(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO | |
COMMISSION FILE NUMBER 001-35574 |
DELAWARE | 37-1661577 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania | 15222 |
(Address of principal executive offices) | (Zip code) |
(412) 553-5700 (Registrant's telephone number, including area code) |
Large Accelerated Filer x | Accelerated Filer ¨ | Emerging Growth Company ¨ | |||
Non-Accelerated Filer ¨ | (Do not check if a smaller reporting company) | Smaller Reporting Company ¨ |
Page No. | |||
Abbreviations | Measurements |
ASU – Accounting Standards Update | Btu = one British thermal unit |
FASB – Financial Accounting Standards Board | BBtu = billion British thermal units |
FERC – Federal Energy Regulatory Commission | Bcf = billion cubic feet |
GAAP – United States Generally Accepted Accounting Principles | Dth = dekatherm or million British thermal units |
IDRs – incentive distribution rights | MMBtu = million British thermal units |
IPO – Initial Public Offering | Mcf = thousand cubic feet |
IRS – Internal Revenue Service | MMcf = million cubic feet |
SEC – Securities and Exchange Commission |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands, except per unit amounts) | |||||||||||||||
Operating revenues (2) | $ | 269,761 | $ | 196,815 | $ | 556,323 | $ | 396,887 | |||||||
Operating expenses: | |||||||||||||||
Operating and maintenance (3) | 24,587 | 18,315 | 44,047 | 35,132 | |||||||||||
Selling, general and administrative (3) | 24,438 | 15,812 | 43,436 | 33,212 | |||||||||||
Depreciation | 28,076 | 21,400 | 55,461 | 41,947 | |||||||||||
Amortization of intangible assets | 10,387 | — | 20,773 | — | |||||||||||
Total operating expenses | 87,488 | 55,527 | 163,717 | 110,291 | |||||||||||
Operating income | 182,273 | 141,288 | 392,606 | 286,596 | |||||||||||
Equity income (4) | 10,938 | 5,111 | 19,749 | 9,388 | |||||||||||
Other income | 944 | 1,402 | 1,842 | 2,939 | |||||||||||
Net interest expense (5) | 20,683 | 8,662 | 31,399 | 16,588 | |||||||||||
Net income | 173,472 | 139,139 | 382,798 | 282,335 | |||||||||||
Net income attributable to noncontrolling interests | 853 | — | 3,346 | — | |||||||||||
Net income attributable to EQM | $ | 172,619 | $ | 139,139 | $ | 379,452 | $ | 282,335 | |||||||
Calculation of limited partner interest in net income: | |||||||||||||||
Net income attributable to EQM | $ | 172,619 | $ | 139,139 | $ | 379,452 | $ | 282,335 | |||||||
Less pre-acquisition net income allocated to parent | (11,407 | ) | — | (41,022 | ) | — | |||||||||
Less general partner interest in net income – general partner units | (1,700 | ) | (2,448 | ) | (4,791 | ) | (4,967 | ) | |||||||
Less general partner interest in net income – IDRs | (68,121 | ) | (34,150 | ) | (112,285 | ) | (64,836 | ) | |||||||
Limited partner interest in net income | $ | 91,391 | $ | 102,541 | $ | 221,354 | $ | 212,532 | |||||||
Net income per limited partner unit – basic and diluted | $ | 1.09 | $ | 1.27 | $ | 2.69 | $ | 2.64 | |||||||
Weighted average limited partner units outstanding – basic and diluted | 83,553 | 80,603 | 82,290 | 80,602 | |||||||||||
Cash distributions declared per unit (6) | $ | 1.09 | $ | 0.935 | $ | 2.155 | $ | 1.825 |
(1) | As discussed in Note A, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of Rice Olympus Midstream LLC (ROM), Strike Force Midstream Holdings LLC (Strike Force) and Rice West Virginia Midstream LLC (Rice WV), which were acquired by EQM effective on May 1, 2018 (the May 2018 Acquisition), because this transaction was between entities under common control. |
(2) | Operating revenues included affiliate revenues from EQT Corporation and subsidiaries (collectively, EQT) of $180.4 million and $148.2 million for the three months ended June 30, 2018 and 2017, respectively, and $361.6 million and $291.6 million for six months ended June 30, 2018 and 2017, respectively. See Note F. |
(3) | Operating and maintenance expense included charges from EQT of $11.3 million and $9.3 million for the three months ended June 30, 2018 and 2017, respectively, and $21.8 million and $19.2 million for the six months ended June 30, 2018 and 2017, respectively. Selling, general and administrative expense included charges from EQT of $19.0 million and $15.2 million for the three months ended June 30, 2018 and 2017, respectively, and $36.6 million and $31.6 million for the six months ended June 30, 2018 and 2017, respectively. See Note F. |
(4) | Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note G. |
(5) | Net interest expense included interest income on the Preferred Interest in EES of $1.7 million and $1.7 million for the three months ended June 30, 2018 and 2017, respectively, and $3.3 million and $3.4 million for the six months ended June 30, 2018 and 2017, respectively. |
(6) | Represents the cash distributions declared related to the period presented. See Note J. |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(Thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 382,798 | $ | 282,335 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 55,461 | 41,947 | |||||
Amortization of intangible assets | 20,773 | — | |||||
Equity income | (19,749 | ) | (9,388 | ) | |||
AFUDC – equity | (2,137 | ) | (3,297 | ) | |||
Non-cash long-term compensation expense | 331 | 225 | |||||
Changes in other assets and liabilities: | |||||||
Accounts receivable | 718 | (599 | ) | ||||
Accounts payable | 8,019 | 2,426 | |||||
Due to/from EQT affiliates | (11,210 | ) | 1,410 | ||||
Other assets and other liabilities | 6,642 | 5,246 | |||||
Net cash provided by operating activities | 441,646 | 320,305 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (302,876 | ) | (149,413 | ) | |||
Capital contributions to the MVP Joint Venture | (182,805 | ) | (59,940 | ) | |||
May 2018 Acquisition from EQT | (1,193,160 | ) | — | ||||
Principal payments received on the Preferred Interest | 2,172 | 2,054 | |||||
Net cash used in investing activities | (1,676,669 | ) | (207,299 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from credit facility borrowings | 2,000,500 | 150,000 | |||||
Payments on credit facility borrowings | (2,180,500 | ) | (110,000 | ) | |||
Proceeds from issuance of long-term debt | 2,500,000 | — | |||||
Debt discount and issuance costs | (30,295 | ) | — | ||||
Distributions paid to unitholders | (258,211 | ) | (202,060 | ) | |||
Distributions to noncontrolling interest | (750 | ) | — | ||||
Acquisition of 25% of Strike Force Midstream LLC | (175,000 | ) | — | ||||
Capital contributions | 15,672 | 216 | |||||
Net contributions from EQT | 3,660 | — | |||||
Net cash provided by (used in) financing activities | 1,875,076 | (161,844 | ) | ||||
Net change in cash and cash equivalents | 640,053 | (48,838 | ) | ||||
Cash and cash equivalents at beginning of period | 44,062 | 60,368 | |||||
Cash and cash equivalents at end of period | $ | 684,115 | $ | 11,530 | |||
Cash paid during the period for: | |||||||
Interest, net of amount capitalized | $ | 29,961 | $ | 20,996 | |||
Non-cash activity during the period for: | |||||||
(Decrease) increase in capital contribution receivable from EQT | $ | (12,251 | ) | $ | 758 |
(1) | As discussed in Note A, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the May 2018 Acquisition because this transaction was between entities under common control. |
June 30, 2018 | December 31, 2017 | ||||||
(Thousands, except number of units) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 684,115 | $ | 44,062 | |||
Accounts receivable (net of allowance for doubtful accounts of $1,400 and $446 as of June 30, 2018 and December 31, 2017, respectively) | 47,587 | 48,305 | |||||
Accounts receivable – affiliate | 119,097 | 110,292 | |||||
Other current assets | 14,085 | 12,754 | |||||
Total current assets | 864,884 | 215,413 | |||||
Property, plant and equipment | 4,363,068 | 4,077,282 | |||||
Less: accumulated depreciation | (440,924 | ) | (398,245 | ) | |||
Net property, plant and equipment | 3,922,144 | 3,679,037 | |||||
Investment in unconsolidated entity | 1,003,299 | 460,546 | |||||
Goodwill | 37,954 | 37,954 | |||||
Intangible assets, net | 596,887 | 617,660 | |||||
Other assets | 137,257 | 136,966 | |||||
Total assets | $ | 6,562,425 | $ | 5,147,576 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 84,969 | $ | 80,637 | |||
Due to related party | 41,519 | 31,673 | |||||
Capital contribution payable to MVP Joint Venture | 445,933 | 105,734 | |||||
Accrued interest | 12,309 | 10,926 | |||||
Accrued liabilities | 25,144 | 16,936 | |||||
Total current liabilities | 609,874 | 245,906 | |||||
Credit facility borrowings | — | 180,000 | |||||
Senior notes | 3,453,975 | 987,352 | |||||
Regulatory and other long-term liabilities | 21,442 | 20,273 | |||||
Total liabilities | 4,085,291 | 1,433,531 | |||||
Equity: | |||||||
Predecessor equity | — | 1,391,615 | |||||
Noncontrolling interest | — | 173,472 | |||||
Common (86,480,648 and 80,581,758 units issued and outstanding at June 30, 2018 and December 31, 2017, respectively) | 2,448,531 | 2,147,706 | |||||
General partner (1,443,015 units issued and outstanding at June 30, 2018 and December 31, 2017) | 28,603 | 1,252 | |||||
Total equity | 2,477,134 | 3,714,045 | |||||
Total liabilities and equity | $ | 6,562,425 | $ | 5,147,576 |
(1) | As discussed in Note A, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the May 2018 Acquisition because this transaction was between entities under common control. |
Predecessor Equity | Noncontrolling Interest | Limited Partners Common | General Partner | Total Equity | |||||||||||||||
(Thousands) | |||||||||||||||||||
Balance at January 1, 2017 | $ | — | $ | — | $ | 2,008,510 | $ | (14,956 | ) | $ | 1,993,554 | ||||||||
Net income | — | — | 212,532 | 69,803 | 282,335 | ||||||||||||||
Capital contributions | — | — | 956 | 18 | 974 | ||||||||||||||
Equity-based compensation plans | — | — | 225 | — | 225 | ||||||||||||||
Distributions paid to unitholders | — | — | (140,212 | ) | (61,848 | ) | (202,060 | ) | |||||||||||
Balance at June 30, 2017 | $ | — | $ | — | $ | 2,082,011 | $ | (6,983 | ) | $ | 2,075,028 | ||||||||
Balance at January 1, 2018 | $ | 1,391,615 | $ | 173,472 | $ | 2,147,706 | $ | 1,252 | $ | 3,714,045 | |||||||||
Net income | 41,022 | 3,346 | 221,354 | 117,076 | 382,798 | ||||||||||||||
Capital contributions | — | — | 3,361 | 60 | 3,421 | ||||||||||||||
Equity-based compensation plans | — | — | 331 | — | 331 | ||||||||||||||
Distributions paid to unitholders | — | — | (168,426 | ) | (89,785 | ) | (258,211 | ) | |||||||||||
Net contributions from EQT | 3,660 | — | — | — | 3,660 | ||||||||||||||
Distributions to noncontrolling interests | — | (750 | ) | — | — | (750 | ) | ||||||||||||
Acquisition of 25% of Strike Force Midstream LLC | — | (176,068 | ) | 1,068 | — | (175,000 | ) | ||||||||||||
