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MarketScreener Homepage  >  Equities  >  Nyse  >  CNX Resources Corporation    CNX

CNX RESOURCES CORPORATION

(CNX)
  Report
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CNX Resources : Q3 2020 Earnings Results & Supplemental Information of CNX Corporation

10/29/2020 | 09:35am EST

CNX Resources 3Q 2020

Earnings Results & Supplemental Information

TABLE OF CONTENTS:

Page:

Production Volumes...........................................................................................................................................................

2

Hedge Volumes and Pricing…...........................................................................................................................................

3

Gas Hedging Gain/Loss Projections…..............................................................................................................................

4

Consolidated Statements of Income..................................................................................................................................

5

Consolidated Balance Sheets............................................................................................................................................

6

Consolidated Statements of Cash Flows….......................................................................................................................

7

Market Mix and Natural Gas Price Reconciliation…..........................................................................................................

8

Price and Cost Data (Per Mcf)….......................................................................................................................................

9

Guidance…........................................................................................................................................................................

10

Non-GAAP Reconciliations

Definitions........................................................................................................................................................................

11

Quarterly Adjusted EBITDAX and Net Income...................................................................................................................

12

Operating Margins.............................................................................................................................................................

13

Cash Operating Margins....................................................................................................................................................

14

Net Debt and TTM Adjusted EBITDAX..............................................................................................................................

15

Free Cash Flow..................................................................................................................................................................

16

NOTE: Please note that CNX is unable to provide a reconciliation of projected financial results contained in this presentation, including the measures referenced above, 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, net cash provided by operating activities and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.

PRODUCTION VOLUMES

GAS

Q3-2020

Q2-2020Q1-2020

Q4-2019

Q3-2019

Shale Sales Volumes (Bcf)

95.2

96.5

112.4

119.1

106.0

CBM Sales Volumes (Bcf)

13.0

13.1

13.2

13.7

14.1

Other Sales Volumes (Bcf)

-

-

0.1

0.1

0.1

LIQUIDS*

NGLs Sales Volumes (Bcfe)

6.9

4.7

8.3

10.0

8.0

Oil and Condensate Sales Volumes (Bcfe)

0.6

0.2

0.4

0.5

0.1

TOTAL (Bcfe)

115.7

114.5

134.4

143.4

128.3

Average Daily Production (MMcfe)

1,257.6

1,258.3

1,476.5

1,558.5

1,394.6

  • 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.

Average

Rigs at

Q3 2020 ACTIVITY SUMMARY

TD

Frac

TIL

Lateral

Period

Length(1)

End

SWPA Central

Marcellus

7

4

12

12,245

1

Utica

-

-

-

-

-

WV Shirley-Pennsboro

Marcellus

-

-

-

-

-

Utica

-

-

-

-

-

CPA South

Utica

-

1

1

4,840

-

Ohio Dry

Utica

-

2

5

8,992

-

Total

7

7

18

-

1

(1) Measured in lateral feet from perforation to perforation.

2

HEDGE VOLUMES AND PRICING

NYMEX Hedges

Q4 2020

2020

2021

2022

2023

2024

Volumes (Bcf)

123.6

457.1

436.8

290.7

160.5

165.2

Average Prices ($/Mcf)

$2.95

$2.93

$2.94

$2.85

$2.80

$2.88

Physical Fixed Price Sales and Index Hedges

Volumes (Bcf)

3.8

12.4

22.3

20.9

34.3

17.7

Average Prices ($/Mcf)

$2.48

$2.44

$2.51

$2.49

$2.16

$2.22

Total Volumes Hedged (Bcf)(1)

127.4

469.5

459.1

311.6

194.8

182.9

NYMEX + Basis (fully-covered volumes)(2)

Volumes (Bcf)

127.4

469.5

453.5

311.6

194.8

182.9

Average Prices ($/Mcf)

$2.50

$2.52

$2.47

$2.32

$2.24

$2.30

NYMEX Hedges Exposed to Basis

Volumes (Bcf)

-

-

5.6

-

-

-

Average Prices ($/Mcf)

-

-

$2.94

-

-

-

Total Volumes Hedged (Bcf)(1)

127.4

469.5

459.1

311.6

194.8

182.9

  1. Hedge positions as of 10/8/2020. Excludes basis hedges in excess of NYMEX hedges of 2.9 Bcf, 10.1 Bcf, 78.4 Bcf, 77.8 Bcf, and 66.5 Bcf for Q4 2020, 2020, 2022, 2023, and 2024, respectively. Q4 2020 and 2020 exclude purchased swaps. See below table.
  2. Includes the impact of NYMEX and basis-only hedges as well as physical sales agreements.

