Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Morgan Stanley Global Basic Materials Conference 2009
24 slides from Peabody Energy's conference presentation, Feb 17, 2009
Slide 1: Morgan Stanley Global Basic Materials Conference
MORGAN STANLEY GLOBAL BASIC MATERIALS CONFERENCE Rick Navarre President Feb. 17, 2009
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: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Strategic actions have led to a 2008 performance that reveals the power of Peabody's global platform The ultimate market rebound may be stronger than expected due to long- term demand and lack of investment BTU is uniquely suited to benefit from industr
Slide 4: Global Coal Markets Impacted by Global Economic Downturn
Global Coal Markets Impacted by Global Economic Downturn Global steel production down as much as 30% in fourth quarter of 2008 U.S. steel producers trough out at 33% capacity utilization in late December Global generation growth nearly cut in half to 2.7% in 2008 U.S. generation off ~2% in second ha
Slide 5: Three Trends in Volatile Global Coal Markets
13 Months and Three Trends in Volatile Global Coal Markets Newcastle and API4 (South Africa coal for delivery to Europe) pricing for prompt quarter delivery. API4 Newcastle January July December Change in Major Benchmark Coal Prices Rise Fall Stabilizing Recovery ? ? 2009
Slide 6: Sharp Rebound Likely When Markets Recover
Sharp Rebound Likely When Markets Recover Significant demand from electricity use by emerging nations Geology, permitting and safety compliance challenges in certain high-cost regions Financing will be an industry challenge Lack of investment during financial crisis likely to lead to even stronger r
Slide 7: Global Coal Supply-Demand: Swift Response to Rebalance
Global Coal Supply-Demand: Swift Response to Rebalance 2008 Seaborne Met Demand (Tonnes in Millions) Pacific 143 Atlantic 72 215 2008 Seaborne Thermal Demand (Tonnes in Millions) Pacific 378 Atlantic 222 600 2009 SEABORNE MET Potential Demand Cuts Steel Production (30 - 40) Announced Supply Cuts Ann
Slide 8: Global Coal Supply-Demand: Swift Response to Rebalance (U.S.)
Global Coal Supply-Demand: Swift Response to Rebalance 2009 U.S. COAL Potential Demand Cuts Generation (15 - 20) Low Natural Gas (10 - 15) Reduced Exports (15 - 20) Stockpiles (15 - 20) Announced Supply Cuts Announced Cuts (45 - 50) From Half of U.S. Production Base 2008 U.S. Coal Metrics (Tons in M
Slide 9: China Continues to Reduce Exports While India Increases Imports
China Continues to Reduce Exports While India Increases Imports China reduced thermal coal exports 21% in 2008 Issues 20% fewer export licenses YTD 2009 Discouraging exports through higher thermal and met coal export tariffs India is the fastest-growing coal importer in the world Stockpiles below 4
Slide 10: Coal Continues to be the World's Fastest Growing Fuel
Compound Annual Growth Rate 0.6% 1.7% 2.9% 2.9% 5.1% Coal Continues to be the World's Fastest Growing Fuel Six-Year Change in Global Energy Consumption Source: BP Statistical Review of World Energy, June 2008. Coal Natural Gas Hydro Oil Nuclear 2002 - 2004 35.15 19.02 18.93 10.53 3.51 35% 2001 - 200
Slide 11: IEA Projects 61% Growth in Global Coal Use by 2030
International Energy Agency Projects 61% Growth in Global Coal Use by 2030 Source: International Energy Agency, World Energy Outlook 2008.
Slide 12: Global Coal Plant Buildout
Global Coal Plant Buildout: 200 GW Under Construction; 700 MTPA of Coal Use 30 Units in U.S. Under Construction Requiring ~70 MTPA of Coal The 1,600 MW Prairie State Energy Campus is under construction in Southern Illinois Includes units under construction and newly completed for 2009.
