Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Merrill Lynch Global Metals & Mining Conference 2009
26 slides from Peabody Energy's conference presentation, May 11, 2009
Slide 1: Merrill Lynch Global Metals & Mining Conference
Merrill Lynch Global Metals & Mining Conference May 12, 2009 Gregory H. Boyce Chairman and Chief Executive Officer Peabody Energy
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 Three Key Takeaways Three Primary Effects of Current Conditions Soft Near-Term Major Future Strong Investment Markets Market Rebound Opportunities Industry Underinvestment BTU is Swiftly and Depletion Uniquely Moving to to Drive Major Positioned Rebalan
Slide 4: Global Coal Supply-Demand: Historically Swift Response to Rebalance
Global Coal Supply-Demand: Historically Swift Response to Rebalance ? Steel production declines reduce 2009 seaborne met coal demand by 40 to 50 million tonnes – 40 to 45 million tonnes of production reductions announced to date ? Pacific thermal coal market expected to remain largely stable in seco
Slide 5: BTU Focus Areas for 2009
BTU Focus Areas for 2009 U.S. Production: 2009 Sold Out and 2010 80% Priced • Continue focus on strong cost control and productivity – Record safety year in 2008 – Stable U.S. costs over last three quarters • Increase contributions from high-margin operations • Exercise tight capital discipline • Ev
Slide 6: Markets: Strong Contango Represents Real Market Dynamics
Markets: Strong Contango Represents Real Market Dynamics Coal: API 2 Coal: PRB 8800 Natural Gas $99.50 $100 $15 $8 $13.03 $7.01 $75$ 6 $10 $60.00 $7.67 $50$ 4 $3.32 $5 $25$ 2 N/A $0$ 0 $0 May 2009 2010 2011 2012 May 2009 2010 2011 2012 May 2009 2010 2011 2012 2009 2009 2009 6
Slide 7: Fragile Economies... But Early Signs of Recovery?
Fragile Economies... But Early Signs of Recovery? What to Watch for in Gauging the Recovery Atlantic Markets Pacific Markets Leading U.S. China, emerging Economic indicators rise; Asia GDP Growth lagging metrics estimates still falling increasing Industrial Remains weak in First signs of Production
Slide 8: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Three Key Takeaways Three Primary Effects of Current Conditions Soft Near-Term Major Future Strong Investment Markets Market Rebound Opportunities Resurgence from Strong BTU BTU is Underinvestment Contract Uniquely in Energy Supply / Position; Positione
Slide 9: Sharp Rebound Likely When Markets Recover
Sharp Rebound Likely When Markets Recover ? Capital reductions and project cancellations by major energy and mining companies ? Financing challenges further threaten a number of producers ? Environmental challenges in U.S. place 10% of production at risk, virtually all of it exportable ? Geology, pe
Slide 10: Coal Continues to be the World's Fastest Growing Fuel
Coal Continues to be the World’s Fastest Growing Fuel Six-Year Change in Global Energy Consumption Compound Annual Growth Rate Nuclear 4% 0.6% Change Oil 11% 1.7% Hydro 19% 2.9% 2007 2001 — Natural Gas 19% 2.9% Coal 35% 5.1% 0 5 10 15 20 25 30 35 Source: BP Statistical Review of World Energy, June 2
Slide 11: Global Coal Plant Build-out
Global Coal Plant Build-out: 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 under construction in Southern Illinois; startup in 2011 Includes units under construction and newly completed for 2009.
