Good day, and welcome to Peabody Q1 2025 Earnings Conference Call. All participants will be in listen-only mode. Good day, and welcome to Peabody Q1 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Vic Svec. Please go ahead. Thank you, Operator, and good morning, all. Thank you for joining today to take part in Peabody's first quarter call. Remarks today will be from Peabody's President and CEO, Jim Grech, CFO, Mark Spurbeck, and Chief Marketing Officer, Malcolm Roberts. Following remarks, naturally, we will open up the call to questions. We do have some forward-looking information today, and you will find our statement on forward-looking info in the release. We do encourage you to consider the risk factors referenced here, as well as those in our public filings with the SEC. I will now turn the call over to Jim. Thanks, Vic, and good morning, everyone. It is clear that Peabody has had an excellent start to the year. The platform demonstrated two significant attributes that I will emphasize today. First, the balance and resiliency of our diversified global portfolio. Second, the ability of our team to manage to the market and control the controllables. I will summarize some of our highlights before turning this call over to Malcolm. First of all, our Peabody team did a great job of cost control in the first quarter, coming in below our expectations for both the seaborne thermal and met coal segments. Our U.S. thermal segments came in at the low end of our first quarter cost target range. Our ability to manage costs is a key driver of success at a time of cyclical market softness in the seaborne markets. Peabody also is on budget and ahead of schedule for the Centurion mine, with our ramp-up of production slated for early next year. I'll remind investors that this is an operation projected to have a low-cost structure and among the highest realizations in the steelmaking coal universe. Expect Centurion to garner the highest margins in the Peabody system over time. I was also privileged to take part in a White House event several weeks ago. There, the President signed executive orders to revitalize the U.S. coal industry and expand the use of coal-fired generation. The orders are intended to halt a premature and ill-advised retirement of coal generation. This comes at a time of rising electricity demand and concerns around generation to serve growing U.S. load for data centers, AI, and a return of American manufacturing. This occurs against a backdrop where coal plant retirements have been receding, and the lifespans of U.S. coal plants continue to be extended. Last quarter, I quoted the coal plant retirements that were deferred at 26 GW. The National Mining Association now tallies 35 GW of deferrals. That is on a total install base of 172 GW. In 2024, the existing coal fleet only ran at 42% utilization compared with 72% at their historic levels. Coal plants can shoulder a heavier load of meeting U.S. generation demands, including multiple years of data center growth. That is why our position is aligned with the administrations. We believe that all coal-powered generators need to defer U.S. coal plant retirements, as the situation on the ground has clearly changed. We believe generators should unretire coal plants that have recently been mothballed. We believe the existing fleet can and should run at much higher utilization levels than it has. On the last point, the U.S. generating fleet has clearly run at higher capacity factors since the first of the year, with coal fuel generation up a stunning 20% over the prior year. It is clear that coal took market share from higher-priced natural gas and other energy sources. Additionally, colder than average winter temperatures in early 2025 led to increased heating demands, elevating coal consumption. I will note that no sooner was the ink dry on the executive orders than we received a call from a utility that we currently provide coal to. They were asking about our ability to supply coal on an extended basis for a major power plant that was on the drawing board for early closure. Just a week later, closer to home, we signed an agreement with Associated Electric Cooperative to supply coal requirements for two plants in Missouri. This agreement is expected to total more than 50 million tons of our premium Powder River Basin coal. That would be 7 million-8 million tons per year for a minimum of seven years. I'll make a few points about this type of agreement. First of all, for those who continue to predict the demise of coal, we continue to see substantial U.S. coal demand many years into the future. Second, rural electric co-ops like Associated tend to be very close to their end customers. Their boards are often made up of ranchers, farmers, and business people who rely on abundant, reliable, and affordable power. Finally, Missouri faces some of the same new challenges of rising electricity demand that most states are grappling with. Missouri officials have raised alarms that they may not have the power to supply their expected load growth even before new data centers come