PITTSBURGH, Oct. 29, 2019 /PRNewswire/ -- CNX Resources
Corporation (NYSE: CNX) ("CNX" or "the company") reports the
following financial results, which are in accordance with generally
accepted accounting principles (GAAP) in the U.S.:
During the third quarter of 2019:
- The company reported net income attributable to CNX
shareholders of $116 million, or
earnings of $0.61 per diluted share,
compared to net income attributable to CNX shareholders of
$125 million, or earnings of
$0.59 per diluted share, in the third
quarter of 2018. During the third quarter of 2019 and 2018 there
were unrealized gains on commodity derivative instruments of
$157 million and $15 million, respectively.
- The company reported total production costs of $1.99 per Mcfe, including $0.86 per Mcfe of Depreciation, Depletion, and
Amortization (DD&A), compared to $1.97 per Mcfe, including $0.93 per Mcfe of DD&A, in the year-earlier
quarter.
- On a consolidated basis, the company reported net income of
$144 million for the 2019 third
quarter, compared to net income of $147
million in the third quarter of 2018.
- Capital expenditures were $336
million, compared to $297
million spent in the year-earlier quarter.
- The company had total weighted-average diluted shares of common
stock outstanding of 188,430,959, compared to 212,708,082 shares in
the third quarter of 2018.
Third Quarter Highlights
CNX's management uses non-GAAP financial measures for planning,
forecasting and evaluating business and financial performance, and
believes that they are useful for investors in analyzing the
company. Stand-alone results include both CNX's Exploration &
Production (E&P) and Unallocated segments (but not the
Midstream segment) plus distributions CNX receives from CNX
Midstream Partners LP ("CNXM"). CNX believes that providing
stand-alone results provides investors with more transparency and a
better ability to compare CNX's financial results to those of our
peer group. The term "consolidated" includes 100% of the results of
CNX, CNX Gathering LLC, and CNXM on a consolidated basis. For the
third quarter of 2019, the company:
- Had sales volumes of 128 Bcfe, or an increase of 8% from the
119 Bcfe sold in the third quarter of 2018.
- Had fully burdened cash margin of $0.82 per Mcfe, or a decrease of 36% from the
$1.29 per Mcfe in the third quarter
of 2018.
- Turned-in-line 24 wells.
"CNX accomplished a number of significant items in the third
quarter: production costs and capital came in better than expected;
we reconfigured our workflows and now expect $25 million in selling, general, and
administrative (SG&A) cash cost savings in 2020 compared to the
previous guidance; we completed the Richhill waterline to feed the
Evolution all-electric frac fleet and drive further efficiencies
and cycle time improvements in our core Southwest Pennsylvania development area; and
we turned-in-line 24 wells late in the quarter to set the company
up for strong production in the fourth quarter," commented
Nicholas J. DeIuliis, president and
CEO. "These accomplishments create improvement for 2019, and
our updated guidance shows lower capital and higher production for
the year."
"We continue to follow the rate of return math when allocating
capital," continued Mr. DeIuliis. "Macro supply and demand
concerns certainly lowered the forward strip during the past
quarter, and we are adjusting activity accordingly by lowering
our capital and production guidance for 2020. In spite of the price
decline, we are increasing our 2020 free cash flow (FCF) guidance
to $146 million. Based on this
activity we expect to grow production and generate significant FCF
in 2021."
"These changes to our 2019 and 2020 guidance reflect our ability
to make decisions in a fast-moving world," Mr. DeIuliis continued.
"Commodity prices dropped, which meant our capital allocation
options adjusted, and our decision making changed with them. Debt
capital allocation became more attractive due to the disconnect in
the credit markets, and we want to take advantage of it by
generating FCF in 2020 and using it to pay down debt. Share
buybacks remain very attractive and we see ample time to continue
reducing our share count meaningfully. With the 2020 production
guidance change, we simply built inventory and an easier path for
2021 and beyond. We designed the company to navigate and do
well in the challenging world the industry faces today."
Don Rush, CFO, added, "Following
the end of the quarter, the company completed its scheduled
semi-annual borrowing base redetermination under its revolving
credit facility, resulting in the lending group increasing CNX's
borrowing base from $2.1 billion to
$2.3 billion."
The following table represents certain non-GAAP financial
measures used by the company:1
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
Quarter
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
|
(Dollars in
millions,
except per share data)
|
|
Stand-alone
|
|
%
Increase/(Decrease)
|
|
Consolidated
|
|
%
Increase/
(Decrease)
|
Adjusted Net (Loss)
Income
|
|
$
|
(11)
|
|
|
$
|
26
|
|
|
(142.3)
|
%
|
|
$
|
31
|
|
|
$
|
57
|
|
|
(45.6)
|
%
|
Total Shares
Outstanding (in millions)2
|
|
186.6
|
|
|
203.6
|
|
|
(8.3)
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Adjusted Net (Loss)
Income per Outstanding Share2
|
|
$
|
(0.06)
|
|
|
$
|
0.13
|
|
|
(146.2)
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Adjusted
EBITDAX
|
|
$
|
159
|
|
|
$
|
203
|
|
|
(21.7)
|
%
|
|
$
|
204
|
|
|
$
|
239
|
|
|
(14.6)
|
%
|
Adjusted EBITDAX per
Outstanding Share2
|
|
$
|
0.85
|
|
|
$
|
1.00
|
|
|
(15.0)
|
%
|
|
$
|
1.09
|
|
|
$
|
1.17
|
|
|
(6.8)
|
%
|
Capital
Expenditures3
|
|
$
|
272
|
|
|
$
|
255
|
|
|
6.7
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
1The
Non-GAAP financial measures in the table above are defined and
reconciled to GAAP net income, under the caption "Non-GAAP
Financial Measures" below.
|
2For the
quarter ended September 30, 2019, total shares outstanding of
186,586,751 (Non-GAAP) are as of October 15, 2019. For the quarter
ended September 30, 2018, total shares outstanding of 203,599,810
(Non-GAAP) are as of October 16, 2018.
|
3Capital
expenditures exclude $63.9 million and $42.3 million of total
capital investment net to CNXM in the third quarter of 2019 and
2018, respectively, as reported in CNXM Third Quarter
Results.
|
The following table highlights operating cash margins and fully
burdened cash margins:
|
|
Quarter
|
|
Quarter
|
|
|
Ended
|
|
Ended
|
(Per Mcfe)
|
|
September
30,
2019
|
|
September
30,
2018
|
Average Sales Price -
E&P
|
|
$
|
2.51
|
|
|
$
|
2.92
|
|
Total Production Cash
Costs1
|
|
1.13
|
|
|
1.04
|
|
Operating Cash
Margin
|
|
$
|
1.38
|
|
|
$
|
1.88
|
|
Operating Cash Margin
(%)
|
|
55
|
%
|
|
64
|
%
|
|
|
|
|
|
Total Fully Burdened
Cash Costs2
|
|
$
|
1.69
|
|
|
$
|
1.63
|
|
Fully Burdened Cash
Margin
|
|
$
|
0.82
|
|
|
$
|
1.29
|
|
Fully Burdened Cash
Margin (%)
|
|
33
|
%
|
|
44
|
%
|
|
1See the
"Price and Cost Data Per Mcfe" table below for reconciliation to
total Production Costs.
|
2Fully
burdened cash costs includes production cash costs, selling,
general and administrative (SG&A) cash costs, other operating
cash expense, other cash (income) expense, and interest
expense.
|
Operations:
During the quarter, we used up to three horizontal rigs and
drilled 15 wells. The company currently has two rigs in operation,
which it expects to run into 2020, along with one frac crew.
During the quarter, the company utilized three frac crews to
complete 20 wells, which included 14 Marcellus Shale wells and six
Utica Shale wells. CNX has been a first mover in the basin by
entering into a long-term contract with Evolution, an all-electric
frac crew. The Evolution crew started operations in the second
quarter of 2019 and is currently providing fuel savings of
approximately $250,000 per well,
which is a savings increase of approximately $70,000 per well over the prior expected savings
that were highlighted last quarter.
CNX turned-in-line 24 wells in the third quarter, of which 10
were turned-in-line at the end of the third quarter. The 24 wells
consisted of the following: 10 Marcellus Shale wells in
Greene County, Pennsylvania; five
Marcellus Shale wells in
Tyler County, West Virginia; four
Utica Shale wells in Marshall County,
West Virginia; three Utica Shale wells in Greene County, Pennsylvania; and two Utica
Shale wells in Monroe County,
Ohio.
CNX's natural gas and liquids production in the quarter came
from the following categories:
|
|
Quarter
|
|
Quarter
|
|
|
|
Quarter
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
%
Increase/
(Decrease)
|
|
June 30,
2019
|
|
%
Increase/
(Decrease)
|
GAS
|
|
|
|
|
|
|
|
|
|
|
Marcellus Sales
Volumes (Bcf)
|
|
79.2
|
|
|
61.9
|
|
|
27.9
|
%
|
|
84.3
|
|
|
(6.0)
|
%
|
Utica Sales Volumes
(Bcf)
|
|
26.8
|
|
|
31.9
|
|
|
(16.0)
|
%
|
|
28.1
|
|
|
(4.6)
|
%
|
CBM Sales Volumes
(Bcf)
|
|
14.1
|
|
|
14.7
|
|
|
(4.1)
|
%
|
|
13.9
|
|
|
1.4
|
%
|
Other Sales Volumes
(Bcf)
|
|
0.1
|
|
|
—
|
|
|
100.0
|
%
|
|
0.1
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDS1
|
|
|
|
|
|
|
|
|
|
|
NGLs Sales Volumes
(Bcfe)
|
|
8.0
|
|
|
10.0
|
|
|
(20.0)
|
%
|
|
7.9
|
|
|
1.3
|
%
|
Oil Sales Volumes
(Bcfe)
|
|
—
|
|
|
0.1
|
|
|
(100.0)
|
%
|
|
—
|
|
|
—
|
%
|
Condensate Sales
Volumes (Bcfe)
|
|
0.1
|
|
|
0.4
|
|
|
(75.0)
|
%
|
|
0.2
|
|
|
(50.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
(Bcfe)
|
|
128.3
|
|
|
119.0
|
|
|
7.8
|
%
|
|
134.5
|
|
|
(4.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
Production (MMcfe)
|
|
1,394.6
|
|
|
1,293.0
|
|
|
|
|
1,477.6
|
|
|
|
|
1NGLs,
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,
2019
|
|
September 30,
2018
|
|
June 30,
2019
|
Average Sales Price -
Gas
|
|
$
|
2.04
|
|
|
$
|
2.71
|
|
|
$
|
2.51
|
|
Average Gain on
Commodity Derivative Instruments - Cash Settlement- Gas
|
|
$
|
0.47
|
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
Average Sales Price -
Oil*
|
|
$
|
9.44
|
|
|
$
|
10.50
|
|
|
$
|
8.42
|
|
Average Sales Price -
NGLs*
|
|
$
|
2.28
|
|
|
$
|
4.68
|
|
|
$
|
3.06
|
|
Average Sales Price -
Condensate*
|
|
$
|
12.59
|
|
|
$
|
9.76
|
|
|
$
|
7.56
|
|
|
|
|
|
|
|
|
Average Sales Price -
Total Company
|
|
$
|
2.51
|
|
|
$
|
2.92
|
|
|
$
|
2.63
|
|
|
|
|
|
|
|
|
Lease Operating
Expense (LOE)
|
|
$
|
0.11
|
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
Production, Ad
Valorem, and Other Fees
|
|
0.05
|
|
|
0.06
|
|
|
0.05
|
|
Transportation,
Gathering and Compression
|
|
0.97
|
|
|
0.84
|
|
|
0.98
|
|
Depreciation,
Depletion and Amortization (DD&A)
|
|
0.86
|
|
|
0.93
|
|
|
0.89
|
|
Total Production
Costs
|
|
$
|
1.99
|
|
|
$
|
1.97
|
|
|
$
|
2.07
|
|
|
|
|
|
|
|
|
Total Production Cash
Costs, before DD&A
|
|
$
|
1.13
|
|
|
$
|
1.04
|
|
|
$
|
1.18
|
|
Cash Margin, before
DD&A
|
|
$
|
1.38
|
|
|
$
|
1.88
|
|
|
$
|
1.45
|
|
|
*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.
|
In the third quarter of 2019, total production costs were
higher, compared to the year-earlier quarter, due to increased
transportation, gathering, and compression costs, offset in part by
improvements to LOE, production taxes, and DD&A. The primary
driver to the increased transportation, gathering, and compression
costs was due to higher CNXM fees and firm transportation costs
associated with new transportation contracts. The improvement to
LOE was driven by decreased employee costs and increased production
volumes.
Marketing:
For the third quarter of 2019, CNX's average sales price for
natural gas, natural gas liquids (NGLs), oil, and condensate was
$2.51 per Mcfe. The average realized
price for all liquids for the third quarter of 2019 was
$14.26 per barrel.
CNX's weighted average differential from NYMEX in the third
quarter of 2019 was negative $0.33
per MMBtu. CNX's average sales price for natural gas before hedging
decreased 18.7% to $2.04 per Mcf
compared with the average sales price of $2.51 per Mcf in the second quarter of 2019.
This decrease results primarily from a lower Henry Hub price
reflecting current general market conditions coupled with a wider
differential. Including the impact of cash settlements from
hedging, CNX's average sales price for natural gas was $0.08 per Mcf, or 3.1%, lower than the second
quarter and $0.23 per Mcf, or 8.4%,
lower than last year's third quarter.
Total hedged natural gas production in the 2019 fourth quarter
is 115.7 Bcf. The annual gas hedge position is shown in the table
below:
|
|
2019
|
|
2020
|
Volumes Hedged (Bcf),
as of 10/9/19
|
|
405.2*
|
|
489.6
|
|
|
*Includes
actual settlements of 312.5 Bcf.
|
CNX's hedged gas volumes include a combination of NYMEX
financial hedges, index (NYMEX and basis) financial hedges, and
physical fixed price sales. In addition, to protect the NYMEX hedge
volumes from basis exposure, CNX enters into basis-only financial
hedges and physical sales with fixed basis at certain sales points.
CNX's gas hedge position through 2023 as of October 9, 2019 is shown in the table below:
|
|
Q4
2019
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
NYMEX Only
Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
112.3
|
|
|
388.4
|
|
|
478.3
|
|
|
393.2
|
|
|
264.7
|
|
|
117.5
|
|
Average Prices
($/Mcf)
|
|
$
|
2.98
|
|
|
$
|
3.02
|
|
|
$
|
2.97
|
|
|
$
|
2.93
|
|
|
$
|
3.01
|
|
|
$
|
2.90
|
|
Physical Fixed
Price Sales and Index Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
3.4
|
|
|
16.8
|
|
|
11.3
|
|
|
21.0
|
|
|
13.4
|
|
|
27.1
|
|
Average Prices
($/Mcf)
|
|
$
|
2.54
|
|
|
$
|
2.63
|
|
|
$
|
2.45
|
|
|
$
|
2.50
|
|
|
$
|
2.60
|
|
|
$
|
2.14
|
|
Total Volumes
Hedged (Bcf)1
|
|
115.7
|
|
|
405.2
|
|
|
489.6
|
|
|
414.2
|
|
|
278.1
|
|
|
144.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX + Basis
(fully-covered volumes)2
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
112.9
|
|
|
403.4
|
|
|
484.0
|
|
|
414.2
|
|
|
268.0
|
|
|
142.1
|
|
Average Prices
($/Mcf)
|
|
$
|
2.65
|
|
|
$
|
2.68
|
|
|
$
|
2.54
|
|
|
$
|
2.40
|
|
|
$
|
2.42
|
|
|
$
|
2.27
|
|
NYMEX Only Hedges
Exposed to Basis
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes
(Bcf)
|
|
2.8
|
|
|
1.8
|
|
|
5.6
|
|
|
—
|
|
|
10.1
|
|
|
2.5
|
|
Average Prices
($/Mcf)
|
|
$
|
2.98
|
|
|
$
|
3.02
|
|
|
$
|
2.97
|
|
|
$
|
—
|
|
|
$
|
3.01
|
|
|
$
|
2.90
|
|
Total Volumes
Hedged (Bcf)1
|
|
115.7
|
|
|
405.2
|
|
|
489.6
|
|
|
414.2
|
|
|
278.1
|
|
|
144.6
|
|
|
12021
excludes 8.1 Bcf of physical basis sales not matched with NYMEX
hedges.
|
2Includes
physical sales with fixed basis in Q4 2019, 2019, 2020, 2021, 2022,
and 2023 of 31.1 Bcf, 127.8 Bcf, 88.9 Bcf, 75.9 Bcf, 42.0 Bcf, and
3.4 Bcf, respectively.
|
During the third quarter of 2019, CNX added additional NYMEX
natural gas hedges of 28.0 Bcf, and 24.9 Bcf for 2019, and 2020,
respectively. To help mitigate basis exposure on NYMEX hedges, in
the third quarter CNX added 27.7 Bcf, 44.1 Bcf, 33.6 Bcf, and 25.2
Bcf, of basis hedges for 2019, 2020, 2021, and 2022,
respectively.
Finance:
At September 30, 2019, CNX's
Stand-alone net debt to trailing-twelve-months (TTM) adjusted
Stand-alone EBITDAX (including distributions from CNXM) was 2.4x.
On a consolidated basis, CNX's net debt to TTM adjusted EBITDAX was
2.6x.
At September 30, 2019, CNX's
credit facility had $613 million of
borrowings outstanding and $199
million of letters of credit outstanding, leaving
$1,288 million of unused capacity. In
addition, CNX holds 21.7 million CNXM limited partnership units,
with a current market value of approximately $283 million as of October
15, 2019, a 2% General Partner interest, and incentive
distribution rights.
During the quarter, the company repurchased 1,000,000 shares.
Since the October 2017 inception of
the current share repurchase program and as of October 15, 2019, CNX has repurchased a total of
approximately 45.2 million shares for approximately $602 million, resulting in 186,586,751 shares
outstanding, which is an approximate 19% reduction to total shares
outstanding. The company has approximately $148 million remaining on its current
$750 million share repurchase
program, which is not subject to an expiration date.
Guidance and Capital Update:
CNX is updating 2019 production volumes to 530-540 Bcfe,
compared to the previous guidance of 510-530 Bcfe. CNX is updating
2020 production volumes to 535-565 Bcfe, compared to the previous
guidance of 570-595 Bcfe. The updated guidance equates to an
increase of 3% over 2019, based on the midpoints of the updated
guidance.
Adjusted
EBITDAX(1)
|
|
Previous
|
|
Updated
|
|
Previous
|
|
Updated
|
|
|
2019E
|
|
2019E
|
|
2020E
|
|
2020E
|
($ in millions,
except per share data)
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Stand-Alone
(Including Distributions)(2)
|
|
$740
|
-
|
$760
|
|
$745
|
-
|
$765
|
|
$770
|
-
|
$815
|
|
$710
|
-
|
$755
|
Stand-Alone
(Including Distributions)(2) per Share
|
|
$3.95
|
-
|
$4.05
|
|
$3.99
|
-
|
$4.10
|
|
$4.11
|
-
|
$4.35
|
|
$3.81
|
-
|
$4.05
|
Consolidated
|
|
$885
|
-
|
$925
|
|
$910
|
-
|
$940
|
|
$945
|
-
|
$1,010
|
|
$885
|
-
|
$950
|
|
(1)
Updated EBITDAX based on NYMEX forward
strip as of October 9, 2019.
|
(2)
2019 and 2020 include approximately $55
million and $75 million, respectively, of projected distributions
from ownership interests in CNXM. Per share calculation uses
186.6 million shares outstanding as of October 15, 2019.
|
|
Note: CNX is unable
to provide a reconciliation of projected financial results
contained in this release, including FCF, adjusted EBITAX, fully
burdened cash costs and other metrics to their respective
comparable financial measure calculated in accordance with
GAAP. This is due to our inability to calculate the
comparable GAAP projected metrics, including operating income and
total production costs, given the unknown effect, timing, and
potential significance of certain income statement
items.
|
Despite lower natural gas prices since the previous guidance
update, the company expects full-year 2019 adjusted EBITDAX to
increase due to higher production volumes and lower costs. The
updated guidance assumes 2019 NYMEX gas price in the fourth quarter
of $2.37 per MMBtu on open volumes
and a basis differential of negative $0.38 per MMBtu. This compares to the previous
guidance, using gas prices as of July 8,
2019, which assumed a second half 2019 NYMEX gas price of
$2.45 per MMBtu and an average basis
differential of negative $0.30 per
MMBtu.
The company expects lower 2020 adjusted EBITDAX, compared to the
previous guidance update, due to lower volumes and a decline in
natural gas prices since July 8,
2019, which is the date used for the previous guidance. The
updated guidance assumes 32.5 Bcfe less production volumes in 2020,
compared to the previous guidance update; however, 15 Bcfe was
accelerated from 2020 into 2019, which is responsible for the
production increase in 2019. Also, the updated guidance assumes
2020 NYMEX gas price of $2.40 per
MMBtu on open volumes and an average basis differential of negative
$0.30 per MMBtu. This compares to the
previous guidance, which assumed a 2020 NYMEX gas price of
$2.55 per MMBtu and an average basis
differential of negative $0.30 per
MMBtu.
Despite a lower commodity strip, the company expects to generate
$146 million of FCF in 2020, which is
an increase compared to the previous guidance of $135 million, as a result of offsetting
reductions in capital expenditures and SG&A savings. The
updated 2019 guidance is also improved with EBITDAX increasing and
capital expenditures declining, compared to the previous
update.
Capital
Expenditures
|
|
Previous
|
|
Updated
|
|
Previous
|
|
Updated
|
|
|
2019E
|
|
2019E
|
|
2020E
|
|
2020E
|
($ in
millions)
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Drilling &
Completion (D&C)
|
|
$695
|
-
|
$745
|
|
$690
|
-
|
$715
|
|
$450
|
-
|
$520
|
|
$400
|
-
|
$450
|
Non-D&C
|
|
$200
|
-
|
$200
|
|
$200
|
-
|
$200
|
|
$90
|
-
|
$100
|
|
$90
|
-
|
$100
|
Total Stand-Alone
Capital
|
|
$895
|
-
|
$945
|
|
$890
|
-
|
$915
|
|
$540
|
-
|
$620
|
|
$490
|
-
|
$550
|
CNX Midstream LP
Capital
|
|
$310
|
-
|
$330
|
|
$310
|
-
|
$330
|
|
$80
|
-
|
$100
|
|
$80
|
-
|
$100
|
Total Consolidated
Capital
|
|
$1,205
|
-
|
$1,275
|
|
$1,200
|
-
|
$1,245
|
|
$620
|
-
|
$720
|
|
$570
|
-
|
$650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
(FCF)
|
|
—
|
|
—
|
|
$135
|
|
$146
|
Third quarter 2019 capital expenditure came in lower than
expected, and the company is reducing its full-year 2019 capital
guidance, while increasing production volumes. For 2020, the
company is reducing its full-year capital guidance and production
volumes, primarily due to plan changes and associated timing.
For 2019 and 2020 combined, the company expects to spend
approximately $80 million less
capital than previously announced, resulting in 17.5 Bcfe less
production, after accounting for the 15 Bcfe accelerated from 2020
into 2019.
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, 2018, CNX had 7.9
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 consolidated is defined as EBITDAX
after adjusting for the discrete items listed below. Stand-alone
EBITDAX is defined as the adjusted EBITDAX related to both CNX's
E&P and Unallocated segments (See Note 24 - Segment Information
in CNX's Annual Report on Form 10-K as filed with the Securities
and Exchange Commission for more information) plus the
distributions CNX receives during the current period from CNXM
related to its limited partnership units, general partner units,
and incentive distribution rights (IDRs). Although EBIT, EBITDAX,
Stand-alone EBITDAX and adjusted EBITDAX consolidated 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, Stand-alone EBITDAX or adjusted EBITDAX
consolidated identically, the presentation here may not be
comparable to similarly titled measures of other companies.
Adjusted EBITDAX per outstanding share, adjusted net income per
outstanding share, Stand-alone EBITDAX and adjusted EBITDAX
consolidated, with shares measured as of October 15, 2019, 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 consolidated,
Stand-alone EBITDAX, adjusted net income, net debt and TTM EBITDAX
to financial net income is as follows:
|
Three Months
Ended
|
|
September
30,
|
|
2019
|
|
2019
|
|
2019
|
Dollars in
thousands
|
Stand-alone1
|
|
Midstream
|
|
Total
Company
|
Net Income
|
$
|
102,219
|
|
|
$
|
41,741
|
|
|
$
|
143,960
|
|
Interest
Expense
|
30,783
|
|
|
7,622
|
|
|
38,405
|
|
Interest
Income
|
(1,078)
|
|
|
—
|
|
|
(1,078)
|
|
Income Tax
Expense
|
48,902
|
|
|
—
|
|
|
48,902
|
|
Earnings Before
Interest & Taxes (EBIT)
|
$
|
180,826
|
|
|
$
|
49,363
|
|
|
$
|
230,189
|
|
Depreciation,
Depletion & Amortization
|
111,839
|
|
|
8,620
|
|
|
120,459
|
|
Exploration
Expense
|
6,075
|
|
|
—
|
|
|
6,075
|
|
Earnings Before
Interest, Taxes, DD&A and Exploration (EBITDAX)
|
$
|
298,740
|
|
|
$
|
57,983
|
|
|
$
|
356,723
|
|
Adjustments:
|
|
|
|
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
$
|
(156,872)
|
|
|
$
|
—
|
|
|
$
|
(156,872)
|
|
Stock-Based
Compensation
|
1,453
|
|
|
328
|
|
|
1,781
|
|
Severance
Expense
|
1,563
|
|
|
436
|
|
|
1,999
|
|
Total Pre-tax
Adjustments
|
$
|
(153,856)
|
|
|
$
|
764
|
|
|
$
|
(153,092)
|
|
Adjusted EBITDAX
Consolidated
|
$
|
144,884
|
|
|
$
|
58,747
|
|
|
$
|
203,631
|
|
Midstream
Distributions
|
14,388
|
|
|
N/A
|
|
|
N/A
|
|
Stand-alone
EBITDAX
|
$
|
159,272
|
|
|
N/A
|
|
|
N/A
|
|
|
1
Stand-alone includes both CNX's E&P and Unallocated segments.
See Note 24 - Segment Information in CNX's Annual Report on Form
10-K for the fiscal year ended December 31, 2018, as filed with the
Securities and Exchange Commission, for more
information.
|
|
Three Months
Ended
|
|
September
30,
|
|
2018
|
|
2018
|
|
2018
|
Dollars in
thousands
|
Stand-alone1
|
|
Midstream
|
|
Total
Company
|
Net Income
|
$
|
115,583
|
|
|
$
|
31,173
|
|
|
$
|
146,756
|
|
Interest
Expense
|
28,467
|
|
|
7,256
|
|
|
35,723
|
|
Interest
Income
|
(42)
|
|
|
—
|
|
|
(42)
|
|
Income Tax
Expense
|
56,678
|
|
|
—
|
|
|
56,678
|
|
Earnings Before
Interest & Taxes (EBIT)
|
$
|
200,686
|
|
|
$
|
38,429
|
|
|
$
|
239,115
|
|
Depreciation,
Depletion & Amortization
|
111,844
|
|
|
7,741
|
|
|
119,585
|
|
Exploration
Expense
|
3,321
|
|
|
—
|
|
|
3,321
|
|
Earnings Before
Interest, Taxes, DD&A and Exploration (EBITDAX)
|
$
|
315,851
|
|
|
$
|
46,170
|
|
|
$
|
362,021
|
|
Adjustments:
|
|
|
|
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
$
|
(15,181)
|
|
|
$
|
—
|
|
|
$
|
(15,181)
|
|
Gain on Certain Asset
Sales
|
(130,849)
|
|
|
—
|
|
|
(130,849)
|
|
Severance
Expense
|
513
|
|
|
—
|
|
|
513
|
|
Litigation
Settlements
|
2,000
|
|
|
—
|
|
|
2,000
|
|
Loss on Debt
Extinguishment
|
15,385
|
|
|
—
|
|
|
15,385
|
|
Stock-Based
Compensation
|
4,737
|
|
|
506
|
|
|
5,243
|
|
Total Pre-tax
Adjustments
|
$
|
(123,395)
|
|
|
$
|
506
|
|
|
$
|
(122,889)
|
|
Adjusted EBITDAX
Consolidated
|
$
|
192,456
|
|
|
$
|
46,676
|
|
|
$
|
239,132
|
|
Midstream
Distributions
|
10,078
|
|
|
N/A
|
|
|
N/A
|
|
Stand-alone
EBITDAX
|
$
|
202,534
|
|
|
N/A
|
|
|
N/A
|
|
|
1
Stand-alone includes both CNX's E&P and Unallocated segments.
See Note 24 - Segment Information in CNX's Annual Report on Form
10-K for fiscal year ended December 31, 2018, as filed with the
Securities and Exchange Commission, for more
information.
|
Reconciliation of Adjusted Net Income
|
Three Months
Ended
|
|
Three Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Dollars in
thousands
|
Stand-alone1
|
|
Stand-alone1
|
|
Total
Company
|
|
Total
Company
|
Net Income from
EBITDAX Reconciliation
|
$
|
102,219
|
|
|
$
|
115,583
|
|
|
$
|
143,960
|
|
|
$
|
146,756
|
|
Adjustments:
|
|
|
|
|
|
|
|
Total Pre-tax
Adjustments from EBITDAX Reconciliation
|
(153,856)
|
|
|
(123,395)
|
|
|
(153,092)
|
|
|
(122,889)
|
|
Tax effect of
Adjustments
|
40,464
|
|
|
33,465
|
|
|
40,263
|
|
|
33,328
|
|
Adjusted Net
(Loss) Income
|
$
|
(11,173)
|
|
|
$
|
25,653
|
|
|
$
|
31,131
|
|
|
$
|
57,195
|
|
|
1
Stand-alone includes both CNX's E&P and Unallocated segments.
See Note 24 - Segment Information in CNX's Annual Report on Form
10-K for the fiscal year ended December 31, 2018, as filed with the
Securities and Exchange Commission, for more
information.
|
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
|
September 30,
2019
|
|
Stand-alone1
|
|
Midstream
|
|
Total
Company
|
Total Long-Term Debt
(GAAP)
|
$
|
2,000,309
|
|
|
$
|
639,925
|
|
|
$
|
2,640,234
|
|
Less Cash and Cash
Equivalents
|
2,847
|
|
|
2,637
|
|
|
5,484
|
|
Net Debt
(Non-GAAP)
|
$
|
1,997,462
|
|
|
$
|
637,288
|
|
|
$
|
2,634,750
|
|
|
1Stand-alone includes both CNX's E&P
and Unallocated segments.
|
Reconciliation of Trailing-Twelve-Months (TTM) EBITDAX by
Quarter
|
Three
Months
Ended
|
|
Twelve
Months
Ended
|
|
December
31,
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
Dollars in
thousands
|
2018
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
Net Income
(Loss)
|
$
|
129,415
|
|
|
$
|
(64,651)
|
|
|
$
|
192,694
|
|
|
$
|
143,960
|
|
|
$
|
401,418
|
|
Interest
Expense
|
33,222
|
|
|
35,771
|
|
|
40,152
|
|
|
38,405
|
|
|
147,550
|
|
Interest
Income
|
1
|
|
|
(722)
|
|
|
(71)
|
|
|
(1,078)
|
|
|
(1,870)
|
|
Income Tax (Benefit)
Expense
|
(23,713)
|
|
|
(11,559)
|
|
|
40,791
|
|
|
48,902
|
|
|
54,421
|
|
Earnings Before
Interest & Taxes (EBIT)
|
$
|
138,925
|
|
|
$
|
(41,161)
|
|
|
$
|
273,566
|
|
|
$
|
230,189
|
|
|
$
|
601,519
|
|
Depreciation,
Depletion & Amortization
|
130,084
|
|
|
125,161
|
|
|
128,999
|
|
|
120,459
|
|
|
504,703
|
|
Exploration
Expense
|
2,633
|
|
|
3,258
|
|
|
5,567
|
|
|
6,075
|
|
|
17,533
|
|
Earnings Before
Interest, Taxes, DD&A, and Exploration (EBITDAX)
|
$
|
271,642
|
|
|
$
|
87,258
|
|
|
$
|
408,132
|
|
|
$
|
356,723
|
|
|
$
|
1,123,755
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Unrealized Loss
(Gain) on Commodity Derivative Instruments
|
$
|
36,727
|
|
|
$
|
153,994
|
|
|
$
|
(210,909)
|
|
|
$
|
(156,872)
|
|
|
$
|
(177,060)
|
|
Loss on Certain Asset
Sales and Abandonments
|
96
|
|
|
3,564
|
|
|
—
|
|
|
—
|
|
|
3,660
|
|
Severance
Expense
|
(55)
|
|
|
—
|
|
|
1,182
|
|
|
1,999
|
|
|
3,126
|
|
Stock Based
Compensation
|
5,478
|
|
|
10,903
|
|
|
23,873
|
|
|
1,781
|
|
|
42,035
|
|
(Gain) Loss on Debt
Extinguishment
|
(315)
|
|
|
7,537
|
|
|
77
|
|
|
—
|
|
|
7,299
|
|
Shaw Event
|
—
|
|
|
4,305
|
|
|
—
|
|
|
—
|
|
|
4,305
|
|
Total Pre-tax
Adjustments
|
$
|
41,931
|
|
|
$
|
180,303
|
|
|
$
|
(185,777)
|
|
|
$
|
(153,092)
|
|
|
$
|
(116,635)
|
|
Adjusted EBITDAX
Consolidated TTM
|
$
|
313,573
|
|
|
$
|
267,561
|
|
|
$
|
222,355
|
|
|
$
|
203,631
|
|
|
$
|
1,007,120
|
|
Reconciliation of Stand-alone EBITDAX Trailing-Twelve-Months
(TTM)
|
Twelve Months
Ended September 30, 2019
|
Dollars in
thousands
|
Stand-alone1
|
|
Midstream
|
|
Total
Company
|
Net Income
|
$
|
243,371
|
|
|
$
|
158,047
|
|
|
$
|
401,418
|
|
Interest
Expense
|
118,153
|
|
|
29,397
|
|
|
147,550
|
|
Interest
Income
|
(1,870)
|
|
|
—
|
|
|
(1,870)
|
|
Income Tax
Expense
|
54,421
|
|
|
—
|
|
|
54,421
|
|
Earnings Before
Interest & Taxes (EBIT)
|
$
|
414,075
|
|
|
$
|
187,444
|
|
|
$
|
601,519
|
|
Depreciation,
Depletion & Amortization
|
471,933
|
|
|
32,770
|
|
|
504,703
|
|
Exploration
Expense
|
17,533
|
|
|
—
|
|
|
17,533
|
|
Earnings Before
Interest, Taxes, DD&A, and Exploration (EBITDAX)
|
$
|
903,541
|
|
|
$
|
220,214
|
|
|
$
|
1,123,755
|
|
Adjustments:
|
|
|
|
|
|
Unrealized Gain on
Commodity Derivative Instruments
|
$
|
(177,060)
|
|
|
$
|
—
|
|
|
$
|
(177,060)
|
|
(Gain) Loss on
Certain Asset Sales and Abandonments
|
(3,569)
|
|
|
7,229
|
|
|
3,660
|
|
Severance
Expense
|
2,690
|
|
|
436
|
|
|
3,126
|
|
Stock Based
Compensation
|
39,919
|
|
|
2,116
|
|
|
42,035
|
|
Loss on Debt
Extinguishment
|
7,299
|
|
|
—
|
|
|
7,299
|
|
Shaw Event
|
4,305
|
|
|
—
|
|
|
4,305
|
|
Total Pre-tax
Adjustments
|
$
|
(126,416)
|
|
|
$
|
9,781
|
|
|
$
|
(116,635)
|
|
Adjusted EBITDAX
Consolidated TTM
|
$
|
777,125
|
|
|
$
|
229,995
|
|
|
$
|
1,007,120
|
|
Midstream
Distributions
|
50,869
|
|
|
N/A
|
|
|
N/A
|
|
Stand-alone
EBITDAX TTM
|
$
|
827,994
|
|
|
N/A
|
|
|
N/A
|
|
|
1
Stand-alone includes both CNX's E&P and Unallocated
Segments.
|
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, 2018 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:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Natural Gas, NGLs and
Oil Revenue
|
$
|
265,051
|
|
|
$
|
344,712
|
|
|
$
|
1,043,862
|
|
|
$
|
1,084,851
|
|
Gain on Commodity
Derivative Instruments
|
213,913
|
|
|
18,005
|
|
|
240,118
|
|
|
78,752
|
|
Purchased Gas
Revenue
|
29,192
|
|
|
10,560
|
|
|
64,181
|
|
|
38,546
|
|
Midstream
Revenue
|
18,525
|
|
|
19,946
|
|
|
55,863
|
|
|
69,684
|
|
Other Operating
Income
|
3,316
|
|
|
3,903
|
|
|
9,436
|
|
|
23,146
|
|
Total Revenue and
Other Operating Income
|
529,997
|
|
|
397,126
|
|
|
1,413,460
|
|
|
1,294,979
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
Operating
Expense
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
14,202
|
|
|
16,202
|
|
|
52,706
|
|
|
78,350
|
|
Transportation,
Gathering and Compression
|
80,193
|
|
|
68,907
|
|
|
244,217
|
|
|
230,935
|
|
Production, Ad
Valorem, and Other Fees
|
6,127
|
|
|
7,342
|
|
|
20,103
|
|
|
24,277
|
|
Depreciation,
Depletion and Amortization
|
120,459
|
|
|
119,585
|
|
|
374,619
|
|
|
363,338
|
|
Exploration and
Production Related Other Costs
|
6,075
|
|
|
3,321
|
|
|
14,900
|
|
|
9,401
|
|
Purchased Gas
Costs
|
27,490
|
|
|
10,602
|
|
|
62,476
|
|
|
37,404
|
|
Impairment of Other
Intangible Assets
|
—
|
|
|
—
|
|
|
—
|
|
|
18,650
|
|
Selling, General, and
Administrative Costs
|
24,307
|
|
|
32,435
|
|
|
109,016
|
|
|
98,693
|
|
Other Operating
Expense
|
19,746
|
|
|
17,405
|
|
|
61,197
|
|
|
51,238
|
|
Total Operating
Expense
|
298,599
|
|
|
275,799
|
|
|
939,234
|
|
|
912,286
|
|
Other Expense
(Income)
|
|
|
|
|
|
|
|
Other Expense
(Income)
|
3,439
|
|
|
1,105
|
|
|
2,757
|
|
|
(4,812)
|
|
Gain on Asset Sales
and Abandonments
|
(3,308)
|
|
|
(134,320)
|
|
|
(610)
|
|
|
(148,942)
|
|
Gain on Previously
Held Equity Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(623,663)
|
|
Loss on Debt
Extinguishment
|
—
|
|
|
15,385
|
|
|
7,614
|
|
|
54,433
|
|
Interest
Expense
|
38,405
|
|
|
35,723
|
|
|
114,328
|
|
|
112,712
|
|
Total Other
Expense (Income)
|
38,536
|
|
|
(82,107)
|
|
|
124,089
|
|
|
(610,272)
|
|
Total Costs and
Expenses
|
337,135
|
|
|
193,692
|
|
|
1,063,323
|
|
|
302,014
|
|
Earnings Before
Income Tax
|
192,862
|
|
|
203,434
|
|
|
350,137
|
|
|
992,965
|
|
Income Tax
Expense
|
48,902
|
|
|
56,678
|
|
|
78,133
|
|
|
239,269
|
|
Net
Income
|
143,960
|
|
|
146,756
|
|
|
272,004
|
|
|
753,696
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
28,422
|
|
|
21,727
|
|
|
81,325
|
|
|
59,090
|
|
Net Income
Attributable to CNX Resources Shareholders
|
$
|
115,538
|
|
|
$
|
125,029
|
|
|
$
|
190,679
|
|
|
$
|
694,606
|
|
|
|
|
|
|
|
|
|
Earnings per
Share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.62
|
|
|
$
|
0.59
|
|
|
$
|
1.01
|
|
|
$
|
3.22
|
|
Diluted
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
$
|
1.01
|
|
|
$
|
3.18
|
|
|
|
|
|
|
|
|
|
Dividends
Declared
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Dollars in
thousands)
|
September
30,
|
|
September
30,
|
(Unaudited)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net Income
|
$
|
143,960
|
|
|
$
|
146,756
|
|
|
$
|
272,004
|
|
|
$
|
753,696
|
|
Other Comprehensive
Income:
|
|
|
|
|
|
|
|
Actuarially
Determined Long-Term Liability Adjustments (Net of tax:
($15), ($13), ($44), ($794))
|
41
|
|
|
22
|
|
|
126
|
|
|
2,004
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
144,001
|
|
|
146,778
|
|
|
272,130
|
|
|
755,700
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive
Income Attributable to Noncontrolling Interest
|
28,422
|
|
|
21,727
|
|
|
81,325
|
|
|
59,090
|
|
|
|
|
|
|
|
|
|
Comprehensive Income
Attributable to CNX Resources Shareholders
|
$
|
115,579
|
|
|
$
|
125,051
|
|
|
$
|
190,805
|
|
|
$
|
696,610
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands)
|
September 30,
2019
|
|
December 31,
2018
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
5,484
|
|
|
$
|
17,198
|
|
Accounts and Notes
Receivable:
|
|
|
|
Trade
|
96,997
|
|
|
252,424
|
|
Other
Receivables
|
11,462
|
|
|
11,077
|
|
Supplies
Inventories
|
7,527
|
|
|
9,715
|
|
Recoverable Income
Taxes
|
11,184
|
|
|
149,481
|
|
Prepaid
Expenses
|
213,072
|
|
|
61,791
|
|
Total Current
Assets
|
345,726
|
|
|
501,686
|
|
Property, Plant and
Equipment:
|
|
|
|
Property, Plant and
Equipment
|
10,512,298
|
|
|
9,567,428
|
|
Less—Accumulated
Depreciation, Depletion and Amortization
|
2,981,723
|
|
|
2,624,984
|
|
Total Property,
Plant and Equipment—Net
|
7,530,575
|
|
|
6,942,444
|
|
Other
Assets:
|
|
|
|
Operating Lease
Right-of-Use Assets
|
205,647
|
|
|
—
|
|
Investment in
Affiliates
|
17,110
|
|
|
18,663
|
|
Goodwill
|
796,359
|
|
|
796,359
|
|
Other Intangible
Assets
|
98,285
|
|
|
103,200
|
|
Other
|
292,556
|
|
|
229,818
|
|
Total Other
Assets
|
1,409,957
|
|
|
1,148,040
|
|
TOTAL
ASSETS
|
$
|
9,286,258
|
|
|
$
|
8,592,170
|
|
|
|
|
|
(Unaudited)
|
|
|
(Dollars in
thousands, except per share data)
|
September 30,
2019
|
|
December 31,
2018
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
Payable
|
$
|
308,003
|
|
|
$
|
229,806
|
|
Current Portion of
Finance Lease Obligations
|
7,203
|
|
|
6,997
|
|
Current Portion of
Operating Lease Obligations
|
65,061
|
|
|
—
|
|
Other Accrued
Liabilities
|
241,357
|
|
|
286,172
|
|
Total Current
Liabilities
|
621,624
|
|
|
522,975
|
|
Non-Current
Liabilities:
|
|
|
|
Long-Term
Debt
|
2,640,234
|
|
|
2,378,205
|
|
Finance Lease
Obligations
|
9,400
|
|
|
13,299
|
|
Deferred Income
Taxes
|
476,968
|
|
|
398,682
|
|
Operating Lease
Obligations
|
122,514
|
|
|
—
|
|
Asset Retirement
Obligations
|
33,123
|
|
|
37,479
|
|
Other
|
160,577
|
|
|
159,787
|
|
Total Non-Current
Liabilities
|
3,442,816
|
|
|
2,987,452
|
|
TOTAL
LIABILITIES
|
4,064,440
|
|
|
3,510,427
|
|
Stockholders'
Equity:
|
|
|
|
Common Stock, $.01
Par Value; 500,000,000 Shares Authorized, 186,586,751 Issued and
Outstanding at September 30, 2019; 198,663,342 Issued and
Outstanding at December 31, 2018
|
1,870
|
|
|
1,990
|
|
Capital in Excess of
Par Value
|
2,197,783
|
|
|
2,264,063
|
|
Preferred Stock,
15,000,000 shares authorized, None issued and
outstanding
|
—
|
|
|
—
|
|
Retained
Earnings
|
2,243,104
|
|
|
2,071,809
|
|
Accumulated Other
Comprehensive Loss
|
(7,778)
|
|
|
(7,904)
|
|
Total CNX
Resources Stockholders' Equity
|
4,434,979
|
|
|
4,329,958
|
|
Noncontrolling
Interest
|
786,839
|
|
|
751,785
|
|
TOTAL
STOCKHOLDERS' EQUITY
|
5,221,818
|
|
|
5,081,743
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
9,286,258
|
|
|
$
|
8,592,170
|
|
CNX RESOURCES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Dollars in
thousands)
|
September
30,
|
|
September
30,
|
(Unaudited)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total
Stockholders' Equity, Beginning Balance
|
$
|
5,099,995
|
|
|
$
|
5,038,923
|
|
|
$
|
5,081,743
|
|
|
$
|
3,899,899
|
|
|
|
|
|
|
|
|
|
Common Stock and
Capital in Excess of Par Value:
|
|
|
|
|
|
|
|
Beginning
Balance
|
2,205,848
|
|
|
2,374,788
|
|
|
2,266,053
|
|
|
2,452,564
|
|
Issuance of Common
Stock
|
49
|
|
|
126
|
|
|
211
|
|
|
1,689
|
|
Purchase and
Retirement of Common Stock
|
(7,697)
|
|
|
(66,503)
|
|
|
(101,687)
|
|
|
(155,191)
|
|
Amortization of
Stock-Based Compensation Awards
|
1,453
|
|
|
4,737
|
|
|
35,076
|
|
|
14,086
|
|
Ending
Balance
|
2,199,653
|
|
|
2,313,148
|
|
|
2,199,653
|
|
|
2,313,148
|
|
|
|
|
|
|
|
|
|
Retained
Earnings:
|
|
|
|
|
|
|
|
Beginning
Balance
|
2,127,627
|
|
|
1,940,507
|
|
|
2,071,809
|
|
|
1,455,811
|
|
Net Income
|
115,538
|
|
|
125,029
|
|
|
190,679
|
|
|
694,606
|
|
Purchase and
Retirement of Common Stock
|
—
|
|
|
(61,512)
|
|
|
(13,790)
|
|
|
(141,543)
|
|
Shares Withheld for
Taxes
|
(61)
|
|
|
(136)
|
|
|
(5,594)
|
|
|
(4,986)
|
|
Ending
Balance
|
2,243,104
|
|
|
2,003,888
|
|
|
2,243,104
|
|
|
2,003,888
|
|
|
|
|
|
|
|
|
|
Accumulated Other
Comprehensive Loss:
|
|
|
|
|
|
|
|
Beginning
Balance
|
(7,819)
|
|
|
(6,494)
|
|
|
(7,904)
|
|
|
(8,476)
|
|
Other Comprehensive
Income
|
41
|
|
|
22
|
|
|
126
|
|
|
2,004
|
|
Ending
Balance
|
(7,778)
|
|
|
(6,472)
|
|
|
(7,778)
|
|
|
(6,472)
|
|
|
|
|
|
|
|
|
|
Total CNX
Resources Corporation Stockholders' Equity
|
4,434,979
|
|
|
4,310,564
|
|
|
4,434,979
|
|
|
4,310,564
|
|
|
|
|
|
|
|
|
|
Non-Controlling
Interest:
|
|
|
|
|
|
|
|
Beginning
Balance
|
774,339
|
|
|
730,122
|
|
|
751,785
|
|
|
—
|
|
Net Income
|
28,422
|
|
|
21,727
|
|
|
81,325
|
|
|
59,090
|
|
Shares Withheld for
Taxes
|
—
|
|
|
(1)
|
|
|
(690)
|
|
|
(348)
|
|
Amortization of
Stock-Based Compensation Awards
|
328
|
|
|
506
|
|
|
1,481
|
|
|
1,775
|
|
Distributions to CNXM
Noncontrolling Interest Holders
|
(16,250)
|
|
|
(14,099)
|
|
|
(47,062)
|
|
|
(40,839)
|
|
Acquisition of CNX
Gathering, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
718,577
|
|
Ending
Balance
|
786,839
|
|
|
738,255
|
|
|
786,839
|
|
|
738,255
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity, Ending Balance
|
$
|
5,221,818
|
|
|
$
|
5,048,819
|
|
|
$
|
5,221,818
|
|
|
$
|
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:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net Income
|
$
|
143,960
|
|
|
$
|
146,756
|
|
|
$
|
272,004
|
|
|
$
|
753,696
|
|
Adjustments to
Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
|
|
|
|
|
|
|
Depreciation,
Depletion and Amortization
|
120,459
|
|
|
119,585
|
|
|
374,619
|
|
|
363,338
|
|
Amortization of
Deferred Financing Costs
|
1,649
|
|
|
1,818
|
|
|
6,057
|
|
|
6,640
|
|
Impairment of Other
Intangible Assets
|
—
|
|
|
—
|
|
|
—
|
|
|
18,650
|
|
Stock-Based
Compensation
|
1,781
|
|
|
5,243
|
|
|
36,557
|
|
|
15,861
|
|
Gain on Asset Sales
and Abandonments
|
(3,308)
|
|
|
(134,320)
|
|
|
(610)
|
|
|
(148,942)
|
|
Gain on Previously
Held Equity Interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(623,663)
|
|
Loss on Debt
Extinguishment
|
—
|
|
|
15,385
|
|
|
7,614
|
|
|
54,433
|
|
Gain on Commodity
Derivative Instruments
|
(213,913)
|
|
|
(18,005)
|
|
|
(240,118)
|
|
|
(78,752)
|
|
Net Cash Received in
Settlement of Commodity Derivative Instruments
|
57,041
|
|
|
2,825
|
|
|
26,331
|
|
|
2,518
|
|
Deferred Income
Taxes
|
48,902
|
|
|
68,922
|
|
|
78,133
|
|
|
259,116
|
|
Equity in Earnings of
Affiliates
|
(673)
|
|
|
(1,241)
|
|
|
(1,703)
|
|
|
(4,688)
|
|
Return on Equity
Investment
|
1,200
|
|
|
—
|
|
|
3,256
|
|
|
—
|
|
Changes in Operating
Assets:
|
|
|
|
|
|
|
|
Accounts and Notes
Receivable
|
28,724
|
|
|
5,969
|
|
|
154,715
|
|
|
50,125
|
|
Recoverable Income
Taxes
|
102,518
|
|
|
(12,244)
|
|
|
138,406
|
|
|
(8,501)
|
|
Supplies
Inventories
|
3,715
|
|
|
773
|
|
|
2,188
|
|
|
1,016
|
|
Prepaid
Expenses
|
1,438
|
|
|
(1,664)
|
|
|
5,725
|
|
|
(337)
|
|
Changes in Operating
Liabilities:
|
|
|
|
|
|
|
|
Accounts
Payable
|
25,934
|
|
|
5,730
|
|
|
55,280
|
|
|
2,532
|
|
Accrued
Interest
|
(2,691)
|
|
|
9,170
|
|
|
2,359
|
|
|
5,812
|
|
Other Operating
Liabilities
|
4,703
|
|
|
28,914
|
|
|
(31,689)
|
|
|
30,418
|
|
Changes in Other
Liabilities
|
(16,134)
|
|
|
(4,362)
|
|
|
(23,041)
|
|
|
(9,736)
|
|
Other
|
114
|
|
|
35
|
|
|
9
|
|
|
683
|
|
Net Cash Provided by
Operating Activities
|
305,419
|
|
|
239,289
|
|
|
866,092
|
|
|
690,219
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Capital
Expenditures
|
(336,137)
|
|
|
(297,465)
|
|
|
(964,502)
|
|
|
(794,124)
|
|
CNX Gathering LLC
Acquisition, Net of Cash Acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
(299,272)
|
|
Proceeds from Asset
Sales
|
8,189
|
|
|
347,391
|
|
|
15,276
|
|
|
500,811
|
|
Net Distributions
from Equity Affiliates
|
—
|
|
|
4,100
|
|
|
—
|
|
|
7,750
|
|
Net Cash (Used in)
Provided by Investing Activities
|
(327,948)
|
|
|
54,026
|
|
|
(949,226)
|
|
|
(584,835)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Payments on
Miscellaneous Borrowings
|
(1,807)
|
|
|
(1,708)
|
|
|
(5,322)
|
|
|
(5,455)
|
|
Payments on Long-Term
Notes
|
—
|
|
|
(212,000)
|
|
|
(405,876)
|
|
|
(935,419)
|
|
Net Proceeds from
(Payments on) CNXM Revolving Credit Facility
|
38,000
|
|
|
33,000
|
|
|
162,000
|
|
|
(105,500)
|
|
(Payments on)
Proceeds from CNX Revolving Credit Facility
|
(16,800)
|
|
|
17,000
|
|
|
1,200
|
|
|
439,000
|
|
Proceeds from
Issuance of CNX Senior Notes
|
—
|
|
|
—
|
|
|
500,000
|
|
|
—
|
|
Proceeds from
Issuance of CNXM Senior Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
394,000
|
|
Distributions to CNXM
Noncontrolling Interest Holders
|
(16,250)
|
|
|
(14,099)
|
|
|
(47,062)
|
|
|
(40,839)
|
|
Proceeds from
Issuance of Common Stock
|
49
|
|
|
127
|
|
|
210
|
|
|
1,689
|
|
Shares Withheld for
Taxes
|
(62)
|
|
|
(138)
|
|
|
(6,284)
|
|
|
(5,335)
|
|
Purchases of Common
Stock
|
(7,697)
|
|
|
(127,645)
|
|
|
(117,477)
|
|
|
(294,365)
|
|
Debt Repurchase and
Financing Fees
|
(31)
|
|
|
(26)
|
|
|
(9,969)
|
|
|
(19,655)
|
|
Net Cash (Used in)
Provided by Financing Activities
|
(4,598)
|
|
|
(305,489)
|
|
|
71,420
|
|
|
(571,879)
|
|
Net Decrease in Cash
and Cash Equivalents
|
(27,127)
|
|
|
(12,174)
|
|
|
(11,714)
|
|
|
(466,495)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
32,611
|
|
|
54,846
|
|
|
17,198
|
|
|
509,167
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
5,484
|
|
|
$
|
42,672
|
|
|
$
|
5,484
|
|
|
$
|
42,672
|
|
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SOURCE CNX Resources Corporation