UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
 
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2017
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
 
 
 
FOR THE TRANSITION PERIOD FROM                TO               
 
 
 
COMMISSION FILE NUMBER 001-35574
 
EQT Midstream Partners, LP
(Exact name of registrant as specified in its charter)
 
DELAWARE
 
37-1661577
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania
15222
(Address of principal executive offices)
(Zip code)
(412) 553-5700
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x   No   ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x   No   ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer     x
 
 
Accelerated Filer                   ¨
 
Emerging Growth Company        ¨
Non-Accelerated Filer       ¨
(Do not check if a
smaller reporting company)
 
Smaller Reporting Company   ¨
 
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        Yes   ¨   No  x
 
As of March 31, 2017 , there were 80,581,758 Common Units and 1,443,015 General Partner Units outstanding.


EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
 
Index
 
 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2
Table of Contents


Glossary of Commonly Used Terms, Abbreviations and Measurements

adjusted EBITDA – a supplemental non-GAAP (as defined below) financial measure defined by EQT Midstream Partners, LP and subsidiaries (collectively, EQM) as net income plus net interest expense, depreciation and amortization expense, income tax expense, Preferred Interest (as defined below) payments received post conversion and non-cash long-term compensation expense less equity income, AFUDC – equity (as defined below), pre-acquisition capital lease payments for Allegheny Valley Connector, LLC (AVC) and adjusted EBITDA of assets prior to acquisition.
 
Allowance for Funds Used During Construction or AFUDC – carrying costs for the construction of certain long-lived regulated assets are capitalized and amortized over the related assets’ estimated useful lives. The capitalized amount for construction of regulated assets includes interest cost and a designated cost of equity for financing the construction of these regulated assets.

British thermal unit – a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.
 
distributable cash flow – a supplemental non-GAAP financial measure defined by EQM as adjusted EBITDA less net interest expense excluding interest income on the Preferred Interest, capitalized interest and AFUDC – debt, and ongoing maintenance capital expenditures net of expected reimbursements.
 
firm contracts – contracts for gathering, transmission or storage services that obligate customers to pay a fixed monthly charge to reserve an agreed upon amount of pipeline or storage capacity regardless of the actual capacity used by a customer during each month.

gas – all references to “gas” refer to natural gas.

October 2016 Acquisition – On October 13, 2016, EQM acquired from EQT Corporation and subsidiaries (collectively, EQT) 100% of the outstanding limited liability company interests of AVC and Rager Mountain Storage Company LLC (Rager) and certain gathering assets located in southwestern Pennsylvania and northern West Virginia (the Gathering Assets). The closing of the October 2016 Acquisition was effective as of October 1, 2016.

omnibus agreement – the agreement, as amended, entered into among EQM, its general partner and EQT in connection with EQM's initial public offering, pursuant to which EQT agreed to provide EQM with, and EQM agreed to reimburse EQT for, certain general and administrative services and a license to use the name “EQT” and related marks in connection with EQM’s business. The omnibus agreement also provides for certain indemnification obligations between EQM and EQT.

Preferred Interest – the preferred interest that EQM has in EQT Energy Supply, LLC (EES).
 
The $750 Million ATM Program – EQM's at-the-market (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.

throughput – the volume of natural gas transported or passing through a pipeline, plant, terminal or other facility during a particular period.

Abbreviations
Measurements
ASU – Accounting Standards Update
Btu   = one British thermal unit
FASB –   Financial Accounting Standards Board
BBtu = billion British thermal units
FERC  – Federal Energy Regulatory Commission
Bcf    = billion cubic feet
GAAP – United States Generally Accepted Accounting Principles
Dth   =  dekatherm or million British thermal units
IPO – Initial Public Offering
MMBtu   = million British thermal units
IRS – Internal Revenue Service
Mcf = thousand cubic feet
SEC – Securities and Exchange Commission
MMcf   = million cubic feet


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Table of Contents


PART I.  FINANCIAL INFORMATION
 
Item 1.    Financial Statements
EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Statements of Consolidated Operations (Unaudited) (1)  
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands, except per unit amounts)
Operating revenues (2)
$
203,426

 
$
185,786

Operating expenses:
 

 
 

Operating and maintenance (3)
20,286

 
17,136

Selling, general and administrative (3)
17,480

 
17,523

Depreciation and amortization
20,547

 
14,007

Total operating expenses
58,313

 
48,666

Operating income
145,113

 
137,120

Other income (4)
6,009

 
7,602

Net interest expense (5)
7,926

 
4,552

Income before income taxes
143,196

 
140,170

Income tax expense
—

 
3,435

Net income
$
143,196

 
$
136,735

 
 
 
 
Calculation of limited partners' interest in net income:
 

 
 

Net income
$
143,196

 
$
136,735

Less pre-acquisition net income allocated to parent
—

 
(7,670
)
Less general partner interest in net income – general partner units
(2,519
)
 
(2,355
)
Less general partner interest in net income – incentive distribution rights (IDRs)
(30,686
)
 
(18,832
)
Limited partners' interest in net income
$
109,991

 
$
107,878

 
 
 
 
Net income per limited partner unit – basic
$
1.36

 
$
1.39

Net income per limited partner unit – diluted
$
1.36

 
$
1.39

 
 
 
 
Weighted average limited partner units outstanding – basic
80,602

 
77,593

Weighted average limited partner units outstanding – diluted
80,602

 
77,675

 
 
 
 
Cash distributions declared per unit (6)
$
0.89

 
$
0.745

 

(1)
As discussed in Note A, EQM’s consolidated financial statements for the three months ended March 31, 2016 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, because the transaction was between entities under common control.
(2)
Operating revenues included affiliate revenues from EQT of $143.4 million and $135.3 million for the three months ended March 31, 2017 and 2016 , respectively. See Note E.
(3)
Operating and maintenance expense included charges from EQT of $9.9 million and $8.1 million for the three months ended March 31, 2017 and 2016 , respectively. Selling, general and administrative expense included charges from EQT of $16.4 million and $16.1 million for the three months ended March 31, 2017 and 2016 , respectively. See Note E.
(4)
For the three months ended March 31, 2017 , other income included equity income from Mountain Valley Pipeline, LLC (MVP Joint Venture) of $4.3 million . For the three months ended March 31, 2016 , other income included distributions received from EES of $2.8 million and equity income from the MVP Joint Venture of $1.6 million . See Note F.
(5)
For the three months ended March 31, 2017 , net interest expense included $1.7 million of interest income on the Preferred Interest in EES.
(6)
Represents the cash distributions declared related to the period presented. See Note J.

The accompanying notes are an integral part of these consolidated financial statements.

4
Table of Contents


EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Statements of Consolidated Cash Flows (Unaudited) (1)  
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands)
Cash flows from operating activities:
 

 
 

Net income
$
143,196

 
$
136,735

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
20,547

 
14,007

Deferred income taxes
—

 
2,975

Equity income
(4,277
)
 
(1,589
)
AFUDC – equity
(1,699
)
 
(2,937
)
Non-cash long-term compensation expense
225

 
195

Changes in other assets and liabilities:
 

 
 

Accounts receivable
(968
)
 
(535
)
Accounts payable
364

 
(302
)
Due to/from EQT affiliates
107

 
(28,429
)
Other assets and other liabilities
3,927

 
(3,793
)
Net cash provided by operating activities
161,422

 
116,327

 
 
 
 
Cash flows from investing activities:
 

 
 

Capital expenditures
(62,947
)
 
(124,625
)
Capital contributions to the MVP Joint Venture
(19,760
)
 
(11,430
)
Sales of interests in the MVP Joint Venture
—

 
12,533

Principal payments received on Preferred Interest
1,020

 
—

Net cash used in investing activities
(81,687
)
 
(123,522
)
 
 
 
 
Cash flows from financing activities:
 

 
 

Proceeds from credit facility borrowings
50,000

 
71,000

Payments on credit facility borrowings
(50,000
)
 
(361,000
)
Distributions paid to unitholders
(97,822
)
 
(72,575
)
Capital contributions
216

 
—

Net contributions from EQT
—

 
9,182

Net cash used in financing activities
(97,606
)
 
(353,393
)
 
 
 
 
Net change in cash and cash equivalents
(17,871
)
 
(360,588
)
Cash and cash equivalents at beginning of period
60,368

 
360,956

Cash and cash equivalents at end of period
$
42,497

 
$
368

 
 
 
 
Cash paid during the period for:
 

 
 

Interest, net of amount capitalized
$
9,411

 
$
9,738


(1)
As discussed in Note A, EQM’s consolidated financial statements for the three months ended March 31, 2016 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, because the transaction was between entities under common control.

The accompanying notes are an integral part of these consolidated financial statements.

5
Table of Contents


EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
 
 
March 31, 
 2017
 
December 31, 2016
ASSETS
(Thousands, except number of units)
Current assets:
 

 
 

Cash and cash equivalents
$
42,497

 
$
60,368

Accounts receivable (net of allowance for doubtful accounts of $331 as of March 31, 2017 and $319 as of December 31, 2016)
21,630

 
20,662

Accounts receivable – affiliate
81,654

 
81,358

Other current assets
5,685

 
9,671

Total current assets
151,466

 
172,059

 
 
 
 
Property, plant and equipment
2,966,817

 
2,894,858

Less: accumulated depreciation
(334,352
)
 
(316,024
)
Net property, plant and equipment
2,632,465

 
2,578,834

 
 
 
 
Investment in unconsolidated entity
237,308

 
184,562

Other assets
139,236

 
140,385

Total assets
$
3,160,475

 
$
3,075,840

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
43,474

 
$
35,830

Due to related party
18,672

 
19,027

Capital contribution payable to MVP Joint Venture
40,180

 
11,471

Accrued interest
11,760

 
12,016

Accrued liabilities
9,867

 
8,648

Total current liabilities
123,953

 
86,992

 
 
 
 
Long-term debt
986,137

 
985,732

Other long-term liabilities
10,258

 
9,562

Total liabilities
1,120,348

 
1,082,286

 
 
 
 
Equity:
 

 
 

Common (80,581,758 units issued and outstanding at March 31, 2017 and December 31, 2016)
2,051,188

 
2,008,510

General partner (1,443,015 units issued and outstanding at March 31, 2017 and December 31, 2016)
(11,061
)
 
(14,956
)
Total equity
2,040,127

 
1,993,554

Total liabilities and equity
$
3,160,475

 
$
3,075,840

 
 
The accompanying notes are an integral part of these consolidated financial statements.


6
Table of Contents


EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Statements of Consolidated Equity (Unaudited) (1)  
 
 
Predecessor
 
Limited Partners
 
General
 
 
 
Equity
 
Common
 
Partner
 
Total Equity
 
(Thousands)
Balance at January 1, 2016
$
275,545

 
$
1,598,675

 
$
(30,963
)
 
$
1,843,257

Net income
7,670

 
107,878

 
21,187

 
136,735

Capital contributions
—

 
159

 
3

 
162

Equity-based compensation plans
—

 
195

 
—

 
195

Distributions to unitholders
—

 
(55,039
)
 
(17,536
)
 
(72,575
)
Net contributions from EQT
9,182

 
—

 
—

 
9,182

Balance at March 31, 2016
$
292,397

 
$
1,651,868

 
$
(27,309
)
 
$
1,916,956

 
 
 
 
 
 
 
 
Balance at January 1, 2017
$
—

 
$
2,008,510

 
$
(14,956
)
 
$
1,993,554

Net income
—

 
109,991

 
33,205

 
143,196

Capital contributions
—

 
956

 
18

 
974

Equity-based compensation plans
—

 
225

 
—

 
225

Distributions to unitholders
—

 
(68,494
)
 
(29,328
)
 
(97,822
)
Balance at March 31, 2017
$
—

 
$
2,051,188

 
$
(11,061
)
 
$
2,040,127

 
(1)
As discussed in Note A, EQM’s consolidated financial statements for the three months ended March 31, 2016 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, because the transaction was between entities under common control.


 
The accompanying notes are an integral part of these consolidated financial statements.


7
Table of Contents


EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)

A.
Financial Statements

Organization
 
EQM is a growth-oriented Delaware limited partnership. EQT Midstream Services, LLC (EQM General Partner) is a direct wholly owned subsidiary of EQT GP Holdings, LP (EQGP) and is the general partner of EQM.

Basis of Presentation
 
The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQM as of March 31, 2017 and December 31, 2016 , and the results of its operations, cash flows and equity for the three months ended March 31, 2017 and 2016 . Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
 
AVC, Rager and the Gathering Assets were businesses and the October 2016 Acquisition was a transaction between entities under common control; therefore, EQM recorded the assets and liabilities of these entities at their carrying amounts to EQT on the date of the transaction. The difference between EQT’s net carrying amount and the total consideration paid to EQT was recorded as a capital transaction with EQT, which resulted in a reduction in equity. EQM recast its consolidated financial statements to retrospectively reflect the October 2016 Acquisition as if the entities were owned for all periods presented; however, the consolidated financial statements are not necessarily indicative of the results of operations that would have occurred if EQM had owned them during the periods reported.

Due to the seasonal nature of EQM’s utility customer contracts, the interim statements for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 .
 
For further information, refer to the consolidated financial statements and footnotes thereto included in EQM’s Annual Report on Form 10-K for the year ended December 31, 2016 as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein.
 
Recently Issued Accounting Standards
 
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date which approved a one year deferral of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. EQM expects to adopt the ASUs using the modified retrospective method of adoption on January 1, 2018. During 2016, EQM completed an analysis of the impact of the standard on its broad contract types. As a result, EQM anticipates that this standard will not have a material impact on net income. EQM is currently performing a detailed review of the impact of the standard on each of its contracts, which it expects to complete by mid-year 2017. EQM is evaluating the impact of the standard on its related disclosures.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities . The changes primarily affect the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. This standard will eliminate the cost method of accounting for equity investments. The ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, with early adoption of certain provisions permitted. EQM anticipates this standard will not have a material impact on its financial statements and related disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a

8


lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. The primary effect of adopting the new standard will be to record assets and obligations for contracts currently recognized as operating leases. EQM has completed a high level identification of agreements covered by this standard and will continue to evaluate the impact this standard will have on its financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. EQM is currently evaluating the impact this standard will have on its financial statements and related disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This ASU addresses the presentation and classification of eight specific cash flow issues. The amendments in the ASU will be effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. EQM anticipates this standard will not have a material impact on its financial statements and related disclosures.

B.  
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 aggregate consideration paid by EQM to EQT of $275 million was funded by borrowings under the $750 Million Facility (as defined in Note G).

Prior to the October 2016 Acquisition, EQM operated the AVC facilities as part of its transmission and storage system under a lease agreement with EQT. The lease was a capital lease under GAAP; therefore, revenues and expenses associated with the AVC facilities were included in EQM’s historical consolidated financial statements and the AVC facilities were depreciated over the lease term of 25 years. In conjunction with the October 2016 Acquisition, the lease agreement was terminated. As a result, EQM's recast of the consolidated financial statements included recasting depreciation expense recognized for the periods prior to the transaction to reflect the pipeline’s useful life of 40 years. The cumulative capital lease depreciation recorded for periods prior to the transaction was eliminated through equity at the time of the acquisition and the consolidated financial statements now reflect the depreciation expense based on the 40 year useful life. This adjustment increased previously reported net income by $2.0 million for the three months ended March 31, 2016 .

9



C.
Equity and Net Income per Limited Partner Unit

The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2016 through December 31, 2016. EQM did not issue any units during the first quarter of 2017.
 
Limited Partner Common Units
 
General Partner Units
 
Total
Balance at January 1, 2016
77,520,181

 
1,443,015

 
78,963,196

2014 EQM Value Driver Award Program 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

 
As of March 31, 2017 , EQGP and its subsidiaries owned 21,811,643 EQM common units, representing a 26.6% limited partner interest, 1,443,015 EQM general partner units, representing a 1.8% general partner interest, and all of the IDRs in EQM. As of March 31, 2017 , EQT owned 100% of the non-economic general partner interest and a 90.1% limited partner interest in EQGP.

Net Income per Limited Partner Unit. Net income attributable to AVC, Rager and the Gathering Assets for periods prior to October 1, 2016 was not allocated to the limited partners for purposes of calculating net income per limited partner unit. The weighted average phantom unit awards included in the calculation of basic weighted average limited partner units outstanding was 20,073 and 16,480 for the three months ended March 31, 2017 and 2016 , respectively. Potentially dilutive securities included in the calculation of diluted weighted average limited partner units outstanding totaled zero and 82,190 for the three months ended March 31, 2017 and 2016 , respectively.

D.
Financial Information by Business Segment
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands)
Revenues from external customers (including affiliates):
 

 
 

Gathering
$
102,329

 
$
98,009

Transmission
101,097

 
87,777

Total operating revenues
$
203,426

 
$
185,786

 
 
 
 
Operating income:
 

 
 

Gathering
$
73,589

 
$
72,604

Transmission
71,524

 
64,516

Total operating income
$
145,113

 
$
137,120

 
 
 
 
Reconciliation of operating income to net income:
 
 
 

Other income
6,009

 
7,602

Net interest expense
7,926

 
4,552

Income tax expense
—

 
3,435

Net income
$
143,196

 
$
136,735


 
March 31, 2017
 
December 31, 2016
 
(Thousands)
Segment assets:
 

 
 

Gathering
$
1,329,846

 
$
1,292,713

Transmission
1,426,109

 
1,413,631

Total operating segments
2,755,955

 
2,706,344

Headquarters, including cash
404,520

 
369,496

Total assets
$
3,160,475

 
$
3,075,840


10



 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands)
Depreciation and amortization:
 

 
 

Gathering
$
8,860

 
$
7,263

Transmission
11,687

 
6,744

Total
$
20,547

 
$
14,007

 
 
 
 
Expenditures for segment assets:
 
 
 
Gathering
$
48,838

 
$
73,087

Transmission
21,389

 
60,071

Total (1)
$
70,227

 
$
133,158

 
(1)
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 $34.0 million and $26.7 million at March 31, 2017 and December 31, 2016 , respectively. Accrued capital expenditures were approximately $32.7 million and $24.1 million at March 31, 2016 and December 31, 2015 , respectively.

