CNX Resources Corporation

Good morning and welcome to the CNX Resources Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Tyler Lewis, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning to everybody. Welcome to CNX's third quarter conference call. We have in the room today Nick Deulius, our President and CEO, Don Rush, our Chief Financial Officer, Chad Griffith, our Chief Operating Officer, and Yemi Akinkube, our Chief Excellence Officer. Today we will be discussing our third quarter results. This morning we posted an updated slide presentation to our website. Also, detailed third quarter earnings release data, such as quarterly E&P data, financial statements, and non-GAAP reconciliations are posted to our website in a document titled 3Q-2021 Earnings Results and Supplemental Information of CNX Resources. As a reminder, any forward-looking statements we make or comments about future expectations are subject to business risks, which we have laid out for you in our press release today, as well as on our previous Securities and Exchange Commission filings. We will begin our call today with prepared remarks by Nick, followed then by Don. We will then open the call for Q&A, where Chad and Yemi will participate as well. With that, let me turn the call over to you, Nick.

Thanks, Tyler. Good morning, everybody. Similar to the last quarter, we had another clean and easy to understand quarter overall. Slides two and three, I think, sum that up. They both are highlighting our theme, which has been steady execution that puts us in a position to manufacture our free cash flow. Whether it's safety or environmental compliance or overall field operations, all of these things are the areas we focus on. The sequence is a simple one. It's consistent methodical execution that results in significant free cash flow generation. And then the free cash flow allows for capital allocation opportunities where we're primarily focused on balance sheet strengthening and share count reduction. The net result of all that, that's intrinsic per share value growth. As we continue to trade at a material discount to our intrinsic per share value, as we see it, and with net debt declining and leverage improving, we steadily increased our attention on share account reduction. And Q3 was a good example of this. Approximately 60% of our free cash flow was returned to shareholders in the form of buybacks, and most importantly, it discounted prices. And as slide two highlights, we continue to see a significant opportunity to retire additional shares in what we believe to be currently attractive prices. And as a result, on October 25th, earlier this week, the board has increased our share repurchase authorization by $1 billion. Now, having a sizable share repurchase authorization at our disposal, that's normal course for CNX. That's part of our toolbox, so to speak, in terms of how we allocate capital. We recently extended our CNX and CNX ministry and credit facilities, also extended a bond maturity. These actions were opportunistic, and now they provide an even longer maturity runway for and more flexibility and capacity for future capital allocation moves. And we plan on making such moves as the facts and circumstances dictate the clinical rate of return math of capital allocation and free cash flow for share growth. Now, I suppose in many ways our approach might be a little bit different than what's in vogue today in our space. Our path is really pinned to optimizing intrinsic per share value by looking at the long term, by methodically executing, by de-risking, and obviously by astute capital allocation. We don't necessarily care about scale or size or things like industrial logic that hinges on what's trendy or the herd mentality. Instead, we're committing to the impactful math of good old-fashioned per share value creation. We want tangible actions that are going to be back in the words and the math, and we are going to embrace the most local-centric capital allocation you can find, which, of course, is acquiring and betting on yourself. Now, we use these words, tangible, impactful, and local, and I think you've seen those with our ESG effort. Those words, tangible, impactful, local, they're not just buzzwords, and they're not only applicable to ESG. They permeate everything we do on behalf of our owners, our employees, and the regions that we operate and live within. I don't know if you guys are fans of history, but there was a historian, Oswald Spengler, and his claim to fame was coming up with a theory that national survival requires keeping a nation internally fit and being ready for external events. If you take that approach or that view from that historian, we basically embrace that with how we built CNX. We built this company internally to not just survive but thrive as external events play out, whether it's macro or pricing or industry-centric. And those are going to be the facts and circumstances that drive that rate of return map of capital allocation. So for third quarter, the cliff notes, free cash flow and free cash flow per share were up. Net debt and leverage were improved. Share count was reduced at deep discount pricing, and we increased our 21 free cash flow guidance to $500 million, or $2.37 per share. We're going to keep clinically following the math when allocating free cash flow and rest assured that our actions are going to match our words, not just for the balance of what's left of 21 and not just for next year, but well beyond that. Pretty simple. I'm going to turn it over to Don now, who's going to go into a little more detail.