Supplemental Guarantor/Non-Guarantor Financial Information

In accordance with the indentures governing the 6.875% Senior Notes due March 2013 (redeemed in the third quarter of 2010), the 5.875% Senior Notes due April 2016 (redeemed in the second quarter of 2011 as discussed in Note 8), the 7.375% Senior Notes due November 2016, the 6.5% Senior Notes due September 2020 and the 7.875% Senior Notes due November 2026 (collectively the Senior Notes), certain wholly-owned U.S. subsidiaries of the Company have fully and unconditionally guaranteed the Senior Notes, on a joint and several basis. Separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented because management believes that such information is not material to the holders of the Senior Notes. The following historical financial statement information is provided for the Guarantor/Non-Guarantor Subsidiaries.

Unaudited Supplemental Condensed Consolidating Statements of Operations



	Three Months Ended September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in millions)
Total revenues	$	—		$	1,229.9		$	850.0		$	(44.0	)	$	2,035.9
Costs and expenses
Operating costs and expenses	(99.3		)	922.9			679.2			(44.0		)	1,458.8
Depreciation, depletion and amortization	—			72.1			41.6			—			113.7
Asset retirement obligation expense	—			11.2			3.8			—			15.0
Selling and administrative expenses	8.0			52.5			10.7			—			71.2
Other operating (income) loss:
Net (gain) loss on disposal or exchange of assets	—			(1.8		)	0.1			—			(1.7		)
(Income) loss from equity affiliates	(252.5		)	2.7			0.5			252.5			3.2
Interest expense	61.0			13.7			1.9			(17.4		)	59.2
Interest income	(4.1		)	(5.2		)	(12.2		)	17.4			(4.1		)
Income from continuing operations before income taxes	286.9			161.8			124.4			(252.5		)	320.6
Income tax provision (benefit)	12.9			48.3			(24.1		)	—			37.1
Income from continuing operations, net of income taxes	274.0			113.5			148.5			(252.5		)	283.5
Gain (loss) from discontinued operations, net of income taxes	0.1			(2.1		)	—			—			(2.0		)
Net income	274.1			111.4			148.5			(252.5		)	281.5
Less: Net income attributable to noncontrolling interests	—			—			7.4			—			7.4
Net income attributable to common stockholders	$	274.1		$	111.4		$	141.1		$	(252.5	)	$	274.1

Unaudited Supplemental Condensed Consolidated Statements of Operations



	Three Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in millions)
Total revenues	$	—		$	1,059.9		$	1,045.3		$	(240.5	)	$	1,864.7
Costs and expenses
Operating costs and expenses	(24.8		)	763.9			744.7			(240.5		)	1,243.3
Depreciation, depletion and amortization	—			76.2			40.5			—			116.7
Asset retirement obligation expense	—			7.1			2.8			—			9.9
Selling and administrative expenses	5.5			47.3			1.3			—			54.1
Other operating (income) loss:
Net (gain) loss on disposal or exchange of assets	—			(7.1		)	0.4			—			(6.7		)
(Income) loss from equity affiliates	(248.5		)	1.3			1.4			248.5			2.7
Interest expense	61.6			13.9			3.7			(17.0		)	62.2
Interest income	(4.0		)	(5.2		)	(10.6		)	17.0			(2.8		)
Income from continuing operations before income taxes	210.2			162.5			261.1			(248.5		)	385.3
Income tax provision (benefit)	(14.8		)	55.1			107.4			—			147.7
Income from continuing operations, net of income taxes	225.0			107.4			153.7			(248.5		)	237.6
Loss from discontinued operations, net of income taxes	(0.9		)	(0.4		)	—			—			(1.3		)
Net income	224.1			107.0			153.7			(248.5		)	236.3
Less: Net income attributable to noncontrolling interests	—			—			12.2			—			12.2
Net income attributable to common stockholders	$	224.1		$	107.0		$	141.5		$	(248.5	)	$	224.1