E.
Related Party Transactions
 
In the ordinary course of business, EQM engages in transactions with EQT and its affiliates including, but not limited to, transportation service and precedent agreements, storage agreements and gas gathering agreements. Pursuant to the omnibus agreement, EQT performs centralized corporate, general and administrative services for EQM. In exchange, EQM reimburses EQT for the expenses incurred in providing these services, including direct and indirect costs and expenses attributable to EQT's long-term incentive programs. Pursuant to an operation and management services agreement, EQT Gathering, LLC (EQT Gathering), an indirect wholly owned subsidiary of EQT, provides EQM’s pipelines and storage facilities with certain operational and management services. EQM reimburses EQT Gathering for such services pursuant to the terms of the omnibus agreement. 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.

F.
Investment in Unconsolidated Entity

MVP Joint Venture. The MVP Joint Venture plans to construct the Mountain Valley Pipeline (MVP), an estimated 300 -mile natural gas interstate pipeline spanning from northern West Virginia to southern Virginia. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of March 31, 2017 . The MVP Joint Venture has been determined to be a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. EQM is not the primary beneficiary because it does not have the power to direct the activities of the MVP Joint Venture that most significantly impact its economic performance. Certain business decisions require the approval of owners holding more than a 66 2/3% interest in the MVP Joint Venture and no one member owns more than a 66 2/3% interest. EQM accounts for the interest in the MVP Joint Venture as an equity method investment as EQM has the ability to exercise significant influence over operating and financial policies of the MVP Joint Venture.

In February 2017, the MVP Joint Venture issued a capital call notice to MVP Holdco, LLC (MVP Holdco), a direct wholly owned subsidiary of EQM, for a total amount of $40.2 million , of which $22.1 million was paid on April 13, 2017 and the remaining $18.1 million is expected to be paid on May 12, 2017 . The capital contribution payable has been reflected on the consolidated balance sheet as of March 31, 2017 with a corresponding increase to EQM's investment in the MVP Joint Venture.

Equity income related to EQM's portion of the MVP Joint Venture's AFUDC on construction of the MVP is reported in other income in the statements of consolidated operations and was $4.3 million and $1.6 million for the three months ended March 31, 2017 and 2016 , respectively.

As of March 31, 2017 , EQM had issued a $91 million performance guarantee in favor of the MVP Joint Venture to provide performance assurances for MVP Holdco's obligations to fund its proportionate share of the construction budget for the MVP.

11


Upon the FERC’s initial release to begin construction of the MVP, EQM's guarantee will terminate and EQM will be obligated to issue a new guarantee in an amount equal to 33% of MVP Holdco’s remaining obligations to make capital contributions to the MVP Joint Venture in connection with the then remaining construction budget, less, subject to certain limits, any credit assurances issued by any affiliate of EQM under such affiliate's precedent agreement with the MVP Joint Venture.

As of March 31, 2017 , EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $328.3 million , which included the investment in unconsolidated entity balance on the consolidated balance sheet as of March 31, 2017 and amounts which could have become due under the performance guarantee as of that date.

G.
Credit Facility Borrowings

$750 Million Facility. EQM has a $750 million credit facility that expires in February 2019. The credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions, to repurchase units and for general partnership purposes. EQM’s $750 Million Facility contains various provisions that, if not complied with, could result in termination of the credit facility, require early payment of amounts outstanding or similar actions. The most significant covenants and events of default under the $750 Million Facility relate to maintenance of a permitted leverage ratio, limitations on transactions with affiliates, limitations on restricted payments, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of and certain other defaults under other financial obligations and change of control provisions. Under the $750 Million Facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions).

EQM had no borrowings outstanding on its $750 Million Facility as of March 31, 2017 and December 31, 2016 . There were no borrowings outstanding at any time during the three months ended March 31, 2017 . During the three months ended March 31, 2016 , the maximum amount of EQM’s outstanding borrowings under the credit facility at any time was $299 million and the average daily balance was approximately $134 million . Interest was incurred at a weighted average annual interest rate of approximately 1.9% for the three months ended March 31, 2016 .

364 -Day Facility. In October 2016, EQM entered into a $500 million , 364 -day, uncommitted revolving loan agreement with EQT that matures on October 25, 2017 and will automatically renew for successive 364 -day periods unless EQT delivers a non-renewal notice at least 60 days prior to the then current maturity date. Interest accrues on outstanding borrowings at an interest rate equal to the rate then applicable to similar loans under the $750 Million Facility, or a successor revolving credit facility, less the sum of (i) the then applicable commitment fee under the $750 Million Facility and (ii) 10 basis points.

EQM had no borrowings outstanding on the 364 -Day Facility as of March 31, 2017 and December 31, 2016 . During the three months ended March 31, 2017 , the maximum amount of EQM’s outstanding borrowings under the credit facility at any time was $50 million and the average daily balance was approximately $26 million . Interest was incurred at a weighted average annual interest rate of approximately 2.0% for the three months ended March 31, 2017 .

As of March 31, 2017 , EQM was in compliance with all debt provisions and covenants.

12



H.
Fair Value Measurements

The carrying values of cash and cash equivalents, accounts receivable, amounts due to/from related parties and accounts payable approximate fair value due to the short maturity of the instruments; these are considered Level 1 fair values. The carrying value of the credit facility borrowings approximates fair value as the interest rates are based on prevailing market rates; this is considered a Level 1 fair value. As EQM's long-term debt is not actively traded, its fair value is a Level 2 fair value measurement estimated using a standard industry income approach model which utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk. As of March 31, 2017 and December 31, 2016 , the estimated fair value of EQM's long-term debt was approximately $1,000 million and $982 million , respectively, and the carrying value of EQM's long-term debt was approximately $986 million at both dates. The fair value of the Preferred Interest is a Level 3 fair value measurement which is estimated using an income approach model utilizing a market-based discount rate. As of March 31, 2017 and December 31, 2016 , the estimated fair value of the Preferred Interest was approximately $132 million at both periods and the carrying value of the Preferred Interest was approximately $122 million and $123 million , respectively.

I.
Income Taxes
 
As a result of its limited partnership structure, EQM is not subject to federal and state income taxes. For federal and state income tax purposes, all income, expenses, gains, losses and tax credits generated by EQM flow through to EQM's unitholders; accordingly, EQM does not record a provision for income taxes.

As discussed in Note A, 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, because the transaction was between entities under common control. Accordingly, the income tax effects associated with these operations prior to acquisition are reflected in the consolidated financial statements as they were previously part of EQT’s consolidated federal tax return.
 
J.
Distributions
 
On April 25, 2017 , the Board of Directors of the EQM General Partner declared a cash distribution to EQM’s unitholders for the first quarter of 2017 of $0.89 per common unit. The cash distribution will be paid on May 15, 2017 to unitholders of record at the close of business on May 5, 2017 . Based on the 80,581,758 EQM common units outstanding on April 27, 2017 , cash distributions to EQGP will be approximately $19.4 million related to its limited partner interest, $1.8 million related to its general partner interest and $30.7 million related to its IDRs in EQM. The distribution amounts to EQGP related to its general partner interest and IDRs in EQM are subject to change if EQM issues additional common units on or prior to the record date for the first quarter 2017 distribution.


13



EQT Midstream Partners, LP and Subsidiaries
Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets. You should read the following discussion and analysis of financial condition and results of operations in conjunction with the consolidated financial statements, and the notes thereto, included elsewhere in this report.
 
CAUTIONARY STATEMENTS
 
Disclosures in this Quarterly Report on Form 10-Q contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended.  Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as “anticipate,” “estimate,” “could,” “would,” “will,” “may,” “forecast,” “approximate,” “expect,” “project,” “intend,” “plan,” “believe” and other words of similar meaning in connection with any discussion of future operating or financial matters.  Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section captioned “Outlook” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the expectations of plans, strategies, objectives, and growth and anticipated financial and operational performance of EQM, including guidance regarding EQM’s gathering and transmission and storage revenue and volume growth; revenue projections; infrastructure programs (including the timing, cost, capacity and sources of funding with respect to gathering and transmission expansion projects); the timing, cost, capacity and expected interconnections with facilities and pipelines of the MVP project; the ultimate terms, partners and structure of the MVP Joint Venture; natural gas production growth in EQM’s operating areas for EQT and third parties; asset acquisitions, including EQM’s ability to complete asset acquisitions; the amount and timing of distributions, including expected increases; the amounts and timing of projected capital contributions and operating and capital expenditures, including the amount of capital expenditures reimbursable by EQT; the impact of commodity prices on EQM's business; liquidity and financing requirements, including sources and availability; the effects of government regulation and litigation; and tax position. The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results.  Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  EQM has based these forward-looking statements on current expectations and assumptions about future events. While EQM considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and are beyond EQM’s control. The risks and uncertainties that may affect the operations, performance and results of EQM’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors” in EQM’s Annual Report on Form 10-K for the year ended December 31, 2016 .
 
Any forward-looking statement speaks only as of the date on which such statement is made and EQM does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
 
In reviewing any agreements incorporated by reference in or filed with this Quarterly Report on Form 10-Q, please remember that such agreements are included to provide information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about EQM. The agreements may contain representations and warranties by EQM, which should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements should those statements prove to be inaccurate. The representations and warranties were made only as of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments.  Accordingly, these representations and warranties alone may not describe the actual state of affairs of EQM or its affiliates as of the date they were made or at any other time.

EXECUTIVE OVERVIEW
 
For the three months ended March 31, 2017 , EQM reported net income of $143.2 million compared to $136.7 million for the three months ended March 31, 2016 . The increase primarily resulted from higher revenues from both gathering and transmission and storage, which were driven mainly by third party and affiliate production development in the Marcellus Shale and were partly offset by an increase in operating expenses, consistent with the growth of the business.

EQM declared a cash distribution to its unitholders of $0.89 per unit on April 25, 2017 , which was 5% higher than the fourth quarter 2016 distribution of $0.85 per unit and 19% higher than the first quarter 2016 distribution of $0.745 per unit.

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Business Segment Results
 
Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. Other income and net interest expense are managed on a consolidated basis. EQM has presented each segment’s operating income and various operational measures in the following sections. Management believes that the presentation of this information provides useful information to management and investors regarding the financial condition, results of operations and trends of segments. EQM has reconciled each segment’s operating income to EQM’s consolidated operating income and net income in Note D to the consolidated financial statements.
 
GATHERING RESULTS OF OPERATIONS
 
Three Months Ended March 31,
 
2017
 
2016
 
% Change
FINANCIAL DATA
(Thousands, other than per day amounts)
Firm reservation fee revenues
$
94,271

 
$
82,007

 
15.0

Volumetric based fee revenues:
 
 
 
 
 
Usage fees under firm contracts (1)
4,821

 
10,452

 
(53.9
)
Usage fees under interruptible contracts
3,237

 
5,550

 
(41.7
)
Total volumetric based fee revenues
8,058

 
16,002

 
(49.6
)
Total operating revenues
102,329

 
98,009

 
4.4

Operating expenses:
 
 
 
 
 
Operating and maintenance
10,455

 
8,945

 
16.9

Selling, general and administrative
9,425

 
9,197

 
2.5

Depreciation and amortization
8,860

 
7,263

 
22.0

Total operating expenses
28,740

 
25,405

 
13.1

Operating income
$
73,589

 
$
72,604

 
1.4

 
 
 
 
 
 
OPERATIONAL DATA
 

 
 

 
 

Gathered volumes (BBtu per day)
 
 
 
 
 
Firm capacity reservation
1,728

 
1,424

 
21.3

Volumetric based services (2)
224

 
473

 
(52.6
)
Total gathered volumes
1,952

 
1,897

 
2.9

 
 
 
 
 
 
Capital expenditures
$
48,838

 
$
73,087

 
(33.2
)

(1)
Includes fees on volumes gathered in excess of firm contracted capacity.

(2)
Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity.

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016
 
Gathering revenues increased by $4.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 driven primarily by third party production development in the Marcellus Shale. EQM increased firm reservation fee revenues as a result of affiliates and third parties contracting for additional capacity under firm contracts following the completion of part of the Range Resources Corporation (Range Resources) Header Pipeline project and a Northern West Virginia Marcellus gathering system (NWV Gathering) expansion project, which together resulted in increased firm gathering capacity of approximately 330 MMcf per day. The decrease in usage fees under firm contracts was due to lower affiliate volumes in excess of firm contracted capacity. The decrease in usage fees under interruptible contracts was primarily due to the additional contracts for firm capacity.

Operating expenses increased by $3.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 . Operating and maintenance expense increased primarily as a result of higher allocations, including personnel costs, from EQT. The increase in depreciation and amortization expense resulted from additional assets placed in-service including those associated with the Range Resources Header Pipeline project and the NWV Gathering expansion project.


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TRANSMISSION RESULTS OF OPERATIONS
 
Three Months Ended March 31,
 
2017
 
2016
 
% Change
FINANCIAL DATA
(Thousands, other than per day amounts)
Firm reservation fee revenues
$
92,274

 
$
70,109

 
31.6

Volumetric based fee revenues:
 
 
 
 
 
Usage fees under firm contracts (1)
2,857

 
13,429

 
(78.7
)
Usage fees under interruptible contracts
5,966

 
4,239

 
40.7

Total volumetric based fee revenues
8,823

 
17,668

 
(50.1
)
Total operating revenues
101,097

 
87,777

 
15.2

Operating expenses:
 
 
 
 
 
Operating and maintenance
9,831

 
8,191

 
20.0

Selling, general and administrative
8,055

 
8,326

 
(3.3
)
Depreciation and amortization
11,687

 
6,744

 
73.3

Total operating expenses
29,573

 
23,261

 
27.1

Operating income
$
71,524

 
$
64,516

 
10.9

 
 
 
 
 
 
OPERATIONAL DATA
 

 
 

 
 

Transmission pipeline throughput (BBtu per day)
 
 
 
 
 
Firm capacity reservation
2,119

 
1,622

 
30.6

Volumetric based services (2)
31

 
487

 
(93.6
)
Total transmission pipeline throughput
2,150

 
2,109

 
1.9

 
 
 
 
 
 
Average contracted firm transmission reservation commitments (BBtu per day)
3,743

 
3,005

 
24.6

 
 
 
 
 
 
Capital expenditures
$
21,389

 
$
60,071

 
(64.4
)

(1)
Includes commodity charges and fees on all volumes transported under firm contracts as well as transmission fees on volumes in excess of firm contracted capacity.

(2)
Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity.

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016
 
Transmission and storage revenues increased by $13.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 . Firm reservation fee revenues increased due to affiliates and third parties contracting for additional capacity under firm contracts, primarily on the Ohio Valley Connector (OVC), as well as higher contractual rates on existing contracts in the current year. The firm capacity on the OVC resulted in lower affiliate usage fees under firm contracts.

Operating expenses increased by $6.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 . The increases in operating and maintenance expense and depreciation and amortization expense were the result of the OVC project placed in service in the fourth quarter of 2016. Operating and maintenance expense increased primarily due to property taxes on OVC.

Other Income Statement Items
 
Other income decreased by $1.6 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 . The decrease was primarily driven by distributions from EES of $2.8 million which were recorded as other income in the first quarter of 2016 and decreased AFUDC - equity of $1.2 million associated with the OVC project placed in-service in the fourth quarter of 2016, partly offset by higher equity income related to EQM's portion of the MVP Joint Venture's AFUDC on the MVP.

Net interest expense increased by $3.4 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily driven by $5.2 million of interest incurred on EQM's long-term debt issued in November 2016 partly offset by $1.7 million of interest income recorded on distributions from EES.


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See Note I to the consolidated financial statements for discussion of income tax expense.
 
See “Investing Activities” and “Capital Requirements” in the “Capital Resources and Liquidity” section below for a discussion of capital expenditures.

Non-GAAP Financial Measures
 
Adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of EQM’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess:

•
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.

EQM believes that adjusted EBITDA and distributable cash flow provide useful information to investors in assessing its financial condition and results of operations. Adjusted EBITDA and distributable cash flow should not be considered as alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and distributable cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect net income and net cash provided by operating activities. Additionally, because adjusted EBITDA and distributable cash flow may be defined differently by other companies in its industry, EQM’s adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing the utility of the measures. Distributable cash flow should not be viewed as indicative of the actual amount of cash that EQM has available for distributions from operating surplus or that it plans to distribute.

