Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Bank of America Merrill Lynch Global Metals & Mining Conference 2010
28 slides from Peabody Energy's conference presentation, May 11, 2010
Slide 1: Bank of America Merrill Lynch Global Metals & Mining Conference
Bank of America Merrill Lynch Global Metals & Mining Conference May 11, 2010 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: Peabody Energy: The Only Global Pure-Play Coal Investment
Peabody Energy: The Only Global Pure-Play Coal Investment Best access to fastest growing global markets with expanding Australia platform, trading activities and Asia growth projects Excellent U.S. contracting position and largest producer in fastest growing regions Unmatched reserve base and outsta
Slide 4: 2010 First Quarter Results: Cost Containment, Expanding Margins, Bullish Outlook
2010 First Quarter Results: Cost Containment, Expanding Margins, Bullish Outlook EBITDA and operating profit increase 10% Margins per ton expand 16% in U.S. and 5% in Australia Global incidence rate reduced 10% from record 2009 Second quarter expected to benefit from higher Australia pricing EBITDA:
Slide 5: Peabody Capitalizing on Outstanding Asia-Pacific Demand
Peabody Capitalizing on Outstanding Asia-Pacific Demand
Slide 6: Per Tonne Pricing for Key Australian Products Continues to Increase
2007 2008 2009 2Q 2010 Spot 98 300 129 200 245 2007 2008 2009 2010 2011 2012 2013 56 125 70 105.04 109.53 111.4 113.92 Newcastle Thermal Coal Source: Forecast prices are an average of third party industry data from multiple sources. Pricing as of April 27, 2010. High Quality Hard Coking Coal Per Ton
Slide 7: China: Rapid Transition From Net Exporter to Net Importer
2003 2004 2005 2006 2007 2008 2009 2010 Annual. Imports -83.124 -67.963 -45.548 -24.988 -2.087 -4.449 104.196 39 117 China: Rapid Transition From Net Exporter to Net Importer Data and estimates based on industry reports and Peabody analysis; 2010 reflects Q1 annualized. China Net Coal Imports 2003 2
Slide 8: India: Fastest Import Growth Potential
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Met 16 18 22 22 23 25 28 Thermal 9 11 19 23 29 36 61 105 125 146 168 193 Forecast Range 15 20 30 40 55 India: Fastest Import Growth Potential Data and estimates based on industry reports and Peabody analysis. Q1 steel production +20% versus
Slide 9: Global Steel Production to Drive Met Coal Demand
Global Steel Production to Drive Met Coal Demand Beyond 1 Billion Tonnes U.S. China India ROW East 14 612 64 306 ROW 306 U.S. 14 China 612 India 64 Global Steel Grows 40% by 2020 China Uses Most Global Met Coal Global Steel Production Estimates 2009 Met Coal Consumption (Tonnes in Millions) Tonnes i
Slide 10: Major New Global Coal-Fueled Generation Build-out Under Way
China India Other Asia USA Europe South America Other 55 19 8 7 2 2 1 Major New Global Coal-Fueled Generation Build-out Under Way Data and estimates based on Platts Worldwide Power Plant Database and Peabody analysis. 85+% of New 2010 Coal Plants in China, India and Other Asia 2010 New Coal-Fueled G
Slide 11: Global Seaborne Demand: ~300 MTPA of Growth by 2014
Global Seaborne Demand: ~300 MTPA of Growth by 2014 Data and estimates based on Barlow Jonker and Peabody analysis. 100+ MTPA of new seaborne coal demand from generation under construction Pacific demand growth 75+% of total demand increases India to dominate growth in global coal imports India Chin
Slide 12: Global Seaborne Supply: Expected to Lag Demand Growth
Vietnam Canada China U.S. South Africa South America Russia Indonesia Australia Metallurgical 0 19 1 30 0 0 7 0 135 Thermal 25 4 22 11 64 64 77 197 140 2009 Total Exports Global Seaborne Supply: Expected to Lag Demand Growth Data and estimates based on Barlow Jonker and Peabody analysis. Tonnes in m
Slide 13: Logistics Improvements Secure Australia as World's Go-To Supplier
2004 2005 2006 2007 2008 2009 2010 Est Abbott Point 12.533 12.971 11.207 11.756 13.685 15.242 314 Dalrymple Bay 47.291 50.659 50.946 44.787 47.983 54.225 Hay Point 36.193 33.517 32.152 39.068 35.972 35.008 Gladstone 42.715 42.824 49.75 53.382 56.075 58.017 Brisbane 2.944 4.247 3.952 5.263 5.322 6.42
Slide 14: Location and Cost Advantage Over Other Seaborne Supply
14 Location and Cost Advantage Over Other Seaborne Supply Peabody Competitively Positioned to Serve Growth Markets of Asia Optimal location to serve Asian demand Premium met and thermal coal products Lower cost seaborne supply Significant organic growth potential Expanding export capability with rai
