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Item 7. Management’s Discussion and Analysis

2023-02-09 compared with 2022-02-10 · 146 added, 190 removed, 439 unchanged (43% of the section changed)

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Risk Factors” and the section entitled “Forward‑Looking Statements.” CNX does not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

COVID-19 Update:

CNX continues to monitor the current and potential impacts of the coronavirus COVID-19 (“COVID-19”) pandemic on all aspects of our business and geographies, including how it has impacted, and may in the future impact, our operations, financial results, liquidity, contractors, customers, employees and vendors.

CNX continually monitors factors that could cause actual results of operations to differ from historical results or current expectations.

Examples include the conflict between Russia and Ukraine that has had an impact on global commodity prices.

More information regarding these considerations is located in Item 1A Risk Factors.

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The results presented in this Form 10-K are not necessarily indicative of future operating results.

While CNX did not incur significant disruptions to operations during the years ended December 31, 2021 or 2020 as a direct result of the COVID-19 pandemic, CNX is unable to predict the full extent of the future impact that the COVID-19 pandemic could have on the Company, including our financial position, operating results, liquidity and ability to obtain financing in future reporting periods, due to numerous uncertainties outside the Company’s control.

Natural gas, NGL, and Oil Pricing

Prices for natural gas, NGLs and oil that CNX produces significantly impact revenue and cash flows.

Natural gas, NGL and oil benchmark prices increased significantly during the year ended December 31, 2022 as compared to the year ended December 31, 2021.

As a result, CNX experienced a significant increase in revenue and cash flows during the year ended December 31, 2022.

In the current economic environment, CNX expects that commodity prices for some or all of the commodities we produce will remain volatile.

In order to manage the market risk exposure of volatile natural gas prices in the future, CNX enters into various physical natural gas supply transactions with both gas marketers and end users for terms varying in length as well as financial hedges.

However, this market volatility is beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.

Heightened levels of inflation, primarily related to steel, diesel fuel and labor, continue to present risk for CNX and the broader natural gas industry.

CNX experienced higher capital costs from inflation during the year ended December 31, 2022.

If inflation continues at its current levels or increases further for any extended period of time, and CNX is unable to successfully mitigate the impact, our costs could increase further, having a greater impact on our financial position.

Rising interest rates could also increase our borrowing costs on new debt and our current revolver and could affect the fair value of our investments.

CNX remains committed to our ongoing efforts to increase the efficiency of our operations and improve costs, which may, in part, offset cost increases from inflation.

2022 Highlights:

• Increased proved developed reserves to 5.9 Tcfe, 13.5% higher than 2020.

• Proved developed reserves of 6.2 Tcfe, 5% higher than 2021.

• Total gas production of 580.2 Bcfe.

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2023 Outlook:

• Our 2022 annual gas production is expected to be approximately 575-605 Bcfe.

• Our 2022 E&P capital expenditures are expected to be approximately $470-$500 million.

• Our 2023 annual production is expected to be approximately 555-575 Bcfe.

• Our 2023 capital expenditures are expected to be approximately $575-$675 million.

Results of Operations:

The following discussion and analysis of our Results of Operations and Liquidity and Capital Resources includes a comparison of the year ended December 31, 2022 to the year ended December 31, 2021.

A similar discussion and analysis that compares year ended December 31, 2020 to the fiscal year ended December 31, 2019 may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Form 10-K for the year ended December 31, 2020, which is incorporated herein by reference.

A similar discussion and analysis that compares year ended December 31, 2021 to the fiscal year ended December 31, 2020 is omitted from this Form 10-K and may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Form 10-K for the year ended December 31, 2021, which is incorporated herein by reference.

Net Loss Attributable to CNX Resources Shareholders

CNX reported a net loss attributable to CNX Resources shareholders of $142 million, or a loss per diluted share of $0.75, for the year ended December 31, 2022, compared to a net loss attributable to CNX Resources shareholders of $499 million, or a loss per diluted share of $2.31, for the year ended December 31, 2021.

For the Years Ended December 31,

(Dollars in thousands) 2021 2020 Variance

Net Loss $ (498,643) $ (428,744) $ (69,899)

Net Income Attributable to Noncontrolling Interests — 55,031 (55,031)

Net Loss Attributable to CNX Resources Shareholders $ (498,643) $ (483,775) $ (14,868)

Included in the loss for the year ended December 31, 2022 was an unrealized loss on commodity derivative instruments of $851 million.

Included in the loss for the year ended December 31, 2020 was an unrealized loss on commodity derivative instruments of $288 million, a $62 million non-cash impairment charge related to exploration and production properties specific to our Southwestern Pennsylvania (SWPA) CBM asset group (See Note 8 - Property, Plant and Equipment in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K), and a $473 million non-cash impairment charge related to goodwill (See Note 9 - Goodwill and Other Intangible Assets in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K).

Prior to the effective time of the Merger on September 28, 2020 (See Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K), public unitholders held a 46.9% equity interest in CNXM and CNX owned the remaining 53.1% equity interest and following the Merger CNX owns 100% of the equity interests of CNXM.

The earnings of CNXM that were attributed to its common units held by the public prior to the Merger are reflected in Net Income Attributable to Noncontrolling Interest in the Consolidated Statements of Income.

There were no changes in our ownership interest in CNXM during the year ended December 31, 2021.

Included in the loss for the year ended December 31, 2021 was an unrealized loss on commodity derivative instruments of $1,094 million.

Non-GAAP Financial Measures

CNX's management uses certain non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful for investors in analyzing the Company.

Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating CNX because these metrics are widely used to evaluate a natural gas company’s operating performance.

Sales of Natural Gas, NGL and Oil, including cash settlements excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments.

Although these are not measures of performance calculated in accordance with GAAP, management believes that these financial measures are useful to an investor in evaluating CNX because these metrics are widely used to evaluate a natural gas company’s operating performance.

Sales of Natural Gas, NGL and Oil, including cash settlements is a non-GAAP measure that excludes the impacts of changes in the fair value of commodity derivative instruments prior to settlement, which are often volatile, and only includes the impact of settled commodity derivative instruments.

Sales of Natural Gas, NGL and Oil, including cash settlements also excludes purchased gas revenue and other revenue and operating income, which are not directly related to CNX’s natural gas producing activities.

Natural Gas, NGL and Oil Production Costs excludes certain expenses that are not directly related to CNX’s natural gas producing activities and are managed outside our production operations (See Note 21 - Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).

These expenses include, but are not limited to, interest expense, impairment of exploration and production properties, impairment of goodwill, other operating expense and other corporate expenses such as selling, general and administrative costs.

Natural Gas, NGL and Oil Production Costs is a non-GAAP measure that excludes certain expenses that are not directly related to CNX’s natural gas producing activities and are managed outside our production operations (See Note 21 – Segment Information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).

These expenses include, but are not limited to, interest expense, other operating expense and other corporate expenses such as selling, general and administrative costs.

We believe that Sales of Natural Gas, NGL and Oil, including cash settlements, Natural Gas, NGL and Oil Production Costs and Natural Gas, NGL and Oil Production Margin (which is derived by subtracting Natural Gas, NGL and Oil Production Costs from Sales of Natural Gas, NGL and Oil, including cash settlements) provide useful information to investors for evaluating period-to-period comparisons of earnings trends.

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Purchased Gas Revenue (186) (100)

Loss on Commodity Derivative Instruments and Monetization 1,094 204

Loss on Commodity Derivative Instruments 851 1,094

Other Revenue and Operating Income (87) (106)

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Purchased Gas Costs (185) (94)

Impairment of Exploration and Production Properties — (62)

Impairment of Goodwill — (473)

Selling, General and Administrative Costs (122) (113)

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*NGLs and Oil/Condensate are converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of NGL, condensate, and natural gas prices.

**Excluding hedge monetizations.

The 79.1 Bcfe increase in volumes in the period-to period comparison was primarily due to the turn-in-line of new wells throughout 2020 and 2021.

Additionally, in 2020 the Company temporarily shut-in new turn-in-line wells as a result of low natural gas and NGL pricing.

The increases were offset in part by normal production declines.

The 10.0 Bcfe decrease in volumes in the period-to period comparison was primarily due to various operational delays and challenges, including a loss related to the abandonment of a Shale wellbore (see Gain on Asset Sales and Abandonments, net for more information).

The decrease was also due to normal production declines, offset in part by the turn-in-line of new

wells throughout 2022.

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

• Production, ad valorem and other fees increased on a per unit basis as a result of increased realized prices on natural gas and natural gas liquids as well as the change in production mix by state as new wells were turned-in-line.

• Transportation, gathering and compression expense increased on a per unit basis primarily due to increased processing costs due to a wetter production mix, and increased firm transportation costs.

• Depreciation, depletion and amortization expense decreased on a per unit basis as a result of low cost reserve additions from development during the 2020 period in SWPA, the addition of proved undeveloped Shale wells in the Central Pennsylvania (CPA), and an impairment recognized in CBM in the 2020 period.

• Lease operating expense increased on a per unit basis as a result of an increase in repairs and maintenance expense, including both routine and water storage system maintenance, and an increase in water disposal costs driven by more produced water being taken to disposal instead of being reused in well completions.

• Production, ad valorem and other fees increased on a per unit basis as a result of increased realized prices on natural gas and NGLs.

• Transportation, gathering and compression expense increased on a per unit basis primarily due to increased processing costs due to a wetter production mix, increased electrical compression expense, increased repairs and maintenance expense and lower volumes.

• Depreciation, depletion and amortization expense decreased on a per unit basis due to a lower annual depletion rate primarily resulting from low-cost reserve additions from development during the 2021 period.

Average Realized Price Reconciliation

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Hedging Impact ($/Mcf) $ (3.35) $ (0.98) $ (2.37) (241.8) %

(Loss) Gain on Commodity Derivative Instruments - Cash Settlement* $ (539,016) $ 377,219 $ (916,235) (242.9) %

*Excluding gains from hedge monetizations

The increase in gross revenue was primarily the result of the $1.84 per Mcf increase in natural gas prices, when excluding the impact of hedging, the 79.1 Bcfe increase in sales volumes and the $20.16 per Bbl increase in NGL prices.

These increases were offset, in part, by the impact of the change in the realized (loss) gain on commodity derivative instruments related to the Company's hedging program.

Loss on Commodity Derivative Instruments - Cash Settlement $ (1,812,777) $ (539,016) $ (1,273,761) (236.3) %

The increase in gross revenue was primarily the result of the $2.72 per Mcf increase in natural gas prices, when excluding the impact of hedging, and the $4.26 per Bbl increase in NGL prices.

These increases were offset, in part, by the impact of the change in the realized loss on commodity derivative instruments related to the Company's hedging program and the 10.0 Bcfe decrease in sales volumes.

SEGMENT ANALYSIS for the year ended December 31, 2022 compared to the year ended December 31, 2021:

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Depreciation, Depletion and Amortization 389 54 18 461 (51) (4) 1 (54)

Impairment of Exploration and Production Properties — — — — — — (62) (62)

Impairment of Goodwill — — — — — — (473) (473)

Exploration and Production Related Other Costs — — 8 8 — — (13) (13)

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Average Sales Price - Gas (per Mcf) $ 6.19 $ 3.51 $ 2.68 76.4 %

(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ (0.98) $ 0.79 $ (1.77) (224.1) %

Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ (3.37) $ (0.98) $ (2.39) (243.9) %

Average Sales Price - NGLs (per Mcfe)* $ 6.36 $ 5.65 $ 0.71 12.6 %

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The Shale segment had natural gas, NGLs and oil/condensate revenue of $3,335 million for the year ended December 31, 2022 compared to $1,989 million for the year ended December 31, 2021.

The $1,208 million increase was due primarily to a 17.9% increase in total Shale gas sales volumes, and a 13.5% increase in the total average Shale sales price.

The increase in total Shale gas sales volumes was primarily due to the turn-in-line of new wells throughout 2020 and 2021.

The increase was also due to the temporary shut-in of new turn-in-line wells in 2020 due to low natural gas prices, offset in part by normal production declines.

The $1,346 million increase was due primarily to a 76.4% increase in the average sales price for natural gas and a 12.6% increase in the average sales price of NGLs, offset in part by a 0.8% decrease in total Shale gas sales volumes.

The decrease in total Shale gas sales volumes was primarily due to various operational delays and challenges including a loss related to the abandonment of a Shale wellbore (see Gain on Asset Sales and Abandonments, net for more information).

The decrease was also due to normal production declines, offset in part by the turn-in-line of new wells throughout 2022.

