Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Brean Capital 2014 Global Resources and Infrastructure Conference
31 slides from Peabody Energy's conference presentation, May 28, 2014
Slide 1: Advanced Energy - Brean Capital 2014 Global Resources and Infrastructure Conference
Advanced Energy Brean Capital 2014 Global Resources and Infrastructure Conference May 28, 2014 Peabody Energy
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Peabody Energy Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. The company uses words such as “anticipate,” “believe,” “expect,” “may,” “forecast,” “project,” “should,” “estimate
Slide 3: Coal: World's Fastest Growing Major Fuel; Expected to Be Largest Energy Source
Coal: World’s Fastest Growing Major Fuel; Expected to Be Largest Energy Source Peabody Energy Emerging Countries Rely on low-cost coal to fuel growing economies and raise standards of living Developed Countries Returning to coal and adding new coal-fueled generation U.S. Demand Coal remains largest
Slide 4: Peabody Overview: Our Approach Begins by Answering a Question
Peabody Overview: Our Approach Begins by Answering a Question Peabody Energy How to Design the Best Positioned Coal Company? Global Scope Targeting highest-growth markets with tier one assets in U.S. West, U.S. Midwest and Australia Superior Asset Base 8 billion tons of coal reserves and ~500,000 ac
Slide 5: Global Coal Markets
Global Coal Markets 5
Slide 6: Expanding Global Energy Needs Lead to Rising Coal Demand
Expanding Global Energy Needs Lead to Rising Coal Demand Peabody Energy Global Energy Demand (MTOE) 2010 2020P 2030P 0 3,000 6,000 9,000 12,000 15,000 18,000 +38% Global Electricity Use (TWh) 2010 2020P 2030P 0 6,000 12,000 18,000 24,000 30,000 36,000 +69% Global Coal Demand (MTOE) 2010 2020P 2030P
Slide 7: Increasing Urbanization in Asia Continues to Drive Record Global Coal Demand
Increasing Urbanization in Asia Continues to Drive Record Global Coal Demand Peabody Energy 200,000 People Added to Cities Each Day Global Urban Population (Millions) 2010 2015P 2020P 0 1,000 2,000 3,000 4,000 Urbanization trends lead to greater coal use to fuel growing electricity and steel demand
Slide 8: Coal: Least Expensive and Most Reliable Form of Electricity Generation
Coal: Least Expensive and Most Reliable Form of Electricity Generation Peabody Energy Coal Oil Natural Gas Nuclear Solar/Wind Low Cost Baseload Capacity Safe to Transport Energy Dense Widely Available Technology Based Coal: Only a fraction of other fuels’ costs Provides baseload power; easily transp
Slide 9: Policies, Security and Economics Driving Greater Global Coal Use
Policies, Security and Economics Driving Greater Global Coal Use Peabody Energy United States Coal increases market share in past 2 years Europe Energy security crisis emphasizes advantage of coal South Africa One of many nations solving energy poverty with coal-fueled solutions Germany Highest coal
Slide 10: New Generation Expected to Drive Significant Global Thermal Coal Demand
New Generation Expected to Drive Significant Global Thermal Coal Demand Peabody Energy Coal to Account for 40% of Global Electricity Generation Growth Projected Seaborne Thermal Coal Demand (Tonnes in Millions) 2013E 2016P 2020P Atlantic Other Pacific China India 0 200 400 600 800 1,000 1,200 -15 +1
Slide 11: Metallurgical Coal Essential for Rising Steel Production in Emerging Countries
Metallurgical Coal Essential for Rising Steel Production in Emerging Countries Peabody Energy 2014 Steel Consumption Per Capita ~ 500 Million Tonnes of Metallurgical Coal Required to Reach Stable Stage Steel Intensity of Developed Asian Countries (850 Kg/Capita) India China Kg/Capita 0 200 400 600 8
Slide 12: Growing PCI Market Allows Steel Producers to Offset Higher-Cost Coke
Growing PCI Market Allows Steel Producers to Offset Higher-Cost Coke Peabody Energy Expected PCI Demand Growth (Tonnes in Millions) 2010 2015P 2020P 0 50 100 150 200 250 120 165 195 Pulverized Coal Injection a low-cost substitute for coke made from coking coal 1 ton of low-vol PCI replaces 1.3 tons
Slide 13: Global Seaborne Supply Growth to Slow; Fundamentals to Gradually Improve
Global Seaborne Supply Growth to Slow; Fundamentals to Gradually Improve Peabody Energy 2014 Global Exports (Tonnes in Millions) 0 200 400 Indonesia Australia Russia U.S. Colombia South Africa Canada Mongolia Other End of supply growth phase that began in 2012 on higher prices Most new projects have
Slide 14: China Expected to Follow U.S. Path of Greater Coal Use and Lower Emissions
China Expected to Follow U.S. Path of Greater Coal Use and Lower Emissions Peabody Energy U.S. Emissions Rate Declines 89% Since 1970; Coal Use Rises 173% Pittsburgh 1950s Today 1970 1980 1990 2000 2011 -100% -50% 0% 50% 100% 150% 200% Coal-Based Power Generation +173% GDP per Capita +116% Regulated
Slide 15: U.S. Coal Increases Market Share; Fuels 42% of Electricity Generation
U.S. Coal Increases Market Share; Fuels 42% of Electricity Generation in the U.S. Peabody Energy Share of U.S. Electric Power Sector Generation April 2012 April 2014 0% 10% 20% 30% 40% 50% Coal Natural Gas Nuclear Other 31% 31% 19% 19% 42% 23% 20% 15% U.S. coal use rebounds materially in the U.S. in
Slide 16: SPRB Prices at 30-Month High on Rising Coal Demand, Declining Stockpiles
SPRB Prices at 30-Month High on Rising Coal Demand, Declining Stockpiles Peabody Energy SPRB Utility Inventories and Spot Price (Stockpiles Days Use) January 2008 April 2014 Price Stockpiles $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 SPRB stockpiles below normal at 48 days use; ~50% below 2012 peak
Slide 17: SPRB and Illinois Basin: Million Ton Demand Increase Forecasted by 2016
SPRB and Illinois Basin: 100 Million Ton Demand Increase Forecasted by 2016 Peabody Energy Expected SPRB and ILB Generation Demand (Tons in Millions) 0 200 400 600 515 -60 +100 +60 615 SPRB and ILB +100 2013 Retirements Utilization Switching 2016P Significant coal-fueled generation of ~250 GW projec
Slide 18: Annual World Coal Use Expected to Grow Over Next Three Years
Annual World Coal Use Expected to Grow 700 Million Tonnes Over Next Three Years Peabody Energy Expected Global Coal Demand (Tonnes in Millions) 0 2,000 4,000 6,000 8,000 10,000 ROW China India 2013E 2,925 4,130 780 7,835 2016P 3,075 4,570 890 8,535 2020P 3,185 4,907 1,069 9,161 Coal is the world’s f
Slide 19: Peabody Energy Overview
Peabody Energy Overview 19
Slide 20: Delivering on Long-Term Journey to Reshape Peabody's Asset Base
Delivering on Long-Term Journey to Reshape Peabody’s Asset Base Peabody Energy Strategy Leading Position in High-Growth Low-Cost U.S. Basins Strong Global Presence in High-Growth Markets Actions 3 Major Acquisitions and Mine Expansions in Australia Increased PRB and ILB Investments Expansion of Trad
Slide 21: Peabody: World's Largest Private-Sector Coal Company
Peabody: World’s Largest Private-Sector Coal Company Peabody Energy Metallurgical and Thermal Coal Customers in 25+ Countries (From U.S) London Essen New Delhi Urumqi Ulaanbaatar Beijing Singapore Jakarta Balikpapan Brisbane, QLD Newcastle, NSW St. Louis, MO (to Europe) Mining Operations and Trading
Slide 22: Peabody's Core Strengths Targeted to Long-Term Value Creation
Peabody’s Core Strengths Targeted to Long-Term Value Creation Peabody Energy Superior Asset Base Leading reserve position Geographic diversity Access to high growth markets Leading presence in PRB and ILB Best In-Class Operations Continuous focus on safety Strong operating performance Technology-dri
Slide 23: Competitive Advantage: Productive, Low-Cost SPRB and Western Assets
Competitive Advantage: Productive, Low-Cost SPRB and Western Assets Peabody Energy Largest Producer and Reserve Holder in SPRB North Antelope Rochelle Mine World’s largest and most productive coal mine Produces ~110 million tons per year 2.3 billion tons of reserves El Segundo Mine Most productive U
Slide 24: Midwest Portfolio Well Positioned: Anchored by Key Mines
Midwest Portfolio Well Positioned: Anchored by Key Mines Peabody Energy 26 Million Tons Shipped in 2013; 3 Billion Tons of Reserves Peabody Mine Power Plant Illinois Indiana Kentucky Gateway Wildcat Hills/Cottage Grove Complex Bear Run Francisco Somerville Wild Boar Peabody Illinois Basin Operating
Slide 25: Peabody's Australia Strategy: Best Access to High-Growth Asian Market
Peabody’s Australia Strategy: Best Access to High-Growth Asian Market Peabody Energy Australia holds competitive advantage over other nations with mines close to ports; ports near high-growth markets Peabody has substantial high-quality coal base; 925 million tons of reserves Significant operational
Slide 26: Driving Further Progress at Australian Metallurgical and Thermal Mines
Driving Further Progress at Australian Metallurgical and Thermal Mines Peabody Energy Metallurgical Coal Operations Completing ramp up of new longwall top coal caving system at North Goonyella Mine New longwall at Metropolitan Mine targets higher productivity Completing successful owner-operator con
Slide 27: Well-Capitalized Platform Allows Low Capital Spending for Multiple Years
Well-Capitalized Platform Allows Low Capital Spending for Multiple Years Peabody Energy U.S. Major Projects SPRB Recapitalization Mine Development in Midwest and Southwest Australia Major Projects Owner-Operator Conversions in Australia Multiple Australian Mine Expansions Capex reduced 67% in 2013;
Slide 28: Peabody's Gross Margins Average Over 40% Above NYSE Peers
Peabody’s Gross Margins Average Over 40% Above NYSE Peers Peabody Energy 3-Year Gross Margins U.S. Peer Average Peabody 19% 27% Ongoing cost reduction efforts help to offset impacts of lower pricing Peabody margins greater than peer average through cycles Contracting strategies, location of assets a
Slide 29: Peabody Energy: Best Positioned Coal Company
Peabody Energy: Best Positioned Coal Company Peabody Energy Global Scope Targeting highest-growth markets with tier one assets in U.S. West, U.S. Midwest and Australia Superior Asset Base 8 billion tons of coal reserves and ~500,000 acres of surface land in U.S. and Australia Low Cost U.S. Position
Slide 30: Peabody Energy - Advanced Energy
Peabody Energy Advanced Energy PeabodyEnergy.com AdvancedEnergyForLife.com
Slide 31: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures Peabody Energy Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Quarter Ended Mar. 31 (1) Jun. 30, 2014 Low (2) High (2) Year Ended Dec. 31, 2013 (1) 2012 (1) Adjusted EBITDA (3) $176.9 $140 $200 $1,0
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