Met Coal Production Was 0.6 Million Tons; Thermal Coal Production
Was 12.9 Million Tons CNX Gas Production Guidance Raised Again,
This Time to 92 Bcf PITTSBURGH, Oct. 22 /PRNewswire-FirstCall/ --
CONSOL Energy Inc. (NYSE: CNX), a producer of high-Btu thermal
coal, metallurgical coal, and natural gas, reported net income
attributable to CONSOL Energy shareholders for the quarter ended
September 30, 2009 of $87.4 million, or $0.48 per dilutive share.
This is nearly equal to the net income attributable to CONSOL
Energy shareholders of $90.1 million, or $0.49 per dilutive share,
for the quarter ended September 30, 2008. "We executed the third
quarter according to plan," said J. Brett Harvey, president and
chief executive officer. "In fact, stronger than expected
metallurgical coal markets enabled us to produce more met coal than
we expected. Our thermal coal sales, though, have still not shown a
meaningful rebound. Our strategy is to match production with
customer shipments so as not to build inventory. We continue to
invest in our mines and our gas fields to create shareholder value.
"At CNX Gas," Mr. Harvey continued, "we've raised production
guidance again, this time from 89 Bcf to 92 Bcf. Results from our
Marcellus Shale and coalbed methane programs continue to exceed
expectations. Based on our Marcellus results, CNX Gas has increased
its capital for lease and land acquisition. "We've changed our
presentation with this release," Mr. Harvey concluded. "We are now
reporting separate results for met coal and thermal coal. We
believe that this increased transparency will enable investors to
more clearly see the earning power, product diversity, and growth
potential of CONSOL Energy. This increased transparency should
enable investors to more accurately value the company relative to
its peers." FINANCIAL RESULTS - Period-To-Period Comparison Nine
Nine Quarter Quarter Months Months Ended Ended Ended Ended Sept.
30, Sept. 30, Sept. 30, Sept. 30, 2009 2008 2009 2008 Total Revenue
and Other Income $1,094.5 $1,173.1 $3,383.8 $3,409.7 Net Income
attributable to CONSOL Energy shareholders $87.4 $90.1 $396.5
$266.1 Earnings Per Share - diluted $0.48 $0.49 $2.17 $1.44 Net
Cash from Operating Activities $162.0 $213.3 $728.2 $683.2 EBITDA
$239.8 $235.9 $910.9 $715.1 EBIT $129.8 $139.6 $587.2 $430.3
Capital Expenditures $192.7 $303.7 $689.1 $740.0 Cash (Provided by)
Used in Other Investing Activities* ($23.9) ($1.7) ($74.2) ($18.2)
In millions of dollars except per share. Amounts for capital
expenditures do not include amounts for equity affiliates.
*Represents net cash (provided by) used in investment in Equity
Affiliates and Proceeds from Sales of Assets. Quarter-To-Quarter
Discussion of Financial Results Total Revenue and Other Income was
$1,094.5 million for the quarter ended September 30, 2009, compared
with $1,173.1 million for the quarter ended September 30, 2008, or
a decrease of 7%. Although revenue from our thermal coal business
was higher, met coal revenue and gas revenue were lower. Net income
attributable to CONSOL Energy shareholders and earnings per share
were $87.4 million, or $0.48 per dilutive share. This compares with
$90.1 million, or $0.49 per dilutive share in the year-earlier
quarter. The slight decrease was due to lower thermal coal
production, lower met coal production, and lower gas prices during
the third quarter. CONSOL Energy had net cash from operating
activities of $162.0 million for the quarter ended September 30,
2009, with $65.4 million attributable to CNX Gas. For CONSOL
Energy, this compares to $213.3 million for the quarter ended
September 30, 2008, with $120.1 million attributable to CNX Gas.
