Obligation Peabody Resources 4.75% ( US704549AG98 ) en USD

Peabody Resources

100 % ⇌

Etats-unis

US704549AG98 ( en USD )

4.75% par an ( paiement semestriel )

14/12/2066

Prospectus brochure de l'obligation Peabody Energy US704549AG98 en USD 4.75%, échéance 14/12/2066

/

/

704549AG9

15/12/2025 ( Dans 108 jours )

Peabody Energy est la plus grande entreprise minière de charbon aux États-Unis, active dans l'extraction, la préparation et la vente de charbon métallurgique et thermique à l'échelle mondiale.

L'instrument financier étudié est une obligation d'entreprise, identifiée par le code ISIN US704549AG98 et le code CUSIP 704549AG9, émise par Peabody Energy, un acteur majeur et historique de l'industrie charbonnière mondiale, dont les activités opérationnelles et le siège sont principalement ancrés aux États-Unis, le pays d'émission de ce titre de dette ; cette obligation est libellée en Dollars Américains (USD), propose un taux d'intérêt nominal de 4.75% versé avec une fréquence de paiement semestrielle, et présente une date de maturité lointaine fixée au 14 décembre 2066, son prix actuel sur le marché s'affichant à 100% de sa valeur nominale.

424B5
Page 1 of 175
424B5 1 y27362ae424b5.htm 424B5
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 2 of 175
Table of Contents
Filed Pursuant to Rule 424(B)(5)
Registration No. 333-136108

PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED JULY 28, 2006)

Peabody Energy Corporation
$675,000,000

4.75% Convertible Junior Subordinated Debentures Due 2066

We are offering $675,000,000 aggregate principal amount of our 4.75% convertible junior subordinated debentures, which
we refer to as the convertible debentures, with a final maturity date of December 15, 2066. We will use our commercially
reasonable efforts, subject to the occurrence of a market disruption event (as described herein), to raise sufficient net proceeds
from the issuance of qualifying capital securities (as described herein) to pay holders the principal amount of the convertible
debentures, together with accrued and unpaid interest, including any compounded interest thereon, on December 15, 2041, the
scheduled maturity date.
The convertible debentures will be our unsecured obligations, ranking junior to all of our existing and future senior and
subordinated debt (excluding trade accounts payable or accrued liabilities arising in the ordinary course of business), except for
any future debt that by its terms ranks equal to or junior to the convertible debentures. Interest on the convertible debentures
will accrue from the issue date at a fixed rate equal to 4.75% per year, and will be payable in arrears semi-annually on June 15
and December 15 of each year, commencing on June 15, 2007.
We may elect to, and if and to the extent that a mandatory trigger event (as described herein) has occurred and is
continuing will be required to, defer interest payments on the convertible debentures. After five years of deferral at our option, or
upon the occurrence of a mandatory trigger event, we generally must sell warrants or preferred stock with specified
characteristics and use the funds from that sale to pay deferred interest, although this obligation is subject to limitations (as
described herein) and any failure to comply with this obligation would constitute a covenant breach but not an event of default.
In no event, however, may we defer payments of interest on the convertible debentures for more than 10 years, and an event of
default will result if all accrued and unpaid interest in respect of the convertible debentures is not paid in ful within 30 days after
the tenth anniversary of the commencement of any deferral. In the event of our bankruptcy, insolvency or receivership, any
claim in respect of interest that accrued during a mandatory interest deferral period in excess of two years of accrued and
unpaid interest (including any compounded interest thereon) on the convertible debentures will be extinguished.
Under the circumstances described in this prospectus supplement, holders may convert their convertible debentures into
cash and, if applicable, shares of our common stock, in the case of conversion following a notice of redemption or upon a non-
stock change of control, or, in all other cases, into perpetual preferred stock and, if applicable, shares of our common stock.
The consideration delivered upon conversion will be based upon a conversion rate of 16.1421 shares of our common stock per
$1,000 principal amount of convertible debentures (which is equal to an initial conversion price of approximately $61.95 per
share), subject to adjustment. Upon the occurrence of any non-stock change of control on or prior to December 20, 2036, under
certain circumstances, we will increase the conversion rate for a limited time as described herein.
Any perpetual preferred stock delivered upon the conversion of convertible debentures will have a cumulative dividend rate
of 3.0875% of liquidation preference and will be subject to remarketing after December 15, 2046 or earlier upon the first
occurrence of a change of control, in which a holder may elect whether to participate.
Peabody Energy Corporation's common stock is quoted on the New York Stock Exchange under the symbol "BTU." The
last reported sale price of the common stock on the New York Stock Exchange on December 14, 2006 was $44.25 per share.
The convertible debentures will not be subject to redemption prior to December 20, 2011. Between December 20, 2011 and
December 19, 2036 we may redeem the convertible debentures, in whole or in part, if for at least 20 trading days within the 30
consecutive trading days immediately prior to the date on which notice of redemption is given, the closing sale price of our
common stock has exceeded 130% of the then prevailing conversion price. On or after December 20, 2036, whether or not the
redemption condition is satisfied, we may redeem the convertible debentures, in whole or in part. Any redemption wil be at a
cash redemption price of 100% of the principal amount of the convertible debentures to be redeemed, plus accrued and unpaid
interest, including any compounded interest, to the date of redemption.

