CANONSBURG, Pa., Aug. 3, 2021 /PRNewswire/ -- Today, CONSOL
Energy Inc. (NYSE: CEIX) reported financial and operating results
for the period ended June 30,
2021.
Second Quarter 2021 Highlights Include:
- GAAP net income of $4.2
million including $20.4
million of unrealized mark-to-market losses related to
commodity derivatives;
- Quarterly adjusted EBITDA1 of $84.4 million;
- Net cash provided by operating activities of $94.6 million;
- Quarterly free cash flow1 of $54.4 million;
- Coal shipments of 5.9 million tons, of which 55% went into
the export market and 47% into non-power generation
applications;
- CONSOL Marine Terminal net income and adjusted
EBITDA1 of $8.2 million
and $11.0 million,
respectively;
- Cash and cash equivalents of $146.7
million plus $53.5 million in
restricted cash as of June 30,
2021;
- Net leverage ratio1 of 1.70x as of June 30, 2021;
- Recommencing the Itmann
metallurgical coal project with expanded scope to accelerate our
diversification strategy;
- Issued $75.0 million in
tax-exempt bonds to fund the solid waste disposal project at the
Pennsylvania Mining Complex (PAMC); and
- Spent $18.4 million for an
early buyout of an existing operating lease for a set of longwall
shields reducing monthly cash cost by $0.9
million.
Management Comments
"In the second quarter of 2021, we had another strong
performance generating significant free cash flow, increasing our
unrestricted cash position by more than $50
million and delivering a strong cash cost performance
despite multiple longwall moves in the quarter," said Jimmy Brock, President and Chief Executive
Officer of CONSOL Energy Inc. "Customer demand remains robust and
we furthered our pivot to the export markets by selling
approximately 55% of our total sales volume internationally. The
second quarter of 2021 marks our
third consecutive quarter of approximately $50 million or more in free cash
flow1 generation, and this quarter was even more
impressive when you consider our discretionary decision to execute
an $18 million early buyout option on
an existing operating lease associated with a set of longwall
shields. We continue to bolster our balance sheet through strong
cash generation and opportunistic open market debt repurchases of
our second lien notes. Finally, I am very pleased to announce our
decision to recommence the Itmann Metallurgical Coal Project by
committing to move forward with the construction of a coal
preparation facility on site that is slated to start up in 2022 and
will include a highly efficient rail loadout and expanded
capacity for processing third-party coal in addition to the coal
from our Itmann #5 Mine. We
believe this is a very strategically important project for us as it
will diversify our product mix and revenue stream, which will
create additional value for our shareholders."
"On the safety front, our Bailey Preparation Plant, CONSOL
Marine Terminal (CMT) and Itmann
project each had ZERO recordable incidents during the second
quarter of 2021. Our year-to-date total recordable incident rate at
the PAMC continues to track significantly and consistently below
the national average for underground bituminous coal mines."
Pennsylvania Mining Complex Review and Outlook
PAMC Sales and Marketing
Our marketing team sold 5.9 million tons of coal during the
second quarter of 2021 at an average revenue per ton of
$44.02, compared to 2.3 million tons
at an average revenue per ton of $43.82 in the year-ago period. Demand for our
product has remained robust and was significantly improved from the
COVID-19 demand trough in the second quarter of 2020. As a result,
on the volume front, the 3.6 million ton increase in 2Q21 compared
to the year-ago period was a function of the significant
improvement in demand for our product.
In the domestic market, we continued to see further improvement
in the commodity pricing environment during the second quarter of
2021. The average PJM West day-ahead power price and average Henry
Hub natural gas spot price ended 2Q21 improved by 61% and 73%,
respectively, compared to the year-ago quarter. Driven by these
improved market fundamentals and continued tightness in supply, IHS
Markit estimates that total U.S. coal demand in 2021 will increase
by 99 million tons versus 2020 levels, while total U.S. coal
production will improve by only 63 million tons. As such, coal
inventories are on the decline. The U.S. Energy Information
Administration (EIA) reports that April coal inventory levels at
domestic power plants were reduced by more than 22% compared to
year-ago levels and stood at approximately 118 million tons at the
end of April. Additionally, the EIA estimates that these inventory
levels will continue to erode throughout the year, finishing 2021
at approximately 108 million tons or nearly 19% below year-end 2020
levels. Consistent with these trends, the majority of our domestic
customer stockpiles are below target levels for this time of year.
