Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Investor Presentation (November 2011)
33 slides from Peabody Energy's investor presentation, Nov 8, 2011
Slide 1: Peabody Energy Australia Overview
Peabody Energy Australia Overview Rob Hammond Acting Group Executive and Managing Director Australian Operations November 9, 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: Peabody Energy: Expanding Global Reach to Serve Coal's Supercycle
Peabody Energy: Expanding Global Reach to Serve Coal's Supercycle Australia represents a major cornerstone of Peabody's growth Unmatched international pipeline with major Australian and Asia projects Significant upside with earnings growth and multiple expansion 3
Slide 4: 2011: Targeting Peabody's Best Year
2011: Targeting Peabody's Best Year YTD 2011 increases: Revenues +15% EBITDA +10% EPS +21% 2011 Targets: EBITDA of $2.125 - $2.325 billion; EPS of $3.70 to $4.15 Peabody EBITDA $ in millions 2006 910 2007 2008 2009 2010 1815 2011 Est. Target 2,125-2,325 YTD as of Sept. 30, 2011 4
Slide 5: Peabody's Earnings Now Balanced with Australia
Peabody's Earnings Now Balanced with Australia Peabody continues transformation to global coal company Multiple global initiatives increase earnings leverage to stronger international markets Peabody's Earnings Now Balanced with Australia Peabody continues transformation to global coal company Multi
Slide 6: World in Early Stages of Supercycle for Coal
World in Early Stages of Supercycle for Coal Asia Represents 90+% of 4 Billion Tonne Coal Demand Growth +160 +30 +60 +580 +910 +2,320 Coal Demand Growth 2008 - 2035 (Tonnes in Millions) U.S. growth presented in short tons. Source: World Energy Outlook 2010, International Energy Agency; Annual Energy
Slide 7: Global Supercycle Story Still in Early Chapters
Global Supercycle Story Still in Early Chapters China's 12th Five-Year Plan ~$440 Billion Power Generation Investments ~$400 Billion Electricity Grid Investments ~$185 Billion Urban Subway Investments 55,000 Miles Length of Railroad Tracks More Than $1 Trillion in Investments in Key Infrastructure P
Slide 8: India Likely to be World's Fastest-Growing Coal Importer
India Like to be World's Fastest-Growing Coal Importer GDP expected to rise from $1.9 trillion to $10 trillion by 2025 Middle class expected to rise 10-fold to 580 million by 2025 India accelerating spending on infrastructure in 12th five-year plan 10% CAGR > $1 trillion investments; Double prior pl
Slide 9: Peabody Progressing Toward "Asia 100" Goal
Peabody Progressing Toward “Asia 100” Goal Australia exports China JVs Tavan Tolgoi Indonesia supplies PRB to Asia 9
Slide 10: Platform Expanding Through Organic Growth and Macarthur Acquisition
Australia Platform Expanding Through Organic Growth and Macarthur Acquisition Expansions are in process at Burton, Wilpinjong, Metropolitan and other operations Expected Australia Volumes 2010 Domestic Thermal 6 Seaborne Thermal 11 Met 10 Total 27 2011 Domestic Thermal 6.5 Seaborne Thermal 12-13 Met
Slide 11: Peabody Delivering on Organic Growth Projects
Peabody Delivering on Organic Growth Projects Planned Expansions (Tons in Millions) Mine Additional MTPY First Coal Burton 1 - 2 HCC Late 2012 North Goonyella 1 - 2 HQHCC 2014 Millennium 1 - 2 SH/PCI Late 2011 Wilpinjong 2 - 3 T Q4 2011 Wambo ~3 T 2012 - 2013 Metropolitan 1 HCC Late 2013 Met Coal Mi
Slide 12: Growth Projects: Burton Widening
Australia Growth Projects: Burton Widening Project Description Hard coking coal (HCC) enhances blending with other products from the Burton complex Burton Widening Project is a fully permitted mine life extension via the reopening of previously mined area Project engaged in late 2010, entails ancill
Slide 13: Growth Projects: Burton Widening
Australia Growth Projects: Burton Widening Burton Mine, opened in late 1996, was one of the first to use a terrace mining method for extracting steep seams The Widening Project will expand Burton's terrace mining method to depths approaching 230 meters at the high-wall, an Australian first Over 62 m
Slide 14: Growth Projects: Goonyella Top Coal Caving
Australia Growth Projects: Goonyella Top Coal Caving Project Description Peabody licensing agreement with Yanzhou Coal Mining Company to deploy Longwall Top Coal Caving (LTCC) mining technology in second half 2012 Created solid relationship for future development opportunities in China while gaining
Slide 15: Growth Projects: Millennium Expansion Project
Australia Growth Projects: Millennium Expansion Project Description Semi Hard Coking Coal and Pulverized Coal Injection (PCI) coal to supply increasing Asian demand Approved expansion and extension project exploits the 165 million ton reserve base Environmental Impact Statement approved in August; r
Slide 16: Growth Projects: Millennium Expansion
Australia Growth Projects: Millennium Expansion The Millennium Mine, opened in 2006, is located in Bowen Basin Expansion will increase the life of the mine by approximately 16 years Optimized mine plans and newest ultra class truck and electric shovel technology to achieve greater efficiencies Coal
Slide 17: Growth Projects: Wilpinjong Expansion
Australia Growth Projects: Wilpinjong Expansion Project Description High-quality thermal coal for domestic and export markets Approval granted in February 2010 to expand production Expansion includes state of the art upgrade of the mine's coal handling and preparation plant (CHPP) to 1,200 tph capac
Slide 18: Growth Projects: Wilpinjong Expansion
Australia Growth Projects: Wilpinjong Expansion The $90 million project is nearing completion on time and on budget The project has an outstanding safety record with 298 thousand construction hours without a lost time injury logged project to date New high speed conveyors support expanded production
Slide 19: Growth Opportunities: Wambo Expansion
Australia Growth Opportunities: Wambo Expansion Project Description High quality, low ash thermal and PCI coal Investigating a range of options for mid-to long-term expansion Feasibility/Design Stage Optimizing mine plans for both open cut and underground operations Exploration drilling ongoing Targ
Slide 20: Growth Projects: Metropolitan Expansion
Australia Growth Projects: Metropolitan Expansion Project Description Fully permitted underground mine expansion and modernization Quality HCC product shipped from unconstrained Port Kembla to meet expanding overseas sales CHPP upgrade and new drift excavation is under way Additional 1 million tons
Slide 21: Growth Projects: Metropolitan Expansion
Australia Growth Projects: Metropolitan Expansion The Metropolitan Mine, located 50 kilometres south of Sydney in New South Wales, was founded in 1888 and is Australia's oldest continually operating coal mine $70 million expansion combined with modernization of mine Repositions mine in lowest cost q
Slide 22: Growth Opportunities: Denham/Goonyella Corridor Expansion
Australia Growth Opportunities: Denham/Goonyella Corridor Expansion Project Description Highest quality, market recognized “Goonyella” branded HCC product Potential for successful underground extension and/or surface mine Project feasibility in progress Construction of new prep plant module and supp
Slide 23: Queensland Rail and Peabody Positioning
Queensland Rail and Peabody Positioning Expected Rail Improvements Planning and modeling initiatives to improve capacity continue Additional train sets added to Pacific National and Queensland Rail networks Queensland Rail conducting preliminary planning for further expansions Peabody Positioning Lo
Slide 24: DBCT and Peabody's Positioning
DBCT and Peabody's Positioning Expected Rail Improvements Several versions of total Supply Chain Modelling completed and potential initiatives identified Potential for additional 68 million tonnes of capacity at Dudgeon Point for 2017 commencement Peabody Positioning Capacity increasing from 10 mill
Slide 25: Newcastle Rail and Peabody's Positioning
Newcastle Rail and Peabody's Positioning Expected Rail Improvements Industry framework enables alignment of port and rail capacity across Hunter Valley Boosts certainty and facilitates timely expansion Long-term contracts promote investment Numerous projects under way to increase Hunter Valley coal
Slide 26: Newcastle and Peabody's Positioning
Newcastle and Peabody's Positioning Expected Rail Improvements PWCS expected to reach 145 MTPA by 2012 and 180 MTPA by 2016 NCIG Stage 1 (30 MTPA) delivered; Stage 2AA being constructed and Stage 2F approved in August 2011 Potential for up to 120 MPTA at the T4 project Peabody Positioning Expanding
Slide 27: 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 growth opportunities, large reserve base and significant potential synergies Continues global buildout and earnings cont
Slide 28: Macarthur: Active Production Base With Major Growth Pipeline
Macarthur: Active Production Base With Major Growth Pipeline Queensland Port Abbott Point Dalrymple Bay Gladstone Wiggins Island Peabody Met Coal Mine Burton North Goonyella Eaglefield Millennium Macarthur Mine Coppabella Moorvale Macarthur Development Olive Downs Codrilla Vermont East Middlemount P
Slide 29: Transaction Significantly Strengthens Peabody's Position in Australia
Transaction Significantly Strengthens Peabody's Position in Australia Peabody Australia pro forma 2010 production of 32 million tons with Macarthur Pro forma production of 45 - 50 million tons by 2014-15 given combined growth platforms Australian Production Thermal Met Tons in Millions Xstrata 57 BH
Slide 30: 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 31: Peabody's Unmatched Growth Pipeline
Peabody's Unmatched Growth Pipeline 2011 2012 2013 2014 2015 Beyond Australia Millennium 1-2 MTPY SHCC/PCI Burton 1 - 2 MTPY HCC Metropolitan 1 MTPY HCC N. Goonyella LTCC 1 - 2 MTPY HQHCC Wilpinjong 2 - 3 MTPY Thermal Wambo ~3 MTPY Thermal/PCI Goonyella Lower 3-4 MTPY HQHCC Macarthur Macarthur Takeo
Slide 32: Peabody Positioned for Significant Growth and Value Creation
Peabody Positioned for Significant Growth and Value Creation Industry Leading Reserves and Production Base Major Cash Flow Generation and Strong Balance Sheet Expanding in Fastest Growing Global Markets Significant Organic Growth Capability Addition of Macarthur Coal Multiple Expansion to Return to
Slide 33: Peabody Energy Australia Overview
Peabody Energy Australia Overview Rob Hammond Acting Group Executive and Managing Director Australian Operations November 9, 2011
Peabody Energy — Investor Presentation (November 2011) on 6ix