PITTSBURGH, Jan. 29 /PRNewswire-FirstCall/ -- CONSOL Energy Inc.
(NYSE: CNX), a high-Btu bituminous coal and natural gas company,
had net income of $176 million for the three months ended December
31, 2008 versus $7 million in the same period a year ago. CONSOL
Energy reported several records for fiscal year 2008, including net
income of $442.5 million (excluding the 2005 gas sale), operating
cash flows of $1.0 billion and EBITDA of $1.1 billion. CNX Gas
(NYSE:CXG) also set several records of its own during the year,
including production of 76.6 billion cubic feet and net income of
$239.1 million. For 2009, the company has more than 95 percent of
its planned coal production priced at an average realized price of
$61.56 per ton, more than 26 percent higher than 2008 realized
pricing. CNX Gas has nearly 50 percent of its planned 2009 gas
production hedged at an average price of $9.74 per thousand cubic
feet. FINANCIAL RESULTS - Period-To-Period Comparison Twelve Twelve
Quarter Quarter Months Months Ended Ended Ended Ended Dec. 31, Dec.
31, Dec. 31, Dec. 31, 2008 2007 2008 2007 Total Revenue and Other
Income $1,242.7 $918.6 $4,652.4 $3,762.2 Net Income $176.3 $6.8
$442.5 $267.8 Earnings Per Share - diluted $0.97 $0.04 $2.40 $1.45
Net Cash from Operating Activities $346.2 $88.0 $1,029.5 $684.0
EBITDA $360.1 $116.3 $1,075.2 $746.7 EBIT $255.3 $26.4 $685.6
$422.0 Capital Expenditures $321.7 $217.5 $1,061.7 $1,039.8 Cash
(Provided by) Used in Other Investing Activities* $55.4 ($16.5)
$37.2 ($67.7) In millions of dollars except per share. Amounts for
capital expenditures do not include amounts for equity affiliates.
*Represents net cash used in investment in Equity Affiliates,
Proceeds from Sales of Assets and purchases of CNX Gas stock. "This
was a very strong quarter for us financially and operationally,"
said J. Brett Harvey, president and chief executive officer. "Total
revenues were more than $1.2 billion, earnings were $0.97 per
diluted share and cash flows from operations were nearly $350
million. Both our coal and gas segments reported improved pricing
and production, and they did an excellent job managing costs."
Harvey noted that for the year ended December 31, 2008, CONSOL
Energy reported the highest amount of total sales revenue and cash
from operations in the history of the company. Period-To-Period
Analysis of Financial Results for the Quarter Total Revenue and
Other Income increased 35.3 percent, due to higher average realized
pricing and higher sales volumes for coal and gas for the quarter
just ended and lower sales in last year's fourth quarter of high
value, metallurgical grade coal. Net Cash from Operating Activities
was $346.2 million for the quarter just ended, compared with $88.0
million for the December 2007 quarter, an increase of 293.4
percent. The improvement in Net Cash from Operating Activities
reflects higher net income attributable to higher realized pricing
for the coal and gas segment, higher coal and gas sales volumes,
and timing of working capital. Total costs increased 6.4 percent,
mainly due to higher cost of goods sold, and higher depreciation,
depletion and amortization, as described below. Cost of Goods Sold
and Other Operating Charges (including Purchased Gas Costs and Gas
Royalty Interest Costs) increased 19.9 percent, primarily
reflecting higher unit costs for coal and gas. Depreciation,
Depletion and Amortization increased 16.7 percent, primarily
reflecting various coal assets and other projects placed in service
after the 2007 period. Interest expense was down $3.2 million or
27.5 percent for the period-to-period comparison, due to lower
interest on unrecognized tax benefits and lower interest rates in
the 2008 period when compared with the same period last year.
CONSOL Energy recognized a $56 million reduction of expenses
related to new legislation which allowed for refunds of previously
paid black lung excise taxes including related interest. Taxes
Other Than Income increased 10.7 percent, primarily due to higher
production taxes. Liquidity As of December 31, 2008, CONSOL Energy
(excluding CNX Gas) had $485.0 million of short-term debt and
$380.8 million in total liquidity, which is comprised of $136.6
million of cash and $244.2 million available to be borrowed under
its $1.0 billion bank facility. As of December 31, 2008, CNX Gas
Corporation had $72.7 million of short-term debt and $114.3 million
in total liquidity, which is comprised of $1.9 million of cash and
$112.4 million available to be borrowed under its $200.0 million
bank facility. Coal Operations Quarter Quarter Twelve Months Twelve
Months Ended Ended Ended Ended Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2008 2007 2008 2007 Total Coal Sales (millions of tons) 17.3 16.0
66.2 65.5 Sales - Company Produced (millions of tons) 16.9 15.9
64.6 64.9 Coal Production (millions of tons) 17.5* 15.8* 65.1 64.6
Average Realized Price Per Ton - Company Produced $51.88 $40.66
$48.77 $40.60 Operating Costs Per Ton $30.01 $26.34 $31.36 $25.49
Non-Operating Charges Per Ton $5.37 $4.79 $5.53 $4.68 DD&A Per
Ton $4.16 $3.99 $4.19 $3.52 Total Cost Per Ton - Company Produced
$39.54 $35.12 $41.08 $33.69 Operating Margins Per Ton $21.87 $14.32
$17.41 $15.11 Financial Margins Per Ton** $12.35 $5.54 $7.69 $6.91
Sales and production include CONSOL Energy's portion from equity
affiliates and consolidated variable interest entities. Operating
costs include items such as labor, supplies, power, preparation
costs, project expenditures, subsidence costs, gas well plugging
costs, charges for employee benefits (including Combined Fund
premiums), royalties, as well as production and property taxes.
Non-operating charges include items such as charges for long-term
liabilities, direct administration, selling and general
administration. Operating Margins Per Ton are defined as Average
Realized Price Per Ton less Operating Costs Per Ton. Financial
Margins Per Ton are defined as Average Realized Price Per Ton less
Total Costs Per Ton - Company Produced. *Includes 1.5 and 0.1
million tons of metallurgical grade coal for the quarters ended
December 31, 2008 and 2007 respectively. **May not add due to
rounding. Coal segment operating and financial margins increased
for the quarter-to-quarter comparison due to higher realized prices
per ton in the quarter just ended. "Coal operations ended the year
on a strong note," Harvey said. "Coupled with the strength in coal
prices, coal operations delivered record margins for the quarter."
Sales of company-produced coal were up for the quarter-to-quarter
comparison due to higher production attributable to Buchanan Mine
operating in the fourth quarter of 2008. Average realized price was
up $11.22 per ton, or 27.6 percent in the period-to-period
comparison, primarily reflecting a general increase in market
prices compared with last year. Production, period-to-period, was
up 10.8 percent, or 1.7 million tons, and was primarily
attributable to fourth quarter production in 2008 from Buchanan
Mine. In the period-to-period comparison, total costs were up $4.42
per ton, or 12.6 percent. Operating costs for company-produced coal
in the period-to-period comparison increased $3.67 per ton, or 13.9
percent, primarily due to higher maintenance and supply costs, and
higher labor costs. Maintenance and supply costs represented more
than half of the total increase in operating costs
period-to-period. Higher costs reflect: increased sealing of
mined-out areas of underground mines, including the use of more
costly and higher strength seals required by new safety
regulations; use of more roof control supplies due to mining
conditions, due to increases in the amount of areas being
developed, as well as the use of a new, non-combustible, temporary
roof support that is more expensive than conventional wood roof
supports. Operating margins were up $7.55 per ton, an increase of
52.7 percent period-to-period, due to higher realized pricing per
ton in the quarter just ended. Financial margins were up $6.81 per
ton, an increase of 122.9 percent period-to-period, also due to
higher realized pricing. Other Coal Activities CNX Marine Terminals
increased loadings of coal for export year-over-year. For calendar
year 2008, the coal terminal loaded approximately 11.0 million tons
of coal, a 26.4 percent increase over the previous year. The
terminal has a throughput capacity of about 12 million tons per
year and has 1.2 million tons of ground storage capacity. Gas
Operations CNX Gas Corporation (NYSE:CXG), 83.3 percent of which is
owned by CONSOL Energy, reported total net income of $57.5 million
for the quarter ended December 31, 2008, compared with $29.9
million in the same period a year earlier. CNX Gas Corporation
issued its earnings release on January 29, 2009. Additional
information regarding CNX Gas Corporation financial and operating
results for the quarter are available in their release and can be
found in the investor section of their website:
http://www.cnxgas.com/ Share Repurchase CONSOL's Board of Directors
authorized a share repurchase program of up to $500 million of the
company's common stock during a 24 month period beginning September
9, 2008. The share repurchase plan will be used from time-to-time
depending on a number of factors including: current market
conditions; the company's financial outlook; business conditions,
including cash flows and internal capital requirements; as well as
alternative investment options. During the quarter just ended, the
company repurchased approximately 1.6 million shares of CONSOL
Energy at an average price of $32.95. There is approximately $402.4
million, or 80.5 percent, of unused capacity under the share
repurchase program that may be used periodically, as the company
monitors general conditions in the equity and debt markets. CONSOL
Energy's Board of Directors also has authorized a purchase program
for shares of CNX Gas Corporation (NYSE:CXG) common stock for an
aggregate purchase price of up to $150 million. The authorization,
which is not intended to take CNX Gas private, is effective as of
October 21, 2008 for a 24 month period. Purchases will be made from
time to time at such prices, and on such terms and quantities as
CONSOL Energy management shall determine to be advantageous to the
company and its shareholders. During the quarter just ended, the
company purchased approximately 2.5 million shares of CNX Gas at an
average price of $26.53. There is approximately $82.8 million, or
55.2 percent, of unused capacity under the share purchase program
that may be used periodically, as the company monitors general
conditions in the equity and debt markets. CONSOL Energy Inc.
currently owns approximately 83.3 percent of the outstanding shares
of CNX Gas common stock. Of the total number of shares outstanding,
approximately 25.2 million are owned by shareholders other than
CONSOL Energy Inc. Outlook Because of uncertainties surrounding the
U.S. and global economies, CONSOL Energy plans to adopt a cautious
approach to capital expenditures and cash management, and therefore
is altering its usual practice of issuing annual capital
expenditure and production projections. The company expects to
limit capital spending in the early part of the year in order to
retain the ability to adjust spending to prevailing economic
conditions. Furthermore, the company expects to continue
expenditures on projects, such as overland belt projects or
longwall face extensions. However, the company does not expect to
commit the entire authorized capital budget for coal until it has a
clearer understanding of the state of the economy and demand for
coal. All other coal capital expenditures will be treated as
discretionary and will be evaluated over the course of the year.
GUIDANCE* 2009 2010 2011 2012 COAL Tons Committed and Priced
(millions of tons at Jan. 12, 2009) 63.9 30.4 17.8 5.8 Avg.
Realized Price/Ton Committed & Priced $61.56 $49.22 $47.89
$46.33 * For 2009, 0.8 million tons are capped at a maximum average
price of $46.50 per ton; for 2010, 8.0 million tons are capped at a
maximum average price of $51.30 per ton; for 2011, 5.9 million tons
are capped at a maximum average price of $60.06 per ton; and for
2012, 5.8 million tons are capped at a maximum average price of
$51.58 per ton. Production Targets CONSOL Energy has established a
production target of 65 million tons of coal for calendar year
2009. For the first quarter of 2009, CONSOL Energy expects
production to be approximately 16.0 million tons. CNX Gas
reiterated its previously announced guidance of 85 billion cubic
feet of natural gas for calendar year 2009. Outlook Summary "CONSOL
Energy's low-cost position in coal and gas production should allow
us to remain financially strong even as the world moves through
this period of global economic discontinuity," said Harvey. "We
expect to aggressively manage coal production at our mines,
carefully maintain our relatively low inventory levels, and
maximize our cash flows during this period of tight credit markets
and cloudy economic outlook." CONSOL Energy Inc., a high-Btu
bituminous coal and coal bed methane company, is a member of the
Standard & Poor's 500 Equity Index and has annual revenues of
$4.7 billion. It has 17 bituminous coal mining complexes in six
states and reports proven and probable coal reserves of 4.5 billion
tons. CONSOL Energy was named one of America's most admired
companies in 2005 by Fortune magazine. It received the U.S.