May 2018 Acquisition from EQT (2) | (1,436,297 | ) | — | 243,137 | — | (1,193,160 | ) | ||||||||||||
Balance at June 30, 2018 | $ | — | $ | — | $ | 2,448,531 | $ | 28,603 | $ | 2,477,134 |
(1) | As discussed in Note A, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the May 2018 Acquisition because this transaction was between entities under common control. |
(2) | Under common control accounting, any difference between consideration transferred and the net assets received at historical cost is recorded as an equity transaction. In addition, equity issued in a common control transaction is recorded at an amount equal to the carrying value of the net assets transferred, even if the equity issued has a readily determinable fair value. As a result, the EQM common units issued in the May 2018 Acquisition are valued at the excess of the net assets received by EQM over the cash consideration. |
A. | Financial Statements |
B. | Acquisitions and Merger |
At November 13, 2017 | ||||
(Thousands) | ||||
Estimated fair value of ROM, Strike Force and Rice WV (1) | $ | 1,514,743 | ||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | ||||
Current assets (2) | 66,586 | |||
Intangible assets (3) | 623,200 | |||
Property and equipment, net (4) | 846,823 | |||
Other non-current assets | 71 | |||
Current liabilities (2) | (59,891 | ) | ||
Total estimated fair value of assets acquired and liabilities assumed | $ | 1,476,789 | ||
Goodwill | 37,954 |
(1) | Includes the estimated fair value attributable to noncontrolling interest of $166 million. |
(2) | The fair value of current assets and current liabilities were assumed to approximate their carrying values. |
(3) | The identifiable intangible assets for customer relationships were estimated by applying a discounted cash flow approach which was adjusted for customer attrition assumptions and projected market conditions. |
(4) | The estimated fair value of long-lived property and equipment were determined utilizing estimated replacement cost adjusted for a usage or obsolescence factor. |
C. | Revenue from Contracts with Customers |
Three Months Ended June 30, 2018 | ||||||||||||
Gathering | Transmission | Total | ||||||||||
(Thousands) | ||||||||||||
Firm reservation fee revenues | $ | 111,702 | $ | 82,222 | $ | 193,924 | ||||||
Volumetric based fee revenues: | ||||||||||||
Usage fees under firm contracts (1) | 9,956 | 4,828 | 14,784 | |||||||||
Usage fees under interruptible contracts (2) | 58,958 | 2,095 | 61,053 | |||||||||
Total volumetric based fee revenues | 68,914 | 6,923 | 75,837 | |||||||||
Total operating revenues | $ | 180,616 | $ | 89,145 | $ | 269,761 | ||||||
Six Months Ended June 30, 2018 | ||||||||||||
Gathering | Transmission | Total | ||||||||||
(Thousands) | ||||||||||||
Firm reservation fee revenues | $ | 221,635 | $ | 179,997 | $ | 401,632 | ||||||
Volumetric based fee revenues: | ||||||||||||
Usage fees under firm contracts (1) | 22,064 | 8,650 | 30,714 | |||||||||
Usage fees under interruptible contracts (2) | 116,545 | 7,432 | 123,977 | |||||||||
Total volumetric based fee revenues | 138,609 | 16,082 | 154,691 | |||||||||
Total operating revenues | $ | 360,244 | $ | 196,079 | $ | 556,323 |
(1) | Includes fees on volumes gathered and transported in excess of firm contracted capacity and also for transmission includes commodity charges and fees on all volumes transported under firm contracts. |
(2) | Includes volumes from contracts under which EQM has agreed to hold capacity available but for which it does not receive a capacity reservation fee. |
2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Total | ||||||||||||||||||||||
(Thousands) | ||||||||||||||||||||||||||||
Gathering firm reservation fees | $ | 223,806 | $ | 471,226 | $ | 547,153 | $ | 557,152 | $ | 557,152 | $ | 2,841,279 | $ | 5,197,768 | ||||||||||||||
Gathering revenues supported by MVCs | — | 65,700 | 71,370 | 71,175 | 71,175 | 136,875 | 416,295 | |||||||||||||||||||||
Transmission firm reservation fees | 179,786 | 347,061 | 347,261 | 341,769 | 338,010 | 2,602,572 | 4,156,459 | |||||||||||||||||||||
Total | $ | 403,592 | $ | 883,987 | $ | 965,784 | $ | 970,096 | $ | 966,337 | $ | 5,580,726 | $ | 9,770,522 |
D. | Equity and Net Income per Limited Partner Unit |
Limited Partner Common Units | General Partner Units | Total | ||||||
Balance at January 1, 2018 | 80,581,758 | 1,443,015 | 82,024,773 | |||||
Common units issued (1) | 9,608 | — | 9,608 | |||||
May 2018 Acquisition consideration | 5,889,282 | — | 5,889,282 | |||||
Balance at June 30, 2018 | 86,480,648 | 1,443,015 | 87,923,663 |
(1) | Units issued upon a resignation from the EQM General Partner's Board of Directors in February 2018. |
E. | Financial Information by Business Segment |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands) | |||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||
Gathering | $ | 180,616 | $ | 112,145 | $ | 360,244 | $ | 214,474 | |||||||
Transmission | 89,145 | 84,670 | 196,079 | 182,413 | |||||||||||
Total operating revenues | $ | 269,761 | $ | 196,815 | $ | 556,323 | $ | 396,887 | |||||||
Operating income: | |||||||||||||||
Gathering | $ | 121,631 | $ | 83,425 | $ | 252,513 | $ | 157,129 | |||||||
Transmission | 60,642 | 57,863 | 140,093 | 129,467 | |||||||||||
Total operating income | $ | 182,273 | $ | 141,288 | $ | 392,606 | $ | 286,596 | |||||||
Reconciliation of operating income to net income: | |||||||||||||||
Equity income (1) | 10,938 | 5,111 | 19,749 | 9,388 | |||||||||||
Other income | 944 | 1,402 | 1,842 | 2,939 | |||||||||||
Net interest expense | 20,683 | 8,662 | 31,399 | 16,588 | |||||||||||
Net income | $ | 173,472 | $ | 139,139 | $ | 382,798 | $ | 282,335 |
(1) | Equity income is included in the Transmission segment. |
June 30, 2018 | December 31, 2017 | ||||||
(Thousands) | |||||||
Segment assets: | |||||||
Gathering | $ | 3,250,242 | $ | 3,020,491 | |||
Transmission (1) | 2,505,947 | 1,948,047 | |||||
Total operating segments | 5,756,189 | 4,968,538 | |||||
Headquarters, including cash | 806,236 | 179,038 | |||||
Total assets | $ | 6,562,425 | $ | 5,147,576 |
(1) | The equity investment in the MVP Joint Venture was included in the headquarters segment prior to June 30, 2018. As of June 30, 2018, the investment in the MVP Joint Venture was included in the Transmission segment and the amount at December 31, 2017 has been recast to confirm with this presentation. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands) | |||||||||||||||
Depreciation: | |||||||||||||||
Gathering | $ | 15,646 | $ | 9,555 | $ | 30,590 | $ | 18,415 | |||||||
Transmission | 12,430 | 11,845 | 24,871 | 23,532 | |||||||||||
Total | $ | 28,076 | $ | 21,400 | $ | 55,461 | $ | 41,947 | |||||||
Expenditures for segment assets: | |||||||||||||||
Gathering | $ | 139,099 | $ | 53,708 | $ | 252,297 | $ | 102,546 | |||||||
Transmission | 27,962 | 29,978 | 46,891 | 51,367 | |||||||||||
Total (1) | $ | 167,061 | $ | 83,686 | $ | 299,188 | $ | 153,913 |
(1) | EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures in the statements of consolidated cash flows until they are paid in a subsequent period. Accrued capital expenditures were approximately $62.3 million, $60.3 million and $66.0 million at June 30, 2018, March 31, 2018 and December 31, 2017, respectively. Accrued capital expenditures were approximately $31.2 million, $34.0 million and $26.7 million at June 30, 2017, March 31, 2017 and December 31, 2016, respectively. |
F. | Related Party Transactions |
G. | Investment in Unconsolidated Entity |
June 30, 2018 | December 31, 2017 | ||||||
(Thousands) | |||||||
Current assets | $ | 1,161,641 | $ | 330,271 | |||
Noncurrent assets | 1,334,266 | 747,728 | |||||
Total assets | $ | 2,495,907 | $ | 1,077,999 | |||
Current liabilities | $ | 290,855 | $ | 65,811 | |||
Equity | 2,205,052 | 1,012,188 | |||||
Total liabilities and equity | $ | 2,495,907 | $ | 1,077,999 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands) | |||||||||||||||
Net interest income | $ | 7,732 | $ | 2,730 | $ | 13,915 | $ | 4,977 | |||||||
AFUDC - equity | 16,307 | 8,503 | 29,489 | 15,656 | |||||||||||
Net income | $ | 24,039 | $ | 11,233 | $ | 43,404 | $ | 20,633 |
H. | Debt |
I. | Fair Value Measurements |
J. | Distributions |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
2018 (1) | 2017 | % Change | 2018 (1) | 2017 | % Change | ||||||||||||||
(Thousands, except per day amounts) | |||||||||||||||||||
FINANCIAL DATA | |||||||||||||||||||
Firm reservation fee revenues | $ | 111,702 | $ | 101,858 | 9.7 | $ | 221,635 | $ | 196,129 | 13.0 | |||||||||
Volumetric based fee revenues: | |||||||||||||||||||
Usage fees under firm contracts (2) | 9,956 | 6,479 | 53.7 | 22,064 | 11,300 | 95.3 | |||||||||||||
Usage fees under interruptible contracts(3) | 58,958 | 3,808 | 1,448.3 | 116,545 | 7,045 | 1,554.3 | |||||||||||||
Total volumetric based fee revenues | 68,914 | 10,287 | 569.9 | 138,609 | 18,345 | 655.6 | |||||||||||||
Total operating revenues | 180,616 | 112,145 | 61.1 | 360,244 | 214,474 | 68.0 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Operating and maintenance | 15,777 | 10,293 | 53.3 | 27,686 | 20,633 | 34.2 | |||||||||||||
Selling, general and administrative | 17,175 | 8,872 | 93.6 | 28,682 | 18,297 | 56.8 | |||||||||||||
Depreciation | 15,646 | 9,555 | 63.7 | 30,590 | 18,415 | 66.1 | |||||||||||||
Amortization of intangible assets | 10,387 | — | 100.0 | 20,773 | — | 100.0 | |||||||||||||
Total operating expenses | 58,985 | 28,720 | 105.4 | 107,731 | 57,345 | 87.9 | |||||||||||||
Operating income | $ | 121,631 | $ | 83,425 | 45.8 | $ | 252,513 | $ | 157,129 | 60.7 | |||||||||
OPERATIONAL DATA | |||||||||||||||||||
Gathered volumes (BBtu per day) | |||||||||||||||||||
Firm capacity reservation | 2,007 | 1,780 | 12.8 | 1,986 | 1,754 | 13.2 | |||||||||||||
Volumetric based services (4) | 2,494 | 281 | 787.5 | 2,514 | 253 | 893.7 | |||||||||||||
Total gathered volumes | 4,501 | 2,061 | 118.4 | 4,500 | 2,007 | 124.2 | |||||||||||||
Capital expenditures | $ | 139,099 | $ | 53,708 | 159.0 | $ | 252,297 | $ | 102,546 | 146.0 |
(1) | Includes the pre-acquisition results of the May 2018 Acquisition, which was effective on May 1, 2018. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of the Rice Merger. |
(2) | Includes fees on volumes gathered in excess of firm contracted capacity. |
(3) | Includes volumes from contracts under which EQM has agreed to hold capacity available but for which it does not receive a capacity reservation fee. |
(4) | Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
(Thousands, except per day amounts) | |||||||||||||||||||||
FINANCIAL DATA | |||||||||||||||||||||
