall production rates during the second half of 2026.

The operating team has implemented effective processes to address face conditions while maintaining production momentum and is working through the remaining roof control issues.

With operational constraints significantly reduced, Peabody's focus is on achieving targeted production rates.

Results of Operations

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

The decrease in results from continuing operations, net of income taxes for the three months ended March 31, 2026 compared to the same period in the prior year ($63.7 million) was driven by higher operating costs and expenses ($94.5 million) and depreciation, depletion and amortization ($17.4 million).

This unfavorable variance was partially offset by higher revenue ($36.3 million) driven by favorable volume and mix variances and lower year-over-year income taxes ($20.9 million).

Adjusted EBITDA for the three months ended March 31, 2026 reflected a year-over-year decrease of $61.5 million.

Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025

The decrease in results from continuing operations, net of income taxes for the three and six months ended June 30, 2026 compared to the same periods in the prior year ($60.3 million and $124.0 million, respectively) was driven by higher operating costs and expenses ($164.5 million and $259.0 million, respectively), induced conversion expense recognized in the current year ($17.2 million, three and six months), higher depreciation, depletion and amortization ($14.1 million and $31.5 million, respectively), reduced net gains on disposals ($10.4 million and $3.9 million, respectively), increased losses from equity affiliates ($9.0 million and $8.0 million, respectively) and lower net periodic benefit credits ($7.1 million and $14.1 million, respectively).

The unfavorable variances were partially offset by higher revenue ($113.1 million and $149.4 million, respectively) primarily driven by favorable pricing, increased tax benefits ($34.3 million and $55.2 million, respectively) and lower costs related to the terminated acquisition ($16.5 million and $15.9 million, respectively).

Adjusted EBITDA for the three and six months ended June 30, 2026 reflected a year-over-year decrease of $69.3 million and $130.8 million, respectively.

The following table presents tons sold:

Three Months Ended March 31, (Decrease) Increase

2026 2025 Tons %

(Tons in millions)

Three Months Ended June 30, (Decrease) Increase

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

2026 2025 Tons % 2026 2025 Tons %

(Tons in millions) (Tons in millions)

Seaborne Thermal 3.0 3.6 (0.6) (17) % 6.0 8.0 (2.0) (25) %

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Corporate and Other — — — n.m.

0.1 — 0.1 n.m.

Total tons sold 24.9 28.7 (3.8) (13) % 54.5 57.6 (3.1) (5) %

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The following table presents supplemental financial data by reportable segment:

Three Months Ended March 31, Increase

Three Months Ended June 30, Increase

(Decrease) Six Months Ended June 30, Increase

2026 2025 $ % 2026 2025 $ %

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The following table presents revenue by segment:

Three Months Ended March 31, (Decrease) Increase to Revenue

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Seaborne Thermal $ 230.6 $ 195.1 $ 35.5 18 % $ 428.1 $ 460.2 $ (32.1) (7) %

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Seaborne Thermal.

Segment revenue decreased during the three months ended March 31, 2026 compared to the same period in the prior year due to unfavorable volume ($91.8 million) driven by reductions at the Wilpinjong Mine due to mine sequencing and the closure of the Wambo Underground Mine in September 2025, partially offset by favorable realized prices ($24.2 million).

Segment revenue increased during the three months ended June 30, 2026 compared to the same period in the prior year due to favorable realized prices ($63.6 million), offset by unfavorable volume ($28.1 million) driven by reductions at the Wilpinjong Mine due to mine sequencing and the closure of the Wambo Underground Mine in September 2025.

Segment revenue decreased during the six months ended June 30, 2026 compared to the same period in the prior year due to unfavorable volume, as previously described ($118.2 million), offset by favorable realized prices ($86.1 million).

Seaborne Metallurgical.

Segment revenue increased during the three months ended March 31, 2026 compared to the same period in the prior year due to favorable volume ($39.8 million) primarily from the Shoal Creek and Centurion Mines and favorable realized prices ($23.1 million).

Segment revenue increased during the three and six months ended June 30, 2026 compared to the same periods in the prior year due to favorable realized prices ($77.3 million and $96.9 million, respectively) and favorable volume ($28.8 million and $72.1 million, respectively) driven largely by the start-up of the Centurion Mine.

Powder River Basin.

Segment revenue increased during the three months ended March 31, 2026 compared to the same period in the prior year due to favorable volume ($22.6 million) driven by increased demand.

The increase was offset by unfavorable realized prices ($8.7 million) which were driven by the impact of adjustments to cost pass-through contracts with certain customers resulting from the federal royalty rate reduction included in the One Big Beautiful Bill Act of 2025 (OBBBA).

Segment revenue increased during the three months ended March 31, 2026 compared to the same period in the prior year due to favorable volume ($10.3 million) driven by increased demand and favorable realized prices ($5.5 million).

Segment revenue decreased during the three and six months ended June 30, 2026 compared to the same periods in the prior year due to unfavorable volume ($48.8 million and $26.2 million, respectively) resulting from decreased demand driven by mild weather in the U.S.

and unfavorable realized prices ($3.1 million and $11.8 million, respectively) which were driven by the impact of adjustments to cost pass-through contracts with certain customers resulting from the federal royalty rate reduction included in the One Big Beautiful Bill Act of 2025 (OBBBA).

Segment revenue increased during the three and six months ended June 30, 2026 compared to the same periods in the prior year due to favorable volume ($4.4 million and $14.4 million, respectively) driven by increased demand and favorable realized prices ($3.7 million and $9.5 million, respectively).

Corporate and Other.

The increase in revenue during the three months ended March 31, 2026 compared to the same period in the prior year was primarily driven by higher results from trading activities.

The increase in revenue during the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily driven by higher revenue from trading activities.

Segment Costs

The following table presents costs by segment:

Three Months Ended March 31, (Decrease) Increase to Total Segment Costs

Three Months Ended June 30, Increase (Decrease) to Total Segment Costs Six Months Ended June 30, (Decrease) Increase to Total Segment Costs

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Seaborne Thermal $ 178.5 $ 161.6 $ 16.9 10 % $ 327.5 $ 342.5 $ (15.0) (4) %

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Seaborne Thermal.

Segment Costs decreased during the three months ended March 31, 2026 compared to the same period in the prior year due to lower variable operational costs ($17.1 million) and lower sales related costs ($15.1 million), which were both driven by decreased volume (1.4 million tons).

Segment Costs increased during the three months ended June 30, 2026 compared to the same period in the prior year primarily due to increased commodities expense ($17.1 million) which was driven by higher fuel pricing.

Segment Costs decreased during the six months ended June 30, 2026 compared to the same period in the prior year due to decreased volume (2.0 million tons) which drove both lower sales related costs ($17.2 million) and variable costs ($10.7 million).

These decreases were offset by increased commodities expense ($19.1 million).

Seaborne Metallurgical.

Segment Costs increased during the three months ended March 31, 2026 compared to the same period in the prior year due to higher costs for labor, repairs and outside services ($63.2 million) driven by challenging longwall commissioning conditions at the Centurion Mine and higher sales related costs ($15.0 million) resulting from increased volume (0.2 million tons) and higher realized pricing.

Segment Costs increased during the three and six months ended June 30, 2026 compared to the same periods in the prior year due to higher costs for labor, repairs and outside services ($73.6 million and $136.8 million, respectively) driven by longwall commissioning activities at the Centurion Mine;

higher sales related costs ($34.4 million and $49.4 million, respectively) resulting from increased volume (0.3 million tons and 0.5 million tons, respectively) and higher realized pricing;

and increased commodities expense ($15.9 million and $15.7 million, respectively) which was primarily driven by higher fuel pricing.

Powder River Basin.

Segment Costs increased during the three months ended March 31, 2026 compared to the same period in the prior year due to higher costs for labor, repairs and outside services ($22.6 million) as the result of higher volume (1.6 million tons) and planned equipment outages and higher costs for commodities ($12.2 million).

These increases were offset by lower sales related costs ($11.5 million) which were largely driven by the federal royalty rate reduction on coal production included in the OBBBA.

Segment Costs increased during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to higher variable operational costs ($9.9 million) driven by increased volume (0.2 million tons).

Segment Costs decreased during the three months ended June 30, 2026 compared to the same period in the prior year due to lower sales related costs ($25.3 million) which were largely driven by the federal royalty rate reduction on coal production included in the OBBBA and lower volume (3.6 million tons), offset by increased commodities expense ($17.0 million) driven by higher fuel pricing and increased leasing expense ($3.9 million).

Segment Costs increased during the six months ended June 30, 2026 compared to the same period in the prior year due to increased commodities expense ($29.2 million) driven by higher fuel pricing;

higher costs for labor, repairs and outside services ($23.3 million) as the result of planned equipment outages and increased in-pit inventory;

and increased leasing expense ($6.5 million).

These increases were offset by lower sales related costs ($36.8 million) which were largely driven by the federal royalty rate reduction on coal production included in the OBBBA and lower volume (2.0 million tons).

Segment Costs decreased during the three months ended June 30, 2026 compared to the same period in the prior year primarily due to lower costs for repairs and outside services ($11.7 million), offset by increased commodities expense ($7.8 million) driven by higher fuel pricing.

Segment Costs increased during the six months ended June 30, 2026 compared to the same period in the prior year due to higher commodities expense ($11.2 million), higher variable operational costs ($5.1 million) and higher sales related costs ($4.7 million) driven by increased volume (0.3 million tons), offset by lower costs for repairs and outside services ($16.5 million).

Corporate and Other.

The increase to Segment Costs during the three months ended March 31, 2026 compared to the same period in the prior year was primarily driven by lower net periodic benefit credit, excluding service cost due to the final amortization in the prior year of a previously established prior service credit ($7.0 million).

The increase to Segment Costs during the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily driven by higher expenses related to trading and brokerage activities ($16.4 million and $23.4 million, respectively), the unfavorable remeasurement of foreign currency ($15.1 million and $8.5 million, respectively) and lower net periodic benefit credit, excluding service cost due to the final amortization in the prior year of a previously established prior service credit ($7.1 million and $14.1 million, respectively).

Adjusted EBITDA

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

Three Months Ended March 31, (Decrease) Increase to Segment Adjusted EBITDA

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Seaborne Thermal $ 52.1 $ 33.5 $ 18.6 56 % $ 100.6 $ 117.7 $ (17.1) (15) %

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Seaborne Thermal.

Segment Adjusted EBITDA decreased during the three months ended March 31, 2026 compared to the same period in the prior year due to unfavorable volume ($30.8 million), unfavorable operational costs at the Wilpinjong Mine ($22.8 million) driven by mine sequencing and the unfavorable impact of higher foreign exchange rates on expenses ($10.2 million).

Segment Adjusted EBITDA increased during the three months ended June 30, 2026 compared to the same period in the prior year due to higher realized prices net of sales sensitive costs ($64.3 million), offset by unfavorable production costs ($20.3 million) driven by mine sequencing at the Wilpinjong Mine, higher commodities expense as described above and the unfavorable impact of higher foreign exchange rates on expenses ($8.5 million).

Segment Adjusted EBITDA decreased during the six months ended June 30, 2026 compared to the same period in the prior year due to unfavorable production costs ($49.4 million) primarily driven by mine sequencing at the Wilpinjong Mine, unfavorable volume ($28.8 million), higher commodities expense as described above and the unfavorable impact of higher foreign exchange rates on expenses ($19.0 million).

These decreases were offset by higher realized prices net of sales sensitive costs ($94.5 million).

Seaborne Metallurgical.

Segment Adjusted EBITDA decreased during the three months ended March 31, 2026 compared to the same period in the prior year due to higher costs for labor, repairs and outside services, as described above, offset by higher realized prices net of sales sensitive costs ($27.4 million) and favorable volume ($12.0 million).

