[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
(State or other jurisdiction of incorporation or organization)
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania
(Address of principal executive offices)
|
37-1661577
(IRS Employer Identification No.)
15222
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Units Representing Limited Partner Interests
|
|
New York Stock Exchange
|
|
Large accelerated filer
x
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
||
|
||
PART I
|
||
Item 1
|
||
Item 1A
|
||
Item 1B
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
PART II
|
||
Item 5
|
||
Item 6
|
||
Item 7
|
||
Item 7A
|
||
Item 8
|
||
Item 9
|
||
Item 9A
|
||
Item 9B
|
||
PART III
|
||
Item 10
|
||
Item 11
|
||
Item 12
|
||
Item 13
|
||
Item 14
|
||
PART IV
|
||
Item 15
|
||
|
||
|
||
|
Abbreviations
|
ASC
– Accounting Standards Codification
|
CERCLA
– Comprehensive Environmental Response, Compensation and Liability Act
|
DOT
– U.S. Department of Transportation
|
FASB
–
Financial Accounting Standards Board
|
FERC
– Federal Energy Regulatory Commission
|
GAAP
– United States Generally Accepted Accounting Principles
|
IPO
– Initial Public Offering
|
IRS
– Internal Revenue Service
|
NGA
–
Natural Gas Act of 1938
|
NGPA
– Natural Gas Policy Act of 1978
|
NYMEX
– New York Mercantile Exchange
|
NYSE
– New York Stock Exchange
|
PHMSA
– Pipeline and Hazardous Materials Safety Administration of the DOT
|
RCRA
–
the Resource Conservation and Recovery Act
|
SEC
– Securities and Exchange Commission
|
Measurements
|
Btu
= one British thermal unit
|
BBtu
= billion British thermal units
|
Bcf
= billion cubic feet
|
Bcfe
= billion cubic feet of natural gas equivalents, with one barrel of natural gas liquids (NGLs) and crude oil being equivalent to 6,000 cubic feet of natural gas
|
Dth
= dekatherm or million British thermal units
|
MMBtu
= million British thermal units
|
Mcf
= thousand cubic feet
|
MMcf
= million cubic feet
|
Tcfe
= trillion cubic feet of natural gas equivalents, with one barrel of NGLs and crude oil being equivalent to 6,000 cubic feet of natural gas
|
•
|
October 2016 Acquisition
. Effective October 1, 2016, EQM acquired from EQT 100% of the outstanding limited liability company interests of AVC and Rager as well as the Gathering Assets. The Allegheny Valley Connector, or the AVC facilities, includes an approximately 200-mile FERC-regulated transmission pipeline with 11 Bcf of working gas storage capacity and 450 MMcf per day of transmission capacity which is fully contracted for the winter season by an LDC through a firm reservation commitment that expires in 2034. Prior to EQM's acquisition of AVC, it operated the AVC facilities through a lease agreement with EQT. The Gathering Assets include approximately 90 miles of gathering pipeline and provide 235 MMcf per day of firm gathering capacity as of December 31, 2016. The aggregate consideration paid by EQM to EQT was $275 million.
|
•
|
Ohio Valley Connector (OVC) Project
. The OVC began service on October 1, 2016. This 37-mile pipeline extends EQM's transmission and storage system from northern West Virginia to Clarington, Ohio, at which point it interconnects with the Rockies Express Pipeline. The OVC is certificated to provide approximately 850 BBtu per
|
•
|
Range Resources Corporation's (Range Resources) Header Pipeline Project
. EQM is constructing a natural gas header pipeline for a subsidiary of Range Resources in southwestern Pennsylvania to support Marcellus development. In the fourth quarter of 2016, phase one of the Range Resources Header Pipeline project was placed into service which added 75 MMcf per day of firm gathering capacity.
|
•
|
Senior Notes Offering
. During the fourth quarter of 2016, EQM issued $500 million of 4.125% Senior Notes due 2026. Net proceeds from the offering of approximately
$491.4 million
were used to repay the outstanding borrowings under EQM’s credit facility and for general partnership purposes.
|
•
|
ATM Offerings
. During the second quarter of 2016, EQM issued
2,949,309
common units at an average price per unit of
$74.42
under the $750 Million ATM Program. EQM received net proceeds of approximately
$217.1 million
which were used for general partnership purposes.
|
System
|
|
Approximate Number of Miles
|
|
Approximate Number of Receipt Points
|
|
Approximate Compression (Horsepower)
|
Gathering
|
|
1,800
|
|
2,250
|
|
146,000
|
Transmission and storage
|
|
950
|
|
150
|
|
120,000
|
•
|
Range Resources Header Pipeline
. EQM expects to complete this project in the second quarter of 2017, including the installation of approximately 25 miles of pipeline and 32,000 horsepower compression. The pipeline is estimated to cost approximately $250 million and provide total firm capacity of 600 MMcf per day, which is fully reserved under a ten-year firm capacity reservation commitment contract. EQM expects to invest approximately $40 million on the project in
2017
.
|
•
|
Affiliate Gathering Expansion
. EQM expects to invest $200 million to $230 million in
2017
on gathering expansion projects supported by EQT Production development in the Marcellus. EQM plans to install approximately 30 miles of gathering pipeline and 10,000 horsepower compression in its gathering systems across northern West Virginia and southwestern Pennsylvania during
2017
.
|
•
|
Mountain Valley Pipeline
. The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a
45.5%
interest in the MVP Joint Venture as of
December 31, 2016
. The 42 inch diameter MVP has a targeted capacity of 2.0 Bcf per day and is estimated to span 300-miles extending from EQM's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia. As currently designed, the MVP is estimated to cost a total of $3.0 billion to $3.5 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the joint venture. In 2017, EQM expects to provide capital contributions of $200 million to $500 million to the MVP Joint Venture, primarily in support of materials, land, engineering design, environmental work and construction activities. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms, including a 1.29 Bcf per day firm capacity commitment by EQT, and is currently in negotiation with additional shippers who have expressed interest in the MVP project. The FERC issued the Draft Environmental Impact Statement for the project in September 2016 and is currently working to develop the Final Environmental Impact Statement. The pipeline is targeted to be placed in-service during the fourth quarter of 2018.
|
•
|
Transmission Expansion
. EQM plans to invest $60 million to $80 million on transmission expansion projects in
2017
including Equitrans expansion projects and modernization projects on the AVC facilities. The Equitrans expansion projects are designed to increase deliverable capacity to EQM's Mobley hub, which is the origin of both the OVC and the MVP. The projects include additional compression, pipeline looping and new header pipelines. In total, the projects are expected to add up to 1.5 Bcf per day of capacity by the end of 2018, consistent with the target MVP in-service date. The AVC modernization project primarily consists of the replacement of approximately 20 miles of pipeline.
|
|
|
Revenue Composition %
|
||||||
|
|
Firm Contracts
|
|
Interruptible Contracts
|
|
|
||
|
|
Capacity
Reservation
|
|
Usage
|
|
Usage
|
|
|
|
|
Charges
|
|
Charges
|
|
Fees
|
|
Total
|
Gathering
|
|
46%
|
|
5%
|
|
3%
|
|
54%
|
Transmission
|
|
38%
|
|
6%
|
|
2%
|
|
46%
|
•
|
Capitalizing on economically attractive organic growth opportunities.
EQM believes that organic projects will be a key driver of growth in the future. EQM expects to grow its systems over time by meeting EQT’s and third party customers’ midstream service needs that result from their drilling activity in EQM’s areas of operations. EQT’s acreage dedication to EQM’s assets and EQT’s economic relationship with EQM provide a platform for organic growth. In addition, EQM intends to leverage EQT’s knowledge of, and expertise in, the Marcellus, Upper Devonian and Utica Shales in order to target and efficiently execute economically attractive organic growth projects for third party customers, although EQT is under no obligation to share such knowledge and expertise with EQM. EQM will evaluate organic expansion and greenfield construction opportunities in existing and new markets that it believes will increase the volume of gathering, transmission and storage capacity subscribed on its systems. As production increases in EQM's areas of operations, EQM believes that it will have a competitive advantage in pursuing economically attractive organic expansion projects.
|
•
|
Increasing access to existing and new delivery markets.
EQM is actively working to increase delivery interconnects with interstate pipelines, neighboring LDCs, large industrial facilities and electric generation plants in order to increase access to existing and new markets for natural gas consumption. In 2015, EQM began several multi-year transmission expansion projects to support Marcellus, Upper Devonian and Utica Shale development, including the OVC which was placed in-service during the fourth quarter of 2016. Upon completion of the other transmission expansion projects, EQM's transmission capacity is expected to exceed 5.0 Bcf per day by year-end 2018. Additionally, the MVP is expected to have at least 2.0 Bcf per day of capacity when it is complete.
|
•
|
Attracting additional third party volumes.
EQM actively markets its midstream services to, and pursues strategic relationships with, third party producers in order to attract additional volumes and/or expansion opportunities. EQM believes that its connectivity to interstate pipelines as well as its position as an early developer of midstream infrastructure within certain areas of the Marcellus, Upper Devonian and Utica Shales, will allow EQM to capture additional third party volumes in the future.
|
•
|
Focusing on stable, fixed-fee business.
EQM intends to pursue additional opportunities to provide fixed-fee gathering, transmission and storage services to EQT and third parties. This contract structure enhances the stability of EQM’s cash flows and limits its direct exposure to commodity price risk. EQM will focus on obtaining additional long-term firm commitments from customers, which may include reservation-based fees, volume commitments and acreage dedications.
|
•
|
EQT is a leader among exploration and production companies in the Appalachian Basin.
A substantial portion of EQT’s drilling efforts in recent years were focused on drilling horizontal wells in the Marcellus Shale formations of southwestern Pennsylvania and northern West Virginia. For the year ended
December 31, 2016
, EQT reported total production sales volumes of
759.0
Bcfe, representing a
26%
increase compared to the year ended
December 31, 2015
. Approximately
87%
of EQT’s total production in
2016
was from wells in the Marcellus Shale. EQT's Marcellus sales volumes were
31%
higher for the year ended
December 31, 2016
as compared to the year ended
December 31, 2015
.
|
•
|
EQT production growth supports EQM's development of organic expansion projects
. EQT continues to expand its exploration and production operations in the Appalachian Basin, primarily in the Marcellus, Upper Devonian and Utica Shales. As this expansion increases into areas that are currently underserved by midstream infrastructure, EQM expects it will have a competitive advantage in pursuing economically attractive organic expansion projects, which EQM believes will be a key driver of growth in the future.
|
•
|
requiring the acquisition of various permits to conduct regulated activities;
|
•
|
requiring the installation of pollution-control equipment or otherwise restricting the way EQM can handle or dispose of its wastes;
|
•
|
limiting or prohibiting construction activities in sensitive areas, such as wetlands, coastal regions or areas inhabited by endangered or threatened species; and
|
•
|
requiring investigatory and remedial actions to mitigate or eliminate pollution conditions caused by EQM’s operations or attributable to former operations.
|
|
|
For the year ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Gathering operating revenues
|
|
54
|
%
|
|
53
|
%
|
|
48
|
%
|
Transmission operating revenues
|
|
46
|
%
|
|
47
|
%
|
|
52
|
%
|
•
|
natural gas price volatility or a sustained period of lower commodity prices may have an adverse effect on EQT's drilling operations, revenue, profitability, future rate of growth and liquidity;
|
•
|
a reduction in or slowing of EQT's anticipated drilling and production schedule, which would directly and adversely impact demand for our services;
|
•
|
infrastructure capacity constraints and interruptions;
|
•
|
risks associated with the operation of EQT's wells, pipelines and facilities, including potential environmental liabilities;
|
•
|
the availability of capital on a satisfactory economic basis to fund EQT's operations;
|
•
|
EQT's ability to identify exploration, development and production opportunities based on market conditions;
|
•
|
uncertainties inherent in projecting future rates of production;
|
•
|
EQT's ability to develop additional reserves that are economically recoverable, to optimize existing well production and to sustain production;
|
•
|
adverse effects of governmental and environmental regulation and negative public perception regarding EQT's operations;
|
•
|
the loss of key personnel; and
|
•
|
risk associated with cyber security threats.
|
•
|
the rates we charge for our gathering, transmission and storage services;
|
•
|
the level of firm gathering, transmission and storage capacity sold and volumes of natural gas we gather, transport and store for our customers;
|
•
|
regional, domestic and foreign supply and perceptions of supply of natural gas; the level of demand and perceptions of demand in our end-use markets; and actual and anticipated future prices of natural gas and other commodities (and the volatility thereof), which may impact our ability to renew and replace firm gathering, transmission and storage agreements;
|
•
|
the effect of seasonal variations in temperature on the amount of natural gas that we gather, transport and store;
|
•
|
the level of competition from other midstream energy companies in our geographic markets;
|
•
|
the creditworthiness of our customers;
|
•
|
restrictions contained in our joint venture agreements;
|
•
|
the level of our operating, maintenance and general and administrative costs;
|
•
|
regulatory action affecting the supply of, or demand for, natural gas, the rates we can charge on our assets, how we contract for services, our existing contracts, our operating costs or our operating flexibility; and
|
•
|
prevailing economic conditions.
|
•
|
the level and timing of capital expenditures we make;
|
•
|
the level of our operating and general and administrative expenses, including reimbursements to our general partner and its affiliates, including EQT, for services provided to us;
|
•
|
the cost of acquisitions, if any;
|
•
|
our debt service requirements and other liabilities;
|
•
|
fluctuations in our working capital needs;
|
•
|
our ability to borrow funds and access capital markets on satisfactory terms;
|
•
|
restrictions on distributions contained in our debt agreements;
|
•
|
the amount of cash reserves established by our general partner; and
|
•
|
other business risks affecting our cash levels.
|
•
|
rates and charges for our natural gas transmission and storage and FERC-regulated gathering services;
|
•
|
certification and construction of new interstate transmission and storage facilities;
|
•
|
abandonment of interstate transmission and storage services and facilities;
|
•
|
maintenance of accounts and records;
|
•
|
relationships between pipelines and certain affiliates;
|
•
|
terms and conditions of services and service contracts with customers;
|
•
|
depreciation and amortization policies;
|
•
|
acquisitions and dispositions of interstate transmission and storage facilities; and
|
•
|
initiation and discontinuation of interstate transmission and storage services.
|
•
|
the level of existing and new competition to provide services to our markets;
|
•
|
the macroeconomic factors affecting natural gas economics for our current and potential customers;
|
•
|
the balance of supply and demand, on a short-term, seasonal and long-term basis, in our markets;
|
•
|
the extent to which the customers in our markets are willing to contract on a long-term basis; and
|
•
|
the effects of federal, state or local regulations on the contracting practices of our customers.
|
•
|
an inability to identify attractive expansion projects;
|
•
|
an inability to obtain necessary rights-of-way or permits or other government approvals, including approvals by regulatory agencies;
|
•
|
an inability to successfully integrate the infrastructure we build;
|
•
|
an inability to raise financing for expansion projects on economically acceptable terms;
|
•
|
incorrect assumptions about volumes, revenues and costs, including potential growth; or
|
•
|
an inability to secure adequate customer commitments to use the newly expanded facilities.
|
•
|
mistaken assumptions about volumes, revenues and costs, including synergies and potential growth;
|
•
|
an inability to secure adequate customer commitments to use the acquired systems or facilities;
|
•
|
an inability to integrate successfully the assets or businesses we acquire;
|
•
|
the assumption of unknown liabilities for which we are not indemnified or for which our indemnity is inadequate;
|
•
|
the diversion of management’s and employees’ attention from other business concerns; and
|
•
|
unforeseen difficulties operating in new geographic areas or business lines.
|
•
|
damage to pipelines, facilities, equipment and surrounding properties caused by hurricanes, earthquakes, tornadoes, floods, fires and other natural disasters and acts of terrorism;
|
•
|
inadvertent damage from construction, vehicles, and farm and utility equipment;
|
•
|
uncontrolled releases of natural gas and other hydrocarbons;
|
•
|
leaks, migrations or losses of natural gas as a result of the malfunction of equipment or facilities and, with respect to storage assets, as a result of undefined boundaries, geologic anomalies, natural pressure migration and wellbore migration;
|
•
|
ruptures, fires and explosions;
|
•
|
pipeline freeze offs due to cold weather; and
|
•
|
other hazards that could also result in personal injury and loss of life, pollution to the environment and suspension of operations.
|
•
|
perform ongoing assessments of pipeline integrity;
|
•
|
identify and characterize applicable threats to pipeline segments that could impact a high consequence area;
|
•
|
maintain processes for data collection, integration and analysis;
|
•
|
repair and remediate pipelines as necessary; and
|
•
|
implement preventive and mitigating actions.
|
•
|
incur or guarantee additional debt;
|
•
|
make distributions on or redeem or repurchase units;
|
•
|
make certain investments and acquisitions;
|
•
|
incur certain liens or permit them to exist;
|
•
|
enter into certain types of transactions with affiliates;
|
•
|
merge or consolidate with another company; and
|
•
|
transfer, sell or otherwise dispose of assets.
|
•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;
|
•
|
our funds available for operations, future business opportunities and distributions to unitholders will be reduced by that portion of our cash flow required to make interest payments on our debt;
|
•
|
we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
|
•
|
our flexibility in responding to changing business and economic conditions may be limited.
|
•
|
Neither our partnership agreement nor any other agreement requires EQT to pursue a business strategy that favors us, and the directors and officers of EQT have a fiduciary duty to make these decisions in the best interests of EQT, which may be contrary to our interests. EQT may choose to shift the focus of its investment and growth to areas not served by our assets.
|
•
|
EQT, as our primary customer, has an economic incentive to cause us not to seek higher gathering fees or tariff rates, even if such higher fees or rates would reflect fees and rates that could be obtained in arm’s length, third party transactions.
|
•
|
EQT is not limited in its ability to compete with us and may offer business opportunities or sell midstream assets to third parties without first offering us the right to bid for them.
|
•
|
Our general partner is allowed to take into account the interests of parties other than us, such as EQT, in resolving conflicts of interest, which has the effect of limiting its state law fiduciary duty to our unitholders.
|
•
|
All of the officers and four of the directors of our general partner are also officers and/or directors of EQT and owe fiduciary duties to EQT, and three of the officers and four of the directors of our general partner are also officers and/or directors of EQGP’s general partner and owe fiduciary duties to us. The officers of our general partner also devote significant time to the business of EQT and EQM and are compensated by EQT accordingly.
|
•
|
Our general partner determines whether or not we incur debt and that decision may affect our credit ratings.
|
•
|
Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limits our general partner’s liabilities and restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty under state law.
|
•
|
Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.
|
•
|
Our general partner controls the enforcement of the obligations that it and its affiliates owe to us, including EQT’s obligations under our omnibus agreement with EQT and EQT’s commercial agreements with us.
|
•
|
Disputes may arise under our commercial agreements with EQT and its affiliates.
|
•
|
Our partnership agreement gives our general partner broad discretion in establishing financial reserves for the proper conduct of our business. These reserves will affect the amount of cash available for distribution to our unitholders.
|
•
|
Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reduction or increase of reserves, each of which can affect the amount of cash available for distribution to our unitholders.
|
•
|
Our general partner determines the amount and timing of any capital expenditures and, in accordance with the terms of our partnership agreement, whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion or investment capital expenditure, which does not reduce operating surplus. These determinations can affect the amount of cash that is distributed to our unitholders.
|
•
|
Our general partner determines which costs incurred by it and its affiliates are reimbursable by us.
|
•
|
Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions.
|
•
|
Our partnership agreement permits us to classify up to $30 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions to our general partner in respect of the general partner interest or the IDRs.
|
•
|
Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.
|
•
|
Our general partner intends to limit its liability regarding our contractual and other obligations.
|
•
|
Our general partner may exercise its right to call and purchase all of our common units not owned by it and its affiliates if they own more than 80% of the common units.
|
•
|
Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.
|
•
|
Our general partner may transfer the IDRs without unitholder approval.
|
•
|
Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s IDRs without the approval of the conflicts committee of the board of directors of our general partner or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
|
•
|
how to allocate corporate opportunities among us and its affiliates;
|
•
|
whether to exercise its limited call right;
|
•
|
whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner;
|
•
|
how to exercise its voting rights with respect to the units it owns;
|
•
|
whether to elect to reset target distribution levels;
|
•
|
whether to transfer the IDRs or any units it owns to a third party; and
|
•
|
whether or not to consent to any merger, consolidation or conversion of the partnership or amendment to our partnership agreement.
|
•
|
whenever our general partner, the board of directors of our general partner or any committee thereof (including the conflicts committee) makes a determination or takes, or declines to take, any other action in their respective capacities, our general partner, the board of directors of our general partner and any committee thereof (including the conflicts committee), as applicable, is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the decision was in the best interests of our
|
•
|
our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;
|
•
|
our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and
|
•
|
our general partner will not be in breach of its obligations under our partnership agreement (including any duties to us or our unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:
|
◦
|
approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval;
|
◦
|
approved by the vote of a majority of our outstanding common units, excluding any common units owned by our general partner and its affiliates;
|
◦
|
determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
|
◦
|
determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|
•
|
our existing unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of distributable cash flow on each unit may decrease;
|
•
|
because the amount payable to holders of IDRs is based on a percentage of the total distributable cash flow, the distributions to holders of IDRs will increase even if the per unit distribution on common units remains the same;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of the common units may decline.
|
•
|
we were conducting business in a state but had not complied with that particular state’s partnership statute; or
|
•
|
such unitholder's right to act with other unitholders to remove or replace our general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitutes “control” of our business.
|
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
Unit Price Range
|
|
Distributions
|
|
Unit Price Range
|
|
Distributions
|
||||||||||||||||
|
|
|
|
|
|
per Common
|
|
|
|
|
|
per Common
|
||||||||||||
|
|
High
|
|
Low
|
|
Unit
|
|
High
|
|
Low
|
|
Unit
|
||||||||||||
1st Quarter
|
|
$
|
77.70
|
|
|
$
|
57.88
|
|
|
$
|
0.71
|
|
|
$
|
92.09
|
|
|
$
|
73.94
|
|
|
$
|
0.58
|
|
2nd Quarter
|
|
80.63
|
|
|
69.22
|
|
|
0.745
|
|
|
89.47
|
|
|
76.69
|
|
|
0.61
|
|
||||||
3rd Quarter
|
|
80.58
|
|
|
74.49
|
|
|
0.78
|
|
|
83.68
|
|
|
59.21
|
|
|
0.64
|
|
||||||
4th Quarter
|
|
$
|
78.78
|
|
|
$
|
69.20
|
|
|
$
|
0.815
|
|
|
$
|
79.10
|
|
|
$
|
56.52
|
|
|
$
|
0.675
|
|
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statements of Consolidated Operations
|
|
|
|
(Thousands, except per share amounts)
|
|
|
||||||||||||||
Operating revenues
|
|
$
|
735,614
|
|
|
$
|
632,936
|
|
|
$
|
489,218
|
|
|
$
|
362,810
|
|
|
$
|
244,780
|
|
Operating income
|
|
526,949
|
|
|
451,036
|
|
|
332,595
|
|
|
248,628
|
|
|
154,191
|
|
|||||
Net income
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
|
$
|
191,653
|
|
|
$
|
112,634
|
|
Net income per limited partner unit
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
5.21
|
|
|
$
|
4.71
|
|
|
$
|
3.53
|
|
|
$
|
2.47
|
|
|
$
|
1.03
|
|
Diluted
|
|
5.21
|
|
|
4.70
|
|
|
3.52
|
|
|
2.46
|
|
|
1.03
|
|
|||||
Cash distributions paid per limited partner unit
|
|
$
|
3.050
|
|
|
$
|
2.505
|
|
|
$
|
2.02
|
|
|
$
|
1.55
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
$
|
1,943,366
|
|
|
$
|
1,437,680
|
|
|
$
|
1,033,324
|
|
Long-term debt
|
|
$
|
985,732
|
|
|
$
|
493,401
|
|
|
$
|
492,633
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Net income attributable to AVC, Rager and the Gathering Assets for periods prior to October 1, 2016, net income attributable to NWV Gathering for periods prior to March 17, 2015, net income attributable to Jupiter for periods prior to May 7, 2014, net income attributable to Sunrise for periods prior to July 22, 2013 and net income attributable to periods prior to the IPO were not allocated to the limited partners for purposes of calculating net income per limited partner unit. See Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K for further discussion.
