PEABODY ENERGY CORP

Previous wording

When considering these forward-looking statements, you should keep in mind the cautionary statements in this document and in the Company’s other Securities and Exchange Commission (SEC) filings, including, but not limited to, the more detailed discussion of these factors and other factors that could affect its results contained in Item 1A. “Risk Factors” of Part II of this Quarterly Report on Form 10-Q and Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of Part I of its Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024. These forward-looking statements speak only as of the date on which such statements were made, and the Company undertakes no obligation to update these statements except as required by federal securities laws.

Current wording

When considering these forward-looking statements, you should keep in mind the cautionary statements in this document and in the Company’s other Securities and Exchange Commission (SEC) filings, including, but not limited to, the more detailed discussion of these factors and other factors that could affect its results contained in Item 1A. “Risk Factors” of Part II of this Quarterly Report on Form 10-Q, Item 1A. “Risk Factors” of Part II of its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed with the SEC on August 8, 2024 and Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of Part I of its Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 23, 2024. These forward-looking statements speak only as of the date on which such statements were made, and the Company undertakes no obligation to update these statements except as required by federal securities laws.

Previous wording

Within the global coal industry, supply and demand for its products and the supplies used for mining continue to be impacted by the ongoing Russian-Ukrainian conflict. As future developments related to the Russian-Ukrainian conflict and geopolitical instability in key energy producing regions are unknown, the global coal industry data for the six months ended June 30, 2024 presented herein may not be indicative of their ultimate impacts.

Current wording

Within the global coal industry, supply and demand for its products and the supplies used for mining continue to be impacted by the ongoing Russian-Ukrainian conflict. As future developments related to the Russian-Ukrainian conflict and geopolitical instability in key energy producing regions are unknown, the global coal industry data for the nine months ended September 30, 2024 presented herein may not be indicative of their ultimate impacts.

Previous wording

Within the seaborne metallurgical coal market, coking coal prices have retreated from a high base during the six months ended June 30, 2024. Parts of the global steel market have reported tepid demand and thin profit margins during this period, restricting demand growth for metallurgical coal. In India, steel production was disrupted due to election activities and more recently the onset of the monsoon season; while in China, steel production was mixed with a weak property market slowing demand, partially offset by economic stimulus targeting the real estate sector. Australian high-quality coking coal showed signs of supply improvement during the six months ended June 30, 2024 which has weighed on coking coal prices, however periodic price support has been observed via various supply side disruptions, including rail and port maintenance curtailing exports in Queensland, the restriction of U.S. exports in Baltimore, Maryland and low domestic coal production in China. The June 2024 incident at the Grosvenor Mine in Queensland, Australia has further limited global exports. Despite these constraints, coking coal supply proved sufficient to meet demand during the period. In the PCI segment, prices were initially under pressure early in the year from reduced steel making productivity targets under thin margin conditions, but have since found support from shifting of trade flows from Russian to Australian supply amidst newly announced sanctions. In the coming period, seasonal restocking patterns and ongoing economic stimulus may lend support to metallurgical coal pricing. Overall, the market for metallurgical coal remains finely balanced and exposed to volatility, influenced by the rate of exports from Australia and economic performance in China, India and elsewhere.

Current wording

Within the seaborne metallurgical coal market, coking coal prices have retreated from a high base during the nine months ended September 30, 2024. Parts of the global steel market have reported tepid demand and thin profit margins during this period, restricting demand growth for metallurgical coal. In China, continued weakness in the property sector has contributed to lower domestic steel demand and steel production in 2024 and has also supported increased steel exports. The increased availability of competitively priced Chinese imports has pressured steel margins for steel producers in other countries, although India has recorded year-over-year production growth due to its increased domestic consumption. Meanwhile, global supply of coking coal has been relatively stable during the nine months ended September 30, 2024, and has met global demand despite various disruption events, such as a fire at the Grosvenor Mine in Australia and shipping interruptions at the U.S.’s Baltimore, Maryland port. In the PCI segment, prices were initially under pressure early in the year with a wide discount to coking coal caused in part by reduced steel making productivity targets under thin margin conditions. PCI relativities to coking coal have since improved. In September 2024, increased government stimulus activity in China has supported an uptick in Chinese ferrous futures prices, which has in turn contributed to improved spot pricing for seaborne metallurgical coal. In the coming period, seasonal restocking patterns and ongoing economic stimulus may lend support to metallurgical coal pricing. Overall, the market for metallurgical coal remains finely balanced and exposed to volatility, influenced by the rate of exports from Australia and economic performance in China, India and elsewhere.