Segment Adjusted EBITDA decreased during the three and six months ended June 30, 2026 compared to the same periods in the prior year due to unfavorable production costs ($61.4 million and $102.3 million, respectively) primarily driven by longwall commissioning activities at the Centurion Mine, the unfavorable impact of higher foreign exchange rates on expenses ($16.4 million and $28.6 million, respectively) and higher commodities expense as described above.

These decreases were offset by higher realized prices net of sales sensitive costs ($54.0 million and $69.6 million, respectively) and favorable volume ($26.3 million and $41.5 million, respectively).

Powder River Basin.

Segment Adjusted EBITDA decreased for the three months ended March 31, 2026 compared to the same period in the prior year due to higher costs for labor, repairs and outside services and commodities as described above, offset by favorable volume ($12.5 million) and lower sales related costs as described above.

Segment Adjusted EBITDA increased during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to higher realized prices net of sales sensitive costs ($4.1 million) and favorable volume ($2.4 million), offset by increased commodity pricing and usage ($3.4 million).

Segment Adjusted EBITDA decreased for the three and six months ended June 30, 2026 compared to the same periods in the prior year due to unfavorable volume ($28.0 million and $14.8 million, respectively), higher commodity pricing and usage as described above, increased in-pit inventory as the workforce focused on preparatory efforts in light of reduced customer demand ($11.4 million and $14.9 million, respectively) and higher leasing expense and costs for labor, repairs and outside services as described above.

These decreases were offset by lower sales related costs as described above.

Segment Adjusted EBITDA increased during the three and six months ended June 30, 2026 compared to the same periods in the prior year primarily due to lower costs for repairs and outside services as described above and favorable volume ($10.4 million and $16.5 million, respectively), offset by higher commodity pricing and usage as described above.

Corporate and Other Adjusted EBITDA.

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

Three Months Ended March 31, Increase (Decrease) to Adjusted EBITDA

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Middlemount (1)

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(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 other equity method investments, 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 months ended March 31, 2026 compared to the same period in the prior year due to favorable variances in Middlemount’s results driven by higher sales pricing and higher gains on equipment and land sales ($6.5 million).

These increases were offset by higher selling and administrative expenses.

The decrease in other items was driven by lower net periodic benefit credit, excluding service cost, as described above ($7.0 million), offset by the favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($6.5 million).

Corporate and Other Adjusted EBITDA decreased during the three months ended June 30, 2026 compared to the same period in the prior year due to unfavorable variances in Middlemount’s results driven by lower production and higher fuel costs, partially offset by higher sales pricing;

and lower gains on equipment and land sales ($10.4 million).

The decrease in other items was driven by unfavorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($15.1 million) and lower net periodic benefit credit, excluding service cost, as described above ($7.1 million).

Corporate and Other Adjusted EBITDA decreased during the six months ended June 30, 2026 compared to the same period in the prior year due to unfavorable variances in Middlemount’s results driven by lower production and higher fuel costs, partially offset by higher sales pricing;

and higher selling and administrative expenses.

The decrease in other items was driven by lower net periodic benefit credit, excluding service cost, as described above ($14.1 million) and the unfavorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($8.5 million).

(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 March 31, (Decrease) Increase to Income

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Adjusted EBITDA (1)

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Interest expense, net of capitalized interest (12.7) (11.1) (1.6) (14) % (23.4) (22.6) (0.8) (4) %

Induced conversion expense (17.2) — (17.2) n.m.

(17.2) — (17.2) n.m.

Interest income 12.1 13.8 (1.7) (12) % 25.2 29.2 (4.0) (14) %

Unrealized gains on foreign currency option contracts 0.3 4.3 (4.0) (93) %

Unrealized (losses) gains on foreign currency option contracts (3.9) 4.1 (8.0) (195) % (3.6) 8.4 (12.0) (143) %

Take-or-pay contract-based intangible recognition — 0.3 (0.3) (100) % — 0.5 (0.5) (100) %

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

Three Months Ended March 31, Increase (Decrease) to Income

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

Seaborne Thermal $ (22.9) $ (31.0) $ 8.1 26 % $ (44.7) $ (64.4) $ 19.7 31 %

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

Three Months Ended March 31,

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

2026 2025 2026 2025

Seaborne Thermal $ 1.05 $ 2.00 $ 1.05 $ 2.00

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Thermal 1.47 1.81 1.62 1.82

Depreciation, depletion and amortization expense increased during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to increased depreciation and amortization resulting from shortened mine lives.

The decrease in the weighted-average depletion rate per ton for the Seaborne Thermal segment during the three months ended March 31, 2026 compared to the same period in the prior year reflects the increased quantity of proven and probable coal reserves resulting from the conversion of coal resources to proven and probable reserves.

The increase in the weighted-average depletion rate per ton for the Seaborne Metallurgical segment during the three months ended March 31, 2026 compared to the same period in the prior year reflects the impact of volume and mix variances across the segment.

Depreciation, depletion and amortization expense increased during the three and six months ended June 30, 2026 compared to the same periods in the prior year primarily due to increased depreciation and amortization resulting from shortened mine lives.

The decrease in the weighted-average depletion rate per ton for the Seaborne Thermal segment during the three and six months ended June 30, 2026 compared to the same periods in the prior year reflects the increased quantity of proven and probable coal reserves at the Wilpinjong Mine resulting from the conversion of coal resources to proven and probable reserves.

The increase in the weighted-average depletion rate per ton for the Seaborne Metallurgical segment during the three and six months ended June 30, 2026 compared to the same periods in the prior year reflects the impact of volume and mix variances across the segment.

The decrease in the weighted-average depletion rate per ton for the Other U.S.

Thermal segment during the three and six months ended June 30, 2026 compared to the same periods in the prior year reflects the impact of volume and mix variances across the segment.

Costs Related to Terminated Acquisition.

These costs relate to the terminated acquisition of certain assets and businesses associated with Anglo’s metallurgical coal portfolio.

In addition to typical costs, such as legal and professional fees, the prior year charges included a $10.4 million duration fee on a now-terminated bridge loan facility.

