CANONSBURG, Pa., May 3, 2022
/PRNewswire/ -- Today, CONSOL Energy Inc. (NYSE: CEIX) reported
financial and operating results for the period ended March 31, 2022.
First Quarter 2022 Highlights
Include:
- GAAP net loss of ($4.5)
million;
- Net income after adjusting for the impact of unrealized
mark-to-market losses on commodity derivative
instruments1 came in at $72.0
million;
- Quarterly adjusted EBITDA1 of $169.2 million;
- Itmann low-vol metallurgical coal project remains on track
for a 2H2022 start-up;
- Net cash provided by operating activities of $148.2 million;
- Quarterly free cash flow1 of $118.0 million;
- Coal shipments improve to 6.5 million tons;
- 2023 contracted position improved to 16.3 million
tons;
- Cash and cash equivalents of $222.9
million plus $46.1 million in
restricted cash as of March 31,
2022;
- Debt repayments, excluding premiums, of $38.5 million during 1Q22, including $25.0 million of second lien notes; and
- Net leverage ratio1 drops below 1.0x as of
March 31, 2022.
Management Comments
"CEIX delivered a very strong 1Q22 performance across all of our
business segments, shipping 6.5 million tons out of the
Pennsylvania Mining Complex (PAMC) and 3.6 million tons from the
CONSOL Marine Terminal (CMT), generating $118 million in free cash flow and increasing our
unrestricted cash position by more than $70
million, while making debt repayments of nearly $39 million. Our operations ran very well in the
quarter, as we moved past the geological issues we encountered in
the second half of 2021 and have seen an ongoing improvement in
railroad performance since the end of 2021. Additionally, our
CONSOL Marine Terminal recorded its highest quarterly terminal
revenue in its history. We continued to take advantage of the
ongoing strength in the coal markets and layered in additional
contract tons for 2023 and beyond. Finally, our Itmann preparation
plant remains on schedule with start-up expected in the second half
of 2022."
"On the safety front, our Harvey Mine, Bailey Preparation Plant
and CONSOL Marine Terminal each had ZERO employee recordable
incidents during the first quarter of 2022. Our 1Q22 total
recordable incident rate of 0.52 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 sales team sold 6.5 million tons of PAMC coal during the
first quarter of 2022 generating coal revenue of $473.0 million for the PAMC segment. After
adjusting for the effect of settlements on commodity risk
derivative instruments, the PAMC generated an average realized
coal revenue per ton sold1 of $59.60, compared to 6.9 million tons at an
average realized coal revenue per ton sold1 of
$41.39 in the year-ago period. The
significant improvement in the average realized coal revenue per
ton sold1 was due to substantial improvements in the
coal, natural gas, and electric power markets compared to the
prior-year quarter.
On the domestic front, the commodity markets continued
their upward trend during the first quarter of 2022 compared to the
prior-year period and resulted in some of the highest quarterly
commodity pricing levels we've seen since becoming an independent
publicly traded company. Henry Hub natural gas spot prices averaged
$4.67/mmBtu in 1Q22, a 33%
improvement compared to the prior-year period. PJM West day-ahead
power prices averaged $55.58/MWh in
the quarter, an improvement of 82% compared to 1Q21, and the
highest average quarterly level we've witnessed since becoming an
independent public company. Despite the ongoing strength in
domestic demand and commodity pricing, supply tightness has
remained a consistent theme. The U.S. Energy Information
Administration (EIA) estimates in its latest Short-Term Energy
Outlook that domestic coal consumption will increase to 560 million
tons in 2022; however, total primary supply and waste coal
production, after accounting for estimated export tons, will be
535 million tons, which requires an inventory drawdown of
approximately 25 million tons at domestic power plants. The EIA
estimates that the U.S. will finish 2022 with 70 million tons
of coal inventory at domestic power plants, compared to
95 million tons at the end of 2021. The majority of our
domestic customers' stockpiles remain below target levels, and
demand for our product remains robust.
