Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Merger or Acquisition (October 2011)
18 slides from Peabody Energy's merger presentation, Oct 25, 2011
Slide 1: Macarthur Coal Acquisition Investor Presentation
Macarthur Coal Acquisition Investor Presentation October 25, 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: Topics
Topics Transaction Overview Growing Market for Metallurgical and PCI Coal Macarthur Production and Growth Profile Peabody's New Australia Platform Transaction Financing Next Steps 3
Slide 4: Overview of Acquisition of Macarthur Coal
Overview of Acquisition of Macarthur Coal (ASX: MCC) Transaction Description Purchase of up to 100% of the shares of Macarthur Coal Transaction Structure Takeover under Australian securities law Equity Purchase Price A$16.00 per share x 302 million shares = A$4.8 billion; US$5.0 billion A$16.25 per
Slide 5: Acquisition Adds Benchmark PCI Supply And Significant Growth Projects
Acquisition Adds Benchmark PCI Supply And Significant Growth Projects Creates synergies with existing base Increases access to highest growth regions Expands pipeline of growth opportunities Extends resource base for future development Expected to be earning a year 5
Slide 6: Transaction Valued on Major Growth Profile and Large Resource Base
Transaction Valued on Major Growth Profile and Large Resource Base Price Competitive With Comparable Australian Transactions Enterprise Value per Resource Ton Macarthur Acquisition at A$16/Share US$2.44/t Average Australia Transaction Multiple US$2.40/t EV/EBITDA 1 year forward Macarthur Acquisition
Slide 7: The Market: Met Coal Use Expected to Rise >500 Million Tonnes by 2020
The Market: Met Coal Use Expected to Rise >500 Million Tonnes by 2020 Global Met Coal Demand (Tonnes in Millions) 2010 920 2015 1185 2020 1440 Growth ~30% ~60% CAGR ~5% ~5% Global PCI Market Also Growing at 5% CAGR Source: Peabody Global Energy Analytics. 7
Slide 8: PCI in Growing Demand from Global Steel Producers
PCI in Growing Demand from Global Steel Producers PCI Overview Pulverized Coal Injection (PCI) a replacement for coke made from coking coal Steelmakers trying to expand PCI use to reduce costs Majority of high quality, low-vol PCI supply from Australia Low-vol PCI typically priced at 70% to 80% of H
Slide 9: Macarthur: Active Production Base With Major Growth Pipeline
Macarthur: Active Production Base With Major Growth Pipeline Queensland Abbott Point Dalrymple Bay Gladstone Wiggins Island Burton North Goonyella Eaglefield Millennium Olive Downs Coppabella Moorvale Codrilla Vermont East Middlemount BTU Met Coal Mine Port MCC Mine MCC Development Producing mines m
Slide 10: Mines Produce Leading Seaborne Low-Vol PCI Supply
Mines Produce Leading Seaborne Low-Vol PCI Supply Mines Produce Leading Seaborne Low-Vol PCI Supply Coppabella open-cut mine; benchmark low-vol PCI product Produced 2.3 million tons FY 2011; 3.0 million tons FY 2010 Moorvale open-cut mine Produced 1.9 million tons in FY 2011; 2.6 million tons FY 201
Slide 11: Macarthur Expands Peabody's Australian Reserve Base
Macarthur Expands Peabody's Australian Reserve Base Combined Entity has 40+ Year Reserve Life at Current Production Australian Reserves Tons in Millions BHP/BMA 3,435 Xstrata 2,628 ProformaBTU Australia 1,370 BTUAustralia 1,185 Rio Tinto 1,005 Anglo American 666 New Hope 600 Wesfarmers 492 Whitehave
Slide 12: Transaction Significantly Strengthens Peabody's Position in Australia
Transaction Significantly Strengthens Peabody's Position in Australia Peabody Australia proforma 2010 production of 32 million tons with Macarthur Proforma production of 45 - 50 million tons by 2014-15 given combined growth platforms Australian Production Thermal Met Tons in Millions Xstrata 57 BHP/
Slide 13: Macarthur's Production Base Expected to Grow by FY 2014
Macarthur's Production Base Expected to Grow to 10 Million Tons by FY 2014 Peabody/Macarthur Proforma Met Volumes: 22 - 25 MTPY* by 2014-2015 Projected Coal Sales Target For FY2014 Mt (MCC attributable share) Coppabella & Moorvale Middlemount Codrilla Sales Target 9.2Mt Macarthur has the assets, ope
Slide 14: Macarthur: Significant Planned Pipeline of Growth
Macarthur: Significant Planned Pipeline of Growth Significant Development Pipeline Vermont East West Walker Capricorn North/West Burton Yeerun R West Rolleston R Olive Downs South Coppabella Underground Moorvale West MDL 162 * Willunga * R Moorvale Underground Monto * Olive Downs North Codrilla R se
Slide 15: Fully Financed With Cash and Debt; Debt Levels Very Manageable
Fully Financed With Cash and Debt; Debt Levels Very Manageable Funding expected from cash and additional debt Funded leverage within targeted debt-to-cap ranges Peabody's Debt-to-Capital Ratio (%) Target Zone: 40 - 60 2006* 57 2007 52 2008 47 2009 42 2010 37 9/2011 32 Post-MCC Expected Leverage: Mid
Slide 16: Macarthur Acquisition: Next Steps
Macarthur Acquisition: Next Steps Complete acquisition and implement transition plan Achieve synergies Operational performance Supply chain efficiencies Marketing/blending potential Improve mining plan and equipment efficiency at Coppabella Mine in coming months Advance growth projects to build prod
Slide 17: Acquisition Delivers Value Via Increased Global Access, Earnings Expansion
Acquisition Delivers Value Via Increased Global Access, Earnings Expansion Macarthur acquisition expands Peabody's presence with quality met product in high-growth region Provides major growth opportunities, large reserve base and significant potential synergies Continues global buildout and earning
Slide 18: Macarthur Coal Acquisition
Macarthur Coal Acquisition 18
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