UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38147

CONSOL Energy Inc.

(Exact name of registrant as specified in its charter)

Delaware

82-1954058

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1000 CONSOL Energy Drive, Suite 100

Canonsburg, PA 15317-6506

(724) 416-8300

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CEIX	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒☐ Accelerated filer ☐☒ Non-accelerated filer ☐ Smaller reporting company ☐☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

CONSOL Energy Inc. had ~~26,036,362~~34,439,010 shares of common stock, $0.01 par value, outstanding at ~~October 28, 2020.~~April 23, 2021.

Table of Contents

TABLE OF CONTENTS

	Part I. Financial Information	Page

Item 1.	Financial Statements
	Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	4
	Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	5
	Consolidated Balance Sheets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	6
	Consolidated Statements of Stockholders' Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	8
	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	9
	Notes to Consolidated Financial Statements	10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3327

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5845

Item 4.	Controls and Procedures	5946

	Part II. Other Information

Item 1.	Legal Proceedings	5946

Item 1A.	Risk Factors	5946

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6247

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	6247

Item 5.	Other Information	6247

Item 6.	Exhibits	6448

	Signatures	6549

Table of Contents

IMPORTANT DEFINITIONS REFERENCED IN THIS QUARTERLY REPORT

Unless the context otherwise requires:

•

“CONSOL Energy,” “we,” “our,” “us,” “our Company” and “the Company” refer to CONSOL Energy Inc. and its subsidiaries;

•

“Btu” means one British Thermal unit;

	•	“CCR Merger” ~~means~~refers to the ~~proposed~~ merger under that certain Agreement and Plan of ~~CCR into~~Merger, dated as of October 22, 2020, among the Company, Transformer LP Holdings Inc. (“Holdings”), a wholly-owned subsidiary of the Company, Transformer Merger Sub LLC, a wholly-owned subsidiary of Holdings (“Merger Sub”), the Partnership and CONSOL ~~Energy~~Coal Resources GP LLC, the general partner of the Partnership, pursuant to which Merger Sub merged with and into the ~~Merger Agreement and~~Partnership, with the Partnership surviving as ~~a result of which CCR will become~~ an indirect, wholly-owned subsidiary of ~~CONSOL Energy;~~the Company, which merger closed on December 30, 2020;

	•	“Coal Business” refers to all of our interest in the Pennsylvania Mining Complex (PAMC) and certain related coal assets, including: (i) our 100% interest in the Partnership, which owns a 25% undivided interest in the PAMC; (ii) the CONSOL Marine Terminal; (iii) development of the Itmann Mine; and (iv) undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and Illinois basins and certain related coal assets and liabilities;

•

“CONSOL Marine Terminal” refers to the Company's terminal operations located at the Port of Baltimore;

•

~~“distribution” refers to the pro rata distribution of the Company's issued and outstanding shares of common stock to its former parent's stockholders on November 29, 2017;~~

•

“former parent” refers to CNX Resources Corporation and its consolidated subsidiaries;

•

“General Partner” refers to CONSOL Coal Resources GP LLC, a Delaware limited liability ~~company;~~company and the general partner of the Partnership;

•

“Greenfield Reserves” means those undeveloped reserves owned by the Company in the Northern Appalachian, Central Appalachian and Illinois basins that are not associated with the Pennsylvania Mining Complex or the Itmann Mine project;

	•	“Merger Agreement” means that certain Agreement and Plan of Merger by and among CONSOL Energy, Transformer LP Holdings, Inc., a Delaware corporation, Transformer Merger Sub LLC, a Delaware limited liability company, CCR and the General Partner dated as of October 22, 2020;

	•	“~~Partnership”~~Partnership,” “CCR” or ~~“CCR”~~“CONSOL Coal Resources” refers to a Delaware limited partnership that holds a 25% undivided interest in, and is the sole operator of, the Pennsylvania Mining Complex;

•

“Pennsylvania Mining Complex” or “PAMC” refers to the Bailey, Enlow Fork and Harvey coal mines, coal reserves and related assets and operations located primarily in southwestern ~~Pennsylvania and owned 75% by the Company and 25% by the Partnership;~~Pennsylvania; and

•

“~~separation”~~separation and distribution” refers to the separation of the Coal Business from our former parent’s other businesses on November 28, 2017 and the pro rata distribution of the Company's issued and outstanding shares of common stock to its former parent's stockholders on November 29, 2017, and the creation, as a result of the distribution, of an independent, publicly-traded company (the Company) to hold the assets and liabilities associated with the Coal Business after the distribution.

Table of Contents

PART I : FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(unaudited)

	*Three Months Ended*					*Nine Months Ended*						*Three Months Ended*
	*September 30,*					*September 30,*						*March 31,*
Revenue and Other Income:	*2020*			*2019*		*2020*			*2019*			*2021*			*2020*
Coal Revenue	$	184,375		$	301,542	$	542,140		$	984,665		$	285,535		$	255,452
Terminal Revenue		17,008			16,303		49,407			50,829			18,212			16,501
Freight Revenue		12,909			3,599		19,141			14,115			27,013			3,147
Miscellaneous Other Income		21,001			11,188		71,107			36,674			3,189			16,170
Gain on Sale of Assets		7,926			714		15,241			1,986
Gain (Loss) on Sale of Assets													8,202			(14	)
Total Revenue and Other Income		243,219			333,346		697,036			1,088,269			342,151			291,256
Costs and Expenses:
Operating and Other Costs		153,031			234,849		481,712			718,410			185,110			212,275
Depreciation, Depletion and Amortization		54,959			54,370		156,057			151,245			59,897			54,943
Freight Expense		12,909			3,599		19,141			14,115			27,013			3,147
Selling, General and Administrative Costs		11,117			14,690		39,726			52,901			23,964			17,670
(Gain) Loss on Debt Extinguishment		(1,078	)		801		(17,911	)		25,444
Gain on Debt Extinguishment													(683	)		(16,833	)
Interest Expense, net		15,723			15,598		46,116			50,240			15,261			15,671
Total Costs and Expenses		246,661			323,907		724,841			1,012,355			310,562			286,873
(Loss) Earnings Before Income Tax		(3,442	)		9,439		(27,805	)		75,914
Income Tax Expense (Benefit)		5,918			2,415		143			(243	)
Net (Loss) Income		(9,360	)		7,024		(27,948	)		76,157
Less: Net (Loss) Income Attributable to Noncontrolling Interest		(2,136	)		2,684		(5,108	)		14,102
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders	$	(7,224	)	$	4,340	$	(22,840	)	$	62,055
Earnings Before Income Tax													31,589			4,383
Income Tax Expense													5,185			1,908
Net Income													26,404			2,475
Less: Net Income Attributable to Noncontrolling Interest													0			108
Net Income Attributable to CONSOL Energy Inc. Shareholders												$	26,404		$	2,367

(Loss) Earnings per Share:
Total Basic (Loss) Earnings per Share	$	(0.28	)	$	0.16	$	(0.88	)	$	2.27
Total Dilutive (Loss) Earnings per Share	$	(0.28	)	$	0.16	$	(0.88	)	$	2.26
Earnings per Share:
Total Basic Earnings per Share												$	0.77		$	0.09
Total Dilutive Earnings per Share												$	0.75		$	0.09

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Net (Loss) Income
$ (9,360 ) $ 7,024 $ (27,948 ) $ 76,157

Other Comprehensive Income:

Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($1,214), ($780), ($3,642), ($2,342))
3,624 2,457 10,872 7,376
Unrecognized Gain (Loss) on Derivatives:

Unrealized Gain (Loss) on Cash Flow Hedges (Net of tax: ($127), $83, $810, $167)
377 (261 ) (2,408 ) (525 )
Other Comprehensive Income
4,001 2,196 8,464 6,851

Comprehensive (Loss) Income
$ (5,359 ) $ 9,220 $ (19,484 ) $ 83,008

Less: Comprehensive (Loss) Income Attributable to Noncontrolling Interest
(2,121 ) 2,681 (5,063 ) 14,097

Comprehensive (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$ (3,238 ) $ 6,539 $ (14,421 ) $ 68,911

	*Three Months Ended*
	*March 31,*
	*2021*		*2020*
Net Income	$	26,404	$	2,475

Other Comprehensive Income:
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($1,164),($1,214))		3,360		3,624
Unrealized Gain (Loss) on Cash Flow Hedges (Net of tax: ($144), $933)		414		(2,773	)
Other Comprehensive Income		3,774		851

Comprehensive Income	$	30,178	$	3,326

Less: Comprehensive Income Attributable to Noncontrolling Interest		0		123

Comprehensive Income Attributable to CONSOL Energy Inc. Shareholders	$	30,178	$	3,203

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	(Unaudited)				(Unaudited)
	*September 30,*		*December 31,*		*March 31,*		*December 31,*
	*2020*		*2019*		*2021*		*2020*
ASSETS
Current Assets:
Cash and Cash Equivalents	$	22,284	$	80,293	$	91,174	$	50,850
Restricted Cash						303		0
Accounts and Notes Receivable
Trade Receivables, net		120,548		131,688		124,629		118,289
Other Receivables, net		24,748		40,984		41,602		42,157
Inventories		56,577		54,131		55,209		56,200
Prepaid Expenses and Other Assets		27,139		30,933		23,825		25,445
Total Current Assets		251,296		338,029		336,742		292,941
Property, Plant and Equipment:
Property, Plant and Equipment		5,126,703		5,008,180		5,131,739		5,143,696
Less - Accumulated Depreciation, Depletion and Amortization		3,043,463		2,916,015		3,117,651		3,094,634
Total Property, Plant and Equipment—Net		2,083,240		2,092,165		2,014,088		2,049,062
Other Assets:
Deferred Income Taxes		101,639		103,505		62,261		68,821
Right of Use Asset - Operating Leases		58,106		72,632		48,337		53,436
Other, net		60,557		87,471		59,132		59,106
Total Other Assets		220,302		263,608		169,730		181,363
TOTAL ASSETS	$	2,554,838	$	2,693,802	$	2,520,560	$	2,523,366

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	(Unaudited)						(Unaudited)
	*September 30,*			*December 31,*			*March 31,*			*December 31,*
	*2020*			*2019*			*2021*			*2020*
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable	$	72,263		$	106,223		$	75,382		$	71,229
Current Portion of Long-Term Debt		68,954			50,272			50,057			53,846
Other Accrued Liabilities		247,395			235,769			245,755			243,395
Total Current Liabilities		388,612			392,264			371,194			368,470
Long-Term Debt:
Long-Term Debt		587,020			653,802			550,444			566,858
Finance Lease Obligations		21,146			9,036			34,877			36,203
Total Long-Term Debt		608,166			662,838			585,321			603,061
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions		421,705			432,496			383,457			387,637
Pneumoconiosis Benefits		201,066			202,142			228,687			229,720
Asset Retirement Obligations		229,346			250,211			227,922			228,182
Workers’ Compensation		61,525			61,194			63,414			64,390
Salary Retirement		33,454			49,930			28,527			35,359
Operating Lease Liability		41,623			55,413			32,434			35,655
Other		16,613			14,919			16,539			17,373
Total Deferred Credits and Other Liabilities		1,005,332			1,066,305			980,980			998,316
TOTAL LIABILITIES		2,002,110			2,121,407			1,937,495			1,969,847

Stockholders' Equity:
Common Stock, $0.01 Par Value; 62,500,000 Shares Authorized, 26,034,211 Issued and Outstanding at September 30, 2020; 25,932,618 Issued and Outstanding at December 31, 2019		260			259
Common Stock, $0.01 Par Value; 62,500,000 Shares Authorized, 34,371,205 Shares Issued and Outstanding at March 31, 2021; 34,031,374 Shares Issued and Outstanding at December 31, 2020								344			340
Capital in Excess of Par Value		532,360			523,762			642,054			642,887
Retained Earnings		233,765			259,903			273,254			246,850
Accumulated Other Comprehensive Loss		(340,306	)		(348,725	)		(332,587	)		(336,558	)
Total CONSOL Energy Inc. Stockholders' Equity		426,079			435,199
Noncontrolling Interest		126,649			137,196
TOTAL EQUITY		552,728			572,395			583,065			553,519
TOTAL LIABILITIES AND EQUITY	$	2,554,838		$	2,693,802		$	2,520,560		$	2,523,366

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)

Common Stock

Capital in Excess of Par Value

Retained Earnings

Accumulated Other Comprehensive (Loss) Income

Total CONSOL Energy Inc. Stockholders' Equity

Noncontrolling Interest

Total Equity

December 31, 2019
$ 259 $ 523,762 $ 259,903 $ (348,725 ) $ 435,199 $ 137,196 $ 572,395
(Unaudited)

Net Income
0 0 2,367 0 2,367 108 2,475
Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax)
0 0 0 3,609 3,609 15 3,624
Interest Rate Hedge (Net of ($933) Tax)
0 0 0 (2,773 ) (2,773 ) 0 (2,773 )
Comprehensive Income
0 0 2,367 836 3,203 123 3,326
Adoption of ASU 2016-13 (Net of ($1,109) Tax)
0 0 (3,298 ) 0 (3,298 ) 0 (3,298 )
Issuance of Common Stock
1 (1 ) 0 0 0 0 0
Amortization of Stock-Based Compensation Awards
0 4,856 0 0 4,856 158 5,014
Shares/Units Withheld for Taxes
0 (555 ) 0 0 (555 ) (217 ) (772 )
Distributions to Noncontrolling Interest
0 0 0 0 0 (5,575 ) (5,575 )
March 31, 2020
$ 260 $ 528,062 $ 258,972 $ (347,889 ) $ 439,405 $ 131,685 $ 571,090
(Unaudited)

Net Loss
0 0 (17,983 ) 0 (17,983 ) (3,080 ) (21,063 )
Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax)
0 0 0 3,609 3,609 15 3,624
Interest Rate Hedge (Net of ($4) Tax)
0 0 0 (12 ) (12 ) 0 (12 )
Comprehensive (Loss) Income
0 0 (17,983 ) 3,597 (14,386 ) (3,065 ) (17,451 )
Amortization of Stock-Based Compensation Awards
0 2,162 0 0 2,162 74 2,236
June 30, 2020
$ 260 $ 530,224 $ 240,989 $ (344,292 ) $ 427,181 $ 128,694 $ 555,875
(Unaudited)
Net Loss 0 0 (7,224 ) 0 (7,224 ) (2,136 ) (9,360 )
Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax) 0 0 0 3,609 3,609 15 3,624
Interest Rate Hedge (Net of $127 Tax) 0 0 0 377 377 0 377
Comprehensive (Loss) Income 0 0 (7,224 ) 3,986 (3,238 ) (2,121 ) (5,359 )
Amortization of Stock-Based Compensation Awards 0 2,136 0 0 2,136 76 2,212
September 30, 2020 $ 260 $ 532,360 $ 233,765 $ (340,306 ) $ 426,079 $ 126,649 $ 552,728

	Common Stock		Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive (Loss) Income			Total Equity
December 31, 2020	$	340	$	642,887		$	246,850	$	(336,558	)	$	553,519
(Unaudited)
Net Income		0		0			26,404		0			26,404
Actuarially Determined Long-Term Liability Adjustments (Net of $1,164 Tax)		0		0			0		3,360			3,360
Interest Rate Hedge (Net of $144 Tax)		0		0			0		414			414
Comprehensive Income		0		0			26,404		3,774			30,178
Issuance of Common Stock		4		(4	)		0		0			0
Amortization of Stock-Based Compensation Awards		0		1,509			0		0			1,509
Shares Withheld for Taxes		0		(2,072	)		0		0			(2,072	)
CCR Merger		0		(266	)		0		197			(69	)
March 31, 2021	$	344	$	642,054		$	273,254	$	(332,587	)	$	583,065

	*Common Stock*			*Capital in Excess of Par Value*			*Retained Earnings*			*Accumulated Other Comprehensive (Loss) Income*			*Total CONSOL Energy Inc. Stockholders' Equity*			*Noncontrolling Interest*			*Total Equity*			Common Stock		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total CONSOL Energy Inc. Stockholders' Equity			Noncontrolling Interest			Total Equity
December 31, 2018	$	274		$	550,995		$	182,148		$	(323,482	)	$	409,935		$	141,676		$	551,611
December 31, 2019																						$	259	$	523,762		$	259,903		$	(348,725	)	$	435,199		$	137,196		$	572,395
(Unaudited)
Net Income		0			0			14,435			0			14,435			5,868			20,303			0		0			2,367			0			2,367			108			2,475
Actuarially Determined Long-Term Liability Adjustments (Net of $781 Tax)		0			0			0			2,461			2,461			(1	)		2,460
Actuarially Determined Long-Term Liability Adjustments (Net of $1,214 Tax)																							0		0			0			3,609			3,609			15			3,624
Interest Rate Hedge (Net of ($933) Tax)																							0		0			0			(2,773	)		(2,773	)		0			(2,773	)
Comprehensive Income		0			0			14,435			2,461			16,896			5,867			22,763			0		0			2,367			836			3,203			123			3,326
Adoption of ASU 2016-13 (Net of ($1,109) Tax)																							0		0			(3,298	)		0			(3,298	)		0			(3,298	)
Issuance of Common Stock		2			(2	)		0			0			0			0			0			1		(1	)		0			0			0			0			0
Amortization of Stock-Based Compensation Awards		0			7,053			0			0			7,053			397			7,450			0		4,856			0			0			4,856			158			5,014
Shares/Units Withheld for Taxes		0			(3,863	)		0			0			(3,863	)		(880	)		(4,743	)		0		(555	)		0			0			(555	)		(217	)		(772	)
Distributions to Noncontrolling Interest		0			0			0			0			0			(5,559	)		(5,559	)		0		0			0			0			0			(5,575	)		(5,575	)
March 31, 2019	$	276		$	554,183		$	196,583		$	(321,021	)	$	430,021		$	141,501		$	571,522
(Unaudited)
Net Income		0			0			43,280			0			43,280			5,550			48,830
Actuarially Determined Long-Term Liability Adjustments (Net of $781 Tax)		0			0			0			2,460			2,460			(1	)		2,459
Interest Rate Hedge (Net of ($84) Tax)		0			0			0			(264	)		(264	)		0			(264	)
Comprehensive Income		0			0			43,280			2,196			45,476			5,549			51,025
Repurchases of Common Stock (351,443 shares)		(3	)		(7,053	)		(2,494	)		0			(9,550	)		0			(9,550	)
Purchases of CCR Units (6,884 units)		0			(28	)		0			0			(28	)		(91	)		(119	)
Amortization of Stock-Based Compensation Awards		0			2,584			0			0			2,584			341			2,925
Distributions to Noncontrolling Interest		0			0			0			0			0			(5,560	)		(5,560	)
June 30, 2019	$	273		$	549,686		$	237,369		$	(318,825	)	$	468,503		$	141,740		$	610,243
(Unaudited)
Net Income		0			0			4,340			0			4,340			2,684			7,024
Actuarially Determined Long-Term Liability Adjustments (Net of $780 Tax)		0			0			0			2,460			2,460			(3	)		2,457
Interest Rate Hedge (Net of ($83) Tax)		0			0			0			(261	)		(261	)		0			(261	)
Comprehensive Income		0			0			4,340			2,199			6,539			2,681			9,220
Repurchases of Common Stock (1,366,054 shares)		(14	)		(27,417	)		4,248			0			(23,183	)		0			(23,183	)
Purchases of CCR Units (19,413 units)		0			(1	)		0			0			(1	)		(249	)		(250	)
Amortization of Stock-Based Compensation Awards		0			2,630			0			0			2,630			344			2,974
Shares/Units Withheld for Taxes		0			(2	)		0			0			(2	)		0			(2	)
Distributions to Noncontrolling Interest		0			0			0			0			0			(5,555	)		(5,555	)
September 30, 2019	$	259		$	524,896		$	245,957		$	(316,626	)	$	454,486		$	138,961		$	593,447
March 31, 2020																						$	260	$	528,062		$	258,972		$	(347,889	)	$	439,405		$	131,685		$	571,090

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

	*Nine Months Ended*						Three Months Ended
	*September 30,*						March 31,
	*2020*			*2019*			2021			2020
Cash Flows from Operating Activities:
Net (Loss) Income	$	(27,948	)	$	76,157
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities:
Net Income							$	26,404		$	2,475
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization		156,057			151,245			59,897			54,943
Gain on Sale of Assets		(15,241	)		(1,986	)
(Gain) Loss on Sale of Assets								(8,202	)		14
Stock/Unit-Based Compensation		9,462			13,349			1,509			5,014
Amortization of Debt Issuance Costs		5,301			4,953			2,140			1,444
(Gain) Loss on Debt Extinguishment		(17,911	)		25,444
Gain on Debt Extinguishment								(683	)		(16,833	)
Deferred Income Taxes		143			(16,402	)		5,185			1,908
Equity in Earnings of Affiliates		1,147			0			206			315
Changes in Operating Assets:
Accounts and Notes Receivable		25,197			(10,002	)		(5,764	)		23,064
Inventories		(2,446	)		(193	)		475			(4,507	)
Prepaid Expenses and Other Assets		5,880			(3,009	)		1,620			4,845
Changes in Other Assets		(16,902	)		14,332			(1,459	)		191
Changes in Operating Liabilities:
Accounts Payable		(29,746	)		(10,233	)		(73	)		(15,726	)
Other Operating Liabilities		(1,645	)		3,204			9,242			3,899
Changes in Other Liabilities		(28,960	)		(23,676	)		(12,501	)		(9,646	)
Net Cash Provided by Operating Activities		62,388			223,183			77,996			51,400
Cash Flows from Investing Activities:
Capital Expenditures		(65,955	)		(131,475	)		(13,800	)		(27,178	)
Proceeds from Sales of Assets		8,779			2,015			8,488			0
Other Investing Activity		(229	)		0			(182	)		0
Net Cash Used in Investing Activities		(57,405	)		(129,460	)		(5,494	)		(27,178	)
Cash Flows from Financing Activities:
Proceeds from Finance Lease Obligations		16,293			0			0			16,293
Payments on Finance Lease Obligations		(18,732	)		(13,784	)		(8,498	)		(4,899	)
Proceeds from Term Loan A		0			26,250
Payments on Term Loan A		(16,250	)		(7,500	)		(6,250	)		(3,750	)
Payments on Term Loan B		(2,063	)		(123,750	)		(5,536	)		(688	)
Payments on Second Lien Notes		(26,365	)		(35,048	)		(9,338	)		(25,480	)
Proceeds from Asset-Backed Financing		0			3,757
Payments on Asset-Backed Financing		(526	)		0			(181	)		(174	)
Purchases of CCR Units		0			(369	)
Repurchases of Common Stock		0			(31,318	)
Distributions to Noncontrolling Interest		(5,575	)		(16,674	)		0			(5,575	)
Shares/Units Withheld for Taxes		(772	)		(4,745	)		(2,072	)		(772	)
Debt-Related Financing Fees		(9,002	)		(20,628	)		0			(643	)
Net Cash Used in Financing Activities		(62,992	)		(223,809	)		(31,875	)		(25,688	)
Net Decrease in Cash and Cash Equivalents and Restricted Cash		(58,009	)		(130,086	)
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash								40,627			(1,466	)
Cash and Cash Equivalents and Restricted Cash at Beginning of Period		80,293			264,935			50,850			80,293
Cash and Cash Equivalents and Restricted Cash at End of Period	$	22,284		$	134,849		$	91,477		$	78,827

Non-Cash Investing and Financing Activities:
Finance Lease	$	17,335		$	0		$	8,226		$	7,023
Other Equipment Financing	$	13,123		$	3,834		$	0		$	9,129

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

CONSOL ENERGY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in thousands, except per share data)

NOTE 1—BASIS OF PRESENTATION:

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 108-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three ~~and~~ ~~nine~~months ended ~~September 30, 2020~~March 31, 2021 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, ~~2019~~2020 has been derived from the Audited Consolidated Financial Statements at that date but does not include all disclosures required by GAAP. This Form 10-Q report should be read in conjunction with CONSOL Energy Inc.'s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020.

Basis of Consolidation

The Consolidated Financial Statements include the accounts of CONSOL Energy Inc. and its wholly-owned and majority-owned and/or controlled subsidiaries. The portion of these entities that is not owned by the Company is presented as non-controlling interest. All significant intercompany transactions and accounts have been eliminated in consolidation.

Recent Accounting Pronouncements

In ~~March 2020,~~January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2021-01 - Reference Rate Reform (Topic 848) to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in this Update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. CONSOL Energy adopted this guidance during the three months ended March 31, 2021, and there was no material impact on the Company's financial statements.

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. In response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This Update also provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. ~~Management has elected to apply this Update subsequent to~~ ~~March 12, 2020.~~ ~~Management is currently evaluating the impact of~~CONSOL Energy adopted this guidance ~~but does~~during the ~~not~~three ~~expect this update to have a~~months ended March 31, 2021, and there was no material impact on the Company's financial statements.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this Update clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. The amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. ~~Management does~~CONSOL Energy adopted this guidance during the ~~not~~three ~~expect this update to have a~~months ended March 31, 2021, and there was no material impact on the Company's financial statements.

Table of Contents

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740) to reduce the complexity of accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements. The amendments in Update 2019-12 ~~will remove~~removed the following exceptions: (1) the exception to the incremental approach for intra-period tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in Update 2019-12 ~~will~~ also ~~simplify~~simplified the accounting for income taxes in the areas of franchise tax, step up in the tax basis of goodwill associated with a business combination, allocation of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements, and presentation of the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The Update ~~adds~~added minor codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. These changes ~~will be~~are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. ~~Early adoption is permitted. Management does~~CONSOL Energy adopted this guidance during the ~~not~~three ~~expect this update to have a~~months ended March 31, 2021, and there was no material impact on the Company's financial statements.

In ~~August 2018,~~ ~~the FASB issued ASU~~ ~~2018~~-14 ~~- Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic~~ ~~715~~-20) to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. These changes will be effective for fiscal years ending after ~~December 15, 2020,~~ ~~including interim periods within those fiscal years. Management does~~ ~~not~~ ~~expect this update to have a material impact on the Company’s financial statements.~~

Earnings per Share

Basic earnings per share are computed by dividing net ~~(loss)~~ income attributable to CONSOL Energy Inc. shareholders by the weighted average number of shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share, except that the weighted average number of shares outstanding ~~are~~is increased to include additional shares from restricted stock units and performance share units, if dilutive. The number of additional shares is calculated by assuming that outstanding restricted stock units and performance share units were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period.

The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be anti-dilutive:

	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*
	*September 30,*				*September 30,*				*March 31,*
	*2020*		*2019*		*2020*		*2019*		*2021*		*2020*
Anti-Dilutive Restricted Stock Units		1,561,852		418,924		1,361,077		166,650		61,650		141,279
Anti-Dilutive Performance Share Units		29,062		56,399		32,736		0		0		0
		1,590,914		475,323		1,393,813		166,650		61,650		141,279

~~Table of Contents~~

The computations for basic and dilutive earnings per share are as follows:

Three Months Ended

Nine Months Ended

Dollars in thousands, except per share data

September 30,

September 30,

2020

2019

2020

2019

Numerator:

Net (Loss) Income
$ (9,360 ) $ 7,024 $ (27,948 ) $ 76,157
Less: Net (Loss) Income Attributable to Noncontrolling Interest
(2,136 ) 2,684 (5,108 ) 14,102
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$ (7,224 ) $ 4,340 $ (22,840 ) $ 62,055

Denominator:

Weighted-average shares of common stock outstanding
26,034,198 26,835,297 26,017,546 27,285,511
Effect of dilutive shares*
0 181,693 0 195,332
Weighted-average diluted shares of common stock outstanding
26,034,198 27,016,990 26,017,546 27,480,843

(Loss) Earnings per Share:

Basic
$ (0.28 ) $ 0.16 $ (0.88 ) $ 2.27
Dilutive
$ (0.28 ) $ 0.16 $ (0.88 ) $ 2.26

*During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is anti-dilutive.

	*Three Months Ended*
Dollars in thousands, except per share data	*March 31,*
	*2021*		*2020*
Numerator:
Net Income	$	26,404	$	2,475
Less: Net Income Attributable to Noncontrolling Interest		0		108
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	26,404	$	2,367

Denominator:
Weighted-average shares of common stock outstanding		34,206,632		25,987,155
Effect of dilutive shares		837,450		265,056
Weighted-average diluted shares of common stock outstanding		35,044,082		26,252,211

Earnings per Share:
Basic	$	0.77	$	0.09
Dilutive	$	0.75	$	0.09

As of ~~September 30, 2020~~March 31, 2021, CONSOL Energy has 500,000 shares of preferred stock, none of which are issued or outstanding.

Reclassifications

During the year ended December 31, 2020, the Company added the CONSOL Marine Terminal to its reportable segments disclosed in Note 16 - Segment Information. As a result, certain reclassifications of 2020 segment information have been made to conform to the 2021 presentation. These reclassifications had no effect on previously reported total assets, net income, stockholders' equity or cash flows from operating activities.

NOTE 2—2—MAJOR TRANSACTIONS:

Merger with CONSOL Coal Resources LP

On October 22, 2020, CONSOL Energy, the Partnership, the General Partner, a wholly-owned subsidiary of CONSOL Energy, and Merger Sub entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which Merger Sub merged with and into the Partnership, with the Partnership surviving as an indirect, wholly-owned subsidiary of CONSOL Energy (the “Merger”). On December 30, 2020, the Merger was completed and CONSOL Energy issued 7,967,690 shares of common stock to acquire the 10,912,138 common units of CCR not ~~TRANSACTIONS~~owned by CONSOL Energy prior to the Merger at a fixed exchange ratio of 0.73 shares of CONSOL Energy common stock for each CCR unit, for total implied consideration of $51,710. As a result of the Merger, CCR's common units are no longer publicly traded.

Except for the Partnership's incentive distribution rights, which were automatically canceled immediately prior to the effective time of the Merger for no consideration in accordance with CCR's partnership agreement, the interests in CCR owned by CONSOL Energy and its subsidiaries remain outstanding as limited partner interests in the surviving entity. The General Partner will continue to own the non-economic general partner interest in the surviving entity.