Firm reservation fee revenues | $ | 82,222 | $ | 79,512 | 3.4 | $ | 179,997 | $ | 171,786 | 4.8 | |||||||||||
Volumetric based fee revenues: | |||||||||||||||||||||
Usage fees under firm contracts (1) | 4,828 | 3,503 | 37.8 | 8,650 | 6,360 | 36.0 | |||||||||||||||
Usage fees under interruptible contracts | 2,095 | 1,655 | 26.6 | 7,432 | 4,267 | 74.2 | |||||||||||||||
Total volumetric based fee revenues | 6,923 | 5,158 | 34.2 | 16,082 | 10,627 | 51.3 | |||||||||||||||
Total operating revenues | 89,145 | 84,670 | 5.3 | 196,079 | 182,413 | 7.5 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||
Operating and maintenance | 8,810 | 8,022 | 9.8 | 16,361 | 14,499 | 12.8 | |||||||||||||||
Selling, general and administrative | 7,263 | 6,940 | 4.7 | 14,754 | 14,915 | (1.1 | ) | ||||||||||||||
Depreciation | 12,430 | 11,845 | 4.9 | 24,871 | 23,532 | 5.7 | |||||||||||||||
Total operating expenses | 28,503 | 26,807 | 6.3 | 55,986 | 52,946 | 5.7 | |||||||||||||||
Operating income | $ | 60,642 | $ | 57,863 | 4.8 | $ | 140,093 | $ | 129,467 | 8.2 | |||||||||||
Equity income | $ | 10,938 | $ | 5,111 | 114.0 | $ | 19,749 | $ | 9,388 | 110.4 | |||||||||||
OPERATIONAL DATA | |||||||||||||||||||||
Transmission pipeline throughput (BBtu per day) | |||||||||||||||||||||
Firm capacity reservation | 2,826 | 2,218 | 27.4 | 2,821 | 2,171 | 29.9 | |||||||||||||||
Volumetric based services (2) | 41 | 21 | 95.2 | 41 | 24 | 70.8 | |||||||||||||||
Total transmission pipeline throughput | 2,867 | 2,239 | 28.0 | 2,862 | 2,195 | 30.4 | |||||||||||||||
Average contracted firm transmission reservation commitments (BBtu per day) | 3,607 | 3,341 | 8.0 | 3,873 | 3,542 | 9.3 | |||||||||||||||
Capital expenditures | $ | 27,962 | $ | 29,978 | (6.7 | ) | $ | 46,891 | $ | 51,367 | (8.7 | ) |
(1) | Includes fees on volumes transported in excess of firm contracted capacity as well as commodity charges and fees on all volumes transported under firm contracts. |
(2) | Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity. |
• | 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's 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. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands) | |||||||||||||||
Net income attributable to EQM | $ | 172,619 | $ | 139,139 | $ | 379,452 | $ | 282,335 | |||||||
Add: | |||||||||||||||
Net interest expense | 20,683 | 8,662 | 31,399 | 16,588 | |||||||||||
Depreciation | 28,076 | 21,400 | 55,461 | 41,947 | |||||||||||
Amortization of intangible assets | 10,387 | — | 20,773 | — | |||||||||||
Preferred Interest payments | 2,746 | 2,746 | 5,492 | 5,492 | |||||||||||
Non-cash long-term compensation expense | — | — | 331 | 225 | |||||||||||
Transaction costs (1) | 3,424 | — | 3,424 | — | |||||||||||
Less: | |||||||||||||||
Equity income | (10,938 | ) | (5,111 | ) | (19,749 | ) | (9,388 | ) | |||||||
AFUDC – equity | (1,072 | ) | (1,598 | ) | (2,137 | ) | (3,297 | ) | |||||||
Adjusted EBITDA attributable to the May 2018 Acquisition (2) | (16,417 | ) | — | (60,507 | ) | — | |||||||||
Adjusted EBITDA | $ | 209,508 | $ | 165,238 | $ | 413,939 | $ | 333,902 | |||||||
Less: | |||||||||||||||
Net interest expense excluding interest income on the Preferred Interest | (22,336 | ) | (10,374 | ) | (34,836 | ) | (20,026 | ) | |||||||
Capitalized interest and AFUDC – debt | (1,940 | ) | (1,008 | ) | (2,757 | ) | (2,608 | ) | |||||||
Ongoing maintenance capital expenditures net of expected reimbursements (3) | (7,115 | ) | (3,462 | ) | (10,980 | ) | (6,070 | ) | |||||||
Transaction costs | (3,424 | ) | — | (3,424 | ) | — | |||||||||
Distributable cash flow | $ | 174,693 | $ | 150,394 | $ | 361,942 | $ | 305,198 | |||||||
Net cash provided by operating activities | $ | 220,225 | $ | 158,883 | $ | 441,646 | $ | 320,305 | |||||||
Adjustments: | |||||||||||||||
Capitalized interest and AFUDC – debt | (1,940 | ) | (1,008 | ) | (2,757 | ) | (2,608 | ) | |||||||
Principal payments received on the Preferred Interest | 1,093 | 1,034 | 2,172 | 2,054 | |||||||||||
Ongoing maintenance capital expenditures net of expected reimbursements (3) | (7,115 | ) | (3,462 | ) | (10,980 | ) | (6,070 | ) | |||||||
Adjusted EBITDA attributable to the May 2018 Acquisition (2) | (16,417 | ) | — | (60,507 | ) | — | |||||||||
Other, including changes in working capital | (21,153 | ) | (5,053 | ) | (7,632 | ) | (8,483 | ) | |||||||
Distributable cash flow | $ | 174,693 | $ | 150,394 | $ | 361,942 | $ | 305,198 |
(1) | There were no transaction costs for the three and six months ended June 30, 2017. |
(2) | Adjusted EBITDA attributable to the May 2018 Acquisition for the period prior to May 1, 2018 was excluded from EQM's adjusted EBITDA calculations as these amounts were generated by the May 2018 Acquisition prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM's unitholders. Adjusted EBITDA attributable to the May 2018 Acquisition for the three and six months ended June 30, 2018 was calculated as net income of $11.4 million and $41.0 million, respectively, plus depreciation expense of $1.6 million and $5.8 million, respectively, plus amortization of intangible assets of $3.5 million and $13.8 million, respectively, less interest income of less than $0.1 million and $0.1 million, respectively. |
(3) | Ongoing maintenance capital expenditures net of expected reimbursements excludes ongoing maintenance that EQM expects to be reimbursed or that was reimbursed by EQT under the terms of EQM's omnibus agreement of $0.6 million and zero for the three months |
• | Mountain Valley Pipeline. The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of June 30, 2018. The 42 inch diameter MVP has a targeted capacity of 2.0 Bcf per day and is estimated to span 300 miles extending from EQM's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, providing access to the growing Southeast demand markets. As currently designed, the total cost for the MVP is estimated to be $3.5 billion to $3.7 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the MVP Joint Venture. In 2018, EQM expects to provide capital contributions of $1.0 billion to $1.2 billion to the MVP Joint Venture. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms, including an initial 1.29 Bcf per day firm capacity commitment by EQT, and is currently in negotiation with additional shippers who have expressed interest in the MVP project. In October 2017, the FERC issued the Certificate of Public Convenience and Necessity for the MVP project. In the first quarter of 2018, the MVP Joint Venture received limited notice to proceed with certain construction activities from the FERC and commenced construction. The MVP Joint Venture is targeted to be placed in-service during the first quarter of 2019. In April 2018, the MVP Joint Venture announced the MVP Southgate project, a proposed 70-mile interstate pipeline that will extend from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. The MVP Southgate project is anchored by a firm capacity commitment from PSNC Energy. The preliminary MVP Southgate project cost estimate is $350 million to $500 million, which is expected to be spent in 2019 and 2020. EQM is expected to have between 33% and 48% ownership in the MVP Southgate project and will operate the pipeline. Subject to approval by the FERC, the MVP Southgate has a targeted in-service date of the fourth quarter 2020. |
• | Affiliate Wellhead Gathering Expansion. EQM plans to invest approximately $750 million during 2018 in gathering expansion projects, primarily wellhead and header projects in Pennsylvania, West Virginia and Ohio, including |
• | Transmission Expansion. EQM plans to invest approximately $100 million during 2018 in other transmission expansion projects, primarily the Equitrans Expansion project, which is designed to provide north-to-south capacity on the mainline Equitrans system for deliveries to the MVP. |
• | Water Projects. In 2018, EQM plans to invest approximately $25 million on water infrastructure projects. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Thousands) | |||||||||||||||
Expansion capital expenditures (1) | $ | 159,968 | $ | 80,224 | $ | 284,787 | $ | 146,869 | |||||||
Ongoing maintenance | 7,093 | 3,462 | 14,401 | 7,044 | |||||||||||
Total capital expenditures (2) | $ | 167,061 | $ | 83,686 | $ | 299,188 | $ | 153,913 |
(1) | Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of $65.8 million and $40.2 million for the three months ended June 30, 2018 and 2017, respectively, and $182.8 million and $59.9 million for the six months ended June 30, 2018 and 2017, respectively. |
(2) | EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures in the statements of consolidated cash flows until they are paid in a subsequent period. See Note E to the consolidated financial statements. |
Rating Service | Senior Notes | Outlook | ||
Moody's Investors Service (Moody's) | Ba1 | Stable | ||
Standard & Poor's Ratings Services (S&P) | BBB- | Stable | ||
Fitch Ratings (Fitch) | BBB- | Stable |
• | incur or guarantee additional debt; |
• | make distributions on or redeem or repurchase units; |
• | incur or permit liens on assets; |
• | enter into certain types of transactions with affiliates; |
• | enter into certain mergers or acquisitions; and |
• | dispose of all or substantially all of our assets. |
• | rates and charges for our natural gas transmission and storage and FERC-regulated gathering services; |
• | certification and construction of new interstate transmission and storage facilities; |
• | abandonment of interstate transmission and storage services and facilities; |
• | maintenance of accounts and records; |
• | relationships between pipelines and certain affiliates; |
• | terms and conditions of services and service contracts with customers; |
• | depreciation and amortization policies; |
• | acquisitions and dispositions of interstate transmission and storage facilities; and |
• | initiation and discontinuation of interstate transmission and storage services. |
Exhibit No. | Document Description | Method of Filing | |||
101 | Interactive Data File. | Filed herewith as Exhibit 101. |
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 |
ARTICLE 1 | DEFINITIONS 1 |
ARTICLE 2 | PRODUCER COMMITMENTS 7 |
Section 2.1 | Producer’s Dedication 7 |
Section 2.2 | Conflicting Dedications 8 |
Section 2.3 | Producer’s Reservations 8 |
Section 2.4 | Covenant Running with the Land 8 |
Section 2.5 | Commitment of Other Rice Subsidiaries 9 |
Section 2.6 | Priority of Dedicated Gas 9 |
ARTICLE 3 | SERVICES; GATHERING SYSTEM EXPANSION AND CONNECTION OF WELLS 9 |
Section 3.1 | Gatherer Service Commitment 9 |
Section 3.2 | Development Plan; Gathering System Plan; Exchange and Review of Information 10 |
Section 3.3 | Expansion of Gathering System; Connection of Wells; Delivery Points 11 |