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
%
change 2016 – 2015 |
|
2014
|
|
%
change 2015 - 2014 |
||||||||
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
||||||||||||||||
Firm reservation fee revenues
|
|
$
|
339,237
|
|
|
$
|
267,517
|
|
|
26.8
|
|
|
$
|
37,449
|
|
|
614.4
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Usage fees under firm contracts
(a)
|
|
38,408
|
|
|
33,021
|
|
|
16.3
|
|
|
44,594
|
|
|
(26.0
|
)
|
|||
Usage fees under interruptible contracts
|
|
19,849
|
|
|
34,567
|
|
|
(42.6
|
)
|
|
151,902
|
|
|
(77.2
|
)
|
|||
Total volumetric based fee revenues
|
|
58,257
|
|
|
67,588
|
|
|
(13.8
|
)
|
|
196,496
|
|
|
(65.6
|
)
|
|||
Total operating revenues
|
|
397,494
|
|
|
335,105
|
|
|
18.6
|
|
|
233,945
|
|
|
43.2
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating and maintenance
|
|
38,367
|
|
|
37,011
|
|
|
3.7
|
|
|
31,576
|
|
|
17.2
|
|
|||
Selling, general and administrative
|
|
39,678
|
|
|
30,477
|
|
|
30.2
|
|
|
30,966
|
|
|
(1.6
|
)
|
|||
Depreciation and amortization
|
|
30,422
|
|
|
24,360
|
|
|
24.9
|
|
|
23,977
|
|
|
1.6
|
|
|||
Total operating expenses
|
|
108,467
|
|
|
91,848
|
|
|
18.1
|
|
|
86,519
|
|
|
6.2
|
|
|||
Operating income
|
|
$
|
289,027
|
|
|
$
|
243,257
|
|
|
18.8
|
|
|
$
|
147,426
|
|
|
65.0
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Gathering volumes (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Firm capacity reservation
|
|
1,553
|
|
|
1,140
|
|
|
36.2
|
|
|
180
|
|
|
533.3
|
|
|||
Volumetric based services
(b)
|
|
420
|
|
|
485
|
|
|
(13.4
|
)
|
|
1,063
|
|
|
(54.4
|
)
|
|||
Total gathered volumes
|
|
1,973
|
|
|
1,625
|
|
|
21.4
|
|
|
1,243
|
|
|
30.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
$
|
295,315
|
|
|
$
|
225,537
|
|
|
30.9
|
|
|
$
|
253,638
|
|
|
(11.1
|
)
|
(a)
|
Includes fees on volumes gathered in excess of firm contracted capacity.
|
(b)
|
Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity.
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
%
change 2016 – 2015 |
|
2014
|
|
%
change 2015 - 2014 |
||||||||
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
||||||||||||||||
Firm reservation fee revenues
|
|
$
|
277,816
|
|
|
$
|
247,231
|
|
|
12.4
|
|
|
$
|
202,112
|
|
|
22.3
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Usage fees under firm contracts
(a)
|
|
45,679
|
|
|
42,646
|
|
|
7.1
|
|
|
41,828
|
|
|
2.0
|
|
|||
Usage fees under interruptible contracts
|
|
14,625
|
|
|
7,954
|
|
|
83.9
|
|
|
11,333
|
|
|
(29.8
|
)
|
|||
Total volumetric based fee revenues
|
|
60,304
|
|
|
50,600
|
|
|
19.2
|
|
|
53,161
|
|
|
(4.8
|
)
|
|||
Total operating revenues
|
|
338,120
|
|
|
297,831
|
|
|
13.5
|
|
|
255,273
|
|
|
16.7
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating and maintenance
|
|
34,846
|
|
|
33,092
|
|
|
5.3
|
|
|
24,837
|
|
|
33.2
|
|
|||
Selling, general and administrative
|
|
33,083
|
|
|
31,425
|
|
|
5.3
|
|
|
20,183
|
|
|
55.7
|
|
|||
Depreciation and amortization
|
|
32,269
|
|
|
25,535
|
|
|
26.4
|
|
|
25,084
|
|
|
1.8
|
|
|||
Total operating expenses
|
|
100,198
|
|
|
90,052
|
|
|
11.3
|
|
|
70,104
|
|
|
28.5
|
|
|||
Operating income
|
|
$
|
237,922
|
|
|
$
|
207,779
|
|
|
14.5
|
|
|
$
|
185,169
|
|
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Firm capacity reservation
|
|
1,651
|
|
|
1,841
|
|
|
(10.3
|
)
|
|
1,405
|
|
|
31.0
|
|
|||
Volumetric based services
(b)
|
|
430
|
|
|
281
|
|
|
53.0
|
|
|
389
|
|
|
(27.8
|
)
|
|||
Total transmission pipeline throughput
|
|
2,081
|
|
|
2,122
|
|
|
(1.9
|
)
|
|
1,794
|
|
|
18.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average contracted firm transmission reservation commitments (BBtu per day)
|
|
2,814
|
|
|
2,624
|
|
|
7.2
|
|
|
2,056
|
|
|
27.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
$
|
292,049
|
|
|
$
|
203,706
|
|
|
43.4
|
|
|
$
|
137,317
|
|
|
48.3
|
|
(a)
|
Includes commodity charges and fees on volumes transported in excess of firm contracted capacity.
|
(b)
|
Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity.
|
•
|
EQM’s operating performance as compared to other publicly traded partnerships in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods;
|
•
|
the ability of EQM’s assets to generate sufficient cash flow to make distributions to EQM’s unitholders;
|
•
|
EQM’s ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Net income
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
Add:
|
|
|
|
|
|
||||||
Net interest expense
|
16,766
|
|
|
21,345
|
|
|
10,871
|
|
|||
Depreciation and amortization expense
|
62,691
|
|
|
49,895
|
|
|
49,061
|
|
|||
Income tax expense (benefit)
|
10,147
|
|
|
(16,741
|
)
|
|
40,221
|
|
|||
Preferred Interest payments received post conversion
(a)
|
2,764
|
|
|
—
|
|
|
—
|
|
|||
Non-cash long-term compensation expense
|
195
|
|
|
1,467
|
|
|
3,368
|
|
|||
Less:
|
|
|
|
|
|
||||||
Non-cash adjustments
|
—
|
|
|
—
|
|
|
(1,520
|
)
|
|||
Equity income
|
(9,898
|
)
|
|
(2,367
|
)
|
|
—
|
|
|||
AFUDC – equity
|
(19,402
|
)
|
|
(6,327
|
)
|
|
(3,313
|
)
|
|||
Pre-acquisition capital lease payments for AVC
(b)
|
(17,186
|
)
|
|
(22,059
|
)
|
|
(21,802
|
)
|
|||
Adjusted EBITDA attributable to Jupiter prior to acquisition
(c)
|
—
|
|
|
—
|
|
|
(34,733
|
)
|
|||
Adjusted EBITDA attributable to NWV Gathering prior to acquisition
(d)
|
—
|
|
|
(19,841
|
)
|
|
(62,431
|
)
|
|||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(e)
|
(11,420
|
)
|
|
(11,483
|
)
|
|
(8,890
|
)
|
|||
Adjusted EBITDA
|
$
|
572,611
|
|
|
$
|
449,015
|
|
|
$
|
255,648
|
|
Less:
|
|
|
|
|
|
|
|
||||
Net interest expense excluding interest income on the Preferred Interest
(f)
|
(18,506
|
)
|
|
(22,436
|
)
|
|
(10,968
|
)
|
|||
Capitalized interest and AFUDC – debt
(g)
|
(9,400
|
)
|
|
—
|
|
|
—
|
|
|||
Ongoing maintenance capital expenditures net of reimbursements
(h)
|
(21,434
|
)
|
|
(20,099
|
)
|
|
(15,196
|
)
|
|||
Distributable cash flow
|
$
|
523,271
|
|
|
$
|
406,480
|
|
|
$
|
229,484
|
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
537,904
|
|
|
$
|
489,706
|
|
|
$
|
324,804
|
|
Adjustments:
|
|
|
|
|
|
||||||
Pre-acquisition capital lease payments for AVC
(b)
|
(17,186
|
)
|
|
(22,059
|
)
|
|
(21,802
|
)
|
|||
Capitalized interest and AFUDC – debt
(g)
|
(9,400
|
)
|
|
—
|
|
|
—
|
|
|||
Ongoing maintenance capital expenditures net of reimbursements
(h)
|
(21,434
|
)
|
|
(20,099
|
)
|
|
(15,196
|
)
|
|||
Current tax expense
|
1,373
|
|
|
13,945
|
|
|
12,584
|
|
|||
Adjusted EBITDA attributable to Jupiter prior to acquisition
(c)
|
—
|
|
|
—
|
|
|
(34,733
|
)
|
|||
Adjusted EBITDA attributable to NWV Gathering prior to acquisition
(d)
|
—
|
|
|
(19,841
|
)
|
|
(62,431
|
)
|
|||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(e)
|
(11,420
|
)
|
|
(11,483
|
)
|
|
(8,890
|
)
|
|||
Other, including changes in working capital
|
43,434
|
|
|
(23,689
|
)
|
|
35,148
|
|
|||
Distributable cash flow
|
$
|
523,271
|
|
|
$
|
406,480
|
|
|
$
|
229,484
|
|
(a)
|
In conjunction with the October 2016 Acquisition, the operating agreement of EES was amended and the accounting for EQM's Preferred Interest in EES converted from a cost method investment to a note receivable effective October 1, 2016. There were no changes in the cash payments; however, distributions from EES subsequent to this amendment were recorded partly as a reduction in the note receivable ($1.0 million) and partly as interest income ($1.7 million), which is included in net interest expense in the accompanying statements of consolidated operations. Distributions received from EES prior to this amendment in 2016 were included in other income in the accompanying statements of consolidated operations. The calculation of adjusted EBITDA changed from the prior period to reflect the cash payments from the Preferred Interest in a consistent manner despite the change in accounting treatment.
|
(b)
|
Reflects capital lease payments due under the lease. These lease payments were generally made monthly on a one month lag prior to the October 2016 Acquisition.
|
(c)
|
Adjusted EBITDA attributable to Jupiter prior to acquisition for the periods presented was excluded from EQM’s adjusted EBITDA calculations as these amounts were generated by Jupiter prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM’s unitholders. Adjusted EBITDA attributable to Jupiter prior to acquisition for the year ended December 31, 2014 was calculated as net income of $20.1 million plus depreciation and amortization expense of $2.1 million plus income tax expense of $12.5 million.
|
(d)
|
Adjusted EBITDA attributable to NWV Gathering prior to acquisition for the periods presented was excluded from EQM’s adjusted EBITDA calculations as these amounts were generated by NWV Gathering prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM’s unitholders. Adjusted EBITDA attributable to NWV Gathering prior to acquisition for the years ended December 31, 2015 and 2014 was calculated as net income of $11.1 million and $33.7 million, respectively, plus depreciation and amortization expense of $2.0 million and $9.5 million, respectively, plus income tax expense of $6.7 million and $19.2 million, respectively.
|
(e)
|
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the periods presented was excluded from EQM’s adjusted EBITDA calculations as these amounts were generated by Rager and the Gathering Assets prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM’s unitholders. Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the years ended December 31, 2016, 2015 and 2014 was calculated as net income (loss) of $1.3 million, $34.2 million and $(3.6 million), respectively, plus depreciation and amortization expense of $2.1 million, $2.5 million and $5.0 million, respectively, plus income tax expense (benefit) of $10.1 million, $(23.4 million) and $8.5 million, respectively, less interest income of $0.5 million, $1.1 million and $0.1 million, respectively, less AFUDC - equity of $1.6 million, $0.7 million and $0.9 million, respectively.
|
(f)
|
The calculation of distributable cash flow changed from the prior period in order to reflect the cash payments from the Preferred Interest in a consistent manner despite the change in accounting treatment. See note (a).
|
(g)
|
As a result of increased significance of capitalized interest and AFUDC - debt in 2016, this line item was added as an adjustment to the calculation of distributable cash flow for the year ended December 31, 2016. Had distributable cash flow been calculated on a consistent basis, it would have been $5.6 million and $2.3 million lower for the years ended December 31, 2015 and 2014, respectively, than the numbers presented herein.
|
(h)
|
Ongoing maintenance capital expenditures are expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long term, EQM’s operating capacity or operating income. EQT has reimbursement obligations to EQM for certain maintenance capital expenditures under the terms of the EQM omnibus agreement. For further explanation of these reimbursable maintenance capital expenditures, see “Capital Requirements.” For the years ended
December 31, 2016
,
2015
and
2014
, ongoing maintenance capital expenditures, net of reimbursements, excludes ongoing maintenance of
$6.5 million
,
$9.8 million
and
$3.1 million
, respectively, attributable to AVC, Rager, the Gathering Assets, NWV Gathering and Jupiter prior to acquisition.
|
•
|
Range Resources Header Pipeline
. EQM expects to complete this project in the second quarter of 2017, including the installation of approximately 25 miles of pipeline and 32,000 horsepower compression. The pipeline is estimated to cost approximately $250 million and provide total firm capacity of 600 MMcf per day, which is fully reserved under a ten-year firm capacity reservation commitment contract. EQM expects to invest approximately $40 million on the project in
2017
.
|
•
|
Affiliate Gathering Expansion
. EQM expects to invest $200 million to $230 million in
2017
on gathering expansion projects supported by EQT Production development in the Marcellus. EQM plans to install approximately 30 miles of gathering pipeline and 10,000 horsepower compression in its gathering systems across northern West Virginia and southwestern Pennsylvania during
2017
.
|
•
|
Mountain Valley Pipeline
. The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a
45.5%
interest in the MVP Joint Venture as of
December 31, 2016
. The 42 inch diameter MVP has a targeted capacity of 2.0 Bcf per day and is estimated to span 300-miles extending from EQM's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia. As currently designed, the MVP is estimated to cost a total of $3.0 billion to $3.5 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the joint venture. In 2017, EQM expects to provide capital contributions of $200 million to $500 million to the MVP Joint Venture, primarily in support of materials, land, engineering design, environmental work and construction activities. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms, including a 1.29 Bcf per day firm capacity commitment by EQT, and is currently in negotiation with additional shippers who have expressed interest in the MVP project. The FERC issued the Draft Environmental Impact Statement for the project in September 2016 and is currently working to develop the Final Environmental Impact Statement. The pipeline is targeted to be placed in-service during the fourth quarter of 2018.
|
•
|
Transmission Expansion
. EQM plans to invest $60 million to $80 million on transmission expansion projects in
2017
including Equitrans expansion projects and modernization projects on the AVC facilities. The Equitrans expansion projects are designed to increase deliverable capacity to EQM's Mobley hub, which is the origin of both the OVC and the MVP. The projects include additional compression, pipeline looping and new header pipelines. In total, the projects are expected to add up to 1.5 Bcf per day of capacity by the end of 2018, consistent with the target MVP in-service date. The AVC modernization projects primarily consist of the replacement of approximately 20 miles of pipeline.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
|||||||||||
Expansion capital expenditures
(a)
|
|
$
|
558,071
|
|
|
$
|
388,442
|
|
|
$
|
364,595
|
|
Maintenance capital expenditures:
|
|
|
|
|
|
|
||||||
Ongoing maintenance
|
|
28,498
|
|
|
37,422
|
|
|
18,757
|
|
|||
Funded regulatory compliance
|
|
795
|
|
|
3,379
|
|
|
7,603
|
|
|||
Total maintenance capital expenditures
|
|
29,293
|
|
|
40,801
|
|
|
26,360
|
|
|||
Total capital expenditures
|
|
587,364
|
|
|
429,243
|
|
|
390,955
|
|
|||
Plus: accrued capital expenditures at the end of prior period
(b)
|
|
24,133
|
|
|
53,016
|
|
|
18,623
|
|
|||
Less: accrued capital expenditures at the end of current period
(b)
|
|
(26,678
|
)
|
|
(24,133
|
)
|
|
(53,016
|
)
|
|||
Less: other non-cash items
(c)
|
|
—
|
|
|
(70
|
)
|
|
(323
|
)
|
|||
Total cash capital expenditures
|
|
$
|
584,819
|
|
|
$
|
458,056
|
|
|
$
|
356,239
|
|
(a)
|
Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture. Capital contributions to the MVP Joint Venture were
$98.4 million
for the year ended
December 31, 2016
. In 2015, EQM paid
$84.4 million
for its acquisition of EQT's ownership interest in the MVP Joint Venture and subsequent capital contributions to the MVP Joint Venture.
|
(b)
|
EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the consolidated statements of cash flows until they are paid in a subsequent period.
|
(c)
|
EQM capitalizes certain labor overhead costs which include a portion of non-cash equity-based compensation.
|
Rating Service
|
|
Senior Notes
|
|
Outlook
|
Moody’s Investors Service (Moody's)
|
|
Ba1
|
|
Stable
|
Standard & Poor’s Ratings Services (S&P)
|
|
BBB-
|
|
Stable
|
Fitch Ratings (Fitch)
|
|
BBB-
|
|
Stable
|
|
|
Total
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
2022+
|
||||||||||
|
|
(Thousands)
|
||||||||||||||||||
Long-term debt
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000,000
|
|
Interest payments on long-term debt
|
|
356,198
|
|
|
40,625
|
|
|
81,250
|
|
|
81,250
|
|
|
153,073
|
|
|||||
Purchase obligations
|
|
8,550
|
|
|
8,550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
1,364,748
|
|
|
$
|
49,175
|
|
|
$
|
81,250
|
|
|
$
|
81,250
|
|
|
$
|
1,153,073
|
|
|
Page
Reference
|
Reports of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Operations for each of the three years in the period ended December 31, 2016
|
|
Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 2016
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Statements of Consolidated Partners’ Capital for each of the three years in the period ended December 31, 2016
|
|
Notes to Consolidated Financial Statements
|
/s/ Ernst & Young, LLP
|
|
Pittsburgh, Pennsylvania
|
|
February 9, 2017
|
|
/s/ Ernst & Young, LLP
|
|
Pittsburgh, Pennsylvania
|
|
February 9, 2017
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands, except per unit amounts)
|
||||||||||
Operating revenues
(b)
|
$
|
735,614
|
|
|
$
|
632,936
|
|
|
$
|
489,218
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Operating and maintenance
(c)
|
73,213
|
|
|
70,103
|
|
|
56,413
|
|
|||
Selling, general and administrative
(c)
|
72,761
|
|
|
61,902
|
|
|
51,149
|
|
|||
Depreciation and amortization
|
62,691
|
|
|
49,895
|
|
|
49,061
|
|
|||
Total operating expenses
|
208,665
|
|
|
181,900
|
|
|
156,623
|
|
|||
Operating income
|
526,949
|
|
|
451,036
|
|
|
332,595
|
|
|||
Other income
(d)
|
37,918
|
|
|
8,694
|
|
|
3,313
|
|
|||
Net interest expense
(e)
|
16,766
|
|
|
21,345
|
|
|
10,871
|
|
|||
Income before income taxes
|
548,101
|
|
|
438,385
|
|
|
325,037
|
|
|||
Income tax expense (benefit)
|
10,147
|
|
|
(16,741
|
)
|
|
40,221
|
|
|||
Net income
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
|
|
|
|
|
|
||||||
Calculation of limited partners' interest in net income:
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
Less pre-acquisition income allocated to parent
|
(21,861
|
)
|
|
(72,782
|
)
|
|
(72,194
|
)
|
|||
Less general partner interest in net income - general partner units
|
(9,173
|
)
|
|
(7,455
|
)
|
|
(4,252
|
)
|
|||
Less general partner interest in net income - incentive distribution rights
|
(93,568
|
)
|
|
(46,992
|
)
|
|
(11,453
|
)
|
|||
Limited partners' interest in net income
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
196,917
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit – basic
|
$
|
5.21
|
|
|
$
|
4.71
|
|
|
$
|
3.53
|
|
Net income per limited partner unit – diluted
|
$
|
5.21
|
|
|
$
|
4.70
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding – basic
|
79,367
|
|
|
69,612
|
|
|
55,745
|
|
|||
Weighted average limited partner units outstanding – diluted
|
79,388
|
|
|
69,773
|
|
|
55,883
|
|
(a)
|
As discussed in Note 2, EQM’s consolidated financial statements have been retrospectively recast to include the pre-acquisition results of Allegheny Valley Connector, LLC (AVC), Rager Mountain Storage Company LLC (Rager) and certain gathering assets (the Gathering Assets), which were acquired by EQM effective on October 1, 2016 (the October 2016 Acquisition), the Northern West Virginia Marcellus gathering system (NWV Gathering), which was acquired by EQM on March 17, 2015, and the Jupiter natural gas gathering system (Jupiter), which was acquired by EQM on May 7, 2014, because these transactions were between entities under common control.
|
(b)
|
Operating revenues included affiliate revenues from EQT Corporation and subsidiaries (collectively, EQT) of
$551.4 million
,
$462.4 million
and
$337.1 million
for the years ended
December 31, 2016
,
2015
and
2014
, respectively. See Note 5.
|
(c)
|
Operating and maintenance expense included charges from EQT of
$34.2 million
,
$33.5 million
and
$29.3 million
for the years ended
December 31, 2016
,
2015
and
2014
, respectively. Selling, general and administrative expense included charges from EQT of
$67.3 million
,
$55.1 million
and
$46.5 million
for the years ended
December 31, 2016
,
2015
and
2014
, respectively. See Note 5.
|
(d)
|
For the year ended
December 31, 2016
, other income included distributions received from EQT Energy Supply, LLC (EES) of
$8.3 million
and equity income from Mountain Valley Pipeline, LLC (MVP Joint Venture) of
$9.9 million
. For the year ended
December 31, 2015
, other income included equity income from the MVP Joint Venture of
$2.4 million
. See Notes 6 and 12.
