UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-16463

PEABODY INVESTMENTS CORP.
EMPLOYEE RETIREMENT ACCOUNT

 

Full title of the plan

PEABODY ENERGY CORPORATION

     Name of issuer of the securities held pursuant to the plan and the address of its principal executive office

 

 

Peabody Investments Corp.
Employee Retirement Account

Financial Statements and Supplemental Schedule

Years Ended December 31, 2010 and 2009

Table of Contents

Report of Independent Registered Public Accounting Firm			1
Financial Statements:
Statements of Net Assets Available for Benefits — December 31, 2010 and 2009			2
Statements of Changes in Net Assets Available for Benefits — Years Ended December 31, 2010 and 2009			3
Notes to Financial Statements			4
Supplemental Schedule:
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)			13
Signature			15
Exhibit Index			16
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 Investments Corp. Employee Retirement Account (the Plan) as of December 31, 2010 and 2009, 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, 2010 and 2009, 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, 2010, 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.

St. Louis, Missouri
June 17, 2011

Peabody Investments Corp.
Employee Retirement Account

Statements of Net Assets Available for Benefits

		December 31,
		2010				2009
		(Dollars in thousands)
Assets:
Investments, at fair value:
Investments in mutual funds		$	446,289			$	354,497
Investment in common/collective trust			147,150				130,403
Interest in Master Trust			80,872				63,403
Total investments			674,311				548,303
Receivables:
Employer contributions			20,025				19,781
Notes receivable from participants			21,997				18,043
Total receivables			42,022				37,824
Total assets			716,333				586,127
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			(5,794	)			(2,819	)
Net assets available for benefits		$	710,539			$	583,308

See accompanying notes.

Peabody Investments Corp.
Employee Retirement Account

Statements of Changes in Net Assets Available for Benefits

		Years Ended December 31,
		2010				2009
		(Dollars in thousands)
Additions:
Investment income:
Interest and dividends		$	13,529			$	10,468
Net realized and unrealized appreciation of mutual funds			45,145				67,278
Net investment income in the Master Trust			24,992				33,711
Net investment income			83,666				111,457
Interest income on notes receivable from participants			1,072				1,046
Contributions:
Employee			36,494				35,200
Employer			48,825				46,816
Rollover			1,463				330
Total contributions			86,782				82,346
Total additions			171,520				194,849
Deductions:
Benefits paid to participants			(44,156	)			(22,417	)
Administrative expenses			(133	)			(83	)
Total deductions			(44,289	)			(22,500	)
Net increase in net assets available for benefits			127,231				172,349
Net assets available for benefits at beginning of year			583,308				410,959
Net assets available for benefits at end of year		$	710,539			$	583,308

See accompanying notes.

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

Years Ended December 31, 2010 and 2009

1. Description of the Plan

The following description of the Peabody Investments Corp. (the Company, Plan Administrator and 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 the participating investment in the Master Trust. See Notes 2 and 3 for additional details related to the Master Trust. All investments in the Plan are participant-directed except for the Vanguard Prime Money Market Fund, which represents forfeited employer contributions.

Contributions

Each year participants may contribute on a pre-tax or traditional after-tax basis any whole percentage from 1% to 60% of eligible compensation, as defined in the Plan. Effective January 1, 2009, participants also have the option to contribute to their account on a Roth after-tax basis whereby investment income earned on contributions is not subject to taxation. 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 entitled to 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, are entitled to Employer transition contributions equal to 9% of such participant’s eligible compensation. The Employer transition contributions began on January 1, 2008 and will end on or before December 31, 2012.

Certain Plan participants of the Peabody Investments Corp. Retirement Plan for Salaried Employees (Salaried Pension Plan) who are no longer credited with any additional years of service for benefit accrual purposes are entitled to Employer transition contributions equal to either 5% or 7% based on age and/or years of service as of

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

December 31, 2000. The Employer transition contributions began on June 1, 2008 and will end on or before December 31, 2012.

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).

Peabody’s Board of Directors establishes desired minimum and maximum performance targets that require the Employer to pay a performance contribution between 0% and 4% 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 of Directors 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 of Directors, 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, 2010, a $20.0 million receivable was recorded for a 6% performance contribution of eligible employees’ compensation related to the 2010 plan year. At December 31, 2009, a $19.8 million receivable was recorded for a 6% performance contribution of eligible employees’ compensation related to the 2009 plan year.

Vesting

Participants are vested immediately in their own contributions and the actual earnings 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, 2010 and 2009, the Plan received forfeiture credits, net of holding gains or losses, of $0.8 million and $0.7 million, respectively. There were no forfeitures used to offset contributions during the year ended December 31, 2010. During the year ended December 31, 2009, the Plan used forfeitures of $1.3 million to reduce Employer contributions. As of December 31, 2010 and 2009, the balance of forfeiture credits available for future use was $1.5 million and $0.7 million, respectively. Beginning in October 2009, forfeitures of non-vested Employer contributions are invested in the Vanguard Prime Money Market Fund.

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 as published in The Wall Street Journal on the first business day of the month in which the loan was made, plus an additional 1%. 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 in 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 earnings. The benefit to which a participant is entitled is the vested balance of the participant’s account as defined in the Plan.

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 59¹/2 have the right to receive a partial or full distribution of their vested account balance. Withdrawals in cases of hardship and other 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 the Plan.

Administrative Expenses

All significant administrative expenses of the Plan, including recordkeeping, audit and trustee fees, are paid by the Employer. Participants are required to pay for certain miscellaneous transaction fees.

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

2. Summary of Significant Accounting Policies

Basis of Presentation

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

Newly Adopted Accounting Standards

In September 2010, the Financial Accounting Standards Board (FASB) issued accounting guidance that requires participant loans to be measured at their unpaid principal balance, plus any accrued but unpaid interest, and classified as notes receivable from participants. Loans were previously measured at fair value and classified as investments. The new disclosure requirements are effective for fiscal years ending after December 15, 2010 (December 31, 2010 for the Plan) and are required to be applied retrospectively to all prior periods presented. Adoption of the guidance did not change the value of participant loans from the amount previously reported as of December 31, 2009. Participant loans have been reclassified to notes receivable from participants for all years presented.

In January 2010, the FASB issued accounting guidance that requires new fair value disclosures, including significant transfers in and out of Level 1 and Level 2 fair value measurements and a description of the reasons for the transfers. In addition, the guidance requires new disclosures regarding activity in Level 3 fair value measurements, including a gross basis reconciliation. The new disclosure requirements became effective for annual periods beginning January 1, 2010, except for the disclosure of activity within Level 3 fair value measurements, which is effective for fiscal years beginning after December 15, 2010 (January 1, 2011 for the Plan). Accordingly, adoption of the guidance does not impact the Plan’s disclosures. Adoption of the gross presentation of Level 3 activity is not expected to impact the Plan’s disclosures as the Plan currently does not have any Level 3 investments.

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.

The Vanguard Retirement Savings Trust invests in fully benefit-responsive investment contracts. These investment contracts are recorded at fair value; however, since these contracts are fully benefit-responsive, an adjustment is reflected in the statements of net assets available for benefits to present these investments at contract value. 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. Contract value represents contributions plus earnings, less participant withdrawals and administrative expenses.

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

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 Agreement for the Peabody Energy Stock Fund (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.

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 included in notes receivable from participants 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, 2010 or 2009. 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.

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.

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

3. Fair Value Measurements

The Plan Sponsor uses a three-level fair value hierarchy that categorizes assets and liabilities 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 assets or liabilities; Level 2, inputs 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. There were no Level 3 investments in the Plan as of December 31, 2010 and 2009.

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 each major class of investments measured at fair value, including the general classification of such investments pursuant to the valuation hierarchy.

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 are valued at quoted market prices, which represent the net asset value (NAV) of shares held by the Plan at year-end. NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV for these investments is a quoted price in an active market and is classified within Level 1 of the valuation hierarchy.

Common/Collective Trust

Units in the common/collective trust are valued at NAV at year-end. These investments are classified within Level 2 of the valuation hierarchy as the NAV for these investments is a derived price in an active market. This fund is primarily invested in guaranteed and synthetic investment contracts. 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 quoted market price plus uninvested cash position, if any) reported on the active market on which the security is traded and is classified within Level 1 of the valuation hierarchy.

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

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.

The following tables present the fair value hierarchy of the investments on the statements of net assets available for benefits.

		December 31, 2010
		Level 1				Level 2				Total
		(Dollars in thousands)
Equity mutual funds		$	248,921			$	—			$	248,921
Fixed income mutual funds			42,857				—				42,857
Target retirement mutual funds			154,511				—				154,511
Fixed income common/collective trust			—				147,150				147,150
Peabody Energy Stock Fund (1)			80,872				—				80,872
Total assets at fair value		$	527,161			$	147,150			$	674,311

		December 31, 2009
		Level 1				Level 2				Total
		(Dollars in thousands)
Equity mutual funds		$	204,823			$	—			$	204,823
Fixed income mutual funds			35,777				—				35,777
Target retirement mutual funds			113,897				—				113,897
Fixed income common/collective trust			—				130,403				130,403
Peabody Energy Stock Fund (1)			63,403				—				63,403
Total assets at fair value		$	417,900			$	130,403			$	548,303

Peabody Investments Corp.
Employee Retirement Account

Notes to Financial Statements

4. Investments

The following table presents investment information for the Master Trust:

		Years Ended December 31,
		2010				2009
		(Dollars in thousands)
Investments, at fair value:
Peabody Energy Stock Fund		$	82,306			$	64,603
Plan’s interest in Master Trust			98	%			98	%
Master Trust net investment income:
Dividend income		$	336			$	377
Net appreciation of common stock			25,181				33,995
Net investment income		$	25,517			$	34,372

Investments representing 5% or more of the fair value of the Plan’s net assets were as follows:

		December 31,
		2010				2009
		(Dollars in thousands)
Mutual funds:
Vanguard 500 Index Fund		$	70,373			$	59,086
Vanguard PRIMECAP Fund			46,192				41,851
Common/collective trust:
Vanguard Retirement Savings Trust			147,150				130,403

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,
		2010				2009
		(Dollars in thousands)
Net assets available for benefits per the financial statements		$	710,539			$	583,308
Adjustment from contract value to fair value for fully benefit-responsive contracts			5,794				2,819
Net assets available for benefits per the Form 5500		$	716,333			$	586,127

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 stock through the Peabody Energy Stock Fund, which is a permitted party-in-interest transaction.

7. 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 was exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan was amended and restated subsequent to the IRS determination letter and applied for a new determination letter in January 2010. 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.

8. 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.

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, 2010

(e) Current

(a)

(b) Identity of Issue

(c) Description of Investment

(d) Cost(1)

Value

*

Vanguard 500 Index Fund

607,611 shares of mutual fund

$

70,373,467

*

Vanguard PRIMECAP Fund

702,009 shares of mutual fund

46,192,214

*

Vanguard International Growth Fund

1,336,536 shares of mutual fund

25,848,616

*

Vanguard Total Bond Market Index Fund

2,225,055 shares of mutual fund

23,585,580

*

Vanguard Small-Cap Index Fund

576,541 shares of mutual fund

20,034,817

*

Vanguard Windsor II Fund

516,014 shares of mutual fund

13,246,079

Sound Shore Fund

336,190 shares of mutual fund

10,697,573

T. Rowe Price Mid-Cap Growth Fund

164,291 shares of mutual fund

9,615,939

*

Vanguard Extended Market Index Fund

222,027 shares of mutual fund

9,160,853

*

Vanguard Emerging Markets Stock Index Fund

268,859 shares of mutual fund

8,157,174

*

Vanguard Total Stock Market Index Fund

205,235 shares of mutual fund

6,477,223

*

Vanguard Long-Term Bond Index Fund

504,058 shares of mutual fund

6,068,859

*

Vanguard REIT Index Fund

317,789 shares of mutual fund

5,840,960

Harbor Capital Appreciation Fund

158,371 shares of mutual fund

5,815,392

*

Vanguard High-Yield Corporate Fund

859,482 shares of mutual fund

4,899,046

*

Vanguard GNMA Fund

403,833 shares of mutual fund

4,337,166

*

Vanguard Long-Term Treasury Fund

358,290 shares of mutual fund

3,966,269

T. Rowe Price Small-Cap Stock Fund

113,111 shares of mutual fund

3,894,399

*

Vanguard Developed Markets Index Fund

341,823 shares of mutual fund

3,438,740

*

Vanguard International Value Fund

85,579 shares of mutual fund

2,752,222

MSIFT U.S. Small Cap Value Portfolio

90,531 shares of mutual fund

2,439,808

Lazard U.S. Small Cap Equity Value

134,990 shares of mutual fund

1,964,099

Baron Asset Fund

27,113 shares of mutual fund

1,498,526

*

Vanguard Prime Money Market Fund (2)

1,472,959 shares of mutual fund

1,472,959

1,472,959

*

Vanguard Target Retirement Income Fund

323,349 shares of mutual fund

3,647,374

*

Vanguard Target Retirement 2005 Fund

107,901 shares of mutual fund

1,265,683

*

Vanguard Target Retirement 2010 Fund

460,159 shares of mutual fund

10,266,138

*

Vanguard Target Retirement 2015 Fund

1,876,000 shares of mutual fund

23,299,916

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, 2010

(e) Current

(a)

(b) Identity of Issue

(c) Description of Investment

(d) Cost(1)

Value

*

Vanguard Target Retirement 2020 Fund

1,537,287 shares of mutual fund

33,974,036

*

Vanguard Target Retirement 2025 Fund

1,959,846 shares of mutual fund

24,733,256

*

Vanguard Target Retirement 2030 Fund

679,377 shares of mutual fund

14,728,899

*

Vanguard Target Retirement 2035 Fund

875,895 shares of mutual fund

11,465,462

*

Vanguard Target Retirement 2040 Fund

484,065 shares of mutual fund

10,407,405

*

Vanguard Target Retirement 2045 Fund

783,089 shares of mutual fund

10,571,702

*

Vanguard Target Retirement 2050 Fund

474,338 shares of mutual fund

10,150,829

*

Vanguard Retirement Savings Trust

141,355,646 units of common/collective trust

147,150,141

*

Various participants

Participant notes receivable, interest rates from 4.25% to 9.50%, maturities through December 8, 2020

21,996,687

$

615,435,508

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.

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		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.