Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Bank of America - Merrill Lynch Global Metals and Mining Conference 2012
31 slides from Peabody Energy's conference presentation, May 17, 2012
Slide 1: Energizing The World One BTU At A Time
Energizing The World One BTU At A Time Bank of America - Merrill Lynch Global Metals and Mining Conference Gregory H. Boyce Chairman and Chief Executive Officer May 17, 2012 Peabody Energy
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Peabody Energy 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-ha
Slide 3: Peabody: Outstanding Position for Value Creation
Peabody: Outstanding Position for Value Creation Peabody Energy Why Coal? Major global buildout of steel and generation High global gas and oil prices Rising China, India imports Rapidly rising seaborne demand International supply constraints Why Peabody? Increasing Australian exports Delivering on
Slide 4: The Global Coal Supercycle is Alive and Well
The Global Coal Supercycle is Alive and Well
Slide 5: The Global Coal Supercycle: Fundamentals Remain Strong
The Global Coal Supercycle: Fundamentals Remain Strong Peabody Energy Global supercycle alive and well Demand growth significant, supplies constrained China coal use and imports escalating India emerging as next major growth center Other nations represent additional upside Coal: The world's fastest
Slide 6: Recent Data Supports Coal Supercycle Thesis for Both Met and Thermal Coal
Recent Data Supports Coal Supercycle Thesis for Both Met and Thermal Coal Peabody Energy Metallurgical Coal Global steel prices stabilizing, Chinese steel production increasing China housing to be driven by major interior demand growth Thermal Coal India expands coal imports China and India coal-fue
Slide 7: Build Out of Coal Generation Drives Thermal Coal Growth
Major Markets: Build Out of Coal Generation Drives Thermal Coal Growth Peabody Energy New Coal-Fueled Generating Capacity 2011-2016 Gigawatts Rest of World India China Coal-fueled generation expected to grow 385+ GW by 2016 Additional 1.3+ billion tonnes of coal demand anticipated Vast majority of g
Slide 8: Steel Production Growth Drives Ongoing Met Coal Increases
Major Markets: Steel Production Growth Drives Ongoing Met Coal Increases Peabody Energy 40% Steel Increase by 2020 = ~400 Million Tonnes Added Met Coal Global Steel Production Steel Production (million tonnes) 2010 2015P 2020P China's steel production accelerates through first quarter Spot met coal
Slide 9: China, India and Brazil Have Large Upside to Steel Intensity Potential
China, India and Brazil Have Large Upside to Steel Intensity Potential Peabody Energy Emerging countries driving met coal demand through greater urbanization and higher steel consumption Significant steel increases required to reach levels of developed Asia economies Stable stage intensity may take
Slide 10: China's Urbanization Rising Yet Still Far Below Other Developed Countries
China's Urbanization Rising Yet Still Far Below Other Developed Countries Peabody Energy Greater urbanization to drive construction and manufacturing, which account for nearly 80% of China's steel use Each 10% increase in urbanization = ~140 million moving to cities Projections include five-year gro
Slide 11: China Coal Use Consistently Exceeds National Targets
China Coal Use Consistently Exceeds National Targets Peabody Energy China Annual Coal Use For Last Year of Plan (Tonnes in Billions) 2001-2005 10th 5-Year Plan Target 1.1 Actual 2.3 2006-2010 11th 5-Year Plan Target 2.5 Actual 3.5 2011-2015 12th 5-Year Plan Target 3.9 Indicated Performance 5.0 240 G
Slide 12: China Expected to Drive Major Growth in Seaborne Coal
China's Expected to Drive Major Growth in Seaborne Coal Peabody Energy Wood Mackenzie: Thermal Coal Imports ~1 Billion Tonnes by 2030 China Net Coal Imports Tonnes in Millions 2009 2010 2011 2012P 2016P Met Thermal 2011 net coal imports rise 25% to record 208 million tonnes China's net metallurgical
Slide 13: India Likely to Be World's Fastest Growing Coal Importer
India Likely to Be World's Fastest Growing Coal Importer Peabody Energy Wood Mackenzie: 400 Million Tonnes of Thermal Imports by 2030 2011 Coal-Fueled Generation up 9%; Thermal Coal Imports +35% Thermal coal demand expected to outpace production by >150 MTPY within 5 years 70 GW of new coal generati
Slide 14: Major Supply Constraints Tighten Global Coal Markets
Major Supply Constraints Tighten Global Coal Markets Peabody Energy Metallurgical Coal Supply Mine closures, weather and labor reduces 15 million tones of annualized met supplies YTD Met coal in structural undersupply long-term China experiencing higher costs and declining quality for met coal Therm
Slide 15: Australia to Supply Half the Growth in Seaborne Market Demand in 2012
Australia to Supply Half the Growth in Seaborne Market Demand in 2012 Peabody Energy Global Seaborne Supply Growth 2011 - 2016 (Projected) Tonnes in millions Australia Indonesia Mongolia Colombia U.S. Other Australia projected to be largest source of new supply growth Australia expected to remain do
Slide 16: PRB and Illinois Basin Expected to Dual-Serve U.S. and Global Markets
PRB and Illinois Basin Expected to Dual-Serve U.S. and Global Markets Peabody Energy U.S. port capacity could grow ~100 million tons within 5 years based on announcements Two-thirds of growth in West Coast/Gulf Coast U.S. basins expected to see significant demand shift Lower-cost PRB and ILB regions
Slide 17: U.S. Coal Production Cuts Accelerating
U.S. Coal Production Cuts Accelerating Peabody Energy U.S. April Shipments Down 14% from 2011 U.S. Coal Production Tons in Millions 2011 2012 January February March April April shipments at 932 million ton annualized pace ~150 million tons lower than 2011 shipments of ~1.09 billion Lowest monthly sh
Slide 18: Coal: The World's Fastest Growing Major Fuel
Coal: The World's Fastest Growing Major Fuel Peabody Energy IEA Projects Coal Demand to Grow 65% by 2035 Growth 2000-2010 Coal 48% Natural Gas 31% Hydro 29% Oil 13% Nuclear 7% Growth to 2035 2009 2020 2035 Coal Oil N. Gas Nuclear Hydro Other Source: BP Statistical Review of World Energy 2011; Intern
Slide 19: Peabody's Global Platform Drives Results
Peabody's Global Platform Drives Results
Slide 20: Peabody Continues Global Expansion to Serve High-Growth Regions
Peabody Continues Global Expansion to Serve High-Growth Regions Peabody Energy World's Only Global Pure-Play Coal Investment London Essen New Delhi Urumqi Ulaanbaatar Beijing Singapore Jakarta Balikpapan NCIG St. Louis DTA International Offices Brisbane New Delhi Newcastle Beijing London Urumqi Ulaa
Slide 21: Global Transformation Leads to Record Financial Results
Peabody's Global Transformation Leads to Record Financial Results Peabody Energy Increasing Revenues, Adjusted EBITDA and Operating Cash Flow +80% Revenues $ in Millions 2007 $4,422 2008 2009 2010 2011 $7,974 +122% Adjusted EBITDA $ in Millions 2007 $958 2008 2009 2010 2011 $2,129 +258% Operating Ca
Slide 22: International Operations Contribute Half of Earnings and Growing
Peabody's International Operations Contribute Half of Earnings and Growing Peabody Energy Adjusted EBITDA From Mining Operations 2003 U.S. > 99% 2007 U.S. 83% Australia 17% 2011 U.S. 50% Australia 50% Percentages represent share of Mining Adjusted EBITDA. 22
Slide 23: Peabody Delivers Strong Margins Superior to Coal Peers
Peabody Delivers Strong Margins Superior to Coal Peers Peabody Energy Contributions to Gross Margins Lead Peer Average Gross Margins 2010 25% 28% 41% 2011 NYSE Peer Avg. 25% Peabody U.S. 27% Peabody Australia 41% Peabody's U.S. and Australia margins surpass NYSE coal peers Leading producer in low-co
Slide 24: 2012: Starting the Year Strong
2012: Starting the Year Strong Peabody Energy Major first quarter increases Revenues +17% Adjusted EBITDA +18% Operating Profit +11% Operating Cash Flows +79% Adjusted EBITDA up at mining operations Australia +41% U.S. +10% Targeting 2012 sales of 235 to 255 million tons Australia sales: 33 to 36 mi
Slide 25: Peabody Focusing on Four Key Areas in 2012
Peabody Focusing on Four Key Areas in 2012 Peabody Energy Maintain Intense Focus on Operational Excellence Integrate Acquisition into Australian Platform Advance Organic Growth Projects Strengthen Balance Sheet 25
Slide 26: Australia Platform Expanding Through Organic Growth, Macarthur Acquisition
Australia Platform Expanding Through Organic Growth, Macarthur Acquisition Peabody Energy Queensland Port Abbot Point Dalrymple Bay Gladstone Brisbane BTU Met Burton N. Goonyella Eaglefield Millennium MCC Mine Coppabella Moorvale Middlemount MCC Project Codrilla New South Wales Port PWCS NCIG Port K
Slide 27: Australia Organic Pipeline To Deliver Growth in 2012 and Beyond
Australia Organic Pipeline To Deliver Growth in 2012 and Beyond Peabody Energy 2011 2012 2013 2014 2015 Wilpinjong 2 - 3 MTPY Thermal Millennium 1 - 2 MTPY SHCC/PCI Capex of ~$275M Wambo Open-Cut ~2 - 3 MTPY Thermal/PCI Middlemount ~2 MTPY SHCC/PCI Burton ~1MTPY HCC Metropolitan 1 MTPY HCC Capex of
Slide 28: Unmatched Asset Base Levered to the Strongest Markets
Peabody's Unmatched Asset Base Levered to the Strongest Markets Peabody Energy Multiple Advantages Over NYSE Coal Peers BTU A B C D E F U.S. Low-Cost PRB Illinois Basin Little/No CAPP Exposure U.S. Thermal Exports Global Seaborne Met Global Trading Offices Aus. Thermal Exports Global Diversification
Slide 29: BTU: Multiple Catalysts for Value Creation in 2012
BTU: Multiple Catalysts for Value Creation in 2012 Peabody Energy Record results and strong financial position Targeting 2012 Australia growth of 8 - 11 million tons; further expansion in 2013 Significant pipeline for future growth Fully contracted in U.S. for 2012, leader in low-cost regions Platfo
Slide 30: Energizing The World One BTU At A Time
Energizing The World One BTU At A Time Bank of America - Merrill Lynch Global Metals and Mining Conference Gregory H. Boyce Chairman and Chief Executive Officer May 17, 2012 Peabody Energy
Slide 31: Appendix: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA Peabody Energy Reconciliation of Adjusted EBITDA to Income from Continuing Operations, Net of Income Taxes (unaudited) Three Months Ended March 31, 2012 Year Ended December 31, 2011 2010 2009 2008 2007 (Dollars in millions) Adjusted EBITDA $512.6 $2,128.7
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