PITTSBURGH, Oct. 29, 2019 /PRNewswire/ -- CNX Resources Corporation (NYSE: CNX) ("CNX" or "the company") reports the following financial results, which are in accordance with generally accepted accounting principles (GAAP) in the U.S.:
During the third quarter of 2019:
- The company reported net income attributable to CNX shareholders of $116 million, or earnings of $0.61 per diluted share, compared to net income attributable to CNX shareholders of $125 million, or earnings of $0.59 per diluted share, in the third quarter of 2018. During the third quarter of 2019 and 2018 there were unrealized gains on commodity derivative instruments of $157 million and $15 million, respectively.
- The company reported total production costs of $1.99 per Mcfe, including $0.86 per Mcfe of Depreciation, Depletion, and Amortization (DD&A), compared to $1.97 per Mcfe, including $0.93 per Mcfe of DD&A, in the year-earlier quarter.
- On a consolidated basis, the company reported net income of $144 million for the 2019 third quarter, compared to net income of $147 million in the third quarter of 2018.
- Capital expenditures were $336 million, compared to $297 million spent in the year-earlier quarter.
- The company had total weighted-average diluted shares of common stock outstanding of 188,430,959, compared to 212,708,082 shares in the third quarter of 2018.
Third Quarter Highlights
CNX's management uses non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful for investors in analyzing the company. Stand-alone results include both CNX's Exploration & Production (E&P) and Unallocated segments (but not the Midstream segment) plus distributions CNX receives from CNX Midstream Partners LP ("CNXM"). CNX believes that providing stand-alone results provides investors with more transparency and a better ability to compare CNX's financial results to those of our peer group. The term "consolidated" includes 100% of the results of CNX, CNX Gathering LLC, and CNXM on a consolidated basis. For the third quarter of 2019, the company:
- Had sales volumes of 128 Bcfe, or an increase of 8% from the 119 Bcfe sold in the third quarter of 2018.
- Had fully burdened cash margin of $0.82 per Mcfe, or a decrease of 36% from the $1.29 per Mcfe in the third quarter of 2018.
- Turned-in-line 24 wells.
"CNX accomplished a number of significant items in the third quarter: production costs and capital came in better than expected; we reconfigured our workflows and now expect $25 million in selling, general, and administrative (SG&A) cash cost savings in 2020 compared to the previous guidance; we completed the Richhill waterline to feed the Evolution all-electric frac fleet and drive further efficiencies and cycle time improvements in our core Southwest Pennsylvania development area; and we turned-in-line 24 wells late in the quarter to set the company up for strong production in the fourth quarter," commented Nicholas J. DeIuliis, president and CEO. "These accomplishments create improvement for 2019, and our updated guidance shows lower capital and higher production for the year."
"We continue to follow the rate of return math when allocating capital," continued Mr. DeIuliis. "Macro supply and demand concerns certainly lowered the forward strip during the past quarter, and we are adjusting activity accordingly by lowering our capital and production guidance for 2020. In spite of the price decline, we are increasing our 2020 free cash flow (FCF) guidance to $146 million. Based on this activity we expect to grow production and generate significant FCF in 2021."
"These changes to our 2019 and 2020 guidance reflect our ability to make decisions in a fast-moving world," Mr. DeIuliis continued. "Commodity prices dropped, which meant our capital allocation options adjusted, and our decision making changed with them. Debt capital allocation became more attractive due to the disconnect in the credit markets, and we want to take advantage of it by generating FCF in 2020 and using it to pay down debt. Share buybacks remain very attractive and we see ample time to continue reducing our share count meaningfully. With the 2020 production guidance change, we simply built inventory and an easier path for 2021 and beyond. We designed the company to navigate and do well in the challenging world the industry faces today."
Don Rush, CFO, added, "Following the end of the quarter, the company completed its scheduled semi-annual borrowing base redetermination under its revolving credit facility, resulting in the lending group increasing CNX's borrowing base from $2.1 billion to $2.3 billion."
The following table represents certain non-GAAP financial measures used by the company:1
Quarter |
Quarter |
Quarter |
Quarter |
|||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||
September 30, 2019 |
September 30, 2018 |
September 30, 2019 |
September 30, 2018 |
|||||||||||||||||||
(Dollars in millions, |
Stand-alone |
% Increase/(Decrease) |
Consolidated |
% Increase/ (Decrease) |
||||||||||||||||||
Adjusted Net (Loss) Income |
$ |
(11) |
$ |
26 |
(142.3) |
% |
$ |
31 |
$ |
57 |
(45.6) |
% |
||||||||||
Total Shares Outstanding (in millions)2 |
186.6 |
203.6 |
(8.3) |
% |
— |
— |
— |
% |
||||||||||||||
Adjusted Net (Loss) Income per Outstanding Share2 |
$ |
(0.06) |
$ |
0.13 |
(146.2) |
% |
— |
— |
— |
% |
||||||||||||
Adjusted EBITDAX |
$ |
159 |
$ |
203 |
(21.7) |
% |
$ |
204 |
$ |
239 |
(14.6) |
% |
||||||||||
Adjusted EBITDAX per Outstanding Share2 |
$ |
0.85 |
$ |
1.00 |
(15.0) |
% |
$ |
1.09 |
$ |
1.17 |
(6.8) |
% |
||||||||||
Capital Expenditures3 |
$ |
272 |
$ |
255 |
6.7 |
% |
— |
— |
— |
% |
1The Non-GAAP financial measures in the table above are defined and reconciled to GAAP net income, under the caption "Non-GAAP Financial Measures" below. |
|
2For the quarter ended September 30, 2019, total shares outstanding of 186,586,751 (Non-GAAP) are as of October 15, 2019. For the quarter ended September 30, 2018, total shares outstanding of 203,599,810 (Non-GAAP) are as of October 16, 2018. |
|
3Capital expenditures exclude $63.9 million and $42.3 million of total capital investment net to CNXM in the third quarter of 2019 and 2018, respectively, as reported in CNXM Third Quarter Results. |
The following table highlights operating cash margins and fully burdened cash margins:
Quarter |
Quarter |
|||||||
Ended |
Ended |
|||||||
(Per Mcfe) |
September 30, 2019 |
September 30, 2018 |
||||||
Average Sales Price - E&P |
$ |
2.51 |
$ |
2.92 |
||||
Total Production Cash Costs1 |
1.13 |
1.04 |
||||||
Operating Cash Margin |
$ |
1.38 |
$ |
1.88 |
||||
Operating Cash Margin (%) |
55 |
% |
64 |
% |
||||
Total Fully Burdened Cash Costs2 |
$ |
1.69 |
$ |
1.63 |
||||
Fully Burdened Cash Margin |
$ |
0.82 |
$ |
1.29 |
||||
Fully Burdened Cash Margin (%) |
33 |
% |
44 |
% |
1See the "Price and Cost Data Per Mcfe" table below for reconciliation to total Production Costs. |
|
2Fully burdened cash costs includes production cash costs, selling, general and administrative (SG&A) cash costs, other operating cash expense, other cash (income) expense, and interest expense. |
Operations:
During the quarter, we used up to three horizontal rigs and drilled 15 wells. The company currently has two rigs in operation, which it expects to run into 2020, along with one frac crew.
