Financial Information by Business Segment



Year Ended December 31, 2017	EQT Production		EQM Gathering		EQM Transmission		RMP Gathering		RMP Water		Intersegment Eliminations			EQT Corporation
	(Thousands)
Revenues:
Sales of natural gas, oil and NGLs	$	2,651,318	$	—	$	—	$	—	$	—	$	—		$	2,651,318
Pipeline, water and net marketing services	64,998		454,536		379,560		30,614		13,605		(606,637		)	336,676
Gain on derivatives not designated as hedges	390,021		—		—		—		—		—			390,021
Total operating revenues	$	3,106,337	$	454,536	$	379,560	$	30,614	$	13,605	$	(606,637	)	$	3,378,015



Year Ended December 31, 2016	EQT Production			EQM Gathering		EQM Transmission		Intersegment Eliminations			EQT Corporation
	(Thousands)
Revenues:
Sales of natural gas, oil and NGLs	$	1,594,997		$	—	$	—	$	—		$	1,594,997
Pipeline and net marketing services	41,048			397,494		338,120		(514,320		)	262,342
Loss on derivatives not designated as hedges	(248,991		)	—		—		—			(248,991		)
Total operating revenues	$	1,387,054		$	397,494	$	338,120	$	(514,320	)	$	1,608,348



Year Ended December 31, 2015	EQT Production		EQM Gathering		EQM Transmission		Intersegment Eliminations			EQT Corporation
	(Thousands)
Revenues:
Sales of natural gas, oil and NGLs	$	1,690,360	$	—	$	—	$	—		$	1,690,360
Pipeline and net marketing services	55,542		335,105		297,831		(424,838		)	263,640
Gain on derivatives not designated as hedges	385,762		—		—		—			385,762
Total operating revenues	$	2,131,664	$	335,105	$	297,831	$	(424,838	)	$	2,339,762



	Years Ended December 31,
	2017			2016			2015
				(Thousands)
Operating income (loss):
EQT Production (a)	$	589,716		$	(719,731	)	$	132,008
EQM Gathering	333,563			289,027			243,257
EQM Transmission	247,145			237,922			207,779
RMP Gathering (b)	21,800			—			—
RMP Water (b)	4,145			—			—
Unallocated expenses (c)	(263,388		)	(85,518		)	(19,905		)
Total operating income (loss)	$	932,981		$	(278,300	)	$	563,139

Reconciliation of operating income (loss) to net income (loss):
Total operating income (loss)	$	932,981		$	(278,300	)	$	563,139
Other income	24,955			31,693			9,953
Loss on debt extinguishment	12,641			—			—
Interest expense	202,772			147,920			146,531
Income tax (benefit) expense	(1,115,619		)	(263,464		)	104,675
Net income (loss)	$	1,858,142		$	(131,063	)	$	321,886

(a)

For the year ended December 31, 2017, the operating income for EQT Production includes the results of operations for the production operations and retained midstream operations acquired in the Rice Merger for the period of November 13, 2017 through December 31, 2017. See Note 2 for a discussion of the Rice Merger. Gains on sales / exchanges of assets of $8.0 million are included in EQT Production operating income for 2016. See Note 9. Impairment of long-lived assets of $6.9 million and $122.5 million are included in EQT Production operating income for 2016 and 2015, respectively. See Note 1 for a discussion of impairment of long-lived assets.


(b)	Operating income for RMP Gathering and RMP Water, both acquired in the Rice Merger, includes the results of operations for the period of November 13, 2017 through December 31, 2017. See Note 2 for a discussion of the Rice Merger.


(c)	Unallocated expenses generally include incentive compensation expense and administrative costs. In addition, 2017 includes $237.3 million of Rice Merger related expenses and 2016 includes a $59.7 million impairment on gathering assets prior to the sale to EQM.



