Peabody Energy Corporation · NYSE:BTU
Peabody Energy — RBC 2009 Global Energy and Power Conference
31 slides from Peabody Energy's conference presentation, Jun 1, 2009
Slide 1: RBC 2009 Global Energy and Power Conference
RBC 2009 Global Energy and Power Conference June 1 - 2, 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 Three Primary Effects of Current Conditions Three Key Takeaways Soft Near-Term Markets Major Future Market Rebound Strong Investment Opportunities Industry Swiftly Moving to Rebalance Supply/Demand Underinvestment and Depletion to Drive Major Oil, Gas a
Slide 4: Global Coal Supply-Demand: Historically Swift Response to Rebalance
Global Coal Supply-Demand: Historically Swift Response to Rebalance Steel 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 second half of 2009 R
Slide 5: Year-Over-Year Weekly Change in U.S. Coal Shipments
Year-Over-Year Weekly Change in U.S. Coal Shipments Source: Energy Information Administration, Weekly Coal Production Report, May 21, 2009. Second Quarter U.S. Coal Shipments Down ~130 Million Tons on Annualized Basis
Slide 6: 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 over last three quarters Increase contributions from high-margin operations Exercise tight capital discipline Evaluate opportunistic acquisitions amid distressed markets Pursu
Slide 7: Markets: Strong Contango Represents Real Market Dynamics
6/1/2009 2009 2010 2011 2012 8.23 8.37 10.5 13.35 14.1 6/1/2009 2009 2010 2011 2012 3.91 4.36 6.23 7.01 7.25 Markets: Strong Contango Represents Real Market Dynamics 6/1/2009 2009 2010 2011 2012 62.6 66.45 85.42 98.97 104.6 Natural Gas Coal: PRB 8800 Coal: API 2 $104.60 $8.23 $7.25 $62.60 $14.10 $3.
Slide 8: Fragile Economies... But Early Signs of Recovery?
Fragile Economies... But Early Signs of Recovery? What to Watch for in Gauging the Recovery Atlantic Markets Atlantic Markets Pacific Markets Pacific Markets Economic Growth Leading U.S. indicators rise; lagging metrics still falling China, emerging Asia GDP estimates increasing Industrial Productio
Slide 9: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Three Primary Effects of Current Conditions Three Key Takeaways Soft Near-Term Markets Major Future Market Rebound Strong BTU Contract Position; Reducing 2009 Production Resurgence from Underinvestment in Energy Supply / Long-Term Energy Growth BTU is U
Slide 10: 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, permitting
Slide 11: China Continues to Reduce Exports While India Increases Imports
China Continues to Reduce Exports While India Increases Imports China: record imports YTD 2009 May be 10 to 20 million tonne net coal importer in 2009 Massive small mine closure under way Using others' resources first India is the world's fastest- growing coal importer Domestic production to be sign
Slide 12: Coal Continues to be the World's Fastest Growing Fuel
Compound Annual Growth Rate 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 - 2007 Change 19% 11% 19% 4% C
Slide 13: International Energy Agency Projects 61% Growth in Global Coal Use by 2030
International Energy Agency Projects 61% Growth in Global Coal Use by 2030 Million Tonnes of Oil Equivalent Coal Natural Gas 977 MTOE Nuclear 158 MTOE Hydro 122 MTOE Wind & Solar 210 MTOE Source: International Energy Agency, World Energy Outlook 2008. 1,666 MTOE 1,467 MTOE Growth in Coal Demand Thro
Slide 14: 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 under construction in Southern Illinois; startup in 2011 Includes units under construction and newly completed for 2009.
Slide 15: 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 CO2 credit for deep permanent storage
Slide 16: Costs of Achieving Climate Goals Could Be Higher Without CCS
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: Most expensive option is "No CCS" scenario which results in additional costs in 2050 of $1.28 trillion Mitigation cost without CCS is 71% grea
Slide 17: Carbon Capture and Storage Projects Accelerating Around the World
Carbon Capture and Storage Projects Accelerating Around the World Current CO2 Capture Projects Gasification Synfuels Plant Major Pilot Plants (Post-Combustion) CO2 Separation from Natural Gas for CCS Food-grade CO2/Carbonation of Brine/ Urea (Post-Combustion) Current CO2 Storage Demonstration Projec
Slide 18: Peabody: A 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 Inner Mongoli
Slide 19: BTU: The Only Global Pure-Play Coal Investment
BTU: The Only Global Pure-Play Coal Investment Three Primary Effects of Current Conditions Three Key Takeaways Soft Near-Term Markets Major Future Market Rebound Strong Investment Opportunities Strong BTU Contract Position; Reducing 2009 Production Underinvestment and Depletion to Drive Major Oil, G
Slide 20: Peabody is Uniquely Positioned to Create Value as Global Markets Recover
Peabody is Uniquely Positioned to Create Value as Global Markets Recover Unmatched size and diverse portfolio Record of results and major financial strength Serving the fastest-growing global markets Growing Australian platform Emerging projects in China and Mongolia Highly contracted U.S. position
Slide 21: Peabody is Largest Private-Sector Coal Company
Peabody is Largest Private-Sector Coal Company Source: Company reports and websites, SEC filings and Peabody analysis. Values are on a short-ton basis.
Slide 22: Peabody Has a Strong Track Record of Results
2004 2005 2006 2007 2008 2763 3597.9 4050.9 4545.1 6593.4 2004 2005 2006 2007 2008 490.1 696.4 911 968.6 1847.3 Peabody Has a Strong Track Record of Results 2004 2005 2006 2007 2008 200.3 213.7 221.4 236.1 255.5 EBITDA In millions. Reflects results from continuing operations. Sales volumes unaudited
Slide 23: Peabody Financially Strong and Sets Records in All Financial Metrics
2008 Revenue 45% EBITDA 91% Operating Profit 135% Diluted EPS 123% Operating Cash Flow 209% 2008: A Picture of Peabody When Markets Rebound Operating Cash Flow of $1.41 Billion Available Liquidity of More Than $2 Billion Values represent continuing operations for the year ended December 31, 2008. Pe
Slide 24: Diversity of Earnings Offers Unique Advantages for BTU
Diversity of Earnings Offers Unique Advantages for BTU 1st Qtr 2nd Qtr 1 99 2003 International EBITDA Share Grows to +50% in 2008 1st Qtr 2nd Qtr 52 48 2008 1st Qtr 2nd Qtr 21 79 2007 $422 Million $969 Million $1.85 Billion Values represent continuing operations. U.S. EBITDA International EBITDA
Slide 25: 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 platform offe
Slide 26: Operations, Trading and Development Create Global Growth Opportunities
Operations, Trading and Development Create Global Growth Opportunities Operations Trading & Local Offices Countries Served/Sourced Ports Coal Exports
Slide 27: Developing Largest Eastern U.S. Surface Mine to Serve Customer Commitments
Developing Largest Eastern U.S. Surface Mine to Serve Customer Commitments Revenues of nearly $6 billion over time 90 million tons of production secured by long-term customer agreements Production begins mid-year 2009 Capital investment of $350 - $400 million Exploring similar transactions to secure
Slide 28: Peabody Trades at Historic Low Share Price Given EBITDA Performance
Peabody Trades at Historic Low Share Price Given EBITDA Performance Peabody values reflect 30-day moving average, the March 2005 and February 2006 2-for-1 stock splits and discontinued operations including the 2007 Patriot Coal spin-off.
Slide 29: 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 12th amo
Slide 30: Peabody Uniquely Positioned Within Coal Industry for Success
Peabody Uniquely Positioned Within Coal Industry for Success Broad global diversity Serving major long-term demand growth in emerging nations Able to avoid geology, permitting and compliance issues in high-cost regions Leading trading position Not challenged by liquidity or inability to access capit
Slide 31: For Further Information
For Further Information: Christina Morrow Director Investor Relations 1.314.342.7651 Vic Svec Senior Vice President Investor Relations and Corporate Communications 1.314.342.7768 PeabodyEnergy.com
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