Ladies and gentlemen, thank you for standing by, and welcome to the Peabody Energy Third Quarter 2012 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded. With that being said, I'll turn the conference now over to the Senior Vice President, Investor Relations and Corporate Communications, Mr. Vic Svec.

All right. Thank you, John, and good morning, everyone. Thanks very much for taking part in the conference call for BTU. And with us today are Chairman and Chief Executive Officer Greg Boyce; as well as Executive Vice President and Chief Financial Officer Mike Crews. We do have some forward-looking statements. They should be considered along with the risk factors that we note at the end of our release, as well as the MD&A section of our filed documents. And as always, we refer you to peabodyenergy.com for additional information. With that, I'll now turn the call over to Mike.

Thanks, Vic, and good morning, everyone. In the third quarter, Peabody's cost containment efforts led to strong operational results despite the challenging global markets. U.S. operations turned in higher contributions and margins than the prior year. Australia delivered increased volumes of both met and thermal coal, and we generated over $600 million in operating cash flows. Looking first at the income statement. Third quarter revenues exceeded $2 billion and rose 4% over the prior year on sharply higher Australia output and higher realizations in the U.S. Combined shipments for the platform totaled 67 million tons, rising 6% over the prior year. Consolidated adjusted EBITDA totaled $460 million compared to $509 million in the prior year. These results came in above our guidance range due to strong shipments in the U.S. and cost control across the platform. Compared to the prior year, adjusted EBITDA from U.S. Mining operations rose 7% due to higher pricing and lower cost. In Australia, adjusted EBITDA declined $25 million as higher volumes largely offset $160 million of lower pricing. Diluted earnings per share from continuing operations totaled $0.46. Excluding the noncash remeasurement of income taxes, our adjusted diluted earnings per share was $0.51 compared with $0.90 in the prior year. You'll recall that higher DD&A charges and interest expense continue to impact comparisons with the prior year as a result of our acquisition last October. Our effective tax rate was 21% for the quarter, excluding the effects of remeasurement. We expect a full year effective tax rate of approximately 15%, which includes the $0.22-per-share net tax benefit we recorded in the second quarter related to the integration of acquired assets. Finally, as you know, we closed the Air Quality Mine in the third quarter, resulting in after-tax noncash charges of approximately $75 million, which is recorded…

Thanks, Mike. Our third quarter is a credit to the Peabody teams both in Australia and the U.S. They operated well, contained cost and maintained good volumes in some challenging markets. I'll review market conditions and then discuss our actions to best position the company across the operational, commercial and financial platforms. First, a look at the coal markets, where demand continues to be affected by sluggish U.S. GDP, along with a recession in Europe and deceleration of growth in China. The current economic picture has impacted near-term markets for both met and thermal coal, though we see several bright spots despite these headwinds. In metallurgical coal markets, our near-term outlook remains cautious, while the mid- to long-term view is positive. There are signs that met coal pricing in the thin spot markets is beginning to stabilize, and projections call for increased growth in global steel production in 2013. I'll make a few more observations on metallurgical coal. We believe the Chinese government will continue to provide favorable monetary and fiscal policies to spur greater growth in key manufacturing sectors while implementing robust infrastructure spending in line with the current 5-year plan, both keys to sustaining 7% to 8% GDP growth. There are signs that China's steel production is picking up in the first half of October, following the return from the recent holidays. Current international market prices remain below delivered domestic Chinese pricing at coastal markets, which should encourage greater imports. And longer term, metallurgical coal growth remains positive as emerging Asia continues to build out major infrastructure and manufactured consumer goods as populations move to the cities and up to the middle class. Now turning to international thermal coal markets, increased generation continues to drive growth in seaborne demand. I would note that this demand has been necessary…

[Operator Instructions] First, with the line of Michael Dudas with Sterne Agee. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: Good luck tonight. First off, regarding what PRB utility utilization and coal production trends you've seen since the bottom in the spring and what you mentioned about the current and 12-month strip for gas, how should the market balance the potential for PRB mine overproduction, which has happened in the past, and where current near published pricing is for 8,400- and 8,800-type coals, which, I think, renders much of the basin uneconomic at the current levels?

Well, I guess, my own sense, Michael, is -- first of all, you assume, when you said good luck, you were talking about the Cardinals? Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: Yes, I was. Yes, that's correct.

But I think that you're going to see that the producers are going to be very respectful of their cost positions as new production -- or production gets recovered from what's been taken out of the market over the last 12 months and certainly over the last 6 months. I mean, obviously, there's been a lot of changes. People have been deferring capital. Not all of the production that was in place is immediately recoverable. You'll have some over time that you can bring back in, but all of that comes in at a bit higher cost structure than what people currently have. So I think that there's going to be a good level of cautious -- caution as people bring production back into the market to meet that growing demand. Michael S. Dudas - Sterne Agee & Leach Inc., Research Division: And my follow-up is, you mentioned in your prepared remarks, Greg, 150 million tons or so of Chinese capacity coming offline because -- from the small, inefficient mines. Do you think that's just a continuation of the government's plans? Or has that been accelerated somewhat because of market prices within the country and given where opportunities for -- where given benchmark prices are and what the cost curve is in China?

Well, I think, fundamentally, it's part of the government's plan to restructure the industry. Obviously, it's probably helped a bit by current market conditions. But when you look at the cost structure in China, it's -- the import market is very competitive, certainly in the southern part of China with their own internal domestic production. So I think the market is helping them achieve their long-term goals, and that is to have larger enterprises, have a lot less smaller, higher-cost, less efficient and less safe operations in the sector.

Our next question is from Jim Rollyson with Raymond James. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Greg, you mentioned in the prepared remarks your comment about the seaborne thermal market maybe growing by another 100 million tons next year. Kind of curious, a, where you see the exports kind of originating from around the globe; and, b, what kind of international benchmark pricing do you think you need to get there?

Yes, thanks. I think -- the 100 million tons was actually what our forecast for growth for this year in 2012. We see additional growth in '13 through '16. Almost all of that growth comes from new generation being built globally between now and 2016. We still see 390 gigawatts of new coal-fueled plants being built, particularly with a heavy emphasis on China and India and the rest of the Pacific Rim. This year, year-to-date, we've seen a significant increase early in the year from Indonesia, filling that volume. As prices earlier in the year were higher, we saw more exports out of the U.S. Colombia has picked up a bit. And in the first half of the year, South Africa was operating fairly well. Of course, you roll forward now to where we sit today, as the U.S. exports became higher cost and prices had fallen a bit, they came out of the market, Colombia increases have stabilized. South Africa is starting to have problems across their entire mining spectrum given their unrest. And Indonesia, over the last 4 months, has been down, as they've rationalized their export capacity given where prices are falling. So I think, to a certain degree, it encourages us that, as we saw that little bit of dip in seaborne pricing, the market responded fairly quickly, which would give us an indication that we were -- that would have been the floor, if you will, on prices going forward. And now, as economic activity in 2013, hopefully, begins to improve, we'll see both increase in demand and upward pressure on pricing. James M. Rollyson - Raymond James & Associates, Inc., Research Division: And as a follow-up, you guys have done a phenomenal job, obviously, on trying to hold the cost line. Talked about the 100 million in additional kind of overhead tightening of the belt I think you mentioned. Just curious where, kind of around the -- if you'd kind of walk around the Peabody platform where you've seen this, and maybe how much of that has actually already happened versus how much is yet to show up in the numbers.

Sure. This is Mike. In response to the current market conditions, we've been looking not only at the fourth quarter but also 2013. So it was a concerted and combined approach. When you look at overall cost reductions, really, no cost category was safe. We look at personnel, we look at contractors, we look at outside spend, we look at T&E. So as it relates to that, from a headcount perspective, we've got 900 and -- roughly 925 positions that are coming out of the platform, which is a combination of corporate and admin positions. But the largest bulk of that is really going to be related to contractors, both at the corporate level but even larger on the operating level. And then we frankly have some open positions that we're going to eliminate going forward. So it's an effort that starts to benefit in the fourth quarter, but we really expect to see the full benefit in 2013. And it is targeted, specific and, we believe, realizable next year.

