2012 Peabody Energy Analyst And Investor Forum Focuses On Global Markets, Peabody Positioning And Value Creation

NEW YORK, June 27, 2012 /PRNewswire/ -- Peabody Energy (NYSE: BTU) Chairman and Chief Executive Officer Gregory H. Boyce today said that the company is well positioned to navigate market challenges, capture opportunities and create value for shareholders in both the near term and long term.  The discussion came at Peabody's 2012 Analyst and Investor Forum in New York, where executives reviewed the company's strategic positioning, global initiatives and key focus areas against the market backdrop.

"We have multiple opportunities in coming years across all key levers of value creation: production growth, price upside, cost containment and valuation expansion," said Boyce.  "There are bright spots amid recent market headwinds, including the recent increase in quarterly seaborne metallurgical coal prices, accelerating China coal imports and signs of stabilizing U.S. coal supply-demand fundamentals. Longer term, rising electricity generation and steel production required to fuel growing economies of the Asia-Pacific region will continue to drive sustained increases in global coal demand." 

INVESTMENTS AND CASH DEPLOYMENT

"Peabody's superior gross margins and strong cash flows allow us to continue to invest in growth projects while also strengthening the balance sheet," said Boyce.  "Being cognizant of macro concerns, however, we are further reducing our capital expenditures and extending the timing of selected mine projects.  During the second quarter, we also took the opportunity to opportunistically repurchase more than $240 million of bonds and repurchased $100 million of Peabody shares."

The company now targets 2012 capex of $1.0 to $1.2 billion, down $200 million from targets set at the beginning of the year. 

Boyce said that the company was completing a number of late-stage projects in Australia while re-evaluating the timing of select emerging projects.  The company is completing the Millennium Mine expansion and is beginning to mine first coal at the Burton extension.  At North Goonyella Mine, the implementation of Longwall Top Coal Caving technology is on target to begin adding expanded volumes in late 2013.  The Metropolitan Mine modernization is on schedule but the completion of the expansion is now targeted for 2014 to 2015 to enable higher volumes than earlier projected.  The company is planning on undertaking additional evaluation before commencing development on the Wambo Open-Cut expansion and Codrilla Mine, with startup timing to be determined.

With the modified timeframes, Peabody now targets Australian coal production of 45 million to 50 million tons by 2015 to 2017, up from 25 million tons in 2011.

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