Segment Information | SEGMENT INFORMATION: The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company evaluates the performance of its reportable segments based on total revenue and other operating income, and operating expenses directly attributable to that segment. Certain expenses are managed outside the reportable segments and therefore are not allocated. These expenses include, but are not limited to, interest expense, impairment of exploration and production properties, impairment of goodwill and other corporate expenses such as selling, general and administrative costs. CNX's principal activity is to produce pipeline quality natural gas for sale primarily to gas wholesalers and the Company has 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. Prior to the Merger of CNXM that occurred in September 2020 (See Note 13 - 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 2020 segment information have been made to conform to the new presentation. Industry segment results for the three months ended June 30, 2021 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 332,659 $ 36,505 $ 285 $ 369,449 (A) Purchased Gas Revenue — — 16,706 16,706 Loss on Commodity Derivative Instruments (9,394) (962) (528,503) (538,859) Other Revenue and Operating Income 18,679 — 6,815 25,494 (B) Total Revenue and Other Operating Income (Loss) $ 341,944 $ 35,543 $ (504,697) $ (127,210) Total Operating Expense $ 191,996 $ 28,204 $ 60,511 $ 280,711 Earnings (Loss) Before Income Tax $ 149,948 $ 7,339 $ (603,463) $ (446,176) Segment Assets $ 6,095,486 $ 1,069,470 $ 907,154 $ 8,072,110 (C) Depreciation, Depletion and Amortization $ 104,380 $ 14,264 $ 3,963 $ 122,607 Capital Expenditures $ 127,230 $ 1,502 $ 226 $ 128,958 (A) Included in Total Natural Gas, NGL and Oil Revenue are sales of $60,162 to Citadel Energy Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (B) Includes midstream revenue of $18,679 and equity in earnings of unconsolidated affiliates of $1,553 for Shale and Other, respectively. (C) Includes investments in unconsolidated equity affiliates of $16,726. Industry segment results for the three months ended June 30, 2020 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 152,627 $ 22,929 $ 220 $ 175,776 (D) Purchased Gas Revenue — — 20,424 20,424 Gain (Loss) on Commodity Derivative Instruments 100,262 13,005 (176,570) (63,303) (E) Other Revenue and Operating Income 12,191 — 3,753 15,944 (F) Total Revenue and Other Operating Income (Loss) $ 265,080 $ 35,934 $ (152,173) $ 148,841 Total Operating Expense $ 154,306 $ 29,324 $ 78,882 $ 262,512 Earnings (Loss) Before Income Tax $ 110,774 $ 6,610 $ (276,516) $ (159,132) Segment Assets $ 6,096,101 $ 1,132,217 $ 1,091,366 $ 8,319,684 (G) Depreciation, Depletion and Amortization $ 93,984 $ 15,701 $ 3,860 $ 113,545 Capital Expenditures $ 131,974 $ 2,034 $ 844 $ 134,852 (D) Included in Total Natural Gas, NGL and Oil Revenue are sales of $33,711 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (E) Included in Other is a realized gain on commodity derivative instruments of $29,015 related to the monetization of hedges (see Note 11 - Derivative Instruments for more information). (F) Includes midstream revenue of $12,191 and equity in losses of unconsolidated affiliates of $1,259 for Shale and Other, respectively. (G) Includes investments in unconsolidated equity affiliates of $15,159. Industry segment results for the six months ended June 30, 2021 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 674,828 $ 75,409 $ 437 $ 750,674 (A) Purchased Gas Revenue — — 50,190 50,190 Loss on Commodity Derivative Instruments (7,212) (740) (497,493) (505,445) Other Revenue and Operating Income 37,745 — 12,700 50,445 (B) Total Revenue and Other Operating Income (Loss) $ 705,361 $ 74,669 $ (434,166) $ 345,864 Total Operating Expense $ 380,707 $ 56,759 $ 143,050 $ 580,516 Earnings (Loss) Before Income Tax $ 324,654 $ 17,910 $ (653,335) $ (310,771) Segment Assets $ 6,095,486 $ 1,069,470 $ 907,154 $ 8,072,110 (C) Depreciation, Depletion and Amortization $ 213,886 $ 29,747 $ 7,918 $ 251,551 Capital Expenditures $ 248,348 $ 3,644 $ 395 $ 252,387 (A) Included in Total Natural Gas, NGL and Oil Revenue are sales of $100,465 to Citadel Energy Marketing LLC and $80,189 to Direct Energy Business Marketing LLC, each of which comprises over 10% of revenue from contracts with external customers for the period. (B) Includes midstream revenue of $37,745 and equity in earnings of unconsolidated affiliates of $2,504 for Shale and Other, respectively. (C) Includes investments in unconsolidated equity affiliates of $16,726. Industry segment results for the six months ended June 30, 2020 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 373,121 $ 53,652 $ 497 $ 427,270 (D) Purchased Gas Revenue — — 46,783 46,783 Gain (Loss) on Commodity Derivative Instruments 186,714 22,692 (157,567) 51,839 (E) Other Revenue and Operating Income 30,597 — 8,711 39,308 (F) Total Revenue and Other Operating Income (Loss) $ 590,432 $ 76,344 $ (101,576) $ 565,200 Total Operating Expense $ 346,254 $ 63,484 $ 696,073 $ 1,105,811 Earnings (Loss) Before Income Tax $ 244,178 $ 12,860 $ (873,975) $ (616,937) Segment Assets $ 6,096,101 $ 1,132,217 $ 1,091,366 $ 8,319,684 (G) Depreciation, Depletion and Amortization $ 201,030 $ 34,139 $ 7,540 $ 242,709 Capital Expenditures $ 279,814 $ 4,486 $ 2,601 $ 286,901 (D) Included in Total Natural Gas, NGL and Oil Revenue are sales of $79,367 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (E) Included in Other is a realized gain on commodity derivative instruments of $83,997 related to the monetization of hedges (see Note 11 - Derivative Instruments for more information). (F) Includes midstream revenue of $30,597 and equity in losses of unconsolidated affiliates of $1,421 for Shale and Other, respectively. (G) Includes investments in unconsolidated equity affiliates of $15,159. Reconciliation of Segment Information to Consolidated Amounts: Revenue and Other Operating (Loss) Income For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Total Segment Revenue from Contracts with External Customers $ 404,834 $ 208,391 $ 838,609 $ 504,650 (Loss) Gain on Commodity Derivative Instruments (538,859) (63,303) (505,445) 51,839 Other Operating Income 6,815 3,753 12,700 8,711 Total Consolidated Revenue and Other Operating (Loss) Income $ (127,210) $ 148,841 $ 345,864 $ 565,200 |