COST: 88.8 $MM
CANONSBURG, Pa., Dec. 30, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) ("CEIX") and CONSOL Coal Resources LP (NYSE: CCR) ("CCR") announced that, at a special meeting held on December 29, 2020, the shareholders of CEIX approved the issuance of shares of CEIX's common stock (the "CEIX Stock Issuance") in connection with the previously announced merger of a wholly owned subsidiary of CEIX with and into CCR (the "Merger") pursuant to which CCR would survive as an indirect, wholly owned subsidiary of CEIX. More than 99% of the total votes cast in person or by proxy at CEIX's special meeting were voted in favor of approving the CEIX stock issuance.
In addition, CCR's limited partners approved the Merger and the adoption of the merger agreement relating to the Merger. The holders of more than 83% of CCR's outstanding limited partner interests approved the Merger and the adoption of the merger agreement related thereto via written consent.
Following the approval of the CEIX Stock Issuance by the CEIX stockholders and the approval of the Merger and the adoption of the merger agreement related thereto by the CCR limited partners, CEIX completed the acquisition of all of the outstanding common units of CCR ("CCR Common Units") that it did not already own. As a result of the transaction, CCR Common Units have been suspended from trading on the New York Stock Exchange.
"The completion of this merger allows the equity holders of both companies to benefit from a simplified corporate structure, improved consolidated credit metrics, elimination of dual public company costs and improved financial flexibility," said Jimmy Brock, President and CEO of CONSOL Energy Inc.
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. Its 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 three large-scale underground mines: Bailey, Enlow Fork, and Harvey. CEIX also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, CEIX also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CEIX may be found at www.consolenergy.com
About CONSOL Coal Resources LP
CONSOL Coal Resources LP (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CEIX's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines—Bailey, Enlow Fork and Harvey—and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal coal. More information is available on CCR's website www.ccrlp.com.
Cautionary Statements
All statements in this press release (and oral statements made regarding the subjects of this communication), including those that express a belief, expectation or intention, may be considered forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Without limiting the generality of the foregoing, forward-looking statements contained in this communication include statements relying on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of CEIX and CCR, which could cause actual results to differ materially from such statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include, but are not limited to, statements regarding the expected benefits of the transaction to CEIX and CCR and their stockholders and unitholders, respectively; the expected future growth, dividends and distributions of the combined company; and plans and objectives of management for future operations. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. While CEIX and CCR believe that the assumptions concerning future events are reasonable, they caution that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of their businesses. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the failure to realize the anticipated costs savings, synergies and other benefits of the transaction; the possible diversion of management time on transaction-related issues; local, regional and national economic conditions and the impact they may have on CEIX, CCR and their customers; the impact of outbreaks of communicable diseases such as the novel highly transmissible and pathogenic coronavirus (COVID-19) on business activity, CEIX's and CCR's operations and national and global economic conditions, generally; conditions in the coal industry, including a sustained decrease in the level of supply or demand for coal or a sustained decrease in the price of coal; the financial condition of CEIX's or CCR's customers; any non-performance by customers of their contractual obligations; changes in customer, employee or supplier relationships resulting from the transaction; changes in safety, health, environmental and other regulations; the results of any reviews, investigations or other proceedings by government authorities; and the performance of CEIX and CCR.
The forward-looking statements in this press release speak only as of the date of this report; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the risks and uncertainties set forth in the "Risk Factors" section of CEIX's and CCR's respective Annual Reports on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2020, June 30, 2020 and September 30, 2020, respectively, each filed with the Securities and Exchange Commission, and any subsequent reports filed with the Securities and Exchange Commission.
No Offer or Solicitation
This release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Contacts:
Investor: Nathan Tucker at (724) 416-8336
Media: Zach Smith at (724) 416-8291
View original content:http://www.prnewswire.com/news-releases/consol-energy-inc-and-consol-coal-resources-lp-announce-stockholder-and-limited-partner-approval-and-completion-of-merger-301199157.html
SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 23, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) ("CEIX") and CONSOL Coal Resources LP (NYSE: CCR) ("CCR") today announced that they have entered into a definitive merger agreement pursuant to which CEIX will acquire all of the publicly held CCR common units in an all-stock transaction valued at approximately $34.4 million, based on the most recent closing price of shares of CEIX common stock.
Under the merger agreement, CEIX will acquire all of the approximately 10.9 million outstanding CCR common units that it does not already own at a fixed exchange ratio of 0.73 shares of CEIX common stock for each publicly held CCR common unit. This exchange ratio represents a 2.1% premium to the volume weighted average exchange ratio during the 20 trading days ended October 22, 2020. In aggregate, CEIX will issue approximately 8.0 million shares in connection with the proposed transaction, representing approximately 22.2% of the total CEIX shares that will be outstanding on a pro forma basis.
"We are extremely excited to announce this transaction, as we believe it will provide significant benefits for both CEIX and CCR stakeholders" said Jimmy Brock, President and Chief Executive Officer of CONSOL Energy Inc. "We firmly believe these two companies are a much healthier entity once consolidated than they would be on a standalone basis, regardless of the circumstance. Simplifying the structure will bring immediate benefits to the combined entity such as improving its consolidated credit metrics, creating financial flexibility and eliminating dual public company costs. In the longer term, we expect this transaction will improve the creditworthiness of the combined entity, while also enhancing capital market access and trading liquidity. Finally, this merger accelerates our ability to return capital to our shareholders."
Additional Transaction Terms and Details
The transaction terms were negotiated, reviewed and approved by the conflicts committee of the board of directors of CCR's general partner and the board of directors of CCR's general partner. The CCR conflicts committee is composed of the independent members of the board of directors of CCR's general partner. The board of directors of CEIX also approved the merger agreement.
Subject to customary approvals and conditions, the transaction is expected to close in the first quarter of 2021. The transaction is subject to majority approval by CCR's common unitholders, approval by CEIX's stockholders and the effectiveness of a registration statement related to the issuance of the new CEIX shares to CCR's common unitholders. Pursuant to a support agreement entered into in connection with the transaction, CEIX has agreed to vote all of the CCR common units that it owns in favor of the transaction. CEIX currently owns approximately 60.7% of the outstanding CCR common units.
In connection with the closing of the transaction, CCR's common units will cease to be publicly traded and the incentive distribution rights in CCR will be eliminated.
Citi and Credit Suisse Securities (USA) LLC are acting as financial advisors and Latham & Watkins LLP is acting as legal advisor to CEIX. Intrepid Partners, LLC is acting as financial advisor and Sidley Austin LLP is acting as legal advisor to the CCR conflicts committee.
Conference Call Details
CEIX and CCR will host a live webcast on October 23, 2020 to discuss the transaction. The call will begin at 8:30 a.m. Eastern Time followed by a live Q&A session with management.
To access the webcast, please visit the "Investors" page of CEIX's website at www.consolenergy.com or the "Investors" page of CCR's website at www.ccrlp.com. Any presentation materials will be available on each company's website.
Alternatively, the call and Q&A can be accessed as follows:
A replay of the call will be available on CEIX's website for approximately 365 days.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CEIX may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines—Bailey, Enlow Fork and Harvey—and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on CCR's website www.ccrlp.com.
Cautionary Statements
All statements in this press release (and oral statements made regarding the subjects of this communication), including those that express a belief, expectation or intention, may be considered forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Without limiting the generality of the foregoing, forward-looking statements contained in this communication include statements relying on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of CEIX and CCR, which could cause actual results to differ materially from such statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include, but are not limited to, statements regarding the expected benefits of the proposed transaction to CEIX and CCR and their stockholders and unitholders, respectively; the anticipated completion of the proposed transaction and the timing thereof; and the expected future growth, dividends and distributions of the combined company; and plans and objectives of management for future operations. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. While CEIX and CCR believe that the assumptions concerning future events are reasonable, they caution that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of their businesses. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the failure to realize the anticipated costs savings, synergies and other benefits of the transaction; the possible diversion of management time on transaction-related issues; the risk that the requisite approvals to complete the transaction are not obtained; local, regional and national economic conditions and the impact they may have on CEIX, CCR and their customers; the impact of outbreaks of communicable diseases such as the novel highly transmissible and pathogenic coronavirus (COVID-19) on business activity, the Company's operations and national and global economic conditions, generally; conditions in the coal industry, including a sustained decrease in the level of supply or demand for coal or a sustained decrease in the price of coal; the financial condition of CEIX's or CCR's customers; any non-performance by customers of their contractual obligations; changes in customer, employee or supplier relationships resulting from the transaction; changes in safety, health, environmental and other regulations; the results of any reviews, investigations or other proceedings by government authorities; and the performance of CEIX and CCR.
The forward-looking statements in this press release speak only as of the date of this report; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the risks and uncertainties set forth in the "Risk Factors" section of CEIX's and CCR's respective Annual Reports on Form 10-K for the year ended December 31, 2019, and Quarterly Reports on Form 10-Q for the three months ended March 31, 2020 and June 30, 2020, respectively, each filed with the Securities and Exchange Commission, and any subsequent reports filed with the Securities and Exchange Commission.
No Offer or Solicitation
This release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Important Additional Information Regarding the Transaction Will Be Filed With the SEC
In connection with the proposed transaction, CEIX will file a registration statement on Form S-4, including a consent solicitation statement/proxy statement/prospectus of CEIX and CCR, with the Securities and Exchange Commission (the "SEC"). INVESTORS AND SECURITY HOLDERS OF CEIX AND CCR ARE ADVISED TO CAREFULLY READ THE REGISTRATION STATEMENT AND CONSENT SOLICITATION STATEMENT/PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A consent solicitation statement/proxy statement/prospectus will be sent to security holders of CEIX and CCR in connection with the solicitation of the approval of CEIX stockholders and consents of CCR unitholders, respectively, relating to the proposed transaction. Investors and security holders may obtain a free copy of the consent solicitation statement/proxy statement/prospectus (when available) and other relevant documents filed by CEIX and CCR with the SEC from the SEC's website at www.sec.gov. Security holders and other interested parties will also be able to obtain, without charge, a copy of the consent solicitation statement/proxy statement/prospectus and other relevant documents (when available) from CEIX's website at www.consolenergy.com under the "Investors" tab under the heading "SEC Filings."
Participants in the Solicitation
CEIX, CCR and their respective directors, executive officers and certain other members of management may be deemed to be participants in the solicitation of proxies and consents in respect of the transaction. Information about these persons is set forth in CEIX's proxy statement relating to its 2020 Annual Meeting of Stockholders, which was filed with the SEC on March 27, 2020, and CCR's Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on February 14, 2020, and subsequent statements of changes in beneficial ownership on file with the SEC. Security holders and investors may obtain additional information regarding the interests of such persons, which may be different than those of the respective companies' security holders generally, by reading the consent solicitation statement/proxy statement/prospectus and other relevant documents regarding the transaction, which will be filed with the SEC.
Contacts
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
View original content:http://www.prnewswire.com/news-releases/consol-energy-inc-to-acquire-remaining-public-stake-in-consol-coal-resources-lp-301158532.html
SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 19, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its third quarter earnings release before the market opens on Thursday, November 5, 2020. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) 1-888-348-6419
Participant international dial in 1-412-902-4235
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Nathan Tucker, at (724) 416-8336 |
Media: | Zach Smith, at (724) 416-8291 |
View original content:http://www.prnewswire.com/news-releases/consol-energy-and-consol-coal-resources-schedule-third-quarter-2020-earnings-release-and-conference-call-301154489.html
SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 12, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) today provided an update on several transactions that were executed during the last several months.
Since July 1, 2020, CONSOL has taken steps to bolster its financial flexibility and liquidity and create value through multiple transactions that included sales of land and mineral assets, gas wells, and coal reserves outside of its active operations. In aggregate, CEIX and CCR expect to generate miscellaneous income and gains on sale of assets in the second half of 2020 totaling $60-$70 million and $9-$10 million, respectively, related to these transactions. Both companies continue to work on several additional opportunities as well to further improve their balance sheets.
CONSOL believes these transactions enable it to enhance liquidity and bolster financial flexibility. These transactions also allow CEIX to accelerate its strategy of de-leveraging its balance sheet through open market repurchases, and they position the company well to take advantage of a potential coal market recovery.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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:http://www.prnewswire.com/news-releases/consol-executes-several-value-enhancing-transactions-301149886.html
SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Aug. 10, 2020 /PRNewswire/ -- Today, CONSOL Coal Resources LP (NYSE: CCR) (the "Partnership") reported financial and operating results for the quarter ended June 30, 2020.
Second Quarter 2020 Highlights Include:
Management Comments
"The second quarter of 2020 was the most challenging quarter I have seen in the 30+ year history of the Pennsylvania Mining Complex, as government-imposed lockdowns in response to the COVID-19 pandemic, both domestically and abroad, resulted in historic underutilization of our assets," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "The significant demand decline in the second quarter that reduced our operational and sales performances also significantly impacted our financial results. However, I am pleased with the prompt response of our team, as we sought to align our operations with demand and reduce discretionary spending. From a shipment perspective, the decrease in demand for our coal as a result of the COVID-19 pandemic hit its lowest point to date in May. With summer weather now officially upon us and with economies beginning to reopen, we have seen shipment levels improve since the end of the second quarter, and we are cautiously optimistic that this trend will continue through the second half of 2020. Although we can't control the markets or overall demand during these unprecedented times, we are laser focused on managing the things that are within our control."
"On the safety front, our Bailey Mine and Bailey Preparation Plant had ZERO recordable incidents during the second quarter. Our total recordable incident rate at the Pennsylvania Mining Complex for the second quarter of 2020 improved by 37.9% compared to the second quarter of 2019. Safety continues to be our top core value."
Sales & Marketing
Our marketing team sold 0.6 million tons of coal during the second quarter of 2020 at an average revenue per ton sold of $43.82, compared to 1.8 million tons at an average revenue per ton sold of $47.53 in the year-ago period. The significant decline in sales tons for the quarter was the result of an unprecedented contraction in U.S. and global economic activity due to the COVID-19 pandemic. As a result of this decline, several of our customers deferred tonnage and/or partially bought out of their contracted positions. We negotiated buyouts of some volumes from customer contracts in exchange for payment of certain fees to us during the second quarter of 2020, which contributed $7.5 million to our other income but resulted in a reduction in our coal revenue during the quarter.
On a positive note, given the unprecedented demand decline, U.S. and global coal producers responded by curtailing significant portions of their annual mine production. On the domestic front, EIA lowered its U.S. coal production estimate to 501 million tons in 2020, a 29% reduction versus 2019 levels. Furthermore, low natural gas and crude oil prices are leading to reduced activity and capital expenditures for E&P companies. IHS Markit reports that active U.S. gas rigs stood at 76 as of July 2nd, down from 174 a year ago and down from more than 200 active rigs in January 2019. As a result, several industry observers now expect natural gas prices to rise above $3/mmBtu in 2021, as gas production declines due to a lack of capital spending, which we believe will make coal more attractive to power plant customers. We have already seen a pickup in contracting activity for 2021 and beyond. During the quarter, we contracted approximately 1.1 million tons for 2021-2024 coal sales at prices above the forward strip published by Coaldesk LLC. This also brings our 2021 contracted position to approximately 49%, assuming a 6.5 million ton production run rate. While we are fully contracted for 2020, we face significant uncertainties given the ongoing economic slowdown due to the COVID-19 pandemic-related shutdowns. As we did in the first half of 2020, we will continue to collaborate with our customers to manage our respective contractual obligations, which could result in some additional 2020 contracted volumes being bought out or deferred.
Internationally, thermal coal prices remained under pressure in the second quarter of 2020 due to the impacts of the COVID-19-related shutdowns and reduced global LNG prices. API2 prompt month prices declined 23.5% in the second quarter of 2020 compared to the year-ago period. On a positive note, we are starting to see some recovery in the export markets with API2 prices increasing 27% as of July 15th, compared to the year-to-date trough marked on May 29th.
Operations Summary
During the second quarter of 2020, we faced an unprecedented reduction in customer demand and increase in force majeure requests from our customers. As a result, we idled our Enlow Fork mine in April and kept it idled throughout the quarter, which weighed negatively on our operating performance. Earlier in the quarter, our Bailey mine was idled as we sought to mitigate the risk of COVID-19. For the next several months, the Bailey mine ran only on an as-needed basis while the Harvey mine produced to the reduced demand levels. For the quarter, the Pennsylvania Mining Complex produced 0.6 million tons, compared to 1.8 million tons in the second quarter of 2019.
Total costs during the second quarter of 2020 were $41.7 million compared to $75.3 million in the year-ago quarter. The decline in overall costs was driven by the significant reduction in production volume and reduced operating days, as we sought to match production with demand. This allowed us to control our overall average cash cost of coal sold per ton1 on our producing assets and to partially mitigate the financial impact of the reduced production volume in the quarter. Accordingly, average cash cost of coal sold per ton1 was $25.90 compared to $31.07 in the year-ago quarter, as our operations team was successful in limiting the amount of cash burn in the quarter. The improvement was primarily driven by lower mine maintenance and supply costs, contractors and purchased services and subsidence expense.
Three Months Ended | |||||||
June 30, 2020 | June 30, 2019 | ||||||
Coal Production | million tons | 0.6 | 1.8 | ||||
Coal Sales | million tons | 0.6 | 1.8 | ||||
Average Revenue per Ton Sold | per ton | $43.82 | $47.53 | ||||
Average Cash Cost of Coal Sold per Ton1 | per ton | $25.90 | $31.07 | ||||
Average Cash Margin per Ton Sold1 | per ton | $17.92 | $16.46 |
Liquidity Update
During the second quarter of 2020, we successfully negotiated an amendment to the inter-company loan agreement with our sponsor, CONSOL Energy, Inc. (CEIX), and its lenders. This amendment provides us with eight quarters of covenant relaxation and ensures continued access to our $275 million affiliate loan facility with CEIX. During the quarter, we reduced our outstanding balance on the affiliate loan by approximately $1.0 million to $179.6 million. In aggregate, as of June 30, 2020, our total liquidity was $95.5 million.
Quarterly Distribution Remains Suspended
During the second quarter of 2020, CCR generated net cash provided by operating activities of $6.5 million and distributable cash flow1 of ($4.7) million. During the quarter, our net cash provided by operating activities was impacted by lower net income. CCR spent $4.1 million in capital expenditures in the second quarter of 2020. As previously announced, given the limited cash flow generation during the quarter, our commitment to delever the balance sheet and the ongoing uncertainty in the commodity markets driven by COVID-19-related demand decline, the board of directors of our general partner maintained the suspension of our cash distribution for all unitholders.
2020 Guidance
Given the ongoing uncertainty associated with the COVID-19 pandemic-driven economic slowdown, we are working with our customers to manage their shipments and inventory levels. However, due to the difficulty in forecasting the duration of this economic slowdown, our 2020 guidance remains suspended. Nonetheless, our team remains ready for and is looking forward to eventual demand recovery.
Second Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., during which management will discuss the second quarter 2020 financial and operational results, is scheduled for August 10, 2020 at 11:00 AM eastern time. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.ccrlp.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.ccrlp.com for additional information regarding the Partnership. In addition, we may provide other information about the Partnership 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, 2020. Investors seeking our detailed financial statements can refer to the Form 10-Q once it has been filed with the SEC.
Footnotes:
1 "adjusted EBITDA", "distributable cash flow", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures."
About CONSOL Coal Resources LP
CONSOL Coal Resources LP (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
Reconciliation of Non-GAAP Financial Measures
We evaluate our cost of coal sold and cash cost of coal sold on an aggregate basis. We define cost of coal sold as operating and other production costs related to produced tons sold, along with changes in coal inventory, both in volumes and carrying values. The cost of coal sold per ton includes items such as direct operating costs, royalty and production taxes, direct administration, and depreciation, depletion and amortization costs on production assets. Our costs exclude any indirect costs such as selling, general and administrative costs, freight expenses, interest expenses, depreciation, depletion and amortization costs on non-production assets and other costs not directly attributable to the production of coal. The cash cost of coal sold includes cost of coal sold less depreciation, depletion and amortization cost on production assets.The GAAP measure most directly comparable to cost of coal sold and cash cost of coal sold is total costs.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Total Costs | $ | 41,681 | $ | 75,260 | ||||
Freight Expense | (771) | (964) | ||||||
Selling, General and Administrative Expenses | (2,360) | (2,953) | ||||||
Interest Expense, Net | (2,254) | (1,557) | ||||||
Other Costs (Non-Production) | (9,881) | (907) | ||||||
Depreciation, Depletion and Amortization (Non-Production) | (4,112) | (509) | ||||||
Cost of Coal Sold | $ | 22,303 | $ | 68,370 | ||||
Depreciation, Depletion and Amortization (Production) | (7,408) | (10,827) | ||||||
Cash Cost of Coal Sold | $ | 14,895 | $ | 57,543 |
We define average cash margin per ton sold as average coal revenue per ton sold, 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, | ||||||||
2020 | 2019 | |||||||
Total Coal Revenue | $ | 25,507 | $ | 87,655 | ||||
Operating and Other Costs | 24,776 | 58,450 | ||||||
Less: Other Costs (Non-Production) | (9,881) | (907) | ||||||
Cash Cost of Coal Sold | 14,895 | 57,543 | ||||||
Add: Depreciation, Depletion and Amortization | 11,520 | 11,336 | ||||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (4,112) | (509) | ||||||
Cost of Coal Sold | $ | 22,303 | $ | 68,370 | ||||
Total Tons Sold | 582 | 1,844 | ||||||
Average Revenue per Ton Sold | $ | 43.82 | $ | 47.53 | ||||
Average Cash Cost of Coal Sold per Ton | 25.90 | 31.07 | ||||||
Add: Depreciation, Depletion and Amortization Costs per Ton Sold | 12.42 | 6.00 | ||||||
Average Cost of Coal Sold per Ton | $ | 38.32 | $ | 37.07 | ||||
Average Margin per Ton Sold | 5.50 | 10.46 | ||||||
Add: Total Depreciation, Depletion and Amortization Costs per Ton Sold | 12.42 | 6.00 | ||||||
Average Cash Margin per Ton Sold | $ | 17.92 | $ | 16.46 |
We define adjusted EBITDA as (i) net (loss) income before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net (loss) income before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
The following table presents a reconciliation of adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net (loss) income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis, for each of the periods indicated (in thousands).
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net (Loss) Income | $ | (7,854) | $ | 14,387 | $ | (7,690) | $ | 29,607 | ||||||||
Plus: | ||||||||||||||||
Interest Expense, Net | 2,254 | 1,557 | 4,409 | 2,908 | ||||||||||||
Depreciation, Depletion and Amortization | 11,520 | 11,336 | 23,448 | 22,553 | ||||||||||||
Unit-Based Compensation | 74 | 341 | 233 | 738 | ||||||||||||
Adjusted EBITDA | $ | 5,994 | $ | 27,621 | $ | 20,400 | $ | 55,806 | ||||||||
Less: | ||||||||||||||||
Cash Interest | 2,237 | 1,815 | 4,324 | 3,690 | ||||||||||||
Estimated Maintenance Capital Expenditures | 8,423 | 9,028 | 17,295 | 18,009 | ||||||||||||
Distributable Cash Flow | $ | (4,666) | $ | 16,778 | $ | (1,219) | $ | 34,107 | ||||||||
Net Cash Provided by Operating Activities | $ | 6,539 | $ | 21,860 | $ | 23,316 | $ | 47,078 | ||||||||
Plus: | ||||||||||||||||
Interest Expense, Net | 2,254 | 1,557 | 4,409 | 2,908 | ||||||||||||
Other, Including Working Capital | (2,799) | 4,204 | (7,325) | 5,820 | ||||||||||||
Adjusted EBITDA | $ | 5,994 | $ | 27,621 | $ | 20,400 | $ | 55,806 | ||||||||
Less: | ||||||||||||||||
Cash Interest | 2,237 | 1,815 | 4,324 | 3,690 | ||||||||||||
Estimated Maintenance Capital Expenditures | 8,423 | 9,028 | 17,295 | 18,009 | ||||||||||||
Distributable Cash Flow | $ | (4,666) | $ | 16,778 | $ | (1,219) | $ | 34,107 |
We define net leverage ratio as the ratio of net debt to last twelve month earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, and capitalized interest.
The following table presents a reconciliation of the net leverage ratio to net income, the most directly comparable GAAP financial measure on a historical basis for the period indicated (in thousands).
Twelve Months | ||||
June 30, 2020 | ||||
Net Income | $ | 8,254 | ||
Plus: | ||||
Interest Expense, Net | 8,105 | |||
Depreciation, Depletion and Amortization | 46,702 | |||
Unit-Based Compensation | 904 | |||
Non-Cash Expense, Net of Cash Payments for Legacy Employee Liabilities | 1,384 | |||
Other Adjustments to Net Income | 820 | |||
EBITDA Per Affiliated Company Credit Agreement | $ | 66,169 | ||
Borrowings under Affiliated Company Credit Agreement | $ | 179,560 | ||
Finance Leases and Asset-Backed Financing | 14,429 | |||
Total Debt | 193,989 | |||
Less: | ||||
Cash on Hand | 102 | |||
Net Debt Per Affiliated Company Credit Agreement | $ | 193,887 | ||
Net Leverage Ratio (Net Debt/EBITDA) | 2.9 |
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 CCR 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 Coal Resources LP
CANONSBURG, Pa., July 21, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its second quarter earnings release before the market opens on Monday, August 10, 2020. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-888-348-6419 |
Participant international dial in | 1-412-902-4235 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Nathan Tucker, at (724) 416-8336 |
Media: | Zach Smith, at (724) 416-8291 |
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., July 14, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) today provided an update on their second quarter 2020 operational performance and cash management efforts as well as their ongoing response to the COVID-19 pandemic.
CEIX implemented several operating protocols at its mine sites to reduce the risk of spread of COVID-19, including increased sanitation efforts and idling mine locations if needed. Given the significant reduction in US and global economic activity, several of our customers deferred tonnage and/or partially bought out of their contracted positions. As a result, we ended the second quarter of 2020 with sales of 2.3 million tons (CCR's share of 0.6 million tons). In response to the decrease in demand for coal, the company took several steps to minimize its cash burn, as several of our customers have been negatively impacted by the effects of the COVID-19 pandemic. The Enlow Fork mine was largely idled during the second quarter, and the Bailey mine ran at a significantly reduced capacity. We completed contract buyouts of $30.1 million (CCR's share of $7.5 million) in the second quarter of 2020, which brings our year-to-date contract buyout total to $41.0 million (CCR's share of $10.2 million), as of June 30, 2020. We continue to work very closely with our customers to manage this unprecedented demand decline.
On the cash management front, CEIX ended the second quarter of 2020 with approximately $33 million of cash and cash equivalents on hand, compared to $78 million at the end of the first quarter of 2020. We also do not have any borrowings (excluding letters of credit) on our $400 million credit facility. Notable cash outflows during the quarter included approximately $19 million in cash interest payments (including semi-annual payment of approximately $10 million for our Second Lien), approximately $14 million in mandatory payments on our Term Loan A, Term Loan B and finance leases and approximately $8 million in transaction costs related to the recently completed amendment on our credit agreement.
"Despite the continued challenges for the coal markets in the second quarter, we are encouraged by recent trends in the marketplace," said Jimmy Brock, President and Chief Executive Officer of CONSOL Energy Inc. "As of now, we believe that May was the bottom for our coal shipments. June shipments were improved compared to May, and month-to-date July shipments indicate a significant improvement compared to June. Earlier this week, we also brought back one longwall at our Enlow Fork mine and are running the Bailey mine at a reduced capacity. Throughout the recent turmoil, I continue to be extremely impressed with the resilience of our team. We've adjusted our operating schedules to better align with market demand, reduced spending at both the operation and corporate levels, successfully negotiated multiple contract buyouts and amended our $400 million revolving credit facility in the second quarter to maintain access to liquidity. During these challenging times, we remain focused on protecting our balance sheet and liquidity."
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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.
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., May 11, 2020 /PRNewswire/ -- Today, CONSOL Coal Resources LP (NYSE: CCR) (the "Partnership") reported financial and operating results for the quarter ended March 31, 2020.
First Quarter 2020 Highlights Include:
Management Comments
"The United States along with other economies worldwide have seen a significant energy demand decline year-to-date driven by the widespread government-imposed lockdowns in response to the COVID-19 pandemic," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "Coal producers, just like companies in other industries, are facing unprecedented demand decline, which has weighed on our operational, sales and financial performances year-to-date. While the duration and breadth of this ongoing pandemic are uncertain, management has undertaken a number of steps to reduce costs and has adjusted our operations accordingly to support deleveraging and liquidity enhancement."
Sales & Marketing
Our marketing team sold 1.5 million tons of coal during the first quarter of 2020 at an average revenue per ton sold of $43.16, compared to 1.7 million tons at an average revenue per ton sold of $49.38 in the year-ago period. The average revenue per ton sold was impacted by a reduction in revenues on our netback contracts in the first quarter due to lower PJM West power prices and volumes, as well as lower average pricing on export sales. During the first quarter of 2020, average PJM West day-ahead power prices declined by 33.4% compared to the year-ago period, but our average revenue per ton sold across the portfolio only declined by 12.6% due to our strong contracted position. We also negotiated buyouts of some volumes from customer contracts in exchange for payment of certain fees to us during the first quarter of 2020, which contributed $2.7 million to our other income and resulted in a reduction in our PAMC average revenue per ton sold during the quarter.
On the domestic front, according to the U.S. Energy Information Administration, inventories at domestic power plants stood at approximately 140 million tons at the end of February, an increase of roughly 41% from year-ago levels as weak demand trends, particularly from industrial and business consumers, and low natural gas prices weighed on our customers' ability to profitably burn coal. On a positive note, low natural gas and crude oil prices are also leading to reduced capital budgets for E&P companies. Industry sources now estimate that E&P capital expenditures will decline by 40-45% in 2020. As a result of this reduced investment, several industry observers now expect natural gas prices to rise above $3/mmbtu in 2021, as gas production declines due to lack of capital spending, which we believe will make coal more attractive to power plant customers.
Internationally, thermal coal prices have declined since the beginning of 2019 due to a pullback in global LNG prices and, more recently, due to global COVID-19-related shutdowns. We are already seeing a seaborne supply response occurring from several countries, which has helped to stabilize API 2 and Newcastle prices, albeit at lower levels. During these turbulent times, we are still finding opportunities to capture and grow market share in the export markets. Recently, our customer, Xcoal, won a contract to supply 1.8 million tons of coal to the Punta Catalina power plant in the Dominican Republic. To fulfill that contract, Xcoal increased the volume of tons to be acquired under its supply contract with us. In aggregate, we are contracted for 2.5 plus million export tons in 2020.
CCR is currently 98% contracted for 2020 and 44% contracted for 2021, assuming annual production of 6.5 million tons. Despite our strong contracted position, we face significant uncertainties given the ongoing economic slowdown due to the COVID-19 pandemic-related shutdowns. We are also collaborating with our customers to help them manage the contractual obligations that we both have, which could result in some 2020 contracted volumes being bought out or deferred into 2021.
Operations Summary
During the first quarter of 2020, we faced reduced customer demand and a longwall move at our Harvey mine, which weighed negatively on our operating performance. CCR produced 1.5 million tons, compared to 1.7 million tons in the first quarter of 2019.
Total costs during the first quarter of 2020 were $67.2 million compared to $70.9 million in the year-ago quarter. The decline in overall costs was driven by reduced production volume and reduced operating days, as we sought to match production with demand. However, the reduced production volume also created an adverse impact on our operating leverage, which resulted in a higher average cash cost of coal sold per ton1 compared to the year-ago period. Average cash cost of coal sold per ton1 was $32.41 compared to $29.71 in the year-ago quarter. Our Enlow Fork mine faced high subsidence-related costs in the first quarter of 2020, which also impacted our overall cost performance. At the beginning of the second quarter, we temporarily idled our Enlow Fork mine to reduce our overall average cash cost of coal sold per ton1, as weak demand trends continued and several of our customers chose to buy out a portion of their previously committed volumes.
Three Months Ended | ||||||
March 31, 2020 | March 31, 2019 | |||||
Coal Production | million tons | 1.5 | 1.7 | |||
Coal Sales | million tons | 1.5 | 1.7 | |||
Average Revenue per Ton Sold | per ton | $43.16 | $49.38 | |||
Average Cash Cost of Coal Sold per Ton1 | per ton | $32.41 | $29.71 | |||
Average Cash Margin per Ton Sold1 | per ton | $10.75 | $19.67 | |||
Quarterly Distribution
During the first quarter of 2020, CCR generated net cash provided by operating activities of $16.8 million and distributable cash flow1 of $3.5 million. During the quarter, our net cash provided by operating activities was impacted by lower net income. As previously announced, based on the ongoing uncertainty in the commodity markets driven by COVID-19-related demand decline, the board of directors of our general partner temporarily suspended payment of our cash distribution for all unitholders. As we get better visibility on the impact of COVID-19, the board of directors of the general partner will determine an appropriate level for cash distributions.
2020 Guidance
Given the ongoing uncertainty associated with the COVID-19 pandemic-driven economic slowdown, we are working with our customers to manage their shipments and inventory levels. However, due to the difficulty in forecasting the duration of this economic slowdown, our 2020 guidance remains suspended. Nonetheless, our team remains ready and is looking forward to eventual demand recovery.
First Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., during which management will discuss the first quarter 2020 financial and operational results, is scheduled for May 11, 2020 at 11:00 AM eastern time. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.ccrlp.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.ccrlp.com for additional information regarding the Partnership. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the Partnership from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange Commission (SEC), reporting our results for the quarter ended March 31, 2020. Investors seeking our detailed financial statements can refer to the Form 10-Q once it has been filed with the SEC.
Footnotes:
1 "adjusted EBITDA", "distributable cash flow", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures."
About CONSOL Coal Resources LP
CONSOL Coal Resources LP (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
Reconciliation of Non-GAAP Financial Measures
We evaluate our cost of coal sold and cash cost of coal sold on an aggregate basis. We define cost of coal sold as operating and other production costs related to produced tons sold, along with changes in coal inventory, both in volumes and carrying values. The cost of coal sold per ton includes items such as direct operating costs, royalty and production taxes, direct administration, 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 and cash cost of coal sold is total costs. The cash cost of coal sold includes cost of coal sold less depreciation, depletion and amortization cost on production assets.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Total Costs | $ | 67,204 | $ | 70,887 | |||
Freight Expense | (787) | (1,665) | |||||
Selling, General and Administrative Expenses | (4,046) | (4,560) | |||||
Interest Expense, Net | (2,155) | (1,351) | |||||
Other Costs (Non-Production) | (440) | (2,264) | |||||
Depreciation, Depletion and Amortization (Non-Production) | (533) | (577) | |||||
Cost of Coal Sold | $ | 59,243 | $ | 60,470 | |||
Depreciation, Depletion and Amortization (Production) | (11,395) | (10,640) | |||||
Cash Cost of Coal Sold | $ | 47,848 | $ | 49,830 |
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
The following table presents a reconciliation of average cash margin per ton sold to total coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Total Coal Revenue | $ | 63,863 | $ | 83,126 | |||
Operating and Other Costs | 48,288 | 52,094 | |||||
Less: Other Costs (Non-Production) | (440) | (2,264) | |||||
Cash Cost of Coal Sold | 47,848 | 49,830 | |||||
Add: Depreciation, Depletion and Amortization | 11,928 | 11,217 | |||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (533) | (577) | |||||
Cost of Coal Sold | $ | 59,243 | $ | 60,470 | |||
Total Tons Sold | 1,480 | 1,683 | |||||
Average Revenue per Ton Sold | $ | 43.16 | $ | 49.38 | |||
Average Cash Cost of Coal Sold per Ton | 32.41 | 29.71 | |||||
Add: Depreciation, Depletion and Amortization Costs per Ton Sold | 7.63 | 6.21 | |||||
Average Cost of Coal Sold per Ton | 40.04 | 35.92 | |||||
Average Margin per Ton Sold | 3.12 | 13.46 | |||||
Add: Total Depreciation, Depletion and Amortization Costs per Ton Sold | 7.63 | 6.21 | |||||
Average Cash Margin per Ton Sold | $ | 10.75 | $ | 19.67 |
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net Income | $ | 164 | $ | 15,220 | |||
Plus: | |||||||
Interest Expense, Net | 2,155 | 1,351 | |||||
Depreciation, Depletion and Amortization | 11,928 | 11,217 | |||||
Unit-Based Compensation | 159 | 397 | |||||
Adjusted EBITDA | $ | 14,406 | $ | 28,185 | |||
Less: | |||||||
Cash Interest | 2,046 | 1,875 | |||||
Estimated Maintenance Capital Expenditures | 8,872 | 8,981 | |||||
Distributable Cash Flow | $ | 3,488 | $ | 17,329 | |||
Net Cash Provided by Operating Activities | $ | 16,777 | $ | 25,218 | |||
Plus: | |||||||
Interest Expense, Net | 2,155 | 1,351 | |||||
Other, Including Working Capital | (4,526) | 1,616 | |||||
Adjusted EBITDA | $ | 14,406 | $ | 28,185 | |||
Less: | |||||||
Cash Interest | 2,046 | 1,875 | |||||
Estimated Maintenance Capital Expenditures | 8,872 | 8,981 | |||||
Distributable Cash Flow | $ | 3,488 | $ | 17,329 | |||
Minimum Quarterly Distributions | $ | 14,434 | $ | 14,405 | |||
Distribution Coverage Ratio | 0.2 | 1.2 |
We define net leverage ratio as the ratio of net debt to last twelve month earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of the net leverage ratio to net income, the most directly comparable GAAP financial measure on a historical basis for the period indicated (in thousands).
Twelve Months Ended | |||
March 31, 2020 | |||
Net Income | $ | 30,495 | |
Plus: | |||
Interest Expense, Net | 7,408 | ||
Depreciation, Depletion and Amortization | 46,518 | ||
Unit-Based Compensation | 1,171 | ||
Non-Cash Expense, Net of Cash Payments for Legacy Employee Liabilities | 1,174 | ||
Other Adjustments to Net Income | 1,236 | ||
EBITDA Per Affiliated Company Credit Agreement | $ | 88,002 | |
Borrowings under Affiliated Company Credit Agreement | $ | 180,600 | |
Finance Leases and Asset-Backed Financing | 13,987 | ||
Total Debt | 194,587 | ||
Less: | |||
Cash on Hand | 223 | ||
Net Debt Per Affiliated Company Credit Agreement | $ | 194,364 | |
Net Leverage Ratio (Net Debt/EBITDA) | 2.2 |
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 CCR disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.
CONSOL COAL RESOURCES LP EARNINGS SUMMARY (Dollars in thousands) (unaudited) | |||||||||||
For the Three Months Ended, | |||||||||||
March 31, | |||||||||||
2020 | 2019 | Variance | |||||||||
Revenue: | |||||||||||
Coal Revenue | $ | 63,863 | $ | 83,126 | $ | (19,263) | |||||
Freight Revenue | 787 | 1,665 | (878) | ||||||||
Other Income | 2,718 | 1,316 | 1,402 | ||||||||
Total Revenue and Other Income | 67,368 | 86,107 | (18,739) | ||||||||
Cost of Coal Sold: | |||||||||||
Operating Costs | 47,848 | 49,830 | (1,982) | ||||||||
Depreciation, Depletion and Amortization | 11,395 | 10,640 | 755 | ||||||||
Total Cost of Coal Sold | 59,243 | 60,470 | (1,227) | ||||||||
Other Costs: | |||||||||||
Other Costs | 440 | 2,264 | (1,824) | ||||||||
Depreciation, Depletion and Amortization | 533 | 577 | (44) | ||||||||
Total Other Costs | 973 | 2,841 | (1,868) | ||||||||
Freight Expense | 787 | 1,665 | (878) | ||||||||
Selling, General and Administrative Expenses | 4,046 | 4,560 | (514) | ||||||||
Interest Expense | 2,155 | 1,351 | 804 | ||||||||
Total Costs | 67,204 | 70,887 | (3,683) | ||||||||
Net Income | $ | 164 | $ | 15,220 | $ | (15,056) | |||||
Adjusted EBITDA | $ | 14,406 | $ | 28,185 | $ | (13,779) | |||||
Distributable Cash Flow | $ | 3,488 | $ | 17,329 | $ | (13,841) | |||||
Net Income per Limited Partner Unit - Basic | $ | 0.01 | $ | 0.54 | $ | (0.53) | |||||
Net Income per Limited Partner Unit - Diluted | $ | 0.01 | $ | 0.54 | $ | (0.53) |
CONSOL COAL RESOURCES LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
| |||||||
(unaudited) | |||||||
ASSETS | March 31, | December 31, | |||||
Current Assets: | |||||||
Cash | $ | 223 | $ | 543 | |||
Trade Receivables, net of allowance | 28,145 | 32,769 | |||||
Other Receivables | 2,224 | 1,572 | |||||
Inventories | 13,786 | 12,653 | |||||
Prepaid Expenses | 4,371 | 5,746 | |||||
Total Current Assets | 48,749 | 53,283 | |||||
Property, Plant and Equipment: | |||||||
Property, Plant and Equipment | 993,820 | 984,898 | |||||
Less—Accumulated Depreciation, Depletion and Amortization | 582,942 | 571,238 | |||||
Total Property, Plant and Equipment—Net | 410,878 | 413,660 | |||||
Other Assets: | |||||||
Right of Use Asset—Operating Leases | 14,519 | 15,695 | |||||
Other Assets | 13,441 | 13,456 | |||||
Total Other Assets | 27,960 | 29,151 | |||||
TOTAL ASSETS | $ | 487,587 | $ | 496,094 |
LIABILITIES AND PARTNERS' CAPITAL | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 19,172 | $ | 22,805 | |||
Accounts Payable—Related Party | 4,279 | 1,419 | |||||
Current Portion of Long-Term Debt | 8,912 | 5,252 | |||||
Other Accrued Liabilities | 39,584 | 39,455 | |||||
Total Current Liabilities | 71,947 | 68,931 | |||||
Long-Term Debt: | |||||||
Affiliated Company Credit Agreement—Related Party | 180,600 | 180,925 | |||||
Finance Lease Obligations | 5,075 | 1,645 | |||||
Total Long-Term Debt | 185,675 | 182,570 | |||||
Other Liabilities: | |||||||
Pneumoconiosis Benefits | 6,269 | 6,028 | |||||
Workers' Compensation | 3,648 | 3,611 | |||||
Asset Retirement Obligations | 10,968 | 10,801 | |||||
Operating Lease Liability | 10,936 | 11,507 | |||||
Other | 823 | 785 | |||||
Total Other Liabilities | 32,644 | 32,732 | |||||
TOTAL LIABILITIES | 290,266 | 284,233 | |||||
Partners' Capital: | |||||||
Common Units (27,690,251 Units Outstanding at March 31, 2020; 27,632,824 Units Outstanding at December 31, 2019) | 175,032 | 189,367 | |||||
General Partner Interest | 11,671 | 11,915 | |||||
Accumulated Other Comprehensive Income | 10,618 | 10,579 | |||||
Total Partners' Capital | 197,321 | 211,861 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 487,587 | $ | 496,094 |
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., April 24, 2020 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a temporary suspension of quarterly cash distributions to all unitholders due to the ongoing uncertainty in the commodity markets driven by COVID-19 pandemic-related demand decline.
"We are living in very uncertain times and the depth and breadth of demand decline is very unpredictable at this moment," said Jimmy Brock, Chief Executive Office of CONSOL Coal Resources GP, LLC. "Accordingly, we feel it is prudent to conserve cash, boost liquidity and reduce our outstanding debt. The management team has undertaken several actions at operational and corporate levels over the last few months as we seek to manage our balance sheet and liquidity. As we gain better visibility on customer demand during the next quarter, the Board of Directors will determine an appropriate level for cash distributions."
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONSOL Coal Resources LP's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONSOL Coal Resources LP's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONSOL Coal Resources LP, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Cautionary Statements
Certain statements in this press release, including with respect to the expected suspension and potential subsequent reinstatement of the quarterly cash distributions, the amount of quarterly cash distributions and our financial condition and liquidity, are "forward-looking statements" (as defined in Section 21E of the Securities Exchange Act of 1934, as amended). With the exception of historical matters, the matters discussed in this press release are forward-looking statements that involve risks, assumptions 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. 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 CCR 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.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., April 20, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its first quarter earnings release before the market opens on Monday, May 11, 2020. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-888-348-6419 |
Participant international dial in | 1-412-902-4235 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 416-8335 |
Media: | Zach Smith, at (724) 416-8291 |
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SOURCE CONSOL Energy Inc. and CONSOL Coal Resources LP
CANONSBURG, Pa., April 14, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) provided the following operational update today:
Resuming operations at Bailey Mine
On March 30th, we announced the temporary curtailment of production at the Bailey Mine due to two employees testing positive for COVID-19. As of April 13th, the workforce at the Bailey Mine has returned to a normal production schedule. Enhanced sanitization and social distancing measures, along with staggered shifts at the mine will continue to ensure the health and wellness of all personnel on site.