On the export front, seaborne thermal coal markets remained
volatile in the first quarter of 2022, with API2 prices averaging
$234/ton compared to $67/ton in the first quarter of 2021. Global LNG
prices remained elevated with the Asian spot market benchmark price
(JKM) averaging $31.30/mmBtu in 1Q22,
a 240% increase compared to the prior-year period. The lack of
supply response has continued to be a general theme in the coal
space since early 2021; however, the ongoing conflict between
Russia and Ukraine, and the subsequent response to it,
could contribute to extending the duration of this market
tightness. Wood Mackenzie estimates that with Russia supplying 26% of the seaborne high
calorific value market, "actions by individual buyers will keep the
market tight". Wood Mackenzie also points out that they expect
Europe to adopt a number of short
term strategies to end its dependence on Russian energy, one of
which is a focus on increasing coal-fired generation. Additionally,
it expects European utilities to postpone plant closures with
energy flows being impacted at least through 2023.
We have continued to secure additional coal sales contracts,
and, as such, we remain near fully-contracted for 2022
and have increased our 2023 sold position to 16.3 million tons.
Operations Summary
During the first quarter of 2022, we had a strong operating
performance and ran our four available longwalls at the PAMC at a
normalized run-rate after encountering operational and geological
issues during 3Q21 and early 4Q21. Additionally, the transportation
delays that limited our production in 4Q21 have steadily improved
throughout 1Q22, as our transportation partners continued to
improve staffing levels and move past their COVID-related labor
issues. The PAMC produced 6.4 million tons in 1Q22, marking the
second consecutive quarter in which we have increased our
production. This compares to 7.0 million tons in the year-ago
quarter. The reduction compared to the prior-year was due to
running our five available longwalls in 1Q21, compared to four
available longwalls in 1Q22 as we pulled back development of our
fifth longwall during the COVID-19 related demand decline in
2020.
CEIX's total costs and expenses during the first quarter of 2022
were $366.5 million, compared to
$310.6 million in the year-ago
quarter, and CEIX's total coal revenue during the first quarter of
2022 was $476.4 million,
compared to $285.5 million in
the year-ago period. Including the effects of settlements
of commodity derivative instruments at a loss of $86.3 million, total realized coal
revenue1 in 1Q22 was $390.1
million. The significant improvement in total realized coal
revenue1, despite lower production and sales volumes
compared to the prior-year quarter, was the result of an
$18.21 improvement in average
realized coal revenue per ton sold1 at the Pennsylvania
Mining Complex as demand for our product specifically and coal
markets generally have steadily strengthened since the prior-year
period. Additionally, total revenue in 1Q22 was impacted by a
$101.9 million pre-tax unrealized
mark-to-market loss related to commodity derivative instruments, as
the forward API2 curve remained volatile in the quarter. Average
cash cost of coal sold per ton1 for the first
quarter of 2022 was $29.91, compared
to $24.44 in the year-ago quarter.
The increase was due to a combination of factors, including the
ongoing development work associated with the fifth longwall,
significant inflationary pressures that continued to weigh on our
input costs such as labor, maintenance, supply, contractor and
project expenses and lower operating leverage due to less sales
tonnage.
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March 31,
2022
|
|
|
March 31,
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Coal
Revenue
|
|
thousands
|
|
$
|
476,368
|
|
|
$
|
285,535
|
|
Settlements of
Commodity Derivatives
|
|
thousands
|
|
$
|
(86,252)
|
|
|
$
|
—
|
|
Total Realized Coal
Revenue1
|
|
thousands
|
|
$
|
390,116
|
|
|
$
|
285,535
|
|
Total Costs and
Expenses
|
|
thousands
|
|
$
|
366,501
|
|
|
$
|
310,562
|
|
Total Cash Cost of Coal
Sold1
|
|
thousands
|
|
$
|
195,101
|
|
|
$
|
166,864
|
|
Coal
Production
|
|
million tons
|
|
|
6.4
|
|
|
|
7.0
|
|
Coal Sales
|
|
million tons
|
|
|
6.5
|
|
|
|
6.9
|
|
Average Realized Coal
Revenue per Ton Sold1
|
|
per ton
|
|
$
|
59.60
|
|
|
$
|
41.39
|
|
Average Cash Cost of
Coal Sold per Ton1
|
|
per ton
|
|
$
|
29.91
|
|
|
$
|
24.44
|
|
Average Cash Margin per
Ton Sold1
|
|
per ton
|
|
$
|
29.69
|
|
|
$
|
16.95
|
|
CONSOL Marine Terminal Review
For the first quarter of 2022, throughput volumes at the CMT
were 3.6 million tons, compared to 4.1 million tons in the year-ago
period. Terminal revenues and CMT total costs and expenses were
$21.4 million and $10.5 million, respectively, compared to
$18.2 million and $9.5 million, respectively, during the year-ago
period. Despite lower throughput tonnage, terminal revenue was
significantly improved in 1Q22 compared to 1Q21 as the throughput
rate per ton was substantially improved due to increased export
demand and commodity pricing strength. As a result, 1Q22 marked the
highest terminal revenue in the history of the CMT. CMT operating
cash costs1 were $5.9
million in 1Q22, compared to $5.3
million in 1Q21. CONSOL Marine Terminal net income and
CONSOL Marine Terminal Adjusted EBITDA1 were
$11.6 million and $14.5 million, respectively, in the first quarter
of 2022 compared to $9.1 million and
$12.0 million, respectively, in the
year-ago period.
