SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Delaware		82-1954058
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1000 CONSOL Energy Drive, Suite 100

Canonsburg, PA15317-6506

~~(724) 485-3300~~(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.

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).

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 filero☒ Accelerated filer o☐ Non-accelerated filer x☐ Smaller reporting company o ☐Emerging growth company o☐

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. o☐

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

CONSOL Energy Inc. had ~~27,778,006~~25,901,275 shares of common stock, $0.01 par value, outstanding at October ~~15, 2018.~~



		~~Page~~
	Part I. Financial Information	Page

Item 1.	Financial Statements
	Consolidated Statements of Income for the three and nine months ended September 30, ~~2018~~2019 and ~~2017~~2018	54
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, ~~2018~~2019 and ~~2017~~2018	65
	Consolidated Balance Sheets at September 30, ~~2018~~2019 and December 31, ~~2017~~2018	76
	Consolidated Statement of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2018	98
	Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2018~~2019 and ~~2017~~2018	10
	Notes to ~~Unaudited~~ Consolidated Financial Statements	11

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3940

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6163

Item 4.	Controls and Procedures	6163

	Part II. Other Information

Item 1.	Legal Proceedings	6364

Item 1A.	Risk Factors	6364

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6364

Item 4.	Mine Safety Disclosures	6364

Item 6.	Exhibits	6465

	Signatures	6566

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)



	Three Months Ended September 30,					Nine Months Ended September 30,
Revenue and Other Income:	2019		2018			2019			2018
Coal Revenue	$	301,542	$	294,797		$	984,665		$	1,016,503
Terminal Revenue	16,303		16,115			50,829			47,995
Freight Revenue	3,599		2,443			14,115			37,774
Miscellaneous Other Income	11,188		10,978			36,674			47,234
Gain (Loss) on Sale of Assets	714		(85		)	1,986			273
Total Revenue and Other Income	333,346		324,248			1,088,269			1,149,779
Costs and Expenses:
Operating and Other Costs	234,849		222,781			718,410			700,778
Depreciation, Depletion and Amortization	54,370		51,242			151,245			155,674
Freight Expense	3,599		2,443			14,115			37,774
Selling, General and Administrative Costs	14,690		18,526			52,901			47,715
Loss on Debt Extinguishment	801		—			25,444			3,149
Interest Expense, net	15,598		20,862			50,240			63,411
Total Costs and Expenses	323,907		315,854			1,012,355			1,008,501
Earnings Before Income Tax	9,439		8,394			75,914			141,278
Income Tax Expense (Benefit)	2,415		(690		)	(243		)	8,527
Net Income	7,024		9,084			76,157			132,751
Less: Net Income Attributable to Noncontrolling Interest	2,684		3,350			14,102			19,447
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	4,340	$	5,734		$	62,055		$	113,304

Earnings per Share:
Total Basic Earnings per Share	$	0.16	$	0.20		$	2.27		$	4.04
Total Dilutive Earnings per Share	$	0.16	$	0.20		$	2.26		$	3.97

Three Months Ended
September 30, Nine Months Ended
September 30,
Revenue and Other Income: 2018 2017 2018 2017
Coal Revenue $ 294,797
$ 279,245
$ 1,016,503
$ 899,400
Terminal Revenue 16,115
15,065
47,995
42,806
Freight Revenue 2,443
21,803
37,774
51,847
Miscellaneous Other Income 10,978
19,713
47,234
52,508
(Loss) Gain on Sale of Assets (85 ) (513 ) 273
13,024
Total Revenue and Other Income 324,248
335,313
1,149,779
1,059,585
Costs and Expenses:
Operating and Other Costs 222,781
229,527
700,778
682,403
Depreciation, Depletion and Amortization 51,242
46,653
155,674
124,914
Freight Expense 2,443
21,803
37,774
51,847
Selling, General and Administrative Costs 18,526
21,180
47,715
58,597
Loss on Debt Extinguishment —
—
3,149
—
Interest Expense, net 20,862
3,862
63,411
11,828
Total Costs and Expenses 315,854
323,025
1,008,501
929,589
Earnings Before Income Tax 8,394
12,288
141,278
129,996
Income Tax (Benefit) Expense (690 ) 3,770
8,527
22,787
Net Income 9,084
8,518
132,751
107,209
Less: Net Income Attributable to Noncontrolling Interest 3,350
790
19,447
10,567
Net Income Attributable to CONSOL Energy Inc. Shareholders $ 5,734
$ 7,728
$ 113,304
$ 96,642

Earnings per Share:
Total Basic Earnings per Share $ 0.20
$ 0.28
$ 4.04
$ 3.46
Total Dilutive Earnings per Share $ 0.20
$ 0.28
$ 3.97
$ 3.46

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

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017		2018		2017		2019			2018		2019			2018
Net Income	$	9,084	$	8,518	$	132,751	$	107,209	$	7,024		$	9,084	$	76,157		$	132,751

Other Comprehensive Income:
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($1,232), ($1,893), ($3,697), ($5,679))	4,177		3,285		12,356		9,855
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($780), ($1,232), ($2,342), ($3,697))									2,457			4,177		7,376			12,356
Unrecognized Loss on Derivatives:
Unrealized Loss on Cash Flow Hedges (Net of tax: $83, $—, $167, $—)									(261		)	—		(525		)	—
Other Comprehensive Income	4,177		3,285		12,356		9,855		2,196			4,177		6,851			12,356

Comprehensive Income	$	13,261	$	11,803	$	145,107	$	117,064	$	9,220		$	13,261	$	83,008		$	145,107

Less: Comprehensive Income Attributable to Noncontrolling Interest	3,346		779		19,444		10,533		2,681			3,346		14,097			19,444

Comprehensive Income Attributable to CONSOL Energy Inc. Shareholders	$	9,915	$	11,024	$	125,663	$	106,531	$	6,539		$	9,915	$	68,911		$	125,663

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

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	(Unaudited)				(Unaudited)
	September 30, 2018		December 31, 2017		September 30, 2019		December 31, 2018
ASSETS
Current Assets:
Cash and Cash Equivalents	$	250,452	$	153,979	$	133,331	$	235,677
Restricted Cash					1,518		29,258
Accounts and Notes Receivable
Trade	78,649		131,545		109,793		87,589
Other Receivables	29,208		36,552		29,204		41,355
Inventories	52,470		53,420		48,839		48,646
Prepaid Expenses and Other Assets	58,123		23,744		34,439		31,430
Total Current Assets	468,902		399,240		357,124		473,955
Property, Plant and Equipment:
Property, Plant and Equipment	4,796,141		4,676,353		4,973,400		4,838,171
Less—Accumulated Depreciation, Depletion and Amortization	2,692,450		2,554,056		2,866,649		2,731,643
Total Property, Plant and Equipment—Net	2,103,691		2,122,297		2,106,751		2,106,528
Other Assets:
Deferred Income Taxes	72,120		75,065		91,772		77,545
Right of Use Asset - Operating Leases					77,411		—
Other	101,215		110,497		90,177		102,699
Total Other Assets	173,335		185,562		259,360		180,244
TOTAL ASSETS	$	2,745,928	$	2,707,099	$	2,723,235	$	2,760,727

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

CONSOL ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	(Unaudited)						(Unaudited)
	September 30, 2018			December 31, 2017			September 30, 2019			December 31, 2018
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable	$	102,401		$	109,100		$	125,320		$	130,930
Current Portion of Long-Term Debt	20,945			22,482			45,215			134,812
Other Accrued Liabilities	249,758			290,627			240,617			226,434
Total Current Liabilities	373,104			422,209			411,152			492,176
Long-Term Debt:
Long-Term Debt	826,777			856,650			677,935			708,536
Capital Lease Obligations	30,234			8,639
Finance Lease Obligations							11,628			25,690
Total Long-Term Debt	857,011			865,289			689,563			734,226
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions	541,373			554,099			427,442			441,246
Pneumoconiosis Benefits	151,676			149,868			164,972			165,001
Asset Retirement Obligations	236,191			228,343			242,816			235,984
Workers’ Compensation	65,346			66,648			59,092			59,742
Salary Retirement	39,921			52,960			54,622			64,172
Operating Lease Liability							66,432			—
Other	18,845			24,042			13,697			16,569
Total Deferred Credits and Other Liabilities	1,053,352			1,075,960			1,029,073			982,714
TOTAL LIABILITIES	2,283,467			2,363,458			2,129,788			2,209,116

Stockholders' Equity:
Common Stock, $0.01 Par Value; 62,500,000 Shares Authorized, 27,815,470 Issued and Outstanding at September 30, 2018; 27,973,281 Issued and Outstanding at December 31, 2017	278			280
Common Stock, $0.01 Par Value; 62,500,000 Shares Authorized, 25,900,785 Issued and Outstanding at September 30, 2019; 27,437,844 Issued and Outstanding at December 31, 2018							259			274
Capital in Excess of Par Value	549,507			552,793			524,896			550,995
Retained Earnings (Deficit)	148,619			(43,713		)
Retained Earnings							245,957			182,148
Accumulated Other Comprehensive Loss	(377,470		)	(305,100		)	(316,626		)	(323,482		)
Total CONSOL Energy Inc. Stockholders' Equity	320,934			204,260			454,486			409,935
Noncontrolling Interest	141,527			139,381			138,961			141,676
TOTAL EQUITY	462,461			343,641			593,447			551,611
TOTAL LIABILITIES AND EQUITY	$	2,745,928		$	2,707,099		$	2,723,235		$	2,760,727

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

CONSOL ENERGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)


	Common Stock			Capital in Excess of Par Value			Retained Earnings (Deficit)			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, 2017	$	280		$	552,793		$	(43,713	)	$	(305,100	)	$	204,260		$	139,381		$	343,641
December 31, 2018																						$	274		$	550,995		$	182,148		$	(323,482	)	$	409,935		$	141,676		$	551,611
(Unaudited)
Net Income	—			—			113,304			—			113,304			19,447			132,751			—			—			14,435			—			14,435			5,868			20,303
Actuarially Determined Long-Term Liability Adjustments (Net of $3,697 Tax)	—			—			—			12,359			12,359			(3		)	12,356
Actuarially Determined Long-Term Liability Adjustments (Net of $781 Tax)																						—			—			—			2,461			2,461			(1		)	2,460
Comprehensive Income	—			—			113,304			12,359			125,663			19,444			145,107			—			—			14,435			2,461			16,896			5,867			22,763
Reclassification of Stranded Tax Effect of Change in Tax Law	—			—			84,729			(84,729		)	—			—			—
Separation Adjustments	—			(1,595		)	—			—			(1,595		)	—			(1,595		)
Issuance of Common Stock	1			(1		)	—			—			—			—			—			2			(2		)	—			—			—			—			—
Retirement of Common Stock (281,272 shares)	(3		)	(5,555		)	(5,701		)	—			(11,259		)	—			(11,259		)
Purchase of CCR Units (77,536 units)	—			(392		)	—			—			(392		)	(993		)	(1,385		)
Amortization of Stock-Based Compensation Awards	—			6,268			—			—			6,268			1,370			7,638			—			7,053			—			—			7,053			397			7,450
Units/Shares Withheld for Taxes	—			(2,011		)	—			—			(2,011		)	(912		)	(2,923		)	—			(3,863		)	—			—			(3,863		)	(880		)	(4,743		)
Distributions to Noncontrolling Interest	—			—			—			—			—			(16,763		)	(16,763		)	—			—			—			—			—			(5,559		)	(5,559		)
September 30, 2018	$	278		$	549,507		$	148,619		$	(377,470	)	$	320,934		$	141,527		$	462,461
March 31, 2019																						$	276		$	554,183		$	196,583		$	(321,021	)	$	430,021		$	141,501		$	571,522
(Unaudited)
Net Income																						—			—			43,280			—			43,280			5,550			48,830
Actuarially Determined Long-Term Liability Adjustments (Net of $781 Tax)																						—			—			—			2,460			2,460			(1		)	2,459
Interest Rate Hedge (Net of ($84) Tax)																						—			—			—			(264		)	(264		)	—			(264		)
Comprehensive Income																						—			—			43,280			2,196			45,476			5,549			51,025
Repurchases of Common Stock (351,443 shares)																						(3		)	(7,053		)	(2,494		)	—			(9,550		)	—			(9,550		)
Purchase of CCR Units (6,884 units)																						—			(28		)	—			—			(28		)	(91		)	(119		)
Amortization of Stock-Based Compensation Awards																						—			2,584			—			—			2,584			341			2,925
Distributions to Noncontrolling Interest																						—			—			—			—			—			(5,560		)	(5,560		)
June 30, 2019																						$	273		$	549,686		$	237,369		$	(318,825	)	$	468,503		$	141,740		$	610,243
(Unaudited)
Net Income																						—			—			4,340			—			4,340			2,684			7,024
Actuarially Determined Long-Term Liability Adjustments (Net of $780 Tax)																						—			—			—			2,460			2,460			(3		)	2,457
Interest Rate Hedge (Net of ($83) Tax)																						—			—			—			(261		)	(261		)	—			(261		)
Comprehensive Income																						—			—			4,340			2,199			6,539			2,681			9,220
Repurchases of Common Stock (1,366,054 shares)																						(14		)	(27,417		)	4,248			—			(23,183		)	—			(23,183		)
Purchase of CCR Units (19,413 units)																						—			(1		)	—			—			(1		)	(249		)	(250		)
Amortization of Stock-Based Compensation Awards																						—			2,630			—			—			2,630			344			2,974
Units/Shares Withheld for Taxes																						—			(2		)	—			—			(2		)	—			(2		)
Distributions to Noncontrolling Interest																						—			—			—			—			—			(5,555		)	(5,555		)
September 30, 2019																						$	259		$	524,896		$	245,957		$	(316,626	)	$	454,486		$	138,961		$	593,447

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands)



	Common Stock			Capital in Excess of Par Value			Retained Earnings (Deficit)			Accumulated Other Comprehensive (Loss) Income			Total CONSOL Energy Inc. Stockholders' Equity			Noncontrolling Interest			Total Equity
December 31, 2017	$	280		$	552,793		$	(43,713	)	$	(305,100	)	$	204,260		$	139,381		$	343,641
(Unaudited)
Net Income	—			—			62,408			—			62,408			8,550			70,958
Actuarially Determined Long-Term Liability Adjustments (Net of $1,281 Tax)	—			—			—			3,999			3,999			(2		)	3,997
Comprehensive Income	—			—			62,408			3,999			66,407			8,548			74,955
Reclassification of Stranded Tax Effect of Change in Tax Law	—			—			84,729			(84,729		)	—			—			—
Separation Adjustments	—			(1,595		)	—			—			(1,595		)	—			(1,595		)
Issuance of Common Stock	1			(1		)	—			—			—			—			—
Repurchases of Common Stock (44,000 shares)	(1		)	(867		)	(417		)	—			(1,285		)	—			(1,285		)
Amortization of Stock-Based Compensation Awards	—			1,488			—			—			1,488			359			1,847
Units/Shares Withheld for Taxes	—			(1,889		)	—			—			(1,889		)	(899		)	(2,788		)
Distributions to Noncontrolling Interest	—			—			—			—			—			(5,587		)	(5,587		)
March 31, 2018	$	280		$	549,929		$	103,007		$	(385,830	)	$	267,386		$	141,802		$	409,188
(Unaudited)
Net Income	—			—			45,162			—			45,162			7,547			52,709
Actuarially Determined Long-Term Liability Adjustments (Net of $1,183 Tax)	—			—			—			4,179			4,179			3			4,182
Comprehensive Income	—			—			45,162			4,179			49,341			7,550			56,891
Repurchases of Common Stock (47,000 shares)	—			(930		)	(1,066		)	—			(1,996		)	—			(1,996		)
Amortization of Stock-Based Compensation Awards	—			2,301			—			—			2,301			507			2,808
Units/Shares Withheld for Taxes	—			(83		)	—			—			(83		)	—			(83		)
Distributions to Noncontrolling Interest	—			—			—			—			—			(5,587		)	(5,587		)
June 30, 2018	$	280		$	551,217		$	147,103		$	(381,651	)	$	316,949		$	144,272		$	461,221
(Unaudited)
Net Income	—			—			5,734			—			5,734			3,350			9,084
Actuarially Determined Long-Term Liability Adjustments (Net of $1,232 Tax)	—			—			—			4,181			4,181			(4		)	4,177
Comprehensive Income	—			—			5,734			4,181			9,915			3,346			13,261
Repurchases of Common Stock (190,272 shares)	(2		)	(3,758		)	(4,218		)	—			(7,978		)	—			(7,978		)
Purchase of CCR Units (77,536 units)	—			(392		)	—			—			(392		)	(993		)	(1,385		)
Amortization of Stock-Based Compensation Awards	—			2,479			—			—			2,479			504			2,983
Units/Shares Withheld for Taxes	—			(39		)	—			—			(39		)	(13		)	(52		)
Distributions to Noncontrolling Interest	—			—			—			—			—			(5,589		)	(5,589		)
September 30, 2018	$	278		$	549,507		$	148,619		$	(377,470	)	$	320,934		$	141,527		$	462,461

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

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

CONSOL ENERGY INC.

NOTES TO ~~UNAUDITED~~ CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

NOTE 1—BASIS OF PRESENTATION:

~~Unless otherwise indicated or except where~~On November 28, 2017, CONSOL Energy was separated from its former parent to become an independent, publicly-traded coal company. As part of the ~~context otherwise requires, references to “we,” “our,” “us,” “our Company,” “the Company” and “CONSOL Energy” refer~~separation, the following assets of the Company's former parent were transferred to CONSOL Energy ~~Inc.~~(collectively, the “Coal Business”): (i) its interest in the Pennsylvania Mining Complex, and certain related coal assets, (ii) its ~~subsidiaries on or after November 28, 2017~~ownership interest in CNX Coal Resources LP, which owns a 25% undivided interest in the PAMC, (iii) the CONSOL Marine Terminal and, ~~to CONSOL Mining Corporation~~(iv) undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and ~~its subsidiaries prior to November 28, 2017, except to~~Illinois basins and certain related coal assets and liabilities. Following the ~~extent of any discussion~~separation, shares of the ~~financial condition, results of operations, cash flows, and other business activities of~~Company's common stock began “regular-way” trading on the ~~Company~~New York Stock Exchange on ~~or prior to~~ November ~~28,~~29, 2017 ~~that relate specifically to~~under the ~~Coal Business, in which case such references shall be to the Predecessor.~~symbol “CEIX”.

Basis of Presentation

The accompanying ~~Unaudited~~ 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 10 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, ~~2018~~2019 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, ~~2017~~2018 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, ~~2017.~~2018.

Basis of Consolidation

The ~~Unaudited~~ Consolidated Financial Statements include the accounts of CONSOL Energy Inc., and its ~~wholly owned~~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 ~~between subsidiaries within the Company~~ have been eliminated in consolidation.

Prior to the separation and distribution, CONSOL Energy did not operate as a separate, standalone entity. The Company's operations were included in ParentCo's financial results. Accordingly, for all periods prior to the separation and distribution, the accompanying Unaudited Consolidated Financial Statements were prepared from ParentCo's historical accounting records and were presented on a standalone basis as if the Company's operations had been conducted independently from ParentCo. Such Unaudited Consolidated Financial Statements include the historical operations that were considered to comprise the Company's businesses, as well as certain assets and liabilities that were historically held at ParentCo's corporate level but were specifically identifiable or otherwise attributable to the Company. ParentCo's net investment in these operations is reflected as Parent Net Investment in the accompanying Unaudited Consolidated Financial Statements. All significant intercompany transactions between ParentCo and the Company were included within Parent Net Investment in the accompanying Unaudited Consolidated Financial Statements.

~~Cost Allocations~~

~~The description and information on cost allocations is applicable for all periods included in the Unaudited Consolidated Financial Statements prior to the separation and distribution.~~

Prior to the completion of the separation and distribution, the Company utilized centralized functions of ParentCo to support its operations, and in return, ParentCo allocated certain of its expenses to the Company. Such expenses represent costs related, but not limited, to treasury, legal, accounting, insurance, information technology, payroll administration, human resources, incentive plans and other services. These costs, together with an allocation of ParentCo overhead costs, are included within the Selling, General and Administrative Costs caption of the Unaudited Consolidated Statements of Income. Where it was possible to specifically attribute such expenses to activities of the Company, amounts have been charged or credited directly to the Company without allocation or apportionment. Allocation of all other such expenses was based on a reasonable reflection of the utilization of service provided or benefits received by the Company during the periods presented on a consistent basis, such as a percentage of total revenue and a percentage of total projected capital expenditures. The Company's management supports the methods used in allocating expenses and believes these methods to be reasonable estimates.

