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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________
FORM 10-Q
__________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-38147
__________________________________________________
CONSOL Energy Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
82-1954058
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
1000 CONSOL Energy Drive, Suite 100
Canonsburg, PA 15317-6506
(724) 416-8300
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
__________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
CEIX
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer      Accelerated filer      Non-accelerated filer      Smaller reporting company   Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  

CONSOL Energy Inc. had 26,029,202 shares of common stock, $0.01 par value, outstanding at May 1, 2020.
 



TABLE OF CONTENTS

 
 
 
 
Part I. Financial Information
Page
 
 
 
Item 1.
Financial Statements
 
 
Consolidated Statements of Income for the three months ended March 31, 2020 and 2019
 
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019
 
Consolidated Balance Sheets at March 31, 2020 and December 31, 2019
 
Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2020 and 2019
 
Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019
 
Notes to Consolidated Financial Statements
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
Part II. Other Information
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
 
 
Item 4.
 
 
 
Item 6.
 
 
 
 



















2


IMPORTANT DEFINITIONS REFERENCED IN THIS QUARTERLY REPORT
Unless the context otherwise requires:

“CONSOL Energy,” “we,” “our,” “us,” “our Company” and “the Company” refer to CONSOL Energy Inc. and its subsidiaries;

“Btu” means one British Thermal unit;

“Coal Business” refers to all of our interest in the Pennsylvania Mining Complex (PAMC) and certain related coal assets, including: (i) a 25% undivided interest in the PAMC; (ii) the CONSOL Marine Terminal; (iii) development of the Itmann Mine; and (iv) undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and Illinois basins and certain related coal assets and liabilities;

“CONSOL Marine Terminal” refers to the terminal operations located at the Port of Baltimore;

distribution refers to the pro rata distribution of the Company's issued and outstanding shares of common stock to its former parent's stockholders on November 29, 2017;

“former parent” refers to CNX Resources Corporation and its consolidated subsidiaries;

“General Partner” refers to CONSOL Coal Resources GP LLC, a Delaware limited liability company;

“Greenfield Reserves” means those undeveloped reserves owned by the Company in the Northern Appalachian, Central Appalachian and Illinois basins that are not associated with the Pennsylvania Mining Complex;

“mmBtu” means one million British Thermal units;

“Partnership” or “CCR” refers to a Delaware limited partnership that holds a 25% undivided interest in, and is the sole operator of, the Pennsylvania Mining Complex;

“Pennsylvania Mining Complex” or “PAMC” refers to the Bailey, Enlow Fork and Harvey coal mines, coal reserves and related assets and operations, located primarily in southwestern Pennsylvania and owned 75% by the Company and 25% by the Partnership; and

“separation” refers to the separation of the Coal Business from our former parent’s other businesses on November 28, 2017, and the creation, as a result of the distribution, of an independent, publicly-traded company (the Company) to hold the assets and liabilities associated with the Coal Business after the distribution.


3



PART I : FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
CONSOL ENERGY INC.
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























The accompanying notes are an integral part of these consolidated financial statements.

4



CONSOL ENERGY INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(unaudited)

 
Three Months Ended
March 31,
 
2020
 
2019
Net Income
$
2,475

 
$
20,303

 
 
 
 
Other Comprehensive Income:
 
 
 
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($1,214), ($781))
3,624

 
2,460

Unrecognized Loss on Derivatives:
 
 
 
Unrealized Loss on Cash Flow Hedges (Net of tax: $933, $0)
(2,773
)
 

Other Comprehensive Income
851

 
2,460

 
 
 
 
Comprehensive Income
$
3,326

 
$
22,763

 
 
 
 
Less: Comprehensive Income Attributable to Noncontrolling Interest
123

 
5,867

 
 
 
 
Comprehensive Income Attributable to CONSOL Energy Inc. Shareholders
$
3,203

 
$
16,896










































The accompanying notes are an integral part of these consolidated financial statements.

5



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




























The accompanying notes are an integral part of these consolidated financial statements.

6



CONSOL ENERGY INC.
CONSOLIDATED BALANCE SHEETS
(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


















The accompanying notes are an integral part of these consolidated financial statements.

7



CONSOL ENERGY INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands)


 
 
Common Stock
 
Capital in Excess of Par Value
 
Retained Earnings
 
Accumulated Other Comprehensive (Loss) Income
 
Total CONSOL Energy Inc. Stockholders' Equity
 
Noncontrolling Interest
 
Total Equity
December 31, 2019
 
$
259

 
$
523,762

 
$
259,903

 
$
(348,725
)
 
$
435,199

 
$
137,196

 
$
572,395

(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 

 

 
2,367

 

 
2,367

 
108

 
2,475

Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax)
 

 

 

 
3,609

 
3,609

 
15

 
3,624

Interest Rate Hedge (Net of ($933) Tax)
 

 

 

 
(2,773
)
 
(2,773
)
 

 
(2,773
)
Comprehensive Income
 

 

 
2,367

 
836

 
3,203

 
123

 
3,326

Adoption of ASU 2016-13 (Net of ($1,109) Tax)
 

 

 
(3,298
)
 

 
(3,298
)
 

 
(3,298
)
Issuance of Common Stock
 
1

 
(1
)
 

 

 

 

 

Amortization of Stock-Based Compensation Awards
 

 
4,856

 

 

 
4,856

 
158

 
5,014

Shares/Units Withheld for Taxes
 

 
(555
)
 

 

 
(555
)
 
(217
)
 
(772
)
Distributions to Noncontrolling Interest
 

 

 

 

 

 
(5,575
)
 
(5,575
)
March 31, 2020
 
$
260

 
$
528,062

 
$
258,972

 
$
(347,889
)
 
$
439,405

 
$
131,685

 
$
571,090





 
 
Common Stock
 
Capital in Excess of Par Value
 
Retained Earnings
 
Accumulated Other Comprehensive (Loss) Income
 
Total CONSOL Energy Inc. Stockholders' Equity
 
Noncontrolling Interest
 
Total Equity
December 31, 2018
 
$
274

 
$
550,995

 
$
182,148

 
$
(323,482
)
 
$
409,935

 
$
141,676

 
$
551,611

(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 

 

 
14,435

 

 
14,435

 
5,868

 
20,303

Actuarially Determined Long-Term Liability Adjustments (Net of $781 Tax)
 

 

 

 
2,461

 
2,461

 
(1
)
 
2,460

Comprehensive Income
 

 

 
14,435

 
2,461

 
16,896

 
5,867

 
22,763

Issuance of Common Stock
 
2

 
(2
)
 

 

 

 

 

Amortization of Stock-Based Compensation Awards
 

 
7,053

 

 

 
7,053

 
397

 
7,450

Shares/Units Withheld for Taxes
 

 
(3,863
)
 

 

 
(3,863
)
 
(880
)
 
(4,743
)
Distributions to Noncontrolling Interest
 

 

 

 

 

 
(5,559
)
 
(5,559
)
March 31, 2019
 
$
276

 
$
554,183

 
$
196,583

 
$
(321,021
)
 
$
430,021

 
$
141,501

 
$
571,522

















The accompanying notes are an integral part of these consolidated financial statements.

8



CONSOL ENERGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
 
Three Months Ended
March 31,
 
2020
 
2019
Cash Flows from Operating Activities:
 
 
 
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

Loss (Gain) on Sale of Assets
14

 
(339
)
Stock/Unit-Based Compensation
5,014

 
7,450

Amortization of Debt Issuance Costs
1,444

 
1,976

(Gain) Loss on Debt Extinguishment
(16,833
)
 
23,143

Deferred Income Taxes
1,908

 
(850
)
Equity in Earnings of Affiliates
315

 

Changes in Operating Assets:
 
 
 
Accounts and Notes Receivable
23,064

 
(16,850
)
Inventories
(4,507
)
 
(6,242
)
Prepaid Expenses and Other Assets
4,845

 
2,761

Changes in Other Assets
191

 
10,080

Changes in Operating Liabilities:
 
 
 
Accounts Payable
(15,726
)
 
(10,695
)
Other Operating Liabilities
3,899

 
12,419

Changes in Other Liabilities
(9,646
)
 
(11,709
)
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:
 
 
 
Proceeds from Finance Lease Obligations
16,293

 

Payments on Finance Lease Obligations
(4,899
)
 
(4,537
)
Proceeds from Term Loan A

 
26,250

Payments on Term Loan A
(3,750
)
 

Payments on Term Loan B
(688
)
 
(122,375
)
Payments on Second Lien Notes
(25,480
)
 
(7,000
)
Payments on Asset-Backed Financing
(174
)
 

Distributions to Noncontrolling Interest
(5,575
)
 
(5,559
)
Shares/Units Withheld for Taxes
(772
)
 
(4,743
)
Debt-Related Financing Fees
(643
)
 
(18,514
)
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

 
 
 
 
Non-Cash Investing and Financing Activities:
 
 
 
Finance Lease
$
7,023

 
$

Longwall Shield Rebuild
$
9,129

 
$





The accompanying notes are an integral part of these consolidated financial statements.

9



CONSOL ENERGY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Dollars in thousands, except per share data)
NOTE 1—BASIS OF PRESENTATION:

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, 2019 has been derived from the Audited Consolidated Financial Statements at that date but does not include all disclosures required by GAAP. This Form 10-Q report should be read in conjunction with CONSOL Energy Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019.

Basis of Consolidation
The Consolidated Financial Statements include the accounts of CONSOL Energy Inc. and its wholly-owned and majority-owned and/or controlled subsidiaries. The portion of these entities that is not owned by the Company is presented as non-controlling interest. All significant intercompany transactions and accounts have been eliminated in consolidation.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 - Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. In response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This Update also provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. Management has elected to apply this Update subsequent to March 12, 2020. Management is currently evaluating the impact of this guidance, but does not expect this update to have a material impact on the Company's financial statements.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this Update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. The amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. Management does not expect this update to have a material impact on the Company's financial statements.


10



In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740) to reduce the complexity of accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. The amendments in Update 2019-12 will remove the following exceptions: (1) the exception to the incremental approach for intra-period tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in Update 2019-12 will also simplify the accounting for income taxes in the areas of franchise tax, step up in the tax basis of goodwill associated with a business combination, allocation of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, and presentation of the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Update adds minor codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. These changes will be effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. Management does not expect this update to have a material impact on the Company's financial statements.

In August 2018, the FASB issued ASU 2018-15 - Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40) to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in Update 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements of capitalizing implementation costs incurred to develop or obtain internal-use software. These changes are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. CONSOL Energy adopted this guidance during the three months ended March 31, 2020, and there was no material impact on the Company's financial statements.
In August 2018, the FASB issued ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. These changes will be effective for fiscal years ending after December 15, 2020, including interim periods within those fiscal years. Management is currently evaluating the impact this guidance may have on the Company’s financial statements.

In August 2018, the FASB issued ASU 2018-13 - Fair Value Measurement (Topic 820) to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP. The amendments modify the disclosure requirements on fair value measurements including the consideration of costs and benefits. These changes are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. CONSOL Energy adopted this guidance during the three months ended March 31, 2020, and there was no material impact on the Company's financial statements.

Earnings per Share
Basic earnings per share are computed by dividing net income attributable to CONSOL Energy Inc. shareholders by the weighted average shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share, except that the weighted average shares outstanding are increased to include additional shares from restricted stock units and performance share units, if dilutive. The number of additional shares is calculated by assuming that outstanding restricted stock units and performance share units were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period.
The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be anti-dilutive:
 
For the Three Months Ended
 
March 31,
 
2020
 
2019
Anti-Dilutive Restricted Stock Units
141,279

 

Anti-Dilutive Performance Share Units

 
8,086

 
141,279

 
8,086



11



The computations for basic and dilutive earnings per share are as follows:
 
For the Three Months Ended
Dollars in thousands, except per share data
March 31,
 
2020
 
2019
Numerator:
 
 
 
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

 
 
 
 
Denominator:
 
 
 
Weighted-average shares of common stock outstanding
25,987,155

 
27,530,859

Effect of dilutive shares
265,056

 
308,534

Weighted-average diluted shares of common stock outstanding
26,252,211

 
27,839,393

 
 
 
 
Earnings per Share:
 
 
 
Basic
$
0.09

 
$
0.52

Dilutive
$
0.09

 
$
0.52


As of March 31, 2020, CONSOL Energy has 500,000 shares of preferred stock, none of which are issued or outstanding.

NOTE 2—REVENUE:

The following table disaggregates CONSOL Energy's revenue from contracts with customers to depict how the nature, amount, timing and uncertainty of the Company's revenues and cash flows are affected by economic factors:

 
 
Three Months Ended
 
 
March 31, 2020
 
March 31, 2019
Coal Revenue
 
$
255,452

 
$
332,502

Terminal Revenue
 
16,501

 
17,818

Freight Revenue
 
3,147

 
6,662

     Total Revenue from Contracts with Customers
 
$
275,100

 
$
356,982



CONSOL Energy's coal revenue is generally recognized when title passes to the customer and the price is fixed and determinable. The Company has determined that each ton of coal represents a separate and distinct performance obligation. The Company's coal supply contracts and other sales and operating revenue contracts vary in length from short-term to long-term contracts and do not typically have significant financing components.

The estimated transaction price from each of the Company's contracts is based on the total amount of consideration to which the Company expects to be entitled under the contract. Included in the transaction price for certain coal supply contracts is the impact of variable consideration, including quality price adjustments, handling services, per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments. The estimated transaction price for each contract is allocated to the Company's performance obligations based on relative stand-alone selling prices determined at contract inception.

