# PEABODY ENERGY CORP (BTU) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from PEABODY ENERGY CORP's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1064728/000106472825000018/btu-20241231.htm
Accession: 0001064728-25-000018
Filing date: 2025-02-20
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/BTU/
All MD&A years: /company/BTU/mda/
Previous year: /company/BTU/mda/fy2023/ (FY 2023)
Next year: /company/BTU/mda/fy2025/ (FY 2025)

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Company’s discussion and analysis of the year ended December 31, 2024 compared to the year ended December 31, 2023 is included herein. For discussion and analysis of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Peabody’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 23, 2024 and is incorporated by reference herein.

Non-GAAP Financial Measures

The following discussion of Peabody’s results of operations includes references to and analysis of Adjusted EBITDA and Total Segment Costs, which are financial measures not recognized in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Adjusted EBITDA is used by the chief operating decision maker, defined as Peabody’s President and Chief Executive Officer, as the primary financial metric to measure each segment’s operating performance against expected results and to allocate resources, including capital investment in mining operations and potential expansions. Total Segment Costs is also used by management as a component of a metric to measure each segment’s operating performance.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","58"]]
[[/GREPCENT_TABLE]]

Table of Contents

Also included in the following discussion of Peabody’s results of operations are references to Revenue per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton for each reporting segment. These metrics are used by management to measure each reporting segment’s operating performance. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the reporting segment level. The Company considers all measures reported on a per ton basis to be operating/statistical measures; however, the Company includes reconciliations of the related non-GAAP financial measures (Adjusted EBITDA and Total Segment Costs) in the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 7.

Peabody believes non-GAAP measures are used by investors to measure its operating performance. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Refer to the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 7 for definitions and reconciliations to the most comparable measures under U.S. GAAP.

Overview

In 2024, Peabody produced and sold 118.1 million and 118.0 million tons of coal, respectively, from continuing operations.

As of December 31, 2024, 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. Peabody’s Seaborne Thermal and Seaborne Metallurgical segments contributed approximately 70% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2024.

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. Peabody’s Powder River Basin and Other U.S. Thermal segments contributed approximately 30% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2024.

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.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","59"]]
[[/GREPCENT_TABLE]]

Table of Contents

Resource Management. As of December 31, 2024, Peabody controlled approximately 2.1 billion tons of proven and probable coal reserves, 3.6 billion tons of coal resources and approximately 345,000 acres of surface property through ownership and lease agreements. The Company has an ongoing asset optimization program whereby its property management group regularly reviews these coal reserves, coal resources and surface properties for opportunities to generate earnings and cash flow through the sale or exchange of non-strategic coal reserves, coal resources and surface lands. These surface lands include acres where Peabody has completed post-mining reclamation. In addition, the Company generates revenue through royalties from coal reserves and oil and gas rights leased to third parties, farm income from surface lands under third-party contracts and lease income from surface lands under contracts with renewable energy ventures.

Middlemount Mine. Peabody owns a 50% equity interest in Middlemount, which owns the Middlemount Mine in Queensland, Australia. The mine predominantly produces semi-hard coking coal and low-volatile pulverized coal injection (LV PCI) coal for sale into seaborne coal markets through Abbot Point Coal Terminal, with some capacity also secured at Dalrymple Bay Coal Terminal. Mining operations first commenced at the Middlemount Mine in late 2011. During the years ended December 31, 2024 and 2023, the mine sold 1.3 million and 1.2 million tons of coal, respectively (on a 50% basis).

Summary

Spot pricing for premium low-vol hard coking coal (Premium HCC), premium low-vol pulverized coal injection (Premium PCI) coal, Newcastle index thermal coal and API 5 index thermal coal, and prompt month pricing for PRB 8,800 Btu/Lb coal and Illinois Basin 11,500 Btu/Lb coal during the year ended December 31, 2024 is set forth in the table below.

The seaborne pricing included in the table below is not necessarily indicative of the pricing the Company realized during the year ended December 31, 2024 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized. The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.

In the U.S., the pricing included in the table below is also not necessarily indicative of the pricing the Company realized during the year ended December 31, 2024 since the Company generally sells coal under long-term contracts where pricing is determined based on various factors. Such long-term contracts in the U.S. may vary significantly in many respects, including price adjustment features, price reopener terms, coal quality requirements, quantity parameters, permitted sources of supply, treatment of environmental constraints, extension options, force majeure and termination and assignment provisions. Competition from alternative fuels such as natural gas and other fuel sources may also impact the Company’s realized pricing.

[[GREPCENT_TABLE]]
[["","","High","","Low","","Average","","December 31, 2024","","February 14, 2025"],["Premium HCC (1)","","$","338.10","","","$","180.00","","","$","240.37","","","$","196.50","","","$","190.25"],["Premium PCI coal (1)","","200.00","","","140.00","","","165.04","","","150.00","","","141.00"],["Newcastle index thermal coal (1)","","150.05","","","116.08","","","135.24","","","119.75","","","101.80"],["API 5 index thermal coal (1)","","96.66","","","81.77","","","89.23","","","84.00","","","77.51"],["PRB 8,800 Btu/Lb coal (2)","","14.10","","","13.40","","","13.74","","","14.10","","","14.20"],["Illinois Basin 11,500 Btu/Lb coal (2)","","44.00","","","40.00","","","41.61","","","43.25","","","43.50"]]
[[/GREPCENT_TABLE]]

(1)    Prices expressed per metric tonne.

(2)    Prices expressed per short ton.

