10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2022

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

Commission File Number: 1-16463

____________________________________________

PEABODY ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	13-4004153
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

	701 Market Street,	St. Louis,	Missouri	63101-1826
(Address of principal executive offices)				(Zip Code)

(314) 342-3400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BTU	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐                         Accelerated filer ☑

Non-accelerated filer ☐                         Smaller reporting company ☐

                                 Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

There were 143.8 million shares of the registrant’s common stock (par value of $0.01 per share) outstanding at April 29, 2022.

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	1
Unaudited Condensed Consolidated Statements of Operations	1
Unaudited Condensed Consolidated Statements of Comprehensive Income	2
Condensed Consolidated Balance Sheets	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	50
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 4. Mine Safety Disclosures	53
Item 6. Exhibits	53
EXHIBIT INDEX	54
SIGNATURE	55

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

PEABODY ENERGY CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions, except per share data)
Revenue	$	691.4	$	651.3
Costs and expenses
Operating costs and expenses (exclusive of items shown separately below)	699.0		582.6
Depreciation, depletion and amortization	72.9		68.3
Asset retirement obligation expenses	15.0		15.9
Selling and administrative expenses	23.1		21.7
Restructuring charges	1.6		2.1
Other operating (income) loss:
Net (gain) loss on disposals	(4.9)		0.6
(Income) loss from equity affiliates	(44.7)		0.9
Operating loss	(70.6)		(40.8)
Interest expense	39.4		52.4
Net loss (gain) on early debt extinguishment	23.5		(3.5)
Interest income	(0.5)		(1.5)
Net periodic benefit credit, excluding service cost	(12.2)		(8.7)
Loss from continuing operations before income taxes	(120.8)		(79.5)
Income tax benefit	(1.0)		(1.8)
Loss from continuing operations, net of income taxes	(119.8)		(77.7)
Loss from discontinued operations, net of income taxes	(0.8)		(2.0)
Net loss	(120.6)		(79.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Net loss attributable to common stockholders	$	(119.5)	$	(80.1)
Loss from continuing operations:
Basic loss per share	$	(0.87)	$	(0.79)
Diluted loss per share	$	(0.87)	$	(0.79)
Net loss attributable to common stockholders:
Basic loss per share	$	(0.88)	$	(0.81)
Diluted loss per share	$	(0.88)	$	(0.81)

See accompanying notes to unaudited condensed consolidated financial statements.

1

PEABODY ENERGY CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Net loss	$	(120.6)	$	(79.7)
Postretirement plans (net of $0.0 tax provisions in each period)	(13.4)		(11.0)
Foreign currency translation adjustment	1.9		(0.2)
Other comprehensive loss, net of income taxes	(11.5)		(11.2)
Comprehensive loss	(132.1)		(90.9)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Comprehensive loss attributable to common stockholders	$	(131.0)	$	(91.3)

See accompanying notes to unaudited condensed consolidated financial statements.

2

PEABODY ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	March 31, 2022		December 31, 2021
	(Amounts in millions, except per share data)
ASSETS
Current assets
Cash and cash equivalents	$	823.3	$	954.3
Restricted cash	24.7		—
Accounts receivable, net of allowance for credit losses of $0.0 at March 31, 2022 and December 31, 2021	357.4		350.5
Inventories, net	269.1		226.7
Other current assets	331.8		270.2
Total current assets	1,806.3		1,801.7
Property, plant, equipment and mine development, net	2,903.3		2,950.6
Operating lease right-of-use assets	33.0		35.5
Investments and other assets	201.2		162.0
Total assets	$	4,943.8	$	4,949.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	19.1	$	59.6
Accounts payable and accrued expenses	798.2		872.1
Total current liabilities	817.3		931.7
Long-term debt, less current portion	1,079.0		1,078.2
Deferred income taxes	20.9		27.3
Asset retirement obligations	659.5		654.8
Accrued postretirement benefit costs	209.6		212.1
Operating lease liabilities, less current portion	24.6		27.2
Other noncurrent liabilities	236.0		197.7
Total liabilities	3,046.9		3,129.0
Stockholders’ equity
Preferred Stock — $0.01 per share par value; 100.0 shares authorized, no shares issued or outstanding as of March 31, 2022 and December 31, 2021	—		—
Series Common Stock — $0.01 per share par value; 50.0 shares authorized, no shares issued or outstanding as of March 31, 2022 and December 31, 2021	—		—
Common Stock — $0.01 per share par value; 450.0 shares authorized, 187.0 shares issued and 143.8 shares outstanding as of March 31, 2022 and 176.3 shares issued and 133.3 shares outstanding as of December 31, 2021	1.9		1.8
Additional paid-in capital	3,969.5		3,745.6
Treasury stock, at cost — 43.2 and 43.0 common shares as of March 31, 2022 and December 31, 2021	(1,372.3)		(1,370.3)
Accumulated deficit	(1,032.7)		(913.2)
Accumulated other comprehensive income	286.4		297.9
Peabody Energy Corporation stockholders’ equity	1,852.8		1,761.8
Noncontrolling interests	44.1		59.0
Total stockholders’ equity	1,896.9		1,820.8
Total liabilities and stockholders’ equity	$	4,943.8	$	4,949.8

See accompanying notes to unaudited condensed consolidated financial statements.

3

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash Flows From Operating Activities
Net loss	$	(120.6)	$	(79.7)
Loss from discontinued operations, net of income taxes	0.8		2.0
Loss from continuing operations, net of income taxes	(119.8)		(77.7)
Adjustments to reconcile loss from continuing operations, net of income taxes to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	72.9		68.3
Noncash interest expense, net	3.8		4.9
Deferred income taxes	(6.4)		(0.4)
Noncash share-based compensation	2.0		1.8
Net (gain) loss on disposals	(4.9)		0.6
Net loss (gain) on early debt extinguishment	23.5		(3.5)
(Income) loss from equity affiliates	(44.7)		0.9
Foreign currency option contracts	(3.3)		2.9
Changes in current assets and liabilities:
Accounts receivable	(6.9)		77.0
Inventories	(42.4)		20.3
Other current assets	(80.0)		1.6
Accounts payable and accrued expenses	(28.4)		(15.4)
Collateral arrangements	(28.7)		(5.3)
Asset retirement obligations	4.7		8.1
Workers’ compensation obligations	(0.6)		0.6
Postretirement benefit obligations	(15.9)		(13.4)
Pension obligations	(0.6)		2.8
Other, net	3.2		—
Net cash (used in) provided by continuing operations	(272.5)		74.1
Net cash used in discontinued operations	(1.2)		(3.1)
Net cash (used in) provided by operating activities	(273.7)		71.0

4

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash Flows From Investing Activities
Additions to property, plant, equipment and mine development	(29.7)		(50.3)
Changes in accrued expenses related to capital expenditures	(7.0)		(11.4)
Proceeds from disposal of assets, net of receivables	3.6		0.9
Contributions to joint ventures	(126.6)		(136.1)
Distributions from joint ventures	148.2		102.4
Cash receipts from Middlemount Coal Pty Ltd and other related parties	47.2		2.3
Other, net	(0.5)		(1.0)
Net cash provided by (used in) investing activities	35.2		(93.2)
Cash Flows From Financing Activities
Proceeds from long-term debt	545.0		—
Repayments of long-term debt	(599.9)		(40.2)
Payment of debt issuance and other deferred financing costs	(19.2)		(22.5)
Proceeds from common stock issuances, net of costs	222.0		—
Repurchase of employee common stock relinquished for tax withholding	(2.0)		(0.6)
Distributions to noncontrolling interests	(13.8)		(0.1)
Other, net	0.1		0.1
Net cash provided by (used in) financing activities	132.2		(63.3)
Net change in cash, cash equivalents and restricted cash	(106.3)		(85.5)
Cash, cash equivalents and restricted cash at beginning of period	954.3		709.2
Cash, cash equivalents and restricted cash at end of period	$	848.0	$	623.7

See accompanying notes to unaudited condensed consolidated financial statements.

5

PEABODY ENERGY CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Common Stock
Balance, beginning of period	$	1.8	$	1.4
Common stock issuances, net of costs	0.1		—
Balance, end of period	1.9		1.4
Additional paid-in capital
Balance, beginning of period	3,745.6		3,364.6
Share-based compensation for equity-classified awards	2.0		1.8
Common stock issuances, net of costs	221.9		—
Balance, end of period	3,969.5		3,366.4
Treasury stock
Balance, beginning of period	(1,370.3)		(1,368.9)
Repurchase of employee common stock relinquished for tax withholding	(2.0)		(0.6)
Balance, end of period	(1,372.3)		(1,369.5)
Accumulated deficit
Balance, beginning of period	(913.2)		(1,273.3)
Net loss attributable to common stockholders	(119.5)		(80.1)
Balance, end of period	(1,032.7)		(1,353.4)
Accumulated other comprehensive income
Balance, beginning of period	297.9		205.8
Postretirement plans (net of $0.0 tax provisions in each period)	(13.4)		(11.0)
Foreign currency translation adjustment	1.9		(0.2)
Balance, end of period	286.4		194.6
Noncontrolling interests
Balance, beginning of period	59.0		51.7
Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Distributions to noncontrolling interests	(13.8)		(0.1)
Balance, end of period	44.1		52.0
Total stockholders’ equity	$	1,896.9	$	891.5

See accompanying notes to unaudited condensed consolidated financial statements.

6

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)    Basis of Presentation

The condensed consolidated financial statements include the accounts of Peabody Energy Corporation (PEC) and its consolidated subsidiaries and affiliates (along with PEC, the Company or Peabody). 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 a 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 unaudited condensed consolidated financial statements. All intercompany transactions, profits and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, these financial statements reflect all normal, recurring adjustments necessary for a fair presentation. Balance sheet information presented herein as of December 31, 2021 has been derived from the Company’s audited consolidated balance sheet at that date. The Company’s results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2022.

(2)    Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

Newly Adopted Accounting Standards

Convertible Debt. In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under Accounting Standards Codification Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and can be adopted on either a fully retrospective or modified retrospective basis. The Company adopted ASU 2020-06, effective January 1, 2022. In the Company’s accompanying condensed consolidated balance sheets, the adoption of the new standard impacted the accounting for the Company’s $320.0 million of convertible debt issued in March 2022, as further described in Note 11. “Long-term Debt.” In particular, because the related senior notes have cash conversion features, bifurcation of the principal balance between debt and equity is no longer applicable. Additionally, this guidance will require the application of the “if-converted” method to calculate the impact of convertible instruments on diluted earnings per share, which may increase their dilutive impact compared to the prior accounting model.

Accounting Standards Not Yet Implemented

Reference Rate Reform. In March 2020, ASU 2020-04 was issued, which provides temporary optional expedients to applying the reference rate reform guidance to contracts that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. Under this update, contract modifications resulting in a new reference rate may be accounted for as a continuation of the existing contract. This guidance is effective upon issuance of the update and applies to contract modifications made through December 31, 2022. The Company has certain debt which utilizes a U.S. Dollar one-month LIBOR rate, which is expected to be published until June 2023. The LIBOR rate is likely to be replaced by a similar secured or unsecured overnight financing rate. The Company cannot estimate the impact of such variable rates on its consolidated financial statements.

7

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Government Assistance. In November 2021, ASU 2021-10 was issued, which aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the financial statements. The guidance is effective for annual periods beginning after December 15, 2021, with early application permitted. The Company did not early adopt the guidance in ASU 2021-10 and does not expect the guidance to have a material impact on its disclosures.

(3)    Revenue Recognition

Refer to Note 1. “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for the Company’s policies regarding “Revenue” and “Accounts receivable, net.”

Disaggregation of Revenue

Revenue by product type and market is set forth in the following tables. With respect to its seaborne mining 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.

	Three Months Ended March 31, 2022
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	40.4	$	—	$	251.5	$	199.9	$	—	$	491.8
Export	210.5		—		—		—		—		210.5
Total thermal	250.9		—		251.5		199.9		—		702.3
Metallurgical coal
Export	—		318.0		—		—		—		318.0
Total metallurgical	—		318.0		—		—		—		318.0
Other (2)	0.3		3.3		(0.3)		3.2		(335.4)		(328.9)
Revenue	$	251.2	$	321.3	$	251.2	$	203.1	$	(335.4)	$	691.4

	Three Months Ended March 31, 2021
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	44.1	$	—	$	228.4	$	146.8	$	—	$	419.3
Export	131.9		—		—		—		—		131.9
Total thermal	176.0		—		228.4		146.8		—		551.2
Metallurgical coal
Export	—		86.6		—		—		—		86.6
Total metallurgical	—		86.6		—		—		—		86.6
Other (2)	0.4		0.9		—		2.5		9.7		13.5
Revenue	$	176.4	$	87.5	$	228.4	$	149.3	$	9.7	$	651.3

(1)    Corporate and Other revenue includes net losses related to unrealized mark-to-market adjustments on derivatives related to forecasted sales and other financial trading activity of $290.2 million and $4.9 million during the three months ended March 31, 2022 and 2021, respectively. Refer to Note 7. “Derivatives and Fair Value Measurements” for additional information. Also included in Corporate and Other revenue is revenue with customers of $19.0 million and $17.9 million during the three months ended March 31, 2022 and 2021, respectively.

(2)    Other 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 and property and facility rentals.

8

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recorded revenue related to delivered coal to customers of approximately $1,039 million and $656 million during the three months ended March 31, 2022 and 2021, respectively. Such amounts exclude unrealized and realized gains and losses on derivative contracts related to forecasted sales and certain other revenue unrelated to delivered coal.

Committed Revenue from Contracts with Customers

The Company expects to recognize revenue subsequent to March 31, 2022 of approximately $5.1 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at March 31, 2022. Approximately 48% 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 March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Trade receivables, net	$	323.4	$	307.0
Miscellaneous receivables, net	34.0		43.5
Accounts receivable, net	$	357.4	$	350.5

None of the above receivables included allowances for credit losses at March 31, 2022 or December 31, 2021. No charges for credit losses were recognized during the three months ended March 31, 2022 or 2021.

(4)    Discontinued Operations

Historically, discontinued operations included certain former Seaborne Thermal Mining and Other U.S. Thermal Mining segment assets that have ceased production and other previously divested legacy operations, including Patriot Coal Corporation and certain of its wholly-owned subsidiaries (Patriot). In the third quarter of 2021, the Company executed the sale of the closed Wilkie Creek Mine, which reduced its closed mine reclamation liabilities and associated costs.

Summarized Results of Discontinued Operations

Results from discontinued operations were as follows during the periods presented below:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from discontinued operations, net of income taxes	$	(0.8)	$	(2.0)

Liabilities of Discontinued Operations

Liabilities classified as discontinued operations included in the Company’s condensed consolidated balance sheets were as follows:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Liabilities:
Accounts payable and accrued expenses	$	45.0	$	45.0
Other noncurrent liabilities	58.7		59.0
Total liabilities classified as discontinued operations	$	103.7	$	104.0

9

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Patriot-Related Matters

A significant portion of the liabilities in the table above relate to Patriot. In 2012, Patriot filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code (the Bankruptcy Code). In 2013, the Company entered into a definitive settlement agreement (2013 Agreement) with Patriot and the United Mine Workers of America (UMWA), on behalf of itself, its represented Patriot employees and its represented Patriot retirees, to resolve all then-disputed issues related to Patriot’s bankruptcy. In May 2015, Patriot again filed voluntary petitions for relief under the Bankruptcy Code in the U.S. District Court for the Eastern District of Virginia and subsequently initiated a process to sell substantially all of its assets to qualified bidders. On October 9, 2015, Patriot’s bankruptcy court entered an order confirming Patriot’s plan of reorganization, which provided, among other things, for the sale of substantially all of Patriot’s assets to two different buyers.

Black Lung Occupational Disease Liabilities. Patriot had federal and state black lung occupational disease liabilities related to workers employed in periods prior to Patriot’s spin-off from the Company in 2007. Upon spin-off, Patriot indemnified the Company against any claim relating to these liabilities, which amounted to approximately $150 million at that time. The indemnification included any claim made by the U.S. Department of Labor (DOL) against the Company with respect to these obligations as a potentially liable operator under the Federal Coal Mine Health and Safety Act of 1969. The 2013 Agreement included Patriot’s affirmance of indemnities provided in the spin-off agreements, including the indemnity relating to such black lung liabilities; however, Patriot rejected this indemnity in its May 2015 bankruptcy.

By statute, the Company had secondary liability for the black lung liabilities related to Patriot’s workers employed by former subsidiaries of the Company. The Company’s accounting for the black lung liabilities related to Patriot is based on an interpretation of applicable statutes. Management believes that inconsistencies exist among the applicable statutes, regulations promulgated under those statutes and the DOL’s interpretative guidance. The Company has sought clarification from the DOL regarding these inconsistencies. The amount of these liabilities could be reduced in the future. Whether the Company will ultimately be required to fund certain of those obligations in the future as a result of Patriot’s May 2015 bankruptcy remains uncertain. The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $87.1 million and $87.2 million at March 31, 2022 and December 31, 2021, respectively. While the Company has recorded a liability, it intends to review each claim on a case-by-case basis and contest liability estimates as appropriate. The amount of the Company’s recorded liability reflects only Patriot workers employed by former subsidiaries of the Company that are presently retired, disabled or otherwise not actively employed. The Company cannot reliably estimate the potential liabilities for Patriot’s workers employed by former subsidiaries of the Company that are presently active in the workforce because of the potential for such workers to continue to work for another coal operator that is a going concern.

(5)     Inventories

“Inventories, net” as of March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Materials and supplies, net	$	112.8	$	102.1
Raw coal	46.9		54.6
Saleable coal	109.4		70.0
Inventories, net	$	269.1	$	226.7

Materials and supplies inventories, net presented above have been shown net of reserves of $9.0 million as of both March 31, 2022 and December 31, 2021.

(6) Equity Method Investments

The Company had total equity method investments and financing receivables of $62.9 million and $62.2 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively, related to Middlemount Coal Pty Ltd (Middlemount). Included in “(Income) loss from equity affiliates” in the unaudited condensed consolidated statements of operations were gains related to Middlemount of $45.1 million during the three months ended March 31, 2022, and losses of $0.9 million during the three months ended March 31, 2021.

The Company received cash payments from Middlemount of $47.0 million and $2.3 million during the three months ended March 31, 2022 and 2021, respectively.

10

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

One of the Company’s Australian subsidiaries and the other shareholder of Middlemount are parties to an agreement, as amended from time to time, to provide a revolving loan (Revolving Loans) to Middlemount. The Company’s participation in the Revolving Loans will not, at any time, exceed its 50% equity interest of the revolving loan limit, which was $50 million Australian dollars at March 31, 2022. The Revolving Loans bear interest at 10% per annum and expire on December 31, 2023. The Revolving Loans were not drawn upon by Middlemount as of either March 31, 2022 or December 31, 2021.

As of both March 31, 2022 and December 31, 2021, the financing receivables and Revolving Loans are accounted for as in-substance common stock due to the limited fair value attributed to Middlemount’s equity.

(7) 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, (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, (3) price risk and the variability of cash flows related to forecasted diesel fuel purchased for use in its operations and (4) interest rate risk on long-term debt. 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. The Company had no diesel fuel or interest rate derivatives in place as of March 31, 2022.

Foreign Currency Option Contracts

As of March 31, 2022, the Company had currency options outstanding with an aggregate notional amount of $705.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending December 31, 2022. The instruments are quarterly average rate options which 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 $0.76 to $0.80 over the nine-month period ending December 31, 2022.

Derivative Contracts Related to Forecasted Sales

As of March 31, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 1.6 million tonnes. Such financial contracts may include futures, forwards and options. Included in this total are 1.3 million tonnes related to financial derivatives entered to support the profitability of the Wambo Underground Mine as part of a strategy to extend the mine life through mid-2023. Of this total, 0.6 million tonnes will settle in 2022 and 0.7 million tonnes will settle in 2023 at expected average pricing of approximately $84 per tonne (Newcastle index). The remaining 0.3 million tonnes aggregate notional volume related to other coal financial contracts will settle in 2022. Additionally, the Company classifies certain physical forward sales contracts as derivatives for which the normal purchase, normal sales exception does not apply.

During the three months ended March 31, 2022, the Company recorded an unrealized mark-to-market loss of $301.0 million on these coal derivative contracts, which includes approximately $237 million of unrealized mark-to-market losses on financial derivatives, and approximately $64 million 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 nominal financial trading contracts as of March 31, 2022.

11

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 condensed consolidated balance sheets. The fair value of derivatives reflected in the accompanying condensed consolidated balance sheets are set forth in the table below.

	March 31, 2022				December 31, 2021
	Asset Derivative		Liability Derivative		Asset Derivative		Liability Derivative
	(Dollars in millions)
Foreign currency option contracts	$	6.3	$	—	$	1.4	$	—
Derivative contracts related to forecasted sales	133.2		(558.1)		59.5		(184.2)
Financial trading contracts	13.5		—		3.4		—
Total derivatives	153.0		(558.1)		64.3		(184.2)
Effect of counterparty netting	(133.2)		133.2		(59.5)		59.5
Variation margin (received) posted	(13.5)		360.6		(3.4)		95.2
Net derivatives and variation margin as classified in the balance sheets	$	6.3	$	(64.3)	$	1.4	$	(29.5)

The Company generally posts or receives variation margin cash with its clearing broker on the majority of its financial derivatives as market values of the financial derivatives fluctuate. As of March 31, 2022, the Company had posted $481.7 million aggregate margin cash, consisting of $347.1 million variation margin cash and $134.6 million initial margin. As of December 31, 2021, the Company had posted $130.1 million aggregate margin cash, consisting of $91.8 million variation margin cash and $38.3 million initial margin.

To reduce exposure to additional margin requirements, subsequent to March 31, 2022, the Company converted 0.8 million metric tons of financial hedges into fixed price physical sales over the next 12 months, eliminating further margin requirements on these tons. With these transactions, 1.4 million metric tons remain outstanding with 0.9 million metric tons projected to settle over the remainder of 2022.

The net amount of asset derivatives, net of variation margin, is included in “Other current assets” and the net amount of liability derivatives, net of variation margin, is included in “Accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheets. The amounts of initial margin are not included with the derivatives presented in the tabular disclosures above and are included in “Other current assets” in the accompanying condensed consolidated balance sheets.

12

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 pre-tax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.

		Three Months Ended March 31, 2022
		Total gain (loss) recognized in income		Loss realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	2.3	$	(1.0)	$	3.3
Derivative contracts related to forecasted sales	Revenue	(369.0)		(68.0)		(301.0)
Financial trading contracts	Revenue	10.1		(0.7)		10.8
Total		$	(356.6)	$	(69.7)	$	(286.9)
		Three Months Ended March 31, 2021 (1)
		Total loss recognized in income		Gain (loss) realized in income on derivatives		Unrealized loss recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(2.9)	$	4.7	$	(7.6)
Derivative contracts related to forecasted sales	Revenue	(9.7)		(7.9)		(1.8)
Financial trading contracts	Revenue	(0.7)		2.4		(3.1)
Total		$	(13.3)	$	(0.8)	$	(12.5)

(1)    ‘Results realized in income on derivatives’ has been revised to exclude revenue arising from coal deliveries earned by the Company’s trading and brokerage function of $17.9 million for the three months ended March 31, 2021, to be comparable to the presentation of the 2022 amounts.

The Company classifies the cash effects of its derivatives within the “Cash Flows From Operating Activities” section of the unaudited condensed 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.

13

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables set forth the hierarchy of the Company’s net (liability) asset positions for which fair value is measured on a recurring basis. Variation margin cash associated with the derivative balances is excluded from this table.

	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	6.3	$	—	$	6.3
Derivative contracts related to forecasted sales	—		(424.9)		—		(424.9)
Financial trading contracts	—		13.5		—		13.5
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(405.1)	$	4.0	$	(401.1)
	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.4	$	—	$	1.4
Derivative contracts related to forecasted sales	—		(124.7)		—		(124.7)
Financial trading contracts	—		3.4		—		3.4
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(119.9)	$	4.0	$	(115.9)

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 observed prices in an inactive market (Level 3).

Other Financial Instruments. The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of March 31, 2022 and December 31, 2021:

•Cash and cash equivalents, restricted cash, accounts receivable, including those within the Company’s accounts receivable securitization program, margining cash, 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).

14

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Market risk associated with the Company’s fixed- and variable-rate long-term debt relates to the potential reduction in the fair value and negative impact to future earnings, respectively, 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.

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Total debt at par value	$	1,129.9	$	1,173.2
Less: Unamortized debt issuance costs and original issue discount	(31.8)		(35.4)
Net carrying amount	$	1,098.1	$	1,137.8
Estimated fair value	$	1,277.3	$	1,136.5

Generally, the Company’s Level 3 instruments or contracts are valued using bid/ask price quotations and other market assessments obtained from multiple, independent third-party brokers or other transactional data incorporated into internally-generated discounted cash flow models. Decreases in the number of third-party brokers or market liquidity could erode the quality of market information and therefore the valuation of the Company’s market positions. The Company’s valuation techniques include basis adjustments to the foregoing price inputs for quality, such as sulfur and ash content, location differentials, expressed as port and freight costs, and credit risk. The Company’s risk management function independently validates the Company’s valuation inputs, including unobservable inputs, with third-party information and settlement prices from other sources where available. A daily process is performed to analyze market price changes and changes to the portfolio. Further periodic validation occurs at the time contracts are settled with the counterparty. These valuation techniques have been consistently applied in all periods presented, and the Company believes it has obtained the most accurate information available for the types of derivative contracts held.

Significant increases or decreases in the inputs in isolation could result in a significantly higher or lower fair value measurement. The unobservable inputs do not have a direct interrelationship; therefore, a change in one unobservable input would not necessarily correspond with a change in another unobservable input.

The Company had no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2022 and 2021. The Company’s policy is to value all transfers between levels using the beginning of period valuation.

(8) Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of March 31, 2022 and December 31, 2021 is set forth in the table below:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Land and coal interests	$	2,494.1	$	2,494.1
Buildings and improvements	590.2		550.8
Machinery and equipment	1,370.9		1,386.2
Less: Accumulated depreciation, depletion and amortization	(1,551.9)		(1,480.5)
Property, plant, equipment and mine development, net	$	2,903.3	$	2,950.6

Asset Impairment and Other At-Risk Assets

The Company has identified certain assets with an aggregate carrying value of approximately $0.5 billion at March 31, 2022 in its Other U.S. Thermal Mining and Corporate and Other segments whose recoverability is most sensitive to customer demand, customer concentration risk and future economic viability. The Company conducted a review of those assets as of March 31, 2022 and determined that no impairment charges were necessary as of that date.

(9) 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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for the Company’s policies regarding “Leases.”

15

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 that no amounts could be recovered from third parties.

The components of lease expense during the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	4.7	$	6.0
Short-term lease cost	6.3		3.4
Variable lease cost	1.6		0.5
Sublease income	(0.4)		(0.5)
Total operating lease cost	$	12.2	$	9.4
Finance lease cost:
Amortization of right-of-use assets	$	1.5	$	0.6
Interest on lease liabilities	0.6		0.5
Total finance lease cost	$	2.1	$	1.1

16

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:

	March 31, 2022			December 31, 2021
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	33.0		$	35.5
Accounts payable and accrued expenses	$	16.1		$	16.4
Operating lease liabilities, less current portion	24.6			27.2
Total operating lease liabilities	$	40.7		$	43.6
Finance leases:
Property, plant, equipment and mine development	$	32.4		$	32.2
Accumulated depreciation	(9.0)			(7.4)
Property, plant, equipment and mine development, net	$	23.4		$	24.8
Current portion of long-term debt	$	15.0		$	15.3
Long-term debt, less current portion	12.6			14.0
Total finance lease liabilities	$	27.6		$	29.3
Weighted average remaining lease term (years)
Operating leases	2.9
Finance leases	6.7
Weighted average discount rate
Operating leases	7.0		%
Finance leases	8.2		%

Supplemental cash flow information related to leases during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5.9	$	8.3
Operating cash flows for finance leases	0.6		0.7
Financing cash flows for finance leases	2.2		1.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1.6		3.1
Finance leases	—		3.6

17

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company's leases have remaining lease terms ranging from less than 1 year to 19.8 years, and may include options to extend the terms, as applicable. The contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2022	$	13.7	$	8.7
2023	17.6		6.0
2024	6.3		5.1
2025	3.6		4.9
2026	3.6		2.5
2027 and thereafter	0.8		7.2
Total lease payments	45.6		34.4
Less imputed interest	(4.9)		(6.8)
Total lease liabilities	$	40.7	$	27.6

(10)  Income Taxes

The Company's effective tax rate before remeasurement for the three months ended March 31, 2022 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance. The Company’s income tax benefit of $1.0 million and $1.8 million for the three months ended March 31, 2022 and 2021, respectively, included a tax provision of $1.6 million and a tax benefit of $0.2 million, respectively, related to the remeasurement of foreign income tax accounts.

(11)     Long-term Debt 

The Company’s total funded indebtedness (Indebtedness) as of March 31, 2022 and December 31, 2021 consisted of the following:

Debt Instrument (defined below, as applicable)	March 31, 2022		December 31, 2021
	(Dollars in millions)
6.000% Senior Secured Notes due March 2022 (2022 Notes)	$	—	$	23.1
8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)	—		62.6
10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)	193.6		193.9
Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)	188.8		206.0
6.375% Senior Secured Notes due March 2025 (2025 Notes)	77.5		334.9
Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)	321.8		322.8
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	320.0		—
Finance lease obligations	27.6		29.3
Less: Debt issuance costs	(31.2)		(34.8)
	1,098.1		1,137.8
Less: Current portion of long-term debt	19.1		59.6
Long-term debt	$	1,079.0	$	1,078.2

2021 Financing Activity

During the first quarter of 2021, the Company completed a series of transactions to, among other things, provide the Company with maturity extensions and covenant relief, while allowing it to maintain near-term operating liquidity and financial flexibility. These transactions included a senior notes exchange and related consent solicitation, a revolving credit facility exchange, various amendments to the Company’s existing debt agreements, and completion of a related surety transaction support agreement with the Company’s surety bond providers.

18

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent to these transactions in the first quarter of 2021, the Company completed additional financing transactions during 2021 intended to improve its capital structure. Such transactions included the implementation of an at-the-market equity offering program pursuant to which the Company sold approximately 24.8 million shares of common stock for net cash proceeds of $269.8 million, the retirement of $270.9 million principal amount of existing debt through various open market purchases at an aggregate cost of $232.4 million, and the issuance of an aggregate 10.0 million shares of common stock in exchange for an additional $106.1 million principal amount of existing debt through multiple bilateral transactions with debt holders.

In the event of allowable open market purchases of its debt, the terms of the 2024 Peabody Notes and the letter of credit facility entered into by the Company in connection with the 2021 financing activity (Company LC Agreement) require the Company to make a mandatory repurchase offer to those debt and lien holders. In general, the repurchase offers equate to 25% of the principal amount of priority lien debt repurchased in the preceding quarter at a price equal to the weighted average repurchase price paid over that quarter. The open market debt repurchases completed during the three months ended December 31, 2021 necessitated a mandatory repurchase offer of up to $38.6 million of 2024 Peabody Notes, at 94.940% of their aggregate accreted value, plus accrued and unpaid interest, and a concurrent repurchase offer of priority lien obligations under the Company LC Agreement. The offer resulted in the valid tender and purchase of $0.1 million aggregate accreted value of 2024 Peabody Notes and $30.0 million aggregate principal and commitment amounts under the Company LC Agreement during the three months ended March 31, 2022. The Company’s purchase of the principal and commitment amounts under the Company LC Agreement was effected by the posting of $28.5 million of collateral with the administrative agent and did not reduce the availability under the facility. During the three months ended March 31, 2022, the Company made no other open market purchases of its debt.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are also subject to mandatory prepayment offers at the end of each six-month period, beginning with June 30, 2021, whereby the Excess Cash Flow (as defined in the 2024 Co-Issuer Notes indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of such notes and loans on a pro rata basis, provided that the liquidity attributable to the Wilpinjong Mine would not fall below $60.0 million. Such prepayments may be accepted or declined at the option of the debt holders. Based upon the Wilpinjong Mine’s results for the six-month period ended December 31, 2021, a required offer to prepay $105.6 million of total principal resulted in the prepayment of $17.2 million of Co-Issuer Term Loans principal, $0.3 million of 2024 Co-Issuer Notes principal, and a related loss on early debt extinguishment of $0.5 million during the three months ended March 31, 2022.

The 2021 financing activity and related agreements are more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on February 18, 2022.

3.250% Convertible Senior Notes due 2028

On March 1, 2022, through a private offering, the Company issued $320.0 million in aggregate principal amount of 3.250% Convertible Senior Notes due 2028 (the 2028 Convertible Notes). 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 to redeem the remaining $62.6 million of its outstanding 2024 Peabody Notes and, together with available cash, approximately $257.4 million of its outstanding 2025 Notes, and to pay related premiums, fees and expenses relating to the offering of the 2028 Convertible Notes and the redemptions. The redemption of existing notes was deemed a debt extinguishment for accounting purposes. The Company capitalized $11.2 million of debt issuance costs related to the offering and recognized a loss on early debt extinguishment of $23.0 million during the three months ended March 31, 2022.

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 will bear interest from March 1, 2022 at a rate of 3.250% per year payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022. During the three months ended March 31, 2022, the Company incurred interest expense of $1.0 million related to the 2028 Convertible Notes.

19

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The 2028 Convertible Notes will be convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on 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 will be 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of approximately $19.85 per share of the Company’s common stock. The initial conversion price represents a premium of approximately 32.5% to the $14.98 per share closing price of the Company’s common stock on February 24, 2022. The conversion rate is subject to 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.

Margin Financing Arrangement

On March 7, 2022, the Company entered into a credit agreement, by and among the Company, as borrower, Goldman Sachs Lending Partners LLC, as administrative agent, and the lenders party thereto (the Credit Agreement). The Credit Agreement provides for a $150 million unsecured revolving credit facility (the Revolving Facility), which will mature on April 1, 2025 and bears interest at a rate of 10.0% per annum on drawn amounts.

The Revolving Facility is intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the Company’s coal derivative contracts, which fluctuate depending upon underlying market coal prices.

Concurrently with the Credit Agreement, the Company entered into an agreement with Goldman Sachs & Company LLC to act as sales agent for at-the-market equity offerings of up to $225.0 million of the Company’s common stock.

During the three months ended March 31, 2022, the Company borrowed and repaid $225.0 million under the Revolving Facility using net proceeds of $222.0 million from at-the-market issuances of 10.1 million shares of common stock and available cash. The equity offering agreement limit was reached as a result of these issuances and may not be further utilized without amendment and approval by the sales agent. The Company had no outstanding borrowings and no availability under the Revolving Facility at March 31, 2022.

20

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Credit Agreement contains customary covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from subsidiaries, 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.

Borrowings under the Revolving Facility are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by substantially all of the Company’s material domestic subsidiaries (excluding any unrestricted subsidiaries).

Retirement of 2022 Notes

On March 31, 2022, the Company retired the remaining principal balance of 2022 Notes upon maturity for $23.1 million.

Interest Charges

The Company incurred total interest expense of $39.4 million and $52.4 million during the three months ended March 31, 2022 and 2021, respectively. These amounts included $13.5 million and $10.9 million, respectively, related to financial assurance instruments such as surety bonds and letters of credit, with the remainder primarily related to the Company’s funded debt.

Of total interest expense incurred during the three months ended March 31, 2022 and 2021, $3.8 million and $4.9 million, respectively, was comprised of non-cash charges primarily related to the amortization of debt issuance costs.

Cash payments for interest amounted to $37.2 million and $56.3 million during the three months ended March 31, 2022 and 2021, respectively.

The Senior Secured Term Loan is the Company’s only outstanding variable rate debt, which bore interest at LIBOR plus 2.75% per annum at March 31, 2022.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt agreements at March 31, 2022, including the minimum aggregate liquidity requirement under the Company LC Agreement which requires the Company’s restricted subsidiaries to maintain minimum aggregate liquidity of $125.0 million at the end of each quarter through December 31, 2024.

Finance Lease Obligations

Refer to Note 9. “Leases” for additional information associated with the Company’s finance leases, which pertain to the financing of mining equipment used in operations.

(12) Pension and Postretirement Benefit Costs

The components of net periodic pension and postretirement benefit costs, excluding the service cost for benefits earned, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.

Net periodic pension credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Interest cost on projected benefit obligation	$	5.3	$	5.1
Expected return on plan assets	(5.9)		(5.7)
Net periodic pension credit	$	(0.6)	$	(0.6)

21

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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. Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006 (generally 80%). As of March 31, 2022, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds. The Company is not required to make any contributions to its qualified pension plans in 2022 based on minimum funding requirements and does not expect to make any discretionary contributions in 2022 at this time.

In March 2022, Peabody Investments Corp., a wholly owned subsidiary of the Company, entered into a commitment agreement relating to the Peabody Investments Corp. Retirement Plan (the Plan) with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Plan. Under the commitment agreement, the Plan purchased a group annuity contract (Group Annuity Contract) from Prudential for approximately $500 million and Prudential will reimburse the Plan for future benefit payments to be made to the Plan’s participants. Under the terms of this transaction, the Plan will continue to administer and pay the retirement benefits of Plan participants but will be reimbursed by Prudential for the payment of all benefits covered by the Group Annuity Contract. The purchase of the Group Annuity Contract was funded directly by the Plan’s assets. There will be no impact on the monthly retirement benefits paid to Plan participants. In addition, there will be no material impact on discretionary contributions for the Plan in 2022 or on the Company’s earnings in 2022 as a result of this transaction.

Net periodic postretirement benefit credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Service cost for benefits earned	$	0.2	$	0.2
Interest cost on accumulated postretirement benefit obligation	1.7		2.9
Expected return on plan assets	(0.2)		(0.2)
Amortization of prior service credit	(13.4)		(11.0)
Net periodic postretirement benefit credit	$	(11.7)	$	(8.1)

In October 2021, the Company announced changes to its postretirement health care benefit plan for certain represented retirees which reduced its accumulated postretirement benefit obligation, as further described in Note 14. “Postretirement Health Care and Life Insurance Benefits” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings.

The Company has established a Voluntary Employees Beneficiary Association (VEBA) trust to pre-fund a portion of benefits for non-represented retirees. The Company does not expect to make any discretionary contributions to the VEBA trust in 2022 and plans to utilize a portion of VEBA assets to make certain benefit payments.

(13) Accumulated Other Comprehensive Income

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto recorded during the three months ended March 31, 2022:

	Foreign Currency Translation Adjustment		Prior Service Credit Associated with Postretirement Plans		Total Accumulated Other Comprehensive Income
	(Dollars in millions)
December 31, 2021	$	0.8	$	297.1	$	297.9
Reclassification from other comprehensive income to earnings	—		(13.4)		(13.4)
Current period change	1.9		—		1.9
March 31, 2022	$	2.7	$	283.7	$	286.4

Postretirement health care and life insurance benefits reclassified from other comprehensive income to earnings of $13.4 million and $11.0 million during the three months ended March 31, 2022 and 2021, respectively, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.

22

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(14) 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. 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.

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). Since the 2028 Convertible Notes were issued on March 1, 2022, there were approximately 5.5 million shares of potentially dilutive common stock for the three months ended March 31, 2022. These potentially dilutive shares were excluded from the computation of diluted EPS for the three months ended March 31, 2022, because to do so would have been anti-dilutive as the Company reported a net loss from continuing operations during the period. 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 related to the convertible debt.

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 1.2 million and 1.3 million for the three months ended March 31, 2022 and 2021, respectively, 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.

	Three Months Ended March 31,
	2022		2021
	(In millions, except per share data)
EPS numerator:
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Loss from continuing operations attributable to common stockholders	(118.7)		(78.1)
Loss from discontinued operations, net of income taxes	(0.8)		(2.0)
Net loss attributable to common stockholders	$	(119.5)	$	(80.1)
EPS denominator:
Weighted average shares outstanding — basic and diluted	136.2		98.4
Basic and diluted EPS attributable to common stockholders:
Loss from continuing operations	$	(0.87)	$	(0.79)
Loss from discontinued operations	(0.01)		(0.02)
Net loss attributable to common stockholders	$	(0.88)	$	(0.81)

23

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(15) Financial Instruments and Other Guarantees

The Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying condensed consolidated balance sheets. At March 31, 2022, such instruments included $1,484.9 million of surety bonds and $469.1 million of letters of credit. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying condensed consolidated balance sheets.

In November 2020, the Company entered into a surety agreement with the providers of its surety bond portfolio to resolve previous collateral demands. In accordance with the surety agreement, the Company initially provided $75.0 million of collateral, in the form of letters of credit. The Company subsequently granted second liens on $200.0 million of certain mining equipment and is further required to post an additional $25.0 million of collateral per year from 2021 through 2024 for the benefit of the surety providers. The collateral postings further increase to the extent the Company generates more than $100.0 million of free cash flow (as defined in the surety agreement) in any twelve-month period or has cumulative asset sales in excess of $10.0 million, as of the last quarter end during the term of the agreement. Based upon the Company’s free cash flow for the year ended December 31, 2021, additional collateral of $13.0 million was posted in January 2022 in the form of letters of credit. No such additional collateral was required for the period ended March 31, 2022.

Reclamation Bonding

The Company is required to provide various forms of financial assurance in support of its mining reclamation obligations in the jurisdictions in which it operates. Such requirements are typically established by statute or under mining permits.

At March 31, 2022, the Company’s asset retirement obligations of $724.5 million were supported by surety bonds of $1,312.1 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement. Letters of credit issued at March 31, 2022 which served as collateral for surety bonds in support of asset retirement obligations amounted to $340.0 million.

Accounts Receivable Securitization

The Company entered into the Sixth Amended and Restated Receivables Purchase Agreement, as amended, dated as of April 3, 2017 (the Receivables Purchase Agreement) to extend the Company’s receivables securitization facility previously in place and expand that facility to include certain receivables from the Company’s Australian operations. The receivables securitization program (Securitization Program) is subject to customary events of default set forth in the Receivables Purchase Agreement. The Receivables Purchase Agreement was amended in January 2022 to extend the Securitization Program to January 2025, reduce the available funding capacity from $250.0 million to $175.0 million, and amend the relevant borrowing rate from a LIBOR-based rate to one based on Bloomberg’s Short-Term Bank Yield Index (BSBY). 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, from time to time. Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations.

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

At March 31, 2022, the Company had no outstanding borrowings and $161.8 million of letters of credit issued under the Securitization Program. The letters of credit were primarily in support of reclamation obligations. Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $1.6 million at March 31, 2022. The Company was required to post cash collateral under the Securitization Program of $24.7 million at March 31, 2022 and none at December 31, 2021.

The Company incurred interest and fees associated with the Securitization Program of $0.9 million and $0.7 million during the three months ended March 31, 2022 and 2021, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

24

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Collateralized Letter of Credit Agreement

In February 2022, the Company entered into a new agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit in support of reclamation bonding. 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 deposit rate of 0.35% per annum on the amount of cash collateral posted in support of letters of credit, with the rate subject to increases over time. The agreement has an initial expiration date of December 31, 2025. The Company did not utilize the collateralized letter of credit facility until subsequent to March 31, 2022.

(16) Commitments and Contingencies

Commitments

Unconditional Purchase Obligations

As of March 31, 2022, purchase commitments for capital expenditures were $43.9 million, all of which is obligated within the next three years, with $35.6 million obligated within the next 12 months.

There were no other material changes to the Company’s commitments from the information provided in Note 23. “Commitments and Contingencies” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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 results of operations for the periods presented.

Litigation Relating to Continuing Operations

Securities Class Action. On September 28, 2020, the Oklahoma Firefighters Pension and Retirement System brought a lawsuit, styled In Re Peabody Energy Corporation Securities Litigation No. 1:20-cv-08024 (PKC), against the Company and certain of its officers in the U.S. District Court for the Southern District of New York (the Court) on behalf of a putative class of shareholders (Plaintiffs) who held Company stock between April 3, 2017 and October 28, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (Securities Class Action). Plaintiffs allege that the defendants made false or misleading statements and/or failed to disclose certain adverse facts pertaining to safety practices at the Company’s North Goonyella Mine and the events leading up to a fire at the mine, and that, after a September 28, 2018 fire at the mine, made false or misleading statements and/or failed to disclose certain adverse facts pertaining to the feasibility of the Company’s plan to restart the mine after the fire. On January 12, 2021, the Court appointed the Oregon Public Employees Retirement Fund as lead plaintiff. On January 25, 2021, the Court entered a scheduling order for this matter. Plaintiffs filed their amended complaint on March 19, 2021. The defendants filed a pre-motion letter on April 30, 2021 while the Plaintiffs’ response letter was filed on May 6, 2021. The defendants filed their motion to dismiss on June 7, 2021. The Plaintiffs’ opposition brief to the motion to dismiss was filed on July 22, 2021. The defendants filed their reply to Plaintiff’s opposition on August 23, 2021, completing briefing at this phase of the litigation. On March 7, 2022, the Court granted in part and denied in part the defendants’ motion to dismiss. As a result of this decision, only Plaintiffs’ allegations relating to the Company’s September 25, 2018 statements remain in the case. The Company believes the lawsuit lacks merit and intends to vigorously defend against the allegations.