Previous wording

Within the seaborne thermal coal market, global thermal coal prices were rangebound during the six months ended June 30, 2024, driven by healthy supply meeting elevated demand in Asian markets. In China, overall total generation demand has been elevated while domestic coal production has declined, which has driven stronger coal import demand year-over-year through the six months ended June 30, 2024. In India, strong growth in coal generation has supported increased import demand, despite elevated domestic coal production. Overall, global thermal coal markets remain turbulent amid ample supply and seasonal demand requirements in the Northern Hemisphere, as well as volatile global natural gas markets.

Current wording

Within the seaborne thermal coal market, global thermal coal prices continued to remain stable during the nine months ended September 30, 2024, driven by healthy supply meeting elevated demand in Asian markets. In China, overall total generation demand has been elevated while domestic coal production has remained relatively flat, which has driven stronger coal import demand year-over-year through the nine months ended September 30, 2024. In India, strong growth in coal generation has supported increased import demand, despite elevated domestic coal production. Looking ahead, global thermal coal markets remain turbulent amid tighter supply ahead of winter restocking requirements in the Northern Hemisphere, as well as volatile global natural gas markets.

Previous wording

In the U.S., overall electricity demand increased approximately 5% year-over-year. Through the six months ended June 30, 2024, electricity generation from thermal coal has increased slightly year-over-year driven by higher overall electricity demand and despite low natural gas prices and stronger renewable generation. Coal’s share of electricity generation has declined to approximately 14% for the six months ended June 30, 2024, while wind and solar’s combined generation share is at 19% and the share of natural gas generation has decreased slightly to 40%. U.S. coal inventories have declined through June 30, 2024, resulting in stockpiles slightly below levels seen at the end of 2023. During the six months ended June 30, 2024, utility consumption of PRB coal was unchanged compared to the prior year period.

Current wording

In the U.S., overall electricity demand increased approximately 3% year-over-year. Through the nine months ended September 30, 2024, electricity generation from thermal coal has decreased year-over-year driven by continued low natural gas prices and stronger renewable generation. Coal’s share of electricity generation has declined to approximately 15% for the nine months ended September 30, 2024, while wind and solar’s combined generation share is at 17% and the share of natural gas generation has remained level at 43%. U.S. coal inventories have declined through September 30, 2024, resulting in stockpiles declining more than 10 million tons below levels seen at the end of 2023. During the nine months ended September 30, 2024, utility consumption of PRB coal has declined compared to the prior year period.

Previous wording

Peabody’s redevelopment of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, continues to advance as planned. The first development coal was mined in June 2024, and a second continuous mine was commissioned in July 2024. The first coal shipments from the Centurion Mine are expected in the fourth quarter of 2024, and the Company is targeting the commencement of longwall production in the first quarter of 2026. Approximately $200 million of the $489 million of capital expenditures to reach longwall production has been completed as of June 30, 2024. The benchmark premium hard coking coal from Centurion is expected to receive a premium price relative to other metallurgical coals.

Current wording

Peabody’s redevelopment of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, continues to advance as planned. Through September 30, 2024, two continuous miners units have been commissioned, the first development coal was produced and the first coal was washed. The first coal shipment from the Centurion Mine is expected in the fourth quarter of 2024, and the Company is targeting the commencement of longwall production in the first quarter of 2026. Approximately $250 million of the $489 million of capital expenditures to reach longwall production has been completed as of September 30, 2024.

Previous wording

In October 2023, the Company filed an insurance claim against applicable insurance policies with combined business interruption and property loss limits of $125 million above a $50 million deductible. During June 2024, the Company reached a settlement with its insurers and various re-insurers and recognized a $109.5 million insurance recovery which the Company included in its results of operations for the three and six months ended June 30, 2024.

