macarthur investor presentation draft 13a

8/3/2019 Macarthur Investor Presentation Draft 13a

1/18

Investor Presentation

October 25, 2011

Acquisition


2/18


3/18

Topics

Transaction Overview

Growing Market for Metallurgical and PCI Coal

Macarthur Production and Growth Profile Peabodys New Australia Platform

Next Steps

3


4/18

Overview of Acquisitionof Macarthur Coal ASX: MCC

Transaction Description Purchase of up to 100% of the shares of Macarthur Coal

Transaction Structure Takeover under Australian securities law

Equity Purchase Price A$16.00 per share x 302 million shares = A$4.8 billion; US$5.0 billion. = . .

Peabody Share Up to 100% (ArcelorMittal intends to sell 40% interest)

Financing Cash and debt

StatusControl achieved; Offer now declared unconditionalOffer period open to Nov. 11, 2011

Sales.

Guidance of 5.5 5.8 Mt in FY 2012 (ending June 30)

Growth PlatformExpanding mines and new growth projectsReserves of 286 MT on 100% basis 184 MT attributable basisResources of 2.6 BT on 100% basis (1.9 BT attributable basis)

4

US$ conversion assumes currency exchange of 1.04 AUD:USD; Tons shown in short tons, unless otherwise noted; Reserves and resourcesbased on Macarthur June 30, 2011 reporting using JORC basis; FY refers to fiscal year ended June 30; Ownership references and other dataabout the acquisition is as of October 25, 2011.


5/18

Acquisition Adds Benchmark PCI SupplyAnd Si nificant Growth Pro ects

Creates synergies

with existing base

Increases access tohighest growth regions

growth opportunities

x en s resource ase

for future development Expected to be

earnings accretive

within a year5


6/18

Transaction Valued on Major GrowthProfile and Lar e Resource Base

Price Competitive With Comparable Australian TransactionsPrice Competitive With Comparable Australian Transactions

EV / EBITDAEnterprise Value perResource Ton

1 year forward 2 years forward

3.00

10.5x

12.6x

9.1x 9.2x10.0

12.0

.

US$2.44/tUS$2.40/t

2.50

6.0

8.0

V/EBITDA(x)

1.50

.

US$/ton

2.0

4.0E

0.50

.

0.0

MacarthurAcquisition

AverageTransaction

Multiple

MacarthurAcquisition

AverageTransaction

Multiple

.

Macarthur Acquisition atA$16/Share

Average AustralianTransaction Multiple

6

US$ conversion assumes currency exchange of 1.04 AUD:USD; Based on Australian market precedent transactions since 2008 involving coal assets inproduction or ramp up stage and for which consensus estimates are available; Based on consensus estimates of forward EBITDA at the time the transactionswere announced (IBES estimates); If 90% acceptance, price moves to $16.25/share.


7/18

The Market: Met Coal Use Expectedto Rise >500 Million Tonnes b 2020

Global MetCoal Demand(Tonnes in Millions)

Growth CAGR

2010 920

2015 1,185 ~30% ~5%

2020 1,440 ~60% ~5%

Global PCI Market AlsoGlobal PCI Market Also

Growing at 5% CAGRGrowing at 5% CAGR

7Source: Peabody Global Energy Analytics.


8/18

PCI in Growing Demandfrom Global Steel Producers

PCI OverviewPCI Overview

(PCI) a replacement for

coke made from coking coal Steelmakers trying to

expand PCI use to

re uce costs Majority of high quality,

-Australia

-at 70% to 80% ofHQ Hard Coking Coal

8

Q4 settlement at $208/tonneSource: Macarthur Coal


9/18

Macarthur: Active Production Base WithMa or Growth Pi eline

Producing Mines

(million short tons) Resources Reserves Production

Abbot Point100% Attributable 100% Attributable FY 2011

Coppabella 214 157 65 48 2.3

Moorvale 126 93 47 34 1.9

BurtonNorth Goonyella

Dalrymple Bay

Coppabella

EaglefieldMoorvaleCodrilla

Resources Reserves Production

100% Attributable 100% Attributable FY 2011

-enn um

Gladstone

Vermont East

MiddlemountOlive Downs

Development Projects

Codrilla 88 64 55 40 -

WigginsIsland

100% Attributable 100% Attributable FY 2011

Vermont East /Wilunga

541 466 TBD TBD -

BTU Met Coal MinePort

ve owns ort -

Olive Downs South 300 270 TBD TBD -

Exploration / Concept Projects

9Macarthur data based on June 30, 2011 public filings; Resources and reserves shown on a JORC basis and converted to short tons.

MCC MineMCC Development

o en a exp ora on pro ec s prov e a ona resources o more an on ons(100% basis) or 720 million tons (attributable basis).


