Peabody Energy Comm (BTU) Risk Analysis

Mining operations require numerous governmental permits and approvals. The permitting rules (and the interpretations of these rules) are complex, frequently changing and often subject to discretionary interpretations by regulators, making compliance more difficult or impractical at times. As part of the permitting process, the Company is required to prepare and present to governmental authorities detailed information on the potential impacts of proposed exploration or mining activities. Members of the public, including non-governmental organizations and opposition groups, have statutory rights to comment upon, object to or legally challenge permit applications, environmental impact statements or 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, the Company's operations may be affected by sites of cultural heritage significance to indigenous peoples located within or near mining areas. Mining permits may be rescinded or modified, or the Company may voluntarily adjust its mining plans, to mitigate against adverse impacts to such sites. The costs, liabilities and potential delays associated with permitting requirements and any related opposition may be substantial and could postpone or disrupt exploration or production, adversely affecting the 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 may include conditions that restrict the Company's ability to efficiently and economically conduct its mining activities, any of which would materially reduce its production, cash flows and profitability.

The Company uses hazardous materials in its operations and periodically generates limited quantities of hazardous waste. Various laws, including CERCLA and RCRA in the U.S. and similar laws in other countries where the Company operates, impose liability relating to contamination by hazardous substances. Such liability may include 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 currently or formerly owned or operated properties, as well as sites where hazardous substances were 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.

The Company provides postretirement health and life insurance benefits to eligible retirees, and its total accumulated postretirement benefit obligation was a liability of $121.1 million as of December 31, 2025, including $11.9 million classified as a current liability. These obligations are actuarially determined using assumptions regarding discount rates, future cost trends, mortality tables, demographics and expected rates of return on plan assets. The discount rate is based on a hypothetical bond portfolio designed to approximate the timing of future cash flows necessary to service its liabilities. A decrease in the discount rate could increase the present value of these obligations, thereby raising future costs. The Company also makes assumptions about future medical cost trends based on historical claims data. If these assumptions do not materialize as expected, actual cash expenditures and costs that it incurs could differ materially from its current estimates. Regulatory changes or modifications to government-provided healthcare benefits could further increase the Company's obligation. The Company develops its actuarial determinations of liabilities using actuarial mortality tables it believes best fit its population's actual results. In deciding which mortality tables to use, the Company periodically reviews its population's actual mortality experience and evaluates results against its current assumptions as well as consider recent mortality tables published by the Society of Actuaries Retirement Plans Experience Committee. If the Company's mortality tables do not anticipate its population's mortality experience as accurately as expected, actual cash expenditures and costs that the Company incurs could differ materially from its current estimates.