CONSOL Energy had total capital expenditures of $192.7 million in
the quarter ended September 30, 2009, with $49.3 million
attributable to CNX Gas. For both CONSOL Energy and CNX Gas,
quarterly capital expenditures in the September 2009 quarter are
lower than the June 2009 quarter, as some projects move toward
completion. Liquidity As of September 30, 2009, CONSOL Energy had
$336.9 million of short-term debt and $426.7 million in total
liquidity, which is comprised of $31.4 million of cash and $395.3
million available to be borrowed under its $1.0 billion bank
facility. As of September 30, 2009, CNX Gas Corporation had $73.1
million of short-term debt and $113.0 million in total liquidity,
which is comprised of $1.0 million of cash and $112.0 million
available to be borrowed under its $200.0 million bank facility.
Met Coal Operations MET COAL OPERATIONS- Period-To-Period
Comparison Nine Nine Quarter Quarter Months Months Ended Ended
Ended Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2009 2008 2009
2008 ----- ----- ---- ---- Total Coal Sales (millions of tons) 0.7
0.8 1.3 2.0 ----------------------------- --- --- --- --- Sales -
Company Produced (millions of tons) 0.7 0.8 1.3 2.0
----------------- --- --- --- --- Coal Production (millions of
tons) 0.6 0.9 1.2 2.2 ---------------------------------- --- ---
--- --- Average Realized Price Per Ton - Company Produced $97.07
$117.82 $101.12 $113.73 ---------------- ------ ------- -------
------- Operating Costs Per Ton $44.50 $47.98 $66.49 $53.58
----------------------- ------ ------ ------ ------ Non-Operating
Charges Per Ton $10.87 $9.08 $16.33 $9.61
----------------------------- ------ ----- ------ ----- DD&A
Per Ton $4.88 $4.47 $7.72 $4.44 ------------ ----- ----- -----
----- Total Cost Per Ton - Company Produced $60.25 $61.53 $90.54
$67.63 ---------------------------- ------ ------ ------ ------
Operating Margins Per Ton $52.57 $69.84 $34.63 $60.15
------------------------- ------ ------ ------ ------ Financial
Margins Per Ton $36.82 $56.29 $10.58 $46.10
------------------------- ------ ------ ------ ------ 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. Metallurgical Coal
Operations consist almost entirely of the company's Buchanan Mine
in southwestern Virginia. This mine, which produces some of the
highest quality low-vol met coal in the world, resumed longwall
production in early June with two shifts. A third shift was added
during the third quarter, as shipments to steel producers
increased. For the quarter just-ended, 0.6 million tons were
produced, versus 0.9 million tons in the year-earlier quarter. The
average realized price per met ton was $97.07 per ton in the
just-ended quarter, down from $117.82 in the year-earlier quarter.
Total cost per ton was $60.25 per met ton, down from $61.53 per
ton. The company believes costs at Buchanan are among the lowest of
any met mine in the country. Operating and financial margins per
ton were both down, as lower realized prices weakened considerably
from the year-earlier quarter. Met coal inventory as of September
30, 2009 was 0.5 million tons. Thermal Coal Operations THERMAL COAL
OPERATIONS- Period-To-Period Comparison Nine Nine Quarter Quarter
Months Months Ended Ended Ended Ended Sept. 30, Sept. 30, Sept. 30,
Sept. 30, 2009 2008 2009 2008 ---- ---- ---- ---- Total Coal Sales
(millions of tons) 13.0 14.5 41.2 46.8
----------------------------- ---- ---- ---- ---- Sales - Company
Produced (millions of tons) 13.0 14.1 41.0 45.6 -----------------
---- ---- ---- ---- Coal Production (millions of tons) 12.9 13.9
42.7 45.5 ---------------------------------- ---- ---- ---- ----
Average Realized Price Per Ton - Company Produced $58.07 $46.75
$57.38 $44.50 ---------------- ------ ------ ------ ------
Operating Costs Per Ton $36.70 $34.72 $33.73 $30.83
----------------------- ------ ------ ------ ------ Non-Operating
Charges Per Ton $6.28 $6.06 $5.66 $5.40
----------------------------- ----- ----- ----- ----- DD&A Per
Ton $4.85 $4.58 $4.47 $4.18 ------------ ----- ----- ----- -----
Total Cost Per Ton - Company Produced $47.83 $45.36 $43.86 $40.41
---------------------------- ------ ------ ------ ------ Operating
Margins Per Ton $21.37 $12.03 $23.65 $13.67
------------------------- ------ ------ ------ ------ Financial
Margins Per Ton $10.24 $1.39 $13.52 $4.09 -------------------------
------ ----- ------ ----- 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. Thermal
Coal Operations consist of the company's mines in Northern
Appalachia, its non-met Central Appalachian mines, and its Western
mine. For the just-ended quarter, 12.9 million tons were produced,
versus 13.9 million tons in the year-earlier quarter. Production
was reduced to match lower shipments resulting from lower economic
activity and milder summer weather. All of the company's 9
longwalls that produce thermal coal were running by September 1,
after a period of summer shutdowns. Regional thermal coal
production was 10.9 million tons in Northern Appalachia, 1.7
million tons in Central Appalachia, and 0.3 million in the West in
the just-ended quarter. The average realized price per ton for our
thermal operations was $58.07 per ton, up 24% from $46.75 in the
year-earlier quarter. Total cost per ton was $47.83 per ton, up 5%
from $45.36 per ton in the year-earlier quarter. Higher costs per
ton were primarily due to production being down 7%, quarter over
quarter. Operating and financial margins per ton were both up
significantly, as much higher realized prices were only slightly
offset by higher unit costs. Thermal coal inventory as of September
30, 2009 was 2.8 million tons. "Since the fourth quarter of last
year," noted J. Brett Harvey, "CONSOL Energy has been able to
capture higher pricing for its thermal sales because of the
continued build-out of scrubbers by generators in our natural
market area. CONSOL's thermal coal now commands a premium in the
marketplace because of its high Btu content. I believe that
investors need to consider this new pricing paradigm when valuing
CONSOL." Gas Operations CNX Gas Corporation (NYSE:CXG), 83.3% of
which is owned by CONSOL Energy, reported total net income
attributable to CNX Gas shareholders of $35.5 million for the
quarter ended September 30, 2009, compared with $67.4 million in
the year earlier quarter. CNX Gas Corporation also issued its
earnings release this morning. Additional information regarding CNX
Gas Corporation financial and operating results for the quarter is
available in its release and can be found in the investor section
of its website: http://www.cnxgas.com/ Guidance CONSOL Energy
expects to invest $1.0 billion in its coal and gas businesses
during calendar year 2009. The company continues to monitor and
evaluate capital spending to ensure adequate liquidity and to
preserve options for possible external investment. The company is
committed to completing capital projects already in progress,
including those that increase capacity and efficiency. CNX Gas
expects to invest largely from cash flow generated from operating
activities for 2009. GUIDANCE 2009 2010 2011 ---- ---- ----
COAL-COMMITTED TONS W/O PRICING (MM) - 7.2 19.5 COAL-TONS WITH FIRM
PRICING Tons Committed and Priced (MM tons, 10/16/09) 58.2 51.1*
20.8 Avg. Realized Price/Ton Committed & Priced $58.74 $53.51
$51.53 COAL-TONS PRICED WITH COLLARS Tons (MM) - 0.4 6.0 Average
Ceiling - $58.25 $62.08 Average Floor - $43.25 $52.80 Notes: *2010
Tons Committed and Priced include 1.4 MM tons of met coal at a
price of $114.47 per ton. Tons priced with ceilings and floors are
not included in tons with firm pricing; they are additive. Although
there is no assurance that customers with contracts will perform
under these contracts, CONSOL Energy expects to capture the value
of contracts through negotiated or legal means. CONSOL Energy is
maintaining its production target of 58 million tons for calendar
year 2009, including 1.9 million tons of met coal. CNX Gas raised
its previously announced production guidance of 89 to 92 Bcf for
calendar year 2009. Outlook Summary The U.S. economy may have
bottomed in the third quarter. Depending on the pace and
sustainability of the recovery from the current recession, we
believe substantial opportunities exist for our metallurgical coal,
thermal coal, and gas businesses. Due to the significant fiscal
spending and relaxed monetary policy in the United States, a modest
recovery appears likely in the U.S. in 2010. This should lead to an
increase in demand for energy products from industrial customers,
power generators and steel producers. Metallurgical Coal Outlook
Steel plant capacity utilization rates in the U.S. and globally
continue to improve from the beginning of the year and are nearly
double of what they were at year-end 2008. Domestic steel mill
capacity is approximately 60% and Asian steel mills currently are
using about 75% of their capacity. Export demand for metallurgical
coal, especially from China, is having a positive impact on pricing
and has led many industry analysts to predict a shortage of
high-quality metallurgical coal in the near-term. Thermal Coal
Outlook Current inventories at coal-fired power generators are near
all-time highs due to the contraction in the U.S. economy.
Customers in our major market area (the PJM power pool) had an
estimated 60 days of inventory on hand at the first of October. The
company believes the overhang in thermal inventories is likely to
continue into at least the first half of 2010. CONSOL Energy
believes, however, that when thermal coal markets tighten, they
will do so quickly. Industry analysts expect annualized coal
production to fall by 80 to 100 million tons in 2009 and anticipate
a permanent reduction as producers in Central Appalachia face
increased financial, safety, and permitting issues which will
eventually decrease supply. For 2010, industrial and power demand
is likely to increase due to the expectations of an improvement in
economic activity. Moreover, higher natural gas prices in 2010
should lead power generators to dispatch coal ahead of natural gas.
We anticipate up to 30 million tons of coal could displace natural
gas in 2010. In addition, approximately 19 gigawatts of new
coal-fired electricity generation capacity is set to come online by
the end of 2012. This new demand, coupled with permanent cuts in
coal production as well as safety and regulatory issues, is setting
the stage for coal supply shortages over the next few years. With
the continued build-out of scrubbers by generators, increased
economic activity and its low cost position, CONSOL Energy is in a
position to gain market share. Natural Gas Outlook The U.S. natural
gas market has shown signs of stability because the total rig count
appears to have bottomed at approximately 700 rigs. The
expectations of lower natural gas production, coupled with
expectations of increased demand due to an improving economy and a
return to normal weather patterns, has led to an improvement in
pricing. With its low costs and rising production volumes, CNX Gas
should benefit from improved pricing. Mr. Harvey concluded, "With
regard to the economic outlook, our best indicators are our own
inventories. We will not overproduce if markets remain weak. CONSOL
Energy has major advantages with its low cost position and low
level of debt. I continue to believe that CONSOL Energy will
outperform its peers." CONSOL Energy Inc., a high-Btu bituminous
coal and natural gas company, is a member of the Standard &
Poor's 500 Equity Index and the Fortune 500. It has 12 bituminous
coal mining complexes in six states and reports proven and probable
coal reserves of 4.5 billion tons. It is also a majority owner of
CNX Gas Corporation, a leading Appalachian gas producer, with
proved reserves of over 1.4 trillion cubic feet. Additional
information about CONSOL Energy 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 EBIT & EBITDA Reconciliation (000)
Omitted Nine Nine Quarter Quarter Months Months Ended Ended Ended
Ended 9/30/09 9/30/08 9/30/09 9/30/08 ------ ------- -------
------- Net Income Attributable to CONSOL Energy Shareholders
$87,370 $90,054 $396,528 $266,148 Add: Interest Expense 7,502 9,069
22,959 27,771 Less: Interest Income (243) (521) (1,630) (1,978)
Add: Income Taxes 35,219 41,014 169,370 138,365 ------ ------
------- ------- Earnings Before Interest & Taxes (EBIT)
$129,848 $139,616 $587,227 $430,306 Add: Depreciation, Depletion
& Amortization 109,965 96,288 323,659 284,791 ------- ------
------- ------- Earnings Before Interest, Taxes and DD&A
(EBITDA) $239,813 $235,904 $910,886 $715,097 ======== ========
======== ======== 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:
the deteriorating economic conditions; an extended decline in
prices we receive for our coal and gas affecting our operating
results and cash flows; reliance on customers honoring existing
contracts, 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; 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; foreign currency fluctuations could
adversely affect the competitiveness of our coal abroad; 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 impact
financial results; increases in the price of commodities used in
our mining operations could impact our cost of production;
obtaining, maintaining, and renewing governmental permits and
approvals for our operations; the effects of proposals to regulate
greenhouse gas emissions; the effects of government regulation; the
effects of stringent federal and state employee health and safety
regulations; the effects of mine closing, reclamation and certain
other liabilities; the effects of subsidence from longwall mining
operations on surface structures, water supplies, streams and
surface land; uncertainties in estimating our economically
recoverable coal and gas reserves; 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; minimum funding
requirements by the Pension Protection Act of 2006 (the Pension
Act) coupled with the significant investment and plan asset losses
suffered during the current economic decline has exposed us to
making additional required cash contributions to fund the pension
benefit plans which we sponsor and the multi-employer pension
benefit plans in which we participate; lump sum payments made to
retiring salaried employees pursuant to our defined benefit pension
plan; 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 disruption of pipeline systems which deliver our
gas; 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; 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;
our ability to acquire water supplies needed for drilling, or our
ability to dispose of water used or removed from strata at a
reasonable cost and within applicable environmental rules; the
coalbeds and other strata from which we produce methane gas
frequently contain impurities that may hamper production; the
enactment of Pennsylvania severance tax on natural gas may impact
results of existing operations and impact the economic viability of
exploiting new gas drilling and production opportunities in
Pennsylvania; our hedging activities may prevent us from benefiting
from price increases and may expose us to other risks; and other
factors discussed in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2008 under "Risk Factors," as updated by
any subsequent Form 10-Qs, which are on file at the Securities and
Exchange Commission. Contact: Dan Zajdel at (724) 485-4169 CONSOL
ENERGY INC. AND SUBSIDIARIES SPECIAL INCOME STATEMENT (Unaudited)
(Dollars in millions) Three Months Ended September 30, 2009
------------------------------------- Produced Other Total Total
Coal Coal Coal Gas Other Company ---- ---- ---- --- ----- -------
Sales $800 $- $800 $155 $69 $1,024 Gas Royalty Interest - - - 8 - 8
Freight Revenue 36 - 36 - - 36 Other Income - - - - 26 26 -- -- --
-- -- -- Total Revenue and Other Income 836 - 836 163 95 1,094 Cost
of Goods Sold 514 41 555 64 89 708 Gas Royalty Interests' Costs - -
6 - 6 Freight Expense 36 - 36 - - 36 Selling, General & Admin.
20 4 24 2 6 32 DD&A 70 3 73 31 6 110 Interest Expense - - - - 8
8 Taxes Other Than Income 61 - 61 2 3 66 -- - -- - - -- Total Cost
701 48 749 105 112 966 ---- ---- --- --- ---- Earnings Before
Income Taxes $135 $(48) $87 $58 $(17) 128 Income Tax (35) ---
Earnings Before Minority Interest 93 Minority Interest (6) -- Net
Income $87 === CONSOL ENERGY INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (Dollars in thousands - except per
share data) Three Months Ended Nine Months Ended September 30,
September 30, 2009 2008 2009 2008 Sales - Outside $1,022,617
$1,052,384 $3,167,002 $3,050,119 Sales - Gas Royalty Interests
8,443 22,902 29,741 61,921 Sales - Purchased Gas 1,471 1,674 4,102
6,860 Freight - Outside 36,130 60,458 94,133 169,129 Other Income
25,856 35,688 88,855 121,704 ------ ------ ------ ------- Total
Revenue and Other Income 1,094,517 1,173,106 3,383,833 3,409,733
Cost of Goods Sold and Other Operating Charges (exclusive of
depreciation, depletion and amortization shown below) 707,256
740,063 2,017,735 2,117,526 Gas Royalty Interests' Costs 6,268
21,040 23,317 58,994 Purchased Gas Costs 1,103 1,664 3,023 6,607
Freight Expense 36,130 60,458 94,133 169,129 Selling, General and
Administrative Expense 31,642 31,406 98,084 92,520 Depreciation,
Depletion and Amortization 109,965 96,288 323,659 284,791 Interest
Expense 7,502 9,069 22,959 27,771 Taxes Other Than Income 66,146
69,688 214,457 214,593 ------ ------ ------- ------- Total Costs
966,012 1,029,676 2,797,367 2,971,931 ------- --------- ---------
--------- Earnings Before Income Taxes 128,505 143,430 586,466
437,802 Income Taxes 35,219 41,014 169,370 138,365 ------ ------
------- ------- Net Income 93,286 102,416 417,096 299,437 Less: Net
Income Attributable to Noncontrolling Interest (5,916) (12,362)
(20,568) (33,289) ------ ------- ------- ------- Net Income
Attributable to CONSOL Energy Inc. Shareholders $87,370 $90,054
$396,528 $266,148 ======= ======= ======== ======== Basic Earnings
Per Share $0.48 $0.49 $2.20 $1.46 ===== ===== ===== ===== Dilutive
Earnings Per Share $0.48 $0.49 $2.17 $1.44 ===== ===== ===== =====
Weighted Average Number of Common Shares Outstanding: Basic
180,725,194 183,202,086 180,649,268 182,918,637 ===========
=========== =========== =========== Dilutive 183,191,667
185,591,759 182,751,922 185,349,250 =========== ===========
=========== =========== Dividends Paid Per Share $0.10 $0.10 $0.30
$0.30 ===== ===== ===== ===== CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollars in thousands - except per
share data) (Unaudited) Sept. 30, Dec. 31, 2009 2008 ---- ----
ASSETS ------ Current Assets: Cash and Cash Equivalents $32,402
$138,512 Accounts and Notes Receivable: Trade 169,036 221,729 Other
Receivables 18,792 79,552 Inventories 310,539 227,810 Deferred
Income Taxes 86,107 60,599 Recoverable Income Taxes 2,643 33,862
Prepaid Expenses 210,415 221,750 ------- ------- Total Current
Assets 829,934 983,814 Property, Plant and Equipment: Property,
Plant and Equipment 10,452,687 9,980,288 Less - Accumulated
Depreciation, Depletion and Amortization 4,471,096 4,214,316
--------- --------- Total Property, Plant and Equipment - Net
5,981,591 5,765,972 Other Assets: Deferred Income Taxes 294,018
333,543 Investment in Affiliates 81,724 72,996 Other 131,670
214,133 ------- ------- Total Other Assets 507,412 620,672
---------- ---------- TOTAL ASSETS $7,318,937 $7,370,458 ==========
========== CONSOL ENERGY INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (Dollars in thousands - except per share data)
---------------------------------------------- (Unaudited) Sept.
30, Dec. 31, LIABILITIES AND EQUITY 2009 2008
---------------------- ---- ---- Current Liabilities: Accounts
Payable $238,826 $385,197 Short-Term Notes Payable 409,950 557,700
Current Portion of Long-Term Debt 22,647 22,401 Other Accrued
Liabilities 527,951 546,442 ------- ------- Total Current
Liabilities 1,199,374 1,511,740 Long-Term Debt: Long-Term Debt
390,127 393,312 Capital Lease Obligations 64,565 75,039 ------
------ Total Long-Term Debt 454,692 468,351 Deferred Credits and
Other Liabilities: Postretirement Benefits Other Than Pensions
2,494,821 2,493,344 Pneumoconiosis Benefits 197,870 190,261 Mine
Closing 395,795 404,629 Gas Well Closing 84,823 80,554 Workers'
Compensation 134,412 128,477 Salary Retirement 145,172 194,567
Reclamation 27,771 38,193 Other 156,880 185,996 ------- -------
Total Deferred Credits and Other Liabilities 3,637,544 3,716,021
--------- --------- Total Liabilities 5,291,610 5,696,112
Stockholders' Equity: Common Stock, $.01 par value; 500,000,000
Shares Authorized, 183,014,426 Issued and 180,771,900 Outstanding
at September 30, 2009; 183,014,426 Issued and 180,549,851
Outstanding at December 31, 2008 1,830 1,830 Preferred Stock,
15,000,000 Shares Authorized; None Issued and Outstanding - -
Capital in Excess of Par Value 1,022,816 993,478 Retained Earnings
1,345,112 1,010,902 Other Comprehensive Loss (501,140) (461,900)
Common Stock in Treasury, at Cost - 2,242,526 Shares at September
30, 2009 and 2,464,575 Shares at December 31, 2008 (74,671)
(82,123) ------- ------- Total Consol Energy Inc. Stockholders'
Equity 1,793,947 1,462,187 Noncontrolling Interest 233,380 212,159
------- ------- Total Equity 2,027,327 1,674,346 ----------
---------- TOTAL LIABILITIES AND EQUITY $7,318,937 $7,370,458
========== ========== CONSOL ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) Three Months Ended Nine Months Ended September 30 ,
September 30 , --------------- --------------- 2009 2008 2009 2008
---- ---- ---- ---- Operating Activities: Net Income $93,286
$102,416 $417,096 $299,437 Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities: Depreciation, Depletion
and Amortization 109,965 96,288 323,659 284,791 Stock-based
Compensation 9,090 6,487 30,873 18,911 Gain on the Sale of Assets
(3,245) (8,536) (13,033) (16,586) Amortization of Mineral Leases
1,046 227 3,444 3,467 Deferred Income Taxes 17,019 (12,745) 51,507
56,251 Equity in Earnings of Affiliates (5,688) (1,669) (12,488)
(5,314) Changes in Operating Assets: Accounts Receivable
Securitization - 9,700 - 39,600 Accounts and Notes Receivable
14,658 35,326 115,212 (75,530) Inventories 14,116 (1,321) (82,729)
(12,788) Prepaid Expenses (28,331) (27,435) (9,826) (8,146) Changes
in Other Assets (4,548) 344 799 14,166 Changes in Operating
Liabilities: Accounts Payable (15,587) (6,667) (80,546) 14,391
Other Operating Liabilities (39,842) 18,278 5,275 29,554 Changes in
Other Liabilities (4,617) 2,002 (35,594) 39,741 Other 4,640 570
14,559 1,297 ----- --- ------ ----- Net Cash Provided by Operating
Activities 161,962 213,265 728,208 683,242 ------- ------- -------
------- Investing Activities: Capital Expenditures (192,700)
(303,729) (689,119) (740,006) Net Investment in Equity Affiliates
1,670 211 3,760 (608) Proceeds from Sale of Assets 22,231 1,519
70,415 18,799 ------ ----- ------ ------ Net Cash Used in Investing
Activities (168,799) (301,999) (614,944) (721,815) --------