Coal Revenue

Revenues are generally recognized when title passes to the customers and the price is fixed and determinable. Generally, title passes when coal is loaded at the central preparation facility and, on occasion, at terminal locations or other customer destinations. The Company's coal contract revenue per ton is fixed and determinable and adjusted for nominal quality adjustments. Some coal contracts also contain positive electric power price-related adjustments, which represent market-driven price adjustments, wherein no additional value is exchanged, in addition to a fixed base price per ton. The Company’s coal contracts generally do not allow for retroactive adjustments to pricing after title to the coal has passed.


12



Some of the Company's contracts span multiple years and have annual pricing modifications, based upon market-driven or inflationary adjustments, where no additional value is exchanged. Management believes that the invoice price is the most appropriate rate at which to recognize revenue.

While CONSOL Energy does, from time to time, experience costs of obtaining coal customer contracts with amortization periods greater than one year, those costs are generally immaterial to the Company's net income. At March 31, 2020 and December 31, 2019, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 2020 and 2019, the Company has not recognized any amortization of previously existing capitalized costs of obtaining customer contracts. Further, the Company has not recognized any revenue in the current period that is not a result of current period performance.

Terminal Revenue

Terminal revenues are attributable to the Company's CONSOL Marine Terminal and include revenues earned from providing receipt and unloading of coal from rail cars, transporting coal from the receipt point to temporary storage or stockpile facilities located at the Terminal, stockpiling, blending, weighing, sampling, redelivery, and loading of coal onto vessels. Revenues for these services are generally earned on a rateable basis, and performance obligations are considered fulfilled as the services are performed.
    
The CONSOL Marine Terminal does not normally experience material costs of obtaining customer contracts with amortization periods greater than one year. At March 31, 2020 and December 31, 2019, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 2020 and 2019, the Company has not recognized any amortization of previously existing capitalized costs of obtaining Terminal customer contracts. Further, the Company has not recognized any revenue in the current period that is not a result of current period performance.

Freight Revenue

Some of CONSOL Energy's coal contracts require that the Company sell its coal at locations other than its central preparation plant. The cost to transport the Company's coal to the ultimate sales point is passed through to the Company's customers and CONSOL Energy recognizes the freight revenue equal to the transportation costs when title of the coal passes to the customer.

Contract Balances

Contract assets are recorded separately from trade receivables in the Company's Consolidated Balance Sheets and are reclassified to trade receivables as title passes to the customer and the Company's right to consideration becomes unconditional. Payments for coal shipments are typically due within two to four weeks from the invoice date. CONSOL Energy typically does not have material contract assets that are stated separately from trade receivables since the Company's performance obligations are satisfied as control of the goods or services passes to the customer, thereby granting the Company an unconditional right to receive consideration. Contract liabilities relate to consideration received in advance of the satisfaction of the Company's performance obligations. Contract liabilities are recognized as revenue at the point in time when control of the good or service passes to the customer.

NOTE 3—MISCELLANEOUS OTHER INCOME:
 
For the Three Months Ended March 31,
 
2020
 
2019
Contract Buyout
$
10,825

 
$
1,048

Royalty Income - Non-Operated Coal
4,504

 
6,210

Rental Income
497

 
617

Interest Income
244

 
887

Property Easements and Option Income
63

 
979

Purchased Coal Sales

 
3,186

Other
37

 
365

Miscellaneous Other Income
$
16,170

 
$
13,292




13



NOTE 4—COMPONENTS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

The components of Net Periodic Benefit (Credit) Cost are as follows:
 
Pension Benefits
 
Other Post-Employment Benefits
 
Three Months Ended
March 31,
 
Three Months Ended
March 31,
 
2020
 
2019
 
2020
 
2019
Service Cost
$
296

 
$
987

 
$

 
$

Interest Cost
5,044

 
6,275

 
3,199

 
4,580

Expected Return on Plan Assets
(10,455
)
 
(10,114
)
 

 

Amortization of Prior Service Credits

 
(92
)
 
(601
)
 
(601
)
Amortization of Actuarial Loss
1,730

 
1,490

 
2,319

 
2,315

Net Periodic Benefit (Credit) Cost
$
(3,385
)
 
$
(1,454
)
 
$
4,917

 
$
6,294



(Credits) expenses related to pension and other post-employment benefits are reflected in Operating and Other Costs in the Consolidated Statements of Income.
NOTE 5—COMPONENTS OF COAL WORKERS’ PNEUMOCONIOSIS (CWP) AND WORKERS’ COMPENSATION NET PERIODIC BENEFIT COSTS:

The components of Net Periodic Benefit Cost are as follows:

 
CWP
 
Workers' Compensation
 
Three Months Ended
March 31,
 
Three Months Ended
March 31,
 
2020
 
2019
 
2020
 
2019
Service Cost
$
1,151

 
$
948

 
$
1,569

 
$
1,421

Interest Cost
1,551

 
1,750

 
461

 
646

Amortization of Actuarial Loss (Gain)
1,401

 
254

 
(122
)
 
(193
)
State Administrative Fees and Insurance Bond Premiums

 

 
621

 
587

Net Periodic Benefit Cost
$
4,103

 
$
2,952

 
$
2,529

 
$
2,461



NOTE 6—INCOME TAXES:

The Company has evaluated the impact of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law by the President of the United States in March 2020. The CARES Act has various income tax related provisions, including temporary net operating loss carryback and limitation measures, a relaxation of the limitation on interest deductions, the postponement of statutory filing dates, and a technical correction of the 2017 Tax Cuts and Jobs Act related to qualified improvement property.

The Company's effective tax rate is based on its estimated full year effective tax rate. The effective tax rate for the three months ended March 31, 2020 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion, offset by the impact of discrete tax expense related to equity compensation and the unfavorable impact on percentage depletion related to the additional interest deduction available under the CARES Act. The CARES Act increased the amount of deductible interest from 30% of adjusted taxable income to 50% for tax years 2019 and 2020, which generates current cash tax benefit, but also reduces the base of earnings upon which percentage depletion was computed. The effective tax rate for the three months ended March 31, 2020 was 44.6%, composed of a tax benefit of (3.1)% from operations and discrete tax expense of $902 related to equity compensation and $1,139 related to the effect of the CARES Act, as noted above.

The effective tax rate for the three months ended March 31, 2019 was (4.4)%, composed of a tax benefit of (2.5)% from operations and a discrete tax benefit of (1.9)% primarily related to equity compensation. The effective tax rate for the three months ended March 31, 2019 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion.

14



The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the three months ended March 31, 2020 and the year ended December 31, 2019, the Company did not have any unrecognized tax benefits. If accrual for interest or penalties is required, it is the Company's policy to include these as a component of income tax expense.

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. Under the provisions of the tax matters agreement entered into between the Company and its former parent on November 28, 2017 (the “TMA”), certain subsidiaries of the Company are subject to examination for tax years for the period January 1, 2016 through the three months ended March 31, 2020 for certain state and foreign returns. Further, the Company is subject to examination for the period November 28, 2017 through the three months ended March 31, 2020 for federal and certain state returns.

NOTE 7—CREDIT LOSSES:

Effective January 1, 2020, the Company adopted ASU 2016-013, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade and other receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under previous accounting guidance. The Company recorded a cumulative-effect adjustment to retained earnings in the amount of $3,298, net of $1,109 of income taxes, for expected credit losses on financial assets at the adoption date.

The following table illustrates the impact of ASC 326.
 
January 1, 2020
 
As Reported Under ASC 326
 
Pre-ASC 326 Adoption
 
Impact of ASC 326 Adoption
 
 
 
 
 
 
Trade Receivables
$
3,051

 
$
2,100

 
$
951

Other Receivables
3,372

 
711

 
2,661

Other Assets
795

 

 
795

   Allowance for Credit Losses on Receivables
$
7,218

 
$
2,811

 
$
4,407



The Company is exposed to credit losses primarily through sales of products and services. The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade and other accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on an aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company's monitoring activities include timely account reconciliations, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the novel coronavirus (COVID-19) pandemic and determined that the estimate of credit losses was not significantly impacted.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes to the assessment of anticipated payment, changes in economic conditions, current industry trends in the markets the Company serves, and changes in the financial health of the Company's counterparties.


15



The following table provides a roll-forward of the allowance for credit losses by portfolio segment that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
 
Trade Receivables
 
Other Receivables
 
Other Assets
 
 
 
 
 
 
Beginning Balance, January 1, 2020
$
2,100

 
$
711

 
$

Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings
951

 
2,661

 
795

Provision for expected credit losses
(643
)
 
1,242

 
35

Ending Balance, March 31, 2020
$
2,408

 
$
4,614

 
$
830


NOTE 8—INVENTORIES:
Inventory components consist of the following:
 
March 31,
2020
 
December 31,
2019
Coal
$
4,621

 
$
2,484

Supplies
54,017

 
51,647

Total Inventories
$
58,638

 
$
54,131



Inventories are stated at the lower of cost or net realizable value. The cost of coal inventories is determined by the first-in, first-out (“FIFO”) method. Coal inventory costs include labor, supplies, equipment costs, operating overhead, depreciation, depletion, amortization and other related costs. The cost of supplies inventory is determined by the average cost method and includes operating and maintenance supplies to be used in the Company's coal operations.
NOTE 9—ACCOUNTS RECEIVABLE SECURITIZATION:

CONSOL Energy and certain of its U.S. subsidiaries are parties to a trade accounts receivable securitization facility with financial institutions for the sale on a continuous basis of eligible trade accounts receivable. In March 2020, the securitization facility was amended to, among other things, extend the maturity date from August 30, 2021 to March 27, 2023.

Pursuant to the securitization facility, CONSOL Thermal Holdings LLC sells current and future trade receivables to CONSOL Pennsylvania Coal Company LLC. CONSOL Marine Terminals LLC and CONSOL Pennsylvania Coal Company LLC sell and/or contribute current and future trade receivables (including receivables sold to CONSOL Pennsylvania Coal Company LLC by CONSOL Thermal Holdings LLC) to CONSOL Funding LLC (the “SPV”). The SPV, in turn, pledges its interests in the receivables to PNC Bank, which either makes loans or issues letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the securitization facility may not exceed $100 million.

Loans under the securitization facility accrue interest at a reserve-adjusted LIBOR market index rate equal to the one-month Eurodollar rate. Loans and letters of credit under the securitization facility also accrue a program fee and a letter of credit participation fee, respectively, ranging from 2.00% to 2.50% per annum depending on the total net leverage ratio of CONSOL Energy. In addition, the SPV paid certain structuring fees to PNC Capital Markets LLC and will pay other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

At March 31, 2020, the Company's eligible accounts receivable yielded $30,258 of borrowing capacity. At March 31, 2020, the facility had no outstanding borrowings and $30,919 of letters of credit outstanding, leaving no unused capacity. CONSOL Energy posted $661 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. Cash collateral of $661 is included in Restricted Cash in the Consolidated Balance Sheets. At December 31, 2019, the Company's eligible accounts receivable yielded $41,282 of borrowing capacity. At December 31, 2019, the facility had no outstanding borrowings and $41,211 of letters of credit outstanding, leaving available borrowing capacity of $71. Costs associated with the receivables facility totaled $341 and $382 for the three months ended March 31, 2020 and 2019, respectively. These costs have been recorded as financing fees which are included in Operating and Other Costs in the Consolidated Statements of Income. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.


16



NOTE 10—PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

 
March 31,
2020
 
December 31,
2019
Plant and Equipment
$
3,066,656

 
$
3,028,514

Coal Properties and Surface Lands
873,597

 
872,909

Airshafts
443,600

 
437,003

Mine Development
342,707

 
342,706

Advance Mining Royalties
327,138

 
327,048

Total 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



Coal reserves are controlled either through fee ownership or by lease. The duration of the leases vary; however, the lease terms are generally extended automatically to the exhaustion of economically recoverable reserves, as long as active mining continues. Coal interests held by lease provide the same rights as fee ownership for mineral extraction and are legally considered real property interests.

As of March 31, 2020 and December 31, 2019, property, plant and equipment includes gross assets under finance leases of $75,435 and $52,729, respectively. Accumulated amortization for finance leases was $37,861 and $31,373 at March 31, 2020 and December 31, 2019, respectively. Amortization expense for assets under finance leases approximated $4,964 and $3,914 for the three months ended March 31, 2020 and 2019, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying Consolidated Statements of Income.
NOTE 11—OTHER ACCRUED LIABILITIES:
 
March 31,
2020
 
December 31, 2019
Subsidence Liability
$
96,022

 
$
90,645

Accrued Payroll and Benefits
15,674

 
21,102

Accrued Interest
9,280

 
6,281

Accrued Other Taxes
5,407

 
4,753

Litigation
2,685

 
2,565

Short-Term Incentive Compensation
1,456

 
3,997

Other
12,139

 
9,719

Current Portion of Long-Term Liabilities:
 
 
 
Postretirement Benefits Other than Pensions
31,359

 
31,833

Asset Retirement Obligations
21,741

 
21,741

Operating Lease Liability
18,249

 
19,479

Pneumoconiosis Benefits
12,251

 
12,331

Workers' Compensation
10,998

 
11,323

Total Other Accrued Liabilities
$
237,261

 
$
235,769



17



NOTE 12—LONG-TERM DEBT:
 
March 31,
2020
 
December 31,
2019
Debt:
 
 
 
Term Loan B due in September 2024 (Principal of $272,250 and $272,938 less Unamortized Discount of $1,125 and $1,187, 5.49% and 6.30% Weighted Average Interest Rate, respectively)
$
271,125

 
$
271,751

11.00% Senior Secured Second Lien Notes due November 2025
178,452

 
221,628

MEDCO Revenue Bonds in Series due September 2025 at 5.75%
102,865

 
102,865

Term Loan A due in March 2023 (4.74% and 5.55% Weighted Average Interest Rate, respectively)
85,000

 
88,750

Other Asset-Backed Financing Arrangements
18,243

 
9,289

Advance Royalty Commitments (10.78% Weighted Average Interest Rate)
1,895

 
1,895

Less: Unamortized Debt Issuance Costs
8,966

 
10,323

 
648,614

 
685,855

Less: Amounts Due in One Year*
43,687

 
32,053

      Long-Term Debt
$
604,927

 
$
653,802



* Excludes current portion of Finance Lease Obligations of $23,754 and $18,219 at March 31, 2020 and December 31, 2019, respectively.

