DERIVATIVE INSTRUMENTS:

CONSOL Energy enters into financial derivative instruments to manage its exposure to commodity price volatility. CONSOL Energy de-designated all of its cash flow hedges on December 31, 2014 and accounts for all existing and future gas and NGL commodity hedges on a mark-to-market basis with changes in fair value recorded in current period earnings. In connection with this de-designation, CONSOL Energy froze the balances recorded in Accumulated Other Comprehensive Income at December 31, 2014 and reclassified balances to earnings as the underlying physical transactions occurred. As of December 31, 2016, all gains deferred in OCI have been recognized in earnings.

CONSOL Energy is exposed to credit risk in the event of non-performance by counterparties. The creditworthiness of counterparties is subject to continuing review. The Company has not experienced any issues of non-performance by derivative counterparties.

None of the Company's counterparty master agreements currently require CONSOL Energy to post collateral for any of its positions. However, as stated in the counterparty master agreements, if CONSOL Energy's obligations with one of its counterparties cease to be secured on the same basis as similar obligations with the other lenders under the credit facility, CONSOL Energy would have to post collateral for instruments in a liability position in excess of defined thresholds. All of the Company's derivative instruments are subject to master netting arrangements with our counterparties. CONSOL Energy recognizes all financial derivative instruments as either assets or liabilities at fair value on the Consolidated Balance Sheets on a gross basis.

Each of CONSOL Energy's counterparty master agreements allows, in the event of default, the ability to elect early termination of outstanding contracts. If early termination is elected, CONSOL Energy and the applicable counterparty would net settle all open hedge positions.

The total notional amounts of production of CONSOL Energy's derivative instruments at December 31, 2016 and December 31, 2015 were as follows:



	December 31,		Forecasted to
	2016	2015	Settle Through
Natural Gas Commodity Swaps (Bcf)	744.7	456.1	2021
Natural Gas Basis Swaps (Bcf)	482.0	124.4	2020
Propane Commodity Swaps (Mbbls)	126.0	—	2017

The gross fair value of CONSOL Energy's derivative instruments at December 31, 2016 and December 31, 2015 were as follows:



Asset Derivative Instruments					Liability Derivative Instruments
	December 31,					December 31,
	2016		2015			2016		2015
Commodity Swaps:
Prepaid Expense	$	16	$	234,409	Other Accrued Liabilities	$	209,980	$	—
Other Assets	29,596		44,539		Other Liabilities	67,139		5,137
Total Asset	$	29,612	$	278,948	Total Liability	$	277,119	$	5,137

Basis Only Swaps:
Prepaid Expense	$	56,916	$	5,429	Other Accrued Liabilities	$	21,593	$	12,206
Other Assets	35,603		1,093		Other Liabilities	11,575		1,569
Total Asset	$	92,519	$	6,522	Total Liability	$	33,168	$	13,775

The effect of derivative instruments on CONSOL Energy's Consolidated Statements of Income was as follows:



	Year Ended December 31,
	2016			2015			2014
Cash Received (Paid) in Settlement of Commodity Derivative Instruments:
Commodity Swaps:
Natural Gas	$	225,797		$	193,976		$	19,025
Propane	(650		)	—			—
Natural Gas Basis Swaps	20,065			2,372			—
Total Cash Received in Settlement of Commodity Derivative Instruments	245,212			196,348			19,025

Unrealized (Loss) Gain on Commodity Derivative Instruments:
Commodity Swaps:
Natural Gas	(520,170		)	81,142			—
Propane	(1,148		)	—			—
Natural Gas Basis Swaps	66,604			(7,653		)	—
Reclassified from Accumulated OCI	68,481			123,105			—
Gain Recognized for Ineffectiveness*	—			—			4,168
Total Unrealized (Loss) Gain on Commodity Derivative Instruments	(386,233		)	196,594			4,168

(Loss) Gain on Commodity Derivative Instruments:
Commodity Swaps:
Natural Gas	$	(294,373	)	$	275,118		$	19,025
Propane	(1,798		)	—			—
Natural Gas Basis Swaps	86,669			(5,281		)	—
Reclassified from Accumulated OCI	68,481			123,105			—
Gain Recognized for Ineffectiveness*	—			—			4,168
Total (Loss) Gain on Commodity Derivative Instruments	$	(141,021	)	$	392,942		$	23,193

* No amounts were excluded from effectiveness testing of cash flow hedges.

Changes in Accumulated OCI, net of tax, attributable to cash flow hedges that were de-designated December 31, 2014 were as follows:



	Year Ended December 31,
	2016			2015			2014
Beginning Balance – Accumulated OCI	$	43,470		$	121,521		$	42,493
Gain Recognized in Accumulated OCI	—			—			97,316
Gain Reclassified from Accumulated OCI (Net of tax: $25,011, $45,054, $10,465)	(43,470		)	(78,051		)	(18,288		)
Ending Balance – Accumulated OCI	$	—		$	43,470		$	121,521