0001710366 CONSOL Energy Inc false --12-31 Q1 2021 1,164 1,214 144 933 0.01 0.01 62,500,000 62,500,000 34,371,205 34,371,205 34,031,374 34,031,374 1,164 144 1,214 933 1,109 0 0 0 0 0 0 0 0 150,000 3 2 5 11.00 For the three months ended March 31, 2021 and 2020, the PAMC segment had revenues from the following customers, each comprising over 10% of the Company's total sales: Three Months Ended March 31, 2021 2020 Customer A $ 57,680 $ 38,908 Customer B $ 33,239 $ 104,354 Customer C $ 36,599 $ 35,683 Customer D $ 44,236 * During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is anti-dilutive. Excludes current portion of Finance Lease Obligations of $21,261 and $18,219 at September 30, 2020 and December 31, 2019, respectively. Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy. 00017103662021-01-012021-03-31 xbrli:shares 00017103662021-04-23 thunderdome:item iso4217:USD 0001710366ceix:CoalRevenueMember2021-01-012021-03-31 0001710366ceix:CoalRevenueMember2020-01-012020-03-31 0001710366ceix:TerminalRevenueMember2021-01-012021-03-31 0001710366ceix:TerminalRevenueMember2020-01-012020-03-31 0001710366ceix:FreightRevenueMember2021-01-012021-03-31 0001710366ceix:FreightRevenueMember2020-01-012020-03-31 00017103662020-01-012020-03-31 iso4217:USDxbrli:shares 00017103662021-03-31 00017103662020-12-31 0001710366us-gaap:CommonStockMember2020-12-31 0001710366us-gaap:AdditionalPaidInCapitalMember2020-12-31 0001710366us-gaap:RetainedEarningsMember2020-12-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-31 0001710366us-gaap:CommonStockMember2021-01-012021-03-31 0001710366us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001710366us-gaap:RetainedEarningsMember2021-01-012021-03-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberus-gaap:CommonStockMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberus-gaap:RetainedEarningsMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMember2021-01-012021-03-31 0001710366us-gaap:CommonStockMember2021-03-31 0001710366us-gaap:AdditionalPaidInCapitalMember2021-03-31 0001710366us-gaap:RetainedEarningsMember2021-03-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-31 0001710366us-gaap:CommonStockMember2019-12-31 0001710366us-gaap:AdditionalPaidInCapitalMember2019-12-31 0001710366us-gaap:RetainedEarningsMember2019-12-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-31 0001710366us-gaap:ParentMember2019-12-31 0001710366us-gaap:NoncontrollingInterestMember2019-12-31 00017103662019-12-31 0001710366us-gaap:CommonStockMember2020-01-012020-03-31 0001710366us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-31 0001710366us-gaap:RetainedEarningsMember2020-01-012020-03-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-31 0001710366us-gaap:ParentMember2020-01-012020-03-31 0001710366us-gaap:NoncontrollingInterestMember2020-01-012020-03-31 0001710366us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-012020-03-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommonStockMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ParentMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:NoncontrollingInterestMember2019-12-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-31 0001710366us-gaap:CommonStockMember2020-03-31 0001710366us-gaap:AdditionalPaidInCapitalMember2020-03-31 0001710366us-gaap:RetainedEarningsMember2020-03-31 0001710366us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-31 0001710366us-gaap:ParentMember2020-03-31 0001710366us-gaap:NoncontrollingInterestMember2020-03-31 00017103662020-03-31 0001710366ceix:TermLoanAFacilityMember2021-01-012021-03-31 0001710366ceix:TermLoanAFacilityMember2020-01-012020-03-31 0001710366ceix:TermLoanBFacilityMember2021-01-012021-03-31 0001710366ceix:TermLoanBFacilityMember2020-01-012020-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Member2021-01-012021-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Member2020-01-012020-03-31 0001710366ceix:OtherAssetBackedFinancingMember2021-01-012021-03-31 0001710366ceix:OtherAssetBackedFinancingMember2020-01-012020-03-31 0001710366us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-31 0001710366us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-31 0001710366us-gaap:PerformanceSharesMember2021-01-012021-03-31 0001710366us-gaap:PerformanceSharesMember2020-01-012020-03-31 0001710366ceix:ConsolCoalResourcesLPMember2020-10-222020-10-22 xbrli:pure 0001710366ceix:CCRMemberceix:PublicUnitholdersMember2020-10-22 0001710366ceix:CCRMemberceix:ConsolCoalResourcesLPMember2020-10-22 0001710366ceix:ConsolCoalResourcesLPMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2020-10-222020-10-22 0001710366ceix:SettlementTransactionWithMurrayEnergyMember2021-03-31 0001710366ceix:SettlementTransactionWithMurrayEnergyMember2020-12-31 0001710366us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-03-31 0001710366us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001710366us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-03-31 0001710366us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001710366ceix:CoalWorkersPneumoconiosisMember2021-01-012021-03-31 0001710366ceix:CoalWorkersPneumoconiosisMember2020-01-012020-03-31 0001710366ceix:WorkersCompensationMember2021-01-012021-03-31 0001710366ceix:WorkersCompensationMember2020-01-012020-03-31 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-01-01 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-01-012020-01-01 0001710366us-gaap:TradeAccountsReceivableMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-01-01 0001710366us-gaap:TradeAccountsReceivableMember2020-01-01 0001710366us-gaap:TradeAccountsReceivableMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-01 0001710366ceix:OtherReceivablesMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-01-01 0001710366ceix:OtherReceivablesMember2020-01-01 0001710366ceix:OtherReceivablesMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-01 0001710366us-gaap:OtherAssetsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-01-01 0001710366us-gaap:OtherAssetsMember2020-01-01 0001710366us-gaap:OtherAssetsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-01 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-01-01 00017103662020-01-01 0001710366srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-01-01 0001710366us-gaap:TradeAccountsReceivableMember2020-12-31 0001710366ceix:OtherReceivablesMember2020-12-31 0001710366us-gaap:TradeAccountsReceivableMember2021-01-012021-03-31 0001710366ceix:OtherReceivablesMember2021-01-012021-03-31 0001710366us-gaap:TradeAccountsReceivableMember2021-03-31 0001710366ceix:OtherReceivablesMember2021-03-31 0001710366ceix:AccountsReceivableSecuritizationFacilityMemberus-gaap:LineOfCreditMember2021-03-31 0001710366ceix:AccountsReceivableSecuritizationFacilityMembersrt:MinimumMemberus-gaap:LineOfCreditMember2021-01-012021-03-31 0001710366ceix:AccountsReceivableSecuritizationFacilityMembersrt:MaximumMemberus-gaap:LineOfCreditMember2021-01-012021-03-31 0001710366ceix:AccountsReceivableSecuritizationFacilityMemberus-gaap:LineOfCreditMember2021-01-012021-03-31 0001710366ceix:AccountsReceivableSecuritizationFacilityMemberus-gaap:LineOfCreditMember2020-12-31 0001710366ceix:CoalAndOtherPlantAndEquipmentMember2021-03-31 0001710366ceix:CoalAndOtherPlantAndEquipmentMember2020-12-31 0001710366us-gaap:MiningPropertiesAndMineralRightsMember2021-03-31 0001710366us-gaap:MiningPropertiesAndMineralRightsMember2020-12-31 0001710366ceix:AirshaftsMember2021-03-31 0001710366ceix:AirshaftsMember2020-12-31 0001710366us-gaap:MineDevelopmentMember2021-03-31 0001710366us-gaap:MineDevelopmentMember2020-12-31 0001710366ceix:CoalAdvanceMiningRoyaltiesMember2021-03-31 0001710366ceix:CoalAdvanceMiningRoyaltiesMember2020-12-31 0001710366ceix:OtherAccruedLiabilitiesMember2021-03-31 0001710366ceix:OtherAccruedLiabilitiesMember2020-12-31 0001710366ceix:TermLoanBFacilityMemberus-gaap:LoansPayableMember2021-03-31 0001710366ceix:TermLoanBFacilityMemberus-gaap:LoansPayableMember2020-12-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2021-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2020-12-31 0001710366ceix:MedcoRevenueBondsInSeriesDueSeptember2025At575Member2021-03-31 0001710366ceix:MedcoRevenueBondsInSeriesDueSeptember2025At575Member2020-12-31 0001710366ceix:TermLoanAFacilityMember2021-03-31 0001710366ceix:TermLoanAFacilityMember2020-12-31 0001710366ceix:OtherAssetBackedFinancingMember2021-03-31 0001710366ceix:OtherAssetBackedFinancingMember2020-12-31 0001710366ceix:AdvanceRoyaltyCommitmentsMember2021-03-31 0001710366ceix:AdvanceRoyaltyCommitmentsMember2020-12-31 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LoansPayableMember2017-11-30 0001710366ceix:TheTLAFacilityMemberus-gaap:LoansPayableMember2017-11-30 0001710366ceix:TheTLBFacilityMemberus-gaap:LineOfCreditMember2017-11-30 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2019-03-28 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LoansPayableMember2019-03-282019-03-28 0001710366us-gaap:RevolvingCreditFacilityMemberceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:LoansPayableMember2020-01-012020-09-30 0001710366us-gaap:RevolvingCreditFacilityMemberceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:LoansPayableMembersrt:MaximumMember2020-01-012020-09-30 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:LoansPayableMember2020-09-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMember2020-09-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMember2020-09-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:ScenarioForecastMember2021-06-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMembersrt:ScenarioForecastMember2021-06-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:ScenarioForecastMember2021-12-31 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMembersrt:ScenarioForecastMember2021-12-31 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMembersrt:ScenarioForecastMember2022-06-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMembersrt:ScenarioForecastMember2022-06-30 0001710366ceix:RevolvingCreditFacilityAndTLAFacilityMemberus-gaap:LineOfCreditMember2021-03-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMember2021-03-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMembersrt:MinimumMember2021-01-012021-03-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMembersrt:MaximumMember2021-01-012021-03-31 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-03-31 0001710366us-gaap:RevolvingCreditFacilityMember2012-12-31 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2020-12-31 0001710366us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2017-11-30 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2017-11-30 0001710366srt:NonGuarantorSubsidiariesMember2021-03-31 0001710366srt:NonGuarantorSubsidiariesMember2020-12-31 0001710366srt:NonGuarantorSubsidiariesMember2021-01-012021-03-31 0001710366srt:NonGuarantorSubsidiariesMember2020-01-012020-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2021-01-012021-03-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMember2021-01-012021-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2020-01-012020-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2020-03-31 0001710366ceix:OtherAssetbackedFinancingMaturingDecember2020Memberus-gaap:SecuredDebtMember2021-03-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMember2020-12-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMembersrt:ScenarioForecastMember2021-12-31 0001710366ceix:TheTLBFacilityMemberus-gaap:LoansPayableMembersrt:ScenarioForecastMember2022-12-31 0001710366srt:ScenarioForecastMember2021-12-31 00017103662020-01-012021-03-31 0001710366ceix:FitzwaterLitigationMemberus-gaap:PendingLitigationMember2017-04-242017-04-24 0001710366ceix:CaseyLitigationMemberus-gaap:PendingLitigationMember2017-08-232017-08-23 0001710366ceix:UnitedMineWorkersOfAmerica1992BenefitPlanLitigationMemberus-gaap:PendingLitigationMembersrt:MinimumMember2021-03-31 0001710366ceix:UnitedMineWorkersOfAmerica1992BenefitPlanLitigationMemberus-gaap:PendingLitigationMembersrt:MaximumMember2021-03-31 0001710366us-gaap:StandbyLettersOfCreditMemberceix:EmployeeRelatedCommitmentMember2021-03-31 0001710366us-gaap:StandbyLettersOfCreditMemberceix:EnvironmentalCommitmentMember2021-03-31 0001710366us-gaap:StandbyLettersOfCreditMemberceix:OtherCommitmentMember2021-03-31 0001710366us-gaap:StandbyLettersOfCreditMember2021-03-31 0001710366us-gaap:SuretyBondMemberceix:EmployeeRelatedCommitmentMember2021-03-31 0001710366us-gaap:SuretyBondMemberceix:EnvironmentalCommitmentMember2021-03-31 0001710366us-gaap:SuretyBondMemberceix:OtherCommitmentMember2021-03-31 0001710366us-gaap:SuretyBondMember2021-03-31 0001710366ceix:OtherGuaranteeObligationsMemberceix:OtherCommitmentMember2021-03-31 0001710366us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-31 0001710366us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-31 0001710366us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-31 0001710366us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2012-12-31 0001710366us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2012-12-31 0001710366us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2012-12-31 0001710366us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-03-31 0001710366us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-03-31 0001710366us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-31 0001710366us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberceix:ConsolMarineTerminalMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberus-gaap:AllOtherSegmentsMember2021-01-012021-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:CoalRevenueMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberceix:ConsolMarineTerminalMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberus-gaap:AllOtherSegmentsMember2021-01-012021-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:TerminalRevenueMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberceix:ConsolMarineTerminalMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberus-gaap:AllOtherSegmentsMember2021-01-012021-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:FreightRevenueMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:ConsolMarineTerminalMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-01-012021-03-31 0001710366us-gaap:IntersegmentEliminationMember2021-01-012021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:PennsylvaniaMiningComplexMember2021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:ConsolMarineTerminalMember2021-03-31 0001710366us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-03-31 0001710366us-gaap:IntersegmentEliminationMember2021-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberceix:ConsolMarineTerminalMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:CoalRevenueMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:CoalRevenueMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberceix:ConsolMarineTerminalMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:TerminalRevenueMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:TerminalRevenueMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberceix:ConsolMarineTerminalMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:FreightRevenueMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-31 0001710366us-gaap:IntersegmentEliminationMemberceix:FreightRevenueMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:ConsolMarineTerminalMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-31 0001710366us-gaap:IntersegmentEliminationMember2020-01-012020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:PennsylvaniaMiningComplexMember2020-03-31 0001710366us-gaap:OperatingSegmentsMemberceix:ConsolMarineTerminalMember2020-03-31 0001710366us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-03-31 0001710366us-gaap:IntersegmentEliminationMember2020-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerAMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerAMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerBMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerBMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerCMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerCMemberceix:PennsylvaniaMiningComplexMember2020-01-012020-03-31 0001710366us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberceix:CustomerDMemberceix:PennsylvaniaMiningComplexMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMember2021-03-31 0001710366ceix:ConsolCoalResourcesLPMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberceix:AffiliatedCompanyCreditAgreementMembersrt:AffiliatedEntityMember2021-01-012021-03-31 0001710366ceix:ConsolCoalResourcesLPMemberceix:AffiliatedCompanyCreditAgreementMembersrt:AffiliatedEntityMember2021-03-31 0001710366ceix:OperatingAndOtherCostsMember2021-01-012021-03-31 0001710366us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-31 0001710366ceix:SeniorSecuredSecondLienNotesDue2025Memberus-gaap:SeniorNotesMember2017-12-31 0001710366ceix:ConsolCoalResourcesLPMember2020-05-31 0001710366ceix:TaxexemptSolidWasteDisposalRevenueBondsMemberus-gaap:SubsequentEventMember2021-04-13 utr:Y 0001710366ceix:TaxexemptSolidWasteDisposalRevenueBondsMemberus-gaap:SubsequentEventMember2021-04-132021-04-13 0001710366us-gaap:SubsequentEventMember2021-04-28 0001710366us-gaap:SubsequentEventMember2021-05-04
 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