For a more detailed description of the convertible debentures, see "Description of the Convertible Debentures" beginning on
page S-48.

Investing in the convertible debentures involves risks. See "Risk Factors" beginning on page S-24.

Price to
Underwriting Discounts Proceeds to

Public(1)

and Commissions
Peabody

http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 3 of 175
Per Convertible Debenture

100 %
2.3833 %
97.6167 %
Total
$ 675,000,000 $
16,087,500 $ 658,912,500

(1) Plus accrued interest, if any, from December 20, 2006.

We have granted the underwriters the right to purchase up to an additional $75,000,000 principal amount of convertible
debentures, solely to cover overallotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of
these securities, or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

The underwriters expect to deliver the convertible debentures to purchasers on December 20, 2006.

LEHMAN BROTHERS MORGAN STANLEY
CITIGROUP
BANC OF AMERICA SECURITIES LLC
HSBC
ABN AMRO ROTHSCHILD LLC
BNP PARIBAS
BMO CAPITAL MARKETS
PNC CAPITAL MARKETS LLC
CALYON SECURITIES (USA) INC.
CREDIT SUISSE
WELLS FARGO SECURITIES

December 14, 2006
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 4 of 175

TABLE OF CONTENTS

Page

Prospectus Supplement
PROSPECTUS SUPPLEMENT SUMMARY

S-2
RISK FACTORS

S-24
USE OF PROCEEDS

S-42
PRICE RANGE OF COMMON STOCK

S-42
DIVIDEND POLICY

S-42
CAPITALIZATION

S-43
DESCRIPTION OF OTHER INDEBTEDNESS

S-45
DESCRIPTION OF THE CONVERTIBLE DEBENTURES

S-48
DESCRIPTION OF THE PERPETUAL PREFERRED STOCK

S-78
CAPITAL REPLACEMENT

S-92
CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS

S-97
UNDERWRITING

S-105
WHERE YOU CAN FIND MORE INFORMATION

S-108
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

S-109
LEGAL MATTERS

S-109
EXPERTS

S-109
Prospectus
ABOUT THIS PROSPECTUS

i
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

i
SUMMARY

1
RATIO OF EARNINGS TO FIXED CHARGES

3
USE OF PROCEEDS

3
DIVIDEND POLICY

3
DESCRIPTION OF DEBT SECURITIES

4
DESCRIPTION OF CAPITAL STOCK

9
DESCRIPTION OF WARRANTS

15
DESCRIPTION OF UNITS

16
PLAN OF DISTRIBUTION

17
LEGAL MATTERS

18
EXPERTS

18
WHERE YOU CAN FIND MORE INFORMATION

18
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

18

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of
this offering. The second part is the accompanying prospectus, which gives more general information, some of which
may not apply to this offering.

