1064728--2/28/2007--PEABODY_ENERGY

related topics

{gas, price, oil}

{customer, product, revenue}

{cost, regulation, environmental}

{cost, operation, labor}

{provision, law, control}

{debt, indebtedness, cash}

{cost, contract, operation}

{operation, international, foreign}

{personnel, key, retain}

{stock, price, share}

The loss of, or significant reduction in, purchases by our largest customers could adversely affect our revenues. If transportation for our coal becomes unavailable or uneconomic for our customers, our ability to sell coal could suffer. Risks inherent to mining could increase the cost of operating our business. Our mining operations are extensively regulated, which imposes significant costs on us, and future regulations and developments could increase those costs or limit our ability to produce coal. Our expenditures for postretirement benefit and pension obligations could be materially higher than we have predicted if our underlying assumptions prove to be incorrect. A decrease in the availability or increase in costs of key supplies, capital equipment or commodities such as diesel fuel, steel, explosives and tires could decrease our anticipated profitability. Our future success depends upon our ability to continue acquiring and developing coal reserves that are economically recoverable. A decrease in the price or our production of metallurgical coal could decrease our anticipated profitability. Our financial performance could be adversely affected by our debt. The covenants in our senior unsecured credit facility and the indentures governing our senior notes and convertible debentures impose restrictions that may limit our operating and financial flexibility. Our operations could be adversely affected if we fail to appropriately secure our obligations. The conversion of our outstanding convertible debentures may result in the dilution of the ownership interests of our existing stockholders. Provisions of our convertible debentures could discourage an acquisition of us by a third-party. An inability of contract miner or brokerage sources to fulfill the delivery terms of their contracts with us could reduce our profitability. If the coal industry experiences overcapacity in the future, our profitability could be impaired. We could be negatively affected if we fail to maintain satisfactory labor relations. Our ability to operate our company effectively could be impaired if we lose key personnel or fail to attract qualified personnel. Our ability to collect payments from our customers could be impaired if their creditworthiness deteriorates. Our certificate of incorporation and by-laws include provisions that may discourage a takeover attempt. The extent to which we are able to successfully integrate the newly acquired Excel operations and successfully complete the development of the new mine sites acquired from Excel will have a bearing on our future financial results. Growth in our global operations increases our risks unique to international mining and trading operations.

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1064728--2/28/2007--PEABODY_ENERGY_CORP