IMPORTANT DEFINITIONS REFERENCED IN THIS QUARTERLY REPORT

Unless the context otherwise requires:

PART I : FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(unaudited)

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

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(unaudited)

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

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

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

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

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

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)

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

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

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

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 810-0301 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 months ended March 31, 20212022 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, 20202021 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, 20202021.

All dollar amounts discussed in these Notes to Consolidated Financial Statements are in thousands of U.S. dollars, except for per unit amounts, and unless otherwise indicated.

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 January 2021,March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 20212022-0102 - Reference Rate ReformFinancial Instruments—Credit Losses (Topic 848326) to clarify. The amendments in this update eliminate the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments in this update require 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 ratedisclose current-period gross writeoffs by year of origination for margining, discounting, or contract price alignment that is modified as a resultfinancing receivables and net investments in leases within the scope of reference rate reform. AmendmentsSubtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The amendments in this Update toupdate are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Management is currently evaluating the expedients and exceptions in Topic 848 capture the incremental consequencesimpact of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. CONSOL Energy adopted this guidance, during thebut does threenot months ended March 31, 2021, and there was noexpect this update to have a material impact on the Company's financial statements.

In March 2020,October 2021, the FASB issued ASU 20202021-0408 - Reference Rate ReformBusiness Combinations (Topic 848805) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.. The amendments in this Update provide optional guidance forupdate apply to all entities that enter into a limited periodbusiness combination within the scope 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.Subtopic 805-10, Business Combinations—Overall. The amendments in this Update apply only to contracts, hedging relationships,update require that an entity (acquirer) recognize and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The amendments in this Updateupdate do not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with Topic 606. The amendments in this update are effective for all entities as of March 12, 2020 throughfiscal years beginning after December 31, 2022.15, 2022, An entity may elect to applyincluding interim periods within those fiscal years. Management is currently evaluating the amendments for contract modifications by Topic or Industry Subtopic asimpact 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. CONSOL Energy adopted this guidance, during thebut does threenot months ended March 31, 2021, and there was noexpect this update to have a material impact on the Company's financial statements.

In January 2020,May 2021, the FASB issued ASU 20202021-0104 - Investments - Equity SecuritiesEarnings Per Share (Topic 321260), Investments - Equity MethodDebt—Modifications and Joint VenturesExtinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 323718), and Derivatives and Hedging (TopicHedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in this Update clarify certain interactions betweenupdate affect all entities that issue freestanding written call options that are classified in equity. Specifically, the guidanceamendments affect those entities when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. The amendments that relate to accountthe recognition and measurement of EPS for certain equity securities under Topic 321, the guidance to account for investments under the equity methodmodifications or exchanges of accountingfreestanding equity-classified written call options affect entities that present EPS in Topic 323, andaccordance with the guidance in Topic 815,260, 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.Earnings Per Share. The amendments in this Updateupdate are effective for fiscal years beginning after December 15, 2020,2021, andincluding interim periods within those fiscal years. Early adoption is permitted. CONSOL EnergyThe Company adopted this guidance duringin the three months ended March 31, 2021,2022, and there was no material impact on the Company's financial statements.

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 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 also 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 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 are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. 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.

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 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, as applicable, 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:

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

*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.

As of March 31, 20212022, CONSOL Energy has 500,000 shares of preferred stock noneauthorized, NaN 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 disclosedCertain amounts in Note 16 - Segment Information. As a result, certain reclassifications of 2020 segment informationprior periods have been madereclassified to conform towith the 2021 presentation. These reclassificationsreport classifications of the current period, including the reclassification of the current portion of the Company's commodity derivatives liability, previously included in Other Accrued Liabilities on the Consolidated Balance Sheets. This reclassification had no effect on previously reported total assets, net income, stockholders' equity or cash flows from operating activities.

