This summary is based on the first quarter fiscal 2008 earnings call conducted by Peabody Energy Corp. (BTU: chart) on April 22, 2008.
Management:

- President and Chief Commercial Officer: Richard A. Navarre
- Chairman and CEO: Gregory H. Boyce
- Sr. VP, IR and Corporate Communications: Vic Svec

Key Investors Issues

- Revenues rose 15% to $1.28 billion from $1.11 billion in 2007.
- Earnings fell 33.5% to $57.2 million or 21 cents a share.
- The firm raised its full-year EBITDA target by up to 50%, to $1.5 to $1.8 billion.

First Quarter Highlights

Revenues grew 15% to $1.28 billion on sales of 61.2 million tons from $1.11 billion in 2007 on sales of 55.2 million tons as the firm realized improved prices throughout all of the operating regions in the US along with higher volumes in Australia.

- Average U.S. revenues grew 16%, driven by improved pricing from all U.S. regions as well as record volumes in the Powder River Basin.
- Australian revenues increased 5% driven by greater contribution from Australian thermal and metallurgical mines completed in 2007, offset by lower realized metallurgical coal prices from contracts signed in 2007 compared with 2006, as well as a change of mix to a greater proportion of export and domestic thermal coal sales.

The US price per ton grew 6% over last year and 9% since last quarter, and this was led by an improvement in PRB price realizations.

- Eastern US operations were affected by lower volumes due to significant flash floods in the Midwest and severe winter weather as well as the rising price of commodities.
- In the Western US, costs were higher due to add-on taxes, which comprised more then one quarter of the increase, record fuel and explosive costs, and then repairs and maintenance and supply escalations on top.
- In Australia, volumes were up 10% above last year on production from mines developed in 2007.

Australia''s average realized price per ton in the first quarter was lower than last year as expected due to last quarter of 2007''s signed metallurgical coal contracts that rolled off at the end of the quarter.

- The firm also had a higher mix of domestic thermal coal because of the constraints on the export chain.
- Earnings fell 33.5% to $57.2 million or 21 cents a share from $88.5 million or 33 cents a share in 2007 due to increased commodity costs, higher production taxes and royalties and weather-related issues.
- Australian operations were affected by $60 million in higher commodity-related and demurrage costs, foreign exchange rates and the effects of record flooding in Queensland.

Operational Highlights:

- Peabody''s global trading platform recognized the tight market dynamics and quickly seized opportunities around the globe.
- The firm has contracted more times the ER trading activities than the last two years combined and that includes business on four continents.

PRB, Colorado and Illinois Basin products are all higher, and the firm has the greatest volumes available in these regions with some 180 million to 200 million tons yet to be priced for delivery between 2009 and 2010.

- During the first quarter, the firm contracted premium PRB product at prices 37%, better than 2007’s realized pricing, which was already up nearly 30% over the previous year.
- With the slack removed from every other point in the global coal markets, parity pricing against the competitive Illinois Basin and cap products would suggest levels of more than $25 per ton for PRB prices.

In the Illinois Basin, strong demand, increasing levels of exports and the high cost of alternative coal options has pushed prices to record levels for all products as well.

- The firm is seeing contracts and signing contracts 80% to 90% above a year ago levels.
- With the ongoing escalation of commodity pricing and escalating cost of other key inputs to the mine production, the company is including inflation protection in all of its offers.

Major Projects:

- Startup of the El Segundo Mine in New Mexico in the second quarter, which is expected to be highly productive, with an overburden ratio approximately half of the neighboring Lee Ranch Mine.
- With the addition of El Segundo, Peabody''s New Mexico production should grow to nearly 10 million tons in 2010 from 5.8 million tons in 2007.
- Startup of the first phase of a new blending and coal loadout facility at the company''s North Antelope Rochelle Mine, the world''s largest coal mine.