PITTSBURGH, Jan. 31, 2017 /PRNewswire/ -- CONSOL Energy Inc.
(NYSE: CNX) reported net cash provided by operating activities in
the just-ended quarter of $83
million, compared to $102
million in the year-earlier quarter, which includes
$4 million and $5 million of net cash used in discontinued
operating activities, respectively. For the year ended December 31, 2016, CONSOL Energy reported net
cash provided by operating activities of $469 million, compared to $506 million for year ended December 31, 2015, which includes $10 million and $6
million of net cash provided by discontinued operating
activities, respectively.
"During the quarter, CONSOL further executed upon strategic
goals with an additional ownership drop into CONE Midstream
Partners LP and the dissolution of the Marcellus Shale joint
venture," commented Nicholas J.
DeIuliis, president and CEO. "These successful transactions,
in part, helped generate approximately $349
million in free cash flow1 during the quarter,
while bringing the full year 2016 free cash flow to approximately
$957 million. During the quarter,
organic free cash flow from continuing operations, along with
proceeds from asset sales, helped to pay down our revolving credit
facility and increase our liquidity position by over $300 million to $1.73 billion. Our even stronger
liquidity position and balance sheet allow us to continue to focus
on opportunistically allocating capital to prudently develop our
tier one assets, while simultaneously providing us with the
flexibility and optionality to divest assets in order to pull value
forward."
On a GAAP basis, the fourth quarter earnings included the
following pre-tax items attributable to continuing operations:
- Recorded a $237 million
unrealized loss on commodity derivative instruments, related to
changes in the fair market value of existing hedges on a
mark-to-market basis;
- Recorded a $5 million loss
related to pension settlement, caused by lump sum distributions
from the plan, which increased due to the sale of the Buchanan Mine
in the first quarter of 2016; and
- Recorded $4 million in
transaction fees associated with the Marcellus Shale joint venture
dissolution.
During the quarter, CONSOL Energy also recorded a valuation
allowance of $167 million related to
alternative minimum tax (AMT) credits accumulated over time. The
company remains entitled to these positive tax attributes with no
expiration date and will release the valuation allowance when the
credits can be used.
Taking these items into account, the company reported a net loss
from continuing operations of $321
million for the quarter, or a loss of $1.42 per diluted share. Including the income
from discontinued operations, net of tax, of $20 million, less $4
million of net income attributable to noncontrolling
interest, the company reported a net loss attributable to CONSOL
Energy shareholders of $306 million
or a loss of $1.33 per diluted
share.
(Dollars in
thousands)
|
Q4
2016
|
Loss From
Continuing Operations Before Income Tax
|
$
|
(239,390)
|
|
Income
Taxes
|
81,808
|
|
Loss From
Continuing Operations
|
(321,198)
|
|
Income From
Discontinued Operations, net
|
19,564
|
|
Net
Loss
|
(301,634)
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
4,413
|
|
Net Loss
Attributable to CONSOL Energy Shareholders
|
$
|
(306,047)
|
|
Earnings before deducting net interest expense (interest expense
less interest income), income taxes and depreciation, depletion and
amortization (EBITDA), from continuing operations1 were
a negative $36 million for the 2016
fourth quarter, compared to a positive $360
million in the year-earlier quarter.
After adjusting for certain items, which are described in the
footnote to the EBITDA reconciliation table, the company had
adjusted income from continuing operations1 in the 2016
fourth quarter of $0.5 million, or
$0.00 per diluted share. Adjusted
EBITDA attributable to continuing operations1 was
$205 million for the 2016 fourth
quarter, compared to $198 million in
the year-earlier quarter.
Strategic Initiatives:
Further to CONSOL Energy's previously stated goal of separating
its coal and E&P businesses, CONSOL is pursuing several
different approaches for achieving that separation as early as
2017, including the possible sale of the coal business to a third
party or the spin-off of the coal business to CONSOL's
shareholders. David M. Khani, Chief
Financial Officer, commented: "We think there may be a market
opportunity to achieve a sale of the coal business on favorable
terms or, alternatively, to effect a spin-off as our leverage ratio
comes down to a level that allows each business to stand on its
own. At the same time, we will continue to evaluate dropdowns of
additional undivided interests in the Pennsylvania Mining
Complex."
1The terms "adjusted net loss from continuing
operations," "EBITDA from continuing operations," and "adjusted
EBITDA 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." The terms "free
cash flow," and "organic free cash flow from continuing operations"
are non-GAAP financial measures, which are defined and reconciled
to the GAAP Net Cash Provided by Operating Activities, also under
the caption "Non-GAAP Financial Measures."
E&P Division:
During the fourth quarter of 2016, CONSOL's E&P Division
produced 101.3 Bcfe, or an increase of 6% from the 95.5 Bcfe
produced in the year-earlier quarter. During the quarter, total
production costs decreased to $2.27
per Mcfe, compared to the year-earlier quarter of $2.37 per Mcfe, driven primarily by reductions to
transportation, gathering and compression and lease operating
expense as a result of the overall increase in production.
E&P Division capital expenditures decreased in the fourth
quarter to $30.1 million, compared to
$48.7 million spent in the third
quarter of 2016, primarily due to less completion activity.
Marcellus Shale production volumes, including liquids, in the
2016 fourth quarter were 56.5 Bcfe, approximately 14% higher than
the 49.7 Bcfe produced in the 2015 fourth quarter. Marcellus Shale
total production costs were $2.20 per
Mcfe in the just-ended quarter, which is a $0.18 per Mcfe improvement from the fourth
quarter of 2015 of $2.38 per Mcfe,
driven primarily by a reduction to transportation, gathering and
compression and lease operating expense.
CONSOL Energy's Utica Shale production volumes, including
liquids, in the 2016 fourth quarter were 22.2 Bcfe, up
approximately 7% from 20.7 Bcfe in the year-earlier quarter. Utica
Shale total production costs were $1.86 per Mcfe in the just-ended quarter, which
is a $0.02 per Mcfe improvement from
the fourth quarter of 2015 total production costs of $1.88 per Mcfe. The cost improvement across the
Utica Shale was driven, in part, by reductions to lease operating
expenses, partially offset by an increase to transportation,
gathering and compression expenses in the wet gas areas.