-------- -------- -------- Financing Activities: Proceeds from
(Payments on) Miscellaneous Borrowings (7,161) (5,302) (16,443)
1,005 Proceeds from (Payments on) Short-Term Borrowings (42,050)
63,500 (147,750) 23,000 Tax Benefit from Stock-Based Compensation
(6) 3,114 391 23,108 Dividends Paid (18,079) (18,329) (54,207)
(54,878) Issuance of Treasury Stock 524 918 1,135 15,074 Purchases
of Common Stock - (54) - (85) Noncontrolling Interest Member
Distribution (2,300) - (2,500) - ------ -- ------ -- Net Cash
Provided by (Used in) Financing Activities (69,072) 43,847
(219,374) 7,224 ------- ------ -------- ----- Net Decrease in Cash
and Cash Equivalents (75,909) (44,887) (106,110) (31,349) Cash and
Cash Equivalents at Beginning of Period 108,311 55,189 138,512
41,651 ------- ------ ------- ------ Cash and Cash Equivalents at
End of Period $32,402 $10,302 $32,402 $10,302 ======= =======
======= ======= CONSOL ENERGY INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF EQUITY (Unaudited) (Dollars in Thousands - except per
share data) ---------------------------------------------- Capital
Other in Compre- Excess Retained hensive Common of Par Earnings
Income Stock Value (Deficit) (Loss) ----- ----- --------- ------
Balance - December 31, 2008 $1,830 $993,478 $1,010,902 $(461,900)
------ -------- ---------- --------- (Unaudited) Net Income - -
396,528 - Treasury Rate Lock (Net of ($38) tax) - - - (62) FASB 158
Long- Term Liability Adjustment (Net of $175 tax) - - - 288 Gas
Cash Flow Hedge (Net of ($31,186) tax) - - - (39,466) - - - -------
Comprehensive Income - - 396,528 (39,240) Issuance of Treasury
Stock - - (8,111) - Issuance of CNX Gas Stock - - - - Tax Benefit
from Stock-Based Compensation - (18) - - Amortization of
Stock-Based Compensation Awards - 25,234 - - Stock-Based
Compensation Awards to CNX Gas - 4,122 - - Net Change in Crown
Drilling Noncontrolling Interest - - - - Dividends ($0.30 per
share) - - (54,207) - ------ ------ ------- ------ Balance -
September 30, 2009 $1,830 $1,022,816 $1,345,112 $(501,140) ======
========== ========== ========= Total Consol Energy, Inc. Stock-
Noncont- Treasury holders' rolling Total Stock Equity Interest
Equity ----- ------ -------- ------ Balance - December 31, 2008
$(82,123) $1,462,187 $212,159 $1,674,346 -------- ----------
-------- ---------- (Unaudited) Net Income - 396,528 20,568 417,096
Treasury Rate Lock (Net of ($38) tax) - (62) - (62) FASB 158 Long-
Term Liability Adjustment (Net of $175 tax) - 288 15 303 Gas Cash
Flow Hedge (Net of ($31,186) tax) - (39,466) (7,897) (47,363) -
------- ------ ------- Comprehensive Income - 357,288 12,686
369,974 Issuance of Treasury Stock 7,452 (659) - (659) Issuance of
CNX Gas Stock - - 148 148 Tax Benefit from Stock-Based Compensation
- (18) (10) (28) Amortization of Stock-Based Compensation Awards -
25,234 15,985 41,219 Stock-Based Compensation Awards to CNX Gas -
4,122 (3,434) 688 Net Change in Crown Drilling Noncontrolling
Interest - - (4,154) (4,154) Dividends ($0.30 per share) - (54,207)
- (54,207) ----- ------- ----- ------- Balance - September 30, 2009
$(74,671) $1,793,947 $233,380 $2,027,327 ======== ==========
======== ========== DATASOURCE: CONSOL Energy Inc. CONTACT: Dan
Zajdel, CONSOL Energy Inc., +1-724-485-4169 Web Site:
http://www.consolenergy.com/
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