CANONSBURG, Pa., Aug. 6, 2019 /PRNewswire/ -- CONSOL Energy Inc.
(NYSE: CEIX) today reported financial and operating results for the
period ended June 30, 2019.
Second Quarter 20191 Highlights and Other Updates
Include:
- GAAP net income of $48.8
million;
- Total GAAP dilutive earnings per share of $1.56;
- Net cash provided by operations for 2Q19 and year-to-date of
$83.6 million and $165.8 million, respectively;
- Adjusted EBITDA2 of $112.9
million;
- Organic free cash flow net to CEIX shareholders2
for 2Q19 and year-to-date of $29.3
million and $71.7 million,
respectively;
- Reduced total debt by $21.4
million;
- Repurchased approximately 1.2% of outstanding CEIX common
shares for $9.6 million;
- Increased repurchase authorization to $200 million from $175
million;
- Cash and cash equivalents of $155.7
million or 21.2% of market capitalization as of June 30, 2019;
- Total net leverage ratio2 of 1.7x on June 30, 2019 per bank method; and
- Increased 2020 contracted coal sales volume to 80%.
Management Comments
"While commodity markets have been under pressure since the
beginning of 2019, I am pleased to announce that the CONSOL team
continues to deliver strong operating and financial performance,"
said Jimmy Brock, President and
Chief Executive Officer of CONSOL Energy Inc. "Our results for the
first half of 2019 demonstrate the effectiveness of our strategy,
which is based on a stable customer base, consistent operations and
financial sustainability. For the second quarter, on the marketing
front, even while PJM West power prices and prompt export thermal
coal prices declined by more than 25% compared to the year-ago
period, we were less affected due to our contracted portfolio
position and stable customer base. On the operational front, we had
another robust production quarter providing consistent shipments to
our customers. On the financial front, the decline in market value
of our equity and debt securities provided an attractive
opportunity for us to deploy more than 100% of our organic free
cash flow net to CEIX shareholders generated during the quarter
towards de-leveraging and improving shareholder value. We will
continue to take advantage of such dislocations in the marketplace
to deploy our strong cash position.
On the safety front, our Pennsylvania Mining Complex (PAMC)
employees improved their safety performance, as measured by number
of incidents, by 30% 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 Review and Outlook
PAMC Sales and Marketing
Our marketing team shipped 7.4 million tons of coal during the
second quarter of 2019 at an average revenue per ton of
$47.53, compared to 7.8 million tons
at an average revenue per ton of $47.34 in the year-ago period. Despite the
ongoing headwinds across the coal space due to softening export
fundamentals, low natural gas prices, and a decline in
weather-driven demand, demand for our coal remained robust. Average
revenue per ton benefited from an increase in prices we receive for
our export coal. This was partially offset by a decline in average
revenue per ton on our power price-linked netback contracts as
around-the-clock PJM West power prices averaged approximately 27%
lower compared to the year-ago period. This stability in our
average revenue per ton compared to the year-ago period despite
declining PJM West power prices, lower spot prices for export coal,
and lower domestic natural gas prices is a testament to our
differentiated contracting strategy, strong customer base and
world-class assets.
During the quarter, we were successful in securing additional
contracts for 2020 and 2021 coal sales bringing our contracted
positions to 80% and 34%, respectively, assuming a 27 million ton
annual run rate. During the second quarter, one of our longwalls
also transitioned to a lower sulfur region of the mine plan at
PAMC. We believe this will provide us with additional quality
improvements that should help to increase the domestic and export
marketability of the PAMC product, including access to newer
markets.
According to the U.S. Energy Information Administration,
inventories at domestic utilities stood at approximately 115
million tons at the end of May, down by more than 10% from year-ago
levels. While low natural gas and power prices weighed on broader
coal demand, we continued to ship all the coal we produced during
the second quarter, highlighting the quality and resilience of our
customer base. Looking forward, as mines and railroads return from
their annual maintenance shutdown period, we expect demand for our
domestic contracted tonnage to remain steady. With summer weather
now upon most of the nation and the National Oceanic and
Atmospheric Administration predicting warmer-than-normal conditions
through the fall across the coasts, we expect that cooling demand
will help support electricity demand, which will continue to keep
coal stockpiles at relatively low levels.