Since CONSOL Energy controlled CCR prior to the Merger and continues to control CCR after the Merger, CONSOL Energy accounted for the change in its ownership interest in CCR as an equity transaction, which was reflected as a reduction of noncontrolling interest with corresponding increases to common stock and capital in excess of par value. No gain or loss was recognized in CONSOL Energy's Consolidated Statements of Income as a result of the Merger. The tax effects of the Merger were reported as adjustments to deferred income taxes and capital in excess of par value.

Prior to the effective date of the Merger, public unitholders held a 39.3% equity interest in CCR's outstanding common units and CONSOL Energy owned the remaining 60.7% equity interest. The earnings of CCR that were attributed to its common units held by the public prior to the Merger are reflected in Net Income Attributable to Noncontrolling Interest in the Consolidated Statements of Income.

The Company incurred $9,822 of transaction costs directly attributable to the Merger during the year ended December 31, 2020, including financial advisory, legal service and other professional fees, which were recorded to Selling, General and Administrative Costs in the Consolidated Statements of Income.

Settlement Transaction with Murray Energy

On September 16, 2020, CONSOL entered into a settlement transaction with (i) Murray Energy Holdings Co., Murray Energy Corporation, and their direct and indirect subsidiaries (such entities that are debtors in possession in Murray Energy Holdings Co.’s jointly administered Chapter 11 ~~cases, the “Debtors”),~~cases) and (ii) ACNR Holdings, Inc. ~~(together with its direct and indirect subsidiaries, “Murray NewCo”)~~ to fully and finally resolve the disputes raised in the litigation captioned CONSOL Energy Inc. v Murray Energy Holdings Co., et al., Adversary Case2:20-ap-02036, arising out of Murray Energy Holdings Co.'s bankruptcy proceedings and any and all other disputes, controversies, or causes of action between and among ~~them related to (a) the Debtors’ rejection of the~~ ~~2013~~ stock purchase agreement (“SPA”) and CONSOL’s waiver of any objection thereto; (b) the Debtors’ assumption and assignment to Murray NewCo (or its designated direct or indirect subsidiaries) and payment of certain cure and other amounts relating to the First Overriding Royalty Agreement, as amended, the Second Overriding Royalty Agreement, as amended, the Water Treatment Cost Sharing Agreement, as amended, and the Master Entry Driver Lease Agreement; (c) the Debtors’ assumption and assignment to Murray NewCo (or its designated direct or indirect subsidiaries) of the Cooperation and Safety Agreement, the Surface Use Agreement, the Substation and Power Line Agreement, the Substation and Power Line Rights-of-Way, the McMillian Assignment, the Partial Powerline Assignment, the ~~2013~~ ~~Well Plugging Consent Order and Agreement, and the~~ ~~2020~~ Well Plugging Agreement; (d) the Debtors’ and CONSOL’s continued cooperation about certain matters consistent with historical practice, including (i) with respect to each parties’ payment obligations related to certain claims relating to certain worker’s compensation, Black Lung, and long-term disability and (ii) with respect to easements and boundaries as set forth in the ~~2013~~ SPA and the Closing Land Letter Agreement; (e) the Debtors’ assumption of, and CONSOL’s payment of certain amounts relating to, the Split Leases; (f) CONSOL’s transfer to Murray NewCo (or its designated direct or indirect subsidiaries), and Murray NewCo’s (or its designated direct or indirect subsidiaries’) payment for, certain coalbed methane wells, gas wells, and land; (g) the usage by CONSOL of the power structure of Murray NewCo (or its designated direct or indirect subsidiaries) on agreed upon terms and the Debtors’ and Murray NewCo’s release of the alleged claim for CONSOL’s prior usage; (h) CONSOL’s dismissal of ~~CONSOL Energy Inc. v Murray Energy Holdings Co., et al.~~~~, Adversary Case~~ ~~2:20~~~~-ap-~~~~02036,~~ ~~with prejudice, which dismissal will be contingent upon (~~1~~) the Debtors’ assumption and assignment to Murray NewCo (or its designated direct or indirect subsidiaries) of the Assumed CONSOL Agreements and (~~2~~) the Debtors’ compliance with the terms of the CONSOL Term Sheets and other agreements consistent with these transactions; and (i) certain other terms and conditions consistent with the foregoing.~~them. The ~~foregoing~~underlying agreements and compromises, which have been memorialized in definitive documentation, ~~shall be~~were treated as a single, integrated transaction. ~~The effect~~As of ~~the agreements, as amended, in the normal course of business~~March 31,2021, this single, integrated transaction resulted in CONSOL recognizing (a) Miscellaneous Other Income of $18,561 related to the Sale of Certain Coal Lease Contracts and other income, (b) Gain on Sale of Assets of $6,230 related to the sale of certain gas wells and equipment, and (c) a reduction of Operating and Other Costs of $1,940 as a result of expense rebates offset with various cure costs, all of which are included in the Consolidated Statement of Income for the ~~three~~ ~~months ended~~ ~~September 30, 2020.~~ ~~As of~~ ~~September 30, 2020,~~ ~~the various transactions between the parties resulted in $8,088~~$4,895 of Other Receivables, net, and ~~$21,326~~$22,766 of Other Assets, net, included in the Consolidated Balance ~~Sheet.~~Sheets. As of December 31, ~~2019,~~2020, ~~various transactions between the parties~~this single, integrated transaction resulted in ~~$13,567~~$4,867 of Other Receivables, net, and $22,055 of Other Assets, net, included in the Consolidated Balance ~~Sheet.~~Sheets. See Note 14 - Commitments and Contingent Liabilities with respect to additional information relating to certain liabilities of the Company under the Coal Act (as defined below).

NOTE 3—REVENUE:

The following table disaggregates CONSOL Energy's revenue from contracts with customers to depict how the nature, amount, timing and uncertainty of the Company's revenues and cash flows are affected by economic factors:

	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*
	*September 30, 2020*		*September 30, 2019*		*September 30, 2020*		*September 30, 2019*		*March 31, 2021*		*March 31, 2020*
Coal Revenue	$	184,375	$	301,542	$	542,140	$	984,665	$	285,535	$	255,452
Terminal Revenue		17,008		16,303		49,407		50,829		18,212		16,501
Freight Revenue		12,909		3,599		19,141		14,115		27,013		3,147
Total Revenue from Contracts with Customers	$	214,292	$	321,444	$	610,688	$	1,049,609	$	330,760	$	275,100

Coal Revenue

CONSOL Energy's coal revenue is generally recognized when title passes to the customer and the price is fixed and determinable. Generally, title passes when coal is loaded at the central preparation facility, ~~and,~~the CONSOL Marine Terminal or, on occasion, ~~at terminal locations or~~ other ~~customer~~ destinations. The Company's coal contract revenue per ton is fixed and determinable and adjusted for nominal quality adjustments. Some coal contracts also contain positive electric power price-related adjustments, which represent market-driven price adjustments, wherein no additional value is exchanged, in addition to a fixed base price per ton. The Company’s coal contracts generally do not allow for retroactive adjustments to pricing after title to the coal has passed. The Company's coal supply contracts and other sales and operating revenue contracts vary in length from short-term to long-term contracts and do not typically have significant financing components.

~~Table of Contents~~

The estimated transaction price from each of the Company's contracts is based on the total amount of consideration to which the Company expects to be entitled under the contract. Included in the transaction price for certain coal supply contracts is the impact of variable consideration, including quality price adjustments, handling services, per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments. The estimated transaction price for each contract is allocated to the Company's performance obligations based on relative stand-alone selling prices determined at contract inception. The Company has determined that each ton of coal represents a separate and distinct performance obligation. Some of the Company's contracts span multiple years and have annual pricing modifications, based upon market-driven or inflationary adjustments, where no additional value is exchanged. Management believes that the invoice price is the most appropriate rate at which to recognize revenue.

While CONSOL Energy does, from time to time, experience costs of obtaining coal customer contracts with amortization periods greater than one year, those costs are generally immaterial to the Company's net ~~(loss)~~ income. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three ~~and~~ ~~nine~~months ended ~~September 30, 2020~~March 31, 2021 and ~~2019~~2020, the Company has not recognized any amortization of previously existing capitalized costs of obtaining customer contracts. Further, the Company has not recognized any coal revenue in the current period that is not a result of current period performance.

Terminal Revenue

Terminal revenues are attributable to the Company's CONSOL Marine Terminal and include revenues earned from providing receipt and unloading of coal from rail cars, transporting coal from the receipt point to temporary storage or stockpile facilities located at the Terminal, stockpiling, blending, weighing, sampling, redelivery, and loading of coal onto vessels. Revenues for these services are ~~generally~~ earned on a ~~rateable~~ratable basis, and performance obligations are considered fulfilled as the services are performed.

The CONSOL Marine Terminal does not normally experience material costs of obtaining customer contracts with amortization periods greater than one year. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three ~~and~~ ~~nine~~months ended ~~September 30, 2020~~March 31, 2021 and ~~2019~~2020, the Company has not recognized any amortization of previously existing capitalized costs of obtaining Terminal customer contracts. Further, the Company has not recognized any revenue in the current period that is not a result of current period performance.

Freight Revenue

Some of CONSOL Energy's coal contracts require that the Company sell its coal at locations other than its central preparation plant. The cost to transport the Company's coal to the ultimate sales point is passed through to the Company's customers and CONSOL Energy recognizes the freight revenue equal to the transportation costs when title of the coal passes to the customer.

Contract Balances

Contract assets are recorded separately from trade receivables in the Company's Consolidated Balance Sheets and are reclassified to trade receivables as title passes to the customer and the Company's right to consideration becomes unconditional. Payments for coal shipments are typically due within two to four weeks from the invoice date. CONSOL Energy typically does not have material contract assets that are stated separately from trade receivables since the Company's performance obligations are satisfied as control of the goods or services passes to the customer, thereby granting the Company an unconditional right to receive consideration. Contract liabilities relate to consideration received in advance of the satisfaction of the Company's performance obligations. Contract liabilities are recognized as revenue at the point in time when control of the good passes to the customer, or over time when services are provided.

NOTE 4—MISCELLANEOUS OTHER INCOME:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*				*Three Months Ended March 31,*
	*2020*		*2019*		*2020*		*2019*		*2021*		*2020*
Royalty Income - Non-Operated Coal									$	1,601	$	4,504
Interest Income										858		244
Rental Income										215		497
Contract Buyout	$	0	$	1,193	$	40,969	$	3,583		0		10,825
Sale of Certain Coal Lease Contracts		17,847		0		17,847		0
Royalty Income - Non-Operated Coal		2,241		4,976		9,638		16,863
Rental Income		255		625		1,077		1,923
Property Easements and Option Income		19		100		495		1,529
Interest Income		76		755		442		2,399
Purchased Coal Sales		0		3,136		0		9,052
Other		563		403		639		1,325		515		100
Miscellaneous Other Income	$	21,001	$	11,188	$	71,107	$	36,674	$	3,189	$	16,170

Contract buyout income earned during the three months ended March 31, 2020 was primarily the result of partial contract buyouts that involved negotiations to reduce coal quantities of several ~~customer~~customers were otherwise obligated to purchase under contracts in exchange for payment of certain fees to the Company, and do not impact forward contract terms.

~~The sale of certain coal lease contracts was in connection with~~ ~~one~~ ~~of several transactions completed in the~~ ~~three~~ ~~months ended~~ ~~September 30, 2020~~ ~~related to the Company's non-operating surface and mineral assets outside of the Pennsylvania Mining Complex.~~

~~Royalty income represents earned revenue related to overriding royalty agreements or coal reserve leases between the Company and~~ ~~third~~~~-party operators.~~

~~Purchased coal sales include earned revenue related to coal purchased externally by the Company to blend and resell in order to fulfill various contracts.~~

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NOTE 5—COMPONENTS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

The components of Net Periodic Benefit (Credit) Cost are as follows:

	*Pension Benefits*												*Other Post-Employment Benefits*												Pension Benefits						Other Post-Employment Benefits
	*Three Months Ended*						*Nine Months Ended*						*Three Months Ended*						*Nine Months Ended*						Three Months Ended						Three Months Ended
	*September 30,*						*September 30,*						*September 30,*						*September 30,*						March 31,						March 31,
	*2020*			*2019*			*2020*			*2019*			*2020*			*2019*			*2020*			*2019*			2021			2020			2021			2020
Service Cost	$	296		$	987		$	887		$	2,963		$	0		$	0		$	0		$	0		$	279		$	296		$	0		$	0
Interest Cost		5,044			6,275			15,132			18,825			3,199			4,580			9,597			13,740			3,550			5,044			1,818			3,199
Expected Return on Plan Assets		(10,455	)		(10,114	)		(31,365	)		(30,343	)		0			0			0			0			(10,542	)		(10,455	)		0			0
Amortization of Prior Service Credits		0			(92	)		0			(275	)		(601	)		(601	)		(1,804	)		(1,804	)		0			0			(601	)		(601	)
Amortization of Actuarial Loss		1,730			1,490			5,191			4,469			2,319			2,315			6,958			6,946			1,367			1,730			1,629			2,319
Net Periodic Benefit (Credit) Cost	$	(3,385	)	$	(1,454	)	$	(10,155	)	$	(4,361	)	$	4,917		$	6,294		$	14,751		$	18,882		$	(5,346	)	$	(3,385	)	$	2,846		$	4,917

(Credits) expenses related to pension and other post-employment benefits are reflected in Operating and Other Costs in the Consolidated Statements of Income.

NOTE 6—COMPONENTS OF COAL WORKERS’ PNEUMOCONIOSIS (CWP) AND WORKERS’ COMPENSATION NET PERIODIC BENEFIT COSTS:

The components of Net Periodic Benefit Cost are as follows:

	*CWP*								*Workers' Compensation*												CWP				Workers' Compensation
	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*						*Nine Months Ended*						Three Months Ended				Three Months Ended
	*September 30,*				*September 30,*				*September 30,*						*September 30,*						March 31,				March 31,
	*2020*		*2019*		*2020*		*2019*		*2020*			*2019*			*2020*			*2019*			2021		2020		2021			2020
Service Cost	$	1,150	$	948	$	3,452	$	2,844	$	1,569		$	1,421		$	4,707		$	4,264		$	1,115	$	1,151	$	1,059		$	1,569
Interest Cost		1,552		1,750		4,655		5,250		461			646			1,383			1,939			1,178		1,551		282			461
Amortization of Actuarial Loss (Gain)		1,401		254		4,203		762		(122	)		(193	)		(366	)		(580	)		2,091		1,401		(45	)		(122	)
State Administrative Fees and Insurance Bond Premiums		0		0		0		0		583			510			1,665			1,671			0		0		468			621
Net Periodic Benefit Cost	$	4,103	$	2,952	$	12,310	$	8,856	$	2,491		$	2,384		$	7,389		$	7,294		$	4,384	$	4,103	$	1,764		$	2,529

NOTE 7—INCOME TAXES:

The provision for income taxes for the three months ended March 31, 2021 was $5,185, or 16.4% of earnings before income taxes based on the actual year-to-date effective rate for this period. The income tax provision for interim periods is generally determined using an estimate of the Company's annual effective tax rate, and adjusted for discrete items, if any, in the relevant period. However, given current and expected operating activities during the year, considering the significant benefit from excess percentage depletion, estimating a reliable annual effective tax rate has become difficult as small changes in forecasted results can produce significant changes to the Company's annual effective tax rate. Therefore, the Company has determined that the actual year-to-date effective tax rate is the best estimate for the reporting period ended March 31, 2021. The Company will continue to utilize this methodology until reliable estimates of the annual effective tax rate can be made. The effective tax rate for the three months ended March 31, 2021 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion, offset by the impact of tax expense related to compensation.

During the three months ended March 31, 2020, the Company evaluated the impact of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which ~~was signed into law by the President of the United States in~~ ~~March 2020.~~ ~~The CARES Act has~~had various income tax related provisions, including temporary net operating loss carryback and limitation measures, a relaxation of the limitation on interest deductions, the postponement of statutory filing dates, and a technical correction of the 2017 Tax Cuts and Jobs Act related to qualified improvement property.

~~The Company's year-to-date tax rate is based on its estimated full year effective tax rate. The effective tax rate for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~ ~~differs from the U.S. federal statutory rate of~~ ~~21%,~~ primarily due to the income tax benefit for excess percentage depletion, offset by the impact of discrete tax expense related to equity compensation and the unfavorable impact on percentage depletion related to the additional interest deduction available under the CARES Act and the final regulations on interest limitation regulations (~~“163j~~ ~~regulations”) issued by the Treasury Department.~~ The CARES Act increased the amount of deductible interest from 30% of adjusted taxable income to 50% for tax years 2019 and 2020, which ~~generates current~~generated a cash tax benefit, but also ~~reduces the base of earnings upon which percentage depletion was computed. The final~~ ~~163j~~ ~~regulations also allowed the Company to deduct additional interest expense, but also reduce~~reduced the base of earnings upon which percentage depletion was computed. The effective tax rate for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 was ~~(0.6%)~~44.6%, composed of tax expense of 21.8% from operations and discrete tax items of $902 related to equity compensation, $1,139 related to the effect of the CARES Act, and $3,059 related to the effect of the final ~~163j~~ ~~regulations, as noted above.~~

~~The effective tax rate for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~ ~~was (0.3)%, composed of a tax expense of 0.2% from operations and a discrete tax benefit of (0.5)% primarily related to equity compensation. The effective tax rate for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~ ~~differs~~which differed from the U.S. federal statutory rate of 21%, primarily due to ~~the~~discrete income tax charges related to equity compensation and the effect of the CARES Act as noted above, partially offset by the benefit anticipated for excess percentage depletion.

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The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019~~2020, the Company did not have any unrecognized tax benefits. ~~If accrual for interest or penalties is required, it is the Company's policy to include these as a component of income tax expense (benefit).~~

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. Under the provisions of the tax matters agreement entered into between the Company and its former parent on November 28, 2017 (the “TMA”), certain subsidiaries of the Company are subject to examination for ~~tax years for the~~ period January 1, ~~2016~~2017 through ~~tax year~~ ~~December 31, 2019~~November 28, 2017. ~~for certain state and foreign returns. Further,~~Furthermore, the Company is subject to examination for the period November 28, 2017 through ~~the tax year~~ December 31, ~~2019~~2020 for federal and ~~certain~~ state returns.

NOTE 8—CREDIT LOSSES:

Effective January 1, 2020, the Company adopted ASU 2016-013, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade and other receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under previous accounting guidance. The Company recorded a cumulative-effect adjustment to retained earnings in the amount of $3,298, net of $1,109 of income taxes, for expected credit losses on financial assets at the adoption date.

The following table illustrates the impact of ASC 326.

	*January 1, 2020*
	*As Reported Under ASC 326*		*Pre-ASC 326 Adoption*		*Impact of ASC 326 Adoption*

Trade Receivables	$	3,051	$	2,100	$	951
Other Receivables		3,372		711		2,661
Other Assets		795		0		795
Allowance for Credit Losses on Receivables	$	7,218	$	2,811	$	4,407

The Company is exposed to credit losses primarily through sales of products and services. The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade and other accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on an aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company's monitoring activities include timely account reconciliations, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the novel coronavirus (COVID-19) pandemic and determined that the estimate of credit losses was not significantly impacted.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes to the assessment of anticipated payment, changes in economic conditions, current industry trends in the markets the Company serves, and changes in the financial health of the Company's counterparties.

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The following table provides a roll-forward of the allowance for credit losses by portfolio segment that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.

Trade Receivables

Other Receivables

Other Assets

Beginning Balance, January 1, 2020
$ 2,100 $ 711 $ 0
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings
951 2,661 795
Provision for expected credit losses
1,823 1,120 851
Ending Balance, September 30, 2020
$ 4,874 $ 4,492 $ 1,646

	*Trade Receivables*		*Other Receivables*		*Other Assets*

Beginning Balance, December 31, 2020	$	4,426	$	4,710	$	1,661
Provision for expected credit losses		120		2,024		12
Ending Balance, March 31, 2021	$	4,546	$	6,734	$	1,673

NOTE 9—INVENTORIES:

Inventory components consist of the following:

	*September 30,*		*December 31,*		*March 31,*		*December 31,*
	*2020*		*2019*		*2021*		*2020*
Coal	$	6,640	$	2,484	$	10,227	$	7,163
Supplies		49,937		51,647		44,982		49,037
Total Inventories	$	56,577	$	54,131	$	55,209	$	56,200

Inventories are stated at the lower of cost or net realizable value. The cost of coal inventories is determined by the first-in, first-out (“FIFO”) method. Coal inventory costs include labor, supplies, equipment costs, operating overhead, depreciation, depletion, amortization and other related costs. The cost of supplies inventory is determined by the average cost method and includes operating and maintenance supplies to be used in the Company's coal operations.

NOTE 10—ACCOUNTS RECEIVABLE SECURITIZATION:

CONSOL Energy and certain of its U.S. subsidiaries are parties to a trade accounts receivable securitization facility with financial institutions for the sale on a continuous basis of eligible trade accounts receivable. In March 2020, the securitization facility was amended to, among other things, extend the maturity date from August 30, 2021 to March 27, 2023.

Pursuant to the securitization facility, CONSOL Thermal Holdings LLC, an indirect, wholly-owned subsidiary of the Partnership, sells current and future trade receivables to CONSOL Pennsylvania Coal Company ~~LLC.~~LLC, a wholly-owned subsidiary of the Company. CONSOL Marine Terminals LLC, a wholly-owned subsidiary of the Company, and CONSOL Pennsylvania Coal Company LLC sell and/or contribute current and future trade receivables (including receivables sold to CONSOL Pennsylvania Coal Company LLC by CONSOL Thermal Holdings LLC) to CONSOL Funding LLC, a wholly-owned subsidiary of the Company (the “SPV”). The SPV, in turn, pledges its interests in the receivables to PNC Bank, N.A., which either makes loans or issues letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the securitization facility may not exceed $100 million.

Loans under the securitization facility accrue interest at a reserve-adjusted LIBOR market index rate equal to the one-month Eurodollar rate. Loans and letters of credit under the securitization facility also accrue a program fee and a letter of credit participation fee, respectively, ranging from 2.00% to 2.50% per annum depending on the total net leverage ratio of CONSOL Energy. In addition, the SPV paid certain structuring fees to PNC Capital Markets LLC and ~~will pay~~pays other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

At ~~September 30,~~March 31, 2021, the Company's eligible accounts receivable yielded $25,197 of borrowing capacity. At March 31, 2021, the facility had 0 outstanding borrowings and $25,500 of letters of credit outstanding, leaving no unused capacity. CONSOL Energy posted $303 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. Cash collateral of $303 is included in Restricted Cash in the Consolidated Balance Sheets. At December 31, 2020, the Company's eligible accounts receivable yielded ~~$30,660~~$31,868 of borrowing capacity. At ~~September 30,~~December 31, 2020, the facility had 0 outstanding borrowings and ~~$30,100~~$31,218 of letters of credit outstanding, leaving available borrowing capacity of ~~$560. At~~ ~~December 31, 2019~~~~, the Company's eligible accounts receivable yielded $41,282 of borrowing capacity. At~~ ~~December 31, 2019~~~~, the facility had 0 outstanding borrowings and $41,211 of letters of credit outstanding, leaving available borrowing capacity of $71.~~$650. Costs associated with the receivables facility totaled ~~$249~~$261 and ~~$882~~$341 for the three ~~and~~ ~~nine~~months ended ~~September 30, 2020~~March 31, 2021 ~~, respectively, and $344 and $1,095 for the~~ ~~three~~and ~~nine~~ ~~months ended~~ ~~September 30, 2019~~2020, respectively. These costs have been recorded as financing fees which are included in Operating and Other Costs in the Consolidated Statements of Income. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.

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NOTE 11—PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

	*September 30,*		*December 31,*		*March 31,*		*December 31,*
	*2020*		*2019*		*2021*		*2020*
Plant and Equipment	$	3,131,792	$	3,028,514	$	3,118,268	$	3,134,149
Coal Properties and Surface Lands		874,439		872,909		875,079		874,567
Airshafts		449,863		437,003		456,083		452,976
Mine Development		343,960		342,706		356,136		354,691
Advance Mining Royalties		326,649		327,048		326,173		327,313
Total Property, Plant and Equipment		5,126,703		5,008,180		5,131,739		5,143,696
Less: Accumulated Depreciation, Depletion and Amortization		3,043,463		2,916,015		3,117,651		3,094,634
Total Property, Plant and Equipment, Net	$	2,083,240	$	2,092,165	$	2,014,088	$	2,049,062

Coal reserves are ~~controlled~~ either ~~through~~owned in fee ~~ownership~~ or controlled by lease. The duration of the leases vary; however, the lease terms are generally extended automatically to the exhaustion of economically recoverable reserves, as long as active mining continues. Coal interests held by lease provide the same rights as fee ownership for mineral extraction and are legally considered real property interests.

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, property, plant and equipment includes gross assets under finance leases of ~~$85,908~~$74,504 and ~~$52,729,~~$112,334, respectively. Accumulated amortization for finance leases was ~~$49,453~~$19,325 and ~~$31,373~~$56,761 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, respectively. Amortization expense for assets under finance leases approximated ~~$6,178~~$8,619 and ~~$3,919~~$4,964 for the three months ended ~~September 30, 2020~~ ~~and~~ ~~2019~~March 31, 2021 and ~~$16,680 and $11,753 for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~ 2020~~and~~ ~~2019~~, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying Consolidated Statements of Income.

NOTE 12—OTHER ACCRUED LIABILITIES:

	*September 30,*		*December 31,*		*March 31,*		*December 31,*
	*2020*		*2019*		*2021*		*2020*
Subsidence Liability	$	89,917	$	90,645	$	91,432	$	89,554
Accrued Payroll and Benefits		20,444		21,102		23,185		21,179
Accrued Interest						8,985		6,236
Litigation						8,457		3,625
Accrued Other Taxes						5,267		7,126
Accrued Equipment Obligations		10,097		0		300		6,698
Accrued Interest		9,576		6,281
Other		22,004		21,034		20,319		20,220
Current Portion of Long-Term Liabilities:
Postretirement Benefits Other than Pensions		30,410		31,833		25,867		26,073
Asset Retirement Obligations		22,057		21,741		20,587		20,587
Operating Lease Liability		20,020		19,479		19,540		20,241
Pneumoconiosis Benefits		12,092		12,331		12,133		12,203
Workers' Compensation		10,778		11,323		9,683		9,653
Total Other Accrued Liabilities	$	247,395	$	235,769	$	245,755	$	243,395

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NOTE 13—LONG-TERM DEBT:

	*September 30,*		*December 31,*		*March 31,*		*December 31,*
	*2020*		*2019*		*2021*		*2020*
Debt:
Term Loan B due in September 2024 (Principal of $270,875 and $272,938 less Unamortized Discount of $1,000 and $1,187, 4.65% and 6.30% Weighted Average Interest Rate, respectively)	$	269,875	$	271,751
Term Loan B due in September 2024 (Principal of $264,652 and $270,188 less Unamortized Discount of $875 and $938, 4.61% and 4.65% Weighted Average Interest Rate, respectively)					$	263,777	$	269,250
11.00% Senior Secured Second Lien Notes due November 2025		176,452		221,628		156,957		167,147
MEDCO Revenue Bonds in Series due September 2025 at 5.75%		102,865		102,865		102,865		102,865
Term Loan A due in March 2023 (5.50% and 5.55% Weighted Average Interest Rate, respectively)		72,500		88,750
Term Loan A due in March 2023 (5.50% Weighted Average Interest Rate)						60,000		66,250
Other Asset-Backed Financing Arrangements		21,885		9,289		2,632		2,813
Advance Royalty Commitments (10.78% Weighted Average Interest Rate)		1,895		1,895
Advance Royalty Commitments (13.68% Weighted Average Interest Rate)						2,185		2,185
Less: Unamortized Debt Issuance Costs		10,759		10,323		9,083		9,921
		634,713		685,855		579,333		600,589
Less: Amounts Due in One Year*		47,693		32,053		28,889		33,731
Long-Term Debt	$	587,020	$	653,802	$	550,444	$	566,858

* Excludes current portion of Finance Lease Obligations of ~~$21,261~~$21,168 and ~~$18,219~~$20,115 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, respectively.

In November 2017, CONSOL Energy entered into a revolving credit facility with PNC Bank, N.A. with commitments up to $300 million (the “Revolving Credit Facility”), a Term Loan A Facility of up to $100 million (the “TLA Facility”) and a Term Loan B Facility of up to $400 million (the “TLB Facility”, and together with the Revolving Credit Facility and the TLA Facility, the “Senior Secured Credit Facilities”). On March 28, 2019, the Company amended the Senior Secured Credit Facilities to increase the borrowing commitment of the Revolving Credit Facility to $400 million and reallocate the principal amounts outstanding under the TLA Facility and TLB Facility. On March 29, 2021, the Company amended the Senior Secured Credit Facilities to revise the negative covenant with respect to other indebtedness to allow the Company to incur obligations under the tax-exempt solid waste disposal revenue bonds. On June 5, 2020, the Company amended the Senior Secured Credit Facilities (the “amendment”) to provide eight quarters of financial covenant relaxation, effect an increase in the rate at which borrowings under the Revolving Credit Facility and the TLA Facility bear interest, and add an anti-cash hoarding provision. Borrowings under the Company's Senior Secured Credit Facilities bear interest at a floating rate which can be, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an alternate base rate plus an applicable margin. The applicable margin for the Revolving Credit Facility and TLA Facility depends on the total net leverage ratio, whereas the applicable margin for the TLB Facility is fixed. The amendment increased the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility. The maturity date of the Revolving Credit and TLA Facilities is March 28, 2023. The TLB Facility's maturity date is September 28, 2024. Obligations under the Senior Secured Credit Facilities ~~(Term Loan B and Term Loan A, together with the Revolving Credit Facility, on which there were 0 outstanding borrowings at~~ ~~September 30, 2020~~) are guaranteed by (i) all owners of ~~the 75% undivided economic interest in~~ the PAMC held by the Company, (ii) any other members of the Company’s group that own any portion of the collateral securing the Revolving Credit Facility, and (iii) subject to certain customary exceptions and agreed materiality thresholds, all other existing or future direct or indirect wholly-owned restricted subsidiaries of the ~~Company (excluding the Partnership and its wholly-owned subsidiaries).~~Company. The obligations are secured by, subject to certain exceptions (including a limitation of pledges of equity interests in certain subsidiaries and certain thresholds with respect to real property), a first-priority lien on (i) the Company’s ~~75%~~ ~~undivided economic~~ interest in the PAMC, (ii) the limited partner units of the Partnership held by the Company, (iii) the equity interests in CONSOL Coal Resources GP LLC held by the Company, (iv) the CONSOL Marine Terminal, (v) the Itmann Mine and ~~(v)~~(vi) the 1.5 billion tons of Greenfield Reserves.