Derivative Actions. On December 22, 2020, a plaintiff (Phelps), putatively on behalf of the Company, brought a shareholder derivative lawsuit, styled Phelps v. Samantha Algaze, et al., Case No. 1:20-cv-01747-UNA (D. Del. filed Dec. 22, 2020), in the U.S. District Court for the District of Delaware against certain directors and former officers of the Company, as defendants. The Company was also named as a nominal defendant. The plaintiff did not make a demand on the Company’s board before instituting the lawsuit and alleges such demand would have been futile. In the complaint, the plaintiff alleges that the defendants failed to disclose adverse facts relating to the safety practices at the Company’s North Goonyella Mine, thereby leading to a September 28, 2018 fire, and allegedly failed to disclose adverse facts pertaining to the feasibility of reopening the mine. The derivative complaint alleges (i) contribution against certain current and former officers for securities fraud based on the Securities Class Action, and against all defendants, (ii) breach of fiduciary duties, (iii) waste of corporate assets for causing the Company to incur legal liability and (iv) unjust enrichment.

25

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On February 10, 2021, a second plaintiff (Di Fusco), putatively on behalf of the Company, filed a similar shareholder derivative lawsuit, styled Di Fusco v. Glenn Kellow, et al., Case No. 1:21-cv-00183-UNA (D. Del. filed Feb. 10, 2021), in the U.S. District Court for the District of Delaware against the directors and current and former officers of the Company, as defendants. The Company was named as a nominal defendant. This suit makes claims similar to those made in the Phelps matter, but asserts a claim for alleged misstatements in a proxy statement under Section 14(a) of the Securities and Exchange Act of 1934. In late March 2021, the parties filed a stipulation agreeing to consolidate and stay both derivative actions for judicial efficiency and cost until the Court rules on the motion to dismiss in the Securities Class Action. In light of the March 7, 2022 decision on the motion to dismiss in the Securities Class Action, the parties are discussing how to proceed with the derivative actions, which currently remained stayed. The Company also believes that the derivative actions lack merit and intends to vigorously defend against the allegations.

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 financial condition, results of operations or cash flows. The Company reassesses the probability and estimability of contingent losses as new information becomes available.

(17) Segment Information

The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S. Thermal Mining and Corporate and Other. The Company’s chief operating decision maker, defined as our Chief Executive Officer, uses Adjusted EBITDA as the primary metric to measure the segments’ operating performance and allocate resources.

Adjusted EBITDA is a non-GAAP financial measure defined as loss 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 reconciliation below. Management believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt. 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.

Reportable segment results were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Revenue:
Seaborne Thermal Mining	$	251.2	$	176.4
Seaborne Metallurgical Mining	321.3		87.5
Powder River Basin Mining	251.2		228.4
Other U.S. Thermal Mining	203.1		149.3
Corporate and Other	(335.4)		9.7
Total	$	691.4	$	651.3
Adjusted EBITDA:
Seaborne Thermal Mining	$	90.5	$	28.5
Seaborne Metallurgical Mining	181.0		(22.4)
Powder River Basin Mining	7.6		30.1
Other U.S. Thermal Mining	50.0		36.2
Corporate and Other	(1.6)		(11.3)
Total	$	327.5	$	61.1

26

PEABODY ENERGY CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A reconciliation of consolidated loss from continuing operations, net of income taxes to Adjusted EBITDA follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Depreciation, depletion and amortization	72.9		68.3
Asset retirement obligation expenses	15.0		15.9
Restructuring charges	1.6		2.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	(0.6)		(1.5)
Interest expense	39.4		52.4
Net loss (gain) on early debt extinguishment	23.5		(3.5)
Interest income	(0.5)		(1.5)
Unrealized losses on derivative contracts related to forecasted sales	301.0		1.9
Unrealized (gains) losses on foreign currency option contracts	(3.3)		7.6
Take-or-pay contract-based intangible recognition	(0.7)		(1.1)
Income tax benefit	(1.0)		(1.8)
Adjusted EBITDA	$	327.5	$	61.1

27

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used in this report, the terms “Peabody” or “the Company” refer to Peabody Energy Corporation or its applicable subsidiary or subsidiaries. Unless otherwise noted herein, disclosures in this Quarterly Report on Form 10-Q relate only to the Company’s continuing operations.

When used in this filing, the term “ton” refers to short or net tons, equal to 2,000 pounds (907.18 kilograms), while “tonne” refers to metric tons, equal to 2,204.62 pounds (1,000 kilograms).

Cautionary Notice Regarding Forward-Looking Statements

This report includes statements of Peabody’s expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and are intended to come within the safe harbor protection provided by those sections. These statements relate to future events or Peabody’s future financial performance. The Company uses words such as “anticipate,” “believe,” “expect,” “may,” “forecast,” “project,” “should,” “estimate,” “plan,” “outlook,” “target,” “likely,” “will,” “to be” or other similar words to identify forward-looking statements.

Without limiting the foregoing, all statements relating to Peabody’s future operating results, anticipated capital expenditures, future cash flows and borrowings, and sources of funding are forward-looking statements and speak only as of the date of this report. These forward-looking statements are based on numerous assumptions that Peabody believes are reasonable, but are subject to a wide range of uncertainties and business risks, and actual results may differ materially from those discussed in these statements. These factors are difficult to accurately predict and may be beyond the Company’s control.

When considering these forward-looking statements, you should keep in mind the cautionary statements in this document and in the Company’s other Securities and Exchange Commission (SEC) filings, including, but not limited to, the more detailed discussion of these factors and other factors that could affect its results contained in Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of its Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022. These forward-looking statements speak only as of the date on which such statements were made, and the Company undertakes no obligation to update these statements except as required by federal securities laws.

Non-GAAP Financial Measures

The following discussion of the Company’s results of operations includes references to and analysis of Adjusted EBITDA, which is a financial measure not recognized in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Adjusted EBITDA is used by management as the primary metric to measure each of its segments’ operating performance and allocate resources.

Also included in the following discussion of the Company’s results of operations are references to Revenue per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton for each mining segment. These metrics are used by management to measure each of its mining segments’ operating performance. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the mining 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 Reporting Segment Costs) in the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2.

In its discussion of liquidity and capital resources, the Company includes references to Free Cash Flow which is also a non-GAAP measure. Free Cash Flow is used by management as a measure of its financial performance and its ability to generate excess cash flow from its business operations.

The Company believes non-GAAP performance measures are used by investors to measure its operating performance and lenders to measure its ability to incur and service debt. These measures are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Refer to the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2 for definitions and reconciliations to the most comparable measures under U.S. GAAP.

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Overview

Peabody is a leading producer of metallurgical and thermal coal. In 2021, the Company produced and sold 126.9 million and 130.1 million tons of coal, respectively, from continuing operations. At March 31, 2022, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia. Included in that count is Peabody’s 50% equity interest in Middlemount Coal Pty Ltd. (Middlemount), which owns the Middlemount Mine in Queensland, Australia. In addition to its mining operations, the Company markets and brokers coal from other coal producers, both as principal and agent, and trades coal and freight-related contracts.

The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S. Thermal Mining and Corporate and Other. Refer to Note 17. “Segment Information” to the accompanying unaudited condensed consolidated financial statements for further information regarding those segments and the components of its Corporate and Other segment.

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 thermal coal, and prompt month pricing for PRB 8,880 Btu/Lb coal and Illinois Basin 11,500 Btu/Lb coal during the three months ended March 31, 2022 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 three months ended March 31, 2022 due to quality differentials and the majority 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. The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a bi-annual, 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 three months ended March 31, 2022 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.

	High		Low		Average		March 31, 2022		April 29, 2022
Premium HCC (1)	$	670.50	$	357.75	$	487.80	$	515.00	$	518.00
Premium PCI coal (1)	655.00		244.50		393.47		475.50		460.00
Newcastle index thermal coal (1)	395.59		201.54		263.75		271.06		356.03
API 5 thermal coal (1)	284.20		109.66		172.41		190.00		196.62
PRB 8,800 Btu/Lb coal (2)	27.50		17.50		21.67		17.50		15.78
Illinois Basin 11,500 Btu/Lb coal (2)	155.00		88.00		104.06		126.00		131.00

(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 have been impacted by the recent Russian-Ukrainian conflict and the coronavirus (COVID-19) pandemic. Furthermore, inflationary pressures have contributed to rising costs. As future developments related to the Russian-Ukrainian conflict, the COVID-19 pandemic and rising inflation are unknown, the global coal industry data for the three months ended March 31, 2022 presented herein may not be indicative of their ultimate impacts.

29

Within the seaborne metallurgical coal market, the three months ended March 31, 2022 were characterized by significant volatility, primarily driven by sanctions and trade redistribution efforts following the onset of the Russian-Ukrainian conflict. Buyers in Atlantic markets are seeking to mitigate exposure to Russian coal imports, causing an upswell in demand for supply from other regions such as Australia, the U.S. and Canada. Market prices rose approximately $300 per metric tonne from January to mid-March, far exceeding prior records, before falling a similar quantum through the end of March and start of April amid scant market liquidity. Prices have once more begun increasing in April, following the European Union and Japan firming their stance and announcing total bans on Russian coal imports. This will have a particular impact on the PCI market, where Russia accounts for approximately 35% of global traded volumes. China’s unofficial ban on Australian coal remains in place and continues to disrupt traditional trade flows. Global supply remains tight and this dynamic is only intensifying with the sanctions imposed on Russian imports. The Company believes energy shortages in some markets present a risk to industrial activity but the underlying market fundamentals remain constructive.

Within the seaborne thermal coal market, the Russian-Ukrainian conflict and the subsequent ban of Russian coal by European countries has driven global thermal coal prices to record levels and high volatility during the three months ended March 31, 2022. Prior to the Russian-Ukrainian conflict, thermal coal supply was already tight due to an export ban in Indonesia in January as well as heavy rains and COVID-19 restrictions in Australia. During the three months ended March 31, 2022, Newcastle thermal coal pricing hit record levels due to concerns over a severe supply shock following the onset of the Russian-Ukrainian conflict, but pricing subsided slightly to end the quarter in the $200 per metric tonne range. In China, domestic coal production has been strong during the three months ended March 31, 2022, which has lowered import demand to start the year. In India, coal production has been elevated as well, allowing coal buyers to wait for lower thermal seaborne prices and limit imports; however stockpile levels have fallen recently. Overall, global thermal coal markets remain turbulent as supply remains tight and European coal importers look to replace Russian coal.

In the United States, overall electricity demand increased more than 3% year-over-year, positively impacted by weather. Through the three months ended March 31, 2022, electricity generation from thermal coal has declined year-over-year due to strong year-over-year comparatives in February 2021, as well as record renewable generation. Coal’s share of electricity generation has declined slightly to approximately 22% for the three months ended March 31, 2022, while wind generation’s share has increased to 11%. Coal inventories have continued to decline since December 2021, with a decline of approximately 5% or 5 million tons. During the three months ended March 31, 2022, utility consumption of PRB coal rose approximately 1% compared to the prior year period.

Financing and Liquidity Transactions

During the first quarter of 2022, Peabody issued convertible senior unsecured notes and used the proceeds of the offering to retire nearer term higher cost senior secured debt. This both lowered the Company’s borrowing rates and extended debt maturities to 2028.

High demand and tight supply for coal globally has resulted in a substantial rise in seaborne thermal coal prices, which has been amplified by the Russian-Ukrainian conflict, resulting in unprecedented upward volatility in Newcastle coal pricing since late February. As a result, Peabody posted additional cash margin of $351.6 million during the three months ended March 31, 2022 to satisfy the margin requirements for its derivative contracts.

During the quarter, the Company put in place a revolving financing facility to support near-term liquidity requirements, particularly with respect to these cash margin requirements which fluctuate depending upon the underlying market coal prices. The Company received proceeds under the revolving financing facility which were repaid in full with proceeds from the sale of shares under the at-the-market offering program.

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

Other

In March 2022, the Company entered into a joint venture with unrelated partners to form R3 Renewables LLC (R3). R3 was formed with the intent of developing various sites, including certain non-mining land held by the Company in the U.S., for utility-scale photovoltaic solar generation and battery storage. The Company’s interest in R3 is accounted for as an equity method investment. The Company contributed $2.0 million to R3 and recorded an equity loss of $1.0 million from its operations during the three months ended March 31, 2022.

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In March 2022, Peabody Investments Corp., a wholly owned subsidiary of the Company, entered into a commitment agreement relating to one of its qualified pension plans (the Plan) with an insurer. Under the commitment agreement, the Plan purchased a group annuity contract for approximately $500 million and the insurer will reimburse the Plan for future benefit payments to be made to the Plan’s participants. Under the terms of this transaction, the Plan will continue to administer and pay the retirement benefits of Plan participants but will be reimbursed by the insurer for the payment of all benefits covered by the group annuity contract. Refer to Note 12. “Pension and Postretirement Benefit Costs” to the accompanying unaudited condensed consolidated financial statements for a further discussion of this transaction.

Results of Operations

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Summary

The Company’s revenue for the three months ended March 31, 2022 increased compared to the same period in 2021 ($40.1 million) primarily due to the impacts of higher pricing, offset by net unrealized mark-to-market losses on derivative contracts related to forecasted sales and other financial trading activity ($290.2 million).

Results from continuing operations, net of income taxes for the three months ended March 31, 2022 decreased compared to the same period in the prior year ($42.1 million), primarily due to higher operating costs and expenses ($116.4 million) which reflected inflationary pressures and increased costs for materials, services, repairs and labor related to the Company’s efforts to ramp up the operations to meet current and anticipated volumes. The results were further impacted by net losses on early debt extinguishments in the current year ($27.0 million). These unfavorable variances were offset by improved results from equity affiliates ($45.6 million), a favorable revenue variance due to higher pricing exceeding the net unrealized mark-to-market losses as described above ($40.1 million); and decreased interest expense ($13.0 million).

Adjusted EBITDA for the three months ended March 31, 2022 reflected a year-over-year increase of $266.4 million.

As of March 31, 2022, the Company’s available liquidity was approximately $842 million. Refer to the “Liquidity and Capital Resources” section contained within this Item 2 for a further discussion of factors affecting the Company’s available liquidity.

Tons Sold

The following table presents tons sold by operating segment:

	Three Months Ended March 31,		(Decrease ) Increase to Volumes
	2022	2021	Tons	%
	(Tons in millions)
Seaborne Thermal Mining	3.8	4.1	(0.3)	(7)	%
Seaborne Metallurgical Mining	1.2	1.0	0.2	20	%
Powder River Basin Mining	20.6	20.7	(0.1)	—	%
Other U.S. Thermal Mining	4.2	3.9	0.3	8	%
Total tons sold from mining segments	29.8	29.7	0.1	—	%
Corporate and Other	0.1	0.5	(0.4)	(80)	%
Total tons sold	29.9	30.2	(0.3)	(1)	%

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Supplemental Financial Data

The following table presents supplemental financial data by operating segment:

	Three Months Ended March 31,				Increase (Decrease)
	2022		2021		$		%
Revenue per Ton - Mining Operations (1)
Seaborne Thermal	$	66.86	$	43.36	$	23.50	54	%
Seaborne Metallurgical	258.43		87.47		170.96		195	%
Powder River Basin	12.18		11.01		1.17		11	%
Other U.S. Thermal	48.46		38.76		9.70		25	%
Costs per Ton - Mining Operations (1)(2)
Seaborne Thermal	$	42.77	$	36.36	$	6.41	18	%
Seaborne Metallurgical	112.87		109.89		2.98		3	%
Powder River Basin	11.81		9.56		2.25		24	%
Other U.S. Thermal	36.54		29.37		7.17		24	%
Adjusted EBITDA Margin per Ton - Mining Operations (1)(2)
Seaborne Thermal	$	24.09	$	7.00	$	17.09	244	%
Seaborne Metallurgical	145.56		(22.42)		167.98		749	%
Powder River Basin	0.37		1.45		(1.08)		(74)	%
Other U.S. Thermal	11.92		9.39		2.53		27	%

(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; and certain other costs related to post-mining activities.

Revenue

The following table presents revenue by reporting segment:

	Three Months Ended March 31,				Increase (Decrease) to Revenue
	2022		2021		$		%
	(Dollars in millions)
Seaborne Thermal Mining	$	251.2	$	176.4	$	74.8	42	%
Seaborne Metallurgical Mining	321.3		87.5		233.8		267	%
Powder River Basin Mining	251.2		228.4		22.8		10	%
Other U.S. Thermal Mining	203.1		149.3		53.8		36	%
Corporate and Other	(335.4)		9.7		(345.1)		(3,558)	%
Revenue	$	691.4	$	651.3	$	40.1	6	%

Seaborne Thermal Mining. Segment revenue increased during the three months ended March 31, 2022 compared to the same period in the prior year primarily due to favorable realized coal pricing ($110.9 million), offset by unfavorable volumes ($36.1 million) which were impacted by a longwall move at the Wambo Underground Mine, wet weather and COVID-19-related staffing shortages.

Seaborne Metallurgical Mining. Segment revenue increased during the three months ended March 31, 2022 compared to the same period in the prior year due to favorable realized coal pricing ($190.2 million) and favorable volume and mix variances ($43.6 million).

Powder River Basin Mining. Segment revenue increased during the three months ended March 31, 2022 compared to the same period in the prior year primarily due to favorable realized coal pricing ($27.2 million), partially offset by unfavorable volumes ($4.4 million).

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Other U.S. Thermal Mining. Segment revenue increased during the three months ended March 31, 2022 compared to the same period in the prior year due to favorable realized pricing ($40.0 million) and favorable volumes ($13.8 million).

Corporate and Other. Segment revenue decreased during the three months ended March 31, 2022 compared to the same period in the prior year primarily due to net unrealized mark-to-market losses on derivative contracts related to forecasted coal sales and other financial trading activity ($285.3 million) and lower results from trading activities ($61.8 million).

Adjusted EBITDA

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

	Three Months Ended March 31,				Increase (Decrease) to Segment Adjusted EBITDA
	2022		2021		$		%
	(Dollars in millions)
Seaborne Thermal Mining	$	90.5	$	28.5	$	62.0	218	%
Seaborne Metallurgical Mining	181.0		(22.4)		203.4		908	%
Powder River Basin Mining	7.6		30.1		(22.5)		(75)	%
Other U.S. Thermal Mining	50.0		36.2		13.8		38	%
Corporate and Other	(1.6)		(11.3)		9.7		86	%
Adjusted EBITDA (1)	$	327.5	$	61.1	$	266.4	436	%

(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 Mining. Segment Adjusted EBITDA increased during the three months ended March 31, 2022 compared to the same period in the prior year as a result of higher realized net coal pricing ($102.3 million), partially offset by unfavorable operational costs ($40.5 million) resulting from the longwall move at the Wambo Underground Mine, the impacts of wet weather, COVID-19-related staffing shortages and inflationary pressures.

Seaborne Metallurgical Mining. Segment Adjusted EBITDA increased during the three months ended March 31, 2022 compared to the same period in the prior year due to higher realized net coal pricing ($176.3 million) and cost improvements at certain mines ($23.4 million).

Powder River Basin Mining. Segment Adjusted EBITDA decreased during the three months ended March 31, 2022 compared to the same period in the prior year due to higher costs for materials, services, repairs and labor ($29.5 million) related to efforts to ramp up the operations to meet current and anticipated volumes and the unfavorable impacts of higher commodity pricing ($14.7 million), both of which were also impacted by inflationary pressures. These decreases were partially offset by higher realized net coal pricing ($27.3 million).

Other U.S. Thermal Mining. Segment Adjusted EBITDA increased during the three months ended March 31, 2022 compared to the same period in the prior year due to higher realized net coal pricing ($41.6 million) and favorable volumes ($6.7 million). These increases were offset by higher costs for materials, services, repairs and labor ($24.4 million) related to efforts to ramp up the operations to meet current and anticipated volumes and the unfavorable impacts of higher commodity pricing ($10.0 million), both of which were also impacted by inflationary pressures.

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

	Three Months Ended March 31,				Increase (Decrease) to Adjusted EBITDA
	2022		2021		$		%
	(Dollars in millions)
Middlemount (1)	$	45.1	$	(2.3)	$	47.4	2,061	%
Resource management activities (2)	3.5		0.4		3.1		775	%
Selling and administrative expenses	(23.1)		(21.7)		(1.4)		(6)	%
Other items, net (3)	(27.1)		12.3		(39.4)		(320)	%
Corporate and Other Adjusted EBITDA	$	(1.6)	$	(11.3)	$	9.7	86	%

(1)Middlemount’s results are before the impact of related changes in deferred tax asset valuation allowance and reserves and amortization of basis difference. Middlemount’s standalone results included (on a 50% attributable basis) aggregate amounts of depreciation, depletion and amortization, asset retirement obligation expenses, net interest expense and income taxes of $45.0 million and $11.7 million during the three months ended March 31, 2022 and 2021, respectively.

(2)Includes gains (losses) on certain surplus coal reserve 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, costs associated with suspended operations including the North Goonyella Mine and expenses related to the Company’s other commercial activities.

Corporate and Other Adjusted EBITDA benefited during the three months ended March 31, 2022 compared to the same period in the prior year from a favorable variance in Middlemount’s results ($47.4 million) due to the impact of higher sales pricing. This benefit was largely offset by unfavorable trading results ($41.9 million).

Loss From Continuing Operations, Net of Income Taxes

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

	Three Months Ended March 31,				Increase (Decrease) to Income
	2022		2021		$		%
	(Dollars in millions)
Adjusted EBITDA (1)	$	327.5	$	61.1	$	266.4	436	%
Depreciation, depletion and amortization	(72.9)		(68.3)		(4.6)		(7)	%
Asset retirement obligation expenses	(15.0)		(15.9)		0.9		6	%
Restructuring charges	(1.6)		(2.1)		0.5		24	%
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	0.6		1.5		(0.9)		(60)	%
Interest expense	(39.4)		(52.4)		13.0		25	%
Net (loss) gain on early debt extinguishment	(23.5)		3.5		(27.0)		(771)	%
Interest income	0.5		1.5		(1.0)		(67)	%
Unrealized losses on derivative contracts related to forecasted sales	(301.0)		(1.9)		(299.1)		(15,742)	%
Unrealized gains (losses) on foreign currency option contracts	3.3		(7.6)		10.9		143	%
Take-or-pay contract-based intangible recognition	0.7		1.1		(0.4)		(36)	%
Income tax benefit	1.0		1.8		(0.8)		(44)	%
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)	$	(42.1)	(54)	%

(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.

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

	Three Months Ended March 31,				(Decrease) Increase to Income
	2022		2021		$		%
	(Dollars in millions)
Seaborne Thermal Mining	$	(24.0)	$	(21.1)	$	(2.9)	(14)	%
Seaborne Metallurgical Mining	(19.9)		(16.5)		(3.4)		(21)	%
Powder River Basin Mining	(10.5)		(9.6)		(0.9)		(9)	%
Other U.S. Thermal Mining	(15.7)		(17.2)		1.5		9	%
Corporate and Other	(2.8)		(3.9)		1.1		28	%
Total	$	(72.9)	$	(68.3)	$	(4.6)	(7)	%

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

	Three Months Ended March 31,
	2022		2021
Seaborne Thermal Mining	$	2.48	$	1.87
Seaborne Metallurgical Mining	2.12		1.00
Powder River Basin Mining	0.33		0.23
Other U.S. Thermal Mining	1.17		1.12

Depreciation, depletion and amortization expense increased during the three months ended March 31, 2022 compared to the same period in the prior year primarily due to increased depletion. The increase in the weighted-average depletion rate per ton for the Seaborne Thermal Mining segment during the three months ended March 31, 2022 compared to the same period in the prior year reflects the impact of the transition to the United Wambo Joint Venture. The increase in the weighted-average depletion rate per ton for the Seaborne Metallurgical Mining segment during the three months ended March 31, 2022 compared to the same period in the prior year reflects the volume and mix variances which impacted the Company’s revenue as described above.

Interest Expense. The decrease in interest expense during the three months ended March 31, 2022 was primarily driven by prior year fees related to a series of refinancing transactions completed by the Company ($10.6 million) as further described in Note 11. “Long-term Debt” to the Annual Report on Form 10-K for the year ended December 31, 2021.

Net (Loss) Gain on Early Debt Extinguishment. The loss recognized during the three months ended March 31, 2022 was primarily related to the redemption of existing notes during the period as further discussed in Note 11. “Long-term Debt” to the accompanying unaudited condensed consolidated financial statements.

Unrealized Losses on Derivative Contracts Related to Forecasted Sales. Unrealized losses primarily relate to mark-to-market activity on derivatives related to forecasted sales. For additional information, refer to Note 7. “Derivatives and Fair Value Measurements” to the accompanying unaudited condensed consolidated financial statements.

Unrealized Gains (Losses) on Foreign Currency Option Contracts. Unrealized gains (losses) primarily relate to mark-to-market activity on foreign currency option contracts. For additional information, refer to Note 7. “Derivatives and Fair Value Measurements” to the accompanying unaudited condensed consolidated financial statements.

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Net Loss Attributable to Common Stockholders

The following table presents net loss attributable to common stockholders:

	Three Months Ended March 31,				(Decrease) Increase to Income
	2022		2021		$		%
	(Dollars in millions)
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)	$	(42.1)	(54)	%
Loss from discontinued operations, net of income taxes	(0.8)		(2.0)		1.2		60	%
Net loss	(120.6)		(79.7)		(40.9)		(51)	%
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4		(1.5)		(375)	%
Net loss attributable to common stockholders	$	(119.5)	$	(80.1)	$	(39.4)	(49)	%

Diluted Earnings per Share (EPS)

The following table presents diluted EPS:

	Three Months Ended March 31,				(Decrease) Increase to EPS
	2022		2021		$		%
Diluted EPS attributable to common stockholders:
Loss from continuing operations	$	(0.87)	$	(0.79)	$	(0.08)	(10)	%
Loss from discontinued operations	(0.01)		(0.02)		0.01		50	%
Net loss attributable to common stockholders	$	(0.88)	$	(0.81)	$	(0.07)	(9)	%

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 136.2 million and 98.4 million for the three months ended March 31, 2022 and 2021, respectively.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA is defined as loss 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 each of its segment’s operating performance, as displayed in the reconciliations below.

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Depreciation, depletion and amortization	72.9		68.3
Asset retirement obligation expenses	15.0		15.9
Restructuring charges	1.6		2.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	(0.6)		(1.5)
Interest expense	39.4		52.4
Net loss (gain) on early debt extinguishment	23.5		(3.5)
Interest income	(0.5)		(1.5)
Unrealized losses on derivative contracts related to forecasted sales	301.0		1.9
Unrealized (gains) losses on foreign currency option contracts	(3.3)		7.6
Take-or-pay contract-based intangible recognition	(0.7)		(1.1)
Income tax benefit	(1.0)		(1.8)
Total Adjusted EBITDA	$	327.5	$	61.1

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Revenue per Ton and Adjusted EBITDA Margin per Ton are equal to revenue by segment and Adjusted EBITDA by segment, respectively, divided by segment tons sold. Costs per Ton is equal to Revenue per Ton less Adjusted EBITDA Margin per Ton, and are reconciled to operating costs and expenses as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Operating costs and expenses	$	699.0	$	582.6
Unrealized gains (losses) on foreign currency option contracts	3.3		(7.6)
Take-or-pay contract-based intangible recognition	0.7		1.1
Net periodic benefit credit, excluding service cost	(12.2)		(8.7)
Total Reporting Segment Costs	$	690.8	$	567.4

The following table presents Reporting Segment Costs by reporting segment:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Seaborne Thermal Mining	$	160.7	$	147.9
Seaborne Metallurgical Mining	140.3		109.9
Powder River Basin Mining	243.6		198.3
Other U.S. Thermal Mining	153.1		113.1
Corporate and Other	(6.9)		(1.8)
Total Reporting Segment Costs	$	690.8	$	567.4

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

	Three Months Ended March 31, 2022
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining
	(Amounts in millions, except per ton data)
Tons sold	3.8		1.2		20.6		4.2
Revenue	$	251.2	$	321.3	$	251.2	$	203.1
Reporting Segment Costs	160.7		140.3		243.6		153.1
Adjusted EBITDA	$	90.5	$	181.0	$	7.6	$	50.0
Revenue per Ton	$	66.86	$	258.43	$	12.18	$	48.46
Costs per Ton	42.77		112.87		11.81		36.54
Adjusted EBITDA Margin per Ton	$	24.09	$	145.56	$	0.37	$	11.92

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	Three Months Ended March 31, 2021
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining
	(Amounts in millions, except per ton data)
Tons sold	4.1		1.0		20.7		3.9
Revenue	$	176.4	$	87.5	$	228.4	$	149.3
Reporting Segment Costs	147.9		109.9		198.3		113.1
Adjusted EBITDA	$	28.5	$	(22.4)	$	30.1	$	36.2
Revenue per Ton	$	43.36	$	87.47	$	11.01	$	38.76
Costs per Ton	36.36		109.89		9.56		29.37
Adjusted EBITDA Margin per Ton	$	7.00	$	(22.42)	$	1.45	$	9.39

Free Cash Flow is defined as net cash (used in) provided by operating activities less net cash provided by (used in) investing activities and excludes cash outflows related to business combinations. See the table below for a reconciliation of Free Cash Flow to its most comparable measure under U.S. GAAP.

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Net cash (used in) provided by operating activities	$	(273.7)	$	71.0
Net cash provided by (used in) investing activities	35.2		(93.2)
Free Cash Flow	$	(238.5)	$	(22.2)

Regulatory Update

Other than as described in the following section, there were no significant changes to the Company’s regulatory matters subsequent to December 31, 2021. Information regarding the Company’s regulatory matters is outlined in Part I, Item 1. “Business” in its Annual Report on Form 10-K for the year ended December 31, 2021.

Regulatory Matters - U.S.

National Ambient Air Quality Standards (NAAQS). The Clean Air Act (CAA) requires the United States Environmental Protection Agency (EPA) to review national ambient air quality standards every five years to determine whether revision to current standards are appropriate. As part of this recurring review process, the EPA in 2020 proposed to retain the ozone standards promulgated in 2015, including current secondary standards, and subsequently promulgated final standards to this effect. Fifteen states and other petitioners have filed a petition for review of the rule in the United States Court of Appeals for the D.C. Circuit (D.C. Circuit). The litigation is currently in abeyance following a motion filed by the EPA to allow for review of the standards.

The EPA also proposed in 2020 to retain the particulate matter (PM) standards last revised in 2012. On December 18, 2020, the EPA issued a final rule to retain both the primary annual and 24-hour PM standards for fine particulate matter (PM2.5) and the primary 24-hour standard for coarse particulate matter (PM10) and secondary PM10 standards. This rule has also been challenged in the D.C. Circuit by several states and environmental organizations. The case is currently in abeyance following a motion filed by the EPA to allow for review of the standards.

On March 11, 2022, the EPA announced their Clean Air Act ‘good neighbor’ proposed rule. The rule would double the number of covered states, set first-time limits on certain industrial source plant boilers and require daily limits on emissions from large coal-fired power plants. The EPA estimates that by 2026 the compliance cost will be $1.1 billion.

More stringent PM or ozone standards would require new state implementation plans to be developed and filed with the EPA and may trigger additional control technology for mining equipment or result in additional challenges to permitting and expansion efforts. This could also be the case with respect to other NAAQS for nitrogen dioxide (NO2) and sulfur dioxide (SO2), although these standards are not subject to a statutorily-required review until 2023 for NO2 and 2024 for SO2.

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Cross State Air Pollution Rule (CSAPR) and CSAPR Update Rule. In 2011, the EPA finalized the CSAPR, which requires the District of Columbia and 27 states from Texas eastward (not including the New England states or Delaware) to reduce power plant emissions that cross state lines and significantly contribute to ozone and/or fine particle pollution in other states. In 2016, the EPA published the final CSAPR Update Rule which imposed additional reductions in nitrogen oxides (NOx) beginning in 2017 in 22 states subject to CSAPR. This rule was subsequently remanded back to the EPA. Wisconsin v. EPA, 938 F.3d 303.

In April 2021, the EPA published a final rule in the Federal Register to address the D.C. Circuit remand. This rule imposed further reductions of NOx emissions in 12 states that were subject to the original 2016 rule, which was based on the 2008 ozone standard.

In the same rule, the EPA determined that 9 states did not significantly contribute to downwind nonattainment and/or maintenance issues and therefore did not require additional emission reductions. The EPA subsequently issued Federal Implementation Plans (FIPs) to lower state ozone season NOx budgets in 2021 to 2024 in the affected states. A petition for review challenging the 2021 rule has been filed in the D.C. Circuit and briefing in this litigation has been completed, but this does not stay the effectiveness of the rule.

In addition, on February 28, 2022, the EPA released a proposed rule for additional FIPs to address interstate air pollution from fossil-fuel power plants in 25 states and certain industrial sources in 23 states. This rule is based on the more stringent 2015 ozone NAAQS and would, if finalized, affect some of the states covered by previous rules, but also include several new states, including states in the western United States.

Mercury and Air Toxic Standards (MATS). The EPA published the final MATS rule in the Federal Register in 2012. The MATS rule revised the new source performance standards (NSPS) for NOx, SO2 and PM for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants. MACT standards limit emissions of mercury, acid gas HAPs, non-mercury HAP metals and organic HAPs.

In 2020, the EPA issued a final rule reversing a prior finding and determined that it is not “appropriate and necessary” under the CAA to regulate HAP emissions from coal- and oil-fired power plants. This rule also finalized residual risk and technology review standards for the coal- and oil-fired electricity utility generating units source category. Both actions were challenged in the D.C. Circuit but this litigation was placed in abeyance. On February 9, 2022 the EPA proposed a rule to revoke the 2020 finding and to reaffirm the agency’s 2016 finding that it remains “appropriate and necessary” to regulate HAP emissions from coal- and oil-fired powerplants under Clean Air Act section 112. In the same proposal, the EPA is also soliciting comments on the performance and cost of new or improved technologies to control HAPs from these powerplants as part of the agency’s review of related residual risk and technology review standards.

Clean Water Act (CWA). The CWA of 1972 directly impacts U.S. coal mining operations by requiring effluent limitations and treatment standards for wastewater discharge from mines through the National Pollutant Discharge Elimination System (NPDES). Regular monitoring, reporting and performance standards are requirements of NPDES permits that govern the discharge of water from mine-related point sources into receiving waters.

The U.S. Army Corps of Engineers (Corps) regulates certain activities affecting navigable waters and waters of the U.S., including wetlands. Section 404 of the CWA requires mining companies to obtain permits from the Corps to place material in or mine through jurisdictional waters of the U.S.

States are empowered to develop and apply water quality standards. These standards are subject to change and must be approved by the EPA. Discharges must either meet state water quality standards or be authorized through available regulatory processes such as alternate standards or variances. Standards vary from state to state. Additionally, through the CWA Section 401 certification program, state and tribal regulators have approval authority over federal permits or licenses that might result in a discharge to their waters. State and tribal regulators consider whether the activity will comply with their water quality standards and other applicable requirements in deciding whether or not to certify the activity. The EPA issued a final rule in 2020 that could limit state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections in some circumstances. That rule was temporarily vacated by a district court, but a Supreme Court order on April 7, 2022, effectively reinstated the rule. The EPA, however, plans to issue another proposal in 2022 that would supersede the 2020 rule.

Regulatory Matters - Australia

The outcome of Australia’s federal election on May 21, 2022 has the potential to impact federal environmental, taxation, labor market and other legislation governing Australian mining operations.

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On March 15, 2022, the Full Court of the Federal Court of Australia overturned the decision in Sharma v Minister for the Environment [2021] FCA 560 (Sharma), a case which found in 2021 that the Federal Minister for the Environment had a duty to avoid causing personal injury or death to children in Australia as a result of carbon emissions when deciding an application to approve a coal mine expansion. In light of this decision, the Minister no longer must consider the effects of carbon emissions when assessing referrals under the Environment Protection and Biodiversity Conservation Act 1999. However, an application by Sharma for special leave to appeal to the High Court of Australia remains probable, and the duty could be reinstated.

As part of the Queensland Government’s 2019-20 Budget, it committed to freeze royalty rates on coal and minerals for three years provided companies voluntarily contribute to the Resources Community Infrastructure Fund. The royalty freeze is due to end in June 2022 and the Queensland Government has not established a replacement rate.

The New South Wales Mining and Geoscience Department will be undertaking consultation with respect to the manner for calculating mining royalties in New South Wales between April and June 2022 as part of a proposed redraft of the Mining Royalties (COAL) – Ministerial Determination under Section 283(5) of the Mining Act 1992.

Risks Related to Global Climate Change

Peabody recognizes that climate change is occurring and that human activity, including the use of fossil fuels, contributes to greenhouse gas (GHG) emissions. The Company’s largest contribution to GHG emissions occurs indirectly, through the coal used by its customers in the generation of electricity and the production of steel (Scope 3). To a lesser extent, the Company directly and indirectly contributes to GHG emissions from various aspects of its mining operations, including from the use of electrical power and combustible fuels, as well as from the fugitive methane emissions associated with coal mines and stockpiles (Scopes 1 and 2).

Peabody’s board of directors and management believe that coal is essential to affordable, reliable energy and will continue to play a significant role in the global energy mix for the foreseeable future. Peabody views technology as vital to advancing global climate change solutions, and the company supports advanced coal technologies to drive continuous improvement toward the ultimate goal of net-zero emissions from coal.

The board of directors has ultimate oversight for climate-related risk and opportunity assessments, and has delegated certain aspects of these assessments to subject matter committees of the board. In addition, the board and its committees are provided regular updates on major risks and changes, including climate-related matters. The senior management team champions the strategic objectives set forth by the board of directors and Peabody’s global workforce turns those objectives into meaningful actions.

Management believes that the Company’s external communications, including environmental regulatory filings and public notices, SEC filings, its annual Environmental, Social and Governance (ESG) Report, its website and various other stakeholder-focused publications provide a comprehensive picture of the Company’s material risks and progress. All such communications are subject to oversight and review protocols established by Peabody’s board of directors and executive leadership team.

The Company faces risks from both the global transition to a net-zero emissions economy and the potential physical impacts of climate change. Such risks may involve financial, policy, legal, technological, reputational and other impacts as the Company meets various mitigation and adaptation requirements.

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The transition to a net-zero emissions economy is driven by many factors, including, but not limited to, legislative and regulatory rulemaking processes, campaigns undertaken by non-governmental organizations to minimize or eliminate the use of coal as a source of electricity generation, and the ESG-related policies of financial institutions and other private companies. The Company has experienced, or may in the future experience, negative effects on its results of operations due to the following specific risks as a result of such factors:

•Reduced utilization or closure of existing coal-fired electricity generating plants;

•Electricity generators switching from coal to alternative fuels, when feasible;

•Increased costs associated with regulatory compliance;

•Unfavorable impact of regulatory compliance on supply and demand fundamentals, such as limitations on financing or construction of new coal-fueled power stations;

•Uncertainty and inconsistency in rulemaking processes related to periodic governmental administrative and policy changes;

•Unfavorable costs of capital and access to financial markets and products due to the policies of financial institutions;

•Disruption to operations or markets due to anti-coal activism and litigation; and

•Reputational damage associated with involvement in GHG emissions.

With respect to the potential or actual physical impacts of climate change, the Company has identified the following specific risks:

•Disruption to water supplies vital to mining operations;

•Disruption to transportation and other supply chain activities;

•Damage to the Company’s, customers’ or suppliers’ plant and equipment, or third-party infrastructure, resulting from weather events or changes in environmental trends and conditions; and

•Electrical grid failures and power outages.

While the Company faces numerous risks associated with the transition to a net-zero emissions economy and the physical impacts of climate change, certain opportunities may also emerge, such as:

•Heightened emphasis among multiple stakeholders to develop high-efficiency, low-emissions (HELE) technologies and carbon capture, use and storage (CCUS) technologies;

•Increased steel demand related to construction and other infrastructure projects related to climate change concerns; and

•The relative expense and reliability of renewable energy sources compared to coal may encourage support for balanced-source energy policies and regulations.

Global climate issues continue to attract public and scientific attention. Numerous reports, such as the Fourth and the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues. In turn, increasing government attention is being paid to global climate issues and to GHG emissions, including emissions of carbon dioxide from coal combustion by power plants. There have been significant developments in federal and state legislation and regulation and international accords regarding climate change. Such developments are described within Part I, Item 1. “Business” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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The enactment of future laws or the passage of regulations regarding emissions from the use of coal by the U.S., some of its states or other countries, or other actions to limit such emissions, could result in electricity generators switching from coal to other fuel sources. Further, policies limiting available financing for the development of new coal-fueled power stations could adversely impact the global demand for coal in the future. The potential financial impact on Peabody of such future laws, regulations or other policies will depend upon the degree to which any such laws or regulations force electricity generators to diminish their reliance on coal as a fuel source. That, in turn, will depend on a number of factors, including the specific requirements imposed by any such laws, regulations or other policies, the time periods over which those laws, regulations or other policies would be phased in, the state of development and deployment of CCUS technologies as well as acceptance of CCUS technologies to meet regulations and the alternative uses for coal. Higher-efficiency coal-fired power plants may also be an option for meeting laws or regulations related to emissions from coal use. Several countries, including major coal users such as China, India and Japan, included using higher-efficiency coal-fueled power plants in their plans under the Paris Agreement. The Company believes HELE and CCUS technologies should be part of the solution to achieve substantial reductions in GHG emissions and should be broadly supported and encouraged, including through eligibility for public funding from national and international sources. In addition, CCUS merits targeted deployment incentives, like those provided to other low-emission sources of energy.

From time to time, the Company’s board of directors and management attempt to analyze the potential impact on the Company of as-yet-unadopted, potential laws, regulations and policies. Such analyses require significant assumptions as to the specific provisions of such potential laws, regulations and policies which sometimes show that if implemented in the manner assumed by the analyses, the potential laws, regulations and policies could result in material adverse impacts on the Company’s operations, financial condition or cash flows. Such analyses cannot be relied upon to reasonably predict the quantitative impact that future laws, regulations or other policies may have on the Company’s results of operations, financial condition or cash flows.

On March 21, 2022, the SEC proposed rules that would require public companies to disclose extensive climate-related information in certain SEC filings. Specifically, the proposed rules would add new Subpart 1500 to Regulation S-K and new Article 14 to Regulation S-X to require disclosure of climate-related risks that are reasonably likely to have a material impact on a public company’s business, results of operations, or financial condition; GHG emissions associated with a public company that includes, in many cases, an attestation report by a GHG emissions attestation provider; and climate-related financial metrics to be included in a company’s audited financial statements. The Company is currently assessing the potential impact of the proposed rules. The proposal is open for public comment through at least May 21, 2022.

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 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, capital and operating lease payments, postretirement plans, take-or-pay obligations, post-mining reclamation obligations, collateral and margining requirements, and selling and administrative expenses. The Company has also used cash for dividends, share repurchases and 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 restrictions set forth under the Company’s debt and surety agreements, its 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. The Company has presently suspended the payment of dividends and share repurchases, as discussed in Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds.”

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Liquidity

As of March 31, 2022, the Company’s cash balances totaled $823.3 million, including approximately $331 million held by U.S. subsidiaries, $473 million held by Australian subsidiaries, and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. The Australian subsidiaries that conduct the operations of the Wilpinjong Mine held cash of approximately $213 million at March 31, 2022. 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. From time to time, the Company may repatriate excess cash from its foreign subsidiaries to the U.S. During the first quarter of 2022, the Company repatriated approximately $200 million. If additional 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 declined from $995.9 million as of December 31, 2021 to $841.5 million as of March 31, 2022. Available liquidity was comprised of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Cash and cash equivalents	$	823.3	$	954.3
Credit facility availability	16.6		15.3
Accounts receivable securitization program availability	1.6		26.3
Total liquidity	$	841.5	$	995.9

Subsequent to March 31, 2022, the Company executed an amendment to its credit facility to reduce its capacity by approximately $17 million and to make allowable certain previously restricted payments for joint venture investments. The amendment creates an investment basket which allows payments of $30.0 million per year specifically limited to investment in renewable energy-related projects. Unused portions of the basket carryover from year-to-year, and the total amount of investment will further reduce the credit facility capacity by a like amount, or a minimum of $10.0 million per year, through the maturity of the credit facility. The Company has no contractual commitment for such joint venture investment.

Margin Requirements

From time to time, the Company enters into hedging arrangements, including economic hedging arrangements, to manage various risks, including coal price volatility. Most hedging arrangements require the Company to post margin with its clearing broker based on the value of the related instruments and other credit factors. If the fair value of its exchange-cleared hedge portfolio moves significantly, the Company could be required to post additional margin, which could negatively impact its liquidity.

At March 4, 2022, the Company held coal derivative contracts in aggregate of 2.3 million metric tons. The majority of these contracts were entered into in the first half of 2021 and related to 1.9 million metric tons of production at the Wambo Underground Mine in the Company’s Seaborne Thermal Mining segment, which were expected to be mined and settled at a rate of 1.2 million metric tons in 2022 and 0.7 million metric tons in 2023. These hedge contracts were put in place to support the profitability of the mine, securing anticipated average prices of $84 per metric ton through mid-2023. The remaining hedges relate to brokered coal transactions and other blending and optimization activities, which will settle throughout 2022.

