Financial Data and Key Metrics Changes - CONSOL Energy reported a third quarter 2020 attributable net loss of $7.2 million or $0.28 per diluted share compared to a net income of $4.3 million or $0.16 per diluted share in Q3 2019 [31] - Adjusted EBITDA for Q3 2020 was $68.3 million, showing significant improvement from Q2 2020 levels as operations began to recover from pandemic-driven demand decline [31] - The company ended Q3 2020 with cash and cash equivalents of $22 million, a reduction from $33 million at the end of Q2 2020, primarily due to debt repayment [32] Business Line Data and Key Metrics Changes - Coal production at the Pennsylvania Mining Complex was 4.5 million tons in Q3 2020, down from 6.5 million tons in the same quarter last year, but nearly double the production in Q2 2020 [11] - The average cash cost of coal sold per ton decreased to $28.64 in Q3 2020 from $32.78 in Q3 2019, reflecting successful cost control measures [12] - The CONSOL Marine Terminal had a throughput volume of 2 million tons in Q3 2020, down from 2.4 million tons in the year-ago period, but terminal revenues improved to $17 million from $16.3 million [14] Market Data and Key Metrics Changes - Coal share in the generation fleet improved to 23% in August 2020 from 15% in April 2020, despite overall electricity generation increasing by 45% [16] - Henry Hub natural gas spot prices averaged $2 per million BTU in Q3 2020, a 16% decline compared to Q3 2019, but improved from a 34% year-over-year decrease in Q2 2020 [17] - The active US gas rig count stood at 74 as of October 2, 2020, a reduction of 70 rigs compared to the same period in 2019, indicating reduced capital expenditures in the E&P sector [18] Company Strategy and Development Direction - The company is focused on deleveraging its balance sheet and improving liquidity, having completed multiple transactions to boost income and financial flexibility [10] - A merger agreement with CCR was announced to simplify corporate structure, enhance credit metrics, and improve access to capital [28] - The company is also pursuing technology-driven growth initiatives, including the Coal FIRST project aimed at developing an advanced coal-based power plant [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand recovery in Q4 2020, driven by higher natural gas prices and improved market conditions [9] - The company expects a rebound in coal burn and demand for coal in 2021, with projections indicating a 21% increase in domestic coal burn [18] - Management highlighted the importance of maintaining liquidity and managing costs while preparing to capitalize on market improvements [35] Other Important Information - The company has contracted 13.2 million tons for 2021, with expectations of securing additional volumes during the domestic RFP season [22] - The company is actively managing its surety bond obligations and has issued $17 million of letters of credit to surety providers [49] - A settlement was reached with Murray debtors addressing open matters related to workers' compensation and black lung claims [42] Q&A Session Summary Question: What does the company expect for Q4 production and costs? - Management expects Q4 to be significantly better than Q3, running all four longwalls without any moves, aiming for cash costs below $30 per ton [45] Question: Can you provide insight on the financial impact of the Murray situation? - Specific financial impacts cannot be disclosed, but management suggested reviewing the Q for more details [46] Question: How is the company positioned regarding surety bonds? - The company has been successful in minimizing liquidity impacts and anticipates issuing more letters of credit in Q4 [49] Question: What is the appropriate liquidity level for the company? - Liquidity needs vary with market conditions, and management is comfortable with current access to the revolving credit facility [50] Question: Can you clarify the cash proceeds from asset sales? - The company expects $15 million to $20 million in Q4 and $20 million to $25 million in Q2 2021 from asset sales [54] Question: What is the pricing outlook for contracted tons in 2021? - Current negotiations suggest pricing may be slightly below the $43 average for 2021, but there is potential for improvement as market conditions stabilize [73]

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents CONSOL Energy Inc.'s unaudited consolidated financial statements, including statements of income, comprehensive income, balance sheets, stockholders' equity, and cash flows, along with detailed notes, reflecting a net loss and decreased assets and equity in 2020 [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) The company reported a net loss attributable to CONSOL Energy Inc. shareholders of **$7.224 million** for the three months and **$22.840 million** for the nine months ended September 30, 2020, a significant decline from net income in the prior year periods Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :---------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders | $(7,224) | $4,340 | $(22,840) | $62,055 | Total Revenue and Other Income | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :----------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total Revenue and Other Income | $243,219 | $333,346 | $697,036 | $1,088,269 | (Loss) Earnings per Share (Basic) | Metric | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Basic (Loss) Earnings per Share | $(0.28) | $0.16 | $(0.88) | $2.27 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported a comprehensive loss of **$5.359 million** for the three months and **$19.484 million** for the nine months ended September 30, 2020, a decline from comprehensive income in the prior year periods Comprehensive (Loss) Income | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :---------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Comprehensive (Loss) Income | $(5,359) | $9,220 | $(19,484) | $83,008 | | Comprehensive (Loss) Income Attributable to CONSOL Energy Inc. Shareholders | $(3,238) | $6,539 | $(14,421) | $68,911 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2020, total assets decreased to **$2.555 billion** from **$2.694 billion** at December 31, 2019, with corresponding decreases in total liabilities and total equity Key Balance Sheet Metrics | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------ | :-------------------------------- | :------------------------------- | | Total Assets | $2,554,838 | $2,693,802 | | Total Liabilities | $2,002,110 | $2,121,407 |\ | Total Equity | $552,728 | $572,395 | - Cash and cash equivalents decreased significantly from **$80.293 million** at December 31, 2019, to **$22.284 million** at September 30, 2020[15](index=15&type=chunk) - Total current assets decreased from **$338.029 million** to **$251.296 million**, primarily driven by the reduction in cash and receivables[15](index=15&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Total CONSOL Energy Inc. Stockholders' Equity decreased from **$435.199 million** at December 31, 2019, to **$426.079 million** at September 30, 