Refer to Note 13.

“Commitments and Contingencies” to the accompanying unaudited condensed consolidated financial statements for further information.

Induced Conversion Expense.

During the current year, the Company repurchased $241.2 million aggregate principal amount of its outstanding 3.250% Convertible Senior Notes due March 2028 for consideration of $386.8 million.

The repurchase of the existing notes was accounted for as an induced conversion, and a portion of the consideration in excess of the amount issuable pursuant to the original conversion terms, $17.2 million, was recognized as expense.

Refer to Note 9.

“Long-term Debt” to the accompanying unaudited condensed consolidated financial statements for additional information.

Interest Income.

The decrease in income during the three months ended March 31, 2026 compared to the same period in the prior year was driven by lower average cash balances during the current period.

Unrealized Gains on Foreign Currency Option Contracts.

Unrealized gains primarily relate to mark-to-market activity on foreign currency option contracts.

The decrease in income during the three and six months ended June 30, 2026 compared to the same periods in the prior year was driven by lower average cash balances during the current period.

Unrealized (Losses) Gains on Foreign Currency Option Contracts.

Unrealized (losses) gains primarily relate to mark-to-market activity on foreign currency option contracts.

For additional information, refer to Note 6.

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Income Tax Benefit (Provision).

The decrease in the income tax benefit (provision) during the three months ended March 31, 2026 compared to the same period in the prior year was primarily due to lower expected pretax income.

The increase in the income tax benefit during the three months ended June 30, 2026 compared to the same period in the prior year was primarily due to lower expected pretax income.

The increase in the income tax benefit recorded during the six months ended June 30, 2026 compared to the same period in the prior year was driven by expected pretax losses in the current year compared to expected pretax income in the prior year.

Refer to Note 8.

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The following table presents net (loss) income attributable to common stockholders:

Three Months Ended March 31, (Decrease) Increase

Three Months Ended June 30, (Decrease) Increase

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

2026 2025 $ % 2026 2025 $ %

(Dollars in millions)

(Dollars in millions) (Dollars in millions)

(Loss) income from continuing operations, net of income taxes $ (85.9) $ (25.6) $ (60.3) (236) % $ (111.3) $ 12.7 $ (124.0) (976) %

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Net Income Attributable to Noncontrolling Interests.

The increase in net income attributable to noncontrolling interests during the three months ended March 31, 2026 compared to the same period in the prior year was primarily driven by income associated with Peabody’s majority-owned Wambo operations in which there is an outside non-controlling interest.

The increase in net income attributable to noncontrolling interests during the three and six months ended June 30, 2026 compared to the same periods in the prior year was primarily driven by income associated with 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 March 31, Decrease to EPS

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

2026 2025 $ % 2026 2025 $ %

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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 122.0 million and 138.7 million for the three months ended March 31, 2026 and 2025, respectively.

Diluted EPS reflects weighted average diluted common shares outstanding of 122.0 million and 121.7 million for the three months ended June 30, 2026 and 2025, respectively, and 122.0 million and 122.3 million for the six months ended June 30, 2026 and 2025, respectively.

Reconciliation of Non-GAAP Financial Measures

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Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the reportable segments’ operating performance, as displayed in the reconciliations below.

Three Months Ended March 31,

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

2026 2025 2026 2025

(Dollars in millions)

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Depreciation, depletion and amortization

107.5 93.4 217.0 185.5

Asset retirement obligation expenses

13.8 13.8 27.4 27.4

Restructuring charges

2.3 3.5 3.4 5.2

Costs related to terminated acquisition 2.3 18.8 5.3 21.2

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Interest expense, net of capitalized interest 12.7 11.1 23.4 22.6

Induced conversion expense 17.2 — 17.2 —

Interest income

(12.1) (13.8) (25.2) (29.2)

Unrealized gains on foreign currency option contracts (0.3) (4.3)

Unrealized losses (gains) on foreign currency option contracts 3.9 (4.1) 3.6 (8.4)

Take-or-pay contract-based intangible recognition

— (0.3) — (0.5)

Income tax (benefit) provision (37.0) (2.7) (53.0) 2.2

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(Dollars in millions)

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$ 953.9 $ 789.4 $ 1,818.6 $ 1,559.6

Unrealized gains on foreign currency option contracts 0.3 4.3

Unrealized (losses) gains on foreign currency option contracts (3.9) 4.1 (3.6) 8.4

Take-or-pay contract-based intangible recognition

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

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

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Adjusted EBITDA Margin per Ton $ 16.92 $ (7.04) $ (0.43) $ 9.13

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

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Adjusted EBITDA Margin per Ton $ 9.12 $ (4.18) $ 2.16 $ 4.69

Six Months Ended June 30, 2026

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

(Amounts in millions, except per ton data)

Tons sold 6.0 4.5 37.6 6.3

Revenue $ 428.1 $ 641.3 $ 513.3 $ 347.7

Total Segment Costs 327.5 665.3 496.7 283.0

Adjusted EBITDA $ 100.6 $ (24.0) $ 16.6 $ 64.7

Revenue per Ton $ 70.81 $ 143.57 $ 13.64 $ 55.54

Costs per Ton 54.17 148.96 13.20 45.20

Adjusted EBITDA Margin per Ton $ 16.64 $ (5.39) $ 0.44 $ 10.34

Six Months Ended June 30, 2025

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

(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

Regulatory Update

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Regulatory Matters - U.S.

National Ambient Air Quality Standards (NAAQS) .

The Clean Air Act (CAA) requires the U.S.

Environmental Protection Agency (EPA) to review national ambient air quality standards every five years to determine whether revisions to current standards are appropriate.

On March 6, 2024, the EPA revised the level of the primary standard for fine particulate matter (PM 2.5), lowering the annual standard from 12.0 µg/m 3 to 9.0 µg/m 3 .

The revised PM 2.5 standard was challenged in the U.S.

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

Circuit) in Kentucky v.

24-1050) and subsequently upheld by that court on June 26, 2026.

Under the CAA, once a NAAQS is revised states are required to take several actions to implement the revised standards.

Such actions could require fossil fuel-fired electric generating units (EGUs) and non-EGUs to install additional emission control technologies or operate in a different manner.

Such actions could potentially increase the cost of utilizing fossil fuels for electric generation and industrial uses.

The EPA is also in the process of reviewing the current ozone NAAQS.

The level of the ozone NAAQS can also affect requirements to install new or improved emission control technologies at fossil fuel-fired EGUs and non-EGU industrial sources.

Mercury and Air Toxic Standards (MATS) .

In 2012, the U.S.

Environmental Protection Agency (EPA) published the final MATS rule, which revised the New Source Performance Standards for nitrogen oxide, sulfur dioxide and fine particulate matter (PM) for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants.

In 2012, the EPA published the final MATS rule, which revised the New Source Performance Standards for nitrogen oxide, sulfur dioxide and fine particulate matter (PM) for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants.

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

On March 6, 2023, the EPA issued a final rule which reaffirmed its determination to regulate coal- and oil-fired electric generating units (EGUs) under Clean Air Act section 112, including the regulation of HAPs from EGUs after considering cost.

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

On May 7, 2024, the EPA finalized a MATS rule which significantly tightened the filterable PM emissions limit for existing coal-fired EGU’s, lowering the standard from 0.030 lb/MMBtu to 0.010 lb/MMBtu for all coal-fired power plants.

This rule was challenged in the U.S.

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

Circuit) in North Dakota v.

The EPA proposed on June 17, 2025 to repeal parts of the final 2024 MATS rule regarding filterable PM standards and revise the mercury standard for existing lignite-fired EGUs.

This rule was finalized on February 24, 2026 (91 Fed.

9088) and became effective on April 27, 2026.

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

The EPA, however, subsequently repealed both the lower filterable PM emission limits and the lower mercury standards for lignite plants.

Reg 9088 (February 24, 2026).

This rule became effective on April 27, 2026.

The rule has been challenged in the U.S.

Court of Appeals for the D.C.

Air Alliance Houston v.

26-1070 (and consolidated case) (D.C.

filed March 30, 2026).

Clean Water Act (CWA) Water Quality Certification Rule .

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District Court for the Western District of Louisiana.

On January 15, 2026, the EPA published proposed revisions to the 2023 rule in the Federal Register , and the EPA announced that it planned to propose and finalize changes later in 2026.

On January 15, 2026, the EPA published proposed revisions to the 2023 rule in the Federal Register , and the EPA announced that it planned to finalize changes later in 2026.

Effluent Limitations Guidelines for the Steam Electric Power Generating Industry .

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

due to the reconsideration process currently ongoing, however (see below), the proceedings are currently being held in abeyance.

If the Eighth Circuit affirms the final rule, it could influence fuel switching or additional coal generating unit retirements by the end of 2034.

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Finally, the EPA is allowing EGUs that discharge to wastewater treatment plants an additional year-and-a-half to seven-and-a-half years to comply with zero-discharge limitations for those same wastestreams.

The Deadline Extensions Rule has been challenged by multiple parties, with the litigation consolidated in the U.S.

Court of Appeals for the Second Circuit.

A motion to transfer the consolidated petitions to the Eighth Circuit is pending.

If the Deadline Extensions Rule is vacated, the 2024 rule’s deadlines could become operative again.

The EPA also issued a No Action Assurance memorandum announcing it will not pursue enforcement actions for certain permit violations by EGUs not yet in compliance with permit requirements related to the 2020 and 2024 rules, if those EGUs satisfy certain conditions.

In parallel, the EPA announced that it plans to propose a Reconsideration Rule in 2026 to revise some of the limitations and standards in the 2024 rule.

On May 18, 2026, the EPA published a proposed rule to clarify applicability of unmanaged combustion residual leachate limitations.

28487 (May 18, 2026).

Rules for Disposal of Coal Combustion Residuals (CCR) from Electric Utilities;

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Finally, on April 9, 2026, the EPA published a proposed rule to amend several provisions governing the disposal of CCR in landfills and surface impoundments and the benefit use for CCR.

SEC Climate-Related Disclosures .

On March 6, 2024, the SEC adopted final rules intended to 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 greenhouse gas (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 Eighth Circuit.

On April 4, 2024, the SEC voluntarily stayed implementation of the final rules pending such judicial review.

On May 29, 2026, the SEC proposed to rescind the final rules, and is accepting comments for 60 days following Federal Register Publication.

Complaints Filed Against “Climate Superfund Laws” and Announced State Actions .

On April 30 and May 1, 2025, respectively, the U.S.

Department of Justice (DOJ) 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.

On May 4, 2026, the DOJ filed a complaint against the state of Minnesota to halt that state’s climate lawsuit against major energy companies with parallels to the Michigan and Hawaii suits.

These complaints allege that existing litigation and state laws interfere with federal law, including the CAA, 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.

Regulatory Matters - Australia

12 unchanged sentences

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 has also generated cash from the sale of non-strategic assets, including coal reserves, coal resources and surface lands, the return of collateral 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, early debt retirements, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, collateral requirements, dividends, share repurchases and selling and administrative expenses.

1 unchanged sentence

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

As of March 31, 2026, the Company’s cash and cash equivalents balances totaled $492.5 million, including approximately $353 million held by U.S.

subsidiaries, approximately $129 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S.

As of June 30, 2026, the Company’s cash and cash equivalents balances totaled $526.3 million, including approximately $420 million held by Australian subsidiaries, approximately $100 million held by U.S.

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.

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in the form of intercompany dividends.

During the three months ended March 31, 2026, no profits from foreign subsidiaries were repatriated.

During the six months ended June 30, 2026, no profits from foreign subsidiaries were repatriated.

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

The Company’s available liquidity decreased from $942.1 million as of December 31, 2025 to $868.2 million as of March 31, 2026.

The Company’s available liquidity increased from $942.1 million as of December 31, 2025 to $959.1 million as of June 30, 2026.