Itmann Update
Our Itmann project continued to progress according to
expectations during the first quarter of 2022, and the project
remains on track, with preparation plant start-up and scale-up to
full run-rate production expected during the second half of
2022.
- Relocation of the existing prep plant to the Itmann site is
proceeding on schedule, with disassembly of the existing plant
complete and approximately 80% of the structure and equipment has
already been transported to Itmann.
- The main Itmann plant building foundations are complete and
significant progress was made with structural steel erection and
plant circuitry installation during 1Q22.
- The new rail siding and mainline construction activities are
well underway and are on target to meet the overall project
schedule.
- The mine produced approximately 44,000 tons of low-vol
metallurgical coal (on a clean coal equivalent basis) and sold
approximately 19,000 tons in 1Q22. Most of the unsold inventory
from 1Q22 is scheduled for export shipment through the CMT in
2Q22.
- We continue to grow staffing levels consistent with our
production ramp-up plan for 2022.
Debt Repurchases Update
During the first quarter of 2022, CEIX made mandatory repayments
of $6.5 million, $6.3 million and $0.7
million on our equipment financed debt, Term Loan A and Term
Loan B, respectively. Additionally, CEIX spent $26.4 million to repurchase $25.0 million in principal amount of its second
lien notes, as we continued to execute on our stated goal of
reducing our total debt levels. This brings our total debt
repayments and repurchases in the quarter to $38.5 million (excluding the premium paid on the
second lien notes).
2022 Guidance and Outlook
Based on our current contracted position, estimated prices and
production plans, we are providing the following financial and
operating performance guidance for full fiscal year 2022:
- 2022 targeted PAMC coal sales volume of 23.0-25.0 million
tons
- PAMC average realized coal revenue per ton sold2
expectation of $58.00-$61.00
- PAMC average cash cost of coal sold per ton2
expectation of $29.00-$31.00
- Capital expenditures (including Itmann development):
$162-$195
million
- Expect to produce between 0.3 and 0.5 million tons of coal at
the Itmann Mine (on a clean coal equivalent basis) with the
majority of it in 2H2022
First Quarter Earnings Conference Call
A conference call and webcast, during which management will
discuss the first quarter 2022 financial and operational
results, is scheduled for May 3, 2022 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 period
ended March 31, 2022 on May 3,
2022. 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 Realized Coal Revenue", "Total Cash Cost of
Coal Sold" and "Net Income Adjusted for the Effect of Unrealized
Mark-to-Market Losses on Commodity Derivative Instruments" are
non-GAAP financial measures and "Average Realized Coal Revenue per
Ton Sold", "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 Average
Realized Coal Revenue per Ton Sold and Average Cash Cost of Coal
Sold per Ton guidance, operating ratios 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 ~612
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 1.4 billion tons
of greenfield thermal and metallurgical coal reserves and resources
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:
Kurt Salvatori, (724) 416-8319
kurtsalvatori@consolenergy.com
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. We define average cash cost of coal sold per ton
as cash cost of coal sold divided by tons sold. The GAAP
measure most directly comparable to cost of coal sold, cash cost of
coal sold and average cash cost of coal sold per ton 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
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Total Costs and
Expenses
|
|
$
|
366,501
|
|
|
$
|
310,562
|
|
Less: Freight Expense
|
|
|
(38,389)
|
|
|
|
(27,013)
|
|
Less: Selling, General and Administrative Costs
|
|
|
(37,149)
|
|
|
|
(23,964)
|
|
Less: (Loss) Gain on Debt Extinguishment
|
|
|
(2,122)
|
|
|
|
683
|
|
Less: Interest Expense, net
|
|
|
(14,352)
|
|
|
|
(15,261)
|
|
Less: Other Costs (Non-Production)
