Numerous legal challenges to the final rule were filed in the D.C. Circuit. Sixteen separate petitions for review were filed, and the challengers include 25 states, utilities, mining companies (including Peabody), labor unions, trade organizations and other groups. The cases were consolidated under the case filed by North Dakota (D.C. Cir. No. 15-1381). Four additional cases were filed seeking review of the EPA’s denial of reconsideration petitions in a final action published in the May 6, 2016 Federal Register entitled “Reconsideration of Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary Sources: Electric Generating Units; Notice of final action denying petitions for reconsideration.” Pursuant to an order of the court, these cases remain in abeyance, subject to requirements for the EPA to file 90-day status reports.

Following Federal Register publication, 39 separate petitions for review of the CPP by approximately 157 entities were filed in the D.C. Circuit. The petitions reflected challenges by 27 states and governmental entities, as well as by utilities, industry groups, trade associations, coal companies and other entities. The lawsuits were consolidated with the case filed by West Virginia and Texas (in which other states also joined) (D.C. Cir. No. 15-1363). On October 29, 2015, we filed a motion to intervene in the case filed by West Virginia and Texas, in support of the petitioning states. The motion was granted on January 11, 2016. Numerous states and other entities also intervened in support of the EPA.

Based on the EPA’s final rules repealing and replacing the CPP, petitioners in the D.C. Circuit matter seeking review of CPP, including Peabody,the Company, filed a motion to dismiss, which the court granted in September 2019.

The U.S. Army Corps of Engineers (Corps) regulates certain activities affecting navigable waters and waters of the U.S., including wetlands. Section 404 of the CWA requires mining companies to obtain permits from the Corps to place material in or mine through jurisdictional waters of the U.S.

States are empowered to develop and apply water quality standards. These standards are subject to change and must be approved by the EPA. Discharges must either meet state water quality standards or be authorized through available regulatory processes such as alternate standards or variances. Standards vary from state to state. Additionally, through the CWA Section 401 certification program, state and tribal regulators have approval authority over federal permits or licenses that might result in a discharge to their waters. State and tribal regulators consider whether the activity will comply with their water quality standards and other applicable requirements in deciding whether or not to certify the activity. On June 1, 2020,Although the EPA issued a final rule intended to clarify the scope of the state or tribal regulators’ authorityin 2020 that effectively could have in effect limitlimited state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections in some circumstances.

The EPA has also taken action on a number of different rules and guidance affecting the interpretation and application of NSR. In a final rule (83 Fed. Reg. 57,324 (Nov. 15, 2018)), the EPA completed reconsideration of a 2009 petition to clarify when certain actions must be “aggregated” for purposes of determining whether these actions are part of a single project to which NSR applies. The EPA has additionally published guidance on the definition of “ambient air” (Revised Policy on Exclusions from “Ambient Air,” Dec. 2, 2019) and guidance concerning when multiple air pollution-emitting activities may be considered to be “adjacent” so that they should be considered to be a single source (Interpreting “Adjacent” for New Source Review and Title V Source Determinations in All Industries Other Than Oil and Gas, Nov. 26, 2019). Additional memorandum and applicability determinations have also been made that address other NSR issues. These rules, guidance and memorandum may therefore affect the construction, reconstruction and modification of sources and the level of pollution control requirements that will be necessary on a case-by-case basis.

Subtitle C of RCRA exempted fossil fuel combustion wastes from hazardous waste regulation until the EPA completed a report to Congress and made a determination on whether the wastes should be regulated as hazardous. On December 19, 2014, the EPA announced the final rule on coal combustion residuals (CCR or coal ash). As finalized, the rule continues the exemption of CCR from regulation as a hazardous waste, but does impose new requirements at existing CCR surface impoundments and landfills that will need to be implemented over a number of different time-frames in the coming months and years, as well as at new surface impoundments and landfills. Generally, EPA-imposed requirements will increase the cost of CCR management, but not as much as if the rule had regulated CCR as hazardous.

The Australian mining industry is regulated by Australian federal, state and local governments with respect to environmental issues such as land reclamation, water quality, air quality, dust control, noise, planning issues (such as approvals to expand existing mines or to develop new mines) and health and safety issues. The Australian federal government retains control over the level of foreign investment and export approvals. Industrial relations are regulated under both federal and state laws. Australian state governments also require coal companies to post deposits or give other security against land which is being used for mining, with those deposits being returned or security released after satisfactory reclamation is completed.

In Queensland, laws and regulations related to mining include, but are not limited to, the Mineral Resources Act 1989, Environmental Protection Act 1994 (EP Act), Environmental Protection Regulation 2008, Planning Act 2016, Coal Mining Safety and Health Act 1999, Minerals and Energy Resources (Common Provisions) Act 2014, Explosives Act 1999, Aboriginal Cultural Heritage Act 2003, Water Act 2000, State Development and Public Works Organisation Act 1971, Queensland Heritage Act 1992, Transport Infrastructure Act 1994, Nature Conservation Act 1992, Vegetation Management Act 1999, Biosecurity Act 2014, Land Act 1994, Regional Planning Interests Act 2014, Fisheries Act 1994 and Forestry Act 1959. Under the EP Act, policies have been developed to achieve the objectives of the law and provide guidance on specific areas of the environment, including air, noise, water and waste management. State planning policies address matters of Queensland state interest, and must be adhered to during mining project approvals. The Mineral Resources Act 1989 was amended effective September 27, 2016 to include significant changes to the management of overlapping coal and coal seam gas tenements, and the coordination of activities and access to private and public land. In November 2016, amendments to the EP Act and the Water Act 2000 became effective that facilitate regulatory scrutiny of the environmental impacts of underground water extraction during the operational phase of resource projects for all tenements yet to commence mineral extraction. The ‘chain of responsibility’ provisions of the EP Act, which became effective in April 2016, allow the regulator to issue an environmental protection order (EPO) to a related person of a company in two circumstances: (a) if an EPO has been issued to the company, an EPO can also be issued to a related person of the company (at the same time or later); or (b) if the company is a high risk company (as defined in the EP Act), an EPO can be issued to a related person of the company (whether or not an EPO has also been issued to the company). A guideline has been issued that provides more certainty to the industry on the circumstances in which an EPO may be issued.