|
(e)
|
Net interest expense for the year ended
December 31, 2016
included
$1.7 million
of interest income on the preferred interest (the Preferred Interest) in EES. See Note 12.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
62,691
|
|
|
49,895
|
|
|
49,061
|
|
|||
Deferred income taxes
|
8,774
|
|
|
(30,686
|
)
|
|
27,637
|
|
|||
Equity income
|
(9,898
|
)
|
|
(2,367
|
)
|
|
—
|
|
|||
AFUDC
–
equity
|
(19,402
|
)
|
|
(6,327
|
)
|
|
(3,313
|
)
|
|||
Non-cash long term compensation expense
|
195
|
|
|
1,467
|
|
|
3,368
|
|
|||
Non-cash adjustments
|
—
|
|
|
—
|
|
|
(1,520
|
)
|
|||
Changes in other assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(2,872
|
)
|
|
(647
|
)
|
|
(5,446
|
)
|
|||
Accounts payable
|
(9,354
|
)
|
|
8,470
|
|
|
4,734
|
|
|||
Due to/from EQT affiliates
|
(34,667
|
)
|
|
8,633
|
|
|
(41,879
|
)
|
|||
Other assets and other liabilities
|
4,483
|
|
|
6,142
|
|
|
7,346
|
|
|||
Net cash provided by operating activities
|
537,904
|
|
|
489,706
|
|
|
324,804
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(584,819
|
)
|
|
(458,056
|
)
|
|
(356,239
|
)
|
|||
Acquisitions - net assets from EQT (see Note 2)
|
(62,372
|
)
|
|
(386,791
|
)
|
|
(168,198
|
)
|
|||
MVP Interest Acquisition and capital contributions to the MVP Joint Venture
|
(98,399
|
)
|
|
(84,381
|
)
|
|
—
|
|
|||
Sales of interests in the MVP Joint Venture
|
12,533
|
|
|
9,723
|
|
|
—
|
|
|||
Preferred Interest Acquisition (as defined in Note 2)
|
—
|
|
|
(124,317
|
)
|
|
—
|
|
|||
Principal payments received on Preferred Interest (see Note 2)
|
1,024
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(732,033
|
)
|
|
(1,043,822
|
)
|
|
(524,437
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from the issuance of EQM common units, net of offering costs
|
217,102
|
|
|
1,183,921
|
|
|
902,467
|
|
|||
Acquisitions - purchase price in excess of net assets from EQT (see Note 2)
|
(3,734
|
)
|
|
(486,392
|
)
|
|
(952,802
|
)
|
|||
Acquisition of AVC net assets from EQT (see Note 2)
|
(208,894
|
)
|
|
—
|
|
|
—
|
|
|||
Sunrise Merger payment (as defined in Note 2)
|
—
|
|
|
—
|
|
|
(110,000
|
)
|
|||
Proceeds from credit facility borrowings
|
740,000
|
|
|
617,000
|
|
|
450,000
|
|
|||
Payments on credit facility borrowings
|
(1,039,000
|
)
|
|
(318,000
|
)
|
|
(450,000
|
)
|
|||
Proceeds from the issuance of long-term debt
|
500,000
|
|
|
—
|
|
|
500,000
|
|
|||
Net contributions from (distributions to) EQT
|
20,234
|
|
|
(6,598
|
)
|
|
106,180
|
|
|||
Capital contributions
|
5,884
|
|
|
1,781
|
|
|
382
|
|
|||
Distributions paid to unitholders
|
(329,471
|
)
|
|
(212,262
|
)
|
|
(119,628
|
)
|
|||
Discount, debt issuance costs and credit facility fees
|
(8,580
|
)
|
|
—
|
|
|
(9,707
|
)
|
|||
Net cash (used in) provided by financing activities
|
(106,459
|
)
|
|
779,450
|
|
|
316,892
|
|
|||
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
(300,588
|
)
|
|
225,334
|
|
|
117,259
|
|
|||
Cash and cash equivalents at beginning of year
|
360,956
|
|
|
135,622
|
|
|
18,363
|
|
|||
Cash and cash equivalents at end of year
|
$
|
60,368
|
|
|
$
|
360,956
|
|
|
$
|
135,622
|
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
|
||||
Interest, net of amount capitalized
|
$
|
13,899
|
|
|
$
|
19,606
|
|
|
$
|
1,580
|
|
Non-cash activity during the year:
|
|
|
|
|
|
|
|
||||
MVP Joint Venture investment/payable for capital contributions (see Note 6)
|
$
|
11,471
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Elimination of net current and deferred tax liabilities
|
93,951
|
|
|
84,446
|
|
|
51,813
|
|
|||
Asset adjustments prior to acquisition
|
(115,270
|
)
|
|
—
|
|
|
—
|
|
|||
Limited partner and general partner units issued for acquisitions
|
—
|
|
|
52,500
|
|
|
59,000
|
|
|||
Net settlement of current income taxes receivable with EQT
|
$
|
—
|
|
|
$
|
8,652
|
|
|
$
|
18,728
|
|
(a)
|
As discussed in Note 2, EQM’s consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, NWV Gathering, which was acquired by EQM on March 17, 2015, and Jupiter, which was acquired by EQM on May 7, 2014, because these transactions were between entities under common control.
|
|
2016
|
|
2015
|
||||
|
(Thousands, except number of units)
|
||||||
ASSETS
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
60,368
|
|
|
$
|
360,956
|
|
Accounts receivable (net of allowance for doubtful accounts of $319 and $248 as of December 31, 2016 and 2015, respectively)
|
20,662
|
|
|
17,790
|
|
||
Accounts receivable – affiliate
|
81,358
|
|
|
80,507
|
|
||
Other current assets
|
9,671
|
|
|
2,203
|
|
||
Total current assets
|
172,059
|
|
|
461,456
|
|
||
Property, plant and equipment
|
2,894,858
|
|
|
2,362,316
|
|
||
Less: accumulated depreciation
|
(316,024
|
)
|
|
(264,602
|
)
|
||
Net property, plant and equipment
|
2,578,834
|
|
|
2,097,714
|
|
||
Investments in unconsolidated entities
|
184,562
|
|
|
77,025
|
|
||
Preferred Interest in EES
|
119,126
|
|
|
124,317
|
|
||
Other assets
|
21,259
|
|
|
72,846
|
|
||
Total assets
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
|
|
|
||||
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
35,830
|
|
|
$
|
42,639
|
|
Due to related party
|
19,027
|
|
|
47,563
|
|
||
Credit facility borrowings
|
—
|
|
|
299,000
|
|
||
Capital contribution payable to MVP Joint Venture
|
11,471
|
|
|
—
|
|
||
Accrued interest
|
12,016
|
|
|
8,753
|
|
||
Accrued liabilities
|
8,648
|
|
|
6,812
|
|
||
Total current liabilities
|
86,992
|
|
|
404,767
|
|
||
Deferred income taxes
|
—
|
|
|
84,099
|
|
||
Long-term debt
|
985,732
|
|
|
493,401
|
|
||
Other long-term liabilities
|
9,562
|
|
|
7,834
|
|
||
Total liabilities
|
1,082,286
|
|
|
990,101
|
|
||
|
|
|
|
||||
Partners’ capital:
|
|
|
|
|
|||
Predecessor equity
|
—
|
|
|
275,545
|
|
||
Common units (80,581,758 and 77,520,181 units issued and outstanding at December 31, 2016 and 2015, respectively)
|
2,008,510
|
|
|
1,598,675
|
|
||
General partner interest (1,443,015 units issued and outstanding at December 31, 2016 and 2015)
|
(14,956
|
)
|
|
(30,963
|
)
|
||
Total partners’ capital
|
1,993,554
|
|
|
1,843,257
|
|
||
Total liabilities and partners’ capital
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
|
|
Partners’ Capital
|
|
|
||||||||||||||
|
Predecessor
|
|
Limited Partners
|
|
General
|
|
|
||||||||||||
|
Equity
|
|
Common
|
|
Subordinated
|
|
Partner
|
|
Total
|
||||||||||
|
(Thousands)
|
||||||||||||||||||
Balance at January 1, 2014
|
$
|
477,026
|
|
|
$
|
818,431
|
|
|
$
|
(175,996
|
)
|
|
$
|
1,753
|
|
|
$
|
1,121,214
|
|
Net income
|
72,194
|
|
|
136,992
|
|
|
59,925
|
|
|
15,705
|
|
|
284,816
|
|
|||||
Capital contributions
|
—
|
|
|
338
|
|
|
152
|
|
|
10
|
|
|
500
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
3,692
|
|
|
—
|
|
|
—
|
|
|
3,692
|
|
|||||
Net contributions from EQT
|
87,452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,452
|
|
|||||
Distributions to unitholders
|
—
|
|
|
(75,328
|
)
|
|
(35,026
|
)
|
|
(9,274
|
)
|
|
(119,628
|
)
|
|||||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
902,467
|
|
|
—
|
|
|
—
|
|
|
902,467
|
|
|||||
Elimination of net current and deferred tax liabilities
|
51,813
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,813
|
|
|||||
Jupiter net assets from EQT
|
(168,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168,198
|
)
|
|||||
Issuance of units
|
—
|
|
|
39,091
|
|
|
—
|
|
|
19,909
|
|
|
59,000
|
|
|||||
Purchase price in excess of net assets from EQT
|
—
|
|
|
(177,773
|
)
|
|
(778,429
|
)
|
|
(55,600
|
)
|
|
(1,011,802
|
)
|
|||||
Balance at December 31, 2014
|
$
|
520,287
|
|
|
$
|
1,647,910
|
|
|
$
|
(929,374
|
)
|
|
$
|
(27,497
|
)
|
|
$
|
1,211,326
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
72,782
|
|
|
327,897
|
|
|
—
|
|
|
54,447
|
|
|
455,126
|
|
|||||
Capital contributions
|
—
|
|
|
7,342
|
|
|
—
|
|
|
150
|
|
|
7,492
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
1,537
|
|
|
—
|
|
|
33
|
|
|
1,570
|
|
|||||
Net distributions to EQT
|
(15,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,179
|
)
|
|||||
Distributions to unitholders
|
—
|
|
|
(162,040
|
)
|
|
(10,057
|
)
|
|
(40,165
|
)
|
|
(212,262
|
)
|
|||||
Conversion of subordinated units to common units
(b)
|
—
|
|
|
(939,431
|
)
|
|
939,431
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
1,182,002
|
|
|
—
|
|
|
1,919
|
|
|
1,183,921
|
|
|||||
Elimination of net current and deferred tax liabilities
|
84,446
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,446
|
|
|||||
NWV Gathering net assets from EQT
|
(386,791
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(386,791
|
)
|
|||||
Issuance of units
|
—
|
|
|
38,910
|
|
|
—
|
|
|
13,590
|
|
|
52,500
|
|
|||||
Purchase price in excess of net assets from EQT
|
—
|
|
|
(505,452
|
)
|
|
—
|
|
|
(33,440
|
)
|
|
(538,892
|
)
|
|||||
Balance at December 31, 2015
|
$
|
275,545
|
|
|
$
|
1,598,675
|
|
|
$
|
—
|
|
|
$
|
(30,963
|
)
|
|
$
|
1,843,257
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
21,861
|
|
|
413,352
|
|
|
—
|
|
|
102,741
|
|
|
537,954
|
|
|||||
Capital contributions
|
—
|
|
|
591
|
|
|
—
|
|
|
11
|
|
|
602
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|||||
Net contributions from EQT
|
20,234
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,234
|
|
|||||
Elimination of capital lease
(c)
|
(25,055
|
)
|
|
23,500
|
|
|
—
|
|
|
1,555
|
|
|
—
|
|
|||||
Distributions to unitholders
|
—
|
|
|
(241,403
|
)
|
|
—
|
|
|
(88,068
|
)
|
|
(329,471
|
)
|
|||||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
217,102
|
|
|
—
|
|
|
—
|
|
|
217,102
|
|
|||||
Elimination of net current and deferred tax liabilities
|
93,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,951
|
|
|||||
Asset adjustments prior to acquisition
(d)
|
(115,270
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(115,270
|
)
|
|||||
October 2016 Acquisition net assets from EQT
|
(271,266
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(271,266
|
)
|
|||||
Purchase price in excess of net assets from EQT
|
—
|
|
|
(3,502
|
)
|
|
—
|
|
|
(232
|
)
|
|
(3,734
|
)
|
|||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
2,008,510
|
|
|
$
|
—
|
|
|
$
|
(14,956
|
)
|
|
$
|
1,993,554
|
|
(a)
|
As discussed in Note 2, EQM’s consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, NWV Gathering, which was acquired by EQM on March 17, 2015, and Jupiter, which was acquired by EQM on May 7, 2014, because these transactions were between entities under common control.
|
(b)
|
All subordinated units were converted to common units on a
one
-for-one basis on February 17, 2015. For purposes of calculating net income per common and subordinated unit, the conversion of the subordinated units was deemed to have occurred on January 1, 2015. See Note 8.
|
|
|
As of December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(Thousands)
|
||||||
Gathering assets
|
|
$
|
1,330,998
|
|
|
$
|
1,081,472
|
|
Accumulated depreciation
|
|
(110,473
|
)
|
|
(88,917
|
)
|
||
Net gathering assets
|
|
1,220,525
|
|
|
992,555
|
|
||
Transmission and storage assets
|
|
1,563,860
|
|
|
1,280,844
|
|
||
Accumulated depreciation
|
|
(205,551
|
)
|
|
(175,685
|
)
|
||
Net transmission and storage assets
|
|
1,358,309
|
|
|
1,105,159
|
|
||
Net property, plant and equipment
|
|
$
|
2,578,834
|
|
|
$
|
2,097,714
|
|
|
|
Acquisition Date
|
|
Total Consideration
|
|
Cash
|
|
Common Units Issued to EQT
|
|
GP Units Issued to EQT
|
||||||
|
|
(Thousands, except unit amounts)
|
||||||||||||||
Jupiter Acquisition
(a)
|
|
5/7/14
|
|
$
|
1,180,000
|
|
|
$
|
1,121,000
|
|
|
516,050
|
|
|
262,828
|
|
NWV Gathering Acquisition
(b)
|
|
3/17/15
|
|
925,683
|
|
|
873,183
|
|
|
511,973
|
|
|
178,816
|
|
||
MVP Interest Acquisition
(c)
|
|
3/30/15
|
|
54,229
|
|
|
54,229
|
|
|
—
|
|
|
—
|
|
||
Preferred Interest Acquisition
(d)
|
|
4/15/15
|
|
124,317
|
|
|
124,317
|
|
|
—
|
|
|
—
|
|
||
October 2016 Acquisition
(e)
|
|
10/13/16
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
|
—
|
|
|
—
|
|
(a)
|
EQT contributed Jupiter to EQM Gathering Opco, LLC (EQM Gathering), an indirect wholly owned subsidiary of EQM. The cash portion of the purchase price was funded with the net proceeds from an equity offering of EQM common units and borrowings under EQM’s credit facility.
|
(b)
|
EQT contributed NWV Gathering to EQM Gathering. The cash portion of the purchase price was funded with net proceeds from an equity offering of EQM common units and borrowings under EQM's credit facility.
|
(c)
|
EQM assumed
100%
of the membership interests in MVP Holdco, LLC (MVP Holdco), the owner of the interest (the MVP Interest) in the MVP Joint Venture, which at the time was an indirect wholly owned subsidiary of EQT. The cash payment made represented EQM's reimbursement to EQT for
100%
of the capital contributions made by EQT to the MVP Joint Venture as of March 30, 2015. The cash payment was funded by borrowings under EQM's credit facility. See Note 6.
|
(d)
|
Pursuant to the NWV Gathering Acquisition contribution and sale agreement, EQM acquired a preferred interest (the Preferred Interest) from EQT in EES, which at the time was an indirect wholly owned subsidiary of EQT. EES generates revenue from services provided to a local distribution company. The cash payment was funded by borrowings under EQM's credit facility.
|
(e)
|
On October 13, 2016, EQM entered into a Purchase and Sale Agreement with EQT pursuant to which EQM acquired from EQT
100%
of the outstanding limited liability company interests of AVC and Rager as well as the Gathering Assets. The closing occurred on October 13, 2016 and was effective as of October 1, 2016. The cash payment was funded by borrowings under EQM's credit facility.
|
|
|
Common Units Issued
(a)
|
|
GP Units Issued
(b)
|
|
Price Per Unit
|
|
Net Proceeds
|
|
Underwriters' Discount and Other Offering Expenses
|
||||||||
|
|
(Thousands, except unit and per unit amounts)
|
||||||||||||||||
May 2014 equity offering
(c)
|
|
12,362,500
|
|
|
—
|
|
|
$
|
75.75
|
|
|
$
|
902,467
|
|
|
$
|
33,992
|
|
March 2015 equity offering
(d)
|
|
9,487,500
|
|
|
25,255
|
|
|
76.00
|
|
|
696,582
|
|
|
24,468
|
|
|||
$750 million At the Market (ATM) Program in 2015
(e)
|
|
1,162,475
|
|
|
—
|
|
|
74.92
|
|
|
85,483
|
|
|
1,610
|
|
|||
November 2015 equity offering
(f)
|
|
5,650,000
|
|
|
—
|
|
|
71.80
|
|
|
399,937
|
|
|
5,733
|
|
|||
$750 million ATM Program in 2016
(g)
|
|
2,949,309
|
|
|
—
|
|
|
$
|
74.42
|
|
|
$
|
217,102
|
|
|
$
|
2,381
|
|
(a)
|
Includes the issuance of additional common units pursuant to the exercise of the underwriters' over-allotment options, as applicable.
|
(b)
|
Represents general partner units issued to the EQM General Partner in exchange for its proportionate capital contribution. See Note 2 for a summary of EQM general partner units issued in conjunction with acquisitions.
|
(c)
|
The net proceeds were used to finance a portion of the cash consideration paid to EQT in connection with the Jupiter Acquisition as described in Note 2.
|
(d)
|
The underwriters exercised their option to purchase additional common units. The EQM General Partner purchased
25,255
EQM general partner units for approximately
$1.9 million
to maintain its then
2.0%
general partner ownership percentage. This amount was included in net proceeds from this offering. The net proceeds were used to finance a portion of the cash consideration paid to EQT in connection with the NWV Gathering Acquisition as described in Note 2.
|
(e)
|
During the third quarter of 2015, EQM entered into an equity distribution agreement that established an ATM common unit offering program, pursuant to which a group of managers, acting as EQM's sales agents, may sell EQM common units having an aggregate offering price of up to
$750 million
(the
$750 million
ATM Program). The price per unit represents an average price for all issuances under the
$750 million
ATM Program in 2015. The underwriters' discount and other offering expenses in the table above include commissions of approximately
$0.9 million
. EQM used the net proceeds for general partnership purposes.
|
(f)
|
The net proceeds were used for general partnership purposes and to repay amounts outstanding under EQM's credit facility.
|
(g)
|
The price per unit represents an average price for all issuances under the
$750 million
ATM Program in
2016
. The underwriters' discount and other offering expenses in the table above include commissions of approximately
$2.2 million
. EQM used the net proceeds for general partnership purposes.
|
|
|
Limited Partner Units
|
|
General
|
|
|
||||||
|
|
Common
|
|
Subordinated
|
|
Partner Units
|
|
Total
|
||||
Balance at January 1, 2014
|
|
30,468,902
|
|
|
17,339,718
|
|
|
975,686
|
|
|
48,784,306
|
|
May 2014 equity offering
|
|
12,362,500
|
|
|
—
|
|
|
—
|
|
|
12,362,500
|
|
Jupiter Acquisition consideration
|
|
516,050
|
|
|
—
|
|
|
262,828
|
|
|
778,878
|
|
Balance at December 31, 2014
|
|
43,347,452
|
|
|
17,339,718
|
|
|
1,238,514
|
|
|
61,925,684
|
|
Conversion of subordinated units to common units
|
|
17,339,718
|
|
|
(17,339,718
|
)
|
|
—
|
|
|
—
|
|
2014 EQM VDA issuance
|
|
21,063
|
|
|
—
|
|
|
430
|
|
|
21,493
|
|
March 2015 equity offering
|
|
9,487,500
|
|
|
—
|
|
|
25,255
|
|
|
9,512,755
|
|
NWV Gathering Acquisition consideration
|
|
511,973
|
|
|
—
|
|
|
178,816
|
|
|
690,789
|
|
$750 million ATM Program
|
|
1,162,475
|
|
|
—
|
|
|
—
|
|
|
1,162,475
|
|
November 2015 equity offering
|
|
5,650,000
|
|
|
—
|
|
|
—
|
|
|
5,650,000
|
|
Balance at December 31, 2015
|
|
77,520,181
|
|
|
—
|
|
|
1,443,015
|
|
|
78,963,196
|
|
2014 EQM VDA issuance
|
|
19,796
|
|
|
—
|
|
|
—
|
|
|
19,796
|
|
EQM Total Return Program issuance
|
|
92,472
|
|
|
—
|
|
|
—
|
|
|
92,472
|
|
$750 million ATM Program
|
|
2,949,309
|
|
|
—
|
|
|
—
|
|
|
2,949,309
|
|
Balance at December 31, 2016
|
|
80,581,758
|
|
|
—
|
|
|
1,443,015
|
|
|
82,024,773
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Revenues from external customers (including affiliates):
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
397,494
|
|
|
$
|
335,105
|
|
|
$
|
233,945
|
|
Transmission
|
338,120
|
|
|
297,831
|
|
|
255,273
|
|
|||
Total
|
$
|
735,614
|
|
|
$
|
632,936
|
|
|
$
|
489,218
|
|
Operating income:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
289,027
|
|
|
$
|
243,257
|
|
|
$
|
147,426
|
|
Transmission
|
237,922
|
|
|
207,779
|
|
|
185,169
|
|
|||
Total operating income
|
$
|
526,949
|
|
|
$
|
451,036
|
|
|
$
|
332,595
|
|
|
|
|
|
|
|
||||||
Reconciliation of operating income to net income:
|
|
|
|
|
|
||||||
Other income
|
37,918
|
|
|
8,694
|
|
|
3,313
|
|
|||
Net interest expense
|
16,766
|
|
|
21,345
|
|
|
10,871
|
|
|||
Income tax expense (benefit)
|
10,147
|
|
|
(16,741
|
)
|
|
40,221
|
|
|||
Net income
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
|
As of December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Segment assets:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
1,292,713
|
|
|
$
|
1,079,644
|
|
|
$
|
865,465
|
|
Transmission
|
1,413,631
|
|
|
1,183,641
|
|
|
939,589
|
|
|||
Total operating segments
|
2,706,344
|
|
|
2,263,285
|
|
|
1,805,054
|
|
|||
Headquarters, including cash
|
369,496
|
|
|
570,073
|
|
|
138,312
|
|
|||
Total assets
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
$
|
1,943,366
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
30,422
|
|
|
$
|
24,360
|
|
|
$
|
23,977
|
|
Transmission
|
32,269
|
|
|
25,535
|
|
|
25,084
|
|
|||
Total
|
$
|
62,691
|
|
|
$
|
49,895
|
|
|
$
|
49,061
|
|
Expenditures for segment assets:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
295,315
|
|
|
$
|
225,537
|
|
|
$
|
253,638
|
|
Transmission
|
292,049
|
|
|
203,706
|
|
|
137,317
|
|
|||
Total
(a)
|
$
|
587,364
|
|
|
$
|
429,243
|
|
|
$
|
390,955
|
|
(a)
|
EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the statements of consolidated cash flows until they are paid in a subsequent period. Accrued capital expenditures were approximately
$26.7 million
,
$24.1 million
,
$53.0 million
and
$18.6 million
at
December 31, 2016
,
2015
,
2014
and
2013
, respectively.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Reimbursements to EQT
|
|
|
|
|
|
|
|
||||
Operating and maintenance expense
(a)
|
$
|
33,526
|
|
|
$
|
31,310
|
|
|
$
|
21,999
|
|
Selling, general and administrative expense
(a)
|
$
|
63,255
|
|
|
$
|
46,149
|
|
|
$
|
25,051
|
|
|
|
|
|
|
|
||||||
Reimbursements from EQT
(b)
|
|
|
|
|
|
|
|
||||
Plugging and abandonment
|
$
|
440
|
|
|
$
|
26
|
|
|
$
|
500
|
|
Bare steel replacement
|
—
|
|
|
6,268
|
|
|
—
|
|
|||
Other capital reimbursements
|
$
|
162
|
|
|
$
|
1,198
|
|
|
$
|
—
|
|
(a)
|
The expenses for which EQM reimburses EQT and its subsidiaries may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis, and EQM is unable to estimate what those expenses would be on a stand-alone basis. These amounts exclude the recast impact of the October 2016 Acquisition, NWV Gathering Acquisition and Jupiter Acquisition as these amounts do not represent reimbursements pursuant to the omnibus agreement.
|
(b)
|
These reimbursements were recorded as capital contributions from EQT.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Operating revenues
|
$
|
551,353
|
|
|
$
|
462,371
|
|
|
$
|
337,132
|
|
Operating and maintenance expense
(a)
|
34,179
|
|
|
33,452
|
|
|
29,258
|
|
|||
Selling, general and administrative expense
(a)
|
67,345
|
|
|
55,092
|
|
|
46,524
|
|
|||
Other income
(b)
|
18,191
|
|
|
2,367
|
|
|
—
|
|
|||
Interest income on Preferred Interest (see Note 12)
|
1,740
|
|
|
—
|
|
|
—
|
|
|||
Principal payments received on Preferred Interest (see Note 12)
|
1,024
|
|
|
—
|
|
|
—
|
|
|||
Distributions to EQM General Partner
(c)
|
169,438
|
|
|
109,194
|
|
|
59,537
|
|
|||
Capital contributions from EQT
|
602
|
|
|
7,492
|
|
|
500
|
|
|||
Net contributions from/(distributions to) EQT
|
$
|
20,234
|
|
|
$
|
(15,179
|
)
|
|
$
|
87,452
|
|
(a)
|
The expenses for which EQM reimburses EQT and its subsidiaries may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis, and EQM is unable to estimate what those expenses would be on a stand-alone basis. These amounts include the recast impact of the October 2016 Acquisition, NWV Gathering Acquisition and Jupiter Acquisition as they represent the total amounts allocated to EQM by EQT for the periods presented.
|
(b)
|
For the year ended
December 31, 2016
, other income included distributions received from EES of
$8.3 million
and equity income from the MVP Joint Venture of
$9.9 million
. For the year ended
December 31, 2015
, other income included equity income from the MVP Joint Venture of
$2.4 million
. See Notes 6 and 12.
|
(c)
|
The distributions to the EQM General Partner are based on the period to which the distributions relate and not the period in which the distributions were declared and paid. For example, for the year ended
December 31, 2016
, total distributions to the EQM General Partner included the cash distribution declared on
January 19, 2017
to EQM's unitholders related to the fourth quarter
2016
of
$0.85
per common unit.
