Peabody Energy Corporation · NYSE:BTU
Peabody Energy — Non-Deal Roadshow (October 2017)
29 slides from Peabody Energy's roadshow presentation, October 2017
Slide 1: Investor Presentation October 2017
Investor Presentation October 2017
Slide 2: Statement on Forward-Looking Information
Statement on Forward-Looking Information Certain statements included in this presentation 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," "pla
Slide 3: Peabody: A Simple Yet Powerful Approach
Peabody: A Simple Yet Powerful Approach We’re the only Global Pure-Play Coal Investment, and we have significant scale… high-quality assets and people… and diversity in geography and products Our Financial Approach Return Cash to Invest Shareholders Reduce Wisely Generate 4 Debt 3 Cash 1 2 3
Slide 4: Who We Are; Where We Operate
Who We Are; Where We Operate 23 operations 5.6 billion $4.7 billion In U.S. and Australia Tons of Reserves 2016 Revenues ~7,000 25+ countries Employee-Owners Served by Peabody Globally Operations Note: Information as of the year ended Dec. 31, 2016, with the exception of headcount which is provided
Slide 5: What We Offer as a Leading Coal Producer
What We Offer as a Leading Coal Producer 200 2016 Mining Tons Sold YTD 2017 Adjusted EBITDA (in millions) by Mining Segment 180 ($ in millions) 160 U.S. Thermal 140 U.S. Met Australia PRB Asia-Pacific Met Thermal 120 $181.5 $176.5 Asia-Pacific Thermal 100 80 60 Midwestern U.S. 40 Australia $96.5 Met
Slide 6: Transformed Peabody Opens Strong in 2017
Transformed Peabody Opens Strong in 2017 First Half 2017 YOY Improvements ($ in millions) Major Recent Progress on Priorities $659 $300 million in debt repayment $2,585 Approximately $4 billion U.S. NOL position $500 million share repurchase $2,067 program authorized; $40 million buyback executed Ju
Slide 7: Mining Operations
Mining Operations Operations at Peabody’s North Antelope Rochelle Mine in Wyoming 7
Slide 8: Peabody Offers Top-Tier International Thermal Business with Substantial Margins
Peabody Offers Top-Tier International Thermal Business with Substantial Margins ● Peabody provides 13 – 14 Australian Thermal Segment Adjusted EBITDA Margins million tons of export thermal coal 40% 39% $100 Average Newcastle – Typically realizes 90 – 95% 35% Thermal Pricing $90 of Newcastle index pr
Slide 9: Australian Seaborne Metallurgical Portfolio Represents Marked Improvement
Australian Seaborne Metallurgical Portfolio Represents Marked Improvement; Further Strengthening Platform ● Substantial steps taken to Improvement in Australian Metallurgical Adjusted EBITDA Margins improve platform, including: – Improved efficiencies, lower costs 40% through owner-operator conversi
Slide 10: U.S. Mining Segment Represents Significant Scale, Stable Operating Performance
U.S. Mining Segment Represents Significant Scale, Stable Operating Performance ● Peabody leadership in PRB anchored by world’s largest coal mine – North Antelope Rochelle Mine – PRB mining complex serves ~80+ domestic customers ● Illinois Basin and Western operations benefit from transportation adva
Slide 11: Peabody PRB Strategy Focused on Margin Discipline
Peabody PRB Strategy Focused on Margin Discipline ● Operates three of four most Adjusted EBITDA Margin productive mines in U.S. of PRB Producers 30% (2014 – 1H 2017) ● Produces from more than dozen pits in PRB 25% 25% – Ability to move people, equipment and contracts 21% 20% – Cost profile can vary
Slide 12: The Peabody Way
Peabody “DNA” Interwoven from Australia: PRB, Midwest Continuous and Australian Improvement, Global Mining Heritage Midwest: Capital Discipline, Cost Control PRB: Large Scale, Innovative Process Technologies Trading and Shared Services: Support, Platform Optimization The Peabody Way 12
Slide 13: Exceptional Operations Driven by Technology, Spirit of Continuous Improvement
Exceptional Operations Driven by Technology, Spirit of Continuous Improvement Case Study: Dozer Push Dozer Push Used in ILB Leads to Strong Performance Semi-autonomous technology in use at Peabody’s Wilpinjong Mine, part of the company’s Australian constant focus on reducing Methodology Semi- costs
Slide 14: Geographic and Product Diversity Targeted to Deliver Maximum Value
Geographic and Product Diversity Targeted to Deliver Maximum Value for Shareholders Adj. EBITDA Contributions Led by 3 Different ● U.S. provides solid revenue Mining Segments in Past 4 Quarters visibility; Australia offers (dollars in millions) substantial earnings strength $140 during mid-to-high p
Slide 15: Industry Fundamentals
