CANONSBURG, Pa., Nov. 5, 2019 /PRNewswire/ -- CONSOL Energy Inc.
(NYSE: CEIX) today reported financial and operating results for the
period ended September 30, 2019.
Third Quarter 20191 Highlights and Other Updates
Include:
- GAAP net income of $7.0
million and total GAAP dilutive earnings per share of
$0.16;
- Adjusted EBITDA2 of $82.4
million;
- Year-to-date (YTD) net cash provided by operations of
$223.2 million;
- YTD organic free cash flow net to CEIX
shareholders2 of $75.0
million;
- Net payments on total debt of $21.5
million during the quarter;
- Repurchased approximately 5% of outstanding CEIX common
shares during the quarter;
- Cash and cash equivalents of $133.3
million or 31.2% of market capitalization as of
9/30/2019;
- Total net leverage ratio2 of 1.8x on 9/30/2019 per bank method;
- Strongest third quarter production in the history of the
Pennsylvania Mining Complex (PAMC); and
- Maintaining full-year 2019 guidance.
Management Comments
"The third quarter is typically our weakest quarter of the year;
however, I am pleased to announce that the PAMC delivered record
third quarter production this year," said Jimmy Brock, President and Chief Executive
Officer of CONSOL Energy Inc. "This strong performance was
underscored by our contracted position and the continued
desirability of our product, which the capital markets failed to
recognize. Furthermore, we were able to grow our total revenue by
3% this quarter compared to the year-ago period, despite major coal
price indices suffering double-digit declines."
"This has been an increasingly tough year for our industry as
both the commodity markets and capital markets have been
challenging. The good news is that we have positioned ourselves to
weather this storm. On the capital markets front, we completed our
debt refinancing earlier in the year, reduced our leverage,
increased our liquidity and expanded our financial flexibility. On
the revenue front, we moved early to contract our coal and are now
82% contracted for 2020 at attractive prices compared to the
current market. This gives our operations team good visibility as
we plan our production schedule heading into 2020. On the balance
sheet front, our contracted position and operational consistency
also allow us to continue to opportunistically buy back our
undervalued debt and equity securities."
Pennsylvania Mining Complex Review and Outlook
PAMC Sales and Marketing
Our marketing team shipped 6.5 million tons of coal during the
third quarter of 2019 at an average revenue per ton of $46.59, compared to 6.2 million tons at an
average revenue per ton of $47.21 in
the year-ago period. Our coal revenue improved by $6.7 million compared to the year-ago period,
despite a 20% lower average PJM West day-ahead power price, a 42%
lower average API 2 prompt month coal price and a 19% lower average
Henry Hub natural gas spot price in the third quarter of 2019
versus the third quarter of 2018. This revenue improvement was
largely driven by a modest increase in sales volume and our robust
contracted position, which significantly reduced variability in our
average revenue per ton.
During the quarter, we were successful in securing additional
coal sales contracts for 2020 and 2021, bringing our contracted
positions to 82% and 36%, respectively, assuming a 27 million ton
annual run rate. Additionally, in the second quarter of 2019, one
of our longwalls transitioned to a new lower sulfur region of the
reserves with improved mining conditions. We believe the resulting
improvement in coal quality should help to increase the domestic
and export marketability of the PAMC product, including access to
new markets.
According to the U.S. Energy Information Administration,
inventories at domestic utilities stood at approximately 111
million tons at the end of August, which is slightly higher
compared to 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 third quarter, highlighting the quality and
resilience of our customer base.
On the export front, API 2 spot prices for thermal coal
delivered to Europe have been
volatile throughout 2019. After a 44% decline in the first half of
2019, API 2 prompt month prices rebounded by 23% during the third
quarter 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. It is also important to note
that the forward curve for API 2 is in contango and currently sits
around $70 per ton in 2021.
Supply rationalization is another positive trend we are seeing
in the marketplace. Globally, several unhedged coal producers are
scaling back their thermal coal output. We are also noticing
similar trends on the metallurgical coal front, where producers are
idling high-cost operations or slowing expansion projects due to
recent softer prices and declining access to capital. As we head
into 2020, we will remain market-driven and operate our mines in
line with our contracted position and opportunities to capture
market share.