As such, we have seen domestic customer demand increase and have
remained opportunistic in securing additional coal sales contracts
for 2021 and 2022, bringing our contracted positions for those
years to 24.6 million and 10.9 million tons,
respectively.
On the export front, seaborne thermal coal markets have remained
very strong throughout 2021 thus far. API2 spot prices continued to
rise in the second quarter of 2021 and ended 2Q21 improved by 82%
compared to 2Q20. Global LNG prices have continued to remain
elevated with the Asian spot market benchmark price (JKM) ending
the second quarter of 2021 nearly 4.5 times higher than the second
quarter of 2020. We continue to see high pet coke prices, which
improves the demand for our product into high calorific value
markets, particularly in India. As
a result of the continued strength in the international coal
markets, IHS Markit estimates that U.S. thermal coal exports will
improve by 57% compared to 2020 levels. Following a record 1Q21
export sales volume, we successfully placed a near-record 3.2
million tons in the export market in 2Q21, representing
approximately 55% of our total shipments in the second quarter.
Additionally, a significant arbitrage on export spot pricing
opportunities versus domestic spot prices continued in the second
quarter.
Operations Summary
During the second quarter of 2021, we consistently ran four
longwalls, but as previously announced, multiple longwall moves in
the quarter weighed on our production. Nonetheless, the PAMC
produced 5.9 million tons in 2Q21, a significant improvement
compared to 2.4 million tons in the year-ago quarter. This
improvement compared to the prior year was due to the increased
demand for our product, as the COVID-related demand decline for our
product hit its lowest point in 2Q20.
CEIX's total costs and expenses during the second quarter of
2021 were $291.9 million
compared to $191.3 million in the
year-ago quarter, and CEIX's total coal revenue during the second
quarter was $259.8 million
compared to $102.3 million in
the year-ago period. Average cash cost of coal sold per
ton1 for the second quarter was $28.02, compared to $25.90 in the year-ago quarter. The increase was
due primarily to the overall increase in our productive capacity
compared to the second quarter of 2020, where we operated at
minimal production and cash cost levels due to the peak of the
COVID-19 demand destruction and government-imposed lockdowns.
However, if you add $31.8 million of mine idling cash cost
incurred in 2Q20 to our cash cost of coal sold, this yields a 2Q20
average unit cost per ton1 of nearly $40. Within that context, our second quarter 2021
unit cost per ton outperformed the prior year period. Additionally,
we had multiple longwall moves in the second quarter of 2021 that
weighed on our cost; however, despite that, we managed a strong
cash cost performance and kept our cash cost of coal sold per
ton1 at the midpoint of our guidance range.
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
thousands
|
|
$
|
287,159
|
|
|
$
|
162,561
|
|
|
$
|
629,310
|
|
|
$
|
453,817
|
|
Total Costs and
Expenses
|
thousands
|
|
$
|
291,880
|
|
|
$
|
191,307
|
|
|
$
|
602,442
|
|
|
$
|
478,180
|
|
Total Coal
Revenue
|
thousands
|
|
$
|
259,832
|
|
|
$
|
102,313
|
|
|
$
|
545,367
|
|
|
$
|
357,765
|
|
Total Cash Cost of
Coal Sold1
|
thousands
|
|
$
|
164,196
|
|
|
$
|
59,575
|
|
|
$
|
331,062
|
|
|
$
|
250,968
|
|
Coal
Production
|
million
tons
|
|
|
5.9
|
|
|
|
2.4
|
|
|
|
12.9
|
|
|
|
8.4
|
|
Coal Sales
|
million
tons
|
|
|
5.9
|
|
|
|
2.3
|
|
|
|
12.7
|
|
|
|
8.2
|
|
Average Revenue per
Ton Sold
|
per ton
|
|
$
|
44.02
|
|
|
$
|
43.82
|
|
|
$
|
42.60
|
|
|
$
|
43.34
|
|
Average Cash Cost of
Coal Sold per Ton1
|
per ton
|
|
$
|
28.02
|
|
|
$
|
25.90
|
|
|
$
|
26.09
|
|
|
$
|
30.55
|
|
Average Cash Margin
per Ton Sold1
|
per ton
|
|
$
|
16.00
|
|
|
$
|
17.92
|
|
|
$
|
16.51
|
|
|
$
|
12.79
|
|
CONSOL Marine Terminal Review
For the second quarter of 2021, throughput volumes at the CMT
were 3.8 million tons, compared to 1.6 million tons in the year-ago
period. Terminal revenues and CMT total costs and expenses were
$17.4 million and $9.5 million, respectively, compared to
$15.9 million and $8.4 million, respectively, during the year-ago
period. CMT operating cash costs1 were $5.3 million in 2Q21, compared to $3.8 million in 2Q20. The increase in cash cost
was driven by the significant improvement in throughput tons versus
2Q20, when COVID weighed on demand. However, the effect of the
increased throughput tons on revenue was somewhat muted due to the
take-or-pay contract that was in place in the prior-year period.
Accordingly, CONSOL Marine Terminal net income and CONSOL Marine
Terminal Adjusted EBITDA1 were $8.2 million and $11.0
million, respectively, in the second quarter of 2021
compared to $7.8 million and
$10.7 million, respectively, in the
year-ago period.
Debt Repurchases Update and Other Liability
Reductions
During the second quarter of 2021, CEIX made mandatory
repayments of $6.3 million,
$6.3 million and $0.7 million on our equipment financed debt, Term
Loan A and Term Loan B, respectively. Additionally, CEIX spent
$4.8 million to repurchase
$5.0 million in principal amount of
its second lien notes, as these notes traded at near-par levels.
This brings our total debt payments and repurchases in the quarter
to $18.1 million. Furthermore, due to
our decision to execute the previously mentioned early buyout
option on an operating lease for a set of longwall shields, we've
reduced our cash operating cost by $0.9
million per month and reduced our operating lease liability
on our balance sheet by $11.2
million.
Itmann Update
In early 2019, we announced the commencement of development of
our Itmann Mine project, a low-vol metallurgical coal mining
operation in Wyoming County, West
Virginia. However, due to the unprecedented decline in both
the demand for our product and our earnings because of the COVID-19
pandemic in 2020, we made the capital allocation decision to pull
back spending on this project in order to focus our discretionary
capital towards repurchasing our open market second lien notes,
which were trading well below par value at that time. We are
pleased to announce that we are fully dedicated to moving forward
with this project and have committed to relocating a
state-of-the-art preparation plant to the Itmann project site. This decision allows us
to essentially double the capacity of the preparation plant versus
the initial project plan in order to create additional growth
opportunity and higher revenue potential by adding additional
third-party annual processing capacity of 750 thousand to 1 million
product tons, which will add a slight increase to the overall
project cost. It also reduces procurement risk by insulating the
project from long equipment lead times and recent increases in
prices for steel and other materials. We view the Itmann Mine as
the next phase of our strategy, which focuses on targeted growth
and diversification as an additional avenue to increase value for
our shareholders. This project is strategically important as it
will diversify our portfolio by adding a new metallurgical coal
product stream to the mix, and it aligns well with our current
operations by being low cost, high margin and high quality.
The following are our current expectations relating to the
Itmann Mine:
- 900+ thousand tons per year of high-quality, low-vol coking
coal production from the Itmann Mine at full run rate.
- Anticipated mine life of 20+ years.
- Annual cash cost of coal sold per ton2 of
$65-$70, once steady-state production is
achieved.
- Full production is expected in 12-18 months, upon the
completion of the new preparation plant.
- Remaining capital expenditures (including loss on development)
of $65-$70 million to complete the project (in
addition to the $24.0 million spent
inception-to-date).
Hedging Update
Given the ongoing strength in export coal pricing, we initiated
a targeted commodity price hedging strategy during the second
quarter of 2021. Since then, we have layered in 2.0 million metric
tons of commodity derivative contracts in the API2 market for
calendar year 2022 at a weighted average API2 price of
$79.34/ton. Additionally, we have
also layered in approximately 2.0 million tons of physical
contracts for 2022 which are tied to API2 prices. Furthermore,
assuming the midpoint of our updated 2021 tonnage guidance, we have
approximately 13.3 million tons of our coal unsold for 2022, a
significant portion of which is expected to be sold into the export
market. This will allow us to continue to benefit from continued
API2 pricing strength even though, in the near term, our commodity
derivatives could subject us to unrealized mark-to-market
fluctuations.
