v3.26.1
Long-term Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Long-term Debt Long-term Debt 
The Company’s total indebtedness as of June 30, 2026 and December 31, 2025 consisted of the following:
Debt Instrument (defined below, as applicable)June 30, 2026December 31, 2025
(Dollars in millions)
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)
$78.8 $320.0 
0.50% Convertible Senior Notes due June 2031 (2031 Convertible Notes)
250.0 — 
Finance lease obligations17.7 20.8 
Less: Debt issuance costs(7.5)(4.4)
339.0 336.4 
Less: Current portion of long-term debt13.5 15.2 
Long-term debt$325.5 $321.2 
Partial Repurchase of 2028 Convertible Notes
On June 2, 2026, through a private offering, the Company issued $250.0 million in aggregate principal amount of 2031 Convertible Notes, as described below. The Company used the proceeds of the offering of the 2031 Convertible Notes, together with available cash, to repurchase $241.2 million aggregate principal amount of its outstanding 2028 Convertible Notes for consideration of $386.8 million. The repurchase of the existing notes was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20 and ASU 2024-04. A portion of the consideration in excess of the amount issuable pursuant to the original conversion terms, $17.2 million, was recognized as “Induced conversion expense” in the unaudited condensed consolidated statements of operations during the three and six months ended June 30, 2026. The remaining excess of the consideration over the carrying value of the repurchased 2028 Convertible Notes on the date of repurchase of $131.1 million, which included unamortized debt issuance costs of $2.7 million, was recorded as “Additional paid-in capital” in the condensed consolidated balance sheets.
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, dated as of March 1, 2022 (the 2028 Indenture), between the Company and Wilmington Trust, National Association, as trustee. During the second quarter of 2026, in connection with the issuance of the 2031 Convertible Notes, the Company used the proceeds therefrom and available cash to repurchase $241.2 million in aggregate principal amount of the 2028 Convertible Notes as described above.
The remaining 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.
The initial conversion rate for the 2028 Convertible Notes was 50.3816 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represented an initial conversion price of approximately $19.85 per share of the Company’s common stock. The terms of the 2028 Indenture require conversion rate adjustments upon the payment of dividends to holders of the Company’s common stock once such cumulative dividends impact the conversion rate by at least 1%. Effective November 13, 2025, the conversion rate was increased to 52.3853 shares of the Company’s common stock per $1,000 principal amount of 2028 Convertible Notes, which represented an adjusted conversion price of approximately $19.09 per share. Under the applicable conversion rate formula, the cumulative $0.150 per share dividends declared and paid since the prior conversion rate adjustment yielded a revised conversion rate of 52.6686 shares per $1,000 principal amount of 2028 Convertible Notes, which did not meet the 1% threshold to impact the existing conversion rate of 52.3853. The conversion rate may be impacted prospectively, based upon cumulative dividends paid. The conversion rate is also subject to further adjustment under certain circumstances in accordance with the terms of the 2028 Indenture.
During the first quarter of 2026, the Company’s reported common stock prices prompted the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were convertible at the option of the holders during the second quarter of 2026, for which no conversion requests were received. During the second quarter of 2026, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes will not be convertible during the third quarter of 2026.
As of June 30, 2026, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $16.6 million.
2031 Convertible Notes
On June 2, 2026, through a private offering, the Company issued the 2031 Convertible Notes in the aggregate principal amount of $250.0 million. The 2031 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture, dated June 2, 2026 (the 2031 Indenture), between the Company and Wilmington Trust, National Association, as trustee.
The Company used the proceeds of the offering of the 2031 Convertible Notes to fund $16.7 million of capped call transactions, as discussed below, and together with available cash, to repurchase $241.2 million of its outstanding 2028 Convertible Notes, as described above. The Company capitalized $6.8 million of debt issuance costs related to the offering during the six months ended June 30, 2026.
The 2031 Convertible Notes will mature on June 1, 2031, unless earlier repurchased, redeemed or converted in accordance with their terms. The 2031 Convertible Notes will bear interest from June 2, 2026 at a rate of 0.50% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2026.
The 2031 Convertible Notes will be convertible at the option of the holders only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2026, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the Measurement Period) in which the trading price per $1,000 principal amount of 2031 Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls such 2031 Convertible Notes for redemption; and (5) at any time from, and including, December 1, 2030 until the close of business on the second scheduled trading day immediately before the maturity date.
Upon conversion, the Company may satisfy its conversion obligation by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2031 Indenture. The initial conversion rate for the 2031 Convertible Notes will be 26.0970 shares of the Company’s common stock per $1,000 principal amount of 2031 Convertible Notes, which represents an initial conversion price of approximately $38.32 per share of the Company’s common stock. The initial conversion price represents a premium of approximately 32.5% over the U.S. composite volume weighted average price of Peabody’s common stock from 9:30 a.m. through 4:00 p.m. Eastern Daylight Time on May 28, 2026, which was $28.9197 per share. The conversion rate and conversion price are subject to adjustment under certain circumstances in accordance with the terms of the 2031 Indenture. If certain corporate events described in the 2031 Indenture occur prior to the maturity date, or the Company delivers a redemption notice (as described below), the conversion rate will be increased for a holder who elects to convert its 2031 Convertible Notes in connection with such corporate event or redemption notice, as the case may be, in certain circumstances.