High demand and tight supply for coal globally has resulted in a substantial rise in seaborne thermal coal prices, which has been amplified by the Russian-Ukrainian conflict resulting in unprecedented upward volatility in Newcastle coal pricing since late February. The Newcastle financial price for March closed at $419.50 per metric ton on March 4, 2022, which was 148% above the closing index price of $169.17 per metric ton on December 31, 2021. As a result, the Company’s total initial and variation margin requirements reached approximately $750 million during March 2022, and were $481.7 million at March 31, 2022. Margin is returned to the Company upon reductions in the underlying market coal price or, absent such reductions, cash is recovered as the Company delivers coal into the market at spot prices.

Of the Company's total expected 2022 export sales from its Seaborne Thermal Mining segment, approximately 6% is hedged and approximately 53% is unpriced. The unpriced volume will benefit if the current pricing environment persists.

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On March 7, 2022, the Company entered into a credit agreement, by and among the Company, as borrower, Goldman Sachs Lending Partners LLC, as administrative agent, and the lenders party thereto (the Credit Agreement). The Credit Agreement provides for a $150 million unsecured revolving credit facility (the Revolving Facility), which will mature on April 1, 2025 and bears interest at a rate of 10.0% per annum on drawn amounts. The Revolving Facility is intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the Company’s coal derivative contracts.

Concurrently with the Credit Agreement, the Company entered into an agreement with Goldman Sachs & Company LLC to act as sales agent for at-the-market equity offerings of up to $225.0 million of the Company’s common stock.

During the three months ended March 31, 2022, the Company borrowed and repaid $225.0 million under the Revolving Facility using net proceeds of $222.0 million from at-the-market issuances of 10.1 million shares of common stock and available cash. The equity offering agreement limit was reached as a result of these issuances and may not be further utilized without amendment and approval by the sales agent. The Company had no outstanding borrowings and no availability under the Revolving Facility at March 31, 2022.

To reduce exposure to additional margin requirements, subsequent to March 31, 2022, the Company converted 0.8 million metric tons of financial hedges into fixed price physical sales over the next 12 months. With these transactions, 1.4 million metric tons remain outstanding with 0.9 million metric tons projected to settle over the remainder of 2022. On April 29, 2022, the Company had $535.9 million of margin posted. For additional information regarding the Company’s coal derivative contracts and related margin requirements, refer to Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk” of this Quarterly Report.

Indebtedness

The Company’s total funded indebtedness (Indebtedness) as of March 31, 2022 and December 31, 2021 is presented in the table below.

Debt Instrument (defined below, as applicable)	March 31, 2022		December 31, 2021
	(Dollars in millions)
6.000% Senior Secured Notes due March 2022 (2022 Notes)	$	—	$	23.1
8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)	—		62.6
10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)	193.6		193.9
Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)	188.8		206.0
6.375% Senior Secured Notes due March 2025 (2025 Notes)	77.5		334.9
Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)	321.8		322.8
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	320.0		—
Finance lease obligations	27.6		29.3
Less: Debt issuance costs	(31.2)		(34.8)
	1,098.1		1,137.8
Less: Current portion of long-term debt	19.1		59.6
Long-term debt	$	1,079.0	$	1,078.2

The Company’s Indebtedness will require estimated principal and interest payments, assuming interest rates in effect at March 31, 2022, of approximately $60 million during the nine months ending December 31, 2022, and approximately $70 million in 2023, $455 million in 2024, $405 million in 2025, and $355 million thereafter.

Cash payments for interest related to the Company’s Indebtedness and financial assurance instruments amounted to $37.2 million and $56.3 million during the three months ended March 31, 2022 and 2021, respectively.

2021 Financing Activity

During the first quarter of 2021, the Company completed a series of transactions to, among other things, provide the Company with maturity extensions and covenant relief, while allowing it to maintain near-term operating liquidity and financial flexibility. These transactions included a senior notes exchange and related consent solicitation, a revolving credit facility exchange, various amendments to the Company’s existing debt agreements, and completion of a related surety transaction support agreement with the Company’s surety bond providers.

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Subsequent to these transactions in the first quarter of 2021, the Company completed additional financing transactions during 2021 intended to improve its capital structure. Such transactions included the implementation of an at-the-market equity offering program pursuant to which the Company sold approximately 24.8 million shares of common stock for net cash proceeds of $269.8 million, the retirement of $270.9 million principal amount of existing debt through various open market purchases at an aggregate cost of $232.4 million, and the issuance of an aggregate 10.0 million shares of common stock in exchange for an additional $106.1 million principal amount of existing debt through multiple bilateral transactions with debt holders.

In the event of allowable open market purchases of its debt, the terms of the 2024 Peabody Notes and the letter of credit facility entered into by the Company in connection with the 2021 financing activity (Company LC Agreement) require the Company to make a mandatory repurchase offer to those debt and lien holders. In general, the repurchase offers equate to 25% of the principal amount of priority lien debt repurchased in the preceding quarter at a price equal to the weighted average repurchase price paid over that quarter. The open market debt repurchases completed during the three months ended December 31, 2021 necessitated a mandatory repurchase offer of up to $38.6 million of 2024 Peabody Notes, at 94.940% of their aggregate accreted value, plus accrued and unpaid interest, and a concurrent repurchase offer of priority lien obligations under the Company LC Agreement. The offer resulted in the valid tender and purchase of $0.1 million aggregate accreted value of 2024 Peabody Notes and $30.0 million aggregate principal and commitment amounts under the Company LC Agreement during the three months ended March 31, 2022. The Company’s purchase of the principal and commitment amounts under the Company LC Agreement was effected by the posting of $28.5 million of collateral with the administrative agent and did not reduce the availability under the facility. During the three months ended March 31, 2022, the Company made no other open market purchases of its debt.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are also subject to mandatory prepayment offers at the end of each six-month period, beginning with June 30, 2021, whereby the Excess Cash Flow (as defined in the 2024 Co-Issuer Notes indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of such notes and loans on a pro rata basis, provided that the liquidity attributable to the Wilpinjong Mine would not fall below $60.0 million. Such prepayments may be accepted or declined at the option of the debt holders. Based upon the Wilpinjong Mine’s results for the six-month period ended December 31, 2021, a required offer to prepay $105.6 million of total principal resulted in the prepayment of $17.2 million of Co-Issuer Term Loans principal, $0.3 million of 2024 Co-Issuer Notes principal, and a related loss on early debt extinguishment of $0.5 million during the three months ended March 31, 2022.

The 2021 financing activity and related agreements are more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on February 18, 2022.

Retirement of 2022 Notes

On March 31, 2022, the Company retired the remaining principal balance of 2022 Notes upon maturity for $23.1 million.

3.250% Convertible Senior Notes due 2028

On March 1, 2022, through a private offering, the Company issued $320.0 million in aggregate principal amount of 3.250% Convertible Senior Notes due 2028 (the 2028 Convertible Notes). 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 to redeem the remaining $62.6 million of its outstanding 2024 Peabody Notes and, together with available cash, approximately $257.4 million of its outstanding 2025 Notes, and to pay related premiums, fees and expenses relating to the offering of the 2028 Convertible Notes and the redemptions. The redemption of existing notes was deemed a debt extinguishment for accounting purposes. The Company capitalized $11.2 million of debt issuance costs related to the offering and recognized a loss on early debt extinguishment of $23.0 million during the three months ended March 31, 2022.

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 will bear interest from March 1, 2022 at a rate of 3.250% per year payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022. During the three months ended March 31, 2022, the Company incurred interest expense of $1.0 million related to the 2028 Convertible Notes.

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The 2028 Convertible Notes will be convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on 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 will be 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of approximately $19.85 per share of the Company’s common stock. The initial conversion price represents a premium of approximately 32.5% to the $14.98 per share closing price of the Company’s common stock on February 24, 2022. The conversion rate is subject to 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.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt agreements at March 31, 2022, including the minimum aggregate liquidity requirement under the Company LC Agreement which requires the Company’s restricted subsidiaries to maintain minimum aggregate liquidity of $125.0 million at the end of each quarter through December 31, 2024. The Company’s restricted subsidiaries’ relevant liquidity amounted to $610.0 million at March 31, 2022.

Accounts Receivable Securitization Program

As described in Note 15. “Financial Instruments and Other Guarantees” of the accompanying unaudited condensed consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017. The securitization program was amended in January 2022 to extend its maturity to January 2025 and reduce the available funding capacity from $250.0 million to $175.0 million, which better aligns with the current average borrowing base. 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. At March 31, 2022, the Company had no outstanding borrowings and $161.8 million of letters of credit issued under the program, which were primarily in support of portions of the Company’s reclamation obligations. The Company was required to post $24.7 million of cash collateral under the Securitization Program at March 31, 2022.

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Cash Flows and Free Cash Flow

The following table summarizes the Company’s cash flows for the three months ended March 31, 2022 and 2021, as reported in the accompanying unaudited condensed consolidated financial statements. Free Cash Flow is a financial measure not recognized in accordance with U.S. GAAP. Refer to the “Reconciliation of Non-GAAP Financial Measures” section above for definitions and reconciliations to the most comparable measures under U.S. GAAP.

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Net cash (used in) provided by operating activities	$	(273.7)	$	71.0
Net cash provided by (used in) investing activities	35.2		(93.2)
Net cash provided by (used in) financing activities	132.2		(63.3)
Net change in cash, cash equivalents and restricted cash	(106.3)		(85.5)
Cash, cash equivalents and restricted cash at beginning of period	954.3		709.2
Cash, cash equivalents and restricted cash at end of period	$	848.0	$	623.7
Net cash (used in) provided by operating activities	$	(273.7)	$	71.0
Net cash provided by (used in) investing activities	35.2		(93.2)
Free Cash Flow	$	(238.5)	$	(22.2)

Operating Activities. The increase in net cash used in operating activities for the three months ended March 31, 2022 compared to the same period in the prior year was driven by a year-over-year increase in cash utilized to satisfy the margin requirements associated with derivative financial instruments ($351.6 million).

Investing Activities. The increase in net cash provided by investing activities for the three months ended March 31, 2022 compared to the same period in the prior year was driven by higher distributions from related parties and joint ventures, on a net basis ($55.2 million), higher cash receipts from the Company’s equity method investments ($44.9 million), and lower capital expenditures and payments of capital accruals ($25.0 million).

Financing Activities. The increase in net cash provided by financing activities for the three months ended March 31, 2022 compared to the same period in the prior year was driven by cash proceeds from long-term debt and common stock issuances ($545.0 million and $222.0 million, respectively), partially offset by higher repayments of debt principal ($559.7 million) and higher distributions to non-controlling interests ($13.7 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 condensed consolidated balance sheets. At March 31, 2022, such instruments included $1,484.9 million of surety bonds and $469.1 million of letters of credit. Such financial instruments provide support for its 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 its condensed consolidated balance sheets.

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As of March 31, 2022, the Company was party to financial instruments with off-balance-sheet risk in support of the following obligations:

	Reclamation		Health and welfare (1)		Contract performance (2)		Leased property and equipment		Other (3)		Total
	(Dollars in millions)
Surety bonds and bank guarantees	$	1,312.1	$	42.1	$	81.6	$	30.9	$	18.2	$	1,484.9
Letters of credit outstanding under letter of credit facility	206.0		89.2		7.1		5.0		—		307.3
Letters of credit outstanding under accounts receivable securitization program	134.0		17.7		10.1		—		—		161.8
	1,652.1		149.0		98.8		35.9		18.2		1,954.0
Less: Letters of credit in support of surety bonds (4)	(332.6)		(30.2)		(2.4)		(1.2)		—		(366.4)
Less: Cash collateral in support of surety bonds (4)	(15.0)		—		—		—		—		(15.0)
Obligations supported, net	$	1,304.5	$	118.8	$	96.4	$	34.7	$	18.2	$	1,572.6

(1)    Obligations include pension and health care plans, workers’ compensation, and property and casualty insurance

(2)    Obligations pertain to customer and vendor contracts

(3)    Obligations primarily pertain to the disturbance or alteration of public roadways in connection with the Company’s mining activities that is subject to future restoration

(4)    Serve as collateral for certain surety bonds at the request of surety bond providers. The Company has also posted $9.1 million in incremental collateral directly with the beneficiary that is not supported by a surety bond.

Financial assurances associated with new reclamation bonding requirements, surety bonds or other obligations may require additional collateral in the form of cash or letters of credit causing a decline in the Company’s liquidity.

As described in Note 15. “Financial Instruments and Other Guarantees” in the accompanying unaudited condensed consolidated financial statements, the Company is required to provide various forms of financial assurance in support of its mining reclamation obligations in the jurisdictions in which it operates. Such requirements are typically established by statute or under mining permits. Historically, such assurances have taken the form of third-party instruments such as surety bonds, bank guarantees and letters of credit, as well as self-bonding arrangements in the U.S. Self-bonding in the U.S. has become increasingly restricted in recent years, leading to the Company’s increased usage of surety bonds and similar third-party instruments. This change in practice has had an unfavorable impact on its liquidity due to increased collateral requirements and surety and related fees.

At March 31, 2022, the Company had total asset retirement obligations of $724.5 million which were backed by a combination of surety bonds, bank guarantees and letters of credit.

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.

Guarantees and Other Financial Instruments with Off-Balance-Sheet Risk. See Note 15. “Financial Instruments and Other Guarantees” in the Company’s unaudited condensed consolidated financial statements for a discussion of its 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 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.

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At March 31, 2022, the Company identified certain assets with an aggregate carrying value of approximately $0.5 billion in its Other U.S. Thermal Mining and Corporate and Other segments whose recoverability is most sensitive to customer demand, customer concentration risk and future economic viability. The Company conducted a review of those assets as of March 31, 2022 and determined that no impairment charges were necessary as of that date.

The Company’s critical accounting policies and estimates are discussed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its Annual Report on Form 10-K for the year ended December 31, 2021. The Company’s critical accounting policies remain unchanged at March 31, 2022, and there have been no material changes in the Company’s critical accounting estimates.

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

See Note 2. “Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented” to the Company’s unaudited condensed consolidated financial statements for a discussion of newly adopted accounting standards and accounting standards not yet implemented.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Coal Pricing Risk

As of March 31, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 1.6 million tonnes. Such financial contracts may include futures, forwards and options. Included in this total are 1.3 million tonnes related to financial derivatives entered to support the profitability of the Wambo Underground Mine as part of a strategy to extend the mine life through mid-2023. Of this total, 0.6 million tonnes will settle during the nine months ending December 31, 2022 and 0.7 million tonnes will settle during 2023 at expected average pricing of approximately $84 per tonne (Newcastle index). The Newcastle thermal coal index was $271.06 per tonne on March 31, 2022, and the Company had posted $332.0 million of variation margin for the related derivative contracts at such date. A change in the Newcastle forward curve of $100 per tonne would increase or decrease the Company’s variation margin requirement by approximately $134 million and result in comparable unrealized gains or losses.

To reduce exposure to additional margin requirements, the Company converted 0.8 million metric tons of financial hedges into fixed price physical sales over the next 12 months. With these transactions, 1.4 million metric tons remain outstanding with 0.9 million metric tons projected to settle over the remainder of 2022.

Foreign Currency Risk

The Company has historically utilized currency forwards and options to hedge currency risk associated with anticipated Australian dollar expenditures. The accounting for these derivatives is discussed in Note 7. “Derivatives and Fair Value Measurements” to the accompanying unaudited condensed consolidated financial statements. As of March 31, 2022, the Company had currency options outstanding with an aggregate notional amount of $705.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending December 31, 2022. Assuming the Company had no foreign currency hedging instruments in place, its exposure in operating costs and expenses due to a $0.10 change in the Australian dollar/U.S. dollar exchange rate is approximately $160 million for the next twelve months. Based upon the Australian dollar/U.S. dollar exchange rate at March 31, 2022, the currency option contracts outstanding at that date would limit the Company’s net exposure to a $0.10 unfavorable change in the exchange rate to approximately $105 million for the next twelve months.

Diesel Fuel Price Risk

Previously, the Company managed price risk of the diesel fuel used in its mining activities through the use of derivatives, primarily swaps. As of March 31, 2022, the Company did not have any diesel fuel derivative instruments in place. The Company also manages the price risk of diesel fuel through the use of cost pass-through contacts with certain customers.

The Company expects to consume 95 to 105 million gallons of diesel fuel during the next twelve months. A $10 per barrel change in the price of crude oil (the primary component of a refined diesel fuel product) would increase or decrease its annual diesel fuel costs by approximately $24 million based on its expected usage.

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Item 4. Controls and Procedures.

The Company’s disclosure controls and procedures are designed to, among other things, provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is accumulated and communicated to senior management, including its principal executive and financial officers, on a timely basis. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of March 31, 2022, and concluded that such controls and procedures were effective to provide reasonable assurance that the desired control objectives were achieved. Additionally, there have been no changes to the Company’s internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is subject to various legal and regulatory proceedings. For a description of its significant legal proceedings refer to Note 4. “Discontinued Operations” and Note 16. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” of this Quarterly Report, which information is incorporated by reference herein.

Item 1A. Risk Factors.

The Company operates in a rapidly changing environment that involves a number of risks. For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors disclosed in Part I, Item 1A. “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022. In addition to the other information set forth in this Quarterly Report, including the information presented in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” you should carefully consider the risk factors disclosed in the aforementioned filing, which could materially affect the Company’s results of operations, financial condition and liquidity.

Factors that could affect the Company’s results or an investment in the Company’s securities include, but are not limited to:

•the Company’s profitability depends upon the prices it receives for its coal;

•if a substantial number of the Company’s long-term coal supply agreements, including those with its largest customers, terminate, or if the pricing, volumes or other elements of those agreements materially adjust, its revenue and operating profits could suffer if the Company is unable to find alternate buyers willing to purchase its coal on comparable terms to those in its contracts;

•risks inherent to mining could increase the cost of operating the Company’s business, and events and conditions that could occur during the course of its mining operations could have a material adverse impact on the Company;

•the Company’s take-or-pay arrangements could unfavorably affect its profitability;

•the Company may not recover its investments in its mining, exploration and other assets, which may require the Company to recognize impairment charges related to those assets;

•the Company could be negatively affected if it fails to maintain satisfactory labor relations;

•the Company could be adversely affected if it fails to appropriately provide financial assurances for its obligations;

•the Company’s mining operations are extensively regulated, which imposes significant costs on it, and future regulations and developments could increase those costs or limit its ability to produce coal;

•the Company’s operations may impact the environment or cause exposure to hazardous substances, and its properties may have environmental contamination, which could result in material liabilities to the Company;

•the Company may be unable to obtain, renew or maintain permits necessary for its operations, or the Company may be unable to obtain, renew or maintain such permits without conditions on the manner in which it runs its operations, which would reduce its production, cash flows and profitability;

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•concerns about the impacts of coal combustion on global climate are increasingly leading to conditions that have affected and could continue to affect demand for the Company’s products or its securities and its ability to produce, including increased governmental regulation of coal combustion and unfavorable investment decisions by electricity generators;

•numerous activist groups are devoting substantial resources to anti-coal activities to minimize or eliminate the use of coal as a source of electricity generation, domestically and internationally, thereby further reducing the demand and pricing for coal, and potentially materially and adversely impacting the Company’s future financial results, liquidity and growth prospects;

•the Company’s trading and hedging activities do not cover certain risks and may expose it to earnings volatility and other risks;

•if the assumptions underlying the Company’s asset retirement obligations for reclamation and mine closures are materially inaccurate, its costs could be significantly greater than anticipated;

•the Company’s future success depends upon its ability to continue acquiring and developing coal reserves and resources that are economically recoverable;

•the Company faces numerous uncertainties in estimating its coal reserves and resources and inaccuracies in its estimates could result in lower than expected revenue, higher than expected costs and decreased profitability;

•joint ventures, partnerships or non-managed operations may not be successful and may not comply with the Company’s operating standards;

•the Company’s business, results of operations, financial condition and prospects could be materially and adversely affected by pandemic or other widespread illnesses and the related effects on public health;

•the Company’s expenditures for postretirement benefit obligations could be materially higher than it has predicted if its underlying assumptions prove to be incorrect;

•the Company is subject to various general operating risks which may be fully or partially outside of its control;

•the Company’s financial performance could be adversely affected by its Indebtedness;

•despite the Company’s Indebtedness, it may still be able to incur more debt, which could further increase the risks associated with its Indebtedness;

•the terms of the indentures governing the Company’s senior secured notes and the agreements and instruments governing its other Indebtedness and surety bonding obligations impose restrictions that may limit its operating and financial flexibility;

•the number and quantity of viable financing and insurance alternatives available to the Company may be significantly impacted by unfavorable lending and investment policies by financial institutions and insurance companies associated with concerns about environmental impacts of coal combustion, and negative views around its efforts with respect to environmental and social matters and related governance considerations could harm the perception of the Company by a significant number of investors or result in the exclusion of its securities from consideration by those investors;

•the price of Peabody’s securities may be volatile and could fall below the minimum allowed by New York Stock Exchange listing requirements;

•Peabody’s common stock is subject to dilution and may be subject to further dilution in the future;

•there may be circumstances in which the interests of a significant stockholder could be in conflict with other stakeholders’ interests;

•the future payment of dividends on Peabody’s stock or future repurchases of its stock is dependent on a number of factors and cannot be assured;

•the Company may not be able to fully utilize its deferred tax assets;

•acquisitions and divestitures are a potentially important part of the Company’s long-term strategy, subject to its investment criteria, and involve a number of risks, any of which could cause the Company not to realize the anticipated benefits;

•Peabody’s certificate of incorporation and by-laws include provisions that may discourage a takeover attempt;

•diversity in interpretation and application of accounting literature in the mining industry may impact the Company’s reported financial results; and

•other risks and factors detailed in this report, including, but not limited to, those discussed in “Legal Proceedings,” set forth in Part II, Item 1 of this Quarterly Report on Form 10-Q.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Dividends

The Company suspended dividends in 2020. During the fourth quarter of 2020, the Company entered into a transaction support agreement with its surety bond providers which prohibits the payment of dividends through the earlier of December 31, 2025, or the maturity of the Credit Agreement (currently March 31, 2025) unless otherwise agreed to by the parties to the agreement. Additionally, restrictive covenants in its credit facility and in the indentures governing its senior secured notes also limit the Company’s ability to pay cash dividends.

Share Relinquishments

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 value of common stock tendered by employees is determined based on the closing price of the Company’s common stock on the dates of the respective relinquishments.

Share Repurchase Program

On August 1, 2017, the Company announced that its Board of Directors authorized a share repurchase program to allow repurchases of up to $500 million of the then outstanding shares of its common stock and/or preferred stock (Repurchase Program), which was eventually expanded to $1.5 billion during 2018. The Repurchase Program does not have an expiration date and may be discontinued at any time. Through March 31, 2022, the Company has repurchased 41.5 million shares of its common stock for $1,340.3 million, which included commissions paid of $0.8 million, leaving $160.5 million available for share repurchase under the Repurchase Program.

The Company suspended share repurchases in 2019, and similar to the payment of dividends as described above, the same agreement with its surety bond providers prohibits share repurchases through the earlier of December 31, 2025, or the maturity of the Credit Agreement (currently March 31, 2025) unless otherwise agreed to by the parties to the agreement. Additionally, restrictive covenants in its credit facility and in the indentures governing its senior secured notes also limit the Company’s ability to repurchase shares. Prior to the suspension, repurchases were made at the Company’s discretion. The specific timing, price and size of purchases depended upon the share price, general market and economic conditions and other considerations, including compliance with various debt agreements in effect at the time the repurchases were made.

Issuances of Equity Securities

In June 2021, the Company announced an at-the-market equity offering program pursuant to which the Company could offer and sell up to 12.5 million shares of its common stock. The at-the-market equity offering program was further expanded to 32.5 million shares during 2021. The shares are offered and sold pursuant to the Company’s Registration Statement on Form S-3, which was declared effective by the Securities and Exchange Commission on April 23, 2021, as supplemented by prospectus supplements dated June 4, 2021, September 17, 2021, and December 17, 2021 relating to the offer and sale of the shares. Through March 31, 2022, the Company has sold approximately 24.8 million shares for net cash proceeds of $269.8 million. No sales were made under this at-the-market equity offering program during the three months ended March 31, 2022, leaving approximately 7.7 millions shares available for sale.

On March 7, 2022, the Company entered into an at-the-market equity offering program pursuant to which the Company could offer and sell shares of its common stock having an aggregate gross sales price of up of $225 million. The shares are offered and sold pursuant to the Company’s Registration Statement on Form S-3, which was declared effective by the Securities and Exchange Commission on April 23, 2021, as supplemented by a prospectus supplement dated March 7, 2022 relating to the offer and sale of the shares. During the three months ended March 31, 2022, the Company sold approximately 10.1 million shares for net proceeds of $222.0 million, thereby concluding this at-the-market equity offering program.

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Through March 31, 2022, the Company completed multiple bilateral transactions with holders of the 2022 Notes, the 2025 Notes and the 2024 Peabody Notes in which the Company issued an aggregate 10.0 million shares of its common stock in exchange for $37.3 million aggregate principal amount of the 2022 Notes, $47.2 million aggregate principal amount of the 2025 Notes and $21.6 million aggregate principal amount of the 2024 Peabody Notes. No bilateral transactions were completed during the three months ended March 31, 2022. The issuance of shares of common stock in exchange for the 2022 Notes, the 2025 Notes and the 2024 Peabody Notes was made in reliance on the exemption from registration provided in Section 3(a)(9) under the Securities Act of 1933, based in part on representations of holders of the 2022 Notes, the 2025 Notes and the 2024 Peabody Notes, and on the basis that the exchange was completed with existing holders of the Company's securities and no commission or other remuneration was paid or given for soliciting the exchange.

Purchases of Equity Securities

The following table summarizes all share purchases for the three months ended March 31, 2022:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Dollar Value that May Yet Be Used to Repurchase Shares Under the Publicly Announced Program (In millions)
January 1 through January 31, 2022	153,389	$	10.44	—	$	160.5
February 1 through February 28, 2022	20,521	17.43		—	160.5
March 1 through March 31, 2022	—	—		—	160.5
Total	173,910	11.27		—

(1)Shares withheld to cover the withholding taxes upon the vesting of equity awards, which are not part of the Repurchase Program.

Item 4. Mine Safety Disclosures.

Peabody’s “Safety and Sustainability Management System” has been designed to set clear and consistent expectations for safety, health and environmental stewardship across the Company’s business. It aligns to the National Mining Association’s CORESafety® framework and encompasses three fundamental areas: leadership and organization, risk management and assurance. Peabody also partners with other companies and certain governmental agencies to pursue new technologies that have the potential to improve its safety performance and provide better safety protection for employees.

Peabody continually monitors its safety performance and regulatory compliance. The information concerning mine safety violations or other regulatory matters required by SEC regulations is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 6. Exhibits.

See Exhibit Index on following pages.

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EXHIBIT INDEX

The exhibits below are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Exhibit No.	Description of Exhibit
4.1	Indenture, dated as of March 1, 2022, between Peabody Energy Corporation and Wilmington Trust, National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 1, 2022).
4.2	Form of 3.250% Convertible Senior Notes due 2028 (included in Exhibit 4.1).
10.1	Eighth Amendment to the Sixth Amended and Restated Receivables Purchase Agreement, dated as of January 28, 2022, by and among P&L Receivables Company, LLC, Peabody Energy Corporation, all Committed Purchasers listed on the signature pages thereto, all Purchaser Agents listed on the signature pages thereto, all LC Participants listed on the signature pages thereto, PNC Bank, National Association, as Administrator and as LC Bank and PNC Capital Markets LLC, as Structuring Agent (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 31, 2022).
10.2	Agreement for Irrevocable Standby Letters of Credit, dated as of February 17, 2022, between Peabody and Goldman Sachs Bank USA (Incorporated by reference to Exhibit 10.89 to the Registrant’s Annual Report on Form 10-K filed on February 18, 2022).
10.3	Credit Agreement, dated March 7, 2022, by and among Peabody Energy Corporation, as borrower, Goldman Sachs Lending Partners LLC, as administrative agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 7, 2022).
10.4†++	Commitment Agreement, dated March 23, 2022, by and among Peabody Investments Corp., The Prudential Insurance Company of America and Fiduciary Counselors Inc.
31.1†	Certification of periodic financial report by the Registrant’s Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†	Certification of periodic financial report by the Registrant’s Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†	Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Registrant’s Chief Executive Officer.
32.2†	Certification of periodic financial report pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Registrant’s Chief Financial Officer.
95†	Mine Safety Disclosure required by Item 104 of Regulation S-K.
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101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).
†	Filed herewith.
++	Portions of this exhibit (indicated therein by asterisk) have been omitted for confidential treatment.

Pursuant to the Instructions to Exhibits, certain instruments defining the rights of holders of long-term debt securities of the Company and its consolidated subsidiaries are not filed because the total amount of securities authorized under any such instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. A copy of such instrument will be furnished to the Securities and Exchange Commission upon request.

54

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PEABODY ENERGY CORPORATION
Date:	May 5, 2022	By:	/s/ MARK A. SPURBECK
			Mark A. Spurbeck
			Executive Vice President and Chief Financial Officer (On behalf of the registrant and as Principal Financial Officer)

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EX-10.4

Exhibit 10.4

Confidential – Subject to NDA

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT THE IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED: [***]

Commitment Agreement

March 23, 2022 (the “Commitment Agreement Date”)

The Prudential Insurance Company of America (the “Insurer”), Peabody Investments Corp. (“Company”), and Fiduciary Counselors Inc., acting solely in its capacity as the independent fiduciary of the Plan (the “Independent Fiduciary”), hereby agree that the Insurer shall provide a nonparticipating single premium group annuity contract (the “Contract”) for the Peabody Investments Corp. Retirement Plan (“Plan”), supported by a commingled separate account and its general account, subject to the terms and conditions of this Commitment Agreement (this “Commitment Agreement”). The Plan Trustee shall be the initial Contract-Holder before a Buy-Out Conversion and, in the event of a Buy-Out Conversion the Company will be the successor Contract-Holder. The Company intends to amend the Plan to provide for a standard termination of the Plan, and in connection with the standard termination, offer certain plan participants and beneficiaries the opportunity to elect to receive Plan benefits in a single lump sum payment. The Contract contemplated by this Commitment Agreement, subsequent to the Buy-Out Conversion, is intended to cover all remaining Plan participants and beneficiaries in connection with an intended completion of a Plan termination. Capitalized terms not defined in paragraphs 1-13 of this Commitment Agreement are defined in paragraph 14 or in a Schedule to this Commitment Agreement.

1.    Closing. The delivery of the Closing Date Transfers (as defined in paragraph 3.a) to the Insurer (the “Closing”) will take place five (5) Business Days following the Commitment Agreement Date if on such date all of the conditions set forth in paragraph 11 have been satisfied or waived (the “Closing Date”). Subject to the Insurer’s receipt of the applicable Closing Date Transfers and any applicable GAC True-Up Premium (as defined in Schedule 8) due to the Insurer in accordance with this Commitment Agreement, the Insurer irrevocably agrees to issue the Contract, as described in paragraph 2, with an effective date that is the Closing Date.

2.    Contract Issuance.

a.    Approvals. After the Closing Date, the Insurer, the Company and the Independent Fiduciary shall each use commercially reasonable efforts to (i) revise the Specimen Contract Form to reflect the revisions that were mutually agreed to by the parties prior to the Commitment Agreement Date and negotiate any additional revisions to the Specimen Contract Form (as so revised, the “Modified Contract Form”) in accordance with paragraph 2.b and (ii) negotiate any revisions to the forms of annuity certificates. To the extent required by applicable law, the Insurer shall submit the Modified

Confidential – Subject to NDA

Contract Form for approval by the applicable state’s insurance commission no later than 20 Business Days after the Insurer, the Company and the Independent Fiduciary have agreed to the final terms of the Modified Contract Form. The Insurer shall submit the forms of annuity certificates for any required approvals by the applicable states’ insurance commissions by the later of (i) 45 Business Days after the Insurer, the Company and the Independent Fiduciary, each acting in good faith, have agreed upon the forms of annuity certificates (which need not include a customized annuity form description) and (ii) the Business Day (A) on which the Insurer shall have received the applicable state’s insurance commission’s approval of the Modified Contract Form or (B) if no such approval is required by applicable law, on which the Insurer, the Company and the Independent Fiduciary, each acting in good faith, have agreed upon the final terms of the Modified Contract Form; provided that, consistent with paragraph 5.c, no regulatory approval with respect to any annuity certificates referenced in this paragraph 2.a shall be required prior to the consummation of a Buy-Out Conversion. In the event that any approval, to the extent required by applicable law, is not granted, or if the Modified Contract Form is disapproved, the Insurer, the Independent Fiduciary and the Company will cooperate in good faith to mutually agree on modifications to the Modified Contract Form to address the requests of the applicable state’s insurance commission, if any, and, to the extent possible, preserve the provisions in the Modified Contract Form.

b.    Modified Contract Form. If, in accordance with paragraph 2.a, the negotiation of the Modified Contract Form and the receipt of any related regulatory approvals for all negotiated changes to the Specimen Contract Form are completed by the date that is at least 10 Business Days prior to the Scheduled GAC Issuance Date, then, subject to the Insurer’s receipt of the Closing Date Transfers and any GAC True-Up Premium due to the Insurer, the Insurer will, on the Scheduled GAC Issuance Date, issue the Contract using the Modified Contract Form in lieu of the Specimen Contract Form, subject to and in accordance with paragraphs 1 and 2. The Insurer and the Company will on the Scheduled GAC Issuance Date amend the Contract to incorporate the data and premium adjustments described in paragraph 3.i and Schedule 8 to reflect any agreed upon changes in the final annuity exhibit, which will be attached to and become part of the Contract. Notwithstanding the foregoing, to the extent that after good faith discussions the Insurer, Independent Fiduciary and the Company are unable to agree on the final terms of the Contract or if the Insurer, using reasonable best efforts, is unable to obtain approval from the applicable state insurance commission prior to the date that is 90 Business Days after the Scheduled GAC Issuance Date, then, subject to the Insurer’s receipt of the Closing Date Transfers on the Closing Date and any GAC True-Up Premium due to the Insurer on the Scheduled GAC Issuance Date, the Insurer will issue the Contract using the Specimen Contract Form (which, for the avoidance of doubt, will be amended to include the Modified Contract Form provisions, which were agreed upon between the parties as of the Commitment Agreement Date, or otherwise agreed after the Commitment Agreement Date, to the extent Insurer is authorized to include such provisions, or such provisions do not require approval, by

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Confidential – Subject to NDA

the applicable state insurance commission); provided that, if following the issuance of the Specimen GAC Form in accordance with this sentence, the Insurer and the Company agree on the final terms of the Contract and any applicable approval is obtained from the applicable state insurance commission, then subject to and in accordance with paragraphs 1 and 2, the Insurer will amend and restate the Contract so that its terms are replaced by the Modified Contract Form (or applicable provisions thereof).

c.    Annuity Exhibits and Payments under the Contract. The original annuity exhibits to the Contract will be consistent with the Payees in Tab “In Pay – Refreshed” and “Deferred – Refreshed” of the Base File. The Insurer may exclude any Payee from the annuity exhibit for whom the Insurer has not been provided or otherwise been able to identify each of the following: (1) name, (2) gender, (3) date of birth, (4) social security or federal taxpayer identification number, (5) form of annuity, and (6) monthly benefit amount (“Necessary Data”) Subject to the Insurer’s receipt of the Closing Date Transfers and any GAC True-Up Premium due to the Insurer in accordance with the last sentence of paragraph 1.a, this paragraph 2 and paragraph 3, the Insurer will make payments, (x) prior to the consummation of a Buy-Out Conversion, and subject to any surrender in accordance with the terms of the Contract, to the Contract-Holder, with such payments to be made in accordance with the Contract on and after the Initial Contract Benefit Payment Date and (y) after the consummation of a Buy-Out Conversion, if any, and after receipt of information reasonably required by the Insurer to enable it to make such annuity payments, directly to Payees.

d.    Data. As a condition to the Insurer issuing the Contract, the Company will deliver or cause to be delivered to the Insurer the data necessary for the Insurer to prepare the annuity exhibit to the Contract and the information necessary for the Insurer to draft provisions of the Contract, and to administer the payments thereunder. Regarding proof of age, Insurer reserves the right to request copies of birth certificates or baptismal certificates for selected individuals.

e.    Terms. The terms of the Contract and related forms of annuities shall be consistent with the Insurer’s final proposal dated March 23, 2022 (the “Proposal”), as updated to reflect (i) any modifications contemplated in the Insurer’s Final Annuity Quote Sheet dated March 23, 2022 (the “Final Annuity Quote Sheet”) and (ii) any modifications mutually agreed to among the parties after the Commitment Agreement Date and before the 35th Business Day prior to the Scheduled GAC Issuance Date, or such other date mutually agreed upon by the Company and the Insurer.

3.    Closing Premium.

a.    Premium Payment: Subject to the satisfaction or waiver of the conditions to Closing set forth in paragraph 11, the Independent Fiduciary will direct the Plan Trustee to pay Insurer [***] (the “Premium Amount”) on the Closing Date by:

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Confidential – Subject to NDA

i.    assigning, transferring, and delivering via separate transfers to the Insurer, by the Cut-Off Time, all rights, title and interests in and to each Eligible Asset, and

ii.    paying via separate wires to the Insurer an amount in Cash, equal to the excess, if any, of the Premium Amount over the Transferred Asset Valuation.

In addition, so long as the conditions to Closing set forth in paragraph 11 have been satisfied or waived, the Independent Fiduciary will direct the Plan Trustee to pay or cause to be paid to the Insurer the Interim Asset Cash Flows on the Closing Date (such payment, together with the payment of the Premium Amount, the “Closing Date Transfers”). If on or following the Closing Date, the Plan Trust, the Plan, or the Company receives any payments with respect to the Transferred Asset, then the Independent Fiduciary will irrevocably direct the Plan Trustee to promptly pay to the Insurer an amount in Cash equal to such payments; provided, however, that the Plan may retain any payment (or portion thereof) to the extent (i) the payment (or portion thereof) was not reflected in the Transferred Asset Market Value used to determine the Premium Amount and (ii) the payment was made with respect to an accrual period that occurred before the Commitment Agreement Date. In all cases, the Company, the Independent Fiduciary and Insurer will work in good faith to cause any misdirected payments (or the applicable portion thereof) to be made to the correct party.

b.    [***]. [***]

c.    [***]. [***]

d.    [***]. [***]

e.    [***]. [***]

f.    [***]. [***]

g.    [***]. [***]

h.    Available Assets. The Company will cause the Plan Trust to have sufficient Cash or other assets (whether by means of a Cash contribution or otherwise) to enable the Plan Trustee to pay all amounts that it is directed to pay to the Insurer by the Independent Fiduciary pursuant to this Commitment Agreement on the dates provided herein.

i.    Premium Adjustments. The Insurer and the Company will cooperate in good faith so that the Insurer can calculate the GAC True-Up Premium with respect to the Contract in accordance with Schedule 8, subject to the following terms:

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Confidential – Subject to NDA

i.    After the Commitment Agreement Date and prior to the Data Notice Date (as defined below), the Company and the Insurer will cooperate in good faith to identify any Data Changes (as defined in Schedule 8). To the extent that the Company discovers or has any Data Changes after the Commitment Agreement Date and prior to the date that is 35 Business Days prior to the Scheduled GAC Issuance Date (the “Data Notice Date”), the Company will provide written notice of such Data Changes as promptly as reasonably practicable to the Insurer. The Insurer will only be responsible for incorporating Data Changes into the calculation of the GAC True-Up Premium that the Insurer has identified or of which the Insurer has been notified by the Company on or prior to the Data Notice Date (the “GAC Issuance Data”). Such incorporation is subject to the Insurer’s and the Company’s agreement on such Data Changes and any limitations on incorporating such Data Changes into the GAC True-Up Premium set forth in Schedule 8.

ii.    The Insurer will deliver to the Company a proposed annuity exhibit utilizing and consistent with the applicable Base File and the GAC Issuance Data. Following such delivery, the Insurer and the Company will cooperate in good faith to resolve any questions or discrepancies and the Insurer will reflect in the annuity exhibit any changes agreed to by the Company and the Insurer. The Insurer may exclude any Payee from the annuity exhibit for whom the Insurer has not been provided or otherwise been able to identify any of the Necessary Data.

iii.    The Insurer will send the calculation of the GAC True-Up Premium to the Company and the Insurer and the Company will cooperate in good faith to resolve any questions or discrepancies prior to theScheduled GAC Issuance Date. If the Company and the Insurer cannot resolve any dispute with respect to the GAC True-Up Premium on or prior to the Scheduled GAC Issuance Date, then the Insurer’s determination will control for purposes of the GAC True-Up Premium, but the Company may immediately commence an arbitration dispute pursuant to Schedule 9 with respect to the GAC True-Up Premium.

iv.    The GAC True-Up Premium will be paid on the Scheduled GAC Issuance Date as follows: (A) if the GAC True-Up Premium is a positive number, then the Independent Fiduciary will direct the Plan Trustee to (or if the Plan is not in existence as of such date, the Company will) pay to the Insurer an amount, in Cash, equal to such GAC True-Up Premium, plus interest calculated in accordance with paragraph 3.d from the Closing Date through the date of payment, and the Insurer will deposit the Cash into the commingled separate account that supports the Contract and (B) if the GAC True-Up Premium is a negative number, then the Insurer will pay to the Plan Trust (or if the Plan is not in existence as of such date, to the Company) an amount, in Cash, equal to the absolute value of such GAC True-Up Premium plus interest calculated in

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Confidential – Subject to NDA

accordance with paragraph 3.d from the Closing Date through the date of payment.

v.    The Company acknowledges and agrees that (i) the Insurer’s pricing assumptions used to develop the Premium Amount and calculate the GAC True-Up Premium constitute confidential trade secrets of the Insurer and (ii) the Insurer shall not be required to provide such pricing assumptions to the Company, the Independent Fiduciary, any arbitrator pursuant to Schedule 9 or any other person or entity.

j.    Post-GAC Issuance True-Up. Schedule 8 provides a description of the methodologies and procedures by which the Insurer will calculate the Post-GAC Issuance True-Up Premium. The Insurer and the Company will cooperate in good faith so that the Insurer can calculate the Post-GAC Issuance True-Up Premium, subject to the following acknowledgements, limitations and conditions:

i.    [***]

ii.    [***]

iii.    [***]

iv.    [***]

k.    [***]

4.    Public Announcements and Other Communications.

a.    Press Releases. The Insurer and the Company (and if referenced in the release, the Independent Fiduciary) shall cooperate in good faith to agree on any press release by any party regarding the transactions contemplated by this Commitment Agreement; provided, however, that (except as provided in the following sentence) no party shall issue a press release or otherwise publicly disclose the transactions contemplated by this Commitment Agreement unless and until each other party, in its reasonable discretion, approves such disclosure in writing. Notwithstanding the foregoing, in the event that a party determines that disclosure is required by law, regulation, court order, or any listing or trading agreement, such party may make such disclosure without approval of the other parties, but shall, to the extent reasonably practicable and permitted by law, notify the other parties prior to making such disclosure, give the other parties an opportunity to comment on such disclosure and consider in good faith incorporating any such comments. Nothing in this paragraph 4.a will prevent the Insurer from (i) communicating with Payees following a Buy-Out Conversion of a Contract covering such Payee, including through communications posted to the Insurer’s website or (ii) discussing or disclosing the transactions contemplated by this

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Confidential – Subject to NDA

Commitment Agreement so long as such disclosure does not reference the Plan or the Company’s name, industry, workforce, or other information that could reasonably allow a third party to identify the Company and/or the Plan. The Insurer is permitted to provide the Company’s name and contact details to other potential clients in reference to the Insurer as a Contract provider.

b.    No Insurer Communications. From the Commitment Agreement Date until the consummation of a Buy-Out Conversion and the issuance of any annuity certificate by Insurer to a Payee pursuant to the Contract, other than as provided for in this Commitment Agreement, without the prior written consent of the Company, (i) Insurer will cause the employees of its retirement services business unit not to initiate any contact or communication with any participant or beneficiary of the Plan in connection with any transactions other than those transactions contemplated by this Commitment Agreement and (ii) Insurer will not, and will cause all of its affiliates not to, provide any of their respective insurance agents, wholesalers, retailers or other representatives with any contact information of such participants and beneficiaries of the Plan obtained from the Company or any of its representatives in connection with the transactions contemplated by this Commitment Agreement, except for those representatives of Insurer or any of their respective affiliates who need to know such information for purposes of the transactions contemplated by this Commitment Agreement and agree to comply with the requirements of this Commitment Agreement. However, this paragraph 4.b. will not restrict employees of Insurer’s retirement services business unit from contacting any participant or beneficiary of the Plan in connection with, or to facilitate, Insurer’s performance of its obligations under the Contract, the annuity certificates or this Commitment Agreement. Until the issuance of an annuity certificate by Insurer to a Payee, other than as provided for in this Commitment Agreement, if any participant or beneficiary of the Plan contacts an employee of Insurer’s retirement services business unit, Insurer and the Company will cooperate to coordinate on a response to such participant or beneficiary of the Plan.

c.    SEC Filings. If the Company concludes that disclosure of this Commitment Agreement and/or the Contract is required by the rules of the Securities and Exchange Commission (“SEC”), (i) the Company will use reasonable efforts to obtain confidential treatment of information relating to the pricing of the Contract and such other information as the Company and the Insurer mutually conclude is competitively sensitive from the perspective of the Company or otherwise merits confidential treatment and (ii) the Company will provide the Insurer with a copy of any material correspondence (written or oral) with the SEC regarding any such request for confidential treatment, and the Company and the Insurer will otherwise reasonably cooperate in connection with such request, including by the Company proposing to redact confidential portions of documents as to which the SEC staff seeks disclosure.