|
|
|
(23,434)
|
|
|
|
(18,246)
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
|
(7,869)
|
|
|
|
(7,883)
|
|
Cost of Coal
Sold
|
|
$
|
243,186
|
|
|
$
|
218,878
|
|
Less: Depreciation, Depletion and Amortization
(Production)
|
|
|
(48,085)
|
|
|
|
(52,014)
|
|
Cash Cost of Coal
Sold
|
|
$
|
195,101
|
|
|
$
|
166,864
|
|
Total Tons Sold (in
millions)
|
|
|
6.5
|
|
|
|
6.9
|
|
Average Cost of Coal
Sold per Ton
|
|
$
|
37.48
|
|
|
$
|
31.85
|
|
Less: Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
|
7.57
|
|
|
|
7.41
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
$
|
29.91
|
|
|
$
|
24.44
|
|
We evaluate our average realized coal revenue per ton sold,
average margin per ton sold and average cash margin per ton
sold on a per-ton basis. We define average realized coal
revenue per ton sold as total coal revenue, net of settlements
of commodity derivatives divided by tons sold. We define
average margin per ton sold as average realized coal revenue per
ton sold, net of average cost of coal sold per ton. We define
average cash margin per ton sold as average realized coal revenue
per ton sold, net of average cash cost of coal sold per ton. The
GAAP measure most directly comparable to average realized coal
revenue per ton sold, average margin per ton sold and average
cash margin per ton sold is total coal revenue.
The following table presents a reconciliation of average
realized coal revenue per ton sold, 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
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Total Coal Revenue (PAMC Segment)
|
|
$
|
472,960
|
|
|
$
|
284,465
|
|
Add: Settlements of Commodity Derivatives
|
|
|
(86,252)
|
|
|
|
—
|
|
Total Realized Coal
Revenue
|
|
$
|
386,708
|
|
|
$
|
284,465
|
|
Operating and Other Costs
|
|
|
218,535
|
|
|
|
185,110
|
|
Less: Other Costs (Non-Production)
|
|
|
(23,434)
|
|
|
|
(18,246)
|
|
Total Cash Cost of
Coal Sold
|
|
|
195,101
|
|
|
|
166,864
|
|
Add: Depreciation, Depletion and Amortization
|
|
|
55,954
|
|
|
|
59,897
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
|
(7,869)
|
|
|
|
(7,883)
|
|
Total Cost of Coal
Sold
|
|
$
|
243,186
|
|
|
$
|
218,878
|
|
Total Tons Sold (in
millions)
|
|
|
6.5
|
|
|
|
6.9
|
|
Average Realized
Coal Revenue per Ton Sold
|
|
$
|
59.60
|
|
|
$
|
41.39
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
|
29.91
|
|
|
|
24.44
|
|
Depreciation, Depletion
and Amortization Costs per Ton Sold
|
|
|
7.57
|
|
|
|
7.41
|
|
Average Cost of Coal
Sold per Ton
|
|
|
37.48
|
|
|
|
31.85
|
|
Average Margin per
Ton Sold
|
|
|
22.12
|
|
|
|
9.54
|
|
Add: Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
|
7.57
|
|
|
|
7.41
|
|
Average Cash Margin
per Ton Sold
|
|
$
|
29.69
|
|
|
$
|
16.95
|
|
We define CMT operating costs as operating and other costs
related to throughput tons. CMT operating costs exclude any
indirect costs, such as freight expense, selling, general and
administrative costs, (loss) gain on debt extinguishment,
depreciation, depletion and amortization of non-throughput assets,
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 on throughput assets. 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
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Total Costs and
Expenses
|
|
$
|
366,501
|
|
|
$
|
310,562
|
|
Less: Freight Expense
|
|
|
(38,389)
|
|
|
|
(27,013)
|
|
Less: Selling, General and Administrative Costs
|
|
|
(37,149)
|
|
|
|
(23,964)
|
|
Less: (Loss) Gain on Debt Extinguishment
|
|
|
(2,122)
|
|
|
|
683
|
|
Less: Interest Expense, net
|
|
|
(14,352)
|
|
|
|
(15,261)
|
|
Less: Other Costs (Non-Throughput)
|
|
|
(212,617)
|
|
|
|
(179,778)
|
|
Less: Depreciation, Depletion and Amortization
(Non-Throughput)
|
|
|
(54,789)
|
|
|
|
(58,683)
|
|
CMT Operating
Costs
|
|
$
|
7,083
|
|
|
$
|
6,546
|
|
Less: Depreciation, Depletion and Amortization
(Throughput)
|
|
|
(1,165)
|
|
|
|
(1,214)
|
|
CMT Operating Cash
Costs
|
|
$
|
5,918
|
|
|
$
|
5,332
|
|
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 mark-to-market gains or
losses on commodity derivative instruments. The GAAP measure most
directly comparable to adjusted EBITDA is net income (loss).
The following tables present a reconciliation of adjusted EBITDA
to net income (loss), the most directly comparable GAAP financial
measure, on a historical basis, for each of the periods indicated
(in thousands).
|
|
Three Months Ended
March 31, 2022
|
|
|
|
PAMC
|
|
|
CONSOL
Marine
Terminal
|
|
|
Other
|
|
|
Total
Company
|
|
Net Income
(Loss)
|
|
$
|
2,097
|
|
|
$
|
11,613
|
|
|
$
|
(18,160)
|
|
|
$
|
(4,450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Income Tax
Benefit
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,522)
|
|
|
|
(3,522)
|
|
Add: Interest Expense,
net
|
|
|
189
|
|
|
|
1,531
|
|
|
|
12,632
|
|
|
|
14,352
|
|
Less: Interest
Income
|
|
|
(415)
|
|
|
|
—
|
|
|
|
(914)
|
|
|
|
(1,329)
|
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
|
|
1,871
|
|
|
|
13,144
|
|
|
|
(9,964)
|
|
|
|
5,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
|
|
50,956
|
|
|
|
1,165
|
|
|
|
3,833
|
|
|
|
55,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A (EBITDA)
|
|
$
|
52,827
|
|
|
$
|
14,309
|
|
|
$
|
(6,131)
|
|
|
$
|
61,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
Compensation
|
|
$
|
3,529
|
|
|
$
|
168
|
|
|
$
|
504
|
|
|
$
|
4,201
|
|
Loss on Debt
Extinguishment
|
|
|
—
|
|
|
|
—
|
|
|
|
2,122
|
|
|
|
2,122
|
|
Unrealized
Mark-to-Market Loss on Commodity Derivative
Instruments
|
|
|
101,902
|
|
|
|
—
|
|
|
|
—
|
|
|
|
101,902
|
|
Total Pre-tax
Adjustments
|
|
|
105,431
|
|
|
|
168
|
|
|
|
2,626
|
|
|
|
108,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
158,258
|
|
|
$
|
14,477
|
|
|
$
|
(3,505)
|
|
|
$
|
169,230
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
|
|
PAMC
|
|
|
CONSOL
Marine
Terminal
|
|
|
Other
|
|
|
Total
Company
|
|
Net Income
(Loss)
|
|
$
|
42,450
|
|
|
$
|
9,149
|
|
|
$
|
(25,195)
|
|
|
$
|
26,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
|
—
|
|
|
|
—
|
|
|
|
5,185
|
|
|
|
5,185
|
|
Add: Interest Expense,
net
|
|
|
642
|
|
|
|
1,537
|
|
|
|
13,082
|
|
|
|
15,261
|
|
Less: Interest
Income
|
|
|
—
|
|
|
|
—
|
|
|
|
(858)
|
|
|
|
(858)
|
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
|
|
43,092
|
|
|
|
10,686
|
|
|
|
(7,786)
|
|
|
|
45,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
|
|
54,781
|
|
|
|
1,214
|
|
|
|
3,902
|
|
|
|
59,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A (EBITDA)
|
|
$
|
97,873
|
|
|
$
|
11,900
|
|
|
$
|
(3,884)
|
|
|
$
|
105,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
Compensation
|
|
$
|
1,312
|
|
|
$
|
61
|
|
|
$
|
136
|
|
|
$
|
1,509
|
|
Gain on Debt
Extinguishment
|
|
|
—
|
|
|
|
—
|
|
|
|
(683)
|
|
|
|
(683)
|
|
Total Pre-tax
Adjustments
|
|
|
1,312
|
|
|
|
61
|
|
|
|
(547)
|
|
|
|
826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
99,185
|
|
|
$
|
11,961
|
|
|
$
|
(4,431)
|
|
|
$
|
106,715
|
|
We define net income after adjusting for the impact of
unrealized mark-to-market losses on commodity derivative
instruments as net (loss) income adjusted for the impact of current
period unrealized mark-to-market gains or losses related to
commodity derivatives. The GAAP measure most directly comparable to
net income after adjusting for the impact of unrealized
mark-to-market losses on commodity derivative instruments is net
(loss) income.