In New South Wales, laws and regulations related to mining include, but are not limited to, the Mining Act 1992, Work Health and Safety (Mines) Act 2013, Coal Mine Subsidence Compensation Act 2017, Environmental Planning and Assessment Act 1979 (EPA Act), Environmental Planning and Assessment Regulations 2000, Protection of the Environment Operations Act 1997, Contaminated Land Management Act 1997, Explosives Act 2003, Water Management Act 2000, Water Act 1912, Radiation Control Act 1990, Biodiversity Conservation Act 2016 (BC Act), Heritage Act 1977, Aboriginal Land Rights Act 1983, Crown Land Management Act 2016, Dangerous Goods (Road and Rail Transport) Act 2008, Fisheries Management Act 1994, Forestry Act 2012, Native Title (New South Wales) Act 1994, Biosecurity Act 2015, Roads Act 1993 and National Parks & Wildlife Act 1974.

On August 25, 2017, the BC Act commenced in New South Wales and imposes a revised framework for the assessment of potential impacts on biodiversity that may be caused by a development, such as a proposed mining project. The BC Act requires these potential impacts on biodiversity to be offset in perpetuity, by one or more of the following means: securing land based offsets and retiring biodiversity credits, making a payment into a biodiversity conservation fund or in some cases through mine site ecological rehabilitation. The data collected from the biodiversity impact assessment process is inputted into a new offsets payment calculator in order to determine the amount payable by the proponent to offset the impacts. The proposed development can only proceed once the biodiversity offset obligations have been satisfied.

OurPeabody’s reclamation bonding requirements in Australia were $312.6$240.2 million as of December 31, 2020.2021. The bond requirements represent the states’ calculated cost to reclaim the current operations of a mine if it ceases to operate in the current period less any discounts agreed with the state. The cost calculation for each bond must be completed according to the regulatory authority of each state. The costs associated with ourthe Company’s Australian asset retirement obligations are calculated in accordance with U.S. generally accepted accounting principles and were $225.4$201.2 million as of December 31, 2020.2021. The total bonding requirements for ourthe Company’s Australian operations differ from the calculated costs associated with the asset retirement obligations because the costs associated with asset retirement obligations are discounted from the end of the mine’s economic life to the balance sheet date in recognition of the economic reality that reclamation is conducted progressively and final reclamation is projected to be a number of years away, whereas the bonding amount represents the states’ calculated cost of reclamation if a mine ceases to operate immediately as well as different costs assumptions.

Through the Mining Act, environmental protection and reclamation are regulated by conditions in all mining leases including requirements for the submission of a mining operations plan (MOP) prior to the commencement of operations. All mining operations must be carried out in accordance with the MOP which describes site activities and the progress toward environmental and reclamation outcomes and are updated on a regular basis or if mine plans change. The mines publicly report their reclamation performance on an annual basis.

In support of the MOP process, a reclamation cost estimate is calculated periodically to determine the amount of bond support required to cover the cost of reclamation based on the extent of disturbance during the MOP period.

Under significant reforms proposed by the NSW Resources Regulator in October 2020, all new and existing mines in NSW will be regulated by new standard rehabilitation conditions. The conditions will apply to all new and existing mining leases and focus on transparently requiring progressive mine site rehabilitation throughout the life of the mine. The draft Mining Amendment (Standard Conditions of Mining Leases - Rehabilitation) Regulation 2020 has been released for consultation. The new conditions would apply to all new mining leases and would be introduced into existing mining leases over a 12 to 24 month transition period. The conditions require (amongst other things) that the leaseholder must rehabilitate land and water in the mining area that is disturbed by activities under the mining lease as soon as reasonably practicable after the disturbance occurs. The proposed rehabilitation management plan for the mining area which must be prepared for large mines is intended to replace the current approach of preparing a mining operation plan.

In November 2018, the Queensland government passed the Mineral and Energy Resources (Financial Provisioning) Act 2018 providing for a new financial assurance (FA) framework and new progressive rehabilitation requirements. The new FA framework creates a pooled fund covering most mines and most of the total industry liability, plus other options for providing FA if not part of the pooled fund (for example, allowing insurance bonds or cash). The percentage rate of the total rehabilitation cost payable into the pooled fund will take into account the financial strength of the holder of the EA for the mine and the project strength of the mine. The total rehabilitation cost is determined using an updated rehabilitation cost calculator, which no longer provides for discounting. The commencement date for the new FA framework was April 1, 2019 and there is a transitional period during which wePeabody will move each of ourits mines in Queensland into the new FA framework.

The new progressive rehabilitation requirements commenced on November 1, 2019 and require each mine, within a three-year transitional period, to establish a schedule of rehabilitation milestones covering the life of the mine, and any significant changes to the timing of rehabilitation will require regulatory approval. If there is to remain an area within the mine that does not have a post-mining land use (referred to as a non-use management area or NUMA) then each such NUMA will need to pass a public interest evaluation test as part of the approval process. An example of a NUMA is the void that remains after open-cut mining activities have been completed. Under the legislation, each current mine is exempt from the requirement to justify its NUMAs to the extent that its current approvals provide for such areas. We areThe Company is of the view that there will not be a need to seek any further regulatory approvals for any of the NUMAs at any of ourits Queensland mines.

On May 20, 2020, the Queensland Parliament passed a bill into law that introduces the criminal offense of ‘industrial manslaughter’ for executive officers, individuals who are “senior officers” and companies in the mining industry. Individuals now face a maximum prison sentence of 20 years and companies could be fined up to approximately $13 million Australian dollars. This new law became effective July 1, 2020. The bill also introduced the requirement for statutory role holders to be employees of the coal mine operator entity with an 18-month transition period ending November 25, 2021.2022.

On July 1, 2016, amendments to the NGER Act implemented the Emissions Reduction Fund Safeguard Mechanism. From that date, large designated facilities such as coal mines were issued with a baseline for their covered emissions and must take steps to keep their emissions at or below the baseline or face penalties.