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Thousands)
|
||||||
Accounts receivable – affiliate
|
$
|
81,358
|
|
|
$
|
80,507
|
|
Due to related party
|
19,027
|
|
|
47,563
|
|
||
Other current assets (current portion of Preferred Interest in EES - see Note 12)
|
4,167
|
|
|
—
|
|
||
Investments in unconsolidated entities
|
184,562
|
|
|
77,025
|
|
||
Preferred Interest in EES (see Note 12)
|
$
|
119,126
|
|
|
$
|
124,317
|
|
|
|
Total Quarterly
Distribution per |
|
Marginal Percentage Interest in
Distributions
|
||
|
|
Unit Target Amount
|
|
Unitholders
|
|
General Partner
|
Minimum Quarterly Distribution
|
|
$0.35
|
|
98.2%
|
|
1.8%
|
First Target Distribution
|
|
Above $0.3500 up to $0.4025
|
|
98.2%
|
|
1.8%
|
Second Target Distribution
|
|
Above $0.4025 up to $0.4375
|
|
85.2%
|
|
14.8%
|
Third Target Distribution
|
|
Above $0.4375 up to $0.5250
|
|
75.2%
|
|
24.8%
|
Thereafter
|
|
Above $0.5250
|
|
50.2%
|
|
49.8%
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(Thousands, except per unit data)
|
||||||||||
Net income
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
Less:
|
|
|
|
|
|
|
|
|||||
Pre-acquisition net income allocated to parent
|
|
(21,861
|
)
|
|
(72,782
|
)
|
|
(72,194
|
)
|
|||
General partner interest in net income – general partner units
|
|
(9,173
|
)
|
|
(7,455
|
)
|
|
(4,252
|
)
|
|||
General partner interest in net income – incentive distribution rights
|
|
(93,568
|
)
|
|
(46,992
|
)
|
|
(11,453
|
)
|
|||
Limited partner interest in net income
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
196,917
|
|
|
|
|
|
|
|
|
||||||
Net income allocable to common units - basic
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
136,992
|
|
Net income allocable to subordinated units - basic
|
|
—
|
|
|
—
|
|
|
59,925
|
|
|||
Limited partner interest in net income - basic
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
196,917
|
|
|
|
|
|
|
|
|
||||||
Net income allocable to common units - diluted
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
137,048
|
|
Net income allocable to subordinated units - diluted
|
|
—
|
|
|
—
|
|
|
59,869
|
|
|||
Limited partner interest in net income - diluted
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
$
|
196,917
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding – basic
|
|
|
|
|
|
|
|
|||||
Common units
|
|
79,367
|
|
|
69,612
|
|
|
38,405
|
|
|||
Subordinated units
|
|
—
|
|
|
—
|
|
|
17,340
|
|
|||
Total
|
|
79,367
|
|
|
69,612
|
|
|
55,745
|
|
|||
Weighted average limited partner units outstanding – diluted
|
|
|
|
|
|
|
||||||
Common units
|
|
79,388
|
|
|
69,773
|
|
|
38,543
|
|
|||
Subordinated units
|
|
—
|
|
|
—
|
|
|
17,340
|
|
|||
Total
|
|
79,388
|
|
|
69,773
|
|
|
55,883
|
|
|||
Net income per limited partner unit – basic
|
|
|
|
|
|
|
|
|||||
Common units
|
|
$
|
5.21
|
|
|
$
|
4.71
|
|
|
$
|
3.57
|
|
Subordinated units
|
|
—
|
|
|
—
|
|
|
3.46
|
|
|||
Total
|
|
$
|
5.21
|
|
|
$
|
4.71
|
|
|
$
|
3.53
|
|
Net income per limited partner unit - diluted
|
|
|
|
|
|
|
||||||
Common units
|
|
$
|
5.21
|
|
|
$
|
4.70
|
|
|
$
|
3.56
|
|
Subordinated units
|
|
—
|
|
|
—
|
|
|
3.45
|
|
|||
Total
|
|
$
|
5.21
|
|
|
$
|
4.70
|
|
|
$
|
3.52
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
Principal
|
|
Carrying Value
|
|
Fair
Value (a) |
|
Principal
|
|
Carrying Value
|
|
Fair
Value (a) |
||||||||||||
|
|
(Thousands)
|
||||||||||||||||||||||
$750 Million Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
299,000
|
|
|
$
|
299,000
|
|
|
$
|
299,000
|
|
364-Day Facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|||||||||
4.00% Senior Notes due 2024
|
|
500,000
|
|
|
494,170
|
|
|
493,125
|
|
|
500,000
|
|
|
493,401
|
|
|
414,125
|
|
||||||
4.125% Senior Notes due 2026
|
|
$
|
500,000
|
|
|
$
|
491,562
|
|
|
$
|
488,460
|
|
|
N/A
|
|
N/A
|
|
N/A
|
(a)
|
See Note 1 for a discussion of fair value measurements.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
Tax at statutory rate
|
$
|
191,835
|
|
|
$
|
153,435
|
|
|
$
|
113,763
|
|
Partnership income not subject to income taxes
|
(182,455
|
)
|
|
(135,324
|
)
|
|
(75,123
|
)
|
|||
State income taxes
|
623
|
|
|
800
|
|
|
1,918
|
|
|||
Regulatory assets
|
132
|
|
|
(35,685
|
)
|
|
—
|
|
|||
Other
|
12
|
|
|
33
|
|
|
(337
|
)
|
|||
Income tax expense (benefit)
|
$
|
10,147
|
|
|
$
|
(16,741
|
)
|
|
$
|
40,221
|
|
|
|
|
|
|
|
||||||
Effective tax rate
|
1.9
|
%
|
|
(3.8
|
)%
|
|
12.4
|
%
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Thousands)
|
||||||
Regulatory assets:
|
|
|
|
|
|||
Deferred taxes
(a)
|
$
|
13,901
|
|
|
$
|
70,504
|
|
Other recoverable costs
(b)
|
4,989
|
|
|
309
|
|
||
Total regulatory assets
|
$
|
18,890
|
|
|
$
|
70,813
|
|
|
|
|
|
||||
Regulatory liabilities:
|
|
|
|
||||
On-going post-retirement benefits other than pensions
(c)
|
$
|
6,744
|
|
|
$
|
5,596
|
|
Other reimbursable costs
(d)
|
691
|
|
|
866
|
|
||
Total regulatory liabilities
|
$
|
7,435
|
|
|
$
|
6,462
|
|
(a)
|
At December 31, 2015 the regulatory assets included a regulatory asset recorded in connection with the tax benefit discussed in Note 11 which was eliminated through equity at the time of the October 2016 Acquisition. The remaining regulatory asset for deferred taxes primarily related to deferred income taxes recoverable through future rates on a historical deferred tax position and the equity component of AFUDC. EQM expects to recover the amortization of the deferred tax position ratably over the corresponding life of the underlying assets that created the difference. Taxes on the equity component of AFUDC and the offsetting deferred income taxes will be collected through rates over the depreciable lives of the long-lived assets to which they relate. The amounts established for deferred taxes were primarily generated before EQM's tax status changed in July 2012 when EQM was included as part of EQT’s consolidated federal tax return.
|
(b)
|
At December 31, 2016, regulatory assets associated with other recoverable costs primarily related to the costs associated with the pension termination discussed in Note 14.
|
(c)
|
EQM defers expenses for on-going post-retirement benefits other than pensions which are subject to recovery in approved rates. The regulatory liability reflects lower cumulative actuarial expenses than the amounts recovered through rates.
|
(d)
|
Regulatory liabilities associated with other reimbursable costs primarily related to the storage retainage tracker on the AVC system. EQM defers the monthly over or under recovery of storage retainage gas on the AVC system and annually returns the excess to or recovers the deficiency from customers.
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(Thousands, except per unit amounts)
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
|
$
|
185,786
|
|
|
$
|
178,042
|
|
|
$
|
176,772
|
|
|
$
|
195,014
|
|
Operating income
|
|
137,120
|
|
|
129,029
|
|
|
126,210
|
|
|
134,590
|
|
||||
Net income
|
|
$
|
136,735
|
|
|
$
|
131,859
|
|
|
$
|
133,660
|
|
|
$
|
135,700
|
|
Net income per limited partner unit:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.39
|
|
|
$
|
1.27
|
|
|
$
|
1.23
|
|
|
$
|
1.31
|
|
Diluted
|
|
$
|
1.39
|
|
|
$
|
1.27
|
|
|
$
|
1.23
|
|
|
$
|
1.31
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
|
$
|
159,246
|
|
|
$
|
149,297
|
|
|
$
|
153,680
|
|
|
$
|
170,713
|
|
Operating income
|
|
115,602
|
|
|
104,200
|
|
|
106,309
|
|
|
124,925
|
|
||||
Net income
|
|
$
|
101,125
|
|
|
$
|
133,305
|
|
|
$
|
100,375
|
|
|
$
|
120,321
|
|
Net income per limited partner unit:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
1.18
|
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
1.27
|
|
Diluted
|
|
$
|
1.18
|
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
1.26
|
|
(a)
|
Quarterly net income per limited partner unit amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding and changes in outstanding units.
|
Name
|
|
Age
|
|
Position with EQT Midstream Services, LLC
|
Julian M. Bott
|
|
54
|
|
Director
|
Michael A. Bryson
|
|
70
|
|
Director
|
Philip P. Conti
|
|
57
|
|
Director
|
Randall L. Crawford
|
|
54
|
|
Executive Vice President and Chief Operating Officer
|
Lewis B. Gardner
|
|
59
|
|
Director
|
Robert J. McNally
|
|
46
|
|
Director, Senior Vice President and Chief Financial Officer
|
David L. Porges
|
|
59
|
|
Chairman, President and Chief Executive Officer
|
Steven T. Schlotterbeck
|
|
51
|
|
Director
|
Jimmi Sue Smith
|
|
44
|
|
Chief Accounting Officer
|
Lara E. Washington
|
|
49
|
|
Director
|
•
|
David L. Porges
1
, Chairman, President and Chief Executive Officer;
|
•
|
Robert J. McNally, Senior Vice President and Chief Financial Officer;
|
•
|
Randall L. Crawford
2
, Executive Vice President and Chief Operating Officer;
|
•
|
Jimmi Sue Smith, Chief Accounting Officer;
|
•
|
Philip P. Conti
3
, former Senior Vice President and Chief Financial Officer; and
|
•
|
Theresa Z. Bone
4
, former Vice President, Finance and Chief Accounting Officer.
|
ADJUSTED 2016 EQT EBITDA
COMPARED TO
BUSINESS PLAN
|
|
PAYOUT MULTIPLE*
|
More than 10% above plan
|
|
EQT MDC Committee Discretion
|
10% above plan
|
|
2.00
|
5% above plan
|
|
1.25
|
At plan
|
|
1.00
|
5% below plan
|
|
0.50
|
More than 5% below plan
|
|
No payment
|
BUSINESS UNIT VALUE DRIVER RESULTS
|
|
PAYOUT MULTIPLE*
|
Stretch
|
|
3.00
|
Exceeds
|
|
2.00
|
Successful
|
|
1.00
|
Fails to meet expectations
|
|
No payment
|
TYPE OF AWARD
|
APPROXIMATE PERCENT OF AWARDED VALUE
|
RATIONALE
|
|
Smith
|
Bone
|
||
2016 EQT Stock Options
|
N/A
|
25%
|
Stock options encourage executives to focus broadly on behaviors that should lead to a sustained long-term increase in the price of EQT stock, which benefits all EQT shareholders.
|
2016 Incentive PSU Program
|
50%
|
75%
|
The 2016 Incentive PSU Program performance units drive long-term value directly related to EQT stock performance but allow for the delivery of some value, assuming relative performance, even if EQT’s stock price declines. Performance units have stronger retention value than options but less leverage in a rising stock price environment.
|
2016 VDPSU Program
|
50%
|
N/A
|
The 2016 VDPSU Program focuses individual performance on activities aligned with EQT’s business plan and on EQT, business unit and individual value drivers, which activities are critical to EQT’s long-term success.
|
•
|
the EQT Corporation 2014 Executive Performance Incentive Program (the 2014 Incentive PSU Program);
|
•
|
the EQT Corporation 2015 Executive Performance Incentive Program (the 2015 Incentive PSU Program); and
|
•
|
the EQT Corporation 2015 Value Driver Award Program (the 2015 VDPSU);
|
•
|
the 2014 Incentive PSU Program;
|
•
|
the 2015 Incentive PSU Program; and
|
•
|
three-year cliff vested options with a ten-year term granted on January 1, 2015;
|
•
|
the EQT Corporation 2013 Executive Performance Incentive Program in EQT common stock;
|
•
|
the EQT Midstream Partners, LP Total Return Program in EQM common units;
|
•
|
fifty percent of the performance awards under the 2015 VDPSU in EQT common stock; and
|
•
|
the EQT restricted stock units awarded in connection with the sale of Equitable Gas Company, LLC in EQT common stock.
|
TYPE OF AWARD
|
APPROXIMATE PERCENT OF AWARDED VALUE
|
RATIONALE
|
2017 EQT Restricted Share Units
|
25%
|
EQT restricted stock awards are a strong retention tool for executives, though not as focused on driving performance than performance units.
|
2017 Incentive PSU Program
|
25%
|
The 2017 Incentive PSU Program performance units drive long-term value directly related to EQT stock performance but allow for the delivery of some value, assuming relative performance, even if EQT’s stock price declines.
|
2017 VDPSU Program
|
50%
|
The 2017 VDPSU Program focuses individual performance on activities aligned with EQT’s business plan and on EQT, business unit and individual value drivers, which activities are critical to EQT’s long-term success.
|
NAME AND PRINCIPAL POSITION
|
YEAR
|
SALARY
|
BONUS
|
STOCK AWARDS
|
OPTION AWARDS
|
NON-EQUITY
INCENTIVE PLAN
COMPENSATION
|
ALL OTHER
COMPENSATION
|
TOTAL
|
|||||||
|
($) (1)
|
($) (2)
|
($) (3)
|
($) (4)
|
($) (5)
|
($) (6)
|
($)
|
||||||||
David L. Porges
President and Chief Executive Officer
|
2016
|
850,000
|
|
—
|
|
4,926,468
|
|
1,133,118
|
|
2,500,000
|
|
369,062
|
|
9,778,648
|
|
2015
|
850,000
|
|
1,000,000
|
|
6,690,025
|
|
1,072,610
|
|
2,100,000
|
|
393,613
|
|
12,106,248
|
|
|
2014
|
850,000
|
|
—
|
|
4,169,644
|
|
1,059,100
|
|
2,275,000
|
|
400,156
|
|
8,753,900
|
|
|
Robert J. McNally Senior Vice President and Chief Financial Officer
|
2016
|
323,550
|
|
500,000
|
|
3,008,725
|
|
692,265
|
|
660,000
|
|
53,837
|
|
5,238,377
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Randall L. Crawford Executive Vice President and Chief Operating Officer
|
2016
|
463,501
|
|
—
|
|
1,524,254
|
|
350,658
|
|
940,000
|
|
217,021
|
|
3,495,434
|
|
2015
|
460,905
|
|
500,000
|
|
2,936,499
|
|
471,630
|
|
900,000
|
|
200,457
|
|
5,469,491
|
|
|
2014
|
448,461
|
|
—
|
|
2,150,834
|
|
547,350
|
|
962,500
|
|
204,558
|
|
4,313,703
|
|
|
Jimmi Sue Smith Chief Accounting Officer
|
2016
|
214,298
|
|
—
|
|
299,280
|
|
—
|
|
230,000
|
|
29,969
|
|
773,547
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Philip P. Conti Former Senior Vice President and Chief Financial Officer
|
2016
|
431,400
|
|
—
|
|
—
|
|
—
|
|
115,000
|
|
178,645
|
|
725,045
|
|
2015
|
426,516
|
|
500,000
|
|
2,517,402
|
|
403,970
|
|
780,000
|
|
183,881
|
|
4,811,769
|
|
|
2014
|
404,846
|
|
—
|
|
1,843,334
|
|
469,475
|
|
840,000
|
|
178,022
|
|
3,735,677
|
|
|
Theresa Z. Bone Former Vice President, Finance and Chief Accounting Officer
|
2016
|
247,717
|
|
—
|
|
357,236
|
|
82,593
|
|
—
|
|
1,440,244
|
|
2,127,790
|
|
2015
|
297,116
|
|
100,000
|
|
1,069,614
|
|
173,130
|
|
255,000
|
|
63,779
|
|
1,958,639
|
|
|
2014
|
285,000
|
|
—
|
|
1,026,173
|
|
—
|
|
275,000
|
|
59,481
|
|
1,645,654
|
|
|
|
INSURANCE
|
|
401(K)
CONTRIBUTIONS
|
|
2006
PAYROLL
DEDUCTION AND
CONTRIBUTION
PROGRAM
|
|
PAYMENTS IN CONNECTION WITH TERMINATION
|
|
PERQUISITES
(SEE BELOW)
|
|
TOTAL
|
||||||
NAME
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
||||||
David L. Porges
|
|
1,938
|
|
|
23,850
|
|
|
283,650
|
|
|
—
|
|
|
59,624
|
|
|
369,062
|
|
Robert J. McNally
|
|
739
|
|
|
15,900
|
|
|
3,513
|
|
|
—
|
|
|
33,685
|
|
|
53,837
|
|
Randall L. Crawford
|
|
1,058
|
|
|
23,850
|
|
|
116,865
|
|
|
—
|
|
|
75,248
|
|
|
217,021
|
|
Jimmi Sue Smith
|
|
554
|
|
|
19,287
|
|
|
—
|
|
|
—
|
|
|
10,128
|
|
|
29,969
|
|
Philip P. Conti
|
|
985
|
|
|
23,850
|
|
|
100,776
|
|
|
—
|
|
|
53,034
|
|
|
178,645
|
|
Theresa Z. Bone
|
|
513
|
|
|
21,671
|
|
|
—
|
|
|
1,384,837
|
|
|
33,223
|
|
|
1,440,244
|
|
|
|
CAR
ALLOWANCE
|
|
COUNTRY AND
DINING CLUB
ANNUAL DUES
|
|
FINANCIAL
PLANNING
|
|
PARKING
|
|
PHYSICAL
|
|
OTHER
|
|
TOTAL
PERQUISITES
|
|||||||
NAME
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|||||||
David L. Porges
|
|
9,180
|
|
|
16,244
|
|
|
15,000
|
|
|
2,400
|
|
|
15,200
|
|
|
1,600
|
|
|
59,624
|
|
Robert J. McNally
|
|
6,969
|
|
|
10,195
|
|
|
—
|
|
|
—
|
|
|
8,867
|
|
|
7,654
|
|
|
33,685
|
|
Randall L. Crawford
|
|
9,060
|
|
|
13,984
|
|
|
11,700
|
|
|
2,400
|
|
|
7,600
|
|
|
30,504
|
|
|
75,248
|
|
Jimmi Sue Smith
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|
1,705
|
|
|
3,800
|
|
|
123
|
|
|
10,128
|
|
Philip P. Conti
|
|
9,060
|
|
|
11,374
|
|
|
15,000
|
|
|
2,400
|
|
|
15,200
|
|
|
—
|
|
|
53,034
|
|
Theresa Z. Bone
|
|
7,143
|
|
|
10,480
|
|
|
7,500
|
|
|
2,400
|
|
|
5,700
|
|
|
—
|
|
|
33,223
|
|
|
|
|
|
ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS
|
ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS
|
ALL OTHER STOCK AWARDS; NUMBER OF SHARES OF STOCK OR UNITS
|
ALL OTHER OPTION AWARDS; NUMBER OF SECURITIES UNDERLYING OPTIONS
|
EXERCISE OR BASE PRICE OF OPTION AWARDS
|
GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS
|
||||||||||||||||
NAME
|
TYPE OF AWARD
|
GRANT DATE
|
APPROVAL DATE
|
THRESHOLD
|
TARGET
|
MAXIMUM
|
THRESHOLD
|
TARGET
|
MAXIMUM
|
||||||||||||||||
|
(1)
|
|
|
($)
|
($) (2)
|
($) (2)
|
(#)
|
(#) (3)
|
(#) (3)
|
(#) (4)
|
(#)
|
($/SH)
|
($)
|
||||||||||||
David L. Porges
|
PSU
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69,780
|
|
209,340
|
|
—
|
|
—
|
|
—
|
|
4,926,468
|
|
ESTIP
|
—
|
|
—
|
|
—
|
|
850,000
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
SO
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
78,200
|
|
52.13
|
|
1,133,118
|
|
|
Robert J. McNally
|
PSU
|
3/21/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
35,530
|
|
106,590
|
|
—
|
|
—
|
|
—
|
|
2,508,418
|
|
ESTIP
|
—
|
|
—
|
|
—
|
|
242,665
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
SO
|
3/21/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
39,900
|
|
63.33
|
|
692,265
|
|
|
RS
|
3/21/2016
|
|
3/7/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,900
|
|
—
|
|
—
|
|
500,307
|
|
|
Randall L. Crawford
|
PSU
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21,590
|
|
64,770
|
|
—
|
|
—
|
|
—
|
|
1,524,254
|
|
ESTIP
|
—
|
|
—
|
|
—
|
|
385,000
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
SO
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24,200
|
|
52.13
|
|
350,658
|
|
|
Jimmi Sue Smith
|
PSU
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000
|
|
3,000
|
|
—
|
|
—
|
|
—
|
|
70,600
|
|
RSTIP
|
—
|
|
—
|
|
—
|
|
102,360
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
RS
|
9/14/2016
|
|
9/14/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,500
|
|
—
|
|
—
|
|
176,550
|
|
|
VDPSU
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000
|
|
3,000
|
|
—
|
|
—
|
|
—
|
|
52,130
|
|
|
Philip P. Conti
|
ESTIP
|
—
|
|
—
|
|
—
|
|
320,000
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Theresa Z. Bone
|
PSU
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,060
|
|
15,180
|
|
—
|
|
—
|
|
—
|
|
357,236
|
|
ESTIP
|
—
|
|
—
|
|
—
|
|
135,000
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
SO
|
1/1/2016
|
|
12/1/2015
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,700
|
|
52.13
|
|
82,593
|
|
(1)
|
Type of Award:
|
ADJUSTED 2016 EQT EBITDA
COMPARED TO
BUSINESS PLAN
|
|
PERCENTAGE OF ADJUSTED 2016
EQT EBITDA AVAILABLE FOR ALL
EQT EXECUTIVE OFFICER 2016
ANNUAL INCENTIVE AWARDS
|
At or above plan
|
|
2%
|
5% below plan
|
|
1.5%
|
25% below plan
|
|
1%
|
Greater than 25% below plan
|
|
No bonus
|
ADJUSTED 2016 EQT EBITDA
COMPARED TO
BUSINESS PLAN
|
|
PAYOUT MULTIPLE*
|
More than 10% above plan
|
|
EQT MDC Committee Discretion
|
10% above plan
|
|
2.00
|
5% above plan
|
|
1.25
|
At plan
|
|
1.00
|
5% below plan
|
|
0.50
|
More than 5% below plan
|
|
No bonus
|
BUSINESS UNIT VALUE DRIVER RESULTS
|
|
PAYOUT MULTIPLE*
|
Stretch
|
|
3.00
|
Exceeds
|
|
2.00
|
Successful
|
|
1.00
|
Fails to meet expectations
|
|
No bonus
|
•
|
EQT’s TSR over the period January 1, 2014 through December 31, 2016, as ranked among the comparably measured TSR of the applicable peer group; and
|
•
|
EQT’s compound annual production sales volume growth over the performance period.
