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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Commitments
Unconditional Purchase Obligations
As of December 31, 2023, purchase commitments for capital expenditures were $86.1 million, all of which is obligated within the next two years, with $79.3 million obligated within the next 12 months.
In Australia, the Company has generally secured the ability to transport coal through rail contracts and ownership interests in five east coast coal export terminals that are primarily funded through take-or-pay arrangements with terms ranging up to 20 years. In the U.S., the Company has entered into certain long-term coal export terminal agreements to secure export capacity through the Gulf Coast. As of December 31, 2023, these Australian and U.S. commitments under take-or-pay arrangements totaled $1.2 billion, of which approximately $103 million is obligated within the next year.
Contingencies
From time to time, the Company or its subsidiaries are involved in legal proceedings arising in the ordinary course of business or related to indemnities or historical operations. The Company believes it has recorded adequate reserves for these liabilities. The Company discusses its significant legal proceedings below, including ongoing proceedings and those that impacted the Company’s results of operations for the periods presented.
Litigation and Matters Relating to Continuing Operations
Metropolitan Mine Stormwater Discharge. Over the past few years, there has been significantly high rainfall in New South Wales, including unprecedented rain totals at the Metropolitan Mine site. While stormwater collected at the mine site is managed through two sedimentation dams, at times the heavy rainfall presented challenges with managing the significant volumes of stormwater, as the surface water management infrastructure has not had sufficient capacity. As a result, on multiple occasions throughout 2021 and 2022 stormwater was discharged from the mine site. Metropolitan Collieries Pty Ltd (MCPL), a wholly-owned subsidiary of PEC, removed accumulated material from the sedimentation dams to restore full site stormwater capacity by December 31, 2022 and identified and is implementing additional controls for the management of sediment moving forward. Despite the measures undertaken by MCPL to manage and improve the situation, the Environment Protection Authority commenced a prosecution for five breaches of the Protection of the Environment Operations Act 1997 on September 6, 2023.
Oregon Climate Change Lawsuit. On July 20, 2023, Peabody Energy was served with a summons issued on behalf of Multnomah County, Oregon. The complaint seeks damages from the Company and other major energy producers for allegedly causing an “extreme heat event” in Multnomah County in late June and early July 2021. The causes of action, pursuant to Oregon state law, include a failure to warn, false or misleading advertisement and public nuisance. The Company will defend the claim and will continue to assert all applicable defenses available in regards to these claims.
Other
At times, the Company becomes a party to other disputes, including those related to contract miner performance, claims, lawsuits, arbitration proceedings, regulatory investigations and administrative procedures in the ordinary course of business in the U.S., Australia and other countries where the Company does business. Based on current information, the Company believes that such other pending or threatened proceedings are likely to be resolved without a material adverse effect on its consolidated financial condition, results of operations or cash flows. The Company reassesses the probability and estimability of contingent losses as new information becomes available.
Claims, Litigation and Settlements Relating to Indemnities or Historical Operations
Patriot-Related Matters. In 2012, Patriot filed voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code (the Bankruptcy Code). In 2013, the Company entered into a definitive settlement agreement (2013 Agreement) with Patriot and the United Mine Workers of America, on behalf of itself, its represented Patriot employees and its represented Patriot retirees, to resolve all then-disputed issues related to Patriot’s bankruptcy. In May 2015, Patriot again filed voluntary petitions for relief under the Bankruptcy Code and subsequently initiated a process to sell substantially all of its assets to qualified bidders. On October 9, 2015, Patriot’s bankruptcy court entered an order confirming Patriot’s plan of reorganization, which provided, among other things, for the sale of substantially all of Patriot’s assets to two different buyers.
Patriot had federal and state black lung occupational disease liabilities related to workers employed in periods prior to Patriot’s spin-off from the Company in 2007. Upon spin-off, Patriot indemnified the Company against any claim relating to these liabilities, which amounted to approximately $150 million at that time. The indemnification included any claim made by the U.S. Department of Labor (DOL) against the Company with respect to these obligations as a potentially liable operator under the Federal Coal Mine Health and Safety Act of 1969. The 2013 Agreement included Patriot’s affirmance of indemnities provided in the spin-off agreements, including the indemnity relating to such black lung liabilities; however, Patriot rejected this indemnity in its May 2015 bankruptcy.
By statute, the Company had secondary liability for the black lung liabilities related to Patriot’s workers employed by former subsidiaries of the Company (the Patriot Federal Black Lung Claims). The Company’s accounting for the black lung liabilities related to Patriot was based on an interpretation of applicable statutes. Management believed that inconsistencies existed among the applicable statutes, regulations promulgated under those statutes and the DOL’s interpretative guidance. The Company sought clarification from the DOL regarding these inconsistencies and challenged the DOL’s position in individual black lung claims. The amount of the liability, which was determined on an actuarial basis based on the best information available to the Company, was $82.3 million at December 31, 2022. The liability, which was classified as discontinued operations, was included in the Company’s consolidated balance sheet within “Accounts payable and accrued expenses” and “Other noncurrent liabilities.”
On August 8, 2023, the Company entered into a settlement agreement to resolve the liability dispute with the DOL. In accordance with the settlement agreement, the Company paid $72.0 million to settle the Patriot Federal Black Lung Claims, with the exception of approximately $4.2 million of certain claims for attorney’s fees and additional compensation due to claimants not paid during appeal. As a result of the settlement, the Company recognized a $3.9 million gain within “(Loss) income from discontinued operations, net of income taxes” during the year ended December 31, 2023.