Within the global coal industry, supply and demand for its products and the supplies used for mining continue to be impacted by the ongoing Russian-Ukrainian conflict. As future developments related to the Russian-Ukrainian conflict and geopolitical instability in key energy producing regions are unknown, the global coal industry data for the twelve months ended December 31, 2024 presented herein may not be indicative of their ultimate impacts.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","60"]]
[[/GREPCENT_TABLE]]

Table of Contents

Within the seaborne metallurgical coal market, coking coal prices retreated from a high base during the twelve months ended December 31, 2024. Parts of the global steel market reported tepid demand and thin profit margins during this period, restricting demand growth for metallurgical coal. In China, weakness in the property sector contributed to lower domestic steel demand and steel production in 2024 and supported increased steel exports. The increased availability of competitively priced Chinese imports has placed pressure on steel margins for steel producers in other countries. Despite this, India recorded year-over-year steel production growth supported by increased domestic demand and commissioning of new steelmaking facilities. Meanwhile, the global supply of coking coal has been generally sufficient to meet coking coal demand during the twelve months ended December 31, 2024, despite various supply disruption events such as shipping interruptions at the U.S.’s Baltimore, Maryland port. In the PCI segment, prices traded at a wide discount to coking coal early in the year, caused in part by reduced steel making productivity targets under thin margin conditions. PCI price relativities to coking coal have since improved. Overall, the market for metallurgical coal remains marginally balanced and exposed to volatility, influenced by the rate of exports from Australia and economic performance in China, India and elsewhere.

Within the seaborne thermal coal market, global thermal coal prices have remained relatively stable throughout the twelve months ended December 31, 2024, driven by healthy supply meeting elevated demand in Asian markets. In China, overall total generation demand has been elevated while domestic coal production has only grown slightly, which has driven stronger coal import demand year-over-year through the twelve months ended December 31, 2024. In India, strong growth in coal generation has supported increased import demand, despite elevated domestic coal production. Looking ahead, global thermal coal markets remain turbulent amid winter weather outlooks in the Northern Hemisphere, lower industrial activity, as well as volatile global natural gas markets.

In the U.S., overall electricity demand increased approximately 3% year-over-year. Through the twelve months ended December 31, 2024, electricity generation from thermal coal has decreased year-over-year driven by continued low natural gas prices and stronger renewable generation. Coal’s share of electricity generation has declined to approximately 15% for the twelve months ended December 31, 2024, while wind and solar’s combined generation share is at 17% and the share of natural gas generation has remained level at 43%. U.S. coal inventories have modestly declined through December 31, 2024, with stockpiles less than 10 million tons below levels seen at the end of 2023. During the twelve months ended December 31, 2024, utility consumption of PRB coal has declined compared to the prior year period.

Planned Acquisition

On November 25, 2024, Peabody entered into definitive agreements with Anglo, to acquire 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.

Peabody has secured a bridge facility commitment to finance the acquisition. The Company intends to replace the bridge facility with permanent financing, including debt capacity, additional investment by existing joint venture partners and other financing to supplement as warranted.

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. See Note 10. “Long-term Debt” and Note 17. “Other Events” for further information.

Centurion Mine

Peabody’s development of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, continues to advance as planned. During the year ended December 31, 2024, four continuous miners units were put into production and the first development coal was produced, washed and sold. The Company is targeting the commencement of longwall production in the first quarter of 2026. Approximately $300 million of the $489 million of capital expenditures to reach longwall production had been completed as of December 31, 2024.

Other

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 completed for 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.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","61"]]
[[/GREPCENT_TABLE]]

Table of Contents

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.

Shoal Creek Insurance Recovery. On March 29, 2023, the Company’s Shoal Creek Mine experienced a fire. 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.

Results of Operations

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

The decrease in income from continuing operations, net of income taxes for the year ended December 31, 2024 compared to the prior year ($408.7 million) was primarily driven by lower revenue ($710.0 million) due to lower seaborne coal pricing, volume decreases in the U.S. thermal segments and no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year. This unfavorable variance was partially offset by a lower income tax provision ($200.0 million) and the current year insurance recovery at the Shoal Creek Mine ($109.5 million).

Adjusted EBITDA for the year ended December 31, 2024 reflected a year-over-year decrease of $492.2 million.

Tons Sold

The following table presents tons sold by operating segment:

[[GREPCENT_TABLE]]
[["","","","Increase (Decrease)"],["","Year Ended December 31,","","to Volumes"],["","2024","","2023","","Tons","","%"],["","(Tons in millions)"],["Seaborne Thermal","16.4","","","15.5","","","0.9","","","5.8","%"],["Seaborne Metallurgical","7.3","","","6.9","","","0.4","","","5.8","%"],["Powder River Basin","79.6","","","87.2","","","(7.6)","","","(8.7)","%"],["Other U.S. Thermal","14.6","","","16.2","","","(1.6)","","","(9.9)","%"],["Total tons sold from operating segments","117.9","","","125.8","","","(7.9)","","","(6.3)","%"],["Corporate and Other","0.1","","","0.4","","","(0.3)","","","(75.0)","%"],["Total tons sold","118.0","","","126.2","","","(8.2)","","","(6.5)","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","62"]]
[[/GREPCENT_TABLE]]

Table of Contents

Supplemental Financial Data

The following table presents supplemental financial data by operating segment:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,","","(Decrease) Increase"],["","2024","","2023","","$","","%"],["Revenue per Ton (1)"],["Seaborne Thermal","$","73.88","","","$","85.94","","","$","(12.06)","","","(14.0)","%"],["Seaborne Metallurgical","144.97","","","188.66","","","(43.69)","","","(23.2)","%"],["Powder River Basin","13.81","","","13.74","","","0.07","","","0.5","%"],["Other U.S. Thermal","56.38","","","54.77","","","1.61","","","2.9","%"],["Costs per Ton (1) (2)"],["Seaborne Thermal","$","47.71","","","$","48.66","","","$","(0.95)","","","(2.0)","%"],["Seaborne Metallurgical","122.77","","","125.18","","","(2.41)","","","(1.9)","%"],["Powder River Basin","12.07","","","11.98","","","0.09","","","0.8","%"],["Other U.S. Thermal","46.04","","","41.98","","","4.06","","","9.7","%"],["Adjusted EBITDA Margin per Ton (1) (2)"],["Seaborne Thermal","$","26.17","","","$","37.28","","","$","(11.11)","","","(29.8)","%"],["Seaborne Metallurgical","22.20","","","63.48","","","(41.28)","","","(65.0)","%"],["Powder River Basin","1.74","","","1.76","","","(0.02)","","","(1.1)","%"],["Other U.S. Thermal","10.34","","","12.79","","","(2.45)","","","(19.2)","%"]]
[[/GREPCENT_TABLE]]

(1)This is an operating/statistical measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.

(2)Includes revenue-based production taxes and royalties; excludes depreciation, depletion and amortization; asset retirement obligation expenses; selling and administrative expenses; restructuring charges; asset impairment; amortization of take-or-pay contract-based intangibles; insurance recoveries; and certain other costs related to post-mining activities.

Revenue

The following table presents revenue by reporting segment:

[[GREPCENT_TABLE]]
[["","","","Decrease"],["","Year Ended December 31,","","to Revenue"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Seaborne Thermal","$","1,213.9","","","$","1,329.7","","","$","(115.8)","","","(8.7)","%"],["Seaborne Metallurgical","1,055.6","","","1,301.9","","","(246.3)","","","(18.9)","%"],["Powder River Basin","1,098.8","","","1,198.1","","","(99.3)","","","(8.3)","%"],["Other U.S. Thermal","822.6","","","888.2","","","(65.6)","","","(7.4)","%"],["Corporate and Other","45.8","","","228.8","","","(183.0)","","","(80.0)","%"],["Revenue","$","4,236.7","","","$","4,946.7","","","$","(710.0)","","","(14.4)","%"]]
[[/GREPCENT_TABLE]]

Seaborne Thermal. The decrease in segment revenue during the year ended December 31, 2024 compared to the prior year was due to unfavorable realized prices ($228.0 million), offset by favorable volume ($112.2 million).

Seaborne Metallurgical. Segment revenue decreased during the year ended December 31, 2024 compared to the prior year due to unfavorable realized prices and volume ($356.3 million) from the Australian operations. These decreases were partially offset by favorable results from the Shoal Creek Mine ($110.0 million) due to favorable volume which offset unfavorable realized prices.

Powder River Basin. Segment revenue decreased during the year ended December 31, 2024 compared to the prior year primarily due to unfavorable volume ($100.2 million) resulting from decreased demand driven by low natural gas pricing and mild weather.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","63"]]
[[/GREPCENT_TABLE]]

Table of Contents

Other U.S. Thermal. The decrease in segment revenue during the year ended December 31, 2024 compared to the prior year was due to unfavorable volume ($49.8 million) resulting from decreased demand driven by low natural gas pricing and mild weather and unfavorable realized prices ($34.9 million), partially offset by increased revenue from sales contract cancellation settlements ($19.1 million).

Corporate and Other. Segment revenue decreased during the year ended December 31, 2024 compared to the prior year due to no unrealized mark-to-market gains from derivative contracts related to forecasted sales in the current year ($159.0 million) as all derivative contracts settled in 2023 and prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($25.9 million).

Segment Costs

The following table presents costs by reporting segment:

[[GREPCENT_TABLE]]
[["","","","Increase (Decrease)"],["","Year Ended December 31,","","to Total Segment Costs"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Seaborne Thermal","$","783.9","","","$","752.9","","","$","31.0","","","4.1","%"],["Seaborne Metallurgical","893.9","","","863.8","","","30.1","","","3.5","%"],["Powder River Basin","960.2","","","1,044.4","","","(84.2)","","","(8.1)","%"],["Other U.S. Thermal","671.8","","","680.7","","","(8.9)","","","(1.3)","%"],["Corporate and Other","64.5","","","11.6","","","52.9","","","456.0","%"],["Total Segment Costs (1)","$","3,374.3","","","$","3,353.4","","","$","20.9","","","0.6","%"]]
[[/GREPCENT_TABLE]]

(1)This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.

Seaborne Thermal. The increase in segment costs during the year ended December 31, 2024 compared to the prior year was primarily driven by favorable volume (0.9 million tons) which resulted in higher sales related costs ($16.9 million) and higher variable costs for labor, repairs and outside services ($12.8 million), slightly offset by favorable commodity pricing ($8.4 million).

Seaborne Metallurgical. Segment costs increased during the year ended December 31, 2024 compared to the prior year due to increased volume from the Shoal Creek Mine ($56.1 million), higher costs at the Australian operations primarily due to production challenges ($21.3 million) and increased taxes and insurance ($11.0 million) driven by Australian carbon taxes. The increases were offset by lower sales related costs ($66.2 million) at the Australian operations due to lower sales volumes and lower pricing.

Powder River Basin. The decrease in segment costs during the year ended December 31, 2024 compared to the prior year was primarily driven by unfavorable volume (7.6 million tons) which resulted in lower sales price sensitive costs ($44.4 million) and lower variable costs for labor, repairs and outside services ($32.3 million) and favorable commodity pricing ($21.7 million). These decreases were partially offset by increased lease spend ($14.3 million).

Other U.S. Thermal. The decrease in segment costs during the year ended December 31, 2024 compared to the prior year was primarily driven by lower costs for labor, repairs and outside services due to lower sales volume (1.6 million tons).

Corporate and Other. Segment costs increased during the year ended December 31, 2024 compared to the prior year primarily due to unfavorable foreign currency rate changes.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","64"]]
[[/GREPCENT_TABLE]]

Table of Contents

Adjusted EBITDA

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

[[GREPCENT_TABLE]]
[["","","","Decrease to"],["","Year Ended December 31,","","Adjusted EBITDA"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Seaborne Thermal","$","430.0","","","$","576.8","","","$","(146.8)","","","(25.5)","%"],["Seaborne Metallurgical","242.5","","","438.1","","","(195.6)","","","(44.6)","%"],["Powder River Basin","138.6","","","153.7","","","(15.1)","","","(9.8)","%"],["Other U.S. Thermal","150.8","","","207.5","","","(56.7)","","","(27.3)","%"],["Corporate and Other","(90.2)","","","(12.2)","","","(78.0)","","","(639.3)","%"],["Adjusted EBITDA (1)","$","871.7","","","$","1,363.9","","","$","(492.2)","","","(36.1)","%"]]
[[/GREPCENT_TABLE]]

(1)This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.

Seaborne Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2024 compared to the same period in the prior year as a result of lower realized prices net of sales price sensitive costs ($225.2 million), partially offset by favorable volume and mix variances ($58.0 million).