Department of the Interior's Office of Surface Mining National
Award for Excellence in Surface Mining for the company's innovative
reclamation practices in 2002, 2003 and 2004. Also in 2003, the
company was listed in Information Week magazine's "Information Week
500" list for its information technology operations. In 2002, the
company received a U.S. Environmental Protection Agency Climate
Protection Award. Additional information about the company can be
found at its web site: http://www.consolenergy.com/. Definition:
EBIT is defined as earnings (excluding cumulative effect of
accounting change) before deducting net interest expense (interest
expense less interest income) and income taxes. EBITDA is defined
as earnings (excluding cumulative effect of accounting change)
before deducting net interest expense (interest expense less
interest income), income taxes and depreciation, depletion and
amortization. Although 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 flow. EBIT and EBITDA do not purport to represent cash
generated by operating activities and should not be considered in
isolation or as a substitute for measures of performance in
accordance with generally accepted accounting principles. In
addition, because all companies do not calculate EBIT or EBITDA
identically, the presentation here may not be comparable to
similarly titled measures of other companies. Reconciliation of
EBITDA and EBIT to the income statement is as follows: CONSOL
Energy Inc. EBIT & EBITDA (000) Omitted Quarter Quarter Twelve
Months Twelve Months Ended Ended Ended Ended 12/31/08 12/31/07
12/31/08 12/31/07 -------- -------- -------- -------- Net Income
$176,322 $6,787 $442,470 $267,782 Add: Interest Expense 8,412
11,594 36,183 30,851 Less: Interest Income (31,035) (1,134)
(33,013) (12,792) Add: Income Taxes 101,569 9,173 239,934 136,137
------- ------ ------- ------- Earnings Before Interest & Taxes
(EBIT) 255,268 26,420 685,574 421,978 Add: Depreciation, Depletion
& Amortization 104,830 89,835 389,621 324,715 ------- ------
------- ------- Earnings Before Interest, Taxes and DD&A
(EBITDA) $360,098 $116,255 $1,075,195 $746,693 ======== ========
========== ======== For purposes of this press release, references
to "CONSOL Energy," the "company," "we," "our," or "us" or similar
words (other than the legal names of companies) shall include
CONSOL Energy Inc. and its respective subsidiaries. Forward-Looking
Statements Various statements in this document, including those
that express a belief, expectation, or intention, as well as those
that are not statements of historical fact, are forward-looking
statements (as defined in Section 21E of the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of
1995). The forward-looking statements may include projections and
estimates concerning the timing and success of specific projects,
our future production, revenues, income and capital spending. When
we use the words "believe," "intend," "expect," "may," "should,"
"anticipate," "could," "would," "will," "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 document speak only as of
the date of this document; we disclaim any obligation to update
these statements unless required by securities law, and we caution
you not to rely on them unduly. We have based these forward-looking
statements on our current expectations and assumptions about future
events. While our management considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, most of which are difficult
to predict and many of which are beyond our control. These risks,
uncertainties and contingencies include, but are not limited to:
reliance on customers extending existing contracts or entering into
new long-term contracts for coal; reliance on major customers; our
inability to collect payments from customers if their
creditworthiness declines; the disruption of rail, barge and other
systems that deliver our coal, or pipeline systems which deliver
our gas; a loss of our competitive position because of the
competitive nature of the coal industry and the gas industry, or a
loss of our competitive position because of overcapacity in these
industries impairing our profitability; our inability to hire
qualified people to meet replacement or expansion needs; coal users
switching to other fuels in order to comply with various
environmental standards related to coal combustion; the inability
to produce a sufficient amount of coal to fulfill our customers'
requirements which could result in our customers initiating claims
against us; the risks inherent in coal mining being subject to
unexpected disruptions, including geological conditions, equipment
failure, timing of completion of significant construction or repair
of equipment, fires, accidents and weather conditions which could
cause our results to deteriorate; increases in the price of
commodities used in our mining operations and could impact our cost
of production; obtaining governmental permits and approvals for our
operations; the effects of government regulation; the effects of
stringent federal and state safety regulations; the effects of mine
closing, reclamation and certain other liabilities; uncertainties
in estimating our economically recoverable coal and gas reserves;
we do not insure against all potential operating risks; the
outcomes of various legal proceedings, which proceedings are more
fully described in our reports filed under the Securities Exchange
Act of 1934; increased exposure to employee related long-term
liabilities; our participation in multi-employer pension plans may
expose us to obligations beyond the obligation to our employees;
lump sum payments made to retiring salaried employees pursuant to
our defined benefit pension plan; our ability to comply with laws
or regulations requiring that we obtain surety bonds for workers'
compensation and other statutory requirements; acquisitions that we
recently have made 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; the anti-takeover effects of our rights plan could prevent a
change of control; risks in exploring for and producing gas; new
gas development projects and exploration for gas in areas where we
have little or no proven gas reserves; the availability of field
services, equipment and personnel for drilling and producing gas;
replacing our natural gas reserves which if not replaced will cause
our gas reserves and gas production to decline; costs associated
with perfecting title for gas rights in some of our properties; we
need to use unproven technologies to extract coalbed methane on
some of our properties; location of a vast majority of our gas
producing properties in three counties in southwestern Virginia,
making us vulnerable to risks associated with having our gas
production concentrated in one area; other persons could have
ownership rights in our advanced gas extraction techniques which
could force us to cease using those techniques or pay royalties;
the coalbeds from which we produce methane gas frequently contain
water that may hamper production; and other factors discussed in
our 2007 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
(Unaudited) CONSOLIDATED STATEMENTS of INCOME (Dollars in thousands
- except per share data) For the Three For the Twelve Months Ended
Months Ended December 31, December 31, ------------ ------------
2008 2007 2008 2007 ---- ---- ---- ---- Sales - Outside $1,131,450
$819,938 $4,181,569 $3,324,346 Sales - Gas Royalty Interests 17,381
9,745 79,302 46,586 Sales - Purchased Gas 1,604 4,331 8,464 7,628
Freight - Outside 47,839 54,902 216,968 186,909 Other Income 44,438
29,722 166,142 196,728 ------ ------ ------- ------- Total Revenue
and Other Income 1,242,712 918,638 4,652,445 3,762,197 Cost of
Goods Sold and Other Operating Charges (exclusive of depreciation,
depletion and amortization shown below) 725,677 606,743 2,843,203
2,352,000 Gas Royalty Interests' Costs 14,968 8,257 73,962 39,921
Purchased Gas Costs 1,568 4,174 8,175 7,162 Freight Expense 47,839
54,902 216,968 186,909 Selling, General and Administrative Expense
32,023 29,493 124,543 108,664 Depreciation, Depletion and
Amortization 104,830 89,835 389,621 324,715 Interest Expense 8,412
11,594 36,183 30,851 Taxes Other Than Income 75,397 68,110 289,990