Current wording

In October 2023, the Company filed an insurance claim against applicable insurance policies with combined business interruption and property loss limits of $125 million above a $50 million deductible. During June 2024, the Company reached a settlement with its insurers and various re-insurers and recognized a $109.5 million insurance recovery which the Company included in its results of operations during the nine months ended September 30, 2024.

Previous wording

The decrease in income from continuing operations, net of income taxes for the six months ended June 30, 2024 compared to the same period in the prior year ($231.7 million) was driven by lower revenue ($607.2 million) due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year, lower seaborne coal pricing and volume decreases in the U.S. thermal segments. This unfavorable variance was partially offset by a lower tax provision ($132.7 million), the current year insurance recovery related to the 2023 event at the Shoal Creek Mine ($109.5 million), lower operating costs and expenses ($90.5 million) and lower year-over-year provision for losses at the NARM and Shoal Creek Mines ($30.0 million).

Current wording

The decrease in income from continuing operations, net of income taxes for the nine months ended September 30, 2024 compared to the same period in the prior year ($248.0 million) was driven by lower revenue ($598.1 million) due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year, lower seaborne coal pricing and volume decreases in the U.S. thermal segments. This unfavorable variance was partially offset by a lower tax provision ($153.5 million), the current year insurance recovery related to the 2023 event at the Shoal Creek Mine ($109.5 million), lower operating costs and expenses ($48.4 million) and a lower year-over-year provision for losses at the NARM and Shoal Creek Mines ($33.3 million).

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Other U.S. Thermal. Segment revenue increased during the three months ended June 30, 2024 compared to the same period in the prior year due to favorable realized prices ($3.2 million). Segment revenue decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to unfavorable volumes ($69.4 million) resulting from decreased demand driven by low natural gas pricing and mild weather, partially offset by increased sales contract cancellation settlements ($13.1 million).

Current wording

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

Previous wording

Corporate and Other. Segment revenue decreased during the three months ended June 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($40.3 million) as all derivative contracts settled in 2023; offset by favorable results from trading activities ($19.0 million). Segment revenue decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($159.0 million); prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15. “Other Events” to the accompanying unaudited condensed consolidated financial statements; and lower results from trading activities ($12.8 million).

Current wording

Corporate and Other. Segment revenue increased during the three months ended September 30, 2024 compared to the same period in the prior year due to favorable results from trading activities ($16.4 million). Segment revenue decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($159.0 million) as all derivative contracts settled in 2023 and prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15. “Other Events” to the accompanying unaudited condensed consolidated financial statements.

Previous wording

Seaborne Metallurgical. Segment Adjusted EBITDA increased during the three months ended June 30, 2024 compared to the same period in the prior year due to the Shoal Creek insurance recovery ($80.8 million) further discussed in Note 15. “Other Events” in the accompanying unaudited condensed consolidated financial statements and favorable mix variances ($15.4 million) driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, despite the lock outages during 2024. These increases were offset by lower realized prices net of sales price sensitive costs ($41.3 million) and unfavorable operational costs ($24.3 million).

Current wording

Seaborne Metallurgical. Segment Adjusted EBITDA decreased during the three months ended September 30, 2024 compared to the same period in the prior year due to unfavorable operational costs ($42.2 million) and lower realized prices net of sales price sensitive costs ($26.4 million). These decreases were offset by favorable volume ($20.9 million). Segment Adjusted EBITDA decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($164.5 million) and unfavorable operational costs ($92.7 million). These decreases were offset by favorable volume ($104.0 million) driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, despite the lock outages during 2024; and the Shoal Creek insurance recovery ($80.8 million) further discussed in Note 15. “Other Events” in the accompanying unaudited condensed consolidated financial statements

Previous wording

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

Current wording

Powder River Basin. Segment Adjusted EBITDA decreased during the three and nine months ended September 30, 2024 compared to the same periods in the prior year due to increased lease spend ($4.6 million and $10.0 million, respectively), unfavorable volume ($4.0 million and $49.3 million, respectively) and increased overburden removal costs ($3.6 million and $10.9 million, respectively). These decreases were offset by favorable commodity pricing ($7.7 million and $15.6 million, respectively) and lower costs for materials, services, repairs and labor ($6.3 million and $28.5 million, respectively).