During the quarter, the company utilized three frac crews to complete 20 wells, which included 14 Marcellus Shale wells and six Utica Shale wells. CNX has been a first mover in the basin by entering into a long-term contract with Evolution, an all-electric frac crew. The Evolution crew started operations in the second quarter of 2019 and is currently providing fuel savings of approximately $250,000 per well, which is a savings increase of approximately $70,000 per well over the prior expected savings that were highlighted last quarter.
CNX turned-in-line 24 wells in the third quarter, of which 10 were turned-in-line at the end of the third quarter. The 24 wells consisted of the following: 10 Marcellus Shale wells in Greene County, Pennsylvania; five Marcellus Shale wells in Tyler County, West Virginia; four Utica Shale wells in Marshall County, West Virginia; three Utica Shale wells in Greene County, Pennsylvania; and two Utica Shale wells in Monroe County, Ohio.
CNX's natural gas and liquids production in the quarter came from the following categories:
Quarter |
Quarter |
Quarter |
|||||||||||||
Ended |
Ended |
Ended |
|||||||||||||
September 30, 2019 |
September 30, 2018 |
% Increase/ (Decrease) |
June 30, 2019 |
% Increase/ (Decrease) |
|||||||||||
GAS |
|||||||||||||||
Marcellus Sales Volumes (Bcf) |
79.2 |
61.9 |
27.9 |
% |
84.3 |
(6.0) |
% |
||||||||
Utica Sales Volumes (Bcf) |
26.8 |
31.9 |
(16.0) |
% |
28.1 |
(4.6) |
% |
||||||||
CBM Sales Volumes (Bcf) |
14.1 |
14.7 |
(4.1) |
% |
13.9 |
1.4 |
% |
||||||||
Other Sales Volumes (Bcf) |
0.1 |
— |
100.0 |
% |
0.1 |
— |
% |
||||||||
LIQUIDS1 |
|||||||||||||||
NGLs Sales Volumes (Bcfe) |
8.0 |
10.0 |
(20.0) |
% |
7.9 |
1.3 |
% |
||||||||
Oil Sales Volumes (Bcfe) |
— |
0.1 |
(100.0) |
% |
— |
— |
% |
||||||||
Condensate Sales Volumes (Bcfe) |
0.1 |
0.4 |
(75.0) |
% |
0.2 |
(50.0) |
% |
||||||||
TOTAL (Bcfe) |
128.3 |
119.0 |
7.8 |
% |
134.5 |
(4.6) |
% |
||||||||
Average Daily Production (MMcfe) |
1,394.6 |
1,293.0 |
1,477.6 |
1NGLs, Oil and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. |
PRICE AND COST DATA PER MCFE — Quarter-to-Quarter Comparison: |
||||||||||||
Quarter |
Quarter |
Quarter |
||||||||||
Ended |
Ended |
Ended |
||||||||||
(Per Mcfe) |
September 30, 2019 |
September 30, 2018 |
June 30, 2019 |
|||||||||
Average Sales Price - Gas |
$ |
2.04 |
$ |
2.71 |
$ |
2.51 |
||||||
Average Gain on Commodity Derivative Instruments - Cash Settlement- Gas |
$ |
0.47 |
$ |
0.03 |
$ |
0.08 |
||||||
Average Sales Price - Oil* |
$ |
9.44 |
$ |
10.50 |
$ |
8.42 |
||||||
Average Sales Price - NGLs* |
$ |
2.28 |
$ |
4.68 |
$ |
3.06 |
||||||
Average Sales Price - Condensate* |
$ |
12.59 |
$ |
9.76 |
$ |
7.56 |
||||||
Average Sales Price - Total Company |
$ |
2.51 |
$ |
2.92 |
$ |
2.63 |
||||||
Lease Operating Expense (LOE) |
$ |
0.11 |
$ |
0.14 |
$ |
0.15 |
||||||
Production, Ad Valorem, and Other Fees |
0.05 |
0.06 |
0.05 |
|||||||||
Transportation, Gathering and Compression |
0.97 |
0.84 |
0.98 |
|||||||||
Depreciation, Depletion and Amortization (DD&A) |
0.86 |
0.93 |
0.89 |
|||||||||
Total Production Costs |
$ |
1.99 |
$ |
1.97 |
$ |
2.07 |
||||||
Total Production Cash Costs, before DD&A |
$ |
1.13 |
$ |
1.04 |
$ |
1.18 |
||||||
Cash Margin, before DD&A |
$ |
1.38 |
$ |
1.88 |
$ |
1.45 |
*NGLs, Oil, and Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil, NGLs, condensate, and natural gas prices. |
|
Note: "Total Production Costs" excludes Selling, General, and Administration and Other Operating Expenses. |
In the third quarter of 2019, total production costs were higher, compared to the year-earlier quarter, due to increased transportation, gathering, and compression costs, offset in part by improvements to LOE, production taxes, and DD&A. The primary driver to the increased transportation, gathering, and compression costs was due to higher CNXM fees and firm transportation costs associated with new transportation contracts. The improvement to LOE was driven by decreased employee costs and increased production volumes.
Marketing:
For the third quarter of 2019, CNX's average sales price for natural gas, natural gas liquids (NGLs), oil, and condensate was $2.51 per Mcfe. The average realized price for all liquids for the third quarter of 2019 was $14.26 per barrel.
CNX's weighted average differential from NYMEX in the third quarter of 2019 was negative $0.33 per MMBtu. CNX's average sales price for natural gas before hedging decreased 18.7% to $2.04 per Mcf compared with the average sales price of $2.51 per Mcf in the second quarter of 2019. This decrease results primarily from a lower Henry Hub price reflecting current general market conditions coupled with a wider differential. Including the impact of cash settlements from hedging, CNX's average sales price for natural gas was $0.08 per Mcf, or 3.1%, lower than the second quarter and $0.23 per Mcf, or 8.4%, lower than last year's third quarter.
