Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Non-Deal Roadshow (October 2006)
26 slides from Peabody Energy's roadshow presentation, Oct 31, 2006
Slide 1: Peabody Energy West Coast Investor Meetings
Peabody Energy West Coast Investor Meetings October 31 and November 1, 2006 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: BTU: Premier Energy Investment
BTU: Premier Energy Investment Growing revenue profile and productivity initiatives lead to expanded margins Unmatched reserve base and diverse portfolio of safe, low-cost operations Well positioned to create value from new generation, global expansion and Btu Conversion Strong balance sheet and rec
Slide 4: Industry Overview
INDUSTRY OVERVIEW id
Slide 5: Major Market Drivers Strengthen Outlook for Coal
DEMAND DRIVERS SUPPLY DRIVERS Global Coal Supply & Demand Major Market Drivers Strengthen Outlook for Coal Regulatory Environment: Safety and Permitting High Cost of Competing Fuels High Steel Demand Strong U.S. Economic Growth Soaring Energy Demand in China and India Higher Utilization of Existing
Slide 6: World Events Drive Coal to Displace Oil & Gas
"BP said it will replace 16 miles of pipeline and production could be closed for weeks or months." - AP 8/7/06 World Events Drive Coal to Displace Oil & Gas "In Nigeria, a quarter of oil production remained shut down due to militant violence." - - FX Street.com 5/5/06 "The eruption of fighting in Le
Slide 7: Global Coal Use Soars 23% in Four Years
Global Coal Use Soars 23%, or 1 Billion Tons, in 4 Years Four-Year Percent Change in Global Energy Consumption Source: BP Statistical Review of World Energy, 2006 edition. Coal Natural Gas Hydro Oil Nuclear 2002 - 2004 23 12 12 8 4 23% 2001 - 2005 Change 12% 8% 12% 4% Coal Natural Gas Oil Hydro Nucl
Slide 8: Global Coal Consumption Forecast to Double by 2030
Global Coal Consumption Forecast to Double by 2030 +689 +456 +3,114 Growth in Total Annual Coal 2003-2030 (Million Short Tons) +137 +22 Amounts in million short tons. Source: U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2006. Projected Australia export f
Slide 9: Major Coal Market Drivers Show Tight Supply-Demand Balance
Major Coal Market Drivers Show Tight Supply-Demand Balance Continued strong global coal fundamentals High European demand and a return to coal Australia thermal coal prices settle at high levels Global steel production up 10% through August Tightening in temporary U.S. market softness Return to more
Slide 10: 30,000 MW of New U.S. Capacity Add 100+ Million Tons of Coal Use by 2010
2006 2007 2008 2009 2010 2011-2015 PRB 1.5 4.6 9.3 16.4 57.7 176.1 Illinois Basin 0.6 5.9 16.7 70.2 Central Appalachia 1.6 1.6 3.7 3.7 16.6 Lignite 11.8 14.4 24.8 Other Western 14.3 33 Pitt #8 7.9 15.3 28.5 Based on DOE NETL estimates from air permits; press releases; and Peabody analysis. 30,000 MW
Slide 11: CTL and CTG Technologies Expand Markets for Coal
CTL and CTG Technologies Expand Markets for Coal STEEL ELECTRICITY INDUSTRIAL GAS PIPELINE SNG SPECIALTY CHEMICALS ETHANOL DIESEL JET FUEL HYDROGEN China developing 27 new CTL plants Successful B-52 test flight using Fischer- Tropsch fuels Air Force sees half of Defense needs from CTL by 2020 U.S. C
Slide 12: CTL Has Potential to More Than Double U.S. Coal Demand
CTL Has Potential to More Than Double U.S. Coal Demand 2005 U.S. Coal Demand 2030 Coal Demand (EIA) 2030 Coal Demand (NCC) 2030 Coal Demand (EIA / SSEB) 1.1 billion 1.8 billion 2.4 billion 2.5 billion Source: U.S. Energy Information Agency 2030 projections include 190 million tons per year for coal-
Slide 13: Company Overview
COMPANY OVERVIEW id
Slide 14: Peabody is World Leader in Sales and Reserves
Source: Company reports and websites and SEC filings. 2005 values are on a short-ton basis. Peabody pro forma including Excel projects in development. Reserves (tons in billions) Sales (tons in millions) Peabody is World Leader in Sales and Reserves Rio Tinto Shenhua BHP Arch Anglo-American Consol F
Slide 15: Peabody: The Premier Global Coal Company
Peabody: The Premier Global Coal Company World's Largest Coal Company World's Largest Coal Reserve Base Largest Powder River Basin Producer Largest Illinois Basin Producer Best Record of Financial Performance International Trading/Brokerage Business Major Resource Management Activities Generation De
Slide 16: Peabody's Strategies Target Margin Expansion and Growth
Peabody's Strategies Target Margin Expansion and Growth Executing the basics: best-in-class safety, operations and marketing Capitalizing on organic growth opportunities Expanding in high-growth global markets Participating in new generation and Btu Conversion projects
Slide 17: Executing the Basics: Safety is the Key
Source: Peabody 2006; U.S. Department of Labor, Occupational Safety & Health Administration, 2005. Peabody 2005 2.8 Peabody 2004 4.15 Wholesale 4.5 Utilities 4.6 Leisure & Hospitality 4.7 Retail 5 Coal Mining 5.1 Education & Health Services 5.5 Agriculture/Forestry/Fishing/Hunting 6.1 Construction 6
Slide 18: Executing the Basics: Leading Productivity
Executing the Basics: Leading Productivity Rawhide Caballo North Antelope Rochelle Industry Average (Underground) Industry Average (Surface) First half 2006 data. Source: U.S. Department of Labor Mine Safety & Health Administration. Peabody Operates the Three Most Productive Mines in the World #1 #2
Slide 19: Organic Growth Pipeline from 10+ Billion Ton Reserve Base
COMPLETED UNDER CONSTRUCTION IN PERMITTING IN PLANNING 75 - 85 MTPY of Developments and Expansions by 2010 Organic Growth Pipeline from 10+ Billion Ton Reserve Base
Slide 20: Peabody Acquires Excel Coal to Expand and Serve Fastest Growing Markets
Peabody Acquires Excel Coal to Expand and Serve Fastest Growing Markets Diverse thermal and metallurgical coal products Significant growth platform from expansion projects 500 million tons of thermal and metallurgical reserves 1 billion tons of reserves 1.5 million acres of exploration rights Unmatc
Slide 21: Peabody and Excel: Growth Opportunities and Synergies
Peabody and Excel: Growth Opportunities and Synergies
Slide 22: Australia Serves Fast-Growing Global Coal Markets
Australia Serves Fast-Growing Global Coal Markets Australian metallurgical and thermal coal serves the fast-growing Asian markets Nearly one-third of the world's coal exports come from Australia U.S. Energy Information Administration projects Australian coal exports will increase 55% by 2030 1st Qtr
Slide 23: International Revenues Represent High-Growth Sector for Peabody
International Revenues Represent High-Growth Sector for Peabody 1st Qtr 2nd Qtr 93 7 2002 1st Qtr 2nd Qtr 77 23 2005 1st Qtr 2nd Qtr 65 35 2008 Pro Forma* $190 million $1,075 million $2,075 million * 2008 amounts for illustration purposes only, and assumes reference price of $50 per ton on additiona
Slide 24: BTU: Building Upon a Track Record of Performance
2001 2002 2003 2004 2005 2006 16 105.5 95 178 423 541 114 2001 2002 2003 2004 2005 2006 378 406.1 410.3 559 870 1050 100 BTU: Building Upon a Track Record of Performance 2001 2002 2003 2004 2005 2006 2577 2717 2829 3632 4664 4664 EBITDA In millions. Excludes discontinued operations and charges relat
Slide 25: BTU has an Outstanding Outlook
2003 2004 2005 2006 2007 2008 2009 2010 EBITDA 82 175 423 541 114 Revenue growth from contract backlog Expanding margins from safe, low-cost operations Major organic growth using leading reserves Global expansion Btu Conversion markets BTU has an Outstanding Outlook Excludes discontinued operations
Slide 26: Peabody Energy West Coast Investor Meetings
Peabody Energy West Coast Investor Meetings October 31 and November 1, 2006 Peabody Energy NYSE: BTU