PURCHASED SWAPS

NYMEX Only Hedges

Q4 2020

2020

Volumes (Bcf)

3.3

21.5

Average Fixed Prices ($/Mcf)

$2.35

$2.18

Index Hedges

Volumes (Bcf)

2.4

10.3

Average Fixed Prices ($/Mcf)

$1.54

$1.52

Basis Hedges

Volumes (Bcf)

3.8

20.7

Average Fixed Prices ($/Mcf)

($0.47)

($0.38)

For financial hedging, CNX utilizes over-the-counter swaps to manage its exposure to natural gas price fluctuations. Typically, CNX "sells" swaps under which it receives a fixed price from counterparties and pays a floating market price. In order to help gain additional flexibility to move production to higher price periods, during the second quarter of 2020, CNX purchased, rather than sold, financial swaps for the period May through November of 2020 under which CNX will pay a fixed price to and receive a floating price from its hedge counterparties. Swaps purchased have the effect of reducing total hedged volumes for the period of the swap.

3

HEDGING GAIN/LOSS PROJECTIONS

Q4 2020

CY2020

CY2021

Wtd. Avg.

Avg.

Forecasted

Wtd.

Avg.

Forecasted

Wtd.

Avg.

Forecasted

Avg.

Avg.

Hedged

Gain/

Hedged

Gain/

Hedged

Gain/

Volumes

Hedged

Forward

Volumes

Hedged

Forward

Hedged

Forward

(1)

(Loss)(3)

(1)

(Loss)(3)

Volumes

(Loss)(3)

($/MMBtu)

(000

Price

Market(2)

($ in 000s)

(000

Price

Market(2)

($ in 000s)

(000

Price

Market

($ in 000s)

MMBtu)

MMBtu)

MMBtu)

NYMEX

130,975

$2.72

$2.63

$12,394

469,785

$2.76

$2.07

$313,783

475,623

$2.70

$2.96

($122,437)

Index

(1,550)

$1.48

$1.72

$372

(10,025)

$1.75

$1.41

($4,596)

900

$2.40

$2.42

($18)

Basis:

DOM South (DOM)

15,915

($0.56)

($0.76)

$2,191

53,280

($0.59)

($0.59)

($1,085)

88,545

($0.61)

($0.54)

($6,218)

TCO Pool (TCO)

13,340

($0.40)

($0.54)

$1,527

53,940

($0.40)

($0.39)

($979)

58,400

($0.49)

($0.39)

($6,365)

Michcon (NMC)

8,208

($0.17)

($0.24)

$589

34,013

($0.17)

($0.17)

($99)

46,230

($0.17)

($0.19)

$983

TETCO ELA (TEB)

1,220

($0.09)

($0.12)

($28)

4,260

($0.09)

($0.10)

($169)

7,300

($0.09)

($0.11)

$176

TETCO WLA (TWB)

2,750

($0.10)

($0.09)

($49)

10,050

($0.11)

($0.07)

($375)

7,300

($0.08)

($0.05)

($194)

TETCO M3 (TMT)

4,905

$0.47

($0.26)

$3,448

19,060

$0.31

($0.18)

$8,958

6,868

$0.96

$0.14

($335)

TETCO M2 (BM2)

52,440

($0.55)

($0.91)

$17,831

195,150

($0.54)

($0.66)

$20,133

170,575

($0.60)

($0.53)

($12,782)

Transco Zone 5

3,380

$0.63

$0.11

$1,812

12,530

$0.16

$0.16

$1,773

6,825

$0.55

$0.34

$312

South (DKR)

Total Financial

102,158

$27,321

382,283

$28,157

392,043

($24,423)

Basis Hedges

Total Projected

Realized Gain

$40,087

$337,344

($146,878)

(Loss)

Note: Forward market prices, hedged volumes, and hedge prices are as of 10/8/2020. Anticipated hedging activity is not included in projections.

  1. Net of purchased swaps.
  2. January through October prices are settled.
  3. Forecasted Gain/(Loss) amounts are based on sum of current monthly hedge positions vs. strip. CY 2020 excludes $84 million of hedge monetization gains.

