10-Q 1 cnx-20220331.htm 10-Q cnx-20220331
false2022Q1true12/310001070412http://fasb.org/us-gaap/2021-01-31#AccountingStandardsUpdate202006Member1100010704122022-01-012022-03-310001070412us-gaap:CommonStockMember2022-01-012022-03-310001070412cnx:PreferredSharePurchaseRightsMember2022-01-012022-03-3100010704122022-04-18xbrli:shares0001070412us-gaap:OilAndGasServiceMember2022-01-012022-03-31iso4217:USD0001070412us-gaap:OilAndGasServiceMember2021-01-012021-03-3100010704122021-01-012021-03-310001070412us-gaap:OilAndGasPurchasedMember2022-01-012022-03-310001070412us-gaap:OilAndGasPurchasedMember2021-01-012021-03-310001070412us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2022-01-012022-03-310001070412us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2021-01-012021-03-310001070412us-gaap:OilAndGasExplorationAndProductionMember2022-01-012022-03-310001070412us-gaap:OilAndGasExplorationAndProductionMember2021-01-012021-03-31iso4217:USDxbrli:shares0001070412cnx:AdjustmentForActuariallyDeterminedLiabilitiesMember2022-01-012022-03-310001070412cnx:AdjustmentForActuariallyDeterminedLiabilitiesMember2021-01-012021-03-3100010704122022-03-3100010704122021-12-310001070412us-gaap:CommonStockMember2021-12-310001070412us-gaap:AdditionalPaidInCapitalMember2021-12-310001070412us-gaap:RetainedEarningsMember2021-12-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001070412us-gaap:RetainedEarningsMember2022-01-012022-03-310001070412us-gaap:CommonStockMember2022-01-012022-03-310001070412us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-3100010704122021-01-012021-12-310001070412us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001070412us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001070412srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001070412us-gaap:CommonStockMember2022-03-310001070412us-gaap:AdditionalPaidInCapitalMember2022-03-310001070412us-gaap:RetainedEarningsMember2022-03-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001070412us-gaap:CommonStockMember2020-12-310001070412us-gaap:AdditionalPaidInCapitalMember2020-12-310001070412us-gaap:RetainedEarningsMember2020-12-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100010704122020-12-310001070412us-gaap:RetainedEarningsMember2021-01-012021-03-310001070412us-gaap:CommonStockMember2021-01-012021-03-310001070412us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001070412us-gaap:CommonStockMember2021-03-310001070412us-gaap:AdditionalPaidInCapitalMember2021-03-310001070412us-gaap:RetainedEarningsMember2021-03-310001070412us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100010704122021-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMember2021-01-012021-03-310001070412us-gaap:RevolvingCreditFacilityMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310001070412us-gaap:TradeAccountsReceivableMember2021-12-310001070412us-gaap:TradeAccountsReceivableMember2020-12-310001070412us-gaap:TradeAccountsReceivableMember2022-01-012022-03-310001070412us-gaap:TradeAccountsReceivableMember2021-01-012021-03-310001070412us-gaap:TradeAccountsReceivableMember2022-03-310001070412us-gaap:TradeAccountsReceivableMember2021-03-310001070412cnx:OtherReceivablesMember2021-12-310001070412cnx:OtherReceivablesMember2020-12-310001070412cnx:OtherReceivablesMember2022-01-012022-03-310001070412cnx:OtherReceivablesMember2021-01-012021-03-310001070412cnx:OtherReceivablesMember2022-03-310001070412cnx:OtherReceivablesMember2021-03-310001070412us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001070412us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001070412us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001070412us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001070412cnx:PerformanceShareUnitsMember2022-01-012022-03-310001070412cnx:PerformanceShareUnitsMember2021-01-012021-03-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2022-03-310001070412us-gaap:EmployeeStockOptionMember2022-01-012022-03-310001070412us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001070412us-gaap:RestrictedStockMember2022-01-012022-03-310001070412us-gaap:RestrictedStockMember2021-01-012021-03-310001070412cnx:PerformanceShareUnitsMember2022-01-012022-03-310001070412cnx:PerformanceShareUnitsMember2021-01-012021-03-310001070412srt:NaturalGasReservesMember2022-01-012022-03-310001070412srt:NaturalGasReservesMember2021-01-012021-03-310001070412cnx:NGLsMember2022-01-012022-03-310001070412cnx:NGLsMember2021-01-012021-03-310001070412us-gaap:OilAndCondensateMember2022-01-012022-03-310001070412us-gaap:OilAndCondensateMember2021-01-012021-03-3100010704122022-04-012022-03-3100010704122023-04-012022-03-31xbrli:pure0001070412cnx:CNXGatheringLLCMember2017-12-310001070412cnx:MidstreamAcquisitionMember2017-12-012017-12-310001070412cnx:MidstreamAcquisitionMember2018-01-030001070412us-gaap:RevolvingCreditFacilityMember2021-10-060001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2021-10-060001070412cnx:FederalFundsOpenRateMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMembersrt:MinimumMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMembersrt:MaximumMember2022-01-012022-03-310001070412srt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-03-310001070412srt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMember2022-03-310001070412us-gaap:RevolvingCreditFacilityMember2021-12-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMember2021-10-060001070412cnx:CNXMMembercnx:FederalFundsOpenRateMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMembercnx:CNXMMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMembersrt:MinimumMembercnx:CNXMMember2022-01-012022-03-310001070412cnx:OneMonthLIBORMembercnx:CNXMMembersrt:MaximumMember2022-01-012022-03-310001070412srt:MinimumMembercnx:CNXMMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-03-310001070412cnx:CNXMMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMembersrt:MinimumMembercnx:CNXMMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMembersrt:MaximumMember2022-01-012022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMember2022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMMember2021-12-310001070412cnx:SeniorNotesDueMarch2027Member2022-03-310001070412cnx:SeniorNotesDueMarch2027Member2021-12-310001070412cnx:SeniorNotesDueJanuary2029Member2022-03-310001070412cnx:SeniorNotesDueJanuary2029Member2021-12-310001070412cnx:SeniorNotesDueApril2030Member2022-03-310001070412cnx:SeniorNotesDueApril2030Member2021-12-310001070412cnx:Convertible225SeniorNotesDue2026Member2022-03-310001070412cnx:Convertible225SeniorNotesDue2026Member2021-12-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMidstreamPartnersLPRevolvingCreditFacilityMember2022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXMidstreamPartnersLPRevolvingCreditFacilityMember2021-12-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXRevolvingCreditFacilityMember2022-03-310001070412us-gaap:RevolvingCreditFacilityMembercnx:CNXRevolvingCreditFacilityMember2021-12-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2020-04-300001070412cnx:Convertible225SeniorNotesDue2026AdditionalOptionToInitialPurchasersMemberus-gaap:ConvertibleDebtMember2020-04-3000010704122020-10-012020-12-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2020-04-012020-04-3000010704122020-04-300001070412us-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2020-04-012020-04-30cnx:day0001070412us-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMembercnx:Convertible225SeniorNotesDue2026Member2020-04-012020-04-300001070412us-gaap:AccountingStandardsUpdate202006Member2022-01-010001070412us-gaap:AccountingStandardsUpdate202006Member2022-01-012022-01-010001070412us-gaap:AccountingStandardsUpdate202006Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-01-010001070412cnx:Convertible225SeniorNotesDue2026Member2022-01-010001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026LiabilityComponentMember2020-04-300001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026EquityComponentMember2020-04-300001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2021-12-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2022-01-012022-03-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2021-01-012021-12-310001070412us-gaap:ConvertibleDebtMembercnx:Convertible225SeniorNotesDue2026Member2021-01-012021-03-310001070412us-gaap:CallOptionMembercnx:CappedCallTransactionMembersrt:MinimumMember2020-04-012020-04-300001070412us-gaap:CallOptionMembercnx:CappedCallTransactionMembersrt:MaximumMember2020-04-012020-04-300001070412cnx:CappedCallTransactionMember2020-04-012020-04-3000010704122020-05-01cnx:retiree0001070412us-gaap:StandbyLettersOfCreditMembercnx:FirmTransportationMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:FirmTransportationMembercnx:BalanceOnFirstAnniversaryMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:FirmTransportationMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:FirmTransportationMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:BeyondFiveYearsOfBalanceSheetDateMembercnx:FirmTransportationMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:OtherCommitmentsMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:OtherCommitmentsMembercnx:BalanceOnFirstAnniversaryMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:OtherCommitmentsMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:OtherCommitmentsMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:BeyondFiveYearsOfBalanceSheetDateMembercnx:OtherCommitmentsMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:LossContingenciesbySecondaryNatureofContingencyMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:BalanceOnFirstAnniversaryMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMember2022-03-310001070412us-gaap:StandbyLettersOfCreditMembercnx:BeyondFiveYearsOfBalanceSheetDateMembercnx:LossContingenciesbySecondaryNatureofContingencyMember2022-03-310001070412cnx:EmployeeRelatedCommitmentsMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EmployeeRelatedCommitmentsMembercnx:BalanceOnFirstAnniversaryMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EmployeeRelatedCommitmentsMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EmployeeRelatedCommitmentsMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EmployeeRelatedCommitmentsMembercnx:BeyondFiveYearsOfBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EnvironmentRelatedCommitmentsMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EnvironmentRelatedCommitmentsMembercnx:BalanceOnFirstAnniversaryMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EnvironmentRelatedCommitmentsMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EnvironmentRelatedCommitmentsMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:EnvironmentRelatedCommitmentsMembercnx:BeyondFiveYearsOfBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412us-gaap:FinancialGuaranteeMemberus-gaap:SuretyBondMember2022-03-310001070412us-gaap:FinancialGuaranteeMembercnx:BalanceOnFirstAnniversaryMemberus-gaap:SuretyBondMember2022-03-310001070412us-gaap:FinancialGuaranteeMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412us-gaap:FinancialGuaranteeMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412us-gaap:FinancialGuaranteeMembercnx:BeyondFiveYearsOfBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:OtherCommitmentsMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:OtherCommitmentsMembercnx:BalanceOnFirstAnniversaryMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:OtherCommitmentsMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:OtherCommitmentsMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:BeyondFiveYearsOfBalanceSheetDateMembercnx:OtherCommitmentsMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:LossContingenciesbySecondaryNatureofContingencyMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:BalanceOnFirstAnniversaryMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:LossContingenciesbySecondaryNatureofContingencyMembercnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:BeyondFiveYearsOfBalanceSheetDateMembercnx:LossContingenciesbySecondaryNatureofContingencyMemberus-gaap:SuretyBondMember2022-03-310001070412cnx:BalanceOnFirstAnniversaryMember2022-03-310001070412cnx:MoreThanOneAndWithinThreeYearsFromBalanceSheetDateMember2022-03-310001070412cnx:MoreThanThreeAndWithinFiveYearsFromBalanceSheetDateMember2022-03-310001070412cnx:BeyondFiveYearsOfBalanceSheetDateMember2022-03-310001070412us-gaap:PurchaseCommitmentMember2022-03-310001070412us-gaap:LineOfCreditMember2020-03-310001070412us-gaap:LongMembercnx:InterestRateSwapOnLineOfCreditMember2020-03-310001070412us-gaap:RevolvingCreditFacilityMember2019-06-300001070412us-gaap:RevolvingCreditFacilityMember2019-06-012019-06-300001070412us-gaap:LongMembercnx:InterestRateSwapOnRevolvingCreditFacilityMember2020-03-012020-03-310001070412us-gaap:LongMembercnx:InterestRateSwapOnRevolvingCreditFacilityMember2020-03-310001070412us-gaap:LongMembercnx:InterestRateSwapOnRevolvingCreditFacilityMember2020-12-310001070412us-gaap:CommodityMember2022-01-012022-03-31utr:Mcf0001070412us-gaap:CommodityMember2021-01-012021-12-310001070412us-gaap:BasisSwapMember2022-01-012022-03-310001070412us-gaap:BasisSwapMember2021-01-012021-12-310001070412us-gaap:InterestRateSwapMember2022-03-310001070412us-gaap:InterestRateSwapMember2021-12-310001070412cnx:BasisSwapPurchasedMember2022-01-012022-03-310001070412cnx:CommoditySwapMember2022-03-310001070412cnx:CommoditySwapMember2021-12-310001070412us-gaap:BasisSwapMember2022-03-310001070412us-gaap:BasisSwapMember2021-12-310001070412srt:NaturalGasReservesMembercnx:CommoditySwapMember2022-01-012022-03-310001070412srt:NaturalGasReservesMembercnx:CommoditySwapMember2021-01-012021-03-310001070412srt:NaturalGasReservesMemberus-gaap:BasisSwapMember2022-01-012022-03-310001070412srt:NaturalGasReservesMemberus-gaap:BasisSwapMember2021-01-012021-03-310001070412us-gaap:InterestRateSwapMember2022-01-012022-03-310001070412us-gaap:InterestRateSwapMember2021-01-012021-03-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel1Member2022-03-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel2Member2022-03-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel3Member2022-03-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel1Member2021-12-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel2Member2021-12-310001070412us-gaap:EnergyRelatedDerivativeMemberus-gaap:FairValueInputsLevel3Member2021-12-310001070412us-gaap:InterestRateContractMemberus-gaap:FairValueInputsLevel1Member2022-03-310001070412us-gaap:InterestRateContractMemberus-gaap:FairValueInputsLevel2Member2022-03-310001070412us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateContractMember2022-03-310001070412us-gaap:InterestRateContractMemberus-gaap:FairValueInputsLevel1Member2021-12-310001070412us-gaap:InterestRateContractMemberus-gaap:FairValueInputsLevel2Member2021-12-310001070412us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateContractMember2021-12-310001070412us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001070412us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001070412us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001070412us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-31cnx:segment0001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMember2022-01-012022-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMember2022-01-012022-03-310001070412us-gaap:CorporateNonSegmentMemberus-gaap:OilAndGasMember2022-01-012022-03-310001070412us-gaap:OilAndGasMember2022-01-012022-03-310001070412us-gaap:OilAndGasPurchasedMembercnx:ShaleMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001070412us-gaap:OilAndGasPurchasedMembercnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001070412us-gaap:OilAndGasPurchasedMemberus-gaap:CorporateNonSegmentMember2022-01-012022-03-310001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001070412us-gaap:CorporateNonSegmentMember2022-01-012022-03-310001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMember2022-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2022-03-310001070412us-gaap:CorporateNonSegmentMember2022-03-310001070412cnx:DirectEnergyBusinessMarketingLLCMemberus-gaap:OilAndGasMember2022-01-012022-03-310001070412cnx:CitadelEnergyMarketingLLCMemberus-gaap:OilAndGasMember2022-01-012022-03-310001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMember2021-01-012021-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMemberus-gaap:OilAndGasMember2021-01-012021-03-310001070412us-gaap:CorporateNonSegmentMemberus-gaap:OilAndGasMember2021-01-012021-03-310001070412us-gaap:OilAndGasMember2021-01-012021-03-310001070412us-gaap:OilAndGasPurchasedMembercnx:ShaleMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001070412us-gaap:OilAndGasPurchasedMembercnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001070412us-gaap:OilAndGasPurchasedMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310001070412us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001070412cnx:ShaleMemberus-gaap:OperatingSegmentsMember2021-03-310001070412cnx:CoalbedMethaneMemberus-gaap:OperatingSegmentsMember2021-03-310001070412us-gaap:CorporateNonSegmentMember2021-03-310001070412cnx:DirectEnergyBusinessMarketingLLCMemberus-gaap:OilAndGasMember2021-01-012021-03-310001070412us-gaap:OperatingSegmentsMember2022-01-012022-03-310001070412us-gaap:OperatingSegmentsMember2021-01-012021-03-3100010704122021-01-2600010704122021-10-25