Section 3.4 | Determination of Maximum Daily Quantity 14 |
Section 3.5 | Compression 14 |
Section 3.6 | High Pressure Services 15 |
Section 3.7 | Gas Removed for Lease Operations 15 |
Section 3.8 | Right of Way and Access 15 |
Section 3.9 | Cooperation 16 |
ARTICLE 4 | TERM 16 |
Section 4.1 | Term 16 |
ARTICLE 5 | FEES AND CONSIDERATION 16 |
Section 5.1 | Fees 16 |
ARTICLE 6 | ALLOCATIONS 18 |
Section 6.1 | Allocation of Lost and Unaccounted For Gas 18 |
Section 6.2 | Allocation of Fuel 18 |
Section 6.3 | Allocation of Pipeline Drip Recovered from the Gathering System 19 |
ARTICLE 7 | CERTAIN RIGHTS AND OBLIGATIONS OF PARTIES 20 |
Section 7.1 | Operational Control of Gatherer’s Facilities 20 |
Section 7.2 | Maintenance 20 |
Section 7.3 | Firm Capacity Gas; Capacity Allocations on the Gathering System 20 |
Section 7.4 | Arrangements After Redelivery 20 |
Section 7.5 | Line Pack 20 |
ARTICLE 8 | PRESSURES AT RECEIPT POINTS AND DELIVERY POINTS 21 |
Section 8.1 | Pressures at Receipt Points 21 |
Section 8.2 | Pressures at Delivery Points 21 |
Section 8.3 | Producer Facilities 21 |
ARTICLE 9 | NOMINATION AND BALANCING 21 |
Section 9.1 | Gatherer Notifications 21 |
Section 9.2 | Nominations 21 |
Section 9.3 | Balancing 21 |
ARTICLE 10 | QUALITY 22 |
Section 10.1 | Receipt Point Gas Quality Specifications 22 |
Section 10.2 | Non-Conforming Gas 22 |
Section 10.3 | Delivery Point Gas Quality Specifications 23 |
Section 10.4 | Greenhouse Gas Emissions 23 |
ARTICLE 11 | MEASUREMENT EQUIPMENT AND PROCEDURES 23 |
Section 11.1 | Equipment 23 |
Section 11.2 | Gas Measurement Standards 23 |
Section 11.3 | Gas Measurement 24 |
Section 11.4 | Notice of Measurement Facilities Inspection and Calibration 25 |
Section 11.5 | Measurement Accuracy Verification 25 |
Section 11.6 | Special Tests 26 |
Section 11.7 | Metered Flow Rates in Error 26 |
Section 11.8 | Record Retention 26 |
Section 11.9 | Access 26 |
ARTICLE 12 | NOTICES 27 |
Section 12.1 | Notices 27 |
ARTICLE 13 | PAYMENTS 28 |
Section 13.1 | Invoices 28 |
Section 13.2 | Right to Suspend on Failure to Pay 28 |
Section 13.3 | Audit Rights 28 |
Section 13.4 | Payment Disputes 28 |
Section 13.5 | Interest on Late Payments 29 |
Section 13.6 | Excused Performance 29 |
ARTICLE 14 | FORCE MAJEURE 29 |
Section 14.1 | Suspension of Obligations 29 |
Section 14.2 | Definition of Force Majeure 29 |
Section 14.3 | Settlement of Strikes and Lockouts 30 |
Section 14.4 | Payments for Gas Delivered 30 |
ARTICLE 15 | INDEMNIFICATION 30 |
Section 15.1 | Gatherer 30 |
Section 15.2 | Producer 30 |
ARTICLE 16 | CUSTODY AND TITLE 30 |
Section 16.1 | Custody 30 |
Section 16.2 | Producer Warranty 31 |
Section 16.3 | Title 31 |
ARTICLE 17 | TAXES; ROYALTIES 31 |
Section 17.1 | Taxes 31 |
Section 17.2 | Royalties 31 |
ARTICLE 18 | MISCELLANEOUS 32 |
Section 18.1 | Rights 32 |
Section 18.2 | Applicable Laws 32 |
Section 18.3 | Governing Law; Jurisdiction 32 |
Section 18.4 | Successors and Assigns 33 |
Section 18.5 | Severability 34 |
Section 18.6 | Confidentiality 34 |
Section 18.7 | Entire Agreement, Amendments and Waiver 35 |
Section 18.8 | Limitation of Liability 35 |
Section 18.9 | Headings 36 |
Section 18.10 | Rights and Remedies 36 |
Section 18.11 | No Partnership 36 |
Section 18.12 | Rules of Construction 36 |
Section 18.13 | No Third Party Beneficiaries 36 |
Section 18.14 | Further Assurances 36 |
Section 18.15 | Counterpart Execution 36 |
Section 18.16 | Memorandum of Agreement 36 |
Producer: | RICE DRILLING D LLC 2200 Rice Drive Canonsburg, PA 15317 Attn: [***] Phone: [***] Email: [***] |
With copy to: | For gas control, nominations & balancing: Attn: [***] Phone: [***] Email: [***] For accounting, financial, and legal: Attn: [***] Phone: [***] Email: [***] |
Gatherer: | RICE OLYMPUS MIDSTREAM LLC 2200 Rice Drive Canonsburg, PA 15317 Attn: [***] Phone: [***] |
By: | /s/ Daniel J. Rice IV Daniel J. Rice IV Chief Executive Officer |
By: | Rob Wingo Senior Vice President, Midstream & Marketing |
By: | Daniel J. Rice IV Chief Executive Officer |
By: | /s/ Rob Wingo Rob Wingo Senior Vice President, Midstream & Marketing |
Delivery Point ID | Total Initial Capacity (Dth/Day) | Anticipated In Service Date | Maximum Daily Quantity (Dth/Day) | Minimum Daily Quantity (Dth/Day) |
Dominion East Ohio – | [***] | [***] | [***] | [***] |
TETCO | [***] | [***] | [***] | [***] |
Rockies Express | [***] | [***] | [***] | [***] |
ET Rover | [***] | [***] | [***] | [***] |
Leach Express | [***] | [***] | [***] | [***] |
Re: | Amended and Restated Gas Gathering and Compression Agreement dated March, 31,2017, among Rice Drilling D LLC and Rice Olympus Midstream LLC (the “Gathering Agreement”) |
Planned Well | Well Pad | Target Completion Date |
/s/ Jeremiah J. Ashcroft III | |
Jeremiah J. Ashcroft III | |
President and Chief Executive Officer, EQT Midstream Services, LLC, the registrant’s General Partner |
/s/ Robert J. McNally | |
Robert J. McNally | |
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, the registrant’s General Partner |
/s/ Jeremiah J. Ashcroft III | July 26, 2018 | ||
Jeremiah J. Ashcroft III President and Chief Executive Officer, EQT Midstream Services, LLC, EQM’s General Partner | |||
/s/ Robert J. McNally | July 26, 2018 | ||
Robert J. McNally Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, EQM’s General Partner |
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2018
shares
| |
Entity Information [Line Items] | |
Entity Registrant Name | EQT Midstream Partners, LP |
Entity Central Index Key | 0001540947 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2018 |
Amendment Flag | false |
Current Fiscal Year End | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q2 |
Common Units | |
Entity Information [Line Items] | |
Entity Common Units, Unit Outstanding | 86,480,648 |
General Partner Units | |
Entity Information [Line Items] | |
Entity Common Units, Unit Outstanding | 1,443,015 |
Statements of Consolidated Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||||||||||||||||
Income Statement [Abstract] | |||||||||||||||||||||||
Operating revenues | [1],[2] | $ 269,761 | $ 196,815 | $ 556,323 | $ 396,887 | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Operating and maintenance | [1],[3] | 24,587 | 18,315 | 44,047 | 35,132 | ||||||||||||||||||
Selling, general and administrative | [1],[3] | 24,438 | 15,812 | 43,436 | 33,212 | ||||||||||||||||||
Depreciation | [1] | 28,076 | 21,400 | 55,461 | [4] | 41,947 | [4] | ||||||||||||||||
Amortization of intangible assets | [1] | 10,387 | 0 | 20,773 | [4] | 0 | [4] | ||||||||||||||||
Total operating expenses | [1] | 87,488 | 55,527 | 163,717 | 110,291 | ||||||||||||||||||
Operating income | [1] | 182,273 | 141,288 | 392,606 | 286,596 | ||||||||||||||||||
Equity income | [1],[5] | 10,938 | 5,111 | 19,749 | [4] | 9,388 | [4] | ||||||||||||||||
Other income | [1] | 944 | 1,402 | 1,842 | 2,939 | ||||||||||||||||||
Net interest expense | [1],[6] | 20,683 | 8,662 | 31,399 | 16,588 | ||||||||||||||||||
Net income | [1] | 173,472 | 139,139 | 382,798 | [4],[7] | 282,335 | [4],[7] | ||||||||||||||||
Net income attributable to noncontrolling interests | [1] | 853 | 0 | 3,346 | 0 | ||||||||||||||||||
Net income attributable to EQM | [1] | 172,619 | 139,139 | 379,452 | 282,335 | ||||||||||||||||||
Calculation of limited partner interest in net income: | |||||||||||||||||||||||
Net income attributable to EQM | [1] | 172,619 | 139,139 | 379,452 | 282,335 | ||||||||||||||||||
Less pre-acquisition net income allocated to parent | [1] | (11,407) | 0 | (41,022) | 0 | ||||||||||||||||||
Less general partner interest in net income – general partner units | [1] | (1,700) | (2,448) | (4,791) | (4,967) | ||||||||||||||||||
Less general partner interest in net income – IDRs | [1] | (68,121) | (34,150) | (112,285) | (64,836) | ||||||||||||||||||
Limited partner interest in net income | [1] | $ 91,391 | $ 102,541 | $ 221,354 | $ 212,532 | ||||||||||||||||||
Net income per limited partner unit – basic and diluted (in dollars per share) | [1] | $ 1.09 | $ 1.27 | $ 2.69 | $ 2.64 | ||||||||||||||||||
Weighted average limited partner units outstanding – basic and diluted (in shares) | [1] | 83,553 | 80,603 | 82,290 | 80,602 | ||||||||||||||||||
Cash distributions declared per unit (in dollars per share) | [8] | $ 1.09 | $ 0.935 | $ 2.155 | [1] | $ 1.825 | [1] | ||||||||||||||||
|
Statements of Consolidated Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||
Operating and maintenance | [1],[2] | $ 24,587 | $ 18,315 | $ 44,047 | $ 35,132 | ||||
Selling, general and administrative expenses | [1],[2] | 24,438 | 15,812 | 43,436 | 33,212 | ||||
EES | |||||||||
Interest income | 1,700 | 1,700 | 3,300 | 3,400 | |||||
EQT | |||||||||
Operating revenues | 180,400 | 148,200 | 361,600 | 291,600 | |||||
Operating and maintenance | 11,300 | 9,300 | 21,800 | 19,200 | |||||
Selling, general and administrative expenses | $ 19,000 | $ 15,200 | $ 36,600 | $ 31,600 | |||||
|
Statements of Consolidated Cash Flows (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|||||||||||||
Statement of Cash Flows [Abstract] | ||||||||||||||
Net income | [1],[2],[3] | $ 382,798 | $ 282,335 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation | [1],[2] | 55,461 | 41,947 | |||||||||||
Amortization of intangible assets | [1],[2] | 20,773 | 0 | |||||||||||
Equity income | [1],[2],[4] | (19,749) | (9,388) | |||||||||||
AFUDC – equity | [2] | (2,137) | (3,297) | |||||||||||
Non-cash long-term compensation expense | [2] | 331 | 225 | |||||||||||
Changes in other assets and liabilities: | ||||||||||||||
Accounts receivable | [2] | 718 | (599) | |||||||||||
Accounts payable | [2] | 8,019 | 2,426 | |||||||||||
Due to/from EQT affiliates | [2] | (11,210) | 1,410 | |||||||||||
Other assets and other liabilities | [2] | 6,642 | 5,246 | |||||||||||
Net cash provided by operating activities | [2] | 441,646 | 320,305 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Capital expenditures | [2] | (302,876) | (149,413) | |||||||||||
Capital contributions to the MVP Joint Venture | [2] | (182,805) | (59,940) | |||||||||||
May 2018 Acquisition from EQT | [1] | (1,193,160) | 0 | |||||||||||
Principal payments received on the Preferred Interest | [2] | 2,172 | 2,054 | |||||||||||
Net cash used in investing activities | [2] | (1,676,669) | (207,299) | |||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from credit facility borrowings | [2] | 2,000,500 | 150,000 | |||||||||||
Payments on credit facility borrowings | [2] | (2,180,500) | (110,000) | |||||||||||
Proceeds from issuance of long-term debt | [2] | 2,500,000 | 0 | |||||||||||
Debt discount and issuance costs | [1] | (30,295) | 0 | |||||||||||
Distributions paid to unitholders | [2] | (258,211) | (202,060) | |||||||||||
