Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Morgan Stanley Global Basic Materials Conference 2010
25 slides from Peabody Energy's conference presentation, Feb 25, 2010
Slide 1: Morgan Stanley Global Basic Materials Conference
Morgan Stanley Global Basic Materials Conference February 25, 2010 Mike Crews Chief Financial Officer 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: 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: 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, Energy Information Administration Annual Energy Outlook and Peabody analysis. Global Coal Demand Global Coal Use Estimated
Slide 7: 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 90.75 94.11 99.71 Newcastle Thermal Coal Source: Third party data. Pricing as of February 18, 2010. High Quality Hard Coking Coal Per Tonne Pacific Met and Thermal Coal Prices on Pace f
Slide 8: 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; 2010 off to a strong start Structurally short of met coal Sec
Slide 9: 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 2009 China Met Imports Soar... And China Met Demand Dwarfs U.S 2008 2009 Mongolia 3.6 4
Slide 10: India Likely to be World's Fastest Growing Coal Importer
10 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 Likely to be World's Fastest Growing Coal Importer Data and estimates based on industry reports and Peabody analysis. 2009 coal
Slide 11: 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 Data and estimates based on Platts Worldwide Power Plant Database and Peabody analysis. 80+% of New 2010 Coal Plants in China, India and Other Asia 2010 New Coal-Fueled G
Slide 12: 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 nearly 75% of total demand increases India to dominate growth in global coal imports Indi
Slide 13: 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 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
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 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: 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 19: Peabody Well-Positioned in Fastest Growing U.S. Markets
Peabody Well-Positioned in Fastest Growing U.S. Markets
Slide 20: 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 21: 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 more than 80% of U.S. demand growth through 2014 Fully committed/priced in U.S. for 2010 185 - 195 million tons of expected production Patient in 2011 contracting Major leverage t
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 35 35 35 35 35 20 20 20 20 20 5 5 5 5 5 2009 vs. 2010 Expe
Slide 23: During Early Recovery, PRB Prices Rise Fastest
Prompt Month 2010 2011 2012 10.59 11.4 12.98 14.04 During Early Recovery, PRB Prices Rise Fastest Data and estimates based on third party data and Peabody analysis. Pricing as of February 18, 2010. PRB 8800 Price Per Ton $10 $14 Prompt PRB prices have risen 60% since Oct. 1, 2009, while CAPP prices
Slide 24: 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 Bargain P/E ratio given growth potential
Slide 25: For Further Information
For Further Information: Vic Svec Senior Vice President Investor Relations and Corporate Communications 1.314.342.7768 Christina Morrow Vice President Investor Relations 1.314.342.7651
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