PITTSBURGH, April 28, 2015 /PRNewswire/ -- CONSOL Energy
Inc. (NYSE: CNX) reported net income of $79
million for the quarter, or $0.34 per diluted share. This compares to net
income of $116 million, or
$0.50 per diluted share from the
year-earlier quarter, which included a loss from discontinued
operations of $6 million.
After adjusting for certain one-time items, which are listed in
the EBITDA reconciliation table, the company had adjusted net
income1 in the 2015 first quarter of $85 million, or $0.37 per share. Adjusted EBITDA1 from
continuing operations was $266
million for the 2015 first quarter, compared to $310 million in the year-earlier quarter. Cash
flow from operations in the just-ended quarter was $228 million, as compared to $336 million in the year-earlier quarter.
CONSOL's E&P Division had another outstanding quarter by
achieving record production of 71.6 Bcfe, or an increase of 48%
from the 48.4 Bcfe produced in the year-earlier quarter. CONSOL
Energy's annual gas production guidance remains at 30% growth for
2015 and 20% for 2016.
Marcellus Shale production volumes in the 2015 first quarter
were 36.3 Bcfe, or 75% higher than the 20.7 Bcfe produced in the
2014 first quarter. Marcellus Shale costs were $2.62 per Mcfe in the just-ended quarter, which
is a $0.56 per Mcfe improvement from
the first quarter of 2014 costs of $3.18 per Mcfe. The company achieved all-in cash
costs of only $1.67 per Mcfe in the
Marcellus Shale, which continues to be the growth engine of the
company.
CONSOL Energy's Utica Shale production volumes in the 2015 first
quarter were 9.5 Bcfe, up from 1.2 Bcfe in the year-earlier
quarter. Utica Shale costs were $2.48
per Mcfe in the just-ended quarter, which is a substantial
improvement from the first quarter 2014. Rapidly increasing volumes
continued to contribute to lower unit costs. CONSOL expects its
Utica Shale program to expand due to the additional activity
currently underway in Greene and
Westmoreland counties,
Pennsylvania; Monroe County, Ohio; and Marshall County, West Virginia. These dry
Utica wells are expected to come
online in the second half of the year.
"Throughout the quarter we have continued to refine, and reduce,
our 2015 E&P budget, while high-grading our development plan to
maximize our rates of return in what continues to be a challenging
commodity price environment," commented Nicholas J. DeIuliis, president and CEO. "We
continue to focus on areas within our control: driving drilling and
completion efficiencies to lower capital and operating costs,
working with our service providers to better align terms with
current market conditions, and prudently maintaining a strong
balance sheet and liquidity position."
CONSOL's Coal Division produced 8.3 million tons in the 2015
first quarter. In the Virginia Operations, CONSOL's premier
Buchanan Mine, again, repeated another stellar cost performance.
Total costs at Buchanan Mine were $42.31 per ton sold in the just-ended quarter, or
a reduction of $24.10 per ton from
the year-earlier quarter. CONSOL's thermal coal marketing strategy
continues to see success by contracting additional volumes and
building a portfolio that targets power plants expected to not only
survive, but to also potentially increase their consumption of coal
despite a tightening regulatory environment.
"The playbook of yesterday's coal marketing era of bigger is
better, does not necessarily equate to success today, and CONSOL
has embraced this changing dynamic by concentrating our footprint
and strategically partnering with the power plants that will be
around for many years to come," commented Nicholas J. DeIuliis, president and CEO.
"Despite the prominence of shale gas growth and increasing gas
demand over the years, coal's market share may be declining, but
it's not going away. That said, the industry has clearly changed,
and it has changed permanently. CONSOL will continue to benefit by
strategically partnering with the must-run power plants that will
survive and run even harder as they make up capacity that is
scheduled to come offline."
CONSOL remains on-track to execute the previously announced
transactions for a thermal coal MLP and MetCo initial public
offering (IPO). The company recently filed a registration statement
on Form S-1 with the Securities and Exchange Commission for the
thermal coal MLP, which will be known as CNX Coal Resources LP
("CNXC"), and CONSOL continues to expect a mid-year 2015 IPO. The
company continues to expect the MetCo IPO to occur around early
fourth quarter 2015.
The first quarter earnings results included the following
pre-tax items related to recent transactions completed by the
company:
- Recorded a $67.7 million loss on
debt extinguishment; and
- Recorded an unrealized gain on commodity derivative instruments
of $60.0 million.
CONSOL remains vigilant on reducing costs and has embraced and
implemented zero-based budgeting across the company. As a result,
over the past two months, CONSOL has reduced approximately
$65 million of administrative and
overhead costs and nearly $85 million
of service costs related to the company's E&P capital, when
compared to 2014. CONSOL expects to reduce approximately
$80 million of E&P and coal
operating costs in 2015 based on the company's most recent
forecast, when compared to the company's earlier plan. CONSOL
expects these administrative and overhead and E&P and coal
operating costs reductions to carry into the future by continuing
to focus on zero-based budgeting, and the company expects the full
year benefit in 2016 to be greater than 2015.
Pre-tax income for the first quarter was $53 million. Adjusted pre-tax income1
in the first quarter was $61 million.
During the quarter, the effective tax rate of negative 47.9%
differed from the statutory federal rate of 35% on ordinary income
largely due to a benefit from the percentage depletion
deduction related to CONSOL's coal operations.
1 The terms "adjusted pre-tax income," "adjusted net
income," and "adjusted EBITDA" are non-GAAP financial measures,
which are defined and reconciled to the GAAP net income below,
under the caption "Non-GAAP Financial Measures."
E&P Division:
E&P First Quarter Summary:
The tables below summarize the quarterly comparison of key
metrics for the E&P Division. Production increased by 48% in
the just-ended quarter, when compared to the year-earlier quarter.
Despite increases to production, total quarterly sales revenue
decreased by $12.1 million for the
same period due to depressed commodity prices. As a result of
decreases to revenue, the E&P Division realized net income of
$30.9 million in the first quarter of
2015, compared to net income of $46.9
million in the year earlier quarter.
During the quarter, the E&P Division's capital expenditures
of $250.3 million helped the company
continue drilling and completion investments to achieve its
production growth targets. CONSOL's quarterly capital expenditures
were net of $27.9 million of drilling
carry from its joint venture partner in the Marcellus Shale and
$18.6 million of carry from its joint
venture partner in the Utica Shale.
During the quarter, CONSOL narrowed its Marcellus development
plan primarily to Greene,
Washington and Allegheny counties in Pennsylvania; wet Utica development to Noble County, Ohio; and dry Utica development to Monroe County, Ohio. Operations outside of
these areas of focus were initiated prior to the quarter. In the
Marcellus Shale, during the first quarter, CONSOL drilled fifteen
wells in Greene and Washington counties in Pennsylvania. CONSOL drilled eight wells at
the Pittsburgh International
Airport in Allegheny County, and
completion activity recently commenced. During the quarter, within
the Central Pennsylvania
sub-region, a two-well delineation pad was drilled and completed in
Jefferson County, and the company
expects sales to occur early in the second quarter. Eleven wells
were completed and twenty wells were turned in line (TIL) in
Greene and Washington counties. Included in the twenty
TILs in Greene and Washington counties were three Burkett wells
and one Rhinestreet well, illustrating one of CONSOL's many stacked
pay opportunities.