Over the past few weeks, we have taken several steps to ensure the safety and well-being of our employees, their families and our communities, while working to minimize disruptions to operations.
Temporarily idling Enlow Fork Mine
Unfortunately, due to the weakness in coal demand and economic slowdown related to the pandemic, production at the Enlow Fork Mine will be temporarily idled at this time. We will assess and monitor the ever-changing situation in the global marketplace and will evaluate options continuously, as we navigate through the pandemic. As always, we intend to run our operations safely and compliantly, with our production based on market conditions and customer inventories.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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.
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., April 8, 2020 /PRNewswire/ -- During the first quarter of 2020, CONSOL Energy Inc. (NYSE: CEIX) took several steps to reduce its outstanding indebtedness, enhance liquidity and supplement access to capital.
On the liability management front, CEIX repurchased in the open market approximately $43 million of its Second Lien debt that continued to trade at a significant discount to its par value. These repurchases provide a high rate of return and are credit accretive. In aggregate, when coupled with our Term Loan A, Term Loan B and finance lease repayments during the first quarter, we retired more than $50 million in principal with no material change in liquidity from year-end 2019.
On the liquidity enhancement front, we completed multiple transactions during the quarter to provide additional sources of low-cost capital and to improve financial flexibility. First, we closed a sale-leaseback transaction on a set of longwall shields, which provided net cash proceeds of $16.3 million. The interest rate on this transaction is approximately 5.6%. Second, we secured a commitment to provide an additional $20 million of credit for IT infrastructure and other equipment expenditures. Finally, we successfully amended our Accounts Receivable securitization program, extending the maturity to March 2023 from August 2021, while keeping the size of the facility at $100 million.
"Our primary focus is on the safety and well-being of our employees," said Jimmy Brock, President and Chief Executive Officer of CONSOL Energy Inc. "Each day brings new challenges, and our team remains focused on managing for the best outcome for our employees, the company and all stakeholders. I am also pleased with the execution of our Finance team. In such a tough environment, they executed a series of transactions that not only allow us to maintain high levels of liquidity on our balance sheet but also meaningfully reduce our absolute outstanding debt."
CONSOL Energy Inc. and CONSOL Coal Resources LP Guidance Update
The coal markets have been challenging, first due to the previous softened demand from warm winter weather and additionally amidst the ongoing COVID-19 pandemic. We are monitoring the ongoing impacts of this pandemic and taking steps to mitigate the potential risks to us posed by its spread. This is a rapidly evolving situation, and we will continue to monitor developments affecting the coal markets, logistics and end-use demand and will take additional precautions as we believe are warranted. The extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19 and the actions taken to contain it or treat its impact, among others.
Given the ongoing uncertainty, CEIX and CONSOL Coal Resources LP (NYSE: CCR) are each withdrawing their previously announced operational and financial guidance for 2020.
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 ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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.
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., March 30, 2020 /PRNewswire/ -- CONSOL Energy, Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) provided the following update regarding operations at the Bailey Mine and its response to positive COVID-19 cases:
Late last week, we were made aware that two employees at the Bailey Mine tested positive for COVID-19. Both employees are being asked to self-isolate for 14 days. The Pennsylvania Department of Health and the Mine Safety and Health Administration have been notified of the situation, and we are communicating with these agencies to ensure we take the requisite measures for the safety of our employees. The health and safety of our employees is paramount, and we have taken various precautions over the past few weeks to minimize risks.
However, out of an abundance of caution, we have decided to temporarily curtail production at the Bailey Mine for a two-week period. We will perform a precautionary deep cleaning of the facilities while attempting to determine if any other employees were at risk from exposure. We will continue to monitor the issue closely in order to limit potential exposure to other employees, contractors, family members, and the community. Our Enlow Fork Mine, Harvey Mine and central Preparation Plant will continue operations at this time, in order to ensure a stable energy and electricity supply for all Americans.
Media Contact: Zach Smith, 724-416-8291
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SOURCE CONSOL Energy Inc. and CONSOL Coal Resources LP
CANONSBURG, Pa., Jan. 24, 2020 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the related cash distribution to the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on February 14, 2020 to such holders of record at the close of business on February 10, 2020.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONSOL Coal Resources LP's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONSOL Coal Resources LP's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONSOL Coal Resources LP, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Cautionary Statements
Certain statements in this press release, including the expected timing of the distribution and the resulting conversion of subordinated units into common units, 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. 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 CCR 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.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Jan. 10, 2020 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its fourth quarter earnings release before the market opens on Tuesday, February 11, 2020. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-888-348-6419 |
Participant international dial in | 1-412-902-4235 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~698 million reserve tons associated with the Pennsylvania Mining Complex, the company also controls approximately 1.6 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 416-8335 |
Media: | Zach Smith, at (724) 416-8291 |
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SOURCE CONSOL Energy Inc. and CONSOL Coal Resources LP
CANONSBURG, Pa., Nov. 5, 2019 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) (the "Partnership") today reported financial and operating results for the quarter ended September 30, 2019.
Third Quarter 2019 Results Include:
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, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "This strong performance was underscored by our contracted position and the continued desirability of our product, which the equity 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 commodity markets have been challenging. The good news is that we have positioned ourselves to weather this storm. 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."
Sales & Marketing
Our marketing team shipped 1.62 million tons of coal during the third quarter of 2019 at an average revenue per ton of $46.59, compared to 1.56 million tons at an average revenue per ton of $47.21 in the year-ago period. Our coal revenue improved by $1.7 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 the 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 6.75 million ton annual run rate. Additionally, during the second quarter of 2019, one of our longwalls also transitioned to a new lower sulfur region of the reserves with improved mining conditions. We believe the resulting improvement in coal quality should help 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
CCR achieved a record-high third quarter production of 1.62 million tons, which compares to 1.59 million tons in the third quarter of 2018. The slight increase in coal production was due to the impact of one fewer longwall move in third quarter of 2019 versus the prior year period.
During the third quarter of 2019, 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. Total costs during the third quarter were $70.4 million compared to $66.7 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $32.78 compared to $30.88 in the year-ago quarter.
Three Months Ended | ||||||
September 30, 2019 | September 30, 2018 | |||||
Coal Production | thousand tons | 1,623 | 1,593 | |||
Coal Sales | thousand tons | 1,618 | 1,561 | |||
Average Revenue Per Ton | per ton | $46.59 | $47.21 | |||
Average Cash Cost of Coal Sold1 | per ton | $32.78 | $30.88 | |||
Average Cash Margin Per Ton Sold1 | per ton | $13.81 | $16.33 | |||
Quarterly Distribution
During the third quarter of 2019, CCR generated net cash provided by operating activities of $20.4 million and distributable cash flow1 of $9.2 million, yielding a distribution coverage ratio1 of 0.6x. During the quarter, our net cash provided by operating activities was impacted by lower net income offset by an improvement in working capital. Our distribution coverage ratio calculation is based on quarterly estimated maintenance capital expenditures of $8.9 million, while our actual cash maintenance capital expenditures for the third quarter were $11.3 million. Based on our current outlook for the coal markets and a year-to-date distribution coverage ratio1 of 1.0x, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on October 30, 2019, the distribution to all unitholders of the Partnership will be made on November 15, 2019, to such holders of record at the close of business on November 11, 2019.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONSOL Coal Resources LP's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONSOL Coal Resources LP's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONSOL Coal Resources LP, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
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:
Third Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., 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 page of our website, www.ccrlp.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.ccrlp.com for additional information regarding the Partnership. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the company from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange Commission (SEC), reporting our results for the quarter and nine months 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:
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures."
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or average cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources LP (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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, 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. 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.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, 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 | $ | 70,411 | $ | 66,669 | |||
Freight Expense | (900) | (611) | |||||
Selling, General and Administrative Expenses | (2,840) | (3,899) | |||||
Interest Expense, Net | (1,587) | (1,560) | |||||
Other Costs (Non-Production) | (983) | (1,545) | |||||
Depreciation, Depletion and Amortization (Non-Production) | (519) | (542) | |||||
Cost of Coal Sold | $ | 63,582 | $ | 58,512 | |||
Depreciation, Depletion and Amortization (Production) | (10,567) | (10,517) | |||||
Cash Cost of Coal Sold | $ | 53,015 | $ | 47,995 |
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended | |||||||
2019 | 2018 | ||||||
Total Coal Revenue | $ | 75,385 | $ | 73,700 | |||
Operating and Other Costs | 53,998 | 49,540 | |||||
Less: Other Costs (Non-Production) | (983) | (1,545) | |||||
Cash Cost of Coal Sold | 53,015 | 47,995 | |||||
Add: Depreciation, Depletion and Amortization | 11,086 | 11,059 | |||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (519) | (542) | |||||
Cost of Coal Sold | $ | 63,582 | $ | 58,512 | |||
Total Tons Sold | 1,618 | 1,561 | |||||
Average Revenue Per Ton Sold | $ | 46.59 | $ | 47.21 | |||
Average Cash Cost of Coal Sold Per Ton | 32.78 | 30.88 | |||||
Add: 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: Total 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) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Income | $ | 6,970 | $ | 8,645 | $ | 36,577 | $ | 49,978 | |||||||
Plus: | |||||||||||||||
Interest Expense, Net | 1,587 | 1,560 | 4,495 | 5,295 | |||||||||||
Depreciation, Depletion and Amortization | 11,086 | 11,059 | 33,639 | 33,769 | |||||||||||
Unit-Based Compensation | 344 | 503 | 1,082 | 1,370 | |||||||||||
Adjusted EBITDA | $ | 19,987 | $ | 21,767 | $ | 75,793 | $ | 90,412 | |||||||
Less: | |||||||||||||||
Cash Interest | 1,832 | 2,107 | 5,522 | 5,265 | |||||||||||
Estimated Maintenance Capital Expenditures | 8,937 | 8,921 | 26,946 | 26,969 | |||||||||||
Distributable Cash Flow | $ | 9,218 | $ | 10,739 | $ | 43,325 | $ | 58,178 | |||||||
Net Cash Provided by Operating Activities | $ | 20,427 | $ | 16,921 | $ | 67,505 | $ | 95,134 | |||||||
Plus: | |||||||||||||||
Interest Expense, Net | 1,587 | 1,560 | 4,495 | 5,295 | |||||||||||
Other, Including Working Capital | (2,027) | 3,286 | 3,793 | (10,017) | |||||||||||
Adjusted EBITDA | $ | 19,987 | $ | 21,767 | $ | 75,793 | $ | 90,412 | |||||||
Less: | |||||||||||||||
Cash Interest | 1,832 | 2,107 | 5,522 | 5,265 | |||||||||||
Estimated Maintenance Capital Expenditures | 8,937 | 8,921 | 26,946 | 26,969 | |||||||||||
Distributable Cash Flow | $ | 9,218 | $ | 10,739 | $ | 43,325 | $ | 58,178 | |||||||
Minimum Quarterly Distributions | $ | 14,405 | $ | 14,350 | $ | 43,214 | $ | 43,044 | |||||||
Distribution Coverage Ratio | 0.6 | 0.7 | 1.0 | 1.4 |
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of the net leverage ratio to net income, the most directly comparable GAAP financial measure on a historical basis for the period indicated (in thousands).
Twelve Months Ended | |||
September 30, 2019 | |||
Net Income | $ | 53,165 | |
Plus: | |||
Interest Expense, Net | 5,867 | ||
Depreciation, Depletion and Amortization | 44,612 | ||
Unit-Based Compensation | 1,554 | ||
Non-Cash Expense, Net of Cash Payments for Legacy Employee Liabilities | 1,227 | ||
Other Adjustments to Net Income | 2,077 | ||
EBITDA Per Affiliated Company Credit Agreement | $ | 108,502 | |
Borrowings under Affiliated Company Credit Agreement | $ | 181,400 | |
Finance Leases | 6,684 | ||
Total Debt | 188,084 | ||
Less: | |||
Cash on Hand | 10,611 | ||
Net Debt Per Affiliated Company Credit Agreement | $ | 177,473 | |
Net Leverage Ratio (Net Debt/EBITDA) | 1.6 |
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 CCR 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 Coal Resources LP
CANONSBURG, Pa., Oct. 30, 2019 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the related cash distribution to the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on November 15, 2019 to such holders of record at the close of business on November 11, 2019.
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CONSOL Coal Resources LP's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CONSOL Coal Resources LP's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CONSOL Coal Resources LP, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Cautionary Statements
Certain statements in this press release, including the expected timing of the distribution and the resulting conversion of subordinated units into common units, 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. 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 CCR 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.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 9, 2019 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its third quarter earnings release before the market opens on Tuesday, November 5, 2019. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-888-348-6419 |
Participant international dial in | 1-412-902-4235 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~698 million reserve tons associated with the Pennsylvania Mining Complex, the company also controls approximately 1.6 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 416-8335 |
Media: | Zach Smith, at (724) 416-8291 |
View original content:http://www.prnewswire.com/news-releases/consol-energy-and-consol-coal-resources-schedule-third-quarter-2019-earnings-release-and-conference-call-300934273.html
SOURCE CONSOL Energy Inc. and CONSOL Coal Resources LP
CANONSBURG, Pa., Aug. 6, 2019 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter ended June 30, 2019.
Second Quarter 2019 Results Include:
Management Comments
"While commodity markets have been under pressure since the beginning of 2019, I am pleased to announce that the CCR team continues to deliver strong operating and financial performance," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "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 more than 25% compared to the year-ago period, we were less affected due to our contracted portfolio position and solid customer base. On the operational front, we had another robust production quarter providing consistent shipments to our customers. On the financial front, we generated a distribution coverage ratio of 1.2x and continued to provide an attractive distribution yield to our unitholders."
"On the safety front, the 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 continued its strong safety performance with an incident-free quarter."
Sales & Marketing
Our marketing team shipped 1.8 million tons of coal during the second quarter of 2019 at an average revenue per ton of $47.53, compared to 2.0 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 that 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 6.75 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 we could produce 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 PAMC for our shareholders.
Operations Summary
CCR achieved a second quarter production of 1.8 million tons, which compares to 1.9 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 384 thousand tons.
Total costs during the second quarter were $75.3 million compared to $78.7 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $31.07 compared to $26.99 in the year-ago quarter. The impairment to cost per ton was largely driven by lower fixed cost leverage, higher mine maintenance cost and project expense. Since the fourth quarter of 2017, we have seen inflation in the cost of supplies that contain steel and other commodities. However, with steel prices declining, 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 | 1.8 | 1.9 | |||
Coal Sales | million tons | 1.8 | 2.0 | |||
Average Revenue Per Ton | per ton | $47.53 | $47.34 | |||
Average Cash Cost of Coal Sold1 | per ton | $31.07 | $26.99 | |||
Average Cash Margin Per Ton Sold1 | per ton | $16.46 | $20.35 | |||
Quarterly Distribution and End of Subordination Period
During the second quarter of 2019, CCR generated net cash provided by operating activities of $21.9 million and distributable cash flow1 of $16.8 million, yielding a distribution coverage ratio1 of 1.2x. During the quarter, our net cash provided by operating activities was impacted by lower net income and an increase in working capital. Our distribution coverage ratio calculation is based on estimated maintenance capital expenditures of $9.0 million, while our actual cash maintenance capital expenditures for the second quarter were $10.0 million. Based on our current outlook for the coal markets and a year-to-date distribution coverage ratio1 of 1.2x, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on July 25, 2019, the distribution to all unitholders of the Partnership will be made on August 15, 2019, to such holders of record at the close of business on August 8, 2019. We also announced that upon payment of the second-quarter distribution, the financial tests required for conversion of all of the CCR subordinated units, which are owned by CONSOL Energy, Inc., will have been met. Accordingly, the subordinated units will convert into common units on a one-for-one basis effective August 16, 2019, the first business day following the payment of the second-quarter distribution.
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.
Second Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., 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 page of our website, www.ccrlp.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.ccrlp.com for additional information regarding this company. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the company from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange Commission (SEC), reporting our results for the quarter and six months 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:
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures".
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or average cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources LP (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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, 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. 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.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, 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 | $ | 75,260 | $ | 78,681 | |||
Freight Expense | (964) | (4,361) | |||||
Selling, General and Administrative Expenses | (2,953) | (3,341) | |||||
Interest Expense, Net | (1,557) | (1,784) | |||||
Other Costs (Non-Production) | (907) | (4,239) | |||||
Depreciation, Depletion and Amortization (Non-Production) | (509) | (543) | |||||
Cost of Coal Sold | $ | 68,370 | $ | 64,413 | |||
Depreciation, Depletion and Amortization (Production) | (10,827) | (11,353) | |||||
Cash Cost of Coal Sold | $ | 57,543 | $ | 53,060 |
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal per ton sold. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Total Coal Revenue | $ | 87,655 | $ | 92,674 | |||
Operating and Other Costs | 58,450 | 57,299 | |||||
Less: Other Costs (Non-Production) | (907) | (4,239) | |||||
Cash Cost of Coal Sold | 57,543 | 53,060 | |||||
Add: Depreciation, Depletion and Amortization | 11,336 | 11,896 | |||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (509) | (543) | |||||
Cost of Coal Sold | $ | 68,370 | $ | 64,413 | |||
Total Tons Sold | 1,844 | 1,958 | |||||
Average Revenue Per Ton Sold | $ | 47.53 | $ | 47.34 | |||
Average Cash Cost Per Ton Sold | 31.07 | 26.99 | |||||
Add: 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: Total 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) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Net Income | $ | 14,387 | $ | 19,376 | |||
Plus: | |||||||
Interest Expense | 1,557 | 1,784 | |||||
Depreciation, Depletion and Amortization | 11,336 | 11,896 | |||||
Unit-Based Compensation | 341 | 508 | |||||
Adjusted EBITDA | $ | 27,621 | $ | 33,564 | |||
Less: | |||||||
Cash Interest | 1,815 | 2,130 | |||||
Estimated Maintenance Capital Expenditures | 9,028 | 9,085 | |||||
Distributable Cash Flow | $ | 16,778 | $ | 22,349 | |||
Net Cash Provided by Operating Activities | $ | 21,860 | $ | 48,949 | |||
Plus: | |||||||
Interest Expense | 1,557 | 1,784 | |||||
Other, Including Working Capital | 4,204 | (17,169) | |||||
Adjusted EBITDA | $ | 27,621 | $ | 33,564 | |||
Less: | |||||||
Cash Interest | 1,815 | 2,130 | |||||
Estimated Maintenance Capital Expenditures | 9,028 | 9,085 | |||||
Distributable Cash Flow | $ | 16,778 | $ | 22,349 | |||
Distributions | $ | 14,404 | $ | 14,348 | |||
Distribution Coverage | 1.2 | 1.6 |
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of the net leverage ratio to net income, the most directly comparable GAAP financial measure on a historical basis for the period indicated (in thousands).
Twelve Months Ended | |||
June 30, 2019 | |||
Net Income | $ | 54,840 | |
Plus: | |||
Interest Expense, Net | 5,840 | ||
Depreciation, Depletion and Amortization | 44,585 | ||
Unit-Based Compensation | 1,713 | ||
Non-Cash Expense, Net of Cash Payments for Legacy Employee Liabilities | 1,385 | ||
Other Adjustments to Net Income | 1,984 | ||
EBITDA Per Affiliated Company Credit Agreement | $ | 110,347 | |
Borrowings under Affiliated Company Credit Agreement | $ | 165,000 | |
Finance Leases | 6,691 | ||
Total Debt | 171,691 | ||
Less: | |||
Cash on Hand | 460 | ||
Net Debt Per Affiliated Company Credit Agreement | $ | 171,231 | |
Net Leverage Ratio (Net Debt/EBITDA) | 1.6 |
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 CCR 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 Coal Resources LP
CANONSBURG, Pa., July 25, 2019 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the related cash distribution to the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on August 15, 2019 to such holders of record at the close of business on August 8, 2019.
Upon payment of the second-quarter distribution, the financial tests required for conversion of all of the CCR subordinated units, which are owned by CONSOL Energy, Inc., will have been met. Accordingly, the subordinated units will convert into common units on a one-for-one basis effective Aug. 16, 2019, the first business day following the payment of the second-quarter distribution.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Cautionary Statements
Certain statements in this press release, including the expected timing of the distribution and the resulting conversion of subordinated units into common units, 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. 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 CCR 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.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., July 8, 2019 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its second quarter earnings release before the market opens on Tuesday, Aug 6, 2019. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) 1-888-348-6419
Participant international dial in 1-412-902-4235
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~698 million reserve tons associated with the Pennsylvania Mining Complex, the company also controls approximately 1.6 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 416-8335 |
Media: | Zach Smith, at (724) 416-8291 |
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SOURCE CONSOL Energy Inc.
CANONSBURG, Pa., May 8, 2019 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter ended March 31, 2019.
First Quarter 2019 Results
Highlights of the CCR first quarter 2019 results include:
Management Comments
"After a very strong finish to 2018, I am pleased to report that the CCR team continues to perform consistently well despite the fluctuations we've seen in the commodity markets we serve," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "We continue to deliver consistent distribution levels to our unitholders while reducing risk through prudent balance sheet management. This quarter, we not only reduced our net leverage ratio, but with the support of our sponsor, we extended the maturity date of our Affiliated Company Credit Agreement through 2024. This extension provides us continued access to low-cost liquidity, which is becoming scarce in the master limited partnership space for companies of our size.
On the safety front, the PAMC employees improved their safety performance by 70% compared to the same period in 2018. The central preparation plant continued its strong safety performance with an incident-free quarter."
Sales & Marketing
Our marketing team sold 1.7 million tons of coal during the first quarter of 2019 at an average revenue per ton of $49.38, compared to 1.7 million tons at an average revenue per ton of $52.98 in the year-ago period. The average revenue per ton was impacted by a reduction in revenues on our netback contracts due to lower PJM West power prices and volumes, partially offset by improvements in our domestic non-netback and export revenues. During the first quarter, average PJM West power prices declined approximately 33% compared to the year-ago period, but our average revenue per ton across the portfolio was only impacted by approximately 7%. This highlights the importance of our well-diversified contract portfolio, thoughtful contracting strategy, and guidance process that already included weaker PJM forward prices compared to the prior year. This also showcases the strength of our marketing process in continuing to high-grade our contract portfolio over time, enabling us to deliver a more stable and consistent earnings profile even in volatile commodity price environments.
On the domestic front, despite a decline in weather-driven heating demand, our domestic customer base and contracted position remained solid, as customers focused on rebuilding their very low inventories. According to the Energy Information Administration, coal inventories at domestic power plants stood at approximately 99 million tons at the end of February, representing a drawdown of more than 18% from year-ago levels and the lowest levels since 2005. We believe that inventories at several of our key customers' Northern Appalachian (NAPP) rail-served power plants have increased slightly to around 30 days of burn compared to 20 days in the second half of 2018, which remain near the lower end of what we estimate is a typical target of 30-45 days. According to industry estimates, Appalachian E&P capital budgets for 2019 are about 14% below 2018 levels, and rising demand should create near-term downside protection in natural gas prices during the refill season. As gas production growth abates and headwinds continue to surround the construction of the Atlantic Coast and Mountain Valley pipelines, we believe there could be a positive surprise in gas prices that could play out into the power markets as we head towards peak summer and winter demand periods.
Internationally, thermal coal prices have come under pressure since the beginning of 2019 due to pullback in global LNG prices and other factors such as weak weather-related demand in Japan and Korea and softening demand in Europe due in part to an influx of Russian coal. We are already beginning to see an export supply response from several countries that should help to stabilize API2 and Newcastle prices. We believe the recent market behavior is consistent with normal cycle trends exacerbated by transient items. We believe longer-term coal pricing will be driven by continued growth of coal-fired generation capacity build out in Asia, limited investments in coal supply, and tightening supply-demand fundamentals for LNG in 2021. According to our analysis of data from IHS Markit, approximately 111 GW of new coal-fired capacity is under construction globally for commissioning between 2019-2024. Furthermore, an additional 300 GW of new coal-fired capacity is in the planning stages. We believe this bodes well for seaborne thermal coal demand, particularly for high-Btu NAPP coal.
Meanwhile, in the near term through 2020, our export shipment volumes and price are supported by the export deal we signed in early 2018. As mentioned in previous earnings releases, our export contract has firm volume with firm pricing commitments through June 2019 and firm volume with collared pricing (average floor above $45.52 per ton) from July 2019 to June 2020. Accordingly, this contract serves as a bridge that allows us to weather the volatility of temporary pricing dislocations in seaborne thermal coal markets.
Export Contract Extended Through 2020
Recently, we amended our previously disclosed export contract, extending it from July 1, 2020 through December 31, 2020. This adds an additional 0.91 million tons to 2020, taking our contracted position to 71% and protecting CCR from the downward pressure that has been experienced in the API2 market while allowing for participation in potential upside as well. The collar levels are consistent with the original contract, and we anticipate the tons to breakout as 68% thermal and 32% crossover metallurgical coal.
CCR is currently 95%+ contracted for 2019, 71% contracted for 2020, and 31% contracted for 2021 assuming annual production of 6.75 million tons. We are currently in active negotiations with both domestic and international customers, and we expect to achieve our targeted contracted position for 2020 before the end of this year.
Operations Summary
CCR achieved a first quarter production of 1.7 million tons, which compares to 1.7 million tons in the first quarter of 2018. During the quarter, coal production increased slightly due to increased production at the Enlow Fork mine, as geological conditions improved compared to the same period in 2018, and at the Harvey mine. This was partially offset by reduced production at the Bailey mine, resulting from a longwall move and other operational delays.
Total costs during the first quarter were $70.9 million compared to $72.5 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $29.71compared to $29.21 in the year-ago quarter. The impairment was largely driven by an increase in project expenses and gas well plugging activities, partially offset by reduced lease/rental expense. Since the fourth quarter of 2017, we have seen modest inflation in the cost of supplies that contain steel and other commodities for which prices are strengthening, as well as in the cost of contract labor. We have been successful in managing these cost pressures and keeping our overall cost increase under our targeted 5% annual limit through productivity gains and automation, as we have discussed in previous earnings calls. Total coal revenue during the first quarter was $83.1 million compared to $87.8 million in the year-ago quarter. Average cash margin per ton sold1 for the first quarter of 2019 decreased by $4.10, or 17%, to $19.67 per ton compared to the year-ago period, driven by lower average revenue per ton due to lower revenue from our netback contracts and slightly higher operating costs.
Three Months Ended | ||||||
March 31, 2019 | March 31, 2018 | |||||
Coal Production | million tons | 1.7 | 1.7 | |||
Coal Sales | million tons | 1.7 | 1.7 | |||
Average Revenue Per Ton | per ton | $49.38 | $52.98 | |||
Average Cash Cost of Coal Sold1 | per ton | $29.71 | $29.21 | |||
Average Cash Margin Per Ton Sold1 | per ton | $19.67 | $23.77 | |||
Quarterly Distribution
During the first quarter of 2019, CCR generated net cash provided by operating activities of $25.2 million and distributable cash flow1 of $17.3 million, yielding a distribution coverage ratio1 of 1.2x. During the quarter, our net cash provided by operating activities was impacted by lower net income and an increase in working capital. Our distribution coverage ratio calculation is based on estimated maintenance capital expenditures of $9.0 million, while our actual cash maintenance capital expenditures for the first quarter were $8.1 million. Based on our current outlook for the coal markets and a year-to-date distribution coverage ratio1 of 1.2x, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on April 25, 2019, the distribution to all unitholders of the Partnership will be made on May 15, 2019, to such holders of record at the close of business on May 7, 2019.
2019 Guidance and Outlook
Based on our year-to-date results, current contracted position, estimated prices and production plans, we are maintaining our financial and operating performance guidance for 2019.
First Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., during which management will discuss the first quarter 2019 financial and operational results, is scheduled for May 8, 2019 at 11:00 AM ET. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.ccrlp.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.ccrlp.com for additional information regarding this company. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the company from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange Commission (SEC), reporting our results for the quarter ended March 31, 2019. Investors seeking our detailed financial statements can refer to the Form 10-Q once it has been filed with the SEC.
Footnotes:
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "total cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures".
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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, 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. 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.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Total Costs | $ | 70,887 | $ | 72,544 | |||||||||||
Freight Expense | (1,665) | (4,472) | |||||||||||||
Selling, General and Administrative Expenses | (4,560) | (3,020) | |||||||||||||
Interest Expense, Net | (1,351) | (1,951) | |||||||||||||
Other Costs (Non-Production) | (2,264) | (4,026) | |||||||||||||
Depreciation, Depletion and Amortization (Non-Production) | (577) | (540) | |||||||||||||
Cost of Coal Sold | $ | 60,470 | $ | 58,535 | |||||||||||
Depreciation, Depletion and Amortization (Production) | (10,640) | (10,274) | |||||||||||||
Cash Cost of Coal Sold | $ | 49,830 | $ | 48,261 |
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Total Coal Revenue | $ | 83,126 | $ | 87,752 | |||
Operating and Other Costs | 52,094 | 52,287 | |||||
Less: Other Costs (Non-Production) | (2,264) | (4,026) | |||||
Cash Cost of Coal Sold | 49,830 | 48,261 | |||||
Add: Depreciation, Depletion and Amortization | 11,217 | 10,814 | |||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (577) | (540) | |||||
Cost of Coal Sold | $ | 60,470 | $ | 58,535 | |||
Total Tons Sold | 1,683 | 1,656 | |||||
Average Revenue Per Ton Sold | $ | 49.38 | $ | 52.98 | |||
Average Cash Cost Per Ton Sold | 29.71 | 29.21 | |||||
Add: Depreciation, Depletion and Amortization Costs Per Ton Sold | 6.21 | 6.13 | |||||
Average Cost Per Ton Sold | 35.92 | 35.34 | |||||
Average Margin Per Ton Sold | 13.46 | 17.64 | |||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold | 6.21 | 6.13 | |||||
Average Cash Margin Per Ton Sold | $ | 19.67 | $ | 23.77 |
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended | |||||||
2019 | 2018 | ||||||
Net Income | $ | 15,220 | $ | 21,957 | |||
Plus: | |||||||
Interest Expense | 1,351 | 1,951 | |||||
Depreciation, Depletion and Amortization | 11,217 | 10,814 | |||||
Unit-Based Compensation | 397 | 359 | |||||
Adjusted EBITDA | $ | 28,185 | $ | 35,081 | |||
Less: | |||||||
Cash Interest | 1,875 | 828 | |||||
Estimated Maintenance Capital Expenditures | 8,981 | 8,963 | |||||
Distributable Cash Flow | $ | 17,329 | $ | 25,290 | |||
Net Cash Provided by Operating Activities | $ | 25,218 | $ | 29,264 | |||
Plus: | |||||||
Interest Expense | 1,351 | 1,951 | |||||
Other, Including Working Capital | 1,616 | 3,866 | |||||
Adjusted EBITDA | $ | 28,185 | $ | 35,081 | |||
Less: | |||||||
Cash Interest | 1,875 | 828 | |||||
Estimated Maintenance Capital Expenditures | 8,981 | 8,963 | |||||
Distributable Cash Flow | $ | 17,329 | $ | 25,290 | |||
Distributions | $ | 14,405 | $ | 14,346 | |||
Distribution Coverage | 1.2 | 1.8 |
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of the net leverage ratio to net income (in thousands).
Twelve Months Ended | |||
March 31, 2019 | |||
Net Income | $ | 59,829 | |
Plus: | |||
Interest Expense, Net | 6,067 | ||
Depreciation, Depletion and Amortization | 45,145 | ||
Unit-Based Compensation | 1,880 | ||
Cash Payments for Legacy Employee Liabilities, Net of Non-Cash Expense | 1,466 | ||
Other Adjustments to Net Income | 1,811 | ||
EBITDA Per Affiliated Company Credit Agreement | $ | 116,198 | |
Borrowings under Affiliated Company Credit Agreement | $ | 161,500 | |
Finance Leases | 7,643 | ||
Total Debt | 169,143 | ||
Less: | |||
Cash on Hand | 405 | ||
Net Debt Per Affiliated Company Credit Agreement | $ | 168,738 | |
Net Leverage Ratio (Net Debt/EBITDA) | 1.5 |
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 CCR 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 Coal Resources LP
CANONSBURG, Pa., April 26, 2019 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on May 15, 2019 to such holders of record at the close of business on May 7, 2019.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., April 10, 2019 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its first quarter earnings release before the market opens on Wednesday, May 8, 2019. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-888-348-6419 |
Participant international dial in | 1-412-902-4235 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~698 million reserve tons associated with the Pennsylvania Mining Complex, the company also controls approximately 1.6 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 416-8335 |
Media: | Zach Smith, at (724) 416-8291 |
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SOURCE CONSOL Energy Inc. and CONSOL Coal Resources LP
CANONSBURG, Pa., March 29, 2019 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) announced today that it successfully completed an amendment of its Revolving Credit Facilities (RCF), Term Loan A (TLA) and Term Loan B (TLB). The amendment will lower CEIX's cost of capital through improved interest rates, improve financial and operational flexibility through various covenant changes, enhance liquidity through a $100 million increase in revolving credit borrowing capacity and extend maturities.
"Since becoming a new public company in November 2017, we have reduced our debt by approximately $158 million and re-positioned our balance sheet to help withstand any cyclicality of our business and take advantage of any possible growth opportunities," said David Khani, Executive Vice President and Chief Financial Officer of CONSOL Energy Inc. "We believe that the combination of this refinancing, our $110 million sweep payment on TLB made in February and $7 million of second lien debt repurchase in January will result in an overall reduction of annualized interest expense by approximately $15 million. We believe that the amendment improved our access to capital with a broader bank group, increased our revolving credit borrowing capacity by an additional $100 million and extended maturities of all our first lien debt. We believe that we have achieved significant operational and financial flexibility to more efficiently utilize our balance sheet for value-enhancing transactions for our shareholders. I thank all our banking partners, stakeholders, and investors for their continued support and confidence in our strategy."
Some of the major highlights from the amendment include:
CONSOL Coal Resources LP (NYSE: CCR), which is an affiliate of CEIX, also completed an amendment to its affiliated credit facility with CEIX to extend the maturity date under that agreement to 2024.
PNC Capital Markets LLC acted as lead arranger for the RCF and TLA transaction.
Citi and Credit Suisse acted as lead arrangers for the TLB transaction.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE: CEIX) is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~698 million reserve tons associated with the Pennsylvania Mining Complex, the company also controls approximately 1.6 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States. Additional information regarding CONSOL Energy may be found at www.consolenergy.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
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.
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SOURCE CONSOL Energy Inc.
CANONSBURG, Pa., Feb. 7, 2019 /PRNewswire/ -- Today CONSOL Coal Resources LP (NYSE: CCR) reported financial and operating results for the quarter and year ended December 31, 2018.
Fourth Quarter 2018 Results
Highlights of the CCR fourth quarter 2018 results include:
Management Comments
"I am extremely proud to announce our 2018 fourth quarter results, as it was another strong quarter to cap-off a year of many achievements," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC (the "general partner"). "The quarter marked a milestone for CCR, as we completed our first calendar year under our new coal-focused parent. In 2018, we produced and sold more coal than in any other year throughout the PAMC's 35-year history. I am also pleased to announce that we have made significant improvement during 2018 on the safety front as well. Our total recordable incident rate for full year 2018 has improved by 13.5% and our total number of exceptions improved by 12.1% compared to the same period last year. We continue to remain laser-focused on having zero life-altering injuries."
"Over the past year, we generated a strong distribution coverage of 1.3x and reduced leverage on our balance sheet by 0.6x to 1.4x. While investors across the MLP space are questioning the sustainability of distributions due to levered balance sheets of various publicly-traded partnerships, we believe that CCR is well-positioned given its strong coverage ratio and balance sheet. Looking forward to 2019, we expect to continue running our mines at or around record-levels, maintaining sufficient distribution coverage, and opportunistically considering growth and efficiency improvement opportunities."
Sales and Marketing
Our Sales and Marketing team sold 1.7 million tons of coal during the fourth quarter of 2018 at an average revenue per ton of $49.81, compared to 1.6 million tons at an average revenue per ton of $46.36 in the year-ago period. This brings our full-year (FY) 2018 sales to 6.9 million tons, which is at the high-end of our guidance range. It also represents a record sales volume year for CCR and its third consecutive year of sales volume growth. This growth was achieved due to improved demand for our products, as well as our ability to ramp up production and capture that demand improvement. The average revenue per ton for the fourth quarter benefited from stronger pricing on our export sales and domestic netback contracts compared to the year-ago period.
During the quarter, our domestic customers demonstrated a strong demand for coal, driven by higher natural gas prices and depleted coal inventories following stronger than forecasted burn throughout the year. According to the U.S. Energy Information Administration (EIA), total coal inventories at domestic power plants stood at approximately 104 million tons at the end of November 2018, down by approximately 27% from the same period a year ago, and the lowest end-of-November total inventory tonnage level since 1997. Furthermore, we believe that inventories at several of our key customers' Northern Appalachian rail-served power plants are below normal, and absent any meaningful weather-related demand decline, we expect to ship all we can produce during 2019 as our customers will continue to seek additional coal to replenish their depleted stockpiles. Taking advantage of this sustained demand, we have contracted greater than 95% in 2019, 53% in 2020 and 28% in 2021, assuming a base annual production rate of 6.75 million tons. This contracted position includes a mix of sales to our top domestic customers and to the thermal and metallurgical export markets, maintaining our diversified market exposure. With our solid 2019 contracted position, our primary focus is now on maximizing margins for any remaining 2019 sales and continuing to build on our contract portfolio.
Internationally, coal price volatility increased significantly during the quarter with API 2 prompt-month prices fluctuating between $86 per ton and $102 per ton. Overall, API 2 prompt-month prices declined by approximately 13% during the fourth quarter of 2018, driven by rising global trade tensions and a general decline in energy-related commodities. However, we have not seen and do not expect to see any slowdown in near-term export demand for our product. Furthermore, we are currently shipping our coal under a previously disclosed priced contract which insulates us from the ongoing volatility in export pricing as well. There continues to be a significant arbitrage opportunity between coal, natural gas, and oil prices on a delivered mmBtu basis in many key global markets. We believe that with limited coal supply growth throughout the world, we will continue to have an increasing role in the coal export markets.
Operations Summary
CCR achieved record production of 6.9 million tons in 2018, eclipsing the previous record of 6.5 million tons set in 2017 and marking the third consecutive year of production growth. During 2018, the PAMC ran at approximately 97% capacity utilization, highlighting the desirability of our product. Additionally, our Bailey and Harvey mines each set individual production records during the year. Bailey's 3.2 million tons surpasses its previous record set in 2014, while Harvey's 1.2 million tons exceeds its previous record set in 2017. PAMC production for the full year benefited from strong demand for our products in the domestic and export markets, improving productivity, initial benefits from automation projects, and improving geological conditions at the Enlow Fork mine.
CCR shipped 1.7 million tons of coal during the fourth quarter of 2018, compared to 1.6 million tons in the year-ago quarter. The improvement in coal sales volume was driven by strong production and continued robust demand from our customers. Total coal revenue increased by $14.9 million to $86.9 million, primarily driven by a $3.45 higher average revenue per ton sold. Our average revenue per ton increased to $49.81 from $46.36 in the year-ago quarter, due to stronger pricing on our export sales and domestic netback contracts.
Our total costs during the fourth quarter were $72.7 million compared to $67.5 million in the year-ago period. Average cash cost of coal sold per ton1 for the fourth quarter was $30.54 compared to $27.30 in the year-ago quarter. The increase was due to reduced subsidence expense and lower mine maintenance spending in the prior period. For FY 2018, our total costs were $290.6 million compared to $282.3 million in the prior year. 2018 average cash cost of coal sold per ton was $29.29 compared to $29.02 for FY 2017, an increase of less than 1%. Average cash margin per ton sold1 for the fourth quarter of 2018 expanded by $0.21, to $19.27 per ton compared to the year-ago period, driven by higher average revenue per ton, offset by higher average cash cost of coal sold per ton.
Three Months Ended | ||||
December 31, 2018 | December 31, 2017 | |||
Coal Production | million tons | 1.7 | 1.6 | |
Coal Sales | million tons | 1.7 | 1.6 | |
Average Revenue Per Ton | per ton | $49.81 | $46.36 | |
Average Cash Cost of Coal Sold1 | per ton | $30.54 | $27.30 | |
Average Cash Margin Per Ton Sold1 | per ton | $19.27 | $19.06 |
Quarterly Distribution
During the fourth quarter of 2018, CCR generated net cash provided by operating activities of $30.2 million and distributable cash flow1 of $18.5 million, yielding a distribution coverage ratio of 1.3x1. Based on our strong distribution coverage ratio during the quarter, revenue visibility in 2019, and current outlook for the coal markets, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on January 25, 2019, the distribution to all unitholders of the Partnership will be made on February 15, 2019, to such holders of record at the close of business on February 7, 2019.
2019 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 2019.
Fourth Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the fourth quarter of 2018 financial and operational results, is scheduled for February 7, 2019 at 11:00 AM Eastern Time. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.ccrlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-877-870-4263
Participant international dial in 1-412-317-0790
Availability of Additional Information
Please refer to our website www.ccrlp.com for additional information regarding this company. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the company from time to time on our website.
We will also file our Form 10-K with the Securities and Exchange Commission (SEC), reporting our results for the fiscal year ended December 31, 2018. 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", "distribution coverage ratio", "distributable cash flow", "cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures under the caption "Reconciliation of Non-GAAP Financial Measures". |
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items. |
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy, Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 416-8335
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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. 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.
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
We define adjusted EBITDA as (i) net income (loss) before net interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income (loss).
We define distributable cash flow as (i) net income (loss) before net interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income (loss) and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
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 cost of coal sold and cash cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended | Years Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total Costs | $ | 72,715 | $ | 67,458 | $ | 290,609 | $ | 282,320 | |||||||
Freight Expense | (1,449) | (5,461) | (10,893) | (18,423) | |||||||||||
Selling, General and Administrative Expenses | (3,671) | (4,479) | (13,931) | (15,697) | |||||||||||
Loss on Extinguishment of Debt | — | (2,468) | — | (2,468) | |||||||||||
Interest Expense, Net | (1,372) | (2,052) | (6,667) | (9,309) | |||||||||||
Other Costs (Non-Production) | (1,724) | (322) | (11,534) | (5,714) | |||||||||||
Depreciation, Depletion and Amortization (Non-Production) | (541) | (543) | (2,166) | (2,187) | |||||||||||
Cost of Coal Sold | $ | 63,958 | $ | 52,133 | $ | 245,418 | $ | 228,522 | |||||||
Depreciation, Depletion and Amortization (Production) | (10,432) | (9,744) | (42,576) | (39,250) | |||||||||||
Cash Cost of Coal Sold | $ | 53,526 | $ | 42,389 | $ | 202,842 | $ | 189,272 |
The following table presents a reconciliation of average cash margin per ton 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 | Years Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total Coal Revenue | $ | 86,947 | $ | 72,063 | $ | 341,073 | $ | 296,913 | |||||||
Operating and Other Costs | 55,250 | 42,711 | 214,376 | 194,986 | |||||||||||
Less: Other Costs (Non-Production) | (1,724) | (322) | (11,534) | (5,714) | |||||||||||
Cash Cost of Coal Sold | 53,526 | 42,389 | 202,842 | 189,272 | |||||||||||
Add: Depreciation, Depletion and Amortization | 10,973 | 10,287 | 44,742 | 41,437 | |||||||||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (541) | (543) | (2,166) | (2,187) | |||||||||||
Cost of Coal Sold | $ | 63,958 | $ | 52,133 | $ | 245,418 | $ | 228,522 | |||||||
Total Tons Sold | 1,746 | 1,555 | 6,920 | 6,523 | |||||||||||
Average Revenue per Ton Sold | $ | 49.81 | $ | 46.36 | $ | 49.28 | $ | 45.52 | |||||||
Average Cash Cost per Ton Sold | 30.54 | 27.30 | 29.29 | 29.02 | |||||||||||
Add: Depreciation, Depletion and Amortization Costs per Ton Sold | 6.10 | 6.24 | 6.17 | 6.01 | |||||||||||
Average Cost per Ton Sold | 36.64 | 33.54 | 35.46 | 35.03 | |||||||||||
Average Margin per Ton Sold | 13.17 | 12.82 | 13.82 | 10.49 | |||||||||||
Add: Depreciation, Depletion and Amortization Costs per Ton Sold | 6.10 | 6.24 | 6.17 | 6.01 | |||||||||||
Average Cash Margin per Ton Sold | $ | 19.27 | $ | 19.06 | $ | 19.99 | $ | 16.50 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended December 31, 2018 | Three Months Ended | ||||||
Net Income | $ | 16,588 | $ | 11,310 | |||
Plus: | |||||||
Interest Expense, Net | 1,372 | 2,052 | |||||
Loss on Extinguishment of Debt | — | 2,468 | |||||
Depreciation, Depletion and Amortization | 10,973 | 10,287 | |||||
Unit-Based Compensation | 472 | 2,082 | |||||
Adjusted EBITDA | $ | 29,405 | $ | 28,199 | |||
Less: | |||||||
Cash Interest | 1,952 | 1,562 | |||||
Estimated Maintenance Capital Expenditures | 8,980 | 8,906 | |||||
Distributable Cash Flow | $ | 18,473 | $ | 17,731 | |||
Net Cash Provided by Operating Activities | $ | 30,245 | $ | 11,859 | |||
Plus: | |||||||
Interest Expense | 1,372 | 2,052 | |||||
Other, Including Working Capital | (2,212) | 14,288 | |||||
Adjusted EBITDA | $ | 29,405 | $ | 28,199 | |||
Less: | |||||||
Cash Interest | 1,952 | 1,562 | |||||
Estimated Maintenance Capital Expenditures | 8,980 | 8,906 | |||||
Distributable Cash Flow | $ | 18,473 | $ | 17,731 | |||
Distributions | $ | 14,348 | $ | 14,298 | |||
Distribution Coverage | 1.3 | 1.2 |
The following table presents a reconciliation of net leverage ratio to net income (in thousands, except per ton information).
