PITTSBURGH, Jan. 28 /PRNewswire-FirstCall/ -- CNX Gas Corporation
(NYSE: CXG), a leading Appalachian producer, reported net income
attributable to CNX Gas shareholders of $41.1 million, or $0.27 per
diluted share, for the quarter ended December 31, 2009. This
compares to $57.5 million, or $0.38 per diluted share, for the
quarter ended December 31, 2008. Annual 2009 net income
attributable to CNX Gas shareholders was $164.5 million, or $1.09
per share, compared to $239.1 million, or $1.58 per share, in 2008.
Production was 25.1 billion cubic feet (Bcf), or 273 million cubic
feet (MMcf) per day, for the quarter ended December 31, 2009. This
was the third consecutive quarterly production record, and 13%
higher than the 22.2 Bcf, or 242 MMcf per day, for the year-ago
quarter. Annual 2009 production was 94.4 Bcf, an increase of 23%
over the 76.6 Bcf produced in 2008. "CNX Gas ended 2009 on a very
strong footing. Once again, we set another quarterly production
record, and our employees continued working safely, having passed
the 4-million hour mark without incurring a lost-time incident,"
said J. Brett Harvey, chairman and chief executive officer. "With
our increasing Virginia coalbed methane production and our
continued Marcellus Shale success, we expect 2010 production of 100
Bcf. To support this goal, we have contracted for a second
horizontal rig to begin drilling in the Marcellus Shale on March 1.
"CNX Gas increased production by 23% in 2009 while paying down
about $15 million of debt. And as we reported earlier this week, we
also increased our proved reserves in 2009 by one-half trillion
cubic feet (Tcf), or 34%, to 1.9 Tcf. When viewed together with our
2009 return on capital employed of 10.6% on an after-tax basis,
there is no doubt that CNX Gas is a premier company in the E&P
industry." TABLE 1 FINANCIAL AND OPERATIONAL RESULTS -
Period-To-Period Twelve Months Twelve Months Quarter Quarter Ended
Ended ------- ------- ------------- ------------- Ended Ended Dec.
31, 2009 Dec. 31, 2008 ----- ----- ------------- ------------- Dec.
31, 2009 Dec. 31, 2008 ------------- ------------- Total Revenue
$177.8 $206.1 $683.4 $789.4 and Other Income ------ ------ ------
------ --------- Net Income attributable $41.1 $57.5 $164.5 $239.1
to CNX Gas shareholders ----- ----- ------ ------ -------------
Earnings per Share - Diluted $0.27 $0.38 $1.09 $1.58 ------------
----- ----- ----- ----- Net Cash from Operating Activities $80.7
$140.5 $360.2 $447.4 ------------- ----- ------ ------ ------
EBITDA $93.4 $113.7 $377.9 $470.2 ------ ----- ------ ------ ------
EBIT $64.8 $94.1 $270.6 $400.1 ---- ----- ----- ------ ------ Total
Period Production (Bcf) 25.1 22.2 94.4 76.6 ------------ ---- ----
---- ---- Average Daily Production (MMcf) 273 242 259 209
------------- --- --- --- --- Capital Expenditures $63.4 $154.5
$336.4 $560.7 ------------- ----- ------ ------ ------ 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 $6.47 per Mcf for the quarter ended December 31,
2009, or $1.88 lower than the $8.35 per Mcf received for the
quarter ended December 31, 2008. The average realized price for the
just-ended quarter included 15.3 Bcf hedged at $7.90 per Mcf.