The Senior Secured Credit Facilities contain a number of customary affirmative covenants. In addition, the Senior Secured Credit Facilities contain a number of negative covenants, including (subject to certain exceptions) limitations on (among other things): indebtedness, liens, investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness. The amendment added additional conditions to be met for the covenants relating to investments in joint ventures, general investments, share repurchases, dividends, and repurchases of Second Lien Notes. The additional conditions require 0 outstanding borrowings and no more than $200 million of outstanding letters of credit on the Revolving Credit Facility. Further restrictions apply to investments in joint ventures, share repurchases and dividends that require the total net leverage ratio shall not be greater than 2.00 to 1.00.

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The Revolving Credit Facility and TLA Facility also include covenants relating to (i) a maximum first lien gross leverage ratio, (ii) a maximum total net leverage ratio, and (iii) a minimum fixed charge coverage ratio. The maximum first lien gross leverage ratio is calculated as the ratio of Consolidated First Lien Debt to Consolidated ~~EBITDA, excluding the Partnership.~~EBITDA. Consolidated EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, extraordinary gains and losses, gains and losses on discontinued operations, non-cash charges related to legacy employee liabilities and gains and losses on debt extinguishment, and ~~includes cash distributions received from the Partnership and~~ subtracts cash payments related to legacy employee liabilities. The maximum total net leverage ratio is calculated as the ratio of Consolidated Indebtedness, minus Cash on Hand, to Consolidated ~~EBITDA, excluding the Partnership.~~EBITDA. The minimum fixed charge coverage ratio is calculated as the ratio of Consolidated EBITDA to Consolidated Fixed ~~Charges, excluding the Partnership.~~Charges. Consolidated Fixed Charges, as used in the covenant calculation, include cash interest payments, cash payments for income taxes, scheduled debt repayments, dividends paid, and Maintenance Capital Expenditures. The amendment revised the financial covenants applicable to the Revolving Credit Facility and TLA Facility relating to the maximum first lien gross leverage ratio, maximum total net leverage ratio and minimum fixed charge coverage ratio, so that for the fiscal quarters ending June 30, 2020 through March 31, 2021, the maximum first lien gross leverage ratio shall be 2.50 to 1.00, the maximum total net leverage ratio shall be 3.75 to 1.00, and the minimum fixed charge coverage ratio shall be 1.00 to 1.00; for the fiscal quarters ending June 30, 2021 through September 30, 2021, the maximum first lien gross leverage ratio shall be 2.25 to 1.00 and the maximum total net leverage ratio shall be 3.50 to 1.00; for the fiscal quarters ending June 30, 2021 through March 31, 2022, the minimum fixed charge coverage ratio shall be 1.05 to 1.00; for the fiscal quarters ending December 31, 2021 through March 31, 2022, the maximum first lien gross leverage ratio shall be 2.00 to 1.00 and the maximum total net leverage ratio shall be 3.25 to 1.00; and for the fiscal quarters ending on or after June 30, 2022, the maximum first lien gross leverage ratio shall be 1.75 to 1.00, the maximum total net leverage ratio shall be 2.75 to 1.00 and the minimum fixed charge coverage ratio shall be 1.10 to 1.00. The maximum first lien gross leverage ratio was ~~2.04~~1.37 to 1.00 at ~~September 30, 2020~~March 31, 2021. The maximum total net leverage ratio was ~~3.38~~1.97 to 1.00 at ~~September 30, 2020~~March 31, 2021. The minimum fixed charge coverage ratio was ~~1.33~~1.88 to 1.00 at ~~September 30, 2020~~March 31, 2021. The Company was in compliance with all of its ~~debt~~financial covenants under the Senior Secured Credit Facilities as of ~~September 30, 2020~~March 31, 2021. The Company is continuing to actively monitor the effects of the ongoing COVID-19 pandemic on its liquidity.

The TLB Facility also includes a financial covenant that requires the Company to repay a certain amount of its borrowings under the TLB Facility within ten business days after the date it files its Form 10-K with the Securities and Exchange Commission if the Company has excess cash flow (as defined in the credit agreement for the Senior Secured Credit Facilities) during the year covered by the applicable Form 10-K. During the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2021, , CONSOL Energy made the required repayment of approximately ~~$110~~$5 million based on the amount of the Company's excess cash flow as of December 31, ~~2018.~~ 2020~~For fiscal year~~ ~~2018,~~ ~~such repayment was equal to 75% of the Company's excess cash flow less any voluntary prepayments of its borrowings under the TLB Facility made by the Company during~~ ~~2018.~~ ~~For all subsequent fiscal years, the~~. The required repayment is equal to a certain percentage of the Company’s excess cash flow for such year, ranging from 0% to 75% depending on the Company’s total net leverage ratio, less the amount of certain voluntary prepayments made by the Company, if any, under the TLB Facility during such fiscal year. ~~Based on the Company's excess cash flow calculation,~~ no ~~repayment was required with respect to the year ended~~ ~~December 31, 2019~~. The amount of excess cash flow is a covenant feature only applicable as of the Company's year-end and will be calculated as of December 31, ~~2020.~~2021.

At ~~September 30,~~March 31, 2021, the Revolving Credit Facility had no borrowings outstanding and $145,656 of letters of credit outstanding, leaving $254,344 of unused capacity. At December 31, 2020, the Revolving Credit Facility had 0 borrowings outstanding and ~~$99,126~~$125,938 of letters of credit outstanding, leaving ~~$300,874 of unused capacity. At~~ ~~December 31, 2019~~~~, the Revolving Credit Facility had 0 borrowings outstanding and $69,588 of letters of credit outstanding, leaving $330,412~~$274,062 of unused capacity. From time to time, CONSOL Energy is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. CONSOL Energy sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

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In November 2017, CONSOL Energy issued $300 million in aggregate principal amount of 11.00% Senior Secured Second Lien Notes due 2025 (the “Second Lien Notes”) pursuant to an indenture (the “Indenture”) dated as of November 13, 2017, by and between the Company and UMB Bank, N.A., a national banking association, as trustee and collateral trustee (the “Trustee”). On November 28, 2017, certain subsidiaries of the Company executed a supplement to the Indenture and became party to the Indenture as a guarantor (the “Guarantors”). The Second Lien Notes are secured by second priority liens on substantially all of the assets of the Company and the Guarantors that are pledged ~~and~~ on a first-priority basis as collateral securing the Company’s obligations under the Senior Secured Credit Facilities (described above), subject to certain exceptions under the Indenture. The Indenture contains covenants that will limit the ability of the Company and the Guarantors to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) declare or pay dividends on the Company’s common stock, redeem stock or make other distributions to the Company’s stockholders; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Company’s restricted subsidiaries; (vi) merge or consolidate, or sell, transfer, lease or dispose of substantially all of the Company’s assets; (vii) sell or otherwise dispose of certain assets, including equity interests in subsidiaries; (viii) enter into transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the Second Lien Notes achieve an investment grade rating from both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. and no default under the Indenture exists, many of the foregoing covenants will terminate and cease to apply.

~~Table~~

The only non-guarantor subsidiary of ~~Contents~~

~~During~~ the Senior Credit Facilities is the SPV, which holds the assets pledged to the Accounts Receivable Securitization Facility. The SPV had total assets of $127,258 and $123,468, comprised mainly of $126,290 and $122,639 trade receivables, as of ~~nine~~March 31, 2021 and December 31, 2020, respectively. Net income attributable to the SPV was $1,160 and $1,047 for three months ended ~~September 30,~~March 31, 2021 and 2020, respectively, which primarily reflected intercompany fees related to purchasing the receivables, which are eliminated in the Consolidated Financial Statements contained within this Form 10-Q. During the three months ended March 31, 2021 and 2020, there were no borrowings or payments under the Accounts Receivable Securitization Facility. See Note 10 - Accounts Receivable Securitization for additional information. All other subsidiaries are guarantors of the Senior Secured Credit Facilities.

During the three months ended March 31, 2021, the Company spent $9,338 to retire $10,190 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025 and made a required repayment of approximately $5 million on the TLB Facility (discussed above). During the three months ended March 31, 2020, the Company ~~repurchased $45,176~~spent $25,480 to retire $43,176 of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025. ~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~, the Company made a required repayment of approximately $110 million on the TLB Facility (discussed above) and amended the Senior Secured Credit Facilities. The Company also repurchased $35,048 of its outstanding 11.00% Senior Secured Second Lien Notes due in ~~2025~~ ~~during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~. As part of these transactions, ~~$1,078~~$683 and ~~$17,911~~$16,833 was included in Gain on Debt Extinguishment on the Consolidated Statements of Income for the three ~~and~~ ~~nine~~months ended ~~September 30, 2020,~~March 31, 2021 ~~respectively, and $801 and $25,444 was included in Loss on Debt Extinguishment on the Consolidated Statements of Income for the~~ ~~three~~and ~~nine~~ ~~months ended~~ ~~September 30, 2019~~2020, respectively.

The Company is a borrower under ~~two~~an asset-backed financing ~~arrangements~~arrangement related to certain equipment. The equipment, which ~~has~~had an approximate value of ~~$21,885,~~$2,632 and $2,813 at March 31, 2021 and December 31, 2020, respectfully, fully collateralizes the ~~loans.~~loan. As of ~~September 30, 2020~~March 31, 2021, athe total outstanding loan of ~~$18,894 matures in~~ ~~December 2020~~ ~~and $2,991~~$2,632 matures in September 2024. The ~~loans~~loan had a weighted average interest rate of ~~4.30% and 5.07%~~3.61% at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020~~, respectively.~~.

During the year ended December 31, 2019,, the Company entered into interest rate swaps, which effectively converted $150,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2020 and 2021, and $50,000 of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2022. The interest rate swaps qualify for cash flow hedge accounting treatment and as such, the change in the fair value of the interest rate swaps is recorded on the Company's Consolidated Balance Sheets as an asset or liability. The effective portion of the gains or losses is reported as a component of accumulated other comprehensive loss and the ineffective portion is reported in earnings. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, the interest rate swap contracts were reflected in the Consolidated Balance Sheets at their fair value of $~~3,373~~2,275 and ~~$154,~~$2,834, respectively, which is recorded in Other Accrued Liabilities and Other Liabilities. The fair value of the interest rate swaps reflected an unrealized ~~loss~~gain of ~~$2,408~~$414 (net of ~~$810~~$144 tax) at ~~September 30, 2020~~March 31, 2021. and an unrealized loss of $2,773 (net of $933 tax) at March 31, 2020. The unrealized ~~loss~~gain (loss) is included on the Consolidated Statements of Stockholders' Equity as part of accumulated other comprehensive loss, as well as on the Consolidated Statements of Comprehensive Income as unrealized ~~loss~~gain (loss) on cash flow hedges. Some of the Company's interest rate swaps reached their effective date in the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021. and 2020. As such, a loss of ~~$1,005~~$532 and a gain of $4 was recognized in interest expense in the Consolidated Statements of Income for the ~~nine~~three months ended ~~September 30,~~ March 31, 2021 and 2020,. respectively. During ~~2020,~~2021, notional amounts of $150,000 will become effective. Based on the fair value of the Company's cash flow hedges at ~~September 30, 2020~~March 31, 2021, the Company expects expense of approximately ~~$2,069~~$1,694 to be reclassified into earnings in the next 12 months.

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NOTE 14—COMMITMENTS AND CONTINGENT LIABILITIES:

~~The Company and its former parent entered into a separation and distribution agreement on~~ ~~November 28, 2017~~ that implemented the legal and structural separation of the Company from its former parent. The separation and distribution agreement also identified the assets of the Coal Business that were transferred to the Company and the liabilities and contracts related to the Coal Business that were assumed by the Company as part of the separation and distribution, and provides post-closing indemnification obligations and procedures between the Company and its former parent relating to the liabilities of the Coal Business that the Company assumed.

The Company is subject to various lawsuits and claims with respect to such matters as personal injury, wrongful death, damage to property, exposure to hazardous substances, governmental regulations including environmental remediation, employment and contract disputes and other claims and actions arising out of the normal course of business. The Company accrues the estimated loss for these lawsuits and claims when the loss is probable and reasonably estimable. The Company’s estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of the Company as of ~~September 30, 2020~~March 31, 2021. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the Company’s financial position, results of operations or cash flows; however, such amounts cannot be reasonably estimated. The amount claimed against the Company as of ~~September 30, 2020~~March 31, 2021 is disclosed below when an amount is expressly stated in the lawsuit or claim, which is not often the case.

Fitzwater Litigation: Three nonunion retired coal miners have sued Fola Coal Company LLC, Consolidation Coal Company (“CCC”) and CONSOL of Kentucky Inc. (“COK”) (as well as the Company's former parent) in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. The Plaintiffs contend they relied to their detriment on oral statements and promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were allegedly denied access to Summary Plan Documents that clearly reserved the right to modify or terminate the Retiree Health and Welfare Plan subject to Plaintiffs’ claims. Pursuant to Plaintiffs’ amended complaint filed on April 24, 2017, Plaintiffs request that retiree health benefits be reinstated and seek to represent a class of all nonunion retirees who were associated with AMVEST and COK areas of operation. On October 15, 2019, Plaintiffs’ supplemental motion for class certification was denied on all counts. On July 15, 2020, Plaintiffs filed an interlocutory appeal with the Fourth Circuit Court of Appeals on the Order denying class certification. The Fourth Circuit denied Plaintiffs' appeal on August 14, 2020. On October 1, 2020, the District Court entered a pretrial order setting the trial date, ~~for~~which was held in ~~November 16, 2020.~~February 2021. No ruling has been issued by the judge. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

Casey Litigation: A class action lawsuit was filed on August 23, 2017 on behalf of two nonunion retired coal miners against CCC, COK, CONSOL Buchanan Mining Co., LLC and Kurt Salvatori in West Virginia Federal Court alleging ERISA violations in the termination of retiree health care benefits. Filed by the same lawyers who filed the Fitzwater litigation, and raising nearly identical claims, the Plaintiffs contend they relied to their detriment on oral promises of “lifetime health benefits” allegedly made by various members of management during Plaintiffs’ employment and that they were not provided with copies of Summary Plan Documents clearly reserving to the Company the right to modify or terminate the Retiree Health and Welfare Plan. Plaintiffs request that retiree health benefits be reinstated for them and their dependents and seek to represent a class of all nonunion retirees of any subsidiary of the Company's former parent that operated or employed individuals in McDowell or Mercer Counties, West Virginia, or Buchanan or Tazewell Counties, Virginia whose retiree welfare benefits were terminated. On December 1, 2017, the trial court judge in Fitzwater signed an order to consolidate Fitzwater with Casey. The Casey complaint was amended on March 1, 2018 to add new plaintiffs, add defendant CONSOL Pennsylvania Coal Company, LLC and eliminate defendant CONSOL Buchanan Mining Co., LLC in an attempt to expand the class of retirees. On October 15, 2019, Plaintiffs’ supplemental motion for class certification was denied on all counts. On July 15, 2020, Plaintiffs filed an interlocutory appeal with the Fourth Circuit Court of Appeals on the Order denying class certification. The Fourth Circuit denied Plaintiffs' appeal on August 14, 2020. On October 1, 2020, the District Court entered a pretrial order setting the trial date, ~~for~~which was held in ~~November 16, 2020.~~February 2021. No ruling has been issued by the judge. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

United Mine Workers of America 1992 Benefit Plan Litigation: In 2013, Murray Energy and its subsidiaries (“Murray”) entered into a stock purchase agreement (the “Murray sale agreement”) with the Company's former parent pursuant to which Murray acquired the stock of CCC and certain subsidiaries and certain other assets and liabilities. At the time of sale, the liabilities included certain retiree medical liabilities under the Coal Industry Retiree Health ~~Benefits~~Benefit Act of 1992 (“Coal Act”) and certain federal black lung liabilities under the Black Lung Benefits Act (“BLBA”). Based upon information available, the Company estimates that the annual servicing costs of these liabilities are approximately $10 million to $20 million per year for the next ten years. The annual servicing cost would decline each year since the beneficiaries of the Coal Act consist principally of miners who retired prior to 1994. Murray filed for Chapter 11 bankruptcy in October 2019. As part of the ongoing bankruptcy proceedings, Murray entered into a settlement with the United Mine Workers of America 1992 Benefit Plan (“1992 Plan”) to transfer retirees in the Murray Energy Section 9711 Plan into the 1992 Plan, which the bankruptcy court approved on April 30, 2020. The 1992 Plan recently filed an action in the United States District Court for the District of Columbia asking the court to make a determination whether the Company's former parent or the Company has any continuing retiree medical liabilities under the Coal Act. The Murray sale agreement includes indemnification by Murray with respect to the Coal Act and BLBA liabilities. In addition, the Company had agreed to indemnify its former parent relative to certain pre-separation liabilities. As of September 16, 2020, the Company has entered into a settlement agreement with Murray and has withdrawn its claims in bankruptcy. See Note 2 - Major Transactions for a discussion of this settlement agreement. The Company will continue to vigorously defend any claims that attempt to transfer any of such liabilities directly or indirectly to the Company, including raising all applicable defenses against the 1992 Plan’s suit and those of any other party.

Other Matters: Various Company subsidiaries are defendants in certain other legal proceedings arising out of the conduct of the Coal Business prior to the separation and distribution, and the Company is also a defendant in other legal proceedings following the separation and distribution. In the opinion of management, based upon an investigation of these matters and discussion with legal counsel, the ultimate outcome of such other legal proceedings, individually and in the aggregate, is not expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity.

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As part of the separation and distribution, the Company assumed various financial obligations relating to the Coal Business and agreed to reimburse its former parent for certain financial guarantees relating to the Coal Business that its former parent retained following the separation and distribution. Employee-related financial guarantees have primarily been provided to support the ~~United Mine Workers’ of America’s~~ 1992 ~~Benefit~~ Plan and federal black lung and various state workers’ compensation self-insurance programs. Environmental financial guarantees have primarily been provided to support various performance bonds related to reclamation and other environmental issues. Other financial guarantees have been extended to support sales contracts, insurance policies, legal matters, full and timely payments of mining equipment leases, and various other items necessary in the normal course of business.

The following is a summary, as of ~~September 30, 2020~~March 31, 2021, of the financial guarantees, unconditional purchase obligations and letters of credit to certain third parties. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments, or under the separation and distribution agreement to the extent retained by the Company's former parent on behalf of the Coal Business. Certain letters of credit included in the table below were issued against other commitments included in this table. These amounts have not been reduced for potential recoveries under recourse or collateralization provisions. Generally, recoveries under reclamation bonds would be limited to the extent of the work performed at the time of the default. No ~~amounts related to these financial guarantees and letters of credit are recorded as liabilities in the financial statements.~~ The Company’s management believes that these ~~guarantees will expire without being funded, and therefore, the~~ commitments will not have a material adverse effect on the Company’s financial condition.

	*Amount of Commitment Expiration per Period*										*Amount of Commitment Expiration per Period*
	*Total Amounts Committed*		*Less Than 1 Year*		*1-3 Years*		*3-5 Years*		*Beyond 5 Years*		*Total Amounts Committed*		*Less Than 1 Year*		*1-3 Years*		*3-5 Years*		*Beyond 5 Years*
Letters of Credit:
Employee-Related	$	75,846	$	52,929	$	22,917	$	0	$	0	$	79,476	$	53,053	$	26,423	$	0	$	0
Environmental		398		398		0		0		0		398		398		0		0		0
Other		52,982		47,504		5,478		0		0		91,282		91,282		0		0		0
Total Letters of Credit		129,226		100,831		28,395		0		0	$	171,156	$	144,733	$	26,423	$	0	$	0
Surety Bonds:
Employee-Related		86,024		50,524		35,500		0		0	$	83,524	$	71,024	$	12,500	$	0	$	0
Environmental		576,584		555,300		21,284		0		0		538,320		507,367		30,953		0		0
Other		4,789		4,584		205		0		0		4,255		3,977		278		0		0
Total Surety Bonds		667,397		610,408		56,989		0		0	$	626,099	$	582,368	$	43,731	$	0	$	0
Guarantees:
Other		10,704		6,636		3,438		398		232	$	7,306	$	6,377	$	398	$	398	$	133
Total Guarantees		10,704		6,636		3,438		398		232
Total Commitments	$	807,327	$	717,875	$	88,822	$	398	$	232

Included in the above table are commitments and guarantees entered into in conjunction with the sale of Consolidation Coal Company and certain of its subsidiaries, which contain all five of its longwall coal mines in West Virginia and its river operations, to a third party. As part of the separation and distribution, the Company's former parent agreed to indemnify the Company and the Company agreed to indemnify its former parent in each case with respect to guarantees of certain equipment lease obligations that were assumed by the third party. In the event that the third party would default on the obligations defined in the agreements, the Company ~~would~~could be required to perform under the guarantees. As of ~~September 30, 2020~~March 31, 2021, the Company has not been required to perform under these guarantees. The equipment lease obligations are collateralized by the underlying assets. The current maximum estimated exposure under these guarantees as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is believed to be approximately ~~$16,000~~$7,000 and ~~$20,000,~~$8,000, respectively. At ~~September 30, 2020~~ ~~and~~ ~~December 31, 2019~~, the fair value of these guarantees was $259 and $482, respectively, and is included in Other Accrued Liabilities on the Consolidated Balance Sheets. The fair value of certain of the guarantees was determined using the Company’s risk-adjusted interest rate. Significant increases or decreases in the risk-adjusted interest rates ~~may~~ ~~result in a significantly higher or lower fair value measurement.~~ No other amounts related to financial guarantees and letters of credit are recorded as liabilities in the financial statements. Significant judgment is required in determining the fair value of these guarantees. The guarantees of the leases are classified within Level 3 ~~of the fair value hierarchy.~~

The Company regularly evaluates the likelihood of default for all guarantees based on an expected loss analysis and records the fair value, if any, of its guarantees as an obligation in the consolidated financial statements.

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NOTE 15—FAIR VALUE OF FINANCIAL INSTRUMENTS:

CONSOL Energy determines the fair value of assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources (including LIBOR-based discount rates), while unobservable inputs reflect the Company’s own assumptions of what market participants would use.

The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below.

Level One - Quoted prices for identical instruments in active markets.

Level Two - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including LIBOR-based discount rates.

Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity. The significant unobservable inputs used in the fair value measurement of the Company’s third-party guarantees are the credit risk of the third-party and the third-party surety bond markets. A significant increase or decrease in these values, in isolation, would have a directionally similar effect resulting in higher or lower fair value measurement of the Company’s Level 3 guarantees.

In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.

The financial instruments measured at fair value on a recurring basis are summarized below:

	*Fair Value Measurements at*								*Fair Value Measurements at*								*Fair Value Measurements at*							*Fair Value Measurements at*
	*September 30, 2020*								*December 31, 2019*								*March 31, 2021*							*December 31, 2020*
Description	*Level 1*		*Level 2*			*Level 3*			*Level 1*		*Level 2*			*Level 3*			*Level 1*		*Level 2*			*Level 3*		*Level 1*		*Level 2*			*Level 3*
Lease Guarantees	$	0	$	0		$	(259	)	$	0	$	0		$	(482	)
Derivatives ⁽¹⁾	$	0	$	(3,373	)	$	0		$	0	$	(154	)	$	0		$	0	$	(2,275	)	$	0	$	0	$	(2,834	)	$	0

(1) Interest rate swaps are valued based on observable market swap rates and are classified within Level 2 of the fair value hierarchy.

The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Long-term debt: The fair value of long-term debt is measured using unadjusted quoted market prices or estimated using discounted cash flow analyses. The discounted cash flow analyses are based on current market rates for instruments with similar cash flows.

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:

September 30, 2020

December 31, 2019

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Long-Term Debt
$ 645,472 $ 491,465 $ 696,178 $ 642,018

	*March 31, 2021*				*December 31, 2020*
	*Carrying*		*Fair*		*Carrying*		*Fair*
	*Amount*		*Value*		*Amount*		*Value*
Long-Term Debt	$	588,416	$	561,426	$	610,510	$	517,862

Certain of the Company’s debt is actively traded on a public market and, as a result, constitutes Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitutes Level 2 fair value measurements.

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NOTE 16—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 ~~Inc.~~ consists of ~~one~~2 reportable ~~segment:~~segments, the ~~Pennsylvania Mining Complex, which~~PAMC and the CONSOL Marine Terminal. The PAMC includes the Bailey Mine, the Enlow Fork Mine, the Harvey Mine and ~~the Central Preparation Plant.~~a centralized preparation plant. The PAMC segment’s principal activities ofinclude the ~~PAMC are~~ mining, preparation and marketing of thermal coal, sold primarily to industrial end-users, power ~~generators. It also includes selling,~~generators and metallurgical end-users. The CONSOL Marine Terminal provides coal export terminal services through the Port of Baltimore. Selling, general and administrative ~~activities, as well as various other activities assigned~~costs are allocated to the ~~PAMC.~~

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 ~~division~~segment includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC ~~division.~~or the CONSOL Marine Terminal segments. The diversified business activities include the ~~CONSOL Marine Terminal,~~ development of the Itmann Mine, the Greenfield Reserves, closed and idle mine activities, ~~selling, general~~other income, gain on asset sales related to non-core assets, and ~~administrative activities,~~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.~~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 in accordance with GAAP, and items excluded from Adjusted EBITDA are 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.

Industry segment results for the three months ended ~~September 30, 2020~~March 31, 2021 are:

	*PAMC*			*Other*		*Adjustments and Eliminations*		*Consolidated*				*PAMC*		*CONSOL Marine Terminal*		*Other*			*Adjustments and Eliminations*		*Consolidated*
Coal Revenue	$	184,066		$	309	$	0	$	184,375		(A)	$	284,465	$	0	$	1,070		$	0	$	285,535	(A)
Terminal Revenue		0			17,008		0		17,008				0		18,212		0			0		18,212
Freight Revenue		12,909			0		0		12,909				27,013		0		0			0		27,013
Total Revenue from Contracts with Customers	$	196,975		$	17,317	$	0	$	214,292			$	311,478	$	18,212	$	1,070		$	0	$	330,760
(Loss) Earnings Before Income Tax	$	(6,930	)	$	3,488	$	0	$	(3,442	)
Adjusted EBITDA												$	99,185	$	11,961	$	(4,431	)	$	0	$	106,715
Segment Assets	$	1,878,350		$	676,488	$	0	$	2,554,838			$	1,855,878	$	106,603	$	558,079		$	0	$	2,520,560
Depreciation, Depletion and Amortization	$	49,944		$	5,015	$	0	$	54,959			$	54,781	$	1,214	$	3,902		$	0	$	59,897
Capital Expenditures	$	15,733		$	3,775	$	0	$	19,508			$	12,579	$	60	$	1,161		$	0	$	13,800

Industry segment results for the three months ended ~~September 30, 2019~~ ~~are:~~

PAMC

Other
Adjustments and Eliminations
Consolidated

Coal Revenue
$ 301,542 $ 0 $ 0 $ 301,542
(A)
Terminal Revenue
0 16,303 0 16,303
Freight Revenue
3,599 0 0 3,599
Total Revenue from Contracts with Customers
$ 305,141 $ 16,303 $ 0 $ 321,444
Earnings (Loss) Before Income Tax
$ 30,546 $ (21,107 ) $ 0 $ 9,439
Segment Assets
$ 2,014,381 $ 708,854 $ 0 $ 2,723,235
Depreciation, Depletion and Amortization
$ 45,829 $ 8,541 $ 0 $ 54,370
Capital Expenditures
$ 45,232 $ 3,289 $ 0 $ 48,521

~~Table of Contents~~

~~Industry segment results for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~March 31, 2020 are:

	*PAMC*			*Other*			*Adjustments and Eliminations*		*Consolidated*				*PAMC*		*CONSOL Marine Terminal*		*Other*			*Adjustments and Eliminations*		*Consolidated*
Coal Revenue	$	541,545		$	595		$	0	$	542,140		(A)	$	255,452	$	0	$	0		$	0	$	255,452	(A)
Terminal Revenue		0			49,407			0		49,407				0		16,501		0			0		16,501
Freight Revenue		19,141			0			0		19,141				3,147		0		0			0		3,147
Total Revenue from Contracts with Customers	$	560,686		$	50,002		$	0	$	610,688			$	258,599	$	16,501	$	0		$	0	$	275,100
Loss Before Income Tax	$	(18,405	)	$	(9,400	)	$	0	$	(27,805	)
Adjusted EBITDA													$	63,579	$	10,554	$	(11,199	)	$	0	$	62,934
Segment Assets	$	1,878,350		$	676,488		$	0	$	2,554,838			$	1,949,655	$	86,036	$	617,777		$	0	$	2,653,468
Depreciation, Depletion and Amortization	$	145,154		$	10,903		$	0	$	156,057			$	48,418	$	1,257	$	5,268		$	0	$	54,943
Capital Expenditures	$	52,687		$	13,268		$	0	$	65,955			$	20,692	$	106	$	6,380		$	0	$	27,178

~~Industry segment results for~~(A) For the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2021 and 2020, ~~are:~~the PAMC segment had revenues from the following customers, each comprising over 10% of the Company's total sales:

PAMC

Other

Adjustments and Eliminations

Consolidated

Coal Revenue
$ 984,665 $ 0 $ 0 $ 984,665
(A)
Terminal Revenue
0 50,829 0 50,829
Freight Revenue
14,115 0 0 14,115
Total Revenue from Contracts with Customers
$ 998,780 $ 50,829 $ 0 $ 1,049,609
Earnings (Loss) Before Income Tax
$ 156,029 $ (80,115 ) $ 0 $ 75,914
Segment Assets
$ 2,014,381 $ 708,854 $ 0 $ 2,723,235
Depreciation, Depletion and Amortization
$ 136,124 $ 15,121 $ 0 $ 151,245
Capital Expenditures
$ 117,417 $ 14,058 $ 0 $ 131,475

	*Three Months Ended March 31,*
	*2021*		*2020*
Customer A	$	57,680	$	38,908
Customer B	$	33,239	$	104,354
Customer C	$	36,599	$	35,683
Customer D	$	44,236		*

~~(A)~~

~~For the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~ ~~and~~ ~~2019~~~~, the PAMC segment 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,

2020

2019

2020

2019

Customer A
$ 45,818 $ 49,772 $ 94,647 $ 180,014
Customer C
$ 36,888 $ 63,526 $ 86,631 $ 158,903
Customer B
* $ 95,953 $ 141,993 $ 358,882

* Revenues from this customer during the three months ended ~~September 30,~~March 31, 2020 were less than 10% of the Company's total sales.