Industry Fundamentals Coal railed from Peabody’s El Segundo Mine in New Mexico 15
Slide 16: Strong Near-Term Seaborne Thermal and Metallurgical Coal Demand Led by China
Strong Near-Term Seaborne Thermal and Metallurgical Coal Demand Led by China ● Chinese thermal demand rises 13 million tonnes through July 2017; met imports increase 10 million tonnes – Record China electricity generation and steel consumption in 1H 2017 ● Policy initiatives in place to support Chin
Slide 17: ASEAN Countries Expected to Drive Longer-Term Thermal Coal Demand Growth
ASEAN Countries Expected to Drive Longer-Term Thermal Coal Demand Growth ● More than 50 gigawatts of new Expected Seaborne Thermal Demand Growth from 2016 – 2019 coal-fueled generation expected (tonnes in millions) to be built on average each year 20 – Majority of new plants are 15 – 20 supercritica
Slide 18: Seaborne Metallurgical Coal at Fragile Supply-Demand Balance
Seaborne Metallurgical Coal at Fragile Supply-Demand Balance at ~300 Million Tons ● Even modest supply/demand Spot HCC Pricing (dollars per tonne) swings can have outsized impact on pricing China Increases Cyclone Debbie $350 Impacts (10 – 15 Import Demand ● Supply disruptions (+12MT) MT of supply)
Slide 19: Coal Replaces Natural Gas as Top Fuel Source for U.S. Electricity Generation
Coal Replaces Natural Gas as Top Fuel Source for U.S. Electricity Generation in First Half 2017 ● Coal generation up 1% through Fuel Generation Change YTD 2017 August 15% – Total load down 2% 10% – Natural gas down 13% 10% Total Coal ● PRB demand up ~20 million 5% tons through August PRB 1% – PRB Ju
Slide 20: U.S. Coal Demand Likely to Modestly Decline in Coming Years
U.S. Coal Demand Likely to Modestly Decline in Coming Years Depending on Natural Gas, Regulations ● ~10 GW of plant retirements U.S. Policy Changes expected per year ● Pro-growth, tax and regulatory – Retirements to impact initiatives at macro level all coal producing regions – Impact on coal demand
Slide 21: Financial Approach
Financial Approach 21
Slide 22: Strengthening Capital Structure to Allow for Flexibility and Sustainability Through Cycles
Strengthening Capital Structure to Allow for Flexibility and Sustainability Through Cycles ● Moderate debt levels and staggered Debt and Liquidity Balances debt maturities Pro Forma Cash & Cash Equivalents $796 million – Net debt of ~$944 million Available Capacity under ARS $79 million ● 135.0 mill
Slide 23: Financial Approach: Generate Cash, Reduce Debt, Invest Wisely, Return Cash to Shareholders
Financial Approach: Generate Cash, Reduce Debt, Invest Wisely, Return Cash to Shareholders Liquidity Debt Deleveraging Capital Returns • Targeting • Committed • Voluntarily • $500 million $800 million to sustainable repaying $300 share buyback • Current liquidity capital structure million in 3Q 2017
Slide 24: Committed to Sustainable Mining, Energy Access and Clean Coal Technologies
Committed to Sustainable Mining, Energy Access and Clean Coal Technologies • Operate safely Sustainable • Maximize resource recovery • Seek ongoing improvement Mining in environmental performance • Commit to land restoration • Work to achieve universal Energy electricity access; affordability and re
Slide 25: Substantial Recent Steps to Drive Value Creation
Substantial Recent Steps to Drive Value Creation Announced Majority Sale of Operational Repay Inactive Burton Mine Financial Preferred Shares $150 Listed on NYSE MKT Million Repurchase Industry of Debt $40 Million Coal Overtakes In Shares Gas as #1 U.S. Generation Fuel SEPT Substantial U.S. Regulato
Slide 26: Appendix
APPENDIX 26
Slide 27: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures 2017 2016 2017 2016 Successor Predecessor Predecessor Successor Predecessor Predecessor January 1 April 2 through Quarter Ended April 2 through through April Six Months June 30 April 1 June 30 June 30 1 Ended June 30 (In Millions) Tons Sold Powder River
Slide 28: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measures 2017 2016 2017 2016 Successor Predecessor Predecessor Successor Predecessor Predecessor January 1 April 2 through Quarter Ended April 2 through through April Six Months June 30 April 1 June 30 June 30 1 Ended June 30 (In Millions) Reconciliation of Non-G
Slide 29: Reconciliation of Non-GAAP Measures (Cont'd)
Reconciliation of Non-GAAP Measures (Cont’d) Predecessor Year Ended December 31, 2016 2015 2014 2013 2012 Tons Sold (In Millions) Powder River Basin Mining Operations 113.1 138.8 142.6 135.2 140.3 (1) Adjusted EBITDA is a non-GAAP measure Midwestern U.S. Mining Operations 18.3 21.2 25.0 26.3 27.4 We