CANONSBURG, Pa., Feb. 7, 2023
/PRNewswire/ -- Today, CONSOL Energy Inc. (NYSE: CEIX) reported
financial and operating results for the fiscal quarter and year
ended December 31, 2022.
Fourth Quarter 2022 Highlights Include:
- GAAP net income of $193.0
million;
- Quarterly adjusted EBITDA1 of $240.3 million;
- Announces dividend of $1.10/share, based on 4Q22 results, payable on
February 28, 2023;
- Increasing the planned shareholder return allocation to a
range of 35-50% of free cash flow while continuing to reduce
debt;
- Repurchased 124 thousand shares of CEIX common stock at a
weighted average price of $64.18 per
share;
- Net cash provided by operating activities of $151.3 million;
- Quarterly free cash flow1 of $116.0 million;
- Restarted the fifth longwall at the Pennsylvania Mining
Complex (PAMC) in mid-December;
- 2023 and 2024 contracted position improved to 23.9 million
tons and 12.5 million tons, respectively; and
- Debt repayments of $81.6
million during 4Q22, including $50.0
million of Term Loan B and $25.0
million of Second Lien Notes.
Full Year 2022 Highlights Include:
- GAAP net income of $467.0
million;
- Adjusted EBITDA1 of $806.7
million;
- Net cash provided by operating activities of $651.0 million;
- Free cash flow1 of $501.0
million;
- PAMC coal shipments of 24.1 million tons;
- Record annual terminal revenue and Adjusted
EBITDA1 at the CONSOL Marine Terminal;
- Debt repayments of $292.3
million, while increasing total cash and cash equivalents by
$128.7 million;
- Initiated enhanced shareholder return program in 3Q22,
returning approximately $80.0 million
to shareholders;
- Commissioned the Itmann Preparation Plant with ramp up to
full production expected in 2023; and
- Refinanced our revolving credit facility and accounts
receivable securitization facility.
Management Comments
"During the fourth quarter of 2022, we delivered a strong
operational and financial performance following challenging
geological issues at the PAMC in the third quarter and finished the
year with 24.1 million PAMC sales tons. We generated annual free
cash flow1 of $501 million
in 2022, which was used to accelerate our debt reduction strategy
and underpinned the decision to initiate an enhanced shareholder
return program during the year. In 2022, we made debt repayments of
nearly $300 million, returned
$80 million to shareholders via
dividends and share repurchases and increased our cash position by
approximately $130 million. Due to
this significant progress, we are pleased to announce that we are
increasing our planned capital allocation percentage for
shareholder returns to a range of 35% to 50% of quarterly free cash
flows. Operationally during the year, we completed the development
of the fifth longwall at the PAMC in December, which is now fully
operational, and we commissioned our Itmann preparation plant,
which shipped its first train in 4Q22."
"On the safety front, our Bailey Preparation Plant and CONSOL
Marine Terminal (CMT) each had ZERO employee recordable incidents
during the full year of 2022. Our full-year total recordable
incident rate of 1.72 at the PAMC continues to track significantly
below the national average for underground bituminous coal mines,
finishing the year approximately 63% below the national
year-to-date average (based on the latest available MSHA
data)."
Pennsylvania Mining Complex Review and Outlook
PAMC Sales and Marketing
Our sales team sold 6.2 million tons of PAMC coal during the
fourth quarter of 2022, generating coal revenue of $516.3 million for the PAMC segment. After
adjusting for the effect of settlements of commodity derivatives,
the PAMC generated an average realized coal revenue per ton
sold1 of $75.92. This
compares to 5.6 million tons sold at an average realized coal
revenue per ton sold1 of $51.27 in the year-ago period. The improvement in
the average realized coal revenue per ton sold1
throughout 2022 was due to significant improvements in the coal,
natural gas, and electric power markets versus the prior year.
In the domestic market, although the coal pricing environment
remained robust during the fourth quarter of 2022, prices became
very volatile. Warmer-than-normal weather for much of the quarter
as well as increased natural gas inventories drove the volatility.
However, coal had a strong finish to 2022 and stepped up
meaningfully during the arctic blast that hit much of the U.S. in
mid- to late-December. McCloskey estimates that coal burn reached
42.4 million tons during the month, an 8 million ton increase
compared to December 2021 as coal
again proved to be a reliable baseload power source.
Warmer-than-normal temperatures gripped much of the U.S. in the
month of January and have put downward pressure on domestic natural
gas and power prices. However, incremental coal supply remained
muted throughout 2022, and the Energy Information Administration
expects an 11% decline in domestic coal production in 2023, which
should keep the energy markets tight.
On the export front, similar to the domestic market, seaborne
thermal coal markets remained strong through much of the fourth
quarter of 2022. API2 spot prices averaged $237/metric ton in 4Q22 compared to $173/metric ton in the prior-year quarter.
However, warmer-than-normal temperatures in Europe, which led to improved coal and natural
gas inventory levels, have caused a lot of recent volatility in the
European energy market. Fundamentally, high calorific value coal
supplies remain tight, and natural gas market conditions in
Europe remain constrained by the
indefinite shutdown of the Russian Nord
Stream 1 pipeline and delayed regulatory approval for
Nord Stream 2 forcing Europe to be more reliant on imported LNG.
