8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 31, 2007

Peabody Energy Corporation

(Exact name of registrant as specified in its charter)

Delaware	1-16463	13-4004153
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
701 Market Street St. Louis, Missouri		63101-1826
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (314) 342-3400

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.01. Completion of Acquisition or Disposition of Assets

     On October 31, 2007, Peabody Energy Corporation (“Peabody” or the “Company”) completed the spin-off of its wholly-owned subsidiary Patriot Coal Corporation (“Patriot”), which was accomplished through a special dividend of all outstanding shares of Patriot to Peabody shareholders. Holders of Peabody common stock of record at the close of business on October 22, 2007 received a dividend of one share of Patriot common stock for every ten shares of Peabody common stock that they owned. As a result of the spin-off, Patriot is no longer owned by Peabody and is now an independent public company. Shares of Patriot common stock began trading on a when-issued basis on the New York Stock Exchange (“NYSE”) on October 18, 2007, and began trading “regular way” on the NYSE on November 1, 2007 under the symbol “PCX”.

     In connection with the spin-off, the Company has entered into definitive agreements with Patriot that, among other things, set forth the terms and conditions of the spin-off and provide a framework for the Company’s relationship with Patriot after the spin-off. A summary of certain important terms of these definitive agreements can be found under Item 1.01 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 25, 2007 (the “October 25 Form 8-K”) and is incorporated herein by reference. Further information concerning the spin-off and related matters is contained in the Information Statement, dated October 22, 2007, filed as Exhibit 99.1 to Patriot’s Current Report on Form 8-K, filed with the SEC on October 24, 2007. Peabody is not aware of any material relationship, other than in respect of the spin-off, between Patriot and Peabody, or any of Peabody’s affiliates, or any director or officer of Peabody, or any associate of any such director or officer, except as disclosed herein or in the October 25 Form 8-K.

     A copy of the press release relating to our announcement of the completion of the spin-off is attached hereto as Exhibit 99.1.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

     On October 31, 2007, Irl F. Engelhardt’s resignation from the Board of Directors of Peabody became effective and Mr. Engelhardt stepped down form his position as a director. Contemporaneously with his stepping down, Mr. Engelhardt joined the Board of Directors of Patriot and assumed the position of Chairman of Patriot’s Board of Directors.

     On October 31, 2007, Richard M. Whiting elected to resign from his position as Executive Vice President and Chief Marketing Officer of Peabody in connection with the spin-off of Patriot from Peabody. Mr. Whiting assumed the position of President and Chief Executive Officer of Patriot.

Item 9.01. Financial Statements and Exhibits

(b) Pro Forma Financial Information

     The Unaudited Pro Forma Condensed Consolidated Financial Statements of Peabody (the “Pro Forma Financial Statements”) reflecting the spin-off of Patriot from Peabody described under Item 2.01 above are attached as Exhibit 99.2 hereto and are incorporated herein by reference. The Pro Forma Financial Statements include the following information:

A. Unaudited Pro Forma Condensed Consolidated Statements of Earnings for the Years Ended December 31, 2004, 2005 and 2006 and for the Nine Months Ended September 30, 2007

B. Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2007

3

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Press release issued by Peabody Energy Corporation, dated November 1, 2007.
99.2	Unaudited Pro Forma Condensed Financial Statements of Peabody

4

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PEABODY ENERGY CORPORATION
By:	/s/ Richard A. Navarre
	Name:	Richard A. Navarre
	Title:	Chief Financial Officer and Executive Vice President of Corporate Development

Dated: November 6, 2007

5

Exhibit Index

Exhibit No.	Description of Exhibit
99.1	Press release issued by Peabody Energy Corporation, dated November 1, 2007.
99.2	Unaudited Pro Forma Condensed Financial Statements of Peabody