Slide 15: Peabody Lifts 2010 Australian Exports on Strong Pacific Demand
Peabody Lifts 2010 Australian Exports on Strong Pacific Demand * Domestic thermal volumes priced under long-term contracts. Unpriced volumes as of April 22, 2010. Actual results may differ from forecast. Statement on forward-looking information detailed on slide 2. HQHCC HCC SHCC PCI/Other 3.6 2.5 1
Slide 16: Peabody Raising Australia Platform Up to 40 Million Tons by 2014
2009 2010 5-Yr Forward Domestic Thermal 5.8 6.25 8.25 Seaborne Thermal 9.6 12.25 16 Seaborne Met 6.9 10 13.5 1.5 2.5 2.5 6.0 - 6.5 11.5 - 12.0 9.5 - 10.5 8.0 - 8.5 15.0 - 17.0 12.0 - 15.0 27.0 - 29.0 35.0 - 40.0+ Peabody Raising Australia Platform Up to 40 Million Tons by 2014 Met: Up to 117% Seabor
Slide 17: Australia 5-Year Project Pipeline
Australia 5-Year Project Pipeline Peabody's Australian Growth Projects Target Exports Export Met S/UG MTPA Quality Denham Development S 3 - 6 HQHCC Burton Extension S 2 - 3 HCC Metropolitan Expansion UG 1 HCC Millennium Expansion S 2 - 3 Semi-Hard / PCI 8 - 13 Export Thermal Wambo Expansion S/UG 3 -
Slide 18: Peabody Advancing China and India Opportunities
Peabody Advancing China and India Opportunities Long-term met customer from Australia COALTRADE brokering thermal coal Peabody selected as strategic partner by Coal India Discussions ongoing re: long-term coal supplies or other strategic ventures India: Peabody Accessing Fastest-Growing Importing Na
Slide 19: Strong Trading & Brokerage Results from "Virtual Coal Mine"
2003 2004 2005 2006 2007 2008 2009 Domestic EBITDA 45.828 34.781 38.745 81.604 87.781 123.683 96.7 International EBITDA 0 6.258 4.313 11 28.819 95.217 96.7 St. Louis Newcastle London Beijing Singapore Jakarta Strong Trading & Brokerage Results from "Virtual Coal Mine" Trading & Brokerage EBITDA U.S.
Slide 20: Peabody Well-Positioned in Fastest Growing U.S. Markets
Peabody Well-Positioned in Fastest Growing U.S. Markets
Slide 21: PRB and Illinois Basin: Majority of U.S. Coal Demand Growth
PRB and Illinois Basin: Majority of U.S. Coal Demand Growth PRB advantage Low end of cost curve Primary source for new plants Asian export potential Illinois Basin advantage Lower cost than Appalachia Major source for new plants Central Appalachia declines Safety and permitting issues Weak Atlantic
Slide 22: U.S. Coal Demand Set to Recover
U.S. Coal Demand Set to Recover 60 - 80 Million Tons in 2010 Data and estimates based on industry analysis and Peabody estimates. 2009 Coal Demand Electricity Generation Gas Back to Coal U.S. Exports 2010 Coal Demand 1062 1062 1062 1062 1062 30 30 30 30 30 30 30 30 30 30 10 10 10 10 10 2009 vs. 2010
Slide 23: During Early Recovery, PRB Prices Rise Fastest
During Early Recovery, PRB Prices Rise Fastest Data and estimates based on third party data and Peabody analysis. Forecast prices are an average of third party industry data from multiple sources. Pricing as of April 27, 2010. PRB 8800 Price Per Ton Prompt PRB prices rise >75% the last six months; m
Slide 24: Peabody Well Positioned in the U.S.
Peabody Well Positioned in the U.S. Largest producer and reserve holder in the PRB and ILB PRB and ILB expected to serve >80% of U.S. growth through 2014 Operating 9 of the nation's 20 safest mines, including 3 with zero incidents in 2009 Unpriced position 2010 fully committed/priced at 185 - 195 mi
Slide 25: Peabody: U.S. Growth in Key Regions
Peabody: U.S. Growth in Key Regions PRB: Significant Peabody growth potential as Central Appalachia declines Midwest: Beginning Bear Run, pursuing similar models Southwest: Evaluating new long-term markets
Slide 26: BTU: Targeting Continued Growth in Shareholder Value
BTU: Targeting Continued Growth in Shareholder Value Unmatched size and global diversity Excellent access to high-growth markets Outstanding U.S. and Australia platform Global trading & brokerage activities Substantial liquidity to fuel growth
Slide 27: BTU: Significant Valuation Upside
BTU: Significant Valuation Upside $59 average sell-side price target ~35% above share price BTU trading at a discount; multiple now below some U.S.-only coal companies
Slide 28: Bank of America Merrill Lynch Global Metals & Mining Conference
Bank of America Merrill Lynch Global Metals & Mining Conference May 11, 2010 Gregory H. Boyce Chairman and Chief Executive Officer Peabody Energy
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