CONSOL Energy Inc. CONSOL Coal Resources LP Investor Presentation August 2019
Investment Thesis Proven Ability to Generate Material Free Cash Flow Leading to Significant Deleveraging with Continued Focus 1 on Further Debt Paydown and Increasing Shareholder Returns Base Assets with 1st Quartile Cost Position…
CEIX Performance Since November 2017 Spin Performance of Our Securities since the November 2017 Spin Spin Today 0% -25% 110.00 5% 6% +1 S&P notch 50.00 7.0% 0% 105 -2% 6.0% 105.00 5% 6.0% 100 25.00 35% -50% B1 / B+ 40.00…
Pennsylvania Mining Complex Overview Three highly productive, well-capitalized underground coal mines Five longwalls and 1517 continuous miner sections Largest central preparation plant in the United States CONSOL PA Mining Marine…
1st Quartile Cost Position in NAPP and Globally 1st quartile cost position in NAPP (2018)(1) (Cash costs per ton) 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 100 75 50 25 0 0 10 20 30 40 50 60 70 Cumulative…
CONSOL Marine Terminal Overview Overview Coal export terminal strategically located in Baltimore, Maryland 15.0 million tons per year throughput capacity 1.1 million tons coal storage yard capacity Only East Coast coal export…
On-Site Key Logistics Infrastructure and Advantaged Export Access in a Growing Export Market Dual-served railroad access Port of Baltimore PAMC Core Markets Eastern U.S. coal regions and points of thermal export(1) 12…
Itmann Project High Returns & Measured Pace of Investment Location Wyoming County, WV Estimated capacity: 600,000+ tons/year Production (3 CM sections) Capacity Full production expected by 2021 18+ million tons life-of-mine…
Itmann Project Will Cater to Growing Market with Shrinking High Quality Supply According to Wood Mackenzie: Global seaborne met coal demand will rise from 313 Mt in 2019 to 422 Mt by 2040. Indian imports increase to 142 Mtpa in…
Multi-pronged PAMC Marketing Strategy Illustrative portion of annual production 1 Maximize sales to established customer base of rail-served power plants in the Eastern U.S., with a focus on top-performing environmentally- 60 80%…
Highly-diversified Portfolio Provides Stability Annual coal sales (million tons) 2018A Export thermal 2018A Export met 27.7 27.8 2019E 26.1 Guidance Range 24.6 26.8 22.9 Europe Africa India Canada Other Asia South…
Stable, Diversified, Credit Worthy Customer Base That Minimizes Market Risk and Optimizes Margin Blue-chip customers(1) Limited volume at risk due to announced power plant retirements 2018 domestic power plant shipments by unit…
Premium Quality Coal and Differentiated Marketing Strategy Ensures Continued Participation in Seaborne Markets Differentiated Marketing Strategy Provides Strong Revenue Visibility Best-in-class Btu content(1) Entered into a three-year…
Solid Global Coal-Fired Generation Capacity Growth Continues Global coal power plant build outs under construction by year Global coal power plant build outs by country 90 China India Vietnam Indonesia Other Asia Rest of World 90…
Global Demand for PAMC Products Continues to Strengthen Premium import coal as a percentage of total(1) Global coal supply quality is deteriorating meanwhile, India is demanding higher quality coals 50% 14% 12% 48% 12% 48% 10%…
Global Value Proposition for Coal is Unparalleled Spot / Prompt Prices June 2019 12.00 10.00 8.00 /mmBtu 6.00 4.00 2.00 0.00 NAPP Coal UK LNG Newcastle Coal India LNG China LNG Henry Hub Spot…
Near-Term LNG Oversupply Expected to Become Shortfall after 2021 We believe rising export capacity in US will help tighten the domestic natural gas markets the linkage of natural gas to crude oil. Global LNG demand growth is…
19 Index Index 30 50 60 80 30 70 90 40 70 50 130 110 9/1/2019 1/2/2018 Position 10/1/2019 1/23/2018 11/1/2019 2/13/2018 12/1/2019 3/6/2018 1/1/2020 3/27/2018 JKM LNG and API2 Futures 2/1/2020…
Solid Gas Export & Sea-Change in Domestic Production Growth Pace LNG export demand has been positive supported by increased export capacity EIAs upward revisions to export demand U.S. liquefied natural gas export capacity: 2016 2021,…
With a Highly Competitive Position Versus Natural Gas Thermal coal price behavior vs. natural gas price Strong export market and 70 3/mmBtu forward gas supports 4.40 Forward Coal Price (/ton) Prompt Year NAPP Low-Sulfur Rail…
PAMC Growing Share in Favored US Basin Despite Coal Power Plant Retirements PAMC has taken advantage of shifting domestic PAMC sales have increased despite US thermal coal demand coal plant retirements High cost / unfavorable basin…
CEIX - Summary of Financial Policy Expect to continue to de-lever the balance sheet through 2020. Consistent with historical trends, focused on reducing legacy costs and liabilities Deleveraging and Long-term incentive compensation…
CEIX Accelerating Debt/Equity Repurchases CEIX Repurchase Program Authorization(1) Cumulative Repurchases Remaining Availability CEIXs Board of Directors has increased the 200 repurchase authorization by 25MM to an aggregate…
Second Quarter Results and 2019 Guidance For the Quarter Ended Guidance Earnings Results June June CEIX CCR 30, 2019 30, 2018 Change 2019(5) 2019(5) Pennsylvania Mining Complex Volumes (MM Tons) Production 7.2 7.7 (0.5) Sales 7.4…
Leverage and Liquidity Analysis Adjusted Method Bank Method CEIX Financial Metrics (MM except ratios) LTM 6/30/2019 LTM 6/30/2019 Leverage EBITDA(1)(2) 430 345 Consolidated Net Debt(3) 599 599 Net Leverage Ratio(1) 1.4x 1.7x…
Return on Capital Highlights the Need for Rising Commodity Prices The goal is to raise CEIXs Return on Capital(1) over time while lowering its WACC. Focused on margins and corporate returns instead of just growth. Low production…
Corporate Sustainability Approach Our Legacy is Built on Safety, Compliance, and Continuous Improvement PA Mining Complexs MSHA reportable incident rate was 34% lower than the industry average from 2014- 2018.1 2018 Marked 5th…
ESG Priorities: Creating Shared Value Producing high-Btu bituminous coal; carbon intensity 5-20% below other ranks.1 Environment Marketing to low heat rate, environmentally controlled customers. Expanding methane destruction program…
Appendix 30
Organizational Structure Overview CONSOL Energy Inc. NYSE: CEIX 28 million shares outstanding 100% ownership 100% interest ownership interest 59.7% CONSOL Coal Resources GP LLC 1.6 billion tons of limited partner (our…
CEIX Balance Sheet Legacy Liabilities, Manageable and Declining Significant legacy liability reductions over past three years Legacy liabilities Balance Sheet Cash Servicing (mm) Value Cost The impact of administrative changes in 2016…
Experienced Management with Enhanced Focus on Safety, Compliance and Financial Discipline CEIXs management and operating teams have a long history in the coal industry Key performance results Proven track record of successfully…
CEIX Adjusted EBITDA & Organic Free Cash Flow Net to CEIX Shareholders Reconciliations EBITDA Reconciliation LTM 2Q19 2Q18 6/30/2019 Net Income 48.8 52.7 124.3 Plus: Interest Expense, net 16.0 21.5 75.9 Interest Income (0.8) (0.5)…
CCR Adjusted EBITDA & Organic Free Cash Flow Reconciliations EBITDA Reconciliation 2Q19 2Q18 Net Income 14.4 19.4 Plus: Interest Expense, Net 1.6 1.8 Depreciation, Depletion and Amortization 11.3 11.9 EBITDA 27.3 33.1 Plus:…
CEIX Net Leverage Ratio Reconciliations CEIX Net Leverage Ratio Reconciliations Adjusted Method Bank Method LTM 6/30/2019 LTM 6/30/2019 Net Income 124 124 Plus: Interest Expense, net 76 76 Interest Income (3) (3) Income Tax…
CEIX Return on Capital Reconciliation CEIX Return on Capital Reconciliation LTM 6/30/2019 Net Income 124 Plus: Interest Expense, net 76 Interest Income (3) Income Tax Expense (3) EBIT 194 Add Legacy Liability Payments 72 Add…
CCR Net Leverage Ratio Reconciliation CCR Net Leverage Ratio Reconciliation LTM 6/30/2019 Net Income 54.8 Plus: Interest Expense, net 5.8 Depreciation, Depletion and Amortization 44.6 Unit-Based Compensation 1.7 Non-Cash…
Adjusted Net Income and Adjusted Dilutive EPS Reconciliations (MM except per share data) 2Q19 2Q18 Net Income 49 53 Plus: Adjustments to Net Income - - Plus: Tax Benefit of Adjustments to Net Income - - Adjusted Net Income 49 53…
Average Cash Margin and Average Cost per Ton Sold Reconciliations (MM except per ton data) 2Q19 2Q18 Total Coal Revenue 351 371 Operating and Other Costs 253 248 Less: Other Costs (Non-Production) (23) (36) Total Cash Cost of Coal…
CMT Adjusted EBITDA Reconciliation CMT EBITDA Reconciliation 2Q19 2Q18 Net Income 8.2 7.9 Plus: Interest Expense, net 1.5 1.5 Depreciation, Depletion and Amortization 1.4 1.0 EBITDA 11.2 10.4 Plus: Stock/Unit-Based Compensation…
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