|
•
|
no payout if EQT was one of the nine lowest-ranking companies in the applicable peer group as to TSR and had compound annual production sales volume growth over the performance period of less than 0%;
|
•
|
to target payout if EQT ranked seventeenth through fourteenth in the applicable peer group as to TSR and had compound annual production sales volume growth over the performance period equal to 10%;
|
•
|
to three times the target award if EQT was one of the four highest-ranking companies in the applicable peer group as to TSR and had compound annual production sales volume growth over the performance period of at least 30%.
|
•
|
EQT’s TSR over the period January 1, 2015 through December 31, 2017, as ranked among the comparably measured TSR of the applicable peer group; and
|
•
|
EQT’s compound annual production sales volume growth over the performance period.
|
•
|
no payout if EQT is one of the nine lowest-ranking companies in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period of less than 0%;
|
•
|
to target payout if EQT ranks seventeenth through fourteenth in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period equal to 6.4%;
|
•
|
to three times the target award if EQT is one of the four highest-ranking companies in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period of at least 26.4%.
|
•
|
EQT’s TSR over the period January 1, 2016 through December 31, 2018, as ranked among the comparably measured TSR of the applicable peer group; and
|
•
|
EQT’s compound annual production sales volume growth over the performance period.
|
•
|
no payout if EQT is one of the nine lowest-ranking companies in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period of less than 0%;
|
•
|
to target payout if EQT ranks fourteenth through twelfth in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period equal to 5.0%;
|
•
|
to three times the target award if EQT is one of the three highest-ranking companies in the applicable peer group as to TSR and has compound annual production sales volume growth over the performance period of at least 25.0%.
|
•
|
no payment if the adjusted 2016 EQT EBITDA was less than EQT’s business plan; or
|
•
|
three times the number of target awards granted if the adjusted 2016 EQT EBITDA equaled or exceeded EQT’s business plan, subject to the EQT MDC Committee’s discretion to determine that a lower performance multiple applied. In exercising its discretion, the EQT MDC Committee was to consider and be guided by performance on EQT, business unit and individual value drivers.
|
OPTION AWARDS
|
EQUITY AWARDS
|
|||||||||||||||
|
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
EXERCISABLE
|
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
UNEXERCISABLE
|
OPTION
EXERCISE
PRICE
|
OPTION
EXPIRATION
DATE
|
NUMBER OF
SHARES OR
UNITS OF
STOCK
THAT HAVE
NOT
VESTED
|
MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED
|
EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS THAT
HAVE NOT
VESTED
|
EQUITY
INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE
OF UNEARNED
SHARES, UNITS
OR OTHER
RIGHTS THAT
HAVE NOT
VESTED
|
||||||||
|
(#)
|
(#) (1)
|
($)
|
|
(#) (2)
|
($) (3)
|
(#) (4)
|
($) (5)
|
||||||||
David L. Porges
|
76,700
|
|
—
|
|
44.84
|
|
1/1/2018
|
|
—
|
|
—
|
|
75,198
|
|
4,917,949
|
|
105,800
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
—
|
|
—
|
|
142,719
|
|
9,333,823
|
|
|
92,400
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
69,905
|
|
4,571,787
|
|
|
—
|
|
47,600
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
53,900
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
78,200
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Robert J. McNally
|
—
|
|
39,900
|
|
63.33
|
|
1/1/2026
|
|
—
|
|
—
|
|
35,575
|
|
2,326,605
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,910
|
|
517,314
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Randall L. Crawford
|
38,500
|
|
—
|
|
44.84
|
|
1/1/2018
|
|
—
|
|
—
|
|
38,790
|
|
2,536,866
|
|
44,800
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
—
|
|
—
|
|
62,646
|
|
4,097,048
|
|
|
44,100
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
21,629
|
|
1,414,537
|
|
|
—
|
|
24,600
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
23,700
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
24,200
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||||||||
Jimmi Sue Smith
|
—
|
|
—
|
|
—
|
|
—
|
|
2,501
|
|
163,565
|
|
2,592
|
|
169,517
|
|
—
|
|
—
|
|
—
|
|
—
|
|
936
|
|
61,214
|
|
2,076
|
|
135,770
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,002
|
|
65,531
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,006
|
|
196,592
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Philip P. Conti
|
32,400
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
—
|
|
—
|
|
33,243
|
|
2,174,092
|
|
31,400
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
53,703
|
|
3,512,176
|
|
|
—
|
|
21,100
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
20,300
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Theresa Z. Bone
|
5,000
|
|
—
|
|
44.84
|
|
1/1/2018
|
|
—
|
|
—
|
|
8,919
|
|
583,303
|
|
8,700
|
|
—
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
22,818
|
|
1,492,297
|
|
|
5,700
|
|
—
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
5,069
|
|
331,513
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The options reflected in this column are EQT options which vest according to the following schedule: the options expiring in 2024 vested on January 1, 2017, the options expiring in 2025 will vest on January 1, 2018 and the options expiring in 2026 will vest on January 1, 2019. The vesting of option awards may accelerate. See “Potential Payments Upon Termination or Change of Control” below for a discussion of, among other things, a revised vesting schedule and circumstances under which the vesting of an award will accelerate.
|
(2)
|
This column reflects (i) the McNally EQT Restricted Share Award (including accrued dividends), (ii) the Smith EQT Restricted Share Award (including accrued dividends) and (iii) with respect to Ms. Smith, outstanding performance awards (including accrued dividends) under the EQT Corporation 2015 Value Driver Award Program (2015 VDPSU Program). The McNally EQT Restricted Share Award was granted on March 21, 2016 and is expected to vest on March 21, 2017. The Smith EQT Restricted Share Award was granted on September 14, 2016 and is expected to vest on September 14, 2019. Ms. Smith’s performance awards under the
|
(3)
|
This column reflects the payout values at December 31, 2016 of the McNally EQT Restricted Share Award, the Smith EQT Restricted Share Award and, in the case of Ms. Smith, unvested performance awards under the 2015 VDPSU Program (including accrued dividends in each case) determined by multiplying the number of shares or units, as applicable, shown in the previous column by $65.40, the closing price of EQT’s common stock on December 31, 2016. The actual payout value will depend upon EQT’s stock price upon vesting.
|
(4)
|
This column reflects performance units awarded but that had not yet vested at December 31, 2016 pursuant to the 2014 Incentive PSU Program, the 2015 Incentive PSU Program and the 2016 Incentive PSU Program (including accrued dividends in each case). For Ms. Smith, this column also reflects performance units awarded but that had not yet vested at December 31, 2016 pursuant to the 2016 VDPSU Program (including accrued dividends). The number of performance units under the 2014 Incentive PSU Program, the 2015 Incentive PSU Program and the 2016 VDPSU Program reflect maximum award levels because, through December 31, 2016, payout was projected above the target level for each program. The number of performance awards under the 2016 Incentive PSU Program reflects target award levels because, through December 31, 2016, payout was projected below target. Awards under the 2015 Incentive PSU Program and the 2016 Incentive PSU Program do not vest until payment following the end of the respective performance periods. Awards under the 2014 Incentive PSU Program and fifty percent of the 2016 VDPSU Program will vest upon payment which is expected to occur in the first quarter of 2017. The vesting of the awards under the 2014 Incentive PSU Program, 2015 Incentive PSU Program, 2016 Incentive PSU Program and 2016 VDPSU Program may accelerate. See “Potential Payments Upon Termination or Change of Control” below for a discussion of, among other things, circumstances under which the vesting of an award will accelerate.
|
(5)
|
This column reflects the payout values at December 31, 2016 of unearned performance units granted under the 2014 Incentive PSU Program, the 2015 Incentive PSU Program, the 2016 Incentive PSU Program and the 2016 VDPSU Program (including accrued dividends in each case). The payout values are determined by multiplying the number of units as shown in the column to the left by $65.40, the closing price of EQT’s common stock on December 31, 2016. The actual payout values under the 2014 Incentive PSU Program, the 2015 Incentive PSU Program and the 2016 Incentive PSU Program will depend upon, among other things, EQT’s actual performance through the end of the applicable performance periods and EQT’s closing stock price on the payout date.
|
|
|
OPTION AWARDS
|
|
STOCK AWARDS
|
||||||||
|
|
NUMBER OF EQT SHARES ACQUIRED ON EXERCISE
|
|
VALUE REALIZED ON EXERCISE
|
|
NUMBER OF EQT SHARES/EQM UNITS ACQUIRED ON VESTING
|
|
VALUE REALIZED ON VESTING
|
||||
NAME
|
|
(#)
|
|
($) (1)
|
|
(#) (2)
|
|
($) (3)
|
||||
David L. Porges
|
|
—
|
|
|
—
|
|
|
99,895
|
|
|
6,269,621
|
|
Robert J. McNally
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Randall L. Crawford
|
|
21,400
|
|
|
714,332
|
|
|
41,937
|
|
|
2,581,747
|
|
Jimmi Sue Smith
|
|
—
|
|
|
—
|
|
|
4,513
|
|
|
264,342
|
|
Philip P. Conti
|
|
—
|
|
|
—
|
|
|
25,478
|
|
|
1,524,220
|
|
Theresa Z. Bone
|
|
—
|
|
|
—
|
|
|
9,863
|
|
|
578,105
|
|
(1)
|
The value realized on exercise is calculated as the difference between the market price of the shares of EQT common stock underlying the options at exercise and the applicable exercise price of those options.
|
(2)
|
This column reflects the following awards that vested in 2016:
|
•
|
For all named executive officers - the number of performance awards (including accrued dividends) under the 2013 Executive Performance Incentive Program (2013 Incentive PSU Program), which vested and were distributed in EQT common stock on February 25, 2016;
|
•
|
For Messrs. Crawford, Porges, and Conti, and Ms. Bone - the number of performance units (including accrued distributions) under the EQM Total Return Program (EQM TR Program), which vested and were distributed in EQM common units on February 25, 2016;
|
•
|
For Ms. Bone - the number of restricted shares (including accrued dividends), which vested and were distributed in EQT common stock on January 31, 2016 and the number of performance awards (including accrued dividends) under the EQT Corporation 2014 Value Driver Performance Award Program (2014 VDPSU Program). Fifty percent of the performance awards confirmed by the EQT MDC Committee under the 2014 VDPSU Program (the second and final tranche) vested and were paid out in cash on February 25, 2016; and
|
•
|
For Ms. Smith - the number of performance awards (including accrued dividends or distributions) under the 2014 VDPSU Program, the EQM 2014 Value Driver Performance Award Program (2014 EQM VDPSU Program) and the 2015 VDPSU Program. On February 25, 2016, fifty percent of the performance awards confirmed by the EQT MDC Committee under the 2014 VDPSU Program (the second and final tranche) vested and were paid out in cash; fifty percent of the confirmed performance awards under the 2014 EQM VDPSU Program (the second and final tranche) vested and were distributed in EQM common units; and fifty percent of the confirmed performance awards under the 2015 VDPSU Program (the first tranche) vested and were distributed in EQT common stock.
|
(3)
|
This column reflects the value realized upon the vesting of (i) performance awards under the 2013 Incentive PSU Program, the EQM TR Program, the 2014 VDPSU Program, the 2014 EQM VDPSU Program and the 2015 VDPSU Program (including in each case accrued dividends or distributions) and (ii) Ms. Bone’s restricted shares. The value realized on vesting of the 2013 Incentive PSU Program, the 2014 EQM VDPSU Program, the 2015 VDPSU Program, and the EQM TR Program was calculated based on the number of performance awards that vested and the closing price of EQT’s common stock or EQM’s common units, as applicable, on February 25, 2016. The value realized on vesting of Ms. Bone’s restricted shares was calculated based on EQT’s closing stock price on January 31, 2016. The value realized on vesting of the 2014 VDPSU Program was calculated based on the number of performance awards that vested and the closing price of EQT’s common stock on December 31, 2015.
|
•
|
restrictions on competition (12 months);
|
•
|
restrictions on customer solicitation (12 months); and
|
•
|
restrictions on employee, consultant, vendor or independent contractor recruitment (36 months).
|
•
|
Severance payments
:
|
▪
|
Salary continuation for a period of twelve (12) months from the date of termination;
|
▪
|
a lump sum equal to the average annual incentive earned by Ms. Smith for the three (3) full years prior to Ms. Smith’s termination date; and
|
▪
|
$25,000.
|
•
|
Benefits payment.
A lump sum cash payment equal to the monthly COBRA rate for family coverage, multiplied by 12.
|
•
|
Vesting of time-based equity awards.
Stock options, restricted stock, restricted stock units and other stock awards with time-based vesting restrictions will become immediately vested and exercisable in full and any restrictions on such awards shall lapse.
|
•
|
Vesting of performance-based equity awards.
Performance-based equity awards other than awards under the 2015 VDPSU Program, the 2016 VDPSU Program and similar programs will remain outstanding and will be earned, if at all, based on actual performance through the end of the performance period as if Ms. Smith’s employment had not been terminated.
|
•
|
Vesting of 2015 VDPSU Program, the 2016 VDPSU Program awards and similar programs.
If Ms. Smith’s termination date occurs before the relevant performance level has been approved by the EQT MDC Committee, the award will be earned based on “target” levels of performance. If Ms. Smith’s termination date occurs after the relevant performance level has been approved by the EQT MDC Committee, the award will be earned based on actual levels of performance. In each case, the number of award shares earned shall immediately become vested and payable as of the date of termination.
|
TERMINATION DATE
|
AWARDED UNITS
|
September 10, 2016 – September 9, 2017
|
0%
|
September 10, 2017 – September 9, 2018
|
25%
|
September 10, 2018 and thereafter
|
50%
|
2015 VDPSU PROGRAM
|
|
TERMINATION DATE
|
AWARDED UNITS
|
January 1, 2016 and thereafter
|
50%
|
2016 VDPSU PROGRAM
|
|
TERMINATION DATE
|
AWARDED UNITS
|
Prior to January 1, 2017
|
0%
|
January 1, 2017 and thereafter
|
50%
|
•
|
the awards are not assumed by the surviving entity of the change of control, all time-based vesting restrictions on the EQT restricted shares or units lapse and any unvested performance awards under the 2015 VDPSU Program and the 2016 VDPSU Program will vest;
|
•
|
the awards are assumed by the surviving entity of the change of control or EQT is the surviving entity and Ms. Smith’s employment is involuntarily terminated or she resigns for good reason within two years after the qualifying change of control, then awards under the 2015 VDPSU Program, the 2016 VDPSU Program and
|
•
|
following the conclusion of the plan year but prior to payment, Ms. Smith or her estate will be entitled to the payment Ms. Smith would have received had she been employed as of the date of the payment of the incentive award; or
|
•
|
prior to the conclusion of the plan year, Ms. Smith or her estate may be eligible for a payment of a pro-rated incentive award based on the amount of Ms. Smith’s active service during such plan year and contingent upon satisfaction of the performance criteria contained in the EQT Regular STIP.
|
EXECUTIVE BENEFITS
AND PAYMENTS UPON TERMINATION
|
TERMINATION BY EQT WITHOUT CAUSE
($)
|
TERMINATION BY EQT FOR CAUSE
($)
|
TERMINATION BY EXECUTIVE FOR GOOD REASON
($)
|
TERMINATION BY EXECUTIVE WITHOUT GOOD REASON
($)
|
DEATH
($)
|
DISABILITY
($)
|
|||||
Compensation:
|
|
|
|
|
|
|
|||||
Cash Payment of Base Salary
|
242,250
|
|
0
|
242,250
|
|
0
|
|
0
|
|
0
|
|
Cash Payment of Short-Term Incentives
|
149,717
|
|
0
|
149,717
|
|
230,000
|
|
230,000
|
|
230,000
|
|
Other Benefits and Perquisites:
|
|
|
|
|
|
|
|||||
EQT Severance Benefit
|
99,173
|
|
0
|
0
|
|
0
|
|
0
|
|
0
|
|
Post-Termination Health Care / Insurance
|
7,570
|
|
0
|
0
|
|
0
|
|
0
|
|
0
|
|
Life Insurance Proceeds
|
0
|
|
0
|
0
|
|
0
|
|
243,000
|
|
0
|
|
Cash Payment
|
16,270
|
|
0
|
16,270
|
|
0
|
|
0
|
|
0
|
|
Outplacement Services or Cash in Lieu
|
25,000
|
|
0
|
25,000
|
|
0
|
|
0
|
|
0
|
|
Total (excluding long-term incentive)
|
539,980
|
|
0
|
433,237
|
|
230,000
|
|
473,000
|
|
230,000
|
|
•
|
An annual cash retainer of $47,000 (which increased to $50,000 in 2017).
|
•
|
A cash meeting fee of $1,500 for each Board and committee meeting attended in person. If a director participates in a meeting by telephone, the meeting fee is $750.
|
•
|
For the Audit Committee Chair and the Conflicts Committee Chair, an annual committee chair retainer of $10,000 (which, for the Audit Committee Chair, increased to $15,000 in 2017).
|
NAME
|
|
FEES EARNED OR PAID IN CASH
($) (1)
|
|
STOCK
AWARDS
($) (2)
|
|
ALL OTHER
COMPENSATION
($) (3)
|
|
TOTAL
($)
|
||||
Michael A. Bryson
|
|
78,000
|
|
|
65,650
|
|
|
33,467
|
|
|
177,117
|
|
Julian M. Bott
|
|
75,000
|
|
|
65,650
|
|
|
2,545
|
|
|
143,195
|
|
Lara E. Washington
|
|
68,000
|
|
|
65,650
|
|
|
10,795
|
|
|
144,445
|
|
(1)
|
Includes annual cash retainer, meeting fees and committee chair fees.
|
(2)
|
This column reflects the aggregate grant date fair values determined in accordance with FASB ASC Topic 718 for the phantom units awarded to each director during
2016
. On January 1,
2016
, the EQM General Partner granted 870 phantom units to each non-employee director. The grant date fair value is computed as the sum of the number of phantom units awarded on the grant date multiplied by the closing price of EQM’s common units on the business day prior to the grant, which closing price was $75.46 on
December 31, 2015
.
|
(3)
|
This column reflects (i) annual premiums of $44.55 per director paid for life insurance and travel accident insurance policies and (ii) the following matching gifts made to qualifying organizations under the EQT Foundation’s Matching Gifts Program: Mr. Bryson - $33,422; Mr. Bott - $2,500; and Ms. Washington - $10,750. The non-employee directors may use a de minimis number of tickets purchased by EQT to attend sporting or other events when such tickets are not otherwise being used for business purposes. The use of such tickets does not result in any incremental costs to EQM.
|
•
|
each of the directors of the EQM General Partner;
|
•
|
each of the named executive officers of the EQM General Partner; and
|
•
|
all directors and executive officers of the EQM General Partner as a group.
|
NAME OF BENEFICIAL OWNER (1)
|
|
EQM COMMON
UNITS
BENEFICIALLY
OWNED (2) (3)
|
|
PERCENTAGE
OF EQM
COMMON
UNITS
BENEFICIALLY
OWNED
|
|
EQGP COMMON UNITS BENEFICIALLY OWNED (2)
|
|
PERCENTAGE
OF EQGP
COMMON
UNITS
BENEFICIALLY
OWNED
|
David L. Porges
|
|
42,148
|
|
*
|
|
56,263
|
|
*
|
Robert J. McNally
|
|
—
|
|
*
|
|
—
|
|
*
|
Randall L. Crawford
|
|
32,897
|
|
*
|
|
100,000
|
|
*
|
Lewis B. Gardner
|
|
9,359
|
|
*
|
|
28,503
|
|
*
|
Steven T. Schlotterbeck
|
|
7,897
|
|
*
|
|
37,762
|
|
*
|
Jimmi Sue Smith
|
|
2,146
|
|
*
|
|
7,538
|
|
*
|
Julian M. Bott
|
|
9,895
|
|
*
|
|
—
|
|
*
|
Michael A. Bryson (4)
|
|
11,545
|
|
*
|
|
—
|
|
*
|
Lara E. Washington
|
|
4,909
|
|
*
|
|
—
|
|
*
|
Philip P. Conti
|
|
13,268
|
|
*
|
|
—
|
|
*
|
Theresa Z. Bone
|
|
10,000
|
|
*
|
|
—
|
|
*
|
All directors and executive officers as a group (11 individuals)
|
|
144,064
|
|
*
|
|
230,066
|
|
*
|
(1)
|
Unless otherwise indicated, the address for all beneficial owners in this table is c/o EQT Midstream Partners, LP, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222, Attn: Corporate Secretary.
|
(2)
|
This column reflects the number of common units held of record or owned through a bank, broker or other nominee.
|
(3)
|
For Messrs. Bott and Bryson and Ms. Washington, this column includes phantom units, including accrued distributions, to be settled in EQM common units, in the following amounts: Mr. Bott - 7,895 units; Mr. Bryson - 7,895 units; and Ms. Washington - 4,909 units.
|
(4)
|
EQM common units beneficially owned include 2,000 common units that are held in Mrs. Bryson's revocable trust.
|
Name
|
|
Exercisable
Stock Options (1)
|
|
Number of EQT Shares
Beneficially Owned (2)
|
|
Percent of
Class (3)
|
David L. Porges
(4)
|
|
322,500
|
|
519,534
|
|
*
|
Robert J. McNally
|
|
—
|
|
15,560
|
|
*
|
Randall L. Crawford
|
|
152,000
|
|
78,939
|
|
*
|
Lewis B. Gardner
|
|
20,300
|
|
39,648
|
|
*
|
Steven T. Schlotterbeck
(5)
|
|
153,700
|
|
152,002
|
|
*
|
Jimmi Sue Smith
|
|
—
|
|
751
|
|
*
|
Julian M. Bott
|
|
—
|
|
—
|
|
—
|
Michael A. Bryson
|
|
—
|
|
—
|
|
—
|
Lara E. Washington
|
|
—
|
|
—
|
|
—
|
Philip P. Conti
(6)
|
|
84,900
|
|
73,384
|
|
*
|
Theresa Z. Bone
|
|
19,400
|
|
26,231
|
|
*
|
All directors and executive officers as a group (11 individuals)
|
|
752,800
|
|
906,049
|
|
*
|
(1)
|
This column reflects the number of shares of EQT common stock that the executive officers and directors had a right to acquire within 60 days after
February 1, 2017
through the exercise of stock options.
|
(2)
|
This column reflects shares held of record and shares owned through a bank, broker or other nominee, including, for EQT employees, shares owned through EQT’s 401(k) plan.
|
(3)
|
This column reflects (i) the sum of the shares beneficially owned and the stock options exercisable within 60 days of
February 1, 2017
, as a percentage of (ii) the sum of EQT’s outstanding shares at
February 1, 2017
, and all options exercisable within 60 days of
February 1, 2017
.
|
(4)
|
Shares beneficially owned include 50,000 shares that are held in a trust of which Mr. Porges is a co-trustee and in which he shares voting and investment power.
|
(5)
|
Shares beneficially owned include 28,012 shares owned by Mr. Schlotterbeck's wife.
|
(6)
|
Shares beneficially owned include 5,000 shares that are held in the Conti Family Foundation in which Mr. Conti has sole voting and investment power.
|
NAME OF BENEFICIAL
OWNER
|
|
COMMON UNITS BENEFICIALLY OWNED
|
|
PERCENTAGE OF COMMON UNITS BENEFICIALLY OWNED
|
||
EQT Corporation
(1)
|
|
21,811,643
|
|
|
27.1
|
%
|
625 Liberty Avenue
|
|
|
|
|
|
|
Pittsburgh, PA 15222
|
|
|
|
|
|
|
Tortoise Capital Advisors, L.L.C.
(2)
|
|
7,793,194
|
|
|
10.1
|
%
|
11550 Ash Street, Suite 300
|
|
|
|
|
|
|
Leawood, KS 66211
|
|
|
|
|
|
|
ALPS Advisors, Inc.