 

FORM 10-Q

__________________________________________________

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the quarterly period ended March 31, 2021

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission file number: 001-38147

__________________________________________________

CONSOL Energy Inc. 

(Exact name of registrant as specified in its charter)

 

Delaware

 

82-1954058

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1000 CONSOL Energy Drive, Suite 100

Canonsburg, PA 15317-6506

(724) 416-8300

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________________________________________

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

CEIX

New York Stock Exchange

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒    No  ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☒    No   ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  ☐    Accelerated filer  ☒    Non-accelerated filer  ☐    Smaller reporting company      Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No  ☒

 

CONSOL Energy Inc. had 34,439,010 shares of common stock, $0.01 par value, outstanding at April 23, 2021.

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

Part I. Financial Information

Page

 

 

 

Item 1.

Financial Statements

 

 

Consolidated Statements of Income for the three months ended March 31, 2021 and 2020

4

 

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020

5

 

Consolidated Balance Sheets at March 31, 2021 and December 31, 2020

6

 

Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2021 and 2020

8

 

Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020

9

 

Notes to Consolidated Financial Statements

10

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

27

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

 

 

 

Item 4.

Controls and Procedures

46

 

 

 

 

Part II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

46

 

 

 

Item 1A.

Risk Factors

46

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

47

 

 

 

Item 3. Defaults Upon Senior Securities 47
     

Item 4.

Mine Safety Disclosures

47

     
Item 5. Other Information 47

 

 

 

Item 6.

Exhibits

48

 

 

 

 

Signatures

49

 

 

2

  

 

 

IMPORTANT DEFINITIONS REFERENCED IN THIS QUARTERLY REPORT

Unless the context otherwise requires:

 

 

“CONSOL Energy,” “we,” “our,” “us,” “our Company” and “the Company” refer to CONSOL Energy Inc. and its subsidiaries;

 

 

“Btu” means one British Thermal unit;

 

  “CCR Merger” refers to the merger under that certain Agreement and Plan of Merger, dated as of October 22, 2020, among the Company, Transformer LP Holdings Inc. (“Holdings”), a wholly-owned subsidiary of the Company, Transformer Merger Sub LLC, a wholly-owned subsidiary of Holdings (“Merger Sub”), the Partnership and CONSOL Coal Resources GP LLC, the general partner of the Partnership, pursuant to which Merger Sub merged with and into the Partnership, with the Partnership surviving as an indirect, wholly-owned subsidiary of the Company, which merger closed on December 30, 2020;
     
 

“Coal Business” refers to all of our interest in the Pennsylvania Mining Complex (PAMC) and certain related coal assets, including: (i) our 100% interest in the Partnership, which owns a 25% undivided interest in the PAMC; (ii) the CONSOL Marine Terminal; (iii) development of the Itmann Mine; and (iv) undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and Illinois basins and certain related coal assets and liabilities;

 

 

“CONSOL Marine Terminal” refers to the Company's terminal operations located at the Port of Baltimore;

 

 

“former parent” refers to CNX Resources Corporation and its consolidated subsidiaries;

 

 

“General Partner” refers to CONSOL Coal Resources GP LLC, a Delaware limited liability company and the general partner of the Partnership;

 

 

“Greenfield Reserves” means those undeveloped reserves owned by the Company in the Northern Appalachian, Central Appalachian and Illinois basins that are not associated with the Pennsylvania Mining Complex or the Itmann Mine project;

 

 

“Partnership,” “CCR” or “CONSOL Coal Resources” refers to a Delaware limited partnership that holds a 25% undivided interest in, and is the sole operator of, the Pennsylvania Mining Complex;

 

 

“Pennsylvania Mining Complex” or “PAMC” refers to the Bailey, Enlow Fork and Harvey coal mines, coal reserves and related assets and operations located primarily in southwestern Pennsylvania; and

 

 

“separation and distribution” refers to the separation of the Coal Business from our former parent’s other businesses on November 28, 2017 and the pro rata distribution of the Company's issued and outstanding shares of common stock to its former parent's stockholders on November 29, 2017, and the creation, as a result of the distribution, of an independent, publicly-traded company (the Company) to hold the assets and liabilities associated with the Coal Business after the distribution.