258,926 Black Lung Excise Tax Refund (55,795) 24,092 (55,795)
24,092 ------- ------ ------- ------ Total Costs 954,919 897,200
3,926,850 3,333,240 ------- ------- --------- --------- Earnings
Before Income Taxes and Minority Interest 287,793 21,438 725,595
428,957 Income Taxes 101,569 9,173 239,934 136,137 ------- -----
------- ------- Earnings Before Minority Interest 186,224 12,265
485,661 292,820 Minority Interest (9,902) (5,478) (43,191) (25,038)
------ ------ ------- ------- Net Income $176,322 $6,787 $442,470
$267,782 ======= ====== ======== ======== Basic Earnings Per Share
$0.98 $0.04 $2.43 $1.47 ==== ===== ===== ===== Dilutive Earnings
Per Share $0.97 $0.04 $2.40 $1.45 ==== ===== ===== ===== Weighted
Average Number of Common Shares Outstanding: Basic 180,799,712
181,835,472 182,386,011 182,050,627 =========== ===========
=========== =========== Dilutive 182,327,963 184,417,123
184,679,592 184,149,751 =========== =========== ===========
=========== Dividends Paid Per Share $0.10 $0.10 $0.40 $0.31 ====
===== ===== ===== CONSOL ENERGY INC. AND SUBSIDIARIES (Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Three
Months Ended Twelve Months Ended December 31, December 31,
------------ ------------ 2008 2007 2008 2007 ---- ---- ---- ----
Operating Activities: Net Income $176,322 $6,787 $442,470 $267,782
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: Depreciation, Depletion and Amortization
104,830 89,835 389,621 324,715 Stock-based Compensation 6,275 3,747
25,186 24,243 Gain on the Sale of Assets (6,782) (2,491) (23,368)
(112,389) Change in Minority Interest 9,902 5,478 43,191 25,038
Amortization of Mineral Leases 1,404 973 4,871 4,519 Deferred
Income Taxes 79,343 (4,088) 135,594 59,555 Equity in Earnings of
Affiliates (5,826) (1,342) (11,140) (6,551) Changes in Operating
Assets: Accounts Receivable Securitization 12,100 39,600 125,400
Accounts and Notes Receivable (4,217) (20,867) (79,747) 14,074
Inventories (41,206) 2,968 (53,994) 13,448 Prepaid Expenses 3,114
35 (5,032) (9,145) Changes in Other Assets 2,915 20,187 17,081
40,164 Changes in Operating Liabilities: Accounts Payable 50,460
(14,257) 64,851 (2,435) Other Operating Liabilities (43,574)
(9,915) (14,020) (30,978) Changes in Other Liabilities 11,805
(2,742) 51,546 (54,924) Other 1,457 1,590 2,754 1,517 ----- -----
----- ----- Net Cash Provided by Operating Activities 346,222
87,998 1,029,464 684,033 ------- ------ --------- ------- Investing
Activities: Capital Expenditures (321,663) (217,470) (1,061,669)
(743,114) Acquisition of AMVEST, net of cash received (65)
(296,724) Net Investment in Equity Affiliates 2,487 (4,023) 1,879
(7,057) Purchase of CNX Gas Stock (67,259) (67,259) (10,000)
Proceeds from Sales of Assets 9,394 20,504 28,193 84,791 -----
------ ------ ------ Net Cash Used in Investing Activities
(377,041) (201,054) (1,098,856) (972,104) -------- --------
---------- -------- Financing Activities: Payments on Miscellaneous
Borrowings (11,419) (1,619) (10,414) (2,935) Proceeds from Revolver
287,200 66,500 310,200 247,500 Payments on Long Term Notes (45,000)
Tax Benefit from Stock-Based Compensation (1,105) 17,324 22,003
23,682 Dividends Paid (18,079) (18,193) (72,957) (56,475) Issuance
of Treasury Stock 141 12,024 15,215 19,224 Purchases of Common
Stock (97,709) (25) (97,794) (80,157) ------- --- ------- -------
Net Cash Provided by Financing Activities 159,029 76,011 166,253
105,839 ------- ------ ------- ------- Net Increase (Decrease) in
Cash and Cash Equivalents 128,210 (37,045) 96,861 (182,232) Cash
and Cash Equivalents at Beginning of Period 10,302 78,696 41,651
223,883 ------ ------ ------ ------- Cash and Cash Equivalents at
End of Period $138,512 $41,651 $138,512 $41,651 ======= =======
======== ======= CONSOL ENERGY INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollars in thousands - except per share data)
---------------------------------------------- (Unaudited) December
31, December 31, 2008 2007 ---- ---- ASSETS ------ Current Assets:
Cash and Cash Equivalents $138,512 $41,651 Accounts and Notes
Receivable: Trade 221,729 180,545 Other Receivables 79,552 69,771