Tax-Exempt Solid Waste Disposal Revenue Bonds
At the start of the second quarter of 2021, CEIX successfully
closed its $75 million tax-exempt
solid waste disposal revenue bond financing through the
Pennsylvania Economic Development Financing Authority. As
highlighted in the past, the proceeds will be used to finance the
ongoing expansion of the coal refuse disposal areas at the
Company's Bailey Preparation Plant, which will support current and
future mining at the Pennsylvania Mining Complex. In 2Q21, CEIX
received reimbursement for qualified expenses in the amount of
$21.5 million, which dates back
to the initial inducement date in mid-2020. Additionally, the
Company has $53.5 million in
restricted cash associated with this financing that will be used to
fund future spending on the refuse disposal areas.
2021 Guidance and Outlook
Based on our current contracted position, estimated prices and
production plans, we are providing the following updated financial
and operating performance guidance for 2021:
- 2021 targeted coal sales volume of 23.5-25.0 million
tons
- 24.6 million tons contracted at an average revenue per ton
of $44.02/ton, assuming PJM West
power forwards of $34.75/MWh (priced
as of July 1, 2021 for 2H21)
- Average cash cost of coal sold per ton2
expectation of $27.00-$28.00/ton
- Capital expenditures of $160-$180 million
including the Itmann
project
Second Quarter Earnings Conference Call
A conference call and webcast, during which management will
discuss the second quarter 2021 financial and operational results,
is scheduled for August 3,
2021 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) 1-877-226-2859
Participant international dial
in 1-412-542-4134
Availability of Additional Information
Please refer to our website, www.consolenergy.com, for
additional information regarding the company. 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
June 30, 2021 on August 3,
2021. 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", "Free Cash Flow", "Net Leverage Ratio",
"CONSOL Marine Terminal Adjusted EBITDA", "CMT Operating Cash
Costs", "Total Cash Cost of Coal Sold" and "average unit cost
per ton" 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".
2 CEIX is unable to provide a reconciliation of Cash Cost of
Coal Sold per Ton guidance for the Itmann Project and Average Cash
Cost of Coal Sold per Ton guidance, an operating ratio derived from
non-GAAP financial measures, due to the unknown effect, timing and
potential significance of certain income statement items.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg, Pennsylvania-based producer and
exporter of high-Btu bituminous thermal 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 ~658 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:
Nathan Tucker, (724) 416-8336
nathantucker@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 June 30, 2021 and 2020 (in thousands):
|
|
Three Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
Cash Flows from
Operating Activities:
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Net Income
(Loss)
|
|
$
|
4,172
|
|
|
$
|
(21,063)
|
|
Adjustments to
Reconcile Net Income (Loss) to Net Cash Provided by (Used in)
Operating Activities:
|
|
|
|
|
|
|
|
|
Depreciation,
Depletion and Amortization
|
|
|
52,199
|
|
|
|
46,155
|
