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Pension and Savings Plans | 12 Months Ended
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Dec. 31, 2024
Pension and Savings Plans [Abstract] |
Pension and Savings Plans | Pension and Savings Plans One of the Company’s subsidiaries, Peabody Investments Corp. (PIC), sponsored a defined benefit pension plan covering certain U.S. salaried employees and eligible hourly employees at certain PIC subsidiaries (the Peabody Plan). As discussed further below, the Peabody Plan was terminated in 2022 with assets distributed in 2023. A subsidiary of PIC has a defined benefit pension plan covering eligible employees who are represented by the United Mine Workers of America (UMWA) under the Kayenta Reclamation Agreement of 2024 (the Western Plan and together with the Peabody Plan, the Pension Plans). Effective May 31, 2008, the Peabody Plan was frozen in its entirety for both participation and benefit accrual purposes. In March 2022, PIC entered into a commitment agreement relating to the Peabody Plan with The Prudential Insurance Company of America (Prudential) and Fiduciary Counselors Inc., as independent fiduciary to the Peabody Plan. Under the commitment agreement, the Peabody Plan purchased a buy-in group annuity contract (GAC) from Prudential for approximately $500 million, which was funded directly by the Peabody Plan’s assets. The benefit obligation was not transferred to Prudential and the Peabody Plan continued to administer and pay the retirement benefits of Peabody Plan participants, but was reimbursed by Prudential for the payment of all benefits covered by the GAC. There was no impact on the monthly retirement benefits paid to Peabody Plan participants and no material impact on contributions for the Peabody Plan in 2022 or 2023 as a result of this transaction. In May 2022, the Board of Directors of PIC approved the termination of the Peabody Plan effective July 31, 2022. In June 2022, the Peabody Plan’s participants were notified of the Peabody Plan termination and PIC filed an application with the Internal Revenue Service to request a determination as to the qualified status under §401(a) of the Internal Revenue Code of 1986 with respect to the amendment and termination of the Peabody Plan. In May 2023, PIC received a favorable determination from the Internal Revenue Service as to the Peabody Plan’s qualified status with respect to its plan termination. In February 2023, as part of the Peabody Plan termination process, PIC announced a program to offer a voluntary lump-sum pension payout to certain active and deferred participants of the Peabody Plan which would fully settle the Peabody Plan’s obligation to them. The program provided participants with a limited-time opportunity to elect to receive a lump-sum settlement of their pension benefit or begin to receive their benefit in the form of a monthly annuity in May 2023. On July 31, 2023, as part of the completion of the standard Employee Retirement Income Security Act plan termination process for the Peabody Plan, the GAC with Prudential was converted from a buy-in group annuity contract to a buy-out group annuity contract, irrevocably transferring the remaining benefit obligation and administration to Prudential. Peabody no longer administers or pays the retirement benefits of Peabody Plan participants. No cash contributions were required to complete the termination process for the Peabody Plan. During the year ended December 31, 2023, the Company settled $443.2 million of its pension obligations for active and deferred participants in the Peabody Plan with an equal amount paid from plan assets. As a result of the termination process, the Company recorded a settlement gain of $2.2 million during the year ended December 31, 2023, which was reflected in “Net periodic benefit credit, excluding service cost” on the consolidated statements of operations. As a result of the Peabody Plan’s over-funded status, $11.1 million was transferred to a Company sponsored employee retirement account (the Qualified Replacement Plan) during December 2023 as part of the distribution of the Peabody Plan assets resulting from the Peabody Plan termination. The Company will use the funds in the Qualified Replacement Plan at least ratably over a seven year period. Net periodic pension cost included the following components:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (Dollars in millions)
Service cost for benefits earned | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.1 |
Interest cost on projected benefit obligation | 6.5 |  |  | 20.1 |  |  | 21.4 |
Expected return on plan assets | (4.9) |  |  | (17.6) |  |  | (23.8) |
Settlement | — |  |  | (2.2) |  |  | — |
Net actuarial loss | 1.9 |  |  | — |  |  | 20.6 |
Net periodic pension cost | $ | 3.6 |  |  | $ | 0.4 |  |  | $ | 18.3 |
