Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Barclays CEO Energy/Power Conference 2011
30 slides from Peabody Energy's conference presentation, Sep 7, 2011
Slide 1: Barclays CEO Energy/Power Conference
Barclays CEO Energy/Power Conference Greg Boyce Chairman and Chief Executive Officer September 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
Slide 4: Global Coal Market Fundamentals Remain Strong
Global Coal Market Fundamentals Remain Strong Major U.S. Summer Inventory Drawdowns New Air Rules Likely to Lift Value of Ultra-Low Sulfur PRB Coal Europe Raises Coal Use on Lower Nuclear Burn and High Gas Prices China July YOY: Coal Generation Up 19%; Steel Production Up 15%; Coal Imports a Record
Slide 5: 2011: Targeting Peabody's Best Year
2011: Targeting Peabody’s Best Year Peabody EBITDA $ in Millions 2006 910 2007 2008 2009 2010 1,815 2011 Target 2,125-2,325 First half 2011 increases: Revenues +18% EBITDA +25% EPS +47% 2011 Targets: EBITDA of $2.125 – $2.325 billion; EPS of $3.70 to $4.15 EPS is adjusted diluted EPS from continuing
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 Multiple global initiatives increase earnings leverage to stronger international markets 2003 U.S. >99% 2007 U.S. 83% Australia 17% YTD 2011 U.S. 47% Australia 53% Percentages represent share
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 U.S. growth presented in short tons. Source: World Energy Outlook 2010, International Energy Agency; Annual Energy Outlook 2011 Early Release, Energy Information Administration; Peabody analysis.
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 Brazil and India driving demand through increased urbanization and higher steel consumption Both countries rely on imports for majority of met coal needs India’s Ministry of St
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 Australia to Supply Majority of Seaborne Metallurgical Coal Growth Global Met Coal Demand (Tonnes in Millions) 2010 920 2015 1,185 2020 1,440 2015 Growth~30%; C
Slide 11: Global Coal-Fueled Generation Growing Dramatically
Global Coal-Fueled Generation Growing Dramatically ~400 GW of new generation requires ~1.4 billion tonnes of new annual thermal coal supply over the next five years Nearly 300 million tonnes of new coal demand for generation expected this year alone Asia represents 90% of expected growth in new coal
Slide 12: Global Supercycle Story Still in Early Chapters
Global Supercycle Story Still in Early Chapters China’s 12 th Five-Year Plan ~$440 Billion Power Generation Investments ~$400 Billion Electricity Grid Investments ~$185 Billion Urban Subway Investments 55,000 Miles Length of Railroad Tracks More Than $1 Trillion in Investments in Key Infrastructure
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 accelerating spending on infrastructure in 12 th five-year plan 10% CAGR > $1 trillion investments; Double p
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 2002 $48 Q4 2011 $285 Newcastle Thermal Coal 2005 $53 2013 $120 - $130 Unpriced Position 2011: 2 – 3 million tons 2012 and beyond: 100% open Unpriced Positi
Slide 15: PRB and Illinois Basin Expected to Grow as Appalachia Declines
PRB and Illinois Basin Expected to Grow as Appalachia Declines CAPP challenged by permitting, geology, safety and significant increases in cost structure PRB and ILB demand growing from new plants, increasing exports and fuel switching in Eastern markets Ultra-low sulfur PRB demand to increase from
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 generation Summer stockpile draws above average, PRB inventories at targeted levels for first time in several years Coal exports increase out of East, West and Gulf coasts Greater recovery seen in 2012 and beyond Btu’s Unpr
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
Slide 19: Major Organic Growth Projects Well Under Way in Australia
Major Organic Growth Projects Well Under Way in Australia Expansions are in process at Burton, Wilpinjong, Metropolitan and other operations Expected Australia Volumes 2010 Domestic Thermal 6 Seaborne Thermal 11 Met 10 Total 27 2011 Domestic Thermal 6.5 Seaborne Thermal 12-13 Met 9-10 Total 28-30 20
Slide 20: Australia Growth Expands Seaborne Access to Pacific Markets
Australia Growth Expands Seaborne Access to Pacific Markets Planned Expansions (Tons in Millions) Mine Mine Additional MTPYFirst Coal Burton1 – 2 HCCLate 2012 N. Goonyella 1 – 2 HQHCC 2014 Millennium 1 – 2 SH/PCI Late 2011 Wilpinjong 2 – 3 T Q4 2011 Wambo ~3 T 2012 - 2013 Metropolitan HCC Late 2013
Slide 21: Expanding Met Coal Position With Recommended Macarthur Coal Offer
Expanding Met Coal Position With Recommended Macarthur Coal Offer Peabody and ArcelorMittal in 60/40 joint venture to acquire Macarthur Coal Offering A$16.00 (A$4.8 billion) World’s largest supplier of seaborne low-vol PCI coal Adds to development pipeline, reserve base and production capacity 260 m
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 Xinjiang Province Xinjiang likely to be world’s fastest growing coal region 100 million tonnes of production in 2010 May reach 1 billion tonnes per year by ~2025 Government supportive Committed
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 ton-per-year surface mine in Xinjiang Would include 2 GW supercritical power plant and SNG facility Pursuing development of 15 million ton-per-year surface mine in Xinjiang Only
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 ~1 billion tonnes of resources; majority expected to be met coal Working t
Slide 25: Peabody Leveraging Leading PRB and Illinois Basin Presence
Peabody Leveraging Leading PRB and Illinois Basin Presence Peabody’s North Antelope Rochelle Mine produces more than 100 million tons per year of ultra-low sulfur coal with a sulfur content 40% below the benchmark PRB product – a valuable feature in a market with rising SO 2 allowance prices Illinoi
Slide 26: Advancing Multiple Projects in U.S.
Advancing Multiple Projects in U.S. Bear Run Growing to ~8 MT in 2012 Gateway North Expanding ~40% to 4.5 MT by 2014 Powder River Basin Adding ultra-class trucks; Modest volume growth in 2011 Accessing NARM North reserves and loadout facilities for blending opportunities, margin enhancements and exp
Slide 27: Peabody's Unmatched Growth Pipeline
Peabody’s Unmatched Growth Pipeline Australia Millennium 1 – 2 MTPY SHCC/PCI Burton 1 – 2 MTPY HCC Wilpinjong 2 – 3 MTPY Thermal Wambo ~ 3 MTPY Thermal/PCI Metropolitan 1 MTPY HCC N. Goonyella LTCC 1 – 2 MTPY HQHCC Goonyella Lower 3 – 4 MTPY HQHCC Potential Macarthur Takeover Macarthur Plans to Incr
Slide 28: Solid Financial Strength to Fund Growth Pipeline
Solid Financial Strength to Fund Growth Pipeline Cash • $1.2 billion in cash • Strong operating cash flows Credit Facility • $1.5 billion available under credit facility • BB+/Ba1 credit rating Debt/Project Financing • Balance sheet under-leveraged Equity Markets • Access if needed Peabody’s Debt-to
Slide 29: Peabody Positioned for Significant Growth and Value Creation
Peabody Positioned for Significant Growth and Value Creation • Industry Leading Reserves and Production Base • Major Cash Flow Generation and Strong Balance Sheet • Expanding in Fastest Growing Global Markets • Significant Organic Growth Capability in U.S. and Australia • Value-Adding Acquisitions a
Slide 30: Barclays CEO Energy/Power Conference
Barclays CEO Energy/Power Conference Greg Boyce Chairman and Chief Executive Officer September 8, 2011
Peabody Energy — Barclays CEO Energy/Power Conference 2011 on 6ix