PEABODY ENERGY CORP

(1)Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Peabody Energy Corporation (PEC) and its affiliates. The Company, or Peabody, are used interchangeably to refer to Peabody Energy Corporation, to Peabody Energy Corporation and its subsidiaries, or to such subsidiaries, as appropriate to the context. Interests in subsidiaries controlled by the Company are consolidated with any outside stockholder interests reflected as noncontrolling interests, except when the Company has an undivided interest in an unincorporated joint venture. In those cases, the Company includes its proportionate share in the assets, liabilities, revenue and expenses of the jointly controlled entities within each applicable line item of the consolidated financial statements. All intercompany transactions, profits and balances have been eliminated in consolidation.

Description of Business

The Company is engaged in the mining of thermal coal for sale primarily to electric utilities and industrial facilities and metallurgical coal for sale to steel producers. The Company’s mining operations are located in the United States (U.S.) and Australia, including an equity-affiliate mining operation in Australia. The Company’s other commercial activities include trading and brokerage activities, managing its coal reserves and resources and real estate holdings and supporting the development of clean coal technologies. On November 21, 2024, Peabody entered into a partnership with an unrelated renewable energy company, to advance renewable energy projects by repurposing reclaimed land previously used for mining, including certain reclaimed mining land held by the Company.

Newly Adopted Accounting Standards

Segments. In November 2023, Accounting Standards Update (ASU) 2023-07 was issued, which requires public entities to provide in interim periods, following adoption, all disclosures about a reportable segment’s profit or loss that are currently required annually; disclose significant segment expense categories and amounts that are easily computable from the management reports that are regularly provided to the chief operating decision maker (CODM); disclose how the CODM uses each reported measure to assess performance and allocate resources; and disclose the title of the position of the individual identified as the CODM. The Company adopted the amendments effective December 31, 2024, and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements. The adoption of this ASU impacted its disclosures in Note 22. “Segment and Geographic Information,” with no impacts to its consolidated results of operations, cash flows and financial condition.

Accounting Standards Not Yet Implemented

Income Taxes. In December 2023, ASU 2023-09 was issued, which requires public entities to disclose more information primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated results of operations, cash flows and financial condition.

Expense Disaggregation. In November 2024, ASU 2024-03 was issued, which requires public entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated results of operations, cash flows and financial condition.

Induced Conversions of Convertible Debt. In November 2024, ASU 2024-04 was issued, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in this ASU affect entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The Company is required to adopt the amendments for fiscal years beginning after December 15, 2025 and interim reporting periods within those periods. The amendments should be applied prospectively, with a retrospective option. Early adoption is permitted. The Company will apply this guidance upon its adoption, as applicable.

Revenue

The majority of the Company’s revenue is derived from the sale of coal under long-term coal supply agreements (those with initial terms of one year or longer and which often include price reopener and/or extension provisions) and contracts with terms of less than one year, including sales made on a spot basis. The Company’s revenue from coal sales is realized and earned when control passes to the customer. Under the typical terms of the Company’s coal supply agreements, title and risk of loss transfer to the customer at the mine or port, where coal is loaded to the transportation sources that serve the Company’s mines. The Company incurs certain “add-on” taxes and fees on coal sales. Reported coal sales include taxes and fees charged by various federal and state governmental bodies and the freight charged on destination customer contracts.

The Company’s seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of the thermal and metallurgical coal sold within Australia. Generally, revenue from individual countries vary year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. A majority of these sales are executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically. Industry commercial practice, and the Company’s typical practice, is to negotiate pricing for seaborne thermal coal contracts on an annual, spot or index basis and seaborne metallurgical coal contracts on a quarterly, spot or index basis. In the case of periodically negotiated pricing, the Company may deliver coal under provisional pricing until a final agreed-upon price is determined. Variable consideration resulting from provisional pricing arrangements is recognized based on the Company’s best estimate of the amount expected to be received at the time control is transferred to the customer that is not expected to result in a material reversal of revenue.

The Company’s U.S. thermal operating platform primarily sells thermal coal to electric utilities in the U.S. under long-term contracts, with a portion sold into the seaborne markets as conditions warrant. A significant portion of the coal production from the U.S. thermal operating segments is sold under existing long-term supply agreements. Certain customers of those segments utilize long-term sales agreements in recognition of the importance of reliability, service and predictable coal prices to their operations. The terms of coal supply agreements result from competitive bidding and extensive negotiations with customers. Consequently, the terms of those agreements may vary in many respects, including price adjustment features, price reopener terms, coal quality requirements, quantity parameters, permitted sources of supply, treatment of environmental constraints, extension options, force majeure and termination and assignment provisions.

Contract pricing is set forth on a per ton basis, and revenue is generally recorded as the product of price and volume delivered. Many of the Company’s coal supply agreements contain provisions that permit the parties to adjust the contract price upward or downward at specified times. These contract prices may be adjusted based on inflation or deflation and/or changes in the factors affecting the cost of producing coal, such as taxes, fees, royalties and changes in the laws regulating the mining, production, sale or use of coal. In a limited number of contracts, failure of the parties to agree on a price under those provisions may allow either party to terminate the contract. The Company sometimes experiences a reduction in coal prices in new long-term coal supply agreements replacing some of its expiring contracts. Coal supply agreements also typically contain force majeure provisions allowing temporary suspension of performance by the Company or the customer during the duration of specified events beyond the control of the affected party. Most of the coal supply agreements contain provisions requiring the Company to deliver coal meeting quality thresholds for certain characteristics such as Btu, sulfur content, ash content, grindability and ash fusion temperature. Failure to meet these specifications could result in economic penalties, including price adjustments, the rejection of deliveries or termination of the contracts. Moreover, some of these agreements allow the Company’s customers to terminate their contracts in the event of changes in regulations affecting the industry that restrict the use or type of coal permissible at the customer’s plant or increase the price of coal beyond specified limits.

Additional revenue may include gains and losses related to mark-to-market adjustments from economic hedge activities intended to hedge future coal sales, revenue from customer contract-related payments and other insignificant items including royalties related to coal lease agreements, sales agency commissions, farm income and property and facility rentals. Royalty income generally results from the lease or sublease of mineral rights to third parties, with payments based upon a percentage of the selling price or an amount per ton of coal produced.

Discontinued Operations

The Company classifies items within discontinued operations in the consolidated financial statements when the operations and cash flows of a particular component of the Company have been (or will be) eliminated from the ongoing operations of the Company as a result of a disposal (by sale or otherwise) and represents a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.

Discontinued operations include certain former Seaborne Thermal and Other U.S. Thermal segment assets that have ceased production and other previously divested legacy operations, including Patriot Coal Corporation and certain of its wholly-owned subsidiaries (Patriot).

On August 8, 2023, the Company entered into a settlement agreement with the U.S. Department of Labor to resolve a liability dispute regarding the federal black lung claims of Patriot. In accordance with the settlement agreement, the Company paid $72.0 million to settle the Patriot federal black lung claims, with the exception of approximately $4.2 million of certain claims for attorney’s fees and additional compensation due to claimants not paid during appeal. As a result of the settlement, the Company recognized a $3.9 million gain within “(Loss) income from discontinued operations, net of income taxes” during the year ended December 31, 2023.

Assets and Liabilities Held for Sale

The Company classifies assets and liabilities (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the disposal group; the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated; the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond the Company's control extend the period of time required to sell the disposal group beyond one year; the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a disposal group until the date of sale. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the disposal group at the time it was initially classified as held for sale.

Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group, if material, in the line items assets held for sale and liabilities held for sale in the consolidated balance sheets.

Cash and Cash Equivalents

Cash and cash equivalents are stated at cost, which approximates fair value. Cash equivalents consist of highly liquid investments with original maturities of three months or less.

Accounts Receivable

The timing of revenue recognition, billings and cash collections results in accounts receivable from customers. Customers are invoiced as coal is shipped or at periodic intervals in accordance with contractual terms. Invoices typically include customary adjustments for the resolution of price variability related to prior shipments, such as coal quality thresholds. Payments are generally received within thirty days of invoicing.

Inventories

Coal is reported as inventory at the point in time the coal is extracted from the mine. Raw coal represents coal stockpiles that may be sold in current condition or may be further processed prior to shipment to a customer. Saleable coal represents coal stockpiles which require no further processing prior to shipment to a customer.

Coal inventory is valued at the lower of average cost or net realizable value. Coal inventory costs include labor, supplies, equipment (including depreciation thereto) and operating overhead and other related costs incurred at or on behalf of the mining location. Net realizable value considers the projected future sales price of the particular coal product, less applicable selling costs and, in the case of raw coal, estimated remaining processing costs. The valuation of coal inventory is subject to several additional estimates, including those related to ground and aerial surveys used to measure quantities and processing recovery rates.

Materials and supplies inventory is valued at the lower of average cost or net realizable value, less a reserve for obsolete or surplus items. This reserve incorporates several factors, such as anticipated usage, inventory turnover and inventory levels.

Property, Plant, Equipment and Mine Development

Property, plant, equipment and mine development are recorded at cost. Interest costs applicable to major asset additions are capitalized during the construction period. Capitalized interest for the year ended December 31, 2024 was $5.8 million. There wasno capitalized interest in 2023 or 2022. Expenditures which extend the useful lives of existing plant and equipment assets are capitalized. Maintenance and repairs are charged to operating costs as incurred. Costs incurred to develop coal mines or to expand the capacity of operating mines are capitalized. Maintenance and repair costs incurred to maintain current production capacity at a mine are charged to operating costs as incurred. Costs to acquire computer hardware and the development and/or purchase of software for internal use are capitalized and depreciated over the estimated useful lives.

Coal reserves and resources are recorded at cost, or at fair value in the case of nonmonetary exchanges of coal reserves and resources or business acquisitions.

Depletion of coal reserves and resources and amortization of advance royalties are computed using the units-of-production method utilizing expected recoverable tons (as adjusted for recoverability factors) in the depletion base. Mine development costs are principally amortized over the estimated lives of the mine using the straight-line method. Depreciation of plant and equipment is computed using the straight-line method over the shorter of the asset’s estimated useful life or the life of the mine. At December 31, 2024, the maximum estimated remaining life for any of the Company’s mines was 29 years. As such, theestimated useful lives of the building and improvements and machinery and equipment asset categories range from 1 to 29 years. The estimated life of leasehold improvements is the shorter of useful life or remaining life of the lease.

The Company leases coal reserves under agreements that require royalties to be paid as the coal is sold. Certain agreements also require minimum annual royalties to be paid regardless of the amount of coal mined during the year. Total royalty expense was $370.0 million, $448.3 million and $450.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

A substantial amount of the coal mined by the Company is produced from mineral reserves leased from the owner. One of the major lessors is the U.S. government, from which the Company leases substantially all of the coal it mines in Wyoming under terms set by Congress and administered by the U.S. Bureau of Land Management. These leases are generally for an initial term often years but may be extended by diligent development and mining of the reserves until all economically recoverable reserves are depleted. The Company has met the diligent development requirements for substantially all of these federal leases either directly through production, by including the lease as a part of a logical mining unit with other leases upon which development has occurred or by paying an advance royalty in lieu of continued operations. Annual production on these federal leases must total at least 1.0% of the leased reserve or the original amount of coal in the entire logical mining unit in which the leased reserve resides. In addition, royalties are payable monthly at a rate of 12.5% of the gross realization from the sale of the coal mined using surface mining methods and at a rate of 8.0% of the gross realization for coal produced using underground mining methods.

The remainder of the leased coal is generally leased from state governments, land holding companies and various individuals. The duration of these leases varies greatly. Typically, the lease terms are automatically extended as long as active mining continues. Royalty payments are generally based upon a specified rate per ton or a percentage of the gross realization from the sale of the coal.

Mining and exploration in Australia is generally conducted under leases, licenses or permits granted by the relevant state government. Mining and exploration licenses and their associated environmental protection approvals (granted by the state government, and in some cases also the federal government) contain conditions relating to such matters as minimum annual expenditures, environmental compliance, protection of flora and fauna, restoration and rehabilitation. Royalties are paid to the state government as a percentage of the sales price (less certain allowable deductions in some cases). Generally, landowners do not own the mineral rights or have the ability to grant rights to mine those minerals. These rights are retained by the state government. Compensation is often payable to landowners, occupiers and Aboriginal traditional owners with residual native title rights and interests for the loss of access to the land from the proposed mining activities. The amount and type of compensation and the ability to proceed to grant of a mining tenement may be determined by agreement or court determination, as provided by law.