Dry Utica development
progressed nicely in the first quarter as CONSOL drilled its second
and third dry Utica wells in
Monroe County, Ohio, with the
fourth well underway. The Monroe County,
Ohio pad will total four dry Utica wells and one wet Marcellus well. Also,
CONSOL is currently drilling a single dry Utica well in Westmoreland County, Pennsylvania, which along
with the four Monroe County wells,
is scheduled for completion operations in the second quarter.
CONSOL expects gas sales from the dry Utica wells in Westmoreland County, Pennsylvania and
Monroe County, Ohio, in the third
and fourth quarters, respectively. During the second quarter,
CONSOL plans to drill a single dry Utica well in Greene
County, Pennsylvania. In Marshall
County, West Virginia, CONSOL's joint venture partner
drilled a dry Utica well on a
seven-well Marcellus pad. This well is scheduled for completion
activity in the third quarter and will be TIL late in the quarter,
or early fourth quarter, depending on pipeline availability. In
Noble County, Ohio, CONSOL drilled
and TIL one and four wet Utica
wells, respectively, and continues to see excellent results. At the
end of the first quarter, CONSOL had zero operated shale wells
waiting on pipeline, demonstrating operational efficiency, and the
company has twenty-nine wells that are drilled, cased, rig released
and waiting on completion activity. The company has plans in place
to selectively complete pads with the highest returns to optimize
net income.
CONSOL's non-operated activity included completing seven wells
in the highly productive Shirley-Pennsboro field of the West Virginia wet area. Within the area, some
pads are being partially completed in order to optimize capital
expenditure by aligning production and processing capacities with
wells being brought on-line. As commodity prices improve and
processing capacities are available, CONSOL expects a steady
inventory of drilled wells to draw upon to quickly increase
production.
The table below summarizes the quarterly comparison of key
metrics for the E&P Division:
|
E&P DIVISION
RESULTS — Quarter-to-Quarter Comparison
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
|
December 31,
2014
|
Sales -
Gas
|
|
$
|
196.5
|
|
|
$
|
265.1
|
|
|
$
|
204.9
|
|
Realized Hedging
Impact - Gas
|
|
30.1
|
|
|
(16.0)
|
|
|
24.2
|
|
Sales -
Oil
|
|
1.1
|
|
|
2.2
|
|
|
2.3
|
|
Sales -
NGLs
|
|
22.2
|
|
|
12.4
|
|
|
30.0
|
|
Sales -
Condensate
|
|
5.2
|
|
|
3.5
|
|
|
13.8
|
|
Total Sales Revenue
($ MM)
|
|
$
|
255.1
|
|
|
$
|
267.2
|
|
|
$
|
275.2
|
|
|
|
|
|
|
|
|
Net Income ($
MM)
|
|
$
|
30.9
|
|
|
$
|
46.9
|
|
|
$
|
36.5
|
|
Net Cash Provided By
Operating Activities ($ MM)
|
|
$
|
177.8
|
|
|
$
|
219.1
|
|
|
$
|
55.7
|
|
Total Period
Production (Bcfe)
|
|
71.6
|
|
|
48.4
|
|
|
70.5
|
|
Average Daily
Production (MMcfe)
|
|
795.7
|
|
|
537.8
|
|
|
766.6
|
|
Capital Expenditures
($ MM)
|
|
$
|
250.3
|
|
|
$
|
266.0
|
|
|
$
|
251.6
|
|
|
CONSOL's E&P division production in the quarter came from
the following categories:
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
March 31,
2015
|
|
March 31,
2014
|
|
% Increase/
(Decrease)
|
|
December 31,
2014
|
|
% Increase/
(Decrease)
|
GAS
|
|
|
|
|
|
|
|
|
|
|
Marcellus Sales
Volumes (Bcf)
|
|
31.6
|
|
|
19.2
|
|
|
64.6
|
%
|
|
31.1
|
|
|
1.6
|
%
|
Utica Sales Volumes
(Bcf)
|
|
6.2
|
|
|
0.8
|
|
|
675.0
|
%
|
|
4.1
|
|
|
51.2
|
%
|
CBM Sales Volumes
(Bcf)
|
|
18.9
|
|
|
19.8
|
|
|
(4.5)
|
%
|
|
20.0
|
|
|
(5.5)
|
%
|
Other Sales Volumes
(Bcf)
|
|
6.8
|
|
|
6.6
|
|
|
3.0
|
%
|
|
6.8
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS*
|
|
|
|
|
|
|
|
|
|
|
NGLs Sales Volumes
(Bcfe)
|
|
6.5
|
|
|
1.6
|
|
|
306.3
|
%
|
|
6.7
|
|
|
(3.0)
|
%
|
Oil Sales Volumes
(Bcfe)
|
|
0.1
|
|
|
0.1
|
|
|
—
|
%
|
|
0.2
|
|
|
(50.0)
|
%
|
Condensate Sales
Volumes (Bcfe)
|
|
1.5
|
|
|
0.3
|
|
|
400.0
|
%
|
|
1.6
|
|
|
(6.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
71.6
|
|
|
48.4
|
|
|
47.9
|
%
|
|
70.5
|
|
|
1.6
|
%
|
|
Production results are net of royalties. *NGLs, Oil, and
Condensate are converted to Mcfe at the rate of one barrel equals
six Mcf based upon the approximate relative energy content of oil
and natural gas.
Liquids production of 8.1 Bcfe, as a percentage of the total of
71.6 Bcfe, was approximately 11% in the just-ended quarter.
|
E&P PRICE AND
COST DATA PER MCFE — Quarter-to-Quarter Comparison:
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
(Per Mcfe)
|
|
March 31,
2015
|
|
March 31,
2014
|
|
December 31,
2014
|
Average Sales Price -
Gas
|
|
$
|
3.10
|
|
|
$
|
5.71
|
|
|
$
|
3.31
|
|
Realized Hedging
Impact - Gas
|
|
$
|
0.48
|
|
|
$
|
(0.34)
|
|
|
$
|
0.39
|
|
Average Sales Price -
Oil*
|
|
$
|
7.97
|
|
|
$
|
15.03
|
|
|
$
|
13.47
|
|
Average Sales Price -
NGLs*
|
|
$
|
3.40
|
|
|
$
|
7.92
|
|
|
$
|
4.50
|
|
Average Sales Price -
Condensate*
|
|
$
|
3.47
|
|
|
$
|
11.72
|
|
|
$
|
8.08
|
|
|
|
|
|
|
|
|
Average Sales Price -
Total Company
|
|
$
|
3.56
|
|
|
$
|
5.52
|
|
|
$
|
3.90
|
|
Costs -
Production
|
|
|
|
|
|
|
Lifting
|
|
$
|
0.44
|
|
|
$
|
0.60
|
|
|
$
|
0.46
|
|
Ad Valorem, Severance
and Other Taxes
|
|
0.13
|
|
|
0.21
|
|
|
0.15
|
|
DD&A
|
|
1.06
|
|
|
1.31
|
|
|
1.12
|
|
Total Production
Costs
|
|
$
|
1.63
|
|
|
$
|
2.12
|
|
|
$
|
1.73
|
|
Costs -
Gathering
|
|
|
|
|
|
|
Transportation
|
|
$
|
0.72
|
|
|
$
|
0.57
|
|
|
$
|
0.70
|
|
Operating
Costs
|
|
0.38
|
|
|
0.54
|
|
|
0.41
|
|
DD&A
|
|
0.12
|
|
|
0.16
|
|
|
0.12
|
|
Total Gathering
Costs
|
|
$
|
1.22
|
|
|
$
|
1.27
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
Gas Direct
Administrative Selling & Other
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
Total
Costs
|
|
$
|
3.05
|
|
|
$
|
3.63
|
|
|
$
|
3.19
|
|
|
|
|
|
|
|
|
Margin
|
|
$
|
0.51
|
|
|
$
|
1.89
|
|
|
$
|
0.71
|
|
|
*Oil, NGLs, and Condensate are converted to Mcfe at the rate
of one barrel equals six Mcf based upon the approximate relative
energy content of oil and natural gas, which is not indicative of
the relationship of oil, NGLs, condensate, and natural gas
prices.
Note: Costs − The line item "Gas Direct
Administrative, Selling, & Other" excludes general
administration, incentive compensation, and other corporate
expenses.
The average sales price per Mcfe within the E&P Division was
impaired in the just-ended quarter, when compared to the
year-earlier quarter due to the decline in commodity prices.
The average sales price of $3.56
per Mcfe, when combined with unit costs of $3.05 per Mcfe, resulted in a margin of
$0.51 per Mcfe. This was a decrease
when compared to the year-earlier quarter even though the
improvements in unit cost partially offset the decline in price
realizations.
Unit costs were improved in the just-ended quarter, as fixed
costs, such as direct administrative, were spread over higher
production volumes. Unit costs were also improved, as low-cost
Marcellus and Utica Shale production represented a higher
proportion of total production.
All-in unit costs in the Marcellus Shale were $2.62 per Mcfe in the just-ended quarter, or a
decrease of $0.56 from the
$3.18 per Mcfe in the year-earlier
quarter. The decrease in unit costs was primarily related to the
75% increase in total Marcellus sales volumes, including liquids,
during the just-ended quarter, compared to the year-earlier
quarter.
E&P Marketing, Transportation, and Processing
Update:
For the first quarter of 2015, CONSOL's average sales price for
natural gas, natural gas liquids, oil, and condensate
was $3.56 per Mcfe. CONSOL's average price for natural
gas was $3.10 per Mcf for the
quarter and, including hedging, was $3.58 per Mcf. During the quarter, CONSOL
produced NGL, oil, and condensate volumes of 8.1 Bcfe, or 11% of
the company's total gas equivalent volumes. These liquids volumes
were over four times greater than the year-earlier quarter, which
then comprised 4% of the company's total gas equivalent volumes.
The average realized price for all liquids for the first
quarter of 2015 was $20.95 per barrel.
CONSOL recently entered into an innovative sales agreement with
a major utility customer that allows for contractual volumes to be
either coal or natural gas depending on which one of CONSOL's
products is more cost-effective for the utility for a given month.
This agreement is an example of how CONSOL is using the strength of
its coal and natural gas assets to provide unique value to its
customers.
The company currently has a total of 1.1 Bcf per day of
available firm transportation capacity. This is composed of 0.8 Bcf
per day of firm capacity on existing pipelines and an additional
0.3 Bcf per day of long-term firm sales with major customers that
have their own firm capacity. Additionally, CONSOL has
contracted volumes of approximately 0.6 Bcf per day on several
pipeline projects that will be completed over the next several
years. Even with the future expiration of certain transportation
contracts, this will increase the company's effective firm
transportation capacity to approximately 1.7 Bcf per day. The
average demand cost for the existing firm capacity is approximately
$0.28 per MMBtu. The average demand
cost for the existing and committed firm capacity is approximately
$0.33 per MMBtu.
In addition to firm transportation capacity, CONSOL has
developed a processing portfolio to support the projected volumes
from its wet production areas. The company has agreements in
place to support the processing of approximately 0.3 Bcf per day of
gross natural gas volumes growing to approximately 0.4 Bcf per day
in the next twelve months.
Coal Division Results:
Coal Division First Quarter Summary:
During the first quarter, CONSOL's Coal Division produced 8.3
million tons, which was in-line with previous quarter's guidance of
8.0 - 8.5 million tons.
Total coal division unit costs were improved $1.80 per ton in the first quarter 2015, compared
to the same quarter 2014. The Bailey Mine produced 2.9 million tons
in the first quarter, compared to 3.1 million tons produced in the
year-earlier quarter. The Enlow Fork Mine produced 2.6 million tons
in the first quarter, compared to 3.1 million tons produced in the
year-earlier quarter. The Harvey Mine produced 1.0 million
tons in the first quarter, compared to 0.2 million tons produced in
the year-earlier quarter. Challenging geological conditions, lower
recovery rates, and lower tonnage at the Enlow Fork and Harvey
mines contributed to higher costs in the quarter for the
Pennsylvania Operations of $42.73 per
ton, when compared to $40.29 per ton
in the year-earlier quarter. CONSOL expects second quarter 2015
total unit costs to be modestly higher due to continuing geological
challenges, as well as scheduled longwall moves, which result in
lower forecasted tons. However, CONSOL expects the geological
conditions to improve in the second half of the year as the company
mines through these areas and moves into longwall panels with less
challenges, which should result in costs improving.
The Buchanan Mine continued to operate on a reduced schedule of
two shifts per day and produced 1.2 million tons during the first
quarter, compared to 1.1 million tons produced in the year-earlier
quarter. The reduced schedule allowed the Virginia Operations to
optimize its cost structure, which is reflected in much lower
all-in unit costs during the first quarter 2015 of $42.31 per ton, compared to $66.41 per ton in the year-earlier quarter.
Better utilization from previously completed efficiency projects,
which reduce travel time to the face of the longwall, are
continuing to help improve unit costs. The Buchanan Mine is able to
quickly ramp up to the full production capacity rate of 5.2 million
tons per year when market conditions warrant. CONSOL expects
Virginia Operations total unit costs to increase to the low
$50 per ton range due to lower
forecasted quarterly tons for the remainder of the year, compared
to the first quarter, and the company planning to bring back a
development section to the mine late in the second quarter, or
early third quarter.
The Miller Creek complex produced 0.6 million tons for the first
quarter, which is in-line when compared to the year-earlier
quarter.
During the quarter, CONSOL's active coal operations generated
$191 million of cash before capital
expenditures.
|
COAL DIVISION
RESULTS BY PRODUCT CATEGORY - Quarter-To-Quarter
Comparison
|
|
|
|
PA
Ops
|
|
PA
Ops
|
|
VA
Ops
|
|
VA
Ops
|
|
Other
|
|
Other
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Inventory
(millions of tons)
|
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
Coal Production
(millions of tons)
|
|
6.5
|
|
|
6.4
|
|
|
1.2
|
|
|
1.1
|
|
|
0.6
|
|
|
0.6
|
|
Ending Inventory
(millions of tons)
|
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
Sales - Company
Produced (millions of tons)
|
|
6.5
|
|
|
6.4
|
|
|
1.2
|
|
|
1.1
|
|
|
0.5
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Per
Ton
|
|
$
|
58.82
|
|
|
$
|
64.66
|
|
|
$
|
67.47
|
|
|
$
|
76.80
|
|
|
$
|
61.54
|
|
|
$
|
62.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Costs
Per Ton
|
|
$
|
33.08
|
|
|
$
|
31.20
|
|
|
$
|
30.37
|
|
|
$
|
51.77
|
|
|
$
|
45.19
|
|
|
$
|
49.22
|
|
Direct Administration
and Selling
|
|
0.98
|
|
|
1.16
|
|
|
0.93
|
|
|
1.50
|
|
|
0.88
|
|
|
1.23
|
|
Royalty/Production
Taxes Per Ton
|
|
2.18
|
|
|
2.85
|
|
|
3.92
|
|
|
4.57
|
|
|
5.14
|
|
|
5.38
|
|
DD&A Per
Ton
|
|
6.49
|
|
|
5.08
|
|
|
7.09
|
|
|
8.57
|
|
|
2.95
|
|
|
3.46
|
|
Total Production
Costs
|
|
$
|
42.73
|
|
|
$
|
40.29
|
|
|
$
|
42.31
|
|
|
$
|
66.41
|
|
|
$
|
54.16
|
|
|
$
|
59.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Margin Per
Ton Sold
|
|
$
|
16.09
|
|
|
$
|
24.37
|
|
|
$
|
25.16
|
|
|
$
|
10.39
|
|
|
$
|
7.38
|
|
|
$
|
3.61
|
|
Addback: DD&A Per
Ton
|
|
$
|
6.49
|
|
|
$
|
5.08
|
|
|
$
|
7.09
|
|
|
$
|
8.57
|
|
|
$
|
2.95
|
|
|
$
|
3.46
|
|
Average Margin Per
Ton, before DD&A
|
|
$
|
22.58
|
|
|
$
|
29.45
|
|
|
$
|
32.25
|
|
|
$
|
18.96
|
|
|
$
|
10.33
|
|
|
$
|
7.07
|
|
Cash Flow before Cap.
Ex and DD&A ($MM)
|
|
$
|
147
|
|
|
$
|
188
|
|
|
$
|
39
|
|
|
$
|
21
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
PA Ops includes Bailey, Enlow Fork, and Harvey mines. VA Ops
includes the Buchanan Mine. Other includes the Miller Creek
Complex. Sales and production tons exclude CONSOL Energy's portion
from equity affiliates. Total Operating Costs per Ton include items
such as labor and benefits, supplies, power, preparation costs,
project expenses, gas well plugging costs, subsidence costs,
permitting and compliance, asset retirement obligations and charges
for pension, retiree medical and other employee related long-term
liabilities. Direct Administration and Selling Per Ton include
items such as labor and benefits, marketing, and consulting. Sales
tons times Average Margin Per Ton, before DD&A is meant to
approximate the amount of cash generated for the PA Ops, VA Ops,
and Other coal categories. This cash generation will be offset by
maintenance of production (MOP) capital expenditures. Table may not
sum due to rounding.
Coal Marketing Update:
Pennsylvania Operations:
CONSOL's Pennsylvania
Operations had a strong first quarter for production, shipments,
and tons sold. While demand and pricing in spot markets remain
challenged, CONSOL's low cost operations allow the company to not
only participate in these short-term markets at positive margins,
but to also expand its customer base. Internationally, new
customers continue to test CONSOL coal, and domestically, the
company is steadily building a portfolio with targeted power plants
that CONSOL expects, will not only endure in future energy markets,
but also have the potential to increase their consumption of
coal.
During the quarter, CONSOL sold 6.5 million tons of coal to 39
different end users. CONSOL's customers continue to demonstrate a
steady demand for coal through term contracts that vary in length.
During the quarter, CONSOL contracted for 1.9 million additional
tons for 2015, bringing the total firm and priced contracted
position to 22.6 million tons, or 88% of estimated sales volumes
based on the midpoint of guidance. For 2016, CONSOL contracted for
1.1 million additional tons, bringing the total firm and priced
contracted position to 12.9 million tons, or 50% (and sold position
to 14.4 million tons, or 56%) of expected sales volumes based on
the midpoint of guidance. For 2017 and 2018 combined, CONSOL's
committed position is averaged at approximately 40% of expected
sales volumes.
Virginia Operations:
The Buchanan Mine continues to
demonstrate industry leading cost performance that allows the
operations to maintain positive margins in today's metallurgical
coal markets and expand its portfolio of customers. This positions
the mine to be the best suited domestic metallurgical coal
production facility to take advantage of markets when they
rebound.
In the first quarter, CONSOL sold 1.2 million tons of its
Buchanan low-vol coal, which
included a new sales opportunity to a significant metallurgical
coal end user in China. The new
opportunity in China, combined
with existing business from traditional customers, has enabled
CONSOL to exceed its production forecast at the Buchanan Mine in
the first quarter. During the quarter, CONSOL contracted for 0.7
million additional tons for 2015 and expects continued demand for
Buchanan coal throughout the year.
CONSOL expects to ship approximately 75% of Buchanan's production to customers in the US
and Atlantic Basin in 2015.
Other:
In the first quarter, CONSOL sold 0.5 million
tons of Miller Creek coal, which is flat compared to the
year-earlier quarter. CONSOL's total firm and priced contracted
position for 2015 and for 2016 remains the same at 1.9 million tons
for 2015, or 93% of estimated sales volumes based on the midpoint
of guidance, and 0.9 million tons for 2016, or 41% (and sold
position to 1.9 million tons, or 90%) of estimated sales volumes
based on the midpoint of guidance.
CONSOL also continues to benefit from its Western Allegheny
Energy joint venture, as well as working closely with our marketing
partner to explore global opportunities for new coal customers.
Additionally, CONSOL's wholly owned Baltimore Terminal had a
strong quarter by shipping 3.5 million net tons, which also
included third party tons.
E&P Division Guidance:
Second quarter 2015 gas production, net to CONSOL, is expected
to be approximately 71 – 75 Bcfe, while annual 2015 production
guidance remains between 300 – 310 Bcfe, or 30% growth compared to
2014 total production. CONSOL expects 2015 production to be more
back-end weighted throughout the year due to the turn in-line
schedule. CONSOL Energy continues to expect 2016 annual gas
production to grow by 20%.
Total hedged natural gas production in the 2015 second quarter
is 30.2 Bcf, at an average price of $4.05 per Mcf. The
annual gas hedge position for two years is shown in the table
below:
|
|
|
|
|
|
|
|
|
E&P DIVISION
GUIDANCE
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2016
|
|
|
|
|
Total Yearly
Production (Bcfe) / % growth
|
|
300-310
|
|
+20%
|
|
|
|
|
Volumes Hedged (Bcf),
as of 4/09/15
|
|
121.2*
|
|
110.9
|
|
|
|
|
Average Hedge Price
($/Mcf)
|
|
$4.05
|
|
$3.97
|
|
|
|
|
* Includes first
quarter 2015 actual settlements of 29.9 Bcf.
|
|
|
|
|
|
The hedged gas volumes shown in the previous table include the
following NYMEX hedges that have basis hedged as well.
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX PLUS BASIS
HEDGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2016
|
|
|
|
|
|
|
Columbia
(TCO)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bcf)
|
|
49.6
|
|
76.2
|
|
|
|
|
|
|
Average Hedge Price
($/Mcf)
|
|
$
|
3.84
|
|
$
|
3.69
|
|
|
|
|
|
|
Texas Eastern
(TETCO)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bcf)
|
|
3.5
|
|
-
|
|
|
|
|
|
|
Average Hedge Price
($/Mcf)
|
|
$
|
3.93
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal Division Guidance:
In the second quarter of 2015, Pennsylvania Operations sales
guidance is lower due to a number of planned non-productive days
resulting from longwall moves and miner vacation days. Also,
Virginia Operations sales guidance is slightly lower due to
scheduled shaft repair work.
|
|
|
|
|
|
|
COAL DIVISION
GUIDANCE
|
|
|
|
|
|
|
|
|
|
Q2
2015
|
|
2015
|
|
2016
|
|
|
|
Est. Total Coal
Sales
|
|
7.1 - 7.7
|
|
30.5 -
33.0
|
|
30.5 -
33.0
|
|
|
|
Tonnage:
Firm
|
|
6.7
|
|
26.8
|
|
14.5
|
|
|
|
Price: Sold
(firm)
|
|
$
|
59.86
|
|
$
|
61.07
|
|
$
|
61.22
|
|
|
|
Est. PA Operations
Sales
|
|
5.8 - 6.1
|
|
24.9 -
26.6
|
|
24.9 -
26.6
|
|
|
|
Tonnage:
Firm
|
|
5.6
|
|
22.6
|
|
12.9
|
|
|
|
Est. VA Operations
Sales
|
|
0.9 - 1.1
|
|
3.7 - 4.2
|
|
3.7 - 4.2
|
|
|
|
Tonnage:
Firm
|
|
0.6
|
|
2.3
|
|
0.8
|
|
|
|
Est. Other
Sales
|
|
0.4 - 0.5
|
|
1.9 - 2.2
|
|
1.9 - 2.2
|
|
|
|
Tonnage:
Firm
|
|
0.5
|
|
1.9
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: While most of the data in the table are single point
estimates, the inherent uncertainty of markets and mining
operations means that investors should consider a reasonable range
around these estimates. CONSOL has chosen not to forecast prices
for open tonnage due to ongoing customer negotiations. Firm tonnage
is tonnage that is both sold and priced, and for purposes of this
table, includes a price forecast when the contracted price is based
on power prices received by the customer. Firm tonnage excludes
collared tons and tons that are sold but not yet priced. There are
no collared tons in 2015. Collared tons in 2016 are 0.9 million
tons, with a ceiling of $61.46 per
ton and a floor of $57.54 per ton.
Not included in the table are the tons from Western Allegheny
Energy (WAE). WAE has 0.1 million tons for Q2 2015, and 0.5 million
tons and 0.5 million tons for all of 2015, and 2016,
respectively.
Liquidity and Credit Ratings:
As of March 31, 2015, CONSOL
Energy had $1.6 billion in total
liquidity, which is comprised of $5.3
million of cash, $1.0 billion
available to be borrowed under its $2.0
billion bank facility, and a $600
million term loan commitment. CONSOL's credit facility
had borrowings of $760.5 million and
outstanding letters of credit were $214.6
million. CONSOL maintained a strong total liquidity position
by obtaining a $600 million term loan
commitment as a backstop for the company's credit facility, which
will terminate upon the successful completion of the thermal coal
MLP IPO.
CONSOL remains on-track to keep its year-end 2015 leverage ratio
flat, when compared to year-end 2014. The Debt-to-Adjusted EBITDA
leverage ratio, less cash on hand, was 3.2x as of March 31, 2015, compared to 2.9x at December 31, 2014.
During the quarter, CONSOL Energy issued $500 million of 8% senior unsecured notes due in
2023, less $7 million of unamortized
bond discount, and tendered for $937.8
million of 8.25% senior unsecured notes due in 2020 and
$229.2 million of 6.375% senior
unsecured notes due in 2021. An additional $2.5 million of the 2020 notes and $0.2 million of the 2021 notes were tendered in
April as part of the final tender offers and consent solicitations
that commenced March 9, 2015. These
debt capital market transactions, along with borrowings on our
credit facility, reduce CONSOL's annual interest expense by
$37 million, modernize the covenant
package, extend our significant long-term debt maturities by three
years, and enable the company to optimize the allocation of our
indebtedness across CONSOL.
In conjunction with the notes offering, Moody's Investors
Service upgraded CONSOL Energy's rating outlook to stable from
negative and affirmed our corporate family rating of Ba3. Standard
& Poor's Ratings Services affirmed CONSOL's stable outlook and
corporate credit rating of BB.
About
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based producer of natural gas and
coal. The company is one of the largest independent natural gas
exploration, development and production companies, with operations
centered in the major shale formations of the Appalachian basin.
CONSOL Energy deploys an organic growth strategy focused on rapidly
developing its resource base. As of December
31, 2014, CONSOL Energy reported 6.8 trillion cubic feet
equivalent of proved natural gas reserves. The company's premium
coals are sold to electricity generators and steel makers, both
domestically and internationally. CONSOL Energy is a member of the
Standard & Poor's 500 Equity Index and the Fortune 500.
Additional information can be found at www.consolenergy.com.
Non-GAAP Financial Measures
Definition: EBIT is defined as earnings before deducting
net interest expense (interest expense less interest income) and
income taxes. EBITDA is defined as earnings before deducting
net interest expense (interest expense less interest income),
income taxes and depreciation, depletion and amortization.
Adjusted EBITDA is defined as EBITDA after adjusting for the
discrete items listed below. Although EBIT, EBITDA, and Adjusted
EBITDA are not measures of performance calculated in accordance
with generally accepted accounting principles, management believes
that it is useful to an investor in evaluating CONSOL Energy
because it is widely used to evaluate a company's operating
performance before debt expense and its cash or as a substitute for
measures of performance in accordance with generally accepted
accounting principles. In addition, because all companies do
not calculate EBIT, EBITDA, or Adjusted EBITDA identically, the
presentation here may not be comparable to similarly titled
measures of other companies.
Reconciliation of EBIT, EBITDA and Adjusted EBITDA to financial
net income attributable to CONSOL Energy Shareholders is as follows
(dollars in 000):
|
|
|
Three Months
Ended
|
|
|
March
31
|
|
|
2015
|
|
2014
|
Net Income
|
|
$
|
79,030
|
|
|
$
|
116,003
|
|
|
|
|
|
|
Less: Net Loss
Attributable to Discontinued Operations, net of tax
|
|
—
|
|
|
5,687
|
|
Add: Interest
Expense
|
|
55,122
|
|
|
50,931
|
|
Less: Interest
Income
|
|
(1,143)
|
|
|
(624)
|
|
Add: Income
Taxes
|
|
(25,603)
|
|
|
8,489
|
|
Earnings Before
Interest & Taxes (EBIT)
|
|
107,406
|
|
|
180,486
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
150,594
|
|
|
129,116
|
|
|
|
|
|
|
Earnings Before
Interest, Taxes and DD&A (EBITDA) from Continuing
Operations
|
|
258,000
|
|
|
309,602
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Loss on Debt
Extinguishment
|
|
67,734
|
|
|
—
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
|
(60,004)
|
|
|
—
|
|
Total Pre-tax
Adjustments
|
|
7,730
|
|
|
—
|
|
|
|
|
|
|
Adjusted Earnings
Before Interest, Taxes and DD&A (Adjusted EBITDA) from
Continuing Operations
|
|
$
|
265,730
|
|
|
$
|
309,602
|
|
|
Note: Income tax effect of Total Pre-tax Adjustments was
$1,778 and ($0) for the three months ended March 31, 2015 and March
31, 2014, respectively. Adjusted net income for the three
months ended March 31, 2015 is
calculated as GAAP net income of $79,030 plus total pre-tax adjustments of
$7,730, less the tax effect of
$1,778 equals $84,982.
Cautionary Statements
Various statements in this release, including those that express
a belief, expectation or intention, may be considered
forward-looking statements under federal securities laws including
Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act") that involve risks and uncertainties that could cause actual
results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The forward-looking
statements may include projections and estimates concerning the
timing and success of specific projects and our future production,
revenues, income and capital spending. When we use the words
"believe," "intend," "expect," "may," "should," "anticipate,"
"could," "estimate," "plan," "predict," "project," or their
negatives, or other similar expressions, the statements which
include those words are usually forward-looking statements. When we
describe strategy that involves risks or uncertainties, we are
making forward-looking statements. The forward-looking statements
in this press release, if any, speak only as of the date of this
press release; we disclaim any obligation to update these
statements. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. These risks, contingencies and
uncertainties relate to, among other matters, the following:
deterioration in economic conditions in any of the industries in
which our customers operate; an extended decline in prices we
receive for our gas, natural gas liquids and coal including the
impact on gas prices of our gas operations being concentrated in
Appalachia which has experienced a
dramatic increase in gas production and decline in gas pricing
relative to the benchmark Henry Hub prices; foreign currency
fluctuations affecting the competitiveness of our coal abroad; our
customers extending existing contracts or entering into new
long-term contracts for coal; our reliance on major customers; our
inability to collect payments from customers if their
creditworthiness declines; the disruption of rail, barge,
gathering, processing and transportation facilities and other
systems that deliver our gas and coal to market; a loss of our
competitive position because of the competitive nature of the gas
and coal industries, or a loss of our competitive position because
of overcapacity in these industries impairing our profitability;
coal users switching to other fuels in order to comply with various
environmental standards related to coal combustion emissions; the
impact of potential, as well as any adopted regulations relating to
greenhouse gas emissions on the demand for natural gas and coal ;
the risks inherent in gas and coal operations, including our
reliance upon third party contractors, being subject to unexpected
disruptions, including geological conditions, equipment failure,
timing of completion of significant construction or repair of
equipment, fires, explosions, accidents and weather conditions
which could impact financial results; decreases in the availability
of, or increases in, the price of commodities or capital equipment
used in our mining operations; obtaining and renewing governmental
permits and approvals for our natural gas and coal gas operations;
the effects of government regulation on the discharge into the
water or air, and the disposal and clean-up of, hazardous
substances and wastes generated during our natural gas and coal
operations; our ability to find adequate water sources for our use
in gas drilling, or our ability to dispose of water used or removed
from strata in connection with our gas operations at a reasonable
cost and within applicable environmental rules; the effects of
stringent federal and state employee health and safety regulations,
including the ability of regulators to shut down a mine; the
potential for liabilities arising from environmental contamination
or alleged environmental contamination in connection with our past
or current gas and coal operations; the effects of mine closing,
reclamation, gas well closing and certain other liabilities;
uncertainties in estimating our economically recoverable gas, oil
and coal reserves; defects may exist in our chain of title and we
may incur additional costs associated with perfecting title for gas
rights on some of our properties or failing to acquire these
additional rights we may have to reduce our estimated reserves; the
outcomes of various legal proceedings, which are more fully
described in our reports filed under the Exchange Act; increased
exposure to employee-related long-term liabilities; lump sum
payments made to retiring salaried employees pursuant to our
defined benefit pension plan exceeding total service and interest
cost in a plan year; replacing our natural gas and oil reserves,
which if not replaced, will cause our gas and oil reserves and
production to decline; acquisitions that we recently completed or
may make in the future including the accuracy of our assessment of
the acquired businesses and their risks, achieving any anticipated
synergies, integrating the acquisitions and unanticipated changes
that could affect assumptions we may have made and divestitures we
anticipate may not occur or produce anticipated proceeds; the terms
of our existing joint ventures restrict flexibility, actions taken
by the other party in our gas joint ventures may impact our
financial position and various circumstances could cause us not to
realize the benefits we anticipate receiving from these joint
ventures; risks associated with our debt; our hedging
activities may prevent us from benefiting from price increases and
may expose us to other risks; changes in federal or state income
tax laws, particularly in the area of percentage depletion and
intangible drilling costs, could cause our financial position and
profitability to deteriorate; failure to appropriately allocate
capital and other resources among our strategic opportunities may
adversely affect our financial condition; failure by Murray Energy
to satisfy liabilities it acquired from us, or failure to perform
its obligations under various arrangements, which we guaranteed,
could materially or adversely affect our results of operations,
financial position, and cash flows; information theft, data
corruption and/or financial loss resulting from a terrorist attack
or cyber incident; operating in a single geographic
area; we may not be able to consummate an initial public
offering of CNXC owning certain of our thermal coal assets or an
initial public offering of the subsidiary owning certain of our
metallurgical coal assets (Metco); and other factors discussed in
the 2014 Form 10-K under "Risk Factors," as updated by any
subsequent Form 10-Qs, which are on file at the Securities and
Exchange Commission.
A registration statement relating to the common units of CNXC
has been filed with the Securities and Exchange Commission but has
not yet become effective. The common units of CNXC may not be sold
nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This announcement does
not constitute an offer to sell, or the solicitation of an offer to
buy, any securities of CNXC.
A registration statement relating to the securities of Metco
that would be sold in the offering has not been filed with the
Securities and Exchange Commission or become effective. This
announcement does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities of Metco.
