SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ending DECEMBER 31, 2001
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Commission File Number 1-16463
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Full title of the plan and the address of the plan, if different from that of
the issuer named below:
LEE RANCH COAL COMPANY RETIREMENT AND
SAVINGS PLAN FOR SALARIED EMPLOYEES
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Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
PEABODY ENERGY CORPORATION
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701 MARKET STREET, ST. LOUIS, MISSOURI 63101-1826
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(Address of principal executive offices) (Zip Code)
TABLE OF CONTENTS
Unaudited Financial Statements
Statements of Net Assets Available for Benefits -
December 31, 2001 and December 31, 2000............................................................ 1
Statements of Changes in Net Assets Available for Benefits -
Years Ended December 31, 2001 and 2000............................................................. 2
Notes to Unaudited Financial Statements............................................................ 3
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)...........................................8
Signatures...............................................................................................9
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Statements of Net Assets Available for Benefits - Unaudited
December 31, 2001 and 2000
2001 2000
------------ ------------
ASSETS
Investments, at fair value:
Investment in mutual funds $ 3,973,492 $ 4,161,694
Investment in common/collective trusts 2,107,856 1,783,912
Participant notes receivable 514,295 490,091
------------ ------------
Total investments 6,595,643 6,435,697
Receivables:
Receivable from Lee Ranch Coal Company Retirement
and Savings Plan for Hourly Employees -- 204,400
------------ ------------
Total receivables -- 204,400
------------ ------------
Net assets available for benefits $ 6,595,643 $ 6,640,097
============ ============
See accompanying unaudited notes.
1
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Statements of Changes in Net Assets Available for Benefits - Unaudited
Years ended December 31, 2001 and 2000
2001 2000
------------ ------------
ADDITIONS
Interest and dividends - investments $ 193,249 $ 439,062
Interest income - participant loans 46,534 44,098
Net realized/unrealized depreciation of investments (669,757) (669,248)
------------ ------------
Net investment loss (429,974) (186,088)
Contributions:
Employer 129,964 126,359
Participant 321,517 284,288
Rollover -- 262,852
------------ ------------
Total contributions 451,481 673,499
Transfers in (out) (10,053) 208,678
------------ ------------
Total additions 11,454 696,089
DEDUCTIONS
Withdrawals by participants (55,098) (69,534)
Other expenses (810) (538)
------------ ------------
Total deductions (55,908) (70,072)
------------ ------------
Net increase (decrease) in net assets available for benefits (44,454) 626,017
Net assets available for benefits at beginning of year 6,640,097 6,014,080
------------ ------------
Net assets available for benefits at end of year $ 6,595,643 $ 6,640,097
============ ============
See accompanying unaudited notes.
2
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Notes to Unaudited Financial Statements
Years ended December 31, 2001 and 2000
1. DESCRIPTION OF THE PLAN
The following description of the Lee Ranch Coal Company (the Company) Retirement
and Savings Plan for Salaried Employees (the Plan) provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all salaried employees of the
Company who have completed 30 days of service, and all employees that previously
participated in the Santa Fe Pacific Coal Company Retirement and Savings Plan
for Salaried Employees. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Effective January 1, 2001,
employees are eligible for participation in the Plan on the date of their
employment or at any time afterward.
The Plan allows participants to invest among several mutual funds and
common/collective trusts. Effective October 2001, the Plan allows participants
to invest in the Peabody Energy Stock Fund, as a result of Peabody Energy
Corporation's initial public offering of common stock in May 2001. All
investments in the Plan are participant directed.
CONTRIBUTIONS
Each year, participants may contribute up to 16 percent of pretax or after-tax
annual compensation, as defined in the Plan. Participants direct the investment
of their contributions into various investment options offered by the Plan.
The Company makes matching contributions of an amount equal to 100 percent of
the first 4 percent of compensation that a participant contributes to the Plan
on a pretax basis. After a participant's pretax contributions reach the pretax
limit established by the IRS, the Company makes matching contributions of an
amount equal to 100 percent of the first 4 percent of compensation that a
participant contributes to the Plan on an after-tax basis. Matching
contributions are made in cash each pay period, and are invested according to
the employee's investment elections.
3
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Notes to Unaudited Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocations of (a) the Company's contribution and (b) Plan earnings. Allocations
are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING
Participants are vested immediately in their contributions plus actual earnings
thereon. Vesting in employer matching contributions is based on years of
continuous service. Employer matching contributions become 20 percent vested for
each year of service until 100 percent vested after the fifth year of service. A
year of service is defined as any 12-month period during which the employee
completes at least 1,000 hours of service.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance.
The loans are secured by the balance in the participant's account and bear
interest at rates commensurate with 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. Principal and interest is paid ratably through payroll deductions.
PAYMENT OF BENEFITS
On termination of service due to death, disability or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account, or annual installments. For
termination of service for other reasons, a participant may receive the value of
the vested interest in his or her account as a lump-sum distribution.
FORFEITED ACCOUNTS
Employer contributions are reduced by forfeitures of non-vested amounts. The
forfeiture credits amount to $2,768 and $5,548 for the years ended December 31,
2001 and 2000, respectively.
4
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Notes to Unaudited Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PLAN TERMINATION
Although there has been no expressed intention to do so, the Company has the
right to terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, as defined, each participant would become fully vested in the
employer matching contributions.
ADMINISTRATIVE EXPENSES
The administrative expenses of the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method of
accounting.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent liabilities at the date of the
financial statements, and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these 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 common/collective trust are valued at net
asset value at year-end. Participant loans are valued at cost, which
approximates market value.
Purchases and sales are recorded on a trade date basis. Interest income is
recorded when earned. Dividends are recorded on the ex-dividend date.
5
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Notes to Unaudited Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PAYMENT OF BENEFITS
Benefits are recorded when paid.
RECLASSIFICATION
Certain amounts in the 2000 financial statements have been reclassified to
conform to the 2001 presentation.
3. INVESTMENTS
The Plan's investments are held by the Vanguard Fiduciary Trust Company (the
Trustee). The Trustee has certified information related to investments as
complete and accurate.
The Plan's investments (including investments purchased or sold, as well as held
during the year) appreciated (depreciated) in fair value as determined by quoted
market prices as follows:
YEAR ENDED DECEMBER 31,
2001 2000
------------ ------------
Mutual funds $ (669,757) $ (663,246)
Common stock -- (6,002)
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$ (669,757) $ (669,248)
============ ============
Investments that represent 5 percent or more of fair value of the Plan's net
assets at December 31, are as follows:
2001 2000
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Mutual funds:
Vanguard 500 Index Fund $ 1,522,576 $ 1,683,118
Vanguard Prime Money Market 567,166 --
Vanguard U.S. Growth Portfolio 557,102 814,018
Vanguard Wellington Fund 365,231 340,947
Vanguard Windsor II Fund 408,403 472,937
Common/Collective trust:
Vanguard Retirement Savings Trust 2,107,856 1,783,912
6
Lee Ranch Coal Company Retirement and Savings Plan
for Salaried Employees
Notes to Unaudited Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated January 2, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (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 administrator believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt. The Plan has applied for a new determination letter.
5. SUBSEQUENT EVENTS
Effective April 1, 2002, participants may contribute, subject to limitations of
applicable law, up to 50 percent of pretax or after-tax annual compensation, as
defined in the Plan.
Also effective April 1, 2002, in the calendar year that a participant is age 50
or older and each year thereafter, certain participants meeting additional
specific criteria will be permitted to make catch-up contributions to the Plan.
Participants will be able to contribute amounts over and above the maximum
otherwise permitted by the Plan, subject to certain limitations.
7
Lee Ranch Coal Company Retirement and Savings Plan
For Salaried Employees
Employer ID #13-2871045
Plan #103
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2001
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT TYPE VALUE
----------------- ------------------------------ -------
Gabelli Growth Fund* 716 shares of mutual funds $ 20,533
Janus Investment Fund* 1,030 shares of mutual funds 25,336
Janus Worldwide Fund* 124 shares of mutual funds 5,442
T. Rowe Price Science/Technology Fund* 3,673 shares of mutual funds 76,842
Vanguard 500 Index Fund* 14,379 shares of mutual funds 1,522,576
Vanguard Explorer Fund* 2,504 shares of mutual funds 151,013
Vanguard International Growth Fund* 13,804 shares of mutual funds 207,202
Vanguard LifeStrategy Conservative Growth Fund* 1,113 shares of mutual funds 15,645
Vanguard LifeStrategy Growth Fund* 872 shares of mutual funds 15,191
Vanguard LifeStrategy Income Fund* 508 shares of mutual funds 6,539
Vanguard LifeStrategy Moderate Growth Fund* 985 shares of mutual funds 15,699
Vanguard Prime Money Market* 567,166 shares of mutual funds 567,166
Vanguard Total Bond Market Index Fund* 1,338 shares of mutual funds 13,572
Vanguard U.S. Growth Portfolio* 29,554 shares of mutual funds 557,102
Vanguard Wellington Fund* 13,398 shares of mutual funds 365,231
Vanguard Windsor II Fund* 15,960 shares of mutual funds 408,403
Vanguard Retirement Savings Trust* 2,107,856 shares of common/collective trust 2,107,856
Participant Loans Participant loans, interest rates from 4.8% to 514,295
9.5%, maturities through 4/11/2016
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$6,595,643
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*Parties-in-interest
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the plan
administrator of the Lee Ranch Coal Company Retirement and Savings Plan for
Salaried Employees has duly caused this annual report to be signed on its behalf
by the undersigned, hereunto duly authorized.
Lee Ranch Coal Company
Retirement and Savings
Plan for Salaried Employees
Date: June 28, 2002 By: /s/ SHARON D. FIEHLER
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Sharon D. Fiehler
Peabody Energy Corporation
Executive Vice President,
Human Resources & Administration
9