[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
(State or other jurisdiction of incorporation or organization)
625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania
(Address of principal executive offices)
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37-1661577
(IRS Employer Identification No.)
15222
(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Units Representing Limited Partner Interests
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New York Stock Exchange
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PART I
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Abbreviations
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ASC
– Accounting Standards Codification
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CERCLA
– Comprehensive Environmental Response, Compensation and Liability Act
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DOT
– U.S. Department of Transportation
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FASB
–
Financial Accounting Standards Board
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FERC
– Federal Energy Regulatory Commission
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GAAP
– U.S. Generally Accepted Accounting Principles
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IPO
– Initial Public Offering
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IRS
– Internal Revenue Service
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NGA
–
Natural Gas Act of 1938
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NGPA
– Natural Gas Policy Act of 1978
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NYMEX
– New York Mercantile Exchange
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NYSE
– New York Stock Exchange
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PHMSA
– Pipeline and Hazardous Materials Safety Administration of the DOT
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RCRA
–
Resource Conservation and Recovery Act
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SEC
– Securities and Exchange Commission
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Measurements
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Btu
= one British thermal unit
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BBtu
= billion British thermal units
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Bcf
= billion cubic feet
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Bcfe
= billion cubic feet of natural gas equivalents, with one barrel of natural gas liquids (NGLs) and crude oil being equivalent to 6,000 cubic feet of natural gas
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Dth
= dekatherm or million British thermal units
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MMBtu
= million British thermal units
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Mcf
= thousand cubic feet
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MMcf
= million cubic feet
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Tcfe
= trillion cubic feet of natural gas equivalents, with one barrel of NGLs and crude oil being equivalent to 6,000 cubic feet of natural gas
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•
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Mountain Valley Pipeline
.
The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of December 31, 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, providing access to the growing Southeast demand markets. As currently designed, the MVP is estimated to cost a total of approximately $3.5 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the joint venture. In 2018, EQM expects to provide capital contributions of $1.0 billion to $1.2 billion to the MVP Joint Venture. 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 October 13, 2017, the FERC issued the Certificate of Public Convenience and Necessity for the project. In early 2018, the MVP Joint Venture received limited notice to proceed with certain construction activities from the FERC. The MVP Joint Venture plans to commence construction in the first quarter of 2018. The pipeline is targeted to be placed in-service during the fourth quarter of 2018.
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•
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Transmission Expansion
.
In 2018, EQM estimates capital expenditures of approximately $100 million for other transmission expansion projects, primarily attributable to the Equitrans Expansion project. The Equitrans Expansion project is designed to provide north-to-south capacity on the mainline Equitrans system for deliveries to the MVP.
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Revenue Composition %
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||||||
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Firm Contracts
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Interruptible Contracts
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Capacity
Reservation
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Usage
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Usage
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Charges
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Charges
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Fees
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Total
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Gathering
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49%
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4%
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1%
|
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54%
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Transmission
|
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42%
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2%
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2%
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46%
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•
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Capitalizing on economically attractive organic growth opportunities.
EQM believes organic growth will be a key driver of growth in the future. EQM expects to grow its systems over time by meeting EQT's and third party customers' midstream service needs that result from their drilling activity in EQM's areas of operations. Further, EQM believes it has a competitive advantage in pursuing economically attractive organic expansion projects in its areas of operations as a result of its strategically located assets which cover portions of the Marcellus, Upper Devonian and Utica Shales that lack substantial natural gas pipeline infrastructure.
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•
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Increasing access to existing and new delivery markets.
EQM is actively working to increase delivery interconnects with interstate pipelines, neighboring LDCs, large industrial facilities and electric generation plants in order to increase access to existing and new markets for natural gas consumption. In 2015, EQM began several multi-year transmission projects to support Marcellus, Upper Devonian and Utica Shale development, including the Ohio Valley Connector (OVC), the Equitrans Expansion project and the MVP. The OVC was placed in-service during the fourth quarter of 2016, providing shippers access to the Midwest markets. The Equitrans Expansion project is designed to provide north-to-south capacity on the mainline Equitrans system for deliveries to the MVP. This project and the MVP are expected to be constructed in 2018 and together will further diversify the market access on Equitrans by providing 2 Bcf per day of capacity to the growing Southeast demand markets. EQM is also executing on the Hammerhead project.
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•
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Pursuing accretive acquisitions from EQT and third parties
. EQM intends to seek opportunities to expand its existing operations through accretive acquisitions from EQT and third parties. EQT announced that it intends to sell the retained midstream assets it acquired in its acquisition of Rice Energy Inc. (Rice) to EQM through one or more drop-down transactions. See “EQM’s Relationship with EQT” for additional information regarding these assets. However, EQT is under no obligation to offer the acquisition opportunity to EQM. EQM will also evaluate and may pursue acquisition opportunities from third parties as they become available.
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•
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Attracting additional third party customers
. EQM actively markets its midstream services to, and pursues strategic relationships with, third party producers and demand driven customers in order to attract additional volumes and/or expansion opportunities. EQM believes that its connectivity to interstate pipelines as well as its position as an early developer of midstream infrastructure within certain areas of the Marcellus, Upper Devonian and Utica Shales, will allow EQM to capture additional third party volumes in the future and attract additional demand customers who want access to the Appalachian Basin.
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•
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Focusing on stable, fixed-fee business
. EQM intends to pursue additional opportunities to provide fixed-fee gathering, transmission and storage services to EQT and third parties. This contract structure enhances the stability of EQM's cash flows and limits its direct exposure to commodity price risk. EQM will focus on obtaining additional long-term firm commitments from customers, which may include reservation-based fees, volume commitments and acreage dedications.
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•
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requiring the acquisition of various permits to conduct regulated activities;
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requiring the installation of pollution-control equipment or otherwise restricting the way EQM can handle or dispose of its wastes;
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limiting or prohibiting construction activities in sensitive areas, such as wetlands, coastal regions or areas inhabited by endangered or threatened species; and
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•
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requiring investigatory and remedial actions to mitigate or eliminate pollution conditions caused by EQM's operations or attributable to former operations.
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For the year ended December 31,
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2017
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2016
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2015
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Gathering operating revenues
|
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54
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%
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54
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%
|
|
53
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%
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Transmission operating revenues
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46
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%
|
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46
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%
|
|
47
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%
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•
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natural gas price volatility or a sustained period of lower commodity prices may have an adverse effect on EQT's drilling operations, revenue, profitability, future rate of growth and liquidity;
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•
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a reduction in or slowing of EQT's anticipated drilling and production schedule, which would directly and adversely impact demand for our services;
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•
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infrastructure capacity constraints and interruptions;
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•
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risks associated with the operation of EQT's wells, pipelines and facilities, including potential environmental liabilities;
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•
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the availability of capital on a satisfactory economic basis to fund EQT's operations;
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•
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EQT's ability to identify exploration, development and production opportunities based on market conditions;
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•
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uncertainties inherent in projecting future rates of production;
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•
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EQT's ability to develop additional reserves that are economically recoverable, to optimize existing well production and to sustain production;
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adverse effects of governmental and environmental regulation, changes in tax laws and negative public perception regarding EQT's operations;
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the loss of key personnel; and
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risk associated with cyber security threats.
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the rates we charge for our gathering, transmission and storage services;
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the level of firm gathering, transmission and storage capacity sold and volumes of natural gas we gather, transport and store for our customers;
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regional, domestic and foreign supply and perceptions of supply of natural gas; the level of demand and perceptions of demand in our end-use markets; and actual and anticipated future prices of natural gas and other commodities (and the volatility thereof), which may impact our ability to renew and replace firm gathering, transmission and storage agreements;
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the effect of seasonal variations in temperature on the amount of natural gas that we gather, transport and store;
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the level of competition from other midstream energy companies in our geographic markets;
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the creditworthiness of our customers;
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restrictions contained in our joint venture agreements;
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the level of our operating, maintenance and general and administrative costs;
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regulatory action affecting the supply of, or demand for, natural gas, the rates we can charge on our assets, how we contract for services, our existing contracts, our operating costs or our operating flexibility; and
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•
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prevailing economic conditions.
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the level and timing of capital expenditures we make;
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the level of our operating and general and administrative expenses, including reimbursements to our general partner and its affiliates, including EQT, for services provided to us;
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the cost of acquisitions, if any;
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our debt service requirements and other liabilities;
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fluctuations in our working capital needs;
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our ability to borrow funds and access capital markets on satisfactory terms;
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restrictions on distributions contained in our debt agreements;
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the amount of cash reserves established by our general partner; and
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other business risks affecting our cash levels.
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rates and charges for our natural gas transmission and storage and FERC-regulated gathering services;
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certification and construction of new interstate transmission and storage facilities;
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abandonment of interstate transmission and storage services and facilities;
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maintenance of accounts and records;
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relationships between pipelines and certain affiliates;
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terms and conditions of services and service contracts with customers;
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•
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depreciation and amortization policies;
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acquisitions and dispositions of interstate transmission and storage facilities; and
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initiation and discontinuation of interstate transmission and storage services.
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•
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the level of existing and new competition to provide services to our markets;
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•
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the macroeconomic factors affecting natural gas economics for our current and potential customers;
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the balance of supply and demand, on a short-term, seasonal and long-term basis, in our markets;
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•
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the extent to which the customers in our markets are willing to contract on a long-term basis; and
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•
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the effects of federal, state or local regulations on the contracting practices of our customers.
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an inability to identify attractive expansion projects;
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an inability to obtain necessary rights-of-way or permits or other government approvals, including approvals by regulatory agencies;
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an inability to successfully integrate the infrastructure we build;
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an inability to raise financing for expansion projects on economically acceptable terms;
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•
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incorrect assumptions about volumes, revenues and costs, including potential growth; or
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•
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an inability to secure adequate customer commitments to use the newly expanded facilities.
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mistaken assumptions about volumes, revenues and costs, including synergies and potential growth;
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an inability to secure adequate customer commitments to use the acquired systems or facilities;
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an inability to integrate successfully the assets or businesses we acquire;
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the assumption of unknown liabilities for which we are not indemnified or for which our indemnity is inadequate;
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the diversion of management's and employees' attention from other business concerns; and
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unforeseen difficulties operating in new geographic areas or business lines.
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damage to pipelines, facilities, equipment and surrounding properties caused by hurricanes, earthquakes, tornadoes, floods, fires, landslides and other natural disasters and acts of sabotage and terrorism;
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inadvertent damage from construction, vehicles, and farm and utility equipment;
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uncontrolled releases of natural gas and other hydrocarbons;
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leaks, migrations or losses of natural gas as a result of the malfunction of equipment or facilities and, with respect to storage assets, as a result of undefined boundaries, geologic anomalies, natural pressure migration and wellbore migration;
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ruptures, fires and explosions;
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pipeline freeze offs due to cold weather; and
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other hazards that could also result in personal injury and loss of life, pollution to the environment and suspension of operations.
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perform ongoing assessments of pipeline integrity;
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identify and characterize applicable threats to pipeline segments that could impact a high consequence area;
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maintain processes for data collection, integration and analysis;
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repair and remediate pipelines as necessary; and
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implement preventive and mitigating actions.
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incur or guarantee additional debt;
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make distributions on or redeem or repurchase units;
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incur or permit liens on assets;
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enter into certain types of transactions with affiliates;
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enter into certain mergers or acquisitions; and
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dispose of all or substantially all of our assets.
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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;
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our funds available for operations, future business opportunities and distributions to unitholders will be reduced by that portion of our cash flow required to make interest payments on our debt;
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we may be more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
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our flexibility in responding to changing business and economic conditions may be limited.
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Neither our partnership agreement nor any other agreement requires EQT to pursue a business strategy that favors us, and the directors and officers of EQT have a fiduciary duty to make these decisions in the best interests of EQT, which may be contrary to our interests. EQT may choose to shift the focus of its investment and growth to areas not served by our assets.
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EQT, as our primary customer, has an economic incentive to cause us not to seek higher gathering fees or tariff rates, even if such higher fees or rates would reflect fees and rates that could be obtained in arm's length, third party transactions.
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EQT is not limited in its ability to compete with us and may offer business opportunities and/or sell midstream assets to RMP or third parties without first offering us the right to bid for them.
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Our general partner is allowed to take into account the interests of parties other than us, such as EQT, in resolving conflicts of interest, which has the effect of limiting its state law fiduciary duty to our unitholders.
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All of the officers and five of the directors of our general partner are also officers and/or directors of EQT and owe fiduciary duties to EQT, and three of the officers and four of the directors of our general partner are also officers and/or directors of EQGP's general partner and owe fiduciary duties to EQGP. Additionally, all of the officers and five of the directors of our general partner are also officers and/or directors of RMP's general partner and owe fiduciary duties to RMP. The officers of our general partner also devote significant time to the business of EQT, EQGP and RMP and are compensated by EQT accordingly.
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Our general partner determines whether or not we incur debt and that decision may affect our credit ratings.
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Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties, limits our general partner's liabilities and restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty under state law.
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Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.
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Our general partner controls the enforcement of the obligations that it and its affiliates owe to us, including EQT's obligations under our omnibus agreement with EQT and EQT's commercial agreements with us.
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Disputes may arise under our commercial agreements with EQT and its affiliates.
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Our partnership agreement gives our general partner broad discretion in establishing financial reserves for the proper conduct of our business. These reserves will affect the amount of cash available for distribution to our unitholders.
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Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reduction or increase of reserves, each of which can affect the amount of cash available for distribution to our unitholders.
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Our general partner determines the amount and timing of any capital expenditures and, in accordance with the terms of our partnership agreement, whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion or investment capital expenditure, which does not reduce operating surplus. These determinations can affect the amount of cash that is distributed to our unitholders.
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Our general partner determines which costs incurred by it and its affiliates are reimbursable by us.
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Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions.
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Our partnership agreement permits us to classify up to $30 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions to our general partner in respect of the general partner interest or the IDRs.
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Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.
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Our general partner intends to limit its liability regarding our contractual and other obligations.
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Our general partner may exercise its right to call and purchase all of our common units not owned by it and its affiliates if they own more than 80% of the common units.
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Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.
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Our general partner may transfer the IDRs without unitholder approval.
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Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner's IDRs without the approval of the conflicts committee of the board of directors of our general partner or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
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how to allocate corporate opportunities among us and other affiliates;
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whether to exercise its limited call right;
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whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our general partner;
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how to exercise its voting rights with respect to the units it owns;
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whether to elect to reset target distribution levels;
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whether to transfer the IDRs or any units it owns to a third party; and
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whether or not to consent to any merger, consolidation or conversion of the partnership or amendment to our partnership agreement.
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whenever our general partner, the board of directors of our general partner or any committee thereof (including the conflicts committee) makes a determination or takes, or declines to take, any other action in their respective capacities, our general partner, the board of directors of our general partner and any committee thereof (including the conflicts committee), as applicable, is required to make such determination, or take or decline to take such other action, in good faith, meaning that it subjectively believed that the decision was in the best interests of our partnership, and, except as specifically provided by our partnership agreement, will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;
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our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;
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our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and
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our general partner will not be in breach of its obligations under our partnership agreement (including any duties to us or our unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:
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◦
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approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval;
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◦
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approved by the vote of unitholders holding a majority of our outstanding common units, excluding any common units owned by our general partner and its affiliates;
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◦
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determined by the board of directors of our general partner to be on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
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◦
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determined by the board of directors of our general partner to be fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.
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•
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our existing unitholders' proportionate ownership interest in us will decrease;
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•
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the amount of distributable cash flow on each unit may decrease;
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•
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because the amount payable to holders of IDRs is based on a percentage of the total distributable cash flow, the distributions to holders of IDRs will increase even if the per unit distribution on common units remains the same;
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•
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the ratio of taxable income to distributions may increase;
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•
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the relative voting strength of each previously outstanding unit may be diminished; and
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•
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the market price of our common units may decline.
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•
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we were conducting business in a state but had not complied with that particular state's partnership statute; or
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•
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such unitholder's right to act with other unitholders to remove or replace our general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitutes "control" of our business.
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2017
|
|
2016
|
||||||||||||||||||||
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Unit Price Range
|
|
Distributions
|
|
Unit Price Range
|
|
Distributions
|
||||||||||||||||
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|
|
|
per Common
|
|
|
|
|
|
per Common
|
||||||||||||
|
|
High
|
|
Low
|
|
Unit
|
|
High
|
|
Low
|
|
Unit
|
||||||||||||
1st Quarter
|
|
$
|
82.99
|
|
|
$
|
73.76
|
|
|
$
|
0.85
|
|
|
$
|
77.70
|
|
|
$
|
57.88
|
|
|
$
|
0.71
|
|
2nd Quarter
|
|
79.93
|
|
|
69.28
|
|
|
0.89
|
|
|
80.63
|
|
|
69.22
|
|
|
0.745
|
|
||||||
3rd Quarter
|
|
78.75
|
|
|
71.75
|
|
|
0.935
|
|
|
80.58
|
|
|
74.49
|
|
|
0.78
|
|
||||||
4th Quarter
|
|
$
|
77.42
|
|
|
$
|
64.42
|
|
|
$
|
0.98
|
|
|
$
|
78.78
|
|
|
$
|
69.20
|
|
|
$
|
0.815
|
|
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statements of Consolidated Operations
|
|
|
|
(Thousands, except per share amounts)
|
|
|
||||||||||||||
Operating revenues
|
|
$
|
834,096
|
|
|
$
|
735,614
|
|
|
$
|
632,936
|
|
|
$
|
489,218
|
|
|
$
|
362,810
|
|
Operating income
|
|
580,708
|
|
|
526,949
|
|
|
451,036
|
|
|
332,595
|
|
|
248,628
|
|
|||||
Net income
|
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
$
|
284,816
|
|
|
$
|
191,653
|
|
Net income per limited partner unit
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
5.19
|
|
|
$
|
5.21
|
|
|
$
|
4.71
|
|
|
$
|
3.53
|
|
|
$
|
2.47
|
|
Diluted
|
|
5.19
|
|
|
5.21
|
|
|
4.70
|
|
|
3.52
|
|
|
2.46
|
|
|||||
Cash distributions paid per limited partner unit
|
|
$
|
3.655
|
|
|
$
|
3.05
|
|
|
$
|
2.505
|
|
|
$
|
2.02
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
|
$
|
3,548,827
|
|
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
$
|
1,943,366
|
|
|
$
|
1,437,680
|
|
Long-term debt
|
|
$
|
1,167,352
|
|
|
$
|
985,732
|
|
|
$
|
493,401
|
|
|
$
|
492,633
|
|
|
$
|
—
|
|
(a)
|
Net income attributable to AVC, Rager and the Gathering Assets for periods prior to October 1, 2016, net income attributable to NWV Gathering for periods prior to March 17, 2015, net income attributable to Jupiter for periods prior to May 7, 2014 and net income attributable to Sunrise for periods prior to July 22, 2013 were not allocated to the limited partners for purposes of calculating net income per limited partner unit. See Note 1 to the consolidated financial statements included in Item 8 of this Form 10-K for further discussion.
