Peabody Energy Corporation · NYSE:BTU
Peabody Energy — UBS Coal Conference 2013
25 slides from Peabody Energy's conference presentation, Dec 4, 2013
Slide 1: Life Empowered – UBS Coal Conference
Life Empowered UBS Coal Conference December 4, 2013 Vic Svec Senior Vice President Global Investor and Corporate Relations Peabody Energy
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Peabody Energy The use of the words “Peabody,” “the company,” “our” and “we” relate to Peabody Energy Corporation, its subsidiaries and majority-owned affiliates. Certain statements in this presentation are forward-looking within the meaning of Section 27A of
Slide 3: Peabody Well Positioned with Significant Upside as Markets Improve
Peabody Well Positioned with Significant Upside as Markets Improve Peabody Energy Driving capital discipline, operational excellence and cost improvements across the platform Well-capitalized operations with low sustaining capital needs Large asset base and long-term project profile enable success G
Slide 4: Global Coal Markets
Global Coal Markets ~
Slide 5: Annual World Coal Demand Forecast to Grow 1.2 Billion Tonnes in Five Years
Annual World Coal Demand Forecast to Grow 1.2 Billion Tonnes in Five Years Peabody Energy Expected Global Coal Demand (Tonnes in Millions) 0 1,000 2,000 3,000 4,000 5,000 India ROW China 2012 726 2,886 4,069 2017P 920 3,065 4,890 Projected new coal-fueled generation of ~400 GW by 2017 Expected steel
Slide 6: Metallurgical Coal Fundamentals Stabilized; Strong Long-Term Demand
Metallurgical Coal Fundamentals Stabilized; Strong Long-Term Demand Peabody Energy Industrialization and Urbanization Drive Coal Growth Met coal prices within trading range after rising from mid-2013 lows Strong Asian demand and decreasing U.S. exports High-cost met coal supplies declining Global in
Slide 7: New Generation Expected to Drive Significant Global Thermal Coal Demand
New Generation Expected to Drive Significant Global Thermal Coal Demand Peabody Energy Projected Seaborne Thermal Coal Demand (Tonnes in Millions) 2012 Atlantic Other Pacific India China 2017P 0 200 400 600 800 1,000 1,200 23% Growth 910 -20 +75 +80 +75 1,120 Expected new coal fueled generation requ
Slide 8: China, India Account for 85% of Projected Global Coal Demand Growth
China, India Account for 85% of Projected Global Coal Demand Growth Peabody Energy China and India Coal Imports (Tonnes in Millions) India China 0 100 200 300 400 500 2012 2013P 2017P 137 165 235 289 325 400 China and India coal imports expected to grow 220 million tonnes by 2017 Significant new coa
Slide 9: Production Cutbacks Expected to Improve Supply-Demand Balance
Production Cutbacks Expected to Improve Supply-Demand Balance Peabody Energy 151 U.S. coal mines idled in the first half of 2013. Illinois Illinois Basin Missouri St. Louis Indiana Indianapolis Kentucky Tennessee Nashville Knoxville Ohio Cincinnati Cleveland Northern Appalachia West Virginia Charles
Slide 10: China Likely to Follow U.S. Path for Greater Coal Use, Decreasing Emissions
China Likely to Follow U.S. Path for Greater Coal Use, Decreasing Emissions Peabody Energy U.S. Emissions Decline 87% Since 1970 as Coal Use Nearly Triples 1970 1980 1990 2000 2011 -100% -50% 0% 50% 100% 150% Coal-Based Power Generation +170% GDP per Capita +103% Regulated Emissions/MWh from Coal -8
Slide 11: U.S. Markets: Fundamentals Improving as Coal Demand Rebounds in 2013
U.S. Markets: Fundamentals Improving as Coal Demand Rebounds in 2013 Peabody Energy SPRB Utility Stockpiles (Tons in Millions) Inventories ~30% below 2012 peak levels May 2012 Aug. 2012 Nov. 2012 Feb. 2013 May 2013 Aug. 2013 0 15 30 45 60 75 90 U.S. coal demand expected to rebound 45 - 55 million to
Slide 12: SPRB and Illinois Basin: Million Ton Increase Forecasted Through 2017
SPRB and Illinois Basin: 135 Million Ton Increase Forecasted Through 2017 Peabody Energy Expected U.S. Generation Demand (Tons in Millions) 0 200 400 600 485 -35 +10 +160 620 SPRB and ILB +135 0 200 400 340 -45 +5 +35 335 Other Basins -5 2012 Retirements New Generation Utilization/Switching 2017P 65
Slide 13: Coal Expected to Account for >40% of Global Electricity Generation Growth
Coal Expected to Account for >40% of Global Electricity Generation Growth Peabody Energy Expected Electricity Generation Growth (2010 - 2035) Coal Nat. Gas Nuclear Hydro Other Coal: The World’s Fastest Growing Major Fuel Coal grew twice as fast as average of other major fuels in past decade Coal exp
Slide 14: Peabody Energy Outlook
Peabody Energy Outlook
Slide 15: Peabody's Global Platform Provides Growth and Earnings Diversification
Peabody’s Global Platform Provides Growth and Earnings Diversification Peabody Energy World’s Only Global Pure-Play Coal Investment London Essen Urumqi New Delhi Ulaanbaatar Beijing Singapore Jakarta Balikpapan NCIG St. Louis DTA International Offices Brisbane Newcastle Mining Operations Position Sa
Slide 16: Well-Capitalized Platform and Strong Cost Containment Drive Superior Margins
Well-Capitalized Platform and Strong Cost Containment Drive Superior Margins Peabody Energy 3-Year Average Gross Margins Peabody 31% U.S. Peer Average 24% Peabody’s average gross margin 30% above U.S. peers over past three years Margins driven by successful cost containment programs Leading presence
Slide 17: Australian Platform Targets Growing Asia Demand
Australian Platform Targets Growing Asia Demand Peabody Energy Targeted Australia Volumes (Tons in Millions) 0 10 20 30 40 2005 8 Seaborne Thermal 2 Metallurgical 6 2011 25 Domestic Thermal 6 Seaborne Thermal 10 Metallurgical 9 2012 33 Domestic Thermal 7 Seaborne Thermal 12 Metallurgical 14 2013P 34
Slide 18: Peabody's Australia Unit Costs Improve 18% Since First Quarter 2012
Peabody’s Australia Unit Costs Improve 18% Since First Quarter 2012 Peabody Energy Australia Costs Per Ton Q1 2012 Q3 2013 $0 $15 $30 $45 $60 $75 $90 2013 costs expected in low-to-mid $70 per ton range Achieving success with multiple initiatives: Streamlining workforce, shifting volumes and improved
Slide 19: Early Success from Second Quarter 2013 Owner-Operator Conversions
Early Success from Second Quarter 2013 Owner-Operator Conversions Peabody Energy Owner-Operator Volumes Increase from ~35% to ~85% Eliminated Contractor Margins Robust Mine Planning Right-Sized Equipment Better Workforce Alignment Improved operating efficiency and productivity drive cost reduction C
Slide 20: PCI Mines Cost Base Reset After Significant Remediation Work
PCI Mines Cost Base Reset After Significant Remediation Work Peabody Energy Successfully implemented operational improvements at acquired PCI mines Increased productivity significantly since acquisition Record dragline performance and overburden removal at Coppabella Third quarter costs improved 20%
Slide 21: U.S. Platform Well Positioned in Current Market
U.S. Platform Well Positioned in Current Market Peabody Energy Improving cost profile and long-term contracting strategies contribute more than half of Peabody’s global earnings Targeting 185 - 190 million tons of production in 2013 Fully priced for 2013; 75 - 85% priced for 2014; 40 - 50% priced fo
Slide 22: U.S. Cost Containment Initiatives Taking Hold
U.S. Cost Containment Initiatives Taking Hold Peabody Energy Delivered significant cost and productivity improvements Q3 lowest U.S. unit costs in 3 years Shifting volumes to more productive operations Benefiting from recent investments NARM most productive mine Bear Run largest eastern surface mine
Slide 23: Maintaining Financial Strength Through Capital Discipline and Debt Repayment
Maintaining Financial Strength Through Capital Discipline and Debt Repayment Peabody Energy Capital Discipline Targeting 2013 capex of $350 - $400 million; Capex down 69% YTD Deferring growth projects Sustaining capital trending below historical range of $1.25 - $1.75/ton Previous investments enable
Slide 24: Peabody Strategy and Operating Success Drive Value in All Market Conditions
Peabody Strategy and Operating Success Drive Value in All Market Conditions Peabody Energy Leading presence in growing markets Superior margins vs. peers Significant upside as coal markets improve Well-capitalized platform Successful cost improvements Large asset base for future development 24
Slide 25: Peabody Energy – Life Empowered
Peabody Energy www.PeabodyEnergy.com Life Empowered