Slide 12: U.S. Economic Stimulus Provides Unprecedented Clean Coal Support
U.S. Economic Stimulus Provides Unprecedented Clean Coal Support • $ 3.4 billion for fossil fuel – $ 1.0 billion for R&D (potentially FutureGen) –$ 800 million for Clean Power Initiative –$ 1.5 billion for industrial CCS demo projects • Carbon storage tax credits – $ 20/tonne CO 2 credit for deep pe
Slide 13: Coal with Carbon Capture and Storage: The Low-Cost, Low-Carbon Option
Coal with Carbon Capture and Storage: The Low-Cost, Low-Carbon Option ? European Commission: Costs of achieving climate goals could be up to 40% higher without CCS ? IEA on options to achieve 50% global emissions reduction by 2050: Carnegie Mellon study: Cost of Coal with CCS is: – Most expensive 15
Slide 14: Btu Conversion and Clean Coal Solutions
Btu Conversion and Clean Coal Solutions Continue as a Global Leader in Clean Coal Solutions Mongolia Inner Mongolia China Kentucky NewGas Inner Mongolia GreatPoint Partnering with Only non-Chinese Advancing Inner Energy to ConocoPhillips equity partner in Mongolian develop on new coal- GreenGen, Chi
Slide 15: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Three Key Takeaways Three Primary Effects of Current Conditions Soft Near-Term Major Future Strong Investment Markets Market Rebound Opportunities Strong BTU Underinvestment BTU is Contract and Depletion Uniquely Position; to Drive Major Positioned Redu
Slide 16: Peabody is Largest Private-Sector Coal Company
Peabody is Largest Private-Sector Coal Company 300 250 Millions) 200 Rio Tinto in 150 (Tons Arch BHP Anglo-American Sales 100 Xstrata Foundation CONSOL 50 Alpha Massey Natural Patriot International Coal 0 0 1 2 3 4 5 6 7 8 9 10 Reserves (Tons in Billions) Source: Company reports and websites, SEC fi
Slide 17: Peabody Has a Strong Track Record of Results
Peabody Has a Strong Track Record of Results Sales Volume Revenues EBITDA 275 $7,000 $2,000 256 $6,593 $1,847 250 $6,000 225 $1,500 200 $5,000 175 $4,000 150 $1,000 Tons Sold 125 $3,000 100 $2,000 75 $500 50 $1,000 25 0$ 0 $0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
Slide 18: Peabody Financially Strong and Sets Records in All Financial Metrics
Peabody Financially Strong and Sets Records in All Financial Metrics 2008: A Picture of Peabody When Markets Rebound 2008 Revenue 45% EBITDA 91% Operating Profit 135% Diluted EPS 123% Operating Cash Flow 209% Operating Cash Flow of $1.41 Billion Available Liquidity of More Than $2 Billion Values rep
Slide 19: Diversity of Earnings Offers Unique Advantages for BTU
Diversity of Earnings Offers Unique Advantages for BTU International EBITDA Share Grows to +50% in 2008 $1.85 Billion $969 Million U.S. International $422 Million EBITDA EBITDA 2003 2007 2008 Values represent continuing operations. 22
Slide 20: BTU's Pacific Platform Well-Positioned to Serve Strongest Growth Markets
BTU’s Pacific Platform Well-Positioned to Serve Strongest Growth Markets ? Peabody has a growing position in world’s largest coal-exporting nation ? Serving fastest-growing markets in the world – 1 million tons to China already booked in 2009 – India a major thermal and met coal customer ? Major pla
Slide 21: Operations, Trading and Development Create Global Growth Opportunities
Operations, Trading and Development Create Global Growth Opportunities London Beijing St. Louis Operations Trading & Local Offices Countries Served Sydney Ports BTU Clean Coal Projects Coal Exports Domestic Sales 24
Slide 22: Developing Largest Eastern U.S. Surface Mine to Serve Customer Commitments
Developing Largest Eastern U.S. Surface Mine to Serve Customer Commitments Peabody’s 8 Million Ton Per Year Bear Run Mine • Revenues of nearly $6 billion over time Indiana • 90 million tons of production secured by long-term customer agreements Farmersburg Bear Run Miller Creek Viking • Production b
Slide 23: Peabody Trades at Historic Low Share Price Given EBITDA Performance
Peabody Trades at Historic Low Share Price Given EBITDA Performance $2,000 $90 $1,847 $1,800 $80 $1,600 $70 $1,400 $60 $1,200 $50 $1,000 $911 $969 $696 $40 $800 $30 $600 $490 $422 $20 $400 $200 $10 $0$ 0 2003 2004 2005 2006 2007 2008 EBITDA ($ in Millions) Share Price ($) Peabody values reflect 30-d
Slide 24: Peabody Among Top 1% for Profit Growth in Recent Fortune 500
Peabody Among Top 1% for Profit Growth in Recent Fortune 500 ? BTU ranked No. 5 in Fortune 500 for one- and five-year growth in profits ? Only company in the top 10 for profit growth in both the one- and five-year period ? BTU in top 20 for total return to shareholders over last five years ? Ranked
Slide 25: Peabody Uniquely Positioned Within Coal Industry for Success
Peabody Uniquely Positioned Within Coal Industry for Success Strength BTU Peers ? Broad global diversity ? ? X ? Serving major long-term demand ? ? X growth in emerging nations ? Able to avoid geology, permitting and ? ? ? compliance issues in high-cost regions ? Leading trading position ? ? X ? Not
Slide 26: For Further Information
PeabodyEnergy.com For Further Information: Vic Svec Christina Morrow Senior Vice President Director Investor Relations and Investor Relations Corporate Communications 1.314.342.7651 1.314.342.7768
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