Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Investor Presentation (December 2014)
26 slides from Peabody Energy's investor presentation, Dec 15, 2014
Slide 1: Peabody Energy Investor Presentation
Peabody Energy Investor Presentation December 15, 2014 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 Markets Face Headwinds; Potential for Improvement in 2015
Coal: Global Markets Face Headwinds; Potential for Improvement in 2015 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. Powde
Slide 4: Peabody Energy: Well-Positioned Coal Company
Peabody Energy: Well-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 550 Million Tonnes Over Next Three Years
0 2,000 4,000 6,000 8,000 10,000 2013 2016P 2020P ROW China India Annual Global Coal Use Expected to Grow 550 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 c
Slide 8: Seaborne Metallurgical Supply Growth Slowing; Fundamentals Likely to Improve
Seaborne Metallurgical Supply Growth Slowing; Fundamentals Likely 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
Slide 9: Metallurgical Coal Essential for Rising Steel Production in Asia
Metallurgical Coal Essential for Rising Steel Production in Asia ● Global seaborne metallurgical coal demand expected to rise over next several years ● Asian steel primarily produced in blast furnaces requiring metallurgical coals ● Newer blast furnaces increase demand for PCI coals as producers loo
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: U.S. Coal Demand Increases; Fuels 40% of Electricity Generation
U.S. Coal Demand Increases; Fuels 40% of Electricity Generation in the U.S. Source: Peabody Global Analytics and EIA. YTD through October 2014 compared to April 2012. 11 34% 40% 26% 20% 14% 0% 10% 20% 30% 40% 50% ● U.S. coal use rebounds 20% from 2012 lows ● Coal use up 2% YTD; Gas generation down 1
Slide 12: 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 13: 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 13 +100 SPRB and ILB +75 ● SPRB and ILB demand expected
Slide 14: Broad and Growing Opposition to EPA's Proposed Power Plant Rules
Broad and Growing Opposition to EPA’s Proposed Power Plant Rules ● Election marks new opportunity for positive energy policies ● 41 Republican Senators ask EPA to withdraw the rule; 7 Democratic Senators write the President about new plant standards 14 ● Nearly 20 State Legislatures pass legislation
Slide 15: Coal: Least Expensive and Most Reliable Form of Electricity Generation
Coal: Least Expensive and Most Reliable Form of Electricity Generation 15 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 16: Peabody Energy Overview
Peabody Energy Overview 16 Wilpinjong Mine
Slide 17: 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 18: Delivering on Long-Term Journey to Reshape Peabody's Asset Base
18 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 19: 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 20: 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 double peers on contracting strategies and sustainable cost reductions – Leveraging previous investments in equipment, infrastructure and technology – Driving best-in-class continuous improvement –
Slide 21: Midwest Portfolio Well Positioned: Anchored by Key Mines
Midwest Portfolio Well Positioned: Anchored by Key Mines 21 ● 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 22: Peabody's Australia Strategy: Best Access to High-Growth Asian Region
22 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 high-quality position with 925 million tons of Australian reserves ● Majorit
Slide 23: Peabody Driving Sustainable Cost Reductions at Australia Mines
Peabody Driving Sustainable Cost Reductions at Australia Mines ● Productivity improves significantly through first 9 months of 2014 ● Longwalls commissioned at North Goonyella and Metropolitan mines ● Continuing successful owner- operator conversion initiative; Allows for robust mine planning – 95%
Slide 24: Peabody's Core Strengths Targeted to Create Long-Term Value
Peabody’s Core Strengths Targeted to Create Long-Term Value 24 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 25: PeabodyEnergy.com
PeabodyEnergy.com AdvancedEnergyForLife.com
Slide 26: Appendix: Peabody Energy Full-Year Targets
Appendix: Peabody Energy Full-Year Targets 26 2014 Australian Coal Sales 36 to 38 million tons, including 16 to 17 million tons of metallurgical coal and 12 to 13 million tons of seaborne thermal coal 2014 Australian Operating Costs Approximately $70 per ton 2014 U.S. Coal Sales 185 to 190 million t
Peabody Energy — Investor Presentation (December 2014) on 6ix