Peabody Energy Announces Results for the Quarter Ended September 30, 2010

- Quarterly revenues rise 12% to $1.9 billion - EBITDA increases 67% to $571 million - Operating profit and diluted EPS more than double to $445 million and $0.83, respectively - Adjusted diluted EPS increases 102% to $0.99 - $650 million of bonds refinanced, $8.4 million charge incurred - Raising midpoint of full-year EBITDA and EPS targets Peabody Energy BTU today reported third quarter 2010 EBITDA of $571.3 million, a 67 percent increase from the prior-year quarter. Income from continuing operations and diluted earnings per share from continuing operations for the quarter more than doubled prior-year levels to $237.6 million and $0.83, respectively. Adjusted diluted earnings per share from continuing operations rose 102 percent to $0.99 per share. "Peabody continues to differentiate, delivering another quarter of robust performance and targeting full-year results that may rival our previous record," said Peabody Chairman and Chief Executive Officer Gregory H. Boyce. "Peabody believes that the global coal industry is in the early stages of a long term supercycle, led by China and India. Peabody's access to these key markets represents significant value creation opportunity." RESULTS FROM CONTINUING OPERATIONS Third quarter 2010 sales volumes rose to 64 million tons driven by higher Australian and Trading and Brokerage activity. Revenues reached $1.86 billion, led by a 36 percent increase in Australia sales. EBITDA grew for the third consecutive quarter and totaled $571.3 million, with higher results from each of Peabody's business segments. U.S. Mining EBITDA rose 6 percent to $292.9 million on higher realized prices and ongoing cost containment. U.S. margins per ton expanded 8 percent to $5.96 per ton for the quarter. Australia Mining EBITDA of $323.2 million nearly tripled the prior-year quarter, driven by higher volumes and prices and lower costs. Third quarter margins per ton more than doubled the prior year to $44.13 per ton. Operating profit rose 102 percent to $444.7 million for the quarter, leading to cash flow from operations of $427.4 million. Interest expense was $62.2 million compared with $52.3 million in the prior-year quarter, reflecting $8.4 million ($0.02 per share after tax) in charges related to the refinancing of $650 million in bonds. The company reduced the interest rate on the bonds from 6.875 percent to 6.5 percent while extending the maturity seven years to 2020. Income from continuing operations more than doubled to $237.6 million and adjusted income from continuing operations grew 107 percent to $280.3 million. Diluted earnings per share from continuing operations reached $0.83 compared with $0.41 in the prior year. Third quarter adjusted diluted earnings per share increased 102 percent to $0.99. Year-to-date 2010 EBITDA rose 38 percent, operating profit increased 54 percent, and income from continuing operations rose 71 percent above comparable prior-year results. Year to date, cash flow from operations reached a record $883.8 million.