Company Quick10K Filing
Consol Coal Resources
Price1.00 EPS-36,577,000
Shares-0 P/E-0
MCap-0 P/FCF-0
Net Debt173 EBIT41
TEV173 TEV/EBIT4
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-K 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-02-08
10-Q 2018-09-30 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-16
10-Q 2017-09-30 Filed 2017-10-31
10-Q 2017-06-30 Filed 2017-08-01
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-02-08
10-Q 2016-09-30 Filed 2016-11-01
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-04-28
10-K 2015-12-31 Filed 2016-02-05
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-07-31
8-K 2020-11-05
8-K 2020-10-22
8-K 2020-08-10
8-K 2020-07-14
8-K 2020-06-15
8-K 2020-06-05
8-K 2020-05-11
8-K 2020-02-11
8-K 2019-12-27
8-K 2019-11-05
8-K 2019-08-06
8-K 2019-05-08
8-K 2019-03-28
8-K 2019-02-07
8-K 2018-11-01
8-K 2018-08-02
8-K 2018-05-03
8-K 2018-02-06

CCR 10Q Quarterly Report

Part I: Financial Information
Item 1.    Financial Statements
Note 1—Basis of Presentation:
Note 2—Revenue:
Note 3—Net (Loss) Income per Limited Partner and General Partner Interest:
Note 4—Credit Losses:
Note 5—Inventories:
Note 6—Property, Plant and Equipment:
Note 7—Other Accrued Liabilities:
Note 8—Long - Term Debt:
Note 9—Components of Coal Workers’ Pneumoconiosis (Cwp) and Workers’ Compensation Net Periodic Benefit Costs:
Note 10—Fair Value of Financial Instruments:
Note 11—Commitments and Contingent Liabilities:
Note 12—Receivables Financing Agreement
Note 13—Related Party:
Note 14—Long - Term Incentive Plan:
Note 15—Subsequent Events:
Part Ii: Other Information
EX-31.1 ex_200407.htm
EX-31.2 ex_200408.htm
EX-32.1 ex_200409.htm
EX-32.2 ex_200410.htm
EX-95 ex_200411.htm

Consol Coal Resources Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
51040830620410202013201520172020
Assets, Equity
1008060402002013201520172020
Rev, G Profit, Net Income
503112-7-26-452013201520172020
Ops, Inv, Fin

ccr20200630_10q.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


(Mark One)

  

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

For the quarterly period ended September 30, 2020

OR

  

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

 

For the transition period from                      to                     

Commission file number: 001-14901

 


CONSOL Coal Resources LP 

(Exact name of registrant as specified in its charter)

 

Delaware

 

47-3445032

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

1000 CONSOL Energy Drive, Suite 100

Canonsburg, PA 15317-6506

(724) 416-8300

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

 


 

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

 

  Title of each class 

Trading Symbol(s)

   Name of each exchange on which registered

Common Units representing limited partner interests

CCR

New York Stock Exchange

 

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

Yes  ☒    No  ☐

 

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

Yes  ☒    No   ☐

 

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

 

Large accelerated filer  ☐  Accelerated filer  ☒  Non-accelerated filer  ☐  Smaller Reporting Company    Emerging Growth Company 

 

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

 

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

 

CONSOL Coal Resources LP had 27,690,251 common units and a 1.7% general partner interest outstanding at October 28, 2020.

 

 

 

 
 

 

 

TABLE OF CONTENTS

 

 

 

Page

 

Part I. Financial Information

 

 

 

 

Item 1.

Financial Statements

4

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

4

 

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019

5

 

Consolidated Balance Sheets at September 30, 2020 and December 31, 2019

6

 

Consolidated Statement of Partners’ Capital for the three and nine months ended September 30, 2020 and 2019

7

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

8

 

Notes to the Consolidated Financial Statements

9

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

20

 

 

 

Item 4.

Controls and Procedures

34

 

 

 

 

Part II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

34

 

 

 

Item 1A.

Risk Factors

35

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

 

 

 

Item 4.

Mine Safety Disclosures

37

     
Item 5. Other Information 37

 

 

 

Item 6.

Exhibits

39

 

 

 

 

Signatures

40

 

 

 

 

Significant Relationships and Other Terms Referenced in this Quarterly Report

 

 

“CONSOL Coal Resources LP,” the “Partnership,” “we,” “our,” “us” and similar terms refer to CONSOL Coal Resources LP, a Delaware limited partnership, and its subsidiaries, with common units listed for trading on the New York Stock Exchange under the ticker “CCR”;

 

 

“Affiliated Company Credit Agreement” refers to an agreement entered into on November 28, 2017 among the Partnership and certain of its subsidiaries (collectively, the “Credit Parties”), CONSOL Energy, as lender and administrative agent, and PNC Bank, National Association, as collateral agent (“PNC”), as amended by Amendment No. 1 to Affiliated Company Credit Agreement, dated March 28, 2019 and Amendment No. 2 to Affiliated Company Credit Agreement, dated June 5, 2020. The Affiliated Company Credit Agreement provides for a revolving credit facility in an aggregate principal amount of up to $275 million to be provided by CONSOL Energy, as lender;

 

 

“common units” refer to the limited partner interests in CONSOL Coal Resources LP. The holders of common units are entitled to participate in partnership distributions and are entitled to exercise the rights or privileges of limited partners under the Partnership Agreement. The common units are listed on the New York Stock Exchange under the symbol “CCR”;

 

 

“CONSOL Energy” and our “sponsor” refer to CONSOL Energy Inc., a Delaware corporation and the parent of our general partner, and its subsidiaries other than our general partner, us and our subsidiaries;

 

 

“CONSOL Operating” refers to CONSOL Operating LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Partnership;

 

 

“CONSOL Thermal Holdings” refers to CONSOL Thermal Holdings LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of CONSOL Operating; CONSOL Thermal Holdings owns a 25% undivided interest in the assets, liabilities, revenues and expenses comprising the Pennsylvania Mining Complex;

 

 

“CPCC” refers to CONSOL Pennsylvania Coal Company LLC, a Delaware limited liability company and a wholly owned subsidiary of CONSOL Energy;

 

 

“general partner” refers to CONSOL Coal Resources GP LLC, a Delaware limited liability company and our general partner;

 

 

“Omnibus Agreement” refers to the Omnibus Agreement dated July 7, 2015, as replaced by the First Amended and Restated Omnibus Agreement dated as of September 30, 2016, and as amended by the First Amendment to the First Amended and Restated Omnibus Agreement, dated November 28, 2017;

 

 

“Partnership Agreement” refers to the Third Amended and Restated Partnership Agreement dated as of November 28, 2017;

 

 

“Pennsylvania Mining Complex” refers to the Bailey, Enlow Fork, and Harvey coal mines, coal reserves and related assets and operations, located primarily in southwestern Pennsylvania. The Pennsylvania Mining Complex is owned 75% by our sponsor and its subsidiaries and 25% by CONSOL Thermal Holdings;

 

 

“SEC” refers to the United States Securities and Exchange Commission; and

 

 

“subordinated units” refer to limited partner interests in CONSOL Coal Resources LP having the rights and obligations specified with respect to subordinated units in the Partnership Agreement. On August 16, 2019, all 11,611,067 subordinated units, which were owned entirely by CONSOL Energy Inc., were converted into common units on a one-for-one basis. As of the date of this Quarterly Report on Form 10-Q, there are no outstanding subordinated units.

 

 

 

PART I: FINANCIAL INFORMATION

 

ITEM 1.    FINANCIAL STATEMENTS

 

CONSOL COAL RESOURCES LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except unit data)

(unaudited)

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2020

  

2019

  

2020

  

2019

 

Coal Revenue

 $46,016  $75,385  $135,386  $246,166 

Freight Revenue

  3,227   900   4,785   3,529 

Other Income

  71   1,096   10,338   3,440 

Total Revenue and Other Income

  49,314   77,381   150,509   253,135 
                 

Operating and Other Costs 1

  33,912   53,998   106,976   164,542 

Depreciation, Depletion and Amortization

  12,305   11,086   35,753   33,639 

Freight Expense

  3,227   900   4,785   3,529 

Selling, General and Administrative Expenses 2

  2,879   2,840   9,285   10,353 

Interest Expense, Net 3

  2,520   1,587   6,929   4,495 

Total Costs

  54,843   70,411   163,728   216,558 

Net (Loss) Income

 $(5,529) $6,970  $(13,219) $36,577 
                 

Less: General Partner Interest in Net (Loss) Income

  (93)  118   (222)  617 

Limited Partner Interest in Net (Loss) Income

 $(5,436) $6,852  $(12,997) $35,960 
                 

Net (Loss) Income per Limited Partner Unit - Basic

 $(0.20) $0.25  $(0.47) $1.30 

Net (Loss) Income per Limited Partner Unit - Diluted

 $(0.20) $0.25  $(0.47) $1.30 
                 

Limited Partner Units Outstanding - Basic

  27,690,251   27,632,770   27,681,867   27,618,396 

Limited Partner Units Outstanding - Diluted

  27,690,251   27,667,477   27,681,867   27,654,684 
                 

Cash Distributions Declared per Unit 4

 $  $0.5125  $  $1.5375 

 

1 Related Party expenses of $1,006 and $838 for the three months ended and $2,715 and $2,368 for the nine months ended September 30, 2020 and September 30, 2019, respectively.

2 Related Party expenses of $1,770 and $1,902 for the three months ended and $6,427 and $6,932 for the nine months ended September 30, 2020 and September 30, 2019, respectively.

3 Related Party expenses of $2,336 and $1,587 for the three months ended and $6,397 and $4,495 for the nine months ended September 30, 2020 and September 30, 2019, respectively.

4 Represents the cash distributions declared related to the period presented.

 

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

 

 

 

CONSOL COAL RESOURCES LP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

 
   

2020

   

2019

   

2020

   

2019

 

Net (Loss) Income

  $ (5,529 )   $ 6,970     $ (13,219 )   $ 36,577  
                                 

Recognized Net Actuarial Gain (Loss)

    39       (5 )     116       (11 )

Other Comprehensive Income (Loss)

    39       (5 )     116       (11 )
                                 

Comprehensive (Loss) Income

  $ (5,490 )   $ 6,965     $ (13,103 )   $ 36,566  

 

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

 

 

 

CONSOL COAL RESOURCES LP

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

   

(unaudited)

         
   

September 30,

   

December 31,

 
   

2020

   

2019

 

ASSETS

               

Current Assets:

               

Cash

  $ 625     $ 543  

Trade Receivables, net

    24,887       32,769  

Other Receivables, net

    962       1,572  

Inventories

    13,178       12,653  

Prepaid Expenses

    4,086       5,746  

Total Current Assets

    43,738       53,283  

Property, Plant and Equipment:

               

Property, Plant and Equipment

    1,017,483       984,898  

Less—Accumulated Depreciation, Depletion and Amortization

    606,311       571,238  

Total Property, Plant and Equipment—Net

    411,172       413,660  

Other Assets:

               

Right of Use Asset—Operating Leases

    12,170       15,695  

Other Assets

    2,637       13,456  

Total Other Assets

    14,807       29,151  

TOTAL ASSETS

  $ 469,717     $ 496,094  
                 
                 

LIABILITIES AND PARTNERS’ CAPITAL

               

Current Liabilities:

               

Accounts Payable

  $ 15,796     $ 22,805  

Accounts Payable—Related Party

    8,035       1,419  

Current Portion of Long-Term Debt

    9,251       5,252  

Other Accrued Liabilities

    41,456       39,455  

Total Current Liabilities

    74,538       68,931  

Long-Term Debt:

               

Affiliated Company Credit Agreement—Related Party

    174,685       180,925  

Finance Lease Obligations

    5,198       1,645  

Total Long-Term Debt

    179,883       182,570  

Other Liabilities:

               

Pneumoconiosis Benefits

    6,754       6,028  

Workers’ Compensation

    3,998       3,611  

Asset Retirement Obligations

    11,315       10,801  

Operating Lease Liability

    8,178       11,507  

Other

    887       785  

Total Other Liabilities

    31,132       32,732  

TOTAL LIABILITIES

    285,553       284,233  

Partners’ Capital:

               

Common Units (27,690,251 Units Outstanding at September 30, 2020; 27,632,824 Units Outstanding at December 31, 2019)

    162,023       189,367  

General Partner Interest

    11,446       11,915  

Accumulated Other Comprehensive Income

    10,695       10,579  

Total Partners’ Capital

    184,164       211,861  

TOTAL LIABILITIES AND PARTNERS’ CAPITAL

  $ 469,717     $ 496,094  

 

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

 

 

 

CONSOL COAL RESOURCES LP

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(Dollars in thousands)

 

    Limited Partners             Accumulated Other Comprehensive          
   

Common

   

Subordinated

   

General Partner

   

Income

   

Total

 

Balance at December 31, 2019

  $ 189,367     $     $ 11,915     $ 10,579     $ 211,861  

(unaudited)

                                       

Net Income

    161             3             164  

Unitholder Distributions

    (14,191 )           (243 )           (14,434 )

Unit-Based Compensation

    159                         159  

Units Withheld for Taxes

    (217 )                       (217 )

Adoption of ASU 2016-013

    (247 )           (4 )           (251 )

Actuarially Determined Long-Term Liability Adjustments

                      39       39  

Balance at March 31, 2020

  $ 175,032     $     $ 11,671     $ 10,618     $ 197,321  

Net Loss

    (7,722 )           (132 )           (7,854 )

Unit-Based Compensation

    74                         74  

Actuarially Determined Long-Term Liability Adjustments

                      38       38  

Balance at June 30, 2020

  $ 167,384     $     $ 11,539     $ 10,656     $ 189,579  

Net Loss

    (5,436 )           (93 )           (5,529 )

Unit-Based Compensation

    75                         75  

Actuarially Determined Long-Term Liability Adjustments

                      39       39  

Balance at September 30, 2020

  $ 162,023     $     $ 11,446     $ 10,695     $ 184,164  

 

 

                                         
    Limited Partners             Accumulated Other Comprehensive Income          
   

Common

   

Subordinated

   

General Partner

   

(Loss)

   

Total

 

Balance at December 31, 2018

  $ 212,122     $ (11,421 )   $ 12,119     $ 11,920     $ 224,740  

(unaudited)

                                       

Net Income

    8,676       6,287       257             15,220  

Unitholder Distributions

    (8,211 )     (5,951 )     (243 )           (14,405 )

Unit-Based Compensation

    397                         397  

Units Withheld for Taxes

    (880 )                       (880 )

Actuarially Determined Long-Term Liability Adjustments

                      (3 )     (3 )

Balance at March 31, 2019

  $ 212,104     $ (11,085 )   $ 12,133     $ 11,917     $ 225,069  

Net Income

    8,201       5,944       242             14,387  

Unitholder Distributions

    (8,211 )     (5,950 )     (243 )           (14,404 )

Unit-Based Compensation

    341                         341  

Actuarially Determined Long-Term Liability Adjustments

                      (3 )     (3 )

Balance at June 30, 2019

  $ 212,435     $ (11,091 )   $ 12,132     $ 11,914     $ 225,390  

Net Income

    6,852             118             6,970  

Unitholder Distributions

    (8,211 )     (5,951 )     (243 )           (14,405 )
Conversion of Subordinated Units to Common Units1     (17,042 )     17,042                    

Unit-Based Compensation

    344                         344  

Actuarially Determined Long-Term Liability Adjustments

                      (5 )     (5 )

Balance at September 30, 2019

  $ 194,378     $     $ 12,007     $ 11,909     $ 218,294  

 

1All subordinated units were converted to common units on a one-for-one basis on August 16, 2019. For purposes of calculating net income per common and subordinated unit, the conversion of the subordinated units is deemed to have occurred on July 1, 2019. See Note 3 - Net (Loss) Income Per Limited Partner and General Partner Interest.

 

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

 

 

 

CONSOL COAL RESOURCES LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(unaudited)

 

  

Nine Months Ended

 
  

September 30,

 
  

2020

  

2019

 

Cash Flows from Operating Activities:

        

Net (Loss) Income

 $(13,219) $36,577 

Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities:

        

Depreciation, Depletion and Amortization

  35,753   33,639 

(Gain) Loss on Sale of Assets

  (59)  5 

Unit-Based Compensation

  308   1,082 

Changes in Operating Assets:

        

Trade and Other Receivables

  8,245   (4,353)

Inventories

  (525)  (273)

Prepaid Expenses

  1,660   (1,998)

Changes in Other Assets

  528   1,610 

Changes in Operating Liabilities:

        

Accounts Payable

  (6,344)  (2,041)

Accounts Payable—Related Party

  6,616   (949)

Other Operating Liabilities

  (61)  3,645 

Changes in Other Liabilities

  1,228   561 

Net Cash Provided by Operating Activities

  34,130   67,505 

Cash Flows from Investing Activities:

        

Capital Expenditures

  (13,172)  (29,354)
Proceeds from Sales of Assets  85   4 

Net Cash Used in Investing Activities

  (13,087)  (29,350)

Cash Flows from Financing Activities:

        

Proceeds from Finance Lease Obligations

  4,073    

Payments on Finance Lease Obligations

  (4,143)  (2,853)

Net (Payments on) Proceeds From Related Party Long-Term Notes

  (6,240)  18,400 

Payments for Unitholder Distributions

  (14,434)  (43,214)

Units Withheld for Taxes

  (217)  (880)

Net Cash Used in Financing Activities

  (20,961)  (28,547)

Net Increase in Cash

  82   9,608 

Cash at Beginning of Period

  543   1,003 

Cash at End of Period

 $625  $10,611 
         

Non-Cash Investing and Financing Activities:

        

Finance Lease

 $4,334  $ 

Other Equipment Financing

 $3,281  $959 

 

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

 

 

CONSOL COAL RESOURCES LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in thousands, except per unit amounts)

 

 

NOTE 1—BASIS OF PRESENTATION:

 

The accompanying unaudited Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. 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.

 

For the three and nine months ended September 30, 2020 and 2019, the unaudited Consolidated Financial Statements include the accounts of CONSOL Operating and CONSOL Thermal Holdings, wholly owned and controlled subsidiaries.

 

The Partnership is a master limited partnership formed on March 16, 2015 to manage and further develop all of our sponsor's active coal operations in Pennsylvania. As of September 30, 2020, the Partnership's assets are comprised of a 25% undivided interest in, and operational control over, the Pennsylvania Mining Complex. The Partnership's common units trade on the New York Stock Exchange under the ticker symbol “CCR.”

 

Recent Accounting Pronouncements:

 

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04 Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The Update also provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. Management has elected to apply this Update subsequent to March 12, 2020. Management does not expect this Update to have a material impact on the Partnership's financial statements.