If the description of the offering varies between the prospectus supplement and the accompanying prospectus,
you should rely on the information in the prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus supplement,
any free writing prospectus prepared by us and the accompanying prospectus. We have not authorized anyone to
provide you with additional or different information. If anyone provides you with additional, different or inconsistent
information, you should not rely on it. We are offering to sell the convertible debentures, and seeking offers to buy
the convertible debentures, only in jurisdictions where offers and sales are permitted. You should not assume that the
information we have included in this prospectus supplement, any free writing prospectus prepared by us or the
accompanying prospectus is accurate as of any date other than the date of this prospectus supplement, any free
writing prospectus prepared by us or the accompanying prospectus or that any information we have incorporated by
reference is accurate as of any date other than the date of the document incorporated by reference. Our business,
financial condition, results of operations and prospects may have changed since those dates.

Unless otherwise indicated, (i) the exchange rate used in translating Australian dollars into U.S. dollars was
determined by reference to an assumed exchange rate of A$1 = US$0.7447, which was based on prevailing rates
from October 18, 2006 through October 23, 2006 and (ii) all information contained in this prospectus supplement
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 5 of 175
assumes no exercise of the underwriters' option to purchase an additional $75,000,000 principal amount of
convertible debentures to cover overallotments.

S-1
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 6 of 175
Table of Contents

PROSPECTUS SUPPLEMENT SUMMARY

This summary does not contain all of the information that you should consider before investing in the
convertible debentures. You should read the entire prospectus supplement, any free writing prospectus
prepared by us and the accompanying prospectus carefully, including the matters discussed under the caption
"Risk Factors," "Cautionary Notice Regarding Forward-Looking Statements" and the detailed information
and financial statements included or incorporated by reference in this prospectus supplement and the
accompanying prospectus. When used in this prospectus supplement and the accompanying prospectus, the
terms "we," "our," and "us," except as otherwise indicated or as the context otherwise indicates, refer to
Peabody Energy Corporation and/or its applicable subsidiary or subsidiaries.

Peabody Energy Corporation

We are the largest private-sector coal company in the world. In the first nine months of 2006, we sold
182.9 million tons of coal. During 2005, our sales of 239.9 million tons of coal included sales to approximately
350 electricity generating and industrial plants in 15 countries. Our coal products fuel approximately 10% of
all U.S. electricity generation and 3% of worldwide electricity generation. At December 31, 2005, we had
9.8 billion tons of proven and probable coal reserves, more than double the reserves of any other U.S. coal
producer. Financial results for 2005 included $4.6 billion in revenues, $518.4 million in operating profit,
$422.7 million in net income and $870.4 million in Adjusted EBITDA. Financial results for the nine months
ended September 30, 2006 included $3.9 billion in revenues, $519.9 million in operating profit, $425.7 million
in net income and $809.0 million in Adjusted EBITDA. See "Summary Financial and Operating Data" for the
definition of Adjusted EBITDA, which is a non-GAAP measure, and a discussion of its usefulness as a
measure of our overall financial and operating performance and a reconciliation of income from continuing
operations to Adjusted EBITDA.

We own, through our subsidiaries, majority interests in 34 coal operations located throughout all major
U.S. coal producing regions and in Australia. Additionally, we own a minority interest in one mine through a
joint venture arrangement. During 2005, we shipped 75% of our U.S. mining operations' coal sales from the
western United States and the remaining 25% from the eastern United States. Most of our production in the
western United States is low-sulfur coal from the Powder River Basin. Our overall western U.S. coal
production has increased from 37 million tons in fiscal year 1990 to 154.3 million tons during 2005,
representing a compounded annual growth rate of 10%. In the West, we own and operate mines in Arizona,
Colorado, New Mexico and Wyoming. In the East, we own and operate mines in Illinois, Indiana, Kentucky
and West Virginia. We also own five mines in Queensland, Australia, in addition to the Australian mines
acquired in the Excel Acquisition (as described in "-- Recent Developments"), which produce both thermal
and metallurgical coal, largely for the export markets. We generated 81% of our 2005 production from non-
union mines. We expect full year 2006 production of approximately 230 million tons and total sales of
approximately 255 million tons, including 12 to 14 million tons of metallurgical coal.