The other thing I would add to that is we have -- we're benefiting from a significant number of investments and processes that we have been putting in place and building upon over the last 1.5 years. Simple things like investment in technology that will allow us to have the best videoconferencing capabilities around our platform. So as we look at how do we reduce, as Mike said, travel, when you're flying globally all the time, that gets pretty expensive in today's environment. But now that we've got the technology in place, we can significantly and have significantly reduced that. So that's one sustainable aspect. The other one is in our asset management and our maintenance programs across the group where, historically, you would do major repairs based on hours. Well, we've invested and implemented pretty sophisticated systems to where we look at the actual condition of engines, wheel motors, major gearboxes of conveyor systems, and we do the analytics to only do those repairs that are required on a condition basis. And so what we're seeing is we're getting extended hours; we're getting a lower mean time between failures, but we're getting longer life out of our components, which is significantly reducing our maintenance repair costs. We see a lot of that as sustainable as we go forward. So those are the kinds of things in addition to, as Mike said, opening up the coverage and pulling out everything that you would -- in good times, you would like to do. But when you get into these kinds of markets, you get really tight and you say, "What's absolutely necessary?" That's what we'll do to be safe and get coal to market.

And next, we'll go to Brian Gamble with Simmons & Company. Brian D. Gamble - Simmons & Company International, Research Division: I wanted to focus specifically on the met market, if we could. Some comments in here around your expectations for the global market, and it's specifically related to -- and in your comments about China and continued growth there. How much of your forecast for 2013, as far as either the balancing or maybe the slight improvement in benchmark pricing, is based on China continuing to grow demand versus, I guess, production rationalization, both in Australia and in other geographies?

Well, I think it's always difficult to put an exact percentage on one versus the other. I will tell you that our forward view is we assume that China is going to be around that 7.5% GDP level. And then we look at how that drives both their steel demand, as well as their coal fuel generation demand for thermal generation. We do not anticipate significant recovery in the European market in 2013. We see modest improvement. We'd like to see modest improvement in the U.S. markets. So as we take all of those into factor and then we then overlay what we believe will be reduced supply, particularly out of the U.S. because of the current market conditions and some rationalization among the high-cost producers in Australia, that gives us our forward view for 2013. Brian D. Gamble - Simmons & Company International, Research Division: And are you baking in a specific price within your forecasting for next year on the met side?

We certainly have our views on price, but we don't normally share those. Brian D. Gamble - Simmons & Company International, Research Division: I realize that. Just thought you might want to throw it out there. But that's okay, no problem. And then my follow-up is on the U.S. market. Great volume for the quarter. The interim data was outstanding, some good numbers out of the PRB. Are the shipments that went out during Q3 more a reflection of the hot summer and, therefore, utilities' ability to take some of the deferred tons from earlier in the year? Or is it incremental to what they thought burn would be and, therefore, more positive as we roll into 2013 as far as what that ratio of coal versus gas within the power mix could potentially be?

Well, certainly, you saw an increase in the coal component of generation in the third quarter. And with gas prices $3.50 and above and forecasted to be above $4 for next year, we see a significant amount of gas-to-coal conversions through the back half -- through the rest of this year and then through 2013, particularly -- I mean, PRB is essentially all in the money. Illinois Basin, when you get up to $4, will be predominantly all in the money as well relative to competition with gas. But there's no question, the hot summer also helped the burn. And so we saw, to a certain degree, strong offtake from the utilities through the early part of the third quarter. So what we're seeing right now is a bit of a slowdown in overall PRB shipments. Train sets, which you normally would have in these shoulder seasons, pulled out, and we'll just have to see how the winter materializes. If you'll all recall, last winter was pretty nonexistent. Normal winter, we'd expect a continued rebalancing of inventories through the winter and into summer next year.

Our next question is from Shneur Gershuni with UBS.

I have 2 questions: one on revenue, one on costs. I guess it's more of some follow-ups as well. But you had mentioned production cuts in China, and it was tough to tell whether it's more thermal or more met. I was wondering if you can sort of talk about that in context with also the tight PCI spread that you guys had mentioned this morning, being the 125 versus the benchmark of 170, in kind of -- a tighter spread than we would have thought and where you -- if you think that's going to continue to trend that way or trend the other way. Just wondering if you can sort of give us a little color on that.

Well, as you look at the production cuts in China, it certainly was a -- it was a combination of the 2, although they would have been, I think, more weighted towards thermal coal versus metallurgical coal. They have been -- they have classified metallurgical coal in China as a special resource, and it's controlled to a much higher degree, the production of it, than thermal coal. But I think the majority of what we're seeing right now is actions to reduce a lot of these small thermal coal operations in China. In terms of the spread between the low-vol PCI and the hard coking coal, you're right. It did tighten slightly this quarter. I think it's about -- else -- PCI was about 74% of hard coking coal versus where it had been running in that 72% range. Even with hard coking coal at these price levels, we're still seeing demand for the low-vol PCI coals. In any market, they provide an -- there's a built-in incentive, economic incentive and cost incentive, for steel mills that can use PCI coal to put that into their mix. And I think that's what we're seeing in terms of the underlying strength at this point in time in the marketplace for PCI. And when I say strength, it's relative to the spread on hard, quality, coking coal.

Okay. And maybe as a follow up with respect to costs, we definitely saw improvement quarter-over-quarter. I was wondering if you can sort of talk about 2 aspects. One, when you gave guidance earlier about what you needed to do with respect to Macarthur, you talked about an extra $100 million in overburden work this year. You've seen some improvements here as well too just, well, in the last quarter. When -- all else equal, obviously there can be inflation in some other areas, where do you expect the trends in cost to be in 2013 if you were to hold certain things flat relative to this year? And if you can also talk about in context to the Powder River Basin as well, too. If things were to pick up, would fixed operating leverage actually be a nice benefit as we look at '13 as well from that region too?

Yes. Let me just -- Mike can dive in after this if he's got any specifics to add. Let me just talk to it from a little higher level. You can see the type of benefits we get from pretty aggressive cost management and cost control activities with our current results. I can assure you, we're going to continue to be pretty passionate about that as we go through the next 18 months. But when you look at cost reductions or you look at the cost equation, you've got to take a view on what oil pricing is going to be because we have a high sensitivity in our platform to those costs. We've yet to see what kind of increases we're going to see from suppliers for whether it's -- particularly for maintenance and repair items going forward. We've got some views on where we think labor costs are going to go. But until we finalize a few outstanding settlements, we're not going to see the full picture there. And so -- and then the last part of all of that is what the volumes are going to be for next year, and we haven't fixed those volumes yet, either in the U.S. or the Australian platform. So all of those are moving parts that, based on what we're seeing right now, are going to put probably more pressure on the cost structure rather than less. Now having said that, we've obviously got our owner-operated conversions in Australia, which we are expecting significant benefits from. And as Mike talked about, we've got this cost reduction initiative that's already, on a 2013 basis, looking to pull $100 million out of our overhead cost structure. So what does that say net-net? I can just tell you that we're going to be aggressively managing cost. We're not anticipating significant increases. It's a bit too early to really indicate and give guidance as to where we think those costs are going to be and at what level. Mike, anything to add?

Yes, I think you hit on the key points. A lot of this is volume dependent but in the -- particularly on the Americas side, we are looking to balance any inflationary pressures with cost containment. That's the goal that's been given to the teams, and they've responded with some of the targeted efforts that they've come back with. When you look at the moving parts in Australia, you've got higher royalties, potentially higher exchange rate impact, the carbon tax and the inflation that they have there. But then, as Greg said, some of the mitigating factors you would have would be the owner-operator conversions. And you asked about the overburden remediation plan at the PCI operations, which are on track, which would lead us to an expectation for lower cost on the PCI mines next year.

The next question is from Meredith Bandy with BMO Capital Markets.

Sorry to bring the house down a bit, but I wanted to ask you about some of the, I guess, headlines and kerfuffles in the press about Patriot's bankruptcy. And I think probably just jawboning, but in terms of the unions there looking to you and potentially Arch to pay some of those liabilities, if you could just expand on Peabody's stance on that?

Well, I don't think our stance has really changed from prior calls, Meredith. When Patriot was spun, it was a viable enterprise that went out, did mergers, organized their own bank credit lines, went through all of the things that a stand-alone business would do. The liabilities that the union is talking about were liabilities that Patriot had and, as far as I know, are continuing to get paid. As part of our -- we had 2 components. We have -- and as we've disclosed in our 10-K, we've got a potential liability related to black lung, although Patriot did arrange letters of credit with the government for those and continues to make those payments. And then we had entered into a contract to pay some of the liabilities for some of the retirees, a group of retirees, for Patriot that is still in place, and we still make those payments today. So I think we're going to hear a lot of noise. That's probably to be expected. But I think from our view, it's that these are Patriot questions, they're Patriot issues and to the extent that our liability there as we've disclosed those in our filings and we don't see anything beyond that.

And so the liability you're speaking of for some retirees, is that related to -- I think third quarter it was $600 million? And...

That's correct.

And so that's included -- when we go to your balance sheet, that's already included in your other liabilities right now.

That is correct.

Our next question is from Mitesh Thakkar with FBR. Mitesh Thakkar - FBR Capital Markets & Co., Research Division: I have a quick question, a little bit on the CapEx side. Given the softness in the met market, and it's a little bit softer than the last quarter, so how do you think about your CapEx plans? Any [ph] consideration for the existing growth plans to get you to your 2015 target and/or other opportunities like Mongolia? I know you guys have been cited in a couple of media reports of -- in which you were considered to be one of the selected parties for developing infrastructure in Mongolia. How do you balance those needs against your existing growth plans?

Yes, I think you can look at the actions that we've taken to date, particularly with our growth profile. The Codrilla development was one of those where we took the opportunity given the market conditions to step back. We're going to do some more engineering, more drilling and bring that forward at a later date. The only capital that we're really spending in Australia right now are on completion of projects that were 75% to 80% or more already complete when the market started to move, particularly when we saw this quarter's settlements; and the owner-operator conversions, where all of the equipment had been ordered, and we're well down the path, and the economic value to us for implementing those conversions is still extremely high. And so those are proceeding. All of the other projects that we had, we've retimed. We've slowed down. We've pared back in terms of the capital spend. So that's our Australian management of our capital spend related to, particularly, around met coal growth. In terms of Mongolia, I would just tell you that we're not planning on spending money on infrastructure in Mongolia. We are continuing to have discussions with the Mongolian government and others around the development of TT and how best to do that. We've been asked to give them advice on the infrastructure demands and requirements and what infrastructure should be built in order to best develop and utilize the TT resources across the entire TT platform, East and West. And we're continuing to do that. But we would look to project-type financing and other types of financing mechanisms if and when TT gets to a point where all of the agreements are put in place and development might take place. Mitesh Thakkar - FBR Capital Markets & Co., Research Division: And any update on the timing or anything like that? I know it's a little premature, but if you have something which you can share with us?

No, there's nothing specific in terms of timing. We're just starting once again to have some preliminary discussions with the new government, but they still have things that they need to do to put in place to really kick those discussions off in earnest. So in the near term, we do not see that moving very quickly.

Our next question is from Paul Forward with Stifel, Nicolaus. Paul Forward - Stifel, Nicolaus & Co., Inc., Research Division: One line item I wanted to ask about, there was -- in the third quarter '12, there was $21.2 million of losses from equity affiliates, which we're assuming is mostly Middlemount. I was just wondering if you could talk about what's going to have to happen in 2013 as far as either pricing or continued investments there to turn that from a negative to a positive number.

Yes. Just at the -- at a high level around Middlemount, what you're seeing right now was really an impact of lower production levels as we were continuing to ramp up that operation. We've just received, during the quarter, the permits in order to go up to its nameplate capacity where it's most efficient. The management team at Middlemount is working with both owners, ourselves and Yancoal, to determine the time frame and how best to now -- and over what time frame Middlemount would grow to its normalized production. And obviously, a lot of that has to do with the forward view on the cost structure as well as the market. So all of those discussions are currently in place. There's been no decisions yet at this point in time. And we'll just -- we'll see what the outcome of that engineering work and financial work and see where the partners go. But you are right; it's an operation that we need to make sure that we bring forward at the right time frame and under the right basis based on where the market demands are. Paul Forward - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And also I want to ask -- you talked about a 40-million to 60-million ton increased number in 2013 for U.S. power plant demand. I was just wondering if you could give us a little bit of a breakdown on, what's Peabody's view? Is that all going to be PRB and Illinois Basin? Or is it -- how do you see the regional shifts happening on that demand in 2013?

Yes. I think, essentially, our view is it's almost all PRB and Illinois Basin. And it'll be a bit different, the base spent on -- plant by plant where they -- where their stockpiles levels are as we come through the end of the year. Obviously, the PRB stockpiles on days burned are better off than the Illinois Basin, and both of those are significantly better off than Central App. We also see additional production coming out of Central App. So what the real flow-through impact to mine site production in the PRB and the Illinois Basin is going to be pretty muted because of the -- because of stockpile drawdowns. But we certainly feel good about the level of new demand as we look at coal recapturing market share back from gas at the forecasted gas prices for next year.

The next question is from Brandon Blossman with Tudor, Pickering, Holt. Brandon Blossman - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: A couple of follow-ups probably for you, Greg. I guess, one -- and this is generalities, but the overall PCI market supply/demand, at 125 or the low 100s just in general, on a go-forward basis, your view of the cost curve there as -- for the industry as a whole, do we lose production? Are there -- is there a meaningful uneconomic production at that price point?

I think there is uneconomic production. Whether it's meaningful or not remains to be seen. When we picked up and purchased Macarthur, that put us as being the largest producer. With the work that we've done at Coppabella and Moorvale, we feel very good where we stand on the cost curve, but there's a lot of other operations that are challenged, particularly if they were to get down to the lower number you were talking about. And we've already started to see some production come out of the market even at today's prices. So we're at that point. And I would say we're probably at that point relative to hard coking coal price as well. When you look at today's prices, we've already seen what that's done to exports out of the East. And we've got high cost coming out of Western Canada. You've got some smaller high-cost operations even in Australia that are going to have to make some adjustments, and we've already seen some of those across just about all of the producer bases in Australia at today's hard coking coal price. So both of those are other indications to us that the market will -- if you will, has bottomed out, and we should start to see forward movement. Brandon Blossman - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: That's helpful color. And going a little bit nearer term into the U.S., Powder River Basin, obviously, third quarter was good -- reasonably good on a year-over-year basis, exceptional on a quarter-over-quarter basis. It looks like production out of the basin -- at least, shipments out of the basin has fallen quite a bit coming into the fourth quarter. Presumably, it looks like fundamentals haven't changed that much. Burn should be okay. Are we seeing folks just kind of taking the opportunity for a breather and pulling down, drawing down inventories? Or do you guys think that there's actually meaningful reduced burns on a year-over-year basis?

Well, I think, first of all, you have to remember we're in that time frame, the shoulder months, where we normally see these types of variations in any given year because we've gone from the hot summer burn, now we're transitioning through fall and waiting to see how cold the winter is and kind of the heating degree days we need to have going into the winter. So what we're seeing right now, I think, is what we would typically see in the cycle. Now clearly, if inventories were more normal, we might not see the slowdown quite as much as we're seeing it right now. They are clearly taking advantage of the shoulder season and high stockpiles. But that doesn't appear at this point to be significant, and I think everybody is now trying to determine and anticipate what the winter burn is going to look like.

Our next question is from Justine Fisher with Goldman Sachs.

My first question is just on what you're seeing from the utilities as far as pricing goes. So on the volume side of things, 3Q was really good. You're all waiting to see what they do for the shoulder season. When they're coming back to buy more volumes from you, whether it's to price some 2013 coal, although I know you said it was just a bit that you had priced, or in the third quarter, are you guys seeing leverage on your end on the pricing side? Or is it just higher volumes? Do you see the utilities actually willing to pay much higher prices than the curve and they're willing to give there too? Or is it just that they're buying more?

I guess I would just say, Justine, if you look at how much we sold, which was very, very little in the third quarter, that kind of gives you the sense as to where the discussion environment is with the utilities. So there's not a huge amount of volumes that are being sold. And I think that's reflective of prices, and those discussions are not where certainly we would like them to be, I suspect, probably where others are.

Okay. And then my follow-up is just on the balance sheet. You guys entered the quarter with really a good cash balance. And I was wondering, a, if you could talk to us about what -- was it operating cash flow that made that cash balance so high, whether it was working capital or something else? And then, b, as far as using that cash going forward, I know your term loan matures in 2015. I don't know whether you guys are thinking of paying that down or whether the shelf you filed recently had to do with accessing the capital markets to repay the term loan, but how are you guys thinking of your cash balance and that 2015 maturity?

Sure. Justine, this is Mike. So as it relates to the cash performance in the quarter, you're right. We had $616 million of operating cash flow. We did have good strong EBITDA performance. But at the same time, we did have some fairly significant working capital benefits on the receivables side. When you look quarter-to-quarter, we had some higher shipments in the month of June relative to the month of September. So that was a natural decline, which was a cash inflow. We also had some increases in payables as we had accrued for taxes and interest and royalties and things of that nature, and some of that will turn around in the second -- in the fourth quarter. So then as you look at use of cash going forward, we've said our #1 priority is deleveraging. We'll continue to look at what that cash generation looks like, particularly in the fourth quarter, and make some decisions. We do have -- we've got $35 million of scheduled repayments on term loans in the fourth quarter. But really, when you look at near-term maturities, you've got $75 million across those term loans in '13 and '14 with no significant maturities until 2015. Having said that, that's all prepay-able debt, so it's something what -- that we would target to the extent we have excess cash flow from operations, asset sales, any of those portfolio optimization activities.

