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Item 8. Financial Statements and Supplementary Data

2021-02-09 compared with 2020-02-10 · 827 added, 609 removed, 1032 unchanged (58% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of CNX Resources Corporation and Subsidiaries

To the Stockholders and the Board of Directors of CNX Resources Corporation

Opinion on the Financial Statements

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Proved property impairment

Description of the Matter

As more fully described in Note 1 to the consolidated financial statements, during 2019, the Company concluded that its Central Pennsylvania Marcellus asset group was impaired and recognized a $327 million impairment charge.

Proved oil and gas properties are reviewed for impairment whenever events or changes in circumstances indicate that an asset group’s carrying amount may not be recoverable.

Auditing the Company's impairment analysis involved a high degree of subjectivity due to the significant estimation required to determine the fair value of the Central Pennsylvania Marcellus asset group.

In particular, the fair value estimate was sensitive to significant assumptions, including changes in projected revenues, future commodity prices and the weighted average cost of capital, which are affected by expectations about future market and economic conditions.

How We Addressed the Matter in Our Audit

We tested controls that address the risks of material misstatement related to the Company’s proved property impairment review process, including controls over management’s review of the significant assumptions described above.

To test the estimated fair value of the Company’s Central Pennsylvania Marcellus asset group, we performed audit procedures that included, among others, evaluating the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We compared the significant assumptions used by management to current industry and economic trends and evaluated whether changes in those trends would affect the significant assumptions.

We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the asset group that would result from changes in the assumptions.

Issuance of Convertible Senior Notes

Description of the Matter As described in Note 12 to the consolidated financial statements, in April 2020, the Company issued $345.0 million of aggregate principal of 2.25% convertible senior notes due May 2026 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

Additionally, the Company entered into separate capped call transactions to reduce potential dilution to the Company’s common stock upon any conversion of the Convertible Notes.

These transactions are collectively referred to as the Convertible Notes Transactions.

To account for the Convertible Notes, the Company was required to separate the Convertible Notes 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 carrying amount of the equity component was determined by deducting the fair value of the liability component from the principal value of the Convertible Notes.

The equity component 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.

Auditing the Company’s accounting for the Convertible Notes Transactions was complex due to the judgment that was required in determining the balance sheet classification of the elements of the Convertible Notes.

Additionally, a detailed analysis of the terms of the Convertible Notes Transactions was required to determine the existence of any derivatives that may require separate accounting under applicable accounting guidance.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Convertible Notes Transactions.

For example, we tested the Company's controls over the initial recognition and measurement of the Convertible Notes Transactions, including the recording of the associated liability and equity components.

We also tested the evaluation of the Notes and the identification and evaluation of specific features and the related accounting.

To test the initial accounting for the Convertible Notes Transactions, our audit procedures included, among others, inspection of the agreements underlying the Convertible Notes Transactions and testing management’s application of the relevant accounting guidance, including the determination of the balance sheet classification of each transaction and the identification of any derivatives included in the arrangements.

We involved professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the accounting for the convertible notes, including conclusions reached with respect to identification and bifurcation of embedded features.

Valuation of Goodwill

Description of the Matter

At December 31, 2019, the Company’s goodwill was $796.4 million and all goodwill was attributed to a single reporting unit in the Midstream reportable segment.

Description of the Matter At December 31, 2020, the Company’s goodwill was $323.3 million and all goodwill was attributed to the Midstream reporting unit in the Shale segment.

As discussed in Note 9 to the consolidated financial statements, goodwill is tested for impairment at least annually, 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.

Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the significant estimation required to determine the fair value of the Midstream reporting unit.

In particular, the fair value estimate was sensitive to significant assumptions, including changes in projected revenues and the company-specific risk premium component of the weighted average cost of capital, which are affected by expectations about future market, industry and economic conditions.

How We Addressed the Matter in Our Audit

We tested controls that address the risks of material misstatement related to the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.

Auditing management’s annual and interim quantitative goodwill impairment tests was complex and highly judgmental due to the significant estimation required to determine the fair value of the Midstream reporting unit.

In particular, the fair value estimates were sensitive to significant assumptions, including changes in estimated future revenues, which are affected by expectations about future market, industry and economic conditions.

How We Addressed the Matter in Our Audit We tested controls that address the risks of material misstatement related to the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.

To test the estimated fair value of the Company’s midstream reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.

We compared the significant assumptions used by management to current industry and economic trends and evaluated whether changes in those trends would affect the significant assumptions.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

Depreciation, Depletion & Amortization

Description of the Matter

CNX Resources Corporation’s exploration and production (E&P) division includes the production of pipeline quality natural gas for sale primarily to gas wholesalers.

As described in Note 24 to the consolidated financial statements, the net book value of the Company’s E&P assets totaled $6.7 billion at December 31, 2019, and the Company’s E&P division recorded depreciation, depletion and amortization (DD&A) expense of $474.4 million for the year then ended.

As discussed in Note 1, under the successful efforts method of accounting, costs of producing properties (including wells and related equipment and intangible drilling costs) and mineral interests are depleted using the unit-of-production method.

DD&A expense is calculated based on the actual produced sales volumes multiplied by the applicable rate per unit, which is derived by dividing the net capitalized costs by the number of units expected to be produced over the life of the reserves.

As discussed in Note 26, proved oil and natural gas reserve estimates are based on geological and engineering evaluations of in-place hydrocarbon volumes.

The estimates of proved natural gas, natural gas liquids and oil reserves are prepared by internal reserve engineers and are audited by an independent reserve engineering firm.

Auditing the Company’s DD&A is complex and judgmental, as it involves testing the method, inputs and assumptions used in the calculation, including for example, assumptions concerning natural gas prices and operating and development costs.

These assumptions may have a significant effect on the estimation of reserves and the corresponding calculation of DD&A rates.

How We Addressed the Matter in Our Audit

We tested controls that address the risks of material misstatement related to the Company’s process to calculate DD&A, which encompassed the process to estimate proved oil and natural gas reserves, including testing the controls over the data inputs provided to reserve engineers in estimating proved reserve balances used in the DD&A calculations.

We also tested management’s controls over the accuracy and completeness of the data used in the estimate.

Our audit procedures included, among others, testing the completeness and accuracy of underlying financial data used in the estimation of proved reserves, including testing the significant inputs by agreeing them to source documentation.

These inputs include natural gas price assumptions and future operating and development cost assumptions.

Additionally, we assessed the historical accuracy of proved oil and natural gas reserves through analytic procedures and retrospective review analyses.

Description of the Matter As described in Note 1, under the successful efforts method of accounting, depreciation, depletion, and amortization (DD&A) related to proved gas properties is recorded using the units-of-production method.

For the year ended December 31, 2020, the Company recorded DD&A expense related to proved gas properties of $400.8 million.

Proved developed reserves, as estimated by petroleum engineers, are used to calculate depreciation of wells and related equipment and facilities and amortization of intangible drilling costs.

Total proved reserves, also estimated by petroleum engineers, are used to calculate depletion on property acquisitions.

Proved oil and natural gas reserve estimates are based on geological and engineering evaluations of in-place hydrocarbon volumes.

Significant judgment is required by the Company’s internal engineering staff in evaluating geological and engineering data when estimating proved oil and natural gas reserves.

Estimating reserves also requires the selection of inputs, including price and operating, and development cost assumptions as well as tax rates by jurisdiction, among others.

Because of the complexity involved in estimating oil and natural gas reserves, management used independent petroleum engineers to audit the estimates prepared by the Company’s internal engineering staff as of December 31, 2020.

Auditing the Company’s DD&A calculation was especially complex because of the use of the work of the internal engineering staff and the independent petroleum engineers and the evaluation of management’s determination of the inputs described above used by the independent petroleum engineers in estimating proved oil and natural gas reserves.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over its process to calculate DD&A, including management’s controls over the completeness and accuracy of the financial data provided to the independent petroleum engineers for use in estimating the proved oil and natural gas reserves.

Our audit procedures included, among others, evaluating the professional qualifications and objectivity of the individual primarily responsible for overseeing the preparation of the reserve estimates by the internal engineering staff and the independent petroleum engineers used to audit the estimates.

In addition, in assessing whether we can use the work of the independent petroleum engineers, we evaluated the completeness and accuracy of the financial data and inputs described above used by the independent petroleum engineers in estimating proved oil and natural gas reserves by agreeing them to source documentation and we identified and evaluated corroborative and contrary evidence.

For proved undeveloped reserves, we evaluated management’s development plan for compliance with the SEC rule that undrilled locations are scheduled to be drilled within five years, unless specific circumstances justify a longer time, by assessing consistency of the development projections with the Company’s drill plan and the availability of capital relative to the drill plan.

We also tested the mathematical accuracy of the DD&A calculations, including comparing the proved oil and natural gas reserves amounts used to the Company’s reserve report.

/s/ Ernst & Young LLP

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CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

For the Years Ended December 31,

(Dollars in thousands, except per share data) For the Years Ended December 31,

2020 2019 2018

Revenue and Other Operating Income:

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Purchased Gas Revenue 105,792 94,027 65,986

Midstream Revenue

Other Operating Income

Other Revenue and Operating Income 82,459 87,992 116,723

Total Revenue and Other Operating Income 1,257,978 1,922,449 1,730,434

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Purchased Gas Costs

100,902 90,553 64,817

Impairment of Exploration and Production Properties 61,849 327,400 —

Impairment of Goodwill 473,045 — —

Impairment of Unproved Properties and Expirations

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Selling, General and Administrative Costs

109,375 143,550 134,806

Other Operating Expense

85,472 79,255 72,412

Total Operating Expense 1,697,744 1,736,473 1,226,963

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Gain on Previously Held Equity Interest — — ( 623,663 )

Loss on Debt Extinguishment

(Gain) Loss on Debt Extinguishment ( 10,101 ) 7,614 54,118

Interest Expense 170,806 151,379 145,934

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Total Costs and Expenses 1,860,809 1,862,765 631,766

Earnings from Continuing Operations Before Income Tax

Income Tax Expense (Benefit)

Income from Continuing Operations

Income from Discontinued Operations, net

(Loss) Earnings Before Income Tax ( 602,831 ) 59,684 1,098,668

Income Tax (Benefit) Expense ( 174,087 ) 27,736 215,557

Net (Loss) Income ( 428,744 ) 31,948 883,111

Net Income Attributable to Noncontrolling Interests 55,031 112,678 86,578

Net (Loss) Income Attributable to CNX Resources Shareholders $ ( 483,775 ) $ ( 80,730 ) $ 796,533

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

CNX RESOURCES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended December 31,

(Dollars in thousands, except per share data)

(Loss) Earnings Per Share

(Loss) Income from Continuing Operations

Income from Discontinued Operations

Total Basic (Loss) Earnings Per Share

(Loss) Income from Continuing Operations

Income from Discontinued Operations

Total Diluted (Loss) Earnings Per Share

Basic $ ( 2.43 ) $ ( 0.42 ) $ 3.75

Diluted $ ( 2.43 ) $ ( 0.42 ) $ 3.71

Dividends Declared Per Share $ — $ — $ —

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

CNX RESOURCES CORPORATION AND SUBSIDIARIES

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For the Years Ended December 31,

2020 2019 2018

Net (Loss) Income $ ( 428,744 ) $ 31,948 $ 883,111

Other Comprehensive (Loss) Income:

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$ 914 , $ 1,664 , $( 792 ))

Comprehensive Income

( 2,579 ) ( 4,701 ) 1,672

Comprehensive (Loss) Income ( 431,323 ) 27,247 884,783

Comprehensive Income Attributable to Noncontrolling Interests 55,031 112,678 86,578

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(Dollars in thousands)

2020 December 31,

Current Assets:

Cash and Cash Equivalents $ 15,617 $ 16,283

Restricted Cash 735 —

Accounts and Notes Receivable:

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Other Intangible Assets (Note 9) 90,095 96,647

Restricted Cash 5,247 —

Other 11,289 15,221

Total Other Assets 742,887 1,426,130

TOTAL ASSETS $ 8,041,764 $ 9,060,806

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

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(Dollars in thousands, except per share data)

2020 December 31,

LIABILITIES AND EQUITY

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Current Portion of Finance Lease Obligations (Note 13) 6,876 7,164

Current Portion of Long-Term Debt (Note 12) 22,574 —

Current Portion of Operating Lease Obligations (Note 13) 52,575 61,670

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Asset Retirement Obligations (Note 7) 84,712 63,377

Other 44,041 41,596

Total Non-Current Liabilities 3,178,015 3,569,558

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands, except per share data)

(Dollars in thousands)

For the Years Ended December 31,

Total Stockholders’ Equity, Beginning Balance

Common Stock and Capital in Excess of Par Value:

Beginning Balance

Common Stock Capital in

Value Retained Earnings (Deficit) Accumulated Other Comprehensive Income

CNX Resources Stockholders’ Equity Non- Controlling Interest Total Equity

December 31, 2017 $ 2,241 $ 2,450,323 $ 1,455,811 $ ( 8,476 ) $ 3,899,899 $ — $ 3,899,899

Net Income — — 796,533 — 796,533 86,578 883,111

Issuance of Common Stock 8 1,705 — — 1,713 — 1,713

Purchase and Retirement of Common Stock ( 259 ) ( 206,895 ) ( 176,598 ) — ( 383,752 ) — ( 383,752 )

Shares Withheld for Taxes — — ( 5,037 ) — ( 5,037 ) ( 348 ) ( 5,385 )

Amortization of Stock-Based Compensation Awards — 18,930 — — 18,930 2,411 21,341

Distribution of CONSOL Energy, Inc.

Ending Balance

Retained Earnings:

Beginning Balance

Other Comprehensive Income — — — 1,672 1,672 — 1,672

ASU 2018-02 Reclassification — — 1,100 ( 1,100 ) — — —

Distributions to CNXM Noncontrolling Interest Holders — — — — — ( 55,433 ) ( 55,433 )

Acquisition of CNX Gathering, LLC — — — — — 718,577 718,577

December 31, 2018 $ 1,990 $ 2,264,063 $ 2,071,809 $ ( 7,904 ) $ 4,329,958 $ 751,785 $ 5,081,743

Net (Loss) Income — — ( 80,730 ) — ( 80,730 ) 112,678 31,948

Issuance of Common Stock 9 556 — — 565 — 565

Purchase and Retirement of Common Stock ( 129 ) ( 101,559 ) ( 13,789 ) — ( 115,477 ) — ( 115,477 )

Shares Withheld for Taxes — — ( 5,614 ) — ( 5,614 ) ( 696 ) ( 6,310 )

Distribution of CONSOL Energy, Inc.

ASU 2018-02 Reclassification

Ending Balance

Accumulated Other Comprehensive Loss:

Beginning Balance

Other Comprehensive (Loss) Income

Distribution of CONSOL Energy, Inc.

ASU 2018-02 Reclassification

Ending Balance

Total CNX Resources Corporation Stockholders' Equity

Non-Controlling Interest:

Beginning Balance

Amortization of Stock-Based Compensation Awards — 36,545 — — 36,545 1,880 38,425

Other Comprehensive Loss — — — ( 4,701 ) ( 4,701 ) — ( 4,701 )

Distributions to CNXM Noncontrolling Interest Holders — — — — — ( 63,884 ) ( 63,884 )

December 31, 2019 $ 1,870 $ 2,199,605 $ 1,971,676 $ ( 12,605 ) $ 4,160,546 $ 801,763 $ 4,962,309

Net (Loss) Income — — ( 483,775 ) — ( 483,775 ) 55,031 ( 428,744 )

Issuance of Common Stock 8 2,049 — — 2,057 — 2,057

Purchase and Retirement of Common Stock ( 41 ) ( 33,067 ) ( 10,139 ) — ( 43,247 ) — ( 43,247 )

Shares Withheld for Taxes — — ( 1,706 ) — ( 1,706 ) ( 309 ) ( 2,015 )

Amortization of Stock-Based Compensation Awards — 12,897 — — 12,897 1,485 14,382

Equity Component of Convertible Senior Notes, net of Issuance Costs — 78,317 — — 78,317 — 78,317

Purchase of Capped Call — ( 26,351 ) — — ( 26,351 ) — ( 26,351 )

Other Comprehensive Loss — — — ( 2,579 ) ( 2,579 ) — ( 2,579 )

Distributions to CNXM Noncontrolling Interest Holders — — — — — ( 41,987 ) ( 41,987 )

Distribution of CONSOL Energy, Inc.

Acquisition of CNX Gathering, LLC

Ending Balance

Total Stockholders' Equity, Ending Balance

CNXM Merger 371 725,907 — — 726,278 ( 815,983 ) ( 89,705 )

December 31, 2020 $ 2,208 $ 2,959,357 $ 1,476,056 $ ( 15,184 ) $ 4,422,437 $ — $ 4,422,437

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

For the Years Ended December 31,

(Dollars in thousands) For the Years Ended December 31,

Cash Flows from Operating Activities:

Adjustments to Reconcile Net Income to Net Cash Provided by Continuing Operating Activities:

Net Income from Discontinued Operations

2020 2019 2018

Net (Loss) Income $ ( 428,744 ) $ 31,948 $ 883,111

Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Continuing Operating Activities:

Depreciation, Depletion and Amortization 501,821 508,463 493,423

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Impairment of Unproved Properties and Expirations — 119,429 —

Impairment of Goodwill 473,045 — —

Impairment of Other Intangible Assets — — 18,650

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Gain on Previously Held Equity Interest — — ( 623,663 )

Loss on Debt Extinguishment

(Gain) Loss on Debt Extinguishment ( 10,101 ) 7,614 54,118

(Gain) Loss on Commodity Derivative Instruments ( 172,982 ) ( 376,105 ) 30,212

Loss on Other Derivative Instruments 13,051 — —

Net Cash Received (Paid) in Settlement of Commodity Derivative Instruments 461,217 69,780 ( 69,720 )

Deferred Income Taxes ( 118,300 ) 79,092 345,560

Equity in Earnings of Affiliates

Equity in Loss (Earnings) of Affiliates 688 ( 2,103 ) ( 5,363 )

Return on Equity Investment — 4,056 —

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Changes in Other Liabilities ( 1,233 ) ( 23,507 ) ( 1,556 )

Net Cash Provided by Continuing Operating Activities

Net Cash Provided by Discontinued Operating Activities

Net Cash Provided by Operating Activities 795,071 980,560 885,823

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Net Distributions from Equity Affiliates — — 9,250

Net Cash Used in Continuing Investing Activities

Net Cash Used in Discontinued Investing Activities

Net Cash Used in Investing Activities ( 438,969 ) ( 1,147,439 ) ( 894,652 )

Cash Flows from Financing Activities:

Net Proceeds from CNX Revolving Credit Facility

Net (Payments on) Proceeds from CNX Revolving Credit Facility ( 500,200 ) 49,000 612,000

Payments on Miscellaneous Borrowings ( 7,155 ) ( 7,149 ) ( 7,165 )

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Proceeds from Issuance of CNXM Senior Notes — — 394,000

Net Proceeds from (Payments on) CNXM Revolving Credit Facility

Net Proceeds from CSG Non-Revolving Credit Facilities 158,794 — —

Proceeds from Issuance of Convertible Senior Notes 334,650 — —

Purchase of Capped Call Related to Convertible Senior Notes ( 35,673 ) — —

Net (Payments on) Proceeds from CNXM Revolving Credit Facility ( 20,750 ) 227,750 ( 65,500 )

Distributions to CNXM Noncontrolling Interest Holders ( 41,987 ) ( 63,884 ) ( 55,433 )

Proceeds from Spin-Off of CONSOL Energy Inc.

Proceeds from Issuance of Common Stock 2,057 565 1,713

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Debt Issuance and Financing Fees ( 26,047 ) ( 10,655 ) ( 20,599 )

Net Cash Provided by (Used in) Continuing Financing Activities

Net Cash Used in Discontinued Financing Activities

Net Cash Provided by (Used in) Financing Activities

Net (Decrease) Increase in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Period

Net Cash (Used in) Provided by Financing Activities ( 350,786 ) 165,964 ( 483,140 )

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 5,316 ( 915 ) ( 491,969 )

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 16,283 17,198 509,167

Cash, Cash Equivalents, and Restricted Cash at End of Period $ 21,599 $ 16,283 $ 17,198

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

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Basis of Consolidation:

The Consolidated Financial Statements include the accounts of CNX Resources Corporation, and its wholly-owned and majority-owned and/or controlled subsidiaries, including certain variable interest entities that the Company is required to consolidate pursuant to the Consolidation topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification.

The portion of these entities that is not owned by the Company is presented as non-controlling interest.

The Consolidated Financial Statements include the accounts of CNX Resources Corporation, its wholly-owned subsidiaries, and its majority-owned and/or controlled subsidiaries.

Investments in business entities in which CNX does not have control but has the ability to exercise significant influence over the operating and financial policies, are accounted for under the equity method.

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Investments in oil and natural gas producing entities are accounted for under the proportionate consolidation method.

Discontinued Operations:

Businesses divested are classified in the Consolidated Financial Statements as either discontinued operations or held for sale when the provision of Accounting Standards Codification (ASC) Topic 205 or ASC Topic 360 are met.

For businesses classified as discontinued operations, the balance sheet amounts and results of operations are reclassified from their historical presentation to assets and liabilities of discontinued operations in the Consolidated Balance Sheets and to discontinued operations in the Consolidated Statements of Income and Cash Flows for all periods presented.

The gains or losses associated with these divested businesses are recorded in discontinued operations in the Consolidated Statements of Income.

The disclosures outside of Note 5- Discontinued Operations, for all periods presented, in the accompanying notes generally do not include the assets, liabilities, or operating results of businesses classified as discontinued operations.

Prior to the Merger on September 28, 2020, see Note 4 - Acquisitions and Dispositions, certain variable interest entities were required to be consolidated pursuant to the Consolidation topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification.

The portion of these entities that was not owned by the Company was presented as non-controlling interest.

Use of Estimates:

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Actual results could differ from those estimates.

The most significant estimates included in, but not limited to, the preparation of the consolidated financial statements are related to long-lived assets (including intangible assets and goodwill), the values of natural gas, NGLs, condensate and oil (collectively "natural gas") reserves, asset retirement obligations, deferred income tax assets and liabilities, contingencies, fair value of derivative instruments, stock-based compensation and salary retirement benefits.

Cash and Cash Equivalents:

The most significant estimates included in, but not limited to, the preparation of the consolidated financial statements are related to long-lived assets (including intangible assets and goodwill), accounts receivable credit losses, the values of natural gas, NGLs, condensate and oil (collectively "natural gas") reserves, asset retirement obligations, deferred income tax assets and liabilities, contingencies, fair value of derivative instruments, the fair value of the liability and equity components of the convertible senior notes, stock-based compensation and salary retirement benefits.

Cash, Cash Equivalents, and Restricted Cash

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

Trade Accounts Receivable:

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 Agreements, each dated March 13, 2020 (See Note 12 - Long-Term Debt for more information).

The following table provides a reconciliation of cash, cash equivalents, and restricted cash to amounts shown in the statement of cash flows:

2020 2019 2018

Cash and Cash Equivalents $ 15,617 $ 16,283 $ 17,198

Restricted Cash, Current Portion 735 — —

Restricted Cash, Less Current Portion 5,247 — —

Total Cash, Cash Equivalents and Restricted Cash $ 21,599 $ 16,283 $ 17,198

Trade Accounts Receivable and Allowance for Credit Losses:

Trade accounts receivable are recorded at the invoiced amount and do not bear interest.

CNX reserves for specific accounts receivable when it is probable that all or a part of an outstanding balance will not be collected, such as customer bankruptcies.

Collectability is determined based on terms of sale, credit status of customers and various other circumstances.

CNX regularly reviews collectability and establishes or adjusts the allowance as necessary using the specific identification method.

On January 1, 2020, CNX adopted Accounting Standards Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

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.

CNX adopted Topic 326 using the prospective transition method.

Prior to adopting Topic 326, CNX reserved for specific accounts receivable when it was probable that all or a part of an outstanding balance would not be collected, such as customer bankruptcies.

Collectability was determined based on terms of sale, credit status of customers and various other circumstances.

CNX regularly reviewed collectability and established or adjusted the allowance as necessary using the specific identification method.

Account balances were charged off against the allowance after all means of collection had been exhausted and the potential for recovery was considered remote.

Reserves for uncollectible amounts were not material in the periods presented.

Under Topic 326, management records an allowance for credit losses related to the collectability of third-party customers' receivables using the historical aging of the customer receivable balance.

The collectability is determined based on past events, including historical experience, customer credit rating, as well as current market conditions.

CNX monitors customer ratings and collectability on an on-going basis.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Reserves for uncollectable amounts were not material in the periods presented.

In addition, there were no material financing receivables with a contractual maturity greater than one year at December 31, 2019 or 2018 .

There were no material financing receivables with a contractual maturity greater than one year at December 31, 2020 or 2019.

As of December 31, 2020 and 2019, Accounts Receivable - Trade were $ 145,929 and $ 133,480 , respectively, and Other Receivables were $ 4,238 and $ 13,679 , respectively.

The following represents the roll forward of the allowance for credit losses for the years ended:

Allowance for Credit Losses - Trade, Beginning of Year $ — $ —

Provision for Expected Credit Losses 84 —

Allowance for Credit Losses - Trade, End of Period $ 84 $ —

Allowance for Credit Losses - Other Receivables, Beginning of Year $ 2,463 $ 2,038

Provision for Expected Credit Losses 2,760 595

Write-off of Uncollectible Accounts ( 1,975 ) ( 170 )

Allowance for Credit Losses - Other Receivables, End of Period $ 3,248 $ 2,463

Inventories are stated at the lower of cost or net realizable value.

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Costs of unsuccessful exploratory wells are expensed when such wells are determined to be non-productive, or if the determination cannot be made after finding sufficient quantities of reserves to continue evaluating the viability of the project.

The costs of producing properties and mineral interests are amortized using the units-of-production method.

The costs of producing properties and mineral

interests are amortized using the units-of-production method.

Depreciation, depletion and amortization expense is calculated based on the actual produced sales volumes multiplied by the applicable rate per unit, which is derived by dividing the net capitalized costs by the number of units expected to be produced over the life of the reserves.

Wells and related equipment and intangible drilling costs are also amortized on a units-of-production method.

Proved developed reserves, as estimated by petroleum engineers, are used to calculate amortization of wells and related equipment and facilities and amortization of intangible drilling costs.

Total proved reserves, also estimated by petroleum engineers, are used to calculate depletion on property acquisitions.

Proved oil and natural gas reserve estimates are based on geological and engineering evaluations of in-place hydrocarbon volumes.

Units-of-production amortization rates are revised at least once per year, or more frequently if events and circumstances indicate an adjustment is necessary.

Such revisions are accounted for prospectively as changes in accounting estimates.

The Company recorded depreciation, depletion and amortization expense related to proved gas properties using the units-of-production method of $ 400,758 , $ 423,488 , and $ 412,588 for the years ended December 31, 2020, 2019, and 2018, respectively.

Property, plant and equipment is recorded at cost upon acquisition.

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Depreciation of plant and equipment is calculated on the straight-line method over their estimated useful lives or lease terms, generally as follows:

Buildings and Improvements

Machinery and Equipment

Gathering and Transmission

Leasehold Improvements

Life of Lease

Buildings and Improvements 10 to 45

Machinery and Equipment 3 to 25

Gathering and Transmission 30 to 40

Leasehold Improvements Life of Lease

Costs for purchased software are capitalized and amortized using the straight-line method over the estimated useful life which does not exceed seven years .

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Impairment of equity investments is recorded when indicators of impairment are present, and the estimated fair value of the investment is less than the assets' carrying value.

In February 2017, the Company approved a plan to sell its subsidiaries Knox Energy LLC and Coalfield Pipeline Company (collectively, “Knox”).

Knox met all of the criteria to be classified as held for sale in February 2017.

As part of the required evaluation under the held for sale guidance, Knox’s book value was evaluated, and it was determined that the approximate fair value less costs to sell Knox was less than the carrying value of the net assets to be sold.

The resulting impairment of $ 137,865 was included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income during the year ended December 31, 2017.

The sale of Knox closed in the second quarter of 2017 (See Note 6 - Acquisitions and Dispositions for more information).

The disposal of Knox did not represent a strategic shift that would have had a major effect on the Company’s operations and financial results and was, therefore, not classified as a discontinued operation in accordance with Topic 205, Presentation of Financial Statements, and Topic 360, Property, Plant and Equipment.

Impairment of Proved Properties:

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 the published NYMEX forward 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.

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 determined based on discounted cash flow techniques 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 year ended December 31, 2020, CNX recognized certain indicators of impairments 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.

During the fourth quarter of 2019, CNX identified certain indicators of impairment specific to our Central Pennsylvania Marcellus asset group and determined that the carrying value of that asset group was not recoverable.

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In connection with the Midstream Acquisition (See Note 4 - Acquisitions and Dispositions for more information), CNX recorded $ 796,359 of goodwill through the application of purchase accounting.

The goodwill recorded was allocated in its entirety to the Midstream reporting unit, which is the sole reporting unit within the Midstream segment.

The goodwill recorded was allocated in its entirety to the Midstream reporting unit within the Shale segment.

Goodwill is the cost of an acquisition less the fair value of the identifiable net assets of the acquired business.

Goodwill is not amortized, but rather it is evaluated 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.

These indicators include, but are not limited to, overall financial performance, industry and market considerations, anticipated future cash flows and discount rates, changes in the stock price with regards to CNX or common unit price with regards to CNX Midstream Partners LP ("CNXM"), regulatory and legal developments, and other relevant factors.

In connection with the annual 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.

These indicators include, but are not limited to, overall financial performance, industry and market considerations, anticipated future cash flows and discount rates, changes in the stock price with regards to CNX, regulatory and legal developments, and other relevant factors.

In connection with the annual evaluation of goodwill for impairment or earlier if an impairment indicator is identified, 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.

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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.

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.

The income approach is used to estimate value based on the present value of future economic benefits that are expected to be produced by an asset or business entity.

This approach generally involves two general steps:

(i) The first step involves establishing a forecast of the estimated future net cash flows expected to accrue directly or indirectly to the owner of the asset over its remaining useful life or to the owner of the business entity (including a reporting unit).

reporting unit).

(ii) The second step involves discounting these estimated future net cash flows to their present value using a market rate of return.

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These assumptions are affected by expectations about future market, industry and economic conditions.

Cash flow projections were derived from board approved budgeted amounts, a five-year operating forecast and an estimate of future cash flows.

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.

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Future results could differ from our current estimates and assumptions.

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 master limited partnership (MLP) market space, an impairment indicator was identified.

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 $ 473,045 was included in Impairment of Goodwill in the Consolidated Statements of Income.

In connection with our annual assessment of goodwill in the fourth quarter of 2020, we 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.

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Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns.

The provision for income taxes represents income taxes paid or payable for the current year and the change in deferred taxes, excluding the effects of acquisitions during the year.

Deferred taxes result from

differences between the financial and tax bases of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

The provision for income taxes represents income taxes paid or

payable for the current year and the change in deferred taxes, excluding the effects of acquisitions during the year.

Deferred taxes result from differences between the financial and tax bases of the Company's assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a deferred tax benefit will not be realized.

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For natural gas, NGL and oil revenue, this occurs at the contractual point of delivery.

For midstream revenue this occurs when obligations under the terms of the contract with the shipper are satisfied.

For revenues generated from natural gas gathering services provided to third-parties, this occurs when obligations under the terms of the contract with the shipper are satisfied.

CNX sells natural gas to accommodate the delivery points of its customers.

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Contingencies:

From time to time, CNX, or its subsidiaries, are subject to various lawsuits and claims with respect to such matters as personal injury, wrongful death, damage to property, exposure to hazardous substances, governmental regulations (including environmental remediation), employment and contract disputes, and other claims and actions, arising out of the normal course of business.

From time to time, CNX, or its subsidiaries, are subject to various lawsuits and claims with respect to such matters as personal injury, wrongful death, damage to property, exposure to hazardous substances, governmental regulations (including environmental remediation), employment and contract disputes and other claims and actions, arising out of the normal course of

Liabilities are recorded when it is probable that obligations have been incurred and the amounts can be reasonably estimated.

Estimates are developed through consultation with legal counsel involved in the defense of these matters and are based upon the

nature of the lawsuit, progress of the case in court, view of legal counsel, prior experience in similar matters and management's intended response.

Estimates are developed through consultation with legal counsel involved in the defense of these matters and are based upon the nature of the lawsuit, progress of the case in court, view of legal counsel, prior experience in similar matters and management's intended response.

Environmental liabilities are not discounted or reduced by possible recoveries from third-parties.

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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 are accounted for on a mark-to-market basis with the changes in fair value recorded in current period earnings.

CNX enters into financial derivative instruments to manage its exposure to commodity price volatility.

The derivatives are accounted for as an asset or a liability in the accompanying Consolidated Balance Sheets at their fair value, generally measured based upon Level 2 inputs, which is further described in Note 20 - Fair Value of Financial Instruments.

Changes in the fair values of derivatives are recorded in earnings.

All of the Company's derivative instruments are subject to master netting arrangements with its counterparties, none of which currently require CNX to post collateral for any of its hedges.

However, as stated in the counterparty master agreements, if the Company'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 be required to post collateral for hedges that are in a liability position in excess of defined thresholds.

Natural gas commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

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 any of its counterparties cease to be secured on the same basis as similar obligations with the other lenders under the credit facility, CNX would be required 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 the counterparties.

CNX recognizes all financial derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets on a gross basis, generally measured based upon Level 2 inputs, which is further described in Note 18 - Fair Value of Financial Instruments.

Each of the Company's counterparty master agreements allows, in the event of default, the ability to elect early termination of outstanding contracts.

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Recent Accounting Pronouncements:

In December 2019, the FASB issued ASU 2019-12 - Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

This ASU removes the following exceptions:

(1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items;

(2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment;

(3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary;

and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.

The amendments in this ASU also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance.

The amendments in this ASU will be applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Early adoption is permitted.

The adoption of this guidance is not expected to have a material impact on the Company's financial statements.

In November 2019, the FASB issued ASU 2019-11 - Financial Instruments - Credit Losses (Topic 326), which clarifies and addresses specific issues about certain aspects of the amendments in ASU 2016-13.

In May 2019, the FASB issued ASU 2019-05 - Financial Instruments - Credit Losses (Topic 326), which provides optional targeted transition relief to entities adopting ASU 2016-13.

ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The measurement of expected credit losses will be 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.

ASU 2019-05 provides the option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis.

For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets.

The amendments in this ASU will be applied using the modified-retrospective approach and, for public entities, are effective for fiscal years beginning after December 15, 2019 and interim periods within those annual periods.

Early adoption is permitted.

In August 2020, the FASB issued Accounting Standards Update (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 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.

In March 2020, the FASB issued ASU 2020-03 - Codification Improvements to Financial Instruments.

This ASU improves and clarifies various financial instruments topics, including the CECL standard.

The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications.

The amendments in this ASU have different effective dates.

The adoption of this guidance is not expected to have a material impact on the Company's financial statements.

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The Company has evaluated all subsequent events through the date the financial statements were issued.

No material recognized, or non-recognizable subsequent events were identified other than what is disclosed in Note 25 - Subsequent Event.

No material recognized or non-recognizable subsequent events were identified.

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 additional shares from stock options, performance stock options, restricted stock units and performance share units, if dilutive.

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 12 - 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, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period.

CNXM's dilutive units did not have a material impact on the Company's earnings per share calculations for the year ended December 31, 2019 or the period from January 3, 2018 through December 31, 2018.

Pursuant to the Merger (See Note 4 - 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 will be 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 period from January 1, 2020 through September 30, 2020, the year ended December 31, 2019, or the period from January 3, 2018 through December 31, 2018.

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 Years Ended December 31,

2020 2019 2018

Anti-Dilutive Options 4,200,509 4,696,264 2,285,775

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Anti-Dilutive Performance Share Options — 927,268 927,268

The computations for basic and diluted earnings per share are as follows:

7,082,480 7,659,013 3,358,260

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 December 31, 2020, the if-converted value of the Convertible Notes did not 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.

The computations for basic and diluted (loss) earnings per share are as follows:

For the Years Ended December 31,

Income from Continuing Operations

2020 2019 2018

Net (Loss) Income $ ( 428,744 ) $ 31,948 $ 883,111

Net Income Attributable to Non-Controlling Interest 55,031 112,678 86,578

Net (Loss) Income from Continuing Operations Attributable to CNX Resources Shareholders

Income from Discontinued Operations

Net (Loss) Income Attributable to CNX Resources Shareholders $ ( 483,775 ) $ ( 80,730 ) $ 796,533

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(Loss) Earnings Per Share:

Basic (Continuing Operations)

Basic (Discontinued Operations)

Diluted (Continuing Operations)

Diluted (Discontinued Operations)

Total Diluted

Basic $ ( 2.43 ) $ ( 0.42 ) $ 3.75

Diluted $ ( 2.43 ) $ ( 0.42 ) $ 3.71

*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.

Shares of common stock outstanding were as follows:

For the Years Ended December 31,

2020 2019 2018

Balance, Beginning of Year 186,642,962 198,663,342 223,743,322

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Retirement of Common Stock (2) ( 4,138,527 ) ( 12,929,487 ) ( 25,894,324 )

Issuance Related to CNXM Merger 37,054,223 — —

Balance, End of Year 220,440,993 186,642,962 198,663,342

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(2) See Note 5 - Stock Repurchase for additional information.

NOTE 3— CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS:

Changes in Accumulated Other Comprehensive Loss related to pension obligations, net of tax, were as follows:

Balance at December 31, 2018

Other Comprehensive Loss before Reclassifications

Amounts Reclassified from Accumulated Other Comprehensive Loss, net of tax

Balance at December 31, 2019

The following table shows the reclassification of adjustments out of Accumulated Other Comprehensive Loss:

For the Years Ended December 31,

Actuarially Determined Long-Term Liability Adjustments* (Note 16)

Amortization of Prior Service Costs

Recognized Net Actuarial Loss

*Excludes amounts related to the remeasurement of the actuarially determined pension obligations for the years ended December 31, 2019, 2018 and 2017.

The table above only shows the reclassifications out of Accumulated Other Comprehensive Loss that relates to continuing operations.

In February 2018, the FASB issued ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220), which eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act.

The Company early adopted this ASU, resulting in the reclassification of $ 1,100 related to stranded tax effects from Accumulated Other Comprehensive Loss to Retained Earnings during the year ended December 31, 2018.

NOTE 3— REVENUE FROM CONTRACTS WITH CUSTOMERS:

On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers and all the related amendments using the modified retrospective method, which did not result in any changes to previously reported financial information.

The updates were applied only to contracts that were not complete as of January 1, 2018.

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, NGLs 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.

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.

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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, NGLs 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, NGLs 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.

Midstream revenue consists of revenues generated from natural gas gathering activities.

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.

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For the Years Ended December 31,

2020 2019 2018

Revenue from Contracts with Customers:

Natural Gas Revenue $ 823,132 $ 1,251,013 $ 1,391,459

Condensate Revenue

Total Natural Gas, NGLs and Oil Revenue

NGL Revenue 64,138 104,139 165,883

Oil/Condensate Revenue 9,475 9,173 20,595

Total Natural Gas, NGL and Oil Revenue 896,745 1,364,325 1,577,937

Purchased Gas Revenue 105,792 94,027 65,986

Midstream Revenue

Other Sources of Revenue and Other Operating Income:

Gain (Loss) on Commodity Derivative Instruments 172,982 376,105 ( 30,212 )

Other Operating Income

Other Revenue and Operating Income 82,459 87,992 116,723

Total Revenue and Other Operating Income $ 1,257,978 $ 1,922,449 $ 1,730,434

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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, NGLs and oil and purchased gas revenue is short-term in nature with a contract term of one year or less.

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.

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.

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CNX records revenue in the month production is delivered to the purchaser.

However, settlement statements for certain natural gas and NGL 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 estimates and the actual amounts received in the month that payment is received from 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 actual revenue received historically have not been significant.

For each of the years ended December 31, 2019 , 2018 , and 2017 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

NOTE 5— DISCONTINUED OPERATIONS:

In November 2017, CNX completed the tax-free spin-off of its coal business resulting in two independent, publicly traded companies:

(i) a coal company, CONSOL Energy, formerly known as CONSOL Mining Corporation and (ii) CNX, a natural gas exploration and production company, formerly known as CONSOL Energy, Inc.

Following the separation, CONSOL Energy and its subsidiaries hold the coal assets previously held by CNX, including its Pennsylvania Mining Complex, Baltimore Marine Terminal, its direct and indirect ownership interest in CONSOL Coal Resources LP, formerly known as CNXC Coal Resources LP, and other related coal assets previously held by CNX.

The coal business has been reclassified to discontinued operations for all periods presented.

The following table details selected financial information for the divested business included within discontinued operations:

For the Year Ended

December 31, 2017

Other Outside Sales

Freight-Outside Coal

Miscellaneous Other Income

Total Revenue and Other Income

Income from Operations Before Income Taxes

Income Tax Expense

Net Income Attributable to Noncontrolling Interest

Income from Discontinued Operations, net

For each of the years ended December 31, 2020, 2019, and 2018, revenue recognized in the current reporting period related to performance obligations satisfied in prior a reporting period was not material.

NOTE 4— 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”).

On September 28, 2020, the Merger was completed and CNX issued 37,054,223 shares of common stock to acquire the 42,107,071 common units of CNXM not owned by CNX prior to the Merger at a fixed exchange ratio of 0.88 shares of CNX common stock for each CNXM common unit, for total implied consideration of $ 384,623 .

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.

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 year ended December 31, 2019.

See discussion of Midstream Acquisition below for change in ownership interest during the year ended December 31, 2018.

CNXM’s revolving credit facility (See Note 10 - Revolving Credit Facilities) and the CNXM Senior Notes (See Note 12 - Long-Term Debt) were not impacted by the Merger.

The Company incurred $ 11,271 of transaction costs directly attributable to the Merger during the year ended December 31, 2020, including financial advisory, legal service and other professional fees, which were recorded to Other Expense (Income) in the Consolidated Statements of Income.

On August 31, 2018, CNX closed on the sale of substantially all of its Ohio Utica Joint Venture Assets in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble Counties, which included approximately 26,000 net undeveloped acres.

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The net gain on the sale was $ 4,227 and is included in Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

On December 14, 2017, CNX Gas entered into a purchase agreement with Noble, 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 and the mutual release of all outstanding claims (the "Midstream Acquisition").

CNX Gathering owns a 100 % membership interest in CNX Midstream GP LLC (the "general partner"), which is the general partner of CNXM.

On December 14, 2017, CNX Gas entered into a purchase agreement with Noble, pursuant to which CNX Gas acquired Noble’s 50 % membership interest in CNX Gathering 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.

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The fair value of the identified intangible assets was determined using the income approach, which requires a forecast of the expected future cash flows generated and an estimated market-based weighted average cost of capital.

Significant unobservable inputs in the valuation include future revenue estimates, future cost assumptions, and estimated customer retention rates.

Significant unobservable inputs in the valuation include future revenue estimates, future cost assumptions, and estimated

customer retention rates.

As a result, the fair value estimate of the identified intangible assets represents a Level 3 fair value measurement.

The noncontrolling interest in the acquired business is comprised of the limited partner units in CNXM, which were not acquired by the Company.

The CNXM limited partner units are actively traded on the New York Stock Exchange and were valued based on observable market prices as of the transaction date and therefore represent a Level 1 fair value measurement.

At the time of the Midstream Acquisition, the CNXM limited partner units were actively traded on the New York Stock Exchange and were valued based on observable market prices as of the transaction date and therefore represent a Level 1 fair value measurement.

Allocation of Purchase Price (Midstream Acquisition)

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Fair Value of Noncontrolling Interest in CNXM ( 718,577 )

Goodwill 796,359

Net Assets Acquired $ 1,106,653

Post-Acquisition Operating Results (Midstream Acquisition)

The Midstream Acquisition contributed the following to the Company's Midstream segment:

The Midstream Acquisition contributed the following to the Midstream reporting unit within the Shale segment:

For the Years Ended December 31,

Midstream Revenue

Earnings from Continuing Operations Before Income Tax

Unaudited Pro Forma Information (Midstream Acquisition)

The following unaudited pro forma combined financial information presents the Company’s results as though the Midstream Acquisition had been completed at January 1, 2017.

The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the acquisition been completed at January 1, 2017;

furthermore, the financial information is not intended to be a projection of future results.

For the Year Ended

(in thousands, except per share data) (unaudited)

December 31, 2017

Pro Forma Total Revenue and Other Operating Income

Pro Forma Net Income from Continuing Operations

Pro Forma Net Income Attributable to Noncontrolling Interests

Pro Forma Net Income from Continuing Operations Attributable to CNX

Pro Forma Income per Share from Continuing Operations (Basic)

Pro Forma Income per Share from Continuing Operations (Diluted)

In September 2017, CNX closed on the sale of approximately 22,000 acres of surface land in Colorado.

The net cash proceeds of $ 23,703 are included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows and the net gain on the transaction of $ 18,758 is included in Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

In a two-part closing in July and September 2017, CNX executed the sale of approximately 7,500 net undeveloped acres of the Marcellus Shale in Allegheny and Westmoreland counties, Pennsylvania.

The total cash proceeds of $ 36,649 are included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows and the net gain on the transaction of $ 15,251 is included in Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

In June 2017, CNX closed on the sale of approximately 11,100 net undeveloped acres of the Marcellus and Utica Shale in Allegheny, Washington, and Westmoreland counties, Pennsylvania.

The total cash proceeds of $ 83,500 are included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows and the net gain on the transaction of $ 58,541 is included in Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

In June 2017, the Company finalized the sale of 12 producing wells, 15 drilled but uncompleted wells (DUCs), and approximately 11,000 net developed and undeveloped Marcellus and Utica acres in Doddridge and Wetzel counties in West Virginia that were previously classified as held for sale.

CNX received total cash proceeds of $ 125,507 , which is included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows, as well as undeveloped acreage.

The net loss on the sale of $ 9,430 is included in Gain on Asset Sales and Abandonments net in the Consolidated Statements of Income.

In May 2017, CNX finalized the sale of approximately 6,300 net undeveloped acres of the Utica-Point Pleasant Shale in Jefferson, Belmont and Guernsey counties, Ohio that were previously classified as held for sale.

The total cash proceeds of $ 76,585 are included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows and the net gain on the transaction of $ 72,346 is included in Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

In April 2017, CNX finalized the sale of its Knox Energy LLC and Coalfield Pipeline Company subsidiaries that were previously classified as held for sale.

At closing, CNX received net cash proceeds of $ 19,055 , which is included in Proceeds from Asset Sales in the Consolidated Statements of Cash Flows.

The net gain on the sale of these assets was $ 606 and is included in the Gain on Asset Sales and Abandonments, net in the Consolidated Statements of Income.

In February 2017, Knox met all of the criteria to be classified as held for sale.

The resulting impairment of $ 137,865 is included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income during the year ended December 31, 2017.

2020 2019 2018

Other Revenue and Operating Income $ 64,710 $ 74,314 $ 89,781

Earnings Before Income Tax $ 156,818 $ 166,654 $ 133,811

NOTE 5— STOCK REPURCHASE:

Since the October 30, 2017 inception of the current stock repurchase program, CNX's Board of Directors has approved in total a $ 750,000 stock repurchase program, which is not subject to an expiration date.

As of December 31, 2020, CNX's Board of Directors had approved $ 750,000 in stock repurchases since the October 30, 2017 inception of the current stock repurchase program.

On January 26, 2021, the Company’s Board of Directors approved an increase in the aggregate amount of the current stock repurchase program plan, to $ 900,000 .

This increases the amount available under the current stock repurchase program to $ 245,000 , 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

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.

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During the year ended December 31, 2020, 4,138,527 shares were repurchased and retired at an average price of $ 10.43 per share for a total cost of $ 43,247 .

During the year ended December 31, 2019, 12,929,487 shares were repurchased and retired at an average price of $ 8.91 per share for a total cost of $ 115,477 .

During the year ended December 31, 2018, 25,894,324 shares were repurchased and retired at an average price of $ 14.80 per share for a total cost of $ 383,752 .

NOTE 6— INCOME TAXES:

Income tax expense (benefit) provided on earnings from continuing operations consisted of:

Income tax (benefit) expense provided on earnings consisted of:

For the Years Ended December 31,

Total Income Tax Expense (Benefit)

2020 2019 2018

$ ( 55,799 ) $ ( 51,243 ) $ ( 130,003 )

( 55,787 ) ( 51,356 ) ( 130,003 )

( 83,080 ) 47,717 319,813

( 35,220 ) 31,375 25,747

( 118,300 ) 79,092 345,560

Total Income Tax (Benefit) Expense $ ( 174,087 ) $ 27,736 $ 215,557

The components of the net deferred taxes are as follows:

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Net Operating Loss- Federal

$ 215,936 $ 202,913

Net Operating Loss - State

Alternative Minimum Tax

129,641 130,430

Foreign Tax Credit 43,194 43,194

Interest Limitation

Operating Lease Right-of-Use Assets 28,085 47,849

Gas Well Closing 24,251 17,888

Equity Compensation

Salary Retirement 11,478 9,236

Finance Lease

Equity Compensation 6,639 9,308

Alternative Minimum Tax — 51,241

Interest Limitation — 25,734

Total Deferred Tax Assets

468,640 547,823

Valuation Allowance

( 123,098 ) ( 125,054 )

Net Deferred Tax Assets

345,542 422,769

Deferred Tax Liabilities:

Property, Plant and Equipment

( 649,917 ) ( 593,401 )

Investment in Partnership

( 85,882 ) ( 145,424 )

Gas Derivatives

( 26,882 ) ( 105,721 )

Operating Lease Liabilities ( 28,287 ) ( 46,640 )

Discount on Convertible Notes ( 18,097 ) —

Advance Gas Royalties

( 2,519 ) ( 3,337 )

( 211 ) ( 4,354 )

Total Deferred Tax Liabilities

( 811,795 ) ( 898,877 )

Net Deferred Tax Liability

$ ( 466,253 ) $ ( 476,108 )

Deferred taxes are recorded for certain tax benefits, including net operating losses and tax credit carry-forwards, if management assesses the utilization of those assets to be more likely than not.

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All available evidence, both positive and negative, must be considered in determining the need for a valuation allowance.

For the years ended December 31, 2019 and 2018 , positive evidence considered included financial earnings generated over the past three years for certain subsidiaries, reversals of financial to tax temporary differences and the implementation of and/or ability to employ various tax planning strategies.

Positive evidence considered included financial earnings generated over the past three years for certain subsidiaries, reversals of financial to tax temporary differences and the implementation of and/or ability to employ various tax planning strategies.