All-in unit costs for company production, exclusive of royalties,
were $3.47 per Mcf in the just-ended quarter, or a decrease of
$0.13 from the $3.60 per Mcf for the quarter ended December 31,
2008. Pre-tax unit margins for company production were $3.00 per
Mcf in the just-ended quarter, a decrease of $1.75 from the $4.75
per Mcf in the quarter ended December 31, 2008. TABLE 2 PRICE AND
COST DATA PER NET MCF - Period-To-Period Comparison Twelve Months
Twelve Months Quarter Quarter Ended Ended ------- -------
------------- ------------- Ended Ended Dec. 31, 2009 Dec. 31, 2008
----- ----- ------------- ------------- Dec. 31, 2009 Dec. 31, 2008
--------- ------------- Average Sales Price $6.47 $8.35 $6.68 $8.99
------------------- ----- ----- ----- ----- Costs - Production
------------------ Lifting $0.54 $0.60 $0.52 $0.63 ------- -----
----- ----- ----- Production Taxes $0.10 $0.19 $0.06 $0.26
---------------- ----- ----- ----- ----- DD&A $0.92 $0.67 $0.91
$0.66 ---- ----- ----- ----- ----- Total Production Costs $1.56
$1.46 $1.49 $1.55 ---------------- ----- ----- ----- ----- Costs -
Gathering ----------------- Operating Costs $0.81 $0.92 $0.78 $0.94
--------------- ----- ----- ----- ----- Transportation $0.25 $0.19
$0.23 $0.15 -------------- ----- ----- ----- ----- DD&A $0.22
$0.21 $0.23 $0.25 ---- ----- ----- ----- ----- Total Gathering
Costs $1.28 $1.32 $1.24 $1.34 --------------------- ----- -----
----- ----- Costs - Administration $0.63 $0.82 $0.71 $0.77
--------------- ----- ----- ----- ----- Total Costs $3.47 $3.60
$3.44 $3.66 ----------- ----- ----- ----- ----- Margin $3.00 $4.75
$3.24 $5.33 ------ ----- ----- ----- ----- Note: Costs -
Administration exclude incentive compensation and other corporate
items. Unit lifting costs were lower in the just-ended quarter, in
part, because of fewer workovers conducted. Water volumes from CBM
production were down, as were water handling rates due to reduced
drilling. 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 taxes were also lower because of a revised
estimate of a pending litigation settlement. Unit production
DD&A was higher in the just-ended quarter as more plant assets
in Northern Appalachia were placed into service. Higher production
volumes helped to lower unit gathering operating costs. Unit firm
transportation costs have increased due to acquiring additional
capacity in the Northern Appalachian region in anticipation of
greater production volumes. Safety During the fourth quarter, CNX
Gas employees crossed the 4-million hour mark without incurring a
lost time accident. As of December 31, the cumulative time worked
by employees without a lost time incident was nearly 4.1 million
hours. Central Appalachia Operations Total production in Central
Appalachia, which includes Virginia CBM and Chattanooga Shale, was
19.2 Bcf in the quarter ended December 31, 2009. This was 1.2 Bcf
higher than the 18.0 Bcf produced in the quarter ended December 31,
2008. The Central Appalachia December run rate was 199 MMcf per
day. CNX Gas drilled 201 vertical frac wells in its Virginia CBM
Operations during the year, exceeding the goal of 175. CNX Gas
expects to drill 175 wells in Virginia in 2010 with a drilling
budget of $50 million. For 2010, CNX Gas expects to drill 25
Chattanooga Shale wells for about $28 million, and five Huron Shale
wells for about $12 million. Northern Appalachia Operations Total
production in Northern Appalachia, which includes Mountaineer CBM,
Nittany CBM, and Marcellus Shale, was 5.9 Bcf in the quarter ended
December 31, 2009. This was 1.7 Bcf more than the 4.2 Bcf produced
in the quarter ended December 31, 2008. The Northern Appalachia
December run rate was 63 MMcf per day. Of this Northern Appalachian
production, 1.5 Bcf was from the Marcellus Shale in the just-ended
quarter, versus less than 0.1 Bcf in the same quarter last year. No
coalbed methane wells were drilled in Northern Appalachia in the
just-ended quarter. For 2010, CNX Gas expects to drill 5 horizontal
CBM wells in Mountaineer and some ancillary wells for about $17
million. In the Marcellus Shale, CNX Gas drilled, completed, and
brought online one vertical well and two horizontal wells. The
first of the two horizontal wells, GH 11C CV, has shown a 30-day
daily production rate of 1.6 MMcf. This well has only 1,600 lateral
feet, due to acreage constraints. The second horizontal well, GH
11B CV, is currently producing from only the first two frac stages
at a 30-day production rate of 0.8 MMcf. This 1,800-ft lateral well
is expected to see more normal levels of production when the
remaining 3 stages are fraced. For the entire horizontal Marcellus
Shale program to date, 13 horizontal wells have been drilled. The
reserves associated with the first 11 wells total 35.6 Bcf, or
about 3.3 Bcf per well. The laterals on these wells averaged less
than 2,000 feet. Upcoming drilling in the Marcellus Shale is
expected to be predominantly horizontal and on multiple-well pads,
with laterals closer to 3,000 feet. For 2010, the company expects
to drill approximately two dozen horizontal wells, with a drilling
budget of about $110 million. CNX Gas successfully increased its