Nevertheless, the Unaudited Consolidated Financial Statements of CONSOL Energy Inc. may not reflect the actual expenses that would have been incurred and may not reflect CONSOL Energy Inc.'s consolidated results of operations, financial position and cash flows had it been a standalone company during the periods prior to the separation and distribution. Actual costs that would have been incurred if CONSOL Energy Inc. had been a standalone company would depend on multiple factors, including organizational structure, capital structure, and strategic decisions made in various areas, including information technology and infrastructure. Transactions between CONSOL Energy Inc. and ParentCo were included as related party transactions in the Unaudited Consolidated Financial Statements and were considered to be effectively settled for cash at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected in the accompanying Unaudited Consolidated Statements of Cash Flows as a financing activity and in the Unaudited Consolidated Balance Sheets as Parent Net Investment.

~~Long-term employee obligations, comprised of pensions, OPEB, CWP and workers' compensation, have been allocated to CONSOL Energy Inc. on the basis of the underlying employees comprising those plans.~~

Prior to the completion of the separation and distribution, all external debt not directly attributable to the ParentCo Coal Business has been excluded from the Unaudited Consolidated Balance Sheets of CONSOL Energy Inc.

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15 - Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40) to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in Update 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements of capitalizing implementation costs incurred to develop or obtain internal-use software. These changes will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management does not expect this update to have a 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 is currently evaluating the impact this guidance may have on the Company’s financial statements.

In August 2018, the FASB issued ASU 2018-13 - Fair Value Measurement (Topic 820) 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 on fair value measurements including the consideration of costs and benefits. These changes will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management ~~is currently evaluating the impact this guidance may have on the Company’s financial statements.~~

In July 2018, the FASB issued ASU 2018-11 - Leases (Topic 842) to assist stakeholders with implementation questions and issues as organizations prepare to adopt the new leasing standard. Under the amendments in Update 2018-11, entities may elect not to recast the comparative periods presented when transitioning to ASC 842 and lessors may elect not to separate lease and nonlease components when certain conditions are met. These changes will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact this guidance may have on the Company’s financial statements.

In June 2018, the FASB issued ASU 2018-07 - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting. The amendments in this update seek to simplify accounting for non-employee share-based payments by clarifying and improving the areas of the overall measurement objective, measurement date, and awards with performance conditions. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management does not expect this update to have a material impact on the Company's financial statements.

In February 2018, the FASB issued ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the Tax Cuts and Jobs Act. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early adoption is permitted. CONSOL Energy adopted the new guidance during the first quarter of 2018 and elected to make the reclassification. As a result, retained earnings increased $84,729 with a corresponding decrease to accumulated other comprehensive loss.

In January 2018, the FASB issued ASU 2018-01 - Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. This Update, if elected, would not require an entity to reassess the accounting treatment of existing land easements not currently accounted for as a lease under Topic 840. Once an entity adopts Topic 842, it should apply that Topic prospectively to

all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this update is permitted for all entities. Management is expecting to adopt this practical expedient and is currently evaluating the impact this guidance may have on the Company’s financial statements.

In November 2016, the FASB issued ASU 2016-18 - Statement of Cash Flows (Topic 230) - Restricted Cash. During the three months ended March 31, 2018, the Company adopted this guidance, which addressed the presentation of several items in the statement of cash flows. Specifically, the guidance identifies nine cash flow items and the sections where they must be presented within the statement of cash flows. Other than the classification of restricted cash, the adoption of this guidance had no impact on the Company's financial statements. This guidance requires that restricted cash be aggregated with cash and cash equivalents in both the beginning-of-period and end-of-period line items at the bottom of the statement of cash flows. Previously, the change in restricted cash between the beginning-of-period and end-of-period was reflected as either an investing, financing, operating, or non-cash activity based on the underlying nature of the transaction. Accordingly, for the accompanying Unaudited Consolidated Statement of Cash Flows for the nine months ended September 30, 2018, the cash and cash equivalents and restricted cash at end of period line item includes $25,862 of restricted cash. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported in the accompanying Unaudited Consolidated Balance Sheet that sums to the cash and cash equivalents and restricted cash at the end of the period presented on the accompanying Unaudited Consolidated Statement of Cash Flows for the nine months ended September 30, 2018:

September 30, 2018 December 31, 2017
Cash and cash equivalents $ 250,452
$ 153,979
Restricted cash* 25,862
—
$ 276,314
$ 153,979

*These amounts are reported in Prepaid Expenses and Other Assets on the accompanying Unaudited Consolidated Balance Sheets.

In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses will be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In May 2019, the FASB updated Topic 326 by issuing ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses - Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The amendments in ~~this Update~~these Updates will be applied using a modified-retrospective approach and, for public entities, are effective for fiscal years beginning after December 15, 2019 and interim periods within those ~~annual periods. Early adoption is permitted for~~ fiscal ~~years beginning after December 15, 2018 and interim periods within those annual periods.~~years. Management does not expect this update to have a material impact on the Company's financial statements.

In 2016, the FASB issued a new lease accounting standard which requires lessees to put most leases on their balance sheets but recognize the expenses in their income statements in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. The ultimate impact of the standard will depend on the Company's lease portfolio as of the adoption date. CONSOL Energy will adopt ASC 842 using a modified retrospective transition method. The Company continues to assess its current population of contracts classified as leases, which will be updated as the lease population changes, continues to evaluate new business processes related to internal controls for leases and is assessing and documenting the accounting impacts related to the new standard. In addition to monitoring FASB activity regarding ASU 2016-02, the Company continues to monitor various non-authoritative groups with respect to implementation issues that could affect its assessment. These changes will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact this guidance may have on the Company’s financial statements.

~~Separation Transaction~~

In December 2016, CNX announced its intent to separate into two independent, publicly-traded companies - an independently traded coal company and an independently traded oil and natural gas exploration and production company focused on Appalachian area natural gas and liquids activities, including production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin.

In anticipation of the separation, CONSOL Energy was originally formed as CONSOL Mining Corporation in Delaware on June 21, 2017 to hold all of ParentCo’s Coal Business, including its interest in the Pennsylvania Mining Complex, and certain related coal assets, including ParentCo’s ownership interest in CNX Coal Resources LP, which owns a 25% undivided interest stake in PAMC, as well as ParentCo's ownership of the CONSOL Marine Terminal and undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and Illinois basins and certain related coal assets and liabilities (the Coal Business). The Registration Statement on Form 10 (as amended) filed by the Company with the SEC describes the Company and the assets and liabilities that comprise the Coal Business that it now owns after completion of the separation and distribution.

The separation occurred on November 28, 2017, through the pro rata distribution by ParentCo of all of the outstanding common stock of CONSOL Mining Corporation to ParentCo’s shareholders. Following the separation and distribution, ParentCo continues to own the Gas Business. In connection with the separation, CONSOL Mining Corporation changed its name to CONSOL Energy Inc. and ParentCo changed its name to CNX Resources Corporation. In addition, CNX Coal Resources LP changed its name to CONSOL Coal Resources LP and its ticker to CCR.

The separation was subject to a number of conditions, including, but not limited to: final approval by ParentCo’s Board of Directors; the continuing validity of the private letter ruling from the Internal Revenue Service regarding certain U.S. federal income tax matters relating to the transaction; receipt of an opinion of legal counsel regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax-free for U.S. federal income tax purposes; and the SEC declaring effective a Registration Statement on Form 10, as amended. The registration statement on Form 10 was declared effective on November 3, 2017.

In connection with the separation and distribution, CONSOL Mining Corporation and ParentCo entered into a separation and distribution agreement on November 28, 2017 that identified the assets of the Coal Business that were transferred to CONSOL Mining Corporation, the liabilities that were assumed and the contracts that were transferred to each of CONSOL Mining Corporation and ParentCo as part of the separation into two companies. The agreement also implemented the legal and structural separation between the two companies. ParentCo and the Company also entered into additional ancillary agreements that govern the relationship between the two companies after the completion of the separation and distribution, and allocate between GasCo and the Company various assets, liabilities and obligations, including, among other things, employee benefits, environmental liabilities, intellectual property, and tax-related assets and liabilities. These additional agreements included a tax matters agreement, employee matters agreement, transition services agreement and certain agreements related to intellectual property.

Earnings per Share

Basic earnings per share are computed by dividing net income attributable to CONSOL Energy Inc. shareholders by the weighted average shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share, except that the weighted average shares outstanding are 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 third quarter of 2018 represents CONSOL Energy's third full quarter as a publicly-traded company.~~

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:



	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2019	2018	2019	2018
Anti-Dilutive Restricted Stock Units	418,924	620	166,650	620
Anti-Dilutive Performance Share Units	56,399	—	—	—
	475,323	620	166,650	620

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Anti-Dilutive Restricted Stock Units 620
—
620
—

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



	For the Three Months Ended				For the Nine Months Ended
Dollars in thousands, except per share data	September 30,				September 30,
	2019		2018		2019		2018
Numerator:
Net Income	$	7,024	$	9,084	$	76,157	$	132,751
Less: Net Income Attributable to Noncontrolling Interest	2,684		3,350		14,102		19,447
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	4,340	$	5,734	$	62,055	$	113,304

Denominator:
Weighted-average shares of common stock outstanding	26,835,297		27,982,538		27,285,511		28,011,488
Effect of dilutive shares	181,693		593,322		195,332		516,527
Weighted-average diluted shares of common stock outstanding	27,016,990		28,575,860		27,480,843		28,528,015

Earnings per Share:
Basic	$	0.16	$	0.20	$	2.27	$	4.04
Dilutive	$	0.16	$	0.20	$	2.26	$	3.97

For the Three Months Ended For the Nine Months Ended
Amounts in thousands, except per share data September 30, September 30,
2018 2017 2018 2017
Numerator:
Net Income $ 9,084
$ 8,518
$ 132,751
$ 107,209
Less: Net Income Attributable to Noncontrolling Interest 3,350
790
19,447
10,567
Net Income Attributable to CONSOL Energy Inc. Shareholders $ 5,734
$ 7,728
$ 113,304
$ 96,642

Denominator:
Weighted-average shares of common stock outstanding 27,982,538
27,967,509
28,011,488
27,967,509
Effect of dilutive shares 593,322
—
516,527
—
Weighted-average diluted shares of common stock outstanding 28,575,860
27,967,509
28,528,015
27,967,509

Earnings per Share:
Basic $ 0.20
$ 0.28
$ 4.04
$ 3.46
Dilutive $ 0.20
$ 0.28
$ 3.97
$ 3.46

In 2017, the earnings per share included on the accompanying Unaudited Consolidated Statements of Income was calculated based on the 27,967,509 shares of CONSOL Energy common stock distributed in conjunction with the completion of the separation and distribution, and is considered pro forma in nature. Prior to November 28, 2017, CONSOL Energy did not have any issued or outstanding common stock. As of September 30, ~~2018,~~2019, CONSOL Energy ~~had~~authorized 500,000 shares of preferred stock, ~~none~~NaN of which were issued or outstanding.

Reclassifications

Certain amounts in prior periods have been reclassified to conform with the report classifications of the current period, including the reclassification of restricted cash, previously included in Prepaid Expenses and Other Assets on the Consolidated Balance Sheets, as well as the reclassification of amortization of debt issuance costs and loss on debt extinguishment within the Operating Activities section of the Consolidated Statements of Cash Flows. These reclassifications had no effect on previously reported total assets, net income or stockholders' equity.

NOTE 2—REVENUE:

The following table disaggregates CONSOL Energy's revenue by major source ~~for~~to depict how the ~~three~~nature, amount, timing and ~~nine months ended September 30, 2018:~~

Three Months Ended Nine Months Ended
September 30, 2018 September 30, 2018
Coal Revenue $ 294,797
$ 1,016,503
Terminal Revenue 16,115
47,995
Freight Revenue 2,443
37,774
Total Revenue from Contracts with Customers $ 313,355
$ 1,102,272

~~ASU 2014-09 - Revenue from Contracts with Customers (Topic 606):~~ On January 1, 2018, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers and all the related amendments (“new revenue standard”) for all contracts using the modified retrospective method. No cumulative adjustment to the opening balance of retained earnings was made as a result of initially applying the new revenue standard. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company does not expect the adoptionuncertainty of the ~~new revenue standard to have a material impact to its net income on an ongoing basis.~~ Company's revenues and cash flows are affected by economic factors:



	Three Months Ended				Nine Months Ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Coal Revenue	$	301,542	$	294,797	$	984,665	$	1,016,503
Terminal Revenue	16,303		16,115		50,829		47,995
Freight Revenue	3,599		2,443		14,115		37,774
Total Revenue from Contracts with Customers	$	321,444	$	313,355	$	1,049,609	$	1,102,272

CONSOL Energy's coal revenue ~~continues to be~~is recognized when title passes to the customer. The Company has determined that each ton of coal represents a separate and distinct performance obligation. 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.

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.

Coal Revenue

Revenues are recognized at a point in time, which is generally when title passes to the customers and the price is fixed and determinable. Generally, title passes when coal is loaded at the central preparation facility and, 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 in addition to a fixed base price per ton. None of the Company’s coal contracts allow for retroactive adjustments to pricing after title to the coal has passed.

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. Also, some of the Company's contracts contain favorable electric power ~~price related~~price-related adjustments, which represent market-driven price adjustments, wherein there is no additional value ~~being~~ 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 immaterial to the Company's net income. At September 30, 2019 and December 31, 2018, the Company ~~does~~did not have any capitalized costs to obtain customer contracts on its ~~Unaudited~~ Consolidated Balance ~~Sheet.~~Sheets. As of and for the three and nine months ended September 30, 2019 and 2018, the Company has not recognized any amortization of previously existing capitalized costs of obtaining customer contracts. Further, the Company has not recognized any 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 ~~throughput~~rateable basis, and performance obligations are considered fulfilled as the services are performed.

CONSOL Marine Terminal does not normally experience material costs of obtaining customer contracts with amortization periods greater than one year. At September 30, 2019 and December 31, 2018, the Company ~~does~~did not have any capitalized costs to obtain customer contracts on its ~~Unaudited~~ Consolidated Balance ~~Sheet.~~Sheets. As of and for the three and nine months ended September 30, 2019 and 2018, 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 as trade receivables and reported separately in the Company's Consolidated Balance Sheets from other contract assets 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 as 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 or service passes to the customer.

NOTE 3—MISCELLANEOUS OTHER INCOME:



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Royalty Income - Non-Operated Coal	$	4,976	$	5,160	$	16,863	$	19,108
Purchased Coal Sales	3,136		2,901		9,052		15,389
Contract Buyout	1,193		—		3,583		350
Interest Income	755		523		2,399		1,591
Rental Income	625		896		1,923		3,066
Property Easements and Option Income	100		1,069		1,529		5,479
Other	403		429		1,325		2,251
Miscellaneous Other Income	$	11,188	$	10,978	$	36,674	$	47,234

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Royalty Income - Non-Operated Coal $ 5,160
$ 3,520
$ 19,108
$ 15,713
Purchased Coal Sales 2,901
3,569
15,389
9,667
Property Easements and Option Income 1,069
1,402
5,479
2,396
Rental Income 896
1,589
3,066
12,722
Interest Income 523
448
1,591
1,495
Contract Buyout —
8,410
—
8,410
Other 429
775
2,601
2,105
Miscellaneous Other Income $ 10,978
$ 19,713
$ 47,234
$ 52,508

NOTE 4—COMPONENTS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

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



	Pension Benefits												Other Post-Employment Benefits
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Service Cost	$	987		$	288		$	2,963		$	863		$	—		$	—		$	—		$	—
Interest Cost	6,275			5,876			18,825			17,628			4,580			4,677			13,740			14,030
Expected Return on Plan Assets	(10,114		)	(10,092		)	(30,343		)	(30,277		)	—			—			—			—
Amortization of Prior Service Credits	(92		)	(126		)	(275		)	(377		)	(601		)	(601		)	(1,804		)	(1,804		)
Amortization of Actuarial Loss	1,490			2,179			4,469			6,537			2,315			4,051			6,946			12,154
Net Periodic Benefit (Credit) Cost	$	(1,454	)	$	(1,875	)	$	(4,361	)	$	(5,626	)	$	6,294		$	8,127		$	18,882		$	24,380

Pension Benefits Other Post-Employment Benefits
Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017 2018 2017 2018 2017
Service Cost $ 288
$ 759
$ 863
$ 2,277
$ —
$ —
$ —
$ —
Interest Cost 5,876
6,121
17,628
18,363
4,677
5,986
14,030
17,958
Expected Return on Plan Assets (10,092 ) (10,596 ) (30,277 ) (31,787 ) —
—
—
—
Amortization of Prior Service Credits (126 ) (60 ) (377 ) (180 ) (601 ) (601 ) (1,804 ) (1,804 )
Amortization of Actuarial Loss 2,179
1,955
6,537
5,865
4,051
5,778
12,154
17,334
Net Periodic Benefit (Credit) Cost $ (1,875 ) $ (1,821 ) $ (5,626 ) $ (5,462 ) $ 8,127
$ 11,163
$ 24,380
$ 33,488

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

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

~~Components~~The components of Net Periodic Benefit Cost are as follows:



	CWP										Workers' Compensation
	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018			2019		2018			2019			2018			2019			2018
Service Cost	$	948	$	1,662		$	2,844	$	4,987		$	1,421		$	1,558		$	4,264		$	4,673
Interest Cost	1,750		1,311			5,250		3,934			646			571			1,939			1,712
Amortization of Actuarial Loss (Gain)	254		(213		)	762		(640		)	(193		)	(20		)	(580		)	(59		)
State Administrative Fees and Insurance Bond Premiums	—		—			—		—			510			675			1,671			1,986
Net Periodic Benefit Cost	$	2,952	$	2,760		$	8,856	$	8,281		$	2,384		$	2,784		$	7,294		$	8,312

CWP Workers' Compensation
Three Months Ended
September 30, Nine Months Ended
September 30, Three Months Ended
September 30, Nine Months Ended
September 30,
2018 2017 2018 2017 2018 2017 2018 2017
Service Cost $ 1,662
$ 1,280
$ 4,987
$ 3,842
$ 1,558
$ 1,569
$ 4,673
$ 4,706
Interest Cost 1,311
1,013
3,934
3,038
571
580
1,712
1,740
Amortization of Actuarial Gain (213 ) (1,908 ) (640 ) (5,724 ) (20 ) (150 ) (59 ) (449 )
State Administrative Fees and Insurance Bond Premiums —
—
—
—
675
609
1,986
1,969
Net Periodic Benefit Cost $ 2,760
$ 385
$ 8,281
$ 1,156
$ 2,784
$ 2,608
$ 8,312
$ 7,966

NOTE 6—INCOME TAXES:

The Company's effective tax rate is based on its estimated full year effective tax rate, comprised of expected statutory tax provision, offset by excess percentage depletion and other discrete tax benefits. The effective tax rate for the ~~three~~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 from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion. The effective tax rate for the nine months ended September 30, 2018 was ~~(8.2)% and~~ 6.0%~~, respectively.~~. The effective tax rate for the ~~three and~~ nine months ended September 30, 2018 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion. The effective tax rate for the three and nine months ended September 30, 2017 was 30.7% and 17.5%, respectively. The effective tax rate for the three and nine months ended September 30, 2017 differs from the U.S. federal statutory rate of 35%, primarily due to the income tax benefit for excess percentage depletion.

On December 22, 2017, the President of the United States signed Public Law 115-97 “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” commonly referred to as the Tax Cuts and Jobs Act (“Tax Bill”). Under U.S. GAAP, the effects of new legislation are recognized upon enactment, which, for federal legislation, is the date the President signs a bill into law. Accordingly, recognition of the tax effects of the Tax Bill is required in the interim and annual periods that include December 22, 2017. The SEC also released Staff Accounting Bulletin 118 on December 22, 2017. This bulletin clarifies certain aspects of ASC 740 and provides a three-step process for applying ASC 740. First, a company must reflect in its financial statements the income tax effects of the Tax Bill on items for which the company can make a complete assessment. Next, a measurement period not to exceed one year is provided for a company to report provisional amounts of the income tax effects of the Tax Bill for items for which the company's assessment is incomplete, but for which it can make a reasonable estimate. A company may adjust provisional amounts as it obtains additional information in subsequent reporting periods. Finally, for items for which a company cannot make a reasonable estimate, a company is not required to report provisional

amounts and will continue to apply ASC 740 based on tax law existing immediately before December 22, 2017. A company is required to report provisional amounts for these items in the first reporting period in which the company is able to make a reasonable estimate of the income tax effects of the Tax Bill.