|
Other Non-Cash
Adjustments to Net Income
|
|
|
12,605
|
|
|
|
(10,803)
|
|
Changes in Working
Capital
|
|
|
25,633
|
|
|
|
(19,009)
|
|
Net Cash Provided
by (Used in) Operating Activities
|
|
|
94,609
|
|
|
|
(4,720)
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
(43,655)
|
|
|
|
(19,269)
|
|
Proceeds from Sales of
Assets
|
|
|
3,430
|
|
|
|
689
|
|
Net Cash Used in
Investing Activities
|
|
|
(40,225)
|
|
|
|
(18,580)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Net Payments on
Long-Term Debt, Including Fees
|
|
|
(20,428)
|
|
|
|
(14,141)
|
|
Proceeds from
Long-Term Debt
|
|
|
75,000
|
|
|
|
—
|
|
Other Financing
Activities
|
|
|
(230)
|
|
|
|
(8,359)
|
|
Net Cash Provided
by (Used in) Financing Activities
|
|
|
54,342
|
|
|
|
(22,500)
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents and Restricted
Cash
|
|
|
108,726
|
|
|
|
(45,800)
|
|
Cash and Cash
Equivalents and Restricted Cash at Beginning of Period
|
|
|
91,477
|
|
|
|
78,827
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
|
$
|
200,203
|
|
|
$
|
33,027
|
|
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. Cost of coal sold excludes 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, cash cost of coal sold and average cash cost of coal
sold per ton to total costs and expenses, 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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Total Costs and
Expenses
|
|
$
|
291,880
|
|
|
$
|
191,307
|
|
|
$
|
602,442
|
|
|
$
|
478,180
|
|
Less: Freight
Expense
|
|
|
(26,010)
|
|
|
|
(3,085)
|
|
|
|
(53,023)
|
|
|
|
(6,232)
|
|
Less: Selling, General
and Administrative Costs
|
|
|
(22,542)
|
|
|
|
(10,939)
|
|
|
|
(46,506)
|
|
|
|
(28,609)
|
|
Less: Gain on Debt
Extinguishment
|
|
|
106
|
|
|
|
—
|
|
|
|
789
|
|
|
|
16,833
|
|
Less: Interest
Expense, net
|
|
|
(16,187)
|
|
|
|
(14,722)
|
|
|
|
(31,448)
|
|
|
|
(30,393)
|
|
Less: Other Costs
(Non-Production)
|
|
|
(10,852)
|
|
|
|
(56,831)
|
|
|
|
(29,096)
|
|
|
|
(77,713)
|
|
Less: Depreciation,
Depletion and Amortization (Non-Production)
|
|
|
(5,034)
|
|
|
|
(16,521)
|
|
|
|
(12,918)
|
|
|
|
(25,884)
|
|
Cost of Coal
Sold
|
|
$
|
211,361
|
|
|
$
|
89,209
|
|
|
$
|
430,240
|
|
|
$
|
326,182
|
|
Less: Depreciation,
Depletion and Amortization (Production)
|
|
|
(47,165)
|
|
|
|
(29,634)
|
|
|
|
(99,178)
|
|
|
|
(75,214)
|
|
Cash Cost of Coal
Sold
|
|
$
|
164,196
|
|
|
$
|
59,575
|
|
|
$
|
331,062
|
|
|
$
|
250,968
|
|
Total Tons Sold (in
millions)
|
|
|
5.9
|
|
|
|
2.3
|
|
|
|
12.7
|
|
|
|
8.2
|
|
Average Cost of Coal
Sold per Ton
|
|
$
|
36.00
|
|
|
$
|
38.32
|
|
|
$
|
33.76
|
|
|
$
|
39.55
|
|
Less: Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
|
7.98
|
|
|
|
12.42
|
|
|
|
7.67
|
|
|
|
9.00
|
|
Average Cash Cost
of Coal Sold per Ton
|
|
$
|
28.02
|
|
|
$
|
25.90
|
|
|
$
|
26.09
|
|
|
$
|
30.55
|
|
We evaluate our average margin per ton sold and average cash
margin per ton sold on a per-ton basis. We define average margin
per ton sold as average revenue per ton sold, net of average cost
of coal sold per ton. We define average cash margin per ton sold as
average revenue per ton sold, net of average cash cost of coal sold
per ton. The GAAP measure most directly comparable to average
margin per ton sold and average cash margin per ton sold is total
coal revenue.
