Discontinued Operations

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

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, formerly known as CONSOL Energy, Inc. 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 CNXC 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 common stock held as of November 15, 2017. The coal business has been reclassified to discontinued operations for all periods presented.

In August 2016, CNX completed the sale of the Miller Creek and Fola Mining Complexes. In the transaction, the buyer acquired the Miller Creek and Fola assets and assumed the Miller Creek and Fola mine closing and reclamation liabilities. In order to equalize the value exchange, CNX paid $28,271 of cash at closing, which included property taxes associated with the properties sold and other closing costs. This amount was included in Net Cash (Used in) Provided by Discontinued Investing Activities in the Consolidated Statements of Cash Flows for the year ended December 31, 2016. CNX will also pay a total of $12,291 in remaining installments through January 2020. The net loss on the sale of $53,130, excluding the related impairment charge discussed below, was included in Income (Loss) from Discontinued Operations, net in the Consolidated Statements of Income. Prior to the closing, the Miller Creek and Fola Mining Complexes were classified as held for sale in discontinued operations and in accordance with the accounting guidance for Property, Plant and Equipment, assets held for sale are required to be measured at the lower of carrying value or fair value less costs to sell. Upon meeting the assets held for sale criteria, the Company determined the carrying value of the Miller Creek and Fola Mining Complexes exceeded the fair value less costs to sell. As a result, an impairment charge

of $355,681 was recorded during the year ended December 31, 2016. This impairment was included in Income (Loss) from Discontinued Operations, net in the Consolidated Statements of Income.

In March 2016, CNX completed the sale of its membership interests in CONSOL Buchanan Mining Company, LLC ("BMC"), which owned and operated the Buchanan Mine located in Mavisdale, Virginia; various assets relating to the Amonate Mining Complex located in Amonate, Virginia; Russell County, Virginia coal reserves and Pangburn Shaner Fallowfield coal reserves located in Southwestern, Pennsylvania to Coronado IV LLC ("Coronado"). Various CNX assets were excluded from the sale including coalbed methane, natural gas and minerals other than coal, current assets of BMC, certain coal seams and certain surface rights and properties. Coronado assumed only specified liabilities and various CNX liabilities were excluded and not assumed. The excluded liabilities included BMC’s indebtedness, trade payables and liabilities arising prior to closing, as well as the liabilities of the subsidiaries other than BMC which were parties to the sale. In addition, the buyer agreed to pay CNX for Buchanan Mine coal sold outside the U.S. and Canada during the five years following closing a royalty of 20% of any excess of the gross sales price per ton over the following amounts: (1) year one, $75.00 per ton; (2) year two, $78.75 per ton; (3) year three, $82.69 per ton; (4) year four, $86.82 per ton; (5) year five, $91.16 per ton. Total gross royalty income recognized under this agreement was $16,244, $10,073 and $9,575 for the years ended December 31, 2018, 2017 and 2016, respectively. In connection with the separation and distribution agreement with CONSOL Energy (See Note 25 - Related Party) the royalty related to Buchanan Mine was retained by CNX and any related income is included in Other (Income) Expense in the Consolidated Statements of Income. Cash proceeds of $402,799 were received at closing and are included in Net Cash (Used in) Provided by Discontinued Investing Activities on the Consolidated Statements of Cash Flows for the year ended December 31, 2016. The net loss on the sale was $38,364 and was included in Income (Loss) from Discontinued Operations, net in the Consolidated Statements of Income for the year ended December 31, 2016.

For all periods presented in the accompanying Consolidated Statements of Income, BMC along with the various other assets and the Miller Creek and Fola Mining Complexes are classified as discontinued operations.

The following table details selected financial information for the divested business included within discontinued operations:



	For the Years Ended December 31,
	2017		2016
Coal Revenue	$	1,067,841	$	1,168,486
Other Outside Sales	60,066		31,464
Freight-Outside Coal	66,297		47,790
Miscellaneous Other Income	73,645		74,382
Gain on Sale of Assets	—		269,124
Total Revenue and Other Income	$	1,267,849	$	1,591,246
Total Costs	1,147,254		1,652,921
Income (Loss) From Operations Before Income Taxes	$	120,595	$	(61,675	)
Impairment on Assets Held for Sale	—		355,681
Income Tax Expense (Benefit)	23,984		(129,153		)
Less: Net Income Attributable to Noncontrolling interest	10,903		8,954
Income (Loss) From Discontinued Operations, net	$	85,708	$	(297,157	)