Distributions to noncontrolling interest | [2] | (750) | 0 | |||||||||||
Acquisition of 25% of Strike Force Midstream LLC | [2] | (175,000) | 0 | |||||||||||
Capital contributions | [2] | 15,672 | 216 | |||||||||||
Net contributions from EQT | [1] | 3,660 | 0 | |||||||||||
Net cash provided by (used in) financing activities | [2] | 1,875,076 | (161,844) | |||||||||||
Net change in cash and cash equivalents | [2] | 640,053 | (48,838) | |||||||||||
Cash and cash equivalents at beginning of period | [2] | 44,062 | [5] | 60,368 | ||||||||||
Cash and cash equivalents at end of period | [2] | 684,115 | [5] | 11,530 | ||||||||||
Cash paid during the period for: | ||||||||||||||
Interest, net of amount capitalized | [2] | 29,961 | 20,996 | |||||||||||
Non-cash activity during the period for: | ||||||||||||||
(Decrease) increase in capital contribution receivable from EQT | [2] | $ (12,251) | $ 758 | |||||||||||
|
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Current assets: | |||||||||
Cash and cash equivalents | [1],[2] | $ 684,115 | $ 44,062 | ||||||
Accounts receivable (net of allowance for doubtful accounts of $1,400 and $446 as of June 30, 2018 and December 31, 2017, respectively) | [2] | 47,587 | 48,305 | ||||||
Accounts receivable – affiliate | [2] | 119,097 | 110,292 | ||||||
Other current assets | [2] | 14,085 | 12,754 | ||||||
Total current assets | [2] | 864,884 | 215,413 | ||||||
Property, plant and equipment | [2] | 4,363,068 | 4,077,282 | ||||||
Less: accumulated depreciation | [2] | (440,924) | (398,245) | ||||||
Net property, plant and equipment | [2] | 3,922,144 | 3,679,037 | ||||||
Investment in unconsolidated entity | [2] | 1,003,299 | 460,546 | ||||||
Goodwill | [2] | 37,954 | 37,954 | ||||||
Intangible assets, net | [2] | 596,887 | 617,660 | ||||||
Other assets | [2] | 137,257 | 136,966 | ||||||
Total assets | [2] | 6,562,425 | 5,147,576 | ||||||
Current liabilities: | |||||||||
Accounts payable | [2] | 84,969 | 80,637 | ||||||
Due to related party | [2] | 41,519 | 31,673 | ||||||
Capital contribution payable to MVP Joint Venture | [2] | 445,933 | 105,734 | ||||||
Accrued interest | [2] | 12,309 | 10,926 | ||||||
Accrued liabilities | [2] | 25,144 | 16,936 | ||||||
Total current liabilities | [2] | 609,874 | 245,906 | ||||||
Credit facility borrowings | [2] | 0 | 180,000 | ||||||
Senior notes | [2] | 3,453,975 | 987,352 | ||||||
Regulatory and other long-term liabilities | [2] | 21,442 | 20,273 | ||||||
Total liabilities | [2] | 4,085,291 | 1,433,531 | ||||||
Equity: | |||||||||
Predecessor equity | [2] | 0 | 1,391,615 | ||||||
Noncontrolling interest | [2] | 0 | 173,472 | ||||||
Common (86,480,648 and 80,581,758 units issued and outstanding at June 30, 2018 and December 31, 2017, respectively) | [2] | 2,448,531 | 2,147,706 | ||||||
General partner (1,443,015 units issued and outstanding at June 30, 2018 and December 31, 2017) | [2] | 28,603 | 1,252 | ||||||
Total equity | [2],[3] | 2,477,134 | 3,714,045 | ||||||
Total liabilities and equity | [2] | $ 6,562,425 | $ 5,147,576 | ||||||
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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, for doubtful accounts | $ 1,400 | $ 446 |
Common units issued (in shares) | 86,480,648 | 80,581,758 |
Common units outstanding (in shares) | 86,480,648 | 80,581,758 |
General partner interest, units issued (in shares) | 1,443,015 | 1,443,015 |
General partner interest, units outstanding (in shares) | 1,443,015 | 1,443,015 |
Statements of Consolidated Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Limited Partners Common |
General Partner |
Predecessor Equity |
Noncontrolling Interest |
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Beginning balance at Dec. 31, 2016 | [1] | $ 1,993,554 | $ 2,008,510 | $ (14,956) | $ 0 | $ 0 | ||||||||||||
Increase (Decrease) in Partners' Capital | ||||||||||||||||||
Net income | [1] | 282,335 | [2],[3] | 212,532 | 69,803 | 0 | ||||||||||||
Capital contributions | [1] | 974 | 956 | 18 | ||||||||||||||
Equity-based compensation plans | [1] | 225 | 225 | |||||||||||||||
Distributions paid to unitholders | [1] | (202,060) | (140,212) | (61,848) | ||||||||||||||
Ending balance at Jun. 30, 2017 | [1] | 2,075,028 | 2,082,011 | (6,983) | 0 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2017 | [1] | 3,714,045 | [4] | 2,147,706 | 1,252 | 1,391,615 | 173,472 | |||||||||||
Increase (Decrease) in Partners' Capital | ||||||||||||||||||
Net income | [1] | 382,798 | [2],[3] | 221,354 | 117,076 | 41,022 | 3,346 | |||||||||||
Capital contributions | [1] | 3,421 | 3,361 | 60 | ||||||||||||||
Equity-based compensation plans | [1] | 331 | 331 | |||||||||||||||
Distributions paid to unitholders | [1] | (258,211) | (168,426) | (89,785) | ||||||||||||||
Net contributions from EQT | 3,660 | 3,660 | [1] | |||||||||||||||
Distributions to noncontrolling interests | [1] | (750) | (750) | |||||||||||||||
Acquisition of 25% of Strike Force Midstream LLC | [1] | (175,000) | 1,068 | (176,068) | ||||||||||||||
May 2018 Acquisition from EQT | [1],[5] | (1,193,160) | 243,137 | (1,436,297) | ||||||||||||||
Ending balance at Jun. 30, 2018 | [1] | $ 2,477,134 | [4] | $ 2,448,531 | $ 28,603 | $ 0 | $ 0 | |||||||||||
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Statements of Consolidated Equity (Unaudited) (Parenthetical) |
May 01, 2018 |
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Strike Force Midstream | |
Percentage of voting interests acquired | 25.00% |
Financial Statements |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statements | Financial Statements Organization and Basis of Presentation EQM is a growth-oriented Delaware limited partnership. EQT Midstream Services, LLC (EQM General Partner) is a direct wholly owned subsidiary of EQT GP Holdings, LP (EQGP) and is the general partner of EQM. The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQM as of June 30, 2018 and December 31, 2017, the results of its operations for the three and six months ended June 30, 2018 and 2017, and its cash flows and equity for the six months ended June 30, 2018 and 2017. Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of the May 2018 Acquisition because this transaction was between entities under common control. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of EQT's merger with Rice Energy Inc. (Rice) (the Rice Merger). EQM recorded the assets and liabilities acquired in the May 2018 Acquisition at their carrying amounts to EQT on the effective date of the transaction. The consolidated financial statements are not necessarily indicative of the actual results of operations if EQM and the assets acquired in the May 2018 Acquisition been operated together during the pre-acquisition periods. Due to the seasonal nature of EQM's utility customer contracts, the interim statements for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, 2017 and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case as included in EQM's Current Report on Form 8-K as filed with the SEC on June 12, 2018. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration the entity expects in exchange for those goods or services. EQM adopted this standard on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity. EQM does not expect the standard to have a significant effect on its results of operations, liquidity or financial position. EQM implemented processes and controls to ensure new contracts are reviewed for the appropriate accounting treatment and to generate the disclosures required under the new standard in the first quarter of 2018. For the disclosures required by this ASU, see Note C. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The standard primarily affects accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments, and eliminates the cost method of accounting for equity investments. EQM adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires an entity to record assets and obligations for contracts currently recognized as operating leases. Lessees and lessors must apply a modified retrospective transition approach. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. EQM has performed a high-level identification of agreements covered by this standard, is currently evaluating processes and internal controls and is in the process of implementing a third-party supported lease accounting information system to facilitate the accounting and financial reporting requirements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. EQM is currently evaluating the effect this standard will have on its financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test of Goodwill Impairment. ASU 2017-04 simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead, a company would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). Entities will apply the standard’s provisions prospectively. EQM adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. |
Acquisitions and Merger |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Merger | Acquisitions and Merger May 2018 Acquisition On April 25, 2018, EQT, Rice Midstream Holdings LLC, a wholly owned subsidiary of EQT, EQM and EQM Gathering Holdings, LLC (EQM Gathering), a wholly owned subsidiary of EQM, entered into a Contribution and Sale Agreement pursuant to which EQM Gathering acquired from EQT all of EQT's interests in ROM, Strike Force and Rice WV in exchange for an aggregate of 5,889,282 EQM common units and aggregate cash consideration of $1.15 billion, plus working capital adjustments. ROM owns a natural gas gathering system that gathers gas from wells located primarily in Belmont County, Ohio. Strike Force owns a 75% limited liability company interest in Strike Force Midstream LLC (Strike Force Midstream). The May 2018 Acquisition closed on May 22, 2018 with an effective date of May 1, 2018. As a result of the recast, EQM recognized approximately $38.0 million of goodwill. The goodwill value was based on a valuation performed by EQT as of November 13, 2017 with regard to the Rice Merger. EQT recorded goodwill as the excess of the estimated enterprise value of ROM, Strike Force and Rice WV over the sum of the fair value amounts allocated to the assets and liabilities of ROM, Strike Force and Rice WV. Goodwill was allocated to the value attributed to additional growth opportunities, synergies and operating leverage within the Gathering segment. Prior to the recast, EQM had no goodwill. The following table summarizes the allocation of the fair value of the assets and liabilities of ROM, Strike Force and Rice WV as of November 13, 2017 through pushdown accounting from EQT. The preliminary allocation to certain assets and/or liabilities may be adjusted by material amounts as EQT continues to finalize the fair value estimates.