Leases

The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. For the purpose of calculating such present values, lease payments include components that vary based upon an index or rate, using the prevailing index or rate at the commencement date, and exclude components that vary based upon other factors. As most of its leases do not contain a readily determinable implicit rate, the Company uses its incremental borrowing rate at commencement to determine the present value of lease payments. The Company does not separate lease components (i.e., fixed payments including rent, real estate taxes and insurance costs) from non-lease components (i.e., common-area maintenance) and recognizes them as a single lease component for the majority of asset classes. Variable lease payments not included within lease contracts are expensed as incurred. The Company's leases may include options to extend or terminate the lease, and such options are reflected in the term when their exercise is reasonably certain. Lease expense is recognized on a straight-line basis over the lease term.

Equity Investments

The Company applies the equity method to investments when it has the ability to exercise significant influence over the operating and financial policies of the joint venture. Investments accounted for under the equity method are initially recorded at cost and any difference between the cost of the Company’s investment and the underlying equity in the net assets of the joint venture at the investment date is amortized over the lives of the related assets that gave rise to the difference. The Company’s pro-rata share of the operating results of joint ventures and basis difference amortization is reported in the consolidated statements of operations in “Income from equity affiliates.” Similarly, the Company’s pro-rata share of the cumulative foreign currency translation adjustment of its equity method investments whose functional currency is not the U.S. dollar is reported in the consolidated balance sheets as a component of “Accumulated other comprehensive income,” with periodic changes thereto reflected in the consolidated statements of comprehensive income. With respect to cash flows attributable to its equity investments, the Company applies the cumulative earnings approach, in which distributions received are considered returnson investment and are classified as cash inflows from operating activities unless the Company’s cumulative distributions received less distributions received in prior periods that were determined to be returnsof investment exceed the cumulative equity in earnings recognized by the Company (as adjusted for amortization of basis differences). When such an excess occurs, current-period distributions up to this excess are considered returnsof investment and are classified as cash inflows from investing activities.

The Company monitors its equity method investments for circumstances that indicate that the carrying value of the investment may not be recoverable and are determined to be other than temporary. Examples of such indicators include a sustained history of operating losses and adverse changes in earnings and cash flow outlook. In the absence of quoted market prices for an investment, discounted cash flow projections are used to assess fair value, the underlying assumptions to which are generally considered unobservable Level 3 inputs under the fair value hierarchy. If the fair value of an investment is determined to be below its carrying value and that loss in fair value is deemed other than temporary, an impairment loss is recognized. No such impairment losses were recorded in any period presented.

Asset Retirement Obligations

The Company’s asset retirement obligation (ARO) liabilities primarily consist of spending estimates for surface land reclamation and support facilities at both surface and underground mines in accordance with applicable reclamation laws and regulations in the U.S. and Australia as defined by each mining permit. Asset retirement obligations are determined for each mine using various estimates and assumptions including, among other items, estimates of disturbed acreage as determined from engineering data and estimates of future costs to reclaim the disturbed acreage.

The Company estimates its ARO liabilities for final reclamation and mine closure based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. Spending estimates are escalated for inflation and then discounted at the credit-adjusted, risk-free rate. The Company records an ARO asset associated with the discounted liability for final reclamation and mine closure. The obligation and corresponding asset are recognized in the period in which the liability is incurred. The ARO asset is amortized on the units-of-production method over its expected life and the ARO liability is accreted to the projected spending date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free rate.

Contingencies

From time to time, the Company is subject to legal and environmental matters related to its continuing and discontinued operations and certain historical, non-coal producing operations. In connection with such matters, the Company is required to assess the likelihood of any adverse judgments or outcomes, as well as potential ranges of probable losses.

A determination of the amount of reserves required for these matters is made after considerable analysis of each individual issue. The Company accrues for legal and environmental matters within “Operating costs and expenses” when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with Accounting Standards Codification 450, “Contingencies.” The Company provides disclosure surrounding loss contingencies when it believes that it is at least reasonably possible that a material loss may be incurred or an exposure to loss in excess of amounts already accrued may exist. Adjustments to contingent liabilities are made when additional information becomes available that affects the amount of estimated loss, which information may include changes in facts and circumstances, changes in interpretations of law in the relevant courts, the results of new or updated environmental remediation cost studies and the ongoing consideration of trends in environmental remediation costs.

Accrued contingent liabilities exclude claims against third parties and are not discounted. The current portion of these accruals is included in “Accounts payable and accrued expenses” and the long-term portion is included in “Other noncurrent liabilities” in the consolidated balance sheets. In general, legal fees related to environmental remediation and litigation are charged to expense. The Company includes the interest component of any litigation-related penalties within “Interest expense, net of capitalized interest” in the consolidated statements of operations.

The Company applies a loss recovery approach for contingent gains related to contingent consideration. Any consideration is recognized when the contingency is resolved and the consideration is realizable and collection is probable.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the temporary difference between the consolidated financial carrying amounts of existing assets and liabilities and their respective tax bases and consideration of operating loss and tax credit carryforwards. Deferred income taxes are measured using enacted rates in effect for the year in which temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Valuation allowances are provided to reduce deferred tax assets to the amount that will be more likely than not realized. The Company makes judgments and estimates regarding the amount and timing of the reversal of taxable temporary differences, the impact of tax planning strategies and expected future taxable income.

The Company recognizes the tax benefit from uncertain tax positions when it is more likely than not the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made. Tax-related interest and penalties are classified as a component of income tax expense.

Postretirement Health Care and Life Insurance Benefits

The Company accounts for postretirement benefits other than pensions by accruing the costs of benefits to be provided over the employees’ period of active service. These costs are determined on an actuarial basis. The Company’s consolidated balance sheets reflect the accumulated postretirement benefit obligations of its postretirement benefit plans. The Company accounts for changes in its postretirement benefit obligations as a settlement when an irrevocable action has been effected that relieves the Company of its actuarially-determined liability to individual plan participants and removes substantial risk surrounding the nature, amount and timing of the obligation’s funding and the assets used to effect the settlement. The Company records amounts attributable to actuarial valuation changes currently in earnings rather than recording such amounts within accumulated other comprehensive income and amortizing to expense over applicable time periods. See Note 13. “Postretirement Health Care and Life Insurance Benefits” for information related to postretirement benefits.

Pension Plans

The Company sponsors non-contributory defined benefit pension plans accounted for by accruing the cost to provide the benefits over the employees’ period of active service. These costs are determined on an actuarial basis. The Company’s consolidated balance sheets reflect the funded status of the defined benefit pension plans. The Company records amounts attributable to actuarial valuation changes currently in earnings rather than recording such amounts within accumulated other comprehensive income and amortizing to expense over applicable time periods. See Note 14. “Pension and Savings Plans” for information related to pension plans.

Restructuring Activities

From time to time, the Company initiates restructuring activities in connection with its repositioning efforts to appropriately align its cost structure or optimize its coal production relative to prevailing market conditions. Costs associated with restructuring actions can include the impact of early mine closures, voluntary and involuntary workforce reductions, office closures and other related activities. Costs associated with restructuring activities are recognized in the period incurred.

Included as a component of “Restructuring charges” in the Company’s consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 were aggregate restructuring charges of $4.4 million, $3.3 million and $2.9 million, respectively, primarily associated with voluntary and involuntary workforce reductions. As of December 31, 2024, a $3.4 million accrual for restructuring charges remained in “Accounts payable and accrued expenses,” which is expected to be paid during 2025.

Derivatives

The Company recognizes at fair value all contracts meeting the definition of a derivative as assets or liabilities in the consolidated balance sheets, with the exception of certain sales contracts for which the Company has elected to apply a normal purchases and normal sales exception.

With respect to derivatives used in hedging activities, the Company assesses at hedge inception whether such derivatives are highly effective at offsetting the changes in the anticipated exposure of the hedged item. The change in the fair value of derivatives designated as a cash flow hedge is recorded in “Accumulated other comprehensive income” in the consolidated balance sheets until the hedged transaction impacts reported earnings, at which time any gain or loss is reclassified to earnings. If the hedge ceases to qualify for hedge accounting, the Company prospectively recognizes changes in the fair value of the instrument in earnings in the period of the change. Gains or losses from derivative financial instruments designated as fair value hedges are recognized immediately in earnings, along with the offsetting gain or loss related to the underlying hedged item.

The Company’s asset and liability derivative positions are offset on a counterparty-by-counterparty basis if the contractual agreement provides for the net settlement of contracts with the counterparty in the event of default or termination of any one contract.

Non-derivative contracts and derivative contracts for which the Company has elected to apply the normal purchases and normal sales exception are accounted for on an accrual basis.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting. The acquisition method requires the Company to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items.

Asset Acquisitions

The Company recognizes the obligation for contingent consideration in asset acquisitions as an adjustment to the cost basis of the assets acquired if and when the contingency is resolved and the consideration is paid or becomes payable.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets held and used in operations for impairment as events and changes in circumstances indicate that the carrying amount of such assets might not be recoverable. Factors that would indicate potential impairment to be present include, but are not limited to, a sustained history of operating or cash flow losses, an unfavorable change in earnings and cash flow outlook, prolonged adverse industry or economic trends and a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. The Company generally does not view short-term declines in thermal and metallurgical coal prices as an indicator of impairment for conducting impairment tests because of historic price volatility. However, the Company generally views a sustained trend of depressed coal pricing (for example, over periods exceeding one year) as a potential indicator of impairment. Because of the volatile and cyclical nature of coal prices and demand, it is reasonably possible that coal prices may decrease and/or fail to improve in the near term, which, absent sufficient mitigation such as an offsetting reduction in the Company’s operating costs, may result in the need for future adjustments to the carrying value of its long-lived mining assets and mining-related investments.

Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. For its active mining operations, the Company generally groups such assets at the mine level, or the mining complex level for mines that share infrastructure. For its development and exploration properties and portfolio of surface land and coal reserve and resource holdings, the Company considers several factors to determine whether to evaluate those assets individually or on a grouped basis for purposes of impairment testing. Such factors include geographic proximity to one another, the expectation of shared infrastructure upon development based on future mining plans and whether it would be most advantageous to bundle such assets in the event of sale to a third party.

When indicators of impairment are present, the Company evaluates its long-lived assets for recoverability by comparing the estimated undiscounted cash flows expected to be generated by those assets under various assumptions to their carrying amounts. If such undiscounted cash flows indicate that the carrying value of the asset group is not recoverable, impairment losses are measured by comparing the estimated fair value of the asset group to its carrying amount. As quoted market prices are unavailable for the Company’s individual mining operations, fair value is determined through the use of an expected present value technique based on the income approach, except for non-strategic coal reserves, coal resources, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning. In those cases, a market approach is utilized based on the most comparable market multiples available. The estimated future cash flows and underlying assumptions used to assess recoverability and, if necessary, measure the fair value of the Company’s long-lived mining assets are derived from those developed in connection with the Company’s planning and budgeting process. The Company believes its assumptions to be consistent with those a market participant would use for valuation purposes. The most critical assumptions underlying the Company’s projections and fair value estimates include those surrounding future tons sold, coal prices for unpriced coal, production costs (including costs for labor, commodity supplies and contractors), transportation costs, foreign currency exchange rates and a risk-adjusted, cost of capital (all of which generally constitute unobservable Level 3 inputs under the fair value hierarchy), in addition to market multiples for non-strategic coal reserves, coal resources, surface lands and undeveloped coal properties excluded from the Company’s long-range mine planning (which generally constitute Level 2 inputs under the fair value hierarchy).

Refer to Note 3. “Asset Impairment” for details regarding impairment charges related to long-lived assets of $9.5 million recognized during the year ended December 31, 2022. There wereno impairment charges related to long-lived assets during the years ended December 31, 2024 or 2023.

Fair Value

For assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements, the Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Foreign Currency

Functional currency is determined by the primary economic environment in which an entity operates, which for the Company’s foreign operations is generally the U.S. dollar because sales prices in international coal markets and the Company’s sources of financing for those operations are denominated in that currency. Accordingly, substantially all of the Company’s consolidated foreign subsidiaries utilize the U.S. dollar as their functional currency. Monetary assets and liabilities are remeasured at year-end exchange rates while non-monetary items are remeasured at historical rates. Income and expense accounts are remeasured at the average rates in effect during the year, except for those expenses related to balance sheet amounts that are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement related to tax balances are included as a component of “Income tax provision (benefit),” while all other remeasurement gains and losses are included in “Operating costs and expenses” in the consolidated statements of operations. The total impact of foreign currency remeasurement on the consolidated statements of operations was a net loss of $32.3 million for the year ended December 31, 2024 and net gains of $5.3 million and $2.7 million for the years ended December 31, 2023 and 2022, respectively.

The Company owns a 50% equity interest in Middlemount Coal Pty Ltd. (Middlemount), which owns the Middlemount Mine in Queensland, Australia. Middlemount utilizes the Australian dollar as its functional currency. Accordingly, the assets and liabilities of that equity investee are translated to U.S. dollars at the year-end exchange rate and income and expense accounts are translated at the average rate in effect during the year. The Company’s pro-rata share of the translation gains and losses of the equity investee are recorded as a component of “Accumulated other comprehensive income” in the consolidated balance sheets. Australian dollar denominated stockholder loans to the Middlemount Mine, which are long term in nature, are considered part of the Company’s net investment in that operation. Accordingly, foreign currency gains or losses on those loans are recorded as a component of foreign currency translation adjustment. The Company recorded a net loss from foreign currency translation of $4.3 million for year ended December 31, 2024, a net gain of $0.9 million for the year ended December 31, 2023 and a net loss of $1.6 million for the year ended December 31, 2022.

Share-Based Compensation

The Company accounts for share-based compensation at the grant date fair value of awards and recognizes the related expense over the service period of the awards. See Note 16. “Share-Based Compensation” for information related to share-based compensation.

Exploration and Drilling Costs

Exploration expenditures are charged to operating costs as incurred, including costs related to drilling and study costs incurred to convert or upgrade mineral resources to reserves.

Advance Stripping Costs

Pre-production. At existing surface operations, additional pits may be added to increase production capacity in order to meet customer requirements. These expansions may require significant capital to purchase additional equipment, expand the workforce, build or improve existing haul roads and create the initial pre-production box cut to remove overburden (that is, advance stripping costs) for new pits at existing operations. If these pits operate in a separate and distinct area of the mine, the costs associated with initially uncovering coal (that is, advance stripping costs incurred for the initial box cuts) for production are capitalized and amortized over the life of the developed pit consistent with coal industry practices.

Post-production. Advance stripping costs related to post-production are expensed as incurred. Where new pits are routinely developed as part of a contiguous mining sequence, the Company expenses such costs as incurred. The development of a contiguous pit typically reflects the planned progression of an existing pit, thus maintaining production levels from the same mining area utilizing the same employee group and equipment.

Use of Estimates in the Preparation of the Consolidated Financial Statements

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP). In doing so, estimates and assumptions are made that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates are based on historical experience and on various other assumptions deemed reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The Company’s actual results may differ materially from these estimates. Significant estimates inherent in the preparation of these consolidated financial statements include, but are not limited to, accounting for sales and cost recognition, postretirement benefit plans, environmental receivables and liabilities, asset retirement obligations, evaluation of long-lived assets for impairment, income taxes including deferred tax assets, fair value measurements and contingencies.

(2)Revenue Recognition

Disaggregation of Revenue

Revenue by product type and market is set forth in the following tables. With respect to its seaborne reportable segments, the Company classifies as “Export” certain revenue from domestically-delivered coal under contracts in which the price is derived on a basis similar to export contracts.

(1)Corporate and Other includes the following:

(2) Includes revenue from arrangements such as customer contract-related payments associated with volume shortfalls; royalties related to coal lease agreements; sales agency commissions; farm income; property and facility rentals; and revenue related to the Company’s assignment of rights to its excess port and rail capacity.

(3)Includes revenue recognized upon the physical sale of coal purchased from the Company’s operating segments and sold to customers through the Company’s coal trading business, including as part of settling certain derivative contracts. Primarily represents the difference between the price contracted with the customer and the price allocated to the operating segment.

Committed Revenue from Contracts with Customers

The Company expects to recognize revenue subsequent to December 31, 2024 of approximately $3.6 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at December 31, 2024. Approximately 51% of such amount is expected to be recognized over the next twelve months and the remainder thereafter. Actual revenue related to such contracts may differ materially for various reasons, including price adjustment features for coal quality and cost escalations, volume optionality provisions and potential force majeure events. This estimate of future revenue does not include any revenue related to contracts with variable prices per ton that cannot be reasonably estimated, such as the majority of seaborne metallurgical and seaborne thermal coal contracts where pricing is negotiated or settled quarterly or annually.

Accounts Receivable

“Accounts receivable, net” at December 31, 2024 and 2023 consisted of the following:

None of the above receivables included allowances for credit losses at December 31, 2024 or 2023. No charges for credit losses were recognized during the years ended December 31, 2024, 2023 or 2022.

(3)Asset Impairment

No asset impairment charges were recognized during the year ended December 31, 2024. During the year ended December 31, 2023, the Company recognized impairment charges of $2.0 million related to the fair value of an investment in equity securities. During the year ended December 31, 2022, the Company recognized impairment charges of $9.5 million related to the sale of certain land interests in Australia and $1.7 million related to the fair value of an investment in equity securities.

The Company identified certain assets with an aggregate carrying value of approximately $208 million at December 31, 2024 in its Other U.S. Thermal segment whose recoverability is most sensitive to customer concentration risk.

(4)Inventories

“Inventories, net” as of December 31, 2024 and 2023 consisted of the following:

Materials and supplies inventories, net presented above have been shown net of reserves of $3.5 million and $7.2 million as of December 31, 2024 and 2023, respectively.

(5)Equity Method Investments

The Company’s equity method investments include its interests in Middlemount, R3 Renewables LLC (R3), R3 Renewables II LLC (R3 II) and certain other equity method investments.

The table below summarizes the book value of those investments, which are reported in “Investments and other assets” in the consolidated balance sheets, and the related “Income from equity affiliates”:

Middlemount

The Company receivedno cash payments from Middlemount during the years ended December 31, 2024 and 2023. The Company received cash payments from Middlemount of $168.4 million during the year ended December 31, 2022.

During the years ended December 31, 2024, 2023 and 2022, respectively, Middlemount generated revenue of approximately $229 million, $219 million and $441 million (on a 50% basis).

Middlemount had current assets, noncurrent assets, current liabilities and noncurrent liabilities of $62.9 million, $224.1 million, $146.2 million and $25.8 million, respectively, as of December 31, 2024 and $48.2 million, $199.5 million, $76.6 million and $58.2 million, respectively, as of December 31, 2023 (on a 50% basis).

R3

In March 2022, the Company entered into a joint venture with unrelated partners to form R3. R3 was formed with the intent of developing various sites, including certain reclaimed mining land held by the Company in the U.S., for utility-scale photovoltaic solar generation and battery storage. The Company contributed $11.3 million, $8.0 million and $10.9 million to R3 during the years ended December 31, 2024, 2023 and 2022, respectively.

In November 2024, R3 sold seven projects to an unrelated party and contributed the remaining three projects to a new entity (R3 II). The unrelated party purchased 75% of the equity in R3 II for cash and contingent consideration for the future obligation to pay seller’s milestone payments. R3 used the proceeds from the sale of R3 II to repurchase shares from the other investors of R3, such that Peabody is the only remaining equity holder of R3, which has a 25% equity interest in R3 II. R3 also distributed $11.4 million of the proceeds to Peabody. As Peabody is the only remaining equity holder of R3, the Company consolidated R3.

(6)Derivatives and Fair Value Measurements

Derivatives

From time to time, the Company may utilize various types of derivative instruments to manage its exposure to risks in the normal course of business, including (1) foreign currency exchange rate risk and the variability of cash flows associated with forecasted Australian dollar expenditures made in its Australian mining platform and (2) price risk of fluctuating coal prices related to forecasted sales or purchases of coal, or changes in the fair value of a fixed price physical sales contract. These risk management activities are actively monitored for compliance with the Company’s risk management policies.

On a limited basis, the Company engages in the direct and brokered trading of coal and freight-related contracts. Except those contracts for which the Company has elected to apply a normal purchases and normal sales exception, all derivative coal trading contracts are accounted for at fair value.

Foreign Currency

The Company utilizes options and collars to hedge currency risk associated with anticipated Australian dollar operating expenditures. As of December 31, 2024, the Company held average rate options with an aggregate notional amount of $388.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar operating expenditures over the nine-month period ending September 30, 2025. The instruments entitle the Company to receive payment on the notional amount should the quarterly average Australian dollar-to-U.S. dollar exchange rate exceed amounts ranging from $0.70 to $0.74 over the nine-month period ending September 30, 2025. As of December 31, 2024, the Company also held purchased collars with an aggregate notional amount of $528.0 million Australian dollars related to anticipated Australian dollar operating expenditures during the nine-month period ending September 30, 2025. The purchased collars have a floor and ceiling of approximately $0.59 and $0.73, respectively, whereby the Company will incur a loss on the instruments for rates below the floor and a gain for rates above the ceiling.

Derivative Contracts Related to Forecasted Sales

As of December 31, 2024, the Company hadno coal derivative contracts related to its forecasted sales. Historically, such financial contracts have included futures and forwards.

During the year ended December 31, 2024, the Company did not have any open positions. During the year ended December 31, 2023, the Company recorded a net unrealized mark-to-market gain of $159.0 million on financial coal derivative contracts andno unrealized mark-to-market gains or losses on physical forward sales contracts. During the year ended December 31, 2022, the Company recorded a net unrealized mark-to-market loss of $35.8 million on coal derivative contracts, which included approximately $65 million of unrealized mark-to-market losses on financial coal derivative contracts and approximately $29 million of unrealized mark-to-market gains on physical forward sales contracts.

Financial Trading Contracts

On a limited basis, the Company may enter coal or freight derivative contracts for trading purposes. Such financial contracts may include futures, forwards and options. The Company held no financial trading contracts as of December 31, 2024.

Tabular Derivatives Disclosures

The Company has master netting agreements with certain of its counterparties which allow for the settlement of contracts in an asset position with contracts in a liability position in the event of default or termination. Such netting arrangements reduce the Company’s credit exposure related to these counterparties. For classification purposes, the Company records the net fair value of all the positions with a given counterparty as a net asset or liability in the consolidated balance sheets. As of December 31, 2024, the Company had a liability derivative comprised of foreign currency option contracts with a fair value of $3.6 million. As of December 31, 2023, the Company had an asset derivative comprised of foreign currency option contracts with a fair value of $6.2 million. The net amount of asset derivatives is included in “Other current assets” and the net amount of liability derivatives is included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

Currently, the Company does not seek cash flow hedge accounting treatment for its derivative financial instruments and thus changes in fair value are reflected in current earnings. The tables below show the amounts of pretax gains and losses related to the Company’s derivatives and their classification within the accompanying consolidated statements of operations.

The Company classifies the cash effects of its derivatives within the “Cash Flows From Operating Activities” section of the consolidated statements of cash flows.

Fair Value Measurements

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. These levels include: Level 1 - inputs are quoted prices in active markets for the identical assets or liabilities; Level 2 - inputs are other than quoted prices included in Level 1 that are directly or indirectly observable through market-corroborated inputs; and Level 3 - inputs are unobservable, or observable but cannot be market-corroborated, requiring the Company to make assumptions about pricing by market participants.

The following tables set forth the hierarchy of the Company’s net asset (liability) positions for which fair value is measured on a recurring basis.

For Level 1 and 2 financial assets and liabilities, the Company utilizes both direct and indirect observable price quotes, including interest rate yield curves, exchange indices, broker/dealer quotes, published indices, issuer spreads, benchmark securities and other market quotes. In the case of certain debt securities, fair value is provided by a third-party pricing service. Below is a summary of the Company’s valuation techniques for Level 1 and 2 financial assets and liabilities:

•Foreign currency option contracts are valued utilizing inputs obtained in quoted public markets (Level 2) except when credit and non-performance risk is considered to be a significant input, then the Company classifies such contracts as Level 3.