The actuarial loss for the Western Plan in 2024 was primarily due to actual returns on plan assets that were lower than expected returns for the year offset by the increase in the discount rate used to measure the benefit obligation. The actuarial loss for all pension plans in 2022 was primarily due to actual returns on plan assets that were lower than expected returns for the year and the premium paid to Prudential to purchase the GAC, offset by the increase in the discount rate used to measure the benefit obligation. The following summarizes the change in benefit obligation, change in plan assets and funded status of the Pension Plans:
| December 31,
| 2024 |  | 2023
| (Dollars in millions)
Change in benefit obligation: |  |  |
Projected benefit obligation at beginning of period | $ | 125.2 |  |  | $ | 580.9 |
Service cost | 0.1 |  |  | 0.1 |
Interest cost | 6.5 |  |  | 20.1 |
Benefits paid | (10.7) |  |  | (36.1) |
Actuarial (gain) loss | (3.5) |  |  | 3.4 |
Settlement | — |  |  | (443.2) |
Projected benefit obligation at end of period | 117.6 |  |  | 125.2 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of period | 116.0 |  |  | 583.3 |
Actual return on plan assets | (0.5) |  |  | 23.1 |
Employer contributions | — |  |  | (11.1) |
Benefits paid | (10.7) |  |  | (36.1) |
Settlement | — |  |  | (443.2) |
Fair value of plan assets at end of period | 104.8 |  |  | 116.0 |
Funded status at end of period | $ | (12.8) |  |  | $ | (9.2) |
Amounts recognized in the consolidated balance sheets: |  |  |
Noncurrent obligation (included in “Other noncurrent liabilities”) | $ | 12.8 |  |  | $ | 9.2 |
The weighted-average assumptions used to determine the benefit obligations as of the end of each year were as follows:
| December 31,
| 2024 |  | 2023
Discount rate | 5.70 | % |  | 5.40 | %
Measurement date | December 31, 2024 |  | December 31, 2023
The weighted-average assumptions used to determine net periodic pension cost (credit) during each period were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Discount rate | 5.40 | % |  | 5.44 | % |  | 2.95 | %
Expected long-term return on plan assets | 4.40 | % |  | 4.85 | % |  | 3.20 | %
Measurement date | December 31, 2023 |  | December 31, 2022 |  | December 31, 2021
The expected rate of return on plan assets is determined by taking into consideration expected long-term returns associated with each major asset class based on long-term historical ranges, inflation assumptions and the expected net value from active management of the assets based on actual results. Effective January 1, 2025, the Company raised its expected rate of return on plan assets from 4.40% to 4.95% for the Western Plan, reflecting the impact of its asset allocations and capital market expectations. As of December 31, 2024 and 2023, the projected benefit obligation and accumulated benefit obligation for the Western Plan was $117.6 million and $125.2 million, respectively, which exceeded the plan assets of $104.8 million and $116.0 million, respectively, for those periods. As of December 31, 2024 and 2023, there were no plan assets, projected benefit obligation or accumulated benefit obligation for the Peabody Plan. Assets of the Pension Plans Prior to December 31, 2023, assets of the PIC Master Trust (the Master Trust) were invested in accordance with investment guidelines established by the Peabody Plan Retirement Committee and the Peabody Western Plan Retirement Committee (collectively, the Retirement Committees) after consultation with outside investment advisors and actuaries. As of January 1, 2024, assets of the Master Trust are invested in accordance with investment guidelines established by the Western Plan Retirement Committee after consultation with outside investment advisors and actuaries. The asset allocation targets have been set with the expectation that the assets of the Master Trust will be managed with an appropriate level of risk to fund each Pension Plan’s expected liabilities. To determine the appropriate target asset allocations, the Retirement Committees consider the demographics of each Pension Plan’s participants, the funded status of each Pension Plan, the business and financial profile of the Company and other associated risk preferences. These allocation targets are reviewed by the Retirement Committees on a regular basis and revised as necessary. As a result of discretionary contributions made in recent years, the Western Plan has become nearly fully funded and therefore, as of December 31, 2024 and 2023, the Master Trust investment portfolio reflected the Company’s target asset mix of 100% fixed income investments. Prior to December 31, 2023, the assets of the Master Trust also included investments of the Peabody Plan as well as various real estate holdings through limited partnerships. The Peabody Plan assets were distributed and all real estate holdings were liquidated as of December 31, 2023. Assets of the Master Trust are under management by third-party investment managers, which are selected and monitored by the Retirement Committees. Specific investment guidelines have been established by the Retirement Committees for each major asset class including performance benchmarks, allowable and prohibited investment types and concentration limits. In general, investment guidelines do not permit leveraging the assets held in the Master Trust. However, investment managers may employ various strategies and derivative instruments