The National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 outlines key elements of a responsible emitter’s duty to avoid an excess emissions situation and provides detail on how it can meet that requirement. The ruleRule was amended in Marchbetween 2019 withand 2021 to transition responsible emitters to new baseline setting arrangements. From the effect that all current reported covered emissionsstart of the 2020-21 compliance year, baselines will expire on June 30, 2020,must use prescribed production variables (an example being run of mine coal) and there will be alternatives for setting new baselines, including by reference to default emissions intensity values.values (being values set by the Government to represent the industry average emissions intensity of production over five years) unless specific exemptions apply (such as a facility having site-specific values set).

The DPIE considered the recommendations in the Panel’s final report and in April 2020 announced that it had accepted all 50 recommendations in the Panel’s report, and that it has established an interagency taskforce to implement a detailed action plan during 2020. The action plan includes: ensuring there is a net gain for the metropolitan water supply by requiring more offsetting from mining companies; establishing a new independent expert panel to advise on future mining applications in the catchment; strengthening surface and groundwater monitoring; improving access to and transparency of environmental data; adopting a more stringent approach to the assessment and conditioning of future mining proposals to minimize subsidence impacts; reviewing and updating current and potential future water losses from mining in line with the best available science; introducing a licensing regime to properly account for any water losses; and undertaking further research into mine closure planning to reduce potential long-term impacts.

Global climate issues continue to attract public and scientific attention. Numerous reports, such as the Fourth and the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues. In turn, increasing government attention is being paid to global climate issues and to GHG emissions, including emissions of carbon dioxide from coal combustion by power plants. There have been significant developments in federal and state legislation and regulation and international accords regarding climate change. Such developments are described below in the section “Regulations Related to Global Climate Change” within this Item 1.

At the same time, a number of states in the U.S. have adopted programs to regulate greenhouse gas emissions. For example, 10 northeastern states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont) entered into the Regional Greenhouse Gas Initiative (RGGI) in 2005, whichand Pennsylvania is expected to join in 2022. RGGI is a mandatory cap-and-trade program to cap regional carbon dioxide emissions from power plants. In 2011, New Jersey announced its withdrawal from RGGI effective January 1, 2012. Six mid-western states (Illinois, Iowa, Kansas, Michigan, Minnesota and Wisconsin) and one Canadian province have entered into the Midwestern Regional Greenhouse Gas Reduction Accord (MGGRA) to establish voluntary regional greenhouse gas reduction targets and develop a voluntary multi-sector cap-and-trade system to help meet the targets. It has been reported that, while the MGGRA has not been formally suspended, the participating states are no longer pursuing it. Seven western states (Arizona, California, Montana, New Mexico, Oregon, Utah and Washington) and four Canadian provinces entered into the Western Climate Initiative (WCI) in 2008 to establish a voluntary regional greenhouse gas reduction goal and develop market-based strategies to achieve emissions reductions. However, in November 2011, the WCI announced that six states had withdrawn from the WCI, leaving California and four Canadian provinces as the remaining members. Of those five jurisdictions, only California and Quebec have adopted greenhouse gas cap-and-trade regulations to date and both programs have begun operating. Many of the states and provinces that left WCI, RGGI and MGGRA, along with many that continue to participate, have joined the new North America 2050 initiative, which seeks to reduce greenhouse gas emissions and create economic opportunities in ways not limited to cap-and-trade programs.

Several other U.S. states have enacted legislation establishing greenhouse gas emissions reduction goals or requirements. In addition, several states have enacted legislation or have in effect regulations requiring electricity suppliers to use renewable energy sources to generate a certain percentage of power or that provide financial incentives to electricity suppliers for using renewable energy sources. Some states have initiated public utility proceedings that may establish values for carbon emissions.

Increasingly, both foreign and domestic banks, insurance companies and large investors are curtailing or ending their financial relationships with fossil fuel-related companies. This has had adverse impacts on the liquidity and operations of coal producers.

Peabody participated in the Department of Energy’s Voluntary Reporting of Greenhouse Gases Program until its suspension in May 2011, and wethe Company regularly disclosediscloses information regarding its production-related emissions in ourits annual Environmental, Social and Governance Report the quantity of emissions per ton of coal produced by us in the U.S.Report. The vast majority of ourthe Company’s emissions are generated by the operation of heavy machinery to extract and transport material at ourits mines and fugitive emissions from the extraction of coal.

The Kyoto Protocol, adopted in December 1997 by the signatories to the 1992 United Nations Framework Convention on Climate Change (UNFCCC), established a binding set of greenhouse gas emission targets for developed nations. The U.S. signed the Kyoto Protocol but it has never been ratified by the U.S. Senate. Australia ratified the Kyoto Protocol in December 2007 and became a full member in March 2008. There were discussions to develop a treaty to replace the Kyoto Protocol after the expiration of its commitment period in 2012, including at the UNFCCC conferences in Cancun (2010), Durban (2011), Doha (2012) and Paris (2015). At the Durban conference, an ad hoc working group was established to develop a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC, applicable to all parties. At the Doha meeting, an amendment to the Kyoto Protocol was adopted, which included new commitments for certain parties in a second commitment period, from 2013 to 2020. In December 2012, Australia signed on to the second commitment period. During the UNFCCC conference in Paris, France in late 2015, an agreement was adopted calling for voluntary emissions reductions contributions after the second commitment period ends in 2020 (the Paris Agreement). The agreement was entered into force on November 4, 2016 after ratification and execution by more than 55 countries, including Australia, that account for at least 55% of global greenhouse gas emissions. On January 20, 2021, the U.S. reentered the Paris Agreement by accepting the agreement and all of its articles and clauses, after having announced its withdrawal from the agreement in November 2019.

In October 2017, the Australian Federal Government released a plan aimed at delivering an affordable and reliable energy system that meets Australia’s international commitments to emissions reduction. The plan was referred to as the National Energy Guarantee (NEG) and was aimed at changing the National Electricity Market and associated legislative framework. The NEG was abandoned by the Australian government in September 2018. Following the outcome of the federal election in May 2019, the federal government confirmed it will not revive the former NEG policy. Instead, the government will pursue a new energy and climate change policy, which includes a $2 billion Australian dollars investment in projects to bring down Australia's greenhouse gas emissions. The Climate Solutions Fund is an extension of the former Emissions Reduction Fund. The government has confirmed that it remains committed to meeting Australia’s Paris Agreement targets but that the focus of energy policy will be on driving down electricity prices.