Total hedged natural gas production in the 2019 fourth quarter is 115.7 Bcf. The annual gas hedge position is shown in the table below:
2019 |
2020 |
||||
Volumes Hedged (Bcf), as of 10/9/19 |
405.2* |
489.6 |
|||
*Includes actual settlements of 312.5 Bcf. |
CNX's hedged gas volumes include a combination of NYMEX financial hedges, index (NYMEX and basis) financial hedges, and physical fixed price sales. In addition, to protect the NYMEX hedge volumes from basis exposure, CNX enters into basis-only financial hedges and physical sales with fixed basis at certain sales points. CNX's gas hedge position through 2023 as of October 9, 2019 is shown in the table below:
Q4 2019 |
2019 |
2020 |
2021 |
2022 |
2023 |
|||||||||||||||||||
NYMEX Only Hedges |
||||||||||||||||||||||||
Volumes (Bcf) |
112.3 |
388.4 |
478.3 |
393.2 |
264.7 |
117.5 |
||||||||||||||||||
Average Prices ($/Mcf) |
$ |
2.98 |
$ |
3.02 |
$ |
2.97 |
$ |
2.93 |
$ |
3.01 |
$ |
2.90 |
||||||||||||
Physical Fixed Price Sales and Index Hedges |
||||||||||||||||||||||||
Volumes (Bcf) |
3.4 |
16.8 |
11.3 |
21.0 |
13.4 |
27.1 |
||||||||||||||||||
Average Prices ($/Mcf) |
$ |
2.54 |
$ |
2.63 |
$ |
2.45 |
$ |
2.50 |
$ |
2.60 |
$ |
2.14 |
||||||||||||
Total Volumes Hedged (Bcf)1 |
115.7 |
405.2 |
489.6 |
414.2 |
278.1 |
144.6 |
||||||||||||||||||
NYMEX + Basis (fully-covered volumes)2 |
||||||||||||||||||||||||
Volumes (Bcf) |
112.9 |
403.4 |
484.0 |
414.2 |
268.0 |
142.1 |
||||||||||||||||||
Average Prices ($/Mcf) |
$ |
2.65 |
$ |
2.68 |
$ |
2.54 |
$ |
2.40 |
$ |
2.42 |
$ |
2.27 |
||||||||||||
NYMEX Only Hedges Exposed to Basis |
||||||||||||||||||||||||
Volumes (Bcf) |
2.8 |
1.8 |
5.6 |
— |
10.1 |
2.5 |
||||||||||||||||||
Average Prices ($/Mcf) |
$ |
2.98 |
$ |
3.02 |
$ |
2.97 |
$ |
— |
$ |
3.01 |
$ |
2.90 |
||||||||||||
Total Volumes Hedged (Bcf)1 |
115.7 |
405.2 |
489.6 |
414.2 |
278.1 |
144.6 |
12021 excludes 8.1 Bcf of physical basis sales not matched with NYMEX hedges. |
2Includes physical sales with fixed basis in Q4 2019, 2019, 2020, 2021, 2022, and 2023 of 31.1 Bcf, 127.8 Bcf, 88.9 Bcf, 75.9 Bcf, 42.0 Bcf, and 3.4 Bcf, respectively. |
During the third quarter of 2019, CNX added additional NYMEX natural gas hedges of 28.0 Bcf, and 24.9 Bcf for 2019, and 2020, respectively. To help mitigate basis exposure on NYMEX hedges, in the third quarter CNX added 27.7 Bcf, 44.1 Bcf, 33.6 Bcf, and 25.2 Bcf, of basis hedges for 2019, 2020, 2021, and 2022, respectively.
Finance:
At September 30, 2019, CNX's Stand-alone net debt to trailing-twelve-months (TTM) adjusted Stand-alone EBITDAX (including distributions from CNXM) was 2.4x. On a consolidated basis, CNX's net debt to TTM adjusted EBITDAX was 2.6x.
At September 30, 2019, CNX's credit facility had $613 million of borrowings outstanding and $199 million of letters of credit outstanding, leaving $1,288 million of unused capacity. In addition, CNX holds 21.7 million CNXM limited partnership units, with a current market value of approximately $283 million as of October 15, 2019, a 2% General Partner interest, and incentive distribution rights.
During the quarter, the company repurchased 1,000,000 shares. Since the October 2017 inception of the current share repurchase program and as of October 15, 2019, CNX has repurchased a total of approximately 45.2 million shares for approximately $602 million, resulting in 186,586,751 shares outstanding, which is an approximate 19% reduction to total shares outstanding. The company has approximately $148 million remaining on its current $750 million share repurchase program, which is not subject to an expiration date.
Guidance and Capital Update:
CNX is updating 2019 production volumes to 530-540 Bcfe, compared to the previous guidance of 510-530 Bcfe. CNX is updating 2020 production volumes to 535-565 Bcfe, compared to the previous guidance of 570-595 Bcfe. The updated guidance equates to an increase of 3% over 2019, based on the midpoints of the updated guidance.
Adjusted EBITDAX(1) |
Previous |
Updated |
Previous |
Updated |
||||||||||||
2019E |
2019E |
2020E |
2020E |
|||||||||||||
($ in millions, except per share data) |
Low |
High |
Low |
High |
Low |
High |
Low |
High |
||||||||
Stand-Alone (Including Distributions)(2) |
$740 |
- |
$760 |
$745 |
- |
$765 |
$770 |
- |
$815 |
$710 |
- |
$755 |
||||
Stand-Alone (Including Distributions)(2) per Share |
$3.95 |
- |
$4.05 |
$3.99 |
- |
$4.10 |
$4.11 |
- |
$4.35 |
$3.81 |
- |
$4.05 |
||||
Consolidated |
$885 |
- |
$925 |
$910 |
- |
$940 |
$945 |
- |
$1,010 |
$885 |
- |
$950 |
(1) Updated EBITDAX based on NYMEX forward strip as of October 9, 2019. |
|
(2) 2019 and 2020 include approximately $55 million and $75 million, respectively, of projected distributions from ownership interests in CNXM. Per share calculation uses 186.6 million shares outstanding as of October 15, 2019. |
|
Note: CNX is unable to provide a reconciliation of projected financial results contained in this release, including FCF, adjusted EBITAX, fully burdened cash costs and other metrics to their respective comparable financial measure calculated in accordance with GAAP. This is due to our inability to calculate the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items. |
Despite lower natural gas prices since the previous guidance update, the company expects full-year 2019 adjusted EBITDAX to increase due to higher production volumes and lower costs. The updated guidance assumes 2019 NYMEX gas price in the fourth quarter of $2.37 per MMBtu on open volumes and a basis differential of negative $0.38 per MMBtu. This compares to the previous guidance, using gas prices as of July 8, 2019, which assumed a second half 2019 NYMEX gas price of $2.45 per MMBtu and an average basis differential of negative $0.30 per MMBtu.
The company expects lower 2020 adjusted EBITDAX, compared to the previous guidance update, due to lower volumes and a decline in natural gas prices since July 8, 2019, which is the date used for the previous guidance. The updated guidance assumes 32.5 Bcfe less production volumes in 2020, compared to the previous guidance update; however, 15 Bcfe was accelerated from 2020 into 2019, which is responsible for the production increase in 2019. Also, the updated guidance assumes 2020 NYMEX gas price of $2.40 per MMBtu on open volumes and an average basis differential of negative $0.30 per MMBtu. This compares to the previous guidance, which assumed a 2020 NYMEX gas price of $2.55 per MMBtu and an average basis differential of negative $0.30 per MMBtu.
Despite a lower commodity strip, the company expects to generate $146 million of FCF in 2020, which is an increase compared to the previous guidance of $135 million, as a result of offsetting reductions in capital expenditures and SG&A savings. The updated 2019 guidance is also improved with EBITDAX increasing and capital expenditures declining, compared to the previous update.
