PEABODY ENERGY CORP (BTU)

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 the Company’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 the Company’s future financial performance. The Company uses words such as “anticipate,” “believe,” “expect,” “intend,” “may,” “forecast,” “project,” “should,” “estimate,” “goal,” “plan,” “outlook,” “target,” “likely,” “could,” “will,” “would,” “to be” or other similar words to identify forward-looking statements.

Without limiting the foregoing, all statements relating to the Company’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 and expectations that the Company believes in good faith to be 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” of Part II of this Quarterly Report on Form 10-Q and Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of Part I of its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026. 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 Peabody’s results of operations includes references to and analysis of Adjusted EBITDA and Total Segment Costs, which are financial measures not recognized in accordance with United States generally accepted accounting principles (U.S. GAAP). Adjusted EBITDA is used by the chief operating decision maker, defined as Peabody’s President and Chief Executive Officer, as the primary financial metric to measure each segment’s operating performance against expected results and to allocate resources, including capital investment in mining operations and potential expansions. Total Segment Costs is also used by management as a component of a metric to measure each segment’s operating performance.

Also included in the following discussion of Peabody’s results of operations are references to Revenue per Ton, Costs per Ton and Adjusted EBITDA Margin per Ton for each reportable segment. These metrics are used by management to measure each reportable segment’s operating performance. Management believes Costs per Ton and Adjusted EBITDA Margin per Ton best reflect controllable costs and operating results at the reportable segment level. The Company considers all measures reported on a per ton basis to be operating/statistical measures; however, the Company includes reconciliations of the related non-GAAP financial measures (Adjusted EBITDA and Total Segment Costs) in the “Reconciliation of Non-GAAP Financial Measures” section contained within this Item 2.

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

22

Table of Contents

Overview

Peabody is a leading producer of metallurgical and thermal coal. In 2025, Peabody sold 122.0 million tons of coal. February 2026 marked the start-up of the Centurion Mine in the Seaborne Metallurgical segment. As a result, the Company owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia at March 31, 2026. Included in that count is Peabody’s 50% equity interest in Middlemount Coal Pty Ltd (Middlemount), which owns the Middlemount Mine in Queensland, Australia.

The Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin and Other U.S. Thermal. Refer to Note 14. “Segment Information” to the accompanying unaudited condensed consolidated financial statements for further information regarding those segments and the components of the Company’s Corporate and Other category.

Pricing during the three months ended March 31, 2026 is set forth in the table below.

(1)    Spot pricing expressed per metric tonne.

(2)    Prompt month pricing expressed per short ton.

The seaborne pricing included in the table above is not necessarily indicative of the pricing the Company realized during the three months ended March 31, 2026 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized. The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.

In the U.S., the pricing included in the table above is also not necessarily indicative of the pricing the Company realized during the three months ended March 31, 2026 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.

Within the global coal industry, supply and demand for its products and the supplies used for mining are being impacted by recent geopolitical events and changes to trade policy, including tariffs and customs regulations. As future developments related to geopolitical events and trade policy, including additional or retaliatory tariffs, delays in implementing previously announced changes or ongoing negotiations between countries, are unknown, the global coal industry data for the three months ended March 31, 2026 presented herein may not be indicative of their ultimate impacts.

23

Table of Contents

The seaborne metallurgical coal market experienced weather-related disruptions in Australia and supply tightness in key product segments. This, combined with steady import demand from key metallurgical coal import markets, contributed to the increases in average quarterly pricing for premium coking coal (17%) and PCI (15%) during the three months ended March 31, 2026 as compared to the three months ended December 31, 2025. In China, the continued implementation of anti-involution policies, mandated steel production limits and the introduction of steel export quotas have the potential to lead to decreased Chinese steel exports, while increasing steel-trade protectionism is supportive of steel production and seaborne metallurgical coal demand in markets outside of China. The biggest steel growth market, India, continued to see an increase in crude steel output in the quarter. Recent geopolitical events have increased the cost of seaborne energy, which has the potential to significantly impact the global ferrous complex, by placing upward pressure on raw material costs and downward pressure on steel product pricing through weakened downstream demand. Looking forward, the seaborne metallurgical coal price may remain volatile based on mining rates in Australia, geopolitical events, Chinese supply reforms and the pace of growth of the Indian steel industry.

Within the seaborne thermal coal market, global thermal coal prices started the year stable but increased during the three months ended March 31, 2026, due to the closure of the Strait of Hormuz and the conflict in the Middle East. The conflict has elevated global liquefied natural gas (LNG) prices and created volatility in global thermal energy markets. In China, power generation increased year-over-year through March 31, 2026, which has resulted in stronger thermal generation year-over-year. However, both domestic coal production and coal imports have remained flat year-over-year through the three months ended March 31, 2026. In India, stronger domestic coal production, lower import demand and slightly lower coal generation led to stable coal stockpiles. Looking forward, seaborne thermal coal prices may remain volatile based on accessibility to shipping in the Strait of Hormuz and the duration of the ongoing conflict in the Middle East. Approximately 20% of global LNG exports flow through the Strait of Hormuz, which has created volatility in the global LNG market, a main competitor of global coal generation. In addition, summer re-stocking activity in the Northern Hemisphere may impact global thermal coal markets in the coming months.

