CANONSBURG, Pa., May 11, 2020 /PRNewswire/ -- Today, CONSOL
Energy Inc. (NYSE: CEIX) reported financial and operating results
for the period ended March 31, 2020.
First Quarter 2020 Highlights Include:
- GAAP net income and cash provided by operating activities of
$2.5 million and $51.4 million, respectively;
- Total dilutive earnings per share of $0.09;
- Adjusted EBITDA1 of $62.9
million;
- Organic free cash flow net to CEIX shareholders1
of $18.6 million;
- Repurchased $43.2 million of
2nd Lien debt during the quarter;
- Successfully amended and extended the term of our accounts
receivable securitization facility while maintaining the borrowing
capacity and interest rate;
- Raised $16.3 million through
an equipment finance lease transaction and added an additional
$20 million commitment for future
financing needs;
- Increased repurchase authorization to $270 million from $200
million; and
- Total liquidity of $398
million at the end of 1Q20 including cash and cash
equivalents of $78 million.
Management Comments
"The United States, along with
other economies worldwide, has seen a significant energy demand
decline year-to-date driven by widespread government-imposed
lockdowns in response to the COVID-19 pandemic," said Jimmy Brock, President and Chief Executive
Officer of CONSOL Energy Inc. "Coal producers, just like companies
in other industries, are facing unprecedented demand decline, which
has weighed on our operational, sales and financial performances
year-to-date. While the duration and breadth of this ongoing
pandemic are uncertain, management has undertaken a number of steps
to reduce costs and has adjusted our operations accordingly to
provide free cash flow generation, deleveraging and liquidity
enhancement."
"On the safety front, our Harvey Mine, Bailey Preparation Plant,
CONSOL Marine Terminal (CMT) and Itmann project each had ZERO
recordable incidents during the first quarter. However, coming off
a very strong safety performance in 2019, we recorded a slight
uptick at the Pennsylvania Mining Complex (PAMC) in terms of total
recordable incidents. Nonetheless, we continue to outperform
industry averages for safety performances across our
operations."
Pennsylvania Mining Complex Review and Outlook
PAMC Sales and Marketing
Our marketing team sold 5.9 million tons of coal during the
first quarter of 2020 at an average revenue per ton sold of
$43.16, compared to 6.7 million tons
at an average revenue per ton sold of $49.38 in the year-ago period. The average
revenue per ton sold was impacted by a reduction in revenues on our
netback contracts in the first quarter due to lower PJM West power
prices and volumes, as well as lower average pricing on export
sales. During the first quarter of 2020, average PJM West day-ahead
power prices declined by 33.4% compared to the year-ago period, but
our average revenue per ton sold across the portfolio only declined
by 12.6% due to our strong contracted position. We also negotiated
buyouts of some volumes from customer contracts in exchange for
payment of certain fees to us during the first quarter of 2020,
which contributed $10.8 million to
our miscellaneous other income and resulted in a reduction in our
PAMC average revenue per ton sold during the quarter.
On the domestic front, according to the U.S. Energy Information
Administration, inventories at domestic power plants stood at
approximately 140 million tons at the end of February, an increase
of roughly 41% from year-ago levels as weak demand trends,
particularly from industrial and business consumers, and low
natural gas prices weighed on our customers' ability to profitably
burn coal. On a positive note, low natural gas and crude oil prices
are also leading to reduced capital budgets for E&P companies.
Industry sources now estimate that E&P capital expenditures
will decline by 40-45% in 2020. As a result of this reduced
investment, several industry observers now expect natural gas
prices to rise above $3/mmbtu in
2021, as gas production declines due to lack of capital spending,
which we believe will make coal more attractive to power plant
customers.
Internationally, thermal coal prices have declined since the
beginning of 2019 due to a pullback in global LNG prices and, more
recently, due to global COVID-19-related shutdowns. We are already
seeing a seaborne supply response occurring from several countries,
which has helped to stabilize API 2 and Newcastle prices, albeit at
lower levels. During these turbulent times, we are still finding
opportunities to capture and grow market share in the export
markets. Recently, our customer, Xcoal, won a contract to supply
1.8 million tons of coal to the Punta Catalina power plant in the
Dominican Republic. To fulfill
that contract, Xcoal increased the volume of tons to be acquired
under its supply contract with us. In aggregate, we are contracted
for 10 plus million export tons in 2020.
The PAMC is currently 98% contracted for 2020 and 44% contracted
for 2021, assuming annual production of 26 million tons. Despite
our strong contracted position, we face significant uncertainties
given the ongoing economic slowdown due to the COVID-19
pandemic-related shutdowns. We are also collaborating with our
customers to help them manage the contractual obligations that we
both have, which could result in some 2020 contracted volumes being
bought out or deferred into 2021.
Operations Summary
During the first quarter of 2020, we faced reduced customer
demand and a longwall move at our Harvey mine, which weighed
negatively on our operating performance. The PAMC produced 6.0
million tons, compared to 6.8 million tons in the first quarter of
2019.
The Company's total costs during the first quarter of 2020 were
$286.9 million compared to
$351.2 million in the year-ago
quarter. The decline in overall costs was driven by reduced
production volume and reduced operating days, as we sought to match
production with demand. However, the reduced production volume also
created an adverse impact on our operating leverage, which resulted
in a higher average cash cost of coal sold per ton1
compared to the year-ago period. Average cash cost of coal sold per
ton1 was $32.41 compared
to $29.71 in the year-ago quarter.
Our Enlow Fork mine faced high subsidence-related costs in the
first quarter of 2020, which also impacted our overall cost
performance. At the beginning of the second quarter, we temporarily
idled our Enlow Fork mine to reduce our overall average cash cost
of coal sold per ton1, as weak demand trends continued
and several of our customers chose to buy out a portion of their
previously committed volumes.
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
March 31,
2019
|
|
|
|
|
|
Coal
Production
|
million
tons
|
6.0
|
|
6.8
|
Coal Sales
|
million
tons
|
5.9
|
|
6.7
|
Average Revenue per
Ton Sold
|
per ton
|
$43.16
|
|
$49.38
|
Average Cash Cost of
Coal Sold1
|
per ton
|
$32.41
|
|
$29.71
|
Average Cash Margin
per Ton Sold1
|
per ton
|
$10.75
|
|
$19.67
|
CONSOL Marine Terminal (CMT) Review
For the first quarter of 2020, throughput volumes out of the
CONSOL Marine Terminal were 3.4 million tons compared to 4.0
million tons in the year-ago period. While throughput volumes were
lower compared to the year-ago quarter, the negative impact on
terminal revenues were lessened as a result of the take-or-pay
contract that is in place with our largest CMT customer. For the
first quarter of 2020, terminal revenues and cash operating costs
were $16.5 million and $5.2 million, respectively, compared to
$17.8 million and $5.6 million, respectively, in the year-ago
period. Accordingly, CMT net income and CMT adjusted
EBITDA1 were $7.5 million
and $10.6 million, respectively,
compared to the year-ago period of $9.2
million and $12.0 million,
respectively.
Debt Repurchases and Liquidity Update
During the first quarter of 2020, CEIX completed a number of
liquidity-enhancing transactions that boosted liquidity despite a
significant decrease in organic free cash flow versus the year-ago
period. We were able to close on the refinancing of a shield
rebuild using a finance lease transaction which generated cash
proceeds of $16.3 million, secured a
commitment to provide $20 million for
future equipment financing needs, and successfully amended and
extended the term of our accounts receivable securitization
facility.
During the first quarter of 2020, CEIX spent $25.5 million to retire $43.2 million of outstanding second lien debt,
which continued to trade well below its par value. Furthermore, we
made repayments of $4.9 million,
$3.8 million and $0.7 million on our finance leases, Term Loan A
and Term Loan B, respectively. This brings our total debt reduction
in the quarter to $52.6 million,
before accounting for the equipment finance lease transaction
mentioned previously. In aggregate, as of March 31, 2020, our total liquidity was
$398 million, including $78 million of cash and cash equivalents. Our
$400 million revolving credit
facility has no borrowings and is currently only used for providing
letters of credit with $80 million
issued.
The Board of Directors of CCR's general partner also made the
decision to temporarily suspend the quarterly distribution to all
of CCR's unitholders.
Increasing Repurchase Authorization
CEIX's Board of Directors continues to see debt repurchases as a
very effective tool to reduce the leverage ratio, strengthen the
balance sheet, and create long term shareholder value. In order to
continue to execute this strategy, the board has increased its
previously authorized repurchase program to an aggregate amount of
up to $270 million from $200 million, while extending the duration of the
program by two years to June 30,
2022. With this approval, CEIX now has approximately
$100 million of availability to
repurchase its Term Loan B, Senior Secured Second Lien Notes, CEIX
common shares and CCR common units.
Itmann Project Update
During the first quarter of 2020, we completed box cut
excavation for the Itmann No. 5 mine. MSHA approved our initial
roof control plan on March 31, 2020,
and we are happy to announce that we mined our first cut of coal
and shipped product to a third-party processor in early April.
Permit applications for the new preparation plant and refuse
facility have been submitted and are under review. Itmann project
capital expenditures for the first quarter of 2020 were
$4.3 million, which consisted mostly
of previous commitments for box cut excavation and equipment items
for the first continuous mining section. Earlier this year, we
announced that we have slowed the pace of capital spending on the
Itmann project, and we are continuing our development efforts with
capital conservation in mind.
2020 Guidance
Given the ongoing uncertainty associated with the COVID-19
pandemic-driven economic slowdown, we are working with our
customers to manage their shipments and inventory levels. However,
due to the difficulty in forecasting the duration of this economic
slowdown, our 2020 guidance remains suspended. Nonetheless, our
team remains ready and is looking forward to eventual demand
recovery.
First Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Coal Resources
LP, during which management will discuss the first quarter 2020
financial and operational results, is scheduled for May 11,
2020 at 11:00 AM eastern time. 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-Q with the Securities and Exchange
Commission (SEC) reporting our results for the quarter ended
March 31, 2020 on May 11, 2020. Investors seeking our detailed
financial statements can refer to the Form 10-Q once it has been
filed with the SEC.
Footnotes:
1"Adjusted EBITDA", "Organic Free Cash Flow Net to
CEIX Shareholders" and "CMT Adjusted EBITDA" 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".
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg, Pennsylvania-based producer and
exporter of high-Btu bituminous thermal coal and metallurgical
coal. It owns and operates some of the most productive longwall
mining operations in the Northern Appalachian Basin and is
developing a new metallurgical coal mine (the Itmann project) in
the Central Appalachian Basin. CONSOL's 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 Cash Flows
The following table presents the condensed consolidated
statements of cash flows for the three months ended March 31,
2020 and 2019 (in thousands):
|
Three Months
Ended March
31,
|
|
2020
|
|
2019
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
|
2,475
|
|
|
$
|
20,303
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation,
Depletion and Amortization
|
54,943
|
|
|
50,724
|
|
Other Non-Cash
Adjustments to Net Income
|
(8,138)
|
|
|
31,380
|
|
Changes in Working
Capital
|
2,120
|
|
|
(20,236)
|
|
Net Cash Provided by
Operating Activities
|
51,400
|
|
|
82,171
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(27,178)
|
|
|
(34,171)
|
|
Proceeds from Sales
of Assets
|
—
|
|
|
311
|
|
Net Cash Used in
Investing Activities
|
(27,178)
|
|
|
(33,860)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Net Payments on
Long-Term Debt, Including Fees
|
(18,698)
|
|
|
(114,119)
|
|
Distributions to
Noncontrolling Interest
|
(5,575)
|
|
|
(5,559)
|
|
Other Financing
Activities
|
(1,415)
|
|
|
(16,800)
|
|
Net Cash Used in
Financing Activities
|
(25,688)
|
|
|
(136,478)
|
|
Net Decrease in
Cash and Cash Equivalents and Restricted Cash
|
$
|
(1,466)
|
|
|
$
|
(88,167)
|
|
Cash and Cash
Equivalents and Restricted Cash at Beginning of Period
|
80,293
|
|
|
264,935
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
$
|
78,827
|
|
|
$
|
176,768
|
|
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 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
cost of coal sold and 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 March
31,
|
|
|
2020
|
|
2019
|
Total Costs and
Expenses
|
|
$
|
286,873
|
|
|
$
|
351,160
|
|
Freight
Expense
|
|
(3,147)
|
|
|
(6,662)
|
|
Selling, General and
Administrative Costs
|
|
(17,670)
|
|
|
(21,923)
|
|
Gain (Loss) on Debt
Extinguishment
|
|
16,833
|
|
|
(23,143)
|
|
Interest Expense,
net
|
|
(15,671)
|
|
|
(18,596)
|
|
Other Costs
(Non-Production)
|
|
(20,882)
|
|
|
(30,793)
|
|
Depreciation,
Depletion and Amortization (Non-Production)
|
|
(9,363)
|
|
|
(8,165)
|
|
Cost of Coal
Sold
|
|
$
|
236,973
|
|
|
$
|
241,878
|
|
Depreciation,
Depletion and Amortization (Production)
|
|
(45,580)
|
|
|
(42,559)
|
|
Cash Cost of Coal
Sold
|
|
$
|
191,393
|
|
|
$
|
199,319
|
|
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 March
31,
|
|
|
2020
|
|
2019
|
Total Coal
Revenue
|
|
$
|
255,452
|
|
|
$
|
332,502
|
|
Operating and Other Costs
|
|
212,275
|
|
|
230,112
|
|
Less: Other Costs (Non-Production)
|
|
(20,882)
|
|
|
(30,793)
|
|
Total Cash Cost of
Coal Sold
|
|
191,393
|
|
|
199,319
|
|
Add: Depreciation, Depletion and Amortization
|
|
54,943
|
|
|
50,724
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
(9,363)
|
|
|
(8,165)
|
|
Total Cost of Coal
Sold
|
|
$
|
236,973
|
|
|
$
|
241,878
|
|
Total Tons Sold (in
millions)
|
|
5.9
|
|
|
6.7
|
|
Average Revenue per
Ton Sold
|
|
$
|
43.16
|
|
|
$
|
49.38
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
32.41
|
|
|
29.71
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
7.63
|
|
|
6.21
|
|
Average Cost of Coal
Sold per Ton
|
|
40.04
|
|
|
35.92
|
|
Average Margin per
Ton Sold
|
|
3.12
|
|
|
13.46
|
|
Add:
Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
7.63
|
|
|
6.21
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
10.75
|
|
|
$
|
19.67
|
|
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
March 31, 2020
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA
Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
10,875
|
|
|
$
|
7,510
|
|
|
$
|
(15,910)
|
|
|
$
|
2,475
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
1,908
|
|
|
1,908
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,544
|
|
|
14,127
|
|
|
15,671
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(244)
|
|
|
(244)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
10,875
|
|
|
9,054
|
|
|
(119)
|
|
|
19,810
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
48,418
|
|
|
1,257
|
|
|
5,268
|
|
|
54,943
|
|
|
|
|
|
|
|
|
|
|
Earnings Before
Interest, Taxes and DD&A (EBITDA)
|
|
$
|
59,293
|
|
|
$
|
10,311
|
|
|
$
|
5,149
|
|
|
$
|
74,753
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
4,286
|
|
|
$
|
243
|
|
|
$
|
485
|
|
|
$
|
5,014
|
|
Gain on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
(16,833)
|
|
|
(16,833)
|
|
Total Pre-tax
Adjustments
|
|
4,286
|
|
|
243
|
|
|
(16,348)
|
|
|
(11,819)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
63,579
|
|
|
$
|
10,554
|
|
|
$
|
(11,199)
|
|
|
$
|
62,934
|
|
|
|
Three Months Ended
March 31, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA
Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
64,698
|
|
|
$
|
9,236
|
|
|
$
|
(53,631)
|
|
|
$
|
20,303
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
—
|
|
|
—
|
|
|
(850)
|
|
|
(850)
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
17,083
|
|
|
18,596
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(887)
|
|
|
(887)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
64,698
|
|
|
10,749
|
|
|
(38,285)
|
|
|
37,162
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
44,868
|
|
|
920
|
|
|
4,936
|
|
|
50,724
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
109,566
|
|
|
$
|
11,669
|
|
|
$
|
(33,349)
|
|
|
$
|
87,886
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
6,744
|
|
|
$
|
353
|
|
|
$
|
353
|
|
|
$
|
7,450
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
23,143
|
|
|
23,143
|
|
Total Pre-tax
Adjustments
|
|
6,744
|
|
|
353
|
|
|
23,496
|
|
|
30,593
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
116,310
|
|
|
$
|
12,022
|
|
|
$
|
(9,853)
|
|
|
$
|
118,479
|
|
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
|
|
|
March 31,
2020
|
|
March 31,
2019
|
Net
Income
|
|
$
|
75,730
|
|
|
$
|
128,130
|
|
Plus:
|
|
|
|
|
Interest Expense, net
|
|
63,539
|
|
|
81,399
|
|
Depreciation, Depletion and Amortization
|
|
211,316
|
|
|
202,517
|
|
Income Taxes
|
|
7,297
|
|
|
1,793
|
|
Stock/Unit-Based Compensation
|
|
10,324
|
|
|
15,838
|
|
(Gain) Loss on Debt Extinguishment
|
|
(15,521)
|
|
|
25,639
|
|
CCR
Adjusted EBITDA per Credit Agreement
|
|
(88,002)
|
|
|
(116,198)
|
|
Cash
Distributions from CONSOL Coal Resources LP
|
|
26,716
|
|
|
35,210
|
|
Cash
Payments for Legacy Employee Liabilities, Net
of Non-Cash Expense
|
|
(19,750)
|
|
|
(15,715)
|
|
Other Adjustments to Net Income
|
|
8,759
|
|
|
3,933
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
280,408
|
|
|
$
|
362,546
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
406,077
|
|
|
$
|
404,280
|
|
Senior Secured Second Lien Notes
|
|
178,452
|
|
|
267,276
|
|
MEDCO Revenue Bonds
|
|
102,865
|
|
|
102,865
|
|
Advance Royalty Commitments
|
|
1,895
|
|
|
2,261
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
689,289
|
|
|
776,682
|
|
Less:
|
|
|
|
|
Advance Royalty Commitments
|
|
1,895
|
|
|
2,261
|
|
Cash
on Hand
|
|
77,943
|
|
|
154,762
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
609,451
|
|
|
$
|
619,659
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
2.2
|
|
|
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.
|
Three Months
Ended
|
Organic Free
Cash Flow
|
March 31,
2020
|
|
March 31,
2019
|
Net Cash Provided
by Operations
|
$
|
51,400
|
|
|
$
|
82,171
|
|
Capital
Expenditures
|
(27,178)
|
|
|
(34,171)
|
|
Organic Free Cash
Flow
|
$
|
24,222
|
|
|
$
|
48,000
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
(5,575)
|
|
|
(5,559)
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
$
|
18,647
|
|
|
$
|
42,441
|
|
Free Cash
Flow
|
Three Months
Ended
March 31,
2020
|
|
Three Months
Ended
March 31,
2019
|
Net Cash Provided
by Operations
|
$
|
51,400
|
|
|
$
|
82,171
|
|
|
|
|
|
Capital
Expenditures
|
(27,178)
|
|
|
(34,171)
|
|
Proceeds from Sales
of Assets
|
—
|
|
|
311
|
|
Free Cash
Flow
|
$
|
24,222
|
|
|
$
|
48,311
|
|
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.
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Dollars in
thousands, except per share data)
|
(unaudited)
|
|
|
Three Months
Ended
March 31,
|
Revenue and Other
Income:
|
2020
|
|
2019
|
Coal
Revenue
|
$
|
255,452
|
|
|
$
|
332,502
|
|
Terminal
Revenue
|
16,501
|
|
|
17,818
|
|
Freight
Revenue
|
3,147
|
|
|
6,662
|
|
Miscellaneous Other
Income
|
16,170
|
|
|
13,292
|
|
(Loss) Gain on Sale
of Assets
|
(14)
|
|
|
339
|
|
Total Revenue and
Other Income
|
291,256
|
|
|
370,613
|
|
Costs and
Expenses:
|
|
|
|
Operating and Other
Costs
|
212,275
|
|
|
230,112
|
|
Depreciation,
Depletion and Amortization
|
54,943
|
|
|
50,724
|
|
Freight
Expense
|
3,147
|
|
|
6,662
|
|
Selling, General and
Administrative Costs
|
17,670
|
|
|
21,923
|
|
(Gain) Loss on Debt
Extinguishment
|
(16,833)
|
|
|
23,143
|
|
Interest Expense,
net
|
15,671
|
|
|
18,596
|
|
Total Costs and
Expenses
|
286,873
|
|
|
351,160
|
|
Earnings Before
Income Tax
|
4,383
|
|
|
19,453
|
|
Income Tax Expense
(Benefit)
|
1,908
|
|
|
(850)
|
|
Net
Income
|
2,475
|
|
|
20,303
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
108
|
|
|
5,868
|
|
Net Income
Attributable to CONSOL Energy Inc. Shareholders
|
$
|
2,367
|
|
|
$
|
14,435
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
Total Basic Earnings
per Share
|
$
|
0.09
|
|
|
$
|
0.52
|
|
Total Dilutive
Earnings per Share
|
$
|
0.09
|
|
|
$
|
0.52
|
|
CONSOL ENERGY
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(Dollars in
thousands)
|
|
|
(Unaudited)
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
78,166
|
|
|
$
|
80,293
|
|
Restricted
Cash
|
661
|
|
|
—
|
|
Accounts and Notes
Receivable
|
|
|
|
Trade
Receivables, net of Allowance
|
113,098
|
|
|
131,688
|
|
Other
Receivables, net of Allowance
|
33,878
|
|
|
40,984
|
|
Inventories
|
58,638
|
|
|
54,131
|
|
Prepaid Expenses and
Other Assets
|
26,302
|
|
|
30,933
|
|
Total Current
Assets
|
310,743
|
|
|
338,029
|
|
Property, Plant and
Equipment:
|
|
|
|
Property, Plant and
Equipment
|
5,053,698
|
|
|
5,008,180
|
|
Less—Accumulated
Depreciation, Depletion and Amortization
|
2,965,903
|
|
|
2,916,015
|
|
Total Property,
Plant and Equipment—Net
|
2,087,795
|
|
|
2,092,165
|
|
Other
Assets:
|
|
|
|
Deferred Income
Taxes
|
102,425
|
|
|
103,505
|
|
Right of Use Asset -
Operating Leases
|
67,787
|
|
|
72,632
|
|
Other, net of
Allowance
|
84,718
|
|
|
87,471
|
|
Total Other
Assets
|
254,930
|
|
|
263,608
|
|
TOTAL
ASSETS
|
$
|
2,653,468
|
|
|
$
|
2,693,802
|
|
CONSOL ENERGY
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
Continued
|
(Dollars in
thousands)
|
|
|
(Unaudited)
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$
|
89,556
|
|
|
$
|
106,223
|
|
Current Portion of
Long-Term Debt
|
67,441
|
|
|
50,272
|
|
Other Accrued
Liabilities
|
237,261
|
|
|
235,769
|
|
Total Current
Liabilities
|
394,258
|
|
|
392,264
|
|
Long-Term
Debt:
|
|
|
|
Long-Term
Debt
|
604,927
|
|
|
653,802
|
|
Finance Lease
Obligations
|
21,942
|
|
|
9,036
|
|
Total Long-Term
Debt
|
626,869
|
|
|
662,838
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
Postretirement
Benefits Other Than Pensions
|
429,085
|
|
|
432,496
|
|
Pneumoconiosis
Benefits
|
201,718
|
|
|
202,142
|
|
Asset Retirement
Obligations
|
254,805
|
|
|
250,211
|
|
Workers'
Compensation
|
60,961
|
|
|
61,194
|
|
Salary
Retirement
|
44,439
|
|
|
49,930
|
|
Operating Lease
Liability
|
52,975
|
|
|
55,413
|
|
Other
|
17,268
|
|
|
14,919
|
|
Total Deferred
Credits and Other Liabilities
|
1,061,251
|
|
|
1,066,305
|
|
TOTAL
LIABILITIES
|
2,082,378
|
|
|
2,121,407
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common Stock, $0.01
Par Value; 62,500,000 Shares Authorized, 26,029,202 Issued and
Outstanding at March 31, 2020; 25,932,618 Issued and Outstanding at
December 31, 2019
|
260
|
|
|
259
|
|
Capital in Excess of
Par Value
|
528,062
|
|
|
523,762
|
|
Retained
Earnings
|
258,972
|
|
|
259,903
|
|
Accumulated Other
Comprehensive Loss
|
(347,889)
|
|
|
(348,725)
|
|
Total CONSOL
Energy Inc. Stockholders' Equity
|
439,405
|
|
|
435,199
|
|
Noncontrolling
Interest
|
131,685
|
|
|
137,196
|
|
TOTAL
EQUITY
|
571,090
|
|
|
572,395
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
2,653,468
|
|
|
$
|
2,693,802
|
|
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SOURCE CONSOL Energy Inc.