The increase in total average Shale sales price was primarily due to a $2.68 per Mcf increase in average gas sales price and a $0.71 per Mcfe increase in the average NGL sales price.

These increases were offset in part by a $1.77 per Mcf change in the realized (loss) gain on commodity derivative instruments.

These increases were offset in part by a $2.39 per Mcf change in the realized loss on commodity derivative instruments.

The notional amounts associated with these financial hedges represented approximately 424.7 Bcf of the Company's produced Shale gas sales volumes for the year ended December 31, 2022 at an average loss of $3.94 per Mcf hedged.

For the year ended December 31, 2020, these financial hedges represented approximately 412.1 Bcf at an average gain of $0.82 per Mcf hedged.

For the year ended December 31, 2021, these financial hedges represented approximately 429.4 Bcf at an average loss of $1.15 per Mcf hedged.

Total operating costs and expenses for the Shale segment were $791 million for the year ended December 31, 2022 compared to $804 million for the year ended December 31, 2021.

The increase in total dollars and decrease in unit costs for the Shale segment were due to the following items:

The decreases in total dollars and unit costs for the Shale segment were due to the following items:

• Shale lease operating expenses were $50 million for the year ended December 31, 2022 compared to $34 million for the year ended December 31, 2021.

The increase in total dollars was primarily related to an increase in production volumes.

The increases in total dollars and unit costs were primarily related to an increase in repairs and maintenance expense, including both routine and water storage system maintenance, and an increase in water disposal costs as more water had to be taken to disposal instead of being reused in well completions.

• Shale production, ad valorem and other fees were $33 million for the year ended December 31, 2022 compared to $27 million for the year ended December 31, 2021.

The increases in total dollars and unit costs were primarily due to increased realized prices on natural gas and natural gas liquids as well as the change in production mix by state as new wells were turned-in-line.

The increases in total dollars and unit costs were primarily due to increased realized prices on natural gas and natural gas liquids.

• Shale transportation, gathering and compression costs were $319 million for the year ended December 31, 2022 compared to $303 million for the year ended December 31, 2021.

The increase in total dollars was primarily related to the increase in total production volumes and increased processing costs due to a wetter production mix.

The increase in unit costs was primarily due to increased processing costs due to a wetter production mix and an increase in firm transportation costs.

The increases in total dollars and unit costs were primarily related to an increase in repairs and maintenance expense, an increase in processing costs due to a wetter production mix and increased electrical compression expense.

• Depreciation, depletion and amortization costs attributable to the Shale segment were $389 million for the year ended December 31, 2022 compared to $440 million for the year ended December 31, 2021.

The increase in total dollars was due to the increase in production volumes.

These amounts included depletion on a unit of production basis of $0.62 per Mcfe and $0.71 per Mcfe, respectively.

The decrease in the units of production depreciation, depletion and amortization rate in the current period is primarily the result of low-cost reserve additions from development in 2020 in SWPA as well as the addition of proved undeveloped Shale reserves in CPA.

The decrease in the units of production depreciation, depletion and amortization rate in the current period is primarily the result of a lower annual depletion rate related to low-cost reserve additions from development in the 2021 period.

The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

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The Shale segment had other revenue and operating income of $69 million for the year ended December 31, 2022 compared to $81 million for the year ended December 31, 2021.

The increase in the period-to-period comparison was primarily due to temporary production curtailments by third party customers that occurred in early 2020 due to low prices.

Those curtailments were restored to full production in the latter half of 2020.

The decrease in the period-to-period comparison was primarily due to lower third-party gathering volumes due to normal production declines.

COALBED METHANE (CBM) SEGMENT

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Average Sales Price - Gas (per Mcf) $ 7.20 $ 3.91 $ 3.29 84.1 %

(Loss) Gain on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ (0.93) $ 0.76 $ (1.69) (222.4) %

Loss on Commodity Derivative Instruments - Cash Settlement - Gas (per Mcf) $ (3.18) $ (0.93) $ (2.25) (241.9) %

Total Average CBM Sales Price (per Mcf) $ 4.01 $ 2.97 $ 1.04 35.0 %

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The natural gas price increases were partially offset by the 11.7% decrease in CBM gas sales volumes due to normal production declines.

The total average CBM sales price increased $0.04 per Mcf due to a $1.74 per Mcf increase in average gas sales price, offset in part by a $1.69 per Mcf change in the realized (loss) gain on commodity derivative instruments resulting from the Company's hedging program.

The total average CBM sales price increased $1.04 per Mcf due to a $3.29 per Mcf increase in average gas sales price, offset in part by a $2.25 per Mcf change in the realized loss on commodity derivative instruments resulting from the Company's hedging program.

The notional amounts associated with these financial hedges represented approximately 35.5 Bcf of the Company's produced CBM gas sales volumes for the year ended December 31, 2022 at an average loss of $3.92 per Mcf hedged.

For the year ended December 31, 2020, these financial hedges represented approximately 48.7 Bcf at an average gain of $0.82 per Mcf hedged.

For the year ended December 31, 2021, these financial hedges represented approximately 40.4 Bcf at an average loss of $1.15 per Mcf hedged.

Total operating costs and expenses for the CBM segment were $132 million for the year ended December 31, 2022 compared to $118 million for the year ended December 31, 2021.

The decrease in total dollars and unit costs for the CBM segment were due to the following items:

The increases in total dollars and unit costs for the CBM segment were due to the following items:

• CBM lease operating expense was $17 million for the year ended December 31, 2022 compared to $13 million for the year ended December 31, 2021.

The decreases in total dollars was primarily due to a decrease in water disposal costs.

The increases in total dollars and unit costs were primarily due to increases in repairs and maintenance expense.

• CBM production, ad valorem and other fees were $12 million for the year ended December 31, 2022 compared to $7 million for the year ended December 31, 2021.

The increases in total dollars and unit costs were primarily due to increased realized prices on natural gas.

• CBM transportation, gathering and compression costs were $49 million for the year ended December 31, 2022 compared to $40 million for the year ended December 31, 2021.

The increases in total dollars and unit costs were primarily due to an increase in firm transportation expense.

• Depreciation, depletion and amortization costs attributable to the CBM segment were $58 million for the year ended December 31, 2021 compared to $70 million for the year ended December 31, 2020.

The increases in total dollars and unit costs were primarily due to an increase in repairs and maintenance expense and electrical compression expense.

• Depreciation, depletion and amortization costs attributable to the CBM segment were $54 million for the year ended December 31, 2022 compared to $58 million for the year ended December 31, 2021 due to lower volumes in the current period.

These amounts included depletion on a unit of production basis of $0.65 per Mcfe and $0.66 per Mcfe, respectively.

The decrease in the units of production depreciation, depletion and amortization rate was primarily due to an impairment in the 2020 period that reduced the carrying value of the underlying SWPA CBM asset group (See Note 8 - Property, Plant and Equipment in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

No such impairment occurred in the current period).

The remaining depreciation, depletion and amortization costs were either recorded on a straight-line basis or related to asset retirement obligations.

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The Other Segment includes nominal shallow oil and gas production which is not significant to the Company.

It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, realized gain on commodity derivative instruments that were monetized prior to their contractual settlement dates, exploration and production related other costs, impairments, as well as various other expenses that are managed outside the Shale and CBM segments such as SG&A, interest expense and income taxes.

It also includes the Company's purchased gas activities, unrealized gain or loss on commodity derivative instruments, new technologies, exploration and production related other costs, as well as various other expenses that are managed outside the Shale and CBM segments such as SG&A, interest expense and income taxes.

The Other Segment had a loss before income tax of $1,196 million for the year ended December 31, 2022 compared to a loss before income tax of $1,440 million for the year ended December 31, 2021.

The decrease in total dollars is discussed below.

The increase in total dollars is discussed below.

For the Years Ended December 31,

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Other Gas Sales Volumes (Bcf) 0.4 0.3 0.1 33.3 %

Oil/Condensate Sales Volumes (Bcfe)* — 0.1 (0.1) (100.0) %

Total Other Sales Volumes (Bcfe)* 0.3 0.2 0.1 50.0 %

*Oil/Condensate is converted to Mcfe at the rate of one barrel equals six Mcf based upon the approximate relative energy content of oil and natural gas, which is not indicative of the relationship of oil and natural gas prices.

Loss on Commodity Derivative Instruments and Monetization

Loss on Commodity Derivative Instruments

For the year ended December 31, 2022, the Other Segment recognized an unrealized loss on commodity derivative instruments of $851 million, as well as cash settlements paid of $1 million.

For the year ended December 31, 2021, the Other Segment recognized an unrealized loss on commodity derivative instruments of $1,094 million.

For the year ended December 31, 2020, the Other Segment recognized an unrealized loss on commodity derivative instruments of $288 million as well as cash settlements received of $84 million related to natural gas hedges that were partially monetized prior to their settlement dates.

The unrealized loss on commodity derivative instruments represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis.

See Note 19 – Derivative Instruments in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information related to the cash settlements.

Purchased Gas

Purchased Gas Revenue and Costs

Purchased gas volumes represent volumes of natural gas purchased at market prices from third parties and then resold in order to fulfill contracts with certain customers and to balance supply.

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Purchased gas costs were $185 million for the year ended December 31, 2022 compared to $94 million for the year ended December 31, 2021.

The period-to-period decrease in purchased gas revenue was due to a decrease in purchased gas sales volumes, offset in part by an increase in average sales price.

The period-to-period increase in purchased gas revenue was due to an increase in average sales price and an increase in purchased gas sales volumes.

For the Years Ended December 31,

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(in millions) 2022 2021 Variance Percent Change

Equity Income (Loss) from Affiliates $ 6 $ (1) $ 7 700.0 %

Equity Income from Affiliates $ 1 $ 6 $ (5) (83.3) %

Water Income 5 7 (2) (28.6) %

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Total Other Operating Income $ 18 $ 25 $ (7) (28.0) %

• Equity income (loss) from affiliates primarily represents CNX’s share of earnings from a 50% interest in a power plant located within CNX’s CBM field.

• Equity income from affiliates primarily represents CNX’s share of earnings from a 50% interest in a power plant located within CNX’s CBM field.

Power generated from the facility is sold into wholesale electricity markets during times of peak energy consumption.

Due to the plant consuming coal mine methane gas, the plant qualifies for Pennsylvania Tier I Renewable Energy Credits.

• Water income decreased in the period-to-period comparison due to fewer third-party sales in the current period.

• Excess firm transportation income represents revenue from the sale of excess firm transportation capacity to third parties.

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The revenue from released capacity helps offset the Unutilized Firm Transportation and Processing Fees in Total Other Operating Expense.

Impairment of Exploration and Production Properties

During the year ended December 31, 2020, CNX recognized certain indicators of impairments specific to our SWPA CBM asset group and determined that the carrying value of that asset group was not recoverable.

The fair value of the asset group was estimated by discounting the estimated future cash flows using discount rates and other assumptions that market participants would use in their estimates of fair value.

As a result, an impairment of $62 million was recognized and is included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income for the year ended December 31, 2020.

The impairment was related to an economic decision to temporarily idle certain wells and the related processing facility during the first quarter.

See Note 8 - Property, Plant and Equipment in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

No such impairment occurred in the current period.

Impairment of Goodwill

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

Goodwill is tested for impairment annually during the fourth quarter, or more frequently if recent events or prevailing conditions indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount using the qualitative assessment, a quantitative impairment test is performed.

From time to time, CNX may also bypass the qualitative assessment and proceed directly to the quantitative impairment test.

In connection with CNX's assessment of goodwill in the first quarter of 2020 in relation to the deteriorating macroeconomic conditions, and the decline in the observable market value of CNXM securities both in relation to the COVID-19 pandemic and the overall decline in the MLP market space, CNX bypassed the qualitative assessment and performed a quantitative test that utilized a combination of the income and market approaches to estimate the fair value of the Midstream reporting unit.

As a result of this assessment, CNX concluded that the carrying value exceed its estimated fair value, and as a result, an impairment of $473 million was included in Impairment of Goodwill in the Consolidated Statements of Income for the year ended December 31, 2020.

See Note 9 - Goodwill and Other Intangible Assets in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

No such impairment occurred in the current period.

Exploration and Production Related Other Costs

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Exploratory Well Costs $ — $ 9 $ (9) (100.0) %

Land Rentals 3 3 — — %

Permitting Expense 1 2 (1) (50.0) %

Lease Expiration Costs 1 8 (7) (87.5) %

Permitting Expense — 1 (1) (100.0) %

Land Rentals 4 3 1 33.3 %

Seismic Activity 3 — 3 100.0 %

Total Exploration and Production Related Other Costs $ 8 $ 21 $ (13) (61.9) %

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

• Seismic activity expense for the current period primarily relates to the acquisition of three-dimensional seismic data.

