The Company has seen significant adjustments in some of its core markets. In the U.S., weak demand for electricity combined with a plentiful supply of natural gas reduced natural gas prices to historically low levels. The share of power generation from coal dropped from 43 percent to 33 percent by April of 2012, reducing the demand for thermal coal in the U.S. by approximately 100 to 120 million tons. Natural gas has since risen above $3.50 per million BTU’s, and coal recovered its share back to 38 percent of power generation by September. The economics of power switching enable coal from the Powder River Basin to compete when natural gas prices rise above $2.50 and enable coal from the Illinois Basin to compete when natural gas prices rise above $3.00. However, thermal coal from Central Appalachia is not competitive until natural gas prices rise above $4.00 per million BTU’s and therefore it has the lowest prospect of recovering lost volume for power generation. This shift is reflected in the demand for coal-fueled power generation, with year-to-date generation from Central Appalachian coal down 40 percent while generation from the rest of the U.S. is down only 10 percent. Thermal coal volumes in Central Appalachia are expected to decline over time until it becomes primarily a metallurgical coal producing region. Volumes will continue to shift to the Illinois Basin and Powder River Basin. Cutting conditions and operating costs improve as production migrates west, and this will reduce the Company’s revenue potential per ton of production. Although some volumes can be recovered to provide further upside through time, the Company is planning for U.S. coal to be a structurally smaller and significantly dislocated market.The slowing of economic growth and industrial production in China has reduced the demand for thermal coal used in power generation. By the third calendar quarter, demand growth was almost flat with the prior year while domestic production continued to increase, and stockpiles rose to maximum levels at the domestic transfer port of Qinhuangdao. Domestic production was curtailed as prices dropped below $95 a tonne, creating a competitive advantage for seaborne coal. The reduced volumes of China domestic production have adversely affected demand for products from the Company’s IMM subsidiary. Domestic production has been further curtailed by holidays with respect to the regime change in China. Although the reduction in domestic production created support for imports, it was not enough to overcome the additional supply returning to the market from Australia and from U.S. producers looking for export markets. As a result, seaborne thermal coal has remained in surplus with prices depressed.