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
%
change 2017 – 2016 |
|
2015
|
|
%
change 2016 - 2015 |
||||||||
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
||||||||||||||||
Firm reservation fee revenues
|
|
$
|
407,355
|
|
|
$
|
339,237
|
|
|
20.1
|
|
|
$
|
267,517
|
|
|
26.8
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Usage fees under firm contracts
(a)
|
|
32,206
|
|
|
38,408
|
|
|
(16.1
|
)
|
|
33,021
|
|
|
16.3
|
|
|||
Usage fees under interruptible contracts
|
|
14,975
|
|
|
19,849
|
|
|
(24.6
|
)
|
|
34,567
|
|
|
(42.6
|
)
|
|||
Total volumetric based fee revenues
|
|
47,181
|
|
|
58,257
|
|
|
(19.0
|
)
|
|
67,588
|
|
|
(13.8
|
)
|
|||
Total operating revenues
|
|
454,536
|
|
|
397,494
|
|
|
14.4
|
|
|
335,105
|
|
|
18.6
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating and maintenance
|
|
43,235
|
|
|
38,367
|
|
|
12.7
|
|
|
37,011
|
|
|
3.7
|
|
|||
Selling, general and administrative
|
|
38,942
|
|
|
39,678
|
|
|
(1.9
|
)
|
|
30,477
|
|
|
30.2
|
|
|||
Depreciation and amortization
|
|
38,796
|
|
|
30,422
|
|
|
27.5
|
|
|
24,360
|
|
|
24.9
|
|
|||
Total operating expenses
|
|
120,973
|
|
|
108,467
|
|
|
11.5
|
|
|
91,848
|
|
|
18.1
|
|
|||
Operating income
|
|
$
|
333,563
|
|
|
$
|
289,027
|
|
|
15.4
|
|
|
$
|
243,257
|
|
|
18.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Gathering volumes (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Firm capacity reservation
|
|
1,826
|
|
|
1,553
|
|
|
17.6
|
|
|
1,140
|
|
|
36.2
|
|
|||
Volumetric based services
(b)
|
|
361
|
|
|
420
|
|
|
(14.0
|
)
|
|
485
|
|
|
(13.4
|
)
|
|||
Total gathered volumes
|
|
2,187
|
|
|
1,973
|
|
|
10.8
|
|
|
1,625
|
|
|
21.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
$
|
196,871
|
|
|
$
|
295,315
|
|
|
(33.3
|
)
|
|
$
|
225,537
|
|
|
30.9
|
|
(a)
|
Includes fees on volumes gathered in excess of firm contracted capacity.
|
(b)
|
Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity.
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
%
change 2017 – 2016 |
|
2015
|
|
%
change 2016 - 2015 |
||||||||
FINANCIAL DATA
|
|
(Thousands, other than per day amounts)
|
||||||||||||||||
Firm reservation fee revenues
|
|
$
|
348,193
|
|
|
$
|
277,816
|
|
|
25.3
|
|
|
$
|
247,231
|
|
|
12.4
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Usage fees under firm contracts
(a)
|
|
13,743
|
|
|
45,679
|
|
|
(69.9
|
)
|
|
42,646
|
|
|
7.1
|
|
|||
Usage fees under interruptible contracts
|
|
17,624
|
|
|
14,625
|
|
|
20.5
|
|
|
7,954
|
|
|
83.9
|
|
|||
Total volumetric based fee revenues
|
|
31,367
|
|
|
60,304
|
|
|
(48.0
|
)
|
|
50,600
|
|
|
19.2
|
|
|||
Total operating revenues
|
|
379,560
|
|
|
338,120
|
|
|
12.3
|
|
|
297,831
|
|
|
13.5
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating and maintenance
|
|
41,482
|
|
|
34,846
|
|
|
19.0
|
|
|
33,092
|
|
|
5.3
|
|
|||
Selling, general and administrative
|
|
32,244
|
|
|
33,083
|
|
|
(2.5
|
)
|
|
31,425
|
|
|
5.3
|
|
|||
Depreciation and amortization
|
|
58,689
|
|
|
32,269
|
|
|
81.9
|
|
|
25,535
|
|
|
26.4
|
|
|||
Total operating expenses
|
|
132,415
|
|
|
100,198
|
|
|
32.2
|
|
|
90,052
|
|
|
11.3
|
|
|||
Operating income
|
|
$
|
247,145
|
|
|
$
|
237,922
|
|
|
3.9
|
|
|
$
|
207,779
|
|
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Firm capacity reservation
|
|
2,399
|
|
|
1,651
|
|
|
45.3
|
|
|
1,841
|
|
|
(10.3
|
)
|
|||
Volumetric based services
(b)
|
|
37
|
|
|
430
|
|
|
(91.4
|
)
|
|
281
|
|
|
53.0
|
|
|||
Total transmission pipeline throughput
|
|
2,436
|
|
|
2,081
|
|
|
17.1
|
|
|
2,122
|
|
|
(1.9
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average contracted firm transmission reservation commitments (BBtu per day)
|
|
3,627
|
|
|
2,814
|
|
|
28.9
|
|
|
2,624
|
|
|
7.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
|
$
|
111,102
|
|
|
$
|
292,049
|
|
|
(62.0
|
)
|
|
$
|
203,706
|
|
|
43.4
|
|
(a)
|
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.
|
(b)
|
Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity.
|
•
|
EQM's operating performance as compared to other publicly traded partnerships in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods;
|
•
|
the ability of EQM's assets to generate sufficient cash flow to make distributions to EQM's unitholders;
|
•
|
EQM's ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Net income
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
Add:
|
|
|
|
|
|
||||||
Net interest expense
|
36,181
|
|
|
16,766
|
|
|
21,345
|
|
|||
Depreciation and amortization expense
|
97,485
|
|
|
62,691
|
|
|
49,895
|
|
|||
Income tax expense (benefit)
|
—
|
|
|
10,147
|
|
|
(16,741
|
)
|
|||
Preferred Interest payments received post conversion
(a)
|
10,984
|
|
|
2,764
|
|
|
—
|
|
|||
Non-cash long-term compensation expense
|
225
|
|
|
195
|
|
|
1,467
|
|
|||
Less:
|
|
|
|
|
|
||||||
Equity income
|
(22,171
|
)
|
|
(9,898
|
)
|
|
(2,367
|
)
|
|||
AFUDC – equity
|
(5,110
|
)
|
|
(19,402
|
)
|
|
(6,327
|
)
|
|||
Pre-acquisition capital lease payments for AVC
(b)
|
—
|
|
|
(17,186
|
)
|
|
(22,059
|
)
|
|||
Adjusted EBITDA attributable to NWV Gathering prior to acquisition
(c)
|
—
|
|
|
—
|
|
|
(19,841
|
)
|
|||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(d)
|
—
|
|
|
(11,420
|
)
|
|
(11,483
|
)
|
|||
Adjusted EBITDA
|
$
|
689,498
|
|
|
$
|
572,611
|
|
|
$
|
449,015
|
|
Less:
|
|
|
|
|
|
|
|
||||
Net interest expense excluding interest income on the Preferred Interest
|
(42,999
|
)
|
|
(18,506
|
)
|
|
(22,436
|
)
|
|||
Capitalized interest and AFUDC – debt
(e)
|
(4,120
|
)
|
|
(9,400
|
)
|
|
—
|
|
|||
Ongoing maintenance capital expenditures net of reimbursements
(f)
|
(27,609
|
)
|
|
(21,434
|
)
|
|
(20,099
|
)
|
|||
Distributable cash flow
|
$
|
614,770
|
|
|
$
|
523,271
|
|
|
$
|
406,480
|
|
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
650,550
|
|
|
$
|
537,904
|
|
|
$
|
489,706
|
|
Adjustments:
|
|
|
|
|
|
||||||
Pre-acquisition capital lease payments for AVC
(b)
|
—
|
|
|
(17,186
|
)
|
|
(22,059
|
)
|
|||
Capitalized interest and AFUDC – debt
(e)
|
(4,120
|
)
|
|
(9,400
|
)
|
|
—
|
|
|||
Principal payments received on the Preferred Interest
|
4,166
|
|
|
1,024
|
|
|
—
|
|
|||
Ongoing maintenance capital expenditures net of reimbursements
(f)
|
(27,609
|
)
|
|
(21,434
|
)
|
|
(20,099
|
)
|
|||
Current tax expense
|
—
|
|
|
1,373
|
|
|
13,945
|
|
|||
Adjusted EBITDA attributable to NWV Gathering prior to acquisition
(c)
|
—
|
|
|
—
|
|
|
(19,841
|
)
|
|||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(d)
|
—
|
|
|
(11,420
|
)
|
|
(11,483
|
)
|
|||
Other, including changes in working capital
|
(8,217
|
)
|
|
42,410
|
|
|
(23,689
|
)
|
|||
Distributable cash flow
|
$
|
614,770
|
|
|
$
|
523,271
|
|
|
$
|
406,480
|
|
(a)
|
In conjunction with the October 2016 Acquisition, the operating agreement of EES was amended and the accounting for EQM's Preferred Interest in EES converted from a cost method investment to a note receivable effective October 1, 2016. There were no changes in the cash payments; however, distributions from EES subsequent to this amendment were recorded partly as a reduction in the note receivable and partly as interest income, which is included in net interest expense in the accompanying statements of consolidated operations. Distributions received from EES prior to this amendment in 2016 were included in other income in the accompanying statements of consolidated operations.
|
(b)
|
Reflects capital lease payments due under the lease. These lease payments were generally made monthly on a one month lag prior to the October 2016 Acquisition.
|
(c)
|
Adjusted EBITDA attributable to NWV Gathering prior to acquisition for the periods presented was excluded from EQM's adjusted EBITDA calculations as these amounts were generated by NWV Gathering prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM's unitholders. Adjusted EBITDA attributable to NWV Gathering prior to acquisition for the year ended December 31, 2015 was calculated as net income of $11.1 million plus depreciation and amortization expense of $2.0 million plus income tax expense of $6.7 million.
|
(d)
|
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 AVC, Rager and the Gathering Assets prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM's unitholders. Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the years ended December 31, 2016 and 2015 was calculated as net income of $1.3 million and $34.2 million, respectively, plus depreciation and amortization expense of $2.1 million and $2.5 million, respectively, plus income tax expense (benefit) of $10.1 million and $(23.4 million), respectively, less interest income of $0.5 million and $1.1 million, respectively, less AFUDC - equity of $1.6 million and $0.7 million, respectively.
|
(e)
|
As a result of increased significance of capitalized interest and AFUDC - debt in 2016, this line item was added as an adjustment to the calculation of distributable cash flow for the year ended December 31, 2016. Had distributable cash flow been calculated on a consistent basis, it would have been $5.6 million lower for the year ended December 31, 2015 than the amount presented herein.
|
(f)
|
Ongoing maintenance capital expenditures are expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long term, EQM's operating capacity or operating income. EQT has reimbursement obligations to EQM for certain maintenance capital expenditures under the terms of the EQM omnibus agreement. For further explanation of these reimbursable maintenance capital expenditures, see "Capital Requirements." For the years ended December 31,
2016
and
2015
, ongoing maintenance capital expenditures net of reimbursements excludes ongoing maintenance of
$6.5 million
and
$9.8 million
, respectively, attributable to AVC, Rager, the Gathering Assets and NWV Gathering prior to acquisition.
|
•
|
Mountain Valley Pipeline
.
The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of December 31, 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, providing access to the growing Southeast demand markets. As currently designed, the MVP is estimated to cost a total of approximately $3.5 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the joint venture. In 2018, EQM expects to provide capital contributions of $1.0 billion to $1.2 billion to the MVP Joint Venture. 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 October 13, 2017, the FERC issued the Certificate of Public Convenience and Necessity for the project. In early 2018, the MVP Joint Venture received limited notice to proceed with certain construction activities from the FERC. The MVP Joint Venture plans to commence construction in the first quarter of 2018. The pipeline is targeted to be placed in-service during the fourth quarter of 2018.
|
•
|
Affiliate Wellhead Gathering Expansion.
In 2018, EQM estimates capital expenditures of approximately $300 million on gathering expansion projects, primarily driven by affiliate wellhead and header projects in Pennsylvania and West Virginia, including commencing preliminary construction activities on the Hammerhead project, a 1.2 Bcf per day gathering header pipeline connecting Pennsylvania and West Virginia production to the MVP.
|
•
|
Transmission Expansion
.
In 2018, EQM estimates capital expenditures of approximately $100 million for other transmission expansion projects, primarily attributable to the Equitrans Expansion project. The Equitrans Expansion project is designed to provide north-to-south capacity on the mainline Equitrans system for deliveries to the MVP.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
|||||||||||
Expansion capital expenditures
(a)
|
|
$
|
264,645
|
|
|
$
|
558,071
|
|
|
$
|
388,442
|
|
Maintenance capital expenditures:
|
|
|
|
|
|
|
||||||
Ongoing maintenance
|
|
43,072
|
|
|
28,498
|
|
|
37,422
|
|
|||
Funded regulatory compliance
|
|
256
|
|
|
795
|
|
|
3,379
|
|
|||
Total maintenance capital expenditures
|
|
43,328
|
|
|
29,293
|
|
|
40,801
|
|
|||
Total capital expenditures
|
|
307,973
|
|
|
587,364
|
|
|
429,243
|
|
|||
Plus: accrued capital expenditures at the end of prior period
(b)
|
|
26,678
|
|
|
24,133
|
|
|
53,016
|
|
|||
Less: accrued capital expenditures at the end of current period
(b)
|
|
(33,067
|
)
|
|
(26,678
|
)
|
|
(24,133
|
)
|
|||
Less: other non-cash items
(c)
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||
Total cash capital expenditures
|
|
$
|
301,584
|
|
|
$
|
584,819
|
|
|
$
|
458,056
|
|
(a)
|
Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of
$159.6 million
and
$98.4 million
for the years ended
December 31, 2017
and
2016
, respectively. In 2015, EQM paid
$84.4 million
for its acquisition of EQT's ownership interest in the MVP Joint Venture and subsequent capital contributions to the MVP Joint Venture.
|
(b)
|
EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the consolidated statements of cash flows until they are paid in a subsequent period.
|
(c)
|
EQM capitalizes certain labor overhead costs which include a portion of non-cash equity-based compensation.
|
Rating Service
|
|
Senior Notes
|
|
Outlook
|
Moody's Investors Service (Moody's)
|
|
Ba1
|
|
Stable
|
Standard & Poor's Ratings Services (S&P)
|
|
BBB-
|
|
Stable
|
Fitch Ratings (Fitch)
|
|
BBB-
|
|
Stable
|
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
2023+
|
||||||||||
|
|
(Thousands)
|
||||||||||||||||||
Long-term debt
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000,000
|
|
Credit facility borrowings
(a)
|
|
180,000
|
|
|
—
|
|
|
—
|
|
|
180,000
|
|
|
—
|
|
|||||
Interest payments on senior notes
(b)
|
|
315,573
|
|
|
40,625
|
|
|
81,250
|
|
|
81,250
|
|
|
112,448
|
|
|||||
Purchase obligations
|
|
49,504
|
|
|
49,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
1,545,077
|
|
|
$
|
90,129
|
|
|
$
|
81,250
|
|
|
$
|
261,250
|
|
|
$
|
1,112,448
|
|
(a)
|
Credit facility borrowings were classified based on the termination date of the amended and restated credit facility agreement.
|
(b)
|
Interest payments exclude interest related to the credit facility borrowings as the interest rate on the credit facility agreement is variable.
|
|
Page
Reference
|
Reports of Independent Registered Public Accounting Firm
|
|
Statements of Consolidated Operations for each of the three years in the period ended December 31, 2017
|
|
Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 2017
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Statements of Consolidated Equity for each of the three years in the period ended December 31, 2017
|
|
Notes to Consolidated Financial Statements
|
/s/ Ernst & Young, LLP
|
|
We have served as the Partnership's auditor since 2012.
|
|
Pittsburgh, Pennsylvania
|
|
February 15, 2018
|
|
/s/ Ernst & Young, LLP
|
|
Pittsburgh, Pennsylvania
|
|
February 15, 2018
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands, except per unit amounts)
|
||||||||||
Operating revenues
(b)
|
$
|
834,096
|
|
|
$
|
735,614
|
|
|
$
|
632,936
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Operating and maintenance
(c)
|
84,717
|
|
|
73,213
|
|
|
70,103
|
|
|||
Selling, general and administrative
(c)
|
71,186
|
|
|
72,761
|
|
|
61,902
|
|
|||
Depreciation and amortization
|
97,485
|
|
|
62,691
|
|
|
49,895
|
|
|||
Total operating expenses
|
253,388
|
|
|
208,665
|
|
|
181,900
|
|
|||
Operating income
|
580,708
|
|
|
526,949
|
|
|
451,036
|
|
|||
Other income
(d)
|
27,377
|
|
|
37,918
|
|
|
8,694
|
|
|||
Net interest expense
(e)
|
36,181
|
|
|
16,766
|
|
|
21,345
|
|
|||
Income before income taxes
|
571,904
|
|
|
548,101
|
|
|
438,385
|
|
|||
Income tax expense (benefit)
|
—
|
|
|
10,147
|
|
|
(16,741
|
)
|
|||
Net income
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
|
|
|
|
|
||||||
Calculation of limited partners' interest in net income:
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
Less pre-acquisition income allocated to parent
|
—
|
|
|
(21,861
|
)
|
|
(72,782
|
)
|
|||
Less general partner interest in net income - general partner units
|
(10,060
|
)
|
|
(9,173
|
)
|
|
(7,455
|
)
|
|||
Less general partner interest in net income - incentive distribution rights
|
(143,531
|
)
|
|
(93,568
|
)
|
|
(46,992
|
)
|
|||
Limited partners' interest in net income
|
$
|
418,313
|
|
|
$
|
413,352
|
|
|
$
|
327,897
|
|
|
|
|
|
|
|
||||||
Net income per limited partner unit – basic
|
$
|
5.19
|
|
|
$
|
5.21
|
|
|
$
|
4.71
|
|
Net income per limited partner unit – diluted
|
$
|
5.19
|
|
|
$
|
5.21
|
|
|
$
|
4.70
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding – basic
|
80,603
|
|
|
79,367
|
|
|
69,612
|
|
|||
Weighted average limited partner units outstanding – diluted
|
80,603
|
|
|
79,388
|
|
|
69,773
|
|
(a)
|
As discussed in Note 2, EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of the Allegheny Valley Connector, LLC (AVC), Rager Mountain Storage Company LLC (Rager) and certain gathering assets (the Gathering Assets), which were acquired by EQM effective on October 1, 2016 (the October 2016 Acquisition), and the Northern West Virginia Marcellus gathering system (NWV Gathering), which was acquired by EQM on March 17, 2015, because these transactions were between entities under common control.
|
(b)
|
Operating revenues included affiliate revenues from EQT Corporation and subsidiaries (collectively, EQT) of
$605.1 million
,
$551.4 million
and
$462.4 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. See Note 5.
|
(c)
|
Operating and maintenance expense included charges from EQT of
$40.0 million
,
$34.2 million
and
$33.5 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. Selling, general and administrative expense included charges from EQT of
$67.4 million
,
$67.3 million
and
$55.1 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. See Note 5.
|
(d)
|
For the year ended
December 31, 2017
, other income included equity income from Mountain Valley Pipeline, LLC (MVP Joint Venture) of
$22.2 million
. For the year ended
December 31, 2016
, other income included distributions received from EQT Energy Supply, LLC (EES) of
$8.3 million
and equity income from the MVP Joint Venture of
$9.9 million
. For the year ended
December 31, 2015
, other income included equity income from the MVP Joint Venture of
$2.4 million
. See Note 6.
|
(e)
|
For the years ended
December 31, 2017
and
2016
, net interest expense included interest income on the preferred interest (the Preferred Interest) in EES of
$6.8 million
and
$1.7 million
, respectively.
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
97,485
|
|
|
62,691
|
|
|
49,895
|
|
|||
Deferred income taxes
|
—
|
|
|
8,774
|
|
|
(30,686
|
)
|
|||
Equity income
|
(22,171
|
)
|
|
(9,898
|
)
|
|
(2,367
|
)
|
|||
AFUDC
–
equity
|
(5,110
|
)
|
|
(19,402
|
)
|
|
(6,327
|
)
|
|||
Non-cash long term compensation expense
|
225
|
|
|
195
|
|
|
1,467
|
|
|||
Changes in other assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(8,142
|
)
|
|
(2,872
|
)
|
|
(647
|
)
|
|||
Accounts payable
|
4,821
|
|
|
(9,354
|
)
|
|
8,470
|
|
|||
Due to/from EQT affiliates
|
3,111
|
|
|
(34,667
|
)
|
|
8,633
|
|
|||
Other assets and other liabilities
|
8,427
|
|
|
4,483
|
|
|
6,142
|
|
|||
Net cash provided by operating activities
|
650,550
|
|
|
537,904
|
|
|
489,706
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(301,584
|
)
|
|
(584,819
|
)
|
|
(458,056
|
)
|
|||
Acquisitions - net assets from EQT (see Note 2)
|
—
|
|
|
(62,372
|
)
|
|
(386,791
|
)
|
|||
MVP Interest Acquisition (see Note 2) and capital contributions to the MVP Joint Venture
|
(159,550
|
)
|
|
(98,399
|
)
|
|
(84,381
|
)
|
|||
Sales of interests in the MVP Joint Venture
|
—
|
|
|
12,533
|
|
|
9,723
|
|
|||
Preferred Interest Acquisition (as defined in Note 2)
|
—
|
|
|
—
|
|
|
(124,317
|
)
|
|||
Principal payments received on the Preferred Interest (see Note 2)
|
4,166
|
|
|
1,024
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(456,968
|
)
|
|
(732,033
|
)
|
|
(1,043,822
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from the issuance of EQM common units, net of offering costs
|
—
|
|
|
217,102
|
|
|
1,183,921
|
|
|||
Acquisitions - purchase price in excess of net assets from EQT (see Note 2)
|
—
|
|
|
(3,734
|
)
|
|
(486,392
|
)
|
|||
Acquisition of AVC net assets from EQT (see Note 2)
|
—
|
|
|
(208,894
|
)
|
|
—
|
|
|||
Proceeds from credit facility borrowings
|
524,000
|
|
|
740,000
|
|
|
617,000
|
|
|||
Payments of credit facility borrowings
|
(344,000
|
)
|
|
(1,039,000
|
)
|
|
(318,000
|
)
|
|||
Proceeds from the issuance of long-term debt
|
—
|
|
|
500,000
|
|
|
—
|
|
|||
Net contributions from (distributions to) EQT
|
—
|
|
|
20,234
|
|
|
(6,598
|
)
|
|||
Capital contributions
|
3,052
|
|
|
5,884
|
|
|
1,781
|
|
|||
Distributions paid to unitholders
|
(432,188
|
)
|
|
(329,471
|
)
|
|
(212,262
|
)
|
|||
Discount, debt issuance costs and credit facility origination fees
|
(2,257
|
)
|
|
(8,580
|
)
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(251,393
|
)
|
|
(106,459
|
)
|
|
779,450
|
|
|||
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
(57,811
|
)
|
|
(300,588
|
)
|
|
225,334
|
|
|||
Cash and cash equivalents at beginning of year
|
60,368
|
|
|
360,956
|
|
|
135,622
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,557
|
|
|
$
|
60,368
|
|
|
$
|
360,956
|
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
|
||||
Interest, net of amount capitalized
|
$
|
41,958
|
|
|
$
|
13,899
|
|
|
$
|
19,606
|
|
Non-cash activity during the year:
|
|
|
|
|
|
|
|
||||
Increase (decrease) in capital contribution receivable from EQT
|
$
|
12,411
|
|
|
$
|
(5,283
|
)
|
|
$
|
5,744
|
|
Elimination of net current and deferred tax liabilities
|
—
|
|
|
93,951
|
|
|
84,446
|
|
|||
Asset adjustments prior to acquisition
|
—
|
|
|
(115,270
|
)
|
|
—
|
|
|||
Limited partner and general partner units issued for acquisitions
|
—
|
|
|
—
|
|
|
52,500
|
|
|||
Net settlement of current income taxes receivable with EQT
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,652
|
|
(a)
|
As discussed in Note 2, EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, and NWV Gathering, which was acquired by EQM on March 17, 2015, because these transactions were between entities under common control.
|
|
2017
|
|
2016
|
||||
|
(Thousands, except number of units)
|
||||||
ASSETS
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
2,557
|
|
|
$
|
60,368
|
|
Accounts receivable (net of allowance for doubtful accounts of $446 and $319 as of December 31, 2017 and 2016, respectively)
|
28,804
|
|
|
20,662
|
|
||
Accounts receivable – affiliate
|
103,304
|
|
|
81,358
|
|
||
Other current assets
|
12,662
|
|
|
9,671
|
|
||
Total current assets
|
147,327
|
|
|
172,059
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
3,200,108
|
|
|
2,894,858
|
|
||
Less: accumulated depreciation
|
(396,049
|
)
|
|
(316,024
|
)
|
||
Net property, plant and equipment
|
2,804,059
|
|
|
2,578,834
|
|
||
|
|
|
|
||||
Investment in unconsolidated entity
|
460,546
|
|
|
184,562
|
|
||
Other assets
|
136,895
|
|
|
140,385
|
|
||
Total assets
|
$
|
3,548,827
|
|
|
$
|
3,075,840
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
47,040
|
|
|
$
|
35,830
|
|
Due to related party
|
31,673
|
|
|
19,027
|
|
||
Capital contribution payable to MVP Joint Venture
|
105,734
|
|
|
11,471
|
|
||
Accrued interest
|
10,926
|
|
|
12,016
|
|
||
Accrued liabilities
|
16,871
|
|
|
8,648
|
|
||
Total current liabilities
|
212,244
|
|
|
86,992
|
|
||
|
|
|
|
||||
Credit facility borrowings
|
180,000
|
|
|
—
|
|
||
Senior notes
|
987,352
|
|
|
985,732
|
|
||
Regulatory and other long-term liabilities
|
20,273
|
|
|
9,562
|
|
||
Total liabilities
|
1,399,869
|
|
|
1,082,286
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
|
|||
Common (80,581,758 units issued and outstanding at December 31, 2017 and 2016)
|
2,147,706
|
|
|
2,008,510
|
|
||
General partner (1,443,015 units issued and outstanding at December 31, 2017 and 2016)
|
1,252
|
|
|
(14,956
|
)
|
||
Total equity
|
2,148,958
|
|
|
1,993,554
|
|
||
Total liabilities and equity
|
$
|
3,548,827
|
|
|
$
|
3,075,840
|
|
|
Predecessor
|
|
Limited Partners
|
|
General
|
|
|
||||||||||||
|
Equity
|
|
Common
|
|
Subordinated
|
|
Partner
|
|
Total
|
||||||||||
|
(Thousands)
|
||||||||||||||||||
Balance at January 1, 2015
|
$
|
520,287
|
|
|
$
|
1,647,910
|
|
|
$
|
(929,374
|
)
|
|
$
|
(27,497
|
)
|
|
$
|
1,211,326
|
|
Net income
|
72,782
|
|
|
327,897
|
|
|
—
|
|
|
54,447
|
|
|
455,126
|
|
|||||
Capital contributions
|
—
|
|
|
7,342
|
|
|
—
|
|
|
150
|
|
|
7,492
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
1,537
|
|
|
—
|
|
|
33
|
|
|
1,570
|
|
|||||
Net distributions to EQT
|
(15,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,179
|
)
|
|||||
Distributions to unitholders
|
—
|
|
|
(162,040
|
)
|
|
(10,057
|
)
|
|
(40,165
|
)
|
|
(212,262
|
)
|
|||||
Conversion of subordinated units to common units
(b)
|
—
|
|
|
(939,431
|
)
|
|
939,431
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
1,182,002
|
|
|
—
|
|
|
1,919
|
|
|
1,183,921
|
|
|||||
Elimination of net current and deferred tax liabilities
|
84,446
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,446
|
|
|||||
NWV Gathering net assets from EQT
|
(386,791
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(386,791
|
)
|
|||||
Issuance of units
|
—
|
|
|
38,910
|
|
|
—
|
|
|
13,590
|
|
|
52,500
|
|
|||||
Purchase price in excess of net assets from EQT
|
—
|
|
|
(505,452
|
)
|
|
—
|
|
|
(33,440
|
)
|
|
(538,892
|
)
|
|||||
Balance at December 31, 2015
|
$
|
275,545
|
|
|
$
|
1,598,675
|
|
|
$
|
—
|
|
|
$
|
(30,963
|
)
|
|
$
|
1,843,257
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
21,861
|
|
|
413,352
|
|
|
—
|
|
|
102,741
|
|
|
537,954
|
|
|||||
Capital contributions
|
—
|
|
|
591
|
|
|
—
|
|
|
11
|
|
|
602
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|||||
Net contributions from EQT
|
20,234
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,234
|
|
|||||
Elimination of capital lease
(c)
|
(25,055
|
)
|
|
23,500
|
|
|
—
|
|
|
1,555
|
|
|
—
|
|
|||||
Distributions to unitholders
|
—
|
|
|
(241,403
|
)
|
|
—
|
|
|
(88,068
|
)
|
|
(329,471
|
)
|
|||||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
217,102
|
|
|
—
|
|
|
—
|
|
|
217,102
|
|
|||||
Elimination of net current and deferred tax liabilities
|
93,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,951
|
|
|||||
Asset adjustments prior to acquisition
(d)
|
(115,270
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(115,270
|
)
|
|||||
October 2016 Acquisition net assets from EQT
|
(271,266
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(271,266
|
)
|
|||||
Purchase price in excess of net assets from EQT
|
—
|
|
|
(3,502
|
)
|
|
—
|
|
|
(232
|
)
|
|
(3,734
|
)
|
|||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
2,008,510
|
|
|
$
|
—
|
|
|
$
|
(14,956
|
)
|
|
$
|
1,993,554
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
418,313
|
|
|
—
|
|
|
153,591
|
|
|
571,904
|
|
|||||
Capital contributions
|
—
|
|
|
15,184
|
|
|
—
|
|
|
279
|
|
|
15,463
|
|
|||||
Equity-based compensation plans
|
—
|
|
|
225
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|||||
Distributions to unitholders
|
—
|
|
|
(294,526
|
)
|
|
—
|
|
|
(137,662
|
)
|
|
(432,188
|
)
|
|||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
2,147,706
|
|
|
$
|
—
|
|
|
$
|
1,252
|
|
|
$
|
2,148,958
|
|
(a)
|
As discussed in Note 2, EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, and NWV Gathering, which was acquired by EQM on March 17, 2015, because these transactions were between entities under common control.
|
(b)
|
All subordinated units were converted to common units on a
one
-for-one basis on February 17, 2015. For purposes of calculating net income per common and subordinated unit, the conversion of the subordinated units was deemed to have occurred on January 1, 2015. See Note 3.
|
(c)
|
Reflects the elimination of the historical capital lease depreciation expense as described in Note 2.
|
(d)
|
Represents a decrease in the carrying value of the Gathering Assets and regulatory assets on the books of AVC, Rager, and the Gathering Assets by EQT prior to the October 2016 Acquisition.
|
|
|
As of December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(Thousands)
|
||||||
Gathering assets
|
|
$
|
1,526,028
|
|
|
$
|
1,330,998
|
|
Accumulated depreciation
|
|
(147,575
|
)
|
|
(110,473
|
)
|
||
Net gathering assets
|
|
1,378,453
|
|
|
1,220,525
|
|
||
Transmission and storage assets
|
|
1,674,080
|
|
|
1,563,860
|
|
||
Accumulated depreciation
|
|
(248,474
|
)
|
|
(205,551
|
)
|
||
Net transmission and storage assets
|
|
1,425,606
|
|
|
1,358,309
|
|
||
Net property, plant and equipment
|
|
$
|
2,804,059
|
|
|
$
|
2,578,834
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Operating revenues
|
$
|
390,883
|
|
|
$
|
347,320
|
|
|
$
|
309,984
|
|
Operating expenses
|
$
|
151,510
|
|
|
$
|
118,611
|
|
|
$
|
109,954
|
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands)
|
||||||
Property, plant & equipment
|
$
|
1,787,656
|
|
|
$
|
1,675,433
|
|
Accumulated depreciation and amortization
|
(278,756
|
)
|
|
(234,336
|
)
|
||
Net property, plant & equipment
|
$
|
1,508,900
|
|
|
$
|
1,441,097
|
|
|
|
Acquisition Date
|
|
Total Consideration
|
|
Cash
|
|
Common Units Issued to EQT
|
|
GP Units Issued to EQT
|
||||||
|
|
(Thousands, except unit amounts)
|
||||||||||||||
NWV Gathering Acquisition
(a)
|
|
3/17/15
|
|
$
|
925,683
|
|
|
$
|
873,183
|
|
|
511,973
|
|
|
178,816
|
|
MVP Interest Acquisition
(b)
|
|
3/30/15
|
|
54,229
|
|
|
54,229
|
|
|
—
|
|
|
—
|
|
||
Preferred Interest Acquisition
(c)
|
|
4/15/15
|
|
124,317
|
|
|
124,317
|
|
|
—
|
|
|
—
|
|
||
October 2016 Acquisition
(d)
|
|
10/13/16
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
|
—
|
|
|
—
|
|
(a)
|
EQT contributed NWV Gathering to EQM Gathering Opco, LLC (EQM Gathering), an indirect wholly owned subsidiary of EQM. The cash portion of the purchase price was funded with net proceeds from an equity offering of EQM common units and borrowings under EQM's credit facility.
|
(b)
|
EQM assumed
100%
of the membership interests in MVP Holdco, LLC (MVP Holdco), the owner of the interest (the MVP Interest) in the MVP Joint Venture, which at the time was an indirect wholly owned subsidiary of EQT. The cash payment made represented EQM's reimbursement to EQT for
100%
of the capital contributions made by EQT to the MVP Joint Venture as of March 30, 2015. The cash payment was funded by borrowings under EQM's credit facility. See Note 6.
|
(c)
|
Pursuant to the NWV Gathering Acquisition contribution and sale agreement, EQM acquired the Preferred Interest from EQT in EES, which at the time was an indirect wholly owned subsidiary of EQT. EES generates revenue from services provided to a local distribution company. The cash payment was funded by borrowings under EQM's credit facility.
|
(d)
|
On October 13, 2016, EQM entered into a Purchase and Sale Agreement with EQT pursuant to which EQM acquired from EQT
100%
of the outstanding limited liability company interests of AVC and Rager as well as the Gathering Assets. The closing occurred on October 13, 2016 and was effective as of October 1, 2016. The cash payment was funded by borrowings under EQM's credit facility.
|
|
|
Common Units Issued
|
|
GP Units Issued
|
|
Price Per Unit
|
|
Net Proceeds
|
|
Underwriters' Discount and Other Offering Expenses
|
||||||||
|
|
(Thousands, except unit and per unit amounts)
|
||||||||||||||||
March 2015 equity offering
(a)
|
|
9,487,500
|
|
|
25,255
|
|
|
$
|
76.00
|
|
|
$
|
696,582
|
|
|
$
|
24,468
|
|
$750 Million At the Market (ATM) Program in 2015
(b)
|
|
1,162,475
|
|
|
—
|
|
|
74.92
|
|
|
85,483
|
|
|
1,610
|
|
|||
November 2015 equity offering
(c)
|
|
5,650,000
|
|
|
—
|
|
|
71.80
|
|
|
399,937
|
|
|
5,733
|
|
|||
$750 Million ATM Program in 2016
(d)
|
|
2,949,309
|
|
|
—
|
|
|
$
|
74.42
|
|
|
$
|
217,102
|
|
|
$
|
2,381
|
|
(a)
|
The underwriters exercised their option to purchase additional common units. The EQM General Partner purchased
25,255
EQM general partner units for approximately
$1.9 million
to maintain its then
2.0%
general partner ownership percentage. This amount was included in net proceeds from this offering. The net proceeds were used to finance a portion of the cash consideration paid to EQT in connection with the NWV Gathering Acquisition as described in Note 2.
|
(b)
|
During the third quarter of 2015, EQM entered into an equity distribution agreement that established an ATM common unit offering program, pursuant to which a group of managers, acting as EQM's sales agents, may sell EQM common units having an aggregate offering price of up to
$750
million (the
$750
Million ATM Program). The price per unit represents an average price for all issuances under the
$750
Million ATM Program in 2015. The underwriters' discount and other offering expenses in the table above include commissions of approximately
$0.9 million
. EQM used the net proceeds for general partnership purposes.
|
(c)
|
The net proceeds were used for general partnership purposes and to repay amounts outstanding under EQM's credit facility.
|
(d)
|
The price per unit represents an average price for all issuances under the
$750
Million ATM Program in 2016. The underwriters' discount and other offering expenses in the table above include commissions of approximately
$2.2 million
. EQM used the net proceeds for general partnership purposes.
