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Other Events | 3 Months Ended
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Mar. 31, 2019
Other Events [Abstract] |
Other Events | Other Events Organizational Realignment From time to time, the Company initiates restructuring activities in connection with its repositioning efforts to appropriately align its cost structure or optimize its coal production relative to prevailing market conditions. Costs associated with restructuring actions can include the impact of early mine closures, voluntary and involuntary workforce reductions, office closures and other related activities. Costs associated with restructuring activities are recognized in the period incurred. Such charges included as “Restructuring charges” in the Company's unaudited condensed consolidated statements of operations amoun ted to $16.5 million and $0.4 million for the three months ended June 30, 2020 and 2019, respectively, and $23.0 million and $0.6 million for the six months ended June 30, 2020 and 2019, respectively, and were associated with both involuntary and voluntary workforce reductions. United Wambo Joint Venture with Glencore In December 2019, after receiving the requisite regulatory and permitting approvals, the Company formed an unincorporated joint venture with Glencore plc (Glencore), in which the Company holds a 50% interest, to combine the existing operations of the Company’s Wambo Open-Cut Mine in Australia with the adjacent coal reserves of Glencore’s United Mine. The Company proportionally consolidates the entity based upon its economic interest. Both parties contributed mining tenements upon formation of the joint venture. Construction and development efforts are currently underway to combine operations. The joint venture agreement specifies that the Company will continue to fully own and operate the existing Wambo Open-Cut Mine through the date that development of the combined operations is completed, which is currently expected to be during the second half of 2020. The parties will then contribute mining equipment and other assets, and joint operations will commence. Glencore is responsible for construction and development activities and will manage the mining operations of the joint venture. PRB Colorado Joint Venture with Arch On June 18, 2019, the Company entered into a definitive implementation agreement (the Implementation Agreement) with Arch, to establish a joint venture that will combine the respective Powder River Basin (PRB) and Colorado operations of Peabody and Arch. Pursuant to the terms of the Implementation Agreement, Peabody will hold a 66.5% economic interest in the joint venture and Arch will hold a 33.5% economic interest. The Company expects to proportionally consolidate the entity based upon its economic interest. Governance of the joint venture will be overseen by the joint venture’s board of managers, which will be comprised of Peabody and Arch representatives with voting powers proportionate with the companies’ economic interests, with the exception of certain specified matters which will require supermajority approval. Peabody will manage the operations of the joint venture, subject to the supervision of the joint venture’s board of managers. As further described in Note 18. “Commitments and Contingencies,” on February 26, 2020, the U.S. Federal Trade Commission (FTC) sought a preliminary injunction to challenge the Company’s proposed joint venture. Peabody and Arch continue to pursue creation of the joint venture and are litigating the FTC’s decision in the U.S. federal court in the Eastern District of Missouri. Related hearings took place July 14, 2020 through July 24, 2020 and closing arguments are scheduled for August 10, 2020, with a ruling expected during the third quarter of 2020. The FTC has also initiated an administrative proceeding on the merits, which is currently scheduled for hearing on October 27, 2020. Formation of the joint venture is subject to favorable resolution of the FTC’s challenge noted above and customary closing conditions, including the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of certain other required regulatory approvals and the absence of injunctions or other legal restraints preventing the formation of the joint venture. In September 2019, the Company amended its Credit Agreement to expressly permit formation of the joint venture and intends to address such formation under the Indenture governing the Senior Notes. At such time as control over the existing operations is exchanged, the Company will account for its interest in the combined operations at fair value. North Goonyella The Company’s North Goonyella Mine in Queensland, Australia experienced a fire in a portion of the mine during September 2018 and mining operations have been suspended since then. During 2018 and 2019, the Company recorded provisions for equipment losses amounting to $149.6 million related to the fire, representing the best estimate of losses to date. Of that amount, $24.7 million was recorded during the six months ended June 30, 2019. No additional provisions for equipment losses were recorded during the three and six months ended June 30, 2020. The Company has also incurred containment and idling costs subsequent to the mine’s suspension which amounted to $11.3 million and $28.4 million during the three months ended June 30, 2020 and 2019, respectively, and $21.4 million and $65.3 million during the six months ended June 30, 2020 and 2019, respectively. In March 2019, the Company entered into an insurance claim settlement agreement with its insurers and various re-insurers under a combined property damage and business interruption policy and recorded a $125 million insurance recovery, the maximum amount available under the policy above a $50 million deductible. The Company has collected the full amount of the recovery. The Company is currently evaluating various alternatives regarding the future utility of the mine. In the event that no future mining occurs at the North Goonyella Mine or the Company is unable to find a commercial alternative, the Company may record additional charges for the remaining carrying value of the North Goonyella Mine of up to approximately $300 million, which is incremental to the at-risk value described in Note 9. “Property, Plant, Equipment and Mine Development.” Incremental exposures above the aforementioned include take-or-pay obligations and other costs associated with idling or closing the mine. Corporate Structure The Company is undertaking a process to explore and evaluate various strategic financing alternatives. In connection with considering various options to enhance its financial flexibility, the Company has made changes to its corporate structure by designating certain of its subsidiaries as unrestricted subsidiaries under the Indenture and the Credit Agreement. The designated subsidiaries consist primarily of the entities through which the Company conducts the operations of its Wilpinjong Mine, which accounted for 74% of the Seaborne Thermal Mining segment’s Adjusted EBITDA for the six months ended June 30, 2020.

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