The Company recorded a deferred tax expense of approximately $58,558 in its financial statements for the period ended December 31, 2017. This impact is related to the reduction of the net deferred tax asset as a result of the federal corporate income tax rate being reduced from 35% to 21% for all periods after December 31, 2017. The Company recognized a tax benefit of $297 related to the Tax Bill in its financial statements for the three and nine months ended September 30, 2018. This benefit is related to finalizing the impact of certain provisions of the Tax Bill during this time period. The Tax Cuts and Jobs Act is a comprehensive tax reform bill containing a number of provisions that either currently or in the future could impact the Company. Examples include the ability to fully expense certain depreciable property and the limitation on the deductibility of business interest expense. As a result, the Company continues to monitor and evaluate all applicable provisions of the Tax Bill during the measurement period.

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the nine months ended September 30, ~~2018~~2019 and the year ended December 31, ~~2017,~~2018, 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.

The Company is subject to taxation in the United States, as well as various states, and Canada, as well as various provinces. Under the provisions of the ~~Tax Matters Agreement signed~~tax matters agreement entered into between the Company and its former parent on November 28, 2017 ~~by and between CONSOL Energy Inc. (Parent) and CONSOL Mining Corporation (Company)~~(the “TMA”), certain subsidiaries of the Company are subject to examination for tax years for the period January 1, 2015 through the nine months ended September 30, ~~2018~~2019 for certain state and foreign returns. Further, the Company is subject to examination for the period November ~~29,~~28, 2017 through the nine months ended September 30, ~~2018~~2019 for federal and certain state returns.

NOTE 7—INVENTORIES:

Inventory components consist of the following:



	September 30, 2019		December 31, 2018
Coal	$	3,974	$	4,642
Supplies	44,865		44,004
Total Inventories	$	48,839	$	48,646

September 30,
2018 December 31,
2017
Coal $ 9,572
$ 11,411
Supplies 42,898
42,009
Total Inventories $ 52,470
$ 53,420

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, ~~and~~ 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 8—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 August 2018, the securitization facility was amended to, among other things, extend the term of the securitization facility for three years ending August 30, 2021.

Pursuant to the securitization facility, CONSOL Thermal Holdings LLC sells current and future trade receivables to CONSOL Pennsylvania Coal Company LLC. CONSOL Marine Terminals LLC and CONSOL Pennsylvania Coal Company LLC ~~sells~~sell and/or ~~contributes~~contribute current and future trade receivables (including receivables sold to CONSOL Pennsylvania Coal Company LLC by CONSOL Thermal Holdings LLC) to CONSOL Funding LLC (the “SPV”). 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 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 other customary fees to the lenders, including a fee on unused commitments equal to 0.60% per annum.

At September 30, ~~2018,~~2019, the Company's eligible accounts receivable yielded ~~$41,188~~$38,384 of borrowing capacity. At September 30, ~~2018,~~2019, the facility had no0 outstanding borrowings and ~~$52,536~~$39,902 of letters of credit outstanding, leaving no0 unused capacity. CONSOL Energy posted ~~$11,348~~$1,518 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. ~~Restricted cash~~Cash collateral of ~~$11,348~~$1,518 is included in ~~Prepaid Expenses and Other Assets~~Restricted Cash in the ~~Unaudited~~ Consolidated Balance Sheets. At December 31, ~~2017,~~2018, the Company's eligible accounts receivable yielded ~~$60,582~~$37,869 of borrowing capacity. At December 31, ~~2017,~~2018, the facility had no0 outstanding borrowings and ~~$60,582~~$52,536 of letters of credit outstanding, leaving no0 unused capacity. CONSOL Energy posted $14,667 of cash collateral to secure the difference in the outstanding letters of credit and the eligible accounts receivable. Cash collateral of $14,667 is included in Restricted Cash in the Consolidated Balance Sheets. Costs associated with the receivables facility totaled ~~$658 thousand~~$344 and ~~$2,184 thousand~~$1,095 for the three and nine months ended September 30, ~~2018.~~2019, respectively, and $658 and $2,184 for the three and nine months ended September 30, 2018, respectively. These costs have been recorded as financing fees which are included in Operating and Other Costs in the ~~Unaudited~~ Consolidated Statements of Income. The Company has not derecognized any receivables due to its continued involvement in the collections efforts.

NOTE 9—PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:



	September 30, 2019		December 31, 2018
Plant and Equipment	$	3,008,945	$	2,890,970
Coal Properties and Surface Lands	863,191		858,153
Airshafts	430,592		419,100
Mine Development	342,706		342,405
Advance Mining Royalties	327,966		327,543
Total Property, Plant and Equipment	4,973,400		4,838,171
Less: Accumulated Depreciation, Depletion and Amortization	2,866,649		2,731,643
Total Property, Plant and Equipment, Net	$	2,106,751	$	2,106,528

September 30,
2018 December 31,
2017
Plant and Equipment $ 2,860,449
$ 2,757,062
Coal Properties and Surface Lands 857,814
857,031
Airshafts 406,726
392,266
Mine Development 344,147
344,139
Advance Mining Royalties 327,005
325,855
Total Property, Plant and Equipment 4,796,141
4,676,353
Less: Accumulated Depreciation, Depletion and Amortization 2,692,450
2,554,056
Total Property, Plant and Equipment, Net $ 2,103,691
$ 2,122,297

Coal reserves are controlled either through fee ownership or 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, ~~2018~~2019 and December 31, ~~2017,~~2018, property, plant and equipment includes gross assets under ~~capital lease~~finance leases of ~~$49,619~~$49,899 and ~~$3,559,~~$49,775, respectively. Accumulated amortization for ~~capital~~finance leases was ~~$12,058~~$27,458 and ~~$2,839~~$15,973 at September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Amortization expense for assets under ~~capital~~finance leases approximated ~~$3,927~~$3,919 and ~~$104~~$3,927 for the three months ended September 30, 2019 and 2018 and $11,753 and $9,236 ~~and $315~~ for the nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying ~~Unaudited~~ Consolidated Statements of Income.

NOTE 10—LEASES:

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842 using the transition option, “Comparatives Under 840 Option,” established by ASU 2018-11, Leases (Topic 842), Targeted Improvements. As allowed under this guidance, the Company elected not to recast the comparative periods presented when transitioning to ASC 842. As most of the Company's leases do not provide an implicit rate, CONSOL Energy has taken a portfolio approach of applying its incremental borrowing rate based on the information available at the adoption date to calculate the present value of lease payments over the lease term. CONSOL Energy has elected the package of practical expedients permitted under the transition guidance within the standard, which allows the Company (1) to not reassess whether any expired or existing contracts are or contain leases, (2) to not reassess the lease classification for any expired or existing leases, and (3) to not reassess initial direct costs for any existing leases. CONSOL Energy has also elected the practical expedient to not evaluate land easements that existed or expired before the Company’s adoption of Topic 842 and the practical expedient to not separate lease and non-lease components; that is, to account for lease and non-lease components in a contract as a single lease component for all classes of underlying assets. Further, the Company made an accounting policy election to keep leases with an initial term of twelve months or less off the balance sheet. CONSOL Energy will recognize those lease payments in the Consolidated Statements of Income over the lease term. For the three and nine months ended September 30, 2019, these short-term lease expenses were not material to the Company's financial statements.

Based on the Company's lease portfolio, the standard had a material impact on the Company’s Consolidated Balance Sheet but did not have a significant impact on the Company’s consolidated net earnings and cash flows. The most significant impact was the recognition of Right of Use (“ROU”) assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. The Company's bank covenants were not affected by this update. The Company recorded operating lease ROU assets and operating lease liabilities of approximately $92 million as of January 1, 2019, primarily related to mining equipment, based on the present value of the future lease payments on the date of adoption.

The Company determines if an arrangement is an operating or finance lease at inception of the applicable lease. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. The ROU asset also consists of any prepaid lease payments, lease incentives received, and costs which will be incurred in exiting a lease. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the interest method of recognition.

The Company has operating leases for mining and other equipment used in operations and office space. Many leases include one or more options to renew, some of which include options to extend, the leases, and some leases include options to terminate or buy out the leases within a set period of time. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for inflation and/or changes in other indexes. Many of the Company's operating lease payments for mining equipment contain a variable component which is calculated based upon production metrics such as feet of advance or raw tonnage mined. While most of the Company's leases contain clauses regarding the general condition of the equipment upon lease termination, they do not contain residual value guarantees.

For the three and nine months ended September 30, 2019, the components of operating lease expense were as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Fixed operating lease expense	$	6,265	$	19,561
Variable operating lease expense	2,860		9,211
Total operating lease expense	$	9,125	$	28,772

Supplemental cash flow information related to the Company's operating leases for the nine months ended September 30, 2019 was as follows:



Cash paid for amounts included in the measurement of operating lease liabilities	$	9,884
ROU assets obtained in exchange for operating lease obligations	—

The following table presents the lease balances within the Consolidated Balance Sheet, weighted average lease term, and the weighted average discount rate related to the Company's operating leases at September 30, 2019:



Lease Assets and Liabilities	Classification
Assets:
Operating Lease ROU Assets	Other Assets	$	77,411

Liabilities:
Current:
Operating Lease Liabilities	Other Accrued Liabilities	$	15,769
Long-Term:
Operating Lease Liabilities	Operating Lease Liabilities	$	66,432
Total Operating Lease Liabilities		$	82,201

Weighted average remaining lease term (in years)		5.07
Weighted average discount rate		5.64		%

CONSOL Energy leases certain owned mining equipment to a third-party under operating leases. At September 30, 2019, the amount of owned equipment included in gross property, plant and equipment was $6,966 and the associated amount of accumulated depreciation was $6,966. At September 30, 2019, scheduled minimum rental payments for operating leases related to this equipment were as follows:



Remainder of 2019		2020		2021		2022		2023		Thereafter		Total
$	311	$	627	$	—	$	—	$	—	$	—	$	938

The Company also enters into finance leases for mining equipment and automobiles. Assets arising from finance leases are included in property, plant and equipment, net and the liabilities are included in current portion of long-term debt and long-term debt in the accompanying Consolidated Balance Sheet.

For the three and nine months ended September 30, 2019, the components of finance lease expense were as follows:



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Amortization of right of use assets	$	3,919	$	11,753
Interest expense	434		1,484
Total finance lease expense	$	4,353	$	13,237

The following table presents the weighted average lease term and weighted average discount rate related to the Company's finance leases as of September 30, 2019:



Weighted average remaining lease term (in years)	1.59
Weighted average discount rate	5.37	%

At September 30, 2019, certain finance leases for mining equipment are subleased to a third-party. The following table represents the minimum payments, including interest, for those finance subleases:



Remainder of 2019		2020		2021		2022		2023		Thereafter		Total
$	925	$	3,699	$	2,157	$	—	$	—	$	—	$	6,781

The following table presents the future maturities of the Company's operating and finance lease liabilities, together with the present value of the net minimum lease payments, at September 30, 2019:



	Finance		Operating
	Leases		Leases
Remainder of 2019	$	3,406	$	8,746
2020	20,222		24,067
2021	6,565		23,134
2022	154		13,341
2023	133		6,504
Thereafter	24		22,073
Total minimum lease payments	30,504		97,865
Less amount representing interest	1,339		15,664
Present value of minimum lease payments	$	29,165	$	82,201

As of September 30, 2019, the Company had no additional significant operating or finance leases that had not yet commenced.

NOTE ~~10—~~11—OTHER ACCRUED LIABILITIES:



	September 30, 2019		December 31, 2018
Subsidence Liability	$	93,202	$	83,532
Accrued Payroll and Benefits	17,144		12,978
Accrued Interest	11,521		6,850
Accrued Other Taxes	3,357		5,050
Litigation	2,640		8,235
Short-Term Incentive Compensation	2,411		6,024
Other	10,167		15,588
Current Portion of Long-Term Liabilities:
Postretirement Benefits Other than Pensions	32,361		32,345
Asset Retirement Obligations	29,413		31,017
Operating Lease Liability	15,769		—
Workers' Compensation	11,846		12,628
Pneumoconiosis Benefits	10,786		12,187
Total Other Accrued Liabilities	$	240,617	$	226,434

September 30,
2018 December 31, 2017
Subsidence Liability $ 90,311
$ 88,027
Accrued Payroll and Benefits 16,045
14,689
Accrued Interest 13,305
10,039
Litigation 9,270
8,197
Accrued Other Taxes 5,164
7,510
Short-Term Incentive Compensation 4,862
4,729
Deferred Revenue 155
6,807
Longwall Equipment Buyout —
22,631
Equipment Lease Rental —
9,865
Other 18,424
23,900
Current Portion of Long-Term Liabilities:
Postretirement Benefits Other than Pensions 37,238
37,464
Asset Retirement Obligations 31,823
30,480
Workers' Compensation 12,369
13,317
Pneumoconiosis Benefits 10,792
12,972
Total Other Accrued Liabilities $ 249,758
$ 290,627

NOTE ~~11—~~12—LONG-TERM DEBT:



	September 30, 2019		December 31, 2018
Debt:
Term Loan B due in September 2024 (Principal of $273,625 and $396,000 less Unamortized Discount of $1,250 and $6,253, 6.55% and 8.53% Weighted Average Interest Rate, respectively)	$	272,375	$	389,747
11.00% Senior Secured Second Lien Notes due November 2025	239,228		274,276
MEDCO Revenue Bonds in Series due September 2025 at 5.75%	102,865		102,865
Term Loan A due in March 2023 (5.80% and 6.78% Weighted Average Interest Rate, respectively)	92,500		73,750
Other Asset-Backed Financing Arrangements Maturing in December 2020 and September 2024, 6.35% Weighted Average Interest Rate and 3.61%, respectively	7,591		—
Advance Royalty Commitments (8.57% Weighted Average Interest Rate)	2,261		2,261
Less: Unamortized Debt Issuance Costs	11,207		16,409
	705,613		826,490
Less: Amounts Due in One Year*	27,678		117,954
Long-Term Debt	$	677,935	$	708,536

September 30,
2018 December 31,
2017
Debt:
Term Loan B due in November 2022 (Principal of $397,000 and $400,000 less Unamortized Discount of $6,653 and $7,853, respectively, 8.25% Weighted Average Interest Rate) $ 390,347
$ 392,147
11.00% Senior Secured Second Lien Notes due 2025 279,476
300,000
MEDCO Revenue Bonds in Series due September 2025 at 5.75% 102,865
102,865
Term Loan A due in November 2021 (6.50% Weighted Average Interest Rate) 73,750
100,000
Advance Royalty Commitments (9.42% Weighted Average Interest Rate) 2,085
2,085
Less: Unamortized Debt Issuance Costs 17,428
21,129
831,095
875,968
Less: Amounts Due in One Year* 4,318
19,318
Long-Term Debt $ 826,777
$ 856,650

* Excludes current portion of ~~Capital~~Finance Lease Obligations of ~~$16,627~~$17,537 and ~~$3,164~~$16,858 at September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

In November 2017, CONSOL Energy entered into a revolving credit facility 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 (the “amendment”) 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. As a result, the principal amount outstanding under the TLA Facility was $100 million and the principal amount outstanding under the TLB Facility was $275 million. 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 reduced the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility, and by 150 basis points on the

TLB Facility. The amendment also extended the maturity dates of the Senior Secured Credit Facilities. The maturity date of the Revolving Credit and TLA Facilities ~~mature on~~was extended from November 28, ~~2021.~~2021 to March 28, 2023. The TLB ~~Facility matures on~~Facility's maturity date

was extended from November 28, ~~2022.~~2022 to September 28, 2024. 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~~wholly-owned restricted subsidiaries of the Company (excluding the Partnership and its wholly-owned subsidiaries).

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. CONSOL Energy must maintain a maximum first lien gross leverage ratio covenant of no more than ~~2.25~~2.00 to 1.00, measured quarterly, stepping down to ~~2.00 to 1.00 in March 2019 and~~ 1.75 to 1.00 in March 2020. The maximum first lien gross leverage ratio is calculated as the ratio of Consolidated First Lien Debt to Consolidated EBITDA, excluding the Partnership. The maximum first lien gross leverage ratio was ~~1.29~~1.15 to 1.00 at September 30, ~~2018.~~2019. CONSOL Energy must maintain a maximum total net leverage ratio covenant of no more than ~~3.25~~3.00 to 1.00, measured quarterly, stepping down to ~~3.00 to 1.00 in March 2019 and~~ 2.75 to 1.00 in March 2020. The maximum total net leverage ratio is calculated as the ratio of Consolidated Indebtedness, minus Cash on Hand, to Consolidated EBITDA, excluding the Partnership. The maximum total net leverage ratio was ~~1.63~~1.78 to 1.00 at September 30, ~~2018.~~2019. 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 facilities also include a minimum fixed charge coverage covenant of no less than ~~1.00~~1.10 to 1.00, measured ~~quarterly, stepping up to 1.05 to 1.00 in March 2020 and 1.10 to 1.00 in March 2021.~~quarterly. The minimum fixed charge coverage ratio is calculated as the ratio of Consolidated EBITDA to Consolidated Fixed Charges, excluding the Partnership. 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 minimum fixed charge coverage ratio was ~~2.17~~1.46 to 1.00 at September 30, ~~2018.~~2019.

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 months ended September 30, 2019, CONSOL Energy made the required repayment of approximately $110 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, 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. The amendment reduced the maximum amount of the mandatory annual excess cash flow sweep under the TLB Facility by 25%.

As of September 30, 2019, no amount related to the prepayment of the TLB Facility in connection with the excess cash flow requirement has been classified as Current Portion of Long-Term Debt in the Consolidated Balance Sheets. The amount of excess cash flow is a covenant feature only applicable as of the Company's year-end and calculated as of December 31, ~~2018, no amounts related to the prepayment of the TLB Facility have been classified as Current Portion of Long-Term Debt in the Unaudited Consolidated Balance Sheet~~2019. If this covenant was applicable as of September 30, ~~2018.~~2019, management estimates the repayment under this covenant would be approximately $7 million, subject to fourth quarter performance and other discretionary uses of cash.

At September 30, 2019, the Revolving Credit Facility had 0 borrowings outstanding and $73,732 of letters of credit outstanding, leaving $326,268 of unused capacity. At December 31, 2018, the Revolving Credit Facility had no0 borrowings outstanding and $54,065 of letters of credit outstanding, leaving $245,935 ~~of unused capacity. At December 31, 2017, the Revolving Credit Facility had no borrowings outstanding and $27,426 of letters of credit outstanding, leaving $272,574~~ 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.

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.

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 million 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, $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, respectively.

During the nine months ended September 30, 2018, CONSOL Energy made total payments of $26 million on its outstanding TLA Facility, including accelerated payments of $15 million. The Company also repurchased $21 million of its outstanding 11.00% Senior Secured Second Lien Notes due in 2025 during the nine months ended September 30, 2018. As part of these transactions, $3,149 was included in Loss on Debt Extinguishment on the ~~Unaudited~~ Consolidated Statements of Income for the nine months ended September 30, 2018.

During the nine months ended September 30, 2019, the Company entered into 2 asset-backed financing arrangements related to certain equipment. The equipment, which has an approximate value of $7,591, fully collateralizes the loans.

NOTE ~~12—~~13—COMMITMENTS AND CONTINGENT LIABILITIES:

The Company and ~~ParentCo~~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 ~~ParentCo.~~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 ~~ParentCo~~its former parent relating to the liabilities of the Coal Business that the Company assumed.

The Company ~~(as the owner of the Coal Business following the separation and distribution)~~ 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 ~~as of September 30, 2018~~ 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, ~~2018.~~2019. 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, ~~2018~~2019 is disclosed below when an amount is expressly stated in the lawsuit or claim, which is not often the case.

Fitzwater Litigation: ~~Three~~ NaN nonunion retired coal miners have sued Fola Coal Company LLC, Consolidation Coal Company (“CCC”) and CONSOL of Kentucky Inc. (“COK”) (as well as ~~ParentCo)~~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, Plantiffs’ supplemental motion for class certification was denied on all counts and a scheduling order for the remaining individual claims was set on October 16, 2019. 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~~2 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 ~~ParentCo~~ 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, Plantiffs’ supplemental motion for class certification was denied on all counts and a scheduling order for the remaining individual claims was set on October 16, 2019. The Company believes it has a meritorious defense and intends to vigorously defend this suit.