Goldman Sachs suggests that a mild winter could relax constraints
on European economic growth and industrial demand that were
artificially curtailed in 2022 in order to balance the gas market,
which could still drive increased energy demand in Europe in 2023.
During 4Q22, we strengthened our forward contract book at the
PAMC, opportunistically increasing our sales book by an additional
8.3 million tons for delivery through 2025. As such, we have
increased our 2023 and 2024 sold positions to 23.9 million tons and
12.5 million tons, respectively.
Operations Summary
During the fourth quarter of 2022, we ran our four operating
longwalls at the Pennsylvania Mining Complex at a more normalized
run rate after encountering multiple operational and geological
issues during the third quarter. Furthermore, we completed the
development of our fifth longwall at the complex toward the end of
4Q22, and it subsequently began producing coal in mid-December. The
PAMC produced 6.1 million tons in 4Q22, compared to 5.6 million
tons in the year-ago quarter. This brought total PAMC production to
23.9 million tons in 2022.
CEIX's total costs and expenses during the fourth quarter of
2022 were $401.8 million, compared to
$318.0 million in the year-ago
quarter, and CEIX's total coal revenue during the fourth quarter of
2022 was $537.0 million, compared to
$288.1 million in the year-ago
quarter. Total realized coal revenue1 in 4Q22 was
$489.3 million, after accounting for
the settlements of commodity derivatives. The significant
improvement in total realized coal revenue1 in the
quarter was mainly driven by a $24.65
improvement in average realized coal revenue per ton
sold1 at the Pennsylvania Mining Complex, as coal prices
were much stronger compared to the prior-year period, as well as
improved incremental sales volume. Average cash cost of coal sold
per ton1 at the PAMC for the fourth quarter of 2022 was
$34.89, compared to $30.81 in the year-ago quarter. The increase was
due to ongoing inflationary pressures on costs for supplies,
maintenance, and contractor labor, increased power costs and added
costs associated with the continued development work for the fifth
longwall at the PAMC.
For 2022, CEIX's total costs and expenses were $1,533.5 million, compared to $1,223.5 million in the prior year. Our full-year
2022 average cash cost of coal sold per ton1 at the PAMC
came in at $34.56, compared to
$28.25 for full-year 2021. The
significant increase for the year was again due to persistent
inflationary pressures, fifth longwall development costs and
increased power expense compared to 2021.
|
|
Three Months
Ended
|
|
For the Year
Ended
|
|
|
December 31,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
|
|
|
|
|
Total Coal
Revenue
|
thousands
|
$
536,994
|
|
$
288,095
|
|
$ 2,018,662
|
|
$ 1,092,022
|
Settlements of
Commodity Derivatives
|
thousands
|
$
(47,742)
|
|
$
—
|
|
$
(289,228)
|
|
$
—
|
Total Realized Coal
Revenue1
|
thousands
|
$
489,252
|
|
$
288,095
|
|
$ 1,729,434
|
|
$ 1,092,022
|
Total Costs and
Expenses
|
thousands
|
$
401,791
|
|
$
318,039
|
|
$ 1,533,500
|
|
$ 1,223,540
|
Total Cash Cost of Coal
Sold1
|
thousands
|
$
215,990
|
|
$
171,280
|
|
$
834,405
|
|
$
668,812
|
Coal
Production
|
million tons
|
6.1
|
|
5.6
|
|
23.9
|
|
23.9
|
Coal Sales
|
million tons
|
6.2
|
|
5.6
|
|
24.1
|
|
23.7
|
Average Realized Coal
Revenue per
Ton Sold1
|
per ton
|
$
75.92
|
|
$
51.27
|
|
$
69.89
|
|
$
45.75
|
Average Cash Cost of
Coal Sold per
Ton1
|
per ton
|
$
34.89
|
|
$
30.81
|
|
$
34.56
|
|
$
28.25
|
Average Cash Margin per
Ton Sold1
|
per ton
|
$
41.03
|
|
$
20.46
|
|
$
35.33
|
|
$
17.50
|
CONSOL Marine Terminal Review
For the fourth quarter of 2022, throughput volumes at the CMT
were 3.6 million tons, compared to 3.1 million tons in the year-ago
period. The quarter-over-quarter increase was largely due to
incremental PAMC sales volumes in 4Q22 that moved into the export
market. Terminal revenues and CMT total costs and expenses were
$20.9 million and $10.3 million, respectively, in 4Q22, compared to
$15.5 million and $7.4 million, respectively, during the year-ago
period. CMT operating cash costs1 were $6.4 million in 4Q22, compared to $5.4 million in 4Q21. The increase in terminal
revenue in the quarter was due to a $0.79 per ton increase in the average throughput
rate as well as the additional throughput volume compared to the
prior-year period. The increase in CMT operating cash costs was
mainly due to increased supplies, services and power costs compared
to 4Q21. CONSOL Marine Terminal net income and CONSOL Marine
Terminal Adjusted EBITDA1 were $11.7 million and $14.4
million, respectively, in the fourth quarter of 2022
compared to $10.4 million and
$13.2 million, respectively, in the
year-ago period. For the full year of 2022, CMT achieved terminal
revenue of $78.9 million, the highest
in its history. As such, 2022 CONSOL Marine Terminal net income and
CONSOL Marine Terminal Adjusted EBITDA1 were
$41.2 million and $52.3 million, respectively, compared to
$32.3 million and $43.5 million, respectively, in 2021.