(3)
|
|
4,287,352
|
|
|
5.53
|
%
|
1290 Broadway, Suite 1100
|
|
|
|
|
||
Denver, CO 80203
|
|
|
|
|
(1)
|
EQGP held
21,811,643
EQM common units as of
February 1, 2017
. EQT is the ultimate parent company of EQGP and, therefore, may be deemed to beneficially own the units held by EQGP.
|
(2)
|
Information based on a SEC Schedule 13G filed on January 8, 2016 reporting that Tortoise Capital Advisors, L.L.C. has sole voting and dispositive power over 115,848 common units, shared voting power over 7,044,356 common units and shared dispositive power over 7,677,346 common units.
|
(3)
|
Information based on a SEC Schedule 13G filed on February 3, 2016 reporting that ALPS Advisors, Inc. has shared voting and dispositive power over
4,287,352
common units, of which
4,268,459
common units are attributable to Alerian MLP ETF, an investment company to which ALPS Advisors, Inc. furnishes investment advice. Alerian MLP ETF has shared voting and dispositive power with respect to the
4,268,459
common units.
|
PLAN CATEGORY
|
|
NUMBER OF
SECURITIES TO
BE
ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS,
WARRANTS
AND RIGHTS
|
|
WEIGHTED
AVERAGE
EXERCISE PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
|
|
NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
FUTURE ISSUANCE
UNDER
EQUITY
COMPENSATION
PLANS (EXCLUDING
SECURITIES
REFLECTED IN
COLUMN A)
|
|||
|
|
(A)
|
|
(B)
|
|
(C)
|
|||
Equity Compensation Plans Approved by Unitholders
|
|
—
|
|
|
—
|
|
|
—
|
|
Equity Compensation Plans Not Approved by Unitholders
(1)
|
|
231,754
|
|
|
N/A
|
|
|
1,536,492
|
|
Total
|
|
231,754
|
|
|
N/A
|
|
|
1,536,492
|
|
(1)
|
The Board adopted the 2012 Long-Term Incentive Plan in connection with the IPO of EQM’s common units.
|
•
|
EQM’s obligation to reimburse EQT and its affiliates for certain direct operating expenses paid on EQM’s behalf;
|
•
|
EQM’s obligation to reimburse EQT and its affiliates for providing EQM corporate, general and administrative services (the “general and administrative expenses”);
|
•
|
EQM’s obligation to reimburse EQT and its affiliates for operation and management services pursuant to the operation and management services agreement with EQT, as described below under "Operation and Management Services Agreement" (the “operation and management expenses”);
|
•
|
EQT's obligation to indemnify or reimburse EQM for losses or expenses relating to or arising from, among other things, (i) certain plugging and abandonment obligations; (ii) certain bare steel replacement capital expenditures; (iii) certain pipeline safety costs; (iv) certain tax liabilities attributable to periods prior to the IPO; (v) assets previously owned by Equitrans, L.P. (Equitrans) and retained by EQT and its affiliates, including the Sunrise Pipeline; (vi) any claims related to Equitrans' previous ownership of the Big Sandy Pipeline; and (vii) any amounts owed to EQM by a third party that has exercised a contractual right of offset against amounts owed by EQT to such third party;
|
•
|
EQM’s obligation to indemnify EQT for losses attributable to (i) EQM's ownership or operation of assets acquired by EQM from EQT at the time of the IPO, except to the extent EQT is obligated to indemnify EQM for such losses pursuant to the operation and management services agreement; and (ii) any amounts owed to EQT by a third party that has exercised a contractual right of offset against amounts owed by EQM to such third party; and
|
•
|
EQM’s use of the name "EQT" and related marks.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
DESCRIPTION OF EXPENSES
|
|
|
|
|
|
|
|
||||
Reimbursement of operation and management expenses
|
$
|
33,526
|
|
|
$
|
31,310
|
|
|
$
|
21,999
|
|
Reimbursement of general and administrative expenses
|
$
|
63,255
|
|
|
$
|
46,149
|
|
|
$
|
25,051
|
|
•
|
Plugging and abandonment liabilities.
For a period of ten years after the closing of the IPO, which occurred on July 2, 2012, EQT is required to reimburse EQM for plugging and abandonment expenditures and other expenditures for certain identified wells of EQT and third parties. The reimbursement obligation of EQT with respect to wells owned by third parties is capped at $1.2 million per year.
|
•
|
Bare steel replacement.
EQT is required to reimburse EQM for bare steel replacement capital expenditures in the event that ongoing maintenance capital expenditures (other than capital expenditures associated with plugging and abandonment liabilities to be reimbursed by EQT) exceed $17.2 million (with respect to EQM’s assets at the time of the IPO) in any year. If such ongoing maintenance capital expenditures and bare steel replacement capital expenditures exceed $17.2 million during a year, EQT is required to reimburse EQM for the lesser of (i) the amount of bare steel replacement capital expenditures during such year and (ii) the amount by which such ongoing capital expenditures and bare steel replacement capital expenditures exceeds $17.2 million. This bare steel replacement reimbursement obligation is capped at an aggregate amount of $31.5 million over the ten years following the IPO.
|
•
|
Pipeline Safety Cost Tracker Reimbursement.
For a period of five years after the closing of the IPO, EQT is required to reimburse EQM for the amount by which the qualifying pipeline safety costs included in the annual pipeline safety cost tracker filings made by Equitrans with the FERC exceed the qualifying pipeline safety costs actually recovered each year.
|
•
|
Taxes.
Until 60 days after the expiration of any applicable statute of limitations, EQT will indemnify EQM for any income taxes attributable to operations or ownership of the assets prior to the closing of the IPO, including any such income tax liability of EQT and its affiliates that may result from EQM’s formation transactions.
|
•
|
Retained liabilities.
EQT is required to indemnify EQM for any liabilities, claims or losses relating to or arising from assets owned or previously owned by EQM and retained by EQT and its affiliates following the closing of the IPO.
|
•
|
Big Sandy Pipeline.
EQT is required to indemnify EQM for any claims related to Equitrans' previous ownership of the Big Sandy Pipeline, which was sold to a third party, including claims arising under the Big Sandy Purchase Agreement.
|
•
|
Contractual Offsets.
EQT is required to indemnify EQM for any amounts owed to EQM by a third party that has exercised a contractual right of offset against amounts owed by EQT to such third party.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
DESCRIPTION OF OBLIGATION
|
|
|
|
|
|
|
|
||||
Plugging and abandonment liabilities
|
$
|
440
|
|
|
$
|
26
|
|
|
$
|
500
|
|
Bare steel replacement
|
—
|
|
|
6,268
|
|
|
—
|
|
|||
Other capital reimbursements
|
$
|
162
|
|
|
$
|
1,198
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Thousands)
|
||||||||||
DESCRIPTION OF REVENUE
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
380,164
|
|
|
$
|
321,173
|
|
|
$
|
220,775
|
|
Transmission and storage
|
$
|
171,189
|
|
|
$
|
141,198
|
|
|
$
|
116,357
|
|
•
|
approved by the Conflicts Committee of the EQM General Partner, although the EQM General Partner is under no obligation to seek such approval;
|
•
|
approved by the vote of a majority of the outstanding common units, excluding any common units owned by the EQM General Partner or any of its affiliates;
|
•
|
determined by the Board to be on terms no less favorable to EQM than those generally being provided to or available from unrelated third parties; or
|
•
|
determined by the Board to be fair and reasonable to EQM, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to EQM.
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Audit fees
(1)
|
$
|
843,092
|
|
|
$
|
1,119,436
|
|
Audit-related fees
(2)
|
15,000
|
|
|
52,500
|
|
||
Tax fees
|
—
|
|
|
—
|
|
||
All other fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
858,092
|
|
|
$
|
1,171,936
|
|
(1)
|
Includes fees for the audit of EQM’s annual financial statements and internal control over financial reporting, reviews of financial statements included in EQM’s quarterly reports on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings or engagements, including certain attest engagements, comfort letter procedures and consents.
|
(2)
|
Includes fees for services associated with EQM acquisitions from EQT and attest engagements not required by statute or regulation.
|
•
|
Bookkeeping or other services related to the accounting records or financial statements
|
•
|
Financial information systems design and implementation
|
•
|
Appraisal or valuation services, fairness opinions or contribution-in-kind reports
|
•
|
Actuarial services
|
•
|
Internal audit outsourcing services
|
•
|
Management functions
|
•
|
Human resources functions
|
•
|
Broker-dealer, investment adviser or investment banking services
|
•
|
Legal services
|
•
|
Expert services unrelated to the audit
|
•
|
Prohibited tax services
|
(a)
|
|
1
|
|
|
Financial Statements
|
|
|
|
|
The financial statements listed in the accompanying index to financial statements are filed as part of this Annual Report on Form 10-K.
|
|
|
|
2
|
|
|
Financial Statement Schedules
|
|
|
|
|
All schedules are omitted since the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the schedules.
|
|
|
|
3
|
|
|
Exhibits
|
|
|
|
|
The exhibits listed on the accompanying index to exhibits are filed as part of this Annual Report on Form 10-K.
|
|
|
Page Reference
|
Statements of Consolidated Operations for each of the three years in the period ended December 31, 2016
|
|
|
Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 2016
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
|
Statements of Consolidated Partners’ Capital for each of the three years in the period ended December 31, 2016
|
|
|
Notes to Consolidated Financial Statements
|
|
Exhibits
|
Description
|
Method of Filing
|
2.1
|
Agreement and Plan of Merger, dated as of July 15, 2013, by and among EQT Investments Holdings, LLC, EQT Midstream Services, LLC, Sunrise Pipeline, LLC, EQT Midstream Partners, LP and Equitrans, L.P. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on July 15, 2013.
|
2.2
|
Contribution Agreement, dated as of April 30, 2014, by and among EQT Midstream Partners, LP, EQT Midstream Services, LLC, EQM Gathering Opco, LLC and EQT Gathering, LLC. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on April 30, 2014.
|
2.3
|
Contribution and Sale Agreement, dated as of March 10, 2015, by and among EQT Midstream Partners, LP, EQT Midstream Services, LLC, EQM Gathering Opco, LLC, EQT Corporation, EQT Gathering, LLC, EQT Energy Supply Holdings, LP, and EQT Energy, LLC. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on March 10, 2015.
|
2.4
|
Purchase and Sale Agreement, dated as of October 13, 2016, by and among EQT Corporation, EQT Gathering Holdings, LLC, EQT Gathering, LLC, EQT Midstream Partners, LP, Equitrans Investments, LLC, Equitrans, L.P. and EQM Gathering Opco, LLC. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on October 13, 2016.
|
3.1
|
Certificate of Limited Partnership of EQT Midstream Partners, LP.
|
Incorporated herein by reference to Exhibit 3.1 to Form S-1 Registration Statement (#333-179487) filed on February 13, 2012.
|
3.2
|
First Amended and Restated Agreement of Limited Partnership of EQT Midstream Partners, LP, dated as of July 2, 2012.
|
Incorporated herein by reference to Exhibit 3.2 to Form 8-K (#001-35574) filed on July 2, 2012.
|
3.3
|
Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of EQT Midstream Partners, LP, dated as of July 24, 2014.
|
Incorporated herein by reference to Exhibit 3.1 to Form 10-Q (#001-35574) for the quarterly period ended June 30, 2014.
|
3.4
|
Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of EQT Midstream Partners, LP, dated as of July 23, 2015.
|
Incorporated herein by reference to Exhibit 3.1 to Form 10-Q (#001-35574) for the quarterly period ended June 30, 2015.
|
3.5
|
Certificate of Formation of EQT Midstream Services, LLC.
|
Incorporated herein by reference to Exhibit 3.3 to Form S-1 Registration Statement (#333-179487) filed on February 13, 2012.
|
3.6
|
Third Amended and Restated Limited Liability Company Agreement of EQT Midstream Services, LLC, dated as of May 15, 2015.
|
Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-35574) filed on May 15, 2015.
|
4.1
|
Indenture, dated as of August 1, 2014, by and among EQT Midstream Partners, LP, as issuer, the subsidiaries of EQT Midstream Partners, LP party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
Incorporated herein by reference to Exhibit 4.1 to Form 8-K (#001-35574) filed on August 1, 2014.
|
4.2
|
First Supplemental Indenture, dated as of August 1, 2014, by and among EQT Midstream Partners, LP, as issuer, the subsidiaries of EQT Midstream Partners, LP party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee.
|
Incorporated herein by reference to Exhibit 4.2 to Form 8-K (#001-35574) filed on August 1, 2014.
|
Exhibits
|
Description
|
Method of Filing
|
10.25(a)
|
Second Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC, dated as of March 10, 2015, by and among MVP Holdco, LLC, US Marcellus Gas Infrastructure, LLC, WGL Midstream, Inc., Vega Midstream MVP LLC, VED NPI IV, LLC and Mountain Valley Pipeline, LLC. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items was granted by the SEC. The redacted material has been separately filed with the SEC.
|
Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-35574) filed on March 31, 2015.
|
10.25(b)
|
First Amendment to Second Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC, dated as of January 21, 2016, by and among MVP Holdco, LLC, US Marcellus Gas Infrastructure, LLC and Mountain Valley Pipeline, LLC. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items was granted by the SEC. The redacted material has been separately filed with the SEC.
|
Incorporated herein by reference to Exhibit 10.1 to Form 10-Q (#001-35574) for the quarterly period ended March 31, 2016.
|
10.25(c)
|
Second Amendment to Second Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC, dated as of October 24, 2016, by and among MVP Holdco, LLC, US Marcellus Gas Infrastructure, LLC, WGL Midstream, Inc., Vega Midstream MVP LLC, VED NPI IV, LLC and Mountain Valley Pipeline, LLC. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items has been requested from the SEC. The redacted material has been separately filed with the SEC.
|
Filed herewith as Exhibit 10.25(c).
|
12.1
|
Ratio of Earnings to Fixed Charges.
|
Filed herewith as Exhibit 12.1.
|
21.1
|
List of Subsidiaries of EQT Midstream Partners, LP.
|
Filed herewith as Exhibit 21.1.
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
Filed herewith as Exhibit 23.1.
|
31.1
|
Rule 13(a)-14(a) Certification of Principal Executive Officer.
|
Filed herewith as Exhibit 31.1.
|
31.2
|
Rule 13(a)-14(a) Certification of Principal Financial Officer.
|
Filed herewith as Exhibit 31.2.
|
32
|
Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.
|
Furnished herewith as Exhibit 32.
|
99.1
|
Named Executive Officer Compensation 2016 Peer Companies (General Industry).
|
Incorporated herein by reference to Exhibit 99 to Form 10-K (#001-35574) for the year ended December 31, 2015.
|
99.2
|
Named Executive Officer Compensation 2017 Peer Companies (General Industry).
|
Filed herewith as Exhibit 99.2.
|
101
|
Interactive Data File.
|
Filed herewith as Exhibit 101.
|
|
EQT Midstream Partners, LP
|
|
|
|
|
|
By: EQT Midstream Services, LLC, its General Partner
|
|
|
|
|
|
By:
|
/s/ DAVID L. PORGES
|
|
|
David L. Porges
|
|
|
President and Chief Executive Officer
|
|
|
February 9, 2017
|
/s/ DAVID L. PORGES
|
|
Chairman, President and Chief Executive Officer
|
|
February 9, 2017
|
David L. Porges
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT J. MCNALLY
|
|
Director, Senior Vice President and Chief Financial Officer
|
|
February 9, 2017
|
Robert J. McNally
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
/s/ JIMMI SUE SMITH
|
|
Chief Accounting Officer
|
|
February 9, 2017
|
Jimmi Sue Smith
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ JULIAN M. BOTT
|
|
Director
|
|
February 9, 2017
|
Julian M. Bott
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL A. BRYSON
|
|
Director
|
|
February 9, 2017
|
Michael A. Bryson
|
|
|
|
|
|
|
|
|
|
/s/ PHILIP P. CONTI
|
|
Director
|
|
February 9, 2017
|
Philip P. Conti
|
|
|
|
|
|
|
|
|
|
/s/ LEWIS B. GARDNER
|
|
Director
|
|
February 9, 2017
|
Lewis B. Gardner
|
|
|
|
|
|
|
|
|
|
/s/ STEVEN T. SCHLOTTERBECK
|
|
Director
|
|
February 9, 2017
|
Steven T. Schlotterbeck
|
|
|
|
|
|
|
|
|
|
/s/ LARA E. WASHINGTON
|
|
Director
|
|
February 9, 2017
|
Lara E. Washington
|
|
|
|
|
•
|
EQT Corporation Headquarters Short-Term Incentive Program;
|
•
|
EQT Commercial Short-Term Incentive Program;
|
•
|
EQT Production Short-Term Incentive Program; and
|
•
|
EQT Midstream Short-Term Incentive Program.
|
(a)
|
Earnings before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”)
. Subject to Section 6(d) below, EBITDA is calculated as follows:
|
(b)
|
Earnings before Interest, Income Taxes, Depreciation, Amortization and Exploration Expense (“EBITDAX”)
. Subject to Section 6(d) below, EBITDAX is calculated as follows:
|
(c)
|
Peer Group
. The Committee may establish a peer group (“Peer Group”) for purposes of applying any peer comparative to performance measures used in the Plan. Any changes to the Peer Group must be approved by the Committee.
|
(d)
|
Acquisitions/Dispositions
. The calculations set forth in Sections 6(a) and 6(b) shall be adjusted to exclude the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is in excess of $100 million. Such calculations may also be adjusted, in the discretion of the Committee, to exclude the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is in excess of $50 million and less than or equal to $100 million. For the avoidance of doubt, Dropdown Transactions (as hereinafter defined) shall not be deemed to be dispositions for purposes of the Plan. For purposes of the Plan, “Dropdown Transaction” means any transfer of assets, other than in the ordinary course of business, by the Company or any of its affiliates (other than EQT Midstream Partners, LP (the “Partnership”) or any subsidiary of the Partnership) to the Partnership or any subsidiary of the Partnership, whether by sale of assets, merger or otherwise; provided that, upon the transfer of such assets, the assets continue to be consolidated in the Company’s financial statements.
|
(a)
|
All Incentive Programs provide for incentive payments that are funded based on incentive pools. An incentive pool is created for each Incentive Program. The base amount of each incentive pool shall be determined by the extent to which one or more specific and defined financial measures (the “Financial Measures”) and operational and efficiency measures (the “Operational and Efficiency Measures”) are achieved for the Plan Year. In addition, defined operational or strategic measures (“Value Drivers”) may affect the determination of the incentive pool, in the discretion of the Company’s Chief Executive Officer (the “CEO”). The Value Drivers for each of the Incentive Programs are attached hereto as
Attachment A
. For purposes of determining achievement of the Financial Measures under the Plan, the business plan Financial Measures will be adjusted to exclude, as applicable: (i) the planned impact of Dropdown Transactions that are not consummated during the Plan Year; and (ii) if any event occurs after the commencement of the Plan Year that causes the Company to report discontinued operations for 2016 not contemplated in the Company’s 2016 business plan, the components of the business plan Financial Measures attributable to such discontinued operations.
|
(b)
|
The following chart provides the specific Financial and Operational and Efficiency Measures for each of the Incentive Programs:
|
Incentive Program
|
Financial and Operational and Efficiency Measures
|
EQT Corporation Headquarters
|
Company EBITDA to Business Plan (EQT Year to Year Comparison)
|
EQT Midstream, EQT Production and EQT Commercial
|
Business unit EBITDAX
Business unit Operational and Efficiency Measures identified on
Attachment A
|
(c)
|
The base amount of each incentive pool is determined based upon the Financial and Operational and Efficiency Measures listed above. Additional adjustments are made based on any minimum threshold amounts established therefor, and, if applicable, the Value Drivers, in accordance with the weightings assigned to each as listed on
Attachment B
.
Attachment C
to this Plan specifies the base or target amount for each incentive pool, expressed as the total of all Incentive Targets, as defined in Section 8 of the Plan, of those participants in each particular Incentive Program. The targets on
Attachment C
are automatically amended in the event of the addition of new hires as participants, the elimination of the targets of former participants, participant compensation changes and participant moves between pools due to job changes. No incentive pool shall exceed three (3) times the target set forth on
Attachment C
, subject to the adjustments described in the preceding sentence.
|
(d)
|
The CEO may, in his sole and absolute discretion, adjust the determination of the base amount of any business segment incentive pool (i) by any amount ranging from a reduction of up to fifty percent (50%) of the target incentive pool to an increase of up to an additional one hundred fifty percent (150%) of the target incentive pool, in each case based on the Value Drivers applicable to the particular business segment incentive pool, and (ii) by adjusting EBITDAX or EBITDA for the impact of the prices of gas, oil and liquids and/or any extraordinary items, provided that such adjustment shall be limited to the difference between the business plan assumption and the actual impact of such items. The Committee may, in its sole and absolute discretion, adjust the determination of the base amount of the Headquarters incentive pool (i) by any amount based upon earnings per share and (ii) by adjusting EBITDAX or EBITDA for the impact of the prices of gas, oil and liquids and/or any extraordinary items or performance factors determined by the Committee, provided that such adjustment shall be limited to the difference between the business plan assumption and the actual impact of such items. Such adjustments by the CEO or the Committee may be either positive or negative. Notwithstanding the forgoing, under no circumstance shall the aggregate of all incentive pools exceed 6.5% of the Company’s EBITDAX for the Plan Year, calculated without adjusting EBITDAX for the impact of the prices of gas, oil and liquids and/or any extraordinary items or performance factors.
|
(a)
|
Each participant shall have specific performance goals (the “Performance Goals”) determined for his or her position for the Plan Year. These Performance Goals must support the approved business plan of the Company, affiliate or business unit, as applicable, and should identify how the participant will support any specific Value Drivers established.
|
(b)
|
A copy of each participant’s Performance Goals and objectives shall be determined in writing, and kept on file with the appropriate business segment Human Resources Department, by February 28 of the Plan Year to which they relate.
|
(c)
|
Following the determination of the incentive pools as described in Section 7, an evaluation of each participant’s actual performance relative to his or her individual Performance Goals for the Plan Year shall be completed. Performance can be rated as Outstanding Performer, Exceeds Expectations, Successful, Partially Successful, Fails to Meet Expectations and Not Rated. The definition of each rating is as follows:
|
Performance Level
|
Performance Definition
|
Outstanding Performer
|
Recognized leader in the department, business unit and/or Company. Contributes to the organization’s success by adding significant value well beyond job requirements. Identifies opportunities and provides unique, innovative and practical solutions to problems. Consistently exceeds expectations and demonstrates a unique understanding of work beyond assigned area of responsibility.
|
Exceeds Expectations
|
Makes significant contributions to department, business unit and/or Company’s business results. Overall performance far exceeds all requirements necessary to fulfill the principal duties, responsibilities, objectives and expectations of the position.
|
Performance Level
|
Performance Definition
|
Successful
|
Overall performance meets all and may exceed some of the requirements necessary to fulfill the principal duties, responsibilities, objectives and expectations of the position. Produces timely and accurate results. Works independently to perform all aspects of the job. Recognizes, participates in and adjusts to changing work assignments.
|
Partially Successful
|
Overall performance meets most of the requirements necessary to fulfill the principal duties, responsibilities, objectives and expectations of the position. May require additional training, resources or coaching in an area before Successful.
|
Fails to Meet Expectations
|
Overall performance fails to meet all or most of the requirements necessary to fulfill the principal duties, responsibilities, objectives and expectations of the position. Performance Improvement Plan is required.
|
Not Rated
|
Appropriate only for employees who have been in current position less than three months.
|
(1)
|
The incentive pool is determined as described in Section 7. If the established Financial Measures and Operational and Efficiency Measures for the incentive pool are not achieved, the process to calculate Incentive Awards for the related Incentive Program is terminated.
|
(2)
|
The performance of each participant is reviewed by the appropriate business segment or functional officer and the individual performance adjustment described in Section 9, if any, is applied as appropriate to the participant’s original Incentive Target.
|
(3)
|
The Incentive Targets for each participant within an incentive pool, after giving effect to the individual performance adjustments described in Section 9, if any, are totaled. Each participant’s adjusted Incentive Target is then calculated as a
|
(4)
|
The percent assigned to each participant in step 3 is multiplied by the total incentive pool generated, resulting in the amount of the participant’s actual Incentive Award payable, subject to reduction, elimination or substitution of the final incentive pool by the Committee as provided in Section 4.
|
(5)
|
Distributions, if any, may be paid in cash or other property, including shares of Company stock, from the Plan or other source as determined by the Committee, in its discretion.
|
(a)
|
New Hires.
