x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 51-0337383 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Class | Shares outstanding as of October 16, 2018 | |
Common stock, $0.01 par value | 203,599,810 |
TABLE OF CONTENTS | ||
Page | ||
PART I FINANCIAL INFORMATION | ||
ITEM 1. | Condensed Consolidated Financial Statements | |
Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017 | ||
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017 | ||
Consolidated Balance Sheets at September 30, 2018 and December 31, 2017 | ||
Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2018 | ||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II OTHER INFORMATION | ||
ITEM 1. | ||
ITEM 1A. | Risk Factors | |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
ITEM 6. |
ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
(Dollars in thousands, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||
(Unaudited) | September 30, | September 30, | |||||||||||||
Revenues and Other Operating Income: | 2018 | 2017 | 2018 | 2017 | |||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 344,712 | $ | 234,442 | $ | 1,084,851 | $ | 812,511 | |||||||
Gain on Commodity Derivative Instruments | 18,005 | 19,183 | 78,752 | 80,508 | |||||||||||
Purchased Gas Revenue | 10,560 | 13,384 | 38,546 | 32,678 | |||||||||||
Midstream Revenue | 19,946 | — | 69,684 | — | |||||||||||
Other Operating Income | 3,903 | 20,176 | 23,146 | 52,483 | |||||||||||
Total Revenue and Other Operating Income | 397,126 | 287,185 | 1,294,979 | 978,180 | |||||||||||
Costs and Expenses: | |||||||||||||||
Operating Expense | |||||||||||||||
Lease Operating Expense | 16,202 | 21,755 | 78,350 | 64,459 | |||||||||||
Transportation, Gathering and Compression | 68,907 | 98,769 | 230,935 | 279,699 | |||||||||||
Production, Ad Valorem, and Other Fees | 7,342 | 5,919 | 24,277 | 19,854 | |||||||||||
Depreciation, Depletion and Amortization | 119,585 | 102,012 | 363,338 | 289,329 | |||||||||||
Exploration and Production Related Other Costs | 3,321 | 4,479 | 9,401 | 33,981 | |||||||||||
Purchased Gas Costs | 10,602 | 13,142 | 37,404 | 32,231 | |||||||||||
Impairment of Exploration and Production Properties | — | — | — | 137,865 | |||||||||||
Impairment of Other Intangible Assets | — | — | 18,650 | — | |||||||||||
Selling, General, and Administrative Costs | 32,435 | 21,469 | 98,693 | 65,025 | |||||||||||
Other Operating Expense | 17,405 | 27,544 | 51,238 | 69,825 | |||||||||||
Total Operating Expense | 275,799 | 295,089 | 912,286 | 992,268 | |||||||||||
Other (Income) Expense | |||||||||||||||
Other Expense (Income) | 1,105 | 8,250 | (4,812 | ) | 17,803 | ||||||||||
Gain on Asset Sales | (134,320 | ) | (45,743 | ) | (148,942 | ) | (184,319 | ) | |||||||
Gain on Previously Held Equity Interest | — | — | (623,663 | ) | — | ||||||||||
Loss on Debt Extinguishment | 15,385 | 2,019 | 54,433 | 1,233 | |||||||||||
Interest Expense | 35,723 | 38,836 | 112,712 | 121,124 | |||||||||||
Total Other (Income) Expense | (82,107 | ) | 3,362 | (610,272 | ) | (44,159 | ) | ||||||||
Total Costs and Expenses | 193,692 | 298,451 | 302,014 | 948,109 | |||||||||||
Earnings (Loss) from Continuing Operations Before Income Tax | 203,434 | (11,266 | ) | 992,965 | 30,071 | ||||||||||
Income Tax Expense | 56,678 | 10,530 | 239,269 | 21,066 | |||||||||||
Income (Loss) from Continuing Operations | 146,756 | (21,796 | ) | 753,696 | 9,005 | ||||||||||
(Loss) Income from Discontinued Operations, net | — | (4,645 | ) | — | 95,099 | ||||||||||
Net Income (Loss) | 146,756 | (26,441 | ) | 753,696 | 104,104 | ||||||||||
Less: Net Income Attributable to Noncontrolling Interest | 21,727 | — | 59,090 | — | |||||||||||
Net Income (Loss) Attributable to CNX Resources Shareholders | $ | 125,029 | $ | (26,441 | ) | $ | 694,606 | $ | 104,104 |
(Dollars in thousands, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||
(Unaudited) | September 30, | September 30, | |||||||||||||
Earnings (Loss) Per Share | 2018 | 2017 | 2018 | 2017 | |||||||||||
Basic | |||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.59 | $ | (0.09 | ) | $ | 3.22 | $ | 0.04 | ||||||
(Loss) Income from Discontinued Operations | — | (0.02 | ) | — | 0.41 | ||||||||||
Total Basic Earnings (Loss) Per Share | $ | 0.59 | $ | (0.11 | ) | $ | 3.22 | $ | 0.45 | ||||||
Dilutive | |||||||||||||||
Income (Loss) from Continuing Operations | $ | 0.59 | $ | (0.09 | ) | $ | 3.18 | $ | 0.04 | ||||||
(Loss) Income from Discontinued Operations | — | (0.02 | ) | — | 0.41 | ||||||||||
Total Dilutive Earnings (Loss) Per Share | $ | 0.59 | $ | (0.11 | ) | $ | 3.18 | $ | 0.45 | ||||||
Dividends Declared Per Share | $ | — | $ | — | $ | — | $ | — |
Three Months Ended | Nine Months Ended | ||||||||||||||
(Dollars in thousands) | September 30, | September 30, | |||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net Income (Loss) | $ | 146,756 | $ | (26,441 | ) | $ | 753,696 | $ | 104,104 | ||||||
Other Comprehensive Income: | |||||||||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($13), ($2,034), ($794), ($6,121)) | 22 | 3,464 | 2,004 | 10,430 | |||||||||||
Comprehensive Income (Loss) | 146,778 | (22,977 | ) | 755,700 | 114,534 | ||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest | 21,727 | — | 59,090 | — | |||||||||||
Comprehensive Income (Loss) Attributable to CNX Resources Shareholders | $ | 125,051 | $ | (22,977 | ) | $ | 696,610 | $ | 114,534 |
(Unaudited) | |||||||
(Dollars in thousands) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 42,672 | $ | 509,167 | |||
Accounts and Notes Receivable: | |||||||
Trade | 147,724 | 156,817 | |||||
Other Receivables | 10,097 | 48,908 | |||||
Supplies Inventories | 9,726 | 10,742 | |||||
Recoverable Income Taxes | 40,024 | 31,523 | |||||
Prepaid Expenses | 65,092 | 95,347 | |||||
Total Current Assets | 315,335 | 852,504 | |||||
Property, Plant and Equipment: | |||||||
Property, Plant and Equipment | 9,276,800 | 9,316,495 | |||||
Less—Accumulated Depreciation, Depletion and Amortization | 2,508,188 | 3,526,742 | |||||
Total Property, Plant and Equipment—Net | 6,768,612 | 5,789,753 | |||||
Other Assets: | |||||||
Investment in Affiliates | 19,488 | 197,921 | |||||
Goodwill | 796,359 | — | |||||
Other Intangible Assets | 104,838 | — | |||||
Other | 204,404 | 91,735 | |||||
Total Other Assets | 1,125,089 | 289,656 | |||||
TOTAL ASSETS | $ | 8,209,036 | $ | 6,931,913 |
(Unaudited) | |||||||
(Dollars in thousands, except per share data) | September 30, 2018 | December 31, 2017 | |||||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 263,033 | $ | 211,161 | |||
Current Portion of Long-Term Debt | 6,958 | 7,111 | |||||
Other Accrued Liabilities | 263,755 | 223,407 | |||||
Total Current Liabilities | 533,746 | 441,679 | |||||
Long-Term Debt: | |||||||
Long-Term Debt | 2,184,481 | 2,187,026 | |||||
Capital Lease Obligations | 15,082 | 20,347 | |||||
Total Long-Term Debt | 2,199,563 | 2,207,373 | |||||
Deferred Credits and Other Liabilities: | |||||||
Deferred Income Taxes | 304,342 | 44,373 | |||||
Asset Retirement Obligations | 16,013 | 198,768 | |||||
Other | 106,553 | 139,821 | |||||
Total Deferred Credits and Other Liabilities | 426,908 | 382,962 | |||||
TOTAL LIABILITIES | 3,160,217 | 3,032,014 | |||||
Stockholders’ Equity: | |||||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 205,147,139 Issued and Outstanding at September 30, 2018; 223,743,322 Issued and Outstanding at December 31, 2017 | 2,055 | 2,241 | |||||
Capital in Excess of Par Value | 2,311,093 | 2,450,323 | |||||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding | — | — | |||||
Retained Earnings | 2,003,888 | 1,455,811 | |||||
Accumulated Other Comprehensive Loss | (6,472 | ) | (8,476 | ) | |||
Total CNX Resources Stockholders’ Equity | 4,310,564 | 3,899,899 | |||||
Noncontrolling Interest | 738,255 | — | |||||
TOTAL STOCKHOLDERS' EQUITY | 5,048,819 | 3,899,899 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 8,209,036 | $ | 6,931,913 |
(Dollars in thousands) | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Total CNX Resources Corporation Stockholders’ Equity | Non- Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||
Balance at December 31, 2017 | $ | 2,241 | $ | 2,450,323 | $ | 1,455,811 | $ | (8,476 | ) | $ | 3,899,899 | $ | — | $ | 3,899,899 | ||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Net Income | — | — | 694,606 | — | 694,606 | 59,090 | 753,696 | ||||||||||||||||||||
Other Comprehensive Income (Net of ($794) Tax) | — | — | — | 2,004 | 2,004 | — | 2,004 | ||||||||||||||||||||
Comprehensive Income | — | — | 694,606 | 2,004 | 696,610 | 59,090 | 755,700 | ||||||||||||||||||||
Issuance of Common Stock | 7 | 1,682 | — | — | 1,689 | — | 1,689 | ||||||||||||||||||||
Purchase and Retirement of Common Stock (19,399,032 shares) | (193 | ) | (154,998 | ) | (141,543 | ) | — | (296,734 | ) | — | (296,734 | ) | |||||||||||||||
Shares Withheld for Taxes | — | — | (4,986 | ) | — | (4,986 | ) | (348 | ) | (5,334 | ) | ||||||||||||||||
Acquisition of CNX Gathering, LLC | — | — | — | — | — | 718,577 | 718,577 | ||||||||||||||||||||
Amortization of Stock-Based Compensation Awards | — | 14,086 | — | — | 14,086 | 1,775 | 15,861 | ||||||||||||||||||||
Distributions to CNXM Noncontrolling Interest Holders | — | — | — | — | — | (40,839 | ) | (40,839 | ) | ||||||||||||||||||
Balance at September 30, 2018 | $ | 2,055 | $ | 2,311,093 | $ | 2,003,888 | $ | (6,472 | ) | $ | 4,310,564 | $ | 738,255 | $ | 5,048,819 |
(Dollars in thousands) | Nine Months Ended | ||||||
(Unaudited) | September 30, | ||||||
Cash Flows from Operating Activities: | 2018 | 2017 | |||||
Net Income | $ | 753,696 | $ | 104,104 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||||||
Net Income from Discontinued Operations | — | (95,099 | ) | ||||
Depreciation, Depletion and Amortization | 363,338 | 289,329 | |||||
Amortization of Deferred Financing Costs | 6,640 | 6,636 | |||||
Impairment of Exploration and Production Properties | — | 137,865 | |||||
Impairment of Other Intangible Assets | 18,650 | — | |||||
Stock-Based Compensation | 15,861 | 13,071 | |||||
Gain on Sale of Assets | (148,942 | ) | (184,319 | ) | |||
Gain on Previously Held Equity Interest | (623,663 | ) | — | ||||
Loss on Debt Extinguishment | 54,433 | 1,233 | |||||
Gain on Commodity Derivative Instruments | (78,752 | ) | (80,508 | ) | |||
Net Cash Received (Paid) in Settlement of Commodity Derivative Instruments | 2,518 | (61,717 | ) | ||||
Deferred Income Taxes | 259,116 | 21,066 | |||||
Equity in Earnings of Affiliates | (4,688 | ) | (34,810 | ) | |||
Changes in Operating Assets: | |||||||
Accounts and Notes Receivable | 50,125 | 12,742 | |||||
Recoverable Income Taxes | (8,501 | ) | 15,908 | ||||
Supplies Inventories | 1,016 | (6,164 | ) | ||||
Prepaid Expenses | (337 | ) | 6,127 | ||||
Changes in Other Assets | 683 | 32,790 | |||||
Changes in Operating Liabilities: | |||||||
Accounts Payable | 2,532 | 15,359 | |||||
Accrued Interest | 5,812 | 32,501 | |||||
Other Operating Liabilities | 30,418 | 32,724 | |||||
Changes in Other Liabilities | (9,736 | ) | 16,915 | ||||
Net Cash Provided by Continuing Operating Activities | 690,219 | 275,753 | |||||
Net Cash Provided by Discontinued Operating Activities | — | 206,097 | |||||
Net Cash Provided by Operating Activities | 690,219 | 481,850 | |||||
Cash Flows from Investing Activities: | |||||||
Capital Expenditures | (794,124 | ) | (399,462 | ) | |||
CNX Gathering LLC Acquisition, Net of Cash Acquired | (299,272 | ) | — | ||||
Proceeds from Asset Sales | 500,811 | 408,957 | |||||
Net Distributions from Equity Affiliates | 7,750 | 35,620 | |||||
Net Cash (Used in) Provided by Continuing Investing Activities | (584,835 | ) | 45,115 | ||||
Net Cash Used in Discontinued Investing Activities | — | (33,237 | ) | ||||
Net Cash (Used in) Provided by Investing Activities | (584,835 | ) | 11,878 | ||||
Cash Flows from Financing Activities: | |||||||
Payments on Miscellaneous Borrowings | (5,455 | ) | (6,024 | ) | |||
Payments on Long-Term Notes | (935,419 | ) | (213,728 | ) | |||
Net Payments on CNXM Revolving Credit Facility | (105,500 | ) | — | ||||
Proceeds from CNX Revolving Credit Facility | 439,000 | — | |||||
Proceeds from Issuance of CNXM Senior Notes | 394,000 | — | |||||
Distributions to CNXM Noncontrolling Interest Holders | (40,839 | ) | — | ||||
Proceeds from Issuance of Common Stock | 1,689 | 859 | |||||
Shares Withheld for Taxes | (5,335 | ) | (6,346 | ) | |||
Purchases of Common Stock | (294,365 | ) | — | ||||
Debt Repurchase and Financing Fees | (19,655 | ) | (298 | ) | |||
Net Cash Used in Continuing Financing Activities | (571,879 | ) | (225,537 | ) | |||
Net Cash Used in Discontinued Financing Activities | — | (33,332 | ) | ||||
Net Cash Used in Financing Activities | (571,879 | ) | (258,869 | ) | |||
Net (Decrease) Increase in Cash and Cash Equivalents | (466,495 | ) | 234,859 | ||||
Cash and Cash Equivalents at Beginning of Period | 509,167 | 46,299 | |||||
Cash and Cash Equivalents at End of Period | $ | 42,672 | $ | 281,158 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Antidilutive Options | 2,288,274 | 5,407,465 | 2,288,274 | 2,731,362 | |||||||
Antidilutive Restricted Stock Units | — | 1,102,180 | 55,936 | 183,479 | |||||||
Antidilutive Performance Share Units | 157,120 | 1,793,302 | 157,120 | — | |||||||
Antidilutive Performance Stock Options | 927,268 | 802,804 | 927,268 | 802,804 | |||||||
3,372,662 | 9,105,751 | 3,428,598 | 3,717,645 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Options | 18,546 | 17,048 | 245,847 | 107,510 | |||||||
Restricted Stock Units | 184,176 | 14,776 | 362,573 | 349,037 | |||||||
Performance Share Units | 192,926 | — | 550,523 | 560,936 | |||||||
395,648 | 31,824 | 1,158,943 | 1,017,483 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income (Loss) from Continuing Operations | $ | 146,756 | $ | (21,796 | ) | $ | 753,696 | $ | 9,005 | ||||||
Less: Net Income Attributable to Non-Controlling Interest | 21,727 | — | 59,090 | — | |||||||||||
Net Income (Loss) from Continuing Operations Attributable to CNX Resources Shareholders | $ | 125,029 | $ | (21,796 | ) | $ | 694,606 | $ | 9,005 | ||||||
(Loss) Income from Discontinued Operations | — | (4,645 | ) | — | 95,099 | ||||||||||
Net Income (Loss) Attributable to CNX Resources Shareholders | $ | 125,029 | $ | (26,441 | ) | $ | 694,606 | $ | 104,104 | ||||||
Weighted-average shares of common stock outstanding | 210,238,509 | 230,080,797 | 216,010,561 | 229,986,428 | |||||||||||
Effect of dilutive shares | 2,469,573 | — | 2,288,301 | 1,473,392 | |||||||||||
Weighted-average diluted shares of common stock outstanding | 212,708,082 | 230,080,797 | 218,298,862 | 231,459,820 | |||||||||||
Earnings (Loss) per Share: | |||||||||||||||
Basic (Continuing Operations) | $ | 0.59 | $ | (0.09 | ) | $ | 3.22 | $ | 0.04 | ||||||
Basic (Discontinued Operations) | — | (0.02 | ) | — | 0.41 | ||||||||||
Total Basic | $ | 0.59 | $ | (0.11 | ) | $ | 3.22 | $ | 0.45 | ||||||
Dilutive (Continuing Operations) | $ | 0.59 | $ | (0.09 | ) | $ | 3.18 | $ | 0.04 | ||||||
Dilutive (Discontinued Operations) | — | (0.02 | ) | — | 0.41 | ||||||||||
Total Dilutive | $ | 0.59 | $ | (0.11 | ) | $ | 3.18 | $ | 0.45 |
Balance at December 31, 2017 | $ | (8,476 | ) |
Other Comprehensive Income before Reclassifications | 1,643 | ||
Amounts Reclassified from Accumulated Other Comprehensive Loss, net of tax | 361 | ||
Current Period Other Comprehensive Income | 2,004 | ||
Balance at September 30, 2018 | $ | (6,472 | ) |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Actuarially Determined Long-Term Liability Adjustments* | |||||||||||||||
Amortization of Prior Service Costs | $ | (6 | ) | $ | (749 | ) | $ | (186 | ) | $ | (2,247 | ) | |||
Recognized Net Actuarial Loss | 41 | 6,247 | 749 | 18,798 | |||||||||||
Total | 35 | 5,498 | 563 | 16,551 | |||||||||||
Less: Tax Benefit | 13 | 2,034 | 202 | 6,121 | |||||||||||
Net of Tax | $ | 22 | $ | 3,464 | $ | 361 | $ | 10,430 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue from Contracts with Customers | |||||||||||||||
Natural Gas Revenue | $ | 293,864 | $ | 196,285 | $ | 930,505 | $ | 703,556 | |||||||
NGLs Revenue | 46,663 | 33,220 | 137,104 | 94,139 | |||||||||||
Condensate Revenue | 3,426 | 4,306 | 14,925 | 12,495 | |||||||||||
Oil Revenue | 759 | 631 | 2,317 | 2,321 | |||||||||||
Total Natural Gas, NGLs and Oil Revenue | 344,712 | 234,442 | 1,084,851 | 812,511 | |||||||||||
Purchased Gas Revenue | 10,560 | 13,384 | 38,546 | 32,678 | |||||||||||
Midstream Revenue | 19,946 | — | 69,684 | — | |||||||||||
Other Sources of Revenue and Other Operating Income | |||||||||||||||
Gain on Commodity Derivative Instruments | 18,005 | 19,183 | 78,752 | 80,508 | |||||||||||
Other Operating Income | 3,903 | 20,176 | 23,146 | 52,483 | |||||||||||
Total Revenue and Other Operating Income | $ | 397,126 | $ | 287,185 | $ | 1,294,979 | $ | 978,180 |
For the Three Months Ended | For the Nine Months Ended | ||||||
September 30, 2017 | September 30, 2017 | ||||||
Coal Revenue | $ | 279,245 | $ | 899,400 | |||
Other Outside Sales | 15,065 | 42,806 | |||||
Freight-Outside Coal | 21,803 | 51,847 | |||||
Miscellaneous Other Income | 19,365 | 45,696 | |||||
(Loss) Gain on Sale of Assets | (513 | ) | 13,024 | ||||
Total Revenue and Other Income | $ | 334,965 | $ | 1,052,773 | |||
Total Costs | 322,592 | 928,212 | |||||
Income from Operations Before Income Taxes | $ | 12,373 | $ | 124,561 | |||
Income Tax Expense | 16,228 | 18,895 | |||||
Less: Net Income Attributable to Noncontrolling Interest | 790 | 10,567 | |||||
(Loss) Income from Discontinued Operations, net | $ | (4,645 | ) | $ | 95,099 |
Cash Consideration | $ | 305,000 | |
CNX Gathering Cash on Hand at January 3, 2018 Distributed to Noble | 2,620 | ||
Fair Value of Previously Held Equity Interest | 799,033 | ||
Total Estimated Fair Value of Consideration Transferred | $ | 1,106,653 |
Fair Value of Assets Acquired: | |||
Cash and Cash Equivalents | $ | 8,348 | |
Accounts and Notes Receivable | 21,199 | ||
Prepaid Expense | 2,006 | ||
Other Current Assets | 163 | ||
Property, Plant and Equipment, Net | 1,043,340 | ||
Intangible Assets | 128,781 | ||
Other | 593 | ||
Total Assets Acquired | 1,204,430 | ||
Fair Value of Liabilities Assumed: | |||
Accounts Payable | 26,059 | ||
CNXM Revolving Credit Facility | 149,500 | ||
Total Liabilities Assumed | 175,559 | ||
Total Identifiable Net Assets | 1,028,871 | ||
Fair Value of Noncontrolling Interest in CNXM | (718,577 | ) | |
Goodwill | 796,359 | ||
Net Assets Acquired | $ | 1,106,653 |
Three Months Ended | Nine Months Ended | ||||||
September 30, 2018 | September 30, 2018 | ||||||
Midstream Revenue | $ | 61,372 | $ | 186,875 | |||
Earnings from Continuing Operations Before Income Tax | $ | 31,173 | $ | 94,502 |
Pro Forma | |||||||
(in thousands, except per share data) (unaudited) | Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||
Pro Forma Total Revenue and Other Operating Income | $ | 311,272 | $ | 1,051,683 | |||
Pro Forma Net Income from Continuing Operations | $ | 11,240 | $ | 104,219 | |||
Less: Pro Forma Net income Attributable to Noncontrolling Interests | $ | 18,670 | $ | 56,804 | |||
Pro Forma Net Income(Loss) from Continuing Operations Attributable to CNX | $ | (7,430 | ) | $ | 47,415 | ||
Pro Forma Income(Loss) per Share from Continuing Operations (Basic) | $ | (0.03 | ) | $ | 0.21 | ||
Pro Forma Income(Loss) per Share from Continuing Operations (Diluted) | $ | (0.04 | ) | $ | 0.20 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service Cost | $ | 54 | $ | 96 | $ | 247 | $ | 289 | |||||||
Interest Cost | 333 | 308 | 932 | 927 | |||||||||||
Amortization of Prior Service Credits | (6 | ) | (93 | ) | (187 | ) | (279 | ) | |||||||
Recognized Net Actuarial Loss | 59 | 390 | 806 | 1,176 | |||||||||||
Curtailment Gain | — | — | (416 | ) | — | ||||||||||
Net Periodic Benefit Cost | $ | 440 | $ | 701 | $ | 1,382 | $ | 2,113 |
September 30, 2018 | December 31, 2017 | ||||||
Property, Plant and Equipment | |||||||
Intangible drilling cost | $ | 3,980,330 | $ | 3,849,689 | |||
Proved gas properties | 939,815 | 1,999,891 | |||||
Gas gathering equipment | 2,080,909 | 1,182,234 | |||||
Unproved gas properties | 1,105,813 | 919,733 | |||||
Gas wells and related equipment | 789,333 | 834,120 | |||||
Surface land and other equipment | 308,397 | 309,602 | |||||
Other gas assets | 72,203 | 221,226 | |||||
Total Property, Plant and Equipment | 9,276,800 | 9,316,495 | |||||
Less: Accumulated Depreciation, Depletion and Amortization | 2,508,188 | 3,526,742 | |||||
Total Property, Plant and Equipment - Net | $ | 6,768,612 | $ | 5,789,753 |
September 30, 2018 | December 31, 2017 | ||||||
Debt: | |||||||
Senior Notes due April 2022 at 5.875% (Principal of $1,314,307 and $1,705,682 plus Unamortized Premium of $2,258 and $3,544, respectively) | $ | 1,316,565 | $ | 1,709,226 | |||
CNX Revolving Credit Facility | 439,000 | — | |||||