We filePeabody files or furnishfurnishes annual, quarterly and current reports (including any exhibits or amendments to those reports), proxy statements and other information with the SEC. These materials are available free of charge through ourthe Company’s website (www.peabodyenergy.com) as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information included on ourthe Company’s website does not constitute part of this document. These materials may also be accessed through the SEC’s website (www.sec.gov).

In addition, copies of ourthe Company’s filings will be made available, free of charge, upon request by telephone at (314) 342-7900 or by mail at: Peabody Energy Corporation, Peabody Plaza, 701 Market Street, St. Louis, Missouri 63101-1826, attention: Investor Relations.

We operateThe Company operates in a rapidly changing environment that involves a number of risks. The following discussion highlights some of these risks and others are discussed elsewhere in this report. These and other risks could materially and adversely affect ourthe Company’s business, financial condition, prospects, operating results or cash flows. The following risk factors are not an exhaustive list of the risks associated with ourthe Company’s business. New factors may emerge or changes to these risks could occur that could materially affect ourits business.

We operateThe Company operates in a competitive and highly regulated industry that has at times experienced strong headwinds. DepressedCurrent pricing levels of both seaborne and domestic coal prices have reduced our revenues, and sustained prices at current levels or further declinesproducts may not be sustainable in the future. Declines in coal prices willcould materially and adversely affect ourthe Company’s operating results and financial condition. Further declines in coal prices will adversely affectprofitability and the value of ourits coal reserves.reserves and resources.

Thermal coal accounted for the majority of ourthe Company’s coal sales by volume during 2021 and 2020, and 2019. Thewith the vast majority of ourthese sales of thermal coal were to electric power generators. The demand for coal consumed for electric power generation is affected by many of the factors described above, but primarily by (i) the overall demand for electricity; (ii) the availability, quality and price of competing fuels, such as natural gas, nuclear fuel, oil and alternative energy sources; (iii) utilization of all electricity generating units (whether using coal or not), including the relative cost of producing electricity from multiple fuels, including coal; (iv) stringent environmental and other governmental regulations; (v) other sociopolitical views on coal; and (v)(vi) the coal inventories of utilities. Gas-fueled generation has displaced and is expected tocould continue to displace coal-fueled generation (particularly from older, less efficient coal-fueled generation units) as current and potentially increasing regulatory costs and other factors impact the operating decisions of electric power generators. In addition, some electric power generators have made decisions to close coal-fueled generation units given ongoing pressure to shift away from coal generation. Many of the new power plants in the U.S. may be fueled by natural gas because gas-fired plants have been less expensive to construct, permits to construct these plants are easier to obtain based on emissions profiles and electric power generators may face public and governmental pressure to generate a larger portion of their electricity from natural gas-fueled units and alternative energy sources. Increasingly stringent regulations along with stagnant electricity demand in recent years have also reduced the number of new power plants being built. TheseIn recent years, these trends have reduced demand for ourthe Company’s coal and the related prices. Any further reduction in the amount ofLower demand for coal consumed by electric power generators could reduce the volume and price of thermal coal that we minethe Company sells and sell.the prices that it receives for the thermal coal, thereby reducing its revenues and adversely impacting its earnings and the value of its coal reserves and resources.

We produceThe Company produces metallurgical coal that is used in the global steel industry. Metallurgical coal accounted for approximately 22% and 17% and 22% of ourits revenues in 20202021 and 2019,2020, respectively. Changes in governmental policies and regulations and changes in the steel industry, including the demand for steel, could reduce the demand for ourthe Company’s metallurgical coal. Lower demand for metallurgical coal in international markets could reduce the amount of metallurgical coal that we sellthe Company sells and the prices that we receiveit receives for it,the metallurgical coal, thereby reducing ourits revenues and adversely impacting ourits earnings and the value of ourits coal reserves.reserves and resources.

The balance between coal demand and supply, factoring in demand and supply of closely related and competing segments such as natural gas,fuel sources, both domestically and internationally, could materially reduce coal prices and therefore materially reduce ourthe Company’s revenues and profitability. We competeThe Company competes with other fuel sources used for electricity generation, such as natural gas and renewables. OurThe Company’s seaborne products compete with other producers as well as other fuel sources. Declines in the price of natural gas could cause demand for coal to decrease and adversely affect the price of coal. Sustained periods of low natural gas prices or low prices for other fuels may also cause utilities to phase out or close existing coal-fueled power plants or reduce construction of new coal-fueled power plants. In the U.S., no new coal-fueled power plants are being constructed or reopened after closure. These closures could have a material adverse effect on demand and prices for ourthe Company’s coal, thereby reducing ourits revenues and materially and adversely affecting ourits business and results of operations.

Most of ourthe Company’s sales are made under coal supply agreements, which are important to the stability and profitability of ourits operations. The execution of a satisfactory coal supply agreement is frequently the basis on which we undertakethe Company undertakes the development of coal reserves and resources required to be supplied under the contract, particularly in the U.S. For the year ended December 31, 2020, we2021, the Company derived 32%26% of ourits revenues from coal supply agreements from ourits five largest customers. Those five customers were supplied primarily from 2817 coal supply agreements (excluding trading and brokerage transactions) expiring at various times from 20212022 to 2026.

Many of ourthe Company’s coal supply agreements contain provisions that permit the parties to adjust the contract price upward or downward at specified times. WeThe Company may adjust these contract prices based on inflation or deflation, price indices and/or changes in the factors affecting the cost of producing coal, such as taxes, fees, royalties and changes in the laws regulating the mining, production, sale or use of coal. In a limited number of contracts, failure of the parties to agree on a price under those provisions may allow either party to terminate the contract. WeThe Company may experience reductions in coal prices in new long-term coal supply agreements replacing some of ourits expiring contracts. Coal supply agreements also typically contain force majeure provisions allowing temporary suspension of performance by usthe Company or the customer during the duration of specified events beyond the control of the affected party. Some coal supply agreements allow customers to vary the volumes of coal that they are required to purchase during a particular period, and where coal supply agreements do not explicitly allow such variation, customers sometimes request that wethe Company amend the agreements to allow for such variation. Most of ourits coal supply agreements contain provisions requiring usthe Company to deliver coal meeting quality thresholds for certain characteristics such as Btu, sulfur content, ash content, volatile matter, coking properties, grindability and ash fusion temperature. Failure to meet these specifications could result in economic penalties, including price adjustments, the rejection of deliveries or termination of the contracts. Moreover, some of these agreements allow ourthe Company’s customers to terminate their contracts in the event of changes in regulations affecting ourthe coal industry that restrict the use or type of coal permissible at the customer’s plant or increase the price of coal beyond specified limits.

