Segment Information

12 Months Ended

Dec. 31, 2019

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. 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.

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



	Marcellus Shale		Utica Shale		Coalbed Methane		Other Gas			Total E&P			Midstream		Unallocated		Intercompany Eliminations			Consolidated
Natural Gas, NGLs and Oil Revenue	$	934,728	$	264,548	$	163,893	$	1,156		$	1,364,325		$	—	$	—	$	—		$	1,364,325	(A)
Purchased Gas Revenue	—		—		—		94,027			94,027			—		—		—			94,027
Midstream Revenue	—		—		—		—			—			307,024		—		(232,710		)	74,314
Gain on Commodity Derivative Instruments	47,475		14,943		7,335		306,352			376,105			—		—		—			376,105
Other Operating Income	—		—		—		14,057			14,057			—		—		(379		)	13,678		(B)
Total Revenue and Other Operating Income	$	982,203	$	279,491	$	171,228	$	415,592		$	1,848,514		$	307,024	$	—	$	(233,089	)	$	1,922,449
Earnings (Loss) From Continuing Operations Before Income Tax	$	234,284	$	87,972	$	35,170	$	(497,869	)	$	(140,443	)	$	166,654	$	33,473	$	—		$	59,684
Segment Assets										$	6,745,091		$	2,230,676	$	78,708	$	6,331		$	9,060,806	(C)
Depreciation, Depletion and Amortization										$	474,352		$	34,111	$	—	$	—		$	508,463
Capital Expenditures										$	867,860		$	324,739	$	—	$	—		$	1,192,599


(A)	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.


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


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

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



	Marcellus Shale			Utica Shale			Coalbed Methane			Other Gas			Total E&P			Midstream		Unallocated		Intercompany Eliminations			Consolidated
Natural Gas, NGLs and Oil Revenue	$	903,316		$	445,880		$	212,884		$	15,857		$	1,577,937		$	—	$	—	$	—		$	1,577,937		(D)
Purchased Gas Revenue	—			—			—			65,986			65,986			—		—		—			65,986
Midstream Revenue	—			—			—			—			—			258,074		—		(168,293		)	89,781
(Loss) Gain on Commodity Derivative Instruments	(40,444		)	(19,882		)	(8,767		)	38,881			(30,212		)	—		—		—			(30,212		)
Other Operating Income	—			—			—			27,218			27,218			—		—		(276		)	26,942			(E)
Total Revenue and Other Operating Income	$	862,872		$	425,998		$	204,117		$	147,942		$	1,640,929		$	258,074	$	—	$	(168,569	)	$	1,730,434
Earnings (Loss) From Continuing Operations Before Income Tax	$	254,310		$	194,164		$	49,719		$	(253,577	)	$	244,616		$	133,811	$	720,241	$	—		$	1,098,668
Segment Assets													$	6,518,597		$	1,919,117	$	166,679	$	(12,223	)	$	8,592,170		(F)
Depreciation, Depletion and Amortization													$	461,149		$	32,274	$	—	$	—		$	493,423
Capital Expenditures													$	974,059		$	142,338	$	—	$	—		$	1,116,397


(D)	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.


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


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

Industry segment results for the year ended December 31, 2017 are:



	Marcellus Shale			Utica Shale		Coalbed Methane			Other Gas			Total E&P			Unallocated		Consolidated
Natural Gas, NGLs and Oil Revenue	$	646,188		$	217,020	$	208,677		$	53,339		$	1,125,224		$	—	$	1,125,224	(G)
Purchased Gas Revenue	—			—		—			53,795			53,795			—		53,795
(Loss) Gain on Commodity Derivative Instruments	(30,336		)	1,367		(9,589		)	245,488			206,930			—		206,930
Other Operating Income	—			—		—			69,182			69,182			—		69,182		(H)
Total Revenue and Other Operating Income	$	615,852		$	218,387	$	199,088		$	421,804		$	1,455,131		$	—	$	1,455,131
Earnings (Loss) From Continuing Operations Before Income Tax	$	91,436		$	64,741	$	20,346		$	(240,050	)	$	(63,527	)	$	182,108	$	118,581
Segment Assets												$	6,391,223		$	540,690	$	6,931,913	(I)
Depreciation, Depletion and Amortization												$	412,036		$	—	$	412,036
Capital Expenditures												$	632,846		$	—	$	632,846


(G)	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.


(H)	Includes equity in earnings of unconsolidated affiliates of $49,830 for Total E&P.

(I)

Includes investments in unconsolidated equity affiliates of $197,921 for Total E&P.

Reconciliation of Segment Information to Consolidated Amounts:

Revenue and Other Operating Income:



	For the Years Ended December 31,
	2019		2018			2017
Total Segment Revenue from Contracts with External Customers	$	1,532,666	$	1,733,704		$	1,179,019
Gain (Loss) on Commodity Derivative Instruments	376,105		(30,212		)	206,930
Other Operating Income	13,678		26,942			69,182
Total Consolidated Revenue and Other Operating Income	$	1,922,449	$	1,730,434		$	1,455,131

Earnings (Loss) From Continuing Operations Before Income Tax:



	For the Years Ended December 31,
	2019			2018			2017
Segment Earnings (Loss) Before Income Taxes for Reportable Business Segments:
E&P	$	(140,443	)	$	244,616		$	(63,527	)
Midstream	166,654			133,811			—
Total Segment Earnings (Loss) Before Income Taxes for Reportable Business Segments	26,211			378,427			(63,527		)
Unallocated Expenses:
Other (Expense) Income	(1,396		)	14,571			(3,826		)
Gain on Certain Asset Sales	42,483			154,775			188,063
Gain on Previously Held Equity Interest	—			623,663			—
Loss on Debt Extinguishment	(7,614		)	(54,118		)	(2,129		)
Impairment of Other Intangible Assets	—			(18,650		)	—
Earnings from Continuing Operations Before Income Tax	$	59,684		$	1,098,668		$	118,581

Total Assets:



	December 31,
	2019		2018
Segment Assets for Total Reportable Business Segments:
E&P	$	6,745,091	$	6,518,597
Midstream	2,230,676		1,919,117
Intercompany Eliminations	6,331		(12,223		)
Items Excluded from Segment Assets:
Cash and Cash Equivalents	16,283		17,198
Recoverable Income Taxes	62,425		149,481
Total Consolidated Assets	$	9,060,806	$	8,592,170