NOTE 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 not2—REVENUE 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) and (ii) ACNR Holdings, Inc. to fully and finally resolve the disputes raised in the litigation captioned CONSOL Energy Inc. v Murray Energy Holdings Co., et al., Adversary Case 2:20-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. The underlying agreements and compromises, which have been memorialized in definitive documentation, were treated as a single, integrated transaction. As of March 31,2021, this single, integrated transaction resulted in $4,895 of Other Receivables, net, and $22,766 of Other Assets, net, included in the Consolidated Balance Sheets. As of December 31, 2020, this single, integrated transaction resulted in $4,867 of Other Receivables, net, and $22,055 of Other Assets, net, included in the Consolidated Balance 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:FROM CONTRACTS WITH CUSTOMERS:

The following table disaggregatestables disaggregate 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:

Coal Revenue

The Company has disaggregated its coal revenue, derived from the PAMC and Itmann operations, between domestic and export revenues, as well as industrial, power generation and metallurgical markets. Domestic coal revenue tends to be derived from contracts that typically have a term of one year or longer and the pricing is typically fixed. Export coal revenue tends to be derived from spot or shorter-term contracts with pricing determined closer to the time of shipment or based on a market index; however, the Company has recently begun to secure several long-term export contracts with varying pricing arrangements. Coal revenue derived from the Itmann operations consists primarily of metallurgical coal sales, while coal revenue derived from the PAMC services all markets due to the nature of its coal quality characteristics.

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, the CONSOL Marine Terminalat terminal locations or on occasion, other customer destinations. The Company's coal contract revenue per ton is fixed and determinable based upon either fixed forward pricing or pricing derived from established indices and adjusted for nominal quality adjustments.characteristics. 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 contractspassed and other sales and operating revenue contracts vary in length from short-term to long-term contracts andtypically do not typically have significant financing components.

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 and per ton price fluctuations based on certain coal sales price indices and anticipated payments in lieu of shipments.indices. 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 income. At March 31, 20212022 and December 31, 20202021, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 20212022 and 20202021, 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 earned on a 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 March 31, 20212022 and December 31, 20202021, the Company did not have any capitalized costs to obtain customer contracts on its Consolidated Balance Sheets. As of and for the three months ended March 31, 20212022 and 20202021, 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 goodgoods passes to the customer, or over time when services are provided.

NOTE 4—3—MISCELLANEOUS OTHER INCOME:

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 several 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.

NOTE 5—4—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:

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

The components of Net Periodic Benefit Cost are as follows:

Expenses related to CWP and workers’ compensation are reflected in Operating and Other Costs in the Consolidated Statements of Income.

NOTE 7—6—INCOME TAXES:

The Company recorded its provision for income taxes for the three months ended March 31, 2022 of ($3,522), or 44.2% of earnings before income taxes, based on its annual estimated income tax rate adjusted for discrete items. The effective tax rate for the three months ended March 31, 2022 differs from the U.S. federal statutory rate of 21%, primarily due to $2,295 of discrete tax benefits related to equity compensation, as well as effective tax rate impacts of excess percentage depletion and foreign derived intangible income, partially offset by compensation. 

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.rate. The income tax provision for interim periods is generally determined using an estimate of the Company's annual effective tax rate and adjustedadjusting for discrete items, if any, in the relevant period.items. However, given current and expecteddue to operating activities during the year,in 2021 and considering the significant benefit from excess percentage depletion, estimating a reliable annual effective tax rate has becomewas difficult as small changes into forecasted results cancould 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 iswas 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.period. 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 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 CARES Act increased the amount of deductible interest from 30% of adjusted taxable income to 50% for tax years 2019 and 2020, which generated a cash tax benefit, but also reduced the base of earnings upon which percentage depletion was computed. The effective tax rate for the three months ended March 31, 2020 was 44.6%, which differed from the U.S. federal statutory rate of 21%, primarily due to $339 of discrete income tax chargesexpense related to equity compensation, andas well as the effecteffective tax rate impacts of the CARES Act as noted above,excess percentage depletion, partially offset by the benefit anticipated for excess percentage depletion.compensation.

