CONSOL Energy Reports Net Income of $167 Million, or $0.73 Per Diluted Share;
CONSOL Energy Reports Sales Revenue of $1.4 billion; CONSOL Energy Increases Regular Quarterly Dividend by 25%;10-Well Hutchinson Pad Producing at 56 MMcf Per Day
PITTSBURGH, Oct. 27, 2011 /PRNewswire/ -- CONSOL Energy Inc.
, the leading diversified fuel producer in the Eastern United States, reported GAAP net income for the quarter ended September 30, 2011 of $167 million, or $0.73 per diluted share, compared to $75 million, or $0.33 per diluted share from the year-earlier quarter. This was the highest GAAP net income in any third quarter in the company's history, except for 2005, when the company recorded a $327 million gain from the sale of CNX Gas stock.By the end of the quarter, with the cash proceeds from the closing of the Noble Energy and Antero transactions in September, the company had no borrowings on its revolving credit facilities or its accounts receivable securitization. CONSOL Energy's Board of Directors decided to increase the regular annual dividend by 25%, or $0.10 per share, to $0.50 per share, effective immediately. The Board declared the regular quarterly dividend of $0.125 per share, payable on November 25, to shareholders of record on November 11, 2011.
Total company revenue of $1.4 billion was the highest ever achieved for the third quarter. Most of the increase came from much higher average realized prices from the company's low-vol coal sales, where realized prices were $209 per short ton, FOB mine. This equates to an FOB Terminal price of approximately $284 per metric tonne. The company also received higher prices for sales of high-vol and thermal coal. Coal margins, across all of the company's sales, expanded to $20.38 per ton, which was an increase of $6.55 per ton from the year-earlier quarter. Expanding coal margins drove an increase in adjusted EBITDA(1) and Cash Flow from Operations. Adjusted EBITDA in the quarter ended September 30, 2011 was $441 million. Cash flow from operations was $457 million while capital expenditures were $412 million.
'We met our expectations on coal production,' commented J. Brett Harvey, chairman and chief executive officer, 'and our sales team raised its outlook on exports to a range of 10.0 - 10.5 million tons in 2011. In gas, we had a success in the Marcellus Shale at the 10-well Hutchinson pad in Westmoreland County, Pa which is now flowing at a combined rate of 56 MMcf per day into sales.'
'Strategically,' continued Mr. Harvey, 'we accomplished our goal of monetizing a significant portion of our shale resources with two outstanding partners: Noble Energy and Hess Corporation. These transactions, along with the sale of an overriding royalty interest to Antero, are expected to bring to CONSOL Energy aggregate proceeds, plus the carry, of over $4 billion. We are focusing on working with our partners to maximize the value of these transactions for our shareholders.'
The Marcellus Shale joint venture with Noble Energy closed on September 30, and therefore was included in third quarter results. The Utica Shale joint venture with Hess Corporation closed on October 21, and will be reported in fourth quarter results.
In the quarter ended September 30, 2011, GAAP net income of $167 million was affected by four discrete items:
-- a $15 million improvement from prior-year federal tax settlements.
-- a $6 million (after-tax) improvement due to a gain from the sale of
certain rights-of-way.
-- an $11 million (after-tax) impairment, due to the Noble Energy and
Antero transactions and their associated fees.
-- a $9 million (after-tax) impairment from charges associated with
bondholder consent fees.
For the second consecutive quarter, CONSOL's coal division has generated more cash from its met business than from its thermal business. This demonstrates our significant presence in the growing metallurgical markets.
Despite 13% higher gas volumes, the company experienced reduced profitability within the Gas Division when compared with the quarter ended September 30, 2010. Unit gas margins fell, primarily due to an $0.80 decrease in realized gas prices. Unit gas costs declined, due in large part to higher proved reserves, which lowered unit DD&A. CONSOL expects overall unit costs to continue to decline over time as the company increases its emphasis on low cost Marcellus Shale drilling, where the company has been drilling longer laterals on multi-well pads.
(1) The term 'adjusted EBITDA' is a non-GAAP financial measures, which is defined and reconciled to the GAAP net income below, under the caption 'Non-GAAP Financial Measures.'