In November 2017, CONSOL Energy entered into a revolving credit facility with commitments up to $300 million (the “Revolving Credit Facility”), a Term Loan A Facility of up to $100 million (the “TLA Facility”) and a Term Loan B Facility of up to $400 million (the “TLB Facility”, and together with the Revolving Credit Facility and the TLA Facility, the “Senior Secured Credit Facilities”). On March 28, 2019, the Company amended the Senior Secured Credit Facilities (the “amendment”) to increase the borrowing commitment of the Revolving Credit Facility to $400 million and reallocate the principal amounts outstanding under the TLA Facility and TLB Facility. As a result, the principal amount outstanding under the TLA Facility was $100 million and the principal amount outstanding under the TLB Facility was $275 million. Borrowings under the Company's Senior Secured Credit Facilities bear interest at a floating rate which can be, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an alternate base rate plus an applicable margin. The applicable margin for the Revolving Credit Facility and TLA Facility depends on the total net leverage ratio, whereas the applicable margin for the TLB Facility is fixed. The amendment reduced the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility, and by 150 basis points on the TLB Facility. The amendment also extended the maturity dates of the Senior Secured Credit Facilities. The maturity date of the Revolving Credit and TLA Facilities was extended from November 28, 2021 to March 28, 2023. The TLB Facility's maturity date was extended from November 28, 2022 to September 28, 2024. Obligations under the Senior Secured Credit Facilities (Term Loan B and Term Loan A, together with the Revolving Credit Facility, on which there were no outstanding borrowings at March 31, 2020) are guaranteed by (i) all owners of the 75% undivided economic interest in the PAMC held by the Company, (ii) any other members of the Company’s group that own any portion of the collateral securing the Revolving Credit Facility, and (iii) subject to certain customary exceptions and agreed materiality thresholds, all other existing or future direct or indirect wholly-owned restricted subsidiaries of the Company (excluding the Partnership and its wholly-owned subsidiaries). The obligations are secured by, subject to certain exceptions (including a limitation of pledges of equity interests in certain subsidiaries and certain thresholds with respect to real property), a first-priority lien on (i) the Company’s 75% undivided economic interest in the PAMC, (ii) the limited partner units of the Partnership held by the Company, (iii) the equity interests in CONSOL Coal Resources GP LLC held by the Company (iv) the CONSOL Marine Terminal and (v) the 1.5 billion tons of Greenfield Reserves.

The Senior Secured Credit Facilities contain a number of customary affirmative covenants. In addition, the Senior Secured Credit Facilities contain a number of negative covenants, including (subject to certain exceptions) limitations on (among other things): indebtedness, liens, investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness. The amendment expanded the covenants relating to finance leases, general investments, joint venture investments and annual share repurchase baskets. The amendment also amended the restricted payments covenant to permit up to a $50 million annual dividend.



18



The Senior Secured Credit Facilities also include (i) a maximum first lien gross leverage ratio, (ii) a maximum total net leverage ratio, and (iii) a minimum fixed charge coverage ratio. CONSOL Energy must maintain a maximum first lien gross leverage ratio covenant of no more than 1.75 to 1.00. The maximum first lien gross leverage ratio is calculated as the ratio of Consolidated First Lien Debt to Consolidated EBITDA, excluding the Partnership. The maximum first lien gross leverage ratio was 1.45 to 1.00 at March 31, 2020. CONSOL Energy must maintain a maximum total net leverage ratio covenant of no more than 2.75 to 1.00. The maximum total net leverage ratio is calculated as the ratio of Consolidated Indebtedness, minus Cash on Hand, to Consolidated EBITDA, excluding the Partnership. The maximum total net leverage ratio was 2.17 to 1.00 at March 31, 2020. Consolidated EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, extraordinary gains and losses, gains and losses on discontinued operations, non-cash charges related to legacy employee liabilities and gains and losses on debt extinguishment, and includes cash distributions received from the Partnership and subtracts cash payments related to legacy employee liabilities. The facilities also include a minimum fixed charge coverage covenant of no less than 1.10 to 1.00, measured quarterly. The minimum fixed charge coverage ratio is calculated as the ratio of Consolidated EBITDA to Consolidated Fixed Charges, excluding the Partnership. Consolidated Fixed Charges, as used in the covenant calculation, include cash interest payments, cash payments for income taxes, scheduled debt repayments, dividends paid, and Maintenance Capital Expenditures. The minimum fixed charge coverage ratio was 1.27 to 1.00 at March 31, 2020. The Company was in compliance with all of its debt covenants as of March 31, 2020.

The TLB Facility also includes a financial covenant that requires the Company to repay a certain amount of its borrowings under the TLB Facility within ten business days after the date it files its Form 10-K with the Securities and Exchange Commission if the Company has excess cash flow (as defined in the credit agreement for the Senior Secured Credit Facilities) during the year covered by the applicable Form 10-K. During the three months ended March 31, 2019, CONSOL Energy made the required repayment of approximately $110 million based on the amount of the Company's excess cash flow as of December 31, 2018. For fiscal year 2018, such repayment was equal to 75% of the Company's excess cash flow less any voluntary prepayments of its borrowings under the TLB Facility made by the Company during 2018. For all subsequent fiscal years, the required repayment is equal to a certain percentage of the Company’s excess cash flow for such year, ranging from 0% to 75% depending on the Company’s total net leverage ratio, less the amount of certain voluntary prepayments made by the Company, if any, under the TLB Facility during such fiscal year. The amendment reduced the maximum amount of the mandatory annual excess cash flow sweep under the TLB Facility by 25%. Based on the Company's excess cash flow calculation, no repayment was required with respect to the year ended December 31, 2019. As such, as of December 31, 2019, no amount related to the prepayment of the TLB Facility in connection with the excess cash flow requirement has been classified as Current Portion of Long-Term Debt in the Consolidated Balance Sheets. The amount of excess cash flow is a covenant feature only applicable as of the Company's year-end and will be calculated as of December 31, 2020.