in establishing overall portfolio characteristics consistent with the guidelines and investment objectives established by the Retirement Committees for their portfolios. Fixed income investment guidelines only allow for exchange-traded derivatives if the investment manager deems the derivative vehicle to be more attractive than a similar direct investment in an underlying cash market or to manage the duration of the fixed income portfolio. A financial instrument’s level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation techniques and inputs used for investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy. Corporate bonds. The Master Trust invests in corporate bonds for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly investment-grade corporate bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. Corporate bonds are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the bonds are not traded on a national securities exchange. U.S. government securities. The Master Trust invests in U.S. government securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly U.S. government bonds, agency securities and municipal bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. If fair value is based on quoted prices in active markets and traded on a national securities exchange, U.S. government securities are classified within the Level 1 valuation hierarchy; otherwise, U.S. government securities are classified within the Level 2 valuation hierarchy. International government securities. The Master Trust invests in international government securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominantly non-U.S. government bonds. Fair value for these securities is provided by a third-party pricing service that utilizes various inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads and benchmark securities as well as other relevant economic measures. International government securities are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the bonds are not traded on a national securities exchange. Asset-backed securities. The Master Trust invests in asset-backed securities for diversification and to provide a hedge to interest rate movements affecting liabilities. Investment types are predominately mortgage-backed securities. Asset-backed securities are classified within the Level 2 valuation hierarchy since fair value inputs are derived prices in active markets and the investments are not traded on a national securities exchange. Cash funds. The Master Trust invests in cash funds to manage liquidity resulting from payment of participant benefits and certain administrative fees. Investment vehicles primarily include a non-interest bearing cash fund with an earnings credit allowance feature, various exchange-traded derivative instruments consisting of futures and interest rate swap agreements used to manage the duration of certain liability-hedging investments. The non-interest bearing cash fund is classified within the Level 1 valuation hierarchy. Exchange traded derivatives, such as options and futures, for which market quotations are readily available, are valued at the last reported sale price or official closing price on the primary market or exchange on which they are traded and are classified within the Level 1 valuation hierarchy. Group annuity contract. The Master Trust invested in a buy-in GAC to provide a hedge to interest rate movements affecting liabilities. The GAC consisted of a nonparticipating single premium group annuity contract. The initial value of the GAC was equal to the premium paid to secure the contract and was adjusted each reporting period to reflect the estimated fair value of the premium that would be paid for such a contract at that time. Since there were no observable inputs associated with the valuation, the GAC was classified within the Level 3 valuation hierarchy. Real estate interests. The Master Trust invested in real estate interests for diversification. Investments in real estate represented interests in several limited partnerships, which invest in various real estate properties. Interests in real estate were valued using various methodologies, including independent third party appraisals; fair value measurements were not developed by the Company. For some investments, little market activity may have existed and determination of fair value was then based on the best information available in the circumstances. This involved a significant degree of judgment by taking into consideration a combination of internal and external factors. Accordingly, interests in real estate were classified within the Level 3 valuation hierarchy. Private mutual funds. The Master Trust invests in mutual funds for growth and diversification. Investment vehicles include an institutional fund that holds a diversified portfolio of long-duration corporate fixed income investments (Corporate Bond Fund). The Corporate Bond Fund is not traded on a national securities exchange and is valued at NAV, the practical expedient to estimate fair value. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. The following tables present the fair value of assets in the Master Trust by asset category and by fair value hierarchy:
