Peabody Energy

Early years

The Peabody Energy company was founded as Peabody, Daniels & Company in 1883 by Francis Peabody, the son of a prominent Chicago lawyer, and a partner. The company bought coal from established mines and sold it to homes and businesses in the Chicago area. In the late 1880s, Francis Peabody bought out his partner's share of the business and the company was incorporated in the state of Illinois under the name Peabody Coal Company in 1890. In 1895, it began operations of its first mine in Williamson County, Illinois and later expanded its operations in Illinois. In 1913, the company won its first long-term contract to supply Chicago Edison Company, the predecessor to utility Commonwealth Edison. The company's growth continued after World War I and the corporation went public for the first time in 1929 with a listing on the Midwest Stock Exchange, and in 1949 was listed on the New York Stock Exchange.Despite being ranked eighth among the country's top coal producers in the mid-1950s, Peabody began to lose market share to companies operating cost-efficient surface mining operations. To address the situation, it entered into merger talks with Sinclair Coal Company. A merger between the two companies occurred in 1955, resulting in the transfer of Peabody's headquarters to St. Louis, Missouri. The merged company retained the Peabody name. Under the leadership of chairman Russell Kelce, the company expanded production and sales.

1960–2000

In 1962, Peabody expanded into the Pacific with the opening of mining operations in Queensland, Australia. During this period Peabody also forged an equity partnership with the Japanese trading company Mitsui & Co., Ltd., and the Australian construction company Thiess. In 1968, the company was purchased by the Kennecott Copper Corporation. However, the U.S. Federal Trade Commission 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, and a consortium of companies controlled Peabody-Holding.Because of a federal contract with the Tennessee Valley Authority, the company was among 153 named in 1978 discrimination complaint with the Department of Labor Office of Federal Contract Compliance Program. The complaint, filed by the Coal Employment Project, a women’s advocacy organization, was based upon Executive Order 11246 signed in 1965 by U.S. President Lyndon Johnson, which bars sex discrimination by companies with federal contracts. The complaint called for the hiring of one woman for every three inexperienced men until women constituted 20 percent of the workforce. This legal strategy was successful. Almost 3,000 women were hired by the close of 1979 as underground miners.In the 1980s, Peabody expanded its operations in the Eastern United States, acquiring the West Virginia coal mines of Armco Inc in 1984. The company sought to broaden its metallurgical coal portfolio through the purchase of Eastern Gas and Fuel Associates' seven West Virginia mines in 1987. Peabody also expanded westward, opening the North Antelope and Rochelle mines in the low sulfur Wyodak seam in the heart of Wyoming's Powder River Basin in 1983 and 1984, respectively.The passage of the Clean Air Act amendments in 1990 prompted the closure of some Peabody mines. However, other mines under its ownership were able to remain in operation due to the implementation of new equipment and procedures that reduced sulfur dioxide emissions. Stricter requirements outlined in Phase II of the legislation also prompted Peabody to invest in emissions-reducing technologies. In 1990, the U.K.-based conglomerate Hanson plc, one of the owners of Peabody Holding at the time, bought out the rest of the owners.In 1993, Peabody Energy expanded their holdings in the Pacific with the acquisition of three mines in Australia and subsequently developed a fourth operation in New South Wales. Peabody also expanded its operations domestically with acquisitions in New Mexico in 1993 and Wyoming in 1994 and assumed a stake in Black Beauty, a Midwest producer, in response to increased demand for metallurgical coal.

2001–2009

In 1996, Hanson demerged Peabody and Eastern Group under the name The Energy Group. When TXU acquired The Energy Group, Peabody was sold to Lehman Brothers Merchant Banking Partners. The company filed an initial public offering in May 2001, and since this time it has operated as a publicly traded company. In 2002, Peabody launched its Peabody Energy Australia Coal Co. following the acquisition of the Wilkie Creek Mine in Queensland's Surat Basin. The North Goonyella coal mine was acquired by Peabody in 2004. 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.The company advanced a number of coal-to-liquids and coal-to-gas projects to reduce emissions during the decade. On August 30, 2007, Ernie Fletcher, the governor of the U.S. state of Kentucky signed into state law a bill that will provide approximately $300 million in incentives to Peabody to build a coal gasification plant in that state. The resulting incentives were provisioned in the form of breaks on sales taxes, incentive taxes and coal severance taxes. In 2007, Peabody and a consortium of municipal electric cooperatives began construction on the 1600-megawatt Prairie State Energy Campus clean coal project in Lively Grove, Illinois. The company retained a five percent equity stake in the project, which was expected to begin generating power for customers in 2011. Peabody sold its stake in the Prairie State project to the Wabash Valley Power Association in 2016.

2010 - 2011: Peabody predicts long-term supercycle in coal prices

At the 2010 World Energy Congress, Peabody CEO Gregory Boyce proposed a plan that advocated for the expanded use of coal worldwide, placing emphasis on geographic areas with limited or no access to electricity.In 2010, Peabody CEO Gregory Boyce told investors that global demand for coal was entering a multi-year growth period, stating "We're in the early stages of a 30-year supercycle in global coal markets."In 2011 the company reiterated that "the coal supercycle is just getting underway."

2012-2016: Net losses and bankruptcy

Peabody reported net losses in excess of $500 million annually for each calendar year during 2012 through 2014, and a net loss of nearly $2 billion for 2015.For the quarter ended March 31, 2016, Peabody reported a net loss of $165 million. Sales revenue decreased by $539 million compared to the same period in the prior year, reflecting lower coal prices and reduced demand for steel.The company filed for Chapter 11 bankruptcy on April 13, 2016.In November 2016, the day after Donald Trump won the US presidential election, shares of Peabody Energy surged more than 50 percent. On April 3, 2017 it emerged from bankruptcy and started trading on the NYSE with a ticker symbol of BTU.All figures in the following "Net Income " table were obtained from Peabody's Form 10-K for periods ended December 31, 2014, and December 31, 2019, as filed with the U.S. Securities and Exchange Commission.

2017 and beyond

In October 2017, a judge ruled that Peabody Energy's bankruptcy protected it from "global-warming lawsuits brought by California coastal communities against fossil-fuel companies."In 2018, Peabody announced it plans to invest $10 million in a partnership with London-based Arq, a company that is advancing technology to convert coal into oil products.On December 3 Peabody completed its purchase of the Shoal Creek Seaborne metallurgical coal mine from private coal producer Drummond Company, Inc. for $387 million.In 2021, U.S. coal industry veteran Jim Grech was appointed the new president and CEO of Peabody effective June 1.