A newly hired employee will participate in the Plan (or successor plan, as applicable) in the Plan Year following the year in which the employee is hired, unless otherwise specified in an applicable employment offer.
|
(b)
|
Involuntary Termination
. No Incentive Award shall be paid to any employee whose services are terminated by the Company prior to payment of an Incentive Award; provided, however, as follows:
|
(c)
|
Voluntary Termination.
No Incentive Award shall be paid to an employee who voluntarily terminates, or gives formal or informal notice of termination of, his/her employment for any reason, including but not limited to resignation, retirement or job abandonment, prior to the payment of an Incentive Award.
|
Programs and Measures
|
Weighting
|
EQT Corporation Headquarters Incentive Program
|
|
Company EBITDA To Business Plan
|
60%
|
Business Unit Value Drivers
|
40%
|
Total
|
100%
|
1.
|
I understand that it is the policy of Equitable to encourage resolution of individual employment disputes, except those excluded by Section I.A. of the ADR Program, through a process of mandatory and binding arbitration.
|
2.
|
I understand that by signing this ADR Program Agreement, I am agreeing to submit all Employment Disputes as defined by Section I.A. of the ADR Program to final and binding arbitration before a neutral Arbitrator.
|
3.
|
I understand that in exchange for agreeing to submit my Employment Disputes to final and binding arbitration in accordance with the ADR Program, I will be eligible to participate in Equitable’ s Short Term Incentive Plan ("STIP") in the 2008 calendar year, and in each year thereafter that the STIP is offered, provided that I am otherwise eligible for the STIP in accordance with its terms.
|
4.
|
I understand that the ADR Program Agreement and the ADR Program affect the forum in which I can file suit against Equitable, and accordingly, I have been provided with an opportunity to seek legal advice before signing this ADR Program Agreement.
|
5.
|
I understand that to invoke the ADR Program, I must have: (1) an Employment Dispute (which is not excluded by the ADR Program) for which the law in that jurisdiction provides a remedy; and (2) exhausted all administrative remedies available for that Employment Dispute. I further understand that this ADR Program Agreement and the ADR Program do not restrict my rights to file administrative charges with the Equal Employment Opportunity Commission, the National Labor Relations Board, or any other similar federal, state or local agency; provided, however, that upon receipt of a notice of right-to-sue or similar administrative determination that does not fully and finally dispose of the Employment Dispute, I shall arbitrate the Employment Dispute in accordance with the ADR Program.
|
6.
|
I understand that I must file a claim under the ADR Program by the later of the following: (1) within one year of the date on which I became aware of the Employment Dispute; or (2) within the applicable statute of limitations provided for that particular Employment Dispute.
|
7.
|
I understand that neither the ADR Program Agreement nor the ADR Program form a contract of employment between Equitable and me and they in no way alter the "at-will" status of my employment. I understand that my employment with Equitable is at-will, which means that my employment, at the option of Equitable or myself, can be terminated at any time, with or without cause and with or without notice.
|
|
|
||
MOUNTAIN VALLEY PIPELINE, LLC
By: MVP Holdco, LLC
Its Member
By:
/s/ Donald M. Jenkins
Name: Donald M. Jenkins
Title: EVP
By: US Marcellus Gas Infrastructure, LLC
Its Member
By:
/s/ Matt Schafer
Name: Matt Schafer
Title: Representative of US Marcellus Gas
Infrastructure, LLC
MVP HOLDCO, LLC
|
|
|
|
|
|
||
By:
/s/ Donald M. Jenkins
|
|
|
|
Name: Donald M. Jenkins
|
|
|
|
Title: EVP
|
|
|
|
|
|
|
|
|
|
|
|
US MARCELLUS GAS INFRASTRUCTURE, LLC
By:
/s/ Matt Schafer
Name: Matt Schafer
Title: Representative of US Marcellus Gas
Infrastructure, LLC
|
|
|
|
WGL MIDSTREAM, INC.
By:
/s/ Terry McCallister
Terry McCallister
Chairman of the Board
|
|
|
|
|
VEGA MIDSTREAM MVP LLC
By:
/s/ David A. Modesett
David A. Modesett
President
|
|
|
VED NPI IV, LLC
By:
/s/ David A. Modesett
David A. Modesett
President
|
|
|
Name, Address, Fax and E-mail
|
Sharing
Ratio
|
Parent
|
Representative and Alternate Representatives
|
MVP HOLDCO, LLC
EQT Plaza
625 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Fax: (412) 553-7781
Attention: Blue Jenkins
[***]
David Gray
[***]
Sean McGinty
[***]
with a copy to:
Baker Botts L.L.P.
98 San Jacinto Blvd., Suite 1500
Austin, Texas 78701
Fax: (512) 322-8349
Attn: Michael L. Bengtson
[***]
|
45.5%
|
EQT Midstream Partners, LP
|
David Gray – Representative
Blue Jenkins – Alternate Representative
|
US MARCELLUS GAS INFRASTRUCTURE, LLC
601 Travis Street
Suite 1900
Houston, Texas 77002
Fax: 713.751.0375
Attention: Lawrence A. Wall, Jr.
[***]
Karina Amelang
[***]
|
31%
|
NextEra Energy Capital Holdings, Inc.
|
TJ Tuscai, Chief Executive Officer – Representative
Lawrence A. Wall, Jr., President – Alternate Representative
|
WGL MIDSTREAM, INC.
c/o WGL Holdings, Inc.
101 Constitution Avenue, N.W.
Washington, DC 20080
Fax: (202) 624-6655
Attn: Anthony M. Nee
[***]
|
10%
|
WGL Holdings, Inc.
|
N/A
|
(a)
|
“Confirmation Date” means the date of the EQT Compensation Committee’s certification of achievement of the Threshold Performance Goal, determination of the Performance Multiplier and approval of the Confirmed Performance Awards, but no later than March 1, 2015.
|
(b)
|
“Confirmed Performance Awards” means the number of Performance Awards (rounded to the nearest whole Common Unit) equal to the Target Award times the Performance Multiplier, as determined by the EQT Compensation Committee in accordance with
Exhibit A
; provided, however, that if an EQT Change of Control, an EQM Change of Control or a Unit Delisting Event occurs on or before the Confirmation Date and while Grantee remains employed by the Company and/or its Affiliates, the number of Confirmed Performance Awards shall equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations. The term “Confirmed Performance Awards” shall also include any Performance Awards accumulated after the Confirmation Date or, if earlier, an EQT Change of Control, an EQM Change of Control or a Unit Delisting Event pursuant to Section 4 below.
|
(c)
|
“EQM Change of Control” means a “Change of Control” as defined in the EQM Plan.
|
(d)
|
“EQT Board” means the Company’s Board of Directors.
|
(e)
|
“EQT Change of Control” means a “Change of Control” as defined in the EQT Plan.
|
(f)
|
“EQT Compensation Committee” means the Management Development and Compensation Committee of the EQT Board.
|
(g)
|
“GP Board” means the Board of Directors of EQM Services, the general partner of EQM.
|
(h)
|
“Payment Date” is defined in Section 3 of this Agreement.
|
(i)
|
“Performance Multiplier” means the percentage, from 0% to 300%, that will be applied to the Target Award to determine the maximum number of Performance Awards that may ultimately vest and convert to Common Units based on Grantee’s continued employment through the applicable Vesting Date(s), as more fully described in
Exhibit A
hereto.
|
(j)
|
“Pro Rata Amount” is defined in Section 2 of this Agreement.
|
(k)
|
“Target Award” means the number of Performance Awards indicated on the cover page hereof as being the original Target Award, plus any Performance Awards accumulated from distribution equivalents on the Target Award prior to the Confirmation Date or, if earlier, an EQT Change of Control, an EQM Change of Control or a Unit Delisting Event pursuant to Section 4 below.
|
(l)
|
“Threshold Performance Goal” means the level of 2014 EBITDA, as indicated on
Exhibit A
hereto, that must be achieved in order for any Performance Awards to be earned by Grantee pursuant to this Agreement (absent an EQT Change of Control, an EQM Change of Control or a Unit Delisting Event occurring on or before the Confirmation Date).
|
(m)
|
“Unit Delisting Event” means the date on which the Common Units cease to be publicly traded on an established securities market.
|
(n)
|
“Vesting Date” is defined in Section 2 of this Agreement.
|
(o)
|
“2014 EBITDA” means EQM’s earnings before interest, any income taxes, depreciation and amortization for the fiscal year ending December 31, 2014, excluding the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is equal to or in excess
|
(a)
|
as to 50% of the Confirmed Performance Awards, upon the Payment Date on or following January 1, 2015, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, and
|
(b)
|
as to 50% of the Confirmed Performance Awards, upon the Payment Date on or following January 1, 2016, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(c)
|
as to 100% of the unpaid Confirmed Performance Awards, upon the occurrence of an EQT Change of Control, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(d)
|
as to the Pro Rata Amount only, upon the termination of Grantee’s employment on or after
January 1, 2015 under the circumstances described in the following sentence. |
Termination Date
|
|
Percent Vesting
|
Prior to January 1, 2015
|
|
0%
|
January 1, 2015 and thereafter
|
|
50%
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than 60 days after January 1, 2015. Except as set forth below, such awards shall be paid on the Payment Date in Common Units, equal to one Common Unit times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(b) shall be a date selected by the Company that is no later than 60 days after January 1, 2016. Except as set forth below, such awards shall be paid on the Payment Date in Common Units, equal to one Common Unit times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant an EQT Change of Control as provided under Section 2(c) shall be the closing date of the EQT Change of Control. Except as set forth below, such awards shall be paid on the Payment Date in Common Units, equal to one Common Unit times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(d) shall be a date selected by the Company that is no later than 60 days after Grantee’s qualifying termination of employment. Except as set forth below, such awards shall be paid on the Payment Date in Common Units, equal to one Common Unit times the number of Confirmed Performance Awards then vesting.
|
(b)
|
Specific reference to pertinent Agreement, EQT Plan, or EQM Plan provisions on which the decision is based,
|
(c)
|
A description of any additional material or information necessary for Grantee to perfect a claim and an explanation of why such material or information is necessary, and
|
(a)
|
If 2014 EBITDA (as adjusted, if at all, in accordance with Section 2 below) is less than EQM’s 2014 business plan EBITDA, the Performance Multiplier shall be 0% and the entire Award will be forfeited without further consideration or any act or action by Grantee.
|
(b)
|
If 2014 EBITDA (as adjusted, if at all, in accordance with Section 2 below) is equal to EQM’s 2014 business plan EBITDA or above, the Performance Multiplier will be 300%, subject to the EQT Compensation Committee’s discretion to determine that a lower Performance Multiplier shall apply to this Award. In exercising such discretion, the EQT Compensation Committee shall consider and be guided by the following considerations: (i) the financial performance measures and value drivers of the applicable short-term incentive program of the Company for calendar year 2014, and (ii) if desired, Grantee’s individual performance on his or her 2014 EQM-related value drivers. Notwithstanding its certification of the Performance Multiplier on the Confirmation Date, the EQT Compensation Committee may further reduce the Performance Multiplier at any time prior to December 31, 2015 in the event that any of the value driver results used to originally determine the Performance Multiplier are determined to be materially inaccurate, regardless of whether misconduct of any person was involved or whether the inaccuracy leads to a restatement of financial results. The EQT Compensation Committee may choose not to reduce the Performance Multiplier based on the facts and circumstances or legal constraints.
|
(a)
|
The EQT Compensation Committee may, in circumstances determined by the EQT Compensation Committee to be appropriate in its discretion, adjust 2014 EBITDA upward or downward for the impact on such financial measure resulting from (i) extraordinary items, (ii) a new lease related to the Allegheny Valley Connector, (iii) acquisitions and/or dispositions less than $100 million, and/or (iv) any recast of EQM’s 2014 financial statements related to EQM’s acquisition of assets under common control.
|
(b)
|
In the event any acquisition by EQM from the Company and/or any of its Affiliates included in EQM’s 2014 business plan is not consummated in the month reflected in such business plan but is consummated on or prior to December 31, 2014, 2014 EBITDA may be adjusted upward or
|
(c)
|
In the event any acquisition by EQM from the Company and/or any of its Affiliates included in EQM’s 2014 business plan is not consummated on or prior to December 31, 2014, 2014 EBITDA shall be adjusted to include the planned impact of such acquisition.
|
(a)
|
“Good Reason” means Grantee’s resignation within 90 days after: (i) a reduction in Grantee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Grantee’s annual short-term bonus target of 10% or more (unless the reduction is applicable to all similarly situated employees); (iii) a significant diminution in Grantee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Grantee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement.
|
(b)
|
“Payment Date” is defined in Section 4 of this Agreement.
|
(c)
|
“Pro Rata Amount” is defined in Section 3 of this Agreement.
|
(d)
|
“Qualifying Change of Control” means a Change of Control (as then defined in the Plan) unless (i) Grantee’s Restricted Stock Units are assumed by the surviving entity of the Change of Control (or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee) or (ii) the Company is the surviving entity of the Change of Control.
|
(e)
|
“Qualifying Termination” means the involuntary termination by the Company (or, as applicable, its successor) of Grantee’s employment as a result of (i) the sale, consolidation or full or partial shutdown of a facility, department or business unit; (ii) a position elimination because of a reorganization or lack of work; or (iii) Grantee’s death or Disability.
|
(f)
|
“Restricted Stock Units” means collectively, the original number of restricted stock units awarded to Grantee on the Grant Date as designated in the first paragraph of this Agreement together with any additional restricted stock units accumulated from dividend equivalents in accordance with Section 5 of this Agreement.
|
(g)
|
“Vesting Date” is defined in Section 2 of this Agreement.
|
(a)
|
as to 100% of the Restricted Stock Units, on the third anniversary of the Grant Date, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(b)
|
as to 100% of the Restricted Stock Units, upon the occurrence of a Qualifying Change of Control, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(c)
|
as to 100% of the Restricted Stock Units, upon (i) the termination of Grantee’s employment under the circumstances described in clause (i) under Section 3(a) below or (ii) Grantee’s qualifying resignation under the circumstances described in clause (ii) under Section 3(a) below, or
|
(d)
|
as to the Pro Rata Amount only, upon the termination of Grantee’s employment under the circumstances described in Section 3(b) below.
|
(a)
|
Notwithstanding Section 9 of the Plan, in the event that following a Change of Control that is not a Qualifying Change of Control, (i) Grantee’s employment is terminated and such termination is a Qualifying Termination or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the effective date of the Change of Control, the Restricted Stock Units will vest.
|
(b)
|
Except as provided in Section 3(a) above, if Grantee’s employment is terminated and such termination is a Qualifying Termination, the Restricted Stock Units will vest as follows (such percentage of Restricted Stock Units then vesting is defined as the “Pro Rata Amount”):
|
Termination Date
|
|
Percent Vesting
|
Prior to the first anniversary of the Grant Date
|
|
0%
|
On or after the first anniversary of the Grant Date and prior to the second anniversary of the Grant Date
|
|
25%
|
On or after the second anniversary of the Grant Date and prior to the third anniversary of the Grant Date
|
|
50%
|
•
|
The Payment Date for Restricted Stock Units vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than five business days after the third anniversary of the Grant Date. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock as of the business day immediately preceding the third anniversary of the Grant Date, times (ii) the number of Restricted Stock Units then vesting.
|
•
|
The Payment Date for Restricted Stock Units vesting pursuant to Section 2(b) shall be the closing date of the Qualifying Change of Control. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock as of the business day immediately preceding the closing date of the Qualifying Change of Control, times (ii) the number of Restricted Stock Units then vesting.
|
•
|
The Payment Date for Restricted Stock Units vesting pursuant to Sections 2(c) and 2(d) shall be a date selected by the Company that is: (i) if a Qualifying Termination under the circumstances described in clause (i) of Section 3(a) above, no later than five business days after such Qualifying Termination (or no later than five business days after any release of claims required under Section 3(a) becomes effective), or (ii) if a qualifying resignation under the circumstances described in clause (ii) of Section 3(a) above, as soon as reasonably practicable after such qualifying resignation (or no later than five business days after any release of claims required under Section 3(a) becomes effective), or (iii) if a Qualifying Termination under the circumstances described Section 3(b) above, no later than five business days after the release of claims becomes effective. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock as of the last business day of the month preceding the date of the applicable employment termination, times (ii) the number of Restricted Stock Units then vesting.
|
(a)
|
“Confirmation Date” means the date of the Committee’s certification of achievement of the Threshold Performance Goal, determination of the Performance Multiplier and approval of the Confirmed Performance Awards, but no later than March 1, 2016.
|
(b)
|
“Confirmed Performance Awards” means the number of Performance Awards (rounded to the nearest whole share) equal to the Target Award times the Performance Multiplier, as determined by the Committee in accordance with
Exhibit A
; provided, however, that if (i) a Qualifying Change of Control occurs on or before the Confirmation Date and while Grantee remains employed by the Company and/or its Affiliates, or (ii) Grantee’s employment is terminated under the circumstances described in Section 3(a) below on or before the Confirmation Date, the number of Confirmed Performance Awards shall in each case equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations. The term “Confirmed Performance Awards” shall also include any Performance Awards converted from dividend equivalents after the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(c)
|
“Dropdown Transaction” means any transfer of assets, other than in the ordinary course of business, by the Company or any Affiliate (other than the Partnership and any subsidiary of the Partnership) to the Partnership or any subsidiary of the Partnership, whether by sale of assets, merger or otherwise; provided that, upon the transfer of such assets, the assets continue to be consolidated in the Company’s financial statements.
|
(d)
|
“Good Reason” means Grantee’s resignation within 90 days after: (i) a reduction in Grantee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Grantee’s annual short-term bonus target of 10% or more (unless the reduction is applicable to all similarly situated employees); (iii) a significant diminution in Grantee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Grantee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement.
|
(e)
|
“Partnership” means EQT Midstream Partners, LP, an Affiliate of the Company.
|
(f)
|
“Payment Date” is defined in Section 4 of this Agreement.
|
(g)
|
“Performance Multiplier” means the percentage, from 0% to 300%, that will be applied to the Target Award to determine the maximum number of Performance Awards that may ultimately vest and convert to shares of Common Stock based on Grantee’s continued employment through the applicable Vesting Date(s), as more fully described in
Exhibit A
hereto.
|
(h)
|
“Pro Rata Amount” is defined in Section 3 of this Agreement.
|
(i)
|
“Qualifying Change of Control” means a Change of Control (as then defined in the Plan) unless (i) all outstanding Performance Awards awarded pursuant to 2015 Value Driver Performance Award Agreements are assumed by the surviving entity of the Change of Control (or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee) or (ii) the Company is the surviving entity of the Change of Control.
|
(j)
|
“Qualifying Termination” means the involuntary termination by the Company (or, as applicable, its successor) of Grantee’s employment as a result of (i) the sale, consolidation or full or partial shutdown of a facility, department or business unit; (ii) a position elimination because of a reorganization or lack of work; or (iii) Grantee’s death or Disability.
|
(k)
|
“Target Award” means the number of Performance Awards indicated on the cover page hereof as being the original Target Award, plus any Performance Awards converted from dividend equivalents on the Target Award prior to the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(l)
|
“Threshold Performance Goal” means the level of 2015 EBITDA, as indicated on
Exhibit A
hereto, that must be achieved in order for any Performance Awards to be earned by Grantee pursuant to this Agreement (absent a Qualifying Change of Control occurring or the termination of Grantee’s employment under the circumstances described in Section 3(a) below, in each case on or before the Confirmation Date).
|
(m)
|
“Vesting Date” is defined in Section 2 of this Agreement.
|
(n)
|
“2015 EBITDA” means the Company’s income from continuing operations (which shall, for the avoidance of doubt, include income attributable to noncontrolling interests) before interest, income taxes, depreciation and amortization for the fiscal year ending December 31, 2015, (i) calculated using a fixed gas price equal to the price per Mcfe used in the Company’s 2015 business plan, (ii) normalized for weather, and (iii) excluding the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is in excess of $100 million. The impact of acquisitions and/or dispositions in excess of $50 million and less than or equal to $100 million may be considered for the purpose of the Committee’s exercise of downward discretion as described in
Exhibit A
. For the avoidance of doubt, neither Dropdown Transactions nor the contribution or other transfer of the Company’s interest in Mountain Valley Pipeline, LLC or the assets comprising the Mountain Valley Pipeline and related facilities to the Partnership or any subsidiary of the Partnership shall be deemed to be dispositions for purposes of calculating 2015 EBITDA.
|
(a)
|
as to 50% of the Confirmed Performance Awards, upon the Payment Date on or following January 1, 2016, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, and
|
(b)
|
as to 50% of the Confirmed Performance Awards, upon the Payment Date on or following January 1, 2017, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(c)
|
as to 100% of the unpaid Confirmed Performance Awards, upon the occurrence of a Qualifying Change of Control, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(d)
|
as to 100% of the unpaid Confirmed Performance Awards, upon (i) the termination of Grantee’s employment under the circumstances described in clause (i) under Section 3(a) below or (ii) Grantee’s qualifying resignation under the circumstances described in clause (ii) under Section 3(a) below, or
|
(e)
|
as to the Pro Rata Amount only, upon the termination of Grantee’s employment under the circumstances described in Section 3(b) below.
|
(a)
|
Notwithstanding Section 9 of the Plan, in the event that following a Change of Control that is not a Qualifying Change of Control, (i) Grantee’s employment is terminated and such termination is a Qualifying Termination or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the effective date of the Change of Control, any unvested Confirmed Performance Awards will vest.
|
(b)
|
Except as provided in Section 3(a) above, if Grantee’s employment is terminated and such termination is a Qualifying Termination, any unvested Confirmed Performance Awards will vest as follows (such percentage of Confirmed Performance Awards then vesting is defined as the “Pro Rata Amount”):
|
Termination Date
|
|
Percent Vesting
|
Prior to January 1, 2016
|
|
0%
|
January 1, 2016 and thereafter
|
|
50%
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than 60 days after January 1, 2016. Except as set forth below, such awards shall be paid on the Payment Date in shares of Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(b) shall be a date selected by the Company that is no later than 60 days after January 1, 2017. Except as set forth below, such awards shall be paid on the Payment Date in shares of Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(c) shall be the closing date of the Qualifying Change of Control. Except as set forth below, such awards shall be paid on the Payment Date in shares of Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.
|
•
|
The Payment Date for Confirmed Performance Awards vesting pursuant to Sections 2(d) and 2(e) shall be a date selected by the Company that is: (i) if a Qualifying Termination under the circumstances described in clause (i) of Section 3(a) above or the circumstances described in Section 3(b) above, no later than 60 days after such Qualifying Termination, or (ii) if a qualifying resignation under the circumstances described in clause (ii) of Section 3(a) above, as soon as reasonably practicable after such qualifying resignation. Except as set forth below, such awards shall be paid on the Payment Date in shares of Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.
|
•
|
If 2015 EBITDA is less than the Company’s 2015 business plan EBITDA, the Performance Multiplier shall be 0% and the entire Award shall be forfeited without further consideration or any act or action by Grantee.
|
•
|
If 2015 EBITDA is equal to the Company’s 2015 business plan EBITDA or above, the Performance Multiplier will be 300%, subject to the Committee’s discretion to determine that a lower Performance Multiplier shall apply to this Award. In exercising such discretion, the Committee shall consider and be guided by the following considerations: (i) the financial performance measures and value drivers of the applicable short-term incentive program of the Company for calendar year 2015, and (ii) if desired, Grantee’s individual performance on his or her 2015 value drivers. Notwithstanding its certification of the Performance Multiplier on the Confirmation Date, the Committee may further reduce the Performance Multiplier at any time prior to December 31, 2016 in the event that any of the value driver results used to originally determine the Performance Multiplier are determined to be materially inaccurate, regardless of whether misconduct of any person was involved or whether the inaccuracy leads to a restatement of financial results. The Committee may choose not to reduce the Performance Multiplier based on the facts and circumstances or legal constraints.
|
(a)
|
“Confirmation Date” means the date of the Committee’s certification of achievement of the Threshold Performance Goal, determination of the Performance Multiplier and approval of the Confirmed Performance Share Units, but no later than March 1, 2017.