2524

Table of Contents

Reconciliation of Segment Information to Consolidated Amounts:

~~Total Assets:~~

	*Three Months Ended March 31,*
	*2021*			*2020*
Earnings Before Income Tax	$	31,589		$	4,383
Interest Expense, net		15,261			15,671
Gain on Debt Extinguishment		(683	)		(16,833	)
Interest Income		(858	)		(244	)
Depreciation, Depletion and Amortization		59,897			54,943
Stock/Unit-Based Compensation		1,509			5,014
Adjusted EBITDA	$	106,715		$	62,934

September 30,

2020

2019

Segment Assets for Total Reportable Business Segments
$ 1,878,350 $ 2,014,381
Segment Assets for All Other Business Segments
542,189 512,738
Items Excluded from Segment Assets:

Cash and Other Investments
32,660 104,344
Deferred Tax Assets
101,639 91,772
Total Consolidated Assets
$ 2,554,838 $ 2,723,235

NOTE 17—~~ADDITIONAL~~ ~~INFORMATION WITH RESPECT TO UNRESTRICTED SUBSIDIARIES:~~

Under the terms of the Indenture and Senior Secured Credit Facilities, CONSOL Energy has designated certain of its subsidiaries as “Unrestricted Subsidiaries”. The current Unrestricted Subsidiaries are the Partnership and its subsidiaries and the SPV. CONSOL Energy is required under the terms of the Indenture and the Senior Secured Credit Facilities to present additional information that reflects the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Company's Unrestricted Subsidiaries for the periods presented. This additional information is below.

~~Income Statement for the Three Months Ended~~ ~~September 30, 2020~~ ~~(unaudited):~~

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

Revenue and Other Income:

Coal Revenue
$ 138,359 $ 46,016 $ 184,375
Terminal Revenue
17,008 0 17,008
Freight Revenue
9,682 3,227 12,909
Miscellaneous Other Income
11,454 9,547 21,001
Gain on Sale of Assets
7,867 59 7,926
Total Revenue and Other Income
184,370 58,849 243,219
Costs and Expenses:

Operating and Other Costs
118,857 34,174 153,031
Depreciation, Depletion and Amortization
33,070 21,889 54,959
Freight Expense
9,682 3,227 12,909
Selling, General and Administrative Costs
8,238 2,879 11,117
Gain on Debt Extinguishment (1,078 ) 0 (1,078 )
Interest Expense, net
13,203 2,520 15,723
Total Costs and Expenses
181,972 64,689 246,661
Earnings (Loss) Before Income Tax
2,398 (5,840 ) (3,442 )
Income Tax Expense
5,918 0 5,918
Net Loss
(3,520 ) (5,840 ) (9,360 )
Less: Net Loss Attributable to Noncontrolling Interest
(2,136 ) 0 (2,136 )
Net Loss Attributable to CONSOL Energy Inc. Shareholders
$ (1,384 ) $ (5,840 ) $ (7,224 )

~~Table of Contents~~

Balance Sheet at September 30, 2020 (unaudited):

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

ASSETS

Current Assets:

Cash and Cash Equivalents
$ 21,636 $ 648 $ 22,284
Accounts and Notes Receivable

Trade Receivables, net
0 120,548 120,548
Other Receivables, net
23,786 962 24,748
Inventories
43,399 13,178 56,577
Prepaid Expenses and Other Assets
23,053 4,086 27,139
Total Current Assets
111,874 139,422 251,296
Property, Plant and Equipment:

Property, Plant and Equipment
4,109,220 1,017,483 5,126,703
Less-Accumulated Depreciation, Depletion and Amortization
2,437,152 606,311 3,043,463
Total Property, Plant and Equipment - Net
1,672,068 411,172 2,083,240
Other Assets:

Deferred Income Taxes
101,639 0 101,639
Right of Use Asset - Operating Leases
45,936 12,170 58,106
Other, net
57,920 2,637 60,557
Total Other Assets
205,495 14,807 220,302
TOTAL ASSETS
$ 1,989,437 $ 565,401 $ 2,554,838
LIABILITIES AND EQUITY

Current Liabilities:

Accounts Payable
$ 51,277 $ 20,986 $ 72,263
Accounts (Recoverable) Payable - Related Parties
(8,035 ) 8,035 0
Current Portion of Long-Term Debt
59,703 9,251 68,954
Other Accrued Liabilities
209,132 38,263 247,395
Total Current Liabilities
312,077 76,535 388,612
Long-Term Debt:

Long-Term Debt, Related Party (174,685 ) 174,685 0
Long-Term Debt
587,020 0 587,020
Finance Lease Obligations
15,948 5,198 21,146
Total Long-Term Debt
428,283 179,883 608,166
Deferred Credits and Other Liabilities:

Postretirement Benefits Other Than Pensions
421,705 0 421,705
Pneumoconiosis Benefits
194,312 6,754 201,066
Asset Retirement Obligations
218,031 11,315 229,346
Workers' Compensation
57,527 3,998 61,525
Salary Retirement
33,454 0 33,454
Operating Lease Liability
33,445 8,178 41,623
Other
15,726 887 16,613
Total Deferred Credits and Other Liabilities
974,200 31,132 1,005,332
TOTAL LIABILITIES
1,714,560 287,550 2,002,110
Total CONSOL Energy Inc. Stockholders’ Equity
148,228 277,851 426,079
Noncontrolling Interest
126,649 0 126,649
TOTAL LIABILITIES AND EQUITY
$ 1,989,437 $ 565,401 $ 2,554,838

~~Table of Contents~~

~~Income Statement for the Three Months Ended~~ ~~September 30, 2019~~ ~~(unaudited):~~

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

Revenue and Other Income:

Coal Revenue
$ 226,157 $ 75,385 $ 301,542
Terminal Revenue
16,303 0 16,303
Freight Revenue
2,699 900 3,599
Miscellaneous Other Income
391 10,797 11,188
Gain on Sale of Assets
714 0 714
Total Revenue and Other Income
246,264 87,082 333,346
Costs and Expenses:

Operating and Other Costs
180,487 54,362 234,849
Depreciation, Depletion and Amortization
43,284 11,086 54,370
Freight Expense
2,699 900 3,599
Selling, General and Administrative Costs
11,850 2,840 14,690
Loss on Debt Extinguishment
801 0 801
Interest Expense, net
14,011 1,587 15,598
Total Costs and Expenses
253,132 70,775 323,907
(Loss) Earnings Before Income Tax
(6,868 ) 16,307 9,439
Income Tax Expense
2,415 0 2,415
Net (Loss) Income
(9,283 ) 16,307 7,024
Less: Net Income Attributable to Noncontrolling Interest
2,684 0 2,684
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$ (11,967 ) $ 16,307 $ 4,340

~~Table of Contents~~

Balance Sheet at December 31, 2019:

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

ASSETS

Current Assets:

Cash and Cash Equivalents
$ 79,717 $ 576 $ 80,293
Accounts and Notes Receivable

Trade Receivables, net
0 131,688 131,688
Other Receivables, net
39,412 1,572 40,984
Inventories
41,478 12,653 54,131
Prepaid Expenses and Other Assets
25,181 5,752 30,933
Total Current Assets
185,788 152,241 338,029
Property, Plant and Equipment:

Property, Plant and Equipment
4,023,282 984,898 5,008,180
Less-Accumulated Depreciation, Depletion and Amortization
2,344,777 571,238 2,916,015
Total Property, Plant and Equipment - Net
1,678,505 413,660 2,092,165
Other Assets:

Deferred Income Taxes
103,505 0 103,505
Right of Use Asset - Operating Leases
56,937 15,695 72,632
Other, net
74,015 13,456 87,471
Total Other Assets
234,457 29,151 263,608
TOTAL ASSETS
$ 2,098,750 $ 595,052 $ 2,693,802
LIABILITIES AND EQUITY

Current Liabilities:

Accounts Payable
$ 79,140 $ 27,083 $ 106,223
Accounts (Recoverable) Payable - Related Parties
(1,419 ) 1,419 0
Current Portion of Long-Term Debt
45,020 5,252 50,272
Other Accrued Liabilities
196,314 39,455 235,769
Total Current Liabilities
319,055 73,209 392,264
Long-Term Debt:

Long-Term Debt, Related Party (148,156 ) 148,156 0
Long-Term Debt
653,802 0 653,802
Finance Lease Obligations
7,391 1,645 9,036
Total Long-Term Debt
513,037 149,801 662,838
Deferred Credits and Other Liabilities:

Postretirement Benefits Other Than Pensions
432,496 0 432,496
Pneumoconiosis Benefits
196,114 6,028 202,142
Asset Retirement Obligations
239,410 10,801 250,211
Workers' Compensation
57,583 3,611 61,194
Salary Retirement
49,930 0 49,930
Operating Lease Liability
43,906 11,507 55,413
Other
14,134 785 14,919
Total Deferred Credits and Other Liabilities
1,033,573 32,732 1,066,305
TOTAL LIABILITIES
1,865,665 255,742 2,121,407
Total CONSOL Energy Inc. Stockholders’ Equity
95,889 339,310 435,199
Noncontrolling Interest
137,196 0 137,196
TOTAL LIABILITIES AND EQUITY
$ 2,098,750 $ 595,052 $ 2,693,802

~~Table of Contents~~

~~Income Statement for the Nine Months Ended~~ ~~September 30, 2020~~ ~~(unaudited):~~

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

Revenue and Other Income:

Coal Revenue
$ 406,754 $ 135,386 $ 542,140
Terminal Revenue
49,407 0 49,407
Freight Revenue
14,356 4,785 19,141
Miscellaneous Other Income
32,119 38,988 71,107
Gain on Sale of Assets
15,182 59 15,241
Total Revenue and Other Income
517,818 179,218 697,036
Costs and Expenses:

Operating and Other Costs
373,774 107,938 481,712
Depreciation, Depletion and Amortization
110,720 45,337 156,057
Freight Expense
14,356 4,785 19,141
Selling, General and Administrative Costs
30,441 9,285 39,726
Gain on Debt Extinguishment
(17,911 ) 0 (17,911 )
Interest Expense, net
39,187 6,929 46,116
Total Costs and Expenses
550,567 174,274 724,841
(Loss) Earnings Before Income Tax
(32,749 ) 4,944 (27,805 )
Income Tax Expense
143 0 143
Net (Loss) Income
(32,892 ) 4,944 (27,948 )
Less: Net Loss Attributable to Noncontrolling Interest
(5,108 ) 0 (5,108 )
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$ (27,784 ) $ 4,944 $ (22,840 )

~~Income Statement for the Nine Months Ended~~ ~~September 30, 2019~~ ~~(unaudited):~~

Company and

Restricted

Unrestricted

Subsidiaries

Subsidiaries

Consolidated

Revenue and Other Income:

Coal Revenue
$ 738,499 $ 246,166 $ 984,665
Terminal Revenue
50,829 0 50,829
Freight Revenue
10,586 3,529 14,115
Miscellaneous Other Income
4,528 32,146 36,674
Gain (Loss) on Sale of Assets
1,991 (5 ) 1,986
Total Revenue and Other Income
806,433 281,836 1,088,269
Costs and Expenses:

Operating and Other Costs
552,671 165,739 718,410
Depreciation, Depletion and Amortization
117,606 33,639 151,245
Freight Expense
10,586 3,529 14,115
Selling, General and Administrative Costs
42,548 10,353 52,901
Loss on Debt Extinguishment
25,444 0 25,444
Interest Expense, net
45,745 4,495 50,240
Total Costs and Expenses
794,600 217,755 1,012,355
Earnings Before Income Tax
11,833 64,081 75,914
Income Tax Benefit
(243 ) 0 (243 )
Net Income
12,076 64,081 76,157
Less: Net Income Attributable to Noncontrolling Interest
14,102 0 14,102
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders
$ (2,026 ) $ 64,081 $ 62,055

~~Table of Contents~~

~~NOTE~~ ~~18—~~RELATED PARTY TRANSACTIONS:

~~Transactions with the Company's Former Parent (~~~~2017~~)

~~Transition Services Agreements~~

The Company entered into a transition services agreement (“TSA”) and certain other agreements in connection with the separation and distribution agreement with its former parent to cover certain continued corporate services provided by the Company and its former parent to each other following the completion of the separation and distribution. In connection with the separation and distribution, the Company began to set up its own corporate functions, and pursuant to the TSA, the Company's former parent provided various corporate support services, including certain accounting, human resources, information technology, office and building, risk, security, tax and treasury, building security and tax services, as well as certain regulatory compliance services required during the period in which the Company remained a majority-owned subsidiary of its former parent. The TSA expired in ~~February 2019.~~ ~~The charges associated with these services were~~ ~~not~~ ~~material during the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~~~, and were consistent with expenses that the Company's former parent had historically allocated or incurred with respect to such services.~~

~~Former Parent Receivables and Payables~~

~~The Company had a receivable from its former parent of $6,791 at~~ ~~December 31, 2019~~~~, which was recorded in Other Receivables on the Consolidated Balance Sheets. The balance of this receivable was collected during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~~~. This receivable relates to reimbursements per the terms of the separation and distribution agreement.~~

CONSOL Coal Resources LP

On December 30, 2020, CONSOL Energy completed the acquisition of all of the outstanding common units of CONSOL Coal Resources, and CONSOL Coal Resources became the Company's indirect wholly-owned subsidiary (see Note 2 - Major Transactions). In connection with the closing of the CCR Merger, CONSOL Energy issued 7,967,690 shares of its common stock to acquire the 10,912,138 common units of CCR held by third-party CCR investors at a fixed exchange ratio of 0.73 shares of CEIX common stock for each CCR unit, for total implied consideration of $51,710.

Prior to the CCR Merger, CONSOL Energy, certain of its subsidiaries and the Partnership ~~are~~were party to various agreements, including an Omnibus Agreement dated September 30, 2016, as amended on November 28, 2017, (~~the “Omnibus Agreement”).~~and an Affiliated Company Credit Agreement. Under the Omnibus Agreement, CONSOL Energy ~~provides~~provided the Partnership with certain services in exchange for payments by the Partnership for those services.

On ~~November 28, 2017,~~ ~~the Company entered into an Affiliated Company Credit Agreement with the Partnership and certain of its subsidiaries (the “Partnership Credit Parties”), as amended on~~ ~~June 5, 2020 (~~as amended, the “Affiliated Company Credit Agreement”), under which the Company provides as lender a revolving credit facility in an aggregate principal amount of up to $275 million to the Partnership Credit Parties. In connection with the ~~completion~~closing of the separation, the Partnership drew an initial $201 million, the net proceeds of which were used to repay outstanding amounts under CCR's $400 million senior secured revolving credit facility with certain lenders and PNC Bank, National Association, as administrative agent (the “Original CCR ~~Credit Facility”), to provide working capital for the Partnership following the separation and for other general corporate purposes. The Original CCR Credit Facility was then terminated.~~

On ~~June 5, 2020,~~ ~~the Company amended~~Merger, the Affiliated Company Credit Agreement ~~to provide~~ ~~eight~~ ~~quarters~~was terminated, all obligations and guarantees thereunder repaid and discharged and all liens granted in connection therewith released. In connection with the termination of ~~financial covenant relaxation, effected a 50 basis points increase in the rate at which borrowings under~~ the Affiliated Company Credit Agreement ~~bear interest,~~ and ~~added additional conditions to be met~~in exchange for, ~~the covenants relating to general investments, investments~~and in ~~unrestricted subsidiaries, and distributions to equity holders~~satisfaction of, ~~the Partnership. The Affiliated Company Credit Agreement has a maturity date of~~ ~~December 28, 2024.~~ ~~Interest accrues at a rate ranging from 4.25% to 5.25%, subject to the Partnership's net leverage ratio. For the~~ ~~three~~ ~~months ended~~ ~~September 30, 2020~~ ~~and~~ ~~2019~~~~, $2,428 and $2,003 of interest was incurred under the Affiliated Company Credit Agreement, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~ ~~and~~ ~~2019~~, $6,705 and $5,770 of interest was incurred under the Affiliated Company Credit Agreement, respectively. The collateral obligations under the Affiliated Company Credit Agreement generally mirror the Original CCR Credit Facility, as does the list of entities that will act as guarantors thereunder. The Affiliated Company Credit Agreement is subject to financial covenants relating to a maximum ~~first~~ lien gross leverage ratio and a maximum total net leverage ratio, which will be calculated on a consolidated basis for the Partnership and its restricted subsidiaries at the end of each fiscal quarter. The Partnership was in compliance with each of these financial covenants at ~~September 30, 2020~~. The Affiliated Company Credit Agreement also contains a number of customary affirmative covenants and negative covenants, including limitations on the ability of the Partnership to incur additional indebtedness, grant liens, and make investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness (subject to certain limited exceptions).

~~CCR is a party to a number of other agreements with CONSOL Energy, or its subsidiaries, that are described in detail in the section titled “Agreements with Affiliates” in Item~~ 13 ~~of CCR’s Form~~ 10~~-K filed on~~ ~~February 14, 2020.~~

In ~~August 2019,~~ ~~upon~~ payment of the ~~cash distribution with respect to the quarter ended~~ ~~June 30, 2019,~~ ~~the financial requirements for the conversion~~outstanding balance of ~~all~~approximately $176,535 thereunder, CCR ~~subordinated units were satisfied. As a result, all 11,611,067 of the CCR subordinated units owned entirely by CONSOL Energy Inc. were converted into~~issued 37,322,410 CCR common units ~~on a~~ ~~one-for-~~~~one~~ ~~basis. The conversion did~~ ~~not~~ ~~impact~~to the ~~amount of the cash distribution paid or the total number of CCR's outstanding units representing limited partner interests.~~Company.

~~See Note~~ 20 ~~- Subsequent Events for a discussion of the CCR Merger.~~

~~Table of Contents~~

Charges for services from the Company to CCR prior to the CCR Merger include the following:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*				Three Months Ended March 31,
	*2020*		*2019*		*2020*		*2019*		2020
Operating and Other Costs	$	1,006	$	838	$	2,715	$	2,368	$	853
Selling, General and Administrative Costs		1,770		1,902		6,427		6,932		2,793
Total Services from CONSOL Energy	$	2,776	$	2,740	$	9,142	$	9,300	$	3,646

Operating and Other Costs ~~include~~included pension service costs and insurance expenses. Selling, General and Administrative Costs ~~include~~included charges for incentive compensation, an annual administrative support fee and reimbursement for the provision of certain management and operating services provided by the Company.

~~September 30, 2020~~25 ~~and~~ ~~December 31, 2019~~, CCR had a net payable to the Company in the amount of $8,035 and $1,419, respectively. This payable includes reimbursements for business expenses, executive fees, stock-based compensation and other items under the Omnibus Agreement.

In ~~May 2019,~~ ~~CONSOL Energy Inc.'s Board of Directors approved an expansion of the stock, unit and debt repurchase program (see Note~~ 19 ~~- Stock, Unit and Debt Repurchases). The program expansion allows the Company to use up to $50 million of the program to purchase CCR's outstanding common units in the open market.~~ ~~None~~ ~~of the Partnership's common units were purchased under this program during the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~~~. During the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~~~, 19,413 and 26,297 of the Partnership's common units were purchased under this program at an average price of $12.88 and $14.05 per unit, respectively.~~

NOTE ~~19—~~18—STOCK ~~UNIT~~ AND DEBT REPURCHASES:

In December 2017, CONSOL Energy’s Board of Directors approved a program to repurchase, from time to time, the ~~Company’s~~Company's outstanding shares of common stock or its 11.00% Senior Secured Second Lien Notes due ~~2025,~~2025. ~~in an aggregate amount of up to $50 million through~~Since its inception, the ~~period ending~~ ~~June 30, 2019.~~ ~~The program was subsequently amended by CONSOL Energy’s Board of Directors in~~ ~~July 2018~~ ~~to allow up to $100 million of repurchases of the Company’s common stock or its 11.00% Senior Secured Second Lien Notes due~~ ~~2025,~~ subject to certain limitations in the Company’s current credit agreement and the TMA. The Company’s Board of Directors also authorized the Company to use up to $25 million of the program to purchase CONSOL Coal Resources LP’s outstanding common units in the open market. In ~~May 2019,~~ ~~CONSOL Energy's Board of Directors approved an expansion of the program in the amount of $75 million, bringing the aggregate limit of the program to $175 million. The~~ ~~May 2019~~ expansion also increased the aggregate limit of the amount of CCR's common units that can be purchased under the program to $50 million, which is consistent with the Company's credit facility covenants that prohibit the Company from using more than ~~$50~~ ~~million for the purchase of CCR's outstanding common units. The~~ Company's Board of Directors ~~also approved extending the termination date of~~has subsequently amended the program ~~from~~ ~~June 30, 2019~~ to ~~June 30, 2020.~~ In ~~July 2019,~~ ~~CONSOL Energy's Board~~several times, the most recent of ~~Directors~~which approved ~~an expansion of the program in the amount of $25~~a $270 million ~~bringing the aggregate limit of the Company's~~ stock ~~unit~~ and debt repurchase program, ~~to $200 million. In~~ ~~May 2020,~~ CONSOL Energy's Board of Directors approved an expansion of the program in the amount of $70 million, bringing the aggregate limit of the Company's stock, unit and debt repurchase program to $270 million. The Company's Board of Directors also approved extending the termination date of the program from ~~June 30, 2020~~ towhich terminates on June 30, 2022.

Under the terms of the program, CONSOL Energy is permitted to make repurchases in the open market, in privately negotiated transactions, accelerated repurchase programs or in structured share repurchase programs. CONSOL Energy is also authorized to enter into one or more 10b5-1 plans with respect to any of the repurchases. Any repurchases of common stock ~~notes~~ or ~~units~~notes are to be funded from available cash on hand or short-term borrowings. The program does not obligate CONSOL Energy to acquire any particular amount of its common stock ~~notes~~ or ~~units,~~notes, and can be modified or suspended at any time at the Company’s discretion. The program is conducted in compliance with applicable legal requirements and within the limits imposed by any credit agreement, receivables purchase agreement, indenture, or the TMA, and is subject to market conditions and other factors.

During the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019,~~2020, the Company ~~repurchased approximately $45,176~~spent $9,338 to retire $10,190 and ~~$35,048~~spent $25,480 to retire $43,176 of its 11.00% Senior Secured Second Lien Notes due 2025, respectively. NaN common shares were repurchased ~~and 0 common Partnership units were purchased~~ under this program during the ~~nine~~three months ended ~~September 30,~~ March 31, 2021 and 2020. ~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2019~~, the Company repurchased and retired 1,717,497 shares of the Company's common stock at an average price of $19.06 per share and 26,297 of the Partnership's common units were purchased at an average price of $14.05 per unit.

NOTE ~~20—~~19—Subsequent Events :

On ~~October 23, 2020,~~April 13, 2021, tax-exempt solid waste disposal revenue bonds in the amount of $75 million were issued through the Pennsylvania Economic Development Financing Authority (PEDFA). The bonds will have a 30-year maturity and were priced in an initial 7-year term rate period with an interest rate of 9.0 percent. The proceeds will be used to finance the already ongoing expansion of the coal refuse disposal areas at the Company's Bailey Preparation Plant in Graysville, PA, which will support current and future mining at the PAMC.

On April 28, 2021, CONSOL Energy ~~together with CCR, announced they have entered into a definitive merger agreement pursuant to which CONSOL Energy will acquire all~~Inc.'s Board of Directors approved an expansion of the ~~outstanding CCR common units other than any CCR common units currently owned by CONSOL Energy~~stock and ~~its subsidiaries (each, a “Public Common Unit”) in an all-stock transaction valued at approximately $34.4 million. On the closing~~debt repurchase program. The aggregate amount of the ~~transactions contemplated under~~program's expansion is $50 million, bringing the ~~Merger Agreement, the Company will acquire all~~total amount of the ~~approximately 10.9 million outstanding Public Common Units at a fixed exchange ratio~~Company's stock and debt repurchase program to $320 million. The Company's Board of ~~0.73 shares of CONSOL Energy common stock for each Public Common Unit. This exchange ratio represents a 2.1% premium to~~Directors also approved extending the ~~volume weighted average exchange ratio during the~~ 20 ~~trading days ended~~ ~~October 22, 2020.~~ ~~In aggregate, CONSOL Energy will issue approximately 8.0 million shares in connection with the proposed transaction, representing approximately 22.2%~~termination date of the ~~total CONSOL Energy shares that will be outstanding on a pro forma basis after completion~~program from June 30, 2022 to December 31, 2022. The program's available capacity as of ~~the CCR Merger.~~

The transaction terms were negotiated, reviewed and approved by the conflicts committee of the board of directors of CCR’s general partner and the board of directors of CCR’s general partner. The CCR conflicts committee May 4, 2021 is composed of the independent members of the board of directors of CCR’s general partner. CONSOL Energy’s board of directors also approved the Merger Agreement and the transactions contemplated thereby, including the CCR Merger and the issuance of CONSOL Energy common stock as the merger consideration, and has resolved to submit the approval of the issuance of the CONSOL Energy common stock in connection with the proposed transactions to a vote of the holders of CONSOL Energy common stock.

~~Subject to customary approvals and conditions, the transaction is expected to close in the~~ ~~first~~ ~~quarter of~~ ~~2021.~~ The transaction is subject to the approval by the holders of at least a majority of the outstanding CCR common units, approval by a majority of the votes cast by CONSOL Energy’s stockholders and the effectiveness of a registration statement related to the issuance of the new CONSOL Energy shares to CCR’s common unitholders. Pursuant to a support agreement entered into in connection with the transaction, CONSOL Energy has agreed to vote all of the CCR common units that it owns in favor of the proposed transaction. CONSOL Energy currently owns approximately ~~60.7% of the outstanding CCR common units.~~

~~In connection with the closing of the transaction, CCR’s common units will cease to be publicly traded and the incentive distribution rights in CCR will be eliminated.~~$132 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in conjunction with the Consolidated Financial Statements and corresponding notes included elsewhere in this Form 10-Q. In addition, this Form 10-Q report should be read in conjunction with the Consolidated Financial Statements for the three-year period ended December 31, ~~2019~~2020 included in CONSOL Energy Inc.'s Form 10-K, filed on February ~~14, 2020.~~12, 2021. This MD&A contains forward-looking statements and the matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those projected or implied in the forward-looking statements. Please see “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

All amounts discussed are in millions of U.S. dollars, unless otherwise indicated.

~~CCR Merger~~

As previously disclosed, on October 22, 2020, CONSOL Energy, the Partnership, the General Partner, a wholly-owned subsidiary of CONSOL Energy and one of its wholly-owned subsidiaries (“Merger Sub”) entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into the Partnership, with the Partnership surviving as our indirect, wholly-owned subsidiary (the “CCR Merger”). Under the terms of the Merger Agreement, at the effective time of the CCR Merger, (i) each outstanding CCR common unit other than common units owned by CONSOL Energy and its subsidiaries will be converted into the right to receive, subject to adjustment as described in the Merger Agreement, 0.73 shares of CONSOL Energy Inc. common stock (the “Merger Consideration”); and (ii) each of the outstanding phantom units and any other awards relating to a common unit issued under a Partnership equity incentive plan, whether vested or not vested, will become fully vested and will be automatically converted into the right to receive, with respect to each common unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). Except for the Partnership's incentive distribution rights, which will be automatically canceled immediately prior to the effective time of the CCR Merger for no consideration, the common units owned by CONSOL Energy and its subsidiaries immediately prior to the effective time of the CCR Merger will remain outstanding as limited partner interests in the surviving entity.

In aggregate, CONSOL Energy will issue approximately 8.0 million shares of its common stock as Merger Consideration, representing approximately 22.2% of the total CONSOL Energy shares that will be outstanding on a pro forma basis.

Subject to customary approvals and conditions, the transaction is expected to close in the first quarter of 2021. The transaction is subject to approval by our stockholders, majority approval by the CCR common unitholders and the effectiveness of a registration statement related to the issuance of the new CONSOL Energy shares to CCR's common unitholders. Pursuant to a support agreement entered into in connection with the transaction, CONSOL Energy agreed to vote all of the common units it owns in favor of the transaction. CONSOL Energy currently owns approximately 60.7% of CCR's outstanding common units.