During 2005, 87% of our sales (by volume) were to U.S. electricity generators, 9% were to customers
outside the United States and 4% were to the U.S. industrial sector. Coal continues to fuel more U.S. electricity
generation than all other energy sources combined. In 2005, coal-fueled plants generated an estimated 51.3%
of the nation's electricity, followed by nuclear (20.1%), gas-fired (17.4%) and hydroelectric (6.7%) units. We
believe that growing demand for energy will strengthen the use of coal. We also believe that U.S. and global
coal consumption will continue to increase as coal-fueled generating plants utilize their existing excess
capacity and as new coal-fueled plants are constructed. Coal is an attractive fuel for electricity generation
because it is:

·

Abundant: Coal makes up more than 85% of fossil fuel reserves in the United States. The nation has an
estimated 250-year supply of coal, based on current usage rates.

·

Low-Cost: At an average delivered price of $1.48 per million British thermal units, or Btu, to
U.S. generating plants in 2005, coal's cost advantage over natural gas is significant. The delivered price
of natural gas averaged $6.74 per million Btu in 2005.

·

Increasingly Clean: Aggregate emissions from U.S. coal-fueled plants have declined significantly since
1970, even as coal consumption by electricity generators has more than tripled.
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 7 of 175

S-2
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 8 of 175
Table of Contents

Approximately 90% of our coal sales during 2005 were under long-term contracts (one year or greater).
As of December 31, 2005, our sales backlog, including backlog subject to price reopener and/or extension
provisions, was over one billion tons, and the average volume-weighted remaining term of our long-term
contracts was approximately 3.2 years, with remaining terms ranging from one to 19 years. As of
September 30, 2006, we had 14 million tons of planned U.S. production uncommitted for 2007, the vast
majority of which is bituminous coal, with an additional 12 million tons available for repricing, and
approximately 60 to 65 tons of planned U.S. production uncommitted for 2008, with an additional 37 million
tons available for repricing. We have an annual metallurgical coal production capacity of 12 to 14 million tons
(excluding the additional capacity obtained in the Excel Acquisition as described in "-- Recent
Developments").

In addition to our mining operations, we market, broker and trade coal. Our total tons traded were
36.2 million during 2005. In 2005, we opened a business development, sales and marketing office in Beijing,
China to pursue potential long-term growth opportunities in this market. Our other energy-related commercial
activities include the development of mine-mouth coal-fueled generating plants, the management of our vast
coal reserve and real estate holdings, transportation services and, more recently, participation in projects that
convert coal into natural gas and transportation fuels.

Competitive Strengths

We believe our strengths will enable us to continue to grow and increase financial value.

· We are the world's largest private-sector producer and marketer of coal and the largest reserve holder of
any private sector coal company.

· We are the largest producer and marketer of low-sulfur coal in the United States.

· We have a large portfolio of long-term coal supply agreements that is complemented by available
production in attractive markets for sale at market prices.

· We are one of the safest and most productive producers of coal in the United States.

· We serve a broad range of high quality customers with mining operations located throughout all major
U.S. coal producing regions and in Australia.

· We have received numerous awards for our reclamation excellence.

· Our management team has a proven record of success.

Risk Factors

While we strive to maintain these strengths, our industry and company are subject to risks that could
adversely affect our business. For example, we cannot assure you that in the future we will be able to sell coal
as profitably as at present. Supply chain, transportation and geology are uncertain. Additionally, our company
and our customers are subject to extensive governmental regulations that create significant costs and
restrictions and that could become more onerous in the future. For a more complete discussion of the risks
related to our company, you should read the information presented under the heading "Risk Factors" in this
prospectus supplement and in our periodic reports.

Business Strategy

We utilize four core business strategies to create value:

·

Executing the Basics -- Safe, low-cost operations provide us the foundation to grow and create value.
We achieve improvements in both safety and productivity by targeting cost and productivity
improvements that require little or no additional capital. Eight of our mines set new production records
in 2005, and our Rawhide, Caballo and North Antelope Rochelle mines were the three most productive
coal mines in the nation based on tons per worker hours according to U.S. Department of Labor Mine
Safety & Health Administration data. In 2005, our emphasis on safe, low-cost operations resulted in a
33% improvement to our already-low accident rate. Our safety record has improved 48% in the past
three years. We also use the same methods to achieve environmental excellence. In 2005, we were
recognized with 11 awards, including five top awards from the U.S. Department of the Interior.
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 9 of 175

S-3
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006

424B5
Page 10 of 175
Table of Contents

·

Capitalizing on Organic Growth Opportunities -- We control the most proven and probable coal
reserves of any private-sector coal company in the world, which enables low-cost development to serve
growing customer demand. We have an industry-leading track record of being able to construct, develop
and deliver on organic growth initiatives. Over the past five years, we have developed new and
expanded capacity that is equivalent to two-thirds of U.S. coal industry growth.

