(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO | |
COMMISSION FILE NUMBER 001-37380 |
DELAWARE | 30-0855134 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania | 15222 |
(Address of principal executive offices) | (Zip code) |
(412) 553-5700 (Registrant’s telephone number, including area code) |
Large Accelerated Filer ¨ | Accelerated Filer x | Emerging Growth Company ¨ | |||
Non-Accelerated Filer ¨ | (Do not check if a smaller reporting company) | Smaller Reporting Company ¨ |
Page No. | |||
Abbreviations | Measurements |
ASU – Accounting Standards Update | Btu = one British thermal unit |
FASB – Financial Accounting Standards Board | BBtu = billion British thermal units |
FERC – Federal Energy Regulatory Commission | Bcf = billion cubic feet |
GAAP – United States Generally Accepted Accounting Principles | Dth = dekatherm or million British thermal units |
IPO – Initial Public Offering | MMBtu = million British thermal units |
IRS – Internal Revenue Service | Mcf = thousand cubic feet |
SEC – Securities and Exchange Commission | MMcf = million cubic feet |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands, except per unit amounts) | |||||||
Operating revenues (2) | $ | 203,426 | $ | 185,786 | |||
Operating expenses: | |||||||
Operating and maintenance (3) | 20,286 | 17,136 | |||||
Selling, general and administrative (3) | 18,692 | 18,480 | |||||
Depreciation and amortization | 20,547 | 14,007 | |||||
Total operating expenses | 59,525 | 49,623 | |||||
Operating income | 143,901 | 136,163 | |||||
Other income (4) | 6,009 | 7,602 | |||||
Net interest expense (5) | 7,922 | 4,551 | |||||
Income before income taxes | 141,988 | 139,214 | |||||
Income tax expense | — | 3,435 | |||||
Net income | 141,988 | 135,779 | |||||
Net income attributable to noncontrolling interests | 80,612 | 77,787 | |||||
Net income attributable to EQT GP Holdings, LP | $ | 61,376 | $ | 57,992 | |||
Calculation of limited partners' interest in net income: | |||||||
Net income attributable to EQT GP Holdings, LP | $ | 61,376 | $ | 57,992 | |||
Less pre-acquisition net income allocated to parent | — | (7,670 | ) | ||||
Limited partners' interest in net income | $ | 61,376 | $ | 50,322 | |||
Net income per limited partner unit – basic and diluted | $ | 0.23 | $ | 0.19 | |||
Weighted average common units outstanding – basic and diluted | 266,183 | 266,173 | |||||
Cash distributions declared per unit (6) | $ | 0.191 | $ | 0.134 |
(1) | As discussed in Note A, EQGP’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, because the transaction was between entities under common control. |
(2) | Operating revenues included affiliate revenues from EQT of $143.4 million and $135.3 million for the three months ended March 31, 2017 and 2016, respectively. See Note E. |
(3) | Operating and maintenance expense included charges from EQT of $9.9 million and $8.1 million for the three months ended March 31, 2017 and 2016, respectively. Selling, general and administrative expense included charges from EQT of $17.7 million and $17.1 million for the three months ended March 31, 2017 and 2016, respectively. See Note E. |
(4) | For the three months ended March 31, 2017, other income included equity income from Mountain Valley Pipeline, LLC (MVP Joint Venture) of $4.3 million. For the three months ended March 31, 2016, other income included distributions received from EES of $2.8 million and equity income from the MVP Joint Venture of $1.6 million. See Note F. |
(5) | For the three months ended March 31, 2017, net interest expense included $1.7 million of interest income on the Preferred Interest in EES. |
(6) | Represents the cash distributions declared related to the period presented. See Note K. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 141,988 | $ | 135,779 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 20,547 | 14,007 | |||||
Deferred income taxes | — | 2,975 | |||||
Equity income | (4,277 | ) | (1,589 | ) | |||
AFUDC – equity | (1,699 | ) | (2,937 | ) | |||
Non-cash long-term compensation expense | 451 | 325 | |||||
Changes in other assets and liabilities: | |||||||
Accounts receivable | (968 | ) | (535 | ) | |||
Accounts payable | 420 | (72 | ) | ||||
Due to/from EQT affiliates | 366 | (28,563 | ) | ||||
Other assets and other liabilities | 3,941 | (3,746 | ) | ||||
Net cash provided by operating activities | 160,769 | 115,644 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (62,947 | ) | (124,625 | ) | |||
Capital contributions to the MVP Joint Venture | (19,760 | ) | (11,430 | ) | |||
Sales of interests in the MVP Joint Venture | — | 12,533 | |||||
Principal payments received on Preferred Interest | 1,020 | — | |||||
Net cash used in investing activities | (81,687 | ) | (123,522 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from EQM credit facility borrowings | 50,000 | 71,000 | |||||
Payments on EQM credit facility borrowings | (50,000 | ) | (361,000 | ) | |||
Proceeds from the EQGP Working Capital Facility loan, net of payments | 83 | 139 | |||||
Distributions paid to noncontrolling interest unitholders of EQM | (49,955 | ) | (39,553 | ) | |||
Distributions paid to EQGP unitholders | (47,111 | ) | (32,472 | ) | |||
Capital contributions | 216 | — | |||||
Net contributions from EQT | — | 9,182 | |||||
Net cash used in financing activities | (96,767 | ) | (352,704 | ) | |||
Net change in cash and cash equivalents | (17,685 | ) | (360,582 | ) | |||
Cash and cash equivalents at beginning of period | 60,453 | 360,957 | |||||
Cash and cash equivalents at end of period | $ | 42,768 | $ | 375 | |||
Cash paid during the period for: | |||||||
Interest, net of amount capitalized | $ | 9,412 | $ | 9,739 |
(1) | As discussed in Note A, EQGP’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, because the transaction was between entities under common control. |
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | (Thousands, except number of units) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 42,768 | $ | 60,453 | |||
Accounts receivable (net of allowance for doubtful accounts of $331 as of March 31, 2017 and $319 as of December 31, 2016) | 21,630 | 20,662 | |||||
Accounts receivable – affiliate | 81,654 | 81,358 | |||||
Other current assets | 5,807 | 9,912 | |||||
Total current assets | 151,859 | 172,385 | |||||
Property, plant and equipment | 2,966,817 | 2,894,858 | |||||
Less: accumulated depreciation | (334,352 | ) | (316,024 | ) | |||
Net property, plant and equipment | 2,632,465 | 2,578,834 | |||||
Investment in unconsolidated entity | 237,308 | 184,562 | |||||
Other assets | 139,519 | 140,668 | |||||
Total assets | $ | 3,161,151 | $ | 3,076,449 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 43,531 | $ | 35,831 | |||
Due to related party | 20,349 | 20,360 | |||||
Capital contribution payable to MVP Joint Venture | 40,180 | 11,471 | |||||
Accrued interest | 11,760 | 12,016 | |||||
Accrued liabilities | 9,867 | 8,755 | |||||
Total current liabilities | 125,687 | 88,433 | |||||
Long-term debt | 986,137 | 985,732 | |||||
Other long-term liabilities | 10,258 | 9,562 | |||||
Total liabilities | 1,122,082 | 1,083,727 | |||||
Equity: | |||||||
Common (266,165,000 common units issued and outstanding at March 31, 2017 and December 31, 2016) | (1,061,600 | ) | (1,077,100 | ) | |||
Noncontrolling interests | 3,100,669 | 3,069,822 | |||||
Total equity | 2,039,069 | 1,992,722 | |||||
Total liabilities and equity | $ | 3,161,151 | $ | 3,076,449 |
Predecessor Equity | Common | Noncontrolling Interests | Total Equity | ||||||||||||
(Thousands) | |||||||||||||||
Balance at January 1, 2016 | $ | 275,545 | $ | (1,204,509 | ) | $ | 2,771,558 | $ | 1,842,594 | ||||||
Net income | 7,670 | 50,322 | 77,787 | 135,779 | |||||||||||
Capital contributions | — | 162 | — | 162 | |||||||||||
Equity-based compensation plans | — | 169 | 156 | 325 | |||||||||||
Distributions to noncontrolling interest unitholders of EQM | — | — | (39,553 | ) | (39,553 | ) | |||||||||
Net contributions from EQT | 9,182 | — | — | 9,182 | |||||||||||
Distributions to EQGP unitholders | — | (32,472 | ) | — | (32,472 | ) | |||||||||
Balance at March 31, 2016 | $ | 292,397 | $ | (1,186,328 | ) | $ | 2,809,948 | $ | 1,916,017 | ||||||
Balance at January 1, 2017 | $ | — | $ | (1,077,100 | ) | $ | 3,069,822 | $ | 1,992,722 | ||||||
Net income | — | 61,376 | 80,612 | 141,988 | |||||||||||
Capital contributions | — | 974 | — | 974 | |||||||||||
Equity-based compensation plans | — | 261 | 190 | 451 | |||||||||||
Distributions to noncontrolling interest unitholders of EQM | — | — | (49,955 | ) | (49,955 | ) | |||||||||
Distributions to EQGP unitholders | — | (47,111 | ) | — | (47,111 | ) | |||||||||
Balance at March 31, 2017 | $ | — | $ | (1,061,600 | ) | $ | 3,100,669 | $ | 2,039,069 |
(1) | As discussed in Note A, EQGP’s consolidated financial statements for the three months ended March 31, 2016 have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, because the transaction was between entities under common control. |
A. | Financial Statements |
B. | October 2016 Acquisition |
C. | Equity and Net Income per Limited Partner Unit |
EQM Limited Partner Common Units | EQM General Partner Units | Total | ||||||
Balance at January 1, 2016 | 77,520,181 | 1,443,015 | 78,963,196 | |||||
2014 EQM Value Driver Award Program issuance | 19,796 | — | 19,796 | |||||
EQM Total Return Program issuance | 92,472 | — | 92,472 | |||||
$750 Million ATM Program | 2,949,309 | — | 2,949,309 | |||||
Balance at December 31, 2016 | 80,581,758 | 1,443,015 | 82,024,773 |
D. | Financial Information by Business Segment |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Revenues from external customers (including affiliates): | |||||||
Gathering | $ | 102,329 | $ | 98,009 | |||
Transmission | 101,097 | 87,777 | |||||
Total operating revenues | $ | 203,426 | $ | 185,786 | |||
Operating income: | |||||||
Gathering | $ | 73,589 | $ | 72,604 | |||
Transmission | 71,524 | 64,516 | |||||
Headquarters | (1,212 | ) | (957 | ) | |||
Total operating income | $ | 143,901 | $ | 136,163 | |||
Reconciliation of operating income to net income: | |||||||
Other income | 6,009 | 7,602 | |||||
Net interest expense | 7,922 | 4,551 | |||||
Income tax expense | — | 3,435 | |||||
Net income | $ | 141,988 | $ | 135,779 |
March 31, 2017 | December 31, 2016 | ||||||
(Thousands) | |||||||
Segment assets: | |||||||
Gathering | $ | 1,329,846 | $ | 1,292,713 | |||
Transmission | 1,426,109 | 1,413,631 | |||||
Total operating segments | 2,755,955 | 2,706,344 | |||||
Headquarters, including cash | 405,196 | 370,105 | |||||
Total assets | $ | 3,161,151 | $ | 3,076,449 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Depreciation and amortization: | |||||||
Gathering | $ | 8,860 | $ | 7,263 | |||
Transmission | 11,687 | 6,744 | |||||
Total | $ | 20,547 | $ | 14,007 | |||
Expenditures for segment assets: | |||||||
Gathering | $ | 48,838 | $ | 73,087 | |||
Transmission | 21,389 | 60,071 | |||||
Total (1) | $ | 70,227 | $ | 133,158 |
(1) | EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the statements of consolidated cash flows until they are paid in a subsequent period. Accrued capital expenditures were approximately $34.0 million and $26.7 million at March 31, 2017 and December 31, 2016, respectively. Accrued capital expenditures were approximately $32.7 million and $24.1 million at March 31, 2016 and December 31, 2015, respectively. |
E. | Related Party Transactions |
F. | Investment in Unconsolidated Entity |
G. | Credit Facility Borrowings |
H. | Fair Value Measurements |
I. | Income Taxes |
J. | Consolidated Variable Interest Entity |
Classification | March 31, 2017 | December 31, 2016 | |||||
(Thousands) | |||||||
Assets: | |||||||
Cash and cash equivalents | $ | 42,497 | $ | 60,368 | |||
Accounts receivable | 21,630 | 20,662 | |||||
Accounts receivable – affiliate | 81,654 | 81,358 | |||||
Other current assets | 5,685 | 9,671 | |||||
Net property, plant and equipment | 2,632,465 | 2,578,834 | |||||
Investment in unconsolidated entity | 237,308 | 184,562 | |||||
Other assets | $ | 139,236 | $ | 140,385 | |||
Liabilities: | |||||||
Accounts payable | $ | 43,474 | $ | 35,830 | |||
Due to related party | 18,672 | 19,027 | |||||
Capital contribution payable to MVP Joint Venture | 40,180 | 11,471 | |||||
Accrued interest | 11,760 | 12,016 | |||||
Accrued liabilities | 9,867 | 8,648 | |||||
Long-term debt | 986,137 | 985,732 | |||||
Other long-term liabilities | $ | 10,258 | $ | 9,562 |
K. | Distributions |
Quarter Ended | EQM Distribution per Common Unit | EQM Total Distribution | EQM Total Distribution to EQGP | EQGP Distribution per Common Unit | EQGP Total Distribution | |||||||||||||||
(Thousands, except per unit amounts) | ||||||||||||||||||||
2016 | ||||||||||||||||||||
March 31 | $ | 0.745 | $ | 78,093 | $ | 36,506 | $ | 0.134 | $ | 35,666 | ||||||||||
June 30 | 0.78 | 86,595 | 40,755 | 0.15 | 39,925 | |||||||||||||||
September 30 | 0.815 | 92,208 | 44,310 | 0.165 | 43,917 | |||||||||||||||
December 31 | $ | 0.85 | $ | 97,822 | $ | 47,867 | $ | 0.177 | $ | 47,111 | ||||||||||
2017 | ||||||||||||||||||||
March 31 (1) | $ | 0.89 | $ | 104,238 | $ | 51,933 | $ | 0.191 | $ | 50,838 |
(1) | On April 25, 2017, the Board of Directors of the EQM General Partner declared a cash distribution to EQM's unitholders for the first quarter of 2017 of $0.89 per common unit. The cash distribution will be paid on May 15, 2017 to unitholders of record at the close of business on May 5, 2017. Based on the 80,581,758 EQM common units outstanding on April 27, 2017, cash distributions to EQGP will be approximately $19.4 million related to its limited partner interest, $1.8 million related to its general partner interest and $30.7 million related to its IDRs in EQM. The distribution amounts to EQGP related to its general partner interest and IDRs in EQM are subject to change if EQM issues additional common units on or prior to the record date for the first quarter 2017 distribution. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Net income attributable to EQM | $ | 143,196 | $ | 136,735 | |||
Less: | |||||||
Net income attributable to EQM noncontrolling interests | 80,612 | 77,787 | |||||
Additional expenses | 1,208 | 956 | |||||
Net income attributable to EQGP | $ | 61,376 | $ | 57,992 |
Three Months Ended March 31, | ||||||||||
2017 | 2016 | % Change | ||||||||
FINANCIAL DATA | (Thousands, other than per day amounts) | |||||||||
Firm reservation fee revenues | $ | 94,271 | $ | 82,007 | 15.0 | |||||
Volumetric based fee revenues: | ||||||||||
Usage fees under firm contracts (1) | 4,821 | 10,452 | (53.9 | ) | ||||||
Usage fees under interruptible contracts | 3,237 | 5,550 | (41.7 | ) | ||||||
Total volumetric based fee revenues | 8,058 | 16,002 | (49.6 | ) | ||||||
Total operating revenues | 102,329 | 98,009 | 4.4 | |||||||
Operating expenses: | ||||||||||
Operating and maintenance | 10,455 | 8,945 | 16.9 | |||||||
Selling, general and administrative | 9,425 | 9,197 | 2.5 | |||||||
Depreciation and amortization | 8,860 | 7,263 | 22.0 | |||||||
Total operating expenses | 28,740 | 25,405 | 13.1 | |||||||
Operating income | $ | 73,589 | $ | 72,604 | 1.4 | |||||
OPERATIONAL DATA | ||||||||||
Gathered volumes (BBtu per day) | ||||||||||
Firm capacity reservation | 1,728 | 1,424 | 21.3 | |||||||
Volumetric based services (2) | 224 | 473 | (52.6 | ) | ||||||
Total gathered volumes | 1,952 | 1,897 | 2.9 | |||||||
Capital expenditures | $ | 48,838 | $ | 73,087 | (33.2 | ) |
(1) | Includes fees on volumes gathered in excess of firm contracted capacity. |
(2) | Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity. |
Three Months Ended March 31, | ||||||||||
2017 | 2016 | % Change | ||||||||
FINANCIAL DATA | (Thousands, other than per day amounts) | |||||||||
Firm reservation fee revenues | $ | 92,274 | $ | 70,109 | 31.6 | |||||
Volumetric based fee revenues: | ||||||||||
Usage fees under firm contracts (1) | 2,857 | 13,429 | (78.7 | ) | ||||||
Usage fees under interruptible contracts | 5,966 | 4,239 | 40.7 | |||||||
Total volumetric based fee revenues | 8,823 | 17,668 | (50.1 | ) | ||||||
Total operating revenues | 101,097 | 87,777 | 15.2 | |||||||
Operating expenses: | ||||||||||
Operating and maintenance | 9,831 | 8,191 | 20.0 | |||||||
Selling, general and administrative | 8,055 | 8,326 | (3.3 | ) | ||||||
Depreciation and amortization | 11,687 | 6,744 | 73.3 | |||||||
Total operating expenses | 29,573 | 23,261 | 27.1 | |||||||
Operating income | $ | 71,524 | $ | 64,516 | 10.9 | |||||
OPERATIONAL DATA | ||||||||||
Transmission pipeline throughput (BBtu per day) | ||||||||||
Firm capacity reservation | 2,119 | 1,622 | 30.6 | |||||||
Volumetric based services (2) | 31 | 487 | (93.6 | ) | ||||||
Total transmission pipeline throughput | 2,150 | 2,109 | 1.9 | |||||||
Average contracted firm transmission reservation commitments (BBtu per day) | 3,743 | 3,005 | 24.6 | |||||||
Capital expenditures | $ | 21,389 | $ | 60,071 | (64.4 | ) |
(1) | Includes commodity charges and fees on all volumes transported under firm contracts as well as transmission fees on volumes in excess of firm contracted capacity. |
(2) | Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity. |