COVID-19 Update

The Company is monitoring the impact of the COVID-19 pandemic (“COVID-19”) and has taken, and will continue to take, steps to mitigate the potential risks and impact on the Company and its employees. The health and safety of our employees is paramount. In response to two employees testing positive for COVID-19, the Company temporarily curtailed production at the Bailey Mine for two weeks at the end of ~~March.~~March 2020. To date, ~~several employees have tested positive for COVID-19. However,~~ the Company has ~~not~~ experienced a few localized ~~outbreak, which we believe is attributable,~~outbreaks, but due, in part, to the health and safety procedures put in place by the ~~Company. This has also allowed the~~ Company, we have been able to continue operating without production ~~curtailment due to positive employee cases.~~curtailment. The Company continues to monitor the health and safety of its employees closely in order to limit potential risks to our employees, contractors, family members and the community.

We are considered a critical infrastructure company by the U.S. Department of Homeland Security. As a result, we were exempt from Pennsylvania Governor Tom Wolf's executive order, issued in March 2020, closing all businesses that are not life sustaining until Pennsylvania's phased reopening, which began in the second quarter of 2020. ~~The~~COVID-19 led to an unprecedented decline in coal demand that began in the first quarter of 2020 hit its lowest point in May 2020 and has improved through the ~~third quarter. In response to the decline in demand for our coal as a result~~first quarter of COVID-19, we idled four of our five longwalls for periods of time beginning in the second quarter. As demand improved, we restarted longwalls and ultimately ran four of the five longwalls for the majority of the third quarter. This decline in coal demand has negatively impacted our operational, sales and financial performances year-to-date and we expect that this negative impact will continue as the pandemic continues.2021.

While some government-imposed shut-downs of non-essential businesses in the United States and abroad have been phased out, there is a possibility that such shut-downs may be reinstated after being lifted ifas COVID-19 ~~experiences a resurgence. We expect that depressed domestic and international demand for our coal will continue for so long as there are widespread, government-imposed shut-downs of business activity.~~continues to spread. Depressed demand for our coal may also result from a general recession or reduction in overall business activity caused by COVID-19. Additionally, some of our customers have already attempted, and may in the future attempt, to invoke force majeure or similar provisions in the contracts they have in place with us in order to avoid taking possession of and paying us for our coal that they are contractually obligated to purchase. ~~Sustained~~A decrease in demand for our coal and the failure of our customers to purchase coal from us that they are obligated to purchase pursuant to existing contracts would have a material adverse effect on our results of operations and financial condition. The extent to which COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the outbreak, the pace and effectiveness of vaccination efforts and the effectiveness of actions globally to contain or mitigate its effects. We expect this ~~will~~could continue to negatively impact our results of operations, cash flows and financial condition. The Company will continue to take steps it believes are appropriate to mitigate the impacts of COVID-19 on its operations, liquidity and financial condition.

Our Business

We are a leading, low-cost producer of high-quality bituminous coal, focused on the extraction and preparation of coal in the Appalachian Basin due to our ability to efficiently produce and deliver large volumes of high-quality coal at competitive prices, the strategic location of our mines and the industry experience of our management team.

Coal from the PAMC is valued because of its high energy content (as measured in Btu per pound), relatively low levels of sulfur and other impurities, and strong thermoplastic properties that enable it to be used in metallurgical as well as thermal applications. We take advantage of these desirable quality characteristics and our extensive logistical network, which is directly served by both the Norfolk Southern and CSX railroads, to aggressively market our product to a broad base of strategically selected, top-performing power plant customers in the eastern United States. We also capitalize on the operational synergies afforded by the CONSOL Marine Terminal to export our coal to ~~thermal~~industrial, power generation and metallurgical end-users ~~in Europe, Asia, South America, and Africa, as well as Canada.~~globally.

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Our operations, including the PAMC and the CONSOL Marine Terminal, have consistently generated strong cash ~~flows.~~flows, even through the COVID-19 pandemic. As of December 31, ~~2019,~~2020, the PAMC controls ~~669.4~~657.9 million tons of high-quality Pittsburgh seam reserves, enough to allow for ~~approximately 23.5~~more than 20 years of full-capacity production. In addition, we own or control approximately 1.5 billion tons of Greenfield Reserves located in the Northern Appalachian (“NAPP”), the Central Appalachian (“CAPP”) and the Illinois Basins (“ILB”), which we believe provide future growth and monetization opportunities. Our vision is to maximize cash flow generation through the safe, compliant, and efficient operation of this core asset base, while strategically reducing debt, returning capital through share buybacks or dividends, and, when prudent, allocating capital toward compelling growth and diversification opportunities.

Our core businesses consist of our:

•

Pennsylvania Mining Complex: The PAMC, which includes the Bailey Mine, the Enlow Fork Mine, the Harvey Mine and the Central Preparation Plant, has extensive high-quality coal reserves. We mine our reserves from the Pittsburgh No. 8 Coal Seam, which is a large contiguous formation of high-Btu coal that is ideal for high productivity, low-cost longwall operations. The design of the PAMC is optimized to produce large quantities of coal on a cost-efficient basis. We ~~are able to~~can sustain high production volumes at comparatively low operating costs due to, among other things, our technologically advanced longwall mining systems, logistics infrastructure and safety. All ofour mines at the PAMC ~~mines~~ utilize longwall mining, which is a highly automated underground mining technique that produces large volumes of coal at lower costs compared to other underground mining methods. ~~We own a 75% undivided interest in the PAMC, and the remaining 25% is owned by CCR, as discussed below.~~

•

CCR Ownership: CONSOL Energy owns, directly or indirectly, through CCR's general partner, 61.4% of the partnership, which is comprised of a 1.7% general partner interest and a 59.7% limited partner interest. At September 30, 2020, CCR's assets included a 25% undivided interest in, and full operational control over, the PAMC. See Note 20 - Subsequent Events.

•

CONSOL Marine Terminal: Through our subsidiary CONSOL Marine Terminals LLC, we provide coal export terminal services through the Port of Baltimore. The terminal can either store coal or load coal directly into vessels from rail cars. It is also the only major east coast United States coal terminal served by two railroads, Norfolk Southern Corporation and CSX Transportation Inc.

•

Itmann Mine: Construction of the Itmann Mine, located in Wyoming County, West Virginia, began in the second half of ~~2019 and~~2019; development mining began in April ~~2020. Full~~2020, and full production ~~from the mine~~ is expected upon the completion of a new preparation ~~plant, and the pace of construction is dependent upon conditions in the coal sales market.~~plant. When fully operational, the Company anticipates approximately 900 thousand tons per year of high-quality, low-vol coking coal capacity.

•

~~Greenfield Reserves: We own approximately 1.5 billion tons of high-quality, undeveloped coal reserves located in NAPP, CAPP and the ILB.~~

These low-cost assets and the diverse markets they serve provide us opportunities to generate cash across a wide variety of demand and pricing scenarios. The three mines at the PAMC, which include the Bailey, Enlow Fork and Harvey mines, produce coal from the Pittsburgh No. 8 Coal Seam using longwall mining, a highly automated underground mining technique that produces large volumes of coal at lower costs compared to alternative mining methods. These three mines ~~collectively~~typically operate four to five longwalls, and the production from all three mines is processed at a single, centralized preparation plant, which is connected via conveyor belts to each mine. The Central Preparation Plant, which can clean and process up to 8,200 raw tons of coal per hour, provides economies of scale while also maintaining the ability to segregate and blend coal based on quality. This infrastructure enables us to tailor our production levels and quality specifications to meet market demands. It also results in a highly productive, low-cost operation as compared to other NAPP coal mines. ~~In 2019,~~The PAMC is the ~~PAMC operated three of the top four~~ most productive ~~longwall mines~~and efficient coal mining complex in NAPP. For the year ending December 31, ~~2019,~~2020, productivity averaged ~~7.10~~7.21 tons of coal per employee hour, compared with an average of ~~5.28~~4.90 tons per employee hour for all other currently-operating NAPP longwalls. Our high productivity helps drive a low-cost structure. Our efficiency strengthens our margins throughout the commodity cycle and has allowed us to continue to generate positive margins even in challenging pricing environments.

Coal from the PAMC is versatile in that it can be sold either domestically or abroad, in ~~the thermal coal market~~industrial applications and power generation or as a crossover product in the high-volatile metallurgical coal market. ~~We have a well-established and diverse customer base, comprised primarily of domestic electric-power-producing companies located in the eastern United States.~~ During the ~~third~~first quarter of ~~2020,~~2021, we were successful in securing additional coal sales contracts, bringing our contracted position to ~~13.2~~20.5 million tons for ~~2021. We remain fully contracted~~2021 and 5.6 million tons for 2020 and expect to ship all that we produce in the fourth quarter of 2020. However, we face significant uncertainties given the ongoing economic slowdown due to the COVID-19 pandemic-related shutdowns. Similar to the first half of 2020, we will continue to collaborate with our customers to manage the contractual obligations we both have, which could result in some additional 2020 contracted volumes being bought out or deferred.2022.

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~~Q3 2020~~Q1 2021 Highlights:

	•	~~Executed multiple transactional opportunities~~Coal shipments improve to ~~improve financial flexibility;~~6.9 million tons, the highest level since the second quarter of 2019.
	•	Net income of $26.4 million.
	•	Adjusted EBITDA of $106.7 million.
	•	~~Resumed~~Total principal repayments and/or repurchases of ~~second lien debt;~~long-term debt of $29.8 million.

Outlook for 2021:

	•	We expect that the PAMC will sell approximately 22 million to 24 million tons.
	•	For 2021 and 2022, our contracted position, as of May 4, 2021 is at 20.5 million tons and 5.6 million tons, respectively.
	•	~~Coal sales volume rebounded to 4.5 million tons compared to 2.3 million tons in the second quarter~~We expect our average cash cost of ~~2020;~~coal sold per ton will be between $27.00 per ton and $29.00 per ton.⁽¹⁾
	•	~~Coal demand recovery is expected~~We are planning to ~~continue into~~make capital expenditures during 2021 in the ~~fourth quarter~~range of ~~2020, with volumes expected~~$100 million to ~~be higher compared to~~$125 million, excluding any spending on the ~~third quarter of 2020;~~

	•	~~No borrowings on revolving credit facility; and~~ Itmann project.
	•	~~Operating protocols in place for COVID-19-related response, focused on enhanced sanitation, social distancing measures~~Increased repurchase authorization to $320 million from $270 million, and ~~mitigating~~extended the ~~risk of spread.~~duration to December 31, 2022.

(1) CONSOL Energy is unable to provide a reconciliation of this guidance to any measures calculated in accordance with GAAP due to the unknown effect, timing and potential significance of certain income statement items.

How We Evaluate Our Operations

Our management team uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability. The metrics include: (i) coal production, sales volumes and average revenue per ton; (ii) cost of coal sold, a non-GAAP financial measure; (iii) cash cost of coal sold, a non-GAAP financial measure; (iv) average margin per ton sold, an operating ratio derived from non-GAAP financial measures; ~~and~~ (v) average cash margin per ton sold, an operating ratio derived from non-GAAP financial ~~measures.~~measures; and (vi) adjusted EBITDA, a non-GAAP financial measure.

Cost of coal sold, cash cost of coal sold, average margin per ton sold and average cash margin per ton sold normalize the volatility contained within comparable GAAP measures by adjusting certain non-operating or non-cash transactions. We believe that adjusted EBITDA provides a helpful measure of comparing our operating performance with the performance of other companies that have different financing, capital structures and tax rates than ours. Each of these non-GAAP metrics are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

•

our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;

•

the ability of our assets to generate sufficient cash flow;

•

our ability to incur and service debt and fund capital expenditures;

•

the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities; and

•

the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.

These non-GAAP financial measures should not be considered an alternative to total costs, total coal revenue, net income, operating cash flow or any other measure of financial performance or liquidity presented in accordance with GAAP. These measures exclude some, but not all, items that affect measures presented in accordance with GAAP, and these measures and the way we calculate them may vary from those of other companies. As a result, the items presented below may not be comparable to similarly titled measures of other companies.

Reconciliation of Non-GAAP Financial Measures

We evaluate our cost of coal sold and cash cost of coal sold on an aggregate basis. We define cost of coal sold as operating and other production costs related to produced tons sold, along with changes in coal inventory, both in volumes and carrying values. The cost of coal sold includes items such as direct operating costs, royalty and production taxes, direct administration costs, and depreciation, depletion and amortization costs on production assets. Our costs exclude any indirect costs, such as selling, general and administrative costs, freight expenses, interest expenses, depreciation, depletion and amortization costs on non-production assets and other costs not directly attributable to the production of coal. The cash cost of coal sold includes cost of coal sold less depreciation, depletion and amortization costs on production assets. The GAAP measure most directly comparable to cost of coal sold and cash cost of coal sold is total costs and expenses.

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The following table presents a reconciliation of cost of coal sold and cash cost of coal sold to total costs and expenses, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands).

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020
Total Costs and Expenses	$	246,661		$	323,907		$	724,841		$	1,012,355		$	310,562		$	286,873
Freight Expense		(12,909	)		(3,599	)		(19,141	)		(14,115	)		(27,013	)		(3,147	)
Selling, General and Administrative Costs		(11,117	)		(14,690	)		(39,726	)		(52,901	)		(23,964	)		(17,670	)
Gain (Loss) on Debt Extinguishment		1,078			(801	)		17,911			(25,444	)
Gain on Debt Extinguishment														683			16,833
Interest Expense, net		(15,723	)		(15,598	)		(46,116	)		(50,240	)		(15,261	)		(15,671	)
Other Costs (Non-Production)		(22,994	)		(22,786	)		(100,707	)		(76,856	)		(18,246	)		(20,882	)
Depreciation, Depletion and Amortization (Non-Production)		(9,327	)		(12,105	)		(35,211	)		(23,111	)		(7,883	)		(9,363	)
Cost of Coal Sold	$	175,669		$	254,328		$	501,851		$	769,688		$	218,878		$	236,973
Depreciation, Depletion and Amortization (Production)		(45,632	)		(42,265	)		(120,846	)		(128,134	)		(52,014	)		(45,580	)
Cash Cost of Coal Sold	$	130,037		$	212,063		$	381,005		$	641,554		$	166,864		$	191,393

We define average margin per ton sold as average revenue per ton sold, net of average cost of coal sold per ton. We define average cash margin per ton sold as average revenue per ton sold, net of average cash cost of coal sold per ton. The GAAP measure most directly comparable to average margin per ton sold and average cash margin per ton sold is total coal revenue.

The following table presents a reconciliation of average margin per ton sold and average cash margin per ton sold to total coal revenue, the most directly comparable GAAP financial measure, on a historical basis, for each of the periods indicated (in thousands, except per ton information).

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020
Total Coal Revenue (PAMC Segment)	$	184,066		$	301,542		$	541,545		$	984,665		$	284,465		$	255,452
Operating and Other Costs		153,031			234,849			481,712			718,410			185,110			212,275
Less: Other Costs (Non-Production)		(22,994	)		(22,786	)		(100,707	)		(76,856	)		(18,246	)		(20,882	)
Total Cash Cost of Coal Sold		130,037			212,063			381,005			641,554			166,864			191,393
Add: Depreciation, Depletion and Amortization		54,959			54,370			156,057			151,245			59,897			54,943
Less: Depreciation, Depletion and Amortization (Non-Production)		(9,327	)		(12,105	)		(35,211	)		(23,111	)		(7,883	)		(9,363	)
Total Cost of Coal Sold	$	175,669		$	254,328		$	501,851		$	769,688		$	218,878		$	236,973
Total Tons Sold (in millions)		4.5			6.5			12.8			20.6			6.9			5.9
Average Revenue per Ton Sold	$	40.55		$	46.59		$	42.35		$	47.84		$	41.39		$	43.16
Average Cash Cost of Coal Sold per Ton		28.64			32.78			29.88			31.16			24.44			32.41
Depreciation, Depletion and Amortization Costs per Ton Sold		10.06			6.51			9.37			6.23			7.41			7.63
Average Cost of Coal Sold per Ton		38.70			39.29			39.25			37.39			31.85			40.04
Average Margin per Ton Sold		1.85			7.30			3.10			10.45			9.54			3.12
Add: Depreciation, Depletion and Amortization Costs per Ton Sold		10.06			6.51			9.37			6.23			7.41			7.63
Average Cash Margin per Ton Sold	$	11.91		$	13.81		$	12.47		$	16.68		$	16.95		$	10.75

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We define adjusted EBITDA as (i) net income (loss) plus income taxes, net interest expense and depreciation, depletion and amortization, as adjusted for (ii) certain non-cash items, such as long-term incentive awards. The GAAP measure most directly comparable to adjusted EBITDA is net income (loss).

	Three Months Ended March 31, 2021
*Dollars in thousands*	PA Mining Complex		CONSOL Marine Terminal		Other			Total Company
Net Income (Loss)	$	42,450	$	9,149	$	(25,195	)	$	26,404

Add: Income Tax Expense		—		—		5,185			5,185
Add: Interest Expense, net		642		1,537		13,082			15,261
Less: Interest Income		—		—		(858	)		(858	)
Earnings (Loss) Before Interest & Taxes (EBIT)		43,092		10,686		(7,786	)		45,992

Add: Depreciation, Depletion & Amortization		54,781		1,214		3,902			59,897

Earnings (Loss) Before Interest, Taxes and DD&A (EBITDA)	$	97,873	$	11,900	$	(3,884	)	$	105,889

Adjustments:
Stock-Based Compensation	$	1,312	$	61	$	136		$	1,509
Gain on Debt Extinguishment		—		—		(683	)		(683	)
Total Pre-tax Adjustments		1,312		61		(547	)		826

Adjusted EBITDA	$	99,185	$	11,961	$	(4,431	)	$	106,715

	Three Months Ended March 31, 2020
*Dollars in thousands*	PA Mining Complex		CONSOL Marine Terminal		Other			Total Company
Net Income (Loss)	$	10,875	$	7,510	$	(15,910	)	$	2,475

Add: Income Tax Expense		—		—		1,908			1,908
Add: Interest Expense, net		—		1,544		14,127			15,671
Less: Interest Income		—		—		(244	)		(244	)
Earnings (Loss) Before Interest & Taxes (EBIT)		10,875		9,054		(119	)		19,810

Add: Depreciation, Depletion & Amortization		48,418		1,257		5,268			54,943

Earnings Before Interest, Taxes and DD&A (EBITDA)	$	59,293	$	10,311	$	5,149		$	74,753

Adjustments:
Stock/Unit-Based Compensation	$	4,286	$	243	$	485		$	5,014
Gain on Debt Extinguishment		—		—		(16,833	)		(16,833	)
Total Pre-tax Adjustments		4,286		243		(16,348	)		(11,819	)

Adjusted EBITDA	$	63,579	$	10,554	$	(11,199	)	$	62,934

Table of Contents

Results of Operations

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared with the Three Months Ended ~~September 30, 2019~~March 31, 2020

Net ~~(Loss)~~ Income Attributable to CONSOL Energy Inc. Shareholders

CONSOL Energy reported ~~a net loss attributable to CONSOL Energy Inc. shareholders of $7 million for the three months ended September 30, 2020, compared to~~ net income attributable to CONSOL Energy Inc. shareholders of $4$26 million for the three months ended ~~September 30, 2019.~~March 31, 2021, compared to $2 million for the three months ended March 31, 2020.

CONSOL ~~Energy~~Energy's business consists of the Pennsylvania Mining Complex and the CONSOL Marine Terminal segments, as well as various corporate and other business activities that are not allocated to the ~~PAMC.~~PAMC or the CONSOL Marine Terminal segments. The other business activities include the ~~CONSOL Marine Terminal,~~ development of the Itmann Mine, the Greenfield Reserves, closed mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated activities.

PAMC ANALYSIS:

The PAMC division's principal activities consist of mining, preparation and marketing of thermal coal, sold primarily to industrial end-users, power ~~generators.~~generators and metallurgical end-users. The division also includes selling, general and administrative costs, as well as various other activities assigned to the PAMC division, but not included in the cost components on a per unit basis.

The PAMC division had ~~a loss~~earnings before income tax of $7$42 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to earnings before income tax of ~~$31~~$11 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Variances are discussed below.

	Three Months Ended								Three Months Ended
	September 30,								March 31,
(in millions)	2020			2019		Variance			2021		2020		Variance
Revenue:
Coal Revenue	$	184		$	302	$	(118	)	$	284	$	255	$	29
Freight Revenue		13			4		9			27		3		24
Gain on Sale of Assets										1		—		1
Miscellaneous Other Income		—			4		(4	)		—		11		(11	)
Total Revenue and Other Income		197			310		(113	)		312		269		43
Cost of Coal Sold:
Operating Costs		130			212		(82	)		167		191		(24	)
Depreciation, Depletion and Amortization		46			42		4			52		46		6
Total Cost of Coal Sold		176			254		(78	)		219		237		(18	)
Other Costs:
Other Costs		2			3		(1	)		1		1		—
Depreciation, Depletion and Amortization		4			4		—			3		3		—
Total Other Costs		6			7		(1	)		4		4		—
Freight Expense		13			4		9			27		3		24
Selling, General and Administrative Costs		9			14		(5	)		19		14		5
Interest Expense, net										1		—		1
Total Costs and Expenses		204			279		(75	)		270		258		12
(Loss) Earnings Before Income Tax	$	(7	)	$	31	$	(38	)
Earnings Before Income Tax									$	42	$	11	$	31

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Coal Production

The table below presents total tons produced (in thousands) from the Pennsylvania Mining Complex for the periods indicated:

	Three Months Ended September 30,							Three Months Ended March 31,
Mine	2020		2019		Variance			2021		2020		Variance
Bailey		1,808		2,782		(974	)		3,779		2,804		975
Enlow Fork		1,436		2,384		(948	)		1,996		2,375		(379	)
Harvey		1,291		1,326		(35	)		1,244		795		449
Total		4,535		6,492		(1,957	)		7,019		5,974		1,045

Coal production was ~~4.5~~7.0 million tons for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~6.5~~6.0 million tons for the three months ended ~~September 30, 2019. The PAMC division's coal~~March 31, 2020. Coal production ~~decreased~~increased at the Bailey and Harvey mines primarily due to improved demand for the Company's coal. This increase was offset, in part, by a ~~reduced operating schedule~~decrease in ~~light of~~coal production at the ~~decline in global demand~~Enlow Fork mine due to ~~the COVID-19 pandemic. For~~operating only one of its two longwalls for the majority of the ~~current~~three months ended March 31, 2021. Overall demand for the Company's coal during the three months ended March 31, 2020 was impacted by the COVID-19 pandemic. However, demand has steadily improved since the low point in the second quarter of 2020. The first quarter of 2021 contained no longwall moves, which allowed the ~~PAMC ran four of its five longwalls.~~Company to match production with demand.

Coal Operations

The PAMC division's coal revenue and cost components on a per unit basis for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ are detailed in the table below. The PAMC division's operations also include various costs such as selling, general and administrative, freight and other costs not included in the unit cost analysis because these costs are not directly associated with coal production.

	Three Months Ended September 30,							Three Months Ended March 31,
	2020		2019		Variance			2021		2020		Variance
Total Tons Sold (in millions)		4.5		6.5		(2.0	)		6.9		5.9		1.0
Average Revenue per Ton Sold	$	40.55	$	46.59	$	(6.04	)	$	41.39	$	43.16	$	(1.77	)

Average Cash Cost of Coal Sold per Ton ⁽¹⁾	$	28.64	$	32.78	$	(4.14	)	$	24.44	$	32.41	$	(7.97	)
Depreciation, Depletion and Amortization Costs per Ton Sold (Non-Cash Cost)		10.06		6.51		3.55			7.41		7.63		(0.22	)
Average Cost of Coal Sold per Ton ⁽¹⁾	$	38.70	$	39.29	$	(0.59	)	$	31.85	$	40.04	$	(8.19	)
Average Margin per Ton Sold ⁽¹⁾	$	1.85	$	7.30	$	(5.45	)	$	9.54	$	3.12	$	6.42
Add: Depreciation, Depletion and Amortization Costs per Ton Sold		10.06		6.51		3.55			7.41		7.63		(0.22	)
Average Cash Margin per Ton Sold ⁽¹⁾	$	11.91	$	13.81	$	(1.90	)	$	16.95	$	10.75	$	6.20

(1) Average cash cost of coal sold per ton and average cost of coal sold per ton are non-GAAP measures, and average margin per ton sold and average cash margin per ton sold are operating ratios derived from non-GAAP measures. See “How We Evaluate Our Operations - Reconciliation of Non-GAAP Financial Measures” for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Coal Revenue

Coal revenue was ~~$184~~$284 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$302~~$255 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Total tons sold ~~decreased~~increased in the period-to-period comparison primarily due to a significant improvement in demand for the Company's coal as a result of ~~lingering effects of the unprecedented contraction in United States and global economic activity due to the COVID-19 pandemic. Additionally, lower~~improved weather, natural gas prices ~~as compared to~~and tightness in the ~~prior year quarter have contributed to electric generation trending toward gas, rather~~supply of NAPP coal. During the three months ended March 31, 2020 a warmer than ~~coal, as a fuel source.~~normal winter followed by the COVID-19 pandemic, and in response, the widespread government-imposed shut-downs significantly reduced electricity consumption and, therefore, demand for the Company's coal.

Freight Revenue and Freight Expense

Freight revenue is the amount billed to customers for transportation costs incurred. This revenue is based on the weight of coal shipped, negotiated freight rates and method of transportation, primarily rail, used by the customers to which the Company contractually provides transportation ~~services.~~services to move its coal from the mine to the ultimate sales point. Freight revenue is completely offset by freight expense. Freight revenue and freight expense were both ~~$13~~$27 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to $4$3 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The $9$24 million increase was due to increased shipments to customers where the Company was contractually obligated to provide transportation services.

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Miscellaneous Other Income

The $4$11 million decrease in miscellaneous other income was ~~primarily due to sales~~the result of ~~externally purchased coal to blend and resell and~~ customer contract buyouts in the three months ended ~~September 30, 2019,~~March 31, 2020, none of which occurred during the three months ended ~~September 30, 2020.~~March 31, 2021.

Cost of Coal Sold

Cost of coal sold is comprised of operating costs related to produced tons sold, along with changes in both the volumes and carrying values of coal inventory. The costs of coal sold include items such as direct operating costs, royalties and production taxes, direct administration costs and depreciation, depletion, and amortization costs on production assets. Total cost of coal sold was ~~$176~~$219 million for the three months ended ~~September 30, 2020,~~March 31, 2021, or ~~$78~~$18 million lower than the ~~$254~~$237 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Average cost of coal sold per ton was ~~$38.70~~$31.85 for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$39.29~~$40.04 for the three months ended ~~September 30, 2019.~~March 31, 2020. The decrease in the total cost of coal sold and the average cost of coal sold per ton was primarily driven by tight cost control measures, no longwall moves in the ~~reduction~~three months ended March 31, 2021 compared to one longwall move during the three months ended March 31, 2020, as well as a significant improvement in the Company's operating leverage, as production ~~volume and reduced operating days, as the Company sought~~volumes increased to match ~~production with demand and limit discretionary spending.~~ demand.

Other Costs

Selling, General, and Administrative Costs

The amount of selling, general and administrative costs related to the PAMC division was $9$19 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to $14 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The $5 million ~~decrease~~increase in the period-to-period comparison was primarily related to ~~several initiatives launched by management~~higher short-term incentive compensation earned in the three months ended March 31, 2021, due to ~~reduce costs, including compensation reductions, curtailment of discretionary expenses and headcount management.~~achieving certain financial metrics, compared to the three months ended March 31, 2020.

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CONSOL MARINE TERMINAL ANALYSIS:

The CONSOL Marine Terminal division provides coal export terminal services through the Port of Baltimore. The division also includes selling, general and administrative activities and interest expense, as well as various other activities assigned to the CONSOL Marine Terminal division.

The CONSOL Marine Terminal division had earnings before income tax of $9 million for the three months ended March 31, 2021, compared to earnings before income tax of $8 million for the three months ended March 31, 2020.

	Three Months Ended March 31,
(in millions)	2021		2020		Variance
Revenue:
Terminal Revenue	$	18	$	17	$	1
Miscellaneous Other Income		1		—		1
Total Revenue and Other Income		19		17		2
Other Costs and Expenses:
Operating and Other Costs		6		5		1
Depreciation, Depletion and Amortization		1		1		—
Selling, General, and Administrative Costs		1		1		—
Interest Expense, net		2		2		—
Total Other Costs and Expenses		10		9		1
Earnings Before Income Tax	$	9	$	8	$	1

Overall earnings before income tax were consistent in the period-to-period comparison.

OTHER ANALYSIS:

The other division includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC ~~division.~~or the CONSOL Marine Terminal divisions. The diversified business activities include the ~~CONSOL Marine Terminal,~~ development of the Itmann Mine, the Greenfield Reserves, closed mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated activities.

Other business activities had ~~earnings~~a loss before income tax of $4$20 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to a loss before income tax of ~~$22~~$15 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Variances are discussed below.

Three Months Ended

September 30,

(in millions)

2020

2019

Variance

Revenue:

Terminal Revenue
$ 17 $ 16 $ 1
Miscellaneous Other Income 21 7 14
Gain on Sale of Assets
8 1 7
Total Revenue and Other Income
46 24 22
Other Costs and Expenses:

Operating and Other Costs
20 20 —
Depreciation, Depletion and Amortization
5 8 (3 )
Selling, General and Administrative Costs
2 1 1
(Gain) Loss on Debt Extinguishment
(1 ) 1 (2 )
Interest Expense, net
16 16 —
Total Other Costs and Expenses
42 46 (4 )
Earnings (Loss) Before Income Tax
$ 4 $ (22 ) $ 26

~~Terminal Revenue~~

Terminal revenue consists of sales from the CONSOL Marine Terminal, which is located in the Port of Baltimore, Maryland and provides access to international coal markets. CONSOL Marine Terminal revenue was $17 million for the three months ended September 30, 2020, compared to $16 million for the three months ended September 30, 2019. The $1 million increase in the period-to-period comparison was primarily attributable to an increase in revenues associated with throughput tons and services not covered by the Company's take-or-pay contract.

	Three Months Ended
	March 31,
(in millions)	2021			2020			Variance
Revenue:
Coal Revenue	$	2		$	—		$	2
Miscellaneous Other Income		2			5			(3	)
Gain on Sale of Assets		7			—			7
Total Revenue and Other Income		11			5			6
Other Costs and Expenses:
Operating and Other Costs		11			15			(4	)
Depreciation, Depletion and Amortization		4			5			(1	)
Selling, General and Administrative Costs		4			3			1
Gain on Debt Extinguishment		(1	)		(17	)		16
Interest Expense, net		13			14			(1	)
Total Other Costs and Expenses		31			20			11
Loss Before Income Tax	$	(20	)	$	(15	)	$	(5	)

Miscellaneous Other Income

Miscellaneous other income was ~~$21~~$2 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to $7$5 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The change is due to the following items:

	Three Months Ended September 30,							Three Months Ended March 31,
(in millions)	2020		2019		Variance			2021		2020		Variance
Sale of Certain Coal Lease Contracts	$	18	$	—	$	18
Royalty Income - Non-Operated Coal		2		5		(3	)	$	1	$	5	$	(4	)
Interest Income		—		1		(1	)		1		—		1
Rental Income		—		1		(1	)
Other Income		1		—		1
Total Miscellaneous Other Income	$	21	$	7	$	14		$	2	$	5	$	(3	)

~~The increase in~~Royalty income ~~resulting from the sale of certain~~- non-operated coal ~~lease contracts is attributable to one of several transactions completed~~decreased in the ~~three months ended September 30, 2020 related~~period-to-period comparison due to the Company's non-operating surface and mineral assets outside of the PAMC. These transactions helped to enhance the Company's liquidity and improve its financial flexibility. See Note 2 - Major Transactionsa decline in the ~~Notes~~revenues earned as a result of less operating activity by third-party companies mining in reserves to ~~the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.~~which we have a royalty claim.

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Gain on Sale of Assets

Gain on sale of assets increased $7 million in the period-to-period comparison primarily due to the sale of various gas wells ~~and the related equipment~~ during the three months ended ~~September 30, 2020.~~March 31, 2021.

Operating and Other Costs

Operating and other costs were ~~$20~~$11 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$20~~$15 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Operating and other costs ~~remained materially consistent~~decreased in the period-to-period ~~comparison.~~comparison due to the following items:

	Three Months Ended September 30,							Three Months Ended March 31,
(in millions)	2020		2019		Variance			2021		2020		Variance
Terminal Operating Costs	$	5	$	6	$	(1	)
Employee-Related Legacy Liability Expense		7		9		(2	)	$	2	$	7	$	(5	)
Coal Reserve Holding Costs		2		1		1			3		1		2
Closed Mines		1		1		—			1		1		—
Other		5		3		2			5		6		(1	)
Total Operating and Other Costs	$	20	$	20	$	—		$	11	$	15	$	(4	)

Employee-Related Legacy Liability Expense decreased $5 million in the period-to-period comparison primarily due to changes in actuarial assumptions made at the beginning of each year. See Note 5 - Pension and Other Postretirement Benefits Plans and Note 6 - Coal Workers' Pneumoconiosis and Workers' Compensation in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization ~~decreased $3 million~~remained materially consistent in the period-to-period ~~comparison~~comparison. The change is due to current quarter adjustments to the Company's asset retirement obligations based on current projected cash outflows.

Selling, General and Administrative Costs

Selling, general and administrative costs are allocated to the Company's Other division based on a percentage of resources utilized, a percentage of total revenue and a percentage of total projected capital expenditures. ~~The increase of $1 million is a result of increases~~Selling, General and Administrative Costs remained materially consistent in the portion of selling, general and administrative expenses allocated to the Other division due to an increase of resources utilized at the CONSOL Marine Terminal, the Itmann Mine, closed mines and in other business development activities as compared to the prior quarter.period-to-period comparison.

~~(Gain) Loss~~Gain on Debt Extinguishment

Gain on debt extinguishment of $1 million ~~was recognized in the three months ended September 30, 2020 due to the open market repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025. Loss on debt extinguishment of $1~~and $17 million was recognized in the three months ended ~~September 30, 2019~~March 31, 2021 and March 31, 2020, respectively, due to the open market repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025.

Interest Expense, net

Interest expense, net of amounts capitalized, is comprised of interest on the Company's Senior Secured Credit Facilities and the 11.00% Senior Secured Second Lien Notes due ~~2025 and the 5.75% MEDCO Revenue Bonds.~~2025. Interest expense, net of amounts capitalized, remained materially consistent in the period-to-period comparison.

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~~Nine Months Ended September 30, 2020 Compared with the Nine Months Ended September 30, 2019~~

~~Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders~~

CONSOL Energy reported a net loss attributable to CONSOL Energy Inc. shareholders of $23 million for the nine months ended September 30, 2020, compared to net income attributable to CONSOL Energy Inc. shareholders of $62 million for the nine months ended September 30, 2019.

CONSOL Energy consists of the Pennsylvania Mining Complex, as well as various corporate and other business activities that are not allocated to the PAMC. The other business activities include the CONSOL Marine Terminal, development of the Itmann Mine, the Greenfield Reserves, closed mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated activities.

~~PAMC ANALYSIS:~~

The PAMC division's principal activities consist of mining, preparation and marketing of thermal coal, sold primarily to power generators. The division also includes selling, general and administrative costs, as well as various other activities assigned to the PAMC division, but not included in the cost components on a per unit basis.

The PAMC division had a loss before income tax of $18 million for the nine months ended September 30, 2020, compared to earnings before income tax of $156 million for the nine months ended September 30, 2019. Variances are discussed below.

Nine Months Ended

September 30,

(in millions)

2020

2019

Variance

Revenue:

Coal Revenue
$ 542 $ 985 $ (443 )
Freight Revenue
19 14 5
Miscellaneous Other Income
41 14 27
Total Revenue and Other Income
602 1,013 (411 )
Cost of Coal Sold:

Operating Costs
381 642 (261 )
Depreciation, Depletion and Amortization
121 128 (7 )
Total Cost of Coal Sold
502 770 (268 )
Other Costs:

Other Costs
43 15 28
Depreciation, Depletion and Amortization
24 8 16
Total Other Costs
67 23 44
Freight Expense
19 14 5
Selling, General and Administrative Costs
31 50 (19 )
Interest Expense, net 1 — 1
Total Costs and Expenses
620 857 (237 )
(Loss) Earnings Before Income Tax
$ (18 ) $ 156 $ (174 )

~~Table of Contents~~

~~Coal Production~~

~~The table below presents total tons produced (in thousands) from the Pennsylvania Mining Complex for the periods indicated:~~

Nine Months Ended September 30,

Mine

2020

2019

Variance

Bailey
5,619 8,955 (3,336 )
Enlow Fork
4,054 7,676 (3,622 )
Harvey
3,222 3,933 (711 )
Total
12,895 20,564 (7,669 )

Coal production was 12.9 million tons for the nine months ended September 30, 2020, compared to 20.6 million tons for the nine months ended September 30, 2019. The PAMC division's coal production decreased primarily due to the temporary idling of longwalls at the Bailey and Enlow Fork mines. This was mainly in response to weakened customer demand as a result of a warmer than normal winter, followed by a decline in global demand due to the COVID-19 pandemic and, in response, the widespread government-imposed shut-downs, which have significantly reduced electricity consumption and, therefore, demand for the Company's coal.

~~Coal Operations~~

The PAMC division's coal revenue and cost components on a per unit basis for the nine months ended September 30, 2020 and 2019 are detailed in the table below. The PAMC division's operations also include various costs such as selling, general and administrative, freight and other costs not included in the unit cost analysis because these costs are not directly associated with coal production.

Nine Months Ended September 30,

2020

2019

Variance

Total Tons Sold (in millions)
12.8 20.6 (7.8 )
Average Revenue per Ton Sold
$ 42.35 $ 47.84 $ (5.49 )

Average Cash Cost of Coal Sold per Ton ⁽¹⁾
$ 29.88 $ 31.16 $ (1.28 )
Depreciation, Depletion and Amortization Costs per Ton Sold (Non-Cash Cost)
9.37 6.23 3.14
Average Cost of Coal Sold per Ton ⁽¹⁾
$ 39.25 $ 37.39 $ 1.86
Average Margin per Ton Sold ⁽¹⁾
$ 3.10 $ 10.45 $ (7.35 )
Add: Depreciation, Depletion and Amortization Costs per Ton Sold
9.37 6.23 3.14
Average Cash Margin per Ton Sold ⁽¹⁾
$ 12.47 $ 16.68 $ (4.21 )

(1) Average cash cost of coal sold per ton and average cost of coal sold per ton are non-GAAP measures, and average margin per ton sold and average cash margin per ton sold are operating ratios derived from non-GAAP measures. See “~~How We Evaluate Our Operations - Reconciliation of Non-GAAP Financial Measures~~~~” for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.~~

~~Coal Revenue~~

Coal revenue was $542 million for the nine months ended September 30, 2020, compared to $985 million for the nine months ended September 30, 2019. Total tons sold decreased in the period-to-period comparison in response to weakened customer demand due to a warmer than normal winter followed by the COVID-19 pandemic, each of which have reduced electricity consumption and, therefore, demand for the Company's coal. Additionally, lower natural gas prices as compared to the prior year quarter have contributed to electric generation trending toward gas, rather than coal, as a fuel source. The decrease in customer demand and the overall decline in electric power markets also resulted in lower pricing received on the Company's sales contracts.

~~Freight Revenue and Freight Expense~~

Freight revenue is the amount billed to customers for transportation costs incurred. This revenue is based on the weight of coal shipped, negotiated freight rates and method of transportation, primarily rail, used by the customers to which the Company contractually provides transportation services. Freight revenue is completely offset by freight expense. Freight revenue and freight expense were both $19 million for the nine months ended September 30, 2020, compared to $14 million for the nine months ended September 30, 2019. The $5 million increase was due to increased shipments to customers where the Company was contractually obligated to provide transportation services.

~~Table of Contents~~

~~Miscellaneous Other Income~~

Miscellaneous other income was $41 million for the nine months ended September 30, 2020, compared to $14 million for the nine months ended September 30, 2019. The $27 million increase was primarily the result of additional customer contract buyouts in the nine months ended September 30, 2020, offset, in part, by a decrease in sales of externally purchased coal to blend and resell. These partial contract buyouts involved negotiations to reduce coal quantities of several customer contracts in exchange for payment of certain fees to the Company, and do not impact forward contract terms.

~~Cost of Coal Sold~~

Cost of coal sold is comprised of operating costs related to produced tons sold, along with changes in both the volumes and carrying values of coal inventory. The costs of coal sold include items such as direct operating costs, royalties and production taxes, direct administration costs and depreciation, depletion, and amortization costs on production assets. Total cost of coal sold was $502 million for the nine months ended September 30, 2020, or $268 million lower than the $770 million for the nine months ended September 30, 2019. Average cost of coal sold per ton was $39.25 for the nine months ended September 30, 2020, compared to $37.39 for the nine months ended September 30, 2019. The decrease in the total cost of coal sold was primarily driven by decreased production activity during the nine months ended September 30, 2020, mainly in response to weakened market demand. On a per unit basis, the decreased production resulted in an overall increase in the average cost of coal sold per ton.

~~Other Costs~~

Other costs include items that are assigned to the PAMC division but are not included in unit costs, such as idle mine costs, coal reserve holding costs and purchased coal costs. Total other costs increased $44 million in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. The increase was primarily attributable to the temporary idling of longwalls at the Bailey and Enlow Fork mines due to the COVID-19 pandemic and, in response, the widespread government-imposed shutdowns, which have significantly reduced electricity consumption and power prices and, therefore, demand for the Company's coal.

~~Selling, General, and Administrative Costs~~

The amount of selling, general and administrative costs related to the PAMC division was $31 million for the nine months ended September 30, 2020, compared to $50 million for the nine months ended September 30, 2019. The $19 million decrease in the period-to-period comparison was primarily related to reduced expense under the Company's Performance Incentive Plan, as well as several initiatives launched by management to reduce costs, including compensation reductions, curtailment of discretionary expenses and headcount management.

~~Interest Expense, net~~

Interest expense, net of amounts capitalized, primarily relates to obligations under various finance leases entered into during the nine months ended September 30, 2020. No such transactions occurred during the nine months ended September 30, 2019.

~~Table of Contents~~

~~OTHER ANALYSIS:~~

The other division includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC division. The diversified business activities include the CONSOL Marine Terminal, development of the Itmann Mine, the Greenfield Reserves, closed mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated activities.

Other business activities had a loss before income tax of $10 million for the nine months ended September 30, 2020, compared to a loss before income tax of $80 million for the nine months ended September 30, 2019. Variances are discussed below.

Nine Months Ended

September 30,

(in millions)

2020

2019

Variance

Revenue:

Terminal Revenue
$ 49 $ 51 $ (2 )
Miscellaneous Other Income 31 22 9
Gain on Sale of Assets
15 2 13
Total Revenue and Other Income
95 75 20
Other Costs and Expenses:

Operating and Other Costs
58 62 (4 )
Depreciation, Depletion and Amortization
11 15 (4 )
Selling, General and Administrative Costs
9 3 6
(Gain) Loss on Debt Extinguishment
(18 ) 25 (43 )
Interest Expense, net
45 50 (5 )
Total Other Costs and Expenses
105 155 (50 )
Loss Before Income Tax
$ (10 ) $ (80 ) $ 70

~~Terminal Revenue~~

Terminal revenue consists of sales from the CONSOL Marine Terminal, which is located in the Port of Baltimore, Maryland and provides access to international coal markets. CONSOL Marine Terminal revenue was $49 million for the nine months ended September 30, 2020, compared to $51 million for the nine months ended September 30, 2019. The $2 million decrease in the period-to-period comparison was primarily attributable to a decrease in revenues associated with throughput tons and services not covered by the Company's take-or-pay contract.

~~Miscellaneous Other Income~~

Miscellaneous other income was $31 million for the nine months ended September 30, 2020, compared to $22 million for the nine months ended September 30, 2019. The change is due to the following items:

Nine Months Ended September 30,

(in millions)

2020

2019

Variance

Sale of Certain Coal Lease Contracts $ 18 $ — $ 18
Royalty Income - Non-Operated Coal
10 17 (7 )
Property Easements and Option Income
— 1 (1 )
Rental Income 1 2 (1 )
Interest Income
— 2 (2 )
Other Income 2 — 2
Total Miscellaneous Other Income
$ 31 $ 22 $ 9

The increase in income resulting from the sale of certain coal lease contracts is attributable to one of several transactions completed in the nine months ended September 30, 2020 related to the Company's non-operating surface and mineral assets outside of the PAMC. These transactions helped to enhance the Company's liquidity and improve its financial flexibility. See Note 2 - Major Transactions in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Royalty Income - Non-Operated Coal decreased in the period-to-period comparison due to a decline in the revenues earned as a result of less operating activity by third-party companies mining in reserves to which we have a royalty claim.

~~Table of Contents~~

~~Gain on Sale of Assets~~

Gain on sale of assets increased $13 million in the period-to-period comparison primarily due to the sale of various gas wells and the related equipment during the nine months ended September 30, 2020.

~~Operating and Other Costs~~

Operating and other costs were $58 million for the nine months ended September 30, 2020, compared to $62 million for the nine months ended September 30, 2019. Operating and other costs decreased in the period-to-period comparison due to the following items:

Nine Months Ended September 30,

(in millions)

2020

2019

Variance

Terminal Operating Costs
$ 14 $ 17 $ (3 )
Employee-Related Legacy Liability Expense
19 28 (9 )
Coal Reserve Holding Costs
4 3 1
Lease Rental Expense 1 1 —
Closed Mines
3 2 1
Litigation Expense
4 4 —
Bank Fees 1 1 —
Other
12 6 6
Total Operating and Other Costs
$ 58 $ 62 $ (4 )

Employee-Related Legacy Liability Expense decreased $9 million in the period-to-period comparison primarily due to modifications made to the actuarial calculation of net periodic benefit cost at the beginning of each year mainly due to decreases in discount rates.

~~Depreciation, Depletion and Amortization~~

Depreciation, depletion and amortization decreased $4 million in the period-to-period comparison due to current quarter adjustments to the Company's asset retirement obligations based on current projected cash outflows.

~~Selling, General and Administrative Costs~~

Selling, general and administrative costs are allocated to the Company's Other division based on a percentage of resources utilized, a percentage of total revenue and a percentage of total projected capital expenditures. The increase of $6 million is a result of increases in the portion of selling, general and administrative expenses allocated to the Other division due to an increase of resources utilized at the CONSOL Marine Terminal, the Itmann Mine, closed mines and in other business development activities as compared to the prior year.

~~(Gain) Loss on Debt Extinguishment~~

Gain on debt extinguishment of $18 million was recognized in the nine months ended September 30, 2020 due to the open market repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025, which traded well below par value.

Loss on debt extinguishment of $25 million was recognized in the nine months ended September 30, 2019 due to the open market repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025, the $110 million required repayment on the Term Loan B Facility, and the refinancing of the Company's Revolving Credit Facility, Term Loan A Facility and Term Loan B Facility. See Note 13 - Long-Term Debt in the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q for additional information.

~~Interest Expense, net~~

Interest expense, net of amounts capitalized, is comprised of interest on the Company's Senior Secured Credit Facilities, the 11.00% Senior Secured Second Lien Notes due 2025 and the 5.75% MEDCO Revenue Bonds. Interest expense, net of amounts capitalized, decreased $5 million in the period-to-period comparison, primarily related to the $110 million required repayment on the Term Loan B Facility, as well as the refinancing of the Company's Revolving Credit Facility, Term Loan A Facility and Term Loan B Facility, both of which occurred during the first quarter of 2019. The decrease is also attributable to repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025 during the nine months ended September 30, 2020 and 2019, totaling approximately $45 million and $35 million, respectively (see Note 19 - Stock, Unit and Debt Repurchases in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).

~~Table of Contents~~

Liquidity and Capital Resources

CONSOL Energy's potential sources of liquidity include cash generated from operations, cash on hand, borrowings under the revolving credit facility and securitization facility (which are discussed below), and, if necessary, the ability to issue additional equity or debt securities. The Company believes that cash generated from these sources should be sufficient to meet its short-term working capital requirements, long-term capital expenditure requirements, and debt servicing obligations, as well as to provide required letters of credit.

The demand for coal experienced an unprecedented decline toward the end of the first quarter of 2020, ~~which continued through~~but has steadily improved since the ~~third quarter of 2020, driven by widespread government-imposed lockdowns caused by the COVID-19 pandemic. This decline in coal~~significant COVID-related demand has negatively impacted our operational, sales and financial performances year-to-date and we expect that this negative impact will continue as the pandemic continues. However, we saw steady improvementtrough in the ~~demand for our coal throughout the third~~second quarter of 2020. During the first quarter of 2021, the Company made principal repayments or repurchases of $7$9 million, $6 million, $2$9 million and $1$6 million on its finance leases and asset-backed financing arrangements, Term Loan A Facility, 11.00% Senior Secured Second Lien Notes and Term Loan B Facility, respectively. As of ~~September 30, 2020, our total liquidity was $323 million, including $22 million of cash and cash equivalents. As of September 30, 2020,~~March 31, 2021, our $400 million revolving credit facility has no borrowings and is currently only used for providing letters of credit with ~~$99~~$146 million issued. On April 13, 2021, the Company executed $75 million of tax-exempt solid waste disposal revenue bonds to be issued through the Pennsylvania Economic Development Financing Authority (“PEDFA”). The bonds will have a 30-year maturity and were priced in an initial 7-year term rate period with an interest rate of 9.0 percent.

While some government-imposed shut-downs of non-essential businesses in the United States and abroad have been phased out, there is a possibility that ~~such~~additional shut-downs may be reinstated if COVID-19 ~~experiences a resurgence. We expect that depressed demand for our coal will continue for so long as there is a widespread, government-imposed shut-down of business activity.~~continues to spread. Depressed demand for our coal may also result from a general recession or reduction in overall business activity caused by COVID-19. Additionally, some of our customers have already attempted, and may in the future attempt, to invoke force majeure or similar provisions in the contracts they have in place with us in order to avoid taking possession of and paying us for our coal that they are contractually obligated to purchase. ~~Sustained~~A decrease in demand for our coal and the failure of our customers to purchase coal from us that they are obligated to purchase pursuant to existing contracts would have a material adverse effect on our results of operations and financial condition. The extent to which COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the outbreak, the pace and effectiveness of vaccination efforts and the effectiveness of actions globally to contain or mitigate its effects. We expect this ~~matter~~could continue to negatively impact our results of operations, cash flows and financial condition. The Company will continue to take ~~the~~steps it believes are appropriate ~~steps~~ to mitigate the impact of COVID-19 on ~~the Company's~~its operations, liquidity and financial condition.

During the first quarter, the Company withdrew its previously announced operational and financial guidance for 2020. Given the ongoing uncertainty associated with the COVID-19 pandemic-driven economic slowdown, and due to the difficulty in forecasting the duration of this economic slowdown, the Company's 2020 guidance remains suspended. Cost containment and capital expenditure reductions remain the focus as volume opportunities remain limited in the near term.

In March 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law. The CARES Act has various liquidity boosting provisions that affect the Company related to income taxes and employee taxes. The Company has evaluated the various provisions, particularly the increased amount of deductible interest from 30% of adjusted taxable income to 50% for tax years 2019 and 2020. This is expected to reduce the Company's cash burden for 2019 and 2020, resulting in additional free cash flow. In addition to a decrease in the cash paid for income taxes, the Company has deferred the payment of its portion of Social Security payroll taxes in accordance with the provisions of the CARES Act. Also, for the nine months ended September 30, 2020, the Company is entitled to approximately $2 million in payroll retention credits in accordance with the provisions of the CARES Act. These sources of cash flow will aid in reducing uncertainty over the economic and operational impacts of COVID-19.

The Company expects to maintain adequate liquidity through its operating cash flow and revolving credit facility to fund its working capital and capital expenditures requirements. The Company's cash flow from operations in ~~2020 is~~the first quarter of 2021 was supported by its contracted position, strong spot market activity and its ongoing cost and capital control measures. ~~While the~~The Company ~~has been~~started experiencing some delays in collections of accounts receivable ~~since~~in the second half of ~~2019, the COVID-related decline in demand has impacted some of our customers, resulting in continued delays in collections.~~2019. This trend ~~improved slightly during~~has been improving over the ~~third quarter of 2020, although global demand for coal remained challenging.~~past several quarters. However, if these delays continue or increase, the Company may have less cash flow from operations and may have less borrowing capacity under its securitization facility (under which borrowing capacity is based on certain current accounts receivable).

The Company started a capital construction project on the coarse refuse disposal area in 2017, which is expected to continue through 2021. The construction on the coarse refuse disposal area is now funded, in part, by the $75 million of tax-exempt solid waste disposal revenue bonds, the proceeds of which the Company expects to expend over approximately the next two years, as qualified work is completed. The Company also began construction of the Itmann Mine in the second half of ~~2019. Given the ongoing uncertainty~~2019; development mining began in ~~the marketplace, COVID-related demand decline~~April 2020, and ~~other corporate priorities,~~full production is expected upon completion of a new preparation plant. When fully operational, the Company ~~has chosen to slow the spending on construction~~anticipates producing approximately 900 thousand tons per year of ~~the Itmann Mine.~~high-quality, low-vol coking coal capacity.

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Uncertainty in the financial markets brings additional potential risks to CONSOL Energy. These risks include ~~the~~a reduction of our ability to raise capital in the equity markets due to declines in the Company's stock price, less availability and higher costs of additional credit, potential counterparty defaults, and commercial bank failures. Financial market disruptions may impact the Company's collection of trade receivables. As a result, CONSOL Energy regularly monitors the creditworthiness of its customers and counterparties and manages credit exposure through payment terms, credit limits, prepayments and security.

Over the past year, the insurance and surety markets have been increasingly challenging, particularly for coal companies. We have experienced rising premiums, reduced coverage ~~and~~and/or fewer providers willing to underwrite policies and surety bonds. Terms have generally become more unfavorable, including increases in the amount of collateral required to secure surety bonds. Further cost burdens on our ability to maintain adequate insurance and bond coverage may adversely impact our operations, financial position and liquidity.

The Company owns an undivided interest in 75% of the PAMC and the Partnership owns the remaining undivided 25% interest of the PAMC. As of September 30, 2020, the Company had a 61.4% economic ownership interest in the Partnership through its various holdings of the general partner and limited partnership interests of the Partnership.

~~The Company~~ is continuing to actively monitor the effects of the ongoing COVID-19 pandemic on its liquidity and capital resources. As disclosed previously and above, we took several steps ~~during~~throughout the ~~first three quarters of 2020~~COVID-19 pandemic to reinforce our liquidity. From a coal shipment perspective, the decline in coal demand seemed to have hit its lowest point in May 2020 and has since shown ~~some modest~~significant improvement. However, if the demand for our coal ~~continues to decrease,~~decreases, this could adversely affect our liquidity in future quarters. Our Revolving Credit Facility, Term Loan A Facility, Term Loan B Facility, Securitization Facility and the Indenture entered into in connection with our 11.00% Senior Secured Second Lien Notes due 2025 (collectively, the “Credit Facilities”) contain certain financial covenants. Events resulting from the effects of COVID-19 may negatively impact our liquidity and, as a result, our ability to comply with these covenants, which were amended during the second quarter of 2020. These events could lead us to seek further amendments or waivers from our lenders, limit access to or require accelerated repayment of amounts borrowed under the Credit Facilities, or require us to pursue alternative financing. We have no assurance that any such alternative financing, if required, could be obtained at terms acceptable to us, or at all, as a result of the effects of COVID-19 on capital markets at such time.

Cash Flows (in millions)

	Nine Months Ended September 30,									Three Months Ended March 31,
	2020			2019			Change			2021			2020			Change
Cash Provided by Operating Activities	$	62		$	223		$	(161	)	$	78		$	51		$	27
Cash Used in Investing Activities	$	(57	)	$	(129	)	$	72		$	(5	)	$	(27	)	$	22
Cash Used in Financing Activities	$	(63	)	$	(224	)	$	161		$	(32	)	$	(26	)	$	(6	)

Cash provided by operating activities ~~decreased $161~~increased $27 million in the period-to-period comparison, primarily due to a ~~$104~~$24 million ~~decrease~~increase in net ~~(loss)~~ income, a ~~$43~~$16 million change in ~~(gain) loss~~gain on debt extinguishment and other working capital changes that occurred throughout both periods.

Cash used in investing activities decreased ~~$72~~$22 million in the period-to-period comparison. ~~Capital~~The decrease is primarily attributable to a $13 million decrease in capital expenditures ~~decreased primarily~~ as a result of cost control measures put into place by management and an $8 million increase in ~~response~~proceeds from the sale of assets due to the ~~COVID-19 pandemic and~~sale of various gas wells during the ~~overall decline in coal markets.~~three months ended March 31, 2021. Further details regarding the Company's capital expenditures are set forth below.

	Nine Months Ended September 30,							Three Months Ended March 31,
	2020		2019		Change			2021		2020		Change
Building and Infrastructure	$	31	$	50	$	(19	)	$	7	$	15	$	(8	)
Equipment Purchases and Rebuilds		21		44		(23	)		4		8		(4	)
Refuse Storage Area		12		25		(13	)
Solid Waste Disposal Project									2		3		(1	)
IS&T Infrastructure		1		5		(4	)		1		—		1
Other		1		7		(6	)		—		1		(1	)
Total Capital Expenditures	$	66	$	131	$	(65	)	$	14	$	27	$	(13	)

Cash used in financing activities ~~decreased $161~~increased $6 million in the period-to-period comparison. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, total payments of ~~$45~~$30 million were made on the Company's finance leasing arrangements, Term Loan A Facility, Term Loan B Facility and 11.00% Senior Secured Second Lien Notes.

During the three months ended March 31, 2020, total payments of $35 million were made on the Company's finance leasing arrangements, Term Loan A Facility, Term Loan B Facility and 11.00% Senior Secured Second Lien Notes. The Company also received proceeds of approximately $16 million related to a finance leasing arrangement in the ~~nine~~three months ended ~~September 30,~~March 31, 2020. ~~In connection with the June 2020 amendment of the Company's credit facility, approximately $8 million of financing-related fees and charges were paid in the nine months ended September 30, 2020.~~

During the nine months ended September 30, 2019, total payments of $166 million were made on the Company's Term Loan B Facility, 11.00% Senior Secured Second Lien Notes and the Term Loan A Facility, which included the required excess cash flow repayment of $110 million on the Term Loan B Facility (see Note 13 - Long-Term Debt for additional information). The Company received additional proceeds on its Term Loan A Facility in the amount of $26 million as a result of the debt refinancing that occurred during the nine months ended September 30, 2019. In connection with the debt refinancing, approximately $18 million of financing-related fees and charges were paid in the nine months ended September 30, 2019. Also during the nine months ended September 30, 2019, CONSOL Energy shares were repurchased and CONSOL Coal Resources LP units were purchased, totaling $32 million.