2020, influenced by net loss and long-term liability adjustments Total CONSOL Energy Inc. Stockholders' Equity | Metric | December 31, 2019 (in thousands) | September 30, 2020 (in thousands) | | :---------------------------------------------- | :------------------------------- | :-------------------------------- | | Total CONSOL Energy Inc. Stockholders' Equity | $435,199 | $426,079 | - Net loss attributable to CONSOL Energy Inc. Shareholders for the three months ended September 30, 2020, was **$7.224 million**[22](index=22&type=chunk) - Actuarially determined long-term liability adjustments contributed **$3.609 million** to equity for the three months ended September 30, 2020[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2020, net cash provided by operating activities significantly decreased to **$62.388 million**, while net cash used in investing and financing activities also decreased, resulting in a net decrease in cash and cash equivalents of **$58.009 million** Cash Flow Summary | Metric | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :---------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net Cash Provided by Operating Activities | $62,388 | $223,183 | | Net Cash Used in Investing Activities | $(57,405) | $(129,460) |\ | Net Cash Used in Financing Activities | $(62,992) | $(223,809) |\ | Net Decrease in Cash and Cash Equivalents | $(58,009) | $(130,086) |\ | Cash and Cash Equivalents at End of Period | $22,284 | $134,849 | - Capital expenditures decreased from **$131.475 million** in 2019 to **$65.955 million** in 2020, reflecting cost control measures[27](index=27&type=chunk) - Payments on Term Loan B decreased significantly from **$123.750 million** in 2019 to **$2.063 million** in 2020[27](index=27&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1—Basis of Presentation](index=9&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION) The financial statements are prepared in accordance with GAAP for interim information, with operating results not indicative of future periods, and the company adopted several ASUs without expecting material impact - The company adopted ASU 2020-04 (Reference Rate Reform) and ASU 2020-01 (Equity Securities) but does not expect a material impact on its financial statements[34](index=34&type=chunk)[35](index=35&type=chunk) - Anti-dilutive restricted stock units increased from **418,924** in Q3 2019 to **1,561,852** in Q3 2020[40](index=40&type=chunk) (Loss) Earnings per Share (Dilutive) | Metric | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Dilutive (Loss) Earnings per Share | $(0.28) | $0.16 | $(0.88) | $2.26 | [Note 2—Major Transactions](index=12&type=section&id=NOTE%202%E2%80%94MAJOR%20TRANSACTIONS) On September 16, 2020, CONSOL Energy settled disputes with Murray Energy Holdings Co. and Murray NewCo, recognizing **$18.561 million** in Miscellaneous Other Income, **$6.230 million** in Gain on Sale of Assets, and a **$1.940 million** reduction in Operating and Other Costs - Settlement with Murray Energy Holdings Co. and Murray NewCo resulted in significant income and cost reductions[44](index=44&type=chunk) Financial Impact of Major Transaction (3 Months Ended Sep 30, 2020) | Metric | Amount (in thousands) | | :----------------------------------- | :-------------------- | | Miscellaneous Other Income | $18,561 | | Gain on Sale of Assets | $6,230 | | Reduction of Operating and Other Costs | $1,940 | [Note 3—Revenue](index=13&type=section&id=NOTE%203%E2%80%94REVENUE) Total revenue from contracts with customers significantly decreased for both the three and nine months ended September 30, 2020, compared to the prior year, with coal revenue as the primary component Total Revenue from Contracts with Customers | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :-------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total Revenue from Contracts with Customers | $214,292 | $321,444 | $610,688 | $1,049,609 | Coal Revenue | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :----------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Coal Revenue | $184,375 | $301,542 | $542,140 | $984,665 | - Coal revenue is generally recognized when title passes, with pricing fixed and determinable, adjusted for quality[46](index=46&type=chunk) [Note 4—Miscellaneous Other Income](index=14&type=section&id=NOTE%204%E2%80%94MISCELLANEOUS%20OTHER%20INCOME) Miscellaneous other income significantly increased for both the three and nine months ended September 30, 2020, primarily due to the sale of certain coal lease contracts, partially offset by decreased royalty income Miscellaneous Other Income | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Miscellaneous Other Income | $21,001 | $11,188 | $71,107 | $36,674 | - Sale of certain coal lease contracts contributed **$17.847 million** to miscellaneous other income for both the three and nine months ended September 30, 2020[54](index=54&type=chunk)[56](index=56&type=chunk) - Royalty income from non-operated coal decreased from **$4.976 million** to **$2.241 million** for the three months, and from **$16.863 million** to **$9.638 million** for the nine months[54](index=54&type=chunk) [Note 5—Components of Pension and Other Post-Employment Benefit (OPEB) Plans Net Periodic Benefit Costs](index=15&type=section&id=NOTE%205%E2%80%94COMPONENTS%20OF%20PENSION%20AND%20OTHER%20POST-EMPLOYMENT%20BENEFIT%20(OPEB)%20PLANS%20NET%20PERIODIC%20BENEFIT%20COSTS) Net periodic benefit (credit) cost for pension plans was a credit of **$(3.385) million** for the three months and **$(10.155) million** for the nine months ended September 30, 2020, while OPEB plans incurred costs of **$4.917 million** and **$14.751 million** respectively Net Periodic Benefit (Credit) Cost | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :------------------------------------ | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net Periodic Benefit (Credit) Cost (Pension) | $(3,385) | $(1,454) | $(10,155) | $(4,361) | | Net Periodic Benefit (Credit) Cost (OPEB) | $4,917 | $6,294 | $14,751 | $18,882 | [Note 6—Components of Coal Workers' Pneumoconiosis (CWP) and Workers' Compensation Net Periodic Benefit Costs](index=15&type=section&id=NOTE%206%E2%80%94COMPONENTS%20OF%20COAL%20WORKERS'%20PNEUMOCONIOSIS%20(CWP)%20AND%20WORKERS'%20COMPENSATION%20NET%20PERIODIC%20BENEFIT%20COSTS) Net periodic benefit cost for CWP increased to **$4.103 million** for the three months and **$12.310 million** for the nine months ended September 30, 2020, compared to the prior year, while workers' compensation costs remained stable Net Periodic Benefit Cost (CWP and Workers' Compensation) | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :------------------------------------ | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net Periodic Benefit Cost (CWP) | $4,103 | $2,952 | $12,310 | $8,856 | | Net Periodic Benefit Cost (Workers' Compensation) | $2,491 | $2,384 | $7,389 | $7,294 | [Note 7—Income Taxes](index=15&type=section&id=NOTE%207%E2%80%94INCOME%20TAXES) The company's year-to-date effective tax rate for the nine months ended September 30, 2020, was **(0.6)%**, primarily due to the income tax benefit for excess percentage depletion, offset by discrete tax expenses and the impact of the CARES Act and 163j regulations - The effective tax rate for the nine months ended September 30, 2020, was **(0.6)%**, compared to **(0.3)%** in the prior year[62](index=62&type=chunk)[63](index=63&type=chunk) - The CARES Act increased deductible interest from **30%** to **50%** for tax years 2019 and 2020, reducing cash tax burden but also the base for percentage depletion[62](index=62&type=chunk) - The company did not have any unrecognized tax benefits for the nine months ended September 30, 2020, or the year ended December 31, 2019[65](index=65&type=chunk) [Note 8—Credit Losses](index=17&type=section&id=NOTE%208%E2%80%94CREDIT%20LOSSES) Effective January 1, 2020, the company adopted ASU 2016-013, resulting in a cumulative-effect adjustment to retained earnings of **$3.298 million**, net of tax, and a significant increase in the allowance for credit losses on receivables - Adoption of ASU 2016-013 resulted in a cumulative-effect adjustment to retained earnings of **$3.298 million** (net of **$1.109 million** income taxes)[67](index=67&type=chunk) Allowance for Credit Losses on Receivables | Metric | As Reported ASC 326 (in thousands) | Pre-ASC 326 Adoption (in thousands) | Impact of ASC 326 Adoption (in thousands) | | :----------------------------------- | :--------------------------------- | :---------------------------------- | :---------------------------------------- | | Allowance for Credit Losses on Receivables | $7,218 | $2,811 | $4,407 | - The company considered the impact of COVID-19 but determined that the estimate of credit losses was not significantly impacted[69](index=69&type=chunk) [Note 9—Inventories](index=18&type=section&id=NOTE%209%E2%80%94INVENTORIES) Total inventories increased to **$56.577 million** at September 30, 2020, from **$54.131 million** at December 31, 2019, primarily due to an increase in coal inventory Inventory Components | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :---------------- | :-------------------------------- | :------------------------------- | | Coal | $6,640 | $2,484 | | Supplies | $49,937 | $51,647 | | Total Inventories | $56,577 | $54,131 | - Coal inventory costs are determined by the FIFO method and include labor, supplies, equipment, operating overhead, and depreciation[75](index=75&type=chunk) [Note 10—Accounts Receivable Securitization](index=18&type=section&id=NOTE%2010%E2%80%94ACCOUNTS%20RECEIVABLE%20SECURITIZATION) The company's trade accounts receivable securitization facility was amended in March 2020, extending its maturity to March 27, 2023, with a maximum of **$100 million** in advances and letters of credit, and **$30.100 million** in outstanding letters of credit as of September 30, 2020 - Securitization facility maturity extended to **March 27, 2023**[76](index=76&type=chunk) - Maximum borrowing capacity under the securitization facility is **$100 million**[77](index=77&type=chunk) Securitization Facility Status | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------------------------ | :-------------------------------- | :------------------------------- | | Outstanding Borrowings | $0 | $0 |\ | Letters of Credit Outstanding | $30,100 | $41,211 |\ | Available Borrowing Capacity | $560 | $71 | [Note 11—Property, Plant and Equipment](index=18&type=section&id=NOTE%2011%E2%80%94PROPERTY,%20PLANT%20AND%20EQUIPMENT) Total Property, Plant and Equipment, Net, decreased slightly to **$2.083 billion** at September 30, 2020, from **$2.092 billion** at December 31, 2019, while gross assets under finance leases increased significantly Property, Plant and Equipment, Net | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------------- | :-------------------------------- | :------------------------------- | | Total Property, Plant and Equipment, Net | $2,083,240 | $2,092,165 | - Gross assets under finance leases increased from **$52.729 million** at December 31, 2019, to **$85.908 million** at September 30, 2020[83](index=83&type=chunk) - Amortization expense for assets under finance leases increased for both the three and nine months ended September 30, 2020, compared to 2019[83](index=83&type=chunk) [Note 12—Other Accrued Liabilities](index=19&type=section&id=NOTE%2012%E2%80%94OTHER%20ACCRUED%20LIABILITIES) Total Other Accrued Liabilities increased to **$247.395 million** at September 30, 2020, from **$235.769 million** at December 31, 2019, primarily due to increases in accrued equipment obligations and accrued interest Total Other Accrued Liabilities | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :---------------------------- | :-------------------------------- | :------------------------------- | | Total Other Accrued Liabilities | $247,395 | $235,769 | - Accrued equipment obligations increased from **$0** to **$10.097 million**[84](index=84&type=chunk) - Accrued interest increased from **$6.281 million** to **$9.576 million**[84](index=84&type=chunk) [Note 13—Long-Term Debt](index=19&type=section&id=NOTE%2013%E2%80%94LONG-TERM%20DEBT) Total long-term debt decreased to **$587.020 million** at September 30, 2020, from **$653.802 million** at December 31, 2019, due to debt repurchases and payments, while Senior Secured Credit Facilities were amended to relax covenants and increase interest rates Long-Term Debt | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--------------- | :-------------------------------- | :------------------------------- | | Long-Term Debt | $587,020 | $653,802 | - The company repurchased **$45.176 million** of its 11.00% Senior Secured Second Lien Notes during the nine months ended September 30, 2020, recognizing a gain on debt extinguishment of **$17.911 million**[95](index=95&type=chunk) - Senior Secured Credit Facilities were amended in June 2020, increasing applicable margins and revising financial covenants for eight quarters[87](index=87&type=chunk)[89](index=89&type=chunk) - The company was in compliance with all debt covenants as of September 30, 2020, with a maximum first lien gross leverage ratio of **2.04 to 1.00**, total net leverage ratio of **3.38 to 1.00**, and minimum fixed charge coverage ratio of **1.33 to 1.00**[89](index=89&type=chunk) [Note 14—Commitments and Contingent Liabilities](index=22&type=section&id=NOTE%2014%E2%80%94COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) The company faces ongoing lawsuits, including ERISA violations and potential Coal Act liabilities from the Murray Energy bankruptcy, and has significant financial guarantees and surety bonds totaling **$807.327 million** as of September 30, 2020 - Fitzwater and Casey litigations, alleging ERISA violations in retiree health care benefits, are ongoing, with trial dates set for **November 16, 2020**[101](index=101&type=chunk)[102](index=102&type=chunk) - The company is defending against potential continuing retiree medical liabilities under the Coal Act following Murray Energy's bankruptcy and settlement with the 1992 Benefit Plan[103](index=103&type=chunk)[105](index=105&type=chunk) Total