Ladies and gentlemen, thank you for standing by, and welcome to the Peabody Energy Q4 Earnings Call. For the conference, all the participant lines are in a listen-only mode. There will be an opportunity for your questions. Instructions will be given at that time. [Operator Instructions] As a reminder, today's call is being recorded. I’ll turn the conference now over to the Senior Vice President, Global Investor and Corporate Relations, Mr. Vic Svec. Please go ahead.

Okay, thank you John and good morning everyone. Thanks for taking part in the conference call for BTU. With us today are Chairman and Chief Executive Officer, Greg Boyce; President and CEO-Elect, Glenn Kellow; and Executive Vice President and Chief Financial Officer, Mike Crews. We do have some forward-looking statements today. 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 we also refer you to peabodyenergy.com for additional information. With that, I’ll now turn the call over to Greg.

Well, thanks Vic and good morning everyone. In 2014, the Peabody team delivered on a number of key initiatives. The result, a record year in safety and proved operational performance, increased productivity, lower cost and reduced capital spending. There is no question that this is occurred against a highly challenging background. The decline in seaborne pricing is lasting longer than anticipated and clearly impacted our results. But our response shows that Peabody continues to take the necessary steps to lessen the effects of the extended downturn and sculpted a stronger, more competitive company for the market upturn. This morning I’ll review Peabody’s perspective on current market dynamics and our positioning, before turning the call over to Glenn for a look at our operating performance and key priorities and then to Mike to review our financials. The recent sell-off in the commodities sector has resulted in significant declines in copper, iron ore and oil due to concerns over global economic growth and supply. The mining and energy sector downturn has further impacted global coal fundamentals that have been weakened by strong seaborne supplies and slowing import demand. For a while, these factors have delayed the recovery, I’ll discuss the underlying catalyst that will drive improvement. In 2015, we forecast that seaborne metallurgical coal demand growth will outpace supply increases for the first time since 2011. This is based on a moderate rise in global steel production along with Australian metallurgical coal export growth that will be offset by supply reductions from the U.S. and Canada. Drilling down on metallurgical coal demand, Indian imports grew nearly 20% in 2014 and are expected to continue to rise as the economy grows and infrastructure continues to be buildout. In China, metallurgical coal import demand is expected to stabilize as the year progresses. And over…

Thank you, Greg and good morning everyone. It is a privilege to take on this role of Peabody Energy, a company with a proud heritage going back some 132 years. I look forward to continuing to work closely with Greg on the transition with a primary mission of creating superior value over the long-term. I’d always been admired the company from a distance and while the markets have obviously been challenging, my respect for the quality of both the people and activities has only grown since joining. I’m pleased to have been a part of the achievements this year and to be surrounded by a great team as we continue to build on what is already a strong and competitive platform. Any discussion of our operational achievements begins with safety. In terms of reportable incidents, 2014 was the safest year in Peabody’s history, and by a wide margin. Our record safety performance was driven by 36% improvement in Australia and we continue to operate under an improvement mindset. In Australia, a strong operational efforts lead to record volumes last year of 38.2 million tons, which includes 17.6 million tons of metallurgical coal sales, and 13 million tons of thermal coal exports. And in the U.S., by our North Antelope Rochelle Mine in the PRB produced a record 119 million tons in 2014 and this remains the world’s largest and most productive surface mine. Overall, our global operations performed well in 2014 and we advanced multiple cost reduction initiatives that help mitigate external market pressures. Over the past two years, our aggressive cost reduction programs and productivity improvements have generated over $500 million in savings. And in 2014, Peabody achieved the lowest U.S. and Australian operating cost per ton since 2010. Our cost reductions have come from a number of initiatives…