Seaborne Metallurgical. Segment Adjusted EBITDA decreased during the year ended December 31, 2024 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($294.5 million) and unfavorable operational costs ($106.3 million). These decreases were offset by favorable volume ($112.0 million), despite the lock outages during 2024, driven by increased production from the Shoal Creek Mine following the fire in the first quarter of 2023, and the Shoal Creek insurance recovery ($80.8 million).

Powder River Basin. Segment Adjusted EBITDA decreased during the year ended December 31, 2024 compared to the same period in the prior year as a result of unfavorable volume ($50.3 million) and increased lease spend ($14.3 million). These decreases were offset by lower costs for labor, repairs and outside services ($32.3 million) and favorable commodity pricing ($21.7 million).

Other U.S. Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2024 compared to the same period in the prior year due to unfavorable volume ($63.1 million) and lower realized prices net of sales price sensitive costs ($34.5 million). These decreases were offset by increased sales contract cancellation settlements ($19.1 million) and lower costs for labor, repairs and outside services ($12.0 million).

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

[[GREPCENT_TABLE]]
[["","","","Decrease"],["","Year Ended December 31,","","to Income"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Middlemount (1)","$","13.1","","","$","13.2","","","$","(0.1)","","","(0.8)","%"],["Resource management activities (2)","19.2","","","21.0","","","(1.8)","","","(8.6)","%"],["Selling and administrative expenses","(91.0)","","","(90.7)","","","(0.3)","","","(0.3)","%"],["Other items, net (3)","(31.5)","","","44.3","","","(75.8)","","","(171.1)","%"],["Corporate and Other Adjusted EBITDA","$","(90.2)","","","$","(12.2)","","","$","(78.0)","","","(639.3)","%"]]
[[/GREPCENT_TABLE]]

(1)Middlemount’s results are before the impact of related changes in amortization of basis difference.

(2)Includes gains (losses) on certain surplus coal reserve, coal resource and surface land sales and property management costs and revenue.

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

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","65"]]
[[/GREPCENT_TABLE]]

Table of Contents

Corporate and Other Adjusted EBITDA decreased during the year ended December 31, 2024 compared to the same period in the prior year due to the unfavorable net impact of foreign currency rate changes ($28.4 million), prior year revenue related to the Company’s assignment of rights to its excess port and rail capacity ($25.9 million) and unfavorable trading results ($19.0 million).

Income From Continuing Operations, Net of Income Taxes

The following table presents income from continuing operations, net of income taxes:

[[GREPCENT_TABLE]]
[["","","","(Decrease) Increase to Income"],["","Year Ended December 31,"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Adjusted EBITDA (1)","$","871.7","","","$","1,363.9","","","$","(492.2)","","","(36.1)","%"],["Depreciation, depletion and amortization","(343.0)","","","(321.4)","","","(21.6)","","","(6.7)","%"],["Asset retirement obligation expenses","(48.9)","","","(50.5)","","","1.6","","","3.2","%"],["Restructuring charges","(4.4)","","","(3.3)","","","(1.1)","","","(33.3)","%"],["Transaction costs related to business combinations","(10.3)","","","\u2014","","","(10.3)","","","n.m."],["Asset impairment","\u2014","","","(2.0)","","","2.0","","","100.0","%"],["Provision for NARM and Shoal Creek losses","(3.7)","","","(40.9)","","","37.2","","","91.0","%"],["Shoal Creek insurance recovery - property damage","28.7","","","\u2014","","","28.7","","","n.m."],["Changes in amortization of basis difference related to equity affiliates","1.8","","","1.6","","","0.2","","","12.5","%"],["Interest expense, net of capitalized interest","(46.9)","","","(59.8)","","","12.9","","","21.6","%"],["Net loss on early debt extinguishment","\u2014","","","(8.8)","","","8.8","","","100.0","%"],["Interest income","71.0","","","76.8","","","(5.8)","","","(7.6)","%"],["Net mark-to-market adjustment on actuarially determined liabilities","6.1","","","0.3","","","5.8","","","1,933.3","%"],["Unrealized gains on derivative contracts related to forecasted sales","\u2014","","","159.0","","","(159.0)","","","(100.0)","%"],["Unrealized (losses) gains on foreign currency option contracts","(9.0)","","","7.4","","","(16.4)","","","(221.6)","%"],["Take-or-pay contract-based intangible recognition","3.0","","","2.5","","","0.5","","","20.0","%"],["Income tax provision","(108.8)","","","(308.8)","","","200.0","","","64.8","%"],["Income from continuing operations, net of income taxes","$","407.3","","","$","816.0","","","$","(408.7)","","","(50.1)","%"]]
[[/GREPCENT_TABLE]]

(1)This is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section below for definitions and reconciliations to the most comparable measures under U.S. GAAP.

Depreciation, Depletion and Amortization. The following table presents a summary of depreciation, depletion and amortization expense by reporting segment:

[[GREPCENT_TABLE]]
[["","","","(Decrease) Increase"],["","Year Ended December 31,","","to Income"],["","2024","","2023","$","","%"],["","(Dollars in millions)"],["Seaborne Thermal","$","(121.9)","","","$","(103.7)","","","$","(18.2)","","","(17.6)","%"],["Seaborne Metallurgical","(93.2)","","","(91.5)","","","(1.7)","","","(1.9)","%"],["Powder River Basin","(55.3)","","","(48.8)","","","(6.5)","","","(13.3)","%"],["Other U.S. Thermal","(64.8)","","","(69.0)","","","4.2","","","6.1","%"],["Corporate and Other","(7.8)","","","(8.4)","","","0.6","","","7.1","%"],["Total","$","(343.0)","","","$","(321.4)","","","$","(21.6)","","","(6.7)","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","66"]]
[[/GREPCENT_TABLE]]

Table of Contents

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

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["Seaborne Thermal","$","2.14","","","$","2.13"],["Seaborne Metallurgical","2.89","","","2.16"],["Powder River Basin","0.35","","","0.31"],["Other U.S. Thermal","1.63","","","1.23"]]
[[/GREPCENT_TABLE]]

Depreciation, depletion and amortization expense increased during the year ended December 31, 2024 compared to the same period in the prior year primarily due to increased depreciation resulting from asset additions and shortened mine lives. Depletion expense increased primarily as a result of increased volume from the Shoal Creek Mine. The increases in the weighted-average depletion rate per ton for both the Seaborne Metallurgical and the Other U.S. Thermal segments during the year ended December 31, 2024 compared to the same period in the prior year reflect the impact of volume and mix variances across the segments.

