DELAWARE | 001-35574 | 37-1661577 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania | 15222 |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
¨ | Emerging growth company |
EQT Midstream Partners, LP | |||
(Registrant) | |||
By: | EQT Midstream Services, LLC, its General Partner | ||
By: | /s/ Robert J. McNally | ||
Robert J. McNally | |||
Senior Vice President and Chief Financial Officer | |||
Date: | April 27, 2017 |
Exhibit No. | Document Description | |
99.1 | News release dated April 27, 2017 issued by | |
EQT Midstream Partners, LP and EQT GP Holdings, LP |
• | Increased EQM per unit distribution by 19% compared to Q1 2016 |
• | Maintained a 1.5x coverage ratio for the quarter |
• | Generated 92% of revenue from firm reservation fees |
Full-year 2017 - $MM | ||
Net Income | $555 – $595 | |
Adjusted EBITDA | $670 – $710 | |
Distributable Cash Flow | $590 – $630 | |
Q2 2017 | ||
Net Income | $124 – $134 | |
Adjusted EBITDA | $150 – $160 |
$MM | Three Months Ended March 31, 2017 | 2017 Full-year Forecast | ||
Gathering | $28 | $200 - $230 | ||
Mountain Valley Pipeline | $20 | $200 | ||
Transmission | $17 | $60 - $80 | ||
Header Pipeline | $21 | $40 | ||
Total | $86 | $500 - $550 |
• | EQM’s operating performance as compared to other publicly traded partnerships in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods; |
• | the ability of EQM’s assets to generate sufficient cash flow to make distributions to EQM unitholders; |
• | EQM’s ability to incur and service debt and fund capital expenditures; and |
• | the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. |
(Thousands) | Three Months Ended March 31, 2017 | |||
Net income | $ | 143,196 | ||
Add: | ||||
Net interest expense | 7,926 | |||
Depreciation and amortization expense | 20,547 | |||
Preferred Interest payments received post conversion | 2,746 | |||
Non-cash long-term compensation expense | 225 | |||
Less: | ||||
Equity income | (4,277 | ) | ||
AFUDC – equity | (1,699 | ) | ||
Adjusted EBITDA | $ | 168,664 | ||
Less: | ||||
Net interest expense excluding interest income on the Preferred Interest | (9,652 | ) | ||
Capitalized interest and AFUDC – debt | (1,600 | ) | ||
Ongoing maintenance capital expenditures net of expected reimbursements | (2,608 | ) | ||
Distributable cash flow | $ | 154,804 | ||
Distributions declared (1): | ||||
Limited Partner | $ | 71,718 | ||
General Partner | 32,520 | |||
Total | $ | 104,238 | ||
Coverage Ratio | 1.49x | |||
Net cash provided by operating activities | $ | 161,422 | ||
Adjustments: | ||||
Capitalized interest and AFUDC – debt | (1,600 | ) | ||
Principal payments received on Preferred Interest | 1,020 | |||
Ongoing maintenance capital expenditures net of expected reimbursements | (2,608 | ) | ||
Other, including changes in working capital | (3,430 | ) | ||
Distributable cash flow | $ | 154,804 |
(1) | Reflects cash distribution of $0.89 per limited partner unit for the first quarter 2017 and 80,581,758 million limited partner units outstanding as of March 31, 2017. If limited partner units are issued on or prior to May 5, 2017, the aggregate level of all distributions will be higher than reflected. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands, except per unit amounts) | |||||||
Operating revenues (2) | $ | 203,426 | $ | 185,786 | |||
Operating expenses: | |||||||
Operating and maintenance | 20,286 | 17,136 | |||||
Selling, general and administrative | 17,480 | 17,523 | |||||
Depreciation and amortization | 20,547 | 14,007 | |||||
Total operating expenses | 58,313 | 48,666 | |||||
Operating income | 145,113 | 137,120 | |||||
Other income | 6,009 | 7,602 | |||||
Net interest expense | 7,926 | 4,552 | |||||
Income before income taxes | 143,196 | 140,170 | |||||
Income tax expense | — | 3,435 | |||||
Net income | $ | 143,196 | $ | 136,735 | |||
Calculation of limited partners' interest in net income: | |||||||
Net income | $ | 143,196 | $ | 136,735 | |||
Less pre-acquisition net income allocated to parent | — | (7,670 | ) | ||||
Less general partner interest in net income – general partner units | (2,519 | ) | (2,355 | ) | |||
Less general partner interest in net income – incentive distribution rights | (30,686 | ) | (18,832 | ) | |||
Limited partners' interest in net income | $ | 109,991 | $ | 107,878 | |||
Net income per limited partner unit – basic | $ | 1.36 | $ | 1.39 | |||
Net income per limited partner unit – diluted | $ | 1.36 | $ | 1.39 | |||
Weighted average limited partner units outstanding – basic | 80,602 | 77,593 | |||||
Weighted average limited partner units outstanding – diluted | 80,602 | 77,675 |
(1) | EQM’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of the Allegheny Valley Connector (AVC) and several Marcellus gathering systems (October 2016 Acquisition), which were acquired by EQM effective on October 1, 2016. |
(2) | Operating revenues included affiliate revenues from EQT of $143.4 million and $135.3 million for the three months ended March 31, 2017 and 2016, respectively. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