EX-99.1

Exhibit 99.1

	PEABODY ENERGY
	News Release
	CONTACT:
	Vic Svec (314) 342-7768

FOR IMMEDIATE RELEASE
November 1, 2007

PEABODY ENERGY COMPLETES SPIN-OFF
OF PATRIOT COAL CORPORATION

ST. LOUIS, Nov. 1 — Peabody Energy (NYSE: BTU) today announced that it has completed the spin-off of coal assets and operations in West Virginia and Kentucky to BTU shareholders. The spin-off was accomplished on Oct. 31, 2007, through a special dividend of all outstanding shares of Patriot Coal Corporation, at a ratio of one share of Patriot Coal stock for every
10 shares of Peabody held. Patriot trades on the New York Stock Exchange under the ticker symbol PCX and has 26.6 million shares outstanding.

     “Completing this spin-off was a key element in transforming our business portfolio,” said Peabody Chairman and Chief Executive Officer Gregory H. Boyce. “Peabody and Patriot will both benefit by a distinct business focus and growth opportunities to build shareholder value. Peabody remains focused on high-margin, high-growth markets by expanding globally and building on our leading U.S. position in the Powder River Basin, Colorado and the Midwest.”

     Peabody Energy is the world’s largest private-sector coal company. Its coal
products fuel approximately 10 percent of all U.S. electricity generation and more than 2 percent of worldwide electricity.

-End-

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that may be beyond our control and may cause our actual future results to differ materially from expectations. We do not undertake to update our forward-looking statements. Factors that could affect our results include, but are not limited to: the outcome of our evaluation of strategic alternatives for our West Virginia and Kentucky subsidiaries; the outcome of commercial negotiations involving sales contracts or other transactions; customer performance and credit risk; supplier performance, and the availability and cost of key equipment and commodities; availability and costs of transportation; geologic, equipment and operational risks associated with mining; our ability to replace coal reserves; labor availability and relations; the effects of mergers, acquisitions and divestitures; legislative and regulatory developments; the outcome of pending or future litigation; coal and power market conditions; weather patterns affecting energy demand; availability and costs of competing energy resources; worldwide economic and political conditions; global currency exchange and interest rate fluctuation; wars and acts of terrorism or sabotage; political risks, including expropriation; and other risks detailed in the company’s reports filed with the Securities and Exchange Commission.

EX-99.2

Exhibit 99.2

PEABODY ENERGY CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

     The following unaudited pro forma condensed consolidated financial information is based on the historical financial statements of Peabody Energy Corporation and its subsidiaries (Peabody), including certain pro forma adjustments, and has been prepared to illustrate the pro forma effect of the spin-off of Patriot Coal Corporation (Patriot). The spin-off of Patriot was completed on October 31, 2007. Prior to the spin-off, Patriot was a component of our Eastern U.S. Mining Operations business segment, with operations and coal reserves in Appalachia and the Illinois Basin. Patriot operations are engaged in the mining, preparation and sale of steam coal, sold primarily to electric utilities, as well as the mining of metallurgical coal.

     The unaudited pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2007 and for the years ended December 31, 2006, 2005 and 2004 assume that the spin-off of Patriot occurred as of the beginning of the periods presented. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2007 is presented as if the spin-off had occurred as of that date. The unaudited pro forma condensed consolidated financial information has been prepared based upon available information and certain assumptions and estimates that Peabody believes are reasonable. The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the financial position or results of operations that might have occurred had the spin-off occurred as of the dates stated above. The pro forma adjustments are described in the notes hereto.

     The unaudited pro forma condensed consolidated financial information should be read in conjunction with the audited financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in Peabody’s Annual Report an Form 10-K for the year ended December 31, 2006, as amended by the Form 10-K/A filed September 10, 2007, and unaudited interim financial statements and related MD&A included in the respective March 31, 2007 and June 30, 2007 Quarterly Reports on Form 10-Q.