Available liquidity was comprised of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(Dollars in millions)

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Capital Returns to Shareholders

The Company paid dividends of $9.2 million during the three months ended March 31, 2026.

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 included within the surety bond portfolio and the amount of collateral posted in favor of surety providers, which was $479.0 million at March 31, 2026.

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 March 31, 2026.

At March 31, 2026, the Company’s maximum aggregate collateral amount was $504.1 million, which was comprised of $377.7 million in trust accounts and letters of credit of $126.4 million held for the benefit of certain surety providers.

The Company paid dividends of $18.3 million during the six months ended June 30, 2026.

Australian Surety Bond Facilities

On June 12, 2026, certain of the Company’s Australian subsidiaries (collectively, the Australian Surety Bond Facility Obligors), each an indirect subsidiary of PEC, established new Australian dollar-denominated surety bond facilities with an aggregate combined principal amount of $700.0 million Australian dollars in commitments by entering into agreements with surety bond providers (the Australian Surety Bond Facilities).

The Australian Surety Bond Facilities have been established to, among other things, establish a surety bonding facility, primarily to support reclamation bonding requirements, to replace the Australian Surety Bond Facility Obligors’ existing 100% cash collateralized programs.

The surety bond commitments established under the Australian Surety Bond Facilities terminate on June 12, 2031 (the Maturity Date).

Surety bonds issued under the Australian Surety Bond Facilities may be issued with or without an expiration date, but any surety bond that does not have an expiration date or that has an expiration date occurring after the Maturity Date, must be repaid, prepaid in full or otherwise satisfied on or prior to the Maturity Date.

The Australian Surety Bond Facilities contain customary covenants that, among other things and subject to certain exceptions (including compliance with financial ratios), may limit the Australian Surety Bond Facility Obligors and their respective subsidiaries’ ability to incur additional financial indebtedness, make certain distributions or loans, sell or otherwise dispose of assets, enter into certain affiliate transactions, create or incur liens, and enter into mergers or other significant corporate transactions.

The Australian Surety Bond Facilities are secured by substantially all of the assets of the Australian Surety Bond Facility Obligors.

Surety Agreement Termination

On June 12, 2026, the Company terminated that certain Transaction Support Agreement and Surety Resolution Term Sheet, each dated as of November 6, 2020 (as amended, supplemented or otherwise modified to the date hereof, the TSA), by and among the Company, certain subsidiaries of the Company party thereto and certain providers of its surety program (collectively, the Sureties).

In connection with the termination of the TSA, on June 12, 2026, the Company terminated that certain Collateral Agency and Security Agreement, dated as of May 3, 2022 (as amended, supplemented or otherwise modified to the date hereof, the TSA Security Agreement), by and among the Company, certain subsidiaries of the Company party thereto, the Sureties party thereto and Bank of New York Mellon Trust Company, N.A., as collateral agent (the TSA Collateral Agent).

All obligations of the Company to the Sureties and the TSA Collateral Agent, as applicable, under the TSA and the TSA Security Agreement have been satisfied.

The termination of the TSA allowed for the overall reduction of collateral pledged to the Sureties.

Credit Support Facilities

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The agreement was amended on November 3, 2025, to (i) extend the expiration date to December 31, 2030 and (ii) reduce the required minimum cash collateral amount to 102% of the aggregate amount of letters of credit outstanding under the agreement, provided that in the event the Company’s credit rating falls below certain thresholds, the minimum collateral amount shall increase to 103%.

At March 31, 2026, letters of credit of $78.1 million were outstanding under the agreement.

At June 30, 2026, letters of credit of $77.9 million were outstanding under the agreement.

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

At March 31, 2026, guarantees of $218.5 million were issued for which the Company receives a variable deposit rate on the amount of cash collateral posted in support of the facilities, which mature at various dates between 2026 and 2030.

During the second quarter of 2026, the Australian Surety Bond Facilities, as described above, were established, which reduced the utilization of the cash-backed bank guarantee facilities during the three months ended June 30, 2026.

At June 30, 2026, guarantees of $11.8 million were issued for which the Company receives a variable deposit rate on the amount of cash collateral posted in support of the facilities, which mature at various dates between 2026 and 2030.

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 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 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.

The Company established a revolving credit facility by entering into a credit agreement, dated as of January 18, 2024, as amended, (the 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.

On June 9, 2026, the Company amended the Credit Agreement to, among other things, permit the Australian Surety Bond Facilities.

On June 30, 2026, the Company further amended the Credit Agreement to, among other things, (i) increase the revolving commitments under the Credit Agreement from an aggregate principal amount equal to $320.0 million to an aggregate principal amount equal to $400.0 million;

(ii) extend the maturity date of the revolving commitments and any related loans (any such loans, the Revolving Loans) from January 18, 2028 to June 30, 2030;

and (iii) decrease the interest rate applicable to the Revolving Loans from a rate equal to 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 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option, to a rate equal to SOFR plus an applicable margin ranging from 3.25% to 4.00%, depending on the Company’s total net leverage ratio or a base rate plus an applicable margin ranging from 2.25% to 3.00%, at the Company’s option.

After the June 30, 2026 amendment, letters of credit issued under the Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.25% to 4.00% plus a fronting fee equal to 0.125% per annum.

Prior to the amendment, the combined fee was 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 Credit Agreement bears a commitment fee of 0.50% per annum.

As of March 31, 2026, the 2024 Credit Agreement had only been utilized for letters of credit, including $49.2 million outstanding as of March 31, 2026.

During the second quarter of 2026, the Company borrowed and repaid $110.0 million under the revolving credit facility.

At June 30, 2026, the Credit Agreement was only utilized for letters of credit of $58.2 million.

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

“Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $270.8 million at March 31, 2026.

“Financial Instruments and Other Guarantees.” Availability under the revolving credit facility was $341.8 million at June 30, 2026.

The 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.

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

The Company’s total indebtedness as of March 31, 2026 and December 31, 2025 is presented in the table below.

