0001710366-20-000009.txt : 20200511 0001710366-20-000009.hdr.sgml : 20200511 20200511065009 ACCESSION NUMBER: 0001710366-20-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20200511 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200511 DATE AS OF CHANGE: 20200511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOL Energy Inc. CENTRAL INDEX KEY: 0001710366 STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE MINING [1220] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-38147 FILM NUMBER: 20862536 BUSINESS ADDRESS: STREET 1: 1000 CONSOL ENERGY DRIVE STREET 2: SUITE #100 CITY: CANONSBURG STATE: PA ZIP: 15317 BUSINESS PHONE: 724-485-3300 MAIL ADDRESS: STREET 1: 1000 CONSOL ENERGY DRIVE STREET 2: SUITE #100 CITY: CANONSBURG STATE: PA ZIP: 15317 FORMER COMPANY: FORMER CONFORMED NAME: CONSOL Mining Corp DATE OF NAME CHANGE: 20170626 8-K 1 a8kcoverpressreleaseq1.htm 8-K Document
false0001710366 0001710366 2020-05-11 2020-05-11


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 11, 2020
 CONSOL Energy Inc.

(Exact name of registrant as specified in its charter)


Delaware
 
001-38147
 
82-1954058
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

1000 CONSOL Energy Drive, Suite 100
Canonsburg, Pennsylvania 15317

(Address of principal executive offices)
(Zip code)

Registrant's telephone number, including area code:
(724) 416-8300

Not applicable
(Former name or former address, if changed since last report)

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


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  





Item 2.02 Results of Operations and Financial Condition.

CONSOL Energy Inc. (the "Company," "we," "us," "our") issued a press release on May 11, 2020 announcing its 2020 first fiscal quarter results. A copy of the press release is attached to this Form 8-K as Exhibit 99.1.

Please refer to our website at www.consolenergy.com for additional information regarding the Company. For example, periodically during the quarter, we may provide investor presentations, which would appear on our website in the Investors section.

The information in this Current Report and the exhibit hereto are being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Current Report and exhibit hereto shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 7.01 Regulation FD

The response to Item 2.02 is incorporated herein by reference to this Item 7.01.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1
 
Press release of CONSOL Energy Inc. dated May 11, 2020

















SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


CONSOL Energy Inc.
(Registrant)

By:    /s/ MITESHKUMAR B. THAKKAR
Miteshkumar B. Thakkar
Interim Chief Financial Officer


Dated: May 11, 2020











































EX-99.1 2 exhibit991q12020pressr.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
logoa19.jpg
CONSOL Energy Announces Results for the First Quarter 2020


CANONSBURG, PA (May 11, 2020) - 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.


Source: CONSOL Energy Inc.




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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Cover Document
May 11, 2020
Cover page.  
Title of 12(b) Security Common Stock, $0.01 par value
Document Type 8-K
Entity Incorporation, State or Country Code DE
Entity Central Index Key 0001710366
Amendment Flag false
Entity File Number 001-38147
Entity Tax Identification Number 82-1954058
Document Period End Date May 11, 2020
Entity Registrant Name CONSOL Energy Inc.
Entity Address, Address Line One 1000 CONSOL Energy Drive
Entity Address, Address Line Two Suite 100
Entity Address, City or Town Canonsburg
Entity Address, State or Province PA
Entity Address, Postal Zip Code 15317
City Area Code 724
Local Phone Number 416-8300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Trading Symbol CEIX
Security Exchange Name NYSE
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