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007

	Peabody			Patriot			Pro Forma			Peabody
	Historical			Historical (a)			Adjustments			Pro Forma
	(Dollars in thousands, except share and per share data)
Revenues
Sales	$	4,022,705		$	816,342		$	—		$	3,206,363
Other revenues		158,134			2,843			—			155,291
Total revenues		4,180,839			819,185			—			3,361,654
Costs and Expenses
Operating costs and expenses		3,434,869			847,484			46,688	(b)		2,635,085
								1,012	(c)
Depreciation, depletion and amortization		324,417			64,048			1,493	(d)		261,862
Asset retirement obligation expense		27,596			12,936			—			14,660
Selling and administrative expenses		129,328			32,342			32,342	(e)		129,328
Other operating income:
Net gain on disposal or exchange of assets		(158,975	)		(82,696	)		—			(76,279	)
Income from equity affiliates		(9,443	)		(16	)		—			(9,427	)
Operating Profit (Loss)		433,047			(54,913	)		(81,535	)		406,425
Interest expense		176,686			6,504			4,541	(l)		174,723
Interest income		(13,984	)		(8,293	)		—			(5,691	)
Income (Loss) Before Income Taxes and Minority Interests		270,345			(53,124	)		(86,076	)		237,393
Income tax provision		37,736			—			(2,643	)		35,093
Minority interests		4,139			4,092			—			47
Income (Loss) From Continuing Operations	$	228,470		$	(57,216	)	$	(83,433	)	$	202,253
Earnings Per Share from Continuing Operations
Basic	$	0.87								$	0.77
Diluted	$	0.85								$	0.75
Weighted Average Shares Outstanding
Basic		263,463,822									263,663,822
Effect of dilutive securities		5,172,597									5,172,597
Diluted		268,636,419									268,836,419

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2007

	Peabody			Patriot			Pro Forma			Peabody
	Historical			Historical (a)			Adjustments			Pro Forma
	(Dollars in thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	216,314		$	7,176		$	(19,407)	(f)	$	159,731
								(30,000)	(g)
Accounts receivable, net of allowance for doubtful accounts of $11,735		277,442			60,057			(54,935)	(h)		162,450
Inventories		267,194			32,684			—			234,510
Assets from coal trading activities		706,017			—			—			706,017
Deferred income taxes		106,967			—			(30,000)	(i)		76,967
Other current assets		208,158			6,063			—			202,095
Total current assets		1,782,092			105,980			(134,342	)		1,541,770
Property, plant, equipment and mine development, net		7,832,337			860,218			1,196	(k)		6,973,315
Goodwill		242,406			—			—			242,406
Investments and other assets		597,666			185,324			19,407	(f)		454,653
								22,904	(d)
Total assets	$	10,454,501		$	1,151,522		$	(90,835	)	$	9,212,144
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	63,174		$	—		$	—		$	63,174
Liabilities from coal trading activities		662,255			—			—			662,255
Accounts payable and accrued expenses		1,177,015			217,926			55,361	(b)		1,018,991
								4,541	(l)
Total current liabilities		1,902,444			217,926			59,902			1,744,420
Long-term debt, less current maturities		3,152,967			80,266			62,000	(h)		3,134,701
Deferred income taxes		248,643			—			210,000	(i)		388,643
								(70,000)	(j)
Asset retirement obligations		438,956			133,402			4,564	(k)		310,118
Workers’ compensation obligations		234,366			212,596			—			21,770
Accrued postretirement benefit costs		1,373,292			1,164,295			559,759	(b)		768,756
Other noncurrent liabilities		431,299			34,076			200,000	(j)		597,223
Total liabilities		7,781,967			1,842,561			1,026,225			6,965,631
Minority interests		29,662			13,786			—			15,876
Stockholders’ equity
Preferred Stock — $0.01 per share par value; 10,000,000 shares authorized, no shares issued or outstanding		—			—			—			—
Series A Junior Participating Preferred Stock — 1,500,000 shares authorized, no shares issued or outstanding		—			—			—			—
Perpetual Preferred Stock — 750,000 shares authorized, no shares issued or outstanding		—			—			—			—
Series Common Stock — $0.01 per share par value; 40,000,000 shares authorized, no shares issued or outstanding		—			—			—			—
Common Stock — $0.01 per share par value; 800,000,000 shares authorized, 268,214,559 shares issued and 265,505,673 shares outstanding		2,682			—			—			2,682
Additional paid-in capital		1,617,794			—			20,000	(j)		1,637,794
Retained earnings		1,296,757			(411,275	)		(506,893)	(b)		679,199
								22,904	(d)
								(30,000)	(g)
								(116,935)	(h)
								(240,000)	(i)
								(150,000)	(j)
								(3,368)	(k)
								(4,541)	(l)
Accumulated other comprehensive loss (gain)		(170,598	)		(293,550	)		(108,227)	(b)		14,725
Treasury shares, at cost: 2,708,886 shares		(103,763	)		—			—			(103,763	)
Total stockholders’ equity		2,642,872			(704,825	)		(1,117,060	)		2,230,637
Total liabilities and stockholders’ equity	$	10,454,501		$	1,151,522		$	(90,835	)	$	9,212,144