Coal Division Results:
COAL DIVISION RESULTS BY PRODUCT CATEGORY - Quarter-To-Quarter
Comparison
Low-Vol Low-Vol High-Vol High-Vol Thermal Thermal
Quarter Quarter Quarter Quarter Quarter Quarter
Ended Ended Ended Ended Ended Ended
September September September September September September
30, 30, 30, 30, 30, 30,
2011 2010 2011 2010 2011 2010
---- ---- ---- ---- ---- ----
Sales -
Company
Produced
(millions of
tons) 1.5 1.3 1.0 0.4 12.4 13.9
Coal
Production
(millions of
tons) 1.4 1.3 1.0 0.4 12.3 13.0
Average
Realized
Price Per
Ton -
Company
Produced $208.51 $165.61 $83.76 $71.16 $59.97 $53.55
Operating
Costs Per
Ton $53.41 $47.81 $45.37 $32.60 $38.64 $37.24
Non-
Operating
Charges Per
Ton $12.56 $8.95 $9.56 $4.24 $7.96 $6.57
DD&A Per Ton $6.73 $4.67 $7.15 $4.46 $6.19 $5.33
Total Cost
Per Ton -
Company
Produced $72.70 $61.43 $62.08 $41.30 $52.79 $49.14
Average
Margin Per
Ton, before
DD&A $142.54 $108.85 $28.83 $34.32 $13.37 $9.74
Cash Flow
before Cap.
Ex and DD&A $214 $142 $29 $14 $166 $135
Ending
Inventory
(MM tons) 0.1 0.1 N/A N/A 1.6 2.1
Sales and production include CONSOL Energy's portion from equity
affiliates. Operating costs include items such as labor, supplies,
power, preparation costs, project expenses, subsidence costs, gas
well plugging costs, charges for employee benefits (including
Combined Fund premiums), royalties, and production and property
taxes. Non-operating charges include items such as charges for
long-term liabilities, direct administration, selling and general
administration. Sales times Average Margin Per Ton, before DD&A is
meant to approximate the amount of cash generated for the low-vol,
high-vol, and thermal coal categories. This cash generation will be
offset by maintenance of production (MOP) capital expenditures. N/A
means not applicable; there is no inventory in the High-Vol segment.
Total costs per ton, across all of CONSOL Energy's coal production in the quarter ended September 30, 2011 were $55.33, up $5.30, or 11%, from $50.03 in the quarter ended September 30, 2010. Of this increase, $0.59 was directly related to the company receiving higher realizations. Other costs directly related to operations were up $1.87 per ton, as the company continued to invest in projects that improve the safety and efficiency of its mines. DD&A was higher by $1.04 per ton to reflect depreciating an expanded coal capital base. Costs in the quarter were impacted by a roof fall at McElroy Mine, and higher-than-expected production costs in Central Appalachia.
Coal production in the quarter consisted of 1.4 million tons of low-vol, 1.0 million tons of high-vol, and 12.3 million tons of thermal, for a total of 14.7 million tons.
Of the thermal coal production, 11.1 million tons were from Northern Appalachia and 1.2 million tons were from Central Appalachia.
During the third quarter, thermal coal inventory was unchanged at 1.6 million tons, when compared to the quarter ended June 30, 2011.
Coal Marketing Update:
Low-Vol: High demand continues for CONSOL's Buchanan low-vol coal and supply remains constrained by global weather and labor issues. In 2012, excluding legacy contracts for 221,000 tons, CONSOL has already sold 0.9 million tons of Buchanan coal priced at $213 per short ton, FOB mine.
High-Vol: High-vol continues to benefit from increased market penetration into Asia as well as sales into new markets for testing purposes. As a result of a prior test, CONSOL has signed a new sales order with a U.S. customer for 700,000 tons in 2012, at prices within expectations. Two additional tests with European steel makers continues. Demand for CONSOL's high-vol coal will continue to be dependent on our ability to increase market penetration. CONSOL has 3.7 million tons unpriced for 2012.