At March 31, 2020, the Revolving Credit Facility had no borrowings outstanding and $79,880 of letters of credit outstanding, leaving $320,120 of unused capacity. At December 31, 2019, the Revolving Credit Facility had no borrowings outstanding and $69,588 of letters of credit outstanding, leaving $330,412 of unused capacity. From time to time, CONSOL Energy is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. CONSOL Energy sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

In November 2017, CONSOL Energy issued $300 million in aggregate principal amount of 11.00% Senior Secured Second Lien Notes due 2025 (the “Second Lien Notes”) pursuant to an indenture (the “Indenture”) dated as of November 13, 2017, by and between the Company and UMB Bank, N.A., a national banking association, as trustee and collateral trustee (the “Trustee”). On November 28, 2017, certain subsidiaries of the Company executed a supplement to the Indenture and became party to the Indenture as a guarantor (the “Guarantors”). The Second Lien Notes are secured by second priority liens on substantially all of the assets of the Company and the Guarantors that are pledged and on a first-priority basis as collateral securing the Company’s obligations under the Senior Secured Credit Facilities (described above), subject to certain exceptions under the Indenture. The Indenture contains covenants that will limit the ability of the Company and the Guarantors, to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) declare or pay dividends on the Company’s common stock, redeem stock or make other distributions to the Company’s stockholders; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Company’s restricted subsidiaries; (vi) merge or consolidate, or sell, transfer, lease or dispose of substantially all of the Company’s assets; (vii) sell or otherwise dispose of certain assets, including equity interests in subsidiaries; (viii) enter into transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the Second Lien Notes achieve an investment grade rating from both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. and no default under the Indenture exists, many of the foregoing covenants will terminate and cease to apply.


19



During the three months ended March 31, 2020, the Company repurchased $43,176 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025. During the three months ended March 31, 2019, the Company made a required repayment of approximately $110 million on the TLB Facility (discussed above) and amended the Senior Secured Credit Facilities. The Company also repurchased $7,000 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025 during the three months ended March 31, 2019. As part of these transactions, $16,833 and $23,143 was included in (Gain) Loss on Debt Extinguishment on the Consolidated Statements of Income for the three months ended March 31, 2020 and 2019, respectively.

The Company is a borrower under two asset-backed financing arrangements related to certain equipment. The equipment, which has an approximate value of $18,243, fully collateralizes the loans. As of March 31, 2020, a total of $14,900 matures in December 2020 and $3,343 matures in September 2024. The loans had a weighted average interest rate of 5.42% and 5.07% at March 31, 2020 and December 31, 2019, respectively.

During the year ended December 31, 2019, the Company entered into interest rate swaps, which effectively converted $150,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2020 and 2021, and $50,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2022. The interest rate swaps qualify for cash flow hedge accounting treatment and as such, the change in the fair value of the interest rate swaps is recorded on the Company's Consolidated Balance Sheets as an asset or liability. The effective portion of the gains or losses is reported as a component of accumulated other comprehensive loss and the ineffective portion is reported in earnings. At March 31, 2020 and December 31, 2019, the interest rate swap contracts were reflected in the Consolidated Balance Sheets at their fair value of $3,861 and $154, respectively, which is recorded in Other Accrued Liabilities and Other Liabilities. The fair value of the interest rate swaps reflected an unrealized loss of $2,773 (net of $(933) tax) at March 31, 2020. The unrealized loss is included on the Consolidated Statements of Stockholders' Equity as part of accumulated other comprehensive loss, as well as on the Consolidated Statements of Comprehensive Income as unrealized loss on cash flow hedges. Some of the Company's interest rate swaps reached their effective date in the three months ending March 31, 2020. As such, a gain of $4 was recognized in interest expense in the Consolidated Statements of Income. During 2020, notional amounts of $150,000 will become effective. In the next 12 months, the Company expects a loss of approximately $1,667 to be reclassified into earnings.


20



NOTE 13—COMMITMENTS AND CONTINGENT LIABILITIES:

The Company and its former parent entered into a separation and distribution agreement on November 28, 2017 that implemented the legal and structural separation of the Company from its former parent. The separation and distribution agreement also identified the assets of the Coal Business that were transferred to the Company and the liabilities and contracts related to the Coal Business that were assumed by the Company as part of the separation and distribution, and provides post-closing indemnification obligations and procedures between the Company and its former parent relating to the liabilities of the Coal Business that the Company assumed.

The Company is subject to various lawsuits and claims with respect to such matters as personal injury, wrongful death, damage to property, exposure to hazardous substances, governmental regulations including environmental remediation, employment and contract disputes and other claims and actions arising out of the normal course of business. The Company accrues the estimated loss for these lawsuits and claims when the loss is probable and reasonably estimable. The Company’s estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of the Company as of March 31, 2020. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the Company’s financial position, results of operations or cash flows; however, such amounts cannot be reasonably estimated. The amount claimed against the Company as of March 31, 2020 is disclosed below when an amount is expressly stated in the lawsuit or claim, which is not often the case.

Fitzwater Litigation: Three nonunion retired coal miners have sued Fola Coal Company LLC, Consolidation Coal Company (“CCC”) and CONSOL of Kentucky Inc. (“COK”) (as well as the Company's former parent) in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. The Plaintiffs contend they relied to their detriment on oral statements and promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were allegedly denied access to Summary Plan Documents that clearly reserved the right to modify or terminate the Retiree Health and Welfare Plan subject to Plaintiffs’ claims. Pursuant to Plaintiffs’ amended complaint filed on April 24, 2017, Plaintiffs request that retiree health benefits be reinstated and seek to represent a class of all nonunion retirees who were associated with AMVEST and COK areas of operation. On October 15, 2019, Plantiffs’ supplemental motion for class certification was denied on all counts. On April 1, 2020, the Court issued a revised scheduling order for the remaining individual claims, setting August 4, 2020 as the trial date. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

Casey Litigation: A class action lawsuit was filed on August 23, 2017 on behalf of two nonunion retired coal miners against CCC, COK, CONSOL Buchanan Mining Co., LLC and Kurt Salvatori in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. Filed by the same lawyers who filed the Fitzwater litigation, and raising nearly identical claims, the Plaintiffs contend they relied to their detriment on oral promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were not provided with copies of Summary Plan Documents clearly reserving to the Company the right to modify or terminate the Retiree Health and Welfare Plan. Plaintiffs request that retiree health benefits be reinstated for them and their dependents and seek to represent a class of all nonunion retirees of any subsidiary of the Company's former parent that operated or employed individuals in McDowell or Mercer Counties, West Virginia, or Buchanan or Tazewell Counties, Virginia whose retiree welfare benefits were terminated. On December 1, 2017, the trial court judge in Fitzwater signed an order to consolidate Fitzwater with Casey. The Casey complaint was amended on March 1, 2018 to add new plaintiffs, add defendant CONSOL Pennsylvania Coal Company, LLC and eliminate defendant CONSOL Buchanan Mining Co., LLC in an attempt to expand the class of retirees. On October 15, 2019, Plantiffs’ supplemental motion for class certification was denied on all counts. On April 1, 2020, the Court issued a revised scheduling order for the remaining individual claims, setting August 4, 2020 as the trial date. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

Other Matters: Various Company subsidiaries are defendants in certain other legal proceedings arising out of the conduct of the Coal Business prior to the separation and distribution, and the Company is also a defendant in other legal proceedings following the separation and distribution. In the opinion of management, based upon an investigation of these matters and discussion with legal counsel, the ultimate outcome of such other legal proceedings, individually and in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity.


