November 2, 2021 - Today, CONSOL Energy Inc. (NYSE: CEIX) reported financial and operating results for the period ended September 30, 2021.

Third Quarter 2021 Highlights Include:

• GAAP net loss of ($113.8) million, which includes $147.3 million of pre-tax unrealized mark-to-market losses related to commodity derivatives;

• Quarterly adjusted EBITDA¹ of $66.6 million;

• Net cash provided by operating activities of $80.5 million;

• Quarterly free cash flow¹ of $34.8 million;

• Coal shipments of 5.4 million tons;

• 2022 and 2023 contracted position of 20.2 million and 5.8 million tons, respectively;

• Cash and cash equivalents of $162.0 million plus $50.3 million in restricted cash as of September 30, 2021;

• Reduced total debt outstanding by $18.4 million during the quarter;

• Net leverage ratio¹ of 1.64x as of September 30, 2021;

• Recently announced direct-operating greenhouse gas emissions targets, aiming to reduce Scope 1 and 2 emissions by 50% by the end of 2026 and to be net zero by 2040; and

• Recommencing development for the 5th longwall at the Pennsylvania Mining Complex, which is expected to resume operation in late 4Q22.

Management Comments

"In the third quarter of 2021, customer demand remained strong, and we generated nearly $35 million in free cash flow¹, while reducing our absolute debt levels by $18 million," said Jimmy Brock, President and Chief Executive Officer of CONSOL Energy Inc. "Additionally, we are very excited by our recently announced direct-operating greenhouse gas emission reduction targets, aiming to reduce our Scope 1 and 2 emissions by 50% by 2026, compared to baseline 2019 levels, and be net zero by 2040. The third quarter is typically a seasonally weak quarter due to planned maintenance shutdowns, and the Pennsylvania Mining Complex (PAMC) also encountered several operational issues and transportation delays that limited production to 5.3 million tons in the third quarter of 2021. Nevertheless, demand for our product remains robust, and due to the strength in both the domestic and international coal markets, we are pleased to announce that we have restarted development for the fifth longwall at the PAMC to capture upside potential. During the third quarter of 2021, we successfully secured new contracted business across 2022 and 2023. Progress on the Itmann preparation plant continues and remains on schedule and on budget, positioning us for additional upside in 2022."

"On the safety front, our Enlow Fork Mine, Bailey Preparation Plant, CONSOL Marine Terminal (CMT) and Itmann project each had ZERO employee recordable incidents during the third quarter of 2021. Our year-to-date total recordable incident rate at the PAMC continues to track significantly and consistently below the national average for underground bituminous coal mines."

Pennsylvania Mining Complex Review and Outlook

PAMC Sales and Marketing

Our marketing team sold 5.4 million tons of coal during the third quarter of 2021 at an average revenue per ton of $47.46, compared to 4.5 million tons at an average revenue per ton of $40.55 in the year-ago period. Demand for our product has remained robust and was improved compared to the prior-year quarter, which was impacted by the COVID-19 demand decline in early 2020.

In the domestic market, the pricing environment continued to significantly improve during the third quarter of 2021. The average PJM West day-ahead power price and average Henry Hub natural gas spot price ended 3Q21 improved by 84% and 118%, respectively, compared to the year-ago quarter. Driven by these improved market fundamentals and continued tightness in supply, IHS Markit estimates that total U.S. coal demand in 2021 will increase by 110 million tons versus 2020 levels, while total U.S. coal production will improve by only 59 million tons. As such, coal inventories are in decline. The U.S. Energy Information Administration (EIA) reports that August coal inventory levels at domestic power plants were reduced by nearly 35% compared to year-ago levels and by about 37% since the start of 2021, standing at approximately 84 million tons. Additionally, the EIA estimates that these inventory levels will continue to decline through the remainder of the year, finishing 2021 at approximately 73 million tons, or approximately 45% below year-end 2020 levels. These year-end 2021 estimates are reduced by more than 32% compared to estimates from just three months ago in July 2021. Consistent with these trends, the majority of our domestic customer stockpiles are below target levels for this time of year. As such, we have seen domestic customer demand increase and have remained opportunistic in securing additional coal sales contracts for 2022 and 2023, bringing our contracted positions for those years to 20.2 million and 5.8 million tons, respectively.

