CONSOL Energy Announces Results for the First Quarter 2020

CANONSBURG, Pa., May 11, 2020 /PRNewswire/ -- Today, CONSOL Energy Inc. (NYSE: CEIX) reported financial and operating results for the period ended March 31, 2020.

First Quarter 2020 Highlights Include:

    --  GAAP net income and cash provided by operating activities of $2.5
        million and $51.4 million, respectively;
    --  Total dilutive earnings per share of $0.09;
    --  Adjusted EBITDA(1) of $62.9 million;
    --  Organic free cash flow net to CEIX shareholders(1) of $18.6 million;
    --  Repurchased $43.2 million of 2(nd) 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 ton(1) compared to the year-ago period. Average cash cost of coal sold per ton(1) 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 ton(1), 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 Sold(1)  
     per ton                  $32.41          $29.71


     Average Cash
      Margin per Ton
      Sold(1)          
     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 EBITDA(1) 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                                    Other Division

                                                      Division



                                 Dollars in thousands PA Mining                Baltimore                                 Other                     Total

                                                       Complex                 Terminal                                                     Company

                                                                                 (CMT)



                  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                                                  Other Division

                                                      Division



                                 Dollars in thousands PA Mining                     Baltimore                                 Other                               Total

                                                       Complex                      Terminal                                                              Company

                                                                                      (CMT)



                  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                                    (19,750)              (15,715)

                  of Non-Cash Expense


               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                            Three Months Ended

                                       March 31, 2020                       March 31, 2019

    ---

                     Net Cash Provided
                      by Operations                               $
     51,400                                   $
     82,171




        Capital
         Expenditures                                (27,178)                 (34,171)


        Proceeds from
         Sales of Assets                                                           311



                     Free Cash Flow                           $
     
       24,222                               $
     
       48,311

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of the federal securities laws. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties that could cause actual results to differ materially from results projected in or implied by such forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "anticipate," "believe," "could," "continue," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Specific risks, contingencies and uncertainties are discussed in more detail in our filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this press release and CEIX disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.


                             
              
           CONSOL ENERGY INC. AND SUBSIDIARIES


                              
              
           CONSOLIDATED STATEMENTS OF INCOME


                        
              
           (Dollars in thousands, except per share data)


                                         
         
                (unaudited)




                                                                   Three Months Ended
                                                            March 31,


                   Revenue and Other
                    Income:                    2020                                     2019

                                                                                        ---


     Coal Revenue                                    $
              255,452                      $
        332,502


      Terminal Revenue                       16,501                                     17,818


      Freight Revenue                         3,147                                      6,662


      Miscellaneous Other
       Income                                16,170                                     13,292


      (Loss) Gain on Sale of
       Assets                                  (14)                                       339



                   Total Revenue and Other
                    Income                  291,256                                    370,613


                   Costs and Expenses:


      Operating and Other
       Costs                                212,275                                    230,112


      Depreciation, Depletion
       and Amortization                      54,943                                     50,724


      Freight Expense                         3,147                                      6,662


      Selling, General and
       Administrative Costs                  17,670                                     21,923


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


      Interest Expense, net                  15,671                                     18,596



                   Total Costs and
                    Expenses                286,873                                    351,160



                   Earnings Before Income
                    Tax                       4,383                                     19,453


      Income Tax Expense
       (Benefit)                              1,908                                      (850)



                   Net Income                 2,475                                     20,303


      Less: Net Income
       Attributable to
       Noncontrolling
       Interest                                 108                                      5,868


                   Net Income Attributable
                    to CONSOL Energy Inc.
                    Shareholders                        $
              2,367                       $
        14,435





                   Earnings per Share:


      Total Basic Earnings
       per Share                                         $
              0.09                         $
        0.52


      Total Dilutive Earnings
       per Share                                         $
              0.09                         $
        0.52


                                                        
         
              CONSOL ENERGY INC.


                                                     
          
           CONSOLIDATED BALANCE SHEETS


                                                 
            
         (Dollars 
                in thousands)




                                                                          (Unaudited)


                                                                           March 31,                                    December 31,
                                                                                 2020                            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,                                 December 31,
                                                                                  2020                         2019

                                                                                                               ---


     
                LIABILITIES AND EQUITY



     Current Liabilities:



     Accounts Payable                                                                      $
          89,556                          $
       106,223


      Current Portion of Long-Term Debt                                         67,441                         50,272



     Other Accrued Liabilities                                                237,261                        235,769



                   Total Current Liabilities                                   394,258                        392,264



     Long-Term Debt:



     Long-Term Debt                                                           604,927                        653,802



     Finance Lease Obligations                                                 21,942                          9,036



                   Total Long-Term Debt                                        626,869                        662,838



     Deferred Credits and Other Liabilities:


      Postretirement Benefits Other Than
       Pensions                                                                429,085                        432,496



     Pneumoconiosis Benefits                                                  201,718                        202,142



     Asset Retirement Obligations                                             254,805                        250,211



     Workers' Compensation                                                     60,961                         61,194



     Salary Retirement                                                         44,439                         49,930



     Operating Lease Liability                                                 52,975                         55,413



     Other                                                                     17,268                         14,919



                   Total Deferred Credits and Other
                    Liabilities                                              1,061,251                      1,066,305



                   TOTAL LIABILITIES                                         2,082,378                      2,121,407





     Stockholders' Equity:


      Common Stock, $0.01 Par Value;
       62,500,000 Shares Authorized,
       26,029,202 Issued and Outstanding at
       March 31, 2020; 25,932,618 Issued and
       Outstanding at December 31, 2019                                            260                            259


      Capital in Excess of Par Value                                           528,062                        523,762



     Retained Earnings                                                        258,972                        259,903


      Accumulated Other Comprehensive Loss                                   (347,889)                     (348,725)



                   Total CONSOL Energy Inc. Stockholders'
                    Equity                                                     439,405                        435,199



     Noncontrolling Interest                                                  131,685                        137,196




     
                TOTAL EQUITY                                                571,090                        572,395



                   TOTAL LIABILITIES AND EQUITY                                          $
          2,653,468                        $
       2,693,802

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SOURCE CONSOL Energy Inc.