Capital Expenditures |
Previous |
Updated |
Previous |
Updated |
||||||||||||
2019E |
2019E |
2020E |
2020E |
|||||||||||||
($ in millions) |
Low |
High |
Low |
High |
Low |
High |
Low |
High |
||||||||
Drilling & Completion (D&C) |
$695 |
- |
$745 |
$690 |
- |
$715 |
$450 |
- |
$520 |
$400 |
- |
$450 |
||||
Non-D&C |
$200 |
- |
$200 |
$200 |
- |
$200 |
$90 |
- |
$100 |
$90 |
- |
$100 |
||||
Total Stand-Alone Capital |
$895 |
- |
$945 |
$890 |
- |
$915 |
$540 |
- |
$620 |
$490 |
- |
$550 |
||||
CNX Midstream LP Capital |
$310 |
- |
$330 |
$310 |
- |
$330 |
$80 |
- |
$100 |
$80 |
- |
$100 |
||||
Total Consolidated Capital |
$1,205 |
- |
$1,275 |
$1,200 |
- |
$1,245 |
$620 |
- |
$720 |
$570 |
- |
$650 |
||||
Free Cash Flow (FCF) |
— |
— |
$135 |
$146 |
Third quarter 2019 capital expenditure came in lower than expected, and the company is reducing its full-year 2019 capital guidance, while increasing production volumes. For 2020, the company is reducing its full-year capital guidance and production volumes, primarily due to plan changes and associated timing.
For 2019 and 2020 combined, the company expects to spend approximately $80 million less capital than previously announced, resulting in 17.5 Bcfe less production, after accounting for the 15 Bcfe accelerated from 2020 into 2019.
About CNX
CNX Resources Corporation (NYSE: CNX) is one of the largest independent natural gas exploration, development and production companies, with operations centered in the major shale formations of the Appalachian basin. The company deploys an organic growth strategy focused on responsibly developing its resource base. As of December 31, 2018, CNX had 7.9 trillion cubic feet equivalent of proved natural gas reserves. The company is a member of the Standard & Poor's Midcap 400 Index. Additional information may be found at www.cnx.com.
Non-GAAP Financial Measures
Definitions: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX consolidated is defined as EBITDAX after adjusting for the discrete items listed below. Stand-alone EBITDAX is defined as the adjusted EBITDAX related to both CNX's E&P and Unallocated segments (See Note 24 - Segment Information in CNX's Annual Report on Form 10-K as filed with the Securities and Exchange Commission for more information) plus the distributions CNX receives during the current period from CNXM related to its limited partnership units, general partner units, and incentive distribution rights (IDRs). Although EBIT, EBITDAX, Stand-alone EBITDAX and adjusted EBITDAX consolidated are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDAX, Stand-alone EBITDAX or adjusted EBITDAX consolidated identically, the presentation here may not be comparable to similarly titled measures of other companies. Adjusted EBITDAX per outstanding share, adjusted net income per outstanding share, Stand-alone EBITDAX and adjusted EBITDAX consolidated, with shares measured as of October 15, 2019, are not measures of performance calculated in accordance with generally accepted accounting principles. Management believes that these financial measures are useful to an investor in evaluating CNX Resources because (i) analysts utilize these metrics when evaluating company performance and, (ii) given that we have an active share repurchase program, analysts have requested this information as of a recent practicable date, and we want to provide updated information to investors.
Reconciliation of EBIT, EBITDAX, adjusted EBITDAX consolidated, Stand-alone EBITDAX, adjusted net income, net debt and TTM EBITDAX to financial net income is as follows:
Three Months Ended |
|||||||||||
September 30, |
|||||||||||
2019 |
2019 |
2019 |
|||||||||
Dollars in thousands |
Stand-alone1 |
Midstream |
Total Company |
||||||||
Net Income |
$ |
102,219 |
$ |
41,741 |
$ |
143,960 |
|||||
Interest Expense |
30,783 |
7,622 |
38,405 |
||||||||
Interest Income |
(1,078) |
— |
(1,078) |
||||||||
Income Tax Expense |
48,902 |
— |
48,902 |
||||||||
Earnings Before Interest & Taxes (EBIT) |
$ |
180,826 |
$ |
49,363 |
$ |
230,189 |
|||||
Depreciation, Depletion & Amortization |
111,839 |
8,620 |
120,459 |
||||||||
Exploration Expense |
6,075 |
— |
6,075 |
||||||||
Earnings Before Interest, Taxes, DD&A and Exploration (EBITDAX) |
$ |
298,740 |
$ |
57,983 |
$ |
356,723 |
|||||
Adjustments: |
|||||||||||
Unrealized Gain on Commodity Derivative Instruments |
$ |
(156,872) |
$ |
— |
$ |
(156,872) |
|||||
Stock-Based Compensation |
1,453 |
328 |
1,781 |
||||||||
Severance Expense |
1,563 |
436 |
1,999 |
||||||||
Total Pre-tax Adjustments |
$ |
(153,856) |
$ |
764 |
$ |
(153,092) |
|||||
Adjusted EBITDAX Consolidated |
$ |
144,884 |
$ |
58,747 |
$ |
203,631 |
|||||
Midstream Distributions |
14,388 |
N/A |
N/A |
||||||||
Stand-alone EBITDAX |
$ |
159,272 |
N/A |
N/A |
1 Stand-alone includes both CNX's E&P and Unallocated segments. See Note 24 - Segment Information in CNX's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission, for more information. |
Three Months Ended |
|||||||||||
September 30, |
|||||||||||
2018 |
2018 |
2018 |
|||||||||
Dollars in thousands |
Stand-alone1 |
Midstream |
Total Company |
||||||||
Net Income |
$ |
115,583 |
$ |
31,173 |
$ |
146,756 |
|||||
Interest Expense |
28,467 |
7,256 |
35,723 |
||||||||
Interest Income |
(42) |
— |
(42) |
||||||||
Income Tax Expense |
56,678 |
— |
56,678 |
||||||||
Earnings Before Interest & Taxes (EBIT) |
$ |
200,686 |
$ |
38,429 |
$ |
239,115 |
|||||
Depreciation, Depletion & Amortization |
111,844 |
7,741 |
119,585 |
||||||||
Exploration Expense |
3,321 |
— |
3,321 |
||||||||
Earnings Before Interest, Taxes, DD&A and Exploration (EBITDAX) |
$ |
315,851 |
$ |
46,170 |
$ |
362,021 |
|||||
Adjustments: |
|||||||||||
Unrealized Gain on Commodity Derivative Instruments |
$ |
(15,181) |
$ |
— |
$ |
(15,181) |
|||||
Gain on Certain Asset Sales |
(130,849) |
— |
(130,849) |
||||||||
Severance Expense |
513 |
— |
513 |
||||||||
Litigation Settlements |
2,000 |
— |
2,000 |
||||||||
Loss on Debt Extinguishment |
15,385 |
— |
15,385 |
||||||||
Stock-Based Compensation |
4,737 |
506 |
5,243 |
||||||||
Total Pre-tax Adjustments |
$ |
(123,395) |
$ |
506 |
$ |
(122,889) |
|||||
Adjusted EBITDAX Consolidated |
$ |
192,456 |
$ |
46,676 |
$ |
239,132 |
|||||
Midstream Distributions |
10,078 |
N/A |
N/A |
||||||||
Stand-alone EBITDAX |
$ |
202,534 |
N/A |
N/A |
1 Stand-alone includes both CNX's E&P and Unallocated segments. See Note 24 - Segment Information in CNX's Annual Report on Form 10-K for fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission, for more information. |
Reconciliation of Adjusted Net Income
Three Months Ended |
Three Months Ended |
||||||||||||||
September 30, |
September 30, |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Dollars in thousands |
Stand-alone1 |
Stand-alone1 |
Total Company |
Total Company |
|||||||||||
Net Income from EBITDAX Reconciliation |
$ |
102,219 |
$ |
115,583 |
$ |
143,960 |
$ |
146,756 |
|||||||
Adjustments: |
|||||||||||||||
Total Pre-tax Adjustments from EBITDAX Reconciliation |
(153,856) |
(123,395) |
(153,092) |
(122,889) |
|||||||||||
Tax effect of Adjustments |
40,464 |
33,465 |
40,263 |
33,328 |
|||||||||||
Adjusted Net (Loss) Income |
$ |
(11,173) |
$ |
25,653 |
$ |
31,131 |
$ |
57,195 |
1 Stand-alone includes both CNX's E&P and Unallocated segments. See Note 24 - Segment Information in CNX's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission, for more information. |
Management uses net debt to determine the company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. Management believes that using net debt attributable to CNX Resources shareholders is useful to investors in determining the company's leverage ratio since the company could choose to use its cash and cash equivalents to retire debt.
Net Debt |
September 30, 2019 |
||||||||||
Stand-alone1 |
Midstream |
Total Company |
|||||||||
Total Long-Term Debt (GAAP) |
$ |
2,000,309 |
$ |
639,925 |
$ |
2,640,234 |
|||||
Less Cash and Cash Equivalents |
2,847 |
2,637 |
5,484 |
||||||||
Net Debt (Non-GAAP) |
$ |
1,997,462 |
$ |
637,288 |
$ |
2,634,750 |
|||||
1Stand-alone includes both CNX's E&P and Unallocated segments. |
Reconciliation of Trailing-Twelve-Months (TTM) EBITDAX by Quarter
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||
December 31, |
March 31, |
June 30, |
September 30, |
September 30, |
|||||||||||||||
Dollars in thousands |
2018 |
2019 |
2019 |
2019 |
2019 |
||||||||||||||
Net Income (Loss) |
$ |
129,415 |
$ |
(64,651) |
$ |
192,694 |
$ |
143,960 |
$ |
401,418 |
|||||||||
Interest Expense |
33,222 |
35,771 |
40,152 |
38,405 |
147,550 |
||||||||||||||
Interest Income |
1 |
(722) |
(71) |
(1,078) |
(1,870) |
||||||||||||||
Income Tax (Benefit) Expense |
(23,713) |
(11,559) |
40,791 |
48,902 |
54,421 |
||||||||||||||
Earnings Before Interest & Taxes (EBIT) |
$ |
138,925 |
$ |
(41,161) |
$ |
273,566 |
$ |
230,189 |
$ |
601,519 |
|||||||||
Depreciation, Depletion & Amortization |
130,084 |
125,161 |
128,999 |
120,459 |
504,703 |
||||||||||||||
Exploration Expense |
2,633 |
3,258 |
5,567 |
6,075 |
17,533 |
||||||||||||||
Earnings Before Interest, Taxes, DD&A, and Exploration (EBITDAX) |
$ |
271,642 |
$ |
87,258 |
$ |
408,132 |
$ |
356,723 |
$ |
1,123,755 |
|||||||||
Adjustments: |
|||||||||||||||||||
Unrealized Loss (Gain) on Commodity Derivative Instruments |
$ |
36,727 |
$ |
153,994 |
$ |
(210,909) |
$ |
(156,872) |
$ |
(177,060) |
|||||||||
Loss on Certain Asset Sales and Abandonments |
96 |
3,564 |
— |
— |
3,660 |
||||||||||||||
Severance Expense |
(55) |
— |
1,182 |
1,999 |
3,126 |
||||||||||||||
Stock Based Compensation |
5,478 |
10,903 |
23,873 |
1,781 |
42,035 |
||||||||||||||
(Gain) Loss on Debt Extinguishment |
(315) |
7,537 |
77 |
— |
7,299 |
||||||||||||||
Shaw Event |
— |
4,305 |
— |
— |
4,305 |
||||||||||||||
Total Pre-tax Adjustments |
$ |
41,931 |
$ |
180,303 |
$ |
(185,777) |
$ |
(153,092) |
$ |
(116,635) |
|||||||||
Adjusted EBITDAX Consolidated TTM |
$ |
313,573 |
$ |
267,561 |
$ |
222,355 |
$ |
203,631 |
$ |
1,007,120 |
Reconciliation of Stand-alone EBITDAX Trailing-Twelve-Months (TTM)
Twelve Months Ended September 30, 2019 |
|||||||||||
Dollars in thousands |
Stand-alone1 |
Midstream |
Total Company |
||||||||
Net Income |
$ |
243,371 |
$ |
158,047 |
$ |
401,418 |
|||||
Interest Expense |
118,153 |
29,397 |
147,550 |
||||||||
Interest Income |
(1,870) |
— |
(1,870) |
||||||||
Income Tax Expense |
54,421 |
— |
54,421 |
||||||||
Earnings Before Interest & Taxes (EBIT) |
$ |
414,075 |
$ |
187,444 |
$ |
601,519 |
|||||
Depreciation, Depletion & Amortization |
471,933 |
32,770 |
504,703 |
||||||||
Exploration Expense |
17,533 |
— |
17,533 |
||||||||
Earnings Before Interest, Taxes, DD&A, and Exploration (EBITDAX) |
$ |
903,541 |
$ |
220,214 |
$ |
1,123,755 |
|||||
Adjustments: |
|||||||||||
Unrealized Gain on Commodity Derivative Instruments |
$ |
(177,060) |
$ |
— |
$ |
(177,060) |
|||||
(Gain) Loss on Certain Asset Sales and Abandonments |
(3,569) |
7,229 |
3,660 |
||||||||
Severance Expense |
2,690 |
436 |
3,126 |
||||||||
Stock Based Compensation |
39,919 |
2,116 |
42,035 |
||||||||
Loss on Debt Extinguishment |
7,299 |
— |
7,299 |
||||||||
Shaw Event |
4,305 |
— |
4,305 |
||||||||
Total Pre-tax Adjustments |
$ |
(126,416) |
$ |
9,781 |
$ |
(116,635) |
|||||
Adjusted EBITDAX Consolidated TTM |
$ |
777,125 |
$ |
229,995 |
$ |
1,007,120 |
|||||
Midstream Distributions |
50,869 |
N/A |
N/A |
||||||||
Stand-alone EBITDAX TTM |
$ |
827,994 |
N/A |
N/A |
|||||||
1 Stand-alone includes both CNX's E&P and Unallocated Segments. |
Cautionary Statements
We are including the following cautionary statement in this press release to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of us. With the exception of historical matters, the matters discussed in this press release are forward-looking statements (as defined in 21E of the Securities Exchange Act of 1934 (the "Exchange Act")) that involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," "will," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe a strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this press release speak only as of the date of this press release; we disclaim any obligation to update these statements. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: prices for natural gas and natural gas liquids are volatile and can fluctuate widely based upon a number of factors beyond our control including oversupply relative to the demand for our products, weather and the price and availability of alternative fuels; an extended decline in the prices we receive for our natural gas and natural gas liquids affecting our operating results and cash flows; our dependence on gathering, processing and transportation facilities and other midstream facilities owned by CNXM and others; disruption of, capacity constraints in, or proximity to pipeline systems that could limit sales of our natural gas and natural gas liquids, and decreases in availability of third-party pipelines or other midstream facilities interconnected to CNXM's gathering systems; uncertainties in estimating our economically recoverable natural gas reserves, and inaccuracies in our estimates; the high-risk nature of drilling natural gas wells; our identified drilling locations are scheduled out over multiple years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling; the impact of potential, as well as any adopted environmental regulations including any relating to greenhouse gas emissions on our operating costs as well as on the market for natural gas and for our securities; environmental regulations introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities; the risks inherent in natural gas operations, including our reliance upon third party contractors, being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, explosions, accidents and weather conditions that could impact financial results; decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials to support our operations; if natural gas prices remain depressed or drilling efforts are unsuccessful, we may be required to record write-downs of our proved natural gas properties; a loss of our competitive position because of the competitive nature of the natural gas industry or overcapacity in this industry impairing our profitability; deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide financial downturn, or negative credit market conditions; hedging activities may prevent us from benefiting from price increases and may expose us to other risks; our inability to collect payments from customers if their creditworthiness declines or if they fail to honor their contracts; existing and future government laws, regulations and other legal requirements that govern our business may increase our costs of doing business and may restrict our operations; significant costs and liabilities may be incurred as a result of pipeline and related facility integrity management program testing and any related pipeline repair or preventative or remedial measures; our ability to find adequate water sources for our use in natural gas drilling, or our ability to dispose of or recycle water used or removed from strata in connection with our gas operations at a reasonable cost and within applicable environmental rules; the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act; acquisitions and divestitures we anticipate may not occur or produce anticipated benefits; risks associated with our debt; failure to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves; decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, and lending requirements or regulations; we may operate a portion of our business with one or more joint venture partners or in circumstances where we are not the operator, which may restrict our operational and corporate flexibility and we may not realize the benefits we expect to realize from a joint venture; changes in federal or state income tax laws, particularly in the area of intangible drilling costs; challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities; our development and exploration projects, as well as CNXM's midstream system development, require substantial capital expenditures; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; construction of new gathering, compression, dehydration, treating or other midstream assets by CNXM may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks; our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel; we may not achieve some or all of the expected benefits of the separation of CONSOL Energy; CONSOL Energy may fail to perform under various transaction agreements that were executed as part of the separation, including with respect to indemnification obligations; CONSOL Energy may not be able to satisfy its indemnification obligations in the future and such indemnities may not be sufficient to hold us harmless from the full amount of liabilities for which CONSOL Energy has been allocated responsibility; and the separation could result in substantial tax liability; and, with respect to the sale of the Ohio Joint Venture Utica assets, disruption to our business, including customer, employee and supplier relationships resulting from this transaction, and the impact of the transaction on our future operating and financial results. Additional factors are described in detail under the captions "Forward Looking Statements" and "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission, as supplemented by our quarterly reports on Form 10-Q.
CNX RESOURCES CORPORATION AND SUBSIDIARIES |
|||||||||||||||
(Dollars in thousands, except per share data) |
Three Months Ended |
Nine Months Ended |
|||||||||||||
(Unaudited) |
September 30, |
September 30, |
|||||||||||||
Revenues and Other Operating Income: |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Natural Gas, NGLs and Oil Revenue |
$ |
265,051 |
$ |
344,712 |
$ |
1,043,862 |
$ |
1,084,851 |
|||||||
Gain on Commodity Derivative Instruments |
213,913 |
18,005 |
240,118 |
78,752 |
|||||||||||
Purchased Gas Revenue |
29,192 |
10,560 |
64,181 |
38,546 |
|||||||||||
Midstream Revenue |
18,525 |
19,946 |
55,863 |
69,684 |
|||||||||||
Other Operating Income |
3,316 |
3,903 |
9,436 |
23,146 |
|||||||||||
Total Revenue and Other Operating Income |
529,997 |
397,126 |
1,413,460 |
1,294,979 |
|||||||||||
Costs and Expenses: |
|||||||||||||||
Operating Expense |
|||||||||||||||
Lease Operating Expense |
14,202 |
16,202 |
52,706 |
78,350 |
|||||||||||
Transportation, Gathering and Compression |
80,193 |
68,907 |
244,217 |
230,935 |
|||||||||||
Production, Ad Valorem, and Other Fees |
6,127 |
7,342 |
20,103 |
24,277 |
|||||||||||
Depreciation, Depletion and Amortization |
120,459 |
119,585 |
374,619 |
363,338 |
|||||||||||
Exploration and Production Related Other Costs |
6,075 |
3,321 |
14,900 |
9,401 |
|||||||||||
Purchased Gas Costs |
27,490 |
10,602 |
62,476 |
37,404 |
|||||||||||
Impairment of Other Intangible Assets |
— |
— |
— |
18,650 |
|||||||||||
Selling, General, and Administrative Costs |
24,307 |
32,435 |
109,016 |
98,693 |
|||||||||||
Other Operating Expense |
19,746 |
17,405 |
61,197 |
51,238 |
|||||||||||
Total Operating Expense |
298,599 |
275,799 |
939,234 |
912,286 |