The following table presents a reconciliation of average margin
per ton sold and 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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Total Coal Revenue
(PAMC Segment)
|
|
$
|
258,482
|
|
|
$
|
102,026
|
|
|
$
|
542,948
|
|
|
$
|
357,478
|
|
Operating and Other
Costs
|
|
|
175,048
|
|
|
|
116,406
|
|
|
|
360,158
|
|
|
|
328,681
|
|
Less: Other Costs
(Non-Production)
|
|
|
(10,852)
|
|
|
|
(56,831)
|
|
|
|
(29,096)
|
|
|
|
(77,713)
|
|
Total Cash Cost of
Coal Sold
|
|
|
164,196
|
|
|
|
59,575
|
|
|
|
331,062
|
|
|
|
250,968
|
|
Add: Depreciation,
Depletion and Amortization
|
|
|
52,199
|
|
|
|
46,155
|
|
|
|
112,096
|
|
|
|
101,098
|
|
Less: Depreciation,
Depletion and Amortization (Non-Production)
|
|
|
(5,034)
|
|
|
|
(16,521)
|
|
|
|
(12,918)
|
|
|
|
(25,884)
|
|
Total Cost of Coal
Sold
|
|
$
|
211,361
|
|
|
$
|
89,209
|
|
|
$
|
430,240
|
|
|
$
|
326,182
|
|
Total Tons Sold (in
millions)
|
|
|
5.9
|
|
|
|
2.3
|
|
|
|
12.7
|
|
|
|
8.2
|
|
Average Revenue per
Ton Sold
|
|
$
|
44.02
|
|
|
$
|
43.82
|
|
|
$
|
42.60
|
|
|
$
|
43.34
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
|
28.02
|
|
|
|
25.90
|
|
|
|
26.09
|
|
|
|
30.55
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
|
7.98
|
|
|
|
12.42
|
|
|
|
7.67
|
|
|
|
9.00
|
|
Average Cost of Coal
Sold per Ton
|
|
|
36.00
|
|
|
|
38.32
|
|
|
|
33.76
|
|
|
|
39.55
|
|
Average Margin per
Ton Sold
|
|
|
8.02
|
|
|
|
5.50
|
|
|
|
8.84
|
|
|
|
3.79
|
|
Add: Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
|
7.98
|
|
|
|
12.42
|
|
|
|
7.67
|
|
|
|
9.00
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
16.00
|
|
|
$
|
17.92
|
|
|
$
|
16.51
|
|
|
$
|
12.79
|
|
We define CMT operating costs as operating and other costs
related to throughput tons. CMT operating costs exclude any
indirect costs, such as selling, general and administrative costs,
direct administration costs, interest expenses, and other costs not
directly attributable to throughput tons. CMT operating cash costs
include CMT operating costs, less depreciation, depletion and
amortization costs. The GAAP measure most directly comparable to
CMT operating costs and CMT operating cash costs is total costs and
expenses.
The following table presents a reconciliation of CMT operating
costs and CMT operating cash costs 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
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
Total Costs and
Expenses
|
|
$
|
291,880
|
|
|
$
|
191,307
|
|
Less: Freight
Expense
|
|
|
(26,010)
|
|
|
|
(3,085)
|
|
Less: Selling, General
and Administrative Costs
|
|
|
(22,542)
|
|
|
|
(10,939)
|
|
Less: Gain on Debt
Extinguishment
|
|
|
106
|
|
|
|
—
|
|
Less: Interest
Expense, net
|
|
|
(16,187)
|
|
|
|
(14,722)
|
|
Less: Other Costs
(Non-Throughput)
|
|
|
(169,781)
|
|
|
|
(112,602)
|
|
Less: Depreciation,
Depletion and Amortization (Non-Throughput)
|
|
|
(50,999)
|
|
|
|
(44,895)
|
|
CMT Operating
Costs
|
|
$
|
6,467
|
|
|
$
|
5,064
|
|
Less: Depreciation,
Depletion and Amortization (Throughput)
|
|
|
(1,200)
|
|
|
|
(1,260)
|
|
CMT Operating Cash
Costs
|
|
$
|
5,267
|
|
|
$
|
3,804
|
|
We define average unit cost per ton as the cash cost of coal
sold including idle mine costs incurred associated with the
COVID-19 pandemic less depreciation, depletion and amortization
costs related to the Pennsylvania Mining Operation assets divided
by the total tons of coal sold from the Pennsylvania Mining
Operation assets. These costs exclude any indirect costs, such as
selling, general and administrative costs, freight expenses,
interest expenses, depreciation, depletion and amortization on
non-production assets and other costs not directly attributable to
the production of coal.
The following table presents a reconciliation of average unit
cost per ton to total costs and expenses, the most directly
comparable GAAP financial measure, on a historical basis, for each
of the periods presented (in thousands, except per ton
information).