In the U.S., overall electricity demand increased just under 1% year-over-year through the three months ended March 31, 2026. Through the first three months of 2026, electricity generation from thermal coal decreased year-over-year, driven by lower natural gas prices, stronger renewable generation and milder winter weather in coal-heavy markets in the U.S. Coal’s share of electricity generation decreased to approximately 16% for the three months ended March 31, 2026, while wind and solar’s combined generation share was at 20% and the share of na

[Excerpt truncated for page length; source filing is linked above.]

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

The Company’s discussion and analysis of the year ended December 31, 2025 compared to the year ended December 31, 2024 is included herein. For discussion and analysis of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Peabody’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 20, 2025 and is incorporated by reference herein.

Non-GAAP Financial Measures

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

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

Table of Contents

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

Overview

In 2025, Peabody sold 122.0 million tons of coal. As of December 31, 2025, the Company reports its results of operations primarily through the following reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin and Other U.S. Thermal.

The Company’s seaborne operating platform is primarily export focused with customers spread across several countries, with a portion of its thermal and metallurgical coal sold within Australia. Generally, revenue from individual countries varies year by year based on electricity and steel demand, the strength of the global economy, governmental policies and several other factors, including those specific to each country. The Company classifies its seaborne mines within the Seaborne Thermal or Seaborne Metallurgical reportable segments based on the primary customer base and coal reserve type of each mining operation. A small portion of the coal mined by the Seaborne Thermal reportable segment is of a metallurgical grade. Similarly, a small portion of the coal mined by the Seaborne Metallurgical reportable segment is of a thermal grade. Additionally, the Company may market some of its metallurgical coal products as a thermal coal product from time to time depending on market conditions. Peabody’s Seaborne Thermal and Seaborne Metallurgical reportable segments contributed approximately 53% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2025.

The Company’s Seaborne Thermal operations consist of mines in New South Wales, Australia. The mines in that reportable segment utilize surface extraction processes to mine low-sulfur, high Btu thermal coal. Prior to September 2025, when the Wambo Underground Mine ceased production, the reportable segment also used underground extraction processes.

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

The Company’s thermal operations in the U.S. are focused on the mining, preparation and sale of thermal coal, sold primarily to electric utilities in the U.S. under long-term contracts, with a relatively small portion sold as international exports as conditions warrant. The Company’s Powder River Basin operations consist of its mines in Wyoming. The mines in that reportable segment are characterized by surface mining extraction processes, coal with a lower sulfur content and Btu and higher customer transportation costs (due to longer shipping distances). The Company’s Other U.S. Thermal operations reflect the aggregation of its Illinois, Indiana, New Mexico and Colorado mining operations. The mines in that reportable segment are characterized by a mix of surface and underground mining extraction processes, coal with a higher sulfur content and Btu and lower customer transportation costs (due to shorter shipping distances). Geologically, the Company’s Powder River Basin operations mine sub-bituminous coal deposits and its Other U.S. Thermal operations mine both bituminous and sub-bituminous coal deposits. Peabody’s Powder River Basin and Other U.S. Thermal reportable segments contributed approximately 47% of the Company’s total Adjusted EBITDA from its mining operations during the year ended December 31, 2025.

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

Resource Management. As of December 31, 2025, Peabody controlled approximately 2.0 billion tons of proven and probable coal reserves, 3.5 billion tons of coal resources and approximately 335,000 acres of surface property through ownership and lease agreements. The Company has an ongoing asset optimization program whereby its property management group regularly reviews these coal reserves, coal resources and surface properties for opportunities to generate earnings and cash flow through the sale or exchange of non-strategic coal reserves, coal resources and surface lands. These surface lands include acres where Peabody has completed post-mining reclamation. In addition, the Company generates revenue through royalties from coal reserves and oil and gas rights leased to third parties, farm income from surface lands under third-party contracts and lease income from surface lands under contracts with renewable energy ventures.

Table of Contents

Middlemount Mine. Peabody owns a 50% equity interest in Middlemount, which owns the Middlemount Mine in Queensland, Australia. The mine predominantly produces semi-hard coking coal and low-volatile pulverized coal injection (LV PCI) coal for sale into seaborne coal markets through Abbot Point Coal Terminal, with some capacity also secured at Dalrymple Bay Coal Terminal. Mining operations first commenced at the Middlemount Mine in late 2011. During the years ended December 31, 2025 and 2024, the mine sold 1.5 million and 1.3 million tons of coal, respectively (on a 50% basis).

Summary

Pricing during the year ended December 31, 2025 is set forth in the table below.

(1)    Spot pricing expressed per metric tonne.

(2)    Prompt month pricing expressed per short ton.

The seaborne pricing included in the table above is not necessarily indicative of the pricing the Company realized during the year ended December 31, 2025 due to quality differentials and a portion of its seaborne sales being executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized. The Company’s typical practice is to negotiate pricing for seaborne metallurgical coal contracts on a quarterly, spot or index basis and seaborne thermal coal contracts on an annual, spot or index basis.

In the U.S., the pricing included in the table above is also not necessarily indicative of the pricing the Company realized during the year ended December 31, 2025 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.

Within the global coal industry, supply and demand for its products and the supplies used for mining are being impacted by recent changes to trade policy, including tariffs and customs regulations. As future developments related to trade policy, including additional or retaliatory tariffs, delays in implementing previously announced changes or ongoing negotiations between countries, are unknown, the global coal industry data for the year ended December 31, 2025 presented herein may not be indicative of their ultimate impacts.

Within the seaborne metallurgical coal market, metallurgical coal prices were mixed during the year ended December 31, 2025. Globally, both steel production and pig iron production (which predominantly utilizes metallurgical coal) declined during the period. In China, lower domestic steel consumption constrained output, while producers in most other countries experienced competitive pressure from increased Chinese steel exports. India was an exception, expanding its steel making capabilities and increasing pig iron output versus the prior year. Metallurgical coal prices were influenced by lower global steel output in 2025, with premium hard coking coal prices averaging lower in 2025 than 2024. However, metallurgical coal supply curtailment events, such as wet weather disruptions in Australia and changing rates of Chinese coal production, at times contributed to seaborne metallurgical coal price support. In addition, geopolitical trends and trade policies, including tariff regimes, continue to influence global metallurgical trade flows. Looking forward, the seaborne metallurgical coal price may remain volatile based on China’s coal production policies, the pace of growth of the Indian steel industry, changing global trade policies and global supply curtailment actions.

Table of Contents

Within the seaborne thermal coal market, global thermal coal prices were mixed during the year ended December 31, 2025. In China, power generation increased year-over-year through December 31, 2025, however the share of renewables in the generation mix continued to grow, pressuring coal generation. In addition, domestic coal production increased slightly year-over-year, which led to weaker coal import demand through the year ended December 31, 2025. In India, steady domestic coal production, lower import demand and declining coal generation led to stable coal stockpiles. Looking forward, seaborne thermal coal prices may remain volatile based on the outcomes of China’s supply reforms, winter re-stocking activity in the Northern Hemisphere and volatility in global natural gas markets which can impact global thermal coal markets.

In the U.S., overall electricity demand increased over 2% year-over-year. Through the year ended December 31, 2025, electricity generation from thermal coal increased year-over-year, driven by higher natural gas prices and stronger total generation. Coal’s share of electricity generation increased to approximately 16% for the year ended December 31, 2025, while wind and solar’s combined generation share was at 19% and the share of natural gas generation declined to approximately 40%. U.S. coal inventories have declined through December 31, 2025, driven by stronger coal utilization, resulting in stockpiles declining 20 million tons below levels seen at the end of 2024.

Centurion Mine

During 2025, Peabody continued to advance the development of the Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia. Full-scale longwall production commenced in February 2026. The mine is expected to enhance both the quantity and quality of the Company’s production from the Seaborne Metallurgical reportable segment.

Arbitration Relating to Terminated Anglo Acquisition

On November 25, 2024, Peabody entered into Purchase Agreements with Anglo, to acquire a portion of the assets and businesses associated with Anglo’s metallurgical coal portfolio in Australia, including Anglo’s interests in the Moranbah North and Grosvenor mines, the Moranbah South development project, the Capcoal complex, the Roper Creek mine and the Dawson complex (comprising the Dawson Main/Central operating mine, the Dawson South operating mine, the Dawson South Exploration project and the Theodore South exploration project, collectively, the Dawson Assets). The Company agreed to, following the prospective closing of the Anglo acquisition, sell the Dawson Assets to Pt Bukit Makmur Mandiri Utama or one of its subsidiaries (BUMA).

On August 19, 2025, Peabody terminated the Purchase Agreements. The termination of the Purchase Agreements followed Peabody’s prior delivery of a notice of a MAC as a result of an ignition event at the Moranbah North mine on March 31, 2025, which had led to the closure of the mine. See Note 1. “Summary of Significant Accounting Policies” and Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further information.

On September 23, 2025, various subsidiaries of Anglo initiated International Chamber of Commerce arbitration proceedings in London, United Kingdom, against Peabody and certain of its affiliates. Anglo’s complaint alleges, among other things, that Peabody wrongfully terminated the Purchase Agreements and seeks, among other things, declarations that the ignition event at the Moranbah North mine did not constitute a MAC, as well as damages for losses in an unspecified amount, plus costs and interest. Peabody remains confident that a MAC occurred, and that it was entitled to terminate the Purchase Agreements.

Potential Recovery of Rare Earth Elements

Peabody has been evaluating the potential recovery of REEs and CMs, with substantial testing at its Powder River Basin operations. The Company is progressing its REE/CM initiative by conducting testing to evaluate mineral types and concentrations; developing flowsheets in conjunction with technology partners to support technical and economic assessments and produce rare earth products; and collaborating with governmental agencies and departments at the state and federal level. In February 2026, the Wyoming Energy Authority awarded Peabody funding of $6.25 million for a pilot plant using Peabody’s Powder River Basin coal for REE/CM processing.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The decrease in results from continuing operations, net of income taxes for the year ended December 31, 2025 compared to the prior year ($449.6 million) was primarily driven by lower revenue ($375.2 million) due to lower seaborne coal pricing, the prior year insurance recovery at the Shoal Creek Mine ($109.5 million) and increased costs related to the terminated Anglo acquisition ($68.6 million). These unfavorable variances were partially offset by a lower income tax provision ($100.0 million) and lower operating costs and expenses ($86.0 million).

Table of Contents

Adjusted EBITDA for the year ended December 31, 2025 reflected a year-over-year decrease of $416.8 million.

Tons Sold

The following table presents tons sold:

Supplemental Financial Data

The following table presents supplemental financial data by reportable segment:

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

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

Table of Contents

Revenue

The following table presents revenue by reportable segment:

Seaborne Thermal. The decrease in segment revenue during the year ended December 31, 2025 compared to the prior year was due to unfavorable realized prices ($245.0 million) and unfavorable volume ($60.4 million) due in part to reductions at the Wilpinjong Mine.

Seaborne Metallurgical. Segment revenue decreased during the year ended December 31, 2025 compared to the prior year due to unfavorable realized prices ($219.2 million), offset by favorable volume ($200.2 million) from the Shoal Creek and Centurion Mines.

Powder River Basin. Segment revenue increased during the year ended December 31, 2025 compared to the prior year due to favorable volume ($72.7 million) resulting from increased demand, offset by unfavorable realized prices ($18.5 million) which were driven by the impact of adjustments to cost pass-through contracts with certain customers resulting from the federal royalty rate reduction included in the OBBBA.

Other U.S. Thermal. The decrease in segment revenue during the year ended December 31, 2025 compared to the prior year was due to unfavorable volume ($43.2 million) resulting from decreased demand, dragline outages at the Bear Run Mine and challenging geological conditions at the Twentymile Mine; decreased revenue from sales contract cancellation settlements ($37.7 million); and unfavorable realized prices ($34.4 million).

Corporate and Other. Segment revenue increased during the year ended December 31, 2025 compared to the prior year due to higher results from trading activities ($7.6 million).

Segment Costs

The following table presents costs by reportable segment:

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

Seaborne Thermal. The decrease in Segment Costs during the year ended December 31, 2025 compared to the prior year was due to lower costs for labor, repairs and outside services ($73.9 million) resulting from timing of maintenance and operational improvements, lower sales related costs ($28.0 million) driven by both lower realized prices and volume, lower leasing expense ($9.0 million) and favorable commodity pricing ($8.0 million); offset by higher recognized costs resulting from sales volume outpacing production volume ($26.0 million).

Table of Contents

Seaborne Metallurgical. Segment Costs increased during the year ended December 31, 2025 compared to the prior year due to higher variable operational and sales related costs driven by increased volume (1.3 million tons).

Powder River Basin. The increase in Segment Costs during the year ended December 31, 2025 compared to the prior year was primarily due to higher costs for labor, repairs and outside services ($26.7 million) due in part to unplanned dragline outages, haul truck repairs and increased volume (4.9 million tons), offset by lower sales related costs ($16.4 million) which were largely driven by the federal royalty rate reduction on coal production included in the OBBBA.

Other U.S. Thermal. The decrease in Segment Costs during the year ended December 31, 2025 compared to the prior year was driven by lower volume (1.2 million tons) and lower costs for labor ($13.3 million).

Corporate and Other. Segment costs decreased during the year ended December 31, 2025 compared to the prior year primarily due to favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral, offset by higher expense from trading activities and lower amortization of prior service credit.

Adjusted EBITDA

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

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

Seaborne Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year as a result of lower realized prices net of sales price sensitive costs ($227.7 million) and unfavorable volume ($59.5 million), offset by favorable operational costs as described above.

Seaborne Metallurgical. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year due to lower realized prices net of sales price sensitive costs ($168.8 million) and the prior year Shoal Creek insurance recovery ($80.8 million), offset by favorable volume.

Powder River Basin. Segment Adjusted EBITDA increased during the year ended December 31, 2025 compared to the same period in the prior year as a result of favorable volume ($38.9 million); lower sales related costs ($16.4 million) as described above; and decreased overburden removal costs ($6.4 million). The increases were offset by higher costs for labor, repairs and outside services as described above.

Other U.S. Thermal. Segment Adjusted EBITDA decreased during the year ended December 31, 2025 compared to the same period in the prior year due to decreased sales contract cancellation settlements ($37.7 million) and lower realized prices net of sales price sensitive costs ($29.8 million).

Table of Contents

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

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

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

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

Corporate and Other Adjusted EBITDA increased during the year ended December 31, 2025 compared to the same period in the prior year. Unfavorable variances in Middlemount’s results driven by lower sales pricing and higher selling and administrative expenses were partially offset by higher gains on equipment and land sales ($17.9 million). The increase in other items was driven by the favorable remeasurement of foreign currency denominated monetary assets, substantially comprised of Australian dollar denominated restricted cash and cash collateral ($62.7 million), offset by the lower amortization of prior service credit ($10.9 million) and unfavorable trading results ($6.5 million).

(Loss) Income From Continuing Operations, Net of Income Taxes

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

(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.

Table of Contents

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

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

Depreciation, depletion and amortization expense increased during the year ended December 31, 2025 compared to the same period in the prior year primarily due to increased depreciation resulting from asset additions and increased depletion expense primarily due to increased volume from the Shoal Creek and Centurion Mines. The changes in the weighted-average depletion rate per ton for the Seaborne Thermal, the Seaborne Metallurgical and the Other U.S. Thermal segments during the year ended December 31, 2025 compared to the same period in the prior year reflect the impact of volume and mix variances across the segments.

Asset Retirement Obligation Expenses. Asset retirement obligation expenses decreased during the year ended December 31, 2025 compared to the same period in the prior year due to favorable revisions to the estimates for closed mines.

Costs Related to Terminated Acquisition. These costs relate to the terminated acquisition of multiple metallurgical coal mines from Anglo. In addition to typical costs, such as legal and professional fees, the charges include commitment and duration fees on the bridge loan facility of $20.8 million and $25.9 million, respectively, during the year ended December 31, 2025. Refer to Note 1. “Summary of Significant Accounting Policies” and Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further information regarding the acquisition, which information is incorporated herein by reference.

Shoal Creek Insurance Recovery - Property Damage. During June 2024, the Company reached a settlement related to the Shoal Creek losses and recorded a $109.5 million insurance recovery, as discussed in Note 16. “Other Events” in the accompanying consolidated financial statements. Of this amount, Adjusted EBITDA excludes an allocated amount applicable to losses recognized at the time of the insurance recovery related to longwall development and equipment deemed inoperable within the affected area of the mine, which consisted of $28.7 million recognized during the year ended December 31, 2023. The remaining $80.8 million, applicable to incremental costs and business interruption recoveries, was included in Adjusted EBITDA for the year ended December 31, 2024.

Interest Income. The decrease in interest income during the year ended December 31, 2025 compared to the prior year was driven by lower average cash balances during the current period.

Net Mark-to-Market Adjustment on Actuarially Determined Liabilities. The gain recorded during the year ended December 31, 2025 was driven by the favorable impacts of changes for the postretirement benefit plans related to updated claims experience and favorable expected future claims costs, based upon recent Centers for Medicare and Medicaid Services direct subsidy announcements ($15.1 million) and mark-to-market gains on pension plan assets ($2.1 million). These increases were offset by negative adjustments to Peabody’s black lung compensation liabilities resulting from increased claims ($4.5 million), decreases to the discount rates for all actuarially determined liabilities ($3.9 million) and unfavorable impacts of medical trend updates for the postretirement benefit plans ($3.8 million).

Table of Contents

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

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 5. “Derivatives and Fair Value Measurements” to the accompanying consolidated financial statements.

Income Tax Provision. The decrease in the income tax provision recorded during the year ended December 31, 2025 compared to the prior year period was primarily due to lower pretax income from the Company’s tax-paying foreign jurisdictions. Refer to Note 7. “Income Taxes” to the accompanying consolidated financial statements for additional information.

Net (Loss) Income Attributable to Common Stockholders

The following table presents net (loss) income attributable to common stockholders:

Net Income Attributable to Noncontrolling Interests. The decrease in net income attributable to noncontrolling interests during the year ended December 31, 2025 compared to the prior year period was primarily due to a decline in the financial results of Peabody’s majority-owned Wambo operation in which there is an outside non-controlling interest.

Diluted Earnings per Share (EPS)

The following table presents diluted EPS:

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 121.8 million and 141.9 million for the years ended December 31, 2025 and 2024, respectively.

Table of Contents

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA is defined as (loss) income from continuing operations before deducting net interest expense, income taxes, asset retirement obligation expenses and depreciation, depletion and amortization. Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the reportable segments’ operating performance, as displayed in the reconciliations below.

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

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

Table of Contents

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

Liquidity and Capital Resources

Overview

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

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

Table of Contents

Liquidity

As of December 31, 2025, the Company’s cash and cash equivalents balances totaled $575.3 million, including approximately $413 million held by U.S. subsidiaries, approximately $150 million held by Australian subsidiaries and the remainder held by other foreign subsidiaries in accounts predominantly domiciled in the U.S. A significant majority of the cash held by the Company’s foreign subsidiaries is denominated in U.S. dollars. This cash is generally used to support non-U.S. liquidity needs, including capital and operating expenditures in Australia and payment of the foreign subsidiaries’ share of certain U.S. corporate expenditures. From time to time, the Company may repatriate profits from its foreign subsidiaries to the U.S. in the form of intercompany dividends. During the year ended December 31, 2025, no profits from foreign subsidiaries were repatriated. If foreign-held cash is repatriated in the future, the Company does not expect restrictions or potential taxes will have a material effect to its near-term liquidity.

The Company’s available liquidity decreased to $942.1 million as of December 31, 2025 from $1,072.5 million as of December 31, 2024. Available liquidity was comprised of the following:

Capital Returns to Shareholders

The Company paid dividends of $36.5 million during the year ended December 31, 2025.

Surety Agreement Amendment and Collateral Requirements

In April 2023, the Company amended its existing agreement with the providers of its surety bond portfolio, dated November 6, 2020. Under the April 2023 amendment, the Company and its surety providers agreed to a maximum aggregate collateral amount based upon bonding levels which will vary prospectively as bonding levels increase or decrease. The amendment also extended the agreement through December 31, 2026. In order to maintain the maximum collateral agreement, the Company must remain compliant with a minimum liquidity test and a maximum net leverage ratio, as measured each quarter. The minimum liquidity test requires the Company to maintain liquidity at the greater of $400 million or the difference between the penal sum of all surety bonds and the amount of collateral posted in favor of surety providers, which was $487.3 million at December 31, 2025. The Company must also maintain a maximum net leverage ratio of 1.5 to 1.0, where the numerator consists of its funded debt, net of cash, and the denominator consists of its Adjusted EBITDA for the trailing twelve months. For purposes of calculating the ratio, only 50% of the outstanding principal amount of the Company’s 3.250% Convertible Senior Notes due March 2028 (the 2028 Convertible Notes) is deemed to be funded debt. The Company’s ability to pay dividends and make share repurchases is also subject to the quarterly minimum liquidity test. The Company is in compliance with such requirements at December 31, 2025.

At December 31, 2025, the Company’s maximum aggregate collateral amount was $509.9 million, which was comprised of $383.6 million in trust accounts and letters of credit of $126.3 million held for the benefit of certain surety providers.

Credit Support Facilities

In February 2022, the Company entered into an agreement, which provides up to $250.0 million of capacity for irrevocable standby letters of credit, primarily to support reclamation bonding requirements. The initial agreement required the Company to provide cash collateral at a level of 103% of the aggregate amount of letters of credit outstanding under the arrangement (limited to $5.0 million total excess collateralization.) Outstanding letters of credit bear a fixed fee in the amount of 0.75% per annum. The Company receives a variable deposit rate on the amount of cash collateral posted in support of letters of credit. The agreement was amended on November 3, 2025, to (i) extend the expiration date to December 31, 2030 and (ii) reduce the required minimum cash collateral amount to 102% of the aggregate amount of letters of credit outstanding under the agreement, provided that in the event the Company’s credit rating falls below certain thresholds, the minimum collateral amount shall increase to 103%. At December 31, 2025, letters of credit of $114.6 million were outstanding under the agreement, which were collateralized by cash of $116.9 million.

Table of Contents

In December 2023, the Company established cash-backed bank guarantee facilities, primarily to support Australian reclamation bonding requirements. The Company receives a variable deposit rate on the amount of cash collateral posted in support of the bank guarantee facilities, which mature at various dates between 2026 and 2029. At December 31, 2025, the bank guarantee facilities were backed by cash of $208.7 million.

Revolving Credit Facility

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

The revolving commitments and any related loans, if applicable (any such loans, the Revolving Loans), established by the 2024 Credit Agreement terminate or mature, as applicable, on January 18, 2028, subject to certain conditions relating to the Company’s outstanding 2028 Convertible Notes. The Revolving Loans bear interest at a secured overnight financing rate plus an applicable margin ranging from 3.50% to 4.25%, depending on the Company’s total net leverage ratio (as defined under the 2024 Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option. Letters of credit issued under the 2024 Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.50% to 4.25% plus a fronting fee equal to 0.125% per annum. Unused capacity under the 2024 Credit Agreement bears a commitment fee of 0.50% per annum. On November 25, 2024, the Company amended the 2024 Credit Agreement to, among other things, permit (i) Peabody’s then-planned acquisition of multiple coal mines from Anglo, (ii) the related bridge loan facility and (iii) the incurrence of additional indebtedness to finance the acquisition, subject to compliance with certain pro forma financial covenants. As further discussed in Note 1. “Summary of Significant Accounting Policies,” Peabody terminated the acquisition with Anglo on August 19, 2025.

