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,June 30, 2021
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 AprilJuly 15, 2021
Common stock, $0.01 par value220,270,090217,921,030





TABLE OF CONTENTS

  Page
PART I FINANCIAL INFORMATION
ITEM 1.Unaudited Condensed Consolidated Financial Statements
Consolidated Statements of Income for the three and six months ended March 31,June 30, 2021 and 2020
5
Consolidated Statements of Comprehensive Income for the three and six months ended March 31,June 30, 2021 and 2020
6
Consolidated Balance Sheets at March 31,June 30, 2021 and December 31, 2020
7
Consolidated Statements of Stockholders’ Equity for the three and six months ended March 31,June 30, 2021 and 2020
98
Consolidated Statements of Cash Flows for the threesix months ended March 31,June 30, 2021 and 2020
1011
1112
ITEM 2.
3033
ITEM 3.
4658
ITEM 4.
4759
PART II OTHER INFORMATION
ITEM 1.
4860
ITEM 1A.Risk Factors
4860
ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds
4860
ITEM 6.
4961




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 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 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 Income:20212020
Natural Gas, NGL and Oil Revenue$381,225 $251,494 
Gain on Commodity Derivative Instruments33,414 115,142 
Purchased Gas Revenue33,484 26,359 
Other Revenue and Operating Income24,950 23,364 
Total Revenue and Other Operating Income473,073 416,359 
Costs and Expenses:
Operating Expense
Lease Operating Expense9,268 10,033 
Production, Ad Valorem, and Other Fees5,968 6,162 
Transportation, Gathering and Compression77,158 83,242 
Depreciation, Depletion and Amortization128,944 129,164 
Exploration and Production Related Other Costs2,076 3,888 
Purchased Gas Costs32,411 24,998 
Impairment of Exploration and Production Properties0 61,849 
Impairment of Goodwill0 473,045 
Selling, General, and Administrative Costs28,321 30,238 
Other Operating Expense15,658 20,681 
Total Operating Expense299,804 843,300 
Other Expense
Other Expense4,366 5,186 
Gain on Asset Sales and Abandonments, net(2,873)(12,055)
Gain on Debt Extinguishment0 (11,263)
Interest Expense36,372 48,995 
Total Other Expense37,865 30,863 
Total Costs and Expenses337,669 874,163 
Earnings (Loss) Before Income Tax135,404 (457,804)
Income Tax Expense (Benefit)37,379 (152,582)
Net Income (Loss)98,025 (305,222)
Less: Net Income Attributable to Noncontrolling Interest0 23,864 
Net Income (Loss) Attributable to CNX Resources Shareholders$98,025 $(329,086)
Earnings (Loss) per Share
Basic$0.45 $(1.76)
Diluted$0.43 $(1.76)
Dividends Declared$0 $0 
(Dollars in thousands, except per share data)Three Months EndedSix Months Ended
(Unaudited)June 30,June 30,
Revenue and Other Operating (Loss) Income:2021202020212020
Natural Gas, NGL and Oil Revenue$369,449 $175,776 $750,674 $427,270 
(Loss) Gain on Commodity Derivative Instruments(538,859)(63,303)(505,445)51,839 
Purchased Gas Revenue16,706 20,424 50,190 46,783 
Other Revenue and Operating Income25,494 15,944 50,445 39,308 
Total Revenue and Other Operating (Loss) Income(127,210)148,841 345,864 565,200 
Costs and Expenses:
Operating Expense
Lease Operating Expense10,248 10,244 19,516 20,277 
Production, Ad Valorem, and Other Fees7,445 5,384 13,413 11,546 
Transportation, Gathering and Compression84,114 60,025 161,273 143,267 
Depreciation, Depletion and Amortization122,607 113,545 251,551 242,709 
Exploration and Production Related Other Costs2,929 3,310 5,006 7,197 
Purchased Gas Costs14,551 19,989 46,961 44,987 
Impairment of Exploration and Production Properties0 0 0 61,849 
Impairment of Goodwill0 0 0 473,045 
Selling, General, and Administrative Costs23,677 23,419 51,998 53,657 
Other Operating Expense15,140 26,596 30,798 47,277 
Total Operating Expense280,711 262,512 580,516 1,105,811 
Other Expense
Other Expense5,865 4,799 10,231 9,985 
Gain on Asset Sales and Abandonments, net(7,186)(5,938)(10,060)(17,992)
Loss (Gain) on Debt Extinguishment0 344 0 (10,919)
Interest Expense39,576 46,256 75,948 95,252 
Total Other Expense38,255 45,461 76,119 76,326 
Total Costs and Expenses318,966 307,973 656,635 1,182,137 
Loss Before Income Tax(446,176)(159,132)(310,771)(616,937)
Income Tax Benefit(92,117)(28,646)(54,737)(181,228)
Net Loss(354,059)(130,486)(256,034)(435,709)
Less: Net Income Attributable to Noncontrolling Interest0 15,263 0 39,126 
Net Loss Attributable to CNX Resources Shareholders$(354,059)$(145,749)$(256,034)$(474,835)
Loss per Share
Basic$(1.61)$(0.78)$(1.16)$(2.54)
Diluted$(1.61)$(0.78)$(1.16)$(2.54)
Dividends Declared$0 $0 $0 $0 





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)20212020
Net Income (Loss)$98,025 $(305,222)
Other Comprehensive Income:
  Actuarially Determined Long-Term Liability Adjustments (Net of tax: $(48), $(40))135 112 
Comprehensive Income (Loss)98,160 (305,110)
Less: Comprehensive Income Attributable to Noncontrolling Interest0 23,864 
Comprehensive Income (Loss) Attributable to CNX Resources Shareholders$98,160 $(328,974)
 Three Months EndedSix Months Ended
(Dollars in thousands)June 30,June 30,
(Unaudited)2021202020212020
Net Loss$(354,059)$(130,486)$(256,034)$(435,709)
Other Comprehensive Income:
  Actuarially Determined Long-Term Liability Adjustments (Net of tax: $(48), $(39), $(96), $(79))136 111 271 223 
Comprehensive Loss(353,923)(130,375)(255,763)(435,486)
Less: Comprehensive Income Attributable to Noncontrolling Interest0 15,263 0 39,126 
Comprehensive Loss Attributable to CNX Resources Shareholders$(353,923)$(145,638)$(255,763)$(474,612)




































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,
2021		December 31,
2020
ASSETS
Current Assets:
Cash and Cash Equivalents$29,610 $15,617 
Restricted Cash733 735 
Accounts and Notes Receivable:
Trade, net147,714 145,929 
Other Receivables, net9,719 4,238 
Supplies Inventories7,249 9,657 
Recoverable Income Taxes0 88 
Derivative Instruments70,251 84,657 
Prepaid Expenses12,170 12,411 
Total Current Assets277,446 273,332 
Property, Plant and Equipment:
Property, Plant and Equipment11,084,358 10,963,996 
Less—Accumulated Depreciation, Depletion and Amortization4,064,594 3,938,451 
Total Property, Plant and Equipment—Net7,019,764 7,025,545 
Other Non-Current Assets:
Operating Lease Right-of-Use Assets93,226 108,683 
Derivative Instruments235,695 188,237 
Goodwill323,314 323,314 
Other Intangible Assets88,457 90,095 
Restricted Cash5,019 5,247 
Other26,316 27,311 
Total Other Non-Current Assets772,027 742,887 
TOTAL ASSETS$8,069,237 $8,041,764 
(Unaudited)
(Dollars in thousands)June 30,
2021		December 31,
2020
ASSETS
Current Assets:
Cash and Cash Equivalents$39,365 $15,617 
Restricted Cash768 735 
Accounts and Notes Receivable:
Trade, net157,667 145,929 
Other Receivables, net10,727 4,238 
Supplies Inventories5,698 9,657 
Recoverable Income Taxes0 88 
Derivative Instruments107,625 84,657 
Prepaid Expenses12,126 12,411 
Total Current Assets333,976 273,332 
Property, Plant and Equipment:
Property, Plant and Equipment11,128,496 10,963,996 
Less—Accumulated Depreciation, Depletion and Amortization4,119,856 3,938,451 
Total Property, Plant and Equipment—Net7,008,640 7,025,545 
Other Non-Current Assets:
Operating Lease Right-of-Use Assets83,618 108,683 
Derivative Instruments204,459 188,237 
Goodwill323,314 323,314 
Other Intangible Assets86,819 90,095 
Restricted Cash4,751 5,247 
Other26,533 27,311 
Total Other Non-Current Assets729,494 742,887 
TOTAL ASSETS$8,072,110 $8,041,764 





















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)June 30,
2021		December 31,
2020
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable$118,574 $118,185 
Derivative Instruments415,774 42,329 
Current Portion of Finance Lease Obligations406 6,876 
Current Portion of Long-Term Debt23,098 22,574 
Current Portion of Operating Lease Obligations47,198 52,575 
Other Accrued Liabilities204,145 198,773 
Total Current Liabilities809,195 441,312 
Non-Current Liabilities:
Long-Term Debt2,265,970 2,401,427 
Finance Lease Obligations854 1,057 
Operating Lease Obligations36,569 53,235 
Derivative Instruments285,865 127,290 
Deferred Income Taxes411,380 466,253 
Asset Retirement Obligations81,903 84,712 
Other43,443 44,041 
Total Non-Current Liabilities3,125,984 3,178,015 
TOTAL LIABILITIES3,935,179 3,619,327 
Stockholders’ Equity:
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 218,664,158 Issued and Outstanding at June 30, 2021; 220,440,993 Issued and Outstanding at December 31, 20202,191 2,208 
Capital in Excess of Par Value2,950,083 2,959,357 
Preferred Stock, 15,000,000 shares authorized, NaN issued and outstanding0 0 
Retained Earnings1,199,570 1,476,056 
Accumulated Other Comprehensive Loss(14,913)(15,184)
TOTAL STOCKHOLDERS' EQUITY4,136,931 4,422,437 
TOTAL LIABILITIES AND EQUITY$8,072,110 $8,041,764 

(Unaudited)
(Dollars in thousands, except per share data)March 31,
2021		December 31,
2020
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable$114,535 $118,185 
Derivative Instruments83,762 42,329 
Current Portion of Finance Lease Obligations5,139 6,876 
Current Portion of Long-Term Debt22,055 22,574 
Current Portion of Operating Lease Obligations52,500 52,575 
Other Accrued Liabilities179,916 198,773 
Total Current Liabilities457,907 441,312 
Non-Current Liabilities:
Long-Term Debt2,346,205 2,401,427 
Finance Lease Obligations956 1,057 
Operating Lease Obligations39,965 53,235 
Derivative Instruments83,705 127,290 
Deferred Income Taxes503,653 466,253 
Asset Retirement Obligations82,689 84,712 
Other43,747 44,041 
Total Non-Current Liabilities3,100,920 3,178,015 
TOTAL LIABILITIES3,558,827 3,619,327 
Stockholders’ Equity:
Common Stock, $.01 Par Value; 500,000,000 Shares Authorized, 220,263,606 Issued and Outstanding at March 31, 2021; 220,440,993 Issued and Outstanding at December 31, 20202,207 2,208 
Capital in Excess of Par Value2,959,934 2,959,357 
Preferred Stock, 15,000,000 shares authorized, NaN issued and outstanding0 0 
Retained Earnings1,563,318 1,476,056 
Accumulated Other Comprehensive Loss(15,049)(15,184)
TOTAL STOCKHOLDERS' EQUITY4,510,410 4,422,437 
TOTAL LIABILITIES AND EQUITY$8,069,237 $8,041,764 















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)
(Unaudited)		Common
Stock		Capital in
Excess
of Par
Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
CNX Resources
Stockholders’
Equity		Non-
Controlling
Interest		Total
Equity
March 31, 2021$2,207 $2,959,934 $1,563,318 $(15,049)$4,510,410 $— $4,510,410 
Net Loss— — (354,059)— (354,059)— (354,059)
Issuance of Common Stock— 2 — — 2 — 2 
Purchase and Retirement of Common Stock(17)(13,030)(9,644)— (22,691)— (22,691)
Shares Withheld for Taxes— — (45)— (45)— (45)
Amortization of Stock-Based Compensation Awards1 3,177 — — 3,178 — 3,178 
Other Comprehensive Income— — — 136 136 — 136 
June 30, 2021$2,191 $2,950,083 $1,199,570 $(14,913)$4,136,931 $— $4,136,931 
(Dollars in thousands)
(Unaudited)
March 31, 2020$1,874 $2,205,941 $1,641,009 $(12,493)$3,836,331 $808,379 $4,644,710 
Net (Loss) Income— — (145,749)— (145,749)15,263 (130,486)
Issuance of Common Stock4 1,646 — — 1,650 — 1,650 
Shares Withheld for Taxes— — (63)— (63)— (63)
Amortization of Stock-Based Compensation Awards— 2,186 — — 2,186 380 2,566 
Equity Component of Convertible Senior Notes, net of Issuance Costs— 78,307 — — 78,307 — 78,307 
Purchase of Capped Call— (26,351)— — (26,351)— (26,351)
Other Comprehensive Income— — — 111 111 — 111 
Distributions to CNXM Noncontrolling Interest Holders— — — — — (3,490)(3,490)
June 30, 2020$1,878 $2,261,729 $1,495,197 $(12,382)$3,746,422 $820,532 $4,566,954 





















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




89




CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands)Common StockCapital in
Excess
of Par
Value		Retained EarningsAccumulated Other Comprehensive LossTotal
CNX Resources Stockholders’ Equity		Non- Controlling InterestTotal Equity
December 31, 2020$2,208 $2,959,357 $1,476,056 $(15,184)$4,422,437 $— $4,422,437 
(Unaudited)
Net Loss— — (256,034)— (256,034)— (256,034)
Issuance of Common Stock7 4,794 — — 4,801 — 4,801 
Purchase and Retirement of Common Stock(31)(24,731)(15,916)— (40,678)— (40,678)
Shares Withheld for Taxes— — (4,536)— (4,536)— (4,536)
Amortization of Stock-Based Compensation Awards7 10,696 — — 10,703 — 10,703 
Equity Component of Convertible Senior Notes, net of Issuance Costs— (33)— — (33)— (33)
Other Comprehensive Income— — — 271 271 — 271 
June 30, 2021$2,191 $2,950,083 $1,199,570 $(14,913)$4,136,931 $— $4,136,931 
(Dollars in thousands)
December 31, 2019$1,870 $2,199,605 $1,971,676 $(12,605)$4,160,546 $801,763 $4,962,309 
(Unaudited)
Net (Loss) Income— — (474,835)— (474,835)39,126 (435,709)
Issuance of Common Stock8 1,646 — — 1,654 — 1,654 
Shares Withheld for Taxes— — (1,644)— (1,644)(309)(1,953)
Amortization of Stock-Based Compensation Awards— 8,522 — — 8,522 884 9,406 
Equity Component of Convertible Senior Notes, net of Issuance Costs— 78,307 — — 78,307 — 78,307 
Purchase of Capped Call— (26,351)— — (26,351)— (26,351)
Other Comprehensive Income— — — 223 223 — 223 
Distributions to CNXM Noncontrolling Interest Holders— — — — — (20,932)(20,932)
June 30, 2020$1,878 $2,261,729 $1,495,197 $(12,382)$3,746,422 $820,532 $4,566,954 

(Dollars in thousands)Common
Stock		Capital in
Excess
of Par
Value		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
CNX Resources
Stockholders’
Equity		Non-
Controlling
Interest		Total
Equity
December 31, 2020$2,208 $2,959,357 $1,476,056 $(15,184)$4,422,437 $— $4,422,437 
(Unaudited)
Net Income— — 98,025 — 98,025 — 98,025 
Issuance of Common Stock7 4,792 — — 4,799 — 4,799 
Purchase and Retirement of Common Stock(14)(11,701)(6,272)— (17,987)— (17,987)
Shares Withheld for Taxes— — (4,491)— (4,491)— (4,491)
Amortization of Stock-Based Compensation Awards6 7,519 — — 7,525 — 7,525 
Equity Component of Convertible Senior Notes, net of Issuance Costs— (33)— — (33)— (33)
Other Comprehensive Income— — — 135 135 — 135 
March 31, 2021$2,207 $2,959,934 $1,563,318 $(15,049)$4,510,410 $— $4,510,410 
(Dollars in thousands)
December 31, 2019$1,870 $2,199,605 $1,971,676 $(12,605)$4,160,546 $801,763 $4,962,309 
(Unaudited)
Net (Loss) Income— — (329,086)— (329,086)23,864 (305,222)
Issuance of Common Stock4 — — — 4 — 4 
Shares Withheld for Taxes— — (1,581)— (1,581)(309)(1,890)
Amortization of Stock-Based Compensation Awards— 6,336 — — 6,336 504 6,840 
Other Comprehensive Income— — — 112 112 — 112 
Distributions to CNXM Noncontrolling Interest Holders— — — — — (17,443)(17,443)
March 31, 2020$1,874 $2,205,941 $1,641,009 $(12,493)$3,836,331 $808,379 $4,644,710 


















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

910


CNX RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)Six Months Ended
Dollars in ThousandsJune 30,
Cash Flows from Operating Activities:20212020
Net Loss$(256,034)$(435,709)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization251,551 242,709 
Amortization of Deferred Financing Costs12,156 8,795 
Impairment of Exploration and Production Properties0 61,849 
Impairment of Goodwill0 473,045 
Stock-Based Compensation10,703 9,406 
Gain on Asset Sales and Abandonments, net(10,060)(17,992)
Gain on Debt Extinguishment0 (10,919)
Loss (Gain) on Commodity Derivative Instruments505,445 (51,839)
(Gain) Loss on Other Derivative Instruments(4,659)14,237 
Net Cash (Paid) Received in Settlement of Commodity Derivative Instruments(7,954)293,417 
Deferred Income Taxes(54,970)(125,429)
Other(704)1,552 
Changes in Operating Assets:
Accounts and Notes Receivable(18,191)68,270 
Recoverable Income Taxes88 (52,015)
Supplies Inventories1,936 (3,333)
Prepaid Expenses586 6,542 
Changes in Other Assets(1,084)396 
Changes in Operating Liabilities:
Accounts Payable14,701 (15,488)
Accrued Interest14,762 (5,558)
Other Operating Liabilities720 (49,620)
Changes in Other Liabilities(117)(1,131)
Net Cash Provided by Operating Activities458,875 411,185 
Cash Flows from Investing Activities:
Capital Expenditures(252,387)(286,901)
Proceeds from Asset Sales11,969 26,126 
Net Cash Used in Investing Activities(240,418)(260,775)
Cash Flows from Financing Activities:
Payments on Miscellaneous Borrowings(2,526)(3,569)
Payments on Long-Term Notes0 (468,865)
Net (Payments on) Proceeds from CNXM Revolving Credit Facility(131,000)7,250 
Net Payments on CNX Revolving Credit Facility
(800)(111,000)
Net (Payments on) Proceeds from CSG Non-Revolving Credit Facilities(13,113)169,583 
Proceeds from Issuance of Convertible Senior Notes0 334,650 
Purchase of Capped Call Related to Convertible Senior Notes0 (35,673)
Distributions to CNXM Noncontrolling Interest Holders0 (20,932)
Proceeds from Issuance of Common Stock4,801 1,654 
Shares Withheld for Taxes(4,536)(1,953)
Purchases of Common Stock(46,678)0 
Debt Issuance and Financing Fees(1,320)(11,917)
Net Cash Used in Financing Activities(195,172)(140,772)
Net Increase in Cash, Cash Equivalents and Restricted Cash23,285 9,638 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period21,599 16,283 
Cash, Cash Equivalents, and Restricted Cash at End of Period$44,884 $25,921 
(Unaudited)Three Months Ended
Dollars in ThousandsMarch 31,
Cash Flows from Operating Activities:20212020
Net Income (Loss)$98,025 $(305,222)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization128,944 129,164 
Amortization of Deferred Financing Costs6,034 2,447 
Impairment of Exploration and Production Properties0 61,849 
Impairment of Goodwill0 473,045 
Stock-Based Compensation7,525 6,840 
Gain on Asset Sales and Abandonments(2,873)(12,055)
Gain on Debt Extinguishment0 (11,263)
Gain on Commodity Derivative Instruments(33,414)(115,142)
(Gain) Loss on Other Derivative Instruments(4,194)10,639 
Net Cash Received in Settlement of Commodity Derivative Instruments2,405 151,161 
Deferred Income Taxes37,352 (99,746)
Other(150)161 
Changes in Operating Assets:
Accounts and Notes Receivable(7,586)43,639 
Recoverable Income Taxes88 (52,836)
Supplies Inventories411 (3,282)
Prepaid Expenses290 4,710 
Changes in Other Assets(36)692 
Changes in Operating Liabilities:
Accounts Payable(3,807)2,322 
Accrued Interest(9,872)(5,063)
Other Operating Liabilities562 (13,626)
Changes in Other Liabilities(56)(1,047)
Net Cash Provided by Operating Activities219,648 267,387 
Cash Flows from Investing Activities:
Capital Expenditures(123,429)(152,049)
Proceeds from Asset Sales5,005 13,975 
Net Cash Used in Investing Activities(118,424)(138,074)
Cash Flows from Financing Activities:
Payments on Miscellaneous Borrowings(1,838)(1,792)
Payments on Long-Term Notes0 (59,880)
Net (Payments on) Proceeds from CNXM Revolving Credit Facility(54,000)35,250 
Net Payments on CNX Revolving Credit Facility
(800)(224,000)
Net (Payments on) Proceeds from CSG Non-Revolving Credit Facilities(5,823)173,250 
Distributions to CNXM Noncontrolling Interest Holders0 (17,443)
Proceeds from Issuance of Common Stock4,799 4 
Shares Withheld for Taxes(4,491)(1,890)
Purchases of Common Stock(23,988)0 
Debt Issuance and Financing Fees(1,320)(11,069)
Net Cash Used in Financing Activities(87,461)(107,570)
Net Increase in Cash, Cash Equivalents and Restricted Cash13,763 21,743 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period21,599 16,283 
Cash, Cash Equivalents, and Restricted Cash at End of Period$35,362 $38,026 


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

1011

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 and six months ended March 31,June 30, 2021 are not necessarily indicative of the results that may be expected for future periods.

