Core Viewpoint - Peabody Energy's stock price increased by 7% following the termination of a $3.8 billion acquisition deal for coking coal assets with Anglo American due to a fire at the Ambre Energy North Mine in Australia [1] Group 1: Company Actions and Statements - Peabody's CEO Jim Grech stated that the two companies could not reach an amended agreement to address the significant adverse changes caused by the fire [1] - The fire has resulted in substantial and long-term losses for Peabody, affecting the largest mine involved in the acquisition [1] - The mine was initially expected to achieve a saleable production of 5.3 million tons by 2025, but Peabody has not yet determined a timeline for resuming longwall mining at the expected production and cost levels [1] Group 2: Implications for Anglo American - The failure of the acquisition deal represents a significant blow to Anglo American, which had agreed to divest coal assets in November to streamline and focus on copper and iron ore businesses [1] - Anglo American contended that the mine and equipment were not damaged and disputed that the incident constituted a significant adverse change [1]

Core Viewpoint - Peabody Energy's stock rose by 7% after the company announced the termination of a $3.8 billion acquisition of coking coal assets from Anglo American due to a significant adverse change caused by a fire at the Ambre Energy North Mine in Australia [1] Group 1: Peabody Energy - Peabody's CEO Jim Grech stated that the two companies could not reach an amended agreement to address the significant adverse change resulting from the fire [1] - The fire at the mine was expected to impact the planned sales volume of 5.3 million tons by 2025, with no current timeline for resuming operations at the expected production and cost levels [1] - In May, Peabody indicated that the fire constituted a significant adverse change, justifying the termination of the acquisition [1] Group 2: Anglo American - The failure of the transaction will have a significant impact on Anglo American, which had agreed to sell coal assets in November to streamline its operations and focus on copper and iron ore businesses [2]

Core Viewpoint - Peabody has terminated its purchase agreements with Anglo American Plc due to a material adverse change related to Anglo's steelmaking coal assets, following an ignition event at Anglo's Moranbah North Mine, which has no clear timeline for resuming production [1][2]. Group 1: Termination of Agreements - Peabody's decision to terminate the transaction comes nearly five months after an ignition event at Anglo's Moranbah North Mine, with no definitive timeline for resuming sustainable longwall production [1]. - The two companies did not reach a revised agreement to address the material adverse change that would compensate Peabody for the impacts on the acquisition [2]. - Peabody has also terminated the agreement for the related sale of the Dawson Mine to PT Bukit Makmur Mandiri Utama [3]. Group 2: Financial Implications - Anglo estimates holding costs at Moranbah North to be $45 million per month, with the mine previously targeted to produce 5.3 million tons of saleable production in 2025 [2]. - There is currently no timetable for the resumption of longwall production at forecasted volumes and costs [2]. Group 3: Strategic Positioning - Peabody's portfolio is well positioned with growing exposure to seaborne metallurgical coal, highlighted by the new 25-year premium hard coking coal Centurion Mine [4]. - The company intends to execute a four-pronged strategy for value creation, focusing on managing safe, productive, and environmentally responsible operations [5]. - Peabody aims to return 65-100% of available free cash flow to shareholders primarily through share buybacks, while maintaining a resilient balance sheet and exercising strong capital discipline [5].