E&P Division Fourth Quarter Operations Summary:
During the quarter, CONSOL Energy operated two horizontal rigs,
drilling seven dry Utica Shale wells in Monroe County, Ohio, with an average lateral
length of 9,593 feet, while averaging 24 drilling days per well or
two days shorter than previous projections. Two Monroe County Utica
pads are now fully drilled and prepared for completion operations
in the first quarter of 2017. Also in the fourth quarter, CONSOL
completed three laterals, including one Marcellus, Burkett, and
Rhinestreet well each, on the eight-well ACAA1 pad in Allegheny County, Pennsylvania. The company
expects to complete the remaining five Marcellus Shale laterals on
the ACAA1 pad in the first quarter of 2017. In Greene County, Pennsylvania, seven Marcellus
Shale wells and one Burkett Shale
well were turned-in-line in the fourth quarter. Utilizing
managed pressure, five of the Marcellus laterals on the GH-58 pad,
which had an average lateral length of 7,400 feet, each averaged
12.5 MMcf per day for their first 60 days.
E&P DIVISION
RESULTS — Quarter-to-Quarter Comparison
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
December
31,
2016
|
|
December
31,
2015
|
|
September
30,
2016
|
|
Sales -
Gas
|
|
$
|
202.4
|
|
|
$
|
152.9
|
|
|
$
|
170.8
|
|
|
Sales -
Oil
|
|
0.7
|
|
|
0.6
|
|
|
0.7
|
|
|
Sales -
NGLs
|
|
31.4
|
|
|
23.2
|
|
|
27.0
|
|
|
Sales -
Condensate
|
|
3.6
|
|
|
8.9
|
|
|
7.5
|
|
|
Total Sales Revenue
($ MM)
|
|
$
|
238.1
|
|
|
$
|
185.6
|
|
|
$
|
206.0
|
|
|
Gain on Commodity
Derivative Instruments - Cash Settlement
|
|
42.0
|
|
|
79.5
|
|
|
38.6
|
|
|
Total
Revenue
|
|
$
|
280.1
|
|
|
$
|
265.1
|
|
|
$
|
244.6
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings
Before Income Tax ($ MM)
|
|
$
|
(222.5)
|
|
|
$
|
86.3
|
|
|
$
|
161.1
|
|
|
Adjusted Earnings
Before Income Tax ($MM)
|
|
$
|
14.3
|
1
|
|
$
|
24.0
|
2
|
|
$
|
1.6
|
3
|
|
Capital Expenditures
($ MM)
|
|
$
|
30.1
|
|
|
$
|
83.4
|
|
|
$
|
48.7
|
|
|
1Adjusted earnings before income tax for the E&P
Division of $14.3 million for the
three months ended December 31, 2016
is calculated as GAAP loss before income tax of $222.5 million plus total pre-tax adjustments of
$236.8 million. The $236.8 million adjustment is the pre-tax loss
related to the unrealized loss on commodity derivative
instruments.
2Adjusted earnings before income tax for the E&P
Division of $24.0 million for the
three months ended December 31, 2015
is calculated as GAAP earnings before income tax of $86.3 million less total pre-tax adjustments of
$62.3 million. The $62.3 million adjustment is the $62.4 million pre-tax gain related to the
unrealized gain on commodity derivative instruments and a pre-tax
loss of $0.1 million related to
severance expense.
3Adjusted earnings before income tax for the E&P
Division of $1.6 million for the three months ended
September 30, 2016 is calculated as
GAAP earnings before income tax of $161.1 million less
total pre-tax adjustments of $159.5 million. The $159.5
million adjustment is the $159.6 million pre-tax
gain related to the unrealized gain on commodity derivative
instruments and a pre-tax loss of $0.1 million related to
severance expense.
CONSOL's E&P division production in the quarter came from
the following categories:
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
December
31,
2016
|
|
December
31,
2015
|
|
% Increase/
(Decrease)
|
|
September
30,
2016
|
|
% Increase/
(Decrease)
|
GAS
|
|
|
|
|
|
|
|
|
|
|
Marcellus Sales
Volumes (Bcf)
|
|
51.5
|
|
|
43.7
|
|
|
17.8
|
%
|
|
43.0
|
|
|
19.8
|
%
|
Utica Sales Volumes
(Bcf)
|
|
17.2
|
|
|
14.8
|
|
|
16.2
|
%
|
|
17.7
|
|
|
(2.8)
|
%
|
CBM Sales Volumes
(Bcf)
|
|
17.4
|
|
|
18.7
|
|
|
(7.0)
|
%
|
|
17.0
|
|
|
2.4
|
%
|
Other Sales Volumes
(Bcf)1
|
|
5.2
|
|
|
6.3
|
|
|
(17.5)
|
%
|
|
5.0
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS2
|
|
|
|
|
|
|
|
|
|
|
NGLs Sales Volumes
(Bcfe)
|
|
9.2
|
|
|
9.8
|
|
|
(6.1)
|
%
|
|
12.4
|
|
|
(25.8)
|
%
|
Oil Sales Volumes
(Bcfe)
|
|
0.1
|
|
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
Condensate Sales
Volumes (Bcfe)
|
|
0.7
|
|
|
2.1
|
|
|
(66.7)
|
%
|
|
1.2
|
|
|
(41.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
101.3
|
|
|
95.5
|
|
|
6.1
|
%
|
|
96.4
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
Production (MMcfe)
|
|
1,100.7
|
|
|
1,037.8
|
|
|
|
|
1,047.7
|
|
|
|
1Other Sales Volumes: primarily related to shallow
oil and gas production and the Chattanooga shale in Tennessee.
2NGLs, 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, which is not
indicative of the relationship of oil, NGLs, condensate, and
natural gas prices.
E&P PRICE AND
COST DATA PER MCFE — Quarter-to-Quarter Comparison:
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
(Per Mcfe)
|
|
December
31,
2016
|
|
December
31,
2015
|
|
September
30,
2016
|
Average Sales Price -
Gas
|
|
$
|
2.22
|
|
|
$
|
1.83
|
|
|
$
|
2.06
|
|
Average Gain on
Commodity Derivative Instruments - Cash Settlement- Gas
|
|
$
|
0.46
|
|
|
$
|
0.95
|
|
|
$
|
0.47
|
|
Average Sales Price -
Oil*
|
|
$
|
6.93
|
|
|
$
|
6.51
|
|
|
$
|
7.01
|
|
Average Sales Price -
NGLs*
|
|
$
|
3.40
|
|
|
$
|
2.36
|
|
|
$
|
2.19
|
|
Average Sales Price -
Condensate*
|
|
$
|
5.14
|
|
|
$
|
4.23
|
|
|
$
|
6.21
|
|
|
|
|
|
|
|
|
Average Sales Price -
Total Company
|
|
$
|
2.77
|
|
|
$
|
2.78
|
|
|
$
|
2.54
|
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
|
$
|
0.22
|
|
|
$
|
0.27
|
|
|
$
|
0.23
|
|
Production, Ad
Valorem, and Other Fees
|
|
0.07
|
|
|
0.06
|
|
|
0.10
|
|
Transportation,
Gathering and Compression
|
|
0.93
|
|
|
0.99
|
|
|
0.98
|
|
Depreciation,
Depletion and Amortization
|
|
1.05
|
|
|
1.05
|
|
|
1.05
|
|
Total Production
Costs
|
|
$
|
2.27
|
|
|
$
|
2.37
|
|
|
$
|
2.36
|
|
|
|
|
|
|
|
|
Margin
|
|
$
|
0.50
|
|
|
$
|
0.41
|
|
|
$
|
0.18
|
|
*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 Production Costs" excludes Selling, General, and
Administration and Other Corporate Expenses.
