Citi Basic

Materials
Conference
December 2, 2010

Vic Svec
Senior Vice President
Investor Relations and
Corporate Communications
1
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 provided by those sections.

Our forward-looking statements are based on numerous assumptions that the company believes are reasonable, but they are
open to a wide range of uncertainties and business risks that may cause actual results to differ materially from expectations as of
Oct. 19, 2010. These factors are difficult to accurately predict and may be beyond the company’s control. The company does n ot
undertake to update its forward-looking statements. Factors that could affect the company’s results include, but are not limited to:
demand for coal in United States and international power generation and steel production markets; price volatility and demand ,
particularly in higher-margin products and in our trading and brokerage businesses; reductions and/or deferrals of purchases by
major customers and ability to renew sales contracts; credit and performance risks associated with customers, suppliers, trading,
banks and other financial counterparties; geologic, equipment, permitting and operational risks related to mining; transporta tion
availability, performance and costs; availability, timing of delivery and costs of key supplies, capital equipment or commodities
such as diesel fuel, steel, explosives and tires; impact of weather on demand, production and transportation; successful
implementation of business strategies, including our Btu Conversion and generation development initiatives; negotiation of labor
contracts, employee relations and workforce availability; changes in postretirement benefit and pension obligations and fundi ng
requirements; replacement and development of coal reserves; access to capital and credit markets and availability and costs o f
credit, margin capacity, surety bonds, letters of credit, and insurance; effects of changes in interest rates and currency exchange
rates (primarily the Australian dollar); effects of acquisitions or divestitures; economic strength and political stability of countries in
which we have operations or serve customers; legislation, regulations and court decisions or other government actions, includ ing
new environmental requirements, changes in income tax regulations or other regulatory taxes; litigation, including claims not yet
asserted; and other risks detailed in the company’s reports filed with the Securities and Exchange Commission (SEC). The use of
“Peabody,” “the company,” and “our” relate to Peabody, its subsidiaries and majority-owned affiliates.

EBITDA or Adjusted EBITDA is defined as income from continuing operations before deducting net interest expense, income
taxes, asset retirement obligation expense, and depreciation, depletion and amortization. EBITDA, which is not calculated
identically by all companies, is not a substitute for operating income, net income or cash flow as determined in accordance w ith
United States generally accepted accounting principles. Management uses EBITDA as a key measure of operating performance
and also believes it is a useful indicator of the company’s ability to meet debt service and capital expenditure requirements.

10/19/10 2
Peabody Energy: Catalysts for Growth

U.S.
● Largest producer in lowest cost, highest growth regions
● Expanding margins via strong contracting, stable costs
● Extending PRB reach into Eastern U.S. and Asia
Australia
● Expanding platform via organic growth
Asia
● Advancing projects in China, Mongolia, India
and Indonesia
Global Trading & Brokerage
● Expanding platform via new offices

3
Delivering Superior Results

Peabody’s Margins Outperform U.S. Peers

YTD Gross Margins Peabody vs. U.S. Peers

35%

30%
30%

26%
25%
25% 24%

19%
20%

15%
13%

10%

6%
5%

0%
BTU Global A B C D E F
Source: Gross margin data obtained from publicly filed documents for the period ending Sept. 30, 2010. 4
Early Stages of
Coal’s Supercycle
Major New Global Build Out of
Coal Generation Under Way
Generation Demand Driven by Asia and Growing Share of Electricity

Projected New Coal-Fueled

● Global generation
Generating Capacity (GW)
800
expected to grow by
400 GW by 2015
600 ● 270 MTPA coal growth
just in new plants
400
ROW
starting up in 2010
India ● Additional 1+ billion
200
China
tonnes of new demand
anticipated by 2015
0
2010 2011-2015 2015-2035
Source: Platts Worldwide Power Plant Database; EIA International Energy Outlook 2010 and Peabody analysis. Growth of global coal-based generation
(billion kilowatt hours) based on 2007 – 2035 EIA data. 6
Global Met Coal Use Forecast to Rise
400 Million Tonnes by 2015

Expected Global Steel Production

● Global steel production And Met Coal Demand
2,400
expected to rise nearly India
1,600

MetMet
two-thirds by 2020

Tonnes)
2,000

Tonnes)

Coal
India
● Bulk of market

Coal
(Million

Demand
1,600 1,200
China China

Production (Million
share growth in China

Demand(Million
and India

SteelProduction
1,200

(MillionTonnes)
800

● Trend highlights 800

Tonnes)
structural shortage of Steel Other
ROW 400

premium coking coal 400

EU/US

0 0
2010 2015 2020

Source: World Steel Association; third party data and Peabody analysis. 7
Developing Asia Represents 90% of
Long-Term Global Coal Demand
China and India Lead Long-Term Coal Demand Growth

+110

+150 +2,210

+690 +380

+50

U.S. growth presented in short tons.

Source: World Energy Outlook 2009, International Energy Agency; Annual Energy Outlook Forecasts, Energy Information Administration; Peabody analysis. 8
Near- and Mid-Term
Pacific Markets
Outstanding for Coal
Seaborne Thermal Coal Market Short Next
Five Years; Implies Strong Pricing Driver

Expected Increase in Expected Increase in

Seaborne Thermal Demand Seaborne Thermal Supply
2010 – 2015 2010 – 2015
200 200
50-75
Million
Tonne
Shortfall
160 India 160
125%-175%
Other

Tonnes in Millions
Tonnes in Millions

Colombia
120 120
S. Africa
China Russia
5%-25%
Indonesia
80 Other 80 15%-25%
Pacific
~20%

40 40
Australia
Atlantic 30%-60%
~25%
0 0

2010 2015 2010 2015

Source: Peabody analysis. 10

Seaborne Met Coal Market
Fundamentally Short
Expected Increase in Expected Increase in
Seaborne Met Demand Seaborne Met Supply
2010 – 2015 2010 – 2015
55-65 30-40
Other
Japan
South Korea
Russia 0-5
Europe
Other ~10
Pacific
China
Mongolia
~10

India

Australia 30-40
Brazil

Atlantic (20-25)

Tonnes in millions.
Source: Peabody analysis. 11
China Dependent on Imports to
Balance Supply / Demand
Shortfall Driving Net Imports Reliance

● Dramatic, sustained
demand growth
● Consolidation, rising
domestic costs
● Lack of premier coking coal
● Supply growth distant
from load
● Growing coastal steel mills
and power plants
● ~600 MTPA of coastal coal
movements already occurring
12
The Result: Ongoing Reliance
on Coal Imports by China

China Net Coal Imports

2011 Est. ?
Nov.-
Jan. – Oct. Dec. 135 – 140
Nov.-
2009 Jan. – Oct. Dec.

2007

2005

2003

-100 -50 0 50 100 150 200

Tonnes in Millions
Data based on industry reports; 2010 reflects Jan. – Oct. reported and Nov. – Dec. Peabody estimate. 13
India Likely to be World’s
Fastest Growing Coal Importer
Imports Projected to Exceed 200 Million Tonnes in Several Years

Projected India Coal Imports

300

● Imports projected to
250
grow ~200 MTPA in
5 years
Tonnes in Millions

200
● Generation growing
150 6% – 8% per year
100
Thermal ● 75 GW of new coal-
Forecast

based generation
50 under construction
Met
0
2009 2010 2011 2012 2013 2014 2015
Data and estimates based on industry reports and Peabody analysis. Units under construction have projected start dates of 2011 – 2015. 14
Expanding Australia Platform:
Targeting Sales Up to 40 MTPA by 2014
Unpriced Met Volumes: >95% in 2011; 100% in 2012
Unpriced Seaborne Thermal Volumes: ~65% in 2011; ~85% in 2012

Seaborne Thermal Coal Met Coal

20
Sales Estimates 20 Sales Estimates

Up to
42% Up to
15 15 45%
Tons in Millions

10 10
15.0 – 12.0 –
17.0 15.0
11.5 – 9.5 –
12.5 10.0
5 9.6 5 6.9

0 0
2009 2010 2014-15 2009 2010 2014-15
2009 values are ‘as reported’ actuals. 15
Significant Progress in Peabody’s
Australia Project Pipeline
Sufficient Rail/Port Access to Accommodate Growth
Metropolitan
1 MT HCC, $70 million

Burton
2 – 3 MT HCC
Met

Millennium
2 – 3 MT SHCC/PCI

Denham/Goonyella Corridor
5 – 6 MT HQHCC
Seaborne

Wilpinjong
Thermal

2 – 3 MT, $90 million

Wambo
3 – 4 MT Thermal/PCI

2011 2012 2013 2014 2015

Under Construction In Development
Short tons in millions. Dollars represent projected capital expenditures. 16
Leading Trading Operations
Add Significant Value