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial performance declined significantly in Q2 and H1 2025 compared to the prior year [Unaudited Condensed Consolidated Statements of Operations](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss in Q2 2025, a sharp reversal from the prior year's net income due to lower revenue Consolidated Statements of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$890.1** | **$1,042.0** | **-14.6%** | **$1,827.1** | **$2,025.6** | **-9.8%** | | Operating (Loss) Profit | ($38.4) | $233.9 | - | ($6.5) | $285.1 | - | | Net (Loss) Income | ($26.0) | $209.2 | - | $12.0 | $254.2 | -95.3% | | Net (Loss) Income Attributable to Common Stockholders | ($27.6) | $199.4 | - | $6.8 | $239.0 | -97.2% | | Diluted (Loss) Income per Share | ($0.23) | $1.42 | - | $0.06 | $1.70 | -96.5% | - Transaction costs related to business combinations were **$18.8 million in Q2 2025** and **$21.2 million in H1 2025**, with no such costs in the prior year periods[7](index=7&type=chunk) - The prior year's results were positively impacted by a **$109.5 million Shoal Creek insurance recovery**, which was not present in 2025[7](index=7&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and stockholders' equity decreased as of June 30, 2025, compared to year-end 2024 Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$1,627.3** | **$1,780.7** | | Cash and cash equivalents | $585.9 | $700.4 | | **Total Assets** | **$5,763.4** | **$5,953.7** | | **Total Current Liabilities** | **$737.0** | **$827.5** | | Long-term debt, less current portion | $329.2 | $332.3 | | **Total Liabilities** | **$2,089.3** | **$2,244.9** | | **Total Stockholders' Equity** | **$3,674.1** | **$3,708.8** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased, but overall cash decreased due to investing and financing activities Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $143.1 | $126.8 | | Net cash used in investing activities | ($180.7) | ($316.8) | | Net cash used in financing activities | ($44.9) | ($140.5) | | **Net change in cash, cash equivalents and restricted cash** | **($82.5)** | **($330.5)** | - Investing activities in H1 2024 included a **$143.8 million cash outflow** for the Wards Well acquisition, which did not recur in 2025[15](index=15&type=chunk) - Financing activities in H1 2025 included **no common stock repurchases**, compared to **$83.1 million** in repurchases during H1 2024[15](index=15&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide key disclosures on revenue, debt, segment performance, and the pending Anglo American acquisition Disaggregation of Revenue - H1 2025 vs H1 2024 (in millions) | Segment | H1 2025 Revenue | H1 2024 Revenue | | :--- | :--- | :--- | | Seaborne Thermal | $460.2 | $591.4 | | Seaborne Metallurgical | $472.3 | $541.3 | | Powder River Basin | $551.3 | $476.0 | | Other U.S. Thermal | $323.8 | $393.6 | | **Total Revenue** | **$1,827.1** | **$2,025.6** | - The company holds **$320.0 million** in 3.250% Convertible Senior Notes due 2028[50](index=50&type=chunk)[51](index=51&type=chunk) - On May 5, 2025, Peabody notified Anglo American of a **Material Adverse Change (MAC)** regarding the planned acquisition due to issues at the Moranbah North Mine, which remains inactive[77](index=77&type=chunk) - In June 2024, the company recognized a **$109.5 million insurance recovery** related to the Shoal Creek Mine incident[81](index=81&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the financial decline to lower seaborne coal pricing and a non-recurring insurance recovery - The decrease in financial results for H1 2025 was driven by lower revenue from lower seaborne coal pricing (**$198.5 million**) and the prior year's **$109.5 million** Shoal Creek insurance recovery[137](index=137&type=chunk) Adjusted EBITDA by Segment - H1 2025 vs H1 2024 (in millions) | Segment | H1 2025 Adj. EBITDA | H1 2024 Adj. EBITDA | | :--- | :--- | :--- | | Seaborne Thermal | $117.7 | $198.2 | | Seaborne Metallurgical | $4.0 | $191.9 | | Powder River Basin | $79.3 | $34.2 | | Other U.S. Thermal | $46.4 | $81.9 | | **Total Adjusted EBITDA** | **$237.3** | **$470.2** | - Total available liquidity as of June 30, 2025, was **$958.9 million**, down from **$1,072.5 million** at the end of 2024[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from coal pricing, foreign currency, fuel costs, and