Previous wording

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

Current wording

Other U.S. Thermal. Segment Adjusted EBITDA decreased during the three and nine months ended September 30, 2024 compared to the same periods in the prior year due to unfavorable volume ($12.2 million and $52.4 million, respectively), lower realized prices net of sales price sensitive costs ($10.5 million and $11.1 million, respectively) and higher costs for materials, services, repairs and labor ($3.7 million and $10.2 million, respectively). These decreases were offset by favorable mine sequencing ($3.5 million and $16.0 million, respectively) and increased sales contract cancellation settlements ($1.6 million and $14.7 million, respectively).

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Corporate and Other Adjusted EBITDA decreased during the six months ended June 30, 2024 compared to the same period in the prior year due to unfavorable trading results ($25.5 million); prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15. “Other Events” to the accompanying unaudited condensed consolidated financial statements; and the unfavorable net impact of foreign currency rate changes ($5.4 million).

Current wording

Corporate and Other Adjusted EBITDA decreased during the nine months ended September 30, 2024 compared to the same period in the prior year due to prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($19.2 million) as discussed in Note 15. “Other Events” to the accompanying unaudited condensed consolidated financial statements; unfavorable trading results ($11.1 million); and unfavorable variances in Middlemount’s results driven by lower sales volume and pricing. These decreases were partially offset by the favorable net impact of foreign currency rate changes ($11.6 million).

Previous wording

The increases in the weighted-average depletion rate per ton for both the Seaborne Metallurgical and the Other U.S. Thermal segments during the three and six months ended June 30, 2024 compared to the same periods in the prior year reflect the impact of volume and mix variances across the segments.

Current wording

The changes in the weighted-average depletion rate per ton for both the Seaborne Metallurgical and the Other U.S. Thermal segments during the three and nine months ended September 30, 2024 compared to the same periods in the prior year reflect the impact of volume and mix variances across the segments.

Previous wording

Shoal Creek Insurance Recovery - Property Damage. During June 2024, the Company reached a settlement with its insurers and various re-insurers related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 15. “Other Events” in the accompanying unaudited condensed consolidated financial statements. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to total equipment losses recognized at the time of the insurance recovery, which consisted of $28.7 million recognized during the year ended December 31, 2023. The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, is included in Adjusted EBITDA for the three and six months ended June 30, 2024.

Current wording

Shoal Creek Insurance Recovery - Property Damage. During June 2024, the Company reached a settlement with its insurers and various re-insurers related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 15. “Other Events” in the accompanying unaudited condensed consolidated financial statements. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to total equipment losses recognized at the time of the insurance recovery, which consisted of $28.7 million recognized during the year ended December 31, 2023. The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, is included in Adjusted EBITDA for the nine months ended September 30, 2024.

Previous wording

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

Current wording

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

Previous wording

Income Tax Provision. The decrease in the income tax provision during the three and six months ended June 30, 2024 compared to the same periods in the prior year was primarily due to lower pretax income. Refer to Note 8. “Income Taxes” to the accompanying unaudited condensed consolidated financial statements for additional information.

Current wording

Income Tax Provision. The decrease in the income tax provision during the three and nine months ended September 30, 2024 compared to the same periods in the prior year was primarily due to lower pretax income. Refer to Note 8. “Income Taxes” to the accompanying unaudited condensed consolidated financial statements for additional information.

Previous wording

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

Current wording

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

Previous wording

Diluted EPS is commensurate with the changes in results from continuing operations and discontinued operations during that period. Diluted EPS reflects weighted average diluted common shares outstanding of 142.8 million and 159.0 million for the three months ended June 30, 2024 and 2023, respectively, and 143.8 million and 160.2 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

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 141.6 million and 149.9 million for the three months ended September 30, 2024 and 2023, respectively, and 143.1 million and 156.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Numerous legal challenges to the final rule were filed in the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit). Sixteen separate petitions for review were filed, and the challengers include 25 states, utilities, mining companies (including Peabody), labor unions, trade organizations and other groups. The cases were consolidated under the case filed by North Dakota (D.C. Cir. No. 15-1381). Four additional cases were filed seeking review of the EPA’s denial of reconsideration petitions in a final action published in the May 6, 2016 Federal Register entitled “Reconsideration of Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary Sources: Electric Generating Units; Notice of final action denying petitions for reconsideration.” Pursuant to an order of the court, these cases remain in abeyance, subject to requirements for the EPA to file 90-day status reports.