|
|
|
Limited Partner Units
|
|
General
|
|
|
||||||
|
|
Common
|
|
Subordinated
|
|
Partner Units
|
|
Total
|
||||
Balance at January 1, 2015
|
|
43,347,452
|
|
|
17,339,718
|
|
|
1,238,514
|
|
|
61,925,684
|
|
Conversion of subordinated units to common units
|
|
17,339,718
|
|
|
(17,339,718
|
)
|
|
—
|
|
|
—
|
|
2014 EQM VDA issuance
|
|
21,063
|
|
|
—
|
|
|
430
|
|
|
21,493
|
|
March 2015 equity offering
|
|
9,487,500
|
|
|
—
|
|
|
25,255
|
|
|
9,512,755
|
|
NWV Gathering Acquisition consideration
|
|
511,973
|
|
|
—
|
|
|
178,816
|
|
|
690,789
|
|
$750 Million ATM Program
|
|
1,162,475
|
|
|
—
|
|
|
—
|
|
|
1,162,475
|
|
November 2015 equity offering
|
|
5,650,000
|
|
|
—
|
|
|
—
|
|
|
5,650,000
|
|
Balance at December 31, 2015
|
|
77,520,181
|
|
|
—
|
|
|
1,443,015
|
|
|
78,963,196
|
|
2014 EQM VDA issuance
|
|
19,796
|
|
|
—
|
|
|
—
|
|
|
19,796
|
|
EQM Total Return Program issuance
|
|
92,472
|
|
|
—
|
|
|
—
|
|
|
92,472
|
|
$750 Million ATM Program
|
|
2,949,309
|
|
|
—
|
|
|
—
|
|
|
2,949,309
|
|
Balance at December 31, 2016 and 2017
|
|
80,581,758
|
|
|
—
|
|
|
1,443,015
|
|
|
82,024,773
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Revenues from external customers (including affiliates):
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
454,536
|
|
|
$
|
397,494
|
|
|
$
|
335,105
|
|
Transmission
|
379,560
|
|
|
338,120
|
|
|
297,831
|
|
|||
Total operating revenues
|
$
|
834,096
|
|
|
$
|
735,614
|
|
|
$
|
632,936
|
|
Operating income:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
333,563
|
|
|
$
|
289,027
|
|
|
$
|
243,257
|
|
Transmission
|
247,145
|
|
|
237,922
|
|
|
207,779
|
|
|||
Total operating income
|
$
|
580,708
|
|
|
$
|
526,949
|
|
|
$
|
451,036
|
|
|
|
|
|
|
|
||||||
Reconciliation of operating income to net income:
|
|
|
|
|
|
||||||
Other income
|
27,377
|
|
|
37,918
|
|
|
8,694
|
|
|||
Net interest expense
|
36,181
|
|
|
16,766
|
|
|
21,345
|
|
|||
Income tax expense (benefit)
|
—
|
|
|
10,147
|
|
|
(16,741
|
)
|
|||
Net income
|
$
|
571,904
|
|
|
$
|
537,954
|
|
|
$
|
455,126
|
|
|
As of December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Segment assets:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
1,463,247
|
|
|
$
|
1,292,713
|
|
|
$
|
1,079,644
|
|
Transmission
|
1,487,501
|
|
|
1,413,631
|
|
|
1,183,641
|
|
|||
Total operating segments
|
2,950,748
|
|
|
2,706,344
|
|
|
2,263,285
|
|
|||
Headquarters, including cash
|
598,079
|
|
|
369,496
|
|
|
570,073
|
|
|||
Total assets
|
$
|
3,548,827
|
|
|
$
|
3,075,840
|
|
|
$
|
2,833,358
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
38,796
|
|
|
$
|
30,422
|
|
|
$
|
24,360
|
|
Transmission
|
58,689
|
|
|
32,269
|
|
|
25,535
|
|
|||
Total
|
$
|
97,485
|
|
|
$
|
62,691
|
|
|
$
|
49,895
|
|
Expenditures for segment assets:
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
196,871
|
|
|
$
|
295,315
|
|
|
$
|
225,537
|
|
Transmission
|
111,102
|
|
|
292,049
|
|
|
203,706
|
|
|||
Total
(a)
|
$
|
307,973
|
|
|
$
|
587,364
|
|
|
$
|
429,243
|
|
(a)
|
EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the statements of consolidated cash flows until they are paid in a subsequent period. Accrued capital expenditures were approximately
$33.1 million
,
$26.7 million
,
$24.1 million
and
$53.0 million
at
December 31, 2017
,
2016
,
2015
and
2014
, respectively.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Reimbursements to EQT
|
|
|
|
|
|
|
|
||||
Operating and maintenance expense
(a)
|
$
|
39,957
|
|
|
$
|
33,526
|
|
|
$
|
31,310
|
|
Selling, general and administrative expense
(a)
|
$
|
67,424
|
|
|
$
|
63,255
|
|
|
$
|
46,149
|
|
|
|
|
|
|
|
||||||
Reimbursements from EQT
(b)
|
|
|
|
|
|
|
|
||||
Plugging and abandonment
|
$
|
4
|
|
|
$
|
195
|
|
|
$
|
26
|
|
Bare steel replacement
|
15,704
|
|
|
—
|
|
|
6,268
|
|
|||
Other capital reimbursements
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
1,198
|
|
(a)
|
The expenses for which EQM reimburses EQT and its subsidiaries may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis, and EQM is unable to estimate what those expenses would be on a stand-alone basis. These amounts exclude the recast impact of the October 2016 Acquisition and NWV Gathering Acquisition as these amounts do not represent reimbursements pursuant to the omnibus agreement.
|
(b)
|
These reimbursements were recorded as capital contributions from EQT.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
Operating revenues
|
$
|
605,099
|
|
|
$
|
551,353
|
|
|
$
|
462,371
|
|
Operating and maintenance expense
(a)
|
39,957
|
|
|
34,179
|
|
|
33,452
|
|
|||
Selling, general and administrative expense
(a)
|
67,424
|
|
|
67,345
|
|
|
55,092
|
|
|||
Other income
(b)
|
22,171
|
|
|
18,191
|
|
|
2,367
|
|
|||
Interest income on Preferred Interest (see Note 2)
|
6,818
|
|
|
1,740
|
|
|
—
|
|
|||
Principal payments received on Preferred Interest (see Note 2)
|
4,166
|
|
|
1,024
|
|
|
—
|
|
|||
Distributions to EQM General Partner
(c)
|
235,167
|
|
|
169,438
|
|
|
109,194
|
|
|||
Capital contributions from EQT
|
15,463
|
|
|
602
|
|
|
7,492
|
|
|||
Net contributions from/(distributions to) EQT
|
$
|
—
|
|
|
$
|
20,234
|
|
|
$
|
(15,179
|
)
|
(a)
|
The expenses for which EQM reimburses EQT and its subsidiaries may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis, and EQM is unable to estimate what those expenses would be on a stand-alone basis. These amounts include the recast impact of the October 2016 Acquisition and NWV Gathering Acquisition as they represent the total amounts allocated to EQM by EQT for the periods presented.
|
(b)
|
For the year ended
December 31, 2017
, other income included equity income from the MVP Joint Venture of
$22.2 million
. For the year ended
December 31, 2016
, other income included distributions received from EES of
$8.3 million
and equity income from the MVP Joint Venture of
$9.9 million
. For the year ended
December 31, 2015
, other income included equity income from the MVP Joint Venture of
$2.4 million
. See Note 6.
|
(c)
|
The distributions to the EQM General Partner are based on the period to which the distributions relate and not the period in which the distributions were declared and paid. For example, for the year ended
December 31, 2017
, total distributions to the EQM General Partner included the cash distribution declared on
January 18, 2018
related to the fourth quarter
2017
of
$1.025
per common unit and the amounts related to its general partner interest and IDRs.
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands)
|
||||||
Accounts receivable – affiliate
|
$
|
103,304
|
|
|
$
|
81,358
|
|
Due to related party
|
31,673
|
|
|
19,027
|
|
||
Investment in unconsolidated entity
|
460,546
|
|
|
184,562
|
|
||
Preferred Interest in EES (see Note 1)
|
$
|
119,127
|
|
|
$
|
123,293
|
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands)
|
||||||
Current assets
|
$
|
330,271
|
|
|
$
|
53,959
|
|
Noncurrent assets
|
747,728
|
|
|
361,820
|
|
||
Total assets
|
$
|
1,077,999
|
|
|
$
|
415,779
|
|
|
|
|
|
||||
Current liabilities
|
$
|
65,811
|
|
|
$
|
10,149
|
|
Equity
|
1,012,188
|
|
|
405,630
|
|
||
Total liabilities and equity
|
$
|
1,077,999
|
|
|
$
|
415,779
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
AFUDC - equity
|
$
|
32,054
|
|
|
$
|
16,315
|
|
|
$
|
3,576
|
|
Net interest income
|
16,674
|
|
|
5,206
|
|
|
1,143
|
|
|||
Net income
|
$
|
48,728
|
|
|
$
|
21,521
|
|
|
$
|
4,719
|
|
|
|
Total Quarterly
Distribution per |
|
Marginal Percentage Interest in
Distributions
|
||
|
|
Unit Target Amount
|
|
Unitholders
|
|
General Partner
|
Minimum Quarterly Distribution
|
|
$0.35
|
|
98.2%
|
|
1.8%
|
First Target Distribution
|
|
Above $0.3500 up to $0.4025
|
|
98.2%
|
|
1.8%
|
Second Target Distribution
|
|
Above $0.4025 up to $0.4375
|
|
85.2%
|
|
14.8%
|
Third Target Distribution
|
|
Above $0.4375 up to $0.5250
|
|
75.2%
|
|
24.8%
|
Thereafter
|
|
Above $0.5250
|
|
50.2%
|
|
49.8%
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Principal
|
|
Carrying Value
(a)
|
|
Fair
Value (b) |
|
Principal
|
|
Carrying Value
(a)
|
|
Fair
Value (b) |
||||||||||||
|
|
(Thousands)
|
||||||||||||||||||||||
$1 Billion Facility
|
|
$
|
180,000
|
|
|
$
|
180,000
|
|
|
$
|
180,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
364-Day Facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
4.00% Senior Notes due 2024
|
|
500,000
|
|
|
494,939
|
|
|
504,110
|
|
|
500,000
|
|
|
494,170
|
|
|
493,125
|
|
||||||
4.125% Senior Notes due 2026
|
|
500,000
|
|
|
492,413
|
|
|
501,990
|
|
|
500,000
|
|
|
491,562
|
|
|
488,460
|
|
||||||
Total debt
|
|
$
|
1,180,000
|
|
|
$
|
1,167,352
|
|
|
$
|
1,186,100
|
|
|
$
|
1,000,000
|
|
|
$
|
985,732
|
|
|
$
|
981,585
|
|
(a)
|
Carrying value of the senior notes represents principal amount less unamortized debt issuance costs and debt discounts.
|
(b)
|
See Note 1 for a discussion of fair value measurements.
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Thousands)
|
||||||
Regulatory assets:
|
|
|
|
|
|||
Deferred taxes
(a)
|
$
|
13,076
|
|
|
$
|
13,901
|
|
Other recoverable costs
(b)
|
4,754
|
|
|
5,013
|
|
||
Total regulatory assets
|
$
|
17,830
|
|
|
$
|
18,914
|
|
|
|
|
|
||||
Regulatory liabilities:
|
|
|
|
||||
Deferred taxes
(a)
|
$
|
10,488
|
|
|
$
|
—
|
|
On-going post-retirement benefits other than pensions
(c)
|
7,724
|
|
|
6,744
|
|
||
Other reimbursable costs
|
860
|
|
|
715
|
|
||
Total regulatory liabilities
|
$
|
19,072
|
|
|
$
|
7,459
|
|
(a)
|
The regulatory asset for deferred taxes primarily related to deferred income taxes recoverable through future rates on a historical deferred tax position and the equity component of AFUDC. The regulatory liability for deferred taxes relates to a revaluation of the historical difference between the regulatory and tax bases of regulated property, plant and equipment. EQM expects to recover the amortization of the deferred tax positions ratably over the corresponding life of the underlying assets that created the differences. Taxes on the equity component of AFUDC and the offsetting deferred income taxes will be collected through rates over the depreciable lives of the long-lived assets to which they relate.
|
(b)
|
Regulatory assets associated with other recoverable costs primarily related to the costs associated with the pension termination discussed in Note 14.
|
(c)
|
EQM defers expenses for on-going post-retirement benefits other than pensions which are subject to recovery in approved rates. The regulatory liability reflects lower cumulative actuarial expenses than the amounts recovered through rates.
|
|
Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Thousands)
|
||||||
Tax at statutory rate
|
$
|
191,835
|
|
|
$
|
153,435
|
|
Partnership income not subject to income taxes
|
(182,455
|
)
|
|
(135,324
|
)
|
||
State income taxes
|
623
|
|
|
800
|
|
||
Regulatory assets
|
132
|
|
|
(35,685
|
)
|
||
Other
|
12
|
|
|
33
|
|
||
Income tax expense (benefit)
|
$
|
10,147
|
|
|
$
|
(16,741
|
)
|
|
|
|
|
||||
Effective tax rate
|
1.9
|
%
|
|
(3.8
|
)%
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
(Thousands, except per unit amounts)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
|
$
|
203,426
|
|
|
$
|
198,966
|
|
|
$
|
207,193
|
|
|
$
|
224,511
|
|
Operating income
|
|
145,113
|
|
|
141,092
|
|
|
145,506
|
|
|
148,997
|
|
||||
Net income
|
|
$
|
143,196
|
|
|
$
|
139,139
|
|
|
$
|
142,938
|
|
|
$
|
146,631
|
|
Net income per limited partner unit:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
1.36
|
|
|
$
|
1.27
|
|
|
$
|
1.28
|
|
|
$
|
1.28
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenues
|
|
$
|
185,786
|
|
|
$
|
178,042
|
|
|
$
|
176,772
|
|
|
$
|
195,014
|
|
Operating income
|
|
137,120
|
|
|
129,029
|
|
|
126,210
|
|
|
134,590
|
|
||||
Net income
|
|
$
|
136,735
|
|
|
$
|
131,859
|
|
|
$
|
133,660
|
|
|
$
|
135,700
|
|
Net income per limited partner unit:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
1.39
|
|
|
$
|
1.27
|
|
|
$
|
1.23
|
|
|
$
|
1.31
|
|
(a)
|
Quarterly net income per limited partner unit amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding and changes in outstanding units.
|
Name
|
|
Age
|
|
Position with EQT Midstream Services, LLC
|
J.J. Ashcroft III
|
|
45
|
|
Director, Senior Vice President and Chief Operating Officer
|
J.M. Bott
|
|
55
|
|
Director
|
M.A. Bryson
|
|
71
|
|
Director
|
L.B. Gardner
|
|
60
|
|
Director
|
R.J. McNally
|
|
47
|
|
Director, Senior Vice President and Chief Financial Officer
|
D.L. Porges
|
|
60
|
|
Chairman
|
S.T. Schlotterbeck
|
|
52
|
|
Director, President and Chief Executive Officer
|
J.S. Smith
|
|
45
|
|
Chief Accounting Officer
|
L.E. Washington
|
|
50
|
|
Director
|
•
|
Steven T. Schlotterbeck, President and Chief Executive Officer;
|
•
|
Robert J. McNally, Senior Vice President and Chief Financial Officer;
|
•
|
Jeremiah J. Ashcroft, III, Senior Vice President and Chief Operating Officer;
|
•
|
Jimmi Sue Smith, Chief Accounting Officer;
|
•
|
David L. Porges, Chairman and former President and Chief Executive Officer;
|
•
|
Randall L. Crawford, former Executive Vice President and Chief Operating Officer; and
|
•
|
M. Elise Hyland, former Senior Vice President and Chief Operating Officer.
|
•
|
to help establish base salary and target annual and long-term incentives;
|
•
|
to ensure that the total direct compensation (base salary and target annual and long-term incentives) is competitive; and
|
•
|
in measuring relative company performance for some of EQT’s long-term incentive programs.
|
•
|
providing strong oversight for accounting disclosure and control systems as evidenced by the lack of significant internal control or financial reporting deficiencies;
|
•
|
effective implementation of new applicable accounting standards;
|
•
|
overseeing and coordinating public filings for four pubic registrants; and
|
•
|
strategic thinking and financial integration efforts concerning the acquisitions during the year.
|
TYPE OF AWARD
|
PERCENT OF AWARDED VALUE
|
RATIONALE
|
EQT 2017 Restricted Share Unit Awards
|
25%
|
EQT 2017 restricted share unit awards are a strong retention tool for executives that also align their interests with the long-term interests of shareholders, though such awards contain less leverage than options and performance units.
|
EQT 2017 Incentive PSU Program
|
25%
|
EQT 2017 Incentive PSU Program performance units drive long-term value directly related to EQT share performance but allow for the delivery of some value to the holder, assuming relative performance, even if EQT’s share price declines. The EQT MDC Committee believes that performance units have stronger retention value than options but less leverage in a rising share price environment. The performance metrics for this program are total shareholder return relative to the 2017 industry peer group of companies and absolute natural gas sales volume growth, in each case over the three year performance period.
|
EQT 2017 Value Driver PSU Program
|
50%
|
EQT 2017 Value Driver PSU Program performance units drive the focus of the executive on activities aligned with EQT’s business plan and on EQT, business unit, and individual value drivers, which activities are critical to EQT’s long-term success. The performance metric for this program is adjusted 2017 EQT EBITDA compared to business plan.
|
TYPE OF AWARD
|
PERCENT OF AWARDED VALUE
|
RATIONALE
|
EQT 2018 Stock Options
|
25%
|
EQT 2018 stock options encourage executives to focus broadly on behaviors that the EQT MDC Committee believes should lead to a sustained long-term increase in the price of EQT shares, which benefits EQT shareholders.
|
EQT 2018 Restricted Share Awards
|
25%
|
EQT 2018 restricted share awards are a strong retention tool for executives that also align their interests with the long-term interests of shareholders, though such awards contain less leverage than options and performance units. The EQT MDC Committee retained this element in the long-term incentive program design for 2018 after considering market data showing continued prevalence of restricted shares as a retention tool used by many members of the 2017 industry peer group.
|
EQT 2018 Incentive PSU Program
|
50%
|
EQT 2018 Incentive PSU Program performance units drive long-term value directly related to EQT production efficiency by using operating efficiency, development efficiency, and return on capital employed, as well as total shareholder return relative to the 2018 industry peer group of companies, as performance metrics. This reflects a significant change from prior years where the comparable performance program focused on relative total shareholder return performance and absolute natural gas sales volume growth. The EQT MDC Committee believes that performance units have stronger retention value than options but less leverage in a rising stock price environment. If earned, the awards to EQT executive officers are expected to vest and be settled in EQT common stock.
|
|
|
PERCENTAGE OF TOTAL DIRECT COMPENSATION FOR 2017
|
||
EXECUTIVE OFFICER
|
|
FIXED (1)
|
|
AT-RISK (2)
|
S.T. Schlotterbeck
|
|
23%
|
|
77%
|
R.J. McNally
|
|
27%
|
|
73%
|
J.J. Ashcroft
(3)
|
|
99%
|
|
1%
|
J.S. Smith
|
|
38%
|
|
62%
|
(1)
|
This column reflects each of the continuing named executive officer’s base salary earned during 2017 (as shown for 2017 in the "Salary" column of the Summary Compensation Table), restricted share and restricted unit awards (a portion of the amount shown for 2017 in the "Stock Awards" column of the Summary Compensation Table) and, in the case of Mr. Ashcroft, his guaranteed bonus (as shown for 2017 in the "Bonus" columns of the Summary Compensation Table), as a percentage of the sum of the executive's total direct compensation for 2017 set forth in the Summary Compensation Table.
|
(2)
|
This column reflects each continuing named executive officer's non-equity incentive plan compensation and equity compensation for 2017 (as shown for 2017 in the "Non-Equity Incentive Plan Compensation," "Stock Awards" (excluding the restricted share and restricted unit portion of the named executive officer's compensation) and "Option Awards" columns of the Summary Compensation Table), as a percentage of the sum of the executive's total direct compensation for 2017 set forth in the Summary Compensation Table.