Itmann Update
After achieving major milestones in the second half of 2022 with
the commissioning of the Itmann preparation plant in September and
the shipping of the first train of Itmann coal in October, Itmann
production was impaired during 4Q22 due to equipment delivery
delays, adverse geological conditions and a tight labor market. As
a result, we now expect the ramp up to full run-rate production to
occur around mid-year 2023. Although the ramp-up has been delayed,
the underlying issues are expected to be relatively short-term in
nature and are not expected to affect the long-term viability of
the project. We shipped 9 trains of coal from the Itmann
preparation plant during the 4th quarter, and we sold
204 thousand tons of Itmann and 3rd party coal in
aggregate during 2022. The final continuous miner was delivered in
December of 2022, and we believe we are past the geological
challenges that were faced in 4Q22. On the marketing front, our
Itmann product continues to be well-received, and we remain focused
on securing new business with strategic customers in the domestic
and export markets.
Shareholder Returns Update
In late December 2022, CEIX
repurchased 124,454 shares of its common stock for $8.0 million at a weighted average price of
$64.18 per share, which settled in
early January 2023.
Today, at the discretion of the board of directors, CEIX
announced a dividend of $1.10/share,
representing approximately 34% of the free cash flow generated in
the fourth quarter of 2022. The payment will amount to an aggregate
of approximately $39.0 million,
payable on February 28, 2023 to all
shareholders of record as of February 17,
2023. When combined with the $8.0
million share repurchase, these in aggregate represent
approximately 40% of the free cash flow generated in the fourth
quarter.
Moving forward, CEIX announced an update and increase to its
enhanced shareholder return program, which will become effective in
the first quarter of 2023, that will return a planned aggregate
range of approximately 35% to 50% of quarterly free cash flow in
the form of dividends, subject to the discretion of the board of
directors, and/or share repurchases, in any combination determined
at the discretion of CEIX management.
CEIX expects to continue to aggressively reduce its outstanding
gross debt by allocating the majority of its remaining free cash
flow toward debt repayment with the goal of retiring its Term Loan
B and Senior Secured Second Lien Notes. Once this goal is achieved,
CEIX expects to consider further increasing the free cash flow
allocation to its shareholder return program.
Debt Repurchases Update
During the fourth quarter of 2022, we continued to execute on
our stated goal of reducing our total debt levels and made
repayments of $50.0 million,
$25.0 million and $6.6 million on our Term Loan B, second lien
notes and equipment-financed and other debt, respectively. This
brings our total debt repayments and repurchases in the quarter to
$81.6 million (excluding the premium
paid on the second lien notes).
For the year ended December 31,
2022, we made repayments of $175.7
million, $50.0 million,
$41.3 million and $25.3 million on our Term Loan B, second lien
notes, Term Loan A and equipment-financed and other debt,
respectively. This brings our total debt payments and repurchases
in the year to $292.3 million
(excluding the premium paid on the second lien notes).
2023 Guidance and Outlook
Based on our current contracted position, estimated prices and
production plans, we are providing the following financial and
operating performance guidance for full fiscal year 2023:
- 2023 targeted PAMC coal sales volume of 25.0-27.0 million
tons
- PAMC average realized coal revenue per ton sold2
expectation of $78.00-$84.00
- PAMC average cash cost of coal sold per ton2
expectation of $34.00-$36.00
- Itmann Complex production volume of 400-600 thousand
tons
- Capital expenditures: $160-$185
million
Fourth Quarter Earnings Conference Call
A conference call and webcast, during which management will
discuss the fourth quarter and full year 2022 financial and
operational results, is scheduled for February 7, 2023 at 10:00
AM eastern time. Prepared remarks by members of management
will be followed by a question-and-answer session. Interested
parties may listen via webcast on the "Events and Presentations"
page of our website, www.consolenergy.com. An archive of the
webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-877-226-2859
Participant international dial in 1-412-542-4134
Availability of Additional Information
Please refer to our website, www.consolenergy.com, for
additional information regarding the company. In addition, we may
provide other information about the company from time to time on
our website.
We will also file our Form 10-K with the Securities and Exchange
Commission (SEC) reporting our results for the period ended
December 31, 2022 on February 10, 2023. Investors seeking our detailed
financial statements can refer to the Form 10-K once it has been
filed with the SEC.
Footnotes:
1 "Adjusted EBITDA", "Free Cash Flow", "CONSOL Marine Terminal
Adjusted EBITDA", "CMT Operating Cash Costs", "Total Realized Coal
Revenue" and "Total Cash Cost of Coal Sold" are non-GAAP financial
measures and "Average Realized Coal Revenue per Ton Sold", "Average
Cash Cost of Coal Sold per Ton" and "Average Cash Margin per Ton
Sold" are operating ratios derived from non-GAAP financial
measures, each of which are reconciled to the most directly
comparable GAAP financial measures below, under the caption
"Reconciliation of Non-GAAP Financial Measures".