U.S. Thermal: CONSOL's thermal coal continues to be sold out for 2011. During the third quarter CONSOL priced 17 million tons of thermal coal for 2012 at an average price of $64.10, which raised our average realized price for 2012 to $62.37 per ton. CONSOL is already approximately 84% percent sold out of this category for 2012. If tightening regulations are deferred allowing older coal fired plants to continue running, generators may be in need of additional coal supplies. Current customer inventories in our sales area are very low.
European Thermal: Export Thermal Demand continues to grow with an additional 250,000 tons sold in the quarter for 2012 deliveries to European utility customers at prices higher than domestic thermal sales and nearly equal to our high-vol sales. We expect total export thermal sales for 2011 to be 2.3 million tons.
Gas Division Results:
The Gas Division has drilled 58 Marcellus Shale wells and expects to drill a total of 80-85 wells during the year.
As an update to the operations release of October 14, the 10-well Hutchinson pad targeting the Marcellus Shale in Westmoreland County, Pa. is producing at a combined rate of 56 MMcf per day.
The table below summarizes the key metrics for the Gas Division:
GAS DIVISION RESULTS - Quarter-to-Quarter
Comparison
Quarter Quarter
Ended Ended
September
September 30, 30,
2011 2010
---- ----
Total Revenue and
Other Income ($ MM) $203.6 $227.8
Net Income $2.9 $21.3
Net Cash from
Operating Activities
($ MM) $130.9 $94.3
Total Period
Production (Bcf) 40.4 35.8
Average Daily
Production (MMcf) 439.6 388.6
Capital Expenditures
($ MM) $215.8 $103.7
Production results are net of royalties.
Coalbed Methane (CBM): Total production was 23.3 Bcf, an increase of 1.3% from the 23.0 Bcf produced in the year-earlier quarter.
Marcellus Shale: Total production was 8.7 Bcf, an increase of 163.6% from the 3.3 Bcf produced in the year-earlier quarter. The increase is attributable to increased drilling and longer laterals.
Conventional: Total production was 7.8 Bcf, a decrease of 14.3% from the 9.1 Bcf produced in the year-earlier quarter. The company has been shifting rigs and capital toward higher potential return Marcellus and Utica drilling prospects.
PRICE AND COST DATA PER MCF - Quarter-to-Quarter
Comparison
Quarter Quarter
Ended Ended
September 30, September 30,
2011 2010
--- ---
Average Sales
Price $4.92 $5.72
Costs -
Production
Lifting $0.80 $0.66
Production Taxes $0.11 $0.12
DD&A $1.21 $1.43
Total Production
Costs $2.12 $2.21
Costs -
Gathering
Operating Costs $0.63 $0.72
Transportation $0.26 $0.22
DD&A $0.22 $0.22
Total Gathering
Costs $1.11 $1.16
Costs -
Administration $0.70 $0.71
Total Costs $3.93 $4.08
Margin $0.99 $1.64
===== =====
Note: Costs - Administration excludes incentive
compensation and other corporate expenses.
CONSOL Energy 2011 Production Guidance
CONSOL Energy expects its net gas production to be between 150 - 152 Bcf for the year. Fourth quarter gas production, net to CONSOL, is expected to be approximately 36 - 38 Bcf.
Total hedged gas production in the 2011 fourth quarter is 23.9 Bcf, at an average price of $5.18 per Mcf. The annual gas hedge position for three years is shown in the table below:
GAS DIVISION GUIDANCE
2011 2012 2013
---- ---- ----
Total Yearly
Production (Bcf) 150-152 N/A N/A
Volumes Hedged
(Bcf),as of 10/17/11 84.0 76.9 43.7
Average Hedge Price
($/Mcf) $5.21 $5.25 $5.20
COAL DIVISION GUIDANCE
4Q 2011 2011 2012 2013
------- ---- ---- ----
Estimated
Coal
Sales
(millions
of
tons) 14.7-15.3 62.0-62.6 59.5-61.5 60.5-62.5
Est.
Low-
Vol
Met
Sales 1.0-1.2 5.3-5.5 4.5-5.0 4.5-5.0
Tonnage:
Firm 0.7 5.0 1.1 0.2
Tonnage:
Open 0.3 - 0.5 0.3 - 0.5 3.4-3.9 4.3-4.8
Avg.