	As of December 31,
	2017		2016		2015
	(Thousands)
Segment assets:
EQT Production	$	22,711,854	$	10,923,824	$	9,905,344
EQM Gathering	1,411,857		1,225,686		1,019,004
EQM Transmission	1,462,881		1,399,201		1,169,517
RMP Gathering	2,720,305		—		—
RMP Water	185,079		—		—
Total operating segments	28,491,976		13,548,711		12,093,865
Headquarters assets, including cash and short-term investments	1,030,628		1,924,211		1,882,307
Total assets	$	29,522,604	$	15,472,922	$	13,976,172



	Years Ended December 31,
	2017			2016		2015
				(Thousands)
Depreciation, depletion and amortization: (d)
EQT Production (e)	$	982,103		$	859,018	$	765,298
EQM Gathering	38,796			30,422		24,360
EQM Transmission (g)	58,689			32,269		25,535
RMP Gathering (f)	3,965			—		—
RMP Water (f)	3,515			—		—
Other (g)	(9,509		)	6,211		4,023
Total	$	1,077,559		$	927,920	$	819,216

Expenditures for segment assets: (h)
EQT Production (e) (i)	$	2,430,094		$	2,073,907	$	1,893,750
EQM Gathering	196,871			295,315		225,537
EQM Transmission	111,102			292,049		203,706
RMP Gathering (f) (j)	28,320			—		—
RMP Water (f) (j)	6,233			—		—
Other	6,080			7,002		21,421
Total	$	2,778,700		$	2,668,273	$	2,344,414

(d) Excludes amortization of intangible assets.


(e)	For the year ended December 31, 2017, depreciation, depletion and amortization expense and expenditures for segment assets for EQT Production includes activity for the production operations and retained midstream operations acquired in the Rice Merger for the period of November 13, 2017 through December 31, 2017. See Note 2 for a discussion of the Rice Merger.


(f)	Depreciation, depletion and amortization expense and expenditures for segment assets for RMP Gathering and RMP Water, both acquired in the Rice Merger, includes activity for the period of November 13, 2017 through December 31, 2017. See Note 2 for a discussion of the Rice Merger.

(g)

Depreciation, depletion and amortization expense for EQM Transmission includes a non-cash charge of $10.5 million related to the revaluation of differences between the regulatory and tax bases in EQM's regulated property, plant and equipment. For purposes of consolidated reporting at EQT, the $10.5 million is recorded to income tax expense. This reclass is shown as a reduction of other depreciation, depletion and amortization expense.

(h)

Includes the capitalized portion of non-cash stock-based compensation costs, non-cash acquisitions and the impact of capital accruals. These non-cash items are excluded from capital expenditures on the statements of consolidated cash flows. The net impact of these non-cash items was $9.1 million, $76.5 million and $(89.6) million for the years ended December 31, 2017, 2016 and 2015, respectively. The impact of accrued capital expenditures includes the reversal of the prior period accrual as well as the current period estimate, both of which are non-cash items. The year ended December 31, 2017 included $10.0 million of non-cash capital expenditures related to 2017 acquisitions and $(14.3) million of measurement period adjustments for 2016 acquisitions. The year ended December 31, 2016 included $87.6 million of non-cash capital expenditures related to 2016 acquisitions. See Note 10 for discussion of the 2017 and 2016 acquisitions. Expenditures for segment assets does not include consideration for the Rice Merger.

(i) Expenditures for segment assets in the EQT Production segment included $1,006.7 million, $1,284.0 million and $182.3 million for property acquisitions in 2017, 2016 and 2015, respectively. Included in the $1,006.7 million of property acquisitions for the year ended December 31, 2017 was $819.0 million of cash capital expenditures and $10.0 million of non-cash capital expenditures related to 2017 acquisitions and $(14.3) million of measurement period adjustments for 2016 acquisitions (see Note 10). Included in the $1,284.0 million of property acquisitions for the year ended December 31, 2016 was $1,051.2 million of capital expenditures and $87.6 million of non-cash capital expenditures for acquisitions (see Note 10).


(j)	Expenditures for segment assets in the RMP Gathering and RMP Water segments included $17.1 million in cash paid by EQT for capital expenditures accrued as of the opening balance sheet date of the Rice Merger.