•Derivative contracts related to forecasted sales and financial trading contracts are generally valued based on unadjusted quoted prices in active markets (Level 1) or a valuation that is corroborated by the use of market-based pricing (Level 2) except when credit and non-performance risk is considered to be a significant input (greater than 10% of fair value), then the Company classifies as Level 3.

•Investments in equity securities are based on unadjusted quoted prices in active markets (Level 1).

Other Financial Instruments. The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of December 31, 2024 and 2023:

•Cash and cash equivalents, restricted cash, accounts receivable, including those within the Company’s accounts receivable securitization program, notes receivable and accounts payable have carrying values which approximate fair value due to the short maturity or the liquid nature of these instruments.

•Long-term debt fair value estimates are based on observed prices for securities when available (Level 2), and otherwise on estimated borrowing rates to discount the cash flows to their present value (Level 3).

Market risk associated with the Company’s fixed-rate long-term debt relates to the potential reduction in the fair value from an increase in interest rates. The fair value of debt, shown below, is principally based on reported market values and estimates based on interest rates, maturities, credit risk, underlying collateral and completed market transactions.

The Company’s risk management function, which is independent of the Company’s coal trading function, is responsible for valuation policies and procedures, with oversight from executive management. The fair value of the Company’s coal derivative assets and liabilities reflects adjustments for credit risk. The Company’s exposure to credit risk is substantially with electric utilities, energy marketers, steel producers and nonfinancial trading houses.

The following table summarizes the changes in the Company’s recurring Level 3 net financial assets:

The Company hadno transfers between Levels 1, 2 and 3 during any of the periods presented in the table above. The Company’s policy is to value all transfers between levels using the beginning of period valuation.

(7)Property, Plant, Equipment and Mine Development

Property, plant, equipment and mine development, net, as of December 31, 2024 and 2023 consisted of the following:

Land and coal interests included coal reserves and resources with a net book value of $1.1 billion and $1.2 billion as of December 31, 2024 and 2023, respectively. Such coal reserves and resources were comprised of mineral rights for leased coal interests and advance royalties that had a net book value of $0.6 billion and $0.7 billion at December 31, 2024 and 2023, respectively, and coal reserves and resources held by fee ownership of $0.5 billion as of both December 31, 2024 and 2023. The amount of coal reserves and resources unassigned to active mining operations, and thus not subject to current depletion, including certain exploratory properties, was $0.1 billion as of both December 31, 2024 and 2023.

(8)Income Taxes

Income from continuing operations before income taxes for the periods presented below consisted of the following:

Total income tax provision (benefit) for the periods presented below consisted of the following:

The following is a reconciliation of the expected statutory federal income tax expense to the Company’s income tax provision (benefit) for the periods presented below:

Certain reconciliation items included in the above table exclude the remeasurement of foreign income tax accounts as these foreign currency effects are separately presented. The Company recognizes the tax on global intangible low-taxed income (GILTI) as a period expense. The Company recorded a provision of $197.2 million for the year ended December 31, 2022, which was fully offset within the effective tax rate by the release of valuation allowance associated with the net operating losses (NOLs) that absorbed the GILTI inclusion. No provision for GILTI was recorded for the years ended December 31, 2024 and 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law and contained numerous tax provisions including a 15% minimum tax on book income of certain large corporations. This act did not have a material impact on the Company’s tax provision.

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31, 2024 and 2023 consisted of the following:

As of December 31, 2024, the Company had gross U.S. federal NOLs of $1.7 billion. The Company’s tax loss carryforwards and credits of $732.5 million as of December 31, 2024 were comprised primarily of net federal NOLs of $361.5 million, tax general business credits (GBCs) of $139.1 million, net Australia NOLs and capital tax loss carryforwards of $125.4 million, state NOLs of $87.8 million and other foreign NOLs of $17.8 million. The foreign tax loss carryforwards have no expiration date. The federal NOLs begin to expire in 2037, the state NOLs begin to expire in 2028 and the GBCs begin to expire in 2027.

In assessing the near-term use of NOLs and tax credits and corresponding valuation allowance adjustments, the Company evaluates the expected level of reversals of existing taxable temporary differences, available tax planning strategies and future taxable income. The Company maintained valuation allowances of $1.4 billion against the U.S. net deferred tax asset position of $1.0 billion and against certain foreign deferred tax assets, primarily in Australia, of $0.4 billion. The valuation allowance against the U.S. and certain foreign deferred tax assets continues to be recorded due to unlikely realization.

Unrecognized Tax Benefits

Net unrecognized tax benefits (excluding interest and penalties) were recorded as follows in the consolidated balance sheets as of December 31, 2024 and 2023:

The amount of the Company’s gross unrecognized tax benefits increased by $0.5 million since December 31, 2023 primarily due to additions for current and prior year positions, partially offset by reductions due to expiration of statutes. The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $9.2 million and $8.7 million at December 31, 2024 and 2023, respectively. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the periods presented below is as follows:

The Company recognizes interest and penalties related to unrecognized tax benefits in its income tax provision. During the year ended December 31, 2024, the Company’s gross interest and penalties decreased by $6.2 million due to expiration of statutes. The Company recorded $0.2 million of gross interest and penalties in each of the years ended December 31, 2023 and 2022. The Company hadno accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2024. The Company had $6.1 million and $5.9 million of accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2023 and 2022, respectively.

The Company expects a decrease in its net unrecognized tax benefits of $0.8 million during the next twelve months due to expiration of statutes.

Tax Returns Subject to Examination

The Company’s federal income tax returns for the tax years 2017 and 2020 through 2023 are subject to potential examinations by the Internal Revenue Service. The Company’s state income tax returns for the tax years 2016 and thereafter remain potentially subject to examination by various state taxing authorities due to NOL carryforwards. Australian income tax returns for tax years 2019 through 2023 continue to be subject to potential examinations by the Australian Taxation Office.

Foreign Earnings

As of December 31, 2024, the Company has unremitted earnings relating to certain wholly owned subsidiaries that are not permanently reinvested, but there are no residual cash taxes on the unremitted earnings. The Company has an earnings deficit for remaining investments outside the U.S. and continues to be permanently reinvested with respect to its historical earnings. However, when appropriate, the Company has the ability to access foreign cash without incurring residual cash taxes due to the existence of NOLs.

Tax Payments and Refunds

The following table summarizes the Company’s income tax payments, net for the periods presented below:

The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalization of the global economy. Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Company operates, effective for the financial year beginning January 1, 2024. Based on an assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Company operates are above 15% and the Company is not currently aware of any circumstances under which this might change. Therefore, the Company did not incur any Pillar Two top-up taxes in the year ended December 31, 2024.

(9)Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

(10)Long-term Debt

The Company’s total indebtedness as of December 31, 2024 and 2023 consisted of the following:

2028 Convertible Notes

On March 1, 2022, through a private offering, the Company issued the 2028 Convertible Notes in the aggregate principal amount of $320.0 million. The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.

The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem its then-existing senior secured notes and to pay related premiums, fees and expenses relating to the offering and redemptions. The Company capitalized $11.2 million of debt issuance costs related to the offering, which are being amortized over the terms of the notes.

The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The 2028 Convertible Notes bear interest at a rate of 3.250% per year, payable semi-annually in arrears on March 1 and September 1 of each year.

The 2028 Convertible Notes are convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended June 30, 2022, 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 2028 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 any 2028 Convertible Notes for redemption; and (5) at any time from, and including, September 1, 2027 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 indenture. The initial conversion rate for the 2028 Convertible Notes was 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represented an initial conversion price of approximately $19.85 per share of the Company’s common stock. The terms of the indenture require conversion rate adjustments upon the payment of dividends to holders of the Company’s common stock once such cumulative dividends impact the conversion rate by at least 1%. Effective February 21, 2024, the conversion rate was increased to 51.0440 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represented an adjusted conversion price of approximately $19.59 per share. Under the applicable conversion rate formula, the dividends declared and paid during the nine months ended December 31, 2024 and the dividend declared during the three months ending March 31, 2025, yielded a revised conversion rate which met the 1% threshold to impact the existing conversion rate of 51.0440. As such, effective February 18, 2025, the conversion rate was increased to 51.7678 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes. The conversion rate is subject to further adjustment under certain circumstances in accordance with the terms of the indenture. If certain corporate events described in the indenture occur prior to the maturity date, or the Company delivers a notice of redemption (as described below), the conversion rate will be increased for a holder who elects to convert its 2028 Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances.

The Company may not redeem the 2028 Convertible Notes prior to March 1, 2025. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at its option, on or after March 1, 2025 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if 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 2028 Convertible Notes unless at least $75 million aggregate principal amount of 2028 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 2028 Convertible Notes.

If the Company undergoes a fundamental change (as defined in the indenture), noteholders may require the Company to repurchase their 2028 Convertible Notes at a cash repurchase price equal to 100% of the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

During the fourth quarter ended December 31, 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 will not be convertible during the first quarter of 2025.

As of December 31, 2024, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $25.3 million.

Revolving Credit Facility

The Company established a new revolving credit facility with a maximum aggregate principal amount of $320.0 million in revolving commitments by entering into a credit agreement, dated as of January 18, 2024 (the 2024 Credit Agreement), by and among the Company, as borrower, certain subsidiaries of the Company party thereto, PNC Bank, National Association, as administrative agent, and the lenders party thereto. The Company paid aggregate debt issuance costs of $9.7 million.

The revolving commitments and any related loans, if applicable (any such loans, the Revolving Loans), established by the 2024 Credit Agreement terminate or mature, as applicable, on January 18, 2028, subject to certain conditions relating to the Company’s outstanding 2028 Convertible Notes. The Revolving Loans bear interest at a secured overnight financing rate (SOFR) plus an applicable margin ranging from 3.50% to 4.25%, depending on the Company’s total net leverage ratio (as defined under the 2024 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option. Letters of credit issued under the 2024 Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.50% to 4.25% plus a fronting fee equal to 0.125% per annum. Unused capacity under the 2024 Credit Agreement bears a commitment fee of 0.50% per annum. On November 25, 2024, the Company amended the 2024 Credit Agreement to, among other things, permit Peabody’s planned acquisition of multiple coal mines from Anglo American plc (Anglo) as further discussed in Note 17. “Other Events,” the related bridge loan facility and the incurrence of additional indebtedness to finance the acquisition, to the extent applicable. The Company paid aggregate deferred financing costs of $0.9 million as part of the amendment.

As of December 31, 2024, the 2024 Credit Agreement had only been utilized for letters of credit, including $86.3 million outstanding as of December 31, 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 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees.” Availability under the 2024 Credit Agreement was $233.7 million at December 31, 2024.

The 2024 Credit Agreement contains customary covenants that, among other things and subject to certain exceptions (including compliance with financial ratios), may limit the Company and its subsidiaries’ ability to incur additional indebtedness, make certain restricted payments or investments, sell or otherwise dispose of assets, enter into transactions with affiliates, create or incur liens, and merge, consolidate or sell all or substantially all of their assets. The 2024 Credit Agreement is secured by substantially all assets of the Company and its U.S. subsidiaries, as well as a pledge of two Australian subsidiaries.

BUMA Loan Note

Following the prospective closing of the Anglo acquisition, the Company is contracted to sell a portion of the assets (the Dawson Assets) to Pt Bukit Makmur Mandiri Utama or one of its subsidiaries (BUMA). Accordingly, on November 25, 2024, concurrent with its entry into the purchase agreements for the Anglo acquisition, the Company entered into a loan note deed with BUMA pursuant to which BUMA will lend to the Company the funds required to purchase the Dawson Assets under the Anglo acquisition purchase agreements and fund certain other obligations in relation to the Dawson Assets (the BUMA Loan Note). The Company received $9.3 million in BUMA Loan Note proceeds during the year ended December 31, 2024 to fund a portion of the deposit to Anglo for the planned acquisition. The BUMA Loan Note bears interest at a coupon rate of 10% per year.

Refer to Note 17. “Other Events” for additional information associated with the Anglo acquisition.

Bridge Loan Facility

Concurrently with its entry into definitive agreements to acquire the Anglo assets, the Company entered into a bridge loan facility commitment letter (the Bridge Commitment Letter, and the senior secured 364-day bridge facility provided for therein, the Bridge Facility), pursuant to which the lenders, agreed to provide the Bridge Facility to the Company in the amount of up to $2.075 billion in order to finance the planned acquisition in part. The Company expects to replace the Bridge Facility with permanent financing prior to the closing date, but there can be no assurance such financing will occur and any such expectation is subject to market conditions.