The Company may not redeem the 2031 Convertible Notes prior to June 5, 2029, except in the event of a cleanup redemption (as defined below). The Company may redeem the 2031 Convertible Notes in whole or in part (subject to certain limitations), at its option at any time, and from time to time, on or after June 5, 2029 and on or before the 31st scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount of the 2031 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if (i) the 2031 Convertible Notes are “freely tradable” (as defined in the 2031 Indenture), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date the Company sends the related redemption notice; and (ii) the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding 2031 Convertible Notes unless at least $75 million aggregate principal amount of 2031 Convertible Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. No sinking fund is provided for the 2031 Convertible Notes.
Peabody may redeem for cash all, but not less than all, of the 2031 Convertible Notes at any time if (i) the 2031 Convertible Notes are “freely tradable” (as defined in the 2031 Indenture), and all accrued and unpaid additional interest, if any, has been paid in full, as of the date Peabody sends the related redemption notice; and (ii) the amount of the 2031 Convertible Notes that remains outstanding is less than 15% of the aggregate principal amount of the 2031 Convertible Notes initially issued under the 2031 Indenture at a redemption price equal to 100% of the principal amount of the 2031 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (a cleanup redemption).
If the Company undergoes a fundamental change (as defined in the 2031 Indenture), noteholders may require the Company to repurchase their 2031 Convertible Notes at a cash repurchase price equal to 100% of the principal amount of the 2031 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
Capped Call Transactions
In connection with the offering of the 2031 Convertible Notes, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions) with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2031 Convertible Notes prior to May 30, 2030, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted 2031 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the Capped Call Transactions will initially be $50.6095 per share, which represents a premium of approximately 75.0% over the U.S. composite volume weighted average price of the Company’s common stock from 9:30 a.m. through 4:00 p.m. Eastern Daylight Time on May 28, 2026 (which was $28.9197 per share), and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions will expire over a period of trading days beginning on April 17, 2030.
The Capped Call Transactions are accounted for as equity instruments in “Additional paid-in capital” in the condensed consolidated balance sheet and are not subsequently remeasured as long as they continue to meet the conditions for equity classification. Accordingly, the premiums paid for the Capped Call Transactions are recorded as a reduction to additional paid-in capital and do not affect the Company’s basic or diluted earnings per share, although they are expected to reduce the potential economic dilution from any conversion of the 2031 Convertible Notes, subject to the cap.
Revolving Credit Facility
The Company established a revolving credit facility by entering into a credit agreement, dated as of January 18, 2024, as amended, (the 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. On June 9, 2026, the Company amended the Credit Agreement to, among other things, permit the Australian Surety Bond Facilities (as defined and further described in Note 12. “Financial Instruments and Other Guarantees”). On June 30, 2026, the Company further amended the Credit Agreement to, among other things, (i) increase the revolving commitments under the Credit Agreement from an aggregate principal amount equal to $320.0 million to an aggregate principal amount equal to $400.0 million; (ii) extend the maturity date of the revolving commitments and any related loans (any such loans, the Revolving Loans) from January 18, 2028 to June 30, 2030; and (iii) decrease the interest rate applicable to the Revolving Loans from a rate equal to a secured overnight financing rate (SOFR) plus an applicable margin ranging from 3.50% to 4.25%, depending on the Company’s total net leverage ratio (as defined under the Credit Agreement) or a base rate plus an applicable margin ranging from 2.50% to 3.25%, at the Company’s option, to a rate equal to SOFR plus an applicable margin ranging from 3.25% to 4.00%, depending on the Company’s total net leverage ratio or a base rate plus an applicable margin ranging from 2.25% to 3.00%, at the Company’s option. After the June 30, 2026 amendment, letters of credit issued under the Credit Agreement incur a combined fee equal to an applicable margin ranging from 3.25% to 4.00% plus a fronting fee equal to 0.125% per annum. Prior to the amendment, the combined fee was 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 Credit Agreement bears a commitment fee of 0.50% per annum. The Company paid aggregate deferred financing costs of $5.6 million as part of the amendments during the six months ended June 30, 2026.
During the second quarter of 2026, the Company borrowed and repaid $110.0 million under the revolving credit facility. At June 30, 2026, the Credit Agreement was only utilized for letters of credit of $58.2 million. 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 12. “Financial Instruments and Other Guarantees.” Availability under the revolving credit facility was $341.8 million at June 30, 2026.
The 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 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.
Interest Charges
The following table presents the components of the Company’s interest expense related to its indebtedness and financial assurance instruments such as surety bonds and letters of credit. Additionally, the table sets forth the amount of cash paid for interest, net of capitalized interest and the amount of non-cash interest expense primarily related to the amortization of debt issuance costs.
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(Dollars in millions)
2028 Convertible Notes$2.0 $2.6 $4.6 $5.2 
2031 Convertible Notes0.1 — 0.1 — 
Finance lease obligations0.4 0.3 0.7 0.7 
Financial assurance instruments6.2 6.4 12.9 13.6 
Amortization of debt issuance costs1.4 1.4 2.8 2.8 
Receivables securitization program0.6 0.6 1.2 1.2 
Capitalized interest— (1.7)(2.1)(3.9)
Other2.0 1.5 3.2 3.0 
Interest expense, net of capitalized interest$12.7 $11.1 $23.4 $22.6 
Cash paid for interest, net of capitalized interest$23.4 $14.2 $33.3 $24.1 
Non-cash interest expense$1.4 $1.7 $2.8 $3.3 
Covenant Compliance
The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2026.