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Reconciliation of Non-GAAP Financial Measures
 
The following table presents a reconciliation of EQM's non-GAAP financial measures of adjusted EBITDA and distributable cash flow with the most directly comparable EQM GAAP financial measures of net income and net cash provided by operating activities.
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands)
Net income
$
143,196

 
$
136,735

Add:
 
 
 
Net interest expense
7,926

 
4,552

Depreciation and amortization expense
20,547

 
14,007

Income tax expense
—

 
3,435

Preferred Interest payments received post conversion
2,746

 
—

Non-cash long-term compensation expense
225

 
195

Less:
 
 
 
Equity income
(4,277
)
 
(1,589
)
AFUDC – equity
(1,699
)
 
(2,937
)
Pre-acquisition capital lease payments for AVC (1)
—

 
(9,364
)
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition (2)
—

 
(3,463
)
Adjusted EBITDA
$
168,664

 
$
141,571

Less:
 
 
 
Net interest expense excluding interest income on the Preferred Interest
(9,652
)
 
(4,551
)
Capitalized interest and AFUDC – debt
(1,600
)
 
(1,736
)
Ongoing maintenance capital expenditures net of expected reimbursements (3)
(2,608
)
 
(1,969
)
Distributable cash flow
$
154,804

 
$
133,315

 
 
 
 
Net cash provided by operating activities
$
161,422

 
$
116,327

Adjustments:
 
 
 
Pre-acquisition capital lease payments for AVC (1)
—

 
(9,364
)
Capitalized interest and AFUDC – debt
(1,600
)
 
(1,736
)
Principal payments received on Preferred Interest
1,020

 
—

Ongoing maintenance capital expenditures net of expected reimbursements (3)
(2,608
)
 
(1,969
)
Current tax expense
—

 
460

Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition (2)
—

 
(3,463
)
Other, including changes in working capital
(3,430
)
 
33,060

Distributable cash flow
$
154,804

 
$
133,315

 
(1)
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.

(2)
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 three months ended March 31, 2016 was calculated as net income of $0.2 million plus depreciation and amortization expense of $0.6 million plus income tax expense of $3.4 million less interest income of $0.3 million less AFUDC - equity of $0.4 million.

Adjusted EBITDA attributable to AVC, excluding income tax expense and AFUDC - equity, was previously included in EQM's results as a result of the capital lease and was eliminated from adjusted EBITDA by subtracting the capital lease payment; therefore, there is no adjustment for AVC's adjusted EBITDA prior to acquisition other than the capital lease payments, income tax expense and AFUDC - equity. Net income for AVC including decreased depreciation expense related to the 40 year useful life of the pipeline was $7.4 million for the three months ended March 31, 2016 (see Note B to the consolidated financial statements).

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(3)
Ongoing maintenance capital expenditures net of expected reimbursements excludes ongoing maintenance that EQM expects to be reimbursed or that was reimbursed by EQT under the terms of EQM's omnibus agreement of $1.0 million and $0.2 million for the three months ended March 31, 2017 and 2016 , respectively. Additionally, it excludes ongoing maintenance attributable to AVC, Rager and the Gathering Assets prior to acquisition of $2.9 million for the three months ended March 31, 2016 .
 
See "Executive Overview" above for a discussion of EQM's net income, the GAAP financial measure most directly comparable to adjusted EBITDA. EQM's adjusted EBITDA increased by $27.1 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 primarily as a result of the October 2016 Acquisition, which resulted in EBITDA subsequent to the transaction being reflected in adjusted EBITDA, including the elimination of the AVC lease payment, and higher operating income on increased revenues driven by production development in the Marcellus Shale.

Net cash provided by operating activities, the GAAP financial measure most directly comparable to distributable cash flow, increased by $45.1 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 as discussed in “Capital Resources and Liquidity." Distributable cash flow increased by $21.5 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 mainly attributable to the increase in adjusted EBITDA partly offset by increased net interest expense.

Outlook

EQM’s principal business objective is to increase the quarterly cash distributions that it pays to its unitholders over time while ensuring the ongoing growth of its business. EQM believes that it is well positioned to achieve growth based on the combination of its relationship with EQT and its strategically located assets, which cover portions of the Marcellus, Upper Devonian and Utica Shales that lack substantial natural gas pipeline infrastructure. EQM believes it has a competitive advantage in pursuing economically attractive organic expansion projects in its areas of operations, which EQM believes will be a key driver of growth in the future. EQM is also currently pursuing organic growth projects that are expected to provide access to markets in the Gulf Coast and Southeast regions. Additionally, EQM may pursue asset acquisitions from third parties or, if EQT were to purchase assets or companies that contain midstream assets, EQT may make those assets available to EQM. Should EQT choose to pursue midstream asset sales, it is under no contractual obligation to offer the assets to EQM.

EQM expects that the following expansion projects will allow it to capitalize on drilling activity by EQT and third party producers:

•
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 March 31, 2017 . 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 approximately $200 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. On March 31, 2017, the FERC issued an updated Notice of Schedule for the environmental review of the MVP. Based on the revised schedule, the MVP Joint Venture anticipates receiving the Final Environmental Impact Statement on June 23, 2017 and anticipates receiving the FERC

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certificate by the fourth quarter of 2017. 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.

See further discussion of capital expenditures in the “Capital Requirements” section below.

Commodity Prices . EQM’s business is dependent on the continued availability of natural gas production and reserves in its areas of operation. Low prices for natural gas, including those resulting from regional basis differentials, could adversely affect development of additional reserves and production that is accessible by EQM’s pipeline and storage assets. Appalachian Basin market prices for natural gas were depressed throughout 2016 and the three months ended March 31, 2017 . Lower regional natural gas prices could cause producers to determine in the future that drilling activities in areas outside of EQM’s current areas of operation are strategically more attractive to them. EQT, or third party customers on EQM's systems, may reduce capital spending in the future based on commodity prices or other factors. Unless EQM is successful in attracting and retaining unaffiliated third party customers, which accounted for 52% of transmission and storage revenues and 7% of gathering revenues for the three months ended March 31, 2017 , its ability to maintain or increase the capacity subscribed and volumes transported under service arrangements on its transmission and storage system as well as the volumes gathered on its gathering systems will be dependent on receiving consistent or increasing commitments from EQT. While EQT has dedicated acreage to EQM and has entered into long-term firm transmission and gathering contracts on EQM's systems, EQT may determine in the future that drilling in areas outside of EQM's current areas of operations is strategically more attractive to it, and it is under no contractual obligation to continue to develop its acreage dedicated to EQM.

EQM believes the high percentage of its revenues derived from reservation charges under long-term, firm contracts will mitigate the risk of revenue fluctuations due to changes in near-term supply and demand conditions and commodity prices. For more information see “Risks Inherent in Our Business - Any significant decrease in production of natural gas in our areas of operation could adversely affect our business and operating results and reduce our cash available to make distributions" included in Item 1A, "Risk Factors" of EQM's Annual Report on Form 10-K for the year ended December 31, 2016 .

Capital Resources and Liquidity
 
EQM’s principal liquidity requirements are to finance its operations, fund capital expenditures, potential acquisitions and capital contributions to the MVP Joint Venture, make cash distributions and satisfy any indebtedness obligations. EQM’s ability to meet these liquidity requirements will depend on its ability to generate cash in the future as well as its ability to raise capital in banking, capital and other markets. EQM’s available sources of liquidity include cash generated from operations, borrowing under EQM's credit facilities, cash on hand, debt offerings and issuances of additional EQM partnership units.
 
Operating Activities
 
Net cash flows provided by operating activities totaled $161.4 million for the three months ended March 31, 2017 compared to $116.3 million for the three months ended March 31, 2016 . The increase was primarily driven by the timing of working capital payments between the two periods and higher operating income for which contributing factors are discussed in the “Executive Overview” and "Business Segment Results of Operations" sections herein.
 
Investing Activities
 
Net cash flows used in investing activities totaled $81.7 million for the three months ended March 31, 2017 compared to $123.5 million for the three months ended March 31, 2016 . The decrease was primarily attributable to decreased capital expenditures as further described in the "Capital Requirements" section herein partly offset by increased capital contributions to the MVP Joint Venture and sales of interests in the MVP Joint Venture in 2016.
 

20
Table of Contents


Financing Activities

Net cash used in financing activities totaled $97.6 million for the three months ended March 31, 2017 compared to $353.4 million for the three months ended March 31, 2016 . For the three months ended March 31, 2017 , the primary use of cash was distributions paid to unitholders. For the three months ended March 31, 2016 , the primary uses of cash were repayments of credit facility borrowings and distributions paid to unitholders.

Capital Requirements
 
The gathering, transmission and storage businesses are capital intensive, requiring significant investment to develop new facilities and to maintain and upgrade existing operations. The following table presents capital expenditures for the three months ended March 31, 2017 and 2016 .  
 
Three Months Ended 
 March 31,
 
2017
 
2016
 
(Thousands)
Expansion capital expenditures (1)
$
66,645

 
$
127,950

Maintenance capital expenditures:
 
 
 
Ongoing maintenance
3,582

 
5,033

Funded regulatory compliance
—

 
175

Total maintenance capital expenditures
3,582

 
5,208

Total capital expenditures (2)
$
70,227

 
$
133,158

 
(1)  
Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of $19.8 million and $11.4 million for the three months ended March 31, 2017 and 2016 , respectively.

(2)
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 $34.0 million and $26.7 million at March 31, 2017 and December 31, 2016 , respectively. Accrued capital expenditures were approximately $32.7 million and $24.1 million at March 31, 2016 and December 31, 2015 , respectively.

Expansion capital expenditures decreased by $61.3 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016 as a result of decreased spending on the following projects: the OVC, the Range Resources Header Pipeline project and the NWV Gathering expansion. The OVC project, part of the Range Resources Header Pipeline project and a prior expansion project in the NWV Gathering development area were placed into service in the fourth quarter of 2016.

In 2017 , expansion capital expenditures and capital contributions to the MVP Joint Venture are expected to be $500 million to $550 million and ongoing maintenance capital expenditures are expected to be approximately $35 million, net of reimbursements. EQM’s future capital investments may vary significantly from period to period based on the available investment opportunities and are expected to grow substantially in future periods for the capital contributions to the MVP Joint Venture. Maintenance related capital expenditures are also expected to vary quarter to quarter. EQM expects to fund future capital expenditures primarily through cash on hand, cash generated from operations, availability under its credit facilities, debt offerings and issuances of additional EQM partnership units. EQM does not forecast capital expenditures associated with potential projects not committed as of the filing of this Quarterly Report on Form 10-Q.
 
Credit Facility Borrowings

See Note G to the consolidated financial statements for discussion of EQM’s credit facilities.


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Table of Contents


Security Ratings

The table below sets forth the credit ratings for debt instruments of EQM at March 31, 2017 .
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

EQM’s credit ratings are subject to revision or withdrawal at any time by the assigning rating organization and each rating should be evaluated independently of any other rating. EQM cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn entirely by a credit rating agency if, in its judgment, circumstances so warrant. If any credit rating agency downgrades EQM’s ratings, EQM’s access to the capital markets may be limited, borrowing costs could increase, EQM may be required to provide additional credit assurances in support of commercial agreements such as joint venture agreements and construction contracts, the amount of which may be substantial, and the potential pool of investors and funding sources may decrease. In order to be considered investment grade, a company must be rated Baa3 or higher by Moody’s, BBB- or higher by S&P, or BBB- or higher by Fitch. Anything below these ratings, including EQM's current credit rating of Ba1 by Moody's, is considered non-investment grade.

$750 Million ATM Program

As of April 27, 2017 , EQM had approximately $443 million in remaining capacity under the $750 Million ATM Program.

Distributions
 
See Note J to the consolidated financial statements for discussion of distributions.

Commitments and Contingencies
 
In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against EQM. While the amounts claimed may be substantial, EQM is unable to predict with certainty the ultimate outcome of such claims and proceedings. EQM accrues legal and other direct costs related to loss contingencies when actually incurred. EQM has established reserves it believes to be appropriate for pending matters, and after consultation with counsel and giving appropriate consideration to available insurance, EQM believes that the ultimate outcome of any matter currently pending against it will not materially affect its business, financial condition, results of operations, liquidity or ability to make distributions.

Off-Balance Sheet Arrangements

See Note F to the consolidated financial statements for further discussion of the MVP Joint Venture guarantee.
 
Critical Accounting Policies
 
EQM’s critical accounting policies are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in EQM’s Annual Report on Form 10-K for the year ended December 31, 2016 .  Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to EQM’s consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for the period ended March 31, 2017 . The application of EQM’s critical accounting policies may require management to make judgments and estimates about the amounts reflected in the consolidated financial statements.  Management uses historical experience and all available information to make these estimates and judgments.  Different amounts could be reported using different assumptions and estimates.

22
Table of Contents



Item 3.  Quantitative and Qualitative Disclosures About Market Risk
 
Interest Rate Risk
 
Changes in interest rates affect the amount of interest EQM earns on cash, cash equivalents and short-term investments and the interest rates EQM pays on borrowings under its credit facilities. EQM's long-term borrowings are fixed rate and thus do not expose EQM to fluctuations in its results of operations or liquidity from changes in market interest rates. Changes in interest rates do affect the fair value of EQM's fixed rate debt. See Note G to the consolidated financial statements for further discussion of EQM's borrowings and Note H to the consolidated financial statements for a discussion of fair value measurements. EQM may from time to time hedge the interest on portions of its borrowings under the credit facilities in order to manage risks associated with floating interest rates.
 
Credit Risk
 
EQM is exposed to credit risk which is the risk that EQM may incur a loss if a counterparty fails to perform under a contract. EQM manages its exposure to credit risk associated with customers through credit analysis, credit approval, credit limits and monitoring procedures. For certain transactions, EQM may request letters of credit, cash collateral, prepayments or guarantees as forms of credit support. EQM’s FERC tariffs require tariff customers that do not meet specified credit standards to provide three months of credit support; however, EQM is exposed to credit risk beyond this three month period when its tariffs do not require its customers to provide additional credit support. For some of EQM’s more recent long-term contracts associated with system expansions, it has entered into negotiated credit agreements that provide for enhanced forms of credit support if certain credit standards are not met. EQM has historically experienced only minimal credit losses in connection with its receivables. For the three months ended March 31, 2017 , approximately 87% of revenues were from investment grade counterparties. EQM is exposed to the credit risk of EQT, its largest customer. In connection with EQM's IPO in 2012, EQT guaranteed all payment obligations, up to a maximum of $50 million, due and payable to Equitrans, L.P., EQM's wholly owned FERC-regulated subsidiary, by EQT Energy, LLC, one of Equitrans, L.P.’s largest customers and a wholly owned subsidiary of EQT. The EQT guaranty will terminate on November 30, 2023 unless terminated earlier by EQT upon 10 days written notice. At March 31, 2017 , EQT’s public senior debt had an investment grade credit rating.

Other Market Risks
 
EQM's $750 Million Facility is underwritten by a syndicate of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by EQM. No one lender of the 18 financial institutions in the syndicate holds more than 10% of the facility. EQM’s large syndicate group and relatively low percentage of participation by each lender is expected to limit EQM’s exposure to problems or consolidation in the banking industry.

Item 4. Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
Under the supervision and with the participation of management of the EQM General Partner, including the EQM General Partner’s Principal Executive Officer and Principal Financial Officer, an evaluation of EQM’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) was conducted as of the end of the period covered by this report.  Based on that evaluation, the Principal Executive Officer and Principal Financial Officer of the EQM General Partner concluded that EQM’s disclosure controls and procedures were effective as of the end of the period covered by this report.
 
Changes in Internal Control over Financial Reporting
 
There were no changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the first quarter of 2017 that have materially affected, or are reasonably likely to materially affect, EQM’s internal control over financial reporting.

23


PART II.  OTHER INFORMATION
 
Item 1. Legal Proceedings
 
In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against EQM. While the amounts claimed may be substantial, EQM is unable to predict with certainty the ultimate outcome of such claims and proceedings. EQM accrues legal and other direct costs related to loss contingencies when actually incurred. EQM has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, EQM believes that the ultimate outcome of any matter currently pending against it will not materially affect its business, financial condition, results of operations, liquidity or ability to make distributions.

Item 1A. Risk Factors
 
Information regarding risk factors is discussed in Item 1A, “Risk Factors” of EQM’s Annual Report on Form 10-K for the year ended December 31, 2016 . There have been no material changes from the risk factors previously disclosed in EQM’s Annual Report on Form 10-K.

Item 6. Exhibits

2.1

Amendment No. 1 to Contribution and Sale Agreement, dated as of March 30, 2017, 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.
10.1

Amendment No. 2 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of March 30, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.  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.
10.2

Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of July 29, 2015, by and between EQT Corporation and M. Elise Hyland.
10.3

Transition Agreement and General Release, dated as of February 28, 2017, by and between EQT Corporation and M. Elise Hyland.
31.1

Rule 13(a)-14(a) Certification of Principal Executive Officer.
31.2

Rule 13(a)-14(a) Certification of Principal Financial Officer.
32

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.
101

Interactive Data File.

24

Signature
 
 
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 
 
 
 
EQT Midstream Partners, LP
 
(Registrant)
 
 
 
 
By:
EQT Midstream Services, LLC, its General Partner
 
 
 
 
 
 
 
 
 
 
By:
/s/ Robert J. McNally
 
 
Robert J. McNally
 
 
Senior Vice President and Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
Date:  April 27, 2017

25


INDEX TO EXHIBITS
 
Exhibit No.
 
Document Description
 
Method of Filing
2.1

 
Amendment No. 1 to Contribution and Sale Agreement, dated as of March 30, 2017, 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.
 
Filed herewith as Exhibit 2.1.
10.1

 
Amendment No. 2 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of March 30, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.  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 10.1.
10.2

 
Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of July 29, 2015, by and between EQT Corporation and M. Elise Hyland.
 
Filed herewith as Exhibit 10.2.
10.3

 
Transition Agreement and General Release, dated as of February 28, 2017, by and between EQT Corporation and M. Elise Hyland.
 
Filed herewith as Exhibit 10.3.
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.
101

 
Interactive Data File.
 
Filed herewith as Exhibit 101.