Price:
Sold
(Firm) $199.72 $192.92 $185.48 $91.74
Price:
Estimated
(For
open
tonnage) $210-$220 $210-$220 $180-$190 N/A
Est.
High-
Vol
Met
Sales 1.5 5.1 5.0 5.0
Tonnage:
Firm 1.2 4.8 1.2 0.2
Tonnage:
Open 0.3 0.3 3.8 4.8
Avg.
Price:
Sold
(Firm) $75.01 $79.40 $81.96 $90.20
Price:
Estimated
(For
open
tonnage) $74-$80 $74-$80 $70-$75 N/A
Est.
Thermal approx. approx. approx. approx.
Sales 12.4 52 50.5 51
Tonnage:
Firm 12.4 52.0 41.9 21.3
Tonnage:
Open 0 0 N/A N/A
Avg.
Price:
Sold
(Firm) $58.47 $58.77 $62.37 $61.87
Price:
Estimated
(For
open
tonnage) N/A N/A N/A N/A
Note: N/A means not available or not
forecast. In the thermal sales category,
the open tonnage includes 4.7 million
collared tons in 2013, with a ceiling of
$59.78 per ton and a floor of $51.63 per
ton. Total estimated coal sales for 2012
and 2013 include 0.4 and 0.6 million tons,
respectively, from Amonate. The Amonate
tons are not included in the category
breakdowns. None of the Amonate tons has
yet been sold.
Liquidity
Total company liquidity as of September 30, 2011 was $2.8 billion. This liquidity does not include the proceeds from the Hess Corporation transaction that closed on October 21, 2011.
As of September 30, 2011, CONSOL Energy had $1.5 billion in total liquidity, which is comprised of $63.8 million of cash, $200 million available under the accounts receivable securitization facility, and $1,234.8 million available to be borrowed under its $1.5 billion bank facility. CONSOL Energy also has outstanding letters of credit of $265.2 million.
As of September 30, 2011, CNX Gas Corporation had $1,338.5 million in total liquidity, which is comprised of $408.7 million of cash and $929.8 million available to be borrowed under its $1.0 billion bank facility. CNX Gas' credit facility has no borrowings thereunder, and outstanding letters of credit of $70.2 million.
CONSOL Energy Inc., the leading diversified fuel producer in the Eastern U.S., is a member of the Standard & Poor's 500 Equity Index and the Fortune 500. It has 12 bituminous coal mining complexes in four states and reports proven and probable coal reserves of 4.4 billion tons. It is also a leading Eastern U.S. gas producer, with proved reserves of 3.7 trillion cubic feet. Additional information about CONSOL Energy can be found at its web site: www.consolenergy.com.
Non-GAAP Financial Measure
Definition: Adjusted EBIT is defined as Adjusted Earnings (including cumulative effect of adjustments to net income) 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. Although Adjusted EBIT and EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that it is useful to an investor in evaluating CONSOL Energy because it is widely used to evaluate a company's operating performance before debt expense and its cash or as a substitute for measures of performance in accordance with generally accepted accounting principles. In addition, because all companies do not calculate Adjusted EBIT or EBITDA identically, the presentation here may not be comparable to similarly titled measures of other companies.