Current wording

Numerous legal challenges to the final rule were filed in the U.S. Court of Appeals for the District of Columbia (D.C. Circuit). Sixteen separate petitions for review were filed, and the challengers include 25 states, utilities, mining companies (including Peabody), labor unions, trade organizations and other groups. The cases were consolidated under the case filed by North Dakota (D.C. Cir. No. 15-1381). Four additional cases were filed seeking review of the EPA’s denial of reconsideration petitions in a final action published in the May 6, 2016 Federal Register entitled “Reconsideration of Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary Sources: Electric Generating Units; Notice of final action denying petitions for reconsideration.” Pursuant to an order of the court, these cases remain in abeyance, subject to requirements for the EPA to file 90-day status reports.

Previous wording

The final rule is subject to numerous legal challenges that have been consolidated in the U.S. Court of Appeals for the Eighth Circuit (Eighth Circuit). If the Eighth Circuit affirms the final rule, as implemented by the EPA and states, it could have a substantial impact on the use of coal and natural gas for the generation of electricity.

Current wording

The final rule is subject to numerous legal challenges that have been consolidated in the D.C. Circuit. Petitioners filed an emergency application for a stay of the rule with the U.S. Supreme Court which was denied in an order issued by the U.S. Supreme Court on October 16, 2024. In a statement respecting this denial, Justices Kavanaugh and Gorsuch expressed the view that the petitioners “have shown a strong likelihood of success on the merits as to at least some of their challenges” but because efforts to comply would not need to be initiated until June 2025, they would be “unlikely to suffer irreparable harm before the Court of Appeals for the D.C. Circuit decides the merits” of the pending litigation. Justice Thomas would have granted the application for a stay; the views of other Justices regarding the merits of the litigation are unknown. If the rule is ultimately affirmed and implemented by the EPA and states, it could have a substantial impact on the use of coal and natural gas for the generation of electricity.

Previous wording

Implementation of the rule for existing sources (accomplished through state implementation plans) was challenged in several U.S. Courts of Appeal, resulting in different court opinions and in requirements being implemented in some states, but stayed in others. On June 27, 2024, the U.S. Supreme Court issued a stay of the rule in 11 states pending the disposition of a petition for review of the rule in the D.C. Circuit and any subsequent timely petition for certiorari filed with and granted by the U.S. Supreme Court.

Current wording

Implementation of the rule for existing sources (accomplished through state implementation plans) was challenged in several U.S. Courts of Appeal, resulting in different court opinions and in requirements being implemented in some states, but stayed in others. On June 27, 2024, the U.S. Supreme Court issued a stay of the rule in 11 states pending the disposition of a petition for review of the rule in the D.C. Circuit and any subsequent timely petition for certiorari filed with and granted by the U.S. Supreme Court. The EPA subsequently issued a policy memorandum on August 5, 2024, that provides an administrative stay of the rule; the D.C. Circuit thereafter issued a partial remand of the rule to allow the EPA to respond to comments regarding the severability of the rule’s provisions.

Previous wording

Regional Haze. The CAA contains a national visibility goal for the “prevention of any future, and the remedying of any existing, impairment of visibility in Class I areas which impairment results from man-made air pollution.” The EPA promulgated comprehensive regulations in 1999 requiring all states to submit plans to address regional haze that could affect 156 national parks and wilderness areas, including requirements for certain sources to install the best available retrofit technology and for states to demonstrate “reasonable progress” towards meeting the national visibility goal. States are required to revise plans every 10 years. On March 29, 2024, the EPA published a proposed consent decree under which deadlines would be established for the EPA to take final action to approve, disapprove or conditionally approve, in whole or in part, state regional haze implementation plans for 34 states (at various dates from June 28, 2024 to December 31, 2026). The EPA subsequently filed a motion to approve the consent judgement in the U.S. District Court for the District of Columbia which remains pending.

