Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Howard Weil 2012 Energy Conference
31 slides from Peabody Energy's conference presentation, Mar 26, 2012
Slide 1: Howard Weil 2012 Energy Conference
Howard Weil 2012 Energy Conference Gregory H. Boyce Chairman and Chief Executive Officer March 26, 2012 Peabody Energy Energizing The World One BTU At A Time
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: The Global Coal Supercycle: Fundamentals Remain Strong
The Global Coal Supercycle: Fundamentals Remain Strong Global supercycle alive and well Demand growth significant, supplies constrained China coal use and imports escalating India emerging as next major growth center Other nations represent additional upside Coal the world's fastest growing major fu
Slide 4: Peabody Energy Well Positioned for Near and Long Term
Peabody Energy (NYSE: BTU) Well Positioned for Near and Long Term Record 2011 results and strong financial position Australia: Targeting 2012 growth of 8 - 11 million tons; more in 2013 U.S.: Fully contracted in 2012, leader in low-cost regions Current investment program to sustain growth over next
Slide 5: Peabody's Global Transformation Leads to Record Financial Results
Peabody's Global Transformation Leads to Record Financial Results Increasing Revenues, EBITDA and Operating Cash Flow +80% Revenues $ in Millions 2007 $4,422 2008 2009 2010 2011 $7,974 +122% EBITDA $ in Millions 2007 $958 2008 2009 2010 2011 $2,129 +258% Operating Cash Flow $ in Millions 2007 $463 2
Slide 6: Peabody's International Operations Contribute Half of Earnings
Peabody's International Operations Contribute Half of Earnings and Growing EBITDA From Mining Operations 2003 U.S. > 99% 2007 U.S. 83% Australia 17% 2011 U.S. 50% Australia 50% Percentages represent share of Mining EBITDA 6
Slide 7: The Global Coal Supercycle is Alive and Well
The Global Coal Supercycle is Alive and Well 7
Slide 8: Recent Data Supports Coal Supercycle Thesis for Both Met and Thermal Coal
Recent Data Supports Coal Supercycle Thesis for Both Met and Thermal Coal Metallurgical Coal Global steel prices stabilizing, Chinese steel production increasing China housing to be driven by major interior demand growth Thermal Coal India expands coal imports; moves to eliminate coal import tariff
Slide 9: Major Markets: Build Out of Global Coal Generation Continues
Major Markets: Build Out of Global Coal Generation Continues New Coal-Fueled Generating Capacity 2011-2016 Gigawatts Rest of World India China Coal-fueled generation expected to grow 370+ GW by 2016 Additional 1.2+ billion tonnes of coal demand anticipated Vast majority of growth in China and India,
Slide 10: Major Markets: Steel Production Growth Drives Ongoing Met Coal Increases
Major Markets: Steel Production Growth Drives Ongoing Met Coal Increases 40% Steel Increase by 2020 = ~400 Million Tonnes Added Met Coal Global Steel Production Steel Production (million tonnes) 2010 2015P 2020P China's February steel production 15% above Nov. 2011 trough Global steel capacity utili
Slide 11: China, India and Brazil Have Large Upside to Steel Intensity Potential
China, India and Brazil Have Large Upside to Steel Intensity Potential 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 20 - 40 years t
Slide 12: China's Urbanization Rising Yet Still Far Below Other Developed Countries
China's Urbanization Rising Yet Still Far Below Other Developed Countries Greater urbanization to drive construction and manufacturing, which accounts for nearly 80% of China's steel use Each 10% increase in urbanization = ~140 million moving to cities Projections include five-year growth of: Floor
Slide 13: China GDP Growth Consistently Outpaces Targets
China GDP Growth Consistently Outpaces Targets China GDP (CAGR) 2001-2005 10th 5-Year Plan Target 7.2% Actual 9.8% 2006-2010 11th 5-Year Plan Target 8.0% Actual 11.2% 2011-2015 12th 5-Year Plan Target 7.0% Expected Actual 8.5% China's economic growth has exceeded targets each of the past 11 years Ac
Slide 14: China Coal Use Consistently Exceeds National Targets
China Coal Use Consistently Exceeds National Targets China Annual Coal Use For Last Year of Plan (Tonnes in Billions) 2001-2005 10th 5-Year Plan Target 1.1 Actual 2.3 2006-2010 11th 5-Year Plan Target 2.5 Actual 3.5 2011-2015 12th 5-Year Plan Target 3.9 Indicated Performance 5.0 240 GW of coal-fuele
Slide 15: China Expected to Drive Major Growth in Seaborne Coal
China's Expected to Drive Major Growth in Seaborne Coal Wood Mackenzie: Thermal Coal Imports ~1 Billion Tonnes by 2030 China Net Coal Imports Tonnes in Millions 2009 2010 2011 2012P 2016P Met Thermal China's 2011 coal-fueled generation up 14% Net coal imports rise 14% to record 168 million tonnes 20
Slide 16: China's Growth Continues Against Backdrop of Consistent Headlines
China's Growth Continues Against Backdrop of Consistent Headlines 2009 GDP Grew 9.2% With News of… Declining exports causing concerns Post-Olympic slowdown fears Real estate bubbles throughout China Stimulus needed to drive growth 2010 GDP Grew 10.4% With News of… Forecasted declines in manufacturin
Slide 17: India Likely to Be World's Fastest Growing Coal Importer
India Likely to Be World's Fastest Growing Coal Importer Wood Mackenzie: 400 Million Tonnes of Thermal Imports by 2030 2011 Coal-Fueled Generation up 9%; Thermal Coal Imports +35% Thermal coal demand expected to outpace production by >150 MTPY within five years 75 GW of new coal generation expected
Slide 18: Other Nations Create Additional Demand Upside
Other Nations Create Additional Demand Upside Other developed countries just starting to emerge from recession Major long-term infrastructure needs given deferred maintenance/rebuild Japan beginning to rebound from tsunami Additional emerging demand centers over time Brazil rapidly growing steel pro
Slide 19: Major Supply Constraints Tighten Global Coal Markets
Major Supply Constraints Tighten Global Coal Markets Metallurgical Coal Supply Met coal in structural undersupply long-term China experiencing higher costs and declining quality for met coal Basic infrastructure lacking in Mongolia and Mozambique Thermal Coal Supply China thermal coal traveling much
Slide 20: PRB and Illinois Basin Expected to Dual-Serve U.S. and Global Markets
PRB and Illinois Basin Expected to Dual-Serve U.S. and Global Markets PRB and Illinois Basin Expected to Grow 15% to 20% Over Next 5 Years U.S. basins expected to see significant demand shift Lower-cost PRB and ILB regions growing due to: New plants Rising exports Backfill to Eastern plants U.S. por
Slide 21: Coal: The World's Fastest Growing Major Fuel
Coal: The World's Fastest Growing Major Fuel IEA Projects Coal to Grow 65% by 2035 Growth 2000-2010 Coal 48% Natural Gas 31% Hydro 29% Oil 13% Nuclear 7% Growth to 2035 2009 2020 2035 Coal N. Gas Nuclear Hydro Other Source: BP Statistical Review of World Energy 2011; International Energy Agency, Wor
Slide 22: Peabody's Global Platform Drives Results
Peabody's Global Platform Drives Results
Slide 23: Peabody Continues Global Expansion to Serve High-Growth Regions
Peabody Continues Global Expansion to Serve High-Growth Regions World's Only Global Pure-Play Coal Investment International Offices Brisbane New Delhi Newcastle Beijing London Urumqi Ulaanbaatar Singapore Essen Jakarta Balikpapan London Essen New Delhi Urumqi Ulaanbaatar Beijing Singapore Jakarta Ba
Slide 24: Peabody Delivers Strong Margins Superior to Coal Peer Average
Peabody Delivers Strong Margins Superior to Coal Peer Average Contributions to Gross Margins Lead Peers Gross Margins 2010 25% 28% 41% 2011 NYSE Peer Avg. 25% Peabody U.S. 27% Peabody Australia 41% Peabody's U.S. and Australia margins surpass NYSE coal peers Leading producer in low-cost regions in t
Slide 25: Multiple Catalysts Driving Value Creation in 2012
Multiple Catalysts Driving Value Creation in 2012 Increasing Australian exports 2012 met coal target: 14-15 million tons 2012 thermal coal target: 12-13 million tons Delivering on multiple expansion projects Significant pipeline for future opportunities Fully committed U.S. position Strong operating
Slide 26: Peabody Focusing on Four Key Areas in 2012
Peabody Focusing on Four Key Areas in 2012 Maintain Intense Focus on Operational Excellence Integrate Acquisition into Australian Platform Advance Organic Growth Projects Pursue Continued Deleveraging 26
Slide 27: Australia Platform Expanding Through Organic Growth, Macarthur Acquisition
Australia Platform Expanding Through Organic Growth, Macarthur Acquisition Queensland Port Abbot Point Dalrymple Bay Gladstone Brisbane BTU Met Burton N. Goonyella Eaglefield Millennium MCC Mine Coppabella Moorvale Middlemount MCC Project Codrilla New South Wales Port PWCS NCIG Port Kembla BTU Therm
Slide 28: Australia Organic Pipeline To Deliver Growth in 2012 and Beyond
Australia Organic Pipeline To Deliver Growth in 2012 and Beyond 2011 2012 2013 2014 2015 Wilpinjong 2 - 3 MTPY Thermal Millennium 1 - 2 MTPY SHCC/PCI Capex of ~ $275M Wambo Open-Cut 2 - 3 MTPY Thermal/PCI Middlemount ~2 MTPY SHCC/PCI Burton ~1MTPY HCC Metropolitan 1 MTPY HCC Capex of ~ $70M for expa
Slide 29: Peabody's Unmatched Asset Base Levered to the Strongest Markets
Peabody's Unmatched Asset Base Levered to the Strongest Markets Multiple Advantages Over NYSE Coal Peers BTU A B C D E F Low-Cost PRB Illinois Basin U.S. Thermal Exports Aus. Thermal Exports Seaborne Met Trading & Brokerage Global Diversification Multiple Asia Initiatives Little/No CAPP Exposure 29
Slide 30: Howard Weil 2012 Energy Conference
Howard Weil 2012 Energy Conference Gregory H. Boyce Chairman and Chief Executive Officer March 26, 2012 Peabody Energy Energizing The World One BTU At A Time
Slide 31: Appendix: Reconciliation of Adjusted EBITDA
Appendix: Reconciliation of Adjusted EBITDA Reconciliation of Adjusted EBITDA to Income from Continuing Operations, Net of Income Taxes (unaudited) Year Ended December 31, 2011 2010 2009 2008 2007 Adjusted EBITDA $2,128.7 $1,838.7 $1,262.8 $1,728.2 $958.2 Depreciation, depletion and amortization 482