As a result of the recast, EQM also recognized approximately $623.2 million in intangible assets. These intangible assets were valued by EQT based upon the estimated fair value of the customer contracts as of November 13, 2017. The customer contracts were assigned a useful life of 15 years and are amortized on a straight-line basis. Amortization expense for the three and six months ended June 30, 2018 was $10.4 million and $20.8 million, respectively. As of June 30, 2018 and December 31, 2017, accumulated amortization was $26.3 million and $5.5 million, respectively. There was no amortization expense recognized for the three and six months ended June 30, 2017. The estimated annual amortization expense over the next five years is $41.5 million. Gulfport Transaction On May 1, 2018, pursuant to the Purchase and Sale Agreement dated April 25, 2018, by and among EQM, EQM Gathering, Gulfport Energy Corporation (Gulfport) and an affiliate of Gulfport, EQM Gathering acquired the remaining 25% limited liability company interest in Strike Force Midstream not owned by Strike Force for $175 million (the Gulfport Transaction). As a result, EQM owned 100% of Strike Force Midstream effective as of May 1, 2018. EQM-RMP Merger On April 25, 2018, EQM entered into an Agreement and Plan of Merger (the Merger Agreement) with Rice Midstream Partners LP (RMP), Rice Midstream Management LLC, the general partner of RMP (the RMP General Partner), the EQM General Partner, EQM Acquisition Sub, LLC, a wholly owned subsidiary of EQM (Merger Sub), EQM GP Acquisition Sub, LLC, a wholly owned subsidiary of EQM (GP Merger Sub), and, solely for certain limited purposes set forth therein, EQT. Pursuant to the Merger Agreement, on July 23, 2018, Merger Sub and GP Merger Sub merged with and into RMP and the RMP General Partner, respectively, with RMP and the RMP General Partner surviving as wholly owned subsidiaries of EQM (the EQM-RMP Merger). Pursuant to the Merger Agreement, each RMP common unit issued and outstanding immediately prior to the effective time of the EQM-RMP Merger was converted into the right to receive 0.3319 EQM common units (the Merger Consideration), the issued and outstanding incentive distributions rights of RMP were canceled and each outstanding award of phantom units in respect of RMP common units fully vested and converted into the right to receive the Merger Consideration, less applicable tax withholding, in respect of each RMP common unit subject thereto. The aggregate Merger Consideration consisted of approximately 34 million EQM common units. As a result of the EQM-RMP Merger, RMP's common units are no longer publicly traded. Also in connection with the completion of the EQM-RMP Merger, on July 23, 2018, EQM repaid the approximately $260 million of borrowings outstanding under the Credit Agreement, dated as of December 22, 2014, by and among RMP, as parent guarantor, Rice Midstream OpCo LLC, a wholly owned subsidiary of RMP, as borrower, Wells Fargo Bank, N.A., as administrative agent, and the lenders and other parties from time to time party thereto (the RMP Credit Agreement), and the RMP Credit Agreement was terminated. |
Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers As discussed in Note A, EQM adopted ASU No. 2014-09, Revenue from Contracts with Customers, on January 1, 2018 using the modified retrospective method of adoption. EQM applied the ASU to all open contracts as of the date of initial application. Adoption of the ASU did not require an adjustment to the opening balance of equity and did not materially change EQM's amount and timing of revenues. EQM provides gathering, transmission and storage services in two manners: firm service and interruptible service. Firm service contracts are typically long term and include firm reservation fees, which are fixed, monthly charges for the guaranteed reservation of pipeline or storage capacity. Volumetric based fees under firm contracts include usage fees and charges for actual volumes transported, gathered or stored in excess of the firm contracted volume. Interruptible service contracts include volumetric based fees, which are charges for the volume of gas actually gathered, transported or stored and do not guarantee access to the pipeline or storage facility. These contracts can be short or long term. Firm and interruptible contracts are billed at the end of each calendar month, with payment typically due within 21 days. Under a firm contract, EQM has a stand-ready obligation to provide the service over the life of the contract. The performance obligation for firm reservation fee revenue is satisfied over time as the pipeline capacity is made available to the customer. As such, EQM recognizes firm reservation fee revenue evenly over the contract period, using a time-elapsed output method to measure progress. The performance obligation for volumetric based fee revenues for usage fees under firm and interruptible contracts is generally satisfied upon EQM's monthly billing to the customer for actual volumes gathered, transported or stored during the month. The amount billed corresponds directly to the value of EQM's performance to date as the customer obtains value as each volume is gathered, transported or stored. Certain of EQM's gas gathering agreements are structured with minimum volume commitments (MVC), which specify minimum quantities for which a customer will be charged regardless of actual quantities gathered under the contract. Revenue is recognized for MVCs when the performance obligation has been met, which is the earlier of when the gas is gathered or when it is remote that the producer will be able to meet its MVC. For the three and six months ended June 30, 2018 and 2017, all revenues recognized on EQM's statements of consolidated operations are from contracts with customers. As of June 30, 2018 and December 31, 2017, all receivables recorded on EQM's consolidated balance sheets represent performance obligations that have been satisfied and for which an unconditional right to consideration exists. The table below provides disaggregated revenue information by EQM business segment for the three and six months ended June 30, 2018.
Based on total projected contractual revenues and including contracts associated with expected future capacity from expansion projects that are not yet fully constructed but for which EQM has entered into firm contracts, EQM's firm gathering contracts and firm transmission and storage contracts had weighted average remaining terms of approximately 8 and 15 years, respectively, as of December 31, 2017. The following table summarizes the transaction price allocated to EQM's remaining performance obligations under all contracts with firm reservation fees and MVCs as of June 30, 2018.
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Equity and Net Income per Limited Partner Unit |
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Net Income per Limited Partner Unit | Equity and Net Income per Limited Partner Unit The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2018 through June 30, 2018. There were no issuances in 2017.
As of June 30, 2018, EQGP owned 21,811,643 EQM common units, representing a 24.8% limited partner interest, 1,443,015 EQM general partner units, representing a 1.6% general partner interest, and all of the IDRs in EQM. As of June 30, 2018, EQT owned 5,889,282 EQM common units, representing a 6.7% limited partner interest in EQM, 100% of the non-economic general partner interest in EQGP and a 91.3% limited partner interest in EQGP. As a result of the EQM-RMP Merger, on July 23, 2018, an indirect wholly owned subsidiary of EQT received 9,544,530 EQM common units as Merger Consideration. Net Income per Limited Partner Unit. Net income attributable to the May 2018 Acquisition for the periods prior to May 1, 2018, was not allocated to the limited partners for purposes of calculating net income per limited partner unit as these pre-acquisition amounts were not available to the unitholders. The weighted average phantom unit awards included in the calculation of basic weighted average limited partner units outstanding was 17,369 and 21,041 for the three months ended June 30, 2018 and 2017, respectively, and 20,467 and 20,506 for the six months ended June 30, 2018 and 2017, respectively. Distributions On July 24, 2018, the Board of Directors of the EQM General Partner declared a cash distribution to EQM's unitholders for the second quarter of 2018 of $1.09 per common unit. The cash distribution will be paid on August 14, 2018 to unitholders of record at the close of business on August 3, 2018. Based on the EQM common units outstanding on July 26, 2018, cash distributions to EQGP will be approximately $23.8 million related to its limited partner interest, $2.4 million related to its general partner interest and $68.1 million related to its IDRs in EQM. The distribution amounts to EQGP related to its general partner interest and IDRs in EQM are subject to change if EQM issues additional common units on or prior to the record date for the second quarter 2018 distribution. |
Financial Information by Business Segment |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information by Business Segment | Financial Information by Business Segment
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In the ordinary course of business, EQM engages in transactions with EQT and its affiliates including, but not limited to, gas gathering agreements, transportation service and precedent agreements and storage agreements. Pursuant to an omnibus agreement, EQT performs centralized corporate, general and administrative services for EQM and provides a license for the use of the name "EQT" and related marks in connection with EQM's business. In exchange, EQM reimburses EQT for the expenses incurred by EQT in providing these services. The omnibus agreement also provides for certain indemnification obligations between EQM and EQT. Pursuant to a secondment agreement, employees of EQT and its affiliates may be seconded to EQM to provide operating and other services with respect to EQM's business under the direction, supervision and control of EQM. EQM reimburses EQT and its affiliates for the services provided by the seconded employees. The expenses for which EQM reimburses EQT and its affiliates may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis. EQM is unable to estimate what those expenses would be on a stand-alone basis. |
Investment in Unconsolidated Entity |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Entity | Investment in Unconsolidated Entity The MVP Joint Venture is constructing the Mountain Valley Pipeline (MVP), an estimated 300-mile natural gas interstate pipeline spanning from northern West Virginia to southern Virginia. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of June 30, 2018. The MVP Joint Venture is a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. EQM is not the primary beneficiary because it does not have the power to direct the activities of the MVP Joint Venture that most significantly impact its economic performance. Certain business decisions require the approval of owners holding more than a 66 2/3% interest in the MVP Joint Venture and no one member owns more than a 66 2/3% interest. The MVP Joint Venture is an equity method investment for accounting purposes as EQM has the ability to exercise significant influence over operating and financial policies of the MVP Joint Venture. In May 2018, the MVP Joint Venture issued a capital call notice to MVP Holdco, LLC (MVP Holdco), a direct wholly owned subsidiary of EQM, for $445.9 million, of which $193.4 million was paid in July 2018 and $252.5 million is expected to be paid in the third quarter of 2018. The capital contribution payable has been reflected on the consolidated balance sheet as of June 30, 2018 with a corresponding increase to EQM's investment in the MVP Joint Venture. Equity income is primarily EQM's portion of the MVP Joint Venture's AFUDC on construction of the MVP. As of June 30, 2018, EQM had issued a $91 million performance guarantee in favor of the MVP Joint Venture to provide performance assurances for MVP Holdco's obligations to fund its proportionate share of the construction budget for the MVP. As of June 30, 2018, EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $1,094 million, which consists of the investment in unconsolidated entity balance on the consolidated balance sheet as of June 30, 2018 and amounts that could have become due under EQM's performance guarantee as of that date. The following tables summarize the unaudited condensed financial statements for the MVP Joint Venture. Condensed Consolidated Balance Sheets
Condensed Statements of Consolidated Operations
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Debt |
6 Months Ended |
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Jun. 30, 2018 | |
Long-term Debt, Current and Noncurrent [Abstract] | |