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Senior Secured Credit Facilities

In November 2017, the Company entered into a revolving credit facility with PNC Bank, N.A. with commitments up to $300 million (the “Revolving Credit Facility”), a Term Loan A Facility of up to $100 million (the “TLA Facility”) and a Term Loan B Facility of up to $400 million (the “TLB Facility”, and together with the Revolving Credit Facility and the TLA Facility, the “Senior Secured Credit Facilities”). On March 28, 2019, the Company amended the Senior Secured Credit Facilities to increase the borrowing commitment of the Revolving Credit Facility to $400 million and reallocate the principal amounts outstanding under the TLA Facility and TLB Facility. On March 29, 2021, the Company amended the Senior Secured Credit Facilities to revise the negative covenant with respect to other indebtedness to allow the Company to incur obligations under the tax-exempt solid waste disposal revenue bonds. On June 5, 2020, the Company amended the Senior Secured Credit Facilities (the “amendment”) to provide eight quarters of financial covenant relaxation, effect an increase in the rate at which borrowings under the Revolving Credit Facility and the TLA Facility bear interest, and add an anti-cash hoarding provision. Borrowings under the Company's Senior Secured Credit Facilities bear interest at a floating rate which can be, at the Company's option, either (i) LIBOR plus an applicable margin or (ii) an alternate base rate plus an applicable margin. The applicable margin for the Revolving Credit Facility and TLA Facility depends on the total net leverage ratio, whereas the applicable margin for the TLB Facility is fixed. The amendment increased the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility. The maturity date of the Revolving Credit and TLA Facilities is March 28, 2023. The TLB Facility's maturity date is September 28, 2024. In June 2019, the TLA Facility began amortizing in equal quarterly installments of (i) 3.75% of the original principal amount thereof, for four consecutive quarterly installments commencing with the quarter ended June 30, 2019, (ii) 6.25% of the original principal amount thereof for the subsequent eight quarterly installments commencing with the quarter ended June 30, 2020 and (iii) 8.75% of the original principal amount thereof for the quarterly installments thereafter, with the remaining balance due at final maturity. In June 2019, the TLB Facility began amortizing in equal quarterly installments in an amount equal to 0.25% per annum of the amended principal amount thereof, with the remaining balance due at final maturity.

Obligations under the Senior Secured Credit Facilities are guaranteed by (i) all owners of the ~~75% undivided economic interest in the~~ PAMC held by the Company, (ii) any other members of the Company’s group that own any portion of the collateral securing the Revolving Credit Facility, and (iii) subject to certain customary exceptions and agreed materiality thresholds, all other existing or future direct or indirect wholly-owned restricted subsidiaries of the ~~Company (excluding the Partnership and its wholly-owned subsidiaries).~~Company. The obligations are secured by, subject to certain exceptions (including a limitation of pledges of equity interests in certain subsidiaries and certain thresholds with respect to real property), a first-priority lien on (i) the Company’s ~~75% undivided economic~~ interest in the Pennsylvania Mining Complex, (ii) the limited partner units of the Partnership held by the Company, (iii) the equity interests in CONSOL Coal Resources GP LLC held by the Company, (iv) the CONSOL Marine Terminal, (v) the Itmann Mine, and ~~(v)~~(vi) the 1.5 billion tons of Greenfield Reserves. The Senior Secured Credit Facilities contain a number of customary affirmative covenants. In addition, the Senior Secured Credit Facilities contain a number of negative covenants, including (subject to certain exceptions) limitations on (among other things): indebtedness, liens, investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness. The amendment added additional conditions to be met for the covenants relating to investments in joint ventures, general investments, share repurchases, dividends, and repurchases of the Second Lien ~~Notes.~~Notes (as defined below). The additional conditions require no outstanding borrowings and no more than $200 million of outstanding letters of credit on the Revolving Credit Facility. Further restrictions apply to investments in joint ventures, share repurchases and dividends that require the total net leverage ratio shall not be greater than 2.00 to 1.00.

The Revolving Credit Facility and TLA Facility also include financial covenants, including (i) a maximum first lien gross leverage ratio, (ii) a maximum total net leverage ratio, and (iii) a minimum fixed charge coverage ratio. The maximum first lien gross leverage ratio is calculated as the ratio of Consolidated First Lien Debt to Consolidated ~~EBITDA, excluding the Partnership.~~EBITDA. Consolidated EBITDA, as used in the covenant calculation, excludes non-cash compensation expenses, non-recurring transaction expenses, extraordinary gains and losses, gains and losses on discontinued operations, non-cash charges related to legacy employee liabilities and gains and losses on debt extinguishment, and ~~includes cash distributions received from the Partnership and~~ subtracts cash payments related to legacy employee liabilities. The maximum total net leverage ratio is calculated as the ratio of Consolidated Indebtedness, minus Cash on Hand, to Consolidated ~~EBITDA, excluding the Partnership.~~EBITDA. The minimum fixed charge coverage ratio is calculated as the ratio of Consolidated EBITDA to Consolidated Fixed ~~Charges, excluding the Partnership.~~Charges. Consolidated Fixed Charges, as used in the covenant calculation, include cash interest payments, cash payments for income taxes, scheduled debt repayments, dividends paid, and Maintenance Capital Expenditures. The amendment revised the financial covenants applicable to the Revolving Credit Facility and TLA Facility relating to the maximum first lien gross leverage ratio, maximum total net leverage ratio and minimum fixed charge coverage ratio, so that for the fiscal quarters ending June 30, 2020 through March 31, 2021, the maximum first lien gross leverage ratio shall be 2.50 to 1.00, the maximum total net leverage ratio shall be 3.75 to 1.00, and the minimum fixed charge coverage ratio shall be 1.00 to 1.00; for the fiscal quarters ending June 30, 2021 through September 30, 2021, the maximum first lien gross leverage ratio shall be 2.25 to 1.00 and the maximum total net leverage ratio shall be 3.50 to 1.00; for the fiscal quarters ending June 30, 2021 through March 31, 2022, the minimum fixed charge coverage ratio shall be 1.05 to 1.00; for the fiscal quarters ending December 31, 2021 through March 31, 2022, the maximum first lien gross leverage ratio shall be 2.00 to 1.00 and the maximum total net leverage ratio shall be 3.25 to 1.00; and for the fiscal quarters ending on or after June 30, 2022, the maximum first lien gross leverage ratio shall be 1.75 to 1.00, the maximum total net leverage ratio shall be 2.75 to 1.00 and the minimum fixed charge coverage ratio shall be 1.10 to 1.00. The maximum first lien gross leverage ratio was ~~2.04~~1.37 to 1.00 at ~~September 30, 2020.~~March 31, 2021. The maximum total net leverage ratio was ~~3.38~~1.97 to 1.00 at ~~September 30, 2020.~~March 31, 2021. The minimum fixed charge coverage ratio was ~~1.33~~1.88 to 1.00 at ~~September 30, 2020.~~March 31, 2021. The Company was in compliance with all of its ~~debt~~financial covenants under the Senior Secured Credit Facilities as of ~~September 30, 2020.~~March 31, 2021.

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The TLB Facility also includes a financial covenant that requires the Company to repay a certain amount of its borrowings under the TLB Facility within ten business days after the date it files its Form 10-K with the Securities and Exchange Commission (“SEC”) if the Company has excess cash flow (as defined in the credit agreement for the Senior Secured Credit Facilities) during the year covered by the applicable Form 10-K. During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2021, CONSOL Energy made the required repayment of approximately ~~$110~~$5 million based on the amount of the Company's excess cash flow as of December 31, 2018. For fiscal year 2018, such repayment was equal to 75% of the Company’s excess cash flow less any voluntary prepayments of its borrowings under the TLB Facility made by the Company during 2018. For all subsequent fiscal years, the2020. The required repayment is equal to a certain percentage of the Company’s excess cash flow for such year, ranging from 0% to 75% depending on the Company’s total net leverage ratio, less the amount of certain voluntary prepayments made by the Company, if any, under the TLB Facility during such fiscal year. Based on the Company's excess cash flow calculation, no repayment was required with respect to the year ended December 31, 2019. The amount of excess cash flow is a covenant feature only applicable as of the Company's year-end and will be calculated as of December 31, 2020.

During the year ended December 31, 2019, the Company entered into interest rate swaps, which effectively converted $150 million of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2020 and 2021, and $50 million of the TLB Facility's floating interest rate to a fixed interest rate for the twelve months ending December 31, 2022.

The Senior Secured Credit Facilities contain customary events of default, including with respect to a failure to make payments when due, cross-default and cross-judgment default and certain bankruptcy and insolvency events.

At ~~September 30, 2020,~~March 31, 2021, the Revolving Credit Facility had no borrowings outstanding and ~~$99~~$146 million of letters of credit outstanding, leaving ~~$301~~$254 million of unused capacity. From time to time, CONSOL Energy is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. CONSOL Energy sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

Securitization Facility

On November 30, 2017, (1)(i) CONSOL Marine Terminals LLC, as an originator of receivables, (ii) CONSOL Pennsylvania Coal Company LLC (“CONSOL Pennsylvania”), as an originator of receivables and as initial servicer of the receivables for itself and the other originators (collectively, the “Originators”), each a wholly-owned subsidiary of CONSOL Energy, and (iii) CONSOL Funding LLC (the “SPV”), a Delaware special purpose entity and wholly-owned subsidiary of CONSOL Energy, as buyer, entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) and (2)(i) CONSOL Thermal Holdings LLC, an indirect, wholly-owned subsidiary of the Partnership, as sub-originator (the “Sub-Originator”), and (ii) CONSOL Pennsylvania, as buyer and as initial servicer of the receivables for itself and the Sub-Originator, entered into a Sub-Originator Sale Agreement (the “Sub-Originator PSA”). In addition, on November 30, 2017, the SPV entered into a Receivables Financing Agreement (the “Receivables Financing Agreement”) by and among (i) the SPV, as borrower, (ii) CONSOL Pennsylvania, as initial servicer, (iii) PNC Bank, as administrative agent, LC Bank and lender, and (iv) the additional persons from time to time party thereto as lenders. Together, the Purchase and Sale Agreement, the Sub-Originator PSA and the Receivables Financing Agreement establish the primary terms and conditions of an accounts receivable securitization program (the “Securitization”). In March 2020, the securitization facility was amended to, among other things, extend the maturity date from August 30, 2021 to March 27, 2023.

Pursuant to the Securitization, (i) the Sub-Originator sells current and future trade receivables to CONSOL Pennsylvania and (ii) the Originators sell and/or contribute current and future trade receivables (including receivables sold to CONSOL Pennsylvania by the Sub-Originator) to the SPV and the SPV, in turn, pledges its interests in the receivables to PNC Bank, which either makes loans or issues letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the Securitization may not exceed $100 million.

Loans under the Securitization accrue interest at a reserve-adjusted LIBOR market index rate equal to the one-month Eurodollar rate. Loans and letters of credit under the Securitization also accrue a program fee and a letter of credit participation fee, respectively, ranging from 2.00% to 2.50% per annum depending on the total net leverage ratio of CONSOL Energy. In addition, the SPV paid certain structuring fees to PNC Capital Markets LLC and will pay other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

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The SPV’s assets and credit are not available to satisfy the debts and obligations owed to the creditors of CONSOL Energy, the Sub-Originator or any of the Originators. The Sub-Originator, the Originators and CONSOL Pennsylvania as servicer are independently liable for their own customary representations, warranties, covenants and indemnities. In addition, CONSOL Energy has guaranteed the performance of the obligations of the Sub-Originator, the Originators and CONSOL Pennsylvania as servicer, and will guarantee the obligations of any additional originators or successor servicer that may become party to the Securitization. However, neither CONSOL Energy nor its affiliates will guarantee collectability of receivables or the creditworthiness of obligors thereunder.

The agreements comprising the Securitization contain various customary representations and warranties, covenants and default provisions which provide for the termination and acceleration of the commitments and loans under the Securitization in certain circumstances including, but not limited to, failure to make payments when due, breach of representation, warranty or covenant, certain insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness.

At ~~September 30, 2020,~~March 31, 2021, eligible accounts receivable totaled approximately ~~$31~~$25 million. At ~~September 30, 2020,~~March 31, 2021, the facility had no outstanding borrowings and ~~$30~~$26 million of letters of credit outstanding, leaving ~~$1 million of~~no unused capacity. Costs associated with the receivables facility totaled ~~$249~~$261 thousand for the three months ended ~~September 30, 2020.~~March 31, 2021. These costs have been recorded as financing fees which are included in Operating and Other Costs in the Consolidated Statements of Income. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.

11.00% Senior Secured Second Lien Notes due 2025

On November 13, 2017, the Company issued $300 million in aggregate principal amount of 11.00% Senior Secured Second Lien Notes due 2025 (the “Second Lien Notes”) pursuant to an indenture (the “Indenture”) dated as of November 13, 2017, by and between the Company and UMB Bank, N.A., a national banking association, as trustee and collateral trustee (the “Trustee”). On November 28, 2017, certain subsidiaries of the Company executed a supplement to the Indenture and became party to the Indenture as a guarantor (the “Guarantors”). The Second Lien Notes are secured by second priority liens on substantially all of the assets of the Company and the Guarantors that are pledged ~~and~~ on a first-priority basis as collateral securing the Company’s obligations under the Senior Secured Credit Facilities (described above), subject to certain exceptions under the Indenture.

On or after November 15, 2021, the Company may redeem all or part of the Second Lien Notes at the redemption prices set forth below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the rights of holders of the Second Lien Notes on the relevant record date to receive interest due on the relevant interest payment date), beginning on November 15 of the years indicated:

Year		Percentage
2021		105.50%
2022		102.75%
2023 and thereafter		100.00%

Prior to November 15, 2020, the Company may on one or more occasions redeem up to 35% of the principal amount of the Second Lien Notes with an amount of cash not greater than the amount of the net cash proceeds from one or more equity offerings at a redemption price equal to 111.00% of the principal amount of the Second Lien Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, as long as at least 65% of the aggregate principal amount of the Second Lien Notes originally issued on the issue date (excluding Second Lien Notes held by the Company and its subsidiaries) remains outstanding after each such redemption and the redemption occurs within less than 180 days after the date of the closing of the equity offering.

At any time or from time to time prior to November 15, 2021, the Company may also redeem all or a part of the Second Lien Notes, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium, as defined in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the rights of holders of the Second Lien Notes on the relevant record date to receive interest due on the relevant interest payment date).

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The Indenture contains covenants that will limit the ability of the Company and the Guarantors, to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) declare or pay dividends on the Company’s common stock, redeem stock or make other distributions to the Company’s stockholders; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Company’s restricted subsidiaries; (vi) merge or consolidate, or sell, transfer, lease or dispose of substantially all of the Company’s assets; (vii) sell or otherwise dispose of certain assets, including equity interests in subsidiaries; (viii) enter into transactions with affiliates; and (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the Second Lien Notes achieve an investment grade rating from both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc. and no default under the Indenture exists, many of the foregoing covenants will terminate and cease to apply. The Indenture also contains customary events of default, including (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of principal or premium, if any, on the Notes at maturity, upon redemption or otherwise; (iii) covenant defaults; (iv) cross-defaults to certain indebtedness, and (v) certain events of bankruptcy or insolvency with respect to the Company or any of the Guarantors. If an event of default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Second Lien Notes may declare all the Notes to be due and payable immediately. If an event of default arises from certain events of bankruptcy or insolvency, with respect to the Company, any restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries of the Company that, taken together, would constitute a significant subsidiary, all outstanding Second Lien Notes will become due and payable immediately without further action or notice.

If the Company experiences certain kinds of changes of control, holders of the Second Lien Notes will be entitled to require the Company to repurchase all or any part of that holder’s Second Lien Notes pursuant to an offer on the terms set forth in the Indenture. The Company will offer to make a cash payment equal to 101% of the aggregate principal amount of the Second Lien Notes repurchased plus accrued and unpaid interest on the Second Lien Notes repurchased to, but not including, the date of purchase, subject to the rights of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date.

The Second Lien Notes were issued in a private offering that is exempt from the registration requirements of the Securities Act, to qualified institutional buyers in accordance with Rule 144A and to persons outside of the United States pursuant to Regulation S under the Securities Act.

~~Affiliated Company Credit Agreement with Partnership~~

On November 28, 2017, the Company also entered into an Affiliated Company Credit Agreement with the Partnership and certain of its subsidiaries (the “Partnership Credit Parties”) under which the Company provides as lender a revolving credit facility in an aggregate principal amount of up to $275 million to the Partnership Credit Parties. In connection with the completion of the separation, the Partnership drew an initial $201 million, the net proceeds of which were used to repay the Original CCR Credit Facility and to provide working capital for the Partnership following the separation and for other general corporate purposes.

On June 5, 2020, the Company amended the Affiliated Company Credit Agreement to provide eight quarters of financial covenant relaxation, effected a 50 basis points increase in the rate at which borrowings under the Affiliated Company Credit Agreement bear interest, and added additional conditions to be met for the covenants relating to general investments, investments in unrestricted subsidiaries, and distributions to equity holders of the Partnership. The Affiliated Company Credit Agreement has a maturity date of December 28, 2024. The collateral obligations under the Affiliated Company Credit Agreement generally mirror the Original CCR Credit Facility, as does the list of entities that will act as guarantors thereunder. The Affiliated Company Credit Agreement is subject to financial covenants relating to a maximum first lien gross leverage ratio and a maximum total net leverage ratio, which will be calculated on a consolidated basis for the Partnership and its restricted subsidiaries at the end of each fiscal quarter. The Partnership was in compliance with each of these financial covenants at September 30, 2020. The Affiliated Company Credit Agreement also contains a number of customary affirmative covenants and negative covenants, including limitations on the ability of the Partnership to incur additional indebtedness, grant liens, and make investments, acquisitions, dispositions, restricted payments, and prepayments of junior indebtedness (subject to certain limited exceptions).

~~See Note 20 - Subsequent Events in the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q for a discussion of the CCR Merger.~~

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~~Contractual Obligations~~

CONSOL Energy is required to make future payments under various contracts. CONSOL Energy also has commitments to fund its pension plans, provide payments for other postretirement benefit plans, and fund capital projects. There have been no material changes to these contractual obligations outside the ordinary course of business since March 31, 2020.

Debt

At ~~September 30, 2020,~~March 31, 2021, CONSOL Energy had total long-term debt and finance lease obligations of ~~$688~~$645 million outstanding, including the current portion of long-term debt of ~~$69~~$50 million. This long-term debt consisted of:

•

An aggregate principal amount of ~~$271~~$265 million in connection with the Term Loan B (TLB) Facility, due in September 2024, less $1 million of unamortized discount. Borrowings under the TLB Facility bear interest at a floating rate.

•

An aggregate principal amount of ~~$176~~$157 million of 11.00% Senior Secured Second Lien Notes due in November 2025. Interest on the notes is payable May 15 and November 15 of each year.

•

An aggregate principal amount of ~~$73~~$60 million in connection with the Term Loan A (TLA) Facility, due in March 2023. Borrowings under the TLA Facility bear interest at a floating rate.

•

An aggregate principal amount of $103 million of industrial revenue bonds which were issued to finance the Baltimore port facility, bear interest at 5.75% per annum and mature in September 2025. Interest on the industrial revenue bonds is payable March 1 and September 1 of each year. Payment of the principal and interest on the notes is guaranteed by CONSOL Energy.

•

An aggregate principal amount of $22 million in connection with asset-backed financing. Approximately $19 million is due in December 2020 at a weighted average interest rate of 4.30%, and approximately $3 million is due in September 2024 at an interest rate of 3.61%.

•

Advance royalty commitments of $2 million with a weighted average interest rate of ~~10.78%~~13.68% per annum.

•

An aggregate principal amount of ~~$42~~$59 million of finance leases and asset-backed financing arrangements with a weighted average interest rate of ~~5.38% per annum.~~6.14% and 3.61%, respectively.

At ~~September 30, 2020,~~March 31, 2021, CONSOL Energy had no borrowings outstanding and approximately ~~$99~~$146 million of letters of credit outstanding under the $400 million senior secured Revolving Credit Facility. At ~~September 30, 2020,~~March 31, 2021, CONSOL Energy had no borrowings outstanding and approximately ~~$30~~$26 million of letters of credit outstanding under the $100 million Securitization Facility.

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Stock ~~Unit~~ and Debt Repurchases

In December 2017, CONSOL Energy’s Board of Directors approved a program to repurchase, from time to time, the Company's outstanding shares of common stock or its 11.00% Senior Secured Second Lien Notes due ~~2025, in an aggregate amount of up to $50 million through~~2025. Since its inception, the period ending June 30, 2019. The program was subsequently amended by CONSOL Energy's Board of Directors in July 2018 to allow up to $100 million of repurchases of the Company's common stock or its 11.00% Senior Secured Second Lien Notes due 2025, subject to certain limitations in the Company's current credit agreement and that certain tax matters agreement entered into by and between the Company and its former parent on November 28, 2017 (the “TMA”). The Company's Board of Directors ~~also authorized the Company to use up to $25 million of~~has subsequently amended the program ~~to purchase CONSOL Coal Resources LP's outstanding common units~~several times, the most recent of which amendment in ~~the open market. In May 2019, CONSOL Energy's Board of Directors approved an expansion of the program in the amount of $75 million, bringing~~April 2021 raised the aggregate limit of the ~~program~~Company's repurchase authority to ~~$175 million. The May 2019 expansion also increased the aggregate limit of the amount of CONSOL Coal Resources LP's common units that can be purchased under~~$320 million and extended the program to $50 million, which is consistent with the Company's credit facility covenants that prohibit the Company from using more than $50 million for the purchase of CONSOL Coal Resources LP's outstanding common units. The Company's Board of Directors also approved extending the termination date of the program from June 30, 2019 to June 30, 2020. In July 2019, CONSOL Energy's Board of Directors approved an expansion of the program in the amount of $25 million, bringing the aggregate limit of the program to $200 million. On May 8, 2020, CONSOL Energy's Board of Directors approved an expansion of the stock, unit and debt repurchase program. The aggregate amount of the program's expansion was $70 million, bringing the total amount of the Company's stock, unit and debt repurchase program to $270 million. The Company's Board of Directors also approved extending the termination date of the program from June 30, 2020 to June 30,until December 31, 2022.

Under the terms of the program, CONSOL Energy is permitted to make repurchases in the open market, in privately negotiated transactions, accelerated repurchase programs or in structured share repurchase programs. CONSOL Energy is also authorized to enter into one or more 10b5-1 plans with respect to any of the repurchases. Any repurchases of common stock ~~notes~~ or ~~units~~notes are to be funded from available cash on hand or short-term borrowings. The program does not obligate CONSOL Energy to acquire any particular amount of its common stock ~~notes~~ or ~~units,~~notes, and can be modified or suspended at any time at the Company’s discretion. The program is conducted in compliance with applicable legal requirements and within the limits imposed by any credit agreement, receivables purchase agreement, indenture or the TMA and is subject to market conditions and other factors.

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company spent approximately ~~$26~~$9 million to retire ~~$45~~$10 million of its 11.00% Senior Secured Second Lien Notes due 2025, which continued to trade ~~well~~ below par value. No common shares were repurchased ~~and no common Partnership units were purchased~~ under this program during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Total Equity and Dividends

Total equity attributable to CONSOL Energy was ~~$553~~$583 million at ~~September 30, 2020~~March 31, 2021 and ~~$572~~$554 million at December 31, ~~2019.~~2020. See the Consolidated Statements of Stockholders' Equity in Item 1 of this Form 10-Q for additional details.

The declaration and payment of dividends by CONSOL Energy is subject to the discretion of CONSOL Energy's Board of Directors, and no assurance can be given that CONSOL Energy will pay dividends in the future. The determination to pay dividends in the future will depend upon, among other things, general business conditions, CONSOL Energy's financial results, contractual and legal restrictions regarding the payment of dividends by CONSOL Energy, planned investments by CONSOL Energy and such other factors as the Board of Directors deems relevant. The Company's Senior Secured Credit Facilities limit CONSOL Energy's ability to pay dividends up to $25 million annually, which increases to $50 million annually when the Company's total net leverage ratio is less than 1.50 to 1.00 and subject to an aggregate amount up to a cumulative credit calculation set forth in the facilities, with additional conditions of no outstanding borrowings and no more than $200 million of outstanding letters of credit on the Revolving Credit Facility, and the total net leverage ratio shall not be greater than 2.00 to 1.00. The total net leverage ratio was ~~3.38~~1.97 to 1.00 and the cumulative credit was approximately ~~$15~~$55 million at ~~September 30, 2020.~~March 31, 2021. The cumulative credit starts with $50 million and builds with excess cash flow commencing in 2018. ~~The calculation of the total net leverage ratio excludes the Partnership.~~ The Senior Secured Credit Facilities do not permit dividend payments in the event of default. The Indenture to the 11.00% Senior Secured Second Lien Notes limits dividends when the Company's total net leverage ratio exceeds 2.00 to 1.00 and ~~subject~~limits dividends to an amount not to exceed an annual rate of 4.0% of the quoted public market value per share of such common stock at the time of the declaration. The Indenture does not permit dividend payments in the event of default.

In connection with the separation, the Partnership entered into an intercompany loan arrangement with the Company with an initial outstanding balance of $201 million. The Partnership used the initial loan to repay outstanding borrowings under the prior revolving credit facility, which was then terminated. The intercompany loan arrangement limits the Partnership's ability to pay distributions to its unitholders (including the Company) when the Partnership's first lien gross leverage ratio exceeds 2.00 to 1.00.

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Upon payment of the cash distribution with respect to the quarter ended June 30, 2019, the financial requirements for the conversion of all CCR subordinated units were satisfied. As a result, on August 16, 2019, all 11,611,067 subordinated units, owned entirely by CONSOL Energy Inc., were converted into common units on a one-for-one basis. The conversion did not impact the amount of the cash distribution paid or the total number of CCR's outstanding units representing limited partner interests.

On April 23, 2020, the Board of Directors of CCR's general partner made the decision to temporarily suspend the quarterly cash distributions to all of CCR's unitholders due to the ongoing uncertainty in the commodity markets driven by the COVID-19 pandemic-related demand decline. On July 28, 2020, the Board of Directors of CCR's general partner made the decision to continue the suspension of the quarterly cash distribution. Accordingly, CCR will focus on deleveraging its balance sheet by conserving cash, boosting liquidity and reducing its outstanding debt.

Off-Balance Sheet Arrangements

CONSOL Energy does not maintain off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on CONSOL Energy’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources which are not disclosed in the Notes to the Consolidated Financial Statements of this Form 10-Q. CONSOL Energy participates in the United Mine Workers of America (the “UMWA”) Combined Benefit Fund and the UMWA 1992 Benefit Plan which generally accepted accounting principles recognize on a pay-as-you-go basis. These benefit arrangements may result in additional liabilities that are not recognized on the Consolidated Balance Sheet at ~~September 30, 2020.~~March 31, 2021. The various multi-employer benefit plans are discussed in Note ~~16—~~17—Other Employee Benefit Plans in the Notes to the Consolidated Financial Statements in Item 8 of the December 31, ~~2019~~2020 Form 10-K. CONSOL Energy's total contributions under the Coal Industry Retiree Health Benefit Act of 1992 were ~~$1,373~~$1,224 and ~~$1,556~~$1,364 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. CONSOL Energy's total contributions under the Coal Industry Retiree Health Benefit Act of 1992 were $4,110 and $4,662 for the nine months ended September 30, 2020 and 2019,~~ respectively. Based on available information at ~~December~~March 31, ~~2019,~~2021, CONSOL Energy's obligation for the UMWA Combined Benefit Fund and 1992 Benefit Plan is estimated to be approximately ~~$62,295.~~$56,039. CONSOL Energy also uses a combination of surety bonds, corporate guarantees and letters of credit to secure its financial obligations for employee-related, environmental, performance and various other items which are not reflected on the Consolidated Balance Sheet at ~~September 30, 2020.~~March 31, 2021. Management believes these items will expire without being funded. See Note 14—Commitments and Contingent Liabilities in the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q for additional details of the various financial guarantees that have been issued by CONSOL Energy.