Selling, General and Administrative (“SG&A”)

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

SG&A costs also include non-cash long-term equity-based compensation expense.

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(in millions) 2022 2021 Variance Percent Change

Long-Term Equity-Based Compensation (Non-Cash) $ 17 $ 14 $ 3 21.4 %

Short-Term Incentive Compensation 20 20 — — %

Salaries, Wages and Employee Benefits $ 31 $ 27 $ 4 14.8 %

Contributions and Advertising 5 3 2 66.7 %

Short-Term Incentive Compensation 20 20 — — %

Long-Term Equity-Based Compensation (Non-Cash) 16 17 (1) (5.9) %

Other 50 46 4 8.7 %

Total SG&A $ 122 $ 113 $ 9 8.0 %

• Long-term equity-based compensation (non-cash) increased in the period-to-period comparison due to an increase in equity awards.

• Salaries, wages and employee benefits decreased in the period-to-period comparison primarily due to a decrease in employees.

• Other increased in the period-to-period comparison primarily due to an increase in legal and consulting professional services.

• Salaries, wages and employee benefits increased in the period-to-period comparison primarily due to an increase in wages and employee benefit expense.

• Contributions and advertising increased in the period-to-period comparison primarily due to an increase in charitable contributions.

• Other increased in the period-to-period comparison primarily due to an increase in professional services and consulting fees related to cyber security, legal matters and regulatory reporting.

Other Operating Expense

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(in millions) 2022 2021 Variance Percent Change

Litigation Settlements $ 3 $ 10 $ (7) (70.0) %

Water Expense 1 2 (1) (50.0) %

Unutilized Firm Transportation and Processing Fees 52 53 (1) (1.9) %

Idle Equipment and Service Charges — 10 (10) (100.0) %

Insurance Expense 3 2 1 50.0 %

Water Expense 2 1 1 100.0 %

Litigation Settlements 10 — 10 100.0 %

Virginia Flood Expense 3 — 3 100.0 %

Other 1 1 — — %

Total Other Operating Expense $ 63 $ 68 $ (5) (7.4) %

• CNX and its subsidiaries are subject to various lawsuits and claims in the normal course of business.

CNX accrues the estimated loss for these lawsuits and claims as litigation settlements when the loss is probable and can be estimated.

(See Note 20 – Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).

The decrease in the period-to-period comparison was the result of various items, none of which were individually material.

• Unutilized firm transportation and processing fees represent pipeline transportation capacity obtained to enable gas production to flow uninterrupted as sales volumes increase, as well as additional processing capacity for NGLs.

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Such sales would result in an increase in unutilized firm transportation expense.

The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when

possible and when beneficial.

The Company attempts to minimize this expense by releasing (selling) unutilized firm transportation capacity to other parties when possible and when beneficial.

The revenue received when this capacity is released (sold) is included in Excess Firm Transportation Income in Total Other Operating Income.

The decrease in unutilized firm transportation and processing fees in the period-to-period comparison was primarily due to an increase in utilization of firm transportation capacity in the current year due to production increases in 2021 compared to 2020.

• Idle equipment and service charges relate to temporary idling of certain of the Company’s natural gas drilling rigs as well as related equipment and other services that may be needed in the natural gas drilling and completions process.

The decrease in the period-to-period comparison was the result of two of CNX’s drilling rigs being idled in the prior period.

• CNX and its subsidiaries are subject to various lawsuits and claims in the normal course of business.

CNX accrues the estimated loss for these lawsuits and claims as litigation settlements when the loss is probable and can be estimated.

(See Note 20 - Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information).

The increase in the period-to-period comparison was the result of various items, none of which were individually material.

• Virginia flood expense includes cleanup and repair costs related to fl ooding that occurred in Buchanan County, Virginia in July 2022.

Other Expense

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(in millions) 2022 2021 Variance Percent Change

Interest Income $ — $ 2 $ (2) (100.0) %

Right-of-Way Sales $ 4 $ 2 $ 2 100.0 %

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Other Expense

Merger-Related Costs $ — $ 11 $ (11) (100.0) %

Professional Services $ 4 $ 7 $ (3) (42.9) %

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Total Other Expense $ 10 $ 16 $ (6) (37.5) %

• Interest income decreased in the period-to-period comparison primarily due to the receipt of interest in the prior year in connection with a severance tax refund related to a prior period and additional interest income related to the alternative minimum tax credit refund CNX received in the prior year.

• Professional services decreased in the period-to-period comparison primarily due to the prior year containing fees related to the elimination of CNXM's incentive distribution rights (“IDRs”) prior to the CNXM Merger discussed below.

• Merger-related costs in the prior period consisted of transaction costs, including financial advisory, legal service and other professional fees directly attributable to the CNXM Merger (See Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information), which were recorded to Other Expense in the Consolidated Statements of Income.

• Professional services decreased in the period-to-period comparison primarily due to a decrease in legal fees.

Gain on Asset Sales and Abandonments, net

A gain on asset sales of $42 million related to the sale of various non-core assets (primarily rights-of-way, surface acreage and other non-core oil and gas interests) was recognized in the year ended December 31, 2021 compared to a gain of $21 million in the year ended December 31, 2020.

Loss (Gain) on Debt Extinguishment

A loss on debt extinguishment of $34 million was recognized in the year ended December 31, 2021 compared to a gain on debt extinguishment of $10 million in the year ended December 31, 2020.

During the year ended December 31, 2021, CNXM purchased all of the 6.50% Senior Notes due March 2026 and CNX repaid in full and terminated the Cardinal States

Gathering Company LLC and CSG Holdings II LLC non-revolving credit facilities.

During the year ended December 31, 2020, CNX purchased the remaining $894 million of its 5.875% Senior Notes due April 2022 at an average price equal to 98.6% of the principal amount.

A net gain on asset sales of $9 million was recognized in the year ended December 31, 2022 compared to a gain of $42 million in the year ended December 31, 2021.

During the year ended December 31, 2022, the Company sold various non-core assets, primarily rights-of-way, surface acreage and other non-core oil and gas interests, the gains from which were partially offset by costs related to the plugging and abandonment of a Shale wellbore.

This well was originally part of the 2023 development plan, and in order to not delay other wells, CNX plugged the wellbore and plans on accessing the reserves at a future date.

During the year ended December 31, 2021, the Company sold various non-core assets, primarily rights-of-way, surface acreage and other non-core oil and gas interests.

Loss on Debt Extinguishment

A loss on debt extinguishment of $23 million was recognized in the year ended December 31, 2022 compared to a loss on debt extinguishment of $34 million in the year ended December 31, 2021.

During the year ended December 31, 2022, CNX purchased a portion of the Convertible Notes due May 2026 and $350 million of the 7.25% Senior Notes due March 2027 at an average price equal to 102.5% of the principal amount.

During the year ended December 31, 2021, CNXM purchased all of the 6.50% Senior Notes due March 2026 and CNX repaid in full and terminated the Cardinal States Gathering Company LLC and CSG Holdings II LLC non-revolving credit facilities.

See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

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Total Interest Expense $ 128 $ 151 $ (23) (15.2) %

• The $20 million decrease was primarily due to the purchase of the remaining $894 million of the 5.875% Senior Notes due April 2022 during the year ended December 31, 2020 and the purchase of the $400 million 6.500% CNXM Senior Notes due March 2026 during the year ended December 31, 2021.

Lower borrowings on the CNX Credit Facility and higher unrealized gains on interest rate swap agreements also contributed to the decrease.

These decreases were offset in part by $400 million of 4.750% CNXM Senior Notes due 2030 issued in 2021, interest related to the addition in 2020 of $345 million of Convertible Notes due 2026, $500 million of 6.00% Senior Notes due 2029 issued in 2020, and an additional $200 million of 7.25% Senior Notes due 2027 issued in 2020.

The amortization of debt discount in connection with the Convertible Notes also contributed to the offsetting increase.

The $23 million decrease in total interest expense was primarily due to the purchase of the $400 million 6.500% CNXM Senior Notes due March 2026 during the year ended December 31, 2021, the purchase of the $350 million 7.25% Senior Notes due March 2027 during the year ended December 31, 2022, and lower borrowings on the CNX Credit Facility, offset, in part, by the issuance of $400 million of 4.750% CNXM Senior Notes due April 2030 during the year ended December 31, 2021 and the issuance of $500 million 7.375% Senior Notes due January 2031 during the year ended December 31, 2022.

The decrease was also due to the Company adopting Accounting Standards Update (ASU) 2020-06 - Accounting for Convertible Instruments and Contracts in an Entity's Own Equity on January 1, 2022.

As part of the adoption, total interest expense no longer includes a non-cash interest expense component related to the Convertible Notes due May 2026.

Total interest expense for the year ended December 31, 2021 also included $16 million that was amortized as additional non-cash interest expense related to the equity component of the Convertible Notes due May 2026.

See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

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The effective income tax rate was 33.0% for the year ended December 31, 2022 compared to 21.7% for the year ended December 31, 2021.

The effective rate for the year ended December 31, 2021 differs from the U.S.

federal statutory rate of 21% primarily due to federal tax credits, state income taxes, equity compensation and the increase in certain state valuation allowances as a result of higher-than-expected unrealized losses on commodity derivative instruments during the current period.

The unrealized losses represents changes in the fair value of all the Company's existing commodity hedges on a mark-to-market basis.

The effective rate for the year ended December 31, 2020 differs from the U.S.

federal statutory rate of 21% primarily due to state income taxes, equity compensation and state valuation allowances, partially offset by the benefit from non-controlling interest.

The effective rates for each of the years ended December 31, 2022 and 2021 differ from the U.S.

federal statutory rate of 21% primarily due to federal tax credits, state income taxes including tax rate changes, equity compensation, and the impact of certain state deferred tax asset valuation allowances as a result of the higher unrealized loss on commodity derivative instruments during each of the periods presented.

The unrealized losses represent changes in the fair value of the Company’s existing commodity hedges on a mark-to-market basis.

See Note 6 – Income Taxes in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

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CNX currently believes that cash generated from operations, asset sales and the Company's borrowing capacity will be sufficient to meet the Company's working capital requirements, anticipated capital expenditures (other than major acquisitions), scheduled debt payments, anticipated dividend payments, if any, and to provide required letters of credit for the current fiscal year.

Nevertheless, the ability of CNX to satisfy its working capital requirements, to service its debt obligations, to fund planned capital expenditures, or to pay dividends will depend upon future operating performance, which will be affected by prevailing economic conditions in the natural gas industry and other financial and business factors, including the current COVID-19 pandemic, some of which are beyond CNX’s control.

From time to time, CNX is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business.

Some of these assurances are posted to comply with federal, state or other government agencies' statutes and regulations.

CNX sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the

Company's borrowing facility capacity.

CNX sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company's borrowing facility capacity.

CNX continuously reviews its liquidity and capital resources.

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• The Company’s cash on hand and access to additional liquidity.

As of December 31, 2021, cash and cash equivalents totaled $3.6 million.

• Accounts and notes receivable - trade as of December 31, 2021 and 2020 was $330.1 million and $145.9 million, respectively.

Cash and cash equivalents as of December 31, 2022 and December 31, 2021 were $21.3 million and $3.6 million, respectively.

• Accounts and notes receivable - trade as of December 31, 2022 and 2021 were $348.5 million and $330.1 million, respectively.

Our accounts and notes receivable balance may fluctuate as of any balance sheet date depending on the prices we receive for our natural gas and NGLs and the volumes sold.

• Capital expenditures are expected to range between $575 million to $675 million for the year ended December 31, 2023, compared to capital expenditures of $565.8 million in fiscal year 2022.

In addition, accelerated levels of inflation may lead to price increases beyond CNX’s control that could lead to CNX incurring an increase in costs in the future.

Accelerated levels of inflation may lead to price increases beyond CNX’s control that could lead to CNX incurring an increase in costs in the future.

• Production volumes are expected to range between 555.0 Bcfe and 575.0 Bcfe for the year ended December 31, 2023, compared to production volumes of 580.2 Bcfe in fiscal year 2022.

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CNX also enters into various financial natural gas swap transactions to manage the market risk exposure to in-basin and out-of-basin pricing.

The fair value of these contracts was a net liability of $976 million at December 31, 2021 and a net asset of $118 million at December 31, 2020.

The fair value of these contracts was a net liability of $1,905 million at December 31, 2022 and a net liability of $976 million at December 31, 2021.

The Company has not experienced any issues of non-performance by derivative counterparties.

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Cash provided by operating activities changed in the period-to-period comparison primarily due to the following items:

• Net loss increased $70 million in the period-to-period comparison.

• Adjustments to reconcile net loss to cash provided by operating activities primarily consisted of a $473 million impairment of goodwill and a $62 million impairment of exploration and production properties in the prior year, an $805 million net change in commodity derivative instruments, a $20 million change in deferred income taxes, a $44 million change in gain/loss on debt extinguishment, as well as various other changes in working capital.

• Net loss decreased $357 million in the period-to-period comparison.

• Adjustments to reconcile net loss to cash provided by operating activities primarily consisted of an $165 million net change in commodity derivative instruments, a $62 million change in deferred income taxes, a $54 million change in depreciation, depletion and amortization, a $33 million change in gain on asset sales and abandonments, net, and various other changes in working capital.

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

• Capital expenditures decreased $21 million in the period-to-period comparison primarily due to decreased expenditures in the Shale segment resulting from decreased drilling and completions activity as well as decreased midstream activity.

• Proceeds from asset sales decreased $3 million mainly due to decreased sales of rights-of-way, surface acreage and other non-core oil and gas interests in the year ended December 31, 2021.

• Capital expenditures increased $100 million primarily due to an increase in drilling and completions activity, midstream activity and an overall increase in costs related to inflation.

• Proceeds from asset sales decreased $8 million mainly due to decreased sales of non-core surface and oil and gas interests in the year ended December 31, 2022.

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

• During the year ended December 31, 2022, CNX closed on $500 million aggregate principal amount of CNX 7.375% Senior Notes due January 2031 at a price of 98.8% for cash proceeds of $494 million.

See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2022, CNX paid $359 million to repurchase $350 million of CNX 7.25% Senior Notes due March 2027 at 102.5% of the principal amount.

See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2022, CNX paid 27 million to repurchase $14 million of the 2026 Convertible Notes at 188.0% of the principal amount.

See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2022, there were $31 million of net payments on the CNXM Credit Facility compared to $106 million of net payments during the year ended December 31, 2021.

• During the year ended December 31, 2022, there were $192 million of net payments on the CNX Credit Facility compared to $31 million of net proceeds during the year ended December 31, 2021.

• During the year ended December 31, 2021, CNXM paid $421 million to purchase $400 million of CNXM 6.50% Senior Notes due in March 2026 at 105.3% of the principal amount.

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See Note 12 – Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• In the year ended December 31, 2021, there were $106 million of net payments on the CNXM Credit Facility compared to $21 million of net payments during the year ended December 31, 2020.

• In the year ended December 31, 2021, there were $31 million of net proceeds on the CNX Credit Facility compared to $500 million of net payments during the year ended December 31, 2020.

• During the year ended December 31, 2021, there were $161 million of net payments on the Cardinal States Facility and CSG Holdings Facility compared to $159 million of net proceeds in the year ended December 31, 2020.

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• During the years ended December 31, 2022 and 2021, CNX repurchased $565 million and $245 million, respectively, of its common stock on the open market.

• During the year ended December 30, 2020, CNX paid $882 million to purchase $894 million of Senior Notes due in 2022 at 98.6% of the principal amount.

See Note 12 - Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2020, CNX received proceeds of $500 million from the issuance of its 6.00% Senior Notes due January 2029.

• During the year ended December 31, 2020, CNX completed a private offering of $200 million aggregate principal amount of its 7.25% Senior Notes due March 2027 at a price of 103.5% for cash proceeds of $207 million.

See Note 12 - Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2020, CNX received proceeds of $335 million from the issuance of Convertible Notes due 2026.

See Note 12 - Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2020, CNX paid $36 million for capped call transactions related to the issuance of the Convertible Notes as mentioned above.

See Note 12 - Long-Term Debt in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

• During the year ended December 31, 2020 there were $42 million of payments to CNXM noncontrolling interest holders compared to no payments during the year ended December 31, 2021 due to the Merger with CNXM.

See Note 4 - Acquisitions and Dispositions in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

Commitments and Significant Contractual Obligations

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This long-term debt consisted of:

• An aggregate principal amount of $700 million of 7.25% Senior Notes due March 2027 plus $6 million of unamortized bond premium.

Interest on the notes is payable March 14 and September 14 of each year.

• An aggregate principal amount of $500 million of 7.375% Senior Notes due January 2031, less $6 million of unamortized bond discount.

Interest on the notes is payable January 15 and July 15 each year.

Payment of the principal and interest on the notes is guaranteed by most of CNX’s subsidiaries but does not include CNXM (or its subsidiaries or general partner).

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CNX is not a guarantor of these notes.

• An aggregate principal amount of $345 million of 2.25% Convertible Senior Notes due May 2026, unless earlier redeemed, repurchased, or converted, less $91 million of unamortized bond discount and issuance costs.

Interest on the notes is payable May 1 and November 1 of each year.

• An aggregate principal amount of $350 million of 7.25% Senior Notes due March 2027 plus $2 million of unamortized bond premium.

Interest on the notes is payable March 14 and September 14 of each year.

Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner).

• An aggregate principal amount of $192 million in outstanding borrowings under the CNX Credit Facility.

Payment of the principal and interest on the CNX Credit Facility is guaranteed by most of CNX's subsidiaries but does not include

CNXM (or its subsidiaries or general partner).

• An aggregate principal amount of $331 million of 2.25% Convertible Senior Notes due May 2026, unless earlier redeemed, repurchased, or converted, less $7 million of unamortized discount and issuance costs.

Interest on the notes

is payable May 1 and November 1 of each year.

Payment of the principal and interest on the notes is guaranteed by most of CNX's subsidiaries but does not include CNXM (or its subsidiaries or general partner).

• An aggregate principal amount of $154 million in outstanding borrowings under the CNXM Credit Facility.

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The Credit Facility does not permit such dividend payments when an event of default has occurred and is continuing.

The indentures to the 7.25% Senior Notes due March 2027 and the 6.00% Senior Notes due January 2029 limit dividends to $0.50 per share annually unless several conditions are met.

The indentures to the 7.25% Senior Notes due March 2027, the 6.00% Senior Notes due January 2029, and the 7.375% Senior Notes due January 2031 limit dividends to $0.50 per share annually unless several conditions are met.

These conditions include no defaults, ability to incur additional debt and other payment limitations under the indentures.

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We evaluate our estimates on an on-going basis.

Actual results could differ from those estimates upon subsequent resolution of identified matters.

Actual results could differ from those estimates upon the subsequent resolution of identified matters.

Management believes that the estimates utilized are reasonable.

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Future results of operations for any particular quarterly or annual period could be materially affected by changes in the Company’s assumptions.

Deferred tax assets and liabilities are recognized using enacted tax rates for the estimated future tax effects of temporary

differences between the book and tax basis of recorded assets and liabilities.

Deferred tax assets and liabilities are recognized using enacted tax rates for the estimated future tax effects of temporary differences between the book and tax basis of recorded assets and liabilities.

Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion of the deferred tax asset will not be realized.

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The evaluation of the sustainability of a tax position and the probable amount that is more likely than not is based on judgment, historical experience and on various other assumptions that we believe are reasonable under the circumstances.

The results of these estimates, that are not readily apparent from other sources, form the basis for recognizing an uncertain tax liability.

Actual results could differ from those estimates upon subsequent resolution of identified matters.

The results of these estimates, which are not readily apparent from other sources, form the basis for recognizing an uncertain tax liability.

Actual results could differ from those estimates upon the subsequent resolution of identified matters.

See Note 6 – Income Taxes in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for additional information regarding the Company’s uncertain tax liabilities.

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For these reasons, estimates of the economically recoverable quantities of gas attributable to a particular group of properties, and classifications of these reserves based on risk of recovery and estimates of future net cash flows, may vary substantially.

Actual production, revenues and expenditures with respect to our reserves will likely vary from estimates, and these variances may be material.

Actual production,

revenues and expenditures with respect to our reserves will likely vary from estimates, and these variances may be material.

See “Risk Factors” in Item 1A of this Form 10-K for a discussion of the uncertainties in estimating our reserves.

The Company believes that the accounting estimate related to oil and gas reserves is a “critical accounting estimate” because the Company must periodically reevaluate proved reserves along with estimates of future production rates, production

costs and the estimated timing of development expenditures.

Future results of operations and strength of the balance sheet for any particular quarterly or annual period could be materially affected by changes in the Company’s assumptions.

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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 a market-specific weighted average cost of capital.

For the year ended December 31, 2020, an impairment of $62 million was included in Impairment of Exploration and Production Properties in the Consolidated Statements of Income.

This impairment was related to our Southwest Pennsylvania (SWPA) coalbed methane (CBM) asset group.

See Note 1 - Significant Accounting Policies in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

There were no other impairments related to proved properties in the years ended December 31, 2021 or 2020.

There were no impairments related to proved properties in the years ended December 31, 2022 or 2021.

CNX evaluates capitalized costs of unproved gas properties for recoverability on a prospective basis.

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In connection with the Midstream Acquisition that closed on January 3, 2018, CNX recorded $796 million of goodwill.

See Note 9 - Goodwill and Other Intangible Assets for more information in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

See Note 9 – Goodwill and Other Intangible Assets in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

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.

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terminal growth rates;

and forecasts of revenue, operating income, depreciation and amortization and capital expenditures.

and forecasts of revenue, operating income, depreciation, depletion, and amortization and capital expenditures.

The estimates of future cash flows and EBITDA are subjective in nature and are subject to impacts from business risks as described in Part I.

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Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting unit, the amount of any goodwill impairment charge, or both.

See Note 9 - Goodwill and Other Intangible Assets in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

There were no other impairments related to goodwill in the years ended December 31, 2021 or 2020.

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.

For the Company’s annual impairment assessment during the fourth quarter of 2022, the Company elected to perform a qualitative impairment test on its goodwill and concluded that it is more likely than not that the fair value exceeded the carrying value and goodwill was not impaired.

The Company believes that the accounting estimates related to goodwill are “critical accounting estimates” because 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.

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The Company believes the estimates and assumptions used in estimating the fair value are reasonable and appropriate;

however, different assumptions and estimates could materially impact the calculated fair value and the resulting determinations about the

impairment of definite-lived intangible assets which could materially impact the Company’s results of operations and financial position.

however, different assumptions and estimates could materially impact the calculated fair value and the resulting determinations about the impairment of definite-lived intangible assets which could materially impact the Company’s results of operations and financial position.

Additionally, future estimates may differ materially from current estimates and assumptions.

Convertible Senior Notes

CNX accounted for its Convertible Senior Notes due May 2026 as separate liability and equity components.

The carrying amount of the liability component of the instrument was computed by estimating the fair value of a similar liability without the conversion option.

The amount of the equity component was then calculated by deducting the fair value of the liability component from the principal amount of the instrument.

The difference between the principal amount and the liability component represents a debt discount that is amortized to interest expense over the respective term of the Convertible Notes using the effective interest rate method.

The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

Additionally, a detailed analysis of the terms of the convertible senior notes transactions was required to determine existence of any derivatives that may require separate mark-to-market accounting under applicable accounting guidance.

The Company believes that the accounting estimates related to the Convertible Notes are “critical accounting estimates” because of the judgment required when determining the balance sheet classification of the elements of the Convertible Notes as well as the existence of any derivatives that may require separate presentation under the applicable accounting guidance.

The Company believes the estimates and assumptions used in estimating the fair value are reasonable and appropriate;

however, different assumptions and estimates could materially impact the calculated fair value and the resulting balance sheet classification.

Derivative Instruments.

We enter into derivative commodity instrument contracts primarily to reduce exposure to commodity price risk associated with future sales of natural gas production.

See Note 18 – Fair Value of Financial Instruments to the Consolidated Financial Statements for a description of the fair value hierarchy.

The values reported in the Consolidated Financial Statements change as these estimates are revised to reflect actual results or as market conditions or other factors, many of which are beyond our control, change.

We believe derivative instruments are "critical accounting estimates" because our financial condition and results of operations can be significantly impacted by changes in the market value of our derivative instruments due to the volatility of both NYMEX natural gas prices and basis.

Future results of operations for any quarterly or annual period could be materially affected by changes in our assumptions.

Refer to Item 7A., "Quantitative and Qualitative Disclosures about Market Risk" of this Form 10-K for discussion of a hypothetical increase or decrease of 10% in the market price of natural gas.

Recent Accounting Pronouncements

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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 7. Management’s Discussion and Analysis