CNX Midstream Partners LP Senior Notes due March 2026 at 6.50% (Principal of $400,000 less Unamortized Discount of $5,562 at September 30, 2018) | 394,438 | — | |||||
CNX Midstream Partners LP Revolving Credit Facility | 44,000 | — | |||||
Senior Notes due April 2023 at 8.00% (Principal of $500,000 less Unamortized Discount of $4,751 at December 31, 2017) | — | 495,249 | |||||
Other Note Maturing in 2018 (Principal of $358 less Unamortized Discount of $8 at December 31, 2017) | — | 350 | |||||
Less: Unamortized Debt Issuance Costs | 9,522 | 17,536 | |||||
2,184,481 | 2,187,289 | ||||||
Less: Amounts Due in One Year* | — | 263 | |||||
Long-Term Debt | $ | 2,184,481 | $ | 2,187,026 |
Amount of Commitment Expiration Per Period | |||||||||||||||||||
Total Amounts Committed | Less Than 1 Year | 1-3 Years | 3-5 Years | Beyond 5 Years | |||||||||||||||
Letters of Credit: | |||||||||||||||||||
Firm Transportation | $ | 251,057 | $ | 69,538 | $ | 181,519 | $ | — | $ | — | |||||||||
Other | 285 | 265 | 20 | — | — | ||||||||||||||
Total Letters of Credit | 251,342 | 69,803 | 181,539 | — | — | ||||||||||||||
Surety Bonds: | |||||||||||||||||||
Employee-Related | 1,850 | 1,500 | 350 | — | — | ||||||||||||||
Environmental | 11,136 | 11,021 | 115 | — | — | ||||||||||||||
Other | 12,396 | 11,523 | 873 | — | — | ||||||||||||||
Total Surety Bonds | 25,382 | 24,044 | 1,338 | — | — | ||||||||||||||
Total Commitments | $ | 276,724 | $ | 93,847 | $ | 182,877 | $ | — | $ | — |
Operating Lease Obligations Due | Amount | ||
Less than 1 year | $ | 13,643 | |
1 - 3 years | 17,693 | ||
3 - 5 years | 10,748 | ||
More than 5 years | 37,676 | ||
Total Operating Lease Obligations | $ | 79,760 |
Obligations Due | Amount | ||
Less than 1 year | $ | 263,068 | |
1 - 3 years | 515,251 | ||
3 - 5 years | 397,821 | ||
More than 5 years | 1,080,415 | ||
Total Purchase Obligations | $ | 2,256,555 |
September 30, | December 31, | Forecasted to | |||||
2018 | 2017 | Settle Through | |||||
Natural Gas Commodity Swaps (Bcf) | 1,096.1 | 1,067.2 | 2023 | ||||
Natural Gas Basis Swaps (Bcf) | 781.8 | 688.1 | 2023 |
Asset Derivative Instruments | Liability Derivative Instruments | |||||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Commodity Swaps: | ||||||||||||||||
Prepaid Expense | $ | 34,985 | $ | 62,369 | Other Accrued Liabilities | $ | 26,371 | $ | 5,985 | |||||||
Other Assets | 153,279 | 59,281 | Other Liabilities | 11,648 | 42,419 | |||||||||||
Total Asset | $ | 188,264 | $ | 121,650 | Total Liability | $ | 38,019 | $ | 48,404 | |||||||
Basis Only Swaps: | ||||||||||||||||
Prepaid Expense | $ | 10,085 | $ | 14,965 | Other Accrued Liabilities | $ | 26,293 | $ | 35,306 | |||||||
Other Assets | 29,099 | 24,223 | Other Liabilities | 26,952 | 17,179 | |||||||||||
Total Asset | $ | 39,184 | $ | 39,188 | Total Liability | $ | 53,245 | $ | 52,485 |
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash Received (Paid) in Settlement of Commodity Derivative Instruments: | |||||||||||||||
Commodity Swaps: | |||||||||||||||
Natural Gas | $ | 6,916 | $ | (312 | ) | $ | 23,540 | $ | (40,428 | ) | |||||
Propane | — | — | — | (1,216 | ) | ||||||||||
Natural Gas Basis Swaps | (4,091 | ) | 17,983 | (21,022 | ) | (20,073 | ) | ||||||||
Total Cash Received (Paid) in Settlement of Commodity Derivative Instruments | 2,825 | 17,671 | 2,518 | (61,717 | ) | ||||||||||
Unrealized Gain (Loss) on Commodity Derivative Instruments: | |||||||||||||||
Commodity Swaps: | |||||||||||||||
Natural Gas | 27,749 | (18,789 | ) | 76,999 | 214,097 | ||||||||||
Propane | — | — | — | 1,147 | |||||||||||
Natural Gas Basis Swaps | (12,569 | ) | 20,301 | (765 | ) | (73,019 | ) | ||||||||
Total Unrealized Gain on Commodity Derivative Instruments | 15,180 | 1,512 | 76,234 | 142,225 | |||||||||||
Gain (Loss) on Commodity Derivative Instruments: | |||||||||||||||
Commodity Swaps: | |||||||||||||||
Natural Gas | 34,665 | (19,101 | ) | 100,539 | 173,669 | ||||||||||
Propane | — | — | — | (69 | ) | ||||||||||
Natural Gas Basis Swaps | (16,660 | ) | 38,284 | (21,787 | ) | (93,092 | ) | ||||||||
Total Gain on Commodity Derivative Instruments | $ | 18,005 | $ | 19,183 | $ | 78,752 | $ | 80,508 |
Fair Value Measurements at September 30, 2018 | Fair Value Measurements at December 31, 2017 | ||||||||||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||
Gas Derivatives | $ | — | $ | 136,184 | $ | — | $ | — | $ | 59,949 | $ | — | |||||||||||
Put Option | $ | — | $ | — | $ | — | $ | — | $ | (3,500 | ) | $ | — |
September 30, 2018 | December 31, 2017 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Cash and Cash Equivalents | $ | 42,672 | $ | 42,672 | $ | 509,167 | $ | 509,167 | |||||||
Long-Term Debt | $ | 2,194,003 | $ | 2,169,446 | $ | 2,204,825 | $ | 2,281,282 |
September 30, 2018 | |||
Assets: | |||
Cash | $ | 950 | |
Receivables - Related Party | 15,053 | ||
Receivables - Third Party | 7,185 | ||
Other Current Assets | 2,623 | ||
Property, Plant and Equipment, net | 848,836 | ||
Other Assets | 3,404 | ||
Total Assets | $ | 878,051 | |
Liabilities: | |||
Accounts Payable | $ | 53,391 | |
Accounts Payable - Related Party | 4,427 | ||
Revolving Credit Facility | 44,000 | ||
Long-Term Debt | 392,978 | ||
Total Liabilities | $ | 494,796 |
For the Three Months Ended | For the Nine Months Ended | ||||||
September 30, 2018 | September 30, 2018 | ||||||
Revenue | |||||||
Gathering Revenue - Related Party | $ | 41,022 | $ | 116,328 | |||
Gathering Revenue - Third Party | 19,946 | 69,523 | |||||
Total Revenue | 60,968 | 185,851 | |||||
Expenses | |||||||
Operating Expense - Related Party | 5,131 | 14,645 | |||||
Operating Expense - Third Party | 4,870 | 20,744 | |||||
General and Administrative Expense - Related Party | 3,060 | 10,292 | |||||
General and Administrative Expense - Third Party | 1,771 | 6,639 | |||||
Loss on Asset Sales | — | 2,501 | |||||
Depreciation Expense | 5,306 | 16,605 | |||||
Interest Expense | 7,255 | 16,863 | |||||
Total Expense | 27,393 | 88,289 | |||||
Net Income | $ | 33,575 | $ | 97,562 | |||
Net Cash Provided by Operating Activities | $ | 35,666 | $ | 131,207 | |||
Net Cash Used in Investing Activities | $ | (44,241 | ) | $ | (79,366 | ) | |
Net Cash Provided by (Used in) Financing Activities | $ | 8,818 | $ | (54,085 | ) |
CNX Gathering | CNXM | Total | |||||||||
Balance at December 31, 2016 | $ | 151,075 | $ | 18,133 | $ | 169,208 | |||||
Equity in Earnings | 9,823 | 38,523 | 48,346 | ||||||||
Distributions | (17,254 | ) | (24,929 | ) | (42,183 | ) | |||||
Asset Transfer | (2,527 | ) | 2,527 | — | |||||||
Balance at December 31, 2017 | $ | 141,117 | $ | 34,254 | $ | 175,371 |
For the Three Months Ended | For the Nine Months Ended | ||||||
September 30, 2017 | September 30, 2017 | ||||||
Other Operating Income: | |||||||
Equity in Earnings of Affiliates - CNX Gathering | $ | 2,350 | $ | 4,500 | |||
Equity in Earnings of Affiliates - CNXM | $ | 9,685 | $ | 29,469 | |||
Transportation, Gathering and Compression: | |||||||
Gathering Services - CNX Gathering | $ | 217 | $ | 702 | |||
Gathering Services - CNXM | $ | 32,639 | $ | 98,388 |
Marcellus Shale | Utica Shale | Coalbed Methane | Other Gas | Total E&P | Midstream | Unallocated | Intercompany Eliminations | Consolidated | ||||||||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 207,407 | $ | 88,039 | $ | 48,471 | $ | 795 | $ | 344,712 | $ | — | $ | — | $ | — | $ | 344,712 | (A) | |||||||||||||||||
Purchased Gas Revenue | — | — | — | 10,560 | 10,560 | — | — | — | 10,560 | |||||||||||||||||||||||||||
Midstream Revenue | — | — | — | — | — | 61,372 | — | (41,426 | ) | 19,946 | ||||||||||||||||||||||||||
Gain (Loss) on Commodity Derivative Instruments | 1,796 | (151 | ) | 605 | 15,755 | 18,005 | — | — | — | 18,005 | ||||||||||||||||||||||||||
Other Operating Income | — | — | — | 3,969 | 3,969 | — | — | (66 | ) | 3,903 | (B) | |||||||||||||||||||||||||
Total Revenue and Other Operating Income | $ | 209,203 | $ | 87,888 | $ | 49,076 | $ | 31,079 | $ | 377,246 | $ | 61,372 | $ | — | $ | (41,492 | ) | $ | 397,126 | |||||||||||||||||
Earnings (Loss) From Continuing Operations Before Income Tax | $ | 64,408 | $ | 41,237 | $ | 9,642 | $ | (60,856 | ) | $ | 54,431 | $ | 31,173 | $ | 117,830 | $ | — | $ | 203,434 | |||||||||||||||||
Segment Assets | $ | 6,256,132 | $ | 1,883,134 | $ | 82,696 | $ | (12,926 | ) | $ | 8,209,036 | (C) | ||||||||||||||||||||||||
Depreciation, Depletion and Amortization | $ | 111,844 | $ | 7,741 | $ | — | $ | — | $ | 119,585 | ||||||||||||||||||||||||||
Capital Expenditures | $ | 253,263 | $ | 44,202 | $ | — | $ | — | $ | 297,465 |
(A) | Included in Total Natural Gas, NGLs and Oil Revenue are sales of $42,901 to NJR Energy Services Company, which comprises over 10% of sales. |
(B) | Includes equity in earnings of unconsolidated affiliates of $1,241 for Total E&P. |
(C) | Includes investments in unconsolidated equity affiliates of $19,488 for Total E&P. |
Marcellus Shale | Utica Shale | Coalbed Methane | Other Gas | Total E&P | Unallocated | Consolidated | ||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 133,792 | $ | 43,375 | $ | 46,744 | $ | 10,531 | $ | 234,442 | $ | — | $ | 234,442 | (D) | |||||||||||||
Purchased Gas Revenue | — | — | — | 13,384 | 13,384 | — | 13,384 | |||||||||||||||||||||
Gain on Commodity Derivative Instruments | 11,299 | 2,517 | 3,093 | 2,274 | 19,183 | — | 19,183 | |||||||||||||||||||||
Other Operating Income | — | — | — | 20,176 | 20,176 | — | 20,176 | |||||||||||||||||||||
Total Revenue and Other Operating Income | $ | 145,091 | $ | 45,892 | $ | 49,837 | $ | 46,365 | $ | 287,185 | $ | — | $ | 287,185 | ||||||||||||||
Earnings (Loss) From Continuing Operations Before Income Tax | $ | 12,124 | $ | 7,341 | $ | 5,454 | $ | (71,655 | ) | $ | (46,736 | ) | $ | 35,470 | $ | (11,266 | ) | (E) | ||||||||||
Segment Assets | $ | 6,191,981 | $ | 2,787,587 | $ | 8,979,568 | (F) | |||||||||||||||||||||
Depreciation, Depletion and Amortization | $ | 102,012 | $ | — | $ | 102,012 | ||||||||||||||||||||||
Capital Expenditures | $ | 149,500 | $ | — | $ | 149,500 |
(D) | Included in Total Natural Gas, NGLs and Oil Revenue are sales of $34,660 to Direct Energy Business Marketing LLC, which comprises over 10% of sales. |
(E) | Includes equity in earnings of unconsolidated affiliates of $12,425 for Total E&P. |
(F) | Includes investments in unconsolidated equity affiliates of $190,154 for Total E&P. |
Marcellus Shale | Utica Shale | Coalbed Methane | Other Gas | Total E&P | Midstream | Unallocated | Intercompany Eliminations | Consolidated | ||||||||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 590,728 | $ | 326,119 | $ | 152,854 | $ | 15,150 | $ | 1,084,851 | $ | — | $ | — | $ | — | $ | 1,084,851 | (A) | |||||||||||||||||
Purchased Gas Revenue | — | — | 38,546 | 38,546 | — | — | — | 38,546 | ||||||||||||||||||||||||||||
Midstream Revenue | — | — | — | — | — | 186,875 | — | (117,191 | ) | 69,684 | ||||||||||||||||||||||||||
Gain on Commodity Derivative Instruments | 1,411 | 746 | 330 | 76,265 | 78,752 | — | — | — | 78,752 | |||||||||||||||||||||||||||
Other Operating Income | — | — | — | 23,355 | 23,355 | — | — | (209 | ) | 23,146 | (B) | |||||||||||||||||||||||||
Total Revenue and Other Operating Income | $ | 592,139 | $ | 326,865 | $ | 153,184 | $ | 153,316 | $ | 1,225,504 | $ | 186,875 | $ | — | $ | (117,400 | ) | $ | 1,294,979 | |||||||||||||||||
Earnings (Loss) From Continuing Operations Before Income Tax | $ | 155,923 | $ | 143,830 | $ | 35,164 | $ | (138,551 | ) | $ | 196,366 | $ | 94,502 | $ | 702,097 | $ | — | $ | 992,965 | |||||||||||||||||
Segment Assets | $ | 6,256,132 | $ | 1,883,134 | $ | 82,696 | $ | (12,926 | ) | $ | 8,209,036 | (C) | ||||||||||||||||||||||||
Depreciation, Depletion and Amortization | $ | 338,834 | $ | 24,504 | $ | — | $ | — | $ | 363,338 | ||||||||||||||||||||||||||
Capital Expenditures | $ | 708,660 | $ | 85,464 | $ | — | $ | — | $ | 794,124 |
(A) | Included in Total Natural Gas, NGLs and Oil Revenue are sales of $158,746 to NJR Energy Services Company, which comprises over 10% of sales. |
(B) | Includes equity in earnings of unconsolidated affiliates of $4,688 for Total E&P |
(C) | Includes investments in unconsolidated equity affiliates of $19,488 for Total E&P. |
Marcellus Shale | Utica Shale | Coalbed Methane | Other Gas | Total E&P | Unallocated | Consolidated | ||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 477,391 | $ | 136,493 | $ | 157,344 | $ | 41,283 | $ | 812,511 | $ | — | $ | 812,511 | (D) | |||||||||||||
Purchased Gas Revenue | — | — | — | 32,678 | 32,678 | — | 32,678 | |||||||||||||||||||||
(Loss) Gain on Commodity Derivative Instruments | (42,911 | ) | (2,234 | ) | (12,894 | ) | 138,547 | 80,508 | — | 80,508 | ||||||||||||||||||
Other Operating Income | — | — | — | 52,483 | 52,483 | — | 52,483 | |||||||||||||||||||||
Total Revenue and Other Operating Income | $ | 434,480 | $ | 134,259 | $ | 144,450 | $ | 264,991 | $ | 978,180 | $ | — | $ | 978,180 | ||||||||||||||
Earnings (Loss) From Continuing Operations Before Income Tax | $ | 58,504 | $ | 34,211 | $ | 9,026 | $ | (236,953 | ) | $ | (135,212 | ) | $ | 165,283 | $ | 30,071 | (E) | |||||||||||
Segment Assets | $ | 6,191,981 | $ | 2,787,587 | $ | 8,979,568 | (F) | |||||||||||||||||||||
Depreciation, Depletion and Amortization | $ | 289,329 | $ | — | $ | 289,329 | ||||||||||||||||||||||
Capital Expenditures | $ | 399,462 | $ | — | $ | 399,462 |
(D) | Included in Total Natural Gas, NGLs and Oil Revenue are sales of $121,300 to Direct Energy Business Marketing LLC and $110,548 to NJR Energy Services Company, each of which comprises over 10% of sales. |
(E) | Includes equity in earnings of unconsolidated affiliates of $34,810 for Total E&P. |
(F) | Includes investments in unconsolidated equity affiliates of $190,154 for Total E&P. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total Segment Revenue from Contracts with External Customers | $ | 375,218 | $ | 247,826 | $ | 1,193,081 | $ | 845,189 | |||||||
Gain on Commodity Derivative Instruments | 18,005 | 19,183 | 78,752 | 80,508 | |||||||||||
Other Operating Income | 3,903 | 20,176 | 23,146 | 52,483 | |||||||||||
Total Consolidated Revenue and Other Operating Income | $ | 397,126 | $ | 287,185 | $ | 1,294,979 | $ | 978,180 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Segment Income (Loss) Before Income Taxes for reportable business segments: | |||||||||||||||
Total E&P | $ | 54,431 | $ | (46,736 | ) | $ | 196,366 | $ | (135,212 | ) | |||||
Midstream | 31,173 | — | 94,502 | — | |||||||||||
Total Segment Income (Loss) Before Income Taxes for reportable business segments | 85,604 | (46,736 | ) | 290,868 | (135,212 | ) | |||||||||
Unallocated Expenses: | |||||||||||||||
Other (Expense) Income | (1,105 | ) | (8,254 | ) | 4,811 | (17,803 | ) | ||||||||
Gain on Certain Asset Sales | 134,320 | 45,743 | 146,706 | 184,319 | |||||||||||
Gain on Previously Held Equity Interest | — | — | 623,663 | — | |||||||||||
Loss on Debt Extinguishment | (15,385 | ) | (2,019 | ) | (54,433 | ) | (1,233 | ) | |||||||
Impairment of Other Intangible Assets | — | — | (18,650 | ) | — | ||||||||||
Income (Loss) From Continuing Operations Before Income Tax | $ | 203,434 | $ | (11,266 | ) | $ | 992,965 | $ | 30,071 |
September 30, | |||||||
2018 | 2017 | ||||||
Segment assets for total reportable business segments | |||||||
E&P | $ | 6,256,132 | $ | 6,191,981 | |||
Midstream | 1,883,134 | — | |||||
Intercompany Eliminations | (12,926 | ) | — | ||||
Items excluded from segment assets: | |||||||
Cash and Cash Equivalents | 42,672 | 281,148 | |||||
Recoverable Income Taxes | 40,024 | 101,501 | |||||
Discontinued Operations | — | 2,404,938 | |||||
Total Consolidated Assets | $ | 8,209,036 | $ | 8,979,568 |
December 31, 2017 | $ | — | |
Acquisitions | 796,359 | ||
September 30, 2018 | $ | 796,359 |
September 30, 2018 | |||
Other Intangible Assets | |||
Customer Relationships | $ | 128,781 | |
Less: Impairment of Other Intangible Assets | (18,650 | ) | |
Less: Accumulated Amortization for Customer Relationships | (5,293 | ) | |
Total Other Intangible Assets, net | $ | 104,838 |
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||
Estimated Annual Amortization Expense | $ | 6,552 | $ | 6,552 | $ | 6,552 | $ | 6,552 | $ | 6,552 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
2018 | 2019 | ||||
Volumes Hedged (Bcf), as of 10/10/18 | 371.3* | 367.3 |
For the Three Months Ended September 30, | |||||||||||
(Dollars in thousands) | 2018 | 2017 | Variance | ||||||||
Income (Loss) from Continuing Operations | $ | 146,756 | $ | (21,796 | ) | $ | 168,552 | ||||
Loss from Discontinued Operations, net | — | (4,645 | ) | 4,645 | |||||||
Net Income (Loss) | $ | 146,756 | $ | (26,441 | ) | $ | 173,197 | ||||
Less: Net Income Attributable to Noncontrolling Interest | 21,727 | — | 21,727 | ||||||||
Net Income (Loss) Attributable to CNX Resources Shareholders | $ | 125,029 | $ | (26,441 | ) | $ | 151,470 |
For the Three Months Ended September 30, | |||||||||||||||
in thousands (unless noted) | 2018 | 2017 | Variance | Percent Change | |||||||||||
LIQUIDS | |||||||||||||||
NGLs: | |||||||||||||||
Sales Volume (MMcfe) | 9,972 | 10,308 | (336 | ) | (3.3 | )% | |||||||||
Sales Volume (Mbbls) | 1,662 | 1,718 | (56 | ) | (3.3 | )% | |||||||||
Gross Price ($/Bbl) | $ | 28.08 | $ | 19.32 | $ | 8.76 | 45.3 | % | |||||||
Gross Revenue | $ | 46,663 | $ | 33,220 | $ | 13,443 | 40.5 | % | |||||||
Oil: | |||||||||||||||
Sales Volume (MMcfe) | 72 | 90 | (18 | ) | (20.0 | )% | |||||||||
Sales Volume (Mbbls) | 12 | 15 | (3 | ) | (20.0 | )% | |||||||||
Gross Price ($/Bbl) | $ | 63.00 | $ | 41.94 | $ | 21.06 | 50.2 | % | |||||||
Gross Revenue | $ | 759 | $ | 631 | $ | 128 | 20.3 | % | |||||||
Condensate: | |||||||||||||||
Sales Volume (MMcfe) | 351 | 625 | (274 | ) | (43.8 | )% | |||||||||
Sales Volume (Mbbls) | 58 | 104 | (46 | ) | (44.2 | )% | |||||||||
Gross Price ($/Bbl) | $ | 58.56 | $ | 41.34 | $ | 17.22 | 41.7 | % | |||||||
Gross Revenue | $ | 3,426 | $ | 4,306 | $ | (880 | ) | (20.4 | )% | ||||||
GAS | |||||||||||||||
Sales Volume (MMcf) | 108,565 | 90,004 | 18,561 | 20.6 | % | ||||||||||
Sales Price ($/Mcf) | $ | 2.71 | $ | 2.18 | $ | 0.53 | 24.3 | % | |||||||
Gross Revenue | $ | 293,864 | $ | 196,285 | $ | 97,579 | 49.7 | % | |||||||
Hedging Impact ($/Mcf) | $ | 0.03 | $ | 0.20 | $ | (0.17 | ) | (85.0 | )% | ||||||
Gain on Commodity Derivative Instruments - Cash Settlement | $ | 2,825 | $ | 17,671 | $ | (14,846 | ) | (84.0 | )% |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Sales Volumes (Bcfe) | 119.0 | 101.0 | 18.0 | 17.8 | % | |||||||||
Average Sales Price (per Mcfe) | $ | 2.92 | $ | 2.50 | $ | 0.42 | 16.8 | % | ||||||
Lease Operating Expense | 0.14 | 0.22 | (0.08 | ) | (36.4 | )% | ||||||||
Production, Ad Valorem, and Other Fees | 0.06 | 0.06 | — | — | % | |||||||||
Transportation, Gathering and Compression | 0.84 | 0.98 | (0.14 | ) | (14.3 | )% | ||||||||
Depreciation, Depletion and Amortization (DD&A) | 0.93 | 1.00 | (0.07 | ) | (7.0 | )% | ||||||||
Average Costs (per Mcfe) | 1.97 | 2.26 | (0.29 | ) | (12.8 | )% | ||||||||
Average Margin | 0.95 | 0.24 | 0.71 | 295.8 | % |
• | Transportation, gathering, and compression expense decreased on a per-unit basis primarily due to the 17.8% increase in sales volumes and the shift towards dry Utica Shale production, which has lower gathering costs and no processing costs. |
• | Lease operating expense decreased on a per-unit basis due to the overall increase in sales volumes, primarily Utica, in the 2018 period as well as a decrease in well tending expense due to the sale of our shallow oil and gas properties in the first quarter. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | Depreciation, depletion and amortization decreased on a per-unit basis primarily due to a reduction in Marcellus and Utica rates as a result of an increase in the Company's associated reserves. |
For the Three Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Other Income | ||||||||||||||
Royalty Income | $ | 2 | $ | — | $ | 2 | 100.0 | % | ||||||
Right of Way Sales | 1 | — | 1 | 100.0 | % | |||||||||
Interest Income | — | 1 | (1 | ) | (100.0 | )% | ||||||||
Other | 1 | 2 | (1 | ) | (50.0 | )% | ||||||||
Total Other Income | $ | 4 | $ | 3 | $ | 1 | 33.3 | % | ||||||
Other Expense | ||||||||||||||
Professional Services | $ | 1 | $ | 7 | $ | (6 | ) | (85.7 | )% | |||||
Bank Fees | 3 | 3 | — | — | % | |||||||||
Land Rental Expense | 1 | — | 1 | 100.0 | % | |||||||||
Corporate Expense | — | 1 | (1 | ) | (100.0 | )% | ||||||||
Total Other Expense | $ | 5 | $ | 11 | $ | (6 | ) | (54.5 | )% | |||||
Total Other Expense | $ | 1 | $ | 8 | $ | (7 | ) | (87.5 | )% |
For the Three Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Total Company Earnings (Loss) Before Income Tax | $ | 203 | $ | (11 | ) | $ | 214 | 1,945.5 | % | |||||
Income Tax Expense | $ | 57 | $ | 11 | $ | 46 | 418.2 | % | ||||||
Effective Income Tax Rate | 27.9 | % | (93.5 | )% | 121.4 | % |