acreage with Marcellus Shale potential by 20,000 in the quarter, to
a year-end total of 250,000. Of this, approximately 170,000 acres
is considered to be Tier 1. The company remains committed to
expanding its footprint to 400,000 acres. 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
2010. Capital expenditures are targeted for $400 million, with $221
for drilling, $121 million for midstream, and the remainder for
land. The company ended the quarter with $57.8 million drawn on its
$200 million credit facility. The amount drawn is down $15.2
million from September 30, 2009. Cash on hand was $1.1 million. CNX
Gas also has outstanding letters of credit of $14.9 million. Total
funds available are $128.4 million. Return on capital employed for
the year was 10.6%, on an after tax basis, compared to 18.5% in
2008. Guidance The 2010 production guidance remains at 100 Bcf. CNX
Gas expects to be able to achieve this production by adding a
second horizontal rig drilling in the Marcellus Shale on March 1,
the continued drilling of CBM frac wells in Virginia, and some
ancillary drilling. While 2010 plans could be refined later in the
year, the company views this as a realistic starting point. Total
hedged production in the 2010 first quarter is 13.0 Bcf, at an
average price of $8.76 per Mcf. TABLE 3 GUIDANCE Actual 2009 2010
2011 2012 ----------- ---- ---- ---- Total Yearly Production (Bcf)
94.4 100 NA NA ----------------------- ---- --- --- --- Volumes
Hedged (Bcf) 51.6 47.5 22.6 15.1 -------------------- ---- ----
---- ---- Average Hedge Price ($/Mcf) $8.76 $7.88 $6.84 $6.84
------------------- ----- ----- ----- ----- Economic Outlook The
U.S. economy began growing in the third quarter of 2009, at an
annual rate of 2.2% and continued growing in the fourth quarter.
Due to the significant fiscal spending and relaxed monetary policy
in the United States, a modest recovery appears likely to continue
in the U.S. through 2010. This should lead to an increase in demand
for energy products from industrial customers, power generators and
steel producers. Depending on the pace and sustainability of the
recovery, we believe substantial opportunities exist for our gas
business. Natural Gas Outlook At the onset of the winter heating
season, natural gas in storage fields was at record high levels.
Because of much colder than normal weather in much of the U.S. from
mid-December through mid-January, gas in storage has been drawn
down to normal levels. The economic recovery is expected to
positively affect industrial and commercial demand. Gas prices have
now strengthened to the point where it makes sense for CNX Gas to
add a second horizontal rig to its Marcellus Shale drilling program
for 2010. CNX Gas, with its low costs and rising production
volumes, is expected to benefit from this improved pricing.
Conference Call Information CNX Gas and CONSOL Energy will co-host
a conference call today at 10:00 a.m. Eastern Standard Time to
discuss the company's fourth quarter results. The teleconference
can be heard "live" at the investor relations portion of the
company web site: http://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 Twelve Twelve Months
Months Quarter Quarter Ended Ended Dec. Dec. 31, 31, -------
------- 2009 2008 Ended Ended ---- ---- ----- ----- Dec. Dec. 31,
31, 2009 2008 ----- ----- Net Income attributable to $41,111
$57,482 $164,462 $239,073 CNX Gas shareholders ------- -------
-------- -------- ------------- Add: Interest Expense 1,815 2,253
7,568 7,820 --------- ----- ----- ----- ----- Less: Interest Income
(4) (42) (64) (400) --------- --- --- --- ---- Add: Income Taxes
21,856 34,369 98,636 153,656 ------------- ------ ------ ------
------- Earnings Before Interest 64,778 94,062 270,602 400,149
--------- ------ ------ ------- ------- & Taxes (EBIT)
-------------- Add: Depreciation, Depletion, 28,670 19,670 107,251
70,010 & Amortization ------ ------ ------- ------
-------------- EBITDA $93,448 $113,732 $377,853 $470,159 ------
======= ======== ======== ======== 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 December 31, December 31, ----------------
------------ ------------ 2009 2008 ---- --- Total assets
$2,171,382 $2,124,973 ------------ ---------- ---------- Less
liabilities: ----------------- Total current liabilities (other
than current portion of indebtedness)
------------------------------------- (150,778) (199,888) --------
-------- Total long-term liabilities (other than indebtedness)
(381,548) (384,367) ---------------------------------------
-------- -------- Total Capital Employed $1,639,056 $1,540,718
---------------------- ========== ========== 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
year 2009. Year Ended ---------- Return on Capital Employed
December 31, -------------------------- ------------ 2009 ---- Net
Income $164,462 ---------- -------- Financing costs (after-tax):
(4,731) ---------------------------- ------ Earnings excluding
financing costs $169,193 ----------------------------------
-------- Average capital employed $1,589,887
------------------------ ---------- Return on average capital
employed 10.6% ---------------------------------- ---- 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.