Unaudited Supplemental Condensed Consolidating Statements of Operations



	Nine Months Ended September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in millions)
Total revenues	$	—		$	3,482.5		$	2,524.5		$	(218.2	)	$	5,788.8
Costs and expenses
Operating costs and expenses	(289.3		)	2,671.2			1,956.0			(218.2		)	4,119.7
Depreciation, depletion and amortization	—			215.6			112.2			—			327.8
Asset retirement obligation expense	—			31.2			12.7			—			43.9
Selling and administrative expenses	24.9			151.0			15.5			—			191.4
Other operating (income) loss:
Net (gain) loss on disposal or exchange of assets	—			(32.3		)	0.9			—			(31.4		)
(Income) loss from equity affiliates	(664.3		)	6.4			2.6			664.3			9.0
Interest expense	162.3			40.6			7.7			(51.3		)	159.3
Interest income	(12.8		)	(15.8		)	(34.4		)	51.3			(11.7		)
Income from continuing operations before income taxes	779.2			414.6			451.3			(664.3		)	980.8
Income tax provision	43.1			109.9			71.7			—			224.7
Income from continuing operations, net of income taxes	736.1			304.7			379.6			(664.3		)	756.1
Loss from discontinued operations, net of income taxes	(0.7		)	(3.0		)	—			—			(3.7		)
Net income	735.4			301.7			379.6			(664.3		)	752.4
Less: Net income attributable to noncontrolling interests	—			—			17.0			—			17.0
Net income attributable to common stockholders	$	735.4		$	301.7		$	362.6		$	(664.3	)	$	735.4

Unaudited Supplemental Condensed Consolidating Statements of Operations



	Nine Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in millions)
Total revenues	$	—		$	3,123.9		$	2,530.5		$	(612.7	)	$	5,041.7
Costs and expenses
Operating costs and expenses	(65.7		)	2,286.2			1,918.9			(612.7		)	3,526.7
Depreciation, depletion and amortization	—			221.3			106.0			—			327.3
Asset retirement obligation expense	—			22.1			8.2			—			30.3
Selling and administrative expenses	23.0			133.8			6.8			—			163.6
Other operating (income) loss:
Net (gain) loss on disposal or exchange of assets	—			(15.6		)	0.2			—			(15.4		)
(Income) loss from equity affiliates	(639.6		)	5.0			4.4			628.1			(2.1		)
Interest expense	168.6			39.4			11.2			(49.1		)	170.1
Interest income	(11.6		)	(16.1		)	(26.8		)	49.1			(5.4		)
Income from continuing operations before income taxes	525.3			447.8			501.6			(628.1		)	846.6
Income tax provision (benefit)	(39.6		)	143.0			153.8			—			257.2
Income from continuing operations, net of income taxes	564.9			304.8			347.8			(628.1		)	589.4
Loss from discontinued operations, net of income taxes	(0.9		)	(1.3		)	—			—			(2.2		)
Net income	564.0			303.5			347.8			(628.1		)	587.2
Less: Net income attributable to noncontrolling interests	—			—			23.2			—			23.2
Net income attributable to common stockholders	$	564.0		$	303.5		$	324.6		$	(628.1	)	$	564.0

Unaudited Supplemental Condensed Consolidating Balance Sheets



	September 30, 2011
	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Reclassifications/ Eliminations			Consolidated
	(Dollars in millions)
Assets
Current assets
Cash and cash equivalents	$	957.9	$	1.0		$	442.7	$	—		$	1,401.6
Accounts receivable, net	4.6		53.8			533.0		—			591.4
Inventories	—		204.3			147.6		—			351.9
Assets from coal trading activities, net	—		16.1			49.9		—			66.0
Deferred income taxes	—		62.6			34.4		(6.1		)	90.9
Other current assets	281.2		77.8			144.2		—			503.2
Total current assets	1,243.7		415.6			1,351.8		(6.1		)	3,005.0
Property, plant, equipment and mine development, net	—		4,801.4			3,006.7		—			7,808.1
Deferred income taxes	3.1		—			—		(3.1		)	—
Investments and other assets	9,845.7		204.5			155.2		(9,326.9		)	878.5
Total assets	$	11,092.5	$	5,421.5		$	4,513.7	$	(9,336.1	)	$	11,691.6

Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	25.0	$	—		$	18.8	$	—		$	43.8
Payables to (receivables from) affiliates, net	2,445.3		(2,621.7		)	176.4		—			—
Liabilities from coal trading activities, net	—		8.8			53.8		—			62.6
Deferred income taxes	6.1		—			—		(6.1		)	—
Accounts payable and accrued expenses	67.5		740.6			526.8		—			1,334.9
Total current liabilities	2,543.9		(1,872.3		)	775.8		(6.1		)	1,441.3
Long-term debt, less current maturities	2,372.0		0.1			86.5		—			2,458.6
Deferred income taxes	—		193.7			309.0		(3.1		)	499.6
Notes payable to (receivables from) affiliates, net	819.1		(823.6		)	4.5		—			—
Other noncurrent liabilities	68.5		1,670.9			230.2		—			1,969.6
Total liabilities	5,803.5		(831.2		)	1,406.0		(9.2		)	6,369.1
Peabody Energy Corporation’s stockholders’ equity	5,289.0		6,252.7			3,074.2		(9,326.9		)	5,289.0
Noncontrolling interests	—		—			33.5		—			33.5
Total stockholders’ equity	5,289.0		6,252.7			3,107.7		(9,326.9		)	5,322.5
Total liabilities and stockholders’ equity	$	11,092.5	$	5,421.5		$	4,513.7	$	(9,336.1	)	$	11,691.6

Supplemental Condensed Consolidating Balance Sheets



	December 31, 2010
	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Reclassifications/ Eliminations			Consolidated
	(Dollars in millions)
Assets
Current assets
Cash and cash equivalents	$	903.8	$	5.2		$	386.2	$	—		$	1,295.2
Accounts receivable, net	2.1		5.5			550.6		—			558.2
Inventories	—		168.0			164.9		—			332.9
Assets from coal trading activities, net	—		23.8			168.7		—			192.5
Deferred income taxes	—		78.6			47.9		(6.1		)	120.4
Other current assets	307.9		30.7			120.4		—			459.0
Total current assets	1,213.8		311.8			1,438.7		(6.1		)	2,958.2
Property, plant, equipment and mine development, net	—		4,732.7			2,693.4		—			7,426.1
Investments and other assets	9,331.0		179.8			99.1		(8,631.1		)	978.8
Total assets	$	10,544.8	$	5,224.3		$	4,231.2	$	(8,637.2	)	$	11,363.1

Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	25.0	$	—		$	18.2	$	—		$	43.2
Payables to (receivables from) affiliates, net	2,225.3		(2,528.3		)	303.0		—			—
Liabilities from coal trading activities, net	—		29.5			152.2		—			181.7
Deferred income taxes	6.1		—			—		(6.1		)	—
Accounts payable and accrued expenses	47.4		777.2			464.2		—			1,288.8
Total current liabilities	2,303.8		(1,721.6		)	937.6		(6.1		)	1,513.7
Long-term debt, less current maturities	2,609.6		0.1			97.1		—			2,706.8
Deferred income taxes	93.2		135.4			311.2		—			539.8
Notes payable to (receivables from) affiliates, net	818.9		(825.3		)	6.4		—			—
Other noncurrent liabilities	58.6		1,652.8			202.1		—			1,913.5
Total liabilities	5,884.1		(758.6		)	1,554.4		(6.1		)	6,673.8
Peabody Energy Corporation’s stockholders’ equity	4,660.7		5,982.9			2,648.2		(8,631.1		)	4,660.7
Noncontrolling interests	—		—			28.6		—			28.6
Total stockholders’ equity	4,660.7		5,982.9			2,676.8		(8,631.1		)	4,689.3
Total liabilities and stockholders’ equity	$	10,544.8	$	5,224.3		$	4,231.2	$	(8,637.2	)	$	11,363.1

