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. Industry segment results for the three months ended September 30, 2021 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 536,412 $ 49,107 $ 396 $ 585,915 (A) Purchased Gas Revenue — — 16,311 16,311 Loss on Commodity Derivative Instruments (119,429) (11,620) (1,376,221) (1,507,270) Other Revenue and Operating Income 19,050 — 5,733 24,783 (B) Total Revenue and Other Operating Income (Loss) $ 436,033 $ 37,487 $ (1,353,781) $ (880,261) Total Operating Expense $ 206,703 $ 30,124 $ 68,031 $ 304,858 Earnings (Loss) Before Income Tax $ 229,330 $ 7,363 $ (1,469,140) $ (1,232,447) Segment Assets $ 6,076,533 $ 1,057,543 $ 1,094,077 $ 8,228,153 (C) Depreciation, Depletion and Amortization $ 111,643 $ 14,031 $ 4,060 $ 129,734 Capital Expenditures $ 94,317 $ 2,105 $ 341 $ 96,763 (A) Included in Total Natural Gas, NGL and Oil Revenue are sales of $93,499 to Citadel Energy Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (B) Includes midstream revenue of $19,050 and equity in earnings of unconsolidated affiliates of $995 for Shale and Other, respectively. (C) Includes investments in unconsolidated equity affiliates of $17,020. Industry segment results for the three months ended September 30, 2020 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 155,792 $ 25,667 $ 754 $ 182,213 (D) Purchased Gas Revenue — — 31,541 31,541 Gain (Loss) on Commodity Derivative Instruments 79,773 10,518 (259,125) (168,834) Other Revenue and Operating Income 16,689 — 4,466 21,155 (E) Total Revenue and Other Operating Income (Loss) $ 252,254 $ 36,185 $ (222,364) $ 66,075 Total Operating Expense $ 165,587 $ 30,439 $ 83,479 $ 279,505 Earnings (Loss) Before Income Tax $ 86,667 $ 5,746 $ (342,485) $ (250,072) Segment Assets $ 6,070,356 $ 1,125,312 $ 933,506 $ 8,129,174 (F) Depreciation, Depletion and Amortization $ 94,617 $ 15,763 $ 4,084 $ 114,464 Capital Expenditures $ 105,988 $ 2,310 $ 37 $ 108,335 (D) Included in Total Natural Gas, NGL and Oil Revenue are sales of $35,645 to Direct Energy Business Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (E) Includes midstream revenue of $16,689 and equity in earnings of unconsolidated affiliates of $396 for Shale and Other, respectively. (F) Includes investments in unconsolidated equity affiliates of $15,685. Industry segment results for the nine months ended September 30, 2021 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 1,211,239 $ 124,516 $ 833 $ 1,336,588 (A) Purchased Gas Revenue — — 66,500 66,500 Loss on Commodity Derivative Instruments (126,641) (12,359) (1,873,714) (2,012,714) Other Revenue and Operating Income 56,795 — 18,432 75,227 (B) Total Revenue and Other Operating Income (Loss) $ 1,141,393 $ 112,157 $ (1,787,949) $ (534,399) Total Operating Expense $ 587,409 $ 86,883 $ 211,080 $ 885,372 Earnings (Loss) Before Income Tax $ 553,984 $ 25,274 $ (2,122,478) $ (1,543,220) Segment Assets $ 6,076,533 $ 1,057,543 $ 1,094,077 $ 8,228,153 (C) Depreciation, Depletion and Amortization $ 325,529 $ 43,779 $ 11,976 $ 381,284 Capital Expenditures $ 342,665 $ 5,749 $ 736 $ 349,150 (A) Included in Total Natural Gas, NGL and Oil Revenue are sales of $193,964 to Citadel Energy Marketing LLC, which comprises over 10% of revenue from contracts with external customers for the period. (B) Includes midstream revenue of $56,795 and equity in earnings of unconsolidated affiliates of $3,499 for Shale and Other, respectively. (C) Includes investments in unconsolidated equity affiliates of $17,020. Industry segment results for the nine months ended September 30, 2020 are: Shale Coalbed Methane Other Consolidated Natural Gas, NGL and Oil Revenue $ 528,913 $ 79,319 $ 1,251 $ 609,483 (D) Purchased Gas Revenue — — 78,324 78,324 Gain (Loss) on Commodity Derivative Instruments 266,488 33,210 (416,693) (116,995) (E) Other Revenue and Operating Income 47,286 — 13,177 60,463 (F) Total Revenue and Other Operating Income (Loss) $ 842,687 $ 112,529 $ (323,941) $ 631,275 Total Operating Expense $ 511,653 $ 94,113 $ 779,532 $ 1,385,298 Earnings (Loss) Before Income Tax $ 331,034 $ 18,416 $ (1,216,459) $ (867,009) Segment Assets $ 6,070,356 $ 1,125,312 $ 933,506 $ 8,129,174 (G) Depreciation, Depletion and Amortization $ 295,648 $ 49,903 $ 11,623 $ 357,174 Capital Expenditures $ 385,763 $ 6,796 $ 2,677 $ 395,236 (D) Included in Total Natural Gas, NGL and Oil Revenue are sales of $115,011 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 $47,286 and equity in losses of unconsolidated affiliates of $1,025 for Shale and Other, respectively. (G) Includes investments in unconsolidated equity affiliates of $15,685. Reconciliation of Segment Information to Consolidated Amounts: Revenue and Other Operating (Loss) Income For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Total Segment Revenue from Contracts with External Customers $ 621,276 $ 230,443 $ 1,459,883 $ 735,093 Loss on Commodity Derivative Instruments (1,507,270) (168,834) (2,012,714) (116,995) Other Operating Income 5,733 4,466 18,432 13,177 Total Consolidated Revenue and Other Operating (Loss) Income $ (880,261) $ 66,075 $ (534,399) $ 631,275 |