Operations Summary
The PAMC achieved a record-high third quarter production of 6.5
million tons, which compares to 6.4 million tons in the year-ago
quarter. The increase in coal production was largely due to the
impact of one fewer longwall move in the third quarter of 2019
versus the prior year period. During the current quarter, our
operations team overcame several non-typical challenges including a
roof fall and equipment breakdowns. These geological and
equipment-related issues resulted in higher mine maintenance and
project expenses. Accordingly, we saw slight cost increases
compared to year-ago levels. The Company's total costs during the
third quarter were $323.9 million
compared to $315.9 million in the
year-ago quarter. Average cash cost of coal sold per
ton2 was $32.78 compared
to $30.88 in the year-ago
quarter.
|
|
Three Months
Ended
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
|
|
|
|
Coal
Production
|
million
tons
|
6.5
|
|
6.4
|
Coal Sales
|
million
tons
|
6.5
|
|
6.2
|
Average Revenue per
Ton
|
per ton
|
$46.59
|
|
$47.21
|
Average Cash Costs of
Coal Sold2
|
per ton
|
$32.78
|
|
$30.88
|
Average Cash Margin
per Ton Sold2
|
per ton
|
$13.81
|
|
$16.33
|
CONSOL Marine Terminal (CMT) Review
For the third quarter of 2019, throughput volumes at CMT were
2.4 million tons, compared to 2.7 million tons in the year-ago
period. Terminal revenues were largely in line compared to the
year-ago quarter. For the third quarter, terminal revenues and cash
operating costs were $16.3 million
and $6.3 million, respectively,
compared to $16.1 million and
$7.4 million, respectively, in the
year-ago period. CMT net income and CMT Adjusted EBITDA2
came in at $7.7 million and
$9.9 million, respectively, in the
third quarter of 2019 compared to $5.7
million and $8.3 million,
respectively, in the year-ago period.
Itmann Project
As announced last quarter, all permits needed for development of
the mine site have been approved and issued. Excavation for mine
site construction is now underway, and we are working to staff the
mine in preparation for commencement of development mining in the
first quarter of 2020.
Equipment procurement is still on schedule and is trending below
our capital budget for the first section of the mine through the
identification and purchase of rebuilt equipment.
Finally, engineering and environmental work is still underway to
permit a new preparation plant and refuse facility at the former
Itmann plant site. We are working with the appropriate parties to
finalize the plant layout, rail infrastructure design and other
agreements needed for the plant site, and we plan to proceed with
submitting the remaining permit applications once these have been
completed.
We continue to maintain our guidance outlook as we progress
toward the mine start date. We will update our outlook accordingly
at that time.
De-leveraging, Interest Rate Hedges, and Capital
Returns
The strength of our business model is underpinned by our ability
to generate free cash flow, which allows us to take advantage of
our opportunity set to invest in areas where we can improve our
returns. This quarter was no different as we took advantage of the
decline in the prices of our financial securities and stepped up
repurchases of our common stock and second lien bonds. Our goal is
to always maintain a strong balance sheet with low leverage and
strong liquidity, which enables us to execute our strategic goals
and increase our capital returns while driving down our cost of
capital.
Since November 2017, when we
became an independent publicly-traded company, through the end of
the second quarter of 2019, we have spent approximately
$225 million repurchasing our debt
(84%) and equity securities (16%). During the third quarter of
2019, we deployed an additional $47
million toward our term loans (9%), second lien notes (34%),
finance leases (10%) and equity (47%).
Specifically, during the quarter, CEIX repurchased 1,366,054 of
its common shares, or 5% of its shares outstanding, for
$23.2 million at a weighted average
price of $16.97 per share, as well as
19,413 common units of CCR for $0.2
million at a weighted average price of $12.88 per unit. On the debt front, CEIX spent
$16.2 million (including premium),
$3.8 million and $0.7 million toward the reduction of our Second
Lien, Term Loan A and Term Loan B debts, respectively. CEIX also
made principal payments of $4.7
million toward outstanding finance leases.
During the quarter, we also layered on interest rate hedges
against an additional $50 million of
our Term Loan B principal for 2020, 2021 and 2022. These hedges
will effectively reduce our interest rates by an average of 80
basis points, compared to then-prevailing rates, which corresponds
to a total interest expense reduction of approximately $1.2 million. Combined with the $100 million of Term Loan B interest rate hedges
that were layered on during the second quarter of 2019, we expect a
total interest expense reduction of approximately $2.8 million between 2020 and 2022.