|
(b)
|
“Confirmed Performance Share Units” means the number of Performance Share Units (rounded to the nearest whole share) equal to the Target Award times the Performance Multiplier, as determined by the Committee in accordance with
Exhibit A
; provided, however, that if (i) a Qualifying Change of Control occurs on or before the Confirmation Date and while Grantee remains employed by the Company and/or its Affiliates, or (ii) Grantee’s employment is terminated under the circumstances described in Section 3(a) below on or before the Confirmation Date, the number of Confirmed Performance Share Units shall in each case equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations. The term “Confirmed Performance Share Units” shall also include any Performance Share Units converted from dividend equivalents after the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(c)
|
“Dropdown Transaction” means any transfer of assets, other than in the ordinary course of business, by the Company or any Affiliate (other than the Partnership and any subsidiary of the Partnership) to the Partnership or any subsidiary of the Partnership, whether by sale of assets, merger or otherwise; provided that, upon the transfer of such assets, the assets continue to be consolidated in the Company’s financial statements.
|
(d)
|
“Good Reason” means Grantee’s resignation within 90 days after: (i) a reduction in Grantee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Grantee’s annual short-term bonus target of 10% or more (unless the reduction is applicable to all similarly situated employees); (iii) a significant diminution in Grantee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Grantee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement.
|
(e)
|
“Partnership” means EQT Midstream Partners, LP, an Affiliate of the Company.
|
(f)
|
“Payment Date” is defined in Section 4 of this Agreement.
|
(g)
|
“Performance Multiplier” means the percentage, from 0% to 300%, that will be applied to the Target Award to determine the maximum number of Performance Share Units that may ultimately vest based on Grantee’s continued employment through the applicable Vesting Date(s), as more fully described in
Exhibit A
hereto.
|
(h)
|
“Pro Rata Amount” is defined in Section 3 of this Agreement.
|
(i)
|
“Qualifying Change of Control” means a Change of Control (as then defined in the Plan) unless (i) all outstanding Performance Share Units awarded pursuant to 2016 Value Driver Performance Share Units Award Agreements are assumed by the surviving entity of the Change of Control (or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee) or (ii) the Company is the surviving entity of the Change of Control.
|
(j)
|
“Qualifying Termination” means the involuntary termination by the Company (or, as applicable, its successor) of Grantee’s employment as a result of (i) the sale, consolidation or full or partial shutdown of a facility, department or business unit; (ii) a position elimination because of a reorganization or lack of work; or (iii) Grantee’s death or Disability.
|
(k)
|
“Target Award” means the number of Performance Share Units indicated on the cover page hereof as being the original Target Award, plus any Performance Share Units converted from dividend equivalents on the Target Award prior to the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(l)
|
“Threshold Performance Goal” means the level of 2016 EBITDA, as indicated on
Exhibit A
hereto, that must be achieved in order for any Performance Share Units to be earned by Grantee pursuant to this Agreement (absent a Qualifying Change of Control occurring or the termination of Grantee’s employment under the circumstances described in Section 3(a) below, in each case on or before the Confirmation Date).
|
(m)
|
“Vesting Date” is defined in Section 2 of this Agreement.
|
(n)
|
“2016 EBITDA” means the Company’s income from continuing operations (which shall, for the avoidance of doubt, include income attributable to noncontrolling interests) before interest, income taxes, depreciation and amortization for the fiscal year ending December 31, 2016, (i) calculated using the fixed commodity prices set forth in the Company’s 2016 business plan (the “2016 Plan”) and adjusted for all cash settled derivatives and all basis and fixed price sales set forth in the 2016 Plan, (ii) excluding the effects of non-cash derivative gains (losses) not included in the 2016 Plan, (iii) excluding gains / losses on derivatives not designated as hedges, (iv) excluding the effects of non-cash developed and undeveloped oil and gas property impairments and (v) excluding the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is in excess of $100 million. The impact of acquisitions and/or dispositions in excess of $50 million and less than or equal to $100 million may be considered for the purpose of the Committee’s exercise of downward discretion as described in
Exhibit A
. For the avoidance of doubt, Dropdown Transactions to the Partnership or any subsidiary of the Partnership shall not be deemed to be dispositions for purposes of calculating 2016 EBITDA.
|
(a)
|
as to 50% of the Confirmed Performance Share Units, upon the Payment Date on or following January 1, 2017, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, and
|
(b)
|
as to 50% of the Confirmed Performance Share Units, upon the Payment Date on or following January 1, 2018, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(c)
|
as to 100% of the unpaid Confirmed Performance Share Units, upon the occurrence of a Qualifying Change of Control, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(d)
|
as to 100% of the unpaid Confirmed Performance Share Units, upon (i) the termination of Grantee’s employment under the circumstances described in clause (i) under Section 3(a) below or (ii) Grantee’s qualifying resignation under the circumstances described in clause (ii) under Section 3(a) below, or
|
(e)
|
as to the Pro Rata Amount only, upon the termination of Grantee’s employment under the circumstances described in Section 3(b) below.
|
(a)
|
Notwithstanding Section 9 of the Plan, in the event that following a Change of Control that is not a Qualifying Change of Control, (i) Grantee’s employment is terminated and such termination is a Qualifying Termination or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the effective date of the Change of Control, any unvested Confirmed Performance Share Units will vest.
|
(b)
|
Except as provided in Section 3(a) above, if Grantee’s employment is terminated and such termination is a Qualifying Termination, any unvested Confirmed Performance Share Units will vest as follows (such percentage of Confirmed Performance Share Units then vesting is defined as the “Pro Rata Amount”):
|
Termination Date
|
|
Percent Vesting
|
Prior to January 1, 2017
|
|
0%
|
January 1, 2017 and thereafter
|
|
50%
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than 60 days after January 1, 2017. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the last business day of 2016, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(b) shall be a date selected by the Company that is no later than 60 days after January 1, 2018. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the last business day of 2017, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(c) shall be the closing date of the Qualifying Change of Control. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the business day immediately preceding the closing date of the Qualifying Change of Control, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Sections 2(d) and 2(e) shall be a date selected by the Company that is: (i) if a Qualifying Termination under the circumstances described in clause (i) of Section 3(a) above, no later than 60 days after such Qualifying Termination, or (ii) if a qualifying resignation under the circumstances described in clause (ii) of Section 3(a) above, no later than 60 days after such qualifying resignation, or (iii) if a Qualifying Termination under the circumstances described in Section 3(b) above, no later than 30 days after the release of claims becomes effective. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock as of the last business day of the month preceding the date of the applicable employment termination, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
If 2016 EBITDA is less than the Company’s 2016 business plan EBITDA, the Performance Multiplier shall be 0% and the entire Award shall be forfeited without further consideration or any act or action by Grantee.
|
•
|
If 2016 EBITDA is equal to the Company’s 2016 business plan EBITDA or above, the Performance Multiplier will be 300%, subject to the Committee’s discretion to determine that a lower Performance Multiplier shall apply to this Award. In exercising such discretion, the Committee shall consider and be guided by the following considerations: (i) the financial performance measures and value drivers of the applicable short-term incentive program of the Company for calendar year 2016, and (ii) if desired, Grantee’s individual performance on his or her 2016 value drivers. Notwithstanding its certification of the Performance Multiplier on the Confirmation Date, the Committee may further reduce the Performance Multiplier at any time prior to December 31, 2017 in the event that any of the value driver results used to originally determine the Performance Multiplier are determined to be materially inaccurate, regardless of whether misconduct of any person was involved or whether the inaccuracy leads to a restatement of financial results. The Committee may choose not to reduce the Performance Multiplier based on the facts and circumstances or legal constraints.
|
(a)
|
“Confirmation Date” means the date of the Committee’s certification of achievement of the Threshold Performance Goal, determination of the Performance Multiplier and approval of the Confirmed Performance Share Units, but no later than March 1, 2018.
|
(b)
|
“Confirmed Performance Share Units” means the number of Performance Share Units (rounded to the nearest whole share) equal to the Target Award times the Performance Multiplier, as determined by the Committee in accordance with
Exhibit A
; provided, however, that if (i) a Qualifying Change of Control occurs on or before the Confirmation Date and while Grantee remains employed by the Company and/or its Affiliates, or (ii) Grantee’s employment is terminated under the circumstances described in Section 3(a) below on or before the Confirmation Date, the number of Confirmed Performance Share Units shall in each case equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations. The term “Confirmed Performance Share Units” shall also include any Performance Share Units converted from dividend equivalents after the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(c)
|
“Dropdown Transaction” means any transfer of assets, other than in the ordinary course of business, by the Company or any Affiliate (other than the Partnership and any subsidiary of the Partnership) to the Partnership or any subsidiary of the Partnership, whether by sale of assets, merger or otherwise; provided that, upon the transfer of such assets, the assets continue to be consolidated in the Company’s financial statements.
|
(d)
|
“Good Reason” means Grantee’s resignation within 90 days after: (i) a reduction in Grantee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Grantee’s annual short-term bonus target of 10% or more (unless the reduction is applicable to all similarly situated employees); (iii) a significant diminution in Grantee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Grantee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement.
|
(e)
|
“Partnership” means EQT Midstream Partners, LP, an Affiliate of the Company.
|
(f)
|
“Payment Date” is defined in Section 4 of this Agreement.
|
(g)
|
“Performance Multiplier” means the percentage, from 0% to 300%, that will be applied to the Target Award to determine the maximum number of Performance Share Units that may ultimately vest based on Grantee’s continued employment through the applicable Vesting Date(s), as more fully described in
Exhibit A
hereto.
|
(h)
|
“Pro Rata Amount” is defined in Section 3 of this Agreement.
|
(i)
|
“Qualifying Change of Control” means a Change of Control (as then defined in the Plan) unless (i) all outstanding Performance Share Units awarded pursuant to 2017 Value Driver Performance Share Units Award Agreements are assumed by the surviving entity of the Change of Control (or otherwise equitably converted or substituted in connection with the Change of Control in a manner approved by the Committee) or (ii) the Company is the surviving entity of the Change of Control.
|
(j)
|
“Qualifying Termination” means the involuntary termination by the Company (or, as applicable, its successor) of Grantee’s employment as a result of (i) the sale, consolidation or full or partial shutdown of a facility, department or business unit; (ii) a position elimination because of a reorganization or lack of work; or (iii) Grantee’s death or Disability.
|
(k)
|
“Target Award” means the number of Performance Share Units indicated on the cover page hereof as being the original Target Award, plus any Performance Share Units converted from dividend equivalents on the Target Award prior to the Confirmation Date or, if earlier, a Qualifying Change of Control or the termination of Grantee’s employment under the circumstances described in Section 3(a) below.
|
(l)
|
“Threshold Performance Goal” means the level of 2017 EBITDA, as indicated on
Exhibit A
hereto, that must be achieved in order for any Performance Share Units to be earned by Grantee pursuant to this Agreement (absent a Qualifying Change of Control occurring or the termination of Grantee’s employment under the circumstances described in Section 3(a) below, in each case on or before the Confirmation Date).
|
(m)
|
“Vesting Date” is defined in Section 2 of this Agreement.
|
(n)
|
“2017 EBITDA” means the Company’s income from continuing operations (which shall, for the avoidance of doubt, include income attributable to noncontrolling interests) before interest, income taxes, depreciation and amortization for the fiscal year ending December 31, 2017, (i) calculated using the fixed commodity prices set forth in the Company’s 2017 business plan (the “2017 Plan”) and adjusted for all cash settled derivatives and all basis and fixed price sales set forth in the 2017 Plan, (ii) excluding the effects of non-cash derivative gains (losses) not included in the 2017 Plan, (iii) excluding gains / losses on derivatives not designated as hedges, (iv) excluding the effects of non-cash developed and undeveloped oil and gas property impairments and (v) excluding the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is in excess of $100 million. The impact of acquisitions and/or dispositions in excess of $50 million and less than or equal to $100 million may be considered for the purpose of the Committee’s exercise of downward discretion as described in
Exhibit A
. For the avoidance of doubt, Dropdown Transactions to the Partnership or any subsidiary of the Partnership shall not be deemed to be dispositions for purposes of calculating 2017 EBITDA. If any event occurs on or after the Grant Date that causes the Company to report discontinued operations for 2017 not contemplated in the Company’s 2017 business plan, the Company’s 2017 business plan EBITDA shall be adjusted to exclude the components of 2017 EBITDA attributable to such discontinued operations.
|
(a)
|
as to 50% of the Confirmed Performance Share Units, upon the Payment Date on or following January 1, 2018, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, and
|
(b)
|
as to 50% of the Confirmed Performance Share Units, upon the Payment Date on or following January 1, 2019, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(c)
|
as to 100% of the unpaid Confirmed Performance Share Units, upon the occurrence of a Qualifying Change of Control, provided Grantee has continued in the employment of the Company and/or its Affiliates through such date, or
|
(d)
|
as to 100% of the unpaid Confirmed Performance Share Units, upon (i) the termination of Grantee’s employment under the circumstances described in clause (i) under Section 3(a) below or (ii) Grantee’s qualifying resignation under the circumstances described in clause (ii) under Section 3(a) below, or
|
(e)
|
as to the Pro Rata Amount only, upon the termination of Grantee’s employment under the circumstances described in Section 3(b) below.
|
(a)
|
Notwithstanding Section 9 of the Plan, in the event that following a Change of Control that is not a Qualifying Change of Control, (i) Grantee’s employment is terminated and such termination is a Qualifying Termination or (ii) Grantee resigns for Good Reason, in each case prior to the second anniversary of the effective date of the Change of Control, any unvested Confirmed Performance Share Units will vest.
|
(b)
|
Except as provided in Section 3(a) above, if Grantee’s employment is terminated and such termination is a Qualifying Termination, any unvested Confirmed Performance Share Units will vest as follows (such percentage of Confirmed Performance Share Units then vesting is defined as the “Pro Rata Amount”):
|
Termination Date
|
|
Percent Vesting
|
Prior to January 1, 2018
|
|
0%
|
January 1, 2018 - December 31, 2018
|
|
50%
|
January 1, 2019 and thereafter
|
|
100%
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(a) shall be a date selected by the Company that is no later than 60 days after January 1, 2018. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the last business day of 2017, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(b) shall be a date selected by the Company that is no later than 60 days after January 1, 2019. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the last business day of 2018, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Section 2(c) shall be the closing date of the Qualifying Change of Control. Except as set forth below, such awards shall be paid on the Payment Date in cash, equal to (i) the Fair Market Value per share of the Company’s Common Stock on the business day immediately preceding the closing date of the Qualifying Change of Control, times (ii) the number of Confirmed Performance Share Units then vesting.
|
•
|
The Payment Date for Confirmed Performance Share Units vesting pursuant to Sections 2(d) and 2(e) shall be a date selected by the Company that is: (i) if a Qualifying Termination under the circumstances described in clause (i) of Section 3(a) above, no later than 60 days after such Qualifying Termination (provided that any release of claims required under Section 3(a) has become effective), or (ii) if a qualifying resignation under the circumstances described in clause (ii) of Section 3(a) above, no later than 60 days after such qualifying resignation (provided that any release of claims required under Section 3(a) has become effective), or (iii) if a Qualifying Termination under the circumstances described in Section 3(b) above, no later than 30 days after
|
•
|
Such other date as may be otherwise provided under any written employment-related agreement with Grantee (including any confidentiality, non-solicitation, non-competition, change of control or similar agreement).
|
•
|
If 2017 EBITDA is less than the Company’s 2017 business plan EBITDA, the Performance Multiplier shall be 0% and the entire Award shall be forfeited without further consideration or any act or action by Grantee.
|
•
|
If 2017 EBITDA is equal to the Company’s 2017 business plan EBITDA or above, the Performance Multiplier will be 300%, subject to the Committee’s discretion to determine that a lower Performance Multiplier shall apply to this Award. In exercising such discretion, the Committee shall consider and be guided by the following considerations: (i) the financial performance measures and value drivers of the applicable short-term incentive program of the Company for calendar year 2017, and (ii) if desired, Grantee’s individual performance on his or her 2017 value drivers. Notwithstanding its certification of the Performance Multiplier on the Confirmation Date, the Committee may further reduce the Performance Multiplier at any time prior to December 31, 2018 in the event that any of the value driver results used to originally determine the Performance Multiplier are determined to be materially inaccurate, regardless of whether misconduct of any person was involved or whether the inaccuracy leads to a restatement of financial results. The Committee may choose not to reduce the Performance Multiplier based on the facts and circumstances or legal constraints.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(Thousands)
|
|||||||||||||||||||
Earnings
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
548,101
|
|
|
$
|
438,385
|
|
|
$
|
325,037
|
|
|
$
|
249,041
|
|
|
$
|
159,475
|
|
Minus: equity income of unconsolidated entities
|
|
(9,898
|
)
|
|
(2,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Plus: Fixed charges
|
|
27,181
|
|
|
27,821
|
|
|
13,629
|
|
|
1,687
|
|
|
5,226
|
|
|||||
Minus: Capitalized interest
|
|
(9,403
|
)
|
|
(5,642
|
)
|
|
(2,258
|
)
|
|
(442
|
)
|
|
(1,858
|
)
|
|||||
Total earnings
|
|
$
|
555,981
|
|
|
$
|
458,197
|
|
|
$
|
336,408
|
|
|
$
|
250,286
|
|
|
$
|
162,843
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest expense
|
|
$
|
16,766
|
|
|
$
|
21,345
|
|
|
$
|
10,871
|
|
|
$
|
829
|
|
|
$
|
2,944
|
|
Plus: Capitalized interest
|
|
9,403
|
|
|
5,642
|
|
|
2,258
|
|
|
442
|
|
|
1,858
|
|
|||||
Plus: Estimated interest component of rental expense
|
|
1,012
|
|
|
834
|
|
|
500
|
|
|
416
|
|
|
424
|
|
|||||
Total fixed charges
|
|
$
|
27,181
|
|
|
$
|
27,821
|
|
|
$
|
13,629
|
|
|
$
|
1,687
|
|
|
$
|
5,226
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
20.5x
|
|
|
16.5x
|
|
|
24.7x
|
|
|
148.4x
|
|
|
31.2x
|
|
(1)
|
Earnings included in the calculation of this ratio consist of (i) income before income taxes, minus (ii) equity income of unconsolidated entities, plus (iii) fixed charges and minus (iv) capitalized interest (including allowance for borrowed funds used during construction). Fixed charges included in the calculation of this ratio consist of (i) net interest expense, plus (ii) capitalized interest (including allowance for borrowed funds used during construction) and (iii) the estimated interest portion of rental expense.
|
Company
|
|
Jurisdiction of Organization
|
Equitrans Investments, LLC
|
|
Delaware
|
Equitrans Services, LLC
|
|
Delaware
|
Equitrans, L.P.
|
|
Pennsylvania
|
EQT Midstream Finance Corporation
|
|
Delaware
|
EQM Gathering Holdings, LLC
|
|
Delaware
|
EQM Gathering Opco, LLC
|
|
Delaware
|
MVP Holdco, LLC
|
|
Delaware
|
Rager Mountain Storage Company LLC
|
|
Delaware
|
•
|
Registration Statement (Form S-3 No. 333-212362) of EQT Midstream Partners, LP pertaining to the registration of Common Units Representing Limited Partner Interests and Debt Securities;
|
•
|
Registration Statement (Form S-3 No. 333-205812) of EQT Midstream Partners, LP pertaining to the registration of Common Units Representing Limited Partner Interests; and
|
•
|
Registration Statement (Form S-8 No. 333-182460) pertaining to the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan;
|
Date:
|
February 9, 2017
|
|
|
|
EQT Midstream Partners, LP
|
|
|
|
|
|
/s/ David L. Porges
|
|
|
David L. Porges
|
|
|
President and Chief Executive Officer, EQT Midstream Services, LLC, the registrant’s General Partner
|
Date:
|
February 9, 2017
|
|
|
|
EQT Midstream Partners, LP
|
|
|
|
|
|
/s/ Robert J. McNally
|
|
|
Robert J. McNally
|
|
|
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, the registrant’s General Partner
|
/s/ David L. Porges
|
|
February 9, 2017
|
|
David L. Porges
|
|
|
|
President and Chief Executive Officer, EQT Midstream Services, LLC, EQM’s General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert J. McNally
|
|
February 9, 2017
|
|
Robert J. McNally
|
|
|
|
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, EQM’s General Partner
|
|
|
Named Executive Officer Compensation 2017 Peer Group
|
||
(GENERAL INDUSTRY)
|
||
|
|
|
A.O. Smith
|
Cubic
|
HNTB
|
Aimia
|
Curtiss-Wright
|
Houghton Mifflin Harcourt Publishing
|
Alexion Pharmaceuticals
|
D&B
|
Hunt Consolidated
|
American Express Global Business Travel
|
Deluxe
|
Husky Injection Molding Systems*
|
American Sugar Refining
|
Dematic Group
|
IDEX Corporation
|
Americas Styrenics
|
DJO Global
|
IMS Health
|
Ansell
|
Diebold
|
IDEXX Laboratories
|
ARM
|
Donaldson
|
Ingenico*
|
Armstrong World Industries
|
Eastman Kodak
|
Intelsat
|
Axiall
|
Edwards Lifesciences
|
International Flavors & Fragrances
|
BMC Software
|
Endo
|
Irvine
|
Bob Evans Farms
|
EnPro Industries
|
Itron
|
Brembo*
|
Equifax
|
J.Crew
|
Broadridge Financial Solutions
|
ESCO
|
Jack in the Box
|
Cabot
|
Esterline Technologies
|
K. Hovnanian Companies
|
Capsugel
|
Forsythe Technology
|
KB Home
|
Carlson Rezidor Hotel Group*
|
G&K Services
|
Kennametal
|
Catalent Pharma Solutions
|
Garmin
|
Keysight Technologies
|
Catalyst Paper
|
General Atomics
|
Kinross Gold
|
CDI Corporation
|
Glatfelter
|
Ledcor Group of Companies*
|
CDK Global
|
Graco
|
Leprino Foods
|
Chemtura
|
H.B. Fuller
|
Lifetouch
|
Cimpress
|
Haribo*
|
Lincoln Electric
|
Clearwater Paper Corporation
|
Harsco
|
Magellan Midstream Partners
|
Columbia Sportswear
|
HAVI Global Solutions
|
Makino*
|
Convergys
|
Hearthside Food Solutions
|
Martin Marietta Materials
|
Cooper Standard Automotive
|
Herman Miller
|
Materion
|
Cott Corporation
|
Hexcel
|
Matthews International
|
Mettler-Toledo
|
HNI
|
Meredith
|
Motorsport Aftermarket Group
|
Scripps Networks Interactive
|
TripAdvisor
|
Multi-Color
|
Sensient Technologies
|
Tupperware Brands
|
NBTY
|
ServiceMaster Company
|
Underwriters Laboratories
|
New York Times
|
Snyder's-Lance
|
Unisys
|
Nortek
|
SPX Corporation
|
Vantiv
|
Nu Skin Enterprises
|
SPX FLOW
|
Vectrus
|
Nuance Communications
|
Stantec
|
Ventura Foods
|
Outerwall
|
Steelcase
|
Vertex Pharmaceuticals
|
PAREXEL
|
Stolt-Nielsen
|
Viad
|
Parsons
|
SunCoke Energy
|
Vista Outdoor
|
PolyOne
|
SunOpta
|
Visteon
|
Purdue Pharma
|
TeleTech
|
Vulcan Materials
|
Rackspace
|
Tempur Sealy
|
W.R. Grace
|
Rayonier Advanced Materials
|
Teradata
|
Watts Water Technologies
|
Revlon
|
Timken
|
Wendy's Group
|
Sabre Corporation
|
TimkenSteel
|
West Pharmaceutical Services
|
Sage Software*
|
Toro
|
Wilsonart
|
SAS Institute
|
Total System Services (TSYS)
|
Wood Mackenzie*
|
Scholastic
|
TransUnion
|
Worthington Industries
|
Schwan Food Company
|
Travelport
|
Xilinx
|
Scotts Miracle-Gro
|
Tribune Media
|
YP
|
|
|
|
*Subsidiary
|