-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LUi26yYA1739gqGp8zd1M8han0Uhda9CmexNZF7t0YNH4KjA8GNhEGTQUQLQ8DXH 3gHcqNo5kgu3P4oKUgxLdw== 0000950137-05-007996.txt : 20050628 0000950137-05-007996.hdr.sgml : 20050628 20050628102752 ACCESSION NUMBER: 0000950137-05-007996 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050628 DATE AS OF CHANGE: 20050628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEABODY ENERGY CORP CENTRAL INDEX KEY: 0001064728 STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE SURFACE MINING [1221] IRS NUMBER: 134004153 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16463 FILM NUMBER: 05919099 BUSINESS ADDRESS: STREET 1: 701 MARKET ST CITY: ST LOUIS STATE: MO ZIP: 63101-1826 BUSINESS PHONE: 3143423400 MAIL ADDRESS: STREET 1: 701 MARKET ST CITY: ST LOUIS STATE: MO ZIP: 63101-1826 FORMER COMPANY: FORMER CONFORMED NAME: P&L COAL HOLDINGS CORP DATE OF NAME CHANGE: 19980623 11-K 1 c96255e11vk.txt FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-16463 --------------------------------------------------------- Full title of the plan and the address of the plan, if different from that of the issuer named below: PEABODY HOLDING COMPANY, INC. EMPLOYEE RETIREMENT ACCOUNT - -------------------------------------------------------------------------------- Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: PEABODY ENERGY CORPORATION - -------------------------------------------------------------------------------- 701 MARKET STREET, ST. LOUIS, MISSOURI 63101-1826 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm...........................1 Financial Statements Statements of Net Assets Available for Benefits - December 31, 2004 and 2003...................................................2 Statements of Changes in Net Assets Available for Benefits - Years Ended December 31, 2004 and 2003.......................................3 Notes to Financial Statements................................................4 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets (Held at End of Year)...................11 Signatures.......................................................................13 Exhibit Index....................................................................14 Exhibit 23 - Consent of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm The Plan Administrator Defined Contribution Administrative Committee We have audited the accompanying statements of net assets available for benefits of Peabody Holding Company, Inc. Employee Retirement Account as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ ERNST & YOUNG LLP ---------------------------------- Ernst & Young LLP St. Louis, Missouri June 2, 2005 1 Peabody Holding Company, Inc. Employee Retirement Account Statements of Net Assets Available for Benefits (Dollars in thousands)
DECEMBER 31 2004 2003 ------------ ------------ ASSETS Investments, at fair value: Investments in mutual funds $ 187,019 $ 152,788 Investment in common/collective trust 96,035 86,725 Investment in Peabody Energy Stock Fund 3,909 863 Participant notes receivable 10,414 8,337 ------------ ------------ Total investments 297,377 248,713 Receivables: Employer contributions 3,602 3,463 ------------ ------------ Net assets available for benefits $ 300,979 $ 252,176 ============ ============
See accompanying notes. 2 Peabody Holding Company, Inc. Employee Retirement Account Statements of Changes in Net Assets Available for Benefits (Dollars in thousands)
YEAR ENDED DECEMBER 31 2004 2003 ------------ ------------ ADDITIONS Interest and dividends $ 7,450 $ 6,162 Net realized and unrealized appreciation of investments 18,158 31,617 ------------ ------------ Net investment income 25,608 37,779 ------------ ------------ Contributions: Employee 15,545 13,554 Employer 10,368 9,475 Rollover 12,707 435 ------------ ------------ Total contributions 38,620 23,464 ------------ ------------ Transfers from other plans 920 2 ------------ ------------ Total additions 65,148 61,245 ------------ ------------ DEDUCTIONS Withdrawals by participants (16,321) (14,951) Administrative expenses (24) (13) ------------ ------------ Total deductions (16,345) (14,964) ------------ ------------ Net increase in net assets available for benefits 48,803 46,281 Net assets available for benefits at beginning of year 252,176 205,895 ------------ ------------ Net assets available for benefits at end of year $ 300,979 $ 252,176 ============ ============
See accompanying notes. 3 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements Years Ended December 31, 2004 and 2003 1. DESCRIPTION OF THE PLAN The following description of the Peabody Holding Company, Inc. (the "Company") Employee Retirement Account (the "Plan") provides only general information. Participants should refer to the plan documents for a more complete description of the Plan's provisions. The Company is a wholly-owned subsidiary of Peabody Energy Corporation ("Peabody"). GENERAL The Plan is a defined contribution plan, and participation in the Plan is voluntary. All salaried employees of the Company and certain of its participating subsidiary and affiliated companies (the "Employer") are eligible for participation on the date of their employment or at any time afterward. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On April 15, 2004, Peabody purchased all of the equity interest in the Twentymile Coal Company ("Twentymile") from RAG Coal International AG. As part of the purchase agreement, all active employees of Twentymile, as defined in the agreement, were eligible to participate in the Plan, and those employees who were participating in the RAG American Coal Savings Plan and Trust were eligible to roll over their fund balances into the Plan. In 2004, Twentymile participants rolled over approximately $12.2 million in fund balances into the Plan. The Plan allows participants to invest in a selection of mutual funds, a common/collective trust, and the Peabody Energy Stock Fund. All investments in the Plan are participant-directed. CONTRIBUTIONS Each year, participants may contribute any whole percentage from 2% to 50% of pre-tax or after-tax base compensation, as defined in the Plan. Participants may also contribute distributions from other qualified defined benefit or defined contribution plans. In the calendar year that a participant is age 50 or older and each year thereafter, certain participants meeting additional specific criteria are permitted to make catch-up contributions to the Plan. These participants are able to contribute amounts in excess of the maximum otherwise permitted by the Plan, subject to certain limitations. 4 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) For participants other than those who are employed by Powder River Coal Company or Twentymile, the Employer makes matching contributions equal to 100% of the first 3% of base compensation and 75% of the next 4% of base compensation that a participant contributes to the Plan. For participants who are employed by Powder River Coal Company and Twentymile, the Employer makes matching contributions equal to 50% of the first 6% of base compensation that a participant contributes to the Plan. Participants direct the investment of employee and employer matching contributions into various investment options offered by the Plan. All contributions are subject to certain limitations as defined by the Plan and the Internal Revenue Service ("IRS"). Peabody's Board of Directors has approved desired minimum and maximum performance targets that require the Employer to pay a performance contribution between 0% and 4% of base compensation into the account of each active, eligible employee as of the end of the fiscal year, based upon Peabody's level of achievement of the approved target. Employees of Powder River Coal Company and Twentymile are not eligible for the performance contribution. If Peabody does not meet the minimum performance targets set by the Board of Directors for a fiscal year, the Board of Directors may authorize the Employer to contribute a discretionary amount to the Plan. If Peabody exceeds the maximum performance targets set by the Board of Directors for a fiscal year, the Board of Directors, at its discretion, may authorize the Employer to contribute up to an additional 2% of base compensation to the Plan. At December 31, 2004, a $3.6 million receivable was recorded for a performance contribution of 4% of eligible employees' salaries related to the 2004 plan year. At December 31, 2003, a $3.5 million receivable was recorded for a performance contribution of 4% of eligible employees' salaries related to the 2003 plan year. FORFEITED ACCOUNTS Employer contributions are reduced by forfeitures of non-vested amounts. The forfeiture credits, net of holding gains or losses, amounted to $121,420 and $245,245 for the years ended December 31, 2004 and 2003, respectively. As of December 31, 2004 and 2003, the forfeiture credits that were available for future use amounted to $246,101 and $109,762, respectively. 5 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT LOANS Participants may borrow up to 50% of their vested account balance from their fund accounts, subject to a minimum of $1,000 and a maximum of $50,000. The loans are secured by the balance in the participant's account and bear interest at the prime interest rate as published in The Wall Street Journal on the first business day of the month in which the loan was made, plus 1%. Principal and interest are paid ratably through payroll deductions. A maximum of two loans may be outstanding at any time. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, the Employer's contributions and plan earnings. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. PAYMENT OF BENEFITS Participants are eligible for distributions of their vested account balance upon termination of employment. Participants are eligible for distribution of their entire account balance at death, disability or termination after age 62. Generally, participants may elect to receive their distribution as a lump sum or annual installment. A beneficiary distribution is available as a lump sum only. Participants who have attained the age of 59 1/2 have the right to receive a partial or complete distribution of their vested account balance upon request, without penalty. Withdrawals in cases of hardship, as defined in the Plan, are also permitted. Other withdrawals of after-tax contributions are also available as defined in the Plan. VESTING Participants are immediately vested in their contributions and actual earnings thereon. Excluding Twentymile participants, vesting in Employer matching contributions occurs ratably based on years of continuous service (25% per year after two years of service with 100% vesting after five years), and automatically vests completely when the participant attains the age of 62. Employer performance contributions and discretionary contributions, if any, are 100% vested immediately. For Twentymile employees, all contributions and earnings are immediately vested. 6 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PLAN TERMINATION The Plan is voluntary on the part of the Employer. The Employer may terminate the Plan in whole or in part subject to the provisions of ERISA. Upon termination or complete discontinuance of all contributions to the Plan, participants' accounts become fully vested. Currently, the Employer has no intention to terminate the Plan. ADMINISTRATIVE EXPENSES All significant administrative expenses of the Plan, including recordkeeping and trustee fees, are paid by the Employer. Participants are required to pay their own loan fees. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The financial statements of the Plan are prepared under the accrual method of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. VALUATION OF INVESTMENTS AND INCOME RECOGNITION The Plan's investments are stated at fair value. Shares of mutual funds are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Units in the common/collective trust are valued at net asset value at year-end. The stock fund is valued at year-end unit closing price (comprised of the year-end market price plus any uninvested cash position). Participant loans are valued at cost, which approximates market value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded when earned. Dividends are recorded on the ex-dividend date. Capital gain distributions are included in dividend income. 7 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) PAYMENT OF BENEFITS Benefits are recorded when paid. 3. RELATED PARTY TRANSACTIONS The Plan invests in shares of mutual funds managed by an affiliate of its trustee, Vanguard Fiduciary Trust Company, a party-in-interest with respect to the Plan. These transactions are covered by an exemption from the "prohibited transaction" provisions of ERISA and the Internal Revenue Code of 1986 (the "Code"), as amended. The Plan also invests in Peabody stock, through the Peabody Energy Stock Fund, which is a permitted party-in-interest transaction. 4. INVESTMENTS The Plan's investments, including those purchased, sold or held during the year, appreciated in fair value as determined by quoted market prices as follows:
2004 2003 ------------ ------------ (Dollars in thousands) Mutual funds $ 16,737 $ 31,339 Peabody Energy Stock Fund 1,421 278 ------------ ------------ $ 18,158 $ 31,617 ============ ============
Investments representing 5% or more of the fair value of the Plan's net assets at December 31 were as follows:
2004 2003 ------------ ------------ (Dollars in thousands) Mutual funds: Vanguard 500 Index Fund $ 52,158 $ 47,766 Vanguard PRIMECAP Fund 27,479 21,251 Common/collective trust: Vanguard Retirement Savings Trust 96,035 86,725
8 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 5. INCOME TAX STATUS The Plan received a determination letter from the IRS dated February 9, 2004, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan was amended subsequent to the IRS determination letter. The Plan's administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended, is qualified and the related trust is tax-exempt. The Plan's sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 6. RISKS AND UNCERTAINTIES The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits. 7. SUBSEQUENT EVENTS Effective January 1, 2005, Peabody Investments Corp. became the sponsor of the Plan and the name was changed to the Peabody Investments Corp. Employee Retirement Account. Peabody Investments Corp. is a wholly-owned subsidiary of Peabody Energy Corporation and the parent company of Peabody Holding Company, Inc. Effective March 28, 2005, upon termination of employment, if the value of a participant's account is $1,001 or more but less than or equal to $5,000 (disregarding rollover contributions and related earnings) and, after receiving all required notices, the participant does not affirmatively elect a distribution, the balance of the participant's account will be automatically rolled over by the Plan to an individual retirement account (IRA) and invested in a money market fund. The participant will be responsible for paying all fees and expenses assessed against the automatic rollover IRA. If the value of the participant's account is $1,000 or less and, after receiving all required notices, the participant does not affirmatively elect a distribution, the participant will receive a lump-sum distribution. 9 Peabody Holding Company, Inc. Employee Retirement Account Notes to Financial Statements (continued) 7. SUBSEQUENT EVENTS (CONTINUED) Prior to March 28, 2005, if the value of a participant's account was $5,000 or less (disregarding rollover contributions and related earnings) and, after receiving all required notices the participant did not affirmatively elect a distribution, the participant received a lump-sum distribution as soon as practicable after the participant terminated employment. 10 Supplemental Schedule Peabody Holding Company, Inc. Employee Retirement Account Employer ID #13-2871045 Plan #003 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2004
