Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Goldman Sachs Annual Global Metals & Mining, Steel Conference 2012
27 slides from Peabody Energy's conference presentation, Nov 28, 2012
Slide 1: Energizing The World One BTU At A Time
Energizing The World One BTU At A Time Goldman Sachs Annual Global Metals & Mining, Steel Conference Vic Svec Senior Vice President Investor Relations and Corporate Communications November 28, 2012 Peabody Energy
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Peabody Energy The use of the words “Peabody,” “the company,” “our” and “we” relate to Peabody Energy Corporation, its subsidiaries and majority-owned affiliates. Certain statements in this presentation are forward-looking within the meaning of Section 27A of
Slide 3: Peabody Positioned for Success in Challenging Market Conditions
Peabody Positioned for Success in Challenging Market Conditions Peabody Energy Long-term coal market view remains favorable Strong growth projected for global met and thermal coal Solid growth expected for PRB and Illinois Basin regions Near-term view is cautious due to decline in global commodity d
Slide 4: Global Coal Markets
Global Coal Markets
Slide 5: Global Seaborne Demand Increasing, Multiple Countries Growing Imports
Global Seaborne Demand Increasing, Multiple Countries Growing Imports Peabody Energy Tonnes in Millions China Net Coal Imports Thermal Met 0 20 40 60 80 100 120 140 160 180 200 2011 YTD 2012 YTD +43% India Coal Imports 0 10 20 30 40 50 60 70 80 90 100 2011 YTD 2012 YTD +9% Europe Coal Imports 0 20 4
Slide 6: Annual World Coal Demand Expected to Grow ~1.3 Billion Tonnes in Five Years
Annual World Coal Demand Expected to Grow ~1.3 Billion Tonnes in Five Years Peabody Energy Expected Global Coal Demand (Tonnes in Millions) 0 2,000 4,000 6,000 8,000 10,000 2011 7,600 ROW 3,175 China 3,845 India 600 2012P 7,900 ROW 3,140 China 4,090 India 640 2016P 8,900 ROW 3,290 China 4,795 India
Slide 7: China, India and Brazil Have Large Upside to Steel Intensity Potential
China, India and Brazil Have Large Upside to Steel Intensity Potential Peabody Energy Emerging countries driving met coal demand through greater urbanization and higher steel consumption Significant steel increases required to reach levels of developed Asia economies Stable stage intensity may take
Slide 8: China Demand Expected to Grow ~1.0 Billion Tonnes by 2016
China Demand Expected to Grow ~1.0 Billion Tonnes by 2016 Peabody Energy Imports Expected to Double From 2011 to 2016 ~240 GW of coal-fueled generation expected to come on line by 2016 Much of buildout occurring in coastal areas Represents >800 MTPY of thermal coal use over time China NDRC seeks cok
Slide 9: India Likely to be World's Fastest Growing Coal Importer
India Likely to be World's Fastest Growing Coal Importer Peabody Energy ~75 GW of new coal generation expected to start over five years Requires additional ~250 MTPY of thermal coal use over time Thermal demand expected to outpace production by >150 MTPY within five years Coal India ordered to incre
Slide 10: Global Seaborne Supply: Australia and Indonesia Expected to Lead Growth
Global Seaborne Supply: Australia and Indonesia Expected to Lead Growth Peabody Energy 2011 Total Exports Metallurgical Thermal 0 50 100 150 200 250 300 350 Indonesia 319 Australia 281 U.S. 93 Russia 88 Colombia 77 South Africa 67 Canada 33 Mongolia 24 China 14 Other 44 Total 2011 Exports: 1,040 Mil
Slide 11: U.S. Coal Markets: Rising Natural Gas Prices and Strong Burn Driving Recovery
U.S. Coal Markets: Rising Natural Gas Prices and Strong Burn Driving Recovery Peabody Energy Expect 2013 coal use to rebound by 40 - 60 million tons PRB and ILB benefit as gas prices move above $2.50 - $2.75 and $3.25 - $3.50, respectively CAPP coal requires gas prices of $4.50 or higher to be compe
Slide 12: U.S. Coal Plant Retirements Largely Offset by New Plants, Capacity Utilization
U.S. Coal Plant Retirements Largely Offset by New Plants, Capacity Utilization Peabody Energy GW of Coal Capacity & Related Coal Burn Expected to Retire 2011 - 2016 1 GW 3 MT 2 GW 3 MT 3 GW 8 MT 2 GW 5 MT 5 GW 9 MT 10 GW 11 MT 5 GW 5 MT 11 GW 13 MT 1 GW 1 MT Cumulative Generation Changes (Tons in Mi
Slide 13: Significant Demand Shift Toward PRB and Illinois Basin
Significant Demand Shift Toward PRB and Illinois Basin Peabody Energy PRB advantage Low end of cost curve Primary source for new plants Benefits from basin switching Asian export potential Illinois Basin advantage Major source for new plants Benefits from new scrubbers and basin switching Transport
Slide 14: Coal Expected to Overtake Oil as World's Largest Energy Source in 2013
