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ITEM 1.	CONDENSED FINANCIAL STATEMENTS

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(A)	Includes equity in earnings of unconsolidated affiliates of $4,240, $517 and $1,074 for Coal, Gas and All Other, respectively.

(B)	Includes investments in unconsolidated equity affiliates of $26,995, $24,570 and $49,386 for Coal, Gas and All Other, respectively.

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(C)	Includes equity in earnings of unconsolidated affiliates of $3,998, ($208) and $1,029 for Coal, Gas and All Other, respectively.

(D)	Includes investments in unconsolidated equity affiliates of $17,296, $23,866 and $45,962 for Coal, Gas and All Other, respectively.

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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In June 2011, the Bituminous Coal Operators Association (BCOA) and the United Mine Workers of America (UMWA) reached a new collective bargaining agreement which will run from July 1, 2011 to December 31, 2016. That agreement, National Bituminous Coal Wage Agreement of 2011 (2011 NBCWA) covers approximately 2,900 employees of CONSOL Energy subsidiaries. The 2011 NBCWA is the successor agreement to the 2007 NBCWA that was set to expire on December 31, 2011. Key elements of the new agreement include the following items:

a.	A wage increase of $1.00 per hour effective July 1, 2011, and an additional $1.00 per hour increase each January 1st throughout the contract term.

b.

Contributions to the 1974 Pension Plan, a multi-employer plan, will continue at the current rate of $5.50 per hour throughout the contract term. In accordance with the Pension Relief Act, the 1974 Pension Plan's Pension Protection Act zone status was recertified to the "green" zone status for the plan year beginning July 1, 2010. New inexperienced miners hired after December 31, 2011 will not participate in the 1974 Pension Plan, but will receive a $1.00 per hour contribution (increasing to $1.50 per hour in 2014-16) to the UMWA Cash Deferred Savings Plan (CDSP), which is a 401(k) Plan. UMWA represented employees with over 20 years of experience will receive a $1.00 per hour contribution (increasing to $1.50 per hour in 2014-16) to the CDSP beginning January 1, 2012. All current UMWA represented employees will be given the opportunity to opt-out of future participation in the 1974 Pension Plan and instead participate in the CDSP.

c.	A $1.50 per hour contribution starting January 1, 2012 to a new defined contribution plan to provide retiree bonus payments to eligible retirees in 2014, 2015 and 2016.

d.	An increased contribution from $0.50 per hour to $1.10 per hour effective January 1, 2012 to the 1993 Benefit Plan, which is a defined contribution plan providing health benefits to certain retirees.

e.	Various other changes related to absenteeism, contribution to various UMWA benefit funds, eligibility for various vacation days and sick days.

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In June 2011, CONSOL Energy management decided to permanently idle its Mine 84 underground facility. This facility had been on idle status since March 2009. Various options for the facility were explored, such as selling and operating with continuous miners, but management decided it was in the best interest of the Company to abandon the underground workings of this facility and reallocate resources into more profitable coal operations and Marcellus Shale drilling operations. The Company redeployed all the movable equipment that could be used at other locations. The abandonment of this underground facility resulted in a $115 million charge to pre-tax earnings in June 2011. See Note 8—Property, Plant and Equipment in the Notes to the Consolidated Financial Statements of this Form 10-Q for additional disclosure. The Company expects the closure of Mine 84 to result in pre-tax cash savings of $18 million per year.

•	In April 2011, CNX Gas entered into an amendment of its senior secured credit agreement which increases the availability under the agreement from $700 million to $1.0 billion, decreases the interest rate and extends the term from May 6, 2014 to April 12, 2016. The amended credit agreement continues to be secured by substantially all of the assets of CNX Gas and its subsidiaries.

•	In April 2011, CONSOL Energy amended and extended its existing $1.5 billion senior secured credit agreement, which decreases the interest rate and extends the term from May 7, 2014 to April 12, 2016. The amended agreement continues to be secured by substantially all of the assets of CONSOL Energy and certain of its subsidiaries.

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On March 9, 2011, CONSOL Energy issued $250 million of 6.375% senior notes due March 2021. The Notes are guaranteed by substantially all of the Company's existing and future wholly owned domestic restricted subsidiaries. The Company issued the Notes with the intention of using the net proceeds to repay its outstanding 7.875% senior secured notes due March 1, 2012, on or before their maturity. On April 11, 2011, CONSOL Energy redeemed all of its outstanding $250 million, 7.875% senior secured notes due March 1, 2012 in accordance with the terms of the indenture governing the notes. By using the proceeds of the $250 million, 6.375% senior Notes due March 2021 to affect this redemption, the Company effectively extended the maturity of the $250 million of long-term indebtedness nine years at a lower interest rate. The redemption price included principal of $250 million, a make-whole premium of $16 million and accrued interest of $2 million, for a total redemption cost of approximately $268 million. The loss on

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Challenges in the overall environment in which we operate create increased risks that we must continuously monitor and manage. These risks include (i) increased prices for commodities such as diesel fuel and synthetic rubber that we use in our operations, (ii) continued scrutiny of existing safety regulations and the development of new safety regulations, and (iii) potential changes and more stringent application of rules related to subsidence to surface structures and streams.