Transaction Costs Related to Business Combinations. The charges recorded during the current year period relate to the planned acquisition of multiple metallurgical coal mines from Anglo which was announced during the fourth quarter of 2024. Refer to Note 17. “Other Events” to the accompanying consolidated financial statements for further information regarding the planned acquisition, which information is incorporated herein by reference.

Provision for NARM and Shoal Creek Losses. The provision recorded during the prior year period was for losses related to the events at the NARM and Shoal Creek Mines as discussed in Note 17. “Other Events” to the accompanying consolidated financial statements. Incremental repair costs related to the tornado damage at NARM were recorded during the year ended December 31, 2024.

Shoal Creek Insurance Recovery - Property Damage. During June 2024, the Company reached a settlement related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 17. “Other Events” in the accompanying consolidated financial statements. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to losses recognized at the time of the insurance recovery related to longwall development and equipment deemed inoperable within the affected area of the mine, which consisted of $28.7 million recognized during the year ended December 31, 2023. The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, is included in Adjusted EBITDA for the year ended December 31, 2024.

Interest Expense, Net of Capitalized Interest. The decrease in interest expense during the year ended December 31, 2024 compared to the prior year was driven by lower interest and fees for financial assurance instruments and the capitalization of interest related to the development of the Centurion Mine.

Net Loss on Early Debt Extinguishment. The net loss on early debt extinguishment recognized during the prior year was primarily related to the Company’s terminated letter of credit facility, as further discussed in Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” to the accompanying consolidated financial statements.

Net Mark-to-Market Adjustment on Actuarially Determined Liabilities. The gain recorded during the year ended December 31, 2024 was driven by the favorable impacts of changes for the postretirement benefit plans related to updated claims experience ($12.4 million) and increases to the discount rates for all actuarially determined liabilities ($5.7 million). These increases were offset by negative adjustments to Peabody’s black lung and traumatic workers’ compensation liabilities resulting from increased claims ($8.8 million) and mark-to-market losses on pension plan assets ($5.4 million).

The gain recorded during the year ended December 31, 2023 was driven by the favorable impacts of changes for the postretirement benefit plans related to updated claims experience ($5.4 million) and mark-to-market gains on pension and postretirement benefit plan assets ($3.9 million). These increases were offset by decreases to the discount rates for all actuarially determined liabilities ($6.4 million) and a negative adjustment related to Peabody’s black lung liabilities ($2.6 million).

Unrealized Gains on Derivative Contracts Related to Forecasted Sales. The prior year unrealized gains primarily relate to mark-to-market activity on derivative contracts related to forecasted coal sales. As further discussed in Note 6. “Derivatives and Fair Value Measurements” to the accompanying consolidated financial statements, all derivative contracts related to forecasted coal sales settled in 2023.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","67"]]
[[/GREPCENT_TABLE]]

Table of Contents

Unrealized (Losses) Gains on Foreign Currency Option Contracts. Unrealized (losses) gains primarily relate to mark-to-market activity on foreign currency option contracts. For additional information, refer to Note 6. “Derivatives and Fair Value Measurements” to the accompanying consolidated financial statements.

Income Tax Provision. The decrease in the income tax provision recorded during the year ended December 31, 2024 compared to the prior year period was primarily due to lower pretax income. Refer to Note 8. “Income Taxes” to the accompanying consolidated financial statements for additional information.

Net Income Attributable to Common Stockholders

The following table presents net income attributable to common stockholders:

[[GREPCENT_TABLE]]
[["","","","Decrease"],["","Year Ended December 31,","","to Income"],["","2024","","2023","","$","","%"],["","(Dollars in millions)"],["Income from continuing operations, net of income taxes","$","407.3","","","$","816.0","","","$","(408.7)","","","(50.1)","%"],["Loss from discontinued operations, net of income taxes","(3.8)","","","(0.4)","","","(3.4)","","","(850.0)","%"],["Net income","403.5","","","815.6","","","(412.1)","","","(50.5)","%"],["Less: Net income attributable to noncontrolling interests","32.6","","","56.0","","","(23.4)","","","(41.8)","%"],["Net income attributable to common stockholders","$","370.9","","","$","759.6","","","$","(388.7)","","","(51.2)","%"]]
[[/GREPCENT_TABLE]]

Net Income Attributable to Noncontrolling Interests. The decrease in net income attributable to noncontrolling interests during the year ended December 31, 2024 compared to the prior year period was primarily due to a decline in the financial results of Peabody’s majority-owned Wambo operations in which there is an outside non-controlling interest.

Diluted Earnings per Share (EPS)

The following table presents diluted EPS:

[[GREPCENT_TABLE]]
[["","","","Decrease to"],["","Year Ended December 31,","","EPS"],["","2024","","2023","","$","","%"],["Diluted EPS attributable to common stockholders:"],["Income from continuing operations","$","2.73","","","$","5.00","","","$","(2.27)","","","(45.4)","%"],["Loss from discontinued operations","(0.03)","","","\u2014","","","(0.03)","","","n.m."],["Net income attributable to common stockholders","$","2.70","","","$","5.00","","","$","(2.30)","","","(46.0)","%"]]
[[/GREPCENT_TABLE]]

Diluted EPS is commensurate with the changes in results from continuing operations and discontinued operations during that period. Diluted EPS reflects weighted average diluted common shares outstanding of 141.9 million and 154.3 million for the years ended December 31, 2024 and 2023, respectively.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","68"]]
[[/GREPCENT_TABLE]]

Table of Contents

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA is 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.