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Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the federal securities laws. With the exception of historical matters, the matters discussed in this Quarterly Report on Form 10-Q are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that involve risks and uncertainties that could cause actual results and outcomes to differ materially from results expressed in or implied by our forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following:

	•	the number of shares of CEIX common stock that the holders of CCR common units may receive in the pending merger between CEIX and CCR (the CCR Merger) is based on a fixed exchange ratio and will not be adjusted in the event of any change in the price of either shares of CEIX common stock or CCR common units;
	•	the CCR Merger is subject to conditions, including certain conditions that may not be satisfied or completed on a timely basis, if at all. Failure to complete the CCR Merger could have a material and adverse effect on us and, even if completed, the CCR Merger may not achieve some or all of the anticipated benefits;
	•	~~we may incur transaction-related costs in connection with the proposed CCR Merger;~~
	•	~~we are subject to provisions under the Merger Agreement that, in specified circumstances, could require us to pay a termination fee and to be responsible for CCR's expenses;~~
	•	~~financial projections relating to the combined company after the CCR Merger may not be achieved;~~
	•	~~CEIX and CCR may be targets of securities class action and derivative lawsuits, which could result in substantial costs and may delay or prevent the completion of the CCR Merger;~~
	•	~~CEIX and CCR may not achieve the net benefits from the CCR Merger in the near term;~~
	•	~~the CCR Merger may not be accretive to operating earnings and may cause dilution to CEIX's earnings per share, which may negatively affect the market price of CEIX common stock;~~
	•	following the merger, approximately 22.0% of the total voting power of CEIX common stock will be owned by CCR common unitholders and, as a result, CEIX's current shareholders may experience significant dilution;
	•	~~the effects the COVID-19 pandemic has on our business and results of operations and on the global economy;~~

•

a restructuring of liabilities of Murray Energy as a result of its bankruptcy may result in the Company becoming responsible for certain liabilities that Murray Energy assumed from our former parent in 2013;

•

deterioration in economic conditions in any of the industries in which our customers operate may decrease demand for our products, impair our ability to collect customer receivables and impair our ability to access capital;

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	•	volatility and wide fluctuation in coal prices based upon a number of factors beyond our control including oversupply relative to the demand available for our products, weather and the price and availability of alternative fuels;
	•	the effects the COVID-19 pandemic has on our business and results of operations and on the global economy;

•

an extended decline in the prices we receive for our coal affecting our operating results and cash flows;

•

significant downtime of our equipment or inability to obtain equipment, parts or raw materials;

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decreases in the availability of, or increases in the price of, commodities or capital equipment used in our coal mining operations;

•

our customers extending existing contracts or entering into new long-term contracts for coal on favorable terms;

•

our reliance on major customers;

•

our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts;

•

our inability to acquire additional coal reserves that are economically recoverable;

•

decreases in demand and changes in coal consumption patterns of electric power generators;

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the availability and reliability of transportation facilities and other systems, disruption of rail, barge, processing and transportation facilities and other systems that deliver our coal to market and fluctuations in transportation costs;

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a loss of our competitive position because of the competitive nature of coal industries, or a loss of our competitive position because of overcapacity in these industries impairing our profitability;

•

foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad;

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recent action and the possibility of future action on trade made by U.S. and foreign governments;

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the risks related to the fact that a significant portion of our production is sold in international markets;

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coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions;

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the impact of potential, as well as any adopted, regulations to address climate change, including any relating to greenhouse gas emissions, on our operating costs as well as on the market for coal;

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the effects of litigation seeking to hold energy companies accountable for the effects of climate change;

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the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our coal operations;

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the risks inherent in coal operations, including being subject to unexpected disruptions caused by adverse geological conditions, equipment failures, delays in moving out longwall equipment, railroad derailments, security breaches or terroristic acts and other hazards, delays in the completion of significant construction or repair of equipment, fires, explosions, seismic activities, accidents and weather conditions;

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failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;

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failure to obtain adequate insurance coverages;

•

~~operating~~substantially all of our operations being located in a single geographic area;

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the effects of coordinating our operations with oil and natural gas drillers and distributors operating on our land;

•

our inability to obtain financing for capital expenditures on satisfactory terms;

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the effects of receiving low sustainability scores or high risk ratings associated with ESG assessments conducted by independent third parties, which potentially results in the exclusion of our securities from consideration by certain investment funds and a negative perception by investors;

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the effect of new or existing tariffs and other trade measures;

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our inability to find suitable acquisition targets or integrating the operations of future acquisitions into our operations;

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obtaining, maintaining and renewing governmental permits and approvals for our coal operations;

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the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down our operations;

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the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal operations;

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the effects of asset retirement obligations and certain other liabilities;

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uncertainties in estimating our economically recoverable coal reserves;

•

the outcomes of various legal proceedings, including those which are more fully described herein;

•

defects in our chain of title for our undeveloped reserves or failure to acquire additional property to perfect our title to coal rights;

•

exposure to employee-related long-term liabilities;

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the risk of our debt agreements, our debt and changes in interest rates affecting our operating results and cash flows;

•

the effects of hedging transactions on our cash flow;

•

~~the effect of our affiliated company credit agreement on our cash flows;~~

•

failure by one or more of the third parties to satisfy certain liabilities it acquired from our former parent, or failure to perform its obligations under various arrangements, which our former parent guaranteed and for which we have indemnification obligations to our former parent;

•

information theft, data corruption, operational disruption and/or financial loss resulting from a terrorist attack or cyber incident;

•

certain provisions in our multi-year coal sales contracts may provide limited protection during adverse economic conditions, and may result in economic penalties or permit the customer to terminate the contract;

•

the potential failure to retain and attract qualified personnel of the Company and a possible increased reliance on third party contractors as a result;

•

~~we may not receive distributions from the Partnership;~~

•

failure to maintain effective internal controls over financial reporting;

•

~~certain risks related to our separation from our former parent;~~

•

~~a determination by the Internal Revenue Service that the distribution or certain related transactions should be treated as a taxable transaction;~~

•

uncertainty with respect to the Company’s common stock, potential stock price volatility and future dilution;

•

the consequences of a lack of, or negative, commentary about us published by securities analysts and media;

•

uncertainty regarding the timing of any dividends we may declare;

•

uncertainty as to whether we will repurchase shares of our common stock or outstanding debt securities;

•

restrictions on the ability to acquire us in our certificate of incorporation, bylaws and Delaware law and the resulting effects on the trading price of our common stock;

•

inability of stockholders to bring legal action against us in any forum other than the state courts of Delaware; and

•

other unforeseen factors.

The above list of factors is not exhaustive or necessarily in order of importance. Additional information concerning factors that could cause actual results to differ materially from those in forward-looking statements include those discussed under “Risk Factors” elsewhere in this ~~report.~~report and the other filings we make with the SEC. The Company disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no material changes to the Company's exposures to market risk since December 31, ~~2019.~~2020.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

CONSOL Energy, under the supervision and with the participation of its management, including CONSOL Energy's principal executive officer and principal financial officer, evaluated the effectiveness of the Company's “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, CONSOL Energy's principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures are effective as of ~~September 30, 2020~~March 31, 2021 to ensure that information required to be disclosed by CONSOL Energy in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by CONSOL Energy in such reports is accumulated and communicated to CONSOL Energy's management, including CONSOL Energy's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

During the fiscal quarter covered by this Quarterly Report on Form 10-Q, there were no changes in the Company's internal controls over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act, that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our operations are subject to a variety of risks and disputes normally incidental to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. However, we are not currently subject to any material ~~litigation. Refer to~~litigation, except as disclosed in Note 14 - Commitments and Contingent Liabilities in the Notes to the Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q, incorporated herein by this reference.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this quarterly report, including the risk factor set forth below, you should carefully consider the factors described in “Part 1 - Item 1A. Risk Factors” of CONSOL Energy's ~~2019~~2020 Form ~~10-K, as updated by any subsequent Form 10-Qs and the risk factors set forth below.~~10-K. These described risks are not the only risks the Company faces. Additional risks and uncertainties not currently known to CONSOL Energy or that the Company currently deems to be immaterial also may materially adversely affect CONSOL Energy's business, financial condition and/or operating results.

~~Risks Related to the Merger of CEIX and CCR~~

The number of shares of CEIX common stock that the holders of CCR common units may receive in the pending merger between CEIX and CCR (the CCR Merger) is based on a fixed exchange ratio and will not be adjusted in the event of any change in the price of either shares of CEIX common stock or CCR common units.

On October 22, 2020, CEIX, Transformer LP Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of CEIX (Holdings), Transformer Merger Sub LLC, a Delaware limited liability company and a wholly-owned subsidiary of Holdings (Merger Sub), CCR and the General Partner entered into an Agreement and Plan of Merger (the Merger Agreement), pursuant to which Merger Sub will merge with and into CCR, with CCR surviving as an indirect, wholly-owned subsidiary of CEIX (the CCR Merger).

Under the terms of the Merger Agreement, at the effective time of the CCR Merger, (i) each outstanding common unit representing a limited partner interest in CCR (each, a “CCR Common Unit”) other than CCR Common Units owned by CEIX and its subsidiaries (each, a “Public Common Unit”) will be converted into the right to receive, subject to adjustment as described in the Merger Agreement, 0.73 shares of common stock, par value $0.01 per share, of CEIX (the “CEIX Common Stock” and the shares of CEIX Common Stock to be issued in the Merger, the “Merger Consideration”); and (ii) each of the outstanding phantom units and any other awards relating to a CCR Common Unit issued under a CCR Long-Term Incentive Plan (as defined in the Merger Agreement), whether vested or not vested, will become fully vested and will be automatically converted into the right to receive, with respect to each CCR Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights). Except for the incentive distribution rights representing limited partner interests in CCR, which will be automatically canceled immediately prior to the effective time of the Merger for no consideration in accordance with the Third Amended and Restated Agreement of Limited Partnership of CCR, dated November 28, 2017 (the “CCR Agreement”), the limited partner interests in CCR owned by CEIX and its subsidiaries immediately prior to the effective time of the Merger will remain outstanding as limited partner interests in the surviving entity. The economic general partner interest in CCR will be converted into a non-economic general partner interest in the surviving entity, and the General Partner will continue as the sole general partner of the surviving entity.

~~The market value of the merger consideration that CCR unitholders will receive in the CCR Merger will~~We depend on the ~~trading price~~services of CEIX common stock. The exchange ratio set forth in the CCR Merger Agreement that specifies the number of shares of CEIX common stock that CCR unitholders will receive as consideration in the CCR Merger is fixed at 0.73. This means that there is no mechanism contained in the CCR Merger Agreement that would adjust the number of shares of CEIX common stock that CCR unitholders will receive as the Merger Consideration based onkey executives and any ~~decreases or increases in the trading price of CEIX common stock. Stock price changes may result from a variety of factors (many of which are beyond CEIX's or CCR's control), including:~~

	•	~~changes in CEIX's and CCR's business, operations and prospects or market assessments thereof;~~
	•	~~interest rates, general market, industry and economic conditions and other factors generally affecting the price of CEIX common stock; and~~

•

~~federal, state and local legislation, governmental regulation and legal developments in the businesses and industry in which CEIX and CCR operate.~~

Because the CCR Merger will be completed after the special meeting of holders of CEIX common stock, at the time of the meeting, CCR unitholders will not know the exact market value of CEIX common stock that they will receive upon completion of the CCR Merger. If the price of CEIX common stock at the closing of the CCR Merger is less than the price of CEIX common stock on the date on which the CCR Merger Agreement was signed, then the market value of the Merger Consideration received by CCR unitholders will be less than contemplated at the time the CCR Merger Agreement was signed.

~~Table of Contents~~

~~The CCR Merger is subject~~inability to ~~conditions, including certain conditions that may not be satisfied or completed on a timely basis, if at all. Failure to complete the CCR Merger could have a material~~attract and ~~adverse effect on us and, even if completed, the CCR Merger may not achieve some or all of the anticipated benefits.~~

Completion of the CCR Merger is subject to certain customary conditions, including, among others: (i) approval of the CEIX Stock Issuance by a majority of votes cast at a special meeting of holders of shares of CEIX Common Stock; (ii) approval by a majority of the outstanding CCR Common Units; (iii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement; (iv) the effectiveness of a registration statement on Form S-4 relating to the shares of CEIX Common Stock to be issued as Merger Consideration; (v) approval for listing on the New York Stock Exchange of the shares of CEIX Common Stock to be issued as Merger Consideration; (vi) subject to specified materiality standards, the accuracy of certain representations and warranties of each party; and (vii) compliance by each party in all material respects with its covenants. These and other conditions to the closing of the CCR Merger may not be fulfilled in a timely manner or at all, and, accordingly, the CCR Merger may be delayed or may not be completed.

If the CCR Merger is not completed, CEIX's ongoing businesses or the price of CEIX Common Stock or the price of CCR Common Units (of which CEIX owns approximately 60.7 percent) may be adversely affected and, without realizing any of the benefits of having completed the CCR Merger, we will be subject to a number of risks, including the following:

	•	we will be required to pay our costs relating to the CCR Merger, such as legal, accounting and financial advisory expenses or under certain circumstances to pay a termination fee to CCR, whether or not the CCR Merger is completed;
	•	~~time and resources committed by our management to matters relating to the CCR Merger could otherwise have been devoted to pursuing other beneficial opportunities; and~~

•

~~the market price of CEIX Common Stock or CCR Common Units could decline to the extent that the current market price reflects a market assumption that the CCR Merger will be completed.~~

~~In addition, even if completed, there can be no assurance that the CCR Merger will deliver the benefits anticipated by us.~~

~~We and CCR may incur transaction-related costs in connection with the proposed CCR Merger.~~

We and CCR each expect to incur a number of non-recurring transaction-related costs associated with completing the proposed CCR Merger. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, filing fees, proxy solicitation costs and printing costs. Many of the expenses that will be incurred are, by their nature, difficult to estimate accurately at the present time.

~~We are subject to provisions under the Merger Agreement that, in specified circumstances, could require us to pay a termination fee and to be responsible for CCR's expenses.~~

The Merger Agreement provides for certain termination rights for both CEIX and CCR. The Merger Agreement provides that upon termination of the Merger Agreement under certain circumstances, CEIX will be obligated to reimburse CCR for its expenses in an amount not to exceed $3.5 million. The Merger Agreement also provides that upon termination of the Merger Agreement under certain circumstances, CCR will be obligated to reimburse CEIX for its expenses in an amount not to exceed $3.5 million.

~~Financial projections relating to the combined company after the CCR Merger may not be achieved.~~

In connection with the proposed CCR Merger, we and CCR have prepared and considered, among other things, internal financial forecasts for CEIX and CCR, respectively. These forecasts speak only as of the date made and will not be updated. These financial projections were not provided with a view to public disclosure, are subject to significant economic, competitive, industry and other uncertainties and may not be achieved in full, at all or within projected time frames. In addition, the failure of our businesses to achieve projected resultsretain key management personnel could have a material adverse effect on our ~~share~~business.

Our future success depends upon the continued services of our executive officers, including our Chief Executive Officer and Chief Financial Officer, who have critical experience and relationships in the coal industry that we rely on to implement our business plan and growth strategy. Our ability to retain senior management has in the past been, and may in the future be, impacted by volatility in commodity prices and uneven business performance, which have negatively impacted our stock price, and therefore, our ability to use equity compensation as a retention tool. Additionally, the recent efforts of certain members of the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, to promote divestment of fossil fuel equities, to encourage the consideration of environmental, social and governance (“ESG”) practices of companies in a manner that negatively affects coal companies and to pressure lenders to limit funding to companies engaged in the extraction of fossil fuel reserves may also negatively impact our ability to attract and retain key management personnel. Accordingly, we have entered into, and may need to enter into additional retention or other arrangements that could be costly to maintain. While we have an employment agreement in place with our chief executive officer and change-in-control agreements with our senior executives, there can be no assurance we will continue to retain their services and we may become subject to significant severance payments if our relationship with these executives is terminated under certain circumstances. Further, turnover, planned or otherwise, in these or other key leadership positions may materially adversely affect our ability to manage our business efficiently and effectively, and such turnover can be disruptive and distracting to management, may lead to additional departures of existing personnel and could have a material adverse effect on our operations and future profitability. Our ability to retain our key management personnel or to identify and attract additional management personnel or suitable replacements should any members of the management team leave or be terminated is dependent on a number of factors, including the competitive nature of the employment market and our industry. Any failure to retain key management personnel or to attract additional or suitable replacement personnel could cause uncertainty among investors, employees, customers and others concerning our future direction and performance and could have a material adverse effect on our business, financial ~~position.~~condition and results of operations.

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~~CEIX and CCR may be targets of securities class action and derivative lawsuits, which could result in substantial costs and may delay or prevent the completion of the CCR Merger.~~

Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements, in an effort to enjoin the relevant merger or seek monetary relief. If CEIX or CCR are subject to such lawsuits related to the CCR Merger Agreement or the CCR Merger, even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. CEIX and CCR cannot predict the outcome of these lawsuits, or others, nor can either company predict the amount of time and expense that will be required to resolve such litigation. An unfavorable resolution of any such litigation surrounding the CCR Merger could delay or prevent its consummation. In addition, the costs of defending the litigation, even if resolved in CEIX's or CCR's favor, could be substantial and such litigation could distract CEIX and CCR from pursuing the consummation of the CCR Merger and other potentially beneficial business opportunities.

CEIX and CCR will incur substantial transaction-related costs in connection with the CCR Merger, including fees paid to legal, financial and accounting advisors, filing fees and printing costs. If the CCR Merger does not occur, the companies will not benefit from these expenses. In addition, CEIX and CCR may not achieve the net benefits from the CCR Merger in the near term.

CEIX and CCR expect to incur a number of non-recurring transaction-related costs associated with completing the CCR Merger. These fees and costs will be substantial. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, filing fees and printing costs. If the CCR Merger does not occur, neither CEIX nor CCR will benefit from these expenses.

~~The CCR Merger may not be accretive to operating earnings and may cause dilution to CEIX's earnings per share, which may negatively affect the market price of CEIX common stock.~~

CEIX currently anticipates that the CCR Merger will be initially dilutive to its forecasted earnings per share on a standalone basis. This expectation is based on preliminary estimates, which may materially change. CEIX may also have additional transaction and integration-related costs, may fail to realize all of the benefits anticipated in the CCR Merger or be subject to other factors that affect preliminary estimates or its ability to realize operational efficiencies. Any of these factors could cause a decrease in CEIX's earnings per share or decrease or delay the expected effect of the CCR Merger and contribute to a decrease in the price of CEIX common stock.

Following the merger, approximately 22.0% of the total voting power of CEIX common stock will be owned by CCR common unitholders. As a result, CEIX's current shareholders may experience significant dilution. In addition, in the future, CEIX may issue common stock to raise cash for its projects, operations, acquisitions or other purposes and may also acquire interests in other companies by using a combination of cash and CEIX common stock or just CEIX common stock.

Any of these events may dilute the ownership interests of the current holders of CEIX common stock, reduce CEIX's earnings per share and have an adverse effect on the price of CEIX common stock. The issuance of these new shares and the sale of additional shares from time to time could have the effect of depressing the market value for CEIX common stock. The increase in the number of shares of CEIX common stock outstanding, and any resulting dilution, may cause holders to sell shares of CEIX common stock or may create the perception that such sales may occur, either of which may adversely affect the market for, and the market value of, CEIX's common stock.

~~Table of Contents~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no repurchases of the Company's equity securities during the three months ended ~~September 30, 2020.~~March 31, 2021. Since the December 2017 inception of the Company's current stock ~~unit~~ and debt repurchase program, CONSOL Energy Inc.'s Board of Directors has approved a ~~$270~~$320 million stock ~~unit~~ and debt repurchase program, which terminates on ~~June 30,~~December 31, 2022. As of ~~November 5, 2020,~~May 4, 2021, approximately ~~$96.3~~$132 million remained available under the stock ~~unit~~ and debt repurchase program. The program does not obligate CONSOL Energy to acquire any particular amount of its common stock ~~notes~~ or ~~units,~~notes, and can be modified or suspended at any time at the Company’s discretion. See Note 1918 - Stock ~~Unit~~ and Debt Repurchases in the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for more information.

Limitation Upon Payment of Dividends

The Indenture and the Senior Secured Credit Facilities include certain covenants limiting the Company's ability to declare and pay dividends.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

ITEM 5. OTHER INFORMATION

~~Approval of Change in Control Severance Agreement~~

On November 4, 2020, the Company and Mitesh Thakkar, the Company’s Chief Financial Officer, entered into a new Change in Control Severance Agreement (the “New CIC Agreement”). The New CIC Agreement supersedes and replaces in its entirety that certain Change in Control Severance Agreement entered into by and between the Company and Mr. Thakkar on January 3, 2020, as previously disclosed on the Company’s Form 8-K filed with the United States Securities and Exchange Commission on January 3, 2020 (the “Original CIC Agreement”).

The New CIC Agreement provides that Mr. Thakkar will receive a base salary in accordance with the Company’s normal payroll practices, that he will be eligible to receive an annual cash bonus in accordance with any of the Company’s applicable bonus plans or programs, that he will be able to participate in any long-term incentive compensation plan maintained by the Company and that he will be entitled to participate in all employee benefit and fringe benefit plans made available by the Company to its executives and key management. The New CIC Agreement further provides for both (i) non-change in control and (ii) change in control cash severance exclusively upon a termination of employment absent “cause,” subject to the following requirements. In the case of a change-in-control scenario, the New CIC Agreement is “double trigger” and Mr. Thakkar is only entitled to cash severance if, following, or in connection with, a change in control, his employment is terminated by the Company absent “cause” or if he resigns due to constructive or good reason termination within ninety days prior to the change-in-control or within two years following the change-in-control. Under the New CIC Agreement, Mr. Thakkar is entitled to receive:

•

his base salary through the date of termination and any annual bonus awarded in accordance with the Company's bonus program but not yet paid in both a change-in-control and non-change-in-control termination absent “cause”;

•

payment of any amounts earned, accrued or owing but not yet paid to Mr. Thakkar as of the date of termination, payable in a lump sum, and any benefits accrued or earned in accordance with the terms of any applicable benefit plans and programs of the Company or any of its affiliates in a non-change-in-control termination absent “cause”;

•

~~a lump sum payment equal to a 1x multiple of his base salary in a non-change-in-control or involuntary termination of employment absent “cause”;~~

•

~~a prorated payment of the executive's annual incentive compensation for the year in which the termination occurs in both a change-in-control and non-change-in-control termination absent “cause”;~~

•

accelerated vesting of any outstanding long-term incentive compensation upon the second trigger related to a change-in-control termination event; provided that any outstanding performance-based awards will be settled at the greater of target or actual performance (if ascertainable at the change-in-control) and prorated for service to the date of the change-in-control;

•

~~continued healthcare for 18 months for both a change-in-control and a non-change-in-control termination absent “cause”; and~~

•

~~outplacement assistance in the form of a cash payment equal to $25,000 in a change-in-control termination only.~~

The terms of the New CIC Agreement are materially consistent with the terms of the Original CIC Agreement except that the New CIC Agreement also provides for the following payments in a change-in-control termination absent “cause”:

•

a lump sum cash payment equal to a 2x multiple of his base salary plus a 2x multiple of his annual incentive pay in an involuntary termination of employment or constructive (or good reason) termination (the multiple for each of the base salary payment and the annual incentive pay payment under the Original CIC Agreement was 1.5x);

•

~~a cash lump sum payment equal to the total amount he would have received under the Company's 401(k) plan assuming he continued employment for a period of 18 months; and~~

•

The New CIC Agreement also provides that in the event Mr. Thakkar’s employment is terminated for Cause, he shall only be entitled to receive: (i) his base salary through the date of termination, (ii) payment for all accrued but unused vacation through the date of termination and (iii) reimbursement for certain reimbursable expenses.

The New CIC Agreement also contains confidentiality, non-competition and non-solicitation obligations for Mr. Thakkar pursuant to which he has agreed not to compete with the Company or any of its affiliates for two years, or to solicit customers or employees for one year following a termination of employment.

No payments or benefits are provided under the New CIC Agreement unless Mr. Thakkar executes, and does not revoke, a written release of any and all claims (other than entitlements under the terms of the New CIC Agreement or which may not be released under applicable law.)

~~Approval of Changes in Timing of Payout under CONSOL Energy Inc. 2020 Short-Term Incentive Compensation (“STIC”)~~

On November 3, 2020, the Compensation Committee (the “Committee”) and the Board of Directors (the “Board”) of the Company authorized an amendment to the 2020 STIC Terms and Conditions, previously approved by the Committee and Board on February 4, 2020.

The 2020 STIC Terms and Conditions previously provided that all earned amounts would be paid in the first quarter of 2021 on or before March 15, 2021 after the Committee evaluates the Company’s performance against pre-established performance metrics for the 2020 performance year and then determines the extent to which applicable performance goals have been met.

The amendment to the 2020 STIC Terms and Conditions delegates authority to the Chief Executive Officer of the Company (“CEO”) to provide for a different payment schedule for individuals participating in the STIC (other than himself). Under the terms of the amendment, the CEO may (but is not obligated) to advance payment of a portion of the annual 2020 STIC payout due each named executive officer (other than the CEO), in an amount not to exceed fifty percent (50%) of the Company’s target performance for the 2020 year. Any advance payment may be made at any time on or before December 31, 2020. Any remaining portion of amounts earned under the 2020 STIC will be paid on or before March 15, 2021, the regularly scheduled payment date. None.

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ITEM 6. EXHIBITS

Exhibits	Description	Method of Filing

~~2.1~~10.1	~~Agreement and Plan of Merger,~~Amendment No. 3, dated as of ~~October 22, 2020, by and among CONSOL Energy Inc., Transformer LP Holdings Inc., Transformer Merger Sub LLC, CONSOL Coal Resources LP and CONSOL Coal Resources GP LLC~~	~~Filed as Exhibit 2.1~~March 29, 2021, to ~~Form 8-K (File No. 001-38147) filed on October 23, 2020~~

~~10.1~~	~~Support~~Credit Agreement, dated as of ~~October 22, 2020, by~~November 28, 2017, among the Company, the various financial institutions from time to time party thereto, PNC Bank, N.A., as administrative agent for the Revolving Lenders and ~~among CONSOL Energy Inc.~~Term A Lenders, Citibank, N.A., as administrative agent for the Term B Lenders and ~~CONSOL Coal Resources LP~~PNC Bank, N.A., as collateral agent for the Lenders and the other Secured Parties referred to therein	Filed as Exhibit 10.1 to Form 8-K (File No. 001-38147) filed on ~~October 23, 2020~~March 31, 2021

10.2*	~~Letter Agreement between James J. McCaffrey~~Form Notice of Performance-based Phantom Units and CONSOL Mining Company LLC*Terms and Conditions	Filed ~~as Exhibit 10.4 to~~ herewith

10.3*	Form ~~10-Q (File No. 001-38147) filed on August 10, 2020~~Notice of Performance-based Market Share Units and Terms and Conditions	Filed herewith

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

95	Mine Safety and Health Administration Safety Data	Filed herewith

101	Interactive Data File (Form 10-Q for the quarterly period ended ~~September 30, 2020,~~March 31, 2021, furnished in Inline XBRL)	Filed herewith

104	Cover Page Interactive Data File (formatted as Inline XBRL)	Contained in Exhibit 101

*Indicates management contract or compensatory plan or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly ~~authorized, as of the 5th day of November, 2020.~~authorized.



	CONSOL ENERGY INC.


May 4, 2021	By:	/s/ JAMES A. BROCK
		James A. Brock
		Director, Chief Executive Officer and President (Principal Executive Officer)


May 4, 2021	By:	/s/ MITESHKUMAR B. THAKKAR
		Miteshkumar B. Thakkar
		Chief Financial Officer (Principal Financial Officer)


May 4, 2021	By:	/s/ JOHN M. ROTHKA
		John M. Rothka
		Chief Accounting Officer (Principal Accounting Officer)

6549

	*Company and*
	*Restricted*			*Unrestricted*
	*Subsidiaries*			*Subsidiaries*			*Consolidated*
Revenue and Other Income:
Coal Revenue	$	138,359		$	46,016		$	184,375
Terminal Revenue		17,008			0			17,008
Freight Revenue		9,682			3,227			12,909
Miscellaneous Other Income		11,454			9,547			21,001
Gain on Sale of Assets		7,867			59			7,926
Total Revenue and Other Income		184,370			58,849			243,219
Costs and Expenses:
Operating and Other Costs		118,857			34,174			153,031
Depreciation, Depletion and Amortization		33,070			21,889			54,959
Freight Expense		9,682			3,227			12,909
Selling, General and Administrative Costs		8,238			2,879			11,117
Gain on Debt Extinguishment		(1,078	)		0			(1,078	)
Interest Expense, net		13,203			2,520			15,723
Total Costs and Expenses		181,972			64,689			246,661
Earnings (Loss) Before Income Tax		2,398			(5,840	)		(3,442	)
Income Tax Expense		5,918			0			5,918
Net Loss		(3,520	)		(5,840	)		(9,360	)
Less: Net Loss Attributable to Noncontrolling Interest		(2,136	)		0			(2,136	)
Net Loss Attributable to CONSOL Energy Inc. Shareholders	$	(1,384	)	$	(5,840	)	$	(7,224	)

Balance Sheet at December 31, 2019:

	*Company and*
	*Restricted*			*Unrestricted*
	*Subsidiaries*			*Subsidiaries*		*Consolidated*
ASSETS
Current Assets:
Cash and Cash Equivalents	$	79,717		$	576	$	80,293
Accounts and Notes Receivable
Trade Receivables, net		0			131,688		131,688
Other Receivables, net		39,412			1,572		40,984
Inventories		41,478			12,653		54,131
Prepaid Expenses and Other Assets		25,181			5,752		30,933
Total Current Assets		185,788			152,241		338,029
Property, Plant and Equipment:
Property, Plant and Equipment		4,023,282			984,898		5,008,180
Less-Accumulated Depreciation, Depletion and Amortization		2,344,777			571,238		2,916,015
Total Property, Plant and Equipment - Net		1,678,505			413,660		2,092,165
Other Assets:
Deferred Income Taxes		103,505			0		103,505
Right of Use Asset - Operating Leases		56,937			15,695		72,632
Other, net		74,015			13,456		87,471
Total Other Assets		234,457			29,151		263,608
TOTAL ASSETS	$	2,098,750		$	595,052	$	2,693,802
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable	$	79,140		$	27,083	$	106,223
Accounts (Recoverable) Payable - Related Parties		(1,419	)		1,419		0
Current Portion of Long-Term Debt		45,020			5,252		50,272
Other Accrued Liabilities		196,314			39,455		235,769
Total Current Liabilities		319,055			73,209		392,264
Long-Term Debt:
Long-Term Debt, Related Party		(148,156	)		148,156		0
Long-Term Debt		653,802			0		653,802
Finance Lease Obligations		7,391			1,645		9,036
Total Long-Term Debt		513,037			149,801		662,838
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions		432,496			0		432,496
Pneumoconiosis Benefits		196,114			6,028		202,142
Asset Retirement Obligations		239,410			10,801		250,211
Workers' Compensation		57,583			3,611		61,194
Salary Retirement		49,930			0		49,930
Operating Lease Liability		43,906			11,507		55,413
Other		14,134			785		14,919
Total Deferred Credits and Other Liabilities		1,033,573			32,732		1,066,305
TOTAL LIABILITIES		1,865,665			255,742		2,121,407
Total CONSOL Energy Inc. Stockholders’ Equity		95,889			339,310		435,199
Noncontrolling Interest		137,196			0		137,196
TOTAL LIABILITIES AND EQUITY	$	2,098,750		$	595,052	$	2,693,802

	Nine Months Ended
	September 30,
(in millions)	2020			2019		Variance
Revenue:
Coal Revenue	$	542		$	985	$	(443	)
Freight Revenue		19			14		5
Miscellaneous Other Income		41			14		27
Total Revenue and Other Income		602			1,013		(411	)
Cost of Coal Sold:
Operating Costs		381			642		(261	)
Depreciation, Depletion and Amortization		121			128		(7	)
Total Cost of Coal Sold		502			770		(268	)
Other Costs:
Other Costs		43			15		28
Depreciation, Depletion and Amortization		24			8		16
Total Other Costs		67			23		44
Freight Expense		19			14		5
Selling, General and Administrative Costs		31			50		(19	)
Interest Expense, net		1			—		1
Total Costs and Expenses		620			857		(237	)
(Loss) Earnings Before Income Tax	$	(18	)	$	156	$	(174	)