CANONSBURG,
Pa., May 8, 2019
/PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) today reported
financial and operating results for the period ended March 31,
2019.
First Quarter 2019 Highlights
Highlights of the CEIX first quarter 20191
results include:
- GAAP net income of $20.3
million and adjusted net income2 of $39.5 million;
- Total GAAP dilutive earnings per share of $0.52 and adjusted dilutive earnings per
share2 of $1.21;
- Net cash provided by operations of $82.2 million;
- Adjusted EBITDA2 of $118.5 million;
- Organic free cash flow net to CEIX
shareholders2 of $42.4
million;
- Reduced total debt by $100
million during the quarter;
- Total net leverage ratio2 reduced to 1.7x
on March 31, 2019 compared to 2.0x on
March 31, 2018;
- Increased share and debt repurchase program to
$175 million; 2.5% of outstanding
shares repurchased since the spin3;
- Amended credit facilities and paid down debt to lower
annual interest expense by $15
million, improve operational and financial flexibility,
extend maturities and boost liquidity; and
- Extended a major export contract through the end of
2020; pricing terms unchanged.
Management Comments
"After a very strong finish to 2018, I am pleased to
report that the CONSOL team continues to perform consistently well
despite the fluctuations we've seen in the commodity markets we
serve," said Jimmy Brock, President
and Chief Executive Officer of CONSOL Energy Inc. "While we
continued to deliver strong operating and marketing results during
the quarter, we also made tactical and strategic moves to enhance
the value of CEIX shares. On the tactical front, we took advantage
of our 2018 performance, well-contracted sales portfolio, and
improving credit markets to lower our interest expense, expand
liquidity, and enhance our flexibility through the refinancing of
our credit facilities and term loans. On the strategic front, this
morning, we green-lighted the Itmann low-vol metallurgical coal
project, which will further advance CONSOL's footprint of
high-quality products and low-cost assets. Finally, this morning,
we also announced that CONSOL's Board of Directors has increased
our authorization to repurchase CEIX debt and common shares, as
well as purchase CONSOL Coal Resources LP's common units, from
$100 million to $175 million and extended the program until
June 30, 2020, which allows us to
continue to opportunistically return capital to
shareholders.
On the safety front, the PAMC employees improved their
safety performance by 70% compared to the same period in 2018. The
central preparation plant and CONSOL Marine Terminal continued
their strong safety performance with an incident-free
quarter."
Pennsylvania Mining Complex (PAMC) Review and
Outlook
PAMC Sales and Marketing
Our marketing team sold 6.7 million tons of coal during
the first quarter of 2019 at an average revenue per ton of
$49.38, compared to 6.6 million tons
at an average revenue per ton of $52.98 in the year-ago period. The average
revenue per ton was impacted by a reduction in revenues on our
netback contracts due to lower PJM West power prices and volumes,
partially offset by improvements in our domestic non-netback and
export revenues. During the first quarter, average PJM West power
prices declined approximately 33% compared to the year-ago period,
but our average revenue per ton across the portfolio was only
impacted by approximately 7%. This highlights the importance of our
well-diversified contract portfolio, thoughtful contracting
strategy, and guidance process that already included weaker PJM
forward prices compared to the prior year. This also showcases the
strength of our marketing process in continuing to high-grade our
contract portfolio over time, enabling us to deliver a more stable
and consistent earnings profile even in volatile commodity price
environments.
On the domestic front, despite a decline in weather-driven
heating demand, our domestic customer base and contracted position
remained solid, as customers focused on rebuilding their very low
inventories. According to the Energy Information Administration,
coal inventories at domestic power plants stood at approximately 99
million tons at the end of February, representing a drawdown of
more than 18% from year-ago levels and the lowest levels since
2005. We believe that inventories at several of our key customers'
Northern Appalachian (NAPP) rail-served power plants have increased
slightly to around 30 days of burn compared to 20 days in the
second half of 2018, which remains near the lower end of what we
estimate is a typical target of 30-45 days. According to industry
estimates, Appalachian E&P capital budgets for 2019 are about
14% below 2018 levels, and rising demand should create near-term
downside protection in natural gas prices during the gas storage
refill season. As gas production growth abates and headwinds
continue to surround the construction of the Atlantic Coast and
Mountain Valley pipelines, we believe there could be a positive
surprise in gas prices that could play out into the power markets
as we head towards peak summer and winter demand
periods.
