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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 __________________________________________________
FORM 10-Q
  __________________________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-14901
  __________________________________________________
CNX Resources Corporation
(Exact name of registrant as specified in its charter)
Delaware 51-0337383
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
CNX Center
1000 Horizon Vue Drive
Canonsburg, PA 15317-6506
(724) 485-4000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of exchange on which registered
Common Stock ($.01 par value) CNX New York Stock Exchange
Preferred Share Purchase Rights -- New York Stock Exchange
 __________________________________________________ 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer      Accelerated filer Non-accelerated filer Smaller Reporting Company
Emerging Growth Company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassShares outstanding as of April 11, 2024
Common stock, $0.01 par value153,245,448





TABLE OF CONTENTS
  Page
PART I FINANCIAL INFORMATION
ITEM 1.Unaudited Condensed Consolidated Financial Statements
ITEM 2.
ITEM 3.
ITEM 4.
PART II OTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 5.
ITEM 6.





GLOSSARY OF CERTAIN OIL AND GAS TERMS

    The following are certain terms and abbreviations commonly used in the oil and gas industry and included within this Form 10-Q:

Bbl - one stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.
BBtu - one billion British Thermal Units.
Bcf - one billion cubic feet of natural gas.
Bcfe - one billion cubic feet of natural gas equivalents, with one barrel of oil being equivalent to 6,000 cubic feet of gas.
Btu - one British Thermal Unit.
Mbbls - one thousand barrels of oil or other liquid hydrocarbons.
Mcf - one thousand cubic feet of natural gas.
Mcfe - one thousand cubic feet of natural gas equivalents, with one barrel of oil being equivalent to 6,000 cubic feet of gas.
MMBtu - one million British Thermal Units.
MMcfe - one million cubic feet of natural gas equivalents, with one barrel of oil being equivalent to 6,000 cubic feet of gas.
NGL - natural gas liquids - those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation or other methods in gas processing plants.
Tcfe - one trillion cubic feet of natural gas equivalents, with one barrel of oil being equivalent to 6,000 cubic feet of gas.

Basis – when referring to commodity pricing, the difference between the price for a commodity at a primary trading hub and the corresponding sales price at various regional sales points. The differential commonly is related to factors such as product quality, location, transportation capacity availability and contract pricing.
Blending - process of mixing dry and damp gas in order to meet downstream pipeline specifications.
Condensate - a mixture of hydrocarbons that exists in the gaseous phase at original reservoir temperature and pressure, but that, when produced, is in the liquid phase at surface pressure and temperature.
Conventional play - a term used in the oil and natural gas industry to refer to an area believed to be capable of producing crude oil and natural gas occurring in discrete accumulations in structural and stratigraphic traps utilizing conventional recovery methods.
Coalbed methane (CBM) - an unconventional form of natural gas found in coal deposits or coal seams.
Coal mine methane (CMM) - any gaseous hydrocarbon that is extracted or released through wells, degasification boreholes, ventilation or bleeder shafts for the purposes of degasifying underground coal mining operations. Coal Mine Methane may be extracted or released within or above mining activities and produced during, before, or after mining activity occurs or had occurred in connection with the degasification activities.
Developed reserves - developed reserves are reserves that can be expected to be recovered: (i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and (ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
Development well - a well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
Dry gas - natural gas that contains little to no liquid hydrocarbons.
Environmental attributes - items such as (but not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances.
Exploratory well - a well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an extension well, a service well or a stratigraphic test well.
Exploration costs - costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects of containing oil and natural gas reserves, including costs of drilling exploratory wells and exploratory-type stratigraphic test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred to in part as prospecting costs) and after acquiring the property. Principal types of exploration costs, which include depreciation and applicable operating costs of support equipment and facilities and other costs of exploration activities, are: (i) costs of topographical, geographical and geophysical studies and the rights to access the properties in order to conduct those studies, (ii) costs of carrying and retaining undeveloped properties, such as delay rentals and the maintenance of land and lease records, (iii) dry hole contributions (iv) costs of drilling and equipping exploratory wells, and (v) costs of drilling exploratory-type stratigraphic test wells.
Gob well  - a well drilled or vent hole converted to a well which produces or is capable of producing coalbed methane or other natural gas from a distressed zone created above and below a mined-out coal seam by any prior full seam extraction of the coal.
Gross acres - the total acres in which a working interest is owned.
Gross wells - the total wells in which a working interest is owned.



Lease operating expense - costs of operating wells and equipment on a producing lease, many of which are recurring. Includes items such as water disposals, repairs and maintenance, equipment rental and operating supplies, among others.
Net - “net” natural gas or “net” acres are determined by adding the fractional ownership working interests the Company has in gross wells or acres.
Net acres - the number of acres an owner has out of a particular number of gross acres.
Net wells - the percentage ownership interest in a well that an owner has based on the working interest.
New Technologies - currently represents what CNX views as a unique set of market opportunities in the areas of environmental attributes, proprietary technology and derivative product development. See Item 2 - Management's Discussion and Analysis of this Form 10-Q for a discussion of CNX’s New Technology efforts.
NYMEX - New York Mercantile Exchange.
Play - a proven geological formation that contains commercial amounts of hydrocarbons.
Production costs - costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities, which become part of the cost of oil and natural gas produced.
Proved reserves - quantities of oil, natural gas, and natural gas liquids (NGLs) which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.
Proved developed reserves (PDPs) - proved reserves which can be expected to be recovered through existing wells with existing equipment and operating methods.
Proved undeveloped reserves (PUDs) - proved reserves that can be estimated with reasonable certainty to be recovered from new wells on undrilled proved acreage or from existing wells where a relatively major expenditure is required for completion.
Reservoir - a porous and permeable underground formation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.
Royalty interest - an interest in an oil and natural gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowners' royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.
Throughput - the volume of natural gas transported or passing through a pipeline, plant, terminal, or other facility during a particular period. 
TIL - turn-in-line; a well turned to sales.
Transportation, gathering and compression - cost incurred related to transporting natural gas to the ultimate point of sale. These costs also include costs related to physically preparing natural gas, natural gas liquids and condensate for ultimate sale which include costs related to processing, compressing, dehydrating and fractionating, among others.
Service well - a well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service wells include, among other things, gas injection, water injection and salt-water disposal.
Shale gas - an unconventional natural gas that is found trapped within shale formations.
Unconventional formations - a term used in the oil and gas industry to refer to a play in which the targeted reservoirs generally fall into one of three categories: (1) tight sands, (2) coal beds or (3) shales. The reservoirs tend to cover large areas and lack the readily apparent traps, seals and discrete hydrocarbon-water boundaries that typically define conventional reservoirs. These reservoirs generally require fracture stimulation treatments or other special recovery processes in order to achieve economic flow rates.
Undeveloped reserves - undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required. Reserves on undrilled acreage are limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence exists that establishes reasonable certainty of economic producibility at greater distances. Undrilled locations can be classified as having proved undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time. Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.
Unproved properties - properties with no proved reserves.
Wet gas - natural gas that contains significant heavy hydrocarbons, such as propane, butane and other liquid hydrocarbons.
Working interest - an interest that gives the owner the right to drill, produce and conduct operating activities on a property and receive a share of any production.