And just to follow up, Justine, you asked about the shelf. There is no signal there. That was really just replacing a shelf that expired in August.

Our next question is from Brian Yu with Citi.

The first question that relates to just rail rates, I think it was last week, I heard some news, I think, some of the Australian rail guys, have started to cut their prices to help facilitate the competitiveness of PRB now that it's more in the money. I was wondering if you guys could comment on it or anything you've observed on their end.

Well, at the end of the day, the rail rates are contract and the rail is contracted by the utility customers. So in general, other than a little bit of the export business that we do directly with the railroads, we're not involved in those discussions. I would say that the railroads have always taken a view that they are a participant in this market. They understand that coal at the end of the day had to be competitive, particularly with gas, and they participate in making sure that where we can -- collectively, as coal produces, utilities and the rails, that we can supply coal on a competitive basis. But beyond that, as I say, the vast majority of the business is directly contracted between the rails and the utilities.

Okay. And then the second one I have is just with Coppabella and Moorvale. I know you're expecting [indiscernible] costs here with the onetime stripping activity not recurring. Can you give us a sense of how much has been spent there? I've got in my notes that maybe it was closer to $100 million for this year. I was wondering if you could speak to, is that still a reasonably accurate estimate and that's the size of the improvement we should expect for '13, just purely on those assets?

I mean, as it relates specifically to those 2 assets, I think it'd be hard to comment at this point. We're right in the middle of the budget process. And again, it's going to -- as we talked about on some of the other overall macro cost issues, it's going to really be volume dependent. So I think it'd be difficult to give you an answer on those 2 specific properties today.

Our next question is from Mark Levin with BB&T. Mark A. Levin - BB&T Capital Markets, Research Division: Most of my questions have been asked and answered. Real quickly just on FX and thinking about how the -- what the FX impact might look like in 2013. I know you guys have some hedges that I think are rolling off, but maybe remind us of sort of how to think about that going into '13.

Sure. Yes, we have a rolling hedge program. So we're about 60% hedged based on our current estimates, the requirements for 2013, at an average hedge rate of about $0.90. So then, as it relates to sensitivities on '13, a $0.05 change in FX rates would be about $68 million. Mark A. Levin - BB&T Capital Markets, Research Division: $68 million, great. That's very helpful. I appreciate that. And then secondly, as it pertains to asset sales -- and I think you had referenced that earlier. Did that -- is something that you guys I know are always looking at as one would expect, sort of the Wilkie Creek process. But is there other -- any other sort of areas or regions that -- or large asset sales that one might think could happen, or what you're looking at basically is just kind of small stuff here and there?

Yes. I mean, beyond Wilkie Creek, we have our Resource Management segment that we look at with -- across 9 billion tons of reserves. We're always looking at things that may not be noncore, nonstrategic or something that maybe a little further down the line for us relative to some others. So that's really the first place that we would start. But I mean, having said that, it's really looking -- and we also look at maybe potentially some of the longer-term tenements that we may have in the Australia portfolio. So those are 2 of the primary areas where we would be focused.

Our next question from Richard Garchitorena with Crédit Suisse. Richard Garchitorena - Crédit Suisse AG, Research Division: First question. It looks like trading operations margins came down a little this quarter. Anything specific to highlight there?

Yes, we were pleased with the volume that we had, which was really U.S. and Australia export shipments. But it was really due to lower realizations, which led to lower margins in this current market environment on those shipments. Richard Garchitorena - Crédit Suisse AG, Research Division: Okay, great. And then just one follow-up, more an industry question. Given the fact that utilities look like they're less anxious to sign contracts today, do you think, going forward, we may see a change in terms of the contracts, maybe have some tied to nat gas pricing and index-based contract pricing or maybe shorter contract length? Historically, you've done 1, 2, 3-year, 4 contracts. Anything you think that may change, I guess, given the current environment? Or...

