PEABODY ENERGY CORPBTU
PEABODY ENERGY CORP Income Taxes Disclosure
Income Taxes
(Loss) income from continuing operations before income taxes and income tax provision for the periods presented below consisted of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| U.S. | $ | (62.7) | $ | 180.2 | $ | 77.8 | |||||||||||
| Non-U.S. | 29.2 | 335.9 | 1,047.0 | ||||||||||||||
| (Loss) income from continuing operations before income taxes | $ | (33.5) | $ | 516.1 | $ | 1,124.8 | |||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| Current: | |||||||||||||||||
| U.S. federal | $ | (0.1) | $ | (0.1) | $ | (0.1) | |||||||||||
| Non-U.S. | 25.6 | 96.7 | 225.9 | ||||||||||||||
| State | — | — | 0.1 | ||||||||||||||
| Total current | 25.5 | 96.6 | 225.9 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Non-U.S. | (16.7) | 12.2 | 82.9 | ||||||||||||||
| Total deferred | (16.7) | 12.2 | 82.9 | ||||||||||||||
| Income tax provision | $ | 8.8 | $ | 108.8 | $ | 308.8 | |||||||||||
The following is a reconciliation of the expected income tax provision at the U.S. federal statutory rate to the Company’s income tax provision for the periods presented below:
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| U.S. federal statutory rate | $ | (7.0) | 21.0 | % | $ | 108.4 | 21.0 | % | $ | 236.2 | 21.0 | % | ||||||||||||||
| Foreign tax effects: | ||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Statutory tax rate difference between Australia and U.S. | 2.2 | (6.6) | % | 30.2 | 5.9 | % | 94.4 | 8.4 | % | |||||||||||||||||
| Permanent difference - remeasurement | (6.8) | 20.3 | % | 21.6 | 4.2 | % | 2.6 | 0.2 | % | |||||||||||||||||
| Remeasurement of foreign tax accounts | 2.5 | (7.5) | % | (5.7) | (1.1) | % | (0.9) | (0.1) | % | |||||||||||||||||
| Other | 4.8 | (14.3) | % | (0.3) | (0.1) | % | (7.8) | (0.7) | % | |||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||
| Deferred tax asset write-off due to liquidation | 15.0 | (44.8) | % | — | — | % | — | — | % | |||||||||||||||||
| Change in valuation allowance | (15.0) | 44.8 | % | — | — | % | — | — | % | |||||||||||||||||
| Other | (0.8) | 2.4 | % | — | — | % | 0.4 | — | % | |||||||||||||||||
| Changes in valuation allowance | 18.9 | (56.4) | % | (29.6) | (5.7) | % | 5.0 | 0.4 | % | |||||||||||||||||
| Worldwide change in prior year unrecognized tax benefits | (1.1) | 3.3 | % | (6.9) | (1.3) | % | (1.5) | (0.1) | % | |||||||||||||||||
| Nondeductible and nontaxable items | 3.5 | (10.4) | % | 2.0 | 0.4 | % | 3.0 | 0.3 | % | |||||||||||||||||
| Other adjustments | ||||||||||||||||||||||||||
| Excess U.S. depletion | (9.1) | 27.2 | % | (8.8) | (1.7) | % | (14.0) | (1.2) | % | |||||||||||||||||
| Other, net | 1.7 | (5.3) | % | (2.1) | (0.4) | % | (8.6) | (0.7) | % | |||||||||||||||||
| Total income tax provision | $ | 8.8 | (26.3) | % | $ | 108.8 | 21.2 | % | $ | 308.8 | 27.5 | % | ||||||||||||||
The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting published the Pillar Two model rules designed to address the tax challenges arising from the digitalization of the global economy. Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Company operates, effective for the financial year beginning January 1, 2024. Based on an assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Company operates are above 15% and the Company is not currently aware of any circumstances under which this might change. Therefore, the Company did not incur any Pillar Two top-up taxes for the years ended December 31, 2025 and 2024.
On July 4, 2025, the OBBBA was signed into law and the tax provisions that were effective for 2025 had no effect on the income tax provision for the year ended December 31, 2025.