Internationally, thermal coal prices have come under
pressure since the beginning of 2019 due to pullback in global LNG
prices and other factors such as weak weather-related demand in
Japan and Korea and softening
demand in Europe due in part to an
influx of Russian coal. We are already beginning to see an export
supply response from several countries that should help to
stabilize API2 and Newcastle prices. We believe the recent market
behavior is consistent with normal cycle trends exacerbated by
transient items. We believe longer-term coal pricing will be driven
by continued growth of coal-fired generation capacity build out in
Asia, limited investments in coal
supply, and tightening supply-demand fundamentals for LNG in 2021.
According to our analysis of data from IHS Markit, approximately
111 GW of new coal-fired capacity is under construction globally
for commissioning between 2019-2024. Furthermore, an additional 300
GW of new coal-fired capacity is in the planning stages. We believe
this bodes well for seaborne thermal coal demand, particularly for
high-Btu NAPP coal.
Meanwhile, in the near term through 2020, our export
shipment volumes and price are supported by the export deal we
signed in early 2018. As mentioned in previous earnings releases,
our export contract has firm volume with firm pricing commitments
through June 2019 and firm volume
with collared pricing (average floor above $45.52 per ton) from July
2019 to June 2020.
Accordingly, this contract serves as a bridge that allows us to
weather the volatility of temporary pricing dislocations in
seaborne thermal coal markets.
Export Contract Extended Through 2020
Recently, we amended our previously disclosed export
contract, extending it from July 1,
2020 through December 31,
2020. This adds an additional 3.65 million tons to 2020,
taking our contracted position to 71% and protecting the PAMC from
the downward pressure that has been experienced in the API2 market
while allowing for participation in potential upside as well. The
collar levels are consistent with the original contract, and we
anticipate the tons to breakout as 68% thermal and 32% crossover
metallurgical coal. The extension also includes continued take or
pay revenues at our CONSOL Marine Terminal.
The PAMC is currently 95%+ contracted for 2019, 71%
contracted for 2020, and 31% contracted for 2021 assuming annual
production of 27 million tons. We are currently in active
negotiations with both domestic and international customers, and we
expect to achieve our targeted contracted position for 2020 before
the end of this year.
Operations Summary
The PAMC achieved a first quarter production of 6.8
million tons, which compares to 6.7 million tons in the first
quarter of 2018. During the quarter, coal production increased
slightly due to increased production at the Enlow Fork mine, as
geological conditions improved compared to the same period in 2018,
and at the Harvey mine. This was partially offset by reduced
production at the Bailey mine, resulting from a longwall move and
other operational delays.
The Company's total costs during the first quarter were
$351.2 million compared to
$333.1 million in the year-ago
quarter. Average cash cost of coal sold per ton2 was
$29.71 compared to $29.21 in the year-ago quarter. The impairment
was largely driven by an increase in project expenses and gas well
plugging activities, partially offset by reduced lease/rental
expense. Since the fourth quarter of 2017, we have seen modest
inflation in the cost of supplies that contain steel and other
commodities for which prices are strengthening, as well as in the
cost of contract labor. We have been successful in managing these
cost pressures and keeping our overall cost increase under our
targeted 5% annual limit through productivity gains and automation,
as we have discussed in previous earnings calls.
