CNX Gas Reports Net Income of $35.5 Million
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PITTSBURGH, Oct. 22 /PRNewswire-FirstCall/ -- CNX Gas Corporation (NYSE: CXG) reported net income attributable to CNX Gas shareholders of $35.5 million, or $0.23 per diluted share, for the quarter ended September 30, 2009. This compares to $67.4 million, or $0.45 per diluted share, for the quarter ended September 30, 2008.
Production was 24.8 billion cubic feet (Bcf), or 269 million cubic feet (MMcf) per day, for the quarter ended September 30, 2009. This was another quarterly production record, and 26% higher than the 19.7 Bcf, or 214 MMcf per day, for the year-ago quarter. It was also 10% higher than the 22.5 Bcf produced in the quarter ended June 30, 2009.
"We are pleased to announce that CNX Gas set another quarterly production record, and did it safely," said J. Brett Harvey, chairman and chief executive officer. "With our increasing Virginia coalbed methane production and our Marcellus Shale success, we are again raising our 2009 production guidance. If you recall, our original 2009 production guidance was 85 Bcf. In July, we raised it to 89 Bcf. And now, we've raised it by another 3 Bcf, to 92 Bcf. If achieved, this would represent a 20% increase in production from the 76.6 Bcf we produced in 2008. While our quarterly earnings are lower because of weak spot gas prices, we've been successful in lowering unit costs.
"CNX Gas is growing production faster than most of the competition, is reporting better earnings than most of the competition, and is continuing to invest in its significant growth prospects, especially in coalbed methane and the Marcellus Shale. I believe that investors will increasingly recognize CNX Gas as a core holding for their energy portfolios."
TABLE 1
FINANCIAL AND OPERATIONAL RESULTS - Period-To-Period
Nine Months Nine Months
Quarter Ended Quarter Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
------------- ------------- ---------- ----------
Total Revenue
and Other
Income $165.7 $216.9 $505.6 $583.4
------------- ------ ------ ------ ------
Net Income
attributable
to CNX Gas
shareholders $35.5 $67.4 $123.4 $181.6
------------- ----- ----- ------ ------
Earnings per
Share -Diluted $0.23 $0.45 $0.82 $1.20
--------------- ----- ----- ----- -----
Net Cash from
Operating
Activities $65.4 $120.1 $279.5 $306.9
------------- ----- ------ ------ ------
EBITDA $90.4 $135.7 $284.4 $356.4
------------- ----- ------ ------ ------
EBIT $59.5 $117.9 $205.8 $306.1
------------- ----- ------ ------ ------
Total Period
Production
(Bcf) 24.8 19.7 69.3 54.3
------------- ---- ---- ---- ----
Average Daily
Production
(MMcf) 269 214 254 198
------------- --- --- --- ---
Capital
Expenditures $59.3 $170.4 $273.0 $406.2
------------- ----- ------ ------ -------
Financial results are in millions of dollars except per share amounts.
Production results are net of royalties.
Quarter-to-Quarter Analysis
The average price realized for the company's gas production was $6.25 per Mcf for the quarter ended September 30, 2009, or $3.48 lower than the $9.73 per Mcf received for the quarter ended September 30, 2008. The average realized price for the just-ended quarter included 13.2 Bcf hedged at $8.69 per Mcf.
All-in unit costs for company production, exclusive of royalties, were $3.44 per Mcf in the just-ended quarter, or a decrease of $0.41 from the $3.85 per Mcf for the quarter ended September 30, 2008.
Pre-tax unit margins for company production were $2.81 per Mcf in the September 30, 2009 quarter, a decrease of $3.07 from the $5.88 per Mcf in the quarter ended September 30, 2008.
TABLE 2
PRICE AND COST DATA PER NET MCF - Period-To-Period Comparison
Nine Months Nine Months
Quarter Ended Quarter Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
------------- ------------- ---------- ----------
Average Sales Price $6.25 $9.73 $6.75 $9.25
------------------- ----- ----- ----- -----
Costs - Production
------------------
Lifting $0.52 $0.77 $0.52 $0.64
------- ----- ----- ----- -----
Production Taxes $0.05 $0.29 $0.05 $0.28
---------------- ----- ----- ----- -----
DD&A $1.03 $0.68 $0.90 $0.67
---- ----- ----- ----- -----
Total Production
Costs $1.60 $1.74 $1.47 $1.59
---------------- ----- ----- ----- -----
Costs - Gathering
-----------------
Operating Costs $0.75 $1.05 $0.78 $0.96
--------------- ----- ----- ----- -----
Transportation $0.22 $0.15 $0.22 $0.13
-------------- ----- ----- ----- -----
DD&A $0.22 $0.23 $0.23 $0.26
---- ----- ----- ----- -----
Total Gathering Costs $1.19 $1.43 $1.23 $1.35
--------------------- ----- ----- ----- -----
Costs
Administration $0.65 $0.68 $0.73 $0.76
--------------- ----- ----- ----- -----
Total Costs $3.44 $3.85 $3.43 $3.70
----------- ----- ----- ----- -----
Margin $2.81 $5.88 $3.32 $5.55
------ ----- ----- ----- -----
Note: Costs Administration exclude incentive compensation and other
corporate items.
Unit lifting costs were lower, in part, because of fewer workovers conducted in the just-ended quarter. Water volumes from CBM production were down, as were water handling rates. Lower water volumes also contributed to lower road maintenance costs. Higher gas production volumes also helped to lower unit lifting costs.
Unit production taxes were much lower in the just-ended quarter because they are calculated on average realized price before the effect of hedging. Due to market conditions, these prices were significantly lower in the just-ended quarter.
Unit production DD&A was higher in the just-ended quarter as more plant assets in Northern Appalachia were placed into service.
Unit gathering operating costs were lower partly as the result of turn backs of rented compressors, as the pace of drilling slowed for low-pressure coalbed methane wells. Higher production volumes also helped to lower unit costs.
Unit firm transportation costs have increased due to acquiring additional capacity in the Northern Appalachian region in anticipation of greater production volumes.
In the just-ended quarter, CNX Gas had (pre-tax) dry hole expense of $4.9 million. Of this, $2.3 million was related to a non-operated dry hole targeting the Trenton Black River formation in Upstate New York. An additional $2.4 million was attributable to the surrender of a CBM lease in Virginia on the fringe of the company's core CBM position.
Also in the just-ended quarter, CNX Gas had (pre-tax) other corporate expenses of $7.2 million, versus $0.2 million in the year-earlier quarter. The expenses were higher because the September 2008 quarter showed a reversal of stock-based compensation due to a declining stock price. The performance share program was converted into the CONSOL Energy restricted stock program. The September 2009 quarter includes $2.7 million of allocated expense from CONSOL Energy related to stock-based compensation expense.
Safety
During the third quarter, CNX Gas employees worked another quarter without incurring a lost time accident. This raises the cumulative time worked by employees without a lost time incident to over 3.9 million hours.
Central Appalachia Operations
Total production in Central Appalachia, which includes Virginia CBM and Chattanooga Shale, was 18.7 Bcf in the quarter ended September 30, 2009. This was 2.2 Bcf higher than the 16.5 Bcf produced in the quarter ended September 30, 2008. The Central Appalachia September run rate was 207 MMcf per day.
CNX Gas drilled 45 vertical frac wells in its Virginia CBM Operations during the third quarter and 163 wells in the first nine months. CNX Gas expects to drill 175 wells in Virginia in 2009.
CNX Gas continues to be encouraged by its early Chattanooga Shale results. The company has been pursuing a delineation program across its position, which now stands at 268,000 mostly contiguous acres. One well, which came online on October 21, 2008, has produced over 140 MMcf, and is now producing at a daily rate of 861 Mcf, plus a few barrels of oil. A four-stage nitrogen foam frac was employed on this well. CNX Gas continues to acquire acreage in the Chattanooga Shale.
