Peabody Energy Corporation · NYSE:BTU
Peabody Energy — BMO Capital Markets Global Metals & Mining Conference 2015
24 slides from Peabody Energy's conference presentation, Feb 24, 2015
Slide 1: BMO Capital Markets Global Metals & Mining Conference
BMO Capital Markets Global Metals & Mining Conference February 24, 2015 Glenn Kellow President and CEO-Elect 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: Peabody Taking Aggressive Action to Combat Near-Term Headwinds
Peabody Taking Aggressive Action to Combat Near-Term Headwinds 3 Sculpting a Stronger, More Competitive Company for All Markets ● Global coal markets remain challenged; Peabody continues to control the controllable in response to extended downturn ● Building on successes in safety, cost control and
Slide 4: Global Coal Markets
Global Coal Markets 4 Shanghai
Slide 5: Slowing Global GDP, Plentiful Supply Create Near-Term Industry Headwinds
Slowing Global GDP, Plentiful Supply Create Near-Term Industry Headwinds 5 Australia supply growth expected to slow in 2015; Producers benefit from lower currency China coal import demand challenged by easing GDP growth, strong hydro, flat steel demand, domestic coal protection Source: Peabody Globa
Slide 6: China and India to Continue to Access High-Quality Seaborne Metallurgical Coal
China and India to Continue to Access High-Quality Seaborne Metallurgical Coal Source: Peabody Global Analytics; McCloskey; China Customs. 6 7 34 47 45 54 75 60 70 29 26 36 30 29 33 39 50 0 20 40 60 80 100 120 China/India Metallurgical Coal Imports (Tonnes in Millions) China India ● China and India
Slide 7: Metallurgical Coal Import Demand Growth Will Outpace Supply Increases in 2015
Metallurgical Coal Import Demand Growth Will Outpace Supply Increases in 2015 Source: Peabody Global Analytics; World Steel Association. 7 ● Australian supply growth to be offset by declines from North America in 2015 ● 15 million tonnes announced production cutbacks expected to be realized in first
Slide 8: Thermal Seaborne Fundamentals: Rising Demand Strains Against Strong Supply
Thermal Seaborne Fundamentals: Rising Demand Strains Against Strong Supply 8 ● 2014 marked by oversupply as producers increased volumes to lower unit costs, leveraged weaker currencies ● 2015 supply growth to be partly offset by drop in U.S. exports ● Prices also influenced by recent oil moves ● 201
Slide 9: Countries Add GW and New Coal Generation Units Since 2010
30 Countries Add 348 GW and 800 New Coal Generation Units Since 2010 Source: Platts World Electric Power Plant database. Plant Under Construction reference for 2015 and 2016. Capacity in megawatts, excluding China, India and U.S. ~80 GW Per Year of New Coal Plants Now Under Construction 9
Slide 10: 2015 SPRB Demand Expected to Remain Stable Amid Decline in U.S. Coal Use
2015 SPRB Demand Expected to Remain Stable Amid Decline in U.S. Coal Use Source: Peabody Global Analytics and EIA. 10 36% 29% 20% 15% 0% 10% 20% 30% 40% ● Lower natural gas prices expected to impact U.S. coal demand by 60 – 80 million tons this year ● In SPRB, improving rail performance should elimi
Slide 11: SPRB and ILB Share of U.S. Coal Generation Projected to Expand by 2017
SPRB and ILB Share of U.S. Coal Generation Projected to Expand by 2017 11 Coal Expected to Fuel 40% of U.S. Electricity by 2017 Source: Peabody Energy Global Analytics. Other Regions 41% SPRB / ILB 59% ● SPRB and ILB demand expected to increase 50 – 70 million tons over next three years; Other regio
Slide 12: Greater Plant Utilization Likely to Offset Near-Term Impact from MATS Ruling
Greater Plant Utilization Likely to Offset Near-Term Impact from MATS Ruling 12 MATS Ruling EPA Carbon Proposal EPA Carbon Proposal to Face Significant Opposition Source: Peabody Global Analytics and company announcements. ● 60 GW of coal plants to be retired by 2017 ● 245 GW of coal-fueled generati
Slide 13: Long-Term Coal Fundamentals Remain Intact Despite Current Downturn
Long-Term Coal Fundamentals Remain Intact Despite Current Downturn 13 Source: Wood Mackenzie. - 1,000 2,000 3,000 4,000 5,000 Renewables Natural Gas Oil Nuclear Hydro Coal 2000 2030P 2015P Source: Wood Mackenzie primary energy demand projection. BP Statistical Review of World Energy 2014; United Nat
Slide 14: Peabody Energy Overview
Peabody Energy Overview 14 North Antelope Rochelle Mine
Slide 15: Peabody Energy: World's Largest Private-Sector Coal Company
Peabody Energy: World’s Largest Private-Sector Coal Company 15 Improve Safety, Productivity and Sustainable Mining Maintain Strong Capital Discipline and Liquidity Pursue Additional Cost Reduction Opportunities Enhance Assets Through Strategic Portfolio Management Continue Global Coal Advocacy Initi
Slide 16: Global Leader in Sustainable Mining, Energy Access, Clean Coal Solutions
Global Leader in Sustainable Mining, Energy Access, Clean Coal Solutions 16 1) Excellence in Sustainable Mining Practices 2) Increased Access to Low-Cost Electricity 3) Continued Advancement of Clean Coal Technologies Named Platts Energy Company of the Year in 2014
Slide 17: Peabody Positioned in Low-Cost U.S. Basins, High-Growth Asian Markets
Peabody Positioned in Low-Cost U.S. Basins, High-Growth Asian Markets ● Strong, stable U.S. operations provide solid cash flow – Gross margin averaged 28% since 2010 ● Largest producer and reserve holder in Powder River Basin – Flagship North Antelope Rochelle Mine world’s largest and most productiv
Slide 18: Peabody Applying Comprehensive Strategy to Maximize Cost Control
Peabody Applying Comprehensive Strategy to Maximize Cost Control 18 To ta l S av in gs ● Evaluating mining methods to improve productivity and maximize yields ● Insourcing more maintenance, expanding condition- based monitoring systems and increasing equipment availability ● Leveraging global scale
Slide 19: Aggressive Australian Cost Reduction Efforts Drive Significant Improvements
Aggressive Australian Cost Reduction Efforts Drive Significant Improvements ● Commissioned longwalls at North Goonyella and Metropolitan mines ● Successfully completed owner-operator conversions – 95% of Australian production under owner-operator model ● Reduced annual production at higher-cost Burt
Slide 20: Peabody Benefits from Declining Australian Dollar and Lower Oil Prices
-60% -50% -40% -30% -20% -10% 0% 10% Peabody Benefits from Declining Australian Dollar and Lower Oil Prices ● Drop in oil and exchange rates likely to provide added cost benefits over time ● Lower oil prices will result in: – Improved operating costs – Increased economic activity – Reduced associate
Slide 21: Peabody Fixed Obligations Projected to Significantly Improve by Early 2017
Peabody Fixed Obligations Projected to Significantly Improve by Early 2017 ● Fixed obligations temporarily elevated due to final LBA and VEBA payments ● LBA payments end in 2016 – ~$275 million in 2015; ~$250 million in 2016 – Additional LBAs not expected until after 2020 ● VEBA payments end in Janu
Slide 22: Peabody Energy: World's Only Global Pure-Play Coal Investment
Peabody Energy: World’s Only Global Pure-Play Coal Investment 22 Global Scope Best-In-Class Operations Competitive Position Major Growth Potential Tier one assets in lowest cost U.S. basins and substantial Australian platform targeting highest-growth Asian regions Active portfolio management and con
Slide 23: PeabodyEnergy.com AdvancedEnergyForLife.com
PeabodyEnergy.com AdvancedEnergyForLife.com
Slide 24: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission. 24 (Dollars in millions, except per share data) Low (2) High (2) 2014 (1) 2013 (1) Adjusted EBITDA (3) 160$ 200$ 814.0$ 1,0
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