Separation and Distribution and Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The results of operations of Equitrans Midstream are summarized below. The Company allocated transaction costs associated with the Separation and Distribution and a portion of transaction costs associated with the Rice Merger (see Note 8) to discontinued operations.

	January 1, 2018 to November 12, 2018			Year Ended December 31, 2017
	(Thousands)
Operating revenues	$	388,854		$	279,422
Transportation and processing	(803,858		)	(604,025		)
Operation and maintenance	99,671			80,833
Selling, general and administrative	62,702			53,275
Depreciation	160,701			106,574
Impairment of goodwill (a)	267,878			—
Transaction costs	93,062			85,124
Amortization of intangible assets	36,007			5,540
Other income	51,014			26,610
Interest expense	88,300			34,801
Income from discontinued operations before income taxes	435,405			543,910
Income tax expense	61,643			72,797
Income from discontinued operations after income taxes	373,762			471,113
Less: Net income from discontinued operations attributable to noncontrolling interests	237,410			349,613
Net income from discontinued operations	$	136,352		$	121,500

(a) Following the third quarter of 2018, and prior to the Separation and Distribution, indicators of goodwill impairment were identified in the form of the announced production curtailments, which could reduce the volumetric-based fee revenues of two reporting units to which the Company's goodwill was recorded. The two reporting units, Rice Retained Midstream and RMP PA Gas Gathering, were allocated to discontinued operations as a result of the Separation and Distribution. Both of these reporting units earned a substantial portion of their revenues from volumetric-based fees, which are sensitive to changes in development plans. In estimating the fair value of these reporting units, a combination of the income approach and the market approach was used. The discounted cash flow method income approach applies significant inputs that are not observable in the public market (Level 3), including estimates and assumptions related to future throughput volumes, operating costs, capital spending and changes in working capital. The comparable company method market approach evaluates the value of a company using metrics of other businesses of similar size and industry. The reference transaction method evaluates the value of a company based on pricing multiples derived from similar transactions entered into by similar companies.

For the year ended December 31, 2018, the fair value of the Rice Retained Midstream reporting unit was greater than its carrying value, but the carrying value of the RMP PA Gas Gathering reporting unit exceeded its fair value. As a result, impairment of goodwill of $267.9 million was recorded with a corresponding decrease to goodwill in the Consolidated Balance Sheet and allocated to discontinued operations.

The following table presents cash flows from or used in discontinued operations related to Equitrans Midstream that are included, and not separately stated, in the Statements of Consolidated Cash Flows for the years ended December 31, 2018 and 2017.

	January 1, 2018 to November 12, 2018			Year Ended December 31, 2017
	(Thousands)
Cash flows from operating activities:
Deferred income tax (benefit) expense	$	(373,405	)	$	43,471
Depreciation	160,701			106,574
Amortization of intangibles	36,007			5,540
Impairment of goodwill	267,878			—
Other income	(51,450		)	(27,281		)
Share-based compensation expense	1,841			468
Cash flows from investing activities:
Capital expenditures	(732,727		)	(380,151		)
Capital contributions to Mountain Valley Pipeline, LLC (a)	(820,943		)	(159,550		)
Cash flows from financing activities:
Proceeds from issuance of debt	2,500,000			—
Increase in borrowings on credit facilities	3,378,500			544,084
Repayment of borrowings on credit facilities	(3,219,500		)	(344,000		)
Debt issuance costs and credit facility origination fees	(40,966		)	(2,257		)
Distributions to noncontrolling interests	(380,651		)	(236,123		)
Contribution to Strike Force Midstream LLC by minority owner, net of distribution	—			6,738
Acquisition of 25% of Strike Force Midstream LLC	(175,000		)	—

(a)

Mountain Valley Pipeline, LLC is a joint venture that is constructing the Mountain Valley Pipeline. EQM owns an interest in the joint venture and makes capital contributions to the joint venture.