On the export front, API2 spot prices for export thermal coal
declined by approximately 44% during the first six months of 2019.
Our revenues were largely unaffected due to our previously
disclosed export contract, which runs through December 2020 and has fixed volumes with collared
prices, that nets us a floor price per ton above $45.52. While spot export prices remain
depressed, we continue to see strong demand from Asia. As mentioned in our previous release,
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 sea-borne
thermal coal demand, particularly for high-Btu NAPP coal, and we
will remain opportunistic in our contracting strategy to maintain a
stable earnings profile at the PAMC for our shareholders.
Operations Summary
The PAMC achieved a second quarter production of 7.2 million
tons, which compares to 7.7 million tons in the second quarter of
2018. The decline in coal production was due to the impact of an
additional longwall move in 2Q19 and slower start-up of the
longwall after the move. At our Harvey mine, we set a new quarterly
production record of 1.54 million tons.
The Company's total costs during the second quarter were
$337.3 million compared to
$359.5 million in the year-ago
quarter. Average cash cost of coal sold per ton2 was
$31.07 compared to $26.99 in the year-ago quarter. The cost per ton
impairment was largely driven by lower fixed cost leverage, higher
mine maintenance costs and higher project expenses. Since the
fourth quarter of 2017, we have seen inflation in the cost of
supplies that contain steel and other commodities. However, with
the decline in steel prices, we expect to see some relief as some
of our supply contracts reset. We have been successful in managing
these cost pressures and keeping our overall cost increases within
our annual guidance range.
|
|
Three Months
Ended
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
|
|
|
|
Coal
Production
|
million
tons
|
7.2
|
|
7.7
|
Coal Sales
|
million
tons
|
7.4
|
|
7.8
|
Average Revenue per
Ton
|
per ton
|
$47.53
|
|
$47.34
|
Average Cash Costs of
Coal Sold2
|
per ton
|
$31.07
|
|
$26.99
|
Average Cash Margin
per Ton Sold2
|
per ton
|
$16.46
|
|
$20.35
|
|
|
|
|
|
|
|
CONSOL Marine Terminal (CMT) Review
For the second quarter of 2019, throughput volumes at CMT were
3.7 million tons, compared to 3.5 million tons in the year-ago
period. Terminal revenues were largely in line compared to the
year-ago quarter. For the second quarter, terminal revenues and
operating costs were $16.7 million
and $5.0 million, respectively,
compared to $16.7 million and
$6.0 million, respectively, in the
year-ago period. CMT Adjusted EBITDA2 came in at
$11.3 million compared to the
year-ago period of $10.5 million.
Itmann Project
Following the announcement of our Itmann project last quarter,
we have hired an experienced General Manager with a strong safety
record to complete the implementation of the project and eventually
lead the operations team as the project enters the production
phase. He brings 28 years of coal mining experience in the Central
Appalachian region, most recently managing three room and pillar
coal mines and a coal preparation facility.
We are also on track in procuring mine equipment, and we are
trending below our capital budget for the first section of the mine
through the identification and purchase of rebuilt equipment.
Finally, all permits needed for development of the mine were
received in June and July, allowing mine site preparation and
construction to begin during Q3. Engineering and environmental work
is also underway to permit a new preparation plant and refuse
facility at the former Itmann plant site, and a schedule has been
developed for submitting the required permit applications
throughout 2019.
De-leveraging, Interest Rate Hedges, and Capital
Returns
During the second quarter of 2019, CEIX generated free cash flow
of $35.8 million2. Coupled
with $2.4 million of balance sheet
cash reduction, CEIX deployed $37.8
million of cash toward de-leveraging (59.7%) and capital
returns to its shareholders (25.6%) after accounting for
distributions to the non-controlling unitholders of CONSOL Coal
Resources LP (14.7%). During the quarter, we saw the best
risk-weighted value in our 2nd Lien notes and CEIX common shares
and accordingly deployed most of our discretionary capital on those
securities. CONSOL's Board of Directors continue to see share
repurchases as a very effective tool to improve shareholder value
and has increased its previously authorized repurchase program to
an aggregate amount of up to $200
million from $175 million.