21



As part of the separation and distribution, the Company assumed various financial obligations relating to the Coal Business and agreed to reimburse its former parent for certain financial guarantees relating to the Coal Business that its former parent retained following the separation and distribution. Employee-related financial guarantees have primarily been provided to support the United Mine Workers’ of America’s 1992 Benefit Plan and federal black lung and various state workers’ compensation self-insurance programs. Environmental financial guarantees have primarily been provided to support various performance bonds related to reclamation and other environmental issues. Other financial guarantees have been extended to support sales contracts, insurance policies, legal matters, full and timely payments of mining equipment leases, and various other items necessary in the normal course of business.

The following is a summary, as of March 31, 2020, of the financial guarantees, unconditional purchase obligations and letters of credit to certain third parties. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments, or under the separation and distribution agreement to the extent retained by the Company's former parent on behalf of the Coal Business. These amounts have not been reduced for potential recoveries under recourse or collateralization provisions. Generally, recoveries under reclamation bonds would be limited to the extent of the work performed at the time of the default. No amounts related to these financial guarantees and letters of credit are recorded as liabilities in the financial statements. The Company’s management believes that these guarantees will expire without being funded, and therefore, the commitments will not have a material adverse effect on the Company’s financial condition.

 
Amount of Commitment Expiration per Period
 
Total Amounts Committed
 
Less Than 1 Year
 
1-3 Years
 
3-5 Years
 
Beyond 5 Years
Letters of Credit:
 
 
 
 
 
 
 
 
 
Employee-Related
$
64,558

 
$
35,806

 
$
28,752

 
$

 
$

Environmental
398

 
398

 

 

 

Other
45,843

 
40,682

 
5,161

 

 

Total Letters of Credit
110,799

 
76,886

 
33,913

 

 

Surety Bonds:
 
 
 
 
 
 
 
 
 
Employee-Related
87,424

 
69,889

 
17,535

 

 

Environmental
527,406

 
496,365

 
31,041

 

 

Other
4,125

 
3,293

 
832

 

 

Total Surety Bonds
618,955

 
569,547

 
49,408

 

 

Guarantees:
 
 
 
 
 
 
 
 
 
Other
14,654

 
7,348

 
6,576

 
398

 
332

Total Guarantees
14,654

 
7,348

 
6,576

 
398

 
332

Total Commitments
$
744,408

 
$
653,781

 
$
89,897

 
$
398

 
$
332



Included in the above table are commitments and guarantees entered into in conjunction with the sale of Consolidation Coal Company and certain of its subsidiaries, which contain all five of its longwall coal mines in West Virginia and its river operations, to a third party. As part of the separation and distribution, the Company's former parent agreed to indemnify the Company and the Company agreed to indemnify its former parent in each case with respect to guarantees of certain equipment lease obligations that were assumed by the third party. In the event that the third party would default on the obligations defined in the agreements, the Company would be required to perform under the guarantees. If the Company would be required to perform, the stock purchase agreement provides various recourse actions. As of March 31, 2020, the Company has not been required to perform under these guarantees. The equipment lease obligations are collateralized by the underlying assets. The current maximum estimated exposure under these guarantees as of March 31, 2020 and December 31, 2019 is believed to be approximately $20,000. At March 31, 2020 and December 31, 2019, the fair value of these guarantees was $444 and $482, respectively, and is included in Other Accrued Liabilities on the Consolidated Balance Sheets. The fair value of certain of the guarantees was determined using the Company’s risk-adjusted interest rate. Significant increases or decreases in the risk-adjusted interest rates may result in a significantly higher or lower fair value measurement. No other amounts related to financial guarantees and letters of credit are recorded as liabilities in the financial statements. Significant judgment is required in determining the fair value of these guarantees. The guarantees of the leases are classified within Level 3 of the fair value hierarchy.

The Company regularly evaluates the likelihood of default for all guarantees based on an expected loss analysis and records the fair value, if any, of its guarantees as an obligation in the consolidated financial statements.

22



NOTE 14—FAIR VALUE OF FINANCIAL INSTRUMENTS:

CONSOL Energy determines the fair value of assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources (including LIBOR-based discount rates), while unobservable inputs reflect the Company’s own assumptions of what market participants would use.

The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below.

Level One - Quoted prices for identical instruments in active markets.

Level Two - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including LIBOR-based discount rates.

Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity. The significant unobservable inputs used in the fair value measurement of the Company’s third-party guarantees are the credit risk of the third-party and the third-party surety bond markets. A significant increase or decrease in these values, in isolation, would have a directionally similar effect resulting in higher or lower fair value measurement of the Company’s Level 3 guarantees.

In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.

The financial instruments measured at fair value on a recurring basis are summarized below:
 
Fair Value Measurements at
 
Fair Value Measurements at
 
March 31, 2020
 
December 31, 2019
Description
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Lease Guarantees
$

 
$

 
$
(444
)
 
$

 
$

 
$
(482
)
Derivatives (1)
$

 
$
(3,861
)
 
$

 
$

 
$
(154
)
 
$


(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Long-term debt: The fair value of long-term debt is measured using unadjusted quoted market prices or estimated using discounted cash flow analyses. The discounted cash flow analyses are based on current market rates for instruments with similar cash flows.

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:
 
March 31, 2020
 
December 31, 2019
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Long-Term Debt
$
657,580

 
$
447,291

 
$
696,178

 
$
642,018


Certain of the Company’s debt is actively traded on a public market and, as a result, constitutes Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitutes Level 2 fair value measurements.



23



NOTE 15—SEGMENT INFORMATION:

CONSOL Energy Inc. consists of one reportable segment: the Pennsylvania Mining Complex, which includes the Bailey Mine, the Enlow Fork Mine, the Harvey Mine and the Central Preparation Plant. The principal activities of the PAMC are mining, preparation and marketing of thermal coal, sold primarily to power generators. It also includes selling, general and administrative activities, as well as various other activities assigned to the PAMC.

CONSOL Energy’s Other division includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC division. The diversified business activities include the CONSOL Marine Terminal, development of the Itmann Mine, the Greenfield Reserves, closed and idle mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated activities, none of which are individually significant to the Company.