The following table presents a reconciliation of net income
after adjusting for the impact of unrealized
mark-to-market losses on commodity derivative instruments to net
(loss) income, the most directly comparable GAAP financial measure,
on a historical basis, for each of the periods indicated (in
thousands).
|
|
Three Months Ended
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Net (Loss)
Income
|
|
$
|
(4,450)
|
|
|
$
|
26,404
|
|
Less: Unrealized
Mark-to-Market Loss on Commodity Derivative Instruments
|
|
|
101,902
|
|
|
|
—
|
|
Add: Effect of Income
Taxes
|
|
|
(25,465)
|
|
|
|
—
|
|
Net Income After
Adjusting for the Impact of Unrealized Mark-to-Market Losses on
Commodity Derivative Instruments
|
|
$
|
71,987
|
|
|
$
|
26,404
|
|
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
mark-to-market 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
|
|
|
|
March 31,
2022
|
|
|
March 31,
2021
|
|
Net
Income
|
|
$
|
3,256
|
|
|
$
|
10,715
|
|
Plus:
|
|
|
|
|
|
|
|
|
Interest Expense, net
|
|
|
62,433
|
|
|
|
60,776
|
|
Depreciation, Depletion and Amortization
|
|
|
220,640
|
|
|
|
215,714
|
|
Income Taxes
|
|
|
(7,410)
|
|
|
|
7,249
|
|
Stock-Based Compensation
|
|
|
9,324
|
|
|
|
8,074
|
|
Loss (Gain) on Debt Extinguishment
|
|
|
2,148
|
|
|
|
(5,202)
|
|
Unrealized Mark-to-Market Loss on Commodity Derivative
Instruments
|
|
|
154,106
|
|
|
|
—
|
|
Cash Payments for Legacy Employee Liabilities, Net of
Non-Cash Expense
|
|
|
(36,540)
|
|
|
|
(21,208)
|
|
Other Adjustments to Net Income
|
|
|
(4,070)
|
|
|
|
3,309
|
|
Consolidated EBITDA per
Credit Agreement
|
|
$
|
403,887
|
|
|
$
|
279,427
|
|
|
|
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
320,134
|
|
|
$
|
382,454
|
|
Senior Secured Second Lien Notes
|
|
|
124,107
|
|
|
|
156,957
|
|
MEDCO Revenue Bonds
|
|
|
102,865
|
|
|
|
102,865
|
|
PEDFA Bonds
|
|
|
75,000
|
|
|
|
—
|
|
Advance Royalty Commitments
|
|
|
4,858
|
|
|
|
2,185
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
|
626,964
|
|
|
|
644,461
|
|
Less:
|
|
|
|
|
|
|
|
|
Advance Royalty Commitments
|
|
|
4,858
|
|
|
|
2,185
|
|
Cash on Hand
|
|
|
222,901
|
|
|
|
91,174
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
399,205
|
|
|
$
|
551,102
|
|
|
|
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
|
0.99
|
|
|
|
1.97
|
|
Free cash flow is a non-GAAP financial measure. Management
believes that this measure is 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 does 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 table presents a reconciliation of free cash
flow to net cash provided by operations, the most
directly comparable GAAP financial measure, on a historical basis,
for each of the periods indicated (in thousands).
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2022
|
|
|
March 31,
2021
|
|
Net Cash Provided by
Operations
|
|
$
|
148,207
|
|
|
$
|
77,996
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
|
(36,643)
|
|
|
|
(13,800)
|
|
Proceeds from Sales of
Assets
|
|
|
6,478
|
|
|
|
8,488
|
|
Free Cash
Flow
|
|
$
|
118,042
|
|
|
$
|
72,684
|
|
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.