 

3

  

 

PART I : FINANCIAL INFORMATION

 

ITEM 1.    FINANCIAL STATEMENTS

 

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(unaudited)

 

  

Three Months Ended

 
  

March 31,

 

Revenue and Other Income:

 

2021

  

2020

 

Coal Revenue

 $285,535  $255,452 

Terminal Revenue

  18,212   16,501 

Freight Revenue

  27,013   3,147 

Miscellaneous Other Income

  3,189   16,170 

Gain (Loss) on Sale of Assets

  8,202   (14)

Total Revenue and Other Income

  342,151   291,256 

Costs and Expenses:

        

Operating and Other Costs

  185,110   212,275 

Depreciation, Depletion and Amortization

  59,897   54,943 

Freight Expense

  27,013   3,147 

Selling, General and Administrative Costs

  23,964   17,670 

Gain on Debt Extinguishment

  (683)  (16,833)

Interest Expense, net

  15,261   15,671 

Total Costs and Expenses

  310,562   286,873 

Earnings Before Income Tax

  31,589   4,383 

Income Tax Expense

  5,185   1,908 

Net Income

  26,404   2,475 

Less: Net Income Attributable to Noncontrolling Interest

     108 

Net Income Attributable to CONSOL Energy Inc. Shareholders

 $26,404  $2,367 
         

Earnings per Share:

        

Total Basic Earnings per Share

 $0.77  $0.09 

Total Dilutive Earnings per Share

 $0.75  $0.09 

 

The accompanying notes are an integral part of these consolidated financial statements.

  

4

  

 

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(unaudited)

 

  

Three Months Ended

 
  

March 31,

 
  

2021

  

2020

 

Net Income

 $26,404  $2,475 
         

Other Comprehensive Income:

        

Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($1,164),($1,214))

  3,360   3,624 

Unrealized Gain (Loss) on Cash Flow Hedges (Net of tax: ($144), $933)

  414   (2,773)

Other Comprehensive Income

  3,774   851 
         

Comprehensive Income

 $30,178  $3,326 
         

Less: Comprehensive Income Attributable to Noncontrolling Interest

     123 
         

Comprehensive Income Attributable to CONSOL Energy Inc. Shareholders

 $30,178  $3,203 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5

  

 

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

  

(Unaudited)

     
  

March 31,

  

December 31,

 
  

2021

  

2020

 

ASSETS

        

Current Assets:

        

Cash and Cash Equivalents

 $91,174  $50,850 
Restricted Cash  303    

Accounts and Notes Receivable

        

Trade Receivables, net

  124,629   118,289 

Other Receivables, net

  41,602   42,157 

Inventories

  55,209   56,200 

Prepaid Expenses and Other Assets

  23,825   25,445 

Total Current Assets

  336,742   292,941 

Property, Plant and Equipment:

        

Property, Plant and Equipment

  5,131,739   5,143,696 

Less - Accumulated Depreciation, Depletion and Amortization

  3,117,651   3,094,634 

Total Property, Plant and Equipment—Net

  2,014,088   2,049,062 

Other Assets:

        

Deferred Income Taxes

  62,261   68,821 

Right of Use Asset - Operating Leases

  48,337   53,436 

Other, net

  59,132   59,106 

Total Other Assets

  169,730   181,363 

TOTAL ASSETS

 $2,520,560  $2,523,366 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6

  

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

  

(Unaudited)

     
  

March 31,

  

December 31,

 
  

2021

  

2020

 

LIABILITIES AND EQUITY

        

Current Liabilities:

        

Accounts Payable

 $75,382  $71,229 

Current Portion of Long-Term Debt

  50,057   53,846 

Other Accrued Liabilities

  245,755   243,395 

Total Current Liabilities

  371,194   368,470 

Long-Term Debt:

        

Long-Term Debt

  550,444   566,858 

Finance Lease Obligations

  34,877   36,203 

Total Long-Term Debt

  585,321   603,061 

Deferred Credits and Other Liabilities:

        

Postretirement Benefits Other Than Pensions

  383,457   387,637 

Pneumoconiosis Benefits

  228,687   229,720 

Asset Retirement Obligations

  227,922   228,182 

Workers’ Compensation

  63,414   64,390 

Salary Retirement

  28,527   35,359 

Operating Lease Liability

  32,434   35,655 

Other

  16,539   17,373 

Total Deferred Credits and Other Liabilities

  980,980   998,316 

TOTAL LIABILITIES

  1,937,495   1,969,847 
         

Stockholders' Equity:

        

Common Stock, $0.01 Par Value; 62,500,000 Shares Authorized, 34,371,205 Shares Issued and Outstanding at March 31, 2021; 34,031,374 Shares Issued and Outstanding at December 31, 2020

  344   340 

Capital in Excess of Par Value

  642,054   642,887 

Retained Earnings

  273,254   246,850 

Accumulated Other Comprehensive Loss

  (332,587)  (336,558)

TOTAL EQUITY

  583,065   553,519 

TOTAL LIABILITIES AND EQUITY

 $2,520,560  $2,523,366 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7

  

 

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)

 

  

Common Stock

  

Capital in Excess of Par Value

  

Retained Earnings

  

Accumulated Other Comprehensive (Loss) Income

  

Total Equity

 

December 31, 2020

 $340  $642,887  $246,850  $(336,558) $553,519 

(Unaudited)

                    

Net Income

        26,404      26,404 

Actuarially Determined Long-Term Liability Adjustments (Net of $1,164 Tax)

           3,360   3,360 

Interest Rate Hedge (Net of $144 Tax)

           414   414 

Comprehensive Income

        26,404   3,774   30,178 

Issuance of Common Stock

  4   (4)         

Amortization of Stock-Based Compensation Awards

     1,509         1,509 

Shares Withheld for Taxes

     (2,072)        (2,072)

CCR Merger

     (266)     197   (69)

March 31, 2021

 $344  $642,054  $273,254  $(332,587) $583,065 

 

 

  

Common Stock

  

Capital in Excess of Par Value

  

Retained Earnings

  

Accumulated Other Comprehensive (Loss) Income

  

Total CONSOL Energy Inc. Stockholders' Equity

  

Noncontrolling Interest

  

Total Equity

 

December 31, 2019

 $259  $523,762  $259,903  $(348,725) $435,199  $137,196  $572,395 

(Unaudited)

                            

Net Income

        2,367      2,367   108   2,475 

Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax)

           3,609   3,609   15   3,624 
Interest Rate Hedge (Net of ($933) Tax)           (2,773)  (2,773)     (2,773)

Comprehensive Income

        2,367   836   3,203   123   3,326 
Adoption of ASU 2016-13 (Net of ($1,109) Tax)        (3,298)     (3,298)     (3,298)

Issuance of Common Stock

  1   (1)               

Amortization of Stock-Based Compensation Awards

     4,856         4,856   158   5,014 

Shares/Units Withheld for Taxes

     (555)        (555)  (217)  (772)

Distributions to Noncontrolling Interest

                 (5,575)  (5,575)

March 31, 2020

 $260  $528,062  $258,972  $(347,889) $439,405  $131,685  $571,090 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

8

  

 

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

  

Three Months Ended

 
  

March 31,

 
  

2021

  

2020

 

Cash Flows from Operating Activities:

        

Net Income

 $26,404  $2,475 

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

        

Depreciation, Depletion and Amortization

  59,897   54,943 

(Gain) Loss on Sale of Assets

  (8,202)  14 

Stock/Unit-Based Compensation

  1,509   5,014 

Amortization of Debt Issuance Costs

  2,140   1,444 

Gain on Debt Extinguishment

  (683)  (16,833)

Deferred Income Taxes

  5,185   1,908 

Equity in Earnings of Affiliates

  206   315 

Changes in Operating Assets:

        

Accounts and Notes Receivable

  (5,764)  23,064 

Inventories

  475   (4,507)

Prepaid Expenses and Other Assets

  1,620   4,845 

Changes in Other Assets

  (1,459)  191 

Changes in Operating Liabilities:

        

Accounts Payable

  (73)  (15,726)

Other Operating Liabilities

  9,242   3,899 

Changes in Other Liabilities

  (12,501)  (9,646)

Net Cash Provided by Operating Activities

  77,996   51,400 

Cash Flows from Investing Activities:

        

Capital Expenditures

  (13,800)  (27,178)

Proceeds from Sales of Assets

  8,488    
Other Investing Activity  (182)   

Net Cash Used in Investing Activities

  (5,494)  (27,178)

Cash Flows from Financing Activities:

        

Proceeds from Finance Lease Obligations

     16,293 

Payments on Finance Lease Obligations

  (8,498)  (4,899)

Payments on Term Loan A

  (6,250)  (3,750)

Payments on Term Loan B

  (5,536)  (688)

Payments on Second Lien Notes

  (9,338)  (25,480)

Payments on Asset-Backed Financing

  (181)  (174)

Distributions to Noncontrolling Interest

     (5,575)

Shares/Units Withheld for Taxes

  (2,072)  (772)

Debt-Related Financing Fees

     (643)

Net Cash Used in Financing Activities

  (31,875)  (25,688)

Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash

  40,627   (1,466)

Cash and Cash Equivalents and Restricted Cash at Beginning of Period

  50,850   80,293 

Cash and Cash Equivalents and Restricted Cash at End of Period

 $91,477  $78,827 
         

Non-Cash Investing and Financing Activities:

        

Finance Lease

 $8,226  $7,023 

Other Equipment Financing

 $  $9,129 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

9

  

CONSOL ENERGY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in thousands, except per share data)

 

NOTE 1—BASIS OF PRESENTATION:

 

Basis of Presentation

 

The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for future periods.