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Federal and state environmental regulators are reviewing our operations more closely and more strictly interpreting and enforcing existing environmental laws and regulations, resulting in increased costs and delays. For example, we entered into a consent decree with the U.S. Environmental Protection Agency and the West Virginia Department of Environmental Protection pursuant to which we agreed to construct an advanced technology mine water treatment plant and related facilities to reduce high levels of total dissolved solids in water discharges from certain of our mines in Northern West Virginia, at a total estimated cost of approximately $200 million; in 2011 we plan to complete construction of pipelines to convey mine water from our Shoemaker Mine and the closed Windsor Mine to approved mixing zones in the Ohio River; and we are experiencing delays in obtaining stream crossing permits that are required for the construction of gathering lines which are necessary for moving gas from our Marcellus Shale wells to market.

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On April 19, 2011 the Pennsylvania Department of Environmental Protection announced its intent to not renew permits for publicly owned treatment works (POTW) that treat municipal wastewater to accept wastewater from Marcellus Shale operators. They called on operators to cease delivering wastewater to the POTWs by May 19, 2011. CONSOL Energy has implemented a re-cycle and re-use process of its Marcellus derived water for fracing operations, and will only safely dispose of Marcellus wastewater in regulated, underground injection control wells.

•	CONSOL Energy continues to explore potential sales of non-core assets and options for monetizing a portion of its shale assets.

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•	Employee wages and related expenses increased $2 million which was primarily attributable to additional hiring of support staff in the period-to-period comparison.

•	Advertising and promotion expense increased $2 million in the period-to-period comparison due to additional campaigns initiated in the 2011 period.

•	Commission expense decreased $1 million in the period-to-period comparison due to the mix of coal brokers utilized.

•	Consulting and professional services decreased $2 million due to various corporate projects that occurred throughout both periods, none of which were individually material.

•	Miscellaneous selling, general and administrative expenses increased $3 million primarily due to various corporate projects that occurred throughout both periods, none of which were individually material.

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•	Average operating costs per steam ton sold increased due to fewer tons sold. Fixed costs are allocated over less tons; therefore, unit costs increased.

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Average operating supplies & maintenance cost per ton sold increased due to additional maintenance and equipment overhaul costs, additional roof control costs and higher fuel costs. Additional maintenance and equipment overhaul costs were related to additional equipment being serviced in the current period. Additional roof control costs resulted from changes in roof support strategy, such as using longer roof bolts and additional types of roof support, to improve the safety of our mines and to provide a more reliable source of production for our customers. Roof control costs also increased due to higher steel prices in the period-to-period comparison. Fuel costs have also increased in the period-to-period comparison which resulted in a higher average cost per ton sold.

•	Production taxes average cost per ton sold increased due to the $5.40 per ton higher average sales price.

•	Subsidence costs per ton sold increased due to more structures and higher costs related to these structures that were impacted by longwall mining in the period-to-period comparison. Subsidence costs have also increased due to an increase in the length of streams that were impacted by longwall mining in the period-to-period comparison.

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Labor and related benefits average costs per ton sold were impaired, although total dollars expensed for these items was improved slightly. Average costs per ton sold were impacted by the 0.7 million ton reduction in sales tons. Labor benefit costs were impacted by the Tax Relief and Health Care Act of 2006 authorizing general fund revenues and expanding transfers of interest from the Abandoned Mine Land trust fund to cover orphan retirees which remain in the Combined Fund, the 1992 Benefit Plan and the 1993 Plan. The additional federal funding eliminated the 2011 funding

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•	These increases in average operating costs per ton for steam coal were offset, in part, by lower contract mining fees. Fewer contractors were retained to mine our reserves in the period-to-period comparison without a corresponding reduction in total steam coal sold which has resulted in lower average unit costs per ton sold.

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Labor and related benefits increased due to higher employee counts, higher non-union benefit rates and higher contributions per hour worked to the 1974 Pension Trust (Trust). Higher non-union benefit rates for active employees were related to the continued increase in healthcare costs. Higher contributions made to the Trust were discussed in the steam coal segment. These increases were offset by lower overall contributions to certain multiemployer benefit plans such as the 1992 Fund, the 1993 Fund and the Combined Fund, which were also discussed in the steam coal segment. Increased labor and related benefit costs per unit sold were offset, in part, by additional volumes of high volatile metallurgical tons sold in the period-to-period comparison.

