Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Barclays CEO Energy-Power Conference 2014
29 slides from Peabody Energy's conference presentation, Sep 2, 2014
Slide 1: Barclays CEO Energy-Power Conference
September 3, 2014 Barclays CEO Energy-Power Conference Exhibit 99.1
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Certain statements in this presentation 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,” “plan,” “outl
Slide 3: Coal: Global Supply-Demand Fundamentals Expected to Improve
Coal: Global Supply-Demand Fundamentals Expected to Improve Coal accounts for 40% of electricity generation; Urbanization and industrialization trends expected to drive sustained long-term coal demand growth 3 Global Coal Demand Seaborne Metallurgical Coal Seaborne Thermal Coal U.S. Thermal Coal Mar
Slide 4: Peabody Energy: Best Positioned Coal Company
Peabody Energy: Best Positioned Coal Company 4 Global Scope Superior Asset Base Low-Cost U.S. Position Strong Metallurgical Coal Portfolio Competitive Advantage Proven Track Record Tier one assets in U.S. West, U.S. Midwest and Australia targeting highest-growth regions 8 billion tons of coal reserv
Slide 5: Global Coal Markets
Global Coal Markets 5 Singapore
Slide 6: Expanding Global Energy Needs Lead to Rising Coal Demand
Expanding Global Energy Needs Lead to Rising Coal Demand 6 Global Coal Demand (MTOE) Global Energy Demand (MTOE) Global Electricity Use (TWh) 0 3,000 6,000 9,000 12,000 15,000 18,000 2010 2020P 2030P 0 6,000 12,000 18,000 24,000 30,000 36,000 2010 2020P 2030P 0 1,000 2,000 3,000 4,000 5,000 2010 202
Slide 7: Annual Global Coal Use Expected to Grow 600 Million Tonnes Over Next Three Years
0 2,000 4,000 6,000 8,000 10,000 2013E 2016P 2020P ROW China India Annual Global Coal Use Expected to Grow 600 Million Tonnes Over Next Three Years ● Coal is projected to overtake oil as the largest energy source in coming years ● Coal’s share increases to 30% of global energy consumption; Greatest
Slide 8: Seaborne Metallurgical Supply Slowing; Fundamentals Expected to Improve
Seaborne Metallurgical Supply Slowing; Fundamentals Expected to Improve Source: Peabody Global Analytics. U.S., Australia and Canadian seaborne exports represented. 8 ● Market well-supplied; Production growth from investment momentum and unit cost management coming to an end ● Demand continuing to r
Slide 9: Metallurgical Coal Essential for Rising Steel Production in Asia
Metallurgical Coal Essential for Rising Steel Production in Asia ● Greater imports needed to meet rising steel needs – Global seaborne metallurgical coal demand expected to rise 10 to 15% by 2016 ● Asian steel primarily produced in blast furnaces requiring metallurgical coals ● Newer blast furnaces
Slide 10: Countries Add GW of New Coal Generation Capacity Since 2010
30 Countries Add 348 GW of New Coal Generation Capacity Since 2010 800+ New Generating Units Come Online 10 Source: Platts World Electric Power Plant database. Generation capacity represented in megawatts, excluding China, India and United States.
Slide 11: New Generation Expected to Drive Significant Global Thermal Coal Demand
0 200 400 600 800 1,000 1,200 2013E 2016P 2020P New Generation Expected to Drive Significant Global Thermal Coal Demand ● Market is well-supplied yet demand continues to increase ● Asian imports likely to grow ~100 million tonnes in next 3 years ● New coal-fueled generation of ~250 GW projected by 2
Slide 12: U.S. Coal Demand Increases; Fuels 41% of Electricity Generation
U.S. Coal Demand Increases; Fuels 41% of Electricity Generation in the U.S. Source: Peabody Global Analytics and EIA. YTD through July 2014 compared to April 2012. 12 34% 41% 24% 20% 15% 0% 10% 20% 30% 40% 50% ● U.S. coal use rebounds 25% from 2012 lows ● Coal use up 4% YTD; Gas generation down 3% ●
Slide 13: SPRB Demand Exceeds Supply Leading to Declining Stockpiles
SPRB Demand Exceeds Supply Leading to Declining Stockpiles ● Shipments lagging demand for second year in a row ● Rail performance and moderate summer weather impact near-term U.S. fundamentals – 2014 transaction volume down on rail issues – Rail investment expected to lead to gradual improvement ● D
Slide 14: SPRB and Illinois Basin: 5 Million Ton Demand Increase Forecast by 2016
Source: Peabody Global Analytics. SPRB and Illinois Basin: 75 Million Ton Demand Increase Forecast by 2016 Expected SPRB and ILB Generation Demand (Tons in Millions) +35 0 200 400 600 2013 Retirements Utilization Switching 2016P -55 +30 510 585 14 +100 SPRB and ILB +75 ● 15% increase in SPRB and ILB
Slide 15: Broad and Growing Opposition to EPA's Proposed Power Plant Rules
Broad and Growing Opposition to EPA’s Proposed Power Plant Rules ● 41 Republican Senators ask EPA to withdraw the rule; 7 Democratic Senators write the President about new plant standards ● U.S. Supreme Court warns EPA about overreach 15 ● More than 20 State Legislatures pass legislation and resolut
Slide 16: Leading Nations Turn to Coal, Improve Energy and Environmental Policies
Leading Nations Turn to Coal, Improve Energy and Environmental Policies 16 Australia Repeals carbon tax in major policy reversal Japan Supports development of advanced coal-fueled generation China Uses technology and incentives to reduce emissions and increase coal use Source: Peabody Global Analyti
Slide 17: Coal: Least Expensive and Most Reliable Form of Electricity Generation
Coal: Least Expensive and Most Reliable Form of Electricity Generation 17 Source: Peabody Energy Analytics. ● Urbanization trends lead to greater coal use to fuel growing electricity and steel demand ● IEA and other observers project coal will overtake oil as world’s largest energy source in coming
Slide 18: Peabody Energy Overview
Peabody Energy Overview 18 Wilpinjong Mine
Slide 19: Peabody: World's Largest Private-Sector Coal Company
Peabody: World’s Largest Private-Sector Coal Company Metallurgical and Thermal Coal Customers in Over 25 Countries Essen Beijing Ulaanbaatar Jakarta Balikpapan New Delhi Brisbane, QLD Newcastle, NSW London (From U.S.) St. Louis, MO Singapore Mining Operations and Trading Sales Reserves SPRB 135 3.4
Slide 20: Delivering on Long-Term Journey to Reshape Peabody's Asset Base
20 Delivering on Long-Term Journey to Reshape Peabody’s Asset Base • Diverse Global Platform • Largest U.S. Producer • Largest Producer and Reserve Holder in SPRB • Largest Seaborne Supplier of Low-Vol PCI Coal • Third-Largest Australian Reserve Holder • Fourth-Largest Seaborne Metallurgical Coal Su
Slide 21: Peabody Drives Capital Efficiency, Reduces Costs and Optimizes Portfolio
Peabody Drives Capital Efficiency, Reduces Costs and Optimizes Portfolio ● Capital Efficiency – Prior capital investments allow for low capital spending for several years – Sustaining capital trending below historical range of $1.25 to $1.75 per ton ● Cost Reductions – Successful cost improvement in
Slide 22: Peabody's Industry-Leading Powder River Basin Gross Margins Expand in 2014
Peabody’s Industry-Leading Powder River Basin Gross Margins Expand in 2014 ● Peabody PRB gross margins more than double peers on contracting strategies and sustainable cost reductions – Leveraging previous investments in equipment, infrastructure and technology – Driving best-in-class continuous imp
Slide 23: Midwest Portfolio Well Positioned: Anchored by Key Mines
Midwest Portfolio Well Positioned: Anchored by Key Mines 23 ● Peabody Illinois Basin operations strategically located to serve local customer base ● Bear Run Mine is largest surface mine in Eastern U.S. – Produces 8+ million tons per year ● Gateway Mine among lowest cost mines in region – Gateway No
Slide 24: Peabody's Australia Strategy: Best Access to High-Growth Asian Region
24 22 – 25 ~ 8 15 – 17 Peabody’s Australia Strategy: Best Access to High-Growth Asian Region ● Australia holds competitive advantage over other nations with mines close to ports; Ports near high-growth regions ● Peabody has substantial high- quality coal position with 925 million tons of reserves ●
Slide 25: Peabody Driving Sustainable Cost Reductions at Australia Mines
Peabody Driving Sustainable Cost Reductions at Australia Mines ● Productivity improves 35% in first half of 2014 ● Longwalls commissioned at North Goonyella and Metropolitan mines ● Continuing successful owner- operator conversion initiative; Allows for robust mine planning – Expected completion of
Slide 26: Peabody's Core Strengths Targeted to Create Long-Term Value
Peabody’s Core Strengths Targeted to Create Long-Term Value 26 Superior Asset Base • Leading reserve position • Geographic diversity • Access to high- growth regions • Leading presence in growing markets Best-In- Class Operations • Continuous focus on safety • Aggressive cost containment • Strong pr
Slide 27: PeabodyEnergy.com AdvancedEnergyForLife.com
PeabodyEnergy.com AdvancedEnergyForLife.com
Slide 28: Appendix: Peabody Energy Targets
Appendix: Peabody Energy Targets 28 U.S. Targets ● 2014 coal sales of 185 to 190 million tons ● 2014 U.S. coal sales volumes are essentially fully priced; 2015 coal sales are 20 to 30 percent unpriced based on 2014 production levels ● 2014 U.S. revenues per ton 4 to 7 percent below 2013 levels ● 201
Slide 29: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures 29 This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission. Targets exclude any non-cash expenses related to the pending repeal of the Mineral Resources Rent Tax in Australia. (Dol
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