Peabody Energy

From Wikipedia, the free encyclopedia

Peabody Energy

Type	Public (NYSE: BTU)
Founded	1883 (Chicago, Illinois)
Headquarters	St. Louis, Missouri
Key people	Gregory H. Boyce, President and CEO
Industry	Coal
Revenue	$5.26 billion (2006) [1]
Net income	$600.7 million (2006) [2]
Employees	8,300 (as of Dec. 31, 2005)[3]
Website	www.peabodyenergy.com

1 Overview
2 History
3 Recent Developments
4 Cultural references and trivia
5 Internal Links
6 Reference

[edit] Overview

Peabody Energy (NYSE: BTU), previously Peabody Coal Company, is the largest coal mining company in the world, mining 240 million tons of coal annually, providing 10% of US energy and 3% of world energy. The company has operations in Colorado, Illinois, Indiana, Kentucky, West Virginia, Arizona, Wyoming, New Mexico, Australia, and South America. Their largest operation is the North Antelope-Rochelle Mine located in Campbell County, Wyoming, mining more than 87 million tons of coal annually.

Peabody was Nos. 497 and 453 on the Fortune 500 list of companies in 2005 and 2006, respectively.

Peabody Energy Corporation is a private-sector coal company. During the year ended December 31, 2005, the Company sold 239.9 million tons of coal. It sells coal to over 350 electricity generating and industrial plants in 15 countries. At December 31, 2005, the Company had 9.8 billion tons of proven and probable coal reserves. The Company owns, through its subsidiaries, majority interests in 32 coal operations located throughout all the United States coal producing regions and in Australia. In addition, Peabody owns minority interests in two mines through joint venture arrangements. Most of the production in the western United States is low-sulfur coal from the Powder River Basin. In the West, it owns and operates mines in Arizona, Colorado, New Mexico and Wyoming. In the East, it owns and operates mines in Illinois, Indiana, Kentucky and West Virginia.

[edit] History

The origins of Peabody Energy starts with the founding of Peabody, Daniels & Company by Francis S. Peabody and a partner.[4]. The company bought coal from established mines and sold it to homes and businesses in the Chicago area. Francis soon bought out his partner, and, in 1890, he incorporated the company as Peabody Coal Company. In 1895, the company began operating its first mine, in Williamson County, Illinois. In 1913, the company won its first long-term contract to supply a large electric utility. Such contracts to electric utilities is how Peabody makes most of its money today. The corporation went public in 1929 with a listing on the Midwest Stock Exchange, and, in 1949, was listed on the New York Stock Exchange.

While Peabody was profitable during its early years, it hit hard times in the early 1950s. To address the situation, it entered into merger talks with Sinclair Coal company. The merger occurred in 1955, resulting in the move of Peabody's headquarters to St. Louis. The merged company, however, retained the Peabody name. Under the leadership of coal-veteran Russell Kelce, the company expanded production and sales, and purchased a mine in Queensland Australia, its first outside of North America.

In 1968, the company was purchased by the Kennecott Copper Corporation. The U.S. Federal Trade Commission, however, challenged the purchase as an antitrust violation. In 1976, the FTC ordered Kennecott to divest itself of Peabody. The newly-created Peabody Holding Company purchased the Peabody Coal business of Kennecott for $1.1 billion. A consortium of companies controlled Peabody-Holding. In 1990, Hanson PLC, one of the owners of Peabody Holding, bought out the rest of the owners. Peabody was eventually bought by a unit of Lehman Brothers, which brought the company public as Peabody Energy Corporation in 2001. The IPO for Peabody Energy raised proceeds of $456 million.

[edit] Recent Developments

In October 2006, Peabody completed an acquisition of Excel Coal Limited, an independent coal company in Australia. Peabody paid $1.52 billion for Excel and also assumed $227 million of Excel's debt. At the time, Excel owned three operating mines and three-development stage mines in Australia. Additionally, Excel had an estimated 500 million tons of proven and probable coal reserves.[5] Peabody owns five other mines in Australia, which are all located in Queensland. Most of the Australian production is low-sulfur, metallurgical coal.

[edit] Cultural references and trivia

The environmental impact of Peabody Energy's strip mining operations in Muhlenberg County, Kentucky is the subject of John Prine's 1971 song "Paradise."