2019 Guidance and Outlook
Based on our year-to-date results, current contracted position,
estimated prices and production plans, we are maintaining our
previously announced guidance ranges for 2019:
- Coal sales volumes (100% PAMC) - 26.8-27.8 million tons
- Coal average revenue per ton sold - $47.00-$48.00
- Average cash cost of coal sold per ton3 -
$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
Third Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Coal Resources
LP, during which management will discuss the third quarter 2019
financial and operational results, is scheduled for November
5, 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 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
September 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 EBITDA", "Organic Free Cash Flow Net to
CEIX Shareholders", "CMT Adjusted EBITDA" and "Net Leverage Ratio"
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".
3CEIX is unable to provide a reconciliation of
Adjusted EBITDA guidance and 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
September 30, 2019 and 2018 (in thousands):
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
|
7,024
|
|
|
$
|
9,084
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation,
Depletion and Amortization
|
54,370
|
|
|
51,242
|
|
Other Non-Cash
Adjustments to Net Income
|
(3,772)
|
|
|
(1,099)
|
|
Changes in Working
Capital
|
(240)
|
|
|
(7,167)
|
|
Net Cash Provided by
Operating Activities
|
57,382
|
|
|
52,060
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(48,521)
|
|
|
(40,656)
|
|
Proceeds from Sales of
Assets
|
715
|
|
|
139
|
|
Net Cash Used in
Investing Activities
|
(47,806)
|
|
|
(40,517)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Net Payments on
Long-Term Debt, Including Fees
|
(21,520)
|
|
|
(5,422)
|
|
Repurchases of Common
Stock
|
(21,768)
|
|
|
(6,443)
|
|
Distributions to
Noncontrolling Interest
|
(5,555)
|
|
|
(5,589)
|
|
Other Financing
Activities
|
(252)
|
|
|
(2,278)
|
|
Net Cash Used in
Financing Activities
|
(49,095)
|
|
|
(19,732)
|
|
Net Decrease in
Cash and Cash Equivalents and Restricted Cash
|
$
|
(39,519)
|
|
|
$
|
(8,189)
|
|
Cash and Cash
Equivalents and Restricted Cash at Beginning of Period
|
174,368
|
|
|
284,503
|
|
Cash and Cash
Equivalents and Restricted Cash at End of Period
|
$
|
134,849
|
|
|
$
|
276,314
|
|
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
September 30,
|
|
|
2019
|
|
2018
|
Total Costs and
Expenses
|
|
$
|
323,907
|
|
|
$
|
315,854
|
|
Freight
Expense
|
|
(3,599)
|
|
|
(2,443)
|
|
Selling, General and
Administrative Costs
|
|
(14,690)
|
|
|
(18,526)
|
|
Loss on Debt
Extinguishment
|
|
(801)
|
|
|
—
|
|
Interest Expense,
net
|
|
(15,598)
|
|
|
(20,862)
|
|
Other Costs
(Non-Production)
|
|
(22,786)
|
|
|
(30,801)
|
|
Depreciation,
Depletion and Amortization (Non-Production)
|
|
(12,105)
|
|
|
(9,175)
|
|
Cost of Coal
Sold
|
|
$
|
254,328
|
|
|
$
|
234,047
|
|
Depreciation,
Depletion and Amortization (Production)
|
|
(42,265)
|
|
|
(42,067)
|
|
Cash Cost of Coal
Sold
|
|
$
|
212,063
|
|
|
$
|
191,980
|
|
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
September 30,
|
|
|
2019
|
|
2018
|
Total Coal
Revenue
|
|
$
|
301,542
|
|
|
$
|
294,797
|
|
Operating and Other Costs
|
|
234,849
|
|
|
222,781
|
|
Less: Other Costs (Non-Production)
|
|
(22,786)
|
|
|
(30,801)
|
|