The Consolidated Balance Sheet at December 31, 2020 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, 2020 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 9, 2021.

On September 28, 2020, the Merger (as defined in Note 13 – Acquisitions and Dispositions) of CNX Midstream Partners LP (CNXM) was completed. Prior to the Merger, public unitholders held a 46.9% equity interest in CNXM and CNX owned the remaining 53.1% equity interest. The earnings of CNXM that were attributed to its common units held by the public prior to the Merger are reflected in net income attributable to noncontrolling interest in the Consolidated Statements of Income. There were no changes in our ownership interest in CNXM during either the three and six months ended March 31,June 30, 2021 orand 2020.

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,June 30,
2021202020212020
Cash and Cash EquivalentsCash and Cash Equivalents$29,610 $31,833 Cash and Cash Equivalents$39,365 $19,607 
Restricted Cash, Current PortionRestricted Cash, Current Portion733 853 Restricted Cash, Current Portion768 738 
Restricted Cash, Less Current PortionRestricted Cash, Less Current Portion5,019 5,340 Restricted Cash, Less Current Portion4,751 5,576 
Total Cash, Cash Equivalents, and Restricted CashTotal Cash, Cash Equivalents, and Restricted Cash$35,362 $38,026 Total Cash, Cash Equivalents, and Restricted Cash$44,884 $25,921 

Restricted Cash

Restricted cash consists of cash that the Company is 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 (See Note 9 - Long-Term Debt for more information).

Receivables

As of March 31,June 30, 2021 and December 31, 2020, Accounts Receivable - Trade were $147,714$157,667 and $145,929, respectively, and Other Receivables were $9,719$10,727 and $4,238, 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.


1112

The following represents the roll forward of the allowance for credit losses for the threesix months ended:
March 31,June 30,
2021202020212020
Allowance for Credit Losses - Trade, Beginning of YearAllowance for Credit Losses - Trade, Beginning of Year$84 $0 Allowance for Credit Losses - Trade, Beginning of Year$84 $0 
Provision for Expected Credit LossesProvision for Expected Credit Losses0 131 Provision for Expected Credit Losses0 78 
Allowance for Credit Losses - Trade, End of PeriodAllowance for Credit Losses - Trade, End of Period$84 $131 Allowance for Credit Losses - Trade, End of Period$84 $78 
Allowance for Credit Losses - Other Receivables, Beginning of YearAllowance for Credit Losses - Other Receivables, Beginning of Year$3,248 $2,463 Allowance for Credit Losses - Other Receivables, Beginning of Year$3,248 $2,463 
Provision for Expected Credit LossesProvision for Expected Credit Losses(129)2,566 Provision for Expected Credit Losses(55)2,736 
Write-off of Uncollectible AccountsWrite-off of Uncollectible Accounts(18)0 Write-off of Uncollectible Accounts(15)(69)
Allowance for Credit Losses - Other Receivables, End of PeriodAllowance for Credit Losses - Other Receivables, End of Period$3,101 $5,029 Allowance for Credit Losses - Other Receivables, End of Period$3,178 $5,130 

NOTE 2—EARNINGS PER SHARE:

Basic earnings per share is computed by dividing net income attributable to CNX shareholders 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, performance 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 and performance share options were exercised, that outstanding restricted stock units and performance share units were released, that the shares that are issuable from the Convertible Notes are converted (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 antidilutive effect.

Pursuant to the Merger (See Note 13 - Acquisitions and Dispositions for more information), all outstanding phantom units previously granted under the CNXM long-term incentive plan were converted into the right to receive 0.88 shares of common stock of CNX. As such, all outstanding phantom units were converted, effective as of the closing of the Merger, into CNX restricted stock units. Each CNX restricted stock unit is subject to the same vesting, forfeiture and other terms and conditions applicable to the converted CNXM phantom units. Under Accounting Standards Codification Topic 718, Compensation - Stock Compensation, it was determined that there was no additional compensation cost to record as the conversion of awards did not result in incremental fair value. CNXM's dilutive units did not have a material impact on the Company's earnings per share calculations for the three or six months ended March 31,June 30, 2020.

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 antidilutive:
For the Three Months Ended March 31, For the Three Months Ended June 30,For the Six Months Ended June 30,
20212020 2021202020212020
Anti-Dilutive OptionsAnti-Dilutive Options943,838 4,274,552 Anti-Dilutive Options3,029,168 4,256,409 3,029,168 4,256,409 
Anti-Dilutive Restricted Stock UnitsAnti-Dilutive Restricted Stock Units66,705 2,007,960 Anti-Dilutive Restricted Stock Units2,484,443 2,009,678 2,484,443 2,009,678 
Anti-Dilutive Performance Share UnitsAnti-Dilutive Performance Share Units0 457,746 Anti-Dilutive Performance Share Units1,011,443 651,131 1,011,443 651,131 
Anti-Dilutive Performance Stock Options0 927,268 
1,010,543 7,667,526 
6,525,054 6,917,218 6,525,054 6,917,218 

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. As of March 31, 2021, the if-converted value of the Convertible Notes did exceed the outstanding principal amount. 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.



1213

The table below sets forth the share-based awards that have been exercised or released:
 For the Three Months Ended March 31,
 20212020
Options656,368 0 
Restricted Stock Units701,757 340,883 
Performance Share Units291,653 274,716 
1,649,778 615,599 
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
Options205 239,839 656,573 239,839 
Restricted Stock Units34,056 163,157 735,813 504,040 
Performance Share Units0 0 291,653 274,716 
34,261 402,996 1,684,039 1,018,595 

The computations for basic and diluted earnings (loss)loss per share are as follows:
For the Three Months Ended March 31,
 20212020
Net Income (Loss)$98,025 $(305,222)
Less: Net Income Attributable to Noncontrolling Interest0 23,864 
Net Income (Loss) Attributable to CNX Resources Shareholders$98,025 $(329,086)
Weighted-Average Shares of Common Stock Outstanding219,923,634 186,918,361 
Effect of Diluted Shares*8,746,814 0 
Weighted-Average Diluted Shares of Common Stock Outstanding228,670,448 186,918,361 
Earnings (Loss) per Share:
Basic$0.45 $(1.76)
Diluted$0.43 $(1.76)
For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
Net Loss$(354,059)$(130,486)$(256,034)$(435,709)
Less: Net Income Attributable to Noncontrolling Interest0 15,263 0 39,126 
Net Loss Attributable to CNX Resources Shareholders$(354,059)$(145,749)$(256,034)$(474,835)
Weighted-Average Shares of Common Stock Outstanding219,897,242 187,316,463 219,910,365 187,117,412 
Effect of Diluted Shares*0 0 0 0 
Weighted-Average Diluted Shares of Common Stock Outstanding219,897,242 187,316,463 219,910,365 187,117,412 
Loss per Share:
Basic$(1.61)$(0.78)$(1.16)$(2.54)
Diluted$(1.61)$(0.78)$(1.16)$(2.54)
*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.


1314


Disaggregation of Revenue

The following table is a disaggregation of revenue by major source:
For the Three Months Ended March 31,For the Three Months Ended June 30,For the Six Months Ended June 30,
202120202021202020212020
Revenue from Contracts with Customers:Revenue from Contracts with Customers:Revenue from Contracts with Customers:
Natural Gas RevenueNatural Gas Revenue$347,376 $229,599 Natural Gas Revenue$320,982 $168,510 $668,358 $398,108 
NGL RevenueNGL Revenue31,863 19,412 NGL Revenue41,521 6,226 73,384 25,638 
Oil/Condensate RevenueOil/Condensate Revenue1,986 2,483 Oil/Condensate Revenue6,946 1,040 8,932 3,524 
Total Natural Gas, NGL and Oil RevenueTotal Natural Gas, NGL and Oil Revenue381,225 251,494 Total Natural Gas, NGL and Oil Revenue369,449 175,776 750,674 427,270 
Purchased Gas RevenuePurchased Gas Revenue33,484 26,359 Purchased Gas Revenue16,706 20,424 50,190 46,783 
Other Sources of Revenue and Other Operating Income:
Gain on Commodity Derivative Instruments33,414 115,142 
Other Sources of Revenue and Other Operating (Loss) Income:Other Sources of Revenue and Other Operating (Loss) Income:
(Loss) Gain on Commodity Derivative Instruments(Loss) Gain on Commodity Derivative Instruments(538,859)(63,303)(505,445)51,839 
Other Revenue and Operating IncomeOther Revenue and Operating Income24,950 23,364 Other Revenue and Operating Income25,494 15,944 50,445 39,308 
Total Revenue and Other Operating Income$473,073 $416,359 
Total Revenue and Other Operating (Loss) IncomeTotal Revenue and Other Operating (Loss) Income$(127,210)$148,841 $345,864 $565,200 

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

Contract Balances

CNX invoices its customers once a performance obligation has been satisfied, at which point payment is unconditional. Accordingly, CNX's contracts with customers do not give rise to contract assets or liabilities under ASC 606. The Company has 0 contract assets recognized from the costs to obtain or fulfill a contract with a customer. The opening balance as of January 1, 2021 and the closing balance as of March 31,June 30, 2021 of the Company’s receivables related to contracts with customers were $145,929 and $147,714,$157,667, respectively.

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 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 $53,554$75,892 as of March 31,June 30, 2021. The Company expects to recognize net revenue of $15,496$20,918 in the next 12 months and $11,236$17,438 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.


1415

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 and six months ended March 31,June 30, 2021 and 2020, 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 and six months ended March 31,June 30, 2021 were 20.6% and 17.6%, respectively. The effective tax rates for the three and six months ended June 30, 2020 were 27.6%18.0% and 33.3%29.4%, respectively. The effective tax rate for the three and six months ended March 31,June 30, 2021 differs from the U.S. federal statutory rate of 21.0% primarily due to the impact of equity compensation and state taxes. The effective tax rate for the three and six months ended March 31,June 30, 2020 differs from the U.S. federal statutory rate of 21.0% primarily due to the impact of noncontrolling interest (See Note 13 - Acquisitions and Dispositions for more information), equity compensation, and state taxes.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the “Act”) which, among other things, removed the 80% taxable income limitation for utilization of net operating losses generated in tax years 2018 through 2020, allowing for 5-year net operating loss carrybacks, increased the adjusted taxable income limitation for the disallowance of interest expense from 30% to 50%, and provided for refunds of any remaining alternative minimum tax (AMT) credits. As a result of the Act, the Company recorded in the first quarter of 2020 AMT refunds of $102,482 in Recoverable Income Taxes in the Consolidated Balance Sheets for the AMT refund received in 2020. The impact of other tax implications of the Act on the financial statements and related disclosures are immaterial.

The total amount of uncertain tax positions at March 31,June 30, 2021 and December 31, 2020 was $31,891. If these uncertain tax positions were recognized, approximately $31,891 would affect CNX's effective tax rate at March 31,June 30, 2021 and December 31, 2020. There was no change to the unrecognized tax benefits during the three and six months ended March 31,June 30, 2021.

CNX recognizes accrued interest and penalties related to uncertain tax positions in interest expense and income tax expense, respectively. As of March 31,June 30, 2021 and December 31, 2020, CNX had 0 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 2016. The Internal Revenue Service and the Joint Committee on Taxation concluded its review of tax years 2016 through 2017 during the third quarter of 2020.

West Virginia enacted legislation in April 2021 that, among other things, instituted a single sales factor apportionment formula.formula effective July 1, 2022. The Company revised the deferred tax state apportionment rates for several states to reflect the recent legislative change resulting in a net increase of $11,455 in deferred tax expense in the Consolidated Statements of Income. The net increase in deferred tax expense is currently evaluating the impact tocomprised of an increase of $16,507 in deferred taxes relating to state apportionment rate changes and related valuation allowancesa $5,052 decrease in the consolidated financial statements.valuation allowance against various state net operating losses.

16

NOTE 5—PROPERTY, PLANT AND EQUIPMENT:
June 30,
2021		December 31,
2020
Intangible Drilling Cost$5,127,989 $4,965,252 
Gas Gathering Equipment2,459,197 2,510,917 
Proved Gas Properties1,271,774 1,253,094 
Gas Wells and Related Equipment1,164,025 1,120,061 
Unproved Gas Properties718,042 725,705 
Surface Land and Other Equipment197,956 199,322 
Other189,513 189,645 
Total Property, Plant and Equipment11,128,496 10,963,996 
Less: Accumulated Depreciation, Depletion and Amortization4,119,856 3,938,451 
Total Property, Plant and Equipment - Net$7,008,640 $7,025,545 
March 31,
2021		December 31,
2020
Intangible Drilling Cost$5,056,060 $4,965,252 
Gas Gathering Equipment2,519,293 2,510,917 
Proved Gas Properties1,270,178 1,253,094 
Gas Wells and Related Equipment1,138,212 1,120,061 
Unproved Gas Properties711,881 725,705 
Surface Land and Other Equipment199,147 199,322 
Other189,587 189,645 
Total Property, Plant and Equipment11,084,358 10,963,996 
Less: Accumulated Depreciation, Depletion and Amortization4,064,594 3,938,451 
Total Property, Plant and Equipment - Net$7,019,764 $7,025,545 

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Impairment of Proved Property

CNX performs a quantitative impairment test whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable, over proved properties using forward commodity prices, timing, methods and other assumptions consistent with historical periods. When indicators of impairment are present, tests require that the Company first compare expected future undiscounted cash flows by asset group to their respective carrying values. If the carrying amount exceeds the estimated undiscounted future cash flows, a reduction of the carrying amount of the natural gas properties to their estimated fair values is required, which is generally determined based on an estimation of discounted cash flows using significant assumptions including projected revenues, future commodity prices, and a market-specific weighted average cost of capital which are affected by expectations about future market and economic conditions.

During the threesix months ended March 31,June 30, 2020, CNX recognized certain indicators of impairment specific to our Southwest Pennsylvania Coalbed Methane asset group and determined that the carrying value of that asset group was not recoverable. The fair value of the asset group was estimated by using level 3 inputs which consisted of discounting the estimated future cash flows using discount rates and other assumptions that market participants would use in their estimates of fair value. As a result, an impairment of $61,849 was recognized and is included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income. The impairment was related to an economic decision to temporarily idle certain wells and the related processing facility during the first quarter of 2020.

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 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.





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Impairment of Goodwill

All goodwill is attributed to the Midstream reporting unit within the Shale segment. Goodwill is evaluated for impairment at least annually and whenever events or changes in circumstance indicate that the fair value of a reporting unit is less than its carrying amount. In connection with the evaluation of goodwill for impairment, CNX may first consider qualitative factors to assess whether there are indicators that it is more likely than not that the fair value of a reporting unit may not exceed its carrying amount. If after assessing such factors or circumstances, CNX determines it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then a quantitative assessment is not required. If CNX chooses to bypass the qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then CNX will perform a quantitative assessment. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. The Company uses a combination of the income approach (generally a discounted cash flow method) and market approach (which may include the guideline public company method and/or the guideline transaction method) to estimate the fair value of a reporting unit.

During the first quarter of 2020, the Company identified indicators of impairment in the form of deteriorating macroeconomic conditions, and the decline in the observable market value of CNXM securities both in relation to the COVID-19 pandemic and the overall decline in the master limited partnership (MLP) market space. Management concluded that these factors presented indications that the fair value of the Midstream reporting unit was more likely than not below the reporting unit’s carrying value. CNX bypassed the qualitative assessment and performed a quantitative test that utilized a

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combination of the income and market approaches as described above to estimate the fair value of the Midstream reporting unit. As a result of this assessment, CNX concluded that the carrying value exceeded its estimated fair value, and a corresponding impairment of $473,045 was included in Impairment of Goodwill in the accompanying Consolidated Statements of Income. Any additional adverse changes in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that could trigger future impairment charges.

In estimating the fair value of the Midstream reporting unit, the Company used the income approach’s discounted cash flow method, which applies significant inputs not observable in the public market (Level 3), including estimates and assumptions related to the use of an appropriate discount rate, future throughput volumes, operating costs and capital spending, discounted to present value using an industry rate adjusted for company-specific risk, which management feels reflects the overall level of inherent risk of the reporting unit. These assumptions are affected by expectations about future market, industry and economic conditions. Cash flow projections were derived from board approved budgeted amounts, a seven-year operating forecast and an estimate of future cash flows. Subsequent cash flows were developed using growth or contraction rates that management believes are reasonably likely to occur. The Company used the market approach’s comparable company method. The comparable company method evaluates the value of a company using metrics of other businesses of similar size and industry.

The estimates of future cash flows utilized in the impairment analysis described above were subjective in nature and are subject to impacts from business risks as described in “Item 1A. Risk Factors” in CNX's 2020 Annual Report on Form 10-K as filed with the SEC on February 9, 2021 ("2020 Form 10-K"). The fair value estimation process requires considerable judgment and determining the fair value is sensitive to changes in assumptions impacting management’s estimates of future financial results. Although CNX believes the estimates and assumptions used in estimating the fair value are reasonable and appropriate, different assumptions and estimates could materially impact the estimated fair value. Future results could differ from our current estimates and assumptions.

Changes in the carrying amount of goodwill consist of the following activity:
For the Three Months Ended March 31,For the Six Months Ended June 30,
2021202020212020
Carrying Amount, Beginning of PeriodCarrying Amount, Beginning of Period$323,314 $796,359 Carrying Amount, Beginning of Period$323,314 $796,359 
ImpairmentImpairment0 473,045 Impairment0 473,045 
Carrying Amount, End of PeriodCarrying Amount, End of Period$323,314 $323,314 Carrying Amount, End of Period$323,314 $323,314 







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Other Intangible Assets

The carrying amount and accumulated amortization of other intangible assets consist of the following:
March 31,
2021		December 31,
2020
Other Intangible Assets:
Gross Amortizable Asset - Customer Relationships$109,752 $109,752 
Less: Accumulated Amortization - Customer Relationships21,295 19,657 
Total Other Intangible Assets, net$88,457 $90,095 
June 30,
2021		December 31,
2020
Other Intangible Assets:
Gross Amortizable Asset - Customer Relationships$109,752 $109,752 
Less: Accumulated Amortization - Customer Relationships22,933 19,657 
Total Other Intangible Assets, net$86,819 $90,095 

The customer relationship intangible asset is being amortized on a straight-line basis over approximately 17 years. Amortization expense related to other intangible assets was $1,638 for the three months ended March 31,June 30, 2021 and 2020, and $3,276 for the six months ended June 30, 2021 and 2020. 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
CNX's senior secured revolving credit facility ("(the "CNX Credit Facility") matures in April 2024. Borrowings under the CNX Credit Facility are subject to borrowing base limitations based on the collateral value of CNX’s assets and are subject to regular semi-annual redeterminations. In November 2020, as part of the issuance of the $500,000 6.00% Senior Notes due January 2029 (See Note 9 - Long-Term Debt), both the lenders' commitments and borrowing base under the Credit Facility decreased to $1,775,000 from $1,900,000. In April 2021, as part of the semi-annual borrowing base redetermination, the lenders reaffirmed CNX's $1,775,000 borrowing base.


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Under the terms of the agreement,CNX Credit Facility, borrowings under the revolving credit facility will bear interest at CNX's option at either:
•the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (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, which is the LIBOR rate plus a margin ranging from 1.75% to 2.75%.

The CNX Credit Facility contains a number of affirmative and negative covenants including those that, except in certain circumstances, limit the Company and the subsidiary guarantors' ability to create, incur, assume or suffer to exist indebtedness, create or permit to exist liens on properties, dispose of assets, make investments, purchase or redeem CNX common stock, pay dividends, merge with another corporation or amend the senior unsecured notes. The Company must also mortgage 85% of the value of its proved reserves and 85% of the value of its proved developed producing reserves, in each case, which are included in the borrowing base, maintain applicable deposit, securities and commodities accounts with the lenders or affiliates thereof, and enter into control agreements with respect to such applicable accounts.

The CNX Credit Facility contains customary events of default, including, but not limited to, a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants.

The CNX Credit Facility also requires that CNX maintain a maximum net leverage ratio of no greater than 4.00 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 under the CNX Credit Facility, to current liabilities, excluding borrowings under the revolver,CNX Credit Facility, measured quarterly. The calculation of all of the ratios exclude CNXM. CNX was in compliance with all financial covenants as of March 31,June 30, 2021.

At March 31,June 30, 2021, the CNX Credit Facility had $160,000 of borrowings outstanding and $188,567 of letters of credit outstanding, leaving $1,426,433 of unused capacity. At December 31, 2020, the CNX Credit Facility had $160,800 of borrowings outstanding and $185,272 of letters of credit outstanding, leaving $1,428,928 of unused capacity.

CNX Midstream Partners LP (CNXM)
CNXM's senior secured revolving credit facility (the "CNXM Credit Facility") matures in April 2024. The lenders’ commitments under the CNXM Credit Facility are $600,000, with an accordion feature that allows CNXM to increase the

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available borrowings by up to an additional $250,000 under certain terms and conditions. The CNXM Credit Facility includes the ability to issue letters of credit up to $100,000 in the aggregate.
Under the terms of the amended agreement, borrowings under the CNXM Credit Facility, borrowings will bear interest at CNXM's option at either:
•the base rate, which is the highest of (i) the federal funds open rate plus 0.50%, (ii) PNC Bank, N.A.’s prime rate, or (iii) the one-month LIBOR rate plus 1.0%, in each case, plus a margin ranging from 0.50% to 1.50%; or
•the LIBOR rate, plus a margin ranging from 1.50% to 2.50%.
Fees and interest rate spreads under the CNXM Credit Facility are based on the total leverage ratio, measured quarterly.

The CNXM Credit Facility requires CNXM to comply with a number of affirmative and negative covenants. In addition, CNXM is obligated to maintain at the end of each fiscal quarter (w) for so long as at least $150,000 of the CNXM 6.50% Senior Notes due March 2026 (CNXM Senior Notes) are outstanding, a maximum total leverage ratio of no greater than 5.25 to 1.00 (which increases to no greater than 5.50 to 1.00 during qualifying acquisition periods); (x) if less than $150,000 of the CNXM Senior Notes are outstanding, a maximum total leverage ratio of no greater than 4.75 to 1.00 (which increases to no greater than 5.25 to 1.00 during qualifying acquisition periods); (y) a maximum secured leverage ratio of no greater than 3.50 to 1.00 and (z) a minimum interest coverage ratio of no less than 2.50 to 1.00. CNXM was in compliance with all financial covenants as of March 31,June 30, 2021.

The CNXM Credit Facility also contains customary events of default, including, but not limited to, a cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The obligations under the revolving credit facilityCNXM Credit Facility are secured by substantially all of the assets of CNXM and its wholly-owned subsidiaries. CNX is not a guarantor under the CNXM Credit Facility.

At March 31,June 30, 2021, the CNXM Credit Facility had $237,000$160,000 of borrowings outstanding and $30 of letters of credit outstanding, leaving $362,970$439,970 of unused capacity. At December 31, 2020, the CNXM Credit Facility had $291,000 of borrowings outstanding and $30 of letters of credit outstanding, leaving $308,970 of unused capacity.

NOTE 8—OTHER ACCRUED LIABILITIES:
June 30,
2021		December 31,
2020
Royalties$85,968 $72,401 
Accrued Interest41,310 26,549 
Transportation Charges17,648 15,969 
Accrued Other Taxes13,430 10,580 
Deferred Revenue10,980 10,986 
Accrued Payroll & Benefits7,070 5,009 
Short-Term Incentive Compensation5,323 20,340 
Litigation Contingency2,410 2,025 
Purchased Gas Payable428 1,528 
Other9,306 23,144 
Current Portion of Long-Term Liabilities:
Asset Retirement Obligations8,455 8,455 
Salary Retirement1,817 1,787 
Total Other Accrued Liabilities$204,145 $198,773 


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NOTE 8—OTHER ACCRUED LIABILITIES:
March 31,
2021		December 31,
2020
Royalties$83,682 $72,401 
Transportation Charges17,228 15,969 
Accrued Interest16,677 26,549 
Deferred Revenue10,889 10,986 
Accrued Other Taxes9,980 10,580 
Accrued Payroll & Benefits6,026 5,009 
Litigation Contingency5,884 2,025 
Purchased Gas Payable3,280 1,528 
Short-Term Incentive Compensation2,608 20,340 
Other13,405 23,144 
Current Portion of Long-Term Liabilities:
Asset Retirement Obligations8,455 8,455 
Salary Retirement1,802 1,787 
Total Other Accrued Liabilities$179,916 $198,773 

NOTE 9—LONG-TERM DEBT:
March 31,
2021		December 31,
2020
Senior Notes due March 2027 at 7.25% (Principal of $700,000 plus Unamortized Premium of $6,417 and $6,686, respectively)$706,417 $706,686 
Senior Notes due January 2029 at 6.00%, Issued at Par Value500,000 500,000 
CNX Midstream Partners LP Senior Notes due March 2026 at 6.50% (Principal of $400,000 less Unamortized Discount of $3,688 and $3,875, respectively)*396,312 396,125 
Convertible Senior Notes due May 2026 at 2.25% (Principal of $345,000 less Unamortized Discount and Issuance Costs of $103,760 and $107,735, respectively)241,240 237,265 
CNX Midstream Partners LP Revolving Credit Facility*237,000 291,000 
CNX Revolving Credit Facility160,000 160,800 
Cardinal States Gathering Company Credit Facility maturing in March 2028 (Principal of $111,389 and $114,985, respectively, less Unamortized Discount of $1,087 and $1,126, respectively)110,302 113,859 
CSG Holdings II LLC Credit Facility maturing in March 2027 (Principal of $43,331 and $45,559, respectively, less Unamortized Discount of $425 and $441, respectively)42,906 45,118 
Less: Unamortized Debt Issuance Costs25,917 26,852 
2,368,260 2,424,001 
Less: Amounts Due in One Year22,055 22,574 
Long-Term Debt$2,346,205 $2,401,427 
June 30,
2021		December 31,
2020
Senior Notes due March 2027 at 7.25% (Principal of $700,000 plus Unamortized Premium of $6,147 and $6,686, respectively)$706,147 $706,686 
Senior Notes due January 2029 at 6.00%, Issued at Par Value500,000 500,000 
CNX Midstream Partners LP Senior Notes due March 2026 at 6.50% (Principal of $400,000 less Unamortized Discount of $3,500 and $3,875, respectively)*396,500 396,125 
Convertible Senior Notes due May 2026 at 2.25% (Principal of $345,000 less Unamortized Discount and Issuance Costs of $99,695 and $107,735, respectively)245,305 237,265 
CNX Midstream Partners LP Revolving Credit Facility*160,000 291,000 
CNX Revolving Credit Facility160,000 160,800 
Cardinal States Gathering Company Credit Facility maturing in March 2028 (Principal of $107,705 and $114,985, respectively, less Unamortized Discount of $1,048 and $1,126, respectively)106,657 113,859 
CSG Holdings II LLC Credit Facility maturing in March 2027 (Principal of $39,726 and $45,559, respectively, less Unamortized Discount of $408 and $441, respectively)39,318 45,118 
Less: Unamortized Debt Issuance Costs24,859 26,852 
2,289,068 2,424,001 
Less: Amounts Due in One Year23,098 22,574 
Long-Term Debt$2,265,970 $2,401,427 
*CNX is not a guarantor of CNXM's 6.50% Senior Notes due March 2026 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 notes are guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner) or CSG Holdings III LLC.

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 $13.66 on June 30, 2021, the if-converted value of the Convertible Notes exceeded the principal amount by $95,439.

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

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events:

•during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on 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

21

Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the Convertible Notes. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the indenture governing the Convertible Notes. In addition, following certain corporate events, as described in the indenture governing the Convertible Notes, that occur prior to the maturity date, the Company will increase the conversion rate, in certain circumstances, for a holder who elects to convert its Convertible Notes in connection with such a corporate event.

The Company 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 Converitble 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. During the three and six months ended March 31,June 30, 2021, the conditions allowing holders of the Convertible Notes to exercise their conversion right were not met and as of March 31,June 30, 2021, the notesConvertible Notes were not convertible. The Convertible Notes are therefore classified as long-term debt at March 31,June 30, 2021.

In accounting for the transaction, 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 is not remeasured as long as it continues 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 are 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 related to the Convertible Notes, 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 will be 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 and are not subject to amortization.




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The net carrying amount of the liability and equity components of the Convertible Notes was as follows:

March 31,
2021		December 31,
2020		June 30,
2021		December 31,
2020
Liability Component:Liability Component:Liability Component:
PrincipalPrincipal$345,000 $345,000 Principal$345,000 $345,000 
Unamortized DiscountUnamortized Discount(97,644)(101,367)Unamortized Discount(93,836)(101,367)
Unamortized Issuance CostsUnamortized Issuance Costs(6,116)(6,368)Unamortized Issuance Costs(5,859)(6,368)
Net Carrying AmountNet Carrying Amount$241,240 $237,265 Net Carrying Amount$245,305 $237,265 
Equity Component, net of Purchase Discounts and Issuance CostsEquity Component, net of Purchase Discounts and Issuance Costs$78,284 $78,317 Equity Component, net of Purchase Discounts and Issuance Costs$78,284 $78,317 

Interest expense related to the Convertible Notes is as follows:
For the Three Months Ended
March 31, 2021
Contractual Interest Expense$1,941 
Amortization of Debt Discount3,722 
Amortization of Issuance Costs252 
Total Interest Expense$5,915 
For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
Contractual Interest Expense$1,941 $1,294 $3,881 $1,294 
Amortization of Debt Discount3,809 2,325 7,531 2,325 
Amortization of Issuance Costs256 161 509 161 
Total Interest Expense$6,006 $3,780 $11,921 $3,780 


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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.

During the three and six months ended March 31,June 30, 2020, CNX purchased and retired $409,625 and $480,959, respectively, of its outstanding 5.875% Senior Notes due April 2022. As part of these transactions, a loss of $344 and a gain of $10,919 were included in Loss (Gain) on Debt Extinguishment in the Consolidated Statements of Income during the three and six months ended June 30, 2020, respectively.

During the six months ended June 30, 2020, CNX's wholly-owned subsidiary Cardinal States Gathering Company LLC (Cardinal States) entered into a $125,000 non-revolving credit facility agreement (the "Cardinal States Facility"). The Cardinal States Facility matures in 2028, has an interest rate of 3-month LIBOR + 450 basis points and includes an excess cash flow sweep in an amount required to achieve a quarterly targeted debt balance. The facility is secured by substantially all of the Cardinal States assets, requires a minimum level of hedging of the variable interest rate exposure and is non-recourse to CNX.

Additionally, during the threesix months ended March 31,June 30, 2020, CNX's wholly-owned subsidiary CSG Holdings II LLC (CSG Holdings) entered into a $50,000 non-revolving credit facility agreement (the "CSG Holdings Facility"). The CSG Holdings Facility matures in 2027, has interest rate of 3-month LIBOR + 675 basis points and includes a full excess cash sweep. The facility is secured by substantially all of the CSG Holding assets, requires a minimum level of hedging of the variable interest rate exposure and is non-recourse to CNX.

During the three months ended March 31, 2020, CNX purchased and retired $71,334, of its outstanding 5.875% Senior Notes due April 2022. As part of this transaction, a gain of $11,263 was included in Gain on Debt Extinguishment in the Consolidated Statements of Income.

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

21

operations or cash flows of CNX. It is possible that the aggregate loss in the future with respect to these lawsuits and claims could ultimately be material to the financial position, results of operations or cash flows of CNX; however, such amounts cannot be reasonably estimated.
The 1992 Coal Industry Retiree Health Benefit Act (“Coal Act”), in Section 9711, requires coal companies that were providing health benefits to United Mine Workers of America (“UMWA”) retirees as of February 1993 to continue providing health benefits to such individuals, in substantially the same coverages, for as long as the last signatory operator remains in business. Section 9711 also requires any “related person” to be joint and severally liable for the provision of these health benefits. On May 1, 2020, the court in the Murray Energy Corporation (“Murray”) bankruptcy proceedings approved a settlement agreement between Murray and the UMWA that transferred to the UMWA 1992 Benefit Plan the Coal Act liabilities for retirees in Murray’s Section 9711 plan. The retirees transferred by Murray to the 1992 Benefit Plan include approximately 2,159 retirees allegedly traced to the December 2013 sale by CONSOL Energy Inc. to Murray Energy of the following possible last signatory operators: Consolidation Coal Company, McElroy Coal Company, Southern Ohio Coal Company, Central Ohio Coal Company, Keystone Coal Mining Corp., and 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. We disagree with the suit filed by the UMWA 1992 Plan, have filed a Motion to Dismiss and intend to defend this action.

23

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,June 30, 2021, 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 Amount of Commitment Expiration Per Period
Total
Amounts
Committed		Less Than
1  Year		1-3 Years3-5 YearsBeyond
5  Years		 Total
Amounts
Committed		Less Than
1  Year		1-3 Years3-5 YearsBeyond
5  Years
Letters of Credit:Letters of Credit:Letters of Credit:
Firm TransportationFirm Transportation$181,576 $181,576 $0 $0 $0 Firm Transportation$181,576 $181,576 $0 $0 $0 
OtherOther7,021 7,021 0 0 0 Other7,021 7,021 0 0 0 
Total Letters of CreditTotal Letters of Credit188,597 188,597 0 0 0 Total Letters of Credit188,597 188,597 0 0 0 
Surety Bonds:Surety Bonds:Surety Bonds:
Employee-RelatedEmployee-Related2,600 2,600 0 0 0 Employee-Related2,600 2,600 0 0 0 
EnvironmentalEnvironmental12,007 10,352 1,655 0 0 Environmental12,017 11,959 58 0 0 
Financial GuaranteesFinancial Guarantees81,670 81,670 0 0 0 Financial Guarantees81,670 81,670 0 0 0 
OtherOther9,224 6,703 2,521 0 0 Other9,183 7,686 1,497 0 0 
Total Surety BondsTotal Surety Bonds105,501 101,325 4,176 0 0 Total Surety Bonds105,470 103,915 1,555 0 0 
Total CommitmentsTotal Commitments$294,098 $289,922 $4,176 $0 $0 Total Commitments$294,067 $292,512 $1,555 $0 $0 

Excluded from the above table are commitments and guarantees entered into in conjunction with the spin-off of the Company's coal business in November 2017. Although CONSOL has agreed to indemnify CNX to the extent that CNX would be called upon to pay any of these liabilities, there is no assurance that CONSOL will satisfy its obligations to indemnify CNX in the event that CNX is so called upon (See “Item 1A. Risk Factors” in CNX's 2020 AnnualForm 10-K) and in our Quarterly Report on Form 10-K as filed with10-Q for the SEC on February 9,quarter ended March 31, 2021 ("2020 Form 10-K") for additional information).


22

CNX enters into long-term unconditional purchase obligations to procure major equipment purchases, natural gas firm transportation, gas drilling services and other operating goods and services. These purchase obligations are not recorded in the Consolidated Balance Sheets. As of March 31,June 30, 2021, the purchase obligations for each of the next five years and beyond are as follows:
Obligations DueAmount
Less than 1 year$265,403266,355 
1 - 3 years434,959439,639 
3 - 5 years404,364403,228 
More than 5 years1,064,8141,037,719 
Total Purchase Obligations$2,169,5402,146,941 


24

NOTE 11—DERIVATIVE INSTRUMENTS:

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

In March 2020, CNX entered into interest rate swaps related to $175,000 of borrowings under the Cardinal States Facility and CSG Holdings Facility (See Note 9 - Long-Term Debt). In order to manage exposure to interest rate volatility, each respective entity entered into an interest rate swap for the full outstanding principal amounts inclusive of a put option at 25 basis points. The underlying notional for each swap and put option reduces over time based upon an expected amortization profile for each respective credit facility. In addition, CSG Holdings entered into a call option commencing March 31, 2023.

In June 2019, CNX entered into an interest rate swap agreement related to $160,000 of borrowings under CNX’s Credit Facility (See Note 7 - Revolving Credit Facilities) which has the economic effect of modifying the variable-interest obligation into a fixed-interest obligation over a three-year period. In March 2020, this swap was terminated and replaced via a new interest rate swap, effective April 3, 2020, into a new four-year interest rate swap inclusive of a put option at 0 basis points. Also executed in March 2020 was a new four-year $250,000 interest rate swap inclusive of a put option at 0 basis points, effective April 3, 2020. Consistent with the previous interest rate swap agreement, the $250,000 interest rate swap was entered into to manage CNX's exposure to interest rate volatility.

CNX enters into financial derivative instruments (over-the-counter swaps) to manage its exposure to natural gas price fluctuations. Typically, CNX “sells” swaps under which it receives a fixed price from counterparties and pays a floating market price. In order to enhance production flexibility, during the first quarter of 2021, CNX purchased, rather than sold, financial swaps for the period April through October 2021 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. Natural gas commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

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

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






23

The total notional amounts of CNX's derivative instruments were as follows:
March 31,December 31,Forecasted to
20212020Settle Through
Natural Gas Commodity Swaps (Bcf)1,293.7 1,256.9 2026
Natural Gas Basis Swaps (Bcf)1,220.8 *1,294.1 2026
Interest Rate Swaps$564,514 $569,972 2028
June 30,December 31,Forecasted to
20212020Settle Through
Natural Gas Commodity Swaps (Bcf)1,623.0 1,256.9 2027
Natural Gas Basis Swaps (Bcf)1,288.7 *1,294.1 2027
Interest Rate Swaps$558,899 $569,972 2028
*Net of purchased natural gas basis swaps of 23.513.5 Bcf.


25

The gross fair value of CNX's derivative instruments was as follows:
March 31,December 31,
20212020
Current Assets:
  Commodity Derivative Instruments:
     Commodity Swaps$19,968 $53,668 
     Basis Only Swaps50,145 30,848 
  Interest Rate Swaps138 141 
Total Current Assets$70,251 $84,657 
Other Non-Current Assets:
  Commodity Derivative Instruments:
     Commodity Swaps$109,122 $134,661 
     Basis Only Swaps126,035 52,903 
  Interest Rate Swaps538 673 
Total Other Non-Current Assets$235,695 $188,237 
Current Liabilities:
  Commodity Derivative Instruments:
     Commodity Swaps$64,215 $23,506 
     Basis Only Swaps15,897 14,491 
  Interest Rate Swaps3,650 4,332 
Total Current Liabilities$83,762 $42,329 
Non-Current Liabilities:
  Commodity Derivative Instruments:
     Commodity Swaps$56,898 $59,388 
     Basis Only Swaps19,704 57,150 
  Interest Rate Swaps7,103 10,752 
Total Non-Current Liabilities$83,705 $127,290 




June 30,December 31,
20212020
Current Assets:
  Commodity Derivative Instruments:
     Commodity Swaps$576 $53,668 
     Basis Only Swaps106,921 30,848 
  Interest Rate Swaps128 141 
Total Current Assets$107,625 $84,657 
Other Non-Current Assets:
  Commodity Derivative Instruments:
     Commodity Swaps$30,055 $134,661 
     Basis Only Swaps173,957 52,903 
  Interest Rate Swaps447 673 
Total Other Non-Current Assets$204,459 $188,237 
Current Liabilities:
  Commodity Derivative Instruments:
     Commodity Swaps$393,982 $23,506 
     Basis Only Swaps18,103 14,491 
  Interest Rate Swaps3,689 4,332 
Total Current Liabilities$415,774 $42,329 
Non-Current Liabilities:
  Commodity Derivative Instruments:
     Commodity Swaps$258,360 $59,388 
     Basis Only Swaps21,007 57,150 
  Interest Rate Swaps6,498 10,752 
Total Non-Current Liabilities$285,865 $127,290 










2426


The effect of commodity derivative instruments on the Company's Consolidated Statements of Income was as follows:
For the Three Months Ended
March 31,
20212020
Cash Received (Paid) in Settlement of Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps$6,550 $157,579 
Basis Swaps(4,145)(6,418)
Total Cash Received in Settlement of Commodity Derivative Instruments2,405 151,161 
Unrealized (Loss) Gain on Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps(97,459)545 
Basis Swaps128,468 (36,564)
Total Unrealized Gain (Loss) on Commodity Derivative Instruments31,009 (36,019)
(Loss) Gain on Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps(90,909)158,124 
Basis Swaps124,323 (42,982)
Total Gain on Commodity Derivative Instruments$33,414 $115,142 
For the Three Months EndedFor the Six Months Ended
June 30,June 30,
2021202020212020
Cash (Paid) Received in Settlement of Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps$(16,492)$153,149 $(9,942)$310,728 
Basis Swaps6,133 (10,893)1,988 (17,311)
Total Cash (Paid) Received in Settlement of Commodity Derivative Instruments(10,359)142,256 (7,954)293,417 
Unrealized (Loss) Gain on Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps(629,688)(182,119)(727,147)(181,573)
Basis Swaps101,188 (23,440)229,656 (60,005)
Total Unrealized Loss on Commodity Derivative Instruments(528,500)(205,559)(497,491)(241,578)
(Loss) Gain on Commodity Derivative Instruments:
  Natural Gas:
Commodity Swaps(646,180)(28,970)(737,089)129,155 
Basis Swaps107,321 (34,333)231,644 (77,316)
Total (Loss) Gain on Commodity Derivative Instruments$(538,859)$(63,303)$(505,445)$51,839 

The effect of interest rate swaps on Interest Expense in the Company's Consolidated Statements of Income was as follows:
For the Three Months Ended
March 31,
20212020
Cash Paid in Settlement of Interest Rate Swaps$(1,227)$(57)
Unrealized Gain (Loss) on Interest Rate Swaps4,194 (10,639)
Gain (Loss) on Interest Rate Swaps$2,967 $(10,696)
For the Three Months EndedFor the Six Months Ended
June 30,June 30,
2021202020212020
Cash Paid in Settlement of Interest Rate Swaps$(1,240)$(536)$(2,467)$(592)
Unrealized Gain (Loss) on Interest Rate Swaps465 (3,598)4,659 (14,237)
(Loss) Gain on Interest Rate Swaps$(775)$(4,134)$2,192 $(14,829)

Cash Received in Settlement of Commodity Derivative Instruments for the three and six months ended March 31,June 30, 2020 includesincluded $29,015 related to the monetization and termination of approximately 39 million MMBtus of NYMEX natural gas hedges and a similar quantity of financial basis hedges that were to settle at various times from May through November of 2020. Net proceeds received from the monetization are classified as operating cash flows in the Consolidated Statements of Cash Flows.

Cash Received in Settlement of Commodity Derivative Instruments for the six months ended June 30, 2020, in addition to the amount discussed above, also included $54,982 related to the monetization of certain NYMEX commodity swaps. The monetization resulted from reducing the contract swap prices of certain 2022, 2023 and 2024 NYMEX natural gas swap contracts. The notional quantities of the contracts were not changed by this monetization. Net proceeds received from the monetizations are classified as operating cash flows in the Consolidated Statements of Cash Flows.