Investor Contact: Dan Zajdel at (724) 485-4169 Media Contact: Joe
Cerenzia at (724) 485-4062 CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in
thousands, except per share data) For the Three Months Ended
December 31, ------------ 2009 2008 ---- ---- Revenue and Other
Income: Outside Sales $161,692 $184,169 Related Party Sales 919
1,497 Royalty Interest Gas Sales 11,210 17,381 Purchased Gas Sales
2,938 1,604 Other Income 1,040 1,401 ----- ----- Total Revenue and
Other Income 177,799 206,052 Costs and Expenses: Lifting Costs
16,056 17,477 Gathering and Compression Costs 26,552 24,718 Royalty
Interest Gas Costs 9,073 14,984 Purchased Gas Costs 3,419 1,568
Exploration and Other Costs 2,152 3,986 General and Administrative
15,958 18,181 Other Corporate Expenses 11,352 11,364 Depreciation,
Depletion and Amortization 28,670 19,670 Interest Expense 1,815
2,253 ----- ----- Total Costs and Expenses 115,047 114,201 -------
------- Earnings Before Income Taxes and Noncontrolling Interest
62,752 91,851 Noncontrolling Interest (215) ---- Earnings Before
Income Taxes 62,967 91,851 Income Taxes 21,856 34,369 ------ ------
Net Income Attributable to CNX Gas Shareholders $41,111 $57,482
======= ======= Earnings Per Share: Basic $0.27 $0.38 ===== =====
Dilutive $0.27 $0.38 ===== ===== Weighted Average Number of Common
Shares Outstanding: Basic 150,985,412 150,971,636 ===========
=========== Dilutive 151,397,310 151,240,785 ===========
=========== For the Twelve Months Ended December 31, ------------
2009 2008 ---- ---- Revenue and Other Income: Outside Sales
$627,419 $678,793 Related Party Sales 3,179 9,532 Royalty Interest
Gas Sales 40,951 79,302 Purchased Gas Sales 7,040 8,464 Other
Income 4,855 13,330 ----- ------ Total Revenue and Other Income
683,444 789,421 Costs and Expenses: Lifting Costs 55,285 67,653
Gathering and Compression Costs 95,687 83,752 Royalty Interest Gas
Costs 32,423 74,041 Purchased Gas Costs 6,442 8,175 Exploration and
Other Costs 17,201 4,995 General and Administrative 66,655 59,244
Other Corporate Expenses 32,871 21,002 Depreciation, Depletion and
Amortization 107,251 70,010 Interest Expense 7,568 7,820 -----
----- Total Costs and Expenses 421,383 396,692 ------- -------
Earnings Before Income Taxes and Noncontrolling Interest 262,061
392,729 Noncontrolling Interest (1,037) ------ Earnings Before
Income Taxes 263,098 392,729 Income Taxes 98,636 153,656 ------
------- Net Income Attributable to CNX Gas Shareholders $164,462
$239,073 ======== ======== Earnings Per Share: Basic $1.09 $1.58
===== ===== Dilutive $1.09 $1.58 ===== ===== Weighted Average
Number of Common Shares Outstanding: Basic 150,977,235 150,947,516
=========== =========== Dilutive 151,325,146 151,331,953
=========== =========== CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
December December 31, 31, 2009 2008 ---- ---- ASSETS ------ Current
Assets: Cash and Cash Equivalents $1,124 $1,926 Accounts and Notes
Receivable: Trade 43,421 61,764 Other Receivables 975 3,080
Recoverable Income Taxes - 30,302 Derivatives 99,265 150,564 Other
3,829 2,222 ----- ----- Total Current Assets 148,614 249,858
Property, Plant and Equipment: Property, Plant and Equipment
2,409,751 2,113,570 Less -Accumulated Depreciation, Depletion and
Amortization 433,201 322,470 ------- ------- Total Property, Plant
and Equipment -Net 1,976,550 1,791,100 Other Assets: Investment in
Affiliates 24,591 25,204 Derivatives 18,218 55,945 Other 3,409
2,866 ----- ----- Total Other Assets 46,218 84,015 TOTAL ASSETS