4

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Dollars in thousands, except per share data

Revenue and Other Operating Income:

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Natural Gas, NGL and Oil Revenue

$182,213

$175,776

$251,494

$320,463

$265,051

(Loss) Gain on Commodity Derivative Instruments

(168,834)

(63,303)

115,142

135,987

213,913

Purchased Gas Revenue

31,541

20,424

26,359

29,846

29,192

Other Revenue and Operating Income

21,155

15,944

23,364

22,693

21,841

Total Revenue and Other Operating Income

66,075

148,841

416,359

508,989

529,997

Costs and Expenses:

Operating Expense

Lease Operating Expense

10,377

10,244

10,033

12,738

14,202

Transportation, Gathering and Compression

68,810

60,025

83,242

86,323

80,193

Production, Ad Valorem, and Other Fees

5,994

5,384

6,162

7,358

6,127

Depreciation, Depletion and Amortization

114,464

113,545

129,164

133,844

120,459

Exploration and Production Related Other Costs

2,141

3,310

3,888

29,480

6,075

Purchased Gas Costs

31,721

19,989

24,998

28,077

27,490

Impairment of Exploration and Production Properties

-

-

61,849

327,400

-

Impairment of Unproved Properties and Expirations

-

-

-

119,429

-

Impairment of Goodwill

-

-

473,045

-

-

Selling, General, and Administrative Costs

22,714

23,399

30,238

34,535

24,307

Other Operating Expense

23,284

26,596

20,681

18,059

19,746

Total Operating Expense

279,505

262,492

843,300

797,243

298,599

Other Expense

Other Expense

2,180

4,819

5,186

101

3,439

Gain on Assets Sales and Abandonments, net

(3,567)

(5,938)

(12,055)

(34,953)

(3,308)

Loss (Gain) on Debt Extinguishment

108

344

(11,263)

-

-

Interest Expense

37,921

46,256

48,995

37,051

38,405

Total Other Expense

36,642

45,481

30,863

2,199

38,536

Total Costs and Expenses

316,147

307,973

874,163

799,442

337,135

(Loss) Earnings Before Income Tax

(250,072)

(159,132)

(457,804)

(290,453)

192,862

Income Tax (Benefit) Expense

(61,279)

(28,646)

(152,582)

(50,398)

48,902

Net (Loss) Income

(188,793)

(130,486)

(305,222)

(240,055)

143,960

Less: Net Income Attributable to Noncontrolling Interest

15,905

15,263

23,864

31,353

28,422

Net (Loss) Income Attributable to CNX Resources Shareholders

($204,698)

($145,749)

($329,086)

($271,408)

$115,538

(Loss) Earnings per Share

Basic

($1.03)

($0.78)

($1.76)

($1.45)

$0.62

Diluted

($1.03)

($0.78)

($1.76)

($1.45)

$0.61

5

CONSOLIDATED BALANCE SHEETS

(Unaudited)

Dollars in thousands

30-Sep-20

30-Jun-20

31-Mar-20

31-Dec-19

30-Sep-19

ASSETS

Current Assets:

Cash and Cash Equivalents

$150,132

$19,607

$31,833

$16,283

$5,484

Restricted Cash

733

738

853

-

-

Accounts and Notes Receivable

Trade, net

75,929

69,174

91,477

133,480

96,997

Other Receivables, net

4,653

7,669

10,839

13,679

11,462

Supplies Inventories

10,090

10,317

10,266

6,984

7,527

Recoverable Income Taxes

644

114,440

115,261

62,425

11,184

Derivative Instruments

77,608

197,804

312,749

247,794

198,272

Prepaid Expenses

12,450

10,973

12,775

17,456

14,800

Total Current Assets

332,239

430,722

586,053

498,101

345,726

Property, Plant and Equipment:

Property, Plant and Equipment:

10,904,837

10,814,035

10,691,516

10,572,006

10,512,298

Less-Accumulated Depreciation, Depletion and Amortization

3,841,699

3,730,232

3,622,413

3,435,431

2,981,723

Total Property, Plant and Equipment-Net

7,063,138

7,083,803

7,069,103

7,136,575

7,530,575

Other Non-Current Assets:

Operating Lease Right-of-Use Assets

124,329

141,198

159,521

187,097

205,647

Investment in Affiliates

15,685

15,159

16,549

16,710

17,110

Derivative Instruments

160,098

212,657

258,111

314,096

275,892

Goodwill

323,314

323,314

323,314

796,359

796,359

Other Intangible Assets

91,733

93,371

95,009

96,647

98,285

Restricted Cash

5,456

5,576

5,340

-

-

Other Non-Current Assets

13,182

13,884

15,950

15,221

16,664

Total Other Non-Current Assets

733,797

805,159

873,794

1,426,130

1,409,957

TOTAL ASSETS

8,129,174

8,319,684

8,528,950

9,060,806

9,286,258

LIABILITIES AND EQUITY

Current Liabilities:

Accounts Payable

117,004

148,345

171,890

202,553

308,003

Derivative Instruments

144,545

83,527

49,058

41,466

45,476

Current Portion of Finance Lease Obligations

7,419

7,295

20,451

7,164

7,203

Current Portion of Long-Term Debt

22,488

22,430

7,200

-

-

Current Portion of Operating Lease Obligations

52,032

52,110

54,622

61,670

65,061

Other Accrued Liabilities

164,473

162,817

197,130

216,086

195,881

Total Current Liabilities

507,961

476,524

500,351

528,939

621,624

Non-Current Liabilities:

Long-Term Debt

2,577,974

2,540,768

2,640,148

2,754,443

2,640,234

Finance Lease Obligations

2,322

4,225

6,095

7,706

9,400

Operating Lease Obligations

66,180

79,701

92,463

110,466

122,514

Derivative Instruments

203,709

178,187

163,898

115,862

117,217

Deferred Income Taxes

398,878

370,412

376,401

476,108

476,968

Asset Retirement Obligations

61,761

62,543

64,387

63,377

33,123

Other Non-Current Liabilities

40,213

40,370

40,497

41,596

43,360

Total Non-Current Liabilities

3,351,037

3,276,206

3,383,889

3,569,558

3,442,816

TOTAL LIABILITIES

3,858,998

3,752,730

3,884,240

4,098,497

4,064,440

Stockholders' Equity

Common Stock

2,249

1,878

1,874

1,870

1,870

Capital in Excess of Par Value

2,989,699

2,261,729

2,205,941

2,199,605

2,197,783

Preferred Stock

-

-

-

-

-

Retained Earnings

1,290,498

1,495,197

1,641,009

1,971,676

2,243,104

Accumulated Other Comprehensive Loss

(12,270)

(12,382)

(12,493)

(12,605)

(7,778)

Total CNX Resources Stockholders' Equity

4,270,176

3,746,422

3,836,331

4,160,546

4,434,979

Noncontrolling Interest

-

820,532

808,379

801,763

786,839

TOTAL STOCKHOLDERS' EQUITY

4,270,176

4,566,954

4,644,710

4,962,309

5,221,818

TOTAL LIABILITIES AND EQUITY

$8,129,174

$8,319,684

$8,528,950

$9,060,806

$9,286,258

6

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Dollars in thousands

Cash Flows from Operating Activities:

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Net (Loss) Income

($188,793)

($130,486)

($305,222)

($240,055)

$143,960

Depreciation, Depletion and Amortization

114,464

113,545

129,164

133,844

120,459

Amortization of Deferred Financing Costs

5,807

6,348

2,447

1,690

1,649

Impairment of Exploration and Production Properties

-

-

61,849

327,400

-

Impairment of Unproved Properties and Expirations

-

-

-

119,429

-

Impairment of Goodwill

-

-

473,045

-

-

Stock-Based Compensation

2,503

2,566

6,840

1,869

1,781

Gain on Asset Sales and Abandonments

(3,567)

(5,938)

(12,055)

(34,953)

(3,308)

Loss (Gain) on Debt Extinguishment

108

344

(11,263)

-

-

Loss (Gain) on Commodity Derivative Instruments

168,834

63,303

(115,142)

(135,987)

(213,913)

Loss on Other Derivative Instruments

152

3,598

10,639

-

-

Net Cash Received in Settlement of Commodity Derivative Instruments

90,310

142,256

151,161

43,449

57,041

Deferred Income Taxes

(61,278)

(25,683)

(99,746)

959

48,902

Equity in (Earnings) Loss of Affiliates

(396)

1,260

161

(400)

(673)

Return on Equity Investment

(131)

131

-

800

1,200

Changes in Operating Assets

Accounts and Notes Receivable

(3,427)

24,631

43,639

(36,093)

28,724

Recoverable Income Taxes

113,796

821

(52,836)

(51,356)

102,518

Supplies Inventories

227

(51)

(3,282)

543

3,715

Prepaid Expenses

(1,842)

1,832

4,710

(2,610)

1,438

Changes in Other Assets

(129)

(296)

692

989

114

Changes in Operating Liabilities

Accounts Payable

(14,153)

(17,810)

2,322

(61,685)

25,934

Accrued Interest

(8,409)

(495)

(5,063)

2,170

(2,691)

Other Operating Liabilities

9,141

(35,994)

(13,626)

44,931

4,703

Changes in Other Liabilities

(55)

(84)

(1,047)

(466)

(16,134)

Net Cash Provided by Operating Activities

223,162

143,798

267,387

114,468

305,419

Cash Flows from Investing Activities:

Capital Expenditures

(108,335)

(134,852)

(152,049)

(228,097)

(336,137)

Proceeds from Asset Sales

5,855

12,151

13,975

29,884

8,189

Net Cash Used in Investing Activities

(102,480)

(122,701)

(138,074)

(198,213)

(327,948)

Cash Flows from Financing Activities:

Payments on Miscellaneous Borrowings

(1,779)

(1,777)

(1,792)

(1,827)

(1,807)

Payments on Long-Term Notes

(50,000)

(408,985)

(59,880)

