In the fourth quarter, Peabody completed the major acquisition of Macarthur Coal and finalized Macarthur's delisting from the Australian Stock Exchange.

Mr Boyce said that "Peabody acquired Macarthur Coal to significantly expand our Australian metallurgical coal production base and add a large portfolio of development projects. We are aggressively advancing these initiatives and at first look, the resource base is better, the team more highly motivated, and the project opportunities more robust than anticipated."

Peabody is targeting 2012 volumes of 4 to 5 million tons from the Coppabella and Moorvale mines, based on attributable ownership at 73 percent. The Middlemount joint venture will be accounted for using the equity method, and therefore will not be included in reported volumes, revenues or costs.

The company is implementing a comprehensive near-term plan to improve the cost structure, productivity, and sustainability of the acquired operations, raising performance to Peabody standards and industry best practices. Key components of the 2012 plan include: 1) A major upgrade to the Coppabella Mine to improve the mine plan and correct a significant overburden removal deficiency; 2) Increased dragline and equipment utilization and productivity at the Coppabella and Moorvale mines; 3) Major repairs to production equipment that had been deferred under prior management; and 4) Improved coal marketing activities to strengthen the committed position and realize commercial synergies across all operations.

These items will impact financial results throughout 2012. The company believes that taking these early actions will provide a solid foundation for higher productivity, lower costs and improved financial performance in 2013 and beyond. The company's target to have the acquisition be accretive after the first year remains.

In addition to the improved operating and financial results expected beyond 2012 for the existing operations, on the project side, positive developments are also expected to improve 2013 and 2014 performance expectations.

1. Peabody has approved the acceleration of development for the new Codrilla Mine, which is now expected to produce first coal in late 2013 and grow volumes to approximately 3.5 million tons (2.6 million tons attributable) by 2014.

2. Middlemount has completed a large new rail spur and is ramping up operations. Shipments are expected to reach 4.4 million tons (2.2 million tons attributable) and volumes will be sent through Abbot Point via the just-completed "Northern Missing Link" connecting the Goonyella and Newlands rail systems.