Unaudited Supplemental Condensed Consolidating Statements of Cash Flows



	Nine Months Ended September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(Dollars in millions)
Cash Flows From Operating Activities
Net cash provided by continuing operations	$	144.7		$	721.5		$	327.9		$	1,194.1
Net cash used in discontinued operations	(1.6		)	(2.0		)	—			(3.6		)
Net cash provided by operating activities	143.1			719.5			327.9			1,190.5
Cash Flows From Investing Activities
Additions to property, plant, equipment and mine development	—			(218.6		)	(397.6		)	(616.2		)
Federal coal lease expenditures	—			(42.4		)	—			(42.4		)
Investment in Prairie State Energy Campus	—			(29.8		)	—			(29.8		)
Proceeds from disposal of assets	—			12.1			—			12.1
Investment in equity affiliates and joint ventures	—			(2.1		)	(37.7		)	(39.8		)
Proceeds from sales of debt and equity securities	—			—			53.3			53.3
Purchases of debt and equity securities	—			—			(44.1		)	(44.1		)
Purchases of short-term investments	(75.0		)	—			(25.0		)	(100.0		)
Maturity of short-term investments	75.0			—			25.0			100.0
Investment in shares of Macarthur Coal Limited	—			—			(45.5		)	(45.5		)
Other, net	—			(4.4		)	—			(4.4		)
Net cash used in investing activities	—			(285.2		)	(471.6		)	(756.8		)
Cash Flows From Financing Activities
Proceeds from long-term debt	—			—			1.4			1.4
Payments of long-term debt	(236.9		)	—			(11.5		)	(248.4		)
Dividends paid	(69.1		)	—			—			(69.1		)
Repurchase of employee common stock relinquished for tax withholding	(16.1		)	—			—			(16.1		)
Payment of debt issuance costs	(4.0		)	—			—			(4.0		)
Excess tax benefits related to share-based compensation	6.1			—			—			6.1
Proceeds from stock options exercised	4.5			—			—			4.5
Other, net	6.3			—			(8.0		)	(1.7		)
Transactions with affiliates, net	220.2			(438.5		)	218.3			—
Net cash provided by (used in) financing activities	(89.0		)	(438.5		)	200.2			(327.3		)
Net change in cash and cash equivalents	54.1			(4.2		)	56.5			106.4
Cash and cash equivalents at beginning of period	903.8			5.2			386.2			1,295.2
Cash and cash equivalents at end of period	$	957.9		$	1.0		$	442.7		$	1,401.6

Unaudited Supplemental Condensed Consolidating Statements of Cash Flows



	Nine Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated
	(Dollars in millions)
Cash Flows From Operating Activities
Net cash provided by (used in) continuing operations	$	(323.0	)	$	1,002.7		$	223.8		$	903.5
Net cash used in discontinued operations	(9.5		)	(1.8		)	—			(11.3		)
Net cash provided by (used in) operating activities	(332.5		)	1,000.9			223.8			892.2
Cash Flows From Investing Activities
Additions to property, plant, equipment and mine development	—			(238.1		)	(53.2		)	(291.3		)
Investment in Prairie State Energy Campus	—			(52.5		)	—			(52.5		)
Proceeds from disposal of assets	—			8.5			1.2			9.7
Investment in equity affiliates and joint ventures	—			(15.0		)	(3.8		)	(18.8		)
Proceeds from sales of debt and equity securities	—			—			10.6			10.6
Purchases of debt and equity securities	—			—			(73.6		)	(73.6		)
Other, net	—			(7.2		)	(0.2		)	(7.4		)
Net cash used in investing activities	—			(304.3		)	(119.0		)	(423.3		)
Cash Flows From Financing Activities
Proceeds from long-term debt	1,150.0			—			—			1,150.0
Payments of long-term debt	(1,140.3		)	—			(8.2		)	(1,148.5		)
Dividends paid	(56.5		)	—			—			(56.5		)
Repurchase of employee common stock relinquished for tax withholding	(8.4		)	—			—			(8.4		)
Payment of debt issuance costs	(32.2		)	—			—			(32.2		)
Proceeds from stock options exercised	5.9			—			—			5.9
Other, net	5.8			—			(6.3		)	(0.5		)
Transactions with affiliates, net	521.1			(696.7		)	175.6			—
Net cash provided by (used in) financing activities	445.4			(696.7		)	161.1			(90.2		)
Net change in cash and cash equivalents	112.9			(0.1		)	265.9			378.7
Cash and cash equivalents at beginning of period	368.4			0.2			620.2			988.8
Cash and cash equivalents at end of period	$	481.3		$	0.1		$	886.1		$	1,367.5