Debt | Debt Credit Facility Borrowings $1 Billion Facility. EQM has a $1 billion credit facility that expires in July 2022. The $1 Billion Facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes (including purchasing assets from EQT and other third parties). EQM's $1 Billion Facility contains various provisions that, if violated, could result in termination of the credit facility, require early payment of amounts outstanding or similar actions. The most significant covenants and events of default relate to maintenance of a permitted leverage ratio, limitations on transactions with affiliates, limitations on restricted payments, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of and certain other defaults under other financial obligations and change of control provisions. Under the $1 Billion Facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions). EQM had no letters of credit outstanding under its credit facility as of June 30, 2018 and December 31, 2017. During the three and six months ended June 30, 2018, the maximum amount of EQM's outstanding borrowings under EQM's credit facility at any time was $338 million and $420 million, respectively, and the average daily balance was approximately $122 million and $211 million, respectively. EQM incurred interest at weighted average annual interest rates of approximately 3.4% and 3.2% for the three and six months ended June 30, 2018, respectively. There were no borrowings outstanding at any time during the three and six months ended June 30, 2017. During the third quarter, EQM intends to increase its borrowing capacity from $1 billion up to $2 billion. 364-Day Facility. EQM has a $500 million, 364-day, uncommitted revolving loan agreement with EQT that matures on October 24, 2018 and will automatically renew for successive 364-day periods unless EQT delivers a non-renewal notice at least 60 days prior to the then current maturity date. Interest accrues on outstanding borrowings at an interest rate equal to the rate then applicable to similar loans under the $1 Billion Facility, or a successor revolving credit facility, less the sum of (i) the then applicable commitment fee under the $1 Billion Facility and (ii) 10 basis points. EQM had no borrowings outstanding on the 364-Day Facility as of June 30, 2018 and December 31, 2017. There were no borrowings outstanding at any time during the three and six months ended June 30, 2018. During the three and six months ended June 30, 2017, the maximum amount of EQM's outstanding borrowings under the credit facility at any time was $100 million and the average daily balances were approximately $55 million and $40 million, respectively. EQM incurred interest at weighted average annual interest rates of approximately 2.2% and 2.1% for the three and six months ended June 30, 2017, respectively. EQM expects EQT to terminate the 364-Day Facility at or prior to the proposed separation of EQT's production and midstream businesses (the Separation). EQM Term Loan Facility. On April 25, 2018, EQM entered into a $2.5 billion unsecured multi-draw 364-day term loan facility with a syndicate of lenders. The EQM Term Loan Facility was used to fund the cash consideration for the May 2018 Acquisition, to repay borrowings under EQM's $1 Billion Facility and for other general partnership purposes. During the second quarter 2018, the balance outstanding under the EQM Term Loan Facility was repaid, and the EQM Term Loan Facility was terminated on June 25, 2018 in connection with EQM's issuance of the 2018 Senior Notes (defined below). As a result of the termination, EQM expensed $3 million of deferred issuance costs. From April 25, 2018 through June 25, 2018, the maximum amount of EQM's outstanding borrowings under the EQM Term Loan Facility at any time was $1,825 million and the average daily balance was approximately $1,231 million. EQM incurred interest at a weighted average annual interest rate of approximately 3.3% for the period from April 25, 2018 through June 25, 2018. 2018 Senior Notes. During the second quarter of 2018, EQM issued 4.75% senior notes due July 15, 2023 in the aggregate principal amount of $1.1 billion, 5.50% senior notes due July 15, 2028 in the aggregate principal amount of $850 million and 6.50% senior notes due July 15, 2048 in the aggregate principal amount of $550 million (collectively, the 2018 Senior Notes). EQM received net proceeds from the offering of approximately $2,465.8 million, inclusive of a discount of $11.8 million and estimated debt issuance costs of $22.4 million. The net proceeds were used to repay the balance outstanding under the EQM Term Loan Facility and the RMP Credit Agreement and the remainder is expected to be used for general partnership purposes. The 2018 Senior Notes were issued pursuant to new supplemental indentures to EQM's existing indenture dated August 1, 2014. The 2018 Senior Notes contain covenants that limit EQM's ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the EQM's assets. As of June 30, 2018, EQM was in compliance with all debt provisions and covenants. |
Fair Value Measurements |
6 Months Ended |
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Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying values of cash and cash equivalents, accounts receivable, amounts due to/from related parties and accounts payable approximate fair value due to the short maturity of the instruments; these are considered Level 1 fair value measurements. The carrying value of the credit facility borrowings approximates fair value as the interest rates are based on prevailing market rates; this is considered a Level 1 fair value measurement. As EQM's senior notes are not actively traded, their fair values are considered Level 2 fair value measurements and are estimated using a standard industry income approach model that applies a discount rate based on market rates for debt with similar remaining time to maturity and credit risk. As of June 30, 2018 and December 31, 2017, the estimated fair value of EQM's senior notes was approximately $3,454 million and $1,006 million, respectively, and the carrying value of EQM's senior notes was approximately $3,454 million and $987 million, respectively. The fair value of the Preferred Interest is a Level 3 fair value measurement and is estimated using an income approach model that applies a market-based discount rate. As of June 30, 2018 and December 31, 2017, the estimated fair value of the Preferred Interest was approximately $125 million and $133 million, respectively, and the carrying value of the Preferred Interest was approximately $117 million and $119 million, respectively. |
Distributions |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | Equity and Net Income per Limited Partner Unit The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2018 through June 30, 2018. There were no issuances in 2017.
As of June 30, 2018, EQGP owned 21,811,643 EQM common units, representing a 24.8% limited partner interest, 1,443,015 EQM general partner units, representing a 1.6% general partner interest, and all of the IDRs in EQM. As of June 30, 2018, EQT owned 5,889,282 EQM common units, representing a 6.7% limited partner interest in EQM, 100% of the non-economic general partner interest in EQGP and a 91.3% limited partner interest in EQGP. As a result of the EQM-RMP Merger, on July 23, 2018, an indirect wholly owned subsidiary of EQT received 9,544,530 EQM common units as Merger Consideration. Net Income per Limited Partner Unit. Net income attributable to the May 2018 Acquisition for the periods prior to May 1, 2018, was not allocated to the limited partners for purposes of calculating net income per limited partner unit as these pre-acquisition amounts were not available to the unitholders. The weighted average phantom unit awards included in the calculation of basic weighted average limited partner units outstanding was 17,369 and 21,041 for the three months ended June 30, 2018 and 2017, respectively, and 20,467 and 20,506 for the six months ended June 30, 2018 and 2017, respectively. Distributions On July 24, 2018, the Board of Directors of the EQM General Partner declared a cash distribution to EQM's unitholders for the second quarter of 2018 of $1.09 per common unit. The cash distribution will be paid on August 14, 2018 to unitholders of record at the close of business on August 3, 2018. Based on the EQM common units outstanding on July 26, 2018, cash distributions to EQGP will be approximately $23.8 million related to its limited partner interest, $2.4 million related to its general partner interest and $68.1 million related to its IDRs in EQM. The distribution amounts to EQGP related to its general partner interest and IDRs in EQM are subject to change if EQM issues additional common units on or prior to the record date for the second quarter 2018 distribution. |
Financial Statements (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQM as of June 30, 2018 and December 31, 2017, the results of its operations for the three and six months ended June 30, 2018 and 2017, and its cash flows and equity for the six months ended June 30, 2018 and 2017. Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of the May 2018 Acquisition because this transaction was between entities under common control. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of EQT's merger with Rice Energy Inc. (Rice) (the Rice Merger). EQM recorded the assets and liabilities acquired in the May 2018 Acquisition at their carrying amounts to EQT on the effective date of the transaction. The consolidated financial statements are not necessarily indicative of the actual results of operations if EQM and the assets acquired in the May 2018 Acquisition been operated together during the pre-acquisition periods. Due to the seasonal nature of EQM's utility customer contracts, the interim statements for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, 2017 and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case as included in EQM's Current Report on Form 8-K as filed with the SEC on June 12, 2018. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration the entity expects in exchange for those goods or services. EQM adopted this standard on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity. EQM does not expect the standard to have a significant effect on its results of operations, liquidity or financial position. EQM implemented processes and controls to ensure new contracts are reviewed for the appropriate accounting treatment and to generate the disclosures required under the new standard in the first quarter of 2018. For the disclosures required by this ASU, see Note C. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The standard primarily affects accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments, and eliminates the cost method of accounting for equity investments. EQM adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires an entity to record assets and obligations for contracts currently recognized as operating leases. Lessees and lessors must apply a modified retrospective transition approach. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. EQM has performed a high-level identification of agreements covered by this standard, is currently evaluating processes and internal controls and is in the process of implementing a third-party supported lease accounting information system to facilitate the accounting and financial reporting requirements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. EQM is currently evaluating the effect this standard will have on its financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test of Goodwill Impairment. ASU 2017-04 simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead, a company would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). Entities will apply the standard’s provisions prospectively. EQM adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. |
Acquisitions and Merger (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the fair value of the assets and liabilities of ROM, Strike Force and Rice WV as of November 13, 2017 through pushdown accounting from EQT. The preliminary allocation to certain assets and/or liabilities may be adjusted by material amounts as EQT continues to finalize the fair value estimates.
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Revenue from Contracts with Customers (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregated Revenue Information, by Business Segment | The table below provides disaggregated revenue information by EQM business segment for the three and six months ended June 30, 2018.
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Summary of Remaining Performance Obligations | The following table summarizes the transaction price allocated to EQM's remaining performance obligations under all contracts with firm reservation fees and MVCs as of June 30, 2018.
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Equity and Net Income per Limited Partner Unit (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Units Issued | The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2018 through June 30, 2018. There were no issuances in 2017.