Reconciliation of Adjusted EBIT, EBITDA and adjusted earnings to financial net income attributable to CONSOL Energy Shareholders is as follows:
Three Months Ended
September 30,
-------------
2011 2010
---- ----
Net Income Attributable to CONSOL
Energy Shareholders $167,329 $75,383
Add Adjustments:
Noble Transaction 58,042 -
Antero Transaction (41,208) -
Bond Amendment Fees 14,907 -
Pipeline Right-of-Ways Issuance (10,000) -
Transaction and Financing Fees - 337
Pre-tax Fola Reclamation (non-cash) - 27,671
Legal Accruals/Settlements - 13,602
Total Pre-tax Adjustments 21,741 41,610
Add: Interest Expense 58,884 66,430
Less: Interest Income (180) (431)
Add: Asset Abandonment - Mine 84 338 -
Add: Income Taxes 33,093 15,757
Adjusted Earnings Before Interest &
Taxes (Adjusted EBIT) 281,205 198,749
Add: Depreciation, Depletion &
Amortization 159,750 161,429
Add: Mine 84 Development Abandonment - (13,602)
Adjusted Earnings Before Interest,
Taxes and DD&A (Adjusted EBITDA) $440,955 $346,576
======== ========
Forward-Looking Statements
Various statements in this release, including those that express a belief, expectation or intention, may be considered 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,' '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: deterioration in economic conditions in any of the industries in which our customers operate, or sustained uncertainty in financial markets cause conditions we cannot predict; an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows; our customers extending existing contracts or entering into new long-term contracts for coal; our reliance on major customers; our inability to collect payments from customers if their creditworthiness declines; the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our coal and gas to market; a loss of our competitive position because of the competitive nature of the coal and gas 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 regulations relating to greenhouse gas emissions on the demand for coal and natural gas, as well as the impact of any adopted regulations on our coal mining operations due to the venting of coalbed methane which occurs during mining; foreign currency fluctuations could adversely affect the competitiveness of our coal abroad; the risks inherent in coal and gas operations 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; our focus on new gas development projects and exploration for gas in areas where we have little or no proven gas reserves; decreases in the availability of, or increases in, the price of commodities and services used in our mining and gas operations, as well as our exposure under 'take or pay' contracts we entered into with well service providers to obtain services of which if not used could impact our cost of production; obtaining and renewing governmental permits and approvals for our coal and gas 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 coal and gas operations; the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down a mine or well; the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal and gas operations; the effects of mine closing, reclamation, gas well closing and certain other liabilities; uncertainties in estimating our economically recoverable coal and gas reserves; costs associated with perfecting title for coal or gas rights on some of our properties; the outcomes of various legal proceedings, which are more fully described in our reports filed under the Securities Exchange Act of 1934; the impacts of various asbestos litigation claims; increased exposure to employee related long-term liabilities; increased exposure to multi-employer pension plan liabilities; minimum funding requirements by the Pension Protection Act of 2006 (the Pension Act) coupled with the significant investment and plan asset losses suffered during the recent economic decline has exposed us to making additional required cash contributions to fund the pension benefit