As of December 31, 2025, the 2024 Credit Agreement had only been utilized for letters of credit, including $49.2 million outstanding as of December 31, 2025. These letters of credit support the Company’s reclamation bonding requirements, lease obligations, insurance policies and various other performance guarantees as further described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees.” Availability under the 2024 Credit Agreement was $270.8 million at December 31, 2025.

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

Capital Expenditures

For 2026, the Company is targeting total capital expenditures of approximately $340 million.

Indebtedness

The Company’s total indebtedness as of December 31, 2025 and 2024 is presented in the table below.

The Company’s indebtedness requires estimated contractual principal and interest payments, assuming interest rates in effect at December 31, 2025, of approximately $25 million in 2026, $16 million in 2027, $327 million in 2028 and less than $1 million in 2029 and thereafter.

Table of Contents

The Company paid cash of $39.5 million, $37.6 million and $61.9 million during the years ended December 31, 2025, 2024, and 2023, respectively, for interest, net of capitalized interest, related to the Company’s indebtedness and financial assurance instruments.

2028 Convertible Notes

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

The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem its then-existing senior secured notes and to pay related premiums, fees and expenses relating to the offering and redemptions.

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

During the fourth quarter of 2025, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes are convertible at the option of the holders during the first quarter of 2026. It is the Company’s current intent and policy to settle any conversions of the 2028 Convertible Notes through shares of its common stock. As such, the 2028 Convertible Notes are not classified as a current obligation in the accompanying consolidated balance sheets. Through February 18, 2026, the Company has not received any conversion requests and does not anticipate receiving any conversion requests in the near term as the market value of the 2028 Convertible Notes exceeds their conversion value.

Accounts Receivable Securitization Program

As described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements, the Company entered into an accounts receivable securitization program during 2017. The securitization program provides up to $225.0 million of funding capacity which is accounted for as a secured borrowing, limited to the availability of eligible receivables, and may be secured by a combination of collateral and the trade receivables underlying the program. Funding capacity under the program may also be utilized for letters of credit in support of other obligations, which has been the Company’s primary utilization. At December 31, 2025, the Company had no outstanding borrowings and $63.4 million of letters of credit outstanding under the program. The Company was not required to post cash collateral under the securitization program at December 31, 2025.

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

Other Requirements

The Company will incur significant future cash outflows for certain liabilities related to its prior mining activities and former employees. Such cash flows pertain to postretirement benefit plans, work-related injuries and illnesses, defined benefit pension plans, mine reclamation and end-of-mine closure costs and exploration obligations and are estimated to amount to approximately $110 million in 2026, $90 million in 2027, $85 million in 2028, $65 million in 2029, $75 million in 2030 and $1,318 million thereafter.

The Company has various short- and long-term take-or-pay arrangements in Australia and the U.S. associated with rail and port commitments for the delivery of coal, including amounts relating to export facilities. The estimated future cash flows associated with such arrangements are approximately $113 million in 2026, $115 million in 2027, $105 million in 2028, $75 million in 2029, $55 million in 2030 and $540 million thereafter.

The Company’s operating lease commitments, excluding potential contingent rental amounts, will require cash payments of approximately $41 million in 2026, $35 million in 2027, $29 million in 2028, $19 million in 2029, $12 million in 2030 and $3 million thereafter.

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at December 31, 2025.

Table of Contents

Cash Flows

The following table summarizes the Company’s cash flows for the years ended December 31, 2025 and 2024, as reported in the accompanying consolidated financial statements.

Operating Activities. The decrease in net cash provided by operating activities for the year ended December 31, 2025 compared to the prior year was driven by a year-over-year decrease in cash from collateral arrangements resulting from prior year collateral releases ($156.4 million), costs related to the terminated Anglo acquisition ($68.6 million) and lower cash from mining operations. These decreases were partially offset by a year-over-year increase in operating cash flow from working capital ($302.3 million), primarily attributable to changes in accounts payable and accrued expenses ($195.2 million) driven by prior year income tax payments.

Investing Activities. The decrease in net cash used in investing activities for the year ended December 31, 2025 compared to the prior year was driven by a decrease due to the prior year Wards Well acquisition ($143.8 million), the prior year deposit related to the terminated acquisition ($75.0 million) and the returned deposit related to the terminated acquisition ($29.0 million).

Financing Activities. The decrease in net cash used in financing activities for the year ended December 31, 2025 compared to the prior year was primarily driven by decreases in common stock repurchases ($183.1 million).

Off-Balance-Sheet Arrangements

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

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

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

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

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

Table of Contents

Not presented in the above table is $844.1 million of restricted cash and collateral which are included in the accompanying consolidated balance sheets at December 31, 2025, as described in Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” of the accompanying consolidated financial statements. Such collateral is primarily in support of the financial instruments noted above, including in relation to the Company’s surety bond portfolio, its collateralized letter of credit agreement, its bank guarantee facilities and amounts held directly with beneficiaries which are not supported by surety bonds. The restricted cash and collateral balance increased $34.3 million during the year ended December 31, 2025 due to a net increase in bonding requirements and the impact of foreign currency rate changes.

At December 31, 2025, the Company had total asset retirement obligations of $754.9 million. Bonding requirement amounts may differ significantly from the related asset retirement obligation because such requirements are calculated under the assumption that reclamation begins currently, whereas the Company’s accounting liabilities are discounted from the end of a mine’s economic life (when final reclamation work would begin) to the balance sheet date.

At December 31, 2025, the Company’s reclamation bonding requirements were supported by approximately $740 million of restricted cash and other balances serving as collateral, which substantially supports the financial liability for final mine reclamation as calculated in accordance with U.S. GAAP.

Guarantees and Other Financial Instruments with Off-Balance Sheet Risk. See Note 19. “Financial Instruments, Guarantees With Off-Balance-Sheet Risk and Other Guarantees” to the accompanying consolidated financial statements for a discussion of the Company’s accounts receivable securitization program and guarantees and other financial instruments with off-balance sheet risk.

Critical Accounting Policies and Estimates

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

Asset Retirement Obligations. The Company’s asset retirement obligations primarily consist of spending estimates for surface land reclamation and support facilities at both surface and underground mines in accordance with applicable reclamation laws and regulations in the U.S. and Australia as defined by each mining permit. Asset retirement obligations are determined for each mine using various estimates and assumptions including, among other items, estimates of disturbed acreage as determined from engineering data, estimates of future costs to reclaim the disturbed acreage and the timing of these cash flows, escalated for inflation and then discounted using a credit-adjusted, risk-free rate. As changes in estimates occur (such as mine plan revisions, changes in estimated costs or changes in timing of the performance of reclamation activities), the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free rate. If the Company’s assumptions do not materialize as expected, actual cash expenditures and costs that it incurs could be materially different than currently estimated. Moreover, regulatory changes could increase its obligation to perform reclamation and mine closing activities. Amortization associated with the Company’s asset retirement obligation assets of $25.0 million for the year ended December 31, 2025 was included in “Depreciation, depletion and amortization” in the Company’s consolidated statements of operations. Asset retirement obligation expense, consisting of both accretion expense and changes in estimates for the Company’s inactive locations, for the year ended December 31, 2025 was $36.5 million and payments totaled $51.2 million. See Note 11. “Asset Retirement Obligations” to the accompanying consolidated financial statements for additional information regarding the Company’s asset retirement obligations.

Table of Contents

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

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

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

No impairment charges related to long-lived assets were recorded for the year ended December 31, 2025. When necessary, the assumptions used are based on the Company’s best knowledge at the time it prepares its analysis but can vary significantly due to the volatile and cyclical nature of coal prices and demand, regulatory issues, unforeseen mining conditions, commodity prices and cost of labor. These factors may cause the Company to be unable to recover all or a portion of the carrying value of its long-lived assets.

The Company identified certain assets with an aggregate carrying value of approximately $64 million at December 31, 2025 in its Other U.S. Thermal segment whose recoverability is most sensitive to customer concentration risk.

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

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

Table of Contents

See Note 7. “Income Taxes” to the accompanying consolidated financial statements for additional information regarding valuation allowances and unrecognized tax benefits.

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

A determination of the amount of reserves required for these matters is made after considerable analysis of each individual issue. Peabody accrues for legal and environmental matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of possible loss exists and no anticipated loss within the range is more likely than any other anticipated loss, the Company records the accrual at the low end of the range, in accordance with Accounting Standards Codification 450, “Contingencies.”

Peabody provides disclosure surrounding loss contingencies when it believes that it is at least reasonably possible that a material loss may be incurred or an exposure to loss in excess of amounts already accrued may exist. Adjustments to contingent liabilities are made when additional information becomes available that affects the amount of estimated loss, which information may include changes in facts and circumstances, changes in interpretations of law in the relevant courts, the results of new or updated environmental remediation cost studies and the ongoing consideration of trends in environmental remediation costs.

Accrued contingent liabilities exclude claims against third parties and are not discounted. The current portion of these accruals is included in “Accounts payables and accrued expenses” and the long-term portion is included in “Other noncurrent liabilities” in the Company’s consolidated balance sheets. In general, legal fees related to environmental remediation and litigation are charged to expense as incurred. The Company includes the interest component of any litigation-related penalties within “Interest expense” in its consolidated statements of operations. See Note 20. “Commitments and Contingencies” to the accompanying consolidated financial statements for further discussion of the Company’s contingent liabilities.

Newly Adopted Accounting Standards and Accounting Standards Not Yet Implemented

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