The coal industry is competitive, highly regulated and subject to periods of significant volatility. Declines in coal prices could materially and adversely affect the Company's operating results and profitability and the value of its coal reserves and resources. Coal prices are dependent upon factors beyond the Company's control, including: - demand for electricity and capacity utilization of electricity generating units (whether coal or non-coal);- changes in the fuel consumption and dispatch patterns of electric power generators, whether based on economic or non-economic factors;- competition with, and the availability, quality and price of coal and alternative fuels, including natural gas, fuel oil, nuclear, hydroelectric, wind, biomass and solar power;- governmental regulations and taxes, including air emission or other environmental standards for coal-fueled power plants and renewable-energy mandates or subsidies;- demand for steel, which may lead to price fluctuations in the monthly and quarterly repricing of the Company's metallurgical coal contracts;- competing steel-making technologies that do not use coal as a manufacturing input, such as electric arc furnaces;- the proximity, capacity and cost of transportation and terminal facilities;- global supply levels and production costs of thermal and metallurgical coal;- tariffs, quotas, duties or other adverse changes to trade policy;- global economic conditions, including inflationary pressures and foreign currency exchange rates;- geopolitical developments and conflicts;- weather patterns, severe weather and natural disasters;- regulatory, administrative and judicial decisions, including those affecting future mining permits and leases; and - technological developments related to alternative energy sources, coal-to-liquids or gas conversion processes and CCUS. Thermal coal represented the majority of the Company's coal sales by volume during 2025 and 2024, with most of these sales to electric power generators. The demand for coal used in electricity generation is affected by many of the factors described above, but primarily by (i) overall demand for electricity; (ii) the availability, quality and price of competing fuels; (iii) utilization of all electricity generating units and the relative cost of producing electricity from multiple fuels, including coal; (iv) environmental and other governmental regulations, including those related to permitting; (v) litigation and judicial decisions; (vi) sociopolitical views on coal; and (vii) the coal inventories of utilities. Gas-fueled generation has displaced and could continue to displace coal-fueled generation (particularly at older, less efficient units) as regulatory costs and other factors, such as declines in the price of natural gas, impact the operating decisions of electric power generators. Some electric power generators have elected to close coal-fueled generation units given ongoing pressure to shift away from coal generation. Many new U.S. power plants are being fueled by natural gas because gas-fired plants have been less expensive to construct and operate, are easier to permit based on emissions profiles and face fewer public and governmental objections. Increasingly stringent regulations and stagnant electricity demand in recent years have further reduced the number of new power plants being built. In recent years, these trends have lowered demand for coal consumed by electric power generators and could continue to reduce the volume of thermal coal that the Company sells and the prices that it receives, thereby reducing its revenue and adversely impacting its earnings and the value of its coal reserves and resources. The Company also produces metallurgical coal for the global steel industry, which accounted for approximately 27% and 25% of its revenue in 2025 and 2024, respectively. Changes in governmental policies, regulations and steel industry conditions, including steel demand, could reduce demand for the Company's metallurgical coal. The demand for foreign-produced steel both in international and U.S. markets is influenced in part by tariff rates on steel. Tariffs may affect the Company's customers to the extent their steel imports are curtailed as a result of imposed tariffs. Demand for metallurgical coal is also affected by the cyclical nature of the steel industry, technological developments in the steel-making process and the availability of substitutes for steel, such as aluminum, composites and plastics. The steel industry continues to adopt production methods that do not use coal, such as electric arc furnaces. Lower international demand for metallurgical coal would reduce the volume of metallurgical coal Peabody sells and the prices that it receives, thereby reducing revenues and adversely impacting earnings and the value of its coal reserves. Foreign government policies related to coal production and consumption could also negatively impact pricing and demand for the Company's products.

Peabody increasingly utilizes AI, machine learning, and automated decision-making to improve its processes. Issues arising from the development or use of these technologies, combined with an evolving and uncertain regulatory environment, may lead to increased governmental or regulatory scrutiny, litigation, confidentiality or security risks, reputational harm, liability, or other adverse consequences that could adversely affect the Company's business, results of operations and financial condition. AI and machine-learning technology may also be improperly used by employees without the Company's knowledge. Such misuse could result in unauthorized use or disclosure of confidential or proprietary information, or the generation of content that appears accurate but is in fact incorrect, misleading, biased, or otherwise flawed. These outcomes could harm Peabody's reputation and expose the Company to additional risks. As AI becomes more prominent in the Company's operations, Peabody may need to invest additional resources to enhance digital security, train employees, deploy protective technologies and engage third-party experts. The Company may face challenges in anticipating or mitigating all potential harms associated with AI. It is not possible to predict all risks related to the use of AI, machine-learning and automated decision-making. Changes in regulatory frameworks or stakeholder expectations may limit the Company's ability to develop or use such technologies or subject Peabody to liability. Failure to successfully integrate AI into business processes or to keep pace with rapidly evolving AI technologies, including attracting and retaining talented data scientists, data engineers, and programmers, could place Peabody at a competitive disadvantage.

Political or international conflicts can result in worldwide geopolitical and macroeconomic uncertainty. The Company cannot predict the ultimate impacts related to such conflicts. Prolonged or expanding conflicts could adversely affect macroeconomic conditions, including but not limited to, volatile coal pricing, trade flow disruptions resulting from sanctions, supply chain disruptions, increased costs, and decreased business spending. Furthermore, political or international conflicts could disrupt Peabody's or its business partners' global technology infrastructure, including through cybersecurity attacks or cyber-intrusions; lead to adverse changes in international trade policies and relations; increase regulatory enforcement; impede Peabody's ability to implement and execute its business strategy; heighten terrorist activity risks; amplify exposure to foreign currency fluctuations; and cause constraints, volatility or disruption in capital markets. Any of these developments could have a material adverse effect on the Company's business, results of operations, cash flows and financial condition.