VARIABLE INTEREST ENTITIES:

The Company determined CNXM, of which the company owns an approximately 34% limited partner interest, to be a variable interest entity. Upon completion of the Midstream Acquisition (see Note 6 - 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 consolidates 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, 2017 filed with the SEC on February 7, 2018.

The following table presents amounts included in the Company's Consolidated Balance Sheet that were for the use or obligation of CNXM as of September 30, 2018:



	September 30, 2018
Assets:
Cash	$	950
Receivables - Related Party	15,053
Receivables - Third Party	7,185
Other Current Assets	2,623
Property, Plant and Equipment, net	848,836
Other Assets	3,404
Total Assets	$	878,051
Liabilities:
Accounts Payable	$	53,391
Accounts Payable - Related Party	4,427
Revolving Credit Facility	44,000
Long-Term Debt	392,978
Total Liabilities	$	494,796

The following table summarizes CNXM's Consolidated Statements of Operations and Cash Flows for the three and nine months ended September 30, 2018, inclusive of affiliate amounts:



	For the Three Months Ended			For the Nine Months Ended
	September 30, 2018			September 30, 2018
Revenue
Gathering Revenue - Related Party	$	41,022		$	116,328
Gathering Revenue - Third Party	19,946			69,523
Total Revenue	60,968			185,851
Expenses
Operating Expense - Related Party	5,131			14,645
Operating Expense - Third Party	4,870			20,744
General and Administrative Expense - Related Party	3,060			10,292
General and Administrative Expense - Third Party	1,771			6,639
Loss on Asset Sales	—			2,501
Depreciation Expense	5,306			16,605
Interest Expense	7,255			16,863
Total Expense	27,393			88,289
Net Income	$	33,575		$	97,562

Net Cash Provided by Operating Activities	$	35,666		$	131,207
Net Cash Used in Investing Activities	$	(44,241	)	$	(79,366	)
Net Cash Provided by (Used in) Financing Activities	$	8,818		$	(54,085	)

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 6.5% senior notes due 2026 (See Note 11 - Long-Term Debt).

Prior to the acquisition of Noble's interest on January 3, 2018, CNX accounted for its interests in CNX Gathering and CNXM as an equity-method investment.

The following is a summary of the Company's Investment in Affiliates balances included within the Consolidated Balance Sheets associated with CNX Gathering and CNXM, respectively:



	CNX Gathering			CNXM			Total
Balance at December 31, 2016	$	151,075		$	18,133		$	169,208
Equity in Earnings	9,823			38,523			48,346
Distributions	(17,254		)	(24,929		)	(42,183		)
Asset Transfer	(2,527		)	2,527			—
Balance at December 31, 2017	$	141,117		$	34,254		$	175,371

The following transactions were included in Other Operating Income and Transportation, Gathering and Compression within the Consolidated Statements of Income:



	For the Three Months Ended		For the Nine Months Ended
	September 30, 2017		September 30, 2017
Other Operating Income:
Equity in Earnings of Affiliates - CNX Gathering	$	2,350	$	4,500
Equity in Earnings of Affiliates - CNXM	$	9,685	$	29,469

Transportation, Gathering and Compression:
Gathering Services - CNX Gathering	$	217	$	702
Gathering Services - CNXM	$	32,639	$	98,388

At September 30, 2018 and December 31, 2017, CNX had a net payable of $10,473 and $9,982 respectively due to CNX Gathering and CNXM, primarily for accrued but unpaid gathering services.