Thanks Glenn and good morning everyone. Peabody’s 2014 results reflect a significant operational improvements that Glenn mentioned, as well as challenging market conditions that have pressured our financial performance. I’ll discuss our financial results for the year, the steps we’re taking to further strengthen the business and our guidance targets for 2015 and the first quarter. Let’s start with a review of the income statement and supplemental information. 2014 revenues totaled $6.8 billion compared with $7 billion in the prior year, primarily due to lower realized pricing in Australia. Total volumes of 250 million tons were comparable to the prior year as increased U.S. and Australia shipments offset reduced trading and brokerage volumes. The effects of low prices continue to be felt in a major way in 2014. Full-year adjusted EBITDA of $814 million was impacted by more than $550 million related to lower realized pricing. Peabody was able to offset $275 million of this impact through decreased cost and increased productivity. Adjusted EBITDA also includes $26 million in charges related to an organizational restructuring program and a lump sum pension settlement offered in the U.S. You will recall that our October guidance excluded this plan charge. On that basis 2014 adjusted EBITDA exceeded our guidance with stronger performance due to Australia cost containment actions, a faster than expected Colorado longwall move and successfully obtaining a new mining permit at Wilpinjong that resulted in stronger fourth quarter volumes. Now let me turn to the U.S. operations, which generated $1.1 billion in adjusted EBITDA last year. This is a slight decline from 2013 due primarily to lower realized pricing in the Midwest. Midwest revenues include the finalization of a customer sales agreement that have been shipped on provisional pricing. This had a $1.56 ton per impact in the fourth quarter. Our…

[Operator Instruction] First, we will go to Michael Dudas with Sterne, Agee. Please go ahead.

Good morning everybody and congratulations, Glenn.

Thank you.

I guess my first question is for Michael. Looking at lot of noise in the fourth quarter earnings results and you went through that pretty quickly towards the end of your prepared remarks. So could you just highlight, it looks like you net everything out, you could get a may be a little bit of positive in the earnings in the Q4 so - and maybe a little bit of better uptick of what you have referred. So could you just flip through that a little bit more carefully and it seems like it could have sharp a little better or given all the noise.

Yes, sure. At the EPS level and you look at what we were reported on an adjusted basis was $1.21 loss for the quarter and $2.27 loss for the year. But then there were a number of items that were included, for example, the restructuring and pension charge, which was $26 million that was not reflected in our guidance that was about $0.10 per share impact. And then we have that valuation allowance that we’ve recorded at the equity investment level for Middlemount and that was about a $0.20 impact and then finally the valuation allowance we needed to take against the U.S. tax assets was $0.96 impact and that’s where we reflect in total for those items that are included in that $1.21 loss and $2.27 loss for the year, a total of $1.26.

Got it. Okay, a follow-up would be - and towards the end of your comments about oil and FX, so you mentioned $250 million figure over the past - as much as of the impact, can you remind us about policy regarding hedging on each of the currency and on the energy price. And if things were to stay at sustained level of exchange rate on oil price, say a year from now heading into 2016, how much more additional positive payment could be like we anticipate giving your expected volume of forecast.

Sure, for both fuel and FX we hedge on a programatic basis primarily to limit volatility and it’s on a sliding scale over 12, 24 and 36 month basis and those targets are typically 70%, 50% and 30%. And so for both fuel and FX were hedged in that 70% range for 2015. When you think about our cost targets that we gave from both the U.S. and Australia with a decline of 2% to 4%, about half of that in the U.S. comes from fuel and in Australia about 50% of that number comes from both fuel and FX. And then the way you characterizes the way we look at it as well if you hold everything constant if exchange rates and the forward points that you have for foreign exchange were hedged below. We hare slowed down our hedging and we’re below our targets for 2016 at about 42%. So that’s - more than $250 million number comes from. It’s looking at the forward points for both fuel and FX and that derive that number for 2016.

That’s it, Michael. Thank you.

And next we will go to Mitesh Thakkar with FBR Capital Markets. Please go ahead.

Good morning gentlemen.

Good morning.

Good morning.

Hello.

Mitesh, can you hear us?

Yes. So thanks for taking my call. My first question is just on your Australian cost guidance for 2015. If you could kind of give us some color around how much of the improvement on a year-over-year basis comes from foreign exchange tailwinds and crude oil tailwinds? There is also a mix shift between steam coal and met coal and then there is a full year impact of Goonyella ramp up and idling and also contractor conversions. When you put all these together, how should we think about different buckets for getting the cost benefit you mentioned? I know the currency is 70% hedged, but still just on an approximate basis?

As we mentioned on the remarks and the release, we’re targeting at 2% to 4% decline in Australia cost year-over-year, as it’s just noted on the previous question about 50% of that is due to - the benefit is due to lower fuel prices and lower exchange rates on a year-over-year basis. Then when you look at the moving parts on the rest of the changes, you’re going to have normal inflation, a bit of increase in overburden removal cost that we look to offset that with a little bit lower royalties and improved longwall performance with the full year of North Goonyella. So I think those are the significant items. We know we still have the owner-operator conversions that we look to leverage with additional productivity improvements as well.

Great and just a follow-up, you’ve mentioned that - and this is more macros question, 2017, you expect coal generation to become 40% of the total electricity generation. Can you walk us through a little bit of your assumption, how you’re treating [indiscernible] what’s the impact from that as well as potential greenhouse gas was in 2020, 2021, whatever it is?

Sure, Mitesh, this is Greg. I mean as you look at going out through 2017 where we get that 40% of electricity, there is still going to be 240 gigawatts of coal fuel generation remaining in the U.S. and we see that fleet running at a higher utilization level than where it’s been running not only given its location, but given the demands for base load electricity. So as you look at - and that incorporates our views as to what retires between now and then for both the naturals and the other near-term regulatory requirements. So that that’s up to an increase by 2017 in total U.S. coal demand of somewhere between 10 and 30 million tons, but more importantly for PRB and Illinois Basin demand which is critical to us, up about 50 to 70 million tons over that timeframe. So that’s kind of the building blocks. Beyond 2017, we see that fleet remaining at a very high utilization rate for a number of years going forward.

So no impact of greenhouse gas regulation is incorporated in it?

Well, no - I mean even the current greenhouse gas regulations would take place until post 2020. We don’t think what’s out there currently is going to [indiscernible] in terms of final regulations. But any of that would be in the early 20s to mid 20s in terms of any potential impact. So none of that will be included and I don’t think anybody forecasted at anytime before 2020 and beyond.

Okay, great. Thank you very much guys and good luck.

Our next question is from Paul Forward with Stifel. Please go ahead.

Thanks, good morning. I guess one quick question would be looking at that Australia cost - the cost in the fourth quarter, you were down below $62 per ton that the projection of the decline of 2% to 4% in 2015 suggest - call it a $66 per ton figure in Australia. Can you talk about whether - whether you might be able to exceed that 2% to 4% and make it look more like the fourth quarter results or what might keep you from being able to keep posting cost like you did in the fourth quarter on a sustainable basis?

Yes, sure. Paul. This is Mike. The two big components there for the very good performance on cost in the fourth quarter where our cost containment activities and also really longwall performance. Well, longwalls, when they run well, you really get a great cost result. As you look into our guidance for next year and our guidance for the quarter, we do also have two additional longwall moves in 2015 versus 2014, so that’s going to have an impact on the cost position.

Okay, great. And I just have a follow-up. I wanted to say congratulations to Glenn on the transition. I just wanted to give you a chance here to talk about - 2015 has started off as a disappointing year with a dividend cut obviously forced by market conditions, but you’ve got the chance here to think about 2015 and beyond going forward. How do you see the firm’s strategy shifting under your leadership?

Well, thank you, Paul. And as Greg has indicated, I actually was involved in the 2014 strategic planning processes that the company had undertaken. So I wouldn’t expect to see dramatic shifts as a result. Obviously current market conditions as we talked about anticipated shorter term responses. When I look forward, I do see our number one priority always being to continuously improve the safety and health of our operations. But beyond that and with respect to strategy we do operate in the low-cost basins in the U.S. whilst having significant exposure to those growing Asian markets via we’ve talked about our high quality Australian platform. But our near-term focus with the market, it is there and we continue to take necessary steps to work through this downturn while also at the same time, maintaining that strong positions of benefits when coal markets do improve. And this has the implications on the corporation both commercially, financially, operationally in all corporate levels. You did talk about the transition and - I do indicate that Greg and I are working closely together on the remaining elements of the transition and I am fortunate to have his counsel and support through that time, but my focus will be longer-term having that overarching commitment to create superior value.

Okay, thanks very much, Glen.

And next we will go to John Bridges with JPMorgan. Please go ahead.

Hi, thanks for taking the question. I was just wanted to dig a little bit more into that response of a 2017 mix. And in particular, this is of implied assumption that the gas price is going to be higher. I just wanted to - what sort of gas price underpins the assumption of 40% of coal generation in 2017? Thank you.

Yeah, well, we don’t necessarily talk about our specific gas price forecast. We do anticipate by 2017, there will be an upward trend in gas pricing over where gas prices are today and where the forecast are for 2015. So enough to make sure that Powder River Basin and Illinois Basins are clearly in the money and that’s what drives the increase over that period of time.

Okay. And then I’d like to congratulate Glenn and also ask about Goonyella. You spoke about the 100% increase in production there. What do you think the new run rate is going to be from Goonyella, what the top caving?

Well, when you look at the historical run rate in North Goonyella, I think we had anticipated that we were going to get an extra 500,000 tons a year out of North Goonyella for that total run rate. So, I think we were - that that was the guidance we gave at the time. And I think everything we see right now is going to fall right in the place. I would also add that we’ve closed the Eaglefield Mine, depleted the resource, which was also feeding the prep plant at North Goonyella and was always part of that complex. So net, net, there is going to be a slight increase long-term in the annual run rate at North Goonyella Mine, but the actual increase out of the prep plant will be lower than the total output from the mine.

Okay, that’s great color. Many thanks for that, congratulations and keep up the good work. Thank you.

And we’ll go to Justine Fisher with Goldman Sachs. Please go ahead.

Hi. Sorry, this is Justine. Can you guys hear me?

Yes

Yes, go ahead.

Great, sorry, thanks. The question that I had is actually on - obviously on the debt side and I’m not going to ask the question that I think everyone has been asking all the other coal companies which is, would you issued six year debt to help refinance upcoming unsecured maturities like your [indiscernible], but what I did want to ask is to confirm that your U.S. assets are currently unencumbered and the Australia fiscal assets are unencumbered in other words that only the equity in the Australia asset secures the revolver. And then as a follow-up, can you confirm what your secured debt issuance capacity as far as please?

Yes, on the security side on existing revolving credit facility in term loan B is secured by stock budgets on the non-U.S. side, so you’re correct. On the secured, when we move to the covenant, we’re at 3.5 times on a net secured debt basis. So that would be the limitation.

Of 3.5 times leverage like 3.5 times trailing...

Yes, but the covenant is 3.5 times net secured debt-to-EBITDA.

Okay, okay. And so the covenant does not have to do with some consolidated net tangible assets. Could I think we have looked at it and it seem to be a percent of the company’s consolidated net tangible assets. Is that superseded by the debt-to-EBITDA covenant?

Yes, I’m sorry, I’m talking totally about the covenant aspects of that as it relates to the bond indenture there is a 15% basket on consolidated net tangible assets.

Okay. And is that - I’m sorry, I’m sorry, just the last question. Is that an addition to the term loan that you have outstanding, so is that 15%, which I think is something like $2 billion maybe is that an addition to the existing secured debt or does that include the existing secured debt that you have?

The term loan B is approximately $1.2 billion and the basket would be independent of that.

Okay, fabulous. All right, thank you guys very much.

You’re welcome.

Our next question is from Evan Kurtz with Morgan Stanley. Please go ahead.

Hi, good morning everyone and congrats Glenn.

Thank you.

Just a quick question on asset sales. It seems like the market was loosening up a little bit towards the end of the last year, we will see what the appetite is for deals in 2015, but could you may be walk us through some of the maybe potential assets that you would look to sell and maybe give us a ballpark kind of range of what could be out there going forward?

Sure, I think as you saw throughout 2014, the focus for us in the current market conditions was where we could get away non-core, non-EBITDA generating assets - cost is that we thought were reasonable if we did so. If we do still see available market for that and we do continue to work through that, resource management activities on areas that we don’t believe are core to us. On top of that as we decided some markets had become challenging, but we do continue to work through and where at Mike since we would going to bite sales. But the primary focus to-date and what we’ve been able to get away has been around those resource management positions.

Got it. Okay, thanks. And then just may be a follow-up on Justine’s question. What is the time when do you think for - when you might go-to-market to do something about that 2016?

Yes, I think the maturity date on that is November of 2016, those bonds do contain a make hold provision. So there is an economic penalty associated with that. So that’s something we’ll continue to evaluate that the timing, that the cost of make holds, the market conditions and then once we make a decision on that I think we look to update the market at that time.

Got it, okay. Thanks.

Our next question from Matt Farwell with Imperial Capital. Please go ahead.

Hi, good morning. Just one more question on the current I guess taking it one step further. Do you have an estimate of what you’re securing current capacity is at this point?

We are - how much we could secure at this point?

Yes.

Which you’re asking.

But I don’t have enough made at this point. Okay and then just one other question related to your diesel, would you consider more aggressively locking in your fuel costs that these low prices?

Yes, particularly in the near-term that - something that, when we look at our hedging as I mentioned we do some all are problematic basis. But then we also have a strategic discussion and we will take up view from time-to-time. Given the pronounced decline here, I think it would be prudent to lock-up some of those currently in the near-term. So yes, that’s something that we are taking under consideration in terms of preserving that value for our 2015 results.

Do you expect that the lower fuel cost could translate into improved economics and market place Texas due to just lower transportation costs?

Yes, as we look at falling oil prices. We see a number of benefits outside just a lower costs and you’ve identified one of them to the extend that the fuel surcharges for the shipping of coal on the railroads is reduced, it lowers the rate at which coal is competitive into those markets and it allows it to travel a farther distance. But in reality, you also have to look at the significant catalyst that lower oil and therefore lower gasoline prices than fuel prices have on economic activity as we go forward through 2015 and 2016 if the entire oil space stays at a lower level. In addition, one of the things that we saw in the fourth quarter was much stronger rail performance than we would have anticipated and part of that was as soon as the oil price started to fall off as quickly as it did. We were seeing the railroads begin to move through equipment into the coal space in order to deploy that capacity. And then of course with lower unconventional oil production, we’re seeing lower associated gas production. So as you start to look at all of these on a go forward basis, net, net for Peabody falling oil prices and a sustained lower oil prices is a significant positive and a good catalyst for the medium and longer-term.

It sounds good. Well, thank you very much for taking my questions.

Next, we’ll go to Caleb Dorfman with Simmons & Company. Please go ahead.

Good morning.

Good morning.

And so I guess first off can you discuss the strategy that you’re going to be taking to the New Castle market following the massive deterioration in pricing. And does the shift in the strength of dollar take all your tonnage still be in the money and free cash flow positive - has consider at some point cutting some production going into the New Castle market?

New Castle market…

Yes, New Castle…

I mean, I think as you look at the New Castle market right now, it’s interesting that we’re seeing currently a fair disconnect between what you’re seeing in terms of screen trading and what you’re seeing in terms of physical transactions out of New Castle. Obviously, our big operation out of Wilpinjong is the lowest cost operation, thermal operation in Australia. So we continue to see strong deliveries out of Wilpinjong and we do a fair bit of blending with Wilpinjong and our Wambo operation, particularly with our longwall Wambo when it runs it is again in the lower quartile of production out of New South Wales. So we watch it pretty closely. We watch the total demand and you know the volumes have been strong and right now we’re starting to see the fiscal tightened versus what’s happening with the financial. So as Glenn indicated earlier, save, low cost, increased productivity continue to manage of those and those thermal products out of Newcastle and New South Wales will continue to be competitive.

Can you give us any idea of how much of premium you’re seeing in the fiscal market over the financial market right now? What should we think about for fiscal 2015 right?

Yes, its been about probably $5 to $7 in terms of the disconnect that you’ve seen between the very near prompt and then a little bit of aggregation as you go out a couple of months and of course the hope would be that the longer view moves up to meet that near term as time goes by.

That’s helpful. And then Greg, can you sort of discuss the board’s decision making process on the dividend and looking to add it on a quarterly basis and what sort of trigger that you looking at on a quarterly basis?

Well, I think as Mike explained in terms of talking about our decision to reduce the dividend. First and foremost, we’ve got a two year period here, where we’ve got a fairly high fixed cash requirements and over a third of that is due to couple of more LBA payments and couple of more these viva payments. As we look to where we stand, the board looks on a quarter-by-quarter basis and now on a bit of a forward basis in terms of where the market is, where the market metrics are, where the settlements are turning out. And so as we look at the first quarter, we looked at 2015, we thought it was prudent to go ahead and reduce the dividend and conserve that cash and the board will look at that on a quarterly basis as we always have with the dividend. We will look at cash forecast, we’ll look at movements in pricing obviously if we got - if we got nice movements in the markets which we generate a different cash flow perspective, the board would take that into consideration. But that was really as you look at fundamentally, we want to make sure during this two year period of time. Good news is we’ve got these large reserves from North Antelope Rochelle that will be done paying for in two years we just need to make sure that we get that done and that gives us about a seven year breathing room beyond that to where we’re not going to have any reserve or LBA payments. So the cash generation becomes pretty significant just about in any market condition at that point in time?

Thanks and congratulations on your transition.

Thank you.

Our next question is from Brandon Blossman with Tudor, Pickering, Holt & Company. Please go ahead.

Good morning gentleman.

Good morning.

Good morning

Good morning, Glenn. Let’s see - I guess one following up on a question Paul had earlier on Aussie cost and kind of the trajectory through 2014 and how that matches up with the 2015 guidance? And I guess you suggested that two longwall moves in Australia where at least part of the equation there. Could you at least - I guess with some precession talk about what the kind of order of magnitude of the cost of those two longwall moves would be relative to not having them at all?

Yes, I mean I think trying to dissect [indiscernible] finally is a bit difficult. I talked about 50% of that’s been around oil and FX, so that leaves you with the other 50%. You start to look at the normal inflation and then - that coupled with the impact of the cost of the longwall moves themselves as what we would look to offset with the cost containment activities. So that’s probably about as fine as I can go with it.

Yes, the other thing I would remind everybody is you know we’ve reduced our cost say a percent in 2014, so we are institutionalizing that lower cost and then guiding to a lower number beyond that. So this is a continuously lower cost to drive within that platform.

And [indiscernible] stopping there, so we still do believe there is some additional opportunities available to us that we continue to execute both across the Australian platform, the U.S. platform and we have touched on the things that we’re doing across the corporate activities as well, which will result eventually and a lower runway.

Fair enough and of coarse everybody just likes to see that. That that fourth quarter, very attractive fourth quarter number repeat at some point…

As would we have, dual prong stretch targets...