On an ongoing basis, we discussthe Company discusses the extension of existing agreements or entering into new long-term agreements with various customers, but these negotiations may not be successful and these customers may not continue to purchase coal from usthe Company under long-term supply agreements.

The operating profits we realizethe Company realizes from coal sold under supply agreements depend on a variety of factors. In addition, price adjustment and other contract provisions may increase ourits exposure to short-term coal price volatility. If a substantial portion of ourthe Company’s coal supply agreements were modified or terminated, weit could be materially adversely affected to the extent that we areit is unable to find alternate buyers for ourits coal at the same level of profitability. Prices for coal vary by mining region and country. As a result, wethe Company cannot predict the future strength of the coal industry overall or by mining region and cannot provide assurance that weit will be able to replace existing long-term coal supply agreements at the same prices or with similar profit margins when they expire. In addition, ourthe Company’s revenue could be adversely affected by a decline in customer purchases (including contractually obligated purchases) due to lack of demand and oversupply, cost of competing fuels and environmental and other governmental regulations.

We maintainThe Company maintains insurance policies that provide limited coverage for some of the risks referenced above, which may lessen the impact associated with these risks. However, there can be no assurance as to the amount or timing of recovery under ourits insurance policies in connection with losses associated with these risks.

We haveThe Company has substantial take-or-pay arrangements with its port access and rail transportation providers, predominately in Australia, totaling $1.2 billion, with terms ranging up to 2221 years, that commit usthe Company to pay a minimum amount for rail and port commitments for the delivery of coal even if those commitments go unused. The take-or-pay provisions in these contracts sometimes allow usthe Company to apply amounts paid for subsequent deliveries, but these provisions have limitations and wethe Company may not be able to apply all such amounts so paid in all cases. Also, wethe Company may not be able to utilize the amount of capacity for which we haveit has previously paid. Additionally, wethe Company may continue to deliver coal during times when it might otherwise be optimal to suspend operations because these take-or-pay provisions effectively convert a variable cost of selling coal to a fixed operating cost.

The value of ourthe Company’s assets have from time to time been adversely affected by numerous uncertain factors, some of which are beyond ourits control, including unfavorable changes in the economic environments in which we operate;it operates; declining coal-fired electricity generation; lower-than-expected coal pricing; technical and geological operating difficulties; an inability to economically extract ourits coal reserves;reserves and resources; and unanticipated increases in operating costs. During the yearsyear ended December 31, 2020, and 2019, the Company recorded $1,487.4 million and $270.2 million of impairment charges related to such factors, as further described in Note 3. “Asset Impairment” to the accompanying consolidated financial statements. These factors may trigger the recognition of additional impairment charges in the future, which could have a substantial impact on ourthe Company’s results of operations.

Because of the volatile and cyclical nature of coal markets, it is reasonably possible that ourthe Company’s current estimates of projected future cash flows from ourits mining assets may change in the near term, which may result in the need for adjustments to the carrying value of ourits assets.

U.S. federal and state laws and Australian laws require usthe Company to provide financial assurances related to requirements to reclaim lands used for mining,mining; to pay federal and state workers’ compensation, such as black lung liabilities; to provide financial assurances for coal lease obligationsobligations; and to satisfy other miscellaneous obligations. The primary methods we usethe Company uses to meet those obligations are to provide a third-party surety bond or provide a letter of credit. As of December 31, 2020, we2021, the Company had $1,633.6$1,463.7 million of outstanding surety bonds and $437.6$452.6 million of letters of credit with third parties in order to provide required financial assurances for post-mining reclamation, workers’ compensation and other insurance obligations, coal lease-related and other obligations and performance guarantees.guarantees, in addition to collateral for sureties.

As further described in “Liquidity and Capital Resources” of Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in November 2020, the Company reachedentered into a surety transaction support agreement with the providers of 99% of its surety bond portfolio to resolve approximately $800 million in additional collateral demands made by the sureties.portfolio. The sureties have agreed to a standstill through December 31, 2024, during which time, the sureties will not demand any additional collateral, draw on letters of credit posted for the benefit of themselves, or cancel any existing surety bond. OurCompany’s failure to provide adequate collateral, or abide by other terms in the agreement, could invalidate the agreement and materially and adversely affect ourits business and results of operations.

OurThe Company’s failure to maintain adequate bonding would invalidate ourits mining permits and prevent mining operations from continuing, which could result in ourits inability to continue as a going concern.

Regulatory agencies have the authority under certain circumstances following significant health and safety incidents to order a mine to be temporarily or permanently closed. In the event that such agencies ordered the closing of one of ourthe Company’s mines, ourits production and sale of coal would be disrupted and weit may be required to incur cash outlays to re-open the mine. Any of these actions could have a material adverse effect on ourthe Company’s financial condition, results of operations and cash flows.

New legislation, regulations or orders related to the environment or employee health and safety may be adopted and may materially adversely affect ourthe Company’s mining operations, ourits cost structure or ourits customers’ ability to use coal. New legislation or administrative regulations (or new interpretations by the relevant government of existing laws, regulations and approvals), including proposals related to the protection of the environment or the reduction of greenhouse gas emissions that would further regulate and tax the coal industry, may also require usthe Company or ourits customers to change operations significantly or incur increased costs. Some of ourthe Company’s coal supply agreements contain provisions that allow a purchaser to terminate its contract if legislation is passed that either restricts the use or type of coal permissible at the purchaser’s plant or results in specified increases in the cost of coal or its use. These factors and legislation, if enacted, could have a material adverse effect on ourthe Company’s financial condition and results of operations.