The average sales price of $2.77
per Mcfe, when combined with unit costs of $2.27 per Mcfe, resulted in a margin of
$0.50 per Mcfe. This was an increase
when compared to the year-earlier quarter, with improvements
primarily in unit costs.
Marketing Update:
For the fourth quarter of 2016, CONSOL's average sales price for
natural gas, natural gas liquids (NGL), oil, and condensate was
$2.77 per Mcfe. CONSOL's average
price for natural gas was $2.22 per
Mcf for the quarter and, including cash settlements from hedging,
was $2.68 per Mcf. Excluding hedging,
the average realized price for all liquids for the fourth quarter
of 2016 was $21.34 per barrel, an
increase of 38% from the previous quarter.
During the fourth quarter, CONSOL's weighted average
differential from NYMEX was ($0.88)
per MMBtu. Despite a slightly wider differential, CONSOL's average
sales price for natural gas before hedging improved 8% to
$2.22 per Mcf, compared to the
average sales price of $2.06 per Mcf
in the third quarter 2016, primarily due to an improved Henry Hub
price, which more than offset the wider differential.
During the fourth quarter, CONSOL continued to recover and sell
discretionary ethane. Directly-marketed ethane volumes were 466,000
barrels in the fourth quarter of 2016, and, on an equivalent basis,
yielded a premium over the Texas Eastern M2 gas market where sales
would generally have occurred had the volumes been rejected into
the natural gas stream. Beginning in October
2016, an additional contract for ethane commenced with
volumes priced significantly above the value the ethane would
receive if rejected into the gas stream.
E&P Division Guidance:
CONSOL Energy re-affirms production and capital guidance
released during the company's Analyst and Investor Day on
December 13, 2016: the company
expects E&P Division production guidance for 2017 and 2018 to
be approximately 415 and 485 Bcfe, respectively, while E&P and
midstream capital expenditures for 2017 and 2018 remains
approximately $555 and $600 million, respectively.
Total hedged natural gas production in the 2017 first quarter is
73.3 Bcf. The annual gas hedge position is shown in the table
below:
E&P DIVISION
GUIDANCE
|
|
|
|
|
|
|
|
2017
|
|
2018
|
Volumes Hedged (Bcf),
as of 1/17/17
|
|
311.3*
|
|
220.6
|
|
*Includes actual settlements of 25.0 Bcf.
CONSOL Energy's hedged gas volumes include a combination of
NYMEX financial hedges and index (NYMEX and basis) hedges and
contracts. In addition, to protect the NYMEX hedge volumes from
basis exposure, CONSOL enters into basis-only financial hedges and
physical sales with fixed basis at certain sales points. CONSOL
Energy's gas hedge position is shown in the table below:
|
|
Q1
2017
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
NYMEX Only
Hedges
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
65.3
|
|
|
278.9
|
|
|
218.9
|
|
|
153.2
|
|
|
81.6
|
|
Average Prices
($/Mcf)
|
|
$
|
3.18
|
|
|
$
|
3.18
|
|
|
$
|
3.15
|
|
|
$
|
3.07
|
|
|
$
|
3.17
|
|
Index Hedges and
Contracts
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
8.0
|
|
|
32.4
|
|
|
1.7
|
|
|
8.5
|
|
|
3.4
|
|
Average Prices
($/Mcf)
|
|
$
|
3.19
|
|
|
$
|
3.19
|
|
|
$
|
2.42
|
|
|
$
|
2.52
|
|
|
$
|
2.35
|
|
Total Volumes
Hedged (Bcf)1
|
|
73.3
|
|
|
311.3
|
|
|
220.6
|
|
|
161.7
|
|
|
85.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX + Basis
(fully-covered volumes)2
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
73.3
|
|
|
287.1
|
|
|
182.4
|
|
|
108.6
|
|
|
57.0
|
|
Average Prices
($/Mcf)
|
|
$
|
2.63
|
|
|
$
|
2.57
|
|
|
$
|
2.67
|
|
|
$
|
2.60
|
|
|
$
|
2.79
|
|
NYMEX Only Hedges
Exposed to Basis
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
-
|
|
24.2
|
|
|
38.2
|
|
|
53.1
|
|
|
28.0
|
|
Average Prices
($/Mcf)
|
|
-
|
|
$
|
3.18
|
|
|
$
|
3.15
|
|
|
$
|
3.07
|
|
|
$
|
3.17
|
|
Total Volumes
Hedged (Bcf)1
|
|
73.3
|
|
|
311.3
|
|
|
220.6
|
|
|
161.7
|
|
|
85.0
|
|
1Q1 2017 excludes 4.4 Bcf of physical basis sales not
matched with NYMEX hedges.
2Includes physical sales with fixed basis in Q1 2017,
2017, 2018, 2019, and 2020 of 10.4 Bcf, 42.9 Bcf, 30.4 Bcf, 28.0
Bcf, and 9.8 Bcf, respectively.
During the fourth quarter of 2016, CONSOL Energy added
additional NYMEX natural gas hedges of 76.7 Bcf, 48.7 Bcf, 47.7
Bcf, 38.3 Bcf, and 3.4 Bcf for 2017, 2018, 2019, 2020, and 2021,
respectively. To help mitigate basis exposure on NYMEX hedges in
the fourth quarter, CONSOL added 66.2 Bcf, 33.3 Bcf, 32.2 Bcf, and
17.0 Bcf of basis hedges for 2017, 2018, 2019, and 2020,
respectively. Based on CONSOL's view of regional pricing during
2017, CONSOL focused primarily on regional hedging. Of the 66.2 Bcf
of basis hedges added for 2017, 52.8 Bcf is applicable to the Texas
Eastern M2 sales point.
CONSOL Energy has also entered into NGL (propane) hedges. CONSOL
currently has 5.3 million gallons of propane directly hedged
through March of 2017 at an average price of $0.48 per
gallon. CONSOL also has direct, term sales contracts with
counterparties for NGLs.
Pennsylvania (PA) Mining
Operations Division:
CONSOL Energy's PA Mining Operations sold 7.1 million tons in
the 2016 fourth quarter, compared to 5.0 million tons during the
year-earlier quarter. Total cost of coal sold was $33.90 per ton, compared to $39.70 per ton in the year-earlier quarter.
Fourth Quarter Operations Summary:
As reported by CNXC in its fourth quarter 2016 earnings press
release, dated January 30, 2017, "We
sold a record 7.1 million tons of coal during the quarter, of which
approximately 8.5% was in the high-vol metallurgical coal markets
in Asia and South America. More importantly, we also
improved the average realized price by 2% compared to the previous
quarter. During the quarter, we contracted 325 thousand additional
tons for 2017 across all of our markets, bringing our total sold
position to 98% of the estimated total sales volumes. In addition
to a strong 2017 sold position, we have a solid position of
approximately 66% sold for 2018. 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."
