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Note 15 - Segment Information
 6 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 15—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 presently 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. 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 and Resources, closed 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.

 

Reportable segment results for the three months ended June 30, 2022 are:

 

  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Adjustments and Eliminations

  

Consolidated

 

Coal Revenue

 $518,942  $—  $13,750  $—  $532,692 

Terminal Revenue

  —   21,779   —   —   21,779 

Freight Revenue

  47,386   —   3,025   —   50,411 

Total Revenue from Contracts with Customers

 $566,328  $21,779  $16,775  $—  $604,882 

Adjusted EBITDA(a)

 $203,980  $15,077  $(2,718) $—  $216,339 

Segment Assets

 $1,735,635  $80,238  $904,613  $—  $2,720,486 

Depreciation, Depletion and Amortization

 $49,465  $1,142  $7,273  $—  $57,880 

Capital Expenditures

 $21,673  $188  $17,557  $—  $39,418 

 

(a) Refer to “Reconciliation of Segment Information to Consolidated Amounts” for the reconciliation of Adjusted EBITDA, a non-GAAP measure, to its most directly comparable GAAP measure.

 

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 

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(a)

 $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 

 

(a) Refer to “Reconciliation of Segment Information to Consolidated Amounts” for the reconciliation of Adjusted EBITDA, a non-GAAP measure, to its most directly comparable GAAP measure.

 

Reportable segment results for the six months ended June 30, 2022 are:

 

  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Adjustments and Eliminations

  

Consolidated

 

Coal Revenue

 $991,903  $—  $17,157  $—  $1,009,060 

Terminal Revenue

  —   43,176   —   —   43,176 

Freight Revenue

  85,775   —   3,025   —   88,800 

Total Revenue from Contracts with Customers

 $1,077,678  $43,176  $20,182  $—  $1,141,036 

Adjusted EBITDA(a)

 $362,239  $29,554  $(6,224) $—  $385,569 

Segment Assets

 $1,735,635  $80,238  $904,613  $—  $2,720,486 

Depreciation, Depletion and Amortization

 $100,421  $2,307  $11,106  $—  $113,834 

Capital Expenditures

 $34,651  $360  $41,050  $—  $76,061 

 

(a) Refer to “Reconciliation of Segment Information to Consolidated Amounts” for the reconciliation of Adjusted EBITDA, a non-GAAP measure, to its most directly comparable GAAP measure.

 

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 

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(a)

 $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 

 

(a) Refer to “Reconciliation of Segment Information to Consolidated Amounts” for the reconciliation of Adjusted EBITDA, a non-GAAP measure, to its most directly comparable GAAP measure.

 

For the three and six months ended June 30, 2022 and 2021, the Company's reportable segments 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,

 
  

2022

  

2021

  

2022

  

2021

 

Customer A

 $124,469  $40,996  $211,055   * 

Customer B

 $67,174  $44,346   *  $83,345 

Customer C

 $64,874  $32,236  $131,164  $89,916 

Customer D

  *  $49,752   *  $112,321 

Customer E

  *  $34,439   *  $71,038 

 

*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

 

Adjusted EBITDA is a non-GAAP measure and is presented in the following tables to reconcile the segment operating performance measure to its most directly comparable GAAP measure, Net Income (Loss).

 

  

Three Months Ended June 30, 2022

 
  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Total Company

 

Net Income (Loss)

 $159,404  $12,354  $(45,467) $126,291 
                 

Add: Income Tax Expense

  —   —   23,223   23,223 

Add: Interest Expense, net

  68   1,530   11,523   13,121 

Less: Interest Income

  (452)  —   (987)  (1,439)

Earnings (Loss) Before Interest & Taxes (EBIT)

  159,020   13,884   (11,708)  161,196 
                 

Add: Depreciation, Depletion & Amortization

  49,465   1,142   7,273   57,880 
                 

Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA)

 $208,485  $15,026  $(4,435) $219,076 
                 

Adjustments:

                

Stock-Based Compensation

 $1,066  $51  $152  $1,269 

Loss on Debt Extinguishment

  —   —   1,565   1,565 

Unrealized Mark-to-Market Gain on Commodity Derivative Instruments

  (5,571)  —   —   (5,571)

Total Pre-tax Adjustments

  (4,505)  51   1,717   (2,737)
                 

Adjusted EBITDA

 $203,980  $15,077  $(2,718) $216,339 

 

  

Three Months Ended June 30, 2021

 
  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Total Company

 

Net Income (Loss)

 $6,166  $8,181  $(10,175) $4,172 
                 

Less: Income Tax Benefit

  —   —   (8,893)  (8,893)

Add: Interest Expense, net

  478   1,536   14,173   16,187 

Less: Interest Income

  (36)  —   (775)  (811)

Earnings (Loss) Before Interest & Taxes (EBIT)

  6,608   9,717   (5,670)  10,655 
                 

Add: Depreciation, Depletion & Amortization

  50,169   1,200   830   52,199 
                 

Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA)

 $56,777  $10,917  $(4,840) $62,854 
                 

Adjustments:

                

Stock-Based Compensation

 $1,053  $48  $109  $1,210 

Gain on Debt Extinguishment

  —   —   (106)  (106)

Pension Settlement

  —   —   22   22 

Unrealized Mark-to-Market Loss on Commodity Derivative Instruments

  20,437   —   —   20,437 

Total Pre-tax Adjustments

  21,490   48   25   21,563 
                 

Adjusted EBITDA

 $78,267  $10,965  $(4,815) $84,417 

 

  

Six Months Ended June 30, 2022

 
  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Total Company

 

Net Income (Loss)

 $161,501  $23,967  $(63,627) $121,841 
                 

Add: Income Tax Expense

  —   —   19,701   19,701 

Add: Interest Expense, net

  257   3,061   24,155   27,473 

Less: Interest Income

  (866)  —   (1,902)  (2,768)

Earnings (Loss) Before Interest & Taxes (EBIT)

  160,892   27,028   (21,673)  166,247 
                 

Add: Depreciation, Depletion & Amortization

  100,421   2,307   11,106   113,834 
                 

Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA)

 $261,313  $29,335  $(10,567) $280,081 
                 

Adjustments:

                

Stock-Based Compensation

 $4,595  $219  $656  $5,470 

Loss on Debt Extinguishment

  —   —   3,687   3,687 

Unrealized Mark-Market Loss on Commodity Derivative Instruments

  96,331   —   —   96,331 

Total Pre-tax Adjustments

  100,926   219   4,343   105,488 
                 

Adjusted EBITDA

 $362,239  $29,554  $(6,224) $385,569 

 

  

Six Months Ended June 30, 2021

 
  

PAMC

  

CONSOL Marine Terminal

  

Other

  

Total Company

 

Net Income (Loss)

 $48,616  $17,330  $(35,370) $30,576 
                 

Less: Income Tax Benefit

  —   —   (3,708)  (3,708)

Add: Interest Expense, net

  1,120   3,073   27,255   31,448 

Less: Interest Income

  (36)  —   (1,633)  (1,669)

Earnings (Loss) Before Interest & Taxes (EBIT)

  49,700   20,403   (13,456)  56,647 
                 

Add: Depreciation, Depletion & Amortization

  104,950   2,414   4,732   112,096 
                 

Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA)

 $154,650  $22,817  $(8,724) $168,743 
                 

Adjustments:

                

Stock-Based Compensation

 $2,364  $109  $246  $2,719 

Gain on Debt Extinguishment

  —   —   (789)  (789)

Pension Settlement

  —   —   22   22 

Unrealized Mark-to-Market Loss on Commodity Derivative Instruments

  20,437   —   —   20,437 

Total Pre-tax Adjustments

  22,801   109   (521)  22,389 
                 

Adjusted EBITDA

 $177,451  $22,926  $(9,245) $191,132