Twelve Months Ended | ||
December 31, 2018 | ||
Net Income | $ | 66,566 |
Plus: | ||
Interest Expense, Net | 6,667 | |
Depreciation, Depletion and Amortization | 44,742 | |
Unit-Based Compensation | 1,842 | |
Cash Payments for Legacy Employee Liabilities, Net of Non-Cash Expense | 1,519 | |
Other Adjustments to Net Income | 1,508 | |
EBITDA per Affiliated Company Credit Agreement | $ | 122,844 |
Borrowings Under Affiliated Company Credit Agreement | $ | 163,000 |
Capitalized Leases | 8,570 | |
Total Debt | 171,570 | |
Less: | ||
Cash on Hand | 1,003 | |
Net Debt Per Affiliated Company Credit Agreement | $ | 170,567 |
Net Leverage Ratio (Net Debt/EBITDA) | 1.4 |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Exchange Act) 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 "believe," "continue," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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. These risks, contingencies and uncertainties relate to, among other matters, the following: changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves, acquire additional reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; operating in a single geographic area; interest rates and interest rate hedging transactions; our reliance on a few major customers; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement, employee services agreement and Affiliated Company Credit Agreement; restrictions in our Affiliated Company Credit Agreement that may adversely affect our business; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; adverse effect of cybersecurity threats; failure to achieve and maintain effective internal controls over financial reporting; recent action and the possibility of future action on trade by U.S. and foreign governments; conflicts of interest that may cause our general partner or our sponsor to favor their own interest to our detriment; the requirement that we distribute all of our available cash; and other factors discussed in our Annual Report Form 10-K under "Risk Factors," as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Jan. 25, 2019 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on February 15, 2019 to such holders of record at the close of business on February 7, 2019.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Jan. 11, 2019 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its fourth quarter earnings release before the market opens on Thursday, February 7, 2019. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) 1-877-870-4263
Participant international dial in 1-412-317-0790
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~735 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.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 485-3133 |
Media: | Zach Smith, at (724) 485-4017 |
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Nov. 1, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter ended September 30, 2018.
Third Quarter 2018 Results
Highlights of the CCR third quarter 2018 results include:
Management Comments
"I am pleased to announce that the PAMC delivered the best third quarter production in its history even with an expected and seasonally slow production quarter due to an above average number of planned longwall moves," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC, the general partner of the Partnership. "As a result of the strong operational performance that we have had year-to-date, combined with our expectations of robust production in the fourth quarter and continued strength in coal demand, we are increasing the midpoint of our sales and EBITDA guidance ranges."
"We completed our third year as a publicly-owned master limited partnership in July 2018 and I am pleased with our performance so far and the way we have managed the Partnership through the ups and downs of the commodity cycle. The Partnership is much stronger today than at any point in our history as an independent public company with a resilient balance sheet and sound distribution coverage for our unitholders. As we head into 2019, I remain optimistic about the demand outlook given improving coal prices, low inventory levels of coal at the power producers, low natural gas storage levels and our solid contracted position."
Sales & Marketing
Our marketing team sold 1.6 million tons of coal during the third quarter of 2018 at an average revenue per ton of $47.21 compared to 1.6 million tons at an average revenue per ton of $44.16 in the year-ago period. The average revenue per ton benefited from stronger pricing on our export sales and our domestic netback contracts. More importantly, our marketing team is taking advantage of the improving coal forward curves in the domestic and export markets and contracting new business for the years 2019-2021.
On the domestic front, customer inventories remain below normal. According to the U.S. Energy Information Administration (EIA), total coal inventories at domestic power plants stood at approximately 110 million tons at the end of August 2018, down by approximately 26% from the same period a year ago, the lowest level since March 2006. Furthermore, we believe that inventories at several of our key customers' Northern Appalachian rail-served power plants continue to average around 20 days of burn heading into winter compared to the typical 30-40 days. While domestic coal consumption has declined year-over-year as a result of coal plant retirements and other factors, global demand for coal has grown, driving strong export volumes. In its recently published Short Term Energy Outlook, the EIA expects 2018 U.S. thermal coal exports to increase by 21% to 50.4 million tons from 41.7 million tons in 2017. The EIA also estimates that, during the first three quarters of 2018, coal production in the U.S. has declined by 2.7% compared to the first three quarters of 2017. Rising thermal coal exports and declining production have significantly tightened the domestic market in several basins, including Northern Appalachia.
The EIA also expects U.S. dry natural gas production will average a record 82.7 Bcf/d in 2018, an 11% increase from 2017. However, storage levels remain at a multi-year low heading into winter. This, coupled with rising U.S. power demand, sets up a potentially interesting scenario for power producers to navigate in the coming months. Natural gas storage levels are 20% below year-ago levels and storage levels have not kept pace with the growing gas market. The limited gas storage and pipeline infrastructure in certain areas of the U.S. continues to create the potential for bottlenecks in gas deliverability, similar to those experienced this past winter. Moreover, while renewable generating capacity is growing, lack of consistency and deliverability during peak demand periods continues to preserve the need for baseload generation. As a result of this macro backdrop, utilities are actively procuring coal and showing renewed interest in longer-term contracts.
CCR is currently 90% contracted for 2019 and 44% contracted for 2020, assuming annual production of 6.75 million tons. We presently are in active negotiations with both domestic and international customers, and we expect to achieve our targeted contract position for 2019 before the end of this year.
Internationally, we continue to see improving commodity pricing dynamics. API 2 prompt-month prices improved by approximately 3% during the third quarter 2018 to over $100 per metric ton, driven by a hot, dry summer in Europe which reduced wind and hydro power output. Furthermore, power prices in the major European electricity markets are up by 20-50% year-to-date and wholesale gas prices hit 10-year highs. We also continue to see strong demand from India as its power plant coal stockpiles in August 2018 fell 30% to the lowest level since early December 2017. There remains a large arbitrage between coal, natural gas, and oil prices on an MMBtu basis with rising global demand that we believe should drive thermal coal prices even higher. Meanwhile, a multi-year lack of coal investment continues to put pressure on global coal supply and coal quality, adding support to this expectation. Forward API 2 prices for 2019 improved by approximately 10% during the third quarter 2018 and we have seen improvement in the back end of the coal forward curve relative to the prompt month, reflecting the industry's optimism for sustainable coal fundamentals. We expect that this phenomenon improves our ability to enter into multi-year contracts in the international market.
Operations Summary
CCR achieved third quarter production of 1.6 million tons, which compares to 1.5 million tons in the third quarter of 2017. It was the strongest third quarter production on record for the PAMC. During the quarter, we benefited from increased production at the Enlow Fork mine, as geological conditions improved modestly compared to 2017. This was partially offset by reduced production resulting from three longwall moves at the mining complex (compared to 1-2 moves typically per quarter) and the annual miners' vacation period in July.
CCR shipped 1.6 million tons of coal during the third quarter, compared to 1.6 million tons in the year-ago quarter. Demand from our customers remained robust and the railroads performed well. Total coal revenue for the third quarter improved $3.9 million compared to the year-ago quarter to $73.7 million, primarily driven by a $3.05 higher average sales price per ton sold. Our average revenue per ton increased to $47.21 from $44.16 in the year-ago quarter, as export pricing and domestic netback pricing improved by $11.36 per ton and $1.25 per ton, respectively.
Total costs during the third quarter were $66.7 million compared to $74.7 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $30.88 compared to $30.94 in the year-ago quarter. This improvement was largely driven by a $1.34 per ton reduction in lease/rental expense, partially offset by higher mine maintenance and supply costs. Since the fourth quarter of 2017, we have seen modest inflation in the cost of supplies that contain steel and other strengthening commodities as well as in the cost of contract labor. Year-to-date, we have been able to successfully offset these inflationary pressures through productivity gains, initial benefits from our automation investments and a reduction in lease expense. We continue to keep a close watch on macro-driven cost increases and strive to offset them through productivity gains. Average cash margin per ton sold1 for the third quarter of 2018 expanded by $3.11, or 24%, to $16.33 per ton compared to the year-ago period, driven by higher average revenue per ton and relatively flat operating costs.
Three Months Ended | ||||||
September 30, 2018 | September 30, 2017 | |||||
Coal Production | million tons | 1.6 | 1.5 | |||
Coal Sales | million tons | 1.6 | 1.6 | |||
Average Revenue Per Ton | per ton | $47.21 | $44.16 | |||
Average Cash Cost of Coal Sold1 | per ton | $30.88 | $30.94 | |||
Average Cash Margin Per Ton Sold1 | per ton | $16.33 | $13.22 | |||
Quarterly Distribution
During the third quarter of 2018, CCR generated net cash provided by operating activities of $16.9 million and distributable cash flow1 of $10.7 million, yielding a distribution coverage ratio of 0.7x1. During the quarter, our net cash provided by operating activities was impacted by an increase in working capital of approximately $3.3 million. Our distribution coverage ratio calculation is based on estimated maintenance capital expenditures of $8.9 million, while our actual cash maintenance capital expenditures for the third quarter were $8.1 million. Based on our current outlook for the coal markets and a strong year-to-date distribution coverage ratio of 1.4x1, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on October 25, 2018, the distribution to all unitholders of the Partnership will be made on November 15, 2018, to such holders of record at the close of business on November 8, 2018.
2018 Guidance and Outlook
Based on our strong year-to-date results, robust coal demand and production expectations, we are adjusting several items of our financial and operating performance guidance for 2018.
Third Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., during which management will discuss the third quarter 2018 financial and operational results, is scheduled for November 1, 2018 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 page of our website, www.ccrlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-877-870-4263
Participant international dial in 1-412-317-0790
Availability of Additional Information
Please refer to our website www.ccrlp.com for additional information regarding this company. Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com. In addition, we may provide other information about the company from time to time on our website.
We will also file our Form 10-Q with the Securities and Exchange Commission (SEC), reporting our results for the quarter ended September 30, 2018. Investors seeking our detailed financial statements can refer to the Form 10-Q once it has been filed with the SEC.
Footnotes:
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "total cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures immediately below the caption "Reconciliation of Non-GAAP Financial Measures".
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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, 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. 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.
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue. We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. We define distribution coverage ratio as a ratio of the distributable cash flow to the distributions, which is the $0.5125 per quarter distribution for all limited partner units, including common and subordinated units, issued for the periods presented.
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Total Costs | $ | 66,669 | $ | 74,650 | |||
Freight Expense | (611) | (5,451) | |||||
Selling, General and Administrative Expenses | (3,899) | (4,283) | |||||
Interest Expense | (1,560) | (2,404) | |||||
Other Costs (Non-Production) | (1,545) | (2,965) | |||||
Depreciation, Depletion and Amortization (Non-Production) | (542) | (544) | |||||
Total Cost of Coal Sold | $ | 58,512 | $ | 59,003 | |||
Depreciation, Depletion and Amortization (Production) | (10,517) | (9,808) | |||||
Total Cash Cost of Coal Sold | $ | 47,995 | $ | 49,195 |
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended | |||||||
2018 | 2017 | ||||||
Coal Revenue | $ | 73,700 | $ | 69,811 | |||
Operating and Other Costs | 49,540 | 52,160 | |||||
Less: Other Costs (Non-Production) | (1,545) | (2,965) | |||||
Cash Cost of Coal Sold | 47,995 | 49,195 | |||||
Add: Depreciation, Depletion and Amortization | 11,059 | 10,352 | |||||
Less: Depreciation, Depletion and Amortization (Non-Production) | (542) | (544) | |||||
Cost of Coal Sold | $ | 58,512 | $ | 59,003 | |||
Total Tons Sold | 1,561 | 1,581 | |||||
Average Revenue Per Ton Sold | $ | 47.21 | $ | 44.16 | |||
Average Cash Cost Per Ton Sold | 30.88 | 30.94 | |||||
Add: Depreciation, Depletion and Amortization Per Ton Sold | 6.60 | 6.38 | |||||
Average Cost Per Ton Sold | 37.48 | 37.32 | |||||
Average Margin Per Ton Sold | 9.73 | 6.84 | |||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold | 6.60 | 6.38 | |||||
Average Cash Margin Per Ton Sold | $ | 16.33 | $ | 13.22 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income | $ | 8,645 | $ | 3,614 | $ | 49,978 | $ | 29,154 | |||||||
Plus: | |||||||||||||||
Interest Expense | 1,560 | 2,404 | 5,295 | 7,257 | |||||||||||
Depreciation, Depletion and Amortization | 11,059 | 10,352 | 33,769 | 31,150 | |||||||||||
Unit-Based Compensation | 503 | 2,084 | 1,370 | 3,791 | |||||||||||
Adjusted EBITDA | $ | 21,767 | $ | 18,454 | $ | 90,412 | $ | 71,352 | |||||||
Less: | |||||||||||||||
Cash Interest | 2,107 | 1,962 | 5,265 | 6,662 | |||||||||||
Distributions to Preferred Units3 | — | 1,851 | — | 5,553 | |||||||||||
Estimated Maintenance Capital Expenditures | 8,921 | 8,893 | 26,969 | 26,858 | |||||||||||
Distributable Cash Flow | $ | 10,739 | $ | 5,748 | $ | 58,178 | $ | 32,279 | |||||||
Net Cash Provided by Operating Activities | $ | 16,921 | $ | 20,029 | $ | 95,134 | $ | 60,783 | |||||||
Plus: | |||||||||||||||
Interest Expense | 1,560 | 2,404 | 5,295 | 7,257 | |||||||||||
Other, Including Working Capital | 3,286 | (3,979) | (10,017) | 3,312 | |||||||||||
Adjusted EBITDA | $ | 21,767 | $ | 18,454 | $ | 90,412 | $ | 71,352 | |||||||
Less: | |||||||||||||||
Cash Interest | 2,107 | 1,962 | 5,265 | 6,662 | |||||||||||
Distributions to Preferred Units3 | — | 1,851 | — | 5,553 | |||||||||||
Estimated Maintenance Capital Expenditures | 8,921 | 8,893 | 26,969 | 26,858 | |||||||||||
Distributable Cash Flow | $ | 10,739 | $ | 5,748 | $ | 58,178 | $ | 32,279 | |||||||
Distributions | $ | 14,350 | $ | 12,228 | $ | 43,044 | $ | 36,684 | |||||||
Distribution Coverage | 0.7 | 0.5 | 1.4 | 0.9 | |||||||||||
3Distributions to Preferred Units represents income attributable to preferred units prior to conversion. |
The following table presents a reconciliation of the net leverage ratio to net income (in thousands).
Twelve Months Ended | |||
September 30, 2018 | |||
Net Income | $ | 61,288 | |
Plus: | |||
Interest Expense | 7,347 | ||
Depreciation, Depletion and Amortization | 44,056 | ||
Unit-Based Compensation | 3,452 | ||
Cash Payments for Legacy Employee Liabilities, Net of Non-Cash Expense | 1,508 | ||
Loss on Extinguishment of Debt | 2,468 | ||
Other Adjustments to Net Income | 1,626 | ||
EBITDA Per Affiliated Company Credit Agreement | $ | 121,745 | |
Borrowings under Affiliated Company Credit Agreement | $ | 167,000 | |
Capitalized Leases | 9,458 | ||
Total Debt | 176,458 | ||
Less: | |||
Cash on Hand | 920 | ||
Net Debt Per Affiliated Company Credit Agreement | $ | 175,538 | |
Net Leverage Ratio (Net Debt/EBITDA) | 1.4 |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Exchange Act) 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 "believe," "continue," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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. These risks, contingencies and uncertainties relate to, among other matters, the following: changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves, acquire additional reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; operating in a single geographic area; interest rates; our reliance on a few major customers; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement, employee services agreement and Affiliated Company Credit Agreement; restrictions in our Affiliated Company Credit Agreement that may adversely affect our business; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; adverse effect of cybersecurity threats; conflicts of interest that may cause our general partner or our sponsor to favor their own interests to our detriment; the requirement that we distribute all of our available cash; and other factors discussed in our 2017 Annual Report Form 10-K under "Risk Factors," as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 25, 2018 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on November 15, 2018 to such holders of record at the close of business on November 8, 2018.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Oct. 8, 2018 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CEIX) and CONSOL Coal Resources LP (NYSE: CCR) will each issue its third quarter earnings release before the market opens on Thursday, November 1, 2018. These releases will be followed by a joint conference call hosted by members of the management team at 11:00 a.m. Eastern Time. A live webcast will be accessible on the 'Investor Relations' page of each website, www.consolenergy.com and www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participants may also join the live webcast by telephone as follows.
Participant dial in (toll free) | 1-877-870-4263 | |
Participant international dial in | 1-412-317-0790 |
Participants should ask to be joined into the CONSOL Energy Inc. earnings conference call or the CONSOL Coal Resources LP earnings conference call.
CONSOL Energy Inc. is a Canonsburg-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~735 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.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: | |
Investor: | Mitesh Thakkar, at (724) 485-3133 |
Media: | Zach Smith, at (724) 485-4017 |
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP
CANONSBURG, Pa., Aug. 2, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter ended June 30, 2018.
Second Quarter 2018 Results
Highlights of the CCR second quarter 2018 results include:
Management Comments
"Strong domestic and international demand for our product coupled with outstanding performance at the Pennsylvania Mining Complex (PAMC) allowed us to deliver a record sales and production quarter," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC. "This year is shaping up to be a record year for CCR. While strong coal prices powered our first quarter results, record production and cost performance drove the solid second quarter results. Our second quarter sales volume of 2.0 million tons represented an annual run rate of more than 7.1 million tons for CCR, the highest in the 35+ year history of the PAMC. This was made possible due to the tireless efforts of our employees, well-synchronized logistics with our customers and transportation providers, modest initial benefits from our debottlenecking projects and strong demand for our product. I am also very pleased with the improving safety performance at the PAMC, which resulted in a 9% reduction in employee safety incidents in the first half of 2018 compared to the year-ago period. We continue to target further improvements on the safety front with our goal of zero life-altering incidents."
"The demand outlook for the second half of 2018 remains robust with low coal stockpiles domestically, attractive BTU value of our coal relative to other fuels globally and our ability to capture market share. This confidence in demand and in our execution capabilities, allows us to increase our 2018 guidance for the second consecutive quarter. Given the strong cash generation during the quarter, we further strengthened our balance sheet, and the sustainability of our robust quarterly distribution for our unitholders."
Sales & Marketing
CCR had a record quarter in terms of volume as it sold 2.0 million tons of coal during the second quarter of 2018 at an average revenue per ton of $47.34 compared to 1.7 million tons at an average revenue per ton of $44.75 in the year-ago period. The average revenue per ton benefited from stronger pricing on our export sales and our domestic netback contracts. Our logistics team did an excellent job synchronizing shipments with our logistics partners at the rails and ports to move record volumes through the system.
On the domestic front, customer inventories remain low. According to the Energy Information Administration (EIA), inventories at domestic utilities stood at approximately 128 million tons at the end of May, down by approximately 21% from the same period a year ago. Furthermore, inventories at several of our key customers' Northern Appalachian (NAPP) rail-served power plants continue to average around 20 days. As mines, plants and railroads return from their annual maintenance shutdown period and with summer weather now upon us, CCR expects demand to remain strong. We believe low inventories at domestic utilities coupled with continued strong international pull for our product should bode well as we enter the fall contracting season. CCR is 74% contracted for 2019 and 32% contracted for 2020, assuming a 6.75 million ton annual run rate. We believe, as global coal demand is expected to continue to grow over the next several years, global supply will be challenged to keep pace due to several years of underinvestment and the time required to bring new brownfield or greenfield production online. A major competitive advantage of the PAMC is production sustainability based on its diversified longwalls, capital invested and long-life reserves. We will continue to benefit both domestically and abroad where many coal mines face normal depletion impacts and a lack of investment.
New Market Developments
During the second quarter, CCR entered into a coal supply contract with a domestic coke producer, representing its first multi-shipment deal in the domestic metallurgical coal market since 2013. As previously disclosed, the sulfur levels at the PAMC have begun to decline. The lower sulfur, coupled with high fluidity and low cost, makes our product a better fit in the domestic metallurgical market and improves its competitiveness in the international crossover metallurgical markets as well. In the long term, we believe that this domestic market development will allow us to maximize our revenue potential and expand into the domestic metallurgical coal market. Our other five addressable markets where we are currently present include - export thermal, export industrial, export metallurgical, domestic thermal, and domestic industrial.
CCR was also successful in expanding its sales portfolio by entering into an 18-month agreement with a domestic utility customer in the Midwest. This customer fits well with our domestic strategy of targeting top-performing power plants that are well-positioned to compete with natural gas and grow market share as other coal-fired plants retire.
During the quarter, we successfully completed a contract to remarket PAMC coal to new end-users in China, Europe and Africa. We continue to pursue coal sales in other potential international markets, including Turkey. While there continues to be uncertainty around the relaxation of sulfur restrictions for imported coal in Turkey, we believe the PAMC is well positioned, due to its product quality and cost structure, to enter the Turkish market should the opportunity arise.
Operations Summary
CCR achieved strong second quarter production of 1.9 million tons, which compares to 1.7 million tons in the second quarter of 2017. During the quarter, we benefited from increased production at all three of our mines at the PAMC. Enlow Fork finished off the F27 panel, which was geologically very challenging, and has now transitioned to F28, which we believe will provide some operational relief as we improve our ability to manage these conditions. Our team continues to look forward to mid-2019, when the F side wall at the Enlow Fork mine will move to a different district, which we believe will provide much better mining conditions. Productivity at the PAMC, as measured by tons per employee-hour, improved 14% during the second quarter compared to the year-ago period and reached a level not seen since the first quarter of 2004.
CCR shipped 2.0 million tons of coal during the second quarter, compared to 1.7 million tons in the year-ago quarter. The improvement in coal sales volume was driven by strong production and continued robust demand from our customers. Total coal revenue for the second quarter came in at $92.7 million and improved by $16.7 million compared to the year-ago quarter, primarily driven by $2.59 per ton higher revenue and 261 thousand more tons of coal sold. Our average revenue per ton increased to $47.34 from $44.75 in the year-ago quarter, as pricing improved on our export and domestic netback contracts.
Total costs during the second quarter were $78.7 million compared to $71.0 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $26.99 compared to $29.08 in the year-ago quarter. This improvement was largely driven by a $1.02 per ton reduction in lease/rental expense and a $0.58 per ton improvement from labor productivity as discussed earlier. Average cash margin per ton sold1 for the second quarter of 2018 expanded by $4.68, or 30%, to $20.35 per ton compared to the year-ago period, driven by higher average revenue per ton and lower average cash cost of coal sold per ton.
Other costs increased by $3.3 million compared to the year-ago quarter, due to an increase in discretionary employee benefit expenses and demurrage charges.
Three Months Ended | ||||
June 30, 2018 |
June 30, 2017 | |||
Coal Production |
million tons |
1.9 |
1.7 | |
Coal Sales |
million tons |
2.0 |
1.7 | |
Average Revenue Per Ton |
per ton |
$47.34 |
$44.75 | |
Average Cash Cost of Coal Sold1 |
per ton |
$26.99 |
$29.08 | |
Average Cash Margin Per Ton Sold1 |
per ton |
$20.35 |
$15.67 |
Quarterly Distribution
During the second quarter of 2018, CCR generated net cash provided by operating activities of $48.9 million and distributable cash flow1 of $22.3 million, yielding a distribution coverage ratio of 1.6x1. During the quarter, our net cash provided by operating activities benefited from an approximately $17.2 million reduction in working capital. Our distribution coverage ratio calculation is based on estimated maintenance capital expenditures of $9.1 million, while our actual cash maintenance capital expenditures for the second quarter were $7.3 million. Based on our current outlook for the coal markets and a strong distribution coverage ratio, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on July 25, 2018, the distribution to all unitholders of the Partnership will be made on August 15, 2018, to such holders of record at the close of business on August 8, 2018.
2018 Guidance and Outlook
Based on our strong year-to-date results, robust coal demand and production expectations, we are improving several items of our financial and operating performance guidance for 2018.
Second Quarter Earnings Conference Call
A joint conference call and webcast with CONSOL Energy Inc., during which management will discuss the second quarter 2018 financial and operational results, is scheduled for August 2, 2018 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 page of our website, www.ccrlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-877-870-4263
Participant international dial in 1-412-317-0790
Availability of Additional Information
Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com.
We have also filed our Form 10-Q with the Securities and Exchange Commission (SEC) in conjunction with this earnings release. Investors seeking our detailed financial statements can refer to the Form 10-Q.
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "total cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to most directly comparable GAAP financial measures under the caption "Reconciliation of Non-GAAP Financial Measures".
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or cash cost of coal sold per ton guidance to total costs, the most comparable financial measures calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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, 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 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. 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.
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue. We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of total costs to cost of coal sold and cash cost of coal sold, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | |||||||
2018 |
2017 | ||||||
Total Costs |
$ |
78,681 |
$ |
70,998 |
|||
Freight Expense |
(4,361) |
(4,441) |
|||||
Selling, General and Administrative Expenses |
(3,341) |
(3,652) |
|||||
Interest Expense |
(1,784) |
(2,396) |
|||||
Other Costs (Non-Production) |
(4,239) |
(934) |
|||||
Depreciation, Depletion and Amortization (Non-Production) |
(543) |
(550) |
|||||
Total Cost of Coal Sold |
$ |
64,413 |
$ |
59,025 |
|||
Depreciation, Depletion and Amortization (Production) |
(11,353) |
(9,727) |
|||||
Total Cash Cost of Coal Sold |
$ |
53,060 |
$ |
49,298 |
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended June 30, | |||||||
2018 |
2017 | ||||||
Coal Revenue |
$ |
92,674 |
$ |
75,927 |
|||
Operating and Other Costs |
57,299 |
50,232 |
|||||
Less: Other Costs (Non-Production) |
(4,239) |
(934) |
|||||
Cash Cost of Coal Sold |
53,060 |
49,298 |
|||||
Depreciation, Depletion and Amortization |
11,896 |
10,277 |
|||||
Less: Depreciation, Depletion and Amortization (Non-Production) |
(543) |
(550) |
|||||
Cost of Coal Sold |
$ |
64,413 |
$ |
59,025 |
|||
Total Tons Sold |
1,958 |
1,697 |
|||||
Average Revenue Per Ton Sold |
$ |
47.34 |
$ |
44.75 |
|||
Average Cash Cost Per Ton Sold |
26.99 |
29.08 |
|||||
Depreciation, Depletion and Amortization Per Ton Sold |
5.91 |
5.71 |
|||||
Average Cost Per Ton Sold |
32.90 |
34.79 |
|||||
Average Margin Per Ton Sold |
14.44 |
9.96 |
|||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold |
5.91 |
5.71 |
|||||
Average Cash Margin Per Ton Sold |
$ |
20.35 |
$ |
15.67 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | |||||||
2018 |
2017 | ||||||
Net Income |
$ |
19,376 |
$ |
11,474 |
|||
Plus: |
|||||||
Interest Expense |
1,784 |
2,396 |
|||||
Depreciation, Depletion and Amortization |
11,896 |
10,277 |
|||||
Unit Based Compensation |
508 |
841 |
|||||
Adjusted EBITDA |
$ |
33,564 |
$ |
24,988 |
|||
Less: |
|||||||
Cash Interest |
2,130 |
2,539 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
9,085 |
8,976 |
|||||
Distributable Cash Flow |
$ |
22,349 |
$ |
11,622 |
|||
Net Cash Provided by Operating Activities |
$ |
48,949 |
$ |
23,092 |
|||
Plus: |
|||||||
Interest Expense |
1,784 |
2,396 |
|||||
Other, Including Working Capital |
(17,169) |
(500) |
|||||
Adjusted EBITDA |
$ |
33,564 |
$ |
24,988 |
|||
Less: |
|||||||
Cash Interest |
2,130 |
2,539 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
9,085 |
8,976 |
|||||
Distributable Cash Flow |
$ |
22,349 |
$ |
11,622 |
|||
Distributions |
$ |
14,348 |
$ |
12,228 |
|||
Distribution Coverage |
1.6 |
1.0 |
|||||
3Distributions to Preferred Units represents income attributable to preferred units prior to conversion. |
The following table presents a reconciliation of the net leverage ratio to net income (in thousands, except per ton information).
Twelve Months Ended | |||
June 30, 2018 | |||
Net Income |
$ |
56,257 |
|
Plus: |
|||
Interest Expense |
8,191 |
||
Depreciation, Depletion and Amortization |
43,349 |
||
Unit Based Compensation |
5,033 |
||
Cash Payments for Legacy Employee Liabilities, Net of Non-Cash Expense |
1,424 |
||
Loss on Extinguishment of Debt |
2,468 |
||
Other Adjustments to Net Income |
1,079 |
||
EBITDA Per Affiliated Company Credit Agreement |
$ |
117,801 |
|
Borrowings under Affiliated Company Credit Agreement |
$ |
160,500 |
|
Capitalized Leases |
10,373 |
||
Total Debt |
170,873 |
||
Less: |
|||
Cash on Hand |
646 |
||
Net Debt Per Affiliated Company Credit Agreement |
$ |
170,227 |
|
Net Leverage Ratio (Net Debt/EBITDA) |
1.5 |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Exchange Act) 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 "believe," "continue," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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. These risks, contingencies and uncertainties relate to, among other matters, the following: changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves, acquire additional reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; operating in a single geographic area; interest rates; our reliance on a few major customers; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement, employee services agreement and Affiliated Company Credit Agreement; restrictions in our Affiliated Company Credit Agreement that may adversely affect our business; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; adverse effect of cybersecurity threats; conflicts of interest that may cause our general partner or our sponsor to favor their own interests to our detriment; the requirement that we distribute all of our available cash; and other factors discussed in our 2017 Annual Report Form 10-K under "Risk Factors," as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-lp-announces-results-for-the-second-quarter-2018-300690698.html
SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., July 25, 2018 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on August 15, 2018 to such holders of record at the close of business on August 8, 2018.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-announces-distribution-for-second-quarter-of-2018-300686600.html
SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., May 3, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter ended March 31, 2018.
First Quarter 2018 Results
Highlights of the CCR first quarter 2018 results include:
Management Comments
"The first quarter of 2018 marks the best financial results in our history as a public company," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC (the "general partner"). "Today we announced a very strong distribution coverage on an industry-leading distribution yield. We continue to return a significant amount of capital to our unitholders, opportunistically re-invest in our business and simultaneously derisk the balance sheet. The strong quarterly performance was driven by record production out of our Bailey mine and improved coal prices on our netback contracts. This quarter was a testament to our differentiated marketing strategy, which enables us to capture significant pricing upside during peak weather events while delivering consistent volume and pricing performance at other times. Our netback contracts provide asymmetric pricing opportunity that we believe aligns us with the profitability of coal-fired power generation on the dispatch curve. The volume consistency and potential for pricing upside associated with these contracts ties well to the low-cost structure, scale, and longevity of our mining operations, and thus they are a valuable component of our overall sales portfolio. Our revenue per ton on traditional domestic contracts was also improved compared to the year-ago period, providing evidence of improved supply-demand fundamentals in the eastern U.S. coal markets that we serve. We are also pleased to announce that we are off to a very strong start for the year, and the improving outlook allows us to boost our full year adjusted EBITDA guidance."
Sales & Marketing
Our Sales and Marketing team sold 1.7 million tons of coal during the first quarter of 2018 at an average revenue per ton of $52.98 compared to 1.7 million tons at an average revenue per ton of $46.80 in the year-ago period. The improvement was largely driven by greater-than-expected revenue on our netback contracts, which reflected strong PJM West power prices during the quarter. Our revenue per ton also benefited from improved pricing under our non-netback domestic contracts and from continued strengths in the export markets. Offsetting these improvements were weather-driven challenges that affected rail and port logistics and limited further upside to shipments.
On the domestic front, heating degree days during the quarter in the Middle Atlantic, South Atlantic and East North Central regions we serve were approximately 11-23% greater than the year-ago period, but still approximately 3-7% below normal, based on preliminary data. Although the quarter, as a whole, was still slightly milder than average, the significant improvement in heating demand compared to the year-ago period translated into improved burn at our customers' power plants and helped to further draw down coal inventories. According to the U.S. Energy Information Administration, inventories at domestic utilities stood at approximately 121 million tons at the end of February 2018, down by approximately 25% from year-ago levels. More importantly, we believe inventories at several of our key Northern Appalachian rail-served power plants now stand below 20 days. This gives us tremendous confidence in our ability to ship all of our contracted coal, despite recent softness in natural gas prices. We are 95+% contracted for 2018 shipments and are 74% and 26% contracted for 2019 and 2020, assuming an annual production run rate of 6.75 million tons. We anticipate that our cost structure and differentiated marketing strategy will allow our customers to stay competitive with natural gas for the foreseeable future.
Furthermore, while Henry Hub spot prices averaged just $3.08/mmBtu during the quarter, the return to more normal winter temperatures helped to boost PJM West day-ahead power prices to an average of $45.31/MWh, marking the highest quarterly average price since the first quarter of 2015. This was due, in part, to the cold weather event in early January, but the month of March also turned in the third-highest monthly PJM West power price ($33.69/MWh) that has been observed in the last 32 months, even though Henry Hub spot prices averaged just $2.69/mmBtu in March. These improvements in power prices boosted average revenue per ton under our netback contracts, as noted above.
Overall, global coal demand growth continues to improve, tying to overall broadening and accelerating economic growth. On the export front, while demand in Europe has softened, growth in India has more than compensated for this lower demand. Prior to 2017, our coal moving to India was primarily going into the industrial sector in the brick and cement industries; however, we are now beginning to penetrate into India's coal-fired power generation sector, which has created additional upside for our high calorific value coal. We are also expecting additional demand improvement from Turkey, pending easing sulfur restrictions. We are seeing improved demand growth around the globe in many more countries. This global demand growth, coupled with a supply side that has experienced minimal investment in recent years, is increasingly creating an imbalance in the international marketplace for coal. In our view, this has created an opportunity for the United States to become an essential piece of the seaborne market rather than a swing supplier.
Additional Details on Export Contract
As previously disclosed, against the strong export backdrop in the fourth quarter of 2017, we succeeded in concluding a multi-year contract for approximately 3.5 million tons of coal in the export markets with shipments beginning in May 2018 and extending through April 2020. The contracted volume is comprised of approximately 70% thermal coal and 30% crossover metallurgical coal. Coal prices in the first year of the contract are fixed and are captured in our current guidance for 2018. For the second year of the contract, the price of coal is collared with an average floor price that is greater than our 2017 average revenue per ton of $45.52. This contractual arrangement not only highlights the global attractiveness of our coal assets, but also speaks to our ability to take advantage of market volatility and derisk a substantial portion of our revenue at attractive prices.
Operations Summary
CCR achieved strong first quarter production of 1.7 million tons, which compares to 1.7 million tons in the first quarter of 2017. During the quarter, we benefited from strong production at the Bailey mine, partially offset by a longwall move at the Harvey mine and adverse geological conditions at the Enlow Fork mine. Our Bailey mine produced at a record-setting level of 953 thousand tons for CCR's share in the first quarter, surpassing its previous high mark of 869 thousand tons set in the fourth quarter of 2016.
CCR shipped 1.7 million tons during the first quarter, compared to 1.7 million tons in the year-ago quarter. While there were logistical challenges synchronizing the rail and port availability, partially due to harsh weather conditions, our Sales and Marketing team was successful in minimizing the overall impact. Total coal revenue for the first quarter came in at $87.8 million and improved by $8.6 million compared to the year-ago quarter, primarily driven by higher revenue per ton of coal sold. Our average revenue per ton increased to $52.98 from $46.80 in the year-ago quarter, largely due to higher average revenue per ton on our netback contracts.
Total costs during the first quarter were $72.5 million compared to $69.2 million in the year-ago quarter. Average cash cost of coal sold per ton1 was $29.21 compared to $28.75 in the year-ago quarter. This increase was essentially driven by higher royalties and production taxes, which are tied to the higher sales prices we received in the quarter. Average cash margin per ton sold1 for the first quarter of 2018 expanded by $5.72, or 32%, to $23.77 per ton compared to the year-ago period, driven by higher average revenue per ton.
For the quarter, other costs increased by $2.5 million compared to the year-ago quarter, including approximately $1.2 million in demurrage expense created by the above-mentioned rail and port logistical challenges.
Three Months Ended | ||||
March 31, 2018 |
March 31, 2017 | |||
Coal Production |
million tons |
1.7 |
1.7 | |
Coal Sales |
million tons |
1.7 |
1.7 | |
Average Revenue Per Ton |
per ton |
$52.98 |
$46.80 | |
Average Cash Cost of Coal Sold1 |
per ton |
$29.21 |
$28.75 | |
Average Cash Margin Per Ton Sold1 |
per ton |
$23.77 |
$18.05 |
Reducing Cash Costs and Improving Cost of Capital
During the first quarter, we took advantage of a strong leasing market and bought out one set of longwall shields at our Bailey mine from the operating lease agreement and refinanced it as a capital lease. This strategy allowed us to lower our overall cash spending even after accounting for the interest expense of the lease. In the month of April, we also executed an early buyout option on Harvey longwall shields, terminated the operating lease and refinanced it as a capital lease. The financing rates on both of these leases are significantly below our weighted average cost of capital, and the transactions are immediately accretive to our cash flows. In aggregate, we expect an approximately $2.5 million reduction in 2018 cash spending as a result of these refinancings. Furthermore, the financing charges on these capital leases are fixed and insulate us from future increases in interest rates.
Quarterly Distribution
During the first quarter of 2018, CCR generated net cash provided by operating activities of $29.3 million and distributable cash flow1 of $25.3 million, yielding a distribution coverage ratio of 1.8x1. Our distribution coverage ratio calculation is based on estimated maintenance capital expenditures of $9.0 million, while our actual cash maintenance capital expenditures for the first quarter were $4.9 million. Based on our current outlook for the coal markets and a strong distribution coverage ratio, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on April 25, 2018, the distribution to all unitholders of the Partnership will be made on May 15, 2018, to such holders of record at the close of business on May 8, 2018.
2018 Guidance and Outlook
Based on our strong first quarter results, current contracted position, coal market outlook and production expectations, we are improving several items of our financial and operating performance guidance for 2018.
First Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the first quarter of 2018 financial and operational results, is scheduled for May 3, 2018 at 10:00 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 page of our website, www.ccrlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
Availability of Additional Information
Prior to the earnings conference call, we will make available additional information in a presentation slide deck to provide investors with further insights into our financial and operating performance. This material can be accessed through the "Events and Presentations" page of our website, www.ccrlp.com.
We have also filed our Form 10-Q with the Securities and Exchange Commission (SEC) in conjunction with this earnings release. Investors seeking our detailed financial statements can refer to the Form 10-Q.
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "total cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "net leverage ratio" are non-GAAP financial measures, which are reconciled to GAAP financial measures under the caption "Reconciliation of Non-GAAP Financial Measures".
2 CCR is unable to provide a reconciliation of adjusted EBITDA guidance to net income or cash cost of coal sold per ton guidance to total costs, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE: CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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, and depreciation, depletion and amortization costs. Our costs exclude any indirect costs such as selling, general and administrative costs, freight expenses, interest expenses 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. 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.
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue. We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit-based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit-based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
We define net leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of total costs to cost of coal sold and cash cost of coal sold, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
Total Costs |
$ |
72,544 |
$ |
69,214 |
|||
Freight Expense |
(4,472) |
(3,070) |
|||||
Selling, General and Administrative Expenses |
(3,020) |
(3,283) |
|||||
Interest Expense |
(1,951) |
(2,457) |
|||||
Other Costs (Non-Production) |
(4,026) |
(1,493) |
|||||
Depreciation, Depletion and Amortization (Non-Production) |
(540) |
(550) |
|||||
Total Cost of Coal Sold |
$ |
58,535 |
$ |
58,361 |
|||
Depreciation, Depletion and Amortization (Production) |
(10,274) |
(9,971) |
|||||
Total Cash Cost of Coal Sold |
$ |
48,261 |
$ |
48,390 |
The following table presents a reconciliation of average cash margin per ton sold to coal revenue, the most directly comparable GAAP financial measure, for each of the periods indicated (in thousands, except per ton information).
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
Coal Revenue |
$ |
87,752 |
$ |
79,112 |
|||
Operating and Other Costs |
52,287 |
49,883 |
|||||
Less: Other Costs (Non-Production) |
(4,026) |
(1,493) |
|||||
Cash Cost of Coal Sold |
48,261 |
48,390 |
|||||
Depreciation, Depletion and Amortization |
10,814 |
10,521 |
|||||
Less: Depreciation, Depletion and Amortization (Non-Production) |
(540) |
(550) |
|||||
Cost of Coal Sold |
$ |
58,535 |
$ |
58,361 |
|||
Total Tons Sold |
1,656 |
1,690 |
|||||
Average Revenue Per Ton Sold |
$ |
52.98 |
$ |
46.80 |
|||
Average Cash Cost Per Ton Sold |
29.21 |
28.75 |
|||||
Depreciation, Depletion and Amortization Per Ton Sold |
6.13 |
5.77 |
|||||
Average Cost Per Ton Sold |
35.34 |
34.52 |
|||||
Average Margin Per Ton Sold |
17.64 |
12.28 |
|||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold |
6.13 |
5.77 |
|||||
Average Cash Margin Per Ton Sold |
$ |
23.77 |
$ |
18.05 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
Net Income |
$ |
21,957 |
$ |
14,066 |
|||
Plus: |
|||||||
Interest Expense |
1,951 |
2,457 |
|||||
Depreciation, Depletion and Amortization |
10,814 |
10,521 |
|||||
Unit Based Compensation |
359 |
866 |
|||||
Adjusted EBITDA |
$ |
35,081 |
$ |
27,910 |
|||
Less: |
|||||||
Cash Interest |
828 |
2,161 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
8,963 |
8,989 |
|||||
Distributable Cash Flow |
$ |
25,290 |
$ |
14,909 |
|||
Net Cash Provided by Operating Activities |
$ |
29,264 |
$ |
17,662 |
|||
Plus: |
|||||||
Interest Expense |
1,951 |
2,457 |
|||||
Other, Including Working Capital |
3,866 |
7,791 |
|||||
Adjusted EBITDA |
$ |
35,081 |
$ |
27,910 |
|||
Less: |
|||||||
Cash Interest |
828 |
2,161 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
8,963 |
8,989 |
|||||
Distributable Cash Flow |
$ |
25,290 |
$ |
14,909 |
|||
Distributions |
$ |
14,346 |
$ |
12,228 |
|||
Distribution Coverage |
1.8 |
1.2 |
|||||
3Distributions to Preferred Units represents income attributable to preferred units prior to conversion. |
The following table presents a reconciliation of the net leverage ratio to net income (in thousands, except per ton information).
Twelve Months Ended | |||
March 31, 2018 | |||
Net Income |
$ |
48,355 |
|
Plus: |
|||
Interest Expense |
8,803 |
||
Depreciation, Depletion and Amortization |
41,730 |
||
Unit Based Compensation |
5,366 |
||
Cash Payments for Legacy Employee Liabilities, Net of Non-Cash Expense |
1,355 |
||
Loss on Extinguishment of Debt |
2,468 |
||
Other Adjustments to Net Income |
572 |
||
EBITDA Per Affiliated Company Credit Agreement |
$ |
108,649 |
|
Borrowings under Affiliated Company Credit Agreement |
$ |
187,000 |
|
Capitalized Leases |
5,586 |
||
Total Debt |
192,586 |
||
Less: |
|||
Cash on Hand |
748 |
||
Net Debt Per Affiliated Company Credit Agreement |
$ |
191,838 |
|
Net Leverage Ratio (Net Debt/EBITDA) |
1.8 |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Exchange Act) 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 "believe," "continue," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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. These risks, contingencies and uncertainties relate to, among other matters, the following: changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves, acquire additional reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; operating in a singe geographic area; interest rates; our reliance on a few major customers; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement, employee services agreement and Affiliated Company Credit Agreement; restrictions in our Affiliated Company Credit Agreement that may adversely affect our business; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; conflicts of interest that may cause our general partner or our sponsor to favor their own interests to our detriment; the requirement that we distribute all of our available cash; and other factors discussed in our 2017 Annual Report Form 10-K under "Risk Factors," as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-lp-announces-results-for-the-first-quarter-2018-300641659.html
SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., April 25, 2018 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on May 15, 2018 to such holders of record at the close of business on May 8, 2018.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high-Btu North Appalachian thermal and crossover metallurgical coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-announces-distribution-for-first-quarter-of-2018-300635943.html
SOURCE CONSOL Coal Resources LP
PITTSBURGH, March 16, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNXM has completed its previously announced acquisition of a 95% interest in the Shirley-Pennsboro gathering system ("Shirley-Pennsboro System") from CNX.