PART I : FINANCIAL INFORMATION
 
ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)Three Months Ended
(Unaudited)March 31,
Revenue and Other Operating Income:20242023
Natural Gas, NGLs and Oil Revenue$325,972 $455,639 
Gain on Commodity Derivative Instruments7,528 762,167 
Purchased Gas Revenue14,277 36,812 
Other Revenue and Operating Income36,776 21,359 
Total Revenue and Other Operating Income384,553 1,275,977 
Costs and Expenses:
Operating Expense
Lease Operating Expense17,726 16,474 
Production, Ad Valorem and Other Fees7,624 9,641 
Transportation, Gathering and Compression96,651 98,096 
Depreciation, Depletion and Amortization118,650 105,222 
Exploration and Production Related Other Costs2,312 5,104 
Purchased Gas Costs
13,584 34,347 
Selling, General, and Administrative Costs
37,671 36,576 
Other Operating Expense
24,633 15,139 
Total Operating Expense318,851 320,599 
Other Expense
Other (Income) Expense(5,399)1,168 
Loss (Gain) on Asset Sales and Abandonments, net20,296 (9,482)
Loss on Debt Extinguishment7,045  
Interest Expense37,441 35,736 
Total Other Expense59,383 27,422 
Total Costs and Expenses378,234 348,021 
Income Before Income Tax6,319 927,956 
Income Tax (Benefit) Expense(532)217,561 
Net Income$6,851 $710,395 
Earnings per Share
Basic $0.04 $4.22 
Diluted $0.04 $3.61 
Dividends Declared$ $ 









The accompanying notes are an integral part of these financial statements.

5


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 Three Months Ended
(Dollars in thousands)March 31,
(Unaudited)20242023
Net Income$6,851 $710,395 
Other Comprehensive Income:
  Actuarially Determined Long-Term Liability Adjustments (Net of tax: $(30), $(27))
81 72 
Comprehensive Income$6,932 $710,467 












































The accompanying notes are an integral part of these financial statements.

6


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
(Unaudited)
(Dollars in thousands)March 31,
2024
December 31,
2023
ASSETS
Current Assets:
Cash and Cash Equivalents$1,988 $443 
Accounts and Notes Receivable:
Trade, net91,093 116,119 
Other Receivables, net43,604 17,872 
Supplies Inventories14,368 19,846 
Derivative Instruments290,171 252,524 
Prepaid Expenses19,218 14,984 
Total Current Assets460,442 421,788 
Property, Plant and Equipment:
Property, Plant and Equipment12,662,876 12,537,118 
Less—Accumulated Depreciation, Depletion and Amortization5,301,316 5,194,485 
Total Property, Plant and Equipment—Net7,361,560 7,342,633 
Other Non-Current Assets:
Operating Lease Right-of-Use Assets125,821 139,466 
Derivative Instruments223,941 280,530 
Goodwill323,314 323,314 
Other Intangible Assets68,800 70,438 
Other92,764 48,488 
Total Other Non-Current Assets834,640 862,236 
TOTAL ASSETS$8,656,642 $8,626,657 

























The accompanying notes are an integral part of these financial statements.

7


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Unaudited)
(Dollars in thousands, except per share data)March 31,
2024
December 31,
2023
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable$163,016 $147,361 
Derivative Instruments117,400 61,102 
Current Portion of Finance Lease Obligations1,897 1,862 
Current Portion of Long-Term Debt326,187 325,668 
Current Portion of Operating Lease Obligations51,986 53,791 
Other Accrued Liabilities213,616 233,214 
Total Current Liabilities874,102 822,998 
Non-Current Liabilities:
Long-Term Debt1,942,508 1,888,706 
Finance Lease Obligations5,419 5,500 
Operating Lease Obligations77,162 89,531 
Derivative Instruments475,589 526,554 
Deferred Income Taxes724,643 729,454 
Asset Retirement Obligations105,527 105,315 
Other142,372 97,582 
Total Non-Current Liabilities3,473,220 3,442,642 
TOTAL LIABILITIES4,347,322 4,265,640 
Stockholders’ Equity:
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 153,275,909 Issued and Outstanding at March 31, 2024; 154,382,880 Issued and Outstanding at December 31, 2023
1,534 1,548 
Capital in Excess of Par Value2,373,114 2,384,910 
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding
  
Retained Earnings1,941,892 1,981,860 
Accumulated Other Comprehensive Loss(7,220)(7,301)
TOTAL STOCKHOLDERS' EQUITY4,309,320 4,361,017 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$8,656,642 $8,626,657 


















The accompanying notes are an integral part of these financial statements.

8


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands)Common StockCapital in
Excess
of Par
Value
Retained Earnings Accumulated Other Comprehensive LossTotal Equity
December 31, 2023$1,548 $2,384,910 $1,981,860 $(7,301)$4,361,017 
(Unaudited)
Net Income— — 6,851 — 6,851 
Issuance of Common Stock109 — — 109 
Purchase and Retirement of Common Stock(24)(19,269)(28,989)— (48,282)
Shares Withheld for Taxes— — (17,830)— (17,830)
Amortization of Stock-Based Compensation Awards10 7,364 — — 7,374 
Other Comprehensive Income— — — 81 81 
March 31, 2024$1,534 $2,373,114 $1,941,892 $(7,220)$4,309,320 
(Dollars in thousands)
December 31, 2022$1,712 $2,506,269 $448,993 $(6,513)$2,950,461 
(Unaudited)
Net Income— — 710,395 — 710,395 
Issuance of Common Stock1 609 — — 610 
Purchase and Retirement of Common Stock(59)(47,428)(46,049)— (93,536)
Shares Withheld for Taxes— — (9,344)— (9,344)
Amortization of Stock-Based Compensation Awards9 8,629 — — 8,638 
Other Comprehensive Income— — — 72 72 
March 31, 2023$1,663 $2,468,079 $1,103,995 $(6,441)$3,567,296 


























The accompanying notes are an integral part of these financial statements.

9


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)Three Months Ended
Dollars in ThousandsMarch 31,
Cash Flows from Operating Activities:20242023
Net Income$6,851 $710,395 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization118,650 105,222 
Amortization of Deferred Financing Costs2,399 2,297 
Stock-Based Compensation7,374 8,638 
Loss (Gain) on Asset Sales and Abandonments, net20,296 (9,482)
Loss on Debt Extinguishment7,045  
Gain on Commodity Derivative Instruments(7,528)(762,167)
Loss on Other Derivative Instruments1,211 961 
Net Cash Received (Paid) in Settlement of Commodity Derivative Instruments30,593 (140,005)
Deferred Income Taxes(4,841)217,349 
Other50 (114)
Changes in Operating Assets:
Accounts and Notes Receivable(821)210,383 
Supplies Inventories5,478 (2,183)
Prepaid Expenses(4,234)768 
Changes in Other Assets(45,367)(153)
Changes in Operating Liabilities:
Accounts Payable23,066 (19,242)
Accrued Interest(14,603)2,216 
Other Operating Liabilities(5,401)(75,792)
Changes in Other Liabilities44,847 (353)
Net Cash Provided by Operating Activities185,065 248,738 
Cash Flows from Investing Activities:
Capital Expenditures(168,184)(170,028)
Proceeds from Asset Sales8,524 10,517 
Net Cash Used in Investing Activities(159,660)(159,511)
Cash Flows from Financing Activities:
Payments on Long-Term Notes(356,504) 
Proceeds from CNXM Revolving Credit Facility Borrowings72,200 72,750 
Repayments of CNXM Revolving Credit Facility Borrowings(86,000)(90,450)
Proceeds from CNX Revolving Credit Facility Borrowings
341,400 460,400 
Repayments of CNX Revolving Credit Facility Borrowings(318,450)(446,600)
Proceeds from Issuance of CNX Senior Notes395,000  
Payments on Other Debt(487)(348)
Proceeds from Issuance of Common Stock109 610 
Shares Withheld for Taxes(17,830)(9,344)
Purchases of Common Stock(51,821)(94,759)
Debt Issuance and Financing Fees(1,477)(8)
Net Cash Used in Financing Activities(23,860)(107,749)
Net Increase (Decrease) in Cash and Cash Equivalents1,545 (18,522)
Cash and Cash Equivalents at Beginning of Period443 21,321 
Cash and Cash Equivalents at End of Period$1,988 $2,799 








The accompanying notes are an integral part of these financial statements.

10


CNX RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

NOTE 1—BASIS OF PRESENTATION:

The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, 2023 has been derived from the Audited Consolidated Financial Statements at that date but does not include all the notes required by generally accepted accounting principles for complete financial statements. For further information, refer to the Consolidated Financial Statements and related notes for the year ended December 31, 2023 included in CNX Resources Corporation's ("CNX," "CNX Resources," the "Company," "we," "us," or "our") Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC) on February 8, 2024.

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

Cash & Cash Equivalents

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term securities with original maturities of three months or less.

Receivables

As of March 31, 2024, and December 31, 2023, Accounts Receivable - Trade were $91,093 and $116,119, respectively, and Other Receivables were $43,604 and $17,872, respectively.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Management records an allowance for credit losses related to the collectability of third-party customers' receivables using the historical aging of the customer receivable balance. The collectability is determined based on past events, including historical experience, customer credit rating, as well as current market conditions. CNX monitors customer ratings and collectability on an on-going basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The following represents activity related to the allowance for credit losses for the three months ended:
March 31,
20242023
Allowance for Credit Losses - Trade, Beginning of Year$84 $84 
Provision for Expected Credit Losses  
Allowance for Credit Losses - Trade, End of Period$84 $84 
Allowance for Credit Losses - Other Receivables, Beginning of Year$2,847 $2,937 
Provision for Expected Credit Losses107 (46)
Allowance for Credit Losses - Other Receivables, End of Period$2,954 $2,891 


11


NOTE 2—EARNINGS PER SHARE:

Basic earnings per share is computed by dividing net income or net loss by the weighted average shares outstanding during the reporting period. Diluted earnings per share is computed similarly to basic earnings per share, except that the weighted average shares outstanding are increased to include, if dilutive, additional shares from stock options, restricted stock units, performance share units and shares issuable upon conversion of CNX's outstanding 2.25% convertible senior notes due May 2026 (the "Convertible Notes") (See Note 10 – Long-Term Debt). The number of additional shares is calculated by assuming that outstanding stock options were exercised, that outstanding restricted stock units and performance share units were released, that the shares that are issuable from the conversion of the Convertible Notes are issued (subject to the considerations discussed further in the paragraph below), and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period. In periods when CNX recognizes a net loss, the impact of outstanding stock awards and the potential share settlement impact related to CNX's Convertible Notes are excluded from the diluted loss per share calculation as their inclusion would have an anti-dilutive effect.

The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be anti-dilutive:
 For the Three Months Ended March 31,
 20242023
Anti-Dilutive Options 10,850 
Anti-Dilutive Restricted Stock Units402,929 484,301 
402,929 495,151 

The Convertible Notes, if converted by the holder, may be settled in cash, shares of the Company's common stock or a combination thereof, at the Company's election. The Company expects to settle the principal amount of the Convertible Notes in cash. Accounting Standards Update (“ASU”) 2020-06 - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") amended the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method (See Note 10 – Long-Term Debt for more information). The if-converted method assumes the conversion of convertible instruments occurs at the beginning of the reporting period and diluted weighted average shares outstanding includes the common shares issuable upon conversion of the convertible instruments. In periods where CNX recognizes net income, the conversion spread has a dilutive impact on diluted earnings per share when the average market price of the Company's common stock for a given period exceeds the initial conversion price of $12.84 per share for the Convertible Notes. In connection with the Convertible Notes' issuance, the Company entered into privately negotiated capped call transactions with certain counterparties (the "Capped Calls" and "Capped Call Transactions"), which were not included in calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

The Convertible Notes have been excluded from the computation of diluted earnings per share in the three months ended March 31, 2024 as the effect of including these shares in the calculation would have been anti-dilutive. In the three months ended March 31, 2023 the Convertible Notes were included in the computation of diluted income per share as the effect of including these shares in the calculation is dilutive. When the convertible notes are dilutive, interest on Convertible Notes, net of tax, is added back to net income in order to calculate diluted earnings available to shareholders.

The table below sets forth the potential common shares issuable upon conversion of the Convertible Notes that were excluded from the calculation of diluted earnings per share because their effect would be anti-dilutive:
For the Three Months Ended March 31,
20242023
Convertible Notes25,751,869 



12


The table below sets forth the share-based awards that have been exercised or released:
 For the Three Months Ended March 31,
 20242023
Options811,437 55,993 
Restricted Stock Units827,776 877,087 
Performance Share Units753,673 567,524 
2,392,886 1,500,604 

The computations for basic and diluted earnings per share are as follows:
For the Three Months Ended March 31,
 20242023
Net Income$6,851 $710,395 
Basic Earnings Available to Shareholders$6,851 $710,395 
Effect of Dilutive Securities:
Add Back Interest on Convertible Notes (Net of Tax)$ $1,432 
Diluted Earnings Available to Shareholders$6,851 $711,827 
Weighted-Average Shares of Common Stock Outstanding
153,364,652 168,452,107 
Effect of Diluted Shares:
Options1,144,414 1,033,194 
Restricted Stock Units1,021,583 970,567 
Performance Share Units621,072 937,137 
Convertible Notes 25,751,869 
Weighted-Average Diluted Shares of Common Stock Outstanding156,151,721 197,144,874 
Earnings per Share:
Basic$0.04 $4.22 
Diluted$0.04 $3.61 

NOTE 3—REVENUE FROM CONTRACTS WITH CUSTOMERS:

Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company has elected to exclude all taxes from the measurement of transaction price.

For natural gas, NGL and oil, and purchased gas revenue, the Company generally considers the delivery of each unit (MMBtu or Bbl) to be a separate performance obligation that is satisfied upon delivery. Payment terms for these contracts typically require payment within 25 days of the end of the calendar month in which the hydrocarbons are delivered. A significant number of these contracts contain variable consideration because the payment terms refer to market prices at future delivery dates. In these situations, the Company has not identified a standalone selling price because the terms of the variable payments relate specifically to the Company’s efforts to satisfy the performance obligations. A portion of the contracts contain fixed consideration (i.e., fixed price contracts or contracts with a fixed differential to NYMEX or index prices). The fixed consideration is allocated to each performance obligation on a relative standalone selling price basis. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price. Revenue associated with natural gas, NGL and oil as presented on the accompanying Consolidated Statements of Income represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others. When selling natural gas, NGL and oil on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis.



13


Included in Other Revenue and Operating Income in the Consolidated Statements of Income and in the below table are revenues generated from natural gas gathering services provided to third parties and sales of environmental attributes. The gas gathering services are interruptible in nature and include charges for the volume of gas actually gathered and do not guarantee access to the system. Volumetric based fees are based on actual volumes gathered. The Company generally considers the interruptible gathering of each unit (MMBtu) of natural gas as a separate performance obligation. Payment terms for these contracts typically require payment within 25 days of the end of the calendar month in which the hydrocarbons are gathered. All sales of environmental attributes (which includes items such as (but are not limited to): carbon credits, air quality credits, renewable or alternative energy credits, methane capture credits, methane performance certificates, emission reductions, offsets and/or allowances) are under short-term contracts, and revenue is recognized when the environmental attribute is transferred to a third party.

Disaggregation of Revenue

The following table is a disaggregation of revenue by major source:
For the Three Months Ended March 31,
20242023
Revenue from Contracts with Customers:
Natural Gas Revenue$279,237 $403,810 
NGL Revenue44,865 46,056 
Oil/Condensate Revenue1,870 5,773 
Total Natural Gas, NGL and Oil Revenue325,972 455,639 
Purchased Gas Revenue14,277 36,812 
Other Sources of Revenue and Other Operating Income:
Gain on Commodity Derivative Instruments7,528 762,167 
Other Revenue and Operating Income36,776 21,359 
Total Revenue and Other Operating Income$384,553 $1,275,977 

The disaggregated revenue information corresponds with the Company’s segment reporting found in Note 14 – Segment Information.

Contract Balances

CNX invoices its customers once a performance obligation has been satisfied, at which point payment is unconditional. Accordingly, CNX's contracts with customers do not give rise to material contract assets or liabilities under ASC 606. The Company has no contract assets recognized from the costs to obtain or fulfill a contract with a customer.

Transaction Price Allocated to Remaining Performance Obligations

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied. However, the guidance provides certain practical expedients that limit this requirement, including when variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a series.

A significant portion of CNX's natural gas, NGL and oil and purchased gas revenue is short-term in nature with a contract term of one year or less. For those contracts, CNX has utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

For revenue associated with contract terms greater than one year, a significant portion of the consideration in those contracts is variable in nature and the Company allocates the variable consideration in its contract entirely to each specific performance obligation to which it relates. Therefore, any remaining variable consideration in the transaction price is allocated entirely to wholly unsatisfied performance obligations. As such, the Company has not disclosed the value of unsatisfied performance obligations pursuant to the practical expedient.

14


For natural gas, NGL and oil revenue associated with contract terms greater than one year with a fixed price component, the aggregate amount of the transaction price allocated to remaining performance obligations was $24,247 as of March 31, 2024. The Company expects to recognize net revenue of $16,089 in the next 12 months and $5,532 over the following 12 months, with the remainder recognized thereafter.

For revenue associated with CNX's midstream contracts, which also have terms greater than one year, the interruptible gathering of each unit of natural gas represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required.

Prior-Period Performance Obligations

CNX records revenue in the month production is delivered to the purchaser. However, settlement statements for certain natural gas, NGL and oil revenue may not be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. CNX records the differences between the estimate and the actual amounts received in the month that payment is received from the purchaser. The Company has existing internal controls for its revenue estimation process and the related accruals, and any identified differences between its revenue estimates and the actual revenue received historically have not been significant. For each of the three months ended March 31, 2024 and 2023, revenue recognized in the current reporting period related to performance obligations satisfied in a prior reporting period was not material.

NOTE 4—ACQUISITIONS AND DISPOSITIONS:

Loss (Gain) on Asset Sales and Abandonments, net in the Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 and Proceeds from Asset Sales in the Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 include the sale of various non-core assets (rights-of-way, surface acreage and other non-core oil and gas interests and assets). Included in Loss on Assets Sales and Abandonments for the three months ended March 31, 2024 was the sale of a non-core pipeline to a third-party for a loss of $26,265. Net Cash proceeds of $2,001 related to the sale are included in Proceeds from Asset Sales.

NOTE 5—INCOME TAXES:

The effective tax rates for the three months ended March 31, 2024 and 2023 were (8.4)% and 23.4%, respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 differs from the U.S. federal statutory rate of 21.0% primarily due to the impact of equity compensation, federal tax credits and state taxes.

The total amount of uncertain tax positions at March 31, 2024 and December 31, 2023 was $105,250 and $99,918, respectively. If these uncertain tax positions were recognized, approximately $105,250 and $99,918 would affect CNX's effective tax rate at March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024, CNX recognized an increase in unrecognized tax benefits of $5,332 resulting from tax positions related to federal tax credits that the Company anticipates taking on its 2024 federal tax return.

CNX recognizes accrued interest and penalties related to uncertain tax positions in interest expense and income tax expense, respectively. As of March 31, 2024 and December 31, 2023, CNX had no accrued liabilities for interest and penalties related to uncertain tax positions.

CNX and its subsidiaries file federal income tax returns with the United States and tax returns within various states. With few exceptions, the Company is no longer subject to United States federal, state, local, or non-U.S. income tax examinations by tax authorities for the years before 2020.


15


NOTE 6—PROPERTY, PLANT AND EQUIPMENT:
March 31,
2024
December 31,
2023
Intangible Drilling Cost$5,988,091 $5,902,498 
Gas Gathering Equipment2,622,296 2,631,110 
Gas Wells and Related Equipment1,553,256 1,513,945 
Proved Gas Properties1,380,126 1,374,685 
Unproved Gas Properties724,281 724,401 
Surface Land and Other Equipment186,987 187,316 
Other207,839 203,163 
Total Property, Plant and Equipment12,662,876 12,537,118 
Less: Accumulated Depreciation, Depletion and Amortization5,301,316 5,194,485 
Total Property, Plant and Equipment - Net$7,361,560 $7,342,633 

NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS:

Goodwill:

All goodwill is attributed to the Midstream reporting unit within the Shale segment. Goodwill is evaluated for impairment at least annually and whenever events or changes in circumstance indicate that the fair value of a reporting unit is less than its carrying amount.

The accumulated impairment loss on goodwill is $473,045, resulting in a carrying value of $323,314 at both March 31, 2024 and December 31, 2023.

Other Intangible Assets:

The carrying amount and accumulated amortization of other intangible assets consist of the following:
March 31,
2024
December 31,
2023
Other Intangible Assets:
Gross Amortizable Asset - Customer Relationships $109,752 $109,752 
Less: Accumulated Amortization - Customer Relationships40,952 39,314 
Total Other Intangible Assets, net$68,800 $70,438 

The customer relationship intangible asset is being amortized on a straight-line basis over approximately 17 years. Amortization expense related to other intangible assets was $1,638 for both the three months ended March 31, 2024 and 2023. The estimated annual amortization expense is expected to approximate $6,552 per year for each of the next five years.

NOTE 8—REVOLVING CREDIT FACILITIES:
CNX:
On each of May 10, 2023 and May 5, 2022, CNX amended its Third Amended and Restated Credit Agreement dated October 6, 2021 (as amended, the "CNX Credit Agreement"), which provides for a senior secured revolving credit facility (the "CNX Credit Facility"). In 2022, revisions were made to replace LIBOR as a benchmark interest rate with SOFR, or the secured overnight financing rate. In 2023, the elected commitments of the CNX Credit Agreement were increased from $1,300,000 to $1,350,000. Following the amendments, CNX remains the borrower and certain of its subsidiaries (not including CNX Midstream Partners LP (CNXM), its subsidiaries or general partner) as guarantor loan parties on the CNX Credit Agreement. The CNX Credit Agreement replaced the prior CNX revolving credit facility and remains subject to semi-annual redetermination. The CNX Credit Agreement has a $2,250,000 borrowing base and $1,350,000 in elected commitments, including borrowings and letters of credit. The CNX Credit Agreement matures on October 6, 2026, provided that if at any time on or after January 30, 2026 availability under the CNX Credit Agreement minus the aggregate principal amount of any and all such outstanding Convertible Notes is less than 20% of the aggregate commitments under the CNX Credit Agreement (the first such date, the "Springing Maturity Date"), then the CNX Credit Agreement will mature on the Springing Maturity Date.

16


In addition to refinancing all outstanding amounts under the prior CNX revolving credit facility, borrowings under the CNX Credit Agreement may be used by CNX for general corporate purposes.

Under the terms of the CNX Credit Agreement, borrowings will bear interest at CNX's option at either:

the highest of (i) PNC Bank, National Association’s prime rate, (ii) the federal funds open rate plus 0.50%, and (iii) the one-month SOFR rate plus 1.0%, in each case, plus a margin ranging from 0.75% to 1.75%; or
the one-month SOFR rate plus a margin ranging from 1.85% to 2.85%.

The availability under the CNX Credit Agreement, including availability for letters of credit, is generally limited to a borrowing base, which is determined by the required number of lenders in good faith by calculating a loan value of the Company’s proved reserves.

The CNX Credit Agreement also requires that CNX maintain a maximum net leverage ratio of no greater than 3.50 to 1.00, which is calculated as the ratio of debt less cash on hand to consolidated EBITDA, measured quarterly. CNX must also maintain a minimum current ratio of no less than 1.00 to 1.00, which is calculated as the ratio of current assets, plus revolver availability, to current liabilities, excluding derivative asset/liability position, and convertible note liability until one year prior to maturity, and borrowings under the revolver, measured quarterly. The calculation of all of the ratios excludes CNXM, its subsidiaries, and its general partner. CNX was in compliance with all financial covenants as of March 31, 2024.

At March 31, 2024, the CNX Credit Agreement had $75,000 of borrowings outstanding, with a weighted average interest rate of 7.18% and $43,603 of letters of credit outstanding, leaving $1,231,397 of unused capacity. At December 31, 2023, the CNX Credit Agreement had $52,050 borrowings outstanding, with a weighted average interest rate of 7.64% and $43,684 of letters of credit outstanding, leaving $1,254,266 of unused capacity.

CNXM:
On May 5, 2022, CNXM amended its Amended and Restated Credit Agreement dated October 6, 2021 (as amended, the "CNXM Credit Agreement"), which provides for a $600,000 senior secured revolving credit facility ("CNXM Credit Facility") that matures on October 6, 2026. Revisions were made to replace LIBOR as a benchmark interest rate with SOFR. CNXM remains the borrower and certain of its subsidiaries remain as guarantor loan parties on the CNXM Credit Agreement. The CNXM Credit Agreement replaced the prior CNXM revolving credit facility and is not subject to semi-annual redetermination. CNX is not a guarantor under the CNXM Credit Agreement.
In addition to refinancing all outstanding amounts under the prior CNXM revolving credit facility, borrowings under the CNXM Credit Agreement may be used by CNXM for general corporate purposes.

Interest on outstanding indebtedness under the CNXM Credit Agreement currently accrues, at CNXM's option, at a rate based on either:
the highest of (i) PNC Bank, National Association’s prime rate, (ii) the federal funds open rate plus 0.50%, and (iii) the one-month SOFR rate plus 1.0%, in each case, plus a margin ranging from 1.00% to 2.00%; or
the one-month SOFR rate plus a margin ranging from 2.10% to 3.10%.

In addition, CNXM is obligated to maintain at the end of each fiscal quarter (x) a maximum net leverage ratio of no greater than between 5.00 to 1.00 (ranging to no greater than 5.25 to 1.00 in certain circumstances); (y) a maximum secured leverage ratio of no greater than 3.25 to 1.00; and (z) a minimum interest coverage ratio of no less than 2.50 to 1.00; in each case as calculated in accordance with the terms and definitions determining such ratios contained in the CNXM Credit Agreement. CNXM was in compliance with all financial covenants as of March 31, 2024.

At March 31, 2024, the CNXM Credit Agreement had $91,350 of borrowings outstanding, with a weighted average interest rate of 7.46% and no letters of credit outstanding, leaving $508,650 of unused capacity. At December 31, 2023, the CNXM Credit Agreement had $105,150 of borrowings outstanding, with a weighted average interest rate of 7.50%, and no letters of credit outstanding, leaving $494,850 of unused capacity.


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NOTE 9—OTHER ACCRUED LIABILITIES:
March 31,
2024
December 31,
2023
Royalties$88,011 $100,847 
Accrued Interest29,624 44,227 
Transportation Charges21,854 17,824 
Deferred Revenue16,475 15,831 
Accrued Other Taxes12,739 9,343 
Accrued Payroll & Benefits6,862 6,619 
Short-Term Incentive Compensation3,333 10,961 
Purchased Gas Payable84 1,002 
Other24,827 16,777 
Current Portion of Long-Term Liabilities:
Asset Retirement Obligations7,897 7,897 
Salary Retirement1,910 1,886 
Total Other Accrued Liabilities$213,616 $233,214 

NOTE 10—LONG-TERM DEBT:
March 31,
2024
December 31,
2023
Senior Notes due January 2029 at 6.00%, Issued at Par Value
$500,000 $500,000 
Senior Notes due January 2031 at 7.375% (Principal of $500,000 less Unamortized Discount of $5,119 and $5,308, respectively)
494,881 494,692 
CNX Midstream Partners LP Senior Notes due April 2030 at 4.75% (Principal of $400,000 less Unamortized Discount of $3,510 and $3,654, respectively)*
396,490 396,346 
Senior Notes due March 2032 at 7.25% (Principal of $400,000 less Unamortized Discount of $4,948)
395,052  
Convertible Senior Notes due May 2026 at 2.25% (Principal of $330,654 less Unamortized Discount and Issuance Costs of $4,109 and $4,586, respectively)
326,545 326,068 
CNX Midstream Partners LP Revolving Credit Facility*91,350 105,150 
CNX Revolving Credit Facility75,000 52,050 
Senior Notes due March 2027 at 7.25% (Principal of $350,000 plus Unamortized Premium of $1,728)
 351,728 
Less: Unamortized Debt Issuance Costs10,623 11,660 
2,268,695 2,214,374 
Less: Current Portion326,187 325,668 
Long-Term Debt$1,942,508 $1,888,706 
*CNX is not a guarantor of CNXM's 4.75% Senior Notes due April 2030 or CNXM's Credit Facility.

During the three months ended March 31, 2024, CNX completed a private offering of $400,000 aggregate principal amount of 7.25% CNX Senior Notes due March 2032 (the "CNX Senior Notes due March 2032") less an unamortized discount of $5,000. The CNX Senior Notes due March 2032, along with the related guarantees, were issued pursuant to an indenture dated February 23, 2024 and accrue interest from February 23, 2024 at a rate of 7.25% per year. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2024. The CNX Senior Notes due March 2032 mature on March 1, 2032. Payment of the principal and interest on the notes is guaranteed by most of CNX’s subsidiaries but does not include CNXM (or its subsidiaries or general partner).

During the three months ended March 31, 2024, CNX purchased and retired $350,000 of its outstanding 7.25% Senior Notes due March 2027. As part of the transaction, a loss of $7,045 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income during the three months ended March 31, 2024.

In April 2020, CNX issued $345,000 in aggregate principal amount of Convertible Notes due May 2026 ("Convertible Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, including $45,000 aggregate principal amount of Convertible Notes issued pursuant to the exercise in full of the

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initial purchasers’ option to purchase additional Convertible Notes. The Convertible Notes are senior, unsecured obligations of the Company. The Convertible Notes bear interest at a fixed rate of 2.25% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on November 1, 2020. Proceeds from the issuance of the Convertible Notes totaled $334,650, net of initial purchaser discounts and issuance costs. The Convertible Notes are guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner).

The initial conversion rate is 77.8816 shares of CNX's common stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $12.84 per share, subject to adjustment upon the occurrence of specified events.

The Convertible Notes will mature on May 1, 2026, unless earlier repurchased, redeemed or converted. Before February 1, 2026, note holders will have the right to convert their Convertible Notes only upon the occurrence of the following events:

during any calendar quarter (and only during such calendar quarter) commencing after June 30, 2020, if the Last Reported Sale Price per share of Common Stock exceeds one hundred and thirty percent (130%) of the Conversion Price for each of at least twenty (20) Trading Days (whether or not consecutive) during the thirty (30) consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter;
during the five (5) consecutive Business Days immediately after any ten (10) consecutive trading day period (such ten (10) consecutive Trading Day period, the "Measurement Period") if the trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance with the procedures set forth in the indenture, for each trading day of the Measurement Period was less than ninety eight percent (98%) of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day;
if CNX calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
upon the occurrence of certain specified corporate events as set forth in the indenture governing the Convertible Notes.

From and after February 1, 2026, note holders may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the Convertible Notes. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the indenture governing the Convertible Notes. In addition, following certain corporate events, as described in the indenture governing the Convertible Notes, that occur prior to the maturity date, the Company will increase the conversion rate, in certain circumstances, for a holder who elects to convert its Convertible Notes in connection with such a corporate event.

The Company’s current intent is to settle the principal amount of the Convertible Notes in cash upon conversion.
If certain corporate events that constitute a “Fundamental Change” (as defined in the indenture governing the Convertible Notes) occur, then noteholders may require the Company to repurchase their Convertible Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

Pursuant to the terms of the Convertible Notes indenture, the Sale Price per share of Common Stock condition for conversion of the Convertible Notes was satisfied as of March 31, 2024, and, accordingly, holders of Convertible Notes are permitted to convert any of their Convertible Notes, at their option, at any time during the quarter beginning on April 1, 2024 and ending on June 30, 2024, subject to all terms and conditions set forth in the Convertible Notes indenture. The Convertible Notes are therefore classified as short-term debt at March 31, 2024.

The reported interest expense for the Convertible Notes is equal to the 2.25% cash coupon rate. Also, the Company uses the if-converted method for the assumed conversion of the Convertible Notes when calculating diluted earnings per share.

In accounting for the debt issuance costs of $10,350, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds of the Convertible Notes. Issuance costs attributable to the liability component were $7,024 and were being amortized to interest expense using the effective interest method over the contractual term of the Convertible Notes. Issuance costs attributable to the equity component were $3,326 and were netted with the equity component in Capital in Excess of Par Value in the Consolidated Statement of Stockholders Equity.

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The net carrying amount of the liability and equity components of the Convertible Notes was as follows:
March 31,
2024
December 31,
2023
Liability Component:
Principal$330,654 $330,654 
Unamortized Issuance Costs(4,109)(4,586)
Net Carrying Amount$326,545 $326,068 
Fair Value$625,802 $537,465 
Fair Value HierarchyLevel 2Level 2

Interest expense related to the Convertible Notes is as follows:
For the Three Months Ended March 31,
20242023
Contractual Interest Expense $1,860 $1,860 
Amortization of Issuance Costs477 463 
Total Interest Expense $2,337 $2,323 

In connection with the offering of the Convertible Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the "Capped Calls"). The Capped Calls each have an initial strike price of $12.84 per share, subject to certain adjustments, which correspond to the initial conversion price of the Convertible Notes. The Capped Calls have an initial cap price of $18.19 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the Convertible Notes, and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions. The conditions that cause adjustments to the initial strike price of the Capped Calls mirror the conditions that result in corresponding adjustments for the Convertible Notes. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Convertible Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $35,673 incurred in connection with the Capped Calls was recorded as a reduction to Capital in Excess of Par Value.

NOTE 11—COMMITMENTS AND CONTINGENT LIABILITIES:
CNX and its subsidiaries are subject to various lawsuits and claims with respect to such matters as personal injury, royalty accounting, damage to property, climate change, governmental regulations including environmental violations and remediation, employment and contract disputes and other claims and actions arising out of the normal course of business. CNX accrues the estimated loss for these lawsuits and claims when the loss is probable and can be estimated. The Company's current estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of CNX. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the financial position, results of operations or cash flows of CNX; however, such amounts cannot be reasonably estimated.
The 1992 Coal Industry Retiree Health Benefit Act ("Coal Act"), in Section 9711, requires coal companies that were providing health benefits to United Mine Workers of America ("UMWA") retirees as of February 1993 to continue providing health benefits to such individuals, in substantially the same coverages, for as long as the last signatory operator remains in business. Section 9711 also requires any "related person" to be joint and severally liable for the provision of these health benefits. On May 1, 2020, the court in the Murray Energy Corporation ("Murray") bankruptcy proceedings approved a settlement agreement between Murray and the UMWA that transferred to the UMWA 1992 Benefit Plan the Coal Act liabilities for retirees in Murray’s Section 9711 plan. The retirees transferred by Murray to the 1992 Benefit Plan include approximately 2,159 retirees allegedly traced to the December 2013 sale by CONSOL Energy Inc. to Murray Energy of the following possible last signatory operators: Consolidation Coal Company, McElroy Coal Company, Southern Ohio Coal Company, Central Ohio Coal Company, Keystone Coal Mining Corp., and Eighty-Four Mining Company (the "Sold Subsidiaries"). On May 2, 2020, the Trustees of the UMWA 1992 Benefit Plan sued CNX and CONSOL Energy Inc. ("CONSOL'") in federal court contending that the Sold Subsidiaries were last signatory operators and that CNX and CONSOL are related persons to the Sold Subsidiaries

20


and, as such, CNX and CONSOL are jointly and severally liable for the Coal Act health benefits allegedly owed to the eligible retirees traced to the Sold Subsidiaries. The 1992 Benefit Plan seeks, among other relief, a declaration that CNX and CONSOL are obligated to enroll the eligible retirees attributed to the Sold Subsidiaries in a Section 9711 plan; that CNX and CONSOL are liable to post the security required by Section 9712; and, that CNX and CONSOL are liable to pay per beneficiary premiums until the eligible retirees are enrolled in a Section 9711 plan, and other fees, costs and disbursements under the Coal Act. On March 29, 2022, the Court denied the Defendants’ Motions to Dismiss and we are now defending this action on the merits. Further, under the Separation and Distribution Agreement that was entered into at the time we spun-out our coal business in 2017, CONSOL agreed to indemnify CNX for all coal-related liabilities, including this lawsuit. With respect to this matter, although a loss is possible, it is not probable, and accordingly no accrual has been recognized.

On July 22, 2021, CNX received a letter from the UMWA 1974 Pension Plan ("1974 Plan") requesting information related to the facts and circumstances surrounding the 2013 sale of certain of its coal subsidiaries to Murray Energy. The letter indicated that litigation related to potential withdrawal liabilities from the plan created by the 2019 bankruptcy of Murray Energy was reasonably foreseeable and at that time, no liability had been assessed. The 1974 Plan never issued an assessment to CNX. Following a period of discovery, CNX and the 1974 Plan mediated the claim in February 2024. By Agreement dated March 4, 2024, CNX settled the 1974 Plan claim for $75,000 which is payable over five-years. Under the Separation and Distribution Agreement (“SDA”) that was entered into at the time we spun-out our coal business in 2017, CONSOL Energy (“CONSOL”) became successor-in-interest to the “Coal Business” and accepted and agreed to assume and be responsible for all “Coal Liabilities.” The assumed “Coal Liabilities” are defined broadly in the SDA and specifically include claims, like the 1974 Plan claim, arising under ERISA; involving contributions or other obligations pursuant to any Benefits Plan; and any withdraw liabilities. CONSOL also unequivocally agreed to defend and indemnify CNX for all liabilities relating to, arising out of or resulting from any “Coal Liabilities.” CNX timely tendered the 1974 Plan claim to CONSOL for defense and indemnity in July 2021, which it denied. CNX continued to demand indemnity from CONSOL including prior to, during and after the March 2024 mediation. After CONSOL repudiated its contractual obligations to CNX, and after having timely fulfilled all SDA prerequisites for bringing the action, on March 7, 2024, CNX sued CONSOL for breach of contract seeking an order requiring CONSOL to indemnify CNX for the 1974 Plan claim settlement. CNX has determined that a loss is probable and that the amount of loss can be reasonably estimated. CNX also concluded that it is probable under the terms of the SDA and under the relevant law as it currently exists, it is fully entitled to be indemnified and seek recovery from CONSOL. As a result, the present value of the $75,000 settlement was recognized in Other Liabilities in the Consolidated Balance Sheets as of March 31, 2024, with the current portion recognized in Other Accrued Liabilities. A corresponding receivable was recognized in Other Non-Current assets in the Consolidated Balance Sheets as of March 31, 2024, with the current portion recognized in Other Receivables. These balances may be adjusted from time to time, as appropriate, to reflect changes in circumstances.

At March 31, 2024, CNX has provided the following financial guarantees, unconditional purchase obligations, and letters of credit to certain third parties as described by major category in the following tables. These amounts represent the maximum potential of total future payments that the Company could be required to make under these instruments. These amounts have not been reduced for potential recoveries under recourse or collateralization provisions. Generally, recoveries under reclamation bonds would be limited to the extent of the work performed at the time of the default. No amounts related to these unconditional purchase obligations and letters of credit are recorded as liabilities in the financial statements. CNX management believes that the commitments in the following table will expire without being funded, and therefore will not have a material adverse effect on CNX's financial condition.
 Amount of Commitment Expiration Per Period
 Total
Amounts
Committed
Less Than
1 Year
1-3 Years3-5 YearsBeyond
5 Years
Letters of Credit:
Firm Transportation$40,331 $40,331 $ $ $ 
Other3,272 3,272    
Total Letters of Credit43,603 43,603    
Surety Bonds:
Employee-Related2,250 2,250    
Environmental11,449 11,349 100   
Firm Transportation126,336 126,336    
Financial Guarantees72,720 72,720    
Other8,818 8,314 504   
Total Surety Bonds221,573 220,969 604   
Total Commitments$265,176 $264,572 $604 $ $ 


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Excluded from the above table are commitments and guarantees entered into in conjunction with the spin-off of the Company's coal business in November 2017. Although CONSOL has agreed to indemnify CNX to the extent that CNX would be called upon to pay any of these liabilities, there is no assurance that CONSOL will satisfy its obligations to indemnify CNX in the event that CNX is so called upon (See "Item 1A. Risk Factors" in CNX's 2023 Annual Report on Form 10-K as filed with the SEC on February 8, 2024 ("2023 Form 10-K") for additional information).

CNX enters into long-term unconditional purchase obligations to procure major equipment purchases, natural gas firm transportation, gas drilling services and other operating goods and services. These purchase obligations are not recorded in the Consolidated Balance Sheets. As of March 31, 2024, the purchase obligations for each of the next five years and beyond are as follows:

Obligations DueAmount
Less than 1 year$239,479 
1 - 3 years434,905 
3 - 5 years351,324 
More than 5 years551,023 
Total Purchase Obligations$1,576,731 

NOTE 12—DERIVATIVE INSTRUMENTS:

CNX enters into interest rate swap agreements to manage its exposure to interest rate volatility. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. The change in fair value of the interest rate swap agreements is accounted for on a mark-to-market basis with the changes in fair value recorded in current period earnings.

In March 2020, CNX entered into an interest rate swap agreement, inclusive of a put option at zero basis points, related to $160,000 of borrowings under the CNX Credit Facility which has the economic effect of modifying the variable-interest obligation into a fixed-interest obligation over a four-year period.

In March 2020, CNX entered into a four-year interest rate swap related to an additional $250,000 of borrowings under the CNX Credit Facility, inclusive of a put option at zero basis points, effective April 3, 2020. In December 2020, CNX executed an offsetting $250,000 interest rate swap, effective immediately, which expires in April 2024. Consistent with the previous interest rate swap agreements, the $250,000 interest rate swaps were entered into to manage CNX's exposure to interest rate volatility.

CNX enters into financial derivative instruments (over-the-counter swaps) to manage its exposure to natural gas and NGL price fluctuations. Commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

CNX is exposed to credit risk in the event of non-performance by counterparties. The creditworthiness of counterparties is subject to continuing review. The Company has not experienced any issues of non-performance by derivative counterparties.

None of the Company's counterparty master agreements currently require CNX to post collateral for any of its positions. However, as stated in the applicable counterparty master agreements, if CNX's obligations with one of its counterparties cease to be secured on the same basis as similar obligations with the other lenders under the credit facility, CNX would have to post collateral for instruments in a liability position in excess of defined thresholds. All of the Company's derivative instruments are subject to master netting arrangements with our counterparties. CNX recognizes all financial derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets on a gross basis.
 
Each of the Company's counterparty master agreements allows, in the event of default, the ability to elect early termination of outstanding contracts. If early termination is elected, CNX and the applicable counterparty would net settle all open hedge positions.


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The total notional amounts of CNX's derivative instruments were as follows:
March 31,December 31,Forecasted to
20242023Settle Through
Natural Gas Commodity Swaps (Bcf)1,245.6 1,349.2 2027
Natural Gas Basis Swaps (Bcf)710.6 760.3 2027
NGL Commodity Swaps (Mbbls)1,131.581.02025
Interest Rate Swaps$410,000 $410,000 2024

The gross fair value of CNX's derivative instruments was as follows:
March 31, December 31,
20242023
Current Assets:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$252,205 $168,532 
     NGL Commodity Swaps192 1,003 
     Natural Gas Basis Swaps36,800 77,540 
  Interest Rate Swaps974 5,449 
Total Current Assets$290,171 $252,524 
Other Non-Current Assets:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$145,589 $166,701 
     Natural Gas Basis Swaps78,352 113,829 
  Interest Rate Swaps  
Total Other Non-Current Assets$223,941 $280,530 
Current Liabilities:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$84,663 $47,279 
     NGL Commodity Swaps1,075  
     Natural Gas Basis Swaps30,577 9,473 
  Interest Rate Swaps1,085 4,350 
Total Current Liabilities$117,400 $61,102 
Non-Current Liabilities:
  Commodity Derivative Instruments:
     Natural Gas Commodity Swaps$429,198 $484,357 
     Natural Gas Basis Swaps46,391 42,197 
  Interest Rate Swaps  
Total Non-Current Liabilities$475,589 $526,554 










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The effect of commodity derivative instruments on the Company's Consolidated Statements of Income was as follows:
For the Three Months Ended
March 31,
20242023
Realized Gain (Loss) on Commodity Derivative Instruments:
Natural Gas Commodity Swaps$60,309 $(49,926)
Natural Gas Basis Swaps(5,720)(11,106)
NGL Commodity Swaps64  
Total Realized Gain (Loss) on Commodity Derivative Instruments54,653 *(61,032)**
Unrealized Gain (Loss) on Commodity Derivative Instruments:
Natural Gas Commodity Swaps50,513 980,836 
Natural Gas Basis Swaps(95,921)(158,235)
NGL Commodity Swaps(1,717)598 
Total Unrealized (Loss) Gain on Commodity Derivative Instruments(47,125)823,199 
Gain on Commodity Derivative Instruments:
Natural Gas Commodity Swaps110,822 930,910 
Natural Gas Basis Swaps(101,641)(169,341)
NGL Commodity Swaps(1,653)598 
Total Gain on Commodity Derivative Instruments$7,528 $762,167 
*Includes $30,170 of commodity derivatives that have been settled but not received and $270 that have been settled but not paid at March 31, 2024, and excludes $6,741 of commodity derivatives that were settled but not received and $900 that were settled but not paid at December 31, 2023.
**Includes $1,311 of commodity derivatives that have been settled but not received at March 31, 2023 and excludes $77,662 of commodity derivatives that were settled but not paid at December 31, 2022.

The effect of interest rate swaps on Interest Expense in the Company's Consolidated Statements of Income was as follows:
For the Three Months Ended
March 31,
20242023
Cash Received in Settlement of Interest Rate Swaps$1,215 $799 
Unrealized Loss on Interest Rate Swaps(1,211)(960)
Gain (Loss) on Interest Rate Swaps$4 $(161)

The Company also enters into fixed price natural gas sales agreements that are satisfied by physical delivery. These physical commodity contracts qualify for the normal purchases and normal sales exception and are not subject to derivative instrument accounting.

NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS:

CNX determines the fair value of assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. The fair value hierarchy is based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources (including NYMEX forward curves, LIBOR and SOFR-based discount rates and basis forward curves), while unobservable inputs reflect the Company's own assumptions of what market participants would use.
The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below:
Level 1 - Quoted prices for identical instruments in active markets.

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Level 2 - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including NYMEX forward curves, LIBOR and SOFR-based discount rates and basis forward curves.
Level 3 - Unobservable inputs significant to the fair value measurement supported by little or no market activity.
In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.
The financial instruments measured at fair value on a recurring basis are summarized below:
 Fair Value Measurements at March 31, 2024Fair Value Measurements at December 31, 2023
DescriptionLevel 1Level 2Level 3Level 1Level 2Level 3
Commodity Derivatives$ $(78,766)*$ $ $(55,701)**$ 
Interest Rate Swaps$ $(111)$ $ $1,099 $ 
*Includes $30,170 of commodity derivatives that have been settled but not received and $270 that have been settled but not paid at March 31, 2024.
**Includes $6,741 of commodity derivatives that have been settled but not received and $900 that have been settled but not paid at December 31, 2023.

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:
 March 31, 2024December 31, 2023
 Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Cash and Cash Equivalents $1,988 $1,988 $443 $443 
Long-Term Debt (Excluding Debt Issuance Costs)$2,279,318 $2,541,378 $2,226,034 $2,376,594 
Cash and cash equivalents represent highly-liquid instruments and constitute Level 1 fair value measurements. Certain of the Company’s debt is actively traded on a public market and, as a result, constitute Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitute Level 2 fair value measurements.

NOTE 14—SEGMENT INFORMATION:
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments.
The Company evaluates the performance of its reportable segments based on total revenue and other operating income and operating expenses directly attributable to that segment. Certain expenses are managed outside the reportable segments and therefore are not allocated. These expenses include, but are not limited to, interest expense and other corporate expenses such as selling, general and administrative costs.
CNX's principal activity is to produce pipeline quality natural gas for sale primarily to gas wholesalers and the Company has two reportable segments that conduct those operations: Shale and Coalbed Methane. The Other Segment includes nominal shallow oil and gas production which is not significant to the Company. It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, exploration and production related other costs, New Technologies, as well as various other expenses that are managed outside the reportable segments as discussed above. Operating profit for each segment is based on sales less identifiable operating and non-operating expenses.

25


Industry segment results for the three months ended March 31, 2024 are:
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGLs and Oil Revenue$292,762 $32,863 $347 $325,972 (A)
Purchased Gas Revenue  14,277 14,277   
Gain (Loss) on Commodity Derivative Instruments 50,779 3,846 (47,097)7,528 
Other Revenue and Operating Income15,894  20,882 36,776 (B)
Total Revenue and Other Operating Income (Loss)$359,435 $36,709 $(11,591)$384,553   
Total Operating Expense$198,106 $37,004 $83,741 $318,851 
Earnings (Loss) Before Income Tax$161,329 $(295)$(154,715)$6,319 
Segment Assets$6,667,562 $939,781 $1,049,299 $8,656,642 (C)
Depreciation, Depletion and Amortization$99,476 $14,273 $4,901 $118,650   
Capital Expenditures$152,874 $8,668 $6,642 $168,184   

(A)    Included in Natural Gas, NGLs and Oil Revenue are sales of $42,909 to NRG Business Marketing LLC (formerly Direct Energy Business Marketing LLC), which comprises over 10% of revenue from contracts with external customers for the period.
(B)    Includes midstream revenue of $15,894 and equity in loss of unconsolidated affiliates of $250 for Shale and Other, respectively. Other also includes sales of environmental attributes of $12,769.
(C)    Other includes investments in unconsolidated equity affiliates of $13,631.


Industry segment results for the three months ended March 31, 2023 are:
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGLs and Oil Revenue$407,198 $48,036 $405 $455,639 (D)
Purchased Gas Revenue  36,812 36,812   
(Loss) Gain on Commodity Derivative Instruments (56,336)(4,672)823,175 762,167 
Other Revenue and Operating Income16,754  4,605 21,359 (E)
Total Revenue and Other Operating Income $367,616 $43,364 $864,997 $1,275,977   
Total Operating Expense$188,117 $36,420 $96,062 $320,599 
Earnings Before Income Tax$179,499 $6,944 $741,513 $927,956 
Segment Assets$6,536,697 $955,280 $848,168 $8,340,145 (F)
Depreciation, Depletion and Amortization$88,110 $12,447 $4,665 $105,222   
Capital Expenditures$159,349 $9,459 $1,220 $170,028   

(D)    Included in Natural Gas, NGLs and Oil Revenue are sales of $55,101 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period.
(E)    Includes midstream revenue of $16,754 and equity in earnings of unconsolidated affiliates of $114 for Shale and Other, respectively.
(F)    Other includes investments in unconsolidated equity affiliates of $11,828.

Reconciliation of Segment Information to Consolidated Amounts:

Revenue and Other Operating Income
For the Three Months Ended March 31,
20242023
Total Segment Revenue from Contracts with External Customers$356,143 $509,205 
Gain on Commodity Derivative Instruments7,528 762,167 
Other Operating Income20,882 4,605 
Total Consolidated Revenue and Other Operating Income $384,553 $1,275,977 

NOTE 15—