During the quarter, on a total consolidated basis, PA Mining
Operations Division generated $120
million of cash flow before capital expenditures.
PA MINING
OPERATIONS RESULTS - Quarter-To-Quarter Comparison
|
|
|
|
|
|
|
|
|
|
PA Mining
Ops
|
|
PA Mining
Ops
|
|
PA Mining
Ops
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
December
31,
|
|
December
31,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
Beginning Inventory
(millions of tons)
|
|
0.2
|
|
|
0.5
|
|
|
—
|
|
Coal Production
(millions of tons)
|
|
7.1
|
|
|
4.6
|
|
|
6.2
|
|
Ending Inventory
(millions of tons)
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
Sales - Company
Produced (millions of tons)
|
|
7.1
|
|
|
5.0
|
|
|
6.0
|
|
|
|
|
|
|
|
|
Sales Per
Ton
|
|
$
|
45.05
|
|
|
$
|
52.57
|
|
|
$
|
44.30
|
|
|
|
|
|
|
|
|
Total Production
Costs Per Ton
|
|
$
|
33.90
|
|
|
$
|
39.70
|
|
|
$
|
35.79
|
|
|
|
|
|
|
|
|
Average Margin Per
Ton Sold
|
|
$
|
11.15
|
|
|
$
|
12.87
|
|
|
$
|
8.51
|
|
Addback: DD&A Per
Ton
|
|
$
|
5.70
|
|
|
$
|
8.26
|
|
|
$
|
6.50
|
|
Average Margin Per
Ton, before DD&A
|
|
$
|
16.85
|
|
|
$
|
21.13
|
|
|
$
|
15.01
|
|
Cash Flow before Cap.
Ex ($ MM)
|
|
$
|
120
|
|
|
$
|
106
|
|
|
$
|
90
|
|
Note: The PA Mining Operations include Bailey, Enlow Fork,
and Harvey mines. Total Production Costs per Ton include: operating
and other 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 by PA Mining Operations. This cash generation will be
offset by maintenance of production (MOP) capital expenditures.
Table may not sum due to rounding.
CONSOL Energy expects total consolidated PA Mining Operations
annual sales to be approximately 26.0 million tons for both 2017
and 2018. Also, CONSOL Energy continues to expect total
consolidated capital expenditures for PA Mining Operations to be
$135 million and $140 million for 2017 and 2018, respectively.
2017 EBITDA
Guidance by Segment:
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
E&P
Division1
|
|
PA
Mining
Operations
Division
|
|
Other
|
|
Total
|
Earnings Before
Interest, Taxes and DD&A (EBITDA)
|
|
$
|
705
|
|
|
$
|
390
|
|
|
$
|
(15)
|
|
|
$
|
1,080
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Unrealized Loss/(Gain) on
Commodity
Derivative Instruments
|
|
(200)
|
|
|
-
|
|
-
|
|
(200)
|
|
Stock-Based
Compensation
|
|
20
|
|
|
10
|
|
|
-
|
|
30
|
|
Adjusted
EBITDA
|
|
$
|
525
|
|
|
$
|
400
|
|
|
$
|
(15)
|
|
|
910
|
|
Noncontrolling
Interest
|
|
-
|
|
$
|
(45)
|
|
|
-
|
|
(45)
|
|
Adjusted EBITDA
Attributable to CNX
|
|
$
|
525
|
|
|
$
|
355
|
|
|
$
|
(15)
|
|
|
$
|
865
|
|
Note: CONSOL Energy 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. EBITDA guidance assumes NYMEX as
of 1/3/2017 of $3.38 + weighted average basis of ($0.65) per MMBtu on open volumes.
1Includes forecasted Earnings of Equity Affiliates of
$36 million in 2017 associated with
CONSOL Energy's proportionate share of ownership in CONE Midstream
Partners. This income is reflected within Miscellaneous Other
Income in the CNX income statement.
Liquidity:
As of December 31, 2016, CONSOL
Energy had $1,725.0 million in total
liquidity, which is comprised of $50.7
million of cash, excluding the CNXC cash balance, and
$1,674.3 million available to be
borrowed under its $2.0 billion bank
facility. During the quarter, CONSOL's liquidity improved
$328.8 million due to cash received
with the additional ownership interest acquired by CONE Midstream
Partners LP and from the dissolution of the Marcellus joint
venture, as well as an increase in net cash provided by operating
activities. In addition, CONSOL holds 16.6 million CNXC limited
partnership units, including 3.9 million class A preferred units,
with an aggregated current market value of approximately
$297 million and 21.7 million CONE
Midstream Partners LP ("CNNX") limited partnership units with a
current market value of approximately $533
million, in each case as of January
20, 2017.
CONSOL's generation of significant free cash flow in 2016
allowed the company to repay all outstanding borrowings on its
revolving credit facility, while more than doubling the company's
liquidity, compared to the previous year. At December 31, 2015, revolving credit facility
borrowings totaled $952.0 million
with liquidity of $855.9 million.
The company's $2.0 billion bank
facility borrowing base was reaffirmed during the fourth
quarter.