Current wording

Regional Haze. The CAA contains a national visibility goal for the “prevention of any future, and the remedying of any existing, impairment of visibility in Class I areas which impairment results from man-made air pollution.” The EPA promulgated comprehensive regulations in 1999 requiring all states to submit plans to address regional haze that could affect 156 national parks and wilderness areas, including requirements for certain sources to install the best available retrofit technology and for states to demonstrate “reasonable progress” towards meeting the national visibility goal. States are required to revise plans every 10 years. On March 29, 2024, the EPA published a proposed consent decree under which deadlines would be established for the EPA to take final action to approve, disapprove or conditionally approve, in whole or in part, state regional haze implementation plans for 34 states (at various dates from June 28, 2024 to December 31, 2026). The EPA subsequently filed a motion to approve the consent judgement in the U.S. District Court for the District of Columbia which was granted.

Previous wording

New South Wales (NSW) Environmental. Under the NSW Environmental Planning and Assessment Act 1979 (EPA Act), environmental planning instruments must be considered when approving a mining project development application. Decision makers review the significance of a resource and the state and regional economic benefits of a proposed coal mine when considering a development application on the basis that it is an element of the “public interest” consideration contained in the relevant legislation. Effective from March 1, 2018, the EPA Act was amended to introduce a number of changes to planning laws in New South Wales. The EPA Act was further amended in June 2018 to revoke a process for modifying development approvals under the former Section 75W of the EPA Act. As a result, new development approvals will need to be obtained unless the proposed project will be substantially the same development as it was when the development approval was last modified under Section 75W, in which case the existing development approval can be modified. If a new development approval is required then this could take additional time to achieve.

Current wording

New South Wales Environmental. Under the NSW Environmental Planning and Assessment Act 1979 (EPA Act), environmental planning instruments must be considered when approving a mining project development application. Decision makers review the significance of a resource and the state and regional economic benefits of a proposed coal mine when considering a development application on the basis that it is an element of the “public interest” consideration contained in the relevant legislation. Effective from March 1, 2018, the EPA Act was amended to introduce a number of changes to planning laws in New South Wales. The EPA Act was further amended in June 2018 to revoke a process for modifying development approvals under the former Section 75W of the EPA Act. As a result, new development approvals will need to be obtained unless the proposed project will be substantially the same development as it was when the development approval was last modified under Section 75W, in which case the existing development approval can be modified. If a new development approval is required then this could take additional time to achieve.

Previous wording

On August 25, 2017, the Biodiversity Conservation Act 2016 (BC Act) commenced in NSW and imposes a revised framework for the assessment of potential impacts on biodiversity that may be caused by a development, such as a proposed mining project. The BC Act requires these potential impacts on biodiversity to be offset in perpetuity, by one or more of the following means: securing land based offsets and retiring biodiversity credits, making a payment into a biodiversity conservation fund or in some cases through mine site ecological rehabilitation. The data collected from the biodiversity impact assessment process is inputted into a new offsets payment calculator in order to determine the amount payable by the proponent to offset the impacts. The proposed development can only proceed once the biodiversity offset obligations have been satisfied. On July 18, 2024, following an independent review of the BC Act, the NSW government announced it would amend the BC Act toreform the biodiversity offsets scheme by introducing anew statutory standard requiring mining proponents to demonstrate how they have genuinely avoided and minimized impacts to biodiversity and removing the option for major mining proponents to meet a credit obligation through a commitment to ecological mine site rehabilitation. When enacted, these and other proposed changes have the potential to affect approval processes for future NSW mining projects.

