CONSOL Energy (CEIX) - 2024 Q4 - Annual Results

Core Natural Resources Q4 2024 Earnings Report Report Highlights and Management Comments Core Natural Resources announced Q4 2024 results, highlighting a new capital return framework with a $1 billion share buyback, significant synergy capture, and resumed Leer South mine development - Adopted a new capital return framework heavily weighted toward share repurchases[1] - The Board of Directors authorized a $1 billion share repurchase program[1][3] - Resumed development work with continuous miner units at the Leer South mine following a combustion-related event[1][4] - Management reports an excellent start in integrating the combined portfolio and capturing synergies from the recent transformational merger[2] Shareholder Return Framework The company established a new capital return framework targeting approximately 75% of free cash flow to shareholders, primarily via a $1.0 billion share repurchase program and a $0.10 per share quarterly dividend - The new framework targets returning ~75% of free cash flow to shareholders, with a majority allocated to share repurchases[3] - The board has authorized a total of $1.0 billion for share repurchases[3] - A sustaining quarterly dividend of $0.10 per share has been established[3] Operational Updates Core safely re-entered the Leer South mine, resuming development with longwall production expected mid-year, and has already captured one-third of the projected $110-$140 million in merger synergies - Leer South Mine: Following a combustion-related event, the mine has been safely re-entered, and development work has resumed, with longwall production on track to resume mid-year[4][5] - Synergy Capture: In the first five weeks post-merger, the company has locked in approximately one-third of the value from its projected synergy range of $110 million to $140 million[5] Financial and Liquidity Update Core's post-merger liquidity stands at $1.1 billion, supported by an upsized $600 million revolving credit facility, with 2025 projections including $300-$330 million in capital expenditures and $130 million in one-time merger and Leer South event costs | Metric | Value | | :--- | :--- | | Total Liquidity (as of Jan 14, 2025) | $1.1 billion | | Cash and Equivalents | $590 million | | Revolving Credit Facility | $600 million | | Maturity | April 30, 2029 | | Projected 2025 Expenditures | | | Capital Expenditures | $300 - $330 million | | Merger-related Expenditures | ~$100 million | | Leer South Event Expenditures | ~$30 million | - Declared a quarterly dividend of $0.10 per share, payable on March 17, 2025[10] Operating Results and Market Dynamics Legacy CONSOL Energy reported Q4 2024 GAAP net income of $30.8 million and adjusted EBITDA of $170.0 million, with PAMC selling 7.0 million tons, amidst soft coal markets buffered by Core's committed thermal position and robust long-term metallurgical outlook Legacy CONSOL Q4 2024 Performance | Metric | Value | | :--- | :--- | | GAAP Net Income | $30.8 million | | Adjusted EBITDA | $170.0 million | | PAMC Tons Sold | 7.0 million | | PAMC Avg. Revenue per Ton | $63.28 | | PAMC Avg. Cash Cost per Ton | $36.46 | - Current market conditions are soft, with API-2 and High-Vol A coking coal prices near three-year lows[12] - The high C.V. thermal segment has a strong committed and priced position of ~24.0 million tons at a projected price of $61-$63 per ton, counterbalancing market softness[13] - Long-term metallurgical market dynamics are robust, driven by new blast furnace capacity in Southeast Asia, rising Indian imports, and constrained supply from key producing countries[14] 2025 Guidance Core Natural Resources provided full-year 2025 guidance, projecting total sales volume between 72.5 and 79.0 million tons, detailing segment-specific volumes, committed positions, and average cash costs, with total capital expenditures forecasted at $300-$330 million Core Natural Resources 2025 Full-Year Guidance | Category | Metric | Value | | :--- | :--- | :--- | | Sales Volume (millions of tons) | | | | | Coking | 7.5 - 8.0 | | | High C.V. Thermal | 29.0 - 31.0 | | | Powder River Basin | 36.0 - 40.0 | | | Total | 72.5 - 79.0 | | Metallurgical | | | | | Total Committed (millions of tons) | 6.6 | | | Average Cash Cost ($/ton) | $96.00 - $100.00 | | High C.V. Thermal | | | | | Total Committed (millions of tons) | 24.6 | | | Average Cash Cost ($/ton) | $38.00 - $40.00 | | Powder River Basin | | | | | Total Committed (millions of tons) | 36.9 | | | Average Cash Cost ($/ton) | $13.75 - $14.25 | | Corporate ($ millions) | | | | | Capital Expenditures | $300 - $330 | Outlook Management expressed strong confidence in Core's future, citing significant progress in integration, capital returns, and synergy capture, positioning the company's complementary coal segments and low-cost operations for long-term value generation - Management highlighted key achievements since the merger[22] - Swift integration efforts[22] - Adopted a capital return framework with a $1 billion buyback authorization[22] - Captured one-third of projected synergies[22] - Built a strong cash balance and enhanced capital structure[22] - The company is confident that its two complementary operating segments create a unique opportunity for value creation and cash generation in the years ahead[18] Pre-Merger CONSOL Energy Financial Statements Condensed Consolidated Statements of Income This section presents CONSOL Energy Inc.'s pre-merger income statement, showing 2024 total revenue of $2.24 billion (down from $2.57 billion in 2023) and net income of $286.4 million ($9.61/share diluted), a decrease from $655.9 million in 2023 CONSOL Energy Inc. Statement of Income (in thousands, except per share data) | | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | For the Year Ended Dec 31, 2024 | For the Year Ended Dec 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue and Other Income | $595,291 | $649,439 | $2,236,311 | $2,568,877 | | Total Costs and Expenses | $563,637 | $470,591 | $1,905,664 | $1,791,005 | | Net Income | $30,821 | $157,067 | $286,405 | $655,892 | | Diluted EPS | $1.04 | $5.05 | $9.61 | $19.79 | Condensed Consolidated Balance Sheets This section presents CONSOL Energy Inc.'s pre-merger balance sheet as of December 31, 2024, showing total assets increased to $2.88 billion (from $2.68 billion) and total equity grew to $1.57 billion (from $1.34 billion), primarily due to increased cash and cash equivalents CONSOL Energy Inc. Balance Sheet (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $785,958 | $601,006 | | Cash and Cash Equivalents | $408,240 | $199,371 | | TOTAL ASSETS | $2,879,543 | $2,675,003 | | Total Current Liabilities | $518,684 | $443,724 | | Total Long-Term Debt | $94,794 | $186,067 | | Total Equity | $1,568,247 | $1,343,442 | | TOTAL LIABILITIES AND EQUITY | $2,879,543 | $2,675,003 | Condensed Consolidated Statements of Cash Flows This section details CONSOL Energy Inc.'s pre-merger cash flows, showing 2024 net cash from operating activities at $476.4 million (down from $857.9 million), with net cash increasing by $204.3 million after investing and financing activities CONSOL Energy Inc. Statement of Cash Flows (in thousands) | | For the Year Ended Dec 31, 2024 | For the Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $476,390 | $857,949 | | Net Cash Used in Investing Activities | ($165,031) | ($259,432) | | Net Cash Used in Financing Activities | ($107,085) | ($682,201) | | Net Increase (Decrease) in Cash | $204,274 | ($83,684) | Reconciliation of Non-GAAP Financial Measures Reconciliation of Cost of Coal Sold This section reconciles the non-GAAP 'Cash Cost of Coal Sold' to GAAP 'Operating and Other Costs' for the PAMC segment, showing Q4 2024 Average Cash Cost of Coal Sold per Ton at $36.46, a slight increase from Q4 2023 PAMC Segment Cost Reconciliation (Q4 2024, in thousands, except per ton) | | Value | | :--- | :--- | | Operating and Other Costs (GAAP) | $385,462 | | Less: Other Costs | ($130,270) | | Cash Cost of Coal Sold (Non-GAAP) | $255,192 | | Total Tons Sold (millions) | 7.0 | | Average Cash Cost of Coal Sold per Ton | $36.46 | Reconciliation of Adjusted EBITDA This section reconciles the non-GAAP 'Adjusted EBITDA' to GAAP 'Net Income', showing Q4 2024 consolidated Net Income of $30.8 million adjusted for various items to reach a consolidated Adjusted EBITDA of $170.0 million Consolidated Adjusted EBITDA Reconciliation (Q4 2024, in thousands) | | Value | | :--- | :--- | | Net Income (GAAP) | $30,821 | | Add: Interest, Taxes, DD&A, etc. | $61,237 | | EBITDA | $92,058 | | Add: Stock-Based Comp, Merger Expenses, Litigation | $77,961 | | Adjusted EBITDA (Non-GAAP) | $170,019 | Cautionary Statement This section provides a standard cautionary statement, noting that forward-looking statements are subject to risks and uncertainties, including merger integration, synergy realization, Leer South mine operations, and coal price volatility - Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties[32] - Key risks include: merger integration success, synergy realization, Leer South mine resumption timing, coal price changes, and regulatory changes[32]