To the extent borrowings are made under the Bridge Facility, any loans would bear interest at a SOFR plus an applicable margin of 8.00% or a base rate plus an applicable margin of 7.00%, at the Company’s option. Such applicable margin would increase by an additional 0.75% on the date that is 90 days following the closing date of the planned acquisition. Any borrowings under the Bridge Facility would mature 364 days from the initial funding date, which would be on or around the closing date of the planned acquisition.

The availability of borrowings under the Bridge Facility is subject to the satisfaction of certain customary conditions for transactions of this type. Any definitive financing documentation for the Bridge Facility will contain customary representations and warranties, covenants and events of defaults for transactions of this type. Upon execution of any definitive financing documentation for the Bridge Facility, the Bridge Facility will be guaranteed by substantially all U.S. subsidiaries of the Company and secured by substantially all assets of the Company, its U.S. subsidiaries and, subject to certain conditions, certain of the Company’s Australian subsidiaries.

Interest Charges

The following table presents the components of the Company’s interest expense related to its indebtedness and financial assurance instruments such as surety bonds and letters of credit. Additionally, the table sets forth the amount of cash paid for interest, net of capitalized interest and the amount of non-cash interest expense primarily related to the amortization of debt issuance costs.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at December 31, 2024.

Finance Lease Obligations

Refer to Note 11. “Leases” for additional information associated with the Company’s finance leases, which pertain to the financing of mining equipment used in operations.

(11)Leases

The Company has operating and finance leases for mining and non-mining equipment, office space and certain other facilities under various non-cancellable agreements. Historically, the majority of the Company’s leases have been accounted for as operating leases. Refer to Note 1. “Summary of Significant Accounting Policies” for the Company’s policies regarding “Leases.”

The Company and certain of its subsidiaries have guaranteed other subsidiaries’ performance under various lease obligations. Certain lease agreements are subject to the restrictive covenants of the Company’s credit facilities and include cross-acceleration provisions, under which the lessor could require remedies including, but not limited to, immediate recovery of the present value of any remaining lease payments. The Company typically agrees to indemnify lessors for the value of the property or equipment leased, should the property be damaged or lost during the course of the Company’s operations. The Company expects that losses with respect to leased property, if any, may be covered by insurance (subject to deductibles). Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments, and the Company assumes thatno amounts could be recovered from third parties.

The components of lease expense for the periods presented below were as follows:

Supplemental balance sheet information related to leases at December 31, 2024 and 2023 was as follows:

Supplemental cash flow information related to leases for the periods presented below was as follows:

The Company's leases have remaining lease terms ranging from 1 year to 10 years, and may include options to extend the terms, as applicable. The contractual maturities of lease liabilities were as follows:

(12)Asset Retirement Obligations

Reconciliations of the Company’s asset retirement obligations are as follows:

The Company’s reclamation obligations are secured by surety bonds, which are supported by standby letters of credit and restricted cash, and various other forms of collateral. See Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” for a discussion of the collateral securing the asset retirement obligations.

(13) Postretirement Health Care and Life Insurance Benefits

The Company currently provides health care and life insurance benefits to qualifying salaried and hourly retirees of its current and certain former subsidiaries and their dependents from benefit plans established by the Company. Plan coverage for health benefits is provided to future hourly and salaried retirees in accordance with the applicable plan document. Life insurance benefits are provided to future represented hourly retirees in accordance with the Company’s benefit plans and any applicable labor agreement.

Net periodic postretirement benefit credit included the following components:

The actuarial gain for all benefit plans in 2024 was primarily due to the increase in the discount rate used to measure the benefit obligation and favorable impact of claims experience for the year. The actuarial gain for all benefit plans in 2023 was primarily due to favorable impact of claims experience for the year offset by the decrease in the discount rate used to measure the benefit obligation. The actuarial gain for all benefit plans in 2022 was primarily due to the increase in the discount rate used to measure the benefit obligation and favorable impact of claims experience for the year offset by increase in medical trend rate due to inflation as well as the expected impact of the Inflation Reduction Act.

The following includes pretax amounts recorded in “Accumulated other comprehensive income”:

The Company amortizes prior service credit over an amortization period of the average remaining service period to full eligibility for participating employees at the time of the plan change or the expected lifetime of participants in the plan. A prior service credit established during 2024 is described below. The estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost during the year ending December 31, 2025 is $40.8 million.

The following table sets forth the plans’ funded status reconciled with the amounts shown in the consolidated balance sheets:

In December 2024, the Company entered into a new labor agreement covering certain represented employees. Under terms of the new labor agreement, when a represented employee retires or dies the health benefits of the retiree and/or their surviving spouse and any eligible dependents will be provided by the labor union and will no longer be covered by the Company’s health plan. The Company will continue to offer a life insurance benefit to eligible represented retirees. The impact of the changes on future benefits reduced the Company’s accumulated postretirement benefit obligation by $6.5 million. The reduction was attributable to the elimination of health care benefits for certain represented retirees. The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings over the average remaining life expectancy of participants benefiting under the plan (12.7 years is the amortization period at December 31, 2024; $6.5 million remaining in “Accumulated other comprehensive income” at December 31, 2024).

A prior service credit established in October 2021 is being amortized to earnings over the average remaining life expectancy of the affected plan participants (11.0 years and 12.0 years were the remaining amortization periods at December 31, 2024 and 2023, respectively; $107.6 million remaining in “Accumulated other comprehensive income” at December 31, 2024). A prior service credit established in December 2020 is being amortized to earnings over the average remaining life expectancy of the affected plan participants 6.5 years and 7.5 years were the remaining amortization periods at December 31, 2024 and 2023, respectively; $6.7 million remaining in “Accumulated other comprehensive income” at December 31, 2024). A prior service credit established in September 2020 is being amortized to earnings over an average remaining service period to full eligibility for participating employees (0.9 years and 1.9 years were the remaining amortization periods at December 31, 2024 and 2023, respectively; $29.4 million remaining in “Accumulated other comprehensive income” at December 31, 2024). A prior service credit established in December 2018 was amortized to earnings over an average remaining service period to full eligibility for participating employees (0.9 years was the remaining amortization period at December 31, 2023).

The weighted-average assumptions used to determine the benefit obligations for the plans as of the end of each year were as follows:

The weighted-average assumptions used to determine net periodic postretirement benefit credit for the plans during each period were as follows:

The expected rate of return on plan assets is determined by taking into consideration expected long-term returns associated with each major asset class based on long-term historical ranges, inflation assumptions and the expected net value from active management of the assets based on actual results. Effective January 1, 2025, the Company increased its expected rate of return on plan assets from 5.75% to 5.95% reflecting the impact of its asset allocations and capital market expectations.

The following presents information about the assumed health care cost trend rate:

(1)An additional one-time increase of 3% was applied to claims in 2024 to reflect potential reductions in payments from Center for Medicare and Medicaid Services related to the passage of the Inflation Reduction Act in August 2022.

Plan Assets

The Company maintains a Voluntary Employees’ Beneficiary Association (VEBA) trust to pre-fund a portion of benefits for non-represented retirees. Assets of the Peabody Investments Corp. Non-Represented Retiree VEBA Trust (the Non-Represented Trust) are invested in accordance with the investment policy established by the Peabody VEBA Retirement Committee after consultation with outside investment advisors and actuaries. As of December 31, 2024 and 2023, the asset allocation strategy for the Non-Represented Trust is 30% in equity and 70% in fixed income assets. The asset strategy may vary over time based on changes in the status of the Non-Represented Trust, the Company’s risk posture and other factors.

A financial instrument’s level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation techniques and inputs used for investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy.

U.S. equity securities. The Non-Represented Trust invests in U.S. equity securities for growth and diversification. Investment vehicles include various domestic large-cap publicly traded common stocks and mutual funds. All common stocks are traded on a national securities exchange and are valued at quoted market prices in active markets and accordingly classified within Level 1 of the valuation hierarchy. The mutual funds are traded on a national securities exchange in an active market, are valued using daily publicly quoted net asset value (NAV) prices and accordingly classified within Level 1 of the valuation hierarchy.

International equity securities. The Non-Represented Trust invests in international equity securities for growth and diversification. Investment vehicles include mutual funds. The mutual funds are traded on a national securities exchange in an active market, are valued using daily publicly quoted net asset value (NAV) prices and accordingly classified within Level 1 of the valuation hierarchy.

Corporate bonds. The Non-Represented Trust invests in corporate bonds for diversification, volatility reduction of equity securities and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly investment-grade corporate bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. Corporate bonds are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the bonds are not traded on a national securities exchange.

U.S. government securities. The Non-Represented Trust invests in U.S. government securities for diversification, volatility reduction of equity securities and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly U.S. government bonds, notes, agency securities and municipal bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. If fair value is based on quoted prices in active markets and traded on a national securities exchange, U.S. government securities are classified within the Level 1 valuation hierarchy; otherwise, U.S. government securities are classified within the Level 2 valuation hierarchy.

Cash funds. The Non-Represented Trust invests in cash funds to manage liquidity resulting from payment of participant benefits and certain administrative fees. The investment consists of non-interest bearing cash funds and U.S. government money market fund which are classified within the Level 1 valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

The following tables present the fair value of assets in the Non-Represented Trust by asset category and by fair value hierarchy:

Contributions

Annual contributions to the Non-Represented Trust are discretionary. During the year ended December 31, 2024, the Company made no contributions to the trust.

Estimated Future Benefit Payments

The following benefit payments (net of retiree contributions and Medicare Part D reimbursements), which reflect expected future service, as appropriate, are expected to be paid by the Company or satisfied from Non-Represented Trust assets:

(14)Pension and Savings Plans

One of the Company’s subsidiaries, Peabody Investments Corp. (PIC), sponsored a defined benefit pension plan covering certain U.S. salaried employees and eligible hourly employees at certain PIC subsidiaries (the Peabody Plan). As discussed further below, the Peabody Plan was terminated in 2022 with assets distributed in 2023. A subsidiary of PIC has a defined benefit pension plan covering eligible employees who are represented by the United Mine Workers of America (UMWA) under the Kayenta Reclamation Agreement of 2024 (the Western Plan and together with the Peabody Plan, the Pension Plans).

Effective May 31, 2008, the Peabody Plan was frozen in its entirety for both participation and benefit accrual purposes. In March 2022, PIC entered into a commitment agreement relating to the Peabody Plan with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Peabody Plan. Under the commitment agreement, the Peabody Plan purchased a buy-in group annuity contract (GAC) from Prudential for approximately $500 million, which was funded directly by the Peabody Plan’s assets. The benefit obligation was not transferred to Prudential and the Peabody Plan continued to administer and pay the retirement benefits of Peabody Plan participants, but was reimbursed by Prudential for the payment of all benefits covered by the GAC. There was no impact on the monthly retirement benefits paid to Peabody Plan participants and no material impact on contributions for the Peabody Plan in 2022 or 2023 as a result of this transaction.

In May 2022, the Board of Directors of PIC approved the termination of the Peabody Plan effective July 31, 2022. In June 2022, the Peabody Plan’s participants were notified of the Peabody Plan termination and PIC filed an application with the Internal Revenue Service to request a determination as to the qualified status under §401(a) of the Internal Revenue Code of 1986 with respect to the amendment and termination of the Peabody Plan. In May 2023, PIC received a favorable determination from the Internal Revenue Service as to the Peabody Plan’s qualified status with respect to its plan termination.

In February 2023, as part of the Peabody Plan termination process, PIC announced a program to offer a voluntary lump-sum pension payout to certain active and deferred participants of the Peabody Plan which would fully settle the Peabody Plan’s obligation to them. The program provided participants with a limited-time opportunity to elect to receive a lump-sum settlement of their pension benefit or begin to receive their benefit in the form of a monthly annuity in May 2023.

On July 31, 2023, as part of the completion of the standard Employee Retirement Income Security Act plan termination process for the Peabody Plan, the GAC with Prudential was converted from a buy-in group annuity contract to a buy-out group annuity contract, irrevocably transferring the remaining benefit obligation and administration to Prudential. Peabody no longer administers or pays the retirement benefits of Peabody Plan participants. No cash contributions were required to complete the termination process for the Peabody Plan.