Slide 13: Obama Administration: Coal is "A Great Resource"
Obama Administration: Coal is "A Great Resource"; More Funding Proposed "Coal is a vital resource in our country. It provides about 50% of our electricity." Recent Poll: 72% of Opinion Leaders Support Use of Coal "The coal resources in the United States are immense. I am hopeful and optimistic we ca
Slide 14: Coal Markets Summary
Coal Markets Summary Coal Remains World's Largest and Fastest-Growing Fuel Coal Markets Impacted by Global Economic Downturn but Global Supply Cuts Significant Markets Showing Some Early Positive Signs Lack of Investment Likely to Drive Eventual Sharp Rebound Clean Coal Technologies Pave the Way for
Slide 15: Peabody is the Largest Private-Sector Coal Company
Peabody is the Largest Private-Sector Coal Company Rio Tinto BHP Arch Anglo-American Consol Xstrata Foundation Massey Alpha Natural Resources International Coal Source: Most recent company reports and websites, SEC filings and Peabody analysis. Values are on a short-ton basis. Peabody reserves based
Slide 16: Peabody: Strong Track Record of Results
2003 2004 2005 2006 2007 2008 2226 2763 3598 4051 4545 6593 2003 2004 2005 2006 2007 2008 422 490.1 696.4 910.9 968.6 1847.3 Peabody: Strong Track Record of Results 2003 2004 2005 2006 2007 2008 182.2 202.6 216.1 223.3 237.8 255.5 EBITDA In millions. Reflects results from continuing operations for 2
Slide 17: BTU: Performance Sets Records in All Financial Metrics
Revenue 45% EBITDA 91% Operating Profit 135% EPS 122% Operating Cash Flow 209% BTU: Performance Sets Records in All Financial Metrics Available Liquidity of ~$2 Billion Operating Cash Flow of $1.41 Billion Dollars in millions except EPS. Values represent continuing operations. Unaudited.
Slide 18: BTU Advantage: Global Platform Offers Growing and Diverse Earnings
BTU Advantage: Global Platform Offers Growing and Diverse Earnings 1st Qtr 2nd Qtr 1 99 2003 International EBITDA Share Grows to +50% in 2008 1st Qtr 2nd Qtr 52 48 2008 United States International 1st Qtr 2nd Qtr 21 79 2007 $422 Million $969 Million $1.85 Billion Values represent continuing operatio
Slide 19: BTU Focus Areas for 2009
BTU Focus Areas for 2009 Continue focus on strong cost control and productivity Record safety year in 2008 Stable U.S. costs for last three quarters Increase contributions from high-margin operations North Antelope Rochelle El Segundo High-quality met mines Exercise tight capital discipline Evaluate
Slide 20: Why Peabody is Well Positioned to Weather the Downturn
Why Peabody is Well Positioned to Weather the Downturn Broad geographic diversity Best access to high-growth global markets Access to capital to seize opportunities Installed capacity to respond to upturn Leading trading position offers first-mover advantage Largely contracted for 2009 and 2010 Unpr
Slide 21: Global Leader in Btu Conversion and Clean Coal Solutions
Peabody: A Global Leader in Btu Conversion and Clean Coal Solutions Only non-Chinese equity partner in GreenGen, China's centerpiece coal / climate initiative Partnering with ConocoPhillips on new coal- to-natural gas facility in Kentucky GreatPoint Energy to develop coal-to-gas plants * Shengli 3 A
Slide 22: Peabody Uniquely Positioned Among Coal Peers for Success
Peabody Uniquely Positioned Among Coal Peers for Success Serving major long-term demand growth in emerging nations Able to avoid geology, permitting and compliance issues in high-cost regions Not challenged by liquidity or inability to access capital Able to be opportunistic in acquisitions during c
Slide 23: Peabody's EBITDA and Share Price Sharply Diverge in 2008
2003 2004 2005 2006 2007 2008 EBITDA ($ in Millions) 422 490 696 911 969 1847 Peabody's EBITDA and Share Price Sharply Diverge in 2008 Share Price ($) Peabody values reflect 30-day moving average, the March 2005 and February 2006 2-for-1 stock splits and discontinued operations including the 2007 Pa
Slide 24: Morgan Stanley Global Basic Materials Conference
MORGAN STANLEY GLOBAL BASIC MATERIALS CONFERENCE Rick Navarre President Feb. 17, 2009
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