10/18

Mines Produce LeadingSeaborne Low-Vol PCI Su l

Coppabella open-cut

low-vol PCI product

Produced 2.3 million tons; . m on ons

FY 2010

Moorvale o en-cut mine

Produced 1.9 million tonsin FY 2011; 2.6 million

MCC targets

Middlemount saleabletons of 0.8 to 0.9 milliontons in FY 2012

Macarthur Targeting Fiscal Year 2012 Sales of 5.5Macarthur Targeting Fiscal Year 2012 Sales of 5.5 5.8 Million Tons5.8 Million Tons

Information based on Macarthur June 30, 2011 public filings and production guidance for the fiscal year ended June 30, 2012; ultimate productionand timing subject to future investments and other factors; Volumes converted to short tons.

10


11/18

Macarthur Expands PeabodysAustralian Reserve Base

4,000

Combined Entity has 40+ Year Reserve Life at Current ProductionCombined Entity has 40+ Year Reserve Life at Current Production

3,435

3,000

Australian Reserves

,

2,000

sinMillions

1,370

1,185 1,005

666 600492 440

1,000

To

18596 82

0

P/BM

A

stra

ta

stralia

stralia

oTinto

erican

Hope

armers

haven

ources

arthur

Va

le

cester

BH

formaBTUA

BTUA R

i

AngloA N

e

Wesf

Whit

AstonRes

Ma

Glo

P

r

Note: Pro forma BTU reserves include Peabody and attributable reserves for Macarthur based on ownership percentages; Reserves are in millions ofshort tons and are based on most recent public filings; Peabody reserves presented on SEC basis; peer companies presented on JORC basis. 11


12/18

Transaction Significantly StrengthensPeabod s Position in Australia

5760

Australia Production

Peabody Australia53

45 - 50

45

Thermal

Met

proforma 2010

production of 32 ns34

32 32

2730

million tons withMacarthur

TonsinMillio

15

65 4 4 3

15 Proforma productionof 45 50 million

0

Xstrata

HP/BMA

US2015

RioT

into

mer

ican

US2010

Aust

ralia

sfarm

ers

ewH

ope

acarthur

Vale

itehaven

louce

ster

tons y -

given combined

roformaBTU

Anglo

roformaBTU

BTU W W

G

P P

Note: Pro forma 2010 BTU production combines Peabody and calendarized Macarthur production; Proforma 2015 production based on currentPeabody growth targets and Macarthurs growth plans at time of acquisition; ultimate production and timing subject to future investments and otherfactors; Production shown in millions of short tons. 12


13/18

Macarthurs Production Base Expected toGrow to 10 Million Tons b FY 2014

Peabody/MacarthurPeabody/Macarthur ProformaProforma Met Volumes: 22Met Volumes: 22 25 MTPY* by 201425 MTPY* by 2014--20152015

13Information based on Macarthur plans at time of acquisition; ultimate production and timing subject to future investments and other factors.*MTPY represents million short tons per year, calculated using Macarthurs 10 million short ton target and Peabodys 12 to 15 million short ton target.

Source: Macarthur Coal FY11 Annual Report; Volumes in Metric Tons


14/18

Macarthur: Significant PlannedPi eline of Growth

Information based on Macarthur public filings and production guidance; ultimate production and timing subject to future investments and other factors.

Source: Macarthur Coal FY11 Results Presentation

14


15/18

Fully Financed With Cash and Debt;Debt Levels Ver Mana eable

PeabodysPeabodysDebtDebt--toto--Capital Ratio (%)Capital Ratio (%)

57

52

60Target Zone: 40 - 60

from cash and

additional debtExpected

Leverage:

4750

Funded leverage

Mid 50% Range

3740

debt-to-cap ranges

30

202006* 2007 2008 2009 2010 9/2011 Post-MCC

Haul truck at Wild Boar Mine, Indiana 15Debt-to-cap calculations above assume 100% ownership in Macarthur (ultimate funding levels and debt-to-cap percentage dependentupon ownership percentage achieved). *2006 ratio reflects proforma June 30, 2006 data used at the time of the Excel Coal acquisition.

Sufficient Cash and Debt to Fund Macarthur TransactionSufficient Cash and Debt to Fund Macarthur Transaction


16/18

Macarthur Acquisition:Next Ste s

Complete acquisition and implement transition plan

Achieve synergies

Operational performance Supply chain efficiencies

Marketing/blending potential

Improve mining plan andequipment efficiency at

coming months vance grow pro ec s o

build production pipeline

16


17/18

Acquisition Delivers Value Via IncreasedGlobal Access, Earnin s Ex ansion

Macarthur acquisition expands Peabodys presencewith quality met product in high-growth region

Provides major growth opportunities, large reservebase and significant potential synergies

Continues global

buildout andearningscon r u on rom

international

17


18/18

Ac uisition

macarthur investor presentation draft 13a

Documents