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2006

	Peabody			Patriot			Pro Forma			Peabody
	Historical			Historical (a)			Adjustments			Pro Forma
	(Dollars in thousands, except share and per share data)
Revenues
Sales	$	5,144,925		$	1,142,521		$	—		$	4,002,404
Other revenues		111,390			5,398			—			105,992
Total revenues		5,256,315			1,147,919			—			4,108,396
Costs and Expenses
Operating costs and expenses		4,155,984			1,051,932			46,100	(b)		3,153,849
								3,697	(c)
Depreciation, depletion and amortization		377,210			86,458			3,489	(d)		294,241
Asset retirement obligation expense		40,112			24,282			—			15,830
Selling and administrative expenses		175,941			47,909			47,909	(e)		175,941
Other operating income:
Net gain on disposal or exchange of assets		(132,162	)		(78,631	)		—			(53,531	)
Income from equity affiliates		(23,852	)		(60	)		—			(23,792	)
Operating Profit		663,082			16,029			(101,195	)		545,858
Interest expense		143,450			11,419			5,637	(l)		137,668
Early debt extinguishment costs		1,396			—			—			1,396
Interest income		(12,726	)		(1,417	)		—			(11,309	)
Income Before Income Taxes and Minority Interests		530,962			6,027			(106,832	)		418,103
Income tax provision (benefit)		(81,515	)		8,350			(21,384	)		(111,249	)
Minority interests		11,780			11,169			—			611
Income (Loss) From Continuing Operations	$	600,697		$	(13,492	)	$	(85,448	)	$	528,741
Earnings Per Share from Continuing Operations
Basic	$	2.28								$	2.01
Diluted	$	2.23								$	1.96
Weighted Average Shares Outstanding
Basic		263,419,344									263,619,344
Effect of dilutive securities		5,746,661									5,746,661
Diluted		269,166,005									269,366,005

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2005

	Peabody			Patriot			Pro Forma			Peabody
	Historical			Historical (a)			Adjustments			Pro Forma
	(Dollars in thousands, except share and per share data)
Revenues
Sales	$	4,545,323		$	960,901		$	—		$	3,584,422
Other revenues		99,130			17,376			—			81,754
Total revenues		4,644,453			978,277			—			3,666,176
Costs and Expenses
Operating costs and expenses		3,715,836			869,163			44,885	(b)		2,896,041
								4,483	(c)
Depreciation, depletion and amortization		316,114			65,972			3,646	(d)		253,788
Asset retirement obligation expense		35,901			15,572			—			20,329
Selling and administrative expenses		189,802			57,123			57,123	(e)		189,802
Other operating income:
Net gain on disposal or exchange of assets		(101,487	)		(57,042	)		—			(44,445	)
Income from equity affiliates		(30,096	)		(15,578	)		—			(14,518	)
Operating Profit		518,383			43,067			(110,137	)		365,179
Interest expense		102,939			9,833			4,960	(l)		98,066
Interest income		(10,641	)		(1,553	)		—			(9,088	)
Income Before Income Taxes and Minority Interests		426,085			34,787			(115,097	)		276,201
Income tax provision		960			—			35,398			36,358
Minority interests		2,472			—			—			2,472
Income From Continuing Operations	$	422,653		$	34,787		$	(150,495	)	$	237,371
Earnings Per Share from Continuing Operations
Basic	$	1.62								$	0.91
Diluted	$	1.58								$	0.89
Weighted Average Shares Outstanding
Basic		261,519,424									261,719,424
Effect of dilutive securities		6,494,052									6,494,052
Diluted		268,013,476									268,213,476