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
|
|
|
December
31,
|
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2015
|
Dollars in
thousands
|
|
E&P
Division
|
|
PA Mining
Operations Division
|
|
Other1
|
|
Total
Company
|
|
Total
Company
|
Net (Loss)
Income
|
|
$
|
(222,454)
|
|
|
$
|
50,121
|
|
|
$
|
(129,301)
|
|
|
$
|
(301,634)
|
|
|
$
|
34,325
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: (Income) Loss
from Discontinued Operations, net
|
|
—
|
|
|
—
|
|
|
(19,564)
|
|
|
(19,564)
|
|
|
11,017
|
|
Add: Interest
Expense
|
|
646
|
|
|
2,502
|
|
|
43,719
|
|
|
46,867
|
|
|
49,081
|
|
Less: Interest
Income
|
|
—
|
|
|
—
|
|
|
(532)
|
|
|
(532)
|
|
|
(431)
|
|
Add: Tax Valuation
Allowance
|
|
—
|
|
|
—
|
|
|
166,798
|
|
|
166,798
|
|
|
65,395
|
|
Add: Income
Taxes
|
|
—
|
|
|
—
|
|
|
(84,990)
|
|
|
(84,990)
|
|
|
60,347
|
|
(Loss) Earnings
Before Interest & Taxes (EBIT)
|
|
(221,808)
|
|
|
52,623
|
|
|
(23,870)
|
|
|
(193,055)
|
|
|
219,734
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
|
105,730
|
|
|
42,861
|
|
|
7,992
|
|
|
156,583
|
|
|
139,988
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings
Before Interest, Taxes and DD&A (EBITDA) from Continuing
Operations
|
|
$
|
(116,078)
|
|
|
$
|
95,484
|
|
|
$
|
(15,878)
|
|
|
$
|
(36,472)
|
|
|
$
|
359,722
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Unrealized
Loss/(Gain) on Commodity Derivative Instruments
|
|
236,802
|
|
|
—
|
|
|
—
|
|
|
236,802
|
|
|
(62,388)
|
|
Severance
Expense
|
|
—
|
|
|
—
|
|
|
424
|
|
|
424
|
|
|
—
|
|
Pension
Settlement
|
|
—
|
|
|
—
|
|
|
4,848
|
|
|
4,848
|
|
|
15,921
|
|
Marcellus
Dissolution
|
|
—
|
|
|
—
|
|
|
3,752
|
|
|
3,752
|
|
|
—
|
|
Industrial Supplies
Working Capital Settlement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,258
|
|
OPEB Plan
Changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,879)
|
|
Gain on Sale of
Non-Core Assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,551)
|
|
Total Pre-tax
Adjustments
|
|
236,802
|
|
|
—
|
|
|
9,024
|
|
|
245,826
|
|
|
(157,639)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
120,724
|
|
|
$
|
95,484
|
|
|
$
|
(6,854)
|
|
|
$
|
209,354
|
|
|
$
|
202,083
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
|
—
|
|
|
4,413
|
|
|
—
|
|
|
4,413
|
|
|
3,920
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Attributable to Continuing Operations
|
|
$
|
120,724
|
|
|
$
|
91,071
|
|
|
$
|
(6,854)
|
|
|
$
|
204,941
|
|
|
$
|
198,163
|
|
Note: Income tax effect of Total Pre-tax Adjustments was
$90,956 and $36,257 for the three months ended December 31, 2016 and December 31, 2015, respectively. Adjusted net
income for the three months ended December
31, 2016 is calculated as GAAP net loss from continuing
operations of $321,198 plus total
pre-tax adjustments from the above table of $245,826, less the associated tax expense of
$90,956, plus a valuation allowance
charge of $166,798 for alternative
minimum tax credits equals the adjusted net income from continuing
operations of $470.
1CONSOL Energy's Other Division includes expenses
from various other corporate and diversified business unit
activities including legacy liabilities costs and income tax
expense that are not allocated to E&P or PA Mining Operations
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 Free
Cash Flow From Continuing Operations
|
Three Months
Ended
December 31, 2016
|
|
Year Ended
December 31, 2016
|
Net Cash Provided by
Continuing Operations
|
$
|
87,139
|
|
|
$
|
459,350
|
|
|
|
|
|
Capital
Expenditures
|
(47,431)
|
|
|
(226,820)
|
|
Net Investment in
Equity Affiliates
|
78,298
|
|
|
73,743
|
|
Organic Free Cash
Flow from Continuing Operations
|
$
|
118,006
|
|
|
$
|
306,273
|
|
Free Cash
Flow
|
Three Months
Ended
December 31, 2016
|
|
Year Ended
December 31, 2016
|
Net Cash Provided by
Operating Activities
|
$
|
82,647
|
|
|
$
|
469,285
|
|
|
|
|
|
Capital
Expenditures
|
(47,431)
|
|
|
(226,820)
|
|
Net Investment in
Equity Affiliates
|
78,298
|
|
|
73,743
|
|
Proceeds from Noble
Exchange
|
213,295
|
|
|
213,295
|
|
Proceeds from Sales
of Assets
|
20,925
|
|
|
59,902
|
|
Capital Expenditures
of Discontinued Operations
|
—
|
|
|
(8,295)
|
|
Payments on Sale of
Miller Creek/Fola
|
—
|
|
|
(28,271)
|
|
Proceeds From Sale of
Buchanan Mine
|
1,000
|
|
|
403,817
|
|
Free Cash
Flow
|
$
|
348,734
|
|
|
$
|
956,656
|
|
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 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; there is no assurance that the
potential dropdowns, spin-off or sale of the coal business will
occur, or if it does occur that we will be able to negotiate
favorable terms; 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 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.
This announcement does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities of CNX Coal
Resources LP.
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
(Dollars in
thousands, except per share data)
|
December
31,
|
|
December
31,
|
(Unaudited)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues and Other
Income:
|
|
|
|
|
|
|
|
Natural Gas, NGLs and
Oil Sales
|
$
|
238,146
|
|
|
$
|
185,291
|
|
|
$
|
793,248
|
|
|
$
|
726,921
|
|
(Loss) Gain on
Commodity Derivative Instruments
|
(194,893)
|
|
|
141,869
|
|
|
(141,021)
|
|
|
392,942
|
|
Coal Sales
|
321,171
|
|
|
262,440
|
|
|
1,065,582
|
|
|
1,289,036
|
|