Commitments and Guarantees (as of September 30, 2020) | Type of Commitment | Total Amounts Committed (in thousands) | Less Than 1 Year (in thousands) | 1-3 Years (in thousands) | 3-5 Years (in thousands) | Beyond 5 Years (in thousands) | | :----------------- | :------------------------------------- | :------------------------------ | :----------------------- | :----------------------- | :---------------------------- | | Letters of Credit | $129,226 | $100,831 | $28,395 | $0 | $0 | | Surety Bonds | $667,397 | $610,408 | $56,989 | $0 | $0 | | Guarantees | $10,704 | $6,636 | $3,438 | $398 | $232 | | Total Commitments | $807,327 | $717,875 | $88,822 | $398 | $232 | [Note 15—Fair Value of Financial Instruments](index=25&type=section&id=NOTE%2015%E2%80%94FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) The company measures fair value using a hierarchy of inputs, classifying lease guarantees as Level 3, derivatives (interest rate swaps) as Level 2, and long-term debt fair value using Level 1 or Level 2 inputs Financial Instruments Measured at Fair Value (Recurring Basis) | Description | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :---------------- | :--------------------- | :--------------------- | :--------------------- | | Lease Guarantees | $0 | $0 | $(259) | | Derivatives | $0 | $(3,373) | $0 | Carrying Amounts and Fair Values of Long-Term Debt (Fair Value Option Not Elected) | Metric | September 30, 2020 Carrying Amount (in thousands) | September 30, 2020 Fair Value (in thousands) | December 31, 2019 Carrying Amount (in thousands) | December 31, 2019 Fair Value (in thousands) | | :--------------- | :------------------------------------------------ | :------------------------------------------- | :----------------------------------------------- | :------------------------------------------ | | Long-Term Debt | $645,472 | $491,465 | $696,178 | $642,018 | - Interest rate swaps are valued based on observable market swap rates (Level 2)[117](index=117&type=chunk) [Note 16—Segment Information](index=25&type=section&id=NOTE%2016%E2%80%94SEGMENT%20INFORMATION) CONSOL Energy operates one reportable segment, the Pennsylvania Mining Complex (PAMC), focused on thermal coal, with both PAMC and the "Other" division experiencing revenue declines for the three and nine months ended September 30, 2020 - The Pennsylvania Mining Complex (PAMC) is the sole reportable segment, focused on mining, preparation, and marketing of thermal coal[120](index=120&type=chunk) - The "Other" division includes the CONSOL Marine Terminal, Itmann Mine development, Greenfield Reserves, and various corporate activities[122](index=122&type=chunk) Consolidated Revenue from Contracts with Customers by Segment | Segment | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :------ | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | PAMC | $196,975 | $305,141 | $560,686 | $998,780 | | Other | $17,317 | $16,303 | $50,002 | $50,829 | [Note 17—Additional Information With Respect to Unrestricted Subsidiaries](index=27&type=section&id=NOTE%2017%E2%80%94ADDITIONAL%20INFORMATION%20WITH%20RESPECT%20TO%20UNRESTRICTED%20SUBSIDIARIES) The company provides separate financial information for its "Company and Restricted Subsidiaries" and "Unrestricted Subsidiaries" (Partnership and SPV) as required by debt agreements, detailing the distribution of revenue, expenses, assets, and liabilities - Unrestricted Subsidiaries include the Partnership and the SPV[129](index=129&type=chunk) Consolidated Revenue and Other Income (3 Months Ended Sep 30, 2020) | Metric | Company and Restricted Subsidiaries (in thousands) | Unrestricted Subsidiaries (in thousands) | Consolidated (in thousands) | | :----------------------------- | :------------------------------------------------- | :--------------------------------------- | :-------------------------- | | Total Revenue and Other Income | $184,370 | $58,849 | $243,219 | Consolidated Total Assets (Sep 30, 2020) | Metric | Company and Restricted Subsidiaries (in thousands) | Unrestricted Subsidiaries (in thousands) | Consolidated (in thousands) | | :------------ | :------------------------------------------------- | :--------------------------------------- | :-------------------------- | | TOTAL ASSETS | $1,989,437 | $565,401 | $2,554,838 | [Note 18—Related Party Transactions](index=31&type=section&id=NOTE%2018%E2%80%94RELATED%20PARTY%20TRANSACTIONS) The company's transition services agreement with its former parent expired in February 2019, and its Affiliated Company Credit Agreement with CONSOL Coal Resources LP (CCR) was amended in June 2020 to relax financial covenants and increase interest rates - Transition services agreement with former parent expired in **February 2019**[140](index=140&type=chunk) - Affiliated Company Credit Agreement with CCR was amended in **June 2020**, providing financial covenant relaxation and a **50 basis points** interest rate increase[145](index=145&type=chunk) Interest Incurred under Affiliated Company Credit Agreement | Period | Interest Incurred (in thousands) | | :-------------------------- | :------------------------------- | | 3 Months Ended Sep 30, 2020 | $2,428 | | 3 Months Ended Sep 30, 2019 | $2,003 | | 9 Months Ended Sep 30, 2020 | $6,705 | | 9 Months Ended Sep 30, 2019 | $5,770 | - CCR had a net payable to the company of **$8.035 million** at September 30, 2020, up from **$1.419 million** at December 31, 2019[151](index=151&type=chunk) [Note 19—Stock, Unit and Debt Repurchases](index=33&type=section&id=NOTE%2019%E2%80%94STOCK,%20UNIT%20AND%20DEBT%20REPURCHASES) The Board of Directors expanded the stock, unit, and debt repurchase program to an aggregate limit of **$270 million**, extending the termination date to June 30, 2022, with **$45.176 million** of Senior Secured Second Lien Notes repurchased during the nine months ended September 30, 2020 - Repurchase program expanded to **$270 million**, with termination date extended to **June 30, 2022**[153](index=153&type=chunk) - During the nine months ended September 30, 2020, the company repurchased **$45.176 million** of its 11.00% Senior Secured Second Lien Notes[155](index=155&type=chunk) - No common shares or Partnership units were repurchased during the nine months ended September 30, 2020[155](index=155&type=chunk) [Note 20—Subsequent Events](index=33&type=section&id=NOTE%2020%E2%80%94SUBSEQUENT%20EVENTS) On October 23, 2020, CONSOL Energy announced a definitive merger agreement to acquire all outstanding CCR common units not already owned, in an all-stock transaction valued at approximately **$34.4 million**, expected to close in Q1 2021 - CONSOL Energy entered into a definitive merger agreement to acquire all outstanding CCR common units (not already owned) in an all-stock transaction valued at approximately **$34.4 million**[157](index=157&type=chunk) - The fixed exchange ratio is **0.73 shares** of CONSOL Energy common stock for each Public Common Unit[157](index=157&type=chunk) - CONSOL Energy will issue approximately **8.0 million shares**, representing about **22.2%** of total pro forma outstanding