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Dollars in millions)"],["Income from continuing operations, net of income taxes","$","407.3","","","$","816.0"],["Depreciation, depletion and amortization","343.0","","","321.4"],["Asset retirement obligation expenses","48.9","","","50.5"],["Restructuring charges","4.4","","","3.3"],["Transaction costs related to business combinations","10.3","","","\u2014"],["Asset impairment","\u2014","","","2.0"],["Provision for NARM and Shoal Creek losses","3.7","","","40.9"],["Shoal Creek insurance recovery - property damage","(28.7)","","","\u2014"],["Changes in amortization of basis difference related to equity affiliates","(1.8)","","","(1.6)"],["Interest expense, net of capitalized interest","46.9","","","59.8"],["Net loss on early debt extinguishment","\u2014","","","8.8"],["Interest income","(71.0)","","","(76.8)"],["Net mark-to-market adjustment on actuarially determined liabilities","(6.1)","","","(0.3)"],["Unrealized gains on derivative contracts related to forecasted sales","\u2014","","","(159.0)"],["Unrealized losses (gains) on foreign currency option contracts","9.0","","","(7.4)"],["Take-or-pay contract-based intangible recognition","(3.0)","","","(2.5)"],["Income tax provision","108.8","","","308.8"],["Total Adjusted EBITDA","$","871.7","","","$","1,363.9"]]
[[/GREPCENT_TABLE]]

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

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Dollars in millions)"],["Operating costs and expenses","$","3,420.9","","","$","3,385.1"],["Unrealized (losses) gains on foreign currency option contracts","(9.0)","","","7.4"],["Take-or-pay contract-based intangible recognition","3.0","","","2.5"],["Net periodic benefit credit, excluding service cost","(40.6)","","","(41.6)"],["Total Segment Costs","$","3,374.3","","","$","3,353.4"]]
[[/GREPCENT_TABLE]]

The following table presents Total Segment Costs by reporting segment:

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Dollars in millions)"],["Seaborne Thermal","$","783.9","","","$","752.9"],["Seaborne Metallurgical","893.9","","","863.8"],["Powder River Basin","960.2","","","1,044.4"],["Other U.S. Thermal","671.8","","","680.7"],["Corporate and Other","64.5","","","11.6"],["Total Segment Costs","$","3,374.3","","","$","3,353.4"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","69"]]
[[/GREPCENT_TABLE]]

Table of Contents

Revenue per Ton and Adjusted EBITDA Margin per Ton are equal to revenue by segment and Adjusted EBITDA by segment (excluding insurance recoveries), respectively, divided by segment tons sold. Costs per Ton is equal to Revenue per Ton less Adjusted EBITDA Margin per Ton.

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

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2024"],["","Seaborne Thermal","","Seaborne Metallurgical","","Powder River Basin","","Other U.S. Thermal"],["","(Amounts in millions, except per ton data)"],["Tons sold","16.4","","","7.3","","","79.6","","","14.6"],["Revenue","$","1,213.9","","","$","1,055.6","","","$","1,098.8","","","$","822.6"],["Total Segment Costs","783.9","","","893.9","","","960.2","","","671.8"],["Adjusted EBITDA, excluding Shoal Creek insurance recovery","$","430.0","","","$","161.7","","","$","138.6","","","$","150.8"],["Shoal Creek insurance recovery - business interruption","\u2014","","","80.8","","","\u2014","","","\u2014"],["Adjusted EBITDA","$","430.0","","","$","242.5","","","$","138.6","","","$","150.8"],["Revenue per Ton","$","73.88","","","$","144.97","","","$","13.81","","","$","56.38"],["Costs per Ton","47.71","","","122.77","","","12.07","","","46.04"],["Adjusted EBITDA Margin per Ton","$","26.17","","","$","22.20","","","$","1.74","","","$","10.34"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2023"],["","Seaborne Thermal","","Seaborne Metallurgical","","Powder River Basin","","Other U.S. Thermal"],["","(Amounts in millions, except per ton data)"],["Tons sold","15.5","","","6.9","","","87.2","","","16.2"],["Revenue","$","1,329.7","","","$","1,301.9","","","$","1,198.1","","","$","888.2"],["Total Segment Costs","752.9","","","863.8","","","1,044.4","","","680.7"],["Adjusted EBITDA","$","576.8","","","$","438.1","","","$","153.7","","","$","207.5"],["Revenue per Ton","$","85.94","","","$","188.66","","","$","13.74","","","$","54.77"],["Costs per Ton","48.66","","","125.18","","","11.98","","","41.98"],["Adjusted EBITDA Margin per Ton","$","37.28","","","$","63.48","","","$","1.76","","","$","12.79"]]
[[/GREPCENT_TABLE]]

Liquidity and Capital Resources

Overview

The Company’s primary source of cash is proceeds from the sale of its coal production to customers. The Company has also generated cash from the sale of non-strategic assets, including coal reserves, coal resources and surface lands, and, from time to time, borrowings under its credit facilities and the issuance of securities. The Company’s primary uses of cash include the cash costs of coal production, capital expenditures, coal reserve lease and royalty payments, debt service costs, finance and operating lease payments, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, collateral and margining requirements, dividends, share repurchases and selling and administrative expenses. The Company has also used cash for early debt retirements.

Any future determinations to return capital to stockholders, such as dividends or share repurchases will depend on a variety of factors, including the Company’s net income or other sources of cash, liquidity position and potential alternative uses of cash, such as internal development projects or acquisitions, as well as economic conditions and expected future financial results. The Company’s ability to early retire debt, declare dividends or repurchase shares in the future will depend on its future financial performance, which in turn depends on the successful implementation of its strategy and on financial, competitive, regulatory, technical and other factors, general economic conditions, demand for and selling prices of coal and other factors specific to its industry, many of which are beyond the Company’s control.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","70"]]
[[/GREPCENT_TABLE]]

Table of Contents

Liquidity

As of December 31, 2024, the Company’s cash and cash equivalents balances totaled $700.4 million, including approximately $397 million held by U.S. subsidiaries, approximately $291 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the year ended December 31, 2024, no profits from foreign subsidiaries were repatriated. If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.