During the year ended December 31, 2023, the Company settled $443.2 million of its pension obligations for active and deferred participants in the Peabody Plan with an equal amount paid from plan assets. As a result of the termination process, the Company recorded a settlement gain of $2.2 million during the year ended December 31, 2023, which was reflected in “Net periodic benefit credit, excluding service cost” on the consolidated statements of operations. As a result of the Peabody Plan’s over-funded status, $11.1 million was transferred to a Company sponsored employee retirement account (the Qualified Replacement Plan) during December 2023 as part of the distribution of the Peabody Plan assets resulting from the Peabody Plan termination. The Company will use the funds in the Qualified Replacement Plan at least ratably over a seven year period.

Net periodic pension cost included the following components:

The actuarial loss for the Western Plan in 2024 was primarily due to actual returns on plan assets that were lower than expected returns for the year offset by the increase in the discount rate used to measure the benefit obligation. The actuarial loss for all pension plans in 2022 was primarily due to actual returns on plan assets that were lower than expected returns for the year and the premium paid to Prudential to purchase the GAC, offset by the increase in the discount rate used to measure the benefit obligation.

The following summarizes the change in benefit obligation, change in plan assets and funded status of the Pension Plans:

The weighted-average assumptions used to determine the benefit obligations as of the end of each year were as follows:

The weighted-average assumptions used to determine net periodic pension cost (credit) during each period were as follows:

The expected rate of return on plan assets is determined by taking into consideration expected long-term returns associated with each major asset class based on long-term historical ranges, inflation assumptions and the expected net value from active management of the assets based on actual results. Effective January 1, 2025, the Company raised its expected rate of return on plan assets from 4.40% to 4.95% for the Western Plan, reflecting the impact of its asset allocations and capital market expectations.

As of December 31, 2024 and 2023, the projected benefit obligation and accumulated benefit obligation for the Western Plan was $117.6 million and $125.2 million, respectively, which exceeded the plan assets of $104.8 million and $116.0 million, respectively, for those periods. As of December 31, 2024 and 2023, there wereno plan assets, projected benefit obligation or accumulated benefit obligation for the Peabody Plan.

Assets of the Pension Plans

Prior to December 31, 2023, assets of the PIC Master Trust (the Master Trust) were invested in accordance with investment guidelines established by the Peabody Plan Retirement Committee and the Peabody Western Plan Retirement Committee (collectively, the Retirement Committees) after consultation with outside investment advisors and actuaries. As of January 1, 2024, assets of the Master Trust are invested in accordance with investment guidelines established by the Western Plan Retirement Committee after consultation with outside investment advisors and actuaries.

The asset allocation targets have been set with the expectation that the assets of the Master Trust will be managed with an appropriate level of risk to fund each Pension Plan’s expected liabilities. To determine the appropriate target asset allocations, the Retirement Committees consider the demographics of each Pension Plan’s participants, the funded status of each Pension Plan, the business and financial profile of the Company and other associated risk preferences. These allocation targets are reviewed by the Retirement Committees on a regular basis and revised as necessary. As a result of discretionary contributions made in recent years, the Western Plan has become nearly fully funded and therefore, as of December 31, 2024 and 2023, the Master Trust investment portfolio reflected the Company’s target asset mix of 100% fixed income investments. Prior to December 31, 2023, the assets of the Master Trust also included investments of the Peabody Plan as well as various real estate holdings through limited partnerships. The Peabody Plan assets were distributed and all real estate holdings were liquidated as of December 31, 2023.

Assets of the Master Trust are under management by third-party investment managers, which are selected and monitored by the Retirement Committees. Specific investment guidelines have been established by the Retirement Committees for each major asset class including performance benchmarks, allowable and prohibited investment types and concentration limits. In general, investment guidelines do not permit leveraging the assets held in the Master Trust. However, investment managers may employ various strategies and derivative instruments in establishing overall portfolio characteristics consistent with the guidelines and investment objectives established by the Retirement Committees for their portfolios. Fixed income investment guidelines only allow for exchange-traded derivatives if the investment manager deems the derivative vehicle to be more attractive than a similar direct investment in an underlying cash market or to manage the duration of the fixed income portfolio.

A financial instrument’s level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation techniques and inputs used for investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy.

Corporate bonds. The Master Trust invests in corporate bonds for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly investment-grade corporate bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. Corporate bonds are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the bonds are not traded on a national securities exchange.

U.S. government securities. The Master Trust invests in U.S. government securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly U.S. government bonds, agency securities and municipal bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. If fair value is based on quoted prices in active markets and traded on a national securities exchange, U.S. government securities are classified within the Level 1 valuation hierarchy; otherwise, U.S. government securities are classified within the Level 2 valuation hierarchy.

International government securities. The Master Trust invests in international government securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly non-U.S. government bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. International government securities are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the bonds are not traded on a national securities exchange.

Asset-backed securities. The Master Trust invests in asset-backed securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominately mortgage-backed securities. Asset-backed securities are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the investments are not traded on a national securities exchange.

Cash funds. The Master Trust invests in cash funds to manage liquidity resulting from payment of participant benefits and certain administrative fees. Investment vehicles primarily include a non-interest bearing cash fund with an earnings credit allowance feature, various exchange-traded derivative instruments consisting of futures and interest rate swap agreements used to manage the duration of certain liability-hedging investments. The non-interest bearing cash fund is classified within the Level 1 valuation hierarchy. Exchange traded derivatives, such as options and futures, for which market quotations are readily available, are valued at the last reported sale price or official closing price on the primary market or exchange on which they are traded and are classified within the Level 1 valuation hierarchy.

Group annuity contract. The Master Trust invested in a buy-in GAC to provide a hedge to interest rate movements affecting liabilities. The GAC consisted of a nonparticipating single premium group annuity contract. The initial value of the GAC was equal to the premium paid to secure the contract and was adjusted each reporting period to reflect the estimated fair value of the premium that would be paid for such a contract at that time. Since there were no observable inputs associated with the valuation, the GAC was classified within the Level 3 valuation hierarchy.

Real estate interests. The Master Trust invested in real estate interests for diversification. Investments in real estate represented interests in several limited partnerships, which invest in various real estate properties. Interests in real estate were valued using various methodologies, including independent third party appraisals; fair value measurements were not developed by the Company. For some investments, little market activity may have existed and determination of fair value was then based on the best information available in the circumstances. This involved a significant degree of judgment by taking into consideration a combination of internal and external factors. Accordingly, interests in real estate were classified within the Level 3 valuation hierarchy.

Private mutual funds. The Master Trust invests in mutual funds for growth and diversification. Investment vehicles include an institutional fund that holds a diversified portfolio of long-duration corporate fixed income investments (Corporate Bond Fund). The Corporate Bond Fund is not traded on a national securities exchange and is valued at NAV, the practical expedient to estimate fair value.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments.

The following tables present the fair value of assets in the Master Trust by asset category and by fair value hierarchy:

(1)In accordance with Accounting Standards Update 2015-07, investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the tables are intended to permit reconciliation of the fair value hierarchy to the total value of assets of the plans.

The table below sets forth a summary of changes in the fair value of the Master Trust’s Level 3 investments:

Contributions

Annual contributions to the qualified plans are made in accordance with minimum funding standards and the Company’s agreement with the Pension Benefit Guaranty Corporation (PBGC). Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006. As of December 31, 2024, the Company’s remaining qualified plan was expected to be at or above the Pension Protection Act thresholds. The Company was not required to make any cash contributions to its remaining qualified pension plan in 2024 based on minimum funding requirements and did not make any discretionary cash contributions in 2024. In January 2025, the Company made a discretionary cash contribution of $5.0 million to its remaining qualified pension plan which terminated the Company’s agreement with the PBGC and resulted in the release of a $37.0 million letter of credit that had been maintained in favor of the PBGC.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in connection with the Company’s benefit obligation:

Defined Contribution Plans

The Company sponsors employee retirement accounts under three 401(k) plans for eligible U.S. employees. The Company matches voluntary contributions to each plan up to specified levels. For one plan, the Company has sole discretion in making any matching contributions. The expense for these plans was $21.7 million, $21.3 million and $20.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Discretionary contribution features in the plans allow for additional contributions from the Company. The Company granted discretionary contributions of $7.8 million, $7.3 million and $9.2 million during the years ended December 31, 2024, 2023 and 2022, respectively. Discretionary contributions paid during the years ended December 31, 2024, 2023 and 2022 were $7.7 million, $4.6 million and $4.0 million, respectively.

Superannuation

The Company makes superannuation contributions for eligible Australia employees in accordance with the employer contribution rate set by the Government of Australia. The expense related to these contributions was $25.7 million, $21.9 million and $18.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. A performance contribution feature allows for additional discretionary contributions from the Company. The Company granted discretionary performance contributions of $2.2 million during the year ended December 31, 2024, and $1.6 million during both the years ended December 31, 2023 and 2022. Discretionary contributions paid during the years ended December 31, 2024 and 2023 were $1.9 million and $1.3 million, respectively. There wereno discretionary performance contributions paid during the year ended December 31, 2022.

(15)Stockholders’ Equity

Common Stock

In accordance with the Company’s Fourth Amended and Restated Certificate of Incorporation, the Company has 450.0 million authorized shares of Common Stock, par value $0.01 per share. Holders of Common Stock are entitled toone vote per share on all matters to be voted upon by the stockholders. The holders of Common Stock do not have cumulative voting rights in the election of directors. Holders of Common Stock are entitled to receive ratably dividends if, as and when dividends are declared from time to time by the Board of Directors (the Board) out of funds legally available for that purpose, after payment of dividends required to be paid on any outstanding preferred stock or series common stock. Upon dissolution, liquidation or winding up of the Company, the holders of Common Stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and subject to the right of holders of any outstanding preferred stock or series common stock. The Common Stock has no preemptive or conversion rights and is not subject to further calls or assessment by the Company. There are no redemption or sinking fund provisions applicable to the Common Stock.

The following table summarizes Common Stock activity during the periods presented below:

Preferred Stock

The Board is authorized to issue up to 100.0 million shares of preferred stock, par value $0.01 per share. The Board can determine the terms and rights of each series, including whether dividends (if any) will be cumulative or non-cumulative and the dividend rate of the series, redemption or sinking fund provisions, conversion terms, prices and rates and amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company and whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation. The Board may also determine restrictions on the issuance of shares of the same series or of any other class or series, and the voting rights (if any) of the holders of the series. There wereno outstanding shares of preferred stock as of December 31, 2024.

Series Common Stock

The Board is authorized to issue up to 50.0 million shares of series common stock, par value $0.01 per share. The Board can determine the terms and rights of each series, whether dividends (if any) will be cumulative or non-cumulative and the dividend rate of the series, redemption or sinking fund provisions, conversion terms, prices and rates and amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company and whether the shares of the series will be convertible into shares of any other class or series, or any other security, of the Company or any other corporation. The Board may also determine restrictions on the issuance of shares of the same series or of any other class or series, and the voting rights (if any) of the holders of the series. There wereno outstanding shares of series common stock as of December 31, 2024.

Treasury Stock

Shares repurchases. During the fourth quarter of 2020, the Company entered into a transaction support agreement with its surety bond providers which prohibited share repurchases through the earlier of December 31, 2025, or the maturity of the then-existing credit agreement unless otherwise agreed to by the parties to the agreement. Additionally, restrictive covenants in its then-existing credit facility also limited the Company’s ability to repurchase shares. On April 14, 2023, the Company amended the existing transaction support agreement with the surety bond providers to remove the restrictions on shareholder returns, subject to a minimum liquidity threshold, and terminated the then-existing credit facility, which allows share repurchases.

On April 17, 2023, the Board authorized a new share repurchase program (2023 Repurchase Program) authorizing repurchases of up to $1.0 billion of its Common Stock. Under the 2023 Repurchase Program, the Company may purchase shares of common stock at its discretion. The manner, timing, pricing and amount of any share repurchase transactions will be based on a variety of factors, including market conditions, applicable legal requirements and alternative opportunities that the Company may have for the use or investment of capital.