Inventories 227,810 163,193 Deferred Income Taxes 60,599 130,820
Recoverable Income Taxes 33,862 19,090 Prepaid Expenses 221,750
78,085 ------- ------ Total Current Assets 983,814 683,155
Property, Plant and Equipment: Property, Plant and Equipment
9,980,288 8,945,312 Less - Accumulated Depreciation, Depletion and
Amortization 4,214,316 3,980,270 --------- --------- Total
Property, Plant and Equipment - Net 5,765,972 4,965,042 Other
Assets: Deferred Income Taxes 333,543 374,811 Investment in
Affiliates 72,996 94,866 Other 214,133 90,216 ------- ------ Total
Other Assets 620,672 559,893 ---------- ---------- TOTAL ASSETS
$7,370,458 $6,208,090 ========== ========== CONSOL ENERGY INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands -
except per share data)
---------------------------------------------- (Unaudited) December
31, December 31, 2008 2007 ---- ---- LIABILITIES AND STOCKHOLDERS'
EQUITY ------------------------------------ Current Liabilities:
Accounts Payable $385,197 $238,312 Short-Term Notes Payable 557,700
247,500 Current Portion of Long-Term Debt 22,401 18,283 Other
Accrued Liabilities 546,442 512,302 ------- ------- Total Current
Liabilities 1,511,740 1,016,397 Long-Term Debt: Long-Term Debt
393,312 398,077 Capital Lease Obligations 75,039 90,848 ------
------ Total Long-Term Debt 468,351 488,925 Deferred Credits and
Other Liabilities: Postretirement Benefits Other Than Pensions
2,493,344 2,336,809 Pneumoconiosis Benefits 190,261 171,896 Mine
Closing 404,629 399,633 Workers' Compensation 128,477 118,356
Deferred Revenue 3,162 Salary Retirement 194,567 67,392 Reclamation
38,193 34,317 Other 266,550 193,666 ------- ------- Total Deferred
Credits and Other Liabilities 3,716,021 3,325,231 Minority Interest
212,159 163,118 ------- ------- Total Liabilities and Minority
Interest 5,908,271 4,993,671 Stockholders' Equity: Common Stock,
$.01 par value; 500,000,000 Shares Authorized, 183,014,426 Issued
and 180,549,851 Outstanding at December 31, 2008; 185,126,526
Issued and 182,291,623 Outstanding at December 31, 2007 1,830 1,851
Capital in Excess of Par Value 993,478 966,544 Retained Earnings
1,010,902 766,536 Other Comprehensive Loss (461,900) (419,284)
Common Stock in Treasury, at Cost - 2,464,575 Shares at December
31, 2008 and 2,834,903 Shares at December 31, 2007 (82,123)
(101,228) ------- -------- Total Stockholders' Equity 1,462,187
1,214,419 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $7,370,458 $6,208,090 ========== ========== CONSOL ENERGY
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY (Dollars in Thousands - except per share data)
---------------------------------------------- Capital in Retained
Common Excess of Earnings Stock Par Value (Deficit) ----- ---------
--------- Balance - December 31, 2007 $1,851 $966,544 $766,536
------ -------- -------- (Unaudited) Net Income - - 442,470
Treasury Rate Lock (Net of ($55) tax) - - - Gas Cash Flow Hedge
(Net of $77,292 tax) - - - FAS 158 Long-Term Liability Adjustments
(Net of ($213) tax) - - - FAS 158 YE Adjustments (Net of ($81,943)
Tax) - - - Comprehensive Income (Loss) - - 442,470 Cumulative
Effect of FAS 158 Measurement (Net of ($23,562) tax) - - (38,606)
Adjust Minority Interest in OCI of GAS - - - Issuance of Treasury
Stock - - (21,519) Purchases of Treasury Stock - - - Retirement of
Common Stock - - - (2,112,200 shares) (21) (16,876) (65,022) Tax
Benefit from Stock-Based Compensation - 22,003 - Amortization of
Stock-Based Compensation Awards - 21,807 - Dividends ($0.40 per
share) - - (72,957) - - ------- Balance - December 31, 2008 $1,830
$993,478 $1,010,902 ====== ======== ========== Other Compre- Total
hensive Stock- Income Treasury holders' (Loss) Stock Equity ------
----- ------ Balance - December 31, 2007 $(419,284) $(101,228)
$1,214,419 --------- --------- ---------- (Unaudited) Net Income -
- 442,470 Treasury Rate Lock (Net of ($55) tax) (77) - (77) Gas
Cash Flow Hedge (Net of $77,292 tax) 118,646 - 118,646 FAS 158
Long-Term Liability Adjustments (Net of ($213) tax) (347) - (347)
FAS 158 YE Adjustments (Net of ($81,943) Tax) (139,958) - (139,958)