The Company’s available liquidity increased to $1,072.5 million as of December 31, 2024 from $1,059.7 million as of December 31, 2023. Available liquidity was comprised of the following:

[[GREPCENT_TABLE]]
[["","","","December 31,"],["","","","2024","","2023"],["","","","(Dollars in millions)"],["Cash and cash equivalents","","","$","700.4","","","$","969.3"],["Revolving credit facility availability","","","233.7","","","\u2014"],["Accounts receivable securitization program availability","","","138.4","","","90.4"],["Total liquidity","","","$","1,072.5","","","$","1,059.7"]]
[[/GREPCENT_TABLE]]

Capital Returns to Shareholders

The Company repurchased approximately 7.7 million shares of its common stock for $180.5 million, including commission fees, and paid dividends of $37.6 million during the year ended December 31, 2024.

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 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 3.250% Convertible Senior Notes due March 2028 (the 2028 Convertible Notes) is deemed to be funded debt. The Company’s ability to pay dividends and make share repurchases is also subject to the quarterly minimum liquidity test. The Company is in compliance with such requirements at 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.

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.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","71"]]
[[/GREPCENT_TABLE]]

Table of Contents

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029. At December 31, 2024, the bank guarantee facilities were backed by cash of $168.5 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 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, the related bridge loan facility and the incurrence of additional indebtedness to finance the acquisition, to the extent applicable.

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.

Capital Expenditures

For 2025, the Company is targeting total capital expenditures of approximately $450 million. Approximately $280 million of such amount is appropriated to major projects and growth capital expenditures, including approximately $250 million for the Company’s Centurion Mine, which includes capital expenditures to reach longwall production and capital expenditures to develop Centurion North.

Indebtedness

The Company’s total indebtedness as of December 31, 2024 and 2023 is presented in the table below.

[[GREPCENT_TABLE]]
[["","December 31,"],["Debt Instrument (defined below, as applicable)","2024","","2023"],["","(Dollars in millions)"],["3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)","$","320.0","","","$","320.0"],["BUMA Loan Note","9.3","","","\u2014"],["Finance lease obligations","25.1","","","22.3"],["Less: Debt issuance costs","(6.3)","","","(8.1)"],["","348.1","","","334.2"],["Less: Current portion of long-term debt","15.8","","","13.5"],["Long-term debt","$","332.3","","","$","320.7"]]
[[/GREPCENT_TABLE]]

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at December 31, 2024, of approximately $27 million in 2025, $18 million in 2026, $13 million in 2027, $326 million in 2028, less than $1 million in 2029 and $9 million thereafter.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","72"]]
[[/GREPCENT_TABLE]]

Table of Contents

Cash paid for interest, net of capitalized interest related to the Company’s indebtedness and financial assurance instruments amounted to $37.6 million, $61.9 million and $118.5 million during the years ended December 31, 2024, 2023, and 2022, respectively.

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

During the 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.

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.

Accounts Receivable Securitization Program

As described in Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017. The securitization program 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. Funding capacity is limited to the availability of eligible receivables and is accounted for as a secured borrowing. Funding capacity under the program may also be utilized for letters of credit in support of other obligations, which has been the Company’s primary utilization. At December 31, 2024, the Company had no outstanding borrowings and $60.4 million of letters of credit outstanding under the program. The Company was not required to post cash collateral under the securitization program at December 31, 2024.

The accounts receivable securitization program was amended in January 2025 to extend its maturity to January 2028.

Other Requirements

The Company will incur significant future cash outflows for certain liabilities related to its prior mining activities and former employees. Such cash flows pertain to postretirement benefit plans, work-related injuries and illnesses, defined benefit pension plans, mine reclamation and end-of-mine closure costs and exploration obligations and are estimated to amount to approximately $100 million in 2025, $100 million in 2026, $150 million in 2027, $90 million in 2028, $140 million in 2029 and $1,275 million thereafter.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","73"]]
[[/GREPCENT_TABLE]]

Table of Contents

The Company has various short- and long-term take-or-pay arrangements in Australia and the U.S. associated with rail and port commitments for the delivery of coal, including amounts relating to export facilities. The estimated future cash flows associated with such arrangements are approximately $86 million in 2025, $90 million in 2026, $90 million in 2027, $90 million in 2028, $70 million in 2029 and $555 million thereafter.

The Company’s operating lease commitments, excluding potential contingent rental amounts, will require cash payments of approximately $38 million in 2025, $34 million in 2026, $29 million in 2027, $23 million in 2028, $6 million in 2029 and $3 million thereafter.

Covenant Compliance

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

Cash Flows

The following table summarizes the Company’s cash flows for the years ended December 31, 2024 and 2023, as reported in the accompanying consolidated financial statements.

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2024","","2023"],["","(Dollars in millions)"],["Net cash provided by operating activities","$","606.5","","","$","1,035.5"],["Net cash used in investing activities","(598.1)","","","(342.6)"],["Net cash used in financing activities","(276.0)","","","(460.3)"],["Net change in cash, cash equivalents and restricted cash","(267.6)","","","232.6"],["Cash, cash equivalents and restricted cash at beginning of period","1,650.2","","","1,417.6"],["Cash, cash equivalents and restricted cash at end of period","$","1,382.6","","","$","1,650.2"]]
[[/GREPCENT_TABLE]]

Operating Activities. The decrease in net cash provided by operating activities for the year ended December 31, 2024 compared to the prior year was driven by a year-over-year decrease in operating cash flow from working capital ($359.7 million), primarily attributable to changes in accounts payable and accrued expenses ($305.1 million) driven by income tax payments and accounts receivable ($66.5 million); the prior year receipt of cash related to variation margin requirements associated with derivative financial instruments ($198.0 million); and lower cash generated from mining operations. These unfavorable variances were partially offset by the Shoal Creek insurance recovery excluding proceeds attributable to equipment losses ($98.6 million), decreases in cash used for collateral requirements ($348.7 million) and discontinued operations ($74.5 million) primarily related to the prior year use of cash to settle disputed black lung claims.