-

-

Net Proceeds from (Payments on) CNXM Revolving Credit Facility

24,000

(28,000)

35,250

65,750

38,000

Net (Payments on) Proceeds from CNX Revolving Credit Facility

(140,000)

113,000

(224,000)

47,800

(16,800)

Proceeds from Issuance of CNX Senior Notes

207,000

-

-

-

-

Net (Payments on) Proceeds from CSG Non-Revolving Credit Facilities

(5,202)

(3,667)

173,250

-

-

Proceeds from Issuance of Convertible Senior Notes

-

334,650

-

-

-

Purchase of Capped Call Related to Convertible Senior Notes

-

(35,673)

-

-

-

Distributions to CNXM Noncontrolling Interest Holders

(21,055)

(3,489)

(17,443)

(16,822)

(16,250)

Proceeds from Issuance of Common Stock

151

1,650

4

355

49

Shares Withheld for Taxes

(1)

(63)

(1,890)

(27)

(62)

Purchases of Common Stock

-

-

-

-

(7,697)

Debt Issuance and Financing Fees

(3,396)

(848)

(11,069)

(685)

(31)

Net Cash Provided by (Used in) Financing Activities

9,718

(33,202)

(107,570)

94,544

(4,598)

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

130,400

(12,105)

21,743

10,799

(27,127)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

25,921

38,026

16,283

5,484

32,611

Cash, Cash Equivalents, and Restricted Cash at End of Period

$156,321

$25,921

$38,026

$16,283

$5,484

7

MARKET MIX AND NATURAL GAS PRICE RECONCILIATION

2020E

2021E

Gas Sold

Basis

Gas Sold

Basis

(%)

(%)

DOM South

6%

($0.59)

4%

($0.54)

ETNG Mainline

4%

$0.09

4%

$0.26

TCO Pool

15%

($0.39)

23%

($0.39)

TETCO ELA & WLA

3%

($0.08)

5%

($0.08)

TETCO M3

6%

($0.18)

6%

$0.14

TETCO M2

34%

($0.66)

30%

($0.53)

Michcon

10%

($0.17)

9%

($0.19)

Physical basis sales

22%

($0.28)

19%

($0.33)

Weighted Average Basis

100%

($0.40)

100%

($0.33)

NYMEX

$2.07

$2.96

Weighted Average Basis (Not considering hedging)

($0.40)

($0.33)

Realized Price (per MMBtu)

$1.67

$2.63

Conversion Factor (MMBtu/Mcf)

1.08

1.09

Realized Price Before Financial Hedging (per Mcf)

$1.80

$2.87

8

PRICE AND COST DATA (PER MCFE)

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Average Sales Price - Gas

$1.51

$1.54

$1.83

$2.14

$2.04

Average Gain on Commodity Derivative Instruments - Cash

$0.83

$1.03

$0.77

$0.33

$0.47

Settlement- Gas(1)

Average Sales Price - Oil and Condensate*

$6.58

$4.40

$6.59

$7.47

$12.19

Average Sales Price - NGLs*

$2.19

$1.31

$2.34

$3.20

$2.28

Average Sales Price - E&P

$2.36

$2.52

$2.59

$2.54

$2.51

Lease Operating Expense (LOE)

$0.09

$0.09

$0.07

$0.09

$0.11

Production, Ad Valorem, and Other Fees

$0.05

$0.05

$0.05

$0.05

$0.05

Transportation, Gathering and Compression

$0.59

$0.52

$0.62

$0.60

$0.63

Depreciation, Depletion and Amortization (DD&A)

$0.98

$0.97

$0.94

$0.92

$0.93

Total Production Costs

$1.71

$1.63

$1.68

$1.66

$1.72

Total Production Cash Costs, before DD&A

$0.73

$0.66

$0.74

$0.74

$0.79

Cash Margin, before DD&A

$1.63

$1.86

$1.85

$1.80

$1.72

Fully Burdened Cash Costs, before DD&A(2)

$1.17

$1.29

$1.20

$1.19

$1.26

Fully Burdened Cash Margin, before DD&A

$1.19

$1.23

$1.39

$1.35

$1.25

Note: "Total Production Costs" excludes Selling, General, and Administration and Other Operating Expenses

*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.

  1. Excludes hedge monetizations.
  2. Fully burdened cash costs include production cash costs, selling, general and administrative (SG&A) cash costs, other operating cash expense, other cash (income) expense, other revenue and operating income, and cash interest expense. Q3 2020, Q2 2020, Q1 2020, Q4 2019 and Q3 2019 total fully burdened cash costs exclude a gain on asset sales of $0.03 per Mcfe, $0.24 per Mcfe, $0.09 per Mcfe, $0.05 per Mcfe and $0.03 per Mcfe, respectively. Q3 2020, Q2 2020, Q1 2020, Q4 2019 and Q3 2019 also exclude unrealized losses on interest rate swaps and noncash amortization of $0.05 per Mcfe, $0.08 per Mcfe, $0.11 per Mcfe, $0.01 per Mcfe and $0.02 per Mcfe respectively.

Natural Gas Price Reconciliation

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

NYMEX Natural Gas ($/MMBtu)

$1.98

$1.72

$1.95

$2.50

$2.23

Average Differential

(0.57)

(0.29)

(0.26)

(0.51)

(0.33)

BTU Conversion (MMBtu/Mcf)*

0.10

0.11

0.14

0.15

0.14

Gain on Commodity Derivative Instruments-Cash Settlement(1)

0.83

1.03

0.77

0.33

0.47

Realized Gas Price per Mcf

$2.34

$2.57

$2.60

$2.47

$2.51

*Conversion factor

1.07

1.08

1.08

1.08

1.08

(1) Excludes hedge monetizations.

9

GUIDANCE

Previous

Updated

Previous

Updated

($ in millions)

2020E

2020E

2021E

2021E

Capital Expenditures

Low

High

Low

High

Drilling & Completions (D&C)

$330

-

$380

$365

-

$375

-

-

Non-D&C

$140

-

$170

$130

-

$140

-

-

Total Capital

$470

-

$550

$495

-

$515

~$440

~$440

Production Volumes (Bcfe)

490

-

530

500

-

510

~550

~550

% of Natural Gas Hedged

94%

89%

Prices on Open Volumes(1)

Natural Gas NYMEX ($/MMBtu)

$1.94

$2.07

-

-

Natural Gas Basis Differential ($/MMBtu)

($0.20) - ($0.30)

($0.35) - ($0.45)

-

-

NGL Realized Price ($/Bbl)

$12.50

-

$14.50

$12.50

-

$14.50

-

-

($ in millions)

Adjusted EBITDAX(2)

$830

-

$900

~$900

~$920

~$960

($ in millions)

Free Cash Flow (FCF)(2)

~$350

~$350

~$425

~$425

  1. Forward market prices are as of 10/8/2020.
  2. Non-GAAPmeasures. See "Non-GAAP Financial Measures" for definitions.

10

Non-GAAP Measures (Definitions, Purpose, and Reconciliations)

CNX's management uses certain 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. Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating CNX because (i) analysts utilize these metrics when evaluating company performance and have requested this information as of a recent practicable date, (ii) these metrics are widely used to evaluate a company's operating performance, and (iii) we want to provide updated information to investors. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with GAAP. In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies.

Definitions: EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration.

Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below. Although EBIT, EBITDAX, and adjusted EBITDAX are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Resources because they are widely used to evaluate a company's operating performance. We exclude stock-based compensation from adjusted EBITDAX because we do not believe it accurately reflects the actual operating expense incurred during the relevant period and may vary widely from period to period irrespective of operating results. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT, EBITDAX or adjusted EBITDAX identically, the presentation here may not be comparable to similarly titled measures of other companies.

Reconciliations of EBIT, EBITDAX, adjusted EBITDAX, adjusted net income, operating margins, cash operating margins, net debt, TTM EBITDAX, free cash flow and organic free cash flow to the most directly comparable GAAP financial measures are as follows:

11

Non-GAAP Measures

EBIT is defined as earnings before deducting net interest expense (interest expense less interest income) and income taxes. EBITDAX is defined as earnings before deducting net interest expense (interest expense less interest income), income taxes, depreciation, depletion and amortization, and exploration. Adjusted EBITDAX is defined as EBITDAX after adjusting for the discrete items listed below.

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Net (Loss) Income

($189)

($130)

($305)

($240)

$144

Interest Expense

38

46

49

37

38

Interest Income

(2)

-

-

-

(1)

Income Tax (Benefit) Expense

(61)

(29)

(153)

(50)

49

(Loss) Earnings Before Interest & Taxes (EBIT)

(214)

(113)

(409)

(253)

230

Depreciation, Depletion & Amortization

115

114

129

134

121

Exploration Expense

2

3

4

29

6

(Loss) Earnings Before Interest, Taxes, DD&A and Exploration

($97)

$4

($276)

($90)

$357

(EBITDAX)

Adjustments:

Unrealized Loss (Gain) on Commodity Derivative Instruments

259

206

36

(93)

(157)

Merger Related Costs

5

-

-

-

-

Stock-Based Compensation

3

2

7

2

2

Impairment of Exploration and Production Properties

-

-

62

327

-

Impairment of Unproved Properties and Expirations

-

-

-

119

-

Impairment of Goodwill

-

-

473

-

-

Gain on Debt Extinguishment

-

-

(11)

-

Severance

-

-

-

2

Shaw Insurance Recovery

-

-

-

(2)

-

Total Pre-tax Adjustments

267

208

567

353

(153)

Adjusted EBITDAX

$ 170

$ 212

$ 291

$ 263

$ 204

Adjusted Net Income is defined as net income after adjusting for the discrete items listed below as well as the tax effectiveness.

