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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
Leases | LEASES: CNX's leasing activities primarily consist of operating and finance leases for electric fracturing equipment, natural gas drilling rigs, CNX's corporate headquarters as well as field offices, a natural gas gathering pipeline and commercial vehicles. Some leases include options to renew ranging from a period of 1 to 10 years, which are not recognized as part of the lease right-of-use (ROU) assets or liabilities as they are not reasonably certain to be exercised. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term. As most of CNX's leases do not provide an implicit rate, an incremental borrowing rate is used to determine the present value of lease payments. In accordance with ASC 842, it is the Company’s policy to exclude leases with a term of 12 months or less and to not separate lease components from non-lease components for any asset class. On May 26, 2023, CNX entered into a new lease for office space that is expected to result in an operating lease ROU asset of approximately $5,270 and an operating lease obligation of approximately $4,370 in April 2024, which is when the lease is expected to commence. On January 2, 2024, CNX entered into a new lease for an electric-powered drilling system that is expected to result in a finance lease asset, to be included within property, plant and equipment, and as a finance lease obligation of $18,823 in March 2024, which is when the lease is expected to commence. The components of lease cost were as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Operating Lease Cost | $ | 63,087 |  |  | $ | 56,725 |  |  | $ | 60,364 |
Finance Lease Cost: |  |  |  |  |
Amortization of Right-of-Use Assets | 1,628 |  |  | 665 |  |  | 1,577 |
Interest on Lease Liabilities | 429 |  |  | 78 |  |  | 123 |
Short-term Lease Cost | 2,357 |  |  | 7,784 |  |  | 8,589 |
Variable Lease Cost* | 12,401 |  |  | 9,271 |  |  | 7,100 |
Total Lease Cost | $ | 79,902 |  |  | $ | 74,523 |  |  | $ | 77,753 |
*Amounts recognized in the Consolidated Balance Sheets for natural gas drilling rigs are measured using the rates that would be paid if the rigs were idle, as this represents the minimum payment that could be made under the contract. Variable lease cost represents amounts paid for natural gas drilling rigs above this minimum when the rigs are in use. Amounts recognized in the Consolidated Balance Sheets for electric fracturing equipment are measured using minimum pumping hours under the contract; however, pumping hours may exceed the minimum and vary period to period. Any such amounts paid related to pumping hours in excess of the minimum represent variable lease cost. Amounts recognized in the Consolidated Balance Sheets are as follows:
| December 31,
| 2023 |  | 2022
Operating Leases: |  |  |
Operating Lease Right-of-Use Assets | $ | 139,466 |  |  | $ | 174,849 |
Current Portion of Operating Lease Obligations | $ | 53,791 |  |  | $ | 47,436 |
Operating Lease Obligations | 89,531 |  |  | 132,105 |
Total Operating Lease Liabilities | $ | 143,322 |  |  | $ | 179,541 |
Finance Leases: |  |  |
Property, Plant and Equipment | $ | 10,864 |  |  | $ | 6,777 |
Less—Accumulated Depreciation, Depletion and Amortization | 3,502 |  |  | 3,926 |
Property, Plant and Equipment—Net | $ | 7,362 |  |  | $ | 2,851 |
Current Portion of Finance Lease Obligations | $ | 1,862 |  |  | $ | 881 |
Finance Lease Obligations | 5,500 |  |  | 1,970 |
Total Finance Lease Liabilities | $ | 7,362 |  |  | $ | 2,851 |
Supplemental cash flow information related to leases was as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Cash Paid for Amounts Included in the Measurement of Lease Liabilities: |  |  |  |  |
Operating Cash Flows for Operating Leases | $ | 64,139 |  |  | $ | 55,729 |  |  | $ | 56,966 |
Operating Cash Flows for Finance Leases | $ | 429 |  |  | $ | 78 |  |  | $ | 123 |
Financing Cash Flows for Finance Leases | $ | 1,627 |  |  | $ | 665 |  |  | $ | 2,785 |
Right-of-Use Assets Obtained in Exchange for Lease Obligations: |  |  |  |  |
Operating Leases | $ | 19,477 |  |  | $ | 36,758 |  |  | $ | 4,010 |
Finance Leases | $ | 6,178 |  |  | $ | 1,742 |  |  | $ | 772 |
Maturities of lease liabilities are as follows:
| Operating |  | Finance
| Leases |  | Leases
Year Ended December 31, |  |  |
2024 | $ | 59,430 |  |  | $ | 2,401 |
2025 | 50,373 |  |  | 2,347 |
2026 | 19,372 |  |  | 2,278 |
2027 | 6,048 |  |  | 1,963 |
2028 | 6,109 |  |  | 598 |
Thereafter | 15,422 |  |  | 30 |
Total Lease Payments | 156,754 |  |  | 9,617 |
Less: Interest | 13,432 |  |  | 2,255 |
Present Value of Lease Liabilities | $ | 143,322 |  |  | $ | 7,362 |
Lease terms and discount rates are as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Weighted Average Remaining Lease Term (years): |  |  |  |  |
Operating Leases | 3.59 |  | 4.41 |  | 6.20
Finance Leases | 4.08 |  | 4.01 |  | 3.56
Weighted Average Discount Rate: |  |  |  |  |
Operating Leases | 4.84 | % |  | 4.65 | % |  | 4.84 | %
Finance Leases | 7.35 | % |  | 6.17 | % |  | 1.72 | %
Leases | LEASES: CNX's leasing activities primarily consist of operating and finance leases for electric fracturing equipment, natural gas drilling rigs, CNX's corporate headquarters as well as field offices, a natural gas gathering pipeline and commercial vehicles. Some leases include options to renew ranging from a period of 1 to 10 years, which are not recognized as part of the lease right-of-use (ROU) assets or liabilities as they are not reasonably certain to be exercised. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term. As most of CNX's leases do not provide an implicit rate, an incremental borrowing rate is used to determine the present value of lease payments. In accordance with ASC 842, it is the Company’s policy to exclude leases with a term of 12 months or less and to not separate lease components from non-lease components for any asset class. On May 26, 2023, CNX entered into a new lease for office space that is expected to result in an operating lease ROU asset of approximately $5,270 and an operating lease obligation of approximately $4,370 in April 2024, which is when the lease is expected to commence. On January 2, 2024, CNX entered into a new lease for an electric-powered drilling system that is expected to result in a finance lease asset, to be included within property, plant and equipment, and as a finance lease obligation of $18,823 in March 2024, which is when the lease is expected to commence. The components of lease cost were as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Operating Lease Cost | $ | 63,087 |  |  | $ | 56,725 |  |  | $ | 60,364 |
Finance Lease Cost: |  |  |  |  |
Amortization of Right-of-Use Assets | 1,628 |  |  | 665 |  |  | 1,577 |
Interest on Lease Liabilities | 429 |  |  | 78 |  |  | 123 |
Short-term Lease Cost | 2,357 |  |  | 7,784 |  |  | 8,589 |
Variable Lease Cost* | 12,401 |  |  | 9,271 |  |  | 7,100 |
Total Lease Cost | $ | 79,902 |  |  | $ | 74,523 |  |  | $ | 77,753 |
*Amounts recognized in the Consolidated Balance Sheets for natural gas drilling rigs are measured using the rates that would be paid if the rigs were idle, as this represents the minimum payment that could be made under the contract. Variable lease cost represents amounts paid for natural gas drilling rigs above this minimum when the rigs are in use. Amounts recognized in the Consolidated Balance Sheets for electric fracturing equipment are measured using minimum pumping hours under the contract; however, pumping hours may exceed the minimum and vary period to period. Any such amounts paid related to pumping hours in excess of the minimum represent variable lease cost. Amounts recognized in the Consolidated Balance Sheets are as follows:
| December 31,
| 2023 |  | 2022
Operating Leases: |  |  |
Operating Lease Right-of-Use Assets | $ | 139,466 |  |  | $ | 174,849 |
Current Portion of Operating Lease Obligations | $ | 53,791 |  |  | $ | 47,436 |
Operating Lease Obligations | 89,531 |  |  | 132,105 |
Total Operating Lease Liabilities | $ | 143,322 |  |  | $ | 179,541 |
Finance Leases: |  |  |
Property, Plant and Equipment | $ | 10,864 |  |  | $ | 6,777 |
Less—Accumulated Depreciation, Depletion and Amortization | 3,502 |  |  | 3,926 |
Property, Plant and Equipment—Net | $ | 7,362 |  |  | $ | 2,851 |
Current Portion of Finance Lease Obligations | $ | 1,862 |  |  | $ | 881 |
Finance Lease Obligations | 5,500 |  |  | 1,970 |
Total Finance Lease Liabilities | $ | 7,362 |  |  | $ | 2,851 |
Supplemental cash flow information related to leases was as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Cash Paid for Amounts Included in the Measurement of Lease Liabilities: |  |  |  |  |
Operating Cash Flows for Operating Leases | $ | 64,139 |  |  | $ | 55,729 |  |  | $ | 56,966 |
Operating Cash Flows for Finance Leases | $ | 429 |  |  | $ | 78 |  |  | $ | 123 |
Financing Cash Flows for Finance Leases | $ | 1,627 |  |  | $ | 665 |  |  | $ | 2,785 |
Right-of-Use Assets Obtained in Exchange for Lease Obligations: |  |  |  |  |
Operating Leases | $ | 19,477 |  |  | $ | 36,758 |  |  | $ | 4,010 |
Finance Leases | $ | 6,178 |  |  | $ | 1,742 |  |  | $ | 772 |
Maturities of lease liabilities are as follows:
| Operating |  | Finance
| Leases |  | Leases
Year Ended December 31, |  |  |
2024 | $ | 59,430 |  |  | $ | 2,401 |
2025 | 50,373 |  |  | 2,347 |
2026 | 19,372 |  |  | 2,278 |
2027 | 6,048 |  |  | 1,963 |
2028 | 6,109 |  |  | 598 |
Thereafter | 15,422 |  |  | 30 |
Total Lease Payments | 156,754 |  |  | 9,617 |
Less: Interest | 13,432 |  |  | 2,255 |
Present Value of Lease Liabilities | $ | 143,322 |  |  | $ | 7,362 |
Lease terms and discount rates are as follows:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Weighted Average Remaining Lease Term (years): |  |  |  |  |
Operating Leases | 3.59 |  | 4.41 |  | 6.20
Finance Leases | 4.08 |  | 4.01 |  | 3.56
Weighted Average Discount Rate: |  |  |  |  |
Operating Leases | 4.84 | % |  | 4.65 | % |  | 4.84 | %
Finance Leases | 7.35 | % |  | 6.17 | % |  | 1.72 | %

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