The Shirley-Pennsboro System gathers and transports gas in the core wet gas region of the Marcellus Shale in West Virginia across Doddridge, Tyler, Ritchie, and Pleasant counties and currently has approximately 180 million cubic feet equivalent per day of flowing production. At the closing, the Shirley-Pennsboro System, which was previously held in CNX's 95% owned subsidiary, CNX Midstream DevCo III, was transferred to CNXM's 100% owned subsidiary, CNX Midstream DevCo I.
CNXM financed the transaction with a portion of the proceeds from the sale of $400 million aggregate principal amount of their 6.500% senior notes due 2026, which also closed on March 16, 2018.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
* * * * *
This press release serves as a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-midstream-partners-lp-completes-acquisition-of-shirley-pennsboro-system-from-cnx-resources-corporation-300615400.html
SOURCE CNX Resources Corporation; CNX Midstream Partners LP
CANONSBURG, Pa., Feb. 16, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) has filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2017 with the Securities and Exchange Commission (the "SEC").
CCR makes available, free of charge, on its website at www.ccrlp.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934 as soon as reasonably practicable after such reports are available, electronically filed with, or furnished to the SEC.
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy, Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Zach Smith, at (724) 485-4017 |
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-lp-announces-filing-of-its-annual-report-for-2017-300600323.html
SOURCE CONSOL Coal Resources LP
PITTSBURGH, Feb. 7, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the company) and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that they have entered into a definitive agreement ("Purchase Agreement") pursuant to which CNX will sell its 95% interest in the Shirley-Pennsboro gathering system ("Shirley-Pennsboro System") to CNXM for total cash consideration of $265 million ("Purchase Price").
The Shirley-Pennsboro System gathers and transports gas in the core wet gas region of the Marcellus Shale in West Virginia across Doddridge, Tyler, Ritchie, and Pleasant counties and currently has approximately 180 million cubic feet equivalent per day of flowing production.
"This transaction is a win-win for both CNX and CNXM," commented Nicholas J. DeIuliis, CEO of CNX and CNXM. "For CNX, the transaction provides significant cash proceeds that effectively return the investment we made for our acquisition of Noble Energy's general partner interest in CNXM. Also, in connection with the acquisition, CNX and CNXM have agreed to amend the existing gathering agreement to provide for a minimum volume commitment (MVC) with respect to the Shirley-Pennsboro System. This operating area was the largest growth contributor to CNX's 2017 Marcellus Shale volumes and will continue to be a growing part of CNX's future production."
"For CNXM, this transaction complements the MLP's growth outlook, as previously highlighted, and demonstrates the commitment and value-creation opportunities under the new single-sponsor ownership structure," continued Mr. DeIuliis. "The Shirley-Pennsboro System is already well-capitalized, and the timing of the transaction is ideal for CNXM as it is able to capture the volume growth as it executes near-term capacity expansion projects, with CNX volumes rapidly filling that capacity. The transaction is substantially de-risked through the MVC, which covers approximately 70% of CNX's planned production in the Shirley-Pennsboro operating area, resulting in approximately $400 million in revenue for CNXM through 2031. Additionally, this transaction is expected to add $22 million to $24 million of 2018 EBITDA for CNXM on a full year pro forma basis, with substantial EBITDA growth expected beyond 2018. CNX expects a negligible impact to 2018 EBITDA guidance since a transaction was contemplated in its prior guidance numbers."
At the closing, the Shirley-Pennsboro System, which is currently held in CNX's 95% owned CNX Midstream DevCo III, will be transferred to CNXM's 100% owned subsidiary, CNX Midstream DevCo I. CNXM currently intends to finance the transaction with cash on hand and through debt financing. Following closing of the transaction, which is expected to occur prior to the end of the first quarter of 2018, CNX Resources will continue to own 95% interests in each of CNX Midstream DevCo II LP and CNX Midstream DevCo III LP, with CNXM owning the remaining 5% in each.
The transaction represents the initial dropdown of assets by CNX to CNXM following CNX acquiring Noble Energy's GP and DevCo interests in CNXM, which closed on January 3, 2018. CNX continues to hold approximately 21.7 million common units, or 34.2%, of the common units of CNXM, along with 100% of the general partner interest, and the incentive distribution rights in CNXM.
The transaction was approved by the CNXM's Board of Directors' Conflicts Committee, which consists entirely of independent directors.
Latham & Watkins LLP served as the legal advisor to CNX. The Conflicts Committee of the Board of Directors of CNXM was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Lastly, CNX and CNXM will provide additional guidance information in conjunction with the upcoming Analyst and Investor Meeting.
Note: CNX Midstream Partners LP is unable to provide a reconciliation of projected Adjusted EBITDA to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing, and potential significance of certain income statement items.
Analyst and Investor Meeting:
CNX and CNXM will host a joint Analyst and Investor Meeting in Pittsburgh, Pennsylvania on Tuesday, March 13, 2018.
The Analyst and Investor Meeting, which is expected to last approximately four hours, will feature presentations from members of CNX's and CNXM's senior leadership teams followed by a question and answer session.
Following the conclusion of CNX's portion of the Analyst and Investor Meeting, which the company expects to be approximately three hours, certain members of the senior leadership team from CNXM will make a presentation followed by a question and answer session.
A live audio webcast of the Analyst and Investor Meeting will begin at 8:30 a.m. Eastern Time and can be accessed by visiting the investor relations portion at each company's website, at www.cnx.com and www.cnxmidstream.com. The replay of the webcast will be available for approximately 30 days. Additionally, a comprehensive slide deck will be posted to each company's website (under the "Events" tab) to coincide with the onset of the meeting.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. CNX deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2017, CNX had 7.6 trillion cubic feet equivalent of proved natural gas reserves. CNX is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. CNXM's assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on CNXM's website www.cnxmidstream.com.
* * * * *
This press release serves as a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
CNX and CNXM are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) 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. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects, including the Shirley-Pennsboro transaction, and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the Shirley-Pennsboro transaction may not be consummated or the benefits contemplated therefrom may not be realized; the effects of changes in market prices of natural gas, NGLs and crude oil on CNX's drilling and development plans and the volumes of natural gas and condensate that are produced on CNXM's dedicated acreage; changes in CNX's drilling and development plans in the Marcellus Shale and Utica Shale; CNX's ability to meet its drilling and development plans in the Marcellus Shale and Utica Shale; the demand for natural gas and condensate gathering services; changes in general economic conditions; competitive conditions in our industry; actions taken by third-party operators, gatherers, processors and transporters; our ability to successfully implement our respective business plans; and our ability to complete internal growth projects on time and on budget. You should not place undue reliance on our forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, forward-looking statements involve known and unknown risks, uncertainties and other factors, including the factors described in detail under the captions "Forward-Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
CANONSBURG, Pa., Feb. 6, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) today reported financial and operating results for the quarter and year ended December 31, 2017.
Fourth Quarter 2017 Results
Highlights of the CCR fourth quarter 2017 results include:
Management Comments
"The fourth quarter of 2017 marked an important milestone in the history of our company. On November 28, 2017, our then-sponsor (currently known as "CNX Resources Corporation" or "CNX") completed the separation of CONSOL Energy Inc. ("CEIX"), a pure-play coal company trading on the New York Stock Exchange under the ticker CEIX, which includes a world-class coal mining complex located in Pennsylvania, a strategic coal export terminal and an abundance of undeveloped reserves. As part of that separation, CNX also transferred its ownership interest in CCR into CEIX. We believe this is an exciting development for our unitholders as we now have a coal-focused sponsor and a single management team that is well-positioned to drive better strategic alignment among the two entities," said Jimmy Brock, Chief Executive Officer of CONSOL Coal Resources GP LLC (the "general partner"). "This morning we are reporting strong fourth quarter operating and financial results that include a healthy distribution coverage ratio, improved leverage ratio, and continued cash margin expansion. Heading into 2018, I am pleased to announce that we are off to a very strong start for the year with a robust sales book and an improved pricing outlook."
Sales & Marketing
Our Sales and Marketing team sold 1.6 million tons of coal during the fourth quarter of 2017, bringing our full-year (FY) 2017 sales to 6.5 million tons. This marks our second consecutive year of sales volume growth, an increase of 6% from 2016 and 14% from 2015. We achieved this growth in spite of mild peak season weather earlier in 2017, as well as geology, permitting, and logistical challenges that we expect will ease going forward and provide us with additional volume in 2018. FY 2017 average revenue per ton sold was up 5% versus FY 2016, driven largely by improved pricing in the thermal and crossover metallurgical export markets we serve.
The fourth quarter of 2017 saw continued strengthening trends in both the domestic and export markets. On the domestic front, PJM West day-ahead power prices averaged almost $3.50/MWh, or 12%, higher during the fourth quarter than during the third quarter, driving an uptick in average revenue per ton under our netback contracts. Overall, our domestic average revenue per ton was up by 5% compared to the third quarter, and by nearly 4% versus the year-ago quarter. More importantly, power plants have continued to exercise discipline in managing their coal inventory levels. The latest report from the U.S. Energy Information Administration shows that power plant coal stockpiles were down by approximately 27 million tons (or about 16%) at the end of November 2017 compared to the end of November 2016, and many of our top domestic customers in the Northern Appalachian (NAPP) rail market reported coal inventories below target levels as of the end of January 2018. We believe that these more balanced inventory levels will help to improve domestic coal demand in 2018.
Export average revenue per ton sold in the fourth quarter of 2017 was improved by an even greater amount than domestic average revenue per ton sold, when compared with the trailing and year-ago quarters, as demand and pricing remained strong in both the thermal and metallurgical coal markets. This strength has been driven by a number of factors, perhaps the most noteworthy during the fourth quarter being low coal stockpiles and restrictions on petcoke in India, which helped to drive an increase in demand for NAPP coal in particular. Continued pull from Asia has taken some traditional supply away from the Atlantic market as well, and helped to bolster further gains in Atlantic seaborne pricing, with the prompt month API 2 index pricing (for thermal coal delivered into northern Europe) averaging 8% higher during the fourth quarter compared to the third quarter.
Contracting Progress through 2020
We capitalized on the uptick in demand and pricing for NAPP coal in 2017 to carry out significant portfolio building for future years. We are now greater than 95% contracted for 2018, 70% contracted for 2019, and 24% contracted for 2020 assuming an annual production rate of approximately 6.75 million tons going forward. This contracted position includes a mix of sales to our top domestic customers, to the export thermal market, and to the export metallurgical market, maintaining our diversified market exposure and providing a solid revenue base for meeting our financial objectives.
Against the strong export backdrop highlighted before, we succeeded in concluding a multi-year contract for a significant piece of our coal export sales volume for the second quarter of 2018 through the first quarter of 2020. The newly contracted export volumes consist of approximately 70% thermal coal and 30% crossover metallurgical coal sales. Approximately 50% of this volume is already priced, and the remaining 50% is contracted and collared. The contract demonstrates the global attractiveness of our high-quality and versatile coal assets.
Operations Summary
CCR achieved record production of 6.5 million tons in 2017, which compares to 6.2 million tons in 2016 and surpassing the previous record set in 2014. Furthermore, our Harvey mine produced at a record-setting level of 1.2 million tons for CCR's share in 2017, surpassing its previous high mark of 0.9 million tons set in 2015. The overall production performance is even more encouraging when considering that our Enlow Fork mine experienced challenging geological conditions for the better part of the second half of 2017, and one of the Bailey longwalls was idled for one month due to the permit issue we previously disclosed in September.
CCR produced and sold 1.6 million tons during the fourth quarter of 2017, compared to 1.8 million tons in the year-ago quarter. The reduced production compared to the year-ago period was primarily driven by planned longwall moves, the previously disclosed permitting issue at Bailey, inconsistent mining conditions at Enlow Fork and rail/logistics issues during the month of December. Although total coal revenue decreased by $8.2 million to $72.1 million, our total cost improved by $5.1 million to $67.5 million versus the fourth quarter of 2016. Average cash margin per ton sold1 for the fourth quarter of 2017 expanded by $2.21, or 13%, to $19.06 per ton compared to the year-ago period, driven by higher average revenue per ton and lower cash cost of coal sold. Our average revenue per ton increased to $46.36 from $45.05 in the year-ago quarter due largely to higher average revenue per ton on export shipments and higher netback prices on certain contracts compared to the year-ago period. Our average cash cost of coal sold per ton1 was improved versus the year-ago quarter driven by reduced subsidence expense and lower power/utility-related spending.
Three Months Ended | ||||
December 31, 2017 |
December 31, 2016 | |||
Coal Production |
million tons |
1.6 |
1.8 | |
Coal Sales |
million tons |
1.6 |
1.8 | |
Average Revenue Per Ton |
per ton |
$46.36 |
$45.05 | |
Average Cash Cost of Coal Sold1 |
per ton |
$27.30 |
$28.20 | |
Average Cash Margin Per Ton Sold1 |
per ton |
$19.06 |
$16.85 |
Quarterly Distribution
During the fourth quarter of 2017, CCR generated net cash provided by operating activities of $11.9 million and distributable cash flow1 of $17.7 million, yielding a distribution coverage ratio of 1.2x1. Our distribution coverage ratio calculation is based on the estimated maintenance capital expenditures of $8.9 million, while our actual cash maintenance capital expenditures for the fourth quarter was $7.2 million. Based on our current outlook for the coal markets and a strong distribution coverage ratio, the board of directors of the general partner has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. As previously announced on January 25, 2018, the distribution to all unitholders of the Partnership will be made on February 15, 2018, to such holders of record at the close of business on February 8, 2018.
2018 Guidance and Outlook
Based on our current contracted position, coal market outlook and production expectations, we are providing the following financial and operating performance guidance for 2018.
Fourth Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the fourth quarter of 2017 financial and operational results, is scheduled for February 6, 2018 at 11:00 AM EDT. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.ccrlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-855-656-0928
Participant international dial in 1-412-902-4112
1 "adjusted EBITDA", "distribution coverage ratio", "distributable cash flow", "total cost of coal sold", "average cash cost of coal sold per ton", "average cash margin per ton sold" and "leverage ratio" are non-GAAP financial measures, which are reconciled to GAAP financial measures under the caption "Reconciliation of Non-GAAP Financial Measures". |
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy, Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
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, and depreciation, depletion and amortization costs. Our costs exclude any indirect costs such as selling, general and administrative costs, freight expenses, interest expenses 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. 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.
We define average cash margin per ton as average coal revenue per ton, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average cash margin per ton is total coal revenue.
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CONSOL Coal Resources LP 2015 Long-Term Incentive Plan ("unit based compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as Unit Based Compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
We define leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of total costs to cost of coal sold and cash cost of coal sold, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended | |||||||
2017 |
2016 | ||||||
Total Costs |
$ |
67,458 |
$ |
72,560 |
|||
Freight Expense |
(5,461) |
(3,130) |
|||||
Selling, General and Administrative Expenses |
(4,479) |
(3,391) |
|||||
Loss on Extinguishment of Debt |
(2,468) |
— |
|||||
Interest Expense |
(2,052) |
(2,442) |
|||||
Other Costs (Non-Production) |
(322) |
(2,627) |
|||||
Depreciation, Depletion and Amortization (Non-Production) |
(543) |
(549) |
|||||
Total Cost of Coal Sold |
$ |
52,133 |
$ |
60,421 |
|||
Depreciation, Depletion and Amortization (Production) |
(9,744) |
(10,113) |
|||||
Total Cash Cost of Coal Sold |
$ |
42,389 |
$ |
50,308 |
The following table presents a reconciliation of average cash margin per ton for each of the periods indicated (in thousands, except per ton information).
Three Months Ended | |||||||
2017 |
2016 | ||||||
Total Coal Revenue |
$ |
72,063 |
$ |
80,292 |
|||
Operating and Other Costs |
42,711 |
52,935 |
|||||
Less: Other Costs (Non-Production) |
(322) |
(2,627) |
|||||
Total Cash Cost of Coal Sold |
42,389 |
50,308 |
|||||
Depreciation, Depletion and Amortization |
10,287 |
10,662 |
|||||
Less: Depreciation, Depletion and Amortization (Non-Production) |
(543) |
(549) |
|||||
Total Cost of Coal Sold |
$ |
52,133 |
$ |
60,421 |
|||
Total Tons Sold |
1,555 |
1,782 |
|||||
Average Revenue Per Ton Sold |
$ |
46.36 |
$ |
45.05 |
|||
Average Cash Cost Per Ton Sold |
27.30 |
28.20 |
|||||
Depreciation, Depletion and Amortization Costs Per Ton Sold |
6.24 |
5.70 |
|||||
Average Cost Per Ton Sold |
33.54 |
33.90 |
|||||
Average Margin Per Ton Sold |
12.82 |
11.15 |
|||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold |
6.24 |
5.70 |
|||||
Average Cash Margin Per Ton Sold |
$ |
19.06 |
$ |
16.85 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended December 31, 2017 |
Three Months Ended | ||||||
Net Income |
$ |
11,310 |
$ |
11,727 |
|||
Plus: |
|||||||
Interest Expense |
2,052 |
2,442 |
|||||
Loss on Extinguishment of Debt |
2,468 |
— |
|||||
Depreciation, Depletion and Amortization |
10,287 |
10,662 |
|||||
Unit Based Compensation |
2,082 |
281 |
|||||
Adjusted EBITDA |
$ |
28,199 |
$ |
25,112 |
|||
Less: |
|||||||
Cash Interest |
1,562 |
2,112 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
8,906 |
8,583 |
|||||
Distributable Cash Flow |
$ |
17,731 |
$ |
12,566 |
|||
Net Cash Provided by Operating Activities |
$ |
11,859 |
$ |
25,775 |
|||
Plus: |
|||||||
Interest Expense |
2,052 |
2,442 |
|||||
Other, Including Working Capital |
14,288 |
(3,105) |
|||||
Adjusted EBITDA |
$ |
28,199 |
$ |
25,112 |
|||
Less: |
|||||||
Cash Interest |
1,562 |
2,112 |
|||||
Distributions to Preferred Units3 |
— |
1,851 |
|||||
Estimated Maintenance Capital Expenditures |
8,906 |
8,583 |
|||||
Distributable Cash Flow |
$ |
17,731 |
$ |
12,566 |
|||
Distributions |
$ |
14,298 |
$ |
12,148 |
|||
Distribution Coverage |
1.2 |
1.0 |
|||||
3Distributions to Preferred Units represents income attributable to preferred units prior to conversion.
Note: The above tables reflects the additional 5% ownership of PAMC completed September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
The following table presents a reconciliation of leverage ratio (in thousands, except per ton information).
Twelve Months Ended | |||
December 31, 2017 | |||
Net Income |
$ |
40,464 |
|
Plus: |
|||
Loss on Extinguishment of Debt |
2,468 |
||
Interest Expense |
9,309 |
||
Depreciation, Depletion and Amortization |
41,437 |
||
Unit Based Compensation |
5,873 |
||
Adjusted EBITDA |
$ |
99,551 |
|
Borrowings under Affiliate Company Credit Agreement |
$ |
196,583 |
|
Less: |
|||
Cash on Hand |
1,533 |
||
Net Debt |
$ |
195,050 |
|
Leverage Ratio (Net Debt/Adjusted EBITDA) |
2.0 |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in Section 21E of the Exchange Act) 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 "believe," "continue," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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. These risks, contingencies and uncertainties relate to, among other matters, the following: changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our Annual Report Form 10-K under "Risk Factors," as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission.
CONSOL COAL RESOURCES LP EARNINGS SUMMARY (Dollars in thousands) | |||||||||||||||
Three Months Ended |
Years Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(unaudited) |
(unaudited) |
(unaudited) |
|||||||||||||
Revenue: |
|||||||||||||||
Coal Revenue |
$ |
72,063 |
$ |
80,292 |
$ |
296,913 |
$ |
266,395 |
|||||||
Freight Revenue |
5,461 |
3,130 |
18,423 |
11,603 |
|||||||||||
Other Income |
1,244 |
865 |
7,448 |
3,119 |
|||||||||||
Total Revenue and Other Income |
78,768 |
84,287 |
322,784 |
281,117 |
|||||||||||
Cost of Coal Sold: |
|||||||||||||||
Operating Costs |
42,389 |
50,308 |
189,272 |
172,671 |
|||||||||||
Depreciation, Depletion and Amortization |
9,744 |
10,113 |
39,250 |
38,594 |
|||||||||||
Total Cost of Coal Sold |
52,133 |
60,421 |
228,522 |
211,265 |
|||||||||||
Other Costs: |
|||||||||||||||
Other Costs |
322 |
2,627 |
5,714 |
10,330 |
|||||||||||
Depreciation, Depletion and Amortization |
543 |
549 |
2,187 |
3,400 |
|||||||||||
Total Other Costs |
865 |
3,176 |
7,901 |
13,730 |
|||||||||||
Freight Expense |
5,461 |
3,130 |
18,423 |
11,603 |
|||||||||||
Selling, General and Administrative Expenses |
4,479 |
3,391 |
15,697 |
9,949 |
|||||||||||
Loss on Extinguishment of Debt |
2,468 |
— |
2,468 |
— |
|||||||||||
Interest Expense |
2,052 |
2,442 |
9,309 |
8,719 |
|||||||||||
Total Costs |
67,458 |
72,560 |
282,320 |
255,266 |
|||||||||||
Net Income |
$ |
11,310 |
$ |
11,727 |
$ |
40,464 |
$ |
25,851 |
|||||||
Net Income Allocable to Limited Partner Units - Basic & |
$ |
11,118 |
$ |
9,679 |
$ |
34,076 |
$ |
19,487 |
|||||||
Adjusted EBITDA |
$ |
28,199 |
$ |
25,112 |
$ |
99,551 |
$ |
77,749 |
|||||||
Distributable Cash Flow |
$ |
17,731 |
$ |
12,566 |
$ |
50,010 |
$ |
28,613 |
|||||||
Net Income per Limited Partner Unit - Basic |
$ |
0.42 |
$ |
0.41 |
$ |
1.40 |
$ |
0.84 |
|||||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.42 |
$ |
0.41 |
$ |
1.39 |
$ |
0.83 |
|||||||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
CONSOL COAL RESOURCES LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands) | |||||||
December 31, |
December 31, | ||||||
(unaudited) |
|||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
1,533 |
$ |
9,785 |
|||
Trade Receivables |
31,473 |
23,418 |
|||||
Other Receivables |
1,970 |
515 |
|||||
Inventories |
12,303 |
11,491 |
|||||
Prepaid Expenses |
4,428 |
3,512 |
|||||
Total Current Assets |
51,707 |
48,721 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
910,468 |
876,690 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
483,410 |
442,178 |
|||||
Total Property, Plant and Equipment—Net |
427,058 |
434,512 |
|||||
Other Assets: |
|||||||
Other |
15,474 |
21,063 |
|||||
Total Other Assets |
15,474 |
21,063 |
|||||
TOTAL ASSETS |
$ |
494,239 |
$ |
504,296 |
CONSOL COAL RESOURCES LP CONSOLIDATED BALANCE SHEETS (CONTINUED) (Dollars in thousands) | |||||||
December 31, |
December 31, | ||||||
(unaudited) |
|||||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
19,718 |
$ |
18,797 |
|||
Accounts Payable—Related Party |
3,071 |
1,666 |
|||||
Other Accrued Liabilities |
44,179 |
44,318 |
|||||
Total Current Liabilities |
66,968 |
64,781 |
|||||
Long-Term Debt: |
|||||||
Revolver, Net of Debt Issuance and Financing Fees |
— |
197,843 |
|||||
Affiliated Company Credit Agreement - Related Party |
196,583 |
— |
|||||
Capital Lease Obligations |
73 |
146 |
|||||
Total Long-Term Debt |
196,656 |
197,989 |
|||||
Other Liabilities: |
|||||||
Pneumoconiosis Benefits |
3,833 |
2,057 |
|||||
Workers' Compensation |
3,404 |
3,090 |
|||||
Asset Retirement Obligations |
9,615 |
9,346 |
|||||
Other |
607 |
463 |
|||||
Total Other Liabilities |
17,459 |
14,956 |
|||||
TOTAL LIABILITIES |
281,083 |
277,726 |
|||||
Partners' Capital: |
|||||||
Class A Preferred Units (No Units Outstanding at December 31, 2017; 3,956,496 Units |
— |
69,151 |
|||||
Common Units (15,789,106 Units Outstanding at December 31, 2017; 11,618,456 Units |
205,974 |
140,967 |
|||||
Subordinated Units (11,611,067 Units Outstanding at December 31, 2017 and December 31, |
(15,225) |
(7,631) |
|||||
General Partner Interest |
11,964 |
12,274 |
|||||
Accumulated Other Comprehensive Income |
10,443 |
11,809 |
|||||
Total Partners' Capital |
213,156 |
226,570 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
494,239 |
$ |
504,296 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
CONSOL COAL RESOURCES LP | |||||||||||||||
Three Months Ended December 31, |
Years Ended December 31, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
(unaudited) |
(unaudited) |
(unaudited) |
|||||||||||||
Cash Flows from Operating Activities: |
|||||||||||||||
Net Income |
$ |
11,310 |
$ |
11,727 |
$ |
40,464 |
$ |
25,851 |
|||||||
Adjustments to Reconcile Net Income to Net Cash |
|||||||||||||||
Depreciation, Depletion and Amortization |
10,287 |
10,662 |
41,437 |
41,994 |
|||||||||||
(Gain) Loss on Sale of Assets |
7 |
(1) |
(1,399) |
9 |
|||||||||||
Unit Based Compensation |
2,082 |
281 |
5,873 |
1,185 |
|||||||||||
Loss on Extinguishment of Debt |
2,468 |
— |
2,468 |
— |
|||||||||||
Other Adjustments to Net Income |
15 |
219 |
688 |
898 |
|||||||||||
Changes in Operating Assets: |
|||||||||||||||
Accounts and Notes Receivable |
(9,181) |
(2,732) |
(9,510) |
(4,064) |
|||||||||||
Inventories |
(355) |
89 |
(812) |
747 |
|||||||||||
Prepaid Expenses |
637 |
1,227 |
(916) |
1,577 |
|||||||||||
Changes in Other Assets |
(800) |
239 |
(615) |
(3,465) |
|||||||||||
Changes in Operating Liabilities: |
|||||||||||||||
Accounts Payable |
(1,079) |
500 |
293 |
1,968 |
|||||||||||
Accounts Payable—Related Party |
(152) |
346 |
88 |
(2,644) |
|||||||||||
Other Operating Liabilities |
(3,321) |
3,134 |
(5,785) |
7,010 |
|||||||||||
Changes in Other Liabilities |
(59) |
84 |
368 |
2,032 |
|||||||||||
Net Cash Provided by Operating Activities |
11,859 |
25,775 |
72,642 |
73,098 |
|||||||||||
Cash Flows from Investing Activities: |
|||||||||||||||
Capital Expenditures |
(7,235) |
(3,135) |
(19,496) |
(12,704) |
|||||||||||
PA Mining Acquisition |
— |
— |
— |
(21,500) |
|||||||||||
Proceeds from Sales of Assets |
— |
1 |
1,500 |
23 |
|||||||||||
Net Cash Used in Investing Activities |
(7,235) |
(3,134) |
(17,996) |
(34,181) |
|||||||||||
Cash Flows from Financing Activities: |
|||||||||||||||
Payments on Miscellaneous Borrowings |
(22) |
(22) |
(96) |
(79) |
|||||||||||
Proceeds from Affiliated Company Credit Agreement - |
196,583 |
— |
196,583 |
— |
|||||||||||
Proceeds from Revolver, Net of Payments |
(188,000) |
(7,000) |
(201,000) |
16,000 |
|||||||||||
Payments for Unitholder Distributions |
(14,250) |
(12,148) |
(56,400) |
(42,634) |
|||||||||||
Units Withheld for Taxes |
(976) |
— |
(1,985) |
— |
|||||||||||
Net Change in Parent Advances |
— |
— |
— |
(8,953) |
|||||||||||
Net Cash Used In Financing Activities |
(6,665) |
(19,170) |
(62,898) |
(35,666) |
|||||||||||
Net (Decrease) Increase in Cash |
(2,041) |
3,471 |
(8,252) |
3,251 |
|||||||||||
Cash at Beginning of Period |
3,574 |
6,314 |
9,785 |
6,534 |
|||||||||||
Cash at End of Period |
$ |
1,533 |
$ |
9,785 |
$ |
1,533 |
$ |
9,785 |
|||||||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-lp-announces-results-for-the-fourth-quarter-2017-300593856.html
SOURCE CONSOL Coal Resources LP
CANONSBURG, Pa., Jan. 25, 2018 /PRNewswire/ -- The Board of Directors of CONSOL Coal Resources GP LLC, the general partner of CONSOL Coal Resources LP (NYSE: CCR), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on February 15, 2018 to such holders of record at the close of business on February 8, 2018.
About CONSOL Coal Resources LP
CONSOL Coal Resources (NYSE:CCR) is a master limited partnership formed in July 2015 to manage and further develop all of CONSOL Energy, Inc.'s (NYSE:CEIX) active coal operations in Pennsylvania. CCR's assets include a 25% undivided interest in, and operational control over, the Pennsylvania mining complex, which consists of three underground mines – Bailey, Enlow Fork and Harvey – and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal. More information is available on our website www.ccrlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@consolenergy.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@consolenergy.com
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-announces-distribution-for-fourth-quarter-of-2017-300588184.html
SOURCE CONSOL Coal Resources
CANONSBURG, Pa., Jan. 8, 2018 /PRNewswire/ -- CONSOL Coal Resources LP (NYSE: CCR) will issue its fourth quarter earnings release before the market opens on Tuesday, February 6, 2018. This will be followed by a conference call hosted by members of the management team at 11:00 a.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.ccrlp.com. An archive of the webcast will be available for at least 30 days after the event.
Beginning first quarter of 2018, we expect to hold a combined earnings conference call with our sponsor, CONSOL Energy Inc. (NYSE: CEIX), which owns the remaining 75% interest in the Pennsylvania Mining Complex.
Participant dial in (toll free) 1-855-656-0928
Participant international dial in 1-412-902-4112
Participants should ask to be joined into the CONSOL Coal Resources earnings conference call.
CONSOL Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CEIX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.ccrlp.com
Contacts:
Investor: Mitesh Thakkar, at (724) 485-3133
miteshthakkar@ccrlp.com
Media: Zach Smith, at (724) 485-4017
zacherysmith@ccrlp.com
View original content with multimedia:http://www.prnewswire.com/news-releases/consol-coal-resources-schedules-fourth-quarter-2017-earnings-release-and-conference-call-300579284.html
SOURCE CONSOL Coal Resources LP and CONSOL Energy Inc.
PITTSBURGH, Jan. 3, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNX has closed its previously announced acquisition of Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC, which holds the general partner interest and incentive distribution rights in CONE Midstream Partners LP. In conjunction with the closing, CONE Midstream Partners LP was renamed CNX Midstream Partners LP and will commence trading on the New York Stock Exchange under the ticker "CNXM" effective January 4, 2018.
Separately, CNXM announced today that its board of directors, following prior approval by the Board of Director's Conflicts Committee, which consists entirely of independent directors, has authorized CNXM to enter into an amendment to its gas gathering agreement (the "GGA") with CNX Gas Company LLC, a wholly-owned subsidiary of CNX. As part of the amendment to the GGA:
This amendment is expected to help CNX unlock the stacked pay potential of the core of southwest Pennsylvania and capitalize on economies of scale, which would support accelerating drilling activity and production moving forward. CNXM believes this will result in a higher level of confidence to support sustainable distribution growth into the future, which in turn will benefit CNX, which owns 21.7 million common units, the general partner interest, and the incentive distribution rights in CNXM. In addition, CNX and Noble have agreed to divide equitably their jointly owned water assets so that either CNX or Noble will own all of the formerly jointly owned water assets within agreed upon areas.
"Owning 100% of the general partner of CNXM, while simultaneously amending the existing GGA, is very significant for CNX," commented Nicholas J. DeIuliis, president and CEO. "CNX will benefit from increased control and flexibility with respect to the scope and timing of midstream development, which in turn will give CNX a greater level of optionality in its development plans and future drop opportunities. Ultimately, this GGA allows CNX to lock in our multi-year development plan under mutually beneficial terms for both CNX and CNXM. The single sponsor MLP model is the first key step in unlocking the value potential of CNX Midstream."
"For CNXM," Mr. DeIuliis said, "the amended GGA is expected to lock in distributable cash flow growth, enabling CNXM to maintain its strong distribution growth policy for the next several years."
As part of the change in ownership, effective immediately, Nicholas J. DeIuliis will serve as the chief executive officer (CEO) of CNXM, in addition to his current role as president and CEO of CNX. Also, effective immediately, Donald W. Rush will serve as the chief financial officer (CFO) of CNXM in addition to his current role as CFO of CNX.
Following the closing of the acquisition, Nicholas J. DeIuliis, Donald W. Rush, and Timothy C. Dugan will join Stephen W. Johnson and the three existing independent directors to constitute the board of directors of CNXM.
The changes to CNXM's management team and board of directors illustrate CNX's intent to better align the strategic initiatives of CNX and CNXM to unlock the growth potential for both companies.
Goldman Sachs & Co. LLC served as the financial advisor and Latham & Watkins LLP served as the legal advisor to CNX. The conflicts committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Conference Call
A conference call and webcast, during which management will discuss these announcements, is scheduled for January 4, 2018 at 10:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of the new CNX Midstream website, www.cnxmidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at https://services.choruscall.com/links/cnxm180104.html. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at https://services.choruscall.com/ccforms/replay.html shortly after the conclusion of the conference call. A telephonic replay will be available through January 18, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10115469.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.cnxmidstream.com.
This press release serves a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 statements regarding benefits of the acquisition and the plans, objectives, and strategies of CNX and CNXM following the acquisition, 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate which may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry overcapacity in this industry impairing our profitability; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; and, with respect to our acquisition of the 50% interest in CONE Gathering LLC from Noble, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in CNX's and CNXM's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, as supplemented by their respective Quarterly Reports on Form 10-Q.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Jan. 3, 2018 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM") jointly announced today that CNX has closed its previously announced acquisition of Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC, which holds the general partner interest and incentive distribution rights in CONE Midstream Partners LP. In conjunction with the closing, CONE Midstream Partners LP was renamed CNX Midstream Partners LP and will commence trading on the New York Stock Exchange under the ticker "CNXM" effective January 4, 2018.
Separately, CNXM announced today that its board of directors, following prior approval by the Board of Director's Conflicts Committee, which consists entirely of independent directors, has authorized CNXM to enter into an amendment to its gas gathering agreement (the "GGA") with CNX Gas Company LLC, a wholly-owned subsidiary of CNX. As part of the amendment to the GGA:
This amendment is expected to help CNX unlock the stacked pay potential of the core of southwest Pennsylvania and capitalize on economies of scale, which would support accelerating drilling activity and production moving forward. CNXM believes this will result in a higher level of confidence to support sustainable distribution growth into the future, which in turn will benefit CNX, which owns 21.7 million common units, the general partner interest, and the incentive distribution rights in CNXM. In addition, CNX and Noble have agreed to divide equitably their jointly owned water assets so that either CNX or Noble will own all of the formerly jointly owned water assets within agreed upon areas.
"Owning 100% of the general partner of CNXM, while simultaneously amending the existing GGA, is very significant for CNX," commented Nicholas J. DeIuliis, president and CEO. "CNX will benefit from increased control and flexibility with respect to the scope and timing of midstream development, which in turn will give CNX a greater level of optionality in its development plans and future drop opportunities. Ultimately, this GGA allows CNX to lock in our multi-year development plan under mutually beneficial terms for both CNX and CNXM. The single sponsor MLP model is the first key step in unlocking the value potential of CNX Midstream."
"For CNXM," Mr. DeIuliis said, "the amended GGA is expected to lock in distributable cash flow growth, enabling CNXM to maintain its strong distribution growth policy for the next several years."
As part of the change in ownership, effective immediately, Nicholas J. DeIuliis will serve as the chief executive officer (CEO) of CNXM, in addition to his current role as president and CEO of CNX. Also, effective immediately, Donald W. Rush will serve as the chief financial officer (CFO) of CNXM in addition to his current role as CFO of CNX.
Following the closing of the acquisition, Nicholas J. DeIuliis, Donald W. Rush, and Timothy C. Dugan will join Stephen W. Johnson and the three existing independent directors to constitute the board of directors of CNXM.
The changes to CNXM's management team and board of directors illustrate CNX's intent to better align the strategic initiatives of CNX and CNXM to unlock the growth potential for both companies.
Goldman Sachs & Co. LLC served as the financial advisor and Latham & Watkins LLP served as the legal advisor to CNX. The conflicts committee was advised by Evercore on financial matters and Baker Botts L.L.P. on legal matters.
Conference Call
A conference call and webcast, during which management will discuss these announcements, is scheduled for January 4, 2018 at 10:00 a.m. Eastern Time. Reference material for the call will be available on the "Events" page of the new CNX Midstream website, www.cnxmidstream.com, shortly before the start of the call. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast by using the link posted on the "Events" page of our website or at https://services.choruscall.com/links/cnxm180104.html. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at https://services.choruscall.com/ccforms/replay.html shortly after the conclusion of the conference call. A telephonic replay will be available through January 18, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10115469.
About CNX Resources
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
About CNX Midstream Partners
CNX Midstream Partners LP (NYSE: CNXM) is a master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available on our website www.cnxmidstream.com.
This press release serves a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of non-U.S. investors.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 statements regarding benefits of the acquisition and the plans, objectives, and strategies of CNX and CNXM following the acquisition, 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate which may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry overcapacity in this industry impairing our profitability; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; and, with respect to our acquisition of the 50% interest in CONE Gathering LLC from Noble, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in CNX's and CNXM's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, as supplemented by their respective Quarterly Reports on Form 10-Q.
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SOURCE CNX Resources Corporation; CNX Midstream Partners LP
PITTSBURGH, Dec. 26, 2017 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") announced that, upon the closing of the transaction contemplated by the agreement to purchase Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC (the "Agreement"), CNX expects to rebrand CONE Gathering and its subsidiaries, including CONE Midstream Partners, LP (NYSE: CNNX) ("CONE"), to conform to the CNX brand identity.
This rebranding initiative includes changing the name of CONE to "CNX Midstream Partners LP" and changing the ticker symbol from "CNNX" to "CNXM".
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or a loss of our competitive position because of overcapacity in this industry impairing our profitability; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; with respect to our proposed purchase of the 50% interest in CONE Gathering LLC from Noble Energy, - the disruption to our business, including customer, employee and supplier relationships resulting from this transaction, risks that the conditions to closing may not be satisfied and the purchase may not occur, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Dec. 15, 2017 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX") announced that it has entered into an agreement to purchase Noble Energy, Inc.'s (NYSE: NBL) ("Noble") 50% membership interest in CONE Gathering LLC ("CONE Gathering") for $305 million in cash and the mutual release of all outstanding claims. CONE Gathering holds all of the interests in CONE Midstream GP, LLC, which in turn holds the general partnership interest in CONE Midstream Partners, LP (NYSE: CNNX) ("CONE") and all of the incentive distribution rights in CONE. As a result of this transaction, CNX will own 100% of CONE Gathering, making CONE a single-sponsor master limited partnership.
"This transaction is expected to create significant value for both CNX and CONE," commented Nicholas J. DeIuliis, president and CEO. "As the single sponsor of CONE, CNX will benefit from increased flexibility with respect to the scope and timing of midstream development, which will enhance the value of existing development and create future opportunities such as future dropdowns and gathering more CNX volumes including dry Utica."
Completion of the Purchase Agreement is subject to customary closing conditions. The closing of the Purchase Agreement is not subject to a financing condition and is expected to close in the first quarter of 2018.
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation of the natural gas exploration and production company from the coal company on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or a loss of our competitive position because of overcapacity in this industry impairing our profitability; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Nov. 29, 2017 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) (CNX Resources or the Company), formerly named CONSOL Energy Inc., announced today that it has completed the spin-off of CONSOL Energy Inc. (NYSE: CEIX), formerly named CONSOL Mining Corporation, creating two publicly-traded companies--a natural gas exploration and production (E&P) company and a coal company. Today marks the first day of post-separation trading in each company's common stock on the New York Stock Exchange.
"Today's historic announcement is the culmination of a strategy over a decade in the making. Our objective was to once again transform a 150-year old institution, which owns and operates the best natural gas and coal assets in the world. We have accomplished that goal and, in doing so, positioned two new companies to dedicate singular focus to their individual industries and market segments. The E&P company is now one of the premiere pure-play natural gas E&P companies with a significant Marcellus and Utica Shale legacy acreage position, low-cost structure, and stacked pay opportunities, while the coal company holds some of the best coal assets in the world and is positioned to dominate the coal space for years to come," commented Nicholas J. DeIuliis, CNX Resources' President and Chief Executive Officer.
Under the terms of the separation, on November 28, 2017, the Company's stockholders received a distribution of one share of common stock of the newly named CONSOL Energy for every 8 shares of the Company's common stock held as of the close of business on the record date of November 15, 2017. No fractional shares of CONSOL Energy were issued and stockholders received cash in lieu of fractional shares. The Company's stockholders retained their shares of Company common stock, but as a result of the name change, these shares now represent shares of CNX Resources Corporation.
In connection with the distribution, the Company changed its name from CONSOL Energy Inc. to CNX Resources Corporation and retained its ticker symbol "CNX" on the New York Stock Exchange. At the same time, the newly formed CONSOL Mining Corporation changed its name to CONSOL Energy Inc. and its common stock begins trading today on the New York Stock Exchange under the ticker symbol "CEIX".
About CNX Resources
CNX Resources Corporation is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2016, CNX had 6.3 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) separated its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: the impact of the separation on our business; the expected tax treatment of the separation; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our natural gas liquids abroad; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of gathering, processing and transportation facilities and other systems that deliver our natural gas and natural gas liquids to market; a loss of our competitive position because of the competitive nature of the natural gas industry or a loss of our competitive position because of overcapacity in this industry impairing our profitability; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas operations; the effects gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas and oil reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by CONSOL Energy to satisfy liabilities it acquired from us in connection with the separation, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q.
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SOURCE CNX Resources Corporation
PITTSBURGH, Oct. 31, 2017 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) (CONSOL or the Company) announced today that its board of directors has given final approval of the Company's previously announced separation into two publicly-traded companies--a coal company and a natural gas exploration and production (E&P) company--and has declared a pro rata distribution of all of the outstanding shares of CONSOL Mining Corporation (CoalCo) common stock to the Company's stockholders.
Distribution Ratio
On November 28, 2017, the expected distribution date, CONSOL stockholders will receive one share of common stock of CoalCo for every eight shares of CONSOL common stock held as of the close of business on the record date of November 15, 2017. No fractional shares of CoalCo will be issued, and stockholders will receive cash in lieu of fractional shares. The distribution of CoalCo common stock will complete the separation of the coal business from the Company. After the distribution, CoalCo will be an independent, publicly-traded company and the Company will retain no ownership interest.
Names and Stock Trading Symbols of the Post-Separation Companies
In connection with the distribution, the current parent CONSOL Energy will change its name to CNX Resources Corporation, and will retain its ticker symbol "CNX" on the New York Stock Exchange. At the same time, CoalCo will change its name to CONSOL Energy Inc., and its common stock will trade on the New York Stock Exchange under the ticker symbol "CEIX". CONSOL stockholders will retain their shares of Company common stock, but as a result of the name change, these shares will represent shares of CNX Resources Corporation after the time of separation.
In addition, CNX Coal Resources LP will change its name to CONSOL Coal Resources LP. In connection with the name change, CNX Coal Resources will also change its NYSE ticker symbol to "CCR" from "CNXC", and its common units will continue to be listed on the NYSE.
Trading of Common Stock
Beginning on or about November 14, 2017, and continuing up to and through the distribution date, two markets are expected for CONSOL common stock: the "regular-way" market and the "ex-distribution" market. Shares that trade in the "regular-way" market will be entitled to shares of CoalCo common stock distributed pursuant to the distribution; shares that trade in the "ex-distribution" market will trade under the symbol CNX WI and without an entitlement to shares of CoalCo common stock distributed pursuant to the distribution. CoalCo anticipates "when-issued" trading of its common stock will begin on or about November 14, 2017, under the symbol CEIX WI, and will continue up to and through the distribution date. "Regular-way" trading in CoalCo's common stock is expected to begin on November 29, 2017. CONSOL Stockholders who sell their shares of CONSOL common stock in the "regular-way" market prior to November 29, 2017 will also be selling their entitlement to receive shares of CoalCo common stock in the distribution. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling Company or CoalCo common stock on or before the distribution date.
Distribution of the CoalCo Stock
Distribution of the stock dividend of shares of CoalCo common stock remains subject to the satisfaction or waiver of certain conditions described in CoalCo's Registration Statement on Form 10, as amended, including among others, the Securities and Exchange Commission (SEC) declaring the Form 10 effective. A copy of the final Form 10, as amended, will be available on the SEC website at www.sec.gov.
No action is required by CONSOL stockholders to receive shares of CoalCo common stock in the distribution. CONSOL expects to mail a notice of Internet availability of the information statement to all stockholders entitled to receive the distribution of shares of CoalCo common stock on or about November 3, 2017. The information statement is an exhibit to CoalCo's Registration Statement on Form 10 that describes CoalCo, including the risks of owning CoalCo common stock, and other details regarding the separation and distribution.
Share Repurchase Program
On September 5, 2017, CONSOL's board of directors approved a one-year share repurchase program of up to $200 million, under which approximately $81 million of its common stock had been repurchased as of October 30, 2017, at an average price of approximately $16.00 per share, through a Rule 10b5-1 plan that will terminate on November 1, 2017. On October 30, 2017, the board approved an increase in the aggregate amount of the repurchase plan to $450 million. CONSOL may determine, from time-to-time, to effect repurchases through open market purchases, Rule 10b5-1 plans, accelerated stock repurchases or derivative contracts. The timing of any repurchases will be based on a number of factors, including available liquidity, the Company's stock price, the company's financial outlook, and alternative investment options. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares and the Board's authorization of the program may be modified, suspended or discontinued at any time. The Board of Directors will continue to evaluate the size of the stock repurchase program based on CONSOL's free cash flow position, leverage ratio, and capital plans.
About CONSOL
CONSOL Energy Inc. is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The Company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2016, CONSOL had 6.3 trillion cubic feet equivalent of proved natural gas reserves. CONSOL is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
About CONSOL Mining
CONSOL Mining Corporation was formed in connection with the separation to hold CONSOL Energy Inc.'s coal business. Following the separation, CONSOL Mining Corporation will hold the assets and liabilities of CONSOL Energy Inc. relating to (i) its interests in the Pennsylvania Mining Complex, (ii) its interests in CNX Coal Resources LP, (iii) its wholly-owned terminal in the Port of Baltimore, and (iv) its greenfield reserves and certain related coal assets and liabilities.
Important Information about Company Names and Stock Trading Symbols
Effective November 28, 2017, the company known as CONSOL Energy Inc. (NYSE: CNX) expects to separate its gas business (GasCo or RemainCo) and its coal business (CoalCo or SpinCo) into two independent, publicly traded companies by means of a separation of CoalCo from RemainCo.
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties may be applicable to either, or both, of the GasCo and CoalCo following the separation and distribution, and relate to, among other matters, the following: uncertainties as to the timing and manner of the separation and whether it will be completed; the possibility that various closing conditions for the separation may not be satisfied; the impact of the separation on our business; the expected tax treatment of the separation; the risk that the coal and natural gas exploration and production businesses will not be separated successfully or such separation may be more difficult, time-consuming or costly than expected, which could result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management's attention from other business concerns; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas, natural gas liquids and coal are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas, natural gas liquids and coal affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our coal and natural gas liquids abroad; our customers extending existing contracts or entering into new long-term contracts for coal on favorable terms; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our natural gas, natural gas liquids and coal to market; a loss of our competitive position because of the competitive nature of the natural gas and coal industries, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and coal and for our securities; the risks inherent in natural gas and coal operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our coal mining and natural gas operations; obtaining and renewing governmental permits and approvals for our natural gas and coal operations; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas and coal operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas and coal operations; the effects of mine closing, reclamation, gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas, oil and coal reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by Murray Energy to satisfy liabilities it acquired from us, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; certain provisions in our multi-year coal sales contracts may provide limited protection during adverse economic conditions, and may result in economic penalties or permit the customer to terminate the contract; a majority of our limited partner interests in CNX Coal Resources LP and CONE Midstream Partners LP are subordinated, and we may not receive distributions from CNX Coal Resources LP or CONE Midstream Partners LP; with respect to the sale of the Buchanan and Amonate mines and other coal assets to Coronado IV LLC – any disruption to our business, including customer, employee and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating results; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC, as supplemented by our quarterly reports on Form 10-Q, and the factors described under the captions "Cautionary Statements Regarding Forward Looking Statements" and "Risk Factors" in the Form 10 filed with the SEC by CONSOL Mining Corporation, on July 11, 2017, as amended from time to time.
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SOURCE CONSOL Energy Inc.
PITTSBURGH, Oct. 26, 2017 /PRNewswire/ -- The Board of Directors of CNX Coal Resources GP LLC, the general partner of CNX Coal Resources LP (NYSE: CNXC), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The distribution to all unitholders of the Partnership will be made on November 15, 2017 to such holders of record at the close of business on November 8, 2017.
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
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SOURCE CNX Coal Resources LP
PITTSBURGH, Oct. 16, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) will issue its third quarter earnings release after the market close on Monday, October 30. This will be followed by a conference call hosted by members of the management team at 5:00 p.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.cnxlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
Participants should ask to be joined into the CNX Coal Resources earnings conference call. |
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Zach Smith, at (724) 485-4017 |
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SOURCE CNX Coal Resources LP
PITTSBURGH, Sept. 18, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) announced today that the Pennsylvania Department of Environmental Protection (DEP) is requiring more time to evaluate the approval of the Bailey mine permit for the 4L panel, and as a result, the company has decided to move the longwall to another panel in order to resume operations. The company expects the longwall move to last approximately four weeks and is implementing several measures in order to mitigate the production impact from this delay. These measures include working additional unscheduled shifts at the remaining four longwalls, compared to the previous five and a half day schedule. This operating schedule change will also allow the company to meet its customers' needs and to immediately recall some of the previously furloughed workers.
As a result of increasing the operating schedule to offset the production impact from the longwall move delay, the company reaffirms its previously stated full year 2017 guidance:
The company continues to work closely with the necessary agencies to obtain operating permits, which allow for continuity of longwall mining operations. The Pennsylvania Mining Complex operates five total longwalls with approved permits as far out as ten years in advance.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our 2016 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
1 Adjusted EBITDA is a non-GAAP financial measure defined as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CNX Coal Resources LP 2015 Long-Term Incentive Plan ("Unit Based Compensation"). At this time, CNXC is unable to provide a reconciliation of Adjusted EBITDA guidance to Net Income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
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SOURCE CNX Coal Resources LP
PITTSBURGH, Sept. 6, 2017 /PRNewswire/ -- Today, CNX Coal Resources LP (NYSE:CNXC) and OMNIS Bailey, LLC (OMNIS), announced a partnership to build a first-of-a-kind solid energy refinery. The refinery will be used for processing waste coal at CONSOL's Bailey Mine Complex and converting it into high-quality, Clean Carbon Fuel (CCF).
A pilot plant was constructed at the Bailey Central Preparation Plant in May of this year to allow for optimization of the production process and commercial-scale testing of CCF by power plant customers. Successful scale-up of the process is expected to provide dual benefits: (a) provide additional revenue streams from the sale of CCF and certain other byproducts having potential agricultural applications, and (b) reduce the environmental footprint of our operations by eliminating or greatly reducing the need for future fine coal refuse impoundments.
Jimmy Brock, CEO of CNX Coal Resources, said: "We're excited to partner with OMNIS on an innovative technology that we believe can help to revolutionize the coal industry. OMNIS's technology development program has shown promising progress toward enabling alternative uses for coal byproducts. Following successful pilot testing and scale-up of the refinery, we're optimistic that we will have a Clean Carbon Fuel product that can be used to further enhance the energy content and performance characteristics of our already high-Btu, high-quality coal product. Moreover, this project represents a major step in line with our stewardship commitments to reduce our environmental footprint by eliminating or greatly reducing the future need for fine coal refuse impoundments."
Simon Hodson, Chairman of OMNIS, states: "It just makes sense to further remove the impurities from coal before burning it. This is truly clean coal production in our view. It makes even more sense to return ancient mineral matter to depleted top soils to grow better quality food."
Charles Gassenheimer, CEO of OMNIS Bailey continues: "The impurities we are removing from coal are really fossilized mineral matter from plants. After several years of testing at USDA facilities, this topsoil has been shown to remediate mineral-depleted farmland, leading to both enhanced plant growth and nutritionally-superior food. Simply stated, we are creating two marketable products from coal waste that offer significant benefits to society – cleaner energy and better food."
About CNX Coal Resources LP
CNX Coal Resources (NYSE: CNXC) is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25 percent undivided interest in—and operational control over—CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information may be found at www.cnxlp.com.
Contacts:
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
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SOURCE CNX Coal Resources LP
PITTSBURGH, Sept. 5, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC), announced today that it is adjusting its previously announced 2017 guidance ranges based on the third quarter results to date and expectations for the rest of the year. The revised 2017 outlook is as follows:
Specifically, CNXC is reducing the top end of its adjusted EBITDA range to reflect ongoing mild weather trends in the third quarter of 2017 that have affected power demand in the PJM region. This reduced demand has resulted in lower pricing than forecasted in our contracts that are indexed to power prices. Crossover met coal sales to date have also been lower than expected resulting in somewhat lower realizations due to increasing discounts for our crossover product compared to the benchmark quality. Finally, our sales mix was also affected due to CSX-related logistics issues that we foreshadowed on our second quarter earnings call. We continue to work closely with our rail partners to effectuate improved efficiency.
On the operational front, the Enlow Fork mine encountered some unexpected geological conditions following a longwall move in the third quarter. The Bailey and Harvey mines have performed well during this time and Enlow Fork has been producing well since mid-August. As a result, we expect to be well within our sales guidance range of 6.4-6.9 million tons. While the Enlow Fork longwall has now moved out of the difficult geology and resumed a normal operational schedule, the resulting cash cost of coal sold is now expected to be modestly higher than previously anticipated, which also weighed on the EBITDA outlook. To reduce this adverse cost impact, CNXC has taken various steps including temporarily suspending the use of contractors, rationalizing other discretionary spending at the mine and lowering capital expenditures by approximately $3.0 million at the midpoint of the guidance range. Management is evaluating additional revenue enhancing and cost saving opportunities which it plans to discuss on its third quarter earnings call.
As of midnight last night, the Pennsylvania Department of Environmental Protection (DEP) has sought more time to review the technical merits of the permit submittal for continued longwall mining in the 4L panel at the company's Bailey Mine, in light of a recent Environmental Hearing Board decision. As a result, the longwall has been idled and workforce adjustments are being made. This is the first time in the 35-year history of the Bailey Mine that the company has failed to timely receive a needed mining permit. The company maintains that this permit meets the necessary criteria for approval, and the company is in ongoing communication with Pennsylvania Governor Wolf's office and the Secretary of the DEP asking that the permit be issued in order to enable the company to get its miners back to work and resume production. The Pennsylvania Mining Complex will lose approximately 25,000 tons of production per day as a result of this permit delay. While the company can make up some lost production in the fourth quarter, if the permit is not issued in the near future, additional layoffs will be likely and the impact on the company could be material. The EBITDA guidance provided above assumes that the permit is issued in the near future. The company hopes that the DEP resolves this matter quickly, and the company will provide updates as new information becomes available.
1 Adjusted EBITDA is a non-GAAP financial measure defined as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CNX Coal Resources LP 2015 Long-Term Incentive Plan ("Unit Based Compensation"). At this time, CNXC is unable to provide a reconciliation of Adjusted EBITDA guidance to Net Income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-coal-resources-updates-2017-outlook-300513623.html
SOURCE CNX Coal Resources LP
PITTSBURGH, July 31, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today reported financial and operating results for the quarter ended June 30, 2017.
Second Quarter 2017 Results
Highlights of the CNXC second quarter 2017 results include:
Management Comments
"The second quarter of 2017 was a very strong operational quarter despite soft demand in most of our markets compared to the first quarter. This was the third consecutive quarter in which the Pennsylvania Mining Complex (PAMC) produced above a 27 million ton (6.75 million tons for CNXC's 25% undivided interest) annualized run rate. The quarter once again demonstrated our ability to deliver solid results under changing market conditions." said Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP LLC (the "General Partner"). "The second quarter results continue our track record of delivering strong operational and sales performance, year-over-year earnings growth, significant cash generation and continued debt reduction, despite an inconsistent industry backdrop. With the second quarter results, we have achieved a leverage ratio below 2.0x, a key financial goal that we laid out in December 2016 for year-end 2017."
Sales & Marketing
CNXC had another solid sales quarter, delivering 1.7 million tons of coal to 42 different end users. During the quarter, we contracted additional tons for 2018, bringing our total contracted position to 68% of expected sales volumes for 2018 based on the midpoint of 2017 sales guidance. With over two-thirds of our 2018 volume contracted, we are very well-positioned heading into the upcoming utility contracting season, enabling us to be selective in constructing our portfolio to drive a higher weighted average realization and capture strategic customer plants. We continue to proactively work with customers to keep our coal competitive in the market place.
The CNXC marketing team was also successful in contracting significant volumes of coal for the 2019-2021 period. These new sales commitments are for volumes beyond the normal course of renewing or extending our existing contracts. While much has been discussed about the shrinking duration of utility contracts, our marketing team demonstrated our ability to enter into longer term (3+ years out) commitments with the right partners. Approximately 30% of the PAMC's 2019 planned production is now sold. We have built a solid base upon which to construct our future sales book.
As stated in previous releases, PAMC continues to grow its market share in traditional and non-traditional markets. During the second quarter, CNXC expanded its sales portfolio by adding three new international thermal customers and one new domestic metallurgical customer. These new avenues are a culmination of the strategic marketing efforts of our team and improvements in the sulfur content of coal produced by PAMC.
In the international markets, we have taken advantage of more than 50% year-over-year improvement in spot thermal coal prices during the second quarter to maintain strong export volumes and substantially improve our export realizations relative to the year-ago quarter.
For the remainder of 2017, as mines and railroads return from their annual maintenance shutdown periods, we expect demand for our production to increase in the domestic markets. It is also noteworthy that the U.S. Energy Information Administration's (EIA) latest inventory report indicated a weaker-than-expected stockpile build at coal-fired power plants, which is a positive development for coal producers. Power plant coal inventories ended the month of May at approximately 165 million tons, the lowest May inventory level since 2014 and approximately 28 million tons improved from May 2016 levels. With summer weather now upon most of the nation, we expect that power demand should increase coal and gas consumption, which will continue to draw down stockpiles and potentially improve pricing dynamics for coal. Looking forward, EIA is projecting that the Henry Hub spot natural gas price will average $3.10/mmBtu in 2017 and grow to $3.40/mmBtu in 2018. Our coal-fired customer plants are expected to dispatch well at these natural gas prices.
Operations Summary
Our operations team continues to deliver strong production volumes. For the second quarter, CNXC produced 1.7 million tons of coal, compared to 1.5 million tons in the year-ago quarter. More importantly, our productivity, as defined by tons per employee-hour, increased by 7% compared to the year-ago quarter. We sold 1.7 million tons of coal during the second quarter of 2017 compared to 1.5 million tons during the year-ago period. Our average realized price improved by 10% compared to the year-ago period, as the pricing on export shipments improved significantly. Export shipments accounted for approximately 31% of our total sales volume.
Our total cost of coal sold increased to $59.0 million during the second quarter, compared to $53.2 million during the year-ago quarter, driven primarily by higher coal sales volume. The average cost of coal sold1 in the quarter increased by 1.0% to $34.79 per ton, compared to $34.46 per ton in the year-ago quarter. Our average cash margin per ton sold1 improved by 23.9% compared to the year-ago quarter due to a higher average realized price.
Three Months Ended | ||||
June 30, 2017 |
June 30, 2016 | |||
Coal Production |
million tons |
1.7 |
1.5 | |
Coal Sales |
million tons |
1.7 |
1.5 | |
Average Revenue Per Ton |
per ton |
$44.75 |
$40.61 | |
Average Cost of Coal Sold |
per ton |
$34.79 |
$34.46 | |
Average Cash Margin Per Ton Sold |
per ton |
$15.67 |
$12.65 |
Note: The Partnership has recast the above table to retrospectively reflect the additional 5% ownership of PAMC completed September 30, 2016 as if the additional ownership interest was owned for all periods presented.
Quarterly Distribution
During the second quarter of 2017, CNXC generated net cash provided by operating activities of $23.1 million and distributable cash flow1 of $11.6 million, yielding a distribution coverage ratio of 1.0x1. Our distribution coverage ratio calculation is based on the estimated maintenance capital expenditure of $9.0 million, while our actual cash maintenance capital expenditure for the second quarter was $3.4 million. Based on our current outlook for the coal markets and distributable cash flow generated during the quarter, the Board of Directors of the general partner, has elected to pay a cash distribution of $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a cash distribution of approximately $0.4678 per unit to the holder of the convertible Class A Preferred Units. As previously announced on July 27, 2017, the distribution to all unitholders of the Partnership will be made on August 15, 2017 to such holders of record at the close of business on August 7, 2017.
Guidance and Outlook
Based on our current contracted position, production plans and outlook for the coal markets, we are maintaining our sales volume and Adjusted EBITDA outlook for 2017:
Second Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the second quarter of 2017 financial and operational results, is scheduled for July 31, 2017 at 5:00 PM EDT. Prepared remarks by members of management will be followed by a question and answer session. Interested parties may listen via webcast on the Events page of our website, www.cnxlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
1 "Adjusted EBITDA", "Distribution coverage ratio", "Distributable cash flow", "Average cost of coal sold", "Average cash margin per ton sold" and "Leverage ratio" are non-GAAP financial measures, which are reconciled to GAAP financial measures under the caption "Reconciliation of Non-GAAP Financial Measures".
2 CNXC is unable to provide a reconciliation of Adjusted EBITDA guidance to Net Income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
Reconciliation of Non-GAAP Financial Measures
We evaluate our 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, and depreciation, depletion and amortization costs. Our costs exclude any indirect costs such as general and administrative costs 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.
We define average cash margin per ton as average coal revenue per ton, net of average cost of coal sold per ton, less depreciation, depletion and amortization.
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CNX Coal Resources LP 2015 Long-Term Incentive Plan ("Unit Based Compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as Unit Based Compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital expenditures incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
We define leverage ratio as the ratio of net debt to last twelve month (LTM) earnings before interest expense, depreciation, depletion and amortization, adjusted for certain non-cash items, such as long-term incentive awards, amortization of debt issuance and capitalized interest.
The following table presents a reconciliation of cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | |||||||
2017 |
2016 | ||||||
Total Costs |
$ |
70,998 |
$ |
63,310 |
|||
Freight Expense |
(4,441) |
(2,797) |
|||||
Selling, General and Administrative Expenses |
(3,652) |
(1,969) |
|||||
Interest Expense |
(2,396) |
(2,076) |
|||||
Other Costs (Non-Production) |
(934) |
(2,564) |
|||||
Depreciation, Depletion and Amortization (Non-Production) |
(550) |
(749) |
|||||
Cost of Coal Sold |
$ |
59,025 |
$ |
53,155 |
The following table presents a reconciliation of average cash margin per ton for each of the periods indicated (in thousands, except per ton information).
Three Months Ended June 30, | |||||||
2017 |
2016 | ||||||
Total Coal Revenue |
$ |
75,927 |
$ |
62,640 |
|||
Operating and Other Costs |
50,232 |
46,046 |
|||||
Depreciation, Depletion and Amortization |
10,277 |
10,422 |
|||||
Less: Other Costs (Non-Production) |
(934) |
(2,564) |
|||||
Less: Depreciation, Depletion and Amortization (Non-Production) |
(550) |
(749) |
|||||
Total Cost of Coal Sold |
$ |
59,025 |
$ |
53,155 |
|||
Total Tons Sold |
1,697 |
1,543 |
|||||
Average Revenue Per Ton Sold |
$ |
44.75 |
$ |
40.61 |
|||
Average Cost Per Ton Sold |
34.79 |
34.46 |
|||||
Average Margin Per Ton Sold |
9.96 |
6.15 |
|||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold |
5.71 |
6.50 |
|||||
Average Cash Margin Per Ton Sold |
$ |
15.67 |
$ |
12.65 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended June 30, | ||||||||
2017 |
2016 | |||||||
Net Income |
$ |
11,474 |
$ |
3,907 |
||||
Plus: |
||||||||
Interest Expense |
2,396 |
2,076 |
||||||
Depreciation, Depletion and Amortization |
10,277 |
10,422 |
||||||
Unit Based Compensation |
841 |
307 |
||||||
Adjusted EBITDA |
$ |
24,988 |
$ |
16,712 |
||||
Less: |
||||||||
Cash Interest |
2,539 |
1,789 |
||||||
PA Mining Acquisition Adjusted EBITDA |
— |
3,368 |
||||||
Distributions to Preferred Units |
1,851 |
— |
||||||
Estimated Maintenance Capital Expenditures |
8,976 |
6,752 |
||||||
Distributable Cash Flow |
$ |
11,622 |
$ |
4,803 |
||||
Net Cash Provided by Operating Activities |
$ |
23,092 |
$ |
21,320 |
||||
Plus: |
||||||||
Interest Expense |
2,396 |
2,076 |
||||||
Other, Including Working Capital |
(500) |
(6,684) |
||||||
Adjusted EBITDA |
$ |
24,988 |
$ |
16,712 |
||||
Less: |
||||||||
Cash Interest |
2,539 |
1,789 |
||||||
PA Mining Acquisition Adjusted EBITDA |
— |
3,368 |
||||||
Distributions to Preferred Units |
1,851 |
— |
||||||
Estimated Maintenance Capital Expenditures |
8,976 |
6,752 |
||||||
Distributable Cash Flow |
$ |
11,622 |
$ |
4,803 |
||||
Distributions |
$ |
12,228 |
$ |
12,144 |
||||
Distribution Coverage |
1.0 |
0.4 |
Note: The above table reflects the additional 5% ownership of PAMC completed September 30, 2016 as if the additional ownership interest was owned for all periods presented.
The following table presents a reconciliation of leverage ratio (in thousands, except per ton information).
Twelve Months Ended | |||
June 30, 2017 | |||
Net Income |
$ |
43,668 |
|
Plus: |
|||
Interest Expense |
9,518 |
||
Depreciation, Depletion and Amortization |
42,053 |
||
Unit Based Compensation |
2,277 |
||
Capitalized Interest |
264 |
||
Amortization of Debt Issuance Costs |
(898) |
||
EBITDA Per Revolving Credit Agreement |
$ |
96,882 |
|
Borrowings on Revolving Credit Facility |
$ |
190,000 |
|
Capitalized Leases |
198 |
||
Total Debt |
190,198 |
||
Less: |
|||
Cash on Hand |
6,608 |
||
Net Debt Per Revolving Credit Agreement |
$ |
183,590 |
|
Leverage Ratio (Net Debt/EBITDA) |
1.9 |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our 2016 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CNX COAL RESOURCES LP EARNINGS SUMMARY (Dollars in thousands) (unaudited) | |||||||||||
For the Three Months Ended, | |||||||||||
June 30, | |||||||||||
2017 |
2016 |
Variance | |||||||||
Revenue: |
|||||||||||
Coal Revenue |
$ |
75,927 |
$ |
62,640 |
$ |
13,287 |
|||||
Freight Revenue |
4,441 |
2,797 |
1,644 |
||||||||
Other Income |
2,104 |
1,780 |
324 |
||||||||
Total Revenue and Other Income |
82,472 |
67,217 |
15,255 |
||||||||
Cost of Coal Sold: |
|||||||||||
Operating Costs |
49,298 |
43,482 |
5,816 |
||||||||
Depreciation, Depletion and Amortization |
9,727 |
9,673 |
54 |
||||||||
Total Cost of Coal Sold |
59,025 |
53,155 |
5,870 |
||||||||
Other Costs: |
|||||||||||
Other Costs |
934 |
2,564 |
(1,630) |
||||||||
Depreciation, Depletion and Amortization |
550 |
749 |
(199) |
||||||||
Total Other Costs |
1,484 |
3,313 |
(1,829) |
||||||||
Freight Expense |
4,441 |
2,797 |
1,644 |
||||||||
Selling, General and Administrative Expenses |
3,652 |
1,969 |
1,683 |
||||||||
Interest Expense |
2,396 |
2,076 |
320 |
||||||||
Total Costs |
70,998 |
63,310 |
7,688 |
||||||||
Net Income |
$ |
11,474 |
$ |
3,907 |
$ |
7,567 |
|||||
Limited Partner Units Outstanding - Basic |
23,329,702 |
23,222,134 |
108 |
||||||||
Limited Partner Units Outstanding - Diluted |
23,470,050 |
23,301,391 |
169 |
||||||||
Net Income Allocable to Limited Partner Units |
$ |
9,431 |
$ |
2,556 |
$ |
6,875 |
|||||
Net Income per Limited Partner Unit |
$ |
0.40 |
$ |
0.11 |
$ |
0.29 |
|||||
Adjusted EBITDA |
$ |
24,988 |
$ |
16,712 |
$ |
8,276 |
|||||
Distributable Cash Flow |
$ |
11,622 |
$ |
4,803 |
$ |
6,819 |
|||||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented.
CNX COAL RESOURCES LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) | |||||||
ASSETS |
June 30, |
December 31, | |||||
Current Assets: |
|||||||
Cash |
$ |
6,608 |
$ |
9,785 |
|||
Trade Receivables |
26,025 |
23,418 |
|||||
Other Receivables |
1,152 |
515 |
|||||
Inventories |
14,007 |
11,491 |
|||||
Prepaid Expenses |
2,680 |
3,512 |
|||||
Total Current Assets |
50,472 |
48,721 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
883,343 |
876,690 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
462,587 |
442,178 |
|||||
Total Property, Plant and Equipment—Net |
420,756 |
434,512 |
|||||
Other Assets: |
|||||||
Other |
19,107 |
21,063 |
|||||
Total Other Assets |
19,107 |
21,063 |
|||||
TOTAL ASSETS |
$ |
490,335 |
$ |
504,296 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
16,003 |
$ |
18,797 |
|||
Accounts Payable—Related Party |
2,196 |
1,666 |
|||||
Other Accrued Liabilities |
44,403 |
44,318 |
|||||
Total Current Liabilities |
62,602 |
64,781 |
|||||
Long-Term Debt: |
|||||||
Revolver, Net of Debt Issuance and Financing Fees |
187,292 |
197,843 |
|||||
Capital Lease Obligations |
109 |
146 |
|||||
Total Long-Term Debt |
187,401 |
197,989 |
|||||
Other Liabilities: |
|||||||
Pneumoconiosis Benefits |
2,613 |
2,057 |
|||||
Workers' Compensation |
3,131 |
3,090 |
|||||
Asset Retirement Obligations |
9,320 |
9,346 |
|||||
Other |
437 |
463 |
|||||
Total Other Liabilities |
15,501 |
14,956 |
|||||
TOTAL LIABILITIES |
265,504 |
277,726 |
|||||
Partners' Capital: |
|||||||
Class A Preferred Units (3,956,496 Units Outstanding at June 30, 2017 and December 31, |
69,151 |
69,151 |
|||||
Common Units (11,718,635 Units Outstanding at June 30, 2017; 11,618,456 Units Outstanding |
140,607 |
140,967 |
|||||
Subordinated Units (11,611,067 Units Outstanding at June 30, 2017 and December 31, 2016) |
(8,880) |
(7,631) |
|||||
General Partner Interest |
12,223 |
12,274 |
|||||
Accumulated Other Comprehensive Income |
11,730 |
11,809 |
|||||
Total Partners' Capital |
224,831 |
226,570 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
490,335 |
$ |
504,296 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented.
CNX COAL RESOURCES LP CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) | |||||||
Three Months Ended June 30, | |||||||
2017 |
2016 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
11,474 |
$ |
3,907 |
|||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating |
|||||||
Depreciation, Depletion and Amortization |
10,277 |
10,422 |
|||||
Gain on Sale of Assets |
(1,403) |
(1) |
|||||
Unit Based Compensation |
841 |
307 |
|||||
Other Adjustments to Net Income |
225 |
229 |
|||||
Changes in Operating Assets: |
|||||||
Accounts and Notes Receivable |
(882) |
1,596 |
|||||
Inventories |
(1,291) |
2,510 |
|||||
Prepaid Expenses |
837 |
1,201 |
|||||
Changes in Other Assets |
58 |
(1,456) |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
609 |
(1,399) |
|||||
Accounts Payable - Related Party |
432 |
(405) |
|||||
Other Operating Liabilities |
1,944 |
2,899 |
|||||
Changes in Other Liabilities |
(29) |
1,510 |
|||||
Net Cash Provided by Operating Activities |
23,092 |
21,320 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(3,442) |
(3,276) |
|||||
Proceeds from Sales of Assets |
1,500 |
— |
|||||
Net Cash Used in Investing Activities |
(1,942) |
(3,276) |
|||||
Cash Flows from Financing Activities: |
|||||||
Payments on Miscellaneous Borrowings |
(26) |
(24) |
|||||
Payments on Revolver |
(7,000) |
(2,000) |
|||||
Payments for Unitholder Distributions |
(14,050) |
(12,144) |
|||||
Net Change in Parent Advances |
— |
(4,047) |
|||||
Net Cash Used in Financing Activities |
(21,076) |
(18,215) |
|||||
Net Increase (Decrease) in Cash |
74 |
(171) |
|||||
Cash at Beginning of Period |
6,534 |
9,134 |
|||||
Cash at End of Period |
$ |
6,608 |
$ |
8,963 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented.
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-coal-resources-lp-announces-results-for-the-second-quarter-2017-300496852.html
SOURCE CNX Coal Resources LP
PITTSBURGH, July 27, 2017 /PRNewswire/ -- The Board of Directors of CNX Coal Resources GP LLC, the general partner of CNX Coal Resources LP (NYSE: CNXC), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a full cash distribution of approximately $0.4678 per unit to the holder of the convertible Class A Preferred Units. The distribution to all unitholders of the Partnership will be made on August 15, 2017 to such holders of record at the close of business on August 7, 2017.
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
View original content with multimedia:http://www.prnewswire.com/news-releases/cnx-coal-resources-announces-distribution-for-second-quarter-of-2017-300495773.html
SOURCE CNX Coal Resources LP
PITTSBURGH, July 11, 2017 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) (Company) announced today the filing of a registration statement on Form 10 with the U.S. Securities and Exchange Commission (SEC), an important milestone in the Company's previously announced plan to separate CONSOL Energy Inc. into two publicly-traded companies: a coal company and a natural gas exploration and production (E&P) company. The spin-off would provide current shareholders ownership in two leading and focused companies, each positioned to capitalize on distinct opportunities for future growth and profitability.
"Today's filing represents a significant step towards completing the Company's separation, with both entities being well capitalized and free cash flow generating. This strategic separation will enable both businesses to focus on their inherent strengths and unlock value for their shareholders," commented Nicholas J. DeIuliis, the Company's President and Chief Executive Officer.
The initial Form 10, which was filed by CONSOL Mining Corporation, a subsidiary of the Company that will hold the coal business at the time of the spin-off, includes detailed information about the coal business, including historical financial information. The coal business will be comprised of the Pennsylvania Mining Complex (consisting of the Bailey Mine, the Enlow Fork Mine and the Harvey Mine and the related coal preparation plant), the Company's ownership interest in CNX Coal Resources LP, a publicly traded master limited partnership that owns a 25% undivided interest in the Pennsylvania Mining Complex (NYSE: CNXC), the coal export terminal at the Port of Baltimore, undeveloped coal reserves located in the Northern Appalachian, Central Appalachian and Illinois basins, and certain related coal assets and liabilities. The initial Form 10 is preliminary and subject to change prior to completion of the separation.
As disclosed in the Form 10, Jimmy Brock has been appointed as Chief Executive Officer of the coal business and Katharine Fredriksen as President of the coal business. Effective August 2, 2017, David Khani will serve as Chief Financial Officer of the coal business and Don Rush, a current Vice President of the Company, will assume the role of Executive Vice President and Chief Financial Officer of the Company. After the separation, Nick DeIuliis will serve as the President and Chief Executive Officer of the E&P business and Don Rush will serve as the Executive Vice President and Chief Financial Officer of the E&P business.
About Jimmy Brock
Jimmy Brock currently serves as the Chief Executive Officer of the coal business, the Chief Operating Officer – Coal of the Company, and the Chief Executive Officer and director of the general partner of CNX Coal Resources, LP. With a career in coal spanning five decades, Mr. Brock's vast operational and leadership experience in the industry will continue to be an invaluable asset to the employees and shareholders of the new coal business.
About Katharine Fredriksen
Katharine Fredriksen, who formerly served as the Senior Vice President for Diversified Business Units and Environmental Affairs of the Company, has assumed the role of President of the coal business. Ms. Fredriksen has been responsible for the management of the Company's health, safety and environmental matters, including management of the Company's environmental legacy coal liabilities. She also has had responsibility for overseeing the operation of the company's Baltimore Marine Terminal and Central Appalachian mining operations. Previously, Ms. Fredriksen served in the George W. Bush administration as Assistant Secretary and Principal Deputy Assistant Secretary for the Office of Policy and International Affairs at the U.S. Department of Energy.
About David Khani
David Khani, Executive Vice President and Chief Financial Officer of the Company, will assume the same role with the newly formed coal entity effective August 2, 2017. Mr. Khani joined the Company in 2011 as Vice President of Finance where he played a key role in the growth of the Company's E&P business and is deeply involved in the ultimate separation of the coal and E&P businesses. Before joining the Company, Mr. Khani served as the Director of Research at FBR Capital Markets and Co. Mr. Khani previously served as Managing Director and head of FBR's Energy and Natural Resources Group covering the coal mining space.
About Don Rush
Don Rush, the Company's Vice President for Energy Marketing, will assume the role of Chief Financial Officer of the Company effective August 2, 2017. Having served in numerous leadership roles during his career with the Company, Mr. Rush has effectively guided the Company through every significant transaction during its transformative journey into a pure play natural gas exploration and production company, including the sale of the company's five West Virginia mines in 2013 and the dissolution of the Company's Marcellus Shale joint venture with Noble Energy, Inc. He currently oversees the Company's commercial functions, including mergers and acquisitions, gas marketing and transportation.
The Form 10 also contemplates that the coal business will operate under the name CONSOL Energy Inc. after the spin-off, and that the E&P company will operate under a new name that will be announced at a later date.
The spin-off remains subject to the satisfaction of certain conditions, including, among others, obtaining final approval from the Company's Board of Directors and the SEC declaring the Form 10 effective. A copy of the initial Form 10 is available on the SEC website at www.sec.gov and on the Investor Relations section of the Company's website: http://investors.consolenergy.com/.
The Company remains committed to separating its coal and gas businesses and expects to be in a position to complete the separation as early as 2017.
Second Quarter 2017 Earnings Release and Conference Call Schedule
Separately, the Company will issue its second quarter earnings release at 6:45 a.m. Eastern Time on Tuesday, August 1. This will be followed by a conference call at 10:00 a.m. Eastern Time. A live webcast will be available on the 'Investor Relations' page of the company's website, www.consolenergy.com. Also, earnings call slides will be available at 6:45 a.m. Eastern Time on Tuesday, August 1, on the 'Investor Relations' page of the company's website.
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, are forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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, including the potential separation, and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: uncertainties as to the timing and manner of the separation (whether by sale or spin-off) and whether it will be completed (including any dropdowns of the coal business); the possibility that various closing conditions for the separation may not be satisfied; the impact of the separation on our business; the expected tax treatment of the separation; the risk that the coal and natural gas exploration and production businesses will not be separated successfully or such separation may be more difficult, time-consuming or costly than expected, which could result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management's attention from other business concerns; competitive responses to the separation; deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas, natural gas and other liquids and coal are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas, natural gas liquids and coal affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our coal and natural gas liquids abroad; our customers extending existing contracts or entering into new long-term contracts for coal on favorable terms; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our natural gas, natural gas liquids and coal to market; a loss of our competitive position because of the competitive nature of the natural gas and coal industries, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and coal and for our securities; the risks inherent in natural gas and coal operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions which could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our mining and transportation operations; obtaining and renewing governmental permits and approvals for our natural gas and coal operations; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas and coal operations; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of water used or removed from strata in connection with our natural gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current natural gas and coal operations; the effects of mine closing, reclamation, gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable natural gas, oil and coal reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for natural gas and coal rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, which are more fully described in our reports filed under the Securities Exchange Act of 1934; exposure to employee-related long-term liabilities; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; our participation in joint ventures may restrict our operational and corporate flexibility, and actions taken by a joint venture partner may impact our financial position and operational results; risks associated with our debt; replacing our natural gas and oil reserves, which if not replaced, will cause our natural gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from near-term price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by Murray Energy to satisfy liabilities it acquired from us, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; certain provisions in our multi-year coal sales contracts may provide limited protection during adverse economic conditions, and may result in economic penalties or permit the customer to terminate the contract; a majority of our common units in CNX Coal Resources LP and CONE Midstream Partners LP are subordinated, and we may not receive distributions from CNX Coal Resources LP or CONE Midstream Partners LP; with respect to the sale of the Buchanan and Amonate mines and other coal assets to Coronado IV LLC - disruption to our business, including customer, employee and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating results; with respect to the termination of the joint venture with Noble - disruption to our business, including customer and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results and liquidity; other factors discussed in the 2016 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission. We disclaim any 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.
PITTSBURGH, July 7, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) will issue its second quarter earnings release after the market close on Monday, July 31. This will be followed by a conference call hosted by members of the management team at 5:00 p.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.cnxlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participant dial in (toll free) 1-855-656-0928
Participant international dial in 1-412-902-4112
Participants should ask to be joined into the CNX Coal Resources earnings conference call.
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com
Contacts:
Investor:
Mitesh Thakkar, at (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, at (724) 485-4017
zacherysmith@cnxlp.com
SOURCE CNX Coal Resources LP
PITTSBURGH, May 1, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today reported financial and operating results for the quarter ended March 31, 2017.
First Quarter 2017 Results
Highlights of the CNXC first quarter 2017 results include:
Management Comments
"Despite abnormally soft winter heating demand, the CNXC team delivered very strong operational and financial results during the first quarter of 2017. We were able to achieve near-record sales and production volumes, higher revenue per ton, and solid cost performance." said Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP LLC (the "General Partner"). "The results also reflect the second consecutive quarter of year-over-year earnings growth, strong coverage ratio, and continued reduction in indebtedness, since we completed the acquisition of additional interest in the Pennsylvania mining complex (PAMC) in the third quarter of 2016. I am also pleased to announce that the complex is exceeding the management team's expectations for incremental earnings contribution since the acquisition."
"On the safety front, our central preparation plant continued its excellent performance by working another quarter without an exception. This achievement marks the eighth consecutive exception-free quarter for the plant. The mining operations were also able to improve their safety performance by reducing their number of exceptions by 40% compared to the same period last year. Safety is our top value and we continue to seek further improvement."
Sales & Marketing
In spite of another mild winter, our coal sales improved substantially during the first quarter compared to the year-ago period, as higher natural gas prices and more normal coal inventory levels supported improved demand from our domestic power plant customers. Furthermore, tighter supply/demand fundamentals in the international coal markets also led to increased volumes and pricing for our crossover metallurgical and thermal coal exports.
During the first quarter, sales volumes increased in all three of our primary market areas - domestic thermal, export thermal, and export crossover metallurgical - compared to the year-ago period. Specifically, we posted near-record sales of 1.7 million tons in the first quarter vs. 1.3 million tons in the year-ago period. On the domestic front, Henry Hub spot natural gas prices averaged $3.02/mmBtu for the first quarter, up 51% from the average of $1.99/mmBtu in the year-ago quarter. Moreover, U.S. coal-fired power plant inventories stood at 164 million tons at the beginning of 2017, down 16% from 196 million tons at the beginning of 2016. These factors helped to support solid first quarter shipments of PAMC coal to our domestic thermal coal customers, which were up by about 270 thousand tons year-over-year. On the export front, market conditions were much-improved in the first quarter compared to the year-ago period, with the global coking coal benchmark up by about 250% and the API2 index (for coal delivered into Europe) up by more than 70%. This stronger export pricing drove an increase in our overall revenue per ton, which reached $46.80 in the first quarter, compared to $42.99 for the year-ago period.
The first quarter of 2017 was the second-warmest on record for the lower 48 states. This exerted downward pressure on power prices throughout the quarter, which led to a slowdown in domestic customer shipments and contracting activity during the latter part of the quarter. However, our marketing team continues to work with customers to stay on pace and take advantage of higher natural gas prices that have sustained into the shoulder period. During the first quarter, CNXC was successful in signing an annual contract with a new customer as the end-user looked for an alternative supplier to help transition away from Central Appalachian coal. In the international markets, we continue to ship volumes into the crossover metallurgical coal market, and we increased our first quarter crossover volume by 37% year-over-year. Based on our updated coal sales guidance range, we are approximately 95% contracted for 2017 and 64% contracted for 2018. We believe our contracted position is well-balanced in hedging against market downside risk while allowing us to continue to build out the portfolio strategically and opportunistically as the market evolves.
Looking forward, there is a growing consensus that increasing natural gas exports and modestly increasing domestic demand will tighten the supply/demand balance and drive up natural gas prices, with EIA now projecting that the Henry Hub spot natural gas price will average $3.10/mmBtu in 2017 and grow to $3.45/mmBtu in 2018. Our coal-fired customer plants are expected to dispatch well at these prices. EIA now projects that electric power sector coal consumption will improve by 17 million tons in 2018 relative to 2016 levels as coal recaptures share from gas in the generation mix. Furthermore, EIA projects that year-end power plant coal inventories will remain below 150 million tons in both 2017 and 2018. In the more immediate term, Cyclone Debbie, which made landfall on March 28, 2017, has caused a substantial disruption in coal exports from Australia, with one of the country's key rail lines impaired for approximately one month and recently re-opened at reduced capacity. We expect that this will help to support continued demand for our export products in the near-term, as international metallurgical coal spot prices have risen rapidly, and thermal coal demand could also see some benefit as more crossover tons move into the metallurgical market. We will continue to capitalize on our broad market reach and our low-cost, flexible operations to maximize margins as these market opportunities unfold.
Quarterly Distribution
During the first quarter, CNXC generated net cash provided by operating activities of $17.7 million and distributable cash flow1 of $14.9 million, yielding a distribution coverage ratio of 1.2x1. We note that our distribution coverage ratio calculation is based on the estimated maintenance capital expenditure of $9.0 million, while our actual cash maintenance capital expenditure for the first quarter was $2.0 million. Based on our current outlook for the coal markets and distributable cash flow generated during the quarter, the Board of Directors of the general partner, has elected to pay a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a full cash distribution of approximately $0.4678 per unit to the holders of the convertible Class A Preferred Units. The distribution to all unitholders of the Partnership will be made on May 15, 2017 to such holders of record at the close of business on May 8, 2017.
Shelf Registration
On February 8, 2017, we filed a shelf registration statement with the Securities and Exchange Commission. Subsequently, the shelf became effective and allows CNX Coal Resources the flexibility to offer and sell, from time to time over a three-year period, in one or more public offerings up to a total aggregate of up to $750 million of: (i) common units representing limited partnership interests of the Company; (ii) preferred units representing limited partnership interest of the Company; and (iii) debt securities. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities of CNX Coal Resources or its subsidiaries.
Operations Summary
Our operations team delivered strong production volumes for the quarter despite two longwall moves at Bailey mine and tough geological conditions at Enlow Fork mine. With domestic and international demand remaining strong for most of the quarter, our marketing team was successful in lining up a near-record shipment schedule. The operations team took advantage of this opportunity and mobilized additional shifts during the weekends to deliver a strong first quarter production. Looking forward, we expect geological conditions at Enlow Fork mine to improve in the second quarter as we have moved past some of the most difficult geology and production is expected to normalize.
We sold 1.7 million tons of coal during the first quarter of 2017 compared to 1.3 million tons in the year ago period. The average realized price improved by 9% compared to the year-ago period, as the pricing on export shipments improved significantly. Our total cost of coal sold increased to $58.4 million during the first quarter compared to $43.6 million in the year-ago quarter driven primarily by higher coal sales volume. The average cost of coal sold1 in the quarter increased 4.1% to $34.52 per ton, compared to $33.16 per ton in the year-ago quarter. The increase in unit costs was driven by mobilization of additional resources for the development of longwall panels, demanding geological conditions at Enlow Fork mine and increased equipment maintenance compared to year-ago quarter. Despite this increase in our average cost of coal sold, our average cash margin per ton sold1 improved by 10.9% compared to the year-ago quarter due to higher average realized price.