|
|
Three Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
Total Costs and
Expenses
|
|
$
|
291,880
|
|
|
$
|
191,307
|
|
Less: Freight
Expense
|
|
|
(26,010)
|
|
|
|
(3,085)
|
|
Less: Selling, General
and Administrative Costs
|
|
|
(22,542)
|
|
|
|
(10,939)
|
|
Less: Gain on Debt
Extinguishment
|
|
|
106
|
|
|
|
—
|
|
Less: Interest
Expense, net
|
|
|
(16,187)
|
|
|
|
(14,722)
|
|
Less: Other Costs
(Non-Production)
|
|
|
(10,852)
|
|
|
|
(56,831)
|
|
Less: Depreciation,
Depletion and Amortization (Non-Production)
|
|
|
(5,034)
|
|
|
|
(16,521)
|
|
Cost of Coal
Sold
|
|
$
|
211,361
|
|
|
$
|
89,209
|
|
Less: Depreciation,
Depletion and Amortization (Production)
|
|
|
(47,165)
|
|
|
|
(29,634)
|
|
Cash Cost of Coal
Sold
|
|
$
|
164,196
|
|
|
$
|
59,575
|
|
Add: Idle Mine
Costs
|
|
|
—
|
|
|
|
31,847
|
|
Total Unit
Costs
|
|
$
|
164,196
|
|
|
$
|
91,422
|
|
Total Tons Sold (in
millions)
|
|
|
5.9
|
|
|
|
2.3
|
|
Average Cost of Coal
Sold per Ton
|
|
$
|
36.00
|
|
|
$
|
38.32
|
|
Less: Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
|
7.98
|
|
|
|
12.42
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
$
|
28.02
|
|
|
$
|
25.90
|
|
Add: Idle Mine Costs
per Ton
|
|
|
—
|
|
|
|
13.68
|
|
Average Unit Cost
per Ton
|
|
$
|
28.02
|
|
|
$
|
39.58
|
|
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
stock-based compensation and unrealized loss on commodity
derivative instruments. 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 (in thousands).
|
|
Three Months Ended
June 30, 2021
|
|
|
|
PA Mining
Complex
|
|
|
CONSOL
Marine
Terminal
|
|
|
Other
|
|
|
Total
Company
|
|
Net Income
(Loss)
|
|
$
|
6,166
|
|
|
$
|
8,181
|
|
|
$
|
(10,175)
|
|
|
$
|
4,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,893)
|
|
|
|
(8,893)
|
|
Add: Interest
Expense, net
|
|
|
478
|
|
|
|
1,536
|
|
|
|
14,173
|
|
|
|
16,187
|
|
Less: Interest
Income
|
|
|
(36)
|
|
|
|
—
|
|
|
|
(775)
|
|
|
|
(811)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
|
6,608
|
|
|
|
9,717
|
|
|
|
(5,670)
|
|
|
|
10,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
|
|
50,169
|
|
|
|
1,200
|
|
|
|
830
|
|
|
|
52,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
56,777
|
|
|
$
|
10,917
|
|
|
$
|
(4,840)
|
|
|
$
|
62,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
Compensation
|
|
$
|
1,053
|
|
|
$
|
48
|
|
|
$
|
109
|
|
|
$
|
1,210
|
|
Gain on Debt
Extinguishment
|
|
|
—
|
|
|
|
—
|
|
|
|
(106)
|
|
|
|
(106)
|
|
Pension
Settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
22
|
|
|
|
22
|
|
Unrealized Loss on
Commodity Derivative Instruments
|
|
|
20,437
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,437
|
|
Total Pre-tax
Adjustments
|
|
|
21,490
|
|
|
|
48
|
|
|
|
25
|
|
|
|
21,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
78,267
|
|
|
$
|
10,965
|
|
|
$
|
(4,815)
|
|
|
$
|
84,417
|
|
|
|
|
|
Three Months Ended
June 30, 2020
|
|
|
|
PA Mining
Complex
|
|
|
CONSOL
Marine
Terminal
|
|
|
Other
|
|
|
Total
Company
|
|
Net (Loss)
Income
|
|
$
|
(22,350)
|
|
|
$
|
7,750
|
|
|
$
|
(6,463)
|
|
|
$
|
(21,063)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,683)
|
|
|
|
(7,683)
|
|
Add: Interest
Expense, net
|
|
|
527
|
|
|
|
1,542
|
|
|
|
12,653
|
|
|
|
14,722
|
|
Less: Interest
Income
|
|
|
—
|
|
|
|
—
|
|
|
|
(122)
|
|
|
|
(122)
|
|
(Loss) Earnings
Before Interest & Taxes (EBIT)
|
|
|
(21,823)
|
|
|
|
9,292
|
|
|
|
(1,615)
|
|
|
|
(14,146)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
|
|
46,793
|
|
|
|
1,260
|
|
|
|
(1,898)
|
|
|
|
46,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
24,970
|
|
|
$
|
10,552
|
|
|
$
|
(3,513)
|
|
|
$
|
32,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
1,912
|
|
|
$
|
108
|
|
|
$
|
216
|
|
|
$
|
2,236
|
|
Total Pre-tax
Adjustments
|
|
|
1,912
|
|
|
|
108
|
|
|
|
216
|
|
|
|
2,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
26,882
|
|
|
$
|
10,660
|
|
|
$
|
(3,297)
|
|
|
$
|
34,245
|
|
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 stock-based compensation, unrealized loss
on commodity derivative instruments, 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
|
|
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
Net
Income
|
|
$
|
35,950
|
|
|
$
|
5,837
|
|
Plus:
|
|
|
|
|
|
|
|
|
Interest Expense,
net
|
|
|
62,241
|
|
|
|
62,215
|
|
Depreciation,
Depletion and Amortization
|
|
|
221,758
|
|
|
|
211,320
|
|
Income
Taxes
|
|
|
6,039
|
|
|
|
1,422
|
|
Stock/Unit-Based
Compensation
|
|
|
7,048
|
|
|
|
9,635
|
|
Gain on Debt
Extinguishment
|
|
|
(5,308)
|
|
|
|
(17,021)
|
|
Unrealized Loss on
Commodity Derivative Instruments
|
|
|
20,437
|
|
|
|
—
|
|
CCR Adjusted EBITDA
per Credit Agreement
|
|
|
—
|
|
|
|
(66,169)
|
|
Cash Distributions
from CONSOL Coal Resources LP
|
|
|
—
|
|
|
|
8,254
|
|
Cash Payments for
Legacy Employee Liabilities, Net of Non-Cash Expense
|
|
|
(26,107)
|
|
|
|
(18,609)
|
|
Other Adjustments to
Net Income
|
|
|
2,118
|
|
|
|
6,333
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
324,176
|
|
|
$
|
203,217
|
|
|
|
|
|
|
|
|
|
|
Consolidated First
Lien Debt
|
|
$
|
369,367
|
|
|
$
|
399,662
|
|
Senior Secured Second
Lien Notes
|
|
|
151,957
|
|
|
|
178,452
|
|
MEDCO Revenue
Bonds
|
|
|
102,865
|
|
|
|
102,865
|
|
PEDFA Bonds
|
|
|
75,000
|
|
|
|
—
|
|
Advance Royalty
Commitments
|
|
|
2,185
|
|
|
|
1,895
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
|
701,374
|
|
|
|
682,874
|
|
Less:
|
|
|
|
|
|
|
|
|
Advance Royalty
Commitments
|
|
|
2,185
|
|
|
|
1,895
|
|
Cash on
Hand
|
|
|
146,667
|
|
|
|
32,925
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
552,522
|
|
|
$
|
648,054
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
|
1.70
|
|
|
|
3.19
|
|
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 (used in) operations, the most
directly comparable GAAP financial measure, on a historical basis,
for each of the periods indicated (in thousands).
|
|
Three Months
Ended
|
|
Organic Free Cash
Flow
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
Net Cash Provided
by (Used in) Operations
|
|
$
|
94,609
|
|
|
$
|
(4,720)
|
|
Capital
Expenditures
|
|
|
(43,655)
|
|
|
|
(19,269)
|
|
Organic Free Cash
Flow
|
|
$
|
50,954
|
|
|
$
|
(23,989)
|
|
|
|
|
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
|
|
—
|
|
|
|
—
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
|
$
|
50,954
|
|
|
$
|
(23,989)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
Free Cash
Flow
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
Net Cash Provided
by (Used in) Operations
|
|
$
|
94,609
|
|
|
$
|
(4,720)
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
(43,655)
|
|
|
|
(19,269)
|
|
Proceeds from Sales
of Assets
|
|
|
3,430
|
|
|
|
689
|
|
Free Cash
Flow
|
|
$
|
54,384
|
|
|
$
|
(23,300)
|
|
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 our
expectations with respect to the Itmann Mine or any other strategy
that involves risks or uncertainties, we are making forward-looking
statements. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. Specific risks, contingencies and
uncertainties are discussed in more detail in our filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release speak only as of the date of this press
release and CEIX disclaims any intention or obligation to update
publicly any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
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SOURCE CONSOL Energy Inc.