Other Outside
Sales
|
11,351
|
|
|
6,371
|
|
|
32,038
|
|
|
30,967
|
|
Purchased Gas
Sales
|
14,623
|
|
|
6,801
|
|
|
43,256
|
|
|
14,450
|
|
Freight-Outside
Coal
|
12,519
|
|
|
10,295
|
|
|
46,468
|
|
|
20,499
|
|
Miscellaneous Other
Income
|
53,147
|
|
|
33,072
|
|
|
167,306
|
|
|
144,351
|
|
Gain on Sale of
Assets
|
5,957
|
|
|
19,844
|
|
|
19,498
|
|
|
74,173
|
|
Total Revenue and
Other Income
|
462,021
|
|
|
665,983
|
|
|
2,026,375
|
|
|
2,693,339
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Exploration and
Production Costs
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
22,438
|
|
|
25,619
|
|
|
96,434
|
|
|
121,847
|
|
Transportation,
Gathering and Compression
|
94,597
|
|
|
94,721
|
|
|
374,350
|
|
|
343,403
|
|
Production, Ad
Valorem, and Other Fees
|
7,317
|
|
|
5,833
|
|
|
31,049
|
|
|
30,438
|
|
Depreciation,
Depletion and Amortization
|
105,730
|
|
|
100,997
|
|
|
417,853
|
|
|
370,374
|
|
Exploration and
Production Related Other Costs
|
9,484
|
|
|
2,424
|
|
|
14,519
|
|
|
10,120
|
|
Purchased Gas
Costs
|
14,025
|
|
|
4,782
|
|
|
42,717
|
|
|
10,721
|
|
Other Corporate
Expenses
|
21,933
|
|
|
18,851
|
|
|
87,913
|
|
|
65,939
|
|
Impairment of
Exploration and Production Properties
|
—
|
|
|
—
|
|
|
—
|
|
|
828,905
|
|
Selling, General and
Administrative Costs
|
28,436
|
|
|
21,833
|
|
|
102,503
|
|
|
102,229
|
|
Total Exploration
and Production Costs
|
303,960
|
|
|
275,060
|
|
|
1,167,338
|
|
|
1,883,976
|
|
PA Mining
Operations Costs
|
|
|
|
|
|
|
|
Operating and Other
Costs
|
212,023
|
|
|
101,698
|
|
|
733,300
|
|
|
666,302
|
|
Depreciation,
Depletion and Amortization
|
42,861
|
|
|
40,328
|
|
|
168,195
|
|
|
176,864
|
|
Freight
Expense
|
12,519
|
|
|
10,295
|
|
|
46,468
|
|
|
20,499
|
|
Selling, General and
Administrative Costs
|
17,305
|
|
|
6,612
|
|
|
37,512
|
|
|
40,843
|
|
Total PA
Mining Operations Costs
|
284,708
|
|
|
158,933
|
|
|
985,475
|
|
|
904,508
|
|
Other
Costs
|
|
|
|
|
|
|
|
Miscellaneous
Operating Expense
|
55,340
|
|
|
8,190
|
|
|
182,869
|
|
|
78,743
|
|
Selling, General and
Administrative Costs
|
2,544
|
|
|
4,972
|
|
|
12,717
|
|
|
14,918
|
|
Depreciation,
Depletion and Amortization
|
7,992
|
|
|
(1,337)
|
|
|
12,455
|
|
|
19,882
|
|
Loss on Debt
Extinguishment
|
—
|
|
|
—
|
|
|
—
|
|
|
67,751
|
|
Interest
Expense
|
46,867
|
|
|
49,081
|
|
|
191,476
|
|
|
199,266
|
|
Total Other
Costs
|
112,743
|
|
|
60,906
|
|
|
399,517
|
|
|
380,560
|
|
Total Costs And
Expenses
|
701,411
|
|
|
494,899
|
|
|
2,552,330
|
|
|
3,169,044
|
|
(Loss) Earnings
from Continuing Operations Before Income Tax
|
(239,390)
|
|
|
171,084
|
|
|
(525,955)
|
|
|
(475,705)
|
|
Income Tax Expense
(Benefit)
|
81,808
|
|
|
125,742
|
|
|
10,010
|
|
|
(125,439)
|
|
(Loss) Income From
Continuing Operations
|
(321,198)
|
|
|
45,342
|
|
|
(535,965)
|
|
|
(350,266)
|
|
Income (Loss) From
Discontinued Operations, net
|
19,564
|
|
|
(11,017)
|
|
|
(303,183)
|
|
|
(14,209)
|
|
Net (Loss)
Income
|
(301,634)
|
|
|
34,325
|
|
|
(839,148)
|
|
|
(364,475)
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
4,413
|
|
|
3,920
|
|
|
8,954
|
|
|
10,410
|
|
Net (Loss) Income
Attributable to CONSOL Energy Shareholders
|
$
|
(306,047)
|
|
|
$
|
30,405
|
|
|
$
|
(848,102)
|
|
|
$
|
(374,885)
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(CONTINUED)
|
|
|
|
|
|
Three Months
Ended
|
|
For the Year
Ended
|
(Dollars in
thousands, except per share data)
|
December
31,
|
|
December
31,
|
(Unaudited)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
(Loss) Earnings
Per Share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
(Loss) Income from
Continuing Operations
|
$
|
(1.42)
|
|
|
$
|
0.18
|
|
|
$
|
(2.38)
|
|
|
$
|
(1.57)
|
|
Income (Loss) from
Discontinued Operations
|
0.09
|
|
|
(0.05)
|
|
|
(1.32)
|
|
|
(0.07)
|
|
Total Basic (Loss)
Earnings Per Share
|
$
|
(1.33)
|
|
|
$
|
0.13
|
|
|
$
|
(3.70)
|
|
|
$
|
(1.64)
|
|
Dilutive
|
|
|
|
|
|
|
|
(Loss) Income from
Continuing Operations
|
$
|
(1.42)
|
|
|
$
|
0.18
|
|
|
$
|
(2.38)
|
|
|
$
|
(1.57)
|
|
Income (Loss) from
Discontinued Operations
|
0.09
|
|
|
(0.05)
|
|
|
(1.32)
|
|
|
(0.07)
|
|
Total Dilutive
(Loss) Earnings Per Share
|
$
|
(1.33)
|
|
|
$
|
0.13
|
|
|
$
|
(3.70)
|
|
|
$
|
(1.64)
|
|
|
|
|
|
|
|
|
|
Dividends Paid Per
Share
|
$
|
—
|
|
|
$
|
0.010
|
|
|
$
|
0.010
|
|
|
$
|
0.145
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
Three Months
Ended
|
|
For the Year
Ended
|
(Dollars in
thousands)
|
December
31,
|
|
December
31,
|
(Unaudited)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net (Loss)
Income
|
$
|
(301,634)
|
|
|
$
|
34,325
|
|
|
$
|
(839,148)
|
|
|
$
|
(364,475)
|
|
Other Comprehensive
Loss:
|
|
|
|
|
|
|
|
Actuarially
Determined Long-Term Liability
Adjustments (Net of tax: $21,650, $28,317, $16,281,
$53,252)
|
(40,092)
|
|
|
(46,410)
|
|
|
(33,226)
|
|
|
(86,447)
|
|
Reclassification of
Cash Flow Hedges from Other Comprehensive Income to Earnings (Net
of tax: $5,727, $9,931, $25,011, $45,054)
|
(9,995)
|
|
|
(17,331)
|
|
|
(43,470)
|
|
|
(78,051)
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Loss
|
(50,087)
|
|
|
(63,741)
|
|
|
(76,696)
|
|
|
(164,498)
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss
|
(351,721)
|
|
|
(29,416)
|
|
|
(915,844)
|
|
|
(528,973)
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive
Income Attributable to Noncontrolling Interests
|
4,675
|
|
|
3,920
|
|