OurThe Company’s operations currently use hazardous materials and generate limited quantities of hazardous wastes from time to time. A number of laws, including CERCLA and RCRA in the U.S., CERCLA and RCRA,similar laws in other countries where the Company operates, impose liability relating to contamination by hazardous substances. Such liability may involve the costs of investigating or remediating contamination and damages to natural resources, as well as claims seeking to recover for property damage or personal injury caused by hazardous substances. Such liability may arise from conditions at formerly, as well as currently, owned or operated properties, and at properties to which hazardous substances have been sent for treatment, disposal or other handling. Liability under RCRA, CERCLA and similar state statutes is without regard to fault, and typically is joint and several, meaning that a person may be held responsible for more than its share, or even all, of the liability involved.

Numerous governmental and tribal permits and approvals are required for mining operations. The permitting rules, and the interpretations of these rules, are complex, change frequently and are often subject to discretionary interpretations by regulators, all of which may make compliance more difficult or impractical. As part of this permitting process, when we applythe Company applies for permits and approvals, we areit is required to prepare and present to governmental authorities data pertaining to the potential impact or effect that any proposed exploration for or production of coal may have upon the environment. The public, including non-governmental organizations, opposition groups and individuals, have statutory rights to comment upon and submit objections to requested permits and approvals (including modifications and renewals of certain permits and approvals) and otherwise engage in the permitting process, including bringing citizens’ lawsuits to challenge the issuance of permits, the validity of environmental impact statements or the performance of mining activities. In recent years, the permitting required for coal mining has been the subject of increasingly stringent regulatory and administrative requirements and extensive litigation by environmental groups.

Additionally, ourthe Company’s operations may be affected by sites within or near mining areas deemed tothat have cultural heritage significance to indigenous peoples, and ourits mining permits may be rescinded or modified, or ourits mining plans may be voluntarily adjusted, to mitigate against adverse impacts to such sites.

The costs, liabilities and requirements associated with these permitting requirements and any related opposition may be extensive and time-consuming and may delay commencement or continuation of exploration or production which would adversely affect ourthe Company’s coal production, cash flows and profitability. Further, required permits may not be issued or renewed in a timely fashion or at all, or permits issued or renewed may be conditioned in a manner that may restrict ourthe Company’s ability to efficiently and economically conduct ourits mining activities, any of which would materially reduce ourits production, cash flows and profitability.

Global climate issues continue to attract public and scientific attention. Numerous reports, such asincluding the Fourth and the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have also engendered concern about the impacts of human activity, especially fossil fuel combustion, on global climate issues. In turn, increasing government attention is being paid to global climate issues and to emissions of greenhouse gases, including emissions of carbon dioxide from coal combustion by power plants.

From time to time, wethe Company’s board of directors and management attempt to analyze the potential impact on the Company of as-yet-unadopted, potential laws, regulations and policies. Such analyses require that we make significant assumptions as to the specific provisions of such potential laws, regulations and policies which sometimes show that if implemented in the manner assumed by the analyses, the potential laws, regulations and policies could result in material adverse impacts on ourthe Company’s operations, financial condition or cash flows. We do not believe that suchSuch analyses cannot be relied upon to reasonably predict the quantitative impact that future laws, regulations or other policies may have on ourthe Company’s results of operations, financial condition or cash flows.

Several non-governmental organizations have undertaken campaigns to minimize or eliminate the use of coal as a source of electricity generation in the U.S. and across the globe. In an effort to stop or delay coal mining activities, activist groups have brought lawsuits challenging the issuance of individual coal leases, and challenging the federal coal leasing program more broadly. Other lawsuits challenge historical and pending regulatory approvals, permits and processes that are necessary to conduct coal mining operations or to operate coal-fueled power plants, including so-called “sue and settle” lawsuits where regulatory authorities in the past have reached private agreements with environmental activists that often involve additional regulatory restrictions or processes being implemented without formal rulemaking.

The effect of these and other similar developments has made it more costly and difficult to maintain ourthe Company’s business. These cost increases and/or substantial or extended declines in the prices we receivethe Company receives for ourits coal due to these or other factors could reduce ourits revenue and profitability, cash flows, liquidity, and value of ourits coal reserves and resources, and could result in material losses.

In addition to coal price volatility, we arethe Company is currently subject to price volatility on diesel fuel utilized in ourits mining operations and the Australian dollar. WeThe Company may in the future enter into hedging arrangements, including economic hedging arrangements, to manage these risks or other exposures.

Some of these hedging instrumentsarrangements may require usthe Company to post margin based on the value of thosethe related instruments and other credit factors. If the fair value of ourits hedge portfolio moves significantly, or if laws, regulations or regulationsexchange rules are passed requiring all hedge arrangements to be exchange-traded or exchange-cleared, wethe Company could be required to post additional margin, which could negatively impact ourits liquidity.

OurThe 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 federal and state reclamation laws in the U.S. and Australia as defined by each mining permit. These 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, which is driven by the estimated economic life of the mine and the applicable reclamation laws. These cash flows are discounted using a credit-adjusted, risk-free rate. OurThe Company’s management and engineers periodically review these estimates. If ourits assumptions do not materialize as expected, actual cash expenditures and costs that we incurthe Company incurs could be materially different than currently estimated. Moreover, regulatory changes could increase ourthe Company’s obligation to perform reclamation, mine closing and post-closure activities. The resulting estimated asset retirement obligation could change significantly if actual amounts change significantly from ourits assumptions, which could have a material adverse effect on ourits results of operations and financial condition.

OurThe Company’s recoverable reserves and resources decline as we produceit produces coal. We haveThe Company has not yet applied for the permits required or developed the mines necessary to use all of our reserves.its reserves and resources. Moreover, the amount of provencoal reserves and probable coal reservesresources described in Part I, Item 2. “Properties” involves the use of certain estimates and those estimates could be inaccurate. Actual production, revenues and expenditures with respect to ourits coal reserves and resources may vary materially from estimates.

The Company’s future success depends upon ourit conducting successful exploration and development activities or acquiring properties containing economically recoverable reserves. Ourreserves and resources. The Company’s current strategy includes increasing ourits reserves and resources through acquisitions of government and other leases and producing properties and continuing to use ourits existing properties and infrastructure. In certain locations, leases for oil, natural gas and coalbed methane reserves are located on, or adjacent to, some of ourthe Company’s reserves and resources, potentially creating conflicting interests between usit and lessees of those interests. Other lessees’ rights relating to these mineral interests could prevent, delay or increase the cost of developing ourthe Company’s coal reserves.reserves and resources. These lessees may also seek damages from usthe Company based on claims that ourits coal mining operations impair their interests. Additionally, the U.S. federal government limits the amount of federal land that may be leased by any company to 75,000 acres in any one state and 150,000 acres nationwide. As of December 31, 2020, we2021, the Company leased a total of 44,64544,287 acres from the federal government subject to those limitations.

OurThe Company’s planned mine development projects and acquisition activities may not result in significant additional reserves and weresources, and it may not have success developing additional mines. Most of ourits mining operations are conducted on properties owned or leased by us. Ourthe Company. Its right to mine some of ourits reserves and resources may be materially adversely affected if defects in title or boundaries exist. In order to conduct ourits mining operations on properties where these defects exist, wethe Company may incur unanticipated costs. In addition, in order to develop ourits reserves weand resources, the Company must also own the rights to the related surface property and receive various governmental permits. WeThe Company cannot predict whether weit will continue to receive the permits or appropriate land access necessary for usit to operate profitably in the future. WeThe Company may not be able to negotiate or secure new leases from the government or from private parties, obtain mining contracts for properties containing additional reserves and resources or maintain ourits leasehold interest in properties on which mining operations have not commenced or have not met minimum quantity or product royalty requirements. From time to time, we havethe Company has experienced litigation with lessors of ourits coal properties and with royalty holders. In addition, from time to time, ourits permit applications and federal and state coal leases have been challenged, causing production delays.

To the extent that ourthe Company’s existing sources of liquidity are not sufficient to fund ourits planned mine development projects or reserve and reserveresource acquisition activities, weit may require access to capital markets, which may not be available to usit or, if available, may not be available on satisfactory terms. If we arethe Company is unable to fund these activities, weit may not be able to maintain or increase ourits existing production rates and we could be forced to change ourits business strategy, which could have a material adverse effect on ourits financial condition, results of operations and cash flows.

The conversion of reported mineral resources to mineral reserves should not be assumed, and the reclassification of reported mineral resources from lower to higher levels of geological confidence should not be assumed. As a result,such, actual coal tonnage recovered from identified reserve and resource areas or properties and revenues and expenditures with respect to ourthe Company’s reserves and resources may vary materially from estimates. Thus, these estimates may not accurately reflect ourits actual reserves.reserves and resources. Any material inaccuracy in ourthe Company’s estimates related to ourits reserves and resources could result in lower than expected revenues, higher than expected costs or decreased profitability which could materially and adversely affect ourits business, results of operations, financial position and cash flows. Additionally, our reserve estimates may be adversely affected in the future by the SEC’s recent rule amendments revising property disclosure requirements for publicly-traded mining companies. We will be required to comply with these new rules in 2021.

We participateThe Company participates in several joint venture and partnership arrangements and may enter into others, all of which necessarily involve risk. Whether or not we holdthe Company holds majority interests or maintainmaintains operational control in ourits joint ventures, ourits partners may, among other things, (1) have economic or business interests or goals that are inconsistent with, or opposed to, ours;the Company’s; (2) seek to block actions that we believethe Company believes are in ourits or the joint venture’s best interests; or (3) be unable or unwilling to fulfill their obligations under the joint venture or other agreements, such as contributing capital, each of which may adversely impact ourthe Company’s results of operations and ourits liquidity or impair ourits ability to recover ourits investments.

Where ourthe Company’s joint ventures are jointly controlled or not managed by us, weit, the Company may provide expertise and advice but have limited control over compliance with ourits operational standards. WeThe Company also utilizeutilizes contractors across ourits mining platform, and may be similarly limited in ourits ability to control their operational practices. Failure by non-controlled joint venture partners or contractors to adhere to operational standards that are equivalent to oursthe Company’s could unfavorably affect safety results, operating costs and productivity and adversely impact ourits results of operations and reputation.

OurThe Company’s operations are susceptible to widespread outbreaks of illness or other public health issues, such as the continuing global COVID-19 pandemic. The COVID-19 pandemicPandemic illnesses could have a material adverse effect on ourthe Company’s business, results of operations, financial condition and prospects, including ourits ability to comply with covenants under ourits debt agreements.

Governmental mandates and ourthe Company’s efforts to act in the best interests of ourits employees, customers, suppliers, vendors and joint venture and other business partners, have affected and are continuing tocould affect ourits business and operations, causing usthe Company to modify a number of ourits normal business practices. Additional governmentalGovernmental mandates could require forced shutdowns of ourits mines and other facilities for extended or indefinite periods and widespread outbreaks in locations significant to ourits operations could adversely affect ourits workforce, resulting in serious health issues and absenteeism. In addition, the COVID-19 pandemic mayillnesses could cause supply chains and distribution channels to be interrupted, slowed or rendered inoperable. If ourthe Company’s operations arewere curtailed, weit may need to seek alternate sources of supply for commodities, services and labor, which may be more expensive. Alternate sources may not be available or may result in delays in shipments to ourits customers. Further, if ourthe Company’s customers’ businesses arewere similarly affected, they might delay, reduce or cancel purchases from us.the Company. Adverse changes in the general domestic and global economic conditions and disrupted domestic and international credit markets, could negatively affect ourits customers’ ability to pay usthe Company as well as ourits ability to access capital that could negatively affect ourits liquidity.

Despite ourits efforts to manage these realized and potential impacts, their ultimate impact would also dependsdepend on factors beyond ourthe Company’s knowledge or control, including the duration and severity of the COVID-19 pandemic as well as third-party actions taken to contain its spread and mitigate its public health effects. While the ultimate impacts of the COVID-19 pandemic on our business are unknown, we expect continued interference with general commercial activity, which may further negatively affect both demand and prices for our products. WeThe Company could also face disruption to supply chain and distribution channels, potentially increasing costs of production, storage and distribution, and potential adverse effects to ourits workforce, each of which could have a material adverse effect on ourits business, financial condition, results of operations and prospects.