|
NAME AND PRINCIPAL POSITION
|
YEAR
|
SALARY
|
BONUS
|
STOCK AWARDS
|
OPTION AWARDS
|
NON-EQUITY
INCENTIVE PLAN COMPENSATION |
ALL OTHER
COMPENSATION |
TOTAL
|
|||||||
|
($) (1)
|
($) (2)
|
($) (3)
|
($) (4)
|
($) (5)
|
($) (6)
|
($)
|
||||||||
S.T. Schlotterbeck
President and Chief Executive Officer
|
2017
|
703,945
|
|
—
|
|
4,208,670
|
|
1,042,944
|
|
2,000,000
|
|
250,926
|
|
8,206,485
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
R.J. McNally Senior Vice President and Chief Financial Officer
|
2017
|
466,238
|
|
—
|
|
2,072,314
|
|
511,108
|
|
725,000
|
|
223,157
|
|
3,997,817
|
|
2016
|
323,550
|
|
500,000
|
|
3,008,725
|
|
692,265
|
|
660,000
|
|
53,837
|
|
5,238,377
|
|
|
|
|
|
|
|
|
|
|
||||||||
J.J. Ashcroft III
Senior Vice President and Chief Operating Officer |
2017
|
194,202
|
|
500,000
|
|
2,150,498
|
|
—
|
|
—
|
|
49,222
|
|
2,893,922
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
J.S. Smith
Chief Accounting Officer |
2017
|
242,249
|
|
—
|
|
403,698
|
|
—
|
|
250,000
|
|
28,594
|
|
924,541
|
|
2016
|
214,298
|
|
—
|
|
299,280
|
|
—
|
|
230,000
|
|
29,969
|
|
773,547
|
|
|
|
|
|
|
|
|
|
|
||||||||
D.L. Porges
Former President and Chief Executive Officer |
2017
|
850,000
|
|
500,000
|
|
—
|
|
—
|
|
—
|
|
402,083
|
|
1,752,083
|
|
2016
|
850,000
|
|
—
|
|
4,926,468
|
|
1,133,118
|
|
2,500,000
|
|
369,062
|
|
9,778,648
|
|
|
2015
|
850,000
|
|
1,000,000
|
|
6,690,025
|
|
1,072,610
|
|
2,100,000
|
|
393,613
|
|
12,106,248
|
|
|
R.L. Crawford Former Executive Vice President and Chief Operating Officer
|
2017
|
93,146
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,615,280
|
|
3,708,426
|
|
2016
|
463,501
|
|
—
|
|
1,524,254
|
|
350,658
|
|
940,000
|
|
217,021
|
|
3,495,434
|
|
|
2015
|
460,905
|
|
500,000
|
|
2,936,499
|
|
471,630
|
|
900,000
|
|
200,457
|
|
5,469,491
|
|
|
M.E. Hyland
Former Senior Vice President and Chief Operating Officer |
2017
|
430,908
|
|
—
|
|
1,833,664
|
|
319,140
|
|
545,700
|
|
132,291
|
|
3,261,703
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
(1)
|
Each named executive officer's annual base salary is paid over 26 equal pay periods each year.
|
(2)
|
The amounts for 2017 in this column reflect Messrs. Ashcroft and Porges’ bonuses for 2017. See "Ashcroft and Porges Bonuses" under the caption "Narrative Disclosure to Summary Compensation Table and 2017 Grants of Plan Based Awards Table" below for further discussion Messrs. Ashcroft and Porges’ bonuses.
|
(3)
|
This column reflects the aggregate grant date fair values determined in accordance with FASB ASC Topic 718 using the assumptions described in Note 18 to EQT's Consolidated Financial Statements, which is included in EQT's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 15, 2018. Pursuant to SEC rules, the amounts shown in the Summary Compensation Table for awards subject to performance conditions are based on the probable outcome as of the date of grant and exclude the impact of estimated forfeitures. Assuming, instead, that the highest level of performance conditions would be achieved, the grant date fair values of the awards granted in 2017 would have been $5,268,171 for Mr. Schlotterbeck; $2,598,107 for Mr. McNally; $753,174 for Ms. Smith; and $2,601,221 for Ms. Hyland.
|
(4)
|
This column reflects the grant date fair values of EQT stock option awards granted on January 1, 2015, January 1, 2016, January 1, 2017, and March 1, 2017 calculated using a Black-Scholes option pricing model using the assumptions described in Note 18 to EQT's Consolidated Financial Statements, which is included in EQT's Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 15, 2018.
|
(5)
|
This column reflects the dollar value of annual incentive compensation earned under the EQT Executive STIP (as defined and described under the caption "Narrative Disclosure to Summary Compensation Table and 2017 Grants of Plan-Based Awards Table" below) for
|
(6)
|
This column includes the dollar value of premiums paid by EQT for group life, accidental death and dismemberment insurance, EQT's contributions to the 401(k) plan and the 2006 Payroll Deduction and Contribution Program, perquisites, and in the case of Mr. Crawford, payments required under his transition agreement in connection with his termination of employment for good reason. For 2017, these amounts were as follows:
|
|
|
INSURANCE
|
|
401(K)
CONTRIBUTIONS |
|
2006
PAYROLL DEDUCTION AND CONTRIBUTION PROGRAM |
|
OTHER
|
|
PERQUISITES
(SEE BELOW) |
|
TOTAL
|
||||||
NAME
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
||||||
S.T. Schlotterbeck
|
|
1,710
|
|
|
24,000
|
|
|
182,055
|
|
|
—
|
|
|
43,161
|
|
|
250,926
|
|
R.J. McNally
|
|
1,083
|
|
|
18,000
|
|
|
90,261
|
|
|
—
|
|
|
113,813
|
|
|
223,157
|
|
J.J. Ashcroft III
|
|
505
|
|
|
18,000
|
|
|
—
|
|
|
—
|
|
|
30,717
|
|
|
49,222
|
|
J.S. Smith
|
|
554
|
|
|
18,000
|
|
|
—
|
|
|
—
|
|
|
10,040
|
|
|
28,594
|
|
D.L. Porges
|
|
1,938
|
|
|
16,200
|
|
|
327,200
|
|
|
—
|
|
|
56,745
|
|
|
402,083
|
|
R.L. Crawford
|
|
1,058
|
|
|
18,000
|
|
|
103,400
|
|
|
3,465,108
|
|
|
27,714
|
|
|
3,615,280
|
|
M.E. Hyland
|
|
1,026
|
|
|
24,000
|
|
|
60,682
|
|
|
—
|
|
|
46,583
|
|
|
132,291
|
|
•
|
For each executive (except Ms. Smith) an amount intended to cover the annual cost of acquiring, maintaining and insuring a car.
|
•
|
For each executive (except Ms. Smith) the entire cost of country and dining club dues, although EQT believes that only a portion of the cost represents a perquisite. For Mr. McNally this amount includes $69,859 for country club initiation fees and dues.
|
•
|
The actual cost to EQT of providing to each executive financial planning and tax preparation services.
|
•
|
The actual cost to EQT for providing an executive physical benefit, which includes preferred access to healthcare professionals and related services for each named executive officer and, in the case of each executive (except Ms. Smith), their spouses.
|
•
|
For Messers. Schlotterbeck, Ashcroft, Porges, and Crawford, this amount also includes the actual cost to EQT in connection with travel assistance services procured by EQT for the benefit of the executives and their families.
|
•
|
For Mr. McNally this amount includes the cost of his family accompanying him on a business flight chartered by EQT.
|
•
|
For Mr. Ashcroft this amount includes expenses related to his relocation to Pittsburgh in excess of the amount generally available to employees.
|
|
|
|
|
ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS
|
ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS
|
ALL OTHER STOCK AWARDS; NUMBER OF SHARES OF STOCK OR UNITS
|
ALL OTHER OPTION AWARDS; NUMBER OF SECURITIES UNDERLYING OPTIONS
|
EXERCISE OR BASE PRICE OF OPTION AWARDS
|
GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS
|
||||||||||||||||
NAME
|
TYPE OF AWARD
|
GRANT DATE
|
APPROVAL DATE
|
THRESHOLD
|
TARGET
|
MAXIMUM
|
THRESHOLD
|
TARGET
|
MAXIMUM
|
||||||||||||||||
|
(1)
|
|
|
($)
|
($) (2)
|
($) (2)
|
(#)
|
(#) (3)
|
(#) (3)
|
(#) (4)
|
(#)
|
($/SH)
|
($)
|
||||||||||||
S.T. Schlotterbeck
|
ESTIP
|
—
|
|
—
|
|
—
|
|
850,000
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
PSU
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,410
|
|
103,230
|
|
—
|
|
—
|
|
—
|
|
3,083,136
|
|
|
SO
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58,200
|
|
65.40
|
|
1,042,944
|
|
|
RS
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,210
|
|
—
|
|
—
|
|
1,125,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
R. J. McNally
|
ESTIP
|
—
|
|
—
|
|
—
|
|
356,250
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
PSU
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15,300
|
|
45,900
|
|
—
|
|
—
|
|
—
|
|
1,370,880
|
|
|
PSU
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,670
|
|
5,010
|
|
—
|
|
—
|
|
—
|
|
149,632
|
|
|
SO
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,900
|
|
65.40
|
|
464,128
|
|
|
SO
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,900
|
|
59.89
|
|
46,980
|
|
|
RS
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,650
|
|
—
|
|
—
|
|
500,310
|
|
|
RS
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
840
|
|
—
|
|
—
|
|
51,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
J.J. Ashcroft, III
|
RS
|
8/7/2017
|
|
7/28/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,430
|
|
—
|
|
—
|
|
2,150,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
J.S. Smith
|
ESTIP
|
—
|
|
—
|
|
—
|
|
102,360
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
PSU
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,440
|
|
4,320
|
|
—
|
|
—
|
|
—
|
|
121,824
|
|
|
RS
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,440
|
|
—
|
|
—
|
|
94,176
|
|
|
VDA
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,870
|
|
8,610
|
|
—
|
|
—
|
|
—
|
|
187,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
M.E. Hyland
|
ESTIP
|
—
|
|
—
|
|
—
|
|
337,500
|
|
5,000,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
PSU
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,600
|
|
4,800
|
|
—
|
|
—
|
|
—
|
|
135,360
|
|
|
PSU
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,510
|
|
34,530
|
|
—
|
|
—
|
|
—
|
|
1,031,296
|
|
|
SO
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,700
|
|
59.89
|
|
319,140
|
|
|
RS
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,600
|
|
—
|
|
—
|
|
104,640
|
|
|
RS
|
3/1/2017
|
|
2/7/2017
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,760
|
|
—
|
|
—
|
|
353,088
|
|
|
VDA
|
1/1/2017
|
|
12/6/2016
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,200
|
|
9,600
|
|
—
|
|
—
|
|
—
|
|
209,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Type of Award:
|
(2)
|
These columns reflect the annual incentive award target and maximum amounts payable under the EQT Executive STIP for the 2017 plan year. Under the EQT Executive STIP, a formula based on adjusted 2017 EQT EBITDA compared to EQT's business plan establishes the maximum payment from which the EQT MDC Committee typically exercises its discretion downward in determining the actual payment. The payout amounts could range from no payment, to the percentage of base salary identified as the target annual incentive award (target), to $5 million (maximum). See "Non-Equity Incentive Plan Compensation - EQT Executive Short-Term Incentive Plan (EQT Executive STIP)" under the caption "Narrative Disclosure to Summary Compensation Table and 2017 Grants of Plan-Based Awards Table" below for further discussion of the EQT Executive STIP for the 2017 plan year.
|
(3)
|
These columns reflect the target and maximum number of units payable under the 2017 Incentive PSU Program and the 2017 Value Driver PSU Program. Under the 2017 Incentive PSU Program, the performance measures are EQT's total shareholder return (TSR) over the period January 1, 2017 through December 31, 2019, as ranked among the comparably measured TSR of an industry peer group, and EQT's compound annual production sales volume growth. The payout amounts for the 2017 Incentive PSU Program could range from 0% of units granted, to 100% of units granted (target), to 300% of units granted (maximum), dependent upon the satisfaction of the performance measures over the performance period. Under the 2017 Value Driver PSU Program, the performance metric is adjusted 2017 EQT EBITDA compared to EQT's business plan. The 2017 Value Driver PSU Program payout amounts could range from 0% of awards granted, to 100% of awards granted (target), to 300% of awards granted (maximum), dependent upon adjusted 2017 EQT EBITDA compared to EQT's 2017 business plan. See "Stock Awards - EQT 2017 Incentive Performance Share Unit Program (2017 Incentive PSU
|
(4)
|
This column reflects the number of time-based restricted EQT shares and/or EQT share units granted to the named executive officers. See "Stock Awards - 2017 EQT Restricted Share and Unit Awards" under the caption "Narrative Disclosure to Summary Compensation Table and 2017 Grants of Plan-Based Awards Table" below for further discussion of the 2017 EQT Restricted Share and Unit Awards.
|
ADJUSTED 2017 EQT EBITDA
COMPARED TO
BUSINESS PLAN
|
|
PERCENTAGE OF ADJUSTED 2017
EQT EBITDA AVAILABLE FOR
EQT EXECUTIVE OFFICER 2017
ANNUAL INCENTIVE AWARDS
|
At or above plan
|
|
2%
|
5% below plan
|
|
1.5%
|
25% below plan
|
|
1%
|
Greater than 25% below plan
|
|
No bonus
|
•
|
EQT's TSR over the period January 1, 2017 through December 31, 2019, as ranked among the comparably measured TSR of an industry peer group; and
|
•
|
EQT's compound annual production sales volume growth over the performance period.
|
•
|
no payout if the adjusted 2017 EQT EBITDA was less than EQT's business plan; or
|
•
|
three times the number of target awards granted if the adjusted 2017 EQT EBITDA equaled or exceeded EQT's business plan, subject to the EQT MDC Committee's discretion to determine that a lower performance multiple applied. In exercising its discretion the EQT MDC Committee was to consider and be guided by performance on EQT, business unit, and individual value drivers.
|
OPTION AWARDS
|
EQUITY AWARDS
|
|||||||||||||||
|
NUMBER OF
SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE |
NUMBER OF
SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE |
OPTION
EXERCISE PRICE |
OPTION
EXPIRATION DATE |
NUMBER OF
SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED |
MARKET
VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED |
EQUITY
INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED |
EQUITY
INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED |
||||||||
|
(#)
|
(#) (1)
|
($)
|
|
(#) (2)
|
($) (3)
|
(#) (4)
|
($) (5)
|
||||||||
S.T. Schlotterbeck
|
44,800
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
17,245
|
|
981,585
|
|
74,718
|
|
4,252,949
|
|
44,100
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
130,005
|
|
7,399,885
|
|
|
26,300
|
|
—
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
103,440
|
|
5,887,805
|
|
|
—
|
|
28,200
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
48,400
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
58,200
|
|
65.40
|
|
1/1/2027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
R.J. McNally
|
—
|
|
39,900
|
|
63.33
|
|
1/1/2026
|
|
7,665
|
|
436,292
|
|
106,941
|
|
6,087,082
|
|
—
|
|
25,900
|
|
65.40
|
|
1/1/2027
|
|
841
|
|
47,870
|
|
45,993
|
|
2,617,922
|
|
|
—
|
|
2,900
|
|
59.89
|
|
3/1/2027
|
|
—
|
|
—
|
|
5,019
|
|
285,681
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
J.J. Ashcroft, III
|
—
|
|
—
|
|
—
|
|
—
|
|
34,464
|
|
1,961,691
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
J.S. Smith
|
—
|
|
—
|
|
—
|
|
—
|
|
2,506
|
|
142,642
|
|
2,082
|
|
118,507
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,443
|
|
82,136
|
|
3,012
|
|
171,443
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,433
|
|
81,566
|
|
4,329
|
|
246,407
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,628
|
|
491,106
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
D.L. Porges
|
105,800
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
—
|
|
—
|
|
143,010
|
|
8,140,129
|
|
92,400
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
210,141
|
|
11,961,226
|
|
|
47,600
|
|
—
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
53,900
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
78,200
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
R.L. Crawford
|
44,800
|
|
—
|
|
54.79
|
|
1/1/2022
|
|
—
|
|
—
|
|
62,772
|
|
3,572,982
|
|
44,100
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
—
|
|
—
|
|
65,019
|
|
3,700,881
|
|
|
24,600
|
|
—
|
|
89.78
|
|
1/1/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
23,700
|
|
—
|
|
75.70
|
|
1/1/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
24,200
|
|
—
|
|
52.13
|
|
1/1/2026
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
M.E. Hyland
|
6,100
|
|
—
|
|
58.98
|
|
1/1/2023
|
|
1,603
|
|
91,243
|
|
14,448
|
|
822,380
|
|
—
|
|
19,700
|
|
59.89
|
|
3/1/2027
|
|
5,769
|
|
328,371
|
|
16,926
|
|
963,428
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,462
|
|
481,657
|
|
4,809
|
|
273,728
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34,584
|
|
1,968,521
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,618
|
|
547,457
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The options reflected in this column are EQT options which vest according to the following schedule: the options expiring in 2025 vested on January 1, 2018, the options expiring on January 1, 2026 will vest on January 1, 2019, the options expiring on January 1, 2027 will vest on January 1, 2020, and the options expiring on March 1, 2027 will vest on March 1, 2020, except that Mr. Crawford's outstanding unvested options vested pursuant to his transition agreement. The vesting of option awards may accelerate.
|
(2)
|
This column reflects (i) Ms. Smith's 2016 EQT restricted share unit award (including accrued dividends); (ii) the 2017 EQT Restricted Share and Unit Awards (including accrued dividends) and (iii) with respect to Mses. Smith and Hyland, the second tranche of the EQT Corporation 2016 Value Driver Performance Share Unit Award Program (2016 Value Driver PSU Program) (including accrued dividends). Ms. Smith's 2016 EQT restricted share unit award was granted on September 14, 2016 and is expected to vest on September 14, 2019, contingent upon continued service through such date. The 2017 EQT Restricted Share and Unit Awards were granted on January 1, March 1, and August 7, 2017 and are expected to vest on January 1, March 1, and August 7, 2020, respectively, contingent upon continued service through such dates. Performance awards under the EQT Corporation 2016 Value Driver PSU Program were confirmed as of January 31, 2017, and the second tranche of such awards converted to time-based restricted share units and vest upon payment which is expected to occur in the first quarter of 2018 contingent upon continued service through the payment date. The vesting of Ms. Smith's 2016 EQT restricted share unit award, the 2017 EQT Restricted Share and Unit Awards and the second tranche of the EQT Corporation 2016 Value Driver PSU Program may accelerate. See "Potential Payments Upon Termination or Change of Control" below for a discussion of, among other things, circumstances under which the vesting of an award will accelerate.
|
(3)
|
This column reflects the payout value at December 31, 2017 of Ms. Smith's 2016 EQT restricted share unit award; the 2017 EQT Restricted Share and Unit Awards and the second tranche of the 2016 Value Driver PSU Program (including in each case accrued dividends) determined by multiplying the number of shares or units, as applicable, shown in the column to the left by $56.92, the closing price of EQT's common stock on December 29, 2017. The actual payout value depends upon EQT's stock price: (i) on August 31, 2019 for Ms. Smith’s 2016 EQT restricted share unit award; (ii) December 31, 2019 for the 2017 EQT Restricted Unit Awards; and (iii) the day prior to vesting for the 2017 EQT Restricted Share Awards.
|
(4)
|
This column reflects performance units awarded but that had not yet vested at December 31, 2017 pursuant to the 2015 Executive Performance Incentive Program (2015 Incentive PSU Program), the 2016 Incentive Performance Share Unit Program (2016 Incentive PSU Program), the 2017 Incentive PSU Program, and the 2017 Value Driver PSU Program (including in each case accrued dividends). The number of performance units under all programs reflect maximum award levels because, through December 31, 2017, payout was projected above the target level for each program. Awards under the 2015 Incentive PSU Program and the first tranche of the 2017 Value Driver PSU Program will vest upon payment which is expected to occur in the first quarter of 2018, contingent upon continued service through such date. Prior to such date, payment of such awards may accelerate. Awards under the 2016 Incentive PSU Program, the 2017 Incentive PSU Program and the second tranche of the 2017 Value Driver PSU Program do not vest until payment following the end of the respective performance periods, contingent upon continued service through such dates, and such vesting may accelerate. See "Potential Payments Upon Termination or Change of Control" below for a discussion of, among other things, circumstances under which the vesting of an award will accelerate.