On the export front, seaborne thermal coal markets continued to strengthen throughout the third quarter of 2021. API2 spot prices continued to move substantially higher in the third quarter of 2021, ending 3Q21 improved by 193% compared to 3Q20. Global LNG prices have continued to remain elevated with the Asian spot market benchmark price (JKM) ending the third quarter of 2021 more than five times higher than the third quarter of 2020. As a result of the continued strength in the international coal markets, IHS Markit estimates that U.S. thermal coal exports will improve by 57% and 54% in 2021 and 2022, respectively, compared to 2020 levels.

Operations Summary

During the third quarter of 2021, we ran four longwalls at the PAMC, but operational and geological issues, transportation delays and a planned maintenance shutdown limited our production in the quarter. The PAMC produced 5.3 million tons in 3Q21, compared to 4.5 million tons in the year-ago quarter. This improvement compared to the prior year was due to the increased demand for our product, as coal markets were beginning to recover from the COVID-related demand decline in 3Q20. Despite the challenges in the recent quarter, demand for our product remains strong. As such, we have recommenced development of the 5th longwall located at our Enlow Fork Mine, which we expect to be operational in late 4Q22.

CEIX's total costs and expenses during the third quarter of 2021 were $303.1 million compared to $246.7 million in the year-ago quarter, and CEIX's total coal revenue during the third quarter was $258.6 million compared to $184.4 million in the year-ago period. However, total revenue in 3Q21 was impacted by $147.3 million of pre-tax unrealized mark-to-market losses related to commodity derivatives. Average cash cost of coal sold per ton¹ for the third quarter was $30.64, compared to $28.64 in the year-ago quarter. The significant increase was primarily due to the unforeseen operational and geological challenges experienced in the current quarter, which weighed on production as well as maintenance, supply, contractors and project expenses.

CONSOL Marine Terminal Review

For the third quarter of 2021, throughput volumes at the CMT were 2.8 million tons, compared to 2.0 million tons in the year-ago period. Terminal revenues and CMT total costs and expenses were $14.1 million and $10.2 million, respectively, compared to $17.0 million and $8.9 million, respectively, during the year-ago period. CMT operating cash costs¹ were $5.8 million in 3Q21, compared to $4.8 million in 3Q20. The increase in cash cost was driven by the increase in throughput tons versus 3Q20. However, revenue was impaired in 3Q21 compared to 3Q20 due to the take-or-pay contract that was in place in the prior-year period. Accordingly, CONSOL Marine Terminal net income and CONSOL Marine Terminal Adjusted EBITDA¹ were $4.5 million and $7.3 million, respectively, in the third quarter of 2021 compared to $8.4 million and $11.3 million, respectively, in the year-ago period.

Debt Repurchases Update

During the third quarter of 2021, CEIX made repayments of $12.5 million, $6.4 million and $0.7 million on our Term Loan A, equipment-financed debt and Term Loan B, respectively. Additionally, CEIX repurchased $2.9 million in principal amount of its second lien notes. This brings our total debt payments and repurchases in the quarter to $22.6 million.

2021 Guidance and Outlook

Based on our current contracted position, estimated prices and production plans, we are providing the following updated financial and operating performance guidance for 2021:

• 2021 targeted coal sales volume of 23.5-24.5 million tons

• Fully contracted for 2021 at an average revenue per ton of $46.26/ton, assuming PJM West power forwards of $54.84/MWh (priced as of October 1, 2021 for 4Q21)

• Average cash cost of coal sold per ton² expectation of $27.50-$28.50/ton

• Capital expenditures of $150-$170 million including the Itmann project

To see the full results with financial figures included, click here.