DESCRIPTION OF IDENTITY OF ISSUE INVESTMENT TYPE CURRENT VALUE - ---------------------------------------- --------------------------------- ------------- AIM Premier Equity Fund* 34,289 shares of mutual fund $ 338,779 Ariel Growth Fund* 63,234 shares of mutual fund 3,362,172 Baron Asset Fund* 11,105 shares of mutual fund 583,228 Delaware Int'l Value Equity Fund* 51,500 shares of mutual fund 868,797 Fidelity Equity-Income II Fund* 13,856 shares of mutual fund 332,693 Fidelity Blue Chip Growth Fund* 53,705 shares of mutual fund 2,240,055 Harbor Capital Appreciation* 56,575 shares of mutual fund 1,621,998 Lazard Small Cap Portfolio* 52,532 shares of mutual fund 989,711 Managers Special Equity Fund* 6,577 shares of mutual fund 594,671 Oppenheimer Quest Value* 13,776 shares of mutual fund 294,540 Sound Shore Fund* 19,494 shares of mutual fund 715,441 T. Rowe Price Mid-Cap Growth* 47,201 shares of mutual fund 2,354,394 T. Rowe Science & Technology Fund* 190,997 shares of mutual fund 3,648,044 T. Rowe Price Small-Cap Stock* 47,150 shares of mutual fund 1,500,313 Vanguard 500 Index Fund* 467,197 shares of mutual fund 52,157,913 Vanguard Explorer Fund* 193,405 shares of mutual fund 14,422,174 Vanguard Extend Mkt Index Fund* 73,378 shares of mutual fund 2,301,137 Vanguard GNMA Fund* 83,081 shares of mutual fund 867,363 Vanguard High-Yield Corp.* 161,446 shares of mutual fund 1,039,714 Vanguard Int'l Growth Fund* 464,253 shares of mutual fund 8,755,819 Vanguard LifeSt Conserv Growth* 633,766 shares of mutual fund 9,671,266 Vanguard LifeSt Growth Fund* 474,538 shares of mutual fund 9,509,748 Vanguard LifeSt Income Fund* 109,526 shares of mutual fund 1,481,889 Vanguard LifeSt Moderate Growth* 461,837 shares of mutual fund 8,271,498 Vanguard LT Bond Index* 142,277 shares of mutual fund 1,681,719 Vanguard LT Treasury Fund* 57,975 shares of mutual fund 667,297 Vanguard PRIMECAP Fund* 441,073 shares of mutual fund 27,478,849
11 Supplemental Schedule Peabody Holding Company, Inc. Employee Retirement Account Employer ID #13-2871045 Plan #003 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (continued) December 31, 2004
DESCRIPTION OF IDENTITY OF ISSUE INVESTMENT TYPE CURRENT VALUE - ---------------------------------------- --------------------------------- ------------- Vanguard REIT Index Fund* 169,601 shares of mutual fund 3,185,114 Vanguard Sm-Cap Index Fund* 90,330 shares of mutual fund 2,422,653 Vanguard Total Bond Mkt Index* 616,324 shares of mutual fund 6,329,645 Vanguard Total Stock Mkt Index* 91,605 shares of mutual fund 2,635,470 Vanguard Windsor Fund* 593,928 shares of mutual fund 10,732,272 Vanguard Windsor II Fund* 128,961 shares of mutual fund 3,962,959 Vanguard Retirement Savings Trust* 96,034,805 shares of common/ collective trust 96,034,805 Peabody Energy Stock Fund* 115,524 units of stock fund 3,909,318 Various participants Participant loans, interest rates from 5% to 10.5%, maturities through December 12, 2014 10,413,787 ------------ $297,377,245 ============
* Parties-in-interest. 12 SIGNATURES Peabody Holding Company, Inc. Employee Retirement Account. Pursuant to the requirements of the Securities Exchange Act of 1934, the plan administrator has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized. Peabody Holding Company, Inc. Employee Retirement Account Date: June 27, 2005 By: /s/ SHARON D. FIEHLER ---------------------------------------- Sharon D. Fiehler Peabody Energy Corporation Executive Vice President, Human Resources & Administration 13 EXHIBIT INDEX The exhibits below are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.
Exhibit No. Description of Exhibit ------- ---------------------- 23 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
14 EX-23 2 c96255exv23.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUTING FIRM EXHIBIT 23 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-70910 and Form S-8 No. 333-109305) pertaining to the Peabody Holding Company, Inc. Employee Retirement Account, Lee Ranch Coal Company Retirement and Savings Plan, Peabody Western-UMWA 401(k) Plan, and Black Beauty Coal Company 401(k) Plan of our reports dated June 2, 2005, with respect to the financial statements and schedules of the Peabody Holding Company, Inc. Employee Retirement Account, Lee Ranch Coal Company Retirement and Savings Plan, Peabody Western-UMWA 401(k) Plan, and Black Beauty Coal Company 401(k) Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2004. /s/ ERNST & YOUNG LLP ----------------------------------- Ernst & Young LLP St. Louis, Missouri June 23, 2005 -----END PRIVACY-ENHANCED MESSAGE-----