shares[157](index=157&type=chunk) - The transaction is expected to close in **Q1 2021**, contingent on stockholder and unitholder approvals[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and operating results, highlighting the impact of the pending CCR Merger and COVID-19 pandemic, and discussing liquidity, capital resources, and forward-looking statements [CCR Merger](index=34&type=section&id=CCR%20Merger) CONSOL Energy entered into a definitive merger agreement to acquire all outstanding CCR common units not already owned, involving a fixed exchange ratio of **0.73 shares** of CONSOL Energy common stock for each Public Common Unit, with the merger expected to close in Q1 2021 - Merger agreement signed to acquire outstanding CCR common units at a fixed exchange ratio of **0.73 shares** of CONSOL Energy common stock per unit[163](index=163&type=chunk) - Approximately **8.0 million shares** of CONSOL Energy common stock will be issued, representing about **22.2%** of total pro forma outstanding shares[164](index=164&type=chunk) - The transaction is expected to close in **Q1 2021**, contingent on stockholder and unitholder approvals[165](index=165&type=chunk) [COVID-19 Update](index=35&type=section&id=COVID-19%20Update) The COVID-19 pandemic caused a significant decline in coal demand, leading to temporary production curtailments at the Bailey Mine and idled longwalls, with continued negative impacts expected on operations and financial condition - Coal demand experienced an unprecedented decline in Q1 and Q2 2020, hitting its lowest point in May, but improved through Q3[167](index=167&type=chunk) - Production at Bailey Mine was temporarily curtailed for **two weeks**, and **four of five longwalls** were idled for periods in Q2, with **four longwalls** running for most of Q3[166](index=166&type=chunk)[167](index=167&type=chunk) - The company expects continued negative impacts on operational, sales, and financial performance due to the pandemic[167](index=167&type=chunk)[168](index=168&type=chunk) [Our Business](index=35&type=section&id=Our%20Business) CONSOL Energy is a low-cost producer of high-quality bituminous coal in the Appalachian Basin, leveraging its PAMC assets and CONSOL Marine Terminal, with a strategy focused on maximizing cash flow, debt reduction, capital returns, and strategic growth - CONSOL Energy is a leading, low-cost producer of high-quality bituminous coal in the Appalachian Basin[169](index=169&type=chunk) - The Pennsylvania Mining Complex (PAMC) controls **669.4 million tons** of Pittsburgh seam reserves, providing approximately **23.5 years** of full-capacity production[172](index=172&type=chunk) - The company owns or controls **1.5 billion tons** of Greenfield Reserves and is developing the Itmann Mine for high-quality, low-vol coking coal[172](index=172&type=chunk)[173](index=173&type=chunk) - Q3 2020 highlights include improved financial flexibility, resumed second lien debt repurchases, and a rebound in coal sales volume to **4.5 million tons**[177](index=177&type=chunk) [How We Evaluate Our Operations](index=37&type=section&id=How%20We%20Evaluate%20Our%20Operations) Management evaluates operations using financial and operating metrics, including coal production, sales volumes, average revenue per ton, and non-GAAP measures such as cost of coal sold and cash cost of coal sold, to assess performance and financial health - Key metrics include coal production, sales volumes, average revenue per ton, and non-GAAP measures like cost of coal sold and cash cost of coal sold[178](index=178&type=chunk)[179](index=179&type=chunk) - Non-GAAP measures are used to assess operating performance, cash flow generation, debt servicing, and investment opportunities[179](index=179&type=chunk) Reconciliation of Cost of Coal Sold and Cash Cost of Coal Sold to Total Costs and Expenses | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :---------------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total Costs and Expenses | $246,661 | $323,907 | $724,841 | $1,012,355 | | Cost of Coal Sold | $175,669 | $254,328 | $501,851 | $769,688 | | Cash Cost of Coal Sold | $130,037 | $212,063 | $381,005 | $641,554 | Average Margin per Ton Sold and Average Cash Margin per Ton Sold | Metric | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :---------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Tons Sold (in millions) | 4.5 | 6.5 | 12.8 | 20.6 | | Average Revenue per Ton Sold | $40.55 | $46.59 | $42.35 | $47.84 | | Average Cash Cost of Coal Sold per Ton | $28.64 | $32.78 | $29.88 | $31.16 | | Average Cost of Coal Sold per Ton | $38.70 | $39.29 | $39.25 | $37.39 | | Average Margin per Ton Sold | $1.85 | $7.30 | $3.10 | $10.45 | | Average Cash Margin per Ton Sold | $11.91 | $13.81 | $12.47 | $16.68 | [Results of Operations](index=38&type=section&id=Results%20of%20Operations) [Three Months Ended September 30, 2020 Compared with the Three Months Ended September 30, 2019](index=38&type=section&id=Three%20Months%20Ended%20September%2030,%202020%20Compared%20with%20the%20Three%20Months%20Ended%20September%2030,%202019) Net loss attributable to CONSOL Energy Inc. shareholders was **$7 million** for Q3 2020, compared to net income of **$4 million** in Q3 2019, driven by a significant decline in coal revenue and lower margins in the PAMC division, partially offset by improved performance in the Other division [PAMC ANALYSIS](index=38&type=section&id=PAMC%20ANALYSIS%20(3%20Months)) The PAMC division reported a loss before income tax of **$7 million** for Q3 2020, a significant decline from earnings of **$31 million** in Q3 2019, primarily due to a **$118 million** decrease in coal revenue from reduced production and lower natural gas prices PAMC (Loss) Earnings Before Income Tax | Metric | 3 Months Ended Sep 30, 2020 (in millions) | 3 Months Ended Sep 30, 2019 (in millions) | Variance (in millions) | | :------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------- | | (Loss) Earnings Before Income Tax | $(7) | $31 | $(38) | [Coal Production](index=39&type=section&id=Coal%20Production%20(3%20Months)) Coal production from the Pennsylvania Mining Complex decreased by **1,957 thousand tons**, from **6,492 thousand tons** in Q3 2019 to **4,535 thousand tons** in Q3 2020, primarily due to a reduced operating schedule in response to declining global demand from the COVID-19 pandemic Total Tons Produced from PAMC | Mine | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | Variance (in thousands) | | :----------- | :----------------------------------------- | :----------------------------------------- | :---------------------- | | Bailey | 1,808 | 2,782 | (974) | | Enlow Fork | 1,436 | 2,384 | (948) | | Harvey | 1,291 | 1,326 | (35) | | Total | 4,535 | 6,492 | (1,957) | - Production decreased due to a reduced operating schedule in light of declining global demand from the COVID-19 pandemic[194](index=194&type=chunk) [Coal Operations](index=39&type=section&id=Coal%20Operations%20(3%20Months)) Total tons sold decreased by **2.0 million tons** in Q3 2020 compared to Q3 2019, with average revenue per ton sold decreasing