XML 41 R15.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES: Income tax (benefit) expense provided on earnings consisted of:
| For the Years Ended December 31,
| 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |
U.S. Federal | $ | — |  |  | $ | (55,799) |  |  | $ | (51,243) |
U.S. State | 17 |  |  | 12 |  |  | (113) |
| 17 |  |  | (55,787) |  |  | (51,356) |
Deferred: |  |  |  |  |
U.S. Federal | (157,626) |  |  | (83,080) |  |  | 47,717 |
U.S. State | 19,739 |  |  | (35,220) |  |  | 31,375 |
| (137,887) |  |  | (118,300) |  |  | 79,092 |
Total Income Tax (Benefit) Expense | $ | (137,870) |  |  | $ | (174,087) |  |  | $ | 27,736 |
The components of the net deferred taxes are as follows:
| December 31,
| 2021 |  | 2020
Deferred Tax Assets: |  |  |
Gas Derivatives | $ | 262,658 |  |  | $ | — |
Net Operating Loss- Federal | 209,731 |  |  | 215,936 |
Net Operating Loss - State | 128,592 |  |  | 129,641 |
Foreign Tax Credit | 39,404 |  |  | 43,194 |
Federal Tax Credits | 33,034 |  |  | — |
Gas Well Closing | 25,682 |  |  | 24,251 |
Operating Lease Liabilities | 14,322 |  |  | 28,085 |
Salary Retirement | 11,504 |  |  | 11,478 |
Equity Compensation | 5,838 |  |  | 6,639 |
Other | 8,613 |  |  | 9,416 |
Total Deferred Tax Assets | 739,378 |  |  | 468,640 |
Valuation Allowance | (151,798) |  |  | (123,098) |
Net Deferred Tax Assets | 587,580 |  |  | 345,542 |
Deferred Tax Liabilities: |  |  |
Property, Plant and Equipment | (749,811) |  |  | (649,917) |
Investment in Partnership | (133,287) |  |  | (85,882) |
Discount on Convertible Notes | (15,864) |  |  | (18,097) |
Operating Lease Right-of-Use Assets | (14,985) |  |  | (28,287) |
Advance Gas Royalties | (1,842) |  |  | (2,519) |
Gas Derivatives | — |  |  | (26,882) |
Other | (392) |  |  | (211) |
Total Deferred Tax Liabilities | (916,181) |  |  | (811,795) |
Net Deferred Tax Liability | $ | (328,601) |  |  | $ | (466,253) |
Deferred taxes are recorded for certain tax benefits, including net operating losses and tax credit carry-forwards, if management assesses the utilization of those assets to be more likely than not. A valuation allowance is required when it is not more likely than not that all or a portion of a deferred tax asset will be realized. All available evidence, both positive and negative, must be considered in determining the need for a valuation allowance. Positive evidence considered included financial earnings generated over the past three years for certain subsidiaries, reversals of financial to tax temporary differences and the implementation of and/or ability to employ various tax planning strategies. Negative evidence includes financial and tax losses generated in prior periods and the inability to achieve forecasted results for those periods. As of December 31, 2021, the Company has a deferred tax asset related to federal net operating losses of $209,731. The pre-2018 federal net operating losses will expire at various times between 2034 and 2037. Because of the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020, the federal net operating losses (NOLs) generated in 2018 - 2021 do not expire but may only offset 80% of taxable income in any tax years beginning after 2020. The CARES Act, which, among other things; increased the adjusted taxable income limitation for the disallowance of interest expense from 30% to 50% and provided for refunds of any remaining alternative minimum tax (AMT) credits in 2020. The impact of other tax implications of the Act on the financial statements and related disclosures are immaterial. A valuation allowance on foreign tax credits of $39,404 and $43,194 has also been recorded at December 31, 2021 and 2020, respectively. The valuation allowance was decreased by $3,790 in 2021 due to the expiration of a portion of the credits. The foreign tax credits expire at various times between 2022 and 2024. CNX has, on an after federal tax basis, a deferred tax asset related to state operating losses of $128,592 with a related valuation allowance of $112,298 at December 31, 2021. The deferred tax asset related to state operating losses, on an after-tax adjusted basis, was $129,641 with a related valuation allowance of $79,198 at December 31, 2020. A review of positive and negative evidence regarding these state tax benefits concluded that the valuation allowances for various CNX subsidiaries was warranted. West Virginia net operating losses generated after 2017 do not expire but may only offset 80% of taxable income. Pre-2018 West Virginia and other state net operating losses expire at various times between 2022 and 2041. Management will continue to assess the potential for realized deferred tax assets based upon income forecast data and the feasibility of future tax planning strategies and may record adjustments to valuation allowances against deferred tax assets in future periods, as appropriate, that could materially impact net income. The following is a reconciliation, stated as a percentage of pretax income, of the United States statutory federal income tax rate to CNX's effective tax rate:
| For the Years Ended December 31,
| 2021 |  | 2020 |  | 2019
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Statutory U.S. Federal Income Tax Rate | $ | (133,668) |  |  | 21.0 | % |  | $ | (126,595) |  |  | 21.0 | % |  | $ | 12,534 |  |  | 21.0 | %
