Peabody Energy Corporation · NYSE:BTU
Peabody Energy — J.P. Morgan Global High Yield & Leveraged Finance Conference 2014
26 slides from Peabody Energy's conference presentation, Feb 24, 2014
Slide 1: Life Empowered – J.P. Morgan Global High Yield & Leveraged Finance Conference
Life Empowered J.P. Morgan Global HighYield & Leveraged Finance Conference February 24, 2014 Peabody Energy
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Peabody Energy Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. The company uses words such as “anticipate,” “believe,” “expect,” “may,” “forecast,” “project,” “should,” “estimate
Slide 3: Peabody Well Positioned with Significant Upside
Peabody Well Positioned with Significant Upside Peabody Energy Leveraging significant cost reductions, capital discipline and operational excellence Leading presence in high-growth Pacific Rim region and low-cost U.S. basins Positioned to benefit from rising SPRB and ILB coal demand Seaborne market
Slide 4: BTU Delivers Notable 2013 Accomplishments
BTU Delivers Notable 2013 Accomplishments Peabody Energy Achieved safest incidence rate in company history Cost containment efforts led to $340 million in savings Lowered capital expenditures by 67% Refinanced credit facility extended maturities and increased financial flexibility Generated $700+ mi
Slide 5: Global Coal Markets
Global Coal Markets ~
Slide 6: Annual World Coal Use Expected to Grow Over Next Three Years
Annual World Coal Use Expected to Grow 700 Million Tonnes Over Next Three Years Peabody Energy Expected Global Coal Demand (Tonnes in Millions) 0 1,500 3,000 4,500 6,000 7,500 9,000 ROW China India 2013E 2,925 4,130 780 7,835 2014P 2,950 4,295 810 8,055 2016P 3,075 4,570 890 8,535 Record global coal
Slide 7: Metallurgical Coal Fundamentals Projected to Improve in 2014
Metallurgical Coal Fundamentals Projected to Improve in 2014 Peabody Energy Rising Global Steel Demand from Industrialization and Urbanization China becomes largest metallurgical coal importer; rising costs, declining domestic quality support additional imports Demand growth expected to exceed suppl
Slide 8: New Generation Expected to Drive Significant Global Thermal Coal Demand
New Generation Expected to Drive Significant Global Thermal Coal Demand Peabody Energy Projected Seaborne Thermal Coal Demand (Tonnes in Millions) 2013E 2014P 2016P Atlantic Other Pacific China India 0 200 400 600 800 1,000 1,200 -20 +55 +40 +40 955 985 - 995 1,070 Expected new coal-fueled generatio
Slide 9: China, India Account for Nearly 80% of Projected Global Coal Demand Growth
China, India Account for Nearly 80% of Projected Global Coal Demand Growth Peabody Energy China and India Coal Imports (Tonnes in Millions) India China 0 100 200 300 400 2013E 2014P 2016P 168 185 220 327 345 380 Record coal imports in 2013 ~325 million tonnes in China ~170 million tonnes in India Ch
Slide 10: China Expected to Follow U.S. Path of Greater Coal Use, Decreasing Emissions
China Expected to Follow U.S. Path of Greater Coal Use, Decreasing Emissions Peabody Energy U.S. Emissions Decline 87% Since 1970 as Coal Use Nearly Triples 1970 1980 1990 2000 2011 -100% -50% 0% 50% 100% 150% Coal-Based Power Generation +170% GDP per Capita +103% Regulated Emissions/MWh from Coal -
Slide 11: SPRB and ILB Markets Improving as Coal Demand Continues to Rise in 2014
SPRB and ILB Markets Improving as Coal Demand Continues to Rise in 2014 Peabody Energy SPRB Utility Stockpiles (Days Use) Inventories ~50% below 2012 peak levels May 2012 Aug. 2012 Nov. 2012 Feb. 2013 May 2013 Aug. 2013 Nov. 2013 Feb. 2014 0 10 20 30 40 50 60 70 80 90 SPRB stockpiles at 47 days use
Slide 12: SPRB and Illinois Basin: Million Ton Demand Increase Forecasted by 2016
SPRB and Illinois Basin: 100 Million Ton Demand Increase Forecasted by 2016 Peabody Energy Expected SPRB and ILB Generation Demand (Tons in Millions) 0 125 250 375 500 625 515 -60 +100 +60 615 SPRB and ILB +100 2013 Retirements Utilization Switching 2016P SPRB and ILB best positioned against natural
Slide 13: Coal: The World's Fastest Growing Major Fuel
Coal: The World’s Fastest Growing Major Fuel Peabody Energy Expected Electricity Growth (2011 - 2035) Coal Natural Gas Nuclear Hydro Other Coal projected to account for largest percentage of global electricity generation growth Coal grew dramatically faster than all other major fuels in past decade
Slide 14: Peabody Energy Outlook
Peabody Energy Outlook
Slide 15: Peabody Positioned for Success in 2014
Peabody Positioned for Success in 2014 Peabody Energy 2014 Focus Areas Drive strong operational performance Target additional cost improvements Manage tight capital spending Explore sale of non-strategic assets Position company for growth as markets improve Advance major new global advocacy initiati
Slide 16: Peabody's Diverse Platform
Peabody’s Diverse Platform Peabody Energy 2013 Revenue by Product Western U.S. Thermal Australian Met Australian Thermal Trading & Brokerage / Other Midwest U.S. Thermal Diverse operations provides stable base of contributions Major presence in attractive regions: Australia, PRB and Illinois Basin P
Slide 17: Australian Platform Targets Growing Asia Demand
Australian Platform Targets Growing Asia Demand Peabody Energy Targeted Australia Volumes (Tons in Millions) 0 10 20 30 40 Domestic Thermal Seaborne Thermal Metallurgical 2005 2 6 8 2011 6 10 9 25 2013 8 11 16 35 2014P ~8 11 - 12 16 - 17 35 - 37 90% of production from operations with recent expansio
Slide 18: Peabody's 2013 Australian Productivity Increased 27%
Peabody’s 2013 Australian Productivity Increased 27% Peabody Energy Australian Productivity (Units Moved per Shift) 2012 2013 +27% 2013 Australian unit costs 4% below prior-year levels on increased productivity Achieving success with multiple initiatives: Streamlining workforce Improved mining metho
Slide 19: Realize Full Value of Owner-Operator Conversions in 2014
Realize Full Value of Owner-Operator Conversions in 2014 Peabody Energy Owner-Operator Volumes Increasing to Over 90% in Australia Eliminated Contractor Margins Robust Mine Planning Better Workforce Alignment Right-Sized Equipment Improved operating efficiency drives cost reduction 2013 unit costs r
Slide 20: U.S. Platform Well Positioned in Current Market
U.S. Platform Well Positioned in Current Market Peabody Energy Peabody’s position in PRB and Illinois Basin creates opportunity in improving market Targeting 185 - 195 million tons of production in 2014 2014 revenue per ton expected to be 5 - 8% below 2013 levels on greater PRB mix and Midwest contr
Slide 21: U.S. Cost Containment Initiatives Taking Hold
U.S. Cost Containment Initiatives Taking Hold Peabody Energy Delivered significant cost and productivity improvements in 2013 U.S. unit costs 3% below prior year levels as productivity improves 9% Shifting volumes to more productive operations NARM in PRB Gateway and Bear Run in Midwest El Segundo i
Slide 22: Maintaining Financial Strength Through Capital Discipline and Debt Repayment
Maintaining Financial Strength Through Capital Discipline and Debt Repayment Peabody Energy Capital Discipline Capex reduced 67% in 2013; 2014 capex targeted at $275 - $325 million Sustaining capital trending below historical range of $1.25 - $1.75/ton Previous investments enable low sustaining cape
Slide 23: No Significant Debt Maturities Until 2016 under New Credit Facility
No Significant Debt Maturities Until 2016 under New Credit Facility Peabody Energy Refinancing Extends Revolver and Term Loan Maturities Millions $ $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2066 7.375% Securitization 6.000% Revolver 6
Slide 24: Peabody Strategy and Operating Success Drive Value in All Market Conditions
Peabody Strategy and Operating Success Drive Value in All Market Conditions Peabody Energy Uniquely positioned with leading presence in growing Asia markets and low-cost U.S. basins Aggressively controlling costs and capital discipline across the platform Solid operating cash flows, low maintenance
Slide 25: Peabody Energy – www.PeabodyEnergy.com
Peabody Energy www.PeabodyEnergy.com Life Empowered
Slide 26: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures Peabody Energy Reconciliation of Non-GAAP Financial Measures (Unaudited) (Dollars in millions, except per share data) Quarter Ended Mar. 31, 2014 Low (1) High (1) Year Ended Dec. 31, 2013 (2) 2012 (2) Adjusted EBITDA (3) $170.0 $230.0 $1,047.2 $1,836.5 D
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