Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Non-Deal Roadshow (November 2005)
28 slides from Peabody Energy's roadshow presentation, Nov 15, 2005
Slide 1: Investor Meetings - November 2005
Investor Meetings - November 2005 NYSEBTU
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 the Securities Act of 1933 and the Securities Exchange Act of 1934 and is intended to come within the safe-harbor protection provided by those sections. Our forward-lo
Slide 3: Coal Fundamentals Are Outstanding
Coal Fundamentals Are Outstanding Strong GDP Growth Global economic growth fueled by twin engines from China & U.S. New Generation and Markets 449 gigawatts of new global capacity; New focus on Btu Conversion technologies Rising Energy Demand All energy forms at record levels; Coal the fastest growi
Slide 4: Coal Resources Are Meeting Higher Demand
Source: World Energy Outlook 2004, International Energy Agency. BP Statistical Review of World Energy, 2005. Global Energy Demand Million Tonnes of Oil Equivalent Coal Resources Are Meeting Higher Demand Coal Growing 5 Times Faster Than Expected +52% +70% +146% +2,286% +57% +51% +89% +10% Actual * *
Slide 5: Global Coal Use Soars 25%, or 1.1 Billion Tons, in Three Years
Global Coal Use Soars 25%, or 1.1 Billion Tons, in 3 Years Three-Year Percent Change in Global Energy Consumption Source: BP Statistical Review of World Energy, 2003, 2004 & 2005. Coal Natural Gas Hydro Oil Nuclear 2002 - 2004 25.3 9.1 7.6 5.9 3.9 25.3% 2001 - 2004 Change 9.1% 5.9% 7.6% 3.9% Coal Na
Slide 6: 1/1/1998 2/1/1998 3/1/1998 4/1/1998 5/1/1998 6/1/1998 7/1/1998 8/1/1998 9/1/1998 10/1/1998 11/1/1998 12/1/1998 1/1/19…
1/1/1998 2/1/1998 3/1/1998 4/1/1998 5/1/1998 6/1/1998 7/1/1998 8/1/1998 9/1/1998 10/1/1998 11/1/1998 12/1/1998 1/1/1999 2/1/1999 3/1/1999 4/1/1999 5/1/1999 6/1/1999 7/1/1999 8/1/1999 9/1/1999 10/1/1999 11/1/1999 12/1/1999 1/1/2000 2/1/2000 3/1/2000 4/1/2000 5/1/2000 6/1/2000 7/1/2000 8/1/2000 9/1/20
Slide 7: U.S. Forecasts Largest Increase in Coal Generation in Decades
U.S. Forecasts Largest Increase in Coal Generation in Decades * Timing not yet committed. Source: U.S. Department of Energy's National Energy Technology Laboratory. Planned Coal-Fueled Plants Represent 250 MTPY of Coal Use
Slide 8: U.S. Coal Stockpiles at Record Low Levels
U.S. Coal Stockpiles at Record Low Levels 2000 2001 2002 1999 2003 Jan. Mar. Apr. May Feb. Aug. Jun. Jul. Sep. Oct. Nov. Dec. Source: EIA Electric Power Sector Coal Stocks, January 1999 - August 2005; Peabody estimates, September - November 2005. 2005 2004 Coal Inventories at Generating Customers
Slide 9: Has Best Leverage to Strongest Markets
Peabody Has Best Leverage to Strongest Markets Values represent average over-the-counter (OTC) prices per various broker sources for ratable delivery in subsequent calendar year. This is a thinly traded market for small quantities of coal. (Updated Nov. 1, 2005.) Peabody is #1 in Colorado, the Midwe
Slide 10: Has Best Leverage to Strongest Markets
Peabody Has Best Leverage to Strongest Markets 2006 2007 2008 Dec. 31, 2004 70 135 180 Sept. 30, 2005 25 100 170 65 - 75 20 - 30 130 - 140 95 - 105 175 - 185 165 - 175 Significant Upside Due to Unpriced Volume
Slide 11: Ultra-Low Sulfur PRB Coal Warrants a Premium
Jan. 2005 Nov. 2005 Price Per Ton 6 15.5 Sulfur Premium 1.15 3 BTU's Ultra-Low Sulfur PRB Coal Warrants a Premium Source: Coal and Energy Price Report, January 5, 2005 and November 4, 2005. $7.15 $18.50 Jan. 2005 (Q2 2005 Delivery) Nov. 2005 (Q1 2006 Delivery) 8,800 Btu/lb, 0.8 lb/MM Btu SO2 Implied
Slide 12: U.S. Coal Has Experienced Very Long Market Cycles
U.S. Coal Has Experienced Very Long Market Cycles Nominal dollars. Source: Bureau of Mines prior to 1949, EIA data 1949 - 2002. Peabody estimates 2003-2004. U.S. Bituminous Coal Prices Dollars Per Ton (logarithmic scale) 5 yrs 15 yrs 16 yrs ? 1900 1930 1920 1910 1940 1950 1960 1970 1980 1990 2000 20
Slide 13: Best Positioned to Grow Shareholder Value
Peabody Best Positioned to Grow Shareholder Value Growth Fueled By... Executing the basics Capitalizing upon organic growth opportunities Expanding into global markets Participating in new generation and Btu Conversion technologies
Slide 14: Executing the Basics Improves Safety
2003 2004 2005* East 4.68 4.15 2.75 Executing the Basics Improves Safety 4.68 4.15 2.75 Reportable U.S. accident incidence rate per 200,000 miner hours worked. * Through third quarter 2005. Accidents Per 200,000 Hours Worked Managing Safe, Low-Cost Operations Peabody's North Antelope Rochelle Mine w
Slide 15: Operates Most Productive Mines
Peabody Operates Most Productive Mines Rawhide Caballo North Antelope Rochelle Wyodak Black Thunder Industry Average (Underground) Industry Average (Surface) First half 2005 data. Source: U.S. Department of Labor Mine Safety & Health Administration. Peabody Mine Most Productive U.S. Mines #1 #2 #3
Slide 16: Aggressively Manages Capital and Costs
Peabody Aggressively Manages Capital and Costs "Capital efficiency" projects Process improvement initiatives Fuel, steel and tire consumption teams Conditioned-based maintenance programs Creation of Peabody training centers training centers training centers training centers training centers training
Slide 17: Has Unmatched Organic Growth Opportunities
Peabody Has Unmatched Organic Growth Opportunities Source: 2004 company reports & websites, SEC filings, and Peabody estimates. Values are on a short-ton basis. Rio Tinto BHP CONSOL Arch Foundation Anglo-American Xstrata Natural Resource Partners Massey Yanzhou Coal North American Penn Virginia Alph
Slide 18: Developments and Expansions Add Up to MTPY by 2010
Developments and Expansions Add Up to 75 MTPY by 2010 Peabody Seeks to Double Prior Five-Year Volume Growth
Slide 19: Expanding to Serve High Growth Markets
Peabody Expanding to Serve High Growth Markets 1 Billion Ton Sales Book Serves Customers in 16 Countries Source: U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2004.
Slide 20: Expanding to Serve High Growth Markets
Peabody Expanding to Serve High Growth Markets United States Largest economy growing at $350 billion per year World's largest coal reserves Growing 25 million tons per year U.S., China, India Represent 90% of Expected Coal Growth China Fastest-growing economy; 9% GDP growth for two decades Growing b
Slide 21: Emerging Markets Create Significant Demand Upside
Emerging Markets Create Significant Demand Upside Today 2025 Environmental Retrofits Advanced Combustion Coal Gasification Carbon Sequestration Emissions Current Markets Technologies Expand Current Markets and Create New Markets Gasification for Pipelines Liquefaction Hydrogen Production Emerging Ma
Slide 22: Participating in Multiple Btu Conversion Opportunities
Peabody Participating in Multiple Btu Conversion Opportunities Coal to Natural Gas (Industrial) 30% ownership in Econo-Power International PRB and Illinois Basin coal transformed into low- Btu gas Cost effective at $4 to $5 per MM Btu Coal to Natural Gas (Pipeline) Agreement with Arclight to evaluat
Slide 23: Peabody's Reserve Base is Unparalleled
Continental U.S. Proven Oil Reserves 121.5 184.9 Peabody's Proven & Probable Coal Reserves Continental U.S. Natural Gas Reserves Largest Energy Co. Proven Oil & Gas Reserves 160.2 108.3 Source: 2004 annual reports for selected energy companies, Energy Information Administration's U.S. Crude Oil, Nat
Slide 24: Has Best Reserves to Participate in Btu Conversion
Peabody Has Best Reserves to Participate in Btu Conversion Peabody's 9.6 Billion Tons of Coal Represents 17,586 TERAWATT HRS. OF ELECTRICITY 5 years of U.S. electricity demand 243 TCF OF NATURAL GAS 10 years of U.S. natural gas demand 1.43 TRILLION GALLONS OF DIESEL 42 years of U.S. trucking fuel de
Slide 25: Btu Conversion Has Tremendous Value-Add Potential
Btu Conversion Has Tremendous Value-Add Potential Coal 9.6 billion tons x $30/ton $288 billion Electricity 17,586 TWh x $40/MWh $700 billion Natural Gas 243 tcf x $7.50/mcf $1.8 trillion Diesel Fuel 1.43 trillion gallons x $2.50 $3.6 trillion Oil & Gas Companies Valued at 40x to 60x Coal on a Btu Ba
Slide 26: Peabody's Record is Unmatched
2001 2002 2003 2004 16 105.5 95 178 Peabody's Record is Unmatched 2001 2002 2003 2004 381 406.1 410.3 559 EBITDA In millions. All years based on calendar 12-month performance. Excludes operations discontinued in 2001. 1 Income from continuing operations, excluding charges related to 2003 pre-tax deb
Slide 27: Peabody Delivers Continued Growth
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 EBITDA 381 406 410 559 850 Earnings Per Share 0.1 0.98 0.865 1.375 2.625 Leading leverage to rising markets Expanding margins Outstanding organic growth profile Significant emerging markets Best record of performance EBITDA (In Millions) Earnings Per
Slide 28: Investor Meetings - November 2005
Investor Meetings - November 2005 NYSEBTU