Negative evidence includes financial and tax losses generated in prior periods and the inability to achieve forecasted results for those periods.

As of December 31, 2020, the Company has a deferred tax asset related to federal net operating losses of $ 215,936 , which expire at various times between 2034 and 2039.

However, because of the Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017, the anticipated federal net operating losses generated in 2018 and 2019 do not expire but may only offset 80% of taxable income in any given year.

The Act preserved the deductibility of intangible drilling costs for federal income tax purposes, which allows the Company to deduct a portion of drilling costs in the year incurred and minimizes current year taxes payable in periods of taxable income.

The Act also repealed the corporate alternative minimum tax (AMT) for tax years beginning January 1, 2018 and provides that existing AMT credits can be utilized to offset current federal taxes owed in tax years 2018 through 2020.

In addition, 50% of any unused AMT credits are refundable during these years with any remaining AMT credit carryforward being fully refunded in 2021.

The Company has reclassified $ 51,241 in 2019 and $ 102,482 in 2018 from Deferred Income Taxes to Recoverable Income Taxes in the Consolidated Balance Sheets in anticipation of the AMT refunds expected to be received in 2020 and received in 2019.

The Company has a deferred tax asset relating to federal AMT credits of $ 51,241 and $ 102,482 , as of December 31, 2019 and 2018 , respectively, a decrease of $ 51,241 from the prior year that resulted from the anticipated and actual refund of the AMT credits.

During 2018, the valuation allowance relating to federal AMT credits decreased by $ 12,413 as the Internal Revenue Service (IRS) announced that refunds of AMT credits are no longer subject to government sequestration.

However, because of the Tax Cuts and Jobs Act (the "TCJA Act") enacted on December 22, 2017 and the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") enacted on March 27, 2020, the anticipated federal net operating losses generated in 2018 - 2020 do not expire but may only offset 80% of taxable income in any tax years beginning after 2020.

The CARES Act, which, among other things;

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 in 2020.

The impact of other tax implications of the Act on the financial statements and related disclosures are immaterial.

The TCJA Act repealed the corporate AMT for tax years beginning January 1, 2018 and provides that AMT credits can be utilized to offset current federal taxes owed in tax years 2018 through 2020.

In addition, 50% of any unused AMT credits are refundable during these years with any remaining AMT credit carryforward being fully refunded in 2021, which was revised under the CARES Act to 2020.

The Company has no deferred tax asset relating to federal AMT credits as of December 31,

2020 compared to $ 51,241 as of December 31, 2019, a decrease of $ 51,241 from the prior year that resulted from the refunds received of all remaining outstanding AMT credits.

A valuation allowance on foreign tax credits of $ 43,194 has also been recorded at December 31, 2020 and 2019.

The foreign tax credits expire at various times between 2021 and 2023.

A valuation allowance on charitable contribution carry-forwards of $ 658 and $ 3,297 has been recorded as of December 31, 2019 and 2018 , respectively.

The Company's valuation allowance for charitable contributions decreased by $ 2,639 in 2019 due to expiration of the carry forward period.

The remaining charitable contribution carry-forwards expire at various times between 2020 and 2024.

CNX continues to report, on an after federal tax basis, a deferred tax asset related to state operating losses of $ 130,430 with a related valuation allowance of $ 81,202 at December 31, 2019 .

CNX has, on an after federal tax basis, a deferred tax asset related to state operating losses of $ 129,641 with a related valuation allowance of $ 79,197 at December 31, 2020.

The deferred tax asset related to state operating losses, on an after-tax adjusted basis, was $ 130,430 with a related valuation allowance of $ 81,202 at December 31, 2019.

A review of positive and negative evidence regarding these state tax benefits concluded that the valuation allowances for various CNX subsidiaries was warranted.

These NOLs expire at various times between 2020 and 2039.

These net operating losses (NOLs) expire at various times between 2021 and 2040.

Management will continue to assess the potential for realized deferred tax assets based upon income forecast data and the feasibility of future tax planning strategies and may record adjustments to valuation allowances against deferred tax assets in future periods, as appropriate, that could materially impact net income.

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For the Years Ended December 31,

2020 2019 2018

Amount Percent Amount Percent Amount Percent

Statutory U.S.

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Uncertain Tax Positions 375 ( 0.1 ) — — ( 4,265 ) ( 0.4 )

Effect of Spin on Federal NOL's

Accrual to Tax Return Reconciliation

13 — 603 1.0 3,028 0.3

Effect of Equity Compensation 4,311 ( 0.7 ) 8,771 14.7 — —

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Effect of Federal Tax Credits ( 6,284 ) 1.0 2,881 4.8 1,208 0.1

Income Tax Expense (Benefit) / Effective Rate

Other 225 — 211 0.4 4,498 0.4

Income Tax (Benefit) Expense / Effective Rate $ ( 174,087 ) 28.9 % $ 27,736 46.5 % $ 215,557 19.6 %

The effective tax rate for the year ended December 31, 2020 was higher than the U.S.

federal statutory rate primarily due to state taxes, equity compensation, and the increase in certain state valuation allowances as a result of a higher than projected net operating loss generated in 2018 partially offset by the benefit from non-controlling interest.

federal statutory rate primarily due to state taxes, equity compensation, and the decrease in certain state valuation allowances as a result of the Merger transaction with CNXM partially offset by the benefit from non-controlling interest.

The effective tax rate for the year ended December 31, 2019 was higher than the U.S.

federal statutory rate primarily due to state taxes, equity compensation, and the increase in certain state valuation allowances as a result of the higher than projected net operating loss generated in 2018 partially offset by the benefit from non-controlling interest.

As a result of the Midstream Acquisition on January 3, 2018 as discussed in Note 4 - Acquisitions and Dispositions, the Company obtained a controlling interest in CNX Gathering LLC and, through CNX Gathering's ownership of the general partner, control over CNXM.

The financial results for 2019 and 2018 reflect full consolidation of CNXM’s assets and liabilities.

The financial results for 2018 through 2020 reflect full consolidation of CNXM’s assets and liabilities.

The effective tax rates for the years ended December 31, 2019 and 2018 reflect a $ 23,662 and $ 18,181 reduction in income tax expense, respectively, due to the non-controlling interest in CNXM’s earnings.

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federal statutory rate primarily due to the effect of the filing of a Federal NOL carryback for 2017 and 2016 resulting in a financial statement benefit of $ 23,483 through the realization of the Federal NOLs at a 35% tax rate as a carryback versus the current 21% tax rate as a carryforward, the reversal of the AMT credit sequestration valuation allowance, and the release of certain state valuation allowances as a result of a corporate reorganization during the year.

The federal NOL carryback claims for 2016 and 2017 are under review by the IRS and the Joint Committee on Taxation.

The Act, which, among other things, lowered the U.S.

The federal NOL carryback claims for 2016 and 2017 were subject to a review by the IRS and the Joint Committee on Taxation which has since been completed.

The TCJA Act, which, among other things, lowered the U.S.

Federal corporate income tax rate from 35% to 21%, repealed the corporate AMT for tax years beginning January 1, 2018, and provided for a refund of previously accrued AMT credits.

As discussed above, CNX has credits that are to be refunded between 2019 and 2021 because of the Act and monetization opportunities under current law in 2018.

The Company recorded a net tax benefit to reflect the impact of the Act as of December 31, 2017, as it is required to reflect the change in the period in which the law is enacted.

Largely, the benefits recorded in the period ending December 31, 2017 related to the Act are in recognition of the revaluation of deferred tax assets and liabilities, a benefit of $ 115,291 .

The Company's effective tax rate for 2018 and 2017 reflects the release of previously recorded valuation allowances against AMT credit carry-forwards of $ 12,413 and $ 154,385 , respectively, as those credits will now be able to be monetized under the Act and, according to an IRS announcement, are no longer subject to government sequestration.

The Act is also a comprehensive tax reform bill containing a number of other provisions that either currently or in the future could impact CNX.

The effect of certain limitations effective for the tax year 2018 and forward, specifically related to the deductibility of executive compensation, have been evaluated.

The Company anticipates U.S.

regulatory agencies will issue further regulations which may alter these estimates.

The IRS issued rules pertaining to the application of limitations for executive compensation related to contracts existing prior to November 2, 2017, and provisions in the Act addressing the deductibility of interest expense after January 1, 2018.

The Company will continue to refine its estimates to incorporate new or better information as it comes available.

Under the provisions of Staff Accounting Bulletin 118 (SAB 118), as of December 31, 2017, we had not completed our accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes, for the remeasurement of

deferred tax assets and liabilities.

As of December 31, 2018, CNX completed its accounting for all of the enactment-date income tax effects of the Act.

The Company's effective tax rate for 2018 reflects the release of previously recorded valuation allowances against AMT credit carry-forwards of $ 12,413 , as those credits were able to be monetized under the TCJA Act.

This ASU removes the following exceptions:

(1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items;

(2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment;

(3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary;

and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.

The amendments in this ASU also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance.

The amendments in this ASU were applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

The Company early adopted ASU 2019-12 as of January 1, 2020.

A reconciliation of the beginning and ending gross amounts of unrecognized tax benefits is as follows:

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Balance at End of Period $ 31,891 $ 31,516

If these unrecognized tax benefits were recognized, $ 31,516 would affect CNX's effective income tax rate for 2019 and 2018 .

In 2018, CNX recognized an increase in unrecognized tax benefits of $ 2,140 for tax benefits resulting from a revision to our tax position taken on our 2017 federal tax return for the marginal well credit.

CNX recognized a reduction to unrecognized tax benefits of $ 8,437 from a position taken on a state tax return.

If these unrecognized tax benefits were recognized, $ 31,891 and $ 31,516 would affect CNX's effective income tax rate for 2020 and 2019, respectively.

In 2020, CNX recognized an increase in unrecognized tax benefits of $ 1,726 for tax benefits resulting from a tax position taken on our 2019 federal tax return for additional tax credits.

CNX recognized a reduction to unrecognized tax benefits of $ 1,351 due to the expiration of the statute of limitations from a position taken on a previously filed federal income tax return.

CNX recognizes accrued interest related to unrecognized tax benefits in its interest expense.

As of December 31, 2020 and 2019, the Company reported no accrued liability relating to uncertain tax positions in Other Liabilities in the Consolidated Balance Sheets.

The accrued interest liability includes interest income of $ 644 and interest expense of $ 337 recorded in the Company's Consolidated Statements of Income for the year ended December 31, 2018.

During the years ended December 31, 2020 and 2019, CNX paid no interest related to income tax deficiencies.

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income tax examinations by tax authorities for the years before 2018.

The Joint Committee on Taxation is in the process of reviewing the NOL carryback returns for tax years 2016 and 2017.

The review is expected to be completed in 2020.

The Joint Committee on Taxation concluded its review of the audit of tax year 2015 on March 21, 2018.

The audit resulted in a $ 108,651 reduction to CNX’s NOL, primarily due to a reduction in the depreciation as an offset to the bonus depreciation taken in the 2010-2013 IRS audit.

There was no current cash tax impact from the audit.

NOTE 7— ASSET RETIREMENT OBLIGATIONS:

The reconciliation of changes in asset retirement obligations is as follows:

As of December 31,

Balance, Beginning of Year $ 68,454 $ 38,554

Obligations Divested (Note 6)

Obligations Divested ( 703 ) —

Accretion Expense 11,067 9,458

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Surface Land and Other Equipment 199,322 226,285

Other 189,645 187,722

Total Property, Plant and Equipment 10,963,996 10,572,006

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Advance Royalties 9,676 12,770

As of December 31, 2019 and 2018 , Property, Plant and Equipment includes a gross asset related to finance leases of $ 72,916 and $ 73,144 , respectively.

Included in Gas Gathering Equipment is a finance lease for the Jewell Ridge Pipeline of $ 66,919 at December 31, 2019 and 2018 .

CNX also maintains finance leases for vehicles of $ 5,997 and $ 6,225 at December 31, 2019 and 2018 , respectively, which is included in Other.

Accumulated amortization for finance leases was $ 63,008 and $ 59,517 at December 31, 2019 and 2018 , respectively.

Amortization expense for finance leases is included in Depreciation, Depletion and Amortization in the Consolidated Statements of Income.

See Note 15 - Leases for further discussion of finance leases.

Total $ 735,381 $ 768,360

NOTE 9— GOODWILL AND OTHER INTANGIBLE ASSETS:

In connection with the Midstream Acquisition that closed on January 3, 2018 (see Note 4 - Acquisitions and Dispositions for more information), CNX recorded $ 796,359 of goodwill and $ 128,781 of other intangible assets which are comprised of customer relationships.

All goodwill is attributed to the Midstream reportable segment.

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 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.

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.

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 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 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 recorded, which was included in Impairment of Goodwill in the accompanying Consolidated Statements of Income.

As a result of this assessment, we concluded that the estimated fair value exceeded carrying value, and accordingly no adjustment to goodwill was necessary.

However, the margin by which the fair value of the Midstream reporting unit exceeded its carrying value was less than 10%.

As a result, this reporting unit is susceptible to impairment risk from further adverse macroeconomic conditions or other adverse factors such as future gathering volumes being less than those currently estimated.

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.

The estimates of future cash flows are subjective in nature and are subject to impacts from business risks as described in “Item 1A.

Risk Factors”.

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:

December 31, 2019 $ 796,359

Impairment 473,045

December 31, 2020 $ 323,314

Other Intangible Assets

The carrying amount and accumulated amortization of other intangible assets consist of the following:

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Accordingly, CNX recognized an impairment on this intangible asset of $ 18,650 .

There were no such impairments in the current period.

There were no such impairments during the years ended December 31, 2020 and 2019.

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 $ 6,553 and $ 6,931 for the years ended December 31, 2019 and 2018 , respectively.

There was no such expense for the year ended December 31, 2017.

Amortization expense related to other intangible assets was $ 6,552 for each of the years ended December 31, 2020 and 2019, and $ 6,931 for the year ended December 31, 2018.

The estimated annual amortization expense is expected to approximate $ 6,552 per year for each of the next five years.

NOTE 10— REVOLVING CREDIT FACILITIES:

CNX Resources Corporation (CNX)

In April 2019, CNX amended its senior secured revolving credit facility ("Credit Facility") and extended its maturity to April 2024.

The lenders' commitments remained unchanged at $ 2,100,000 , with an accordion feature that allows the Company to increase the commitments to $ 3,000,000 .

The borrowing base was reaffirmed at $ 2,100,000 , including a $ 650,000 letters of credit aggregate sub-limit.

In April 2019, CNX amended its senior revolving credit facility ("Credit Facility") and extended its maturity to April 2024.

The lenders' commitments remained unchanged at $ 2,100,000 , with an accordion feature that allows the Company to increase commitments to $ 3,000,000 .

In addition, the cumulative credit basket for dividends and distributions was replaced with a basket for dividends and distributions subject to a pro forma net leverage ratio of at least 3.00 to 1.00 and availability under the Credit Facility of at least 15 % of the aggregate commitments.

If the aggregate principal amount of the existing 5.875 % Senior Notes due in April 2022 and certain other publicly traded debt securities outstanding 91 days prior to the earliest maturity of such debt (the "Springing Maturity Date") is greater than $ 500,000 , then the Credit Facility will mature on the Springing Maturity Date.

In October 2019, as part of the semi-annual borrowing base redetermination, the lenders increased CNX's borrowing base to $ 2,300,000 , including maintaining a $ 650,000 letters of credit sub-limit.

Under the terms of the amended agreement, borrowings under the revolving credit facility will bear interest at CNX's option at either:

In April 2020, as part of the semi-annual borrowing base redetermination, both the lenders' commitments and borrowing base decreased to $ 1,900,000 , and the $ 650,000 letters of credit aggregate sub-limit remained unchanged.

The amount of cash on hand that CNX may have is also limited to $ 150,000 when loans under the credit agreement are outstanding, subject to certain exceptions.

In October 2020, as part of the semi-annual borrowing base redetermination, the lenders reaffirmed CNX's $ 1,900,000 borrowing base.

In November 2020, as part of the issuance of the $ 500,000 of 6.00 % Senior Notes due January 2029 (See Note 12 - Long-Term Debt), both the lenders' commitments and borrowing base decreased to $ 1,775,000 .

The CNX Credit Facility is secured by substantially all of the assets of CNX and certain of its subsidiaries (excluding the certain excluded subsidiaries, which includes Cardinal States Gathering LLC, CNX Midstream GP LLC and CNXM, and their respective subsidiaries).

Under the terms of the agreement, 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 %;

• the LIBOR rate, which is the LIBOR rate plus a margin ranging from 1.75 % to 2.75 %.

The CNX Credit Facility is secured by substantially all of the assets of CNX and certain of its subsidiaries (excluding the Excluded Subsidiaries, which includes CNX Midstream GP LLC and CNXM and their respective subsidiaries).

Fees and interest rate spreads are based on the percentage of facility utilization, measured quarterly.

Availability under the Credit Facility is limited to a borrowing base, which is determined by the lenders' syndication agent and approved by the required number of lenders in good faith by calculating a value of CNX's proved natural gas reserves.

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 and amend the senior unsecured notes.

6 unchanged sentences

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.

At December 31, 2018 , the CNX Credit Facility had $ 612,000 borrowings outstanding and $ 198,396 letters of credit outstanding, leaving $ 1,289,604 of unused capacity.

At December 31, 2019, the CNX Credit Facility had $ 661,000 of borrowings outstanding and $ 204,726 of letters of credit outstanding, leaving $ 1,234,274 of unused capacity.

CNX Midstream Partners LP (CNXM)

In April 2019, CNXM amended its senior secured revolving credit facility and extended its maturity to April 2024.

CNXM's revolving credit facility was not impacted by the Merger (See Note 4 - Acquisitions and Dispositions).

In April 2019, CNXM amended its senior secured revolving credit facility (the “CNXM Credit Facility”) and extended its maturity to April 2024.

The lenders' commitments remained unchanged at $ 600,000 , with an accordion feature that allows CNXM to increase the available borrowings by up to an additional $ 250,000 under certain terms and conditions.

Among other things, the revolving credit facility now includes (i) the addition of a restricted payment basket permitting cash repurchases of Incentive Distribution Rights (IDRs)

subject to a pro forma secured leverage ratio of 3.00 to 1.00, a pro forma total leverage ratio of 4.00 to 1.00 and pro forma availability of 20 % of commitments and (ii) a restricted payment basket for the repurchase of LP units not to exceed Available Cash (as defined in the partnership agreement) in any quarter, of up to $ 150,000 per year and up to $ 200,000 during the life of the facility.

Under the terms of the amended agreement, borrowings under the revolving credit facility will bear interest at CNXM's option at either:

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 will bear interest at CNXM's option at either:

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Fees and interest rate spreads under the CNXM Credit Facility are based on the total leverage ratio, measured quarterly.

The CNXM credit facility includes the ability to issue letters of credit up to $ 100,000 in the aggregate.

The CNXM revolving credit facility contains a number of affirmative and negative covenants that include, among others, covenants that, except in certain circumstances, restrict the ability of CNXM, its subsidiary guarantors and certain of its non-guarantor, non-wholly-owned subsidiaries, except in certain circumstances, to:

(i) create, incur, assume or suffer to exist indebtedness;

(ii) create or permit to exist liens on their properties;

(iii) prepay certain indebtedness unless there is no default or event of default under the revolving facility;

(iv) make or pay any dividends or distributions in excess of certain amounts;

(v) merge with or into another person, liquidate or dissolve;

or acquire all or substantially all of the assets of any going concern or going line of business or acquire all or a substantial portion of another person’s assets;

(vi) make particular investments and loans;

(vii) sell, transfer, convey, assign or dispose of its assets or properties other than in the ordinary course of business and other select instances;

(viii) deal with any affiliate except in the ordinary course of business on terms no less favorable to CNXM than it would otherwise receive in an arm’s length transaction;

and (ix) amend in any material manner its certificate of incorporation, bylaws, or other organizational documents without giving prior notice to the lenders and, in some cases, obtaining the consent of the lenders.

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 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);

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);

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CNXM was in compliance with all financial covenants as of December 31, 2020.

The CNXM revolving 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 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 facility are secured by substantially all of the assets of CNXM and its wholly-owned subsidiaries.

CNX is not a guarantor under the revolving credit facility.

At December 31, 2019 , the CNXM credit facility had $ 311,750 of borrowings outstanding.

CNXM had the maximum amount of revolving credit available for borrowing at December 31, 2019 , or $ 288,250 .

At December 31, 2018 , the CNXM credit facility had $ 84,000 of borrowings outstanding.

CNX is not a guarantor under the CNXM Credit Facility.

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.

At December 31, 2019, the CNXM Credit Facility had $ 311,750 of borrowings outstanding, leaving $ 288,250 of unused capacity.

NOTE 11— OTHER ACCRUED LIABILITIES:

Royalties $ 72,401 $ 74,061

Accrued Interest 26,549 30,862

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Accrued Payroll & Benefits 5,009 6,248

Other 26,697 37,610

Current Portion of Long-Term Liabilities:

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NOTE 12— LONG-TERM DEBT:

Senior Notes due April 2022 at 5.875% (Principal of $894,307 and $1,294,307 plus Unamortized Premium of $1,001 and $2,069, respectively)

CNX Credit Facility

Senior Notes due March 2027 at 7.25%, Issued at Par Value

Senior Notes due March 2027 at 7.25 % (Principal of $ 700,000 and $ 500,000 , respectively, plus Unamortized Premium of $ 6,686 at December 31, 2020)

$ 706,686 $ 500,000

Senior Notes due January 2029 at 6.00 %, Issued at Par Value

CNX Midstream Partners LP Senior Notes due March 2026 at 6.50 % (Principal of $ 400,000 less Unamortized Discount of $ 3,875 and $ 4,625 , respectively)*

396,125 395,375

CNX Midstream Partners LP Revolving Credit Facility* 291,000 311,750

Convertible Senior Notes due May 2026 at 2.25 % (Principal of $ 345,000 less Unamortized Discount and Issuance Costs of $ 107,735 )

CNX Revolving Credit Facility 160,800 661,000

Cardinal States Gathering Company Credit Facility maturing in March 2028 (Principal of $ 114,985 less Unamortized Discount of $ 1,126 )

CSG Holdings II LLC Credit Facility maturing in March 2027 (Principal of $ 45,559 less Unamortized Discount of $ 441 )

Senior Notes due April 2022 at 5.875 % (Principal of $ 894,307 plus Unamortized Premium of $ 1,001 at December 31, 2019)

Unamortized Debt Issuance Costs 26,852 8,990

2,424,001 2,754,443

Amounts Due in One Year 22,574 —

Long-Term Debt $ 2,401,427 $ 2,754,443

*CNX is not a guarantor of CNXM's 6.50 % senior notes due in March 2026 or CNXM's senior secured revolving credit facility.

At December 31, 2019, a nnual undiscounted maturities of CNX and CNXM long-term debt during the next five years and thereafter are as follows:

Year ended December 31,

*CNX is not a guarantor of CNXM's 6.50% Senior Notes due March 2026 or CNXM's Credit Facility.

CNXM's Credit Facility and the CNXM Senior Notes were not impacted by the Merger (See Note 4 - Acquisitions and Dispositions).

At December 31, 2020, annual undiscounted maturities of CNX and CNXM long-term debt during the next five years and thereafter are as follows:

Year ended December 31, Amount

2021 $ 22,574

Thereafter 1,989,166

Total Long-Term Debt Maturities $ 2,557,344

During the year ended December 31, 2019 , CNX completed a private offering of $ 500,000 of 7.25 % senior notes due in March 2027 .

The notes are guaranteed by most of CNX's subsidiaries but do not include CNXM's general partner or CNXM.

During the year ended December 31, 2019 , CNX purchased $ 400,000 of its outstanding 5.875 % senior notes due in April 2022 .

As part of this transaction, a loss of $ 7,614 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2018 , CNXM completed a private offering of $ 400,000 of 6.50 % senior notes due in March 2026 less $ 6,000 of unamortized bond discount.

CNX is not a guarantor of CNXM's 6.50 % senior notes due in March 2026 or CNXM's senior secured revolving credit facility.

During the year ended December 31, 2018 , CNX purchased $ 411,375 of its outstanding 5.875 % senior notes due in April 2022 .

As part of this transaction, a loss of $ 15,320 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2018 , CNX called the $ 500,000 balance on its 8.00 % senior notes due in April 2023 .

As part of this transaction, a loss of $ 38,798 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2017 , CNX purchased $ 144,318 of its outstanding 5.875 % senior notes due in April 2022 .

As part of this transaction, a loss of $ 110 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2017 , CNX called the remaining $ 74,470 balance on its 8.25 % senior notes due in April 2020 and the remaining $ 20,611 balance on its 6.375 % senior notes due in March 2021 .

As part of these transactions, a loss of $ 2,019 was included in Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2020, CNX purchased and retired the remaining $ 894,307 of its outstanding 5.875 % Senior Notes due April 2022.

As part of this transaction, a gain of $ 10,101 was included in (Gain) Loss on Debt Extinguishment in the Consolidated Statements of Income.

In November 2020, CNX completed a private offering of $ 500,000 aggregate principal amount of 6.00 % Senior Notes due January 2029 (the “Senior Notes due January 2029”).

The notes, along with the related guarantees, were issued pursuant to an indenture, dated November 30, 2020, among the Company, the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee.

The notes accrue interest from November 30, 2020 at a rate of 6.00 % per year.

Interest is payable semi-annually in arrears on January 15 and July 15 of each year, beginning July 15, 2021.

The Senior Notes due January 2029 mature on January 15, 2029, subject to adjustment upon the occurrence of specified events.

The notes rank equally in right of payment with all of the Company’s existing and future senior indebtedness and senior to any subordinated indebtedness that the Company may incur.

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.

In September 2020, CNX completed a private offering of $ 200,000 aggregate principal amount of 7.25 % Senior Notes due March 2027 (the “Senior Notes due March 2027s”) plus $ 7,000 of unamortized bond premium at a price of 103.5 % of par with an effective yield of 6.34 %.

The notes, along with the related guarantees, were issued pursuant to an indenture, dated March 14, 2019.

The notes accrue interest from September 14, 2020 at a rate of 7.25 % per year.

Interest is payable semi-annually in arrears on March 14 and September 14 of each year, beginning March 14, 2021.

The notes mature on March 14, 2027.

The Senior Notes due March 2027 rank equally in right of payment with all of the Company’s existing and future senior indebtedness and senior to any subordinated indebtedness that the Company may incur.

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.

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 were issued pursuant to an indenture and 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.

The Convertible Notes will mature on May 1, 2026, unless earlier repurchased, redeemed or converted.

Before February 1, 2026, note holders will have the right to convert their Convertible Notes only upon the occurrence of the following events:

• during any calendar quarter (and only during such calendar quarter) commencing after 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 we call 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;

• upon the occurrence of certain specified corporate events as set forth in the indenture governing the Convertible Notes.

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

Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the indenture governing the Convertible Notes.

The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the indenture governing the Convertible Notes.

In addition, following certain corporate events, as described in the indenture governing the Convertible Notes, that occur prior to the maturity date, the Company will increase the conversion rate, in certain circumstances, for a holder who elects to convert its Convertible Notes in connection with such a corporate event.

The Company 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 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 year ended December 31, 2020, the conditions allowing holders of the Convertible Notes to exercise their conversion right were not met and as of December 31, 2020, the notes were not convertible.

The Convertible Notes are therefore classified as long-term debt at December 31, 2020.

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.

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

December 31, 2020

Liability Component:

Principal $ 345,000

Unamortized Discount ( 101,367 )

Unamortized Issuance Costs ( 6,368 )

Net Carrying Amount $ 237,265

Equity Component, net of Purchase Discounts and Issuance Costs 78,317

Interest expense related to the Convertible Notes is as follows:

For the Year Ended

December 31, 2020

Contractual Interest Expense $ 5,175

Amortization of Debt Discount 9,516

Amortization of Issuance Costs 655

Total Interest Expense $ 15,346

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.

The impact of the Capped Calls related to stockholders’ equity has been included in Capital in Excess of Par Value in the Consolidated Statement of Stockholders Equity and includes taxes in the amount of $ 9,322 , for a net impact of $ 26,351 .

During the year ended December 31, 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 year ended December 31, 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 year ended December 31, 2019, CNX completed a private offering of $ 500,000 of 7.25 % Senior Notes due March 2027.

The notes are guaranteed by most of CNX's subsidiaries but do not include CNXM (or its subsidiaries or general partner).

During the year ended December 31, 2019, CNX purchased and retired $ 400,000 of its outstanding 5.875 % Senior Notes due April 2022.

As part of this transaction, a loss of $ 7,614 was included in (Gain) Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2018, CNX purchased and retired $ 411,375 of its outstanding 5.875 % Senior Notes due April 2022.

As part of this transaction, a loss of $ 15,320 was included in (Gain) Loss on Debt Extinguishment in the Consolidated Statements of Income.

During the year ended December 31, 2018, CNX called the $ 500,000 balance on its 8.00 % Senior Notes due April 2023.

As part of this transaction, a loss of $ 38,798 was included in (Gain) Loss on Debt Extinguishment in the Consolidated Statements of Income.

NOTE 13— LEASES:

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CNX elected the transition relief package of practical expedients by applying previous accounting conclusions under ASC 840 to all leases that existed prior to the transition date.

As a result, CNX did not reassess 1) whether existing or expired contracts contain leases, 2) lease classification for any existing or expired leases or 3) whether lease origination costs qualified as initial direct costs.

As a result, CNX did not reassess 1) whether existing or expired contracts contain

leases, 2) lease classification for any existing or expired leases or 3) whether lease origination costs qualified as initial direct costs.

Additionally, the Company elected the short-term practical expedient for all asset classes by establishing an accounting policy to exclude leases with a term of 12 months or less.

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The components of lease cost were as follows:

For the Year Ended

December 31, 2019

For the Years Ended December 31,

Operating Lease Cost $ 74,703 $ 73,809

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Total Lease Cost $ 93,287 $ 103,176

*Amount recognized in the Consolidated Balance Sheet for natural gas drilling rigs are measured using the rates that would be paid if the rigs were idle, as this represents the minimum payment that could be made under the contract.

*Amounts recognized in the Consolidated Balance Sheets for natural gas drilling rigs are measured using the rates that would be paid if the rigs were idle, as this represents the minimum payment that could be made under the contract.

Variable lease cost represents amounts paid for natural gas drilling rigs above this minimum when the rigs are in use.

Amount recognized in the Consolidated Balance Sheet for electric fracturing equipment are measured using minimum pumping hours under the contract;

Amounts recognized in the Consolidated Balance Sheets for electric fracturing equipment are measured using minimum pumping hours under the contract;

however, pumping hours may exceed the minimum and vary period to period.

Any such amounts paid related to pumping hours in excess of the minimum represent variable lease cost.

Rental expense under operating leases prior to the adoption of ASC 842 was $ 21,441 and $ 16,797 for the years ended December 31, 2018 and 2017, respectively.

Amounts recognized in the Consolidated Balance Sheet are as follows:

December 31, 2019

Rental expense under operating leases prior to the adoption of ASC 842 was $ 21,441 for the year ended December 31, 2018.

Amounts recognized in the Consolidated Balance Sheets are as follows:

Operating Leases:

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Total Operating Lease Liabilities

$ 105,810 $ 172,136

Finance Leases:

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Property, Plant and Equipment—Net

$ 5,145 $ 9,908

Current Portion of Finance Lease Obligations $ 6,876 $ 7,164

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Total Finance Lease Liabilities

$ 7,933 $ 14,870

Supplemental cash flow information related to leases was as follows:

For the Year Ended

December 31, 2019

For the Years Ended December 31,

Cash Paid for Amounts Included in the Measurement of Lease Liabilities:

Operating Cash Flows from Operating Leases

$ 62,610 $ 66,827

Operating Cash Flows from Finance Leases

$ 739 $ 1,241

Financing Cash Flows from Finance Leases

$ 7,155 $ 7,149

Right-of-Use Assets Obtained in Exchange for Lease Obligations:

Operating Leases

$ 4,027 $ 15,347

Finance Leases

$ 257 $ 1,846

Maturities of lease liabilities are as follows:

Operating Finance

Leases Leases

Year Ended December 31,

2021 $ 56,190 $ 7,138

2022 21,592 446

2023 5,453 442

2024 5,433 155

2025 4,824 38

Thereafter 25,996 40

Total Lease Payments 119,488 8,259

Interest 13,678 326

Present Value of Lease Liabilities $ 105,810 $ 7,933

Lease terms and discount rates are as follows:

December 31, 2019

Weighted Average Remaining Lease Term (years):

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Operating Leases

4.40 % 4.96 %

Finance Leases

6.33 % 6.92 %

NOTE 14— PENSION:

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The freezing of the plan triggered a curtailment gain of $ 416 during the year ended December 31, 2018.

The current portion of the pension obligation is included in Other Accrued Liabilities and the noncurrent portion is included in Other liabilities in the Consolidated Balances Sheets.

The current portion of the pension obligation is included in Other Accrued Liabilities and the noncurrent portion is included in Other Liabilities in the Consolidated Balance Sheets.