·

Expanding in High Growth Global Markets -- The United States, China and India represent nearly 90%
of the forecasted growth in the world's coal industry through 2030. We sell coal to customers in 15
countries on six continents. We also have opened an office in Beijing, increased import activities for
South American coal into the United States, and recently entered the European trading markets.

·

Participating in New Generation and Btu Conversion Projects -- We are developing mine mouth
electricity generating plants using our coal reserves. We have entered into several agreements to
develop coal-to-liquids and coal-to-natural gas facilities. We have entered into a joint development
agreement with Rentech to evaluate sites near our coal reserves for coal-to-liquids projects that would
transform coal into diesel and jet fuel. We are exploring the development of a commercial-scale coal
gasification project. The facility is expected to use technology from ConocoPhillips to transform coal
into pipeline-quality synthetic natural gas.

Coal Market Outlook

We believe long-term coal market fundamentals are strong worldwide, as the U.S., China, India and other
nations increase coal demand for electricity generation and steelmaking.

The U.S. economy grew at an annual rate of 3.5% in 2005 and an annual rate of 1.6% in the third quarter
of 2006 as reported by the U.S. Commerce Department, and the CIA World Factbook reports that China's
economy grew 9.9% in 2005. We expect that demand for coal and coal-based electricity generation in the
United States will be driven by the growing economy, capacity constraints of nuclear generation and high
prices of natural gas and oil. The Energy Information Administration ("EIA") projects that the high price of oil
will lead to an increase in demand for unconventional sources of transportation fuel, including coal-to-liquids,
and that coal will begin to displace natural gas-fired generation of electricity, including the addition of
coal-to-liquids plants.

Demand for Powder River Basin coal is increasing, particularly for our ultra-low sulfur products. The
Powder River Basin represents more than half of our production. We control approximately 3.5 billion tons of
proven and probable reserves in the Southern Powder River Basin and we sold 102.7 million tons of coal from
this region in the first nine months of 2006, an increase of 10.5% over the comparable period in the prior year.

Global coal markets continue to grow, also driven by increased demand from growing economies. China's
economy grew 10.9% in the second quarter of 2006 as reported by the National Bureau of Statistics of China.
Metallurgical coal continues to sell at a significant premium to steam coal, and metallurgical markets remain
strong as global steel production grew more than 9% through September 2006. We expect to capitalize on the
strong global market for metallurgical coal primarily through production and sales of metallurgical coal from
our Appalachia operations and our Australian operations. See "Risk Factors" for additional considerations
regarding the coal market.

Recent Developments

Excel Acquisition. On July 5, 2006, we signed a merger implementation agreement to acquire Excel Coal
Limited ("Excel"), one of the largest independent coal companies in Australia, by means of a scheme of
arrangement transaction under Australian law. The merger implementation agreement was amended on
September 18, 2006, and we agreed to pay A$9.50 per share (US$7.16 as of the amendment date) for the
outstanding shares of Excel. On September 20, 2006, as part of the amended agreement, we acquired 19.99%
of the outstanding shares of Excel at a price of A$9.50 per share (US$7.16 as of September 20, 2006) (the
"Advance Purchase"), resulting in a payment of approximately A$408.3 million (US$307.8 million as of
September 20, 2006). On October 25, 2006, we acquired the remaining interest in Excel not previously
acquired in the Advance Purchase for A$9.50 per share (US$7.07), a total of approximately A$1.63 billion
(US$1.21 billion). The total acquisition price, including the Advance Purchase, was approximately
http://www.sec.gov/Archives/edgar/data/1064728/000095012306015265/y27362ae424b5.htm
12/21/2006