|
9,216
|
|
|
10,410
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss
Attributable to CONSOL Energy Inc. Shareholders
|
$
|
(356,396)
|
|
|
$
|
(33,336)
|
|
|
$
|
(925,060)
|
|
|
$
|
(539,383)
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands)
|
December 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
60,475
|
|
|
$
|
72,574
|
|
Accounts and Notes
Receivable:
|
|
|
|
Trade
|
220,222
|
|
|
151,383
|
|
Other
Receivables
|
69,901
|
|
|
121,735
|
|
Inventories
|
65,461
|
|
|
66,792
|
|
Recoverable Income
Taxes
|
116,851
|
|
|
13,887
|
|
Prepaid
Expenses
|
93,146
|
|
|
297,287
|
|
Current Assets of
Discontinued Operations
|
83
|
|
|
81,105
|
|
Total Current
Assets
|
626,139
|
|
|
804,763
|
|
Property, Plant and
Equipment:
|
|
|
|
Property, Plant and
Equipment
|
13,771,388
|
|
|
13,794,907
|
|
Less—Accumulated
Depreciation, Depletion and Amortization
|
5,630,949
|
|
|
5,062,201
|
|
Property, Plant and
Equipment of Discontinued Operations, net
|
—
|
|
|
936,671
|
|
Total Property,
Plant and Equipment—Net
|
8,140,439
|
|
|
9,669,377
|
|
Other
Assets:
|
|
|
|
Deferred Income
Taxes
|
4,290
|
|
|
—
|
|
Investment in
Affiliates
|
190,964
|
|
|
237,330
|
|
Other
|
222,149
|
|
|
214,388
|
|
Other Assets of
Discontinued Operations
|
—
|
|
|
4,044
|
|
Total Other
Assets
|
417,403
|
|
|
455,762
|
|
TOTAL
ASSETS
|
$
|
9,183,981
|
|
|
$
|
10,929,902
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands, except per share data)
|
December 31,
2016
|
|
December 31,
2015
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$
|
241,616
|
|
|
$
|
250,609
|
|
Short-Term Notes
Payable
|
—
|
|
|
952,000
|
|
Current Portion of
Long-Term Debt
|
12,000
|
|
|
9,409
|
|
Other Accrued
Liabilities
|
680,348
|
|
|
421,827
|
|
Current Liabilities
of Discontinued Operations
|
6,050
|
|
|
51,514
|
|
Total Current
Liabilities
|
940,014
|
|
|
1,685,359
|
|
Long-Term
Debt:
|
|
|
|
Long-Term
Debt
|
2,722,995
|
|
|
2,703,899
|
|
Capital Lease
Obligations
|
39,074
|
|
|
34,884
|
|
Long-Term Debt of
Discontinued Operations
|
—
|
|
|
5,001
|
|
Total Long-Term
Debt
|
2,762,069
|
|
|
2,743,784
|
|
Deferred Credits and
Other Liabilities:
|
|
|
|
Deferred Income
Taxes
|
—
|
|
|
74,629
|
|
Postretirement
Benefits Other Than Pensions
|
659,474
|
|
|
630,892
|
|
Pneumoconiosis
Benefits
|
108,073
|
|
|
111,903
|
|
Mine
Closing
|
218,631
|
|
|
227,339
|
|
Gas Well
Closing
|
223,352
|
|
|
163,842
|
|
Workers'
Compensation
|
67,277
|
|
|
69,812
|
|
Salary
Retirement
|
112,543
|
|
|
91,596
|
|
Reclamation
|
—
|
|
|
25
|
|
Other
|
151,660
|
|
|
166,957
|
|
Deferred Credits and
Other Liabilities of Discontinued Operations
|
—
|
|
|
107,988
|
|
Total Deferred
Credits and Other Liabilities
|
1,541,010
|
|
|
1,644,983
|
|
TOTAL
LIABILITIES
|
5,243,093
|
|
|
6,074,126
|
|
Stockholders'
Equity:
|
|
|
|
Common Stock, $0.01
Par Value; 500,000,000 Shares Authorized, 229,443,008 Issued
and Outstanding at December 31, 2016; 229,054,236 Issued and
Outstanding at December 31, 2015
|
2,298
|
|
|
2,294
|
|
Capital in Excess of
Par Value
|
2,460,864
|
|
|
2,435,497
|
|
Preferred Stock,
15,000,000 Shares Authorized, None Issued and
Outstanding
|
—
|
|
|
—
|
|
Retained
Earnings
|
1,727,789
|
|
|
2,579,834
|
|
Accumulated Other
Comprehensive Loss
|
(392,556)
|
|
|
(315,598)
|
|
Common Stock in
Treasury, at Cost—No Shares at December 31, 2016 and
2015
|
—
|
|
|
—
|
|
Total CONSOL
Energy Inc. Stockholders' Equity
|
3,798,395
|
|
|
4,702,027
|
|
Noncontrolling
Interest
|
142,493
|
|
|
153,749
|
|
TOTAL
EQUITY
|
3,940,888
|
|
|
4,855,776
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
9,183,981
|
|
|
$
|
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)
|
|
Common
Stock in
Treasury
|
|
Total
CONSOL
Energy Inc.
Stockholders'
Equity
|
|
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
|
—
|
|
|
—
|
|
|
(848,102)
|
|
|
—
|
|
|
—
|
|
|
(848,102)
|
|
|
8,954
|
|
|
(839,148)
|
|
Gas Cash Flow Hedge
(Net of $25,011 Tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,470)
|
|
|
—
|
|
|
(43,470)
|
|
|
—
|
|
|
(43,470)
|
|
Actuarially
Determined Long-Term Liability Adjustments (Net of $16,281
Tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,488)
|
|
|
—
|
|
|
(33,488)
|
|
|
262
|
|
|
(33,226)
|
|
Comprehensive (Loss)
Income
|
—
|
|
|
—
|
|
|
(848,102)
|
|
|
(76,958)
|
|
|
—
|
|
|
(925,060)
|
|
|
9,216
|
|
|
(915,844)
|
|
Issuance of Common
Stock
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
Treasury Stock
Activity
|
—
|
|
|
—
|
|
|
(1,649)
|
|
|
—
|
|
|
—
|
|
|
(1,649)
|
|
|
—
|
|
|
(1,649)
|
|
Tax Cost From
Stock-Based Compensation
|
—
|
|
|
(4,931)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,931)
|
|
|
—
|
|
|
(4,931)
|
|
Amortization of
Stock-Based Compensation Awards
|
—
|
|
|
30,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,298
|
|
|
1,185
|
|
|
31,483
|
|
Distributions to
Noncontrolling Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,657)
|
|
|
(21,657)
|
|
Dividends ($0.01 per
share)
|
—
|
|
|
—
|
|
|
(2,294)
|
|
|
—
|
|
|
—
|
|
|
(2,294)
|
|
|
—
|
|
|
(2,294)
|
|
December 31,
2016
|
$
|
2,298
|
|
|
$
|
2,460,864
|
|
|
$
|
1,727,789
|
|
|
$
|
(392,556)
|
|
|
$
|
—
|
|
|
$
|
3,798,395
|
|
|
$
|
142,493
|
|
|
$
|
3,940,888
|
|
CONSOL ENERGY INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
(Dollars in
Thousands)
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net (Loss)
Income
|
