Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Barclays CEO Energy/Power Conference 2011
30 slides from Peabody Energy's conference presentation, Sep 8, 2011
Slide 1: Barclays CEO Energy/Power Conference
Barclays y CEO Greg Boyce Ch i Chairman and d Energy/Power Chief Executive Officer Conference September p 8,, 2011
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: Peabody Energy: Expanding Global Reach to Serve Coal's Supercycle
Peabody Energy: Expanding Global Reach to Serve Coal’s Supercycle ● Unmatched international growth pipeline with major Australia and Asia projects ● Largest position in fastest growing U.S. regions ● Significant upside with earnings growth and multiple expansion 3
Slide 4: Global Coal Market Fundamentals Remain Strong
Global Coal Market Fundamentals Remain Strong China July YOY: Coal Generation Up p 19%; Steel Production Up 15%; Coal Imports a Record 17 MT Major U.S. Summer Europe Raises Coal Use Inventory Drawdowns on Lower Nuclear Burn and High Gas Prices Major Japan Utility New Air Rules Likely to Coal Use Up
Slide 5: 2011: Targeting Peabody's Best Year
2011: Targeting Peabody’s Best Year Peabody EBITDA 2,500 Target ● First half 2011 2 2,125 125 – 2,325 iincreases: 2,000 – Revenues +18% 1,815 – EBITDA +25% n Millions 1,500 – EPS +47% ● 2011 Targets: g $ in 1,000 910 EBITDA of $2.125 – $2.325 billion; 500 EPS off $3.70 $3 0 to $4 $4.15 1 2006 2007 2
Slide 6: Peabody's Earnings Now Balanced with Australia/Asia
Peabody’s Earnings Now Balanced with Australia/Asia ● Peabody continues transformation to global coal company g p y ● Multiple global initiatives increase earnings leverage to stronger international markets Australia 17% U.S. Australia 47% 53% U.S. U S U.S. 83% >99% 2003 2007 YTD 2011 Percentages re
Slide 7: Global Coal Markets Poised for Long-Term Growth
Global Coal Markets Poised for Long-Term Growth
Slide 8: World in Early Stages of Supercycle for Coal
World in Early Stages of Supercycle for Coal Asia Represents 90+% of 4 Billion Tonne Coal Demand Growth +60 +160 +2,320 2 320 +910 +580 +30 Coal Demand Growth 2008 - 2035 (Tonnes in Millions) U.S. growth presented in short tons. Source: World Energy Outlook 2010, International Energy Agency; Annual
Slide 9: India, Brazil and China Upside: ~1.2 Billion Tonnes of Met Coal Growth
India, Brazil and China Upside: ~1.2 Billion Tonnes of Met Coal Growth Major Increases in Steel Intensity to Reach Maturity Steel Consumption Per Capita 1200 ● Brazil and India driving demand through 1000 Taiwan increased urbanization (884 kg) Sttable Stage andd hi higher h steel t l Japan S (807 kg
Slide 10: Global Metallurgical Coal Use Expected to Rise >500 Million Tonnes by 2020
Global Metallurgical Coal Use Expected to Rise >500 Million Tonnes by 2020 Approximately 50 Million Tonnes of New Supply Required Each Year Global Met Coal Demand Growth CAGR (Tonnes in Millions) 2010 920 2015 1,185 ~30% ~5% 2020 1,440 1 440 ~60% ~5% Australia to Supply Majority of Seaborne Metallur
Slide 11: Global Coal-Fueled Generation Growing Dramatically
Global Coal-Fueled Generation Growing Dramatically ● ~400 GW of new New Coal Coal--Fueled Generation 2011 – 2015 (GW) (GW) generation requires 1 4 billi ~1.4 billion ttonnes off new annual thermal coal supplyy over the India 75 next five years China ● Nearly 300 million 250 Other Asia tonnes of new
Slide 12: Global Supercycle Story Still in Early Chapters
Global Supercycle Story Still in Early Chapters China’s 12th Five Five--Year Plan ~$440 ~$400 ~$185 55,000 Billion Billion Billion Miles Power Electricity Urban Length of Generation Grid Subway Railroad Investments Investments Investments Tracks More Than $1 Trillion in Investments In estments in Ke
Slide 13: India Likely to be the World's Fastest-Growing Coal Importer
India Likely to be the World’s Fastest-Growing Coal Importer ● GDP expected to rise from $1.9 trillion to $10 trillion by 2025 ● Middle class expected to rise 10-fold to 580 million by 2025 ● India I di accelerating l ti spending di on infrastructure in 12th five-year plan – 10% CAGR Infrastructure
Slide 14: Seaborne Coal Pricing: Continued Positive Long-Term Trend
Seaborne Coal Pricing: Continued Positive Long-Term Trend Peabody Levered to Rising Prices Through Australia Platform Benchmark Met Coal Prices Newcastle Thermal Coal $350 $140 $120 - $130 $285 $130 $300 $120 $250 $110 $100 $200 $90 $150 $80 $100 $70 $48 $60 $50 $50 $53 $0 $40 2002 2004 2006 2008 Q2
Slide 15: PRB and Illinois Basin Expected to Grow as Appalachia Declines
PRB and Illinois Basin Expected to Grow as Appalachia Declines Expected U.S. Coal Demand ● CAPP challenged by Change 2010 – 2015 permitting, p g ggeology, gy (Tons in Millions) safety and significant 80 60-70 increases in 60 45-55 cost structure 40 ● PRB and ILB demand growing from new plants, 20 in
Slide 16: U.S. Coal Demand Boosted by Low Stockpiles, Higher Exports
U.S. Coal Demand Boosted by Low Stockpiles, Higher Exports ● Muted GDP dampens 210 U.S. Utility Inventory Levels generation g 200 2009 ● Summer stockpile 190 Milllion Tons draws above average, 180 Down ~20% From 2009 Levels PRB inventories at 170 2011 160 targeted levels for first 150 2008 time in s
Slide 17: Peabody Targeting Multiple Growth Projects
Peabody Targeting Multiple Growth Projects
Slide 18: Peabody Progressing Toward "Asia 100" Goal
Peabody Progressing Toward “Asia 100” Goal ● Australia exports ● China JVs ● Tavan Tolgoi ● Indonesia supplies ● PRB to Asia 18
Slide 19: Major Organic Growth Projects Well Under Way in Australia
Major Organic Growth Projects Well Under Way in Australia Expected Australia Volumes 35 – 40 40 T Tons i Millions in Milli 12 – 15 28 – 30 30 27 9 – 10 10 20 15 – 17 12 – 13 11 10 6 6.5 ~8 Expansions are in 0 process at Burton, Burton 2010 2011 2015 Wilpinjong, Metropolitan and other operations Dome
Slide 20: Australia Growth Expands Seaborne Access to Pacific Markets
Australia Growth Expands Seaborne Access to Pacific Markets Planned Expansions Abbot Point (Tons in Millions) Mine Add’l MTPY First Coal Burton Dalrymple Bay North Goonyella Goonyella Lower Seam Eaglefield Burton 1 – 2 HCC Late 2012 Millennium Gl d t Gladstone N. Goonyella 1 – 2 HQHCC 2014 Brisbane
Slide 21: Expanding Met Coal Position With Recommended Macarthur Coal Offer
Expanding Met Coal Position With Recommended Macarthur Coal Offer ● Peabody and ArcelorMittal in Queensland 60/40 joint venture to acquire M Macarthur th Coal C l Abbot Point ● Offering A$16.00 Burton Dalrymple Bay ((A$4.8 billion)) North Goonyella Goonyella Lower Seam Eaglefield Coppabella Moorvale
Slide 22: Pursuing Development of One of China's Largest Mines
Pursuing Development of One of China’s Largest Mines ● Advancing 50 million ton- per-year thermal project in Heilongjiang Xinjiang Province Jilin ● Xinjiang likely to be Xinjiang Liaoning world’s ld’ ffastest t t growing i Inner Mongolia Beijing j g G Gansu Hebei Tianjin coal region Ningxia Shanxi S
Slide 23: Advancing Multiple Projects to Serve Growing Demand Within China
Advancing Multiple Projects to Serve Growing Demand Within China Yankuang Wucaiwan Mine ● Pursuing development of 20 million illi ton-per-year surface f mine i in Xinjiang ● Would include 2 GW supercritical power plant and SNG facility Lu’an Shaxi Mine ● Pursuing g development p of 15 million ton-pe
Slide 24: Advancing Interest in World's Best Undeveloped Met Coal Reserve
Advancing Interest in World’s Best Undeveloped Met Coal Reserve ● Selected by Government of Mongolia for Tavan Tolgoi development – Announced as a 24% participant – Development of Western Block; Eastern block to be contractor mined contractor-mined – ~1 billion tonnes of resources; majority expected
Slide 25: Peabody Leveraging Leading PRB and Illinois Basin Presence
Peabody Leveraging Leading PRB and Illinois Basin Presence Illinois Basin to… to ● New York, South Carolina and Florida ● Europe and India through Gulf of Mexico Powder River Basin to… Peabody’s North Antelope Rochelle ● Asia via West Coast Mine produces more than 100 million tons per year of ● Euro
Slide 26: Advancing Multiple Projects in U.S.
Advancing Multiple Projects in U.S. ● Bear Run ● West Coast Exports – Growing g to ~8 MT in 2012 – Developing plans for PRB exports t to t Asia A i att scale l ● Gateway North – Expanding ~40% to 4.5 MT by 2014 ● Powder River Basin – Addingg ultra-class trucks; Modest volume growth in 2011 – Accessi
Slide 27: Peabody's Unmatched Growth Pipeline
Peabody’s Unmatched Growth Pipeline 2011 2011 2012 2013 2014 2015 Beyond Millennium Metropolitan 1 – 2 MTPY SHCC/PCI 1 MTPY HCC Burton Australia 1 – 2 MTPY HCC Wilpinjong N. Goonyella LTCC 2 – 3 MTPY Thermal 1 – 2 MTPY HQHCC Wambo Goonyella Lower ~ 3 MTPY Thermal/PCI 3 – 4 MTPY HQHCC Potential Macar
Slide 28: Solid Financial Strength to Fund Growth Pipeline
Solid Financial Strength to Fund Growth Pipeline Peabody’s • $1.2 billion in cash Debt--to- Debt to-Capital Ratio (%) Cash g operating • Strong p g cash flows Target Zone 40 - 60 • $1.5 billion available Credit C dit under d creditdit ffacility ilit Facility • BB+/Ba1 credit rating Debt/Project • Ba
Slide 29: Peabody Positioned for Significant Growth and Value Creation
Peabody Positioned for Significant Growth and Value Creation Multiple Value- Expansion Significant g Adding to Return Organic Expanding Growth Acquisitions to More in Fastest Capability and Joint Traditional Major Growing Ventures in U.S. and Levels Cash Flo Flow Gl b l Global Australia Industry Gen
Slide 30: Barclays CEO Energy/Power Conference
Barclays y CEO Greg Boyce Ch i Chairman and d Energy/Power Chief Executive Officer Conference September p 8,, 2011
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