26
Exhibit 2.1

Execution Version

 
AMENDMENT NO. 1 TO CONTRIBUTION AND SALE AGREEMENT

THIS AMENDMENT NO. 1 TO CONTRIBUTION AND SALE AGREEMENT (this “ Amendment ”) is entered into as of March 30, 2017, by and among EQT Gathering, LLC, a Delaware limited liability company (“ EQT Gathering ”), EQT Energy Supply Holdings, LP, a Delaware limited partnership (“ EESH ”), EQT Energy, LLC, a Delaware limited liability company (“ EQT Energy ”), EQT Midstream Partners, LP, a Delaware limited partnership (“ EQM ”), EQT Midstream Services, LLC, a Delaware limited liability company and the general partner of EQM (“ EQM GP ”), EQM Gathering Opco, LLC, a Delaware limited liability company and indirect wholly owned subsidiary of EQM (“ EQM Gathering Opco ”), and EQT Corporation, a Pennsylvania corporation (“ EQT ” and together with EQT Gathering, EESH, EQT Energy, EQM, EQM GP and EQM Gathering Opco, the “ Parties ”).

WHEREAS, the Parties are parties to that certain Contribution and Sale Agreement, dated as of March 10, 2015 (the “ Contribution Agreement ”); and

WHEREAS, EQT Energy and EQT Production Company, a Pennsylvania corporation and indirect wholly owned subsidiary of EQT (“ EPC ”), on the one hand, and EQM Gathering Opco, on the other hand, are parties to that certain Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, effective as of March 1, 2015 (as amended, the “ Gathering Agreement ”); and

WHEREAS, EQT Energy, EPC and EQM Gathering Opco desire to amend the Gathering Agreement to, among other things, update (i) certain receipt points, delivery points and other operational information, (ii) certain contractual and compression maximum daily quantities and (iii) the list and commencement dates of certain capital projects associated with the Gathering Agreement (the “ Gathering Agreement Amendment ”); and

WHEREAS, in connection with the Gathering Agreement Amendment, the Parties desire to amend the Contribution Agreement in order to revise the Interim Reimbursement and the Final Cost (as such terms are defined in the Contribution Agreement); and

WHEREAS, pursuant to Section 10.2 of the Contribution Agreement, the Contribution Agreement may be amended by a written instrument signed by each of the Parties provided that the Conflicts Committee (as defined in the Contribution Agreement) has approved such amendment; and

WHEREAS, the Conflicts Committee approved this Amendment on March 22, 2017.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties agree as follows:

1.     Capitalized Terms . Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Contribution Agreement.



2.     Amendment to Section 6.10 . Section 6.10 of the Contribution Agreement is hereby deleted in its entirety and replaced by the following Section 6.10 :
“Section 6.10 Reimbursement of Expansion Capital Cost Overruns . EQM Gathering Opco acknowledges and agrees that following the Closing of the Asset Contribution it shall be obligated under the MPPS Gas Gathering Agreement to construct the MPPS Expansions in accordance with the terms of the MPPS Gas Gathering Agreement. EQT Gathering agrees to promptly reimburse EQM Gathering Opco for the amount by which the aggregate costs of the MPPS Expansions paid by EQM Gathering Opco (i) prior to December 31, 2017, exceeds $274,100,000 (such reimbursed amount, if any, being the “ Interim Reimbursement ”) and (ii) prior to December 31, 2020 (the aggregate cost as of such date being the “ Final Cost ”), exceeds the cumulative amount of $358,800,000; provided, that if, (i) the Final Cost is less than $358,800,000, EQM Gathering Opco shall refund to EQT Gathering the entirety of the Interim Reimbursement, (ii) the Final Cost is greater than $358,800,000 but less than the sum of $358,800,000 plus the Interim Reimbursement, EQM Gathering Opco shall refund to EQT Gathering the amount by which the Interim Reimbursement exceeds the difference of the Final Cost less $358,800,000 and (iii) the Final Cost is greater than or equal to the sum of $358,800,000 plus the Interim Reimbursement, no refund of the Interim Reimbursement is required, but the additional reimbursement in connection with the Final Cost shall be reduced by the Interim Reimbursement already paid. If construction of any of the MPPS Expansions is delayed past December 31, 2020 as a result of factors not within the control of EQM Gathering Opco, the reimbursement and refund obligations tied to such date shall be extended to ninety (90) days after the date of completion of such MPPS Expansions. For federal income tax purposes, EQM will report such payments, if any, as a purchase price adjustment in the form of a contribution to the capital of EQM or a non-pro rata distribution by EQM, as the case may be.”
3.      Miscellaneous .

(a)    Except as expressly amended by this Amendment, all provisions of the Contribution Agreement shall remain in full force and effect.

(b)    This Amendment shall be construed and enforced in accordance with Applicable Law of the Commonwealth of Pennsylvania without giving effect to the choice of law principles thereof.

(c)    This Amendment may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


     2


IN WITNESS WHEREOF , this Amendment No. 1 to Contribution and Sale Agreement has been executed by the Parties hereto as of the date first written above.

EQT GATHERING, LLC


By: /s/ David E. Schlosser, Jr.            
Name: David E. Schlosser, Jr.
Title: President



EQT ENERGY SUPPLY HOLDINGS, LP

By: EQT Energy, LLC, its general partner


By: /s/ Donald M. Jenkins            
Name: Donald M. Jenkins
Title: President



EQT ENERGY, LLC


By: /s/ Donald M. Jenkins            
Name: Donald M. Jenkins
Title: President



EQT CORPORATION


By: /s/ Robert J. McNally            
Name: Robert J. McNally
Title:
Senior Vice President and Chief Financial Officer



Signature Page to Amendment No. 1 to Contribution and Sale Agreement


EQT MIDSTREAM PARTNERS, LP

By: EQT Midstream Services, LLC,
its general partner


By: /s/ Robert J. McNally            
Name: Robert J. McNally
Title:
Senior Vice President and Chief Financial Officer



EQT MIDSTREAM SERVICES, LLC


By: /s/ Robert J. McNally            
Name: Robert J. McNally
Title: Senior Vice President and Chief Financial Officer



EQM GATHERING OPCO, LLC


By: /s/ M. Elise Hyland                
Name: M. Elise Hyland
Title: President





Signature Page to Amendment No. 1 to Contribution and Sale Agreement
Exhibit 10.1
Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act. Omitted information marked “ [***] ” in this Exhibit has been filed with the Securities and Exchange Commission together with such request for confidential treatment.     

EXECUTION VERSION
AMENDMENT NO. 2
TO
GAS GATHERING AGREEMENT FOR THE MERCURY, PANDORA,
PLUTO AND SATURN GAS GATHERING SYSTEMS
This Amendment No. 2 to the Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems (this “ Amendment ”) is made and entered into as of March 28, 2017, with an effective date as of November 1, 206 (the “ Effective Date ”), by and between EQT Production Company (“ Producer ”) and EQT Energy, LLC (collectively with Producer, “ Shipper ”), on the one hand, and EQM Gathering OPCO, LLC (“ Gatherer ”), on the other hand. Producer, Shipper and Gatherer are each referred to herein as a “ Party ” and collectively as the “ Parties ”.

WHEREAS, the Parties made and entered into that certain Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems dated March 1, 2015 (the “Agreement”), as amended by that certain Amendment No. 1 to the Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems dated September 18, 2015, pursuant to which, among other provisions, Shipper requested that Gatherer provide the gathering of natural gas on behalf of Shipper by receiving quantities of natural gas and redelivering it to or for Shipper’s account; and

WHEREAS, the Parties intend to amend the Agreement, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

1. Definitions . All capitalized terms used but not otherwise defined or amended herein shall have the meanings ascribed to them in the Agreement.

2. Amendments .

a.
Exhibit A-1 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit A-1 attached hereto.

b.
Exhibit A-2 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit A-2 attached hereto.

c.
Exhibit B-1 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit B-1 attached hereto.



d.
Section II (Table of Incremental Capital Fees) of Exhibit B-2 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Section II (Table of Incremental Capital Fees) of Exhibit B-2 attached hereto.

e.
Exhibit D attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit D attached hereto.

f.
Exhibit D-2 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit D-2 attached hereto.

g.
Exhibit D-4 attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit D-4 attached hereto.

h.
The table set forth in Section III A.1. of Exhibit F attached to the Agreement is hereby deleted in its entirety and replaced with the revised table set forth in Section III A.1. of Exhibit F attached hereto.

3. Effect of Amendment . The Agreement, as amended hereby, shall remain in full force and effect, and all terms hereof are hereby ratified and confirmed by the Parties.

4. Further Actions . The Parties agree to execute such other documents and take such further actions necessary to effectuate this Amendment.

5. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement. It is agreed by the Parties that facsimile or electronic (.pdf) copies of the signature pages signed by the Parties shall be binding to the same extent as original signature pages.

6. Entire Agreement . This Amendment is the entire agreement between the Parties concerning the subject matter hereof and neither Party shall be bound by representations except as set forth in this Amendment.

7. Amendments . This Amendment may not be modified or amended except by a written agreement signed by the Parties.


[Remainder of page intentionally blank]




EXECUTION VERSION
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

EQT PRODUCTION COMPANY
EQM GATHERING OPCO, LLC
By:    /s/ David E. Schlosser, Jr.    
By:    /s/ M. Elise Hyland       
Name:    David E. Schlosser, Jr.    
Name:    M. Elise Hyland       
Title:    President          
Title:     President          

EQT ENERGY, LLC
 
By:    /s/ Donald M. Jenkins       
 
Name:    Donald M. Jenkins       
 
Title:     President          
 


[SIGNATURE PAGE TO AMENDMENT NO. 2 TO GAS GATHERING AGREEMENT FOR THE MERCURY, PANDORA, PLUTO AND SATURN GAS GATHERING SYSTEMS]





EXHIBIT A-1
RECEIPT POINTS, DELIVERY POINTS AND RECEIPT POINT MDQ

RECEIPT POINTS
 
System
Receipt Point Meter ID
Receipt Point Meter Name
Receipt Point MDQ
Mcf / Day
 
 
Mercury
5100016
Big 176 Gathering MM A Run
68,600
 
Mercury
5100042
Big 333/192 MM A Run
117,300
 
Mercury
5100045
PNG 129 Gathering MM A Run
117,300
 
Mercury
5100069
PNG 103 MM A RUN UPGRADE
117,300
 
Mercury
5100070
PNG 103 MM B RUN UPGRADE
68,600
 
Mercury
5100115
Big 7 MM
68,600
 
Mercury
M5208892
Big 333/192 B Run
68,600
 
Mercury
M5223136
BIG 176 Gathering MM B Run
117,300
 
Mercury
M5223466
PNG 129 Gathering MM B Run
117,300
 
Mercury
M5254143
BIG177 MM
117,300
 
Pandora
M5214491
CPT 11 MM
68,600
 
Pandora
M5214966
SMI 27 Gathering MM
117,300
 
Pandora
M5260005
WEU4 MM
117,300
 
Pandora
M5248857
SHR60 MM A RUN
68,600
 
Pandora
M5248860
SHR60 MM B RUN
68,600
 
Pluto
24491
RSM16
68,600
 
Pluto
24582
RSM110/112 Gathering Meter
68,600
 
Pluto
24595
RSM 118 Gathering MM
68,600
 
Pluto
24596
RSM 119 Gathering MM
68,600
 
Pluto
M5219740
RSM110/112 Gathering Meter
68,600
 
Pluto
M5234431
RSM 118 Gathering MM B Run
117,300
 
Saturn
24454
OXF 114, 115
19,600
 
Saturn
24455
OXF 121
19,600
 
Saturn
24456
OXF 43 and 44 MM
45,900
 
Saturn
24470
OXF 149/150/156 MM A Run
45,900
 
Saturn
24471
OXF 138 Interconnect
45,900
 
Saturn
24472
OXF 127 Interconnect
45,900
 
Saturn
24481
OX131/152/153Gathering MM
45,900
 
Saturn
24492
WEU 1&2 B Gathering Meter
45,900
 
Saturn
24556
OXF 16 MM
19,600
 
Saturn
24625
OXF 131/152/153 Gathering B Run
45,900
 
Saturn
5100020
PEN 15 Master Meter A Run
45,900
 
Saturn
5100048
PEN15 MM B RUN
45,900
 
Saturn
M5260002
PUL96 MM A RUN
45,900
 
Saturn
M5260004
PUL96 MM B RUN
45,900
 
Saturn
5100059
SMI 28 MM A Run
78,500

Exhibit A-1
Page A-1

Saturn
5100061
SMI 28 MM B Run
45,900
Saturn
M5212896
WEU-8 Gathering MM
78,500
Saturn
M5214202
WEU 51 MM
78,500
Saturn
M5214970
WEU 6 Gathering MM A Run
45,900
Saturn
M5222001
OXF 149/150/156MM B Run
45,900
Saturn
M5223803
OXF 157-159 Gathering MM A Run
45,900
Saturn
M5223804
OXF 157-159 Gathering MM B Run
45,900
Saturn
M5225932
WEU 6 MM B Run
45,900
Saturn
M5228452
WEU 1-2-49 MM
45,900
Saturn
M5243558
OXF163 MM Gather
78,500
Saturn
M5243552
OXF122 MM Gather
78,500
Saturn
M5274207
PEN 54 - MM1
78,500
Saturn
M5274212
PEN 54 – MM2
78,500

DELIVERY POINTS
 
System
Delivery Point Meter ID
Delivery Point Meter Name
 
 
Mercury
5100025
MarkWest Mobley 2 (High pressure)
 
Mercury
M5202956
Mercury to MarkWest B Run (High pressure)
 
Mercury
M5209276
Mercury to MW - 16" run 1 (Low pressure)
 
Mercury
M5209277
Mercury to MW - 16" run 2 (Low pressure)
 
Mercury
5100017
Mercury to 302 (Mobley bypass)
 
Mercury
M5224080
Mercury to H-515 (Mobley bypass)
 
Pluto
24490
Pluto to GSF-604
 
Saturn
24452
Pierce North to Equitrans Gathering
 
Saturn
24453
Leeson South to Equitrans Gathering
 
Saturn
24484
Saturn Discharge to WG100
 
Saturn
M5229563
Saturn Units 6 & 7 Discharge to WG100
 
Saturn
M5270331
Janus Discharge 8” USM
 
Pandora
M5236043
Pandora Discharge 8" USM

DRIP LIQUIDS DELIVERY POINT
 
System
Delivery Point Meter ID
Delivery Point Meter Name
 
 
Mercury
5100093
MarkWest Mobley (Logansport, West Virginia)
 
Saturn
M5206528
NGLs from Saturn to WG100
 
Saturn
M5229478
Saturn CS Liquids to WG100
 
Saturn
M5270332
Janus CS Liquids to WG100
 
Pandora
M5236148
Pandora Liquid Meter


Exhibit A-1
Page A-2


EXHIBIT A-2
CONTRACT MDQ, COMPRESSION MDQ AND TARGET RECEIPT POINT PRESSURES

Gathering System
Contract MDQ
Compression MDQ
Target Receipt Point Pressure
(Psig)
(Mcf/d)

(Dth/d)
(Mcf/d)

(Dth/d)
Mercury System
200,000
236,000
[***]
[***]
[***]
Pandora System
100,000
122,800
[***]
[***]
[***]
Pluto System
40,000
41,080
[***]
[***]
[***]
Saturn System
300,000
371,100
[***]
[***]
[***]
System
Receipt Point Meter ID
Receipt Point Meter Name
Receipt Point Contract MDQ
Mcf/Day*
Saturn
24454
OXF 114, 115
2,000
Saturn
24455
OXF 121
2,000
Saturn
24456
OXF 43 and 44 MM
5,000
Saturn
24470
OXF 149/150/156 MM A Run
12,000
Saturn
24471
OXF 138 Interconnect
3,000
Saturn
24472
OXF 127 Interconnect
17,000
Saturn
24481
OX131/152/153Gathering MM
28,000
Saturn
24492
WEU 1&2 B Gathering Meter
17,500
Saturn
24556
OXF 16 MM
1,000
Saturn
24625
OXF 131/152/153 Gathering B Run
28,000
Saturn
5100020
PEN 15 Master Meter A Run
12,500
Saturn
5100048
PEN15 MM B RUN
12,500
Saturn
M5260002
PUL96 MM A RUN
46,000
Saturn
M5260004
PUL96 MM B RUN
46,000
Saturn
5100059
SMI 28 MM A Run
8,500
Saturn
5100061
SMI 28 MM B Run
8,500
Saturn
M5212896
WEU-8 Gathering MM
13,000
Saturn
M5214202
WEU 51 MM
17,000
Saturn
M5214970
WEU 6 Gathering MM A Run
5,000
Saturn
M5222001
OXF 149/150/156MM B Run
12,000
Saturn
M5223803
OXF 157-159 Gathering MM A Run
16,000

Exhibit A-2
Page A-3

Saturn
M5223804
OXF 157-159 Gathering MM B Run
16,000
Saturn
M5225932
WEU 6 MM B Run
5,000
Saturn
M5228452
WEU 1-2-49 MM
17,500
Saturn
M5243558
OXF163 MM Gather
39,500
Saturn
M5243552
OXF122 MM Gather
39,500
Saturn
M5274207
PEN 54 - MM1
30,000
Saturn
M5274212
PEN 54 – MM2
30,000

*The Receipt Point Contract MDQ in this table shall be used for the purposes of calculating Actual Average Receipt Point Pressure under Section 5.4(b).


Exhibit A-2
Page A-4



EXHIBIT B-1
FEES
1.
Fee . The Fees to be paid by Shipper to Gatherer for Gathering Services shall include the following:
[***] Four (4) pages omitted from this exhibit pursuant to confidential treatment request.



Exhibit B-1
Page B-1


EXHIBIT B-2
Section II - Table of Incremental Capital Fees

[***]



Exhibit B-2
Page B-5



EXHIBIT D
DESCRIPTION OF GATHERING SYSTEM

[***] Three (3) pages omitted from this exhibit pursuant to confidential treatment request.