|
(5)
|
This column reflects the payout values at December 31, 2017 of unearned performance units granted under the 2015 Incentive PSU Program, the 2016 Incentive PSU Program, the 2017 Incentive PSU Program, and the 2017 Value Driver PSU Program (including in each case accrued dividends). The payout values are determined by multiplying the number of units as shown in the column to the left by $56.92, the closing price of EQT's common stock on December 29, 2017. The actual payout values under the programs depends upon, among other things, EQT's actual performance through the end of the applicable performance periods and EQT's closing stock price on: (i) the day prior to vesting for the 2015 Incentive PSU Program and the portions of the 2016 Incentive PSU Program and the 2017 Incentive PSU Program that are distributed in EQT shares; (ii) December 29, 2017 with respect to the first tranche of the 2017 Value Driver PSU Program; (iii) December 31, 2018 with respect to the second tranche of the 2017 Value Driver PSU Program and the portion of the 2016 Incentive PSU Program that is distributed in cash; and (iv) December 31, 2019 for the portion of the 2017 Incentive PSU Program that is distributed in cash.
|
|
|
OPTION AWARDS
|
|
STOCK AWARDS
|
||||||||
|
|
NUMBER OF EQT SHARES ACQUIRED ON EXERCISE
|
|
VALUE REALIZED ON EXERCISE
|
|
NUMBER OF EQT SHARES/EQM UNITS ACQUIRED ON VESTING
|
|
VALUE REALIZED ON VESTING
|
||||
NAME
|
|
(#)
|
|
($) (1)
|
|
(#) (2)
|
|
($) (3)
|
||||
S.T. Schlotterbeck
|
|
38,500
|
|
|
391,160
|
|
|
30,618
|
|
|
1,905,947
|
|
R.J. McNally
|
|
—
|
|
|
—
|
|
|
7,914
|
|
|
457,093
|
|
J.J. Ashcroft, III
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
J.S. Smith
|
|
—
|
|
|
—
|
|
|
4,276
|
|
|
272,067
|
|
D.L. Porges
|
|
76,700
|
|
|
806,884
|
|
|
55,396
|
|
|
3,448,395
|
|
R.L. Crawford
|
|
38,500
|
|
|
475,860
|
|
|
28,575
|
|
|
1,778,792
|
|
M.E. Hyland
|
|
—
|
|
|
—
|
|
|
23,397
|
|
|
1,492,809
|
|
(1)
|
The value realized on exercise is calculated as the difference between the market price of the shares of EQT common stock underlying the options at exercise and the applicable exercise price of those options.
|
(2)
|
This column reflects the aggregate number of performance awards (including accrued dividends) that vested in 2017 under (a) the 2014 Executive Performance Incentive Program (2014 Incentive PSU Program) for Messrs. Schlotterbeck, Porges, and Crawford, and Mses. Smith and Hyland, (b) the first tranche of the 2016 Value Driver PSU Program for Mses. Smith and Hyland, and (c) the second tranche of the 2015 Value Driver Performance Share Unit Award Program (2015 Value Driver PSU Program) for Mses. Smith and Hyland. The performance awards under the 2014 Incentive PSU Program and the second tranche of the 2015 Value Driver PSU Program vested and were distributed in EQT common stock, while first tranche of the 2016 Value Driver PSU Program vested and was distributed in cash. This column also reflects a 2016 restricted share award (including accrued dividends) to Mr. McNally.
|
(3)
|
This column reflects the value realized upon the vesting of awards under the 2014 Incentive PSU Program, the first tranche of the 2016 Value Driver PSU Program, the second tranche of the 2015 Value Driver PSU Program and Mr. McNally's 2016 EQT restricted share award (including in each case accrued dividends). In the case of the 2014 Incentive PSU Program, the second tranche of the 2015 Value Driver PSU Program and Mr. McNally's 2016 EQT restricted share award, the value realized on vesting was calculated based upon the number of awards that vested and the closing price of EQT's common stock on the date of vesting. In the case of the 2016 Value Driver PSU Program, the value realized on vesting was calculated based upon the number of awards that vested and the closing price of EQT's common stock on December 30, 2016.
|
•
|
restrictions on competition (12 months);
|
•
|
restrictions on customer solicitation (12 months); and
|
•
|
restrictions on employee, consultant, vendor or independent contractor recruitment (36 months).
|
•
|
Severance payments
:
|
▪
|
salary continuation for a period of twelve (12) months from the date of termination;
|
▪
|
a lump sum equal to the average annual incentive earned by Ms. Smith for the three (3) full years prior to Ms. Smith's termination date; and
|
▪
|
$25,000.
|
•
|
Benefits payment.
A lump sum cash payment equal to the monthly COBRA rate for family coverage, multiplied by 12.
|
•
|
Vesting of time-based equity awards.
Stock options, restricted stock, restricted stock units and other stock awards with time-based vesting restrictions will become immediately vested and exercisable in full and any restrictions on such awards shall lapse.
|
•
|
Vesting of performance-based equity awards.
Value driver based performance-based equity awards will become immediately vested at target prior to the EQT MDC Committee's confirmation of the performance level and at actual following the EQT MDC Committee's confirmation. All other performance-based equity awards will remain outstanding and will be earned, if at all, based on actual performance through the end of the performance period as if the named executive officer's employment had not been terminated.
|
TERMINATION DATE
|
AWARDED UNITS
|
September 10, 2017 – September 9, 2018
|
25%
|
September 10, 2018 and thereafter
|
50%
|
•
|
the award is not assumed by the surviving entity of the change of control, all time-based vesting restrictions on the 2016 EQT restricted share units lapse;
|
•
|
the award is assumed by the surviving entity of the change of control or EQT is the surviving entity and Ms. Smith's employment is involuntarily terminated or she resigns for good reason within two years after the qualifying change of control, then Ms. Smith's 2016 EQT restricted share unit award will vest as required by Ms. Smith's confidentiality, non-solicitation and non-competition agreement with EQT, which is described above.
|
EXECUTIVE BENEFITS
AND PAYMENTS UPON TERMINATION |
TERMINATION BY EQT WITHOUT CAUSE
($) |
TERMINATION BY EQT FOR CAUSE
($) |
TERMINATION BY EXECUTIVE FOR GOOD REASON
($) |
TERMINATION BY EXECUTIVE WITHOUT GOOD REASON
($) |
DEATH
($) |
DISABILITY
($) |
|||||
Payments under Agreement
|
449,388
|
|
0
|
449,388
|
|
0
|
|
0
|
|
0
|
|
Short-Term Incentive
|
250,000
|
|
0
|
250,000
|
|
250,000
|
|
250,000
|
|
250,000
|
|
Severance Payments
|
116,637
|
|
0
|
0
|
|
0
|
|
0
|
|
0
|
|
Life Insurance
|
0
|
|
0
|
0
|
|
0
|
|
243,000
|
|
0
|
|
Total (excluding long-term incentive)
|
816,025
|
|
0
|
699,388
|
|
250,000
|
|
493,000
|
|
250,000
|
|
Compensation Feature
|
2017
|
2018
|
Annual cash retainer - Board member
|
$50,000
|
$65,000
|
Annual cash retainer - Committee Chair
|
Audit: $15,000
Conflicts: $10,000
|
Audit: $20,000
Conflicts:$10,000
|
Annual cash retainer - Committee member (excluding the chair)
|
Audit: None
Conflicts: None
|
Audit: $5,000
Conflicts: None
|
Meeting fees
|
In person: $1,500
Telephonic: $750
|
Conflicts Committee:
In person: $1,500
Telephonic: $750
All other meetings: None
|
NAME
|
|
FEES EARNED OR PAID IN CASH
($) (1)
|
|
STOCK
AWARDS
($) (2)
|
|
ALL OTHER
COMPENSATION
($) (3)
|
|
TOTAL
($)
|
||||
M.A. Bryson
|
|
105,500
|
|
|
75,146
|
|
|
32,569
|
|
|
213,215
|
|
J.M. Bott
|
|
99,750
|
|
|
75,146
|
|
|
6,065
|
|
|
180,961
|
|
L.E. Washington
|
|
88,000
|
|
|
75,146
|
|
|
9,544
|
|
|
172,690
|
|
(1)
|
Includes annual cash retainer, meeting fees and committee chair fees.
|
(2)
|
This column reflects the aggregate grant date fair values determined in accordance with FASB ASC Topic 718 for the phantom units awarded to each director during
2017
. On January 1,
2017
, the EQM General Partner granted 980 phantom units to each non-employee director. The grant date fair value is computed as the sum of the number of phantom units awarded on the grant date multiplied by the closing price of EQM's common units on the business day prior to the grant date, which closing price was
$76.68
on
December 30, 2016
.
|
(3)
|
This column reflects (i) annual premiums of $43.88 per director paid for life insurance and travel accident insurance policies and (ii) the following matching gifts made to qualifying organizations under the EQT Foundation's Matching Gifts Program: Mr. Bryson - $32,525; Mr. Bott - $6,021; and Ms. Washington - $9,500. The non-employee directors may use a de minimis number of tickets purchased by EQT to attend sporting or other events when such tickets are not otherwise being used for business purposes. The use of such tickets does not result in any incremental costs to EQM.
|
•
|
each of the directors of the EQM General Partner;
|
•
|
each of the named executive officers of the EQM General Partner; and
|
•
|
all directors and executive officers of the EQM General Partner as a group.
|
NAME OF BENEFICIAL OWNER (1)
|
|
EQM COMMON
UNITS BENEFICIALLY OWNED (2) (3) |
|
PERCENTAGE
OF EQM COMMON UNITS BENEFICIALLY OWNED |
|
EQGP COMMON UNITS BENEFICIALLY OWNED (2)
|
|
PERCENTAGE
OF EQGP COMMON UNITS BENEFICIALLY OWNED |
S.T. Schlotterbeck
|
|
7,897
|
|
*
|
|
37,762
|
|
*
|
R.J. McNally
|
|
—
|
|
*
|
|
—
|
|
*
|
J.J. Ashcroft III
|
|
—
|
|
*
|
|
—
|
|
*
|
L.B. Gardner
|
|
9,359
|
|
*
|
|
28,503
|
|
*
|
J.S. Smith
|
|
2,146
|
|
*
|
|
7,538
|
|
*
|
D.L. Porges
|
|
42,148
|
|
*
|
|
56,263
|
|
*
|
J.M. Bott
|
|
10,224
|
|
*
|
|
—
|
|
*
|
M.A. Bryson
(4)
|
|
11,467
|
|
*
|
|
—
|
|
*
|
L.E. Washington
|
|
5,156
|
|
*
|
|
—
|
|
*
|
M.E. Hyland
|
|
5,750
|
|
*
|
|
—
|
|
*
|
R.L. Crawford
(5)
|
|
32,897
|
|
*
|
|
100,000
|
|
*
|
All directors and executive officers as a group (11 individuals)
|
|
127,044
|
|
*
|
|
230,066
|
|
*
|
(1)
|
Unless otherwise indicated, the address for all beneficial owners in this table is c/o EQT Midstream Partners, LP, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222, Attn: Corporate Secretary.
|
(2)
|
This column reflects the number of common units held of record or owned through a bank, broker or other nominee.
|
(3)
|
For Messrs. Bott and Bryson and Ms. Washington, this column includes phantom units, including accrued distributions, to be settled in EQM common units, in the following amounts: Mr. Bott - 8,292 units; Mr. Bryson - 8,292 units; and Ms. Washington - 5,156 units.
|
(4)
|
EQM common units beneficially owned include 2,000 common units that are held in Mrs. Bryson's revocable trust.
|
(5)
|
Mr. Crawford stepped down from his roles with EQT and the EQM General Partner effective February 28, 2017. Information regarding EQM and EQGP common units beneficially owned by Mr. Crawford was provided by Mr. Crawford as of March 1, 2017.
|
Name
|
|
Exercisable
Stock Options (1) |
|
Number of EQT Shares
Beneficially Owned (2) |
|
Percent of
Class (3) |
S.T. Schlotterbeck
(4)
|
|
143,400
|
|
190,798
|
|
*
|
R.J. McNally
|
|
—
|
|
27,389
|
|
*
|
J.J. Ashcroft III
|
|
—
|
|
47,014
|
|
*
|
L.B. Gardner
|
|
33,300
|
|
47,575
|
|
*
|
J.S. Smith
|
|
—
|
|
4,729
|
|
*
|
D.L. Porges
(5)
|
|
299,700
|
|
502,108
|
|
*
|
J.M. Bott
|
|
—
|
|
—
|
|
—
|
M.A. Bryson
|
|
—
|
|
—
|
|
—
|
L.E. Washington
|
|
—
|
|
—
|
|
—
|
M.E. Hyland
|
|
6,100
|
|
19,200
|
|
*
|
R.L. Crawford
(6)
|
|
161,400
|
|
94,363
|
|
*
|
All directors and executive officers as a group (11 individuals)
|
|
643,900
|
|
933,176
|
|
*
|
(1)
|
This column reflects the number of shares of EQT common stock that the executive officers and directors had a right to acquire within 60 days after
February 1, 2018
through the exercise of stock options.
|
(2)
|
This column reflects shares held of record and shares owned through a bank, broker or other nominee, including, for EQT employees, shares owned through EQT's 401(k) plan.
|
(3)
|
This column reflects (i) the sum of the shares beneficially owned and the stock options exercisable within 60 days of
February 1, 2018
, as a percentage of (ii) the sum of EQT's outstanding shares at
February 1, 2018
, and all options exercisable within 60 days of
February 1, 2018
.
|
(4)
|
Shares beneficially owned include 28,012 shares owned by Mr. Schlotterbeck's wife.
|
(5)
|
Shares beneficially owned include 50,000 shares that are held in a trust of which Mr. Porges is a co-trustee and in which he shares voting and investment power.
|
(6)
|
Mr. Crawford stepped down from his roles with EQT and the EQM General Partner effective February 28, 2017. Information regarding EQT shares beneficially owned by Mr. Crawford was provided by Mr. Crawford as of March 1, 2017.
|
NAME OF BENEFICIAL
OWNER
|
|
EQM COMMON UNITS BENEFICIALLY OWNED
|
|
PERCENTAGE OF EQM COMMON UNITS BENEFICIALLY OWNED
|
||
EQT Corporation
(1)
|
|
21,811,643
|
|
|
27.1
|
%
|
625 Liberty Avenue
|
|
|
|
|
|
|
Pittsburgh, PA 15222
|
|
|
|
|
|
|
Tortoise Capital Advisors, L.L.C.
(2)
|
|
7,717,832
|
|
|
9.6
|
%
|
11550 Ash Street, Suite 300
|
|
|
|
|
|
|
Leawood, KS 66211
|
|
|
|
|
|
|
ALPS Advisors, Inc.
(3)
|
|
4,871,408
|
|
|
6.0
|
%
|
1290 Broadway, Suite 1100
|
|
|
|
|
||
Denver, CO 80203
|
|
|
|
|
(1)
|
EQGP held
21,811,643
EQM common units as of
February 1, 2018
. EQT is the ultimate parent company of EQGP and, therefore, may be deemed to beneficially own the units held by EQGP.
|
(2)
|
Information based on a SEC Schedule 13G filed on February 13, 2018 reporting that Tortoise Capital Advisors, L.L.C. has sole voting and dispositive power over 196,950 common units, shared voting power over 6,438,973 common units and shared dispositive power over 7,520,882 common units.
|
(3)
|
Information based on a SEC Schedule 13G filed on February 6, 2018 reporting that ALPS Advisors, Inc. has shared voting and dispositive power over
4,871,408
common units, of which
4,848,639
common units are attributable to Alerian MLP ETF, an investment company to which ALPS Advisors, Inc. furnishes investment advice. Alerian MLP ETF has shared voting and dispositive power with respect to the
4,848,639
common units.
|
PLAN CATEGORY
|
|
NUMBER OF
SECURITIES TO
BE
ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS,
WARRANTS
AND RIGHTS
|
|
WEIGHTED
AVERAGE
EXERCISE PRICE OF
OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
|
|
NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
FUTURE ISSUANCE
UNDER
EQUITY
COMPENSATION
PLANS (EXCLUDING
SECURITIES
REFLECTED IN
COLUMN A)
|
|||
|
|
(A)
|
|
(B)
|
|
(C)
|
|||
Equity Compensation Plans Approved by Unitholders
|
|
—
|
|
|
—
|
|
|
—
|
|
Equity Compensation Plans Not Approved by Unitholders
(1)
|
|
235,733
|
|
|
N/A
|
|
|
1,528,534
|
|
Total
|
|
235,733
|
|
|
N/A
|
|
|
1,528,534
|
|
(1)
|
The Board adopted the 2012 Long-Term Incentive Plan in connection with the IPO of EQM's common units.
|
•
|
EQM's obligation to reimburse EQT and its affiliates for certain direct operating expenses paid on EQM's behalf;
|
•
|
EQM's obligation to reimburse EQT and its affiliates for providing EQM corporate, general and administrative services (the "general and administrative expenses");
|
•
|
EQM's obligation to reimburse EQT and its affiliates for operation and management services pursuant to the operation and management services agreement with EQT, as described below under "Operation and Management Services Agreement" (the "operation and management expenses");
|
•
|
EQT's obligation to indemnify or reimburse EQM for losses or expenses relating to or arising from, among other things, (i) certain plugging and abandonment obligations; (ii) certain bare steel replacement capital expenditures; (iii) certain pipeline safety costs; (iv) certain tax liabilities attributable to periods prior to the IPO; (v) assets previously owned by Equitrans, L.P. (Equitrans) and retained by EQT and its affiliates, including the Sunrise Pipeline; (vi) any claims related to Equitrans' previous ownership of the Big Sandy Pipeline; and (vii) any amounts owed to EQM by a third party that has exercised a contractual right of offset against amounts owed by EQT to such third party;
|
•
|
EQM's obligation to indemnify EQT for losses attributable to (i) EQM's ownership or operation of assets acquired by EQM from EQT at the time of the IPO, except to the extent EQT is obligated to indemnify EQM for such losses pursuant to the operation and management services agreement; and (ii) any amounts owed to EQT by a third party that has exercised a contractual right of offset against amounts owed by EQM to such third party; and
|
•
|
EQM's use of the name "EQT" and related marks.
|
•
|
Plugging and abandonment liabilities.
For a period of ten years after the closing of the IPO, which occurred on July 2, 2012, EQT is required to reimburse EQM for plugging and abandonment expenditures and other expenditures for certain identified wells of EQT and third parties. The reimbursement obligation of EQT with respect to wells owned by third parties is capped at $1.2 million per year.
|
•
|
Bare steel replacement.
EQT is required to reimburse EQM for bare steel replacement capital expenditures in the event that ongoing maintenance capital expenditures (other than capital expenditures associated with plugging and abandonment liabilities to be reimbursed by EQT) exceed $17.2 million (with respect to EQM's assets at the time of the IPO) in any year. If such ongoing maintenance capital expenditures and bare steel replacement capital expenditures exceed $17.2 million during a year, EQT is required to reimburse EQM for the lesser of (i) the amount of bare steel replacement capital expenditures during such year and (ii) the amount by which such ongoing capital expenditures and bare steel replacement capital expenditures exceeds $17.2 million. This bare
|
•
|
Pipeline Safety Cost Tracker Reimbursement.