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.

As part of the separation and distribution, the Company assumed various financial obligations relating to the Coal Business orand agreed to reimburse ~~ParentCo~~its former parent for certain financial guarantees relating to the Coal Business that ~~ParentCo~~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. Coal and other financial guarantees have primarily been provided to support various sales contracts. Other guarantees have been extended to support 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, ~~2018,~~2019, 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 ~~ParentCo~~the Company's former parent on behalf of the Coal Business. 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
	Total Amounts Committed		Less Than 1 Year		1-3 Years		3-5 Years		Beyond 5 Years
Letters of Credit:
Employee-Related	$	65,292	$	40,044	$	25,248	$	—	$	—
Environmental	398		398		—		—		—
Other	47,944		39,150		8,794		—		—
Total Letters of Credit	113,634		79,592		34,042		—		—
Surety Bonds:
Employee-Related	87,174		74,424		12,750		—		—
Environmental	532,027		437,422		94,605		—		—
Other	3,898		3,607		291		—		—
Total Surety Bonds	623,099		515,453		107,646		—		—
Guarantees:
Other	17,928		7,224		9,875		398		431
Total Guarantees	17,928		7,224		9,875		398		431
Total Commitments	$	754,661	$	602,269	$	151,563	$	398	$	431

Amount of Commitment Expiration Per Period
Total Amounts Committed Less Than 1 Year 1-3 Years 3-5 Years Beyond 5 Years
Letters of Credit:
Employee-Related $ 73,383
$ 46,944
$ 26,439
$ —
$ —
Environmental 398
398
—
—
—
Other 32,820
25,704
7,116
—
—
Total Letters of Credit 106,601
73,046
33,555
—
—
Surety Bonds:
Employee-Related 104,033
103,083
950
—
—
Environmental 490,545
484,495
6,050
—
—
Other 4,802
4,605
197
—
—
Total Surety Bonds 599,380
592,183
7,197
—
—
Guarantees:
Other 26,562
8,634
13,860
3,438
630
Total Guarantees 26,562
8,634
13,860
3,438
630
Total Commitments $ 732,543
$ 673,863
$ 54,612
$ 3,438
$ 630

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~~5 of its longwall coal mines in West Virginia and its river operations, to a ~~subsidiary of Murray Energy Corporation.~~third party. As part of the separation and distribution, ~~ParentCo~~the Company's former parent agreed to indemnify the Company and the Company agreed to indemnify ~~ParentCo~~its former parent in each case with respect to guarantees of certain equipment lease obligations that were assumed by ~~Murray Energy.~~the third party. In the event that ~~Murray Energy~~the third party would default on the obligations defined in the agreements, the Company would be required to perform under the guarantees. If the Company would be required to perform, the stock purchase agreement provides various recourse actions. As of September 30, ~~2018,~~2019, 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 ~~the Murray Energy~~these guarantees as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018 is believed to be approximately ~~$30,000~~$22,000 and ~~$35,000,~~$28,000, respectively. At September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the fair value of these guarantees was ~~$818~~$547 and ~~$1,040,~~$734, respectively, and is included in Other Accrued Liabilities on the ~~Unaudited~~ 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.

NOTE ~~13—~~14—DERIVATIVES:

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments, which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective. There is no ineffective portion or amount excluded from effectiveness testing.

The following table presents information related to interest rate contracts entered into by the Company and designated as cash flow hedges:



	September 30, 2019			December 31, 2018
Pay fixed swaps - notional amount	$	350,000		—
Net unrealized loss	$	(525	)	—
Weighted-average maturity period (years)	1.51			—
Weighted-average received rate	—			—
Weighted-average pay rate	—			—

The fair value of the interest rate swaps reflected an unrealized loss of $525 (net of $(167) tax) at September 30, 2019 and $0 at December 31, 2018. The unrealized 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 on cash flow hedges.

At September 30, 2019 and December 31, 2018, the interest rate swap contracts were reflected in the Consolidated Balance Sheets as follows:



	September 30, 2019		December 31, 2018
Current assets:
Other current assets	—		—
Long-term assets:
Other assets	—		—
Current liabilities:
Other current liabilities	$	243	—
Long-term liabilities:
Other liabilities	$	448	—
Total derivatives	$	691	$	—

No gains or losses were recognized in interest expense in the Consolidated Statements of Income, as no interest rate swaps have reached their effective date. During 2020, notional amounts of $150,000 will become effective. In the next 12 months, the Company expects a loss of approximately $(20) to be reclassified into earnings.

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
	September 30, 2019								December 31, 2018
Description	Level 1		Level 2			Level 3			Level 1		Level 2		Level 3
Lease Guarantees	$	—	$	—		$	(547	)	$	—	$	—	$	(734	)
Derivatives ⁽¹⁾	$	—	$	(691	)	$	—		$	—	$	—	$	—

Fair Value Measurements at
September 30, 2018 Fair Value Measurements at
December 31, 2017
Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Murray Energy Guarantees $ —
$ —
$ (818 ) $ —
$ —
$ (1,040 )
(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, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-Term Debt	$	716,820	$	719,361	$	842,899	$	881,711

September 30, 2018 December 31, 2017

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value
Long-Term Debt $ 848,523
$ 905,597
$ 897,097
$ 931,768

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 ~~are~~is not actively traded ~~are~~is valued through reference to the applicable underlying benchmark rate and, as a result, ~~constitute~~constitutes Level 2 fair value measurements.

NOTE ~~14—~~16—SEGMENT INFORMATION:

CONSOL Energy Inc. consists of ~~one~~1 reportable segment: the Pennsylvania Mining Complex. The principal activities of the PAMC are mining, preparation and marketing of thermal coal, sold primarily to power generators. It also includes selling, general and administrative activities, as well as various other activities assigned to the PAMC.

CONSOL Energy Inc.’s Other ~~segment~~division includes revenue and expenses from various corporate and diversified business activities that are not allocated to the PAMC. The diversified business activities include coal terminal operations, closed and idle mine activities, selling, general and administrative activities, as well as various other non-operated activities, none of which are individually significant to the Company.

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



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

Industry segment results for the three months ended September 30, 2018 are:



	PAMC		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	294,797	$	—		$	—	$	294,797	(A)
Terminal Revenue	—		16,115			—		16,115
Freight Revenue	2,443		—			—		2,443
Total Revenue and Freight	$	297,240	$	16,115		$	—	$	313,355
Earnings (Loss) Before Income Tax	$	37,962	$	(29,568	)	$	—	$	8,394
Segment Assets	$	1,891,606	$	854,322		$	—	$	2,745,928
Depreciation, Depletion and Amortization	$	44,236	$	7,006		$	—	$	51,242
Capital Expenditures	$	32,309	$	8,347		$	—	$	40,656

Industry segment results for the ~~three~~nine months ended September 30, ~~2017~~2019 are:


	PAMC		Other			Adjustments and Eliminations		Consolidated			PAMC		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	279,245	$	—		$	—	$	279,245	(A)	$	984,665	$	—		$	—	$	984,665	(A)
Terminal Revenue	—		15,065			—		15,065			—		50,829			—		50,829
Freight Revenue	21,803		—			—		21,803			14,115		—			—		14,115
Total Revenue and Freight	$	301,048	$	15,065		$	—	$	316,113		$	998,780	$	50,829		$	—	$	1,049,609
Earnings (Loss) Before Income Tax	$	21,011	$	(8,723	)	$	—	$	12,288		$	156,029	$	(80,115	)	$	—	$	75,914
Segment Assets	$	1,912,656	$	675,873		$	—	$	2,588,529		$	2,014,381	$	708,854		$	—	$	2,723,235
Depreciation, Depletion and Amortization	$	41,638	$	5,015		$	—	$	46,653		$	136,124	$	15,121		$	—	$	151,245
Capital Expenditures	$	27,157	$	624		$	—	$	27,781		$	117,417	$	14,058		$	—	$	131,475

Industry segment results for the nine months ended September 30, 2018 are:



	PAMC		Other			Adjustments and Eliminations		Consolidated
Coal Revenue	$	1,016,503	$	—		$	—	$	1,016,503	(A)
Terminal Revenue	—		47,995			—		47,995
Freight Revenue	37,774		—			—		37,774
Total Revenue and Freight	$	1,054,277	$	47,995		$	—	$	1,102,272
Earnings (Loss) Before Income Tax	$	220,862	$	(79,584	)	$	—	$	141,278
Segment Assets	$	1,891,606	$	854,322		$	—	$	2,745,928
Depreciation, Depletion and Amortization	$	135,074	$	20,600		$	—	$	155,674
Capital Expenditures	$	81,025	$	15,830		$	—	$	96,855

~~Industry segment results for the nine months ended September 30, 2017 are:~~

PAMC Other Adjustments and Eliminations Consolidated
Coal Revenue $ 899,400
$ —
$ —
$ 899,400
(A)
Terminal Revenue —
42,806
—
42,806

Freight Revenue 51,847
—
—
51,847

Total Revenue and Freight $ 951,247
$ 42,806
$ —
$ 994,053

Earnings (Loss) Before Income Tax $ 131,670
$ (1,674 ) $ —
$ 129,996

Segment Assets $ 1,912,656
$ 675,873
$ —
$ 2,588,529

Depreciation, Depletion and Amortization $ 125,341
$ (427 ) $ —
$ 124,914

Capital Expenditures $ 49,045
$ 1,965
$ —
$ 51,010

For the three and nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, 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,
	2019		2018		2019		2018
Customer A	$	49,772	$	46,727	$	180,014	$	209,968
Customer B	$	95,953	$	84,110	$	358,882	$	181,236
Customer C	$	63,526	$	59,364	$	158,903	$	169,052

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Customer A $ 46,727
* $ 209,968
*
Customer B 84,110
* 181,236
114,451
Customer C 59,364
70,159
169,052
177,948

* Revenues from these customers during the periods presented were less than 10% of the Company’s total sales.

Reconciliation of Segment Information to Consolidated Amounts:



	September 30,
	2019		2018
Segment assets for total reportable business segments	$	2,014,381	$	1,891,606
Segment assets for all other business segments	512,738		506,825
Items excluded from segment assets:
Cash, restricted cash and other investments	104,344		275,377
Deferred tax assets	91,772		72,120
Total Consolidated Assets	$	2,723,235	$	2,745,928

September 30,
2018 2017
Segment assets for total reportable business segments $ 1,891,606
$ 1,912,656
Segment assets for all other business segments 506,825
400,362
Items excluded from segment assets:
Cash and other investments 275,377
86,131
Deferred tax assets 72,120
189,380
Total Consolidated Assets $ 2,745,928
$ 2,588,529

NOTE ~~15—~~17—GUARANTOR SUBSIDIARIES FINANCIAL INFORMATION:

The payment obligations under the ~~$400,000,~~$275,000, Term Loan B due in ~~November 2022,~~September 2024, the $300,000, 11.000% per annum senior notes due November 2025, and the $100,000, Term Loan A due in ~~November 2021~~March 2023 issued by CONSOL Energy are jointly and severally, and also fully and unconditionally, guaranteed by certain subsidiaries of CONSOL Energy. In accordance with positions established by the SEC, the following financial information sets forth separate financial information with respect to the parent, guarantor subsidiaries, CCR, a non-guarantor subsidiary, and the remaining non-guarantor subsidiaries. The principal elimination entries include investments in subsidiaries and certain intercompany balances and transactions. CONSOL Energy, the parent, and a guarantor subsidiary manage several assets and liabilities of all other wholly owned subsidiaries. These include, for example, deferred tax assets, cash and other post-employment liabilities. These assets and liabilities are reflected as parent company or guarantor company amounts for purposes of this presentation.

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



	Parent Issuer		Guarantor			CCR Non-Guarantor		Non-Guarantor		Elimination			Consolidated
Revenue and Other Income:
Coal Revenue	$	—	$	226,157		$	75,385	$	—	$	—		$	301,542
Terminal Revenue	—		16,303			—		—		—			16,303
Freight Revenue	—		2,699			900		—		—			3,599
Miscellaneous Other Income (Loss)	20,578		(4,311		)	1,096		9,701		(15,876		)	11,188
Gain (Loss) on Sale of Assets	717		(3		)	—		—		—			714
Total Revenue and Other Income	21,295		240,845			77,381		9,701		(15,876		)	333,346
Costs and Expenses:
Operating and Other Costs	—		180,488			53,998		363		—			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		—			—		—		—			801
Interest Expense, net	13,739		272			1,587		—		—			15,598
Total Costs and Expenses	14,540		238,593			70,411		363		—			323,907
Earnings Before Income Tax	6,755		2,252			6,970		9,338		(15,876		)	9,439
Income Tax Expense	2,415		—			—		—		—			2,415
Net Income	4,340		2,252			6,970		9,338		(15,876		)	7,024
Less: Net Income Attributable to Noncontrolling Interest	—		—			—		—		2,684			2,684
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	4,340	$	2,252		$	6,970	$	9,338	$	(18,560	)	$	4,340

Balance Sheet at September 30, 2019 (unaudited):



	Parent Issuer		Guarantor		CCR Non-Guarantor		Non-Guarantor		Elimination			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	92,472	$	30,191	$	10,611	$	57	$	—		$	133,331
Restricted Cash	—		—		—		1,518		—			1,518
Accounts and Notes Receivable:
Trade	—		—		—		109,793		—			109,793
Other Receivables	22,772		6,376		56		—		—			29,204
Inventories	—		37,500		11,339		—		—			48,839
Prepaid Expenses and Other Assets	7,125		20,220		7,094		—		—			34,439
Total Current Assets	122,369		94,287		29,100		111,368		—			357,124
Property, Plant and Equipment:
Property, Plant and Equipment	—		3,995,982		977,418		—		—			4,973,400
Less-Accumulated Depreciation, Depletion and Amortization	—		2,307,111		559,538		—		—			2,866,649
Total Property, Plant and Equipment-Net	—		1,688,871		417,880		—		—			2,106,751
Other Assets:
Deferred Income Taxes	91,772		—		—		—		—			91,772
Affiliated Credit Facility	154,155		—		—		—		(154,155		)	—
Investment in Affiliates	882,762		—		—		—		(882,762		)	—
Right of Use Asset - Operating Leases	—		60,556		16,855		—		—			77,411
Other	34,187		42,692		13,298		—		—			90,177
Total Other Assets	1,162,876		103,248		30,153		—		(1,036,917		)	259,360
Total Assets	$	1,285,245	$	1,886,406	$	477,133	$	111,368	$	(1,036,917	)	$	2,723,235
Liabilities and Equity:
Current Liabilities:
Accounts Payable	$	88,838	$	7,671	$	23,405	$	5,406	$	—		$	125,320
Accounts Payable (Recoverable)-Related Parties	—		—		2,882		—		(2,882		)	—
Current Portion of Long-Term Debt	25,710		14,906		4,599		—		—			45,215
Other Accrued Liabilities	82,441		119,984		38,192		—		—			240,617
Total Current Liabilities	196,989		142,561		69,078		5,406		(2,882		)	411,152
Long-Term Debt:	579,148		108,330		156,240		—		(154,155		)	689,563
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions	—		427,442		—		—		—			427,442
Pneumoconiosis Benefits	—		160,075		4,897		—		—			164,972
Asset Retirement Obligations	—		231,877		10,939		—		—			242,816
Workers’ Compensation	—		56,178		2,914		—		—			59,092
Salary Retirement	54,622		—		—		—		—			54,622
Operating Lease Liability	—		52,208		14,224		—		—			66,432
Other	—		13,150		547		—		—			13,697
Total Deferred Credits and Other Liabilities	54,622		940,930		33,521		—		—			1,029,073
Total CONSOL Energy Inc. Stockholders’ Equity	454,486		694,585		218,294		105,962		(1,018,841		)	454,486
Noncontrolling Interest	—		—		—		—		138,961			138,961
Total Liabilities and Equity	$	1,285,245	$	1,886,406	$	477,133	$	111,368	$	(1,036,917	)	$	2,723,235

Income Statement for the Three Months Ended September 30, 2018 (unaudited):

~~Balance Sheet at September 30, 2018 (unaudited):~~

Parent
Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents $ 249,287
$ 245
$ 920
$ —
$ —
$ 250,452
Accounts and Notes Receivable:
Trade —
—
—
78,649
—
78,649
Other Receivables 16,917
11,964
327
—
—
29,208
Inventories —
40,445
12,025
—
—
52,470
Prepaid Expenses 7,840
18,285
6,136
25,862
—
58,123
Total Current Assets 274,044
70,939
19,408
104,511
—
468,902
Property, Plant and Equipment:
Property, Plant and Equipment —
3,860,242
935,899
—
—
4,796,141
Less-Accumulated Depreciation, Depletion and Amortization —
2,176,357
516,093
—
—
2,692,450
Total Property, Plant and Equipment-Net —
1,683,885
419,806
—
—
2,103,691
Other Assets:
Deferred Income Taxes 72,120
—
—
—
—
72,120
Affiliated Credit Facility 147,277
—
—
—
(147,277 ) —
Investment in Affiliates 640,187
—
—
—
(640,187 ) —
Other 39,011
47,261
14,943
—
—
101,215
Total Other Assets 898,595
47,261
14,943
—
(787,464 ) 173,335
Total Assets $ 1,172,639
$ 1,802,085
$ 454,157
$ 104,511
$ (787,464 ) $ 2,745,928
Liabilities and Equity:
Current Liabilities:
Accounts Payable $ 8,709
$ 71,169
$ 20,656

$ —
$ 1,867
$ 102,401
Accounts Payable (Recoverable)-Related Parties (2,291 ) 36,220
1,573
87,513
(123,015 ) —
Current Portion of Long-Term Debt 6,796
10,696
3,453
—
—
20,945
Other Accrued Liabilities 101,272
114,392
35,961
—
(1,867 ) 249,758
Total Current Liabilities 114,486
232,477
61,643
87,513
(123,015 ) 373,104
Long-Term Debt: 697,298
153,708
153,282
—
(147,277 ) 857,011
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions —
541,373
—
—
—
541,373
Pneumoconiosis Benefits —
146,729
4,947
—
—
151,676
Asset Retirement Obligations —
226,586
9,605
—
—
236,191
Workers’ Compensation —
61,816
3,530
—
—
65,346
Salary Retirement 39,921
—
—
—
—
39,921
Other —
18,240
605
—
—
18,845
Total Deferred Credits and Other Liabilities 39,921
994,744
18,687
—
—
1,053,352
Total CONSOL Energy Inc. Stockholders’ Equity 320,934
421,156
220,545
16,998
(658,699 ) 320,934
Noncontrolling Interest —
—
—
—
141,527
141,527
Total Liabilities and Equity $ 1,172,639

$ 1,802,085
$ 454,157
$ 104,511
$ (787,464 ) $ 2,745,928

~~Income Statement for the Three Months Ended September 30, 2017 (unaudited):~~

Parent
Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Revenues and Other Income:
Coal Revenue $ —
$ 209,434
$ 69,811
$ —
$ —
$ 279,245
Terminal Revenue —
15,065
—
—
—
15,065
Freight Revenue —
16,352
5,451
—
—
21,803
Miscellaneous Other Income 11,682
11,903
2,996
—
(6,868 ) 19,713
(Loss) Gain on Sale of Assets —
(519 ) 6
—
—
(513 )
Total Revenue and Other Income 11,682
252,235
78,264
—
(6,868 ) 335,313
Costs and Expenses:
Operating and Other Costs —
177,354
52,160
(74,324 ) 74,337
229,527
Depreciation, Depletion and Amortization —
36,301
10,352
—
—
46,653
Freight Expense —
16,352
5,451
—
—
21,803
Selling, General and Administrative Costs —
16,897
4,283
—
—
21,180
Interest Expense 184
1,274
2,404
—
—
3,862
Total Costs And Expenses 184
248,178
74,650
(74,324 ) 74,337
323,025
Earnings Before Income Tax 11,498
4,057
3,614
74,324
(81,205 ) 12,288
Income Tax Expense 3,770
—
—
—
—
3,770
Net Income (Loss) 7,728
4,057
3,614
74,324
(81,205 ) 8,518
Less: Net Income Attributable to Noncontrolling Interest —
—
—
—
790
790
Net Income (Loss) Attributable to CONSOL Energy Shareholders $ 7,728

