Variable Interest Entities

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES:

The Company determined CNXM, of which the Company owns an approximately 34% limited partner interest, to be a variable interest entity. As a result of the Midstream Acquisition (see Note 5 - Acquisitions and Dispositions), the Company has the power through the Company's ownership and control of CNXM's general partner (CNX Midstream GP LLC) to direct the activities that most significantly impact CNXM's economic performance. In addition, through its limited partner interest and incentive distribution rights, or IDRs, in CNXM, the Company has the obligation to absorb the losses of CNXM and the right to receive benefits in accordance with such interests. As the Company has a controlling financial interest and is the primary beneficiary of CNXM, the Company consolidated CNXM commencing January 3, 2018.

The risks associated with the operations of CNXM are discussed in its Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 7, 2019.

The following table presents amounts included in the Company's Consolidated Balance Sheets that were for the use or obligation of CNXM:



	June 30,		December 31,
	2019		2018
Assets:
Cash	$	11,677	3,966
Receivables - Related Party	19,028		17,073
Receivables - Third Party	6,681		7,028
Other Current Assets	1,648		2,383
Property, Plant and Equipment, net	1,076,977		891,775
Operating Lease ROU Asset	7,875		—
Other Assets	3,731		3,203
Total Assets	$	1,127,617	$	925,428
Liabilities:
Accounts Payable and Accrued Liabilities	$	96,295	$	43,919
Accounts Payable - Related Party	3,425		4,980
Revolving Credit Facility	208,000		84,000
Long-Term Debt	393,688		393,215
Long-Term Operating Lease Liabilities	1,171		—
Total Liabilities	$	702,579	$	526,114

The following table summarizes CNXM's Consolidated Statements of Operations and Cash Flows, inclusive of affiliate amounts:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2019			2018			2019			2018
Revenue
Gathering Revenue - Related Party	$	59,205		$	37,576		$	112,981		$	75,306
Gathering Revenue - Third Party	18,896			23,438			37,339			49,577
Total Revenue	78,101			61,014			150,320			124,883
Expenses
Operating Expense - Related Party	6,514			5,079			12,062			9,514
Operating Expense - Third Party	6,188			7,406			12,162			15,874
General and Administrative Expense - Related Party	4,027			3,620			7,994			7,232
General and Administrative Expense - Third Party	1,364			2,319			2,900			4,868
(Gain) Loss on Asset Sales and Abandonments	—			(254		)	7,229			2,501
Depreciation Expense	5,860			5,443			11,510			11,299
Interest Expense	7,685			7,119			15,024			9,608
Total Expense	31,638			30,732			68,881			60,896
Net Income	$	46,463		$	30,282		$	81,439		$	63,987

Net Cash Provided by Operating Activities	$	74,753		$	53,674		$	124,666		$	95,541
Net Cash Used in Investing Activities	$	(104,310	)	$	(24,969	)	$	(182,867	)	$	(35,125	)
Net Cash Provided by (Used in) Financing Activities	$	41,164		$	(29,964	)	$	65,912		$	(62,903	)

In March 2018, CNXM closed on its acquisition of CNX's remaining 95% interest in the gathering system and related assets commonly referred to as the Shirley-Penns System, in exchange for cash consideration in the amount of $265,000. CNXM funded the cash consideration with proceeds from the issuance of its 6.50% senior notes due 2026 (See Note 10 - Long-Term Debt).

At June 30, 2019 and December 31, 2018, CNX had a net payable of $15,584 and $12,202 respectively, due to CNX Gathering and CNXM, primarily for accrued but unpaid gathering services.