Industry segment results for the three months ended March 31, 2020 are:
 
PAMC
 
Other
 
Adjustments and Eliminations
 
Consolidated
 
 
Coal Revenue
$
255,452

 
$

 
$

 
$
255,452

 
(A)
Terminal Revenue

 
16,501

 

 
16,501

 
 
Freight Revenue
3,147

 

 

 
3,147

 
 
Total Revenue and Freight
$
258,599

 
$
16,501

 
$

 
$
275,100

 
 
Earnings (Loss) Before Income Tax
$
10,875

 
$
(6,492
)
 
$

 
$
4,383

 
 
Segment Assets
$
1,949,655

 
$
703,813

 
$

 
$
2,653,468

 
 
Depreciation, Depletion and Amortization
$
48,418

 
$
6,525

 
$

 
$
54,943

 
 
Capital Expenditures
$
20,692

 
$
6,486

 
$

 
$
27,178

 
 

Industry segment results for the three months ended March 31, 2019 are:
 
PAMC
 
Other
 
Adjustments and Eliminations
 
Consolidated
 
 
Coal Revenue
$
332,502

 
$

 
$

 
$
332,502

 
(A)
Terminal Revenue

 
17,818

 

 
17,818

 
 
Freight Revenue
6,662

 

 

 
6,662

 
 
Total Revenue and Freight
$
339,164

 
$
17,818

 
$

 
$
356,982

 
 
Earnings (Loss) Before Income Tax
$
64,698

 
$
(45,245
)
 
$

 
$
19,453

 
 
Segment Assets
$
1,992,549

 
$
774,492

 
$

 
$
2,767,041

 
 
Depreciation, Depletion and Amortization
$
44,868

 
$
5,856

 
$

 
$
50,724

 
 
Capital Expenditures
$
32,372

 
$
1,799

 
$

 
$
34,171

 
 

(A)
For the three months ended March 31, 2020 and 2019, the PAMC segment had revenues from the following customers, each comprising over 10% of the Company’s total sales:
 
Three Months Ended March 31,
 
2020
 
2019
Customer A
$
38,908

 
$
61,872

Customer B
$
104,354

 
$
123,118

Customer C
$
35,683

 
$
41,866








24



Reconciliation of Segment Information to Consolidated Amounts:

Total Assets:
 
March 31,
 
2020
 
2019
Segment Assets for Total Reportable Business Segments
$
1,949,655

 
$
1,992,549

Segment Assets for All Other Business Segments
509,657

 
510,583

Items Excluded from Segment Assets:
 
 
 
   Cash and Other Investments
91,731

 
186,295

   Deferred Tax Assets
102,425

 
77,614

Total Consolidated Assets
$
2,653,468

 
$
2,767,041



NOTE 16—ADDITIONAL INFORMATION WITH RESPECT TO UNRESTRICTED SUBSIDIARIES:

Under the terms of the Indenture and Senior Secured Credit Facilities, CONSOL Energy has designated certain of its subsidiaries as “Unrestricted Subsidiaries”. The current Unrestricted Subsidiaries are the Partnership and its subsidiaries and the SPV. CONSOL Energy is required under the terms of the Indenture and the Senior Secured Credit Facilities to present additional information that reflects the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Company's Unrestricted Subsidiaries for the periods presented. This additional information is below.

Income Statement for the Three Months Ended March 31, 2020 (unaudited):
 
 
 
 
 
 
 
Company and Restricted Subsidiaries
 
Unrestricted Subsidiaries
 
Consolidated
Revenue and Other Income:
 
 
 
 
 
     Coal Revenue
$
191,589

 
$
63,863

 
$
255,452

     Terminal Revenue
16,501

 

 
16,501

     Freight Revenue
2,360

 
787

 
3,147

     Miscellaneous Other Income
3,863

 
12,307

 
16,170

     Loss on Sale of Assets
(14
)
 

 
(14
)
Total Revenue and Other Income
214,299

 
76,957

 
291,256

Costs and Expenses:
 
 
 
 
 
     Operating and Other Costs
163,592

 
48,683

 
212,275

     Depreciation, Depletion and Amortization
43,015

 
11,928

 
54,943

     Freight Expense
2,360

 
787

 
3,147

     Selling, General and Administrative Costs
13,624

 
4,046

 
17,670

     Gain on Debt Extinguishment
(16,833
)
 

 
(16,833
)
     Interest Expense, net
13,516

 
2,155

 
15,671

Total Costs and Expenses
219,274

 
67,599

 
286,873

(Loss) Earnings Before Income Tax
(4,975
)
 
9,358

 
4,383

Income Tax Expense
1,908

 

 
1,908

Net (Loss) Income
(6,883
)
 
9,358

 
2,475

     Less: Net Income Attributable to Noncontrolling Interest
108

 

 
108

Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$
(6,991
)
 
$
9,358

 
$
2,367








25


Balance Sheet at March 31, 2020 (unaudited):
 
 
 
 
 
 
 
 
 
 
 
 
Company and Restricted Subsidiaries
 
Unrestricted Subsidiaries
 
Consolidated
ASSETS
 
 
 
 
 
Current Assets:
 
 
 
 
 
Cash and Cash Equivalents
$
77,896

 
$
270

 
$
78,166

Restricted Cash

 
661

 
661

Accounts and Notes Receivable
 
 
 
 
 
    Trade Receivables, net of Allowance

 
113,098

 
113,098

    Other Receivables, net of Allowance
31,654

 
2,224

 
33,878

Inventories
44,852

 
13,786

 
58,638

Prepaid Expenses and Other Assets
21,931

 
4,371

 
26,302

         Total Current Assets
176,333

 
134,410

 
310,743

Property, Plant and Equipment:
 
 
 
 
 
     Property, Plant and Equipment
4,059,878

 
993,820

 
5,053,698

     Less-Accumulated Depreciation, Depletion and Amortization
2,382,961

 
582,942

 
2,965,903

          Property, Plant and Equipment - Net
1,676,917

 
410,878

 
2,087,795

Other Assets:
 
 
 
 
 
     Deferred Income Taxes
102,425

 

 
102,425

     Right of Use Asset - Operating Leases
53,268

 
14,519

 
67,787

     Other, net of Allowance
71,277

 
13,441

 
84,718

          Total Other Assets
226,970

 
27,960

 
254,930

          TOTAL ASSETS
$
2,080,220

 
$
573,248

 
$
2,653,468

LIABILITIES AND EQUITY
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
      Accounts Payable
$
65,078

 
$
24,478

 
$
89,556

      Accounts (Recoverable) Payable - Related Parties
(4,279
)
 
4,279

 

     Current Portion of Long-Term Debt
58,529

 
8,912

 
67,441

     Other Accrued Liabilities
197,677

 
39,584

 
237,261

          Total Current Liabilities
317,005

 
77,253

 
394,258

Long-Term Debt:
 
 
 
 
 
     Long-Term Debt
452,472

 
152,455

 
604,927

     Finance Lease Obligations
16,867

 
5,075

 
21,942

          Total Long-Term Debt
469,339

 
157,530

 
626,869

Deferred Credits and Other Liabilities:
 
 
 
 
 
     Postretirement Benefits Other Than Pensions
429,085

 

 
429,085

     Pneumoconiosis Benefits
195,449

 
6,269

 
201,718

     Asset Retirement Obligations
243,837

 
10,968

 
254,805

     Workers' Compensation
57,313

 
3,648

 
60,961

     Salary Retirement
44,439

 

 
44,439

     Operating Lease Liability
42,039

 
10,936

 
52,975

     Other
16,445

 
823

 
17,268

          Total Deferred Credits and Other Liabilities
1,028,607

 
32,644

 
1,061,251

          TOTAL LIABILITIES
1,814,951

 
267,427