Peabody also expects to grant the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date the notes are first issued, up to an additional $25,000,000 principal amount of notes.

The notes will be senior, unsecured obligations of Peabody, will accrue interest payable semi-annually in arrears and will mature on June 1, 2031, unless earlier repurchased, redeemed or converted. Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Peabody will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at Peabody's election. Peabody expects that the reference price used to calculate the initial conversion price for the notes will be the U.S. composite volume weighted average price of Peabody's common stock from 9:30 a.m. through 4:00 p.m. Eastern Daylight Time on the date of pricing.

Peabody may not redeem the notes prior to June 5, 2029, except in the event of a cleanup redemption (as defined below). The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Peabody's option at any time, and from time to time, on or after June 5, 2029 and on or before the 31st scheduled trading day immediately before the maturity date, if the last reported sale price per share of Peabody's common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Peabody may redeem for cash all, but not less than all, of the notes at any time if the amount of the notes that remains outstanding is less than 15% of the aggregate principal amount of the notes initially issued under the indenture and certain other conditions are satisfied (a "cleanup redemption"). The redemption price will be equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If certain corporate events that constitute a "fundamental change" occur, then, subject to a limited exception, noteholders may require Peabody to repurchase their notes for cash. The repurchase price will be equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.

Peabody intends to use the net proceeds from the offering of the notes to fund the cost of entering into capped call transactions (as described below) and, together with available cash, to repurchase a portion of Peabody's outstanding 3.250% Convertible Senior Notes due 2028 (the "2028 Notes"). Peabody intends to use the remainder of the net proceeds, if any, for general corporate purposes.