| December 31, 2024
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Dollars in millions)
Corporate bonds | $ | — |  |  | $ | 65.3 |  |  | $ | — |  |  | $ | 65.3 |
U.S. government securities | 13.7 |  |  | 3.4 |  |  | — |  |  | 17.1 |
International government securities | — |  |  | 1.5 |  |  | — |  |  | 1.5 |
Asset-backed securities | — |  |  | 0.4 |  |  | — |  |  | 0.4 |
Cash funds | 4.3 |  |  | — |  |  | — |  |  | 4.3 |
Total assets at fair value | $ | 18.0 |  |  | $ | 70.6 |  |  | $ | — |  |  | 88.6 |
Assets measured at net asset value practical expedient (1) |  |  |  |  |  |  |
Private mutual funds |  |  |  |  |  |  | 16.2 |
Total plan assets |  |  |  |  |  |  | $ | 104.8 |
| December 31, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Dollars in millions)
Corporate bonds | $ | — |  |  | $ | 66.7 |  |  | $ | — |  |  | $ | 66.7 |
U.S. government securities | 19.3 |  |  | 4.1 |  |  | — |  |  | 23.4 |
International government securities | — |  |  | 1.5 |  |  | — |  |  | 1.5 |
Asset-backed securities | — |  |  | 0.5 |  |  | — |  |  | 0.5 |
Cash funds | 3.8 |  |  | — |  |  | — |  |  | 3.8 |
Total assets at fair value | $ | 23.1 |  |  | $ | 72.8 |  |  | $ | — |  |  | 95.9 |
Assets measured at net asset value practical expedient (1) |  |  |  |  |  |  |
Private mutual funds |  |  |  |  |  |  | 20.1 |
Total plan assets |  |  |  |  |  |  | $ | 116.0 |
(1) In accordance with Accounting Standards Update 2015-07, investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the tables are intended to permit reconciliation of the fair value hierarchy to the total value of assets of the plans. The table below sets forth a summary of changes in the fair value of the Master Trust’s Level 3 investments:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (Dollars in millions)
Balance, beginning of period | $ | — |  |  | $ | 430.4 |  |  | $ | 0.3 |
Realized (losses) gains | — |  |  | (10.4) |  |  | 0.1 |
Unrealized losses relating to investments still held at the reporting date | — |  |  | — |  |  | (68.8) |
Purchases, sales and settlements, net | — |  |  | (420.0) |  |  | 498.8 |
Balance, end of period | $ | — |  |  | $ | — |  |  | $ | 430.4 |
Contributions Annual contributions to the qualified plans are made in accordance with minimum funding standards and the Company’s agreement with the Pension Benefit Guaranty Corporation (PBGC). Funding decisions also consider certain funded status thresholds defined by the Pension Protection Act of 2006. As of December 31, 2024, the Company’s remaining qualified plan was expected to be at or above the Pension Protection Act thresholds. The Company was not required to make any cash contributions to its remaining qualified pension plan in 2024 based on minimum funding requirements and did not make any discretionary cash contributions in 2024. In January 2025, the Company made a discretionary cash contribution of $5.0 million to its remaining qualified pension plan which terminated the Company’s agreement with the PBGC and resulted in the release of a $37.0 million letter of credit that had been maintained in favor of the PBGC. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in connection with the Company’s benefit obligation:
| Pension Benefits
| (Dollars in millions)
2025 | $ | 10.9 |
2026 | 10.7 |
2027 | 10.6 |
2028 | 10.4 |
2029 | 10.2 |
Years 2030-2034 | 47.1 |
Defined Contribution Plans The Company sponsors employee retirement accounts under three 401(k) plans for eligible U.S. employees. The Company matches voluntary contributions to each plan up to specified levels. For one plan, the Company has sole discretion in making any matching contributions. The expense for these plans was $21.7 million, $21.3 million and $20.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Discretionary contribution features in the plans allow for additional contributions from the Company. The Company granted discretionary contributions of $7.8 million, $7.3 million and $9.2 million during the years ended December 31, 2024, 2023 and 2022, respectively. Discretionary contributions paid during the years ended December 31, 2024, 2023 and 2022 were $7.7 million, $4.6 million and $4.0 million, respectively. Superannuation The Company makes superannuation contributions for eligible Australia employees in accordance with the employer contribution rate set by the Government of Australia. The expense related to these contributions was $25.7 million, $21.9 million and $18.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. A performance contribution feature allows for additional discretionary contributions from the Company. The Company granted discretionary performance contributions of $2.2 million during the year ended December 31, 2024, and $1.6 million during both the years ended December 31, 2023 and 2022. Discretionary contributions paid during the years ended December 31, 2024 and 2023 were $1.9 million and $1.3 million, respectively. There were no discretionary performance contributions paid during the year ended December 31, 2022.

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