by **$6.04** and average cash cost of coal sold per ton decreasing by **$4.14**, resulting in a significant **$5.45** decline in average margin per ton sold PAMC Coal Operations Per Unit Metrics | Metric | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | Variance | | :---------------------------------------------- | :-------------------------- | :-------------------------- | :------- | | Total Tons Sold (in millions) | 4.5 | 6.5 | (2.0) | | Average Revenue per Ton Sold | $40.55 | $46.59 | $(6.04) | | Average Cash Cost of Coal Sold per Ton | $28.64 | $32.78 | $(4.14) | | Average Cost of Coal Sold per Ton | $38.70 | $39.29 | $(0.59) | | Average Margin per Ton Sold | $1.85 | $7.30 | $(5.45) | | Average Cash Margin per Ton Sold | $11.91 | $13.81 | $(1.90) | [Coal Revenue](index=39&type=section&id=Coal%20Revenue%20(3%20Months)) Coal revenue for the PAMC division decreased by **$118 million** to **$184 million** in Q3 2020, from **$302 million** in Q3 2019, due to fewer tons sold and lower pricing, driven by the COVID-19 pandemic and lower natural gas prices - Coal revenue decreased by **$118 million** due to reduced tons sold and lower pricing[191](index=191&type=chunk)[197](index=197&type=chunk) - Lower natural gas prices contributed to electric generation trending toward gas over coal[197](index=197&type=chunk) [Freight Revenue and Freight Expense](index=39&type=section&id=Freight%20Revenue%20and%20Freight%20Expense%20(3%20Months)) Freight revenue and expense both increased by **$9 million** to **$13 million** in Q3 2020, from **$4 million** in Q3 2019, due to increased shipments to customers for whom the company provides transportation services - Freight revenue and expense increased by **$9 million** to **$13 million**, fully offsetting each other[199](index=199&type=chunk) [Miscellaneous Other Income](index=40&type=section&id=Miscellaneous%20Other%20Income%20(3%20Months)) Miscellaneous other income decreased by **$4 million** in Q3 2020, primarily due to the absence of sales of externally purchased coal and customer contract buyouts that occurred in Q3 2019 - **$4 million** decrease in miscellaneous other income due to no sales of externally purchased coal and customer contract buyouts in Q3 2020[201](index=201&type=chunk) [Cost of Coal Sold](index=40&type=section&id=Cost%20of%20Coal%20Sold%20(3%20Months)) Total cost of coal sold decreased by **$78 million** to **$176 million** in Q3 2020, from **$254 million** in Q3 2019, primarily due to reduced production volume and operating days, while average cost of coal sold per ton slightly decreased - Total cost of coal sold decreased by **$78 million**, driven by reduced production volume and operating days[202](index=202&type=chunk) - Average cost of coal sold per ton decreased from **$39.29** to **$38.70**[202](index=202&type=chunk) [Other Costs](index=40&type=section&id=Other%20Costs%20(3%20Months)) Total other costs for the PAMC division remained materially consistent in Q3 2020 compared to Q3 2019 - Total other costs remained materially consistent[203](index=203&type=chunk) [Selling, General, and Administrative Costs](index=40&type=section&id=Selling,%20General,%20and%20Administrative%20Costs%20(3%20Months)) Selling, general and administrative costs for the PAMC division decreased by **$5 million** to **$9 million** in Q3 2020, from **$14 million** in Q3 2019, due to cost reduction initiatives including compensation reductions and discretionary expense curtailment - SG&A costs decreased by **$5 million** due to cost reduction initiatives[204](index=204&type=chunk) [OTHER ANALYSIS](index=40&type=section&id=OTHER%20ANALYSIS%20(3%20Months)) The Other division reported earnings before income tax of **$4 million** for Q3 2020, a significant improvement from a loss of **$22 million** in Q3 2019, primarily driven by a **$14 million** increase in miscellaneous other income from asset sales and a **$7 million** gain on sale of assets Other Division Earnings (Loss) Before Income Tax | Metric | 3 Months Ended Sep 30, 2020 (in millions) | 3 Months Ended Sep 30, 2019 (in millions) | Variance (in millions) | | :------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------- | | Earnings (Loss) Before Income Tax | $4 | $(22) | $26 | [Terminal Revenue](index=41&type=section&id=Terminal%20Revenue%20(3%20Months)) Terminal revenue increased by **$1 million** to **$17 million** in Q3 2020, from **$16 million** in Q3 2019, primarily due to an increase in revenues associated with throughput tons and services not covered by the company's take-or-pay contract - Terminal revenue increased by **$1 million** due to higher throughput tons and services[210](index=210&type=chunk) [Miscellaneous Other Income](index=41&type=section&id=Miscellaneous%20Other%20Income%20(3%20Months)) Miscellaneous other income increased by **$14 million** to **$21 million** in Q3 2020, from **$7 million** in Q3 2019, mainly due to an **$18 million** increase from the sale of certain coal lease contracts, partially offset by a decrease in royalty income - Miscellaneous other income increased by **$14 million**, primarily from the sale of certain coal lease contracts (**$18 million**)[211](index=211&type=chunk) [Gain on Sale of Assets](index=41&type=section&id=Gain%20on%20Sale%20of%20Assets%20(3%20Months)) Gain on sale of assets increased by **$7 million** in Q3 2020, primarily due to the sale of various gas wells and related equipment - Gain on sale of assets increased by **$7 million** due to the sale of gas wells and equipment[212](index=212&type=chunk) [Operating and Other Costs](index=41&type=section&id=Operating%20and%20Other%20Costs%20(3%20Months)) Operating and other costs for the Other division remained materially consistent in Q3 2020 compared to Q3 2019 - Operating and other costs remained materially consistent[213](index=213&type=chunk) [Depreciation, Depletion and Amortization](index=41&type=section&id=Depreciation,%20Depletion%20and%20Amortization%20(3%20Months)) Depreciation, depletion and amortization decreased by **$3 million** in Q3 2020, due to current quarter adjustments to asset retirement obligations based on projected cash outflows - DDA decreased by **$3 million** due to adjustments to asset retirement obligations[215](index=215&type=chunk) [Selling, General and Administrative Costs](index=41&type=section&id=Selling,%20General%20and%20Administrative%20Costs%20(3%20Months)) Selling, general and administrative costs for the Other division increased by **$1 million** in Q3 2020, due to increased resource utilization at the CONSOL Marine Terminal, Itmann Mine, and other business development activities - SG&A costs increased by **$1 million** due to increased resource utilization in various business development activities[217](index=217&type=chunk) [(Gain) Loss on Debt Extinguishment](index=42&type=section&id=(Gain)%20Loss%20on%20Debt%20Extinguishment%20(3%20Months)) A gain on debt extinguishment of **$1 million** was recognized in Q3 2020 from repurchases of Senior Secured Second Lien Notes, compared to a **$1 million** loss in Q3 2019 - **$1 million** gain on debt extinguishment in Q3 