$2,171,382 $2,124,973 ========== ========== CNX GAS CORPORATION AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in
thousands) December December 31, 31, 2009 2008 ---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------ Current Liabilities: Accounts
Payable $53,516 $100,565 Accrued Royalties 14,898 20,301 Accrued
Severance Taxes 1,037 3,672 Related Parties 5,171 2,234 Short-Term
Notes Payable 57,850 72,700 Deferred Income Taxes 34,871 55,000
Accrued Income Taxes 31,765 - Current Portion of Long-Term Debt
8,616 8,462 Other Current Liabilities 9,520 18,116 ----- ------
Total Current Liabilities 217,244 281,050 Long-Term Debt: Long-Term
Debt 10,062 15,386 Capital Lease Obligations 55,628 59,296 ------
------ Total Long-Term Debt 65,690 74,682 Deferred Credits and
Other Liabilities: Deferred Income Taxes 334,493 331,338 Gas Well
Plugging 8,312 7,401 Postretirement Benefits Other Than Pensions
3,642 2,728 Other 35,101 42,900 ------ ------ Total Deferred
Credits and Other Liabilities 381,548 384,367 Total Liabilities
664,482 740,099 Stockholders' Equity: Common Stock, $.01 par value;
200,000,000 Shares Authorized, 150,986,918 Issued and Outstanding
at December 31, 2009 and 150,971,636 Issued and Outstanding at
December 31, 2008 1,510 1,510 Capital in Excess of Par Value
806,527 789,625 Preferred Stock, 5,000,000 Shares Authorized; None
Issued and Outstanding - - Retained Earnings 633,417 468,955 Other
Comprehensive Income 69,816 124,784 ------ ------- Total CNX Gas
Shareholders' Equity 1,511,270 1,384,874 Noncontrolling Interest
(4,370) - ------ --- Total Equity 1,506,900 1,384,874 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $2,171,382 $2,124,973
========== ========== CNX GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in
thousands) For the Three Months Ended December 31, ------------
2009 2008 ---- ---- Operating Activities: Net Income Attributable
to CNX Gas Shareholders $41,111 $57,482 Adjustments to Reconcile
Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization 28,670 19,670 Stock-based
Compensation 673 843 (Gain) Loss on the Sale of Assets (13) -
Change in Noncontrolling Interest (215) - Deferred Income Taxes
(6,889) 57,962 Equity in Earnings of Affiliates 13 (199) Changes in
Operating Assets: Accounts Receivable (15,711) 6,136 Related Party
Receivable 1,881 3,064 Other Current Assets (1,863) (346) Changes
in Other Assets 445 (382) Changes in Operating Liabilities:
Accounts Payable 8,296 20,708 Income Taxes 20,090 (34,521) Other
Current Liabilities 1,171 (209) Changes in Other Liabilities 727
9,031 Other 2,317 1,217 ----- ----- Net Cash Provided by Operating
Activities 80,703 140,456 Investing Activities: Capital
Expenditures (63,428) (154,483) Acquisition of Knox Energy - -
Investment in Equity Affiliates - - Proceeds From Sale of Assets 13
- --- --- Net Cash Used in Investing Activities (63,415) (154,483)
Financing Activities: Capital Lease Payments (936) (711) Variable
Interest Entity Debt (1,114) (952) (Payment on) Proceeds from
Short- Term Borrowings (15,200) 14,500 Exercise of Stock Options 85
(196) Noncontrolling Interest Distribution - - Tax Benefit from
Stock-Based Compensation 33 196 --- --- Net Cash (Used in) Provided
by Financing Activities (17,132) 12,837 ------- ------ Net Decrease
in Cash and Cash Equivalents 156 (1,190) Cash and Cash Equivalents
at Beginning of Period 968 3,116 --- ----- Cash and Cash
Equivalents at End of Period $1,124 $1,926 ====== ====== For the