We payThe Company pays postretirement health and life insurance benefits to eligible retirees. OurIts total accumulated postretirement benefit obligation related to such benefits was a liability of $442.9$232.6 million as of December 31, 2020,2021, of which $29.7$20.5 million was classified as a current liability.

These liabilities are actuarially determined. We useThe Company uses various actuarial assumptions, including the discount rate, future cost trends, mortality tables and rates of return on plan assets to estimate the costs and obligations for these items. OurIts discount rate is determined by utilizing a hypothetical bond portfolio model which approximates the future cash flows necessary to service ourits liabilities. A decrease in the discount rate used to determine ourits postretirement benefit and defined benefit pension obligations could result in an increase in the valuation of these obligations, thereby increasing the cost in subsequent fiscal years. We haveThe Company has made assumptions related to future trends for medical care costs in the estimates of retiree health care obligations. OurIts medical trend assumption is developed by annually examining the historical trend of ourits cost per claim data. If ourthe Company’s assumptions do not materialize as expected, actual cash expenditures and costs that we incurit incurs could differ materially from ourits current estimates. Moreover, regulatory changes or changes in healthcare benefits provided by the government could increase ourits obligation to satisfy these or additional obligations. We develop ourThe Company develops its actuarial determinations of liabilities using actuarial mortality tables we believeit believes best fit ourits population’s actual results. In deciding which mortality tables to use, wethe Company periodically review ourreviews its population’s actual mortality experience and evaluateevaluates results against ourits current assumptions as well as consider recent mortality tables published by the Society of Actuaries Retirement Plans Experience Committee in order to select mortality tables for use in ourits year end valuations. If ourthe Company’s mortality tables do not anticipate ourits population’s mortality experience as accurately as expected, actual cash expenditures and costs that we incurthe Company incurs could differ materially from ourits current estimates. Additionally, ourthe Company’s reported defined benefit pension funding status may be affected, and weit may be required to increase employer contributions, due to increases in ourits defined benefit pension obligation or poor financial performance in asset markets in future years.

If ourthe Company’s cash flows and capital resources are insufficient to fund ourits debt service obligations, weit may be forced to sell assets, seek additional capital or seek to restructure or refinance ourits Indebtedness. These alternative measures may not be successful and may not permit usthe Company to meet ourits scheduled debt service obligations. OurIts Indebtedness may restrict the use of the proceeds from any such sales. WeThe Company may not be able to complete those sales and the proceeds may not be adequate to meet any debt service obligations then due.

WeThe Company may be able to incur additional Indebtedness in the future. Although covenants under the indentures governing ourits senior secured notes and the agreements governing ourits other Indebtedness, including ourits credit facility, revolverletter of credit facility, and finance leases, limit ourits ability to incur additional Indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions can be material. In addition, the indenture governing the senior secured notes and the agreements governing ourthe Company’s other Indebtedness do not limit usit from incurring obligations that do not constitute Indebtedness as defined therein.

The indentures governing ourthe Company’s senior secured notes and the agreements governing ourits other Indebtedness and surety bonding obligations contain certain restrictions and covenants which restrict ourits ability to incur liens and/or debt or provide guarantees in respect of obligations of any other person and other restrictions, all of which could adversely affect ourthe Company’s ability to operate ourits business, as well as significantly affect ourits liquidity, and therefore could adversely affect ourits results of operations.

OurThe Company’s ability to comply with these covenants may be affected by events beyond ourits control and wethe Company may need to refinance existing debt in the future. A breach of any of these covenants together with the expiration of any cure period, if applicable, could result in a default under ourits senior secured notes. If any such default occurs, subject to applicable grace periods, the holders of ourits senior secured notes may elect to declare all outstanding senior secured notes, together with accrued interest and other amounts payable thereunder, to be immediately due and payable. If the obligations under ourits senior secured notes were to be accelerated, ourthe Company’s financial resources may be insufficient to repay the notes and any other Indebtedness becoming due in full. The terms of the Company’s Indebtedness provide that if it cannot meet its debt service obligations, the lenders could foreclose against the assets securing their borrowings and the Company could be forced into bankruptcy or liquidation.

In addition, if we breachthe Company breaches the covenants in the indentures governing the senior secured notes and do not cure such breach within the applicable time periods specified therein, wethe Company would cause an event of default under the indenture governing the senior secured notes and a cross-default to certain of ourits other Indebtedness and the lenders or holders thereunder could accelerate their obligations. If ourthe Company’s Indebtedness is accelerated, weit may not be able to repay ourits Indebtedness or borrow sufficient funds to refinance it. Even if we arethe Company is able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us.the Company. If ourthe Company’s Indebtedness is in default for any reason, ourits business, financial condition and results of operations could be materially and adversely affected. In addition, complying with these covenants may make it more difficult for usthe Company to successfully execute ourits business strategy and compete against companies who are not subject to such restrictions.

As a result of all of these factors, investors in ourPeabody’s Common Stock may not be able to resell their stock at or above the price they paid or at all. In the recent past, ourPeabody’s closing stock price has fallen below $1.00 per share for a limited number of trading days. If ourPeabody’s stock were to trade below $1.00 per share for 30 consecutive trading days, NYSE could commence suspension and delisting procedures. Further, wePeabody could be the subject of securities class action litigation due to any such stock price volatility, which could divert management’s attention and have a material adverse effect on ourits results of operation.

OurPeabody’s Common Stock is subject to dilution from ourits long-term incentive plan. In addition, in the future, wePeabody may issuecontinue issuing equity securities in connection with future investments, acquisitions, debt-for-equity exchanges or capital raising transactions. Such issuances or grants could constitute a significant portion of the then-outstanding Common Stock, which may result in significant dilution in ownership of Common Stock.

Circumstances may arise in which the interests of a significant stockholder may be in conflict with the interests of ourthe Company’s other stakeholders. A significant stockholder may exert substantial influence over usthe Company to cause usthe Company to take action that aligns with their interests, for example, to pursue or prevent acquisitions, divestitures or other transactions, including the issuance or repurchase of additional shares or debt, that, in its judgment, could enhance its investment in usPeabody or another company in which it invests. Such transactions may advance the interests of the significant stockholder and not necessarily those of other stakeholders, which might adversely affect usPeabody or other holders of ourits Common Stock or debt instruments.