Northern Appalachia Operations
Total production in Northern Appalachia, which includes Mountaineer CBM, Nittany CBM, and Marcellus Shale, was 6.0 Bcf in the quarter ended September 30, 2009. This was 2.9 Bcf more, or almost double, the 3.1 Bcf produced in the quarter ended September 30, 2008. The Northern Appalachia September run rate was 66 MMcf per day.
Of this Northern Appalachian production, 1.5 Bcf was from the Marcellus Shale in the just-ended quarter, versus zero in the same quarter last year.
No coalbed methane wells were drilled in Northern Appalachia in the just-ended quarter.
In the Marcellus Shale, CNX Gas drilled, completed, and brought three more horizontal wells online, raising the total to eleven. The peak daily production from well CNX#2B was 3.0 MMcf and from well GH34CV was 2.5 MMcf. The latest well to come online, GH15CV, has not yet reached its peak.
The latest well drilled, NV20CV, is located in northern Greene County, Pa. It is the first horizontal Marcellus Shale well that CNX Gas has drilled outside of its original Greene Hill area, in central Greene County. It is also the first in a set of six wells to be drilled on a single pad. NV20CV is currently awaiting hydraulic fracturing.
The cost of the horizontal wells drilled during this quarter averaged less than $3.5 million per well.
The company continues to be excited about its success in the Marcellus Shale play and, as a result, has increased its capital for lease and land acquisition.
The following table summarizes results since the inception of the company's horizontal Marcellus Shale program. CNX Gas has a 100% working interest and a 100% net revenue interest in all of these wells.
TABLE 3
HORIZONTAL MARCELLUS SHALE PROGRAM STATISTICS
Peak Oct. 09 Cumulative
Daily Daily Production(MMcf)
Turn-in Peak Production Production Through
Well Name date date (MMcf) (MMcf) Oct. 09
--------- ------- ------ ---------- ---------- -------------
1. CNX#3 10/5/08 12/16/08 6.6 1.6 826
2. CNX#2 1/28/09 2/13/09 2.5 1.0 344
3. CNX#2A 2/13/09 3/4/09 2.0 1.0 326
4. GH10CV 4/6/09 4/9/09 5.5 0.9 402
5. GH10ACV 4/18/09 4/24/09 5.2 1.0 420
6. GH11CV 5/30/09 6/3/09 3.7 1.1 223
7. GH11ACV 5/30/09 6/3/09 3.2 1.4 259
8. GH10BCV 6/27/09 7/15/09 4.1 2.5 299
9. CNX#2B 8/09/09 8/14/09 3.0 1.5 121
10. GH34CV 9/02/09 9/15/09 2.5 2.1 75
11. GH15CV 9/18/09 10/08/09 Not Reached 2.3 43
-----------
Average Peak 3.8
------------ ---
Financial Update
The company continues to monitor and evaluate capital spending to ensure adequate liquidity and to preserve options for possible external investment. With regard to capital, CNX Gas intends to spend largely within its net cash from operating activities for the fourth quarter of 2009. Capital expenditures were $59.3 million during the third quarter.
The company ended the quarter with $73.1 million drawn on its $200 million credit facility. This is down $7.9 million from June 30, 2009. Cash on hand was $1.0 million.
CNX Gas also has outstanding letters of credit of $14.9 million. Total funds available are $113.0 million.
Return on capital employed for the quarter was 9.3%, on an after tax basis.
Guidance
The 2009 production guidance is raised by 3 Bcf to 92 Bcf. This guidance assumes no fourth quarter production curtailments due to above normal national storage levels or other factors. If the 92 Bcf is achieved, it means that CNX Gas will have produced 20% more than the 76.6 Bcf produced in 2008.
For 2010, CNX Gas is re-instating production guidance of 100 Bcf. The company expects to be able to achieve this production with one horizontal rig drilling in the Marcellus Shale, the continued drilling of CBM frac wells in Virginia, and some ancillary drilling. While 2010 plans are currently being formulated, the company views this as a realistic starting point.
CNX Gas locked in the pricing on more of its production for the 2009 fourth quarter during the just-ended quarter. Total hedged production in the 2009 fourth quarter is 15.25 Bcf, at an average price of $7.90 per Mcf. Some hedges were also added for 2011.
TABLE 4
GUIDANCE
2009 2010 2011 2012
---- ---- ---- ----
Total Yearly Production (Bcf) 92 100 NA NA
----------------------- -- --- -- --
Volumes Hedged (Bcf) 51.6 45.6 22.6 15.1
------------------- ---- ---- ---- ----
Average Hedge Price ($/Mcf) $8.76 $7.94 $6.84 $6.84
------------------- ----- ----- ----- -----
Outlook Summary
The United States economy may have bottomed in the third quarter. Due to the significant fiscal spending and relaxed monetary policy, a modest U.S. recovery appears likely in 2010. Depending on the pace and sustainability of the recovery, we believe tremendous opportunities exist for our natural gas business.
The U.S. natural gas market has shown signs of stability because the total rig count appears to have bottomed at approximately 700 rigs. The expectations of lower natural gas production, coupled with expectations of increased demand due to an improving economy and a return to normal weather patterns, has led to an improvement in pricing. With its low costs and rising production volumes, CNX Gas should benefit from improved pricing.
Conference Call Information
CNX Gas and CONSOL Energy will co-host a conference call today at 10:00 a.m. Eastern Daylight Time to discuss the company's third quarter results. The teleconference can be heard "live" at the investor relations portion of the company web site: www.cnxgas.com.
Description
CNX GAS CORPORATION is the leading gas producer in the Appalachian Basin, when measured by revenue, net income, and safety.
Contact:
Dan Zajdel
Vice President - Investor Relations
(724) 485-4169
danzajdel@cnxgas.com
www.cnxgas.com
Definition: EBIT is defined as earnings (excluding cumulative effect of accounting change) before deducting net interest expense (interest expense less interest income) and income taxes. EBITDA is defined as earnings (excluding cumulative effect of accounting change) before deducting net interest expense (interest expense less interest income), income taxes, and depreciation, depletion and amortization. Although EBIT and EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles, management believes that they are useful to an investor in evaluating CNX Gas because they are widely used to evaluate a company's operating performance before debt expense and its cash flow. EBIT and EBITDA do not purport to represent cash generated by operating activities and should not be considered in isolation or as a substitute for measures of performance in accordance with generally accepted accounting principles. In addition, because all companies do not calculate EBIT and EBITDA identically, the presentation here may not be comparable to similarly titled measures of other companies. Reconciliation of EBITDA and EBIT to the income statement is as follows:
CNX Gas
EBIT & EBITDA Reconciliation
(000) Omitted
Nine Nine
Quarter Quarter Months Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
-------- -------- -------- --------
Net Income
attributable to
CNX Gas
shareholders $35,470 $67,415 $123,351 $181,591
---------------- ------- ------- -------- --------
Add: Interest
Expense 1,865 2,412 5,753 5,567
--------------- ----- ----- ----- -----
Less: Interest
Income (24) 116 (60) 358
--------------- --- --- --- ---
Add: Income
Taxes 22,194 48,160 76,780 119,287
------------- ------ ------ ------ -------
Earnings Before
Interest
& Taxes (EBIT) 59,505 117,871 205,824 306,087
------ ------- ------- -------
Add:
Depreciation,
Depletion, &
Amortization 30,879 17,803 78,581 50,340
--------------- ------ ------ ------ ------
EBITDA $90,384 $135,674 $284,405 $356,427
------ ======= ======== ======== ========
CNX Gas
Capital Employed and Return on Capital Employed
(000) Omitted
Capital employed is a measure of net investment. When viewed from the
perspective of how the capital is used, it includes CNX Gas' property,
plant, and equipment and other assets less liabilities.
As of As of
Capital Employed Sept. 30, June 30,
---------------- 2009 2009
---- ----
Total assets $2,137,211 $2,182,563
------------ ---------- ----------
Less liabilities:
-----------------
Total current liabilities (other than
current portion of indebtedness) (125,938) (161,349)
------------ -------- --------
Total long-term liabilities (other than
indebtedness) (389,073) (381,456)
--------------------------------------- --------- ---------
Total Capital Employed $1,622,200 $1,639,758
---------------------- ========== ==========
Return on average capital employed (ROCE) is a performance measure ratio.
