CONSOL Energy (US:CEIX)2026-02-17 22:03Merger and Acquisition - The Company completed a merger with Arch on January 14, 2025, with Arch becoming a wholly-owned subsidiary [346]. - The Company expanded its metallurgical coal market presence through a Merger, acquiring two longwall mines and two continuous miner mines in West Virginia [362]. - The Company completed a Merger with Arch on January 14, 2025, increasing its Revolving Credit Facility from $355 million to $600 million and extending the maturity date to April 30, 2029 [398]. Financial Performance - Revenues for the year ended December 31, 2025, totaled $4,164.775 million, with realized coal revenue of $3,476.341 million [355]. - In comparison, revenues for the year ended December 31, 2024, were $2,164.406 million, with realized coal revenue of $1,786.926 million [357]. - Consolidated revenues for the year ended December 31, 2025, were $2.0 billion greater than the previous year, with legacy Arch operations contributing $2,048 million primarily from coal sales [363]. - Adjusted EBITDA for the year ended December 31, 2025, was $512,066 thousand, compared to $655,488 thousand in 2024, reflecting a decrease due to various adjustments [360]. - The legacy CONSOL's PAMC revenues decreased by $32 million in 2025, primarily due to reduced realization despite higher sales tons [363]. Segment Performance - Following the merger, the Company now consists of four reportable segments: High CV Thermal, Metallurgical, Powder River Basin, and Core Marine Terminal [347]. - The realized coal revenue per ton sold for the High CV Thermal segment was $60.34, while for the Metallurgical segment it was $102.36 [355]. - The Company reported a total of 30,558 tons sold in the High CV Thermal segment and 9,038 tons sold in the Metallurgical segment for the year ended December 31, 2025 [355]. - Adjusted EBITDA for the High CV Thermal segment decreased by $130 million, with realized coal revenue per ton sold dropping by $5.20 [378]. - The Metallurgical segment generated additional sales volumes of 8.4 million tons, resulting in realized coal revenue of $837 million and cash costs of $775 million [379]. - The PRB segment produced and sold 48.9 million tons, achieving an Adjusted EBITDA of $64 million [381]. - Core Marine Terminal segment Adjusted EBITDA was $57 million, with throughput volumes increasing to 18.1 million tons [382]. Costs and Expenses - Cost of sales increased by $2.1 billion in 2025 compared to 2024, with legacy Arch operations incurring $2,025 million in cost of sales [364]. - General and administrative costs rose to $215 million in 2025, up from $115 million in 2024, primarily due to $66 million in non-recurring Merger-related transaction costs [366]. - Depreciation, depletion, and amortization expenses increased to $621 million in 2025 from $224 million in 2024, largely due to assets acquired in the Merger [365]. - The 1974 UMWA Pension Plan litigation expense is $68 million, representing the net present value of payments over five years [370]. Cash Flow and Liquidity - Net cash provided by operating activities decreased by $170 million to $306 million for the year ended December 31, 2025, primarily due to non-recurring Merger-related expenditures [407]. - Net cash provided by investing activities changed by $213 million, mainly due to cash acquired in the Merger and a $75 million liquidation of U.S. Treasury securities [408]. - Total liquidity as of December 31, 2025, was $949 million, comprising $432 million in cash and cash equivalents, $185 million from the Receivables Financing Agreement, and $600 million from the Revolving Credit Facility, after accounting for $268 million in outstanding letters of credit [399]. - The Company expects to maintain adequate liquidity through net cash from operating activities and available credit facilities to meet short-term and long-term capital needs [397]. Debt and Equity - The Company has total long-term debt and finance lease obligations of $459 million as of December 31, 2025, including a current portion of $98 million [428]. - The Company's first lien gross leverage ratio was 0.28 to 1.00, and the total net leverage ratio was 0.03 to 1.00 as of December 31, 2025, indicating strong financial health [416]. - Total equity attributable to the Company increased to $3,678 million at December 31, 2025, up from $1,568 million at December 31, 2024 [431]. - The Company repurchased 3,088,520 shares of common stock at an average price of $72.61 per share during the year ended December 31, 2025 [430]. Regulatory and Risk Management - The Company is subject to new regulations requiring self-insured coal mine operators to post additional security for Black Lung benefit liabilities, which could impact future cash flows [405]. - The Company has established risk management policies to mitigate exposure to commodity price fluctuations in coal sales [437]. - The Company has experienced rising insurance premiums and reduced coverage, but recent stabilization in the insurance market may alleviate some cost burdens [403]. Future Obligations and Projections - The Company expects to satisfy material cash requirements of $122 million for long-term debt, $69 million for employee-related liabilities, and $97 million for environmental obligations in the next 12 months [427]. - The Company has a $132 million fund for future reclamation costs and a $17 million Global Water Treatment Trust Fund for water treatment obligations [404]. Currency and Market Impact - Currency fluctuations may adversely affect the competitiveness of the Company's coal in international markets [439]. - International competitors may gain a competitive advantage if their currencies decline against the U.S. dollar [439]. - A significant decline in the value of overseas customers' currencies could lead them to demand lower prices for coal [439].