$ 4,057

$ 3,614

$ 74,324
$ (81,995 ) $ 7,728

Balance Sheet at December 31, ~~2017:~~2018:



	Parent Issuer			Guarantor		CCR Non-Guarantor		Non-Guarantor		Elimination			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	234,536		$	138	$	1,003	$	—	$	—		$	235,677
Restricted Cash	14,557			—		—		14,701		—			29,258
Accounts and Notes Receivable:
Trade	—			—		—		87,589		—			87,589
Other Receivables	24,352			15,935		1,068		—		—			41,355
Inventories	—			37,580		11,066		—		—			48,646
Prepaid Expenses and Other Assets	10,883			15,451		5,096		—		—			31,430
Total Current Assets	284,328			69,104		18,233		102,290		—			473,955
Property, Plant and Equipment:
Property, Plant and Equipment	—			3,891,873		946,298		—		—			4,838,171
Less-Accumulated Depreciation, Depletion and Amortization	—			2,204,896		526,747		—		—			2,731,643
Total Property, Plant and Equipment-Net	—			1,686,977		419,551		—		—			2,106,528
Other Assets:
Deferred Income Taxes	77,545			—		—		—		—			77,545
Affiliated Credit Facility	141,129			—		—		—		(141,129		)	—
Investment in Affiliates	605,981			—		—		—		(605,981		)	—
Other	40,760			47,031		14,908		—		—			102,699
Total Other Assets	865,415			47,031		14,908		—		(747,110		)	180,244
Total Assets	$	1,149,743		$	1,803,112	$	452,692	$	102,290	$	(747,110	)	$	2,760,727
Liabilities and Equity:
Current Liabilities:
Accounts Payable	$	(721	)	$	102,995	$	24,834	$	—	$	3,822		$	130,930
Accounts Payable (Recoverable)-Related Parties	(2,291		)	36,220		3,831		87,593		(125,353		)	—
Current Portion of Long-Term Debt	8,157			11,139		3,503		—		112,013			134,812
Other Accrued Liabilities	92,534			105,806		31,916		—		(3,822		)	226,434
Total Current Liabilities	97,679			256,160		64,084		87,593		(13,340		)	492,176
Long-Term Debt:	577,957			151,202		146,196		—		(141,129		)	734,226
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions	—			441,246		—		—		—			441,246
Pneumoconiosis Benefits	—			160,741		4,260		—		—			165,001
Asset Retirement Obligations	—			226,209		9,775		—		—			235,984
Workers’ Compensation	—			56,623		3,119		—		—			59,742
Salary Retirement	64,172			—		—		—		—			64,172
Other	—			16,051		518		—		—			16,569
Total Deferred Credits and Other Liabilities	64,172			900,870		17,672		—		—			982,714
Total CONSOL Energy Inc. Stockholders’ Equity	409,935			494,880		224,740		14,697		(734,317		)	409,935
Noncontrolling Interest	—			—		—		—		141,676			141,676
Total Liabilities and Equity	$	1,149,743		$	1,803,112	$	452,692	$	102,290	$	(747,110	)	$	2,760,727

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

Parent
Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents $ 152,235
$ 105
$ 1,533
$ 106
$ —
$ 153,979
Accounts and Notes Receivable:
Trade —
—
—
131,545
—
131,545
Other Receivables 17,702
16,880
1,970
—
—
36,552
Inventories —
41,117
12,303
—
—
53,420
Prepaid Expenses 5,745
13,568
4,428
3
—
23,744
Total Current Assets 175,682
71,670
20,234
131,654
—
399,240
Property, Plant and Equipment:
Property, Plant and Equipment —
3,765,885
910,468
—
—
4,676,353
Less-Accumulated Depreciation, Depletion and Amortization —
2,070,646
483,410
—
—
2,554,056
Total Property, Plant and Equipment-Net —
1,695,239
427,058
—
—
2,122,297
Other Assets:
Deferred Income Taxes 75,065
—
—
—
—
75,065
Affiliated Credit Facility 165,110
—
—
—
(165,110 ) —
Investment in Affiliates 645,157
—
—
—
(645,157 ) —
Other 44,177
50,846
15,474
—
—
110,497
Total Other Assets 929,509
50,846
15,474
—
(810,267 ) 185,562
Total Assets $ 1,105,191
$ 1,817,755
$ 462,766
$ 131,654
$ (810,267 ) $ 2,707,099
Liabilities and Equity:
Current Liabilities:
Accounts Payable $ 20,014
$ 66,271
$ 22,789
$ 8
$ 18
$ 109,100
Accounts Payable (Recoverable)-Related Parties (2,291 ) 36,221
—
129,139
(163,069 ) —
Current Portion of Long-Term Debt —
22,405
77
—
—
22,482
Other Accrued Liabilities 101,994
149,425
44,102
(20 ) (4,874 ) 290,627
Total Current Liabilities 119,717
274,322
66,968
129,127
(167,925 ) 422,209
Long-Term Debt: 728,254
135,390
165,183
1,572
(165,110 ) 865,289
Deferred Credits and Other Liabilities:
Postretirement Benefits Other Than Pensions —
554,099
—
—
—
554,099
Pneumoconiosis Benefits —
146,035
3,833
—
—
149,868
Asset Retirement Obligations —
218,728
9,615
—
—
228,343
Workers’ Compensation —
63,244
3,404
—
—
66,648
Salary Retirement 52,960
—
—
—
—
52,960
Other —
23,435
607
—
—
24,042
Total Deferred Credits and Other Liabilities 52,960
1,005,541
17,459
—
—
1,075,960
Total CONSOL Energy Inc. Stockholders’ Equity 204,260
402,502
213,156
955
(616,613 ) 204,260
Noncontrolling Interest —
—
—
—
139,381
139,381
Total Liabilities and Equity $ 1,105,191
$ 1,817,755
$ 462,766
$ 131,654
$ (810,267 ) $ 2,707,099



	Parent Issuer			Guarantor			CCR Non-Guarantor			Non-Guarantor		Elimination			Consolidated
Revenue and Other Income:
Coal Revenue	$	—		$	738,499		$	246,166		$	—	$	—		$	984,665
Terminal Revenue	—			50,829			—			—		—			50,829
Freight Revenue	—			10,586			3,529			—		—			14,115
Miscellaneous Other Income (Loss)	130,278			(10,648		)	3,445			28,701		(115,102		)	36,674
Gain (Loss) on Sale of Assets	2,008			(17		)	(5		)	—		—			1,986
Total Revenue and Other Income	132,286			789,249			253,135			28,701		(115,102		)	1,088,269
Costs and Expenses:
Operating and Other Costs	—			552,672			164,542			1,196		—			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			—			—			—		—			25,444
Interest Expense, net	45,030			715			4,495			—		—			50,240
Total Costs and Expenses	70,474			724,127			216,558			1,196		—			1,012,355
Earnings Before Income Tax	61,812			65,122			36,577			27,505		(115,102		)	75,914
Income Tax Benefit	(243		)	—			—			—		—			(243		)
Net Income	62,055			65,122			36,577			27,505		(115,102		)	76,157
Less: Net Income Attributable to Noncontrolling Interest	—			—			—			—		14,102			14,102
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	62,055		$	65,122		$	36,577		$	27,505	$	(129,204	)	$	62,055

Income Statement for the Nine Months Ended September 30, 2018 (unaudited):



	Parent Issuer		Guarantor		CCR Non-Guarantor		Non-Guarantor			Elimination			Consolidated
Revenue and Other Income:
Coal Revenue	$	—	$	762,377	$	254,126	$	—		$	—		$	1,016,503
Terminal Revenue	—		47,995		—		—			—			47,995
Freight Revenue	—		28,330		9,444		—			—			37,774
Miscellaneous Other Income	186,475		21,893		4,240		—			(165,374		)	47,234
Gain on Sale of Assets	—		211		62		—			—			273
Total Revenue and Other Income	186,475		860,806		267,872		—			(165,374		)	1,149,779
Costs and Expenses:
Operating and Other Costs	—		539,412		159,126		2,240			—			700,778
Depreciation, Depletion and Amortization	—		121,905		33,769		—			—			155,674
Freight Expense	—		28,330		9,444		—			—			37,774
Selling, General and Administrative Costs	—		37,455		10,260		—			—			47,715
Loss on Debt Extinguishment	3,149		—		—		—			—			3,149
Interest Expense, net	61,495		1,916		5,295		—			(5,295		)	63,411
Total Costs and Expenses	64,644		729,018		217,894		2,240			(5,295		)	1,008,501
Earnings (Loss) Before Income Tax	121,831		131,788		49,978		(2,240		)	(160,079		)	141,278
Income Tax Expense	8,527		—		—		—			—			8,527
Net Income (Loss)	113,304		131,788		49,978		(2,240		)	(160,079		)	132,751
Less: Net Income Attributable to Noncontrolling Interest	—		—		—		—			19,447			19,447
Net Income (Loss) Attributable to CONSOL Energy Inc. Shareholders	$	113,304	$	131,788	$	49,978	$	(2,240	)	$	(179,526	)	$	113,304

Parent
Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Revenues and Other Income:
Coal Revenue $ —
$ 762,377
$ 254,126
$ —
$ —
$ 1,016,503
Terminal Revenue —
47,995
—
—
—
47,995
Freight Revenue —
28,330
9,444
—
—
37,774
Miscellaneous Other Income 186,475
21,893
4,240
—
(165,374 ) 47,234
Gain on Sale of Assets —
211
62
—
—
273
Total Revenue and Other Income 186,475
860,806
267,872
—
(165,374 ) 1,149,779
Costs and Expenses:
Operating and Other Costs —
539,412
159,126
2,240
—
700,778
Depreciation, Depletion and Amortization —
121,905
33,769
—
—
155,674
Freight Expense —
28,330
9,444
—
—
37,774
Selling, General and Administrative Costs —
37,455
10,260
—
—
47,715
Loss on Debt Extinguishment 3,149
—
—
—
—
3,149
Interest Expense 61,495
1,916
5,295
—
(5,295 ) 63,411
Total Costs And Expenses 64,644
729,018
217,894
2,240
(5,295 ) 1,008,501
Earnings (Loss) Before Income Tax 121,831
131,788
49,978
(2,240 ) (160,079 ) 141,278
Income Tax Expense 8,527
—
—
—
—
8,527
Net Income (Loss) 113,304
131,788
49,978
(2,240 ) (160,079 ) 132,751
Less: Net Income Attributable to Noncontrolling Interest —
—
—
—
19,447
19,447
Net Income (Loss) Attributable to CONSOL Energy Shareholders $ 113,304
$ 131,788
$ 49,978
$ (2,240 ) $ (179,526 ) $ 113,304

~~Income~~Condensed Statement of Cash Flows for the Nine Months Ended September 30, ~~2017~~2019 (unaudited):

Parent
Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Revenues and Other Income:
Coal Revenue $ —
$ 674,550
$ 224,850
$ —
$ —
$ 899,400
Terminal Revenue —
42,806
—
—
—
42,806
Freight Revenue —
38,885
12,962
—
—
51,847
Miscellaneous Other Income 120,022
22,865
4,798
—
(95,177 ) 52,508
Gain on Sale of Assets —
11,618
1,406
—
—
13,024
Total Revenue and Other Income 120,022
790,724
244,016
—
(95,177 ) 1,059,585
Costs and Expenses:
Operating and Other Costs —
530,040
152,275
88
—
682,403
Depreciation, Depletion and Amortization —
93,764
31,150
—
—
124,914
Freight Expense —
38,885
12,962
—
—
51,847
Selling, General and Administrative Costs —
47,379
11,218
—
—
58,597
Interest Expense 593
3,978
7,257
—
—
11,828
Total Costs And Expenses 593
714,046
214,862
88
—
929,589
Earnings (Loss) Before Income Tax 119,429
76,678
29,154
(88 ) (95,177 ) 129,996
Income Tax Expense 22,787
—
—
22,787
Net Income (Loss) 96,642
76,678
29,154
(88 ) (95,177 ) 107,209
Less: Net Income Attributable to Noncontrolling Interest —
—
—
—
10,567
10,567
Net Income (Loss) Attributable to CONSOL Energy Shareholders $ 96,642
$ 76,678
$ 29,154
$ (88 ) $ (105,744 ) $ 96,642



	Parent Issuer			Guarantor			CCR Non-Guarantor			Non-Guarantor		Elimination			Consolidated
Net Cash Provided by (Used in) Operating Activities	$	182,938		$	(27,260	)	$	67,505		$	—	$	—		$	223,183
Cash Flows from Investing Activities:
Capital Expenditures	—			(102,121		)	(29,354		)	—		—			(131,475		)
Proceeds from Sales of Assets	—			2,011			4			—		—			2,015
(Investments in), net of Distributions from, Subsidiaries	(146,896		)	173,436			—			—		(26,540		)	—
Net Cash (Used in) Provided by Investing Activities	(146,896		)	73,326			(29,350		)	—		(26,540		)	(129,460		)
Cash Flows from Financing Activities:
Payments on Finance Leases	—			(10,931		)	(2,853		)	—		—			(13,784		)
Net (Payments on) Proceeds from Related Party Long-Term Notes	(18,400		)	—			18,400			—		—			—
Proceeds from Term Loan A	26,250			—			—			—		—			26,250
Payments on Term Loan A	(7,500		)	—			—			—		—			(7,500		)
Payments on Term Loan B	(123,062		)	(688		)	—			—		—			(123,750		)
Buyback of Second Lien Notes	(35,048		)	—			—			—		—			(35,048		)
Proceeds from Asset-Backed Financing	3,757			—			—			—		—			3,757
Purchases of CCR Units	(369		)	—			—			—		—			(369		)
Repurchases of Common Stock	(31,318		)	—			—			—		—			(31,318		)
Distributions to Noncontrolling Interest	—			—			(43,214		)	—		26,540			(16,674		)
Shares/Units Withheld for Taxes	—			(3,865		)	(880		)	—		—			(4,745		)
Debt-Related Financing Fees	(20,628		)	—			—			—		—			(20,628		)
Net Cash Used in Financing Activities	$	(206,318	)	$	(15,484	)	$	(28,547	)	$	—	$	26,540		$	(223,809	)

Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2018 (unaudited):



	Parent Issuer			Guarantor			CCR Non-Guarantor			Non-Guarantor		Elimination			Consolidated
Net Cash (Used in) Provided by Operating Activities	$	(45,278	)	$	280,396		$	95,134		$	—	$	—		$	330,252
Cash Flows from Investing Activities:
Capital Expenditures	—			(76,599		)	(20,256		)	—		—			(96,855		)
Proceeds from Sales of Assets	—			1,198			170			—		—			1,368
Distributions from, net of (Investments in), Subsidiaries	30,237			(3,959		)	—			—		(26,278		)	—
Net Cash Provided by (Used in) Investing Activities	30,237			(79,360		)	(20,086		)	—		(26,278		)	(95,487		)
Cash Flows from Financing Activities:
Payments on Finance Leases	—			(8,894		)	(2,125		)	—		—			(11,019		)
Net Proceeds from (Payments on) Related Party Long-Term Notes	29,583			—			(29,583		)	—		—			—
Payments on Term Loan A	(26,250		)	—			—			—		—			(26,250		)
Payments on Term Loan B	(3,000		)	—			—			—		—			(3,000		)
Buyback of Second Lien Notes	(20,524		)	—			—			—		—			(20,524		)
Purchases of CCR Units	(1,142		)	—			—			—		—			(1,142		)
Repurchases of Common Stock	(9,724		)	—			—			—		—			(9,724		)
Spin Distribution to CNX Resources	—			(18,234		)	—			—		—			(18,234		)
Distributions to Noncontrolling Interest	—			—			(43,041		)	—		26,278			(16,763		)
Shares/Units Withheld for Taxes	—			(2,011		)	(912		)	—		—			(2,923		)
Debt Related Financing Fees	(2,851		)	—			—			—		—			(2,851		)
Net Cash Used in Financing Activities	$	(33,908	)	$	(29,139	)	$	(75,661	)	$	—	$	26,278		$	(112,430	)

Parent Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Net Cash Provided by (Used in) Operating Activities $ (45,278 ) $ 280,396
$ 95,134
$ —
$ —
$ 330,252
Cash Flows from Investing Activities:
Capital Expenditures —
(76,599 ) (20,256 ) —
—
(96,855 )
Proceeds From Sales of Assets —
1,198
170
—
—
1,368
(Investments in), net of Distributions from, Subsidiaries 30,237
(3,959 ) —
—
(26,278 ) —
Net Cash (Used in) Provided by Investing Activities 30,237
(79,360 ) (20,086 ) —
(26,278 ) (95,487 )
Cash Flows from Financing Activities:
Payments on Capitalized Lease Obligations —
(8,894 ) (2,125 ) —
—
(11,019 )
Affiliated Credit Facility 29,583
—
(29,583 ) —
—
—
Payments on Term Loan A (26,250 ) —
—
—
—
(26,250 )
Payments on Term Loan B (3,000 ) —
—
—
—
(3,000 )
Buyback of Second Lien Notes (20,524 ) —
—
—
—
(20,524 )
Distributions to Noncontrolling Interest —
—
(43,041 ) —
26,278
(16,763 )
Shares/Units Withheld for Taxes —
(2,011 ) (912 ) —
—
(2,923 )
Spin Distribution to CNX Resources

(18,234 ) —
—
—
(18,234 )
Repurchases of Common Stock (9,724 ) —
—
—
—
(9,724 )
Purchases of CCR Units (1,142 ) —
—
—
—
(1,142 )
Debt-Related Financing Fees (2,851 ) —
—
—
—
(2,851 )
Net Cash (Used in) Provided by Financing Activities $ (33,908 ) $ (29,139 ) $ (75,661 ) $ —
$ 26,278
$ (112,430 )

~~Condensed~~ Statement of ~~Cash Flows~~Comprehensive Income for the ~~Nine~~Three Months Ended September 30, ~~2017~~2019 (unaudited):

Parent Issuer

Guarantor
CCR Non-Guarantor Non-Guarantor Elimination Consolidated
Net Cash Provided by (Used in) Operating Activities $ (89,602 ) $ 200,470
$ 60,783
$ —
$ —
$ 171,651
Cash Flows from Investing Activities:
Capital Expenditures —
(38,749 ) (12,261 ) —
—
(51,010 )
Proceeds From Sales of Assets —
16,421
1,500
—
—
17,921
(Investments in), net of Distributions from, Subsidiaries 37,243
(11,496 ) —
—
(25,747 ) —
Net Cash (Used in) Provided by Investing Activities 37,243
(33,824 ) (10,761 ) —
(25,747 ) (33,089 )
Cash Flows from Financing Activities:
Payments on Capitalized Lease Obligations —
(2,846 ) (74 ) —
—
(2,920 )
Net (Payments on) Proceeds from Revolver - MLP —
—
(13,000 ) —
—
(13,000 )
Distributions to Noncontrolling Interest —
—
(42,150 ) —
25,747
(16,403 )
Shares/Units Withheld for Taxes —
—
(1,009 ) —
—
(1,009 )
Intercompany Contributions/(Distributions) 114,844
(114,844 ) —
—
—
—
Other Parent Net Distributions (114,844 ) —
—
—
—
(114,844 )
Net Cash (Used in) Provided by Financing Activities $ —
$ (117,690 ) $ (56,233 ) $ —
$ 25,747
$ (148,176 )



	Parent Issuer			Guarantor		CCR Non-Guarantor			Non- Guarantor		Elimination			Consolidated
Net Income	$	4,340		$	2,252	$	6,970		$	9,338	$	(15,876	)	$	7,024
Other Comprehensive Income (Loss):
Net Actuarial Gain (Loss)	2,457			—		(5		)	—		5			2,457
Unrecognized Loss on Derivatives	(261		)	—		—			—		—			(261		)
Other Comprehensive Income (Loss)	2,196			—		(5		)	—		5			2,196
Comprehensive Income	6,536			2,252		6,965			9,338		(15,871		)	9,220
Less: Comprehensive Income Attributable to Noncontrolling Interest	—			—		—			—		2,681			2,681
Comprehensive Income Attributable to CONSOL Energy Inc. Shareholders	$	6,536		$	2,252	$	6,965		$	9,338	$	(18,552	)	$	6,539

Statement of Comprehensive Income for the Three Months Ended September 30, 2018 (unaudited):

Statement of Comprehensive Income for the ~~Three~~Nine Months Ended September 30, ~~2017~~2019 (unaudited):