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




27

NOTE 12—FAIR VALUE OF FINANCIAL INSTRUMENTS:

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

25


The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below:
Level 1 - Quoted prices for identical instruments in active markets.
Level 2 - The fair value of the assets and liabilities included in Level 2 are based on standard industry income approach models that use significant observable inputs, including NYMEX forward curves, LIBOR-based discount rates and basis forward curves.
Level 3 - Unobservable inputs significant to the fair value measurement supported by little or no market activity.
In those cases when the inputs used to measure fair value meet the definition of more than one level of the fair value hierarchy, the lowest level input that is significant to the fair value measurement in its totality determines the applicable level in the fair value hierarchy.
The financial instrument measured at fair value on a recurring basis is summarized below:
 Fair Value Measurements at March 31, 2021Fair Value Measurements at December 31, 2020
DescriptionLevel 1Level 2Level 3Level 1Level 2Level 3
Gas Derivatives$0 $148,556 $0 $0 $117,545 $0 
Interest Rate Swaps$0 $(10,077)$0 $0 $(14,270)$0 
 Fair Value Measurements at June 30, 2021Fair Value Measurements at December 31, 2020
DescriptionLevel 1Level 2Level 3Level 1Level 2Level 3
Gas Derivatives$0 $(379,943)$0 $0 $117,545 $0 
Interest Rate Swaps$0 $(9,612)$0 $0 $(14,270)$0 

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:
 March 31, 2021December 31, 2020
 Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Cash and Cash Equivalents$29,610 $29,610 $15,617 $15,617 
Long-Term Debt (Excluding Debt Issuance Costs)$2,394,177 $2,671,992 $2,450,853 $2,638,251 
 June 30, 2021December 31, 2020
 Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Cash and Cash Equivalents$39,365 $39,365 $15,617 $15,617 
Long-Term Debt (Excluding Debt Issuance Costs)$2,313,927 $2,594,481 $2,450,853 $2,638,251 
Cash and cash equivalents represent highly-liquid instruments and constitute Level 1 fair value measurements. Certain of the Company’s debt is actively traded on a public market and, as a result, constitute Level 1 fair value measurements. The portion of the Company’s debt obligations that is not actively traded is valued through reference to the applicable underlying benchmark rate and, as a result, constitute Level 2 fair value measurements.

NOTE 13—ACQUISITIONS AND DISPOSITIONS:

On July 26, 2020, CNX entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CNXM, CNX Midstream GP LLC (the “General Partner”) and CNX Resources Holding LLC., a wholly owned subsidiary of CNX (“Merger Sub”), pursuant to which Merger Sub merged with and into CNXM with CNXM surviving as an indirect wholly owned subsidiary of CNX (the “Merger”). As a result of the Merger, CNXM’s common units are no longer publicly traded.

Except for the Class B units of CNXM, which were automatically canceled immediately prior to the effective time of the Merger for no consideration in accordance with CNXM’s partnership agreement, the interests in CNXM owned by CNX and its subsidiaries remain outstanding as limited partner interests in the surviving entity. The General Partner will continue to own the non-economic general partner interest in the surviving entity.

Because CNX controlled CNXM prior to the Merger and continues to control CNXM after the Merger, CNX accounted for the change in its ownership interest in CNXM as an equity transaction which was reflected as a reduction of noncontrolling interest with corresponding increases to common stock and capital in excess of par value. No gain or loss was recognized in its condensed consolidated statements of operations as a result of the Merger.

28

The tax effects of the Merger were reported as adjustments to deferred income taxes and capital in excess of par value.

Prior to the effective time of the Merger on September 28, 2020, public unitholders held a 46.9% equity interest in CNXM and CNX owned the remaining 53.1% equity interest. The earnings of CNXM that were attributed to its common units held by the public prior to the Merger are reflected in Net Income Attributable to Noncontrolling Interest in the Consolidated Statements of Income. There were no changes in CNX's ownership interest in CNXM during the three or six months ended March 31,June 30, 2021 or 2020.


26

CNXM’s revolving credit facility (See Note 7 - Revolving Credit Facilities) and the CNXM Senior Notes (See Note 9 - Long-Term Debt) were not impacted by the Merger.

NOTE 14—SEGMENT INFORMATION:
The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments.
The Company evaluates the performance of its reportable segments based on total revenue and other operating income, and operating expenses directly attributable to that segment. Certain expenses are managed outside the reportable segments and therefore are not allocated. These expenses include, but are not limited to, interest expense, impairment of exploration and production properties, impairment of goodwill and other corporate expenses such as selling, general and administrative costs.
CNX's principal activity is to produce pipeline quality natural gas for sale primarily to gas wholesalers and the Company has 2 reportable segments that conducts those operations: Shale and Coalbed Methane. The Other Segment includes nominal shallow oil and gas production which is not significant to the Company. It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, realized gain on commodity derivative instruments that were monetized prior to their settlement dates, exploration and production related other costs, impairments of exploration and production properties, as well as various other expenses that are managed outside the reportable segments as discussed above. Operating profit for each segment is based on sales less identifiable operating and non-operating expenses.
Prior to the Merger of CNXM that occurred in September 2020 (See Note 13 - Acquisitions and Dispositions), CNX consisted of 2 principal business divisions: Exploration and Production (E&P) and Midstream. The E&P Division included 4 reportable segments, Marcellus Shale, Utica Shale, Coalbed Methane and Other Gas. Certain reclassifications of 2020 segment information have been made to conform to the new presentation.

Industry segment results for the three months ended March 31,June 30, 2021 are:
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$342,169 $38,904 $152 $381,225 (A)
Purchased Gas Revenue0 0 33,484 33,484   
Gain on Commodity Derivative Instruments2,182 222 31,010 33,414 
Other Revenue and Operating Income19,066 0 5,884 24,950 (B)
Total Revenue and Other Operating Income$363,417 $39,126 $70,530 $473,073   
Total Operating Expense$188,711 $28,555 $82,538 $299,804 
Earnings (Loss) Before Income Tax$174,706 $10,571 $(49,873)$135,404 
Segment Assets$6,074,252 $1,082,232 $912,753 $8,069,237 (C)
Depreciation, Depletion and Amortization$109,506 $15,483 $3,955 $128,944   
Capital Expenditures$121,118 $2,142 $169 $123,429   


ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$332,659 $36,505 $285 $369,449 (A)
Purchased Gas Revenue0 0 16,706 16,706   
Loss on Commodity Derivative Instruments(9,394)(962)(528,503)(538,859)
Other Revenue and Operating Income18,679 0 6,815 25,494 (B)
Total Revenue and Other Operating Income (Loss)$341,944 $35,543 $(504,697)$(127,210)  
Total Operating Expense$191,996 $28,204 $60,511 $280,711 
Earnings (Loss) Before Income Tax$149,948 $7,339 $(603,463)$(446,176)
Segment Assets$6,095,486 $1,069,470 $907,154 $8,072,110 (C)
Depreciation, Depletion and Amortization$104,380 $14,264 $3,963 $122,607   
Capital Expenditures$127,230 $1,502 $226 $128,958   

(A)    Included in Total Natural Gas, NGL and Oil Revenue are sales of $45,000$60,162 to DirectCitadel Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period.
(B)    Includes midstream revenue of $19,066$18,679 and equity in earnings of unconsolidated affiliates of $950$1,553 for Shale and Other, respectively.
(C)    Includes investments in unconsolidated equity affiliates of $16,172.$16,726.







29

Industry segment results for the three months ended June 30, 2020 are:
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$152,627 $22,929 $220 $175,776 (D)
Purchased Gas Revenue0 0 20,424 20,424   
Gain (Loss) on Commodity Derivative Instruments100,262 13,005 (176,570)(63,303)(E)
Other Revenue and Operating Income12,191 0 3,753 15,944 (F)
Total Revenue and Other Operating Income (Loss)$265,080 $35,934 $(152,173)$148,841   
Total Operating Expense$154,306 $29,324 $78,882 $262,512 
Earnings (Loss) Before Income Tax$110,774 $6,610 $(276,516)$(159,132)
Segment Assets$6,096,101 $1,132,217 $1,091,366 $8,319,684 (G)
Depreciation, Depletion and Amortization$93,984 $15,701 $3,860 $113,545   
Capital Expenditures$131,974 $2,034 $844 $134,852   

(D)    Included in Total Natural Gas, NGL and Oil Revenue are sales of $33,711 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period.
(E) Included in Other is a realized gain on commodity derivative instruments of $29,015 related to the monetization of hedges (see Note 11 - Derivative Instruments for more information).
(F)    Includes midstream revenue of $12,191 and equity in losses of unconsolidated affiliates of $1,259 for Shale and Other, respectively.
(G)    Includes investments in unconsolidated equity affiliates of $15,159.


Industry segment results for the six months ended June 30, 2021 are:


ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$674,828 $75,409 $437 $750,674 (A)
Purchased Gas Revenue0 0 50,190 50,190   
Loss on Commodity Derivative Instruments(7,212)(740)(497,493)(505,445)
Other Revenue and Operating Income37,745 0 12,700 50,445 (B)
Total Revenue and Other Operating Income (Loss)$705,361 $74,669 $(434,166)$345,864   
Total Operating Expense$380,707 $56,759 $143,050 $580,516 
Earnings (Loss) Before Income Tax$324,654 $17,910 $(653,335)$(310,771)
Segment Assets$6,095,486 $1,069,470 $907,154 $8,072,110 (C)
Depreciation, Depletion and Amortization$213,886 $29,747 $7,918 $251,551   
Capital Expenditures$248,348 $3,644 $395 $252,387   

(A)    Included in Total Natural Gas, NGL and Oil Revenue are sales of $100,465 to Citadel Energy Marketing LLC and $80,189 to Direct Energy Business Marketing LLC, each of which comprises over 10% of revenue from contracts with external customers for the period.
(B)    Includes midstream revenue of $37,745 and equity in earnings of unconsolidated affiliates of $2,504 for Shale and Other, respectively.
(C)    Includes investments in unconsolidated equity affiliates of $16,726.

















2730

Industry segment results for the threesix months ended March 31,June 30, 2020 are:
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$220,494 $30,723 $277 $251,494 (D)
Purchased Gas Revenue0 0 26,359 26,359   
Gain on Commodity Derivative Instruments86,452 9,687 19,003 115,142 (E)
Other Revenue and Operating Income18,406 0 4,958 23,364 (F)
Total Revenue and Other Operating Income$325,352 $40,410 $50,597 $416,359   
Total Operating Expense$191,948 $34,160 $617,192 $843,300 
Earnings (Loss) Before Income Tax$133,404 $6,250 $(597,458)$(457,804)
Segment Assets$6,059,158 $1,145,942 $1,323,850 $8,528,950 (G)
Depreciation, Depletion and Amortization$107,046 $18,438 $3,680 $129,164   
Capital Expenditures$147,840 $2,452 $1,757 $152,049   
ShaleCoalbed MethaneOtherConsolidated
Natural Gas, NGL and Oil Revenue$373,121 $53,652 $497 $427,270 (D)
Purchased Gas Revenue0 0 46,783 46,783   
Gain (Loss) on Commodity Derivative Instruments186,714 22,692 (157,567)51,839 (E)
Other Revenue and Operating Income30,597 0 8,711 39,308 (F)
Total Revenue and Other Operating Income (Loss)$590,432 $76,344 $(101,576)$565,200   
Total Operating Expense$346,254 $63,484 $696,073 $1,105,811 
Earnings (Loss) Before Income Tax$244,178 $12,860 $(873,975)$(616,937)
Segment Assets$6,096,101 $1,132,217 $1,091,366 $8,319,684 (G)
Depreciation, Depletion and Amortization$201,030 $34,139 $7,540 $242,709   
Capital Expenditures$279,814 $4,486 $2,601 $286,901   

(D)    Included in Total Natural Gas, NGL and Oil Revenue are sales of $45,656$79,367 to Direct Energy Business Marketing LLC, and $32,176 to NJR Energy Services Company, each of which comprises over 10% of revenue from contracts with external customers for the period.
(E) Included in Other is a realized gain on commodity derivative instruments of $54,982$83,997 related to the monetization of hedges (see Note 11 - Derivative Instruments for more information).
(F)    Includes midstream revenue of $18,406$30,597 and equity in losslosses of unconsolidated affiliates of $161$1,421 for Shale and Other, respectively.
(G)    Includes investments in unconsolidated equity affiliates of $16,549.$15,159.

Reconciliation of Segment Information to Consolidated Amounts:

Revenue and Other Operating (Loss) Income
For the Three Months Ended March 31,
20212020
Total Segment Revenue from Contracts with External Customers$433,775 $296,259 
Gain on Commodity Derivative Instruments33,414 115,142 
Other Operating Income5,884 4,958 
Total Consolidated Revenue and Other Operating Income$473,073 $416,359 
For the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
Total Segment Revenue from Contracts with External Customers$404,834 $208,391 $838,609 $504,650 
(Loss) Gain on Commodity Derivative Instruments(538,859)(63,303)(505,445)51,839 
Other Operating Income6,815 3,753 12,700 8,711 
Total Consolidated Revenue and Other Operating (Loss) Income$(127,210)$148,841 $345,864 $565,200 

NOTE 15—STOCK REPURCHASE:
On January 26, 2021, the Company’s Board of Directors approved an increase in the aggregate amount of the previous $750,000 stock repurchase program plan to $900,000. As of March 31,June 30, 2021, the amount available under the stock repurchase program is $237,343,$214,686, and is not subject to an expiration date. The repurchases may be affected from time-to-time through open market purchases, privately negotiated transactions, Rule 10b5-1 plans, accelerated stock repurchases, block trades, derivative contracts or otherwise in compliance with Rule 10b-18. The timing of any repurchases will be based on a number of factors, including available liquidity, the Company's stock price, the Company's financial outlook, and alternative investment options. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares and the Board may modify, suspend, or discontinue its authorization of the program at any time. The Board of Directors will continue to evaluate the size of the stock repurchase program based on CNX's free cash flow position, leverage ratio, and capital plans. During the threesix months ended March 31,June 30, 2021, 1,464,4543,095,241 shares were repurchased and retired at an average price of $12.26$13.12 per share for a total cost of $17,987.$40,678. There were 0 shares repurchased and retired during the threesix months ended March 31,June 30, 2020.

NOTE 16—RECENT ACCOUNTING PRONOUNCEMENTS:

In August 2020,May 2021, the FASB issued Accounting Standards Update (ASU) 2021-04 - Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This ASU provides guidance on how an issuer would measure and recognize the effect of these transactions. Specifically, it provides a principles-based framework to determine whether an issuer should recognize the modification or exchange as an adjustment to equity or an expense. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted. The Company is still evaluating the effect of adopting this guidance.


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In August 2020, the FASB issued ASU 2020-06 - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies an entity's accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separate accounting for embedded conversion features, simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification, requires entities to use the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive) for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards, requires new disclosures about events that occur during the reporting period and cause conversion contingencies to be met and about the fair value of an entity's convertible debt at the instrument level, among other things. The amendments in this ASU are effective for public entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and can be adopted through either a modified

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retrospective method of transition or a fully retrospective method of transition. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is still evaluating the effect of adopting this guidance.

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (IBORs) and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which clarifies that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The amendments in these ASUs are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is still evaluating the effect of adopting this guidance.


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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statementsConsolidated Financial Statements and related notes included elsewhere in this Form 10-Q. The information provided below supplements, but does not form part of, CNX's financial statements. This discussion contains forward-looking statements that are based on the views and beliefs of management, as well as assumptions and estimates made by management. Actual results could differ materially from any such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. For further information on items that could impact future operating performance or financial condition, please see “Part II. Item 1A. Risk Factors” and the section entitled “Forward-Looking Statements” and the “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2020, which we filed with the SEC on February 9, 2021 (the “Form 2020 10-K”). CNX does not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

General

COVID-19 Update:

CNX continues to monitor the current and potential impacts of the coronavirus COVID-19 ("COVID-19") pandemic on all aspects of our business and geographies, including how it has impacted, and may in the future, impact our operations, financial results, liquidity, contractors, customers, employees and vendors. The Company also continues to monitor a number of factors that may cause actual results of operations to differ from our historical results or current expectations. These and other factors could affect the Company’s operations, earnings and cash flows for any period and could cause such results to not be comparable to those of the same period in previous years. The results presented in this Form 10-Q are not necessarily indicative of future operating results.

While CNX did not incur significant disruptions to operations during the three or six months ended March 31,June 30, 2021 or 2020 as a direct result of the COVID-19 pandemic, CNX is unable to predict the full extent of the future impact that the COVID-19 pandemic willcould have on us,the Company, including our financial position, operating results, liquidity and ability to obtain financing in future reporting periods, due to numerous uncertainties.

The full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain and will depend on many factorsuncertainties outside the Company’s control, including, without limitation, the timing, extent, trajectory and duration of the pandemic, the development and availability of effective treatments and vaccines, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for consumer products.control.

Hedging Update:

Total hedged natural gas production in the 2021 secondthird quarter is 115.0118.3(1) Bcf. The annual gas hedge position is shown in the table below:
20212022
Volumes Hedged (Bcf), as of 4/7/21
489.5(1)(2)
402.4 
20212022
Volumes Hedged (Bcf), as of 7/7/21
490.8(1)(2)
471.5 
1Net of purchased swaps.
2Includes actual settlements of 155.0267.0 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. For further information see Item 3 Quantitative and Qualitative Disclosures About Market Risk.















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Results of Operations - Three Months Ended March 31,June 30, 2021 Compared with Three Months Ended March 31,June 30, 2020

Net Income (Loss)Loss Attributable to CNX Resources Shareholders

CNX reported a net incomeloss attributable to CNX Resources shareholders of $98$354 million, or earningsa loss per diluted share of $0.43,$1.61, for the three months ended March 31,June 30, 2021, compared to a net loss attributable to CNX Resources shareholders of $329$146 million, or a loss per diluted share of $1.76,$0.78, for the three months ended March 31,June 30, 2020.
 For the Three Months Ended March 31,
(Dollars in thousands)20212020Variance
Net Income (Loss)$98,025 $(305,222)$403,247 
Less: Net Income Attributable to Noncontrolling Interest— 23,864 (23,864)
Net Income (Loss) Attributable to CNX Resources Shareholders$98,025 $(329,086)$427,111 
 For the Three Months Ended June 30,
(Dollars in thousands)20212020Variance
Net Loss$(354,059)$(130,486)$(223,573)
Less: Net Income Attributable to Noncontrolling Interest— 15,263 (15,263)
Net Loss Attributable to CNX Resources Shareholders$(354,059)$(145,749)$(208,310)

Included in the earningsloss for the three months ended March 31,June 30, 2021 was an unrealized gainloss on commodity derivative instruments of $31$529 million. Included in the loss for the three months ended MarchJune 30, 2020 was an unrealized loss on commodity derivative instruments of $205 million.

Non-GAAP Financial Measures

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 these metrics are widely used to evaluate a natural gas company’s operating performance. Sales of Natural Gas, NGL and Oil, including cash settlements excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments. Sales of Natural Gas, NGL and Oil, including cash settlements also excludes purchased gas revenue and other revenue and operating income, which are not directly related to CNX’s natural gas producing activities. Natural Gas, NGL and Oil Production Costs excludes certain expenses that are not directly related to CNX’s natural gas producing activities and are managed outside our production operations (See Note 14 - Segment Information in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information). These expenses include, but are not limited to, interest expense, other operating expense and other corporate expenses such as selling, general and administrative costs. We believe that Sales of Natural Gas, NGL and Oil, including cash settlements, Natural Gas, NGL and Oil Production Costs and Natural Gas, NGL and Oil Production Margin (which is derived by subtracting Natural Gas, NGL and Oil Production Costs from Sales of Natural Gas, NGL and Oil, including cash settlements) provide useful information to investors for evaluating period-to-period comparisons of earnings trends. These metrics should not be viewed 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.


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Non-GAAP Financial Measures Reconciliation
For the Three Months Ended June 30,
(Dollars in millions)20212020
Total Revenue and Other Operating (Loss) Income$(127)$149 
Add (Deduct):
Purchased Gas Revenue(17)(20)
Loss on Commodity Derivative Instruments and Monetization529 176 
Other Revenue and Operating Income(26)(16)
Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure$359 $289 
Total Operating Expense$281 $263 
Add (Deduct):
Depreciation, Depletion and Amortization (DD&A) - Corporate(3)(3)
   Exploration and Production Related Other Costs(3)(3)
Purchased Gas Costs(15)(20)
Selling, General and Administrative Costs(24)(23)
Other Operating Expense(15)(28)
Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure1
$221 $186 

1 Natural Gas, NGL and Oil production costs consists primarily of lease operating expense, production ad valorem and other fees, transportation, gathering and compression and production related depreciation, depletion and amortization.

Selected Natural Gas, NGL and Oil Production Financial Data

The following table presents a summary of our total sales volumes, sales of natural gas, NGL and oil including cash settlements, natural gas, NGL and oil production costs and natural gas, NGL and oil production margin related to our production operations on a total company basis (See Non-GAAP Financial Measures Reconciliation for the reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP):
For the Three Months Ended June 30,
20212020Variance
in MillionsPer Mcfein MillionsPer Mcfein MillionsPer Mcfe
Total Sales Volumes (Bcfe)*137.9114.523.4 
Natural Gas, NGL and Oil Revenue$369 $2.68 $176 $1.49 $193 $1.19 
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas**(10)(0.08)113 1.03 (123)(1.11)
Sales of Natural Gas, NGL and Oil, including Cash Settlements359 2.60 289 2.52 70 0.08 
Lease Operating Expense10 0.07 10 0.09 — (0.02)
Production, Ad Valorem, and Other Fees7 0.05 5 0.05 2 — 
Transportation, Gathering and Compression84 0.61 60 0.52 24 0.09 
Depreciation, Depletion and Amortization (DD&A)120 0.87 111 0.97 9 (0.10)
Natural Gas, NGL and Oil Production Costs221 1.60 186 1.63 35 (0.03)
Natural Gas, NGL and Oil Production Margin$138 $1.00 $103 $0.89 $35 $0.11 

*NGLs and Oil/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 NGL, condensate, and natural gas prices.
**Excluding hedge monetizations.

The 23.4 Bcfe increase in total sales volumes in the period-to period comparison was primarily due to the turn-in-line of new wells throughout 2020 and the first half of 2021. The increase was also due to the temporary shut-in of a portion of CNX's liquids-rich Shirley-Pennsboro production in May and June of 2020 in response to low NGL prices. These increases were offset in part by normal production declines.



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Changes in the average costs per Mcfe were primarily related to the following items:

•Transportation, gathering, and compression expense increased on a per unit basis primarily due to higher processing costs due to a wetter production mix.
•Depreciation, depletion and amortization expense decreased on a per unit basis as a result of low cost reserve additions from development during the 2020 period in Southwest Pennsylvania (SWPA), the addition of proved undeveloped Shale wells in Central Pennsylvania (CPA), and an impairment recognized in CBM in the 2020 period.

Average Realized Price Reconciliation

The following table presents a breakout of liquids and natural gas sales information and settled derivative information to assist in the understanding of the Company’s natural gas production and sales portfolio and information regarding settled commodity derivatives:
For the Three Months Ended June 30,
 in thousands (unless noted)20212020VariancePercent Change
LIQUIDS
NGL:
Sales Volume (MMcfe)9,469 4,741 4,728 99.7 %
Sales Volume (Mbbls)1,578 790 788 99.7 %
Gross Price ($/Bbl)26.287.8618.42 234.4 %
Gross NGL Revenue41,521 6,226 35,295 566.9 %
Oil/Condensate:
Sales Volume (MMcfe)785 236 549 232.6 %
Sales Volume (Mbbls)131 39 92 235.9 %
Gross Price ($/Bbl)53.1126.4126.70 101.1 %
Gross Oil/Condensate Revenue6,946 1,040 5,906 567.9 %
NATURAL GAS
Sales Volume (MMcf)127,666 109,527 18,139 16.6 %
Sales Price ($/Mcf)2.51 1.54 0.97 63.0 %
  Gross Natural Gas Revenue320,982 168,510 152,472 90.5 %
Hedging Impact ($/Mcf)(0.08)1.03(1.11)(107.8)%
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement*(10,359)113,241 (123,600)(109.1)%
* Excluding gains from hedge monetization.

The increase in gross revenue was primarily the result of the $0.97 per Mcf increase in general natural gas prices, when excluding the impact of hedging, the 23.4 Bcfe increase in sales volumes, and the $18.42 per Bbl increase in NGL prices. These increases were offset, in-part, by the impact of the change in the realized (loss) gain on commodity derivative instruments related to the Company's hedging program.


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SEGMENT ANALYSIS for the three months ended June 30, 2021 compared to the three months ended June 30, 2020:

For the Three Months EndedDifference to Three Months Ended
 June 30, 2021June 30, 2020
 (in millions)ShaleCBMOtherTotalShaleCBMOtherTotal
Natural Gas, NGLs and Oil Revenue$332 $36 $1 $369 $179 $13 $1 $193 
Loss on Commodity Derivative Instruments(9)(1)(529)(539)(109)(14)(353)(476)
Purchased Gas Revenue— — 17 17 — — (3)(3)
Other Revenue and Operating Income19 — 7 26 7 — 3 10 
Total Revenue and Other Operating Income342 35 (504)(127)77 (1)(352)(276)
Lease Operating Expense7 3 — 10 1 (1)— — 
Production, Ad Valorem, and Other Fees7 1 (1)7 3 — (1)2 
Transportation, Gathering and Compression74 10 — 84 24 2 (2)24 
Depreciation, Depletion and Amortization104 14 5 123 10 (2)1 9 
Exploration and Production Related Other Costs— — 3 3 — — — — 
Purchased Gas Costs— — 15 15 — — (5)(5)
Other Operating Expense— — 15 15 — — (13)(13)
Selling, General and Administrative Costs— — 24 24 — — 1 1 
Total Operating Expense192 28 61 281 38 (1)(19)18 
Other Expense— — 6 6 — — 1 1 
Gain on Asset Sales and Abandonments, net— — (7)(7)— — (1)(1)
Interest Expense— — 39 39 — — (7)(7)
Total Other Expense— — 38 38 — — (7)(7)
Total Costs and Expenses192 28 99 319 38 (1)(26)11 
Earnings (Loss) Before Income Tax$150 $7 $(603)$(446)$39 $— $(326)$(287)

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SHALE SEGMENT

The Shale segment had earnings before income tax of $150 million for the three months ended June 30, 2021 compared to earnings before income tax of $111 million for the three months ended June 30, 2020.
 For the Three Months Ended June 30,
 20212020VariancePercent
Change
Shale Gas Sales Volumes (Bcf)115.0 96.5 18.5 19.2 %
NGLs Sales Volumes (Bcfe)*9.5 4.7 4.8 102.1 %
Oil/Condensate Sales Volumes (Bcfe)*0.7 0.2 0.5 250.0 %
Total Shale Sales Volumes (Bcfe)*125.2 101.4 23.8 23.5 %
Average Sales Price - Natural Gas (per Mcf)$2.47 $1.51 $0.96 63.6 %
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)$(0.08)$1.04 $(1.12)(107.7)%
Average Sales Price - NGLs (per Mcfe)*$4.38 $1.31 $3.07 234.4 %
Average Sales Price - Oil/Condensate (per Mcfe)*$8.84 $4.40 $4.44 100.9 %
Total Average Shale Sales Price (per Mcfe)$2.58 $2.49 $0.09 3.6 %
Average Shale Lease Operating Expenses (per Mcfe)0.06 0.06 — — %
Average Shale Production, Ad Valorem and Other Fees (per Mcfe)0.05 0.04 0.01 25.0 %
Average Shale Transportation, Gathering and Compression Costs (per Mcfe)0.59 0.49 0.10 20.4 %
Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe)0.83 0.93 (0.10)(10.8)%
   Total Average Shale Production Costs (per Mcfe)$1.53 $1.52 $0.01 0.7 %
   Total Average Shale Production Margin (per Mcfe)$1.05 $0.97 $0.08 8.2 %
* NGLs and Oil/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, NGL, condensate, and natural gas prices.

The Shale segment had natural gas, NGLs and oil/condensate revenue of $332 million for the three months ended June 30, 2021 compared to $153 million for the three months ended June 30, 2020. The $179 million increase was due primarily to a 63.6% increase in the average sales price for natural gas, a 23.5% increase in total Shale sales volumes, and a 234.4% increase in the average sales price of NGLs. The increase in total Shale volumes was primarily due to the turn-in-line of new wells throughout 2020 and the first half of 2021. The increase was also due to the temporary shut-in of a portion of CNX's liquids-rich Shirley-Pennsboro production in May and June of 2020 in response to low NGL prices. These increases were offset in part by normal production declines.

The increase in total average Shale sales price was primarily due to a $0.96 per Mcf increase in average gas sales price and a $3.07 per Mcfe increase in the average NGL sales price. These increases were offset in part by a $1.12 per Mcf change in the realized (loss) gain on commodity derivative instruments. The notional amounts associated with these financial hedges represented approximately 99.1 Bcf of the Company's produced Shale gas sales volumes for the three months ended June 30, 2021 at an average loss of $0.09 per Mcf hedged. For the three months ended June 30, 2020, these financial hedges represented approximately 103.0 Bcf at an average gain of $0.97 per Mcf hedged.

Total operating costs and expenses for the Shale segment were $192 million for the three months ended June 30, 2021 compared to $154 million for the three months ended June 30, 2020. The increase in total dollars and increase in unit costs for the Shale segment were due to the following items:

•Shale production, ad valorem and other fees were $7 million for the three months ended June 30, 2021 compared to $4 million for the three months ended June 30, 2020. The increases in total dollars and unit costs were primarily due to the increase in production volumes, as well as the total average sales price.

•Shale transportation, gathering and compression costs were $74 million for the three months ended June 30, 2021 compared to $50 million for the three months ended June 30, 2020. The increases in total dollars and unit costs were primarily due to the increase in production volumes, as well as a wetter production mix, which resulted in increased processing cost.

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•Depreciation, depletion and amortization costs attributable to the Shale segment were $104 million for the three months ended June 30, 2021 compared to $94 million for the three months ended June 30, 2020. These amounts included depletion on a unit of production basis of $0.72 per Mcfe and $0.80 per Mcfe, respectively. The decrease in the units of production depreciation, depletion and amortization rate in the current period is primarily the result of low-cost reserve additions from development in 2020 in SWPA as well as the addition of proved undeveloped Shale reserves in CPA. The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

Total Shale other revenue and operating income relates to natural gas gathering services provided to third-parties. The Shale segment had other revenue and operating income of $19 million for the three months ended June 30, 2021 compared to $12 million for the three months ended June 30, 2020. The increase in the period-to-period comparison was primarily due to temporary production curtailments by third party customers that occurred in 2020 period. Those curtailments were restored to full production in the latter half of 2020. This decrease was offset in part by well turn-in-line activity.

COALBED METHANE (CBM) SEGMENT

The CBM segment had earnings before income tax of $7 million for both the three months ended June 30, 2021 and 2020.
 For the Three Months Ended June 30,
 20212020VariancePercent
Change
CBM Gas Sales Volumes (Bcf)12.6 13.1 (0.5)(3.8)%
Average Sales Price - Gas (per Mcf)$2.91 $1.75 $1.16 66.3 %
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)$(0.08)$0.99 $(1.07)(108.1)%
Total Average CBM Sales Price (per Mcf)$2.83 $2.74 $0.09 3.3 %
Average CBM Lease Operating Expenses (per Mcf)0.26 0.31 (0.05)(16.1)%
Average CBM Production, Ad Valorem and Other Fees (per Mcf)0.05 0.09 (0.04)(44.4)%
Average CBM Transportation, Gathering and Compression Costs (per Mcf)0.79 0.64 0.15 23.4 %
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)1.15 1.20 (0.05)(4.2)%
   Total Average CBM Production Costs (per Mcf)$2.25 $2.24 $0.01 0.4 %
   Total Average CBM Production Margin (per Mcf)$0.58 $0.50 $0.08 16.0 %
The CBM segment had natural gas revenue of $36 million for the three months ended June 30, 2021 compared to $23 million for the three months ended June 30, 2020. The $13 million increase was due to a 66.3% increase in the average sales price for natural gas in the current period, offset in part by the 3.8% decrease in total CBM sales volumes. The decrease in CBM sales volumes was primarily due to normal production declines.

The total average CBM sales price increased $0.09 per Mcf due to a $1.16 per Mcf increase in average gas sales price, offset in part by a $1.07 per Mcf change in the realized (loss) gain on commodity derivative instruments resulting from the Company's hedging program. The notional amounts associated with these financial hedges represented approximately 10.2 Bcf of the Company's produced CBM sales volumes for the three months ended June 30, 2021 at an average loss of $0.07 per Mcf hedged. For the three months ended June 30, 2020, these financial hedges represented approximately 13.5 Bcf at an average gain of $0.96 per Mcf hedged.

Total operating costs and expenses for the CBM segment were $28 million for the three months ended June 30, 2021 compared to $29 million for the three months ended June 30, 2020. The decrease in total dollars and increase in unit costs for the CBM segment were due to the following items:

•CBM lease operating expense was $3 million for the three months ended June 30, 2021 compared to $4 million for the three months ended June 30, 2020. The decrease in total dollars and unit costs was primarily due to decreases in repairs and maintenance, well operations, environmental and safety expense and water disposal costs.

39

•CBM transportation, gathering and compression costs were $10 million for the three months ended June 30, 2021 compared to $8 million for the three months ended June 30, 2020. The increase in total dollars and unit costs was primarily due to an increase in firm transportation expense.

•Depreciation, depletion and amortization costs attributable to the CBM segment were $14 million for the three months ended June 30, 2021 compared to $16 million for the three months ended June 30, 2020. These amounts included depletion on a unit of production basis of $0.66 per Mcfe for both periods. The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

OTHER SEGMENT

The Other Segment includes nominal shallow oil and gas production which is not significant to the Company. It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, realized gain on commodity derivative instruments that were monetized prior to their contractual settlement dates, exploration and production related other costs, as well as various other expenses that are managed outside the Shale and CBM segments such as SG&A, interest expense and income taxes.

The Other Segment had a loss before income tax of $603 million for the three months ended June 30, 2021 compared to a loss before income tax of $277 million for the three months ended June 30, 2020. The decrease in total dollars is discussed below.
 For the Three Months Ended June 30,
 20212020VariancePercent Change
Other Gas Sales Volumes (Bcf)0.1 — 0.1 100.0 %

Gain or Loss on Commodity Derivative Instruments and Monetization

For the three months ended June 30, 2021, the Other Segment recognized an unrealized loss on commodity derivative instruments of $529 million. For the three months ended June 30, 2020, the Other Segment recognized an unrealized loss on commodity derivative instruments of $205 million as well as cash settlements received of $29 million related to natural gas hedges that were monetized prior to their settlement dates. The unrealized gain or loss on commodity derivative instruments represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis. See Note 11 - Derivative Instruments in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information related to the cash settlements.

Purchased Gas

Purchased gas volumes represent volumes of natural gas purchased at market prices from third-parties and then resold in order to fulfill contracts with certain customers and to balance supply. Purchased gas revenues were $17 million for the three months ended June 30, 2021 compared to $20 million for the three months ended June 30, 2020. Purchased gas costs were $15 million for the three months ended June 30, 2021 compared to $20 million for the three months ended June 30, 2020. The period-to-period decrease in purchased gas revenue was due to a decrease in purchased gas sales volumes, offset in part by an increase in averages sales price.
 For the Three Months Ended June 30,
20212020VariancePercent Change
Purchased Gas Sales Volumes (in Bcf)5.9 13.1 (7.2)(55.0)%
Average Sales Price (per Mcf)$2.82 $1.56 $1.26 80.8 %
Purchased Gas Average Cost (per Mcf)$2.45 $1.52 $0.93 61.2 %

Other Operating Income
For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Equity Income (Loss) from Affiliates$2 $(1)$3 300.0 %
Excess Firm Transportation Income3 3 — — %
Water Income2 2 — — %
Total Other Operating Income$7 $4 $3 75.0 %

40


•Equity income (loss) from affiliates primarily represents CNX's share of earnings from a 50% interest in a power plant located within CNX’s CBM field. Power generated from the facility is sold into wholesale electricity markets during times of peak energy consumption. Due to the plant consuming coal mine methane gas, the plant qualifies for Pennsylvania Tier I Renewable Energy Credits.
•Excess firm transportation income represents revenue from the sale of excess firm transportation capacity to third-parties. The Company obtains firm pipeline transportation capacity to enable gas production to flow uninterrupted as sales volumes increase. In order to minimize this unutilized firm transportation expense, CNX is able to release (sell) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue from released capacity helps offset the unutilized firm transportation and processing fees in total other operating expense.

Exploration and Production Related Other Costs
 For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Lease Expiration Costs$2 $2 $— — %
Land Rentals1 1 — — %
Total Exploration and Production Related Other Costs$3 $3 $— — %

•Lease expiration costs relate to leases where the primary term expired or will expire within the next 12 months.

Selling, General and Administrative ("SG&A")

SG&A costs include costs such as overhead, including employee labor and benefit costs, short-term incentive compensation, costs of maintaining our headquarters, audit and other professional fees, and legal compliance expenses. SG&A costs also include non-cash long-term equity-based compensation expense.
For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Short-Term Inventive Compensation$3 $3 $— — %
Long-Term Equity-Based Compensation (Non-Cash)3 3 — — %
Salaries, Wages and Employee Benefits6 8 (2)(25.0)%
Other12 9 3 33.3 %
Total SG&A$24 $23 $1 4.3 %

•Salaries, wages and employee benefits decreased in the period-to-period comparison primarily due to lower employee related expenses.
•Other increased in the period-to-period comparison primarily due to an increase in professional service expense.

Other Operating Expense
 For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Unutilized Firm Transportation and Processing Fees$14 $21 $(7)(33.3)%
Idle Equipment and Service Charges— 3 (3)(100.0)%
Insurance Expense1 1 — — %
Other— 3 (3)(100.0)%
Total Other Operating Expense$15 $28 $(13)(46.4)%

•Unutilized firm transportation and processing fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs. In some instances, the Company may have the opportunity to realize more favorable net pricing by strategically choosing to sell natural gas into a market or to a customer that does not require the use of the Company’s own firm transportation capacity. Such sales would result in an increase in unutilized firm transportation expense. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Excess Firm

41

Transportation Income above. The decrease in the period-to-period comparison was primarily due to an increase in utilization of firm transportation capacity in the current year due to production increases in 2021 compared to 2020.
•Idle equipment and service charges relates to the temporary idling of certain of the Company's natural gas drilling rigs as well as related equipment and other services that may be needed in the natural gas drilling and completions process. The decrease in the period-to-period comparison was the result of two of CNX's drilling rigs being idled in the prior period.

Other Expense
 For the Three Months Ended June 30,
 (in millions)20212020VariancePercent Change
Other Income
Right-of-Way Sales$1 $1 $— — %
Total Other Income$1 $1 $— — %
Other Expense
Professional Services$3 $2 $1 50.0 %
Bank Fees3 3 — — %
Other Corporate Expense1 1 — — %
Total Other Expense$7 $6 $1 16.7 %
       Total Other Expense$6 $5 $1 20.0 %

Gain on Asset Sales and Abandonments, net

A gain on asset sales of $7 million related to the sale of various non-core assets was recognized in the three months ended June 30, 2021 compared to a gain of $6 million in the three months ended June 30, 2020.

Interest Expense
For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Total Interest Expense$39 $46 $(7)(15.2)%

•The $7 million decrease was primarily due to the purchase of the remaining $894 million of the 5.875% senior notes due in April 2022 during the year ended December 31, 2020, lower borrowings on the CNX senior secured revolving credit facility ("Credit Facility") and higher unrealized gains on interest rate swap agreements. These decreases were offset in part by interest related to the addition of $500 million of senior notes due 2029, and $200 million of senior notes due 2027. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Income Taxes
 For the Three Months Ended June 30,
(in millions)20212020VariancePercent Change
Total Company Loss Before Income Tax$(446)$(159)$(287)(180.5)%
Income Tax Benefit$(92)$(29)$(63)(217.2)%
Effective Income Tax Rate20.6 %18.0 %2.6 %

The effective income tax rate was 20.6% for the three months ended June 30, 2021 compared to 18.0% for the three months ended June 30, 2020. The effective rate for the three months ended June 30, 2021 differs from the U.S. federal statutory rate of 21% primarily due to the impact of equity compensation and state income taxes. The effective rate for the three months ended June 30, 2020 differs from the U.S. federal statutory rate of 21% primarily due to the impact of equity compensation and state income taxes (See Note 4 - Income Taxes in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).

42

Results of Operations - Six Months Ended June 30, 2021 Compared with Six Months Ended June 30, 2020

Net Loss Attributable to CNX Resources Shareholders
CNX reported a net loss attributable to CNX Resources shareholders of $256 million, or a loss per diluted share of $1.16, for the six months ended June 30, 2021, compared to a net loss attributable to CNX Resources shareholders of $475 million, or a loss per diluted share of $2.54, for the six months ended June 30, 2020.
 For the Six Months Ended June 30,
(Dollars in thousands)20212020Variance
Net Loss$(256,034)$(435,709)$179,675 
Less: Net Income Attributable to Noncontrolling Interest— 39,126 (39,126)
Net Loss Attributable to CNX Resources Shareholders$(256,034)$(474,835)$218,801 

Included in the loss for the six months ended June 30, 2021 was an unrealized loss on commodity derivative instruments of $497 million. Included in the loss for the six months ended June 30, 2020 was an unrealized loss on commodity derivative instruments of $241 million, a $62 million non-cash impairment charge related to exploration and production properties specific to our Southwestern Pennsylvania (SWPA) CBM asset group (See Note 5 - Property, Plant and Equipment in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information), and a $473 million non-cash impairment charge related to goodwill (See Note 6 - Goodwill and Other Intangible Assets in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information) and an unrealized loss on commodity derivative instruments of $36 million..

Non-GAAP Financial Measures

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 these metrics are widely used to evaluate a natural gas company’s operating performance. Sales of Natural Gas, NGL and Oil, including cash settlements excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments. Sales of Natural Gas, NGL and Oil, including cash settlements also excludes purchased gas revenue and other revenue and operating income, which are not directly related to CNX’s natural gas producing activities. Natural Gas, NGL and Oil Production Costs excludes certain expenses that are not directly related to CNX’s natural gas producing activities and are managed outside our production operations (See Note 14 - Segment Information in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information). These expenses include, but are not limited to, interest expense, impairment of exploration and production properties, impairment of goodwill, other operating expense and other corporate expenses such as selling, general and administrative costs. We believe that Sales of Natural Gas, NGL and Oil, including cash settlements, Natural Gas, NGL and Oil Production Costs and Natural Gas, NGL and Oil Production Margin (which is derived by subtracting Natural Gas, NGL and Oil Production Costs from Sales of Natural Gas, NGL and Oil, including cash settlements) provide useful information to investors for evaluating period-to-period comparisons of earnings trends. These metrics should not be viewed 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.


















