Financial Information by Business Segment

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Financial Information by Business Segment

Financial Information by Business Segment

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and which are subject to evaluation by the Company’s chief operating decision maker in deciding how to allocate resources.

The Company reports its operations in two segments, which reflect its lines of business.  The EQT Production segment includes the Company’s exploration for, and development and production of, natural gas, natural gas liquids (NGLs) and a limited amount of crude oil in the Appalachian and Permian Basins.  The EQT Midstream segment’s operations include the natural gas gathering, transmission, storage and marketing activities of the Company, including ownership and operation of EQM.

Operating segments are evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and income taxes are managed on a consolidated basis. Headquarters’ costs are billed to the operating segments based upon an allocation of the headquarters’ annual operating budget.  Differences between budget and actual headquarters’ expenses are not allocated to the operating segments.

Substantially all of the Company’s operating revenues, income from operations and assets are generated or located in the United States. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(Thousands)
Revenues from external customers:
EQT Production	$	243,587		$	373,532		$	745,781		$	885,906
EQT Midstream	192,430			162,345			400,656			328,571
Less intersegment revenues, net (a)	(2,843		)	(9,709		)	(4,490		)	(26,684		)
Total	$	433,174		$	526,168		$	1,141,947		$	1,187,793
Operating (loss) income:
EQT Production (b)	$	(66,886	)	$	144,689		$	118,957		$	421,894
EQT Midstream (b)	108,192			88,527			237,931			171,596
Unallocated expenses (c)	(8,272		)	(8,445		)	(9,095		)	(11,928		)
Total operating income	$	33,034		$	224,771		$	347,793		$	581,562

Reconciliation of operating income to income from continuing operations:

Total operating income	$	33,034		$	224,771	$	347,793		$	581,562
Other income	2,689			2,579		3,628			5,130
Interest expense	36,833			31,873		74,049			63,841
Income taxes	(64,857		)	59,089		(7,543		)	175,424
Income from continuing operations	$	63,747		$	136,388	$	284,915		$	347,427

	As of June 30, 2015		As of December 31, 2014
	(Thousands)
Segment assets:
EQT Production	$	8,538,111	$	8,153,199
EQT Midstream	2,989,041		2,709,052
Total operating segments	11,527,152		10,862,251
Headquarters assets, including cash and short-term investments	2,045,178		1,202,649
Total assets	$	13,572,330	$	12,064,900

(a) Eliminates intercompany natural gas sales from EQT Production to EQT Midstream.

(b) Gains on sales / exchanges of assets of $31.0 million and $6.8 million are included in EQT Production and EQT Midstream operating income, respectively, for the three and six months ended June 30, 2014.

(c) Unallocated expenses consist primarily of incentive compensation expense and administrative costs.

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015		2014
	(Thousands)
Depreciation, depletion and amortization:
EQT Production	$	173,331	$	136,251		$	344,794	$	267,490
EQT Midstream	23,393		21,130			46,588		42,139
Other	95		(162		)	182		(299		)
Total	$	196,819	$	157,219		$	391,564	$	309,330
Expenditures for segment assets:
EQT Production (d)	$	520,315	$	932,463		$	1,002,289	$	1,343,547
EQT Midstream	164,542		112,305			237,117		197,224
Other	716		802			1,609		1,362
Total	$	685,573	$	1,045,570		$	1,241,015	$	1,542,133

(d)     Includes $157.3 million of cash capital expenditures and $353.0 million of non-cash capital expenditures for the exchange of assets with Range Resources Corporation (described in Note L) for the three and six months ended June 30, 2014. Expenditures for segment assets in the EQT Production segment include $88.1 million and $550.5 million for property acquisitions during the three months ended June 30, 2015 and 2014, respectively, and $139.1 million and $609.7 million for property acquisitions during the six months ended June 30, 2015 and 2014, respectively.