Debt Instrument (defined below, as applicable) March 31, 2026 December 31, 2025

The Company’s total indebtedness as of June 30, 2026 and December 31, 2025 is presented in the table below.

Debt Instrument (defined below, as applicable) June 30, 2026 December 31, 2025

(Dollars in millions)

3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes) $ 78.8 $ 320.0

0.50% Convertible Senior Notes due June 2031 (2031 Convertible Notes)

Finance lease obligations 17.7 20.8

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Long-term debt $ 325.5 $ 321.2

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at March 31, 2026, of approximately $18 million in 2026, $16 million in 2027, $327 million in 2028, and less than $1 million in 2029 and thereafter.

The Company paid cash of $9.9 million during both the three months ended March 31, 2026 and 2025, for interest, net of capitalized interest, related to the Company’s indebtedness and financial assurance instruments.

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at June 30, 2026, of approximately $12 million in 2026, $10 million in 2027, $85 million in 2028, $2 million in both 2029 and 2030, and $251 million thereafter.

The Company paid cash of $33.3 million and $24.1 million during the six months ended June 30, 2026 and 2025, respectively, for interest, net of capitalized interest, related to the Company’s indebtedness and financial assurance instruments.

Partial Repurchase of 2028 Convertible Notes

On June 2, 2026, through a private offering, the Company issued $250.0 million in aggregate principal amount of 2031 Convertible Notes, as described below.

The Company used the proceeds of the offering of the 2031 Convertible Notes, together with available cash, to repurchase $241.2 million aggregate principal amount of its outstanding 2028 Convertible Notes for consideration of $386.8 million.

The repurchase of the existing notes was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20 and Accounting Standards Update 2024-04.

A portion of the consideration in excess of the amount issuable pursuant to the original conversion terms, $17.2 million, was recognized as “Induced conversion expense” in the unaudited condensed consolidated statements of operations during the three and six months ended June 30, 2026.

The remaining excess of the consideration over the carrying value of the repurchased 2028 Convertible Notes on the date of repurchase of $131.1 million, which included unamortized debt issuance costs of $2.7 million, was recorded as “Additional paid-in capital” in the condensed consolidated balance sheets.

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 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms.

The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture, dated as of March 1, 2022 (the 2028 Indenture), between the Company and Wilmington Trust, National Association, as trustee.

During the second quarter of 2026, in connection with the issuance of the 2031 Convertible Notes, the Company used the proceeds therefrom and available cash to repurchase $241.2 million in aggregate principal amount of the 2028 Convertible Notes as discussed above.

The remaining 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 both the fourth quarter of 2025 and the first quarter of 2026, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes.

As a result, the 2028 Convertible Notes were convertible at the option of the holders during the first quarter of 2026, for which no conversion requests were received, and remain convertible during the second quarter of 2026.

It is the Company’s current intent to settle any conversions of the 2028 Convertible Notes through shares of its common stock.

As such, the 2028 Convertible Notes are not classified as a current obligation in the accompanying condensed consolidated balance sheets.

Through May 4, 2026, the Company has not received any conversion requests and does not anticipate receiving any conversion requests in the near term as the market value of the 2028 Convertible Notes exceeds their conversion value.

During the first quarter of 2026, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes.

As a result, the 2028 Convertible Notes were convertible at the option of the holders during the second quarter of 2026, for which no conversion requests were received.

During the second quarter of 2026, 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 2026.

2031 Convertible Notes

On June 2, 2026, through a private offering, the Company issued the 2031 Convertible Notes in the aggregate principal amount of $250.0 million.

The 2031 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture, dated June 2, 2026 (the 2031 Indenture), between the Company and Wilmington Trust, National Association, as trustee.

The Company used the proceeds of the offering of the 2031 Convertible Notes to fund $16.7 million of capped call transactions, as discussed below, and together with available cash, to repurchase $241.2 million of its outstanding 2028 Convertible Notes, as described above.

The 2031 Convertible Notes will mature on June 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms.

The 2031 Convertible Notes will bear interest from June 2, 2026 at a rate of 0.50% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2026.

The 2031 Convertible Notes will be convertible at the option of the holders only in the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2026, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the Measurement Period) in which the trading price per $1,000 principal amount of 2031 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;

(3) upon the occurrence of certain corporate events or distributions on the Company’s common stock;

(4) if the Company calls such 2031 Convertible Notes for redemption;

and (5) at any time from, and including, December 1, 2030 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2031 Indenture.

The initial conversion rate for the 2031 Convertible Notes will be 26.0970 shares of the Company’s common stock per $1,000 principal amount of 2031 Convertible Notes, which represents an initial conversion price of approximately $38.32 per share of the Company’s common stock.

The initial conversion price represents a premium of approximately 32.5% over the U.S.

composite volume weighted average price of Peabody’s common stock from 9:30 a.m.

through 4:00 p.m.

Eastern Daylight Time on May 28, 2026, which was $28.9197 per share.

The conversion rate and conversion price are subject to adjustment under certain circumstances in accordance with the terms of the 2031 Indenture.

If certain corporate events described in the 2031 Indenture occur prior to the maturity date, or the Company delivers a redemption notice (as described below), the conversion rate will be increased for a holder who elects to convert its 2031 Convertible Notes in connection with such corporate event or redemption notice, as the case may be, in certain circumstances.

The Company may not redeem the 2031 Convertible Notes prior to June 5, 2029, except in the event of a cleanup redemption (as defined below).

The Company may redeem the 2031 Convertible Notes in whole or in part (subject to certain limitations), at its option at any time, and from time to time, on or after June 5, 2029 and on or before the 31st scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the 2031 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if (i) the 2031 Convertible Notes are “freely tradable” (as defined in the 2031 Indenture), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date the Company sends the related redemption notice;

and (ii) the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (2) the trading day immediately before the date the Company sends such notice.

However, the Company may not redeem less than all of the outstanding 2031 Convertible Notes unless at least $75 million aggregate principal amount of 2031 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice.

No sinking fund is provided for the 2031 Convertible Notes.