Fair enough, all right. And then on Australia on the revenue side of the equation, can you give the fourth quarter breakout for seaborne thermal volumes and pricing, not the full year, but just the fourth quarter numbers and then any directional or commentary on what that looks like relative to full year 2015 and then what’s embedded in the first quarter again just directionally first quarter seaborne thermal pricing?

Well the net volume in the four quarter was about - it was 5 million tons. So and I believe we have the - and I’m just looking forward as we speak. So the price for the met coal in the fourth quarter was about $88 as far as 5 million tons and the price for thermal was about $66 per ton.

Okay, that’s helpful. And then again directionally relative to Q1 and full year 2015, well, how should we think about that thermal pricing?

Well, you’re clearly seeing a bit of softness on the New Castle price for that seaborne business relative to what you would have had for the Japanese fiscal year in 2014 that business which would have been signed April 1. You’ve seen some decline in that price as the year advance. So you’ll see that reflected certainly in the Q1 pricing relative to Q4 and that in fact you saw incorporated in our guidance for Q1 relative to Q4 for EBITDA.

All right, thanks guys.

And we will go to Neil Mehta with Goldman Sachs. Please go ahead.

Good morning.

Good morning Neil.

Good morning Neil.

Many congratulations on the transition Greg and Glenn. On the PRB, two easy questions here. First is on rail congestion and any update there in terms of whether you’re seeing a pickup in traffic? And the other is on coil to gas switching points as you think about PRB, where do you think that that level is on a GAAP parity basis. Is it around where we are now or is it lower. And I will leave it there.

Yes, maybe with respect to the rail performance, we did see quarter - degree of improvement in that fourth quarter and it was the best period of the year. I think we still continue to see that as we roll forward through into January and it’s been well publicized the improvements and focus that the rail had in this area in addition to what the team would outlined in terms of what we expect to see a positive impact of reductions in oil and gas prices. We typically look with respect to competitiveness - PRB continuing to remain strong and competitive around about that $2.50 to $2.75 mark. And so that’s what we would see going forward.

Okay, thanks Glenn.

And due to the time, we’ll take one more question that will be from Jeremy Sussman with Clarkson Capital. Please go ahead.

Yes, hello, good morning. And Greg I’ve enjoyed working with you over the years. So congratulations and Glenn look forward to working with you as well.

Thanks Jeremy.

Thank you.

In terms of - just a quick question. In terms of if we assume spot AUD at $0.79 can you give us a sense of how much uplift you could see in both 2015 and 2016 maybe using your - I guess implied all the cost guidance of about $66 a ton as sort of the base?

With the - and what we’re doing, the numbers that I’ve provided both for 2015 and 2016 are based upon the current quarter. So it takes a new account, our hedge position the average price at that hedge position and then the current forward for the unhedged position. So again for 2015 with our 2% to 4% decline in cost guidance about half of that relates to, few on foreign exchange. As you look forward into 2016 with a hedge percentages in the low 40% range that looks at about $215 million benefit over the past six months giving the decline in forward rates.

Okay, so just to be clear, so if the current sales where is that you could receive - you would receive about an additional $250 million benefit in 2016?

That is correct.

Okay.

And that’s [indiscernible] foreign exchange both for Australia.

Okay, and is that safe to say that foreign exchange is much larger portion of that?

Absolutely.

Okay. Great, well that’s all I have. Congratulations and thanks very much.

And Mr. Kellow I’ll turn it back to you for any closing comments.

Thank you, operator, and thanks for everyone for joining our call today. The industry still has a number of obstacles to overcome but as we’ve seen in the past markets can move rapidly leading to exaggerated under performance during mark of weakness and significant out performance in up cycles. Peabody has and continues to take aggressive action to come back the market downturn, and we have our diverse global platform build to ensure even the most challenging cycles. We appreciate your interest in BTU and we look forward to updating you on our progress as the year proceeds. Thank you.

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