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(Dollars in
thousands, except per share data)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Revenues and Other
Income:
|
2015
|
|
2014
|
Natural Gas, NGLs and
Oil Sales
|
$
|
254,580
|
|
|
$
|
266,298
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
60,004
|
|
|
—
|
|
Coal Sales
|
496,666
|
|
|
534,681
|
|
Other Outside
Sales
|
13,130
|
|
|
69,287
|
|
Gas Royalty Interests
and Purchased Gas Sales
|
18,456
|
|
|
30,219
|
|
Freight-Outside
Coal
|
6,525
|
|
|
9,945
|
|
Miscellaneous Other
Income
|
38,066
|
|
|
55,054
|
|
Gain on Sale of
Assets
|
2,165
|
|
|
3,669
|
|
Total Revenue and
Other Income
|
889,592
|
|
|
969,153
|
|
Costs and
Expenses:
|
|
|
|
Exploration and
Production Costs
|
|
|
|
Lease Operating
Expense
|
31,612
|
|
|
29,243
|
|
Transportation,
Gathering and Compression
|
78,744
|
|
|
53,782
|
|
Production, Ad
Valorem, and Other Fees
|
9,192
|
|
|
10,187
|
|
Direct Administrative
and Selling
|
14,667
|
|
|
11,653
|
|
Depreciation,
Depletion and Amortization
|
85,104
|
|
|
71,729
|
|
Exploration and
Production Related Other Costs
|
2,040
|
|
|
3,099
|
|
Production Royalty
Interests and Purchased Gas Costs
|
16,127
|
|
|
26,096
|
|
Other Corporate
Expenses
|
19,096
|
|
|
26,164
|
|
General and
Administrative
|
15,142
|
|
|
17,364
|
|
Total Exploration
and Production Costs
|
271,724
|
|
|
249,317
|
|
Coal
Costs
|
|
|
|
Operating and Other
Costs
|
311,583
|
|
|
333,810
|
|
Royalties and
Production Taxes
|
22,317
|
|
|
26,488
|
|
Direct Administrative
and Selling
|
8,983
|
|
|
11,542
|
|
Depreciation,
Depletion and Amortization
|
65,483
|
|
|
56,866
|
|
Freight
Expense
|
6,525
|
|
|
9,945
|
|
General and
Administrative Costs
|
7,408
|
|
|
12,709
|
|
Other Corporate
Expenses
|
8,895
|
|
|
19,295
|
|
Total Coal
Costs
|
431,194
|
|
|
470,655
|
|
Other
Costs
|
|
|
|
Miscellaneous
Operating Expense
|
10,384
|
|
|
67,340
|
|
General and
Administrative Costs
|
—
|
|
|
210
|
|
Depreciation,
Depletion and Amortization
|
7
|
|
|
521
|
|
Loss on Debt
Extinguishment
|
67,734
|
|
|
—
|
|
Interest
Expense
|
55,122
|
|
|
50,931
|
|
Total Other
Costs
|
133,247
|
|
|
119,002
|
|
Total Costs And
Expenses
|
836,165
|
|
|
838,974
|
|
Earnings Before
Income Tax
|
53,427
|
|
|
130,179
|
|
Income
Taxes
|
(25,603)
|
|
|
8,489
|
|
Income From
Continuing Operations
|
79,030
|
|
|
121,690
|
|
Loss From
Discontinued Operations, net
|
—
|
|
|
(5,687)
|
|
Net
Income
|
$
|
79,030
|
|
|
$
|
116,003
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
(CONTINUED)
|
|
(Dollars in
thousands, except per share data)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Earnings Per
Share
|
2015
|
|
2014
|
Basic
|
|
|
|
Income from
Continuing Operations
|
$
|
0.34
|
|
|
$
|
0.53
|
|
Loss from
Discontinued Operations
|
—
|
|
|
(0.02)
|
|
Total Basic
Earnings Per Share
|
$
|
0.34
|
|
|
$
|
0.51
|
|
Dilutive
|
|
|
|
Income from
Continuing Operations
|
$
|
0.34
|
|
|
$
|
0.53
|
|
Loss from
Discontinued Operations
|
—
|
|
|
(0.03)
|
|
Total Dilutive
Earnings Per Share
|
$
|
0.34
|
|
|
$
|
0.50
|
|
|
|
|
|
Dividends Paid Per
Share
|
$
|
0.0625
|
|
|
$
|
0.0625
|
|
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
Three Months
Ended
|
(Dollars in
thousands)
|
March
31,
|
(Unaudited)
|
2015
|
|
2014
|
Net Income
|
$
|
79,030
|
|
|
$
|
116,003
|
|
Other Comprehensive
Loss:
|
|
|
|
Actuarially
Determined Long-Term Liability Adjustments (Net of tax: $90,
($2,985))
|
(149)
|
|
|
5,119
|
|
Net Decrease
in the Value of Cash Flow Hedges (Net of tax: $0,
$30,856)
|
—
|
|
|
(46,965)
|
|
Reclassification of Cash Flow Hedges from OCI to Earnings (Net of
tax: $11,213, ($10,951))
|
(19,314)
|
|
|
16,313
|
|
|
|
|
|
Other Comprehensive
Loss
|
(19,463)
|
|
|
(25,533)
|
|
|
|
|
|
Comprehensive
Income
|
$
|
59,567
|
|
|
$
|
90,470
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands)
|
March 31,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
5,318
|
|
|
$
|
176,989
|
|
Accounts and Notes
Receivable:
|
|
|
|
Trade
|
226,991
|
|
|
259,817
|
|
Other
Receivables
|
263,490
|
|
|
347,146
|
|
Accounts Receivable -
Securitized
|
32,669
|
|
|
—
|
|
Inventories
|
105,244
|
|
|
101,873
|
|
Deferred Income
Taxes
|
74,725
|
|
|
66,569
|
|
Recoverable Income
Taxes
|
20,566
|
|
|
20,401
|
|
Prepaid
Expenses
|
203,711
|
|
|
193,555
|
|
Total Current
Assets
|
932,714
|
|
|
1,166,350
|
|
Property, Plant and
Equipment:
|
|
|
|
Property, Plant and
Equipment
|
15,014,326
|
|
|
14,674,777
|
|
Less—Accumulated
Depreciation, Depletion and Amortization
|
4,647,745
|
|
|
4,512,305
|
|
Total Property,
Plant and Equipment—Net
|
10,366,581
|
|
|
10,162,472
|
|
Other
Assets:
|
|
|
|
Investment in
Affiliates
|
192,273
|
|
|
152,958
|
|
Other
|
289,828
|
|
|
277,750
|
|
Total Other
Assets
|
482,101
|
|
|
430,708
|
|
TOTAL
ASSETS
|
$
|
11,781,396
|
|
|
$
|
11,759,530
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands, except per share data)
|
March 31,
2015
|
|
December 31,
2014
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$
|
532,388
|
|
|
$
|
531,973
|
|
Current Portion of
Long-Term Debt
|
13,242
|
|
|
13,016
|
|
Short-Term Notes
Payable
|
760,500
|
|
|
—
|
|
Borrowings Under
Securitization Facility
|
32,669
|
|
|
—
|
|
Other Accrued
Liabilities
|
569,185
|
|
|
602,972
|
|
Total Current
Liabilities
|
1,907,984
|
|
|
1,147,961
|
|
Long-Term
Debt:
|
|
|
|
Long-Term
Debt
|
2,561,681
|
|
|
3,236,422
|
|
Capital Lease
Obligations
|
38,854
|
|
|
39,456
|
|
Total Long-Term
Debt
|
2,600,535
|
|
|
3,275,878
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
Deferred Income
Taxes
|
304,303
|
|
|
325,592
|
|
Postretirement
Benefits Other Than Pensions
|
696,327
|
|
|
703,680
|
|
Pneumoconiosis
Benefits
|
117,608
|
|
|
116,941
|
|
Mine
Closing
|
305,906
|
|
|
306,789
|
|
Gas Well
Closing
|
178,680
|
|
|
175,369
|
|
Workers'
Compensation
|
74,725
|
|
|
75,947
|
|
Salary
Retirement
|
107,637
|
|
|
109,956
|
|
Reclamation
|
33,394
|
|
|
33,788
|
|
Other
|
156,570
|
|
|
158,171
|
|
Total Deferred
Credits and Other Liabilities
|
1,975,150
|
|
|
2,006,233
|
|
TOTAL
LIABILITIES
|
6,483,669
|
|
|
6,430,072
|
|
Stockholders'
Equity:
|
|
|
|
Common Stock, $.01
Par Value; 500,000,000 Shares Authorized, 228,680,338 Issued and
Outstanding at March 31, 2015; 230,265,463 Issued and Outstanding
at December 31, 2014
|
2,291
|
|
|
2,306
|
|
Capital in Excess of
Par Value
|
2,412,587
|
|
|
2,424,102
|
|
Preferred Stock,
15,000,000 shares authorized, None issued and
outstanding
|
—
|
|
|
—
|
|
Retained
Earnings
|
3,053,412
|
|
|
3,054,150
|
|
Accumulated Other
Comprehensive Loss
|
(170,563)
|
|
|
(151,100)
|
|
Total CONSOL
Energy Inc. Stockholders' Equity
|
5,297,727
|
|
|
5,329,458
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
11,781,396
|
|
|
$
|
11,759,530
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
(Dollars in
thousands, except per share data)
|
Common
Stock
|
|
Capital in
Excess
of Par
Value
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total CONSOL
Energy Inc.