3143


Non-GAAP Financial Measures Reconciliation

For the Three Months Ended March 31,For the Six Months Ended June 30,
20212020
in Millionsin Millions
(Dollars in millions)(Dollars in millions)20212020
Total Revenue and Other Operating IncomeTotal Revenue and Other Operating Income$473 $416 Total Revenue and Other Operating Income$346 $565 
Add (Deduct):Add (Deduct):Add (Deduct):
Purchased Gas RevenuePurchased Gas Revenue(34)(26)Purchased Gas Revenue(50)(47)
Gain or Loss on Commodity Derivative Instruments and Monetization(31)(19)
Other Operating Income(25)(24)
Loss on Commodity Derivative Instruments and MonetizationLoss on Commodity Derivative Instruments and Monetization497 157 
Other Revenue and Operating IncomeOther Revenue and Operating Income(50)(39)
Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial MeasureSales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure$383 $347 Sales of Natural Gas, NGL and Oil, including Cash Settlements, a Non-GAAP Financial Measure$743 $636 
Total Operating ExpenseTotal Operating Expense$300 $843 Total Operating Expense$581 $1,106 
Add (Deduct):Add (Deduct):Add (Deduct):
Depreciation, Depletion and Amortization (DD&A) - CorporateDepreciation, Depletion and Amortization (DD&A) - Corporate(3)(2)Depreciation, Depletion and Amortization (DD&A) - Corporate(6)(5)
Exploration and Production Related Other Costs Exploration and Production Related Other Costs(2)(4) Exploration and Production Related Other Costs(5)(7)
Purchased Gas CostsPurchased Gas Costs(33)(25)Purchased Gas Costs(47)(45)
Impairment of Exploration and Production PropertiesImpairment of Exploration and Production Properties— (62)Impairment of Exploration and Production Properties— (62)
Impairment of GoodwillImpairment of Goodwill— (473)Impairment of Goodwill— (473)
Selling, General and Administrative CostsSelling, General and Administrative Costs(28)(30)Selling, General and Administrative Costs(52)(54)
Other Operating ExpenseOther Operating Expense(16)(21)Other Operating Expense(31)(47)
Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure1
Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure1
$218 $226 
Natural Gas, NGL and Oil Production Costs, a Non-GAAP Financial Measure1
$440 $413 

1 Natural Gas, NGL and Oil production costs consists primarily of lease operating expense, production ad valorem and other fees, transportation, gathering and compression and production related depreciation, depletion and amortization.

Selected Natural Gas, NGL and Oil Production Financial Data

The following table presents a summary of our total sales volumes, sales of natural gas, NGL and oil including cash settlements, natural gas, NGL and oil production costs and natural gas, NGL and oil production margin related to our production operations on a total company basis (See Non-GAAP Financial Measures Reconciliation for the reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP):

For the Three Months Ended March 31,For the Six Months Ended June 30,
20212020Variance20212020Variance
in MillionsPer Mcfein MillionsPer Mcfein MillionsPer Mcfein MillionsPer Mcfein MillionsPer Mcfein MillionsPer Mcfe
Total Sales Volumes (Bcfe)*Total Sales Volumes (Bcfe)*140.6 134.4 6.2 Total Sales Volumes (Bcfe)*278.5 248.9 29.6 
Natural Gas, NGL and Oil RevenueNatural Gas, NGL and Oil Revenue$381 $2.71 $251 $1.82 $130 $0.89 Natural Gas, NGL and Oil Revenue$751 $2.70 $427 $1.67 $324 $1.03 
Gain on Commodity Derivative Instruments - Cash Settlement - Gas**2 0.02 96 0.77 (94)(0.75)
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas**(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas**(8)(0.03)209 0.89 (217)(0.92)
Sales of Natural Gas, NGL and Oil, including Cash SettlementsSales of Natural Gas, NGL and Oil, including Cash Settlements383 2.73 347 2.59 36 0.14 Sales of Natural Gas, NGL and Oil, including Cash Settlements743 2.67 636 2.56 107 0.11 
Lease Operating ExpenseLease Operating Expense9 0.07 10 0.07 (1)— Lease Operating Expense20 0.07 20 0.08 — (0.01)
Production, Ad Valorem, and Other FeesProduction, Ad Valorem, and Other Fees6 0.04 6 0.05 — (0.01)Production, Ad Valorem, and Other Fees13 0.05 12 0.04 1 0.01 
Transportation, Gathering and CompressionTransportation, Gathering and Compression77 0.55 83 0.62 (6)(0.07)Transportation, Gathering and Compression161 0.58 143 0.58 18 — 
Depreciation, Depletion and Amortization (DD&A)Depreciation, Depletion and Amortization (DD&A)126 0.90 127 0.95 (1)(0.05)Depreciation, Depletion and Amortization (DD&A)246 0.88 238 0.96 8 (0.08)
Natural Gas, NGL and Oil Production CostsNatural Gas, NGL and Oil Production Costs218 1.56 226 1.69 (8)(0.13)Natural Gas, NGL and Oil Production Costs440 1.58 413 1.66 27 (0.08)
Natural Gas, NGL and Oil Production MarginNatural Gas, NGL and Oil Production Margin$165 $1.17 $121 $0.90 $44 $0.27 Natural Gas, NGL and Oil Production Margin$303 $1.09 $223 $0.90 $80 $0.19 

*NGLs and Oil/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 NGL, condensate, and natural gas prices.
**Excluding hedge monetizations.


32

The 6.229.6 Bcfe increase in volumes in the period-to period comparison was primarily due to the turn-in-line of new wells throughout 2020 and the first quarterhalf of 2021. These increases wereThe increase was offset in part by normal production declines.

44


Changes in the average costs per Mcfe were primarily related to the following items:

•Transportation, gathering, and compression expense decreased on a per unit basis primarily due to lower processing costs as a result of a drier production mix and a decrease in repairs and maintenance costs.
•Depreciation, depletion and amortization expense decreased on a per unit basis as a result of low cost reserve additions from development during the 2020 period in Southwest Pennsylvania (SWPA), the addition of proved undeveloped Shale wells in the Central Pennsylvania (CPA), and an impairment recognized in CBM in the 2020 period.

Average Realized Price Reconciliation

The following table presents a breakout of liquids and natural gas sales information and settled derivative information to assist in the understanding of the Company’s natural gas production and sales portfolio and information regarding settled commodity derivatives:
For the Three Months Ended March 31,For the Six Months Ended June 30,
in thousands (unless noted) in thousands (unless noted)20212020VariancePercent Change in thousands (unless noted)20212020VariancePercent Change
LIQUIDSLIQUIDSLIQUIDS
NGL:NGL:NGL:
Sales Volume (MMcfe)Sales Volume (MMcfe)6,468 8,301 (1,833)(22.1)%Sales Volume (MMcfe)15,937 13,042 2,895 22.2 %
Sales Volume (Mbbls)Sales Volume (Mbbls)1,078 1,383 (305)(22.1)%Sales Volume (Mbbls)2,656 2,174 482 22.2 %
Gross Price ($/Bbl)Gross Price ($/Bbl)$29.58 $14.04 $15.54 110.7 %Gross Price ($/Bbl)$27.60 $11.82 $15.78 133.5 %
Gross NGL RevenueGross NGL Revenue$31,863 $19,412 $12,451 64.1 %Gross NGL Revenue$73,384 $25,638 $47,746 186.2 %
Oil/Condensate:Oil/Condensate:Oil/Condensate:
Sales Volume (MMcfe)Sales Volume (MMcfe)306 377 (71)(18.8)%Sales Volume (MMcfe)1,091 613 478 78.0 %
Sales Volume (Mbbls)Sales Volume (Mbbls)51 63 (12)(19.0)%Sales Volume (Mbbls)182 102 80 78.4 %
Gross Price ($/Bbl)Gross Price ($/Bbl)$38.86 $39.56 $(0.70)(1.8)%Gross Price ($/Bbl)$49.11 $34.49 $14.62 42.4 %
Gross Oil/Condensate RevenueGross Oil/Condensate Revenue$1,986 $2,483 $(497)(20.0)%Gross Oil/Condensate Revenue$8,932 $3,524 $5,408 153.5 %
NATURAL GASNATURAL GASNATURAL GAS
Sales Volume (MMcf)Sales Volume (MMcf)133,849 125,685 8,164 6.5 %Sales Volume (MMcf)261,515 235,212 26,303 11.2 %
Sales Price ($/Mcf)Sales Price ($/Mcf)$2.60 $1.83 $0.77 42.1 %Sales Price ($/Mcf)$2.56 $1.69 $0.87 51.5 %
Gross Natural Gas Revenue Gross Natural Gas Revenue$347,376 $229,599 $117,777 51.3 % Gross Natural Gas Revenue$668,358 $398,108 $270,250 67.9 %
Hedging Impact ($/Mcf)Hedging Impact ($/Mcf)$0.02 $0.77 $(0.75)(97.4)%Hedging Impact ($/Mcf)$(0.03)$0.89 $(0.92)(103.4)%
Gain on Commodity Derivative Instruments - Cash Settlement*$2,405 $96,179 $(93,774)(97.5)%
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement*(Loss) Gain on Commodity Derivative Instruments - Cash Settlement*$(7,954)$209,419 $(217,373)(103.8)%
* Excluding gains from hedge monetization.

The increase in gross revenue was primarily the result of the $0.77$0.87 per Mcf increase in general natural gas prices, when excluding the impact of hedging, the 6.229.6 Bcfe increase in sales volumes, and the $15.54$15.78 per Bbl increase in NGL prices. These increases were offset, in-part, by the decreaseimpact of the change in the realized (loss) gain on commodity derivative instruments related to the Company's hedging program.














3345

SEGMENT ANALYSIS for the threesix months ended March 31,June 30, 2021 compared to the threesix months ended March 31,June 30, 2020:
For the Three Months EndedDifference to Three Months EndedFor the Six Months EndedDifference to Six Months Ended
March 31, 2021March 31, 2020 June 30, 2021June 30, 2020
(in millions) (in millions)ShaleCBMOtherTotalShaleCBMOtherTotal (in millions)ShaleCBMOtherTotalShaleCBMOtherTotal
Natural Gas, NGLs and Oil RevenueNatural Gas, NGLs and Oil Revenue$342 $39 $— $381 $122 $8 $— $130 Natural Gas, NGLs and Oil Revenue$675 $75 $1 $751 $302 $21 $1 $324 
Gain on Commodity Derivative Instruments2 — 31 33 (84)(10)12 (82)
Loss on Commodity Derivative InstrumentsLoss on Commodity Derivative Instruments(7)(1)(497)(505)(194)(24)(339)(557)
Purchased Gas RevenuePurchased Gas Revenue— — 34 34 — — 8 8 Purchased Gas Revenue— — 50 50 — — 3 3 
Other Revenue and Operating IncomeOther Revenue and Operating Income19 — 6 25 1 — — 1 Other Revenue and Operating Income38 — 12 50 8 — 3 11 
Total Revenue and Other Operating IncomeTotal Revenue and Other Operating Income363 39 71 473 39 (2)20 57 Total Revenue and Other Operating Income706 74 (434)346 116 (3)(332)(219)
Lease Operating ExpenseLease Operating Expense6 3 — 9 — (1)— (1)Lease Operating Expense13 6 1 20 — (2)2 — 
Production, Ad Valorem, and Other FeesProduction, Ad Valorem, and Other Fees4 2 — 6 (1)1 — — Production, Ad Valorem, and Other Fees11 2 — 13 2 (1)— 1 
Transportation, Gathering and CompressionTransportation, Gathering and Compression69 8 — 77 (5)(3)2 (6)Transportation, Gathering and Compression143 18 — 161 19 (1)— 18 
Depreciation, Depletion and AmortizationDepreciation, Depletion and Amortization109 16 4 129 3 (3)— — Depreciation, Depletion and Amortization214 30 8 252 14 (4)(1)9 
Impairment of Exploration and Production PropertiesImpairment of Exploration and Production Properties— — — — — — (62)(62)Impairment of Exploration and Production Properties— — — — — — (62)(62)
Impairment of GoodwillImpairment of Goodwill— — — — — — (473)(473)Impairment of Goodwill— — — — — — (473)(473)
Exploration and Production Related Other CostsExploration and Production Related Other Costs— — 2 2 — — (2)(2)Exploration and Production Related Other Costs— — 5 5 — — (2)(2)
Purchased Gas CostsPurchased Gas Costs— — 33 33 — — 8 8 Purchased Gas Costs— — 47 47 — — 2 2 
Other Operating ExpenseOther Operating Expense— — 16 16 — — (5)(5)Other Operating Expense— — 31 31 — — (16)(16)
Selling, General and Administrative CostsSelling, General and Administrative Costs— — 28 28 — — (2)(2)Selling, General and Administrative Costs— — 52 52 — — (2)(2)
Total Operating ExpenseTotal Operating Expense188 29 83 300 (3)(6)(534)(543)Total Operating Expense381 56 144 581 35 (8)(552)(525)
Other ExpenseOther Expense— — 5 5 — — — — Other Expense— — 10 10 — — — — 
Gain on Asset Sales and Abandonments, netGain on Asset Sales and Abandonments, net— — (3)(3)— — 9 9 Gain on Asset Sales and Abandonments, net— — (10)(10)— — 8 8 
Gain on Debt ExtinguishmentGain on Debt Extinguishment— — — — — — 11 11 Gain on Debt Extinguishment— — — — — — 11 11 
Interest ExpenseInterest Expense— — 36 36 — — (13)(13)Interest Expense— — 76 76 — — (19)(19)
Total Other ExpenseTotal Other Expense— — 38 38 — — 7 7 Total Other Expense— — 76 76 — — — — 
Total Costs and ExpensesTotal Costs and Expenses188 29 121 338 (3)(6)(527)(536)Total Costs and Expenses381 56 220 657 35 (8)(552)(525)
Earnings (Loss) Before Income TaxEarnings (Loss) Before Income Tax$175 $10 $(50)$135 $42 $4 $547 $593 Earnings (Loss) Before Income Tax$325 $18 $(654)$(311)$81 $5 $220 $306 

















3446

        SHALE SEGMENT

The Shale segment had earnings before income tax of $175$325 million for the threesix months ended March 31,June 30, 2021 compared to earnings before income tax of $133$244 million for the threesix months ended March 31,June 30, 2020.
For the Three Months Ended March 31, For the Six Months Ended June 30,
20212020VariancePercent
Change		 20212020VariancePercent
Change
Shale Gas Sales Volumes (Bcf)Shale Gas Sales Volumes (Bcf)121.1 112.4 8.7 7.7 %Shale Gas Sales Volumes (Bcf)236.1 208.9 27.2 13.0 %
NGLs Sales Volumes (Bcfe)*NGLs Sales Volumes (Bcfe)*6.5 8.3 (1.8)(21.7)%NGLs Sales Volumes (Bcfe)*15.9 13.1 2.8 21.4 %
Oil/Condensate Sales Volumes (Bcfe)*Oil/Condensate Sales Volumes (Bcfe)*0.3 0.4 (0.1)(25.0)%Oil/Condensate Sales Volumes (Bcfe)*1.1 0.6 0.5 83.3 %
Total Shale Sales Volumes (Bcfe)*Total Shale Sales Volumes (Bcfe)*127.9 121.1 6.8 5.6 %Total Shale Sales Volumes (Bcfe)*253.1 222.6 30.5 13.7 %
Average Sales Price - Natural Gas (per Mcf)Average Sales Price - Natural Gas (per Mcf)$2.55 $1.77 $0.78 44.1 %Average Sales Price - Natural Gas (per Mcf)$2.51 $1.65 $0.86 52.1 %
Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)$0.02 $0.77 $(0.75)(97.4)%
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)(Loss) Gain on Commodity Derivative Instruments - Cash Settlement- Gas (per Mcf)$(0.03)$0.89 $(0.92)(103.4)%
Average Sales Price - NGLs (per Mcfe)*Average Sales Price - NGLs (per Mcfe)*$4.93 $2.34 $2.59 110.7 %Average Sales Price - NGLs (per Mcfe)*$4.60 $1.97 $2.63 133.5 %
Average Sales Price - Oil/Condensate (per Mcfe)*Average Sales Price - Oil/Condensate (per Mcfe)*$6.45 $6.55 $(0.10)(1.5)%Average Sales Price - Oil/Condensate (per Mcfe)*$8.18 $5.72 $2.46 43.0 %
Total Average Shale Sales Price (per Mcfe)Total Average Shale Sales Price (per Mcfe)$2.69 $2.54 $0.15 5.9 %Total Average Shale Sales Price (per Mcfe)$2.64 $2.52 $0.12 4.8 %
Average Shale Lease Operating Expenses (per Mcfe)Average Shale Lease Operating Expenses (per Mcfe)0.05 0.05 — — %Average Shale Lease Operating Expenses (per Mcfe)0.05 0.06 (0.01)(16.7)%
Average Shale Production, Ad Valorem and Other Fees (per Mcfe)Average Shale Production, Ad Valorem and Other Fees (per Mcfe)0.03 0.04 (0.01)(25.0)%Average Shale Production, Ad Valorem and Other Fees (per Mcfe)0.05 0.04 0.01 25.0 %
Average Shale Transportation, Gathering and Compression Costs (per Mcfe)Average Shale Transportation, Gathering and Compression Costs (per Mcfe)0.54 0.61 (0.07)(11.5)%Average Shale Transportation, Gathering and Compression Costs (per Mcfe)0.56 0.56 — — %
Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe)Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe)0.85 0.89 (0.04)(4.5)%Average Shale Depreciation, Depletion and Amortization Costs (per Mcfe)0.85 0.90 (0.05)(5.6)%
Total Average Shale Production Costs (per Mcfe) Total Average Shale Production Costs (per Mcfe)$1.47 $1.59 $(0.12)(7.5)% Total Average Shale Production Costs (per Mcfe)$1.51 $1.56 $(0.05)(3.2)%
Total Average Shale Production Margin (per Mcfe) Total Average Shale Production Margin (per Mcfe)$1.22 $0.95 $0.27 28.4 % Total Average Shale Production Margin (per Mcfe)$1.13 $0.96 $0.17 17.7 %
* NGLs and Oil/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, NGL, condensate, and natural gas prices.

The Shale segment had natural gas, NGLs and oil/condensate revenue of $342$675 million for the threesix months ended March 31,June 30, 2021 compared to $220$373 million for the threesix months ended March 31,June 30, 2020. The $122$302 million increase was due primarily to a 44.1%52.1% increase in the average sales price for natural gas, a 5.6%13.7% increase in total Shale sales volumes, and a 110.7%133.5% increase in the average sales price of NGLs. The increase in total Shale volumes was primarily due to the turn-in-line of new wells throughout 2020 and the first quarterhalf of 2021. These increases were offset in part by normal production declines.

The increase in total average Shale sales price was primarily due to a $0.78$0.86 per Mcf increase in average gas sales price and a $2.59$2.63 per Mcfe increase in the average NGL sales price. These increases were offset in part by a $0.75$0.92 per Mcf decreasechange in the realized (loss) gain on commodity derivative instruments. The notional amounts associated with these financial hedges represented approximately 110.3209.4 Bcf of the Company's produced Shale gas sales volumes for the threesix months ended March 31,June 30, 2021 at an average gainloss of $0.02$0.03 per Mcf hedged. For the threesix months ended March 31,June 30, 2020, these financial hedges represented approximately 104.2207.2 Bcf at an average gain of $0.83$0.90 per Mcf hedged.

Total operating costs and expenses for the Shale segment were $188$381 million for the threesix months ended March 31,June 30, 2021 compared to $191$346 million for the threesix months ended March 31,June 30, 2020. The decreaseincrease in total dollars and decrease in unit costs for the Shale segment were due to the following items:

•Shale transportation, gathering and compression costs were $69$143 million for the threesix months ended March 31,June 30, 2021 compared to $74$124 million for the threesix months ended March 31,June 30, 2020. The decreasesincrease in total dollars and unit costs werewas primarily related to lowerthe increase in production volumes, increased processing costs due to a drierwetter production mix. The increase in total Shale volumes discussed above also contributed to the decrease in unitmix, and increased firm transportation costs.

•Depreciation, depletion and amortization costs attributable to the Shale segment were $109$214 million for the threesix months ended March 31,June 30, 2021 compared to $106$200 million for the threesix months ended March 31,June 30, 2020. These amounts included depletion on a unit of production basis of $0.75$0.74 per Mcfe and $0.79$0.80 per Mcfe, respectively. The decrease in the units of production

47

depreciation, depletion and amortization rate in the current period is primarily the result of low-cost reserve

35

additions from development in 2020 in SWPA as well as the addition of proved undeveloped Shale reserves in CPA. The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

Total Shale other revenue and operating income relates to natural gas gathering services provided to third-parties. The Shale segment had other revenue and operating income of $19$38 million for the threesix months ended March 31,June 30, 2021 compared to $18$30 million for the threesix months ended March 31,June 30, 2020. The increase in the period-to-period comparison was primarily due to temporary production curtailments by third party customers that occurred in the 2020 period. Those curtailments were restored to full production in the latter half of 2020. This decrease was offset in part by well turn-in-line activity.

COALBED METHANE (CBM) SEGMENT
The CBM segment had earnings before income tax of $10$18 million for the threesix months ended March 31,June 30, 2021 compared to earnings before income tax of $6$13 million for the threesix months ended March 31,June 30, 2020.
 For the Three Months Ended March 31,
 20212020VariancePercent
Change
CBM Gas Sales Volumes (Bcf)12.7 13.2 (0.5)(3.8)%
Average Sales Price - Gas (per Mcf)$3.06 $2.32 $0.74 31.9 %
Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)$0.02 $0.73 $(0.71)(97.3)%
Total Average CBM Sales Price (per Mcf)$3.07 $3.05 $0.02 0.7 %
Average CBM Lease Operating Expenses (per Mcf)0.23 0.27 (0.04)(14.8)%
Average CBM Production, Ad Valorem and Other Fees (per Mcf)0.15 0.11 0.04 36.4 %
Average CBM Transportation, Gathering and Compression Costs (per Mcf)0.65 0.81 (0.16)(19.8)%
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)1.21 1.39 (0.18)(12.9)%
   Total Average CBM Production Costs (per Mcf)$2.24 $2.58 $(0.34)(13.2)%
   Total Average CBM Production Margin (per Mcf)$0.83 $0.47 $0.36 76.6 %

 For the Six Months Ended June 30,
 20212020VariancePercent
Change
CBM Gas Sales Volumes (Bcf)25.3 26.3 (1.0)(3.8)%
Average Sales Price - Gas (per Mcf)$2.98 $2.04 $0.94 46.1 %
(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf)$(0.03)$0.86 $(0.89)(103.5)%
Total Average CBM Sales Price (per Mcf)$2.95 $2.90 $0.05 1.7 %
Average CBM Lease Operating Expenses (per Mcf)0.24 0.29 (0.05)(17.2)%
Average CBM Production, Ad Valorem and Other Fees (per Mcf)0.10 0.10 — — %
Average CBM Transportation, Gathering and Compression Costs (per Mcf)0.72 0.73 (0.01)(1.4)%
Average CBM Depreciation, Depletion and Amortization Costs (per Mcf)1.18 1.29 (0.11)(8.5)%
   Total Average CBM Production Costs (per Mcf)$2.24 $2.41 $(0.17)(7.1)%
   Total Average CBM Production Margin (per Mcf)$0.71 $0.49 $0.22 44.9 %
The CBM segment had natural gas revenue of $39$75 million for the threesix months ended March 31,June 30, 2021 compared to $31$54 million for the threesix months ended March 31,June 30, 2020. The $8$21 million increase was primarily due to a 31.9%46.1% increase in the average sales price for natural gas in the current period,period. The natural gas price increases were partially offset in part by the 3.8% decrease in total CBM sales volumes. The decrease in CBM sales volumes was primarily due to normal production declines.

The total average CBM sales price increased $0.02$0.05 per Mcf due to a $0.74$0.94 per Mcf increase in average gas sales price, offset in part by a $0.71$0.89 per Mcf decreasechange in the realized (loss) gain on commodity derivative instruments resulting from the Company's hedging program. The notional amounts associated with these financial hedges represented approximately 11.221.5 Bcf of the Company's produced CBM sales volumes for the threesix months ended March 31,June 30, 2021 at an average gainloss of $0.02$0.03 per Mcf hedged. For the threesix months ended March 31,June 30, 2020, these financial hedges represented approximately 11.725.2 Bcf at an average gain of $0.83$0.90 per Mcf hedged.

Total operating costs and expenses for the CBM segment were $29$56 million for the threesix months ended March 31,June 30, 2021 compared to $35$64 million for the threesix months ended March 31,June 30, 2020. The decreasedecreases in total dollars and decrease in unit costs for the CBM segment were due to the following items:

•CBM lease operating expense was $3$6 million for the threesix months ended March 31,June 30, 2021 compared to $4$8 million for the threesix months ended March 31,June 30, 2020. The decrease in total dollars and unit costs was primarily due to decreases in repairs and maintenance, well operations, environmental and safety expense and water disposal costs.

•CBM transportation, gathering and compression costs were $8$18 million for the threesix months ended March 31,June 30, 2021 compared to $11$19 million for the threesix months ended March 31,June 30, 2020. The decrease in total dollars and unit costs was primarily duerelated to lower volumes and decreases in electrical power expense and repairsrepair and maintenance.maintenance costs.

48

•Depreciation, depletion and amortization costs attributable to the CBM segment were $16$30 million for the threesix months ended March 31,June 30, 2021 compared to $19$34 million for the threesix months ended March 31,June 30, 2020. These amounts included depletion on a unit of production basis of $0.66 per Mcfe and $0.72$0.69 per Mcfe, respectively. The decrease in the units of production

36

depreciation, depletion and amortization rate was primarily due to an impairment in the 2020 period that reduced the carrying value of the underlying CBM asset base. The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

OTHER SEGMENT

The Other Segment includes nominal shallow oil and gas production which is not significant to the Company. It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, realized gain on commodity derivative instruments that were monetized prior to their contractual settlement dates, exploration and production related other costs, impairments, as well as various other expenses that are managed outside the Shale and CBM segments such as SG&A, interest expense and income taxes.

The Other Segment had a loss before income tax of $50$654 million for the threesix months ended March 31,June 30, 2021 compared to a loss before income tax of $597$874 million for the threesix months ended March 31,June 30, 2020. The increase in total dollars is discussed below.

 For the Three Months Ended March 31,
 20212020VariancePercent Change
Other Gas Sales Volumes (Bcf)— 0.1 (0.1)(100.0)%
 For the Six Months Ended June 30,
 20212020VariancePercent Change
Other Gas Sales Volumes (Bcf)0.1 — 0.1 100.0 %

Gain or Loss on Commodity Derivative Instruments and Monetization

For the threesix months ended March 31,June 30, 2021, the Other Segment recognized an unrealized gainloss on commodity derivative instruments of $31$497 million. For the threesix months ended March 31,June 30, 2020, the Other Segment recognized an unrealized loss on commodity derivative instruments of $36$241 million as well as cash settlements received of $55$83 million, $84 million of which related to natural gas hedges that were partially monetized prior to their settlement dates. The unrealized gain or loss on commodity derivative instruments represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis. See Note 11 - Derivative Instruments in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information related to the cash settlements.

Purchased Gas

Purchased gas volumes represent volumes of natural gas purchased at market prices from third-parties and then resold in order to fulfill contracts with certain customers and to balance supply. Purchased gas revenues were $34$50 million for the threesix months ended March 31,June 30, 2021 compared to $26$47 million for the threesix months ended March 31,June 30, 2020. Purchased gas costs were $33$47 million for the threesix months ended March 31,June 30, 2021 compared to $25$45 million for the threesix months ended March 31,June 30, 2020. The period-to-period increase in purchased gas revenue was due to an increase in averages sales price, offset in part by a decrease in purchased gas sales volumes.
For the Three Months Ended March 31, For the Six Months Ended June 30,
20212020VariancePercent Change20212020VariancePercent Change
Purchased Gas Sales Volumes (in Bcf)Purchased Gas Sales Volumes (in Bcf)10.8 14.4 (3.6)(25.0)%Purchased Gas Sales Volumes (in Bcf)16.7 27.5 (10.8)(39.3)%
Average Sales Price (per Mcf)Average Sales Price (per Mcf)$3.11 $1.83 $1.28 69.9 %Average Sales Price (per Mcf)$3.01 $1.70 $1.31 77.1 %
Purchased Gas Average Cost (per Mcf)Purchased Gas Average Cost (per Mcf)$3.01 $1.74 $1.27 73.0 %Purchased Gas Average Cost (per Mcf)$2.81 $1.64 $1.17 71.3 %

Other Operating Income
For the Three Months Ended March 31,For the Six Months Ended June 30,
(in millions)(in millions)20212020VariancePercent Change(in millions)20212020VariancePercent Change
Equity in Earnings of Affiliates$1 $— $1 100.0 %
Equity Income (Loss) from AffiliatesEquity Income (Loss) from Affiliates$2 $(1)$3 300.0 %
Excess Firm Transportation IncomeExcess Firm Transportation Income3 3 — — %Excess Firm Transportation Income6 6 — — %
Water IncomeWater Income2 2 — — %Water Income4 4 — — %
Other— 1 (1)(100.0)%
Total Other Operating IncomeTotal Other Operating Income$6 $6 $— — %Total Other Operating Income$12 $9 $3 33.3 %

•Equity in earnings ofincome (loss) from affiliates primarily represents CNX's share of earnings from a 50% interest in a power plant located within CNX’s CBM field. Power generated from the facility is sold into wholesale electricity markets during times of peak energy

3749

times of peak energy consumption. Due to the plant consuming coal mine methane gas, the plant qualifies for Pennsylvania Tier I Renewable Energy Credits.
•Excess firm transportation income represents revenue from the sale of excess firm transportation capacity to third-parties. The Company obtains firm pipeline transportation capacity to enable gas production to flow uninterrupted as sales volumes increase. In order to minimize this unutilized firm transportation expense, CNX is able to release (sell) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue from released capacity helps offset the unutilized firm transportation and processing fees in total other operating expense.

Impairment of Exploration and Production Properties

During the threesix months ended March 31,June 30, 2020, CNX recognized certain indicators of impairments specific to our SWPA CBM asset group and determined that the carrying value of that asset group was not recoverable. The fair value of the asset group was estimated by discounting the estimated future cash flows using discount rates and other assumptions that market participants would use in their estimates of fair value. As a result, an impairment of $62 million was recognized and is included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income for the threesix months ended March 31,June 30, 2020. The impairment was related to an economic decision to temporarily idle certain wells and the related processing facility during the first quarter. See Note 5 - Property, Plant and Equipment in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. No such impairment occurred in the current period.

Impairment of Goodwill

In connection with the Midstream Acquisition that occurred in January 2018, CNX recorded $796 million of goodwill.

Goodwill is tested for impairment annually during the fourth quarter, or more frequently if recent events or prevailing conditions indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount using the qualitative assessment, a quantitative impairment test is performed. From time to time, CNX may also bypass the qualitative assessment and proceed directly to the quantitative impairment test.

In connection with CNX's assessment of goodwill in the first quarter of 2020 in relation to the deteriorating macroeconomic conditions, and the decline in the observable market value of CNXM securities both in relation to the COVID-19 pandemic and the overall decline in the MLP market space, CNX bypassed the qualitative assessment and performed a quantitative test that utilized a combination of the income and market approaches to estimate the fair value of the Midstream reporting unit. As a result of this assessment, CNX concluded that the carrying value exceed its estimated fair value, and as a result, an impairment of $473 million was included in Impairment of Goodwill in the Consolidated Statements of Income for the threesix months ended March 31,June 30, 2020. See Note 6 - Goodwill and Other Intangible Assets in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information. No such impairment occurred in the current period.

Exploration and Production Related Other Costs

For the Three Months Ended March 31, For the Six Months Ended June 30,
(in millions)(in millions)20212020VariancePercent Change(in millions)20212020VariancePercent Change
Lease Expiration CostsLease Expiration Costs$1 $2 $(1)(50.0)%Lease Expiration Costs$3 $4 $(1)(25.0)%
Permitting ExpensePermitting Expense1 2 (1)(50.0)%
Land RentalsLand Rentals1 1 — — %Land Rentals1 1 — — %
Other— 1 (1)(100.0)%
Total Exploration and Production Related Other CostsTotal Exploration and Production Related Other Costs$2 $4 $(2)(50.0)%Total Exploration and Production Related Other Costs$5 $7 $(2)(28.6)%

•Lease expiration costs relate to leases where the primary term expired or will expire within the next 12 months.









50

Selling, General and Administrative ("SG&A")

SG&A costs include costs such as overhead, including employee labor and benefit costs, short-term incentive compensation, costs of maintaining our headquarters, audit and other professional fees, and legal compliance expenses. SG&A costs also include non-cash long-term equity-based compensation expense.

For the Six Months Ended June 30,
(in millions)20212020VariancePercent Change
Salaries, Wages and Employee Benefits$13 $15 $(2)(13.3)%
Short-Term Incentive Compensation5 5 — — %
Long-Term Equity-Based Compensation (Non-Cash)11 9 2 22.2 %
Other23 25 (2)(8.0)%
Total SG&A$52 $54 $(2)(3.7)%

38•Salaries, wages and employee benefits decreased in the period-to-period comparison primarily due to lower employee related expenses.

•Long-term equity-based compensation (non-cash) increased in the period-to-period to comparison due to an increase in equity awards.
For the Three Months Ended March 31,
(in millions)20212020VariancePercent Change
Salaries, Wages and Employee Benefits$7 $8 $(1)(12.5)%
Long-Term Equity-Based Compensation (Non-Cash)8 7 1 14.3 %
Short-Term Incentive Compensation3 2 1 50.0 %
Other10 13 (3)(23.1)%
Total SG&A$28 $30 $(2)(6.7)%
•Other decreased in the period-to-period comparison primarily due to a decrease in professional services expense.

Other Operating Expense
For the Three Months Ended March 31, For the Six Months Ended June 30,
(in millions)(in millions)20212020VariancePercent Change(in millions)20212020VariancePercent Change
Idle Equipment and Service ChargesIdle Equipment and Service Charges$— $3 $(3)(100.0)%Idle Equipment and Service Charges$— $6 $(6)(100.0)%
Unutilized Firm Transportation and Processing FeesUnutilized Firm Transportation and Processing Fees28 34 (6)(17.6)%
Insurance ExpenseInsurance Expense— 1 (1)(100.0)%Insurance Expense1 1 — — %
Unutilized Firm Transportation and Processing Fees14 13 1 7.7 %
OtherOther2 4 (2)(50.0)%Other2 6 (4)(66.7)%
Total Other Operating ExpenseTotal Other Operating Expense$16 $21 $(5)(23.8)%Total Other Operating Expense$31 $47 $(16)(34.0)%

•Idle equipment and service charges relates to the temporary idling of certain of the Company's natural gas drilling rigs as well as related equipment and other services that may be needed in the natural gas drilling and completions process. The decrease of $3 million in the period-to-period comparison was the result of onetwo of CNX's drilling rigs being idled in the prior period.
•Unutilized firm transportation and processing fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs. In some instances, the Company may have the opportunity to realize more favorable net pricing by strategically choosing to sell natural gas into a market or to a customer that does not require the use of the Company’s own firm transportation capacity. Such sales would result in an increase in unutilized firm transportation expense. The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial. The revenue received when this capacity is released (sold) is included in Excess Firm Transportation Income above. The decrease in the period-to-period comparison was primarily due to an increase in utilization of firm transportation capacity in the current year due to production increases in 2021 compared to 2020.

Other Expense
 For the Three Months Ended March 31,
 (in millions)20212020VariancePercent Change
Other Income
Other$1 $2 $(1)(50.0)%
Total Other Income$1 $2 $(1)(50.0)%
Other Expense
Professional Services$1 $3 $(2)(66.7)%
Bank Fees3 3 — — %
Other Corporate Expense2 1 1 100.0 %
Total Other Expense$6 $7 $(1)(14.3)%
       Total Other Expense$5 $5 $— — %


•
Professional services decreased $2 million in the period-to-period comparison primarily due to fees related to an agreement to eliminate CNXM's incentive distribution rights, or IDRs, in January of 2020, prior to the Merger.











51

Other Expense
 For the Six Months Ended June 30,
 (in millions)20212020VariancePercent Change
Other Income
Right-of-Way Sales$1 $1 $— — %
Other1 2 (1)(50.0)%
Total Other Income$2 $3 $(1)(33.3)%
Other Expense
Professional Services$3 $5 $(2)(40.0)%
Bank Fees6 6 — — %
Other Corporate Expense3 2 1 50.0 %
Total Other Expense$12 $13 $(1)(7.7)%
       Total Other Expense$10 $10 $— — %

Gain on Asset Sales and Abandonments, net

A gain on asset sales of $3$10 million related to the sale of various non-core assets was recognized in the threesix months ended March 31,June 30, 2021 compared to a gain of $12$18 million in the threesix months ended March 31,June 30, 2020.

39

Gain on Debt Extinguishment

A gain on debt extinguishment of $11 million was recognized in the threesix months ended March 31,June 30, 2020. During the threesix months ended March 31,June 30, 2020, CNX purchased $71$481 million of its 5.875% senior notes due in April 2022 at an average price equal to 83.9%97.5% of the principal amount. No such purchases were made in the current period. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Interest Expense
For the Three Months Ended March 31,For the Six Months Ended June 30,
(in millions)(in millions)20212020VariancePercent Change(in millions)20212020VariancePercent Change
Total Interest ExpenseTotal Interest Expense$36 $49 $(13)(26.5)%Total Interest Expense$76 $95 $(19)(20.0)%

•The $13$19 million decrease was primarily due to the purchase of the remaining $894 million of the 5.875% senior notes due in April 2022 during the year ended December 31, 2020, as well as lower borrowings on the CNX senior secured revolving credit facility ("Credit Facility")Facility and higher unrealized gains on interest rate swap agreements. These decreases were offset in part by interest related to the addition of $345 million of Convertible Senior Notes due 2026, the $125 million non-revolving credit facility agreement entered into by CNX’s wholly-owned Cardinal States Gathering Company LLC (the "Cardinal States Facility”), the $50 million non-revolving credit facility agreement entered into by CNX's wholly-owned subsidiary CSG Holdings II LLC (the “CSG Holdings Facility”), $500 million of senior notes due 2029, and $200 million of senior notes due 2027. The amortization of debt discount in connection with the Convertible Senior Notes also contributed to an increase. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.

Income Taxes
For the Three Months Ended March 31, For the Six Months Ended June 30,
(in millions)(in millions)20212020VariancePercent Change(in millions)20212020VariancePercent Change
Total Company Earnings (Loss) Before Income Tax$135 $(458)$593 129.5 %
Income Tax Expense (Benefit)$37 $(153)$190 124.2 %
Total Company Loss Before Income TaxTotal Company Loss Before Income Tax$(311)$(617)$306 49.6 %
Income Tax BenefitIncome Tax Benefit$(55)$(181)$126 69.6 %
Effective Income Tax RateEffective Income Tax Rate27.6 %33.3 %(5.7)%Effective Income Tax Rate17.6 %29.4 %(11.8)%

The effective income tax rate was 27.6%17.6% for the threesix months ended March 31,June 30, 2021 compared to 33.3%29.4% for the threesix months ended March 31,June 30, 2020. The effective rate for the threesix months ended March 31,June 30, 2021 differs from the U.S. federal statutory rate of 21% primarily due to the impact of equity compensation and state income taxes. The effective rate for the threesix months ended March 31,June 30, 2020 differs from the U.S. federal statutory rate of 21% primarily due to the impact of noncontrolling interest, equity

52

compensation, and state income taxes.

Seetaxes (See Note 4 - Income Taxes in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.information).

40

Liquidity and Capital Resources

CNX generally has satisfied its working capital requirements and funded its capital expenditures and debt service obligations with cash generated from operations and proceeds from borrowings. CNX currently believes that cash generated from operations, asset sales and the Company's borrowing capacity will be sufficient to meet the Company's working capital requirements, anticipated capital expenditures (other than major acquisitions), scheduled debt payments, anticipated dividend payments, if any, and to provide required letters of credit for the current fiscal year. Nevertheless, the ability of CNX to satisfy its working capital requirements, to service its debt obligations, to fund planned capital expenditures, or to pay dividends will depend upon future operating performance, which will be affected by prevailing economic conditions in the natural gas industry and other financial and business factors, including the current COVID 19 pandemic, some of which are beyond CNX’s control.
From time to time, CNX is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations. CNX sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.
CNX continuously reviews its liquidity and capital resources. If market conditions were to change, for instance due to a significant decline in commodity prices or due to the uncertainty created by the COVID-19 pandemic, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced.
As of March 31,June 30, 2021, CNX was in compliance with all of its debt covenants. After considering the potential effect of a significant decline in commodity prices, as well as the uncertainty created by the COVID-19 pandemic on its operations, CNX currently expects to remain in compliance with its debt covenants.

In order to manage the market risk exposure of volatile natural gas prices in the future, CNX enters into various physical natural gas supply transactions with both gas marketers and end users for terms varying in length. CNX also enters into various financial natural gas swap transactions to manage the market risk exposure to in-basin and out-of-basin pricing. The fair value of these contracts was a net assetliability of $149$380 million at March 31,June 30, 2021 and a net asset of $118 million at December 31, 2020. The Company has not experienced any issues of non-performance by derivative counterparties.
CNX frequently evaluates potential acquisitions. CNX has historically funded acquisitions with cash generated from operations and a variety of other sources, depending on the size of the transaction, including debt and equity financing. There can be no assurance that additional capital resources, including debt and equity financing, will be available to CNX on terms which CNX finds acceptable, or at all.

Cash Flows (in millions)
 For the Three Months Ended March 31,
 20212020Change
Cash Provided by Operating Activities$220 $267 $(47)
Cash Used in Investing Activities$(118)$(138)$20 
Cash Used in Financing Activities$(87)$(108)$21 
 For the Six Months Ended June 30,
 20212020Change
Cash Provided by Operating Activities$459 $411 $48 
Cash Used in Investing Activities$(240)$(261)$21 
Cash Used in Financing Activities$(195)$(141)$(54)

Cash flows from operating activities changed in the period-to-period comparison primarily due to the following items:

•Net income increased $403$180 million in the period-to-period comparison.
•Adjustments to reconcile net income to cash provided by operating activities primarily consisted of a $473 million impairment of goodwill and a $62 million impairment of exploration and production properties in the prior year, a $137$70 million change in deferred income taxes, a $67$256 million net change in commodity derivative instruments, a $9 million decrease in gain on asset sales and abandonments, net, and an $11 million decrease in the gain on debt extinguishment.

Cash flows from investing activities changed in the period-to-period comparison primarily due to the following items:

•Capital expenditures decreased $29$35 million in the period-to-period comparison primarily due to decreased expenditures in the Shale segment resulting from decreased drilling and completions andactivity as well as decreased midstream activity.

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•Proceeds from asset sales decreased $9$14 million mainly due to decreased surface sales and oil and gas assignment sales in the threesix months ended March 31,June 30, 2021.


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Cash flows from financing activities changed in the period-to-period comparison primarily due to the following items:

•During the threesix months ended March 31,June 30, 2020, CNX paid $60$469 million to purchase $71$481 million of the Senior Notessenior notes due Aprilin 2022 at 83.9%97.5% of the principal amount. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
•In the threesix months ended March 31,June 30, 2021, there were $54$131 million of net payments on the CNXM Credit Facility compared to $35$7 million of net proceeds during the threesix months ended March 31,June 30, 2020.
•In the threesix months ended March 31,June 30, 2021, there were $1 million of net payments on the CNX Credit Facility compared to $224$111 million of net payments during the threesix months ended March 31,June 30, 2020.
•In the threesix months ended March 31,June 30, 2021, there were $6$13 million of net payments on the Cardinal States Facility and CSG Holdings Facility compared to $173$170 million of net proceeds in the threesix months ended March 31,June 30, 2020. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
•During the threesix months ended March 31,June 30, 2020, CNX received proceeds of $335 million from the issuance of Convertible Notes due in 2026. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
•During the six months ended June 30, 2020, CNX paid $36 million for capped call transactions related to the issuance of the Convertible Notes as mentioned above. See Note 9 - Long-Term Debt in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information.
•During the six months ended June 30, 2020, there were $17$21 million of payments to CNXM noncontrolling interest holders compared to no payments during the threesix months ended March 31,June 30, 2021 due to the Merger with CNXM (See Note 13 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information).
•During the threesix months ended March 31,June 30, 2021, CNX repurchased $24$47 million of its common stock on the open market compared to no purchases in the threesix months ended March 31,June 30, 2020.
•Debt issuance and financing fees decreased $10$11 million primarily due to the fees associated with the borrowings on the Cardinal States Facility and CSG Holdings Facility as well as the issuance of the Convertible Notes during the threesix months ended March 31,June 30, 2020.

The following is a summary of the Company's significant contractual obligations at March 31,June 30, 2021 (in thousands):
 Payments due by Year
 Less Than
1 Year		1-3 Years3-5 YearsMore Than
5 Years		Total
Purchase Order Firm Commitments$646 $808 $— $— $1,454 
Gas Firm Transportation and Processing264,757 434,151 404,364 1,064,814 2,168,086 
Long-Term Debt22,055 48,007 838,936 1,485,179 2,394,177 
Interest on Long-Term Debt135,801 259,533 238,205 147,032 780,571 
Finance Lease Obligations5,139 795 132 29 6,095 
Interest on Finance Lease Obligations150 43 6 1 200 
Operating Lease Obligations52,500 11,413 6,936 21,616 92,465 
Interest on Operating Lease Obligations3,131 3,539 2,724 3,198 12,592 
Long-Term Liabilities—Employee Related (a)2,004 4,176 4,474 34,789 45,443 
Other Long-Term Liabilities (b)234,259 10,000 10,000 62,689 316,948 
Total Contractual Obligations (c)$720,442 $772,465 $1,505,777 $2,819,347 $5,818,031 
 Payments due by Year
 Less Than
1 Year		1-3 Years3-5 YearsMore Than
5 Years		Total
Purchase Order Firm Commitments$665 $1,077 $— $— $1,742 
Gas Firm Transportation and Processing265,690 438,562 403,228 1,037,719 2,145,199 
Long-Term Debt23,098 368,028 688,250 1,234,551 2,313,927 
Interest on Long-Term Debt133,224 252,734 237,015 142,450 765,423 
Finance Lease Obligations406 743 91 20 1,260 
Interest on Finance Lease Obligations21 37 3 — 61 
Operating Lease Obligations47,198 8,855 6,993 20,721 83,767 
Interest on Operating Lease Obligations2,740 3,434 2,629 2,912 11,715 
Long-Term Liabilities—Employee Related (a)2,026 4,232 4,563 34,340 45,161 
Other Long-Term Liabilities (b)565,736 10,000 10,000 61,903 647,639 
Total Contractual Obligations (c)$1,040,804 $1,087,702 $1,352,772 $2,534,616 $6,015,894 
 _________________________
(a)Employee related long-term liabilities include salaried retirement contributions and work-related injuries and illnesses.
(b)Other long-term liabilities include royalties, commodity derivative instruments and other long-term liability costs.
(c)The table above does not include obligations to taxing authorities due to the uncertainty surrounding the ultimate settlement of amounts and timing of these obligations.


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Debt
At March 31,June 30, 2021, CNX had total long-term debt of $2,394$2,314 million, including the current portion of long-term debt of $22$23 million and excluding unamortized debt issuance costs. This long-term debt consisted of:
•An aggregate principal amount of $700 million of 7.25% Senior Notes due March 2027 plus $7$6 million of unamortized bond premium. Interest on the notes is payable March 14 and September 14 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner) or CSG Holdings III LLC.
•An aggregate principal amount of $500 million of 6.00% Senior Notes due January 2029. Interest on the notes is payable January 15 and July 15 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner) or CSG Holdings III LLC.
•An aggregate principal amount of $400 million of 6.50% Senior Notes due March 2026 issued by CNXM, less $4 million of unamortized bond discount. Interest on the notes is payable March 15 and September 15 of each year. Payment of the principal and interest on the notes is guaranteed by certain of CNXM's subsidiaries. CNX is not a guarantor of these notes.
•An aggregate principal amount of $345 million of 2.25% SeniorConvertible Notes due May 2026, unless earlier redeemed, repurchased, or converted, less $104$100 million of unamortized bond discount and issuance costs. Interest on the notes is payable May 1 and November 1 of each year. Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner) or CSG Holdings III LLC.
•An aggregate principal amount of $237$160 million in outstanding borrowings under the CNXM Credit Facility. CNX is not a guarantor of CNXM's Credit Facility.
•An aggregate principal amount of $160 million in outstanding borrowings under the CNX Credit Facility. CNXM (or its subsidiaries or general partner) is not a guarantor of CNX's Credit Facility.
•An aggregate principal amount of $111$108 million in outstanding borrowings under the Cardinal States Facility, less $1 million of unamortized discount. Interest and a portion of the obligation are paid quarterly.
•An aggregate principal amount of $43$40 million in outstanding borrowings under the CSG Holdings Facility, less a nominal unamortized discount. Interest and a portion of the obligation are paid quarterly.

Total Equity and Dividends
CNX had total equity of $4,510$4,137 million at March 31,June 30, 2021 compared to $4,422 million at December 31, 2020. See the Consolidated Statements of Stockholders' Equity in Item 1 of this Form 10-Q for additional details.
On September 28, 2020, the Merger of CNXM was completed (See Note 13 - Acquisitions and Dispositions in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional information). CNX accounted for the change in our ownership interest in CNXM as an equity transaction which was reflected as a reduction of noncontrolling interest with corresponding increases to common stock and capital in excess of par value.
The declaration and payment of dividends by CNX is subject to the discretion of CNX's Board of Directors, and no assurance can be given that CNX will pay dividends in the future. CNX suspended its quarterly dividend in March 2016 to further reflect the Company's increased emphasis on growth at that time. The determination to pay dividends in the future will depend upon, among other things, general business conditions, CNX's financial results, contractual and legal restrictions regarding the payment of dividends by CNX, planned investments by CNX, and such other factors as the Board of Directors deems relevant. CNX's Credit Facility limits its ability to pay dividends in excess of an annual rate of $0.10 per share when the Company's net leverage ratio exceeds 3.00 to 1.00 and is subject to availability under the Credit Facility of at least 15% of the aggregate commitments. The net leverage ratio was 2.562.50 to 1.00 at March 31,June 30, 2021. The Credit Facility does not permit dividend payments in the event of default. The indentures to the 7.25% Senior Notes due March 2027 and the 6.00% Senior Notes due January 2029 limit dividends to $0.50 per share annually unless several conditions are met. These conditions include no defaults, ability to incur additional debt and other payment limitations under the indentures. There were no defaults in the threesix months ended March 31,June 30, 2021.
Off-Balance Sheet Transactions

CNX does not maintain off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources which are not disclosed in the Notes to the Unaudited Consolidated Financial Statements. CNX uses a combination of surety bonds, corporate guarantees and letters of credit to secure the Company's financial obligations for employee-related, environmental, performance and various other items which are not reflected in the Consolidated Balance Sheet at March 31,June 30,

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2021. Management believes these items will expire without being funded. See Note 10 - Commitments and Contingent Liabilities in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for additional details of the various financial guarantees that have been issued by CNX.

Forward-Looking Statements

We are including the following cautionary statement in this Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q are forward-looking statements (as defined in Section 21E of 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. The 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 Quarterly Report on Form 10-Q speak only as of the date of this Quarterly Report on Form 10-Q; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. 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;
•unsuccessful drilling efforts or continued natural gas price decreases requiring write downs of our proved natural gas properties, or changes in assumptions impacting management’s estimates of future financial results as well as other assumptions such as movement in our stock price, weighted-average cost of capital, terminal growth rates and industry multiples, could cause goodwill and other intangible assets we hold to become impaired and result in material non-cash charges to earnings;
•a loss of our competitive position because of the competitive nature of the natural gas industry, consolidation within the industry or overcapacity in the industry adversely affecting our ability to sell our products and midstream services;
•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;
•negative public perception regarding our Company or industry could have an adverse effect on our operations, financial results or stock price;
•events beyond our control, including a global or domestic health crisis;
•dependence on gathering, processing and transportation facilities and other midstream facilities owned by others, and disruption of, capacity constraints in, or proximity to pipeline, and any decrease in availability of pipelines or other midstream facilities;
•uncertainties in estimating our economically recoverable natural gas reserves and inaccuracies in our estimates;
•the high-risk nature of drilling, developing and operating 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 development or drilling;
•the substantial capital expenditures required for our development and exploration projects, as well as midstream system development;
•decreases in the availability of, or increases in the price of, required personnel, services, equipment, parts and raw materials in sufficient quantities or at reasonable costs to support our operations;
•our ability to find adequate water sources for our use in shale gas drilling and production operations, or our ability to dispose of, transport or recycle water used or removed in connection with our gas operations at a reasonable cost and within applicable environmental rules;
•failure to successfully estimate the rate of decline of existing reserves or to find or acquire economically recoverable natural gas reserves to replace our current natural gas reserves;
•losses incurred as a result of title defects in the properties in which we invest or the loss of certain leasehold or other rights related to our midstream activities;

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•the impact of climate change legislation, litigation and potential, as well as any adopted, environmental regulations, including those relating to greenhouse gas emissions;
•environmental regulations can increase costs and introduce uncertainty that could adversely impact the market for natural gas with potential short and long-term liabilities;
•existing and future government laws, regulations and other legal requirements and judicial decisions 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 operations and related increase in the regulation of natural gas gathering pipelines;
•changes in federal or state income tax laws or rates;
•the outcomes of various legal proceedings, including those which are more fully described in our reports filed under the Exchange Act;
•risks associated with our current long-term debt obligations;
•a decrease in our borrowing base, which could decrease for a variety of reasons including lower natural gas prices, declines in natural gas proved reserves, asset sales and lending requirements or regulations;
•Risks associated with our convertible senior notesConvertible Notes due May 2026, (the “Convertible Notes”), including the potential impact that the Convertible Notes may have on our reported financial results, potential dilution, our ability to raise funds to repurchase the Convertible Notes, and that provisions of the Convertible Notes could delay or prevent a beneficial takeover of the Company;
•the potential impact of the capped call transaction undertaken in tandem with the Convertible Notes issuance, including counterparty risk;
•challenges associated with strategic determinations, including the allocation of capital and other resources to strategic opportunities;
•acquisitions and divestitures, we anticipate may not occur or produce anticipated benefits;
•there is no guarantee that we will continue to repurchase shares of our common stock under our current or any future share repurchase program at levels undertaken previously or at all;
•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;
•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 may be allocated responsibility;
•cyber-incidents could have a material adverse effect on our business, financial condition or results of operations;
•our success depends on key members of our management and our ability to attract and retain experienced technical and other professional personnel;
•terrorist activities could materially adversely affect our business and results of operations; and
•certain other factors addressed in this report and in our 2020 Form 10-K under “Risk Factors”.

Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the “Risk Factors” and “Forward-Looking Statements” sections of our Annual Report 2020 Form 10-K and subsequent Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.


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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In addition to the risks inherent in operations, CNX is exposed to financial, market, political and economic risks. The following discussion provides additional detail regarding CNX's exposure to the risks of changing commodity prices, interest rates and foreign exchange rates.

CNX is exposed to market price risk in the normal course of selling natural gas and liquids. CNX uses fixed-price contracts, options and derivative commodity instruments (over-the-counter swaps) to minimize exposure to market price volatility in the sale of natural gas. Under our risk management policy, it is not our intent to engage in derivative activities for speculative purposes. Typically, CNX “sells” swaps under which it receives a fixed price from counterparties and pays a floating market price. In order to enhance production flexibility, during the first quarter of 2021, CNX purchased, rather than sold, financial swaps for the period April through October of 2021 under which CNX will pay a fixed price to and receive a floating price from its hedge counterparties.

CNX has established risk management policies and procedures to strengthen the internal control environment of the marketing of commodities produced from its asset base. All of the derivative instruments without other risk assessment procedures are held for purposes other than trading. They are used primarily to mitigate uncertainty and volatility and cover underlying exposures. The Company's market risk strategy incorporates fundamental risk management tools to assess market price risk and establish a framework in which management can maintain a portfolio of transactions within predefined risk parameters.

CNX believes that the use of derivative instruments, along with our risk assessment procedures and internal controls, mitigates our exposure to material risks. The use of derivative instruments without other risk assessment procedures could materially affect the Company's results of operations depending on market prices; however, we believe that use of these instruments will not have a material adverse effect on our financial position or liquidity due to our risk assessment procedures and internal controls.

For a summary of accounting policies related to derivative instruments, see Note 1—Significant Accounting Policies in the Notes to the Audited Consolidated Financial Statements in Item 8 of CNX's 2020 Form 10-K.

At March 31,June 30, 2021 our open gas derivative instruments were in a net liability position with a fair value of $380 million, and at December 31, 2020 our open gas derivative instruments were in a net asset position with a fair value of $149 million and $118 million, respectively.million. A sensitivity analysis has been performed to determine the incremental effect on future earnings related to open derivative instruments at March 31,June 30, 2021 and December 31, 2020. A hypothetical 10 percent increase in future natural gas prices would have decreased the fair value by $382$551 million and $362 million at March 31,June 30, 2021 and December 31, 2020, respectively. A hypothetical 10 percent decrease in future natural gas prices would have increased the fair value by $385$559 million and $366 million at March 31,June 30, 2021 and December 31, 2020, respectively.
CNX's interest expense is sensitive to changes in the general level of interest rates in the United States. The Company uses derivative instruments to manage risk related to interest rates. These instruments change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. At March 31,June 30, 2021 and December 31, 2020, CNX had $1,977$1,970 million and $1,980 million, respectively, aggregate principal amount of debt outstanding under fixed-rate instruments, including unamortized debt issuance costs of $26$25 million and $27 million, respectively. At March 31,June 30, 2021 and December 31, 2020, CNX had $397$320 million and $452 million, respectively, of debt outstanding under variable-rate instruments. CNX’s primary exposure to market risk for changes in interest rates relates to our Credit Facility, under which there were $160 million of borrowings at March 31,June 30, 2021 and $161 million at December 31, 2020, and CNXM's revolving credit facility, under which there were $237$160 million of borrowings at March 31,June 30, 2021 and $291 million at December 31, 2020. A hypothetical 100 basis-point increase in the average rate for CNX's variable-rate instruments would decrease pre-tax future earnings as of March 31,June 30, 2021 and December 31, 2020 by $4$3 million and $5 million, respectively, on an annualized basis.

All of the Company’s transactions are denominated in U.S. dollars and, as a result, it does not have material exposure to currency exchange-rate risks.









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Natural Gas Hedging Volumes

As of AprilJuly 7, 2021, the Company's hedged volumes for the periods indicated are as follows:
 For the Three Months Ended 
 March 31,June 30,September 30,December 31,Total Year
2021 Fixed Price Volumes*
Hedged BcfN/A125.0 128.5 131.6 385.1 
Weighted Average Hedge Price per McfN/A$2.44 $2.44 $2.50 $2.46 
2022 Fixed Price Volumes
Hedged Bcf104.2 101.1 102.2 102.2 402.4**
Weighted Average Hedge Price per Mcf$2.41 $2.33 $2.33 $2.33 $2.34 
2023 Fixed Price Volumes
Hedged Bcf71.1 71.7 72.4 72.4 287.6 
Weighted Average Hedge Price per Mcf$2.22 $2.17 $2.17 $2.18 $2.19 
2024 Fixed Price Volumes
Hedged Bcf68.5 65.5 66.3 66.2 266.5 
Weighted Average Hedge Price per Mcf$2.28 $2.22 $2.22 $2.22 $2.24 
2025 Fixed Price Volumes
Hedged Bcf29.5 29.9 30.2 30.2 119.8 
Weighted Average Hedge Price per Mcf$2.08 $2.08 $2.08 $2.08 $2.08 
2026 Fixed Price Volumes
Hedged Bcf9.6 9.6 9.6 9.5 38.3 
Weighted Average Hedge Price per Mcf$2.03 $2.02 $2.02 $2.02 $2.02 
 For the Three Months Ended 
 March 31,June 30,September 30,December 31,Total Year
2021 Fixed Price Volumes*
Hedged BcfN/AN/A128.4 132.2 260.6 
Weighted Average Hedge Price per McfN/AN/A$2.44 $2.50 $2.47 
2022 Fixed Price Volumes
Hedged Bcf119.9 116.4 117.6 117.6 471.5 
Weighted Average Hedge Price per Mcf$2.61 $2.38 $2.38 $2.39 $2.44 
2023 Fixed Price Volumes
Hedged Bcf79.1 85.8 86.8 86.8 320.1**
Weighted Average Hedge Price per Mcf$2.22 $2.21 $2.21 $2.22 $2.18 
2024 Fixed Price Volumes
Hedged Bcf78.3 75.4 76.2 76.2 306.1 
Weighted Average Hedge Price per Mcf$2.26 $2.22 $2.22 $2.22 $2.23 
2025 Fixed Price Volumes
Hedged Bcf45.3 45.8 46.3 46.3 183.7 
Weighted Average Hedge Price per Mcf$2.12 $2.12 $2.12 $2.12 $2.12 
2026 Fixed Price Volumes
Hedged Bcf33.2 33.5 33.8 33.8 134.3 
Weighted Average Hedge Price per Mcf$2.49 $2.49 $2.49 $2.49 $2.49 
2027 Fixed Price Volumes
Hedged Bcf4.34.34.34.317.2
Weighted Average Hedge Price per Mcf$2.46 $2.46 $2.45 $2.45 $2.45 
*Excludes purchased swaps. The Company's purchased swaps are as follows:

For the Three Months EndedFor the Three Months Ended
June 30,September 30,December 31,September 30,December 31,
Purchased Basis SwapsPurchased Basis Swaps202120212021Total YearPurchased Basis Swaps20212021Total Year
Hedged BcfHedged Bcf$10.0 $10.1 $3.4 $23.5 Hedged Bcf$10.1 $3.4 $13.5 
Weighted Average Fixed Price per McfWeighted Average Fixed Price per Mcf$(0.78)$(0.78)$(0.78)$(0.78)Weighted Average Fixed Price per Mcf$(0.78)$(0.78)$(0.78)
**Quarterly volumes do not add to annual volumes inasmuch as a discrete condition in individual quarters, where basis hedge volumes exceed NYMEX hedge volumes, does not exist for the year taken as a whole.

ITEM 4.CONTROLS AND PROCEDURES

Disclosure controls and procedures. CNX, under the supervision and with the participation of its management, including CNX’s principal executive officer and principal financial officer, evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, CNX’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures are effective as of March 31,June 30, 2021 to ensure that information required to be disclosed by CNX in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by CNX in such reports is accumulated and communicated to CNX’s management, including CNX’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal controls over financial reporting. There were no changes in the Company's internal controls over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.





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PART II: OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS
The first and second paragraph of Note 10—Commitments and Contingent Liabilities in the Notes to the Unaudited Consolidated Financial Statements included in Item 1 of this Form 10-Q is incorporated herein by reference.

From time to time, CNX and federal, state, and local regulatory agencies that oversee CNX’s activities enter into agreements regarding notices of noncompliance. CNX is currently not aware of any significant legal or governmental proceedings contemplated to be brought against us, under the various environmental protection statutes to which the Company is subject to, that would have a material effect on future financial results.

ITEM 1A.     RISK FACTORS
The financial conditions and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in “Item 1A. Risk Factors” in CNX's 2020 Form 10-K. The risks described could materially and adversely affect CNX's business, financial condition, cash flows, and results of operations. CNX may experience additional risks and uncertainties not currently known; or, as a result of developments occurring in the future, conditions that are currently deemed to be immaterial may also materially and adversely affect CNX's business, financial condition, cash flows, and results of operations. There have been no material changes to the Company’s risk factors since the 2020 Form 10-K was filed.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth repurchases of our common stock during the three months ended March 31,June 30, 2021:

ISSUER PURCHASES OF EQUITY SECURITIESISSUER PURCHASES OF EQUITY SECURITIESISSUER PURCHASES OF EQUITY SECURITIES
PeriodPeriod
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (000's omitted)Period
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (000's omitted)
January 1, 2021-
January 31, 2021		986,270 $11.71 852,292 $245,319 
February 1, 2021-
February 28, 2021		822,508 $12.96 594,227 $237,578 
March 1, 2021-
March 31, 2021		18,387 $13.11 17,935 $237,343 
April 1, 2021-
April 30, 2021		April 1, 2021-
April 30, 2021		2,922 $15.30 — $237,343 
May 1, 2021-
May 31, 2021		May 1, 2021-
May 31, 2021		589,218 $13.70 589,218 $229,268 
June 1, 2021-
June 30, 2021		June 1, 2021-
June 30, 2021		1,041,569 $14.00 1,041,569 $214,686 
TotalTotal1,827,165 1,464,454 Total1,633,709 1,630,787 

(1) Includes shares withheld from employees to satisfy minimum tax withholding obligations associated with the vesting of restricted stock during the period.
(2) Shares repurchased as part of the Company's current $900 million share repurchase program authorized by the Board of Directors, which is not subject to an expiration date. See Note 15 - Stock Repurchase in the Notes to the Unaudited Consolidated Financial Statements in Item 1 of this Form 10-Q for more information.

See Part III. Item 12. "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" included in CNX Resources Corporation's 2020 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 9, 2021 for information relating to CNX's equity compensation plans.









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ITEM 6.EXHIBITS
10.1 10.1*
Change in Control SeveranceAmendment No. 5, dated as of April 27, 2021, to the Second Amended and Restated Credit Agreement, dated as of February 4, 2021, as amended,March 8, 2018, by and betweenamong the Company, the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as syndication agent, and Alexander Reyes, filed herewith.PNC Bank, National Association, as administrative agent and collateral agent.
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*  
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2   
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSXBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.
* Filed herewith

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: AprilJuly 29, 2021
CNX RESOURCES CORPORATION
By:  
/S/  NICHOLAS J. DEIULIIS    
 Nicholas J. DeIuliis
 Director, Chief Executive Officer and President
(Duly Authorized Officer and Principal Executive Officer)
By:  
/S/    DONALD W. RUSH    
 Donald W. Rush
 Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
By:  
/S/    ALAN K. SHEPARD 
 Alan K. Shepard
 Chief Accounting Officer and Vice President
(Duly Authorized Officer and Principal Accounting Officer)
By:
/S/    JASON L. MUMFORD 
Jason L. Mumford
Vice President and Controller


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