Peabody(BTU) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Item 1. Financial Statements The company's financial performance declined significantly in Q2 and H1 2025 compared to the prior year Unaudited Condensed Consolidated Statements of Operations 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] - The prior year's results were positively impacted by a $109.5 million Shoal Creek insurance recovery, which was not present in 2025[7] Condensed Consolidated Balance Sheets 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 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] - Financing activities in H1 2025 included no common stock repurchases, compared to $83.1 million in repurchases during H1 2024[15] Notes to Unaudited Condensed Consolidated Financial Statements 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][51] - 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] - In June 2024, the company recognized a $109.5 million insurance recovery related to the Shoal Creek Mine incident[81] Management's Discussion and Analysis of Financial Condition and Results of Operations 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] 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] Quantitative and Qualitative Disclosures About Market Risk 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] - 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] - A $10 per barrel change in crude oil prices would impact annual diesel fuel costs by approximately $23 million[242] - A one percentage point decrease in interest rates would reduce annual interest income by approximately $13 million based on current cash balances[245] Controls and Procedures 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] PART II — OTHER INFORMATION Legal Proceedings 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] Risk Factors 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] - 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] - The report lists numerous risks, including operational, regulatory, financial, and market-related factors that could materially affect the company's business[250][252] Unregistered Sales of Equity Securities and Use of Proceeds 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] - 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] - No shares were repurchased under the publicly announced program during the three months ended June 30, 2025[256] Mine Safety Disclosures 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] Other Information 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] Exhibits 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]