BTU_12.31.2013 11K 3



UNITED STATES
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, 2013
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 INVESTMENTS CORP.
 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)







Peabody Investments Corp.
Employee Retirement Account

Financial Statements and Supplemental Schedule

Years Ended December 31, 2013 and 2012

Table of Contents


 
 
Reports of Independent Registered Public Accounting Firms
1
 
 
Financial Statements:
 
 
 
          Statements of Net Assets Available for Benefits -
 
December 31, 2013 and 2012
3
 
 
          Statements of Changes in Net Assets Available for Benefits -
 
Years Ended December 31, 2013 and 2012
4
 
 
          Notes to Financial Statements
5
 
 
Supplemental Schedule:
 
 
 
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
15
 
 
Signature
17
 
 
Exhibit Index
18
 
 
Exhibit 23.1 - Consent of UHY LLP, Independent Registered Public Accounting Firm
 
 
 
Exhibit 23.2 - Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
 







Report of Independent Registered Public Accounting Firm


Defined Contribution Administrative Committee

We have audited the accompanying statement of net assets available for benefits of Peabody Investments Corp. Employee Retirement Account as of December 31, 2013, and the related statement of changes in net assets available for benefits for the year 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 audit.

We conducted our audit 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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit 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 or 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, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 as of December 31, 2013, and the changes in net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2013, is presented for the purpose 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 the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.



        
/s/ UHY LLP


St. Louis, Missouri
June 27, 2014

1




Report of Independent Registered Public Accounting Firm


Defined Contribution Administrative Committee

We have audited the accompanying statement of net assets available for benefits of Peabody Investments Corp. Employee Retirement Account as of December 31, 2012, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012.  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 audit.

We conducted our audit 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 audit 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 audit provides 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 Peabody Investments Corp. Employee Retirement Account as of December 31, 2012, and the changes in its net assets available for benefits for the year ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.



        
/s/ Ernst & Young LLP


St. Louis, Missouri
June 21, 2013



2



Peabody Investments Corp.
Employee Retirement Account
 
 
 
 
Statements of Net Assets Available for Benefits
 
 
 
 
 
December 31,
 
2013
 
2012
 
(Dollars in thousands)
Assets:
 
 
 
Investments, at fair value:
 
 
 
Investments in mutual funds
$
708,739

 
$
572,587

Investment in common/collective trust
145,586

 
164,105

Interest in Master Trust
38,735

 
46,712

Total investments
893,060

 
783,404

Receivables:
 
 
 
Employer contributions
18,261

 
16,519

Notes receivable from participants
25,296

 
24,879

Total receivables
43,557

 
41,398

 
 
 
 
Total assets reflecting investments at fair value
936,617

 
824,802

Adjustment from fair value to contract value for
 
 
 
 fully benefit-responsive investment contracts
(3,947
)
 
(8,261
)
Net assets available for benefits
$
932,670

 
$
816,541

 
 
 
 
See accompanying notes.
 
 
 



3



Peabody Investments Corp.
Employee Retirement Account
 
 
 
 
Statements of Changes in Net Assets Available for Benefits
 
 
 
 
 
Years Ended December 31,
 
2013
 
2012
 
(Dollars in thousands)
Additions:
 
 
 
Investment income (loss):
 
 
 
Interest and dividends
$
20,657

 
$
17,766

Net realized and unrealized appreciation of mutual funds
114,049

 
55,113

Net investment loss in the Master Trust
(11,754
)
 
(10,026
)
Net investment income
122,952

 
62,853

 
 
 
 
Interest income on notes receivable from participants
1,096

 
1,018

 
 
 
 
Contributions:
 
 
 
Employee
42,884

 
44,789

Employer, net
43,355

 
49,488

Rollover
1,243

 
2,411

Total contributions
87,482

 
96,688

Total additions
211,530

 
160,559

 
 
 
 
Deductions:
 
 
 
Benefits paid to participants
(95,124
)
 
(59,228
)
Administrative expenses
(277
)
 
(217
)
Total deductions
(95,401
)
 
(59,445
)
 
 
 
 
Net change in net assets available for benefits
116,129

 
101,114

Net assets available for benefits at beginning of year
816,541

 
715,427

Net assets available for benefits at end of year
$
932,670

 
$
816,541

 
 
 
 
See accompanying notes.
 
 
 

4

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements


Years Ended December 31, 2013 and 2012

1. Description of the Plan

The following description of the Peabody Investments Corp. (the Company, Plan Administrator or Plan Sponsor) 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 nonrepresented employees of the Company and certain of its participating subsidiaries and affiliated companies (collectively, 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, as amended (ERISA).

The Plan allows participants to invest in a selection of mutual funds, a common/collective trust and the Peabody Energy Stock Fund, which is a participating investment in the Amended and Restated Master Trust Agreement for the Peabody Energy Corporation Stock Fund (the Master Trust). See Notes 2 and 3 for additional details related to the Master Trust. Participants direct the investment of all 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).

Contributions

Each year participants may contribute on a pre-tax, traditional after-tax, or Roth after-tax basis any whole percentage from 1% to 60% of eligible compensation, as defined in the Plan. In the calendar year that a participant is age 50 or older and each year thereafter, he or she is permitted to make catch-up contributions to the Plan. Participants may also rollover account balances from other qualified defined benefit or defined contribution plans.

For participants other than those performing services in the Colorado, Wyoming and New Mexico regions, the Employer makes matching contributions equal to 100% of the first 6% of eligible compensation. Plan participants in the Colorado, Wyoming and New Mexico regions are eligible for Employer matching contributions up to 8% of such participant's eligible compensation, adjusted for the participant's age and years of service.

Certain Plan participants in the Colorado, Wyoming and New Mexico regions who have either completed 15 or more years of service, or attained age 45 and completed at least 5 years of service as of December 31, 2007, were entitled to Employer transition contributions equal to 9% of such participant's eligible compensation. The Employer transition contributions began on January 1, 2008 and ended on December 31, 2012 for most participants.


5

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

Certain Plan participants of the Peabody Investments Corp. Retirement Plan who were no longer credited with any additional years of service for benefit accrual purposes were entitled to Employer transition contributions equal to either 5% or 7% of such participant's eligible compensation based on age and/or years of service as of December 31, 2000. The Employer transition contributions began on June 1, 2008 and ended on December 31, 2012 for most participants.

Peabody’s Board of Directors (the Board) establishes desired minimum and maximum performance targets that require the Employer to pay a performance contribution between 0% and 6% of eligible compensation into the accounts of active, eligible employees as of the end of the fiscal year, based upon Peabody’s financial performance. If the minimum performance targets set for a fiscal year are not met, the Board may authorize the Employer to contribute a discretionary amount to the accounts of active, eligible employees. If the maximum performance targets set for a fiscal year are exceeded, the Board, at its discretion, may authorize the Employer to contribute additional incremental percentages of eligible compensation to the accounts of active, eligible employees. 

At December 31, 2013 and 2012, receivables of $18.3 million and $16.5 million, respectively, were recorded for a 5.1% and a 4.2% performance contribution of eligible employees' compensation for each of the plan years.

Vesting

Participants are vested immediately in their own contributions and the realized and unrealized earnings or losses thereon. Vesting of Employer matching contributions occurs ratably based on years of continuous service (20% per year after one year of service with 100% vesting after five years) and automatically vests 100% upon death, normal retirement date or disability retirement date, as defined in the Plan. Employer transition, performance and discretionary contributions, if any, are immediately vested 100%.

Forfeited Accounts

Employer contributions are reduced by forfeitures of non-vested amounts. During the years ended December 31, 2013 and 2012, the Plan received forfeiture credits, net of holding gains or losses, of $1.1 million and $0.9 million, respectively. During the years ended December 31, 2013 and 2012, the Plan used forfeitures of $1.5 million and $0.7 million, respectively, to reduce Employer contributions. As of December 31, 2013 and 2012, the balance of forfeiture credits available for future use was $0.1 million and $0.5 million, respectively. Forfeitures are invested in the Vanguard Prime Money Market Fund.