Current wording

On August 25, 2017, the Biodiversity Conservation Act 2016 (BC Act) commenced in NSW and imposes a revised framework for the assessment of potential impacts on biodiversity that may be caused by a development, such as a proposed mining project. The BC Act requires these potential impacts on biodiversity to be offset in perpetuity, by one or more of the following means: securing land based offsets and retiring biodiversity credits, making a payment into a biodiversity conservation fund or in some cases through mine site ecological rehabilitation. The data collected from the biodiversity impact assessment process is inputted into a new offsets payment calculator in order to determine the amount payable by the proponent to offset the impacts. The proposed development can only proceed once the biodiversity offset obligations have been satisfied. On July 18, 2024, following an independent review of the BC Act, the NSW government announced it would amend the BC Act to reform the biodiversity offsets scheme. On August 13, 2024, the Biodiversity Conservation Amendment (Biodiversity Offsets Scheme) Bill 2024 was introduced into NSW Parliament and, if passed into law, will require mining proponents to demonstrate they have genuinely avoided, minimized and offset impacts to biodiversity. The bill reinforces the current government’s intent that biodiversity offsets are a last resort. Additionally, the bill proposes to replace the current ‘no net loss’ standard for biodiversity with the requirement for proponents to achieve ‘net positive’ biodiversity outcomes. If enacted, these and other proposed changes have the potential to affect approval processes for future NSW mining projects. NSW Parliament is expected to pass the bill by late November 2024.

Previous wording

As of June 30, 2024, the Company’s cash and cash equivalents balances totaled $621.7 million, including approximately $388 million held by U.S. subsidiaries, approximately $217 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the six months ended June 30, 2024, no profits from foreign subsidiaries were repatriated. If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.

Current wording

As of September 30, 2024, the Company’s cash and cash equivalents balances totaled $772.9 million, including approximately $420 million held by U.S. subsidiaries, approximately $336 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the nine months ended September 30, 2024, no profits from foreign subsidiaries were repatriated. If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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 of $721.8 million based upon bonding levels at the effective date of the amendment. This maximum collateral amount will vary prospectively as bonding levels increase or decrease. The amendment extended the agreement through December 31, 2026. In order to maintain the maximum collateral agreement, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter. The minimum liquidity test requires the Company to maintain liquidity at the greater of $400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers, which was $508.6 million at June 30, 2024. The Company must also maintain a maximum net leverage ratio of 1.5 to 1.0, where the numerator consists of its funded debt, net of cash, and the denominator consists of its Adjusted EBITDA for the trailing twelve months. For purposes of calculating the ratio, only 50% of the outstanding principal amount of the Company’s 3.250% Convertible Senior Notes due March 2028 (the 2028 Convertible Notes) is deemed to be funded debt. The Company’s ability to pay dividends and make share repurchases is also subject to the quarterly minimum liquidity test. The Company is in compliance with such requirements at June 30, 2024.

Current wording

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 of $721.8 million based upon bonding levels at the effective date of the amendment. This maximum collateral amount will vary prospectively as bonding levels increase or decrease. The amendment extended the agreement through December 31, 2026. In order to maintain the maximum collateral agreement, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter. The minimum liquidity test requires the Company to maintain liquidity at the greater of $400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers, which was $507.3 million at September 30, 2024. The Company must also maintain a maximum net leverage ratio of 1.5 to 1.0, where the numerator consists of its funded debt, net of cash, and the denominator consists of its Adjusted EBITDA for the trailing twelve months. 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 September 30, 2024.

Previous wording

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029. At June 30, 2024, the bank guarantee facilities were backed by cash of $179.5 million.

Current wording

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029. At September 30, 2024, the bank guarantee facilities were backed by cash of $187.9 million.

Previous wording

As of June 30, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $98.0 million outstanding as of June 30, 2024. These letters of credit support the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees as further described in Note 12. “Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $222.0 million at June 30, 2024.

Current wording

As of September 30, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $98.6 million outstanding as of September 30, 2024. These letters of credit support the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees as further described in Note 12. “Financial Instruments and Other Guarantees.” Availability under the 2024 Credit Agreement was $221.4 million at September 30, 2024.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

During the first and second quarters of 2024, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were not convertible at the option of the holders during the second quarter of 2024, and will not be similarly convertible during the third quarter of 2024.

Current wording

During the first three quarters of 2024, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were not convertible at the option of the holders during the second or third quarters of 2024, and will not be similarly convertible during the fourth quarter of 2024.