We also layered on interest rate hedges against $100 million of our Term Loan B principal for
2020 and 2021 to effectively reduce interest rates by an average 80
bps, compared to the then-prevailing rates, which corresponds to a
total interest expense reduction of approximately $1.6 million.
Specifically during the quarter, CEIX spent $13.5 million (including premium), $3.8 million and $0.7
million toward reduction of our Second Lien, Term Loan A and
Term Loan B debts, respectively. CEIX also made principal payments
of $4.6 million towards outstanding
capital leases. On the equity front, CEIX repurchased 351,443 of
its common shares for $9.6 million at
a weighted average price of $27.18
per share and 6,884 common units of CCR for $0.1 million at a weighted average price of
$17.35 per unit.
2019 Guidance and Outlook
Based on our year-to-date results, current contracted position,
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-$48
- Average cash cost of coal sold per ton2,3 -
$30.40-$31.40
- CMT Adjusted EBITDA3 - $42-$45
million
- Adjusted EBITDA3 (incl. 100% PAMC) - $390-$420
million
- Effective tax rate - less than 5%
- Capital expenditures (incl. 100% PAMC) - $155-$185
million
Second Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Coal Resources
LP, during which management will discuss the second quarter 2019
financial and operational results, is scheduled for August 6,
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. In addition, we may provide other information
about the company from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange
Commission (SEC) reporting our results for the quarter ended
June 30, 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", "Free Cash Flow", "Organic Free Cash
Flow Net to CEIX Shareholders", and "Net Leverage Ratio" are
non-GAAP financial measures and "Average 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."
3CEIX is unable to provide a reconciliation of
Adjusted EBITDA guidance, or CMT Adjusted EBITDA guidance to net
income, the most comparable financial measure calculated in
accordance with GAAP, nor a reconciliation of Average Cash Cost of
Coal Sold Per Ton guidance, an operating ratio derived from
non-GAAP financial measures, due to the unknown effect, timing and
potential significance of certain income statement items.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg, Pennsylvania-based producer and
exporter of high-Btu bituminous thermal 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 Statements of Cash Flows
The following table presents the condensed consolidated
statements of cash flows for the three months ended June 30,
2019 and 2018 (in thousands):
|
Three Months
Ended
June 30,
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
|
48,830
|
|
|
$
|
52,709
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation,
Depletion and Amortization
|
46,151
|
|
|
54,961
|
|
Other Non-Cash
Adjustments to Net Income
|
(9,965)
|
|
|
(9,916)
|
|
Changes in Working
Capital
|
(1,386)
|
|
|
64,706
|
|
Net Cash Provided by
Operating Activities
|
83,630
|
|
|
162,460
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(48,783)
|
|
|
(34,243)
|
|
Proceeds from Sales
of Assets
|
989
|
|
|
836
|
|
Net Cash Used in
Investing Activities
|
(47,794)
|
|
|
(33,407)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Net Payments on
Long-Term Debt, Including Fees
|
(22,572)
|
|
|
(28,602)
|
|
Repurchases of Common
Stock
|
(9,550)
|
|
|
(1,996)
|
|
Distributions to
Noncontrolling Interest
|
(5,560)
|
|
|
(5,587)
|
|
Other Financing
Activities
|
(554)
|
|
|
(83)
|
|
Net Cash Used in
Financing Activities
|
(38,236)
|
|
|
(36,268)
|
|
Net (Decrease)
Increase in Cash and Cash Equivalents and Restricted
Cash
|
$
|
(2,400)
|
|
|
$
|
92,785
|
|
Cash and Cash
Equivalents and Restricted Cash at Beginning of Period
|
176,768
|
|
|
191,718
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
$
|
174,368
|
|
|
$
|
284,503
|
|
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
June 30,
|
|
|
2019
|
|
2018
|
Total Costs and
Expenses
|
|
$
|
337,287
|
|
|
$
|
359,532
|
|
Freight
Expense
|
|
(3,854)
|
|
|
(17,444)
|
|
Selling, General and
Administrative Costs
|
|
(16,288)
|
|
|
(15,705)
|
|
Loss on Debt
Extinguishment
|
|
(1,500)
|
|
|
(1,723)
|
|
Interest Expense,
net
|
|
(16,046)
|
|
|
(21,504)
|
|
Other Costs
(Non-Production)
|
|
(23,277)
|
|
|
(35,955)
|
|
Depreciation,
Depletion and Amortization (Non-Production)
|
|
(2,841)
|
|
|
(9,548)
|
|
Cost of Coal
Sold
|
|
$
|
273,481
|
|
|
$
|
257,653
|
|
Depreciation,
Depletion and Amortization (Production)
|
|
(43,310)
|
|
|
(45,413)
|
|
Cash Cost of Coal
Sold
|
|
$
|
230,171
|
|
|
$
|
212,240
|
|
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
June 30,
|
|
|
2019
|
|
2018
|
Total Coal
Revenue
|
|
$
|
350,620
|
|
|
$
|
370,697
|
|
Operating and Other Costs
|
|
253,448
|
|
|
248,195
|
|
Less: Other Costs (Non-Production)
|
|
(23,277)
|
|
|
(35,955)
|
|
Total Cash Cost of
Coal Sold
|
|
230,171
|
|
|
212,240
|
|
Add: Depreciation, Depletion and Amortization
|
|
46,151
|
|
|
54,961
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
(2,841)
|
|
|
(9,548)
|
|
Total Cost of Coal
Sold
|
|
$
|
273,481
|
|
|
$
|
257,653
|
|
Total Tons Sold (in
millions)
|
|
7.4
|
|
|
7.8
|
|
Average Revenue per
Ton Sold
|
|
$
|
47.53
|
|
|
$
|
47.34
|
|
Average Cash Cost per
Ton Sold
|
|
31.07
|
|
|
26.99
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
6.00
|
|
|
5.91
|
|
Average Cost per Ton
Sold
|
|
37.07
|
|
|
32.90
|
|
Average Margin per
Ton Sold
|
|
10.46
|
|
|
14.44
|
|
Add:
Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
6.00
|
|
|
5.91
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
16.46
|
|
|
$
|
20.35
|
|
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
June 30, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
60,786
|
|
|
$
|
8,202
|
|
|
$
|
(20,158)
|
|
|
$
|
48,830
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
—
|
|
|
—
|
|
|
(1,808)
|
|
|
(1,808)
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
14,533
|
|
|
16,046
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(757)
|
|
|
(757)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
60,786
|
|
|
9,715
|
|
|
(8,190)
|
|
|
62,311
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
45,427
|
|
|
1,449
|
|
|
(725)
|
|
|
46,151
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
106,213
|
|
|
$
|
11,164
|
|
|
$
|
(8,915)
|
|
|
$
|
108,462
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
2,667
|
|
|
$
|
129
|
|
|
$
|
129
|
|
|
$
|
2,925
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,500
|
|
Total Pre-tax
Adjustments
|
|
2,667
|
|
|
129
|
|
|
1,629
|
|
|
4,425
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
108,880
|
|
|
$
|
11,293
|
|
|
$
|
(7,286)
|
|
|
$
|
112,887
|
|
|
|
Three Months Ended
June 30, 2018
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
85,173
|
|
|
$
|
7,872
|
|
|
$
|
(40,336)
|
|
|
$
|
52,709
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
3,032
|
|
|
3,032
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
19,991
|
|
|
21,504
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(467)
|
|
|
(467)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
85,173
|
|
|
9,385
|
|
|
(17,780)
|
|
|
76,778
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
47,582
|
|
|
966
|
|
|
6,413
|
|
|
54,961
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
132,755
|
|
|
$
|
10,351
|
|
|
$
|
(11,367)
|
|
|
$
|
131,739
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
2,584
|
|
|
$
|
112
|
|
|
$
|
112
|
|
|
$
|
2,808
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
1,723
|
|
|
1,723
|
|
Total Pre-tax
Adjustments
|
|
2,584
|
|
|
112
|
|
|
1,835
|
|
|
4,531
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
135,339
|
|
|
$
|
10,463
|
|
|
$
|
(9,532)
|
|
|
$
|
136,270
|
|
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
June 30,
|
|
|
2019
|
|
2018
|
Dollars in
thousands, except per share data
|
|
|
|
|
Net Income
|
|
$
|
48,830
|
|
|
$
|
52,709
|
|
Plus: Adjustments to Net Income
|
|
—
|
|
|
—
|
|
Plus: Tax Benefit of Adjustments to Net Income
|
|
—
|
|
|
—
|
|
Adjusted Net
Income
|
|
48,830
|
|
|
52,709
|
|
Less: Net Income Attributable to Noncontrolling
Interest
|
|
5,550
|
|
|
7,547
|
|
Adjusted Net Income
Attributable to CONSOL Energy Inc. Shareholders
|
|
$
|
43,280
|
|
|
$
|
45,162
|
|
|
|
|
|
|
Weighted-Average
Diluted Shares of Common Stock Outstanding
|
|
27,782,280
|
|
|
28,554,036
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
Dilutive Earnings per
Share
|
|
$
|
1.56
|
|
|
$
|
1.58
|
|
Plus: Adjustments to Net Income Attributable to CONSOL Energy
Inc. Shareholders
|
|
—
|
|
|
—
|
|
Adjusted Dilutive
Earnings per Share
|
|
$
|
1.56
|
|
|
$
|
1.58
|
|
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
|
|
|
June 30,
2019
|
|
June 30,
2018
|
Net
Income
|
|
$
|
124,251
|
|
|
$
|
107,545
|
|
Plus:
|
|
|
|
|
Interest Expense, net
|
|
75,941
|
|
|
60,681
|
|
Depreciation, Depletion and Amortization
|
|
193,707
|
|
|
198,173
|
|
Income Taxes
|
|
(3,047)
|
|
|
77,428
|
|
Stock/Unit-Based Compensation
|
|
15,955
|
|
|
17,975
|
|
Loss
on Debt Extinguishment
|
|
25,416
|
|
|
3,149
|
|
CCR
Adjusted EBITDA per Credit Agreement
|
|
(110,347)
|
|
|
(117,801)
|
|
Cash
Distributions from CONSOL Coal Resources LP
|
|
35,294
|
|
|
34,863
|
|
Cash
Payments for Legacy Employee Liabilities, Net
of Non-Cash Expense
|
|
(17,498)
|
|
|
(1,791)
|
|
Other Adjustments to Net Income
|
|
5,083
|
|
|
129
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
344,755
|
|
|
$
|
380,351
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
396,351
|
|
|
$
|
505,610
|
|
Senior Secured Second Lien Notes
|
|
254,956
|
|
|
279,476
|
|
MEDCO Revenue Bonds
|
|
102,865
|
|
|
102,865
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
756,433
|
|
|
890,036
|
|
Less:
|
|
|
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Cash
on Hand
|
|
155,212
|
|
|
277,643
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
598,960
|
|
|
$
|
610,308
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
1.7
|
|
|
1.6
|
|
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
|
|
Six Months
Ended
|
Organic Free
Cash Flow
|
June 30,
2019
|
|
June 30,
2018
|
|
June 30,
2019
|
|
June 30,
2018
|
Net Cash Provided
by Operations
|
$
|
83,630
|
|
|
$
|
162,460
|
|
|
$
|
165,801
|
|
|
$
|
278,192
|
|
Capital
Expenditures
|
(48,783)
|
|
|
(34,243)
|
|
|
(82,954)
|
|
|
(56,199)
|
|
Organic Free Cash
Flow
|
$
|
34,847
|
|
|
$
|
128,217
|
|
|
$
|
82,847
|
|
|
$
|
221,993
|
|
|
|
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
(5,560)
|
|
|
(5,587)
|
|
|
(11,119)
|
|
|
(11,174)
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
$
|
29,287
|
|
|
$
|
122,630
|
|
|
$
|
71,728
|
|
|
$
|
210,819
|
|
Free Cash
Flow
|
Three Months
Ended
June 30, 2019
|
|
Three Months
Ended
June 30, 2018
|
Net Cash Provided
by Operations
|
$
|
83,630
|
|
|
$
|
162,460
|
|
|
|
|
|
Capital
Expenditures
|
(48,783)
|
|
|
(34,243)
|
|
Proceeds from Sales
of Assets
|
989
|
|
|
836
|
|
Free Cash
Flow
|
$
|
35,836
|
|
|
$
|
129,053
|
|
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-second-quarter-2019-300896717.html
SOURCE CONSOL Energy Inc.