 

The Consolidated Balance Sheet at December 31, 2020 has been derived from the Audited Consolidated Financial Statements at that date but does not include all disclosures required by GAAP. This Form 10-Q report should be read in conjunction with CONSOL Energy Inc.'s Annual Report on Form 10-K for the year ended December 31, 2020.

 

Basis of Consolidation

 

The Consolidated Financial Statements include the accounts of CONSOL Energy Inc. and its wholly-owned and majority-owned and/or controlled subsidiaries. The portion of these entities that is not owned by the Company is presented as non-controlling interest. All significant intercompany transactions and accounts have been eliminated in consolidation.

 

Recent Accounting Pronouncements

 

In January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-01 - Reference Rate Reform (Topic 848) to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. CONSOL Energy adopted this guidance during the three months ended March 31, 2021, and there was no material impact on the Company's financial statements.

 

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. In response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This Update also provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. CONSOL Energy adopted this guidance during the three months ended March 31, 2021, and there was no material impact on the Company's financial statements.

 

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this Update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. The amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. CONSOL Energy adopted this guidance during the three months ended March 31, 2021, and there was no material impact on the Company's financial statements.

 

10

 

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740) to reduce the complexity of accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. The amendments in Update 2019-12 removed the following exceptions: (1) the exception to the incremental approach for intra-period tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in Update 2019-12 also simplified the accounting for income taxes in the areas of franchise tax, step up in the tax basis of goodwill associated with a business combination, allocation of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, and presentation of the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Update added minor codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. These changes are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. CONSOL Energy adopted this guidance during the three months ended March 31, 2021, and there was no material impact on the Company's financial statements.

 

Earnings per Share

 

Basic earnings per share are computed by dividing net income attributable to CONSOL Energy Inc. shareholders by the weighted average number of shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share, except that the weighted average number of shares outstanding is increased to include additional shares from restricted stock units and performance share units, if dilutive. The number of additional shares is calculated by assuming that outstanding restricted stock units and performance share units were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period. 

 

The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be anti-dilutive:

 

  

Three Months Ended

 
  

March 31,

 
  

2021

  

2020

 

Anti-Dilutive Restricted Stock Units

  61,650   141,279 

Anti-Dilutive Performance Share Units

      
   61,650   141,279 

 

The computations for basic and dilutive earnings per share are as follows:

 

  

Three Months Ended

 

Dollars in thousands, except per share data

 

March 31,

 
  

2021

  

2020

 

Numerator:

        

Net Income

 $26,404  $2,475 

Less: Net Income Attributable to Noncontrolling Interest

     108 

Net Income Attributable to CONSOL Energy Inc. Shareholders

 $26,404  $2,367 
         

Denominator:

        

Weighted-average shares of common stock outstanding

  34,206,632   25,987,155 

Effect of dilutive shares

  837,450   265,056 

Weighted-average diluted shares of common stock outstanding

  35,044,082   26,252,211 
         

Earnings per Share:

        

Basic

 $0.77  $0.09 

Dilutive

 $0.75  $0.09 

 

As of March 31, 2021, CONSOL Energy has 500,000 shares of preferred stock, none of which are issued or outstanding.

 

Reclassifications

 

During the year ended December 31, 2020, the Company added the CONSOL Marine Terminal to its reportable segments disclosed in Note 16 - Segment Information. As a result, certain reclassifications of 2020 segment information have been made to conform to the 2021 presentation. These reclassifications had no effect on previously reported total assets, net income, stockholders' equity or cash flows from operating activities.

 

 

11

  
 

NOTE 2MAJOR TRANSACTIONS:

 

Merger with CONSOL Coal Resources LP

 

On October 22, 2020, CONSOL Energy, the Partnership, the General Partner, a wholly-owned subsidiary of CONSOL Energy, and Merger Sub entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which Merger Sub merged with and into the Partnership, with the Partnership surviving as an indirect, wholly-owned subsidiary of CONSOL Energy (the “Merger”). On December 30, 2020, the Merger was completed and CONSOL Energy issued 7,967,690 shares of common stock to acquire the 10,912,138 common units of CCR not owned by CONSOL Energy prior to the Merger at a fixed exchange ratio of 0.73 shares of CONSOL Energy common stock for each CCR unit, for total implied consideration of $51,710. As a result of the Merger, CCR's common units are no longer publicly traded.

 

Except for the Partnership's incentive distribution rights, which were automatically canceled immediately prior to the effective time of the Merger for no consideration in accordance with CCR's partnership agreement, the interests in CCR owned by CONSOL Energy and its subsidiaries remain outstanding as limited partner interests in the surviving entity. The General Partner will continue to own the non-economic general partner interest in the surviving entity.

 

Since CONSOL Energy controlled CCR prior to the Merger and continues to control CCR after the Merger, CONSOL Energy accounted for the change in its ownership interest in CCR as an equity transaction, which was reflected as a reduction of noncontrolling interest with corresponding increases to common stock and capital in excess of par value. No gain or loss was recognized in CONSOL Energy's Consolidated Statements of Income as a result of the Merger. The tax effects of the Merger were reported as adjustments to deferred income taxes and capital in excess of par value.

 

Prior to the effective date of the Merger, public unitholders held a 39.3% equity interest in CCR's outstanding common units and CONSOL Energy owned the remaining 60.7% equity interest. The earnings of CCR that were attributed to its common units held by the public prior to the Merger are reflected in Net Income Attributable to Noncontrolling Interest in the Consolidated Statements of Income. 

 

The Company incurred $9,822 of transaction costs directly attributable to the Merger during the year ended December 31, 2020, including financial advisory, legal service and other professional fees, which were recorded to Selling, General and Administrative Costs in the Consolidated Statements of Income.

 

Settlement Transaction with Murray Energy

 

On September 16, 2020, CONSOL entered into a settlement transaction with (i) Murray Energy Holdings Co., Murray Energy Corporation, and their direct and indirect subsidiaries (such entities that are debtors in possession in Murray Energy Holdings Co.’s jointly administered Chapter 11 cases) and (ii) ACNR Holdings, Inc. to fully and finally resolve the disputes raised in the litigation captioned CONSOL Energy Inc. v Murray Energy Holdings Co., et al., Adversary Case 2:20-ap-02036, arising out of Murray Energy Holdings Co.'s bankruptcy proceedings and any and all other disputes, controversies, or causes of action between and among them. The underlying agreements and compromises, which have been memorialized in definitive documentation, were treated as a single, integrated transaction. As of March 31, 2021, this single, integrated transaction resulted in $4,895 of Other Receivables, net, and $22,766 of Other Assets, net, included in the Consolidated Balance Sheets. As of December 31, 2020, this single, integrated transaction resulted in $4,867 of Other Receivables, net, and $22,055 of Other Assets, net, included in the Consolidated Balance Sheets. See Note 14 - Commitments and Contingent Liabilities with respect to additional information relating to certain liabilities of the Company under the Coal Act (as defined below).

 

12

  
 

NOTE 3—REVENUE:

 

The following table disaggregates CONSOL Energy's revenue from contracts with customers to depict how the nature, amount, timing and uncertainty of the Company's revenues and cash flows are affected by economic factors:

 

  

Three Months Ended

 
  

March 31, 2021

  

March 31, 2020

 

Coal Revenue

 $285,535  $255,452 

Terminal Revenue

  18,212   16,501 

Freight Revenue

  27,013   3,147 

Total Revenue from Contracts with Customers

 $330,760  $275,100 

 

Coal Revenue

 

CONSOL Energy's coal revenue is generally recognized when title passes to the customer and the price is fixed and determinable. Generally, title passes when coal is loaded at the central preparation facility, the CONSOL Marine Terminal or, on occasion, other destinations. The Company's coal contract revenue per ton is fixed and determinable and adjusted for nominal quality adjustments. Some coal contracts also contain positive electric power price-related adjustments, which represent market-driven price adjustments, wherein no additional value is exchanged, in addition to a fixed base price per ton. The Company’s coal contracts generally do not allow for retroactive adjustments to pricing after title to the coal has passed. The Company's coal supply contracts and other sales and operating revenue contracts vary in length from short-term to long-term contracts and do not typically have significant financing components.

 

The estimated transaction price from each of the Company's contracts is based on the total amount of consideration to which the Company expects to be entitled under the contract. Included in the transaction price for certain coal supply contracts is the impact of variable consideration, including quality price adjustments, handling services, per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments. The estimated transaction price for each contract is allocated to the Company's performance obligations based on relative stand-alone selling prices determined at contract inception. The Company has determined that each ton of coal represents a separate and distinct performance obligation. Some of the Company's contracts span multiple years and have annual pricing modifications, based upon market-driven or inflationary adjustments, where no additional value is exchanged. Management believes that the invoice price is the most appropriate rate at which to recognize revenue.

 

While CONSOL Energy does, from time to time, experience costs of obtaining coal customer contracts with amortization periods greater than one year, those costs are generally immaterial to the Company's net income. At March 31, 2021 and December 31, 2020, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 2021 and 2020, the Company has not recognized any amortization of previously existing capitalized costs of obtaining customer contracts. Further, the Company has not recognized any coal revenue in the current period that is not a result of current period performance.

 

Terminal Revenue

 

Terminal revenues are attributable to the Company's CONSOL Marine Terminal and include revenues earned from providing receipt and unloading of coal from rail cars, transporting coal from the receipt point to temporary storage or stockpile facilities located at the Terminal, stockpiling, blending, weighing, sampling, redelivery, and loading of coal onto vessels. Revenues for these services are earned on a ratable basis, and performance obligations are considered fulfilled as the services are performed.

