Mason Hawkins Comments on CONSOL Energy

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Feb 11, 2015

CONSOL Energy (CNX) dropped 11% in the fourth quarter and for the year in full. CONSOL’s management team took productive action to increase shareholder value despite a difficult coal and gas environment. In the second half of the year, Chairman Brett Harvey and CEO Nick Deluliis completed an IPO (initial public offering) for a midstream MLP (master limited partnership) at metrics above our appraisal. CONSOL most recently announced it would form an MLP to house its thermal coal business and form a subsidiary to own its metallurgical coal properties. These transactions should bring the value of its coal assets forward, improve the transparency into the value of these assets, and provide additional vehicles to access capital markets, while allowing the company to control the assets and realize synergies across its businesses. In addition, CONSOL authorized a share repurchase program for up to approximately 3.6% of the company.

From Mason Hawkins (Trades, Portfolio)’ Longleaf Partners Fund Q4 2014 Management Discussion.