Total Cash Cost of
Coal Sold
|
|
212,063
|
|
|
191,980
|
|
Add: Depreciation, Depletion and Amortization
|
|
54,370
|
|
|
51,242
|
|
Less: Depreciation, Depletion and Amortization
(Non-Production)
|
|
(12,105)
|
|
|
(9,175)
|
|
Total Cost of Coal
Sold
|
|
$
|
254,328
|
|
|
$
|
234,047
|
|
Total Tons Sold (in
millions)
|
|
6.5
|
|
|
6.2
|
|
Average Revenue per
Ton Sold
|
|
$
|
46.59
|
|
|
$
|
47.21
|
|
Average Cash Cost of
Coal Sold per Ton
|
|
32.78
|
|
|
30.88
|
|
Depreciation,
Depletion and Amortization Costs per Ton Sold
|
|
6.51
|
|
|
6.60
|
|
Average Cost of Coal
Sold per Ton
|
|
39.29
|
|
|
37.48
|
|
Average Margin per
Ton Sold
|
|
7.30
|
|
|
9.73
|
|
Add:
Depreciation, Depletion and Amortization Costs per Ton
Sold
|
|
6.51
|
|
|
6.60
|
|
Average Cash
Margin per Ton Sold
|
|
$
|
13.81
|
|
|
$
|
16.33
|
|
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
September 30, 2019
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
Complex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
30,545
|
|
|
$
|
7,706
|
|
|
$
|
(31,227)
|
|
|
$
|
7,024
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
|
—
|
|
|
—
|
|
|
2,415
|
|
|
2,415
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
14,085
|
|
|
15,598
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(755)
|
|
|
(755)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
30,545
|
|
|
9,219
|
|
|
(15,482)
|
|
|
24,282
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
45,829
|
|
|
539
|
|
|
8,002
|
|
|
54,370
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
76,374
|
|
|
$
|
9,758
|
|
|
$
|
(7,480)
|
|
|
$
|
78,652
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
2,712
|
|
|
$
|
131
|
|
|
$
|
131
|
|
|
$
|
2,974
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
801
|
|
|
801
|
|
Total Pre-tax
Adjustments
|
|
2,712
|
|
|
131
|
|
|
932
|
|
|
3,775
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
79,086
|
|
|
$
|
9,889
|
|
|
$
|
(6,548)
|
|
|
$
|
82,427
|
|
|
|
Three Months Ended
September 30, 2018
|
|
|
PAMC
Division
|
|
Other
Division
|
|
|
Dollars in
thousands
|
|
PA Mining
omplex
|
|
Baltimore
Terminal
(CMT)
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
|
$
|
37,962
|
|
|
$
|
5,726
|
|
|
$
|
(34,604)
|
|
|
$
|
9,084
|
|
|
|
|
|
|
|
|
|
|
Add: Income Tax
Benefit
|
|
—
|
|
|
—
|
|
|
(690)
|
|
|
(690)
|
|
Add: Interest
Expense, net
|
|
—
|
|
|
1,513
|
|
|
19,349
|
|
|
20,862
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(523)
|
|
|
(523)
|
|
Earnings (Loss)
Before Interest & Taxes (EBIT)
|
|
37,962
|
|
|
7,239
|
|
|
(16,468)
|
|
|
28,733
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
44,235
|
|
|
962
|
|
|
6,045
|
|
|
51,242
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Before Interest, Taxes and DD&A (EBITDA)
|
|
$
|
82,197
|
|
|
$
|
8,201
|
|
|
$
|
(10,423)
|
|
|
$
|
79,975
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Stock/Unit-Based
Compensation
|
|
$
|
2,730
|
|
|
$
|
127
|
|
|
$
|
126
|
|
|
$
|
2,983
|
|
Total Pre-tax
Adjustments
|
|
2,730
|
|
|
127
|
|
|
126
|
|
|
2,983
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
84,927
|
|
|
$
|
8,328
|
|
|
$
|
(10,297)
|
|
|
$
|
82,958
|
|
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 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
September 30,
|
|
|
2019
|
|
2018
|
Dollars in
thousands, except per share data
|
|
|
|
|
Net Income
