Note 17 - Segment Information

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 17—SEGMENT INFORMATION:

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

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

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

Reportable segment results for the three months ended June 30, 2021 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	258,482	$	—	$	1,350		$	—	$	259,832	(A)
Terminal Revenue		—		17,380		—			—		17,380
Freight Revenue		26,010		—		—			—		26,010
Total Revenue from Contracts with Customers	$	284,492	$	17,380	$	1,350		$	—	$	303,222
Adjusted EBITDA	$	78,267	$	10,965	$	(4,815	)	$	—	$	84,417
Segment Assets	$	1,799,848	$	104,848	$	653,235		$	—	$	2,557,931
Depreciation, Depletion and Amortization	$	50,169	$	1,200	$	830		$	—	$	52,199
Capital Expenditures	$	39,874	$	52	$	3,729		$	—	$	43,655

Reportable segment results for the three months ended June 30, 2020 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	102,026	$	—	$	287		$	—	$	102,313	(A)
Terminal Revenue		—		15,898		—			—		15,898
Freight Revenue		3,085		—		—			—		3,085
Total Revenue from Contracts with Customers	$	105,111	$	15,898	$	287		$	—	$	121,296
Adjusted EBITDA	$	26,882	$	10,660	$	(3,297	)	$	—	$	34,245
Segment Assets	$	1,889,557	$	99,942	$	576,633		$	—	$	2,566,132
Depreciation, Depletion and Amortization	$	46,793	$	1,260	$	(1,898	)	$	—	$	46,155
Capital Expenditures	$	16,262	$	514	$	2,493		$	—	$	19,269

Reportable segment results for the six months ended June 30, 2021 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	542,948	$	—	$	2,419		$	—	$	545,367	(A)
Terminal Revenue		—		35,592		—			—		35,592
Freight Revenue		53,023		—		—			—		53,023
Total Revenue from Contracts with Customers	$	595,971	$	35,592	$	2,419		$	—	$	633,982
Adjusted EBITDA	$	177,451	$	22,926	$	(9,245	)	$	—	$	191,132
Segment Assets	$	1,799,848	$	104,848	$	653,235		$	—	$	2,557,931
Depreciation, Depletion and Amortization	$	104,950	$	2,414	$	4,732		$	—	$	112,096
Capital Expenditures	$	52,453	$	112	$	4,890		$	—	$	57,455

Reportable segment results for the six months ended June 30, 2020 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	357,478	$	—	$	287		$	—	$	357,765	(A)
Terminal Revenue		—		32,399		—			—		32,399
Freight Revenue		6,232		—		—			—		6,232
Total Revenue from Contracts with Customers	$	363,710	$	32,399	$	287		$	—	$	396,396
Adjusted EBITDA	$	90,460	$	21,214	$	(14,495	)	$	—	$	97,179
Segment Assets	$	1,889,557	$	99,942	$	576,633		$	—	$	2,566,132
Depreciation, Depletion and Amortization	$	95,210	$	2,517	$	3,371		$	—	$	101,098
Capital Expenditures	$	36,954	$	620	$	8,873		$	—	$	46,447

(A) For the three and six months ended June 30, 2021 and 2020, the PAMC segment had revenues from the following customers, each comprising over 10% of the Company's total sales:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Customer A	$	32,236		*	$	89,916	$	48,829
Customer B	$	38,957	$	30,032	$	72,196	$	134,386
Customer C	$	34,439	$	14,060	$	71,038	$	49,743
Customer D	$	37,121		*	$	81,357		*
Customer E	$	30,439		*		*		*

* Revenues from these customers during the periods presented were less than 10% of the Company's total sales.

Reconciliation of Segment Information to Consolidated Amounts:

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
(Loss) Earnings Before Income Tax	$	(4,721	)	$	(28,746	)	$	26,868		$	(24,363	)
Interest Expense, net		16,187			14,722			31,448			30,393
Gain on Debt Extinguishment		(106	)		—			(789	)		(16,833	)
Interest Income		(811	)		(122	)		(1,669	)		(366	)
Depreciation, Depletion and Amortization		52,199			46,155			112,096			101,098
Unrealized Loss on Commodity Derivative Instruments		20,437			—			20,437			—
Pension Settlement		22			—			22			—
Stock/Unit-Based Compensation		1,210			2,236			2,719			7,250
Adjusted EBITDA	$	84,417		$	34,245		$	191,132		$	97,179