interest rates - The company has approximately **97 million tons** of U.S. thermal coal priced and committed for 2025[238](index=238&type=chunk) - A **$0.10 change in the AUD/USD exchange rate** would impact annual operating costs by approximately **$210 million to $220 million**, though this is partially mitigated by hedging instruments[240](index=240&type=chunk) - A **$10 per barrel change in crude oil prices** would impact annual diesel fuel costs by approximately **$23 million**[242](index=242&type=chunk) - A **one percentage point decrease in interest rates** would reduce annual interest income by approximately **$13 million** based on current cash balances[245](index=245&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter's end - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective** at providing reasonable assurance that desired control objectives were achieved[246](index=246&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 of the financial statements for details on significant legal proceedings - For a description of significant legal proceedings, the report refers to **Note 14** of the financial statements[248](index=248&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company highlights key risks including coal price dependency, operational hazards, and regulatory challenges - The company's profitability is **highly dependent on the prices** it receives for its coal[250](index=250&type=chunk) - Concerns about the impacts of coal combustion on **global climate** are leading to conditions that could affect demand for the company's products and its ability to produce[250](index=250&type=chunk) - The report lists numerous risks, including operational, regulatory, financial, and market-related factors that could **materially affect the company's business**[250](index=250&type=chunk)[252](index=252&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has $469.6 million remaining in its share repurchase program and continues to issue dividends - As of June 30, 2025, **$469.6 million remained available** for share repurchases under the 2023 Repurchase Program[253](index=253&type=chunk) - The company declared dividends of **$0.075 per share for Q2 2025** and a total of **$0.150 per share** for the six months ended June 30, 2025[254](index=254&type=chunk) - **No shares were repurchased** under the publicly announced program during the three months ended June 30, 2025[256](index=256&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations and other regulatory matters is provided in Exhibit 95 - Information concerning mine safety violations and other regulatory matters is included in **Exhibit 95** to the Quarterly Report[258](index=258&type=chunk) [Other Information](index=54&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter - **No directors or officers** adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[259](index=259&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and safety disclosures - The report includes required certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2) and Mine Safety Disclosures (Exhibit 95)[263](index=263&type=chunk)

Financial Data and Key Metrics Changes - The company reported a GAAP net loss attributable to common stockholders of $27.6 million or $0.23 per diluted share, while generating adjusted EBITDA of $93 million [21][22] - Operating cash flow was $23 million, with cash at the end of the quarter amounting to $586 million and nearly $1 billion in liquidity [22][28] Business Line Data and Key Metrics Changes - The Seaborne Thermal segment recorded adjusted EBITDA of $33.5 million with 17% margins, despite a loss of 400,000 tons due to port congestion [22] - The Seaborne Metallurgical segment reported an adjusted EBITDA loss of $9.2 million, with 23% lower average realized prices year over year [23] - The US thermal mines generated $57 million of adjusted EBITDA, demonstrating stable free cash flows and low capital requirements [23] Market Data and Key Metrics Changes - In the US, coal fuel generation increased by 15% compared to 2024, driven by high natural gas prices and growing electricity demand [12] - Customer stockpiles decreased by 15 million tons, an 11% reduction from the previous year, indicating tightening supply and demand fundamentals [13] - Seaborne thermal coal markets are supported by hot summer weather in Asia, leading