Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Investor Presentation (May 2007)
28 slides from Peabody Energy's investor presentation, May 10, 2007
Slide 1: Investor Presentation May 2007
Investor Presentation May 2007 Peabody Energy NYSE: BTU Exhibit 99.1
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Some of the following information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and is intended to come within the safe-harbor protection
Slide 3: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Growing revenue profile and productivity initiatives lead to expanded margins Future committed sales at favorable prices offer strong revenue visibility 10+ billion ton reserve base and diverse portfolio of safe, low-cost operations Significant future c
Slide 4: Industry Overview
INDUSTRY OVERVIEW id
Slide 5: Projected 10-Year Growth in Per Capita Energy Use
Projected 10-Year Growth in Per Capita Energy Use China and India Driving Global Demand Growth for Energy 88% 36% 5% 20% 27% 17% 13% 12% 33% 4% 4% 7% 37% Source: U.S. Census Bureau, International Data Base; U.S. Energy Information Administration, International Energy Outlook 2006 Population
Slide 6: China, U.S. and India Represent Vast Majority of Global Coal Growth
China, U.S. and India Represent Vast Majority of Global Coal Growth Amounts in million short tons. Source: U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2006. Projected Australia export flow for 2004-2030. +763 +456 +3,114 +137 +22 Long-Term Coal Demand F
Slide 7: Major Market Drivers Provide Strong Outlook for Coal
DEMAND DRIVERS SUPPLY DRIVERS Global Coal Supply & Demand Major Market Drivers Provide Strong Outlook for Coal Regulatory Environment: Safety and Permitting High Cost of Competing Fuels High Steel Demand Strong U.S. Economic Growth Soaring Energy Demand in China and India Higher Utilization of Exist
Slide 8: International Thermal Coal Prices Continuing to Increase in Key Markets
Australia/Newcastle China/Qinhuangdao Columbia/Bolivar into ARA Russia/Vostochniy South Africa/Richards Bay PCI 2006 41.75 48 44 44 43.25 65 2007 54.35 67 51.5 71 51.1 67.5 International Thermal Coal Prices Continuing to Increase in Key Markets Australia Thermal Settlements Above Expectations Austra
Slide 9: China Suddenly Becomes Net Coal Importer in 2007
China Suddenly Becomes Net Coal Importer in 2007 2003 2004 2005 2006 2007 Thermal Coal 72 68 46 25 Metallurgical Coal 11 0 0 0 Lower Exports Tightening Pacific and Atlantic Markets Amounts in million short tons. Source: Industry reports and Peabody analysis. 83 68 46 25 ?
Slide 10: U.S. Market: 2007 Begins with Lower Production and Higher Coal Use
U.S. Market: 2007 Begins with Lower Production and Higher Coal Use Year-to-date U.S. coal production down 2.1%; total electricity generation up 4.3% Coal production cutbacks taking hold as higher-cost mines edged off cost curve New ruling threatens surface mines in Central Appalachia Railroad fluidi
Slide 11: A Multi-Step Process to Near-Zero Emissions from Coal
A Multi-Step Process to Near-Zero Emissions from Coal Building New, Efficient Supercritical & IGCC Coal Plants 15% Lower CO2 Emissions Demonstrating FutureGen and Developing Coal-to-Liquids with CCS Up to 90% Lower CO2 Emissions Retrofitting Existing Coal-Based Generation with Carbon Capture/Sequest
Slide 12: Company Overview
COMPANY OVERVIEW id
Slide 13: Peabody is the Largest Private-Sector Coal Company
Peabody is the Largest Private-Sector Coal Company Shenhua Rio Tinto BHP Arch China Coal Anglo-American Consol Xstrata Foundation Massey Yanzhou Alpha Natural Resources International Coal Source: Most recent company reports and websites, and SEC filings. Values are on a short-ton basis. Peabody sale
Slide 14: Peabody's Strategies to Excel in All Market Conditions
Peabody's Strategies to Excel in All Market Conditions Expanding internationally where markets and margins are strongest Tightly managing the cost structure Matching production with demand Exercising capital discipline Optimizing sales contracting and coal trading Key Initiatives Include...
Slide 15: Peabody Achieves Improving Performance in All Market Conditions
2001 2002 2003 2004 2005 2006 16 106 82 175 423 601 2001 2002 2003 2004 2005 2006 378 406 410 559 870 1080 Peabody Achieves Improving Performance in All Market Conditions 2001 2002 2003 2004 2005 2006 2577 2720 2815 3632 4644 5256 EBITDA In millions. Excludes charges related to 2003 pre-tax debt ext
Slide 16: Peabody's Long-Term Strategies Target Margin Expansion and Growth
Peabody's Long-Term Strategies Target Margin Expansion and Growth Executing the basics: best-in-class safety, operations and marketing Capitalizing on organic growth opportunities Expanding in high-growth global markets Participating in new generation and Btu Conversion projects
Slide 17: Executing the Basics: Safety is the Key
2002 2003 2004 2005 2006 Incidence Rate 5.39 4.45 4.14 2.82 3.05 Executing the Basics: Safety is the Key Peabody U.S. Incidence Rate
Slide 18: Executing the Basics: Leading Productivity
Executing the Basics: Leading Productivity Rawhide North Antelope Rochelle Industry Average (Underground) U.S. Industry Average (Surface) 2006 data. Source: U.S. Department of Labor Mine Safety & Health Administration. Peabody Operates the Most Productive Coal Mines #1 #2 Industry Average (SPRB) Pea
Slide 19: Continuous Improvement Results in Innovative, Low-Capital Returns
Continuous Improvement Results in Innovative, Low-Capital Returns Achieve industry-leading safety record Develop superior employee proposition Build culture / mindsets and behaviors focused on continuous improvement and individual capabilities Targeting improvement in operational EBITDA from product
Slide 20: World's Largest Coal Company: Peabody's Base Portfolio of Operations
Market 2006 2006 Position Sales Reserves Wyoming PRB #1 138 3,305 Midwest #1 39 4,170 Colorado #1 9 227 Southwest #2 13 980 Australia* #5 11 803 Appalachia #6 15 555 Venezuela #1 7 205 Short tons in millions World's Largest Coal Company: Peabody's Base Portfolio of Operations St. Louis Dominion Quee
Slide 21: Peabody Evaluating Strategic Alternatives for West Virginia / Kentucky Operations
Peabody Evaluating Strategic Alternatives for West Virginia / Kentucky Operations Our view: Assets will benefit from their own focus Operations and growth opportunities quite different from Peabody's other assets Represents a leading Eastern U.S. coal producer Diverse portfolio of thermal and met co
Slide 22: Excel Triples Peabody's Presence in Largest Export Nation
Excel Triples Peabody's Presence in Largest Export Nation Targeting 30 Million Tons in 2008
Slide 23: Peabody's Growing Global Presence
Peabody's Growing Global Presence 1st Qtr 2nd Qtr 1 99 2003 Excludes discontinued operations. International EBITDA Share Grows to 30% in 2006 1st Qtr 2nd Qtr 25 75 2006 United States International
Slide 24: Btu Conversion Technologies Expand Markets for Coal
Btu Conversion Technologies Expand Markets for Coal Bipartisan support from Senators Obama & Bunning, others for CTL President Bush alternative fuel initiative supportive of CTL Ethanol is also a major coal consumer Air Force sees half of Defense needs from CTL by 2020 China developing 27 new CTL pl
Slide 25: Peabody's Energy Reserves Are Unmatched
Continental U.S. Proven Oil Reserves 126 205 Peabody's Proven and Probable Coal Reserves Continental U.S. Natural Gas Reserves Largest U.S. Oil Company 181 117 Source: Annual reports for selected energy companies, Energy Information Administration's U.S. Crude Oil, Natural Gas, and Natural Gas Liqui
Slide 26: Btu Conversion = Value Conversion as We Narrow the Energy Valuation Gap
Source: Company filings and reports. Btu Conversion = Value Conversion as We Narrow the Energy Valuation Gap Market Capitalization on Btu-Equivalent Basis
Slide 27: Peabody Has an Outstanding Outlook
2003 2004 2005 2006 2007 2008 2009 2010 EBITDA 410 559 870 1080 1325 Revenue growth from strong sales contracts Global expansion in high-margin, high- demand regions Capital discipline and controlled production growth Leading reserves for long mine lives Btu Conversion markets $410 $559 $870 $1,080
Slide 28: May 2007 Peabody Energy BTU
May 2007 Peabody Energy NYSE: BTU BTU Investor Presentation