During the year ended December 31, 2024, the Company repurchased 7.7 million shares of its Common Stock for $180.5 million, which included commission fees of $0.2 million. Excluded from this amount repurchased is $2.6 million of repurchases made during the year ended December 31, 2023 that were settled during the year ended December 31, 2024. As of December 31, 2024, the Company had accrued excise taxes of $1.7 million related to the repurchases, which were unpaid at December 31, 2024. The Company includes commission fees and excise taxes, as incurred, with the cost of treasury stock. At December 31, 2024, $469.6 million remained available under the 2023 Repurchase Program.

Shares relinquished. The Company routinely allows employees to relinquish Common Stock to pay estimated taxes upon the vesting of restricted stock units and the payout of performance units that are settled in Common Stock under its equity incentive plans. The number of shares of Common Stock relinquished was 0.1 million,0.6 million and 0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. The value of the Common Stock tendered by employees was based upon the closing price on the dates of the respective transactions.

(16)Share-Based Compensation

The Company has established the Peabody Energy Corporation 2017 Incentive Plan (the 2017 Incentive Plan) for employees, non-employee directors and consultants that allows for the issuance of share-based compensation in various forms including options (including non-qualified stock options and incentive stock options), stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, dividend equivalents and cash incentive awards. Under the 2017 Incentive Plan, approximately 14 million shares of the Company’s Common Stock were reserved for issuance. As of December 31, 2024, there are approximately 5.5 million shares of the Company’s Common Stock available for grant.

Share-Based Compensation Expense and Cash Flows

The Company’s share-based compensation expense is recorded in “Operating costs and expenses” and “Selling and administrative expenses” in the consolidated statements of operations. Share-based compensation expense and cash flow amounts were as follows:

As of December 31, 2024, the total unrecognized compensation cost related to nonvested awards was $11.0 million, which is expected to be recognized over 3.0 years with a weighted-average period of 0.9 years.

Deferred Stock Units

During the years ended December 31, 2024, 2023 and 2022, the Company granted deferred stock units to each of the non-employee members of the Board. The fair value of these units is equal to the market price of the Company’s Common Stock at the date of grant. These deferred stock units generally vest on a monthly basis over 12 months and are settled in Common Stock three years after the date of grant.

Restricted Stock Units

The Company grants restricted stock units to certain senior management and non-senior management employees. For units granted to both senior and non-senior management employees containing only service conditions, the fair value of the award is equal to the market price of the Company’s Common Stock at the date of grant. Units granted to senior and non-senior management employees vest at various times (none of which exceed three years) in accordance with the underlying award agreement. Compensation cost for both senior and non-senior management employees is recognized on a straight-line basis over the requisite service period. The payouts for active grants awarded during the years ended December 31, 2024, 2023 and 2022 will be settled in the Company’s Common Stock.

Awards granted to certain senior management employees during the year ended December 31, 2022 contain a performance feature in which the award can be increased by up to 100% based on Adjusted EBITDA results over a two-year period. There were 234,973 incremental shares granted during the year ended December 31, 2024 as a result of the performance condition being satisfied which are included in the table below.

A summary of restricted stock unit activity is as follows:

The total fair value at grant date of restricted stock units granted during the years ended December 31, 2024, 2023 and 2022 was $10.1 million, $5.5 million and $3.9 million, respectively.

The restricted stock units receive dividend equivalent units (DEUs) upon payment of cash dividends to holders of Common Stock. DEUs vest subject to the same vesting requirements as the underlying restricted stock unit award. As of December 31, 2024, there were approximately 5,800 nonvested DEUs. The total fair value of restricted stock units and DEUs vested was $13.1 million, $13.8 million and $6.8 million during the years ended December 31, 2024, 2023 and 2022, respectively.

Performance Units

Performance units are typically granted annually in January and vest at the end of athree-year period and are primarily limited to senior management personnel. The performance units are usually subject to the achievement of goals.

The performance units granted during the year ended December 31, 2023 were based on the following conditions: two-year free cash flow and environmental reclamation (performance condition). In addition, the payout of the performance units can be increased by up to 50% of the award granted. The incremental shares, which can be increased by up to 61,902 shares as of December 31, 2024 if the performance condition is satisfied, are not included in the table below.

The performance units granted during the year ended December 31, 2024 were based on the following conditions: two-year free cash flow, sales volume and environmental reclamation (performance condition). In addition, the payout of the performance units can be increased or decreased by up to 25% of the award based onthree-year stock price performance compared to a custom peer group (market condition). The performance units can be increased by up to a maximum of 100% of the award granted. The incremental shares, which can be increased by up to 151,106 shares as of December 31, 2024 if the performance condition is satisfied, are not included in the table below.

Awards granted during the year ended December 31, 2024 will be settled in the Company's Common Stock. There were 176,487 and 531,915 performance units granted during the years ended December 31, 2024 and December 31, 2023, respectively. There wereno performance units granted during the year ended December 31, 2022.

A summary of performance unit activity is as follows:

As of December 31, 2024, there were no performance units and DEUs that were vested.

The performance units receive DEUs upon payment of cash dividends to holders of Common Stock. DEUs vest subject to the same vesting requirements as the underlying performance unit award. As of December 31, 2024, there were approximately 5,000 nonvested DEUs.

(17)Other Events

Planned Anglo American Acquisition

On November 25, 2024, the Company entered into definitive agreements (the Purchase Agreements), to acquire from Anglo a portion of the assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia, including 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, Dawson South, Dawson South Exploration and Theodore South exploration mines, collectively, the Dawson Assets). Following the prospective closing of the Anglo acquisition, the Company is contracted to sell the Dawson Assets to BUMA. The acquisition is expected to close in the second quarter of 2025, subject to regulatory approvals, completion of preemptive rights processes and satisfaction of other customary closing conditions.

The Purchase Agreements contemplate an upfront cash payment of $2.05 billion, including a deposit of $75.0 million paid to Anglo upon execution of the Purchase Agreements, and fixed deferred cash payments totaling $725.0 million that will be payable in annual installments over a four-year period commencing on the first anniversary of the closing date of the acquisition, and additional contingent cash payments capped at $1.0 billion, comprised of (a) royalty payments contingent on the price of coal exceeding agreed-upon thresholds for each of the five years following the closing date of the acquisition and (b) payments contingent on the potential restart of the Grosvenor mine. The total consideration for the acquisition would be up to approximately $3.775 billion if the maximum amounts under the contingencies described above become payable.

Wards Well Acquisition

On April 16, 2024 the Company acquired the southern part of the Wards Well tenements (Wards Well) which are adjacent to the Company’s Centurion Mine in Queensland, Australia. The acquisition was accounted for as an asset acquisition. The acquired asset was measured at the cost of the acquisition based on the total consideration, allocated on the basis of relative fair value. The total consideration of $153.4 million, consisting of cash consideration of $134.4 million, cash transaction costs of $9.4 million and the non-cash settlement of existing receivables with the acquiree of $9.6 million, was recorded in “Property, plant, equipment and mine development, net” in the consolidated balance sheets as of December 31, 2024.

The agreement also includes an initial contingent royalty of up to $200 million. The royalty will only be payable once the Company has recovered its investment and development costs of Wards Well and if the average sales price achieved exceeds certain thresholds. No royalty is payable if the Company does not commence mining Wards Well. The Company will adjust the cost basis of the assets acquired if and when the contingent royalty is paid or becomes payable.

North Antelope Rochelle Mine Tornado

On June 23, 2023, the Company’s North Antelope Rochelle Mine sustained damage from a tornado which led to a temporary suspension of operations. The mine resumed operations on June 25, 2023. During the year ended December 31, 2023, the Company recorded a provision for loss of $12.2 million related to the tornado damage. The combined provision included $4.0 million for materials and supplies inventories, $1.0 million for buildings and equipment and $7.2 million for incremental repair costs. During the year ended December 31, 2024, the Company recorded $3.7 million for incremental repair costs related to the tornado damage.

Shoal Creek

On March 29, 2023, the Company’s Shoal Creek Mine experienced a fire. On June 20, 2023, the Company announced that the Shoal Creek Mine, in coordination with the Mine Safety and Health Administration, had safely completed localized sealing of the affected area of the mine. During the year ended December 31, 2023, the Company recorded a provision for loss of $28.7 million related to the fire, which included $17.8 million related to longwall development and other costs and $10.9 million for equipment deemed inoperable within the affected area of the mine.

In October 2023, the Company filed an insurance claim against applicable insurance policies with combined business interruption and property loss limits of $125 million above a $50 million deductible. During June 2024, the Company reached a settlement and recognized a $109.5 million insurance recovery, which the Company included in its results of operations during the year ended December 31, 2024. The Company collected all of the insurance recovery during the year ended December 31, 2024, and classified $10.9 million of the recovery within the “Cash Flows From Investing Activities” section of the consolidated statements of cash flows since this portion of the recovery related to equipment damage for which the Company previously recognized the provision for loss.

Port and Rail Capacity Assignment

During the year ended December 31, 2023, the Company entered into two agreements to assign the right to its excess port and rail capacity related to its Centurion Mine to unrelated parties. In the first transaction, the Company assigned its right in exchange for $30.0 million Australian dollars. Half of such amount was received by the Company upon entry into the agreement, and half was payable in June 2024, subject to certain conditions. In connection with the transaction, the Company recorded revenue of $19.2 million during the year ended December 31, 2023. In association with the completion of the Wards Well acquisition described above, the remaining receivable was settled as part of the consideration on April 16, 2024.

In the second transaction, the Company assigned its right in exchange for $10.0 million Australian dollars, all of which was received as of December 31, 2023. In connection with the transaction, the Company recorded revenue of $6.7 million during the year ended December 31, 2023.

(18)Earnings per Share (EPS)

Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding. As such, the Company includes the 2028 Convertible Notes and share-based compensation awards in its potentially dilutive securities. Generally, dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive.

For all but performance units, the potentially dilutive impact of the Company’s share-based compensation awards is determined using the treasury stock method. Under the treasury stock method, awards are treated as if they had been exercised with any proceeds used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and purchased is included in the diluted share computation. For performance units, their contingent features result in an assessment for any potentially dilutive common stock by using the end of the reporting period as if it were the end of the contingency period for all units granted. For further discussion of the Company’s share-based compensation awards, see Note 16. “Share-Based Compensation.”

A conversion of the 2028 Convertible Notes may result in payment in the Company’s common stock. For diluted EPS purposes, the potentially dilutive common stock is assumed to have been converted at the beginning of the period (or at the time of issuance, if later). In periods where the potentially dilutive common stock is included in the computation of diluted EPS, the numerator will be adjusted to add back tax adjusted interest expense, which includes the amortization of debt issuance costs, related to the convertible debt.

The computation of diluted EPS excluded aggregate share-based compensation awards of less than 0.1 million for all of the years ended December 31, 2024, 2023 and 2022, because to do so would have been anti-dilutive for those periods. Because the potential dilutive impact of such share-based compensation awards is calculated under the treasury stock method, anti-dilution generally occurs when the exercise prices or unrecognized compensation cost per share of such awards are higher than the Company’s average stock price during the applicable period. Anti-dilution also occurs when a company reports a net loss from continuing operations, and the dilutive impact of all share-based compensation awards are excluded accordingly.

The following illustrates the earnings allocation method utilized in the calculation of basic and diluted EPS:

(19)Management — Labor Relations

On December 31, 2024, the Company had approximately 5,600 employees worldwide, including approximately 4,300 hourly employees; the employee amounts exclude employees that were employed at operations classified as discontinued operations. Approximately 40% of those hourly employees were represented by organized labor unions and were employed by mines that generated 21% of the Company’s 2024 coal production from continuing operations. In the U.S., the hourly employees of one active mine and one inactive mine are represented by an organized labor union. In Australia, the coal mining industry is unionized and the majority of hourly workers employed at the Company’s Australian mining operations are members of trade unions. The Mining and Energy Union (MEU) generally represents the Company’s Australian subsidiaries’ hourly production and engineering employees, including those employed through contract mining relationships.

The following table presents the Company’s active and inactive mining operations as of December 31, 2024 in which the employees are represented by organized labor unions:

(1)The Company and Western Surface mine employees agreed to a new five-year term labor agreement in November 2024.

(2)The Company is currently negotiating a new labor agreement with the UMWA and employees.

(3)The Company is currently negotiating a new labor agreement with the MEU and employees.

(20)Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees

In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying consolidated balance sheets. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance-sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying consolidated balance sheets.