 

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

 

9

 

 

NOTE 2—REVENUE:

 

The following table disaggregates our revenue from contracts with customers for the three and nine months ended September 30, 2020 and September 30, 2019:

 

   

Three Months Ended September 30,

   

Nine Months Ended September 30,

 
   

2020

   

2019

   

2020

   

2019

 

Coal Revenue

  $ 46,016     $ 75,385     $ 135,386     $ 246,166  
Freight Revenue     3,227       900       4,785       3,529  

Total Revenue from Contracts with Customers

  $

49,243

    $

76,285

    $ 140,171     $

249,695

 

 

Coal Revenue

 

Coal revenue is generally recognized when title passes to the customer and the price is fixed and determinable. Generally, title passes when coal is loaded at the central preparation facility and, on occasion, at terminal locations or other customer destinations. Our coal contract revenue per ton is fixed and determinable and adjusted for nominal quality adjustments. Some coal contracts also contain positive electric power price-related adjustments, which represent market-driven price adjustments, wherein there is no additional value exchanged, in addition to a fixed base price per ton. The Partnership's coal contracts generally do not allow for retroactive adjustments to pricing after title to the coal has passed.  Our 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 our contracts is based on the total amount of consideration to which we expect 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 our performance obligations based on relative standalone selling prices determined at contract inception. We have determined that each ton of coal represents a separate and distinct performance obligation. Some of our contracts span multiple years and have annual pricing modification provisions, based upon market-driven or inflationary adjustments, where no additional value is exchanged. Management believes that the invoice price is the most appropriate rate at which to recognize revenue.

 

While we do, from time to time, experience costs of obtaining coal customer contracts with amortization periods greater than one year, those costs are generally immaterial to our net income. As of and for the three and nine months ended September 30, 2020 and September 30, 2019, we do not have any capitalized costs to obtain customer contracts on our balance sheet nor have we recognized any amortization of previously existing capitalized costs of obtaining customer contracts. Further, the Partnership has not recognized any coal revenue in the current period from performance obligations satisfied (or partially satisfied) in previous periods.

 

Freight Revenue

 

Some of our coal contracts require that we sell our coal at locations other than our central preparation plant. The cost to transport our coal to the ultimate sales point is passed through to our customers and we recognize the freight revenue equal to the transportation cost when title of the coal passes to the customer.

 

Contract Balances

 

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

 

10

 

 

NOTE 3—NET (LOSS) INCOME PER LIMITED PARTNER AND GENERAL PARTNER INTEREST:

 

The Partnership allocates net income among our general partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, we allocate our net income to our limited partners and our general partner in accordance with the terms of our Partnership Agreement. We also allocate any earnings in excess of distributions to our limited partners and our general partner in accordance with the terms of our Partnership Agreement. We allocate any distributions in excess of earnings for the period to our general partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the incentive distribution rights, as set forth in the Partnership Agreement.

 

Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method.

 

On August 16, 2019, all 11,611,067 subordinated units were converted into common units on a one-for-one basis. For purposes of calculating net income per common and subordinated unit, the conversion of the subordinated units is deemed to have occurred on July 1, 2019. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership’s outstanding units representing limited partner interests. Upon payment of the cash distribution for the second quarter of 2019, the financial requirements for the conversion of all subordinated units were satisfied.

 

The following table illustrates the Partnership’s calculation of net (loss) income per unit for common and subordinated partner units:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2020

  

2019

  

2020

  

2019

 

Net (Loss) Income

 $(5,529) $6,970  $(13,219) $36,577 

Less: General Partner Interest in Net (Loss) Income

  (93)  118   (222)  617 

Net (Loss) Income Allocable to Limited Partner Units

 $(5,436) $6,852  $(12,997) $35,960 
                 

Limited Partner Interest in Net (Loss) Income - Common Units

 $(5,436) $6,852  $(12,997) $23,729 

Limited Partner Interest in Net Income - Subordinated Units

           12,231 

Limited Partner Interest in Net (Loss) Income - Basic & Diluted

 $(5,436) $6,852  $(12,997) $35,960 
                 

Weighted Average Limited Partner Units Outstanding - Basic

  27,690,251   27,632,770   27,681,867   27,618,396 
                 

Weighted Average Limited Partner Units Outstanding - Diluted

  27,690,251   27,667,477   27,681,867   27,654,684 
                 

Net (Loss) Income Per Limited Partner Unit - Basic

                

Common Units

 $(0.20) $0.25  $(0.47) $1.30 

Subordinated Units

 $  $  $  $1.05 

Net (Loss) Income Per Limited Partner Unit - Basic

 $(0.20) $0.25  $(0.47) $1.30 
                 

Net (Loss) Income Per Limited Partner Unit - Diluted

                

Common Units

 $(0.20) $0.25  $(0.47) $1.30 

Subordinated Units

 $  $  $  $1.05 

Net (Loss) Income Per Limited Partner Unit - Diluted

 $(0.20) $0.25  $(0.47) $1.30 

 

There were 33,705 and 37,669 phantom units excluded from the computation of the diluted earnings per unit, because their effect would be anti-dilutive for the three and nine months ended September 30, 2020, respectively.  There were no phantom units excluded from the computation of the diluted earnings per unit, because their effect would be anti-dilutive for the three and nine months ended September 30, 2019.

 

11

 

 

NOTE 4—CREDIT LOSSES:

 

Effective January 1, 2020, the Partnership adopted ASU 2016-013, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade and other receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under previous accounting guidance. The Partnership recorded a cumulative-effect adjustment to decrease retained earnings in the amount of $251 for expected credit losses on financial assets at the adoption date.

 

The following table illustrates the impact of ASC 326.

 

   

January 1, 2020

 
    As Reported Under ASC 326     Pre-ASC 326 Adoption     Impact of ASC 326 Adoption  
                         

Trade Receivables

  $ 763     $ 525     $ 238  

Other Receivables

    32       19       13  

Allowance for Credit Losses on Receivables

  $ 795     $ 544     $ 251  

 

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

 

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

 

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

 

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

 

   

Trade Receivables

   

Other Receivables

 
                 

Beginning Balance, January 1, 2020

  $ 525     $ 19  

Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings

    238       13  

Provision for expected credit losses

    135       (23 )

Ending Balance, September 30, 2020

  $ 898     $ 9  

 

12

 

 

NOTE 5—INVENTORIES:

 

   

September 30,

   

December 31,

 
   

2020

   

2019

 

Coal

  $ 1,628     $ 621  

Supplies

    11,550       12,032  

Total Inventories

  $ 13,178     $ 12,653  

 

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 our coal operations.

 

 

NOTE 6—PROPERTY, PLANT AND EQUIPMENT:

 

   

September 30,

   

December 31,

 
   

2020

   

2019

 

Coal and Other Plant and Equipment

  $ 695,504     $ 666,560  

Coal Properties and Surface Lands

    126,669       126,294  

Airshafts

    109,965       106,750  

Mine Development

    81,538       81,538  

Advance Mining Royalties

    3,807       3,756  

Total Property, Plant and Equipment

    1,017,483       984,898  

Less: Accumulated Depreciation, Depletion and Amortization

    606,311       571,238  

Total Property, Plant and Equipment, Net

  $ 411,172     $ 413,660  

 

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

 

As of September 30, 2020 and December 31, 2019, property, plant and equipment includes gross assets under finance lease of $20,891 and $12,596, respectively. Accumulated amortization for finance leases was $11,895 and $7,351 at  September 30, 2020 and December 31, 2019, respectively. Amortization expense for assets under finance leases approximated $1,537 and $966 for the three months ended September 30, 2020 and September 30, 2019 and $4,143 and $2,899 for the nine months ended September 30, 2020 and September 30, 2019, respectively, and is included in Depreciation, Depletion and Amortization in the accompanying unaudited Consolidated Statements of Operations.

 

13

 

 

NOTE 7—OTHER ACCRUED LIABILITIES:

 

   

September 30,

   

December 31,

 
   

2020

   

2019

 

Subsidence Liability

  $ 22,479     $ 22,661  

Accrued Payroll and Benefits

    3,580       4,460  

Accrued Interest (Related Party)

    3,195       2,541  
Accrued Equipment Obligations     2,524        

Other

    2,152       2,304  

Current Portion of Long-Term Liabilities:

               

Operating Lease Liability

    4,877       4,753  

Workers’ Compensation

    1,452       1,423  

Asset Retirement Obligations

    830       954  

Pneumoconiosis Benefits

    219       201  

Long-Term Disability

    148       158  

Total Other Accrued Liabilities

  $ 41,456     $ 39,455  

 

 

NOTE 8—LONG-TERM DEBT:

 

  

September 30,

  

December 31,

 
  

2020

  

2019

 

Affiliated Company Credit Agreement (5.00% interest rate at September 30, 2020 and 4.00% interest rate at December 31, 2019)

 $174,685  $180,925 

Other Asset-Backed Financing Maturing in December 2020, 4.41% and 5.96% Weighted Average Interest Rate at September 30, 2020 and December 31, 2019, respectively

  4,723   1,443 
   179,408   182,368 

Less: Amounts Due in One Year*

  4,723   1,443 

Long-Term Debt

 $174,685  $180,925 

 

* Excludes current portion of Finance Lease Obligations of $4,528 and at $3,809 at September 30, 2020 and December 31, 2019, respectively.

    

Affiliated Company Credit Agreement

 

On November 28, 2017, the Partnership and the other Credit Parties entered into the Affiliated Company Credit Agreement by and among the Credit Parties, CONSOL Energy, as lender and administrative agent, and PNC. On June 5, 2020, the Partnership amended the Affiliated Company Credit Agreement to provide eight quarters of financial covenant relaxation, effected a 50 basis points increase in the rate at which borrowings under the Affiliated Company Credit Agreement bear interest, and added additional conditions to be met for the covenants relating to general investments, investments in unrestricted subsidiaries, and distributions to equity holders of the Partnership. The Affiliated Company Credit Agreement has a maturity date of  December 28, 2024. The Affiliated Company Credit Agreement provides for a revolving credit facility in an aggregate principal amount of up to $275,000 to be provided by CONSOL Energy, as lender. In connection with the Partnership’s entry into the Affiliated Company Credit Agreement, the Partnership made an initial draw of $200,583, the net proceeds of which were used to repay the amounts outstanding under the Partnership's prior credit facility. Additional drawings under the Affiliated Company Credit Agreement are available for general partnership purposes. The obligations under the Affiliated Company Credit Agreement are guaranteed by the Partnership’s subsidiaries and secured by substantially all of the assets of the Partnership and its subsidiaries pursuant to the security agreement and various mortgages.

 

Interest on outstanding obligations under our Affiliated Company Credit Agreement accrues at a fixed rate ranging from 4.25% to 5.25%, depending on the total net leverage ratio. The unused portion of our Affiliated Company Credit Agreement is subject to a commitment fee of 0.50% per annum. The Partnership had available capacity under the Affiliated Company Credit Agreement of $100,315 and $94,075 as of September 30, 2020 and December 31, 2019, respectively.

 

        The Affiliated Company Credit Agreement contains certain covenants and conditions that, among other things, limit the Partnership’s ability to: (i) incur or guarantee additional debt; (ii) make cash distributions; provided that we will be able to make cash distributions of available cash to partners so long as the Partnership's first lien gross leverage ratio shall not be greater than 2.00 to 1.00, the fixed charge coverage ratio shall be not less than 1.00 to 1.00, and no event of default is continuing or would result therefrom; (iii) incur certain liens or permit them to exist; (iv) make particular investments and loans; provided that we will be able to increase our ownership percentage of our undivided interest in the Pennsylvania Mining Complex and make investments in the Pennsylvania Mining Complex in accordance with our ratable ownership; (v) enter into certain types of transactions with affiliates; (vi) merge or consolidate with another company; and (vii) transfer, sell or otherwise dispose of assets. The Partnership is also subject to covenants that require the Partnership to maintain certain financial ratios, each of which will be calculated on a consolidated basis for the Partnership and its restricted subsidiaries at the end of each fiscal quarter.  The amendment revised the financial covenants in the Affiliated Company Credit Agreement, so that for the fiscal quarters ending June 30, 2020 through March 31, 2021, the maximum first lien gross leverage ratio shall be 3.75 to 1.00 and the maximum total net leverage ratio shall be 4.00 to 1.00; for the fiscal quarters ending June 30, 2021 through September 30, 2021, the maximum first lien gross leverage ratio shall be 3.50 to 1.00 and the maximum total net leverage ratio shall be 3.75 to 1.00; for the fiscal quarters ending December 31, 2021 through March 31, 2022, the maximum first lien gross leverage ratio shall be 3.00 to 1.00 and the maximum total net leverage ratio shall be 3.50 to 1.00; and for the fiscal quarters ending on or after June 30, 2022, the maximum first lien gross leverage ratio shall be 2.75 to 1.00 and the maximum total net leverage ratio shall be 3.25 to 1.00. At September 30, 2020, the Partnership was in compliance with its financial covenants with a first lien gross leverage ratio of 3.41 to 1.00 and a total net leverage ratio of 3.40 to 1.00. The Partnership is continuing to actively monitor the effects of the ongoing COVID-19 pandemic on its liquidity.

 

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Other Asset-Backed Financing

 

As of September 30, 2020 and December 31, 2019, the Partnership was a borrower under an asset-backed financing arrangement related to certain equipment. The equipment, which had an approximate value of $4,723 and $1,443, respectively, fully collateralizes the loan.

 

 

NOTE 9—COMPONENTS OF COAL WORKERS’ PNEUMOCONIOSIS (CWP) AND WORKERS’ COMPENSATION NET PERIODIC BENEFIT COSTS:

 

The Partnership is obligated to CONSOL Energy for medical and disability benefits to certain CPCC employees and their dependents resulting from occurrences of coal workers’ pneumoconiosis disease and is also obligated to CONSOL Energy to compensate certain individuals who are entitled benefits under workers’ compensation laws.

 

   

CWP

   

Workers’ Compensation

 
   

Three Months Ended

   

Nine Months Ended

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

September 30,

   

September 30,

   

September 30,

 
   

2020

   

2019

   

2020

   

2019

   

2020

   

2019

   

2020

   

2019

 

Service Cost

  $ 254     $ 200     $ 762     $ 600     $ 386     $ 349     $ 1,157     $ 1,046  

Interest Cost

    45       49       135       146       31       41       95       124  

Amortization of Actuarial Loss (Gain)

    41       6       122       19       (8 )     (12 )     (25 )     (37 )

State Administrative Fees and Insurance Bond Premiums

                            43       53       135       149  

Net Periodic Benefit Cost

  $ 340     $ 255     $ 1,019     $ 765     $ 452     $ 431     $ 1,362     $ 1,282  

 

 

NOTE 10—FAIR VALUE OF FINANCIAL INSTRUMENTS:

 

The Partnership 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 Partnership’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.

 

15

 

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 Partnership’s third party guarantees are the credit risk of the third party and the third party surety bond markets.

 

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

 

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

 

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

 

   

September 30, 2020

   

December 31, 2019

 
   

Carrying

   

Fair

   

Carrying

   

Fair

 
   

Amount

   

Value

   

Amount

   

Value

 

Affiliated Company Credit Agreement—Related Party

  $ 174,685     $ 157,217     $ 180,925     $ 180,925  

 

The Partnership’s debt obligations are valued through reference to the applicable underlying benchmark rate and, as a result, constitute Level 2 fair value measurements.

 

 

NOTE 11—COMMITMENTS AND CONTINGENT LIABILITIES:

 

         The Partnership 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 its business. We accrue the estimated loss for these lawsuits and claims when the loss is probable and can be estimated. Our current estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of the Partnership. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the financial position, results of operations or cash flows of the Partnership; however, such amounts cannot be reasonably estimated.

 

At September 30, 2020, the Partnership was contractually obligated to CONSOL Energy for financial guarantees and letters of credit to certain third parties which were issued by CONSOL Energy on behalf of the Partnership. The maximum potential total of future payments that we could be required to make under these instruments is $103,563. The instruments are comprised of $691 of letters of credit expiring within the next year, $94,357 of environmental surety bonds expiring within the next three years, and $8,515 of employee-related and other surety bonds expiring within the next three years. Employee-related financial guarantees have primarily been provided to support various state workers’ compensation and federal black lung self-insurance programs. Environmental financial guarantees have primarily been provided to support various performance bonds related to reclamation and other environmental issues. 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. 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 on the financial statements. The Partnership’s management believes that these guarantees will expire without being funded, and therefore the commitments will not have a material adverse effect on the financial condition of the Partnership.

 

 

NOTE 12RECEIVABLES FINANCING AGREEMENT

 

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

 

16

 

Pursuant to the Securitization, (i) CONSOL Thermal Holdings will sell current and future trade receivables to CPCC and (ii) the Originators will sell and/or contribute current and future trade receivables (including receivables sold to CPCC by CONSOL Thermal Holdings) to the SPV and the SPV will, in turn, pledge its interests in the receivables to PNC, which will either make loans or issue letters of credit on behalf of the SPV. The maximum amount of advances and letters of credit outstanding under the Securitization may not exceed $100,000. Loans under the Securitization will accrue interest at a reserve-adjusted LIBOR market index rate equal to the one-month Eurodollar rate. Loans and letters of credit under the Securitization also will accrue a program fee and 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. The SPV’s assets and credit are not available to satisfy the debts and obligations owed to the creditors of CONSOL Energy, CONSOL Thermal Holdings or any of the Originators. CONSOL Thermal Holdings, the Originators and CPCC as servicer are independently liable for their own customary representations, warranties, covenants and indemnities. In addition, CONSOL Energy has guaranteed the performance of the obligations of CONSOL Thermal Holdings, the Originators and CPCC as servicer, and will guarantee the obligations of any additional originators or successor servicer that may become party to the Securitization. However, neither CONSOL Energy nor its affiliates will guarantee collectability of receivables or the creditworthiness of obligors thereunder.

 

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

 

As of September 30, 2020 and December 31, 2019, respectively, the Partnership, through CONSOL Thermal Holdings, had sold $25,785 and $33,294 of trade receivables to CPCC. The Partnership has not derecognized the receivables due to its continued involvement in the collections efforts.

 

 

NOTE 13RELATED PARTY:

 

Omnibus Agreement

 

The Partnership is a party to the Omnibus Agreement, dated September 30, 2016, as amended on November 28, 2017, with our sponsor and certain of its subsidiaries. Under the Omnibus Agreement, we are obligated to make certain payments to, and reimburse, CONSOL Energy for the provision of certain services in connection with our operations.

 

Charges for services from CONSOL Energy under the Omnibus Agreement include the following:

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2020

  

2019

  

2020

  

2019

 

Operating and Other Costs

 $1,006  $838  $2,715  $2,368 

Selling, General and Administrative Expenses

  1,770   1,902   6,427   6,932 

Total Services from CONSOL Energy

 $2,776  $2,740  $9,142  $9,300 

 

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

 

Affiliated Company Credit Agreement

 

As described in Note 8, the Partnership is also a party to the Affiliated Company Credit Agreement with CONSOL Energy.

 

17

 

For the three and nine months ended September 30, 2020, $2,428 and $6,705 of interest was incurred under the Affiliated Company Credit Agreement, respectively, of which $92 and $308 was capitalized and included in Property, Plant and Equipment in the unaudited Consolidated Balance Sheets, respectively.  For the three and nine months ended September 30, 2019, $2,003 and $5,770 of interest was incurred under the Affiliated Company Credit Agreement, respectively, of which $416 and $1,275 was capitalized and included in Property, Plant and Equipment in the unaudited Consolidated Balance Sheets, respectively. Interest is calculated based upon a fixed rate, determined quarterly, depending on the total net leverage ratio. For the three and nine months ended September 30, 2020, the average interest rate was 4.88% and