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Net (Loss) Income from EBITDAX Reconciliation

($189)

($130)

($305)

($240)

$144

Adjustments:

Total Pre-tax Adjustments from EBITDAX Reconciliation

267

208

567

353

(153)

Tax Effect of Adjustments

(70)

(54)

(148)

(92)

40

Adjusted Net Income

$8

$24

$114

$21

$31

12

Non-GAAP Measures

Operating Margin: Adjusted EBIT divided by Total Revenue after adjusting for unrealized loss on commodity derivative instruments.

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Total Revenue

$66

$148

$416

$509

$530

Net (Loss) Income

($189)

($130)

($305)

($240)

$144

Interest Expense

38

46

49

37

38

Interest Income

(2)

-

-

-

(1)

Income Tax (Benefit) Expense

(61)

(29)

(153)

(50)

49

(Loss) Earnings Before Interest & Taxes (EBIT)

(214)

(113)

(409)

(253)

230

Depreciation, Depletion & Amortization

115

114

129

134

121

(Loss) Earnings Before Interest, Taxes, DD&A (EBITDA)

($99)

$1

($280)

($119)

$351

Adjustments:

Unrealized Loss (Gain) on Commodity Derivative Instruments

$259

$206

$36

($93)

($157)

Merger Related Costs

5

-

-

-

-

Impairment of Exploration and Production Properties

-

-

62

327

-

Impairment of Unproved Properties and Expirations

-

-

-

119

-

Impairment of Goodwill

-

-

473

-

-

Total Adjustments

$264

$206

$571

$353

($157)

Total Revenue Minus Unrealized Loss (Gain) on Commodity

$325

$354

$452

$416

$373

Derivative Instruments

Adjusted EBIT

$50

$93

$162

$100

$73

Operating Margin

15%

26%

36%

24%

20%

13

Non-GAAP Measures

Cash Operating Margin: Adjusted EBITDA divided by Total Revenue after adjusting for unrealized loss on commodity derivative instruments.

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q3-2019

Total Revenue

$66

$148

$416

$509

$530

Net (Loss) Income

($189)

($130)

($305)

($240)

$144

Interest Expense

38

46

49

37

38

Interest Income

(2)

-

-

-

(1)

Income Tax (Benefit) Expense

(61)

(29)

(153)

(50)

49

(Loss) Earnings Before Interest & Taxes (EBIT)

(214)

(113)

(409)

(253)

230

Depreciation, Depletion & Amortization

115

114

129

134

121

(Loss) Earnings Before Interest, Taxes, DD&A (EBITDA)

($99)

$1

($280)

($119)

$351

Adjustments:

Unrealized Loss (Gain) on Commodity Derivative Instruments

$259

$206

$36

($93)

($157)

Stock-Based Compensation

3

2

7

2

2

Merger Related Costs

5

-

-

-

-

Impairment of Exploration and Production Properties

-

-

62

327

-

Impairment of Unproved Properties and Expirations

-

-

-

119

-

Gain on Debt Extinguishment

-

-

(11)

-

Impairment of Goodwill

-

-

473

-

-

Total Adjustments

$267

$208

$567

$355

($155)

Total Revenue Minus Unrealized Loss (Gain) on Commodity

$325

$354

$452

$416

$373

Derivative Instruments

Adjusted EBITDA

$168

$209

$287

$236

$196

Cash Operating Margin

52%

59%

64%

57%

53%

14

Non-GAAP Measures

Net Debt: 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.

(Dollars in millions)

Net Debt

30-Sep-20

Total Long-Term Debt (GAAP)(1)

$2,600

Less: Cash and Cash Equivalents

150

Net Debt

$2,450

(1) Includes current portion

Three Months Ended

Twelve Months

Ended

(Dollars in millions)

31-Dec-19

31-Mar-20

30-Jun-20

30-Sep-20

30-Sep-20

Net (Loss) Income

$

(240)

$

(305)

$

(130)

$

(189)

$

(864)

Interest Expense

37

49

46

38

170

Interest Income

-

-

-

(2)

(2)

Income Tax (Benefit) Expense

(50)

(153)

(29)

(61)

(293)

(Loss) Earnings Before Interest & Taxes (EBIT)

(253)

(409)

(113)

(214)

(989)

Depreciation, Depletion & Amortization

134

129

114

115

492

Exploration Expense

29

4

3

2

38

(Loss) Earnings Before Interest, Taxes, DD&A,

(90)

(276)

4

(97)

(459)

and Exploration (EBITDAX)

Adjustments:

Unrealized (Gain) Loss on Commodity Derivative

(93)

36

206

259

408

Instruments

Merger Related Costs

-

-

-

5

5

Impairment of Exploration and Production

327

62

-

-

389

Properties

Impairment of Unproved Properties and

119

-

-

-

119

Expirations

Impairment of Goodwill

-

473

-

-

473

Stock Based Compensation

2

7

2

3

14

Gain on Debt Extinguishment

-

(11)

-

-

(11)

Shaw Insurance Recovery

(2)

-

-

-

(2)

Total Pre-tax Adjustments

353

567

208

267

1,395

Adjusted EBITDAX TTM

$

263

$

291

$

212

$

170

$

936

15

Non-GAAP Measures

The Company's management believes that the following measures provide useful information to external users of the Company's consolidated financial statements, such as industry analysts, lenders and ratings agencies. Free cash flow and organic free cash flow should not be considered as alternatives to net cash provided by operating activities or any other measure of liquidity presented in accordance with GAAP.

Free Cash Flow (FCF): Operating cash flow minus capex plus proceeds from asset sales.

Organic Free Cash Flow (FCF): Operating cash flow minus.

FCF Yield: Free cash flow per share divided by current market value.

Free Cash Flow

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020Q4-2019

Q3-2019

Net Cash Provided by Operating Activities

$223

$144

$267

$114

$305

Capital Expenditures

(108)

(135)

(152)

(228)

(336)

Proceeds from Asset Sales

6

12

14

30

8

Free Cash Flow

$121

$21

$129

($84)

($23)

Organic Free Cash Flow

(Dollars in millions)

Q3-2020

Q2-2020

Q1-2020Q4-2019

Q3-2019

Net Cash Provided by Operating Activities

$223

$144

$267

$114

$305

Capital Expenditures

(108)

(135)

(152)

(228)

(336)

Organic Free Cash Flow

$115

$9

$115

($114)

($31)

Risk Factors

This presentation, including the oral statements made in connection herewith, contains forward-looking statements estimates and projections within the meaning of the federal securities laws. Statements that are not historical are forward-looking and may include our operational and strategic plans; estimates of gas reserves and resources; projected timing and rates of return of future investments; and projections and estimates of future production revenues, income and capital spending. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those statements estimates and projections. Investors should not place undue reliance on forward-looking statements as a prediction of future actual results. The forward-looking statements in this presentation speak only as of the date of this presentation; we disclaim any obligation to update the statements, and we caution you not to rely on them unduly.

Specific factors that could cause future actual results to differ materially from the forward-looking statements 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, 2019 filed with the Securities and Exchange Commission (SEC), as supplemented by our quarterly reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and any subsequent reports filed with the SEC. Those risk factors discuss, among other matters, pricing volatility or pricing decline for natural gas and NGLs; the failure to realize the anticipated costs savings, synergies and other benefits of CNX's purchase of the outstanding interests in CNXM not already owned by CNX; local, regional and national economic conditions and the impact they may have on our customers; the impact of outbreaks of communicable diseases such as COVID-19 on business activity, our operations and national and global economic conditions, generally; conditions in the oil and gas industry, including a sustained decrease in the level of supply or demand for oil or natural gas or a sustained decrease in the price of oil or natural gas; the financial condition of our customers; any non- performance by customers of their contractual obligations; changes in customer, employee or supplier relationships resulting from the proposed transaction; and changes in safety, health, environmental and other regulations.

16

Disclaimer

CNX Resources Corporation published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 14:34:01 UTC


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Financials (USD)
Sales 2020 1 230 M - -
Net income 2020 -621 M - -
Net Debt 2020 2 326 M - -
P/E ratio 2020 -3,01x
Yield 2020 -
Capitalization 2 176 M 2 176 M -
EV / Sales 2020 3,66x
EV / Sales 2021 2,51x
Nbr of Employees 467
Free-Float 97,8%
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Technical analysis trends CNX RESOURCES CORPORATION
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Mean consensus BUY
Number of Analysts 10
Average target price 13,67 $
Last Close Price 9,69 $
Spread / Highest target 75,4%
Spread / Average Target 41,0%
Spread / Lowest Target 23,8%
EPS Revisions
Managers
NameTitle
Nicholas J. DeIuliis President, Chief Executive Officer & Director
William Nicholas Thorndike Chairman
Chad A Griffith Chief Operating Officer & Executive Vice President
Donald W. Rush Chief Financial Officer & Executive VP
Maureen E. Lally-Green Independent Director
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