Statement of Comprehensive Income for the Nine Months Ended September 30, 2018 (unaudited):



	Parent Issuer		Guarantor		CCR Non-Guarantor			Non- Guarantor			Elimination			Consolidated
Net Income (Loss)	$	113,304	$	131,788	$	49,978		$	(2,240	)	$	(160,079	)	$	132,751
Other Comprehensive Income (Loss):
Net Actuarial Gain (Loss)	12,356		—		(6		)	—			6			12,356
Other Comprehensive Income (Loss)	12,356		—		(6		)	—			6			12,356
Comprehensive Income (Loss)	125,660		131,788		49,972			(2,240		)	(160,073		)	145,107
Less: Comprehensive Income Attributable to Noncontrolling Interest	—		—		—			—			19,444			19,444
Comprehensive Income (Loss) Attributable to CONSOL Energy Inc. Shareholders	$	125,660	$	131,788	$	49,972		$	(2,240	)	$	(179,517	)	$	125,663

Parent Issuer

Guarantor
CCR Non-Guarantor Non-
Guarantor Elimination Consolidated
Net Income (Loss) $ 113,304
$ 131,788
$ 49,978
$ (2,240 ) $ (160,079 ) $ 132,751
Other Comprehensive Income (Loss):
Net Actuarial Gain (Loss) 12,356
—
(6 ) —
6
12,356
Other Comprehensive Income (Loss): 12,356
—
(6 ) —
6
12,356
Comprehensive Income (Loss) 125,660
131,788
49,972
(2,240 ) (160,073 ) 145,107
Less: Comprehensive Income Attributable to Noncontrolling Interest —
—
—
—
19,444
19,444
Comprehensive Income (Loss) Attributable to CONSOL Energy Inc. Shareholders $ 125,660
$ 131,788
$ 49,972
$ (2,240 ) $ (179,517 ) $ 125,663

~~Statement of Comprehensive Income for the Nine Months Ended September 30, 2017 (unaudited):~~

Parent Issuer

Guarantor
CCR Non-Guarantor Non-
Guarantor Elimination Consolidated
Net Income (Loss) $ 96,642
$ 76,678
$ 29,154
$ (88 ) $ (95,177 ) $ 107,209
Other Comprehensive Income (Loss):
Net Actuarial Gain (Loss) 9,855
—
(118 ) —
118
9,855
Other Comprehensive Income (Loss): 9,855
—
(118 ) —
118
9,855
Comprehensive Income (Loss) 106,497
76,678
29,036
(88 ) (95,059 ) 117,064
Less: Comprehensive Income Attributable to Noncontrolling Interest —
—
—
—
10,533
10,533
Comprehensive Income (Loss) Attributable to CONSOL Energy Inc. Shareholders $ 106,497
$ 76,678
$ 29,036
$ (88 ) $ (105,592 ) $ 106,531

NOTE ~~16—~~18—RELATED PARTY TRANSACTIONS:

~~CNX Resources Corporation~~ Transactions

~~Separation from CNX Resources Corporation (ParentCo)~~

~~On November 28, 2017, in connection~~ with the separation and distribution, the Company and/or certain of its subsidiaries entered into several agreements with CNX Resources Corporation and/or the Partnership and/or certain of its subsidiaries that govern the relationship of the various parties following the separation, including the following:Company's Former Parent (2017)

Summaries of the material terms of the SDA, TSA, TMA, EMA, Omnibus Amendment, Contract Agency Amendment, Water Supply Amendment and MCSA may be found under the section entitled “Certain Relationships and Related Party Transactions” in that certain Information Statement of the Company, dated November 3, 2017, and the summaries of the material terms of the IPMA, TLA1, TLA2, the Operating Agreement Amendment and the Affiliated Company Credit Agreement may be found under Item 1.01 Entry into a Material Definitive Agreement to Form 8-K filed December 4, 2017.

Refer to Note 1 - Basis of Presentation for further information on the separation from ParentCo. Also refer to Note 16 - Stock-Based Compensation in the Notes to the Audited Consolidated Financial Statements in Item 8 of the Company’s December 31, 2017 Form 10-K for information regarding the conversion of share-based awards from ParentCo to the Company as of the date of the separation and distribution.

~~Cash Management and Treasury~~

For periods prior to the separation and distribution, the Company participated in ParentCo’s centralized treasury and cash management processes. Transactions occurring in periods prior to the separation and distribution were considered to be effectively settled for cash at the time the transactions were recorded. These transactions and net cash transfers to and from ParentCo’s centralized cash management system are reflected as a component of ParentCo’s net investment on the Unaudited Consolidated Balance Sheets and as a financing activity within the accompanying Unaudited Consolidated Statements of Cash Flows. In the Unaudited Consolidated Statements of Stockholders’ Equity, ParentCo’s net investment on the Unaudited Consolidated Balance Sheets represents the cumulative net investment by ParentCo in the Company, including net income through the completion of the separation and distribution and net cash transfers to and from ParentCo.

~~All significant transactions between the Company and CNX Resources Corporation have been included in the unaudited consolidated financial statements.~~

Transition Services Agreements

The Company ~~also~~ entered into a ~~TSA~~transition services agreement and certain other agreements in connection with the ~~SDA~~separation and distribution agreement with ~~ParentCo~~its former parent to cover certain continued corporate services provided by the Company and ~~ParentCo~~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, ParentCo~~transition services agreement, 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 ~~ParentCo. Additional services may be identified from time to time and also be provided under the TSA.~~its former parent. The charges associated with these services were not material during the three and nine months ended September 30, 2019 and 2018, and are consistent with expenses that ~~ParentCo~~the Company's former parent has historically allocated or incurred with respect to such services. The transition services agreement with the Company's former parent expired in February 2019.

~~CNX Resources~~Former Parent Receivables and Payables

~~At September 30, 2018 and December 31, 2017, the Company had a payable to CNX Resources Corporation of $473 and $12,540, respectively.~~ The Company ~~also~~ had a receivable from ~~CNX Resources Corporation~~its former parent of ~~$11,570~~$6,666 and ~~$15,415,~~$11,788, of which ~~$5,282~~$6,666 and ~~$4,500~~$5,500 was recorded in ~~current assets and $6,288 and $10,915 was included in other assets~~Other Receivables on the ~~Unaudited~~ Consolidated Balance Sheets at September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Additionally, $6,288 was included in Other Assets on the Consolidated Balance Sheet at December 31, 2018. These items relate to the reimbursement of the one-time transaction costs as well as other reimbursements per the terms of the ~~SDA.~~

~~The one-time transaction costs related to the~~ separation and distribution ~~were approximately $40,545 for~~agreement.

During the year ended December 31, ~~2017. During the nine months ended September 30,~~ 2018, the Company paid ~~CNX Resources~~its former parent $18,234 ~~for its portion of the one-time transaction costs~~ related to the final settlement of shared, spin-related fees. Per the separation and ~~distribution. Per the SDA,~~distribution agreement, these costs ~~are~~were split equally by the ~~two~~2 companies. These costs ~~consist~~consisted of consulting and professional fees associated with preparing for and executing the separation and distribution, as well as various other items.

~~Corporate Allocations~~

Prior to the completion of the separation and distribution, the Company utilized centralized functions of ParentCo to support its operations, and in return, ParentCo allocated certain of its expenses to the Company. Such expenses represent costs related, but not limited, to treasury, legal, accounting, insurance, information technology, payroll administration, human resources, incentive plans and other services. These costs, together with an allocation of ParentCo overhead costs, are included within the Selling, General and Administrative Costs caption on the Unaudited Consolidated Statements of Income. Where it was possible to specifically attribute such expenses to activities of the Company, amounts have been charged or credited directly to the Company without allocation or apportionment. Allocation of all other such expenses was based on a reasonable reflection of the utilization of service provided or benefits received by the Company during the periods presented on a consistent basis, such as a percentage of total revenue and a percentage of total projected capital expenditures. The Company’s management supports the methods used in allocating expenses and believes these methods to be reasonable estimates.

CONSOL Coal Resources LP

~~In July 2015,~~ CONSOL ~~Coal Resources LP closed~~Energy, certain of its ~~initial public offering of 5,000,000 common units representing limited partnership interests at a price~~subsidiaries and the Partnership are party to an Omnibus Agreement, dated September 30, 2016, as amended on November 28, 2017 (the “Omnibus Agreement”). Under the public of $15.00 per unit. Additionally, Greenlight Capital entered into a common unit purchase agreement with CCR pursuant to which Greenlight Capital agreed to purchase, and CCR agreed to sell, 5,000,000 common units at a price per unit equal to $15.00, which equates to $75,000 in net proceeds. CCR’s general partner isOmnibus Agreement, CONSOL ~~Coal Resources GP LLC, which was controlled by CNX at~~Energy provides the time of the IPO and is now controlled by the Company following the separation and distribution. The underwriters of the IPO filing exercised an over-allotment option of 561,067 common units to the public at $15.00 per unit.

~~In connection with its IPO, CCR entered into a $400,000 senior secured revolving credit facility~~Partnership with certain lenders and PNC Bank, National Association (PNC), as administrative agent (the “Original CCR Credit Facility”). Obligations under the revolving credit facility were guaranteed by CCR’s subsidiaries (the guarantor subsidiaries) and were secured by substantially all of CCR’s and CCR’s subsidiaries’ assets pursuant to a security agreement and various mortgages. CCR made an initial draw of $200,000, and after origination fees of $3,000, the net proceeds were $197,000.

~~The total net proceeds related to these transactions that were distributed to ParentCo were $342,711.~~

In September 2016, CCR and its wholly owned subsidiary, CONSOL Thermal, entered into a Contribution Agreement with ParentCo, CONSOL Pennsylvania Coal Company LLC and Conrhein Coal Company under which CONSOL Thermal acquired

~~an additional 5% undivided interest in and to the Pennsylvania Mining Complex,~~services in exchange for ~~(i) cash consideration in~~payments by the amount of $21,500 and (ii) CCR's issuance of 3,956,496 Class A Preferred Units representing limited partnership interests in CCR at an issue price of $17.01 per Class A Preferred Unit (the “Class A Preferred Unit Issue Price”), or an aggregate $67,300 in equity consideration. The Class A Preferred Unit Issue Price was calculated as the volume-weighted average trading price of CCR’s common units (the “Common Units”) over the trailing 15-day trading period ending on September 29, 2016 (or $14.79 per unit), plus a 15% premium.Partnership for those services.

In October 2017, ParentCo elected to have the 3,956,496 Class A Preferred Units, representing its limited partnership interest in CCR, converted into an equal number of Common Units under the terms of the Second Amended and Restated Agreement of Limited Partnership of CCR.

In connection with the PAMC acquisition, in September 2016, CCR’s General Partner and CCR entered into the First Amended and Restated Omnibus Agreement (the “Amended Omnibus Agreement”) with ParentCo and certain of its subsidiaries. Under the Amended Omnibus Agreement, ParentCo indemnified CCR for certain liabilities. The Amended Omnibus Agreement also amended CCR’s obligations to ParentCo with respect to the payment of an annual administrative support fee and reimbursement for the provisions of certain management and operating services provided, in each case to reflect structural changes in how those services are provided to CCR by ParentCo. The Company assumed this agreement as part of the separation and distribution.

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 outstanding amounts under ~~the Original~~CCR's $400 million senior secured revolving credit facility with certain lenders and PNC Bank, National Association (“PNC”), as administrative agent (the “Original CCR Credit ~~Facility~~Facility”), and to provide working capital for the Partnership following the separation and for other general corporate purposes. The Original CCR Credit Facility was then terminated.

~~The~~On March 28, 2019, the Affiliated Company Credit Agreement ~~matures on~~was amended to extend the maturity date from February 27, ~~2023.~~2023 to December 28, 2024. Interest accrues at a rate ranging from 3.75% to 4.75%, subject to the Partnership's net leverage ratio. For the three months ended September 30, 2019 and 2018, $2,003 and $1,832 of interest expense is included in the Consolidated Statements of Income, respectively. For the nine months ended September 30, 2019 and 2018, ~~$1,832~~$5,770 and $5,942 of interest expense is included in the ~~Unaudited~~ Consolidated Statements of Income, 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, ~~2018.~~2019. 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 ~~16, 2018.~~8, 2019.

In August 2019, 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, all 11,611,067 of the CCR subordinated units owned entirely by CONSOL Energy Inc. were converted into CCR common units on a 1-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.

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



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Operating and Other Costs	$	838	$	725	$	2,368	$	2,172
Selling, General and Administrative Costs	1,902		2,345		6,932		5,943
Total Services from CONSOL Energy	$	2,740	$	3,070	$	9,300	$	8,115

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Operating and Other Costs $ 725
$ 850
$ 2,172
$ 2,589
Selling, General and Administrative Costs 2,345
834
5,943
2,288
Total Services from CONSOL Energy $ 3,070
$ 1,684
$ 8,115
$ 4,877

Operating and Other Costs ~~includes~~include pension service costs ~~for pension~~ and insurance expenses. Selling, General and Administrative Costs include charges for incentive compensation, an annual administrative support fee and reimbursement for the provision of certain management and operating services provided by ~~CNX prior to~~ the separation and by CONSOL Energy following the separation. As of November 28, 2017, certain administrative services historically incurred by the Partnership are now incurred by CONSOL Energy and the Partnership's portion is reimbursed to CONSOL Energy.Company.

At September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, CCR had a net payable to the Company in the amount of ~~$1,573~~$2,882 and ~~$3,071,~~$3,831, respectively. This payable includes reimbursements for business expenses, executive fees, stock-based compensation and other items under the ~~omnibus agreement.~~Omnibus Agreement.

In ~~July 2018,~~May 2019, CONSOL Energy Inc.'s Board of Directors approved an expansion of the stock, unit and debt repurchase program (see Note 1719 - Stock, Unit and Debt Repurchase). The program expansion allows the Company to use up to ~~$25~~$50 million of the program to purchase ~~CONSOL Coal Resources LP's~~CCR's outstanding common units in the open market. For 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. During the three and nine months ended September 30, 2018, 77,536 of the Partnership's common units were ~~repurchased~~purchased under this program at an average price of $17.86 per unit.

NOTE ~~17—~~19—STOCK, UNIT AND DEBT REPURCHASE:

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 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.~~tax matters agreement (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 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 Company's stock, unit and debt repurchase program to $200 million.

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 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, 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 three and nine months ended September 30, ~~2018, 281,272~~2019, the Company repurchased approximately $15,728 and $35,048 of its 11.00% Senior Secured Second Lien Notes due 2025, respectively. Also during the three and nine months ended September 30, 2019, 1,366,054 and 1,717,497 shares of the ~~Company’s~~Company's common stock were repurchased and retired at an average price of $16.97 and $19.06 per share, respectively, and 19,413 and 26,297 of the Partnership's common units were purchased at an average price of $12.88 and $14.05 per unit, respectively.

During the nine months ended September 30, 2018, the Company repurchased approximately $20,524 of its 11.00% Senior Secured Second Lien Notes due 2025. During the three and nine months ended September 30, 2018, 190,272 and 281,272 shares of the Company's common stock were repurchased and retired at an average price of $41.93 and $40.03 per share, respectively, and 77,536 of the ~~Partnership’s~~Partnership's common units were purchased at an average price of $17.86 per unit. ~~Additionally, the Company repurchased approximately $20,524 of its Senior Secured Second Lien Notes.~~

NOTE ~~18—~~20—SUBSEQUENT EVENTS:

On October ~~25, 2018,~~30, 2019, the Board of Directors of CCR's general partner declared a cash distribution of $0.5125 ~~for the quarter ended September 30, 2018~~ per unit to CCR's limited partner unitholders and the holder of the general partner interest. The cash distribution will be paid on November 15, ~~2018~~2019 to the unitholders of record at the close of business on November ~~8, 2018.~~11, 2019.

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 ~~unaudited~~ 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, ~~2017~~2018 included in CONSOL Energy Inc.'s Form 10-K, filed on February ~~16, 2018.~~8, 2019. This MD&A contains forward-looking statements and ~~covers periods prior to~~ the ~~consummation of the separation and distribution and, accordingly, the discussion of such historical periods does not reflect the impact the separation and distribution may have on the Company. 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 ~~“Cautionary Statement Concerning Forward-Looking~~“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.

The Separation and Distribution

~~In December 2016, CNX announced~~On November 28, 2017, CONSOL Energy was separated from its ~~intent~~former parent to ~~separate into two~~become an independent, publicly-traded ~~companies - an independently traded~~ coal company and an independently traded oil and natural gas exploration and production company focused on Appalachian area natural gas and liquids activities, including production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin.

~~In anticipation~~company. As part of the separation, the following assets of the Company's former parent were transferred to CONSOL ~~Energy was originally formed as CONSOL Mining Corporation in Delaware on June 21, 2017 to hold all of ParentCo’s Coal Business, including~~Energy: (i) its interest in the Pennsylvania Mining Complex and certain related coal assets, ~~including ParentCo’s~~(ii) its ownership interest in CNX Coal Resources LP, which owns a 25% undivided interest ~~stake~~ in the PAMC, ~~as well as ParentCo's ownership in~~(iii) the CONSOL Marine Terminal and, (iv) undeveloped coal reserves (Greenfield Reserves) located in the Northern Appalachian, Central Appalachian and Illinois basins, and certain related coal assets and liabilities (the Coal Business). The Registration Statement on Form 10 (as amended) filed by the Company with the SEC describes the Company and the assets and liabilities that comprise the Coal Business that it now owns after completion of the separation and distribution.

~~The separation occurred on November 28, 2017 through the pro rata distribution by ParentCo of all of the outstanding common stock of CONSOL Mining Corporation to ParentCo’s shareholders.~~liabilities. Following the separation, and distribution, ParentCo continues to own the Gas Business. In connection with the separation, CONSOL Mining Corporation changed its name to CONSOL Energy Inc. and ParentCo changed its name to CNX Resources Corporation. In addition, CNX Coal Resources LP changed its name to CONSOL Coal Resources LP and its ticker to CCR.

~~The separation was subject to a number of conditions, including, but not limited to: final approval by ParentCo’s Board of Directors; the continuing validity~~shares of the ~~private letter ruling from~~Company's common stock began “regular-way” trading on the Internal Revenue Service regarding certain U.S. federal income tax matters relating to the transaction; receipt of an opinion of legal counsel regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax-free for U.S. federal income tax purposes; and the SEC declaring effective a Registration Statement on Form 10, as amended. The Registration Statement on Form 10 was declared effectiveNew York Stock Exchange on November ~~3, 2017.~~29, 2017 under the symbol “CEIX”.

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. Our predecessors have been mining coal, primarily in the Appalachian Basin, since 1864.

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,~~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 and metallurgical end-users in Europe, Asia, South America, and ~~Africa.~~Africa, as well as Canada.

Our operations, including the PAMC and the CONSOL Marine Terminal, have consistently generated strong cash flows. As of December 31, ~~2017,~~2018, the PAMC controls ~~735.5~~698.5 million tons of high-quality Pittsburgh seam reserves, enough to allow for approximately 2625 years of full-capacity production. In addition, we own or control approximately 1.6 billion tons of Greenfield Reserves located in the Northern Appalachian (“NAPP”), the Central Appalachian (“CAPP”) and the Illinois Basins (“ILB”), which we believe could provide a solid growth platform in the future. 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 opportunities.

Our core businesses consist of our:

Pennsylvania Mining Complex: The PAMC, which includes the Bailey Mine, the Enlow Fork Mine, ~~and~~ 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 uniform, high-Btu ~~thermal~~ 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 sustain high production volumes at comparatively low operating costs due to, among other things, ~~the~~our technologically advanced longwall mining systems, logistics infrastructure and safety. All of our 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: ~~We own 60.3% of CCR's limited partnership interests and 100% of~~CONSOL Energy owns, directly or indirectly, through CCR's general partner, 61.5% of the partnership, which is comprised of a 1.7% general partner interest ~~which equates to~~and a ~~61.3% economic ownership interest in the Partnership. CCR is a master~~59.8% limited ~~partnership originally formed by CNX to manage and further develop its active coal operations in Pennsylvania.~~partner interest. At September 30, ~~2018,~~2019, CCR's assets included a 25% undivided interest in, and full operational control over, the PAMC.

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 ~~one of~~ the ~~few terminals in 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; full production is expected in 2021 upon the completion of a new preparation plant. The Company anticipates 600+ thousand tons per year of high-quality, low-vol coking coal production.