We're not anticipating significant change. I mean, I don't see it tied to natural gas. And at the end of the day, coal producers need to be able to have a return on their investments. The utilities understand that. They also understand that coal is going to be a significant component of the mix. And so it's -- when you look at both of those relationships, I think you're still going to see a significant amount of business that's contracted out over a 3-year time frame. That doesn't mean we're not going to see some increase in shorter-term purchases. We already have. But there's still going to have to be baseload -- and 3 years, I'm talking out of the Powder River Basin. There has to be some baseload contracting in order for companies to make the capital investments in mining, rolling, stock and equipment to maintain productive capacity. And the utilities understand all of that. So I think other than a bit of additional spot purchasing and shorter-term purchasing, we're not anticipating significant changes.

Next, we'll go to Andre Benjamin with Goldman Sachs.

Two quick questions. I guess, first on the cost side, I just wanted to make sure we're accurately capturing this $100-million in incremental cost savings you're targeting. How much of it should be in just SG&A, which seems to be running about $270-million to $280-million run rate versus, say, unit cost given you said some of that is contractor cost, which I think come out of cost of sales? And then, how much should be -- it seems like most of it is Australia and overhead. Does any of that flow through the U.S.?

Yes. I think the best estimate at this point would be about 30% on an administrative basis and then another 70% as it relates to the operating platform.

And then on the capital side, I guess, similarly, even though it's too early for formal guidance, but I think your color was that costs should be down meaningfully, and I'm just trying to understand, is that just a few percent, hundreds of millions of dollars, et cetera or -- and is that level of spending consistent with, say, your original goal of hitting, say, 40 million tons in Australia by 2015? And will it make you potentially take that back up?

Those are all great questions that we'll probably have to wait until January to give you a whole lot more color on. But suffice it to say, when we use the phrase "meaningful," we didn't use that lightly. We're anticipating that our capital program will be reduced for next year and it will be meaningful productions. The second part of your question is, how will that impact volumes by 2015? We'll have to see. We are completing -- as I talked earlier in the call, the little bit of capital that we are spending is to complete a couple of projects that were so -- that were very far advanced, which are providing us more volumes. We're already seeing that at Wilpinjong. We'll be seeing that out of Millennium. And we've got 1 or 2 others of the same basis, the longwall top coal caving at North Goonyella, for instance, which will be going in next year. So we'll give you a better sense and more color at that point in time.

And next, we'll go to Dave Martin with Deutsche Bank.

I have a couple of remaining items. First, coming back to the Asian met coal market, I know you mentioned about lower production in China. I'm curious as to what you're seeing with Mongolia output given lower global prices? Or is it just that this is viewed as low-cost delivered supply and won't be impacted much?

Yes. We haven't seen a significant change in current production out of Mongolia, maybe starting to see a slight change in terms of people's forecast for increases and how quickly those increases may come into the market, but current production seems to be moving at similar levels.

And -- okay. And then as a follow-up, I believe, Mike, you said that your met coal realization in the third quarter was $154, which was well below benchmark and what we had been modeling. I was curious if you could comment on the mix of that business. Maybe that was a primary driver or maybe it's that you're just a much larger spot player than I would've thought.

Yes. I mean, we did have some carryover bonds, as we referenced in the last call. We also have, with the transition -- we've not yet moved into the new mining area at Burton. So we've had a bit of a quality impact, so there's a bit of a quality issue in that as well. So -- and then you also -- as you referenced, with the quality adjustments, that's why you're going to see an average that's below just the headline for high-quality hard coking coal.

And we have time for one more question. We'll go to Lucas Pipes with Brean Capital. Lucas Pipes - Brean Murray, Carret & Co., LLC, Research Division: If we say, like, the met coal benchmark price remains in the $170 range into 2013, would you look to rationalize some existing met coal production or rather further delay some growth projects in Australia?

I think we've already delayed the growth projects based on the current pricing that we're seeing for this quarter. So we continue to look at the cost reductions, aggressively manage our costs, to continue to weather if the market were to be in another quarter at that kind of level.

And that will conclude our Q&A session. I'll turn it back you, Mr. Boyce, for any closing comments.

Well, thank you very much. And I'd like -- once again, like to thank the Peabody team for a very strong quarter and their good efforts during the quarter. As you can tell, our global market view remains cautious, though we've seen some early signs for optimism. We're going to continue to take all of the steps to best position ourselves to work through these challenging markets. But -- and then come across much stronger on the other side. I think this quarter gave you lot of visibility into the things that we're working on and those things that are being very successful. So we look forward to keeping you informed on our progress, and we really appreciate your support of BTU. Thank you very much.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.