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Confidential – Subject to NDA

5.    Welcome Kit and Annuity Certificates.

a.    Cooperation. The Insurer, the Company and the Independent Fiduciary will cooperate in good faith to agree on communications to be provided to Certificate Payees (as defined in paragraph 5.c) pursuant to this paragraph 5, if a valid Buy-Out Conversion Notice is delivered to Insurer in accordance with the Contract, including the Welcome Kit, the forms of annuity certificates and the goodbye letter, subject to paragraphs 5.b and 5.c.

b.    Welcome Kit. If a valid Buy-Out Conversion Notice is delivered to Insurer in accordance with the Contract, then, subject to (i) Insurer’s receipt of final census data that is reasonably satisfactory to Insurer and (ii) the satisfaction of each of the conditions to the consummation of such Buy-Out Conversion as set forth in the Contract and (iii) paragraph 5.d, Insurer will mail a welcome kit to each person who will be a Certificate Payee under the Contract if living at the time of the certificate mailing pursuant to paragraph 5.c (the “Welcome Kit”) on or prior to the fifth (5th) Business Day prior to the first annuity payment to each such Certificate Payee following such Buy-Out Conversion in accordance with the terms of the Contract. Insurer will send copies of the Welcome Kit materials to the Company and the Independent Fiduciary as soon as practicable following consummation of a Buy-Out Conversion under the Contract, and Insurer will consider in good faith any comments made by the Company or the Independent Fiduciary on the “Frequently Asked Questions” section of the Welcome Kit on or before the fifth (5th) Business Day after they receive such document from Insurer.

c.    Annuity Certificates. The Insurer will use reasonable best efforts to obtain all regulatory approvals necessary for the issuance of any annuity certificate under the Contract; provided that no regulatory approvals shall be required prior to the commencement of a Buy-Out Conversion under the Contract. The Insurer will mail an annuity certificate to each Payee entitled to an annuity certificate under the terms of the Contract (each, a “Certificate Payee”) no later than the latest of: (1) twenty (20) Business Days following the consummation of a Buy-Out Conversion, (2) sixty (60) days after all required regulatory approvals of the annuity certificates have been obtained, (3) 120 Business Days following the date on which the Welcome Kit is mailed and (4)thirty (30) Business Days after the parties, each acting in good faith, have agreed upon the forms of annuity certificates (which need not include a customized annuity form description). The rights of a Certificate Payee are not conditioned on the issuance of his/her annuity certificate, and any delay in issuing a certificate will not have any effect on the date as of which such Certificate Payee has enforceable rights against the Insurer.

d.    Welcome Kit and Annuity Certificate Delay. If there are any delays in the delivery of the information necessary for Insurer to administer the payments under the Contract pursuant to paragraph 6.b or in the delivery of any information that needs to be

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included within any annuity certificate, Insurer may reasonably delay the mailing of Welcome Kits and annuity certificates.

6.    Administration and Transfer.

a.    Buy-In Period. Insurer will make a bulk payment to the Plan Trust equal to the Aggregate Monthly Payment (as defined in the Contract) with respect to each Payee pursuant to the terms of the Contract at such time (each payment, a “Payment” and collectively the “Payments”) for each month from the Initial Contract Benefit Payment Date to the month (if any) in which a Buy-Out Conversion of all Payees covered by the Contract is consummated (each such month, a “Payment Period”). For each PaymentPeriod, Insurer will make the applicable Payment on or prior to three Business Days prior to the first Business Day of the Payment Period.

b.    Administrative Transition and Cooperation. Following the consummation of a Buy-Out Conversion, the Company will (a) complete or cause to be completed all processes set forth in Schedule 7 and (b) provide or cause to be provided to the Insurer the information needed to administer the payments under the Contract. Following the delivery of a valid Buy-Out Conversion Notice under the Contract, the Company (or its applicable representative or agent acting on its behalf) and the Insurer will use commercially reasonable efforts to take or cause to be taken all actions necessary (including, but not limited to, the delivery of final census data in good order on or prior to March 30, 2022) to coordinate the takeover and operation by the Insurer of all administration responsibilities necessary to effectively provide recordkeeping and administration services, commencing in the first month following the date that is the sixtieth (60th) day following the later of (i) the date on which the Buy-Out Conversion is consummated in accordance with the Contract and (ii) receipt by Insurer of final census data in good order that is reasonably satisfactory to Insurer with respect to each applicable Payee. Following the delivery of a valid Buy-Out Conversion Notice under the Contract, the Company agrees to cooperate with Insurer in the takeover of such recordkeeping and administration services, including, but not limited to, providing, or ensuring that any third-party service provider acting at the direction, and on behalf, of the Company and/or the Plan, provides the Insurer with information or records relating to Plan benefits, the Payees and such Payees’ addresses, bank and income tax withholding elections in its possession. Prior to and following the consummation of a Buy-Out Conversion under the Contract, the Company will make subject matter experts available to promptly address any questions the Insurer may have regarding the benefit provisions, including but not limited to forms of annuity, eligibility conditions, administrative practices and calculation methodology. Following the consummation of a Buy-Out Conversion under the Contract, the Company acknowledges that, in connection with making payments to Payees under the Contract, the Insurer is relying on the income tax withholding election information with respect to the Payees that is provided to the Insurer by the Company, or by its

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applicable representative or agent acting at the direction, and on behalf, of the Company and/or the Plan.

c.    Insurer Call Center and Company Call Center. In the event of a Buy-Out Conversion under the Contract, the Insurer will maintain, at its cost and expense, a toll-free phone number and/or a website (the “Insurer Call Center”) which will be available from the fifth (5th) Business Day prior to the first monthly payment under the Contract directly to Payees following a Buy-Out Conversion, and will be available for Payees to contact the Insurer with questions related to the Contract and the annuity certificates related thereto.  The Company will maintain for a period of two years following the Buy-Out Conversion of the Contract (if any), at its cost and expense, a point of contact (the “Company Call Center”) to which the Insurer may refer Payees who pose questions related to their applicable Plan benefits. In the event that a Payee contacts the Company with questions related to the Contract or annuity certificates that have been subject to a Plan Conversion under the Contract, the Company may refer such Payees to the Insurance Call Center. In the event that a Payee contacts the Insurer with questions related to the Payee’s applicable Plan benefits, the Insurer may refer the Payee to the Company Call Center.

7.    Insurer Representations and Warranties. The Insurer hereby represents and warrants to the Company and the Independent Fiduciary as of the Commitment Agreement Date, as of the Closing Date, and, except as otherwise disclosed by Prudential in writing to the Company and the Independent Fiduciary on or prior to such date, as of the Buy-Out Conversion Notice Date, that:

a.    Due Organization, Good Standing and Corporate Power. The Insurer is a life insurance company, duly organized, validly existing and in good standing under the laws of the State of New Jersey. The Insurer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the Commitment Agreement and the Ancillary Agreements makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material. The Insurer has all requisite corporate power and legal authority to enter into and carry out its obligations under this Commitment Agreement and the Ancillary Agreements and to consummate the transactions contemplated to be undertaken by the Insurer in this Commitment Agreement and the Ancillary Agreements.

b.    Compliance with Laws. The business of insurance conducted by the Insurer has been and is being conducted in material compliance with applicable laws, and none of the licenses, permits or governmental approvals required for the continued conduct of the business of the Insurer as such business is currently being conducted will lapse, terminate, expire or otherwise be impaired as a result of the consummation of the transactions contemplated to be undertaken by the Insurer in this Commitment Agreement, except as, in either case, would not reasonably be expected to have,

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individually or in the aggregate, a material adverse effect on the ability of the Insurer to perform its obligations under this Commitment Agreement.

c.    Relationship to the Plan. The Insurer is not (1) a trustee of the Plan (other than a non-discretionary trustee who does not render investment advice with respect to any assets of the Plan), (2) a plan administrator (within the meaning of ERISA § 3(16)(A) and Code § 414(g)) with respect to the Plan or (3) an employer any of whose employees are covered by the Plan. Schedule 5 sets forth a true and complete list of (I) the Insurer and the Insurer’s affiliates that are investment managers within the meaning of ERISA § 3(38)(B) and (II) without duplication of clause (I), the Insurer and the Insurer’s affiliates that are registered as investment advisers under the Investment Advisers Act of 1940; provided, however, that solely with respect to the representation and warranty as to Schedule 5 to be made by the Insurer on and as of the Closing Date, the Insurer may update Schedule 5 through the Closing Date by providing a written update to the Company so that the information included therein is current on and as of the Closing Date. Plan Asset Manager is not an affiliate of the Insurer.

d.    No Post-Closing Liability. Following the receipt by the Insurer of the Closing Date Transfers with respect to the Contract, the Plan, the Company and the Independent Fiduciary and their respective affiliates and representatives will not have any liability to pay any annuity payment under the Contract; provided further that, prior to the consummation of a Buy-Out Conversion, Insurer will not have any liability to pay any annuity payment under the Contract directly to any individual listed on the annuity exhibits to the Contract.

e.    No Commissions. No fees or payments are or will be owed by the Insurer to any individual or entity in connection with the transactions contemplated in this Commitment Agreement and the Ancillary Agreements for which any other party, or its respective affiliates or representatives, could be liable.

f.    Authorization of Commitment Agreement and Enforceability. The Insurer has received all necessary corporate approvals and no other action on the part of the Insurer is necessary to authorize the execution, delivery and performance of this Commitment Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated to be undertaken by the Insurer in this Commitment Agreement and the Ancillary Agreements. This Commitment Agreement and the Ancillary Agreements have been, or in the case of the Contract will be, duly executed and delivered by the Insurer, and each is (or when executed will be) a valid and binding obligation of the Insurer and enforceable against the Insurer in accordance with its terms, subject to the applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (“Enforceability Exceptions”).

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g.    No Conflict. The execution, delivery, and performance of this Commitment Agreement and the Ancillary Agreements by the Insurer, and the consummation by the Insurer of the transactions contemplated to be undertaken by the Insurer in this Commitment Agreement, do not (1) violate or conflict with any provision of its certificate or articles of incorporation, bylaws, code of regulations, or comparable governing documents, (2) assuming that the applicable requisite filings and approvals of the state insurance governmental authorities in the states listed on Schedule 6 are duly made and/or obtained, violate or conflict with any law or order of any governmental authority applicable to the Insurer, (3) require any governmental authority approval other than any filing made or approval received as of the Commitment Agreement Date and the applicable requisite filings with and approvals of state insurance governmental authorities in the states listed on Schedule 6 or (4) require any consent of, or other action by any person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit under, any provision of any contract to which the Insurer is a party, except where the occurrence of any of the foregoing would not have a material adverse effect on the Insurer’s ability to consummate the transactions and perform its obligations contemplated by this Commitment Agreement. No filing or approval is required to issue the annuity certificates in accordance with the Contract, other than any filing made or approval received as of the Commitment Agreement Date and the applicable requisite filings with and approvals of state insurance governmental authorities in the states listed on Schedule 6.

h.    The Contract. The Contract, when executed, will be duly executed and delivered by the Insurer and will be a valid and binding irrevocable obligation of the Insurer and enforceable against the Insurer by the Contract-Holder, and following a Buy-Out Conversion, each applicable Payee in accordance with its terms, subject to the Enforceability Exceptions. At all times following a Buy-Out Conversion, the right to a benefit and all other provisions under the Contract, in accordance with the Contract’s terms, will be enforceable by the sole choice of the Payee to whom the benefit is owed under the Contract, subject to the Enforceability Exceptions. Even if the Company, as the contract-holder of the Contract, ceases to exist, notifies the Insurer that it will cease to perform its obligations under the Contract, or no longer has obligations under the Contract, the Contract will remain a valid and binding obligation of the Insurer, irrevocable and in full force and effect, and enforceable against Insurer by each Payee, subject to the Enforceability Exceptions; provided that, if such Contract has not yet been subject to a Buy-Out Conversion, in the event that the Contract-Holder ceases to exist, a Buy-Out Conversion will be initiated by Insurer.

i.    Accuracy of Information. To the Insurer’s Knowledge, (i) all material information provided by the Insurer to the Company or the Independent Fiduciary (other than any component incorporated into the calculation of the Premium Amount or the GAC True-Up Premium under paragraph 3.i and Schedule 8 not calculated, determined or

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provided by the Insurer, including the applicable Base File, and any information provided by the Insurer based on any such component) in connection with the transactions contemplated by this Commitment Agreement was, as of the date indicated on such information, true and correct in all material respects and (ii) no change has occurred since the date indicated on such information that either the Insurer or any of its affiliates has not publicly disclosed or disclosed to the recipient of such information that would cause such information, taken as a whole, to be materially false or misleading.

j.    Litigation. There is no action pending or, to the Insurer’s Knowledge, threatened against the Insurer that in any manner challenges or seeks to prevent, enjoin or materially alter or delay the transactions contemplated by this Commitment Agreement or that could reasonably be expected to materially impair or restrict the Insurer’s ability to consummate the transactions contemplated by this Commitment Agreement and perform its obligations hereunder.

k.    Insurer Financial Strength. The Insurer adheres to capital management principles and a related policy, which have been authorized by the board of directors of its parent company, that provides for the Insurer, together with its parent company, to hold sources of capital that are sufficient to maintain the Insurer’s RBC Ratio at a level consistent with the level necessary to maintain [***] financial strength ratings under normal market conditions and using current regulatory standards.

l.    [***]. [***]

8.    Company Representations and Warranties. The Company hereby represents and warrants to the Insurer and the Independent Fiduciary as of the Commitment Agreement Date, as of the Closing Date and, except as otherwise disclosed by the Company in writing to Prudential and the Independent Fiduciary on or prior to such date, as of the Buy-Out Conversion Notice Date, that:

a.    Due Organization, Good Standing and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the Commitment Agreement and the Ancillary Agreements to which it is a party makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material. The Company has all requisite corporate power and legal authority to enter into and carry out its obligations under this Commitment Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated to be undertaken by the Company in this Commitment Agreement and the Ancillary Agreements to which it is a party.

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b.    Accuracy of Information. Notwithstanding anything to the contrary in the Company NDA (as defined in paragraph 13.c), to the Company’s Knowledge (1) the applicable Base File and the related experience data file(s) provided by the Company to the Insurer and posted to OnePlace on July 12, 2021 in the file titled “Project Slope Med sent 2021.07.12” each did not contain any misstatements or omissions that were, in each case, whether individually or in the aggregate, material, and the mortality experience was generated using prudent actuarial judgment with regard to systematic assumptions and data inclusions or omissions and (2) the data in respect of benefit amounts, forms of annuities, and census data for date of birth, date of death, state of residence, or gender, plan indicator, lump-sum indicator, status (beneficiary in pay or participant), credited service and zip codes, in each case, with respect to the Payees that was furnished on behalf of the Company to the Insurer was not generated using any materially incorrect systematic assumptions and did not contain any material omissions.

c.    Compliance with ERISA. The Plan and the Plan Trust are maintained under and are subject to ERISA and, to the Company’s Knowledge, are in compliance with ERISA in all material respects. The Plan is qualified under § 401(a) of the Code and exempt from tax under § 501(a) of the Code. The Plan’s most recent favorable IRS determination letter is dated June 25, 2015and, to the Company’s Knowledge, no event has occurred that is reasonably likely to result in the Plan losing its status as qualified by the Code for preferential tax treatment under Code §§ 401(a) and 501(a). All amendments to the Plan necessary to effect the transactions contemplated by this Commitment Agreement and the Ancillary Agreements have been duly executed and, to the extent that they require authorization by the Company, have been or will be by the Closing Date, duly authorized and made by the Company.

d.    Plan Investments. Neither the Insurer nor any of the Insurer’s affiliates is a fiduciary of the Plan who either (A) has or exercises any discretionary authority or control with respect to the investment of Plan Assets of the Plan or (B) renders investment advice (within the meaning of ERISA § 3(21)(A)(ii) or Code § 4975(e)(3)(B)) with respect to Plan Assets. There are no commingled investment vehicles that hold assets of the Plan, the units of which are or will be Plan Assets. No Plan Assets are or will be managed by any investment manager listed on Schedule 5, and no investment advisor listed on Schedule 5 renders or will render investment advice (within the meaning of ERISA § 3(21)(A)(ii)) with respect to any Plan Assets. The Plan Assets will, immediately prior to the Commitment Agreement Date, be exclusively managed by Plan Asset Manager and investment advice (within the meaning of ERISA § 3(21)(A)(ii)) with respect to the Plan Assets is and will be exclusively rendered by Plan Asset Manager. Plan Asset Manager has not engaged and will not engage any sub-managers or advisors with respect to its management of the Plan Assets.

e.    Independent Fiduciary. The Independent Fiduciary has been duly appointed as independent fiduciary of the Plan of which the Company is the sponsor with respect to

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the purchase of one or more group annuity contracts to be the designated fiduciary responsible for (1) selecting one or more insurers to provide annuities in accordance and compliance with the ERISA Requirements, (2) determining whether the transactions contemplated by this Commitment Agreement and the Ancillary Agreements satisfy the ERISA Requirements, (3) representing the interests of the Plan and all its participants and beneficiaries in connection with the negotiation of a commitment agreement and, to the extent set forth in the engagement letter dated September 7, 2021 by and between the Independent Fiduciary and the fiduciary of the Plan with authority to hire the Independent Fiduciary (the “IF Engagement Letter”), the terms of any agreements with the Insurer, including the Contract and the annuity certificates under the Contract, (4) directing the Plan Trustee to transfer the Closing Date Transfers in connection with the consummation of the transactions contemplated by this Commitment Agreement and any other amounts required pursuant to paragraph 3 and (5) taking all other actions on behalf of the Plan necessary to effectuate the foregoing to the extent set forth in the IF Engagement Letter.

f.    Plan Trustee is Directed Trustee. The Plan Trustee has been duly appointed as the directed trustee of the Plan Trust with respect to the Plan of which the Company is the sponsor and the Plan Trustee is obligated to follow the Independent Fiduciary’s directions to effectuate and consummate the transactions contemplated by this Commitment Agreement and the IF Engagement Letter.

g.    No Commissions. No fees or payments are or will be owed by the Company to any individual or entity in connection with the transactions contemplated in this Commitment Agreement and the Ancillary Agreements for which the Insurer or its affiliates or representatives, could be liable.

h.    Authorization of Commitment Agreement and Enforceability. The Company has received all necessary corporate approvals and no other action on the part of the Company is necessary to authorize the execution, delivery and performance of this Commitment Agreement and the Ancillary Agreements to which it is a party, and the consummation of the transactions contemplated to be undertaken by the Company in this Commitment Agreement and the Ancillary Agreements to which it is a party. This Commitment Agreement and the Ancillary Agreements to which it is a party have been or will be duly executed and delivered by the Company, and is (or when executed will be) a valid and binding obligation of the Company and enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

i.    No Conflict. The execution, delivery and performance of this Commitment Agreement and the Ancillary Agreements to which it is a party by the Company, and the consummation by the Company of the transactions contemplated to be undertaken by the Company in this Commitment Agreement and the Ancillary Agreements to which it is a party do not (1) violate or conflict with any provision of the Plan and any documents and instruments governing the Plan as contemplated under ERISA

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§ 404(a)(1)(D) (the “Plan Governing Documents”), the certificate or articles of incorporation, bylaws, code of regulations, or the comparable governing documents of the Company, (2) violate or conflict with any law or order of any governmental authority applicable to the Company or the Plan Governing Documents, (3) require any approval of any governmental authority or (4) require any consent of, or other action by any person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit under, any provision of any contract to which the Company is a party, except where the occurrence of any of the foregoing would not have a material adverse effect on the Company’s ability to consummate the transactions and perform its obligations contemplated by this Commitment Agreement.

j.    Litigation. (i) There is no action pending or, to the Company’s Knowledge, no action threatened against the Company, or the Plan and (ii) there is no settlement agreement that has been entered into by the Company or the Plan, in each case that in any manner challenges or seeks to prevent, enjoin or materially alter or delay the transactions contemplated by this Commitment Agreement or that could reasonably be expected to materially impair or restrict such party’s ability to consummate the transactions contemplated by this Commitment Agreement and to perform its obligations hereunder.

9.    Independent Fiduciary Representations and Warranties. The Independent Fiduciary hereby represents and warrants to the Insurer and the Company as of the Commitment Agreement Date, as of the Closing Date, and, except as otherwise disclosed by the Independent Fiduciary in writing to the Company and Prudential on or prior to such date, as of the Buy-Out Conversion Notice Date, that:

a.    Due Organization, Good Standing, and Corporate Power. The Independent Fiduciary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Independent Fiduciary is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the Commitment Agreement and the Ancillary Agreements to which it is a party makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material. The Independent Fiduciary has all requisite corporate power and legal authority to enter into and carry out its obligations under this Commitment Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated to be undertaken by the Independent Fiduciary in this Commitment Agreement and the Ancillary Agreements to which it is a party.

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b.    Independent Fiduciary Compliance with ERISA.

i.    The Independent Fiduciary meets the requirements of, and in the transactions contemplated by this Commitment Agreement and the Ancillary Agreements is acting as, an “investment manager” under ERISA § 3(38). The Independent Fiduciary is qualified to serve as a “qualified professional asset manager” under Part VI of the U.S. Department of Labor Prohibited Transaction Class Exemption 84-14.

ii.    The Independent Fiduciary has accepted, and has not rescinded or terminated, its appointment as independent fiduciary of the Plan (as set forth in the IF Engagement Letter, a true and correct copy of which has been provided to the Insurer, except that the fees and expenses to be paid to the Independent Fiduciary and indemnification provisions have been redacted) with respect to the purchase of one or more group annuity contracts to be the designated fiduciary responsible for (1) selecting one or more insurers to provide annuities in accordance and compliance with the ERISA Requirements, (2) determining whether the transactions contemplated by this Commitment Agreement and the Ancillary Agreements satisfy the ERISA Requirements, (3) representing the interests of the Plan and its participants and beneficiaries in connection with the negotiation of a commitment agreement and, to the extent set forth in the IF Engagement Letter, the terms of any agreements with the Insurer, including the Contract and the annuity certificates under the Contract, (4) directing the Plan Trustee on behalf of the Plan to transfer the Closing Date Transfers in connection with the consummation of the transactions contemplated by this Commitment Agreement and any other amounts required pursuant to paragraph 3 and (5) taking all other actions on behalf of the Plan necessary to effectuate the foregoing to the extent set forth in the IF Engagement Letter including, to perform the covenants and agreements and make the representations and warranties set forth in this Commitment Agreement that are applicable to the Independent Fiduciary.

iii.    The Independent Fiduciary is fully qualified and has the requisite expertise together with its reliance on its consultant, River & Mercantile Group (“IF Advisor”), and its counsel, K&L Gates LLP, to serve as an independent fiduciary in connection with the transactions contemplated by this Commitment Agreement and the Ancillary Agreements, and it is independent of the Company and the Insurer. Independent Fiduciary, including its personnel and affiliates, does not provide any services to Insurer or any of its affiliates, and has received confirmation from IF Advisor that IF Advisor, including IF Advisor’s personnel and affiliates, does not provide any services to Insurer or any of its affiliates.

c.    ERISA Determinations.

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i.    The Independent Fiduciary has selected the Insurer to issue the Contract as set forth in this Commitment Agreement. If an Independent Fiduciary MAC has not occurred between the Commitment Agreement Date and the Closing Date, or if an Independent Fiduciary MAC has occurred but is not continuing on the Closing Date, such selection, the transactions contemplated by this Commitment Agreement, the Plan’s use of assets for the purchase of the Contract as contemplated by this Commitment Agreement, and the Contract (including its terms) all satisfy the ERISA Requirements. The Independent Fiduciary has delivered a certification confirming the foregoing, executed by a duly authorized officer of the Independent Fiduciary, to the Plan’s fiduciary that retained the Independent Fiduciary.

ii.    The transactions contemplated by this Commitment Agreement and the purchase of the Contract do not result in a Non-Exempt Prohibited Transaction, provided that the representations in paragraphs 7.c and 8.d are true and correct in all material respects as of the Closing Date.

iii.    The Plan Trust (1) will receive no less than “adequate consideration” for the Transferred Assets transferred in respect of the Contract and (2) will pay no more than “adequate consideration” for the Contract, in each case within the meaning of “adequate consideration” under ERISA § 408(b)(17)(B) and Code § 4975(f)(10).

iv.    The Independent Fiduciary understands that the Insurer did not undertake and is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated by this Commitment Agreement and the Contract.

d.    No Commissions. No fees or payments are or will be owed by the Independent Fiduciary to any individual or entity in connection with the transactions contemplated in this Commitment Agreement and the Contract for which Insurer or its affiliates or representatives, could be liable.

e.    Authorization of Commitment Agreement and Enforceability. The Independent Fiduciary has received all necessary corporate approvals and no other action on the part of the Independent Fiduciary is necessary to authorize the execution, delivery and performance of this Commitment Agreement and the Ancillary Agreements to which it is a party, and, subject to paragraph 11 of this Commitment Agreement, the consummation of the transactions contemplated to be undertaken by the Independent Fiduciary in this Commitment Agreement and the Ancillary Agreements to which it is a party. This Commitment Agreement and the Ancillary Agreements to which it is a party have been duly executed and delivered by the Independent Fiduciary, and each is (or when executed will be) a valid and binding obligation of the Independent

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Fiduciary and enforceable against the Independent Fiduciary in accordance with its terms, subject to the Enforceability Exceptions.

f.    No Conflict. The execution, delivery, and performance of this Commitment Agreement and the Ancillary Agreements to which it is a party by the Independent Fiduciary, and the consummation by the Independent Fiduciary of the transactions contemplated to be undertaken by the Independent Fiduciary in this Commitment Agreement and the Ancillary Agreements to which it is a party, do not (1) violate or conflict with the certificate or articles of incorporation, bylaws, code of regulations, or comparable governing documents of the Independent Fiduciary, (2) violate or conflict with any law or order of any governmental authority applicable to the Independent Fiduciary, (3) require any approval of a governmental authority, (4) violate or conflict with any law or order of any governmental authority applicable to any provision of the Plan Governing Documents or (5) require any consent of, or other action by any person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit under, any provision of any contract to which the Independent Fiduciary is a party, except where the occurrence of any of the foregoing would not have a material adverse effect on the Independent Fiduciary’s ability to consummate the transactions and perform its obligations contemplated by this Commitment Agreement and the Ancillary Agreements to which it is a party.

g.    Litigation. There is no action pending or, to the Independent Fiduciary’s Knowledge, threatened against the Independent Fiduciary that in any manner challenges or seeks to prevent, enjoin or materially alter or delay the transactions contemplated by this Commitment Agreement or that could reasonably be expected to materially impair or restrict such party’s ability to consummate the transactions contemplated by this Commitment Agreement and to perform its obligations hereunder.

10.    [***]; Termination.

a.    [***]

b.    Termination. This Commitment Agreement (i) may be terminated at the Insurer’s option if the Closing Date Transfers were due and payable pursuant to paragraph 3 and have not occurred in accordance with this Commitment Agreement on the Closing Date, or (ii) will be terminated upon the payment of the [***]. If this Commitment Agreement is terminated pursuant to the preceding sentence, all rights and obligations of the parties to this Commitment Agreement will terminate and will become null and void except that this paragraph 10 ([***]; Termination), paragraph 13 (Miscellaneous) and paragraph 14 (Definitions) will survive any such termination and no such party will otherwise have any liability to any other party under this Commitment Agreement. However, nothing in this paragraph 10 will relieve any party from liability for any fraud or willful and material breach of this Commitment Agreement.

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11.    Conditions to Closing. The parties’ obligations to consummate the transactions contemplated by this Commitment Agreement in connection with the Closing Date Transfers, including the Independent Fiduciary’s obligation to direct the Plan Trustee to consummate transactions contemplated by this Commitment Agreement, are subject to the satisfaction or waiver of the following conditions:

a.    the Independent Fiduciary will have confirmed that the transactions contemplated by this Commitment Agreement continue to satisfy the ERISA Requirements because an Independent Fiduciary MAC has not occurred or, if an Independent Fiduciary MAC has occurred, it is not continuing on the Closing Date; provided that, on the Closing Date, Independent Fiduciary will either (i) provide Insurer with written confirmation of the satisfaction of the condition set forth in this paragraph 11.a or (ii) notify Insurer that such condition has not been satisfied; provided further that, if the Closing Date Transfers are delivered to Insurer pursuant to paragraph 3 and no such confirmation or notification is provided by Independent Fiduciary by the close of business on the Closing Date, the direction Independent Fiduciary sends to the Plan Trustee to pay the Closing Date Transfers in accordance with paragraph 3 shall be considered confirmation of the satisfaction of the condition set forth in this paragraph 11.a;

b.    no court or governmental authority has taken any action after the Commitment Agreement Date that would (i) cause the consummation of the transactions contemplated by this Commitment Agreement to violate applicable law or (ii) cause the Plan to fail to remain qualified under Code § 401(a); and

c.    each of the representations and warranties of each of the Insurer, the Company and the Independent Fiduciary set forth in paragraphs 7, 8 and 9 shall be true and correct as of the Commitment Agreement Date and as of the Closing Date, except where the failure to be so true and correct could not reasonably be expected to materially impair or restrict such other party’s ability to consummate the transactions contemplated by this Commitment Agreement or to perform its obligations hereunder.

To the extent not satisfied as of the Closing Date, other than the condition to closing set forth in paragraph 11.a. which shall not be waived, all conditions set forth in this paragraph 11 shall be deemed to have been waived following the delivery of the Closing Date Transfers; provided that the foregoing shall not preclude any party hereto from bringing a valid fraud or breach of contract claim under this Commitment Agreement. In addition, notwithstanding any such waiver, (i) each of the representations and warranties set forth in paragraphs 7, 8 and 9 shall survive the Closing and remain in effect until the expiration of the applicable statute of limitations and (ii) each of the covenants or other agreements in

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this Commitment Agreement that by their terms (x) do not contemplate performance after the Closing, shall not survive the Closing (except for pre-Closing breach thereof) and (y) contemplate performance after the Closing shall survive the Closing consistent with the terms of the relevant covenant or agreement.

No party to this Commitment Agreement may rely on the failure of any condition to its obligation to consummate the transactions contemplated hereby set forth in this paragraph 11 to be satisfied if such failure was caused by such party’s breach of its covenants hereunder.

12.    Indemnification by the Insurer. From and after the receipt by Insurer of the Closing Date Transfers, Insurer will indemnify, defend and hold the Company, the Independent Fiduciary and the Plan, and their respective affiliates, officers, directors, stockholders, employees, plan fiduciaries, consultants, agents, and other representatives (each, an “Indemnified Party”) harmless from and against any and all actual, but not potential, consequential, contingent or punitive, losses, damages, costs and expenses (in each case, including reasonable out-of-pocket expenses and reasonable fees and expenses of counsel) to the extent arising out of or relating to the portion of any action, lawsuit, proceeding, investigation, demand or other claim against the Indemnified Party by a third party that is threatened or brought against or that involves an Indemnified Party and that arises out of or relates to any failure by the Insurer to make payments pursuant to the Contract (“Indemnified Claims”). The Insurer will have the right at any time to assume the defense against any Indemnified Claim with counsel of its choice reasonably satisfactory to the Indemnified Party and control the defense, settlement or litigation or other dispute resolution process to the final resolution of such Indemnified Claim; provided, however, that the consent of the Indemnified Party to the Insurer’s choice of counsel shall not be unreasonably withheld or conditioned and shall be deemed provided unless the Indemnified Party provides reasonable objection to the Insurer promptly and in any event within 30 days of Insurer providing notice of such choice of counsel. The Insurer will not agree without the prior written consent of the Indemnified Party (which will not be unreasonably withheld, conditioned or delayed) to the entry of any judgment on or enter into any settlement with respect to an Indemnified Claim that calls for the admission of liability on the part of the Indemnified Party, provides for equitable relief affecting the future conduct of the Indemnified Party or requires the Indemnified Party to pay any amount. Notwithstanding the foregoing, this paragraph shall not apply to any failure by the Insurer to make any such payments in the event that this Commitment Agreement is terminated pursuant to paragraph 10.

13.    Miscellaneous.

a.    This Commitment Agreement, together with the Schedules to this Commitment Agreement, constitutes the sole and entire agreement of the parties to this Commitment Agreement with respect to the subject matter contained herein and therein. The parties each hereby acknowledge that they jointly and equally

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participated in the drafting of this Commitment Agreement and all other agreements it contemplates, and no presumption will be made that any provision of this Commitment Agreement will be construed against any party by reason of such role in the drafting of this Commitment Agreement or any other agreement contemplated hereby. The Schedules to this Commitment Agreement are incorporated by reference and made a part of this Commitment Agreement as if set forth fully in this Commitment Agreement. No amendment of any of the provisions of this Commitment Agreement shall be effective unless set forth in writing and signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving, nor will such waiver be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent default, misrepresentation or breach of warranty or covenant. No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Commitment Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.

b.    This Commitment Agreement will be governed by, construed and interpreted in accordance with the laws of the State of New York, excluding those provisions relating to conflicts of laws. Except for disputes that are to be resolved by arbitration under this Commitment Agreement pursuant to paragraph 3 and Schedule 9, or where the parties agree to arbitration, all actions arising directly or indirectly out of this Agreement shall be litigated only in the United States District Court for the Southern District of New York and the parties hereby irrevocably consent to the personal jurisdiction and venue of that court.  If such District Court lacks jurisdiction, then the action shall be litigated (i) only in the Commercial Division of the New York County Supreme Court, or (ii) if the action does not satisfy the applicable qualifications of the Commercial Division of the New York County Supreme Court, then only in the Courts of the State of New York located in the City of New York and County of New York, and the parties hereby irrevocably consent to personal jurisdiction and venue of each such court. The parties agree that irreparable damage would occur if any of the provisions of this Commitment Agreement were not performed in accordance with the terms hereof or were otherwise breached.  Accordingly, each party will be entitled to seek an injunction to prevent breaches of this Commitment Agreement by the breaching party and to enforce specifically the terms of this Commitment Agreement, in addition to any other remedy to which such party is entitled by law or in equity.  To the fullest extent permitted by law, none of the parties will be liable to any other party for any punitive or exemplary damages of any nature in respect of matters arising out of this Commitment Agreement.

c.    Notwithstanding anything to the contrary therein, the NDAs shall each continue in full force and effect except that, if the Closing Date Transfers are transferred to and

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received by the Insurer, (a) each NDA shall continue indefinitely and shall not be terminated without the mutual written agreement of (i) the Company and the Insurer in the case of the Company NDA and (ii) the Insurer and the Independent Fiduciary in the case of the IFID NDA, and (b) with respect to the Company NDA, the Insurer will not be required to return or destroy any Confidential Information and will not be restricted in its use or disclosure, subject to the Insurer’s confidentiality obligations under this Commitment Agreement, of any Confidential Information related to Payees, annuity payments under the Contract or the pricing or underwriting of the Contract received from another party, provided that the Insurer will use such Confidential Information only in compliance with all applicable laws relating to privacy of personally identifying information.

d.    The Insurer, the Company and the Independent Fiduciary will not assign or transfer this Commitment Agreement or any of its rights or obligations hereunder without the prior written consent of the other parties. Any assignment or transfer in violation of this paragraph 13.d will be null and void from the outset, without any effect whatsoever.

e.    The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provisions of this Agreement. If any of the provisions of this Agreement are held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions will be limited or eliminated only to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect.

f.    This Agreement will not confer any rights or remedies upon any person other than the parties hereto and the respective successors and permitted assigns of the foregoing. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

g.    This Commitment Agreement may be executed in any number of counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

14.    Definitions. For purposes of this Commitment Agreement, the following defined terms will have the following meanings:

a.    “Ancillary Agreements” means, collectively, the Contract and the Plan Trustee Agreement.

b.    “Base File” means the data file titled “Project Slope Pricing Data_02.11.2022”, provided by or on behalf of the Company to the Insurer in an posted to OnePlace secure website at 8:16 p.m. eastern time on February 11, 2022.

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c.    “Business Day” means any day other than a Saturday, a Sunday or a day on which banks located in New York, New York are authorized or required by law to close.

d.    “Buy-Out Conversion” has the meaning set forth in the Contract.

e.    “Buy-Out Conversion Notice” has the meaning set forth in the Contract.

f.    “Buy-Out Conversion Notice Date” means the date on which the Buy-Out Conversion Notice is delivered to the Insurer.

g.    “BVAL” means Bloomberg Valuation Service, a service owned and operated by Bloomberg Finance L.P.

h.    “Cash” means a wire transfer, through the Federal Reserve System, of currency of the United States of America.

i.    “Code” means the Internal Revenue Code of 1986 and the applicable Treasury Regulations issued thereunder.

j.    “Company NDA” means the Mutual Non-Disclosure Agreement, dated as of June 22, 2021, between the Company and the Insurer.

k.    “Confidential Information” has the meaning ascribed to such term in the Company NDA.

l.    “Contract-Holder” has the meaning set forth in the Contract.

m.    “Cut-Off Time” means 4:00 p.m. eastern time on the Closing Date.

n.    [***]

o.    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any federal agency regulations promulgated thereunder that are currently in effect and applicable.

p.    “ERISA Requirements” means all of the applicable requirements of ERISA and applicable guidance promulgated thereunder, including Interpretive Bulletin 95-1.

q.    [***]

r.    [***]

s.    “IFID NDA” means the Non-Disclosure Agreement, dated as of February 25, 2022, between the Insurer and the Independent Fiduciary.

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Confidential – Subject to NDA

t.    “Independent Fiduciary MAC” means (i) the occurrence of a material adverse change, as determined in the Independent Fiduciary’s sole discretion, in or directly affecting the Insurer after the Commitment Agreement Date that would cause the selection of the Insurer and the purchase of the Contract to fail to satisfy the ERISA Requirements, or (ii) the occurrence of a change in ERISA Requirements after the Commitment Agreement Date that would cause the selection of the Insurer and the Plan’s purchase of the Contract to fail to satisfy ERISA Requirements.

u.    [***]

v.    “Initial Contract Benefit Payment Date” means June 1, 2022.

w.    [***]

x.    “Knowledge” means actual knowledge after making appropriate inquiry and after consultation with the respective party’s agents, actuaries and advisors, as applicable.

y.    [***]

z.    [***]

aa.    [***]

bb.    [***]

cc.    [***]

dd.    [***]

ee.    “NDA” means each of the Company NDA and the IFID NDA.

ff.    “Non-Exempt Prohibited Transaction” means a transaction prohibited by ERISA § 406 or Code § 4975 that is not exempted under a statutory exemption or U.S. Department of Labor class exemption.

gg.    “Payee” means any payee under the Contract, including annuitants, contingent annuitants, deferred annuitants, alternate payees and beneficiaries, as applicable.

hh.    [***]

ii.    “Plan Assets” means the assets of the Plan within the meaning of ERISA that are or will be involved in the transactions contemplated by this Commitment Agreement or the Ancillary Agreements.

jj.    “Plan Asset Manager” means Aon Investments USA, Inc.

kk.    “Plan Trust” means the Peabody Investments Corp. Master Trust.

25

Confidential – Subject to NDA

ll.    “Plan Trustee” means JPMorgan Chase Bank, N.A.

mm.    “Plan Trustee Agreement” means the agreement, dated as of the date hereof, among Insurer, the Plan Trustee and the Independent Fiduciary.

nn.    [***]

oo.    [***]

pp.    “RBC Ratio” means the risk-based capital ratio of the Insurer, calculated under the method set forth on Schedule 10.

qq.    [***]

rr.    “Scheduled GAC Issuance Date” means September 15, 2022, or such other date agreed upon by the Company and the Insurer, or if applicable and later, by the date that is five Business Days following the final resolution of any arbitration dispute in accordance with Schedule 9.

ss.    “Specimen Contract Form” means the specimen group annuity contract attached hereto as Schedule 1, which, to the extent required by applicable law, has been approved by the applicable state’s insurance commission.

tt.    [***]

uu.    [***]

vv.    [***]

[signature page follows]

26

Confidential – Subject to NDA

IN WITNESS WHEREOF, the Company, the Insurer, and the Independent Fiduciary have executed this Commitment Agreement as of the date first written above.

PEABODY INVESTMENTS CORP.	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: ___________________________________	By: ___________________________________
Print Name: ___________________________________	Print Name: ___________________________________
Title: ___________________________________	Title: ___________________________________

FIDUCIARY COUNSELORS INC.

By: ___________________________________

Print Name: ___________________________________

Title: ___________________________________

Confidential – Subject to NDA

Schedule 1

to

Commitment Agreement

SPECIMEN CONTRACT FORM

See Attached.

SAMPLEBUY-INCONTRACT ([***])

The Prudential Insurance Company of America

Newark, New Jersey

Contract-Holder: Name of Trust Bank as Directed Trustee of the Plan	Plan: Name of Retirement Plan
	Employer: Name of Employer
Group Annuity Contract No.: GA-XXXXXX	Jurisdiction: State of Jurisdiction
	Contribution Amount as of Effective Date: $XXX,XXX
Effective Date: MM DD, YYYY	Contribution Adjustment Amount: $XXX,XXX
	Total Contribution Amount as of MM DD, YYYY: $XXX,XXX,XXX
Pages Attached: 1-XX, Tables, Cash and Transferred Assets Exhibit, and Annuity Exhibits

NAME OF TRUST BANK as Directed Trustee          THE PRUDENTIAL INSURANCE COMPANY

of the Plan                          OF AMERICA

751 Broad Street

Newark, NJ 07102

By:    

Title:                         Chief Executive Officer

Date:

NAME OF EMPLOYER                 Secretary

By:             Attest:

Title:

Date:                             Date:

Single-Premium Non-Participating Group Annuity Contract supported by a Separate Account providing for Annuity Payments, subject to the provisions of this Contract. The Annuity Payments hereunder do not vary based on any gains or losses of the assets held in the Separate Account.

Initially a Buy-In Contract supported by a Commingled Separate Account

TABLE OF CONTENTS

PROVISION I		DEFINITIONS, SEPARATE ACCOUNT OPERATION AND TERMINATION OF CONTRACT	4
1.1	Definitions		4
1.2	Agreement to Pay Contribution Amount; Deposit into the Separate Account		7
1.3	Agreement to Make Annuity Payments; Associated Withdrawals from the Separate Account		8
1.4	The Separate Account that Supports this Contract		8
1.5	Investments Held in Separate Account; Insulation of Separate Account Assets		9
1.6	Insulation of Separate Account Assets		9
1.7	Expenses; Establishing Reserves; [***]		9
1.8	Process for Making Annuity Payments		10
1.9	Persons Entitled to Enforce this Contract		10
1.10	Buy-Out Conversion		10
1.11	Termination of Contract; Surrender of Contract by Contract-Holder		11
PROVISION II		PAYMENT OF ANNUITY PAYMENTS TO CONTRACT-HOLDER PRIOR TO BUY-OUT CONVERSION	14
2.1	General		14
2.2	Monthly Payment Process		14
2.3	Records Reconciliation Process; Adherence to Code and ERISA		14
2.4	Over-reimbursements and Under-reimbursements by Prudential		15
2.5	Concerning Beneficiaries		16
2.6	Concerning Qualified Domestic Relations Orders		16
PROVISION III		PAYMENT TERMS AND CONDITIONS FOR FORMS OF ANNUITIES	18
3.1	Covered Lives, Contingent Lives, and Beneficiaries		18
3.2	Definitions		18
3.3	Annuity Forms		18
3.4	Annuity Change Procedure/Conditions		20
3.5	Change in Annuity Form		20
3.6	Lump Sum Payment Option		21
3.7	Earlier Annuity Commencement Date		21
3.8	Later Annuity Commencement Date		21
3.9	Pre-Retirement Survivor Annuity		22
3.10	Small Annuity Payments to Covered Lives		23
3.11	No Assignment by Covered Lives and Contingent Lives		23
3.12	Proof of Continued Existence for Life Annuities; Escheatment		23
3.13	Misstatements		23
3.14	Concerning Designations		24
3.15	Concerning Qualified Domestic Relations Orders		25
3.16	Payments to Representatives		25
3.17	Certificates		26
PROVISION IV		GENERAL TERMS	27
4.1	Communications		27
4.2	Currency; Payments		27
4.3	Reliance on Records; Correction of Errors		27
4.4	Contract-Holder; Successor		27
4.5	No Implied Waiver		28
4.6	Changes		28

2

4.7	Entire Contract - Construction	28
4.8	Third Party Beneficiaries	28
TABLES
CASH AND TRANSFERRED ASSETS EXHIBIT
ANNUITY EXHIBITS

3

Provision I    Definitions, Separate Account Operation and Termination of Contract

1.1Definitions

In addition to other capitalized terms defined in this Contract, the following capitalized terms shall have the meanings indicated, which definitions shall control in the event a term is also defined in the Annuity Exhibits:

“Aggregate Monthly Payment” means, for each month, the total amount of Annuity Payments payable in respect of all Covered Lives (and, if applicable, Contingent Lives and Beneficiaries) for such month, subject to adjustment as provided in this Contract.

