Rice Midstream Partners, LP

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Rice Midstream Partners LP

RMP owns, operates and develops midstream assets in the Appalachian Basin. RMP's assets consist of gathering pipelines and compressor stations, as well as water handling and treatment facilities. RMP provides gathering and water services to the Company and third parties. The Company is the ultimate parent company of RMP, and the Company records the noncontrolling interest of the RMP public limited partners in its financial statements.

On January 18, 2018, the Board of Directors of the RMP General Partner declared a cash distribution to RMP’s unitholders for the fourth quarter of 2017 of $0.2917 per common and subordinated unit. The cash distribution was paid on February 14, 2018 to unitholders of record at the close of business on February 2, 2018. Cash distributions by RMP to RMGP were approximately $11.4 million, consisting of $8.4 million in respect of its limited partner interest and $3.0 million in respect of its IDRs in RMP.

On the closing date of the Rice Merger, in connection with the completion of the Rice Merger, RMP, EQT and various other EQT subsidiaries entered into an Amended and Restated Omnibus Agreement, pursuant to which RMP is obligated to reimburse EQT for the provision of general and administrative services for its benefit, for direct expenses incurred by EQT on RMP’s behalf, for expenses allocated to it as a result of being a public entity and for an allocated portion of the compensation expense of the executive officers and other employees of EQT and its affiliates who perform centralized corporate and general and administrative services on substantially the same terms as the original omnibus agreement.

See Note 14 for discussion of RMP's $850 million credit facility.

Equity in Nonconsolidated Investments

The Company, through its ownership interest in EQM, has an ownership interest in the MVP Joint Venture, a nonconsolidated investment that is accounted for under the equity method of accounting. The following table summarizes the Company's equity in the MVP Joint Venture:

Interest

Ownership as of

As of December 31,

Investees

Location

Type

December 31, 2017

2017

2016

(Thousands)

MVP Joint Venture

USA

Joint

45.5%

460,546

184,562

The Company recorded equity income for 2017, 2016 and 2015 related to the MVP Joint Venture of $22.2 million, $9.9 million and $2.6 million, respectively, within other income on the Statements of Consolidated Operations.

In December 2017, the MVP Joint Venture issued a capital call notice to MVP Holdco for $105.7 million, of which $27.2 million was paid in January 2018 and the remaining $78.5 million is expected to be paid in February 2018. The capital contribution payable is recorded in other current liabilities on the Consolidated Balance Sheet as of December 31, 2017 with a corresponding increase to investment in unconsolidated subsidiary.

The MVP Joint Venture has been determined to be a variable interest entity because it has insufficient equity to finance 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, including, but not limited to, decisions with respect to operating and construction budgets, project construction schedule, material contracts or precedent agreements, indebtedness, significant acquisitions or dispositions, material regulatory filings and strategic 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.

On January 21, 2016, affiliates of Consolidated Edison, Inc. (ConEd) acquired a 12.5% interest in the MVP Joint Venture and entered into 20-year firm capacity commitments for approximately 0.25 Bcf per day on both the MVP and EQM’s transmission system (the ConEd Transaction). As a result of the ConEd Transaction, EQM's interest in the MVP Joint Venture decreased by 8.5% to 45.5%, and ConEd reimbursed EQM $12.5 million, which represented EQM's proportional capital contributions to the MVP Joint Venture through the date of the transaction.

As of December 31, 2017, 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 December 31, 2017, EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $551.5 million, which consists of the investment in nonconsolidated entity balance of $460.5 million on the Consolidated Balance Sheet as of December 31, 2017 and amounts which could have become due under EQM's performance guarantee as of that date.