Net Effect of State Income Taxes | (36,300) |  |  | 5.7 |  |  | (32,336) |  |  | 5.5 |  |  | 1,333 |  |  | 2.2 |
Non-Controlling Interest | — |  |  | — |  |  | (11,556) |  |  | 1.9 |  |  | (23,662) |  |  | (39.6) |
Uncertain Tax Positions | 35,914 |  |  | (5.6) |  |  | 375 |  |  | (0.1) |  |  | — |  |  | — |
Accrual to Tax Return Reconciliation | (3) |  |  | — |  |  | 13 |  |  | — |  |  | 603 |  |  | 1.0 |
Effect of Equity Compensation | 2,465 |  |  | (0.4) |  |  | 4,311 |  |  | (0.7) |  |  | 8,771 |  |  | 14.7 |
Effect of Change in State Valuation Allowance | 33,100 |  |  | (5.2) |  |  | (2,004) |  |  | 0.3 |  |  | 33,238 |  |  | 55.6 |
Effect of Change in Federal Valuation Allowance | (4,400) |  |  | 0.7 |  |  | 48 |  |  | — |  |  | (2,640) |  |  | (4.4) |
Other Deferred Adjustments | (4,401) |  |  | 0.7 |  |  | 1,166 |  |  | (0.2) |  |  | (1,691) |  |  | (2.8) |
Effect of State Apportionment Changes | 22,458 |  |  | (3.5) |  |  | (1,450) |  |  | 0.2 |  |  | (3,842) |  |  | (6.4) |
Effect of Federal Tax Credits | (53,269) |  |  | 8.3 |  |  | (6,284) |  |  | 1.0 |  |  | 2,881 |  |  | 4.8 |
Other | 234 |  |  | — |  |  | 225 |  |  | — |  |  | 211 |  |  | 0.4 |
Income Tax (Benefit) Expense / Effective Rate | $ | (137,870) |  |  | 21.7 | % |  | $ | (174,087) |  |  | 28.9 | % |  | $ | 27,736 |  |  | 46.5 | %
The effective tax rate for the year ended December 31, 2021 was higher than the U.S. federal statutory rate primarily due to federal income tax credits and state taxes offset by uncertain tax positions, equity compensation, and the increase in certain state valuation allowances as a result of a higher-than-expected unrealized loss on commodity derivative instruments generated during 2021. The effective tax rate for the year ended December 31, 2020 was higher than the U.S. federal statutory rate primarily due to state taxes, equity compensation, and the decrease in certain state valuation allowances as a result of the Merger transaction with CNXM partially offset by the benefit from non-controlling interest. The effective tax rate for the year ended December 31, 2019 was higher than the U.S. federal statutory rate primarily due to state taxes, equity compensation, and the increase in certain state valuation allowances as a result of the higher than projected net operating loss generated in 2018 partially offset by the benefit from non-controlling interest. As a result of the Midstream Acquisition on January 3, 2018, the Company obtained a controlling interest in CNX Gathering LLC and, through CNX Gathering's ownership of the general partner, control over CNXM. The financial results for 2020 and 2019 reflect full consolidation of CNXM’s assets and liabilities. The effective tax rates for the years ended December 31, 2020 and 2019 reflect a $11,556 and $23,662 reduction in income tax expense, respectively, due to the non-controlling interest in CNXM’s earnings. In December 2019, the FASB issued ASU 2019-12 - Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This ASU removes the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; (2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in this ASU also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this ASU were applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company early adopted ASU 2019-12 as of January 1, 2020. A reconciliation of the beginning and ending gross amounts of unrecognized tax benefits is as follows:
| For the Years Ended
| December 31,
| 2021 |  | 2020
Balance at Beginning of Period | $ | 31,891 |  |  | $ | 31,516 |
Increase in Unrecognized Tax Benefits Resulting from Tax Positions Taken During Prior Periods | 38,735 |  |  | 1,726 |
Reduction in Unrecognized Tax Benefits Because of the Lapse of the Applicable Statute of Limitations | (2,821) |  |  | (1,351) |
Balance at End of Period | $ | 67,805 |  |  | $ | 31,891 |
If these unrecognized tax benefits were recognized, $67,805 and $31,891 would affect CNX's effective income tax rate for 2021 and 2020, respectively. In 2021 and 2020, CNX recognized an increase in unrecognized tax benefits of $38,735 and $1,726, respectively, for tax benefits resulting from tax positions taken on our 2020 and 2019 federal tax returns for additional federal tax credits. CNX also recognized a reduction to unrecognized tax benefits in 2021 and 2020 of $2,821 and $1,351, respectively, due to the expiration of the statute of limitations from a position taken on a previously filed federal income tax return. CNX recognizes accrued interest related to unrecognized tax benefits in its interest expense. As of December 31, 2021 and 2020, the Company reported no accrued liability relating to interest in Other Liabilities in the Consolidated Balance Sheets. During the years ended December 31, 2021 and 2020, CNX paid no interest related to income tax deficiencies. CNX recognizes penalties accrued related to uncertain tax positions in its income tax expense. CNX had no accrued liabilities for tax penalties as of December 31, 2021 and 2020. CNX and its subsidiaries file federal income tax returns with the United States and income tax returns within various states. With few exceptions, the Company is no longer subject to United States federal, state, local or non-U.S. income tax examinations by tax authorities for the years before 2018.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration