Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Credit Suisse 2010 Energy Summit
27 slides from Peabody Energy's conference presentation, Feb 1, 2010
Slide 1: Credit Suisse 2010 Energy Summit
Credit Suisse 2010 Energy Summit February 2, 2010 Vic Svec Senior Vice President Investor Relations and Corporate Communications Peabody Energy NYSE: BTU
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 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: 2009 Peabody: Delivering Earnings, Expanding Financial Capacity
2009 Peabody: Delivering Earnings, Expanding Financial Capacity U.S. Mining EBITDA grew 17% to $1 billion on higher prices and cost containment Second-half Australia volumes ship at record pace; nearly 75% of met shipped in second half Operating cash flows of $1.04 billion EBITDA of $1.3 billion Cas
Slide 5: Peabody Capitalizing on Outstanding Asia-Pacific Demand
Peabody Capitalizing on Outstanding Asia-Pacific Demand
Slide 6: Coal Demand Will Continue To Outpace Other Fuel Sources
Coal Demand Will Continue To Outpace Other Fuel Sources 2007 2030 Coal 3184 4887 Million Tonnes of Oil Equivalent Source: International Energy Agency, World Energy Outlook 2009. Global Coal Demand Global Coal Use Estimated to Grow 53% by 2030 Asia = 90% of Nearly 3 Billion Ton Global Coal Demand Gro
Slide 7: China Leading the Pacific Market Recovery
2003 2004 2005 2006 2007 2008 2009 Imports -83.124 -67.963 -45.548 -24.988 -2.087 -4.449 104.196 China Leading the Pacific Market Recovery 104 million tonne net importer 185+ MT shift in 6 years 2009 imports triple as exports cut in half Structurally short of met coal Securing long-term thermal and
Slide 8: China: The Driving Force Behind Global Met Coal Demand Growth
China: The Driving Force Behind Global Met Coal Demand Growth U.S. China India ROW East 14 612 64 306 ROW 306 U.S. 14 China 612 India 64 2009 U.S. China India ROW 44 54 6 354 ROW 354 China 54 India 6 1980 U.S. 44 China Met Demand Dwarfs U.S... And 2009 China Met Imports Soar 2008 2009 Mongolia 3.6 4
Slide 9: India Likely to be World's Fastest Growing Coal Importer
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 33 57 85 120 140 170 195 Forecast Range 15 20 30 40 55 India Likely to be World's Fastest Growing Coal Importer Source: Industry reports and Peabody analysis. 2009 coal generation grew 6% Inven
Slide 10: Major New Global Coal-Fueled Generation Build-Out Under Way
China India Other Asia USA Europe South America Other 35 17 8 7 2 2 1 Major New Global Coal-Fueled Generation Build-Out Under Way Source: Platts Worldwide Power Plant Database and Peabody analysis. 80+% of New 2010 Coal Plants in China, India and Other Asia 2010 New Coal-Fueled Generation (GW) New C
Slide 11: Global Seaborne Demand: ~300 MTPA of Growth by 2014
Global Seaborne Demand: ~300 MTPA of Growth by 2014 Source: Barlow Jonker; Peabody analysis. 100+ MTPA of new seaborne coal demand from generation under construction Pacific demand growth nearly 75% of total demand increases India to dominate growth in global coal imports India China Japan South Kor
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 Source: Barlow Jonker; Peabody analysis. Tonnes in million, except U.S. Exc
Slide 13: Pacific Met and Thermal Coal Prices on Pace for 2nd Highest Level
2005 2006 2007 2008 2009 Spot 2010+ 125 115 98 300 129 200 2005 2006 2007 2008 2009 2010 2011 2012 53 52 56 125 70 98.6 103.51 105.26 Newcastle Thermal Coal Source: Third party data. Pricing as of January 18, 2010. High-Quality Hard Coking Coal Per Tonne Pacific Met and Thermal Coal Prices on Pace f
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's 2010 Australian Thermal Exports, Met Coal Expanding 20-30%
Peabody's 2010 Australian Thermal Exports, Met Coal Expanding 20 - 30% * Domestic thermal volumes priced under long-term contracts. Unpriced volumes as of Jan. 26, 2010. Actual results may differ from forecast. Statement on forward-looking information detailed on slide 2. HQHCC HCC SHCC PCI/Other 3.
Slide 16: Peabody's Australian Exports: Potential to Nearly Double in Five Years
2009 2010 5-Yr Forward Domestic Thermal 5.8 6.25 8 Seaborne Thermal 9.6 12.25 16 Seaborne Met 6.9 8.5 13.5 1.5 2.5 2.5 6.0 - 6.5 12.5 - 13.0 7.5 - 8.5 8.0 - 8.5 15.0 - 17.0 12.0 - 15.0 26.0 - 28.0 35.0 - 40.0+ Peabody's Australian Exports: Potential to Nearly Double in Five Years Met: Up to 117% Sea
Slide 17: Australia 5-Year Project Pipeline
Australia 5-Year Project Pipeline Peabody's Australian Growth Projects Target Exports Growth in BTU Australia Platform 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
Slide 18: 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 Strong Trading & Brokerage Results from "Virtual Coal Mine" Trading & Brokerage EBITDA U.S. Non-U.S
Slide 19: Peabody Well Positioned in Fastest Growing U.S. Markets
Peabody Well Positioned in Fastest Growing U.S. Markets
Slide 20: U.S. Coal Demand Set to Recover
U.S. Coal Demand Set to Recover 60 - 80 Million Tons in 2010 Source: Industry analysis, Peabody estimates. 2009 Coal Demand Electricity Generation Gas Back to Coal U.S. Exports 2010 Coal Demand 1062 1062 1062 1062 1062 35 35 35 35 35 20 20 20 20 20 5 5 5 5 5 2009 vs. 2010 Expected Demand Weather spu
Slide 21: Units in U.S. Under Construction Requiring ~65 MTPA of Coal
31 Units in U.S. Under Construction Requiring ~65 MTPA of Coal Includes units newly completed during 2009 and under construction. PRB, ILB to Serve Nearly 2/3 of New Coal-Based Generation The 1,600 MW Prairie State Energy Campus under construction in Southern Illinois; startup in 2011 Coal-Fueled Pl
Slide 22: PRB, Midwest Volumes Likely to Grow While Eastern Production Contracts
PRB, Midwest Volumes Likely to Grow While Eastern Production Contracts PRB advantage Low end of cost curve Primary source for new plants Asian export potential Illinois Basin advantage Lower cost than NAPP and CAPP Major source for new plants Central Appalachia declines Significant production with c
Slide 23: During Early Recovery, PRB Prices Rise Fastest
Prompt Month 2010 2011 2012 9.88 10.42 12.36 13.89 During Early Recovery, PRB Prices Rise Fastest Source: Third party data and Peabody analysis. Pricing as of January 19, 2010. PRB 8800 Price Per Ton $10 $15 Prompt PRB prices have risen ~50% since Oct. 1, 2009, while CAPP prices remain flat The trad
Slide 24: Peabody Well Positioned in the U.S.
Peabody Well Positioned in the U.S. Fully committed/priced in U.S. for 2010 185 - 195 million tons of expected production Patient in 2011 contracting Major leverage to 2012> Largest producer and reserve holder in the PRB and ILB PRB and ILB expected to serve more than 80% of U.S. demand growth throu
Slide 25: Developing Large U.S. Surface Mine to Serve Customer Commitments
Developing Large U.S. Surface Mine to Serve Customer Commitments Indiana Peabody's 8 Million Ton Bear Run Mine Comes on line in 2010 with ~3 million tons of production 90 million tons of production secured by baseload customer agreements Billions of dollars in long-term revenues Expect ~$185 million
Slide 26: BTU: Targeting Continued Growth in Shareholder Value
BTU: Targeting Continued Growth in Shareholder Value Precedent transactions suggest BTU's Australia and PRB assets alone exceed company's enterprise value China rerating coal; Invests $8 billion in coal assets outside its borders in second half of 2009 alone BTU trades at comparable P/E to U.S. peer
Slide 27: For Further Information
For Further Information: Christina Morrow Vice President Investor Relations 1.314.342.7651 Vic Svec Senior Vice President Investor Relations and Corporate Communications 1.314.342.7768