    

The CONSOL Marine Terminal does not normally experience material costs of obtaining customer contracts with amortization periods greater than one year. At March 31, 2021 and December 31, 2020, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 2021 and 2020, the Company has not recognized any amortization of previously existing capitalized costs of obtaining Terminal customer contracts. Further, the Company has not recognized any revenue in the current period that is not a result of current period performance.

 

Freight Revenue

 

Some of CONSOL Energy's coal contracts require that the Company sell its coal at locations other than its central preparation plant. The cost to transport the Company's coal to the ultimate sales point is passed through to the Company's customers and CONSOL Energy recognizes the freight revenue equal to the transportation costs when title of the coal passes to the customer.

 

Contract Balances

 

Contract assets are recorded separately from trade receivables in the Company's Consolidated Balance Sheets and are reclassified to trade receivables as title passes to the customer and the Company's right to consideration becomes unconditional. Payments for coal shipments are typically due within two to four weeks from the invoice date. CONSOL Energy typically does not have material contract assets that are stated separately from trade receivables since the Company's performance obligations are satisfied as control of the goods or services passes to the customer, thereby granting the Company an unconditional right to receive consideration. Contract liabilities relate to consideration received in advance of the satisfaction of the Company's performance obligations. Contract liabilities are recognized as revenue at the point in time when control of the good passes to the customer, or over time when services are provided.

 

13

  
 

NOTE 4—MISCELLANEOUS OTHER INCOME:

 

  

Three Months Ended March 31,

 
  

2021

  

2020

 

Royalty Income - Non-Operated Coal

 $1,601  $4,504 

Interest Income

  858   244 

Rental Income

  215   497 

Contract Buyout

     10,825 

Other

  515   100 

Miscellaneous Other Income

 $3,189  $16,170 

 

Contract buyout income earned during the three months ended March 31, 2020 was primarily the result of partial contract buyouts that involved negotiations to reduce coal quantities several customers were otherwise obligated to purchase under contracts in exchange for payment of certain fees to the Company, and do not impact forward contract terms.

  

 

NOTE 5—COMPONENTS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

 

The components of Net Periodic Benefit (Credit) Cost are as follows:

 

  

Pension Benefits

  

Other Post-Employment Benefits

 
  

Three Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 
  

2021

  

2020

  

2021

  

2020

 

Service Cost

 $279  $296  $  $ 

Interest Cost

  3,550   5,044   1,818   3,199 

Expected Return on Plan Assets

  (10,542)  (10,455)      

Amortization of Prior Service Credits

        (601)  (601)

Amortization of Actuarial Loss

  1,367   1,730   1,629   2,319 

Net Periodic Benefit (Credit) Cost

 $(5,346) $(3,385) $2,846  $4,917 

 

(Credits) expenses related to pension and other post-employment benefits are reflected in Operating and Other Costs in the Consolidated Statements of Income.

  

 

NOTE 6—COMPONENTS OF COAL WORKERS’ PNEUMOCONIOSIS (CWP) AND WORKERS’ COMPENSATION NET PERIODIC BENEFIT COSTS:

 

The components of Net Periodic Benefit Cost are as follows:

 

  

CWP

  

Workers' Compensation

 
  

Three Months Ended

  

Three Months Ended

 
  

March 31,

  

March 31,

 
  

2021

  

2020

  

2021

  

2020

 

Service Cost

 $1,115  $1,151  $1,059  $1,569 

Interest Cost

  1,178   1,551   282   461 

Amortization of Actuarial Loss (Gain)

  2,091   1,401   (45)  (122)

State Administrative Fees and Insurance Bond Premiums

        468   621 

Net Periodic Benefit Cost

 $4,384  $4,103  $1,764  $2,529 

 

14

  
 

NOTE 7—INCOME TAXES:

 

The provision for income taxes for the three months ended March 31, 2021 was $5,185, or 16.4% of earnings before income taxes based on the actual year-to-date effective rate for this period. The income tax provision for interim periods is generally determined using an estimate of the Company's annual effective tax rate, and adjusted for discrete items, if any, in the relevant period. However, given current and expected operating activities during the year, considering the significant benefit from excess percentage depletion, estimating a reliable annual effective tax rate has become difficult as small changes in forecasted results can produce significant changes to the Company's annual effective tax rate. Therefore, the Company has determined that the actual year-to-date effective tax rate is the best estimate for the reporting period ended March 31, 2021. The Company will continue to utilize this methodology until reliable estimates of the annual effective tax rate can be made. The effective tax rate for the three months ended March 31, 2021 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion, offset by the impact of tax expense related to compensation.

 

During the three months ended March 31, 2020, the Company evaluated the impact of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which had various income tax related provisions, including temporary net operating loss carryback and limitation measures, a relaxation of the limitation on interest deductions, the postponement of statutory filing dates, and a technical correction of the 2017 Tax Cuts and Jobs Act related to qualified improvement property. The CARES Act increased the amount of deductible interest from 30% of adjusted taxable income to 50% for tax years 2019 and 2020, which generated a cash tax benefit, but also reduced the base of earnings upon which percentage depletion was computed. The effective tax rate for the three months ended March 31, 2020 was 44.6%, which differed from the U.S. federal statutory rate of 21%, primarily due to discrete income tax charges related to equity compensation and the effect of the CARES Act as noted above, partially offset by the benefit anticipated for excess percentage depletion.

 

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the three months ended March 31, 2021 and the year ended December 31, 2020, the Company did not have any unrecognized tax benefits. 

 

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. Under the provisions of the tax matters agreement entered into between the Company and its former parent on November 28, 2017 (the “TMA”), certain subsidiaries of the Company are subject to examination for period January 1, 2017 through November 28, 2017. Furthermore, the Company is subject to examination for the period November 28, 2017 through  December 31, 2020 for federal and state returns.

  

 

NOTE 8—CREDIT LOSSES:

 

Effective January 1, 2020, the Company adopted ASU 2016-013, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade and other receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under previous accounting guidance. The Company recorded a cumulative-effect adjustment to retained earnings in the amount of $3,298, net of $1,109 of income taxes, for expected credit losses on financial assets at the adoption date.

 

The following table illustrates the impact of ASC 326.

 

  

January 1, 2020

 
  As Reported Under ASC 326  Pre-ASC 326 Adoption  Impact of ASC 326 Adoption 
             

Trade Receivables

 $3,051  $2,100  $951 

Other Receivables

  3,372   711   2,661 

Other Assets

  795      795 

Allowance for Credit Losses on Receivables

 $7,218  $2,811  $4,407 

 

The Company is exposed to credit losses primarily through sales of products and services. The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade and other accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on an aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company's monitoring activities include timely account reconciliations, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

 

Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the novel coronavirus (COVID-19) pandemic and determined that the estimate of credit losses was not significantly impacted.

 

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes to the assessment of anticipated payment, changes in economic conditions, current industry trends in the markets the Company serves, and changes in the financial health of the Company's counterparties.

 

15

 

The following table provides a roll-forward of the allowance for credit losses by portfolio segment that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.

 

  

Trade Receivables

  

Other Receivables

  

Other Assets

 
             

Beginning Balance, December 31, 2020

 $4,426  $4,710  $1,661 

Provision for expected credit losses

  120   2,024   12 

Ending Balance, March 31, 2021

 $4,546  $6,734  $1,673 

  

 

NOTE 9—INVENTORIES:

 

Inventory components consist of the following:

 

  

March 31,

  

December 31,

 
  

2021

  

2020

 

Coal

 $10,227  $7,163 

Supplies

  44,982   49,037 

Total Inventories

 $55,209  $56,200 

 

Inventories are stated at the lower of cost or net realizable value. The cost of coal inventories is determined by the first-in, first-out (“FIFO”) method. Coal inventory costs include labor, supplies, equipment costs, operating overhead, depreciation, depletion, amortization and other related costs. The cost of supplies inventory is determined by the average cost method and includes operating and maintenance supplies to be used in the Company's coal operations.

  

 

NOTE 10—ACCOUNTS RECEIVABLE SECURITIZATION:

 

CONSOL Energy and certain of its U.S. subsidiaries are parties to a trade accounts receivable securitization facility with financial institutions for the sale on a continuous basis of eligible trade accounts receivable. In March 2020, the securitization facility was amended to, among other things, extend the maturity date from August 30, 2021 to March 27, 2023.

 

Pursuant to the securitization facility, CONSOL Thermal Holdings LLC, an indirect, wholly-owned subsidiary of the Partnership, sells current and future trade receivables to CONSOL Pennsylvania Coal Company LLC, a wholly-owned subsidiary of the Company. CONSOL Marine Terminals LLC, a wholly-owned subsidiary of the Company, and CONSOL Pennsylvania Coal Company LLC sell and/or contribute current and future trade receivables (including receivables sold to CONSOL Pennsylvania Coal Company LLC by CONSOL Thermal Holdings LLC) to CONSOL Funding LLC, a wholly-owned subsidiary of the Company (the “SPV”). The SPV, in turn, pledges its interests in the receivables to PNC Bank, N.A., which either makes loans or issues letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the securitization facility may not exceed $100 million.

 

Loans under the securitization facility accrue interest at a reserve-adjusted LIBOR market index rate equal to the one-month Eurodollar rate. Loans and letters of credit under the securitization facility also accrue a program fee and a letter of credit participation fee, respectively, ranging from 2.00% to 2.50% per annum depending on the total net leverage ratio of CONSOL Energy. In addition, the SPV paid certain structuring fees to PNC Capital Markets LLC and pays other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

 

At March 31, 2021, the Company's eligible accounts receivable yielded $25,197 of borrowing capacity. At March 31, 2021, the facility had no outstanding borrowings and $25,500 of letters of credit outstanding, leaving no unused capacity. CONSOL Energy posted $303 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. Cash collateral of $303 is included in Restricted Cash in the Consolidated Balance Sheets. At December 31, 2020, the Company's eligible accounts receivable yielded $31,868 of borrowing capacity. At December 31, 2020, the facility had no outstanding borrowings and $31,218 of letters of credit outstanding, leaving available borrowing capacity of $650. Costs associated with the receivables facility totaled $261 and $341 for the three months ended March 31, 2021 and 2020, respectively. These costs have been recorded as financing fees which are included in Operating and Other Costs in the Consolidated Statements of Income. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.

 

16

  
 

NOTE 11—PROPERTY, PLANT AND EQUIPMENT:

 

Property, plant and equipment consists of the following:

 

  

March 31,

  

December 31,

 
  

2021

  

2020

 

Plant and Equipment

 $3,118,268  $3,134,149 

Coal Properties and Surface Lands

  875,079   874,567 

Airshafts

  456,083   452,976 

Mine Development

  356,136   354,691 

Advance Mining Royalties

  326,173   327,313 

Total Property, Plant and Equipment

  5,131,739   5,143,696 

Less: Accumulated Depreciation, Depletion and Amortization

  3,117,651   3,094,634 

Total Property, Plant and Equipment, Net

 $2,014,088  $2,049,062 

 

Coal reserves are either owned in fee or controlled by lease. The duration of the leases vary; however, the lease terms are generally extended automatically to the exhaustion of economically recoverable reserves, as long as active mining continues. Coal interests held by lease provide the same rights as fee ownership for mineral extraction and are legally considered real property interests.

 

As of March 31, 2021 and December 31, 2020, property, plant and equipment includes gross assets under finance leases of $74,504 and $112,334, respectively. Accumulated amortization for finance leases was $19,325 and $56,761 at March 31, 2021 and December 31, 2020, respectively. Amortization expense for assets under finance leases approximated $8,619 and $4,964 for the three months ended March 31, 2021 and 2020, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying Consolidated Statements of Income.

  

 

NOTE 12—OTHER ACCRUED LIABILITIES:

 

  

March 31,

  

December 31,

 
  

2021

  

2020

 

Subsidence Liability

 $91,432  $89,554 

Accrued Payroll and Benefits

  23,185   21,179 

Accrued Interest

  8,985   6,236 
Litigation  8,457   3,625 
Accrued Other Taxes  5,267   7,126 

Accrued Equipment Obligations

  300   6,698 

Other

  20,319   20,220 

Current Portion of Long-Term Liabilities:

        

Postretirement Benefits Other than Pensions

  25,867   26,073 

Asset Retirement Obligations

  20,587   20,587 

Operating Lease Liability

  19,540   20,241 

Pneumoconiosis Benefits

  12,133   12,203 

Workers' Compensation

  9,683   9,653 

Total Other Accrued Liabilities

 $245,755  $243,395 

 

17

  
 

NOTE 13—LONG-TERM DEBT:

 

  

March 31,

  

December 31,

 
  

2021

  

2020

 

Debt:

        

Term Loan B due in September 2024 (Principal of $264,652 and $270,188 less Unamortized Discount of $875 and $938, 4.61% and 4.65% Weighted Average Interest Rate, respectively)

 $263,777  $269,250 

11.00% Senior Secured Second Lien Notes due November 2025

  156,957   167,147 

MEDCO Revenue Bonds in Series due September 2025 at 5.75%

  102,865   102,865 

Term Loan A due in March 2023 (5.50% Weighted Average Interest Rate)

  60,000   66,250 

Other Asset-Backed Financing Arrangements

  2,632   2,813 

Advance Royalty Commitments (13.68% Weighted Average Interest Rate)

  2,185   2,185 

Less: Unamortized Debt Issuance Costs

  9,083   9,921 
   579,333   600,589 

Less: Amounts Due in One Year*

  28,889   33,731 

Long-Term Debt

 $550,444  $566,858 

 

* Excludes current portion of Finance Lease Obligations of $21,168 and $20,115 at March 31, 2021 and December 31, 2020, respectively.

 

In November 2017, CONSOL Energy entered into a revolving credit facility with PNC Bank, N.A. with commitments up to $300 million (the “Revolving Credit Facility”), a Term Loan A Facility of up to $100 million (the “TLA Facility”) and a Term Loan B Facility of up to $400 million (the “TLB Facility”, and together with the Revolving Credit Facility and the TLA Facility, the “Senior Secured Credit Facilities”). On March 28, 2019, the Company amended the Senior Secured Credit Facilities to increase the borrowing commitment of the Revolving Credit Facility to $400 million and reallocate the principal amounts outstanding under the TLA Facility and TLB Facility. On March 29, 2021, the Company amended the Senior Secured Credit Facilities to revise the negative covenant with respect to other indebtedness to allow the Company to incur obligations under the tax-exempt solid waste disposal revenue bonds. On June 5, 2020, the Company amended the Senior Secured Credit Facilities (the “amendment”) to provide eight quarters of financial covenant relaxation, effect an increase in the rate at which borrowings under the Revolving Credit Facility and the TLA Facility bear interest, and add an anti-cash hoarding provision. Borrowings under the Company's Senior Secured Credit Facilities bear interest at a floating rate which can be, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an alternate base rate plus an applicable margin. The applicable margin for the Revolving Credit Facility and TLA Facility depends on the total net leverage ratio, whereas the applicable margin for the TLB Facility is fixed. The amendment increased the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility. The maturity date of the Revolving Credit and TLA Facilities is March 28, 2023. The TLB Facility's maturity date is September 28, 2024. Obligations under the Senior Secured Credit Facilities are guaranteed by (i) all owners of the PAMC held by the Company, (ii) any other members of the Company’s group that own any portion of the collateral securing the Revolving Credit Facility, and (iii) subject to certain customary exceptions and agreed materiality thresholds, all other existing or future direct or indirect wholly-owned restricted subsidiaries of the Company. The obligations are secured by, subject to certain exceptions (including a limitation of pledges of equity interests in certain subsidiaries and certain thresholds with respect to real property), a first-priority lien on (i) the Company’s interest in the PAMC, (ii) the limited partner units of the Partnership held by the Company, (iii) the equity interests in CONSOL Coal Resources GP LLC held by the Company, (iv) the CONSOL Marine Terminal, (v) the Itmann Mine and (vi) the 1.5 billion tons of Greenfield Reserves.

 

The Senior Secured Credit Facilities contain a number of customary affirmative covenants. In addition, the Senior Secured Credit Facilities contain a number of negative covenants, including (subject to certain exceptions) limitations on (among other things): indebtedness, liens, investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness. The amendment added additional conditions to be met for the covenants relating to investments in joint ventures, general investments, share repurchases, dividends, and repurchases of Second Lien Notes. The additional conditions require no outstanding borrowings and no more than $200 million of outstanding letters of credit on the Revolving Credit Facility. Further restrictions apply to investments in joint ventures, share repurchases and dividends that require the total net leverage ratio shall not be greater than 2.00 to 1.00.

 

18

 

The Revolving Credit Facility and TLA Facility also include covenants relating to (i) a maximum first lien gross leverage ratio, (ii) a maximum total net leverage ratio, and (iii) a minimum fixed charge coverage ratio.  The maximum first lien gross leverage ratio is calculated as the ratio of Consolidated First Lien Debt to Consolidated EBITDA. Consolidated EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, extraordinary gains and losses, gains and losses on discontinued operations, non-cash charges related to legacy employee liabilities and gains and losses on debt extinguishment, and subtracts cash payments related to legacy employee liabilities. The maximum total net leverage ratio is calculated as the ratio of Consolidated Indebtedness, minus Cash on Hand, to Consolidated EBITDA. The minimum fixed charge coverage ratio is calculated as the ratio of Consolidated EBITDA to Consolidated Fixed Charges. Consolidated Fixed Charges, as used in the covenant calculation, include cash interest payments, cash payments for income taxes, scheduled debt repayments, dividends paid, and Maintenance Capital Expenditures. The amendment revised the financial covenants applicable to the Revolving Credit Facility and TLA Facility relating to the maximum first lien gross leverage ratio, maximum total net leverage ratio and minimum fixed charge coverage ratio, so that for the fiscal quarters ending June 30, 2020 through March 31, 2021, the maximum first lien gross leverage ratio shall be 2.50 to 1.00, the maximum total net leverage ratio shall be 3.75 to 1.00, and the minimum fixed charge coverage ratio shall be 1.00 to 1.00; for the fiscal quarters ending June 30, 2021 through September 30, 2021, the maximum first lien gross leverage ratio shall be 2.25 to 1.00 and the maximum total net leverage ratio shall be 3.50 to 1.00; for the fiscal quarters ending June 30, 2021 through March 31, 2022, the minimum fixed charge coverage ratio shall be 1.05 to 1.00; for the fiscal quarters ending December 31, 2021 through March 31, 2022, the maximum first lien gross leverage ratio shall be 2.00 to 1.00 and the maximum total net leverage ratio shall be 3.25 to 1.00; and for the fiscal quarters ending on or after June 30, 2022, the maximum first lien gross leverage ratio shall be 1.75 to 1.00, the maximum total net leverage ratio shall be 2.75 to 1.00 and the minimum fixed charge coverage ratio shall be 1.10 to 1.00. The maximum first lien gross leverage ratio was 1.37 to 1.00 at March 31, 2021. The maximum total net leverage ratio was 1.97 to 1.00 at March 31, 2021. The minimum fixed charge coverage ratio was 1.88 to 1.00 at March 31, 2021. The Company was in compliance with all of its financial covenants under the Senior Secured Credit Facilities as of March 31, 2021. The Company is continuing to actively monitor the effects of the ongoing COVID-19 pandemic on its liquidity. 

 

The TLB Facility also includes a financial covenant that requires the Company to repay a certain amount of its borrowings under the TLB Facility within ten business days after the date it files its Form 10-K with the Securities and Exchange Commission if the Company has excess cash flow (as defined in the credit agreement for the Senior Secured Credit Facilities) during the year covered by the applicable Form 10-K. During the three months ended March 31, 2021, CONSOL Energy made the required repayment of approximately $5 million based on the amount of the Company's excess cash flow as of December 31, 2020. The required repayment is equal to a certain percentage of the Company’s excess cash flow for such year, ranging from 0% to 75% depending on the Company’s total net leverage ratio, less the amount of certain voluntary prepayments made by the Company, if any, under the TLB Facility during such fiscal year. The amount of excess cash flow is a covenant feature only applicable as of the Company's year-end and will be calculated as of December 31, 2021.

 

At March 31, 2021, the Revolving Credit Facility had no borrowings outstanding and $145,656 of letters of credit outstanding, leaving $254,344 of unused capacity. At December 31, 2020, the Revolving Credit Facility had no borrowings outstanding and $125,938 of letters of credit outstanding, leaving $274,062 of unused capacity. From time to time, CONSOL Energy is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. CONSOL Energy sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

 

 

19

 

In November 2017, CONSOL Energy issued $300 million in aggregate principal amount of 11.00% Senior Secured Second Lien Notes due 2025 (the “Second Lien Notes”) pursuant to an indenture (the “Indenture”) dated as of November 13, 2017, by and between the Company and UMB Bank, N.A., a national banking association, as trustee and collateral trustee (the “Trustee”). On November 28, 2017, certain subsidiaries of the Company executed a supplement to the Indenture and became party to the Indenture as a guarantor (the “Guarantors”). The Second Lien Notes are secured by second priority liens on substantially all of the assets of the Company and the Guarantors that are pledged on a first-priority basis as collateral securing the Company’s obligations under the Senior Secured Credit Facilities (described above), subject to certain exceptions under the Indenture. The Indenture contains covenants that will limit the ability of the Company and the Guarantors to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) declare or pay dividends on the Company’s common stock, redeem stock or make other distributions to the Company’s stockholders; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Company’s restricted subsidiaries; (vi) merge or consolidate, or sell, transfer, lease or dispose of substantially all of the Company’s assets; (vii) sell or otherwise dispose of certain assets, including equity interests in subsidiaries; (viii) enter into transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the Second Lien Notes achieve an investment grade rating from both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. and no default under the Indenture exists, many of the foregoing covenants will terminate and cease to apply.

 

The only non-guarantor subsidiary of the Senior Credit Facilities is the SPV, which holds the assets pledged to the Accounts Receivable Securitization Facility. The SPV had total assets of $127,258 and $123,468, comprised mainly of $126,290 and $122,639 trade receivables, as of March 31, 2021 and December 31, 2020, respectively. Net income attributable to the SPV was $1,160 and $1,047 for three months ended March 31, 2021 and 2020, respectively, which primarily reflected intercompany fees related to purchasing the receivables, which are eliminated in the Consolidated Financial Statements contained within this Form 10-Q. During the three months ended March 31, 2021 and 2020, there were no borrowings or payments under the Accounts Receivable Securitization Facility. See Note 10 - Accounts Receivable Securitization for additional information. All other subsidiaries are guarantors of the Senior Secured Credit Facilities.

 

During the three months ended March 31, 2021, the Company spent $9,338 to retire $10,190 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025 and made a required repayment of approximately $5 million on the TLB Facility (discussed above). During the three months ended March 31, 2020, the Company spent $25,480 to retire $43,176 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025. As part of these transactions, $683 and $16,833 was included in Gain on Debt Extinguishment on the Consolidated Statements of Income for the three months ended March 31, 2021 and 2020, respectively.

 

The Company is a borrower under an asset-backed financing arrangement related to certain equipment. The equipment, which had an approximate value of $2,632 and $2,813 at  March 31, 2021 and  December 31, 2020, respectfully, fully collateralizes the loan. As of March 31, 2021, the total outstanding loan of $2,632 matures in September 2024. The loan had a weighted average interest rate of 3.61% at March 31, 2021 and December 31, 2020.

 

During the year ended December 31, 2019, the Company entered into interest rate swaps, which effectively converted $150,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2020 and 2021, and $50,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2022. The interest rate swaps qualify for cash flow hedge accounting treatment and as such, the change in the fair value of the interest rate swaps is recorded on the Company's Consolidated Balance Sheets as an asset or liability. The effective portion of the gains or losses is reported as a component of accumulated other comprehensive loss and the ineffective portion is reported in earnings. At March 31, 2021 and December 31, 2020, the interest rate swap contracts were reflected in the Consolidated Balance Sheets at their fair value of $2,275 and $2,834, respectively, which is recorded in Other Accrued Liabilities and Other Liabilities. The fair value of the interest rate swaps reflected an unrealized gain of $414 (net of $144 tax) at March 31, 2021 and an unrealized loss of $2,773 (net of $933 tax) at March 31, 2020. The unrealized gain (loss) is included on the Consolidated Statements of Stockholders' Equity as part of accumulated other comprehensive loss, as well as on the Consolidated Statements of Comprehensive Income as unrealized gain (loss) on cash flow hedges. Some of the Company's interest rate swaps reached their effective date in the three months ended March 31, 2021 and 2020. As such, a loss of $532 and a gain of $4 was recognized in interest expense in the Consolidated Statements of Income for the three months ended March 31, 2021 and 2020, respectively. During 2021, notional amounts of $150,000 will become effective. Based on the fair value of the Company's cash flow hedges at March 31, 2021, the Company expects expense of approximately $1,694 to be reclassified into earnings in the next 12 months.

 

20

  
 

NOTE 14—COMMITMENTS AND CONTINGENT LIABILITIES:

 

The Company is subject to various lawsuits and claims with respect to such matters as personal injury, wrongful death, damage to property, exposure to hazardous substances, governmental regulations including environmental remediation, employment and contract disputes and other claims and actions arising out of the normal course of business. The Company accrues the estimated loss for these lawsuits and claims when the loss is probable and reasonably estimable. The Company’s estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of the Company as of March 31, 2021. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the Company’s financial position, results of operations or cash flows; however, such amounts cannot be reasonably estimated. The amount claimed against the Company as of March 31, 2021 is disclosed below when an amount is expressly stated in the lawsuit or claim, which is not often the case.

 

Fitzwater Litigation: Three nonunion retired coal miners have sued Fola Coal Company LLC, Consolidation Coal Company (“CCC”) and CONSOL of Kentucky Inc. (“COK”) (as well as the Company's former parent) in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. The Plaintiffs contend they relied to their detriment on oral statements and promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were allegedly denied access to Summary Plan Documents that clearly reserved the right to modify or terminate the Retiree Health and Welfare Plan subject to Plaintiffs’ claims. Pursuant to Plaintiffs’ amended complaint filed on April 24, 2017, Plaintiffs request that retiree health benefits be reinstated and seek to represent a class of all nonunion retirees who were associated with AMVEST and COK areas of operation. On October 15, 2019, Plaintiffs’ supplemental motion for class certification was denied on all counts. On July 15, 2020, Plaintiffs filed an interlocutory appeal with the Fourth Circuit Court of Appeals on the Order denying class certification. The Fourth Circuit denied Plaintiffs' appeal on August 14, 2020. On October 1, 2020, the District Court entered a pretrial order setting the trial date, which was held in February 2021. No ruling has been issued by the judge. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

 

Casey Litigation: A class action lawsuit was filed on August 23, 2017 on behalf of two nonunion retired coal miners against CCC, COK, CONSOL Buchanan Mining Co., LLC and Kurt Salvatori in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. Filed by the same lawyers who filed the Fitzwater litigation, and raising nearly identical claims, the Plaintiffs contend they relied to their detriment on oral promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were not provided with copies of Summary Plan Documents clearly reserving to the Company the right to modify or terminate the Retiree Health and Welfare Plan. Plaintiffs request that retiree health benefits be reinstated for them and their dependents and seek to represent a class of all nonunion retirees of any subsidiary of the Company's former parent that operated or employed individuals in McDowell or Mercer Counties, West Virginia, or Buchanan or Tazewell Counties, Virginia whose retiree welfare benefits were terminated. On December 1, 2017, the trial court judge in Fitzwater signed an order to consolidate Fitzwater with Casey. The Casey complaint was amended on March 1, 2018 to add new plaintiffs, add defendant CONSOL Pennsylvania Coal Company, LLC and eliminate defendant CONSOL Buchanan Mining Co., LLC in an attempt to expand the class of retirees. On October 15, 2019, Plaintiffs’ supplemental motion for class certification was denied on all counts. On July 15, 2020, Plaintiffs filed an interlocutory appeal with the Fourth Circuit Court of Appeals on the Order denying class certification. The Fourth Circuit denied Plaintiffs' appeal on August 14, 2020. On October 1, 2020, the District Court entered a pretrial order setting the trial date, which was held in February 2021. No ruling has been issued by the judge. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

 

United Mine Workers of America 1992 Benefit Plan Litigation: In 2013, Murray Energy and its subsidiaries (“Murray”) entered into a stock purchase agreement (the “Murray sale agreement”) with the Company's former parent pursuant to which Murray acquired the stock of CCC and certain subsidiaries and certain other assets and liabilities. At the time of sale, the liabilities included certain retiree medical liabilities under the Coal Industry Retiree Health Benefit Act of 1992 (“Coal Act”) and certain federal black lung liabilities under the Black Lung Benefits Act (“BLBA”). Based upon information available, the Company estimates that the annual servicing costs of these liabilities are approximately $10 million to $20 million per year for the next ten years. The annual servicing cost would decline each year since the beneficiaries of the Coal Act consist principally of miners who retired prior to 1994. Murray filed for Chapter 11 bankruptcy in October 2019. As part of the ongoing bankruptcy proceedings, Murray entered into a settlement with the United Mine Workers of America 1992 Benefit Plan (“1992 Plan”) to transfer retirees in the Murray Energy Section 9711 Plan into the 1992 Plan, which the bankruptcy court approved on April 30, 2020. The 1992 Plan recently filed an action in the United States District Court for the District of Columbia asking the court to make a determination whether the Company's former parent or the Company has any continuing retiree medical liabilities under the Coal Act. The Murray sale agreement includes indemnification by Murray with respect to the Coal Act and BLBA liabilities. In addition, the Company had agreed to indemnify its former parent relative to certain pre-separation liabilities. As of September 16, 2020, the Company has entered into a settlement agreement with Murray and has withdrawn its claims in bankruptcy. See Note 2 - Major Transactions for a discussion of this settlement agreement. The Company will continue to vigorously defend any claims that attempt to transfer any of such liabilities directly or indirectly to the Company, including raising all applicable defenses against the 1992 Plan’s suit and those of any other party.

 

Other Matters: Various Company subsidiaries are defendants in certain other legal proceedings arising out of the conduct of the Coal Business prior to the separation and distribution, and the Company is also a defendant in other legal proceedings following the separation and distribution. In the opinion of management, based upon an investigation of these matters and discussion with legal counsel, the ultimate outcome of such other legal proceedings, individually and in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity.

 

21

 

As part of the separation and distribution, the Company assumed various financial obligations relating to the Coal Business and agreed to reimburse its former parent for certain financial guarantees relating to the Coal Business that its former parent retained following the separation and distribution. Employee-related financial guarantees have primarily been provided to support the 1992 Plan and federal black lung and various state workers’ compensation self-insurance programs. Environmental financial guarantees have primarily been provided to support various performance bonds related to reclamation and other environmental issues. Other financial guarantees have been extended to support sales contracts, insurance policies, legal matters, full and timely payments of mining equipment leases, and various other items necessary in the normal course of business.

 

The following is a summary, as of March 31, 2021, of the financial guarantees, unconditional purchase obligations and letters of credit to certain third parties. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments, or under the separation and distribution agreement to the extent retained by the Company's former parent on behalf of the Coal Business. Certain letters of credit included in the table below were issued against other commitments included in this table. These amounts have not been reduced for potential recoveries under recourse or collateralization provisions. Generally, recoveries under reclamation bonds would be limited to the extent of the work performed at the time of the default. The Company’s management believes that these commitments will not have a material adverse effect on the Company’s financial condition.

 

  

Amount of Commitment Expiration per Period

 
  Total Amounts Committed  

Less Than 1 Year

  

1-3 Years

  

3-5 Years

  

Beyond 5 Years

 

Letters of Credit:

                    

Employee-Related

 $79,476  $53,053  $26,423  $  $ 

Environmental

  398   398          

Other

  91,282   91,282          

Total Letters of Credit

 $171,156  $144,733  $26,423  $  $ 

Surety Bonds:

                    

Employee-Related

 $83,524  $71,024  $12,500  $  $ 

Environmental

  538,320   507,367   30,953       

Other

  4,255   3,977   278       

Total Surety Bonds

 $626,099  $582,368  $43,731  $  $ 

Guarantees:

                    

Other

 $7,306  $6,377  $398  $398  $133 

 

Included in the above table are commitments and guarantees entered into in conjunction with the sale of Consolidation Coal Company and certain of its subsidiaries, which contain all five of its longwall coal mines in West Virginia and its river operations, to a third party. As part of the separation and distribution, the Company's former parent agreed to indemnify the Company and the Company agreed to indemnify its former parent in each case with respect to guarantees of certain equipment lease obligations that were assumed by the third party. In the event that the third party would default on the obligations defined in the agreements, the Company could be required to perform under the guarantees. As of March 31, 2021, the Company has not been required to perform under these guarantees. The equipment lease obligations are collateralized by the underlying assets. The current maximum estimated exposure under these guarantees as of  March 31, 2021 and December 31, 2020 is believed to be approximately $7,000 and $8,000, respectively. 

 

The Company regularly evaluates the likelihood of default for all guarantees based on an expected loss analysis and records the fair value, if any, of its guarantees as an obligation in the consolidated financial statements.

 

22

  
 

NOTE 15—FAIR VALUE OF FINANCIAL INSTRUMENTS:

 

CONSOL Energy determines the fair value of assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources (including LIBOR-based discount rates), while unobservable inputs reflect the Company’s own assumptions of what market participants would use.

 

The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below.

 

Level One - Quoted prices for identical instruments in active markets.

 

Level Two - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including LIBOR-based discount rates.

 

Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity. The significant unobservable inputs used in the fair value measurement of the Company’s third-party guarantees are the credit risk of the third-party and the third-party surety bond markets. A significant increase or decrease in these values, in isolation, would have a directionally similar effect resulting in higher or lower fair value measurement of the Company’s Level 3 guarantees.

 

In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.

 

The financial instruments measured at fair value on a recurring basis are summarized below:

 

  

Fair Value Measurements at

  

Fair Value Measurements at

 
  

March 31, 2021

  

December 31, 2020

 

Description

 

Level 1

  

Level 2

  

Level 3

  

Level 1

  

Level 2

  

Level 3

 

Derivatives (1)

 $  $(2,275) $  $  $(2,834) $ 

 

(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

 

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

 

Long-term debt: The fair value of long-term debt is measured using unadjusted quoted market prices or estimated using discounted cash flow analyses. The discounted cash flow analyses are based on current market rates for instruments with similar cash flows.

 

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:

 

  

March 31, 2021

  

December 31, 2020

 
  

Carrying

  

Fair

  

Carrying

  

Fair

 
  

Amount

  

Value

  

Amount

  

Value

 

Long-Term Debt

 $588,416  $561,426  $610,510  $517,862 

 

Certain of the Company’s debt is actively traded on a public market and, as a result, constitutes Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitutes Level 2 fair value measurements.

 

23

  
 

NOTE 16—SEGMENT INFORMATION:

 

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management to make decisions on and assess performance of the Company’s reportable segments. CONSOL Energy consists of two reportable segments, the PAMC and the CONSOL Marine Terminal. The PAMC includes the Bailey Mine, the Enlow Fork Mine, the Harvey Mine and a centralized preparation plant. The PAMC segment’s principal activities include the mining, preparation and marketing of thermal coal, sold primarily to industrial end-users, power generators and metallurgical end-users. The CONSOL Marine Terminal provides coal export terminal services through the Port of Baltimore. Selling, general and administrative costs are allocated to the Company’s segments based on a percentage of resources utilized, a percentage of total revenue and a percentage of total projected capital expenditures. CONSOL Energy’s Other segment includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC or the CONSOL Marine Terminal segments. The diversified business activities include the development of the Itmann Mine, the Greenfield Reserves, closed and idle mine activities, other income, gain on asset sales related to non-core assets, and gain/loss on debt extinguishment. Additionally, interest expense and income taxes, as well as various other non-operated activities, none of which are individually significant to the Company, are also reflected in CONSOL Energy's Other segment and are not allocated to the PAMC and CONSOL Marine Terminal segments.

 

The Company evaluates the performance of its segments utilizing Adjusted EBITDA and various sales and production metrics. Adjusted EBITDA is not a measure of financial performance in accordance with GAAP, and items excluded from Adjusted EBITDA are significant in understanding and assessing the Company's financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net income, income from operations, or cash flows from operations, or as a measure of the Company's profitability, liquidity, or performance under GAAP. The Company uses Adjusted EBITDA to measure the operating performance of its segments and to allocate resources to its segments. Investors should be aware that the Company's presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

 

The CONSOL Marine Terminal has been disclosed in CONSOL Energy’s Other segment during prior years due to its relative contribution to the Company’s Adjusted EBITDA. The recent COVID-19 pandemic negatively impacted the Company’s 2020 financial performance and influenced its outlook with respect to the importance of coal exports. Effective December 31, 2020, the Company disclosed the CONSOL Marine Terminal in a separate reportable segment due to its increased contribution to Adjusted EBITDA as well as the increased reliance on coal exports serviced by the CONSOL Marine Terminal in accordance with how the Company's chief operating decision maker receives and reviews financial information. The Company has revised the consolidated segment information for all periods presented in this Quarterly Report on Form 10-Q to reflect this reclassification.

 

Industry segment results for the three months ended March 31, 2021 are:

 

  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Adjustments and Eliminations

  

Consolidated

  

Coal Revenue

 $284,465  $  $1,070  $  $285,535 

(A)

Terminal Revenue

     18,212         18,212  

Freight Revenue

  27,013            27,013  

Total Revenue from Contracts with Customers

 $311,478  $18,212  $1,070  $  $330,760  

Adjusted EBITDA

 $99,185  $11,961  $(4,431) $  $106,715  

Segment Assets

 $1,855,878  $106,603  $558,079  $  $2,520,560  

Depreciation, Depletion and Amortization

 $54,781  $1,214  $3,902  $  $59,897  

Capital Expenditures

 $12,579  $60  $1,161  $  $13,800  

 

Industry segment results for the three months ended March 31, 2020 are:

 

  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Adjustments and Eliminations

  

Consolidated

  

Coal Revenue

 $255,452  $  $  $  $255,452 

(A)

Terminal Revenue

     16,501         16,501  

Freight Revenue

  3,147            3,147  

Total Revenue from Contracts with Customers

 $258,599  $16,501  $  $  $275,100  

Adjusted EBITDA

 $63,579  $10,554  $(11,199) $  $62,934  

Segment Assets

 $1,949,655  $86,036  $617,777  $  $2,653,468  

Depreciation, Depletion and Amortization

 $48,418  $1,257  $5,268  $  $54,943  

Capital Expenditures

 $20,692  $