Greenfield Reserves: We own approximately 1.6 billion tons of high-quality, undeveloped coal reserves located in NAPP, CAPP, and the ILB.

These assets and the diverse markets they serve provide robust flexibility for generating cash across a wide variety of demand and pricing scenarios. This flexibility begins with the low-cost structure and optionality afforded by the PAMC. 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 operate 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 ~~Bailey~~ 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. The PAMC is the most productive and efficient coal mining complex in NAPP. For the year ending December 31, ~~2017,~~2018, productivity averaged ~~7.31~~7.62 tons of coal per employee hour, compared with an average of ~~5.23~~5.18 tons per employee hour for all other ~~currently-operating~~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 or as a crossover product in the high-volatile metallurgical coal market. ~~Domestically, we~~We have a well-established and diverse blue chip customer base, comprised primarily of domestic electric-power-producing companies located in the eastern United States. For

~~2019~~ 2020 and ~~2020,~~2021, our contracted position, as of November ~~1, 2018,~~5, 2019, is at ~~77%~~82% and ~~33%~~36%, respectively, assuming a 27 million ton annual coal sales volume. We believe our committed and contracted position is well-balanced in hedging against market downside risk while allowing us to continue to build out ~~the~~our customer portfolio strategically and opportunistically as the market evolves.

Q3 ~~2018~~2019 Highlights:

~~Net income of $9 million~~

~~Repurchased 190,272 CONSOL Energy common shares outstanding at an average price of $41.93 per share~~

~~Purchased 77,536 common units of CONSOL Coal Resources LP at an average price of $17.86 per unit~~

Strongest third quarter production in the history of the PAMC

Net income of $7 million

~~2018 Outlook:~~Net payments, including premiums, on total debt of $21.5 million during the quarter

~~The Company's 2018 coal production is expected to be~~Repurchased approximately ~~27 million tons.~~


•	~~The Company's 2018 coal capital investment is expected to be approximately $130-$145 million.~~¹

¹5% of outstanding CONSOL Energy ~~is unable to provide a reconciliation of this guidance to any GAAP measure due to the unknown effect, timing and potential significance of certain income statement items.~~Inc. common shares for $23 million

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; and (iv) average cash margin per ton, an operating ratio derived from non-GAAP financial measures.

Cost of coal sold, cash cost of coal sold, and average cash margin per ton normalize the volatility contained within comparable GAAP measures by adjusting certain non-operating or non-cash transactions. 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.

~~The~~These non-GAAP financial measures should not be considered an alternative to total costs, 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 net income or net cash, 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 a cost per ton basis. Our cost of coal sold per ton represents our costs of coal sold divided by the tons of coal we sell. 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 per ton 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 GAAP measure most directly comparable to cost of coal sold is total ~~costs.~~costs and expenses. The cash cost of coal sold includes cost of coal sold less depreciation, depletion and amortization cost on production assets. The GAAP measure most directly comparable to cash cost of coal sold is total ~~costs.~~costs and expenses.

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,
	2019			2018			2019			2018
Total Costs and Expenses	$	323,907		$	315,854		$	1,012,355		$	1,008,501
Freight Expense	(3,599		)	(2,443		)	(14,115		)	(37,774		)
Selling, General and Administrative Costs	(14,690		)	(18,526		)	(52,901		)	(47,715		)
Loss on Debt Extinguishment	(801		)	—			(25,444		)	(3,149		)
Interest Expense, net	(15,598		)	(20,862		)	(50,240		)	(63,411		)
Other Costs (Non-Production)	(22,786		)	(30,801		)	(76,856		)	(103,513		)
Depreciation, Depletion and Amortization (Non-Production)	(12,105		)	(9,175		)	(23,111		)	(27,098		)
Cost of Coal Sold	$	254,328		$	234,047		$	769,688		$	725,841
Depreciation, Depletion and Amortization (Production)	(42,265		)	(42,067		)	(128,134		)	(128,576		)
Cash Cost of Coal Sold	$	212,063		$	191,980		$	641,554		$	597,265

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

The following table presents a reconciliation of cash cost of coal sold to total costs, 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,
2018 2017 2018 2017
Total Costs and Expenses $ 315,854
$ 323,025
$ 1,008,501
$ 929,589
Freight Expense (2,443 ) (21,803 ) (37,774 ) (51,847 )
Selling, General and Administrative Costs (18,526 ) (21,180 ) (47,715 ) (58,597 )
Loss on Debt Extinguishment —
—
(3,149 ) —
Interest Expense, net (20,862 ) (3,862 ) (63,411 ) (11,828 )
Other Costs (Non-Production) (30,801 ) (32,749 ) (103,513 ) (94,870 )
Depreciation, Depletion and Amortization (Non-Production) (9,175 ) (7,420 ) (27,098 ) (6,890 )
Cost of Coal Sold $ 234,047
$ 236,011
$ 725,841
$ 705,557
Depreciation, Depletion and Amortization (Production) (42,067 ) (39,233 ) (128,576 ) (118,024 )
Cash Cost of Coal Sold $ 191,980
$ 196,778
$ 597,265
$ 587,533

The following table presents a reconciliation of 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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Total Coal Revenue	$	294,797		$	279,245		$	1,016,503		$	899,400		$	301,542		$	294,797		$	984,665		$	1,016,503
Operating and Other Costs	222,781			229,527			700,778			682,403			234,849			222,781			718,410			700,778
Less: Other Costs (Non-Production)	(30,801		)	(32,749		)	(103,513		)	(94,870		)	(22,786		)	(30,801		)	(76,856		)	(103,513		)
Cash Cost of Coal Sold	191,980			196,778			597,265			587,533
Total Cash Cost of Coal Sold													212,063			191,980			641,554			597,265
Add: Depreciation, Depletion and Amortization	51,242			46,653			155,674			124,914			54,370			51,242			151,245			155,674
Less: Depreciation, Depletion and Amortization (Non-Production)	(9,175		)	(7,420		)	(27,098		)	(6,890		)	(12,105		)	(9,175		)	(23,111		)	(27,098		)
Cost of Coal Sold	$	234,047		$	236,011		$	725,841		$	705,557
Total Cost of Coal Sold													$	254,328		$	234,047		$	769,688		$	725,841
Total Tons Sold (in millions)	6.2			6.3			20.7			19.9			6.5			6.2			20.6			20.7
Average Revenue per Ton Sold	$	47.21		$	44.16		$	49.11		$	45.26		$	46.59		$	47.21		$	47.84		$	49.11
Average Cash Cost per Ton Sold	30.88			30.94			28.87			29.57
Average Cash Cost of Coal Sold per Ton													32.78			30.88			31.16			28.87
Depreciation, Depletion and Amortization Costs per Ton Sold	6.60			6.38			6.20			5.94			6.51			6.60			6.23			6.20
Average Cost per Ton Sold	37.48			37.32			35.07			35.51
Average Cost of Coal Sold per Ton													39.29			37.48			37.39			35.07
Average Margin per Ton Sold	9.73			6.84			14.04			9.75			7.30			9.73			10.45			14.04
Add: Depreciation, Depletion and Amortization Costs per Ton Sold	6.60			6.38			6.20			5.94			6.51			6.60			6.23			6.20
Average Cash Margin per Ton Sold	$	16.33		$	13.22		$	20.24		$	15.69		$	13.81		$	16.33		$	16.68		$	20.24

Three Months Ended September 30, ~~2018~~2019 Compared with the Three Months Ended September 30, ~~2017~~2018

Net Income Attributable to CONSOL Energy Inc. Shareholders

CONSOL Energy reported net income attributable to CONSOL Energy Inc. shareholders of $4 million for the three months ended September 30, 2019, compared to net income attributable to CONSOL Energy Inc. shareholders of $6 million for the three months ended September 30, ~~2018, compared to net income attributable to CONSOL Energy Inc. shareholders of $8 million for the three months ended September 30, 2017.~~2018.

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, the Greenfield Reserves, closed and idle mine activities, selling, general and administrative activities, 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 earnings before income tax of $31 million for the three months ended September 30, 2019, compared to earnings before income tax of $38 million for the three months ended September 30, ~~2018, compared to earnings before income tax of $21 million for the three months ended September 30, 2017.~~2018. Variances are discussed below.


	For the Three Months Ended							For the Three Months Ended
	September 30,							September 30,
(in millions)	2018		2017		Variance			2019		2018		Variance
Revenue:
Coal Revenue	$	295	$	279	$	16		$	302	$	295	$	7
Freight Revenue	2		22		(20		)	4		2		2
Miscellaneous Other Income	4		12		(8		)	4		4		—
Total Revenue and Other Income	301		313		(12		)	310		301		9
Cost of Coal Sold:
Operating Costs	192		197		(5		)	212		192		20
Depreciation, Depletion and Amortization	42		39		3			42		42		—
Total Cost of Coal Sold	234		236		(2		)	254		234		20
Other Costs:
Other Costs	8		11		(3		)	3		8		(5		)
Depreciation, Depletion and Amortization	2		2		—			4		2		2
Total Other Costs	10		13		(3		)	7		10		(3		)
Freight Expense	2		22		(20		)	4		2		2
Selling, General and Administrative Costs	17		19		(2		)	14		17		(3		)
Interest Expense, net	—		2		(2		)
Total Costs and Expenses	263		292		(29		)	279		263		16
Earnings Before Income Tax	$	38	$	21	$	17		$	31	$	38	$	(7	)

Coal Production

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


	For the Three Months Ended September 30,				For the Three Months Ended September 30,
Mine	2018	2017	Variance		2019	2018	Variance
Bailey	2,394	2,764	(370	)	2,782	2,394	388
Enlow Fork	2,584	1,944	640		2,384	2,584	(200	)
Harvey	1,394	1,437	(43	)	1,326	1,394	(68	)
Total	6,372	6,145	227		6,492	6,372	120

Coal production was 6.5 million tons for the three months ended September 30, 2019, compared to 6.4 million tons for the three months ended September 30, ~~2018, compared to 6.1 million tons for the three months ended September 30, 2017.~~2018. Coal production increased ~~slightly, due to increased production at~~as a result of one fewer longwall move in the ~~Enlow Fork mine, as geological conditions improved modestly~~current period compared to the year-ago quarter, partially offset by ~~reduced production resulting from three longwall moves~~adverse geological conditions and other operational delays at the ~~other mines (compared to~~Enlow Fork and Harvey mines. The PAMC achieved record-high third quarter production during the ~~more typical one-to-two longwall moves per quarter) and a miners' vacation period in July 2018.~~three months ended September 30, 2019.

Coal Operations

The PAMC division's coal revenue and cost components on a per unit basis for the three months ended September 30, 2019 and 2018 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 ~~periods were as follows:~~costs are not directly associated with coal production.


	For the Three Months Ended September 30,							For the Three Months Ended September 30,
	2018		2017		Variance			2019		2018		Variance
Total Tons Sold (in millions)	6.2		6.3		(0.1		)	6.5		6.2		0.3
Average Revenue per Ton Sold	$	47.21	$	44.16	$	3.05		$	46.59	$	47.21	$	(0.62	)

Average Cash Cost per Ton Sold	$	30.88	$	30.94	$	(0.06	)
Average Cash Cost of Coal Sold per Ton ⁽¹⁾								$	32.78	$	30.88	$	1.90
Depreciation, Depletion and Amortization Costs per Ton Sold (Non-Cash Cost)	6.60		6.38		0.22			6.51		6.60		(0.09		)
Total Costs per Ton Sold	$	37.48	$	37.32	$	0.16
Average Cost of Coal Sold per Ton								$	39.29	$	37.48	$	1.81
Average Margin per Ton Sold	$	9.73	$	6.84	$	2.89		$	7.30	$	9.73	$	(2.43	)
Add: Depreciation, Depletion and Amortization Costs per Ton Sold	6.60		6.38		0.22			6.51		6.60		(0.09		)
Average Cash Margin per Ton Sold (1)	$	16.33	$	13.22	$	3.11		$	13.81	$	16.33	$	(2.52	)

(1) Average cash cost of coal sold per ton is a non-GAAP measure and average cash margin per ton sold is an operating ratio 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 was $302 million for the three months ended September 30, 2019, compared to $295 million for the three months ended September 30, ~~2018, compared~~2018. Total sales tons increased in the period-to-period comparison to ~~$279 million for~~meet market demand. The decrease in the ~~three months ended September 30, 2017. The $16 million increase was primarily attributable to a $3.05 higher~~ average ~~sales price per ton sold. The higher average sales price~~revenue per ton sold ~~in the 2018 period~~ was ~~primarily~~mainly driven by ~~improved export and~~lower domestic netback pricing compared to the year-ago quarter. The prompt month prices for the API2 index (the benchmark price reference for coal imported into northwest Europe) averaged 15% higher than during the year-ago quarter.contract pricing.

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 $4 million for the three months ended September 30, 2019, compared to $2 million for the three months ended September 30, ~~2018, compared to $22~~2018. The $2 million ~~in the three months ended September 30, 2017. The $20 million decrease~~increase was due to ~~decreased~~increased shipments to customers where the Company was contractually obligated to provide transportation ~~services were contractually provided.~~services.

~~Miscellaneous Other Income~~

Miscellaneous other income was $4 million for the three months ended September 30, 2018, compared to $12 million for the three months ended September 30, 2017. The decrease was the result of a customer contract buyout in the amount of $8 million in the prior period.

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, ~~royalty~~royalties and production taxes, ~~employee-related expenses~~direct administration costs and depreciation, depletion, and amortization costs on production assets. Total cost of coal sold was $254 million for the three months ended September 30, 2019, or $20 million higher than the $234 million for the three months ended September 30, ~~2018, or $2 million lower than the $236 million~~2018. Total costs per ton sold were $39.29 per ton for the three months ended September 30, ~~2017, which is materially consistent in the period-to-period comparison. Total costs per ton sold were~~2019, compared to $37.48 per ton for the three months ended September 30, ~~2018, compared to $37.32 per ton for~~2018. The increase in the ~~three months ended September 30, 2017.~~total cost of coal sold was primarily driven by non-typical challenges faced in the current period including a roof fall and equipment breakdowns. These geological and equipment-related issues resulted in higher mine maintenance and project expenses.

Other costs include items that are assigned to the PAMC division but are not included in unit costs, such as coal reserve holding costs and purchased coal costs. Total other costs decreased $3 million in the three months ended September 30, ~~2018~~2019 compared to the three months ended September 30, ~~2017.~~2018. The decrease was primarily attributable to ~~severance~~additional costs incurred in the ~~prior period related to organizational restructuring, offset, in part, by an increase in current~~year-ago quarter ~~costs~~ related to discretionary employee benefit expenses.

Selling, General, and Administrative Costs

At September 30, ~~2018,~~2019, CONSOL Energy was party to a service agreement with ~~CONSOL Coal Resources LP~~CCR that required CONSOL Energy to provide certain selling, general and administrative services to CCR. These services are paid monthly based on an agreed-upon fixed fee that is reset at least annually. See Note 1618 - Related Party Transactions of the Notes to the ~~Unaudited~~ Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. An additional portion of CONSOL Energy's selling, general and administrative costs are allocated to the PAMC division, outside of the service agreement, based on a percentage of total revenue and a percentage of total projected capital expenditures. The amount of selling, general and administrative costs related to the PAMC division was $14 million for the three months ended September 30, 2019, compared to $17 million for the three months ended September 30, ~~2018, compared to $19 million for the three months ended September 30, 2017.~~2018. The $2$3 million decrease in the period-to-period comparison was primarily related to ~~a decrease in long-term incentive compensation recognized, offset, in part, by an increase in~~lower short-term incentive ~~compensation paid to employees based on the results of operations achieved at the Company's mines.~~compensation.

~~Interest Expense, net~~

Interest expense, net of amounts capitalized, decreased $2 million in the period-to-period comparison. For the three months ended September 30, 2017, net interest expense is primarily comprised of interest on the Original CCR Credit Facility. No such interest expense was incurred during the three months ended September 30, 2018.

~~Other~~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 coal terminal operations, closed and idle mine activities, selling, general and administrative activities, interest expense and income taxes, as well as various other non-operated ~~activities, none of which are individually significant to the Company.~~activities.

Other business activities had a loss before income tax of $22 million for the three months ended September 30, 2019, compared to a loss before income tax of $30 million for the three months ended September 30, ~~2018, compared to a loss before income tax of $9 million for the three months ended September 30, 2017.~~2018. Variances are discussed below.

Miscellaneous Other Income

Miscellaneous other income was $7 million for the three months ended September 30, ~~2018, compared to $8~~2019 and 2018.



	For the Three Months Ended September 30,
(in millions)	2019		2018		Variance
Royalty Income - Non-Operated Coal	$	5	$	5	$	—
Property Easements and Option Income	—		1		(1		)
Rental Income	1		1		—
Interest Income	1		—		1
Total Miscellaneous Other Income	$	7	$	7	$	—

Operating and Other Costs

Operating and other costs were $20 million for the three months ended September 30, ~~2017.~~

~~Operating and Other Costs~~

~~Operating and other costs were~~2019, compared to $23 million for the three months ended September 30, ~~2018, compared to $21 million for the three months ended September 30, 2017.~~2018. Operating and other costs ~~increased~~decreased in the period-to-period comparison due to the following items:

Depreciation, Depletion and Amortization

~~Depreciation,~~There were no material changes in depreciation, depletion and amortization ~~increased $1 million~~costs in the period-to-period ~~comparison due to changes in the Company's asset retirement obligations.~~comparison.

Selling, General and Administrative Costs

Loss on Debt Extinguishment

Loss on debt extinguishment of $1 million was recognized in the three months ended September 30, 2019 due to the open market repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025. No loss on debt extinguishment was recognized in the three months ended September 30, 2018.

Interest expense, net of amounts capitalized, ~~of $21 million for the three months ended September 30, 2018~~ is comprised of interest on the Company's Senior Secured Credit Facilities, ~~and~~ the 11.00% Senior Secured Second Lien Notes ~~as well as interest on~~and the 5.75% MEDCO Revenue Bonds. Interest expense, net of amounts capitalized, ~~of $2~~decreased $5 million ~~for~~in the ~~three months ended September 30, 2017 is comprised only of interest~~period-to-period comparison, primarily related to the $110 million required repayment on the ~~5.75% MEDCO Revenue Bonds.~~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 in interest expense, net of amounts capitalized, is also attributable to current period repurchases of the Company's 11.00% Senior Secured Second Lien Notes (see Note 19 - Stock, Unit and Debt Repurchase of the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).

Nine Months Ended September 30, ~~2018~~2019 Compared with the Nine Months Ended September 30, ~~2017~~2018

Net Income Attributable to CONSOL Energy Inc. Shareholders

CONSOL Energy reported net income attributable to CONSOL Energy Inc. shareholders of $62 million for the nine months ended September 30, 2019, compared to net income attributable to CONSOL Energy Inc. shareholders of $113 million for the nine months ended September 30, ~~2018, compared to net income attributable to CONSOL Energy Inc. shareholders of $97 million for the nine months ended September 30, 2017.~~2018.

The PAMC division had earnings before income tax of $156 million for the nine months ended September 30, 2019, compared to earnings before income tax of $221 million for the nine months ended September 30, ~~2018, compared to earnings before income tax of $132 million for the nine months ended September 30, 2017.~~2018. Variances are discussed below.

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

Coal production was 20.6 million tons for the nine months ended September 30, 2019, compared to 20.8 million tons for the nine months ended September 30, ~~2018, compared to 19.9 million tons for the nine months ended September 30, 2017.~~2018. Coal production decreased slightly, mainly due to reduced production at the Bailey mine resulting from one additional longwall move and other operational delays. This was partially offset by increased ~~0.9 million tons to satisfy market demand, offset, in part, by adverse geological conditions~~production at the Enlow Fork ~~Mine in early 2018.~~mine, as geological conditions improved throughout the first half of 2019 compared to the year-ago period, and at the Harvey mine.

The PAMC division's coal revenue and cost components on a per unit basis for the nine months ended September 30, 2019 and 2018 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 ~~periods were as follows:~~costs are not directly associated with coal production.

Coal revenue was $985 million for the nine months ended September 30, 2019, compared to $1,017 million for the nine months ended September 30, ~~2018, compared to $899~~2018. The $32 million ~~for the nine months ended September 30, 2017. The $118 million increase~~decrease was primarily attributable to a $3.85 higher average sales price per ton sold and a 0.8 million increase in tons sold. The increase in tons sold was primarily driven by improved production from our Bailey Mine, which was supported by strong demand from the Company's customers in both the domestic and export markets. The higher$1.27 lower average sales price per ton sold in the ~~2018~~2019 period, ~~was primarily~~mainly driven by ~~improved~~lower domestic netback contract pricing ~~under the Company's netback contracts, which resulted from stronger PJM West power prices during the first half of 2018 as~~ compared to the ~~first half of 2017,~~year-ago period, as well as a slight decrease in tons sold. This decrease was partially offset by ~~improved realizations~~an increase in prices the Company received for its export markets. PJM West day-ahead power prices averaged 28% higher in the nine months ended September 30, 2018 versus the year-ago period, and prompt month prices for the API2 index (the benchmark price reference for coal imported into northwest Europe) averaged 13% higher than during the year-ago period.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. Freight revenue is completely offset by freight expense. Freight revenue and freight expense were both $14 million for the nine months ended September 30, 2019, compared to $38 million for the nine months ended September 30, ~~2018, compared to $52 million in the nine months ended September 30, 2017.~~2018. The ~~$14~~$24 million decrease was due to decreased shipments to customers where the Company was contractually obligated to provide transportation ~~services were contractually provided.~~services.

Miscellaneous Other Income

Miscellaneous other income was $14 million for the nine months ended September 30, 2019, compared to $17 million for the nine months ended September 30, ~~2018, compared to $19 million for the nine months ended September 30, 2017.~~2018. The $2$3 million decrease was primarily ~~the result of~~attributable to a ~~customer contract buyout in the amount of $8 million in the prior period. This~~ decrease ~~was partially offset by a current period increase~~ in sales of externally purchased coal ~~for blending purposes only.~~

~~Gain on Sale of Assets~~

~~Gain on sale of assets decreased $6 million~~to blend and resell, partially offset by customer contract buyouts in the ~~period-to-period comparison primarily due to the sale of certain coal rights during the nine months ended September 30, 2017.~~current period.

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, ~~royalty~~royalties and production taxes, ~~employee-related expenses~~direct administration costs and depreciation, depletion, and amortization ~~costs.~~costs on production assets. Total cost of coal sold was $770 million for the nine months ended September 30, 2019, or $44 million higher than the $726 million for the nine months ended September 30, ~~2018, or $20 million higher than the $706 million~~2018. Total costs per ton sold were $37.39 per ton for the nine months ended September 30, ~~2017. Total costs per ton sold were~~2019, compared to $35.07 per ton for the nine months ended September 30, ~~2018, compared to $35.51 per ton for the nine months ended September 30, 2017.~~2018. The increase in the total cost of coal sold was primarily driven by ~~an increase in production-related costs as more coal was mined~~additional equipment rebuilds and longwall overhauls due to ~~meet market demand. However,~~ the ~~increased production~~timing of longwall moves and panel development. Also, the Company faced non-typical challenges during the current year, including a roof fall and equipment breakdowns. These geological and equipment-related issues resulted in ~~an overall decrease in the total cost per ton sold.~~higher mine maintenance and project expenses.

Other costs include items that are assigned to the PAMC division but are not included in unit costs, such as coal reserve holding costs and purchased coal costs. Total other costs ~~increased $16~~decreased $21 million in the nine months ended September 30, ~~2018~~2019 compared to the nine months ended September 30, ~~2017.~~2018. The ~~increase~~decrease was primarily attributable to ~~an increase~~additional costs incurred in ~~current year costs~~the year-ago period related to externally purchased coal ~~for blending purposes only,~~to blend and resell, discretionary employee benefit expenses and demurrage charges. ~~This increase was partially offset by prior year severance costs related to organizational restructuring.~~

Selling, General, and Administrative Costs

At September 30, ~~2018,~~2019, CONSOL Energy was party to a service agreement with ~~CONSOL Coal Resources LP~~CCR that required CONSOL Energy to provide certain selling, general and administrative services to CCR. These services are paid monthly based on an agreed-upon fixed fee that is reset at least annually. See Note 1618 - Related Party Transactions of the Notes to the ~~Unaudited~~ Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. An additional portion of CONSOL Energy's selling, general and administrative costs are allocated to the PAMC division, outside of the service agreement, based on a percentage of total revenue and a percentage of total projected capital expenditures. The amount of selling, general and administrative costs related to the PAMC division was $50 million for the nine months ended September 30, 2019, compared to $43 million for the nine months ended September 30, ~~2018, compared to $51~~2018. The $7 million ~~for the nine months ended September 30, 2017. The $8 million decrease~~increase in the period-to-period comparison was primarily ~~due~~related to ~~long-term incentive compensation recognized~~accelerated non-cash amortization recorded in the ~~prior year~~current period for retiree-eligible employees who received awards under the Company's Performance Incentive Plan, as well as an increase in ~~relation~~expenditures related to ~~an award modification due~~the conversion to ~~organizational restructuring.~~and implementation of a different Enterprise Resource and Planning system.

~~Interest Expense, net~~

Interest expense, net of amounts capitalized, decreased $7 million in the period-to-period comparison. For the nine months ended September 30, 2017, net interest expense is primarily comprised of interest on the Original CCR Credit Facility. No such interest expense was incurred during the nine months ended September 30, 2018.

Other business activities had a loss before income tax of $80 million for the nine months ended September 30, ~~2018,~~2019, compared to a loss before income tax of $2$80 million for the nine months ended September 30, ~~2017.~~2018. Variances are discussed below.

Terminal revenue consists of sales from the CONSOL Marine Terminal, which is located on approximately 200 acres in the Port of Baltimore, Maryland and provides access to international coal markets. CONSOL Marine Terminal sales were $51 million for the nine months ended September 30, 2019, compared to $48 million for the nine months ended September 30, ~~2018, compared to $43 million for the nine months ended September 30, 2017.~~2018. The $5$3 million increase in the period-to-period comparison was attributable to ana 0.4 million increase in throughput tons, as well as additional revenue earned in the ~~rates charged to process coal at~~current year from one of the ~~Terminal.~~Company's customers. This customer's contractual arrangement, entered into during the second half of 2018, contains a take-or-pay element, which provides a certain level of monthly throughput tons for a fixed amount.

Miscellaneous Other Income

Miscellaneous other income was $22 million for the nine months ended September 30, 2019, compared to $30 million for the nine months ended September 30, ~~2018, compared~~2018. The change is due to ~~$34~~the following items:



	For the Nine Months Ended September 30,
(in millions)	2019		2018		Variance
Royalty Income - Non-Operated Coal	$	17	$	19	$	(2	)
Property Easements and Option Income	1		5		(4		)
Rental Income	2		3		(1		)
Interest Income	2		2		—
Other Income	—		1		(1		)
Total Miscellaneous Other Income	$	22	$	30	$	(8	)

Operating and Other Costs

Operating and other costs were $62 million for the nine months ended September 30, ~~2017. The $4 million decrease is primarily attributable~~2019, compared to ~~a decrease in rental income as a result of the sale of certain subleased equipment to Murray Energy in the second quarter of 2017.~~

~~Gain on Sale of Assets~~

~~Gain on sale of assets decreased $7 million in the period-to-period comparison primarily due to the sale of certain coal reserves during the nine months ended September 30, 2017.~~

~~Operating and Other Costs~~

~~Operating and other costs were~~ $66 million for the nine months ended September 30, ~~2018, compared to $73 million for the nine months ended September 30, 2017.~~2018. Operating and other costs decreased in the period-to-period comparison due to the following items:

Depreciation, Depletion and Amortization

~~Employee-Related Legacy Liability Expense~~

Depreciation, depletion and amortization decreased$4 $6 million in the period-to-period comparison due to ~~modifications made~~current year adjustments to ~~the actuarial calculation of net periodic benefit cost at the beginning of each year.~~

~~Lease Rental Expense~~ ~~decreased~~$9 ~~million primarily due to the sale of certain subleased equipment to Murray Energy in the second quarter of 2017.~~

~~Depreciation, Depletion and Amortization~~

~~Depreciation, depletion and amortization increased $21 million in the period-to-period comparison, mainly as a result of a $19 million credit adjustment related to changes in~~ the Company's asset retirement obligations ~~during the nine months ended September 30, 2017.~~based on current projected cash outflows.

Selling, General and Administrative Costs

Selling, general and administrative costs are allocated to the Company's Other ~~Division~~division based on a percentage of total revenue and a percentage of total projected capital expenditures. The decrease of $3$2 million is a result of decreases in the portion of selling, general and administrative expenses allocated to the Other ~~Division~~division due to various transactions that occurred throughout both periods, none of which were individually material.

Loss on Debt Extinguishment

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 12 - Long-Term Debt in the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q for additional information.

Loss on debt extinguishment of $3 million was recognized in ~~the~~the nine months ended September 30, 2018 due to accelerated payments made on the Term Loan A Facility and the open market ~~repurchase~~repurchases of the Company's 11.00% Senior Secured Second Lien Notes due 2025.

Interest expense, net of amounts capitalized, ~~of $63 million for the nine months ended September 30, 2018~~ is comprised of interest on the Company's Senior Secured Credit Facilities, ~~and~~ the 11.00% Senior Secured Second Lien Notes ~~as well as interest on~~and the 5.75% MEDCO Revenue Bonds. Interest expense, net of amounts capitalized, decreased $13 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 ~~$5 million for~~the Company's Revolving Credit Facility, Term Loan A Facility and Term Loan B Facility, both of which occurred during the nine months ended September 30, ~~2017~~2019. The decrease in interest expense, net of amounts capitalized, is ~~comprised only~~also attributable to current year repurchases of ~~interest on~~ the ~~5.75% MEDCO Revenue Bonds.~~Company's 11.00% Senior Secured Second Lien Notes (see Note 19 - Stock, Unit and Debt Repurchase of the Notes to the Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).

Liquidity and Capital Resources

Historically, ParentCo provided capital, cash management and other treasury services to ParentCo's Coal Business, which ParentCo continued to provide until the separation was consummated on November 28, 2017. Following the separation, the Company's capital structure andCONSOL Energy expects its ongoing sources of liquidity ~~changed significantly from its historical capital structure. The Company no longer participates in capital management with ParentCo; rather, the Company's ability~~ to ~~fund its~~include cash needs depends on its ongoing ability to generate and raise cash in the future. Transfers of cash, both to and from ParentCo’s centralized cash management system, are reflected as a component of Other Parent Net Distributions in the Consolidated Statements of Cash Flows.

~~The cash flow~~ generated from operations, incash on hand, borrowings under the ~~first nine months~~revolving credit facility and securitization facility (which are discussed below), and, if necessary, the issuance of ~~2018 improved compared to the same period in 2017 due to strong demand from the export and domestic thermal markets.~~additional equity or debt securities. The Company believes that ~~this strong demand~~cash generated from these sources will ~~continue in the fourth quarter~~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 2018 and into 2019. In the first quarter of 2018, CONSOL Energy took advantage of a strong leasing market and bought out longwall shields, terminating the operating leases and refinancing them as capital leases. credit.

The financing rates on the new capital leases are significantly below the Company's weighted average cost of capital, and the transactions are immediately accretive to the Company's cash flows. In aggregate, the Company expects ~~an approximate $10 million reduction~~to generate adequate cash flow from operations in ~~2018 cash spending as a result of these refinancings. The financing charges on these capital leases are fixed~~2019 due to its strong contracted position and ~~will insulate the Company from future increases in interest rates. Furthermore, through~~ consistent cost control ~~measures, the Company expects to provide adequate cash flows to meet its maintenance capital requirements.~~measures. The Company started a capital construction project on the coarse refuse disposal area ~~project~~ in 2017, which is expected to continue through 2021. The Company's ~~2018~~2019 capital needs are expected to be between ~~$130~~$155 million to ~~$145~~$185 million, which is increased from ~~2017~~2018 levels due to additional expected capital expenditures related to the ~~refuse disposal area~~Itmann project, ~~as well as~~airshaft construction projects, and additional ~~maintenance equipment and other purchases.~~belt system related expenditures.

CONSOL Energy's coal is shipped to multiple geographies domestically and globally. From time to time, the Company changes its exposure to various countries depending on the economics and profitability of coal sales. Given that coal markets are global, the Company expects, if possible, to offset any potential adverse impact from tariffs that may be imposed by governments in the countries in which one or more of ~~our~~the Company's end users are located by reallocating its customer base to other countries or to the domestic U.S. markets.

CONSOL Energy believes its business will generate adequate cash flows and liquidity to meet reasonable increases in the cost of supplies that are passed on from suppliers. CONSOL Energy will also continue to seek alternate sources of supplies and replacement materials to offset any unexpected increase in the cost of supplies.

Uncertainty in the financial markets brings additional potential risks to CONSOL Energy. These risks include 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. CONSOL Energy believes that its current group of customers ~~is financially sound and represents no~~does not present any abnormal business risk.

CONSOL Energy expects its ongoing sources of liquidity to include cash generated from operations, cash on hand, borrowings under the revolving credit facility and A/R securitization facility (which are discussed below), and, if necessary, the issuance of additional equity or debt securities. The Company believes that cash generated from these sources will 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.

~~Following the separation, 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, ~~2018,~~2019, the Company had a ~~61.3%~~61.5% economic ownership interest in the Partnership through its various holdings of the general partner and limited partnership interests of the Partnership.

Cash Flows (in millions)

Cash provided by operating activities ~~increased $158~~decreased $107 million in the period-to-period comparison, primarily due to a ~~$26~~$57 million ~~increase~~decrease in net income, ~~a $31 million increase~~as well as changes in ~~depreciation, depletion and amortization~~stock/unit-based compensation expense, ~~a $13 million change in gain~~loss on ~~the sale of assets, and an $8 million change in~~debt extinguishment, deferred taxes ~~year over year. Changes in~~and other working capital changes that occurred throughout both ~~periods also contributed to the increase in operating cash flows.~~periods.

Cash used in investing activities increased ~~$62~~$34 million in the period-to-period comparison. Capital expenditures increased ~~$46 million~~ primarily due to an increase in airshaft construction projects and additional belt system related expenditures.



	For the Nine Months Ended September 30,
	2019		2018		Change
Building and Infrastructure	$	50	$	29	$	21
Equipment Purchases and Rebuilds	44		26		18
Refuse Storage Area	25		25		—
IS&T Infrastructure	5		8		(3		)
Other	7		9		(2		)
Total Capital Expenditures	$	131	$	97	$	34

Cash used in financing activities increased $112 million in the ~~refuse project expenditures. Additionally,~~period-to-period comparison. 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 12 - Long-Term Debt for additional information). The Company received additional proceeds ~~from~~on its Term Loan A Facility in the ~~sale~~amount of ~~assets decreased $17~~$26 million ~~primarily related to~~as a result of the ~~sale of surface rights and reserves~~debt refinancing that occurred during the nine months ended September 30, ~~2017.~~2019. In connection with the debt refinancing, approximately $20 million of financing-related fees and charges were paid.

~~Cash used in financing activities decreased $36 million in the period-to-period comparison.~~ During the nine months ended September 30, 2018, total payments of $50 million were made on the Company's Term Loan A Facility, Term Loan B Facility and 11.00% Senior Secured Second Lien Notes. Also during the nine months ended September 30, 2018, the Company paid ~~CNX Resources Corporation~~its former parent $18 million related to ~~deferred,~~the final settlement of shared, spin-related fees. ~~Prior to the separation and distribution, during the nine months ended September 30, 2017, the Company's net distributions to ParentCo were $115 million.~~

Senior Secured Credit Facilities

In ~~connection with the separation and distribution,~~November 2017, the Company entered into a revolving credit facility 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 (the “amendment”) 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. As a result, the principal amount outstanding under the TLA Facility was $100 million and the principal amount outstanding under the TLB Facility was $275 million. Borrowings under the ~~Company’s~~Company's Senior Secured Credit Facilities bear interest at a floating rate which can be, at the ~~Company’s~~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 reduced the applicable margin by 50 basis points on both the Revolving Credit Facility and the TLA Facility, and by 150 basis points on the TLB Facility. The amendment also extended the maturity dates of the Senior Secured Credit Facilities. The maturity date of the Revolving Credit and TLA Facilities ~~mature on~~was extended from November 28, ~~2021.~~2021 to March 28, 2023. The TLB ~~Facility matures on~~Facility's maturity date was extended from November 28, ~~2022. Starting with the quarter ending March 31, 2018,~~2022 to September 28, 2024. Beginning in June 2019, the TLA Facility will ~~amortize~~be amortized in equal quarterly installments of (i) 3.75% of the original principal amount thereof, for the first ~~eight~~four quarterly installments, (ii) 6.25% of the original principal amount thereof for the subsequent ~~four~~eight quarterly installments and (iii) ~~11.25%~~8.75% of the original principal amount thereof for the quarterly installments thereafter, with the remaining balance due at final maturity. ~~Starting with the quarter ending March 31, 2018,~~Beginning in June 2019, the TLB Facility

will ~~amortize~~be amortized in equal quarterly installments in an amount equal to 0.25% per annum of the ~~original~~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). 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 and (v) the 1.6 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 expanded the covenants relating to finance leases, general investments, joint venture investments and annual share repurchase baskets. The amendment also amended the restricted payments covenant to permit up to a $50 million annual dividend.



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



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



	For the Three Months Ended				For the Nine Months Ended
Amounts in thousands, except per share data	September 30,				September 30,
	2018		2017		2018		2017
Numerator:
Net Income	$	9,084	$	8,518	$	132,751	$	107,209
Less: Net Income Attributable to Noncontrolling Interest	3,350		790		19,447		10,567
Net Income Attributable to CONSOL Energy Inc. Shareholders	$	5,734	$	7,728	$	113,304	$	96,642

Denominator:
Weighted-average shares of common stock outstanding	27,982,538		27,967,509		28,011,488		27,967,509
Effect of dilutive shares	593,322		—		516,527		—
Weighted-average diluted shares of common stock outstanding	28,575,860		27,967,509		28,528,015		27,967,509

Earnings per Share:
Basic	$	0.20	$	0.28	$	4.04	$	3.46
Dilutive	$	0.20	$	0.28	$	3.97	$	3.46



	Fair Value Measurements at September 30, 2018							Fair Value Measurements at December 31, 2017
Description	Level 1		Level 2		Level 3			Level 1		Level 2		Level 3
Murray Energy Guarantees	$	—	$	—	$	(818	)	$	—	$	—	$	(1,040	)



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


•	An aggregate principal amount of $8 million in connection with asset-backed financing. Approximately $4 million is due in December 2020 at a weighted average interest rate of 6.35%, and approximately $4 million is due in September 2024 at an interest rate of 3.61%.



	(a)	(b)		(c)	(d)
Period	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (000s omitted) ⁽²⁾
July 1, 2018 - July 31, 2018	—	$	—	—	$	74,383
August 1, 2018 - August 31, 2018	—	$	—	—	$	74,383	⁽³⁾
September 1, 2018 - September 30, 2018	190,272	$	41.93	190,272	$	65,020	⁽⁴⁾
Total	190,272	$	41.93



Exhibits	Description	Method of Filing

~~10.1~~	Omnibus Amendment, dated as of August 30, 2018, by and among CONSOL Funding LLC, CONSOL Pennsylvania Coal Company LLC, CONSOL Thermal Holdings LLC, CONSOL Energy Inc., CONSOL Marine Terminal LLC and PNC Bank, N.A.	~~Filed as Exhibit 10.1 to Form 8-K (file No. 001-38147) filed on September 6, 2018~~

~~10.2~~*	~~CONSOL Energy Inc. Deferred Compensation Plan for Non-Employee Directors~~	~~Filed herewith~~

31.1	Certification of Chief Executive Officer pursuant to Section 302 of 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.~~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.~~2002	Filed herewith

95	Mine Safety and Health Administration Safety ~~Data.~~Data	Filed herewith

101	Interactive Data File (Form 10-Q for the quarterly period ended September 30, ~~2018,~~2019, furnished in Inline XBRL).	Filed herewith

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



	CONSOL ENERGY INC.

	By:		/s/ JAMES A. BROCK
			James A. Brock
			Director, Chief Executive Officer and President (~~Duly Authorized Officer and~~ Principal Executive Officer)

	By:		/s/ DAVID M. KHANI
			David M. Khani
			Chief Financial Officer ~~Executive Vice President and Treasurer~~ (~~Duly Authorized Officer and~~ Principal Financial Officer)

	By:		/s/ JOHN M. ROTHKA
			John M. Rothka
			Chief Accounting Officer (~~Duly Authorized Officer and~~ Principal Accounting Officer)