to the state. We are aware of other Midwestern States that join some Coastal Regions in needing to turn away economic growth opportunities since they cannot promise the reliable power supply needed to meet this potential new demand. That simply should not be happening in the United States in 2025. It can be directly linked to the short-sighted rush in some states to replace reliable and affordable power sources with weather-dependent, heavily subsidized intermittent power sources. I will note that we are also seeing multiple states pass legislation this year that bolsters coal-fueled electricity. These laws often require that any existing power generation replacements be online before coal plants potentially retire. They also mandate that these energy forms be reliably dispatchable. That's something that weather-dependent intermittent power sources such as wind and solar, for all our benefits, lack. As the largest U.S. coal supplier, it's worth noting that it has been some time since we've seen policy trends and supply-demand fundamentals both move in the right direction. These are exactly the current market dynamics. That's a brief summary of highlights from recent months. I'll now turn to an update on Peabody's acquisition of premium steelmaking coal mines in Australia from Anglo American. Yesterday, we notified Anglo American of a material adverse change that impacted Peabody's planned acquisition of the steelmaking coal assets from Anglo American. The material adverse change notice relates to issues involving the Moranbah North mine, which, as you may know, remains inactive following what was described as a gas ignition event in March. While we have been nearing completion of the steps necessary to complete the acquisition, the issues at Moranbah North have created significant uncertainty around the acquisition. A substantial share of the acquisition value was associated with Moranbah North. A number of facts have brought us now to our position that a material adverse change has occurred. I'll share several examples. First, standing here today, there is no known timetable for resuming longwall production. Second, we understand that workers had reentered the mine to conduct safety inspections only. Third, the Queensland Mining Union safety representative has stated in the media that he believes it will take a year or years to resume longwall production. Fourth, in conjunction with this incident, the Queensland government has called for a sweeping review into coal mining safety, which we expect could further delay a return to mining. Peabody's own experience is that recovery from mine ignitions can take longer, oftentimes much longer, than originally contemplated. Under the company's acquisition agreements, if the material adverse change notice is not resolved to Peabody's satisfaction and done so in a limited timeframe specified in the agreements, Peabody may elect to terminate the agreements. We obviously will keep the market apprised of major developments here. Malcolm, I'll now turn the call over to you to discuss global market fundamentals in more detail. Thanks, Jim. I'll add a few details to your comments regarding U.S. dynamics before turning to seaborne markets. There's no question that the strong start to U.S. generation has drawn down stockpiles of both mines and customers. We estimate that U.S. generator inventories have declined by more than 25% on a day's burn basis since the beginning of the year. Elevated natural gas prices and the intermittent nature of renewables left a strong opening for U.S. coal burn to increase, and it did. For the full year, the EIA is projecting coal generation to increase 5%, while U.S. coal production declined 6%, which is a strong market fundamental as the year progresses. Year to date, we have seen good interest in increased volumes, as well as near maximums being taken under requirements contracts where we agree to supply all the coal a plant may need. Turning to seaborne thermal coal, thermal coal markets have been well supplied following a weak winter in Asia that both trimmed back demand and provided a backdrop for production. As a result, thermal coal prices reached four-year lows in March. At sub-$100 thermal coal prices for high-energy products, we've begun to see some production rationalization that can only be expected to accelerate the longer that thermal coal prices remain around current levels. The demand story for thermal coal remains intact, with 600 GW of coal-fueled generation under construction or in various stages of development, most of which is in Asia. For every coal plant retired in the U.S. over the last decade, more than three plants have switched on in China and India. Within seaborne metallurgical coal markets, the beginning of the year has been weak, as China has continued to increase steel exports and experience soft domestic demand. When reviewing current met pricing, one true axiom is that one cannot predict future prices. As we look through past cycles, there are certain elements that need to be in place before a market improvement. We see many of those elements today. The average five-year benchmark price is $80 above mark spot levels and at our lowest mark in nearly four years. We estimate that more than 100 million metric tons of seaborne met coal production are underwater at mark spot prices, representing some 30% of total seaborne met coal supply. This suggests supply will come out of the market and support a recovery in prices. Almost on cue, we've seen prices rebound modestly from the March low, and we'll see what traction that gains. We do note that supply has begun to look increasingly challenged, with economics, wet weather in supply regions, and unscheduled production outages all combining to result in a much tighter market where we sit today than where the market was at the end of March. It has been our view that the second half will be stronger, with blast furnaces in India coming online. We continue to see India taking over the growth in global metallurgical coal demand in coming years. Finally, a word on tariffs. While the ultimate impact of tariffs may be most felt in an easing of global GDP, we remain optimistic this will be a temporary phenomenon. I would like to point out that China and tariffs have proven to be an immaterial issue for Peabody, as less than 0.5% of Peabody's volumes were flowing from the U.S. to China. This small volume is now being placed in other markets. Of course, we import no coal into the U.S. That's a brief review of coal market dynamics. I'll now turn over to Mark. Thanks, Malcolm, and good morning. I would like to echo Jim's comments on our strong start to the year and add a bit more insight on the financial results. In the first quarter, we recorded net income attributable to common stockholders of $34 million, or $0.27 per diluted share, and adjusted EBITDA of $144 million. Amid challenging market conditions, Peabody's diversified global coal portfolio and strong balance sheet continued to deliver value for shareholders. Favorable cost performance across all segments and better-than-anticipated volume from the seaborne thermal platform drove strong EBITDA results. We generated $30 million in free cash flow, net of $47 million of continued development at Centurion. From a balance sheet perspective, at March 31, we held nearly $700 million of cash and had over $1 billion of liquidity. Our reclamation obligations remain fully funded, and we continued our cash-positive net debt position. We again declared a $0.075 per share dividend. Let's now review segment results. The seaborne thermal segment recorded $84 million of adjusted EBITDA and 32% margins. Wilpinjong exceeded production forecasts, exporting an additional 400,000 tons, and the segment achieved average cost per ton $6 below first-quarter guidance. The seaborne thermal platform continues to deliver high margins throughout the cycle. Over the last three years, adjusted EBITDA has outpaced capital expenditures by a 9 to 1 margin, driving nearly $1.5 billion in cash flow. The seaborne metallurgical segment reported $13 million of adjusted EBITDA. With lagging market conditions, we slowed the return from a longwall move at Shoal Creek and increased stockpiles, resulting in sales modestly below company targets. The team did a good job of reining in costs here as well, achieving $12 per ton better than expected. The U.S. t hermal mines generated $69 million of adjusted EBITDA in the first quarter. This business epitomizes stable cash flows and low capital reinvestment. 2025 business is fully contracted at planned production levels, and meaningful pieces of 2026 and 2027 are already in the books. The PRB mines exceeded expectations for the quarter by shipping 19.6 million tons, given the sharp increase in coal fuel generation that Jim noted. With the strong start to 2025, the company anticipates increasing demand throughout the year. PRB costs are at the low end of expectations, and the segment generated $36 million of adjusted EBITDA. The other U.S. thermal mines delivered $33 million of adjusted EBITDA. Sales were modestly less than expected as the company replenished stockpiles following a long-haul move at 20-m ile. Compared to the previous quarter, costs per ton were down 6% and at the low end of company expectations. Looking ahead to the second quarter, seaborne thermal volumes are expected to be 4 million tons, including 2.5 million export tons, 800,000 of which are priced on average at $77 per ton, while 1 million tons of Newcastle product and 700,000 tons of high-ash product are unpriced. Costs per ton are expected to be between $45-$50 per ton, more in line with full-year guidance after first quarter's outstanding performance. Seaborne met volumes are expected to be 2.2 million tons, a significant increase from Q1 results as both Shoal Creek and the Coppabella Moorvale Joint Venture returned to full-year production run rates. Costs are expected to be between $120-$130 per ton as we have a long-haul move at Metropolitan and we continue to reconfigure Coppabella for long-term success. In the PRB, we expect to ship 19 million tons, slightly lower than last quarter as we enter the traditional shoulder season. Costs are expected to be up modestly for the quarter in the range of $12.50-$13 per ton due to lower anticipated shipments. The other U.S. thermal coal shipments are expected to increase over the first quarter to 3.3 million tons as 20-mile returns to normal production levels. Costs are anticipated to be between $41-$45 per ton, a little better than the first quarter on higher anticipated volume. In summary, we delivered a strong first quarter, remained laser-focused on cost containment in a soft price environment, and achieved development rates ahead of plan at Centurion. Together with the second quarter, we expect to be right on plan through the first half of 2025 and positioned for an even stronger second half of the year. Jim, I'll now turn the call back to you. Thanks, Mark. I'll conclude by saying I trust what you have seen here today is what I see every day when I look at Peabody, a management team that has delivered and is committed to delivering strong results across all cycles, a business that is very well situated against the macro trends moving through the system, a portfolio that is well positioned and improving in its ability to maximize margins and generate substantial cash flows, and a leader in our industry with our large-scale, broad diversification, superior quality product mix, and long-lived asset base that will be working to create increasing shareholder value for decades to come. In total, a company I'm extremely proud to be part of and one you can be proud to be associated with. Operator, we can now open up the line to questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Nick Giles from B. Riley Securities. Please go ahead. Thank you, Operator. Good morning, everyone. Guys, I first wanted to say nice job on the quarter here. My first question, with yesterday's announcement of your notification of a MAC related to Moranbah North, you mentioned a few factors that you believe constitute a MAC, and I was curious if you could outline what the process could look like from here. I can appreciate these things take longer. Is there a view that the mine could be at risk of being permanently sealed, or is it a matter of taking longer than currently outlined? Thank you very much. Hey, Nick. Thanks for joining us on the call. As you said, we got off to a really good start for the year. I'm very proud of what the company has accomplished in the first quarter and setting us up for the rest of the year. I think you asked two different questions there. One is on the timing, and then I think the second was about the MAC itself and what constitutes it. On the first one, on the timing, there is a 10-day period which Anglo American has to formally respond back to us on the MAC itself and how they intend to go forward. After that, it could be up to 90 days or less to work through a cure period. It sort of sets the boundaries there of where we're at on timing, and there's quite a few variables in there that could affect the 90 days to make it a shorter period, but that would be the outermost length of time to try to agree on some type of cure. On your other question on the MAC itself, I will say that I cited some variables in my comments, and we are under NDA, so there's only so much information that we can put out there. I will say, though, that we have employed quite a few technical experts, consultants, plus our own internal team, and we went through a very rigorous analysis of the situation and its potential impacts, and we view them to have the potential to be very, very significant. In elaborating on the comments that I made just a few moments ago, as we stand here today, there is no known timetable for resuming longwall production sustainably. That is just not known. It is not even known if the current longwall will ever run again. That is not known at this point in time. Our own experience has been from mine ignitions. The timelines can take long or even longer than you anticipated, and our experience, unfortunately, had us sealing in a longwall. We also understand, as I noted, that the workers have not yet reentered the mine to do any production work, only to do inspections. We are getting on 40 days here now where no work other than inspections, no production work has been done in that mine. To have a timeline that says from when the ignition occurred to a longwall running sustainably in three to four months, to us, does not seem reasonable and is, again, part of the data that we've used in analysis to do the MAC. The last point I'd like to make there, Nick, is the Queensland Mining Union safety representative has stated in the media that he believes it will take a year or years to resume longwall production. Again, based on a lot of data that we didn't cover and the facts that I've just talked about and a very rigorous technical analysis and economic analysis, we feel very comfortable with the MAC notice that we've given to Anglo American. Jim, I really appreciate all those comments. This is very helpful. Assuming that a MAC has in fact been triggered, you did note in the release yesterday that Peabody may elect to terminate the agreement if the MAC is not resolved. Maybe just a clarifying question on your comments there, should we assume that this resolution would be not only a resumption of longwall mining but a sustained longwall mining? To you, what does that look like? Would there be a target level of production in mind? Any more color around that would be helpful. Hey, Nick. I'm not going to get into too many details here. I don't want to get into negotiations on our earnings call, but I'll just say that we need to see a sustainable long-haul production, a long-haul that is up and running well for a period of time. I'd just like to leave it at that, and we'll see where that takes us, if anywhere, in future discussions. Hey, fair enough. And one more, if I could. I mean, how should we think about the permanent financing process as these issues at Moranbah North play out? Should we assume those discussions are on hold or any color you could share around that? Good morning, Nick. It's Mark. Yeah, with regard to financing, we had kicked off our marketing and, well, across nearly 50 firms, very strong interest in underwriting the transaction, large support. Unfortunately, when we were scheduled to kick off our management discussions and meetings with these investors, the event happened the very same day. We held those conversations, but it's clear now that with all of the uncertainty around Moranbah North and, as Jim mentioned, this most significant piece of the transaction, investors, much like us, aren't willing to underwrite that uncertainty. Until further clarity is noted, our financing is on hold. Guys, again, I really appreciate all the comments, so continued best of luck. Thanks, Nick. Thank you. Your next question comes from Chris LaFemina from Jefferies. Please go ahead. Hey, guys. Thanks for taking my questions. I have a few questions related to the Anglo American deal. The first is just on the MAC itself. I mean, Moranbah North has a history of gas-related safety stoppages, and Anglo had always talked about the risks in the mine. It had ground instability issues and, again, high levels of gas, and they've had incidents in the past. Obviously, this one seems to be a little bit more severe, but it's not really that inconsistent with what we've seen historically in this asset. The first question is, what's different about this event that makes it a materialized risk change versus what we've seen historically in this mine? Chris, again, I'm not going to start getting into past events versus this event. I'm just going to comment on our belief under our agreements with Anglo that this constitutes a MAC from where we sit today. Again, on the points I just made in responding to Nick, we feel very, very confident in our approach and the claim that we've made based on the data that we've done with this incident. Okay. Thanks. Then secondly, on timing, so Anglo American has a 90-day response period to present a MAC cure. If to your satisfaction, obviously, the deal can still go forward, and if it's not, if we assume that there's some progress, what has to happen for the long-stop date extension to kick in? I mean, I think there's two different extension options, which can actually take us to early next year or middle of next year. Obviously, the more time that we have, the more likely it is this mine can actually come back online. Do you have to agree with the request for a long-stop extension in order for that to actually happen, or does Anglo have to prove that there's progress and there's an arbitrator that decides on that? How does that all work? Chris, you got a lot of questions or a lot of different points in there. Again, for the process that we have here with the MAC, they have 10 days to respond how they wish to go forward or not. If we're going to try to cure, it could be up to 90 days to work through that process. I'll just state again, we have to be satisfied with the cure to accept it. If not, we do have the option to proceed with the termination. The long-stop date and what you're talking about, I think, has to—again, not trying to get into this too much, but I think that's referring to just the closing process of the sale, and that's a different process. Do not get the two of them intertwined with each other. Okay. Got it. Finally, just in terms of different possibilities here, I mean, if we assume that this mine comes back online, the deal will close. If the mine is permanent, I would think would trigger clearly a MAC. What if there is kind of a scenario where there is a timeline, but the timeline is relatively long? Would you consider various different structures around the deal? For example, in the initial transaction, you have these contingent deferred payments on a Grosvenor restart. Is that the kind of thing you consider for Moranbah North as well? I mean, is it really around structure and price, and you still want to get the deal done if you are confident that this mine can come back online, even if you do have the option to walk away from the deal because of the MAC? I'm not sure if I asked that question well. You asked it well, Chris, but I'm just not going to get into speculation on different structures, how this can be solved going forward. We'll get into those discussions with Anglo. I'm looking forward, hopefully, to getting into those constructive discussions with Anglo. I will just say that however we go forward, there just has to be a recognition that there is a significant value impact on Moranbah North because of this situation. Again, a pathway to sustainable longwall performance is a key thing that we'll be looking for. Got it. Thanks, guys. Good luck. Thanks, Chris. Thank you. Your next question comes from Katja Jancic from BMO Capital Markets. Please go ahead. Hi. Thank you for taking my questions. Maybe just one more quick one on the acquisition side. I think you mentioned that all financing is now on hold. Does that also include potentially selling any minority interest in the Centurion mine? Katja, there is no correlation or tie-in between the two processes. They would go forward or not completely independent of each other. They were not intertwined in any way, fashion, or means at all. Now, the Centurion process, we have been exploring and continue to explore a potential partial sale. We've had a very, very robust response to that, but we're still real early in the processes of deciding whether we want to proceed or not on that. It's still early days on that. Again, I'll make it very clear. There is no correlation between any potential sale of any aspect of Centurion and the Anglo American process. Okay. That's good. Thank you. Maybe focusing a little bit on the cost. Obviously, a very good quarter on the cost side. When I look at second quarter guide, can you talk about why we're going back to more annualized numbers? What are some of the puts and takes that really drove the first quarter cost down and that potentially are not repeating in second quarter? Good morning, Katja. Yeah, a couple of things to note. First quarter performance was absolutely outstanding, and I want to thank all of our mine general managers and operations leadership for really turning in a strong performance in first quarter. Laser-focused on costs, we saw a reduction in overtime shifts and contractors and improved productivity. Really off to a great start to 2025. When we look at volumes, volumes coming down in the second quarter in the PRB, quarter- over- quarter. I see the same thing in seaborne thermal. Seaborne met, we do see some volumes increasing quarter- over- quarter, but costs going up. There I'll remind you, as we talked last quarter, that we continue to reset Coppabella for long-term consistency and success. For the full year, we're going to move about an additional 6 million BCMs, which is expected to increase segment cost nearly $5 a ton for the full year. We got a good start to that in first quarter, but less than ratable. We are expecting more of that in the second quarter. You can see that right now, we're definitely trending toward the low end of some of those cost guidances for the year. I do see upside in Seaborne Met costs. I do see upside in Seaborne Thermal costs. As Jim noted, and I as well in the remarks, I see upside in PRB volumes going forward with strong demand and strong start to 2025. We have had a really good start to the year. We're one quarter into the year. We haven't changed our full-year guidance, but are definitely trending in the right direction. Thank you. You're welcome. Thank you. Your next question comes from Nathan Martin from The Benchmark Company. Please go ahead. Thanks, operator. Good morning, everyone. Congrats on the quarter. I'm going to come to the Shoal Creek mine for a second. You guys mentioned a slower restart of the longwall there due to market conditions. Is this just a lack of demand, low price, maybe a combination of both? I mean, with met costs in the first quarter well below guidance. Mark, you just highlighted some of the items there, even on fewer shipments. Did the delayed restart of Shoal Creek have anything to do with that? Did that help? How should we think about that mine going forward this year? Hi, Malcolm here. I'll let Mark talk to cost. Look, what we saw during the quarter for I think everyone in the U.S. saw this, but during March, it was a pretty bleak period looking to put product, particularly high-volume product, into the market. There was a lot of threats of retaliatory tariffs and the like. The spot market dropped on a short basis potentially for high-volume product very close to two figures. We were seeing others do deals at those types of levels, and we decided to hold some volume back. To give you an idea, we held back about 170,000 tons of sales we otherwise would have planned to have made. The market's recovered from there. T he China issue, people have rebalanced volumes and the like. We have got through that. It was prudent to hold off the restart of the longwall because we wanted to be sure that we had the product placed for the next quarter. You do not want to stop a longwall once you have started it. That was really what we did there. I think that may have helped costs, but Mark might be able to help me a little bit with that. Yeah, sure, Nate. Shoal Creek did not help improve costs in the first quarter. It actually probably impaired it a bit with the lower production, increased costs there. Shoal Creek is probably below our average cost for the full segment. So really, the first quarter performance was just outstanding productivity and cost management at the other mines. Okay. That's helpful. Just maybe a follow-up there. I mean, Blast, I think, high-volume index is around $176 a metric ton today. If we look at the net back there, Malcolm, what does that look like? Are you guys still making a margin? It sounds like you should, based on Mark's comment, that it's one of your lower-cost met mines. Yeah. Look, this will be the third quarter that I talk to this issue. And the issue is that there's a high-volume index, which is an FOB index, predominantly supplied into the Atlantic market. But the Atlantic market is pretty lackluster in demand at this time. You have really got to look at what the delivered price is into Asia. At the moment, the delivered price into Asia is somewhere between, say, $160 and $170. The freight on that is somewhere between $30-$35. That gives you an idea on a metric basis what the net back would be, FOB. A little way below the high-volume index would be how I see it. Okay. Appreciate that. Then shifting over to the seaborne thermal segment, obviously, strong quarter there in the first quarter, 4.4 million tons of sales above your original guidance. It is like 2Q guidance is 4 million tons. That puts you guys at, what, 8.4 million tons in the first half, which we annualize is well above the high end of full-year guidance. Maybe talk to us a little bit about what is expected in the second half. Is there something that is going to weigh on shipments, or could we be positioned to maybe improve on that full-year guidance range? Nate, a couple of things. First, remember that the Wambo Underground mine is coming offline mid-year, end of production there. We will not see any production in the second half of the year from the Wambo Underground for that segment. I would also say Wilpinjong had a very, very strong first quarter. We noted an additional 400,000 tons above expectations. That will not repeat itself. Pull that out, and you are looking at lower production for Wilpinjong in the second half of the year as well. Got it. Mark, thanks for that reminder. Maybe finally, Jim, you mentioned attending the signing of the executive orders and supporting U.S. coal production and coal-fired power generation. You called out a couple of items, but maybe it'd be great to get some additional thoughts on how you think some of these could impact your business, whether it's federal leasing or two-year waivers from met or any other potential changes. Thanks. Yeah, Nate. As far as leasing goes, that really does not have any impact on us. We have very strong leases, and we have decades and decades of reserves. If there are some decreases in royalties, which would be occurring, that would be certainly helpful to us. Our position is really strong in our leases out west or in the Midwest with the reserves we control as well. I think the most impactful, there are a lot of changes, a lot of regulations. It is sort of dizzying when you look at everything the EPA tried to do over the past years to damage coal-fired generation and to undo that. We can talk for hours about all of the things that have to be done. I will say that through the executive orders and the meetings that we've had with the EPA, with the DOE, and the DOI, they're focused on all of those items. If I had to give you one specific thing, Nate, it's the edict to not close down any more coal plants and to look at unretiring recently mothballed ones and giving that support so coal generators can feel comfortable to keep the plants open and to start contracting out for those plants. I give the one sort of example, and I'll say it's generic because we've had more than one of coal consumers contacting our marketing team to now start supplying them coal again or for longer terms when they thought those plants were going to be shut down. Of course, the associated contract, which we have been working on some time, as they are very committed to their coal generation and a long-term relationship with us, but to enter into that seven-year agreement for the substantial tons is what we're seeing is, again, much more interest to enter into term agreements. I'll tie both of those together as it relates to Peabody. If now, if you're a coal consumer and you want to make sure you have a reliable supply of coal for your plant for many years, you want to go to a low-cost producer or a producer that has reserves to back up these long-term commitments and our U.S. assets check all those boxes for our customers. Very helpful, Jim. I'll leave it there. Appreciate the time, gentlemen, and best of luck. Thank you, Nate. Thank you. Your next follow-up question comes from Nick Giles from B. Riley Securities. Please go ahead. Thank you for taking my follow-up. Nate asked it well, so I'll turn to the agreement with associated, which is nice to see. Maybe just to ask it in a different way, does this agreement change the way you're thinking about deploying capital in the PRB or at your other U.S. thermal mines? Is there any color around pricing and margin that you can provide? I'm not sure we've seen the agreement flow through to PRB spot prices, but obviously, this could be impacting duration. Appreciate any color. Yeah. Nick, I think Mark made the points, and we've made them at other times that our U.S. assets are very, very low capital for the amount of cash flow that they generate. We've always invested in them with the expectation that those mines are going to be running for the life of their reserves. We've never shortchanged the capital on them. That's part of the commitment we've made to our customers that while other coal companies may be wavering or coal generation plants may be looking to shut down, we're going to be here for you. You can count on us, and we're investing to be here for you. It doesn't change at all what we're doing with our capital investment or our maintenance because we've always been situating ourselves to be here for the long term and to have very good margins. I think the second part of your question, if I was trying to understand, Nick, were you asking specifically about the pricing mechanisms in the associated contract? Was that what you were asking about? Correct. Or just in general? Both. Both. Yeah. Nick, I just say that it gets into confidential nature of the contract. I'm not sure we're really free to be talking about the pricing mechanisms within that contract. If you want to talk about, yeah, I guess all I'll say on it is it's market-based. I'll just leave it at that if that's helpful, Nick. I won't go any further than that. If you're talking about the rest of our portfolio and the margins and the contracting, I think I'll just refer back to what we have in the guidance maybe as best to answer that because it's sort of a broad question, Nick. If there's something more specific, we'll be happy to follow up with you on that. Does that give you enough of what you're looking for? That's enough. I guess maybe asked in a different way. You're still generating a healthy margin in the PRB, and what should give us the confidence that we can underwrite a margin like this into the long term, especially as PRB volumes could decline? I think there's a few things. First off, you can look at our track record and our history, and you can look at the strength of our reserves. Our cost structure and what we've been specifically in the last six months to nine months, what we've done with our cost structures, I think you can expect to see that going forward. On the cost side, the basis of our reserves, how we've historically performed, I think should give you all the confidence in the world for that. Going forward, market prices are always a product of supply and demand. We have the best reserve position in the basin. We have the lowest cost reserve position in the basin. Whether other producers are here for the time that we can be here, I'll leave that up to somebody else to comment on. We feel very, very good about our position compared to other companies. The demand side for all the things we talked about has a lot of tailwinds behind it. At today's prices or stronger prices, our costs are going to be very predictable, and we feel very good about those margins. Jim, that's all very helpful. I agree that your competitive advantage in the PRB is underappreciated. If I could sneak in one more, nice to see Centurion ahead of schedule. Apologies if I missed it, but what was the spend towards Centurion in Q1, and what remains in 2025? Nick, I'll give that one over to Mark to respond to. Sure, Jim. In the first quarter, we spent $47 million toward the development of Centurion. When you're looking at the total to get that longwall into production in the southern district, there's about $150 million left. Got it. Thanks for sharing. All righty. Yeah, it's really quite an achievement. I think, Nick, a lot of people mis appreciate it as well that we've fully funded and self-financed the entire development of Centurion. When you include the acquisition as well, we've spent $540 million to date on that, all self-financed while still continuing to provide shareholder returns and dividends. Looking forward to getting that done. That thing should be in longwall production first quarter next year. Good to hear. Guys, thanks again for all the color. Best of luck. Thank you, Nick. Thank you, operator. Thank you, operator. Thank you to everyone for the time today. I also want to give recognition to our Peabody team and our continued focus on safe, low-cost, and environmentally responsible operations. We look forward to keeping you up to date on our progress as the year rolls on. Thank you. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.