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Financial Information by Business Segment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from External Customers and Operating Income and Reconciliation to Net Income |
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Schedule of Segment Assets |
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Schedule of Depreciation, Amortization, and Expenditures for Segment Assets |
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Investment in Unconsolidated Entity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited Condensed Financial Statements for the Investment in Unconsolidated Equity | The following tables summarize the unaudited condensed financial statements for the MVP Joint Venture. Condensed Consolidated Balance Sheets
Condensed Statements of Consolidated Operations
|
Acquisitions and Merger - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 23, 2018
USD ($)
|
May 01, 2018
USD ($)
shares
|
Apr. 25, 2018
shares
|
Nov. 13, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Goodwill | [1] | $ 37,954,000 | $ 37,954,000 | $ 37,954,000 | ||||||||||||||
Amortization of intangible assets | [2] | 10,387,000 | $ 0 | 20,773,000 | [3] | $ 0 | [3] | |||||||||||
Strike Force Midstream | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership interest (as a percent) | 100.00% | |||||||||||||||||
May 2018 Acquisition | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Equity interest issued or issuable (in shares) | shares | 5,889,282 | |||||||||||||||||
Payments to acquire businesses, gross | $ 1,150,000,000 | |||||||||||||||||
Goodwill | $ 37,954,000 | |||||||||||||||||
Intangible assets acquired | $ 623,200,000 | |||||||||||||||||
Weighted average useful life | 15 years | |||||||||||||||||
Amortization of intangible assets | 10,400,000 | $ 0 | 20,800,000 | $ 0 | ||||||||||||||
Accumulated amortization | 26,300,000 | 26,300,000 | $ 5,500,000 | |||||||||||||||
Estimated annual amortization expense, current | 41,500,000 | 41,500,000 | ||||||||||||||||
Estimated annual amortization expense, 2019 | 41,500,000 | 41,500,000 | ||||||||||||||||
Estimated annual amortization expense, 2020 | 41,500,000 | 41,500,000 | ||||||||||||||||
Estimated annual amortization expense, 2021 | 41,500,000 | 41,500,000 | ||||||||||||||||
Estimated annual amortization expense, 2022 | $ 41,500,000 | $ 41,500,000 | ||||||||||||||||
Consideration transferred | $ 1,514,743,000 | |||||||||||||||||
Strike Force Midstream | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Percentage of voting interests acquired | 25.00% | |||||||||||||||||
Consideration transferred | $ 175,000,000 | |||||||||||||||||
Strike Force Midstream Holdings LLC | May 2018 Acquisition | Strike Force Midstream | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Membership interest (as a percent) | 75.00% | |||||||||||||||||
Rice Midstream Partners, LP | EQM-RMP Merger | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Common share conversation ratio | 0.3319 | |||||||||||||||||
Consideration transferred, common units (in shares) | shares | 34,000,000 | |||||||||||||||||
Subsequent Event | EQM-RMP Merger | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Repayment of outstanding borrowings | $ 260,000,000 | |||||||||||||||||
|
Acquisitions and Merger - Schedule Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Nov. 13, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
||
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Goodwill | [1] | $ 37,954 | $ 37,954 | ||
May 2018 Acquisition | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 1,514,743 | ||||
Current assets | 66,586 | ||||
Intangible assets | 623,200 | ||||
Property and equipment, net | 846,823 | ||||
Property and equipment, net | 71 | ||||
Current liabilities | (59,891) | ||||
Total estimated fair value of assets acquired and liabilities assumed | 1,476,789 | ||||
Goodwill | 37,954 | ||||
Noncontrolling interest, fair value | $ 166,000 | ||||
|
Revenue from Contracts with Customers - Narrative (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Disaggregation of Revenue [Line Items] | ||
Contract billing cycle | 21 days | |
Gathering | ||
Disaggregation of Revenue [Line Items] | ||
Weighted average remaining term | 8 years | |
Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Weighted average remaining term | 15 years |
Equity and Net Income per Limited Partner Unit - Summary of Units Issued (Details) - shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Increase (Decrease) in Partners' Capital | ||
Balance at January 1, 2018 | 82,024,773 | |
Common units issued (in shares) | 9,608 | 0 |
May 2018 Acquisition consideration | 5,889,282 | |
Balance at June 30, 2018 | 87,923,663 | 82,024,773 |
Limited Partner Common Units | ||
Increase (Decrease) in Partners' Capital | ||
Balance at January 1, 2018 | 80,581,758 | |
Common units issued (in shares) | 9,608 | |
May 2018 Acquisition consideration | 5,889,282 | |
Balance at June 30, 2018 | 86,480,648 | 80,581,758 |
General Partner Units | ||
Increase (Decrease) in Partners' Capital | ||
Balance at January 1, 2018 | 1,443,015 | |
Common units issued (in shares) | 0 | |
May 2018 Acquisition consideration | 0 | |
Balance at June 30, 2018 | 1,443,015 | 1,443,015 |
Financial Information by Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
||||||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||||||||||
Total operating revenues | [1],[2] | $ 269,761 | $ 196,815 | $ 556,323 | $ 396,887 | ||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||
Total operating income | [1] | 182,273 | 141,288 | 392,606 | 286,596 | ||||||||||||||||||||
Reconciliation of operating income to net income: | |||||||||||||||||||||||||
Equity income | [1],[3] | 10,938 | 5,111 | 19,749 | [4] | 9,388 | [4] | ||||||||||||||||||
Other income | [1] | 944 | 1,402 | 1,842 | 2,939 | ||||||||||||||||||||
Net interest expense | [1],[5] | 20,683 | 8,662 | 31,399 | 16,588 | ||||||||||||||||||||
Net income | [1] | 173,472 | 139,139 | 382,798 | [4],[6] | 282,335 | [4],[6] | ||||||||||||||||||
Segment assets: | |||||||||||||||||||||||||
Total assets | [7] | 6,562,425 | 6,562,425 | $ 5,147,576 | |||||||||||||||||||||
Depreciation: | |||||||||||||||||||||||||
Total | [1] | 28,076 | 21,400 | 55,461 | [4] | 41,947 | [4] | ||||||||||||||||||
Expenditures for segment assets: | |||||||||||||||||||||||||
Accrued capital expenditures | 62,300 | 31,200 | 62,300 | 31,200 | $ 60,300 | 66,000 | $ 34,000 | $ 26,700 | |||||||||||||||||
Operating Segments | |||||||||||||||||||||||||
Segment assets: | |||||||||||||||||||||||||
Total assets | 5,756,189 | 5,756,189 | 4,968,538 | ||||||||||||||||||||||
Depreciation: | |||||||||||||||||||||||||
Total | 28,076 | 21,400 | 55,461 | 41,947 | |||||||||||||||||||||
Expenditures for segment assets: | |||||||||||||||||||||||||
Total | 167,061 | 83,686 | 299,188 | 153,913 | |||||||||||||||||||||
Headquarters, including cash | |||||||||||||||||||||||||
Segment assets: | |||||||||||||||||||||||||
Total assets | 806,236 | 806,236 | 179,038 | ||||||||||||||||||||||
Gathering | Operating Segments | |||||||||||||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||||||||||
Total operating revenues | 180,616 | 112,145 | 360,244 | 214,474 | |||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||
Total operating income | 121,631 | 83,425 | 252,513 | 157,129 | |||||||||||||||||||||
Segment assets: | |||||||||||||||||||||||||
Total assets | 3,250,242 | 3,250,242 | 3,020,491 | ||||||||||||||||||||||
Depreciation: | |||||||||||||||||||||||||
Total | 15,646 | 9,555 | 30,590 | 18,415 | |||||||||||||||||||||
Expenditures for segment assets: | |||||||||||||||||||||||||
Total | 139,099 | 53,708 | 252,297 | 102,546 | |||||||||||||||||||||
Transmission | Operating Segments | |||||||||||||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||||||||||
Total operating revenues | 89,145 | 84,670 | 196,079 | 182,413 | |||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||
Total operating income | 60,642 | 57,863 | 140,093 | 129,467 | |||||||||||||||||||||
Segment assets: | |||||||||||||||||||||||||
Total assets | 2,505,947 | 2,505,947 | $ 1,948,047 | ||||||||||||||||||||||
Depreciation: | |||||||||||||||||||||||||
Total | 12,430 | 11,845 | 24,871 | 23,532 | |||||||||||||||||||||
Expenditures for segment assets: | |||||||||||||||||||||||||
Total | $ 27,962 | $ 29,978 | $ 46,891 | $ 51,367 | |||||||||||||||||||||
|
Investment in Unconsolidated Entity - Schedule of Unaudited Condensed Financial Statements for the Investment in Unconsolidated Equity (Details) - MVP Joint Venture - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Condensed Consolidated Balance Sheets | |||||
Current assets | $ 1,161,641 | $ 1,161,641 | $ 330,271 | ||
Noncurrent assets | 1,334,266 | 1,334,266 | 747,728 | ||
Total assets | 2,495,907 | 2,495,907 | 1,077,999 | ||
Current liabilities | 290,855 | 290,855 | 65,811 | ||
Equity | 2,205,052 | 2,205,052 | 1,012,188 | ||
Total liabilities and equity | 2,495,907 | 2,495,907 | $ 1,077,999 | ||
Condensed Statements of Consolidated Operations | |||||
Net interest income | 7,732 | $ 2,730 | 13,915 | $ 4,977 | |
AFUDC - equity | 16,307 | 8,503 | 29,489 | 15,656 | |
Net income | $ 24,039 | $ 11,233 | $ 43,404 | $ 20,633 |
Debt - $1 Billion Facility (Details) |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|||
Debt Instrument [Line Items] | |||||||||
Credit facility borrowings | [1] | $ 0 | $ 0 | $ 180,000,000 | |||||
Revolving Credit Facility | $1 Billion Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility borrowings | 0 | 0 | $ 0 | ||||||
Line of Credit | $1 Billion Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | |||||||
Consolidated leverage ratio for certain measurement periods (not more than) | 5.00 | 5.00 | |||||||
Consolidated leverage ratio (not more than) | 5.50 | 5.50 | |||||||
Maximum amount of outstanding short-term loans at any time during the period | $ 338,000,000 | $ 0 | $ 420,000,000 | $ 0 | |||||
Average daily balance of short-term loans outstanding | $ 122,000,000 | $ 211,000,000 | |||||||
Weighted average annual interest rate | 3.40% | 3.20% | |||||||
Scenario, Forecast | Line of Credit | $1 Billion Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 2,000,000,000 | $ 1,000,000,000 | |||||||
|
Debt - 364-Day Facility (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Line of Credit | $1 Billion Credit Facility | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | $ 1,000,000,000 | $ 1,000,000,000 | |||
Maximum amount of outstanding short-term loans at any time during the period | 338,000,000 | $ 0 | 420,000,000 | $ 0 | |
Average daily balance of short-term loans outstanding | $ 122,000,000 | $ 211,000,000 | |||
Weighted average annual interest rate | 3.40% | 3.20% | |||
Revolving Credit Facility | |||||
Short-term Debt [Line Items] | |||||
Basis spread above commitment fee | 0.10% | ||||
Revolving Credit Facility | $500 Million Uncommitted Revolving Loan Agreement | |||||
Short-term Debt [Line Items] | |||||
Line of credit expiration period | 364 days | 364 days | |||
Maximum borrowing capacity | $ 500,000,000 | $ 500,000,000 | |||
Renewal notice period prior to current maturity date | 60 days | ||||
Short-term debt amount outstanding | 0 | $ 0 | $ 0 | ||
Maximum amount of outstanding short-term loans at any time during the period | $ 0 | $ 0 | 100,000,000 | ||
Average daily balance of short-term loans outstanding | $ 55,000,000 | $ 40,000,000 | |||
Weighted average annual interest rate | 2.20% | 2.10% |
Debt - EQM Term Loan Facility (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Apr. 25, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Line of Credit | $2.5 Billion EQM Term Loan Facility | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | $ 2,500,000,000.0 | ||||
Write off of Deferred Debt Issuance Cost | $ 3,000,000 | ||||
Line of credit expiration period | 364 days | ||||
Maximum amount of outstanding short-term loans at any time during the period | $ 1,825,000,000 | ||||
Average daily balance of short-term loans outstanding | 1,231,000,000 | ||||
Weighted average annual interest rate | 3.30% | ||||
Line of Credit | $1 Billion Credit Facility | |||||
Short-term Debt [Line Items] | |||||
Maximum borrowing capacity | $ 1,000,000,000 | 1,000,000,000 | |||
Maximum amount of outstanding short-term loans at any time during the period | 338,000,000 | $ 0 | 420,000,000 | $ 0 | |
Average daily balance of short-term loans outstanding | $ 122,000,000 | $ 211,000,000 | |||
Weighted average annual interest rate | 3.40% | 3.20% |
Debt - 2018 Senior Notes (Details) - Senior Notes |
3 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Debt Instrument [Line Items] | |
Net proceeds from offering | $ 2,465,800,000 |
Discount | 11,800,000 |
Debt issuance costs | $ 22,400,000 |
EQM 4.75% Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 4.75% |
Aggregate principal amount | $ 1,100,000,000 |
EQM 5.50% Senior Notes Due 2028 | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 5.50% |
Aggregate principal amount | $ 850,000,000 |
EQM 6.50% Senior Notes Due 2048 | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 6.50% |
Aggregate principal amount | $ 550,000,000 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
EES | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Value of preferred interest | $ 117 | $ 119 |
Level 3 | EES | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Value of preferred interest | 125 | 133 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of long-term debt | 3,454 | 987 |
Fair Value, Measurements, Recurring | Level 2 | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of long-term debt | $ 3,454 | $ 1,006 |
Distributions (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2018 |
Jul. 24, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
[2] | Jun. 30, 2017 |
[2] | |||||
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Cash distribution to the company's common and subordinated unitholders declared (in dollars per share) | [1] | $ 1.09 | $ 0.935 | $ 2.155 | $ 1.825 | |||||||
Subsequent Event | ||||||||||||
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Cash distribution to the company's common and subordinated unitholders declared (in dollars per share) | $ 1.090 | |||||||||||
Incentive distribution rights | $ 68.1 | |||||||||||
Subsequent Event | Limited Partner | ||||||||||||
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Cash distribution declared to the limited partner | 23.8 | |||||||||||
Subsequent Event | General Partner Units | ||||||||||||
Distribution Made to Limited Partner [Line Items] | ||||||||||||
Cash distribution declared to the general partner | $ 2.4 | |||||||||||
|
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