6

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

Notes Receivable from Participants

Participants may borrow up to 50% of their own contributions (Employer matching, transition, performance and discretionary contributions are not eligible) subject to minimum and maximum amounts of $1,000 and $50,000, respectively, with the maximum amount reduced by the highest principal amount outstanding in the last 12 months, if applicable. Loans are secured by the balance in the participant's account and bear interest based on the prime interest rate on the first business day of the month in which the loan was made, plus an additional 1%. Participants may select any repayment period between 12 and 60 months for general purpose loans. For loans used to acquire a principal residence, any repayment period between 12 and 120 months may be selected. Principal and interest are paid ratably through payroll deductions. A maximum of two loans may be outstanding at any time. Upon retirement or separation of employment, a participant's loan must be repaid before the participant can receive a final distribution from the Plan. If the loan is not repaid within 90 days, it is subtracted from the participant's total account balance and considered a taxable distribution from the Plan.

Participant Accounts

Each participant's account is credited with the participant's contributions, Employer matching, transition, performance and discretionary contributions, and plan realized and unrealized earnings or losses. The benefit to which a participant is entitled is the vested balance of the participant's account.

Payment of Benefits

Participants are eligible for distribution of their vested account balance upon termination of employment. Participants are eligible for distribution of their entire account balance upon death, disability, or termination of employment after normal retirement date. Participants may elect to receive their distribution as either a lump sum payment or as installments in certain circumstances, as defined in the Plan. Participants may also elect to transfer their account balance into an individual retirement account or another qualified plan.

Participants who have attained the age of 59½ have the right to receive a partial or full distribution of their vested account balance. Other types of withdrawals are also permitted, as defined in the Plan.

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 or discontinue all contributions to the Plan.

Administrative Expenses

Significant administrative expenses of the Plan, including audit and trustee fees, are paid by the Employer.  Plan recordkeeping fees are paid through the allocation of a portion of investment management fees.  Certain transaction fees are charged directly to participants.


7

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

2. Summary of Significant Accounting Policies

Basis of Accounting

Financial statements of the Plan are prepared using the accrual method of accounting.

The Plan invests in fully benefit-responsive investment contracts. Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. The statements of net assets available for benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The statements of changes in net assets available for benefits are prepared using the contract value basis for fully benefit-responsive investment contracts.

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

The Plan Sponsor defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for further description of fair value measurements.

Securities Transactions

Purchases and sales of securities are recorded on a trade-date basis. Realized gains (losses) are computed based on the average cost of securities sold. Interest income is recorded when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income.

Interest in Master Trust

The Master Trust was established to hold investments in the Peabody Energy Stock Fund for this Plan as well as Peabody's other defined contribution plans. Total investment income (loss) of the Master Trust is allocated to each plan investing in the Master Trust based on the units held in the Master Trust by each plan.


8

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Loan origination fees are deducted from loan proceeds and are not reflected as administrative expenses on the statement of changes in net assets available for benefits. No allowance for credit losses has been recorded as of December 31, 2013 or 2012. If a participant ceases to make loan repayments and the Plan Administrator deems the note receivable to be a distribution, the note receivable balance is reduced and a benefit payment is recorded.

Payment of Benefits

Benefit distributions are recorded when paid.

Subsequent Events

The Plan Administrator evaluated subsequent events for the Plan through June 27, 2014, the date the financial statements were available to be issued. No subsequent events were noted.

3. Fair Value Measurements

The Plan Sponsor uses a three-level fair value hierarchy that categorizes investments measured at fair value based on the observability of the inputs utilized in the valuation. These levels include: Level 1, inputs are quoted prices in active markets for identical investments; Level 2, inputs are other than quoted prices included in Level 1 that are directly or indirectly observable through market-corroborated inputs; and Level 3, inputs are unobservable, or observable but cannot be market-corroborated, requiring the Plan Sponsor to make assumptions about pricing by market participants.