Coal Expected to Overtake Oil as World's Largest Energy Source in 2013 Peabody Energy Total World Primary Energy Demand by Fuel Million Tonne of Oil Equivalent 2000 2005 2010 2013 2015 2020 2025 2030 Coal Oil Natural Gas Nuclear Hydro Renewables Source: Wood Mackenzie Energy Service. 14
Slide 15: Peabody's Global Platform
Peabody's Global Platform
Slide 16: Peabody's Global Platform Provides Growth and Earnings Diversification
Peabody's Global Platform Provides Growth and Earnings Diversification Peabody Energy World's Only Global Pure-Play Coal Investment London Essen New Delhi Urumqi Ulaanbaatar Beijing Singapore Jakarta Balikpapan NCIG St. Louis DTA International Offices Brisbane Newcastle London Ulaanbaatar Essen New
Slide 17: Peabody Consistently Delivers Superior Margins
Peabody Consistently Delivers Superior Margins Peabody Energy Peabody's Gross Margins Average Nearly ~30% Above NYSE Peers Gross Margins 2010 33% 25% 2011 32% 25% YTD 2012 29% 22% Peabody Mining Operations U.S. Peer Average Leading producer in low-cost regions in the U.S. with high-margin operations
Slide 18: Peabody U.S. Platform: Continued Focus on Success at Low End of Cost Curve
Peabody U.S. Platform: Continued Focus on Success at Low End of Cost Curve Peabody Energy Continued focus on cost containment: reducing overtime, use of contractors, discretionary spending Lowering 2013 capital for Twentymile Sage Creek and Gateway North extensions while matching new volumes with cu
Slide 19: Peabody's Australia Platform Expanding to Meet Rising Asian Market Demand
Peabody's Australia Platform Expanding to Meet Rising Asian Market Demand Peabody Energy Met Thermal Port Queensland Burton North Goonyella Eaglefield Coppabella Moorvale Millennium Middlemount Abbot Point Dalrymple Bay Gladstone Brisbane New South Wales Wambo Underground Wilpinjong Wambo Open Cut M
Slide 20: Peabody Advancing Late-Stage Projects to Completion
Peabody Advancing Late-Stage Projects to Completion Peabody Energy Wilpinjong expansion completed on time and on budget Expanded BTU's lowest-cost Australia thermal mine capacity by 30% to ~13 MTPY Millennium expansion near completion Doubling mine capacity to ~3 - 4 MTPY Includes SHCC/PCI and addin
Slide 21: Re-Evaluating Future Project Portfolio to Match Market Demand
Re-Evaluating Future Project Portfolio to Match Market Demand Peabody Energy Metropolitan modernization under way; expansion being reassessed Codrilla Mine development under review Mine to add 2 - 3 MTPY (attributable ownership) to LV PCI platform Undergoing drilling and added value engineering Wamb
Slide 22: Acquisition Integration Remains on Track
Acquisition Integration Remains on Track Peabody Energy Upgrading operations to Peabody standards Increasing equipment utilization, efficiencies and prep plant yields Significant improvement in monthly overburden removal rates at Coppabella, Moorvale Synergies on track: marketing, blending, logistic
Slide 23: Acquisition Significantly Strengthens Bowen Basin Position
Acquisition Significantly Strengthens Bowen Basin Position Peabody Energy Peabody Energy Australia Bowen Basin Positioning Before Acquisition Existing Mines: North Goonyella Eaglefield Burton Millennium North Goonyella Mine Eaglefield Mine Burton Mine Coppabella Nebo Millenium Mine Saraji Norwich Pa
Slide 24: Acquisition Significantly Strengthens Bowen Basin Position
Acquisition Significantly Strengthens Bowen Basin Position Peabody Energy New Bowen Basin Portfolio New mines include: Coppabella Moorvale Middlemount Synergies between Moorvale and Millennium Developmental complex with potential for centralized infrastructure Additional projects with coking coal an
Slide 25: Peabody Focused on Strengthening the Balance Sheet
Peabody Focused on Strengthening the Balance Sheet Peabody Energy Continued focus on deleveraging Debt-to-capital at 52% More than $380 million in debt repayments YTD No significant maturities until 2015 Best coal company credit rating Significant liquidity of $2.2 billion at September 30 Capital sp
Slide 26: Peabody Positioned for Success in All Market Conditions
Peabody Positioned for Success in All Market Conditions Peabody Energy Rising metallurgical and thermal coal exports from Australia Leading position in low-cost PRB and Illinois Basin Managing through near-term headwinds and tempering growth projects Aggressive focus on cost control across platform
Slide 27: Energizing The World One BTU At A Time
Energizing The World One BTU At A Time Goldman Sachs Annual Global Metals & Mining, Steel Conference Vic Svec Senior Vice President Investor Relations and Corporate Communications November 28, 2012 Peabody Energy
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