|
|
$
|
7,024
|
|
|
$
|
9,084
|
|
Plus: Adjustments to Net Income
|
|
—
|
|
|
—
|
|
Plus: Tax Benefit of Adjustments to Net Income
|
|
—
|
|
|
—
|
|
Adjusted Net
Income
|
|
7,024
|
|
|
9,084
|
|
Less: Net Income Attributable to Noncontrolling
Interest
|
|
2,684
|
|
|
3,350
|
|
Adjusted Net Income
Attributable to CONSOL Energy Inc. Shareholders
|
|
$
|
4,340
|
|
|
$
|
5,734
|
|
|
|
|
|
|
Weighted-Average
Diluted Shares of Common Stock Outstanding
|
|
27,016,990
|
|
|
28,575,860
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
Dilutive Earnings per
Share
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
Plus: Adjustments to Net Income Attributable to CONSOL Energy
Inc. Shareholders
|
|
—
|
|
|
—
|
|
Adjusted Dilutive
Earnings per Share
|
|
$
|
0.16
|
|
|
$
|
0.20
|
|
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
|
|
|
September 30,
2019
|
|
September 30,
2018
|
Net
Income
|
|
$
|
122,191
|
|
|
$
|
108,111
|
|
Plus:
|
|
|
|
|
Interest Expense, net
|
|
70,677
|
|
|
77,681
|
|
Depreciation, Depletion and Amortization
|
|
196,835
|
|
|
202,762
|
|
Income Taxes
|
|
58
|
|
|
72,968
|
|
Stock/Unit-Based Compensation
|
|
15,946
|
|
|
14,649
|
|
Loss
on Debt Extinguishment
|
|
26,217
|
|
|
3,149
|
|
CCR
Adjusted EBITDA per Credit Agreement
|
|
(108,502)
|
|
|
(121,745)
|
|
Cash
Distributions from CONSOL Coal Resources LP
|
|
35,383
|
|
|
35,040
|
|
Cash
Payments for Legacy Employee Liabilities, Net
of Non-Cash Expense
|
|
(20,393)
|
|
|
(3,501)
|
|
Other Adjustments to Net Income
|
|
5,989
|
|
|
867
|
|
Consolidated EBITDA
per Credit Agreement
|
|
$
|
344,401
|
|
|
$
|
389,981
|
|
|
|
|
|
|
Consolidated First Lien Debt
|
|
$
|
394,947
|
|
|
$
|
501,500
|
|
Senior Secured Second Lien Notes
|
|
239,228
|
|
|
279,476
|
|
MEDCO Revenue Bonds
|
|
102,865
|
|
|
102,865
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Consolidated
Indebtedness per Credit Agreement
|
|
739,301
|
|
|
885,926
|
|
Less:
|
|
|
|
|
Advance Royalty Commitments
|
|
2,261
|
|
|
2,085
|
|
Cash
on Hand
|
|
122,720
|
|
|
249,532
|
|
Consolidated Net
Indebtedness per Credit Agreement
|
|
$
|
614,320
|
|
|
$
|
634,309
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Indebtedness/EBITDA)
|
|
1.8
|
|
|
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
|
|
Nine Months
Ended
|
Organic Free
Cash Flow
|
September
30, 2019
|
|
September
30, 2018
|
|
September
30, 2019
|
|
September
30, 2018
|
Net Cash Provided
by Operations
|
$
|
57,382
|
|
|
$
|
52,060
|
|
|
$
|
223,183
|
|
|
$
|
330,252
|
|
Capital
Expenditures
|
(48,521)
|
|
|
(40,656)
|
|
|
(131,475)
|
|
|
(96,855)
|
|
Organic Free Cash
Flow
|
$
|
8,861
|
|
|
$
|
11,404
|
|
|
$
|
91,708
|
|
|
$
|
233,397
|
|
|
|
|
|
|
|
|
|
Distributions to
Noncontrolling Interest
|
(5,555)
|
|
|
(5,589)
|
|
|
(16,674)
|
|
|
(16,763)
|
|
Organic Free Cash
Flow Net to CEIX Shareholders
|
$
|
3,306
|
|
|
$
|
5,815
|
|
|
$
|
75,034
|
|
|
$
|
216,634
|
|
Free Cash
Flow
|
Three Months
Ended
September 30, 2019
|
|
Three Months
Ended
September 30, 2018
|
Net Cash Provided
by Operations
|
$
|
57,382
|
|
|
$
|
52,060
|
|
|
|
|
|
Capital
Expenditures
|
(48,521)
|
|
|
(40,656)
|
|
Proceeds from Sales
of Assets
|
715
|
|
|
139
|
|
Free Cash
Flow
|
$
|
9,576
|
|
|
$
|
11,543
|
|
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.
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SOURCE CONSOL Energy Inc.