plans which we sponsor and the multi-employer pension benefit plans in which we participate; 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; acquisitions and joint ventures that we recently have completed or entered into or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made and divestitures we anticipate may not occur or produce anticipated proceeds including joint venture partners paying anticipated carry obligations; the anti-takeover effects of our rights plan could prevent a change of control; increased exposure on our financial performance due to the degree we are leveraged; replacing our natural gas reserves, which if not replaced, will cause our gas reserves and gas production to decline; our ability to acquire water supplies needed for 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; our hedging activities may prevent us from benefiting from price increases and may expose us to other risks; and other factors discussed in the 2010 Form 10-K under 'Risk Factors,' as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CONSOL ENERGY INC. AND SUBSIDIARIES
SPECIAL INCOME STATEMENT
(Unaudited)
(Dollars in millions)
Three Months Ended September 30, 2011
-------------------------------------
Produced Other Total Total
Coal Coal Coal Gas Other Company
---- ---- ---- --- ----- -------
Sales $1,122 $14 $1,136 $200 $88 $1,424
Gas
Royalty
Interest - - - 17 - 17
Freight
Revenue 60 - 60 - - 60
Other
Income 5 24 29 (14) 6 21
Total
Revenue
and
Other
Income 1,187 38 1,225 203 94 1,522
Cost of
Goods
Sold 630 48 678 91 111 880
Transaction
and
Financing
Fees - - - - 15 15
Gas
Royalty
Interests'
Costs - - - 16 - 16
Freight
Expense 60 - 60 - - 60
Selling,
General
& Admin. 29 18 47 28 (29) 46
DD&A 91 6 97 58 5 160
Abandonment
of Long-
Lived
Assets - - - - - -
Interest
Expense - - - 2 57 59
Taxes
Other
Than
Income 68 7 75 8 3 86
Total
Costs 878 79 957 203 162 1,322
Earnings
Before
Income
Taxes $309 $(41) $268 $ - $(68) $200
--- ---- --- --- --- ---- ---
Income
Tax $33
---
Net
Income $167
====
CONSOL ENERGY INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
(Dollars in thousands, except
per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2011 2010 2011 2010
---- ---- ---- ----
Sales-Outside $1,421,689 $1,260,499 $4,293,167 $3,650,129
Sales-Gas
Royalty
Interests 17,083 18,131 52,191 46,621
Sales-Purchased
Gas 1,155 3,524 3,297 8,280
Freight-Outside 59,871 37,269 156,311 96,544
Other
Income 21,931 29,870 70,068 77,126
------ ------ ------ ------
Total
Revenue
and
Other
Income 1,521,729 1,349,293 4,575,034 3,878,700
Cost
of
Goods
Sold
and
Other
Operating
Charges
(exclusive
of
depreciation,
depletion
and
amortization
shown
below) 879,268 850,819 2,620,376 2,436,452
Transaction
and
Financing
Fees 14,907 337 14,907 64,415
Loss
on
Debt
Extinguishment - - 16,090 -
Gas
Royalty
Interests
Costs 15,409 16,408 46,582 40,133
Purchased
Gas
Costs 398 3,333 2,850 6,980
Freight
Expense 59,871 37,269 156,122 96,544
Selling,
General
and
Administrative
Expenses 46,692 38,722 130,311 107,897
Depreciation,
Depletion
and
Amortization 159,750 161,429 466,612 413,379
Abandonment
of
Long-
Lived
Assets 338 - 115,817 -
Interest
Expense 58,884 66,430 189,963 139,613
Taxes
Other
Than
Income 85,790 83,406 265,121 243,831
------ ------ ------- -------
Total
Costs 1,321,307 1,258,153 4,024,751 3,549,244
--------- --------- --------- ---------
Earnings
Before
Income
Taxes 200,422 91,140 550,283 329,456
Income
Taxes 33,093 15,757 113,421 75,291
------ ------ ------- ------
Net
Income 167,329 75,383 436,862 254,165
Less:
Net
Income
Attributable
to
Noncontrolling
Interest - - - (11,845)
--- --- --- -------
Net
Income
Attributable
to
CONSOL
Energy
Inc.
Shareholders $167,329 $75,383 $436,862 $242,320
======== ======= ======== ========
Earnings
Per
Share:
Basic $0.74 $0.33 $1.93 $1.15
===== ===== ===== =====
Dilutive $0.73 $0.33 $1.91 $1.13
===== ===== ===== =====
Weighted
Average
Number
of
Common
Shares
Outstanding:
Basic 226,744.011 225,781.539 226,582.226 211,235.893
=========== =========== =========== ===========
Dilutive 229,163.537 228,092.299 229,002.863 213,638.176
=========== =========== =========== ===========
Dividends
Paid
Per
Share $0.10 $0.10 $0.30 $0.30
===== ===== ===== =====
CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September December
30, 31,
2011 2010
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $472,523 $32,794
Accounts and Notes
Receivable:
Trade 503,076 252,530
Other Receivables 331,614 21,589
Accounts
Receivable-Securitized - 200,000
Inventories 241,691 258,538
Deferred Income Taxes 157,247 174,171
Recoverable Income Taxes 11,504 32,528
Prepaid Expenses 184,263 142,856
------- -------
Total Current Assets 1,901,918 1,115,006
Property, Plant and
Equipment:
Property, Plant and Equipment 13,837,263 14,951,358
Less-Accumulated
Depreciation, Depletion and
Amortization 4,766,163 4,822,107
--------- ---------
Total Property, Plant and
Equipment-Net 9,071,100 10,129,251
Other Assets:
Deferred Income Taxes 458,858 484,846
Restricted Cash 20,291 20,291
Investment in Affiliates 175,818 93,509
Other 535,063 227,707
------- -------
Total Other Assets 1,190,030 826,353
--------- -------
TOTAL ASSETS $12,163,048 $12,070,610
=========== ===========
CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
September December
30, 31,
2011 2010
---- ----
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable $448,667 $354,011
Short-Term Notes Payable - 284,000
Current Portion of Long-Term
Debt 20,306 24,783
Borrowings Under
Securitization Facility - 200,000
Other Accrued Liabilities 833,939 801,991
------- -------
Total Current Liabilities 1,302,912 1,664,785
Long-Term Debt:
Long-Term Debt 3,123,434 3,128,736
Capital Lease Obligations 55,298 57,402
------ ------
Total Long-Term Debt 3,178,732 3,186,138
Deferred Credits and Other
Liabilities:
Postretirement Benefits Other
Than Pensions 3,094,164 3,077,390
Pneumoconiosis Benefits 177,162 173,616
Mine Closing 401,049 393,754
Gas Well Closing 118,525 130,978
Workers' Compensation 149,827 148,314
Salary Retirement 114,543 161,173
Reclamation 39,513 53,839
Other 159,878 144,610
------- -------
Total Deferred Credits and
Other Liabilities 4,254,661 4,283,674
--------- ---------
TOTAL LIABILITIES 8,736,305 9,134,597
Stockholders' Equity:
Common Stock, $.01 Par Value;
500,000,000 Shares
Authorized, 227,289,426
Issued and 226,781,351
Outstanding at September 30,
2011; 227,289,426 Issued and
226,162,133 Outstanding at
December 31, 2010 2,273 2,273
Capital in Excess of Par Value 2,219,783 2,178,604
Preferred Stock, 15,000,000
authorized, None issued and
outstanding - -
Retained Earnings 2,025,794 1,680,597
Accumulated Other
Comprehensive Loss (800,896) (874,338)
Common Stock in Treasury, at
Cost-508,075 Shares at
September 30, 2011 and
1,127,293 Shares at December
31, 2010 (20,211) (42,659)
------- -------
Total CONSOL Energy Inc.
Stockholders' Equity 3,426,743 2,944,477
Noncontrolling Interest - (8,464)
--- ------
TOTAL EQUITY 3,426,743 2,936,013
--------- ---------
TOTAL LIABILITIES AND EQUITY $12,163,048 $12,070,610
=========== ===========
CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands, except per share data)
Capital
Common in Retained Accumulated Common Total Non- Total
------ -------- -------- ----------- ------ ----- ---- -----
Stock
Stock Excess Earnings Other in CONSOL Controlling Equity
----- ------ -------- ----- ------ ------ ----------- ------
Energy
of Par (Deficit) Comprehensive Treasury Inc. Interest
------ --------- ------------- -------- ------- --------
Value Income Stockholders'
----- ------ -------------
(Loss) Equity
------ ------
Balance at
December 31,
2010 $2,273 $2,178,604 $1,680,597 $(874,338) $(42,659) $2,944,477 $(8,464) $2,936,013
====== ========== ========== ========= ======== ========== ======= ==========
(Unaudited)
Net Income - - 436,862 - - 436,862 - 436,862
Treasury Rate
Lock (Net of
$59 Tax) - - - (96) - (96) - (96)
Gas Cash Flow
Hedge (Net of
$22,767 Tax) - - - 35,702 - 35,702 - 35,702
Actuarially
Determined
Long-Term
Liability
Adjustments
(Net of
$23,547 Tax) - - - 37,836 - 37,836 - 37,836
--- --- --- ------ --- ------ --- ------
Comprehensive
Income - - 436,862 73,442 - 510,304 - 510,304
Issuance of
Treasury Stock - - (23,693) - 22,448 (1,245) - (1,245)
Tax Benefit
From Stock-
Based
Compensation - 4,096 - - - 4,096 - 4,096
Amortization of
Stock-Based
Compensation
Awards - 37,083 - - - 37,083 - 37,083
Net Change in
Noncontrolling
Interest - - - - - - 8,464 8,464
Dividends
($0.30 per
share) - - (67,972) - - (67,972) - (67,972)
--- --- ------- --- --- ------- --- -------
Balance at
September 30,
2011 $2,273 $2,219,783 $2,025,794 $(800,896) $(20,211) $3,426,743 $ - $3,426,743
====== ========== ========== ========= ======== ========== === === ==========
CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
(Dollars in thousands)
Three Months
Ended Nine Months Ended
September 30, September 30,
------------- -------------
2011 2010 2011 2010
---- ---- ---- ----
Operating
Activities:
Net
Income 167,329 75,383 $436,862 $254,165
Adjustments
to
Reconcile
Net
Income
to
Net
Cash
Provided
By
Operating
Activities:
Depreciation,
Depletion
and
Amortization 159,750 161,429 466,612 413,379
Abandonment
of
Long-
Lived
Assets 338 - 115,817 -
Stock-
Based
Compensation 11,508 13,531 37,083 33,580
Loss
(Gain)
on
Sale
of
Assets 15,132 (7,609) 9,993 (8,475)
Loss
on
Debt
Extinguishment - - 16,090 -
Amortization
of
Mineral
Leases 571 (91) 4,149 3,890
Deferred
Income
Taxes (7,472) (4,368) 120 3,372
Equity
in
Earnings
of
Affiliates (8,677) (6,903) (19,989) (15,595)
Changes
in
Operating
Assets:
Accounts
and
Notes
Receivable 885 10,137 (50,212) (66,840)
Inventories 17,972 31,519 16,264 45,126
Prepaid
Expenses (24,290) (30,928) (611) (26,216)
Changes
in
Other
Assets 1,139 4,289 16,446 23,764
Changes
in
Operating
Liabilities:
Accounts
Payable 77,136 37,759 98,320 63,168
Other
Operating
Liabilities 43,198 44,728 66,589 109,371
Changes
in
Other
Liabilities (175) 32,059 29,432 14,051
Other 2,577 12,153 9,439 32,190
----- ------
Net
Cash
Provided
by
Operating
Activities 456,921 373,088 1,252,404 878,930
------- ------- --------- -------
Investing
Activities:
Capital
Expenditures (412,022) (244,283) (997,463) (821,908)
Acquisition
of
Dominion
Exploration
and
Production
Business - 1,466 - (3,474,199)
Purchase
of
CNX
Gas
Noncontrolling
Interest - - - (991,034)
Proceeds
from
Sales
of
Assets 687,811 22,457 695,291 24,944
Distributions
from
Equity
Affiliates 66,990 1,766 70,860 6,867
------ -----
Net
Cash
Provided
by
(Used
in)
Investing
Activities 342,779 (218,594) (231,312) (5,255,330)
------- -------- -------- ----------
Financing
Activities:
Payments
on
Short-
Term
Borrowings (260,750) (144,650) (284,000) (258,950)
Payments
on
Miscellaneous
Borrowings (2,215) (2,974) (9,320) (8,564)
(Payments
on)
Proceeds
from
Securitization
Facility (70,000) - (200,000) 150,000
Payments
on
Long-
Term
Notes,
including
Redemption
Premium - - (265,785) -
Proceeds
from
Issuance
of
Long-
Term
Notes - - 250,000 2,750,000
Tax
Benefit
from
Stock-
Based
Compensation 853 212 5,034 9,926
Dividends
Paid (22,679) (22,582) (67,972) (63,276)
Proceeds
from
Issuance
of
Common
Stock - - - 1,828,862
Issuance
of
Treasury
Stock 1,207 426 6,219 2,601
Debt
Issuance
and
Financing
Fees (112) (3,657) (15,539) (84,224)
------- -------
Net
Cash
(Used
in)
Provided
by
Financing
Activities (353,696) (173,225) (581,363) 4,326,375
Net
Increase
(Decrease)
in
Cash
and
Cash
Equivalents 446,004 (18,731) 439,729 (50,025)
Cash
and
Cash
Equivalents
at
Beginning
of
Period 26,519 34,313 32,794 65,607
------ ------ ------
Cash
and
Cash
Equivalents
at
End
of
Period $472,523 $15,582 $472,523 $15,582
======== ======= ======== =======
CONSOL Energy Inc.
CONTACT: Investor: Brandon Elliott, +1-724-485-4526 or Dan Zajdel,
+1-724-485-4169; Media: Lynn Seay, +1-724-485-4065
Web site: http://www.consolenergy.com/
