XML 78 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Share-Based Compensation Plans (Tables)
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of share-based compensation expense
Share-based compensation expense recorded by the Company was as follows:
 
 
Years Ended December 31,
 
 
2018
 
2017
 
2016
 
 
(Thousands)
2014 Executive Performance Incentive Program
 
$
—

 
$
—

 
$
9,494

2015 Executive Performance Incentive Program
 
—

 
5,348

 
12,456

2016 Incentive Performance Share Unit Program
 
6,863

 
13,077

 
7,166

2017 Incentive Performance Share Unit Program
 
2,467

 
5,038

 
—

2018 Incentive Performance Share Unit Program
 
4,742

 
—

 
—

2015 EQT Value Driver Award Program
 
—

 
—

 
3,174

2016 EQT Value Driver Performance Share Unit Award Program
 
—

 
3,341

 
15,694

2017 EQT Value Driver Performance Share Unit Award Program
 
584

 
10,822

 
—

2018 EQT Value Driver Performance Share Unit Award Program
 
8,224

 
—

 
—

Restricted stock awards
 
14,503

 
87,104

 
9,407

Non-qualified stock options
 
2,757

 
2,626

 
3,119

Other programs, including non-employee director awards
 
3,014

 
1,005

 
5,459

Less: Discontinued operations
 
(18,250
)
 
(15,595
)
 
(18,631
)
Total share-based compensation expense
 
$
24,904

 
$
112,766

 
$
47,338
Schedule of details of award types
More detailed information about each award is set forth in the table below:
Incentive PSU Program
Settled In
Accounting Treatment
Fair Value(a)
Risk Free Rate
Vested/Payment Date
Awards Paid
Value
(Millions)
Unvested/Expected Payment Date
Awards Outstanding as of December 31, 2018(b)
2014
Stock
Equity
$
189.68

0.78%
February 2017
238,060

$
45.2

N/A
N/A
2015
Stock
Equity
$
141.11

1.10%
February 2018
274,767

$
38.8

N/A
N/A
2016(c)
Stock
Equity
$
109.30

1.31%
N/A
N/A
N/A
First Quarter of 2019
384,101

2017(d)
Stock
Equity
$
120.60

1.47%
N/A
N/A
N/A
First Quarter of 2020
44,573

2017(e)
Cash
Liability
$
59.90

2.61%
N/A
N/A
N/A
First Quarter of 2020
105,018

2018(f)
Stock
Equity
$
76.53

1.97%
N/A
N/A
N/A
First Quarter of 2021
107,340

2018(g)
Cash
Liability
$
33.30

2.46%
N/A
N/A
N/A
First Quarter of 2021
124,820

 
(a)
Information shown for the valuation of the liability plans is as of December 31, 2018.
(b)
Represents the number of outstanding units as of December 31, 2018 adjusted for forfeitures. The 2016, 2017, and 2018 Incentive PSU Programs to be settled in stock include 130,393, 7,020, and 34,640 shares, respectively, for Equitrans Midstream employees that will be settled by the Company under the Employee Matters Agreement. The 2017 and 2018 Incentive PSU Programs to be settled in cash include 43,134 and 57,240 shares, respectively, for Equitrans Midstream employees that will be settled by the Company under the Employee Matters Agreement.
(c)
As of January 1, 2018, a total of 447,145 units were outstanding under the 2016 Incentive PSU Program. Adjusting for 63,044 forfeitures, there were 384,101 outstanding units as of December 31, 2018.
(d)
As of January 1, 2018, a total of 79,070 units were outstanding under the 2017 Incentive PSU Program - Equity. Adjusting for 34,497 forfeitures, there were 44,573 outstanding units as of December 31, 2018.
(e)
As of January 1, 2018, a total of 117,530 units were outstanding under the 2017 Incentive PSU Program - Liability. Adjusting for 12,512 forfeitures, there were 105,018 total outstanding units as of December 31, 2018.
(f)
A total of 172,350 units were granted under the 2018 Incentive PSU Program - Equity in 2018 and no additional units may be granted. Adjusting for 65,010 forfeitures, there were 107,340 outstanding units as of December 31, 2018.
(g)
A total of 142,890 units were granted under the 2018 Incentive PSU Program - Liability in 2018 and no additional units may be granted. Adjusting for 18,070 forfeitures, there were 124,820 total outstanding units as of December 31, 2018.

More detailed information about each award is set forth in the table below:
EQT VDPSU Program
Settled In
Accounting Treatment
Fair Value per Unit(a)
Vested/Payment Date
Number of awards (including accrued dividends) or cash (Millions) paid
Unvested/Expected Payment Date
Awards Outstanding (including accrued dividends) as of December 31, 2018(d)
2015
Stock
Equity
$
75.70

February 2016
222,751
N/A

N/A
$
75.70

February 2017
208,567
N/A
N/A
2016(b)

Cash
Liability
$
65.40

February 2017
$21.3
N/A

N/A
$
56.92

February 2018
$16.8
N/A
N/A
2017
Cash
Liability
$
56.92

February 2018
$14.0
N/A
N/A
$
18.89

N/A
N/A
Second tranche first quarter of 2019
214,384
2018(c)
Cash
Liability
$
18.89

N/A
N/A
First tranche first quarter of 2019
256,803
N/A
N/A
N/A
Second tranche first quarter of 2020
257,254
(a)
For equity awards, the fair value per unit is equal to the Company's closing common stock price on the business day prior to the grant date. For liability awards, the fair value per unit is equal to the Company's common stock price on the measurement date.
(b)
In addition to the $21.3 million in awards paid in February 2017, $0.2 million in awards were paid in 2017 in accordance with employee separation agreements.
(c)
The total liability recorded for the 2018 EQT VDPSU Program was $1.7 million as of December 31, 2018.
(d)
The 2017 and 2018 EQT VDPSU Programs include 95,452 and 135,345 awards, respectively, for Equitrans Midstream employees that will be settled by the Company under the Employee Matters Agreement.
Schedule of employee service share-based compensation, allocation of recognized period costs
The following table sets forth the total compensation costs capitalized related to each of the VDPSU Programs:
 
 
For the Years Ended December 31,
Award
 
2018
 
2017
 
2016
 
 
(Millions)
2015 EQT VDPSU Program
 
$
—

 
$
—

 
$
4.1

2016 EQT VDPSU Program
 
—

 
7.0

 
16.3

2017 EQT VDPSU Program
 
0.1

 
10.3

 
—

2018 EQT VDPSU Program
 
3.3

 
—

 
—

The following table sets forth the total compensation costs capitalized related to each of the Incentive PSU Programs:
 
 
For the Years Ended December 31,
Award
 
2018
 
2017
 
2016
 
 
(Millions)
2014 Incentive PSU Program
 
$
—

 
$
—

 
$
4.2

2015 Incentive PSU Program
 
—

 
2.2

 
4.9

2016 Incentive PSU Program
 
2.1

 
4.4

 
3.3

2017 Incentive PSU Program (liability only)
 
1.0

 
1.7

 
—

2018 Incentive PSU Program (liability only)
 
0.6

 
—

 
—
Summary of restricted stock awards activity
A summary of restricted stock equity award activity as of December 31, 2018, and changes during the year then ended, is presented below:
Restricted Stock
 
Non-
Vested
Shares(a)
 
Weighted
Average
Fair Value
 
Aggregate
Fair Value
Outstanding at January 1, 2018
 
729,500

 
$
66.86

 
$
48,776,872

Granted
 
145,540

 
54.33

 
7,906,734

Vested
 
(596,888
)
 
66.75

 
(39,843,286
)
Forfeited
 
(85,370
)
 
62.26

 
(5,314,727
)
Outstanding at December 31, 2018
 
192,782

 
$
59.79

 
$
11,525,593


(a) Non-vested shares outstanding at December 31, 2018 included 107,422 shares for Equitrans Midstream employees that will be settled by the Company under the Employee Matters Agreement.
Non-qualified stock options, assumptions used to value share-based compensation
air value is estimated using a Monte Carlo simulation valuation method with the following weighted average assumptions:
 
For Incentive PSU Programs Issued During the Years Ended December 31,
 
2018
 
2018
 
2017
 
2017
 
2016
 
2015
 
2014
Accounting Treatment
Liability(a)
 
Equity
 
Liability(a)
 
Equity
 
Equity
 
Equity
 
Equity
Risk-free rate
2.46%
 
1.97%
 
2.61%
 
1.47%
 
1.31%
 
1.10%
 
0.78%
Dividend Yield(b)
N/A
 
N/A
 
N/A
 
N/A
 
N/A
 
N/A
 
N/A
Volatility factor
35.70%
 
32.60%
 
41.17%
 
32.30%
 
28.43%
 
27.45%
 
31.38%
Expected term
2 years
 
3 years
 
1 year
 
3 years
 
3 years
 
3 years
 
3 years
(a)
Information shown for the valuation of the liability plans is as of December 31, 2018.
(b)
Dividends paid from the beginning of the performance period will be cumulatively added as additional shares of common stock.
The expected term represents the period of time that options granted are expected to be outstanding based on historical option exercise experience.
 
 
For the Years Ended December 31,
 
 
2018
 
2017(a)
 
2016(a)
Risk-free interest rate
 
2.25
%
 
1.95
%
 
1.67
%
Dividend yield
 
0.20
%
 
0.18
%
 
0.16
%
Volatility factor
 
26.46
%
 
27.45
%
 
28.59
%
Expected term
 
5 years

 
5 years

 
5 years

Number of Options Granted
 
287,800

 
153,700

 
228,500

Weighted Average Grant Date Fair Value
 
$
15.39

 
$
17.47

 
$
15.10

Total Intrinsic Value of Options Exercised (millions)
 
$
—

 
$
1.7

 
$
3.5


(a)
There were two grant dates for the 2017 and 2016 options. Amounts represent weighted average.
Summary of option activity
A summary of option activity as of December 31, 2018, and changes during the year then ended, is presented below:
Non-qualified Stock Options
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2018
 
1,129,200

 
$
63.42

 
 
 
 
Granted
 
287,800

 
56.92

 
 
 
 
Exercised
 
—

 
—

 
 
 
 
Forfeited
 
(215,100
)
 
58.14

 
 
 
 
Converted awards granted as a result of Separation
 
573,529

 
31.23

 
 
 
 
Expired
 
—

 
—

 
 
 
 
Outstanding at December 31, 2018
 
1,775,429

 
$
32.43

 
5.57 years
 
$
—

Exercisable at December 31, 2018
 
1,533,452

 
$
32.88

 
5.22 years
 
$
—