Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Bank of America-Merrill Lynch Global Metals and Mining Conference 2011
25 slides from Peabody Energy's conference presentation, May 10, 2011
Slide 1: Bank of America-Merrill Lynch Global Metals and Mining Conference
Bank of America- Merrill Lynch Global Metals and Mining Conference Gregory H. Boyce Chairman and Chief Executive Officer May 11-12, 2011 Exhibit 99.1
Slide 2: Forward-looking statements
2 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 provided by those sections. Our forwar
Slide 3: Peabody Energy: The Only Global Pure-Play Coal Investment
Peabody Energy: The Only Global Pure-Play Coal Investment World Coal: Long-term supercycle in early stages BTU: Unique assets, position and prospects Significant leverage to high-growth Asian markets #1 in fastest growing U.S. regions Major catalysts for growth and increased shareholder value 3
Slide 4: 2011: Targeting Significant Growth
2011: Targeting Significant Growth First quarter 2011 increases: Revenues +15% EBITDA +17% Op Profit +22% Diluted EPS +29% Targeting up to 40% increase in 2011 EBITDA Targeting 2011 EPS of $3.50 to $4.50 4 Peabody EBITDA $ in Millions EBITDA excludes discontinued operations. EPS is adjusted diluted
Slide 5: BTU: Delivering Superior Margins
BTU: Delivering Superior Margins Source: Earnings release data through Dec. 31, 2010; peers comprised of ACI, ANR, CNX, ICO, MEE and PCX. Gross Margins Containing costs through structural investments and process improvement Leveraging higher prices through portfolio management and contracting strate
Slide 6: Early Stages of Coal Supercycle
Early Stages of Coal Supercycle
Slide 7: Coal: Entering the Early Stages of a Long-Term Supercycle
Coal: Entering the Early Stages of a Long-Term Supercycle 7 Coal: The World's Fastest Growing Fuel for Past Decade Source: BP Statistical Review of World Energy, June 2010. Coal +46% Growth in Major Energy Forms (1999 - 2009) Natural Gas +27% Oil +10% Hydro +25% Nuclear +7%
Slide 8: Future Coal Generation Growth: More Than Double Any Other Source
8 Source: International Energy Agency, World Energy Outlook 2010. Exceeds Growth in Gas, Oil, Nuclear, Hydro, Biomass, Geo & Solar 3,516 1,604 (368) 779 1,030 226 55 107 Incremental Generation by Fuel Type (2008 - 2020) Future Coal Generation Growth: More Than Double That of Any Other Source
Slide 9: Seaborne Thermal Coal: Demand Expected to Outpace Supply
Seaborne Thermal Coal: Demand Expected to Outpace Supply Expected Increase in Seaborne Thermal Demand 2010 - 2015 India China Other Pacific Atlantic Expected Increase in Seaborne Thermal Supply 2010 - 2015 Australia Indonesia Russia S. Africa Colombia Other Source: Peabody analysis. 2010 2015 2010 2
Slide 10: Global Metallurgical Coal Use Forecast to Rise ~550 Million Tonnes by 2020
Global Metallurgical Coal Use Forecast to Rise ~550 Million Tonnes by 2020 Global steel production expected to rise nearly 60% by 2020 Bulk of market share growth in China and India Trend highlights structural shortage of premium coking coal 10 Expected Global Steel Production and Met Coal Demand So
Slide 11: Australia Expected to Supply Majority of Global Met Coal Increase
Australia Expected to Supply Majority of Global Met Coal Increase 11 Expected Increase in Seaborne Met Demand 2010 - 2015 Expected Increase in Seaborne Met Supply 2010 - 2015 Source: Peabody analysis. 65 - 75 Atlantic Brazil India China Europe South Korea Japan 85 - 95 Australia Mongolia Other Pacif
Slide 12: U.S. Demand Expected to Rise in Powder River and Illinois Basins
U.S. Demand Expected to Rise in Powder River and Illinois Basins 12 Expected U.S. Coal Demand Change 2010 - 2015 (Tons in Millions) 60-70 45-55 (5) - 5 (10-15) (45-55) Estimates based on Peabody analysis and industry reports. Includes exports. CAPP Challenged by Permitting, Geology, Safety, Cost Str
Slide 13: Peabody Well Positioned to Serve High-Growth Markets
Peabody Well Positioned to Serve High-Growth Markets
Slide 14: Newcastle Thermal Coal Prices Reaching New Highs
Newcastle Thermal Coal Prices Reaching New Highs BTU levered to rising thermal coal prices Majority of 2011 unpriced coal expected to settle in line with benchmark 80% - 85% unpriced for 2012 Newcastle Thermal Coal Source: Third party pricing data as of April 19, 2011. Unpriced positions as of April
Slide 15: Seaborne Metallurgical Coal Pricing Trend Continues to Increase
Seaborne Metallurgical Coal Pricing Trend Continues to Increase Quarterly contracts settled at $330 per tonne benchmark Peabody levered to rising met coal prices 4 - 5 million tons unpriced for 2011 All 2012 and beyond met coal unpriced 15 Benchmark Met Coal Prices (Dollars / Metric Ton) April Bench
Slide 16: U.S. Coal Demand Likely to See Modest Rebound in 2011
U.S. Coal Demand Likely to See Modest Rebound in 2011 Positives: Year-to-date stockpile draws twice the five-year average 5+% rise in industrial output Increasing coal exports Challenges: Muted GDP growth ~10 MT added coal-to-gas switching affecting CAPP Stockpiles running above target levels Coal p
Slide 17: Major Pipeline of Growth Projects
China GreenGen Mongolia Initiatives Wambo UG Exp. Wambo O/C Exp. New PRB Leases NARM Conveyor Indonesia Sourcing Denham/ Goonyella Corridor School Creek Sage Creek Millennium Expansion Burton Expansion Wilpinjong Prep Jakarta Beijing Twentymile Prep NARM Blending Facility Gateway North United States
Slide 18: Peabody Expanding Australia Production to Serve Rising Demand
Peabody Expanding Australia Production to Serve Rising Demand 18 ~8.0 15.0 - 17.0 12.0 - 15.0 27.0 35.0 - 40.0 Tons in Millions Actual results may differ from forecast. Statement on forward-looking information detailed on slide 2. 8.3 Australia Platform Grows to 35 - 40 Million Tons Per Year by 2014
Slide 19: Peabody Energy: Multiple Growth Catalysts to Serve Asian Demand
Country Country Project Pipeline Australia Organic expansion program to lift production to 35 - 40 million tons by 2014 - 2015 China GreenGen partner; Projects with Huaneng/Calera (Inner Mongolia) and Yankuang (Xinjiang) and others Indonesia Executed long-term sourcing agreement; Pursuing greenfield
Slide 20: BTU Advancing Multiple Projects in U.S.
BTU Advancing Multiple Projects in U.S. Bear Run Growing to ~8 MT in 2012 Wild Boar In production, rising to ~2 MT in 2011 Gateway North Expanding ~40% to 4.5 MT in several years El Segundo Adding 1+ MT in 2011 PRB Adding ultra-class trucks; Modest volume growth in 2011 School Creek pending West Coa
Slide 21: Peabody Secures Major Long-Term Agreement for PRB Exports to Asia
Peabody Secures Major Long-Term Agreement for PRB Exports to Asia Seaborne subbituminous volumes expected to rise 75% by 2015 Peabody access: Up to 24 MTPY Ultimate port capacity of 48 MTPY of coal; 54 MTPY of all commodities Permitting under way by SSA for deep-draft site in Cherry Point, Wash. Est
Slide 22: 2011 Peabody Key Focus Areas
2011 Peabody Key Focus Areas Capture value from upward coal price movements within our significant open position Advance expansion of Australian metallurgical and thermal export mines, work to recapture value lost from the recent flooding Advance emerging growth projects and commercial transactions
Slide 23: Peabody: The Leader Among U.S. Peers
Peabody The Leader Among U.S. Peers #1 Tons Sold #1 Net Income #1 Market Cap #1 Reserves #1 PRB & ILB #1 Exports #1 Credit Rating 23 Fuels 10% of U.S. Generation and 2% of World's Power 2010 Income Greater than Next Eight Largest U.S. Peers Combined Nearly One-Third of U.S. Coal Market Cap 9 Billion
Slide 24: BTU: Significant Upside to Shareholder Value
BTU: Significant Upside to Shareholder Value A return to historical multiples represents significant upside Valuation growth driven by: Global expansion High-quality asset base Earnings leverage to rising seaborne prices Strong track record Current valuation ignores supercycle and prices BTU at late
Slide 25: Bank of America-Merrill Lynch Global Metals and Mining Conference
Bank of America- Merrill Lynch Global Metals and Mining Conference Gregory H. Boyce Chairman and Chief Executive Officer May 11-12, 2011
Peabody Energy — Bank of America-Merrill Lynch Global Metals and Mining Conference 2011 on 6ix