“Amendment Date” means, with respect to an amendment to this Contract, the date specified as such on the Cover Page of this Contract, as amended.

“Annuity Commencement Date” means the date the Annuity Payments commence in respect of a Covered Life and, if applicable, Contingent Life and Beneficiary, which is specified on the Annuity Exhibits.

“Annuity Exhibits” means the Annuity Exhibits attached hereto on the Effective Date, as amended and supplemented pursuant hereto.

“Annuity Payments” means, with respect to each Covered Life (and, if applicable, Contingent Life and Beneficiary), the amount, if any, determined in accordance with Provision II and Provision III of this Contract, as applicable.

“Applicable Interest Rate” means the interest rate assumption set forth under Section 417(e)(3) of the Code as prescribed by the Commissioner of the Internal Revenue Service for the month of

[] preceding the calendar year containing the Covered Life’s Annuity Commencement Date or such other date provided herein.

“Applicable Mortality Table” means the mortality assumption (without consideration to sex or gender) set forth under Section 417(e)(3)(B) of the Code in effect for the calendar year containing the Covered Life’s Annuity Commencement Date, as prescribed by the Commissioner of the Internal Revenue Service.

“Beneficiary” means a person, other than a Covered Life or a Contingent Life, shown in Prudential’s records as the beneficiary associated with such Covered Life or, after the death of a Covered Life, associated with a Contingent Life. A Beneficiary may receive Annuity Payments under this Contract after the death of a Covered Life or Contingent Life if so provided for under the Annuity Form applicable to the Covered Life. A Representative of a Beneficiary shall have the rights of a Beneficiary hereunder. A Beneficiary is not a party to this Contract and has no rights hereunder.

“Business Day” means any weekday on which the banks in New York City, New York are open for business. If any payment under this Contract is due and payable on a day which is not a Business Day, or if any notice or report is required to be given on a day which is not a Business Day, such payment shall be due and payable or such notice or report shall be given on the next succeeding Business Day.

“Buy-Out Conversion” has the meaning assigned in Section 1.10.

“Cash and Transferred Assets Exhibit” means the Cash and Transferred Assets Exhibit (substantially in the form attached hereto), setting forth the Contribution Amount, as well as the amount of cash and certain information about non-cash assets constituting the Contribution Amount paid on the Effective Date.

4

“Cash and Transferred Assets Exhibit Supplement” means, with respect to an Amendment Date, a supplement (substantially in the form attached hereto) to the Cash and Transferred Assets Exhibit, setting forth the Contribution Adjustment Amount paid on such Amendment Date, as well as (i) the amount of cash and certain information about non-cash assets constituting the Contribution Adjustment Amount paid on such Amendment Date; and (ii) any agreed upon correction to the Cash and Transferred Assets Exhibit, including a correction to the Market Value of any non-cash asset that was previously paid as part of the Contribution Amount or any Contribution Adjustment Amount.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.

“Commingled Account” means the Non-Participating Group Annuity Separate Account of Prudential. Such separate account also supports Prudential’s payment obligations under other group annuity contracts issued by Prudential. Each such contract obligates Prudential to make payments to the contract-holder and/or to individual covered lives, contingent lives and beneficiaries in amounts measured by the life-span of such covered lives, by any lump sum amounts due, by the remaining portion of any period certain annuities, and/or by any contract surrender amounts due.

“Contingent Life” means a person listed on the Annuity Exhibits as entitled to a periodic payment following the death of the Covered Life in accordance with a joint and survivor Annuity Form, but does not include any Beneficiary. A Contingent Life is not a party to this Contract and has no rights hereunder, except those expressly conferred on it in Sections 1.9 and 1.10. A Representative of a Contingent Life shall have the rights of a Contingent Life hereunder.

“Contingent Life Amount” means an amount that is specified in the Annuity Exhibits for the Covered Life’s Annuity Form as the “Contingent Life Amount.”

“Contract” means this Group Annuity Contract, including the Tables and Cash and Transferred Assets Exhibit and any supplements thereto and the Annuity Exhibits and any supplements to the Annuity Exhibits attached hereto, as amended from time to time.

“Contract-Holder” means the entity named as such on the Cover Page of this Contract, and any successors or permitted assigns.

“Contribution Adjustment Amount” means, with respect to an amendment of this Contract, the amount specified as such on the Cover Page of this Contract, as amended, payable on the applicable Amendment Date specified on the Cover Page.

“Contribution Amount” means the amount specified as such on the Cover Page of this Contract.

“Covered Life” means each Immediate Covered Life or Deferred Covered Life listed on the Annuity Exhibits as entitled to a periodic payment specified in the Annuity Exhibits, but does not include any Contingent Life or any Beneficiary. A Covered Life is not a party to this Contract and has no rights hereunder, except those expressly conferred on it in Sections 1.9 and 1.10. A Representative of a Covered Life shall have the rights of a Covered Life hereunder.

“Covered Life Amount” means an amount that is specified in the Annuity Exhibits for the Covered Life’s Annuity Form as the “Covered Life Amount.”

“Data Finalization Amendment Date” means the Amendment Date, if any, on which the Annuity Exhibits or any supplements thereto are attached to this Contract reflecting the data determined by Prudential and the Contract-Holder as of the Data Finalization Date and, if applicable, the related Contribution Adjustment Amount is paid.

5

“Data Finalization Date” means [MM DD, YYYY] or such other date as may be determined by mutual written consent of the Contract-Holder and Prudential.

“Deferred Covered Life” means each person listed on the Annuity Exhibits as entitled to a periodic and/or lump-sum payment specified on the Annuity Exhibits attached hereto who is not receiving payments under the Plan as of the Effective Date of this Contract. A Deferred Covered Life is not a party to this Contract and has no rights hereunder, except those expressly conferred on it in Sections 1.9 and 1.10 hereof.

“Effective Date” means the date specified as such on the Cover Page of this Contract.

“Employer” means the employer specified on the Cover Page of this Contract.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“General Account” means the general account of Prudential.

“Guaranteed Number of Payments” means (i) with respect to an Immediate Covered Life, the number of guaranteed payments shown for the Covered Life on the Annuity Exhibits and (ii) with respect to a Deferred Covered Life, the number of guaranteed payments elected by the Deferred Covered Life in accordance with Section 3.5.

“Immediate Covered Life” means each person listed on the Annuity Exhibits as entitled to a periodic and/or lump-sum payment specified on the Annuity Exhibits whose Annuity Commencement Date is on or before [MM DD, YYYY]. An Immediate Covered Life is not a party to this Contract and has no rights hereunder, except those expressly conferred on it in Sections 1.9 and 1.10 hereof.

“Market Value” (a) with respect to cash, means 100% thereof, (b) with respect to any non-cash assets, to the extent such Separate Account Assets are not covered by clause (c) below, means the fair market value of such assets, as such fair market value is determined by Prudential in accordance with its standard procedures for establishing the market value of its assets, and (c) in respect of any portion of the Total Contribution Amount paid by delivery of securities and other non-cash assets (if any) pursuant to Section 1.2, means the fair market value of each such asset in an amount and as of a date shown (i) in the case of the Contribution Amount, as specified in the Cash and Transferred Assets Exhibit and (ii) in the case of any Contribution Adjustment Amount, as specified in the Cash and Transferred Assets Exhibit Supplement dated as of the Amendment Date on which such Contribution Adjustment Amount is payable.

“Plan” means the plan specified on the Cover Page of this Contract.

“Prudential” means The Prudential Insurance Company of America, its successors and permitted assigns.

“Prudential’s Office” means the following office of Prudential, unless Prudential provides a notice specifying another address for certain or all communications:

The Prudential Insurance Company of America

30 Scranton Office Park

Scranton, PA 18507-1789

Attention: Group Annuity Operations

“Qualified Domestic Relations Order” means a qualified domestic relations order that meets the requirements of ERISA as applied to employee benefit plan participants in effect from time to time.

6

“Representative” means , with respect to a Covered Life or Contingent Life or Beneficiary, an individual or entity demonstrating to the reasonable satisfaction of Prudential that such individual or entity is duly appointed (a) as a guardian of such Covered Life or Contingent Life or Beneficiary, (b) as a holder of a power of attorney from such Covered Life or Contingent Life or Beneficiary, (c) as a trustee of such Covered Life or Contingent Life or Beneficiary or (d) as a testamentary executor of such Covered Life’s or Contingent Life’s or Beneficiary’s estate; provided, that a “Representative” does not include an assignee of the rights of such person hereunder in contravention of Provision III.

“Required Beginning Date” means the April 1st of the calendar year following the later of (i) the calendar year in which the Deferred Covered Life attains age 70 ½ or (ii) the calendar year in which the Deferred Covered Life incurs a Separation From Service.

“Separate Account” means the Commingled Account. The contracts supported by Commingled Account do not participate in the investment or other experience of the Separate Account.

“Separation From Service” means the employment of a Deferred Covered Life with the Employer is terminated for reasons other than death.

“Spouse” means the person legally married to a Covered Life in a marriage recognized as valid in the state in which it was entered into. A Spouse entitled to payments under a Deferred Covered Life’s Joint and Survivor Life Annuity Form shall have the rights of a Contingent Life hereunder.

“Tables” means the tables attached hereto.

“Temporary Annuity Expiry Date” means the date the final annuity payment is due under a Temporary Annuity, as specified on the Annuity Exhibits.

“Total Contribution Amount” means, as of any date, the Contribution Amount, as increased or decreased by any Contribution Adjustment Amounts specified on an amended Cover Page of this Contract through the most recent Amendment Date.

“Years of Service” means the Years of Service applicable to Deferred Covered Lives as provided to Prudential by the Contract-Holder. For the purposes of meeting eligibility requirements for benefits hereunder, Years of Service will continue to accrue to Deferred Covered Lives after the Effective Date as provided to Prudential by the Contract-Holder.

1.2Agreement to Pay Contribution Amount; Deposit into the Separate Account

[***]

[***]. All assets allocated by Prudential to the Separate Account held by a custodian will be held by Prudential in one or more custody accounts at entities independent of Prudential and each such custody account shall only hold assets allocated to the Separate Account.

On each Amendment Date specified on an amended Cover Page of this Contract, if any, Contract- Holder and Prudential may, by separate amendment to this Contract, agree that (a) the Contribution Adjustment Amount specified on such amended Cover Page shall be paid on such Amendment Date (x) prior to or on the Data Finalization Amendment Date, in cash and (y) following the Data Finalization Amendment Date, in cash; and (b) a Cash and Transferred Assets Exhibit Supplement dated as of such Amendment Date shall be attached to this Contract specifying: (i) such Contribution Adjustment Amount; (ii) the amount of cash and, if applicable, the Market Value and certain other information with

7

respect to each non-cash asset being transferred as part of such Contribution Adjustment Amount; and

(iii) if such Contribution Adjustment Amount is payable by Prudential, whether each such asset is being paid from the General Account or from the Separate Account; and (iv) any agreed upon correction to the Market Value of any asset specified on the Cash and Transferred Assets Exhibit or any Cash and Transferred Assets Exhibit Supplement that was previously agreed and attached to this Contract. No such amendment shall require the consent of any person other than Contract-Holder and Prudential.

If the Contribution Adjustment Amount that is payable on the Amendment Date is a negative number, then such amount shall be paid by Prudential to the Contract-Holder on such Amendment Date by delivering cash equal to such Contribution Adjustment Amount, as indicated on the applicable Cash and Transferred Assets Exhibit Supplement.

If the Contribution Adjustment Amount that is payable on the Data Finalization Amendment Date or any prior Amendment Date is a positive number, then the Contract-Holder shall pay such amount to Prudential on such Amendment Date by delivering cash equal to such Contribution Adjustment Amount, as indicated on the applicable Cash and Transferred Assets Exhibit Supplement, and Prudential will allocate the Contribution Adjustment Amount received on such date to the Separate Account.

If the Contribution Adjustment Amount that is payable after the Data Finalization Amendment Date is a positive number, then the Contract-Holder shall pay such amount to Prudential on such Amendment Date by delivering cash to Prudential in an amount equal to such Contribution Adjustment Amount, as indicated on the applicable Cash and Transferred Assets Exhibit Supplement, and Prudential will allocate the Contribution Adjustment Amount received on such date to the Separate Account.

For the avoidance of doubt, with respect to any amendment to the Annuity Exhibits increasing any Annuity Payments or adding Annuity Payments in respect of new Covered Lives or Contingent Lives or Beneficiaries under this Contract, Prudential’s obligation to make any such increase or addition with respect to any such Annuity Payment or to add any such new Covered Lives or Contingent Lives or Beneficiaries shall be conditioned on Prudential’s prior receipt of any payment due to Prudential under this Contract with respect to any such amendment.

1.3Agreement to Make Annuity Payments; Associated Withdrawals from the Separate Account

Subject to receipt of the full Contribution Amount, Prudential agrees to pay Annuity Payments due from and after the Effective Date.

[***]

1.4The Separate Account that Supports this Contract

During the period starting on the Effective Date, and ending on the date of termination of this Contract, the obligations of Prudential under this Contract will be supported by the Commingled Account.

8

1.5Investments Held in Separate Account; Insulation of Separate Account Assets

The Separate Account is intended to be invested primarily in investment-grade fixed income securities, but other investments are permitted. Prudential will invest and reinvest the assets of the Separate Account at the time and in the amounts as Prudential determines in its discretion and in accordance with applicable law. Prudential may, with respect to any assets held in the Separate Account, delegate Prudential's investment management and/or voting rights to other entities, including institutions not affiliated with Prudential.

1.6Insulation of Separate Account Assets

Prudential owns all the assets in the Separate Account. Pursuant to Section 17B:28-9(c) of the New Jersey Insurance Statutes, none of the assets held in the Commingled Account, [***] will be chargeable with liabilities arising out of any other business of Prudential.

1.7Expenses; Establishing Reserves; [***]

Expenses may be charged against the Separate Account. Such expenses shall represent the direct and indirect costs (inclusive of general and administrative expenses) relating to this Contract and the Separate Account and shall be charged against the Separate Account in accordance with statutory accounting principles. Expense payables and withdrawals from the Separate Account will include custody fees applicable to the Separate Account, investment management related expenses, taxes due on the Separate Account earnings and general and administrative expenses allocated to the Separate Account. If Prudential’s General Account pays such expenses or contractual obligations, then a payable owed by the Separate Account shall arise, and Prudential’s General Account shall be later reimbursed by charging the Separate Account.

[***]

A withdrawal from the Separate Account will be made only on a Business Day, and the assets withdrawn will no longer be allocated to the Separate Account.

9

1.8Process for Making Annuity Payments

Prior to the consummation of any Buy-Out Conversion, Prudential shall make Aggregate Monthly Payments owed by it to the Contract-Holder pursuant to Provision II. The Contract-Holder and Prudential may separately agree to other arrangements. After the consummation of a Buy-Out Conversion and after receipt of information reasonably required by Prudential to enable it to make Annuity Payments directly to Covered Lives (and, if applicable, Contingent Lives and Beneficiaries) (such as information concerning addresses, bank accounts, income tax withholding, designation of Beneficiaries and Qualified Domestic Relations Orders), Prudential shall make Annuity Payments arising after such date directly to such Covered Lives (and, if applicable Contingent Lives and Beneficiaries) pursuant to Provision III. Notwithstanding any other terms of this Contract (including Section 3.3), no Annuity Payments or other payments will be made directly by Prudential to a Covered Life, Contingent Life or Beneficiary at any time prior to consummation of a Buy-Out Conversion pursuant to Section 1.10.

1.9Persons Entitled to Enforce this Contract

Prudential, Employer and Contract-Holder agree that prior to consummation of a Buy-Out Conversion, no Covered Life, Contingent Life or Beneficiary has any right whatsoever to enforce any term of this Contract against Prudential or any other party and that no Covered Life, Contingent Life, or Beneficiary is an intended third party beneficiary of or shall otherwise benefit from any term of this Contract. Prior to the consummation of a Buy-Out Conversion, the parties agree that only Prudential, Employer, the Plan and Contract-Holder have any rights or obligations hereunder and that none of Prudential,

Contract-Holder, the Employer or the Plan have any obligations hereunder to any Covered Life, Contingent Life, or Beneficiary.

After consummation of a Buy-Out Conversion:

(a)    Covered Lives and Contingent Lives. Any Covered Life or Contingent Life shall have the right to enforce his or her right to receive Annuity Payments under this Contract against Prudential in the capacity of an intended third party beneficiary thereof. The rights of a Covered Life or Contingent Life are not diminished if Contract-Holder ceases to exist and no successor is appointed.

(b)    Contract-Holder and the Plan. Contract-Holder shall have the right to enforce any provision of this Contract against Prudential. Neither Contract-Holder nor the Plan shall have any obligation to any Covered Life or Contingent Life with respect to the Annuity Payments under this Contract.

(c)    Prudential. Prudential shall have the right to enforce any provision of this Contract against Contract-Holder.

1.10Buy-Out Conversion

Subject to the terms of this Section 1.10, and if the Plan is amended to provide for immediate distribution of benefits in the form of an annuity directly to Covered Lives (and, if applicable, Contingent Lives and Beneficiaries) (a “Buy-Out Plan Amendment”), the Contract-Holder has the option to initiate a process by which each Covered Life (and, if applicable, Contingent Life) will have the right to enforce against Prudential his or her right to receive Annuity Payments determined pursuant to Provision III (the consummation of such process being a “Buy-Out Conversion”).

On any Business Day prior to receipt by Prudential of a Surrender Notice given pursuant to Section 1.11, the Contract-Holder has the right to deliver an irrevocable written notice (a “Buy-Out Conversion Notice”) to Prudential instructing it to initiate a Buy-Out Conversion. The Buy-Out Conversion Notice shall include a representation from the Contract-Holder and the Employer to Prudential, made as of the date thereof, and as of the date of the Buy-Out Conversion, that (a) the Plan is maintained under and is

10

subject to ERISA, (b) to the Contract-Holder’s and the Employer’s knowledge (after making appropriate inquiry), the Plan is in compliance with ERISA and the Code in all material respects and (c) to the Contract-Holder’s and the Employer’s knowledge (after making appropriate inquiry), no event has occurred that is reasonably likely to result in the Plan losing its status as qualified by the Code for preferential tax treatment under Code §§ 401(a) and 501(a). Such Buy-Out Conversion will be a complete conversion of all then remaining Covered Lives and, if applicable, Contingent Lives and Beneficiaries. Upon delivery of a Buy-Out Conversion Notice, this Contract may no longer be surrendered in accordance with Section 1.11.

Prudential will initiate a Buy-Out Conversion if prior to receipt by Prudential of a Surrender Notice pursuant to Section 1.11, (i) the Plan is terminated, (ii) the Plan is the subject of a judicial decree ordering the termination of the Plan in a proceeding instituted by the Pension Benefit Guaranty Corporation or (iii) the Contract-Holder notifies Prudential that it will cease to exist or cease to perform the duties of the Contract-Holder hereunder and no successor is appointed by the Employer, as Plan sponsor, with such Buy-Out Conversion to be effective as of the later of (x) the date on which the Contract-Holder ceases to exist or perform the obligations of the Contract-Holder under this Contract and (y) the satisfaction of each of the Conversion Conditions. If any of the events described in the immediately preceding sentence occurs, the Contract-Holder shall inform Prudential in writing.

The consummation of a Buy-Out Conversion is conditioned upon (1) enactment of a Buy-Out Plan Amendment and (2) receipt (i) of all necessary or appropriate third-party consents and approvals, including regulatory approvals, in connection with the Buy-Out Conversion, (ii) of the information concerning Covered Lives, Contingent Lives and Beneficiaries, as specified in Section 1.8 and (iii) of payment from the Contract-Holder of any applicable premium taxes. Following receipt of a valid and irrevocable Buy-Out Conversion Notice and satisfaction of each of the conditions set forth in the preceding sentence (the “Conversion Conditions”), Prudential will initiate a Buy-Out Conversion, the consummation of which shall occur by the [***] day following the later of (i) the date of the Contract- Holder’s Buy-Out Conversion Notice to Prudential and (ii) the date on which each of the Conversion Conditions has been satisfied, unless otherwise mutually agreed upon by the parties. Upon consummation of a Buy-Out Conversion following receipt of such consents, approvals and information and in accordance with the timing described in this Section 1.10, each Covered Life (and, if applicable, Contingent Life) shall have the rights described in Section 1.9(a). Prudential shall notify Contract- Holder of such consummation. The Commingled Account will support this Contract after consummation of a Buy-Out Conversion.

After consummation of a Buy-Out Conversion, Prudential will deliver group annuity certificates as described in Section 3.17. After the consummation of a Buy-Out Conversion and after receipt of information reasonably required by Prudential to enable it to make Annuity Payments directly to Covered Lives (and, if applicable, Contingent Lives and Beneficiaries) (such as information concerning addresses, bank accounts, income tax withholding, designation of Beneficiaries and Qualified Domestic Relations Orders), Prudential shall make Annuity Payments after such date directly to such Covered Lives (and, if applicable, Contingent Lives and Beneficiaries) pursuant to Provision III.

No Buy-Out Conversion hereunder shall be considered an amendment to this Contract nor shall the Annuity Exhibits be amended in connection therewith.

1.11Termination of Contract; Surrender of Contract by Contract-Holder

If the Contract-Holder does not elect to surrender this Contract in accordance with this Section 1.11, this Contract will terminate on the date when no further amounts are payable by either party hereunder.

Prior to delivery of a Buy-Out Conversion Notice, the Contract-Holder may surrender this Contract by giving written notice (a “Surrender Notice”) to Prudential. The Surrender Notice will be deemed complete upon, and surrender of this Contract is conditioned upon, the provision by the Contract-Holder to Prudential of (1) evidence reasonably satisfactory to Prudential that (i) the Employer, as sponsor of

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the Plan has decided to distribute the entire interest under the Plan of each Covered Life (and, if applicable, each Contingent Life and Beneficiary) in the form of an irrevocable commitment from a group of one or more insurers and (ii) a fiduciary of the Plan has determined that (a) there has been a material adverse change in or directly affecting Prudential between the Effective Date and the date of such determination that would cause a Buy-Out Conversion of the Contract to fail to satisfy the ERISA Requirements and (b) as a result of the occurrence and continuing impact of such material adverse change, such fiduciary has identified a group of one or more insurers, which does not include Prudential, from which the Plan will purchase irrevocable commitments with respect to the interest under the Plan of each Covered Life (and, if applicable, each Contingent Life and Beneficiary), provided that the fiduciary has the authority to cause the Plan to make such purchase and (2) a copy of a written notice by the plan administrator of the Plan to each Covered Life (and, if applicable, each Contingent Life and Beneficiary) notifying recipients that the plan administrator intends to terminate the Plan or, alternatively, to distribute to recipients their entire interest under the Plan and, in either case, identifying the insurer or group of insurers from which the Plan intends to purchase irrevocable commitments.

Each of Prudential, the Contract-Holder and the Employer acknowledge and agree that the payment by Prudential of the Surrender Value (as defined below) following a surrender of the Contract in accordance with this Section 1.11, is intended to represent a fixed contractual obligation of Prudential under which the amounts payable to the Contract-Holder are not affected in any manner by the investment performance of the Separate Account for purposes of 29 C.F.R. §2510.3-101(h)(3).

[***]

Upon the payment of the Surrender Value, this Contract shall terminate and all rights and obligations of the parties hereunder, including for the avoidance of doubt those of any third party beneficiaries, shall terminate; provided, however, that (i) no such termination shall relieve any party from liability for damages arising out of any breach of this Contract, which occurred prior to the termination of this Contract, and (ii) Section 1.1 (Definitions), 2.3(c) (Annual Attestation), Section 2.3(d) (Compliance with Laws and Regulations), Section 2.3(e) (Review of Records), Section 2.4 (Over-reimbursements and Under-reimbursements by Prudential), Section 3.13 (Misstatements), and Provision IV will survive any such termination indefinitely. For the avoidance of doubt, upon the termination of this Contract pursuant to this Section 1.11 none of the Contract-Holder, any Covered Life, any Contingent Life or any other individual or entity will have any right to receive any Aggregate Monthly Payments or Annuity Payments thereafter or any amounts remaining in the Separate Account except for any amounts that may accrue to them by operation of the proviso in the preceding sentence.

[***]

The following additional definitions apply to this Section.

“Designated Mortality Table” means [].

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“ERISA Requirements” means all of the applicable requirements of ERISA and applicable guidance promulgated thereunder, including Interpretive Bulletin 95-1.

[***]

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Provision II    Payment of Annuity Payments to Contract-Holder Prior to Buy-Out Conversion

2.1General

With respect to Annuity Payments arising prior to the consummation of a Buy-Out Conversion, Prudential shall discharge its obligation to make such Annuity Payments by making payments to the Contract-Holder as provided in this Provision II. For the avoidance of doubt, Annuity Payments to be made after the consummation of a Buy-Out Conversion are governed by Provision III.

Prudential’s obligation to pay each of the Aggregate Monthly Payments as set forth in this Contract is subject to the condition precedent that the Contract-Holder has performed all of its then outstanding obligations and satisfied all of its then outstanding requirements under the applicable laws and regulations, all as specified in this Contract.

Prudential’s obligation to pay each of the Aggregate Monthly Payments as set forth in this Contract is subject to the receipt of the relevant information listed in Section 2.3.

2.2Monthly Payment Process

On the first Business Day of each calendar month which is prior to the consummation of a Buy-Out Conversion and during which an Annuity Payment is due under this Contract, Prudential shall pay to the Contract-Holder an amount equal to the Aggregate Monthly Payment due with respect to such month, calculated using the Annuity Exhibits, as such information is updated on Prudential’s records pursuant to this Contract.

2.3Records Reconciliation Process; Adherence to Code and ERISA

(a)    Records and Data. The Contract-Holder will maintain sufficient records and data to establish that the Annuity Payments being made by Prudential are owed pursuant to this Contract.

(b)    Information Exchange. At least five (5) Business Days prior to the close of each calendar month, Contract-Holder will provide to Prudential, in an electronic format acceptable to Prudential:

(i)    (A) the amount of the Aggregate Monthly Payment to be paid by Prudential for the upcoming calendar month for any Covered Life, Contingent Life, or Beneficiary; and

(B) a listing of Annuity Payments due to each Covered Life, Contingent Life, or Beneficiary for the upcoming calendar month and the applicable Covered Life, Contingent Life or Beneficiary to whom such Annuity Payment is due; and

(ii)    a listing of the following changes in the status of any Covered Life, Contingent Life or Beneficiary (the “Change in Status Report”) occurring since the immediately preceding Change in Status Report (or a statement in writing that no change has occurred since the last such report):

(A)    Death of a Covered Life actually reported to the Plan or its administrator;

(B)    Death of a Contingent Life or Beneficiary actually reported to the Plan or its administrator;

(C)    Annuity Payments previously due to a Covered Life, Contingent Life, or Beneficiary and not yet paid by Prudential;

(D)    Payments previously made by Prudential in respect of a Covered Life, Contingent Life, or Beneficiary that were not owed as Annuity Payments;

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(E)    Adjustment of Annuity Payments in respect of a Covered Life due to a Qualified Domestic Relations Order;

(F)    Commencement of Annuity Payments in respect of a Deferred Covered Life. The Contract-Holder will provide information to enable Prudential to verify the monthly amount of Annuity Payments in respect of each Deferred Covered Life based on the Annuity Commencement Date and Annuity Form elected in respect of such Deferred Covered Life.

together with such additional information reasonably requested by Prudential within seven (7) Business Days after receipt of the prior Change in Status Report.

(c)    Annual Attestation. Within ninety (90) Business Days after the close of each calendar year, an authorized officer of Contract-Holder will attest that to the best of such officer’s knowledge:

(i)    The amount paid by Prudential during the prior calendar year equals the amount of Annuity Payments owed by Prudential for such period under this Contract;

(ii)    All current information concerning each Covered Life, Contingent Life and Beneficiary, including any change in status (e.g. deaths), was reported to Prudential on a timely basis during the calendar year;

(iii)    The Contract-Holder’s records are in agreement with Prudential’s records provided to the Contract-Holder as specified below;

(iv)    The Contract-Holder continues to administer the Plan in substantial compliance with the requirements of the Code and ERISA applicable to plan participants in an employee benefit plan.

Prudential will send its payment records of the Covered Lives, Contingent Lives, and Beneficiaries, and the Annuity Payment amounts, to the Contract-Holder within 30 days after the end of the calendar year.

(d)    Compliance with Laws and Regulations. The Contract-Holder will satisfy all of the requirements of applicable laws and regulations (including but not limited to the Code and ERISA) with respect to the Plan’s payments to Covered Lives, Contingent Lives, and Beneficiaries. These requirements include, but are not limited to, the following: processing state inheritance tax waivers or notifications, as necessary; filing and issuing appropriate tax information forms; qualifying domestic relations orders; and withholding, reporting and transmitting federal, state and local income taxes, and paying any interest due by the Plan to Covered Lives, Contingent Lives, or Beneficiaries as a result of late payment. Prudential disclaims any responsibility for the Plan’s compliance with the Code, ERISA or any applicable law or regulation.

(e)    Review of Records. Upon reasonable advance notice, Prudential or its auditors or other consultants shall be permitted to periodically review and verify the records maintained by the Plan in connection with Covered Lives, Contingent Lives, and Beneficiaries.

2.4Over-reimbursements and Under-reimbursements by Prudential

(a)    If Prudential determines at any time that the amount of any prior Aggregate Monthly Payment paid by it to the Contract-Holder exceeded the Aggregate Monthly Payment actually due under this Contract, the Contract-Holder shall pay such excess amount to Prudential, provided, however, that the Contract-Holder shall have no obligation to make such additional payment to the extent the overpayment:

(i)    is not the result of the Contract-Holder’s failure to fulfill its obligations under Section 2.3(b); and

(ii)    was caused by the inaccurate records kept by Prudential; and

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(iii)    occurred in respect of a month prior to (x) the last month of a calendar year for which an annual attestation was completed in accordance with Section 2.3(c) and (y) the month two (2) years before such determination, whichever is later.

(iv)    If the Contract-Holder is obligated to pay such excess amount to Prudential, Prudential may subtract such excess amount from any future payment otherwise due to the Contract-Holder, provided that, on request of Prudential, the Contract-Holder shall pay all or part of such excess to the extent that there is no future payment otherwise due or such excess exceeds the future payment. Prudential will correct its records so that future calculations of the Aggregate Monthly Payment are accurate.

(b)    If Prudential determines at any time that the amount of any prior Aggregate Monthly Payment paid by it to the Contract-Holder was less than the Aggregate Monthly Payment actually due under this Contract for such month, Prudential shall pay such additional amount to Contract-Holder; provided, however, that Prudential shall have no obligation to make such additional payment to the extent the underpayment:

(i)    was caused by the inaccurate records kept by or on behalf of the Plan or Contract-

Holder/Employer, and

(ii)    occurred in respect of a month prior to the later of (x) the last month of a calendar year for which an annual attestation was completed in accordance with Section 2.3(c) and (y) the month two (2) years before such determination. Amounts owed by Prudential under this clause (b) shall be reduced by amounts owed to Prudential under clause (a) above. Prudential will correct its records so that future calculations of the Aggregate Monthly Payment are accurate.

(c)    The obligation of the parties under this Section 2.4 is not increased or reduced by the ability of the Contract-Holder, Plan or Employer, or any entity acting on behalf of such entity, to recoup any overpayment from the related Covered Life, Contingent Life, or Beneficiary, or by the amount of any interest or other costs incurred by the Contract-Holder, Plan, Employer or such other entity in connection with any under or overpayment to a Covered Life, Contingent Life, or Beneficiary.

2.5Concerning Beneficiaries

A Covered Life may designate and re-designate a Beneficiary from time to time in such manner specified by the Contract-Holder/Employer and in accordance with the Plan, and the Contract-Holder or the Plan shall be responsible for maintaining such records. In connection with a Buy-Out Conversion, upon request from Prudential, the Contract-Holder will give Prudential a copy of such records.

2.6Concerning Qualified Domestic Relations Orders

The Contract-Holder will be responsible for qualifying any domestic relations order (as defined in subsection 414(p) of the Code which would result in an adjustment to Annuity Payments otherwise payable in respect of a Covered Life and in respect of an alternate payee. Any such adjustment shall split the Annuity Payments between those payable in respect of the Covered Life and those payable in respect of an alternate payee. Otherwise, the Annuity Payment will continue to be payable as set forth in accordance with this Provision II before the Annuity Payment was adjusted. No adjustment to Annuity Payments otherwise payable in respect of a Covered Life or payments or in respect of an alternate payee that result in payment obligations based on the alternate payee’s lifetime will become payable, unless so approved by Prudential. Any such Annuity Payment adjustment will take effect when entered upon Prudential’s records.

In connection with the consummation of a Buy-Out Conversion, the Contract-Holder will cooperate with Prudential to provide any reasonably necessary or otherwise requested information in connection with any Qualified Domestic Relations Orders in effect with respect to Covered Lives subject to such Buy-Out Conversion. After consummation of any Buy-Out Conversion, Prudential will determine the

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qualification of any domestic relations order (as defined in Section 414(p) of the Code) in accordance with Section 3.15 for each applicable Covered Life.

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Provision III    Payment Terms and Conditions for Forms of Annuities

3.1Covered Lives, Contingent Lives, and Beneficiaries

The amount owed by Prudential under this Contract in respect of each Covered Life (and, if applicable, Contingent Life and Beneficiary) will be determined by Prudential in accordance with the terms of this Provision III.

Prudential will apply the terms of this Provision III using the information contained in the Annuity Exhibits with respect to such Covered Life, Contingent Life, and Beneficiary as such information is updated or corrected pursuant to this Contract. Capitalized terms used but not defined in Section 1.1 have the meanings assigned in this Provision III.

3.2Definitions

The following definitions apply to Section 3.3.

“Annuity Forms” means in respect of a Covered Life, one of the types of annuities having such payment terms as are specified in Section 3.3.

3.3Annuity Forms

(i)    “Life Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Life” Annuity Form.

Prudential does not owe any payments to anyone under this Annuity Form if the Covered Life has died before the Annuity Commencement Date.

During the Covered Life’s lifetime, Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date. Prudential will pay subsequent monthly payments on the first day of each month. Prudential’s last monthly payment to the Covered Life will be on the first day of the month in which the Covered Life dies.

(ii)    “Life with Period Certain Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Life with Period Certain” Annuity Form.

During the Covered Life’s lifetime, Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date. Prudential will pay subsequent monthly payments on the first day of each month. Prudential’s last monthly payment to the Covered Life will be on the first day of the month in which the Covered Life dies.

After the Covered Life dies, Prudential will compare the number of monthly payments Prudential made in respect of the Covered Life on and after the Annuity Commencement Date to the Guaranteed Number of Payments. If the number of monthly payments is less than such guaranteed number, Prudential will pay the Covered Life Amount each month to the designated Beneficiary. These payments will stop when the total number of payments to the Covered Life, plus the number of payments to the Beneficiary, equals the Guaranteed Number of Payments.

(iii)    “Joint and Survivor Life Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Joint and Survivor Life” Annuity Form.

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During the Covered Life’s lifetime, Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date. Prudential will pay subsequent monthly payments on the first day of each month. Prudential’s last monthly payment to the Covered Life will be on the first day of the month in which the Covered Life dies.

After the Covered Life dies, Prudential may owe additional monthly payments. Prudential will owe additional monthly payments if the Contingent Life is alive when the Covered Life dies. Prudential will pay the first payment on the first day of the month following the Covered Life’s death. Prudential will pay subsequent monthly payments on the first day of each month.

Prudential will pay the last payment on the first day of the month in which such Contingent Life dies. The amount of the payments will equal the Contingent Life Amount.

(iv)    “Joint and Survivor Life with Period Certain Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Joint and Survivor Life with Period Certain” Annuity Form.

During the Covered Life’s lifetime, Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date. Prudential will pay subsequent monthly payments on the first day of each month. Prudential’s last monthly payment to the Covered Life will be on the first day of the month in which the Covered Life dies.

After the Covered Life dies, Prudential may owe additional monthly payments. Prudential will owe additional monthly payments if the Contingent Life is alive when the Covered Life dies. Prudential will pay the first payment on the first day of the month following the Covered Life’s death. Prudential will pay subsequent monthly payments on the first day of each month.

Prudential will pay the last payment to the Contingent Life on the first day of the month in which such Contingent Life dies. The amount of the payments will equal the Covered Life Amount until the total number of monthly payments made to both the Covered Life and the Contingent Life is equal to the Guaranteed Number of Payments. Thereafter monthly payments to the Contingent Life will be equal to the Contingent Life Amount.

After the death of the second to die of the Covered Life and the Contingent Life, Prudential will compare the number of monthly payments Prudential made in respect of the Covered Life and the Contingent Life on and after the Annuity Commencement Date to the Guaranteed Number of Payments. If the number of monthly payments is less than such guaranteed number, Prudential will pay the Covered Life Amount each month to the designated Beneficiary. These payments will stop when the total number of payments to the Covered Life, plus the number of payments to the Contingent Life and the designated Beneficiary, equals the Guaranteed Number of Payments.

(v)    “Period Certain Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Period Certain” Annuity Form.

Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date. Prudential will pay subsequent monthly payments on the first day of each month. The total number of monthly payments will equal the Guaranteed Number of Payments. Once such Guaranteed Number of Payments has been paid, no further payments are due.

After the Covered Life dies, Prudential will compare the number of monthly payments Prudential made in respect of the Covered Life on and after the Annuity Commencement Date to the Guaranteed Number of Payments. If the number of monthly payments is less than such

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guaranteed number, Prudential will pay the “present value” (as such term is defined in Section 3.14) of the remaining guaranteed payments to the Covered Life’s estate.

(vi)    “Temporary Annuity” means the following for each Covered Life identified in the Annuity Exhibits as receiving a distribution of a “Temporary” Annuity Form.

Prudential does not owe any payments to anyone under this Annuity Form if the Covered Life has died before the Annuity Commencement Date.

During the Covered Life’s lifetime, Prudential will make monthly payments to the Covered Life equal to the Covered Life Amount. Prudential owes the first monthly payment on the Annuity Commencement Date, if the Covered Life is living. Prudential will pay subsequent monthly payments on the first day of each month. Payments will end with the monthly payment payable on the earlier of the Temporary Annuity Expiry Date and the first day of the month in which the Covered Life dies.

3.4Annuity Change Procedure/Conditions

Prior to consummation of a Buy-Out conversion, any change in Annuity Form or Annuity Commencement Date made by a Deferred Covered Life will be administered by the Contract-Holder in accordance with the Code and ERISA, Provision II and this Provision III. After such change is made, the Contract-Holder shall inform Prudential, as set forth in Section 2.3, and such change will be governed by this Provision III and will be entered upon Prudential’s records and thereafter will have the same force and effect as if included in the Annuity Exhibits on the Effective Date.

After consummation of a Buy-Out Conversion, each Deferred Covered Life, if alive on the Annuity Commencement Date, is entitled to receive Annuity Payments in the Annuity Form and Covered Life Amount shown on the Annuity Exhibits, subject to the terms of Provision III. A Deferred Covered Life may elect a change in Annuity Form or Annuity Commencement Date by submitting a signed request in a method acceptable to Prudential containing all the information Prudential deems necessary for the change. For changes other than a change made due to a later Annuity Commencement Date, such requests must be received at Prudential’s Office at least 30 days before the applicable Annuity Commencement Date. Any such change will be governed by this Provision III and will take effect when entered upon Prudential's records and thereafter will have the same force and effect as if included in the Annuity Exhibits on the Effective Date.

The disclosure and spousal consent requirements of Section 417 of the Code in effect from time to time will apply to a change in Annuity Form. Any change in Annuity Form will apply to payments payable on and after the Annuity Commencement Date.

3.5Change in Annuity Form

A Deferred Covered Life who has a Spouse on his or her Annuity Commencement Date will, unless he or she specifically elects otherwise in accordance with Section 3.4, have the Annuity Form specified on the Annuity Exhibits changed to a 50% Joint and Survivor Life Annuity beginning on the Deferred Covered Life’s Annuity Commencement Date. The amount of the Deferred Covered Life’s Annuity Payment after the change will be equal to the amount of Annuity Payment otherwise payable multiplied by the appropriate conversion factor determined from the Tables of this Contract. Prudential will make the first monthly payment to Deferred Covered Life on the Annuity Commencement Date. Prudential will pay subsequent payments to the Deferred Covered Life on the first day of each month. Prudential’s last payment to the Deferred Covered Life will be on the first day of the month in which the Deferred Covered Life dies.

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After the death of the Deferred Covered Life, Prudential will make additional monthly payments to the Spouse if the Spouse is alive when the Deferred Covered Life dies. Prudential will make the first monthly payment to the Spouse on the first day of the month following the month in which the Deferred Covered Life dies. Prudential will pay subsequent payments to the Spouse on the first day of each month. Prudential’s last payment to the Spouse will be on the first day of the month in which such Spouse dies. The amount of Annuity Payment payable to the Spouse after the Deferred Covered Life’s death will be equal to the amount of the Annuity Payment payable to the Deferred Covered Life’s multiplied by 50%.

Subject to the terms of Section 3.4, a Deferred Covered Life may, before his or her Annuity Commencement Date, change Annuity Form specified on the Annuity Exhibits to either (i) a Life with Period Certain Annuity with Guaranteed Number of Payments equal to 60, 120, 180 or 240 or (ii) a Joint and Survivor Life Annuity with a continuation percentage to the designated Contingent Life equal to 50%, 75%, or 100%. The changed Annuity Form will apply to payments payable on and after the Deferred Covered Life’s Annuity Commencement Date.

The amount of the Deferred Covered Life’s Annuity Payment after the change of Annuity Form will be equal to the amount of Annuity Payment otherwise payable multiplied by the appropriate conversion factor determined from the Tables of this Contract. The amount of Annuity Payment payable to the Contingent Life after the Deferred Covered Life’s death will be equal to the amount of the Annuity Payment payable to the Deferred Covered Life multiplied by the applicable continuation percentage.

The payment terms for these Annuity Forms are described in Section 3.3; provided that the Contingent Life will be the person designated by the Deferred Covered Life and the Contingent Life Amount will be equal to the amount payable to the designated Contingent Life as determined in accordance with this Section.

3.6Lump Sum Payment Option

Subject to the terms of Section 3.4, a Deferred Covered Life may elect to receive a lump sum payment in lieu of and in full settlement for the Annuity Payments which would otherwise be payable under this Contract. The lump sum payment will be paid on the Deferred Covered Life’s Annuity Commencement Date provided that Prudential has received the Deferred Covered Life’s lump sum election. The amount of the lump sum payment will be determined using the Applicable Interest Rate and Applicable Mortality Table. The disclosure and spousal consent requirements of Section 417 of the Code in effect from time to time will apply to a lump sum payment.

3.7Earlier Annuity Commencement Date

Subject to the terms of Section 3.4, a Deferred Covered Life may change his or her Annuity Commencement Date to an earlier date. In order to elect an earlier Annuity Commencement Date, the Deferred Covered Life must have incurred a Separation From Service, attained age 55, and completed 10 or more Years of Service. The amount of the Annuity Payment payable on the earlier Annuity Commencement Date will be equal to the Covered Life Amount multiplied by the appropriate conversion factor determined from the Tables of this Contract.

3.8Later Annuity Commencement Date

A Deferred Covered Life who continues in employment with the Employer beyond his or her unchanged Annuity Commencement Date cannot receive Annuity Payments on his or her unchanged Annuity Commencement Date. Instead, such Deferred Covered Life will receive Annuity Payments when his or her Annuity Commencement Date is changed to a later date. Subject to the last sentence of this paragraph, the later Annuity Commencement Date will be the earlier of (a) the first day of any month following a request from the Deferred Covered Life to commence Annuity Payments, subject to a valid election pursuant to Section 3.4 and provided he or she incurred a Separation From Service prior

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to the requested later Annuity Commencement Date and (b) the Required Beginning Date. The amount of the Annuity Payment payable on the later Annuity Commencement Date will equal the Covered Life Amount multiplied by the appropriate conversion factor determined from the Tables of this Contract.

Such Deferred Covered Life will not receive any Annuity Payments during the period beginning on the unchanged Annuity Commencement Date and ending on the day prior to the later Annuity Commencement Date. In the event such Deferred Covered Life dies prior to the determination of a later Annuity Commencement Date, his or her Annuity Payments will be cancelled and nothing will be payable in respect of such Deferred Covered Life under this Contract unless a Pre-Retirement Survivor Annuity described in Section 3.9 applies.

If there is a delay in commencing the Deferred Covered Life’s payments on his or her Required Beginning Date, Prudential will owe Annuity Payments retroactive to his or her Required Beginning Date. The amount of the Deferred Covered Life’s Annuity Payment will be equal to the amount that would have been payable had payments actually commenced on the Required Beginning Date. The Deferred Covered Life will also receive a one-time make-up payment to reflect any missed Annuity Payments for the period from the Required Beginning Date to the date of the actual make-up payment, credited with interest from the intended payment dates until the date of such make-up payment using an annual interest rate of [ ]%.

