Note 17 - Segment Information

9 Months Ended

Sep. 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 power generators, industrial end-users 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 relatively small contribution to the Company’s Adjusted EBITDA during those periods. 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 September 30, 2021 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	256,326	$	—	$	2,234		$	—	$	258,560
Terminal Revenue		—		14,108		—			—		14,108
Freight Revenue		19,348		—		—			—		19,348
Total Revenue from Contracts with Customers	$	275,674	$	14,108	$	2,234		$	—	$	292,016
Adjusted EBITDA	$	69,492	$	7,319	$	(10,247	)	$	—	$	66,564
Segment Assets	$	1,763,319	$	105,134	$	721,294		$	—	$	2,589,747
Depreciation, Depletion and Amortization	$	50,837	$	1,202	$	3,938		$	—	$	55,977
Capital Expenditures	$	30,665	$	453	$	14,745		$	—	$	45,863

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

	PAMC		CONSOL Marine Terminal		Other		Adjustments and Eliminations		Consolidated
Coal Revenue	$	184,066	$	—	$	309	$	—	$	184,375
Terminal Revenue		—		17,008		—		—		17,008
Freight Revenue		12,909		—		—		—		12,909
Total Revenue from Contracts with Customers	$	196,975	$	17,008	$	309	$	—	$	214,292
Adjusted EBITDA	$	45,272	$	11,342	$	11,684	$	—	$	68,298
Segment Assets	$	1,878,350	$	105,405	$	571,083	$	—	$	2,554,838
Depreciation, Depletion and Amortization	$	49,944	$	1,283	$	3,732	$	—	$	54,959
Capital Expenditures	$	15,733	$	740	$	3,035	$	—	$	19,508

Reportable segment results for the nine months ended September 30, 2021 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	799,274	$	—	$	4,653		$	—	$	803,927
Terminal Revenue		—		49,700		—			—		49,700
Freight Revenue		72,371		—		—			—		72,371
Total Revenue from Contracts with Customers	$	871,645	$	49,700	$	4,653		$	—	$	925,998
Adjusted EBITDA	$	246,943	$	30,244	$	(19,491	)	$	—	$	257,696
Segment Assets	$	1,763,319	$	105,134	$	721,294		$	—	$	2,589,747
Depreciation, Depletion and Amortization	$	155,787	$	3,616	$	8,670		$	—	$	168,073
Capital Expenditures	$	83,118	$	565	$	19,635		$	—	$	103,318

Reportable segment results for the nine months ended September 30, 2020 are:

	PAMC		CONSOL Marine Terminal		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	541,545	$	—	$	595		$	—	$	542,140
Terminal Revenue		—		49,407		—			—		49,407
Freight Revenue		19,141		—		—			—		19,141
Total Revenue from Contracts with Customers	$	560,686	$	49,407	$	595		$	—	$	610,688
Adjusted EBITDA	$	135,732	$	32,556	$	(2,811	)	$	—	$	165,477
Segment Assets	$	1,878,350	$	105,405	$	571,083		$	—	$	2,554,838
Depreciation, Depletion and Amortization	$	145,154	$	3,800	$	7,103		$	—	$	156,057
Capital Expenditures	$	52,687	$	1,360	$	11,908		$	—	$	65,955

For the three and nine months ended September 30, 2021 and 2020, the Company's reportable segments had revenues from the following customers, each comprising over 10% of the Company's total sales:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Customer A	$	43,947	$	45,818	$	133,863	$	94,647
Customer B	$	31,520		*	$	114,865	$	183,560
Customer C	$	39,216	$	36,888	$	110,253	$	86,631
Customer D		*		*	$	140,314		*

*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 September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Loss Before Income Tax	$	(154,047	)	$	(3,442	)	$	(127,179	)	$	(27,805	)
Interest Expense, net		16,045			15,723			47,493			46,116
Loss (Gain) on Debt Extinguishment		132			(1,078	)		(657	)		(17,911	)
Interest Income		(737	)		(76	)		(2,406	)		(442	)
Depreciation, Depletion and Amortization		55,977			54,959			168,073			156,057
Unrealized Loss on Commodity Derivative Instruments		147,306			—			167,743			—
Pension Settlement		—			—			22			—
Stock/Unit-Based Compensation		1,888			2,212			4,607			9,462
Adjusted EBITDA	$	66,564		$	68,298		$	257,696		$	165,477