2 CEIX is unable to provide a reconciliation of Average Realized
Coal Revenue per Ton Sold and Average Cash Cost of Coal Sold per
Ton guidance, operating ratios derived from non-GAAP financial
measures, due to the unknown effect, timing and potential
significance of certain income statement items.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg, Pennsylvania-based producer and
exporter of high-Btu bituminous thermal coal and metallurgical
coal. It owns and operates some of the most productive longwall
mining operations in the Northern Appalachian Basin. CONSOL's
flagship operation is the Pennsylvania Mining Complex, which has
the capacity to produce approximately 28.5 million tons of coal per
year and is comprised of 3 large-scale underground mines: Bailey
Mine, Enlow Fork Mine, and Harvey Mine. CONSOL also developed the
Itmann Mine in the Central Appalachian Basin, which has the
capacity to produce roughly 900 thousand tons per annum of premium,
low-vol metallurgical coking coal. 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 ~622 million reserve tons associated with the Pennsylvania
Mining Complex and the ~28 million reserve tons associated with the
Itmann Mining Complex, the company also controls approximately 1.4
billion tons of greenfield thermal and metallurgical coal reserves
and resources located in the major coal-producing basins of the
eastern United States. Additional
information regarding CONSOL Energy may be found at
www.consolenergy.com.
Contacts:
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Erica Fisher, (724) 416-8292
ericafisher@consolenergy.com
Condensed Consolidated Statements of Income
The following table presents a condensed consolidated statement
of income for the three months and years ended December 31, 2022 and 2021 (in thousands):
|
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenue and Other
Income:
|
|
|
|
|
|
|
|
|
Coal Revenue
|
|
$
536,994
|
|
$
288,095
|
|
$ 2,018,662
|
|
$ 1,092,022
|
Terminal
Revenue
|
|
20,899
|
|
15,493
|
|
78,915
|
|
65,193
|
Freight
Revenue
|
|
51,022
|
|
31,448
|
|
182,441
|
|
103,819
|
Gain (Loss) on
Commodity Derivatives, net
|
|
19,547
|
|
115,539
|
|
(237,024)
|
|
(52,204)
|
Other Income
|
|
8,689
|
|
30,050
|
|
58,943
|
|
50,117
|
Total Revenue and
Other Income
|
|
637,151
|
|
480,625
|
|
2,101,937
|
|
1,258,947
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Operating and Other
Costs
|
|
256,254
|
|
195,702
|
|
949,222
|
|
745,292
|
Depreciation, Depletion
and Amortization
|
|
58,271
|
|
56,510
|
|
226,878
|
|
224,583
|
Freight
Expense
|
|
51,022
|
|
31,448
|
|
182,441
|
|
103,819
|
General and
Administrative Costs
|
|
21,777
|
|
18,530
|
|
116,696
|
|
87,161
|
Loss (Gain) on Debt
Extinguishment
|
|
1,262
|
|
—
|
|
5,623
|
|
(657)
|
Interest
Expense
|
|
13,205
|
|
15,849
|
|
52,640
|
|
63,342
|
Total Costs and
Expenses
|
|
401,791
|
|
318,039
|
|
1,533,500
|
|
1,223,540
|
|
|
|
|
|
|
|
|
|
Earnings Before
Income Tax
|
|
235,360
|
|
162,586
|
|
568,437
|
|
35,407
|
Income Tax
Expense
|
|
42,343
|
|
45,263
|
|
101,458
|
|
1,297
|
Net
Income
|
|
$
193,017
|
|
$
117,323
|
|
$
466,979
|
|
$
34,110
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
5.54
|
|
$
3.40
|
|
$
13.41
|
|
$
0.99
|
Dilutive
|
|
$
5.39
|
|
$
3.30
|
|
$
13.07
|
|
$
0.96
|
Condensed Consolidated Balance Sheets
The following table presents a condensed consolidated balance
sheet as of December 31, 2022 and
2021 (in thousands):
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
273,070
|
|
$
149,913
|
Trade Receivables,
net
|
|
158,127
|
|
104,099
|
Other Current
Assets
|
|
167,286
|
|
132,328
|
Total Current
Assets
|
|
598,483
|
|
386,340
|
Total Property, Plant
and Equipment - Net
|
|
1,960,082
|
|
1,978,550
|
Total Other
Assets
|
|
145,812
|
|
208,627
|
TOTAL
ASSETS
|
|
$ 2,704,377
|
|
$ 2,573,517
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Total Current
Liabilities
|
|
$
448,798
|
|
$
445,232
|
Total Long-Term
Debt
|
|
355,335
|
|
594,650
|
Total Other
Liabilities
|
|
734,418
|
|
860,822
|
Total Equity
|
|
1,165,826
|
|
672,813
|
TOTAL LIABILITIES
AND EQUITY
|
|
$ 2,704,377
|
|
$ 2,573,517
|
Condensed Consolidated Statements of Cash Flows
The following table presents a condensed consolidated statement
of cash flows for the three months and years ended December 31, 2022 and 2021 (in thousands):
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities:
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net Income
|
$
193,017
|
|
$
117,323
|
|
$
466,979
|
|
$
34,110
|
Adjustments to
Reconcile Net Income to Net
Cash Provided by Operating Activities:
|
|
|
|
|
|
|
|
Depreciation,
Depletion and Amortization
|
58,271
|
|
56,510
|
|
226,878
|
|
224,583
|
Other Non-Cash
Adjustments to Net Income
|
(28,402)
|
|
(83,251)
|
|
(11,699)
|
|
40,892
|
Changes in Working
Capital
|
(71,582)
|
|
(38,156)
|
|
(31,168)
|
|
5,984
|
Net Cash Provided
by Operating Activities
|
151,304
|
|
52,426
|
|
650,990
|
|
305,569
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Capital
Expenditures
|
(37,050)
|
|
(29,434)
|
|
(171,506)
|
|
(132,752)
|
Proceeds from Sales of
Assets
|
1,764
|
|
1,519
|
|
21,538
|
|
13,572
|
Other Investing
Activity
|
9,423
|
|
(7,843)
|
|
7,790
|
|
(8,181)
|
Net Cash Used in
Investing Activities
|
(25,863)
|
|
(35,758)
|
|
(142,178)
|
|
(127,361)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Net Payments on
Long-Term Debt, Including
Fees
|
(82,257)
|
|
(30,768)
|
|
(294,362)
|
|
(101,181)
|
Proceeds from
Long-Term Debt
|
—
|
|
—
|
|
—
|
|
75,000
|
Dividends
|
(36,615)
|
|
—
|
|
(71,486)
|
|
—
|
Other Financing
Activities
|
(265)
|
|
—
|
|
(14,218)
|
|
(4,671)
|
Net Cash Used in
Financing Activities
|
(119,137)
|
|
(30,768)
|
|
(380,066)
|
|
(30,852)
|
Net Increase
(Decrease) in Cash and Cash
Equivalents and Restricted Cash
|
6,304
|
|
(14,100)
|
|
128,746
|
|
147,356
|
Cash and Cash
Equivalents and Restricted Cash at
Beginning of Period
|
320,648
|
|
212,306
|
|
198,206
|
|
50,850
|
Cash and Cash
Equivalents and Restricted Cash at
End of Period
|
$
326,952
|
|
$
198,206
|
|
$
326,952
|
|
$
198,206
|
Reconciliation of Non-GAAP Financial Measures
We evaluate our cost of coal sold and cash cost of coal sold on
an aggregate basis by segment, and our average cash cost of coal
sold per ton on a per-ton basis. Cost of coal sold includes items
such as direct operating costs, royalty and production taxes,
direct administration costs, and depreciation, depletion and
amortization costs on production assets. Cost of coal sold excludes
any indirect costs, such as general and administrative costs,
freight expenses, (loss) gain on debt extinguishment, interest
expenses, depreciation, depletion and amortization costs on
non-production assets and other costs not directly attributable to
the production of coal. The cash cost of coal sold includes cost of
coal sold less depreciation, depletion and amortization costs on
production assets. We define average cash cost of coal sold per ton
as cash cost of coal sold divided by tons sold. The GAAP measure
most directly comparable to cost of coal sold, cash cost of coal
sold and average cash cost of coal sold per ton is total costs and
expenses.
The following table presents a reconciliation for the PAMC
segment of cost of coal sold, cash cost of coal sold and average
cash cost of coal sold per ton to total costs and expenses, the
most directly comparable GAAP financial measure, on a historical
basis, for each of the periods indicated (in thousands, except per
ton information).
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Total Costs and
Expenses
|
$
401,791
|
|
$
318,039
|
|
$ 1,533,500
|
|
$ 1,223,540
|
Less: Freight
Expense
|
(51,022)
|
|
(31,448)
|
|
(182,441)
|
|
(103,819)
|
Less: General and
Administrative Costs
|
(21,777)
|
|
(18,530)
|
|
(116,696)
|
|
(87,161)
|
Less: (Loss) Gain on
Debt Extinguishment
|
(1,262)
|
|
—
|
|
(5,623)
|
|
657
|
Less: Interest
Expense
|
(13,205)
|
|
(15,849)
|
|
(52,640)
|
|
(63,342)
|
Less: Other Costs
(Non-Production and non-PAMC)
|
(89,368)
|
|
(24,422)
|
|
(114,817)
|
|
(76,480)
|
Less: Depreciation,
Depletion and Amortization
(Non-Production and non-PAMC)
|
(9,167)
|
|
(8,461)
|
|
(37,021)
|
|
(29,355)
|
Cost of Coal
Sold
|
$
215,990
|
|
$
219,329
|
|
$ 1,024,262
|
|
$
864,040
|
Less: Depreciation,
Depletion and Amortization
(PAMC Production)
|
(49,104)
|
|
(48,049)
|
|
(189,857)
|
|
(195,228)
|
Cash Cost of Coal
Sold
|
$
166,886
|
|
$
171,280
|
|
$
834,405
|
|
$
668,812
|
Total Tons Sold (in
millions)
|
6.2
|
|
5.6
|
|
24.1
|
|
23.7
|
Average Cost of Coal
Sold per Ton
|
$
42.96
|
|
$
39.34
|
|
$
42.49
|
|
$
36.43
|
Less: Depreciation,
Depletion and Amortization
Costs per Ton Sold
|
8.07
|
|
8.53
|
|
7.93
|
|
8.18
|
Average Cash Cost of
Coal Sold per Ton
|
$
34.89
|
|
$
30.81
|
|
$
34.56
|
|
$
28.25
|
We evaluate our average realized coal revenue per ton sold,
average margin per ton sold and average cash margin per ton sold on
a per-ton basis. We define realized coal revenue as total coal
revenue, net of settlements of commodity derivatives. We define
average realized coal revenue per ton sold as total coal revenue,
net of settlements of commodity derivatives divided by tons sold.
We define average margin per ton sold as average realized coal
revenue per ton sold, net of average cost of coal sold per ton. We
define average cash margin per ton sold as average realized coal
revenue per ton sold, net of average cash cost of coal sold per
ton. The GAAP measure most directly comparable to realized coal
revenue, average realized coal revenue per ton sold, average margin
per ton sold and average cash margin per ton sold is total coal
revenue.
The following table presents a reconciliation for the PAMC
segment of realized coal revenue, average realized coal revenue per
ton sold, average margin per ton sold and average cash margin per
ton sold to total coal revenue, the most directly comparable GAAP
financial measure, on a historical basis, for each of the periods
indicated (in thousands, except per ton information).
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Total Coal Revenue
(PAMC Segment)
|
$
516,289
|
|
$
285,807
|
|
$ 1,973,884
|
|
$ 1,085,080
|
Less: Settlements of
Commodity Derivatives
|
(47,742)
|
|
—
|
|
(289,228)
|
|
—
|
Total Realized Coal
Revenue
|
$
468,547
|
|
$
285,807
|
|
$ 1,684,656
|
|
$ 1,085,080
|
Operating and Other
Costs
|
256,254
|
|
195,702
|
|
949,222
|
|
745,292
|
Less: Other Costs
(Non-Production and non-PAMC)
|
(89,368)
|
|
(24,422)
|
|
(114,817)
|
|
(76,480)
|
Total Cash Cost of
Coal Sold
|
166,886
|
|
171,280
|
|
834,405
|
|
668,812
|
Add: Depreciation,
Depletion and Amortization
|
58,271
|
|
56,510
|
|
226,878
|
|
224,583
|
Less: Depreciation,
Depletion and Amortization (Non-Production and non-PAMC)
|
(9,167)
|
|
(8,461)
|
|
(37,021)
|
|
(29,355)
|
Total Cost of Coal
Sold
|
$
215,990
|
|
$
219,329
|
|
$ 1,024,262
|
|
$
864,040
|
Total Tons Sold (in
millions)
|
6.2
|
|
5.6
|
|
24.1
|
|
23.7
|
Average Realized
Coal Revenue per Ton Sold
|
$
75.92
|
|
$
51.27
|
|
$
69.89
|
|
$
45.75
|
Average Cash Cost of
Coal Sold per Ton
|
34.89
|
|
30.81
|
|
34.56
|
|
28.25
|
Depreciation, Depletion
and Amortization Costs per Ton Sold
|
8.07
|
|
8.53
|
|
7.93
|
|
8.18
|
Average Cost of Coal
Sold per Ton
|
42.96
|
|
39.34
|
|
42.49
|
|
36.43
|
Average Margin per
Ton Sold
|
32.96
|
|
11.93
|
|
27.40
|
|
9.32
|
Add: Depreciation,
Depletion and Amortization Costs per Ton Sold
|
8.07
|
|
8.53
|
|
7.93
|
|
8.18
|
Average Cash Margin
per Ton Sold
|
$
41.03
|
|
$
20.46
|
|
$
35.33
|
|
$
17.50
|
We define CMT operating costs as operating and other costs
related to throughput tons. CMT operating costs exclude any
indirect costs, such as freight expense, general and administrative
costs, (loss) gain on debt extinguishment, depreciation, depletion
and amortization of non-throughput assets, direct administration
costs, interest expenses, and other costs not directly attributable
to throughput tons. CMT operating cash costs include CMT operating
costs, less depreciation, depletion and amortization costs on
throughput assets. The GAAP measure most directly comparable to CMT
operating costs and CMT operating cash costs is total costs and
expenses.
The following table presents a reconciliation of CMT operating
costs and CMT operating cash costs to total costs and expenses, the
most directly comparable GAAP financial measure, on a historical
basis, for each of the periods indicated (in thousands).
|
Three Months
Ended
December 31,
|
|
For the Year
Ended
December 31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Total Costs and
Expenses
|
$
401,791
|
|
$
318,039
|
|
$ 1,533,500
|
|
$ 1,223,540
|
Less: Freight
Expense
|
(51,022)
|
|
(31,448)
|
|
(182,441)
|
|
(103,819)
|
Less: General and
Administrative Costs
|
(21,777)
|
|
(18,530)
|
|
(116,696)
|
|
(87,161)
|
Less: (Loss) Gain on
Debt Extinguishment
|
(1,262)
|
|
—
|
|
(5,623)
|
|
657
|
Less: Interest
Expense
|
(13,205)
|
|
(15,849)
|
|
(52,640)
|
|
(63,342)
|
Less: Other Costs
(Non-Throughput)
|
(249,836)
|
|
(190,328)
|
|
(924,464)
|
|
(723,474)
|
Less: Depreciation,
Depletion and Amortization
(Non-Throughput)
|
(57,253)
|
|
(55,292)
|
|
(222,609)
|
|
(219,749)
|
CMT Operating
Costs
|
$
7,436
|
|
$
6,592
|
|
$
29,027
|
|
$
26,652
|
Less: Depreciation,
Depletion and Amortization
(Throughput)
|
(1,018)
|
|
(1,218)
|
|
(4,269)
|
|
(4,834)
|
CMT Operating Cash
Costs
|
$
6,418
|
|
$
5,374
|
|
$
24,758
|
|
$
21,818
|
We define adjusted EBITDA as (i) net income (loss) plus income
taxes, interest expense and depreciation, depletion and
amortization, as adjusted for (ii) certain non-cash items, such as
stock-based compensation and fair value adjustments of commodity
derivative instruments. The GAAP measure most directly comparable
to adjusted EBITDA is net income (loss).
The following tables present a reconciliation of adjusted EBITDA
to net income (loss), the most directly comparable GAAP financial
measure, on a historical basis, for each of the periods indicated
(in thousands).
|
Three Months Ended
December 31, 2022
|
|
PAMC
|
|
CONSOL
Marine
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
$
247,800
|
|
$
11,654
|
|
$
(66,437)
|
|
$
193,017
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
—
|
|
—
|
|
42,343
|
|
42,343
|
Add: Interest
Expense
|
(205)
|
|
1,527
|
|
11,883
|
|
13,205
|
Less: Interest
Income
|
(553)
|
|
—
|
|
(1,169)
|
|
(1,722)
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
247,042
|
|
13,181
|
|
(13,380)
|
|
246,843
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
50,583
|
|
1,148
|
|
6,540
|
|
58,271
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A
(EBITDA)
|
$
297,625
|
|
$
14,329
|
|
$
(6,840)
|
|
$
305,114
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Add: Stock-Based
Compensation
|
$
1,005
|
|
$
48
|
|
$
143
|
|
$
1,196
|
Add: Loss on Debt
Extinguishment
|
—
|
|
—
|
|
1,262
|
|
1,262
|
Less: Fair Value
Adjustment of Commodity
Derivative Instruments
|
(67,289)
|
|
—
|
|
—
|
|
(67,289)
|
Total Pre-tax
Adjustments
|
(66,284)
|
|
48
|
|
1,405
|
|
(64,831)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
231,341
|
|
$
14,377
|
|
$
(5,435)
|
|
$
240,283
|
|
Three Months Ended
December 31, 2021
|
|
PAMC
|
|
CONSOL
Marine
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
$
176,145
|
|
$
10,415
|
|
$
(69,237)
|
|
$
117,323
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
—
|
|
—
|
|
45,263
|
|
45,263
|
Add: Interest
Expense
|
285
|
|
1,533
|
|
14,031
|
|
15,849
|
Less: Interest
Income
|
(54)
|
|
—
|
|
(827)
|
|
(881)
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
176,376
|
|
11,948
|
|
(10,770)
|
|
177,554
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
50,940
|
|
1,218
|
|
4,352
|
|
56,510
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A
(EBITDA)
|
$
227,316
|
|
$
13,166
|
|
$
(6,418)
|
|
$
234,064
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Add: Stock-Based
Compensation
|
1,761
|
|
81
|
|
183
|
|
2,025
|
Add: Fair Value
Adjustment of Commodity
Derivative Instruments
|
(115,539)
|
|
—
|
|
—
|
|
(115,539)
|
Total Pre-tax
Adjustments
|
(113,778)
|
|
81
|
|
183
|
|
(113,514)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
113,538
|
|
$
13,247
|
|
$
(6,235)
|
|
$
120,550
|
|
For the Year Ended
December 31, 2022
|
|
PAMC
|
|
CONSOL
Marine
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
$
620,208
|
|
$
41,223
|
|
$
(194,452)
|
|
$
466,979
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
—
|
|
—
|
|
101,458
|
|
101,458
|
Add: Interest
Expense
|
—
|
|
6,116
|
|
46,524
|
|
52,640
|
Less: Interest
Income
|
(1,857)
|
|
—
|
|
(4,174)
|
|
(6,031)
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
618,351
|
|
47,339
|
|
(50,644)
|
|
615,046
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
200,320
|
|
4,604
|
|
21,954
|
|
226,878
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A
(EBITDA)
|
$
818,671
|
|
$
51,943
|
|
$
(28,690)
|
|
$
841,924
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Add: Stock-Based