to reduced stockpiles and stronger bids [15] Company Strategy and Development Direction - The company is accelerating longwall operations at its Centurion mine, targeting startup in February 2026, reflecting strong execution across operations [5][6] - Recent US legislation is expected to provide significant benefits, including a reduction in federal royalty rates from 12.5% to 7%, anticipated to generate $15 million to $20 million in net benefits [8][9] - The company aims to manage the cyclicality of the market to capture outsized free cash flow when prices improve [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the US coal market, citing strong demand and supportive legislation [7][11] - The company noted that while the seaborne price environment remains challenging, it is well-positioned to navigate these conditions [20] - Management highlighted the importance of controlling costs and maintaining a strong balance sheet during cyclical downturns [20] Other Important Information - The company is in discussions regarding the acquisition of assets from Anglo American, with ongoing disagreements over the material adverse change (MAC) status of the Moranbah North mine [29][48] - The company is advancing its rare earth element evaluation program in the Powder River Basin, with initial studies indicating potential elevated levels of rare earth elements [81] Q&A Session Summary Question: Can you provide more details on the MAC situation with Anglo? - Management expressed confidence in their MAC position, citing significant monthly carrying costs and uncertainty regarding the mine's restart [35][36] Question: What is the status of discussions with Anglo? - Management confirmed ongoing respectful discussions but noted a fundamental disagreement over the impact of the MAC [47][48] Question: What should investors expect on August 19 regarding the MAC? - Management stated that the 90-day period to cure the MAC will conclude on that date, at which point they have the right to terminate the agreement [56] Question: Can you clarify the impact of the new royalty rate on costs? - The new royalty rate is included in the guidance, with expected benefits to costs in the second half of the year [68] Question: What is the expected benefit from the production tax credit for Shoal Creek? - The production tax credit is expected to provide savings of over $5 million annually, starting in 2026 [75] Question: How much cash is unrestricted and available to the company? - The company confirmed that the total cash of $586 million is unrestricted and fully available [89]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss attributable to common stockholders of $27.6 million or $0.23 per diluted share, while generating adjusted EBITDA of $93 million [21] - Operating cash flow was $23 million, with cash at the end of the quarter amounting to $586 million and nearly $1 billion in liquidity [22] - The company raised its full-year guidance based on strong performance and cost management, with a reduction in full-year CapEx by $30 million to $420 million [27] Business Line Data and Key Metrics Changes - The Seaborne Thermal segment recorded adjusted EBITDA of $33.5 million with 17% margins, despite a loss of 400,000 tons due to port congestion [22] - The US thermal mines generated $57 million of adjusted EBITDA, demonstrating stable free cash flows and low capital requirements [23] - The seaborne metallurgical segment reported an adjusted EBITDA loss of $9.2 million, reflecting a 23% decrease in average realized prices year over year [23] Market Data and Key Metrics Changes - In the US, coal fuel generation increased by 15% compared to 2024, driven by high natural gas prices and growing electricity demand [11] - Customer stockpiles decreased by 15 million tonnes, an 11% reduction from the previous year, indicating tightening supply and demand fundamentals [12] - Seaborne thermal coal markets are supported by hot summer weather in Asia, leading to reduced stockpiles and stronger bids [14] Company Strategy and Development Direction - The company is focusing on cost management and operational efficiency to navigate the cyclical market softness in seaborne markets [20] - An acceleration of longwall operations at the Centurion mine is planned, with a target startup in February 2026 [4] - The recent US legislation is expected to provide