For a period of five years after the closing of the IPO, EQT was required to reimburse EQM for the amount by which the qualifying pipeline safety costs included in the annual pipeline safety cost tracker filings made by Equitrans with the FERC exceeded the qualifying pipeline safety costs actually recovered each year. This reimbursement obligation expired on July 2, 2017.
|
•
|
Taxes.
Until 60 days after the expiration of any applicable statute of limitations, EQT will indemnify EQM for any income taxes attributable to operations or ownership of the assets prior to the closing of the IPO, including any such income tax liability of EQT and its affiliates that may result from EQM's formation transactions.
|
•
|
Retained liabilities.
EQT is required to indemnify EQM for any liabilities, claims or losses relating to or arising from assets owned or previously owned by EQM and retained by EQT and its affiliates following the closing of the IPO.
|
•
|
Big Sandy Pipeline.
EQT is required to indemnify EQM for any claims related to Equitrans' previous ownership of the Big Sandy Pipeline, which was sold to a third party, including claims arising under the Big Sandy Purchase Agreement.
|
•
|
Contractual Offsets.
EQT is required to indemnify EQM for any amounts owed to EQM by a third party that has exercised a contractual right of offset against amounts owed by EQT to such third party.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Thousands)
|
||||||||||
DESCRIPTION OF REVENUE
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
403,082
|
|
|
$
|
380,164
|
|
|
$
|
321,173
|
|
Transmission and storage
|
$
|
202,016
|
|
|
$
|
171,189
|
|
|
$
|
141,198
|
|
•
|
approved by the Conflicts Committee of the EQM General Partner, although the EQM General Partner is under no obligation to seek such approval;
|
•
|
approved by the vote of a majority of the outstanding common units, excluding any common units owned by the EQM General Partner or any of its affiliates;
|
•
|
determined by the Board to be on terms no less favorable to EQM than those generally being provided to or available from unrelated third parties; or
|
•
|
determined by the Board to be fair and reasonable to EQM, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to EQM.
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Audit fees
(1)
|
$
|
705,000
|
|
|
$
|
843,092
|
|
Audit-related fees
(2)
|
4,500
|
|
|
15,000
|
|
||
Tax fees
|
—
|
|
|
—
|
|
||
All other fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
709,500
|
|
|
$
|
858,092
|
|
(1)
|
Includes fees for the audit of EQM's annual financial statements and internal control over financial reporting, reviews of financial statements included in EQM's quarterly reports on Form 10-Q, and services that are normally provided in connection with statutory and regulatory filings or engagements, including certain attest engagements, comfort letter procedures and consents and for 2016 fees for services associated with EQM acquisitions from EQT.
|
(2)
|
Includes fees for services associated with attest engagements not required by statute or regulation.
|
•
|
Bookkeeping or other services related to the accounting records or financial statements
|
•
|
Financial information systems design and implementation
|
•
|
Appraisal or valuation services, fairness opinions or contribution-in-kind reports
|
•
|
Actuarial services
|
•
|
Internal audit outsourcing services
|
•
|
Management functions
|
•
|
Human resources functions
|
•
|
Broker-dealer, investment adviser or investment banking services
|
•
|
Legal services
|
•
|
Expert services unrelated to the audit
|
•
|
Prohibited tax services
|
(a)
|
1
|
|
Financial Statements
|
Page
Reference
|
|
|
Statements of Consolidated Operations for each of the three years in the period ended December 31, 2017
|
||
|
|
Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 2017
|
||
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
||
|
|
Statements of Consolidated Equity for each of the three years in the period ended December 31, 2017
|
||
|
|
Notes to Consolidated Financial Statements
|
||
|
|
|
|
|
|
2
|
|
Financial Statement Schedules
|
|
|
|
All schedules are omitted since the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the schedules.
|
|
|
|
|
|
|
|
|
3
|
|
Exhibits
|
|
|
|
The exhibits referenced below are filed (or, as applicable, furnished) as part of this Annual Report on Form 10-K.
|
|
Exhibits
|
Description
|
Method of Filing
|
Contribution and Sale Agreement, dated as of March 10, 2015, by and among EQT Midstream Partners, LP, EQT Midstream Services, LLC, EQM Gathering Opco, LLC, EQT Corporation, EQT Gathering, LLC, EQT Energy Supply Holdings, LP, and EQT Energy, LLC. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on March 10, 2015.
|
|
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.
|
Incorporated herein by reference to Exhibit 2.1 to Form 10-Q (#001-35574) for the quarterly period ended March 31, 2017.
|
|
Purchase and Sale Agreement, dated as of October 13, 2016, by and among EQT Corporation, EQT Gathering Holdings, LLC, EQT Gathering, LLC, EQT Midstream Partners, LP, Equitrans Investments, LLC, Equitrans, L.P. and EQM Gathering Opco, LLC. EQT Midstream Partners, LP will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
Incorporated herein by reference to Exhibit 2.1 to Form 8-K (#001-35574) filed on October 13, 2016.
|
|
Certificate of Limited Partnership of EQT Midstream Partners, LP.
|
Incorporated herein by reference to Exhibit 3.1 to Form S-1 Registration Statement (#333-179487) filed on February 13, 2012.
|
|
First Amended and Restated Agreement of Limited Partnership of EQT Midstream Partners, LP, dated as of July 2, 2012.
|
Incorporated herein by reference to Exhibit 3.2 to Form 8-K (#001-35574) filed on July 2, 2012.
|
|
Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of EQT Midstream Partners, LP, dated as of July 24, 2014.
|
Incorporated herein by reference to Exhibit 3.1 to Form 10-Q (#001-35574) for the quarterly period ended June 30, 2014.
|
Exhibits
|
Description
|
Method of Filing
|
First Amendment to Second Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC, dated as of January 21, 2016, by and among MVP Holdco, LLC, US Marcellus Gas Infrastructure, LLC and Mountain Valley Pipeline, LLC. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items was granted by the SEC. The redacted material has been separately filed with the SEC.
|
Incorporated herein by reference to Exhibit 10.2 to Form 10-Q (#001-35574) for the quarterly period ended March 31, 2016.
|
|
Second Amendment to Second Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC, dated as of October 24, 2016, by and among MVP Holdco, LLC, US Marcellus Gas Infrastructure, LLC, WGL Midstream, Inc., Vega Midstream MVP LLC, VED NPI IV, LLC and Mountain Valley Pipeline, LLC. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items was granted by the SEC. The redacted material has been separately filed with the SEC.
|
Incorporated herein by reference to Exhibit 10.25(c) to Form 10-K (#001-35574) for the year ended December 31, 2016.
|
|
Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of September 10, 2016, by and between EQT Corporation and Jimmi Sue Smith.
|
Incorporated herein by reference to Exhibit 10.11 to Form 10-K (#001-35574) for the year ended December 31, 2016.
|
|
Ratio of Earnings to Fixed Charges.
|
Filed herewith as Exhibit 12.1.
|
|
List of Subsidiaries of EQT Midstream Partners, LP.
|
Filed herewith as Exhibit 21.1.
|
|
Consent of Independent Registered Public Accounting Firm.
|
Filed herewith as Exhibit 23.1.
|
|
Rule 13(a)-14(a) Certification of Principal Executive Officer.
|
Filed herewith as Exhibit 31.1.
|
|
Rule 13(a)-14(a) Certification of Principal Financial Officer.
|
Filed herewith as Exhibit 31.2.
|
|
Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.
|
Furnished herewith as Exhibit 32.
|
|
Named Executive Officer Compensation 2017 Peer Companies (General Industry).
|
Incorporated herein by reference to Exhibit 99.2 to Form 10-K (#001-35574) for the year ended December 31, 2016.
|
|
Named Executive Officer Compensation 2018 Peer Companies (General Industry).
|
Filed herewith as Exhibit 99.2.
|
|
Non-GAAP Financial Information.
|
Filed herewith as Exhibit 99.3.
|
|
101
|
Interactive Data File.
|
Filed herewith as Exhibit 101.
|
|
EQT Midstream Partners, LP
|
|
|
|
|
|
By: EQT Midstream Services, LLC, its General Partner
|
|
|
|
|
|
By:
|
/s/ STEVEN T. SCHLOTTERBECK
|
|
|
Steven T. Schlotterbeck
|
|
|
President and Chief Executive Officer
|
|
|
February 15, 2018
|
/s/ STEVEN T. SCHLOTTERBECK
|
|
President, Chief Executive Officer and Director
|
|
February 15, 2018
|
Steven T. Schlotterbeck
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT J. MCNALLY
|
|
Senior Vice President, Chief Financial Officer and Director
|
|
February 15, 2018
|
Robert J. McNally
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
/s/ JIMMI SUE SMITH
|
|
Chief Accounting Officer
|
|
February 15, 2018
|
Jimmi Sue Smith
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/ JEREMIAH J. ASHCROFT III
|
|
Director
|
|
February 15, 2018
|
Jeremiah J. Ashcroft III
|
|
|
|
|
|
|
|
|
|
/s/ JULIAN M. BOTT
|
|
Director
|
|
February 15, 2018
|
Julian M. Bott
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL A. BRYSON
|
|
Director
|
|
February 15, 2018
|
Michael A. Bryson
|
|
|
|
|
|
|
|
|
|
/s/ LEWIS B. GARDNER
|
|
Director
|
|
February 15, 2018
|
Lewis B. Gardner
|
|
|
|
|
|
|
|
|
|
/s/ DAVID L. PORGES
|
|
Chairman
|
|
February 15, 2018
|
David L. Porges
|
|
|
|
|
|
|
|
|
|
/s/ LARA E. WASHINGTON
|
|
Director
|
|
February 15, 2018
|
Lara E. Washington
|
|
|
|
|
___
|
This Agreement supersedes, terminates, and cancels Contract No. _____, dated _____________. The superseded contract is no longer in effect.
|
6.
|
The Receipt and Delivery Points are stated in Exhibit A to this Agreement.
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By
/s/Paul Kress 1/8/16
.
|
|
By
/s/David Gray 1/8/16
.
|
(Date)
|
|
(Date)
|
Title
VP
.
|
|
Title
SVP
.
|
1.
|
Notices and Correspondence shall be sent to:
|
2.
|
Service Under this Agreement is provided on:
|
|
X
|
|
Mainline System (includes the Sunrise Transmission System and the Ohio
|
|
|
|
Valley Connector
|
|
|
|
|
|
|
|
Allegheny Valley Connector
|
|
|
|
|
3.
|
Maximum Daily Quantity (MDQ):
|
|
Base MDQ (Dth)
|
|
Winter MDQ (Dth)
|
|
Effective Date
|
|
650,000
|
|
650,000
|
|
12/20/2017
|
|
|
|
|
|
|
4.
|
Primary Receipt and Delivery Point(s)
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By
/s/ Paul Kress 12/20/2017
.
|
|
By
/s/ Andrew Murphy 12/20/2017
.
|
(Date)
|
|
(Date)
|
Title
VP
.
|
|
Title
Vice President
.
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By
/s/ Paul Kress 12/20/2017
.
|
|
By
/s/ Andrew Murphy 12/20/2017
.
|
(Date)
|
|
(Date)
|
Title
VP
.
|
|
Title
Vice President
.
|
a.
|
Exhibit A
attached to the Agreement is hereby deleted in its entirety and replaced with the revised Exhibit A attached hereto as Attachment 1.
|
b.
|
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) attached hereto as Attachment 2. In accordance with Section 4.2(b) of the Agreement, the Parties have agreed to an Incremental Capital Project in respect of the new Receipt Point identified in Section II of
Exhibit B-2
(the “
West Run – Hopewell Ridge Receipt Point
”), which is separate from the
|
i.
|
this Incremental Capital Project shall not trigger an increase in the Compression MDQ or the Contract MDQ or an extension of any Term under the Agreement;
|
c.
|
In Section III (Site Specific Data and Facility Responsibility Matrix) of
Exhibit F
attached to the Agreement:
|
i.
|
the pages including Section III.A.1 (Receipt Point Interconnect Data) is hereby deleted in their entirety and replaced with the revised pages including Section III.A.1 (Receipt Point Interconnect Data) attached hereto as Attachment 3; and
|
EQT PRODUCTION COMPANY
|
EQM GATHERING OPCO, LLC
|
By:
/s/ David Schlosser
__________
|
By:
/s/ Jeremiah J. Ashcroft
_______
|
Name:
David Schlosser
____________
|
Name:
Jeremiah J. Ashcroft
__________
|
Title:
President
__________________
|
Title:
President
___________________
|
EQT ENERGY, LLC
|
|
By:
/s/ Donald M. Jenkins
_________
|
|
Name:
Donald M. Jenkins
____________
|
|
Title:
President
____________________
|
|
Receipt Point(s)
|
Receipt Point MDQ
MMcf/Day |
Zone
|
Zone MDQ
MMcf/Day |
|
|
|
|
West Run
|
80
|
Zone 1
|
300
|
Koloski
|
90
|
Zone 1
|
300
|
Green Hill
|
80
|
Zone 1
|
300
|
Pierce
|
100
|
Zone 1
|
300
|
Walker B
|
30
|
Zone 1
|
300
|
Moore
|
40
|
Zone 1
|
300
|
Phillips
|
30
|
Zone 1
|
300
|
Scotts Run
|
30
|
Zone 1
|
300
|
Patterson Creek
|
60
|
Zone 1
|
300
|
Carpenter
|
120
|
Zone 1
|
300
|
|
|
|
|
Moninger
|
200
|
Zone 2
|
370
|
Cooper
|
140
|
Zone 2
|
370
|
Big Sky
|
75
|
Zone 2
|
370
|
Harris
|
45
|
Zone 2
|
370
|
Amity
|
15
|
Zone 2
|
370
|
Harden Farm
|
110
|
Zone 2
|
370
|
Connors
|
65
|
Zone 2
|
370
|
Pettit
|
65
|
Zone 2
|
370
|
Hughes
|
55
|
Zone 2
|
370
|
Roberts
|
9
|
Zone 2
|
370
|
Harden
|
25
|
Zone 2
|
370
|
Shipman
|
37.5
|
Zone 2
|
370
|
J&J
|
37.5
|
Zone 2
|
370
|
|
|
|
|
Lacko
|
150
|
Zone 3
|
370
|
Hildebrand
|
35
|
Zone 3
|
370
|
Pyles
|
40
|
Zone 3
|
370
|
Beazer
|
50
|
Zone 3
|
370
|
Yabolnski
|
70
|
Zone 3
|
370
|
Minor
|
60
|
Zone 3
|
370
|
Nicoloff
|
30
|
Zone 3
|
370
|
McMillan
|
20
|
Zone 3
|
370
|
Robinson
|
20
|
Zone 3
|
370
|
Thompson
|
25
|
Zone 3
|
370
|
Thistlewaite
|
2
|
Zone 3
|
370
|
Alpha
|
80
|
Zone 3
|
370
|
Strope
|
100
|
Zone 3
|
370
|
|
|
|
|
West Run - Hopewell Ridge
|
N/A
|
N/A
|
N/A
|
Delivery Point(s)
|
Location
|
Ingram
|
Equitrans H-109
|
Amity
|
Equitrans H-125
|
Jupiter
|
Equitrans H-148
|
Callisto
|
Equitrans H-160
|
Hopewell Ridge
|
Equitrans H-160
|
Pipers Ridge
|
Equitrans M-78
|
Europa
|
Equitrans H-165
|
Io
|
Equitrans H-148 and M-78
|
Drip Liquids
Delivery Point(s)
|
Location
|
Not applicable
|
|
Contract MDQ:
|
792,000 Dth / Day
|
Compression MDQ:
|
792,000 Dth / Day
|
Incremental Capital Project
|
Contract MDQ
|
Incremental Capital Fee
|
In-Service Date
|
Applicable Expansion Term
|
West Run – Hopewell Ridge Receipt Point (5100053)
|
[***]
|
Volumetric fee of [***]
|
[***]
|
Until [***], and thereafter until terminated by either Party on the last Day of a Month by delivering written notice to the other Party at least thirty (30) Days prior to the date of termination.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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A.
|
In addition to the minimum design specification and operating parameters set forth in the Engineering and Technical Design Standards, the following specifications shall be followed:
|
1.
|
Receipt Point Interconnect Data
: The table below provides for the list of meters covered under this Agreement which may be updated from time to time in accordance with the terms and conditions of this Agreement. Each meter in the Receipt Point Interconnect table shall conform to the specifications listed in the table applicable to such meter under Section III(A)(2).
|
Meter ID
|
Meter Name
|
GPS Coordinates
|
MAOP
|
MinDQ*
(Mcf / Day)
|
MaxDQ
(Mcf / Day)
|
17019
|
Cooper B
|
39.95597, -80.26908
|
720
|
1,220
|
78,500
|
11798
|
Roberts 1
|
39.94097, -80.326422
|
720
|
320
|
19,600
|
17018
|
Roberts 2
|
39.94097, -80.25422
|
720
|
320
|
19,600
|
11796
|
McMillen
|
39.9836, -80.1209
|
720
|
710
|
45,900
|
M5256116
|
McMillen 2 MM - 1
|
39.98455, -80.11803
|
1400
|
2,100
|
51,433
|
M5256117
|
McMillen 2 MM - 2
|
39.98455, -80.11803
|
1400
|
2,100
|
51,433
|
M5256118
|
McMillen 2 MM - 3
|
39.98455, -80.11803
|
1400
|
2,100
|
51,433
|
17042
|
Pyles 1
|
39.969918, -80.110996
|
1,440
|
1,670
|
78,500
|
M5224755
|
Pyles 2
|
39.96643, -80.1116
|
1440
|
1,227
|
64,353
|
17035
|
Hildebrand
|
39.974133, -80.096991
|
720
|
650
|
45,900
|
17022
|
Robison 1
|
39.979817, -80.072114
|
720
|
680
|
45,900
|
18156
|
Robison 2
|
39.97799, -80.07021
|
720
|
720
|
45,900
|
17043
|
Thompson 1
|
39.948602, -80.096748
|
720
|
680
|
45,900
|
17115
|
Thompson 2
|
39.948602, -80.096748
|
720
|
680
|
45,900
|
11797
|
Thistlewaite
|
39.96395, -80.100731
|
720
|
320
|
19,600
|
17044
|
Conner 1
|
39.946228, -80.240644
|
720
|
680
|
45,900
|
5100003
|
Conner 2
|
39.946228, -80.240644
|
720
|
680
|
45,900
|
17037
|
Phillips
|
39.933614, -80.293665
|
1,400
|
1,150
|
115,300
|
18155
|
Walker B
|
39.934471, -80.318565
|
1,400
|
1,600
|
67,500
|
Meter ID
|
Meter Name
|
GPS Coordinates
|
MAOP
|
MinDQ*
(Mcf / Day)
|
MaxDQ
(Mcf / Day)
|
5100014
|
Scott’s Run 1
|
39.93239, -80.32793
|
1,400
|
2,700
|
115,300
|
5100015
|
Scott’s Run 2
|
39.93239, -80.32793
|
1,400
|
2,700
|
115,300
|
M5225755
|
Scott's Run 3
|
39.93237, -80.32812
|
1,400
|
1,227
|
64,353
|
5100065
|
Moore MM B Run
|
39.92772, -80.33715
|
1,400
|
2,700
|
115,300
|
M5277181
|
Moore MM Run 2
|
39.92763, -80.33740
|
1440
|
1,150
|
28,800
|
5100039
|
West Run (NIJUS25)
|
39.913752, -80.303533
|
1,400
|
2,700
|
115,300
|
5100053
|
West Run – Hopewell Ridge
|
39.91312, -80.30316
|
1,400
|
2,511
|
87,994
|
5100055
|
Patterson 1
|
39.936506 , -80.310759
|
1,400
|
2,700
|
115,300
|
5100063
|
Patterson 2
|
39.936506 , -80.310759
|
1,400
|
2,700
|
115,300
|
5100057
|
Nicoloff 1
|
39.954037, -80.065039
|
720
|
720
|
45,900
|
M5224083
|
Nicoloff 2
|
39.954037, -80.065039
|
720
|
1,227
|
44,838
|
5100018
|
Pierce 1
|
39.90734, -80.28209
|
720
|
2,630
|
78,500
|
5100019
|
Pierce 2
|
39.90734, -80.28209
|
720
|
2,630
|
78,500
|
5100064
|
Pierce 3
|
39.90734, -80.28209
|
720
|
2,630
|
45,900
|
M5213961
|
Big Sky 1
|
39.99805556,-80.20277
|
720
|
1,750
|
78,500
|
M5213962
|
Big Sky 2
|
39.99805556, -80.20277
|
720
|
1,750
|
78,500
|
M5213963
|
Big Sky 3
|
39.99805556, -80.20277
|
720
|
1,030
|
45,900
|
M5220213
|
Petit 1
|
39.94523, -80.23994
|
720
|
1,227
|
44,838
|
M5220220
|
Petit 2
|
39.94523, -80.23994
|
720
|
1,227
|
44,838
|
M5220221
|
Petit 3
|
39.94523, -80.23994
|
720
|
726
|
26,240
|
M5248813
|
Petit 4
|
39.94684, -80.24028
|
1,440
|
1,227
|
64,353
|
M5248814
|
Petit 5
|
39.94684, -80.24028
|
1,440
|
1,227
|
64,353
|
M5248816
|
Petit 6
|
39.94684, -80.24028
|
1,440
|
1,227
|
64,353
|
M5254623
|
Petit 7
|
39.94684, -80.24028
|
1,440
|
1,227
|
64,353
|
M5224627
|
Alpha 1
|
39.960097, -80.130604
|
720
|
1,227
|
44,838
|
M5224714
|
Alpha 2
|
39.960097, -80.130604
|
720
|
1,227
|
44,838
|
M5274373
|
Alpha 3
|
39.960097, -80.130604
|
720
|
1,950
|
35,500
|
M5234610
|
Moninger Run 1
|
39.99511, -80.20636
|
1,440
|
1,227
|
64,353
|
Meter ID
|
Meter Name
|
GPS Coordinates
|
MAOP
|
MinDQ*
(Mcf / Day)
|
MaxDQ
(Mcf / Day)
|
M5234612
|
Moninger Run 2
|
39.99511, -80.20636
|
1,440
|
1,227
|
64,353
|
M5234613
|
Moninger Run 3
|
39.99511, -80.20636
|
1,440
|
1,227
|
64,353
|
M5235813
|
Moninger Run 4
|
39.99511, -80.20636
|
1,440
|
1,227
|
64,353
|
M5234486
|
Koloski Run 1
|
39.95875, -80.31068
|
1,440
|
1,227
|
64,353
|
M5234487
|
Koloski Run 2
|
39.95875, -80.31068
|
1,440
|
1,227
|
64,353
|
M5234488
|
Koloski Run 3
|
39.95875, -80.31068
|
1,440
|
1,227
|
64,353
|
17020
|
Iames
|
40.0308, -80.15266
|
720
|
726
|
37,660
|
M5219031
|
Shipman 1
|
39.991551, -80.194235
|
720
|
726
|
37,660
|
M5219033
|
Shipman 2
|
39.991551, -80.194235
|
720
|
1,227
|
64,353
|
M5258883
|
Shipman Gathering MM - Run 3
|
39.991551, -80.194235
|
720
|
1,950
|
35,500
|
33297
|
Ingram 590004
|
39.93929, -80.26466
|
720
|
356
|
16,118
|
33341
|
ROG46H1
|
39.94097, -80.26422
|
720
|
356
|
16,118
|
M5210064
|
Lacko 1
|
39.968683, -80.150911
|
720
|
1,227
|
64,353
|
M5210065
|
Lacko 2
|
39.968683, -80.150911
|
720
|
1,227
|
64,353
|
M5210066
|
Lacko 3
|
39.968683, -80.150911
|
720
|
1,227
|
64,353
|
M5234259
|
Yablonski 1
|
39.99347, -80.06271
|
1440
|
1,227
|
64,353
|
M5234260
|
Yablonski 2
|
39.99347, -80.06271
|
1440
|
1,227
|
64,353
|
M5226733
|
Beazer 1
|
39.92417, -80.10866
|
1440
|
1,227
|
64,353
|
M5226735
|
Beazer 2
|
39.92417, -80.10866
|
1440
|
1,227
|
64,353
|
M5249530
|
Beazer 3
|
39.92417, -80.10866
|
1440
|
1,556
|
57,163
|
M5238116
|
J & J
|
39.99807, -80.20293
|
1440
|
1,556
|
57,163
|
M5238117
|
J & J
|
39.99807, -80.20293
|
1440
|
1,556
|
57,163
|
M5248049
|
J & J
|
39.99807, -80.20293
|
1440
|
1,556
|
57,163
|
M5241305
|
Harden Farm 1
|
39.939969, -80.264877
|
1440
|
1,556
|
57,163
|
M5241307
|
Harden Farm 2
|
39.939969, -80.264877
|
1440
|
1,556
|
57,163
|
M5241308
|
Harden Farm 3
|
39.939969, -80.264877
|
1440
|
1,556
|
57,163
|
Meter ID
|
Meter Name
|
GPS Coordinates
|
MAOP
|
MinDQ*
(Mcf / Day)
|
MaxDQ
(Mcf / Day)
|
M5274165
|
Green Hill - Meter 1
|
39.89708, -80.31778
|
1400
|
2,100
|
31,750
|
M5274166
|
Green Hill - Meter 2
|
39.89708, -80.31778
|
1400
|
2,100
|
31,750
|
M5274167
|
Green Hill - Meter 3
|
39.89708, -80.31778
|
1400
|
2,100
|
31,750
|
M5272524
|
Harris
|
39.95349, -80.19008
|
720
|
1,800
|
49,000
|
M5291357
|
Harris Run B
|
39.95349, -80.19008
|
720
|
1,800
|
49,000
|
Alpha 1, M5224627
Alpha 2, M5224714
Alpha 3, M5274373
STATION EQUIPMENT
|
REQUIRED
|
DESIGN
|
INSTALL
|
OWNERSHIP
|
OPERATE
|
MAINTAIN
|
SPECIAL PROVISIONS/ EQUIPMENT SPECS.
|
PIPING
|
|
|
|
|
|
|
|
Pipeline-Tap & Valve
|
Yes
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
10” hot tap
|
Inlet & Station Piping
|
Yes
|
Producer
|
Producer
|
Producer
|
Producer
|
Producer
|
10” minimum
|
Outlet & Station Piping
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
10” minimum
|
Test Station - inlet piping
|
Yes
|
Producer
|
Producer
|
Producer
|
Producer
|
Producer
|
|
Test Station - outlet piping
|
Yes
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
|
Corrosion coupon
|
Yes
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
|
GAS CONDITIONING
|
|
|
|
|
|
|
|
Filter Separator
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Producer
|
Producer
|
EQT Approved Peco Cyclotube
|
Liquid Level Shutoff
|
No
|
|
|
|
|
|
|
MEASUREMENT
|
|
|
|
|
|
|
|
Meter & Meter Runs
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Two 8” orifice
|
Meter & Flow Control Risers, Valves, etc…
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Valves for 8” meter skid
|
Electronic Measurement & Telecom Hardware
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Eagle/1 RTU (for each meter)
|
GAS QUALITY
|
|
|
|
|
|
|
|
Chromatograph
|
No
|
|
|
|
|
|
|
Continuous Sampler
|
No
|
|
|
|
|
|
|
H2O Dew Point Analyzer
|
No
|
|
|
|
|
|
|
Oxygen Analyzer
|
No
|
|
|
|
|
|
|
H2S Monitor
|
No
|
|
|
|
|
|
|
PRESSURE / FLOW CONTROL
|
|
|
|
|
|
|
|
Primary Pressure Control
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Primary and Monitor control valves are req'd UNLESS a Rupture Pin Valve is installed
|
Overpressure Device
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Rupture Pin Valve or Primary and Monitor Control Valve
|
Station Isolation Valve
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Manual valve at header
|
Flow Control Valve
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
In lieu of flow control valve, OPP is acceptable
|
Heat
|
No
|
|
|
|
|
|
|
Check Valve
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Producer
|
Producer
|
For each 8” meter skid
|
ODORIZATION
|
|
|
|
|
|
|
|
Odorizer & Controls
|
No
|
|
|
|
|
|
|
MISCELLANEOUS
|
|
|
|
|
|
|
|
Communication service
|
Yes
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
Gatherer
|
Cell Modem
|
Electrical Service
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
Solar & Battery
|
Building - Gas Chromatograph
|
No
|
|
|
|
|
|
|
Building - Odorizer
|
No
|
|
|
|
|
|
|
Fence/Vehicle Barrier/Signage
|
Yes
|
Gatherer
|
Producer
|
Producer
|
Gatherer
|
Producer
|
|
Air Permit
|
No
|
|
|
|
|
|
|
Harris, M5272524
Harris Run B, M5291357
STATION EQUIPMENT |
REQUIRED
|
DESIGN SPECIFICATIONS
|
INSTALL
|
OWNERSHIP
|
OPERATE
|
MAINTAIN
|
PIPING
|
|
|
|
|
|
|
EQT Pipeline-Tap & Valve
|
Yes
|
Company
|
Company
|
Company
|
Company
|
Company
|
Inlet Piping
|
Yes
|
Customer
|
Customer
|
Customer
|
Customer
|
Customer
|
Station & Outlet Piping
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Test Station - inlet piping
|
No
|
|
|
|
|
|
Test Station - outlet piping
|
Yes
|
Company
|
Company
|
Company
|
Company
|
Company
|
Corrosion coupon
|
Yes
|
Company
|
Company
|
Company
|
Company
|
Company
|
GAS CONDITIONING
|
|
|
|
|
|
|
Filter Separator
|
Yes
|
Company
|
Customer
|
Customer
|
Customer
|
Customer
|
Liquid Level Shutoff
|
No
|
|
|
|
|
|
MEASUREMENT
|
|
|
|
|
|
|
Meter & Meter Runs
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Meter & Flow Control Risers, Valves, etc…
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Electronic Measurement & Telecomm Hardware
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
GAS QUALITY
|
|
|
|
|
|
|
Chromatograph
|
No
|
|
|
|
|
|
Continuous Sampler
|
No
|
|
|
|
|
|
H2O Dew Point Analyzer
|
No
|
|
|
|
|
|
Oxygen Analyzer
|
No
|
|
|
|
|
|
H2S Monitor
|
No
|
|
|
|
|
|
PRESSURE / FLOW CONTROL
|
|
|
|
|
|
|
Primary Pressure Control
|
No
|
|
|
|
|
|
Overpressure Device
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Station Isolation Valve
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Flow Control Valve
|
No
|
|
|
|
|
|
Heat
|
No
|
|
|
|
|
|
Check Valve
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
ODORIZATION
|
|
|
|
|
|
|
Odorizer & Controls
|
No
|
|
|
|
|
|
MISCELLANEOUS
|
|
|
|
|
|
|
Communication Service(s)
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Electrical Service
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Building - Gas Chromatograph
|
No
|
|
|
|
|
|
Building - Odorizer
|
No
|
|
|
|
|
|
Fence/Vehicle Barrier/Signage
|
Yes
|
Company
|
Customer
|
Customer
|
Company
|
Customer
|
Air Permit
|
No
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(Thousands)
|
|||||||||||||||||||
Earnings
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
571,904
|
|
|
$
|
548,101
|
|
|
$
|
438,385
|
|
|
$
|
325,037
|
|
|
$
|
249,041
|
|
Minus: equity income of unconsolidated entities
|
|
(22,171
|
)
|
|
(9,898
|
)
|
|
(2,367
|
)
|
|
—
|
|
|
—
|
|
|||||
Plus: Fixed charges
|
|
42,190
|
|
|
27,181
|
|
|
27,821
|
|
|
13,629
|
|
|
1,687
|
|
|||||
Minus: Capitalized interest
|
|
(4,120
|
)
|
|
(9,403
|
)
|
|
(5,642
|
)
|
|
(2,258
|
)
|
|
(442
|
)
|
|||||
Total earnings
|
|
$
|
587,803
|
|
|
$
|
555,981
|
|
|
$
|
458,197
|
|
|
$
|
336,408
|
|
|
$
|
250,286
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest expense
|
|
$
|
36,181
|
|
|
$
|
16,766
|
|
|
$
|
21,345
|
|
|
$
|
10,871
|
|
|
$
|
829
|
|
Plus: Capitalized interest
|
|
4,120
|
|
|
9,403
|
|
|
5,642
|
|
|
2,258
|
|
|
442
|
|
|||||
Plus: Estimated interest component of rental expense
|
|
1,889
|
|
|
1,012
|
|
|
834
|
|
|
500
|
|
|
416
|
|
|||||
Total fixed charges
|
|
$
|
42,190
|
|
|
$
|
27,181
|
|
|
$
|
27,821
|
|
|
$
|
13,629
|
|
|
$
|
1,687
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
13.9x
|
|
|
20.5x
|
|
|
16.5x
|
|
|
24.7x
|
|
|
148.4x
|
|
(1)
|
Earnings included in the calculation of this ratio consist of (i) income before income taxes, minus (ii) equity income of unconsolidated entities, plus (iii) fixed charges and minus (iv) capitalized interest (including allowance for borrowed funds used during construction). Fixed charges included in the calculation of this ratio consist of (i) net interest expense, plus (ii) capitalized interest (including allowance for borrowed funds used during construction) and (iii) the estimated interest portion of rental expense.
|
Company
|
|
Jurisdiction of Organization
|
Equitrans Investments, LLC
|
|
Delaware
|
Equitrans Services, LLC
|
|
Delaware
|
Equitrans, L.P.
|
|
Pennsylvania
|
EQT Midstream Finance Corporation
|
|
Delaware
|
EQM Gathering Holdings, LLC
|
|
Delaware
|
EQM Gathering Opco, LLC
|
|
Delaware
|
MVP Holdco, LLC
|
|
Delaware
|
Rager Mountain Storage Company LLC
|
|
Delaware
|
•
|
Registration Statement (Form S-3 No. 333-212362) of EQT Midstream Partners, LP pertaining to the registration of Common Units Representing Limited Partner Interests and Debt Securities,
|
•
|
Registration Statement (Form S-8 No. 333-182460) pertaining to the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan, and
|
•
|
Registration Statement (Form S-3 No. 333-205812) of EQT Midstream Partners, LP pertaining to the registration of Common Units Representing Limited Partner Interests;
|
Date:
|
February 15, 2018
|
|
|
|
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
|
Date:
|
February 15, 2018
|
|
|
|
EQT Midstream Partners, LP
|
|
|
|
|
|
/s/ Robert J. McNally
|
|
|
Robert J. McNally
|
|
|
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, the registrant’s General Partner
|
/s/ Steven T. Schlotterbeck
|
|
February 15, 2018
|
|
Steven T. Schlotterbeck
|
|
|
|
President and Chief Executive Officer, EQT Midstream Services, LLC, EQM’s General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert J. McNally
|
|
February 15, 2018
|
|
Robert J. McNally
|
|
|
|
Senior Vice President and Chief Financial Officer, EQT Midstream Services, LLC, EQM’s General Partner
|
|
|
Agilent Technologies
|
Flowers Foods
|
Peabody Energy
|
Alexion Pharmaceuticals
|
Flowserve
|
Pitney Bowes
|
AMETEK
|
Fortune Brands Home & Security
|
Polaris Industries
|
AMSTED Industries
|
GAF Materials
|
PolyOne
|
Amtrak
|
Gannett
|
Potash*
|
Andersons
|
Garmin
|
Quad /Graphics
|
Arby's Restaurant Group
|
Graphic Packaging
|
Quintiles
|
Ashland
|
Hallmark Cards
|
Regeneron Pharmaceuticals
|
Bemis
|
Hasbro
|
Rockwell Automation
|
Big Lots
|
Hexion
|
Rockwell Collins
|
Booz Allen
|
Hamilton Host Hotels & Resorts
|
RPM International
|
Brink's
|
IMS Health
|
Sabre Corporation
|
CA Technologies
|
International Flavors & Fragrances
|
SAIC
|
Canadian Pacific Railway
|
International Game Technology
|
SAS Institute
|
Carlson Rezidor*
|
Iron Mountain
|
Schreiber Foods
|
CF Industries
|
KBR
|
Scoular Company
|
CH2M HILL
|
Kelly Services
|
Scripps Networks Interactive
|
Chemours Company
|
Keurig Green Mountain
|
Serta Simmons Bedding
|
Clorox
|
Keystone Foods*
|
Snap-On
|
Commercial Metals
|
Kinross Gold
|
Sonoco Products
|
CommScope
|
Kohler
|
Steelcase
|
Cooper Standard Automotive
|
Kum & Go
|
Tempur Sealy
|
Crown Castle
|
Leggett and Platt
|
Terex
|
Cushman & Wakefield
|
LSC Communications
|
Tiffany & Co.
|
CVR Energy
|
Martin Marietta Materials
|
Total System Services (TSYS)
|
Dana
|
Mary Kay
|
Transocean
|
Dematic Group*
|
Mattel
|
Trinity Industries
|
Diebold Nixdorf
|
McCormick
|
United States Cellular*
|
E & J Gallo Winery
|
Meritor
|
Vulcan Materials
|
Encana Services
|
Millicom International Cellular
|
VWR International
|
Endo
|
NBTY
|
Westlake Chemical
|
Equifax
|
Orbital ATK
|
Wyndham Worldwide
|
Experian Americas*
|
Osram Sylvania*
|
Zebra Technologies
|
Fiserv
|
Owens Corning
|
|
*Subsidiary
|
|
|
|
|
|
||
(in millions)
|
|
|
||
Net (loss) income
|
$
|
1,858,143
|
|
|
(Deduct)/add back:
|
|
|
||
Income taxes
|
(1,115,619)
|
|
|
|
Interest expense
|
202,772
|
|
|
|
Depreciation, depletion and amortization
(*)
|
1,088,499
|
|
|
|
EBITDA
|
2,033,795
|
|
|
|
Price adjustment
|
(230,196)
|
|
|
|
Non-cash derivatives
|
(347,161)
|
|
|
|
Impairments
|
68,183
|
|
|
|
Acquisitions/divestitures
|
12,641
|
|
|
|
Adjusted EBITDA
|
$
|
1,537,262
|
|
|