|
|
Three Months Ended
|
|
|
March 31, 2019
|
|
March 31, 2018
|
|
|
|
|
|
Coal
Production
|
million
tons
|
6.8
|
|
6.7
|
Coal Sales
|
million
tons
|
6.7
|
|
6.6
|
Average Revenue per
Ton
|
per ton
|
$49.38
|
|
$52.98
|
Average Cash Costs of
Coal Sold2
|
per ton
|
$29.71
|
|
$29.21
|
Average Cash Margin
per Ton Sold2
|
per ton
|
$19.67
|
|
$23.77
|
|
|
|
|
|
|
|
CONSOL Marine Terminal Review
For the first quarter of 2019, throughput volumes out of
the CONSOL Marine Terminal (CMT) were 4.0 million tons, compared to
3.5 million tons in the year-ago period. Terminal revenues
increased versus the year-ago quarter as a result of the
take-or-pay contract we entered into in mid-2018. Of note, during
the first quarter of 2019, CMT was the highest shipment coal
terminal off the U.S. east coast. For the first quarter, terminal
revenues and operating costs were $17.8
million and $5.6 million,
respectively, compared to $15.2
million and $5.1 million,
respectively, in the year-ago period. CMT Adjusted EBITDA came in
at $12.0 million compared to the
year-ago period of $10.8
million.
Expansion of Share and Debt Repurchase
Program
CONSOL's Board of Directors ("Board") has increased its
previously authorized repurchase program to an aggregate amount of
up to $175 million from $100 million and extended
the program through June 30, 2020
("repurchase period"). Under the new authorization, CONSOL
management may purchase, from time to time, outstanding shares of
CONSOL's common stock, its 11.00% Senior Secured Second Lien Notes
due 2025, amounts outstanding under its Term Loan B and Term Loan A
Facilities, and common units of CONSOL Coal Resources LP ("CCR
units"). These securities may be purchased in the open market,
through negotiated purchases or otherwise. The repurchase plan will
be subject to limitations under CONSOL's debt covenant package,
under the tax matters agreement entered into in connection with
CONSOL's separation from CNX Resources Corporation into an
independently traded coal company, Delaware law and any other applicable laws.
Any repurchases will be at CONSOL's discretion, subject to general
market conditions and other considerations, and CONSOL has no
obligation to make any repurchases under the program. This new
authorization provides CONSOL with a current availability
of $110 million and falls within the limits of the
covenants in our debt agreements. Our credit agreement allows
CONSOL to purchase up to $50 million of CCR
units.
2019 Guidance and Outlook
Based on our year-to-date results, current contracted
position, approval of the Itmann project (increased capex),
estimated prices and production plans, please find below our
financial and operating performance guidance for 2019:
- Coal sales volumes (100% PAMC) - 26.8-27.8 million
tons
- Coal average revenue per ton sold - $47.70-$49.70
- Cash cost of coal sold per ton4 - $30.40-$31.40
- CONSOL Marine Terminal Adjusted EBITDA4 -
$40-$45
million
- Adjusted EBITDA4 (incl. 100% PAMC) -
$380-$440
million
- Effective tax rate - 8-12%
- Capital expenditures (incl. 100% PAMC) - $155-$185
million
First Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Coal
Resources LP, during which management will discuss the first
quarter 2019 financial and operational results, is scheduled
for May 8, 2019 at 11:00 AM ET. 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 this 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, www.consolenergy.com. 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, 2019. Investors
seeking our detailed financial statements can refer to the Form
10-Q once it has been filed with the SEC.
Footnotes:
1The results reflect predecessor
performance prior to November 29,
2017, and CONSOL Energy Inc. performance after that
date.
2""Adjusted Net
Income", Adjusted Dilutive Earnings per Share", "Adjusted EBITDA",
"Organic free cash flow net to CEIX shareholders", and "Net
Leverage Ratio" are non-GAAP financial measures and "Cash cost of
coal sold per ton", "Average cash margin per ton sold", and "Cost
of coal sold per ton" 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."
32.5% is the
ratio of 708,245 CEIX common shares repurchased divided by
28,967,509 CEIX common shares outstanding at the time of the
November 28, 2017
spin.
4CEIX is unable to
provide a reconciliation of Adjusted EBITDA guidance or CONSOL
Marine Terminal EBITDA to net income, the most comparable financial
measure calculated in accordance with GAAP, nor a reconciliation of
cash cost of coal sold per ton, 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-based producer and exporter of
high-Btu bituminous thermal and crossover metallurgical coal. It
owns and operates some of the most productive longwall mining
operations in the Northern Appalachian Basin. Our 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 ~698 million reserve tons associated with the Pennsylvania
Mining Complex, the company also controls approximately 1.6 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 Statement of Cash Flows
The following table presents a condensed consolidated statement
of cash flows for the three months ended March 31, 2019 and
2018 (in thousands):
|
Three Months
Ended
March 31,
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
|
20,303
|
|
|
$
|
70,958
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation,
Depletion and Amortization
|
50,724
|
|
|
49,471
|
|
Other Non-Cash
Adjustments to Net Income
|
29,751
|
|
|
12,925
|
|
Changes in Working
Capital
|
(18,607)
|
|
|
(17,621)
|
|
Net Cash Provided by
Operating Activities
|
82,171
|
|
|
115,733
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(34,171)
|
|
|
(21,956)
|
|
Proceeds from Sales
of Assets
|
311
|
|
|
393
|
|
Net Cash Used in
Investing Activities
|
(33,860)
|
|
|
(21,563)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Net Payments on
Long-Term Debt
|
(107,662)
|
|
|
(27,366)
|
|
Distributions to
Noncontrolling Interest
|
(5,559)
|
|
|
(5,587)
|
|
Other Financing
Activities
|
(23,257)
|
|
|
(23,477)
|
|
Net Cash Used in
Financing Activities
|
(136,478)
|
|
|
(56,430)
|
|
Net (Decrease)
Increase in Cash and Cash Equivalents and Restricted
Cash
|
$
|
(88,167)
|
|
|
$
|
37,740
|
|
Cash and Cash
Equivalents and Restricted Cash at Beginning of Period
|
264,935
|
|
|
153,979
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
$
|
176,768
|
|
|
$
|
191,719
|
|
Reconciliation of Non-GAAP Financial Measures
We evaluate our cost of coal sold and cash cost of coal sold on
a cost per ton basis. Our cost of coal sold per ton represents our
costs of coal sold divided by the tons of coal we sell. 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 per ton
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 GAAP measure most directly comparable to cost of coal
sold is total costs and expenses. The cash cost of coal sold
includes cost of coal sold less depreciation, depletion and
amortization cost on production assets. The GAAP measure most
directly comparable to 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,
|
|
|
2019
|
|
2018
|
Total Costs and
Expenses
|
|
$
|
351,160
|
|
|
$
|
333,115
|
|
Freight
Expense
|
|
(6,662)
|
|
|
(17,887)
|
|
Selling, General and
Administrative Costs
|
|
(21,923)
|
|
|
(13,484)
|
|
Loss on Debt
Extinguishment
|
|
(23,143)
|
|
|
(1,426)
|
|
Interest Expense,
net
|
|
(18,596)
|
|
|
(21,045)
|
|
Other Costs
(Non-Production)
|
|
(30,793)
|
|
|
(36,758)
|
|
Depreciation,
Depletion and Amortization (Non-Production)
|
|
(8,165)
|
|
|
(8,375)
|
|
Cost of Coal
Sold
|
|
$
|
241,878
|
|
|
$
|
234,140
|
|
Depreciation,
Depletion and Amortization (Production)
|
|
(42,559)
|
|
|
(41,096)
|
|
Cash Cost of Coal
Sold
|
|
$
|
199,319
|
|
|
$
|
193,044
|
|
We define average cash margin per ton 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 is
total coal revenue.