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, 2022
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 CONSOL Energy Drive Suite 400
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 18, 2022
Common stock, $0.01 par value195,053,981





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.Risk Factors
ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds
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.
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.
BBtu - One billion British Thermal Units.
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.
Tcfe - One trillion 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.
net - "net" natural gas or "net" acres are determined by adding the fractional ownership working interests the Company has in gross wells or acres.
TIL - turn-in-line; a well turned to sales.
NYMEX - New York Mercantile Exchange.
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.
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.
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 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.
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. 
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.
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.
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.
wet gas - natural gas that contains significant heavy hydrocarbons, such as propane, butane and other liquid hydrocarbons.





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 (Loss) Income:20222021
Natural Gas, NGLs and Oil Revenue$744,625 $381,225 
(Loss) Gain on Commodity Derivative Instruments(1,726,394)33,414 
Purchased Gas Revenue45,841 33,484 
Other Revenue and Operating Income22,830 24,950 
Total Revenue and Other Operating (Loss) Income(913,098)473,073 
Costs and Expenses:
Operating Expense
Lease Operating Expense15,398 9,268 
Production, Ad Valorem and Other Fees9,927 5,968 
Transportation, Gathering and Compression88,286 77,158 
Depreciation, Depletion and Amortization118,623 128,944 
Exploration and Production Related Other Costs1,689 2,076 
Purchased Gas Costs
44,816 32,411 
Selling, General, and Administrative Costs
31,560 28,321 
Other Operating Expense
12,170 15,658 
Total Operating Expense322,469 299,804 
Other Expense
Other (Income) Expense(736)4,366 
Gain on Asset Sales and Abandonments, net(13,395)(2,873)
Interest Expense27,069 36,372 
Total Other Expense12,938 37,865 
Total Costs and Expenses335,407 337,669 
(Loss) Earnings Before Income Tax(1,248,505)135,404 
Income Tax (Benefit) Expense(325,564)37,379 
Net (Loss) Income$(922,941)$98,025 
(Loss) Earnings per Share
Basic $(4.62)$0.45 
Diluted $(4.62)$0.43 
Dividends Declared$ $ 











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)20222021
Net (Loss) Income$(922,941)$98,025 
Other Comprehensive Income:
  Actuarially Determined Long-Term Liability Adjustments (Net of tax: $(48), $(48))
135 135 
Comprehensive (Loss) Income$(922,806)$98,160 












































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,
2022
December 31,
2021
ASSETS
Current Assets:
Cash and Cash Equivalents$8,570 $3,565 
Accounts and Notes Receivable:
Trade, net263,126 330,122 
Other Receivables, net5,134 8,924 
Supplies Inventories6,469 6,147 
Recoverable Income Taxes 72 
Derivative Instruments119,838 95,002 
Prepaid Expenses13,739 15,975 
Total Current Assets416,876 459,807 
Property, Plant and Equipment:
Property, Plant and Equipment11,484,450 11,362,102 
Less—Accumulated Depreciation, Depletion and Amortization4,488,326 4,372,619 
Total Property, Plant and Equipment—Net6,996,124 6,989,483 
Other Non-Current Assets:
Operating Lease Right-of-Use Assets42,162 56,022 
Derivative Instruments281,213 131,994 
Goodwill323,314 323,314 
Other Intangible Assets81,904 83,543 
Deferred Income Taxes28,526  
Other53,405 56,588 
Total Other Non-Current Assets810,524 651,461 
TOTAL ASSETS$8,223,524 $8,100,751 