Exhibit D-1
Page D-1


  
PRESSURE REDUCTION PROJECTS DEPICTED ON EXHIBIT D-4

PIPELINES
Pipeline Name
Commencement Date
Outside Diameter (inches)
Length
(approx. miles)
MOSAD002
10/19/2016
16
2.5
MOSAD003
10/19/2016
16
4.0
MOSAS031
8/31/2017
20
8.5
MOSAS032
8/14/2018
20
1.8
MOSAS033
10/3/2016
20
6.5
MOSAS034
12/4/2018
20
2.6
MOSAS037
12/17/2018
12
4.9

COMPRESSION
Station Name
Commencement Date
Incremental Horsepower
Total Station Horsepower
Janus Station
12/31/2017
10,000
20,000



Exhibit D-4
Page D-4


EXHIBIT F
Section III A.1. – Receipt Point Interconnect Data

 
System
Meter ID
Meter Name
GPS Coordinates
MAOP
Min DQ
Mcf/Day
Max DQ
Mcf/Day
 
 
Mercury
5100016
Big 176 Gathering MM A Run
-80.55179
39.55602
1,440
1,900
68,600
 
Mercury
5100042
Big 333/192 MM A Run
-80.58099
39.52385
1,440
3,200
117,300
 
Mercury
5100045
PNG 129 Gathering MM A Run
-80.64344
39.55349
1,440
3,200
117,300
 
Mercury
5100069
PNG 103 MM A RUN UPGRADE
-80.62447
39.56334
1,440
3,200
117,300
 
Mercury
5100070
PNG 103 MM B RUN UPGRADE
-80.62447
39.56334
1,440
1,900
68,600
 
Mercury
5100115
Big 7 MM
-80.61385
39.57679
1,440
1,900
68,600
 
Mercury
M5208892
Big 333/192 B Run
-80.58099
39.52385
1,440
1,900
68,600
 
Mercury
M5223136
BIG 176 Gathering MM B Run
-80.55179
39.55602
1,440
3,200
117,300
 
Mercury
M5223466
PNG 129 Gathering MM B Run
-80.64344
39.55349
1,440
3,200
117,300
 
Mercury
M5254143
BIG177 MM
-80.5842
39.58225
1,440
1,900
117,300
 
Pandora
M5214491
CPT 11 MM
-80.72431
39.38134
1,440
1,900
68,600
 
Pandora
M5214966
SMI 27 Gathering MM
-80.7027132
39.3813596
1,440
3,200
117,300
 
Pandora
M5248857
SHR60 MM A RUN
-80.8177
39.38813
1440
800
68,600
 
Pandora
M5248860
SHR60 MM B RUN
-80.8177
39.38813
1440
800
68,600
 
Pandora
M5260005
WEU4 MM
39.36664
-80.82072
1440
3,200
117,300
 
Pluto
24491
RSM16
-80.14147
39.32203
1,440
1,900
68,600
 
Pluto
24582
RSM110/112 Gathering Meter
-80.16256
39.31757
1,440
1,900
68,600
 
Pluto
24595
RSM 118 Gathering MM
-80.18918
39.29457
1,440
1,900
68,600
 
Pluto
24596
RSM 119 Gathering MM
-80.15786
39.29579
1,440
1,900
68,600
 
Pluto
M5219740
RSM110/112 Gathering Meter
-80.16256
39.31757
1,440
1,900
68,600
 
Pluto
M5234431
RSM 118 Gathering MM B Run
-80.1892
39.29487
1440
1,450
117,300
 
Saturn
24454
OXF 114, 115
-80.80857
39.14277
720
600
19,600
 
Saturn
24455
OXF 121
-80.8068
39.1359
720
600
19,600
 
Saturn
24456
OXF 43 and 44 MM
-80.81166
39.14533
720
1,200
45,900
 
Saturn
24470
OXF 149/150/156 MM A Run
-80.78491
39.21018
720
1,200
45,900
 
Saturn
24471
OXF 138 Interconnect
-80.78468
39.20905
720
1,200
45,900
 
Saturn
24472
OXF 127 Interconnect
-80.80583
39.19561
720
1,200
45,900
 
Saturn
24481
OX131/152/153Gathering MM
-80.79538
39.18596
720
1,200
45,900
 
Saturn
24492
WEU 1&2 B Gathering Meter
-80.7872
39.2635
720
1,200
45,900
 
Saturn
24556
OXF 16 MM
-80.77924
39.18906
720
600
19,600
 
Saturn
24625
OXF 131/152/153 Gathering B Run
-80.7952
39.18556
720
1,200
45,900
 
Saturn
5100020
PEN 15 Master Meter A Run
-80.936507
39.2502322
720
1,200
45,900
 
Saturn
5100048
PEN15 MM B RUN
-80.936507
39.2502322
720
1,200
45,900
 
Saturn
5100059
SMI 28 MM A Run
-80.74666
39.25743
720
2,100
78,500
 
Saturn
5100061
SMI 28 MM B Run
-80.74666
39.25743
720
1,200
45,900
 
Saturn
M5212896
WEU-8 Gathering MM
-80.80077
39.27448
720
2,100
78,500
 
Saturn
M5214202
WEU 51 MM
-80.76367
39.25619
720
2,100
78,500

Exhibit F
Page F-1

Saturn
M5214970
WEU 6 Gathering MM A Run
-80.75645
39.29037
720
1,200
45,900
Saturn
M5222001
OXF 149/150/156MM B Run
-80.78491
39.21018
720
1,200
45,900
Saturn
M5223803
OXF 157-159 Gathering MM A Run
-80.76716
39.21132
720
1,200
45,900
Saturn
M5223804
OXF 157-159 Gathering MM B Run
-80.76716
39.21132
720
1,200
45,900
Saturn
M5225932
WEU 6 MM B Run
-80.75645
39.29037
720
1,200
45,900
Saturn
M5228452
WEU 1-2-49 MM
-80.7872
39.2635
720
1,200
45,900
Saturn
M5243558
OXF163 MM Gather
-80.8069
39.13586
720
1,650
78,500
Saturn
M5243552
OXF122 MM Gather
-80.8069
39.13586
720
1,650
78,500
Saturn
M5260002
PUL96 MM A RUN
-80.98591
39.21114
720
1,200
45,900
Saturn
M5260004
PUL96 MM B RUN
-80.98591
39.21114
720
1,200
45,900
Saturn
M5274207
PEN 54 - MM1
-80.92757
39.25374
720
2,100
78,500
Saturn
M5274212
PEN 54 – MM2
-80.92757
39.25374
720
2,100
78,500


Exhibit F
Page F-2

Exhibit 10.2

AMENDED AND RESTATED
CONFIDENTIALITY, NON‑SOLICITATION and
NON‑COMPETITION AGREEMENT
This AMENDED AND RESTATED CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT (this “Agreement”) is entered into and effective as of July 29, 2015, by and between EQT Corporation, a Pennsylvania corporation (EQT Corporation and its subsidiary companies are hereinafter collectively referred to as the “Company”), and M. Elise Hyland (the “Employee”). This Agreement amends and restates in its entirety that certain Confidentiality, Non-Solicitation and Non-Competition Agreement by and between the Company and the Employee originally dated as of September 8, 2008, as amended effective January 1, 2014 and January 1, 2015 (the “Original Agreement”).
WITNESSETH:
WHEREAS, during the course of Employee’s employment with the Company, the Company has imparted and will continue to impart to Employee proprietary and/or confidential information and/or trade secrets of the Company; and
WHEREAS, in order to protect the business and goodwill of the Company, the Company desires to obtain or continue to obtain certain confidentiality, non-competition and non‑solicitation covenants from the Employee; and
WHEREAS, the Employee is willing to agree to these confidentiality, non-competition and non-solicitation covenants by entering into this Agreement, which amends and restates the Original Agreement, in exchange for the Company's agreement to pay the severance benefits described in Section 3 below in the event that Employee's employment with the Company is terminated in certain circumstances; and
WHEREAS, the Company and the Employee are parties to that certain Amended and Restated Change of Control Agreement, originally dated as of September 8, 2008, and previously amended and restated as of February 19, 2013 (the “Change of Control Agreement”);
WHEREAS, the Company and Employee are terminating the Change of Control Agreement by mutual agreement pursuant to the Termination of Amended and Restated Change of Control Agreement (the “Termination Agreement”) being entered into concurrently herewith, and desire and intend that this Agreement shall replace and supersede the Change of Control Agreement in its entirety; and
WHEREAS, the Company and Employee acknowledge and agree that this Agreement shall not be effective unless and until the Termination Agreement shall have been executed and delivered by the Company and the Employee;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:


1.     Restrictions on Competition and Solicitation . While the Employee is employed by the Company and for a period of twenty-four (24) months after the date of Employee's termination of employment with the Company for any reason Employee will not, directly or indirectly, expressly or tacitly, for himself/herself or on behalf of any entity conducting business anywhere in the Restricted Territory (as defined below): (i) act in any capacity for any business in which his/her duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, (ii) recruit investors on behalf of an entity which engages in activities which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, or (iii) become employed by such an entity in any capacity which would require Employee to carry out, in whole or in part, the duties Employee has performed for the Company which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under active investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company. Notwithstanding the foregoing, the Employee may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or businesses under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company only to the extent that Employee acquired or was privy to confidential information regarding such services, products or businesses. Employee acknowledges that this restriction will prevent Employee from acting in any of the foregoing capacities for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the business of the Company.
Restricted Territory shall mean (i) the entire geographic location of any natural gas and oil play in which the Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights and pipeline capacity contracts on non-affiliated or third-party pipelines), including but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities, propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (ii) the entire geographic location of any natural gas and oil play in which the Company owns proved, developed and/or undeveloped natural gas and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iii) the entire geographic location of any natural gas and oil play in which the Company has decided to make or has made an offer to purchase or lease assets for the purpose of conducting any of the business activities described in subparagraphs (i) and (ii) above within the six (6) month period immediately preceding the end of the Employee’s employment with the Company provided that Employee had actual knowledge of the offer or decision to make an offer prior to Employee’s separation from the Company. For geographic locations of natural gas and oil plays, refer to the maps produced by the United States Energy Information Administration located at www.eia.gov/maps.

2


Employee agrees that for a period of twenty-four (24) months following the termination of Employee's employment with the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or indirectly, solicit the business of, or do business with: (i) any customer that Employee approached, solicited or accepted business from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company; and (ii) any prospective customer of the Company who was identified to or by the Employee and/or who Employee was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company, for purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product or service the Company offers within the last two (2) years prior to the end of Employee's employment with the Company, and/or, which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of Employee's employment with the Company to be offered in the future.
While Employee is employed by the Company and for a period of thirty-six (36) months after the date of Employee's termination of employment with the Company for any reason, Employee shall not (directly or indirectly) on his/her own behalf or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or induce, any employee, consultant, vendor or independent contractor to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to violate the terms of their contracts with the Company.
2.     Confidentiality of Information and Nondisclosure . Employee acknowledges and agrees that his/her employment by the Company necessarily involves his/her knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, he/she will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself/herself, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Section 2 prohibits Employee from reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation.
3.     Severance Benefit . If the Employee’s employment is terminated by the Company for any reason other than Cause (as defined below) or if the Employee terminates his/her

3


employment for Good Reason (as defined below), the Company shall provide Employee with the following:
(a) A lump sum payment payable within 60 days following Employee’s termination date equal to twenty-four (24) months of Employee’s base salary in effect at the time of such termination, or immediately prior to the event that serves as the basis for termination for Good Reason;
(b) A lump sum payment payable within 60 days following Employee’s termination date equal to two times the average annual incentive (bonus) payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any successor plan) for the three (3) full years prior to Employee’s termination date;
(c) A lump sum payment payable within 60 days following Employee’s termination date equal to the product of (i) twelve (12) and (ii) 100% of the then-current Consolidated Omnibus Budget Reconciliation Act of 1985 monthly rate for family coverage;
(d) A lump sum payment payable within 60 days following Employee’s termination date equal to $200,000;
(e) Subject to Section 14 of this Agreement, all stock options, restricted stock, restricted stock units and other time-vesting equity awards granted to Employee under the 2009 EQT Corporation Long-Term Incentive Plan (as amended, the “2009 LTIP”), the EQT Corporation 2014 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2014 LTIP”), the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2012 LTIP”), the EQT GP Services, LLC 2015 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2015 LTIP”), and any other long-term incentive plan of the Company (the 2009 LTIP, the 2014 LTIP, the 2012 LTIP, the 2015 LTIP and any other long-term incentive plan of the Company are, collectively, the “LTIPs”) shall immediately become vested and exercisable in full and/or all restrictions on such awards shall lapse (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program); and
(f) Subject to Section 14 of this Agreement, all performance-based equity awards granted to Employee by the Company under the LTIPs shall remain outstanding and shall be earned, if at all, based on actual performance through the end of the performance period as if Employee’s employment had not been terminated (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program).
(g) Subject to Section 14 of this Agreement, all “value driver”-type performance-based equity awards (i.e., equity awards that may be earned based the Company’s attainment of one or more threshold performance goals together with the application of a performance multiplier based on individual performance, and become vested based on Employee’s continued employment with the Company through one or more vesting dates) shall be earned based on (i) “target” levels of performance, if Employee’s termination date occurs before the relevant performance level has been approved by the Management Development and Compensation

4


Committee of the Board of Directors (the “Committee”), or (ii) actual levels of performance, if Employee’s termination date occurs after the relevant performance level has been approved by the Committee, and in either case, the number of award shares earned shall immediately become vested and payable as of the date of termination (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program).
The payments provided under this Section 3 shall be subject to applicable tax and payroll withholdings, and shall be in addition to any payments and/or benefits to which the Employee would otherwise be entitled under the EQT Corporation Severance Pay Plan (as amended from time to time). The Company’s obligation to provide the payments and benefits under this Section 3 shall be contingent upon the following:
(a) Employee’s execution of a release of claims in a form acceptable to the Company; and
(b) Employee’s compliance with his/her obligations hereunder, including, but not limited to, Employee’s obligations set forth in Sections 1 and 2 (the “Restrictive Covenants”).
Solely for purposes of this Agreement, “Cause” as a reason for the Employee’s termination of employment shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of his/her duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of a written employment-related agreement between Employee and the Company or express significant policies of the Company. If the Company terminates Employee’s employment for Cause, the Company shall give Employee written notice setting forth the reason for his/her termination not later than 30 days after such termination.
Solely for purposes of this Agreement, “Good Reason” shall mean Employee’s resignation within 90 days after: (i) a reduction in Employee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Employee’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 Employee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Employee’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. A termination by Employee shall not constitute termination for Good Reason unless Employee first delivers to the General Counsel of the Company written notice: (i) stating that Employee intends to resign for Good Reason pursuant to this Agreement; and (ii) setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event). The Company shall have a reasonable period of time (not less than 30 days after receipt of Employee’s written notice that Employee is resigning for Good Reason) to take action to correct, rescind or substantially reverse the occurrence supporting termination for Good Reason as identified by Employee. Failure by the Company to act or respond to the written notice shall not be deemed to be an admission that Good Reason exists.

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4.     Severability and Modification of Covenants . Employee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
5.     Reasonable and Necessary Agreement . The Employee acknowledges and agrees that: (i) this Agreement is necessary for the protection of the legitimate business interests of the Company; (ii) the restrictions contained in this Agreement are reasonable; (iii) the Employee has no intention of competing with the Company within the limitations set forth above; (iv) the Employee acknowledges and warrants that Employee believes that Employee will be fully able to earn an adequate livelihood for Employee and Employee’s dependents if the covenant not to compete contained in this Agreement is enforced against the Employee; and (v) the Employee has received adequate and valuable consideration for entering into this Agreement.
6.     Injunctive Relief and Attorneys’ Fees . The Employee stipulates and agrees that any breach of the Restrictive Covenants by the Employee will result in immediate and irreparable harm to the Company, the amount of which will be extremely difficult to ascertain, and that the Company could not be reasonably or adequately compensated by damages in an action at law. For these reasons, the Company shall have the right, without the need to post bond or prove actual damages, to obtain such preliminary, temporary or permanent injunctions, orders or decrees as may be necessary to protect the Company against, or on account of, any breach by the Employee of the Restrictive Covenants. In the event the Company obtains any such injunction, order, decree or other relief, in law or in equity, the duration of any violation of Section 1 shall be added to the applicable restricted period specified in Section 1. Employee understands and agrees that, if the parties become involved in a lawsuit regarding the enforcement of the Restrictive Covenants and if the Company prevails in such legal action, the Company will be entitled, in addition to any other remedy, to recover from Employee its reasonable costs and attorneys’ fees incurred in enforcing such covenants. The Company’s ability to enforce its rights under the Restrictive Covenants or applicable law against Employee shall not be impaired in any way by the existence of a claim or cause of action on the part of Employee based on, or arising out of, this Agreement or any other event or transaction arising out of the employment relationship.
7.     Binding Agreement . This Agreement (including the Restrictive Covenants) shall be binding upon and inure to the benefit of the successors and assigns of the Company.

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8.     Employment at Will . Employee shall be employed at‑will and for no definite term. This means that either party may terminate the employment relationship at any time for any or no reason.
9.    Intentionally Omitted.
10.     Applicable Law; Exclusive Forum Selection; Consent to Jurisdiction . The Company and Employee agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles. Except to the extent that a dispute is required to be submitted to arbitration as set forth in Section 11 below, Employee agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out of this Agreement, shall be the state courts of Allegheny County, Pennsylvania or the United States District Court for the Western District of Pennsylvania, Pittsburgh Division. With respect to any such court action, Employee hereby (a) irrevocably submits to the personal jurisdiction of such courts; (b) consents to service of process; (c) consents to venue; and (d) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, service of process, or venue. Both parties hereto further agree that such courts are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.
11.     Agreement to Arbitrate . Employee and the Company agree that any controversy, claim, or dispute between Employee and the Company arising out of or relating to this Agreement or the breach thereof, or arising out of any matter relating to the Employee’s employment with the Company or the termination thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitration shall be governed by the Federal Arbitration Act, shall be held in Pittsburgh, Pennsylvania, and shall be conducted before a panel of three (3) arbitrators (the “Arbitration Panel”). The Company and Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”), and the AAA shall select a third arbitrator from the Commercial Panel. The Arbitration Panel shall render a reasoned opinion in writing in support of its decision. Any award rendered by the Arbitration Panel shall be final, binding, and confidential as between the parties. Notwithstanding this agreement to arbitrate, in the event that Employee breaches or threatens to breach any of Employee’s obligations under the Restrictive Covenants, the Company shall have the right to file an action in one of the courts specified in Section 10 above seeking temporary, preliminary or permanent injunctive relief to enforce Employee’s obligations under the Restrictive Covenants.
12.     Notification of Subsequent Employment .    Employee shall upon termination of his/her employment with the Company, as soon as practicable and for the length of the non-competition period described in Section 1 above, notify the Company: (i) of the name, address and nature of the business of his/her new employer; (ii) if self-employed, of the name, address and nature of his/her new business; (iii) that he/she has not yet secured new employment; and (iv) each time his/her employment status changes. In addition, Employee shall notify any prospective employer that this Agreement exists and shall provide a copy of this Agreement to

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the prospective employer prior to beginning employment with that prospective employer. Any notice provided under this Section 12 (or otherwise under this Agreement) shall be in writing directed to the General Counsel, EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222-3111.
13.     Mandatory Reduction of Payments in Certain Events .
(a)    Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then, prior to the making of any Payments to the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the change in control transaction, as determined by the Determination Firm (as defined in Section 13(b) below). For purposes of this Section 13, present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 13, the “Parachute Value” of a Payment means the present value as of the date of the change in control transaction of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(b)    All determinations required to be made under this Section 13, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not receive pursuant to Section 13(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee but no later than March 15 of the year

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after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)    In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 13 shall be of no further force or effect.
14.     Internal Revenue Code Section 409A .
(a)     General . This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company, nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Employee as a result of the application of Section 409A of the Code.
(b)     Separation from Service . For purposes of the Agreement, the term “termination,” when used in the context of a condition to, or the timing of, a payment hereunder, shall be interpreted to mean a “separation from service” as such term is used in Section 409A of the Code.
(c)     Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable under this Agreement by reason of Employee’s separation from service during a period in which Employee is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):
(i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Employee’s separation from service (or, if Employee dies during such period, within thirty (30) days after Employee’s death) (in either case, the “Required Delay Period”); and
(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.
(d)     Timing of Release of Claims . Whenever in this Agreement a payment or benefit is conditioned on Employee’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within sixty (60) days after the date of

9


termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year. In other words, Employee is not permitted to influence the calendar year of payment based on the timing of his/her signing of the release.
15.     Entire Agreement . This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements (including the Original Agreement and the Change of Control Agreement) and understandings, oral or written. This Agreement may not be changed, amended, or modified, except by a written instrument signed by the parties; provided, however, that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.

(Signatures on following page)

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Employee has hereunto set his/her hand, all as of the day and year first above written.

EQT CORPORATION                EMPLOYEE

By: /s/ Charlene Petrelli                  /s/ M. Elise Hyland            
M. Elise Hyland
Name: Charlene Petrelli

Title: Vice President &
Chief Human Resources Officer






























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Exhibit 10.3

TRANSITION AGREEMENT AND GENERAL RELEASE

This is a Transition Agreement and General Release ("Agreement” or "Employment Agreement") entered into between EQT Corporation (including its subsidiary companies) ("EQT” or the "Company") and M. Elise Hyland ("Employee").

WHEREAS, Employee informed EQT of her intention to resign from EQT in 2017; and
WHEREAS, EQT has asked Employee to remain employed as a full time employee to oversee the EQT Midstream business unit and Employee, in exchange for the benefits set forth in this Agreement, has agreed to remain employed with EQT and that she will resign from full time employment with EQT on March 30, 2018 or such earlier date as may be selected by EQT in its sole discretion (any such resignation being a “Qualifying Resignation”); and
WHEREAS, subject to Employee’s execution of this Agreement and the terms of Section 9 of the Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement dated July 29, 2015 (“Non-Compete Agreement”) (as amended by Paragraph 3 below) and the Executive Alternative Work Arrangement Employment Agreement ("EAWA Employment Agreement") (referenced in Paragraph 3 below), she will become an Executive Alternative Work Arrangement employee of EQT pursuant to Section 9 of the Non-Compete Agreement (as amended hereby) and the EAWA Employment Agreement following her Qualifying Resignation;
NOW, THEREFORE, in consideration of the respective representations, acknowledgements, covenants and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:

1.     Upon Employee’s execution of this Agreement or shortly thereafter, Employee will: (i) be promoted to Senior Vice President of EQT Corporation and President of Midstream and Senior Vice President & Chief Operating Officer of EQT Midstream Services, LLC, in each case, subject to the approval of the applicable board of directors; (ii) receive a base salary increase; (iii) receive a grant of stock options, restricted stock, and 2017 Incentive Performance Share Units; (iv) be made an executive officer of EQT Corporation and of EQT Midstream Services, LLC, in each case, subject to the approval of the applicable board of directors; and (v) be appointed to the Board of Directors of EQM Midstream Services, LLC.

2.    Effective 11:59 p.m. on her Qualifying Resignation or her earlier cessation of employment with EQT, Employee will, and does hereby, resign: (i) her Senior Vice President and President of Midstream positions with EQT Corporation; (ii) her Senior Vice President and Chief Operating Officer positions with EQT Midstream Services, LLC; and (iii) as a director of EQT Midstream Services, LLC.

3.     In exchange for Employee's execution of this Agreement, EQT and Employee hereby agree to amend the Non-Compete Agreement attached as Exhibit C hereto as follows:

a.     Replace Paragraph 2 of the Non-Compete Agreement with the following:

Confidentiality of Information and Nondisclosure . Employee acknowledges and agrees that his/her employment by the Company necessarily involves his/her knowledge of and access to confidential and proprietary information pertaining to

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the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, he/she will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself/herself, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Agreement prohibits Employee from: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures (including of confidential information) that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (ii) disclosing trade secrets when the disclosure is solely for the purpose of: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (b) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (c) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. Any disclosures of trade secrets must be consistent with 18 U.S.C. §1833.

b.    Replace Paragraph 9 of the Non-Compete Agreement with the following:

Executive Alternative Work Arrangement Employment Status . Employee has elected to participate in the “Executive Alternative Work Arrangement” program upon Employee’s voluntary discontinuance of full-time status. The Executive Alternative Work Arrangement classification will be automatically assigned to Employee if and when Employee incurs a termination of employment that meets each of the following conditions (an “Eligible Termination”): (a) Employee’s employment is terminated by the Company for any reason other than Cause or Employee gives the Company at least 90 days’ advance written notice (delivered to the Vice President and Chief Human Resources Officer) of Employee’s intention to discontinue employment, and (b) Employee’s employment shall not have been terminated by Employee for Good Reason. The terms and conditions of Employee’s Executive Alternative Work Arrangement are set forth in the form of Executive Alternative Work Arrangement Employment Agreement attached as Exhibit A. Employee agrees to execute an Executive Alternative Work Arrangement Employment Agreement, in a form substantially similar to the one attached as Exhibit A, within 90 days prior to Employee’s relinquishment of full-time status, which agreement will become effective automatically on the day following Employee’s Eligible Termination. Without limiting the foregoing, Employee agrees that he/she will not be eligible for the Executive Alternative

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Work Arrangement, including the post-employment benefits described therein if Employee’s termination of employment is not an Eligible Termination.
4.     Effective March 1, 2017, Employee’s annual base salary will be increased to
$450,000.00. From March 1, 2017 through the date of her Qualifying Resignation or her earlier cessation of employment with EQT, EQT shall pay Employee at the annual base salary rate of $450,000.00, to be paid in bi-weekly payments in accordance with EQT's current payroll practices, and Employee shall continue as a participant in EQT's health, welfare and retirement (including any Company contributions under the Payroll Deduction and Contribution Plan) benefits programs based upon her current elections and at the current employee co-payments.

5.    Subject to approval by the Management Development & Compensation Committee, the Employee will be designated as a participant under, and will remain eligible for a bonus payment for the 2017 plan year of, the 2016 EQT Corporation Executive Short-Term Incentive Plan (“ESTIP”), provided, however, that Employee remains employed with EQT through the ESTIP payment date (expected to be February 2018) and that her entitlement to receive any bonus is subject to the terms and conditions contained in the ESTIP.

6.    Employee will execute the EAWA Employment Agreement attached hereto as Exhibit B on the date of her Qualifying Resignation, and provided she remains eligible pursuant to the terms of Section 9 of the Non-Compete Agreement as amended by Paragraph 3 above and the EAWA Employment Agreement (attached hereto as Exhibit B ), she will become an EAWA employee of EQT pursuant to the terms of the EAWA Employment Agreement as of the date following her Qualifying Resignation. Upon Employee’s execution of this Agreement, Employee will be deemed, for the purposes of any Qualifying Resignation, to have satisfied her 90-day advance written notice of her intention to discontinue full time employment as required under Paragraph 9 of the Non-Compete Agreement as amended by Paragraph 3 above.

7.     Employee's participation in, and potential financial rewards under, the long-term incentive programs described below shall continue from and after the date hereof consistent, in each case, with the terms of the applicable program, as the same may be amended from time to time for all participants of such program.  Subparagraphs  a through h describe the treatment of Employee's awards under such programs based upon the conditions described therein as supplemented, if at all, by amendments adopted after the date hereof applicable to recipients of such awards generally. In the event of a conflict between this Paragraph 7 and the applicable program documents, the applicable program documents shall prevail.

a.   2015 Executive Performance Incentive Plan (the "2015 EPIP") .
Provided Employee remains employed as a full time employee with EQT through the payment date (expected to be on or before until March 15, 2018), Employee shall be deemed to have fully satisfied the employment condition with respect to 100% of her Share Units, plus any additional Share Units accumulated pursuant to Section 14 of the 2015 EPIP (collectively, the "2015 Retained Units").  The Awarded Value, if any, for the 2015 Retained Units shall be determined based on achievement of the performance criteria set forth in the 2015 EPIP, and shall be paid to Employee at the same time as payment is made to all active participants in the 2015 EPIP, but not later than March 15, 2018.


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b.   2016 Incentive Performance Share Unit Program. Upon Employee’s
Qualifying Resignation or other cessation of employment with EQT on or before March 30, 2018, all Performance Share Units granted to her will be forfeited.

c.    2017 Incentive Performance Share Unit Program . Upon Employee’s Qualifying Resignation or other cessation of employment with EQT on or before March 30, 2018, all Performance Share Units granted to her will be forfeited.

d.   2016 Value Driver Performance Awards (the “2016 VDA”). Provided Employee remains employed as a full time employee with EQT through the payment date (expected to be on or before February 28, 2018), she will have fully satisfied the Earning and Vesting of Performance Awards provisions with respect to the then outstanding and unvested Confirmed Performance Award (plus dividend equivalents accrued) as described in the 2016 VDA.

e.
2017 Value Driver Performance Awards (the “2017 VDA”). Provided Employee remains employed as a full time employee with EQT through the initial payment date (expected to be on or before February 28, 2018), she will have fully vested 50% of the Confirmed Performance Awards which are approved by the Management Development and Compensation Committee of the EQT Corporation Board of Directors. Upon Employee’s Qualifying Resignation or other cessation of full time employment with EQT on or before March 30, 2018, any then unpaid Confirmed Performance Awards will be forfeited.

f. 2017 Restricted Stock Grant. Upon Employee’s Qualifying Resignation or other cessation of full time employment with EQT on or before March 30, 2018, all Restricted Stock Units granted to her will be forfeited.
  
g.
2017 Stock Options. Upon Employee’s Qualifying Resignation or other cessation of full time employment with EQT on or before March 30, 2018, all Stock Options granted to her will be forfeited.

h.
2018 Long-Term Incentive Programs (“LTIP”) Stock Grants/Awards. Employee will not receive any LTIP stock grants, stock awards or stock options for calendar year 2018.

Capitalized terms used in this Paragraph 7 and not otherwise defined in this Agreement are used herein as defined in the applicable program award documentation.  The payments provided under this Paragraph 7 shall be subject to applicable tax and payroll withholdings. Employee's financial rewards under the long-term incentive programs referenced above shall remain subject to the terms and conditions of the applicable award program documentation, as they may be amended from time to time. In the event of Employee's death, employee's financial rewards under the long-term incentive programs referenced above shall payable to Employee's estate.


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8.    Upon Employee’s execution of this Agreement, Paragraph 3 of the Non-Compete Agreement shall become null and void and shall have no further force or effect. In the event that EQT selects a resignation date earlier than March 30, 2018, Employee will receive the following in exchange for her execution and non-revocation of the Supplemental Release attached hereto as Exhibit A:

a.
A lump sum cash payment equal to the base salary payments she would have received under Paragraph 4 above between the date of her resignation and March 30, 2018; and

b.
If EQT selects a resignation date earlier than the 2017 ESTIP payment date described in Paragraph 5 above, a lump cash sum payment equal to her 2017 ESTIP bonus target;

c.
If EQT selects a resignation date earlier than the 2015 EPIP payment date described in Paragraph 7(a) above, a lump sum cash payment equal to the amount she would have received under the 2015 EPIP if she was employed on the 2015 EPIP payment date. This lump sum cash payment shall be paid to Employee at the same time as payment is made to all active participants in the 2015 EPIP; and

d.
If EQT selects a resignation date earlier than the 2016 VDA payment date described in Paragraph 7(d) above, a lump cash sum payment equal to the outstanding and unvested Confirmed Performance Award (plus dividend equivalents accrued) multiplied by the closing price of EQT common stock on the date of Employee’s resignation; and

e.
If EQT selects a resignation date earlier than the 2017 VDA payment date described in Paragraph 7(e) above, a lump cash sum payment equal to 50% of the Target Award multiplied by the closing price of EQT common stock on the date of Employee’s resignation.

Except for the payment described in 8(c) above, payments, if any, made under this Paragraph 8 shall be made within 60-days of Employee’s resignation from full time employment and shall be subject to all applicable tax and payroll withholding. Employee acknowledges and agrees that in the event she voluntarily resigns (i.e., resigns before March 30, 2018 without being requested by EQT to do so) or is terminated by EQT for Cause (as defined below), she will not be entitled to any of the payments described in this Paragraph 8.

Solely for purposes of this Agreement, “Cause” as a reason for the Employee’s termination of employment shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of her duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of a written employment-related agreement between Employee and the Company or express significant policies of the Company.
    
9.    EQT’s obligation to provide the payments set forth in Paragraphs 8 (a through e) above shall be subject to Employee’s execution of the Supplemental Release attached as

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Exhibit A and incorporated into this Agreement. Upon Employee’s discontinuation of full time employment with EQT, she will have 21 days to consider the Supplemental Release and decide whether to sign it. Upon execution, Employee will have seven days in which she can revoke her acceptance of the Supplemental Release. EQT will have no obligation to provide the payments described in Paragraphs 8 (a through e) until the Supplemental Release becomes effective.

10.    Following Employee’s resignation or termination from full time employment, Employee, upon reasonable notice and at reasonable times, agrees to cooperate with the Company in the defense of litigation and in related investigations of any claims or actions now in existence or that may be threatened or brought in the future relating to events or occurrences that transpired while Employee was employed by the Company. Employee will be compensated pursuant to the EAWA Employment Agreement for any time spent providing support or cooperation under this Paragraph 10 while the EAWA Employment Agreement is in effect.

11.     In consideration for EQT's commitments herein, Employee, on behalf of herself, her heirs, representatives, estates, successors and assigns, does hereby irrevocably and unconditionally release and forever discharge EQT, its predecessors, subsidiaries, affiliates, and benefit plans, and their past, present and future officers, directors, trustees, administrators, agents and employees, as well as the heirs, successors and assigns of any such persons or such entities (hereinafter severally and collectively called "Releasees") from any and all suits, actions, causes of action, damages and claims, known and unknown, that Employee has or may have against any of the Releasees for any acts, practices or events up to and including the date she signs this Agreement, except for the performance of the provisions of this Agreement, it being the intention of Employee to effect a general release of all such claims.  This release includes any and all claims under any possible legal, equitable, contract, tort, or statutory theory, including but not limited to any claims under Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Americans With Disabilities Act, the Civil Rights Act of 1991, the Genetic Information Nondiscrimination Act, the Pennsylvania Human Relations Act, the City of Pittsburgh Human Relations Ordinance, all as amended, and other federal, state, and local statutes, ordinances, executive orders, regulations and other laws prohibiting discrimination in employment, the federal Employee Retirement Income Security Act of 1974, as amended, and state, federal or local law claims of any other kind whatsoever (including common law tort and contract claims) arising out of or in any way related to Employee's employment with EQT. Employee also specifically releases all Releasees from any and all claims or causes of action for the fees, costs and expenses of any and all attorneys who have at any time or are now representing her in connection with this Agreement or in connection with any matter released in this Agreement.

The release in the preceding paragraph is intended to be a general release, excluding only claims which Employee is legally barred from releasing.  Employee understands that the release does not include: any claims that cannot be released or waived as a matter of law; any claim for or right to vested benefits under the Company's plans; any right to enforce this Agreement; and any claims based on acts or events occurring after Employee signs this Agreement.  Nothing in this Agreement prevents a challenge to the validity of the Agreement or prohibits the filing of a charge or complaint with, or testimony, assistance or participation in, any investigation, proceeding or hearing conducted by any federal, state or local governmental agency, including but not limited to the Equal Employment Opportunity Commission.


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Nothing in this Agreement or the Non-Compete Agreement (as amended by Paragraph 3 above) prohibits Employee from: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (ii) disclosing confidential information and/or trade secrets when this disclosure is solely for the purpose of: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (b) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (c) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. Any disclosures of trade secrets must be consistent with 18 U.S.C. §1833.

12.     Employee warrants that she has no actions now pending against Releasees in any court of the United States or any State thereof based upon any acts or events arising out of or related to her employment with EQT.  Notwithstanding any other language in this Agreement, the parties understand that this agreement does not prohibit Employee from filing an administrative charge of alleged employment discrimination under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act or the Equal Pay Act.  Employee, however, waives her right to monetary or other recovery should any federal, state or local administrative agency pursue any claims on her behalf arising out of or relating to her employment with any of the Releasees.  This means that by signing this Agreement, Employee will have waived any right she had to obtain a recovery if an administrative agency pursues a claim on her behalf against any of the Releasees based on any actions taken by any of the Releasees up to the date of the signing of this Agreement and the Supplemental Release, and that Employee will have released the Releasees of any and all claims of any nature arising up to the dates of the signing of this Agreement and the Supplemental Release. However, nothing in this Agreement prevents Employee from making any reports to or receiving any awards from the SEC or OSHA based upon the Employee’s reporting violations of laws or regulations containing whistleblower provisions.    

13.     Employee agrees that (unless otherwise required by law or legal process or as permitted by Paragraphs 11 and 12 of this Agreement) she will not, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way any remark, comment, message, information, declaration, communication or other statement of any kind, whether oral or in writing, whether in tangible format, electronic format, or otherwise, that might reasonably be construed to be derogatory, critical, negative or disparaging about EQT (including its business operations and practices), its past or present officers, administrators, managers, directors, trustees or employees and/or detrimental towards EQT’s business reputation or goodwill. Employee likewise shall not cause, assist, solicit or encourage anyone else to engage in any of the foregoing behavior.

14.     By entering into this Agreement, EQT in no way admits that it or any of the Releasees has treated Employee unlawfully or wrongfully in any way.  Neither this Agreement nor the implementation thereof shall be construed to be, or shall be admissible in any proceedings as, evidence of any admission by EQT or any of the Releasees of any violation of or failure to comply with any federal, state, or local law, ordinance, agreement, rule, regulation or order.

15.     Employee expressly warrants that she was advised to consult with an attorney prior to executing this Agreement.  She acknowledges that she has been afforded the

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opportunity to consider this Agreement for a reasonable period of time, that she has carefully read this Agreement, that she understands completely its contents and that she has executed the same of her own free will, act and deed.

16.     The provisions of this Agreement are severable.  To the extent that any provision of this Agreement is deemed unenforceable in any court of law, the parties intend that such provision be construed by such court in a manner to make it enforceable.

17.     This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.

18.     This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

19.     Except (i) as provided in the second sentence of this paragraph; (ii) for the Amended and Restated Indemnification Agreement made as of December 3, 2008 between EQT and the Employee; (iii) any indemnification agreement entered into among EQM Midstream Services, LLC, EQT Midstream Partners, LP and the Employee; and (iv) as otherwise expressly set forth in this Agreement, this Agreement, including the Exhibits attached hereto, contains the entire agreement between the parties and it supersedes all prior agreements and understandings (including Paragraph 3 of the Non-Compete Agreement) between EQT and Employee (oral or written).  Notwithstanding the foregoing, Employee's covenants and obligations set forth in the Non-Compete Agreement (as amended by Paragraph 3 above), in each case to the extent not inconsistent with this Agreement, remain in full force and effect.

20.     This Agreement may not be changed, amended, or modified except by a written instrument signed by both parties.

21.      EMPLOYEE ACKNOWLEDGES THAT SHE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT SHE IS VOLUNTARILY EXECUTING AND ENTERING INTO THIS AGREEMENT, WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND INTENDING TO BE LEGALLY BOUND BY IT .

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.

EQT CORPORATION
By:    /s/ Charlene Petrelli                                   
Charlene Petrelli
Vice President and
Chief Human Resources Officer


    2/28/2017
Date
 

   /s/ M. Elise Hyland
                    M. Elise Hyland


 

   2/24/2017
Date

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EXHIBIT A

SUPPLEMENTAL RELEASE

I, M. ELISE HYLAND, on behalf of myself, my heirs, representatives, estate, successors and assigns, do hereby irrevocably and unconditionally release and forever discharge EQT Corporation, its predecessors, subsidiaries, affiliates, and benefits plans, and their past, present and future officers, directors, trustees, administrators, agents and employees, as well as the heirs, successors and assigns of any of such persons or such entities (hereinafter severally and collectively called “Releasees”) from any and all claims, known and unknown, that I have or may have against any of the Releasees for any acts, practices or events occurring during the period from the date I signed the Transition Agreement and General Release (copy attached) up to and including the date I sign this Supplemental Release. This Supplemental Release includes any and all claims under any possible legal, equitable, contract, tort, or statutory theory, including but not limited to any claims under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Act of 1991, the Genetic Information Nondiscrimination Act, the Americans With Disabilities Act, the Family Medical Leave Act, the Pennsylvania Human Relations Act, the City of Pittsburgh Human Relations Ordinance, and other federal, state and local statutes, ordinances, executive orders, regulations and other laws prohibiting discrimination in employment, the federal Employee Retirement Income Security Act of 1974, and state, federal or local law claims of any other kind whatsoever, including common law tort and contract claims and any claims for the fees, costs and expenses of any and all attorneys who have at any time or are now representing me in connection with this Supplemental Release or in connection with any matter released in this Supplemental Release. It is understood, however, that this release does not include claims regarding performance under the aforementioned Transition Agreement and General Release or claims which are not subject to waiver as a matter of law. Nothing herein or in the Transition Agreement and General Release shall (a) limit or otherwise affect Employee’s ability to exercise her rights under the Amended and Restated Indemnification Agreement made as of December 3, 2008 between EQT and the Employee or any indemnification agreement entered into among EQM Midstream Services, LLC, EQT Midstream Partners, LP and the Employee, or (b) amend or otherwise modify Employee’s ability to make a claim under the insurance policies maintained by EQT or its affiliates for the benefit of directors and officers of EQT and its affiliates.


I understand that nothing in the Transition Agreement and General Release, this Supplemental Release or the Non-Compete Agreement prohibits me from: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (ii) disclosing confidential information and/or trade secrets when this disclosure is solely for the purpose of: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (b) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (c) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. I understand that any disclosure of trade secrets must be consistent with 18 U.S.C. §1833.

I further understand and agree that the payments and benefits described in the Transition Agreement and General Release (with the exception of my compensation for actual time worked

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and compensation for any unused vacation at the time of my termination) encompass all compensation due and owing to me in connection with my employment with EQT and my discontinuation of employment with EQT, and that EQT will not be required to make any further payments to me whatsoever of any kind, including (but not limited to) any salary, bonus or severance payments, sick leave benefits, etc.

I acknowledge that I have been provided 21 days to consider this Supplemental Release, and advised to consult with an attorney about it.

I understand that for a period of seven days following my signing this Supplemental Release, I may revoke it by delivery of a written notice revoking same to the office of Charlene Petrelli, EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA, 15222.


______________________________________
M. Elise Hyland


______________________________________
Date

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EXHIBIT B

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT EMPLOYMENT AGREEMENT

This is an Executive Alternative Work Arrangement Employment Agreement (“Agreement”) entered into between EQT Corporation (together with its subsidiaries, “EQT” or the “Company”) and M. Elise Hyland (“Employee”).
WHEREAS , Employee is an employee of EQT who desires to discontinue full-time employment with EQT but continue employment with EQT on a part-time basis; and
WHEREAS , EQT is interested in continuing to retain the services of Employee on a part-time basis for at least 100 (but no more than 400) hours per year; and
WHEREAS, Employee has elected to modify his/her employment status to Executive Alternative Work Arrangement;
NOW, THEREFORE, in consideration of the respective representations, acknowledgements, and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:
1. The term of this Agreement is for the one-year period commencing on the day after Employee’s full-time status with EQT ceases. During that period, Employee will hold the position of an Executive Alternative Work Arrangement employee of EQT. Employee’s status as Executive Alternative Work Arrangement (and this one-year Agreement) will automatically renew annually unless either party terminates this Agreement by written notice to the other not less than 30 days prior to the renewal date. The automatic annual renewals of this Agreement will cease, however, at the end of five years of Executive Alternative Work Arrangement employment status.
2. During each one‑year period in Executive Alternative Work Arrangement employment status, Employee is required to provide no less than 100 hours of service to EQT. During each one-year period, Employee will also make himself/herself available for up to 300 additional hours of service upon request from the Company. All such hours of service will occur during the Company’s regularly scheduled business hours (unless otherwise agreed by the parties), and no more than fifty (50) hours will be scheduled per month (unless otherwise agreed by the parties).
3. Employee shall be paid an hourly rate for Employee’s actual services provided under this Agreement. The hourly rate shall be Employee’s annual base salary in effect immediately prior to Employee’s change in employee classification to Executive Alternative Work Arrangement employment status divided by 2080. Employee shall submit monthly time sheets in a form agreed upon by the parties, and Employee will be paid on regularly scheduled payroll dates in accordance with the Company’s standard payroll practices following submission of his/her time sheets. Notwithstanding the foregoing, in the event that during any one-year period in Executive Alternative Work Arrangement employment status, EQT requests Employee to provide less than 100 hours of service, EQT shall pay Employee for a minimum of 100 hours of service (regardless of the actual number of hours of service), with any remaining amount owed payable on the next regularly scheduled payroll date following the end of the applicable


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one-year period. If either party terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof, no additional compensation will be paid to Employee pursuant to this Section 3.
4. Employee shall be eligible to continue to participate in the group medical (including prescription drug), dental and vision programs in which Employee participated immediately before the classification change to Executive Alternative Work Arrangement (as such plans might be modified by the Company from time-to-time), but Employee will be required to pay 100% of the Company’s premium (or premium equivalent) rates to the carriers (the full active employee premium rates – both the employee portion and the employer portion - as adjusted year-to-year) for participation in such group insurance programs. If Employee completes five years of Executive Alternative Work Arrangement employment status or if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, Employee will be allowed to participate in such group insurance programs at 102% of the then-applicable full active employee premium rates (both the employee portion and the employer portion) until the earlier of: (i) Employee becomes eligible to receive Medicare benefits and (ii) Employee reaches age 70, even though Employee is no longer employed by EQT. Employee acknowledges that, to the extent, if at all, the Company’s cost to include Employee in the group insurance programs pursuant to this paragraph exceeds the cost paid by the Employee, the benefits provided hereunder may result in taxable income to the Employee. All amounts required to be paid by Employee pursuant to this paragraph shall be due not later than 30 days after written notice thereof is sent by the Company. Company may terminate the benefits provided under this Agreement upon 30 days written notice of any failure by Employee to timely perform his/her payment obligation hereunder, unless such failure is earlier cured.
5. During the term of this Agreement, Employee will continue to receive service credit for purposes of calculating the value of the Medical Spending Account.
6. Employee shall not be eligible to participate in the Company’s life insurance and disability insurance programs, 401(k) Plan, ESPP, or any other retirement or welfare benefit programs or perquisites of the Company. Likewise, Employee shall not receive any paid vacation, paid holidays or car allowance.
7. Employee is not eligible to receive bonus payments under any short-term incentive plans of EQT, and is not eligible to receive any new grants under EQT’s long-term incentive plans, programs or arrangements.
8. Effective not later than the commencement of this Executive Alternative Work Arrangement, Employee shall be deemed to have retired for purposes of measuring vesting and/or post‑termination exercise periods of all forms of long term incentive awards. The timing of any payments for such awards will be as provided in the underlying plans, programs or arrangements and is subject to any required six-month delay in payment if Employee is a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of Employee’s separation from service, with respect to payments made by reason of Employee’s separation from service. Nothing in this paragraph 8, or in paragraph 7, shall prevent (a) the continued vesting of previously granted long-term incentive awards to the extent the award agreement therefore expressly contemplates continued vesting while the recipient serves as a member of the Board of Directors of the Company or an affiliate or (b) grants of non-employee director awards to an individual solely because such individual serves on the Board of Directors of the Company or an affiliate. Notwithstanding anything contained

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herein to the contrary, any special vesting and/or payment provisions applicable to Employee’s long-term incentive awards pursuant to that certain Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement between EQT and Employee dated July 29, 2015 (as amended from time to time, the “Non-Competition Agreement”) shall apply and be given effect.
9. The Company shall either pay on behalf of Employee or reimburse Employee for the cost of (i) monthly dues for one country club and one dining club (such clubs to be approved by the Company’s Chief Executive Officer), and (ii) executive level physicals (currently “gold” level) and related health and wellness services for Employee and Employee’s spouse (up to a maximum annual benefit of $15,000), in each case during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof in accordance with and on the dates specified in the Company’s policies; provided, however, that no such payments or reimbursements shall be made until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of the Code; provided, further, that to the extent reimbursed or paid, all reimbursements and payments with respect to expenses incurred within a particular year shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense was incurred. The amount of payments or reimbursable expenses incurred in one taxable year of Employee shall not affect the amount of reimbursable expenses in a different taxable year, and such payments or reimbursement shall not be subject to liquidation or exchange for another benefit.
10. Employee shall continue to have mobile telephone service and reasonable access to the Company’s Help Desk during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof; provided, however, if the provision of such service will result in taxable income to Employee, then no such taxable service shall be provided until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of the Code.
11. Employee shall receive tax, estate and financial planning services from providers approved in advance by the Company during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof, in amount not to exceed $15,000 per calendar year, to be paid directly by the Company in accordance with and on the dates specified in the Company’s policies; provided, however, that no such payments or reimbursements shall be made until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of Code; provided, further, that to the extent reimbursed or paid, all reimbursements and payments with respect to expenses incurred within a particular year shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense was incurred. The amount of payments or reimbursable expenses incurred in one taxable year of Employee shall not affect the amount of payments or reimbursable expenses in a different taxable year, and such payments or reimbursement shall not be subject to liquidation or exchange for another benefit.
12. During the term of this Agreement, Employee shall maintain an ownership level of Company stock equal to not less than one-half of the value last required as a full-time

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Employee. In the event that at any time during the term of this Agreement Employee does not maintain the required ownership level, Employee shall promptly notify the Company and increase his or her ownership to at least the required level. Any failure of Employee to maintain at least the required ownership level for more than three months during the term of this Agreement shall constitute and be deemed to be an immediate termination by Employee of his or her Executive Alternative Work Arrangement.
13. This Agreement sets forth all of the payments, benefits, perquisites and entitlements to which Employee shall be entitled upon assuming Executive Alternative Work Arrangement employment status. Employee shall not be entitled to receive any gross-up payments for any taxes or other amounts with respect to amounts payable under this Agreement.
14. Nothing in this Agreement shall prevent or prohibit the Company from modifying any of its employee benefits plans, programs, or policies.
15. Non-Competition and Non-Solicitation . The covenants as to non-competition and non-solicitation contained in Section 1, and as to notification of subsequent employment in Section 12, in each case of the Non-Competition Agreement shall remain in effect throughout Employee’s employment with EQT in Executive Alternative Work Arrangement employment status and for a period of twenty-four (24) months, in the case of non-competition covenants; twenty-four (24), in the case of non-solicitation covenants relating to customers and prospective customers; and thirty-six (36) months, in the case of non-solicitation covenants relating to employees, consultants, vendors or independent contractors, in each case after the termination of Employee’s employment as an Executive Alternative Work Arrangement employee. It is understood and agreed that if Employee’s employment as an Executive Alternative Work Arrangement employee terminates for any reason in the midst of any one-year term period as provided under this Agreement (including, without limitation, a termination pursuant to Sections 4, 12 or 17 of this Agreement), the covenants as to non-competition and non-solicitation contained in the Non-Competition Agreement shall remain in effect throughout the remainder of that one-year term and for a period of twenty-four (24) months, in the case of non-competition covenants, and thirty-six (36) months, in the case of non-solicitation covenants, months thereafter.
16. Confidential Information and Non-Disclosure . Employee acknowledges and agrees that Employee’s employment by the Company necessarily involves Employee’s knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, Employee will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of Employee, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Section 16 prohibits Employee from reporting possible violations of

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federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation.
17. EQT may terminate this Agreement and Employee’s employment at any time for Cause. Solely for purposes of this Agreement, “Cause” shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of his/her duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of this Agreement or express significant policies of the Company. If the Company terminates Employee’s employment for Cause, the Company shall give Employee written notice setting forth the reason for his/her termination not later than 30 days after such termination.
18. Except as otherwise provided herein, in the event of any controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter relating to the Employee's employment with EQT or the termination of such employment, EQT may seek recourse for injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is sought, EQT and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration conducted in Pittsburgh, Pennsylvania in accordance with this Section 18 of this Agreement and the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards, if any, rendered by a panel of three (3) arbitrators (the “Arbitration Panel”). EQT and the Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. Any award rendered by the Arbitration Panel shall be final, binding and confidential as between the parties hereto and their heirs, executors, administrators, successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.
19. EQT shall have the authority and the right to deduct or withhold, or require Employee to remit to EQT, an amount sufficient to satisfy federal, state, and local taxes (including Employee’s FICA obligation) required by law to be withheld with respect to any payment or benefit provided pursuant to this Agreement. The obligations of EQT under this Agreement will be conditioned on such payment or arrangements and EQT will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Employee.
20. It is understood and agreed that upon Employee’s execution of the Transition Agreement and General Release, Employee had no continuing rights under Section 3 of the Non-Competition Agreement and such section became null and void having no further force or effect.
21. The provisions of this Agreement are severable. To the extent that any provision of this Agreement is deemed unenforceable in any court of law, the parties intend that such provision be construed by such court in a manner to make it enforceable.
22. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.
23. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

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24. This Agreement supersedes all prior agreements and understandings between EQT and Employee with respect to the subject matter hereof (oral or written). It is understood and agreed, however, that the Amended and Restated Indemnification Agreement made as of December 3, 2008 between EQT and the Employee, any indemnification agreement entered into among EQM Midstream Services, LLC, EQT Midstream Partners, LP and the Employee, the Transition Agreement and General Release, the Supplemental Release and the covenants as to non-competition, non-solicitation, confidentiality and nondisclosure contained in Sections 1 and 2 of the Non-Competition Agreement remain in effect as modified herein, along with the provisions in Sections 4, 5, 6, 7, 8, 11 and 12 of the Non-Competition Agreement.
25. This Agreement may not be changed, amended, or modified except by a written instrument signed by both parties, provided that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.

EQT CORPORATION
By: _______________________________
   __________________________________
Title
   __________________________________
                                 Date
 

   EMPLOYEE
   __________________________________
   Name: M. Elise Hyland
   __________________________________
                                 Date


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EXHIBIT C



-17 -

AMENDED AND RESTATED
CONFIDENTIALITY, NON‑SOLICITATION and
NON‑COMPETITION AGREEMENT
This AMENDED AND RESTATED CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT (this “Agreement”) is entered into and effective as of July 29, 2015, by and between EQT Corporation, a Pennsylvania corporation (EQT Corporation and its subsidiary companies are hereinafter collectively referred to as the “Company”), and M. Elise Hyland (the “Employee”). This Agreement amends and restates in its entirety that certain Confidentiality, Non-Solicitation and Non-Competition Agreement by and between the Company and the Employee originally dated as of September 8, 2008, as amended effective January 1, 2014 and January 1, 2015 (the “Original Agreement”).
WITNESSETH:
WHEREAS, during the course of Employee’s employment with the Company, the Company has imparted and will continue to impart to Employee proprietary and/or confidential information and/or trade secrets of the Company; and
WHEREAS, in order to protect the business and goodwill of the Company, the Company desires to obtain or continue to obtain certain confidentiality, non-competition and non‑solicitation covenants from the Employee; and
WHEREAS, the Employee is willing to agree to these confidentiality, non-competition and non-solicitation covenants by entering into this Agreement, which amends and restates the Original Agreement, in exchange for the Company's agreement to pay the severance benefits described in Section 3 below in the event that Employee's employment with the Company is terminated in certain circumstances; and
WHEREAS, the Company and the Employee are parties to that certain Amended and Restated Change of Control Agreement, originally dated as of September 8, 2008, and previously amended and restated as of February 19, 2013 (the “Change of Control Agreement”);
WHEREAS, the Company and Employee are terminating the Change of Control Agreement by mutual agreement pursuant to the Termination of Amended and Restated Change of Control Agreement (the “Termination Agreement”) being entered into concurrently herewith, and desire and intend that this Agreement shall replace and supersede the Change of Control Agreement in its entirety; and
WHEREAS, the Company and Employee acknowledge and agree that this Agreement shall not be effective unless and until the Termination Agreement shall have been executed and delivered by the Company and the Employee;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:


1.     Restrictions on Competition and Solicitation . While the Employee is employed by the Company and for a period of twenty-four (24) months after the date of Employee's termination of employment with the Company for any reason Employee will not, directly or indirectly, expressly or tacitly, for himself/herself or on behalf of any entity conducting business anywhere in the Restricted Territory (as defined below): (i) act in any capacity for any business in which his/her duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, (ii) recruit investors on behalf of an entity which engages in activities which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, or (iii) become employed by such an entity in any capacity which would require Employee to carry out, in whole or in part, the duties Employee has performed for the Company which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under active investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company. Notwithstanding the foregoing, the Employee may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or businesses under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company only to the extent that Employee acquired or was privy to confidential information regarding such services, products or businesses. Employee acknowledges that this restriction will prevent Employee from acting in any of the foregoing capacities for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the business of the Company.
Restricted Territory shall mean (i) the entire geographic location of any natural gas and oil play in which the Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights and pipeline capacity contracts on non-affiliated or third-party pipelines), including but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities, propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (ii) the entire geographic location of any natural gas and oil play in which the Company owns proved, developed and/or undeveloped natural gas and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iii) the entire geographic location of any natural gas and oil play in which the Company has decided to make or has made an offer to purchase or lease assets for the purpose of conducting any of the business activities described in subparagraphs (i) and (ii) above within the six (6) month period immediately preceding the end of the Employee’s employment with the Company provided that Employee had actual knowledge of the offer or decision to make an offer prior to Employee’s separation from the Company. For geographic locations of natural gas and oil plays, refer to the maps produced by the United States Energy Information Administration located at www.eia.gov/maps.

2

Employee agrees that for a period of twenty-four (24) months following the termination of Employee's employment with the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or indirectly, solicit the business of, or do business with: (i) any customer that Employee approached, solicited or accepted business from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company; and (ii) any prospective customer of the Company who was identified to or by the Employee and/or who Employee was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company, for purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product or service the Company offers within the last two (2) years prior to the end of Employee's employment with the Company, and/or, which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of Employee's employment with the Company to be offered in the future.
While Employee is employed by the Company and for a period of thirty-six (36) months after the date of Employee's termination of employment with the Company for any reason, Employee shall not (directly or indirectly) on his/her own behalf or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or induce, any employee, consultant, vendor or independent contractor to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to violate the terms of their contracts with the Company.
2.     Confidentiality of Information and Nondisclosure . Employee acknowledges and agrees that his/her employment by the Company necessarily involves his/her knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, he/she will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself/herself, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Section 2 prohibits Employee from reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation.
3.     Severance Benefit . If the Employee’s employment is terminated by the Company for any reason other than Cause (as defined below) or if the Employee terminates his/her

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employment for Good Reason (as defined below), the Company shall provide Employee with the following:
(a) A lump sum payment payable within 60 days following Employee’s termination date equal to twenty-four (24) months of Employee’s base salary in effect at the time of such termination, or immediately prior to the event that serves as the basis for termination for Good Reason;
(b) A lump sum payment payable within 60 days following Employee’s termination date equal to two times the average annual incentive (bonus) payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any successor plan) for the three (3) full years prior to Employee’s termination date;
(c) A lump sum payment payable within 60 days following Employee’s termination date equal to the product of (i) twelve (12) and (ii) 100% of the then-current Consolidated Omnibus Budget Reconciliation Act of 1985 monthly rate for family coverage;
(d) A lump sum payment payable within 60 days following Employee’s termination date equal to $200,000;
(e) Subject to Section 14 of this Agreement, all stock options, restricted stock, restricted stock units and other time-vesting equity awards granted to Employee under the 2009 EQT Corporation Long-Term Incentive Plan (as amended, the “2009 LTIP”), the EQT Corporation 2014 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2014 LTIP”), the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2012 LTIP”), the EQT GP Services, LLC 2015 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2015 LTIP”), and any other long-term incentive plan of the Company (the 2009 LTIP, the 2014 LTIP, the 2012 LTIP, the 2015 LTIP and any other long-term incentive plan of the Company are, collectively, the “LTIPs”) shall immediately become vested and exercisable in full and/or all restrictions on such awards shall lapse (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program); and
(f) Subject to Section 14 of this Agreement, all performance-based equity awards granted to Employee by the Company under the LTIPs shall remain outstanding and shall be earned, if at all, based on actual performance through the end of the performance period as if Employee’s employment had not been terminated (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program).
(g) Subject to Section 14 of this Agreement, all “value driver”-type performance-based equity awards (i.e., equity awards that may be earned based the Company’s attainment of one or more threshold performance goals together with the application of a performance multiplier based on individual performance, and become vested based on Employee’s continued employment with the Company through one or more vesting dates) shall be earned based on (i) “target” levels of performance, if Employee’s termination date occurs before the relevant performance level has been approved by the Management Development and Compensation

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Committee of the Board of Directors (the “Committee”), or (ii) actual levels of performance, if Employee’s termination date occurs after the relevant performance level has been approved by the Committee, and in either case, the number of award shares earned shall immediately become vested and payable as of the date of termination (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program).
The payments provided under this Section 3 shall be subject to applicable tax and payroll withholdings, and shall be in addition to any payments and/or benefits to which the Employee would otherwise be entitled under the EQT Corporation Severance Pay Plan (as amended from time to time). The Company’s obligation to provide the payments and benefits under this Section 3 shall be contingent upon the following:
(a) Employee’s execution of a release of claims in a form acceptable to the Company; and
(b) Employee’s compliance with his/her obligations hereunder, including, but not limited to, Employee’s obligations set forth in Sections 1 and 2 (the “Restrictive Covenants”).
Solely for purposes of this Agreement, “Cause” as a reason for the Employee’s termination of employment shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of his/her duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of a written employment-related agreement between Employee and the Company or express significant policies of the Company. If the Company terminates Employee’s employment for Cause, the Company shall give Employee written notice setting forth the reason for his/her termination not later than 30 days after such termination.
Solely for purposes of this Agreement, “Good Reason” shall mean Employee’s resignation within 90 days after: (i) a reduction in Employee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Employee’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 Employee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Employee’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. A termination by Employee shall not constitute termination for Good Reason unless Employee first delivers to the General Counsel of the Company written notice: (i) stating that Employee intends to resign for Good Reason pursuant to this Agreement; and (ii) setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event). The Company shall have a reasonable period of time (not less than 30 days after receipt of Employee’s written notice that Employee is resigning for Good Reason) to take action to correct, rescind or substantially reverse the occurrence supporting termination for Good Reason as identified by Employee. Failure by the Company to act or respond to the written notice shall not be deemed to be an admission that Good Reason exists.

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4.     Severability and Modification of Covenants . Employee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
5.     Reasonable and Necessary Agreement . The Employee acknowledges and agrees that: (i) this Agreement is necessary for the protection of the legitimate business interests of the Company; (ii) the restrictions contained in this Agreement are reasonable; (iii) the Employee has no intention of competing with the Company within the limitations set forth above; (iv) the Employee acknowledges and warrants that Employee believes that Employee will be fully able to earn an adequate livelihood for Employee and Employee’s dependents if the covenant not to compete contained in this Agreement is enforced against the Employee; and (v) the Employee has received adequate and valuable consideration for entering into this Agreement.
6.     Injunctive Relief and Attorneys’ Fees . The Employee stipulates and agrees that any breach of the Restrictive Covenants by the Employee will result in immediate and irreparable harm to the Company, the amount of which will be extremely difficult to ascertain, and that the Company could not be reasonably or adequately compensated by damages in an action at law. For these reasons, the Company shall have the right, without the need to post bond or prove actual damages, to obtain such preliminary, temporary or permanent injunctions, orders or decrees as may be necessary to protect the Company against, or on account of, any breach by the Employee of the Restrictive Covenants. In the event the Company obtains any such injunction, order, decree or other relief, in law or in equity, the duration of any violation of Section 1 shall be added to the applicable restricted period specified in Section 1. Employee understands and agrees that, if the parties become involved in a lawsuit regarding the enforcement of the Restrictive Covenants and if the Company prevails in such legal action, the Company will be entitled, in addition to any other remedy, to recover from Employee its reasonable costs and attorneys’ fees incurred in enforcing such covenants. The Company’s ability to enforce its rights under the Restrictive Covenants or applicable law against Employee shall not be impaired in any way by the existence of a claim or cause of action on the part of Employee based on, or arising out of, this Agreement or any other event or transaction arising out of the employment relationship.
7.     Binding Agreement . This Agreement (including the Restrictive Covenants) shall be binding upon and inure to the benefit of the successors and assigns of the Company.

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8.     Employment at Will . Employee shall be employed at‑will and for no definite term. This means that either party may terminate the employment relationship at any time for any or no reason.
9.    Intentionally Omitted.
10.     Applicable Law; Exclusive Forum Selection; Consent to Jurisdiction . The Company and Employee agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles. Except to the extent that a dispute is required to be submitted to arbitration as set forth in Section 11 below, Employee agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out of this Agreement, shall be the state courts of Allegheny County, Pennsylvania or the United States District Court for the Western District of Pennsylvania, Pittsburgh Division. With respect to any such court action, Employee hereby (a) irrevocably submits to the personal jurisdiction of such courts; (b) consents to service of process; (c) consents to venue; and (d) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, service of process, or venue. Both parties hereto further agree that such courts are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.
11.     Agreement to Arbitrate . Employee and the Company agree that any controversy, claim, or dispute between Employee and the Company arising out of or relating to this Agreement or the breach thereof, or arising out of any matter relating to the Employee’s employment with the Company or the termination thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitration shall be governed by the Federal Arbitration Act, shall be held in Pittsburgh, Pennsylvania, and shall be conducted before a panel of three (3) arbitrators (the “Arbitration Panel”). The Company and Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”), and the AAA shall select a third arbitrator from the Commercial Panel. The Arbitration Panel shall render a reasoned opinion in writing in support of its decision. Any award rendered by the Arbitration Panel shall be final, binding, and confidential as between the parties. Notwithstanding this agreement to arbitrate, in the event that Employee breaches or threatens to breach any of Employee’s obligations under the Restrictive Covenants, the Company shall have the right to file an action in one of the courts specified in Section 10 above seeking temporary, preliminary or permanent injunctive relief to enforce Employee’s obligations under the Restrictive Covenants.
12.     Notification of Subsequent Employment .    Employee shall upon termination of his/her employment with the Company, as soon as practicable and for the length of the non-competition period described in Section 1 above, notify the Company: (i) of the name, address and nature of the business of his/her new employer; (ii) if self-employed, of the name, address and nature of his/her new business; (iii) that he/she has not yet secured new employment; and (iv) each time his/her employment status changes. In addition, Employee shall notify any prospective employer that this Agreement exists and shall provide a copy of this Agreement to

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the prospective employer prior to beginning employment with that prospective employer. Any notice provided under this Section 12 (or otherwise under this Agreement) shall be in writing directed to the General Counsel, EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222-3111.
13.     Mandatory Reduction of Payments in Certain Events .
(a)    Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then, prior to the making of any Payments to the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the change in control transaction, as determined by the Determination Firm (as defined in Section 13(b) below). For purposes of this Section 13, present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 13, the “Parachute Value” of a Payment means the present value as of the date of the change in control transaction of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(b)    All determinations required to be made under this Section 13, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not receive pursuant to Section 13(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee but no later than March 15 of the year

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after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)    In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 13 shall be of no further force or effect.
14.     Internal Revenue Code Section 409A .
(a)     General . This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company, nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Employee as a result of the application of Section 409A of the Code.
(b)     Separation from Service . For purposes of the Agreement, the term “termination,” when used in the context of a condition to, or the timing of, a payment hereunder, shall be interpreted to mean a “separation from service” as such term is used in Section 409A of the Code.
(c)     Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable under this Agreement by reason of Employee’s separation from service during a period in which Employee is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):
(i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Employee’s separation from service (or, if Employee dies during such period, within thirty (30) days after Employee’s death) (in either case, the “Required Delay Period”); and
(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.
(d)     Timing of Release of Claims . Whenever in this Agreement a payment or benefit is conditioned on Employee’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within sixty (60) days after the date of

9

termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year. In other words, Employee is not permitted to influence the calendar year of payment based on the timing of his/her signing of the release.
15.     Entire Agreement . This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements (including the Original Agreement and the Change of Control Agreement) and understandings, oral or written. This Agreement may not be changed, amended, or modified, except by a written instrument signed by the parties; provided, however, that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.

(Signatures on following page)

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Employee has hereunto set his/her hand, all as of the day and year first above written.

EQT CORPORATION                EMPLOYEE

By: /s/ Charlene Petrelli                  /s/ M. Elise Hyland            
M. Elise Hyland
Name: Charlene Petrelli

Title: Vice President &
Chief Human Resources Officer



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Exhibit 31.1
 
CERTIFICATION
 
I, Steven T. Schlotterbeck, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q of EQT Midstream Partners, LP;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a.               Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b.               Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c.              Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d.               Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
a.               All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b.               Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:  April 27, 2017
 
EQT Midstream Partners, LP
 
 
 
/s/ Steven T. Schlotterbeck
 
Steven T. Schlotterbeck

 
President and Chief Executive Officer, EQT Midstream Services, LLC, the registrant’s General Partner





Exhibit 31.2
CERTIFICATION
 
I, Robert J. McNally, certify that:
 
1.               I have reviewed this Quarterly Report on Form 10-Q of EQT Midstream Partners, LP;
 
2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.             Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.               The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a.               Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b.               Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c.                Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d.               Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.               The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
a.               All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b.               Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:  April 27, 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





Exhibit 32
CERTIFICATION
 
In connection with the Quarterly Report of EQT Midstream Partners, LP (“EQM”) on Form 10-Q for the period ended March 31, 2017 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)               The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)               The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EQM.
 
 
 
/s/ Steven T. Schlotterbeck
 
 
April 27, 2017
Steven T. Schlotterbeck
President and Chief Executive Officer, EQT Midstream Services, LLC, EQM’s General Partner
 
 
 
 
 
 
 
 
/s/ Robert J. McNally
 
 
April 27, 2017
Robert J. McNally
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, EQM’s General Partner