Trading & Brokerage EBITDA

● Growing, profitable
$250

Singapore
global trading and
Jakarta brokerage operations
$200
● Continued expansion
EBITDA in Millions

with new offices

$150 Non-
London U.S. ● Best use of financial
Beijing
$100 products and physical
asset base
St. Louis
$50 Newcastle ● Pipeline of market
intelligence
U.S.
$0
2003 2004 2005 2006 2007 2008 2009
17
Peabody Advancing Robust
China Project Pipeline
20 MTPA 30 MTPA 15 MTPA Open- 12 MTPA
Open-Cut Open-Cut JV Cut JV Fueling Open-Cut
JV Project Project Clean Coal JV Fueling
Project Coal-to-
Chemicals
Project
Xinjiang
6% Equity
15 MTPA Inner Mongolia Beijing Partner
Open-Cut Tianjin GreenGen
JV Project Clean Coal
Project

15 MTPA
Shanghai
Open-Cut
JV Project
Zhejiang
20 MTPA
Open-Cut
Legend JV Project Fujian

Closed deal
Guangdong Taiwan
Hong Kong
Near-term Initiative 15 MTPA
Open-Cut JV
Mid-term Initiative
Project
Long-term Initiative

18
Peabody Positioning to Serve
Fastest Growing Import Nation
Major Coastal Plant Build Out
to Access Import Coal
Peabody Positioning
● Met coal from
Australia operations
● Thermal coal via
COALTRADE
● Exploring long-term
coal supplies and
other strategic
ventures with
Coal India

Source: Platts. 19
Peabody Best Positioned in
Fastest Growing U.S. Regions
U.S. Coal Demand On Pace for
60 – 80 Million Ton Recovery in 2010

2009 vs. 2010 2010 Highlights

Expected Demand ● Demand up on weather-
Other driven power generation
U.S. ● Coal production down
Exports ~10 million tons YTD
60 – 80
1,100 Million Gas Back
to Coal
Tons 2011 Drivers
Tons in Millions

Electricity
Generation
● New coal generation
● Additional economic
activity
1,050
● Improving industrial load
● Further coal-to-gas
reversal
● Result: Stockpile levels
1,000 expected to fall
2009 2010
Source: Energy Information Administration; MSHA; National Mining Association and other third-party sources. 21
U.S. Contracting Strategy Matches
Shape of Economic Recovery

U.S. Contracting Strategy

● Guarded approach
near term
– ~90% priced for 2011
● Significant leverage to
market upside long term
– 2012: 35% to 45%
available to price
– 2013: ~85% available
to price

22
SPRB and Illinois Basin: Majority
of U.S. Coal Demand Growth

PRB Advantage U.S. Production Change

● Low end of cost curve 2010 – 2015
● Primary source for (Tons in Millions)
new plants 80 70-80

● Asian export potential 60

40-50
Illinois Basin Advantage 40

● Lower cost than Appalachia 20

● Major source for
0
new plants
-20
CAPP to Experience (0-10) (0-10)
Significant Decline -40

● Constraints driven by safety, -60

(40-50)
permitting and geology
-80
challenges SPRB ILB NAPP Other CAPP

2009 Production: 417 103 127 232 196

Estimates based on Peabody analysis and industry reports. 23
Peabody’s
Catalysts for Growth &
Shareholder Value Upside
Peabody Energy: Catalysts for Growth

Pursuing Mongolia
Multiple PRB Export Opportunities Opportunities, including
in Development JV with Winsway

School Creek: Best Multiple JVs and Large

Long-term PRB Capacity Project Pipeline in China

Bear Run Mine Strategic Discussions

Expanding Production with Coal India for
Long-term Supply
Gateway Mine Expansion
Pursuing Indonesian
Projects, Partners

Expanding Australia Seaborne

Expanding Met, Thermal Volumes
Global Trading
& Brokerage Metropolitan, Wilpinjong
and Burton Construction
Commenced
25
Peabody Energy: The Only
Global Pure-Play Coal Investment

● Coal long-term supercycle is in the early stages

● BTU: Unique assets, market position and prospects
– Best access to fastest growing global markets
– #1 in lowest cost and fastest growing U.S. regions
● Significant catalysts for growth and increased
shareholder value

26
Citi Basic
Materials
Conference
December 2, 2010

Vic Svec
Senior Vice President
Investor Relations and
Corporate Communications
27