Stockholders'
Equity
|
December 31,
2014
|
$
|
2,306
|
|
|
$
|
2,424,102
|
|
|
$
|
3,054,150
|
|
|
$
|
(151,100)
|
|
|
$
|
5,329,458
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Net Income
|
—
|
|
|
—
|
|
|
79,030
|
|
|
—
|
|
|
79,030
|
|
Other Comprehensive
Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,463)
|
|
|
(19,463)
|
|
Comprehensive Income
(Loss)
|
—
|
|
|
—
|
|
|
79,030
|
|
|
(19,463)
|
|
|
59,567
|
|
Issuance of Common
Stock
|
7
|
|
|
1,729
|
|
|
—
|
|
|
—
|
|
|
1,736
|
|
Retirement of Common
Stock (2,213,100 shares)
|
(22)
|
|
|
(17,683)
|
|
|
(53,969)
|
|
|
—
|
|
|
(71,674)
|
|
Treasury Stock
Activity
|
—
|
|
|
—
|
|
|
(11,399)
|
|
|
—
|
|
|
(11,399)
|
|
Tax Cost From
Stock-Based Compensation
|
—
|
|
|
(3,042)
|
|
|
—
|
|
|
—
|
|
|
(3,042)
|
|
Amortization of
Stock-Based Compensation Awards
|
—
|
|
|
7,481
|
|
|
—
|
|
|
—
|
|
|
7,481
|
|
Dividends ($0.0625
per share)
|
—
|
|
|
—
|
|
|
(14,400)
|
|
|
—
|
|
|
(14,400)
|
|
Balance at March
31, 2015
|
$
|
2,291
|
|
|
$
|
2,412,587
|
|
|
$
|
3,053,412
|
|
|
$
|
(170,563)
|
|
|
$
|
5,297,727
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Dollars in
thousands)
|
Three Months
Ended
|
(Unaudited)
|
March
31,
|
Operating
Activities:
|
2015
|
|
2014
|
Net Income
|
$
|
79,030
|
|
|
$
|
116,003
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided By Continuing Operating
Activities:
|
|
|
|
Net Loss from
Discontinued Operations
|
—
|
|
|
5,687
|
|
Depreciation,
Depletion and Amortization
|
150,594
|
|
|
129,116
|
|
Stock-Based
Compensation
|
7,481
|
|
|
15,892
|
|
Gain on Sale of
Assets
|
(2,165)
|
|
|
(3,669)
|
|
Loss on Debt
Extinguishment
|
67,734
|
|
|
—
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
(60,004)
|
|
|
—
|
|
Deferred Income
Taxes
|
(21,200)
|
|
|
8,149
|
|
Equity in Earnings of
Affiliates
|
(11,323)
|
|
|
(7,450)
|
|
Changes in Operating
Assets:
|
|
|
|
Accounts and Notes
Receivable
|
26,523
|
|
|
(22,231)
|
|
Inventories
|
(3,371)
|
|
|
1,729
|
|
Prepaid
Expenses
|
38,476
|
|
|
15,493
|
|
Changes in Other
Assets
|
6,966
|
|
|
354
|
|
Changes in Operating
Liabilities:
|
|
|
|
Accounts
Payable
|
(17,720)
|
|
|
16,595
|
|
Accrued
Interest
|
42,719
|
|
|
51,233
|
|
Other Operating
Liabilities
|
(68,711)
|
|
|
18,260
|
|
Changes in Other
Liabilities
|
(10,305)
|
|
|
3,655
|
|
Other
|
3,646
|
|
|
1,125
|
|
Net Cash Provided by
Continuing Operations
|
228,370
|
|
|
349,941
|
|
Net Cash Used in
Discontinued Operating Activities
|
—
|
|
|
(13,839)
|
|
Net Cash Provided by
Operating Activities
|
228,370
|
|
|
336,102
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(294,019)
|
|
|
(451,009)
|
|
Proceeds from Sales
of Assets
|
2,108
|
|
|
125,528
|
|
Net Investments In
Equity Affiliates
|
(27,992)
|
|
|
(10,000)
|
|
Net Cash Used in
Investing Activities
|
(319,903)
|
|
|
(335,481)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from
Short-Term Borrowings
|
760,500
|
|
|
—
|
|
Payments on
Miscellaneous Borrowings
|
(2,478)
|
|
|
(4,670)
|
|
Payments on Long Term
Notes, including Redemption Premium
|
(1,261,009)
|
|
|
—
|
|
Proceeds from
Securitization Facility
|
32,669
|
|
|
—
|
|
Proceeds from
Issuance of Long-Term Notes
|
492,760
|
|
|
—
|
|
Tax Benefit from
Stock-Based Compensation
|
15
|
|
|
92
|
|
Dividends
Paid
|
(14,400)
|
|
|
(14,351)
|
|
Issuance of Common
Stock
|
1,736
|
|
|
4,976
|
|
Treasury Stock
Activity
|
—
|
|
|
(1)
|
|
Purchases of Treasury
Stock
|
(71,674)
|
|
|
—
|
|
Debt Issuance and
Financing Fees
|
(18,257)
|
|
|
—
|
|
Net Cash Used in
Financing Activities
|
(80,138)
|
|
|
(13,954)
|
|
Net Decrease in Cash
and Cash Equivalents
|
(171,671)
|
|
|
(13,333)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
176,989
|
|
|
327,420
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
5,318
|
|
|
$
|
314,087
|
|
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visit:http://www.prnewswire.com/news-releases/consol-energy-reports-first-quarter-net-income-of-79-million-or-034-per-diluted-share-record-quarterly-ep-production-of-716-bcfe-multi-year-sales-secured-to-bring-pennsylvania-thermal-to-approximately-40-committed-for-201-300072845.html
SOURCE CONSOL Energy Inc.