Peabody may redeem for cash all, but not less than all, of the 2031 Convertible Notes at any time if (i) the 2031 Convertible Notes are “freely tradable” (as defined in the 2031 Indenture), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date Peabody sends the related redemption notice;

and (ii) the amount of the 2031 Convertible Notes that remains outstanding is less than 15% of the aggregate principal amount of the 2031 Convertible Notes initially issued under the 2031 Indenture at a redemption price equal to 100% of the principal amount of the 2031 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (a cleanup redemption).

If the Company undergoes a fundamental change (as defined in the 2031 Indenture), noteholders may require the Company to repurchase their 2031 Convertible Notes at a cash repurchase price equal to 100% of the principal amount of the 2031 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

Capped Call Transactions

In connection with the offering of the 2031 Convertible Notes, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions) with certain financial institutions.

The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2031 Convertible Notes prior to May 30, 2030, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted 2031 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price.

The cap price of the Capped Call Transactions will initially be $50.6095 per share, which represents a premium of approximately 75.0% over the U.S.

composite volume weighted average price of the Company’s common stock from 9:30 a.m.

through 4:00 p.m.

Eastern Daylight Time on May 28, 2026 (which was $28.9197 per share), and is subject to certain adjustments under the terms of the Capped Call Transactions.

The Capped Call Transactions will expire over a period of trading days beginning on April 17, 2030.

The Capped Call Transactions are accounted for as equity instruments in “Additional paid-in capital” in the condensed consolidated balance sheet and are not subsequently remeasured as long as they continue to meet the conditions for equity classification.

Accordingly, the premiums paid for the Capped Call Transactions are recorded as a reduction to additional paid-in capital and do not affect the Company’s basic or diluted earnings per share, although they are expected to reduce the potential economic dilution from any conversion of the 2031 Convertible Notes, subject to the cap.

Accounts Receivable Securitization Program

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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 March 31, 2026, the Company had no outstanding borrowings and $66.0 million of letters of credit outstanding under the program.

The Company was not required to post cash collateral under the securitization program at March 31, 2026.

At June 30, 2026, the Company had no outstanding borrowings and $62.0 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, 2026.

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 March 31, 2026.

The following table summarizes the Company’s cash flows for the three months ended March 31, 2026 and 2025, as reported in the accompanying unaudited condensed consolidated financial statements.

Three Months Ended March 31,

The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2026.

The following table summarizes the Company’s cash flows for the six months ended June 30, 2026 and 2025, as reported in the accompanying unaudited condensed consolidated financial statements.

Six Months Ended June 30,

(Dollars in millions)

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Operating Activities.

The decrease in net cash provided by operating activities for the three months ended March 31, 2026 compared to the prior year was driven by lower cash generated from mining operations and a year-over-year decrease in operating cash flow from working capital ($33.8 million).

The decrease in net cash provided by operating activities for the six months ended June 30, 2026 compared to the prior year was driven by lower cash generated from mining operations and a year-over-year decrease in operating cash flow from working capital ($95.1 million), partially offset by the return of $75.8 million of cash collateral during the six months ended June 30, 2026.

Investing Activities.

The increase in net cash used in investing activities for the three months ended March 31, 2026 compared to the prior year was driven by higher net contributions to joint ventures ($17.9 million) and higher capital expenditures ($15.0 million).

The increase in net cash used in investing activities for the six months ended June 30, 2026 compared to the prior year was driven by higher net contributions to joint ventures ($19.4 million) and lower proceeds from disposal of assets ($7.1 million).

These variances were partially offset by lower capital expenditures and payments of capital accruals ($24.2 million).

Financing Activities.

The decrease in net cash used in financing activities for the three months ended March 31, 2026 compared to the same period in the prior year was primarily driven by decreases in distributions to noncontrolling interests ($7.0 million).

The increase in net cash used in financing activities for the six months ended June 30, 2026 compared to the same period in the prior year was driven by higher repayments of long-term debt ($494.1 million), purchases of capped calls ($16.7 million) and payments of debt issuance and other deferred financing costs ($12.5 million).

These variances were partially offset by proceeds from long-term debt ($360.0 million) and decreases in distributions to noncontrolling interests ($7.0 million).

Off-Balance-Sheet Arrangements

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

March 31, 2026

June 30, 2026

Reclamation Support Other Support (1)

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

Not presented in the above table is $811.3 million of restricted cash and collateral which are included in the accompanying condensed consolidated balance sheets at March 31, 2026, as described in Note 12.

Not presented in the above table is $459.8 million of restricted cash and collateral which are included in the accompanying condensed consolidated balance sheets at June 30, 2026, as described in Note 12.

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

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

The restricted cash and collateral balance decreased $32.8 million during the three months ended March 31, 2026 due to a change in the mix of financial instruments used to support the Company’s obligations, partially offset by the impact of foreign currency rate changes.

At March 31, 2026, the Company had total asset retirement obligations of $756.3 million.

The restricted cash and collateral balance decreased $384.3 million during the six months ended June 30, 2026 substantially due to the release of cash collateral as a result of the establishment of the Australian Surety Bond Facilities and the termination of the TSA.

At June 30, 2026, the Company had total asset retirement obligations of $754.3 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 March 31, 2026, the Company’s reclamation bonding requirements were supported by approximately $705 million of restricted cash and other balances serving as collateral.

At June 30, 2026, the Company’s reclamation bonding requirements were supported by $1.2 billion of surety bonds and approximately $355 million of restricted cash and other balances serving as collateral.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates.

At March 31, 2026, the Company identified certain assets with an aggregate carrying value of approximately $60 million in its Other U.S.

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

At June 30, 2026, the Company identified certain assets with an aggregate carrying value of approximately $57 million in its Other U.S.

Thermal reportable 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, 2025.

The Company’s critical accounting policies remain unchanged at March 31, 2026, and there have been no material changes in the Company’s critical accounting estimates.

The Company’s critical accounting policies remain unchanged at June 30, 2026, and there have been no material changes in the Company’s critical accounting estimates.

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis