Peabody Energy Corporation · NYSE:BTU
Peabody Energy — CSFB 2011 Energy Summit
25 slides from Peabody Energy's conference presentation, Feb 9, 2011
Slide 1: CSFB 2011 Energy Summit
1 1 CSFB 2011 Energy Summit February 9-10, 2011 Vic Svec Senior Vice President Investor Relations and Corporate Communications Exhibit 99.1
Slide 2: Statement on Forward-Looking Information
2 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 protecti
Slide 3: Peabody Energy: The Only Global Pure-Play Coal Investment
3 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
Slide 4: Revenues reach record $6.9 billion in 2010
4 Revenues reach record $6.9 billion in 2010 EBITDA rises 41% Doubles in just 4 years Margins expand across operating platform Operating cash flows total $1.1 billion EPS climbs 59% to $3.05 $2.7 billion of liquidity to fund growth $1,815 2010 EBITDA and Earnings Second Best in Company History $ in
Slide 5: BTU: Delivering Superior Margins
5 BTU: Delivering Superior Margins Source: Public documents. Peers comprised of ACI, ANR, CNX, ICO, MEE and PCX through Sept. 30, 2010; Peabody data for mining operations through Dec. 31, 2010. Gross Margins Containing costs through structural investments and process improvement Leveraging higher pr
Slide 6: Global Markets Outstanding for Coal
Global Markets Outstanding for Coal
Slide 7: Seaborne Supply From Weather-Challenged Southern Hemisphere
75+% Seaborne Supply From Weather-Challenged Southern Hemisphere Supply Supply Australia Historic rains curb 15-20 million tonnes of supply Indonesia South Africa South America Rains reduce exports 8-10 million tonnes Canada Port outage and labor strike crimp exports United States Strained Eastern U
Slide 8: Peabody Recovering From Australia Rains, Targeting Higher 2011 Sales
8 Peabody Recovering From Australia Rains, Targeting Higher 2011 Sales Burton North Goonyella Eaglefield Millennium Metropolitan Dalrymple Bay Abbot Point Port Kembla Queensland New South Wales Wilkie Creek Brisbane Wilpinjong Wambo Underground Wambo Open Cut NCIG Newcastle Gladstone Met Coal Mine T
Slide 9: Australian Met Coal Pricing Continues to Increase
Australian Met Coal Pricing Continues to Increase Peabody levered to rising quarterly met coal prices 7 - 8 million tons unpriced in 2011 100% of expected 2012 sales unpriced 9 High-Quality Hard Coking Coal Source: Third party pricing data as of Jan. 25, 2011. Unpriced positions as of Jan. 25, 2011
Slide 10: Newcastle Thermal Coal Prices Reaching New Highs
Newcastle Thermal Coal Prices Reaching New Highs BTU levered to rising thermal coal prices 6 - 7 million tons unpriced in 2011 12 - 13 million tons unpriced in 2012 10 Newcastle Thermal Coal Source: Third party pricing data as of Jan. 25, 2011. Unpriced positions as of Jan. 25, 2011 earnings release
Slide 11: Seaborne Met Coal Market Expected to be Fundamentally Short
Seaborne Met Coal Market Expected to be Fundamentally Short Expected Increase in Seaborne Met Demand 2010 - 2015 Expected Increase in Seaborne Met Supply 2010 - 2015 Tonnes in millions. Source: Peabody analysis. 65 - 75 Atlantic Brazil India China Europe South Korea Japan 85 - 95 Australia Mongolia
Slide 12: Seaborne Thermal Coal: Demand Expected to Outpace Supplies
12 12 Seaborne Thermal Coal: Demand Expected to Outpace Supplies 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 201
Slide 13: Peabody Expanding Australia Production to Serve Rising Demand
Peabody Expanding Australia Production to Serve Rising Demand 13 ~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. 22.3 Australia Platform Grows to 35 - 40 Million Tons Per Year by 201
Slide 14: Peabody's Australian Growth Projects
Project S/U Quality Add'l Volume First Coal Full Production Metallurgical Coal Projects Metallurgical Coal Projects Metallurgical Coal Projects Metallurgical Coal Projects Metallurgical Coal Projects Metallurgical Coal Projects Burton S HCC 1 - 2 Late 2012 2014 Metropolitan U HCC 1 Late 2013 2014 -
Slide 15: U.S. Coal Demand Likely to See Modest Rebound in 2011
U.S. Coal Demand Likely to See Modest Rebound in 2011 Positives: Heating degree days running above average 6% rise in industrial output Little additional coal-to-gas switching likely Increasing coal exports Challenges: Muted GDP growth Coal plants still running at just ~66% of capacity Stockpiles ru
Slide 16: Where to Invest in the U.S.? Peabody Starts Where Demand is Rising
Where to Invest in the U.S.? Peabody Starts Where Demand is Rising 16 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 S
Slide 17: 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 million tons in several years El Segundo Adding 1+ MT in 2011 PRB Adding ultra-class trucks; Modest volume growth in 2011 School Creek pendin
Slide 18: Early Stages of Coal Supercycle
Early Stages of Coal Supercycle
Slide 19: Coal: Entering the Early Stages of a Long-Term Supercycle
Coal: Entering the Early Stages of a Long-Term Supercycle 19 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 20: Coal Generation Growth: More Than Double That of Any Other Source
Coal Generation Growth: More Than Double That of Any Other Source 20 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)
Slide 21: Global Met Coal Use Forecast to Rise by 2020
21 21 Global Met Coal Use Forecast to Rise 600 Million Tonnes by 2020 Expected Global Steel Production And Met Coal Demand Source: World Steel Association; third party data and Peabody analysis. Global steel production expected to rise nearly two-thirds by 2020 Bulk of market share growth in China a
Slide 22: 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 d
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 Greater than the Next Seven Largest U.S. Peers Combined Nearly One-Third of U.S. Coal Market Cap 9 Billion Tons; >
Slide 24: 2011 Peabody Key Focus Areas
24 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 transactio
Slide 25: CSFB 2011 Energy Summit
25 25 CSFB 2011 Energy Summit February 9-10, 2011 Vic Svec Senior Vice President Investor Relations and Corporate Communications