The reconciliation of changes in the benefit obligation, plan assets and funded status of the pension benefits is as follows:

1 unchanged sentence

Benefit Obligation at Beginning of Period

$ 40,196 $ 33,569

Interest Cost

Actuarial Loss (Gain)

Actuarial Loss 4,098 4,865

Plan Amendments

Plan Curtailments

Benefits and Other Payments

( 1,644 ) ( 1,513 )

Benefit Obligation at End of Period $ 44,076 $ 40,196

3 unchanged sentences

Benefits and Other Payments

( 1,644 ) ( 1,513 )

Fair Value of Plan Assets at End of Period $ — $ —

1 unchanged sentence

Current Liabilities

$ ( 1,787 ) $ ( 1,587 )

Noncurrent Liabilities

( 42,289 ) ( 38,609 )

Net Obligation Recognized $ ( 44,076 ) $ ( 40,196 )

1 unchanged sentence

Net Actuarial Loss

Prior Service Cost (Credit)

$ 19,075 $ 15,361

Prior Service Cost 1,506 1,727

20,581 17,088

Net Amount Recognized $ 15,184 $ 12,605

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For the Years Ended December 31,

2020 2019 2018

Components of Net Periodic Benefit Cost:

$ 247 $ 209 $ 302

Interest Cost

Amortization of Prior Service Credits

1,179 1,338 1,265

Amortization of Prior Service Cost (Credit) 221 ( 17 ) ( 193 )

Recognized Net Actuarial Loss

1 unchanged sentence

Net Periodic Benefit Cost $ 2,030 $ 1,772 $ 1,823

Amounts included in accumulated other comprehensive loss which are expected to be recognized in 2020 net periodic benefit cost:

Prior Service Cost Recognition

Actuarial Loss Recognition

CNX utilizes a corridor approach to amortize actuarial gains and losses that have been accumulated under the pension plan.

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Rate of Compensation Increase — % — %

Interest Credited Rate 2.26 % 3.01 %

The discount rates are determined using a Company-specific yield curve model (above-mean) developed with the assistance of an external actuary.

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For the Years ended December 31,

2020 2019 2018

Discount Rate 3.36 % 4.37 % 4.28 %

Rate of Compensation Increase — % 3.63 % 4.05 %

CNX expects to pay benefits of $ 1,588 from the non-qualified pension plan in 2020.

Interest Credited Rate 2.47 % 3.39 % 3.94 %

The following benefit payments, which reflect expected future service, are expected to be paid:

Year ended December 31,

Year ended December 31, Benefits

Year 2026-2030 $ 11,172

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Amendments to the Equity Incentive Plan have been adopted and approved by the Board of Directors and the Company's shareholders since the commencement of the Equity Incentive Plan.

Most recently, in May 2016, the Company's Shareholders adopted and approved a 10,550,000 increase to the total number of shares available for issuance, which brought the total number of shares of common stock that can be covered by grants in accordance with the terms of the Equity Incentive Plan, after adjustment for the separation of the coal business from the gas business on November 28, 2017, to 48,915,944 .

Most recently, in May 2020 the Company's Shareholders adopted and approved a 10,775,000 increase to the total number of shares available for issuance.

At December 31, 2020, 14,081,055 shares of common stock remained available for grant under the plan.

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Options and RSUs vest over a three-year term.

PSUs vest over a five-year term at 20 % per year subject to performance conditions.

PSUs granted in 2016-2019 vest over a five-year term at 20 % per year and PSUs granted in 2020 vest over a three-year term at 33.3 % per year subject to performance conditions.

If an employee leaves the Company, all unvested shares are forfeited.

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The total stock-based compensation expense recognized relating to CNX shares during the years ended December 31, 2020, 2019 and 2018 was $ 12,897 , $ 36,545 and $ 18,930 , respectively.

The related deferred tax benefit totaled $ 2,134 , $ 3,955 , $ 4,169 , respectively.

As of December 31, 2020, CNX has $ 10,830 of unrecognized compensation cost related to all non-vested stock-based compensation awards, which is expected to be recognized over a weighted-average period of 1.82 years.

When stock options are exercised, and restricted and performance stock unit awards become vested, the issuances are made from CNX's common stock shares.

Pursuant to the terms of the CNX Equity Plan and the outstanding awards, in the event of certain changes in the outstanding common stock of CNX or its capital structure, including by reason of a spin-off, the administrator of the CNX Equity Plan is required to appropriately adjust the number, exercise price, kind of shares, performance goals or other terms and conditions of Awards granted thereunder.

In connection with the Separation, the Board of Directors of CNX has determined that it is appropriate that the outstanding awards be equitably adjusted pursuant to the terms of the CNX Equity Plan and/or converted into awards issued under the CONSOL Energy Inc.

(CEIX) Equity Incentive Plan, such that the intrinsic value of the outstanding awards immediately following the separation remains the same as the intrinsic value of such awards immediately prior to the Separation.

The separation resulted in a modification of the equity plans but did not have a material impact on the financial statements as of the date of Separation (See Note 5 - Discontinued Operations for more information).

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 will be subject to the same vesting, forfeiture and other terms and conditions applicable to the converted CNXM phantom units.

Stock Options:

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The total fair value of options granted during the years ended December 31, 2020, 2019 and 2018 was $ 1,066 , $ 50 , and $ 143 respectively, based on the following assumptions and weighted average fair values:

2020 2019 2018

Weighted Average Fair Value of Grants $ 3.56 $ 3.48 $ 6.50

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A summary of the status of stock options granted is presented below:

Weighted Remaining Aggregate

Average Contractual Intrinsic

Exercise Term (in Value (in

Shares Price years) thousands)

Outstanding at December 31, 2019 4,696,264 $ 18.05

Granted 299,541 $ 10.46

Exercised ( 298,513 ) $ 6.87

Forfeited ( 3,561 ) $ 10.53

Expired ( 493,222 ) $ 43.53

Outstanding at December 31, 2020 4,200,509 $ 15.32 4.18 $ 9,430

Exercisable at December 31, 2020 3,908,444 $ 15.68 3.81 $ 9,330

At December 31, 2019 , there are 4,224,415 employee stock options outstanding under the Equity Incentive Plan.

At December 31, 2020, there were 3,710,157 employee stock options outstanding under the Equity Incentive Plan.

Non-employee director stock options vest one year after the grant date.

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The following table represents the nonvested restricted stock units and their corresponding fair value (based upon the closing share price) at the date of grant:

Weighted Average

Grant Date Fair Value

Number of Weighted Average

Shares Grant Date Fair Value

Nonvested at December 31, 2019 1,033,200 $ 11.71

Granted 1,251,065 $ 8.49

RSUs granted in conversion, as a result of the CNXM Merger 204,619 $ 18.01

Vested ( 577,834 ) $ 10.95

Forfeited ( 39,923 ) $ 9.65

Nonvested at December 31, 2020 1,871,127 $ 10.10

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The following table represents the nonvested performance share units and their corresponding fair value (based upon the Monte Carlo Methodology) on the date of grant:

Weighted Average

Grant Date Fair Value

Number of Weighted Average

Shares Grant Date Fair Value

Nonvested at December 31, 2019 1,400,836 $ 18.91

PSUs Issued as a Result of 200% Payout

Granted 660,634 $ 5.79

PSUs Issued 112,158 $ 20.39

Vested ( 274,716 ) $ 20.82

Forfeited ( 131,474 ) $ 18.37

Nonvested at December 31, 2020 1,767,438 $ 13.85

Performance Options:

Under the Equity Incentive Plan in 2010, CNX granted certain employees performance options, which entitled the holder to shares of common stock subject to the achievement of certain performance goals.

Under the Equity Incentive Plan, CNX granted certain employees performance options in 2010, which entitled the holder to shares of common stock subject to the achievement of certain performance goals.

Compensation expense was recognized over the vesting period of the options.

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There have been no performance options granted since 2010.

There were 927,268 performance options outstanding and exercisable at a weighted average exercise price of $ 39.00 and a weighted average remaining contractual term of 0.46 years as of December 31, 2019 .

The 927,268 performance options that were outstanding and exercisable at a weighted average exercise price of $ 39.00 at December 31, 2019 expired as of December 31, 2020.

NOTE 16— SUPPLEMENTAL CASH FLOW INFORMATION:

The following are non-cash transactions that impact the investing and financing activities of CNX.

For non-cash transactions that relate to the separation, as well as acquisitions and dispositions, see Note 5 - Discontinued Operations and Note 6 - Acquisitions and Dispositions.

For non-cash transactions that relate to the separation, as well as acquisitions and dispositions, see Note 4 - Acquisitions and Dispositions.

As of December 31, 2020, 2019 and 2018, CNX purchased goods and services related to capital projects in the amount of $ 30,982 , $ 43,982 and $ 58,246 , respectively, which are included in accounts payable.

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For the Years Ended December 31,

2020 2019 2018

Interest (Net of Amounts Capitalized)

$ 141,992 $ 143,111 $ 144,756

$ ( 118,125 ) $ ( 138,409 ) $ ( 11,505 )

NOTE 17— CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS:

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NGL, Condensate & Processing Facilities

Other 5,752 7,699

Allowance for Credit Losses ( 84 ) —

Total Accounts Receivable Trade

As of December 31, 2019 , receivables of $ 23,859 and $ 15,401 due from Direct Energy Business Marketing LLC and NJR Energy Services Company , respectively, were included in the Gas Wholesalers balance above.

As of December 31, 2018 , receivables of $ 30,872 and $ 26,417 due from NJR Energy Services Company and Direct Energy Business Marketing LLC , respectively, were included.

$ 145,929 $ 133,480

As of December 31, 2020, a receivable of $ 19,995 due from Direct Energy Business Marketing LLC was included in the Gas Wholesalers balance above.

As of December 31, 2019, receivables of $ 23,859 and $ 15,401 due from Direct Energy Business Marketing LLC and NJR Energy Services Company, respectively, were included.

No other customers made up more than 10% of the total balances.

During the year ended December 31, 2020, sales to Direct Energy Business Marketing LLC were $ 167,390 , which comprised over 10% of the Company's revenue from contracts with external customers for the period.

During the year ended December 31, 2019, sales to Direct Energy Business Marketing LLC were $ 214,980 and sales to NJR Energy Services Company were $ 147,540 , each of which comprised over 10% of the Company's revenue from contracts with external customers for the period.

During the year ended December 31, 2018, sales to NJR Energy Services Company were $ 219,472 and sales to Direct Energy Business Marketing LLC were $ 184,668 , each of which comprised over 10% of the Company's revenue from contracts with external customers for the period.

During the year ended December 31, 2017 , sales to Direct Energy Business Marketing LLC were $ 153,565 and sales to NJR Energy Services Company were $ 147,595 , each of which comprised over 10% of the Company's revenue from contracts with external customers for the period.

NOTE 18— FAIR VALUE OF FINANCIAL INSTRUMENTS:

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The fair value hierarchy includes three levels of inputs that may be used to measure fair value as described below:

Level One - Quoted prices for identical instruments in active markets.

Level Two - 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 Three - Unobservable inputs significant to the fair value measurement supported by little or no market activity.

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

December 31, 2019

Fair Value Measurements at

December 31, 2018

Fair Value Measurements at December 31, 2020 Fair Value Measurements at December 31, 2019

Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Gas Derivatives $ — $ 117,545 $ — $ — $ 405,781 $ —

Interest Rate Swaps $ — $ ( 14,270 ) $ — $ — $ ( 1,219 ) $ —

The carrying amounts and fair values of financial instruments for which the fair value option was not elected are as follows:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Value Carrying

Cash and Cash Equivalents $ 15,617 $ 15,617 $ 16,283 $ 16,283

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NOTE 19— DERIVATIVE INSTRUMENTS:

In June 2019, CNX entered into an interest rate swap agreement to manage its exposure to interest rate volatility.

The interest rate swap agreement relates to $ 160,000 of borrowings under CNX’s senior secured revolving credit facility (See Note 12 - Revolving Credit Facilities) and has the economic effect of modifying the variable-interest obligation into a fixed-interest obligation over a three-year period.

The change in fair value of the interest rate swap agreement is accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

The fair value at December 31, 2019 and the corresponding change in fair value from inception through December 31, 2019 was nominal.

CNX enters into financial derivative instruments to manage its exposure to commodity price volatility.

These natural gas and NGL commodity hedges are accounted for on a mark-to-market basis with changes in fair value recorded in current period earnings.

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 are 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 12 - 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 10 - 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 zero basis points.

Also executed in March 2020 was a new four-year $ 250,000 interest rate swap inclusive of a put option at zero 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 commodity price volatility.

Typically, CNX “sells” swaps under which it receives a fixed price from counterparties and pays a floating market price.

During the second quarter of 2020, CNX purchased, rather than sold, financial swaps for the period May through November of 2020 under which CNX will pay a fixed price to and receive a floating price from its hedge counterparties.

Swaps purchased have the effect of reducing total hedged volumes for the period of the swap.

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.

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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 its counterparties.

However, as stated in the counterparty master agreements, if CNX's obligations with any 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.

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The total notional amounts of production of CNX's derivative instruments were as follows:

Forecasted to

December 31, Forecasted to

2020 2019 Settle Through

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Natural Gas Basis Swaps (Bcf) 1,294.1 1,290.4 2026

Interest Rate Swaps $ 569,972 $ 160,000 2028

The gross fair value of CNX's derivative instruments was as follows:

Asset Derivative Instruments

Liability Derivative Instruments

Commodity Swaps:

Current Assets:

Current Liabilities

Non-Current Liabilities

Total Liability

Commodity Derivative Instruments:

Commodity Swaps $ 53,668 $ 234,238

Basis Only Swaps 30,848 13,556

Current Assets

Interest Rate Swaps 141 —

Total Current Assets $ 84,657 $ 247,794

Other Non-Current Assets:

Commodity Derivative Instruments:

Commodity Swaps $ 134,661 $ 288,543

Basis Only Swaps 52,903 25,553

Interest Rate Swaps 673 —

Total Other Non-Current Assets $ 188,237 $ 314,096

Current Liabilities:

Commodity Derivative Instruments:

Commodity Swaps $ 23,506 $ 345

Basis Only Swaps 14,491 40,626

Interest Rate Swaps 4,332 495

Total Current Liabilities $ 42,329 $ 41,466

Non-Current Liabilities:

Total Liability

Commodity Derivative Instruments:

Commodity Swaps $ 59,388 $ 9,693

Basis Only Swaps 57,150 105,445

Interest Rate Swaps 10,752 724

Total Non-Current Liabilities $ 127,290 $ 115,862

The effect of derivative instruments on the Company's Consolidated Statements of Income was as follows:

For the Years Ended December 31,

2020 2019 2018

Cash Received (Paid) in Settlement of Commodity Derivative Instruments:

Commodity Swaps $ 390,547 $ 82,899 $ ( 41,098 )

Natural Gas Basis Swaps

Basis Swaps 70,670 ( 13,119 ) ( 28,622 )

Total Cash Received (Paid) in Settlement of Commodity Derivative Instruments 461,217 69,780 ( 69,720 )

Unrealized Gain (Loss) on Commodity Derivative Instruments:

Unrealized (Loss) Gain on Commodity Derivative Instruments:

Commodity Swaps ( 407,308 ) 406,472 33,026

Natural Gas Basis Swaps

Total Unrealized Gain on Commodity Derivative Instruments

Basis Swaps 119,073 ( 100,147 ) 6,482

Total Unrealized (Loss) Gain on Commodity Derivative Instruments ( 288,235 ) 306,325 39,508

Gain (Loss) on Commodity Derivative Instruments:

Commodity Swaps ( 16,761 ) 489,371 ( 8,072 )

Natural Gas Basis Swaps

Basis Swaps 189,743 ( 113,266 ) ( 22,140 )

Total Gain (Loss) on Commodity Derivative Instruments $ 172,982 $ 376,105 $ ( 30,212 )

The effect of interest rate swaps on Interest Expense in the Company's Consolidated Statements of Income was as follows:

For the Years Ended December 31,

Cash (Paid) Received in Settlement of Interest Rate Swaps $ ( 3,141 ) $ 223

Unrealized Loss on Interest Rate Swaps ( 13,051 ) ( 1,219 )

Loss on Interest Rate Swaps $ ( 16,192 ) $ ( 996 )

Cash Received (Paid) in Settlement of Commodity Derivative Instruments for the year ended December 31, 2020 includes $ 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 monetization 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.

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The Company's current estimated accruals related to these pending claims, individually and in the aggregate, are immaterial to the financial position, results of operations or cash flows of CNX.

It is possible that the aggregate loss in the future with respect to these lawsuits and claims could

ultimately be material to the financial position, results of operations or cash flows of CNX;

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

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.

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.

At December 31, 2020, 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.

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Amount of Commitment Expiration Per Period

Committed Less Than

1 Year 1-3 Years 3-5 Years Beyond

Letters of Credit:

Firm Transportation $ 178,352 $ 178,352 $ — $ — $ —

Other 6,950 6,950 — — —

Total Letters of Credit 185,302 185,302 — — —

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Financial Guarantees 81,670 81,670 — — —

Other 9,183 7,899 1,284 — —

Total Surety Bonds 105,900 104,356 1,544 — —

Total Commitments $ 291,202 $ 289,658 $ 1,544 $ — $ —

Excluded from the above table are commitments and guarantees entered into in conjunction with the spin-off of the Company's coal business (See Note 5 - Discontinued Operations).

Although CONSOL Energy 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 Energy will satisfy its obligations to indemnify CNX in the event that CNX is so called upon.

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.

Risk Factors” in this Form 10-K).

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.

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As of December 31, 2020, the purchase obligations for each of the next five years and beyond were as follows:

Obligations Due

Obligations Due Amount

Less than 1 year $ 253,692

1 - 3 years 431,282

3 - 5 years 390,693

More than 5 years 985,201

Total Purchase Obligations $ 2,060,868

NOTE 23— VARIABLE INTEREST ENTITIES:

The Company determined CNXM, of which the Company owned an approximately 34 % limited partner interest (prior to the IDR Elimination transaction - See Note 25 - Subsequent Event) and 100 % of the general partner interest, to be a variable interest entity.

As a result of the Midstream Acquisition (see Note 6 - Acquisitions and Dispositions), the Company has the power through the Company's ownership and control of CNXM's general partner (CNX Midstream GP LLC) to direct the activities that most significantly impact CNXM's economic performance.

In addition, through its limited partner interest in CNXM, the Company has the obligation to absorb the losses of CNXM and the right to receive benefits in accordance with such interests.

As the Company has a controlling financial interest and is the primary beneficiary of CNXM, the Company consolidated CNXM commencing January 3, 2018.

The risks associated with the operations of CNXM are discussed in its Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 10, 2020 and its other periodic reports filed thereafter.

The following table presents amounts included in the Company's Consolidated Balance Sheets that were for the use or obligation of CNXM:

Receivables - Related Party

Receivables - Third Party

Other Current Assets

Property, Plant and Equipment, net

Operating Lease ROU Asset

Accounts Payable and Accrued Liabilities

Accounts Payable - Related Party

Revolving Credit Facility

Long-Term Debt

Total Liabilities

The following table summarizes CNXM's Consolidated Statements of Operations and Cash Flows, inclusive of affiliate amounts:

For the Years Ended December 31,

Gathering Revenue - Related Party

Gathering Revenue - Third Party

Total Revenue

Operating Expense - Related Party

Operating Expense - Third Party

General and Administrative Expense - Related Party

General and Administrative Expense - Third Party

Loss on Asset Sales and Abandonments, net

Depreciation Expense

Interest Expense

Total Expense

Net Cash Provided by Operating Activities

Net Cash Used in Investing Activities

Net Cash Provided by (Used in) Financing Activities

Prior to the acquisition of Noble's interest on January 3, 2018, CNX accounted for its interests in CNX Gathering and CNXM as an equity-method investment.

The following transactions were included in Other Operating Income and Transportation, Gathering and Compression in the Consolidated Statements of Income:

For the Year Ended

December 31, 2017

Other Operating Income:

Equity in Earnings of Affiliates - CNX Gathering

Equity in Earnings of Affiliates - CNXM

Transportation, Gathering and Compression:

Gathering Services - CNX Gathering

Gathering Services - CNXM

In March 2018, CNXM closed on its acquisition of CNX's remaining 95 % interest in the gathering system and related assets commonly referred to as the Shirley-Penns System, in exchange for cash consideration in the amount of $ 265,000 .

CNXM funded the cash considerations with proceeds from the issuance of its 6.50 % senior notes due 2026 (See Note 14 - Long-Term Debt).

At December 31, 2019 and 2018 , CNX had a net payable of $ 16,362 and $ 12,202 , respectively, due to CNX Gathering and CNXM, primarily for accrued but unpaid gathering services.

NOTE 21— SEGMENT INFORMATION:

CNX consists of two principal business divisions:

Exploration and Production (E&P) and Midstream.

The principal activity of the E&P Division, which includes four reportable segments, is to produce pipeline quality natural gas for sale primarily to gas wholesalers.

The E&P Division's reportable segments are Marcellus Shale, Utica Shale, Coalbed Methane and Other Gas.

The Other Gas Segment is primarily related to shallow oil and gas production which is not significant to the Company due to the sale of substantially all of CNX's shallow oil and gas assets in the 2018 period (See Note 6 - Acquisitions and Dispositions for more information).

It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, exploration and production related other costs, impairments of exploration and production properties and unproved properties and expirations, as well as various other operating activities assigned to the E&P Division but not allocated to each individual segment.

CNX's Midstream Division's principal activity is the ownership, operation, development and acquisition of natural gas gathering and other midstream energy assets of CNX Gathering and CNXM, which provide natural gas gathering services for the Company's produced gas, as well as for other independent third-parties in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia.

Excluded from the Midstream Division are the gathering assets and operations of CNX that have not been contributed to CNX Gathering and CNXM.

As a result of the Midstream Acquisition (See Note 6 - Acquisitions and Dispositions for more information), CNX owns and controls 100 % of CNX Gathering, making CNXM a single-sponsor master limited partnership and thus the Company began consolidating CNXM on January 3, 2018.

The Midstream Division is comprised of a single Midstream segment.

The Company's unallocated expenses include other expense, gain on asset sales related to non-core assets, gain on previously held equity interest, loss on debt extinguishment, impairment of other intangible assets and income taxes.

In the preparation of the following information, intersegment sales have been recorded at amounts approximating market prices.

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 two 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.

Assets are reflected at the division level for E&P and are not allocated between each individual E&P segment.

These assets are not allocated to each individual segment due to the diverse asset base controlled by CNX, whereby each individual asset may service more than one segment within the division.

An allocation of such asset base would not be meaningful or representative on a segment by segment basis.

Prior to the Merger of CNXM that occurred in September 2020 (See Note 4 - Acquisitions and Dispositions), CNX consisted of two principal business divisions:

Exploration and Production (E&P) and Midstream.

The E&P Division included four reportable segments, Marcellus Shale, Utica Shale, Coalbed Methane and Other Gas.

Certain reclassifications of 2019 and 2018 segment information have been made to conform to the 2020 presentation.

Industry segment results for the year ended December 31, 2020 are:

Intercompany Eliminations

Natural Gas, NGLs and Oil Revenue

Shale Coalbed

Methane Other Consolidated

Natural Gas, NGLs and Oil Revenue $ 781,038 $ 114,366 $ 1,341 $ 896,745 (A)

Purchased Gas Revenue — — 105,792 105,792

Midstream Revenue

Gain on Commodity Derivative Instruments

Other Operating Income

Gain (Loss) on Commodity Derivative Instruments 337,269 39,884 ( 204,171 ) 172,982 (B)

Other Operating Income 64,710 — 17,749 82,459 (C)

Total Revenue and Other Operating Income $ 1,183,017 $ 154,250 $ ( 79,289 ) $ 1,257,978

Earnings (Loss) From Continuing Operations Before Income Tax

Segment Assets

Total Operating Expense $ 709,036 $ 127,845 $ 860,863 $ 1,697,744

Earnings (Loss) Before Income Tax $ 473,981 $ 26,405 $ ( 1,103,217 ) $ ( 602,831 )

Segment Assets $ 6,068,933 $ 1,095,816 $ 877,015 $ 8,041,764 (D)

Depreciation, Depletion and Amortization

$ 416,441 $ 69,745 $ 15,635 $ 501,821

Capital Expenditures $ 474,545 $ 9,789 $ 2,957 $ 487,291

Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 214,980 to Direct Energy Business Marketing LLC and $ 147,540 to NJR Energy Services Company, each of which comprises over 10% of revenue from contracts with external customers for the period.

Includes equity in earnings of unconsolidated affiliates of $ 2,103 for Total E&P.

Includes investments in unconsolidated equity affiliates of $ 16,710 for Total E&P.

(A) Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 167,390 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period.

(B) Included in Other is a realized gain on commodity derivative instruments of $ 83,997 related to the monetization of hedges (see Note 19 - Derivative Instruments for more information).

(C) Includes midstream revenue of $ 64,710 and equity in loss of unconsolidated affiliates of $ 688 for Shale and Other, respectively.

(D) Includes investments in unconsolidated equity affiliates of $ 16,022 .

Industry segment results for the year ended December 31, 2019 are:

Intercompany Eliminations

Natural Gas, NGLs and Oil Revenue

Shale Coalbed

Methane Other Consolidated

Natural Gas, NGLs and Oil Revenue $ 1,199,276 $ 163,893 $ 1,156 $ 1,364,325 (E)

Purchased Gas Revenue — — 94,027 94,027

Midstream Revenue

(Loss) Gain on Commodity Derivative Instruments

Other Operating Income

Gain on Commodity Derivative Instruments

62,418 7,335 306,352 376,105

Other Revenue and Operating Income 74,314 — 13,678 87,992 (F)

Total Revenue and Other Operating Income $ 1,336,008 $ 171,228 $ 415,213 $ 1,922,449

Earnings (Loss) From Continuing Operations Before Income Tax

Segment Assets

Total Operating Expense $ 787,488 $ 135,778 $ 813,207 $ 1,736,473

Earnings (Loss) Before Income Tax $ 548,520 $ 35,450 $ ( 524,286 ) $ 59,684

Segment Assets $ 6,527,245 $ 1,222,005 $ 1,311,556 $ 9,060,806 (G)

Depreciation, Depletion and Amortization

$ 427,219 $ 73,189 $ 8,055 $ 508,463

Capital Expenditures $ 1,175,091 $ 11,333 $ 6,175 $ 1,192,599

Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 219,472 to NJR Energy Services Company and $ 184,668 to Direct Energy Business Marketing LLC, each of which comprises over 10% of revenue from contracts with external customers for the period.

Includes equity in earnings of unconsolidated affiliates of $ 5,363 for Total E&P.

Includes investments in unconsolidated equity affiliates of $ 18,663 for Total E&P.

(E) Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 214,980 to Direct Energy Business Marketing LLC and $ 147,540 to NJR Energy Services Company, each of which comprises over 10% of revenue from contracts with external customers for the period.

(F) Includes midstream revenue of $ 74,314 and equity in earnings of unconsolidated affiliates of $ 2,103 for Shale and Other, respectively.

(G) Includes investments in unconsolidated equity affiliates of $ 16,710 .

Industry segment results for the year ended December 31, 2018 are:

Natural Gas, NGLs and Oil Revenue

Shale Coalbed

Methane Other Consolidated

Natural Gas, NGLs and Oil Revenue $ 1,349,196 $ 212,884 $ 15,857 $ 1,577,937 (H)

Purchased Gas Revenue — — 65,986 65,986

(Loss) Gain on Commodity Derivative Instruments

Other Operating Income

( 60,326 ) ( 8,768 ) 38,882 ( 30,212 )

Other Revenue and Operating Income 89,781 — 26,942 116,723 (I)

Total Revenue and Other Operating Income $ 1,378,651 $ 204,116 $ 147,667 $ 1,730,434

Earnings (Loss) From Continuing Operations Before Income Tax

Segment Assets

Total Operating Expense $ 751,673 $ 154,121 $ 321,169 $ 1,226,963

Earnings Before Income Tax $ 626,978 $ 49,995 $ 421,695 $ 1,098,668

Segment Assets $ 6,268,113 $ 1,272,457 $ 1,051,600 $ 8,592,170 (J)

Depreciation, Depletion and Amortization

$ 404,503 $ 77,004 $ 11,916 $ 493,423

Capital Expenditures $ 1,094,471 $ 17,083 $ 4,843 $ 1,116,397

Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 153,656 to Direct Energy Business Marketing LLC and $ 147,595 to NJR Energy Services Company, each of which comprises over 10% of revenue from contracts with external customers for the period.

Includes equity in earnings of unconsolidated affiliates of $ 49,830 for Total E&P.

Includes investments in unconsolidated equity affiliates of $ 197,921 for Total E&P.

(H) Included in Total Natural Gas, NGLs and Oil Revenue are sales of $ 219,472 to NJR Energy Services Company and $ 184,668 to Direct Energy Business Marketing LLC, each of which comprises over 10% of revenue from contracts with external customers for the period.

(I) Includes midstream revenue of $ 89,781 and equity in earnings of unconsolidated affiliates of $ 5,363 for Shale and Other, respectively.

(J) Includes investments in unconsolidated equity affiliates of $ 18,663 .

Reconciliation of Segment Information to Consolidated Amounts:

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For the Years Ended December 31,

2020 2019 2018

Total Segment Revenue from Contracts with External Customers $ 1,067,247 $ 1,532,666 $ 1,733,704

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Total Consolidated Revenue and Other Operating Income

Earnings (Loss) From Continuing Operations Before Income Tax:

For the Years Ended December 31,

Segment Earnings (Loss) Before Income Taxes for Reportable Business Segments:

Total Segment Earnings (Loss) Before Income Taxes for Reportable Business Segments

Unallocated Expenses:

Other (Expense) Income

Gain on Certain Asset Sales

Gain on Previously Held Equity Interest

Loss on Debt Extinguishment

Impairment of Other Intangible Assets

Earnings from Continuing Operations Before Income Tax

Total Assets:

Segment Assets for Total Reportable Business Segments:

Intercompany Eliminations

Items Excluded from Segment Assets:

Cash and Cash Equivalents

Recoverable Income Taxes

Total Consolidated Assets

NOTE 25— SUBSEQUENT EVENT

On January 29, 2020, CNX and CNXM entered into and closed definitive agreements to eliminate CNXM’s IDRs held by its general partner and to convert the 2.0 % general partner interest in CNXM into a non-economic general partnership interest (collectively, the "IDR Elimination Transaction").

Pursuant to the IDR Elimination Transaction agreements, CNX will receive the following consideration in exchange for the IDRs and the 2.0 % general partner interest:

26 million CNXM common units;

3 million new CNXM Class B units.

The newly issued Class B units will not receive or accrue distributions until January 1, 2022, at which time they will automatically convert into CNXM common units on a one -for-one basis;

$ 135,000 to be paid in three installments of $ 50,000 due December 31, 2020, $ 50,000 due December 31, 2021 and $ 35,000 due December 31, 2022.

As a result of the IDR Elimination Transaction, CNX now owns 47.7 million common units, or approximately 53.1 % , of the outstanding limited partner interests in CNXM, excluding the Class B units.

Upon conversion of the Class B units to CNXM common units on January 1, 2022, CNX's ownership will increase to 50.7 million units on a pro forma basis.

$ 1,257,978 $ 1,922,449 $ 1,730,434

NOTE 22— SUPPLEMENTAL GAS DATA (unaudited):

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Intangible Drilling Costs $ 4,965,252 $ 4,688,497

Proved Gas Properties

Gas Gathering Assets 2,510,916 2,463,866

Unproved Gas Properties

Proved Gas Properties 1,253,094 1,208,046

Gas Wells and Related Equipment 1,120,061 1,042,000

Unproved Gas Properties 725,705 755,590

Other Gas Assets 95,734 73,479

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For the Years Ended December 31,

2020 2019 2018

Property Acquisitions:

Proved Properties

$ 16,622 $ 36,710 $ 38,621

Unproved Properties

8,060 24,760 36,248

Development** 432,438 1,063,945 986,419

Exploration 33,644 79,855 61,604

Total $ 490,764 $ 1,205,270 $ 1,122,892

(*) Includes costs incurred whether capitalized or expensed.

(**) Includes development costs for midstream of $ 67 million, $ 325 million and $ 142 million for 2020, 2019 and 2018, respectively.

Results of Operations for Producing Activities:

For the Years Ended December 31,

2020 2019 2018

Natural Gas, NGLs and Oil Revenue $ 896,745 $ 1,364,325 $ 1,577,937

Gain (Loss) on Commodity Derivative Instruments

Realized Gain (Loss) on Commodity Derivative Instruments 461,217 69,780 ( 69,720 )

Unrealized (Loss) Gain on Commodity Derivative Instruments ( 288,235 ) 306,325 39,508

Purchased Gas Revenue 105,792 94,027 65,986

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Depreciation, Depletion and Amortization 501,821 508,463 493,423

Total Costs 1,029,852 1,513,668 1,001,095

Pre-tax Operating Income 145,667 320,789 612,616

Income Tax Expense (Benefit)

Income Tax Expense 42,098 149,167 120,073

Results of Operations for Producing Activities excluding Corporate and Interest Costs

$ 103,569 $ 171,622 $ 492,543

The following is production, average sales price and average production costs, excluding ad valorem and severance taxes, per unit of production:

For the Years Ended December 31,

2020 2019 2018

Production (MMcfe) 511,072 539,149 507,104

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Total Average Sales Price Including Effects of Commodity Derivative Financial Settlements (per Mcfe)

$ 2.49 $ 2.66 $ 2.97

Average Lifting Costs, Excluding Ad Valorem and Severance Taxes (per Mcfe) $ 0.08 $ 0.12 $ 0.19

During the years ended December 31, 2020, 2019 and 2018, the Company drilled 29.0 , 75.7 , and 83.9 net development wells, respectively.

There was 1.0 net dry development well in 2019 , and no net dry development wells in 2018 or 2017 .

There were no net dry development wells in 2020 and 2018, and 1.0 net dry development well in 2019.

During the years ended December 31, 2020 and 2019, the Company drilled 2.0 and 5.0 net exploratory wells, respectively.

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At December 31, 2020, there were 23.0 net development wells and 1.0 exploratory well that are drilled but uncompleted.

Additionally, there are 7.0 net developmental wells that have been completed and are awaiting final tie-in to production.

Additionally, there are 2.0 net exploratory wells that have been completed and are awaiting final tie-in to production.

CNX is committed to provide 492.5 Bcf of gas under existing sales contracts or agreements over the course of the next four years.

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The following table sets forth, at December 31, 2020, the number of producing wells, developed acreage and undeveloped acreage:

Producing Gas Wells (including Gob Wells)

Producing Oil Wells

Gross(1) Net(2)

Producing Gas Wells (including Gob Wells) - Working Interest 4,712 4,401

Producing Oil Wells - Working Interest — —

Producing Gas Wells - Royalty Interest 1,810 —

Producing Oil Wells - Royalty Interest 152 —

Acreage Position:

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Total Acreage 5,381,446 4,033,232

Net acres include acreage attributable to the Company's working interests of the properties.

Additional adjustments (either increases or decreases) may be required as the Company further develops title to and further confirms its rights with respect to its various properties in anticipation of development.

The Company believes that its assumptions and methodology in this regard are reasonable.

(1) All of our acreage identified as proved developed and undeveloped is controlled fully by CNX through ownership of a 100 % working interest.

(2) Net acres include acreage attributable to our working interests in the properties.

Additional adjustments (either increases or decreases) may be required as we further develop title to and further confirm our rights with respect to our various properties in anticipation of development.

We believe that our assumptions and methodology in this regard are reasonable.

Proved Oil and Gas Reserves Quantities:

Annually, the preparation of natural gas reserves estimates is completed in accordance with CNX prescribed internal control procedures, which include verification of input data into a gas reserves forecasting and economic evaluation software, as well as multi-functional management review.

The input data verification includes reviews of the price and operating, and development cost assumptions used in the economic model to determine the reserves.

As part of the annual review, management reviews and approves changes in the

future development plan and the impact to proved-undeveloped locations to ensure that annual changes are aligned with the overall strategic business plan of the Company.

A detailed review is completed to ensure that all proved undeveloped locations will be fully developed within five-year s of the reserves booking.

As part of the development plan review, management reviews current well production data, acreage position, downstream infrastructure availability, operational leases and other commitments, financial capacity to complete the development and individual project economics in expected future gas pricing scenarios.

The input data verification includes reviews of the price and operating, and development cost assumptions as well as tax rates by jurisdiction used in the economic model to determine the reserves.

Also, the production volumes are reconciled between the system used to calculate the reserves and other accounting/measurement systems.

The technical employee responsible for overseeing the preparation of the reserve estimates is a registered professional engineer in the state of West Virginia with over 16 years of experience in the oil and gas industry.

The Company's gas reserves results, which are reported in the Supplemental Gas Data year ended December 31, 2019 Form 10-K, were audited by Netherland, Sewell & Associates, Inc.

The Company's gas reserves results, which are reported in the Supplemental Gas Data for the year ended December 31, 2020 Form 10-K, were audited by independent petroleum engineers, Netherland, Sewell & Associates, Inc.

The technical person primarily responsible for overseeing the audit of the Company's reserves is a registered professional engineer in the state of Texas with over 13 years of experience in the oil and gas industry.

The gas reserves estimates are as follows:

Condensate Consolidated

Natural Gas NGLs & Crude Oil Operations

(MMcf) (Mbbls) (Mbbls) (MMcfe)

Balance December 31, 2017 (a) 7,121,758 71,691 4,950 7,581,612

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Extensions and Discoveries (c) 839,268 16,247 4,010 960,808

Sales of Reserves In-Place

Production ( 468,228 ) ( 6,011 ) ( 468 ) ( 507,104 )

Sales of Reserves In-Place (d) ( 715,088 ) ( 17,252 ) ( 1,100 ) ( 825,196 )

Balance December 31, 2018 (a) 7,436,338 65,904 8,261 7,881,335

Revisions (d)

Revisions (e) ( 521,617 ) 5,926 ( 5,418 ) ( 518,570 )

Price Changes ( 40,773 ) ( 740 ) ( 5 ) ( 45,246 )

Extensions and Discoveries (c) 1,569,813 10,182 2,732 1,647,297

Purchases of Reserves In-Place

Sales of Reserves In-Place (e)

Production ( 505,355 ) ( 5,428 ) ( 204 ) ( 539,149 )

Balance December 31, 2019 (a) 7,938,406 75,844 5,366 8,425,667

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Extensions and Discoveries (c) 2,188,773 9,299 400 2,246,968

Production ( 481,426 ) ( 4,677 ) ( 264 ) ( 511,072 )

Balance December 31, 2020 (a) 9,034,066 81,867 4,081 9,549,758

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December 31, 2020 4,094,783 39,664 2,874 4,350,010

Proved developed and proved undeveloped gas reserves are defined by SEC Rule 4.10(a) of Regulation S-X.

(a) Proved developed and proved undeveloped gas reserves are defined by SEC Rule 4.10(a) of Regulation S-X.

Generally, these reserves would be commercially recovered under current economic conditions, operating methods and government regulations.

CNX cautions that there are many inherent uncertainties in estimating proved reserve quantities, projecting future production rates and timing of development expenditures.

Proved oil and gas reserves are estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions and government regulations.

Proved oil and gas reserves are estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years

from known reservoirs under existing economic and operating conditions and government regulations.

Proved developed reserves are reserves expected to be recovered through existing wells, with existing equipment and operating methods.

The downward revisions for 2017 are due to corporate planning changes by our JV partner in Ohio Utica which resulted in all PUD's being removed, causing a 458 Bcfe downward revision, offset, in part, by improved well performance due to the enhanced RCS completions and improved operating costs.

Extensions and Discoveries in 2017 , 2018 , and 2019 are due to the addition of wells on the Company's Marcellus and Utica Shale acreage more than one offset location away with continued use of reliable technology.

The upward revision for 2018 of 321 Bcfe is primarily due to a 472 Bcfe upward revision from increased performance through our continued focus on optimization.

(b) The upward revision for 2018 of 321 Bcfe is primarily due to a 472 Bcfe upward revision from increased performance through our continued focus on optimization.

This is partially offset by a 151 Bcfe downward revision due to plan changes.

The sales of reserves in-place is related to the divestiture of our Utica JV assets and substantially all of our conventional properties.

(c) Extensions and Discoveries in 2018, 2019, and 2020 are due to the addition of wells on the Company's Shale acreage more than one offset location away with continued use of reliable technology.

The Company uses reliable technologies when assigning reserves to undeveloped locations, including wire line open-hole log data, performance data, geological log cross sections, core data and statistical analysis.

The statistical methods use production performance of analog wells and include data from operated and competitor wells.

We also use geophysical data that includes data from our wells, published documents, state data-sits and data exchanges to confirm continuity of the formation.

Total proved extensions and discoveries are a combination of proved developed and proved undeveloped reserves;

and, extensions and discoveries for proven developed reserves are associated with non-operated assets and exploratory wells.

In 2020 and 2019, the Company added 70 Bcfe and 77 Bcfe, respectively, related to exploratory and non-operated wells.

(d) The sales of reserves in-place is related to the divestiture of our Utica JV assets and substantially all of our conventional properties.

Refer to Note 4 - Acquisitions and Dispositions for more information.

The downward revisions in 2019 are primarily due to removal of 872 Bcfe in reserves from plan changes which are the result of our continued focus on optimization and high grading initiatives.

(e) The downward revisions in 2019 are due to changes in our five-year development plan due to increased dry gas investment which increased dry gas proved undeveloped reserves and decreased wet gas investment which lowered wet gas proved undeveloped reserves.

The investment shift was a result of a significant decrease in forecasted liquids price realizations in the five-year plan.

These five-year plan changes resulted in the removal of 872 Bcfe in reserves for wet gas investment.

There was additionally a reduction of 304 Bcfe related to removal of proved undeveloped locations removed from our plans due to the SEC five-year development rule.

These downward revisions were partially offset by efficiencies in operations and optimization which increased reserves by 657 Bcfe.

These downward revisions were partially offset by efficiencies in operations investment in dry gas properties which increased reserves by 657 Bcfe.

(f) Upward revisions in 2020 are due to performance revisions of 579 Bcfe related to production performance and an 853 Bcfe increase in reserves due to a decrease in operating costs in 2020.

These upward revisions were partially offset by negative revisions of 677 Bcfe due to changes in our development plan related to the removal of four Utica wells and 23 Marcellus wells from our development plan.

Proved Undeveloped Reserves (MMcfe)

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Undeveloped Reserves Transferred to Developed (a) ( 1,152,598 )

Revisions Due to 5 Year Rule

Price Revisions ( 380,200 )

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Ending Proved Undeveloped Reserves(e) 4,350,010

During 2019 , various exploration and development drilling and evaluations were completed.

(a) During 2020, various exploration and development drilling and evaluations were completed.

Approximately, $ 257,952 of capital was spent in the year ended December 31, 2020 related to undeveloped reserves that were transferred to developed.

(b) The downward revisions for 2019 plan changes is due to removal of a portion of our Marcellus and Utica locations from our proved undeveloped reserves.

The upward revisions due to well performance is due to results from Marcellus Shale production.

Extensions and discoveries are due mainly to the addition of wells on our Marcellus and Utica Shale acreage more than one offset location away with continued use of reliable technology.

Included in proved undeveloped reserves at December 31, 2019 are approximately 248,570 MMcfe of reserves that have been reported for more than five years.

(b) The downward revisions for 2020 plan changes is due to the removal of 88 Bcfe of reserves related to 4 Utica wells and 579 Bcfe of reserves related to 23 Marcellus wells which were removed from our development plan.

(c) The upward revisions due to a 342 Bcfe increase in reserves of liquids rich Marcellus production which requires processing due to a reduction in the Company's operating costs as a result of the CNXM take-in transaction completed in 2020.

The remaining portion is due to production performance.

(d) Extensions and discoveries are due mainly to the addition of 1,465 Bcfe related to 47 net Marcellus wells within our Southwest Pennsylvania and West Virginia dry gas operations and 711 Bcfe of 23 net Utica wells within our Central Pennsylvania and Southwest Pennsylvania operations.

The statistical methods use production performance of analog wells and include data from operated and competitor wells.

We also use geophysical data that includes data from our wells, published documents, state data-sites and data exchanges to confirm continuity of the formation.

(e) Included in proved undeveloped reserves at December 31, 2020 are approximately 320,987 MMcfe of reserves that have been reported for more than five years.

These reserves are all attributable to acreage within the current operating plan

identified by the life-of-mine timing maps for the Buchanan mine.

The annual increase in proved undeveloped gob reserves is a result of a change in planned mining activity, which includes an expanded mining footprint, partially offset by the conversion to proved developed gob reserves.

These reserves specifically relate to GOB (a rubble zone formed in the cavity created by the extraction of coal) production due to a complex fracture being generated in the overburden strata above the mined seam.

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These reasons constitute the specific circumstances that exist to continue recognizing these reserves for CNX.

The following table indicates the changes to the Company's suspended exploratory well costs for the three years ended December 31, 2020:

2020 2019 2018

Balance, Beginning of Period $ 8,984 $ 8,178 $ 6,388

Additions to Capitalized Exploratory Well Costs Pending the Determination of Proved Reserves 28,336 66,409 49,213

Reclassifications to Wells, Facilities and Equipment Based on the Determination of Proved Reserves ( 28,258 ) ( 65,603 ) ( 46,614 )

Capitalized Exploratory Well Costs Charged to Expense — — ( 809 )

Balance, End of Period $ 9,062 $ 8,984 $ 8,178

At December 31, 2020 there was one well pending the determination of proved reserves.

The following table represents the capitalized exploratory well cost activity as indicated:

Costs reclassified to wells, equipment and facilities based on the determination of proved reserves

Costs expensed due to determination of dry hole or abandonment of project

The $ 9,062 of exploratory well costs capitalized for more than one year is related to one partially constructed well that the Company is currently evaluating to determine the most economic approach to access the natural gas reserves.

The company expects to make a determination in 2021 to either finalize the well or to access the natural gas reserves from an alternative location.

CNX proved natural gas reserves are located in the United States.

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The standardized measure is intended to provide a better means for comparing the value of CNX proved reserves at a given time with those of other gas producing companies than is provided by a comparison of raw proved reserve quantities.

2020 2019 2018

Future Cash Flows (a)

$ 16,577,563 $ 19,489,588 $ 26,610,100

Production Costs

Development Costs

( 6,071,763 ) ( 7,903,120 ) ( 7,730,451 )

Development Costs (b) ( 1,957,519 ) ( 1,121,073 ) ( 1,600,128 )

Income Tax Expense

( 2,235,205 ) ( 2,720,994 ) ( 4,147,075 )

Future Net Cash Flows 6,313,076 7,744,401 13,132,446

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Total Standardized Measure of Discounted Net Cash Flows $ 2,635,736 $ 3,070,469 $ 4,655,457

For 2019 , the reserves were computed using unweighted arithmetic averages of the closing prices on the first day of each month during 2019 , adjusted for energy content and a regional price differential.

(a) For 2020, the reserves were computed using unweighted arithmetic averages of the closing prices on the first day of each month during 2020, adjusted for energy content and a regional price differential.

For 2020, this adjusted natural gas price was $ 1.70 per Mcf, the adjusted oil price was $ 35.61 per barrel and the adjusted NGL price was $ 13.18 per barrel.

In 2020, as the result of the CNXM take-in transaction (see Note 4 - Acquisitions and Dispositions), there was a change in production costs and development costs.

Historically the production costs included contractual CNXM rates but in 2020 this was replaced with actual operating costs of the midstream infrastructure.

Additionally, our development costs in 2020 include capital related to connecting undeveloped Shale wells to the midstream gathering systems;

in prior years this was captured within the CNXM contractual rate within production costs.

These changes resulted in an increase of $ 932 million to the current year Standardized Measure of Discounted Net Cash Flows.

(b) Development costs for 2020 include $ 402,174 of plugging and abandonment costs and $ 286,724 of Midstream capital on an undiscounted pre-tax basis.

On a PV-10 pre-tax discounted basis, these amounts equate to $ 18,357 and $ 231,512 , respectively.

The addition of Midstream capital is the result of the Merger that occurred on September 28, 2020 (See Note 4 - Acquisitions and Dispositions).

For 2019, the reserves were computed using unweighted arithmetic averages of the closing prices on the first day of each month during 2019, adjusted for energy content and a regional price differential.

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The following are the principal sources of change in the standardized measure of discounted future net cash flows for consolidated operations during:

2020 2019 2018

Balance at Beginning of Period $ 3,070,469 $ 4,655,457 $ 3,131,398

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Difference in Previously Estimated Development Costs Compared to Actual Costs Incurred During the Period

( 129,642 ) ( 323,922 ) ( 434,817 )

Purchase of Reserves In-Place — — 209,630

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Timing and Other 390,391 586,591 ( 69,087 )

Accretion 178,829 583,320 387,378

Total Discounted Cash Flow at End of Period $ 2,635,736 $ 3,070,469 $ 4,655,457

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Three Months Ended

September 30,

March 31, June 30, September 30, December 31,

2020 2020 2020 2020

Revenue (a) $ 411,401 $ 145,088 $ 61,609 $ 622,131

Expenses (b) $ 149,004 $ 125,548 $ 142,327 $ 134,775

Net (Loss) Income (c) $ ( 305,222 ) $ ( 130,487 ) $ ( 188,793 ) $ 195,758

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Three Months Ended

September 30,

Net Income (C)

Net Income Attributable to CNX Resources Shareholders

Earnings Per Share

Basic Earnings Per Share

Diluted Earnings Per Share

March 31, June 30, September 30, December 31,

2019 2019 2019 2019

Revenue (a) $ 275,234 $ 602,109 $ 526,681 $ 504,747

Expenses (b) $ 147,928 $ 153,835 $ 153,833 $ 182,035

Net (Loss) Income (c) $ ( 64,651 ) $ 192,694 $ 143,960 $ ( 240,055 )

Net (Loss) Income Attributable to CNX Resources Shareholders $ ( 87,337 ) $ 162,477 $ 115,538 $ ( 271,408 )

(Loss) Earnings Per Share:

Basic (Loss) Earnings Per Share $ ( 0.44 ) $ 0.85 $ 0.62 $ ( 1.45 )

Diluted (Loss) Earnings Per Share $ ( 0.44 ) $ 0.84 $ 0.61 $ ( 1.45 )

(a) Includes natural gas, NGLs, and oil revenue;

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(b) Includes exploration and production costs and other operating expense;

excludes DD&A, impairment charges, selling, general and administrative, loss on debt extinguishment, interest expense and other expense.

(C) Includes impairment charges of $ 327,400 and $ 119,429 that were recorded during the three months ended December 31, 2019 related to CNX's exploration and productions properties and unproved properties, respectively, and $ 18,650 that was recorded during the three months ended June 30, 2018 related to CNX's intangible assets.

excludes depreciation, depletion and amortization, impairment charges, selling, general and administrative, gain (loss) on debt extinguishment, interest expense and other expense.

(c) Includes impairment charges of $ 61,849 and $ 473,045 that were recorded during the three months ended March 31, 2020 related to CNX's exploration and production properties and goodwill, respectively, and $ 327,400 and $ 119,429 that were recorded during the three months ended December 31, 2019 related to CNX's exploration and production properties and unproved properties, respectively.

See Note 1 - Significant Accounting Policies in Item 8 of this Form 10-K for additional information.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data