2020 vs. **$1 million** loss in Q3 2019, both from repurchases of Second Lien Notes[218](index=218&type=chunk) [Interest Expense, net](index=42&type=section&id=Interest%20Expense,%20net%20(3%20Months)) Interest expense, net, remained materially consistent in Q3 2020 compared to Q3 2019 - Interest expense, net, remained materially consistent[219](index=219&type=chunk) [Nine Months Ended September 30, 2020 Compared with the Nine Months Ended September 30, 2019](index=42&type=section&id=Nine%20Months%20Ended%20September%2030,%202020%20Compared%20with%20the%20Nine%20Months%20Ended%20September%2030,%202019) Net loss attributable to CONSOL Energy Inc. shareholders was **$23 million** for the nine months ended September 30, 2020, compared to net income of **$62 million** in the prior year, primarily due to a significant decline in coal revenue and increased other costs in the PAMC division, partially offset by a substantial gain on debt extinguishment and increased miscellaneous other income in the Other division [PAMC ANALYSIS](index=42&type=section&id=PAMC%20ANALYSIS%20(9%20Months)) The PAMC division reported a loss before income tax of **$18 million** for the nine months ended September 30, 2020, a significant decline from earnings of **$156 million** in the prior year, primarily due to a **$443 million** decrease in coal revenue and a **$44 million** increase in other costs PAMC (Loss) Earnings Before Income Tax | Metric | 9 Months Ended Sep 30, 2020 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | Variance (in millions) | | :------------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------- | | (Loss) Earnings Before Income Tax | $(18) | $156 | $(174) | [Coal Production](index=43&type=section&id=Coal%20Production%20(9%20Months)) Coal production from the Pennsylvania Mining Complex decreased by **7,669 thousand tons**, from **20,564 thousand tons** in the nine months ended September 30, 2019, to **12,895 thousand tons** in 2020, mainly due to the temporary idling of longwalls in response to weakened customer demand from a warmer winter and the COVID-19 pandemic Total Tons Produced from PAMC | Mine | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | Variance (in thousands) | | :----------- | :----------------------------------------- | :----------------------------------------- | :---------------------- | | Bailey | 5,619 | 8,955 | (3,336) | | Enlow Fork | 4,054 | 7,676 | (3,622) | | Harvey | 3,222 | 3,933 | (711) | | Total | 12,895 | 20,564 | (7,669) | - Production decreased due to temporary idling of longwalls in response to weakened customer demand from a warmer winter and the COVID-19 pandemic[232](index=232&type=chunk) [Coal Operations](index=43&type=section&id=Coal%20Operations%20(9%20Months)) Total tons sold decreased by **7.8 million tons** for the nine months ended September 30, 2020, with average revenue per ton sold decreasing by **$5.49** and average cash cost of coal sold per ton decreasing by **$1.28**, resulting in a significant **$7.35** decline in average margin per ton sold PAMC Coal Operations Per Unit Metrics | Metric | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | Variance | | :---------------------------------------------- | :-------------------------- | :-------------------------- | :------- | | Total Tons Sold (in millions) | 12.8 | 20.6 | (7.8) | | Average Revenue per Ton Sold | $42.35 | $47.84 | $(5.49) | | Average Cash Cost of Coal Sold per Ton | $29.88 | $31.16 | $(1.28) | | Average Cost of Coal Sold per Ton | $39.25 | $37.39 | $1.86 | | Average Margin per Ton Sold | $3.10 | $10.45 | $(7.35) | | Average Cash Margin per Ton Sold | $12.47 | $16.68 | $(4.21) | [Coal Revenue](index=43&type=section&id=Coal%20Revenue%20(9%20Months)) Coal revenue for the PAMC division decreased by **$443 million** to **$542 million** for the nine months ended September 30, 2020, from **$985 million** in the prior year, due to reduced tons sold, lower pricing from weakened customer demand, and lower natural gas prices - Coal revenue decreased by **$443 million** due to reduced tons sold, lower pricing, and lower natural gas prices[223](index=223&type=chunk)[235](index=235&type=chunk) [Freight Revenue and Freight Expense](index=43&type=section&id=Freight%20Revenue%20and%20Freight%20Expense%20(9%20Months)) Freight revenue and expense both increased by **$5 million** to **$19 million** for the nine months ended September 30, 2020, from **$14 million** in the prior year, due to increased shipments to customers for whom the company provides transportation services - Freight revenue and expense increased by **$5 million** to **$19 million**, fully offsetting each other[237](index=237&type=chunk) [Miscellaneous Other Income](index=44&type=section&id=Miscellaneous%20Other%20Income%20(9%20Months)) Miscellaneous other income increased by **$27 million** to **$41 million** for the nine months ended September 30, 2020, from **$14 million** in the prior year, primarily due to additional customer contract buyouts - Miscellaneous other income increased by **$27 million**, primarily from additional customer contract buyouts[238](index=238&type=chunk) [Cost of Coal Sold](index=44&type=section&id=Cost%20of%20Coal%20Sold%20(9%20Months)) Total cost of coal sold decreased by **$268 million** to **$502 million** for the nine months ended September 30, 2020, from **$770 million** in the prior year, due to decreased production activity, though average cost per ton increased - Total cost of coal sold decreased by **$268 million** due to decreased production[239](index=239&type=chunk) - Average cost of coal sold per ton increased from **$37.39** to **$39.25** due to decreased production[239](index=239&type=chunk) [Other Costs](index=44&type=section&id=Other%20Costs%20(9%20Months)) Total other costs increased by **$44 million** for the nine months ended September 30, 2020, primarily due to the temporary idling of longwalls at the Bailey and Enlow Fork mines in response to the COVID-19 pandemic - Total other costs increased by **$44 million**, mainly due to temporary idling of longwalls from the COVID-19 pandemic[240](index=240&type=chunk) [Selling, General, and Administrative Costs](index=44&type=section&id=Selling,%20General,%20and%20Administrative%20Costs%20(9%20Months)) Selling, general and administrative costs for the PAMC division decreased by **$19 million** to **$31 million** for the nine months ended September 30, 2020, from **$50 million** in the prior year, due to reduced Performance Incentive Plan expenses and other cost reduction initiatives - SG&A costs decreased by **$19 million** due to reduced Performance Incentive Plan expenses and cost reduction initiatives[241](index=241&type=chunk) [Interest Expense, net](index=44&type=section&id=Interest%20Expense,%20net%20(9%20Months)) Interest expense, net, increased by **$1 million** for the nine months ended September 30, 2020, primarily due to obligations under various finance leases - Interest expense, net, increased by **$1 million** due to finance lease obligations[242](index=242&type=chunk) [OTHER ANALYSIS](index=44&type=section&id=OTHER%20ANALYSIS%20(9%20Months)) The