FINANCIAL DATA | (Thousands, other than per day amounts) | ||||||
Firm reservation fee revenues | $ | 94,271 | $ | 82,007 | |||
Volumetric based fee revenues: | |||||||
Usage fees under firm contracts (2) | 4,821 | 10,452 | |||||
Usage fees under interruptible contracts | 3,237 | 5,550 | |||||
Total volumetric based fee revenues | 8,058 | 16,002 | |||||
Total operating revenues | 102,329 | 98,009 | |||||
Operating expenses: | |||||||
Operating and maintenance | 10,455 | 8,945 | |||||
Selling, general and administrative | 9,425 | 9,197 | |||||
Depreciation and amortization | 8,860 | 7,263 | |||||
Total operating expenses | 28,740 | 25,405 | |||||
Operating income | $ | 73,589 | $ | 72,604 | |||
OPERATIONAL DATA | |||||||
Gathering volumes (BBtu per day) | |||||||
Firm capacity reservation | 1,728 | 1,424 | |||||
Volumetric based services (3) | 224 | 473 | |||||
Total gathered volumes | 1,952 | 1,897 | |||||
Capital expenditures | $ | 48,838 | $ | 73,087 |
(1) | EQM’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of the October 2016 Acquisition. |
(2) | Includes fees on volumes gathered in excess of firm contracted capacity. |
(3) | Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
FINANCIAL DATA | (Thousands, other than per day amounts) | ||||||
Firm reservation fee revenues | $ | 92,274 | $ | 70,109 | |||
Volumetric based fee revenues: | |||||||
Usage fees under firm contracts (2) | 2,857 | 13,429 | |||||
Usage fees under interruptible contracts | 5,966 | 4,239 | |||||
Total volumetric based fee revenues | 8,823 | 17,668 | |||||
Total operating revenues | 101,097 | 87,777 | |||||
Operating expenses: | |||||||
Operating and maintenance | 9,831 | 8,191 | |||||
Selling, general and administrative | 8,055 | 8,326 | |||||
Depreciation and amortization | 11,687 | 6,744 | |||||
Total operating expenses | 29,573 | 23,261 | |||||
Operating income | $ | 71,524 | $ | 64,516 | |||
OPERATIONAL DATA | |||||||
Transmission pipeline throughput (BBtu per day) | |||||||
Firm capacity reservation | 2,119 | 1,622 | |||||
Volumetric based services (3) | 31 | 487 | |||||
Total transmission pipeline throughput | 2,150 | 2,109 | |||||
Average contracted firm transmission reservation commitments (BBtu per day) | 3,743 | 3,005 | |||||
Capital expenditures | $ | 21,389 | $ | 60,071 |
(1) | EQM’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of the October 2016 Acquisition. |
(2) | Includes commodity charges and fees on all volumes transported under firm contracts as well as transmission fees on volumes in excess of firm contracted capacity. |
(3) | Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Expansion capital expenditures (2) | $ | 66,645 | $ | 127,950 | |||
Maintenance capital expenditures: | |||||||
Ongoing maintenance | 3,582 | 5,033 | |||||
Funded regulatory compliance | — | 175 | |||||
Total maintenance capital expenditures | 3,582 | 5,208 | |||||
Total capital expenditures | $ | 70,227 | $ | 133,158 |
(1) | EQM’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of the October 2016 Acquisition. |
(2) | Expansion capital expenditures do not include capital contributions made to the MVP JV. Capital contributions to the MVP JV were $19.8 million and $11.4 million for the three months ended March 31, 2017 and 2016, respectively. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands, except per unit amounts) | |||||||
Operating revenues (2) | $ | 203,426 | $ | 185,786 | |||
Operating expenses: | |||||||
Operating and maintenance | 20,286 | 17,136 | |||||
Selling, general and administrative | 18,692 | 18,480 | |||||
Depreciation and amortization | 20,547 | 14,007 | |||||
Total operating expenses | 59,525 | 49,623 | |||||
Operating income | 143,901 | 136,163 | |||||
Other income | 6,009 | 7,602 | |||||
Net interest expense | 7,922 | 4,551 | |||||
Income before income taxes | 141,988 | 139,214 | |||||
Income tax expense | — | 3,435 | |||||
Net income | 141,988 | 135,779 | |||||
Net income attributable to noncontrolling interests | 80,612 | 77,787 | |||||
Net income attributable to EQT GP Holdings, LP | $ | 61,376 | $ | 57,992 | |||
Calculation of limited partners' interest in net income: | |||||||
Net income attributable to EQT GP Holdings, LP | $ | 61,376 | $ | 57,992 | |||
Less pre-acquisition income allocated to parent | — | (7,670 | ) | ||||
Limited partners' interest in net income | $ | 61,376 | $ | 50,322 | |||
Net income per limited partner unit – basic and diluted | $ | 0.23 | $ | 0.19 | |||
Weighted average common units outstanding – basic and diluted | 266,183 | 266,173 |
(1) | EQGP’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of the October 2016 Acquisition. |
(2) | Operating revenues included affiliate revenues from EQT of $143.4 million and $135.3 million for the three months ended March 31, 2017 and 2016, respectively. |
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