The following table presents a reconciliation of average cash
margin per ton to 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,
|
|
|
2019
|
|
2018
|
Total Coal
Revenue
|
|
$
|
332,502
|
|
|
$
|
351,009
|
|
Operating and Other Costs
|
|
230,112
|
|
|
229,802
|
|
Less: Other Costs (Non-Production)
|
|
(30,793)
|
|
|
(36,758)
|
|
Total Cash Cost of
Coal Sold
|
|
199,319
|
|
|
193,044
|
|
Add: Depreciation, Depletion and Amortization
|
|
50,724
|
|
|
49,471
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
(8,165)
|
|
|
(8,375)
|
|
Total Cost of Coal
Sold
|
|
$
|
241,878
|
|
|
$
|
234,140
|
|
Total Tons Sold (in
millions)
|
|
6.7
|
|
|
6.6
|
|
Average Revenue per
Ton Sold
|
|
$
|
49.38
|
|
|
$
|
52.98
|
|
Average Cash Cost per
Ton Sold
|
|
29.71
|
|
|
29.21
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
6.21
|
|
|
6.13
|
|
Average Cost per Ton
Sold
|
|
35.92
|
|
|
35.34
|
|
Average Margin per
Ton Sold
|
|
13.46
|
|
|
17.64
|
|
Add:
Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
6.21
|
|
|
6.13
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
19.67
|
|
|
$
|
23.77
|
|
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, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
64,698
|
|
|
$
|
9,236
|
|
|
$
|
(53,631)
|
|
|
$
|
20,303
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
—
|
|
|
—
|
|
|
(850)
|
|
|
(850)
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
17,083
|
|
|
18,596
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(887)
|
|
|
(887)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
64,698
|
|
|
10,749
|
|
|
(38,285)
|
|
|
37,162
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
44,868
|
|
|
920
|
|
|
4,936
|
|
|
50,724
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
109,566
|
|
|
$
|
11,669
|
|
|
$
|
(33,349)
|
|
|
$
|
87,886
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
6,744
|
|
|
$
|
353
|
|
|
$
|
353
|
|
|
$
|
7,450
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
23,143
|
|
|
23,143
|
|
Total Pre-tax
Adjustments
|
|
6,744
|
|
|
353
|
|
|
23,496
|
|
|
30,593
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
116,310
|
|
|
$
|
12,022
|
|
|
$
|
(9,853)
|
|
|
$
|
118,479
|
|
|
|
Three Months Ended
March 31, 2018
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
98,480
|
|
|
$
|
8,241
|
|
|
$
|
(35,763)
|
|
|
$
|
70,958
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
6,185
|
|
|
6,185
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
19,532
|
|
|
21,045
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(601)
|
|
|
(601)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
98,480
|
|
|
9,754
|
|
|
(10,647)
|
|
|
97,587
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
43,257
|
|
|
946
|
|
|
5,268
|
|
|
49,471
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
141,737
|
|
|
$
|
10,700
|
|
|
$
|
(5,379)
|
|
|
$
|
147,058
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
1,701
|
|
|
$
|
74
|
|
|
$
|
72
|
|
|
$
|
1,847
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
1,426
|
|
|
1,426
|
|
Total Pre-tax
Adjustments
|
|
1,701
|
|
|
74
|
|
|
1,498
|
|
|
3,273
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
143,438
|
|
|
$
|
10,774
|
|
|
$
|
(3,881)
|
|
|
$
|
150,331
|
|
We define adjusted net income as net income adjusted for certain
unusual and/or infrequent transactions, such as loss on debt
extinguishment resulting from the refinancing of the Company's
credit facilities. We define adjusted dilutive earnings per share
(EPS) as adjusted net income attributable to CONSOL Energy Inc.
shareholders divided by the weighted average shares outstanding
during the reporting period. The GAAP measure most directly
comparable to adjusted net income and adjusted dilutive EPS is net
income (loss) and dilutive earnings per share, respectively.