-------- - -------- Comprehensive Income (Loss) (21,736) - 420,734
Cumulative Effect of FAS 158 Measurement (Net of ($23,562) tax)
(87) - (38,693) Adjust Minority Interest in OCI of GAS (20,793) -
(20,793) Issuance of Treasury Stock - 34,980 13,461 Purchases of
Treasury Stock - (15,875) (15,875) Retirement of Common Stock - - -
(2,112,200 shares) - - (81,919) Tax Benefit from Stock-Based
Compensation - - 22,003 Amortization of Stock-Based Compensation
Awards - - 21,807 Dividends ($0.40 per share) - - (72,957) -------
Balance - December 31, 2008 $(461,900) $(82,123) $1,462,187
========= ======== ========== INCOME STATEMENT BY SEGMENT In
Millions Quarter Ended December 31, 2008
------------------------------- COAL --------------------- Total
Total Produced Other Total Gas Other TOTAL -------- ----- ----- ---
----- ----- Sales $833 $36 $869 $186 $78 $1,133 Gas Royalty
Interests - - - 17 - 17 Freight Revenue 48 - 48 - - 48 Other Income
- 27 27 (4) 22 45 - -- -- -- -- -- Total Revenue and Other Income
881 63 944 199 100 1,243 Cost of Goods Sold 495 78 573 60 95 728
Gas Royalty Interests' Costs - - - 15 - 15 Freight Expense 48 - 48
- - 48 Selling, General & Admin. 18 1 19 7 6 32 DD&A 77 2
79 20 6 105 Interest Expense - - - - 8 8 Taxes Other Than Income 46
21 67 6 2 75 Black Lung Excise Tax Refund - (56) (56) - - (56) -
--- --- - - --- Total Cost 684 46 730 108 117 955 ---- --- ---- ---
---- --- Earnings Before Income Taxes $197 $17 $214 $91 $(17) 288
Income Tax Expense (102) ---- Earnings Before Minority Interest 186
Minority Interest (10) --- Net Income $176 ==== INCOME STATEMENT BY
SEGMENT In Millions Year to Date December 31, 2008
------------------------------ COAL ---------------------- Total
Total Produced Other Total Gas Other TOTAL -------- ----- ----- ---
----- ----- Sales $3,067 $118 $3,185 $689 $316 $4,190 Gas Royalty
Interests - - - 79 - 79 Freight Revenue 217 - 217 - - 217 Other
Income - 106 106 9 51 166 - --- --- - -- --- Total Revenue and
Other Income 3,284 224 3,508 777 367 4,652 Cost of Goods Sold 2,031
282 2,313 197 341 2,851 Gas Royalty Interests' Costs - - - 74 - 74
Freight Expense 217 - 217 - - 217 Selling, General & Admin. 72
3 75 25 25 125 DD&A 287 12 299 69 22 390 Interest Expense - - -
- 36 36 Taxes Other Than Income 253 - 253 26 11 290 Black Lung
Excise Tax Refund - (56) (56) - - (56) - --- --- - - --- Total Cost
2,860 241 3,101 391 435 3,927 ---- ---- ---- ---- ---- --- Earnings
Before Income Taxes $424 $(17) $407 $386 $(68) 725 Income Tax
Expense (240) ---- Earnings Before Minority Interest 485 Minority
Interest (43) --- Net Income $442 ==== CONSOL Energy Inc. Financial
and Operating Statistics Twelve Months Ended Quarter Ended Dec. 31,
Dec. 31, 2008 2007 2008 2007 ---- ---- ---- ---- AS REPORTED
FINANCIALS: Revenue ($ MM) $1,242.712 $918.638 $4,652.445
$3,762.197 EBIT ($MM) * $255.268 $26.420 $685.574 $421.978 EBITDA
($ MM) * $360.098 $116.255 $1,075.195 $746.693 Net Income / (Loss)
($ MM) $176.322 $6.787 $442.470 $267.782 EPS(diluted) $0.97 $0.04
2.40 1.45 Average shares outstanding -Dilutive 182,327,963
184,417,123 184,679,592 184,149,751 CAPEX ($ MM) (including
acquisitions) $321.663 $217.535 $1,061.669 $1,039.838 COAL
OPERATIONAL: # Complexes Producing (end of period) 17 15 17 15
Sales (MM tons)- Produced only 16.892 15.880 64.566 $64.925 Average
sales price ** ($/ton) $51.88 $40.66 $48.77 $40.60 Production
income ($/ton) $12.35 $5.54 $7.69 $6.91 Production (MM tons)-
Produced only 17.458 15.800 65.077 64.617 Produced Tons Ending
inventory (MM tons)*** 1.727 1.309 1.727 1.309 * Year to date total
may not add due to rounding ** note: average sales price of tons
produced ***note: includes equity companies CONSOL ENERGY INC.
PRODUCTION (000's) 4TH QTR 4TH QTR 2008 2007 ACTUAL ACTUAL ------
------ TOTAL NORTHERN APPALACHIA 13,307 12,988 TOTAL CENTRAL
APPALACHIA 3,835 2,520 OTHER 317 293 --- --- TOTAL PRODUCTION
17,458 15,800 ====== ====== *May not add due to rounding
DATASOURCE: CONSOL Energy Inc. CONTACT: Charles E. Mazur, Jr. of
CONSOL Energy Inc., +1-724-485-4340 Web Site:
http://www.consolenergy.com/
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