Compensation
|
$
6,628
|
|
$
316
|
|
$
946
|
|
$
7,890
|
Add: Loss on Debt
Extinguishment
|
—
|
|
—
|
|
5,623
|
|
5,623
|
Add: Equity Affiliate
Adjustments
|
—
|
|
—
|
|
3,500
|
|
3,500
|
Less: Fair Value
Adjustment of Commodity
Derivative Instruments
|
(52,204)
|
|
—
|
|
—
|
|
(52,204)
|
Total Pre-tax
Adjustments
|
(45,576)
|
|
316
|
|
10,069
|
|
(35,191)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
773,095
|
|
$
52,259
|
|
$
(18,621)
|
|
$
806,733
|
|
For the Year Ended
December 31, 2021
|
|
PAMC
|
|
CONSOL
Marine
Terminal
|
|
Other
|
|
Total
Company
|
Net Income
(Loss)
|
$
94,161
|
|
$
32,251
|
|
$
(92,302)
|
|
$
34,110
|
|
|
|
|
|
|
|
|
Add: Income Tax
Expense
|
—
|
|
—
|
|
1,297
|
|
1,297
|
Add: Interest
Expense
|
1,710
|
|
6,141
|
|
55,491
|
|
63,342
|
Less: Interest
Income
|
(90)
|
|
—
|
|
(3,197)
|
|
(3,287)
|
Earnings (Loss) Before
Interest & Taxes (EBIT)
|
95,781
|
|
38,392
|
|
(38,711)
|
|
95,462
|
|
|
|
|
|
|
|
|
Add: Depreciation,
Depletion & Amortization
|
206,727
|
|
4,834
|
|
13,022
|
|
224,583
|
|
|
|
|
|
|
|
|
Earnings (Loss) Before
Interest, Taxes and DD&A
(EBITDA)
|
$
302,508
|
|
$
43,226
|
|
$
(25,689)
|
|
$
320,045
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Add: Stock-Based
Compensation
|
5,768
|
|
265
|
|
599
|
|
6,632
|
Less: Gain on Debt
Extinguishment
|
—
|
|
—
|
|
(657)
|
|
(657)
|
Add: Pension
Settlement
|
—
|
|
—
|
|
22
|
|
22
|
Add: Fair Value
Adjustment of Commodity
Derivative Instruments
|
52,204
|
|
—
|
|
—
|
|
52,204
|
Total Pre-tax
Adjustments
|
57,972
|
|
265
|
|
(36)
|
|
58,201
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
360,480
|
|
$
43,491
|
|
$
(25,725)
|
|
$
378,246
|
Free cash flow is a non-GAAP financial measure. defined as net
cash provided by operating activities plus proceeds from sales of
assets less capital expenditures. Management believes that this
measure is meaningful to investors because management reviews cash
flows generated from operations and non-core asset sales after
taking into consideration capital expenditures due to the fact that
these expenditures are considered necessary to maintain and expand
CONSOL's asset base and are expected to generate future cash flows
from operations. It is important to note that free cash flow does
not represent the residual cash flow available for discretionary
expenditures since other non-discretionary expenditures, such as
mandatory debt service requirements, are not deducted from the
measure. The following table presents a reconciliation of free cash
flow to net cash provided by operations, the most directly
comparable GAAP financial measure, on a historical basis, for each
of the periods indicated (in thousands).
|
Three
Months
Ended
|
|
Three
Months
Ended
|
|
For the Year
Ended
|
|
For the Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Net Cash Provided by
Operations
|
$
151,304
|
|
$
52,426
|
|
$
650,990
|
|
$
305,569
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
(37,050)
|
|
(29,434)
|
|
(171,506)
|
|
(132,752)
|
Proceeds from Sales of
Assets
|
1,764
|
|
1,519
|
|
21,538
|
|
13,572
|
Free Cash
Flow
|
$
116,018
|
|
$
24,511
|
|
$
501,022
|
|
$
186,389
|
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of the federal securities laws. With
the exception of historical matters, the matters discussed in this
press release are forward-looking statements (as defined in Section
21E of the Securities Exchange Act of 1934, as amended) that
involve risks and uncertainties that could cause actual results to
differ materially from results projected in or implied by such
forward-looking statements. Accordingly, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results. The forward-looking statements may include
projections and estimates concerning the timing and success of
specific projects and our future production, revenues, income and
capital spending. When we use the words "anticipate," "believe,"
"could," "continue," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "should," "will," or their negatives, or
other similar expressions, the statements which include those words
are usually forward-looking statements. When we describe our
expectations with respect to the Itmann Mine or any other strategy
that involves risks or uncertainties, we are making forward-looking
statements. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. Specific risks, contingencies and
uncertainties are discussed in more detail in our filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release speak only as of the date of this press
release and CEIX disclaims any intention or obligation to update
publicly any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/consol-energy-announces-results-for-the-fourth-quarter-and-full-year-2022-and-announces-dividend-of-1-10share-301740038.html
SOURCE CONSOL Energy Inc.