• | 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. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Net income | $ | 143,196 | $ | 136,735 | |||
Add: | |||||||
Net interest expense | 7,926 | 4,552 | |||||
Depreciation and amortization expense | 20,547 | 14,007 | |||||
Income tax expense | — | 3,435 | |||||
Preferred Interest payments received post conversion | 2,746 | — | |||||
Non-cash long-term compensation expense | 225 | 195 | |||||
Less: | |||||||
Equity income | (4,277 | ) | (1,589 | ) | |||
AFUDC – equity | (1,699 | ) | (2,937 | ) | |||
Pre-acquisition capital lease payments for AVC (1) | — | (9,364 | ) | ||||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition (2) | — | (3,463 | ) | ||||
Adjusted EBITDA | $ | 168,664 | $ | 141,571 | |||
Less: | |||||||
Net interest expense excluding interest income on the Preferred Interest | (9,652 | ) | (4,551 | ) | |||
Capitalized interest and AFUDC – debt | (1,600 | ) | (1,736 | ) | |||
Ongoing maintenance capital expenditures net of expected reimbursements (3) | (2,608 | ) | (1,969 | ) | |||
Distributable cash flow | $ | 154,804 | $ | 133,315 | |||
Net cash provided by operating activities | $ | 161,422 | $ | 116,327 | |||
Adjustments: | |||||||
Pre-acquisition capital lease payments for AVC (1) | — | (9,364 | ) | ||||
Capitalized interest and AFUDC – debt | (1,600 | ) | (1,736 | ) | |||
Principal payments received on Preferred Interest | 1,020 | — | |||||
Ongoing maintenance capital expenditures net of expected reimbursements (3) | (2,608 | ) | (1,969 | ) | |||
Current tax expense | — | 460 | |||||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition (2) | — | (3,463 | ) | ||||
Other, including changes in working capital | (3,430 | ) | 33,060 | ||||
Distributable cash flow | $ | 154,804 | $ | 133,315 |
(1) | Reflects capital lease payments due under the lease. These lease payments were generally made monthly on a one month lag prior to the October 2016 Acquisition. |
(2) | Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the periods presented was excluded from EQM’s adjusted EBITDA calculations as these amounts were generated by Rager and the Gathering Assets prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM’s unitholders. Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the three months ended March 31, 2016 was calculated as net income of $0.2 million plus depreciation and amortization expense of $0.6 million plus income tax expense of $3.4 million less interest income of $0.3 million less AFUDC - equity of $0.4 million. |
(3) | Ongoing maintenance capital expenditures net of expected reimbursements excludes ongoing maintenance that EQM expects to be reimbursed or that was reimbursed by EQT under the terms of EQM's omnibus agreement of $1.0 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively. Additionally, it excludes ongoing maintenance attributable to AVC, Rager and the Gathering Assets prior to acquisition of $2.9 million for the three months ended March 31, 2016. |
• | Range Resources Header Pipeline. EQM expects to complete this project in the second quarter of 2017, including the installation of approximately 25 miles of pipeline and 32,000 horsepower compression. The pipeline is estimated to cost approximately $250 million and provide total firm capacity of 600 MMcf per day, which is fully reserved under a ten-year firm capacity reservation commitment contract. EQM expects to invest approximately $40 million on the project in 2017. |
• | Affiliate Gathering Expansion. EQM expects to invest $200 million to $230 million in 2017 on gathering expansion projects supported by EQT Production development in the Marcellus. EQM plans to install approximately 30 miles of gathering pipeline and 10,000 horsepower compression in its gathering systems across northern West Virginia and southwestern Pennsylvania during 2017. |
• | Mountain Valley Pipeline. The MVP Joint Venture is a joint venture with affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc., WGL Holdings, Inc. and RGC Resources, Inc. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of March 31, 2017. The 42 inch diameter MVP has a targeted capacity of 2.0 Bcf per day and is estimated to span 300 miles extending from EQM's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia. As currently designed, the MVP is estimated to cost a total of $3.0 billion to $3.5 billion, excluding AFUDC, with EQM funding its proportionate share through capital contributions made to the joint venture. In 2017, EQM expects to provide capital contributions of approximately $200 million to the MVP Joint Venture, primarily in support of materials, land, engineering design, environmental work and construction activities. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms, including a 1.29 Bcf per day firm capacity commitment by EQT, and is currently in negotiation with additional shippers who have expressed interest in the MVP project. On March 31, 2017, the FERC issued an updated |
• | Transmission Expansion. EQM plans to invest $60 million to $80 million on transmission expansion projects in 2017 including Equitrans expansion projects and modernization projects on the AVC facilities. The Equitrans expansion projects are designed to increase deliverable capacity to EQM's Mobley hub, which is the origin of both the OVC and the MVP. The projects include additional compression, pipeline looping and new header pipelines. In total, the projects are expected to add up to 1.5 Bcf per day of capacity by the end of 2018, consistent with the target MVP in-service date. The AVC modernization projects primarily consist of the replacement of approximately 20 miles of pipeline. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(Thousands) | |||||||
Expansion capital expenditures (1) | $ | 66,645 | $ | 127,950 | |||
Maintenance capital expenditures: | |||||||
Ongoing maintenance | 3,582 | 5,033 | |||||
Funded regulatory compliance | — | 175 | |||||
Total maintenance capital expenditures | 3,582 | 5,208 | |||||
Total capital expenditures (2) | $ | 70,227 | $ | 133,158 |
(1) | Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of $19.8 million and $11.4 million for the three months ended March 31, 2017 and 2016, respectively. |
(2) | EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures on the statements of consolidated cash flows until they are paid in a subsequent period. Accrued capital expenditures were approximately $34.0 million and $26.7 million at March 31, 2017 and December 31, 2016, respectively. Accrued capital expenditures were approximately $32.7 million and $24.1 million at March 31, 2016 and December 31, 2015, respectively. |
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 |
2.1 | Amendment No. 1 to Contribution and Sale Agreement, dated as of March 30, 2017, by and among EQT Midstream Partners, LP, EQT Midstream Services, LLC, EQM Gathering Opco, LLC, EQT Corporation, EQT Gathering, LLC, EQT Energy Supply Holdings, LP, and EQT Energy, LLC. | |
10.1 | Amendment No. 2 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of March 30, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items has been requested from the SEC. The redacted material has been separately filed with the SEC. | |
10.2 | Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of July 29, 2015, by and between EQT Corporation and M. Elise Hyland. | |
10.3 | Transition Agreement and General Release, dated as of February 28, 2017, by and between EQT Corporation and M. Elise Hyland. | |
31.1 | Rule 13(a)-14(a) Certification of Principal Executive Officer. | |
31.2 | Rule 13(a)-14(a) Certification of Principal Financial Officer. | |
32 | Section 1350 Certification of Principal Executive Officer and Principal Financial Officer. | |
101 | Interactive Data File. |
EQT GP Holdings, LP | ||
(Registrant) | ||
By: | EQT GP Services, LLC, its General Partner | |
By: | /s/ Robert J. McNally | |
Robert J. McNally | ||
Senior Vice President and Chief Financial Officer |
Exhibit No. | Document Description | Method of Filing | |||
2.1 | Amendment No. 1 to Contribution and Sale Agreement, dated as of March 30, 2017, by and among EQT Midstream Partners, LP, EQT Midstream Services, LLC, EQM Gathering Opco, LLC, EQT Corporation, EQT Gathering, LLC, EQT Energy Supply Holdings, LP, and EQT Energy, LLC. | Incorporated herein by reference to Exhibit 2.1 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended March 31, 2017. | |||
10.1 | Amendment No. 2 to Gas Gathering Agreement for the Mercury, Pandora, Pluto and Saturn Gas Gathering Systems, dated as of March 30, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by three asterisks [***], because confidential treatment for those items has been requested from the SEC. The redacted material has been separately filed with the SEC. | Incorporated herein by reference to Exhibit 10.1 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended March 31, 2017. | |||
10.2 | Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of July 29, 2015, by and between EQT Corporation and M. Elise Hyland. | Incorporated herein by reference to Exhibit 10.2 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended March 31, 2017. | |||
10.3 | Transition Agreement and General Release, dated as of February 28, 2017, by and between EQT Corporation and M. Elise Hyland. | Incorporated herein by reference to Exhibit 10.3 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended March 31, 2017. | |||
31.1 | Rule 13(a)-14(a) Certification of Principal Executive Officer. | Filed herewith as Exhibit 31.1. | |||
31.2 | Rule 13(a)-14(a) Certification of Principal Financial Officer. | Filed herewith as Exhibit 31.2. | |||
32 | Section 1350 Certification of Principal Executive Officer and Principal Financial Officer. | Furnished herewith as Exhibit 32. | |||
101 | Interactive Data File. | Filed herewith as Exhibit 101. |
EQT GP Holdings, LP | |
/s/ Steven T. Schlotterbeck | |
Steven T. Schlotterbeck | |
President and Chief Executive Officer, EQT GP Services, LLC, the registrant’s General Partner |
EQT GP Holdings, LP | |
/s/ Robert J. McNally | |
Robert J. McNally | |
Senior Vice President and Chief Financial Officer, EQT GP Services, LLC, the registrant’s General Partner |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EQGP. |
/s/ Steven T. Schlotterbeck | April 27, 2017 | ||
Steven T. Schlotterbeck President and Chief Executive Officer, EQT GP Services, LLC, EQGP’s General Partner | |||
/s/ Robert J. McNally | April 27, 2017 | ||
Robert J. McNally Senior Vice President and Chief Financial Officer, EQT GP Services, LLC, EQGP’s General Partner |
Document and Entity Information |
3 Months Ended |
---|---|
Mar. 31, 2017
shares
| |
Document and Entity Information | |
Entity Registrant Name | EQT GP Holdings, LP |
Entity Central Index Key | 0001632933 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End | --12-31 |
Entity Filer Category | Accelerated Filer |
Entity Common Units, Unit Outstanding | 266,165,000 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q1 |
Statements of Consolidated Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||||||||||||||
Income Statement [Abstract] | |||||||||||||||||||
Operating revenues | [1],[2] | $ 203,426 | $ 185,786 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||
Operating and maintenance | [1],[3] | 20,286 | 17,136 | ||||||||||||||||
Selling, general and administrative | [1],[3] | 18,692 | 18,480 | ||||||||||||||||
Depreciation and amortization | [1],[4] | 20,547 | 14,007 | ||||||||||||||||
Total operating expenses | [1] | 59,525 | 49,623 | ||||||||||||||||
Operating income | [1] | 143,901 | 136,163 | ||||||||||||||||
Other income | [1],[5] | 6,009 | 7,602 | ||||||||||||||||
Net interest expense | [1],[6] | 7,922 | 4,551 | ||||||||||||||||
Income before income taxes | [1] | 141,988 | 139,214 | ||||||||||||||||
Income tax expense | [1] | 0 | 3,435 | ||||||||||||||||
Net income | [1],[4],[7] | 141,988 | 135,779 | ||||||||||||||||
Net income attributable to noncontrolling interests | [1] | 80,612 | 77,787 | ||||||||||||||||
Net income attributable to EQT GP Holdings, LP | [1] | 61,376 | 57,992 | ||||||||||||||||
Preacquisition Net Income (Loss) Allocated to Parent | [1] | 0 | (7,670) | ||||||||||||||||
Limited partners' interest in net income | [1] | $ 61,376 | $ 50,322 | ||||||||||||||||
Net income per limited partner unit - basic and diluted (in dollars per share) | [1] | $ 0.23 | $ 0.19 | ||||||||||||||||
Weighted average number of common units outstanding- basic and diluted (in shares) | [1] | 266,183 | 266,173 | ||||||||||||||||
Cash distributions declared per unit (in dollars per share) | [1],[8] | $ 0.191 | $ 0.134 | ||||||||||||||||
|
Statements of Consolidated Operations (Unaudited) (Footnotes) - USD ($) $ in Thousands |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||||
Operating and maintenance expense | [1],[2] | $ 20,286 | $ 17,136 | ||||||
Selling, general and administrative expense | [1],[2] | 18,692 | 18,480 | ||||||
Equity income | [3] | 4,277 | 1,589 | ||||||
EQT Corporation and Subsidiaries | |||||||||
Affiliate revenues | [1] | 143,400 | 135,300 | ||||||
Operating and maintenance expense | [1] | 9,900 | 8,100 | ||||||
Selling, general and administrative expense | 17,700 | 17,100 | |||||||
Other Income | MVP Joint Venture | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Equity income | 4,300 | 1,600 | |||||||
Affiliated Entity | |||||||||
Interest income | $ 1,700 | ||||||||
Affiliated Entity | Variable Interest Entity, Not Primary Beneficiary | |||||||||
Dividends received | $ 2,800 | ||||||||
|
Statements of Consolidated Cash Flows (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||||||
Cash flows from operating activities: | |||||||||
Net income | [1],[2],[3] | $ 141,988 | $ 135,779 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | [1],[2] | 20,547 | 14,007 | ||||||
Deferred income taxes | [2] | 0 | 2,975 | ||||||
Equity income | [2] | (4,277) | (1,589) | ||||||
AFUDC – equity | [2] | (1,699) | (2,937) | ||||||
Non-cash long-term compensation expense | [2] | 451 | 325 | ||||||
Changes in other assets and liabilities: | |||||||||
Accounts receivable | [2] | (968) | (535) | ||||||
Accounts payable | [2] | 420 | (72) | ||||||
Due to/from EQT affiliates | [2] | 366 | (28,563) | ||||||
Other assets and other liabilities | [2] | 3,941 | (3,746) | ||||||
Net cash provided by operating activities | [2] | 160,769 | 115,644 | ||||||
Cash flows from investing activities: | |||||||||
Capital expenditures | [2] | (62,947) | (124,625) | ||||||
Capital contributions to the MVP Joint Venture | [2] | (19,760) | (11,430) | ||||||
Sales of interests in the MVP Joint Venture | [2] | 0 | 12,533 | ||||||
Principal payments received on Preferred Interest | [2] | 1,020 | 0 | ||||||
Net cash used in investing activities | [2] | (81,687) | (123,522) | ||||||
Cash flows from financing activities: | |||||||||
Proceeds from EQM credit facility borrowings | [2] | 50,000 | 71,000 | ||||||
Payments on EQM credit facility borrowings | [2] | (50,000) | (361,000) | ||||||
Proceeds from the EQGP Working Capital Facility loan, net of payments | [2] | 83 | 139 | ||||||
Distributions paid to noncontrolling interest unitholders of EQM | [2] | (49,955) | (39,553) | ||||||
Distributions paid to EQGP unitholders | [2] | (47,111) | (32,472) | ||||||
Capital contributions | [2] | 216 | 0 | ||||||
Net contributions from EQT | [2] | 0 | 9,182 | ||||||
Net cash used in financing activities | [2] | (96,767) | (352,704) | ||||||
Net change in cash and cash equivalents | [2] | (17,685) | (360,582) | ||||||
Cash and cash equivalents at beginning of period | [2] | 60,453 | 360,957 | ||||||
Cash and cash equivalents at end of period | [2] | 42,768 | 375 | ||||||
Cash paid during the period for: | |||||||||
Interest, net of amount capitalized | [2] | $ 9,412 | $ 9,739 | ||||||
|
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||
---|---|---|---|---|---|---|---|
Current assets: | |||||||
Cash and cash equivalents | [1] | $ 42,768 | $ 60,453 | ||||
Accounts receivable (net of allowance for doubtful accounts of $331 as of March 31, 2017 and $319 as of December 31, 2016) | 21,630 | 20,662 | |||||
Accounts receivable – affiliate | 81,654 | 81,358 | |||||
Other current assets | 5,807 | 9,912 | |||||
Total current assets | 151,859 | 172,385 | |||||
Property, plant and equipment | 2,966,817 | 2,894,858 | |||||
Less: accumulated depreciation | (334,352) | (316,024) | |||||
Net property, plant and equipment | 2,632,465 | 2,578,834 | |||||
Investment in unconsolidated entity | 237,308 | 184,562 | |||||
Other assets | 139,519 | 140,668 | |||||
Total assets | 3,161,151 | 3,076,449 | |||||
Current liabilities: | |||||||
Accounts payable | 43,531 | 35,831 | |||||
Due to related party | 20,349 | 20,360 | |||||
Capital contribution payable to MVP Joint Venture | 40,180 | 11,471 | |||||
Accrued interest | 11,760 | 12,016 | |||||
Accrued liabilities | 9,867 | 8,755 | |||||
Total current liabilities | 125,687 | 88,433 | |||||
Long-term debt | 986,137 | 985,732 | |||||
Other long-term liabilities | 10,258 | 9,562 | |||||
Total liabilities | 1,122,082 | 1,083,727 | |||||
Equity: | |||||||
Common (266,165,000 common units issued and outstanding at March 31, 2017 and December 31, 2016) | (1,061,600) | (1,077,100) | |||||
Noncontrolling interests | 3,100,669 | 3,069,822 | |||||
Total equity | [2] | 2,039,069 | 1,992,722 | ||||
Total liabilities and equity | $ 3,161,151 | $ 3,076,449 | |||||
|
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 331 | $ 319 |
Partners' capital common units issued (in shares) | 266,165,000 | 266,165,000 |
Partners' capital common units outstanding (in shares) | 266,165,000 | 266,165,000 |
Statements of Consolidated Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Predecessor Equity |
Common |
Noncontrolling Interests |
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2015 | [1] | $ 1,842,594 | $ 275,545 | $ (1,204,509) | $ 2,771,558 | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||||
Net income | [1] | 135,779 | [2],[3] | 7,670 | 50,322 | 77,787 | ||||||
Capital contributions | [1] | 162 | 162 | |||||||||
Equity-based compensation plans | [1] | 325 | 169 | 156 | ||||||||
Distributions to noncontrolling interest unitholders of EQM | [1] | (39,553) | (39,553) | |||||||||
Net contributions from EQT | [1] | 9,182 | 9,182 | |||||||||
Distributions to EQGP unitholders | [1] | (32,472) | (32,472) | |||||||||
Ending balance at Mar. 31, 2016 | [1] | 1,916,017 | $ 292,397 | (1,186,328) | 2,809,948 | |||||||
Beginning balance at Dec. 31, 2016 | [1] | 1,992,722 | (1,077,100) | 3,069,822 | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||||
Net income | [1] | 141,988 | [2],[3] | 61,376 | 80,612 | |||||||
Capital contributions | [1] | 974 | 974 | |||||||||
Equity-based compensation plans | [1] | 451 | 261 | 190 | ||||||||
Distributions to noncontrolling interest unitholders of EQM | [1] | (49,955) | (49,955) | |||||||||
Distributions to EQGP unitholders | [1] | (47,111) | (47,111) | |||||||||
Ending balance at Mar. 31, 2017 | [1] | $ 2,039,069 | $ (1,061,600) | $ 3,100,669 | ||||||||
|
Financial Statements |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statements | Financial Statements Organization EQGP owns EQT's partnership interests in EQM, a growth-oriented Delaware limited partnership. EQT Midstream Services, LLC (EQM General Partner) is a direct wholly owned subsidiary of EQGP and is the general partner of EQM. EQT GP Services, LLC (EQGP General Partner) is a wholly owned subsidiary of EQT and is the general partner of EQGP. EQGP has no independent operations or material assets other than its partnership interests in EQM. EQGP’s financial statements differ from those of EQM primarily as a result of noncontrolling interest ownership attributable to the publicly held limited partner interests in EQM and additional expenses incurred by EQGP which include selling, general and administrative expenses and net interest expense or income. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQGP as of March 31, 2017 and December 31, 2016, and the results of its operations, cash flows and equity for the three months ended March 31, 2017 and 2016. Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. AVC, Rager and the Gathering Assets were businesses and the October 2016 Acquisition was a transaction between entities under common control; therefore, EQM recorded the assets and liabilities of these entities at their carrying amounts to EQT on the date of the transaction. The difference between EQT’s net carrying amount and the total consideration paid to EQT was recorded as a capital transaction with EQT, which resulted in a reduction in equity. EQGP recast its consolidated financial statements to retrospectively reflect the October 2016 Acquisition as if the entities were owned by EQM for all periods presented; however, the consolidated financial statements are not necessarily indicative of the results of operations that would have occurred if EQM had owned them during the periods reported. Due to the seasonal nature of EQM’s utility customer contracts, the interim statements for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016 as well as “Management's Discussion and Analysis of Financial Condition and Results of Operations” contained therein. Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date which approved a one year deferral of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. EQGP expects to adopt the ASUs using the modified retrospective method of adoption on January 1, 2018. During 2016, EQGP completed an analysis of the impact of the standard on its broad contract types. As a result, EQGP anticipates that this standard will not have a material impact on net income. EQGP is currently performing a detailed review of the impact of the standard on each of its contracts, which it expects to complete by mid-year 2017. EQGP is evaluating the impact of the standard on its related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The changes primarily affect the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. This standard will eliminate the cost method of accounting for equity investments. The ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, with early adoption of certain provisions permitted. EQGP anticipates this standard will not have a material impact on its financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. The primary effect of adopting the new standard will be to record assets and obligations for contracts currently recognized as operating leases. EQGP has completed a high level identification of agreements covered by this standard and will continue to evaluate the impact this standard will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. EQGP is currently evaluating the impact this standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the presentation and classification of eight specific cash flow issues. The amendments in the ASU will be effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. EQGP anticipates this standard will not have a material impact on its financial statements and related disclosures. |
October 2016 Acquisition |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
October 2016 Acquisition | October 2016 Acquisition Effective October 1, 2016, EQM acquired from EQT 100% of the outstanding limited liability company interests of AVC and Rager as well as the Gathering Assets. The aggregate consideration paid by EQM to EQT of $275 million was funded by borrowings under the $750 Million Facility (as defined in Note G). Prior to the October 2016 Acquisition, EQM operated the AVC facilities as part of its transmission and storage system under a lease agreement with EQT. The lease was a capital lease under GAAP; therefore, revenues and expenses associated with the AVC facilities were included in EQM’s historical consolidated financial statements and the AVC facilities were depreciated over the lease term of 25 years. In conjunction with the October 2016 Acquisition, the lease agreement was terminated. As a result, EQGP's recast of the consolidated financial statements included recasting depreciation expense recognized for the periods prior to the transaction to reflect the pipeline’s useful life of 40 years. The cumulative capital lease depreciation recorded for periods prior to the transaction was eliminated through equity at the time of the acquisition and the consolidated financial statements now reflect the depreciation expense based on the 40 year useful life. This adjustment increased previously reported net income by $2.0 million for the three months ended March 31, 2016. |
Equity and Net Income per Limited Partner Unit |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Net Income per Limited Partner Unit | Equity and Net Income per Limited Partner Unit EQGP Equity. As of March 31, 2017, EQT indirectly held 239,715,000 EQGP common units, representing a 90.1% limited partner interest, and the entire non-economic general partner interest in EQGP, while the public held 26,450,000 EQGP common units, representing a 9.9% limited partner interest in EQGP. Net Income per Limited Partner Unit. Net income attributable to AVC, Rager and the Gathering Assets for periods prior to October 1, 2016 was not allocated to the limited partners for purposes of calculating net income per limited partner unit. The weighted average phantom unit awards included in the calculation of basic weighted average limited partner units outstanding was 18,219 and 7,662 for the three months ended March 31, 2017 and 2016, respectively. EQM Equity. The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2016 through December 31, 2016. EQM did not issue any units during the first quarter of 2017.
As of March 31, 2017, EQGP and its subsidiaries owned 21,811,643 EQM common units, representing a 26.6% limited partner interest, 1,443,015 EQM general partner units, representing a 1.8% general partner interest, and all of the incentive distribution rights (IDRs) in EQM. |
Financial Information by Business Segment |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information by Business Segment | Financial Information by Business Segment
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In the ordinary course of business, EQGP and EQM engage in transactions with EQT and its affiliates. EQM has various contracts with affiliates including, but not limited to, transportation service and precedent agreements, storage agreements and gas gathering agreements. EQGP and EQM each have an omnibus agreement with EQT. Pursuant to the omnibus agreements, EQT performs centralized corporate, general and administrative services for EQGP and EQM. In exchange, EQGP and EQM reimburse EQT for the expenses incurred in providing these services, including direct and indirect costs and expenses attributable to EQT's long-term incentive programs. Pursuant to an operation and management services agreement, EQT Gathering, LLC (EQT Gathering), an indirect wholly owned subsidiary of EQT, provides EQM’s pipelines and storage facilities with certain operational and management services. EQM reimburses EQT Gathering for such services pursuant to the terms of the EQM omnibus agreement. The expenses for which EQGP and EQM reimburse EQT and its subsidiaries may not necessarily reflect the actual expenses that EQGP and EQM would incur on a stand-alone basis and EQGP and EQM are unable to estimate what those expenses would be on a stand-alone basis. |
Investment in Unconsolidated Entity |
3 Months Ended |
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Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Entity | Investment in Unconsolidated Entity MVP Joint Venture. The MVP Joint Venture plans to construct the Mountain Valley Pipeline (MVP), an estimated 300-mile natural gas interstate pipeline spanning from northern West Virginia to southern Virginia. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of March 31, 2017. The MVP Joint Venture has been determined to be a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. EQM is not the primary beneficiary because it does not have the power to direct the activities of the MVP Joint Venture that most significantly impact its economic performance. Certain business decisions require the approval of owners holding more than a 66 2/3% interest in the MVP Joint Venture and no one member owns more than a 66 2/3% interest. EQM accounts for the interest in the MVP Joint Venture as an equity method investment as EQM has the ability to exercise significant influence over operating and financial policies of the MVP Joint Venture. In February 2017, the MVP Joint Venture issued a capital call notice to MVP Holdco, LLC (MVP Holdco), a direct wholly owned subsidiary of EQM, for a total amount of $40.2 million, of which $22.1 million was paid on April 13, 2017 and the remaining $18.1 million is expected to be paid on May 12, 2017. The capital contribution payable has been reflected on the consolidated balance sheet as of March 31, 2017 with a corresponding increase to EQM's investment in the MVP Joint Venture. Equity income related to EQM's portion of the MVP Joint Venture's AFUDC on construction of the MVP is reported in other income in the statements of consolidated operations and was $4.3 million and $1.6 million for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, EQM had issued a $91 million performance guarantee in favor of the MVP Joint Venture to provide performance assurances for MVP Holdco's obligations to fund its proportionate share of the construction budget for the MVP. Upon the FERC’s initial release to begin construction of the MVP, EQM's guarantee will terminate and EQM will be obligated to issue a new guarantee in an amount equal to 33% of MVP Holdco’s remaining obligations to make capital contributions to the MVP Joint Venture in connection with the then remaining construction budget, less, subject to certain limits, any credit assurances issued by any affiliate of EQM under such affiliate's precedent agreement with the MVP Joint Venture. As of March 31, 2017, EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $328.3 million, which included the investment in unconsolidated entity balance on the consolidated balance sheet as of March 31, 2017 and amounts which could have become due under the performance guarantee as of that date. |
Credit Facility Borrowings |
3 Months Ended |
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Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facility Borrowings | Credit Facility Borrowings EQGP Working Capital Facility. EQGP has a Working Capital Loan Agreement with EQT (the Working Capital Facility) that provides for interest bearing loans of up to $50 million outstanding at any one time and matures on the earlier of February 18, 2019 or at least 90 days after EQT gives notice of termination. EQGP had approximately $0.2 million and $0.1 million of borrowings outstanding under the Working Capital Facility as of March 31, 2017 and December 31, 2016, respectively, which were included in the due to related party balances on the consolidated balance sheets. During the three months ended March 31, 2017 and 2016, the maximum amounts of EQGP’s outstanding borrowings under the credit facility at any time were approximately $0.3 million and $0.2 million, respectively, and the average daily balances were approximately $0.2 million and $0.1 million, respectively. Interest was incurred at weighted average annual interest rates of approximately 2.3% and 1.9% for the three months ended March 31, 2017 and 2016, respectively. EQM $750 Million Facility. EQM has a $750 million credit facility that expires in February 2019. The credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions, to repurchase units and for general partnership purposes. EQM’s $750 Million Facility contains various provisions that, if not complied with, could result in termination of the credit facility, require early payment of amounts outstanding or similar actions. The most significant covenants and events of default under the $750 Million Facility relate to maintenance of a permitted leverage ratio, limitations on transactions with affiliates, limitations on restricted payments, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of and certain other defaults under other financial obligations and change of control provisions. Under the $750 Million Facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions). EQM had no borrowings outstanding on its $750 Million Facility as of March 31, 2017 and December 31, 2016. There were no borrowings outstanding at any time during the three months ended March 31, 2017. During the three months ended March 31, 2016, the maximum amount of EQM’s outstanding borrowings under the credit facility at any time was $299 million and the average daily balance was approximately $134 million. Interest was incurred at a weighted average annual interest rate of approximately 1.9% for the three months ended March 31, 2016. EQM 364-Day Facility. In October 2016, EQM entered into a $500 million, 364-day, uncommitted revolving loan agreement with EQT that matures on October 25, 2017 and will automatically renew for successive 364-day periods unless EQT delivers a non-renewal notice at least 60 days prior to the then current maturity date. Interest accrues on outstanding borrowings at an interest rate equal to the rate then applicable to similar loans under the $750 Million Facility, or a successor revolving credit facility, less the sum of (i) the then applicable commitment fee under the $750 Million Facility and (ii) 10 basis points. EQM had no borrowings outstanding on the 364-Day Facility as of March 31, 2017 and December 31, 2016. During the three months ended March 31, 2017, the maximum amount of EQM’s outstanding borrowings under the credit facility at any time was $50 million and the average daily balance was approximately $26 million. Interest was incurred at a weighted average annual interest rate of approximately 2.0% for the three months ended March 31, 2017. As of March 31, 2017, EQGP and EQM were in compliance with all debt provisions and covenants. |
Fair Value Measurements |
3 Months Ended |
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Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying values of cash and cash equivalents, accounts receivable, amounts due to/from related parties and accounts payable approximate fair value due to the short maturity of the instruments; these are considered Level 1 fair values. The carrying value of the credit facility borrowings approximates fair value as the interest rates are based on prevailing market rates; this is considered a Level 1 fair value. As EQM's long-term debt is not actively traded, its fair value is a Level 2 fair value measurement estimated using a standard industry income approach model which utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk. As of March 31, 2017 and December 31, 2016, the estimated fair value of EQM's long-term debt was approximately $1,000 million and $982 million, respectively, and the carrying value of EQM's long-term debt was approximately $986 million at both dates. The fair value of the Preferred Interest is a Level 3 fair value measurement which is estimated using an income approach model utilizing a market-based discount rate. As of March 31, 2017 and December 31, 2016, the estimated fair value of the Preferred Interest was approximately $132 million at both periods and the carrying value of the Preferred Interest was approximately $122 million and $123 million, respectively. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As a result of its limited partnership structure, EQGP is not subject to federal and state income taxes. For federal and state income tax purposes, all income, expenses, gains, losses and tax credits generated by EQGP flow through to EQGP's unitholders; accordingly, EQGP does not record a provision for income taxes. As discussed in Note A, EQGP’s consolidated financial statements have been retrospectively recast to include the pre-acquisition results of AVC, Rager and the Gathering Assets, which were acquired by EQM effective on October 1, 2016, because the transaction was between entities under common control. Accordingly, the income tax effects associated with these operations prior to acquisition are reflected in the consolidated financial statements as they were previously part of EQT’s consolidated federal tax return. |
Consolidated Variable Interest Entity |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Variable Interest Entity | Consolidated Variable Interest Entity EQGP determined EQM to be a variable interest entity. Through EQGP's ownership and control of the EQM General Partner, EQGP has the power to direct the activities that most significantly impact EQM's economic performance. In addition, through EQGP's general partner interest, IDRs and limited partner interest in EQM, EQGP has the obligation to absorb EQM's losses and the right to receive benefits from EQM in accordance with its general partner and limited partner ownership percentages and IDRs. Therefore, EQGP has a controlling financial interest in EQM, is the primary beneficiary of EQM and consolidates EQM. See Note 8 to the consolidated financial statements in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016 for additional information. EQGP's only cash-generating assets consist of its partnership interests in EQM. As a result, EQGP's results of operations do not differ materially from the results of operations of EQM. The risks associated with EQM's operations are discussed in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016 and this Quarterly Report on Form 10-Q. See further discussion of the impact that EQGP's involvement in EQM has on EQGP's financial position, results of operations and cash flows included in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016, including the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations." For a discussion of related party transactions, see Note 5 of Item 8 in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016 and Note E contained herein. The following table presents amounts included in EQGP's consolidated balance sheets that were for the use or obligation of EQM.
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Distributions |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions | Distributions The following table summarizes the quarterly cash distributions declared by EQM and EQGP to their respective unitholders from January 1, 2016 through March 31, 2017.
On April 25, 2017, the Board of Directors of the EQGP General Partner declared a cash distribution to EQGP’s unitholders for the first quarter of 2017 of $0.191 per common unit. The cash distribution will be paid on May 24, 2017 to unitholders of record at the close of business on May 5, 2017. |
Financial Statements (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQGP as of March 31, 2017 and December 31, 2016, and the results of its operations, cash flows and equity for the three months ended March 31, 2017 and 2016. Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. AVC, Rager and the Gathering Assets were businesses and the October 2016 Acquisition was a transaction between entities under common control; therefore, EQM recorded the assets and liabilities of these entities at their carrying amounts to EQT on the date of the transaction. The difference between EQT’s net carrying amount and the total consideration paid to EQT was recorded as a capital transaction with EQT, which resulted in a reduction in equity. EQGP recast its consolidated financial statements to retrospectively reflect the October 2016 Acquisition as if the entities were owned by EQM for all periods presented; however, the consolidated financial statements are not necessarily indicative of the results of operations that would have occurred if EQM had owned them during the periods reported. Due to the seasonal nature of EQM’s utility customer contracts, the interim statements for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in EQGP's Annual Report on Form 10-K for the year ended December 31, 2016 as well as “Management's Discussion and Analysis of Financial Condition and Results of Operations” contained therein. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date which approved a one year deferral of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. EQGP expects to adopt the ASUs using the modified retrospective method of adoption on January 1, 2018. During 2016, EQGP completed an analysis of the impact of the standard on its broad contract types. As a result, EQGP anticipates that this standard will not have a material impact on net income. EQGP is currently performing a detailed review of the impact of the standard on each of its contracts, which it expects to complete by mid-year 2017. EQGP is evaluating the impact of the standard on its related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The changes primarily affect the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. This standard will eliminate the cost method of accounting for equity investments. The ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, with early adoption of certain provisions permitted. EQGP anticipates this standard will not have a material impact on its financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases. The ASU requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. The primary effect of adopting the new standard will be to record assets and obligations for contracts currently recognized as operating leases. EQGP has completed a high level identification of agreements covered by this standard and will continue to evaluate the impact this standard will have on its financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. EQGP is currently evaluating the impact this standard will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the presentation and classification of eight specific cash flow issues. The amendments in the ASU will be effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. EQGP anticipates this standard will not have a material impact on its financial statements and related disclosures. |
Equity and Net Income per Limited Partner Unit (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Units, Subordinated Units, and General Partner Units Issued | The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 2016 through December 31, 2016. EQM did not issue any units during the first quarter of 2017.
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Financial Information by Business Segment (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from External Customers and Operating Income and Reconciliation to Net Income |
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Schedule of Segment Assets |
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Schedule of Depreciation and Amortization and Expenditures for Segment Assets |
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Consolidated Variable Interest Entity (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Consolidated Variable Interest Entity | The following table presents amounts included in EQGP's consolidated balance sheets that were for the use or obligation of EQM.
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Distributions (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash Distributions to Unitholders | The following table summarizes the quarterly cash distributions declared by EQM and EQGP to their respective unitholders from January 1, 2016 through March 31, 2017.
On April 25, 2017, the Board of Directors of the EQGP General Partner declared a cash distribution to EQGP’s unitholders for the first quarter of 2017 of $0.191 per common unit. The cash distribution will be paid on May 24, 2017 to unitholders of record at the close of business on May 5, 2017. |
October 2016 Acquisition (Details) - USD ($) |
3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2016 |
Mar. 31, 2017 |
Sep. 30, 2016 |
Mar. 31, 2016 |
|||||||
Business Acquisition [Line Items] | ||||||||||
Net income | [1],[2],[3] | $ 141,988,000 | $ 135,779,000 | |||||||
EQM | AVC, Rager, and Gathering Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Membership interest (as a percent) | 100.00% | |||||||||
Consideration paid to acquire preferred interest | $ 275,000,000 | |||||||||
$750 Million Credit Facility | Line of Credit | EQM | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Line of credit facility | $ 750,000,000 | |||||||||
Pipelines | EQM | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Capital lease term | 25 years | |||||||||
Useful life | 40 years | |||||||||
Restatement Adjustment | EQM | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Net income | $ 2,000,000 | |||||||||
|
Equity and Net Income per Limited Partner Unit - Holdings of EQGP Equity (Details) - shares |
12 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Class of Stock [Line Items] | ||
Partners' capital common units outstanding (in shares) | 266,165,000 | 266,165,000 |
Number of common units issued for IPO (in shares) | 2,949,309 | |
Limited Partner Common Units | ||
Class of Stock [Line Items] | ||
Limited partner ownership interest (as a percent) | 9.90% | |
Number of common units issued for IPO (in shares) | 26,450,000 | 2,949,309 |
Limited Partner Common Units | Affiliated Entity | ||
Class of Stock [Line Items] | ||
Partners' capital common units outstanding (in shares) | 21,811,643 | |
Limited partner ownership interest (as a percent) | 26.60% | |
Limited Partner Common Units | Affiliated Entity | EQT Corporation and Subsidiaries | ||
Class of Stock [Line Items] | ||
Partners' capital common units outstanding (in shares) | 239,715,000 | |
Limited partner ownership interest (as a percent) | 90.10% |
Equity and Net Income per Limited Partner Unit - Net Income Per Limited Partner Unit (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Phantom Share Units (PSUs) | Limited Partner | ||
Class of Stock [Line Items] | ||
Weighted average phantom unit awards (in shares) | 18,219 | 7,662 |
Financial Information by Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||
Total operating revenues | [1],[2] | $ 203,426 | $ 185,786 | ||||||||||||||
Operating income: | |||||||||||||||||
Total operating income | [1] | 143,901 | 136,163 | ||||||||||||||
Reconciliation of operating income to net income: | |||||||||||||||||
Other income | [1],[3] | 6,009 | 7,602 | ||||||||||||||
Net interest expense | [1],[4] | 7,922 | 4,551 | ||||||||||||||
Income tax expense | [1] | 0 | 3,435 | ||||||||||||||
Net income | [1],[5],[6] | 141,988 | 135,779 | ||||||||||||||
Segment assets: | |||||||||||||||||
Total assets | 3,161,151 | $ 3,076,449 | |||||||||||||||
Depreciation and amortization: | |||||||||||||||||
Total | [1],[5] | 20,547 | 14,007 | ||||||||||||||
Expenditures for segment assets: | |||||||||||||||||
Total | 70,227 | 133,158 | |||||||||||||||
Accrued capital expenditures | 34,000 | 32,700 | 26,700 | $ 24,100 | |||||||||||||
Gathering | |||||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||
Total operating revenues | 102,329 | 98,009 | |||||||||||||||
Operating income: | |||||||||||||||||
Total operating income | 73,589 | 72,604 | |||||||||||||||
Depreciation and amortization: | |||||||||||||||||
Total | 8,860 | 7,263 | |||||||||||||||
Expenditures for segment assets: | |||||||||||||||||
Total | 48,838 | 73,087 | |||||||||||||||
Transmission | |||||||||||||||||
Revenues from external customers (including affiliates): | |||||||||||||||||
Total operating revenues | 101,097 | 87,777 | |||||||||||||||
Operating income: | |||||||||||||||||
Total operating income | 71,524 | 64,516 | |||||||||||||||
Depreciation and amortization: | |||||||||||||||||
Total | 11,687 | 6,744 | |||||||||||||||
Expenditures for segment assets: | |||||||||||||||||
Total | 21,389 | 60,071 | |||||||||||||||
Operating segments | |||||||||||||||||
Segment assets: | |||||||||||||||||
Total assets | 2,755,955 | 2,706,344 | |||||||||||||||
Operating segments | Gathering | |||||||||||||||||
Segment assets: | |||||||||||||||||
Total assets | 1,329,846 | 1,292,713 | |||||||||||||||
Operating segments | Transmission | |||||||||||||||||
Segment assets: | |||||||||||||||||
Total assets | 1,426,109 | 1,413,631 | |||||||||||||||
Headquarters | |||||||||||||||||
Operating income: | |||||||||||||||||
Total operating income | (1,212) | $ (957) | |||||||||||||||
Segment assets: | |||||||||||||||||
Total assets | $ 405,196 | $ 370,105 | |||||||||||||||
|
Credit Facility Borrowings - EQGP Working Capital Facility (Details) - Line of Credit - EQT Corporation and Subsidiaries - Working Capital Facility - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Short-term Debt [Line Items] | |||
Interest bearing loans outstanding (up to) | $ 50,000,000 | ||
Interest bearing loans outstanding maturity period (at least) | 90 days | ||
Credit facility borrowings | $ 200,000 | $ 100,000 | |
Maximum amount of short term loans outstanding | 300,000 | $ 200,000 | |
Average daily balance of short term loans outstanding | $ 200,000 | $ 100,000 | |
Weighted average annual interest rate (as a percent) | 2.30% | 1.90% |
Credit Facility Borrowings - EQM Credit Facilities (Details) - EQM |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2016
USD ($)
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Consolidated leverage ratio | 5.00 | |||
Consolidated leverage ratio for certain measurement periods | 5.50 | |||
Line of Credit | $750 Million Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility | $ 750,000,000 | |||
Maximum amount of short term loans outstanding | 0 | $ 299,000,000 | ||
Average daily balance of short term loans outstanding | $ 134,000,000 | |||
Weighted average annual interest rate (as a percent) | 1.90% | |||
Line of Credit | Revolving Credit Facility | $750 Million Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding amount | $ 0 | $ 0 | ||
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis point spread | 0.10% | |||
Line of Credit | Revolving Credit Facility | $500 Million Uncommitted Revolving Loan Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility | $ 500,000,000 | |||
Maximum amount of short term loans outstanding | $ 50,000,000 | |||
Average daily balance of short term loans outstanding | $ 26,000,000 | |||
Weighted average annual interest rate (as a percent) | 2.00% | |||
Line of credit expiration period | 364 days | |||
Renewal notice period prior to current maturity date (at least) | 60 days | |||
Borrowings outstanding | $ 0 | $ 0 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of long-term debt | $ 986,137 | $ 985,732 |
EQM | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of long-term debt | 1,000,000 | 982,000 |
Carrying value of long-term debt | 986,000 | 986,000 |
Affiliated Entity | Variable Interest Entity, Not Primary Beneficiary | EQM | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of Preferred Interest | 122,000 | 123,000 |
Estimate of Fair Value Measurement [Member] | Affiliated Entity | Variable Interest Entity, Not Primary Beneficiary | EQM | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of Preferred Interest | $ 132,000 | $ 132,000 |
Consolidated Variable Interest Entity (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Cash and cash equivalents | ||
Variable Interest Entity [Line Items] | ||
Assets | $ 42,497 | $ 60,368 |
Accounts receivable | ||
Variable Interest Entity [Line Items] | ||
Assets | 21,630 | 20,662 |
Accounts receivable – affiliate | ||
Variable Interest Entity [Line Items] | ||
Assets | 81,654 | 81,358 |
Other current assets | ||
Variable Interest Entity [Line Items] | ||
Assets | 5,685 | 9,671 |
Net property, plant and equipment | ||
Variable Interest Entity [Line Items] | ||
Assets | 2,632,465 | 2,578,834 |
Investment in unconsolidated entity | ||
Variable Interest Entity [Line Items] | ||
Assets | 237,308 | 184,562 |
Other assets | ||
Variable Interest Entity [Line Items] | ||
Assets | 139,236 | 140,385 |
Accounts payable | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 43,474 | 35,830 |
Due to related party | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 18,672 | 19,027 |
Capital contribution payable to MVP Joint Venture | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 40,180 | 11,471 |
Accrued interest | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 11,760 | 12,016 |
Accrued liabilities | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 9,867 | 8,648 |
Long-term debt | ||
Variable Interest Entity [Line Items] | ||
Liabilities | 986,137 | 985,732 |
Other long-term liabilities | ||
Variable Interest Entity [Line Items] | ||
Liabilities | $ 10,258 | $ 9,562 |
Distributions - Summary of Cash Distributions to Unitholders (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
|||||||
Distribution Made to Limited Partner [Line Items] | |||||||||||
Total Quarterly Distribution per Common Unit (in dollars per share) | $ 0.191 | [1],[2] | $ 0.177 | $ 0.165 | $ 0.15 | $ 0.134 | [1],[2] | ||||
Total Distribution | $ 50,838 | $ 47,111 | $ 43,917 | $ 39,925 | $ 35,666 | ||||||
EQM | |||||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||||
Total Quarterly Distribution per Common Unit (in dollars per share) | $ 0.89 | $ 0.85 | $ 0.815 | $ 0.78 | $ 0.745 | ||||||
EQM Total Distribution | $ 104,238 | $ 97,822 | $ 92,208 | $ 86,595 | $ 78,093 | ||||||
EQGP | EQM | |||||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||||
Total Distribution | $ 51,933 | $ 47,867 | $ 44,310 | $ 40,755 | $ 36,506 | ||||||
|
Distributions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 25, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Apr. 27, 2017 |
|||||||
Class of Stock [Line Items] | |||||||||||||
Cash distributions declared per unit (in dollars per share) | $ 0.191 | [1],[2] | $ 0.177 | $ 0.165 | $ 0.15 | $ 0.134 | [1],[2] | ||||||
Cash distribution in respect of general partner interest | $ 50,838 | $ 47,111 | $ 43,917 | $ 39,925 | $ 35,666 | ||||||||
EQM | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash distributions declared per unit (in dollars per share) | $ 0.89 | $ 0.85 | $ 0.815 | $ 0.78 | $ 0.745 | ||||||||
EQM | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash distributions declared per unit (in dollars per share) | $ 0.89 | ||||||||||||
Common units outstanding (in shares) | 80,581,758 | ||||||||||||
EQM | Subsequent Event | Limited Partner | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash distribution in respect of general partner interest | $ 19,400 | ||||||||||||
EQM | Subsequent Event | General Partner | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash distribution in respect of general partner interest | 1,800 | ||||||||||||
Cash distribution related to incentive distribution rights | $ 30,700 | ||||||||||||
EQGP | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash distributions declared per unit (in dollars per share) | $ 0.191 | ||||||||||||
|
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