Twelve Months Ended December 31, ------------ 2009 2008 ---- ----
Operating Activities: Net Income Attributable to CNX Gas
Shareholders $164,462 $239,073 Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities: Depreciation,
Depletion and Amortization 107,251 70,010 Stock-based Compensation
6,311 3,378 (Gain) Loss on the Sale of Assets 72 - Change in
Noncontrolling Interest (1,037) - Deferred Income Taxes 31,896
117,870 Equity in Earnings of Affiliates (637) (551) Changes in
Operating Assets: Accounts Receivable 20,448 (21,789) Related Party
Receivable 2,937 3,256 Other Current Assets (1,607) 191 Changes in
Other Assets (505) 3,861 Changes in Operating Liabilities: Accounts
Payable (21,845) 33,531 Income Taxes 52,572 (28,515) Other Current
Liabilities (15,614) 16,668 Changes in Other Liabilities (1,369)
10,611 Other 16,828 (219) ------ ---- Net Cash Provided by
Operating Activities 360,163 447,375 Investing Activities: Capital
Expenditures (336,447) (524,663) Acquisition of Knox Energy -
(36,000) Investment in Equity Affiliates 1,250 1,081 Proceeds From
Sale of Assets 288 450 --- --- Net Cash Used in Investing
Activities (334,909) (559,132) Financing Activities: Capital Lease
Payments (3,750) (2,769) Variable Interest Entity Debt (5,218)
11,032 (Payment on) Proceeds from Short- Term Borrowings (14,850)
72,700 Exercise of Stock Options 200 292 Noncontrolling Interest
Distribution (2,500) - Tax Benefit from Stock-Based Compensation 62
380 --- --- Net Cash (Used in) Provided by Financing Activities
(26,056) 81,635 ------- ------ Net Decrease in Cash and Cash
Equivalents (802) (30,122) Cash and Cash Equivalents at Beginning
of Period 1,926 32,048 ----- ------ Cash and Cash Equivalents at
End of Period $1,124 $1,926 ====== ====== CNX GAS CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited) (Dollars in Thousands - except per share data)
Accumulated Other Compre- Capital in hensive Excess Common of
Retained Income Par Stock Value Earnings (Loss) ----- ------
-------- ------ Balance - December 31, 2008 $1,510 $789,625
$468,955 $124,784 ------ -------- -------- -------- (Unaudited) Net
Income Attributable to CNX Gas Shareholders - - 164,462 - Gas Cash
Flow Hedge (net of $34,932 tax) - - - (53,132) Actuarially
Determined Liabilities Adjustment (Net of $1,185 tax) - - - (1,836)
--- --- --- ------ Comprehensive Income (Loss) - - 164,462 (54,968)
Stock Options Exercised - 200 - - Tax Benefit from Stock-Based
Compensation - 44 - - Amortization of Restricted Stock Unit Grants
- 15,119 - - Amortization of Stock Option Grants - 1,539 - -
Noncontrolling Interest - - - - Balance - December 31, 2009 $1,510
$806,527 $633,417 $69,816 ====== ======== ======== ======= 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 164,462 - 164,462 Gas
Cash Flow Hedge (net of $34,932 tax) (53,132) - (53,132)
Actuarially Determined Liabilities Adjustment (Net of $1,185 tax)
(1,836) - (1,836) ------ --- ------ Comprehensive Income (Loss)
109,494 109,494 Stock Options Exercised 200 - 200 Tax Benefit from
Stock-Based Compensation 44 - 44 Amortization of Restricted Stock
Unit Grants 15,119 - 15,119 Amortization of Stock Option Grants
1,539 - 1,539 Noncontrolling Interest - (4,370) (4,370) Balance -
December 31, 2009 $1,511,270 $(4,370) $1,506,900 ========== =======
========== DATASOURCE: CNX Gas Corporation CONTACT: Investors, Dan
Zajdel, +1-724-485-4169, or Media, Joe Cerenzia, +1-724-485-4062,
both of CNX Gas Corporation Web Site: http://www.cnxgas.com/
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