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,
2022
December 31,
2021
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable$120,513 $121,751 
Derivative Instruments1,411,964 521,598 
Current Portion of Finance Lease Obligations603 555 
Current Portion of Long-Term Debt336,083  
Current Portion of Operating Lease Obligations10,003 22,940 
Other Accrued Liabilities248,176 287,732 
Total Current Liabilities2,127,342 954,576 
Non-Current Liabilities:
Long-Term Debt1,890,790 2,214,121 
Finance Lease Obligations1,304 1,218 
Operating Lease Obligations32,340 33,672 
Derivative Instruments1,421,373 687,354 
Deferred Income Taxes 328,601 
Asset Retirement Obligations89,403 88,859 
Other91,460 92,077 
Total Non-Current Liabilities3,526,670 3,445,902 
TOTAL LIABILITIES5,654,012 4,400,478 
Stockholders’ Equity:
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 195,139,160 Issued and Outstanding at March 31, 2022; 203,531,320 Issued and Outstanding at December 31, 2021
1,955 2,039 
Capital in Excess of Par Value2,691,950 2,834,863 
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding
  
(Accumulated Deficit) Retained Earnings(110,005)877,894 
Accumulated Other Comprehensive Loss(14,388)(14,523)
TOTAL STOCKHOLDERS' EQUITY2,569,512 3,700,273 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$8,223,524 $8,100,751 


















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
Stock
Capital in
Excess
of Par
Value
(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive
Loss
Total
Equity
December 31, 2021$2,039 $2,834,863 $877,894 $(14,523)$3,700,273 
(Unaudited)
Net Loss— — (922,941)— (922,941)
Issuance of Common Stock1 607 — — 608 
Purchase and Retirement of Common Stock(91)(72,561)(78,323)— (150,975)
Shares Withheld for Taxes— — (5,582)— (5,582)
Amortization of Stock-Based Compensation Awards6 7,325 — — 7,331 
Other Comprehensive Income— — — 135 135 
Cumulative Effect of Adoption of New Accounting Standard— (78,284)18,947 — (59,337)
March 31, 2022$1,955 $2,691,950 $(110,005)$(14,388)$2,569,512 
(Dollars in thousands)
December 31, 2020$2,208 $2,959,357 $1,476,056 $(15,184)$4,422,437 
(Unaudited)
Net Income— — 98,025 — 98,025 
Issuance of Common Stock7 4,792 — — 4,799 
Purchase and Retirement of Common Stock(14)(11,701)(6,272)— (17,987)
Shares Withheld for Taxes— — (4,491)— (4,491)
Amortization of Stock-Based Compensation Awards6 7,519 — — 7,525 
Equity Component of Convertible Senior Notes, net of Issuance Costs— (33)— — (33)
Other Comprehensive Income— — — 135 135 
March 31, 2021$2,207 $2,959,934 $1,563,318 $(15,049)$4,510,410 






















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:20222021
Net (Loss) Income$(922,941)$98,025 
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization118,623 128,944 
Amortization of Deferred Financing Costs2,042 6,034 
Stock-Based Compensation7,331 7,525 
Gain on Asset Sales and Abandonments, net(13,395)(2,873)
Loss (Gain) on Commodity Derivative Instruments1,726,394 (33,414)
Gain on Other Derivative Instruments(5,223)(4,194)
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments(270,842)2,405 
Deferred Income Taxes(334,184)37,352 
Other1,700 (150)
Changes in Operating Assets:
Accounts and Notes Receivable66,577 (7,586)
Recoverable Income Taxes72 88 
Supplies Inventories(322)411 
Prepaid Expenses2,366 290 
Changes in Other Assets322 (36)
Changes in Operating Liabilities:
Accounts Payable(2,032)(3,807)
Accrued Interest(13,595)(9,872)
Other Operating Liabilities(26,086)562 
Changes in Other Liabilities(412)(56)
Net Cash Provided by Operating Activities336,395 219,648 
Cash Flows from Investing Activities:
Capital Expenditures(122,316)(123,429)
Proceeds from Asset Sales19,423 5,005 
Net Cash Used in Investing Activities(102,893)(118,424)
Cash Flows from Financing Activities:
Net Proceeds from (Payments on) CNXM Revolving Credit Facility25,200 (54,000)
Net Payments on CNX Revolving Credit Facility
(96,000)(800)
Net Payments on CSG Non-Revolving Credit Facilities (5,823)
Net Payments on Other Debt(154)(1,838)
Proceeds from Issuance of Common Stock608 4,799 
Shares Withheld for Taxes(5,582)(4,491)
Purchases of Common Stock(152,473)(23,988)
Debt Issuance and Financing Fees(96)(1,320)
Net Cash Used in Financing Activities(228,497)(87,461)
Net Increase in Cash, Cash Equivalents and Restricted Cash5,005 13,763 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period3,565 21,599 
Cash, Cash Equivalents, and Restricted Cash at End of Period$8,570 $35,362 










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 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, 2022 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, 2021 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, 2021 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 10, 2022.

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

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the statement of cash flows:
March 31,
20222021
Cash and Cash Equivalents$8,570 $29,610 
Restricted Cash, Current Portion 733 
Restricted Cash, Less Current Portion  5,019 
Total Cash, Cash Equivalents, and Restricted Cash$8,570 $35,362 

Restricted cash at March 31, 2021 consisted of cash that the Company was contractually obligated to maintain in accordance with the terms of the Cardinal States Gathering LLC and CSG Holdings II LLC Credit Agreement, each dated March 13, 2020. In August 2021, CNX repaid in full the outstanding principal on both of these non-revolving credit facilities and terminated the Credit Agreements.

Receivables

As of March 31, 2022 and December 31, 2021, Accounts Receivable - Trade were $263,126 and $330,122, respectively, and Other Receivables were $5,134 and $8,924, 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 will be charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.









11


The following represents activity related to the allowance for credit losses for the three months ended:
March 31,
20222021
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$3,322 $3,248 
Provision for Expected Credit Losses50 (129)
Write-off of Uncollectible Accounts(124)(18)
Allowance for Credit Losses - Other Receivables, End of Period$3,248 $3,101 

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 Convertible Notes (See Note 9 - 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,
 20222021
Anti-Dilutive Options2,347,218 943,838 
Anti-Dilutive Restricted Stock Units2,493,698 66,705 
Anti-Dilutive Performance Share Units2,071,418  
6,912,334 1,010,543 

The Company expects to settle the principal amount of the Convertible Notes in cash. As a result, only the amount by which the conversion value exceeds the aggregated principal amount of the Convertible Notes is included in the diluted earnings per share computation under the treasury stock method. 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 table below sets forth the share-based awards that have been exercised or released:
 For the Three Months Ended March 31,
 20222021
Options83,424 656,368 
Restricted Stock Units915,921 701,757 
Performance Share Units72,353 291,653 
1,071,698 1,649,778 

12


The computations for basic and diluted loss per share are as follows:
For the Three Months Ended March 31,
 20222021
Net (Loss) Income$(922,941)$98,025 
Weighted-Average Shares of Common Stock Outstanding
199,854,257 219,923,634 
Effect of Diluted Shares*
 8,746,814 
Weighted-Average Diluted Shares of Common Stock Outstanding
199,854,257 228,670,448 
(Loss) Earnings per Share:
Basic$(4.62)$0.45 
Diluted$(4.62)$0.43 
*During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is antidilutive.

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, which requires judgment from management. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price. Revenue associated with natural gas, 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.

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. 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.















13


Disaggregation of Revenue

The following table is a disaggregation of revenue by major source:
For the Three Months Ended March 31,
20222021
Revenue from Contracts with Customers:
Natural Gas Revenue$675,274 $347,376 
NGL Revenue64,796 31,863 
Oil/Condensate Revenue4,555 1,986 
Total Natural Gas, NGL and Oil Revenue744,625 381,225 
Purchased Gas Revenue45,841 33,484 
Other Sources of Revenue and Other Operating (Loss) Income:
(Loss) Gain on Commodity Derivative Instruments(1,726,394)33,414 
Other Revenue and Operating Income22,830 24,950 
Total Revenue and Other Operating (Loss) Income$(913,098)$473,073 

The disaggregated revenue information corresponds with the Company’s segment reporting found in Note 13 - 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.

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 $44,542 as of March 31, 2022. The Company expects to recognize net revenue of $20,857 in the next 12 months and $13,147 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.



14


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 the three months ended March 31, 2022 and 2021, revenue recognized in the current reporting period related to performance obligations satisfied in a prior reporting period was not material.

NOTE 4—INCOME TAXES:

The effective tax rates for the three months ended March 31, 2022 and 2021 were 26.1% and 27.6%, respectively. The effective tax rates for the three months ended March 31, 2022 and 2021 differ from the U.S. federal statutory rate of 21.0% primarily due to the impact of equity compensation and state taxes.

The total amount of uncertain tax positions at March 31, 2022 and December 31, 2021 was $67,805. If these uncertain tax positions were recognized, approximately $67,805 would affect CNX's effective tax rate at March 31, 2022 and December 31, 2021. There was no change to the unrecognized tax benefits during the three months ended March 31, 2022.

CNX recognizes accrued interest and penalties related to uncertain tax positions in interest expense and income tax expense, respectively. As of March 31, 2022 and December 31, 2021, 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 2018.

NOTE 5—PROPERTY, PLANT AND EQUIPMENT:
March 31,
2022
December 31,
2021
Intangible Drilling Cost$5,327,242 $5,247,800 
Gas Gathering Equipment2,494,440 2,483,561 
Proved Gas Properties1,316,143 1,312,706 
Gas Wells and Related Equipment1,230,617 1,202,731 
Unproved Gas Properties733,440 730,400 
Surface Land and Other Equipment192,973 194,655 
Other189,595 190,249 
Total Property, Plant and Equipment11,484,450 11,362,102 
Less: Accumulated Depreciation, Depletion and Amortization4,488,326 4,372,619 
Total Property, Plant and Equipment - Net$6,996,124 $6,989,483 

NOTE 6—GOODWILL AND OTHER INTANGIBLE ASSETS:

In December 2017, CNX Gas entered into a purchase agreement with Noble Energy, pursuant to which CNX Gas acquired Noble’s 50% membership interest in CNX Gathering (then named CONE Gathering LLC), for a cash purchase price of $305,000 (the "Midstream Acquisition"). 

