PITTSBURGH, Oct. 30, 2018
/PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or the
company) reports third quarter results. Throughout this release,
CNX distinguishes between "attributable to CNX shareholders" and
"consolidated" results.
Attributable to CNX shareholders: Excludes from
consolidated results interests in CNXM not held by CNX, which was
approximately 63.91% during the third quarter. The following
results are reported on an attributable to CNX shareholders
basis:
During the third quarter, the company reported net income
attributable to CNX shareholders of $125
million, or earnings of $0.59
per diluted share, compared to a net loss attributable to CNX
shareholders of $26 million, or a
loss of $0.11 per diluted share, in
the third quarter of 2017. After adjusting for certain items, which
are highlighted in the EBITDAX reconciliation table, the company
had adjusted net income attributable to CNX
shareholders1 in the 2018 third quarter of $35 million, or $0.17 per diluted share, compared to an adjusted
net loss attributable to CNX shareholders1 of
$41 million, or a negative
$0.18 per diluted share in the
year-earlier quarter. Adjusted EBITDAX attributable to CNX
shareholders1 was $210
million for the 2018 third quarter, compared to $109 million in the year-earlier quarter. When
using shares outstanding as of October 16,
2018, during the third quarter, adjusted EBITDAX
attributable to CNX shareholders1 per outstanding share
grew 117% to $1.03, compared to
$0.48 per outstanding share in the
year-earlier quarter.
Consolidated: Includes 100% of the results of CNX, CNX
Gathering LLC, and CNX Midstream Partners LP (NYSE: CNXM) ("CNXM")
on a consolidated basis. The following results are reported on a
consolidated basis:
The company reported net income of $147
million for the 2018 third quarter, compared to a net loss
of $26 million in the third quarter
of 2017. After adjusting for certain items, which are highlighted
in the EBITDAX reconciliation table, the company had adjusted net
income1 in the 2018 third quarter of $57 million, compared to an adjusted net
loss1 of $41 million in
the year-earlier quarter. Adjusted EBITDAX from continuing
operations1 was $239
million for the 2018 third quarter, compared to $109 million in the year-earlier quarter. When
using shares outstanding as of October 16,
2018, during the third quarter, adjusted EBITDAX from
continuing operations1 per outstanding share grew 147%
to $1.17, compared to $0.48 per outstanding share in the year-earlier
quarter.
During the third quarter, capital expenditures were $297 million, compared to $150 million spent in the year-earlier quarter,
driven largely by increased drilling and completion activity.
During the third quarter of 2018, CNX sold 119.0 Bcfe of natural
gas, or an increase of 18% from the 101.0 Bcfe sold in the
year-earlier quarter, driven primarily from a substantial increase
in dry Utica Shale volumes from Monroe
County, Ohio. Total quarterly production costs decreased to
$1.97 per Mcfe, compared to the
year-earlier quarter of $2.26 per
Mcfe, through reductions in lease operating expense (LOE),
transportation, gathering, and compression costs, and depreciation,
depletion and amortization (DD&A). LOE improved due to reduced
well tending, well service jobs, and water disposal costs.
Transportation, gathering, and compression costs improved due in
part to a drier production mix and higher sales volumes.
"During the third quarter, our team delivered targeted
turn-in-lines (TILs) with continued strong well performance,"
commented Nicholas J. DeIuliis,
president and CEO. "This operational execution led to expected
production and lower cash costs, which when coupled with our hedge
strategy, turned loose strong cash margins and cash flows,
resulting in a lower leverage ratio that creates optionality for
capital deployment. We used that optionality to reduce our share
count at discounted prices. For the third quarter, we delivered
strong EBITDAX per share growth of 147%, compared to the previous
year's third quarter, and in the fourth quarter we expect even more
meaningful EBITDAX per share results. Our focus remains on driving
the NAV per share of the company through capital allocation
optionality."
As previously announced, CNX closed on the sale of its Ohio
Utica JV assets to Ascent Resources-Utica, LLC for approximately
$400 million. CNX received
approximately $381 million in total
cash proceeds, of which the company received an initial deposit of
approximately $40 million during the
second quarter of 2018. The company retained all related production
and EBITDAX until the closing date on August
31, 2018. The difference between the transaction value and
the total cash received is a result of the adjustment to the
April 1, 2018 effective date, as well
as modest closing adjustments. The company deployed the cash
proceeds through a combination of debt repayment and continued
share repurchases in the quarter.
Since the October 2017 inception
of the current repurchase program through the end of the third
quarter, CNX has repurchased approximately 25.8 million shares,
which includes 8.3 million shares repurchased within the third
quarter, resulting in 205,147,139 shares outstanding at the end of
the third quarter. As of October 16,
2018, CNX has repurchased a total of approximately 27.6
million shares for $425 million
life-to-date, resulting in 203,599,810 shares outstanding, which is
an approximately 12% reduction to total shares outstanding. The
company has approximately $25 million
remaining on its $450 million share
repurchase program, which is set to expire on December 31, 2018. On October 26, 2018, the company's Board of
Directors approved an additional $300
million share repurchase authorization, which is not subject
to an expiration date.
1The terms "adjusted net income (loss) attributable
to CNX shareholders," "adjusted EBITDAX attributable to CNX
shareholders," "adjusted EBITDAX attributable to CNX Shareholders
per outstanding share," "adjusted net income (loss)," "adjusted
EBITDAX from continuing operations," and "adjusted EBITDAX from
continuing operations per outstanding share," are non-GAAP
financial measures, which are defined and reconciled to the GAAP
net income below, under the caption "Non-GAAP Financial
Measures."
Third Quarter Operations Summary:
In the third quarter of 2018, CNX operated four horizontal rigs
and drilled 23 wells, which included 15 Marcellus Shale wells in
Greene County, Pennsylvania; three
dry Utica Shale wells in Westmoreland
County, Pennsylvania; three dry Utica Shale wells in
Monroe County, Ohio; and two
Marcellus Shale wells in
Tyler County, West Virginia. In
Pennsylvania, CNX continues to
gain drilling efficiencies in the dry Utica Shale due in part to a
specially outfitted rig on the Shaw pad in Westmoreland County, Pennsylvania, and CNX
will benefit from a similarly upgraded rig that the company expects
in Greene County,
Pennsylvania.
During the quarter, the company utilized three frac crews to
complete 27 wells, which included 10 Marcellus Shale wells in
Greene County, Pennsylvania; six
dry Utica Shale wells in Monroe County,
Ohio; five Marcellus Shale
wells in Washington County,
Pennsylvania; five Marcellus
Shale wells in Tyler County, West
Virginia; and one dry Utica Shale well in Westmoreland County, Pennsylvania. Also during
the quarter, in the Shirley-Pennsboro area, CNX set a new company record
by completing 2,600 feet per day, as well as completed a record 13
stages in a 24-hour period.
CNX turned-in-line 35 wells in the third quarter, which included
15 Marcellus Shale wells in Greene
County, Pennsylvania; six Marcellus
Shale wells in Washington County,
Pennsylvania; five Marcellus
Shale wells in Tyler County, West
Virginia; four dry Utica Shale wells in Monroe County, Ohio; and five wet Utica Shale
wells in Harrison County, Ohio,
that were part of the former Ohio JV, and of which CNX had a 50%
working interest. Following the closing of the JV divestiture on
August 31, 2018, production from
those five wells transferred to the buyer. The company expects
production to peak for the year in the fourth quarter of 2018,
driven by a number of the wells that the company turned-in-line in
the later half of the third quarter and the approximately 16 wells
expected to get turned-in-line in the fourth quarter of 2018.
Marcellus Shale volumes,
including liquids, in the 2018 third quarter were 70.6 Bcfe,
approximately 17% higher than the 60.4 Bcfe produced in the 2017
third quarter. Marcellus Shale total
production costs were $2.05 per Mcfe
in the just-ended quarter, which is a $0.15 per Mcfe decrease from the third quarter of
2017 of $2.20 per Mcfe, driven by
decreases to LOE and DD&A. During the quarter, water disposal
costs improved as the company reused more produced water for fracs,
avoiding the need to send that water to disposal. DD&A improved
due in part to increased capital efficiencies related to the
Shirley-Pennsboro wells, and the production mix
benefiting from lower West
Virginia rates.
Utica Shale volumes, including liquids, in the 2018 third
quarter were 33.6 Bcfe, approximately 67% higher than the 20.1 Bcfe
in the year-earlier quarter, driven primarily from activity in
Monroe County, Ohio, and
Pennsylvania deep dry Utica Shale.
The ramp in Pennsylvania deep dry
Utica and Monroe County, Ohio, volumes also benefited
Utica Shale total production costs, which were $1.39 per Mcfe in the just-ended quarter, or a
$0.52 per Mcfe improvement from the
third quarter of 2017 total production costs of $1.91 per Mcfe. After subtracting $0.83 per Mcfe in DD&A, total production cash
costs for the Utica Shale were only $0.56 per Mcfe in the third quarter of 2018.
CNX's natural gas production in the quarter came from the
following categories:
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
|
|
September 30,
2018
|
|
September 30,
2017
|
|
% Increase/
(Decrease)
|
|
June 30,
2018
|
|
% Increase/
(Decrease)
|
GAS
|
|
|
|
|
|
|
|
|
|
Marcellus Sales
Volumes (Bcf)
|
61.9
|
|
|
52.0
|
|
|
19.0
|
%
|
|
58.0
|
|
|
6.7
|
%
|
Utica Sales Volumes
(Bcf)
|
31.9
|
|
|
17.5
|
|
|
82.3
|
%
|
|
40.4
|
|
|
(21.0)
|
%
|
CBM Sales Volumes
(Bcf)
|
14.7
|
|
|
16.2
|
|
|
(9.3)
|
%
|
|
14.8
|
|
|
(0.7)
|
%
|
Other Sales Volumes
(Bcf)1
|
—
|
|
|
4.2
|
|
|
(100.0)
|
%
|
|
0.4
|
|
|
(100.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS2
|
|
|
|
|
|
|
|
|
|
NGLs Sales Volumes
(Bcfe)
|
10.0
|
|
|
10.3
|
|
|
(2.9)
|
%
|
|
8.4
|
|
|
19.0
|
%
|
Oil Sales Volumes
(Bcfe)
|
0.1
|
|
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
Condensate Sales
Volumes (Bcfe)
|
0.4
|
|
|
0.7
|
|
|
(42.9)
|
%
|
|
0.5
|
|
|
(20.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
TOTAL
(Bcfe)
|
119.0
|
|
|
101.0
|
|
|
17.8
|
%
|
|
122.6
|
|
|
(2.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
Average Daily
Production (MMcfe)
|
1,293.0
|
|
|
1,098.1
|
|
|
|
|
1,346.8
|
|
|
|
1Other
Sales Volumes: primarily related to shallow oil and gas production
that was sold at the end of the first quarter of 2018.
|
2NGLs, Oil
and Condensate are converted to Mcfe at the rate of one barrel
equals six Mcf based upon the approximate relative energy content
of oil and natural gas, which is not indicative of the relationship
of oil, NGLs, condensate, and natural gas prices.
|
PRICE AND COST
DATA PER MCFE — Quarter-to-Quarter Comparison:
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Ended
|
|
Ended
|
|
Ended
|
(Per Mcfe)
|
September 30,
2018
|
|
September 30,
2017
|
|
June 30,
2018
|
Average Sales Price -
Gas
|
$
|
2.71
|
|
|
$
|
2.18
|
|
|
$
|
2.55
|
|
Average Gain on
Commodity Derivative
Instruments - Cash Settlement- Gas
|
$
|
0.03
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
Average Sales Price -
Oil*
|
$
|
10.50
|
|
|
$
|
6.99
|
|
|
$
|
9.72
|
|
Average Sales Price -
NGLs*
|
$
|
4.68
|
|
|
$
|
3.22
|
|
|
$
|
4.73
|
|
Average Sales Price -
Condensate*
|
$
|
9.76
|
|
|
$
|
6.89
|
|
|
$
|
9.47
|
|
|
|
|
|
|
|
Average Sales Price -
Total Company
|
$
|
2.92
|
|
|
$
|
2.50
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
$
|
0.14
|
|
|
$
|
0.22
|
|
|
$
|
0.21
|
|
Production, Ad
Valorem, and Other Fees
|
0.06
|
|
|
0.06
|
|
|
0.06
|
|
Transportation,
Gathering and Compression
|
0.84
|
|
|
0.98
|
|
|
0.82
|
|
Depreciation,
Depletion and Amortization (DD&A)
|
0.93
|
|
|
1.00
|
|
|
0.91
|
|
Total Production
Costs
|
$
|
1.97
|
|
|
$
|
2.26
|
|
|
$
|
2.00
|
|
|
|
|
|
|
|
Total Production Cash
Costs, before DD&A
|
$
|
1.04
|
|
|
$
|
1.26
|
|
|
$
|
1.09
|
|
Cash Margin, before
DD&A
|
$
|
1.88
|
|
|
$
|
1.24
|
|
|
$
|
1.78
|
|
*NGLs,
Oil, and Condensate are converted to Mcfe at the rate of one barrel
equals six Mcf based upon the approximate relative energy content
of oil and natural gas, which is not indicative of the relationship
of oil, NGLs, condensate, and natural gas prices.
|
Note: "Total
Production Costs" excludes Selling, General, and Administration and
Other Operating Expenses.
|
The average sales price of $2.92
per Mcfe, when combined with total production cash costs, before
DD&A of $1.04 per Mcfe, resulted
in a cash margin of $1.88 per Mcfe.
When compared to the year-earlier quarter, cash margins increased
due to improvements in average sales price and total production
costs.
During the third quarter of 2018, total production cash costs
improved to $1.04 per Mcfe, compared
to $1.09 per Mcfe in the second
quarter of 2018. Over the same period, CNX realized an improvement
to lease operating expense, which was primarily driven by decreased
water disposal as the company re-used more produced water for
frac's.
Marketing Update:
For the third quarter of 2018, CNX's average sales price for
natural gas, natural gas liquids (NGLs), oil, and condensate was
$2.92 per Mcfe. CNX's average price
for natural gas was $2.71 per Mcf for
the quarter and, including cash settlements from hedging, was
$2.74 per Mcf. The average realized
price for all liquids for the third quarter of 2018 was
$29.35 per barrel.
CNX's weighted average differential from NYMEX in the third
quarter of 2018 was negative $0.36
per MMBtu. With an improved Henry Hub price coupled with an
improved differential, CNX's average sales price for natural gas
before hedging increased 6% to $2.71
per Mcf compared with the average sales price of $2.55 per Mcf in the second quarter of 2018.
Including the impact of cash settlements from hedging, CNX's
average sales price for natural gas was $0.04 per Mcf, or 1%, higher than the second
quarter of 2018 and $0.36 per Mcf, or
15%, higher than last year's third quarter.
Guidance Update:
The midpoint of the 2018 production guidance remains unchanged,
but the company narrows the range to 497.5-507.5 Bcfe, compared to
the previous guidance of 490-515 Bcfe. CNX reaffirms net capital
expenditure guidance of $900-$950 million.
Due primarily to CNXM making a strategic land acquisition, system
upsizing to accommodate higher throughput levels resulting from
CNX's continued well improvements, and the additional acceleration
of completing planned projects and construction activity from 2019
into 2018, CNXM's capital guidance for 2018 increased consolidated
capital expenditures to $1,035-$1,095
million, compared to the previous guidance of $1,000-$1,060
million.
Due to consistent execution driving production, capital
efficiencies driving costs lower, and a locked in hedge book, CNX
expects 2018 consolidated adjusted EBITDAX to increase to
$990-$1,010
million, compared to the previous guidance of $945-$970 million.
Assuming the same outstanding share count as of October 16, 2018, the company expects 2018
consolidated adjusted EBITDAX per outstanding share to be
$4.91, based on the midpoint of the
guidance range.
Note: In regard to guidance, CNX is unable to provide a
reconciliation of projected 2018 consolidated adjusted EBITDAX to
projected net income, the most comparable financial measure
calculated in accordance with GAAP, due to the unknown effect,
timing, and potential significance of certain income statement
items.
Total hedged natural gas production in the 2018 fourth quarter
is 92.2 Bcf. The annual gas hedge position is shown in the table
below:
|
|
2018
|
|
2019
|
Volumes Hedged (Bcf),
as of 10/10/18
|
|
371.3*
|
|
367.3
|
|
|
|
|
|
|
|
*Includes
actual settlements of 295.9 Bcf.
|
|
|
|
CNX's hedged gas volumes include a combination of NYMEX
financial hedges and physical fixed price sales. In addition, to
protect the NYMEX hedge volumes from basis exposure, CNX enters
into basis-only financial hedges and physical sales with fixed
basis at certain sales points. CNX's gas hedge position through
2022 as of October 10, 2018 is shown
in the table below:
|
Q4
2018
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
NYMEX Only
Hedges
|
|
|
|
|
|
|
Volumes
(Bcf)
|
87.9
|
|
354.2
|
|
354.5
|
|
292.6
|
|
191.1
|
|
178.9
|
Average Prices
($/Mcf)
|
$
|
3.22
|
|
$
|
3.18
|
|
$
|
3.04
|
|
$
|
3.04
|
|
$
|
3.01
|
|
$
|
3.03
|
Physical Fixed
Price Sales
|
|
|
|
|
|
|
Volumes
(Bcf)
|
4.3
|
|
17.1
|
|
12.8
|
|
11.0
|
|
21.2
|
|
13.7
|
Average Prices
($/Mcf)
|
$
|
2.68
|
|
$
|
2.64
|
|
$
|
2.51
|
|
$
|
2.45
|
|
$
|
2.49
|
|
$
|
2.56
|
Total Volumes
Hedged (Bcf)1
|
92.2
|
|
371.3
|
|
367.3
|
|
303.6
|
|
212.3
|
|
192.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX + Basis
(fully-covered volumes)2
|
|
|
|
|
|
|
Volumes
(Bcf)
|
92.2
|
|
371.3
|
|
362.6
|
|
303.1
|
|
203.5
|
|
159.2
|
Average Prices
($/Mcf)
|
$
|
2.83
|
|
$
|
2.79
|
|
$
|
2.68
|
|
$
|
2.62
|
|
$
|
2.53
|
|
$
|
2.45
|
NYMEX Only Hedges
Exposed to Basis
|
|
|
|
|
|
|
Volumes
(Bcf)
|
—
|
|
—
|
|
4.7
|
|
0.5
|
|
8.8
|
|
33.4
|
Average Prices
($/Mcf)
|
$
|
—
|
|
$
|
—
|
|
$
|
3.04
|
|
$
|
3.04
|
|
$
|
3.01
|
|
$
|
3.03
|
Total Volumes
Hedged (Bcf)1
|
92.2
|
|
371.3
|
|
367.3
|
|
303.6
|
|
212.3
|
|
192.6
|
1Q4 2018
and 2018 exclude 3.1 Bcf and 14.1 Bcf, respectively, of physical
basis sales not matched with NYMEX hedges.
|
2Includes
physical sales with fixed basis in Q4 2018, 2018, 2019, 2020, 2021,
and 2022 of 23.7 Bcf, 91.9 Bcf, 115.2 Bcf, 70.4 Bcf, 71.0 Bcf, and
30.8 Bcf respectively.
|
During the third quarter of 2018, CNX added additional NYMEX
natural gas hedges of 28.8 Bcf, 31.3 Bcf, 9.3 Bcf, 6.8 Bcf, and
47.6 Bcf for 2019, 2020, 2021, 2022, and 2023, respectively. To
help mitigate basis exposure on NYMEX hedges, in the third quarter
CNX added .1 Bcf, 31.6 Bcf, 43.8 Bcf, 3.4 Bcf, and 20.8 Bcf of
basis hedges for 2018, 2019, 2020, 2022, and 2023,
respectively.
Finance:
At September 30, 2018, CNX's net
debt attributable to CNX Shareholders to trailing-twelve-months
(TTM) adjusted EBITDAX attributable to CNX Shareholders was 2.26x.
On a consolidated basis, CNX's net debt to TTM adjusted EBITDAX
from continuing operations was 2.36x. Driven in part by the
production ramp that the company expects will peak in the fourth
quarter of 2018, CNX expects its leverage ratio to decrease
further, outside of additional share count reductions.
At September 30, 2018, the company's credit facility had
$439 million of borrowings
outstanding and $251 million of
letters of credit outstanding, leaving $1,410 million of unused capacity. In addition,
CNX holds 21.7 million CNXM limited partnership units with a
current market value of approximately $414
million as of October 16,
2018.
During the third quarter, CNX purchased the remaining
$200 million of its outstanding 8.0%
senior notes due in April 2023. As
part of this transaction, a loss of $15
million was included in Loss on Debt Extinguishment on the
Consolidated Statements of Income. The company expects the
transaction to result in approximately $7
million in annual interest savings. In total, the company
expects to realize approximately $18
million in annual interest savings after repurchasing
$500 million of its outstanding 8.0%
senior notes, further driving the company's NAV per share.
About CNX
CNX Resources Corporation (NYSE: CNX) is one
of the largest independent natural gas exploration, development and
production companies, with operations centered in the major shale
formations of the Appalachian basin. The company deploys an organic
growth strategy focused on responsibly developing its resource
base. As of December 31, 2017, CNX
had 7.6 trillion cubic feet equivalent of proved natural gas
reserves. The company is a member of the Standard & Poor's
Midcap 400 Index. Additional information may be found at
www.cnx.com.
Non-GAAP Financial Measures
Definitions: EBIT
is defined as earnings before deducting net interest expense
(interest expense less interest income) and income taxes.
EBITDAX is defined as earnings before deducting net interest
expense (interest expense less interest income), income taxes,
depreciation, depletion and amortization, and exploration. Adjusted
EBITDAX is defined as EBITDAX after adjusting for the discrete
items listed below. Although EBIT, EBITDAX, and adjusted EBITDAX
are not measures of performance calculated in accordance with
generally accepted accounting principles, management believes that
they are useful to an investor in evaluating CNX Resources because
they are widely used to evaluate a company's operating performance.
We exclude stock-based compensation from adjusted EBITDAX because
we do not believe it accurately reflects the actual operating
expense incurred during the relevant period and may vary widely
from period to period irrespective of operating results. Investors
should not view these metrics as a substitute for measures of
performance that are calculated in accordance with generally
accepted accounting principles. In addition, because all
companies do not calculate EBIT, EBITDAX, or adjusted EBITDAX
identically, the presentation here may not be comparable to
similarly titled measures of other companies. Adjusted EBITDAX from
continuing operations per outstanding share and adjusted EBITDAX
attributable to CNX Shareholders per outstanding share, with shares
measured as of October 16, 2018, are
not measures of performance calculated in accordance with generally
accepted accounting principles. Management believes that these
financial measures are useful to an investor in evaluating CNX
Resources because (i) analysts utilize these metrics when
evaluating company performance and, (ii) given that we have an
active share repurchase program, analysts have requested this
information as of a recent practicable date, and we want to provide
updated information to investors.
Reconciliation of EBIT, EBITDAX, adjusted EBITDAX, adjusted net
income (loss), and adjusted net income (loss) attributable to
CNX shareholders to financial net income attributable to CNX
Resources shareholders is as follows (dollars in 000):
|
Three Months
Ended
|
|
September
30,
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
Dollars in
thousands
|
E&P
|
|
Midstream
|
|
Unallocated1
|
|
Total
Company
|
|
Total
Company
|
Net Income
(Loss)
|
$
|
54,431
|
|
|
$
|
31,173
|
|
|
$
|
61,152
|
|
|
$
|
146,756
|
|
|
$
|
(26,441)
|
|
|
|
|
|
|
|
|
|
|
|
Less: Income from
Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,645
|
|
Add: Interest
Expense
|
28,467
|
|
|
7,256
|
|
|
—
|
|
|
35,723
|
|
|
38,836
|
|
Less: Interest
Income
|
(42)
|
|
|
—
|
|
|
—
|
|
|
(42)
|
|
|
(858)
|
|
Add: Income
Taxes
|
—
|
|
|
—
|
|
|
56,678
|
|
|
56,678
|
|
|
10,530
|
|
Earnings Before
Interest & Taxes (EBIT)
|
82,856
|
|
|
38,429
|
|
|
117,830
|
|
|
239,115
|
|
|
26,712
|
|
|
|
|
|
|
|
|
|
|
|
Add:
Depreciation, Depletion & Amortization
|
111,844
|
|
|
7,741
|
|
|
—
|
|
|
119,585
|
|
|
102,012
|
|
|
|
|
|
|
|
|
|
|
|
Add: Exploration
Expense
|
$
|
3,321
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,321
|
|
|
$
|
4,479
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before
Interest, Taxes, DD&A and Exploration (EBITDAX) from Continuing
Operations
|
$
|
198,021
|
|
|
$
|
46,170
|
|
|
$
|
117,830
|
|
|
$
|
362,021
|
|
|
$
|
133,203
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
(15,181)
|
|
|
—
|
|
|
—
|
|
|
(15,181)
|
|
|
(1,512)
|
|
Gain on Certain Asset
Sales
|
—
|
|
|
—
|
|
|
(130,849)
|
|
|
(130,849)
|
|
|
(30,315)
|
|
Severance
Expense
|
513
|
|
|
—
|
|
|
—
|
|
|
513
|
|
|
914
|
|
Loss on Debt
Extinguishment
|
—
|
|
|
—
|
|
|
15,385
|
|
|
15,385
|
|
|
2,019
|
|
Stock-Based
Compensation
|
4,739
|
|
|
506
|
|
|
|
|
5,245
|
|
|
5,159
|
|
Litigation
Settlements
|
2,000
|
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
Total Pre-tax
Adjustments
|
(7,929)
|
|
|
506
|
|
|
(115,464)
|
|
|
(122,887)
|
|
|
(23,735)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX from
Continuing Operations
|
$
|
190,092
|
|
|
$
|
46,676
|
|
|
$
|
2,366
|
|
|
$
|
239,134
|
|
|
$
|
109,468
|
|
|
|
|
|
|
|
|
|
|
|
Less: Adjusted EBITDA
Attributable to Noncontrolling Interest2
|
—
|
|
|
29,083
|
|
|
—
|
|
|
29,083
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
Attributable to CNX Resources Shareholders
|
$
|
190,092
|
|
|
$
|
17,593
|
|
|
$
|
2,366
|
|
|
$
|
210,051
|
|
|
$
|
109,468
|
|
Note: Income
tax effect of Total Pre-tax Adjustments was $33,328 and $8,782 for
the three months ended September 30, 2018 and September 30, 2017,
respectively.
|
EBITDAX Attributable to CNX
shareholders of $210,051 is calculated as EBITDAX from continuing
operations of $239,134 less Adjusted EBITDA Attributable to
Noncontrolling interest of $29,083.
|
Adjusted net income
for the three months ended September 30, 2018 is calculated as GAAP
net income of $146,756 less total pre-tax adjustments from the
above table of $122,887, plus the associated tax expense of $33,328
equals adjusted net income of $57,197. Adjusted net loss for the
three months ended September 30, 2017 is calculated as GAAP net
loss of $26,441 less total pre-tax adjustments from the above table
of $23,735, plus the associated tax expense of $8,782 equals
adjusted net loss of $41,394.
|
Adjusted net income
attributable to CNX shareholders for the three months ended
September 30, 2018 is calculated as GAAP net income attributable to
CNX shareholders of $125,029 less total pre-tax adjustments from
the above table of $122,887, plus the associated tax expense of
$33,328 equals adjusted net income of $35,470. Adjusted net income
attributable to CNX shareholders for the three months ended
September 30, 2017 is calculated as GAAP net loss attributable to
CNX shareholders of $26,441 less total pre-tax adjustments from the
above table of $23,735, plus the associated tax expense of $8,782
equals adjusted net loss of $41,394.
|
1CNX's
unallocated expenses include other expense, gain on sale of assets,
loss on debt extinguishment, impairment of other intangible asset
and income taxes.
|
2Adjusted
EBITDA Attributable to Noncontrolling Interest for the three months
ended September 30, 2018 is Net Income Attributable to
Noncontrolling interest of $21,727 plus Depreciation, Depletion and
Amortization of $3,171, plus Interest Expense of $3,877, plus
Stock-based compensation of $308. Calculated by taking an average
noncontrolling interest percentage of 63.91%.
|
Management uses net debt to determine the company's outstanding
debt obligations that would not be readily satisfied by its cash
and cash equivalents on hand. Management believes that using net
debt attributable to CNX Resources shareholders is useful to
investors in determining the company's leverage ratio since the
company could choose to use its cash and cash equivalents to retire
debt.
Net Debt
Attributable to CNX Shareholders
|
September 30,
2018
|
|
E&P
|
Midstream
|
Total
|
Total Debt
(GAAP)1
|
$
|
1,769,543
|
|
$
|
436,978
|
|
$
|
2,206,521
|
|
Less Cash and Cash
Equivalents
|
32,766
|
|
9,906
|
|
42,672
|
|
Net Debt
(Non-GAAP)
|
1,736,777
|
|
427,072
|
|
2,163,849
|
|
Net Debt Attributable
to Noncontrolling Interest2
|
—
|
|
272,942
|
|
272,942
|
|
Net Debt
Attributable to CNX Shareholders
|
$
|
1,736,777
|
|
$
|
154,130
|
|
$
|
1,890,907
|
|
1Includes
current portion.
|
2Calculated by taking an average
noncontrolling interest percentage of 63.91%
|
Trailing-Twelve-Months (TTM)
EBITDAX
|
Three
Months
Ended
|
|
Twelve
Months
Ended
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
($ in
thousands)
|
2017
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
Net Income
|
$
|
276,643
|
|
|
$
|
545,546
|
|
|
$
|
61,394
|
|
|
$
|
146,756
|
|
|
$
|
1,030,339
|
|
Less: Loss from Discontinued
Operations
|
5,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,500
|
|
Add:
Interest Expense
|
40,319
|
|
|
38,551
|
|
|
38,438
|
|
|
35,723
|
|
|
153,031
|
|
Less:
Interest Income
|
(1,198)
|
|
|
(76)
|
|
|
—
|
|
|
(42)
|
|
|
(1,316)
|
|
Add:
Income Taxes
|
75,427
|
|
|
213,694
|
|
|
(31,102)
|
|
|
56,678
|
|
|
314,697
|
|
Add:
Tax Valuation Allowance
|
(269,060)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(269,060)
|
|
Earnings Before
Interest & Taxes (EBIT) from Continuing
Operations
|
127,631
|
|
|
797,715
|
|
|
68,730
|
|
|
239,115
|
|
|
1,233,191
|
|
Add: Depreciation,
Depletion & Amortization
|
122,707
|
|
|
124,667
|
|
|
119,087
|
|
|
119,585
|
|
|
486,046
|
|
Add: Exploration
Expense
|
14,093
|
|
|
2,380
|
|
|
3,699
|
|
|
3,321
|
|
|
23,493
|
|
Earnings Before
Interest, Taxes, DD&A, and Exploration (EBITDAX) from
Continuing Operations
|
$
|
264,431
|
|
|
$
|
924,762
|
|
|
$
|
191,516
|
|
|
$
|
362,021
|
|
|
$
|
1,742,730
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
(105,879)
|
|
|
(52,078)
|
|
|
(8,975)
|
|
|
(15,181)
|
|
|
(182,113)
|
|
Settlement
Expense
|
19,787
|
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
21,787
|
|
Gain on Asset
Sales
|
—
|
|
|
(9,487)
|
|
|
—
|
|
|
(130,849)
|
|
|
(140,336)
|
|
Gain on Previously
Held Equity Interest
|
—
|
|
|
(623,663)
|
|
|
—
|
|
|
—
|
|
|
(623,663)
|
|
Severance
Expense
|
177
|
|
|
814
|
|
|
257
|
|
|
513
|
|
|
1,761
|
|
Fair Value Put
Option
|
3,500
|
|
|
(3,500)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other Transaction
Fees
|
—
|
|
|
1,149
|
|
|
—
|
|
|
—
|
|
|
1,149
|
|
Stock Based
Compensation
|
3,907
|
|
|
4,909
|
|
|
5,709
|
|
|
5,245
|
|
|
19,770
|
|
Loss on Debt
Extinguishment
|
896
|
|
|
15,635
|
|
|
23,413
|
|
|
15,385
|
|
|
55,329
|
|
Impairment of Other
Intangible Assets
|
—
|
|
|
—
|
|
|
18,650
|
|
|
—
|
|
|
18,650
|
|
Total Pre-tax
Adjustments
|
$
|
(77,612)
|
|
|
$
|
(666,221)
|
|
|
$
|
39,054
|
|
|
$
|
(122,887)
|
|
|
$
|
(827,666)
|
|
Adjusted EBITDAX
from Continuing Operations
|
$
|
186,819
|
|
|
$
|
258,541
|
|
|
$
|
230,570
|
|
|
$
|
239,134
|
|
|
$
|
915,064
|
|
Less: Adjusted EBITDA
Attributable to Noncontrolling Interest
|
—
|
|
|
$22,763
|
|
|
$26,711
|
|
|
$29,083
|
|
|
$78,557
|
|
Adjusted EBITDAX
Attributable to CNX Shareholders
|
$
|
186,819
|
|
|
$
|
235,778
|
|
|
$
|
203,859
|
|
|
$
|
210,051
|
|
|
$
|
836,507
|
|
Cautionary Statements
We are including the following cautionary statement in this
press release to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 for any forward-looking statements made by, or on behalf of
us. With the exception of historical matters, the matters
discussed in this press release are forward-looking statements (as
defined in 21E of the Securities Exchange Act of 1934 (the
"Exchange Act")) that involve risks and uncertainties that could
cause actual results to differ materially from projected results.
Accordingly, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. These
forward-looking statements may include projections and estimates
concerning the timing and success of specific projects and our
future production, revenues, income and capital spending. When we
use the words "believe," "intend," "expect," "may," "should,"
"anticipate," "could," "estimate," "plan," "predict," "project,"
"will," or their negatives, or other similar expressions, the
statements which include those words are usually forward-looking
statements. When we describe a strategy that involves risks or
uncertainties, we are making forward-looking statements. The
forward-looking statements in this press release speak only as of
the date of this press release; we disclaim any obligation to
update these statements. We have based these forward-looking
statements on our current expectations and assumptions about future
events. While our management considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, most of which are difficult
to predict and many of which are beyond our control. These risks,
contingencies and uncertainties relate to, among other matters, the
following: 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; an extended decline in the prices we receive for our natural
gas and natural gas liquids affecting our operating results and
cash flows; our dependence on gathering, processing and
transportation facilities and other midstream facilities owned by
CNXM and others; disruption of, capacity constraints in, or
proximity to pipeline systems that could limit sales of our natural
gas and natural gas liquids, and decreases in availability of
third-party pipelines or other midstream facilities interconnected
to CNXM's gathering systems; 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; acquisitions and divestitures
we anticipate 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; decrease in our borrowing base, which could decrease for
a variety of reasons including lower natural gas prices, declines
in natural gas proved 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, particularly in the area of intangible drilling costs;
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, including with respect to indemnification
obligations; 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 has been allocated
responsibility; and the separation could result in substantial tax
liability; and, with respect to the sale of the Ohio Joint Venture
Utica assets, disruption to our business, including customer,
employee and supplier relationships resulting from this
transaction, and the impact of the transaction on our future
operating and financial results. Additional factors are described
in detail under the captions "Forward Looking Statements" and "Risk
Factors" in our annual report on Form 10-K for the year ended
December 31, 2017 filed with the
Securities and Exchange Commission, as supplemented by our
quarterly reports on Form 10-Q.
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
(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
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME (CONTINUED)
|
|
|
|
|
(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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
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
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
(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
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
(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
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
CNX RESOURCES AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
(Dollars in
thousands)
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Unaudited)
|
September
30,
|
|
September
30,
|
Cash Flows from
Operating Activities:
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net Income
(Loss)
|
$
|
146,756
|
|
|
$
|
(26,441)
|
|
|
$
|
753,696
|
|
|
$
|
104,104
|
|
Adjustments to
Reconcile Net Income (Loss) to Net Cash Provided By Operating
Activities:
|
|
|
|
|
|
|
|
Net Loss (Income)
from Discontinued Operations
|
—
|
|
|
4,645
|
|
|
—
|
|
|
(95,099)
|
|
Depreciation,
Depletion and Amortization
|
119,584
|
|
|
102,011
|
|
|
363,338
|
|
|
289,329
|
|
Amortization of
Deferred Financing Costs
|
1,818
|
|
|
2,136
|
|
|
6,640
|
|
|
6,636
|
|
Impairment of
Exploration and Production Properties
|
—
|
|
|
—
|
|
|
—
|
|
|
137,865
|
|
Impairment of Other
Intangible Assets
|
—
|
|
|
—
|
|
|
18,650
|
|
|
—
|
|
Stock-Based
Compensation
|
5,243
|
|
|
5,154
|
|
|
15,861
|
|
|
13,071
|
|
Gain on Sale of
Assets
|
(134,320)
|
|
|
(45,742)
|
|
|
(148,942)
|
|
|
(184,319)
|
|
Gain on Previously
Held Equity Interest
|
—
|
|
|
—
|
|
|
(623,663)
|
|
|
—
|
|
Loss on Debt
Extinguishment
|
15,385
|
|
|
2,019
|
|
|
54,433
|
|
|
1,233
|
|
Gain on Commodity
Derivative Instruments
|
(18,005)
|
|
|
(19,183)
|
|
|
(78,752)
|
|
|
(80,508)
|
|
Net Cash Received
(Paid) in Settlement of Commodity Derivative Instruments
|
2,825
|
|
|
17,671
|
|
|
2,518
|
|
|
(61,717)
|
|
Deferred Income
Taxes
|
68,922
|
|
|
10,530
|
|
|
259,116
|
|
|
21,066
|
|
Equity in Earnings of
Affiliates
|
(1,241)
|
|
|
(12,425)
|
|
|
(4,688)
|
|
|
(34,810)
|
|
Changes in Operating
Assets:
|
|
|
|
|
|
|
|
Accounts and Notes
Receivable
|
5,969
|
|
|
6,081
|
|
|
50,125
|
|
|
12,742
|
|
Recoverable Income
Taxes
|
(12,244)
|
|
|
9,416
|
|
|
(8,501)
|
|
|
15,908
|
|
Supplies
Inventories
|
773
|
|
|
(6,492)
|
|
|
1,016
|
|
|
(6,164)
|
|
Prepaid
Expenses
|
(1,664)
|
|
|
(353)
|
|
|
(337)
|
|
|
6,127
|
|
Changes in Other
Assets
|
35
|
|
|
32,790
|
|
|
683
|
|
|
32,790
|
|
Changes in Operating
Liabilities:
|
|
|
|
|
|
|
|
Accounts
Payable
|
5,730
|
|
|
(5,454)
|
|
|
2,532
|
|
|
15,359
|
|
Accrued
Interest
|
9,170
|
|
|
31,706
|
|
|
5,812
|
|
|
32,501
|
|
Other Operating
Liabilities
|
28,914
|
|
|
(8,046)
|
|
|
30,418
|
|
|
32,724
|
|
Changes in Other
Liabilities
|
(4,361)
|
|
|
3,399
|
|
|
(9,736)
|
|
|
16,915
|
|
Net Cash Provided by
Continuing Operating Activities
|
239,289
|
|
|
103,422
|
|
|
690,219
|
|
|
275,753
|
|
Net Cash Provided by
Discontinued Operating Activities
|
—
|
|
|
77,957
|
|
|
—
|
|
|
206,097
|
|
Net Cash Provided by
Operating Activities
|
239,289
|
|
|
181,379
|
|
|
690,219
|
|
|
481,850
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Capital
Expenditures
|
(297,465)
|
|
|
(149,500)
|
|
|
(794,124)
|
|
|
(399,462)
|
|
CNX Gathering LLC
Acquisition, Net of Cash Acquired
|
—
|
|
|
—
|
|
|
(299,272)
|
|
|
—
|
|
Proceeds from Asset
Sales
|
347,391
|
|
|
80,790
|
|
|
500,811
|
|
|
408,957
|
|
Net Distributions
from Equity Affiliates
|
4,100
|
|
|
10,920
|
|
|
7,750
|
|
|
35,620
|
|
Net Cash Provided by
(Used in) Continuing Investing Activities
|
54,026
|
|
|
(57,790)
|
|
|
(584,835)
|
|
|
45,115
|
|
Net Cash Used in
Discontinued Investing Activities
|
—
|
|
|
(26,858)
|
|
|
—
|
|
|
(33,237)
|
|
Net Cash Provided by
(Used in) Investing Activities
|
54,026
|
|
|
(84,648)
|
|
|
(584,835)
|
|
|
11,878
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Payments on
Miscellaneous Borrowings
|
(1,708)
|
|
|
(51)
|
|
|
(5,455)
|
|
|
(6,024)
|
|
Payments on Long-Term
Notes
|
(212,000)
|
|
|
(96,543)
|
|
|
(935,419)
|
|
|
(213,728)
|
|
Proceeds from CNX
Revolving Credit Facility
|
17,000
|
|
|
—
|
|
|
439,000
|
|
|
—
|
|
Net Proceeds from
(Payments on) CNXM Revolving Credit Facility
|
33,000
|
|
|
—
|
|
|
(105,500)
|
|
|
—
|
|
Distributions to CNXM
Noncontrolling Interest Holders
|
(14,099)
|
|
|
—
|
|
|
(40,839)
|
|
|
—
|
|
Proceeds from
Issuance of CNXM Senior Notes
|
—
|
|
|
—
|
|
|
394,000
|
|
|
—
|
|
Proceeds from
Issuance of Common Stock
|
127
|
|
|
136
|
|
|
1,689
|
|
|
859
|
|
Shares Withheld for
Taxes
|
(138)
|
|
|
747
|
|
|
(5,335)
|
|
|
(6,346)
|
|
Purchases of Common
Stock
|
(127,645)
|
|
|
—
|
|
|
(294,365)
|
|
|
—
|
|
Debt Repurchase and
Financing Fees
|
(26)
|
|
|
—
|
|
|
(19,655)
|
|
|
(298)
|
|
Net Cash Used in
Continuing Financing Activities
|
(305,489)
|
|
|
(95,711)
|
|
|
(571,879)
|
|
|
(225,537)
|
|
Net Cash Used in
Discontinued Financing Activities
|
—
|
|
|
(11,397)
|
|
|
—
|
|
|
(33,332)
|
|
Net Cash Used in
Financing Activities
|
(305,489)
|
|
|
(107,108)
|
|
|
(571,879)
|
|
|
(258,869)
|
|
Net (Decrease)
Increase in Cash and Cash Equivalents
|
(12,174)
|
|
|
(10,377)
|
|
|
(466,495)
|
|
|
234,859
|
|
Cash and Cash
Equivalents at Beginning of Period
|
54,846
|
|
|
291,535
|
|
|
509,167
|
|
|
46,299
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
42,672
|
|
|
$
|
281,158
|
|
|
$
|
42,672
|
|
|
$
|
281,158
|
|
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SOURCE CNX Resources Corporation