|
$
|
(301,634)
|
|
|
$
|
34,325
|
|
|
$
|
(839,148)
|
|
|
$
|
(364,475)
|
|
Adjustments to
Reconcile Net (Loss) Income to Cash Provided By
Continuing Operating Activities:
|
|
|
|
|
|
|
|
|
Net
(Income) Loss from Discontinued Operations
|
|
(19,564)
|
|
|
11,017
|
|
|
303,183
|
|
|
14,209
|
|
Depreciation,
Depletion and Amortization
|
|
156,583
|
|
|
139,988
|
|
|
598,503
|
|
|
567,120
|
|
Impairment of
Exploration and Production Properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
828,905
|
|
Non-Cash Other
Post-Employment Benefits
|
|
—
|
|
|
(109,879)
|
|
|
—
|
|
|
(261,750)
|
|
Stock-Based
Compensation
|
|
7,658
|
|
|
4,664
|
|
|
31,483
|
|
|
24,513
|
|
Gain on Sale of
Assets
|
|
(5,957)
|
|
|
(19,844)
|
|
|
(19,498)
|
|
|
(74,173)
|
|
Loss on Debt
Extinguishment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67,751
|
|
Loss (Gain) on
Commodity Derivative Instruments
|
|
194,893
|
|
|
(141,869)
|
|
|
141,021
|
|
|
(392,942)
|
|
Net Cash Received in
Settlement of Commodity Derivative Instruments
|
|
41,909
|
|
|
79,480
|
|
|
245,212
|
|
|
196,348
|
|
Deferred Income
Taxes
|
|
193,171
|
|
|
133,025
|
|
|
120,305
|
|
|
(140,472)
|
|
Return on Equity
Investment
|
|
—
|
|
|
4,355
|
|
|
22,268
|
|
|
35,466
|
|
Equity in Earnings of
Affiliates
|
|
(11,839)
|
|
|
(16,059)
|
|
|
(53,078)
|
|
|
(54,897)
|
|
Changes in Operating
Assets:
|
|
|
|
|
|
|
|
|
Accounts and Notes
Receivable
|
|
(52,569)
|
|
|
41,306
|
|
|
(48,014)
|
|
|
160,370
|
|
Inventories
|
|
(2,839)
|
|
|
15,495
|
|
|
1,330
|
|
|
5,573
|
|
Prepaid
Expenses
|
|
12,603
|
|
|
24,939
|
|
|
84,026
|
|
|
128,405
|
|
Changes in Other
Assets
|
|
(84,331)
|
|
|
(19,172)
|
|
|
(98,572)
|
|
|
3,311
|
|
Changes in Operating
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
(14,717)
|
|
|
(22,704)
|
|
|
(27,371)
|
|
|
(145,875)
|
|
Accrued
Interest
|
|
(37,025)
|
|
|
(37,230)
|
|
|
(1,040)
|
|
|
26,649
|
|
Other Operating
Liabilities
|
|
1,014
|
|
|
(41,418)
|
|
|
(20,356)
|
|
|
(147,110)
|
|
Changes in Other
Liabilities
|
|
(7,104)
|
|
|
2,444
|
|
|
(9,724)
|
|
|
(9,916)
|
|
Other
|
|
16,887
|
|
|
23,299
|
|
|
28,820
|
|
|
32,667
|
|
Net Cash Provided by
Continuing Operating Activities
|
|
87,139
|
|
|
106,162
|
|
|
459,350
|
|
|
499,677
|
|
Net Cash (Used In)
Provided by Discontinued Operating Activities
|
|
(4,492)
|
|
|
(4,596)
|
|
|
9,935
|
|
|
6,172
|
|
Net Cash Provided by
Operating Activities
|
|
82,647
|
|
|
101,566
|
|
|
469,285
|
|
|
505,849
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
(47,431)
|
|
|
(118,672)
|
|
|
(226,820)
|
|
|
(982,934)
|
|
Proceeds from Sales
of Assets
|
|
20,925
|
|
|
27,527
|
|
|
59,902
|
|
|
110,571
|
|
Proceeds from Noble
Exchange Settlement
|
|
213,295
|
|
|
—
|
|
|
213,295
|
|
—
|
|
—
|
|
Net Investment in
Equity Affiliates
|
|
78,298
|
|
|
(13,997)
|
|
|
73,743
|
|
|
(84,221)
|
|
Net Cash Provided by
(Used in) Continuing Investing Activities
|
|
265,087
|
|
|
(105,142)
|
|
|
120,120
|
|
|
(956,584)
|
|
Net Cash Provided by
(Used in) Discontinued Investing Activities
|
|
1,000
|
|
|
(8,739)
|
|
|
367,251
|
|
|
(39,633)
|
|
Net Cash Provided by
(Used in) Investing Activities
|
|
266,087
|
|
|
(113,881)
|
|
|
487,371
|
|
|
(996,217)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
(Payments on)
Proceeds from Short-Term Borrowings
|
|
(354,000)
|
|
|
7,000
|
|
|
(952,000)
|
|
|
952,000
|
|
Payments on
Miscellaneous Borrowings
|
|
(2,090)
|
|
|
(2,759)
|
|
|
(8,312)
|
|
|
(4,282)
|
|
Payments on Long-Term
Notes, including Redemption Premium
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,263,719)
|
|
Proceeds from
Issuance of Long-Term Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
492,760
|
|
Net (Payments on)
Proceeds from Revolver - MLP
|
|
(7,000)
|
|
|
5,000
|
|
|
16,000
|
|
|
185,000
|
|
Distributions to
Noncontrolling Interest
|
|
(5,416)
|
|
|
(5,060)
|
|
|
(21,657)
|
|
|
(5,060)
|
|
Proceeds from Sale of
MLP Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,359
|
|
Tax Benefit from
Stock-Based Compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
208
|
|
Dividends
Paid
|
|
—
|
|
|
(2,290)
|
|
|
(2,294)
|
|
|
(33,281)
|
|
Proceeds from
Issuance of Common Stock
|
|
—
|
|
|
—
|
|
|
4
|
|
|
8,288
|
|
Purchases of Treasury
Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,674)
|
|
Debt Issuance and
Financing Fees
|
|
—
|
|
|
—
|
|
|
(482)
|
|
|
(22,586)
|
|
Net Cash (Used in)
Provided by Continuing Financing Activities
|
|
(368,506)
|
|
|
1,891
|
|
|
(968,741)
|
|
|
386,013
|
|
Net Cash Used in
Discontinued Financing Activities
|
|
—
|
|
|
(17)
|
|
|
(14)
|
|
|
(56)
|
|
Net Cash (Used in)
Provided by Financing Activities
|
|
(368,506)
|
|
|
1,874
|
|
|
(968,755)
|
|
|
385,957
|
|
Net Decrease in Cash
and Cash Equivalents
|
|
(19,772)
|
|
|
(10,441)
|
|
|
(12,099)
|
|
|
(104,411)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
80,247
|
|
|
83,015
|
|
|
72,574
|
|
|
176,985
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
60,475
|
|
|
$
|
72,574
|
|
|
$
|
60,475
|
|
|
$
|
72,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Logo -
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visit:http://www.prnewswire.com/news-releases/consol-energy-reports-fourth-quarter-results-record-quarterly-production-of-1013-bcfe-total-production-costs-fall-to-227-per-mcfe-total-liquidity-improves-to-173-billion-300398864.html
SOURCE CONSOL Energy Inc.