The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. The Plan Sponsor evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total net assets available for benefits. For the years ended December 31, 2013 and 2012, there were no transfers in or out of Levels 1, 2, or 3. Further, there were no Level 3 investments in the Plan as of or for the years ended December 31, 2013 and 2012.

A financial instrument's level within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation techniques and inputs used for investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy.


9

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

Mutual Funds
Plan investments include a wide variety of mutual fund types that can generally be classified as holding primarily equity securities, fixed income securities, or a combination of equity and fixed income securities aimed at certain target retirement dates. Shares of mutual funds, which are traded on a national securities exchange in active markets, are valued using daily publicly quoted net asset value (NAV) prices and accordingly classified within Level 1 of the valuation hierarchy. Mutual funds are not subject to liquidity redemption restrictions.

Common/Collective Trust
Units in the common/collective trust (CCT), which are not publicly traded on a national securities exchange, are valued using a NAV that is based on a derived price in an active market and accordingly classified within Level 2 of the valuation hierarchy. The CCT is primarily invested in traditional and synthetic investment contracts and is designed to provide stability by preserving principal and accumulating earnings. Participant-directed redemptions have no restrictions; however, the Plan is required to provide a one-year redemption notice to liquidate its entire share in the fund. The NAV has been estimated based on the fair value of the underlying investment contracts in the fund as reported by the issuer of the fund. The fair value differs from the contract value. As previously discussed in Note 2, contract value is the relevant measurement attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan.

Peabody Energy Stock Fund
The Peabody Energy Stock Fund is valued at its unit closing price (comprised of publicly quoted market prices for Peabody common stock held plus uninvested cash position, if any) as reported on the active market on which the security is traded, and is classified within Level 1 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan Sponsor believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The inputs or methodologies used for valuating investments are not necessarily an indication of the risk associated with investing in those investments.


10

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

The following tables present the fair value hierarchy of the investments reflected on the statements of net assets available for benefits.
 
December 31, 2013
 
Level 1
 
Level 2
 
Total
 
(Dollars in thousands)
Equity mutual funds
$
365,236

 
$

 
$
365,236

Fixed income mutual funds
54,525

 

 
54,525

Target retirement mutual funds
288,978

 

 
288,978

Fixed income common/collective trust

 
145,586

 
145,586

Peabody Energy Stock Fund (1)
38,735

 

 
38,735

Total assets at fair value
$
747,474

 
$
145,586

 
$
893,060

 
 
 
 
 
 
 
December 31, 2012
 
Level 1
 
Level 2
 
Total
 
(Dollars in thousands)
Equity mutual funds
$
277,136

 
$

 
$
277,136

Fixed income mutual funds
63,981

 

 
63,981

Target retirement mutual funds
231,470

 

 
231,470

Fixed income common/collective trust

 
164,105

 
164,105

Peabody Energy Stock Fund (1)
46,712

 

 
46,712

Total assets at fair value
$
619,299

 
$
164,105

 
$
783,404

 
 
 
 
 
 
(1)  Interest in Master Trust
 
 
 
 
 

11

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

4. Investments

The following table presents investment information for the Master Trust:
 
December 31,
 
2013
 
2012
 
(Dollars in thousands)
Investments, at fair value:
 
 
 
Peabody Energy Stock Fund
$
39,120

 
$
47,623

Plan's interest in Master Trust
99
%
 
98
%
 
 
 
 
 
Years Ended December 31,
 
2013
 
2012
 
(Dollars in thousands)
Master Trust net investment loss:
 
 
 
Dividend income
$
608

 
$
565

Net depreciation of common stock
(12,615
)
 
(10,808
)
Net investment loss
$
(12,007
)
 
$
(10,243
)

Investments representing 5% or more of the Plan's net assets available for benefits were as follows:
 
December 31,
 
2013
 
2012
 
(Dollars in thousands)
Mutual funds:
 
 
 
Vanguard Institutional Index Fund
$
105,600

 
$
82,600

Vanguard PRIMECAP Admiral Fund
72,919

 
46,630

Vanguard Target Retirement 2020 Fund
51,376

 
44,285

Common/collective trust:
 
 
 
Vanguard Retirement Savings Trust, at contract value
141,639

 
155,844

(fair value $145,586 and $164,105, respectively)
 
 
 
 
 
 
 


12

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

5. Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
 
December 31,
 
2013
 
2012
 
(Dollars in thousands)
 
 
 
 
Net assets available for benefits per the financial statements
$
932,670

 
$
816,541

Adjustment from contract value to fair value for
 
 
 
fully benefit-responsive contracts
3,947

 
8,261

Net assets available for benefits per the Form 5500
$
936,617

 
$
824,802


The following is a reconciliation of net investment income per the financial statements to the Form 5500:

 
Years Ended December 31,
 
2013
 
2012
 
(Dollars in thousands)
 
 
 
 
Net investment income per the financial statements
$
122,952

 
$
62,853

Add: adjustment from contract value to fair value for
 
 
 
   fully benefit-responsive investment contracts at end of year
3,947

 
8,261

Less: adjustment from contract value to fair value for
 
 
 
   fully benefit-responsive investment contract at beginning of year
(8,261
)
 
(7,072
)
Net investment income per the Form 5500
$
118,638

 
$
64,042


6. Related - Party Transactions

The Plan invests in shares of mutual funds and units in a common/collective trust 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 common stock through the Peabody Energy Stock Fund, which is a permitted party-in-interest transaction.


13

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

7. Income Tax Status

The Plan received a determination letter from the IRS dated July 3, 2013, 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 qualified status. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended and restated, is qualified and the related trust is tax-exempt.

U.S. generally accepted accounting principles require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes the Plan is no longer subject to income tax examinations for years prior to 2010.

8. Voluntary Compliance

The Plan’s recordkeeper has identified certain operational errors related to monitoring contribution suspension provisions under the Plan document and making timely corrective actions.  Under the terms of the Plan document, when after-tax contributions (and the related employer matching contributions) have been held by a participant in the Plan for fewer than 24 months, and a participant makes a withdrawal of those contributions, the participant is prohibited from making pre-tax or after-tax contributions to the participant’s Plan account for six months.  Due to an administrative error by the Plan’s recordkeeper, these suspension provisions were not implemented in accordance with the plan document for the period from 1999 through 2012.

On December 10, 2013, the Plan Administrator filed an application for Voluntary Correction Program with the IRS and is awaiting a Compliance Statement. Since filing the application, the Plan has implemented the correction as described in the application. 

9. Risks and Uncertainties

The Plan invests in various investment securities, which are exposed to risks such as interest rate, market and credit. 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.




14




Supplemental Schedule

Peabody Investments Corp.
Employee Retirement Account

Employer ID #20-0480084
Plan #003

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

December 31, 2013

(a)
 
(b) Identity of Issue
 
(c) Description of Investment
 
(d) Cost (1)
 
(e) Current Value
*
 
Vanguard Institutional Index Fund
 
623,816

shares of mutual fund
 
 
 
$
105,599,625

*
 
Vanguard PRIMECAP Admiral Fund
 
761,711

shares of mutual fund
 
 
 
72,918,567

*
 
Vanguard Small-Cap Index Institutional Fund
 
859,038

shares of mutual fund
 
 
 
45,279,885

*
 
Vanguard Windsor II Admiral Fund
 
533,885

shares of mutual fund
 
 
 
34,830,650

*
 
Vanguard Total Bond Market Index Institutional Fund
 
2,819,150

shares of mutual fund
 
 
 
29,770,225

*
 
Vanguard International Growth Admiral Fund
 
368,788

shares of mutual fund
 
 
 
27,371,446

*
 
Vanguard Total Stock Market Index Institutional Fund
 
419,610

shares of mutual fund
 
 
 
19,591,586

*
 
Vanguard Developed Markets Index Fund
 
1,497,478

shares of mutual fund
 
 
 
17,325,821

 
 
T. Rowe Price Mid-Cap Growth Fund
 
210,341

shares of mutual fund
 
 
 
15,308,636

*
 
Vanguard GNMA Fund
 
912,506

shares of mutual fund
 
 
 
9,508,317

 
 
T. Rowe Price Small-Cap Stock Fund
 
187,048

shares of mutual fund
 
 
 
8,334,874

 
 
BlackRock High Yield Bond Fund
 
948,510

shares of mutual fund
 
 
 
7,796,753

*
 
Vanguard Emerging Markets Stock Index Institutional Fund
 
293,848

shares of mutual fund
 
 
 
7,587,160

*
 
Vanguard REIT Index Institutional Fund
 
520,830

shares of mutual fund
 
 
 
7,385,364

*
 
Vanguard Long-Term Bond Index Fund
 
588,491

shares of mutual fund
 
 
 
7,303,171

*
 
Vanguard International Value Fund
 
99,044

shares of mutual fund
 
 
 
3,702,249

*
 
Vanguard Prime Money Market Fund
 
146,822

shares of mutual fund
 
 
 
146,822

*
 
Vanguard Target Retirement Income Fund
 
444,298

shares of mutual fund
 
 
 
5,553,727

*
 
Vanguard Target Retirement 2010 Fund
 
262,105

shares of mutual fund
 
 
 
6,709,900

*
 
Vanguard Target Retirement 2015 Fund
 
2,067,795

shares of mutual fund
 
 
 
30,541,334

*
 
Vanguard Target Retirement 2020 Fund
 
1,895,082

shares of mutual fund
 
 
 
51,375,675


15



Supplemental Schedule

Peabody Investments Corp.
Employee Retirement Account

Employer ID #20-0480084
Plan #003

Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (continued)

December 31, 2013

(a)
 
(b) Identity of Issue
 
(c) Description of Investment
 
(d) Cost (1)
 
(e) Current Value
*
 
Vanguard Target Retirement 2025 Fund
 
2,951,401

shares of mutual fund
 
 
 
46,484,568

*
 
Vanguard Target Retirement 2030 Fund
 
1,101,920

shares of mutual fund
 
 
 
30,457,064

*
 
Vanguard Target Retirement 2035 Fund
 
1,696,942

shares of mutual fund
 
 
 
28,814,076

*
 
Vanguard Target Retirement 2040 Fund
 
900,582

shares of mutual fund
 
 
 
25,504,476

*
 
Vanguard Target Retirement 2045 Fund
 
1,544,433

shares of mutual fund
 
 
 
27,429,132

*
 
Vanguard Target Retirement 2050 Fund
 
1,133,243

shares of mutual fund
 
 
 
31,946,119

*
 
Vanguard Target Retirement 2055 Fund
 
126,707

shares of mutual fund
 
 
 
3,845,567

*
 
Vanguard Target Retirement 2060 Fund
 
11,839

shares of mutual fund
 
 
 
316,689

*
 
Vanguard Retirement Savings Trust
 
141,638,522

units of common/collective trust
 
 
 
145,585,707

*
 
Various participants
 
   Participant notes receivable (2)

 
 
 
25,295,939

 
 
 
 
 
 
 
 
 
$
879,621,124

 
 
 
 
 
 
 
 
 
 
*
 
Denotes party-in-interest
 
 
 
 
(1) 
 
Cost is not presented as all investments are participant directed investments
 
 
 
 
(2) 
 
Participant notes receivable include interest rates from 4.25% to 9.50% and maturities through December 27, 2023
 
 
 
 



16



SIGNATURE

Peabody Investments Corp. 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 Investments Corp.
 
 
 
 
Employee Retirement Account
 
 
 
 
 
Date:
June 27, 2014
 
By:  
/s/ ANDREW P. SLENTZ
 
 
 
 
Andrew P. Slentz
 
 
 
 
Peabody Energy Corporation
 
 
 
 
Executive Vice President and
 
 
 
 
Chief Human Resources Officer



17



EXHIBIT INDEX

The exhibit below is numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Exhibit No.
 
Description of Exhibit
23.1
 
Consent of UHY LLP, Independent Registered Public Accounting Firm.
23.2
 
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.


18