TheDue to the expectation of taxable income for the year 2022, the Company utilizeshas recognized a benefit of $937 related to the “more likely than not” standard in recognizingrelease of a valuation allowance for state tax benefitnet operating losses in its financial statements. Forannual effective tax rate for the three months ended March 31, 20212022 and the year ended December 31, 2020, the Company did not have any unrecognized tax benefits. .

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 period January 1, 2017 through November 28, 2017. Furthermore, theThe Company is subject to examination for the period November 28, 2017 tax periods 2018through December 31, 2020 2021for federal and state returns.

NOTE 8—7—CREDIT LOSSES:

EffectiveTrade receivables are recorded at the invoiced amount and do January 1, 2020, not bear interest. The Company markets its coal and terminal services to top-performing rail-served power plants in its core market areas. The Company also serves power generation, industrial and metallurgical consumers in international markets. Credit is extended based on an evaluation of a customer's financial condition and a customer's ability to perform its obligations. Trade receivable balances are monitored against approved credit terms. Credit terms are reviewed and adjusted as considered necessary based on changes to a customer's credit profile. If a customer's credit deteriorates, the Company adopted ASU 2016may -013,Financial Instruments - Credit Losses (Topic 326): Measurementreduce credit risk exposure by reducing credit terms, obtaining letters 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 modelobtaining credit insurance, or requiring pre-payment for financial instruments, including tradeshipments.

Other non-trade contractual arrangements consist primarily of overriding royalty agreements and other receivables.financial arrangements between the Company and various counterparties. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses forfollowing table excludes fully reserved 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 earningsassociated with certain transactions defined as other non-trade contractual arrangements in the amount of $3,298, net of $1,109 of income taxes,$8,263 at March 31, 2022 and December 31, 2021, as management believes it is probable that these outstanding balances will not be collected. At March 31, 2022, the allowance for expected credit losses associated with other non-trade contractual arrangements was $12,436 and $3,457, included in Other Receivables, net and Other Noncurrent Assets, net, respectively, on financial assets at the adoption date.

The following table illustratesConsolidated Balance Sheets. At December 31, 2021, the impact of ASC 326.allowance for credit losses associated with other non-trade contractual arrangements was $12,329 and $2,882, included in Other Receivables, net and Other Noncurrent Assets, net, respectively, on the Consolidated Balance Sheets.

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.

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.

NOTE 9—8—INVENTORIES:

Inventory components consist of the following:

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—9—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,Company, sells current and future trade receivables to CONSOL Pennsylvania Coal Company 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 pays other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

At March 31, 2022, the Company's eligible accounts receivable yielded $29,858 of borrowing capacity. At March 31, 2022, the facility had 0 outstanding borrowings and $29,681 of letters of credit outstanding, leaving available borrowing capacity of $177. At December 31, 2021, the Company's eligible accounts receivable yielded $25,197$21,649 of borrowing capacity. At MarchDecember 31, 2021, the facility had 0 outstanding borrowings and $25,500$21,806 of letters of credit outstanding, leaving no0 unused capacity. CONSOL Energy posted $303$157 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. Cash collateral of $303$157 is included in Restricted Cash - Current in the Consolidated Balance Sheets. At December 31, 2020, the Company's eligible accounts receivable yielded $31,868 of borrowing capacity. At December 31, 2020, the facility had 0 outstanding borrowings and $31,218 of letters of credit outstanding, leaving available borrowing capacity of $650. Costs associated with the receivables facility totaled $261$275 and $341$261 for the three months ended March 31, 20212022 and 20202021, 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.

NOTE 11—10—PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

Coal reserves are either owned in fee 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 March 31, 20212022 and December 31, 20202021, property, plant and equipment includes gross assets under finance leases of $74,504$80,225 and $112,334,$80,232, respectively. Accumulated amortization for finance leases was $19,325$36,056 and $56,761$34,036 at March 31, 20212022 and December 31, 20202021, respectively. Amortization expense for assets under finance leases approximated $8,619$6,230 and $4,964$8,619 for the three months ended March 31, 20212022 and 20202021, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying Consolidated Statements of Income.

NOTE 12—11—OTHER ACCRUED LIABILITIES: