Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Debt Investor Presentation (January 2017)
44 slides from Peabody Energy's debt investor presentation, Jan 30, 2017
Slide 1: Peabody Energy Lender Presentation
Exhibit 99.1 PEABODY January 2017ENERGY LENDER PRESENTATION
Slide 2: Important Notice: Forward-Looking Statements
Statement Certain “forecast,” of differ section June conditions, connection other Company may Exchange’s trading confirmation confirm accepted terms relationships to operations, as successfully federal market; the equipment, equipment availability, acquisitions Company’s including, statements 2and e
Slide 3: Important Notice: Non-GAAP Financial Measures
Statement Non-GAAP reorganization Adjusted performance. depreciation, prepetition Margin The companies. operating Refer Important 3This Company non-GAAP presentation toper the EBITDA EBITDAR performance Notice on hedges ton Adjusted reconciliation Financial depletion Forward-Looking is items, ismeas
Slide 4: Agenda
4Walter Agenda Greg Executive Transaction Berube Company Glenn Hawkins Industry Vic Svec Summary Kellow Financial Amy Schwetz Transaction David –Introduction –Goldman – VP, Fundamentals Overview Lischer Senior –Information SeniorPresidentSachs VP, / Core Executive Details Goldman and VPFinance Inves
Slide 5: Transaction Summary
5•Transaction •Raising –$500 –$1.0 •In –$450 –$3.1 –$750 •Pro –Pro •Existing Note: emergence preliminary possible the Plan addition time Forma Forma contemplates Exit billion million its that new Second financing debt financial first estimated Summary to net the First of first First in Mandatorily C
Slide 6: Transaction Rationale and Financing Overview
6•Transaction ?Significant ?Right ?Increased ?Positioning Pre-Petition Post-Emergence ($ Exit Note: 2016 capital Total Contemplated in Financing millions) per Funded Pre-Petition lease sizing Form operational Rationale Debt reduction obligations. the Debt: Debt the provides 10-Q transaction Company
Slide 7: Capitalization and Sources and Uses
Capitalization Sources Source: Debtors’ gives the Pty agreement working represents 500 750 Forma2 ——New Notes—450 $(6,122) notes, Ltd, Repayment Reclamation effect Company x& one capital $Key and Prelim. Term the was 1,973 Uses to 450 ofEmployee midpoint cash (As the entered the Loan adjustment. of
Slide 8: Executive Summary
•Mix ofPeabody” •Major •“New –Excellent –Experienced –Commitment •Actions Peabody: improvements significant designed Executive asset management toand lasting builds tointernal Summary operating strengthen expected on: values team and8base across external capital with fresh company, structure events
Slide 9: Peabody Update: Significant Improvements
•Record •Low •Gross •SG&A •Sustained •Continued Peabody 9•Source: •Global •U.S. •Gas •Implementing •Targeting •Significantly •Eliminated •Working Capital Industry Company Seaborne prices coal unit margins Structure Company supply-demand reduced global Update: with costs shipments thermal improved lo
Slide 10: Industry Fundamentals / Outlook
INDUSTRY FUNDAMENTALS / OUTLOOK
Slide 11: Industry Fundamentals Overview
UNITED •Second •Long-term •Coal SEABORNE •Supply-demand •Seaborne Source: 11 Industry expected Peabody half Fundamentals Overview STATES prices thermal met utility 2016 demand tobalance hit Energy remain coal demand multi-year demand expected Global in a major expected latehighs expected rebounds 20
Slide 12: U.S. Coal Supply and Demand Outlook
•–2016 Source: Coal Natural 12 Nuclear ILB Other 2021 PRB 2017 Utility Coal PRB ~5014% 13% Expected 38% 40% and U.S. Basins GW expected and utility Gas Industry demand ILB Coal Illinois of 46% 49% coal plant Projected toDemand toprojected reports Remain consumption Basin continue retirements to and
Slide 13: Seaborne Thermal Coal Demand
040Transition 62 72 64 180 Other India China 200 160 120 80 Source: ROW –•subject ~375 New Global 13 ~85% Seaborne ASEAN Majority Shift Coal GW Asia toward New to of Industry significant of Generating capacity additions of thermal towards Coal Coal new enhanced reports Generating Capacity capacity f
Slide 14: Seaborne Metallurgical Coal Demand
•–0Long-term Source: 04Long-Term 187 65 76 183 60 51 14 80 Seaborne ROW China India 200 160 2021 2016 Seaborne Near-term Growth 120 Industry Met led met Seaborne balancing met by Imports coal India, coal reports; demand Metallurgical pricing supply which Peabody expected driven and is expected deman
Slide 15: Changing U.S. Policy and Political Landscape
•Changes •At •Commitment •Most •Advancing Peabody’s •Implement •Encourage •Expand •Level •Promote Changing 15 macro notable playing research global expected U.S. level, Policy high-efficiency energy clean potential to field Political investments we coal Priorities and coal from agenda believe throug
Slide 16: Company Overview / Key Credit Strengths
COMPANY OVERVIEW / KEY CREDIT STRENGTHS
Slide 17: Peabody at a Glance
Peabody •–Fortune 25 6.3 $4.7 2016 ~500,000 ~6,700 Note: information differ Dec. 17A Target Core Management Americas Aggregating Marketing/Trading Lean/scalable operations leader billion billion 31, preliminary materially Information sectors Skilled operating 500 2016 Energy: Acres in Tons and avail
Slide 18: Experienced Management Team
Experienced 18 •Held Kemal •Brings Verona •EVP •20+ Amy •Named •Broad Charles •President •Extensive Bryan •Group •30+ Combines Glenn years Schwetz and multiple Galli Williamson financial Dorch Executive, 30+ Meintjes President CFO Kellow Chief More of of experience years Management Americas Australi
Slide 19: Key Credit Strengths of New Peabody
“New Leading 19 Cost Strong 123Sustainable 4 Improvements, Peabody” U.S. CoalCapital Platform, Producer, Demonstrates Structure Portfolio Access Unmatched to Optimization Key Asia-Pacific Credit AssetsStrengths Demand
Slide 20: Leading Coal Producer, Unmatched Assets
Leading Coal Producer, Unmatched Assets
Slide 21: Leading Coal Producer with Unmatched Assets
12% Run 18% 32% 17% 21% Australia Midwestern PRB Western Cottage ILLINOIS 21 Gateway Wildcat Bear INDIANA Francisco Wild Somerville NEW QUEENSLAND Middlemount Moorvale Coppabella Millennium North Wambo Metropolitan Wilpinjong Boar SOUTH Antelope Wambo Goonyella Open-Cut Grove Hills U.S. North Therma
Slide 22: Operational Results Reveal Strong Underlying Business
Note Margin Operating •Productivity, 22 –Australian •Strategic focus Margins met per cost on coal ton reductions Reflect operational reflects margins Cost non-GAAP drive reflect excellence Reductions 25% impact metrics gross toin of further margins All 2016 is Regions equal drive average averaged to
Slide 23: Strong U.S. Platform; Access to Asia-Pacific Demand
Strong U.S. Platform; Access to Asia-Pacific Demand
Slide 24: Contracted Sales and Asia-Pacific Access
Note: Contracted breakdown shown as of Dec. 31, 2016. Historical margin percentages are equal to total U.S. segment Adjusted EBITDA divided by total U.S. segment revenue. Adjusted EBITDA is a non-GAAP measure; refer to the reconciliation to its nearest GAAP metric in Peabody’s 2015 10K Filing. Sourc
Slide 25: Cost Improvements and Portfolio Optimization
3) Cost Improvements and Portfolio Optimization
Slide 26: Gross Margin and Productivity Benchmarking
Source: Public company reports. 2015 EIA data; ABB Velocity Suite. Note: Gross margin benchmarking reflects average 2014 and 2015. Gross margin percentage calculated as segment Adjusted EBITDA divided by segment revenue. Refer to the reconciliation of segment Adjusted EBITDA in Peabody’s 2015 10K Fi
Slide 27: Cost Structure Enhances Competitiveness
02,000 27 •Australian ~3,700 ~5,900 Workforce Employees Contractors 2016 6,000 4,000 •Average •Pursuing Capital Significant $90 $60 $30 $47 $89 YTD USD $400 $200 $0 Sustaining Projects 2015 2014 2013 2012 $800 ($ $41 $750 Note: in2012 millions) $600 Operating 2016 YTD Expenditures operating portfoli
Slide 28: Lowest SG&A Among Public U.S. Coal Peers
5.2% 3.7% 3.3% 3.2% 2.7% Q3 Peabody 28 10% 8% 6% 4% 2% 0% –•Source: 03Third 2013 2012 1,200 900 600 2016 2015 ~700 ~1,000 ~1,100 ~1,200 SG&A 00 Actions Lowest SG&A Eliminated Closed Streamlined Implemented 162014 ~600 8.2% Quarter Other Headcount Best Public remains 10 SG&A include: Among internatio
Slide 29: Sustainable Capital Structure
4) Sustainable Capital Structure
Slide 30: Strengthened Capital Structure
30 in2015 Annual Equity •Targeting –Balance –Annual •$1.5 •Pro Pre-Emergence $1,970 $7,187 FY $465 Pro Note: $3,138 Post-Emergence $242 obligations. Strengthened ($ Forma forma millions) billion Pre-Emergence Value Interest interest sheet capital capital Pro of Capital debt new Balance Expense forma
Slide 31: Reclamation and Self-Bonding Approach
Peabody •–31 Self-bonding Pursuing Planning Land Concurrent $185 Peabody Targeting $1.13capital Discussions Exit Reclaimed $560 million restoration million billion Approach Continues recognized mix reductions ~$200 1.7 reclamation structure ongoing spent requirements of paid ofacres self-bonding sel
Slide 32: Key Operational and Investment Drivers
KeyAustralia, Social Return Operational •Aggressive 32 –Constant –Protect –Excellence •Emphasis –In •Capital •Management –Capitalizing –Pursuing •Leading –Focus U.S., Drivers License Orientation on discipline social best voice drive higher-return EBITDA high-efficiency, on & pursuit in ofon mid-tier
Slide 33: Financial Information
FINANCIAL INFORMATION
Slide 34: Financial Results: Revenue
$4,715 $5,609 $6,792 $7,014 $6,000 $4,000 $2,000 Financial 2016 2015 2014 2013 Revenue •34 Note: statement procedures, 2016Dollars Fundamentals Continued results $- Results $8,000 offinal focus the in reflect rebound company’s millions; adjustments Impacted on pricing costs inInformation and 2H By f
Slide 35: Capital Expenditures and Ending Cash
Continued •-Capital Note: the adjustments $200 $600 $404 $471 $605 LBAs $298 $800 $400 $- $872 2016 2015 2014 2013 No Current Lowest Completed Previous 2016 company’s new $400 2014 Capex $444 $261 $1,200 Ending Dollars ending Expenditures capital capex LBAs capital Focus and 5-year Cash in cash fina
Slide 36: Peabody Strengths and Business Plan
Peabody •Building 36 Asia-Pacific Advocacy Thermal Excellent Safety, Geographic, U.S. Lean, Improved Ongoing Optimizing Pursuing asset scalable land Energy on coal operational improved workforce balance base of Strengths… portfolio restoration seaborne product HELE platform operating to Continue she
Slide 37: Transaction Summary
TRANSACTION SUMMARY
Slide 38: First Lien Secured Term Loan Summary Terms
1st Lienhave exceptions would LIBOR prepayments commencing baskets/carve-outs CovenantsFloor Secured •None (the awith 2nd •1.00% “Guarantors”) Term priority excess fiscal to be Original Loan agreed, year cash lienBorrower 2019) Ranking flow on Issue including current and •Proceeds Discount •Peabody
Slide 39: Expected Timeline
30-Jan • Launch Bank Meeting 08-Feb • Lender Commitments Due on 1st Lien Secured Term Loan 09-Feb • Price and Allocate 1st Lien Secured Term Loan Early April • Expected Closing and Emergence Funding from Bankruptcy
Slide 40: Appendix
APPENDIX
Slide 41: Adjusted EBITDA Reconciliation
Reconciliation Note: 41 statement procedures, non-GAAP income restructuring(22) extinguishment(30) EBITDA482$ Corporate U.S. EndedDecember Mining10Australia Mining83 Dollars taxes(1,200)$ of hedging measures final the in 492$ of Australia company’s millions; 31, adjustments (22) Non-GAAP results—for
Slide 42: New Second Lien Secured Notes Summary Terms
New 2nd Ranking priority indebtedness •101% payable Covenants Mandatory lien annually •Senior Lien •Identical on outstanding Notes current Secured •Mandatory Prepayment Summary toasset permitted Security on collateral Effective prepayments, •The Terms 1st •2nd lesser Lien New Date securing priority
Slide 43: Mandatorily Convertible Preferred Equity Summary Terms
Mandatorily Convertible Preferred Equity Summary Terms Mandatorily Convertible Preferred Equity (Private Placement) Issuer •Peabody Energy Corporation The Preferred Equity •Mandatorily convertible preferred equity Amount •$750 million Maturity •None Private Placement Premiums •An initial •2.5% month
Slide 44: Rights Offering and Backstop Commitment Summary Terms
Rights Offering and Backstop Commitment Summary Terms Rights Offering and Backstop Commitment Amount •$750 million Description •Consists purchase (ii) —Pro Incentive —Initial the •Rights Creditors warrants fully forma shall diluted Parties price Plan of rights exercisable for beShares equal offered
Peabody Energy — Debt Investor Presentation (January 2017) on 6ix