significant benefits, including a reduction in federal royalty rates and a production tax credit for eligible domestic coal [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the US coal market, citing strong demand and supportive legislation [6][9] - The company anticipates a significant increase in PRB volumes and improved cost structures due to favorable market conditions [27] - Management highlighted the importance of coal in maintaining grid reliability and energy independence amid rising electricity demand [8] Other Important Information - The company is currently in discussions regarding the acquisition of assets from Anglo American, with ongoing disagreements over the material adverse change (MAC) event at the Moranbah North mine [29][50] - The company is advancing its rare earth element evaluation program, with initial studies indicating potential elevated levels of rare earth elements in its reserves [86] Q&A Session Summary Question: Can you provide insights on the MAC situation and potential liabilities? - Management expressed confidence in their MAC position and indicated that they are prepared to pursue arbitration if necessary [36][40] Question: What is the latest on the Centurion project and potential sell-down timing? - Management stated that there is no commitment to a sell-down at this time and that discussions are ongoing without a specific timeline [41][43] Question: What is the status of discussions with Anglo regarding the Moranbah North mine? - Management confirmed that discussions are candid but highlighted a fundamental disagreement over the impact of the MAC event [50] Question: Can you provide details on liquidity and cash availability? - The company confirmed that the cash balance of $586 million is unrestricted and fully available, with additional capital required for the Centurion project [94] Question: What are the expectations for the second half of the year regarding costs and performance? - Management indicated that costs are expected to improve and that they are on track to meet full-year guidance despite some challenges [66][84]

Group 1 - Peabody Energy Corporation is a U.S. listed coal mining company with most production from U.S. operations, but the majority of earnings and cash flow typically come from international markets [1] - The company focuses on turnarounds in natural resource industries, with a typical holding period of 2-3 years [2] - The portfolio of the company has achieved a compounded annual growth rate of 29% over the last 6 years [2]

Financial Performance - Peabody Energy reported a quarterly loss of $0.06 per share, compared to the Zacks Consensus Estimate of a loss of $0.04, and a significant decline from earnings of $1.43 per share a year ago, indicating an earnings surprise of -50.00% [1] - The company posted revenues of $890.1 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 5.07%, and down from $1.04 billion in the same quarter last year [2] - Over the last four quarters, Peabody Energy has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Peabody Energy shares have declined approximately 26.4% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current status of estimate revisions for Peabody Energy translates into a Zacks Rank 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.04 on revenues of $942.7 million, and for the current fiscal year, it is $0.45 on revenues of $3.82 billion [7] - The outlook for the coal industry, where Peabody Energy operates, is currently in the bottom 13% of the Zacks industries, which may materially impact the stock's performance [8]

[Q2 2025 Financial and Operational Overview](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Peabody reported a net loss of $27.6 million and Adjusted EBITDA of $93.3 million in Q2 2025, a significant decline from the prior year due to lower seaborne coal prices Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net (Loss) Income Attributable to Common Stockholders (millions) | $(27.6) | $199.4 | Decreased | | Diluted EPS | $(0.23) | $1.42 | Decreased | | Adjusted EBITDA (millions) | $93.3 | $309.7 | Decreased | - The company declared a dividend of **$0.075 per share** on common stock on July 31, 2025[4](index=4&type=chunk) - The prior year's Q2 results included an **$80.8 million insurance recovery** and benefited from significantly higher seaborne metallurgical (**32% higher**) and thermal (**35% higher**) coal prices[1](index=1&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Peabody achieved strong cost control in seaborne segments and improved PRB margins, with Centurion Mine development ahead of schedule and anticipated royalty reductions - The Centurion Mine in Australia is ahead of schedule, allowing the company to accelerate the planned start of longwall production to **February 2026**[4](index=4&type=chunk) - Strong U.S. thermal demand drove better-than-expected performance and substantial margin improvements in the **Powder River Basin (PRB)** segment[4](index=4&type=chunk) - Seaborne Metallurgical and Seaborne Thermal segments achieved costs **below company targets** for the second quarter[4](index=4&type=chunk) - The company expects to benefit by **$15 to $20 million** in H2 2025 from royalty reductions under the new "One Big Beautiful Bill Act," which is also expected to improve the competitiveness of PRB coal[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Seaborne Thermal](index=2&type=section&id=Seaborne%20Thermal) The Seaborne Thermal segment generated **$33.5 million** in Adjusted EBITDA in Q2 2025, with lower volumes due to disruptions partially offset by cost controls, leading to updated full-year guidance Seaborne Thermal Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 3.6 | 4.1 | | Revenue per Ton | $53.22 | $74.43 | | Costs per Ton | $44.10 | $49.14 | | Adjusted EBITDA Margin per Ton | $9.12 | $25.29 | | Adjusted EBITDA (millions) | $33.5 | $104.4 | - Full-year volume guidance was increased by **200,000 tons**, and full-year cost guidance was reduced by **$3 per ton** due to strong July shipments[5](index=5&type=chunk) [Seaborne Metallurgical](index=2&type=section&id=Seaborne%20Metallurgical) The Seaborne Metallurgical segment reported an Adjusted EBITDA loss of **$9.2 million** in Q2 2025 due to challenging pricing, but achieved increased volumes and lower costs, leading to reduced full-year cost guidance Seaborne Metallurgical Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 2.2 | 2.0 | | Revenue per Ton | $114.79 | $149.29 | | Costs per Ton | $118.97 | $117.47 | | Adjusted EBITDA Margin per Ton | $(4.18) | $31.82 | | Adjusted EBITDA (millions) | $(9.2) | $143.6* | - *Q2 2024 Adjusted EBITDA included an **$80.8 million insurance recovery**[6](index=6&type=chunk) - Due to strong first-half cost performance, full-year cost guidance is being lowered by **$7 per ton** to approximately **$118 per ton**[6](index=6&type=chunk) [Powder River Basin (PRB)](index=3&type=section&id=Powder%20River%20Basin%20(PRB)) The Powder River Basin segment delivered strong Q2 2025 results with **$43.0 million** in Adjusted EBITDA, exceeding shipment expectations and lowering per-ton costs, leading to increased full-year volume guidance Powder River Basin Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 20.0 | 15.8 | | Revenue per Ton | $13.82 | $14.02 | | Costs per Ton | $11.66 | $12.89 | | Adjusted EBITDA Margin per Ton | $2.16 | $1.13 | | Adjusted EBITDA (millions) | $43.0 | $17.8 | - Based on increased contract volumes, full-year volume guidance is raised by **5 million tons**, and cost targets are lowered by **$0.63 per ton**[7](index=7&type=chunk) [Other U.S. Thermal](index=3&type=section&id=Other%20U.S.%20Thermal) The Other U.S. Thermal segment reported **$13.5 million** in Adjusted EBITDA for Q2 2025, with lower volumes due to operational issues, but anticipates improvement after an August longwall move, maintaining full-year guidance Other U.S. Thermal Performance (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Tons sold (millions) | 2.9 | 3.7 | | Revenue per Ton | $54.08 | $55.21 | | Costs per Ton | $49.39 | $45.53 | | Adjusted EBITDA Margin per Ton | $4.69 | $9.68 | | Adjusted EBITDA (millions) | $13.5 | $35.4 | - Performance is expected to improve at Twentymile after an August longwall move to a new panel, with the company maintaining full-year volume and cost guidance for this segment[8](index=8&type=chunk) [Financial Position and Corporate Updates](index=3&type=section&id=Financial%20Position%20and%20Corporate%20Updates) [Balance Sheet and Liquidity](index=3&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Peabody maintained a strong financial position with total liquidity approaching **$1 billion**, demonstrating operational resilience and a stable cash position despite investments and shareholder returns Liquidity Position as of June 30, 2025 | Item | Amount (in millions) | | :--- | :--- | | Cash | $585.9 | | Long-Term Debt | $343.8 | | Total Liquidity | Approaching $1,000 | - The company's cash position remained largely unchanged from the prior quarter after accounting for investments in Centurion, shareholder returns, and other working capital items[10](index=10&type=chunk) [Centurion Mine Project Update](index=3&type=section&id=Centurion%20Mine%20Project%20Update) The Centurion Mine development is progressing rapidly and is ahead of schedule, with longwall operations now anticipated to start in **February 2026**, remaining on budget with significant hiring progress - The start of longwall operations is now anticipated in **February 2026**, earlier than previously guided[11](index=11&type=chunk) - The mine has hired **260 of its planned 400 employees** and intends to start installing longwall shields in November[11](index=11&type=chunk) [Moranbah North Acquisition Update](index=3&type=section&id=Moranbah%20North%20Acquisition%20Update) Peabody asserts a Material Adverse Change (MAC) regarding the Moranbah North Mine acquisition due to an ignition incident and lack of production timetable, with an update expected after the **August 19th** cure period expiration - Peabody asserts that a **Material Adverse Change (MAC)** has occurred under the purchase agreements for the Moranbah North Mine due to an ignition incident and lack of a credible timetable for production resumption[14](index=14&type=chunk) - The company has not reached a revised agreement with the seller and will provide a further update after the **90-day MAC cure period** expires on **August 19th**[14](index=14&type=chunk) [Company Outlook](index=4&type=section&id=Company%20Outlook) [Third Quarter 2025 Outlook](index=4&type=section&id=Third%20Quarter%202025%20Outlook) For Q3 2025, Peabody anticipates increased volumes in PRB and Other U.S. Thermal segments, providing specific volume, pricing, and cost targets across all four operating segments Q3 2025 Segment Outlook | Segment | Expected Volume | Expected Costs per Ton | Other Details | | :--- | :--- | :--- | :--- | | Seaborne Thermal | 3.9M tons | $45 - $50 | 2.7M tons are for export | | Seaborne Metallurgical | 2.2M tons | $110 - $120 | Expected to achieve 70-75% of premium hard coking coal price index | | PRB U.S. Thermal | 23.0M tons | $11.00 - $11.50 | Average price of $13.45/ton | | Other U.S. Thermal | 3.7M tons | $45 - $49 | Average price of $51.10/ton | [Full Year 2025 Guidance](index=5&type=section&id=Full%20Year%202025%20Guidance) Peabody updated its full-year 2025 guidance, raising volume targets for Seaborne Thermal and PRB while lowering cost-per-ton targets for multiple segments, with total capital expenditures projected at **$420 million** - The company is raising full-year 2025 guidance for Seaborne Thermal and PRB volumes and lowering cost-per-ton targets for Seaborne Thermal, Seaborne Met, and PRB segments[4](index=4&type=chunk)[15](index=15&type=chunk) Full Year 2025 Segment Guidance | Segment | Total Volume (millions of short tons) | Average Cost per Short Ton | | :--- | :--- | :--- | | Seaborne Thermal | 14.6 - 15.2 | $45.00 - $48.00 | | Seaborne Metallurgical | 8.0 - 9.0 | $115.00 - $120.00 | | PRB U.S. Thermal | 80.0 - 84.0 | $11.50 - $12.00 | | Other U.S. Thermal | 13.4 - 14.4 | $43.00 - $47.00 | Full Year 2025 Financial Metrics | Metric | 2025 Full Year ($ in millions) | | :--- | :--- | | SG&A | $95 | | Total Capital Expenditures | $420 | | ARO Cash Spend | $50 | [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Peabody reported total revenues of **$890.1 million** and an operating loss of **$38.4 million** in Q2 2025, a significant decline from the prior year, resulting in a net loss of **$27.6 million** attributable to common stockholders Statement of Operations Highlights (in Millions) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $890.1 | $1,042.0 | | Operating (Loss) Profit | $(38.4) | $233.9 | | Net (Loss) Income Attributable to Common Stockholders | $(27.6) | $199.4 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Peabody's balance sheet reported total assets of **$5,763.4 million**, total liabilities of **$2,089.3 million**, and cash and cash equivalents of **$585.9 million** Balance Sheet Summary (in Millions) | Account | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $585.9 | $700.4 | | Total Current Assets | $1,627.3 | $1,780.7 | | Total Assets | $5,763.4 | $5,953.7 | | Total Current Liabilities | $737.0 | $827.5 | | Total Liabilities | $2,089.3 | $2,244.9 | | Total Stockholders' Equity | $3,674.1 | $3,708.8 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash provided by operating activities was **$23.2 million**, while investing activities used **$91.1 million** and financing activities used **$15.8 million** Statement of Cash Flows Highlights (in Millions) | Account | Q2 2025 | Six Months Ended Jun 30, 2025 | | :--- | :--- | :--- | | Net Cash Provided By Operating Activities | $23.2 | $143.1 | | Net Cash Used In Investing Activities | $(91.1) | $(180.7) | | Net Cash Used In Financing Activities | $(15.8) | $(44.9) | [Reconciliation of Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Adjusted EBITDA Reconciliation](index=9&type=section&id=Adjusted%20EBITDA%20Reconciliation) The company provides a reconciliation of net income to Adjusted EBITDA, a non-GAAP measure, showing a Q2 2025 Adjusted EBITDA of **$93.3 million** after adjustments from a **$25.6 million** net loss from continuing operations Adjusted EBITDA Reconciliation (Q2 2025, in Millions) | Item | Amount | | :--- | :--- | | (Loss) Income from Continuing Operations, Net of Income Taxes | $(25.6) | | Depreciation, Depletion and Amortization | $93.4 | | Interest Expense, Net | $11.1 | | Income Tax (Benefit) | $(2.7) | | Other Adjustments | $17.1 | | **Adjusted EBITDA** | **$93.3** | [Supplemental Financial Data](index=10&type=section&id=Supplemental%20Financial%20Data) This section provides a detailed breakdown of Q2 2025 revenues and Adjusted EBITDA by business segment, with U.S. Thermal segments generating **$430.8 million** in revenue and Seaborne segments generating **$447.3 million** Q2 2025 Revenue and Adjusted EBITDA by Segment (in Millions) | Segment | Revenue | Adjusted EBITDA | | :--- | :--- | :--- | | Seaborne Thermal | $195.1 | $33.5 | | Seaborne Metallurgical | $252.2 | $(9.2) | | Powder River Basin | $275.7 | $43.0 | | Other U.S. Thermal | $155.1 | $13.5 | | **Total (Excluding Corp/Other)** | **$878.1** | **$80.8** |

Core Insights - Peabody reported a net loss of $27.6 million for Q2 2025, a significant decline from a net income of $199.4 million in the same quarter last year, with Adjusted EBITDA dropping to $93.3 million from $309.7 million [1][7][23] - The company experienced strong performance in the Powder River Basin (PRB) segment, driven by robust U.S. thermal coal demand and effective cost management [2][7] - Peabody has raised its full-year volume guidance for Seaborne Thermal and PRB coal while lowering cost-per-ton targets across multiple segments [7][14] Financial Performance - Q2 2025 Adjusted EBITDA was $93.3 million, down from $309.7 million in Q2 2024, reflecting lower shipments and pricing pressures [1][23] - The company reported total revenue of $890.1 million for Q2 2025, compared to $1,042.0 million in Q2 2024 [23][32] - Operating costs for Q2 2025 were $789.4 million, slightly lower than $803.9 million in the same quarter last year [23][32] Segment Performance - Seaborne Thermal segment sold 3.6 million tons in Q2 2025, down from 4.1 million tons in Q2 2024, with an Adjusted EBITDA of $33.5 million [4][32] - Seaborne Metallurgical segment sold 2.2 million tons, with an Adjusted EBITDA loss of $9.2 million, impacted by a challenging pricing environment [5][32] - The PRB segment achieved an Adjusted EBITDA of $43.0 million, benefiting from strong demand and lower costs [8][32] Operational Updates - The Centurion Mine's longwall production start has been accelerated to February 2026 due to effective execution and development progress [12] - Peabody expects to benefit from federal royalty reductions, estimating an impact of $15 to $20 million in the second half of 2025 [7][14] Guidance and Outlook - Full-year 2025 guidance for Seaborne Thermal is now set at 14.6 to 15.2 million tons, with a cost target of $45.00 to $48.00 per ton [20] - PRB volume guidance has been raised to 80.0 to 84.0 million tons, with an average cost target of $11.50 to $12.00 per ton [20] - The company maintains its full-year volume and cost guidance for Other U.S. Thermal coal [9][20]