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31, 2025 and 2024 consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Deferred tax assets: | |||||||||||
| Tax loss carryforwards and credits | $ | 808.2 | $ | 732.5 | |||||||
Property, plant, equipment and mine development, principally due to differences in depreciation, depletion and asset impairments | 539.0 | 523.2 | |||||||||
| Accrued postretirement benefit obligations | 29.3 | 33.7 | |||||||||
| Asset retirement obligations | 108.8 | 102.4 | |||||||||
| Employee benefits | 19.3 | 19.7 | |||||||||
| Take-or-pay obligations | 5.9 | 5.5 | |||||||||
| Investments and other assets | 28.6 | 32.6 | |||||||||
| Workers’ compensation obligations | 9.3 | 8.4 | |||||||||
| Operating lease liabilities | 29.5 | 29.0 | |||||||||
| Other | 38.6 | 33.0 | |||||||||
| Total gross deferred tax assets | 1,616.5 | 1,520.0 | |||||||||
| Valuation allowance | (1,469.2) | (1,420.9) | |||||||||
| Total net deferred tax assets | 147.3 | 99.1 | |||||||||
| Deferred tax liabilities: | |||||||||||
Property, plant, equipment and mine development, principally due to differences in depreciation, depletion and asset impairments | 123.7 | 95.5 | |||||||||
| Operating lease right-of-use assets | 28.9 | 29.1 | |||||||||
| Investments and other assets | 18.8 | 15.4 | |||||||||
| Total deferred tax liabilities | 171.4 | 140.0 | |||||||||
| Net deferred tax liability | $ | (24.1) | $ | (40.9) | |||||||
| Deferred taxes are classified as follows on the Consolidated Balance Sheets: | |||||||||||
| Noncurrent deferred income tax asset | $ | 2.2 | $ | — | |||||||
| Noncurrent deferred income tax liability | $ | (26.3) | $ | (40.9) | |||||||
As of December 31, 2025, the Company had gross U.S. federal net operating losses (NOLs) of $2.0 billion. The Company’s tax loss carryforwards and credits of $808.2 million as of December 31, 2025 were comprised primarily of net federal NOLs of $406.1 million, tax general business credits (GBCs) of $139.1 million, net Australia NOLs and capital tax loss carryforwards of $165.8 million, state NOLs of $93.4 million and other foreign NOLs of $2.8 million. The foreign tax loss carryforwards have no expiration date. The federal NOLs begin to expire in 2037, the state NOLs begin to expire in 2028 and the GBCs begin to expire in 2027.
In assessing the near-term use of NOLs and tax credits and corresponding valuation allowance adjustments, the Company evaluates the expected level of reversals of existing taxable temporary differences, available tax planning strategies and future taxable income. The Company maintained valuation allowances of $1.5 billion against the U.S. net deferred tax asset position of $1.0 billion and against certain foreign deferred tax assets, primarily in Australia, of $0.5 billion. The valuation allowance against the U.S. and certain foreign deferred tax assets continues to be recorded due to unlikely realization.
Unrecognized Tax Benefits
The amount of the Company’s gross unrecognized tax benefits has not changed since December 31, 2024. The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $9.2 million at both December 31, 2025 and 2024. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the periods presented below is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| Balance at beginning of period | $ | 9.2 | $ | 8.7 | $ | 9.5 | |||||||||||
| Additions for current year tax positions | 1.1 | 1.4 | 0.9 | ||||||||||||||
| (Reductions) additions for prior year tax positions | (1.1) | 0.4 | (1.7) | ||||||||||||||
| Reductions for expirations of statutes limitations | — | (1.3) | — | ||||||||||||||
| Balance at end of period | $ | 9.2 | $ | 9.2 | $ | 8.7 | |||||||||||
The Company recognizes interest and penalties related to unrecognized tax benefits in its income tax provision. The Company’s gross interest and penalties decreased by $6.2 million during the year ended December 31, 2024 due to expiration of statutes. The Company had no accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2025 and 2024. The Company recorded $0.2 million of gross interest and penalties during the year ended December 31, 2023 and had $6.1 million of accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2023.
Tax Returns Subject to Examination
The Company’s federal income tax returns for the tax years 2017, 2020 and 2022 through 2024 are subject to potential examinations by the Internal Revenue Service. The Company’s state income tax returns for the tax years 2016 and thereafter remain potentially subject to examination by various state taxing authorities due to NOL carryforwards. Australian income tax returns for tax years 2021 through 2024 are subject to potential examinations by the Australian Taxation Office.
Foreign Earnings
As of December 31, 2025, the Company has unremitted earnings relating to certain wholly owned subsidiaries that are not permanently reinvested, but there are no residual cash taxes on the unremitted earnings. The Company has an earnings deficit for remaining investments outside the U.S. and continues to be permanently reinvested with respect to its historical earnings. However, when appropriate, the Company has the ability to access foreign cash without incurring residual cash taxes due to the existence of NOLs.
Tax Payments and Refunds
The following table summarizes the Company’s income tax payments, net for the periods presented below:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| U.S. — federal | $ | (0.1) | $ | (0.1) | $ | (0.2) | |||||||||||
| U.S. — state and local | — | — | 0.1 | ||||||||||||||
| Australia | 26.1 | 222.6 | 130.7 | ||||||||||||||
| Total income tax payments, net | $ | 26.0 | $ | 222.5 | $ | 130.6 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Mar 22, 2017 | |
| 2015 | Mar 16, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.