0001064728-26-000006
SEC filingPeabody's 2025 results declined sharply due to lower seaborne pricing and a terminated acquisition, with Adjusted EBITDA falling 47.8%.
Peabody Energy Corporation describes itself as a leading producer of metallurgical and thermal coal. As of December 31, 2025, the Company owned interests in 16 active coal mining operations located in the United States and Australia, including a 50% equity interest in Middlemount Coal Pty Ltd. The Company's corporate headquarters is in St. Louis, Missouri.
Peabody reports its results of operations through four reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, and Other U.S. Thermal. The Seaborne Thermal segment includes the Wilpinjong, Wambo Open-Cut, and Wambo Underground mines in New South Wales, Australia. The Seaborne Metallurgical segment includes the Coppabella, Shoal Creek, Metropolitan, Moorvale, Centurion, and Middlemount mines. The Powder River Basin segment includes the North Antelope Rochelle, Caballo, and Rawhide mines in Wyoming. The Other U.S. Thermal segment includes the Bear Run, Wild Boar, Gateway North, El Segundo/Lee Ranch, Twentymile, and Francisco Underground mines. Revenue from the Seaborne segments represented approximately 51% of total revenue from coal supply agreements in 2025, while contributing approximately 20% of sales volumes. The U.S. thermal segments contributed approximately 49% of revenue and 80% of sales volumes.
Peabody produces thermal coal (used for electricity generation) and metallurgical coal (used for steelmaking). The Company's coal types include thermal/steam coal, coking coal, and pulverized coal injection (PCI) coal. The Centurion Mine, an underground longwall metallurgical coal mine in Queensland, Australia, commenced full-scale longwall production in February 2026 and is expected to enhance both the quantity and quality of production from the Seaborne Metallurgical segment.
Peabody's coal supply agreements are primarily with electricity generators, industrial facilities, and steel manufacturers. Most sales are made under long-term coal supply agreements (initial terms of one year or longer), which comprised approximately 87% of worldwide sales from mining operations by volume in 2025. A smaller portion is sold under contracts of less than one year, including spot sales. For seaborne operations, 50% of sales volume in 2025 was under contracts with a duration of less than one year. The Company's sales backlog was approximately 238 million tons as of January 1, 2026, representing approximately two years of production. Peabody derived 25% of its revenue from coal supply agreements from its five largest customers in 2025, with the largest customer contributing approximately $291 million (approximately 8% of total revenue).
Demand for coal and prices are highly competitive and influenced by global economic conditions, demand for electricity and steel, cost of alternative sources, and regulatory policies. For thermal coal, Peabody competes with alternative fuel sources such as natural gas, oil, nuclear, hydro, wind, solar, and biomass. Principal U.S. coal competitors include Alliance Resource Partners, American Consolidated Natural Resources, Core Natural Resources, and others. Major international competitors include Adaro Energy, BHP, Glencore, and Yancoal Australia. For metallurgical coal, competition is based on coal quality, delivered energy cost, customer service, and reliability. Major international metallurgical coal competitors include Anglo American, BHP, Core Natural Resources, Glencore, and Warrior Met Coal.
Peabody's strategic priorities include advancing the Centurion Mine to enhance Seaborne Metallurgical production, pursuing asset optimization through evaluation of rare earth element and critical mineral potential, power generation from coal mine gas, and renewable energy projects on reclaimed lands. The Company selectively renews long-term supply agreements at favorable prices and terms, leverages global purchasing power for supply chain reliability, and supports advanced coal technologies (HELE and CCUS) to align with customer commitments and mitigate regulatory risk.
As of December 31, 2025, Peabody had approximately 5,400 employees, including approximately 4,200 hourly employees. Approximately 3,500 employees are located in the U.S., with the remainder primarily in Australia. About 94% of team members work at mine operations. The Company achieved a global safety incidence rate of 0.71 incidents per 200,000 hours worked in 2025, an all-time record and 76% better than the U.S. industry average. The typical employee has approximately seven and a half years of experience, and approximately 42% of employees remain with the Company for more than five years.
For the year ended December 31, 2025, Peabody Energy reported a net loss from continuing operations of $42.3 million, a dramatic swing from net income of $407.3 million in 2024. Total revenue declined 8.9% to $3.86 billion, driven primarily by lower seaborne coal pricing. Adjusted EBITDA, the company's key operating metric, fell 47.8% to $454.9 million. The decline was attributed to lower seaborne thermal and metallurgical coal prices, the absence of a prior-year $109.5 million insurance recovery at the Shoal Creek Mine, and $78.9 million in costs related to the terminated Anglo acquisition. These headwinds were partially offset by a $100.0 million lower income tax provision and $86.0 million in lower operating costs. Diluted EPS from continuing operations was negative $0.43, compared to positive $2.73 in the prior year.
Segment performance was mixed. Seaborne Thermal revenue fell 25.2% to $908.5 million, with Adjusted EBITDA down 48.3% to $222.2 million, as lower realized prices and a 6.1% decline in volumes outweighed cost reductions. Seaborne Metallurgical revenue decreased 1.8% to $1,036.6 million, but Adjusted EBITDA plunged 76.7% to $56.4 million, reflecting lower prices and the prior-year insurance recovery, partially offset by a 17.8% increase in tons sold from the Shoal Creek and Centurion mines. Powder River Basin was a bright spot, with revenue up 4.9% to $1,153.0 million and Adjusted EBITDA rising 26.8% to $175.8 million, driven by a 6.2% increase in volumes and lower sales-related costs from a federal royalty rate reduction. Other U.S. Thermal revenue declined 14.0% to $707.3 million, with Adjusted EBITDA down 52.7% to $71.4 million, due to lower volumes, reduced contract cancellation settlements, and unfavorable pricing.
Management's forward-looking commentary highlights the commencement of full-scale longwall production at the Centurion Mine in February 2026, expected to enhance Seaborne Metallurgical output and quality. The company is targeting total capital expenditures of approximately $340 million for 2026. Peabody is also progressing its rare earth elements (REE) initiative, having been awarded $6.25 million in funding from the Wyoming Energy Authority for a pilot plant. The company remains confident in its position regarding the arbitration with Anglo over the terminated acquisition. Liquidity stood at $942.1 million as of December 31, 2025, providing a buffer for ongoing operations and strategic investments.
As of December 31, 2025, Peabody held $575.3 million in cash and cash equivalents, down from $700.4 million at year-end 2024. Total debt (net of unamortized issuance costs) stood at $336.4 million, a slight decrease from $348.1 million. The company's total stockholders' equity was $3,536.4 million, compared to $3,650.5 million in the prior year. Inventory was $383.2 million, relatively flat versus $393.4 million. The company also reported $844.1 million in restricted cash and collateral, up from $809.8 million.
Peabody disclosed approximately $5.0 billion in committed revenue from contracts with customers where volumes and prices were fixed or reasonably estimable as of December 31, 2025. Approximately 33% of this amount is expected to be recognized over the next twelve months, with the remainder thereafter. This estimate excludes variable-price contracts common in seaborne metallurgical and thermal coal markets. The company also reported $311.5 million in total royalty expense for 2025, down from $370.0 million in 2024.
Peabody did not repurchase any common stock during 2025, compared to $183.1 million in 2024. Dividends totaled $36.5 million ($0.30 per share annually, or $0.075 per quarter), flat with the prior year. Capital expenditures were $411.4 million, up from $401.3 million in 2024, representing 10.7% of sales. Debt repayments were $12.2 million, with no new debt issued. The company also paid $22.9 million in distributions to noncontrolling interests.
Peabody reports five segments: Seaborne Thermal ($908.5M revenue, -25.2% YoY), Seaborne Metallurgical ($1,036.6M, -1.8% YoY), Powder River Basin ($1,153.0M, +4.9% YoY), Other U.S. Thermal ($707.3M, -14.0% YoY), and Corporate and Other ($56.1M, +22.5% YoY). The decline in Seaborne Thermal was driven by lower export revenue ($771.8M vs $1,060.6M in 2024). Seaborne Metallurgical export revenue was $1,034.8M, down from $1,049.5M. Powder River Basin revenue increased due to higher domestic thermal coal sales. Other U.S. Thermal saw a decline in domestic revenue to $707.5M from $785.0M.
Peabody faces extensive regulatory risks across U.S. and Australia. New 'climate superfund' laws in New York and Vermont could impose material liabilities for historical emissions. Environmental permitting is increasingly stringent and litigated; delays or denials could halt operations. Changes in trade policy, including tariffs, could impact metallurgical coal exports and customer viability. Political conflicts and sanctions add macro uncertainty.
Coal price volatility remains the primary risk, driven by competition from natural gas, renewables, and declining thermal coal demand. Operational hazards (fires, flooding, equipment failures) are partly insured but could cause significant disruptions. Take-or-pay agreements in Australia ($1.0B) lock in fixed costs and may force uneconomic production. The company's ability to maintain financial assurances (surety bonds, letters of credit) is critical; failure could revoke mining permits. Labor relations and reliance on key personnel also pose operational risks.
Technological shifts in steelmaking (electric arc furnaces), substitution of coal with natural gas and renewables, and activist campaigns against coal are reducing long-term demand. Peabody's hedging activities do not cover all risks and may increase earnings volatility. The company's AI and IT modernization (ERP upgrade) introduce cybersecurity and implementation risks.
Leverage is moderate ($320M debt plus revolver), but covenants restrict flexibility. The ability to finance operations and obtain bonding may be constrained by ESG-focused lenders and insurers. The Anglo American arbitration outcome is uncertain and could result in significant cash outflows. Deferred tax assets ($1.6B) are subject to valuation allowance and potential ownership change limitations. Stock price volatility, dividend uncertainty, and dilution from convertible debt and equity plans are additional shareholder risks.
The provided document excerpt contains only the table of contents and exhibit list; the actual cash flow statement on page F-6 is not included. Therefore, no cash flow figures can be extracted.