CNX Resources(US:CNX)2025-07-24 15:40PART I FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements Presents CNX Resources Corporation's unaudited interim financial statements for Q2 2025 and 2024, with detailed notes on accounting policies, acquisitions, and debt Consolidated Statements of Income CNX reported a net income of $432.5 million in Q2 2025, reversing a net loss of $18.3 million in Q2 2024, driven by derivative gains and increased revenue | Indicator | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue and Other Operating Income | $962,422 | $321,443 | $1,044,811 | $705,995 | | Net Income (Loss) | $432,521 | $(18,261) | $234,806 | $(11,410) | | Diluted Earnings (Loss) per Share | $2.53 | $(0.12) | $1.37 | $(0.07) | Consolidated Balance Sheets Total assets increased to $8.99 billion as of June 30, 2025, from $8.51 billion at year-end 2024, driven by property, plant, and equipment | Balance Sheet Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $394,225 | $370,635 | | Total Property, Plant and Equipment—Net | $7,858,604 | $7,384,111 | | TOTAL ASSETS | $8,987,867 | $8,511,903 | | Total Current Liabilities | $1,197,683 | $1,122,578 | | Total Non-Current Liabilities | $3,697,471 | $3,291,295 | | TOTAL LIABILITIES | $4,895,154 | $4,413,873 | | TOTAL STOCKHOLDERS' EQUITY | $4,092,713 | $4,098,030 | Consolidated Statements of Cash Flows Net cash from operating activities increased to $498.1 million for H1 2025, while investing activities used $728.5 million due to the Apex acquisition | Cash Flow Activity (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $498,147 | $376,830 | | Net Cash Used in Investing Activities | $(728,519) | $(304,199) | | Net Cash Provided by (Used in) Financing Activities | $191,190 | $(69,151) | | Net (Decrease) Increase in Cash | $(39,182) | $3,480 | Notes to Unaudited Consolidated Financial Statements Details key accounting policies, the $517.6 million Apex Energy II acquisition, a $200 million senior note offering, derivative instruments, and the ongoing share repurchase program - On January 27, 2025, the company completed the acquisition of Apex Energy II, LLC for approximately $517.6 million in cash, net of cash received, expanding CNX's undeveloped leasehold in central Pennsylvania79 - During the first six months of 2025, CNX issued an additional $200 million of its 7.25% senior notes due 2032104 - The company repurchased and retired 7.8 million shares for $241.6 million in the first six months of 2025, with $711.6 million remaining available under the board-approved repurchase program as of June 30, 2025161162 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the shift to net income in Q2 2025, driven by higher natural gas prices, production volumes, and derivative gains, alongside liquidity and capital resources Results of Operations CNX reported Q2 2025 net income of $433 million, a significant improvement from a $18 million net loss in Q2 2024, driven by derivative gains and increased sales volumes | Metric (Q2 2025 vs Q2 2024) | Q2 2025 | Q2 2024 | Variance | | :--- | :--- | :--- | :--- | | Net Income (Loss) (in millions) | $433 | $(18) | +$451 | | Total Sales Volumes (Bcfe) | 167.6 | 134.0 | +33.6 | | Average Natural Gas Sales Price ($/Mcf) | $2.84 | $1.60 | +$1.24 | | Cash Settlement on Derivatives (in millions) | $(35) | $110 | $(145) | - The increase in sales volumes was primarily attributed to the Apex Transaction completed in Q1 2025 and the timing of new wells being turned-in-line185 - The Shale segment's earnings before tax rose to $196 million in Q2 2025 from $143 million in Q2 2024, driven by a 27.4% increase in sales volumes and an 80% increase in the average natural gas sales price190191193 Liquidity and Capital Resources CNX maintains sufficient liquidity for the next twelve months, with $450-$500 million in forecasted 2025 capital expenditures and compliance with all debt covenants - The company expects capital expenditures to range between $450 million and $500 million for the full year 2025, with $245 million expended in the first six months276 - As of June 30, 2025, CNX was in compliance with all debt covenants and expects to remain so even with potential commodity price declines274 | Cash Flow (Six Months Ended June 30, 2025) | Amount (in millions) | | :--- | :--- | | Cash Provided by Operating Activities | $498 | | Cash Used in Investing Activities | $(729) | | Cash Provided by Financing Activities | $191 | | Obligation Type | Total Amount (in thousands) | | :--- | :--- | | Purchase Order Firm Commitments | $14,787 | | Gas Firm Transportation and Processing | $1,445,620 | | Long-Term Debt | $2,624,887 | | Interest on Long-Term Debt | $822,515 | Item 3. Quantitative and Qualitative Disclosures About Market Risk CNX manages commodity price and interest rate risks using derivatives, with open derivative instruments in a $471 million net liability position as of June 30, 2025 - The company's open derivative instruments had a net liability fair value of $471 million at June 30, 2025295 - A hypothetical 10% increase in future natural gas prices would decrease the fair value of open derivative instruments by $508 million as of June 30, 2025295 - A hypothetical 100 basis-point increase in interest rates would decrease pre-tax future earnings by $3 million on an annualized basis, based on variable-rate debt outstanding at June 30, 2025296 | Period | Hedged Bcf | Weighted Average Hedge Price per Mcf | | :--- | :--- | :--- | | Q3 2025 | 121.9 | $2.56 | | Q4 2025 | 121.9 | $2.55 | | Full Year 2026 | 437.7 | $2.70 | | Full Year 2027 | 339.7 | $3.26 | Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025299 - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting300 PART II OTHER INFORMATION Item 1. Legal Proceedings Incorporates legal proceedings from Note 11 of the financial statements, with no other significant legal or governmental proceedings expected to materially affect financial results - The company refers to Note 11 for details on commitments and contingent liabilities, which includes information on lawsuits related to the UMWA 1992 Benefit Plan and the 1974 Pension Plan302120121 Item 1A. Risk Factors No material changes to risk factors from the 2024 Form 10-K, except for a previously disclosed risk factor in the Q1 2025 Form 10-Q - There have been no material changes to the Company's risk factors as set forth in the 2024 Form 10-K, other than what was disclosed in the Q1 2025 Form 10-Q304 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds CNX repurchased 3,658,251 shares in Q2 2025, with $711.6 million remaining available under the share repurchase program as of June 30, 2025 | Period (2025) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 1,436,840 | $29.92 | | May | 1,306,351 | $31.60 | | June | 915,060 | $32.78 | | Q2 Total | 3,658,251 | N/A | - As of the end of June 2025, approximately $711.6 million remained available for purchase under the company's share repurchase program305 Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers modified or terminated any Rule 10b5-1 trading arrangements during the second quarter of 2025307 Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents