CANONSBURG, Pa., Feb. 11, 2020 /PRNewswire/ -- Today, CONSOL
Energy Inc. (NYSE: CEIX) reported financial and operating results
for the period ended December 31, 2019.
Fourth Quarter 2019 and Full Year 2019 Highlights
Include:
- GAAP net income of $17.4
million and $93.6 million for
4Q19 and 2019, respectively;
- 2019 total GAAP dilutive earnings per share of $2.81;
- Adjusted net income1 of $17.4 million and $112.7
million for 4Q19 and 2019, respectively;
- 2019 adjusted dilutive earnings per share1 of
$3.52;
- Adjusted EBITDA1 of $92.1
million and $405.9 million for
4Q19 and 2019, respectively;
- Coal sales volume of 27.3 million tons is the second
strongest year ever for the Pennsylvania Mining Complex
(PAMC);
- Annual revenue record at the CONSOL Marine Terminal
(CMT);
- Harvey Mine achieved annual production record of 5.02
million tons;
- 2019 cash provided by operating activities of $244.6 million;
- 2019 organic free cash flow net to CEIX
shareholders1 of $52.6
million, including $80.3
million adverse working capital changes;
- Net payments on total debt of $25.7 and $183.9
million for 4Q19 and 2019, respectively; and
- Total net leverage ratio1 of 1.9x on 12/31/2019 per bank method.
Management Comments
"2019 was quite a challenging year, as our industry dealt with
weakening commodity and capital markets, which led to several
bankruptcies in the coal space," said Jimmy
Brock, President and Chief Executive Officer of CONSOL
Energy Inc. "Despite such a tough backdrop, I am pleased to
announce that we delivered a strong set of results for the fourth
quarter and full year of 2019. While U.S. coal production is
estimated to have declined by 9% compared to 2018, the PAMC
produced and sold 27.3 million tons in 2019, which is largely
unchanged from the record production and sales levels set in 2018.
These results were driven by our contracting strategy,
well-capitalized asset base and consistent operational performance.
On the financial front, we continued to reduce the leverage on our
balance sheet by making net payments of approximately $184 million towards debt outstanding in 2019,
and due to our refinancing efforts in early 2019, we've extended
maturities into at least 2023 and increased liquidity."
"We also achieved significant improvements on the safety front.
Our total recordable incident rate at the PAMC for 2019 improved by
44.7% and our total number of exceptions improved by 41.4%,
compared to 2018. Safety remains our top core value, and we
continue to strive towards zero life-altering incidents."
Pennsylvania Mining Complex (PAMC) Review and Outlook
PAMC Sales and Marketing
Our marketing team sold 6.7 million tons of coal during the
fourth quarter of 2019 at an average revenue per ton of
$45.14, compared to 7.0 million tons
at an average revenue per ton of $49.81 in the year-ago period. Despite a 25%
lower average PJM West day-ahead power price, a 36% lower average
API 2 prompt month coal price and a 36% lower average Henry Hub
natural gas spot price in the fourth quarter of 2019 versus the
fourth quarter of 2018, our average revenue per ton declined only
9% across the same time period due to our strong contracted
position. On the sales volume front, the 0.4 million ton decline in
2019 compared to the year-ago period was mostly a function of
reduced production.
During the quarter, we were successful in securing additional
coal sales contracts and are currently approximately 95% contracted
for 2020 and 43% contracted for 2021, assuming the midpoint of our
coal sales volume guidance range.
According to the U.S. Energy Information Administration,
inventories at domestic utilities stood at approximately 124
million tons at the end of November
2019, which is approximately 18% higher compared to year-ago
levels. While low natural gas and power prices have been weighing
on broader coal demand, we continued to ship all the coal we
produced during the fourth quarter of 2019. Despite a
warmer-than-normal start to 2020, the National Oceanic and
Atmospheric Administration expects below-normal temperatures for
most of the northern and northeastern areas of the U.S. in
February. This development could help to reduce some of the coal
stockpile overhang in the domestic markets we serve.
On the export front, low-priced LNG has weighed on coal demand
abroad, as a glut of new projects came online in 2019.
Additionally, API 2 spot prices for thermal coal delivered to
Europe remained volatile
throughout 2019, declining 39%. Our 2019 revenues were largely
unaffected by this volatility due to our previously disclosed
export contract, which runs through December
2020.
On the supply side, low prices are starting to drive global
supply rationalization. We started seeing production cuts in the
U.S. and Colombia in late 2019,
and we are now starting to see Indonesia do the same. Most recently,
Indonesia set its coal production
output target to 550 million tons in 2020, down from 610 million
tons in 2019. Despite this planned production cut, Indonesia's coal consumption is expected to
rise from 138 million tons in 2019 to 155 million tons in 2020,
which should help to tighten the international market.
Operations Summary
The PAMC produced 6.7 million tons in the fourth quarter of
2019, which compares to 6.8 million tons in the year-ago quarter.
This brings total PAMC production to 27.3 million tons in 2019,
which is its second highest production year in its history. Despite
a challenged commodity market, the complex ran at approximately 96%
capacity utilization during 2019, highlighting the sustained
desirability of our product. Additionally, our Harvey mine set an
individual production record during the year of 5.02 million tons,
exceeding its previous record set in 2018. This also marks its
third consecutive record-setting year.
CEIX's total costs during the fourth quarter of 2019 were
$320.5 million compared to
$335.9 million in the year-ago
quarter. Average cash cost of coal sold per ton1 for the
fourth quarter was $30.38 compared to
$30.54 in the year-ago quarter. The
decrease was due to reduced maintenance and supply costs and
contractor and purchased services costs. For 2019, CEIX's total
costs were $1,332.8 million compared
to $1,344.4 million in the prior year
due mainly to a reduction in interest expense. Our 2019 average
cash cost of coal sold per ton1 was $30.97 compared to $29.29 for 2018. The increase was primarily
driven by additional equipment rebuilds and longwall overhauls due
to the timing of longwall moves and panel development. Also, the
Company faced atypical challenges during the current year,
including a roof fall and equipment breakdowns, resulting in higher
mine maintenance and project expenses. Subsidence expense also
increased in the year-to-year comparison, primarily due to the
timing and nature of the properties undermined.
|
|
Three Months
Ended
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
Coal
Production
|
million
tons
|
6.7
|
|
6.8
|
Coal Sales
|
million
tons
|
6.7
|
|
7.0
|
Average Revenue per
Ton
|
per ton
|
$45.14
|
|
$49.81
|
Average Cash Costs of
Coal Sold1
|
per ton
|
$30.38
|
|
$30.54
|
Average Cash Margin
per Ton Sold1
|
per ton
|
$14.76
|
|
$19.27
|
CONSOL Marine Terminal (CMT) Review
For the fourth quarter of 2019, throughput volumes at CMT were
2.5 million tons, compared to 2.7 million tons in the year-ago
period. Terminal revenues were largely in line compared to the
year-ago quarter. For the fourth quarter, terminal revenues and
operating cash costs were $16.5
million and $4.9 million,
respectively, compared to $16.9
million and $5.2 million,
respectively, during the year-ago period. CMT achieved record
terminal revenue of $67.4 million,
eclipsing the previous record of $64.9
million set in 2018 and marking the third consecutive year
of record-setting terminal revenue. CMT net income and CMT adjusted
EBITDA1 came in at $8.6
million and $11.3 million,
respectively, in the fourth quarter of 2019 compared to
$8.8 million and $11.3 million, respectively, in the year-ago
period. CMT finished the year with net income and adjusted
EBITDA1 of $33.8 million
and $44.5 million, respectively
compared to $30.6 million and
$40.9 million, respectively, in
2018.
Itmann Project
We continue to work on optimizing our Itmann project and are
pleased to announce that, once the project is fully operational, we
expect an improved production profile of 900+ thousand tons per
annum versus our initial guidance of 600+ thousand tons per annum.
Furthermore, in order to account for changing market conditions and
our capital allocation needs, we are also adjusting the timing of
capital spending on the Itmann project. If market conditions
warrant, we always have the option to accelerate the spend and ramp
up faster. While we continue to anticipate first coal production to
occur in 1Q20, the deferred capex has resulted in an extended
production ramp-up. As we have mentioned in our previous press
releases, we maintain a lot of flexibility on the timing of spend
on our Itmann project and will respond to changing market
conditions and evolving corporate-level capital priorities.
As previously announced, all permits needed for development of
the mine site have been approved and issued. Mine construction,
including excavation and blasting, is nearing completion.
Finally, engineering and environmental work is underway to
permit a new preparation plant and refuse facility at the former
Itmann plant site. We have finalized the plant layout and rail
infrastructure design and are working with the appropriate parties
to finalize other related agreements for the plant site.
We presently continue to maintain our previously-stated cost and
capital guidance outlook for the overall project. As we progress
with development mining and the preparation plant project, we will
update our outlook accordingly.
Debt and Equity Repurchase Update
Consistent with our stated strategy, we continue to be very
measured in our approach to repurchasing our debt and equity
securities. We look to take advantage of declines in the prices of
our financial securities and weigh them against one another through
our strict capital allocation strategy, while also supporting our
primary goal of maintaining a strong balance sheet.
During the fourth quarter of 2019, CEIX focused more heavily on
delevering and spent $16.2 million to
retire $17.6 million of our Second
Lien debt as it traded at a significant discount to its par value.
Additionally, CEIX spent $3.8 million
and $0.7 million toward the reduction
of our Term Loan A and Term Loan B debts, respectively. CEIX also
made principal payments of $4.8
million toward outstanding finance leases. In aggregate,
during the fourth quarter, we reduced our absolute debt level by
approximately $22 million.
For the year ended December 31,
2019, we have now repurchased $52.6
million of Second Lien notes, $32.7
million of CEIX common shares and $0.4 million of CCR units. We have also repaid
$124.4 million (including the
February 2019 sweep payment) and
$11.3 million of principal with
respect to Term Loan B and Term Loan A, respectively.
Diversification Efforts
Over the past year, CEIX has been very active in pursuing
alternative and lower-emission uses of coal and has made several
key investments geared toward that goal. We recently announced that
we acquired a 25% ownership stake in CFOAM Corp., a newly-formed
US-based holding company whose wholly-owned subsidiary, CFOAM LLC,
manufactures high-performance carbon foam products from coal and
focuses on meeting demand for high-grade materials in the
industrial, aerospace, military and commercial product markets. We
estimate the total addressable market for such products is over
$15 billion annually. We are also
partnering on a DOE-funded project with Ohio
University and other industry partners to develop coal
plastic composites that are geared toward the engineered composite
decking and other building products markets with an expected
$8 billion plus global addressable
market by 2023. Finally, CEIX has partnered with OMNIS Bailey LLC
to develop a refinery that will convert waste coal slurry into two
products: a high-quality carbon product that can be used as fuel or
as a feedstock for other higher-value applications, and a mineral
matter product that has the potential to be used as a soil
amendment in agricultural applications.
2020 Guidance and Outlook
Based on our current contracted position, estimated prices and
production plans, we are providing the following financial and
operating performance guidance for 2020:
- Coal sales volumes (100% PAMC) - 24.5-26.5 million tons
- Coal average revenue per ton sold - $43.00-$45.00
- Average cash cost of coal sold per ton2 -
$30.00-$31.50
- CMT Adjusted EBITDA2 - $40-$45
million
- Adjusted EBITDA2 (incl. 100% PAMC) - $295-$335
million
- Capital expenditures (incl. 100% PAMC) - $125-$145
million
Fourth Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Coal Resources
LP, during which management will discuss the fourth quarter and
annual 2019 financial and operational results, is scheduled
for February 11, 2020 at 11:00 AM ET. Prepared
remarks by members of management will be followed by a question and
answer session. Interested parties may listen via webcast on the
"Events and Presentations" page of our
website, www.consolenergy.com. An archive of the webcast will
be available for 30 days after the event.
Participant dial in (toll free) 1-888-348-6419
Participant international dial in 1-412-902-4235
Availability of Additional Information
Please refer to our website, www.consolenergy.com, for
additional information regarding the company. Prior to the earnings
conference call, we will make available additional information in a
presentation slide deck to provide investors with further insights
into our financial and operating performance. This material can be
accessed through the "Events and Presentations" page of our
website. In addition, we may provide other information about the
company from time to time on our website.
We will also file our Form 10-K with the Securities and Exchange
Commission (SEC) reporting our results for the quarter ended
December 31, 2019. Investors seeking
our detailed financial statements can refer to the Form 10-K once
it has been filed with the SEC.
Footnotes:
1"Adjusted Net Income", "Adjusted Dilutive Earnings
per Share", "Adjusted EBITDA", "Organic Free Cash Flow Net to CEIX
Shareholders", "CMT Adjusted EBITDA" and "Net Leverage Ratio" are
non-GAAP financial measures and "Average Cash Cost of Coal Sold per
Ton" and "Average Cash Margin per Ton Sold" are operating ratios
derived from non-GAAP financial measures, each of which are
reconciled to the most directly comparable GAAP financial measures
below, under the caption "Reconciliation of Non-GAAP Financial
Measures".
2CEIX is unable to provide a reconciliation of
Adjusted EBITDA guidance and CMT Adjusted EBITDA guidance to net
income, the most comparable financial measure calculated in
accordance with GAAP, nor a reconciliation of Average Cash Cost of
Coal Sold per Ton guidance, an operating ratio derived from
non-GAAP financial measures, due to the unknown effect, timing and
potential significance of certain income statement items.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg, Pennsylvania-based producer and
exporter of high-Btu bituminous thermal and crossover metallurgical
coal. It owns and operates some of the most productive longwall
mining operations in the Northern Appalachian Basin. Our flagship
operation is the Pennsylvania Mining Complex, which has the
capacity to produce approximately 28.5 million tons of coal per
year and is comprised of 3 large-scale underground mines:
Bailey, Enlow Fork, and Harvey. The company also owns and operates
the CONSOL Marine Terminal, which is located in the port of
Baltimore and has a throughput
capacity of approximately 15 million tons per year. In addition to
the ~669 million reserve tons associated with the Pennsylvania
Mining Complex and the ~21 million reserve tons associated with the
Itmann project, the company also controls approximately 1.5 billion
tons of greenfield thermal and metallurgical coal reserves located
in the major coal-producing basins of the eastern United States. Additional information
regarding CONSOL Energy may be found at www.consolenergy.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
Condensed Consolidated Statements of Income
The following table presents a condensed consolidated statement
of income for the three months ended December 31, 2019 and 2018 (in thousands):
|
Three Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues and Other
Income:
|
|
|
|
Coal
Revenue
|
$
|
303,865
|
|
|
$
|
347,789
|
|
Terminal
Revenue
|
16,534
|
|
|
16,931
|
|
Freight
Revenue
|
5,552
|
|
|
5,798
|
|
Other
Income
|
16,684
|
|
|
11,718
|
|
Total Revenue and
Other Income
|
342,635
|
|
|
382,236
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
Operating and Other
Costs
|
229,603
|
|
|
245,672
|
|
Depreciation,
Depletion and Amortization
|
55,852
|
|
|
45,590
|
|
Freight
Expense
|
5,552
|
|
|
5,798
|
|
Selling, General and
Administrative Costs
|
14,210
|
|
|
17,631
|
|
(Gain) Loss on
Extinguishment of Debt
|
(989)
|
|
|
773
|
|
Interest Expense,
net
|
16,224
|
|
|
20,437
|
|
Total Costs and
Expenses
|
320,452
|
|
|
335,901
|
|
|
|
|
|
Earnings Before
Income Tax
|
22,183
|
|
|
46,335
|
|
Income Tax
Expense
|
4,782
|
|
|
301
|
|
Net
Income
|
17,401
|
|
|
46,034
|
|
Less: Net
Income Attributable to Noncontrolling Interest
|
3,455
|
|
|
6,362
|
|
Net Income
Attributable to CONSOL Energy Inc. Shareholders
|
$
|
13,946
|
|
|
$
|
39,672
|
|
|
|
|
|
Earnings Per
Share:
|
|
|
|
Basic
|
$
|
0.54
|
|
|
$
|
1.43
|
|
Dilutive
|
$
|
0.54
|
|
|
$
|
1.41
|
|
Condensed Consolidated Balance Sheets
The following table presents a condensed consolidated balance
sheet as of December 31, 2019 and
2018 (in thousands):
|
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
Cash and Cash
Equivalents
|
$
|
80,293
|
|
|
$
|
235,677
|
|
Trade Receivables,
net of Allowance
|
131,688
|
|
|
87,589
|
|
Other Current
Assets
|
126,048
|
|
|
150,689
|
|
Total Current
Assets
|
338,029
|
|
|
473,955
|
|
Total Property, Plant
and Equipment - Net
|
2,092,165
|
|
|
2,106,528
|
|
Total Other
Assets
|
263,608
|
|
|
180,244
|
|
TOTAL
ASSETS
|
$
|
2,693,802
|
|
|
$
|
2,760,727
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Total Current
Liabilities
|
$
|
392,264
|
|
|
$
|
492,176
|
|
Total Long-Term
Debt
|
662,838
|
|
|
734,226
|
|
Total Other
Liabilities
|
1,066,305
|
|
|
982,714
|
|
Total
Equity
|
572,395
|
|
|
551,611
|
|
TOTAL LIABILITIES AND
EQUITY
|
$
|
2,693,802
|
|
|
$
|
2,760,727
|
|
Condensed Consolidated Statements of Cash Flows
The following table presents a condensed consolidated statement
of cash flows for the three months ended December 31, 2019 and 2018 (in thousands):
|
Three Months
Ended
December 31,
|
For the Year
Ended
December 31,
|
|
2019
|
|
2018
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
|
17,401
|
|
|
$
|
46,034
|
|
$
|
93,558
|
|
|
$
|
178,785
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
|
Depreciation,
Depletion and Amortization
|
55,852
|
|
|
45,590
|
|
207,097
|
|
|
201,264
|
|
Other Non-Cash
Adjustments to Net Income
|
(1,141)
|
|
|
(14,204)
|
|
24,217
|
|
|
5,968
|
|
Changes in Working
Capital
|
(50,729)
|
|
|
5,853
|
|
(80,306)
|
|
|
27,508
|
|
Net Cash Provided by
Operating Activities
|
21,383
|
|
|
83,273
|
|
244,566
|
|
|
413,525
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Capital
Expenditures
|
(38,264)
|
|
|
(48,894)
|
|
(169,739)
|
|
|
(145,749)
|
|
Proceeds from Sales
of Assets
|
186
|
|
|
735
|
|
2,201
|
|
|
2,103
|
|
Other Investing
Activity
|
(5,003)
|
|
|
(10,000)
|
|
(5,003)
|
|
|
(10,000)
|
|
Net Cash Used in
Investing Activities
|
(43,081)
|
|
|
(58,159)
|
|
(172,541)
|
|
|
(153,646)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Net Payments on
Long-Term Debt
|
(25,679)
|
|
|
(12,438)
|
|
(183,890)
|
|
|
(73,916)
|
|
Distributions to
Noncontrolling Interest
|
(5,546)
|
|
|
(5,502)
|
|
(22,220)
|
|
|
(22,265)
|
|
Other Financing
Activities
|
(1,633)
|
|
|
(18,553)
|
|
(50,557)
|
|
|
(52,742)
|
|
Net Cash Used in
Financing Activities
|
(32,858)
|
|
|
(36,493)
|
|
(256,667)
|
|
|
(148,923)
|
|
Net Decrease in
Cash & Cash Equivalents & Restricted Cash
|
$
|
(54,556)
|
|
|
$
|
(11,379)
|
|
$
|
(184,642)
|
|
|
$
|
110,956
|
|
Cash & Cash
Equivalents & Restricted Cash at Beginning of Period
|
134,849
|
|
|
276,314
|
|
264,935
|
|
|
153,979
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
$
|
80,293
|
|
|
$
|
264,935
|
|
$
|
80,293
|
|
|
$
|
264,935
|
|
Reconciliation of Non-GAAP Financial Measures
We evaluate our cost of coal sold and cash cost of coal sold on
an aggregate basis. We define cost of coal sold as operating and
other production costs related to produced tons sold, along with
changes in coal inventory, both in volumes and carrying values. The
cost of coal sold includes items such as direct operating costs,
royalty and production taxes, direct administration costs, and
depreciation, depletion and amortization costs on production
assets. Our costs exclude any indirect costs, such as selling,
general and administrative costs, freight expenses, interest
expenses, depreciation, depletion and amortization costs on
non-production assets and other costs not directly attributable to
the production of coal. The GAAP measure most directly comparable
to cost of coal sold is total costs and expenses. The cash cost of
coal sold includes cost of coal sold less depreciation, depletion
and amortization costs on production assets. The GAAP measure most
directly comparable to cash cost of coal sold is total costs and
expenses.
The following table presents a reconciliation of cost of coal
sold and cash cost of coal sold to total costs and expenses, the
most directly comparable GAAP financial measure, on a historical
basis, for each of the periods indicated (in thousands).
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total Costs and
Expenses
|
|
$
|
320,451
|
|
|
$
|
335,901
|
|
|
$
|
1,332,806
|
|
|
$
|
1,344,402
|
|
Freight
Expense
|
|
(5,552)
|
|
|
(5,798)
|
|
|
(19,667)
|
|
|
(43,572)
|
|
Selling, General and
Administrative Costs
|
|
(14,210)
|
|
|
(17,631)
|
|
|
(67,111)
|
|
|
(65,346)
|
|
Gain (Loss) on Debt
Extinguishment
|
|
989
|
|
|
(773)
|
|
|
(24,455)
|
|
|
(3,922)
|
|
Interest Expense,
net
|
|
(16,224)
|
|
|
(20,437)
|
|
|
(66,464)
|
|
|
(83,848)
|
|
Other Costs
(Non-Production)
|
|
(25,044)
|
|
|
(31,568)
|
|
|
(101,900)
|
|
|
(135,081)
|
|
Depreciation,
Depletion & Amortization (Non-Production)
|
|
(9,277)
|
|
|
(3,863)
|
|
|
(32,388)
|
|
|
(30,961)
|
|
Cost of Coal
Sold
|
|
$
|
251,133
|
|
|
$
|
255,831
|
|
|
$
|
1,020,821
|
|
|
$
|
981,672
|
|
Depreciation,
Depletion and Amortization (Production)
|
|
(46,575)
|
|
|
(41,727)
|
|
|
(174,709)
|
|
|
(170,303)
|
|
Cash Cost of Coal
Sold
|
|
$
|
204,558
|
|
|
$
|
214,104
|
|
|
$
|
846,112
|
|
|
$
|
811,369
|
|
We define average cash margin per ton sold as average coal
revenue per ton, net of average cash cost of coal sold per ton. The
GAAP measure most directly comparable to average cash margin per
ton sold is total coal revenue.
The following table presents a reconciliation of average cash
margin per ton sold to total coal revenue, the most directly
comparable GAAP financial measure, on a historical basis, for each
of the periods indicated (in thousands, except per ton
information).
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total Coal
Revenue
|
|
$
|
303,864
|
|
|
$
|
347,789
|
|
|
$
|
1,288,529
|
|
|
$
|
1,364,292
|
|
Operating and Other Costs
|
|
229,602
|
|
|
245,672
|
|
|
948,012
|
|
|
946,450
|
|
Less: Other Costs (Non-Production)
|
|
(25,044)
|
|
|
(31,568)
|
|
|
(101,900)
|
|
|
(135,081)
|
|
Total Cash Cost of
Coal Sold
|
|
204,558
|
|
|
214,104
|
|
|
846,112
|
|
|
811,369
|
|
Add: Depreciation, Depletion and Amortization
|
|
55,852
|
|
|
45,590
|
|
|
207,097
|
|
|
201,264
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
(9,277)
|
|
|
(3,863)
|
|
|
(32,388)
|
|
|
(30,961)
|
|
Total Cost of Coal
Sold
|
|
$
|
251,133
|
|
|
$
|
255,831
|
|
|
$
|
1,020,821
|
|
|
$
|
981,672
|
|
Total Tons Sold (in
millions)
|
|
6.7
|
|
|
7.0
|
|
|
27.3
|
|
|
27.7
|
|
Average Revenue per
Ton Sold
|
|
$
|
45.14
|
|
|
$
|
49.81
|
|
|
$
|
47.17
|
|
|
$
|
49.28
|
|
Average Cash Cost
of Coal Sold per Ton
|
|
30.38
|
|
|
30.54
|
|
|
30.97
|
|
|
29.29
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
6.93
|
|
|
6.10
|
|
|
6.40
|
|
|
6.17
|
|
Average Cost of Coal
Sold per Ton
|
|
37.31
|
|
|
36.64
|
|
|
37.37
|
|
|
35.46
|
|
Average Margin per
Ton Sold
|
|
7.83
|
|
|
13.17
|
|
|
9.80
|
|
|
13.82
|
|
Add: Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
6.93
|
|
|
6.10
|
|
|
6.40
|
|
|
6.17
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
14.76
|
|
|
$
|
19.27
|
|
|
$
|
16.20
|
|
|
$
|
19.99
|
|
We define adjusted EBITDA as (i) net income (loss) plus income
taxes, net interest expense and depreciation, depletion and
amortization, as adjusted for (ii) certain non-cash items, such as
long-term incentive awards. The GAAP measure most directly
comparable to adjusted EBITDA is net income (loss).
The following tables present a reconciliation of net income
(loss) to adjusted EBITDA, the most directly comparable GAAP
financial measure, on a historical basis, for each of the periods
indicated.
|
|
Three Months Ended
December 31, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
41,082
|
|
|
$
|
8,614
|
|
|
$
|
(32,295)
|
|
|
$
|
17,401
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
4,782
|
|
|
4,782
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,549
|
|
|
14,675
|
|
|
16,224
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(538)
|
|
|
(538)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
41,082
|
|
|
10,163
|
|
|
(13,376)
|
|
|
37,869
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
49,492
|
|
|
1,170
|
|
|
5,190
|
|
|
55,852
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
90,574
|
|
|
$
|
11,333
|
|
|
$
|
(8,186)
|
|
|
$
|
93,721
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
(497)
|
|
|
$
|
(46)
|
|
|
$
|
(46)
|
|
|
$
|
(589)
|
|
Gain on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
(989)
|
|
|
(989)
|
|
Total Pre-tax
Adjustments
|
|
(497)
|
|
|
(46)
|
|
|
(1,035)
|
|
|
(1,578)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
90,077
|
|
|
$
|
11,287
|
|
|
$
|
(9,221)
|
|
|
$
|
92,143
|
|
|
|
Three Months Ended
December 31, 2018
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
70,501
|
|
|
$
|
8,808
|
|
|
$
|
(33,275)
|
|
|
$
|
46,034
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
301
|
|
|
301
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
18,924
|
|
|
20,437
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(555)
|
|
|
(555)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
70,501
|
|
|
10,321
|
|
|
(14,605)
|
|
|
66,217
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
44,082
|
|
|
908
|
|
|
600
|
|
|
45,590
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
114,583
|
|
|
$
|
11,229
|
|
|
$
|
(14,005)
|
|
|
$
|
111,807
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
2,380
|
|
|
$
|
108
|
|
|
$
|
109
|
|
|
$
|
2,597
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
773
|
|
|
773
|
|
Total Pre-tax
Adjustments
|
|
2,380
|
|
|
108
|
|
|
882
|
|
|
3,370
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
116,963
|
|
|
$
|
11,337
|
|
|
$
|
(13,123)
|
|
|
$
|
115,177
|
|
|
|
For the Year Ended
December 31, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
197,112
|
|
|
$
|
33,758
|
|
|
$
|
(137,312)
|
|
|
$
|
93,558
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
4,539
|
|
|
4,539
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
6,088
|
|
|
60,376
|
|
|
66,464
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(2,937)
|
|
|
(2,937)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
197,112
|
|
|
39,846
|
|
|
(75,334)
|
|
|
161,624
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
185,616
|
|
|
4,078
|
|
|
17,403
|
|
|
207,097
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
382,728
|
|
|
$
|
43,924
|
|
|
$
|
(57,931)
|
|
|
$
|
368,721
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
11,626
|
|
|
$
|
567
|
|
|
$
|
567
|
|
|
$
|
12,760
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
24,455
|
|
|
24,455
|
|
Total Pre-tax
Adjustments
|
|
11,626
|
|
|
567
|
|
|
25,022
|
|
|
37,215
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
394,354
|
|
|
$
|
44,491
|
|
|
$
|
(32,909)
|
|
|
$
|
405,936
|
|
|
|
For the Year Ended
December 31, 2018
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
291,418
|
|
|
$
|
30,647
|
|
|
$
|
(143,280)
|
|
|
$
|
178,785
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
8,828
|
|
|
8,828
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
6,052
|
|
|
77,796
|
|
|
83,848
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(2,146)
|
|
|
(2,146)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
291,418
|
|
|
36,699
|
|
|
(58,802)
|
|
|
269,315
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
179,156
|
|
|
3,782
|
|
|
18,326
|
|
|
201,264
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
470,574
|
|
|
$
|
40,481
|
|
|
$
|
(40,476)
|
|
|
$
|
470,579
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
9,395
|
|
|
$
|
420
|
|
|
$
|
420
|
|
|
$
|
10,235
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
3,922
|
|
|
3,922
|
|
Total Pre-tax
Adjustments
|
|
9,395
|
|
|
420
|
|
|
4,342
|
|
|
14,157
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
479,969
|
|
|
$
|
40,901
|
|
|
$
|
(36,134)
|
|
|
$
|
484,736
|
|
We define adjusted net income as net income adjusted for certain
unusual and/or infrequent transactions, such as loss on debt
extinguishment resulting from the refinancing of the Company's
credit facilities. We define adjusted dilutive earnings per share
(EPS) as adjusted net income attributable to CONSOL Energy Inc.
shareholders divided by the weighted average shares outstanding
during the reporting period. The GAAP measure most directly
comparable to adjusted net income and adjusted dilutive EPS is net
income and dilutive earnings per share, respectively.
The following table presents a reconciliation of adjusted net
income and adjusted dilutive EPS to net income and dilutive
earnings per share, the most directly comparable GAAP financial
measures, on a historical basis, for each of the periods
indicated.
|
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
17,401
|
|
|
$
|
46,034
|
|
|
$
|
93,558
|
|
|
$
|
178,785
|
|
Plus: Adjustments to Net Income
|
|
—
|
|
|
—
|
|
|
18,702
|
|
|
—
|
|
Plus: Tax Benefit of Adjustments to Net Income
|
|
—
|
|
|
—
|
|
|
473
|
|
|
—
|
|
Adjusted Net
Income
|
|
17,401
|
|
|
46,034
|
|
|
112,733
|
|
|
178,785
|
|
Less: Net Income Attributable to Noncontrolling
Interest
|
|
3,455
|
|
|
6,362
|
|
|
17,557
|
|
|
25,809
|
|
Adjusted Net Income
Attributable to CONSOL Energy Inc.
Shareholders
|
|
$
|
13,946
|
|
|
$
|
39,672
|
|
|
$
|
95,176
|
|
|
$
|
152,976
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Diluted Shares of Common Stock Outstanding
|
|
26,061,930
|
|
|
28,213,975
|
|
|
27,071,108
|
|
|
28,419,762
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
Dilutive Earnings per
Share
|
|
$
|
0.54
|
|
|
$
|
1.41
|
|
|
$
|
2.81
|
|
|
$
|
5.38
|
|
Plus: Adjustments to Net Income Attributable to CONSOL
Energy Inc. Shareholders
|
|
—
|
|
|
—
|
|
|
0.71
|
|
|
—
|
|
Adjusted Dilutive
Earnings per Share
|
|
$
|
0.54
|
|
|
$
|
1.41
|
|
|
$
|
3.52
|
|
|
$
|
5.38
|
|
We define net leverage ratio as the ratio of net debt to the
last twelve months' ("LTM") earnings before interest expense and
depreciation, depletion and amortization, adjusted for certain
non-cash items, such as long-term incentive awards, amortization of
debt issuance costs and capitalized interest.
The following table presents a reconciliation of net leverage
ratio (in thousands).
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Net
Income
|
|
$
|
93,558
|
|
|
$
|
178,785
|
|
Plus:
|
|
|
|
|
Interest Expense, net
|
|
66,464
|
|
|
83,848
|
|
Depreciation, Depletion and Amortization
|
|
207,097
|
|
|
201,264
|
|
Income Taxes
|
|
4,539
|
|
|
8,828
|
|
Stock/Unit-Based Compensation
|
|
12,760
|
|
|
10,235
|
|
Loss
on Debt Extinguishment
|
|
24,455
|
|
|
3,922
|
|
CCR
Adjusted EBITDA per Credit Agreement
|
|
(102,189)
|
|
|
(122,844)
|
|
Cash
Distributions from CONSOL Coal Resources LP
|
|
35,398
|
|
|
35,124
|
|
Cash
Payments for Legacy Employee Liabilities, Net
of Non-Cash Expense
|
|
(18,521)
|
|
|
(16,563)
|
|
Other Adjustments to Net Income
|
|
5,225
|
|
|
2,932
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
328,786
|
|
|
$
|
385,531
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
390,148
|
|
|
$
|
497,475
|
|
Senior Secured Second Lien Notes
|
|
221,628
|
|
|
274,276
|
|
MEDCO Revenue Bonds
|
|
102,865
|
|
|
102,865
|
|
Advance Royalty Commitments
|
|
1,895
|
|
|
2,261
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
$
|
716,536
|
|
|
$
|
876,877
|
|
Less:
|
|
|
|
|
Advance Royalty Commitments
|
|
$
|
1,895
|
|
|
$
|
2,261
|
|
Cash
on Hand
|
|
79,750
|
|
|
234,674
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
634,891
|
|
|
$
|
639,942
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
1.9
|
|
|
1.7
|
|
Free cash flow, organic free cash flow and organic free cash
flow net to CEIX shareholders are non-GAAP financial measures.
Management believes that these measures are meaningful to investors
because management reviews cash flows generated from operations and
non-core asset sales after taking into consideration capital
expenditures due to the fact that these expenditures are considered
necessary to maintain and expand CONSOL's asset base and are
expected to generate future cash flows from operations. It is
important to note that free cash flow, organic free cash flow and
organic free cash flow net to CEIX shareholders do not represent
the residual cash flow available for discretionary expenditures
since other non-discretionary expenditures, such as mandatory debt
service requirements, are not deducted from the measure. The
following tables present a reconciliation of free cash flow,
organic free cash flow and organic free cash flow net to CEIX
shareholders to net cash provided by operations, the most directly
comparable GAAP financial measure, on a historical basis, for each
of the periods indicated.
Organic Free
Cash Flow
|
Three Months
Ended
December 31,
2019
|
|
Three Months
Ended
December 31,
2018
|
|
Year Ended
December 31,
2019
|
|
Year Ended
December 31,
2018
|
Net Cash Provided
by Operations
|
$
|
21,383
|
|
|
$
|
83,273
|
|
|
$
|
244,566
|
|
|
$
|
413,525
|
|
Capital
Expenditures
|
(38,264)
|
|
|
(48,894)
|
|
|
(169,739)
|
|
|
(145,749)
|
|
Organic Free Cash
Flow
|
$
|
(16,881)
|
|
|
$
|
34,379
|
|
|
$
|
74,827
|
|
|
$
|
267,776
|
|
|
|
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
(5,546)
|
|
|
(5,502)
|
|
|
(22,220)
|
|
|
(22,265)
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
$
|
(22,427)
|
|
|
$
|
28,877
|
|
|
$
|
52,607
|
|
|
$
|
245,511
|
|
Free Cash
Flow
|
Three Months
Ended
December 31, 2019
|
|
Three Months
Ended
December 31, 2018
|
Net Cash Provided
by Operating Activities
|
$
|
21,383
|
|
|
$
|
83,273
|
|
|
|
|
|
Capital
Expenditures
|
(38,264)
|
|
|
(48,894)
|
|
Proceeds from Sales
of Assets
|
186
|
|
|
735
|
|
Free Cash
Flow
|
$
|
(16,695)
|
|
|
$
|
35,114
|
|
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of the federal securities laws. With
the exception of historical matters, the matters discussed in this
press release are forward-looking statements (as defined in Section
21E of the Securities Exchange Act of 1934, as amended) that
involve risks and uncertainties that could cause actual results to
differ materially from results projected in or implied by such
forward-looking statements. 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 "anticipate," "believe,"
"could," "continue," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "should," "will," 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. 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. Specific risks, contingencies and
uncertainties are discussed in more detail in our filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release speak only as of the date of this press
release and CEIX disclaims any intention or obligation to update
publicly any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
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SOURCE CONSOL Energy Inc.