Investing Activities. The increase in net cash used in investing activities for the year ended December 31, 2024 compared to the prior year was driven by the acquisition of Wards Well ($143.8 million), the deposit for the planned Anglo acquisition ($75.0 million) and higher capital expenditures driven by the Centurion Mine development ($53.0 million). These variances were partially offset by the Shoal Creek insurance recovery attributable to equipment losses ($10.9 million).

Financing Activities. The decrease in net cash used in financing activities for the year ended December 31, 2024 compared to the prior year was primarily driven by decreases in common stock repurchases ($164.6 million) and distributions to noncontrolling interest ($24.2 million).

Off-Balance-Sheet Arrangements

In the normal course of business, the Company is a party to various guarantees and financial instruments that carry off-balance-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.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","74"]]
[[/GREPCENT_TABLE]]

Table of Contents

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

[[GREPCENT_TABLE]]
[["","December 31, 2024"],["","Reclamation Support","","Other Support (1)","","Total"],["","(Dollars in millions)"],["Surety bonds","$","925.1","","","$","92.4","","","$","1,017.5"],["Letters of credit (2)","55.2","","","91.5","","","146.7"],["","980.3","","","183.9","","","1,164.2"],["Less: Letters of credit in support of surety bonds (3)","(55.2)","","","(0.1)","","","(55.3)"],["Obligations supported, net","$","925.1","","","$","183.8","","","$","1,108.9"]]
[[/GREPCENT_TABLE]]

(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.

Not presented in the above table is $809.8 million of restricted cash and other balances serving as collateral which are included in the accompanying consolidated balance sheets at December 31, 2024, as described in Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements. Such collateral is primarily in support of the financial instruments noted above, including in relation to the Company’s surety bond portfolio, its collateralized letter of credit agreement, its bank guarantee facilities and amounts held directly with beneficiaries which are not supported by surety bonds. The restricted cash and collateral balance decreased $147.8 million during the year ended December 31, 2024 due to collateral releases related to reductions in reclamation bonding requirements, replacement of cash-collateralized letters of credit with letters of credit under the new revolving credit facility and the impact of foreign currency rate changes.

At December 31, 2024, the Company had total asset retirement obligations of $723.7 million. Bonding requirement amounts may differ significantly from the related asset retirement obligation because such requirements are calculated under the assumption that reclamation begins currently, whereas the Company’s accounting liabilities are discounted from the end of a mine’s economic life (when final reclamation work would begin) to the balance sheet date.

As noted above, the Company’s reclamation bonding requirements decreased during the year ended December 31, 2024, primarily due to an approximate $110 million reduction in U.S. reclamation bonding requirements. At December 31, 2024, the Company’s reclamation bonding requirements were supported by approximately $700 million of restricted cash and other balances serving as collateral, which substantially supports the financial liability for final mine reclamation as calculated in accordance with U.S. GAAP.

Guarantees and Other Financial Instruments with Off-Balance Sheet Risk. See Note 20. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” to the accompanying consolidated financial statements for a discussion of the Company’s accounts receivable securitization program and guarantees and other financial instruments with off-balance sheet risk.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition, results of operations, liquidity and capital resources is based upon its consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The Company is also required under U.S. GAAP to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","75"]]
[[/GREPCENT_TABLE]]

Table of Contents

Asset Retirement Obligations. The Company’s asset retirement obligations 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, estimates of future costs to reclaim the disturbed acreage and the timing of these cash flows, escalated for inflation and then discounted using a credit-adjusted, risk-free rate. 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. If the Company’s assumptions do not materialize as expected, actual cash expenditures and costs that it incurs could be materially different than currently estimated. Moreover, regulatory changes could increase its obligation to perform reclamation and mine closing activities. Amortization associated with the Company’s asset retirement obligation assets of $20.8 million for the year ended December 31, 2024 was included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. Asset retirement obligation expense, consisting of both accretion expense and changes in estimates for the Company’s inactive locations, for the year ended December 31, 2024 was $48.9 million and payments totaled $51.7 million. See Note 12. “Asset Retirement Obligations” to the accompanying consolidated financial statements for additional information regarding the Company’s asset retirement obligations.

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 a 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 in the LOM plan 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 and resources, surface lands and undeveloped coal properties excluded from its 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 its 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 its 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 and 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).

No impairment charges related to long-lived assets were recorded for the year ended December 31, 2024. When necessary, the assumptions used are based on the Company’s best knowledge at the time it prepares its analysis but can vary significantly due to the volatile and cyclical nature of coal prices and demand, regulatory issues, unforeseen mining conditions, commodity prices and cost of labor. These factors may cause the Company to be unable to recover all or a portion of the carrying value of its long-lived assets.

[[GREPCENT_TABLE]]
[["Peabody Energy Corporation","2024 Form 10-K","76"]]
[[/GREPCENT_TABLE]]

Table of Contents

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.

See Note 3. “Asset Impairment” to the accompanying consolidated financial statements for additional information regarding impairment charges.

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.

Uncertainty exists regarding tax positions taken in previously filed tax returns which remain subject to examination, along with positions expected to be taken in future returns. The Company recognizes the tax benefit from uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. Adjustments are made to the uncertain tax positions when facts and circumstances change, such as the closing of a tax audit; change in applicable tax laws, including tax case rulings and legislative guidance; or expiration of the applicable statute of limitations.

See Note 8. “Income Taxes” to the accompanying consolidated financial statements for additional information regarding valuation allowances and unrecognized tax benefits.

Contingent liabilities. From time to time, Peabody 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. Peabody 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.”

Peabody 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 payables and accrued expenses” and the long-term portion is included in “Other noncurrent liabilities” in the Company’s consolidated balance sheets. In general, legal fees related to environmental remediation and litigation are charged to expense as incurred. The Company includes the interest component of any litigation-related penalties within “Interest expense” in its consolidated statements of operations. See Note 21. “Commitments and Contingencies” to the accompanying consolidated financial statements for further discussion of the Company’s contingent liabilities.

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

See Note 1. “Summary of Significant Accounting Policies” to the accompanying consolidated financial statements for a discussion of newly adopted accounting standards and accounting standards not yet implemented.