For the Three Months Ended | Difference to Three Months Ended | ||||||||||||||||||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||||||||||||||||||||||||||
(in millions) | Marcellus | Utica | CBM | Other Gas | Total E&P | Marcellus | Utica | CBM | Other Gas | Total E&P | |||||||||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 207 | $ | 88 | $ | 48 | $ | 2 | $ | 345 | $ | 73 | $ | 45 | $ | 1 | $ | (8 | ) | $ | 111 | ||||||||||||||||||
Gain (Loss) on Commodity Derivative Instruments | 2 | — | 1 | 15 | 18 | (9 | ) | (3 | ) | (2 | ) | 13 | (1 | ) | |||||||||||||||||||||||||
Purchased Gas Revenue | — | — | — | 11 | 11 | — | — | — | (2 | ) | (2 | ) | |||||||||||||||||||||||||||
Other Operating Income | — | — | — | 3 | 3 | — | — | — | (18 | ) | (18 | ) | |||||||||||||||||||||||||||
Total Revenue and Other Operating Income | 209 | 88 | 49 | 31 | 377 | 64 | 42 | (1 | ) | (15 | ) | 90 | |||||||||||||||||||||||||||
Lease Operating Expense | 7 | 5 | 5 | (1 | ) | 16 | (1 | ) | — | (2 | ) | (3 | ) | (6 | ) | ||||||||||||||||||||||||
Production, Ad Valorem, and Other Fees | 3 | 2 | 2 | — | 7 | — | 1 | — | — | 1 | |||||||||||||||||||||||||||||
Transportation, Gathering and Compression | 77 | 12 | 11 | — | 100 | 10 | — | (5 | ) | (4 | ) | 1 | |||||||||||||||||||||||||||
Depreciation, Depletion and Amortization | 58 | 28 | 21 | 5 | 112 | 3 | 7 | 1 | (1 | ) | 10 | ||||||||||||||||||||||||||||
Exploration and Production Related Other Costs | — | — | — | 3 | 3 | — | — | — | (1 | ) | (1 | ) | |||||||||||||||||||||||||||
Purchased Gas Costs | — | — | — | 11 | 11 | — | — | — | (2 | ) | (2 | ) | |||||||||||||||||||||||||||
Other Operating Expense | — | — | — | 18 | 18 | — | — | — | (10 | ) | (10 | ) | |||||||||||||||||||||||||||
Selling, General and Administrative Costs | — | — | — | 27 | 27 | — | — | — | 6 | 6 | |||||||||||||||||||||||||||||
Total Operating Costs and Expenses | 145 | 47 | 39 | 63 | 294 | 12 | 8 | (6 | ) | (15 | ) | (1 | ) | ||||||||||||||||||||||||||
Interest Expense | — | — | — | 29 | 29 | — | — | — | (10 | ) | (10 | ) | |||||||||||||||||||||||||||
Total E&P Division Costs | 145 | 47 | 39 | 92 | 323 | 12 | 8 | (6 | ) | (25 | ) | (11 | ) | ||||||||||||||||||||||||||
Earnings (Loss) Before Income Tax | $ | 64 | $ | 41 | $ | 10 | $ | (61 | ) | $ | 54 | $ | 52 | $ | 34 | $ | 5 | $ | 10 | $ | 101 |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Marcellus Gas Sales Volumes (Bcf) | 61.9 | 52.0 | 9.9 | 19.0 | % | |||||||||
NGLs Sales Volumes (Bcfe)* | 8.4 | 7.9 | 0.5 | 6.3 | % | |||||||||
Condensate Sales Volumes (Bcfe)* | 0.3 | 0.5 | (0.2 | ) | (40.0 | )% | ||||||||
Total Marcellus Sales Volumes (Bcfe)* | 70.6 | 60.4 | 10.2 | 16.9 | % | |||||||||
Average Sales Price - Gas (per Mcf) | $ | 2.66 | $ | 2.03 | $ | 0.63 | 31.0 | % | ||||||
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) | $ | 0.03 | $ | 0.22 | $ | (0.19 | ) | (86.4 | )% | |||||
Average Sales Price - NGLs (per Mcfe)* | $ | 4.80 | $ | 3.17 | $ | 1.63 | 51.4 | % | ||||||
Average Sales Price - Condensate (per Mcfe)* | $ | 9.66 | $ | 6.18 | $ | 3.48 | 56.3 | % | ||||||
Total Average Marcellus Sales Price (per Mcfe) | $ | 2.96 | $ | 2.40 | $ | 0.56 | 23.3 | % | ||||||
Average Marcellus Lease Operating Expenses (per Mcfe) | 0.10 | 0.13 | (0.03 | ) | (23.1 | )% | ||||||||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe) | 0.05 | 0.04 | 0.01 | 25.0 | % | |||||||||
Average Marcellus Transportation, Gathering and Compression costs (per Mcfe) | 1.10 | 1.10 | — | — | % | |||||||||
Average Marcellus Depreciation, Depletion and Amortization costs (per Mcfe) | 0.80 | 0.93 | (0.13 | ) | (14.0 | )% | ||||||||
Total Average Marcellus Costs (per Mcfe) | $ | 2.05 | $ | 2.20 | $ | (0.15 | ) | (6.8 | )% | |||||
Average Margin for Marcellus (per Mcfe) | $ | 0.91 | $ | 0.20 | $ | 0.71 | 355.0 | % |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Utica Gas Sales Volumes (Bcf) | 31.9 | 17.5 | 14.4 | 82.3 | % | |||||||||
NGLs Sales Volumes (Bcfe)* | 1.6 | 2.4 | (0.8 | ) | (33.3 | )% | ||||||||
Condensate Sales Volumes (Bcfe)* | 0.1 | 0.2 | (0.1 | ) | (50.0 | )% | ||||||||
Total Utica Sales Volumes (Bcfe)* | 33.6 | 20.1 | 13.5 | 67.2 | % | |||||||||
Average Sales Price - Gas (per Mcf) | $ | 2.53 | $ | 1.92 | $ | 0.61 | 31.8 | % | ||||||
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) | $ | — | $ | 0.14 | $ | (0.14 | ) | (100.0 | )% | |||||
Average Sales Price - NGLs (per Mcfe)* | $ | 4.00 | $ | 3.39 | $ | 0.61 | 18.0 | % | ||||||
Average Sales Price - Condensate (per Mcfe)* | $ | 10.01 | $ | 9.06 | $ | 0.95 | 10.5 | % | ||||||
Total Average Utica Sales Price (per Mcfe) | $ | 2.62 | $ | 2.28 | $ | 0.34 | 14.9 | % | ||||||
Average Utica Lease Operating Expenses (per Mcfe) | 0.14 | 0.23 | (0.09 | ) | (39.1 | )% | ||||||||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe) | 0.07 | 0.05 | 0.02 | (40.0 | )% | |||||||||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe) | 0.35 | 0.62 | (0.27 | ) | (43.5 | )% | ||||||||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe) | 0.83 | 1.01 | (0.18 | ) | (17.8 | )% | ||||||||
Total Average Utica Costs (per Mcfe) | $ | 1.39 | $ | 1.91 | $ | (0.52 | ) | (27.2 | )% | |||||
Average Margin for Utica (per Mcfe) | $ | 1.23 | $ | 0.37 | $ | 0.86 | 232.4 | % |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
CBM Gas Sales Volumes (Bcf) | 14.7 | 16.2 | (1.5 | ) | (9.3 | )% | ||||||||
Average Sales Price - Gas (per Mcf) | $ | 3.29 | $ | 2.88 | $ | 0.41 | 14.2 | % | ||||||
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) | $ | 0.04 | $ | 0.19 | $ | (0.15 | ) | (78.9 | )% | |||||
Total Average CBM Sales Price (per Mcf) | $ | 3.33 | $ | 3.07 | $ | 0.26 | 8.5 | % | ||||||
Average CBM Lease Operating Expenses (per Mcf) | 0.32 | 0.41 | (0.09 | ) | (22.0 | )% | ||||||||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf) | 0.12 | 0.11 | 0.01 | 9.1 | % | |||||||||
Average CBM Transportation, Gathering and Compression Costs (per Mcf) | 0.77 | 0.98 | (0.21 | ) | (21.4 | )% | ||||||||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf) | 1.47 | 1.23 | 0.24 | 19.5 | % | |||||||||
Total Average CBM Costs (per Mcf) | $ | 2.68 | $ | 2.73 | $ | (0.05 | ) | (1.8 | )% | |||||
Average Margin for CBM (per Mcf) | $ | 0.65 | $ | 0.34 | $ | 0.31 | 91.2 | % |
For the Three Months Ended September 30, | |||||||||||
2018 | 2017 | Variance | Percent Change | ||||||||
Other Gas Sales Volumes (Bcf) | — | 4.2 | (4.2 | ) | (100.0 | )% | |||||
Oil Sales Volumes (Bcfe)* | 0.1 | 0.1 | — | — | % | ||||||
Total Other Sales Volumes (Bcfe)* | 0.1 | 4.3 | (4.2 | ) | (97.7 | )% |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Purchased Gas Sales Volumes (in Bcfe) | 4.1 | 5.4 | (1.3 | ) | (24.1 | )% | ||||||||
Average Sales Price (per Mcfe) | $ | 2.55 | $ | 2.50 | $ | 0.05 | 2.0 | % | ||||||
Average Cost (per Mcfe) | $ | 2.56 | $ | 2.45 | $ | 0.11 | 4.5 | % |
For the Three Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Equity in Earnings of Affiliates | $ | 1 | $ | 12 | $ | (11 | ) | (91.7 | )% | |||||
Water Income | — | 2 | (2 | ) | (100.0 | )% | ||||||||
Gathering Income | 2 | 3 | (1 | ) | (33.3 | )% | ||||||||
Other | — | 4 | (4 | ) | (100.0 | )% | ||||||||
Total Other Operating Income | $ | 3 | $ | 21 | $ | (18 | ) | (85.7 | )% |
• | Equity in Earnings of Affiliates decreased $11 million primarily due to the consolidation of CNXM in the current year. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | Water income decreased $2 million due to decreased sales of freshwater to third parties for hydraulic fracturing. |
For the Three Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Lease Expiration Costs | $ | 1 | $ | 3 | $ | (2 | ) | (66.7 | )% | |||||
Land Rentals | 1 | 1 | — | — | % | |||||||||
Other | 1 | — | 1 | 100.0 | % | |||||||||
Total Exploration and Production Other Costs | $ | 3 | $ | 4 | $ | (1 | ) | (25.0 | )% |
• | Lease Expiration Costs relate to leases where the primary term expired. The $2 million decrease in the three months ended September 30, 2018 was primarily due a decrease in the number of leases that were allowed to expire. |
For the Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Consulting and Professional Services | $ | 1 | $ | 5 | $ | (4 | ) | (80.0 | )% | |||||
Idle Rig Expense | — | 6 | (6 | ) | (100.0 | )% | ||||||||
Insurance Expense | — | 1 | (1 | ) | (100.0 | )% | ||||||||
Unutilized Firm Transportation and Processing Fees | 11 | 11 | — | — | % | |||||||||
Litigation Expense | 2 | 2 | — | — | % | |||||||||
Other | 4 | 3 | 1 | 33.3 | % | |||||||||
Total Other Operating Expense | $ | 18 | $ | 28 | $ | (10 | ) | (35.7 | )% |
• | Consulting and Professional Services decreased $4 million in the period-to-period comparison primarily due to a decrease in legal fees in the current period. |
• | Idle Rig Expense relates to the temporary idling of some of the Company's natural gas rigs. The total idle rig expense incurred by the Company decreased $6 million for the current quarter compared to the prior year quarter due to contracts that expired in the current period. |
For the Three Months Ended | |||
(in millions) | September 30, 2018 | ||
Midstream Revenue - Related Party | $ | 41 | |
Midstream Revenue - Third Party | 20 | ||
Total Revenue | $ | 61 | |
Transportation, Gathering and Compression | $ | 10 | |
Depreciation, Depletion and Amortization | 8 | ||
Selling, General, and Administrative Costs | 5 | ||
Total Operating Costs and Expenses | 23 | ||
Interest Expense | 7 | ||
Total Midstream Division Costs | 30 | ||
Earnings Before Income Tax | $ | 31 |
TOTAL | ||
Dry Gas (BBtu/d) (**) | 702 | |
Wet Gas (BBtu/d) (**) | 705 | |
Condensate (MMcfe/d) | 3 | |
Total Gathered Volumes | 1,410 |
For the Nine Months Ended September 30, | |||||||||||
(Dollars in thousands) | 2018 | 2017 | Variance | ||||||||
Income from Continuing Operations | $ | 753,696 | $ | 9,005 | $ | 744,691 | |||||
Income from Discontinued Operations, net | — | 95,099 | (95,099 | ) | |||||||
Net Income | $ | 753,696 | $ | 104,104 | $ | 649,592 | |||||
Less: Net Income Attributable to Noncontrolling Interest | 59,090 | — | 59,090 | ||||||||
Net Income Attributable to CNX Resources Shareholders | $ | 694,606 | $ | 104,104 | $ | 590,502 |
For the Nine Months Ended September 30, | |||||||||||||||
in thousands (unless noted) | 2018 | 2017 | Variance | Percent Change | |||||||||||
LIQUIDS | |||||||||||||||
NGLs: | |||||||||||||||
Sales Volume (MMcfe) | 29,445 | 26,527 | 2,918 | 11.0 | % | ||||||||||
Sales Volume (Mbbls) | 4,908 | 4,421 | 487 | 11.0 | % | ||||||||||
Gross Price ($/Bbl) | $ | 27.96 | $ | 21.30 | $ | 6.66 | 31.3 | % | |||||||
Gross Revenue | $ | 137,104 | $ | 94,139 | $ | 42,965 | 45.6 | % | |||||||
Oil: | |||||||||||||||
Sales Volume (MMcfe) | 236 | 307 | (71 | ) | (23.1 | )% | |||||||||
Sales Volume (Mbbls) | 39 | 51 | (12 | ) | (23.5 | )% | |||||||||
Gross Price ($/Bbl) | $ | 58.98 | $ | 45.30 | $ | 13.68 | 30.2 | % | |||||||
Gross Revenue | $ | 2,317 | $ | 2,321 | $ | (4 | ) | (0.2 | )% | ||||||
Condensate: | |||||||||||||||
Sales Volume (MMcfe) | 1,670 | 2,070 | (400 | ) | (19.3 | )% | |||||||||
Sales Volume (Mbbls) | 278 | 345 | (67 | ) | (19.4 | )% | |||||||||
Gross Price ($/Bbl) | $ | 53.64 | $ | 36.24 | $ | 17.40 | 48.0 | % | |||||||
Gross Revenue | $ | 14,925 | $ | 12,495 | $ | 2,430 | 19.4 | % | |||||||
GAS | |||||||||||||||
Sales Volume (MMcf) | 339,679 | 259,368 | 80,311 | 31.0 | % | ||||||||||
Sales Price ($/Mcf) | $ | 2.74 | $ | 2.71 | $ | 0.03 | 1.1 | % | |||||||
Gross Revenue | $ | 930,505 | $ | 703,556 | $ | 226,949 | 32.3 | % | |||||||
Hedging Impact ($/Mcf) | $ | 0.01 | $ | (0.24 | ) | $ | 0.25 | 104.2 | % | ||||||
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement | $ | 2,518 | $ | (61,717 | ) | $ | 64,235 | 104.1 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Sales Volumes (Bcfe) | 371.0 | 288.3 | 82.7 | 28.7 | % | |||||||||
Average Sales Price (per Mcfe) | $ | 2.93 | $ | 2.60 | $ | 0.33 | 12.7 | % | ||||||
Lease Operating Expense | 0.21 | 0.22 | (0.01 | ) | (4.5 | )% | ||||||||
Production, Ad Valorem, and Other Fees | 0.07 | 0.07 | — | — | % | |||||||||
Transportation, Gathering and Compression | 0.84 | 0.97 | (0.13 | ) | (13.4 | )% | ||||||||
Depreciation, Depletion and Amortization (DD&A) | 0.90 | 0.99 | (0.09 | ) | (9.1 | )% | ||||||||
Average Costs (per Mcfe) | 2.02 | 2.25 | (0.23 | ) | (10.2 | )% | ||||||||
Average Margin | $ | 0.91 | $ | 0.35 | $ | 0.56 | 160.0 | % |
• | Transportation, gathering, and compression expense decreased on a per-unit basis primarily due to the 28.7% increase in sales volumes, as well as the shift towards dry Utica Shale production which has lower gathering costs and no processing costs. |
• | Depreciation, depletion and amortization decreased on a per-unit basis primarily due to a reduction in Marcellus and Utica rates as a result of an increase in the Company's associated reserves. |
For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Other Income | ||||||||||||||
Royalty Income | $ | 12 | $ | 6 | $ | 6 | 100.0 | % | ||||||
Right of Way Sales | 5 | 1 | 4 | 400.0 | % | |||||||||
Interest Income | — | 8 | (8 | ) | (100.0 | )% | ||||||||
Other | 5 | 5 | — | — | % | |||||||||
Total Other Income | $ | 22 | $ | 20 | $ | 2 | 10.0 | % | ||||||
Other Expense | ||||||||||||||
Professional Services | $ | 6 | $ | 23 | $ | (17 | ) | (73.9 | )% | |||||
Bank Fees | 8 | 9 | (1 | ) | (11.1 | )% | ||||||||
Other Land Rental Expense | 3 | 1 | 2 | 200.0 | % | |||||||||
Other Corporate Expense | — | 5 | (5 | ) | (100.0 | )% | ||||||||
Total Other Expense | $ | 17 | $ | 38 | $ | (21 | ) | (55.3 | )% | |||||
Total Other (Income) Expense | $ | (5 | ) | $ | 18 | $ | (23 | ) | (127.8 | )% |
• | Professional services decreased $17 million in the period-to-period comparison due to the 2017 period including transactions fees that related to the spin-off of the coal business (See Note 5 - Discontinued Operations of the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q). |
For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Total Company Earnings Before Income Tax | $ | 993 | $ | 30 | $ | 963 | 3,210.0 | % | ||||||
Income Tax Expense | $ | 239 | $ | 21 | $ | 218 | 1,038.1 | % | ||||||
Effective Income Tax Rate | 24.1 | % | 70.0 | % | (45.9 | )% |
For the Nine Months Ended | Difference to Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | ||||||||||||||||||||||||||||||||||||||
(in millions) | Marcellus | Utica | CBM | Other Gas | Total E&P | Marcellus | Utica | CBM | Other Gas | Total E&P | |||||||||||||||||||||||||||||
Natural Gas, NGLs and Oil Revenue | $ | 591 | $ | 326 | $ | 153 | $ | 15 | $ | 1,085 | $ | 114 | $ | 190 | $ | (4 | ) | $ | (28 | ) | $ | 272 | |||||||||||||||||
Gain (Loss) on Commodity Derivative Instruments | 1 | 1 | — | 77 | 79 | 44 | 3 | 13 | (61 | ) | (1 | ) | |||||||||||||||||||||||||||
Purchased Gas Revenue | — | — | — | 39 | 39 | — | — | — | 6 | 6 | |||||||||||||||||||||||||||||
Other Operating Income | — | — | — | 22 | 22 | — | — | — | (30 | ) | (30 | ) | |||||||||||||||||||||||||||
Total Revenue and Other Operating Income | 592 | 327 | 153 | 153 | 1,225 | 158 | 193 | 9 | (113 | ) | 247 | ||||||||||||||||||||||||||||
Lease Operating Expense | 34 | 26 | 17 | 1 | 78 | 11 | 12 | (2 | ) | (7 | ) | 14 | |||||||||||||||||||||||||||
Production, Ad Valorem, and Other Fees | 13 | 5 | 5 | 1 | 24 | 4 | 2 | (1 | ) | (1 | ) | 4 | |||||||||||||||||||||||||||
Transportation, Gathering and Compression | 228 | 44 | 37 | 4 | 313 | 44 | 11 | (12 | ) | (10 | ) | 33 | |||||||||||||||||||||||||||
Depreciation, Depletion and Amortization | 161 | 108 | 59 | 11 | 339 | 2 | 58 | (2 | ) | (8 | ) | 50 | |||||||||||||||||||||||||||
Impairment of Exploration and Production Properties | — | — | — | — | — | — | — | — | (138 | ) | (138 | ) | |||||||||||||||||||||||||||
Exploration and Production Related Other Costs | — | — | — | 9 | 9 | — | — | — | (25 | ) | (25 | ) | |||||||||||||||||||||||||||
Purchased Gas Costs | — | — | — | 37 | 37 | — | — | — | 5 | 5 | |||||||||||||||||||||||||||||
Other Operating Expense | — | — | — | 51 | 51 | — | — | — | (19 | ) | (19 | ) | |||||||||||||||||||||||||||
Selling, General and Administrative Costs | — | — | — | 82 | 82 | — | — | — | 17 | 17 | |||||||||||||||||||||||||||||
Total Operating Costs and Expenses | 436 | 183 | 118 | 196 | 933 | 61 | 83 | (17 | ) | (186 | ) | (59 | ) | ||||||||||||||||||||||||||
Interest Expense | — | — | — | 96 | 96 | — | — | — | (25 | ) | (25 | ) | |||||||||||||||||||||||||||
Total E&P Division Costs | 436 | 183 | 118 | 292 | 1,029 | 61 | 83 | (17 | ) | (211 | ) | (84 | ) | ||||||||||||||||||||||||||
Earnings (Loss) Before Income Tax | $ | 156 | $ | 144 | $ | 35 | $ | (139 | ) | $ | 196 | $ | 97 | $ | 110 | $ | 26 | $ | 98 | $ | 331 |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Marcellus Gas Sales Volumes (Bcf) | 176.0 | 156.1 | 19.9 | 12.7 | % | |||||||||
NGLs Sales Volumes (Bcfe)* | 23.9 | 18.1 | 5.8 | 32.0 | % | |||||||||
Condensate Sales Volumes (Bcfe)* | 1.3 | 1.2 | 0.1 | 8.3 | % | |||||||||
Total Marcellus Sales Volumes (Bcfe)* | 201.2 | 175.4 | 25.8 | 14.7 | % | |||||||||
Average Sales Price - Gas (per Mcf) | $ | 2.66 | $ | 2.62 | $ | 0.04 | 1.5 | % | ||||||
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) | $ | 0.01 | $ | (0.27 | ) | $ | 0.28 | 103.7 | % | |||||
Average Sales Price - NGLs (per Mcfe)* | $ | 4.67 | $ | 3.35 | $ | 1.32 | 39.4 | % | ||||||
Average Sales Price - Condensate (per Mcfe)* | $ | 8.91 | $ | 5.87 | $ | 3.04 | 51.8 | % | ||||||
Total Average Marcellus Sales Price (per Mcfe) | $ | 2.94 | $ | 2.48 | $ | 0.46 | 18.5 | % | ||||||
Average Marcellus Lease Operating Expenses (per Mcfe) | 0.17 | 0.13 | 0.04 | 30.8 | % | |||||||||
Average Marcellus Production, Ad Valorem, and Other Fees (per Mcfe) | 0.06 | 0.05 | 0.01 | 20.0 | % | |||||||||
Average Marcellus Transportation, Gathering and Compression costs (per Mcfe) | 1.13 | 1.05 | 0.08 | 7.6 | % | |||||||||
Average Marcellus Depreciation, Depletion and Amortization costs (per Mcfe) | 0.81 | 0.92 | (0.11 | ) | (12.0 | )% | ||||||||
Total Average Marcellus Costs (per Mcfe) | $ | 2.17 | $ | 2.15 | $ | 0.02 | 0.9 | % | ||||||
Average Margin for Marcellus (per Mcfe) | $ | 0.77 | $ | 0.33 | $ | 0.44 | 133.3 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Utica Gas Sales Volumes (Bcf) | 113.7 | 39.7 | 74.0 | 186.4 | % | |||||||||
NGLs Sales Volumes (Bcfe)* | 5.5 | 8.5 | (3.0 | ) | (35.3 | )% | ||||||||
Oil Sales Volumes (Bcfe)* | 0.1 | 0.1 | — | — | % | |||||||||
Condensate Sales Volumes (Bcfe)* | 0.4 | 0.9 | (0.5 | ) | (55.6 | )% | ||||||||
Total Utica Sales Volumes (Bcfe)* | 119.7 | 49.2 | 70.5 | 143.3 | % | |||||||||
Average Sales Price - Gas (per Mcf) | $ | 2.61 | $ | 2.43 | $ | 0.18 | 7.4 | % | ||||||
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf) | $ | 0.01 | $ | (0.06 | ) | $ | 0.07 | 116.7 | % | |||||
Average Sales Price - NGLs (per Mcfe)* | $ | 4.60 | $ | 3.96 | $ | 0.64 | 16.2 | % | ||||||
Average Sales Price - Oil (per Mcfe)* | $ | 9.06 | $ | 7.41 | $ | 1.65 | 22.3 | % | ||||||
Average Sales Price - Condensate (per Mcfe)* | $ | 9.03 | $ | 6.25 | $ | 2.78 | 44.5 | % | ||||||
Total Average Utica Sales Price (per Mcfe) | $ | 2.73 | $ | 2.73 | $ | — | — | % | ||||||
Average Utica Lease Operating Expenses (per Mcfe) | 0.22 | 0.28 | (0.06 | ) | (21.4 | )% | ||||||||
Average Utica Production, Ad Valorem, and Other Fees (per Mcfe) | 0.04 | 0.06 | (0.02 | ) | (33.3 | )% | ||||||||
Average Utica Transportation, Gathering and Compression Costs (per Mcfe) | 0.37 | 0.68 | (0.31 | ) | (45.6 | )% | ||||||||
Average Utica Depreciation, Depletion and Amortization Costs (per Mcfe) | 0.90 | 1.02 | (0.12 | ) | (11.8 | )% | ||||||||
Total Average Utica Costs (per Mcfe) | $ | 1.53 | $ | 2.04 | $ | (0.51 | ) | (25.0 | )% | |||||
Average Margin for Utica (per Mcfe) | $ | 1.20 | $ | 0.69 | $ | 0.51 | 73.9 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
CBM Gas Sales Volumes (Bcf) | 45.4 | 49.4 | (4.0 | ) | (8.1 | )% | ||||||||
Average Sales Price - Gas (per Mcf) | $ | 3.37 | $ | 3.19 | $ | 0.18 | 5.6 | % | ||||||
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) | $ | 0.01 | $ | (0.26 | ) | $ | 0.27 | 103.8 | % | |||||
Total Average CBM Sales Price (per Mcf) | $ | 3.37 | $ | 2.93 | $ | 0.44 | 15.0 | % | ||||||
Average CBM Lease Operating Expenses (per Mcf) | 0.37 | 0.38 | (0.01 | ) | (2.6 | )% | ||||||||
Average CBM Production, Ad Valorem, and Other Fees (per Mcf) | 0.12 | 0.11 | 0.01 | 9.1 | % | |||||||||
Average CBM Transportation, Gathering and Compression Costs (per Mcf) | 0.82 | 0.99 | (0.17 | ) | (17.2 | )% | ||||||||
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf) | 1.29 | 1.27 | 0.02 | 1.6 | % | |||||||||
Total Average CBM Costs (per Mcf) | $ | 2.60 | $ | 2.75 | $ | (0.15 | ) | (5.5 | )% | |||||
Average Margin for CBM (per Mcf) | $ | 0.77 | $ | 0.18 | $ | 0.59 | 327.8 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Other Gas Sales Volumes (Bcf) | 4.6 | 14.1 | (9.5 | ) | (67.4 | )% | ||||||||
Oil Sales Volumes (Bcfe)* | 0.1 | 0.2 | (0.1 | ) | (50.0 | )% | ||||||||
Total Other Sales Volumes (Bcfe)* | 4.7 | 14.3 | (9.6 | ) | (67.1 | )% | ||||||||
Average Sales Price - Gas (per Mcf) | $ | 2.90 | $ | 2.83 | $ | 0.07 | 2.5 | % | ||||||
Gain (Loss) on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf) | $ | 0.01 | $ | (0.26 | ) | $ | 0.27 | 103.8 | % | |||||
Average Sales Price - Oil (per Mcfe)* | $ | 10.09 | $ | 7.64 | $ | 2.45 | 32.1 | % | ||||||
Total Average Other Sales Price (per Mcfe) | $ | 3.17 | $ | 2.63 | $ | 0.54 | 20.5 | % | ||||||
Average Other Lease Operating Expenses (per Mcfe) | 0.46 | 0.62 | (0.16 | ) | (25.8 | )% | ||||||||
Average Other Production, Ad Valorem, and Other Fees (per Mcfe) | 0.03 | 0.14 | (0.11 | ) | (78.6 | )% | ||||||||
Average Other Transportation, Gathering and Compression Costs (per Mcfe) | 0.86 | 0.93 | (0.07 | ) | (7.5 | )% | ||||||||
Average Other Depreciation, Depletion and Amortization Costs (per Mcfe) | 1.48 | 1.03 | 0.45 | 43.7 | % | |||||||||
Total Average Other Costs (per Mcfe) | $ | 2.83 | $ | 2.72 | $ | 0.11 | 4.0 | % | ||||||
Average Margin for Other (per Mcfe) | $ | 0.34 | $ | (0.09 | ) | $ | 0.43 | 477.8 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Purchased Gas Sales Volumes (in Bcfe) | 12.9 | 11.2 | 1.7 | 15.2 | % | |||||||||
Average Sales Price (per Mcfe) | $ | 2.98 | $ | 2.91 | $ | 0.07 | 2.4 | % | ||||||
Average Cost (per Mcfe) | $ | 2.89 | $ | 2.87 | $ | 0.02 | 0.7 | % |
For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Equity in Earnings of Affiliates | $ | 4 | $ | 35 | $ | (31 | ) | (88.6 | )% | |||||
Gathering Income | 7 | 8 | (1 | ) | (12.5 | )% | ||||||||
Water Income | 11 | 3 | 8 | 266.7 | % | |||||||||
Other | — | 6 | (6 | ) | (100.0 | )% | ||||||||
Total Other Operating Income | $ | 22 | $ | 52 | $ | (30 | ) | (57.7 | )% |
• | Equity in Earnings of Affiliates decreased $31 million primarily due to the consolidation of CNXM in the current year. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | Water income increased $8 million due to increased sales of freshwater to third parties for hydraulic fracturing. |
For the Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | Variance | Percent Change | ||||||||||
Lease Expiration Costs | $ | 4 | $ | 30 | $ | (26 | ) | (86.7 | )% | |||||
Land Rentals | 3 | 3 | — | — | % | |||||||||
Other | 2 | 1 | 1 | 100.0 | % | |||||||||
Total Exploration and Production Other Costs | $ | 9 | $ | 34 | $ | (25 | ) | (73.5 | )% |
• | Lease Expiration Costs relate to leases where the primary term expired. The $26 million decrease in the nine months ended September 30, 2018 was primarily due to leases in both Monroe and Noble County, Ohio that were no longer in the Company's future drilling plans, so they were not renewed in the 2017 period. |
For the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Variance | Percent Change | |||||||||||
Unutilized Firm Transportation and Processing Fees | $ | 29 | $ | 38 | $ | (9 | ) | (23.7 | )% | |||||
Idle Rig Expense | 5 | 16 | (11 | ) | (68.8 | )% | ||||||||
Insurance Expense | 2 | 2 | — | — | % | |||||||||
Litigation Expense | 3 | 3 | — | — | % | |||||||||
Severance Expense | 1 | 1 | — | — | % | |||||||||
Water Expense | 5 | 2 | 3 | 150.0 | % | |||||||||
Other | 6 | 8 | (2 | ) | (25.0 | )% | ||||||||
Total Other Operating Expense | $ | 51 | $ | 70 | $ | (19 | ) | (27.1 | )% |
• | Unutilized Firm Transportation and Processing Fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs. The decrease in the period-to-period comparison was primarily due to the increase in the utilization of capacity. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Gathering Income in other operating income above. |
• | Idle Rig Expense relates to the temporary idling of some of the Company's natural gas rigs. The total idle rig expense incurred by the Company decreased $11 million in the period-to-period comparison due to contracts that expired in the current period. |
(in millions) | For the period January 3, 2018 through September 30, 2018 | ||
Midstream Revenue - Related Party | $ | 117 | |
Midstream Revenue - Third Party | 70 | ||
Total Revenue | $ | 187 | |
Transportation, Gathering and Compression | $ | 36 | |
Depreciation, Depletion and Amortization | 24 | ||
Selling, General, and Administrative Costs | 17 | ||
Total Operating Costs and Expenses | 77 | ||
Gain on Asset Sales | (2 | ) | |
Interest Expense | 17 | ||
Total Midstream Division Costs | 92 | ||
Earnings Before Income Tax | $ | 95 |
TOTAL | ||
Dry Gas (BBtu/d) (**) | 702 | |
Wet Gas (BBtu/d) (**) | 690 | |
Condensate (MMcfe/d) | 12 | |
Total Gathered Volumes | 1,404 |
For the Nine Months Ended September 30, | |||||||||||
2018 | 2017 | Change | |||||||||
Cash Provided by Operating Activities | $ | 690 | $ | 482 | $ | 208 | |||||
Cash (Used) Provided by in Investing Activities | $ | (585 | ) | $ | 12 | $ | (597 | ) | |||
Cash Used in Financing Activities | $ | (572 | ) | $ | (259 | ) | $ | (313 | ) |
• | Net income increased $650 million in the period-to-period comparison. |
• | Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $624 million gain on previously held equity interest, a $238 million change in deferred income taxes, a $138 million decrease in impairment of exploration and production properties, a $111 million change in discontinued operations (See Note 5 - Discontinued Operations in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q for more information), a $66 million net change in commodity derivative instruments, a $53 million increase in the loss (gain) on debt extinguishment, and a $35 million change in the gain on sale of assets. |
• | Capital expenditures increased $395 million in the period-to-period comparison primarily due to increased expenditures in both the Marcellus and Utica Shale plays resulting from increased drilling and completions activity. Also contributing to the increase is CNXM's capital expenditures which were not included in 2017 due to the consolidation that occurred in 2018. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | In January 2018, CNX acquired Noble Energy's interest in CNX Gathering for a net payment of $299 million. See Note 6 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | Proceeds from the sale of assets increased $92 million primarily due to the 2018 sale of substantially all of the Ohio Utica Joint Venture Assets in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble counties along with the 2018 sale of our shallow oil and gas and CBM assets in Pennsylvania and West Virginia. This was partially offset by the 2017 sales of approximately 32,900 net undeveloped acres in Ohio, Pennsylvania, and West Virginia. |
• | In the nine months ended September 30, 2018, CNX paid $935 million to repurchase all of the remaining 2023 bonds and $391 million of the 2022 bonds. CNXM also received proceeds of $394 million from long-term borrowings. In the nine months ended September 30, 2017, CNX paid $214 million to repurchase $119 million of the 2022 bonds and the remaining 2020 bonds. See Note 11 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. |
• | In the nine months ended September 30, 2018, CNX repurchased $294 million of its common stock on the open market. No repurchases were made in the nine months ended September 30, 2017. |
• | In the nine months ended September 30, 2018, there were $439 million of borrowings on the CNX credit facility. |
• | In the nine months ended September 30, 2018, there were $106 million of net payments on the CNXM credit facility. |
• | In the nine months ended September 30, 2018, there were $41 million in distributions to CNXM unitholders. |
• | In the nine months ended September 30, 2018, there were $20 million in debt issuance and financing fees. These fees were nominal in the nine months ended September 30, 2017. |
• | Financing activities of discontinued operations changed $33 million. See Note 5 - Discontinued Operations in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q for more information. |
Payments due by Year | |||||||||||||||||||
Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | Total | |||||||||||||||
Purchase Order Firm Commitments | $ | 66,450 | $ | 109,846 | $ | 27,468 | $ | — | $ | 203,764 | |||||||||
Gas Firm Transportation and Processing | 196,618 | 405,405 | 370,353 | 1,080,415 | 2,052,791 | ||||||||||||||
Long-Term Debt | — | — | 1,799,565 | 394,438 | 2,194,003 | ||||||||||||||
Interest on Long-Term Debt | 121,254 | 242,508 | 157,987 | 65,000 | 586,749 | ||||||||||||||
Capital (Finance) Lease Obligations | 6,958 | 13,919 | 1,163 | — | 22,040 | ||||||||||||||
Interest on Capital (Finance) Lease Obligations | 1,372 | 1,255 | 8 | — | 2,635 | ||||||||||||||
Operating Lease Obligations | 13,643 | 17,693 | 10,748 | 37,676 | 79,760 | ||||||||||||||
Long-Term Liabilities—Employee Related (a) | 1,872 | 3,985 | 4,394 | 25,591 | 35,842 | ||||||||||||||
Other Long-Term Liabilities (b) | 199,352 | 26,685 | 1,600 | 12,813 | 240,450 | ||||||||||||||
Total Contractual Obligations (c) | $ | 607,519 | $ | 821,296 | $ | 2,373,286 | $ | 1,615,933 | $ | 5,418,034 |
(a) | Employee related long-term liabilities include salaried retirement contributions and work-related injuries and illnesses. |
(b) | Other long-term liabilities include royalties 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. |
• | An aggregate principal amount of $1,314 million of 5.875% Senior Notes due in April 2022 plus $2 million of unamortized bond premium. Interest on the notes is payable April 15 and October 15 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries. |
• | An aggregate principal amount of $439 million in outstanding borrowings under the CNX revolver. |
• | An aggregate principal amount of $400 million of 6.50% Senior Notes due in March 2026 issued by CNXM, less $5 million of unamortized bond discount. Interest on the notes is payable March 15 and September 15 of each year. Payment of the principal and interest on the notes is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of these notes. |
• | An aggregate principal amount of $44 million in outstanding borrowings under the CNXM revolver. CNX is not a guarantor of CNXM's revolving credit facility. |
• | An aggregate principal amount of $22 million of capital leases with a weighted average interest rate of 7.15% per annum. |
• | prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand for our products, weather and the price and availability of alternative fuels; |
• | our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; |
• | uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; |
• | the high-risk nature of drilling natural gas wells; |
• | our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; |
• | the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; |
• | environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities; |
• | the risks inherent in natural gas operations, including our reliance upon third-party contractors, 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 that could impact financial results; |
• | decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations; |
• | if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties; |
• | a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; |
• | deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions; |
• | hedging activities may prevent us from benefiting from price increases and may expose us to other risks; |
• | our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; |
• | existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations; |
• | significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures; |
• | our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; |
• | the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; |
• | anticipated acquisitions and divestitures may not occur or produce anticipated benefits; |
• | risks associated with our debt; |
• | failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; |
• | a decrease in our borrowing base, which could occur for a variety of reasons including lower natural gas prices, declines in proved natural gas reserves, and lending requirements or regulations; |
• | we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture; |
• | changes in federal or state income tax laws; |
• | challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities; |
• | our development and exploration projects, as well as CNXM’s midstream system development, require substantial capital expenditures; |
• | terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; |
• | construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks; |
• | our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel; |
• | we may not achieve some or all of the expected benefits of the separation of CONSOL Energy; |
• | CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation; |
• | CONSOL Energy may not be able to satisfy its indemnification obligations in the future and such indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which CONSOL Energy will be allocated responsibility; |
• | the separation of CONSOL Energy could result in substantial tax liability; |
• | with respect to the sale of the Ohio JV Utica assets, disruption of our business, and the impact of the transaction on our future operating and financial results; and |
• | other factors discussed in the Company's 2017 Annual Report on Form 10-K under “Risk Factors,” as updated by any subsequent Forms 10-Q, which are on file at the Securities and Exchange Commission. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
For the Three Months Ended | |||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total Year | |||||||||||||||
2018 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | N/A | N/A | N/A | 95.3 | 95.3 | ||||||||||||||
Weighted Average Hedge Price per Mcf | N/A | N/A | N/A | $ | 2.85 | $ | 2.85 | ||||||||||||
2019 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | 84.7 | 96.2 | 97.2 | 94.5 | 367.3* | ||||||||||||||
Weighted Average Hedge Price per Mcf | $ | 2.72 | $ | 2.67 | $ | 2.67 | $ | 2.71 | $ | 2.69 | |||||||||
2020 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | 79.4 | 75.5 | 76.3 | 76.3 | 303.6* | ||||||||||||||
Weighted Average Hedge Price per Mcf | $ | 2.68 | $ | 2.61 | $ | 2.61 | $ | 2.60 | $ | 2.62 | |||||||||
2021 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | 52.4 | 52.9 | 53.5 | 53.5 | 212.3 | ||||||||||||||
Weighted Average Hedge Price per Mcf | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 | |||||||||
2022 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | 47.5 | 48.0 | 48.5 | 48.6 | 192.6 | ||||||||||||||
Weighted Average Hedge Price per Mcf | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 | |||||||||
2023 Fixed Price Volumes | |||||||||||||||||||
Hedged Bcf | 17.7 | 17.9 | 18.1 | 18.1 | 71.8 | ||||||||||||||
Weighted Average Hedge Price per Mcf | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.55 |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ISSUER PURCHASES OF EQUITY SECURITIES | ||||||||||
(a) | (b) | (c) | (d) | |||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (000's omitted) | ||||||
July 1, 2018- July 31, 2018 | 1,080,600 | $ | 16.87 | 12,166,682 | $ | 160,195 | ||||
August 1, 2018- August 31, 2018 | 3,349,800 | $ | 15.69 | 15,516,482 | $ | 107,649 | ||||
September 1, 2018- September 30, 2018 | 3,882,550 | $ | 14.70 | 19,399,032 | $ | 50,572 | ||||
Total | 8,312,950 | $ | 15.38 |
ITEM 6. | EXHIBITS |
10.1 | * | ||
10.2 | |||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 | |||
101 | Interactive Data File (Form 10-Q for the quarterly period ended September 30, 2018 furnished in XBRL). |
CNX RESOURCES CORPORATION | |||
By: | /s/ NICHOLAS J. DEIULIIS | ||
Nicholas J. DeIuliis | |||
Chief Executive Officer and President and Director (Duly Authorized Officer and Principal Executive Officer) | |||
By: | /S/ DONALD W. RUSH | ||
Donald W. Rush | |||
Chief Financial Officer and Executive Vice President (Duly Authorized Officer and Principal Financial Officer) | |||
By: | /S/ JASON L. MUMFORD | ||
Jason L. Mumford | |||
Controller (Duly Authorized Officer and Principal Accounting Officer) |
1. | I have reviewed this report on Form 10-Q of CNX Resources Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | October 30, 2018 | |
/s/ Nicholas J. DeIuliis | ||
Nicholas J. DeIuliis | ||
Chief Executive Officer and President and Director (Duly Authorized Officer and Principal Executive Officer) |
1. | I have reviewed this report on Form 10-Q of CNX Resources Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | October 30, 2018 | |
/s/ Donald W. Rush | ||
Donald W. Rush | ||
Chief Financial Officer and Executive Vice President (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: | October 30, 2018 | |
/s/ Nicholas J. DeIuliis | ||
Nicholas J. DeIuliis | ||
Chief Executive Officer and President and Director (Duly Authorized Officer and Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: | October 30, 2018 | |
/s/ Donald W. Rush | ||
Donald W. Rush | ||
Chief Financial Officer and Executive Vice President |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 16, 2018 |
|
Document Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | CNX Resources Corporation | |
Entity Central Index Key | 0001070412 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 203,599,810 |
Consolidated Statements of Income Earnings Per Share - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Basic | ||||
Income (Loss) from Continuing Operations (in usd per share) | $ 0.59 | $ (0.09) | $ 3.22 | $ 0.04 |
(Loss) Income from Discontinued Operations (in usd per share) | 0.00 | (0.02) | 0.00 | 0.41 |
Total Basic Earnings (Loss) Per Share (in usd per share) | 0.59 | (0.11) | 3.22 | 0.45 |
Dilutive | ||||
Income (Loss) from Continuing Operations (in usd per share) | 0.59 | (0.09) | 3.18 | 0.04 |
(Loss) Income from Discontinued Operations (in usd per share) | 0.00 | (0.02) | 0.00 | 0.41 |
Total Dilutive Earnings (Loss) Per Share (in usd per share) | 0.59 | (0.11) | 3.18 | 0.45 |
Dividends Declared Per Share (in usd per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 146,756 | $ (26,441) | $ 753,696 | $ 104,104 |
Other Comprehensive Income: | ||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: ($13), ($2,034), ($794), ($6,121)) | 22 | 3,464 | 2,004 | 10,430 |
Comprehensive Income (Loss) | 146,778 | (22,977) | 755,700 | 114,534 |
Less: Comprehensive Income Attributable to Noncontrolling Interest | 21,727 | 0 | 59,090 | 0 |
Comprehensive Income (Loss) Attributable to CNX Resources Shareholders | $ 125,051 | $ (22,977) | $ 696,610 | $ 114,534 |
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Other comprehensive income, tax expense | $ (794) | |||
Adjustment For Actuarially Determined Liabilities [Member] | ||||
Other comprehensive income, tax expense | $ (13) | $ (2,034) | $ (794) | $ (6,121) |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Common Stock [Member] | ||
Common Stock, Par Value (in usd per share) | $ 0.01 | $ 0.01 |
Common Stock, Authorized (in shares) | 500,000,000 | 500,000,000 |
Common Stock, Issued (in shares) | 205,147,139 | 223,743,322 |
Common Stock, Outstanding (in shares) | 205,147,139 | 223,743,322 |
Preferred Stock [Member] | ||
Preferred Stock, Authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred Stock, Issued (in shares) | 0 | 0 |
Preferred Stock, Outstanding (in shares) | 0 | 0 |
Consolidated Statements of Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands |
Total |
Common Stock [Member] |
Capital in Excess of Par Value [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Loss [Member] |
Total CNX Resources Corporation Stockholders' Equity [Member] |
Noncontrolling Interest [Member] |
---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2017 | $ 3,899,899 | $ 2,241 | $ 2,450,323 | $ 1,455,811 | $ (8,476) | $ 3,899,899 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 753,696 | 694,606 | 694,606 | 59,090 | |||
Other Comprehensive Income (Net of ($794) Tax) | 2,004 | 2,004 | 2,004 | ||||
Comprehensive Income (Loss) | 755,700 | 694,606 | 2,004 | 696,610 | 59,090 | ||
Issuance of Common Stock | 1,689 | 7 | 1,682 | 1,689 | |||
Purchase and Retirement of Common Stock (19,399,032 shares) | (296,734) | (193) | (154,998) | (141,543) | (296,734) | ||
Shares Withheld for Taxes | (5,334) | (4,986) | (4,986) | (348) | |||
Acquisition of CNX Gathering, LLC | 718,577 | 718,577 | |||||
Amortization of Stock-Based Compensation Awards | 15,861 | 14,086 | 14,086 | 1,775 | |||
Distributions to CNXM Noncontrolling Interest Holders | (40,839) | (40,839) | |||||
Ending Balance at Sep. 30, 2018 | $ 5,048,819 | $ 2,055 | $ 2,311,093 | $ 2,003,888 | $ (6,472) | $ 4,310,564 | $ 738,255 |
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
shares
| |
Statement of Stockholders' Equity [Abstract] | |
Other comprehensive income, tax expense (benefit) | $ | $ (794) |
Purchase and retirement of common stock (in shares) | shares | 19,399,032 |
Basis of Presentation |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION: The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for future periods. The Consolidated Balance Sheet at December 31, 2017 has been derived from the Audited Consolidated Financial Statements at that date but does not include all the notes required by generally accepted accounting principles for complete financial statements. For further information, refer to the Consolidated Financial Statements and related notes for the year ended December 31, 2017 included in CNX Resources Corporation's ("CNX," "CNX Resources," the "Company," "we," "us," or "our") Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC) on February 7, 2018. Certain amounts in prior periods have been reclassified to conform to the current period presentation. On November 28, 2017, the Company spun-off the coal operations previously held by CNX, which were comprised of the Pennsylvania Mining Complex, Baltimore Marine Terminal, its direct and indirect ownership interest in CONSOL Coal Resources LP, formerly known as CNXC Coal Resources LP, and other related coal assets. The financial position, results of operations and cash flows of the coal operations are reflected as discontinued operations for all periods presented through the date of the spin-off. See Note 5 - Discontinued Operations for further details regarding the spin-off. The Consolidated Balance Sheet at September 30, 2018 reflects the full consolidation of CNX Gathering LLC's assets and liabilities as a result of the acquisition by CNX Gas Company LLC "CNX Gas," an indirect wholly owned subsidiary of CNX, of NBL Midstream, LLC's 50% interest in CNX Gathering LLC on January 3, 2018 (See Note 6 - Acquisitions and Dispositions for more information). The purchase accounting remains preliminary as contemplated by Generally Accepted Accounting Principles (GAAP) and, as a result, there may be upon further review future changes to the value, as well as allocation, of the acquired assets and liabilities, associated amortization expense, goodwill and the gain on the previously held equity interest. These changes may be material. |
Earnings Per Share |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE: Basic earnings per share are computed by dividing net income attributable to CNX shareholders by the weighted average shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share, except that the weighted average shares outstanding are increased to include additional shares from stock options, performance stock options, restricted stock units and performance share units, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and performance share options were exercised, that outstanding restricted stock units and performance share units were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period. CNX Midstream Partners LP's "CNXM" dilutive units did not have a material impact on the Company's earnings per share calculations for the period from January 3, 2018 through September 30, 2018. The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be antidilutive:
The table below sets forth the share-based awards that have been exercised or released:
The computations for basic and dilutive earnings per share are as follows:
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Changes in Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS: Changes in Accumulated Other Comprehensive Loss related to pension obligations, net of tax, were as follows:
The following table shows the reclassification of adjustments out of Accumulated Other Comprehensive Loss:
*Excludes amounts related to the remeasurement of the actuarially determined pension obligations for the nine months ended September 30, 2018. |
Revenue From Contracts With Customers |
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Revenue From Contracts With Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS: On January 1, 2018, the Company adopted Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers and all the related amendments (“new revenue standard”) using the modified retrospective method, which did not result in any changes to previously reported financial information. The updates related to the new revenue standard were applied only to contracts that were not complete as of January 1, 2018. Revenue from Contracts with Customers Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company has elected to exclude all taxes from the measurement of transaction price. Nature of Performance Obligations At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. For natural gas, NGLs and oil, and purchased gas revenue, the Company generally considers the delivery of each unit (MMBtu or Bbl) to be a separate performance obligation that is satisfied upon delivery. Payment terms for these contracts typically require payment within 25 days of the end of the calendar month in which the hydrocarbons are delivered. A significant number of these contracts contain variable consideration because the payment terms refer to market prices at future delivery dates. In these situations, the Company has not identified a standalone selling price because the terms of the variable payments relate specifically to the Company’s efforts to satisfy the performance obligations. A portion of the contracts contain fixed consideration (i.e. fixed price contracts or contracts with a fixed differential to NYMEX or index prices). The fixed consideration is allocated to each performance obligation on a relative standalone selling price basis, which requires judgment from management. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price. Revenue associated with natural gas, NGLs and oil as presented on the accompanying Consolidated Statement of Income represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others. When selling natural gas, NGLs and oil on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis. Midstream revenue consists of revenues generated from natural gas gathering activities. The gas gathering services are interruptible in nature and include charges for the volume of gas actually gathered and do not guarantee access to the system. Volumetric based fees are based on actual volumes gathered. The Company generally considers the interruptible gathering of each unit (MMBtu) of natural gas as a separate performance obligation. Payment terms for these contracts typically require payment within 25 days of the end of the calendar month in which the hydrocarbons are gathered. Transaction price allocated to remaining performance obligations Accounting Standards Codification (ASC) 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement, including when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a series. A significant portion of our natural gas, NGLs and oil and purchased gas revenue is short-term in nature with a contract term of one year or less. For those contracts, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For revenue associated with contract terms greater than one year, a significant portion of the consideration in those contracts is variable in nature and the Company allocates the variable consideration in its contract entirely to each specific performance obligation to which it relates. Therefore, any remaining variable consideration in the transaction price is allocated entirely to wholly unsatisfied performance obligations. As such, the Company has not disclosed the value of unsatisfied performance obligations pursuant to the practical expedient. For revenue associated with contract terms greater than one year with a fixed price component, the aggregate amount of the transaction price allocated to remaining performance obligations was $172,177 as of September 30, 2018. The Company expects to recognize net revenue of $52,253 in the next 12 months and $38,043 over the following 12 months, with the remainder recognized thereafter. For revenue associated with our midstream contracts, which also have terms greater than one year, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under our midstream contracts, the interruptible gathering of each unit of natural gas represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Prior-period performance obligations We record revenue in the month production is delivered to the purchaser. However, settlement statements for certain natural gas and NGL revenue may not be received for 30 to 90 days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record the differences between our estimates and the actual amounts received in the month that payment is received from the purchaser. We have existing internal controls for our revenue estimation process and related accruals, and any identified differences between our revenue estimates and actual revenue received historically have not been significant. For each of the three and nine months ended September 30, 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Disaggregation of Revenue The following table is a disaggregation of our revenue by major sources:
The disaggregated revenue information corresponds with the Company’s segment reporting. Contract balances We invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts with customers do not give rise to contract assets or liabilities under ASC 606. The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer. The opening and closing balances of the Company’s receivables related to contracts with customers were $156,817 and $147,724, respectively. Included in the opening balance are receivables of $9,353 related to the January 3, 2018 acquisition by CNX Gas of NBL Midstream's interests (see Note 6 - Acquisitions and Dispositions for more information). |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | DISCONTINUED OPERATIONS: On November 28, 2017, CNX announced that it had completed the tax-free spin-off of its coal business resulting in two independent, publicly traded companies: (i) a coal company, CONSOL Energy, formerly known as CONSOL Mining Corporation and (ii) CNX, a natural gas exploration and production company. Following the separation, CONSOL Energy and its subsidiaries hold the coal assets previously held by CNX, including its Pennsylvania Mining Complex, Baltimore Marine Terminal, its direct and indirect ownership interest in CONSOL Coal Resources LP, formerly known as CNX Coal Resources LP, and other related coal assets previously held by CNX. As of the close of business on November 28, 2017, CNX's shareholders received one share of CONSOL Energy common stock for every eight shares of CNX's common stock held as of November 15, 2017. The coal business has been reclassified to discontinued operations for all periods presented. The following table details selected financial information for the divested business included within discontinued operations:
There were no remaining major classes of assets or liabilities of discontinued operations at September 30, 2018 and December 31, 2017. |
Acquisitions and Dispositions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions And Dispositions | ACQUISITIONS AND DISPOSITIONS: On August 31, 2018 CNX closed on the sale of substantially all of its Ohio Utica Joint Venture Assets in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble Counties, which included approximately 26,000 net undeveloped acres. The net cash proceeds of $381,214 are included in Proceeds from Asset Sales on the Consolidated Statements of Cash Flows and the net gain on the transaction of $130,849 is included in the Gain on Asset Sales on the Consolidated Statements of Income. On May 2, 2018 CNX closed on an Asset Exchange Agreement (the “AEA”), with HG Energy II Appalachia, LLC (“HG Energy”), pursuant to which, among other things, (i) HG Energy paid approximately $7,000 to CNX and assigned to CNX certain undeveloped Marcellus and Utica acreage in Southwest Pennsylvania, and (ii) CNX assigned its interest in certain non-core midstream assets and surface acreage to HG Energy and released certain HG Energy oil and gas acreage from dedication under a gathering agreement that is partially held, indirectly, by CNX. In connection with the transaction, CNX also agreed to certain transactions with CNXM, including the amendment of the existing gas gathering agreement between CNX and CNX Midstream Partners LP to increase the existing well commitment by an additional forty wells. The net gain on the sale was $286 and is included in the Gain on Asset Sales line of the Consolidated Statements of Income. As a result of the AEA, CNX determined that the carrying value of a portion of the customer relationship intangible assets that were acquired in connection with the Midstream Acquisition discussed below (see also Note 19 - Goodwill and Other Intangible Assets) exceeded their fair value, and recognized an impairment of approximately $18,650, which is included in the Impairment of Other Intangible Assets line of the Consolidated Statements of Income. On March 30, 2018, CNX Gas completed the sale of substantially all of its shallow oil and gas assets and certain Coalbed Methane (CBM) assets in Pennsylvania and West Virginia for $89,296 in cash consideration. In connection with the sale, the buyer assumed approximately $196,514 of asset retirement obligations. The net gain on the sale was $4,432 and is included in the Gain on Asset Sales line of the Consolidated Statements of Income. On December 14, 2017, CNX Gas entered into a purchase agreement with Noble, pursuant to which CNX Gas acquired Noble’s 50% membership interest in CONE Gathering LLC ("CNX Gathering"), for a cash purchase price of $305,000 and the mutual release of all outstanding claims (the "Midstream Acquisition"). CNX Gathering owns a 100% membership interest in CONE Midstream GP LLC (the "general partner"), which is the general partner of CONE Midstream Partners LP ("CNXM" or the Partnership), which is a publicly traded master limited partnership formed in May 2014 by CNX Gas and Noble. In conjunction with the Midstream Acquisition, which closed on January 3, 2018, the general partner, the Partnership and CONE Gathering LLC changed their names to CNX Midstream GP LLC, CNX Midstream Partners LP, and CNX Gathering LLC, respectively. Prior to the Midstream Acquisition, the Company accounted for its 50% interest in CNX Gathering LLC as an equity method investment as the Company had the ability to exercise significant influence, but not control, over the operating and financial policies of the midstream operations. In conjunction with the Midstream Acquisition, the Company obtained a controlling interest in CNX Gathering LLC and, through CNX Gathering's ownership of the general partner, control over the Partnership. Accordingly, the Midstream Acquisition has been accounted for as a business combination using the acquisition method of accounting pursuant to ASC Topic 805, Business Combinations, or ASC 805. ASC 805 requires that, in circumstances where a business combination is achieved in stages (or step acquisition), previously held equity interests are remeasured at fair value and any difference between the fair value and the carrying value of the equity interest held be recognized as a gain or loss on the statement of income. The fair value assigned to the previously held equity interest in CNX Gathering and CNXM for purposes of calculating the gain or loss was $799,033 and was determined using the income approach, based on a discounted cash flow methodology. The resulting gain on remeasurement to fair value of the previously held equity interest in CNX Gathering and CNXM of $623,663 is included in the Gain on Previously Held Equity Interest line of the Consolidated Statements of Income. The fair values of the previously held equity interests were based on inputs that are not observable in the market and therefore represent Level 3 inputs (See Note 14 - Fair Value of Financial Instruments). These fair values were measured using valuation techniques that convert future cash flows into a single discounted amount. Significant inputs to the valuation included estimates of: (i) gathering volumes; (ii) future operating costs; and (iii) a market-based weighted average cost of capital. These inputs required significant judgments and estimates by management, are still under review, and are subject to change. These inputs have a significant impact on the valuation of the previously held equity interests and future changes may occur. The estimated fair value of midstream facilities and equipment, generally consisting of pipeline systems and compression stations, were estimated using the cost approach. Significant unobservable inputs in the estimate of fair value include management's assumptions about the replacement costs for similar assets, the relative age of the acquired assets and any potential economic or functional obsolescence associated with the acquired assets. As a result, the estimated fair value of the midstream facilities and equipment represents a Level 3 fair value measurement. As part of the preliminary purchase price allocation, the Company identified intangible assets for customer relationships with third party customers. The fair value of the identified intangible assets was determined using the income approach, which requires a forecast of the expected future cash flows generated and an estimated market-based weighted average cost of capital. Significant unobservable inputs in the determination of fair value include future revenue estimates, future cost assumptions, and estimated customer retention rates. As a result, the estimated fair value of the identified intangible assets represents a Level 3 fair value measurement. Differences between the preliminary purchase price allocation and the final purchase price allocation may change the amount of intangible assets and goodwill ultimately recognized in conjunction with the Midstream Acquisition. The noncontrolling interest in the acquired business is comprised of the limited partner units in CNXM, which were not acquired by the Company. The CNXM limited partner units are actively traded on the New York Stock Exchange, and were valued based on observable market prices as of the transaction date and therefore represent a Level 1 fair value measurement. Allocation of Purchase Price (Midstream Acquisition) The following table summarizes the purchase price and estimated values of assets and liabilities assumed based on the fair value as of January 3, 2018, with any excess of the purchase price over the estimated fair value of the identified net assets acquired recorded as goodwill. The preliminary purchase price allocation will be subject to further refinement, which may result in material changes. Estimated Fair Value of Consideration Transferred:
The following is a summary of the preliminary estimated fair values of the net assets acquired:
Post-Acquisition Operating Results (Midstream Acquisition) The Midstream Acquisition contributed the following to the Company's Midstream segment for the three and nine months ended September 30, 2018.
Unaudited Pro Forma Information (Midstream Acquisition) The following table presents unaudited pro forma combined financial information for the three and nine months ended September 30, 2017, which presents the Company’s results as though the Midstream Acquisition had been completed at January 1, 2017. The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the acquisition been completed at January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.
In September 2017, CNX Resources closed on the sale of approximately 22,000 acres of surface land in Colorado. CNX Resources received net cash proceeds of $23,703 which is included in the cash flows from investing activities. The net gain on the sale was $18,758 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. In a two part closing in July and September 2017, CNX executed the sale of approximately 7,500 net undeveloped acres of the Marcellus Shale in Allegheny and Westmoreland Counties, Pennsylvania. The Company received total cash proceeds of $36,649, which was included in the cash flows from investing activities. The net gain on the sale of these assets was $15,251 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. In June 2017, CNX closed on the sale of approximately 11,100 net undeveloped acres of the Marcellus and Utica Shale in Allegheny, Washington, and Westmoreland Counties, Pennsylvania. The Company received total cash proceeds of $83,500, which was included in cash flows from investing activities. The net gain on the sale of these assets was $58,541 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. In June 2017, the Company finalized the sale of 12 producing wells, 15 drilled but uncompleted wells (DUCs), and approximately 11,000 net developed and undeveloped Marcellus and Utica acres in Doddridge and Wetzel Counties in West Virginia that were previously classified as Held for Sale. CNX Resources received total cash proceeds of $129,651, which was included in cash flows from investing activities. The net loss on the sale was $8,591 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. In May 2017, CNX finalized the sale of approximately 6,300 net undeveloped acres of the Utica-Point Pleasant Shale in Jefferson, Belmont, and Guernsey Counties, Ohio that were previously classified as Held for Sale. The Company received total cash proceeds of $76,585, which was included in cash flows from investing activities. The net gain on the sale of these assets was $72,346 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. In April 2017, CNX finalized the sale of its Knox Energy LLC and Coalfield Pipeline Company subsidiaries that were previously classified as Held for Sale. At closing, CNX received net cash proceeds of $18,944, which was included in cash flows from investing activities. Due to various post closing adjustments, the net gain on the sale of these assets was $606 and was included in the Gain on Sale of Assets in the Consolidated Statements of Income. |
Components of Pension Plan Net Periodic Benefit Cost |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Pension Plan Net Periodic Benefit Cost | COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COST: Components of Net Periodic Benefit Cost are as follows:
The benefits for the Defined Contribution Restoration Plan were frozen effective July 1, 2018. Employees hired after this date are not eligible for this benefit plan. In addition, current participants receive no further compensation credits after that date, with the last award year being 2017. Annual interest credits will continue to be made in accordance with the terms of the plan. This freezing of the plan triggered a curtailment gain of $416. The curtailment resulted in a plan remeasurement, decreasing the plan liabilities by $2,235 at June 30, 2018. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES: The effective tax rates for the three and nine months ended September 30, 2018 were 27.9% and 24.1%, respectively. The effective tax rate for the nine months ended September 30, 2018 differs from the U.S. federal statutory rate of 21% primarily due to increases for state taxes and state valuation allowances, offset by the benefits from the filing of a Federal 10-year net operating loss (“NOL”) carryback as well as non-controlling interest. The effective tax rates for the three and nine months ended September 30, 2017 were (93.5)% and 70%, respectively. The effective rate for the nine months ended September 30, 2017 differs from the U.S. federal statutory rate of 35% primarily due to state income taxes and equity compensation. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "Act") which, among other things, lowered the U.S. Federal corporate income tax rate from 35% to 21%, repealed the corporate alternative minimum tax ("AMT"), and provided for a refund of previously accrued AMT credits. The Company recorded a net tax benefit to reflect the impact of the Act as of December 31, 2017, as it is required to reflect the change in the period in which the law is enacted. Largely, the benefits recorded in the period ending December 31, 2017 related to the Act are in recognition of the revaluation of deferred tax assets and liabilities, a benefit of $115,291, and a benefit for the reversal of a valuation allowance previously recorded against a deferred tax asset for AMT credits which are now refundable, a benefit of $154,384. The net benefits for the Act, recorded as of September 30, 2018 represent the Company's best estimate using information available to the Company as of September 30, 2018. The Company anticipates U.S. regulatory agencies will potentially issue further regulations prior to year-end which may alter this estimate. The IRS issued rules during the quarter pertaining to the application of limitations for executive compensation related to contracts existing prior to November 2, 2017, and provisions in the Act addressing the deductibility of interest expense after January 1, 2018. During the three and nine months ended September 30, 2018, no adjustments were recorded to the provisional amounts recognized in 2017. The Company will refine its estimates to incorporate new or better information as it comes available. During the second quarter of 2018, the company filed a Federal NOL carryback resulting in a financial statement benefit of $20,000 through the realization of the Federal NOLs at a 35% tax rate as a carryback versus the current 21% tax rate as a carryforward. The total amount of uncertain tax positions at September 30, 2018 and December 31, 2017 were $39,953 and $37,813, respectively. If these uncertain tax positions were recognized, approximately $31,516 and $29,376 would affect CNX's effective tax rate at September 30, 2018 and December 31, 2017, respectively. There was a $2,140 change to the unrecognized tax benefits during the nine months ended September 30, 2018. CNX recognizes accrued interest related to uncertain tax positions in interest expense. As of September 30, 2018 and December 31, 2017, the Company reported an accrued interest liability relating to uncertain tax positions of $897 and $644, respectively, in Other Liabilities on the Consolidated Balance Sheets. The accrued interest liability includes $252 of accrued interest expense that is reflected in the Company's Consolidated Statements of Income for the nine months ended September 30, 2018. CNX recognizes penalties accrued related to uncertain tax positions in its income tax expense. As of September 30, 2018 and December 31, 2017, CNX had no accrued liabilities for tax penalties related to uncertain tax positions. CNX and its subsidiaries file federal income tax returns with the United States and income tax returns within various states. With few exceptions, the Company is no longer subject to United States federal, state, local, or non-U.S. income tax examinations by tax authorities for tax years before 2014. The Joint Committee on Taxation concluded its review of the audit of tax year 2015 on March 21, 2018. The audit resulted in a $108,651 reduction to CNX's net operating loss, primarily due to a reduction in the depreciation as an offset to the bonus depreciation taken in the 2010-2013 IRS audit. There was no cash impact from the audit. |
Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT:
Property, Plant and Equipment Impairment In February 2017, the Company approved a plan to sell subsidiaries Knox Energy LLC and Coalfield Pipeline Company (collectively, "Knox"). Knox met all of the criteria to be classified as held for sale in February 2017. The potential disposal of Knox did not represent a strategic shift that would have a major effect on the Company's operations and financial results and was, therefore, not classified as discontinued operations in accordance with ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360). As part of the required evaluation under the held for sale guidance, the asset's book value was evaluated and adjusted to the lower of its carrying amount or fair value less cost to sell. The Company determined that the approximate fair value less costs to sell Knox was less than the carrying value of the net assets which resulted in an impairment of $137,865 in February 2017, included in Impairment of Exploration and Production Properties within the Consolidated Statements of Income. The sale of Knox closed in the second quarter of 2017. |
Revolving Credit Facilities |
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Sep. 30, 2018 | |
Short-term Debt, Other Disclosures [Abstract] | |
Revolving Credit Facilities | REVOLVING CREDIT FACILITIES: CNX Resources Corporation (CNX) On March 8, 2018, CNX amended and restated its senior secured revolving credit facility, which expires on March 8, 2023. The CNX credit facility increased lenders' commitments from $1,500,000 to $2,100,000 with an accordion feature that allows the Company to increase the commitments to $3,000,000. The initial borrowing base increased from $2,000,000 to $2,500,000, and the letters of credit aggregate sub-limit remained unchanged at $650,000. Effective August 20,2018, as part of the semi-annual redetermination, the borrowing base was reduced to $2,100,000 primarily based on the sale of substantially all of CNX's Ohio Utica Joint Venture Assets and shallow oil and gas assets (See Note 6 - Acquisitions and Dispositions for additional information). The credit facility matures on March 8, 2023, provided that if the aggregate principal amount of our existing 5.875% Senior Notes due 2022 and certain other publicly traded debt securities outstanding 91 days prior to the earliest maturity of such debt (such date, the "Springing Maturity Date") is greater than $500,000, then the credit facility will mature on the Springing Maturity Date. The CNX credit facility is secured by substantially all of the assets of CNX and certain of its subsidiaries. Fees and interest rate spreads are based on the percentage of facility utilization, measured quarterly. Availability under the facility is limited to a borrowing base, which is determined by the lenders' syndication agent and approved by the required number of lenders in good faith by calculating a value of CNX's proved natural gas reserves. The CNX credit facility contains a number of affirmative and negative covenants that include, among others, covenants that, except in certain circumstances, limit the Company and the subsidiary guarantors' ability to create, incur, assume or suffer to exist indebtedness, create or permit to exist liens on properties, dispose of assets, make investments, purchase or redeem CNX common stock, pay dividends, merge with another corporation and amend the senior unsecured notes. The Company must also mortgage 80% of the value of its proved reserves and 80% of the value of its proved developed producing reserves, in each case, which are included in the borrowing base, maintain applicable deposit, securities and commodities accounts with the lenders or affiliates thereof, and enter into control agreements with respect to such applicable accounts. The CNX credit facility also requires that CNX maintain a maximum net leverage ratio of no greater than 4.00 to 1.00, which is calculated as the ratio of debt less cash on hand to consolidated EBITDA, measured quarterly. CNX must also maintain a minimum current ratio of no less than 1.00 to 1.00, which is calculated as the ratio of current assets, plus revolver availability, to current liabilities, excluding borrowings under the revolver, measured quarterly. The calculation of all of the ratios exclude CNXM. CNX was in compliance with all financial covenants as of September 30, 2018. At September 30, 2018, the CNX credit facility had $439,000 of borrowings outstanding and $251,342 of letters of credit outstanding, leaving $1,409,658 of unused capacity. At December 31, 2017, the facility had no borrowings outstanding and $239,072 of letters of credit outstanding, leaving $1,260,928 of unused capacity. CNX Midstream Partners LP (CNXM) On March 8, 2018, CNXM entered into a new $600,000 senior secured revolving credit facility that matures on March 8, 2023. The CNXM credit facility replaced its prior $250,000 senior secured revolving credit facility. The CNXM credit facility includes restrictions on the ability of CNXM, its subsidiary guarantors and certain of its non-guarantor, non-wholly-owned subsidiaries, except in certain circumstances, to: (i) create, incur, assume or suffer to exist indebtedness; (ii) create or permit to exist liens on their properties; (iii) prepay certain indebtedness unless there is no default or event of default under the facility; (iv) make or pay any dividends or distributions in excess of certain amounts; (v) merge with or into another person, liquidate or dissolve; or acquire all or substantially all of the assets of any going concern or going line of business or acquire all or a substantial portion of another person’s assets; (vi) make particular investments and loans; (vii) sell, transfer, convey, assign or dispose of its assets or properties other than in the ordinary course of business and other select instances; (viii) deal with any affiliate except in the ordinary course of business on terms no less favorable to CNXM than it would otherwise receive in an arm’s length transaction; (ix) amend in any material manner its certificate of incorporation, bylaws, or other organizational documents without giving prior notice to the lenders and, in some cases, obtaining the consent of the lenders. In addition, CNXM is obligated to maintain at the end of each fiscal quarter (x) a maximum total leverage ratio of no greater than between 4.75 to 1.00 ranging to no greater than 5.50 to 1.00 in certain circumstances; (y) a maximum secured leverage ratio of no greater than 3.50 to 1.00 and (z) a minimum interest coverage ratio of no less than 2.50 to 1.00. CNXM was in compliance with all financial covenants as of September 30, 2018. The CNXM credit facility also contains customary events of default, including, but not limited to, a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The obligations under the facility are secured by substantially all of the assets of CNXM and its wholly-owned subsidiaries. CNX is not a guarantor under the facility. At September 30, 2018, the CNXM credit facility had $44,000 of borrowings outstanding. |
Long-Term Debt |
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Long-term Debt, Other Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | LONG-TERM DEBT:
* Excludes current portion of Capital Lease Obligations of $6,958 and $6,848 at September 30, 2018 and December 31, 2017, respectively. During the nine months ended September 30, 2018, CNXM completed a private offering of $400,000 of 6.50% senior notes due in March 2026 less $6,000 of unamortized bond discount. CNX is not a guarantor of CNXM's 6.50% senior notes due in March 2026 or CNXM's senior secured revolving credit facility. During the nine months ended September 30, 2018, CNX purchased $391,375 of its outstanding 5.875% senior notes due April 2022. As part of this transaction, a loss of $15,635 was included in Loss on Debt Extinguishment on the Consolidated Statements of Income. During the three and nine months ended September 30, 2018, CNX purchased $200,000 and $500,000, respectively, of its outstanding 8.00% senior notes due in April 2023. As part of these transactions, a loss of $15,385 and $38,798, respectively, was included in Loss on Debt Extinguishment on the Consolidated Statements of Income. During the nine months ended September 30, 2017, CNX purchased $119,025 of its outstanding 5.875% senior notes due in April 2022. As part of this transaction, a gain of $786 was included in Loss on Debt Extinguishment on the Consolidated Statements of Income. During the three and nine months ended September 30, 2017, CNX called the remaining $74,470 balance on its 8.25% senior notes due in April 2020 and the remaining $20,611 balance on its 6.375% senior notes due in March 2021. As part of these transactions, a loss of $2,019 was included in Loss on Debt Extinguishment on the Consolidated Statements of Income. |
Commitments and Contingent Liabilities |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingent Liabilities | COMMITMENTS AND CONTINGENT LIABILITIES: CNX and its subsidiaries are subject to various lawsuits and claims with respect to such matters as personal injury, royalty accounting, damage to property, exposure to hazardous substances, governmental regulations including environmental remediation, employment and contract disputes and other claims and actions arising out of the normal course of business. CNX accrues the estimated loss for these lawsuits and claims when the loss is probable and can be estimated. The Company's 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 CNX. 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 CNX; however, such amounts cannot be reasonably estimated. At September 30, 2018, CNX has provided the following financial guarantees, unconditional purchase obligations, operating lease obligations and letters of credit to certain third parties as described by major category in the following tables. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments. 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 unconditional purchase obligations and letters of credit are recorded as liabilities in the financial statements. CNX management believes that these commitments will expire without being funded, and therefore will not have a material adverse effect on financial condition.
Excluded from the above table are commitments and guarantees that relate to discontinued operations, entered into in conjunction with the spin-off of the Company's coal business (See Note 5 - Discontinued Operations). Although CONSOL Energy has agreed to indemnify us to the extent that we are called upon to pay any of these liabilities, there is no assurance that CONSOL Energy will satisfy its obligations to indemnify us in these situations. CNX uses various leased facilities and equipment in its operations. Future minimum lease payments under operating leases at September 30, 2018 are as follows:
CNX enters into long-term unconditional purchase obligations to procure major equipment purchases, natural gas firm transportation, gas drilling services and other operating goods and services. These purchase obligations are not recorded on the Consolidated Balance Sheets. As of September 30, 2018, the purchase obligations for each of the next five years and beyond were as follows:
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS: CNX enters into financial derivative instruments to manage its exposure to commodity price volatility. These natural gas and NGL commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings. CNX is exposed to credit risk in the event of non-performance by counterparties. The creditworthiness of counterparties is subject to continuing review. The Company has not experienced any issues of non-performance by derivative counterparties. None of the Company's counterparty master agreements currently require CNX to post collateral for any of its positions. However, as stated in the counterparty master agreements, if CNX's obligations with one of its counterparties cease to be secured on the same basis as similar obligations with the other lenders under the credit facility, CNX would have to post collateral for instruments in a liability position in excess of defined thresholds. All of the Company's derivative instruments are subject to master netting arrangements with our counterparties. CNX recognizes all financial derivative instruments as either assets or liabilities at fair value on the Consolidated Balance Sheets on a gross basis. Each of the Company's counterparty master agreements allows, in the event of default, the ability to elect early termination of outstanding contracts. If early termination is elected, CNX and the applicable counterparty would net settle all open hedge positions. The total notional amounts of production of CNX's derivative instruments at September 30, 2018 and December 31, 2017 were as follows:
The gross fair value of CNX's derivative instruments at September 30, 2018 and December 31, 2017 was as follows:
The effect of derivative instruments on the Company's Consolidated Statements of Income was as follows:
The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery. These physical commodity contracts qualify for the normal purchases and sales exception and are not subject to derivative instrument accounting. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS: CNX 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 NYMEX forward curves, LIBOR-based discount rates and basis forward curves), while unobservable inputs reflect the Company's own assumptions of what market participants would use. The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below: Level One - Quoted prices for identical instruments in active markets. Level Two - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including NYMEX forward curves, LIBOR-based discount rates and basis forward curves. Level Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity. In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy. The financial instruments measured at fair value on a recurring basis are summarized below:
The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected: Cash and cash equivalents: The carrying amount reported in the Consolidated Balance Sheets for cash and cash equivalents approximates its fair value due to the short-term maturity of these instruments. 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:
Cash and cash equivalents represent highly- liquid instruments and constitute Level 1 fair value measurements. Certain of the Company’s debt is actively traded on a public market and, as a result, constitute Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitute Level 2 fair value measurements. |
Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | VARIABLE INTEREST ENTITIES: The Company determined CNXM, of which the company owns an approximately 34% limited partner interest, to be a variable interest entity. Upon completion of the Midstream Acquisition (see Note 6 - Acquisitions and Dispositions), the Company has the power through the Company's ownership and control of CNXM's general partner (CNX Midstream GP LLC) to direct the activities that most significantly impact CNXM's economic performance. In addition, through its limited partner interest and incentive distribution rights, or IDRs, in CNXM, the Company has the obligation to absorb the losses of CNXM and the right to receive benefits in accordance with such interests. As the Company has a controlling financial interest and is the primary beneficiary of CNXM, the Company consolidates CNXM commencing January 3, 2018. The risks associated with the operations of CNXM are discussed in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 7, 2018. The following table presents amounts included in the Company's Consolidated Balance Sheet that were for the use or obligation of CNXM as of September 30, 2018:
The following table summarizes CNXM's Consolidated Statements of Operations and Cash Flows for the three and nine months ended September 30, 2018, inclusive of affiliate amounts:
In March 2018, CNXM closed on its acquisition of CNX's remaining 95% interest in the gathering system and related assets commonly referred to as the Shirley-Penns System, in exchange for cash consideration in the amount of $265,000. CNXM funded the cash consideration with proceeds from the issuance of its 6.5% senior notes due 2026 (See Note 11 - Long-Term Debt). Prior to the acquisition of Noble's interest on January 3, 2018, CNX accounted for its interests in CNX Gathering and CNXM as an equity-method investment. The following is a summary of the Company's Investment in Affiliates balances included within the Consolidated Balance Sheets associated with CNX Gathering and CNXM, respectively:
The following transactions were included in Other Operating Income and Transportation, Gathering and Compression within the Consolidated Statements of Income:
At September 30, 2018 and December 31, 2017, CNX had a net payable of $10,473 and $9,982 respectively due to CNX Gathering and CNXM, primarily for accrued but unpaid gathering services. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION: CNX consists of two principal business divisions: Exploration and Production (E&P) and Midstream. The principal activity of the E&P Division, which includes four reportable segments, is to produce pipeline quality natural gas for sale primarily to gas wholesalers. The E&P Division's reportable segments are Marcellus Shale, Utica Shale, Coalbed Methane, and Other Gas. The Other Gas Segment is primarily related to shallow oil and gas production which is not significant to the Company. It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, exploration and production related other costs, impairment of other intangible assets, as well as various other operating activities assigned to the E&P Division but not allocated to each individual segment. CNX's Midstream Division is the result of CNX's acquisition of Noble's Midstream, LLC's interest in CNX Gathering (See Note 6 - Acquisitions and Dispositions). As part of the acquisition, CNX now has a controlling financial interest and is the primary beneficiary of CNXM, through its approximately 34% ownership of the outstanding limited partner interests (See Note 15 - Variable Interest Entities for more information). The principal activity of the Midstream Division is the ownership, operation, development and acquisition of natural gas gathering and other midstream energy assets, of CNX Gathering and CNXM, which provide natural gas gathering services for the Company's produced gas, as well as for other independent third parties in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia. Excluded from the Midstream Division are the gathering assets and operations of CNX that have not been contributed to CNX Gathering and CNXM. Prior to the acquisition, the Company accounted for its 50% interest in CNX Gathering LLC as an equity method investment. The Company's unallocated expenses include other expense, gain on asset sales related to non-core assets, gain on previously held equity interest, loss on debt extinguishment, impairment of other intangible assets and income taxes. In the preparation of the following information, intersegment sales have been recorded at amounts approximating market prices. Operating profit for each segment is based on sales less identifiable operating and non-operating expenses. Assets are reflected at the division level for E&P and are not allocated between each individual E&P segment. These assets are not allocated to each individual segment due to the diverse asset base controlled by CNX, whereby each individual asset may service more than one segment within the division. An allocation of such asset base would not be meaningful or representative on a segment by segment basis. Industry segment results for the three months ended September 30, 2018:
Industry segment results for the three months ended September 30, 2017:
Industry segment results for the nine months ended September 30, 2018:
Industry segment results for the nine months ended September 30, 2017:
Reconciliation of Segment Information to Consolidated Amounts: Revenue and Other Operating Income
Income from Continuing Operations Before Income Tax:
Total Assets:
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS: CONSOL Energy Inc. In connection with the spin-off of its coal business, as discussed in Note 5 - Discontinued Operations, CNX and CONSOL Energy entered into several agreements that govern the relationship of the parties following the Distribution, including the following: •Separation and Distribution Agreement; •Transition Services Agreement; •Tax Matters Agreement; •Employee Matters Agreement; •Intellectual Property Matters Agreement; •CNX Resources Corporation to CONSOL Energy Inc. Trademark License Agreement; •CONSOL Energy Inc. to CNX Resources Corporation Trademark License Agreement; and •First Amendment to Amended and Restated Omnibus Agreement ("Omnibus Amendment"). As of September 30, 2018 and December 31, 2017, CNX had a receivable from CONSOL Energy of $473 and $12,540, respectively, recorded in Total Current Assets on the Consolidated Balance Sheets. At September 30, 2018, CNX also had recorded obligations to CONSOL Energy of $11,570, of which $5,282 was included in Total Current Liabilities and $6,288 was included in Total Deferred Credits and Other Liabilities on the Consolidated Balance Sheets. At December 31, 2017, CNX had recorded obligations to CONSOL Energy of $15,415, of which $4,500 was included in Total Current Liabilities and $10,915 was included in Total Deferred Credits and Other Liabilities on the Consolidated Balance Sheets. These items relate to reimbursement of the one-time transaction costs as well as other reimbursements per the terms of the Separation and Distribution Agreement. For the periods prior to the spin-off of the coal business, all significant intercompany transactions between CNX and CONSOL Energy have been included in the Consolidated Financial Statements and are considered to have been effectively settled for cash at the time the transaction was recorded. In the Consolidated Statement of Stockholders' Equity, the distribution of CONSOL Energy Inc. is the net of the variety of intercompany transactions including, but not limited to, collection of trade receivables, payment of trade payables and accrued liabilities, settlement of charges for allocated selling, general and administrative costs and payment of taxes by CNX on CONSOL Energy's behalf. |
Stock Repurchase |
9 Months Ended |
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Sep. 30, 2018 | |
Stock Repurchase [Abstract] | |
Stock Repurchase | STOCK REPURCHASE: In September 2017, CNX's Board of Directors approved a one-year stock repurchase program of up to $200,000. On October 30, 2017, the Board approved an increase to the aggregate amount of the repurchase plan to $450,000. On July 30, 2018, the Board approved the extension of the stock repurchase program through December 31, 2018. On October 26, 2018, the company's Board of Directors approved an additional $300,000 share repurchase authorization, which is not subject to an expiration date. The repurchases may be affected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, block trades, derivative contracts or otherwise in compliance with Rule 10b-18. The timing of any repurchases will be based on a number of factors, including available liquidity, the Company's stock price, the Company's financial outlook, and alternative investment options. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares and the Board may modify, suspend, or discontinue its authorization of the program at any time. The Board of Directors will continue to evaluate the size of the stock repurchase program based on CNX's free cash flow position, leverage ratio, and capital plans. During the nine months ended September 30, 2018, 19,399,032 shares were repurchased and retired at an average price of $15.28 per share for a total cost of |
Goodwill and Other Intangible Assets |
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Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill is not amortized, but is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of its carrying value. The Company may first consider qualitative factors to assess whether there are indicators that it is more likely than not that the fair value of a reporting unit may not exceed its carrying amount. To the extent that such indicators exist, a goodwill impairment test is completed. If the carrying value of the goodwill of a reporting unit exceeds its implied fair value, the difference is recognized as an impairment charge. The Company uses a combination of an income and market approach to estimate the fair value of a reporting unit. As a result of the Midstream Acquisition, CNX recorded $796,359 of goodwill and $128,781 of other intangible assets in conjunction with the preliminary purchase accounting. In May 2018 the Company recognized an impairment on this intangible asset of $18,650 in connection with the AEA with HG Energy (See Note 6 - Acquisitions and Dispositions for more information). All goodwill is attributed to the Midstream reportable segment. Changes in the carrying amount of goodwill consist of the following activity:
The carrying amount and accumulated amortization of other intangible assets consist of the following:
Amortization expense for other intangible assets was $1,638 and $5,293 for the three and nine months ended September 30, 2018 respectively. There was no amortization expense for the three and nine months ended September 30, 2017. The customer relationships intangible asset category will be amortized on a straight-line basis over approximately 17 years. The estimated future annual amortization expense for the next five fiscal years for other intangible assets recorded at September 30, 2018 is as follows:
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Recent Accounting Pronouncements |
9 Months Ended |
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Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS: In August 2018, the FASB issued Update 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This Update removes the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and adds a requirement to disclose an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. For public business entities, the amendments in this Update are effective for fiscal years ending after December 15, 2020, and early adoption is permitted. Entities should apply these amendments retrospectively. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In August 2018, the FASB issued Update 2018-13 - Fair Value Measurement (Topic 820), which modifies the disclosure requirements in Topic 820. This Update removes the following disclosure requirements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The Update also makes the following additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities should apply the additions prospectively and all other amendments should be applied retrospectively. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In July 2018, the FASB issued Update 2018-09 - Codification Improvements, which affects a wide variety of Topics in the ASC. The amendments in this Update represent changes to clarify, correct errors, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice. The amendments make the ASC easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments in this Update are effective at different times ranging from issuance of this Update to annual periods beginning after December 15, 2018 for public business entities, with varying transition guidance. In February 2018, the FASB issued Update 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This Update also requires certain disclosures about stranded tax effects. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the amendments should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In January 2017, the FASB issued Update 2017-04 - Simplifying the Test of Goodwill Impairment. This Update simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead a company would record an impairment charge based on the excess of a reporting unit's carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). This Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities will apply the standard's provisions prospectively. The Company adopted Update 2017-04 on January 1, 2018 and determined that this standard will not have a material quantitative effect on the financial statements, unless an impairment charge is necessary. In February 2016, the FASB issued Update 2016-02 - Leases (Topic 842), which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Update 2016-02 does retain a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to not significantly change from previous GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities, but to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the right-to-use asset and lease liability will be initially measured at the present value of the lease payments in the statement of financial position. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. However, in July 2018, the FASB issued Update 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. CNX has finalized a project plan, performed an initial assessment of all agreements covered under the standard and have begun implementing changes to our information systems and internal controls. CNX is still assessing the impact to the Consolidated Financial Statements as well as planning for adoption and implementation of this standard, which includes applying practical expedients provided in the standards update that allow, among other things, for contracts that commenced prior to the adoption to not be reassessed. We also anticipate to elect a policy not to recognize right of use assets and lease liabilities related to short-term leases. |
Recent Accounting Pronouncements (Policies) |
9 Months Ended |
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Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In August 2018, the FASB issued Update 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This Update removes the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and adds a requirement to disclose an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. For public business entities, the amendments in this Update are effective for fiscal years ending after December 15, 2020, and early adoption is permitted. Entities should apply these amendments retrospectively. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In August 2018, the FASB issued Update 2018-13 - Fair Value Measurement (Topic 820), which modifies the disclosure requirements in Topic 820. This Update removes the following disclosure requirements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The Update also makes the following additions: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities should apply the additions prospectively and all other amendments should be applied retrospectively. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In July 2018, the FASB issued Update 2018-09 - Codification Improvements, which affects a wide variety of Topics in the ASC. The amendments in this Update represent changes to clarify, correct errors, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice. The amendments make the ASC easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments in this Update are effective at different times ranging from issuance of this Update to annual periods beginning after December 15, 2018 for public business entities, with varying transition guidance. In February 2018, the FASB issued Update 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. This Update also requires certain disclosures about stranded tax effects. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the amendments should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The adoption of this guidance is not expected to have a material impact on the Company's financial statements. In January 2017, the FASB issued Update 2017-04 - Simplifying the Test of Goodwill Impairment. This Update simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead a company would record an impairment charge based on the excess of a reporting unit's carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). This Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities will apply the standard's provisions prospectively. The Company adopted Update 2017-04 on January 1, 2018 and determined that this standard will not have a material quantitative effect on the financial statements, unless an impairment charge is necessary. In February 2016, the FASB issued Update 2016-02 - Leases (Topic 842), which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Update 2016-02 does retain a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to not significantly change from previous GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities, but to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the right-to-use asset and lease liability will be initially measured at the present value of the lease payments in the statement of financial position. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. However, in July 2018, the FASB issued Update 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. |
Earnings Per Share (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be antidilutive:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The table below sets forth the share-based awards that have been exercised or released:
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Schedule of Earnings Per Share, Basic and Diluted | The computations for basic and dilutive earnings per share are as follows:
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Changes in Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income/(Loss) by Component | Changes in Accumulated Other Comprehensive Loss related to pension obligations, net of tax, were as follows:
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Schedule of Reclassification of Adjustments to Accumulated Other Comprehensive Income | The following table shows the reclassification of adjustments out of Accumulated Other Comprehensive Loss:
*Excludes amounts related to the remeasurement of the actuarially determined pension obligations for the nine months ended September 30, 2018. |
Revenue From Contracts With Customers (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table is a disaggregation of our revenue by major sources:
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Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The following table details selected financial information for the divested business included within discontinued operations:
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Acquisitions and Dispositions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Estimated Fair Value of Consideration Transferred:
The following is a summary of the preliminary estimated fair values of the net assets acquired:
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Schedule of Pro Forma Information | The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the acquisition been completed at January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.
Post-Acquisition Operating Results (Midstream Acquisition) The Midstream Acquisition contributed the following to the Company's Midstream segment for the three and nine months ended September 30, 2018.
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Components of Pension Plan Net Periodic Benefit Cost (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Costs | Components of Net Periodic Benefit Cost are as follows:
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Property, Plant and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
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Long-Term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Other Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt |
* Excludes current portion of Capital Lease Obligations of $6,958 and $6,848 at September 30, 2018 and December 31, 2017, respectively. |
Commitments and Contingent Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Purchase Commitment | At September 30, 2018, CNX has provided the following financial guarantees, unconditional purchase obligations, operating lease obligations and letters of credit to certain third parties as described by major category in the following tables. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments. 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 unconditional purchase obligations and letters of credit are recorded as liabilities in the financial statements. CNX management believes that these commitments will expire without being funded, and therefore will not have a material adverse effect on financial condition.
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Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under operating leases at September 30, 2018 are as follows:
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Unrecorded Unconditional Purchase Obligations Disclosure | As of September 30, 2018, the purchase obligations for each of the next five years and beyond were as follows:
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Derivative Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Derivative Instruments | The total notional amounts of production of CNX's derivative instruments at September 30, 2018 and December 31, 2017 were as follows:
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Schedule of Derivative Assets at Fair Value | The gross fair value of CNX's derivative instruments at September 30, 2018 and December 31, 2017 was as follows:
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Schedule of Derivative Liabilities at Fair Value | The gross fair value of CNX's derivative instruments at September 30, 2018 and December 31, 2017 was as follows:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The effect of derivative instruments on the Company's Consolidated Statements of Income was as follows:
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The financial instruments measured at fair value on a recurring basis are summarized below:
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Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:
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Variable Interest Entities (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following table presents amounts included in the Company's Consolidated Balance Sheet that were for the use or obligation of CNXM as of September 30, 2018:
The following table summarizes CNXM's Consolidated Statements of Operations and Cash Flows for the three and nine months ended September 30, 2018, inclusive of affiliate amounts:
The following transactions were included in Other Operating Income and Transportation, Gathering and Compression within the Consolidated Statements of Income:
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Investments in and Advances to Affiliates | The following is a summary of the Company's Investment in Affiliates balances included within the Consolidated Balance Sheets associated with CNX Gathering and CNXM, respectively:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Segment Results | Industry segment results for the three months ended September 30, 2018:
Industry segment results for the three months ended September 30, 2017:
Industry segment results for the nine months ended September 30, 2018:
Industry segment results for the nine months ended September 30, 2017:
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Reconciliation of Revenue from Segments to Consolidated | Revenue and Other Operating Income
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Reconciliation of Revenue and Operating Income from Segments to Consolidated | Income from Continuing Operations Before Income Tax:
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Reconciliation of Assets and Liabilities from Segment to Consolidated | Total Assets:
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | All goodwill is attributed to the Midstream reportable segment. Changes in the carrying amount of goodwill consist of the following activity:
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Schedule of Finite-Lived Intangible Assets | The carrying amount and accumulated amortization of other intangible assets consist of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future annual amortization expense for the next five fiscal years for other intangible assets recorded at September 30, 2018 is as follows:
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Earnings Per Share Share-based Compensation (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based awards, exercised or released (in shares) | 395,648 | 31,824 | 1,158,943.000 | 1,017,483 |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercised (in shares) | 18,546 | 17,048 | 245,847 | 107,510 |
Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercised (in shares) | 184,176 | 14,776 | 362,573 | 349,037 |
Performance Share Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options exercised (in shares) | 192,926 | 0 | 550,523 | 560,936 |
Changes in Accumulated Other Comprehensive Income / (Loss) by Component (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at December 31, 2017 | $ (8,476) | |||
Other Comprehensive Income before Reclassifications | 1,643 | |||
Amounts Reclassified from Accumulated Other Comprehensive Loss, net of tax | 361 | |||
Current Period Other Comprehensive Income | $ 22 | $ 3,464 | 2,004 | $ 10,430 |
Balance at September 30, 2018 | $ (6,472) | $ (6,472) |
Changes in Accumulated Other Comprehensive Loss Reclassification of Adjustments out of AOCI (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Equity [Abstract] | ||||
Amortization of Prior Service Costs | $ (6) | $ (749) | $ (186) | $ (2,247) |
Recognized Net Actuarial Loss | 41 | 6,247 | 749 | 18,798 |
Total | 35 | 5,498 | 563 | 16,551 |
Less: Tax Benefit | 13 | 2,034 | 202 | 6,121 |
Net of Tax | $ 22 | $ 3,464 | $ 361 | $ 10,430 |
Revenue From Contracts With Customers Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
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Sep. 30, 2018 |
Jan. 03, 2018 |
Dec. 31, 2017 |
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Business Acquisition [Line Items] | |||
Payment terms for contract with customers | 25 days | ||
Receivables related to contracts with customers | $ 147,724 | $ 156,817 | |
Midstream Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Receivables related to acquisition | $ 9,353 |
Acquisitions and Dispositions Consideration Given In Acquisition (Details) - Midstream Acquisition [Member] - USD ($) $ in Thousands |
Jan. 03, 2018 |
Dec. 14, 2017 |
---|---|---|
Business Acquisition [Line Items] | ||
Cash Consideration | $ 305,000 | $ 305,000 |
CNX Gathering Cash on Hand at January 3, 2018 Distributed to Noble | 2,620 | |
Fair Value of Previously Held Equity Interest | 799,033 | |
Total Estimated Fair Value of Consideration Transferred | $ 1,106,653 |
Acquisitions and Dispositions Fair Value of Net Assets Acquired (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Jan. 03, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Total Identifiable Net Assets | |||
Goodwill | $ 796,359 | $ 0 | |
Midstream Acquisition [Member] | |||
Fair Value of Assets Acquired: | |||
Cash and Cash Equivalents | $ 8,348 | ||
Accounts and Notes Receivable | 21,199 | ||
Prepaid Expense | 2,006 | ||
Other Current Assets | 163 | ||
Property, Plant and Equipment, Net | 1,043,340 | ||
Intangible Assets | 128,781 | ||
Other | 593 | ||
Total Assets Acquired | 1,204,430 | ||
Fair Value of Liabilities Assumed: | |||
Accounts Payable | 26,059 | ||
CNXM Revolving Credit Facility | 149,500 | ||
Total Liabilities Assumed | 175,559 | ||
Total Identifiable Net Assets | |||
Total Identifiable Net Assets | 1,028,871 | ||
Fair Value of Noncontrolling Interest in CNXM | (718,577) | ||
Goodwill | 796,359 | ||
Net Assets Acquired | $ 1,106,653 |
Acquisitions and Dispositions Post Acquisition Operating Results (Details) - CNXM [Member] - Midstream Acquisition [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
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Business Acquisition [Line Items] | ||
Midstream Revenue | $ 61,372 | $ 186,875 |
Earnings from Continuing Operations Before Income Tax | $ 31,173 | $ 94,502 |
Acquisitions and Dispositions Pro Forma Financial Information (Details) - Midstream Acquisition [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
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Business Acquisition [Line Items] | ||
Pro Forma Total Revenue and Other Operating Income | $ 311,272 | $ 1,051,683 |
Pro Forma Net Income from Continuing Operations | 11,240 | 104,219 |
Less: Pro Forma Net income Attributable to Noncontrolling Interests | 18,670 | 56,804 |
Pro Forma Net Income(Loss) from Continuing Operations Attributable to CNX | $ (7,430) | $ 47,415 |
Pro Forma Income Loss per Share from Continuing Operations (Basic) (usd per share) | $ (0.03) | $ 0.21 |
Pro Forma Income Loss per Share from Continuing Operations (Diluted) (usd per share) | $ (0.04) | $ 0.20 |
Components of Pension Plan Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Sep. 30, 2017 |
Jun. 30, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||
Amortization of Prior Service Credits | $ (6) | $ (749) | $ (186) | $ (2,247) | ||
Recognized Net Actuarial Loss | 41 | 6,247 | 749 | 18,798 | ||
Total | 35 | 5,498 | 563 | 16,551 | ||
Pension Plan [Member] | ||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||||
Service Cost | 54 | 96 | 247 | 289 | ||
Interest Cost | 333 | 308 | 932 | 927 | ||
Amortization of Prior Service Credits | (6) | (93) | (187) | (279) | ||
Recognized Net Actuarial Loss | 59 | 390 | 806 | 1,176 | ||
Curtailment Gain | 0 | $ (416) | 0 | (416) | 0 | |
Total | $ 440 | $ 701 | $ 1,382 | $ 2,113 | ||
Decrease in plan liabilities due to plan remeasurement | $ 2,235 |
Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Mar. 21, 2018 |
|
Income Tax Disclosure [Abstract] | |||||||
Effective tax rate, percentage | 27.90% | (93.50%) | 24.10% | 70.00% | |||
Federal NOL carryback period | 10 years | ||||||
Income tax benefit, revaluation of deferred tax assets | $ 115,291 | ||||||
Income tax benefit, reversal of valuation allowance for AMT credits | 154,384 | ||||||
Financial statement benefit, NOL carryback | $ 20,000 | ||||||
Total amount of uncertain tax positions | $ 39,953 | $ 39,953 | 37,813 | ||||
Unrecognized tax benefits that would impact effective tax rate | 31,516 | 31,516 | 29,376 | ||||
Change in unrecognized tax benefits | 2,140 | ||||||
Accrued interest liability | 897 | 897 | $ 644 | ||||
Accrued interest expense | $ 252 | $ 252 | |||||
Reduction of net operating loss | $ 108,651 |
Operating Lease Obligations Due (Details) $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Less than 1 year | $ 13,643 |
1 - 3 years | 17,693 |
3 - 5 years | 10,748 |
More than 5 years | 37,676 |
Total Operating Lease Obligations | $ 79,760 |
Unrecorded Unconditional Purchase Obligation (Details) - Purchase Commitment [Member] $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Less than 1 year | $ 263,068 |
1 - 3 years | 515,251 |
3 - 5 years | 397,821 |
More than 5 years | 1,080,415 |
Total Purchase Obligations | $ 2,256,555 |
Notional Amounts of Derivative Instruments (Details) - MMcf MMcf in Billions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Commodity Member [Member] | ||
Derivative [Line Items] | ||
Notional amount | 1,096.1 | 1,067.2 |
Basis Swap [Member] | ||
Derivative [Line Items] | ||
Notional amount | 781.8 | 688.1 |
Derivative Instruments Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Commodity Swaps [Member] | ||
Asset Derivative Instruments | ||
Prepaid Expense | $ 34,985 | $ 62,369 |
Other Assets | 153,279 | 59,281 |
Total Asset | 188,264 | 121,650 |
Liability Derivative Instruments | ||
Other Accrued Liabilities | 26,371 | 5,985 |
Other Liabilities | 11,648 | 42,419 |
Total Liability | 38,019 | 48,404 |
Basis Swap [Member] | ||
Asset Derivative Instruments | ||
Prepaid Expense | 10,085 | 14,965 |
Other Assets | 29,099 | 24,223 |
Total Asset | 39,184 | 39,188 |
Liability Derivative Instruments | ||
Other Accrued Liabilities | 26,293 | 35,306 |
Other Liabilities | 26,952 | 17,179 |
Total Liability | $ 53,245 | $ 52,485 |
Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Gas Derivatives | $ 0 | $ 0 |
Put Option | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Gas Derivatives | 136,184 | 59,949 |
Put Option | 0 | (3,500) |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Gas Derivatives | 0 | 0 |
Put Option | $ 0 | $ 0 |
Fair Value Disclosures (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents | $ 42,672 | $ 509,167 | $ 281,158 | $ 46,299 |
Long-Term Debt | 2,184,481 | 2,187,289 | ||
Long-term Debt, Fair Value | 2,169,446 | 2,281,282 | ||
Carrying Amount [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents | 42,672 | 509,167 | ||
Long-Term Debt | $ 2,194,003 | $ 2,204,825 |
Variable Interest Entities (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Variable Interest Entity [Line Items] | |||
Payable to affiliates | $ 10,473 | $ 9,982 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Variable Interest Entity [Line Items] | |||
Variable interest entity, ownership percentage | 34.00% | ||
Senior Notes due March 2026 [Member] | |||
Variable Interest Entity [Line Items] | |||
Stated rate, debt instrument | 6.50% | ||
CNX Midstream Partners LP [Member] | Senior Notes due March 2026 [Member] | |||
Variable Interest Entity [Line Items] | |||
Stated rate, debt instrument | 6.50% | ||
Shirley-Penns System | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage by parent | 95.00% | ||
Cash consideration transferred | $ 265,000 |
Variable Interest Entities Balance Sheet (Details) - Variable Interest Entity, Primary Beneficiary [Member] $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
ASSETS | |
Total Assets | $ 878,051 |
Liabilities: | |
Total Liabilities | 494,796 |
Cash [Member] | |
ASSETS | |
Current assets | 950 |
Receivables - Related Party [Member] | |
ASSETS | |
Current assets | 15,053 |
Receivables Excluding Third Party [Member] | |
ASSETS | |
Current assets | 7,185 |
Other Current Assets [Member] | |
ASSETS | |
Current assets | 2,623 |
Property, Plant and Equipment [Member] | |
ASSETS | |
Non-current assets | 848,836 |
Other Noncurrent Assets [Member] | |
ASSETS | |
Non-current assets | 3,404 |
Accounts Payable [Member] | |
Liabilities: | |
Current liabilities | 53,391 |
Accounts Payable - Related Party [Member] | |
Liabilities: | |
Current liabilities | 4,427 |
Revolving Credit Facility [Member] | |
Liabilities: | |
Current liabilities | 44,000 |
Long-term Debt [Member] | |
Liabilities: | |
Non-current liabilities | $ 392,978 |
Segment Information (Details) - segment |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 14, 2017 |
|
Segment Reporting Information [Line Items] | ||
Number of Divisions | 2 | |
E&P Division [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 4 | |
CNX Gathering LLC [Member] | ||
Segment Reporting Information [Line Items] | ||
Ownership percentage in equity method investment | 50.00% | 50.00% |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Segment Reporting Information [Line Items] | ||
Variable interest entity, ownership percentage | 34.00% |
Segment Information Reconciliation of Segment Information, Revenue and Other Operating Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Revenue, Major Customer [Line Items] | ||||
Gain on Commodity Derivative Instruments | $ 18,005 | $ 19,183 | $ 78,752 | $ 80,508 |
Other Operating Income | 3,903 | 20,176 | 23,146 | 52,483 |
Total Revenue | 397,126 | 287,185 | 1,294,979 | 978,180 |
Operating Segments [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total Segment Revenue from Contracts with External Customers | $ 375,218 | $ 247,826 | $ 1,193,081 | $ 845,189 |
Related Party Transactions (Details) - CONSOL Energy [Member] - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Related Party Transaction [Line Items] | ||
Receivable from related party | $ 473 | $ 12,540 |
Due to related parties | 11,570 | 15,415 |
Total Current Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 5,282 | 4,500 |
Total Deferred Credits and Other Liabilities [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 6,288 | $ 10,915 |
Stock Repurchase (Details) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Oct. 26, 2018 |
Oct. 30, 2017 |
Sep. 30, 2017 |
|
Subsequent Event [Line Items] | ||||
Stock repurchase program, authorized amount | $ 450,000,000 | $ 200,000,000 | ||
Shares repurchased during period (in shares) | 19,399,032 | |||
Shares repurchased, average price (in usd per share) | $ 15.28 | |||
Total value of shares repurchased | $ 296,734,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock repurchase program, additional authorized amount | $ 300,000,000 |
Goodwill and Other Intangible Assets (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
May 31, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Jan. 03, 2018 |
Dec. 31, 2017 |
|
Goodwill [Line Items] | |||||||
Goodwill | $ 796,359,000 | $ 796,359,000 | $ 0 | ||||
Impairment of Other Intangible Assets | 0 | $ 0 | 18,650,000 | $ 0 | |||
Amortization expense | $ 1,638,000 | $ 0 | $ 5,293,000 | $ 0 | |||
Useful life, customer relationship intangible assets | 17 years | ||||||
Midstream Acquisition [Member] | |||||||
Goodwill [Line Items] | |||||||
Goodwill | $ 796,359,000 | ||||||
Other intangible assets | $ 128,781,000 | ||||||
Customer Relationships [Member] | Midstream [Member] | |||||||
Goodwill [Line Items] | |||||||
Impairment of Other Intangible Assets | $ 18,650,000 | $ 18,650,000 |
Goodwill and Other Intangible Assets Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
December 31, 2017 | $ 0 |
September 30, 2018 | 796,359 |
Midstream Acquisition [Member] | |
Goodwill [Roll Forward] | |
Acquisitions | $ 796,359 |
Goodwill and Other Intangible Assets Carrying Amount and Accumulated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Customer Relationships | $ 128,781 | $ 128,781 | ||
Less: Impairment of Other Intangible Assets | 0 | $ 0 | (18,650) | $ 0 |
Less: Accumulated Amortization for Customer Relationships | (5,293) | (5,293) | ||
Total Other Intangible Assets, net | $ 104,838 | $ 104,838 |
Goodwill and Other Intangible Assets Estimated Future Annual Amortization Expense (Details) $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated annual amortization expense, Year 2019 | $ 6,552 |
Estimated annual amortization expense, Year 2020 | 6,552 |
Estimated annual amortization expense, Year 2021 | 6,552 |
Estimated annual amortization expense, Year 2022 | 6,552 |
Estimated annual amortization expense, Year 2023 | $ 6,552 |
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