ROCE is defined as net income plus after-tax interest expense, divided by
average capital employed. Below is a calculation of ROCE for the September
2009 quarter. In order to annualize the result on a compounded basis, a
"1" is added to the quarterly ROCE, before it is raised to the fourth
power.
Quarter Ended
Return on Capital Employed Sept. 30,
-------------------------- 2009
----
Net Income $35,470
---------- -------
Financing costs (after-tax): (1,148)
---------------------------- -------
Earnings excluding financing costs $36,618
---------------------------------- -------
Average capital employed $1,630,979
------------------------ ----------
Return on average capital employed 2.2%
---------------------------------- ---
Return on average capital
employed-annualized 9.3%
------------------------- ---
Although ROCE is not a measure of performance calculated in accordance with generally accepted accounting principles, management believes that ROCE is a useful measure because it indicates the return on all capital, which includes equity and debt, employed in the business. Management believes that ROCE is an additional measure of efficiency when considered in conjunction with return on equity, which measures the return on only the shareholders' equity component of total capital employed.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Various statements in this document, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). The forward-looking statements may include projections and estimates concerning the timing and success of specific projects, our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "would," "will," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward-looking statements in this document speak only as of the date of this document; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, uncertainties and contingencies include, but are not limited to: our business strategy; our financial position, cash flow and liquidity; the deteriorating economic conditions in the United States and globally; declines in the prices we receive for our gas affecting our operating results and cash flow; uncertainties in estimating our gas reserves and replacing our gas reserves; uncertainties in exploring for and producing gas; our inability to obtain additional financing necessary in order to fund our operations, capital expenditures and to meet our other obligations; disruptions to, capacity constraints in or other limitations on the pipeline systems which deliver our gas; the cost of disposing of water from our coalbed methane and Marcellus Shale gas wells; the cost of removing impurities from the gas we produce; the availability of personnel and equipment, including our inability to retain and attract key personnel; increased costs; the effects of government regulation, permitting and other legal requirements; legal uncertainties regarding the ownership of the coalbed methane estate, and costs associated with perfecting title for gas rights in some of our properties; litigation concerning real property rights, intellectual property rights, royalty calculations and other matters; our relationships and arrangements with CONSOL Energy; and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue and Other
Income:
Outside Sales $153,959 $188,612 $465,727 $494,624
Related Party
Sales 825 2,587 2,260 8,035
Royalty Interest
Gas Sales 8,443 22,902 29,741 61,921
Purchased Gas Sales 1,471 1,674 4,102 6,860
Other Income 955 1,172 3,815 11,929
--- ----- ----- ------
Total Revenue
and Other Income 165,653 216,947 505,645 583,369
Costs and Expenses:
Lifting Costs 14,173 20,709 39,229 50,176
Gathering and
Compression Costs 23,948 23,642 69,135 59,034
Royalty Interest
Gas Costs 6,279 21,055 23,350 59,057
Purchased Gas Costs 1,103 1,664 3,023 6,607
Other 6,693 872 15,049 1,679
General and
Administrative 16,081 13,342 50,697 41,063
Other Corporate
Expenses 7,206 185 21,519 9,638
Depreciation,
Depletion and
Amortization 30,879 17,803 78,581 50,340
Interest Expense 1,865 2,412 5,753 5,567
----- ----- ----- -----
Total Costs and
Expenses 108,227 101,684 306,336 283,161
------- ------- ------- -------
Earnings Before
Income Taxes and
Noncontrolling
Interest 57,426 115,263 199,309 300,208
Noncontrolling Interest (238) (312) (822) (670)
---- ---- ---- ----
Earnings Before
Income Taxes 57,664 115,575 200,131 300,878
Income Taxes 22,194 48,160 76,780 119,287
------ ------ ------ -------
Net Income
Attributable to CNX
Gas Shareholders $35,470 $67,415 $123,351 $181,591
======= ======= ======== ========
Earnings Per Share:
Basic $0.23 $0.45 $0.82 $1.20
===== ===== ===== =====
Dilutive $0.23 $0.45 $0.82 $1.20
===== ===== ===== =====
Weighted Average
Number of
Common Shares
Outstanding:
Basic 150,977,117 150,939,418 150,974,479 150,956,753
=========== =========== =========== ===========
Dilutive 151,372,672 151,292,158 151,304,768 151,366,746
=========== =========== =========== ===========
CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
----------------------
(Unaudited)
September 30, December 31,
2009 2008
---- ----
ASSETS
------
Current Assets:
Cash and Cash Equivalents $968 $1,926
Accounts and Notes Receivable:
Trade 27,833 61,764
Other Receivables 852 3,080
Recoverable Income Taxes - 30,302
Derivatives 128,153 150,564
Other 1,966 2,222
----- -----
Total Current Assets 159,772 249,858
Property, Plant and Equipment:
Property, Plant and Equipment 2,351,804 2,111,383
Less - Accumulated Depreciation,
Depletion and Amortization 404,781 322,470
------- -------
Total Property, Plant and
Equipment - Net 1,947,023 1,788,913
Other Assets:
Investment in Affiliates 24,604 25,204
Derivatives - 55,945
Other 5,812 5,053
----- -----
Total Other Assets 30,416 86,202
---------- ----------
TOTAL ASSETS $2,137,211 $2,124,973
========== ==========
CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
----------------------
(Unaudited)
September 30, December 31,
2009 2008
---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts Payable $48,528 $100,565
Accrued Royalties 13,585 20,301
Accrued Severance Taxes 659 3,672
Related Parties 3,290 2,234
Short-Term Notes Payable 73,050 72,700
Deferred Income Taxes 46,207 55,000
Accrued Income Taxes 2,609 -
Current Portion of Long-Term Debt 8,540 8,462
Other Current Liabilities 11,060 18,116
------ ------
Total Current Liabilities 207,528 281,050
Long-Term Debt:
Long-Term Debt 11,240 15,386
Capital Lease Obligations 56,566 59,296
------ ------
Total Long-Term Debt 67,806 74,682
Deferred Credits and Other Liabilities:
Derivatives 1,123 -
Deferred Income Taxes 347,311 331,338
Gas Well Plugging 8,141 7,401
Postretirement Benefits Other Than Pensions 3,000 2,728
Other 29,498 42,900
------ ------
Total Deferred Credits and Other
Liabilities 389,073 384,367
Total Liabilities 664,407 740,099
Stockholders' Equity:
Common Stock, $.01 par value;
200,000,000 Shares Authorized, 150,981,596
Issued and Outstanding at September 30, 2009
and 150,971,636 Issued and Outstanding at
December 31, 2008 1,510 1,510
Capital in Excess of Par Value 805,736 789,625
Preferred Stock, 5,000,000 Shares
Authorized; None
Issued and Outstanding - -
Retained Earnings 592,306 468,955
Other Comprehensive Income 77,406 124,784
------ -------
Total CNX Gas Shareholders' Equity 1,476,958 1,384,874
Noncontrolling Interest (4,154) -
------ -
Total Equity 1,472,804 1,384,874
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $2,137,211 $2,124,973
========== ==========
CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Operating Activities:
Net Income Attributable to
CNX Gas Shareholders $35,470 $67,415 $123,351 $181,591
Adjustments to Reconcile
