BTU · Peabody Energy Corporation

Period Performance

Period Performance

For the nine months ended September 30, 2025, Peabody reported revenue of $2,839.2 million, a decrease of 9% from $3,113.6 million in the prior-year period. The decline was driven by lower seaborne coal pricing, particularly in the Seaborne Thermal and Seaborne Metallurgical segments, partially offset by higher volumes in Powder River Basin. Net loss from continuing operations was $53.9 million compared to net income of $369.0 million in the prior year, a swing of $422.9 million. The decrease was primarily attributable to lower revenue, higher operating costs, $75.2 million in costs related to the terminated Anglo American acquisition, and the absence of a $109.5 million insurance recovery recorded in the prior year (of which $80.8 million was included in Adjusted EBITDA). Diluted EPS from continuing operations was $(0.51) versus $2.47 in the prior year. Adjusted EBITDA declined 52% to $336.8 million from $695.0 million.

Segment Dynamics

• Seaborne Thermal: Revenue fell 22% to $702.9 million on lower realized prices ($16.06/ton decline). Adjusted EBITDA dropped 50% to $158.7 million, with margin compressing from 35.2% to 22.6%. Volume was relatively flat.
• Seaborne Metallurgical: Revenue decreased 7% to $731.2 million as higher volume (up 1.0M tons) offset lower realized prices. Adjusted EBITDA plunged 86% to $31.8 million, largely due to the prior year's $80.8 million insurance recovery (business interruption) and weaker pricing. Excluding the recovery, Adjusted EBITDA fell from $138.9M to $31.8M.
• Powder River Basin: Revenue grew 9% to $852.7 million on 10% higher volumes. Adjusted EBITDA surged 53% to $131.0 million, with margin expanding from 11.0% to 15.4%, benefiting from volume leverage and a federal royalty rate reduction under the OBBBA.
• Other U.S. Thermal: Revenue declined 15% to $515.8 million on 11% lower volumes due to a dragline outage at Bear Run and geological issues at Twentymile. Adjusted EBITDA fell 52% to $53.3 million.
• Corporate and Other: Adjusted EBITDA improved slightly to $(38.0) million from $(39.1) million, with higher gains on asset sales offset by higher selling and administrative expenses.

Forward View

Peabody is advancing the Centurion Mine toward full longwall production in February 2026. The company expects 2025 capital expenditures of approximately $420 million. Management highlighted continued volatility in seaborne metallurgical and thermal coal markets, influenced by Chinese supply reforms, Indian demand, and global trade policies. The OBBBA federal royalty rate reduction provided an estimated $9 million benefit in Q3 2025, with a similar benefit expected in Q4. The company remains confident in its position regarding the terminated Anglo acquisition arbitration. No specific revenue or earnings guidance was provided.

Notes & Operating Detail

Balance Sheet & Liquidity

As of September 30, 2025, Peabody held $603.3 million in cash and cash equivalents, down from $700.4 million at year-end 2024. Total debt stood at $337.3 million (net of $4.8 million unamortized issuance costs), comprising $320.0 million of 3.250% Convertible Senior Notes due 2028, $22.1 million in finance lease obligations, and a repaid BUMA Loan Note. Shareholders' equity was $3,539.8 million. The company maintained $270.7 million of availability under its $320.0 million revolving credit facility and $77.2 million under its accounts receivable securitization program. Restricted cash and collateral totaled $851.0 million, primarily supporting surety and reclamation obligations.

Commitments & Contractual Obligations

Peabody disclosed $64.7 million in purchase commitments for capital expenditures, all due within 12 months. Off-balance-sheet financial instruments supporting reclamation and other obligations totaled $1,069.6 million net of collateralized letters of credit, consisting of $924.8 million in surety bonds and $144.8 million in other support. The company's maximum aggregate collateral amount under its surety agreement was $519.2 million. Additionally, the company had $62.5 million in letters of credit outstanding under its securitization program.

Capital Allocation (buybacks, dividends, debt, capex)

During the nine months ended September 30, 2025, Peabody did not repurchase any common stock. Dividends paid totaled $27.5 million ($0.075 per share quarterly). Debt repayments were $9.9 million, and the company repaid the $9.3 million BUMA Loan Note following the terminated Anglo acquisition. Capital expenditures were $280.8 million, representing 9.9% of revenue. The company also paid $46.7 million in commitment and duration fees on the terminated bridge loan facility, recorded as costs related to terminated acquisition.

Segment / Geographic Mix (if disclosed at note level)

Peabody reports four segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, and Other U.S. Thermal. For the nine months ended September 30, 2025, segment revenue totaled $2,802.6 million (excluding Corporate and Other). Seaborne Thermal revenue fell 22.3% YoY to $702.9 million, with export revenue of $595.4 million. Seaborne Metallurgical revenue declined 6.7% to $731.2 million, all export. Powder River Basin revenue rose 9.1% to $852.7 million, all domestic. Other U.S. Thermal revenue fell 15.5% to $515.8 million, all domestic. Segment Adjusted EBITDA was $374.8 million, down from $734.1 million in the prior-year period, driven by lower Seaborne Thermal and Metallurgical results.