PEABODY ENERGY CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2004

	Peabody			Patriot			Pro Forma			Peabody
	Historical			Historical (a)			Adjustments			Pro Forma
	(Dollars in thousands, except share and per share data)
Revenues
Sales	$	3,545,027		$	812,055		$	—		$	2,732,972
Other revenues		86,555			4,369			—			82,186
Total revenues		3,631,582			816,424			—			2,815,158
Costs and Expenses
Operating costs and expenses		2,965,541			740,816			26,815	(b)		2,255,553
								4,013	(c)
Depreciation, depletion and amortization		270,159			62,580			4,051	(d)		211,630
Asset retirement obligation expense		42,387			27,262			—			15,125
Selling and administrative expenses		143,025			58,491			58,491	(e)		143,025
Other operating income:
Net gain on disposal or exchange of assets		(23,829	)		(5,764	)		—			(18,065	)
Income from equity affiliates		(12,399	)		(12,335	)		—			(64	)
Operating Profit		246,698			(54,626	)		(93,370	)		207,954
Interest expense		96,793			12,701			4,960	(l)		89,052
Early debt extinguishment costs		1,751			—			—			1,751
Interest income		(4,917	)		(918	)		—			(3,999	)
Income (Loss) Before Income Taxes and Minority Interests		153,071			(66,409	)		(98,330	)		121,150
Income tax benefit		(26,437	)		—			2,388			(24,049	)
Minority interests		1,282			275			—			1,007
Income (Loss) From Continuing Operations	$	178,226		$	(66,684	)	$	(100,718	)	$	144,192
Earnings Per Share from Continuing Operations
Basic	$	0.72								$	0.58
Diluted	$	0.70								$	0.57
Weighted Average Shares Outstanding
Basic		248,732,744									248,932,744
Effect of dilutive securities		6,079,888									6,079,888
Diluted		254,812,632									255,012,632

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a)	Reflects the removal of Patriot Coal Corporation’s historical results and financial position from the ongoing operations of the Company.
(b)	Reflects the Company’s agreement to assume primary responsibility for certain of Patriot’s retiree healthcare liabilities. These liabilities include certain obligations under the Coal Act for which the Company and Patriot are jointly and severally liable, obligations under the 2007 NBCWA for which Patriot is secondarily liable and obligations for certain active, vested Patriot employees.
(c)	Reflects historical Patriot expense related to pension benefit obligations that will be retained by the Company.
(d)	Reflects adjustment for retention by the Company, and related amortization, of a purchased contract right.
(e)	Reflects adjustment for general and administrative costs related to the Company that were previously allocated to Patriot.
(f)	Reflects monetization by the Company of a long-term receivable for an excise tax refund due to Patriot. The Company will retain the receivable in “Investments and other assets”.
(g)	Reflects the required cash contribution from the Company for Patriot’s working capital in accordance with the Separation Agreement.
(h)	Reflects the distribution of intercompany balances between the Company and Patriot.
(i)	Reflects the allocation of deferred income taxes attributable to Patriot operations.
(j)	Reflects the estimated loss related to spin-off transaction costs and one-time charges of $150 million, net of income taxes.
(k)	Reflects the retention of certain reclamation-related equipment and asset retirement obligations by the Company.
(l)	Reflects adjustment to interest expense on inter-company debt that was allocated to Patriot in its historical results.