The following table presents a reconciliation of adjusted net
income and adjusted dilutive EPS to net income and dilutive
earnings per share, the most directly comparable GAAP financial
measures, on a historical basis for each of the periods
indicated.
|
|
Three Months
Ended
March 31,
|
|
|
2019
|
|
2018
|
Dollars in
thousands, except per share data
|
|
|
|
|
Net Income
|
|
$
|
20,303
|
|
|
$
|
70,958
|
|
Plus: Loss on Debt Extinguishment related to
Refinancing
|
|
18,702
|
|
|
—
|
|
Plus: Tax Benefit of Adjustments to Net Income
|
|
473
|
|
|
—
|
|
Adjusted Net
Income
|
|
39,478
|
|
|
70,958
|
|
Less: Net Income Attributable to Noncontrolling
Interest
|
|
5,868
|
|
|
8,550
|
|
Adjusted Net Income
Attributable to CONSOL Energy Inc. Shareholders
|
|
$
|
33,610
|
|
|
$
|
62,408
|
|
|
|
|
|
|
Weighted-Average
Diluted Shares of Common Stock Outstanding
|
|
27,839,393
|
|
|
28,324,870
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
Dilutive Earnings per
Share
|
|
$
|
0.52
|
|
|
$
|
2.20
|
|
Plus: Adjustments to Net Income Attributable to CONSOL Energy
Inc. Shareholders
|
|
0.69
|
|
|
—
|
|
Adjusted Dilutive
Earnings per Share
|
|
$
|
1.21
|
|
|
$
|
2.20
|
|
We define 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,
2019
|
|
March 31,
2018
|
Net
Income
|
|
$
|
128,130
|
|
|
$
|
107,082
|
|
Plus:
|
|
|
|
|
Interest Expense, net
|
|
81,399
|
|
|
43,121
|
|
Depreciation, Depletion and Amortization
|
|
202,517
|
|
|
168,480
|
|
Income Taxes
|
|
1,793
|
|
|
84,007
|
|
Stock/Unit-Based Compensation
|
|
15,838
|
|
|
20,172
|
|
Loss
on Debt Extinguishment
|
|
25,639
|
|
|
1,426
|
|
CCR
Adjusted EBITDA per Credit Agreement
|
|
(116,198)
|
|
|
(108,649)
|
|
Cash
Distributions from CONSOL Coal Resources LP
|
|
35,210
|
|
|
34,686
|
|
Cash
Payments for Legacy Employee Liabilities, Net
of Non-Cash Expense
|
|
(15,715)
|
|
|
(1,724)
|
|
Other Adjustments to Net Income
|
|
3,933
|
|
|
(1,233)
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
362,546
|
|
|
$
|
347,368
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
404,280
|
|
|
$
|
504,092
|
|
Senior Secured Second Lien Notes
|
|
267,276
|
|
|
290,000
|
|
MEDCO Revenue Bonds
|
|
102,865
|
|
|
102,865
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
776,682
|
|
|
899,042
|
|
Less:
|
|
|
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Cash
on Hand
|
|
154,762
|
|
|
190,971
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
619,659
|
|
|
$
|
705,986
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
1.7
|
|
|
2.0
|
|
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.
Organic Free
Cash Flow
|
Three Months
Ended
March 31, 2019
|
|
Three Months
Ended
March 31, 2018
|
Net Cash Provided
by Operations
|
$
|
82,171
|
|
|
$
|
115,733
|
|
Capital
Expenditures
|
(34,171)
|
|
|
(21,956)
|
|
Organic Free Cash
Flow
|
$
|
48,000
|
|
|
$
|
93,777
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
(5,559)
|
|
|
(5,587)
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
$
|
42,441
|
|
|
$
|
88,190
|
|
|
Free Cash
Flow
|
Three Months
Ended
March 31, 2019
|
|
Three Months
Ended
March 31, 2018
|
Net Cash Provided
by Operations
|
$
|
82,171
|
|
|
$
|
115,733
|
|
|
|
|
|
Capital
Expenditures
|
(34,171)
|
|
|
(21,956)
|
|
Proceeds from Sales
of Assets
|
311
|
|
|
393
|
|
Free Cash
Flow
|
$
|
48,311
|
|
|
$
|
94,170
|
|
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 projected results. 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/consol-energy-announces-results-for-the-first-quarter-2019-300845903.html
SOURCE CONSOL Energy Inc.