If a Deferred Covered Life incurred a Separation From Service before his or her unchanged Annuity Commencement Date and has not elected an earlier Annuity Commencement Date, Prudential will owe Annuity Payments beginning on his or her unchanged Annuity Commencement Date. Such Deferred Covered Life may not elect a later Annuity Commencement Date. If there is a delay in commencing the Deferred Covered Life’s payments on his or her unchanged Annuity Commencement Date, Prudential will owe Annuity Payments retroactive to his or her unchanged Annuity Commencement Date. The amount of the Deferred Covered Life’s Annuity Payment will be equal to the Covered Life Amount that would have been payable had payments actually commenced on the unchanged Annuity Commencement Date. The Deferred Covered Life will also receive a one-time make-up payment to reflect any missed Annuity Payments for the period from the unchanged Annuity Commencement Date to the date of the actual make-up payment, credited with interest from the intended payment dates until the date of such make-up payment using an annual interest rate of [ ]%.

3.9Pre-Retirement Survivor Annuity

If a Deferred Covered Life dies before his or her Annuity Commencement Date and has a surviving Spouse on the Deferred Covered Life’s death, an Annuity Payment will be owed to the Spouse for the remainder of his or her lifetime.

Prudential will make Annuity Payments to the surviving Spouse starting on the first day of the month on or next following the later of (i) the date the Deferred Covered Life would have become eligible for an earlier Annuity Commencement Date as set forth in Section 3.7 and (ii) the date of the Deferred Covered Life’s death. The Spouse may request to defer payment to a later date but not later than the Deferred Covered Life’s unchanged Annuity Commencement Date as shown on the Annuity Exhibits. Prudential’s last payment to the Spouse will be on the first day of the month in which the Spouse dies.

The amount owed to such Spouse will equal the amount the Spouse would have received assuming the 50% Joint and Survivor Life Annuity was in effect and payments commenced on the date specified in the previous paragraph.

If the present value of Annuity Payments payable to such Spouse is $5,000.00 or less, Prudential may make a lump sum payment in lieu of and in full settlement of the Annuity Payments due. The amount of the lump sum payment will be determined using the Applicable Interest Rate and Applicable Mortality Table.

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3.10Small Annuity Payments to Covered Lives

A lump sum payment, in lieu of, and in full settlement for, the Annuity Payments which would otherwise be payable to, or on behalf of, a Deferred Covered Life will be paid if the present value of the Annuity Payments is $5,000 or less.

During the period prior to the consummation of a Buy-Out Conversion and upon receiving notification from the Contract-Holder that a small annuity lump sum payment is payable, Prudential shall include the amount of such lump sum payment in a subsequent Aggregate Monthly Payment payable to the Contract- Holder.

After consummation of a Buy-Out Conversion, Prudential will make a small annuity lump sum payment that is due and payable directly to the Deferred Covered Life. The lump sum payment will be payable at any time administratively practical after the Deferred Covered Life incurs a Separation From Service.

The amount of the lump sum payment will be determined using the Applicable Interest Rate and Applicable Mortality Table.

3.11No Assignment by Covered Lives and Contingent Lives

Neither a Covered Life or Contingent Life nor such person’s Representative may (a) assign, pledge, transfer or otherwise alienate his or her rights under the Contract or their respective Annuity Form or an annuity certificate, or (b) enter into a transaction in which one or more Annuity Payments are anticipated or accelerated. Any attempt to do so shall be null and void at the outset, without any effect whatsoever. Also, to the maximum extent permitted by law, including but not limited to the relevant provisions of the Code, no Annuity Payment is subject to the claims of creditors. For the avoidance of doubt, compliance with the terms of a Qualified Domestic Relations Orders will not be considered to be an impermissible alienation under the Contract.

3.12Proof of Continued Existence for Life Annuities; Escheatment

As a condition to making any Annuity Payment arising from an Annuity Form dependent upon the continued existence of a Covered Life or Contingent Life, Prudential may require the receipt of evidence satisfactory to it that the Covered Life and/or the Contingent Life is alive and no such payment is owed under this Contract unless and until Prudential receives such evidence.

After consummation of a Buy-Out Conversion, if a Covered Life (or Contingent Life) in respect of whom remaining guaranteed payments are payable at the time of his or her death, dies without validly designating a Beneficiary, or if the Beneficiary is no longer living, Prudential may pay the “present value” (as such term is defined in Section 3.14) thereof in full settlement of its liability for such payments. Such present value may be paid to the estate of the Covered Life (or, Contingent Life, if applicable). After the period of time prescribed by applicable state law, any payments under a Period Certain Annuity or lump sum benefit that have been withheld under the terms of this Section 3.12 may be considered abandoned or escheatable property. In such case, Prudential will follow the laws applicable to the disposition of any remaining period certain payments or remaining lump sum benefit payable. Any payments made to the state under such circumstances will relieve Prudential of all further obligations under this Contract with respect to such Annuity Forms.

3.13Misstatements

The parties shall endeavor to agree to an equitable adjustment of the Total Contribution Amount caused by misstatements of (A) the date of birth, date of death, or the sex of a Covered Life or (if applicable) of a Contingent Life, or any other fact relevant to determining the amount or duration of the Annuity Payments owed by Prudential under the specified Annuity Form or the determination of the Total Contribution Amount charged by Prudential in respect to such Annuity Form or (B) the monthly

23

payment amount or Annuity Form specified in the Annuity Exhibits (when compared to such payment amounts or benefit forms owed by the Plan to its participants) (each, a “data misstatement”).

If, after such endeavors, equitable agreement is not reached between the Contract-Holder and Prudential with respect to such data misstatement, then with respect to misstatements described in (A) above Prudential will determine the portion of the Total Contribution Amount allocated to the Annuity Form for such Covered Life (and, if applicable, Contingent Life). The Annuity Payment owed by Prudential in respect of such Covered Life (and, if applicable, Contingent Life) will be increased or decreased to equal the amount that could have been purchased for such Covered Life (and, if applicable, Contingent Life) using the premium paid in respect of such Covered Life (and, if applicable, Contingent Life) assuming that the data misstatement had not occurred. Also, Prudential will not change the date of the first monthly payment. In making the preceding determinations and adjustments, Prudential in addition will use the following process:

(i)    If the corrected Annuity Payment owed by Prudential in respect of such Covered Life (and, if applicable, Contingent Life) is less than the Annuity Payment calculated using the data misstatement, then such Annuity Payment will be decreased to the amount calculated pursuant to this paragraph. Prudential may reduce future Annuity Payments further by amounts previously overpaid by Prudential.

(ii)    If the corrected Annuity Payment owed by Prudential in respect of such Covered Life (and, if applicable, Contingent Life) is more than the Annuity Payment calculated using the data misstatement, then such Annuity Payment will be increased to the amount calculated pursuant to this paragraph. Prudential will further pay the amount of the underpayments in one or more Annuity Payments owed by Prudential.

In addition to changing the amount of Annuity Payments, the adjustments made pursuant to this Section

3.13 may change other important terms of payment. For example, the Annuity Form for such Covered Life (or, if applicable, Contingent Life) may change, the percentage of the Annuity Payment owed by Prudential that is payable to the Contingent Life may change, and, whether there is any Contingent Life entitled to receive an Annuity Payment may change. All adjustments made pursuant to this Section 3.13 will be binding upon the Covered Life (and, if applicable, the Contingent Life). For the avoidance of doubt, the Annuity Exhibits will not be updated to reflect any actions taken by Prudential under this Section 3.13.

3.14Concerning Designations

After the consummation of a Buy-Out Conversion, a Covered Life may designate a Contingent Life or Beneficiary and redesignate a Beneficiary from time to time in such manner specified by Prudential and in accordance with such related Annuity Form. Prudential will furnish an acknowledgment of the acceptance of any such designation or re-designation. Any spousal consent requirements of ERISA as applied to employee benefit plan participants in effect from time to time will apply to such designations. Such designations will not require the consent of any prior Contingent Life or Beneficiary, provided the change complies with the requirements of ERISA as applied to employee benefit plan participants in effect from time to time. If an Annuity Form involving a Contingent Life or Spouse has become effective, the Contingent Life or Spouse may, unless the Covered Life has directed otherwise, change the Beneficiary at any time after the death of the Covered Life to the estate of the Contingent Life or Spouse, without the consent of such Beneficiary.

If there is no designated Beneficiary shown in Prudential’s records when an Annuity Payment is payable to a Beneficiary under the terms of this Contract, payment will be made to the Covered Life’s Spouse, if living, otherwise to the estate of the last surviving recipient of the Annuity Payments or a Representative thereof. However, if no executor is named for the estate of the last surviving recipient of the Annuity Payments, Prudential may, at its option, pay such amount which would otherwise be payable to an estate as described in the preceding sentence to any one or jointly to any number of the

24

following surviving relatives of the last surviving recipient of the Annuity Payments who appear to Prudential to be equitably entitled to payment because of expenses incurred in connection with the burial or last illness of such last surviving recipient of the Annuity Payments: children, parents, brothers, or sisters. Any payment described in this paragraph and made by Prudential will, to the extent of such payment, be a valid discharge of its obligation under this Contract.

The parties agree with each other that the acceptability of such designations and re-designations of Beneficiaries will meet the requirements of ERISA as applied to employee benefit plan participants in effect from time to time, and shall keep their records accordingly. Such designations shall be effective when they are accepted by Prudential and the applicable records are updated.

Prudential, in determining the existence, identity, ages, or any other facts relating to any relatives of any Covered Life (or Contingent Life) or any persons designated as Beneficiaries, either as a class or otherwise, may rely solely on any affidavit or other evidence deemed reasonably satisfactory by it. Any payment made by Prudential in reliance thereon will, to the extent of such payment, be a valid discharge of its obligation under this Contract.

Should any remaining Annuity Payments become payable to a Beneficiary under an Annuity Form that provides a Guaranteed Number of Payments, Prudential may pay the present value of such Annuity Payments to the Beneficiary if (i) the monthly amount of the payments payable to the Beneficiary is less than $[***] or (ii) the Beneficiary is other than a natural person receiving payments in his or her own right.

The present value will be in lieu of and in full settlement for the Annuity Payments which would otherwise be payable under this Contract. The “present value” of Annuity Payments, as of any date of determination, means the single sum equivalent to the present value of such payments using the Applicable Interest Rate.

3.15Concerning Qualified Domestic Relations Orders

After the consummation of a Buy-Out Conversion, if an Annuity Payment is subject to a domestic relations order (as defined in subsection 414(p) of the Code), the Contract Holder will cooperate with Prudential to provide any reasonably necessary or otherwise requested information in connection with all Qualified Domestic Relations Orders in effect with respect to Covered Lives. For any domestic relations order not qualified prior to the consummation of a Buy-Out Conversion, no adjustments or payments to a Covered Life or to an alternate payee pursuant to such order will become payable until (i) Prudential has so received any such domestic relations order, (ii) Prudential has received a copy of the domestic relations order after it has been qualified by the Contract-Holder/Employer or Prudential has so qualified the domestic relations order and (iii) Prudential has so approved the domestic relations order. Any such Annuity Payment adjustment will take effect when entered upon Prudential's records.

3.16Payments to Representatives

Prudential may withhold Annuity Payments owed to any Covered Life or Contingent Life or Beneficiary if, in the judgment of Prudential, such person is incapable for any reason of personally receiving and giving a valid receipt for such payment. In such case, Prudential may discharge its obligation to any Covered Life or Contingent Life or Beneficiary by making payments to such person’s Representative. Prudential may pay to the Representative of a Covered Life or Contingent Life or Beneficiary amounts otherwise owed to such Covered Life or Contingent Life or Beneficiary if Prudential receives satisfactory evidence of such Representative’s authority. Any amount paid in accordance with this Section 3.16 will completely discharge the liability of Prudential for the amount paid.

25

3.17Certificates

After consummation of a Buy-Out Conversion, upon receipt of applicable regulatory approvals, Prudential will issue each Covered Life (and, if receiving Annuity Payments on the date annuity certificates are issued, a Contingent Life) an annuity certificate. Each such certificate will set forth in substance the payments to which each Covered Life (and, if applicable, a Contingent Life) is entitled under this Contract. Also, Prudential may issue a substitute annuity certificate to correct errors contained in the previously issued certificate, whereupon the previously issued annuity certificate shall be null and void.

Each annuity certificate shall provide that only the Covered Life (and, if applicable, a Contingent Life) has the right to Annuity Payments under this Contract, and that such right to Annuity Payments is enforceable by the certificate-holder solely against Prudential and against no other person including the Plan, the Contract-Holder, or any affiliate thereof. Each certificate shall describe the consequences of any misstatements of age or other relevant fact, including Prudential’s rights and obligations relating to such misstatements.

The rights of Covered Lives and Contingent Lives under this Contract are not conditioned upon the issuance of annuity certificates, and any delay in issuing an annuity certificate to such Covered Life or Contingent Life does not delay the date on which the Covered Life or Contingent Life begins to have third-party beneficiary rights under this Contract.

26

Provision IV    General Terms

4.1Communications

All communications to Prudential regarding this Contract shall be addressed to Prudential’s Office.

Communications to Contract-Holder and Employer will be addressed as shown in our records, as updated from time to time on Prudential’s records based on notice provided by the Contract-Holder or Employer to Prudential.

All communications to Contract-Holder, Employer or Prudential will be in writing.

4.2Currency; Payments

All moneys, whether payable to or by Prudential, shall be in lawful money of the United States of America. Dollars and cents refer to lawful currency of the United States of America. Payments owed to Prudential or to Contract-Holder shall be made pursuant to agreed procedures and wire instructions.

4.3Reliance on Records; Correction of Errors

Contract-Holder will furnish all information which Prudential may reasonably require for the administration of this Contract. If Contract-Holder/Employer cannot furnish any required item of information, Prudential may (but is not required to) ask, after consummation of a Buy-Out Conversion, the relevant Covered Life, Contingent Life or Beneficiary to provide such information. Prudential will not be obligated to make Annuity Payments in any way dependent upon such information unless and until it receives all information necessary to fulfill its obligation.

Prudential will maintain the records necessary for its administration of this Contract. Such records will be prepared using the information furnished to it pursuant to this Contract and will constitute prima facie evidence as to the truth of the information recorded thereon. However, Prudential reserves the right to correct its records to eliminate erroneous information furnished to it and to reflect information it gathers reasonably believed by it to be reliable. Prudential may assume the accuracy of Contract- Holder’s records in connection with Covered Lives, Contingent Lives and Beneficiaries. Any payment made by Prudential in reliance on such records shall be a valid discharge of its obligation under this Contract.

4.4Contract-Holder; Successor

Prudential will be entitled to rely on any action taken or omitted by or on behalf of Contract-Holder pursuant to the terms of this Contract and shall not be required to obtain consents of any other person or organization with an interest in the Plan, except as provided in Section 1.9. With Prudential’s consent, Contract-Holder may authorize representatives of the Plan, Employer or others to act on its behalf under this Contract. Prudential is entitled to rely on Contract-Holder (or its representative) in connection with the administration of this Contract. Contract-Holder at any time may, with the consent of Prudential, appoint a successor Contract-Holder, provided that if the successor Contract-Holder is a trustee for the Plan, such consent shall not be unreasonably withheld. Any such successor Contract-Holder will have all the rights, duties, and obligations of Contract-Holder. If Contract-Holder notifies Prudential that it will cease to exist or cease to perform the duties of Contract-Holder hereunder and no successor Contract-Holder is appointed, the Contract-Holder will thereafter have no rights or obligations under this Contract but this Contract shall nevertheless remain in full force and effect until the date on which there ceases to be any further Annuity Payments payable in accordance with the terms of this Contract.

27

4.5No Implied Waiver

Except as expressly provided herein, any party's failure to insist in any one or more instances upon strict performance by any other party of any of the terms of this Contract shall not be construed as a waiver of any continuing or subsequent failure to perform or delay in performance of any term hereof.

4.6Changes

(a)    Mutual Agreement. This Contract may be amended at any time by written agreement between Prudential, Employer and Contract-Holder.

(b)    Law or Regulation. Prudential may change this Contract as it deems necessary or appropriate to satisfy the requirements of any law enacted by (or of any regulation promulgated by) any legislative or governmental authority, body or agency.

(c)    Absence of Contract-Holder. If Contract-Holder notifies Prudential that it will cease to exist, or cease to perform the duties of Contract-Holder hereunder, and no successor to Contract-Holder is appointed, then this Contract can thereafter be changed at any time by Prudential in its discretion, but subject to the rights of each Covered Life, Contingent Life and Beneficiary to receive Annuity Payments (as provided in Section 1.9).

4.7Entire Contract - Construction

This Contract, together with the exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter of this Contract and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Contract.

This Contract will be construed according to the laws of the jurisdiction set forth on the Cover Page without regard to the principles of conflicts of laws thereof except to the extent that those laws have been preempted by the laws of the United States of America.

4.8Third Party Beneficiaries

Except as expressly set forth in Sections 1.9 and 1.10, this Contract does not and is not intended to confer any rights or remedies upon any person other than the Contract-Holder.

28

GA-XXXXXX

TABLES

The following Tables provide the conversion factors or actuarial basis that will be used to determine the factors under this Contract.

GA-XXXXXX

CASH AND TRANSFERRED ASSETS EXHIBIT As of MM DD, YYYY

[***]

GA-XXXXXX

ANNUITY EXHIBITS

The Annuity Exhibits list each Covered Life, Contingent Life or other person entitled to payments under this Contract plus information that applies to each such Covered Life, Contingent Life or other person. The Annuity Exhibits are attached to and made a part of this Contract in the form of the data file titled [“file name.xlsx”], provided by the Contract-Holder to Prudential by post to the [name of website] secure website on [MM DD YYYY].

Confidential - Subject to NDA

Schedule 2

to

Commitment Agreement

[***]

[***] [***] [***] [***] [***] [***] [***] [***] [***] [***]

Confidential – Subject to NDA

Schedule 3

to

Commitment Agreement

[***]

[***]

1.    [***]

2.    [***]

a.    [***]

b.    [***]

c.    [***]

d.    [***]

3.    [***]

4.    [***]

5.    [***]

6.    [***]

7.    [***]

8.    [***]

Confidential – Subject to NDA

Schedule 4

to

Commitment Agreement

[***]

[***] [***] [***] [***] [***] [***]

Confidential – Subject to NDA

Schedule 5

to

Commitment Agreement

INVESTMENT MANAGERS AND INVESTMENT ADVISERS

1.    Jennison Associates LLC

Doing Business As:

•Jennison

•Jennison Associates

2.    QMA LLC

Doing Business As:

•QMA

Formerly Known As:

•Quantitative Management Associates LLC

3.    PGIM, Inc.

Doing Business As:

•PGIM Investments

•Prudential Capital Group

•PGIM Fixed Income

•PGIM

•Prudential Financial, Inc.

•Prudential Real Estate Fixed Income Investors

•PRICOA Capital Group

•Prudential Capital Partners

•PRICOA Capital Partners

•PGIM Institutional Advisory & Solutions

•PGIM Real Estate

•PGIM Private Capital

•Pramerica Capital Energy Partners

•PGIM Global Partners

4.    The Prudential Insurance Company of America

Doing Business As:

•Prudential Financial, Inc.

5.    Prudential Trust Company

6.    Prudential Retirement Insurance and Annuity Company

7.    PGIM Limited

Doing Business As:

•PGIM Fixed Income

•PGIM Real Estate

•PGIM Real Estate Finance

Confidential - Subject to NDA

8.    PGIM Real Estate (UK) Limited

Formerly Known As:

•PGIM Fund Management Limited

Doing Business As:

•PGIM Real Estate

9.    Global Portfolio Strategies, Inc.

10.    PGIM Investments LLC

Formerly Known As:

•Prudential Investments LLC

11.    PGIM Private Placement Investors, L.P.

Formerly Known As:

•Prudential Private Placement Investors, L.P.

12.    AST Investment Services, Inc.

13.    Prudential International Investment Advisers, LLC

Doing Business As:

•PGIM Global Partners

14.    Pruco Securities LLC

Doing Business As:

•Prudential Financial Planning Services

15.    PGIM Real Estate Finance, LLC

Doing Business As:

•PGIM Real Estate Finance

•Prudential Agricultural Investments

Formerly Known As:

•PRICOA Mortgage Capital Company

•Prudential Mortgage Capital Company

16.    PGIM Real Estate Luxembourg S.A.

17.    QMA Wadhwani LLP

Formerly Known As:

•Wadhwani Asset Management LLP

18.    Prudential Customer Solutions LLC

Confidential - Subject to NDA

Schedule 6

to

Commitment Agreement

STATE INSURANCE GOVERNMENTAL AUTHORITIES

The Insurer will use commercially reasonable efforts to obtain approval of the annuity certificates from the applicable insurance regulatory authorities in the following jurisdictions, if approval is required:

1.    Arkansas

2.    Florida

3.    Idaho

4.    Iowa

5.    Louisiana

6.    Minnesota

7.    Mississippi

8.    Missouri

9.    Montana

10.    New Hampshire

11.    North Dakota

12.    Ohio

13.    Oklahoma

14.    Puerto Rico

15.    South Dakota

16.    Texas

17.    Utah (if more than 25% of the annuitants reside in UT)

18.    Vermont

19.    Washington

20.    West Virginia

21.    Wisconsin (if more than 25% of the annuitants reside in WI)

Confidential – Subject to NDA

Schedule 7

to

Commitment Agreement

ADMINISTRATION AND TRANSFER

This Schedule 7 sets forth the actions that the Company and the Insurer will take or cause to be taken at the times identified in the table below. All Delivery Dates after the first Delivery Date assume the prior delivery, to a party responsible for a subsequent deliverable, of relevant materials needed from other parties, on or prior to the required Delivery Dates set forth below, including cooperation of other parties in resolving any open issues.

Defined Terms

“Check Register” means an electronic file showing gross amounts, net amounts and deductions with respect to payments to each Payee. Dates shown for the Check Register can be changed if mutually agreed upon.

“Data Load File” means the file as extracted from the Insurer’s recordkeeping systems and reflected in a report provided to the Plan and the Company.

“Data Load File Sign-Off” means the written confirmation by the Plan that the Data Load File accurately reflects the data provided.

“Final Production Data File” means the complete production data file, as populated based on information from the recordkeeper’s internal system.

“Update File” means an itemized list of updates that should be made to the file that was last delivered.

Confidential – Subject to NDA

Deliverable	Delivery Date	Action by the Company/Plan	Action by the Insurer
Final Production Data File	March 30, 2022	Deliver Final Production Data File	Receive Final Production Data File
Update File	April 21, 2022	Deliver Update File	Receive Update File
Data Load File (related to Final Production Data File for Retirees)	April 28, 2022	Receive Data Load File	Deliver Data Load File
Data Load File (related to Final Production Data File for Deferreds)	May 5, 2022	Receive Data Load File	Deliver Data Load File
Data Load File Sign-Off (related to Final Production Data File for Retirees)	May 5, 2022	Approve Data Load File	Receive Data Load File Sign-Off
Update File	May 6, 2022	Deliver Update File	Receive Update File
Data Load File Sign-Off (related to Final Production Data File for Deferreds)	May 12, 2022	Approve Data Load File	Receive Data Load File Sign-Off
Reimbursement File (as of June 1, 2022) and Change in Status Report	May 19, 2022	Deliver Reimbursement File and Change in Status Report	Receive Reimbursement File and Change in Status Report
Aggregate Monthly Payment (for June 1, 2022)	May 26, 2022	Receive Payment	Pay the Aggregate Monthly Payment to Plan Administrator

Confidential – Subject to NDA

Schedule 8

to

Commitment Agreement

GAC TRUE-UP PREMIUMS

This Schedule provides a description of the methodologies and procedures by which the Insurer will calculate the GAC Issuance True-Up Premium and the Post-GAC Issuance True-Up Premium.

[***]

1

Confidential – Subject to NDA

Schedule 9

to

Commitment Agreement

ARBITRATION DISPUTE RESOLUTION

1.    Availability of Arbitration. Arbitration is available as a means of dispute resolution only to the extent the Commitment Agreement explicitly states that a party may commence arbitration in accordance with this Schedule. Absent such explicit authorization, arbitration is not available unless all necessary parties agree.

2.    Rules and Procedures. Where the Commitment Agreement explicitly states that arbitration is available as a means of dispute resolution for a dispute between the parties, such dispute shall be resolved by arbitration conducted by three arbitrators, and shall be administered by JAMS (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules, as such rules and procedures are in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties.

3.    Location. The seat of the arbitration shall be New York City, New York, at a mutually agreed upon location, or in the absence of agreement, at the New York City offices of JAMS.

4.    Arbitrators. There will be three arbitrators who will each have no less than ten (10) years of life insurance or life reinsurance industry experience in the subject business of this Commitment Agreement. The arbitrators shall not be under the control of any party, nor shall any member of the panel have a financial interest in the outcome of the dispute. The arbitrators will be selected in accordance with the applicable procedures set forth by JAMS, except as such procedures may be modified herein or by mutual agreement of the parties.

5.    Procedures. The submission of any briefs, responses or evidence in connection with the arbitration dispute shall be subject to the applicable rules of JAMS, except as they may be modified by mutual agreement of the parties. The parties shall maintain the confidential nature of the arbitration proceeding, any hearing and the ultimate award, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision.

6.    Pricing Assumptions. The Insurer shall not be obligated under any circumstance to disclose any pricing assumptions used to develop any Premium Amount or any GAC True-Up Premium pursuant to this Schedule 9.

7.    Damages. The arbitrators shall resolve any arbitration dispute within the range of difference between (a) any amounts or values as calculated or determined by the Insurer and (b) any amounts or values as calculated or determined by the Company.

1

Confidential – Subject to NDA

The arbitrators will have no authority to award any other damages other than as provided for herein.

8.    Judgment. Any arbitration award shall be final and binding on the parties; provided that either party may appeal an arbitration award that is arbitrary and capricious or clearly erroneous. The parties undertake to carry out any award without delay and waive their respective rights to any form of recourse based on grounds other than personal conflict of interest of any arbitrator that was undisclosed at the time of the arbitrator’s appointment. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the parties, as applicable, or their respective assets.

9.    Costs. The Company and the Insurer shall share the fees and disbursements of the arbitrators equally (i.e., on a 50%/50% basis). The parties shall each bear their own costs and expenses incurred in connection with prosecuting and/or defending any arbitration dispute.

10.    Amended Schedules. If applicable, the parties will promptly amend the Schedules hereto to reflect any arbitration decision.

2

Confidential – Subject to NDA

Schedule 10

to

Commitment Agreement

RBC RATIO CALCULATION

The Insurer’s normal-course RBC Ratio preparation is completed in a reasonable manner, using reasonable assumptions and in accordance with prevailing regulatory standards. [***]

Such projected RBC Ratios are completed in accordance with methodologies prescribed by the National Association of Insurance Commissioners (“NAIC”) for the calculation of company action level risk-based capital and total adjusted capital. The NAIC publishes detailed instructions annually for calculating year-end reported company action level risk-based capital ratios using company action level risk-based capital and total adjusted capital (NAIC Life Risk-Based Capital Report Including Overview and Instructions for Companies). The Insurer’s RBC Ratio utilizes the same formula as these instructions[***]. Such projections also incorporate NAIC changes to the extent the Insurer expects that these changes are expected to be adopted by the NAIC and effective for the forecasted period.

1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, James C. Grech, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Peabody Energy Corporation (“the registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2022

/s/ James C. Grech

James C. Grech

President and Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Mark A. Spurbeck, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Peabody Energy Corporation (“the registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2022

/s/ Mark A. Spurbeck

Mark A. Spurbeck

Executive Vice President and Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, James C. Grech, President and Chief Executive Officer of Peabody Energy Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Peabody Energy Corporation.

Dated: May 5, 2022

/s/ James C. Grech 

James C. Grech

President and Chief Executive Officer 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, Mark A. Spurbeck, Executive Vice President and Chief Financial Officer of Peabody Energy Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Peabody Energy Corporation.

Dated: May 5, 2022

/s/ Mark A. Spurbeck

Mark A. Spurbeck

Executive Vice President and Chief Financial Officer 

EX-95

Exhibit 95

Mine Safety Disclosures

The following disclosures are provided pursuant to Securities and Exchange Commission (SEC) regulations, which require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate coal mines regulated under the Federal Mine Safety and Health Act of 1977 (the Mine Act). The disclosures reflect United States (U.S.) mining operations only, as these requirements do not apply to our mines operated outside the U.S. 

Mine Safety Information. Whenever the Mine Safety and Health Administration (MSHA) believes that a violation of the Mine Act, any health or safety standard, or any regulation has occurred, it may issue a violation which describes the associated condition or practice and designates a timeframe within which the operator must abate the violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until hazards are corrected. Whenever MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the violation that the operator is ordered to pay. Citations and orders can be contested and appealed and, as part of that process, are often reduced in severity and amount, and are sometimes vacated. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the company and mine. Since MSHA is a branch of the U.S. Department of Labor, its jurisdiction applies only to our U.S. mines. As such, the mine safety disclosures that follow contain no information for our Australian mines.

The table that follows reflects citations and orders issued to us by MSHA during the three months ended March 31, 2022, as reflected in our systems. The table includes only those mines that were issued orders or citations during the period presented and, commensurate with SEC regulations, does not reflect orders or citations issued to independent contractors working at our mines. Due to timing and other factors, our data may not agree with the mine data retrieval system maintained by MSHA. The proposed assessments for the three months ended March 31, 2022 were taken from the MSHA system as of April 29, 2022.

Additional information about MSHA references used in the table is as follows:

•Section 104 S&S Violations: The total number of violations received from MSHA under section 104(a) of the Mine Act that could significantly and substantially contribute to a serious injury if left unabated.

•Section 104(b) Orders: The total number of orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

•Section 104(d) Citations and Orders: The total number of citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.

•Section 104(e) Notices: The total number of notices issued by MSHA under section 104(e) of the Mine Act for a pattern of violations that could contribute to mine health or safety hazards.

•Section 110(b)(2) Violations: The total number of flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

•Section 107(a) Orders: The total number of orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an imminent danger existed.

•Proposed MSHA Assessments: The total dollar value of proposed assessments from MSHA.

•Fatalities: The total number of mining-related fatalities.

Three Months Ended March 31, 2022

	Section 104 S&S Violations	Section 104(b) Orders	Section 104(d) Citations and Orders	Section 104(e) Pattern of Violations	Section 110(b)(2) Violations	Section 107(a) Orders	($) Proposed MSHA Assessments
Mine (1)								Fatalities
							(In thousands)
Seaborne Metallurgical Mining
Shoal Creek Mine	44	—	6	—	10	—	104.1	—
Powder River Basin Mining
Caballo	5	—	—	—	1	—	0.1	—
North Antelope Rochelle	3	—	—	—	—	—	4.3	—
Rawhide	—	—	—	—	—	—	0.4	—
Other U.S. Thermal Mining
Bear Run	3	—	—	—	—	—	1.9	—
El Segundo	—	—	—	—	—	—	0.3	—
Francisco Underground	1	—	—	—	—	—	0.7	—
Gateway North	5	—	—	—	1	—	16.7	—
Gateway Preparation Plant	—	—	—	—	—	—	0.1	—
Kayenta	1	—	—	—	—	—	—	—
Somerville Central	1	—	—	—	—	—	—	—
Twentymile (Foidel Creek Mine)	1	—	—	—	4	—	11.3	—

(1)The definition of "mine" under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting coal, such as land, structures, facilities, equipment, machines, tools and coal preparation facilities. Also, there are instances where the mine name per the MSHA system differs from the mine name utilized by us. Where applicable, we have parenthetically listed the name of the mine per the MSHA system. Also, all U.S. mines are listed alphabetically within each of our mining segments.

Pending Legal Actions. The Federal Mine Safety and Health Review Commission (the Commission) is an independent adjudicative agency that provides administrative trial and appellate review of legal disputes arising under the Mine Act. These cases may involve, among other questions, challenges by operators to citations, orders and penalties they have received from MSHA, or complaints of discrimination by miners under section 105 of the Mine Act. The following is a brief description of the types of legal actions that may be brought before the Commission.

•Contests of Citations and Orders: A contest proceeding may be filed with the Commission by operators, miners or miners’ representatives to challenge the issuance of a citation or order issued by MSHA, including citations related to disputed provisions of operators' emergency response plans.

•Contests of Proposed Penalties (Petitions for Assessment of Penalties):A contest of a proposed penalty is an administrative proceeding before the Commission challenging a civil penalty that MSHA has proposed for the violation. Such proceedings may also involve appeals of judges' decisions or orders to the Commission on proposed penalties, including petitions for discretionary review and review by the Commission on its own motion.

•Complaints for Compensation:A complaint for compensation may be filed with the Commission by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due miners idled by the orders.

•Complaints of Discharge, Discrimination or Interference:A discrimination proceeding is a case that involves a miner’s allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint. This category includes temporary reinstatement proceedings, which involve cases in which a miner has filed a complaint with MSHA stating he or she has suffered discrimination and the miner has lost his or her position.

•Applications for Temporary Relief: An application for temporary relief from any modification or termination of any order or from any order issued under certain subparts of section 104 of the Mine Act may be filed with the Commission at any time before such order becomes final.

The table that follows presents information by mine regarding pending legal actions before the Commission at March 31, 2022. Each legal action is assigned a docket number by the Commission and may have as its subject matter one or more citations, orders, penalties or complaints.

	Pending Legal Actions						Legal Actions Initiated During the Three Months Ended March 31, 2022	Legal Actions Resolved During the Three Months Ended March 31, 2022
	Number of Pending Legal Actions as of March 31, 2022	Pre-Penalty Contests of Citations/Orders	Contests of Penalty Assessment(2)	Complaints for Compensation	Complaints of Discharge, Discrimination or Interference	Applications for Temporary Relief
Mine (1)
Seaborne Metallurgical Mining
Shoal Creek Mine	4	—	4	—	—	—	3	4
Other U.S. Thermal Mining
Francisco Underground	5	—	5	—	—	—	1	—
Twentymile (Foidel Creek)	—	—	—	—	—	—	—	1

(1)The definition of "mine" under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting coal, such as land, structures, facilities, equipment, machines, tools and coal preparation facilities. Also, there are instances where the mine name per the MSHA system differs from the mine name utilized by us. Where applicable, we have parenthetically listed the name of the mine per the MSHA system. Also, all U.S. mines are listed alphabetically within each of our mining segments.

(2)Contests included a total of 2 appeals of judge's decisions or orders to the Commission as of March 31, 2022.

XML

Cover Page - shares shares in Millions	3 Months Ended
	Mar. 31, 2022	Apr. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	1-16463
Entity Registrant Name	PEABODY ENERGY CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-4004153
Entity Address, Address Line One	701 Market Street,
Entity Address, City or Town	St. Louis,
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63101-1826
City Area Code	314
Local Phone Number	342-3400
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	BTU
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Bankruptcy Proceedings, Reporting Current	true
Entity Common Stock, Shares Outstanding		143.8
Entity Central Index Key	0001064728
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 691.4	$ 651.3
Costs and expenses
Operating costs and expenses (exclusive of items shown separately below)	699.0	582.6
Depreciation, depletion and amortization	72.9	68.3
Asset retirement obligation expenses	15.0	15.9
Selling and administrative expenses	23.1	21.7
Restructuring charges	1.6	2.1
Other operating (income) loss:
Net (gain) loss on disposals	(4.9)	0.6
(Income) loss from equity affiliates	(44.7)	0.9
Operating loss	(70.6)	(40.8)
Interest expense	39.4	52.4
Net loss (gain) on early debt extinguishment	23.5	(3.5)
Interest income	(0.5)	(1.5)
Net periodic benefit credit, excluding service cost	(12.2)	(8.7)
Loss from continuing operations before income taxes	(120.8)	(79.5)
Income tax benefit	(1.0)	(1.8)
Loss from continuing operations, net of income taxes	(119.8)	(77.7)
Loss from discontinued operations, net of income taxes	(0.8)	(2.0)
Net loss	(120.6)	(79.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)	0.4
Net loss attributable to common stockholders	$ (119.5)	$ (80.1)
Loss from continuing operations:
Basic loss per share	$ (0.87)	$ (0.79)
Diluted loss per share	(0.87)	(0.79)
Net loss attributable to common stockholders:
Basic loss per share	(0.88)	(0.81)
Diluted loss per share	$ (0.88)	$ (0.81)

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (120.6)	$ (79.7)
Postretirement plans (net of $0.0 tax provisions in each period)	(13.4)	(11.0)
Foreign currency translation adjustment	1.9	(0.2)
Other comprehensive loss, net of income taxes	(11.5)	(11.2)
Comprehensive loss	(132.1)	(90.9)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)	0.4
Comprehensive loss attributable to common stockholders	$ (131.0)	$ (91.3)

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	$ 0.0	$ 0.0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 823.3	$ 954.3
Restricted cash	24.7	0.0
Accounts receivable, net of allowance for credit losses of $0.0 at March 31, 2022 and December 31, 2021	357.4	350.5
Inventories, net	269.1	226.7
Other current assets	331.8	270.2
Total current assets	1,806.3	1,801.7
Property, plant, equipment and mine development, net	2,903.3	2,950.6
Operating lease right-of-use assets	33.0	35.5
Investments and other assets	201.2	162.0
Total assets	4,943.8	4,949.8
Current liabilities
Current portion of long-term debt	19.1	59.6
Accounts payable and accrued expenses	798.2	872.1
Total current liabilities	817.3	931.7
Long-term debt, less current portion	1,079.0	1,078.2
Deferred income taxes	20.9	27.3
Asset retirement obligations	659.5	654.8
Accrued postretirement benefit costs	209.6	212.1
Operating lease liabilities, less current portion	24.6	27.2
Other noncurrent liabilities	236.0	197.7
Total liabilities	3,046.9	3,129.0
Stockholders’ equity
Additional paid-in capital	3,969.5	3,745.6
Treasury stock, at cost — 43.2 and 43.0 common shares as of March 31, 2022 and December 31, 2021	(1,372.3)	(1,370.3)
Accumulated deficit	(1,032.7)	(913.2)
Accumulated other comprehensive income	286.4	297.9
Peabody Energy Corporation stockholders’ equity	1,852.8	1,761.8
Noncontrolling interests	44.1	59.0
Total stockholders’ equity	1,896.9	1,820.8
Total liabilities and stockholders’ equity	$ 4,943.8	$ 4,949.8
Treasury stock, shares (in shares)	43,200,000	43,000,000.0
Preferred Stock
Stockholders’ equity
Preferred Stock — $0.01 per share par value; 100.0 shares authorized, no shares issued or outstanding as of March 31, 2022 and December 31, 2021	$ 0.0	$ 0.0
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000.0	100,000,000.0
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series Common Stock
Stockholders’ equity
Common Stock — $0.01 per share par value; 450.0 shares authorized, 187.0 shares issued and 143.8 shares outstanding as of March 31, 2022 and 176.3 shares issued and 133.3 shares outstanding as of December 31, 2021	$ 0.0	$ 0.0
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000.0	50,000,000.0
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0
Common Stock
Stockholders’ equity
Common Stock — $0.01 per share par value; 450.0 shares authorized, 187.0 shares issued and 143.8 shares outstanding as of March 31, 2022 and 176.3 shares issued and 133.3 shares outstanding as of December 31, 2021	$ 1.9	$ 1.8
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,000,000.0	450,000,000.0
Common stock, shares issued (in shares)	187,000,000.0	176,300,000
Common stock, shares outstanding (in shares)	143,800,000	133,300,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets
Allowance for credit losses	$ 0.0	$ 0.0
Stockholders' equity
Treasury stock, shares (in shares)	43,200,000	43,000,000.0
Preferred Stock
Stockholders' equity
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000.0	100,000,000.0
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series Common Stock
Stockholders' equity
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000.0	50,000,000.0
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0
Common Stock
Stockholders' equity
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	450,000,000.0	450,000,000.0
Common stock, shares issued (in shares)	187,000,000.0	176,300,000
Common stock, shares outstanding (in shares)	143,800,000	133,300,000

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Cash Flows From Operating Activities
Net loss	$ (120.6)	$ (79.7)
Loss from discontinued operations, net of income taxes	0.8	2.0
Loss from continuing operations, net of income taxes	(119.8)	(77.7)
Adjustments to reconcile loss from continuing operations, net of income taxes to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	72.9	68.3
Noncash interest expense, net	3.8	4.9
Deferred income taxes	(6.4)	(0.4)
Noncash share-based compensation	2.0	1.8
Net (gain) loss on disposals	(4.9)	0.6
Net loss (gain) on early debt extinguishment	23.5	(3.5)
(Income) loss from equity affiliates	(44.7)	0.9
Foreign currency option contracts	(3.3)	2.9
Changes in current assets and liabilities:
Accounts receivable	(6.9)	77.0
Inventories	(42.4)	20.3
Other current assets	(80.0)	1.6
Accounts payable and accrued expenses	(28.4)	(15.4)
Collateral arrangements	(28.7)	(5.3)
Asset retirement obligations	4.7	8.1
Workers’ compensation obligations	(0.6)	0.6
Postretirement benefit obligations	(15.9)	(13.4)
Pension obligations	(0.6)	2.8
Other, net	3.2	0.0
Net cash (used in) provided by continuing operations	(272.5)	74.1
Net cash used in discontinued operations	(1.2)	(3.1)
Net cash (used in) provided by operating activities	(273.7)	71.0
Cash Flows From Investing Activities
Additions to property, plant, equipment and mine development	(29.7)	(50.3)
Changes in accrued expenses related to capital expenditures	(7.0)	(11.4)
Proceeds from disposal of assets, net of receivables	3.6	0.9
Contributions to joint ventures	(126.6)	(136.1)
Distributions from joint ventures	148.2	102.4
Cash receipts from Middlemount Coal Pty Ltd and other related parties	47.2	2.3
Other, net	(0.5)	(1.0)
Net cash provided by (used in) investing activities	35.2	(93.2)
Cash Flows From Financing Activities
Proceeds from long-term debt	545.0	0.0
Repayments of long-term debt	(599.9)	(40.2)
Payment of debt issuance and other deferred financing costs	(19.2)	(22.5)
Proceeds from common stock issuances, net of costs	222.0	0.0
Repurchase of employee common stock relinquished for tax withholding	(2.0)	(0.6)
Distributions to noncontrolling interests	(13.8)	(0.1)
Other, net	0.1	0.1
Net cash provided by (used in) financing activities	132.2	(63.3)
Net change in cash, cash equivalents and restricted cash	(106.3)	(85.5)
Cash, cash equivalents and restricted cash at beginning of period	954.3	709.2	$ 709.2
Cash, cash equivalents and restricted cash at end of period	$ 848.0	$ 623.7	$ 954.3

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Millions	Total	Common Stock	Additional paid-in capital	Treasury stock	Accumulated deficit	Total Accumulated Other Comprehensive Income	Noncontrolling interests
Balance, beginning of period at Dec. 31, 2020		$ 1.4	$ 3,364.6	$ (1,368.9)	$ (1,273.3)	$ 205.8	$ 51.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation for equity-classified awards			1.8
Common stock issuances, net of costs			0.0
Net loss	$ (79.7)				(80.1)		0.4
Repurchase of employee common stock relinquished for tax withholding	0.6			(0.6)
Postretirement plans (net of $0.0 tax provisions in each period)	(11.0)					(11.0)
Foreign currency translation adjustment	(0.2)					(0.2)
Distributions to noncontrolling interests							(0.1)
Common stock issuances, net of costs		0.0
Balance, end of period at Mar. 31, 2021	891.5	1.4	3,366.4	(1,369.5)	(1,353.4)	194.6	52.0
Balance, beginning of period at Dec. 31, 2021	1,820.8	1.8	3,745.6	(1,370.3)	(913.2)	297.9	59.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation for equity-classified awards			2.0
Common stock issuances, net of costs			221.9
Net loss	(120.6)				(119.5)		(1.1)
Repurchase of employee common stock relinquished for tax withholding	2.0			(2.0)
Postretirement plans (net of $0.0 tax provisions in each period)	(13.4)					(13.4)
Foreign currency translation adjustment	1.9					1.9
Distributions to noncontrolling interests							(13.8)
Common stock issuances, net of costs		0.1
Balance, end of period at Mar. 31, 2022	$ 1,896.9	$ 1.9	$ 3,969.5	$ (1,372.3)	$ (1,032.7)	$ 286.4	$ 44.1

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	$ 0.0	$ 0.0
Total Accumulated Other Comprehensive Income
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax	$ 0.0	$ 0.0

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Basis of Presentation

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements include the accounts of Peabody Energy Corporation (PEC) and its consolidated subsidiaries and affiliates (along with PEC, the Company or Peabody). 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 a 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 unaudited condensed consolidated financial statements. All intercompany transactions, profits and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, these financial statements reflect all normal, recurring adjustments necessary for a fair presentation. Balance sheet information presented herein as of December 31, 2021 has been derived from the Company’s audited consolidated balance sheet at that date. The Company’s results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for future quarters or for the year ending December 31, 2022.

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Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

3 Months Ended

Mar. 31, 2022

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented [Abstract]

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

Newly Adopted Accounting Standards

Convertible Debt. In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under Accounting Standards Codification Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and can be adopted on either a fully retrospective or modified retrospective basis. The Company adopted ASU 2020-06, effective January 1, 2022. In the Company’s accompanying condensed consolidated balance sheets, the adoption of the new standard impacted the accounting for the Company’s $320.0 million of convertible debt issued in March 2022, as further described in Note 11. “Long-term Debt.” In particular, because the related senior notes have cash conversion features, bifurcation of the principal balance between debt and equity is no longer applicable. Additionally, this guidance will require the application of the “if-converted” method to calculate the impact of convertible instruments on diluted earnings per share, which may increase their dilutive impact compared to the prior accounting model.

Accounting Standards Not Yet Implemented

Reference Rate Reform. In March 2020, ASU 2020-04 was issued, which provides temporary optional expedients to applying the reference rate reform guidance to contracts that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued. Under this update, contract modifications resulting in a new reference rate may be accounted for as a continuation of the existing contract. This guidance is effective upon issuance of the update and applies to contract modifications made through December 31, 2022. The Company has certain debt which utilizes a U.S. Dollar one-month LIBOR rate, which is expected to be published until June 2023. The LIBOR rate is likely to be replaced by a similar secured or unsecured overnight financing rate. The Company cannot estimate the impact of such variable rates on its consolidated financial statements.

Government Assistance. In November 2021, ASU 2021-10 was issued, which aims to provide increased transparency by requiring business entities to disclose information about certain types of government assistance they receive in the notes to the financial statements. The guidance is effective for annual periods beginning after December 15, 2021, with early application permitted. The Company did not early adopt the guidance in ASU 2021-10 and does not expect the guidance to have a material impact on its disclosures.

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Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue Recognition [Abstract]

Revenue Recognition

Revenue Recognition

Refer to Note 1. “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for the Company’s policies regarding “Revenue” and “Accounts receivable, net.”

Disaggregation of Revenue

Revenue by product type and market is set forth in the following tables. With respect to its seaborne mining 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.

	Three Months Ended March 31, 2022
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	40.4	$	—	$	251.5	$	199.9	$	—	$	491.8
Export	210.5		—		—		—		—		210.5
Total thermal	250.9		—		251.5		199.9		—		702.3
Metallurgical coal
Export	—		318.0		—		—		—		318.0
Total metallurgical	—		318.0		—		—		—		318.0
Other (2)	0.3		3.3		(0.3)		3.2		(335.4)		(328.9)
Revenue	$	251.2	$	321.3	$	251.2	$	203.1	$	(335.4)	$	691.4

	Three Months Ended March 31, 2021
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	44.1	$	—	$	228.4	$	146.8	$	—	$	419.3
Export	131.9		—		—		—		—		131.9
Total thermal	176.0		—		228.4		146.8		—		551.2
Metallurgical coal
Export	—		86.6		—		—		—		86.6
Total metallurgical	—		86.6		—		—		—		86.6
Other (2)	0.4		0.9		—		2.5		9.7		13.5
Revenue	$	176.4	$	87.5	$	228.4	$	149.3	$	9.7	$	651.3

(1)    Corporate and Other revenue includes net losses related to unrealized mark-to-market adjustments on derivatives related to forecasted sales and other financial trading activity of $290.2 million and $4.9 million during the three months ended March 31, 2022 and 2021, respectively. Refer to Note 7. “Derivatives and Fair Value Measurements” for additional information. Also included in Corporate and Other revenue is revenue with customers of $19.0 million and $17.9 million during the three months ended March 31, 2022 and 2021, respectively.

(2)    Other 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 and property and facility rentals.

The Company recorded revenue related to delivered coal to customers of approximately $1,039 million and $656 million during the three months ended March 31, 2022 and 2021, respectively. Such amounts exclude unrealized and realized gains and losses on derivative contracts related to forecasted sales and certain other revenue unrelated to delivered coal.

Committed Revenue from Contracts with Customers

The Company expects to recognize revenue subsequent to March 31, 2022 of approximately $5.1 billion related to contracts with customers in which volumes and prices per ton were fixed or reasonably estimable at March 31, 2022. Approximately 48% 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 March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Trade receivables, net	$	323.4	$	307.0
Miscellaneous receivables, net	34.0		43.5
Accounts receivable, net	$	357.4	$	350.5

None of the above receivables included allowances for credit losses at March 31, 2022 or December 31, 2021. No charges for credit losses were recognized during the three months ended March 31, 2022 or 2021.

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Discontinued Operations

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Historically, discontinued operations included certain former Seaborne Thermal Mining and Other U.S. Thermal Mining segment assets that have ceased production and other previously divested legacy operations, including Patriot Coal Corporation and certain of its wholly-owned subsidiaries (Patriot). In the third quarter of 2021, the Company executed the sale of the closed Wilkie Creek Mine, which reduced its closed mine reclamation liabilities and associated costs.

Summarized Results of Discontinued Operations

Results from discontinued operations were as follows during the periods presented below:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from discontinued operations, net of income taxes	$	(0.8)	$	(2.0)

Liabilities of Discontinued Operations

Liabilities classified as discontinued operations included in the Company’s condensed consolidated balance sheets were as follows:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Liabilities:
Accounts payable and accrued expenses	$	45.0	$	45.0
Other noncurrent liabilities	58.7		59.0
Total liabilities classified as discontinued operations	$	103.7	$	104.0

Patriot-Related Matters

A significant portion of the liabilities in the table above relate to Patriot. In 2012, Patriot filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code (the Bankruptcy Code). In 2013, the Company entered into a definitive settlement agreement (2013 Agreement) with Patriot and the United Mine Workers of America (UMWA), on behalf of itself, its represented Patriot employees and its represented Patriot retirees, to resolve all then-disputed issues related to Patriot’s bankruptcy. In May 2015, Patriot again filed voluntary petitions for relief under the Bankruptcy Code in the U.S. District Court for the Eastern District of Virginia and subsequently initiated a process to sell substantially all of its assets to qualified bidders. On October 9, 2015, Patriot’s bankruptcy court entered an order confirming Patriot’s plan of reorganization, which provided, among other things, for the sale of substantially all of Patriot’s assets to two different buyers.

Black Lung Occupational Disease Liabilities. Patriot had federal and state black lung occupational disease liabilities related to workers employed in periods prior to Patriot’s spin-off from the Company in 2007. Upon spin-off, Patriot indemnified the Company against any claim relating to these liabilities, which amounted to approximately $150 million at that time. The indemnification included any claim made by the U.S. Department of Labor (DOL) against the Company with respect to these obligations as a potentially liable operator under the Federal Coal Mine Health and Safety Act of 1969. The 2013 Agreement included Patriot’s affirmance of indemnities provided in the spin-off agreements, including the indemnity relating to such black lung liabilities; however, Patriot rejected this indemnity in its May 2015 bankruptcy.

By statute, the Company had secondary liability for the black lung liabilities related to Patriot’s workers employed by former subsidiaries of the Company. The Company’s accounting for the black lung liabilities related to Patriot is based on an interpretation of applicable statutes. Management believes that inconsistencies exist among the applicable statutes, regulations promulgated under those statutes and the DOL’s interpretative guidance. The Company has sought clarification from the DOL regarding these inconsistencies. The amount of these liabilities could be reduced in the future. Whether the Company will ultimately be required to fund certain of those obligations in the future as a result of Patriot’s May 2015 bankruptcy remains uncertain. The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $87.1 million and $87.2 million at March 31, 2022 and December 31, 2021, respectively. While the Company has recorded a liability, it intends to review each claim on a case-by-case basis and contest liability estimates as appropriate. The amount of the Company’s recorded liability reflects only Patriot workers employed by former subsidiaries of the Company that are presently retired, disabled or otherwise not actively employed. The Company cannot reliably estimate the potential liabilities for Patriot’s workers employed by former subsidiaries of the Company that are presently active in the workforce because of the potential for such workers to continue to work for another coal operator that is a going concern.

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Inventories

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

“Inventories, net” as of March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Materials and supplies, net	$	112.8	$	102.1
Raw coal	46.9		54.6
Saleable coal	109.4		70.0
Inventories, net	$	269.1	$	226.7

Materials and supplies inventories, net presented above have been shown net of reserves of $9.0 million as of both March 31, 2022 and December 31, 2021.

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Equity Method Investments

3 Months Ended

Mar. 31, 2022

Equity Method Investment, Summarized Financial Information [Abstract]

Equity Method Investments

Equity Method Investments

The Company had total equity method investments and financing receivables of $62.9 million and $62.2 million reflected in “Investments and other assets” in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively, related to Middlemount Coal Pty Ltd (Middlemount). Included in “(Income) loss from equity affiliates” in the unaudited condensed consolidated statements of operations were gains related to Middlemount of $45.1 million during the three months ended March 31, 2022, and losses of $0.9 million during the three months ended March 31, 2021.

The Company received cash payments from Middlemount of $47.0 million and $2.3 million during the three months ended March 31, 2022 and 2021, respectively.

One of the Company’s Australian subsidiaries and the other shareholder of Middlemount are parties to an agreement, as amended from time to time, to provide a revolving loan (Revolving Loans) to Middlemount. The Company’s participation in the Revolving Loans will not, at any time, exceed its 50% equity interest of the revolving loan limit, which was $50 million Australian dollars at March 31, 2022. The Revolving Loans bear interest at 10% per annum and expire on December 31, 2023. The Revolving Loans were not drawn upon by Middlemount as of either March 31, 2022 or December 31, 2021.

As of both March 31, 2022 and December 31, 2021, the financing receivables and Revolving Loans are accounted for as in-substance common stock due to the limited fair value attributed to Middlemount’s equity.

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Derivatives and Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Derivatives and Fair Value Measurements

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, (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, (3) price risk and the variability of cash flows related to forecasted diesel fuel purchased for use in its operations and (4) interest rate risk on long-term debt. 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. The Company had no diesel fuel or interest rate derivatives in place as of March 31, 2022.

Foreign Currency Option Contracts

As of March 31, 2022, the Company had currency options outstanding with an aggregate notional amount of $705.0 million Australian dollars to hedge currency risk associated with anticipated Australian dollar expenditures over the nine-month period ending December 31, 2022. The instruments are quarterly average rate options which 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 $0.76 to $0.80 over the nine-month period ending December 31, 2022.

Derivative Contracts Related to Forecasted Sales

As of March 31, 2022, the Company held coal derivative contracts related to a portion of its forecasted sales with an aggregate notional volume of 1.6 million tonnes. Such financial contracts may include futures, forwards and options. Included in this total are 1.3 million tonnes related to financial derivatives entered to support the profitability of the Wambo Underground Mine as part of a strategy to extend the mine life through mid-2023. Of this total, 0.6 million tonnes will settle in 2022 and 0.7 million tonnes will settle in 2023 at expected average pricing of approximately $84 per tonne (Newcastle index). The remaining 0.3 million tonnes aggregate notional volume related to other coal financial contracts will settle in 2022. Additionally, the Company classifies certain physical forward sales contracts as derivatives for which the normal purchase, normal sales exception does not apply.

During the three months ended March 31, 2022, the Company recorded an unrealized mark-to-market loss of $301.0 million on these coal derivative contracts, which includes approximately $237 million of unrealized mark-to-market losses on financial derivatives, and approximately $64 million 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 nominal financial trading contracts as of March 31, 2022.

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 condensed consolidated balance sheets. The fair value of derivatives reflected in the accompanying condensed consolidated balance sheets are set forth in the table below.

	March 31, 2022				December 31, 2021
	Asset Derivative		Liability Derivative		Asset Derivative		Liability Derivative
	(Dollars in millions)
Foreign currency option contracts	$	6.3	$	—	$	1.4	$	—
Derivative contracts related to forecasted sales	133.2		(558.1)		59.5		(184.2)
Financial trading contracts	13.5		—		3.4		—
Total derivatives	153.0		(558.1)		64.3		(184.2)
Effect of counterparty netting	(133.2)		133.2		(59.5)		59.5
Variation margin (received) posted	(13.5)		360.6		(3.4)		95.2
Net derivatives and variation margin as classified in the balance sheets	$	6.3	$	(64.3)	$	1.4	$	(29.5)

The Company generally posts or receives variation margin cash with its clearing broker on the majority of its financial derivatives as market values of the financial derivatives fluctuate. As of March 31, 2022, the Company had posted $481.7 million aggregate margin cash, consisting of $347.1 million variation margin cash and $134.6 million initial margin. As of December 31, 2021, the Company had posted $130.1 million aggregate margin cash, consisting of $91.8 million variation margin cash and $38.3 million initial margin.

To reduce exposure to additional margin requirements, subsequent to March 31, 2022, the Company converted 0.8 million metric tons of financial hedges into fixed price physical sales over the next 12 months, eliminating further margin requirements on these tons. With these transactions, 1.4 million metric tons remain outstanding with 0.9 million metric tons projected to settle over the remainder of 2022.

The net amount of asset derivatives, net of variation margin, is included in “Other current assets” and the net amount of liability derivatives, net of variation margin, is included in “Accounts payable and accrued expenses” in the accompanying condensed consolidated balance sheets. The amounts of initial margin are not included with the derivatives presented in the tabular disclosures above and are included in “Other current assets” in the accompanying condensed 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 pre-tax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.

		Three Months Ended March 31, 2022
		Total gain (loss) recognized in income		Loss realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	2.3	$	(1.0)	$	3.3
Derivative contracts related to forecasted sales	Revenue	(369.0)		(68.0)		(301.0)
Financial trading contracts	Revenue	10.1		(0.7)		10.8
Total		$	(356.6)	$	(69.7)	$	(286.9)
		Three Months Ended March 31, 2021 (1)
		Total loss recognized in income		Gain (loss) realized in income on derivatives		Unrealized loss recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(2.9)	$	4.7	$	(7.6)
Derivative contracts related to forecasted sales	Revenue	(9.7)		(7.9)		(1.8)
Financial trading contracts	Revenue	(0.7)		2.4		(3.1)
Total		$	(13.3)	$	(0.8)	$	(12.5)

(1)    ‘Results realized in income on derivatives’ has been revised to exclude revenue arising from coal deliveries earned by the Company’s trading and brokerage function of $17.9 million for the three months ended March 31, 2021, to be comparable to the presentation of the 2022 amounts.

The Company classifies the cash effects of its derivatives within the “Cash Flows From Operating Activities” section of the unaudited condensed 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 (liability) asset positions for which fair value is measured on a recurring basis. Variation margin cash associated with the derivative balances is excluded from this table.

	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	6.3	$	—	$	6.3
Derivative contracts related to forecasted sales	—		(424.9)		—		(424.9)
Financial trading contracts	—		13.5		—		13.5
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(405.1)	$	4.0	$	(401.1)
	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.4	$	—	$	1.4
Derivative contracts related to forecasted sales	—		(124.7)		—		(124.7)
Financial trading contracts	—		3.4		—		3.4
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(119.9)	$	4.0	$	(115.9)

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 observed prices in an inactive market (Level 3).

Other Financial Instruments. The following methods and assumptions were used by the Company in estimating fair values for other financial instruments as of March 31, 2022 and December 31, 2021:

•Cash and cash equivalents, restricted cash, accounts receivable, including those within the Company’s accounts receivable securitization program, margining cash, 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- and variable-rate long-term debt relates to the potential reduction in the fair value and negative impact to future earnings, respectively, 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.

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Total debt at par value	$	1,129.9	$	1,173.2
Less: Unamortized debt issuance costs and original issue discount	(31.8)		(35.4)
Net carrying amount	$	1,098.1	$	1,137.8
Estimated fair value	$	1,277.3	$	1,136.5

Generally, the Company’s Level 3 instruments or contracts are valued using bid/ask price quotations and other market assessments obtained from multiple, independent third-party brokers or other transactional data incorporated into internally-generated discounted cash flow models. Decreases in the number of third-party brokers or market liquidity could erode the quality of market information and therefore the valuation of the Company’s market positions. The Company’s valuation techniques include basis adjustments to the foregoing price inputs for quality, such as sulfur and ash content, location differentials, expressed as port and freight costs, and credit risk. The Company’s risk management function independently validates the Company’s valuation inputs, including unobservable inputs, with third-party information and settlement prices from other sources where available. A daily process is performed to analyze market price changes and changes to the portfolio. Further periodic validation occurs at the time contracts are settled with the counterparty. These valuation techniques have been consistently applied in all periods presented, and the Company believes it has obtained the most accurate information available for the types of derivative contracts held.

Significant increases or decreases in the inputs in isolation could result in a significantly higher or lower fair value measurement. The unobservable inputs do not have a direct interrelationship; therefore, a change in one unobservable input would not necessarily correspond with a change in another unobservable input.

The Company had no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2022 and 2021. The Company’s policy is to value all transfers between levels using the beginning of period valuation.

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Property, Plant, Equipment and Mine Development

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant, Equipment and Mine Development

Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of March 31, 2022 and December 31, 2021 is set forth in the table below:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Land and coal interests	$	2,494.1	$	2,494.1
Buildings and improvements	590.2		550.8
Machinery and equipment	1,370.9		1,386.2
Less: Accumulated depreciation, depletion and amortization	(1,551.9)		(1,480.5)
Property, plant, equipment and mine development, net	$	2,903.3	$	2,950.6

Asset Impairment and Other At-Risk Assets

The Company has identified certain assets with an aggregate carrying value of approximately $0.5 billion at March 31, 2022 in its Other U.S. Thermal Mining and Corporate and Other segments whose recoverability is most sensitive to customer demand, customer concentration risk and future economic viability. The Company conducted a review of those assets as of March 31, 2022 and determined that no impairment charges were necessary as of that date.

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Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, 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 that no amounts could be recovered from third parties.

The components of lease expense during the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	4.7	$	6.0
Short-term lease cost	6.3		3.4
Variable lease cost	1.6		0.5
Sublease income	(0.4)		(0.5)
Total operating lease cost	$	12.2	$	9.4
Finance lease cost:
Amortization of right-of-use assets	$	1.5	$	0.6
Interest on lease liabilities	0.6		0.5
Total finance lease cost	$	2.1	$	1.1

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:

	March 31, 2022			December 31, 2021
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	33.0		$	35.5
Accounts payable and accrued expenses	$	16.1		$	16.4
Operating lease liabilities, less current portion	24.6			27.2
Total operating lease liabilities	$	40.7		$	43.6
Finance leases:
Property, plant, equipment and mine development	$	32.4		$	32.2
Accumulated depreciation	(9.0)			(7.4)
Property, plant, equipment and mine development, net	$	23.4		$	24.8
Current portion of long-term debt	$	15.0		$	15.3
Long-term debt, less current portion	12.6			14.0
Total finance lease liabilities	$	27.6		$	29.3
Weighted average remaining lease term (years)
Operating leases	2.9
Finance leases	6.7
Weighted average discount rate
Operating leases	7.0		%
Finance leases	8.2		%

Supplemental cash flow information related to leases during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5.9	$	8.3
Operating cash flows for finance leases	0.6		0.7
Financing cash flows for finance leases	2.2		1.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1.6		3.1
Finance leases	—		3.6

The Company's leases have remaining lease terms ranging from less than 1 year to 19.8 years, and may include options to extend the terms, as applicable. The contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2022	$	13.7	$	8.7
2023	17.6		6.0
2024	6.3		5.1
2025	3.6		4.9
2026	3.6		2.5
2027 and thereafter	0.8		7.2
Total lease payments	45.6		34.4
Less imputed interest	(4.9)		(6.8)
Total lease liabilities	$	40.7	$	27.6

Leases

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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, 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 that no amounts could be recovered from third parties.

The components of lease expense during the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	4.7	$	6.0
Short-term lease cost	6.3		3.4
Variable lease cost	1.6		0.5
Sublease income	(0.4)		(0.5)
Total operating lease cost	$	12.2	$	9.4
Finance lease cost:
Amortization of right-of-use assets	$	1.5	$	0.6
Interest on lease liabilities	0.6		0.5
Total finance lease cost	$	2.1	$	1.1

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:

	March 31, 2022			December 31, 2021
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	33.0		$	35.5
Accounts payable and accrued expenses	$	16.1		$	16.4
Operating lease liabilities, less current portion	24.6			27.2
Total operating lease liabilities	$	40.7		$	43.6
Finance leases:
Property, plant, equipment and mine development	$	32.4		$	32.2
Accumulated depreciation	(9.0)			(7.4)
Property, plant, equipment and mine development, net	$	23.4		$	24.8
Current portion of long-term debt	$	15.0		$	15.3
Long-term debt, less current portion	12.6			14.0
Total finance lease liabilities	$	27.6		$	29.3
Weighted average remaining lease term (years)
Operating leases	2.9
Finance leases	6.7
Weighted average discount rate
Operating leases	7.0		%
Finance leases	8.2		%

Supplemental cash flow information related to leases during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5.9	$	8.3
Operating cash flows for finance leases	0.6		0.7
Financing cash flows for finance leases	2.2		1.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1.6		3.1
Finance leases	—		3.6

The Company's leases have remaining lease terms ranging from less than 1 year to 19.8 years, and may include options to extend the terms, as applicable. The contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2022	$	13.7	$	8.7
2023	17.6		6.0
2024	6.3		5.1
2025	3.6		4.9
2026	3.6		2.5
2027 and thereafter	0.8		7.2
Total lease payments	45.6		34.4
Less imputed interest	(4.9)		(6.8)
Total lease liabilities	$	40.7	$	27.6

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Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]	Income TaxesThe Company's effective tax rate before remeasurement for the three months ended March 31, 2022 is based on the Company’s estimated full year effective tax rate, comprised of expected statutory tax provision, offset by foreign rate differential and changes in valuation allowance. The Company’s income tax benefit of $1.0 million and $1.8 million for the three months ended March 31, 2022 and 2021, respectively, included a tax provision of $1.6 million and a tax benefit of $0.2 million, respectively, related to the remeasurement of foreign income tax accounts.

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Long-term Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt 

The Company’s total funded indebtedness (Indebtedness) as of March 31, 2022 and December 31, 2021 consisted of the following:

Debt Instrument (defined below, as applicable)	March 31, 2022		December 31, 2021
	(Dollars in millions)
6.000% Senior Secured Notes due March 2022 (2022 Notes)	$	—	$	23.1
8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)	—		62.6
10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)	193.6		193.9
Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)	188.8		206.0
6.375% Senior Secured Notes due March 2025 (2025 Notes)	77.5		334.9
Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)	321.8		322.8
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	320.0		—
Finance lease obligations	27.6		29.3
Less: Debt issuance costs	(31.2)		(34.8)
	1,098.1		1,137.8
Less: Current portion of long-term debt	19.1		59.6
Long-term debt	$	1,079.0	$	1,078.2

2021 Financing Activity

During the first quarter of 2021, the Company completed a series of transactions to, among other things, provide the Company with maturity extensions and covenant relief, while allowing it to maintain near-term operating liquidity and financial flexibility. These transactions included a senior notes exchange and related consent solicitation, a revolving credit facility exchange, various amendments to the Company’s existing debt agreements, and completion of a related surety transaction support agreement with the Company’s surety bond providers.

Subsequent to these transactions in the first quarter of 2021, the Company completed additional financing transactions during 2021 intended to improve its capital structure. Such transactions included the implementation of an at-the-market equity offering program pursuant to which the Company sold approximately 24.8 million shares of common stock for net cash proceeds of $269.8 million, the retirement of $270.9 million principal amount of existing debt through various open market purchases at an aggregate cost of $232.4 million, and the issuance of an aggregate 10.0 million shares of common stock in exchange for an additional $106.1 million principal amount of existing debt through multiple bilateral transactions with debt holders.

In the event of allowable open market purchases of its debt, the terms of the 2024 Peabody Notes and the letter of credit facility entered into by the Company in connection with the 2021 financing activity (Company LC Agreement) require the Company to make a mandatory repurchase offer to those debt and lien holders. In general, the repurchase offers equate to 25% of the principal amount of priority lien debt repurchased in the preceding quarter at a price equal to the weighted average repurchase price paid over that quarter. The open market debt repurchases completed during the three months ended December 31, 2021 necessitated a mandatory repurchase offer of up to $38.6 million of 2024 Peabody Notes, at 94.940% of their aggregate accreted value, plus accrued and unpaid interest, and a concurrent repurchase offer of priority lien obligations under the Company LC Agreement. The offer resulted in the valid tender and purchase of $0.1 million aggregate accreted value of 2024 Peabody Notes and $30.0 million aggregate principal and commitment amounts under the Company LC Agreement during the three months ended March 31, 2022. The Company’s purchase of the principal and commitment amounts under the Company LC Agreement was effected by the posting of $28.5 million of collateral with the administrative agent and did not reduce the availability under the facility. During the three months ended March 31, 2022, the Company made no other open market purchases of its debt.

The 2024 Co-Issuer Notes and the Co-Issuer Term Loans are also subject to mandatory prepayment offers at the end of each six-month period, beginning with June 30, 2021, whereby the Excess Cash Flow (as defined in the 2024 Co-Issuer Notes indenture) generated by the Wilpinjong Mine during each such period will be applied to the principal of such notes and loans on a pro rata basis, provided that the liquidity attributable to the Wilpinjong Mine would not fall below $60.0 million. Such prepayments may be accepted or declined at the option of the debt holders. Based upon the Wilpinjong Mine’s results for the six-month period ended December 31, 2021, a required offer to prepay $105.6 million of total principal resulted in the prepayment of $17.2 million of Co-Issuer Term Loans principal, $0.3 million of 2024 Co-Issuer Notes principal, and a related loss on early debt extinguishment of $0.5 million during the three months ended March 31, 2022.

The 2021 financing activity and related agreements are more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on February 18, 2022.

3.250% Convertible Senior Notes due 2028

On March 1, 2022, through a private offering, the Company issued $320.0 million in aggregate principal amount of 3.250% Convertible Senior Notes due 2028 (the 2028 Convertible Notes). 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 to redeem the remaining $62.6 million of its outstanding 2024 Peabody Notes and, together with available cash, approximately $257.4 million of its outstanding 2025 Notes, and to pay related premiums, fees and expenses relating to the offering of the 2028 Convertible Notes and the redemptions. The redemption of existing notes was deemed a debt extinguishment for accounting purposes. The Company capitalized $11.2 million of debt issuance costs related to the offering and recognized a loss on early debt extinguishment of $23.0 million during the three months ended March 31, 2022.

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 will bear interest from March 1, 2022 at a rate of 3.250% per year payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022. During the three months ended March 31, 2022, the Company incurred interest expense of $1.0 million related to the 2028 Convertible Notes.

The 2028 Convertible Notes will be convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on 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 will be 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of approximately $19.85 per share of the Company’s common stock. The initial conversion price represents a premium of approximately 32.5% to the $14.98 per share closing price of the Company’s common stock on February 24, 2022. The conversion rate is subject to 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.

Margin Financing Arrangement

On March 7, 2022, the Company entered into a credit agreement, by and among the Company, as borrower, Goldman Sachs Lending Partners LLC, as administrative agent, and the lenders party thereto (the Credit Agreement). The Credit Agreement provides for a $150 million unsecured revolving credit facility (the Revolving Facility), which will mature on April 1, 2025 and bears interest at a rate of 10.0% per annum on drawn amounts.

The Revolving Facility is intended to support the Company’s near-term liquidity requirements, particularly with respect to the cash margin requirements associated with the Company’s coal derivative contracts, which fluctuate depending upon underlying market coal prices.

Concurrently with the Credit Agreement, the Company entered into an agreement with Goldman Sachs & Company LLC to act as sales agent for at-the-market equity offerings of up to $225.0 million of the Company’s common stock.

During the three months ended March 31, 2022, the Company borrowed and repaid $225.0 million under the Revolving Facility using net proceeds of $222.0 million from at-the-market issuances of 10.1 million shares of common stock and available cash. The equity offering agreement limit was reached as a result of these issuances and may not be further utilized without amendment and approval by the sales agent. The Company had no outstanding borrowings and no availability under the Revolving Facility at March 31, 2022.

The Credit Agreement contains customary covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional indebtedness, pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments, enter into agreements that restrict distributions from subsidiaries, 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.

Borrowings under the Revolving Facility are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by substantially all of the Company’s material domestic subsidiaries (excluding any unrestricted subsidiaries).

Retirement of 2022 Notes

On March 31, 2022, the Company retired the remaining principal balance of 2022 Notes upon maturity for $23.1 million.

Interest Charges

The Company incurred total interest expense of $39.4 million and $52.4 million during the three months ended March 31, 2022 and 2021, respectively. These amounts included $13.5 million and $10.9 million, respectively, related to financial assurance instruments such as surety bonds and letters of credit, with the remainder primarily related to the Company’s funded debt.

Of total interest expense incurred during the three months ended March 31, 2022 and 2021, $3.8 million and $4.9 million, respectively, was comprised of non-cash charges primarily related to the amortization of debt issuance costs.

Cash payments for interest amounted to $37.2 million and $56.3 million during the three months ended March 31, 2022 and 2021, respectively.

The Senior Secured Term Loan is the Company’s only outstanding variable rate debt, which bore interest at LIBOR plus 2.75% per annum at March 31, 2022.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt agreements at March 31, 2022, including the minimum aggregate liquidity requirement under the Company LC Agreement which requires the Company’s restricted subsidiaries to maintain minimum aggregate liquidity of $125.0 million at the end of each quarter through December 31, 2024.

Finance Lease Obligations

Refer to Note 9. “Leases” for additional information associated with the Company’s finance leases, which pertain to the financing of mining equipment used in operations.

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Pension and Postretirement Benefit Costs

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Pension and Postretirement Benefit Costs

Pension and Postretirement Benefit Costs

The components of net periodic pension and postretirement benefit costs, excluding the service cost for benefits earned, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.

Net periodic pension credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Interest cost on projected benefit obligation	$	5.3	$	5.1
Expected return on plan assets	(5.9)		(5.7)
Net periodic pension credit	$	(0.6)	$	(0.6)

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. Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006 (generally 80%). As of March 31, 2022, the Company’s qualified plans were expected to be at or above the Pension Protection Act thresholds. The Company is not required to make any contributions to its qualified pension plans in 2022 based on minimum funding requirements and does not expect to make any discretionary contributions in 2022 at this time.

In March 2022, Peabody Investments Corp., a wholly owned subsidiary of the Company, entered into a commitment agreement relating to the Peabody Investments Corp. Retirement Plan (the Plan) with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Plan. Under the commitment agreement, the Plan purchased a group annuity contract (Group Annuity Contract) from Prudential for approximately $500 million and Prudential will reimburse the Plan for future benefit payments to be made to the Plan’s participants. Under the terms of this transaction, the Plan will continue to administer and pay the retirement benefits of Plan participants but will be reimbursed by Prudential for the payment of all benefits covered by the Group Annuity Contract. The purchase of the Group Annuity Contract was funded directly by the Plan’s assets. There will be no impact on the monthly retirement benefits paid to Plan participants. In addition, there will be no material impact on discretionary contributions for the Plan in 2022 or on the Company’s earnings in 2022 as a result of this transaction.

Net periodic postretirement benefit credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Service cost for benefits earned	$	0.2	$	0.2
Interest cost on accumulated postretirement benefit obligation	1.7		2.9
Expected return on plan assets	(0.2)		(0.2)
Amortization of prior service credit	(13.4)		(11.0)
Net periodic postretirement benefit credit	$	(11.7)	$	(8.1)

In October 2021, the Company announced changes to its postretirement health care benefit plan for certain represented retirees which reduced its accumulated postretirement benefit obligation, as further described in Note 14. “Postretirement Health Care and Life Insurance Benefits” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The reduction in liability was recorded with an offsetting balance in “Accumulated other comprehensive income” and is being amortized to earnings.

The Company has established a Voluntary Employees Beneficiary Association (VEBA) trust to pre-fund a portion of benefits for non-represented retirees. The Company does not expect to make any discretionary contributions to the VEBA trust in 2022 and plans to utilize a portion of VEBA assets to make certain benefit payments.

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto recorded during the three months ended March 31, 2022:

	Foreign Currency Translation Adjustment		Prior Service Credit Associated with Postretirement Plans		Total Accumulated Other Comprehensive Income
	(Dollars in millions)
December 31, 2021	$	0.8	$	297.1	$	297.9
Reclassification from other comprehensive income to earnings	—		(13.4)		(13.4)
Current period change	1.9		—		1.9
March 31, 2022	$	2.7	$	283.7	$	286.4

Postretirement health care and life insurance benefits reclassified from other comprehensive income to earnings of $13.4 million and $11.0 million during the three months ended March 31, 2022 and 2021, respectively, are included in “Net periodic benefit credit, excluding service cost” in the unaudited condensed consolidated statements of operations.

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Earnings per Share (EPS)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings per Share (EPS)

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. 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.

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). Since the 2028 Convertible Notes were issued on March 1, 2022, there were approximately 5.5 million shares of potentially dilutive common stock for the three months ended March 31, 2022. These potentially dilutive shares were excluded from the computation of diluted EPS for the three months ended March 31, 2022, because to do so would have been anti-dilutive as the Company reported a net loss from continuing operations during the period. 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 related to the convertible debt.

The computation of diluted EPS excluded aggregate share-based compensation awards of approximately 1.2 million and 1.3 million for the three months ended March 31, 2022 and 2021, respectively, 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.

	Three Months Ended March 31,
	2022		2021
	(In millions, except per share data)
EPS numerator:
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Loss from continuing operations attributable to common stockholders	(118.7)		(78.1)
Loss from discontinued operations, net of income taxes	(0.8)		(2.0)
Net loss attributable to common stockholders	$	(119.5)	$	(80.1)
EPS denominator:
Weighted average shares outstanding — basic and diluted	136.2		98.4
Basic and diluted EPS attributable to common stockholders:
Loss from continuing operations	$	(0.87)	$	(0.79)
Loss from discontinued operations	(0.01)		(0.02)
Net loss attributable to common stockholders	$	(0.88)	$	(0.81)

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Financial Instruments and Other Guarantees

3 Months Ended

Mar. 31, 2022

Financial Instruments And Guarantees [Abstract]

Financial Instruments and Other Guarantees

Financial Instruments and Other Guarantees

The Company is a party to various guarantees and financial instruments that carry off-balance-sheet risk and are not reflected in the accompanying condensed consolidated balance sheets. At March 31, 2022, such instruments included $1,484.9 million of surety bonds and $469.1 million of letters of credit. Such financial instruments provide support for the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees. The Company periodically evaluates the instruments for on-balance sheet treatment based on the amount of exposure under the instrument and the likelihood of required performance. The Company does not expect any material losses to result from these guarantees or off-balance-sheet instruments in excess of liabilities provided for in the accompanying condensed consolidated balance sheets.

In November 2020, the Company entered into a surety agreement with the providers of its surety bond portfolio to resolve previous collateral demands. In accordance with the surety agreement, the Company initially provided $75.0 million of collateral, in the form of letters of credit. The Company subsequently granted second liens on $200.0 million of certain mining equipment and is further required to post an additional $25.0 million of collateral per year from 2021 through 2024 for the benefit of the surety providers. The collateral postings further increase to the extent the Company generates more than $100.0 million of free cash flow (as defined in the surety agreement) in any twelve-month period or has cumulative asset sales in excess of $10.0 million, as of the last quarter end during the term of the agreement. Based upon the Company’s free cash flow for the year ended December 31, 2021, additional collateral of $13.0 million was posted in January 2022 in the form of letters of credit. No such additional collateral was required for the period ended March 31, 2022.

Reclamation Bonding

The Company is required to provide various forms of financial assurance in support of its mining reclamation obligations in the jurisdictions in which it operates. Such requirements are typically established by statute or under mining permits.

At March 31, 2022, the Company’s asset retirement obligations of $724.5 million were supported by surety bonds of $1,312.1 million, as well as letters of credit issued under the Company’s receivables securitization program and the Company LC Agreement. Letters of credit issued at March 31, 2022 which served as collateral for surety bonds in support of asset retirement obligations amounted to $340.0 million.

Accounts Receivable Securitization

The Company entered into the Sixth Amended and Restated Receivables Purchase Agreement, as amended, dated as of April 3, 2017 (the Receivables Purchase Agreement) to extend the Company’s receivables securitization facility previously in place and expand that facility to include certain receivables from the Company’s Australian operations. The receivables securitization program (Securitization Program) is subject to customary events of default set forth in the Receivables Purchase Agreement. The Receivables Purchase Agreement was amended in January 2022 to extend the Securitization Program to January 2025, reduce the available funding capacity from $250.0 million to $175.0 million, and amend the relevant borrowing rate from a LIBOR-based rate to one based on Bloomberg’s Short-Term Bank Yield Index (BSBY). 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, from time to time. Funding capacity under the Securitization Program may also be utilized for letters of credit in support of other obligations.

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

At March 31, 2022, the Company had no outstanding borrowings and $161.8 million of letters of credit issued under the Securitization Program. The letters of credit were primarily in support of reclamation obligations. Availability under the Securitization Program, which is adjusted for certain ineligible receivables, was $1.6 million at March 31, 2022. The Company was required to post cash collateral under the Securitization Program of $24.7 million at March 31, 2022 and none at December 31, 2021.

The Company incurred interest and fees associated with the Securitization Program of $0.9 million and $0.7 million during the three months ended March 31, 2022 and 2021, respectively, which have been recorded as “Interest expense” in the accompanying unaudited condensed consolidated statements of operations.

Collateralized Letter of Credit Agreement

In February 2022, the Company entered into a new agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit in support of reclamation bonding. 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 deposit rate of 0.35% per annum on the amount of cash collateral posted in support of letters of credit, with the rate subject to increases over time. The agreement has an initial expiration date of December 31, 2025. The Company did not utilize the collateralized letter of credit facility until subsequent to March 31, 2022.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

Unconditional Purchase Obligations

As of March 31, 2022, purchase commitments for capital expenditures were $43.9 million, all of which is obligated within the next three years, with $35.6 million obligated within the next 12 months.

There were no other material changes to the Company’s commitments from the information provided in Note 23. “Commitments and Contingencies” to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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 results of operations for the periods presented.

Litigation Relating to Continuing Operations

Securities Class Action. On September 28, 2020, the Oklahoma Firefighters Pension and Retirement System brought a lawsuit, styled In Re Peabody Energy Corporation Securities Litigation No. 1:20-cv-08024 (PKC), against the Company and certain of its officers in the U.S. District Court for the Southern District of New York (the Court) on behalf of a putative class of shareholders (Plaintiffs) who held Company stock between April 3, 2017 and October 28, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder (Securities Class Action). Plaintiffs allege that the defendants made false or misleading statements and/or failed to disclose certain adverse facts pertaining to safety practices at the Company’s North Goonyella Mine and the events leading up to a fire at the mine, and that, after a September 28, 2018 fire at the mine, made false or misleading statements and/or failed to disclose certain adverse facts pertaining to the feasibility of the Company’s plan to restart the mine after the fire. On January 12, 2021, the Court appointed the Oregon Public Employees Retirement Fund as lead plaintiff. On January 25, 2021, the Court entered a scheduling order for this matter. Plaintiffs filed their amended complaint on March 19, 2021. The defendants filed a pre-motion letter on April 30, 2021 while the Plaintiffs’ response letter was filed on May 6, 2021. The defendants filed their motion to dismiss on June 7, 2021. The Plaintiffs’ opposition brief to the motion to dismiss was filed on July 22, 2021. The defendants filed their reply to Plaintiff’s opposition on August 23, 2021, completing briefing at this phase of the litigation. On March 7, 2022, the Court granted in part and denied in part the defendants’ motion to dismiss. As a result of this decision, only Plaintiffs’ allegations relating to the Company’s September 25, 2018 statements remain in the case. The Company believes the lawsuit lacks merit and intends to vigorously defend against the allegations.

Derivative Actions. On December 22, 2020, a plaintiff (Phelps), putatively on behalf of the Company, brought a shareholder derivative lawsuit, styled Phelps v. Samantha Algaze, et al., Case No. 1:20-cv-01747-UNA (D. Del. filed Dec. 22, 2020), in the U.S. District Court for the District of Delaware against certain directors and former officers of the Company, as defendants. The Company was also named as a nominal defendant. The plaintiff did not make a demand on the Company’s board before instituting the lawsuit and alleges such demand would have been futile. In the complaint, the plaintiff alleges that the defendants failed to disclose adverse facts relating to the safety practices at the Company’s North Goonyella Mine, thereby leading to a September 28, 2018 fire, and allegedly failed to disclose adverse facts pertaining to the feasibility of reopening the mine. The derivative complaint alleges (i) contribution against certain current and former officers for securities fraud based on the Securities Class Action, and against all defendants, (ii) breach of fiduciary duties, (iii) waste of corporate assets for causing the Company to incur legal liability and (iv) unjust enrichment.

On February 10, 2021, a second plaintiff (Di Fusco), putatively on behalf of the Company, filed a similar shareholder derivative lawsuit, styled Di Fusco v. Glenn Kellow, et al., Case No. 1:21-cv-00183-UNA (D. Del. filed Feb. 10, 2021), in the U.S. District Court for the District of Delaware against the directors and current and former officers of the Company, as defendants. The Company was named as a nominal defendant. This suit makes claims similar to those made in the Phelps matter, but asserts a claim for alleged misstatements in a proxy statement under Section 14(a) of the Securities and Exchange Act of 1934. In late March 2021, the parties filed a stipulation agreeing to consolidate and stay both derivative actions for judicial efficiency and cost until the Court rules on the motion to dismiss in the Securities Class Action. In light of the March 7, 2022 decision on the motion to dismiss in the Securities Class Action, the parties are discussing how to proceed with the derivative actions, which currently remained stayed. The Company also believes that the derivative actions lack merit and intends to vigorously defend against the allegations.

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 financial condition, results of operations or cash flows. The Company reassesses the probability and estimability of contingent losses as new information becomes available.

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Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S. Thermal Mining and Corporate and Other. The Company’s chief operating decision maker, defined as our Chief Executive Officer, uses Adjusted EBITDA as the primary metric to measure the segments’ operating performance and allocate resources.

Adjusted EBITDA is a non-GAAP financial measure defined as loss 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 reconciliation below. Management believes non-GAAP performance measures are used by investors to measure the Company’s operating performance and lenders to measure the Company’s ability to incur and service debt. 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.

Reportable segment results were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Revenue:
Seaborne Thermal Mining	$	251.2	$	176.4
Seaborne Metallurgical Mining	321.3		87.5
Powder River Basin Mining	251.2		228.4
Other U.S. Thermal Mining	203.1		149.3
Corporate and Other	(335.4)		9.7
Total	$	691.4	$	651.3
Adjusted EBITDA:
Seaborne Thermal Mining	$	90.5	$	28.5
Seaborne Metallurgical Mining	181.0		(22.4)
Powder River Basin Mining	7.6		30.1
Other U.S. Thermal Mining	50.0		36.2
Corporate and Other	(1.6)		(11.3)
Total	$	327.5	$	61.1

A reconciliation of consolidated loss from continuing operations, net of income taxes to Adjusted EBITDA follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Depreciation, depletion and amortization	72.9		68.3
Asset retirement obligation expenses	15.0		15.9
Restructuring charges	1.6		2.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	(0.6)		(1.5)
Interest expense	39.4		52.4
Net loss (gain) on early debt extinguishment	23.5		(3.5)
Interest income	(0.5)		(1.5)
Unrealized losses on derivative contracts related to forecasted sales	301.0		1.9
Unrealized (gains) losses on foreign currency option contracts	(3.3)		7.6
Take-or-pay contract-based intangible recognition	(0.7)		(1.1)
Income tax benefit	(1.0)		(1.8)
Adjusted EBITDA	$	327.5	$	61.1

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Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented (Policies)

3 Months Ended

Mar. 31, 2022

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented [Abstract]

Corporate Hedging

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, (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, (3) price risk and the variability of cash flows related to forecasted diesel fuel purchased for use in its operations and (4) interest rate risk on long-term debt. 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. The Company had no diesel fuel or interest rate derivatives in place as of March 31, 2022.

Foreign Currency Option Contracts

Corporate Hedging - Coal Trading

Generally, the Company’s Level 3 instruments or contracts are valued using bid/ask price quotations and other market assessments obtained from multiple, independent third-party brokers or other transactional data incorporated into internally-generated discounted cash flow models. Decreases in the number of third-party brokers or market liquidity could erode the quality of market information and therefore the valuation of the Company’s market positions. The Company’s valuation techniques include basis adjustments to the foregoing price inputs for quality, such as sulfur and ash content, location differentials, expressed as port and freight costs, and credit risk. The Company’s risk management function independently validates the Company’s valuation inputs, including unobservable inputs, with third-party information and settlement prices from other sources where available. A daily process is performed to analyze market price changes and changes to the portfolio. Further periodic validation occurs at the time contracts are settled with the counterparty. These valuation techniques have been consistently applied in all periods presented, and the Company believes it has obtained the most accurate information available for the types of derivative contracts held.Significant increases or decreases in the inputs in isolation could result in a significantly higher or lower fair value measurement. The unobservable inputs do not have a direct interrelationship; therefore, a change in one unobservable input would not necessarily correspond with a change in another unobservable input.

Fair Value, Assets, Transfers Between Levels

The Company’s policy is to value all transfers between levels using the beginning of period valuation.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Revenue Recognition [Abstract]

Disaggregation of Revenue by Product Type and Market

With respect to its seaborne mining 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.

	Three Months Ended March 31, 2022
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	40.4	$	—	$	251.5	$	199.9	$	—	$	491.8
Export	210.5		—		—		—		—		210.5
Total thermal	250.9		—		251.5		199.9		—		702.3
Metallurgical coal
Export	—		318.0		—		—		—		318.0
Total metallurgical	—		318.0		—		—		—		318.0
Other (2)	0.3		3.3		(0.3)		3.2		(335.4)		(328.9)
Revenue	$	251.2	$	321.3	$	251.2	$	203.1	$	(335.4)	$	691.4

	Three Months Ended March 31, 2021
	Seaborne Thermal Mining		Seaborne Metallurgical Mining		Powder River Basin Mining		Other U.S. Thermal Mining		Corporate and Other (1)		Consolidated
	(Dollars in millions)
Thermal coal
Domestic	$	44.1	$	—	$	228.4	$	146.8	$	—	$	419.3
Export	131.9		—		—		—		—		131.9
Total thermal	176.0		—		228.4		146.8		—		551.2
Metallurgical coal
Export	—		86.6		—		—		—		86.6
Total metallurgical	—		86.6		—		—		—		86.6
Other (2)	0.4		0.9		—		2.5		9.7		13.5
Revenue	$	176.4	$	87.5	$	228.4	$	149.3	$	9.7	$	651.3

(1)    Corporate and Other revenue includes net losses related to unrealized mark-to-market adjustments on derivatives related to forecasted sales and other financial trading activity of $290.2 million and $4.9 million during the three months ended March 31, 2022 and 2021, respectively. Refer to Note 7. “Derivatives and Fair Value Measurements” for additional information. Also included in Corporate and Other revenue is revenue with customers of $19.0 million and $17.9 million during the three months ended March 31, 2022 and 2021, respectively.

(2)    Other 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 and property and facility rentals.

Schedule of Accounts Receivable

“Accounts receivable, net” at March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Trade receivables, net	$	323.4	$	307.0
Miscellaneous receivables, net	34.0		43.5
Accounts receivable, net	$	357.4	$	350.5

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Summarized Results Of Discontinued Operations

Results from discontinued operations were as follows during the periods presented below:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from discontinued operations, net of income taxes	$	(0.8)	$	(2.0)

Liabilities of Discontinued Operations

Liabilities classified as discontinued operations included in the Company’s condensed consolidated balance sheets were as follows:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Liabilities:
Accounts payable and accrued expenses	$	45.0	$	45.0
Other noncurrent liabilities	58.7		59.0
Total liabilities classified as discontinued operations	$	103.7	$	104.0

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Inventories (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories, net” as of March 31, 2022 and December 31, 2021 consisted of the following:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Materials and supplies, net	$	112.8	$	102.1
Raw coal	46.9		54.6
Saleable coal	109.4		70.0
Inventories, net	$	269.1	$	226.7

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Derivatives and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The fair value of derivatives reflected in the accompanying condensed consolidated balance sheets are set forth in the table below.

	March 31, 2022				December 31, 2021
	Asset Derivative		Liability Derivative		Asset Derivative		Liability Derivative
	(Dollars in millions)
Foreign currency option contracts	$	6.3	$	—	$	1.4	$	—
Derivative contracts related to forecasted sales	133.2		(558.1)		59.5		(184.2)
Financial trading contracts	13.5		—		3.4		—
Total derivatives	153.0		(558.1)		64.3		(184.2)
Effect of counterparty netting	(133.2)		133.2		(59.5)		59.5
Variation margin (received) posted	(13.5)		360.6		(3.4)		95.2
Net derivatives and variation margin as classified in the balance sheets	$	6.3	$	(64.3)	$	1.4	$	(29.5)

Derivative Instruments, Gain (Loss)

The tables below show the amounts of pre-tax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.

		Three Months Ended March 31, 2022
		Total gain (loss) recognized in income		Loss realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	2.3	$	(1.0)	$	3.3
Derivative contracts related to forecasted sales	Revenue	(369.0)		(68.0)		(301.0)
Financial trading contracts	Revenue	10.1		(0.7)		10.8
Total		$	(356.6)	$	(69.7)	$	(286.9)
		Three Months Ended March 31, 2021 (1)
		Total loss recognized in income		Gain (loss) realized in income on derivatives		Unrealized loss recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(2.9)	$	4.7	$	(7.6)
Derivative contracts related to forecasted sales	Revenue	(9.7)		(7.9)		(1.8)
Financial trading contracts	Revenue	(0.7)		2.4		(3.1)
Total		$	(13.3)	$	(0.8)	$	(12.5)

(1)    ‘Results realized in income on derivatives’ has been revised to exclude revenue arising from coal deliveries earned by the Company’s trading and brokerage function of $17.9 million for the three months ended March 31, 2021, to be comparable to the presentation of the 2022 amounts.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables set forth the hierarchy of the Company’s net (liability) asset positions for which fair value is measured on a recurring basis. Variation margin cash associated with the derivative balances is excluded from this table.

	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	6.3	$	—	$	6.3
Derivative contracts related to forecasted sales	—		(424.9)		—		(424.9)
Financial trading contracts	—		13.5		—		13.5
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(405.1)	$	4.0	$	(401.1)
	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.4	$	—	$	1.4
Derivative contracts related to forecasted sales	—		(124.7)		—		(124.7)
Financial trading contracts	—		3.4		—		3.4
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(119.9)	$	4.0	$	(115.9)

Carrying Amounts And Estimated Fair Values Of Companys Debt

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.

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Total debt at par value	$	1,129.9	$	1,173.2
Less: Unamortized debt issuance costs and original issue discount	(31.8)		(35.4)
Net carrying amount	$	1,098.1	$	1,137.8
Estimated fair value	$	1,277.3	$	1,136.5

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Property, Plant, Equipment and Mine Development (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant, Equipment and Mine Development

The composition of property, plant, equipment and mine development, net, as of March 31, 2022 and December 31, 2021 is set forth in the table below:

	March 31, 2022		December 31, 2021
	(Dollars in millions)
Land and coal interests	$	2,494.1	$	2,494.1
Buildings and improvements	590.2		550.8
Machinery and equipment	1,370.9		1,386.2
Less: Accumulated depreciation, depletion and amortization	(1,551.9)		(1,480.5)
Property, plant, equipment and mine development, net	$	2,903.3	$	2,950.6

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Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Components of Lease Expense

The components of lease expense during the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Operating lease cost:
Operating lease cost	$	4.7	$	6.0
Short-term lease cost	6.3		3.4
Variable lease cost	1.6		0.5
Sublease income	(0.4)		(0.5)
Total operating lease cost	$	12.2	$	9.4
Finance lease cost:
Amortization of right-of-use assets	$	1.5	$	0.6
Interest on lease liabilities	0.6		0.5
Total finance lease cost	$	2.1	$	1.1

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases at March 31, 2022 and December 31, 2021 was as follows:

	March 31, 2022			December 31, 2021
	(Dollars in millions)
Operating leases:
Operating lease right-of-use assets	$	33.0		$	35.5
Accounts payable and accrued expenses	$	16.1		$	16.4
Operating lease liabilities, less current portion	24.6			27.2
Total operating lease liabilities	$	40.7		$	43.6
Finance leases:
Property, plant, equipment and mine development	$	32.4		$	32.2
Accumulated depreciation	(9.0)			(7.4)
Property, plant, equipment and mine development, net	$	23.4		$	24.8
Current portion of long-term debt	$	15.0		$	15.3
Long-term debt, less current portion	12.6			14.0
Total finance lease liabilities	$	27.6		$	29.3
Weighted average remaining lease term (years)
Operating leases	2.9
Finance leases	6.7
Weighted average discount rate
Operating leases	7.0		%
Finance leases	8.2		%

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5.9	$	8.3
Operating cash flows for finance leases	0.6		0.7
Financing cash flows for finance leases	2.2		1.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1.6		3.1
Finance leases	—		3.6

Lessee, Operating Lease, Liability, Maturity

The contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2022	$	13.7	$	8.7
2023	17.6		6.0
2024	6.3		5.1
2025	3.6		4.9
2026	3.6		2.5
2027 and thereafter	0.8		7.2
Total lease payments	45.6		34.4
Less imputed interest	(4.9)		(6.8)
Total lease liabilities	$	40.7	$	27.6

Finance Lease, Liability, Maturity

The contractual maturities of lease liabilities were as follows:

Period Ending December 31,	Operating Leases		Finance Leases
	(Dollars in millions)
2022	$	13.7	$	8.7
2023	17.6		6.0
2024	6.3		5.1
2025	3.6		4.9
2026	3.6		2.5
2027 and thereafter	0.8		7.2
Total lease payments	45.6		34.4
Less imputed interest	(4.9)		(6.8)
Total lease liabilities	$	40.7	$	27.6

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Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The Company’s total funded indebtedness (Indebtedness) as of March 31, 2022 and December 31, 2021 consisted of the following:

Debt Instrument (defined below, as applicable)	March 31, 2022		December 31, 2021
	(Dollars in millions)
6.000% Senior Secured Notes due March 2022 (2022 Notes)	$	—	$	23.1
8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)	—		62.6
10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)	193.6		193.9
Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)	188.8		206.0
6.375% Senior Secured Notes due March 2025 (2025 Notes)	77.5		334.9
Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)	321.8		322.8
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	320.0		—
Finance lease obligations	27.6		29.3
Less: Debt issuance costs	(31.2)		(34.8)
	1,098.1		1,137.8
Less: Current portion of long-term debt	19.1		59.6
Long-term debt	$	1,079.0	$	1,078.2

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Pension and Postretirement Benefit Costs (Tables)

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

Net periodic pension credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Interest cost on projected benefit obligation	$	5.3	$	5.1
Expected return on plan assets	(5.9)		(5.7)
Net periodic pension credit	$	(0.6)	$	(0.6)

Net periodic postretirement benefit credit included the following components:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Service cost for benefits earned	$	0.2	$	0.2
Interest cost on accumulated postretirement benefit obligation	1.7		2.9
Expected return on plan assets	(0.2)		(0.2)
Amortization of prior service credit	(13.4)		(11.0)
Net periodic postretirement benefit credit	$	(11.7)	$	(8.1)

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

After-tax components of comprehensive income (loss)

The following table sets forth the after-tax components of accumulated other comprehensive income and changes thereto recorded during the three months ended March 31, 2022:

	Foreign Currency Translation Adjustment		Prior Service Credit Associated with Postretirement Plans		Total Accumulated Other Comprehensive Income
	(Dollars in millions)
December 31, 2021	$	0.8	$	297.1	$	297.9
Reclassification from other comprehensive income to earnings	—		(13.4)		(13.4)
Current period change	1.9		—		1.9
March 31, 2022	$	2.7	$	283.7	$	286.4

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Earnings per Share (EPS) (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Allocation Method Utilized in the Calculation of Basic and Diluted EPS

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

	Three Months Ended March 31,
	2022		2021
	(In millions, except per share data)
EPS numerator:
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)		0.4
Loss from continuing operations attributable to common stockholders	(118.7)		(78.1)
Loss from discontinued operations, net of income taxes	(0.8)		(2.0)
Net loss attributable to common stockholders	$	(119.5)	$	(80.1)
EPS denominator:
Weighted average shares outstanding — basic and diluted	136.2		98.4
Basic and diluted EPS attributable to common stockholders:
Loss from continuing operations	$	(0.87)	$	(0.79)
Loss from discontinued operations	(0.01)		(0.02)
Net loss attributable to common stockholders	$	(0.88)	$	(0.81)

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Reportable Segment Results

Reportable segment results were as follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Revenue:
Seaborne Thermal Mining	$	251.2	$	176.4
Seaborne Metallurgical Mining	321.3		87.5
Powder River Basin Mining	251.2		228.4
Other U.S. Thermal Mining	203.1		149.3
Corporate and Other	(335.4)		9.7
Total	$	691.4	$	651.3
Adjusted EBITDA:
Seaborne Thermal Mining	$	90.5	$	28.5
Seaborne Metallurgical Mining	181.0		(22.4)
Powder River Basin Mining	7.6		30.1
Other U.S. Thermal Mining	50.0		36.2
Corporate and Other	(1.6)		(11.3)
Total	$	327.5	$	61.1

Reconciliation of Consolidated (Loss) Income from Continuing Operations, Net of Income Taxes to Adjusted EBITDA

A reconciliation of consolidated loss from continuing operations, net of income taxes to Adjusted EBITDA follows:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Loss from continuing operations, net of income taxes	$	(119.8)	$	(77.7)
Depreciation, depletion and amortization	72.9		68.3
Asset retirement obligation expenses	15.0		15.9
Restructuring charges	1.6		2.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	(0.6)		(1.5)
Interest expense	39.4		52.4
Net loss (gain) on early debt extinguishment	23.5		(3.5)
Interest income	(0.5)		(1.5)
Unrealized losses on derivative contracts related to forecasted sales	301.0		1.9
Unrealized (gains) losses on foreign currency option contracts	(3.3)		7.6
Take-or-pay contract-based intangible recognition	(0.7)		(1.1)
Income tax benefit	(1.0)		(1.8)
Adjusted EBITDA	$	327.5	$	61.1

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Basis of Presentation - Additional Information (Details) - Surety Bond - USD ($) $ in Millions	Jan. 31, 2022	Nov. 06, 2020
Debt Instrument [Line Items]
Transaction support agreements, additional collateral to be posted		$ 75.0
Transaction support agreements, additional collateral to be posted per year through 2025	$ 13.0	$ 25.0

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Revenue Recognition - Revenue by Product Type and Market (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 691.4	$ 651.3
Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	702.3	551.2
Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	318.0	86.6
Coal [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,039.0	656.0
Other (2)
Disaggregation of Revenue [Line Items]
Revenue	(328.9)	13.5
Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	491.8	419.3
Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	210.5	131.9
Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	318.0	86.6
Seaborne Thermal Mining
Disaggregation of Revenue [Line Items]
Revenue	251.2	176.4
Seaborne Thermal Mining | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	250.9	176.0
Seaborne Thermal Mining | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Seaborne Thermal Mining | Other (2)
Disaggregation of Revenue [Line Items]
Revenue	0.3	0.4
Seaborne Thermal Mining | Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	40.4	44.1
Seaborne Thermal Mining | Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	210.5	131.9
Seaborne Thermal Mining | Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Seaborne Metallurgical Mining
Disaggregation of Revenue [Line Items]
Revenue	321.3	87.5
Seaborne Metallurgical Mining | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Seaborne Metallurgical Mining | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	318.0	86.6
Seaborne Metallurgical Mining | Other (2)
Disaggregation of Revenue [Line Items]
Revenue	3.3	0.9
Seaborne Metallurgical Mining | Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Seaborne Metallurgical Mining | Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Seaborne Metallurgical Mining | Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	318.0	86.6
Powder River Basin Mining
Disaggregation of Revenue [Line Items]
Revenue	251.2	228.4
Powder River Basin Mining | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	251.5	228.4
Powder River Basin Mining | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Powder River Basin Mining | Other (2)
Disaggregation of Revenue [Line Items]
Revenue	(0.3)	0.0
Powder River Basin Mining | Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	251.5	228.4
Powder River Basin Mining | Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Powder River Basin Mining | Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Other U.S. Thermal Mining
Disaggregation of Revenue [Line Items]
Revenue	203.1	149.3
Other U.S. Thermal Mining | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	199.9	146.8
Other U.S. Thermal Mining | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Other U.S. Thermal Mining | Other (2)
Disaggregation of Revenue [Line Items]
Revenue	3.2	2.5
Other U.S. Thermal Mining | Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	199.9	146.8
Other U.S. Thermal Mining | Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Other U.S. Thermal Mining | Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Corporate and Other (1)
Disaggregation of Revenue [Line Items]
Revenue	(335.4)	9.7
Corporate and Other (1) | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Corporate and Other (1) | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Corporate and Other (1) | Other (2)
Disaggregation of Revenue [Line Items]
Revenue	335.4	(9.7)
Corporate and Other (1) | Domestic | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Corporate and Other (1) | Export | Thermal coal
Disaggregation of Revenue [Line Items]
Revenue	0.0	0.0
Corporate and Other (1) | Export | Metallurgical coal
Disaggregation of Revenue [Line Items]
Revenue	$ 0.0	$ 0.0

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Revenue Recognition - Accounts Receivable (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Revenue Recognition [Abstract]
Trade receivables, net	$ 323.4	$ 307.0
Miscellaneous receivables, net	34.0	43.5
Accounts receivable, net	$ 357.4	$ 350.5

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Revenue Recognition - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Contract with customer, liability	$ 5,100,000,000
Accounts receivable, credit loss expense (reversal)		$ 0
Revenue	$ 691,400,000	651,300,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	48.00%
Revenue	$ 691,400,000	651,300,000
Trading and Brokerage Coal Deliveries
Disaggregation of Revenue [Line Items]
Revenue		17,900,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue		17,900,000
Coal [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,039,000,000	656,000,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	1,039,000,000	656,000,000
Designated as Hedging Instrument
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unrealized gain (loss) recognized in income on derivatives	(286,900,000)	(12,500,000)
Unrealized gain (loss) recognized in income on derivatives	(286,900,000)	(12,500,000)
Corporate and Other (1)
Disaggregation of Revenue [Line Items]
Revenue	(335,400,000)	9,700,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	(335,400,000)	9,700,000
Corporate and Other (1) | Trading and Brokerage Coal Deliveries
Disaggregation of Revenue [Line Items]
Revenue	19,000,000	17,900,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	19,000,000	17,900,000
Coal Contract and Physical commodity purchase / sale contracts | Designated as Hedging Instrument
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Unrealized gain (loss) recognized in income on derivatives	(290,200,000)	(4,900,000)
Unrealized gain (loss) recognized in income on derivatives	$ (290,200,000)	$ (4,900,000)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, period	12 months
Trade receivables
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Accounts receivable, allowance for credit loss	$ 0		$ 0
Accounts receivable, allowance for credit loss	0		0
Miscellaneous Receivables
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Accounts receivable, allowance for credit loss	0		0
Accounts receivable, allowance for credit loss	$ 0		$ 0

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Discontinued Operations - Loss, Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of income taxes	$ (0.8)	$ (2.0)
Discontinued Operations, Held-for-sale or Disposed of by Sale
Liabilities:
Accounts payable and accrued expenses	45.0		$ 45.0
Other noncurrent liabilities	58.7		59.0
Total liabilities classified as discontinued operations	$ 103.7		$ 104.0

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Discontinued Operations - Patriot Related Matters (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Oct. 09, 2015 buyer	Dec. 31, 2007 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of income taxes	$ 800,000	$ 2,000,000.0
Accounts receivable, credit loss expense (reversal)		$ 0
Patriot
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of buyers | buyer				2
Spinoff | Patriot | Black Lung Occupational Disease Liability
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Initially determined potential exposure from patriot bankruptcy	$ 87,100,000		$ 87,200,000		$ 150,000,000

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Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Materials and supplies, net	$ 112.8	$ 102.1
Raw coal	46.9	54.6
Saleable coal	109.4	70.0
Inventories, net	269.1	226.7
Material and supplies
Inventory [Line Items]
inventory reserves	$ 9.0	$ 9.0

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Equity Method Investments (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2022 AUD ($)	Dec. 31, 2021 USD ($)
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 62.9			$ 62.2
Income (Loss) from Equity Method Investments	44.7	$ (0.9)
Cash receipts from Middlemount Coal Pty Ltd and other related parties	47.2	2.3
Middlemount Mine
Schedule of Equity Method Investments [Line Items]
Cash receipts from Middlemount Coal Pty Ltd and other related parties	$ (47.0)	(2.3)
Equity interest percentage of revolving loans limit	50.00%		50.00%
Revolving loan limit			$ 50,000,000
Financing receivable, stated interest rate (in percent)	10.00%
Middlemount Mine
Schedule of Equity Method Investments [Line Items]
Income (Loss) from Equity Method Investments	$ 45.1	$ (0.9)

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Derivatives and Fair Value Measurements - Narrative (Details)	3 Months Ended			6 Months Ended
	Jun. 30, 2022 t	Mar. 31, 2022 USD ($) t	Mar. 31, 2021 USD ($)	Jun. 30, 2022 t	Dec. 31, 2022 USD ($) $ / $	Mar. 31, 2022 AUD ($)	Dec. 31, 2021 USD ($)
Derivatives, Fair Value [Line Items]
Derivative, initial margin posted		$ 481,700,000					$ 130,100,000
Proceeds from common stock issuances, net of costs		222,000,000.0	$ 0
Net loss (gain) on early debt extinguishment		$ (23,500,000)	3,500,000
Unobservable Measurement Input, Uncertainty, Description		10
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset [Abstract]
Revenue		$ 691,400,000	651,300,000
Trading and Brokerage Coal Deliveries
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset [Abstract]
Revenue			17,900,000
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Variation margin (received) posted		13,500,000					3,400,000
Unrealized gain (loss) recognized in income on derivatives		(286,900,000)	(12,500,000)
Designated as Hedging Instrument | Net Amount
Derivatives, Fair Value [Line Items]
Variation margin (received) posted		347,100,000					91,800,000
Foreign currency option contracts
Derivatives, Fair Value [Line Items]
Notional amount						$ 705,000,000
Foreign currency option contracts | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		$ 3,300,000	(7,600,000)
Financial trading contracts
Derivatives, Fair Value [Line Items]
Derivative notional amount (in tonnes) | t		1,600,000
Financial trading contracts | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		$ 10,800,000	(3,100,000)
Diesel Fuel Hedge Contracts
Derivatives, Fair Value [Line Items]
Notional amount						$ 0
Coal Contract and Physical commodity purchase / sale contracts | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		(290,200,000)	(4,900,000)
Gain (Loss) on Derivative Instruments | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		(237,000,000)
Forward Contracts | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		(64,000,000)
Derivative contracts related to forecasted sales | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Unrealized gain (loss) recognized in income on derivatives		(301,000,000.0)	$ (1,800,000)
Forecast
Derivatives, Fair Value [Line Items]
Price per ton					$ 84
Forecast | Foreign currency option contracts
Derivatives, Fair Value [Line Items]
Derivative, exchange rate floor (in dollars per share) | $ / $					0.76
Derivative, exchange rate cap (in dollars per share) | $ / $					0.80
Forecast | Financial trading contracts
Derivatives, Fair Value [Line Items]
Derivative notional amount (in tonnes) | t	300,000			1,300,000
Forecast | Coal Contract to settle in 2022
Derivatives, Fair Value [Line Items]
Derivative notional amount (in tonnes) | t				600,000
Forecast | Coal Contract to settle in 2023
Derivatives, Fair Value [Line Items]
Derivative notional amount (in tonnes) | t				700,000
Coal Trading
Derivatives, Fair Value [Line Items]
Derivative, initial margin posted		$ 134,600,000					$ 38,300,000

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Derivatives and Fair Value Measurements - Derivatives by Balance Sheet Classification (Details) - Designated as Hedging Instrument - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Asset Derivative
Derivative Asset, Fair Value, Gross Asset	$ 153.0	$ 64.3
Effect of counterparty netting	(133.2)	(59.5)
Variation margin (received) posted	(13.5)	(3.4)
Net derivatives and variation margin as classified in the balance sheets	6.3	1.4
Liability Derivative
Liability Derivative	(558.1)	(184.2)
Effect of counterparty netting	133.2	59.5
Net derivatives and variation margin as classified in the balance sheets	(64.3)	(29.5)
Gross Amount
Liability Derivative
Variation margin (received) posted	360.6	95.2
Foreign currency option contracts
Asset Derivative
Derivative Asset, Fair Value, Gross Asset	6.3	1.4
Liability Derivative
Liability Derivative	0.0	0.0
Derivative contracts related to forecasted sales
Asset Derivative
Derivative Asset, Fair Value, Gross Asset	133.2	59.5
Liability Derivative
Liability Derivative	(558.1)	(184.2)
Financial trading contracts
Asset Derivative
Derivative Asset, Fair Value, Gross Asset	13.5	3.4
Liability Derivative
Liability Derivative	$ 0.0	$ 0.0

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Derivatives and Fair Value Measurements - Gains and Losses on Hedging Derivatives (Details) - Designated as Hedging Instrument - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Total gain (loss) recognized in income	$ (356.6)	$ (13.3)
Loss realized in income on derivatives	(69.7)	(0.8)
Unrealized gain (loss) recognized in income on derivatives	(286.9)	(12.5)
Foreign currency option contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total gain (loss) recognized in income	2.3	(2.9)
Loss realized in income on derivatives	(1.0)	4.7
Unrealized gain (loss) recognized in income on derivatives	3.3	(7.6)
Derivative contracts related to forecasted sales
Derivative Instruments, Gain (Loss) [Line Items]
Total gain (loss) recognized in income	(369.0)	(9.7)
Loss realized in income on derivatives	(68.0)	(7.9)
Unrealized gain (loss) recognized in income on derivatives	(301.0)	(1.8)
Financial trading contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total gain (loss) recognized in income	10.1	(0.7)
Loss realized in income on derivatives	(0.7)	2.4
Unrealized gain (loss) recognized in income on derivatives	$ 10.8	$ (3.1)

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Derivatives and Fair Value Measurements - Financial Instruments Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivative [Line Items]
Derivative assets (liabilities), at fair value	$ (401.1)	$ (115.9)
Equity securities	4.0	4.0
Level 1
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Equity securities	0.0	0.0
Level 2
Derivative [Line Items]
Derivative assets (liabilities), at fair value	(405.1)	(119.9)
Equity securities	0.0	0.0
Level 3
Derivative [Line Items]
Derivative assets (liabilities), at fair value	4.0	4.0
Equity securities	4.0	4.0
Foreign currency option contracts
Derivative [Line Items]
Derivative assets (liabilities), at fair value	6.3	1.4
Foreign currency option contracts | Level 1
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Foreign currency option contracts | Level 2
Derivative [Line Items]
Derivative assets (liabilities), at fair value	6.3	1.4
Foreign currency option contracts | Level 3
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Derivative contracts related to forecasted sales
Derivative [Line Items]
Derivative assets (liabilities), at fair value	(424.9)	(124.7)
Derivative contracts related to forecasted sales | Level 1
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Derivative contracts related to forecasted sales | Level 2
Derivative [Line Items]
Derivative assets (liabilities), at fair value	(424.9)	(124.7)
Derivative contracts related to forecasted sales | Level 3
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Financial trading contracts
Derivative [Line Items]
Derivative assets (liabilities), at fair value	13.5	3.4
Financial trading contracts | Level 1
Derivative [Line Items]
Derivative assets (liabilities), at fair value	0.0	0.0
Financial trading contracts | Level 2
Derivative [Line Items]
Derivative assets (liabilities), at fair value	13.5	3.4
Financial trading contracts | Level 3
Derivative [Line Items]
Derivative assets (liabilities), at fair value	$ 0.0	$ 0.0

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Derivatives and Fair Value Measurements - Long-term debt (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Net carrying amount	$ 1,098.1	$ 1,137.8
Carrying amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total debt at par value	1,129.9	1,173.2
Less: Unamortized debt issuance costs and original issue discount	(31.8)	(35.4)
Net carrying amount	1,098.1	1,137.8
Estimated fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	$ 1,277.3	$ 1,136.5

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Property, Plant, Equipment and Mine Development (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Less: Accumulated depreciation, depletion and amortization	$ (1,551.9)	$ (1,480.5)
Property, plant, equipment and mine development, net	2,903.3	2,950.6
Land and coal interests
Property, Plant and Equipment [Line Items]
Property, Plant, Equipment, and mine development, gross	2,494.1	2,494.1
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, Plant, Equipment, and mine development, gross	590.2	550.8
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, Plant, Equipment, and mine development, gross	$ 1,370.9	$ 1,386.2

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Property, Plant, Equipment and Mine Development - Narrative (Details)	Mar. 31, 2022 USD ($)
Impaired Long-Lived Assets Held and Used [Line Items]
At-risk assets	$ 500,000,000
Other US Mining Operations
Impaired Long-Lived Assets Held and Used [Line Items]
At-risk assets	$ 0

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Leases - Narrative (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)
Lessor, Lease, Description [Line Items]
Lease obligation, assumed amount recoverable from third parties	$ 0
Maximum
Lessor, Lease, Description [Line Items]
Operating and finance leases remaining lease term	19 years 9 months 18 days
Minimum
Lessor, Lease, Description [Line Items]
Operating and finance leases remaining lease term	1 year

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Leases - Supplemental Income Statement Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating lease cost:
Operating lease cost	$ 4.7	$ 6.0
Short-term lease cost	6.3	3.4
Variable lease cost	1.6	0.5
Sublease income	(0.4)	(0.5)
Total operating lease cost	12.2	9.4
Finance lease cost:
Amortization of right-of-use assets	1.5	0.6
Interest on lease liabilities	0.6	0.5
Total finance lease cost	$ 2.1	$ 1.1

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Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Operating leases:
Operating lease right-of-use assets	$ 33.0	$ 35.5
Accounts payable and accrued expenses	16.1	16.4
Operating lease liabilities, less current portion	24.6	27.2
Total operating lease liabilities	40.7	43.6
Finance leases:
Property, plant, equipment and mine development	32.4	32.2
Accumulated depreciation	(9.0)	(7.4)
Property, plant, equipment and mine development, net	23.4	24.8
Current portion of long-term debt	15.0	15.3
Long-term debt, less current portion	12.6	14.0
Total finance lease liabilities	$ 27.6	$ 29.3
Weighted average remaining lease term (years)
Operating leases	2 years 10 months 24 days
Finance leases	6 years 8 months 12 days
Weighted average discount rate
Operating leases	7.00%
Finance leases	8.20%

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$ 5.9	$ 8.3
Operating cash flows for finance leases	0.6	0.7
Financing cash flows for finance leases	2.2	1.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1.6	3.1
Finance leases	$ 0.0	$ 3.6

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Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Operating Leases
2022	$ 13.7
2023	17.6
2024	6.3
2025	3.6
2026	3.6
2027 and thereafter	0.8
Total lease payments	45.6
Less imputed interest	(4.9)
Total operating lease liabilities	40.7	$ 43.6
Finance Leases
2022	8.7
2023	6.0
2024	5.1
2025	4.9
2026	2.5
2027 and thereafter	7.2
Total lease payments	34.4
Less imputed interest	(6.8)
Total finance lease liabilities	$ 27.6	$ 29.3

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Taxes
Income tax provision (benefit)	$ (1.0)	$ (1.8)
Foreign Tax Authority
Income Taxes
Income tax provision (benefit)	$ 1.6	$ (0.2)

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Long-term Debt - Schedule of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Finance lease obligations	$ 27.6	$ 29.3
Less: Debt issuance costs	(31.2)	(34.8)
Total debt	1,098.1	1,137.8
Less: Current portion of long-term debt	19.1	59.6
Long-term debt	1,079.0	1,078.2
Senior Notes | 6.000% Senior Secured Notes due March 2022 (2022 Notes)
Debt Instrument [Line Items]
Long-term debt	$ 0.0	23.1
Stated interest rate	6.00%
Senior Notes | 8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)
Debt Instrument [Line Items]
Long-term debt	$ 0.0	62.6
Stated interest rate	8.50%
Senior Notes | 10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)
Debt Instrument [Line Items]
Long-term debt	$ 193.6	193.9
Stated interest rate	10.00%
Senior Notes | 6.375% Senior Secured Notes due March 2025 (2025 Notes)
Debt Instrument [Line Items]
Long-term debt	$ 77.5	334.9
Stated interest rate	6.375%
Term Loan | Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)
Debt Instrument [Line Items]
Long-term debt	$ 188.8	206.0
Term Loan | Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)
Debt Instrument [Line Items]
Long-term debt	$ 321.8	$ 322.8

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Long-term Debt - Narrative (Details)		3 Months Ended		12 Months Ended
	Mar. 07, 2022 USD ($)	Mar. 31, 2022 USD ($) d $ / shares shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) shares	Mar. 01, 2025	Mar. 01, 2022 USD ($)	Feb. 24, 2022 $ / shares	Jan. 29, 2021 USD ($)	Nov. 06, 2020 USD ($)
Debt Instrument [Line Items]
Debt issuance cost		$ 31,200,000		$ 34,800,000
Interest expense		39,400,000	$ 52,400,000
Net loss (gain) on early debt extinguishment		23,500,000	(3,500,000)
Total finance lease liabilities		27,600,000		$ 29,300,000
Letters of credit outstanding, amount		469,100,000
Proceeds from common stock issuances, net of costs		222,000,000.0	0
Proceeds from (Payments for) Deposits Applied to Debt Retirements		270,900,000
Payments for Deposits Applied to Debt Retirements		232,400,000
Interest Paid, Capitalized, Investing Activities		37,200,000	56,300,000
Extinguishment of Debt, Gain (Loss), Net of Tax		$ 23,000,000
Letter of Credit
Debt Instrument [Line Items]
Stated interest rate		0.75%
Line of credit facility, maximum borrowing capacity		$ 250,000,000
Common Stock
Debt Instrument [Line Items]
Common stock, shares issued (in shares) | shares		187,000,000.0		176,300,000
Common stock, shares authorized (in shares) | shares		450,000,000.0		450,000,000.0
Sale of Stock, Number of Shares Issued in Transaction | shares		10,000,000
Shares Issued, Price Per Share | $ / shares							$ 14.98
At Market Issuance
Debt Instrument [Line Items]
Sale of Stock, Number of Shares Issued in Transaction | shares				24,800,000
At Market Issuance | Common Stock
Debt Instrument [Line Items]
Sale of Stock, Description of Transaction	225.0 million
Common Stock
Debt Instrument [Line Items]
Proceeds from common stock issuances, net of costs		$ 106,100,000
Common Stock | At Market Issuance
Debt Instrument [Line Items]
Proceeds from common stock issuances, net of costs				$ 269,800,000
3.250% Convertible Senior Notes due March 2028
Debt Instrument [Line Items]
Interest expense		$ 1,000,000
10.00% Revolving Credit Facility maturing 2025
Debt Instrument [Line Items]
Line of Credit Facility, Borrowing Capacity, Description		225.0 million
Proceeds from lines of credit		$ 222,000,000
10.00% Revolving Credit Facility maturing 2025 | At Market Issuance | Common Stock
Debt Instrument [Line Items]
Sale of Stock, Number of Shares Issued in Transaction | shares		10,100,000
Surety Bond | Letter of Credit
Debt Instrument [Line Items]
Interest expense		$ 13,500,000	$ 10,900,000
Senior Notes | 6.000% Senior Secured Notes due March 2022 (2022 Notes)
Debt Instrument [Line Items]
Stated interest rate		6.00%
Long-term debt		$ 0		23,100,000
Payments for Deposits Applied to Debt Retirements		$ 23,100,000
Senior Notes | 6.375% Senior Secured Notes due March 2025 (2025 Notes)
Debt Instrument [Line Items]
Stated interest rate		6.375%
Long-term debt		$ 77,500,000		334,900,000
Debt Instrument, Debt Default, Amount		$ 257,400,000
Senior Notes | 8.500% Senior Secured Notes due December 2024 (2024 Peabody Notes)
Debt Instrument [Line Items]
Stated interest rate		8.50%
Long-term debt		$ 0		62,600,000
Debt Instrument, Exchange Offer, Required Purchase Amount				$ 38,600,000
Debt Instrument, Exchange Offer, Required Purchase, Percentage Of Accreted Value		0.25		0.94940
Debt Instrument Exchanged, Aggregate Principal Amount		$ 30,000,000		$ 100,000
Cash collateral or restricted cash requirement		$ 28,500,000
Senior Notes | 10.000% Senior Secured Notes due December 2024 (2024 Co-Issuer Notes)
Debt Instrument [Line Items]
Stated interest rate		10.00%
Net loss (gain) on early debt extinguishment		$ (500,000)
Long-term debt		193,600,000		193,900,000
Debt Instrument, Covenant, Liquidity Attributable To Co-Issuers								$ 60,000,000
Mandatory principal prepayment, if required, period payable, threshold		$ 105,600,000
Senior Notes | 3.250% Convertible Senior Notes due March 2028
Debt Instrument [Line Items]
Stated interest rate		3.25%
Long-term debt		$ 320,000,000.0		0
Principal amount						$ 320,000,000
Debt Issuance Costs, Gross		$ 11,200,000
Debt Instrument, Convertible, Threshold Consecutive Trading Days | d		30
Debt Instrument, Principle Amount		$ 1,000
Common Stock, Excess of the Conversion Price, Percentage		1.30
Principle Amount, Percentage		0.98
Conversion of Stock, Shares Issued | shares		50.3816
Debt Instrument, Convertible, Conversion Price | $ / shares		$ 19.85
Conversion Price Premium, Percent							0.325
Aggregate Principle Amount, Notes Outstanding		$ 75,000,000
Senior Notes | 3.250% Convertible Senior Notes due March 2028 | Subsequent Event
Debt Instrument [Line Items]
Principle Amount, Percentage					1
Senior Notes | 10.00% Revolving Credit Facility maturing 2025
Debt Instrument [Line Items]
Stated interest rate		10.00%
Line of credit facility, maximum borrowing capacity	$ 150,000,000
Senior Notes | Peabody Notes
Debt Instrument [Line Items]
Debt Instrument, Debt Default, Amount		$ 62,600,000
Senior Notes | New Co-Issuer Term Note
Debt Instrument [Line Items]
Mandatory principal prepayment, if required, period payable, threshold		300,000
Term Loan | Senior Secured Term Loan due 2024 (Co-Issuer Term Loans)
Debt Instrument [Line Items]
Long-term debt		188,800,000		206,000,000.0
Term Loan | Senior Secured Term Loan due 2025, net of original issue discount (Senior Secured Term Loan)
Debt Instrument [Line Items]
Long-term debt		$ 321,800,000		$ 322,800,000
Term Loan | Successor Credit Agreement | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		2.75%
Line of credit | Letter of Credit
Debt Instrument [Line Items]
Debt Instrument, Covenant, Aggregate Liquidity At End Of Each Quarter		$ 125,000,000
Surety Bond
Debt Instrument [Line Items]
Transaction support agreements, additional collateral to be posted									$ 75,000,000
Loans | New Co-Issuer Term Loans
Debt Instrument [Line Items]
Mandatory principal prepayment, if required, period payable, threshold		$ 17,200,000

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Pension and Postretirement Benefit Costs - Schedule of Net Periodic Benefit (Benefit) Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Defined Benefit Plan Disclosure [Line Items]
Net periodic pension credit	$ (12.2)	$ (8.7)
Defined benefit pension plans
Defined Benefit Plan Disclosure [Line Items]
Interest cost on projected benefit obligation	5.3	5.1
Expected return on plan assets	(5.9)	(5.7)
Net periodic pension credit	(0.6)	(0.6)
Postretirement benefit plans
Defined Benefit Plan Disclosure [Line Items]
Service cost for benefits earned	0.2	0.2
Interest cost on projected benefit obligation	1.7	2.9
Expected return on plan assets	(0.2)	(0.2)
Amortization of prior service credit	(13.4)	(11.0)
Net periodic pension credit	$ (11.7)	$ (8.1)

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Pension and Postretirement Benefit Costs - Narrative (Details) $ in Millions	Mar. 31, 2022 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Liability for Future Policy Benefits, Individual and Group Annuities and Supplementary Contracts	$ 500.0
Defined benefit pension plans
Defined Benefit Plan Disclosure [Line Items]
Funding threshold	80.00%

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance, beginning of period	$ 1,820.8
Balance, end of period	1,896.9	$ 891.5
Postretirement plans (net of $0.0 tax provisions in each period)		11.0
Foreign Currency Translation Adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance, beginning of period	0.8
Reclassification from other comprehensive income to earnings	0.0
Current period change	1.9
Balance, end of period	2.7
Prior Service Credit Associated with Postretirement Plans
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance, beginning of period	297.1
Reclassification from other comprehensive income to earnings	(13.4)
Current period change	0.0
Balance, end of period	283.7
Total Accumulated Other Comprehensive Income
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance, beginning of period	297.9	205.8
Reclassification from other comprehensive income to earnings	(13.4)
Current period change	1.9
Balance, end of period	$ 286.4	$ 194.6

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Other Events - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Other Commercial Events [Line Items]
Restructuring charges	$ 1.6	$ 2.1

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Earnings per Share (EPS) - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Antidilutive shares excluded from EPS calculation (in shares)	1,200,000	1,300,000
Weighted average shares outstanding — basic and diluted	136,200,000	98,400,000
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Preferred Stock	5,500,000

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Earnings per Share (EPS) - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
EPS numerator:
Loss from continuing operations, net of income taxes	$ (119.8)	$ (77.7)
Less: Net (loss) income attributable to noncontrolling interests	(1.1)	0.4
Loss from continuing operations attributable to common stockholders	(118.7)	(78.1)
Loss from discontinued operations, net of income taxes	(0.8)	(2.0)
Net loss attributable to common stockholders	$ (119.5)	$ (80.1)
Basic EPS attributable to common stockholders:
Basic loss per share	$ (0.88)	$ (0.81)
Basic and diluted EPS attributable to common stockholders:
Loss from continuing operations	(0.87)	(0.79)
Loss from discontinued operations	(0.01)	(0.02)
Net loss attributable to common stockholders	$ (0.88)	$ (0.81)

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Financial Instruments and Other Guarantees (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Apr. 01, 2022	Jan. 31, 2022	Nov. 06, 2020	Apr. 03, 2017
Guarantee Obligations [Line Items]
Letters of credit outstanding, amount	$ 469.1
Surety bonds amount	1,484.9
Asset retirement obligations	724.5
Net interest expense	39.4	$ 52.4
Surety Bonds Outstanding For Reclamation	1,312.1
Letters of Credit Outstanding for Reclamation	340.0
Surety Bond
Guarantee Obligations [Line Items]
Transaction support agreements, additional collateral to be posted					$ 75.0
Transaction support agreements, additional collateral to be posted per year through 2025				$ 13.0	25.0
Debt instrument, transaction support agreements, fair value of second liens on mining equipment					200.0
Transaction support agreements, additional collateral term, free cash flow in any twelve-month period					100.0
Transaction support agreements, additional collateral term, sale of assets benchmark (in excess of)					$ 10.0
Accounts Receivable Securitization Program, April 1, 2022
Guarantee Obligations [Line Items]
Line of credit facility, maximum borrowing capacity						$ 250.0
Accounts Receivable Securitization Program, April 1, 2022 | Forecast
Guarantee Obligations [Line Items]
Line of credit facility, maximum borrowing capacity			$ 175.0
Accounts Receivable Securitization Program, April 1, 2022 | Secured debt
Guarantee Obligations [Line Items]
Outstanding borrowings	0.0
Net interest expense	0.9	$ 0.7
Accounts Receivable from Securitization	1.6
Cash Collateral for Borrowed Securities	24.7
Secured debt | Accounts Receivable Securitization Program, April 1, 2022
Guarantee Obligations [Line Items]
Letters of credit outstanding, amount	$ 161.8
Secured debt | Accounts Receivable Securitization Program, April 1, 2022 | London Interbank Offered Rate (LIBOR) Swap Rate
Guarantee Obligations [Line Items]
Basis spread on variable rate	2.10%
Letter of Credit
Guarantee Obligations [Line Items]
Line of credit facility, maximum borrowing capacity	$ 250.0
Cash Collateral, Percentage of the aggregate amount of letters of credit outstanding	103.00%
Stated interest rate	0.75%
Deposit Rate, Percentage, Cash Collateral Posted	0.0035
Letter of Credit | Maximum
Guarantee Obligations [Line Items]
Transaction support agreements, additional collateral demands	$ 5.0

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Commitments and Contingencies (Details) - Capital Addition Purchase Commitments $ in Millions	Mar. 31, 2022 USD ($)
Long-term Purchase Commitment [Line Items]
Unrecorded unconditional purchase obligation (within next five years)	$ 43.9
Unrecorded unconditional purchase obligation (within next 12 months)	$ 35.6

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Segment Information - Segment Results (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Reportable segment results
Revenue	$ 691.4	$ 651.3
Adjusted EBITDA	327.5	61.1
Seaborne Thermal Mining
Reportable segment results
Revenue	251.2	176.4
Adjusted EBITDA	90.5	28.5
Seaborne Metallurgical Mining
Reportable segment results
Revenue	321.3	87.5
Adjusted EBITDA	181.0	(22.4)
Powder River Basin Mining
Reportable segment results
Revenue	251.2	228.4
Adjusted EBITDA	7.6	30.1
Other U.S. Thermal Mining
Reportable segment results
Revenue	203.1	149.3
Adjusted EBITDA	50.0	36.2
Corporate and Other (1)
Reportable segment results
Revenue	(335.4)	9.7
Adjusted EBITDA	$ (1.6)	$ (11.3)

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Segment Information - Reconciliation to Adjusted EBITDA (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Loss from continuing operations, net of income taxes	$ (119.8)	$ (77.7)
Depreciation, depletion and amortization	72.9	68.3
Asset retirement obligation expenses	15.0	15.9
Restructuring charges	1.6	2.1
Changes in deferred tax asset valuation allowance and reserves and amortization of basis difference related to equity affiliates	(0.6)	(1.5)
Interest expense	39.4	52.4
Net loss (gain) on early debt extinguishment	23.5	(3.5)
Interest income	(0.5)	(1.5)
Unrealized losses on derivative contracts related to forecasted sales	301.0	1.9
Unrealized (gains) losses on foreign currency option contracts	(3.3)	7.6
Take-or-pay contract-based intangible recognition	(0.7)	(1.1)
Income tax benefit	(1.0)	(1.8)
Adjusted EBITDA	$ 327.5	$ 61.1