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

(1) Instruments support obligations related to pension and health care plans, workers’ compensation, property and casualty insurance, customer and vendor contracts and certain restoration ancillary to prior mining activities.

(2) Amounts do not include cash-collateralized letters of credit.

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

Surety Agreement Amendment and Collateral Requirements

In April 2023, the Company amended its existing agreement with the providers of its surety bond portfolio, dated November 6, 2020. Under the April 2023 amendment, the Company and its surety providers agreed to a maximum aggregate collateral amount based upon bonding levels which will vary prospectively as bonding levels increase or decrease. The amendment also extended the agreement through December 31, 2026. In order to maintain the maximum collateral agreement, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter. The minimum liquidity test requires the Company to maintain liquidity at the greater of $400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers, which was $495.5 million at December 31, 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 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 December 31, 2024.

At December 31, 2024, the Company’s maximum aggregate collateral amount was $522.0 million, which was comprised of $394.6 million in trust accounts and letters of credit of $127.4 million held for the benefit of certain surety providers. The amendment became effective on April 14, 2023, when the Company terminated a then-existing credit agreement which, as amended, provided for $237.2 million of capacity for irrevocable standby letters of credit (LC Facility).

LC Facility

The now-terminated LC Facility had an original capacity of $324.0 million and was subsequently amended at various dates to reduce its capacity and effect certain other changes, including in February 2023 to reduce capacity by $65.0 million, accelerate the expiration date to December 31, 2023 from December 31, 2024, and eliminate the prepayment premium due upon any reduction of commitments thereunder prior to July 29, 2023. The Company recorded early debt extinguishment losses of $8.8 million during the year ended December 31, 2023, primarily as a result of the February 2023 amendment and subsequent termination.

Prior to its termination, undrawn letters of credit under the LC Facility bore interest at 6.00% per annum and unused commitments were subject to a 0.50% per annum commitment fee.

Accounts Receivable Securitization

In 2017, the Company entered into the Sixth Amended and Restated Receivables Purchase Agreement, as amended from time to time (the Receivables Purchase Agreement.) The receivables securitization program authorized under the agreement (Securitization Program) is subject to customary events of default. The Receivables Purchase Agreement was amended in February 2023 to increase the available funding capacity from $175.0 million to $225.0 million and adjust the relevant interest rate for borrowings to a SOFR plus an applicable margin. Such funding is accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program. Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations, which has been the Company’s primary utilization. The accounts receivable securitization program was amended in January 2025 to extend its maturity to January 2028.

Borrowings under the Securitization Program bear interest at SOFR plus 2.1% per annum and remain outstanding throughout the term of the agreement, subject to the Company maintaining sufficient eligible receivables.

At December 31, 2024, the Company hadno outstanding borrowings and $60.4 million of letters of credit outstanding under the Securitization Program. Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $138.4 million at December 31, 2024. The Company was not required to post cash collateral under the Securitization Program at December 31, 2024.

The Company incurred interest and fees associated with the Securitization Program of $2.6 million, $3.6 million and $3.8 million during the years ended December 31, 2024, 2023 and 2022, respectively, which have been recorded as “Interest expense, net of capitalized interest” in the accompanying statements of operations.

Credit Support Facilities

In February 2022, the Company entered into an agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit, primarily to support reclamation bonding requirements. The agreement requires the Company to provide cash collateral at a level of 103% of the aggregate amount of letters of credit outstanding under the arrangement (limited to $5.0 million total excess collateralization.) Outstanding letters of credit bear a fixed fee in the amount of 0.75% per annum. The Company receives a variable deposit rate on the amount of cash collateral posted in support of letters of credit. The agreement has an initial expiration date of December 31, 2025. At December 31, 2024, letters of credit of $115.6 million were outstanding under the agreement, which were collateralized by cash of $119.1 million.

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. During the year ended December 31, 2024, the Company capitalized $1.4 million of debt issuance costs related to these bank guarantee facilities. 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 December 31, 2024, the bank guarantee facilities were backed by cash of $168.5 million.

Restricted Cash and Collateral

The following table summarizes the Company’s “Restricted cash and collateral” in the accompanying consolidated balance sheets. Restricted cash balances are held in controlled accounts with minimum balance requirements; withdrawals are subject to the approval of account beneficiaries, such as the Company’s surety providers, who have perfected security interests in the funds. The Company’s other cash collateral generally includes deposits held by regulatory authorities or financial institutions over which the Company has no control or ability to access. Portions of the restricted cash balances and deposits are held in accounts denominated in Australian dollars.

(1)Restricted cash balances are combined with unrestricted cash and cash equivalents in the accompanying consolidated statements of cash flows; changes between unrestricted cash and cash equivalents and restricted cash balances are thus not reflected in the operating, investing or financing activities therein. Changes in other cash collateral balances are reflected as operating activities therein.

(2)Surety trust accounts, the funding for collateralized letters of credit and cash supporting the bank guarantee facilities are comprised of highly liquid investments with original maturities of three months or less; interest and other earnings on such funds accrue to the Company.

(3)At December 31, 2024, the Australian dollar denominated balances supporting the bank guarantee facilities and the deposits with regulatory authorities were $271 million and $205 million, respectively. At December 31, 2023, the Australian dollar denominated balances supporting the bank guarantee facilities and the deposits with regulatory authorities were $95 million and $404 million, respectively.

Other

The Company is the lessee under numerous equipment and property leases. It is common in such commercial lease transactions for the Company, as the lessee, to agree to indemnify the lessor for the value of the property or equipment leased, should the property be damaged or lost during the course of the Company’s operations. The Company expects that losses with respect to leased property, if any, may be covered by insurance (subject to deductibles). The Company and certain of its subsidiaries have guaranteed other subsidiaries’ performance under various lease obligations. Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments, and the Company assumes that no amounts could be recovered from third parties.

Substantially all of the Company’s U.S. subsidiaries provide financial guarantees under long-term debt agreements entered into by the Company. The maximum amounts payable under the Company’s debt agreements are equal to the respective principal and interest payments.

(21)Commitments and Contingencies

Commitments

Unconditional Purchase Obligations

As of December 31, 2024, purchase commitments for capital expenditures were $58.7 million, all of which is obligated within the next 12 months.

In Australia, the Company has generally secured the ability to transport coal through rail contracts and ownership interests in five east coast coal export terminals that are primarily funded through take-or-pay arrangements with terms ranging up to 19 years. In the U.S., the Company has entered into certain long-term coal export terminal agreements to secure export capacity through the Gulf Coast. As of December 31, 2024, these Australian and U.S. commitments under take-or-pay arrangements totaled $1.0 billion, of which approximately $86 million is obligated within the next year.

Contingencies

From time to time, the Company or its subsidiaries are involved in legal proceedings arising in the ordinary course of business or related to indemnities or historical operations. The Company believes it has recorded adequate reserves for these liabilities. The Company discusses its significant legal proceedings below, including ongoing proceedings and those that impacted the Company’s consolidated results of operations for the periods presented.

Litigation and Matters Relating to Continuing Operations

Metropolitan Mine Stormwater Discharge. Significantly high rainfall in New South Wales, including unprecedented rain totals at the Metropolitan Mine site resulted in stormwater being discharged from the mine site on several occasions in 2021 and 2022. On September 6, 2023, the New South Wales Environment Protection Authority commenced a prosecution for five breaches of the Protection of the Environment Operations Act 1997 relating to the stormwater discharges. On March 15, 2024, the Company pled guilty to two of the charges related to water pollution and two charges related to a failure to adequately maintain plant and equipment were consolidated into one charge to which the Company also pled guilty. The remaining charge was discontinued. A sentencing hearing was held in November 2024 and the judgment has been reserved. The judgment is expected in the second quarter of 2025. During the year ended December 31, 2024, the Company recorded an immaterial provision to establish a current liability that the Company believes is probable and reasonably estimable.

Other

At times, the Company becomes a party to other disputes, including those related to contract miner performance, claims, lawsuits, arbitration proceedings, regulatory investigations and administrative procedures in the ordinary course of business in the U.S., Australia and other countries where the Company does business. Based on current information, the Company believes that such other pending or threatened proceedings are likely to be resolved without a material adverse effect on its consolidated financial condition, results of operations or cash flows. The Company reassesses the probability and estimability of contingent losses as new information becomes available.

(22)Segment and Geographic Information

The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal and Corporate and Other.

The Company’s seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of its thermal and metallurgical coal sold within Australia. Generally, revenue from individual countries varies year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. The Company classifies its seaborne mines within the Seaborne Thermal or Seaborne Metallurgical segments based on the primary customer base and coal reserve type of each mining operation. A small portion of the coal mined by the Seaborne Thermal segment is of a metallurgical grade. Similarly, a small portion of the coal mined by the Seaborne Metallurgical segment is of a thermal grade. Additionally, the Company may market some of its metallurgical coal products as a thermal coal product from time to time depending on market conditions.

The Company’s Seaborne Thermal operations consist of mines in New South Wales, Australia. The mines in that segment utilize both surface and underground extraction processes to mine low-sulfur, high Btu thermal coal.

The Company’s Seaborne Metallurgical operations consist of mines in Queensland, Australia, one in New South Wales, Australia and one in Alabama, USA. The mines in that segment utilize both surface and underground extraction processes to mine various qualities of metallurgical coal. The metallurgical coal qualities include hard coking coal, semi-hard coking coal, semi-soft coking coal and pulverized coal injection coal.

The Company’s thermal operating segments in the U.S. are focused on the mining, preparation and sale of thermal coal, sold primarily to electric utilities in the U.S. under long-term contracts, with a relatively small portion sold as international exports as conditions warrant. The Company’s Powder River Basin operations consist of its mines in Wyoming. The mines in that segment are characterized by surface mining extraction processes, coal with a lower sulfur content and Btu and higher customer transportation costs (due to longer shipping distances). The Company’s Other U.S. Thermal operations reflect the aggregation of its Illinois, Indiana, New Mexico and Colorado mining operations. The mines in that segment are characterized by a mix of surface and underground mining extraction processes, coal with a higher sulfur content and Btu and lower customer transportation costs (due to shorter shipping distances). Geologically, the Company’s Powder River Basin operations mine sub-bituminous coal deposits and its Other U.S. Thermal operations mine both bituminous and sub-bituminous coal deposits.

The Company’s Corporate and Other segment includes selling and administrative expenses, results from equity method investments, trading and brokerage activities, minimum charges on certain transportation-related contracts, the closure of inactive mining sites, the impact of foreign currency remeasurement and certain commercial matters.

The Company’s CODM, defined as the President and Chief Executive Officer, uses Adjusted EBITDA as the primary financial metric to measure each segment’s operating performance against expected results and to allocate resources, including capital investment in mining operations and potential expansions. Adjusted EBITDA is a non-GAAP financial measure defined as income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance, as displayed in the reconciliations below. Management believes this non-GAAP measure is used by investors to measure the Company’s operating performance. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

Segment results for the year ended December 31, 2024 were as follows:

Segment results for the year ended December 31, 2023 were as follows:

Segment results for the year ended December 31, 2022 were as follows:

(1) Other expenses for the mining operations primarily include lease expense; non-sales related taxes; insurance expense; joint facility charges; and credits related to the capitalization of costs to the balance sheet. For the year ended December 31, 2024, the Seaborne Metallurgical segment includes $80.8 million related to the portion of the Shoal Creek insurance recovery that was applicable to incremental costs and business interruption recoveries.

Total assets are reflected at the division level only for the Company’s operating segments and are not allocated between each individual segment as such information is not regularly reviewed by the Company’s CODM. Further, some assets service more than one segment within the division and an allocation of such assets would not be meaningful or representative on a segment by segment basis. Assets related to closed, suspended or otherwise inactive mines are included within the Corporate and Other category. Assets related to the Company’s Centurion Mine, which is in development and targeted to commence longwall production in the first quarter of 2026, are included in the Seaborne division level as of both December 31, 2024 and 2023.

The following table presents total assets at the division level:

The Company defines its long-lived assets as its property, plant, equipment and mine development, net and operating lease right-of-use assets. The following table presents the geographic location of the Company’s long-lived assets:

A reconciliation of consolidated income from continuing operations before income taxes to Adjusted EBITDA follows:

The following table presents revenue as a percent of total revenue from external customers by geographic region:

The Company attributes revenue to individual countries based on the location of the physical delivery of the coal.