Three Months Ended | ||||
March 31, 2017 |
March 31, 2016 | |||
Coal Production |
million tons |
1.7 |
1.4 | |
Coal Sales |
million tons |
1.7 |
1.3 | |
Average Realized Price |
per ton |
$46.80 |
$42.99 | |
Average Cost of Coal Sold |
per ton |
$34.52 |
$33.16 |
Note: The Partnership has recast the above table to retrospectively reflect the additional 5% ownership of PAMC completed September 30, 2016 as if the additional ownership interest was owned for all periods presented.
Guidance and Outlook
Based on our current contracted position, production plans and outlook for the coal markets, we are increasing our sales volume and Adjusted EBITDA outlook compared to our previously announced guidance ranges for 2017 as follows:
First Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the first quarter of 2017 financial and operational results, is scheduled for May 1, 2017 at 5:00 PM 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 page of our website, www.cnxlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
1 "Adjusted EBITDA", "Distribution coverage ratio", "Distributable cash flow", "Average cost of coal sold" and "Average cash margin per ton sold" are non-GAAP financial measures, which are reconciled to GAAP net income under the caption "Reconciliation of Non-GAAP Financial Measures"
2 CNXC is unable to provide a reconciliation of Adjusted EBITDA guidance to Net Income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
Reconciliation of Non-GAAP Financial Measures
We evaluate our 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, and depreciation, depletion and amortization costs. Our costs exclude any indirect costs such as general and administrative costs 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.
We define average cash margin per ton as average coal revenue per ton, net of average cost of coal sold per ton, less depreciation, depletion and amortization.
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards including phantom units under the CNX Coal Resources LP 2015 Long-Term Incentive Plan ("Unit Based Compensation"). The GAAP measure most directly comparable to adjusted EBITDA is net income.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit based compensation, less net cash interest paid and estimated maintenance capital expenditures, which is defined as those forecasted average capital expenditures required to maintain, over the long-term, the operating capacity of our capital assets. These estimated capital expenditures do not reflect the actual cash capital incurred in the period presented. Distributable cash flow will not reflect changes in working capital balances. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities.
The following table presents a reconciliation of cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Total Costs |
$ |
69,214 |
$ |
55,982 |
|||
Freight Expense |
(3,070) |
(3,269) |
|||||
Selling, General and Administrative Expenses |
(3,283) |
(1,928) |
|||||
Interest Expense |
(2,457) |
(1,978) |
|||||
Other Costs (Non-Production) |
(1,493) |
(3,632) |
|||||
Depreciation, Depletion and Amortization (Non-Production) |
(550) |
(1,558) |
|||||
Cost of Coal Sold |
$ |
58,361 |
$ |
43,617 |
The following table presents a reconciliation of average cash margin per ton for each of the periods indicated (in thousands, except per ton information).
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Total Coal Revenue |
$ |
79,112 |
$ |
56,541 |
|||
Operating and Other Costs |
49,883 |
38,490 |
|||||
Depreciation, Depletion and Amortization |
10,521 |
10,317 |
|||||
Less: Other Costs (Non-Production) |
(1,493) |
(3,632) |
|||||
Less: Depreciation, Depletion and Amortization (Non-Production) |
(550) |
(1,558) |
|||||
Total Cost of Coal Sold |
$ |
58,361 |
$ |
43,617 |
|||
Total Tons Sold |
1,690 |
1,315 |
|||||
Average Sales Price Per Ton Sold |
$ |
46.80 |
$ |
42.99 |
|||
Average Cost Per Ton Sold |
34.52 |
33.16 |
|||||
Average Margin Per Ton Sold |
12.28 |
9.83 |
|||||
Add: Total Depreciation, Depletion and Amortization Costs Per Ton Sold |
5.77 |
6.45 |
|||||
Average Cash Margin Per Ton Sold |
$ |
18.05 |
$ |
16.28 |
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each of the periods indicated (in thousands).
Three Months Ended March 31, | ||||||||
2017 |
2016 | |||||||
Net Income |
$ |
14,066 |
$ |
3,816 |
||||
Plus: |
||||||||
Interest Expense |
2,457 |
1,978 |
||||||
Depreciation, Depletion and Amortization |
10,521 |
10,317 |
||||||
Unit Based Compensation |
866 |
308 |
||||||
Adjusted EBITDA |
$ |
27,910 |
$ |
16,419 |
||||
Less: |
||||||||
Cash Interest |
2,161 |
1,967 |
||||||
PA Mining Acquisition Adjusted EBITDA |
— |
3,365 |
||||||
Distributions to Preferred Units |
1,851 |
— |
||||||
Estimated Maintenance Capital Expenditures |
8,989 |
6,700 |
||||||
Distributable Cash Flow |
$ |
14,909 |
$ |
4,387 |
||||
Net Cash Provided by Operating Activities |
$ |
17,662 |
$ |
3,511 |
||||
Less: |
||||||||
Interest Expense |
2,457 |
1,978 |
||||||
Other, Including Working Capital |
(12,705) |
(14,886) |
||||||
Adjusted EBITDA |
$ |
27,910 |
$ |
16,419 |
||||
Less: |
||||||||
Cash Interest |
2,161 |
1,967 |
||||||
PA Mining Acquisition Adjusted EBITDA |
— |
3,365 |
||||||
Distributions to Preferred Units |
1,851 |
— |
||||||
Estimated Maintenance Capital Expenditures |
8,989 |
6,700 |
||||||
Distributable Cash Flow |
$ |
14,909 |
$ |
4,387 |
||||
Distributions Declared |
$ |
12,228 |
$ |
12,144 |
||||
Distribution Coverage |
1.22 |
0.36 |
||||||
Note: The above table reflects the additional 5% ownership of PAMC completed September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our 2016 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CNX COAL RESOURCES LP EARNINGS SUMMARY (Dollars in thousands) (unaudited) | |||||||||||
For the Three Months Ended, | |||||||||||
March 31, | |||||||||||
2017 |
2016 |
Variance | |||||||||
Revenue: |
|||||||||||
Coal Revenue |
$ |
79,112 |
$ |
56,541 |
$ |
22,571 |
|||||
Freight Revenue |
3,070 |
3,269 |
(199) |
||||||||
Other Income |
1,098 |
(12) |
1,110 |
||||||||
Total Revenue and Other Income |
83,280 |
59,798 |
23,482 |
||||||||
Cost of Coal Sold: |
|||||||||||
Operating Costs |
48,390 |
34,858 |
13,532 |
||||||||
Depreciation, Depletion and Amortization |
9,971 |
8,759 |
1,212 |
||||||||
Total Cost of Coal Sold |
58,361 |
43,617 |
14,744 |
||||||||
Other Costs: |
|||||||||||
Other Costs |
1,493 |
3,632 |
(2,139) |
||||||||
Depreciation, Depletion and Amortization |
550 |
1,558 |
(1,008) |
||||||||
Total Other Costs |
2,043 |
5,190 |
(3,147) |
||||||||
Freight Expense |
3,070 |
3,269 |
(199) |
||||||||
Selling, General and Administrative Expenses |
3,283 |
1,928 |
1,355 |
||||||||
Interest Expense |
2,457 |
1,978 |
479 |
||||||||
Total Costs |
69,214 |
55,982 |
13,232 |
||||||||
Net Income |
$ |
14,066 |
$ |
3,816 |
$ |
10,250 |
|||||
Net Income Allocable to Limited Partner Units - Basic |
$ |
11,972 |
$ |
2,448 |
$ |
9,524 |
|||||
Net Income Allocable to Limited Partner Units - Diluted |
$ |
13,823 |
$ |
2,448 |
$ |
11,375 |
|||||
Adjusted EBITDA |
$ |
27,910 |
$ |
16,419 |
$ |
11,491 |
|||||
Distributable Cash Flow |
$ |
14,909 |
$ |
4,387 |
$ |
10,522 |
|||||
Net Income per Limited Partner Unit - Basic |
$ |
0.51 |
$ |
0.11 |
$ |
0.40 |
|||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.50 |
$ |
0.11 |
$ |
0.39 |
|||||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
CNX COAL RESOURCES LP CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) | |||||||
ASSETS |
March 31, |
December 31, | |||||
Current Assets: |
|||||||
Cash |
$ |
6,534 |
$ |
9,785 |
|||
Trade Receivables |
25,028 |
23,418 |
|||||
Other Receivables |
1,267 |
515 |
|||||
Inventories |
12,716 |
11,491 |
|||||
Prepaid Expenses |
3,517 |
3,512 |
|||||
Total Current Assets |
49,062 |
48,721 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
879,689 |
876,690 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
452,527 |
442,178 |
|||||
Total Property, Plant and Equipment—Net |
427,162 |
434,512 |
|||||
Other Assets: |
|||||||
Other |
19,341 |
21,063 |
|||||
Total Other Assets |
19,341 |
21,063 |
|||||
TOTAL ASSETS |
$ |
495,565 |
$ |
504,296 |
|||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
15,221 |
$ |
18,797 |
|||
Accounts Payable—Related Party |
1,764 |
1,666 |
|||||
Other Accrued Liabilities |
42,461 |
44,318 |
|||||
Total Current Liabilities |
59,446 |
64,781 |
|||||
Long-Term Debt: |
|||||||
Revolver, Net of Debt Issuance and Financing Fees |
194,068 |
197,843 |
|||||
Capital Lease Obligations |
130 |
146 |
|||||
Total Long-Term Debt |
194,198 |
197,989 |
|||||
Other Liabilities: |
|||||||
Pneumoconiosis Benefits |
2,336 |
2,057 |
|||||
Workers' Compensation |
3,036 |
3,090 |
|||||
Asset Retirement Obligations |
9,490 |
9,346 |
|||||
Other |
453 |
463 |
|||||
Total Other Liabilities |
15,315 |
14,956 |
|||||
TOTAL LIABILITIES |
268,959 |
277,726 |
|||||
Partners' Capital: |
|||||||
Class A Preferred Units (3,956,496 Units Outstanding at March 31, 2017 and December 31, |
69,151 |
69,151 |
|||||
Common Units (11,718,635 Units Outstanding at March 31, 2017; 11,618,456 Units |
141,035 |
140,967 |
|||||
Subordinated Units (11,611,067 Units Outstanding at March 31, 2017 and December 31, 2016) |
(7,624) |
(7,631) |
|||||
General Partner Interest |
12,274 |
12,274 |
|||||
Accumulated Other Comprehensive Income |
11,770 |
11,809 |
|||||
Total Partners' Capital |
226,606 |
226,570 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
495,565 |
$ |
504,296 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
CNX COAL RESOURCES LP CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
14,066 |
$ |
3,816 |
|||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating |
|||||||
Depreciation, Depletion and Amortization |
10,521 |
10,317 |
|||||
Loss on Sale of Assets |
3 |
13 |
|||||
Unit Based Compensation |
866 |
308 |
|||||
Other Adjustments to Net Income |
224 |
220 |
|||||
Changes in Operating Assets: |
|||||||
Accounts and Notes Receivable |
(2,362) |
(4,527) |
|||||
Inventories |
(1,225) |
(1,388) |
|||||
Prepaid Expenses |
(5) |
563 |
|||||
Changes in Other Assets |
268 |
(2,428) |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
(3,069) |
(954) |
|||||
Accounts Payable - Related Party |
98 |
(2,670) |
|||||
Other Operating Liabilities |
(1,860) |
60 |
|||||
Changes in Other Liabilities |
137 |
181 |
|||||
Net Cash Provided by Operating Activities |
17,662 |
3,511 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(2,030) |
(3,225) |
|||||
Proceeds from Sales of Assets |
— |
20 |
|||||
Net Cash Used in Investing Activities |
(2,030) |
(3,205) |
|||||
Cash Flows from Financing Activities: |
|||||||
Payments on Miscellaneous Borrowings |
(26) |
(12) |
|||||
Net (Payments on) Proceeds from Revolver |
(4,000) |
15,000 |
|||||
Payment for Unitholder Distributions |
(14,050) |
(12,144) |
|||||
Tax Cost from Unit-Based Compensation |
(807) |
— |
|||||
Net Change in Parent Advances |
— |
(550) |
|||||
Net Cash (Used in) Provided by Financing Activities |
(18,883) |
2,294 |
|||||
Net (Decrease) Increase in Cash |
(3,251) |
2,600 |
|||||
Cash at Beginning of Period |
9,785 |
6,534 |
|||||
Cash at End of Period |
$ |
6,534 |
$ |
9,134 |
|||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of PAMC completed on September 30, 2016 as if the additional ownership interest was owned for all periods presented. |
SOURCE CNX Coal Resources LP
PITTSBURGH, April 26, 2017 /PRNewswire/ -- The Board of Directors of CNX Coal Resources GP LLC, the general partner of CNX Coal Resources LP (NYSE: CNXC), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a full cash distribution of approximately $0.4678 per unit to the holders of the convertible Class A Preferred Units. The distribution to all unitholders of the Partnership will be made on May 15, 2017 to such holders of record at the close of business on May 8, 2017.
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Zach Smith, (724) 485-4017
zacherysmith@cnxlp.com
SOURCE CNX Coal Resources LP
PITTSBURGH, April 7, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) will issue its first quarter earnings release after the market close on Monday, May 1. This will be followed by a conference call hosted by members of the management team at 5:00 p.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.cnxlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
Participants should ask to be joined into the CNX Coal Resources earnings conference call. |
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com.
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Zach Smith, at (724) 485-4017 |
SOURCE CNX Coal Resources LP
PITTSBURGH, Jan. 30, 2017 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today reported financial and operating results for the quarter ended December 31, 2016.
Fourth Quarter 2016 Results
Highlights of the CNXC fourth quarter 2016 results include:
Management Comments
"I am very excited to report that the CNXC team performed extremely well on multiple fronts during the fourth quarter of 2016," said Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP LLC (the "General Partner"). "The operational team responded to the opportunities created in the domestic and seaborne markets and produced record volumes this quarter for the Pennsylvania mining complex (the "PAMC"). Our marketing team delivered these record production volumes to our customers as coal regained market share from natural gas and coal export markets remained strong. From a financial standpoint, these record shipments helped us achieve a distribution coverage ratio of 1.0x and generated net cash provided by operating activities of $25.8 million during the quarter."
"On the safety front, I am pleased to announce that our central preparation plant delivered another full quarter without any safety exceptions. This is the seventh consecutive exception-free quarter for the preparation plant. For the PAMC in its entirety, we were also successful in reducing the severity of our exceptions compared to the same period last year. Safety remains our top core value and we continue to strive for further improvements."
Sales & Marketing
We sold a record 1.8 million tons of coal during the quarter, of which approximately 8.5% was ultimately delivered to end users in the high-vol metallurgical coal markets in Asia and South America. More importantly, we also improved the average realized price by approximately 2% compared to the previous quarter. For the full year 2016, we sold 6.2 million tons of coal, which was above our previously announced guidance range of 5.9-6.1 million tons. The fourth quarter marked our highest quarter for both sales volume and average revenue per ton during 2016. This was achieved by shipping more coal to our domestic customers and also by taking advantage of select export opportunities that opened as a result of strengthening demand for both thermal and metallurgical coal. Additionally, record shipments from the complex were enabled by our experienced logistics team and by strong performance from our transportation partners, including both eastern railroads and the coal terminals in Baltimore.
During the fourth quarter, our domestic customers demonstrated a strong demand for coal driven by higher natural gas prices and coal inventory restocking following 2016's strong summer burn. We expect this trend to be sustained heading into 2017 as coal-fired generation continues to benefit from the onset of winter heating demand and favorable economics relative to natural gas-fired generation. Coal stockpiles remain below target levels at several of our customer power plants as they benefit from these demand dynamics. According to our internal analysis, our top 15 domestic power plant customers, which accounted for approximately 82% of our 2016 domestic power plant shipments, operated at a weighted average capacity factor of 66% during the peak summer demand season of June-September, which was up from their weighted average capacity factor of 61% during the same period last year. The U.S. Energy Information Administration (the "EIA") forecasts that after reaching a low point in 2016, coal-fired generation will increase from 2017-2020 as coal recaptures share from natural gas in the U.S. electric power generation mix. Specifically for 2017, the EIA projects that coal consumption from the U.S. electric power sector will improve by 41 million tons compared to 2016, helping to draw down power plant coal inventories by an additional 16 million tons from year-end 2016 levels. We believe this stronger coal burn and continued destocking should sustain improvements in coal supply-demand fundamentals for the upcoming contracting periods.
In the export market, the global coking coal benchmark for the first quarter of 2017 settled at $285/metric ton. However, international spot prices have since experienced a pullback and spot prices are now in $170-$180/metric ton range. While changes to China's policy on local mining will likely continue to create volatility in seaborne pricing, we believe the overall value proposition of our product remains very strong for coke producers. We plan to continue to secure additional volume in the international high-vol market as realizations there remain more attractive than in the domestic and export thermal markets.
During the quarter, we contracted 325 thousand additional tons for 2017 across all of our markets, bringing our total sold position to 6.4 million tons or 98% of the estimated total sales volumes based on the midpoint of our guidance range. In addition to a strong 2017 sold position, we have a solid position of approximately 66% sold for 2018, based on 6.5 million tons of total sales. With our planned coal production in 2017 largely sold out, our focus now has shifted to maximizing realizations for any additional production and booking additional sales for contract years 2018 and 2019. We are currently active in negotiations with several customers to expand our crossover metallurgical coal portfolio, and we continue to pursue select domestic customers that fit with our long-term market strategy.
1"Adjusted EBITDA" and "Distribution coverage ratio" are non-GAAP financial measures, which are reconciled to GAAP net income under the caption Non-GAAP Financial Measures" |
Quarterly Distribution
During the fourth quarter, CNXC generated net cash provided by operating activities of $25.8 million and distributable cash flow2 of $12.6 million, yielding a distribution coverage ratio of 1.0x. We note that our distribution coverage ratio calculation is based on the estimated maintenance capital expenditure of $8.6 million, while our actual cash maintenance capital expenditure for the fourth quarter was $3.1 million. Based on our current outlook for the coal markets and distributable cash flow generated during the quarter, the Board of Directors of the general partner, has elected to pay a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a full cash distribution of approximately $1.85 million in the aggregate to the holders of the convertible Class A Preferred Units. The distribution to all unitholders of the Partnership will be made on February 15, 2017 to such holders of record at the close of business on February 9, 2017.
Operations Summary
Our operations team delivered record production for the quarter despite two longwall moves. With domestic and international demand remaining strong throughout the quarter, our marketing team was successful in lining up a record shipment schedule. The operations team took advantage of this opportunity and mobilized additional shifts during the weekends and typical holiday shutdown periods.
We sold 1.8 million tons of coal during the fourth quarter of 2016 compared to 1.2 million tons in the year ago period. The average realized price declined by 14.3% compared to the year-ago period, as some higher-priced coal contracts rolled off and were replaced by lower-priced sales. Our total cost of coal sold increased to $60.4 million during the quarter compared to $49.6 million in the year-ago period driven by higher coal sales volume. However, the average cost of coal sold3 in the quarter declined 14.6% to $33.90 per ton, compared to $39.70 per ton in the year-earlier quarter, primarily driven by various cost reduction measures.
2"Distributable Cash Flow" is a non-GAAP financial measure which is reconciled to GAAP net income under the caption "Non-GAAP Financial Measures" |
Three Months Ended | ||||
December 31, 2016 |
December 31, 2015 | |||
Coal Production |
million tons |
1.8 |
1.2 | |
Coal Sales |
million tons |
1.8 |
1.2 | |
Average Realized Price |
per ton |
$45.05 |
$52.57 | |
Average Cost of Coal Sold |
per ton |
$33.90 |
$39.70 |
Note: The Partnership has recast the above table to retrospectively reflect the additional 5% |
Guidance and Outlook
Heading into the first quarter of 2017, we expect production and sales volume to return to a more typical annual run-rate than we saw in the fourth quarter. We also expect unit margins to increase compared to the fourth quarter. Based on our current contracted position, production plans and outlook for the coal markets, we are re-affirming our previously announced guidance ranges for 2017 as follows:
Fourth Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the fourth quarter of 2016 financial and operational results, is scheduled for January 30, 2017 at 5:00 PM 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 page of our website, www.cnxlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Brian Aiello, (724) 485-3078
brianaiello@cnxlp.com
Non-GAAP Financial Measures
Adjusted EBITDA, distributable cash flow, distribution coverage ratio and average cost of coal sold are not Generally Accepted Accounting Principles ("GAAP") measures.
We define adjusted EBITDA as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as Unit Based Compensation. The GAAP measure most directly comparable to adjusted EBITDA is net income. Management believes that the presentation of adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and our presentation of adjusted EBITDA may not be comparable to similarly titled measures of other companies.
We define distributable cash flow as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as unit based compensation, less net cash interest paid, distribution to the preferred units and estimated maintenance capital expenditures, to analyze our performance. Distributable cash flow will not reflect changes in working capital balances. Management believes that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and our presentation may not be comparable to similarly titled measures of other companies. The distribution coverage ratio is the ratio of distributable cash flow and expected distribution payments. .
We define average cost of coal sold as 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, and depreciation, depletion and amortization costs. Our costs exclude any indirect costs such as general and administrative costs and other costs not directly attributable to the production of coal. Management believes that the presentation of average cost of coal sold in this report provides information useful to investors in assessing our results of operations. The GAAP measure most directly comparable to cost of coal sold is total costs. Average cost of coal sold should not be considered an alternative to total costs, or any other measure of financial or operational performance presented in accordance with GAAP. Average cost of coal sold excludes some, but not all, items that affect total costs and our presentation of average cost of coal sold may not be comparable to similarly titled measures of other companies
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each period indicated. The table also presents a reconciliation of distributable cash flow to net income and net cash provided by operating activities, the most directly comparable GAAP financial measures, on a historical basis for each period indicated.
4CNXC is unable to provide a reconciliation of adjusted EBITDA guidance to Net Income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items. |
(Dollars in thousands) |
Three Months Ended December 31, 2016 | ||
Net Income |
$ |
11,727 | |
Plus: |
|||
Interest Expense |
2,442 | ||
Depreciation, Depletion and Amortization |
10,662 | ||
Stock/Unit Based Compensation |
281 | ||
Adjusted EBITDA |
$ |
25,112 | |
Less: |
|||
Cash Interest |
2,112 | ||
Distributions to Preferred Units |
1,851 | ||
Estimated Maintenance Capital Expenditures |
8,583 | ||
Distributable Cash Flow |
$ |
12,566 | |
Net Cash Provided by Operating Activities |
$ |
25,775 | |
Less: |
|||
Interest Expense |
2,442 | ||
Other, Including Working Capital |
(1,779) | ||
Adjusted EBITDA |
$ |
25,112 | |
Less: |
|||
Cash Interest |
2,112 | ||
Distributions to Preferred Units |
1,851 | ||
Estimated Maintenance Capital Expenditures |
8,583 | ||
Distributable Cash Flow |
$ |
12,566 | |
Distributions Declared |
$ |
12,148 | |
Distribution Coverage |
1.0 |
The following table presents a reconciliation of average cost of coal sold to total costs, the most directly comparable GAAP financial measure, on a historical basis for each period indicated.
(Amounts in thousands, except for per ton) |
Three Months Ended | ||||||
2016 |
2015 | ||||||
Total Costs |
$ |
72,560 |
$ |
56,520 | |||
Freight Expense |
(3,130) |
(2,238) | |||||
Selling, General and Administrative Expenses |
(3,391) |
(2,018) | |||||
Interest Expense |
(2,442) |
(1,878) | |||||
Other Costs (Non-Production) |
(2,627) |
(295) | |||||
Depreciation, Depletion and Amortization (Non-Production) |
(549) |
(541) | |||||
Cost of Coal Sold |
$ |
60,421 |
$ |
49,550 | |||
Total Tons Sold |
1,782 |
1,248 | |||||
Average Cost Per Ton Sold |
$ |
33.90 |
$ |
39.70 |
Note: The above table reflects the additional 5% ownership of PAMC completed September 30, 2016 |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our 2015 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CNX COAL RESOURCES LP | |||||||||||||
EARNINGS SUMMARY | |||||||||||||
(Dollars in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Three Months Ended December 31, |
Years Ended December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||
Revenue: |
|||||||||||||
Coal Revenue |
$ |
80,292 |
$ |
65,610 |
$ |
266,395 |
$ |
322,261 | |||||
Freight Revenue |
3,130 |
2,238 |
11,603 |
3,809 | |||||||||
Other Income |
865 |
128 |
3,119 |
941 | |||||||||
Total Revenue and Other Income |
84,287 |
67,976 |
281,117 |
327,011 | |||||||||
Cost of Coal Sold: |
|||||||||||||
Operating Costs |
50,308 |
40,012 |
172,671 |
197,224 | |||||||||
Depreciation, Depletion and Amortization |
10,113 |
9,538 |
38,594 |
41,675 | |||||||||
Total Cost of Coal Sold |
60,421 |
49,550 |
211,265 |
238,899 | |||||||||
Other Costs: |
|||||||||||||
Other Costs |
2,627 |
295 |
10,330 |
(3,263) | |||||||||
Depreciation, Depletion and Amortization |
549 |
541 |
3,400 |
2,461 | |||||||||
Total Other Costs |
3,176 |
836 |
13,730 |
(802) | |||||||||
Freight Expense |
3,130 |
2,238 |
11,603 |
3,809 | |||||||||
Selling, General and Administrative Expenses |
3,391 |
2,018 |
9,949 |
10,931 | |||||||||
Interest Expense |
2,442 |
1,878 |
8,719 |
9,636 | |||||||||
Total Costs |
72,560 |
56,520 |
255,266 |
262,473 | |||||||||
Net Income |
$ |
11,727 |
$ |
11,456 |
$ |
25,851 |
$ |
64,538 | |||||
Net Income Allocable to Limited Partner Units - Basic & Diluted |
$ |
9,679 |
$ |
8,499 |
$ |
19,487 |
$ |
22,888 | |||||
Adjusted EBITDA |
$ |
25,112 |
$ |
23,438 |
$ |
77,749 |
$ |
115,964 | |||||
Distributable Cash Flow |
$ |
12,566 |
$ |
9,757 |
$ |
28,613 |
$ |
54,994 | |||||
Net Income per Limited Partner Unit - Basic |
$ |
0.41 |
$ |
0.37 |
$ |
0.84 |
$ |
0.99 | |||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.41 |
$ |
0.37 |
$ |
0.83 |
$ |
0.99 | |||||
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of |
CNX COAL RESOURCES LP | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(Dollars in thousands) | |||||
(unaudited) | |||||
December 31, |
December 31, | ||||
ASSETS |
|||||
Current Assets: |
|||||
Cash |
$ |
9,785 |
$ |
6,534 | |
Trade Receivables |
23,418 |
19,398 | |||
Other Receivables |
515 |
471 | |||
Inventories |
11,491 |
12,238 | |||
Prepaid Expenses |
3,512 |
5,089 | |||
Total Current Assets |
48,721 |
43,730 | |||
Property, Plant and Equipment: |
|||||
Property, Plant and Equipment |
876,690 |
865,527 | |||
Less—Accumulated Depreciation, Depletion and Amortization |
442,178 |
400,911 | |||
Total Property, Plant and Equipment—Net |
434,512 |
464,616 | |||
Other Assets: |
|||||
Other |
21,063 |
17,598 | |||
Total Other Assets |
21,063 |
17,598 | |||
TOTAL ASSETS |
$ |
504,296 |
$ |
525,944 |
December 31, |
December 31, | ||||
LIABILITIES AND EQUITY |
|||||
Current Liabilities: |
|||||
Accounts Payable |
$ |
18,797 |
$ |
17,405 | |
Accounts Payable—Related Party |
1,666 |
4,310 | |||
Other Accrued Liabilities |
44,318 |
37,281 | |||
Total Current Liabilities |
64,781 |
58,996 | |||
Long-Term Debt: |
|||||
Revolver, net of Debt Issuance and Financing Fees |
197,843 |
180,946 | |||
Capital Lease Obligations |
146 |
124 | |||
Total Long-Term Debt |
197,989 |
181,070 | |||
Other Liabilities: |
|||||
Pneumoconiosis Benefits |
2,057 |
1,934 | |||
Workers' Compensation |
3,090 |
2,929 | |||
Asset Retirement Obligations |
9,346 |
8,499 | |||
Other |
463 |
713 | |||
Total Other Liabilities |
14,956 |
14,075 | |||
TOTAL LIABILITIES |
277,726 |
254,141 | |||
Partners' Capital: |
|||||
Class A Preferred Units (3,956,496 Units Outstanding at December 31, 2016; |
69,151 |
— | |||
Common Units (11,618,456 Units Outstanding at December 31, 2016; 11,611,067 |
140,967 |
154,309 | |||
Subordinated Units (11,611,067 Units Outstanding at December 31, 2016 and |
(7,631) |
6,188 | |||
General Partner Interest |
12,274 |
13,081 | |||
Parent Net Investment |
— |
87,234 | |||
Accumulated Other Comprehensive Income |
11,809 |
10,991 | |||
Total Partners' Capital |
226,570 |
271,803 | |||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
504,296 |
$ |
525,944 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of |
CNX COAL RESOURCES LP | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(Dollars in thousands) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended December 31, |
Years Ended December 31, | ||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||
Cash Flows from Operating Activities: |
|||||||||||
Net Income |
$ |
11,727 |
$ |
11,456 |
$ |
25,851 |
$ |
64,538 | |||
Adjustments to Reconcile Net Income to Net Cash |
|||||||||||
Depreciation, Depletion and Amortization |
10,662 |
10,079 |
41,994 |
44,136 | |||||||
(Gain) Loss on Sale of Assets |
(1) |
(16) |
9 |
(61) | |||||||
Unit Based Compensation |
281 |
25 |
1,185 |
40 | |||||||
Other Adjustments to Net Income |
219 |
575 |
898 |
777 | |||||||
Changes in Operating Assets: |
|||||||||||
Accounts and Notes Receivable |
(2,732) |
9,585 |
(4,064) |
(19,389) | |||||||
Inventories |
89 |
3,582 |
747 |
1,061 | |||||||
Prepaid Expenses |
1,227 |
1,186 |
1,577 |
(186) | |||||||
Changes in Other Assets |
239 |
4,751 |
(3,465) |
(3,246) | |||||||
Changes in Operating Liabilities: |
|||||||||||
Accounts Payable |
500 |
(297) |
1,968 |
(416) | |||||||
Accounts Payable—Related Party |
346 |
3,075 |
(2,644) |
3,430 | |||||||
Other Operating Liabilities |
3,134 |
(12,620) |
7,010 |
(7,244) | |||||||
Changes in Other Liabilities |
84 |
(1,938) |
2,032 |
(6,532) | |||||||
Net Cash Provided by Operating Activities |
25,775 |
29,443 |
73,098 |
76,908 | |||||||
Cash Flows from Investing Activities: |
|||||||||||
Capital Expenditures |
(3,135) |
(8,361) |
(12,704) |
(34,073) | |||||||
PA Mining Acquisition |
— |
— |
(21,500) |
— | |||||||
Proceeds from Sales of Assets |
1 |
1 |
23 |
71 | |||||||
Net Cash Used in Investing Activities |
(3,134) |
(8,360) |
(34,181) |
(34,002) | |||||||
Cash Flows from Financing Activities: |
|||||||||||
Payments on Miscellaneous Borrowings |
(22) |
(19) |
(79) |
(53) | |||||||
Payments on Related Party Long-Term Notes |
— |
— |
— |
(10,951) | |||||||
Proceeds from Related Party Long-Term Notes |
— |
— |
— |
16,990 | |||||||
Proceeds from Revolver, Net of Payments |
(7,000) |
5,000 |
16,000 |
185,000 | |||||||
Proceeds from Issuance of Common Units, Net of |
— |
— |
— |
148,359 | |||||||
Distribution of Proceeds |
— |
— |
— |
(342,711) | |||||||
Payments for Unitholder Distributions |
(12,148) |
(11,353) |
(42,634) |
(11,353) | |||||||
Debt Issuance and Financing Fees |
— |
— |
— |
(4,329) | |||||||
Net Change in Parent Advances |
— |
(11,184) |
(8,953) |
(17,328) | |||||||
Net Cash Used In Financing Activities |
(19,170) |
(17,556) |
(35,666) |
(36,376) | |||||||
Net Increase in Cash |
3,471 |
3,527 |
3,251 |
6,530 | |||||||
Cash at Beginning of Period |
6,314 |
3,007 |
6,534 |
4 | |||||||
Cash at End of Period |
$ |
9,785 |
$ |
6,534 |
$ |
9,785 |
$ |
6,534 |
Note: The Partnership has recast its consolidated financial statements to retrospectively reflect the additional 5% ownership of |
SOURCE CNX Coal Resources LP
PITTSBURGH, Jan. 24, 2017 /PRNewswire/ -- The Board of Directors of CNX Coal Resources GP LLC, the general partner of CNX Coal Resources LP (NYSE: CNXC), today announced a cash distribution $0.5125 per unit to all limited partner unitholders and the holder of the general partner interest. The Board of Directors has also approved a full cash distribution of approximately $1.85 million in the aggregate to the holders of the convertible Class A preferred units. The distribution to all unitholders of the Partnership will be made on February 15, 2017 to such holders of record at the close of business on February 9, 2017.
CNX Coal Resources also announced that it intends to file a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) after it files its Annual Report on Form 10-K for the year ended December 31, 2016, which is currently expected to be filed with SEC on or around February 8, 2017. The shelf registration statement will be subject to review by the SEC and will not become effective until the SEC review process has been completed. Accordingly, the securities covered by the registration statement may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective.
If and when the shelf registration statement is declared effective by the SEC, it will allow CNX Coal Resources the flexibility to offer and sell, from time to time over a three-year period, in one or more public offerings up to a total aggregate of up to $750 million of: (i) common units representing limited partnership interests of the Company; (ii) preferred units representing limited partnership interest of the Company; and (iii) debt securities. The shelf registration statement may also register the resale of common units currently owned by CONSOL Energy Inc. and Greenlight Capital, which may be included in the shelf registration statement as required by existing registration rights agreements with CONSOL Energy Inc. and Greenlight Capital. CNXC does not contemplate any particular transaction (for its own account or for CONSOL Energy Inc. or Greenlight Capital). Any offering under the shelf registration statement may be made only by means of the prospectus included in the registration statement, as supplemented by one or more related prospectus supplements with respect to that offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities of CNX Coal Resources or its subsidiaries, nor shall there be a sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Brian Aiello, at (724) 485-3078 |
SOURCE CNX Coal Resources LP
PITTSBURGH, Dec. 13, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today announced, in conjunction with its participation in CONSOL Energy Inc.'s (NYSE: CNX) Analyst and Investor Day event today in Pittsburgh, PA, that it is reaffirming full-year 2016 guidance and providing its initial 2017 guidance.
Guidance and Outlook
Guidance |
2016 |
2017 | |
Coal sales |
million tons |
5.90-6.10 |
6.25-6.75 |
Adjusted EBITDA1 |
$ million |
$74-$82 |
$90-$110 |
Maintenance capital expenditures |
$ million |
$15-$19 |
$30-$36 |
Analyst and Investor Day
Jimmy Brock, Chief Executive Officer and Lori Ritter, Chief Financial and Accounting Officer of CNX Coal Resources GP LLC, along with certain other members of our management team will participate today in an Analyst and Investor Day event hosted by CONSOL Energy Inc. The management team will provide an overview of the Pennsylvania mining complex, discuss the business outlook and take questions from the analyst and investor community during a breakout session.
A live audio webcast of the Analyst and Investor Day will begin today at 8.30 am ET and can be accessed by visiting the "Events and Webcasts" section of "Investors" tab of the company's website at www.cnxlp.com. The replay of the webcast will be available on the company's website for approximately 30 days. Additionally, a slide deck will be posted to the website to coincide with the onset of the meeting.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Brian Aiello, (724) 485-3078
brianaiello@cnxlp.com
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; our ability to develop our existing coal reserves and successfully execute our mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; our ability to successfully implement our business plan; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond our control; interest rates; labor availability, relations and other workforce factors; defaults by our sponsor under our operating agreement and employee services agreement; changes in availability and cost of capital; changes in our tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in our 2015 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
(1) CNX Coal Resources LP is unable to provide a reconciliation of adjusted EBITDA guidance to net income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
SOURCE CNX Coal Resources LP
PITTSBURGH, Nov. 16, 2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) today announced that it will host an Analyst and Investor Day in Pittsburgh, Pennsylvania on Tuesday, December 13, 2016.
The Analyst and Investor Day, which is expected to last approximately three hours, will feature presentations from members of CONSOL Energy's senior leadership team followed by a question and answer session.
A live audio webcast of CONSOL Energy's Analyst and Investor Day will begin at 8:30 a.m. Eastern Time and can be accessed by visiting the investor relations portion of the company's website, at www.consolenergy.com. The replay of the webcast will be available on the company's website for approximately 30 days. Additionally, a comprehensive slide deck will be posted to the website (under Presentations to Analysts tab) to coincide with the onset of the meeting.
Following the conclusion of CONSOL Energy's Analyst and Investor Day, certain members of the management teams from CNX Coal Resources (NYSE: CNXC) and CONE Midstream Partners LP (NYSE: CNNX), CONSOL Energy's affiliates, will hold separate breakout sessions to answer questions related to each respective entity. The breakout sessions will not be webcast.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
Logo - http://photos.prnewswire.com/prnh/20120416/NE87957LOGO
SOURCE CONSOL Energy Inc.
Company invites individual and institutional investors as well as advisors to log-on to VirtualInvestorConferences.com to view presentation
PITTSBURGH, Nov. 7, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC), based in Pittsburgh, focused on managing and further developing Northern Appalachian coal operations, today announced that the November 3 presentation from Lori Ritter, Chief Financial Officer is now available for on-demand viewing at VirtualInvestorConferences.com.
LINK: http://tinyurl.com/1103postpr
CNX Coal Resources LP presentation will be available 24/7 for 90 days. Investors and advisors may download shareholder materials from the "virtual trade booth" for the next three weeks.
Learn more about the event at www.VirtualInvestorConferences.com.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on their website www.cnxlp.com
About VirtualInvestorConferences.com
Since 2010, VirtualInvestorConferences.com, created by BetterInvesting (NAIC) and PRNewswire, has been the only monthly virtual investor conference series that provides an interactive forum for presenting companies to meet directly with investors using a graphically-enhanced online platform.
Designed to replicate the look and feel of location-based investor conferences, Virtual Investor Conferences unites PR Newswire's leading-edge online conferencing and investor communications capabilities with BetterInvesting's extensive retail investor audience network.
Logo - http://photos.prnewswire.com/prnh/20160129/327291LOGO
SOURCE CNX Coal Resources LP
PITTSBURGH, Oct. 7, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) will issue its third quarter earnings release after the market close on Monday, October 31. This will be followed by a conference call hosted by members of the management team at 05:00 p.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.cnxlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
Participants should ask to be joined into the CNX Coal Resources LP call. |
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its assets include a 25% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Brian Aiello, at (724) 485-3078 |
SOURCE CNX Coal Resources LP
PITTSBURGH, Oct. 3, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) (the "Partnership") and CONSOL Energy Inc. (NYSE: CNX) (the "Sponsor"), announced that the Partnership has acquired an additional 5% undivided interest in the Pennsylvania Mining Complex ("PAMC") and associated infrastructure from the Sponsor for $88.8 million. The transaction is effective September 30, 2016. The acquisition increased the Partnership's undivided interest in the PAMC to 25%.
CNXC funded the transaction with a combination of available borrowings under its credit facility in the amount of $21.5 million and the issuance of convertible preferred units representing limited partner interests (the "Preferred Units") to the Sponsor valued at $67.3 million. The Preferred Units were issued at a price of $17.01 per unit, a 15% premium to the volume weighted average price of CNXC's common units over the fifteen trading days ending on September 29, 2016. The Preferred Units will pay quarterly distributions in additional Preferred Units or cash, at the Partnership's election, equal to an annual rate of 11.00% of the issue price, subject to certain adjustments. The Partnership has the right to cause the conversion of all outstanding Preferred Units into common units, subject to certain conditions, at any time after September 30, 2019. In addition, the Preferred Units will be convertible into common units, generally on a one-for-one basis, subject to certain adjustments, at the holder's option after September 30, 2017.
"I am very excited about this acquisition as we increase our ownership of the premier coal mining assets in the U.S. These assets are very familiar to our unitholders and this transaction supports our previously outlined growth strategy," said Jimmy Brock, chief executive officer of CNX Coal Resources GP LLC, the General Partner of the Partnership. "With coal markets beginning to recover, we believe the timing is right for us to consummate this acquisition. The transaction has been structured to allow more balance sheet flexibility for CNXC as well as create a larger base of cash flow to support ongoing partnership distributions."
"This is a win-win for both CONSOL Energy and CNX Coal Resources," commented Nicholas J. DeIuliis, president and chief executive officer of CONSOL Energy Inc. "This transaction moves CONSOL one step closer to executing our strategic goal of fully separating the coal and gas businesses, while generating cash proceeds from the sale. All in, this deal strengthens CNXC's balance sheet and liquidity position, while benefitting CONSOL."
The terms of the acquisition and financing were approved by the conflicts committee of the board of directors of CNX Coal Resources GP LLC. Evercore acted as the financial advisor and Andrews Kurth Kenyon LLP acted as the legal advisor to the conflicts committee. Stifel, Nicolaus and Company, Incorporated acted as financial advisor to the management teams of the Sponsor and the Partnership. Latham & Watkins LLP acted as legal counsel to the Sponsor.
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While the management of the Sponsor and the Partnership consider 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 the control of the Sponsor and the Partnership. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment by the Partnership of minimum quarterly distributions; changes in coal prices or the costs of mining or transporting coal; uncertainty in estimating economically recoverable coal reserves and replacement of reserves; the Partnership's ability to develop existing coal reserves and successfully execute its mining plans; changes in general economic conditions, both domestically and globally; competitive conditions within the coal industry; changes in the consumption patterns of coal-fired power plants and steelmakers and other factors affecting the demand for coal by coal-fired power plants and steelmakers; the availability and price of coal to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources; energy efficiency and technology trends; the ability of the Sponsor and the Partnership to successfully implement their business plans; the price and availability of debt and equity financing; operating hazards and other risks incidental to coal mining; major equipment failures and difficulties in obtaining equipment, parts and raw materials; availability, reliability and costs of transporting coal; adverse or abnormal geologic conditions, which may be unforeseen; natural disasters, weather-related delays, casualty losses and other matters beyond the control of the Sponsor and the Partnership; interest rates; labor availability, relations and other workforce factors; defaults by the Sponsor under the operating agreement and employee services agreement between the Sponsor and the Partnership; changes in availability and cost of capital; changes in the Partnership's tax status; delays in the receipt of, failure to receive or revocation of necessary governmental permits; defects in title or loss of any leasehold interests with respect to our properties; the effect of existing and future laws and government regulations, including the enforcement and interpretation of environmental laws thereof; the effect of new or expanded greenhouse gas regulations; the effects of litigation; and other factors discussed in the Sponsor's and the Partnership's Annual Reports on Form 10-K under "Risk Factors," as updated by any subsequent Quarterly Reports on Form 10-Q, which are on file at the Securities and Exchange Commission.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its assets include, after the closing of the acquisition, a 25% undivided interest in and operational control over, the PAMC, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
Contacts:
CNX Coal Resources Investor:
Mitesh Thakkar, at (724) 485-3133 and miteshthakkar@cnxlp.com
CONSOL Energy Investor:
Tyler Lewis, at (724) 485-3157 and tylerlewis@consolenergy.com
Media:
Brian Aiello, at (724) 485-3078 and brianaiello@consolenergy.com
SOURCE CNX Coal Resources LP; CONSOL Energy
PITTSBURGH, July 7, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) will issue its second quarter earnings release after the market close on Monday, July 25. This will be followed by a conference call hosted by members of the management team at 05:00 p.m. Eastern Time. The webcast will be accessible on the 'Investor Relations' page of the company's website, www.cnxlp.com. An archive of the webcast will be available for at least 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
Participants should ask to be joined into the CNX Coal Resources LP call. |
CNX Coal Resources is a growth-oriented master limited partnership formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its initial assets include a 20% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More Information is available on our website www.cnxlp.com
Contacts: |
|
Investor: |
Mitesh Thakkar, at (724) 485-3133 |
Media: |
Brian Aiello, at (724) 485-3078 |
SOURCE CNX Coal Resources LP
PITTSBURGH, April 26, 2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) reported a net loss from continuing operations of $50 million for the quarter, or ($0.22) per diluted share. When including the loss from discontinued operations, net of tax, of $46 million, less net income attributable to noncontrolling interest, the company reported a net loss attributable to CONSOL Energy shareholders of $98 million or ($0.43) per diluted share.
(Dollars in thousands) |
Q1 2016 | ||
Loss Before Income Tax |
$ |
(77,133) |
|
Income Taxes |
(26,847) |
||
Loss From Continuing Operations |
(50,286) |
||
Loss From Discontinued Operations, net |
(46,172) |
||
Net Loss |
(96,458) |
||
Less: Net Income Attributable to Noncontrolling Interest |
1,114 |
||
Net Loss Attributable to CONSOL Energy Shareholders |
$ |
(97,572) |
Earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization (EBITDA), from continuing operations were $133 million for the 2016 first quarter, compared to $234 million in the year-earlier quarter.
After adjusting for certain items, which are listed in the EBITDA reconciliation table, the company had an adjusted net loss1 attributable to continuing operations in the 2016 first quarter of $16 million, or ($0.07) per diluted share. Adjusted EBITDA1 from continuing operations was $176 million for the 2016 first quarter, compared to $242 million in the year-earlier quarter. Cash flow from operations in the just-ended quarter was $128 million, compared to $228 million in the year-earlier quarter.
The first quarter earnings results included the following pre-tax items related to recent transactions attributable to continuing operations:
"CONSOL continues to focus on executing its free cash flow plan," commented Nicholas J. DeIuliis, president and CEO. "Through continuing to reduce unit costs, benefiting from capital efficiency improvements, and selectively monetizing assets, CONSOL generated $449 million of free cash flow1, which includes $35 million of organic free cash flow from continuing operations1 when excluding the recent sale of the Buchanan Mine. Our free cash flow plan has further strengthened our liquidity position and balance sheet, while positioning us for future success."
1 The terms "adjusted net loss," "adjusted EBITDA," "free cash flow," and "organic free cash from continuing operations" are non-GAAP financial measures, which are defined and reconciled to the GAAP net income below, under the caption "Non-GAAP Financial Measures."
During the quarter, CONSOL Energy announced the sale of the Buchanan Mine, along with certain other metallurgical coal reserves. The total transaction value was approximately $460 million: $425 million in cash, including $403 million of cash received at closing and $22 million of cash held in an escrow account for up to two years; $23 million in net accounts receivable/payables that CONSOL will receive following the close of the transaction; and $12 million associated with legacy liabilities that the buyer assumed. In addition, for Buchanan Mine coal sold outside the U.S. and Canada during the five years following closing, the buyer agreed to pay CONSOL Energy a royalty of 20% of any excess of the gross sales price per ton over the following amounts: (1) year one, $75 per ton; (2) year two, $78.75 per ton; (3) year three, $82.69 per ton; (4) year four, $86.82 per ton; and (5) year five, $91.16 per ton. This earn-out provision provides CONSOL the opportunity to capture future upside if metallurgical coal prices recover. Since the transaction effectively closed on the last day of the first quarter, transaction proceeds reside as cash on CONSOL Energy's balance sheet. Following the end of the first quarter, CONSOL used the cash proceeds to pay down its revolving debt in an effort to increase liquidity and further de-lever the company. CONSOL Energy estimated the full year 2016 EBITDA contribution associated with the Buchanan Mine, net of the carrying costs of the other metallurgical coal assets included in the transaction, to be approximately $20-$25 million.
"The Buchanan sale is significant for a number of reasons," commented Nicholas J. DeIuliis, president and CEO. "Not only does this divestiture support our corporate strategy, it also brought forward substantial value, at a premium multiple valuation. That said, this transaction was a win-win for both us and the buyer, who will benefit from this premier mine becoming their flagship operation. For CONSOL, the sale of Buchanan marks another large step towards executing our strategy of becoming a pure-play E&P company."
On April 20, 2016, the company's lending group reaffirmed the bank facility's $2.0 billion borrowing base. "The reaffirmation marks another step to further maintain our already strong liquidity position," commented David M. Khani, executive vice president and CFO. "We appreciate the support of our lenders who have recognized how we have differentiated ourselves through our strong asset base and organic free cash flow plan."
During the first quarter of 2016, CONSOL's E&P Division achieved record production of 97.5 Bcfe, or an increase of 36% from the 71.6 Bcfe produced in the year-earlier quarter. The E&P Division's total unit cash costs declined during the quarter to $1.33 per Mcfe, compared to $1.70 per Mcfe during the year-earlier quarter, or an improvement of approximately 22%, which benefited in part from the company's dry Utica wells.
Marcellus Shale production volumes, including liquids, in the 2016 first quarter were 51.2 Bcfe, or 39% higher than the 36.8 Bcfe produced in the 2015 first quarter. Marcellus Shale total unit cash costs were $1.44 per Mcfe in the just-ended quarter, which is a $0.11 per Mcfe improvement from the first quarter of 2015 costs of $1.55 per Mcfe.
CONSOL Energy's Utica Shale production volumes, including liquids, in the 2016 first quarter were 22.9 Bcfe, up substantially from 9.6 Bcfe in the year-earlier quarter. Utica Shale total unit cash costs were $0.85 per Mcfe in the just-ended quarter, which is a $0.46 per Mcfe improvement from the first quarter of 2015 total unit cash costs of $1.31 per Mcfe. The significant cost improvements across the Utica Shale were primarily driven by reductions to lease operating expenses.
CONSOL Energy's total Coal Division sold 5.7 million tons from continuing operations in the 2016 first quarter, compared to 7.0 million tons during the year-earlier quarter. The Board of Directors of CNX Coal Resources' LP (NYSE: CNXC) General Partner declared a cash distribution of $0.5125 per unit to all unitholders for the first quarter of 2016. The distribution will be made on May 12, 2016 to unitholders of record at the close of business on May 5, 2016.
The unrealized loss on commodity derivative instruments represents changes in fair value of all existing commodity hedges on a mark-to-market basis.
The company recorded a loss related to the sale of a gathering pipeline, located in Monroe County, Ohio, to a third party. During the quarter, CONSOL executed a gathering agreement and midstream asset sale for $7.7 million of cash received at closing. CONSOL expects the sale and the gathering agreement, which was secured at favorable prices and terms, to eliminate future capital expenditures and reduce operating expenses as they relate to Monroe County, Ohio.
During the quarter, the company also recorded an expense related to severance, in connection with the company's continuing effort to reduce operating expenses.
Starting this quarter, CONSOL Energy has made certain adjustments to the financial statements to reflect the sale of the Buchanan Mine, which is now reflected under "Discontinued Operations." CONSOL Energy also made reclassifications within our financial statements to better align our financial reporting with our peer group. These reclassifications impacted the "Lease Operating Expense," "Transportation, Gathering and Compression," "Direct Administrative and Selling," "Production Royalty Interests and Purchased Gas Sales," "Production Royalty Interests and Purchased Gas Costs," "Operating and Other Costs" and "Selling, General and Administrative" line items on our Consolidated Statements of Income. These changes are reflected in our current and historic Consolidated Statements of Income, with no effect on previously reported net income or stockholders' equity. To reflect these changes, CONSOL Energy has recast historic income statements that can be found on the CONSOL Energy website (www.consolenergy.com), or click here.
E&P Division:
E&P Division First Quarter Summary:
E&P production increased by over 36% in the just-ended quarter, compared to the year-earlier quarter. Despite increased production, the E&P Division realized a net loss of $14.2 million in the first quarter of 2016 due primarily to lower commodity price realizations.
CONSOL's E&P activity continued to focus primarily on completing its high quality Marcellus Shale wells in Greene and Washington Counties in Pennsylvania. The company's Green Hill Marcellus Shale wells in Greene County, Pennsylvania, have exceeded original expectations, with estimated ultimate recoveries (EURs) now between 2.8-3.0 Bcfe per 1,000 feet of lateral. During the quarter, CONSOL completed 11 wells: the 10-well GH53 pad and the 7,900 foot NV36F Marcellus Shale well, which incorporated testing plugless completions. CONSOL averaged 16 days per well for all completion operations, which is a 38% improvement compared to 2015, and a 50% improvement compared to 2014. CONSOL realized these improvements while utilizing 100% recycled water, which eliminates disposal expense. Also, during the quarter, CONSOL's joint venture partner in the Ohio Utica Shale completed 4 wells in Harrison County, Ohio.
CONSOL turned in line 35 Marcellus and Utica shale wells in the first quarter, including the GH9 dry Utica well in Greene County, Pennsylvania, which was turned in line in January with a 30-day average sales volume of 15 MMcf per day. CONSOL turned in line 17 Marcellus Shale wells in Greene and Washington Counties. The 12-well GH46 pad averaged 119 MMcf per day for a 30-day period, or 2.2 MMcf per day per 1,000 lateral feet. The 5-well NV61 pad averaged 34.5 MMcf per day for a 30-day period. Also, CONSOL's Marcellus and Utica shale joint venture partners turned in line an additional 13 wells. Due to the company's wells continuing to outperform, CONSOL pushed two additional Southwest Pennsylvania wells out of its 2016 turned in line (TIL) plan. As a result, CONSOL Energy estimates its gross inventory of both drilled but uncompleted (DUC) and drilled completed (DC) wells entering 2017 to be 79 Marcellus and Utica shale wells, an increase from the inventory of 77 gross wells reported at the start of 2016.
CONSOL Energy's Utica Shale development program continues to focus in the dry gas areas. In January, CONSOL turned in line its sixth dry Utica well, the GH9, located in Greene County, Pennsylvania, which has a lateral length of 6,141 feet and was completed with 30 frac stages. Although still early, results from the GH9 are positive, while the Gaut 4I well, located in Westmoreland County, Pennsylvania, continues to outperform expectations and may warrant an increase in EUR in the near future. The Gaut 4I has cumulative production of 2.79 Bcf through the end of the first quarter at a casing pressure of 6,758 psi. CONSOL continues to evaluate the managed pressure drawdown methodology in the Pennsylvania dry Utica. CONSOL's Switz 6 pad located in Monroe County, OH, has produced 5.69 Bcf through the end of the quarter from the four Utica wells, with the best performing well accounting for 1.77 Bcf of the production. Also, the non-operated Moundsville 6H, located in Marshall County, West Virginia, has produced 2.51 Bcf in 130 days, with a 24-hour initial production (IP) rate of 39.1 MMcf per day at 7,126 psi casing pressure. This well has a completed lateral length of 9,394 feet with 300 foot stage spacing.
E&P Division capital expenditures declined further in the first quarter to $62.9 million, compared to the fourth quarter of 2015, due to efficiency improvements and reduced activity.
E&P DIVISION RESULTS — Quarter-to-Quarter Comparison | ||||||||||||
Quarter |
Quarter |
Quarter | ||||||||||
Ended |
Ended |
Ended | ||||||||||
March 31, 2016 |
March 31, 2015 |
December 31, 2015 | ||||||||||
Sales - Gas |
$ |
157.4 |
$ |
196.5 |
$ |
152.9 |
||||||
Gain on Commodity Derivative Instruments - Cash Settlement |
84.3 |
30.1 |
79.5 |
|||||||||
Sales - Oil |
0.5 |
1.1 |
0.6 |
|||||||||
Sales - NGLs |
19.9 |
22.2 |
23.2 |
|||||||||
Sales - Condensate |
3.9 |
5.2 |
8.9 |
|||||||||
Total Sales Revenue ($ MM) |
$ |
266.0 |
$ |
255.1 |
$ |
265.1 |
||||||
Net (Loss) Income Attributable to CONSOL Energy Shareholders |
$ |
(14.2) |
$ |
30.9 |
$ |
57.1 |
||||||
Net Cash Provided by Operating Activities ($ MM) |
$ |
58.6 |
$ |
177.8 |
$ |
95.2 |
||||||
Total Period Production (Bcfe) |
97.5 |
71.6 |
95.5 |
|||||||||
Average Daily Production (MMcfe) |
1,071.0 |
795.7 |
1,037.8 |
|||||||||
Capital Expenditures ($ MM) |
$ |
62.9 |
$ |
250.3 |
$ |
83.4 |
CONSOL's E&P Division production in the quarter came from the following categories:
Quarter |
Quarter |
Quarter |
|||||||||||||
Ended |
Ended |
Ended |
|||||||||||||
March 31, 2016 |
March 31, 2015 |
% Increase/ (Decrease) |
December 31, 2015 |
% Increase/(Decrease) | |||||||||||
GAS |
|||||||||||||||
Marcellus Sales Volumes (Bcf) |
45.1 |
32.1 |
40.5 |
% |
43.7 |
3.2 |
% | ||||||||
Utica Sales Volumes (Bcf) |
17.7 |
6.2 |
185.5 |
% |
14.8 |
19.6 |
% | ||||||||
CBM Sales Volumes (Bcf) |
17.6 |
18.9 |
(6.9) |
% |
18.7 |
(5.9) |
% | ||||||||
Other Sales Volumes (Bcf)1 |
5.7 |
6.3 |
(9.5) |
% |
6.3 |
(9.5) |
% | ||||||||
LIQUIDS2 |
|||||||||||||||
NGLs Sales Volumes (Bcfe) |
9.7 |
6.5 |
49.2 |
% |
9.8 |
(1.0) |
% | ||||||||
Oil Sales Volumes (Bcfe) |
0.1 |
0.1 |
— |
% |
0.1 |
— |
% | ||||||||
Condensate Sales Volumes (Bcfe) |
1.6 |
1.5 |
6.7 |
% |
2.1 |
(23.8) |
% | ||||||||
TOTAL |
97.5 |
71.6 |
36.2 |
% |
95.5 |
2.1 |
% |
Note: The increase in Marcellus sales volumes represents only the gas portion of production. When including liquids, the increase in Marcellus volumes was 39% compared to the year-earlier quarter. Production results are net of royalties.
1. Other Sales Volumes: primarily related to shallow oil and gas production.
2. Liquids: NGLs, Oil, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas.
Liquids production of 11.4 Bcfe, as a percentage of the total of 97.5 Bcfe, was approximately 12% in the just-ended quarter. As a result of continuing to high-grade production away from wet areas and shift more towards dry gas areas, liquids production decreased by 0.6 Bcfe, or approximately 5% during the quarter, compared to the fourth quarter of 2015.
E&P PRICE AND COST DATA PER MCFE — Quarter-to-Quarter Comparison: | ||||||||||||
Quarter |
Quarter |
Quarter | ||||||||||
Ended |
Ended |
Ended | ||||||||||
(Per Mcfe) |
March 31, 2016 |
March 31, 2015 |
December 31, 2015 | |||||||||
Average Sales Price - Gas |
$ |
1.83 |
$ |
3.10 |
$ |
1.83 |
||||||
Average Gain on Commodity Derivative Instruments - Cash Settlement- Gas |
$ |
0.98 |
$ |
0.48 |
$ |
0.95 |
||||||
Average Sales Price - Oil* |
$ |
5.14 |
$ |
7.97 |
$ |
6.51 |
||||||
Average Sales Price - NGLs* |
$ |
2.05 |
$ |
3.40 |
$ |
2.36 |
||||||
Average Sales Price - Condensate* |
$ |
2.44 |
$ |
3.47 |
$ |
4.23 |
||||||
Average Sales Price - Total Company |
$ |
2.73 |
$ |
3.56 |
$ |
2.78 |
||||||
Costs - Production |
||||||||||||
Lifting |
$ |
0.28 |
$ |
0.52 |
$ |
0.27 |
||||||
Ad Valorem, Severance and Other Taxes |
0.09 |
0.13 |
0.06 |
|||||||||
DD&A |
1.00 |
1.09 |
0.97 |
|||||||||
Total Production Costs |
$ |
1.37 |
$ |
1.74 |
$ |
1.30 |
||||||
Costs - Gathering |
||||||||||||
Transportation |
$ |
0.79 |
$ |
0.75 |
$ |
0.79 |
||||||
Operating Costs |
0.17 |
0.30 |
0.20 |
|||||||||
DD&A |
0.08 |
0.12 |
0.08 |
|||||||||
Total Gathering Costs |
$ |
1.04 |
$ |
1.17 |
$ |
1.07 |
||||||
Total Costs |
$ |
2.41 |
$ |
2.91 |
$ |
2.37 |
||||||
Margin |
$ |
0.32 |
$ |
0.65 |
$ |
0.41 |
*Oil, NGLs, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices.
Note: "Total Costs" excludes selling, general administration, incentive compensation, and other corporate expenses.
The average sales price per Mcfe within the E&P Division was impaired in the just-ended quarter, when compared to the year-earlier quarter due to depressed commodity prices.
The average sales price of $2.73 per Mcfe, when combined with unit costs of $2.41 per Mcfe, resulted in a margin of $0.32 per Mcfe. This was a decrease when compared to the year-earlier quarter, with the improvements in unit costs partially offsetting the decline in price realizations.
Total E&P Division unit costs continued to improve in the just-ended quarter, compared to the year-earlier quarter, as fixed costs were spread over higher production volumes. Also, low-cost Marcellus and Utica Shale production represented a much higher proportion of total production, which benefited unit costs.
E&P Marketing, Transportation, and Processing Update:
For the first quarter of 2016, CONSOL's average sales price for natural gas, natural gas liquids (NGL), oil, and condensate was $2.73 per Mcfe. CONSOL's average price for natural gas was $1.83 per Mcf for the quarter and, including cash settlements from hedging, was $2.81 per Mcf. During the first quarter, CONSOL produced NGL, oil, and condensate volumes of 11.4 Bcfe, or 12% of the company's total gas equivalent volumes. These liquids volumes were 40% greater than those of the year-earlier quarter, which then comprised 11% of the company's total gas equivalent volumes. The average realized price for all liquids for the first quarter of 2016 was $12.78 per barrel.
The company currently has a total of 1.2 Bcf per day of available firm transportation capacity. This is composed of 0.9 Bcf per day of firm capacity on existing pipelines and an additional 0.3 Bcf per day of long-term firm sales with major customers having their own firm capacity. Additionally, CONSOL has contracted volumes of approximately 0.5 Bcf per day on several pipeline projects that will be completed over the next several years. Even with the future expiration of certain transportation contracts, the company's effective firm transportation capacity will increase to approximately 1.5 Bcf per day. The average demand cost for the existing firm capacity is approximately $0.24 per MMBtu. The average demand cost for the existing and committed firm capacity is approximately $0.33 per MMBtu.
In addition to firm transportation capacity, CONSOL has developed a processing portfolio to support the projected volumes from its wet production areas. The company has agreements in place to support the processing of approximately 0.5 Bcf per day of gross natural gas volumes.
In April, CONSOL began recovering and selling ethane primarily via Sunoco Logistics' Mariner East project, which ships ethane to the Marcus Hook Industrial Complex for export. Such ethane sales are expected to improve NGL netbacks in the second quarter. On an equivalent basis, these ethane sales currently yield a price in excess of the Texas Eastern M2 market where sales would generally have occurred had the volumes been rejected into the natural gas stream. CONSOL expects further revenue enhancement in 2016 and beyond as its recovered ethane volumes grow and as the Mariner East project expands in 2017.
Coal Division Results:
Coal Division First Quarter Summary:
During the first quarter of 2016, the Pennsylvania Operations total unit costs were $33.16 per ton, compared to $42.62 per ton in the year-earlier quarter, despite sales tons declining by approximately 18% over the same period.
As reported by CNX Coal Resources LP (CNXC) in their first quarter 2016 earnings press release, dated April 25, 2016, "In January 2016, we returned to running our mines on a more consistent schedule to achieve productivity improvements, despite running the risk of potentially selling some lower-priced tons in the export markets. Our strategy worked as expected, leading to improved mine consistency and better margins as the quarter advanced, with exports being able to absorb surplus mine production. During the first quarter of 2016, CNXC also made several operational adjustments including idling one longwall, reducing staffing levels and realigning employee benefits. All of these steps resulted in a more consistent operating schedule at the mines, reduced labor costs and improved productivity. Productivity for the first quarter, as measured by tons per employee-hour, improved by 14% compared to the year-ago period, despite the reduced number of longwalls in operation. Looking forward, CNXC expects a slight improvement in coal shipments in the second quarter coupled with a slight increase in cost of coal sold, compared to the first quarter, due to four expected longwall moves."
During the quarter, CONSOL's active coal operations generated $89 million of cash from continuing operations before capital expenditures.
COAL DIVISION RESULTS BY PRODUCT CATEGORY - Quarter-To-Quarter Comparison | ||||||||||||||||
PA Ops |
PA Ops |
Other |
Other | |||||||||||||
Quarter |
Quarter |
Quarter |
Quarter | |||||||||||||
Ended |
Ended |
Ended |
Ended | |||||||||||||
March 31, |
March 31, |
March 31, |
March 31, | |||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Beginning Inventory (millions of tons) |
0.1 |
0.2 |
0.3 |
0.1 |
||||||||||||
Coal Production (millions of tons) |
5.4 |
6.5 |
0.3 |
0.6 |
||||||||||||
Ending Inventory (millions of tons) |
0.3 |
0.2 |
— |
0.1 |
||||||||||||
Sales - Company Produced (millions of tons) |
5.3 |
6.5 |
0.4 |
0.5 |
||||||||||||
Sales Per Ton |
$ |
42.99 |
$ |
58.82 |
$ |
54.81 |
$ |
61.54 |
||||||||
Total Production Costs Per Ton |
$ |
33.16 |
$ |
42.62 |
$ |
51.58 |
$ |
54.05 |
||||||||
Average Margin Per Ton Sold |
$ |
9.83 |
$ |
16.20 |
$ |
3.23 |
$ |
7.49 |
||||||||
Addback: DD&A Per Ton |
$ |
6.45 |
$ |
6.66 |
$ |
3.03 |
$ |
3.32 |
||||||||
Average Margin Per Ton, before DD&A |
$ |
16.28 |
$ |
22.86 |
$ |
6.26 |
$ |
10.81 |
||||||||
Cash Flow before Cap. Ex ($ MM) |
$ |
86 |
$ |
149 |
$ |
3 |
$ |
5 |
The Pennsylvania Operations include Bailey, Enlow Fork, and Harvey mines. Other includes the Miller Creek Complex. Total Production Costs per Ton include: operating costs, royalty and production taxes and depreciation, depletion and amortization. Sales tons times Average Margin Per Ton, before DD&A is meant to approximate the amount of cash generated for the Pennsylvanian Operations and Other coal categories. This cash generation will be offset by maintenance of production (MOP) capital expenditures. Table may not sum due to rounding.
E&P Division Guidance:
CONSOL Energy continues to expect annual 2016 E&P Division production to grow by approximately 15%, compared to 2015 total production volumes.
Total hedged natural gas production in the 2016 second quarter is 70.7 Bcf. The annual gas hedge position is shown in the table below:
E&P DIVISION GUIDANCE |
||||||
2016 |
2017 | |||||
Total Yearly Production (Bcfe) / % growth |
~15% |
TBD* |
||||
Volumes Hedged (Bcf), as of 4/14/16 |
262.6 |
210.8 |
||||
* Yearly 2017 production will be a function of the second half of 2016 capital program, continued debottlenecking initiatives, and the company's drilled but uncompleted (DUC) well inventory.
CONSOL Energy's hedged gas volumes include a combination of NYMEX financial hedges and index financial hedges (NYMEX plus basis). In addition, to protect the NYMEX hedge volumes from basis exposure, CONSOL enters into basis-only financial hedges and physical sales with fixed basis at certain sales points. CONSOL Energy's gas hedge position is shown in the table below:
GAS HEDGES |
||||||||||||
Q2 2016 |
2016 |
2017 | ||||||||||
Total NYMEX + Basis* (Bcf) |
67.3 |
259.7 |
122.5 |
|||||||||
Average Hedge Price ($/Mcf) |
$ |
2.87 |
$ |
3.07 |
$ |
2.67 |
||||||
NYMEX Only Hedges Exposed to Basis (Bcf) |
- |
- |
88.3 |
|||||||||
Average Hedge Price ($/Mcf) |
- |
- |
$ |
2.98 |
||||||||
Physical Sales With Fixed Basis Exposed to NYMEX (Bcf) |
3.4 |
2.9 |
- |
|||||||||
Average Hedge Basis Value ($/Mcf) |
$ |
(0.20) |
$ |
(0.04) |
- |
* Includes physical sales with fixed basis in Q2 2016, 2016, and 2017 of 16.1 Bcf, 74.5 Bcf, and 24.1 Bcf, respectively.
During the first quarter of 2016, CONSOL Energy added additional NYMEX natural gas hedges of 22.3 Bcf for 2016 and 54.8 Bcf for 2017. In addition, to help mitigate basis exposure on NYMEX hedges, in the first quarter, CONSOL added 25.1 Bcf and 42.5 Bcf of basis hedges for 2016 and 2017, respectively.
CONSOL's 2016 NYMEX plus basis natural gas hedge position has increased to 259.7 Bcf at an average hedge price of $3.07 per Mcf. NYMEX plus basis hedge volumes are not exposed to basis differentials but instead have protected revenue. As a result, in 2016, NYMEX plus basis gas hedges should lock in revenue of approximately $797 million.
As previously stated on last quarter's earnings call, in accordance with the company's hedging program, CONSOL added longer duration hedges, which were layered in over time. The company's confidence in maintaining, or even further improving, its already low-cost structure, has enabled CONSOL to layer on these additional hedges, which will help provide downside protection.
During the first quarter of 2016, CONSOL Energy continued to evolve its hedging program and added NGL (propane) hedges, along with direct sales contracts to other counterparties. CONSOL currently has 7.5 million gallons of propane directly hedged from April of 2016 through March of 2017 at an average price of $0.43 per gallon.
Coal Division Guidance:
As stated in CONSOL Energy's press release on April 7, 2016, as part of the corporate reorganization resulting from the sale of the Buchanan Mine, CNX Coal Resources LP, which operates the Pennsylvania mining complex, will manage all human resources, land, marketing and external communications matters related to CONSOL's Pennsylvania Operations. As such, CONSOL Energy will adopt and expand upon CNX Coal Resources 2016 Adjusted EBITDA guidance that they provide in their press release through now providing guidance for CONSOL's pro rata total Coal Division 2016 Adjusted EBITDA.
COAL DIVISION GUIDANCE | ||||||||
2016 | ||||||||
CNX Coal Resources LP ("CNXC") Adjusted EBITDA (20% undivided interest of PA Operations) |
$ |
59 |
- |
$ |
69 |
|||
x5 (@ 100% interest) |
$ |
295 |
- |
$ |
345 |
|||
Less: Noncontrolling Interest |
(26) |
- |
(31) |
|||||
Plus: CONSOL's Other Coal Division EBITDA1 |
22 |
- |
27 |
|||||
Plus: CONSOL's Other Miscellaneous Coal EBITDA2 |
15 |
- |
20 |
|||||
Less: CONSOL's Other Coal Division Costs and Expenses (including Legacy Liabilities' Costs)3 |
(126) |
- |
(131) |
|||||
CONSOL Energy's Pro Rata Coal Division Adjusted EBITDA |
$ |
180 |
- |
$ |
230 |
Note: CONSOL Energy is unable to provide a reconciliation of projected CNXC Adjusted EBITDA, CONSOL's Other Coal Division EBITDA, and CONSOL's Other Miscellaneous Coal EBITDA to projected operating income, the most comparable financial measure calculated in accordance with GAAP, due to the unknown effect, timing and potential significance of certain income statement items.
(1) Includes fiscal year 2016 for Miller Creek and Other Coal Operations and 1Q16 for Buchanan, and excludes Loss on Sale of Buchanan.
(2) Includes miscellaneous other income (net of applicable expenses) associated with the company's Terminal Operations, Rental Income, Coal Royalty Income, and other miscellaneous land income.
(3) Includes Legacy Liability Costs of approximately $90-95 million; Other Coal-Related Corporate Expenses (STIC, stock-based compensation), and other miscellaneous items (coal reserve holding costs).
CONSOL Energy's Pro Rata Coal Division Adjusted EBITDA for 2016 is net of all legacy liabilities associated with the Coal Division, which are comprised of the following: long-term disability (LTD), workers compensation (WC), Coal Workers' Pneumoconiosis (CWP), Other Post-Employment Benefits (OPEB-retiree medical), salary retirement/pension, and asset retirement obligations (ARO).
Excluding the discontinued Virginia Operation's (the Buchanan Mine) 1.1 million tons sold in the first quarter, CONSOL Energy now expects annual 2016 consolidated total Coal Division sales to be approximately 23.9-27.4 million tons, which includes 2016 estimated consolidated total sales for Pennsylvania Operations of 22.5-25.5 million tons.
CONSOL Energy expects 2016 total consolidated Coal Division capital expenditures to now be between $105-$125 million, which includes Pennsylvania Operations capital expenditures of $90-$100 million. The Coal Division's reduction in capital expenditures were driven primarily from the deferral of spending associated with the coal refuse disposal area for one year, due to existing capacity and timing needed for construction. On a normalized basis, the Coal Division expects maintenance of production capital of $5-$6 per ton.
Liquidity:
As of March 31, 2016, CONSOL Energy had $1,279.7 million in total liquidity, which is comprised of $417.6 million of cash, excluding the CNXC cash balance, and $862.1 million available to be borrowed under its $2.0 billion bank facility. During the quarter, CONSOL's liquidity improved $423.8 million due to the sale of the Buchanan Mine and related metallurgical coal assets plus $49.2 million of cash generated from operations offset by an increase of $28.2 million in outstanding letters of credit. In addition, CONSOL holds 12.7 million CNXC limited partnership units with a current market value of approximately $101 million and 19.1 million CONE Midstream Partners LP ("CNNX") limited partnership units with a current market value of approximately $266 million, as of April 19, 2016.
CONSOL Energy used the sale proceeds and the cash generated from operations during the quarter to reduce outstanding debt, less cash and cash equivalents, by $445.2 million.
About CONSOL
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
Non-GAAP Financial Measures
Definition: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDA is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes and depreciation, depletion and amortization. Adjusted EBITDA is defined as EBITDA after adjusting for the discrete items listed below. Although EBIT, EBITDA, and Adjusted EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CONSOL Energy because they are widely used to evaluate a company's operating performance. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDA, or Adjusted EBITDA identically, the presentation here may not be comparable to similarly titled measures of other companies.
Reconciliation of EBIT, EBITDA and Adjusted EBITDA to financial net income attributable to CONSOL Energy Shareholders is as follows (dollars in 000):
Three Months Ended | ||||||||||||||||||||
March 31, | ||||||||||||||||||||
2016 |
2016 |
2016 |
2016 |
2015 | ||||||||||||||||
Dollars in thousands |
E&P Division |
COAL Division |
Other1 |
Total Company |
Total Company | |||||||||||||||
Net (Loss) Income |
$ |
(23,541) |
$ |
(49,015) |
$ |
(23,902) |
$ |
(96,458) |
$ |
79,030 |
||||||||||
Less: Loss (Income) from Discontinued Operations |
— |
46,172 |
— |
46,172 |
(244,317) |
|||||||||||||||
Add: Interest Expense |
653 |
1,733 |
47,480 |
49,866 |
55,122 |
|||||||||||||||
Less: Interest Income |
— |
— |
(214) |
(214) |
(1,143) |
|||||||||||||||
Add: Income Taxes |
— |
— |
(26,847) |
(26,847) |
195,898 |
|||||||||||||||
Earnings Before Interest & Taxes (EBIT) |
(22,888) |
(1,110) |
(3,483) |
(27,481) |
84,590 |
|||||||||||||||
Add: Depreciation, Depletion & Amortization |
105,715 |
54,352 |
— |
160,067 |
149,709 |
|||||||||||||||
Earnings Before Interest, Taxes and DD&A (EBITDA) from Continuing Operations |
$ |
82,827 |
$ |
53,242 |
$ |
(3,483) |
$ |
132,586 |
$ |
234,299 |
||||||||||
Adjustments: |
||||||||||||||||||||
Unrealized Loss(Gain) on Commodity Derivative Instruments |
29,271 |
— |
— |
29,271 |
(60,004) |
|||||||||||||||
Loss on Sale of Gathering Pipeline |
12,636 |
— |
— |
12,636 |
— |
|||||||||||||||
Severance Expense |
— |
2,251 |
667 |
2,918 |
— |
|||||||||||||||
Loss on Debt Extinguishment |
— |
— |
— |
— |
67,734 |
|||||||||||||||
Total Pre-tax Adjustments |
41,907 |
2,251 |
667 |
44,825 |
7,730 |
|||||||||||||||
Adjusted EBITDA |
$ |
124,734 |
$ |
55,493 |
$ |
(2,816) |
$ |
177,411 |
$ |
242,029 |
||||||||||
Less: Noncontrolling Interest |
— |
(1,114) |
— |
(1,114) |
— |
|||||||||||||||
Adjusted EBITDA Attributable to Continuing Operations |
$ |
124,734 |
$ |
54,379 |
$ |
(2,816) |
$ |
176,297 |
$ |
242,029 |
Note: Income tax effect of Total Pre-tax Adjustments was $10,310 and $1,778 for the three months ended March 31, 2016 and March 31, 2015, respectively. Adjusted net income attributable to CONSOL Energy shareholders for the three months ended March 31, 2016 is calculated as GAAP net loss from continuing operations of $50,286 plus total pre-tax adjustments of $44,825, less the tax benefit of $10,310, equals the adjusted net loss from continuing operations of $15,771.
(1) CONSOL Energy's Other Division includes expenses from various other corporate activities including income tax expense that are not allocated to E&P or Coal Divisions.
Free cash flow and organic free cash flow from continuing operations 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 and organic free cash flow from continuing operations 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.
Organic Cash Flow From Continuing Operations |
Three Months Ended March 31, 2016 | ||
Net Cash Provided by Continuing Operations |
$ |
119,808 |
|
Capital Expenditures |
(78,968) |
||
Net Investment in Equity Affiliates |
(5,578) |
||
Organic Free Cash Flow from Continuing Operations |
$ |
35,262 |
Free Cash Flow |
Three Months Ended March 31, 2016 | ||
Net Cash Provided by Operating Activities |
$ |
128,442 |
|
Capital Expenditures |
(78,968) |
||
Capital Expenditures of Discontinued Operations |
(5,737) |
||
Net Investment in Equity Affiliates |
(5,578) |
||
Proceeds From Sales of Assets |
8,453 |
||
Proceeds From Sale of Buchanan Mine |
402,806 |
||
Free Cash Flow |
$ |
449,418 |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "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. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital; prices for natural gas, natural gas and other liquids and coal are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas, natural gas liquids and coal affecting our operating results and cash flows; foreign currency fluctuations could adversely affect the competitiveness of our coal abroad; our customers extending existing contracts or entering into new long-term contracts for coal on favorable terms; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our natural gas, natural gas liquids and coal to market; a loss of our competitive position because of the competitive nature of the natural gas and coal industries, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and coal and for our securities; the risks inherent in natural gas and coal operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions which could impact financial results; decreases in the availability of, or increases in, the price of commodities or capital equipment used in our mining and transportation operations; obtaining and renewing governmental permits and approvals for our natural gas and coal operations; the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our natural gas and coal operations; our ability to find adequate water sources for our use in gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current gas and coal operations; the effects of mine closing, reclamation, gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable gas, oil and coal reserves; defects may exist in our chain of title and we may incur additional costs associated with perfecting title for gas rights on some of our properties or failing to acquire these additional rights may result in a reduction of our estimated reserves; the outcomes of various legal proceedings, which are more fully described in our reports filed under the Securities Exchange Act of 1934; exposure to employee-related long-term liabilities; lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan exceeding total service and interest cost in a plan year; divestitures we anticipate may not occur or produce anticipated benefits; the terms of our existing joint ventures restrict our flexibility, actions taken by the other party in our gas joint ventures may impact our financial position and various circumstances could cause us not to realize the benefits we anticipate receiving from these joint ventures; risks associated with our debt; replacing our gas and oil reserves, which if not replaced, will cause our gas and oil reserves and production to decline; declines in our borrowing base could occur for a variety of reasons, including lower natural gas or oil prices, declines in natural gas and oil proved reserves, and lending regulations requirements or regulations; our hedging activities may prevent us from benefiting from price increases and may expose us to other risks; changes in federal or state income tax laws, particularly in the area of percentage depletion and intangible drilling costs, could cause our financial position and profitability to deteriorate; failure to appropriately allocate capital and other resources among our strategic opportunities may adversely affect our financial condition; failure by Murray Energy to satisfy liabilities it acquired from us, or failure to perform its obligations under various arrangements, which we guaranteed, could materially or adversely affect our results of operations, financial position, and cash flows; information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident; operating in a single geographic area; certain provisions in our multi-year sales contracts may provide limited protection during adverse economic conditions, and may result in economic penalties or permit the customer to terminate the contract; our common units in CNX Coal Resources LP and CONE Midstream Partners LP are subordinated, and we may not receive distributions from CNX Coal Resources LP or CONE Midstream Partners LP; with respect to the sale of the Buchanan and Amonate mines and other coal assets to Coronado IV LLC - disruption to our business, including customer, employee and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating results; other factors discussed in the 2015 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible oil and gas reserves that a company anticipates as of a given date to be economically and legally producible and deliverable by application of development projects to known accumulations. We may use certain terms in this press release, such as EUR (estimated ultimate recovery), unproved reserves and total resource potential, that the SEC's rules strictly prohibit us from including in filings with the SEC. These measures are by their nature more speculative than estimates of reserves prepared in accordance with SEC definitions and guidelines and accordingly are less certain. We also note that the SEC strictly prohibits us from aggregating proved, probable and possible reserves in filings with the SEC due to the different levels of certainty associated with each reserve category.
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||
(Dollars in thousands, except per share data) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Revenues and Other Income: |
2016 |
2015 | |||||
Natural Gas, NGLs and Oil Sales |
$ |
181,255 |
$ |
224,438 |
|||
Gain on Commodity Derivative Instruments |
55,060 |
90,145 |
|||||
Coal Sales |
251,895 |
416,151 |
|||||
Other Outside Sales |
7,709 |
13,130 |
|||||
Purchased Gas Sales |
8,618 |
3,597 |
|||||
Freight-Outside Coal |
13,110 |
6,525 |
|||||
Miscellaneous Other Income |
48,132 |
36,523 |
|||||
(Loss) Gain on Sale of Assets |
(7,265) |
2,145 |
|||||
Total Revenue and Other Income |
558,514 |
792,654 |
|||||
Costs and Expenses: |
|||||||
Exploration and Production Costs |
|||||||
Lease Operating Expense |
27,739 |
37,256 |
|||||
Transportation, Gathering and Compression |
93,974 |
75,521 |
|||||
Production, Ad Valorem, and Other Fees |
8,303 |
9,192 |
|||||
Depreciation, Depletion and Amortization |
105,715 |
87,444 |
|||||
Exploration and Production Related Other Costs |
2,408 |
2,040 |
|||||
Purchased Gas Costs |
7,868 |
2,957 |
|||||
Other Corporate Expenses |
27,694 |
19,096 |
|||||
Selling, General, and Administrative Costs |
17,563 |
21,824 |
|||||
Total Exploration and Production Costs |
291,264 |
255,330 |
|||||
Coal Costs |
|||||||
Operating and Other Costs |
215,074 |
291,407 |
|||||
Depreciation, Depletion and Amortization |
54,352 |
62,258 |
|||||
Freight Expense |
13,110 |
6,525 |
|||||
Selling, General, and Administrative Costs |
5,650 |
7,202 |
|||||
Other Corporate Expenses |
3,143 |
6,074 |
|||||
Total Coal Costs |
291,329 |
373,466 |
|||||
Other Costs |
|||||||
Miscellaneous Operating Expense |
3,188 |
10,384 |
|||||
Depreciation, Depletion and Amortization |
— |
7 |
|||||
Loss on Debt Extinguishment |
— |
67,734 |
|||||
Interest Expense |
49,866 |
55,122 |
|||||
Total Other Costs |
53,054 |
133,247 |
|||||
Total Costs And Expenses |
635,647 |
762,043 |
|||||
(Loss) Earnings Before Income Tax |
(77,133) |
30,611 |
|||||
Income Taxes |
(26,847) |
195,898 |
|||||
Loss From Continuing Operations |
(50,286) |
(165,287) |
|||||
(Loss) Income From Discontinued Operations, net |
(46,172) |
244,317 |
|||||
Net (Loss) Income |
(96,458) |
79,030 |
|||||
Less: Net Income Attributable to Noncontrolling Interest |
1,114 |
— |
|||||
Net (Loss) Income Attributable to CONSOL Energy Shareholders |
$ |
(97,572) |
$ |
79,030 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF INCOME (CONTINUED) | |||||||
(Dollars in thousands, except per share data) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Earnings Per Share |
2016 |
2015 | |||||
Basic |
|||||||
Loss from Continuing Operations |
$ |
(0.22) |
$ |
(0.72) |
|||
(Loss) Income from Discontinued Operations |
(0.21) |
1.06 |
|||||
Total Basic (Loss) Earnings Per Share |
$ |
(0.43) |
$ |
0.34 |
|||
Dilutive |
|||||||
Loss from Continuing Operations |
$ |
(0.22) |
$ |
(0.72) |
|||
(Loss) Income from Discontinued Operations |
(0.21) |
1.06 |
|||||
Total Dilutive (Loss) Earnings Per Share |
$ |
(0.43) |
$ |
0.34 |
|||
Dividends Paid Per Share |
$ |
0.01 |
$ |
0.0625 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||
Three Months Ended | |||||||
(Dollars in thousands) |
March 31, | ||||||
(Unaudited) |
2016 |
2015 | |||||
Net (Loss) Income |
$ |
(96,458) |
$ |
79,030 |
|||
Other Comprehensive Loss: |
|||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: $682, $90) |
(2,484) |
(149) |
|||||
Reclassification of Cash Flow Hedges from OCI to Earnings (Net of tax: $5,624, $11,213) |
(9,814) |
(19,314) |
|||||
Other Comprehensive Loss |
(12,298) |
(19,463) |
|||||
Comprehensive (Loss) Income |
(108,756) |
59,567 |
|||||
Less: Net Income Attributable to Noncontrolling Interests |
1,114 |
— |
|||||
Comprehensive (Loss) Income Attributable to CONSOL Energy Inc. Shareholders |
$ |
(109,870) |
$ |
59,567 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) |
|||||||
(Dollars in thousands) |
March 31, |
December 31, | |||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash and Cash Equivalents |
$ |
426,650 |
$ |
72,578 |
|||
Accounts and Notes Receivable: |
|||||||
Trade |
165,941 |
157,162 |
|||||
Other Receivables |
149,490 |
121,881 |
|||||
Inventories |
77,230 |
83,674 |
|||||
Recoverable Income Taxes |
1,871 |
13,887 |
|||||
Prepaid Expenses |
282,214 |
297,421 |
|||||
Current Assets of Discontinued Operations |
43,047 |
58,160 |
|||||
Total Current Assets |
1,146,443 |
804,763 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
14,639,990 |
14,595,952 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
5,549,599 |
5,396,295 |
|||||
Property, Plant, and Equipment of Discontinued Operations, Net |
— |
469,720 |
|||||
Total Property, Plant and Equipment—Net |
9,090,391 |
9,669,377 |
|||||
Other Assets: |
|||||||
Investment in Affiliates |
251,628 |
237,330 |
|||||
Other |
227,396 |
217,585 |
|||||
Other Assets of Discontinued Operations |
12 |
847 |
|||||
Total Other Assets |
479,036 |
455,762 |
|||||
TOTAL ASSETS |
$ |
10,715,870 |
$ |
10,929,902 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) |
|||||||
(Dollars in thousands, except per share data) |
March 31, |
December 31, | |||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
221,625 |
$ |
257,288 |
|||
Current Portion of Long-Term Debt |
5,316 |
5,855 |
|||||
Short-Term Notes Payable |
851,500 |
952,000 |
|||||
Other Accrued Liabilities |
486,906 |
440,523 |
|||||
Current Liabilities of Discontinued Operations |
19,584 |
25,272 |
|||||
Total Current Liabilities |
1,584,931 |
1,680,938 |
|||||
Long-Term Debt: |
|||||||
Long-Term Debt |
2,725,471 |
2,709,444 |
|||||
Capital Lease Obligations |
33,490 |
35,008 |
|||||
Long-Term Debt of Discontinued Operations |
— |
3,753 |
|||||
Total Long-Term Debt |
2,758,961 |
2,748,205 |
|||||
Deferred Credits and Other Liabilities: |
|||||||
Deferred Income Taxes |
52,844 |
74,629 |
|||||
Postretirement Benefits Other Than Pensions |
623,525 |
630,892 |
|||||
Pneumoconiosis Benefits |
118,178 |
111,903 |
|||||
Mine Closing |
290,108 |
289,785 |
|||||
Gas Well Closing |
164,124 |
163,842 |
|||||
Workers' Compensation |
68,846 |
69,812 |
|||||
Salary Retirement |
86,369 |
91,596 |
|||||
Reclamation |
34,490 |
34,150 |
|||||
Other |
194,406 |
166,957 |
|||||
Deferred Credits and Other Liabilities of Discontinued Operations |
— |
11,417 |
|||||
Total Deferred Credits and Other Liabilities |
1,632,890 |
1,644,983 |
|||||
TOTAL LIABILITIES |
5,976,782 |
6,074,126 |
|||||
Stockholders' Equity: |
|||||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 229,363,247 Issued and Outstanding at March 31, 2016; 229,054,236 Issued and Outstanding at December 31, 2015 |
2,297 |
2,294 |
|||||
Capital in Excess of Par Value |
2,436,436 |
2,435,497 |
|||||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding |
— |
— |
|||||
Retained Earnings |
2,478,493 |
2,579,834 |
|||||
Accumulated Other Comprehensive Loss |
(327,896) |
(315,598) |
|||||
Total CONSOL Energy Inc. Stockholders' Equity |
4,589,330 |
4,702,027 |
|||||
Noncontrolling Interest |
149,758 |
153,749 |
|||||
TOTAL EQUITY |
4,739,088 |
4,855,776 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
10,715,870 |
$ |
10,929,902 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||
(Dollars in thousands, except per share data) |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings (Deficit) |
Accumulated Other Comprehensive Loss |
Total CONSOL Energy Inc. |
Non- Controlling Interest |
Total Equity | ||||||||||||||||||||
December 31, 2015 |
$ |
2,294 |
$ |
2,435,497 |
$ |
2,579,834 |
$ |
(315,598) |
$ |
4,702,027 |
$ |
153,749 |
$ |
4,855,776 |
|||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
Net (Loss) Income |
— |
— |
(97,572) |
— |
(97,572) |
1,114 |
(96,458) |
||||||||||||||||||||
Other Comprehensive Loss |
— |
— |
— |
(12,298) |
(12,298) |
— |
(12,298) |
||||||||||||||||||||
Comprehensive (Loss) Income |
— |
— |
(97,572) |
(12,298) |
(109,870) |
1,114 |
(108,756) |
||||||||||||||||||||
Issuance of Common Stock |
3 |
— |
— |
— |
3 |
— |
3 |
||||||||||||||||||||
Treasury Stock Activity |
— |
— |
(1,475) |
— |
(1,475) |
— |
(1,475) |
||||||||||||||||||||
Tax Cost From Stock-Based Compensation |
— |
(4,377) |
— |
— |
(4,377) |
— |
(4,377) |
||||||||||||||||||||
Amortization of Stock-Based Compensation Awards |
— |
5,316 |
— |
— |
5,316 |
308 |
5,624 |
||||||||||||||||||||
Distributions to Noncontrolling Interest |
— |
— |
— |
— |
— |
(5,413) |
(5,413) |
||||||||||||||||||||
Dividends ($0.01 per share) |
— |
— |
(2,294) |
— |
(2,294) |
— |
(2,294) |
||||||||||||||||||||
Balance at March 31, 2016 |
$ |
2,297 |
$ |
2,436,436 |
$ |
2,478,493 |
$ |
(327,896) |
$ |
4,589,330 |
$ |
149,758 |
$ |
4,739,088 |
CONSOL ENERGY INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in thousands) |
Three Months Ended | ||||||
(Unaudited) |
March 31, | ||||||
Operating Activities: |
2016 |
2015 | |||||
Net (Loss) Income |
$ |
(96,458) |
$ |
79,030 |
|||
Adjustments to Reconcile Net Loss to Net Cash Provided By Operating Activities: |
|||||||
Net Loss (Income) from Discontinued Operations |
46,172 |
(244,317) |
|||||
Depreciation, Depletion and Amortization |
160,067 |
149,709 |
|||||
Non-Cash Other Post-Employment Benefits |
— |
(10,366) |
|||||
Stock-Based Compensation |
5,624 |
7,481 |
|||||
Loss (Gain) on Sale of Assets |
7,265 |
(2,145) |
|||||
Loss on Debt Extinguishment |
— |
67,734 |
|||||
Gain on Commodity Derivative Instruments |
(55,060) |
(90,145) |
|||||
Net Cash Received in Settlement of Commodity Derivative Instruments |
84,331 |
30,141 |
|||||
Deferred Income Taxes |
(27,127) |
200,300 |
|||||
Equity in Earnings of Affiliates |
(16,665) |
(11,323) |
|||||
Return on Equity Investment |
4,512 |
6,103 |
|||||
Changes in Operating Assets: |
|||||||
Accounts and Notes Receivable |
(19,911) |
26,664 |
|||||
Inventories |
(7,476) |
(2,002) |
|||||
Prepaid Expenses |
19,104 |
38,356 |
|||||
Changes in Other Assets |
(9,751) |
7,037 |
|||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
(11,487) |
(12,619) |
|||||
Accrued Interest |
35,867 |
42,719 |
|||||
Other Operating Liabilities |
849 |
(80,808) |
|||||
Changes in Other Liabilities |
(4,147) |
(11,569) |
|||||
Other |
4,099 |
7,909 |
|||||
Net Cash Provided by Continuing Operations |
119,808 |
197,889 |
|||||
Net Cash Provided by Discontinued Operating Activities |
8,634 |
30,481 |
|||||
Net Cash Provided by Operating Activities |
128,442 |
228,370 |
|||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(78,968) |
(287,804) |
|||||
Proceeds from Sales of Assets |
8,453 |
2,108 |
|||||
Net Investments in Equity Affiliates |
(5,578) |
(27,992) |
|||||
Net Cash Used in Continuing Operations |
(76,093) |
(313,688) |
|||||
Net Cash Provided by (Used in) Discontinued Investing Activities |
397,069 |
(6,215) |
|||||
Net Cash Provided by (Used in) Investing Activities |
320,976 |
(319,903) |
|||||
Cash Flows from Financing Activities: |
|||||||
(Payments on) Proceeds from Short-Term Borrowings |
(100,500) |
760,500 |
|||||
Payments on Miscellaneous Borrowings |
(2,128) |
(2,464) |
|||||
Payments on Long-Term Notes, including Redemption Premium |
— |
(1,261,009) |
|||||
Net Proceeds from Revolver - CNX Coal Resources LP |
15,000 |
— |
|||||
Distributions to Noncontrolling Interest |
(5,413) |
— |
|||||
Proceeds from Securitization Facility |
— |
32,669 |
|||||
Proceeds from Issuance of Long-Term Notes |
— |
492,760 |
|||||
Tax Benefit from Stock-Based Compensation |
— |
15 |
|||||
Dividends Paid |
(2,294) |
(14,400) |
|||||
Issuance of Common Stock |
3 |
1,736 |
|||||
Purchases of Treasury Stock |
— |
(71,674) |
|||||
Debt Issuance and Financing Fees |
— |
(18,257) |
|||||
Net Cash Used in Continuing Operations |
(95,332) |
(80,124) |
|||||
Net Cash Used in Discontinued Financing Activities |
(14) |
(14) |
|||||
Net Cash Used in Financing Activities |
(95,346) |
(80,138) |
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
354,072 |
(171,671) |
|||||
Cash and Cash Equivalents at Beginning of Period |
72,578 |
176,989 |
|||||
Cash and Cash Equivalents at End of Period |
$ |
426,650 |
$ |
5,318 |
Logo - http://photos.prnewswire.com/prnh/20120416/NE87957LOGO
SOURCE CONSOL Energy Inc.
PITTSBURGH, April 25, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today reported financial and operating results for the quarter ended March 31, 2016.
First Quarter 2016 Results
Highlights of the CNXC first quarter of 2016 results include:
Management Comments
"The CNXC team delivered excellent operational performance during the first quarter of 2016 and helped offset declining cash margins in the face of challenging coal markets and further deterioration in coal prices." said Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP LLC (the "General Partner"). "Specifically, the cash cost per ton in the first quarter was the lowest since first quarter of 2009, despite the inconsistent customer shipments that we noted in January. Our performance not only highlights the ability of the Pennsylvania mining complex to adapt in a challenging commodity price environment, but also to remain competitive as the U.S. coal market continues to reshape. As expected, the first quarter of 2016 began with abnormally low shipment volumes in January and February. However, we saw some improvements in March, which allowed us to have near-record production at some of our longwalls. Our cost structure allowed us to continue to remain profitable in spite of less than favorable pricing during the quarter."
"On the safety and compliance side, we had a mixed first quarter. While we were able to reduce the severity of the incidents compared to the same period last year, there was an increase in the number of recordable incidents. We continue to remain focused on our core values of safety and compliance and continue our efforts to improve on both of these key measures."
1"Adjusted EBITDA" and "Distributable Cash Flow" are non-GAAP financial measures, which are reconciled to GAAP net income and net cash provided by operating activities, under the caption "Non-GAAP Financial Measures"
Sales & Marketing
Despite the challenging coal market backdrop and high customer inventories, our marketing team was successful in improving overall coal shipments throughout the quarter. As expected, some customer deliveries have been slower than usual but our marketing team continues to work with those accounts. In the first quarter of 2016, we successfully tested Bailey coal at two new customer plants and are currently in active negotiations for additional term business. During the first quarter of 2016, we sold 1.1 million tons to 39 different end users domestically and internationally. For the remainder of 2016, we continue to expect a gradual recovery in shipments at some of our customers as they normalize their inventories while competing with low natural gas prices. This could result in us selling some coal in the spot market, which could weigh on our realizations due to the changing customer mix. According to the most recent estimates published by the EIA in its short term energy outlook, U.S. coal demand declined approximately 15%, while industry-wide coal production declined almost 31% in the first quarter of 2016 compared to year-earlier quarter. We believe that given a normal summer, this decline in industry-wide production may help normalize inventory and set the stage for a recovery in coal prices. In the interim, we will continue to focus on building our contract book and running our mines as safely and efficiently as possible. To that extent and including our expectations of carryover tons from 2016, CNXC has solid contractual sales positions for 2017 and 2018 of 70% and 52%, respectively, based on a 5.2 million ton production run rate.
Organizational Appointment
CNXC has named Jim McCaffrey to lead our Coal Sales & Marketing team. In this role, Mr. McCaffrey will have sole responsibility for the coal sales and marketing for the Pennsylvania mining complex. Mr. McCaffrey has led the marketing efforts for coal from the Pennsylvania mining complex since 2009. Mr. McCaffrey joined CONSOL Energy Inc. in 1976 and spent 27 years in operations before transitioning to the corporate coal sales and marketing team in 2003.
Operational Update and Outlook
In January 2016, we returned to running our mines on a more consistent schedule to achieve productivity improvements, even if it resulted in some lower-priced sales in the export markets. Our strategy worked as expected, leading to improved mine consistency and improving margins as the quarter advanced, with exports being able to absorb surplus mine production. During the first quarter of 2016, CNXC also made several operational adjustments including idling of one longwall, reducing staffing levels and realigning employee benefits. All of these steps resulted in a more consistent operating schedule at the mines, reduced labor cost and improved productivity. Productivity for the first quarter, as measured by tons per employee-hour, improved by 14% compared to the year-ago period, despite the reduced number of longwalls in operation. Looking forward, CNXC expects slight improvement in the coal shipments in the second quarter coupled with a slight increase in cost of coal sold, compared to the first quarter, due to four scheduled longwall moves.
Quarterly Distribution
During first quarter of 2016, CNXC generated distributable cash flow1 of $4.4 million and distribution coverage of 0.36x. The Board of Directors of our General Partner declared a cash distribution of $0.5125 per unit to all unitholders for the first quarter of 2016. The distribution will be made on May 12, 2016 to unitholders of record at the close of business on May 5, 2016.
First Quarter Summary
For its 20% undivided interest in the Pennsylvania mining complex, CNXC sold 1.1 million tons of coal during the first quarter of 2016. Total production declined to 1.1 million tons compared to 1.3 million tons produced in the same quarter of 2015 as CNXC aligned production with market conditions. During the first quarter, CNXC sold approximately 0.3 million tons of coal in export market compared to 0.4 million tons in same quarter of 2015. As previously announced overall sales were impacted by weak winter burn and reduced coal generation weighing on the timing of shipments. Our total unit costs for coal sold in the quarter were $33.16 per ton, compared to $42.62 per ton in the year-earlier quarter. The improved cost performance was driven by improved productivity, reduced staffing levels and realignment of employee benefits, offset by lower production due to inconsistent shipment schedules.
Three Months Ended | ||||
March 31, 2016 |
March 31, 2015 | |||
Coal Production |
million tons |
1.1 |
1.3 | |
Coal Sales |
million tons |
1.1 |
1.3 | |
Average Realized Price |
per ton |
$42.99 |
$58.82 | |
Average Cost of Coal Sold |
per ton |
$33.16 |
$42.62 |
Guidance and Outlook
Based on its current expectations, CNXC is providing the following updated 2016 outlook for coal sales, adjusted EBITDA and maintenance capital expenditures.
First Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss the first quarter of 2016 financial and operational results, is scheduled for April 25, 2016 at 5:00 PM 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 page of our website, www.cnxlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) |
1-855-656-0928 |
Participant international dial in |
1-412-902-4112 |
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership recently formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its initial assets include a 20% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Brian Aiello, (724) 485-3078
brianaiello@cnxlp.com
Non-GAAP Financial Measures
Adjusted EBITDA and distributable cash flow are not Generally Accepted Accounting Principles ("GAAP") measures. Adjusted EBITDA is defined as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) material nonrecurring and other items which may not reflect the trend of our future results. Management believes that the presentation of adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and our presentation of adjusted EBITDA may vary from that presented by other companies. As a result, adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies. Distributable cash flow is defined as adjusted EBITDA less net cash interest paid and estimated maintenance capital expenditures. Management believes that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and our presentation may vary from the presentations of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each period indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each period indicated.
(Dollars in thousands) |
Three Months Ended | |||
Net income |
$ |
2,499 | ||
Plus: |
||||
Interest expense |
1,994 | |||
Depreciation, depletion and amortization |
8,253 | |||
Stock/Unit based compensation |
308 | |||
Adjusted EBITDA |
$ |
13,054 | ||
Less: |
||||
Cash Interest |
1,967 | |||
Estimated Maintenance Capital Expenditures |
6,700 | |||
Distributable Cash Flow |
$ |
4,387 | ||
Net Cash Provided by Operating Activities |
$ |
2,285 | ||
Less: |
||||
Interest Expense, Net |
1,994 | |||
Other, Including Working Capital |
(12,763) | |||
Adjusted EBITDA |
$ |
13,054 | ||
Less: |
||||
Cash Interest |
1,967 | |||
Estimated Maintenance Capital Expenditures |
6,700 | |||
Distributable Cash Flow |
$ |
4,387 |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; estimated adjusted EBITDA and distributable cash flow are subject to various inherent uncertainties; our acquiring additional undivided interests in the Pennsylvania mining complex or other assets from our sponsor may not occur; uncertainties exist in estimating our economically recoverable coal reserves; our ability to acquire additional coal reserves that are economically recoverable; deterioration in the global economic conditions in any of the industries in which our customers operate, a worldwide financial downturn or negative credit market conditions; decreases in demand for electricity and changes in coal consumption patterns of U.S. electric power generators; a substantial or extended decline in prices we receive for our coal due to volatility, oversupply, weather, availability of alternative fuels or other factors; increased competition within the coal industry, a loss of our competitive position or foreign currency fluctuations affecting the competitiveness of our coal abroad; the risks inherent in coal operations, including the occurrence of unexpected disruptions, geological conditions, environmental hazards, equipment failure, fires, explosions, accidents, security breaches or terroristic acts and weather conditions and we may not be insured or fully insured against such the losses from events; our mines being part of a single mining complex and located in a single geographic area; the delay or disruption of rail services transporting our coal or increased transportation costs for our coal; the occurrence of significant downtime of our major pieces of mining equipment including our preparation plant; our customers extending existing contracts or entering into new long-term contracts for coal; the loss of or significant reduction in purchases by our largest customers; provisions in our multi-year sales contracts may provide limited protection to us during adverse economic conditions, may result in economic penalties to us or permit customer termination of these contracts; our inability to collect payments from customers if their creditworthiness declines; our ability to raise on satisfactory terms the capital or financing needed for our portion of the substantial capital expenditures associated with our mines; our inability to obtain equipment, parts and raw materials in timely manner, in sufficient quantities or at reasonable costs in our coal mining and transportation operations; our inability to integrate future acquisitions and achieve anticipated benefits; restrictions in our revolving credit facility could adversely affect our business, financial condition, results of operation and ability to make quarterly cash distributions; future debt we incur may limit our flexibility to obtain financing and pursue other business opportunities; increases in interest rates; our ability to make distributions depends upon our cash flow; we may have to coordinate our mining operations with oil and natural gas drillers; we may incur additional costs and delays associated with perfecting title for our coal rights; we rely upon our general partner and employees of our sponsor for management; our mines are operated by a work force that is employed exclusively by our sponsor and our sponsors employees could unionize; we depend upon cash flow generated by our subsidiaries; terrorist attacks or cyber incidents could result in information theft, data corruption and/or financial loss; the impact of potential, as well as any adopted regulations, relating to greenhouse gas emissions on the market for coal, on our operating costs and on the value of our coal assets; electric power generators and other coal users switching to alternative fuels in order to comply with various environmental standards related to coal combustion emissions or due to various incentives to generate electricity from renewable energy sources; our costs could increase and our coal operations could be restricted by the effects of existing and future government environmental regulation; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal operations; our obtaining and renewing governmental permits and approvals for our coal operations; the effects of stringent federal and state employee health and safety regulations of our mines, including the ability of regulators to shut down a mine; the effects of our mine closing and reclamation obligations; any termination of our tax treatment as a partnership including as a result of a sale of 50% or more of our capital and profits interests during any 12 month period; our tax positions; the elimination of current U.S. federal income tax preferences available for coal exploration and development; and other factors discussed in the "Risk Factors" section of the prospectus included in our registration statement on Form S-1, in the form last filed with the SEC, as well as any periodic report on Forms 10-K and 10-Q that we file with the SEC.
CNX COAL RESOURCES LP | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Dollars in thousands, except unit data) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2016 |
2015 | ||||||
Coal Revenue |
$ |
45,233 |
$ |
76,887 | |||
Freight Revenue |
2,615 |
474 | |||||
Other Income (Loss) |
(9) |
231 | |||||
Total Revenue and Other Income |
47,839 |
77,592 | |||||
Operating and Other Costs |
30,794 |
46,114 | |||||
Depreciation, Depletion and Amortization |
8,253 |
9,149 | |||||
Freight Expense |
2,615 |
474 | |||||
Selling, General and Administrative Expenses |
1,684 |
2,125 | |||||
Interest Expense |
1,994 |
2,381 | |||||
Total Costs |
45,340 |
60,243 | |||||
Net Income |
$ |
2,499 |
$ |
17,349 | |||
Calculation of Limited Partner Interest in Net Income: |
|||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Coal Resources |
$ |
2,499 |
N/A | ||||
Less: General Partner Interest in Net Income |
51 |
N/A | |||||
Limited Partner Interest in Net Income |
$ |
2,448 |
N/A | ||||
Net Income per Limited Partner Unit - Basic |
$ |
0.11 |
N/A | ||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.11 |
N/A | ||||
Limited Partner Units Outstanding - Basic |
23,222,134 |
N/A | |||||
Limited Partner Units Outstanding - Diluted |
23,223,540 |
N/A | |||||
Cash Distributions Declared per Unit |
$ |
0.5125 |
N/A |
Effective first quarter of 2016, CNXC will report selling related expense as part of selling, general & administrative expenses. For historical reconciliation of this change, please refer to the investor section of our website.
CNX COAL RESOURCES LP | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
(Unaudited) |
|||||||
March 31, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
9,095 |
$ |
6,531 | |||
Trade Receivables |
19,145 |
15,518 | |||||
Other Receivables |
372 |
377 | |||||
Inventories |
10,901 |
9,791 | |||||
Prepaid Expenses |
3,643 |
4,080 | |||||
Total Current Assets |
43,156 |
36,297 | |||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
694,369 |
692,482 | |||||
Less—Accumulated Depreciation, Depletion and Amortization |
328,783 |
320,729 | |||||
Total Property, Plant and Equipment—Net |
365,586 |
371,753 | |||||
Other Assets: |
|||||||
Other |
16,021 |
14,079 | |||||
Total Other Assets |
16,021 |
14,079 | |||||
TOTAL ASSETS |
$ |
424,763 |
$ |
422,129 | |||
LIABILITIES AND PARTNERS' CAPITAL |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
12,645 |
$ |
14,023 | |||
Accounts Payable—Related Party |
1,280 |
3,452 | |||||
Other Accrued Liabilities |
29,969 |
29,978 | |||||
Total Current Liabilities |
43,894 |
47,453 | |||||
Long-Term Debt: |
|||||||
Revolver, net of debt issuance and financing fees |
196,170 |
180,946 | |||||
Capital Lease Obligations |
95 |
100 | |||||
Total Long-Term Debt |
196,265 |
181,046 | |||||
Deferred Credits and Other Liabilities: |
|||||||
Pneumoconiosis Benefits |
1,701 |
1,547 | |||||
Workers' Compensation |
2,395 |
2,343 | |||||
Asset Retirement Obligations |
6,943 |
6,799 | |||||
Other |
552 |
571 | |||||
Total Deferred Credits and Other Liabilities |
11,591 |
11,260 | |||||
TOTAL LIABILITIES |
251,750 |
239,759 | |||||
Partners' Capital: |
|||||||
Common Units (11,611,067 Units Outstanding at March 31, 2016 and December 31, 2015) |
149,890 |
154,309 | |||||
Subordinated Units (11,611,067 Units Outstanding at March 31, 2016 and December 31, 2015) |
1,461 |
6,188 | |||||
General Partner Interest |
12,890 |
13,081 | |||||
Accumulated Other Comprehensive Income |
8,772 |
8,792 | |||||
Total Partners' Capital |
173,013 |
182,370 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
424,763 |
$ |
422,129 |
CNX COAL RESOURCES LP | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Dollars in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities: |
|||||||
Net Income |
$ |
2,499 |
$ |
17,349 | |||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: |
|||||||
Depreciation, Depletion and Amortization |
8,253 |
9,149 | |||||
(Gain) Loss on Sale of Assets |
10 |
(15) | |||||
Unit Based Compensation |
308 |
— | |||||
Other Adjustments to Net Income |
221 |
38 | |||||
Changes in Operating Assets: |
|||||||
Accounts and Notes Receivable |
(3,622) |
(726) | |||||
Inventories |
(1,110) |
422 | |||||
Prepaid Expenses |
437 |
299 | |||||
Changes in Other Assets |
(1,942) |
(123) | |||||
Changes in Operating Liabilities: |
|||||||
Accounts Payable |
(736) |
1,115 | |||||
Accounts Payable—Related Party |
(2,172) |
— | |||||
Other Operating Liabilities |
(7) |
726 | |||||
Changes in Other Liabilities |
146 |
(790) | |||||
Net Cash Provided by Operating Activities |
2,285 |
27,444 | |||||
Cash Flows from Investing Activities: |
|||||||
Capital Expenditures |
(2,581) |
(6,510) | |||||
Proceeds from Sales of Assets |
14 |
19 | |||||
Net Cash Used in Investing Activities |
(2,567) |
(6,491) | |||||
Cash Flows from Financing Activities: |
|||||||
Payments for Miscellaneous Borrowings |
(10) |
(8) | |||||
Proceeds from Revolver, Net of Payments |
15,000 |
— | |||||
Payments for Unitholder Distributions |
(12,144) |
— | |||||
Debt Issuance and Financing Fees |
— |
(2,401) | |||||
Net Change in Parent Advances |
— |
(18,543) | |||||
Net Cash Used In Financing Activities |
2,846 |
(20,952) | |||||
Net Increase in Cash |
2,564 |
1 | |||||
Cash at Beginning of Period |
6,531 |
3 | |||||
Cash at End of Period |
$ |
9,095 |
$ |
4 |
Logo - http://photos.prnewswire.com/prnh/20150811/257555LOGO
SOURCE CNX Coal Resources LP
PITTSBURGH, April 7, 2016 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX) announced today that James C. Grech, Executive Vice President and Chief Commercial Officer, has retired. As a result of CONSOL's recent sale of the Buchanan Mine and other remaining metallurgical coal assets, the company has continued with its corporate reorganization efforts to further align the administrative and commercial functions within its natural gas exploration and production (E&P) division and its thermal coal division.
As part of the corporate reorganization, CNX Coal Resources LP (NYSE: CNXC), who operates the Pennsylvania mining complex, will manage all human resources, land, marketing and external communications matters related to CONSOL's Pennsylvania Operations.
About CONSOL Energy
CONSOL Energy Inc. (NYSE: CNX) is a Pittsburgh-based energy producer, and one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on developing its substantial resource base. As of December 31, 2015, CONSOL Energy had 5.6 trillion cubic feet equivalent of proved natural gas reserves. CONSOL Energy is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.consolenergy.com.
Logo - http://photos.prnewswire.com/prnh/20120416/NE87957LOGO
SOURCE CONSOL Energy Inc.
PITTSBURGH, Feb. 5, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC), today announced the filing of its Annual Report on Form 10-K for the fiscal year ending December 31, 2015 with the Securities and Exchange Commission (SEC).
A copy of the Annual Report on Form 10-K, which contains the Partnership's audited financial statements, is available for download at www.cnxlp.com in the Investors section under SEC Filings and on the SEC website at www.sec.gov.
Unitholders can also request a printed copy of the Partnership's complete audited financial statements, free of charge, by contacting the Investor Relations department of CNX Coal Resources.
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership recently formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its initial assets include a 20% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts: |
|
Investor: |
Mitesh Thakkar, (724) 485-3133 |
Media: |
Brian Aiello, (724) 485-3078 |
SOURCE CNX Coal Resources LP
PITTSBURGH, Jan. 28, 2016 /PRNewswire/ -- CNX Coal Resources LP (NYSE: CNXC) today reported financial and operating results for the quarter ended December 31, 2015.
Fourth Quarter 2015 Results
Highlights of the CNXC fourth quarter 2015 results include:
Management Comments
"Overall, the fourth quarter was very challenging for CNXC, as an unusually warm start to winter and low natural gas prices reduced the demand for coal generation and resulted in significant inventory overbuild at coal plants. While we worked with our customers to manage the inventory levels, it impacted our fourth quarter shipments and plans for coal sales in the first quarter of 2016," said Jimmy Brock, Chief Executive Officer of CNX Coal Resources GP LLC (the "General Partner"). "Our operations team continues to manage through these challenging coal markets by making necessary adjustments at the mines to control costs and offset some of the pricing pressure.
"I am very pleased to report that during the fourth quarter of 2015, the company's Bailey mine was awarded the 2015 Keystone Mine Safety Award for the second consecutive year in the longwall mine category. Furthermore, for the year ended December 31, 2015, recordable accidents and severity of incidents were reduced by 33% and 75%, respectively compared to the year earlier period at the Pennsylvania mining complex."
1"Adjusted EBITDA" and "Distributable Cash Flow" are non-GAAP financial measures, which are reconciled to GAAP net income and net cash provided by operating activities, under the caption "Non-GAAP Financial Measures"
Sales & Marketing
During the fourth quarter of 2015, CNXC sold 1.0 million tons to 40 different customers, mostly through term contracts of varying length. Despite the currently depressed coal and gas market conditions, CNXC has been able to gain market share in both traditional and non-traditional markets, improving its 2016 contract position to the previously announced level of 4.8 million tons, or 100% of its sales based on the midpoint of guidance range. However, unprecedented warm December weather has increased the volatility in energy markets. This volatility could result in shipping delays and may affect average realizations based upon changes in customer mix and the timing of shipments. While CNXC has adjusted its guidance range to reflect these realities, it expects its customers to fulfill their contractual obligations. Furthermore, CNXC continues to seek additional sales to help offset delays. Finally, CNXC continues to target power plants that it expects to provide base load generation in the future energy markets with potential to grow their coal consumption. To that extent, CNXC has solid contractual sales positions for 2017 and 2018 of 61% and 49%, respectively.
Operational Adjustments
Consistent with our January 6, 2016 announcement, CNXC continues to expect coal sales of approximately 4.4-5.2 million tons in 2016 as it realigns its operational plan with the adjusted shipment schedule. Based on the current plan, CNXC expects shipments to remain soft through the first quarter of 2016 as its customers work through their inventory levels and gradually ramp up shipments through the year. Accordingly, CNXC temporarily idled one of its longwalls at the Pennsylvania mining complex to optimize the operating schedule and offset any increases in costs associated with the reduced shipments in the first quarter. The Pennsylvania mining complex is built for this type of optionality and affords much flexibility related to which longwalls it operates.
Quarterly Distribution
The Board of Directors of our General Partner declared a cash distribution of $0.5125 per unit for the fourth quarter of 2015. The distribution will be made on February 15, 2016 to unitholders of record on February 08, 2016. Since the initial public offering, CNXC generated distributable cash flow of $25.6 million and a distribution coverage of 1.05x.
Fourth Quarter Summary
For its 20% undivided interest in the Pennsylvania mining complex, CNXC sold 1.0 million tons of coal during the fourth quarter 2015. Total production declined to 0.9 million tons compared to 1.3 million tons produced in the same quarter of 2014 as CNXC aligned production with market conditions. As previously announced, the sales were impacted by weak winter burn and reduced coal generation weighing on the timing of shipments. Our total unit costs for coal sold in the quarter were $39.84 per ton, compared to $42.77 per ton in the year-earlier quarter. The improved cost performance was driven by reduced expenses related to the Pennsylvania streams subsidence, partially offset by lower production due to inconsistent shipment schedules.
Three Months Ended | ||||
December 31, 2015 |
December 31, 2014 | |||
Coal Production |
million tons |
0.9 |
1.3 | |
Coal Sales |
million tons |
1.0 |
1.3 | |
Average Realized Price |
Per ton |
$52.57 |
$60.10 | |
Average Cost of Coal Sold |
Per ton |
$39.84 |
$42.77 |
Guidance and Outlook
Based on the 2016 outlook for coal sales and maintenance capital expenditures provided on January 6, 2016, CNXC is providing the following guidance for 2016.
Fourth Quarter Earnings Conference Call
A conference call and webcast, during which management will discuss fourth quarter 2015 financial and operational results, is scheduled for January 28, 2015 at 5:00 PM 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 page of our website, www.cnxlp.com. An archive of the webcast will be available for 30 days after the event.
Participant dial in (toll free) 1-855-656-0928
Participant international dial in 1-412-902-4112
About CNX Coal Resources LP
CNX Coal Resources is a growth-oriented master limited partnership recently formed by CONSOL Energy Inc. (NYSE: CNX) to manage and further develop all of CONSOL's active thermal coal operations in Pennsylvania. Its initial assets include a 20% undivided interest in, and operational control over, CONSOL's Pennsylvania mining complex, which consists of three underground mines and related infrastructure. More information is available on our website www.cnxlp.com.
Contacts:
Investor:
Mitesh Thakkar, (724) 485-3133
miteshthakkar@cnxlp.com
Media:
Brian Aiello, (724) 485-3078
brianaiello@cnxlp.com
Non-GAAP Financial Measures
Adjusted EBITDA and distributable cash flow are not Generally Accepted Accounting Principles ("GAAP") measures. Adjusted EBITDA is defined as (i) net income (loss) before net interest expense, depreciation, depletion and amortization, as adjusted for (ii) material nonrecurring and other items which may not reflect the trend of our future results. Management believes that the presentation of adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and our presentation of adjusted EBITDA may vary from that presented by other companies. As a result, adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies. Distributable cash flow is defined as adjusted EBITDA less net cash interest paid and estimated maintenance capital expenditures. Management believes that the presentation of distributable cash flow in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and our presentation may vary from the presentations of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each period indicated. The table also presents a reconciliation of distributable cash flow to net income and operating cash flows, the most directly comparable GAAP financial measures, on a historical basis for each period indicated.
Three Months Ended December 31, 2015 | ||||
Net Income |
$ |
8,673 |
||
Interest Expense |
1,898 |
|||
Depreciation, Depletion and Amortization |
8,063 |
|||
Unit Based Compensation |
25 |
|||
Adjusted EBITDA |
$ |
18,659 |
||
Less: |
||||
Cash Interest |
1,583 |
|||
Estimated Maintenance Capital Expenditures |
7,319 |
|||
Distributable Cash Flow |
$ |
9,757 |
||
Net Cash Provided by Operating Activities |
$ |
16,562 |
||
Less: Interest Expense, Net |
1,898 |
|||
Less: Other, Including Working Capital |
199 |
|||
Adjusted EBITDA |
$ |
18,659 |
||
Less: |
||||
Cash Interest |
1,583 |
|||
Estimated Maintenance Capital Expenditures |
7,319 |
|||
Distributable Cash Flow |
$ |
9,757 |
Cautionary Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered forward-looking statements under federal securities laws including Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") 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 "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," 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. The forward-looking statements in this press release, if any, speak only as of the date of this press release; we disclaim any obligation to update these 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. These risks, contingencies and uncertainties relate to, among other matters, the following: generation of sufficient distributable cash flow to support the payment of minimum quarterly distributions; estimated adjusted EBITDA and distributable cash flow are subject to various inherent uncertainties; our acquiring additional undivided interests in the Pennsylvania mining complex or other assets from our sponsor may not occur; uncertainties exist in estimating our economically recoverable coal reserves; our ability to acquire additional coal reserves that are economically recoverable; deterioration in the global economic conditions in any of the industries in which our customers operate, a worldwide financial downturn or negative credit market conditions; decreases in demand for electricity and changes in coal consumption patterns of U.S. electric power generators; a substantial or extended decline in prices we receive for our coal due to volatility, oversupply, weather, availability of alternative fuels or other factors; increased competition within the coal industry, a loss of our competitive position or foreign currency fluctuations affecting the competitiveness of our coal abroad; the risks inherent in coal operations, including the occurrence of unexpected disruptions, geological conditions, environmental hazards, equipment failure, fires, explosions, accidents, security breaches or terroristic acts and weather conditions and we may not be insured or fully insured against such the losses from events; our mines being part of a single mining complex and located in a single geographic area; the delay or disruption of rail services transporting our coal or increased transportation costs for our coal; the occurrence of significant downtime of our major pieces of mining equipment including our preparation plant; our customers extending existing contracts or entering into new long-term contracts for coal; the loss of or significant reduction in purchases by our largest customers; provisions in our multi-year sales contracts may provide limited protection to us during adverse economic conditions, may result in economic penalties to us or permit customer termination of these contracts; our inability to collect payments from customers if their creditworthiness declines; our ability to raise on satisfactory terms the capital or financing needed for our portion of the substantial capital expenditures associated with our mines; our inability to obtain equipment, parts and raw materials in timely manner, in sufficient quantities or at reasonable costs in our coal mining and transportation operations; our inability to integrate future acquisitions and achieve anticipated benefits; restrictions in our revolving credit facility could adversely affect our business, financial condition, results of operation and ability to make quarterly cash distributions; future debt we incur may limit our flexibility to obtain financing and pursue other business opportunities; increases in interest rates; our ability to make distributions depends upon our cash flow; we may have to coordinate our mining operations with oil and natural gas drillers; we may incur additional costs and delays associated with perfecting title for our coal rights; we rely upon our general partner and employees of our sponsor for management; our mines are operated by a work force that is employed exclusively by our sponsor and our sponsors employees could unionize; we depend upon cash flow generated by our subsidiaries; terrorist attacks or cyber incidents could result in information theft, data corruption and/or financial loss; the impact of potential, as well as any adopted regulations, relating to greenhouse gas emissions on the market for coal, on our operating costs and on the value of our coal assets; electric power generators and other coal users switching to alternative fuels in order to comply with various environmental standards related to coal combustion emissions or due to various incentives to generate electricity from renewable energy sources; our costs could increase and our coal operations could be restricted by the effects of existing and future government environmental regulation; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal operations; our obtaining and renewing governmental permits and approvals for our coal operations; the effects of stringent federal and state employee health and safety regulations of our mines, including the ability of regulators to shut down a mine; the effects of our mine closing and reclamation obligations; any termination of our tax treatment as a partnership including as a result of a sale of 50% or more of our capital and profits interests during any 12 month period; our tax positions; the elimination of current U.S. federal income tax preferences available for coal exploration and development; and other factors discussed in the "Risk Factors" section of the prospectus included in our registration statement on Form S-1, in the form last filed with the SEC, as well as any periodic report on Form 10-Q that we file with the SEC.
CNX COAL RESOURCES LP | |||||||||||||||
Three Months Ended December 31, |
Years Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
Coal Revenue |
$ |
52,488 |
$ |
78,065 |
$ |
257,809 |
$ |
323,398 |
|||||||
Freight Revenue |
1,790 |
367 |
3,047 |
3,353 |
|||||||||||
Miscellaneous Other Income |
89 |
311 |
704 |
7,580 |
|||||||||||
Gain on Sale of Assets |
13 |
28 |
49 |
148 |
|||||||||||
Total Revenue and Other Income |
54,380 |
78,771 |
261,609 |
334,479 |
|||||||||||
Operating and Other Costs |
29,183 |
41,988 |
140,415 |
171,993 |
|||||||||||
Royalties and Production Taxes |
1,975 |
3,156 |
10,271 |
14,111 |
|||||||||||
Selling and Direct Administrative Expenses |
1,236 |
1,432 |
5,085 |
6,444 |
|||||||||||
Depreciation, Depletion and Amortization |
8,063 |
9,259 |
35,309 |
34,671 |
|||||||||||
Freight Expense |
1,790 |
367 |
3,047 |
3,353 |
|||||||||||
General and Administrative Expenses |
1,562 |
3,467 |
8,324 |
13,062 |
|||||||||||
Interest Expense |
1,898 |
2,237 |
8,495 |
6,946 |
|||||||||||
Total Costs |
45,707 |
61,906 |
210,946 |
250,580 |
|||||||||||
Net Income |
$ |
8,673 |
$ |
16,865 |
$ |
50,663 |
$ |
83,899 |
|||||||
Calculation of Limited Partner Interest in Net Income: |
|||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Coal Resources |
$ |
8,673 |
N/A |
$ |
23,356 |
N/A | |||||||||
Less: General Partner Interest in Net Income |
173 |
N/A |
468 |
N/A | |||||||||||
Limited Partner Interest in Net Income |
$ |
8,500 |
N/A |
$ |
22,888 |
N/A | |||||||||
Net Income per Limited Partner Unit - Basic |
$ |
0.37 |
N/A |
$ |
0.99 |
N/A | |||||||||
Net Income per Limited Partner Unit - Diluted |
$ |
0.37 |
N/A |
$ |
0.99 |
N/A | |||||||||
Limited Partner Units Outstanding - Basic |
23,222,134 |
N/A |
23,222,134 |
N/A | |||||||||||
Limited Partner Units Outstanding - Diluted |
23,222,948 |
N/A |
23,223,045 |
N/A |
CNX COAL RESOURCES LP | |||||||
December 31, |
December 31, | ||||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash |
$ |
6,531 |
$ |
3 |
|||
Trade Receivables |
15,518 |
— |
|||||
Other Receivables |
377 |
384 |
|||||
Inventories |
9,791 |
10,639 |
|||||
Prepaid Expenses |
4,080 |
3,922 |
|||||
Total Current Assets |
36,297 |
14,948 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
692,482 |
686,593 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
320,729 |
287,707 |
|||||
Total Property, Plant and Equipment—Net |
371,753 |
398,886 |
|||||
Other Assets: |
|||||||
Other |
14,079 |
4,977 |
|||||
Total Other Assets |
14,079 |
4,977 |
|||||
TOTAL ASSETS |
$ |
422,129 |
$ |
418,811 |
CNX COAL RESOURCES LP | |||||||
December 31, |
December 31, | ||||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
14,023 |
$ |
15,713 |
|||
Accounts Payable—Related Party |
3,452 |
— |
|||||
Current Portion of Long Term Notes—Related Party |
— |
17,931 |
|||||
Current Portion of Long Term Debt—Other |
49 |
330 |
|||||
Other Accrued Liabilities |
29,929 |
35,571 |
|||||
Total Current Liabilities |
47,453 |
69,545 |
|||||
Long-Term Debt: |
|||||||
Revolver, net of debt issuance and financing fees |
180,946 |
— |
|||||
Long-Term Notes Payable—Related Party |
— |
160,831 |
|||||
Advanced Royalty Commitments |
— |
278 |
|||||
Capital Lease Obligations |
100 |
51 |
|||||
Total Long-Term Debt |
181,046 |
161,160 |
|||||
Deferred Credits and Other Liabilities: |
|||||||
Postretirement Benefits Other Than Pensions |
— |
5,279 |
|||||
Pneumoconiosis Benefits |
1,547 |
1,250 |
|||||
Workers' Compensation |
2,343 |
2,381 |
|||||
Asset Retirement Obligations |
6,799 |
7,961 |
|||||
Other |
571 |
609 |
|||||
Total Deferred Credits and Other Liabilities |
11,260 |
17,480 |
|||||
TOTAL LIABILITIES |
239,759 |
248,185 |
|||||
Partners' Capital: |
|||||||
Common Units (11,611,067 Units Outstanding at December 31, 2015) |
154,309 |
— |
|||||
Subordinated Units (11,611,067 Units Outstanding at December 31, 2015) |
6,188 |
— |
|||||
General Partner Interest |
13,081 |
— |
|||||
Parent Net Investment |
— |
139,259 |
|||||
Accumulated Other Comprehensive Income |
8,792 |
31,367 |
|||||
Total Partners' Capital |
182,370 |
170,626 |
|||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL |
$ |
422,129 |
$ |
418,811 |
CNX COAL RESOURCES LP | |||||||||||||||
Three Months Ended December 31, |
Years Ended December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
Cash Flows from Operating Activities: |
|||||||||||||||
Net Income |
$ |
8,673 |
$ |
16,865 |
$ |
50,663 |
$ |
83,899 |
|||||||
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: |
|||||||||||||||
Depreciation, Depletion and Amortization |
8,063 |
9,259 |
35,309 |
34,671 |
|||||||||||
(Gain) Loss on Sale of Assets |
(13) |
(28) |
(49) |
(148) |
|||||||||||
Unit Based Compensation |
25 |
— |
40 |
— |
|||||||||||
Other Adjustments to Net Income |
234 |
— |
677 |
229 |
|||||||||||
Changes in Operating Assets: |
|||||||||||||||
Accounts and Notes Receivable |
7,668 |
(180) |
(15,511) |
(265) |
|||||||||||
Inventories |
2,865 |
884 |
848 |
293 |
|||||||||||
Prepaid Expenses |
948 |
(142) |
(158) |
(203) |
|||||||||||
Changes in Other Assets |
(2,685) |
(199) |
(2,597) |
(1,274) |
|||||||||||
Changes in Operating Liabilities: |
|||||||||||||||
Accounts Payable |
(117) |
2,884 |
(1,068) |
(1,820) |
|||||||||||
Accounts Payable—Related Party |
2,264 |
— |
3,452 |
— |
|||||||||||
Other Operating Liabilities |
(10,052) |
(1,980) |
(5,573) |
994 |
|||||||||||
Changes in Other Liabilities |
(1,311) |
(2,219) |
(5,238) |
(2,267) |
|||||||||||
Net Cash Provided by Operating Activities |
16,562 |
25,144 |
60,795 |
114,109 |
|||||||||||
Cash Flows from Investing Activities: |
|||||||||||||||
Capital Expenditures |
(6,669) |
(10,761) |
(27,257) |
(68,061) |
|||||||||||
Proceeds from Sales of Assets |
— |
33 |
56 |
15,237 |
|||||||||||
Net Cash Used in Investing Activities |
(6,669) |
(10,728) |
(27,201) |
(52,824) |
|||||||||||
Cash Flows from Financing Activities: |
|||||||||||||||
Proceeds from (Payments on) Miscellaneous Borrowings |
(13) |
(4,667) |
(40) |
(19) |
|||||||||||
Payments on Related Party Long-Term Notes |
— |
(1,849) |
(8,761) |
(1,849) |
|||||||||||
Proceeds from Related Party Long-Term Notes |
— |
11,371 |
13,592 |
11,371 |
|||||||||||
Proceeds from Revolver, Net of Payments |
5,000 |
— |
185,000 |
— |
|||||||||||
Proceeds from Issuance of Common Units, Net of Offering Costs |
— |
— |
148,359 |
— |
|||||||||||
Distribution of Proceeds |
— |
— |
(342,711) |
— |
|||||||||||
Payments on Unitholder Distributions |
(11,353) |
— |
(11,353) |
— |
|||||||||||
Debt Issuance and Financing Fees |
— |
— |
(4,329) |
— |
|||||||||||
Net Change in Parent Advances |
— |
(19,271) |
(6,823) |
(70,788) |
|||||||||||
Net Cash Used In Financing Activities |
(6,366) |
(14,416) |
(27,066) |
(61,285) |
|||||||||||
Net Increase in Cash |
3,527 |
— |
6,528 |
— |
|||||||||||
Cash at Beginning of Period |
3,004 |
3 |
3 |
3 |
|||||||||||
Cash at End of Period |
$ |
6,531 |
$ |
3 |
$ |
6,531 |
$ |
3 |
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SOURCE CNX Coal Resources LP
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