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