Net Income to Net Cash
Provided by Operating
Activities:
Depreciation, Depletion and
Amortization 30,879 17,803 78,581 50,340
Stock-based Compensation 796 881 5,638 2,535
(Gain) Loss on the Sale of Assets 12 - 85 -
Change in Noncontrolling
Interest (238) (1,312) (822) (1,670)
Deferred Income Taxes 14,345 5,920 38,785 59,908
Equity in Earnings of Affiliates (93) (236) (650) (352)
Changes in Operating Assets:
Accounts Receivable 6,164 13,230 36,159 (27,925)
Related Party Receivable (1,602) 2,013 1,056 192
Other Current Assets (574) (453) 256 537
Changes in Other Assets (1,572) (263) (950) 4,243
Changes in Operating Liabilities:
Accounts Payable (18,777) 14,774 (30,141) 12,823
Income Taxes (6,331) 2,443 32,482 6,006
Other Current Liabilities (242) 1,875 (16,785) 16,877
Changes in Other Liabilities 1,075 (4,490) (2,096) 1,580
Other 6,073 540 14,511 234
----- --- ------ ---
Net Cash Provided by
Operating Activities 65,385 120,140 279,460 306,919
Investing Activities:
Capital Expenditures (59,256) (170,374) (273,019) (370,180)
Acquisition of Knox Energy - - - (36,000)
Investment in
Equity Affiliates - - 1,250 1,081
Proceeds From Sale of Assets 30 - 275 450
-- -- --- ---
Net Cash Used in
Investing Activities (59,226) (170,374) (271,494) (404,649)
Financing Activities:
Capital Lease Payments (914) (698) (2,814) (2,058)
Variable Interest Entity Debt (1,721) (469) (4,104) 11,984
Proceeds from Short-Term
Borrowings (7,950) 31,200 350 58,200
Exercise of Stock Options 101 210 115 488
Noncontrolling Interest
Distribution (2,300) - (2,500) -
Tax Benefit from Stock-
Based Compensation 23 6 29 184
-- - -- ---
Net Cash (Used in) Provided
by Financing Activities (12,761) 30,249 (8,924) 68,798
------- ------ ------ ------
Net Decrease in Cash
and Cash Equivalents (6,602) (19,985) (958) (28,932)
Cash and Cash Equivalents
at Beginning of Period 7,570 23,101 1,926 32,048
----- ------ ----- ------
Cash and Cash
Equivalents at End of Period $968 $3,116 $968 $3,116
==== ====== ==== ======
CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(Dollars in Thousands - except per share data)
Accumulated
Other
Capital in Comprehensive
Common Excess of Retained Income
Stock Par Value Earnings (Loss)
----- --------- -------- ------
Balance -
December 31, 2008 $1,510 $789,625 $468,955 $124,784
------ -------- -------- --------
(Unaudited)
Net Income Attributable to CNX Gas
Shareholders - - 123,351 -
Gas Cash Flow Hedge
(net of $31,186 tax) - - - (47,363)
FAS 158 OPEB Adjustment
(Net of $10 tax) (15)
------ ------- ------- -------
Comprehensive Income (Loss) 123,351 (47,378)
Stock Options Exercised - 115 - -
Tax Benefit from Stock-Based
Compensation - 11 - -
Amortization of Restricted
Stock Unit Grants - 14,533 - -
Amortization of Stock
Option Grants - 1,452 - -
Noncontrolling Interest - - - -
Balance -
------ -------- -------- -------
September 30, 2009 $1,510 $805,736 $592,306 $77,406
====== ======== ======== =======
Total CNX
Gas Stock- Non-
holders' controlling Total
Equity Interest Equity
------ -------- ------
Balance -
December 31, 2008 $1,384,874 $- $1,384,874
---------- -- ----------
(Unaudited)
Net Income Attributable to CNX Gas
Shareholders 123,351 - 123,351
Gas Cash Flow Hedge
(net of $31,186 tax) (47,363) - (47,363)
FAS 158 OPEB Adjustment
(Net of $10 tax) (15) - (15)
--------- ------- --------
Comprehensive Income (Loss) 75,973 75,973
Stock Options Exercised 115 - 115
Tax Benefit from Stock-Based
Compensation 11 - 11
Amortization of Restricted
Stock Unit Grants 14,533 - 14,533
Amortization of Stock
Option Grants 1,452 - 1,452
Noncontrolling Interest - (4,154) (4,154)
Balance -
---------- ------- ----------
September 30, 2009 $1,476,958 $(4,154) $1,472,804
========== ======= ==========
SOURCE CNX Gas Corporation
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