Prior to the Midstream Acquisition, the Company accounted for its 50% interest in CNX Gathering as an equity method investment as the Company had the ability to exercise significant influence, but not control, over the operating and financial policies of the midstream operations. In conjunction with the Midstream Acquisition, the Company obtained a controlling interest in CNX Gathering and control over the Partnership. Accordingly, the Midstream Acquisition was accounted for as a business combination using the acquisition method of accounting pursuant to ASC Topic 805, Business Combinations, or ASC 805. ASC 805 requires that, in circumstances where a business combination is achieved in stages (or step acquisition), previously held equity interests are remeasured at fair value. The fair value assigned to the previously held equity interest in

15


CNX Gathering and CNXM was $799,033 and was determined using the income approach, based on a discounted cash flow methodology.

As part of the allocation of purchase price and in connection with the fair value of consideration transferred at closing on January 3, 2018, CNX recorded $796,359 of goodwill and $128,781 of other intangible assets which are comprised of customer relationships.

The accumulated impairment losses on goodwill were $473,045, resulting in a carrying value of $323,314, at both March 31, 2022 and December 31, 2021.

The carrying amount and accumulated amortization of other intangible assets consist of the following:
March 31,
2022
December 31,
2021
Other Intangible Assets:
Gross Amortizable Asset - Customer Relationships $109,752 $109,752 
Less: Accumulated Amortization - Customer Relationships27,848 26,209 
Total Other Intangible Assets, net$81,904 $83,543 

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 $1,639 for the three months ended March 31, 2022 and $1,638 for the three months ended March 31, 2021. The estimated annual amortization expense is expected to approximate $6,552 per year for each of the next five years.

NOTE 7—REVOLVING CREDIT FACILITIES:
CNX:
On October 6, 2021, CNX as borrower and certain of its subsidiaries (not including CNXM) as guarantor loan parties entered into a new Amended and Restated Credit Agreement for a senior secured revolving credit facility (the "CNX Credit Agreement"). The new CNX Credit Agreement replaced the prior CNX revolving credit facility and remains subject to semi-annual redetermination. The CNX Credit Agreement has a $2,000,000 borrowing base and $1,300,000 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, if any of the Company’s 2.25% Convertible Senior Notes due 2026 are outstanding and (a) availability under the CNX Credit Agreement minus (b) the aggregate principal amount of all such outstanding Convertible Senior 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.

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 LIBOR rate plus 1.0%, in each case, plus a margin ranging from 0.75% to 1.75%; or
the LIBOR rate plus a margin ranging from 1.75% to 2.75%.

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 borrowings under the revolver, measured quarterly. The calculation of all of the ratios exclude CNXM. CNX was in compliance with all financial covenants as of March 31, 2022.


16


At March 31, 2022, the CNX Credit Agreement had $96,000 of borrowings outstanding and $183,391 of letters of credit outstanding, leaving $1,020,609 of unused capacity. At December 31, 2021, the CNX Credit Agreement had $192,000 of borrowings outstanding and $184,131 of letters of credit outstanding, leaving $923,869 of unused capacity.

CNX Midstream Partners LP (CNXM):
On October 6, 2021, CNXM as borrower and certain of its subsidiaries as guarantor loan parties entered into a new Amended and Restated Credit Agreement for a $600,000 senior secured revolving credit facility (the "CNXM Credit Agreement") that matures on October 6, 2026. 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 LIBOR rate plus 1.0%, in each case, plus a margin ranging from 1.00% to 2.00%; or
the LIBOR rate plus a margin ranging from 2.00% to 3.00%.

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, 2022.

At March 31, 2022, the CNXM Credit Agreement had $210,200 of borrowings outstanding and $30 of letters of credit outstanding, leaving $389,770 of unused capacity. At December 31, 2021, the CNXM Credit Agreement had $185,000 of borrowings outstanding and $30 of letters of credit outstanding, leaving $414,970 of unused capacity.

NOTE 8—OTHER ACCRUED LIABILITIES:
March 31,
2022
December 31,
2021
Royalties$141,860 $152,498 
Accrued Interest22,440 36,035 
Deferred Revenue15,577 18,984 
Transportation Charges15,181 15,808 
Accrued Other Taxes13,213 12,681 
Accrued Payroll & Benefits6,968 5,747 
Short-Term Incentive Compensation2,915 19,591 
Litigation Contingency1,792 1,200 
Purchased Gas Payable1,511 757 
Other17,329 15,435 
Current Portion of Long-Term Liabilities:
Asset Retirement Obligations7,529 7,154 
Salary Retirement1,861 1,842 
Total Other Accrued Liabilities$248,176 $287,732 


17


NOTE 9—LONG-TERM DEBT:
March 31,
2022
December 31,
2021
Senior Notes due March 2027 at 7.25% (Principal of $700,000 plus Unamortized Premium of $5,340 and $5,609, respectively)
$705,340 $705,609 
Senior Notes due January 2029 at 6.00%, Issued at Par Value
500,000 500,000 
CNX Midstream Partners LP Senior Notes due April 2030 at 4.75% (Principal of $400,000 less Unamortized Discount of $4,663 and $4,808, respectively )*
395,337 395,192 
Convertible Senior Notes due May 2026 at 2.25% (Principal of $345,000 less Unamortized Discount and Issuance Costs of $8,190 and $91,284, respectively)
336,810 253,716 
CNX Midstream Partners LP Revolving Credit Facility*210,200 185,000 
CNX Revolving Credit Facility96,000 192,000 
Less: Unamortized Debt Issuance Costs16,814 17,396 
2,226,873 2,214,121 
Less: Current Portion336,083  
Long-Term Debt$1,890,790 $2,214,121 
*CNX is not a guarantor of CNXM's 4.75% Senior Notes due April 2030 or CNXM's Credit Facility.

In April 2020, CNX issued $345,000 in aggregate principal amount of 2.25% convertible senior notes due May 2026 (the "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 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. Based on the closing stock price of CNX common stock of $20.72 on March 31, 2022, the if-converted value of the Convertible Notes exceeded the principal amount by $323,074.

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 below, 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

18


circumstances, for a holder who elects to convert its Convertible Notes in connection with such a corporate event.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. 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, 2022, 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, 2022 and ending on June 30, 2022, subject to all terms and conditions set forth in the Convertible Notes indenture. Therefore, as of March 31, 2022, the net carrying value of the Convertible Notes was classified as current in the Consolidated Balance Sheet.

On January 1, 2022, the Company adopted Accounting Standards Update (ASU) 2020-06 - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity using the modified transition approach with the cumulative effect recognized as an adjustment to the opening balance of retained earnings. This guidance is applicable to the Convertible Senior Notes due May 2026 ("Convertible Notes") that were issued in April 2020, for which the embedded conversion option was required to be separately accounted for as a component of stockholders’ equity. Upon adoption on January 1, 2022, long-term debt increased by $82,327 representing the net impact of two adjustments: (1) the $107,260 value of the embedded conversion, which is net of allocated offering costs, previously classified in additional paid-in-capital in stockholders’ equity, and (2) a $24,933 increase to retained earnings for the cumulative effect of adoption primarily related to the non-cash interest expense recorded for the amortization of the portion of the Convertible Notes allocated to stockholders’ equity. In addition, there was a decrease of $22,990 to deferred income taxes, a $5,986 decrease to retained earnings, and a $78,284 decrease in stockholders equity in the Consolidated Balance Sheet. Prospectively, the reported interest expense for the Convertible Notes will no longer include the non-cash interest expense of the equity component as required under prior accounting standards and will be equal to the 2.25% cash coupon rate. Also, as required by the new accounting guidance, the Company will use the if-converted method instead of the treasury stock method for the assumed conversion of the Convertible Notes on a prospective basis when calculating earnings per share.

Prior to the adoption of ASU 2020-06 - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, the Convertible Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The fair value was based on market data available for publicly traded, senior, unsecured corporate bonds with similar maturity, which represent Level 2 observable inputs. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal value of the Convertible Notes and was recorded in Capital in Excess of Par Value in the Consolidated Statement of Stockholders Equity and was not remeasured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the Convertible Notes over the liability component and the debt issuance costs was amortized to interest expense over the contractual term of the Convertible Notes using the effective interest method. 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.











19


The net carrying amount of the liability and equity components of the Convertible Notes was as follows:
March 31,
2022
December 31,
2021
Liability Component:
Principal$345,000 $345,000 
Unamortized Discount (85,950)
Unamortized Issuance Costs(8,190)(5,334)
Net Carrying Amount$336,810 $253,716 
Fair Value$603,609 $453,765 
Fair Value HierarchyLevel 2Level 2
Equity Component, net of Purchase Discounts and Issuance Costs$ $78,284 

Interest expense related to the Convertible Notes is as follows:
For the Three Months Ended March 31,
20222021
Contractual Interest Expense $1,941 $1,941 
Amortization of Debt Discount 3,722 
Amortization of Issuance Costs471 252 
Total Interest Expense $2,412 $5,915 

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 10—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

20


last signatory operators: Consolidation Coal Company, McElroy Coal Company, Southern Ohio Coal Company, Central Ohio Coal Company, Keystone Coal Mining Corp., and Eight-Four Coal 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 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 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 requesting information related to the facts and circumstances surrounding the 2013 sale of certain of its coal subsidiaries to Murray Energy. The letter indicates that litigation related to potential withdrawal liabilities from the plan created by the 2019 bankruptcy of Murray Energy is reasonably foreseeable. At this time, no liability has been assessed. 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 any potential withdrawal liabilities.

At March 31, 2022, 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$180,435 $180,435 $ $ $ 
Other2,986 2,986    
Total Letters of Credit183,421 183,421    
Surety Bonds:
Employee-Related2,600 2,600    
Environmental11,984 10,269 1,715   
Financial Guarantees81,270 81,270    
Other8,858 5,303 3,555   
Total Surety Bonds104,712 99,442 5,270   
Total Commitments$288,133 $282,863 $5,270 $ $