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Average operating supplies & maintenance cost per ton sold increased due to additional maintenance and equipment overhaul costs and additional roof control costs. Additional maintenance and equipment overhaul costs were related to additional equipment being serviced in the current period. Additional roof control costs resulted from changes in roof support strategy, such as using longer roof bolts and additional types of roof support, to improve the safety of our mines and to provide a more reliable source of production for our customers. Roof control costs also increased due to higher steel prices in the period-to-period comparison.

•	Production taxes average cost per ton sold increased due to the $3.32 per ton higher average sales price.

•	Subsidence costs per ton sold increased due to more structures and higher costs related to these structures that were impacted by longwall mining in the period-to-period comparison. Subsidence costs also increased due to an increase in the length of streams that were impacted by longwall mining in the period-to-period comparison.

•	Average preparation plant costs per ton sold increased due to additional maintenance projects completed at our preparation plants in the period-to-period comparison.

•	Average royalty costs per ton sold were lower in the period-to-period comparison due to fewer tons being mined from coal tracts that have a royalty, offset, in part, by higher average sales prices.

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•	Average operating costs per ton sold decreased due to higher tons sold. Fixed costs were allocated over more tons; therefore, unit costs decreased.

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•	Costs associated with the sales price of coal sold, such as royalties and production related taxes, increased due to the higher average sales prices received for low volatile metallurgical coal in the period-to-period comparison.

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Average operating supplies and maintenance costs per ton sold increased due to additional roof control, additional ventilation of coalbed methane gas and additional equipment overhaul costs. Additional roof control costs result from changes in roof support strategy, such as types of roof support used and quantity of support put into place. The roof control strategy was changed to improve the safety of the mine and to provide a more reliable source of production for our customers. Roof control costs also increased due to higher steel prices in the period-to-period comparison. Additional costs were incurred in the 2011 period to increase the number of bore holes that were placed ahead of mining to ventilate the coalbed methane gas from the mine. Additional maintenance and equipment overhaul costs are related to additional equipment being serviced in the current period.

•	Coal inventory volumes and carrying value remained relatively consistent at June 30, 2011 compared to March 31, 2011. Coal inventory volumes remained consistent at June 30, 2010 compared to March 31, 2010 although inventory carrying values declined. These changes in inventory caused an increase in average operating cost per ton sold in the period-to-period comparison.

•	Average operating costs per low volatile metallurgical tons sold decreased due to higher tons sold. Fixed costs are then spread over more tons, thereby decreasing unit costs.

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•	Labor and related benefits were improved on a cost per ton sold basis due to higher volumes sold. Labor and related benefit dollars spent were higher for the 2011 period compared to the 2010 period due to additional employees and increased non-union benefit rates for active employees which were related to the continued increase in healthcare costs.

•	Preparation plant and power average costs per ton sold were improved primarily due to higher tons sold.

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•	Abandonment of long-lived assets were $115 million for the three months ended June 30, 2011 as a result of the decision to permanently idle Mine 84.

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Freight expense is based on weight of coal shipped, negotiated freight rates and method of transportation (i.e. rail, barge, truck, etc.) used for the customers to which CONSOL Energy contractually provides transportation services. Freight revenue is the amount billed to customers for transportation costs incurred. Freight expense is offset in freight revenue. Freight expense increased $31 million primarily due to the 1.3 million ton increase in export tons in the period-to-period comparison.

•	Purchased coal costs increased approximately $31 million in the period-to-period comparison primarily due to differences in the quality of coal purchased and an increase in volumes of coal purchased in order to fulfill various contracts during a railroad bridge outage that occurred in the 2011 period.

•	Coal contract buyout costs increased $5 million as a result of a lower priced coal sales contract being bought out in order to sell the tons on a higher priced contract in a future period.

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Litigation expense of $15 million was recognized for the three months ended June 30, 2010 related to a settlement reached in June 2010. The litigation was related to water discharge from our Buchanan Mine being stored in mine voids of adjacent properties which were leased by CONSOL Energy subsidiaries. The settlement included $25 million of damages, of which $10 million was expensed in the first quarter of 2010 and $15 million was expensed in the second quarter of 2010.

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Closed and idle mine costs decreased approximately $24 million for the three months ended June 30, 2011 compared to the three months ended June 30, 2010. The decrease was the result of a $28 million increase in the Fola reclamation liability in the 2010 period as a result of market conditions, permitting issues, new regulatory requirements and resulting changes in mining plans. Also, closed and idle mine costs increased $4 million due to the results of the annual engineering survey adjustments and other changes in the operational status of various other mines, between idled and operating, throughout both periods, none of which were individually material.

•	Other expenses related to the coal segment were $5 million higher for the three months ended June 30, 2011 compared to the three months ended June 30, 2010. These increases were related to various transactions that occurred throughout both periods, none of which were individually material.

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Variable interest earnings were related to various adjustments a third party entity has reflected in its financial statements. CONSOL Energy holds no ownership interest, but guarantees bank loans the entity holds related to its purchases of drilling rigs. Also, CONSOL Energy is the main customer of the third party, and based on our analysis, is the primary beneficiary. Therefore, the entity was fully consolidated and the earnings impact was fully reversed in the non-controlling interest line as discussed below.

•	Legal fees were related to expenses for the special committee formed during the CNX Gas take-in transaction that occurred in the 2010 period.

•	Unutilized firm transportation represents excess pipeline transportation capacity that the gas division obtained to enable gas production to flow uninterrupted as the gas operations continues to increase sales volumes.

•	The short-term incentive compensation program is designed to increase compensation to eligible employees when CNX Gas reaches predetermined targets for safety, production and unit costs. Short-term incentive compensation expense remained consistent in the period-to-period comparison.

•	Bank fees were higher in the period-to-period comparison due to amending and extending the revolving credit facility related to the gas division. In April 2011, the facility was amended to allow $1 billion of borrowings and was extended to April 12, 2016.

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•	Employee wages and related expenses increased $6 million which was primarily attributable to the support staff retained in the Dominion Acquisition and additional hiring of support staff in the period-to-period comparison.

•	Advertising and promotion expense increased $4 million in the period-to-period comparison due to additional campaigns initiated in the 2011 period.

•	Demurrage charges increased $3 million due to additional export business by CONSOL Energy and other suppliers causing higher vessel traffic at the exporting facilities. The additional vessel traffic caused vessels to wait in the harbors for more days in the period-to-period comparison, resulting in additional expense.

•	Commission expense increased $1 million due to the increase in average sales price and additional tons sold for which a third party was owed a commission in the period-to-period comparison.

•	Consulting and professional services remained consistent in the period-to-period comparison.

•	Miscellaneous selling, general and administrative expenses increased $1 million due to various transactions that occurred throughout both periods, none of which were individually material.

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•	Average preparation costs per ton sold increased due to additional maintenance projects completed at our preparation plants in the period-to-period comparison.

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Average operating supplies & maintenance costs per ton sold increased due to additional maintenance and equipment overhaul costs and additional roof control costs. Additional maintenance and equipment overhaul costs are related to additional equipment being serviced in the current period. Additional roof control costs resulted from changes in roof support strategy, such as using longer roof bolts and additional types of roof support, to improve the safety of our mines and to provide a more reliable source of production for our customers.

•	Production taxes average cost per ton sold increased primarily due to the $4.18 per ton higher average sales price.

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Labor and related benefits were impaired slightly on a cost per ton sold basis due to higher costs, offset, in part by additional volumes sold. Higher benefit costs were due primarily to contributions made to the 1974 Pension Trust (the Trust), which is a multiemployer pension plan. Contributions to the Trust were negotiated under the National Bituminous Coal Wage Agreement. Contributions are based on a rate per hour worked by members of the United Mine Workers of America (UMWA). The contribution rate increased $0.50 per hour worked in the 2011 period compared to the 2010 period. Additional employees in the period-to-period comparison also contributed to higher labor costs. Non-union benefit rates for active employees also increased as a result of continued increases in healthcare costs. These increases were offset, in part, as a result of the Tax Relief and Health Care Act of 2006 authorizing general fund revenues and expanding transfers of interest from the Abandoned Mine Land trust fund to cover orphan retirees which remain in the Combined Fund, the 1992 Benefit Plan and the 1993 Plan. The additional federal funding eliminated the 2011 funding of orphan retirees by participating active employers of the plans, resulting in lower expense in the period-to-period comparison. The additional federal funding does not impact the amount of contributions required to

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•	Contract mining fees were lower due to fewer contractors being retained to mine our reserves in the period-to-period comparison.

•	Average operating costs per steam ton sold decreased due to higher tons sold. Fixed costs were allocated over more tons; therefore, unit cost decreased.

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Average operating supplies & maintenance cost per ton sold increased due to additional maintenance and equipment overhaul costs and additional roof control costs. Additional maintenance and equipment overhaul costs were related to additional equipment being serviced in the current period. Additional roof control costs resulted from changes in roof support strategy, such as using longer roof bolts and additional types of roof support, to improve the safety of our mines and to provide a more reliable source of production for our customers. Roof control costs also increased due to higher steel prices in the period-to-period comparison.

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Labor and related benefits increased due to higher employee counts, higher non-union benefit rates and higher contributions per hour worked to the 1974 Pension Trust (Trust). Labor and related benefits increased due to additional employees in the period-to-period comparison. Higher labor and related costs were also due to higher non-union benefit rates for active employees related to the continued increase in healthcare costs. Higher contributions made to the Trust were discussed in the steam coal segment. These increases were offset by lower overall contributions to certain multiemployer benefit plans such as the 1992 Fund, the 1993 Fund and the Combined Fund, which were also discussed in the steam coal segment. Increased labor and related benefit costs per unit sold were also offset, in part, by additional volumes of high volatile metallurgical tons sold in the period-to-period comparison.

•	Average coal preparation costs per ton sold increased due to additional maintenance projects that have been completed at our preparation plants in the period-to-period comparison.

•	Production taxes average cost per ton sold increased due to the $1.85 per ton higher average sales price.

•	Average operating costs per ton sold decreased due to higher tons sold. Fixed costs were allocated over more tons; therefore, unit costs decreased.

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Average operating supplies and maintenance costs per ton sold increased due to additional roof control costs, additional ventilation of coalbed methane gas and additional equipment overhaul costs. Additional roof control costs resulted from changes in roof support strategy, such as types of roof support used and quantity of support put into place. The roof control strategy was changed to improve the safety of the mine and to provide a more reliable source of production for our customers. Roof control costs also increased due to higher steel prices in the period-to-period comparison. Additional costs were incurred in the 2011 period to increase the number of bore holes that were placed ahead of mining to ventilate the coalbed methane gas from the mine. Additional maintenance and equipment overhaul costs are related to additional equipment being serviced in the current period.

•	Costs associated with the sales price of coal sold, such as royalties and production related taxes, increased due to the higher average sales prices received for low volatile metallurgical coal in the period-to-period comparison.

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Coal inventory volumes increased 0.1 million tons at June 30, 2011 compared to December 31, 2010 and carrying value increased $3.58 per ton in the corresponding period. Coal inventory decreased 0.2 million tons at June 30, 2010 compared to December 31, 2009 and the carrying value of the inventory during the corresponding period increased $8.07 per ton. These changes in inventory caused a reduction in average operating cost per ton sold in the period-to-period comparison.

•	Labor and related benefits were improved on a cost per ton sold basis due to higher volumes sold. Labor and related benefit dollars spent were higher in the 2011 period compared to the 2010 period due to additional employees and increased non-union benefit rates for active employees which were related to the continued increase in healthcare costs.

•	Preparation plant and power average cost per ton sold were improved primarily due to higher tons sold.

•	Average operating costs per low volatile metallurgical tons sold decreased due to higher tons sold. Fixed costs are then spread over more tons, thereby decreasing unit costs.

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•	Abandonment of long-lived assets were $115 million for the six months ended June 30, 2011 as a result of the decision to permanently idle Mine 84.

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Freight expense is based on weight of coal shipped, negotiated freight rates and method of transportation (i.e. rail, barge, truck, etc.) used by the customers to which CONSOL Energy contractually provides transportation services. Freight revenue is the amount billed to customers for transportation costs incurred. Freight expense is offset in freight revenue. The increase was primarily due to the 2.0 million ton increase in export tons in the period-to-period comparison.

•	Purchased coal costs increased approximately $20 million in the period-to-period comparison primarily due to differences in the quality of coal purchased and an increase in the volumes of coal purchased in the period-to-period comparison.

•	Coal contract buyout costs increased $5 million as a result of a lower priced coal sales contract being bought out in order to sell the tons on a higher priced contract in a future period.

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Closed and idle mine costs decreased approximately $54 million in the six months ended June 30, 2011 compared to the six months ended June 30, 2010. In the 2010 period, as a result of market conditions, permitting issues, new regulatory requirements and resulting changes in mining plans, the reclamation liability associated with the Fola mining operations in West Virginia was increased $54 million.

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Litigation expense of $25 million was recognized for the six months ended June 30, 2010 related to an anticipated legal settlement related to water discharge from our Buchanan Mine being stored in mine voids of adjacent properties which were leased by CONSOL Energy subsidiaries. Litigation expense was also recognized for the six months ended June 30, 2010 related to a settlement that included the sale of Jones Fork which resulted in a loss of $10 million.

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Other expenses related to the coal segment were $11 million higher for the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The increase was related to a $5 million charge for an additional liability due to Pennsylvania stream remediation and $6 million of the increase was related to various transactions that occurred throughout both periods, none of which were individually material.

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•	Unutilized firm transportation represents pipeline transportation capacity the gas segment has obtained to enable gas production to flow uninterrupted as the gas operations continues to increase sales volumes.

•	Stock-based compensation was higher in the period-to-period comparison primarily due to the increased allocation from CONSOL Energy as a result of the Dominion Acquisition as well as an increase in total CONSOL Energy stock-based compensation expense. Stock-based compensation costs are allocated to the gas segment based on revenue and capital expenditure projections between coal and gas.

•	Bank fees were higher in the period-to-period comparison due to amending and extending the revolving credit facility related to the gas segment. In April 2011, the facility was amended to allow $1 billion of borrowings and was extended to April 12, 2016.

•	The short-term incentive compensation program is designed to increase compensation to eligible employees when CNX Gas reaches predetermined targets for safety, production and unit costs. Short-term incentive compensation expense was higher for the 2011 period compared to the 2010 period due to the projected higher payouts related to the periods presented.

•	Variable interest earnings are related to various adjustments a third party entity has reflected in its financial statements. CONSOL Energy holds no ownership interest, but guarantees bank loans the entity holds related to its purchases of

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•	Other corporate related expense decreased $1 million in the period-to-period comparison due to various transactions that occurred throughout both periods, none of which were individually material.

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•	Interest expense increased $57 million primarily related to the additional interest expense on the long-term bonds that were issued in conjunction with the Dominion Acquisition.

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On April 11, 2011, CONSOL Energy redeemed all of its outstanding $250 million, 7.875% senior secured notes due March 1, 2012 in accordance with the terms of the indenture governing these notes. The redemption price included principal of $250 million, a make-whole premium of $16 million and accrued interest of $2 million for a total redemption cost of $268 million. The loss on extinguishment of debt was $16 million, which primarily represented the interest that would have been paid on these notes if held to maturity.

•	Bank fees increased $4 million primarily due to the bank facility being amended and extended on April 12, 2011.

•	Evaluation fees for non-core asset dispositions increased $3 million in the period-to-period comparison due to various corporate initiatives that began after the 2010 period.

•	Acquisition and financing fees of $61 million incurred in the three months ended June 30, 2010 primarily related to the Dominion Acquisition, as well as the equity and debt issuance that raised approximately $4.6 billion. There were no acquisition and financing fees in the 2011 period.

•	Other corporate items increased $3 million due to various transactions that occurred throughout both periods, none of which were individually material.

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Operating cash flow increased in 2011 due to higher net income attributable to CONSOL Energy shareholders in the period-to-period comparison. The 2011 net income included approximately $75 million of a reduction due to the abandonment of Mine 84 which is discussed further in Note 8—Property, Plant and Equipment, in the Consolidated Financial Statements included in this Form 10-Q. This reduction did not have a corresponding reduction to cash flows from operating activities because it was primarily related to the write-down of assets remaining at Mine 84 at the time of the abandonment, not a cash obligation.

•	Operating cash flows increased due to various changes in operating assets, operating liabilities, other assets and other liabilities which occurred throughout both years, none of which were individually material.

•	Operating cash flows increased due to income taxes paid of $81 million in the six months ended June 30, 2011 compared to $107 million in the six months ended June 30, 2010. Income tax payments vary from period-to-period based on many factors, including methodologies employed to maximize benefits to the Company and expected annual taxable income levels at the time payments are owed.

•	On April 30, 2010, CONSOL Energy paid $3.476 billion for the Dominion Acquisition. See Note 2—Acquisitions and Dispositions, in the Consolidated Financial Statements included in this Form 10-Q for additional details.

•	On May 28, 2010, CONSOL Energy paid $991 million to acquire the shares of CNX Gas common stock and vested stock options which it did not previously own.

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Total capital expenditures increased $7 million to $585 million in the six months ended June 30, 2011 compared to $578 million in the six months ended June 30, 2010. Capital expenditures for the gas segment increased $130 million due to the additional drilling in the period-to-period comparison. The increased gas segment capital was primarily due to the increased Marcellus Shale drilling. Capital expenditures for coal and other activities decreased $123 million in the period-to-period comparison. Face extension projects at various locations were lower by $67 million as a result of the majority of these projects being completed during the 2010 period, $13 million was incurred in the 2010 period as a result of a longwall shield lease buyout, the 2011 period was lower by approximately $21 million related to the Buchanan Reverse Osmosis (RO) system which was primarily completed before January 1, 2011, and a $63 million reduction related to airshafts and equipment expenditures throughout both periods. These reductions in coal and other capital were offset, in part by an approximate $41 million increase in expenditures related primarily to the ongoing development of the BMX Mine which is scheduled to go on-line in 2014.

•	Proceeds of $2.75 billion were received on April 1, 2010 in connection with the issuance of $1.5 billion of 8.00% senior unsecured notes due in 2017 and $1.25 billion of 8.25% senior unsecured notes due in 2020.

•	In 2010, proceeds of $1.83 billion were received in connection with the issuance of 44.3 million shares of common stock which was completed on March 31, 2010.

•	In 2011, CONSOL Energy repaid $130 million of borrowings under the accounts receivable securitization facility. In 2010, CONSOL Energy received proceeds of $150 million under this facility.

•	In 2011, CONSOL Energy paid $266 million, including a make-whole provision, to redeem the 7.875% notes that were due in March 2012.

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•	In 2011, CONSOL Energy paid outstanding borrowings of $155 million under the revolving credit facility. In 2010, CONSOL Energy paid $123 million under this facility.

•	Dividends of $45 million were paid in 2011 compared to $41 million in 2010. The increase was due to the 44.3 million additional shares issued on March 31, 2010.

•	In 2011, proceeds of $250 million were received in connection with the issuance of $250 million of 6.375% senior unsecured notes due in March 2021.

•	In 2011, CNX Gas, a wholly-owned subsidiary, received $132 million of proceeds from its revolving credit facility compared to receiving $9 million in 2010.

(a)	Long-term liabilities—employee related include other post-employment benefits, work-related injuries and illnesses. Estimated salaried retirement contributions required to meet minimum funding standards under ERISA are excluded from the pay-out table due to the uncertainty regarding amounts to be contributed. Estimated 2011 contributions are expected to approximate $71.7 million.

(b)	Other long-term liabilities include mine reclamation and closure and other long-term liability costs.

(c)	The significant obligation table does not include obligations to taxing authorities due to the uncertainty surrounding the ultimate settlement of amounts and timing of these obligations.

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•	An aggregate principal amount of $1.5 billion of 8.00% senior unsecured notes due in April 2017. Interest on the notes is payable April 1 and October 1 of each year. Payment of the principal and interest on the notes are guaranteed by most of CONSOL Energy’s subsidiaries.

•	An aggregate principal amount of $1.25 billion of 8.25% senior unsecured notes due in April 2020. Interest on the notes is payable April 1 and October 1 of each year. Payment of the principal and interest on the notes are guaranteed by most of CONSOL Energy’s subsidiaries.

•	An aggregate principal amount of $250 million of 6.375% notes due in March 2021. Interest on the notes is payable March 1 and September 1 of each year. Payment of the principal and interest on the notes are guaranteed by most of CONSOL Energy's subsidiaries.

•	An aggregate principal amount of $103 million of industrial revenue bonds which were issued to finance the Baltimore port facility and bear interest at 5.75% per annum and mature in September 2025. Interest on the industrial revenue bonds is payable March 1 and September 1 of each year.

•	$32 million in advance royalty commitments with an average interest rate of 7.56% per annum.

•	An aggregate principal amount of $8 million on a variable rate note due in December 2012 that bears interest at 4.28% at June 30, 2011. This note was incurred by a variable interest entity that is fully consolidated in which CONSOL Energy holds no ownership interest.

•	An aggregate principal amount of $65 million of capital leases with a weighted average interest rate of 6.46% per annum.

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•	deterioration in economic conditions in any of the industries in which our customers operate, or sustained uncertainty in financial markets cause conditions we cannot predict;

•	an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows;

•	our customers extending existing contracts or entering into new long-term contracts for coal;

•	our reliance on major customers;

•	our inability to collect payments from customers if their creditworthiness declines;

•	the disruption of rail, barge, gathering, processing and transportation facilities and other systems that deliver our coal and gas to market;

•	a loss of our competitive position because of the competitive nature of the coal and gas industries, or a loss of our

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•	our ability to negotiate a new agreement with the United Mine Workers' of America and our inability to maintain satisfactory labor relations;

•	coal users switching to other fuels in order to comply with various environmental standards related to coal combustion emissions;

•	the impact of potential, as well as any adopted regulations relating to greenhouse gas emissions on the demand for coal and natural gas, as well as the impact of any adopted regulations on our coal mining operations due to the venting of coalbed methane which occurs during mining;

•	foreign currency fluctuations could adversely affect the competitiveness of our coal abroad;

•	the risks inherent in coal and gas operations being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions which could impact financial results;

•	our focus on new gas development projects and exploration for gas in areas where we have little or no proven gas reserves;

•	decreases in the availability of, or increases in, the price of commodities and services used in our mining and gas operations, as well as our exposure under “take or pay” contracts we entered into with well service providers to obtain services of which if not used could impact our cost of production;

•	obtaining and renewing governmental permits and approvals for our coal and gas operations;

•	the effects of government regulation on the discharge into the water or air, and the disposal and clean-up of, hazardous substances and wastes generated during our coal and gas operations;

•	the effects of stringent federal and state employee health and safety regulations, including the ability of regulators to shut down a mine or well;

•	the potential for liabilities arising from environmental contamination or alleged environmental contamination in connection with our past or current coal and gas operations;

•	the effects of mine closing, reclamation, gas well closing and certain other liabilities;

•	uncertainties in estimating our economically recoverable coal and gas reserves;

•	costs associated with perfecting title for coal or gas rights on some of our properties;

•	the outcomes of various legal proceedings, which are more fully described in our reports filed under the Securities Exchange Act of 1934;

•	the impacts of various asbestos litigation claims;

•	increased exposure to employee related long-term liabilities;

•	increased exposure to multi-employer pension plan liabilities;

•	minimum funding requirements by the Pension Protection Act of 2006 (the Pension Act) coupled with the significant investment and plan asset losses suffered during the recent economic decline has exposed us to making additional required cash contributions to fund the pension benefit plans which we sponsor and the multi-employer pension benefit plans in which we participate;

•	lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan exceeding total service and interest cost in a plan year;

•	acquisitions that we recently have completed or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made and divestitures we anticipate may not occur or produce anticipated proceeds;

•	the anti-takeover effects of our rights plan could prevent a change of control;

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•	increased exposure on our financial performance due to the degree we are leveraged;

•	replacing our natural gas reserves, which if not replaced, will cause our gas reserves and gas production to decline;

•	our ability to acquire water supplies needed for gas drilling, or our ability to dispose of water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules;

•	our hedging activities may prevent us from benefiting from price increases and may expose us to other risks;

•	other factors discussed in our 2010 Form 10-K under “Risk Factors,” as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 4.	CONTROLS AND PROCEDURES

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ITEM 1.	LEGAL PROCEEDINGS

ITEM 5.	OTHER INFORMATION

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(1)	MSHA assigns an identification number to each coal mine and may or may not assign separate identification numbers to related facilities such as preparation plants. We are providing the information in the table by mining complex rather than MSHA identification number because that is how we manage and operate our coal mining business.

(2)

We have not included currently closed or idled mines in the above table. Our closed and/or idled mines received one Mine Act section 104 Significant & Substantial citations in the three months ended June 30, 2011. Total proposed assessments were $6 in the three months ending June 30, 2011. There were 11 legal actions in total pending before the Federal Mine Safety and Health Review Commission as of June 30, 2011 for our closed and/or idle mines. These actions may have been initiated in prior quarters.

(3)	Mine Act section 104(a) significant and substantial citations are for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.

(4)	Mine Act section 104(b) orders are for alleged failure to totally abate the subject matter of a Mine Act section 104(a) citation within the period specified in the citation.

(5)	Mine Act section 104(d) citations and orders are for an alleged unwarrantable failure (i.e. aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.

(6)	Includes proposed MSHA assessments received during the three months ended June 30, 2011 for all alleged violations. MSHA assessments are not necessarily made in the same period as the citation occurs.

(7)

Includes all legal actions pending before the Federal Mine Safety and Health Review Commission, together with the Administrative Law Judges thereof, for each of our mining complexes. These actions may have been initiated in prior quarters. All of the legal actions were initiated by us to contest citations, orders, or proposed assessments issued by MSHA, and if we are successful, may result in the reduction or dismissal of those citations, orders or assessments.

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(1)	MSHA assigns an identification number to each coal mine and may or may not assign separate identification numbers to related facilities such as preparation plants. We are providing the information in the table by mining complex rather than MSHA identification number because that is how we manage and operate our coal mining business.

(2)

We have not included currently closed or idled mines in the above table. Our closed and/or idled mines received five Mine Act section 104 Significant & Substantial citations in the six months ended June 30, 2011. Total proposed assessments were $34 in the six months ending June 30, 2011. There were 11 legal actions in total pending before the Federal Mine Safety and Health Review Commission as of June 30, 2011 for our closed and/or idle mines. These actions may have been initiated in prior quarters.

(3)	Mine Act section 104(a) significant and substantial citations are for alleged violations of a mining safety standard or regulation where there exists a reasonable likelihood that the hazard contributed to or will result in an injury or illness of a reasonably serious nature.

(4)	Mine Act section 104(b) orders are for alleged failure to totally abate the subject matter of a Mine Act section 104(a) citation within the period specified in the citation.

(5)	Mine Act section 104(d) citations and orders are for an alleged unwarrantable failure (i.e. aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.

(6)	Includes proposed MSHA assessments received during the six months ended June 30, 2011 for all alleged violations. The Company previously overstated the total dollar value of assessments at March 31, 2011 by $2.2 million. This column reflects the corrected amounts for the six months ending June 30, 2011. MSHA assessments are not necessarily made in the same period as the citation occurs.

(7)

Includes all legal actions pending before the Federal Mine Safety and Health Review Commission, together with the Administrative Law Judges thereof, for each of our mining complexes. These actions may have been initiated in prior quarters. All of the legal actions were initiated by us to contest citations, orders, or proposed assessments issued by MSHA, and if we are successful, may result in the reduction or dismissal of those citations, orders or assessments.

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ITEM 6.	EXHIBITS

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