|||||||||||
Other Expense (Income) |
|||||||||||||||
Other Expense (Income) |
3,439 |
1,105 |
2,757 |
(4,812) |
|||||||||||
Gain on Asset Sales and Abandonments |
(3,308) |
(134,320) |
(610) |
(148,942) |
|||||||||||
Gain on Previously Held Equity Interest |
— |
— |
— |
(623,663) |
|||||||||||
Loss on Debt Extinguishment |
— |
15,385 |
7,614 |
54,433 |
|||||||||||
Interest Expense |
38,405 |
35,723 |
114,328 |
112,712 |
|||||||||||
Total Other Expense (Income) |
38,536 |
(82,107) |
124,089 |
(610,272) |
|||||||||||
Total Costs and Expenses |
337,135 |
193,692 |
1,063,323 |
302,014 |
|||||||||||
Earnings Before Income Tax |
192,862 |
203,434 |
350,137 |
992,965 |
|||||||||||
Income Tax Expense |
48,902 |
56,678 |
78,133 |
239,269 |
|||||||||||
Net Income |
143,960 |
146,756 |
272,004 |
753,696 |
|||||||||||
Less: Net Income Attributable to Noncontrolling Interest |
28,422 |
21,727 |
81,325 |
59,090 |
|||||||||||
Net Income Attributable to CNX Resources Shareholders |
$ |
115,538 |
$ |
125,029 |
$ |
190,679 |
$ |
694,606 |
|||||||
Earnings per Share |
|||||||||||||||
Basic |
$ |
0.62 |
$ |
0.59 |
$ |
1.01 |
$ |
3.22 |
|||||||
Diluted |
$ |
0.61 |
$ |
0.59 |
$ |
1.01 |
$ |
3.18 |
|||||||
Dividends Declared |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
CNX RESOURCES CORPORATION AND SUBSIDIARIES |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
(Dollars in thousands) |
September 30, |
September 30, |
|||||||||||||
(Unaudited) |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Net Income |
$ |
143,960 |
$ |
146,756 |
$ |
272,004 |
$ |
753,696 |
|||||||
Other Comprehensive Income: |
|||||||||||||||
Actuarially Determined Long-Term Liability Adjustments (Net of tax: |
41 |
22 |
126 |
2,004 |
|||||||||||
Comprehensive Income |
144,001 |
146,778 |
272,130 |
755,700 |
|||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interest |
28,422 |
21,727 |
81,325 |
59,090 |
|||||||||||
Comprehensive Income Attributable to CNX Resources Shareholders |
$ |
115,579 |
$ |
125,051 |
$ |
190,805 |
$ |
696,610 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES |
|||||||
(Unaudited) |
|||||||
(Dollars in thousands) |
September 30, |
December 31, |
|||||
ASSETS |
|||||||
Current Assets: |
|||||||
Cash and Cash Equivalents |
$ |
5,484 |
$ |
17,198 |
|||
Accounts and Notes Receivable: |
|||||||
Trade |
96,997 |
252,424 |
|||||
Other Receivables |
11,462 |
11,077 |
|||||
Supplies Inventories |
7,527 |
9,715 |
|||||
Recoverable Income Taxes |
11,184 |
149,481 |
|||||
Prepaid Expenses |
213,072 |
61,791 |
|||||
Total Current Assets |
345,726 |
501,686 |
|||||
Property, Plant and Equipment: |
|||||||
Property, Plant and Equipment |
10,512,298 |
9,567,428 |
|||||
Less—Accumulated Depreciation, Depletion and Amortization |
2,981,723 |
2,624,984 |
|||||
Total Property, Plant and Equipment—Net |
7,530,575 |
6,942,444 |
|||||
Other Assets: |
|||||||
Operating Lease Right-of-Use Assets |
205,647 |
— |
|||||
Investment in Affiliates |
17,110 |
18,663 |
|||||
Goodwill |
796,359 |
796,359 |
|||||
Other Intangible Assets |
98,285 |
103,200 |
|||||
Other |
292,556 |
229,818 |
|||||
Total Other Assets |
1,409,957 |
1,148,040 |
|||||
TOTAL ASSETS |
$ |
9,286,258 |
$ |
8,592,170 |
|||
(Unaudited) |
|||||||
(Dollars in thousands, except per share data) |
September 30, |
December 31, |
|||||
LIABILITIES AND EQUITY |
|||||||
Current Liabilities: |
|||||||
Accounts Payable |
$ |
308,003 |
$ |
229,806 |
|||
Current Portion of Finance Lease Obligations |
7,203 |
6,997 |
|||||
Current Portion of Operating Lease Obligations |
65,061 |
— |
|||||
Other Accrued Liabilities |
241,357 |
286,172 |
|||||
Total Current Liabilities |
621,624 |
522,975 |
|||||
Non-Current Liabilities: |
|||||||
Long-Term Debt |
2,640,234 |
2,378,205 |
|||||
Finance Lease Obligations |
9,400 |
13,299 |
|||||
Deferred Income Taxes |
476,968 |
398,682 |
|||||
Operating Lease Obligations |
122,514 |
— |
|||||
Asset Retirement Obligations |
33,123 |
37,479 |
|||||
Other |
160,577 |
159,787 |
|||||
Total Non-Current Liabilities |
3,442,816 |
2,987,452 |
|||||
TOTAL LIABILITIES |
4,064,440 |
3,510,427 |
|||||
Stockholders' Equity: |
|||||||
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 186,586,751 Issued and Outstanding at September 30, 2019; 198,663,342 Issued and Outstanding at December 31, 2018 |
1,870 |
1,990 |
|||||
Capital in Excess of Par Value |
2,197,783 |
2,264,063 |
|||||
Preferred Stock, 15,000,000 shares authorized, None issued and outstanding |
— |
— |
|||||
Retained Earnings |
2,243,104 |
2,071,809 |
|||||
Accumulated Other Comprehensive Loss |
(7,778) |
(7,904) |
|||||
Total CNX Resources Stockholders' Equity |
4,434,979 |
4,329,958 |
|||||
Noncontrolling Interest |
786,839 |
751,785 |
|||||
TOTAL STOCKHOLDERS' EQUITY |
5,221,818 |
5,081,743 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
9,286,258 |
$ |
8,592,170 |
CNX RESOURCES CORPORATION AND SUBSIDIARIES |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
(Dollars in thousands) |
September 30, |
September 30, |
|||||||||||||
(Unaudited) |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Total Stockholders' Equity, Beginning Balance |
$ |
5,099,995 |
$ |
5,038,923 |
$ |
5,081,743 |
$ |
3,899,899 |
|||||||
Common Stock and Capital in Excess of Par Value: |
|||||||||||||||
Beginning Balance |
2,205,848 |
2,374,788 |
2,266,053 |
2,452,564 |
|||||||||||
Issuance of Common Stock |
49 |
126 |
211 |
1,689 |
|||||||||||
Purchase and Retirement of Common Stock |
(7,697) |
(66,503) |
(101,687) |
(155,191) |
|||||||||||
Amortization of Stock-Based Compensation Awards |
1,453 |
4,737 |
35,076 |
14,086 |
|||||||||||
Ending Balance |
2,199,653 |
2,313,148 |
2,199,653 |
2,313,148 |
|||||||||||
Retained Earnings: |
|||||||||||||||
Beginning Balance |
2,127,627 |
1,940,507 |
2,071,809 |
1,455,811 |
|||||||||||
Net Income |
115,538 |
125,029 |
190,679 |
694,606 |
|||||||||||
Purchase and Retirement of Common Stock |
— |
(61,512) |
(13,790) |
(141,543) |
|||||||||||
Shares Withheld for Taxes |
(61) |
(136) |
(5,594) |
(4,986) |
|||||||||||
Ending Balance |
2,243,104 |
2,003,888 |
2,243,104 |
2,003,888 |
|||||||||||
Accumulated Other Comprehensive Loss: |
|||||||||||||||
Beginning Balance |
(7,819) |
(6,494) |
(7,904) |
(8,476) |
|||||||||||
Other Comprehensive Income |
41 |
22 |
126 |
2,004 |
|||||||||||
Ending Balance |
(7,778) |
(6,472) |
(7,778) |
(6,472) |
|||||||||||
Total CNX Resources Corporation Stockholders' Equity |
4,434,979 |
4,310,564 |
4,434,979 |
4,310,564 |
|||||||||||
Non-Controlling Interest: |
|||||||||||||||
Beginning Balance |
774,339 |
730,122 |
751,785 |
— |
|||||||||||
Net Income |
28,422 |
21,727 |
81,325 |
59,090 |
|||||||||||
Shares Withheld for Taxes |
— |
(1) |
(690) |
(348) |
|||||||||||
Amortization of Stock-Based Compensation Awards |
328 |
506 |
1,481 |
1,775 |
|||||||||||
Distributions to CNXM Noncontrolling Interest Holders |
(16,250) |
(14,099) |
(47,062) |
(40,839) |
|||||||||||
Acquisition of CNX Gathering, LLC |
— |
— |
— |
718,577 |
|||||||||||
Ending Balance |
786,839 |
738,255 |
786,839 |
738,255 |
|||||||||||
Total Stockholders' Equity, Ending Balance |
$ |
5,221,818 |
$ |
5,048,819 |
$ |
5,221,818 |
$ |
5,048,819 |
CNX RESOURCES AND SUBSIDIARIES |
|||||||||||||||
(Dollars in thousands) |
Three Months Ended |
Nine Months Ended |
|||||||||||||
(Unaudited) |
September 30, |
September 30, |
|||||||||||||
Cash Flows from Operating Activities: |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Net Income |
$ |
143,960 |
$ |
146,756 |
$ |
272,004 |
$ |
753,696 |
|||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|||||||||||||||
Depreciation, Depletion and Amortization |
120,459 |
119,585 |
374,619 |
363,338 |
|||||||||||
Amortization of Deferred Financing Costs |
1,649 |
1,818 |
6,057 |
6,640 |
|||||||||||
Impairment of Other Intangible Assets |
— |
— |
— |
18,650 |
|||||||||||
Stock-Based Compensation |
1,781 |
5,243 |
36,557 |
15,861 |
|||||||||||
Gain on Asset Sales and Abandonments |
(3,308) |
(134,320) |
(610) |
(148,942) |
|||||||||||
Gain on Previously Held Equity Interest |
— |
— |
— |
(623,663) |
|||||||||||
Loss on Debt Extinguishment |
— |
15,385 |
7,614 |
54,433 |
|||||||||||
Gain on Commodity Derivative Instruments |
(213,913) |
(18,005) |
(240,118) |
(78,752) |
|||||||||||
Net Cash Received in Settlement of Commodity Derivative Instruments |
57,041 |
2,825 |
26,331 |
2,518 |
|||||||||||
Deferred Income Taxes |
48,902 |
68,922 |
78,133 |
259,116 |
|||||||||||
Equity in Earnings of Affiliates |
(673) |
(1,241) |
(1,703) |
(4,688) |
|||||||||||
Return on Equity Investment |
1,200 |
— |
3,256 |
— |
|||||||||||
Changes in Operating Assets: |
|||||||||||||||
Accounts and Notes Receivable |
28,724 |
5,969 |
154,715 |
50,125 |
|||||||||||
Recoverable Income Taxes |
102,518 |
(12,244) |
138,406 |
(8,501) |
|||||||||||
Supplies Inventories |
3,715 |
773 |
2,188 |
1,016 |
|||||||||||
Prepaid Expenses |
1,438 |
(1,664) |
5,725 |
(337) |
|||||||||||
Changes in Operating Liabilities: |
|||||||||||||||
Accounts Payable |
25,934 |
5,730 |
55,280 |
2,532 |
|||||||||||
Accrued Interest |
(2,691) |
9,170 |
2,359 |
5,812 |
|||||||||||
Other Operating Liabilities |
4,703 |
28,914 |
(31,689) |
30,418 |
|||||||||||
Changes in Other Liabilities |
(16,134) |
(4,362) |
(23,041) |
(9,736) |
|||||||||||
Other |
114 |
35 |
9 |
683 |
|||||||||||
Net Cash Provided by Operating Activities |
305,419 |
239,289 |
866,092 |
690,219 |
|||||||||||
Cash Flows from Investing Activities: |
|||||||||||||||
Capital Expenditures |
(336,137) |
(297,465) |
(964,502) |
(794,124) |
|||||||||||
CNX Gathering LLC Acquisition, Net of Cash Acquired |
— |
— |
— |
(299,272) |
|||||||||||
Proceeds from Asset Sales |
8,189 |
347,391 |
15,276 |
500,811 |
|||||||||||
Net Distributions from Equity Affiliates |
— |
4,100 |
— |
7,750 |
|||||||||||
Net Cash (Used in) Provided by Investing Activities |
(327,948) |
54,026 |
(949,226) |
(584,835) |
|||||||||||
Cash Flows from Financing Activities: |
|||||||||||||||
Payments on Miscellaneous Borrowings |
(1,807) |
(1,708) |
(5,322) |
(5,455) |
|||||||||||
Payments on Long-Term Notes |
— |
(212,000) |
(405,876) |
(935,419) |
|||||||||||
Net Proceeds from (Payments on) CNXM Revolving Credit Facility |
38,000 |
33,000 |
162,000 |
(105,500) |
|||||||||||
(Payments on) Proceeds from CNX Revolving Credit Facility |
(16,800) |
17,000 |
1,200 |
439,000 |
|||||||||||
Proceeds from Issuance of CNX Senior Notes |
— |
— |
500,000 |
— |
|||||||||||
Proceeds from Issuance of CNXM Senior Notes |
— |
— |
— |
394,000 |
|||||||||||
Distributions to CNXM Noncontrolling Interest Holders |
(16,250) |
(14,099) |
(47,062) |
(40,839) |
|||||||||||
Proceeds from Issuance of Common Stock |
49 |
127 |
210 |
1,689 |
|||||||||||
Shares Withheld for Taxes |
(62) |
(138) |
(6,284) |
(5,335) |
|||||||||||
Purchases of Common Stock |
(7,697) |
(127,645) |
(117,477) |
(294,365) |
|||||||||||
Debt Repurchase and Financing Fees |
(31) |
(26) |
(9,969) |
(19,655) |
|||||||||||
Net Cash (Used in) Provided by Financing Activities |
(4,598) |
(305,489) |
71,420 |
(571,879) |
|||||||||||
Net Decrease in Cash and Cash Equivalents |
(27,127) |
(12,174) |
(11,714) |
(466,495) |
|||||||||||
Cash and Cash Equivalents at Beginning of Period |
32,611 |
54,846 |
17,198 |
509,167 |
|||||||||||
Cash and Cash Equivalents at End of Period |
$ |
5,484 |
$ |
42,672 |
$ |
5,484 |
$ |
42,672 |
SOURCE CNX Resources Corporation
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