Other division reported a loss before income tax of **$10 million** for the nine months ended September 30, 2020, a significant improvement from a loss of **$80 million** in the prior year, driven by an **$18 million** gain on debt extinguishment and a **$13 million** gain on sale of assets Other Division Loss Before Income Tax | Metric | 9 Months Ended Sep 30, 2020 (in millions) | 9 Months Ended Sep 30, 2019 (in millions) | Variance (in millions) | | :--------------------- | :---------------------------------------- | :---------------------------------------- | :--------------------- | | Loss Before Income Tax | $(10) | $(80) | $70 | [Terminal Revenue](index=45&type=section&id=Terminal%20Revenue%20(9%20Months)) Terminal revenue decreased by **$2 million** to **$49 million** for the nine months ended September 30, 2020, from **$51 million** in the prior year, primarily due to a decrease in revenues associated with throughput tons and services not covered by the company's take-or-pay contract - Terminal revenue decreased by **$2 million** due to lower throughput tons and services[247](index=247&type=chunk) [Miscellaneous Other Income](index=45&type=section&id=Miscellaneous%20Other%20Income%20(9%20Months)) Miscellaneous other income increased by **$9 million** to **$31 million** for the nine months ended September 30, 2020, from **$22 million** in the prior year, mainly due to an **$18 million** increase from the sale of certain coal lease contracts, partially offset by a **$7 million** decrease in royalty income - Miscellaneous other income increased by **$9 million**, driven by **$18 million** from coal lease contract sales, offset by a **$7 million** decrease in royalty income[248](index=248&type=chunk) [Gain on Sale of Assets](index=45&type=section&id=Gain%20on%20Sale%20of%20Assets%20(9%20Months)) Gain on sale of assets increased by **$13 million** for the nine months ended September 30, 2020, primarily due to the sale of various gas wells and related equipment - Gain on sale of assets increased by **$13 million** due to the sale of gas wells and equipment[249](index=249&type=chunk) [Operating and Other Costs](index=45&type=section&id=Operating%20and%20Other%20Costs%20(9%20Months)) Operating and other costs decreased by **$4 million** to **$58 million** for the nine months ended September 30, 2020, from **$62 million** in the prior year, primarily due to a **$9 million** decrease in employee-related legacy liability expense - Operating and other costs decreased by **$4 million**, mainly due to a **$9 million** decrease in employee-related legacy liability expense[250](index=250&type=chunk)[251](index=251&type=chunk) [Depreciation, Depletion and Amortization](index=46&type=section&id=Depreciation,%20Depletion%20and%20Amortization%20(9%20Months)) Depreciation, depletion and amortization decreased by **$4 million** for the nine months ended September 30, 2020, due to current quarter adjustments to asset retirement obligations - DDA decreased by **$4 million** due to adjustments to asset retirement obligations[252](index=252&type=chunk) [Selling, General and Administrative Costs](index=46&type=section&id=Selling,%20General%20and%20Administrative%20Costs%20(9%20Months)) Selling, general and administrative costs for the Other division increased by **$6 million** for the nine months ended September 30, 2020, due to increased resource utilization in various business development activities - SG&A costs increased by **$6 million** due to increased resource utilization in business development activities[253](index=253&type=chunk) [(Gain) Loss on Debt Extinguishment](index=46&type=section&id=(Gain)%20Loss%20on%20Debt%20Extinguishment%20(9%20Months)) A gain on debt extinguishment of **$18 million** was recognized for the nine months ended September 30, 2020, from repurchases of Senior Secured Second Lien Notes, compared to a **$25 million** loss in the prior year from repurchases and debt refinancing - **$18 million** gain on debt extinguishment in 2020 vs. **$25 million** loss in 2019[254](index=254&type=chunk)[255](index=255&type=chunk) [Interest Expense, net](index=46&type=section&id=Interest%20Expense,%20net%20(9%20Months)) Interest expense, net, decreased by **$5 million** for the nine months ended September 30, 2020, primarily due to the **$110 million** required repayment on the Term Loan B Facility and debt refinancing in 2019, as well as repurchases of Second Lien Notes - Interest expense, net, decreased by **$5 million** due to Term Loan B repayment and debt refinancing in 2019, and Second Lien Notes repurchases[256](index=256&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company's total liquidity was **$323 million** at September 30, 2020, including **$22 million** in cash, with the COVID-19 pandemic negatively impacting coal demand and liquidity, though the CARES Act is expected to provide benefits - Total liquidity was **$323 million** at September 30, 2020, including **$22 million** of cash and cash equivalents[259](index=259&type=chunk) - The **$400 million** revolving credit facility had no borrowings outstanding and **$99 million** in letters of credit issued, leaving **$301 million** of unused capacity at September 30, 2020[259](index=259&type=chunk)[283](index=283&type=chunk) - The CARES Act is expected to reduce the company's cash tax burden for 2019 and 2020, providing additional free cash flow and payroll ret

& CONSOL ENERGY. | --- | --- | --- | --- | --- | |-------|-------|--------|---------------------|-----------------| | | | | | | | | | | | | | | | nd 2 | Quarter 2020 | | | | | | Earnings Supplement | | | | | | | August 10, 2020 | Disclaimer This presentation contains statements, estimates and projections which are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended). Statements that are not historical are forward-looking, and include, without limitation, ...

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 June 30, 2020 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 ___________________ ...

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, 2020 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 __________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________ FORM 10-K __________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 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 ________________________ ...

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 September 30, 2019 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 ______________ ...

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 June 30, 2019 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 ___________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________ FORM 10-Q __________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 2019 OR o 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 __________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________ FORM 10-K __________________________________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR o 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 ________________________ ...