EQT Midstream Partners, LP	12 Months Ended
Dec. 31, 2012
EQT Midstream Partners, LP
EQT Midstream Partners, LP	2. EQT Midstream Partners, LP On July 2, 2012, the Partnership, a subsidiary of the Company, completed an underwritten initial public offering (IPO) of 14,375,000 common units representing limited partner interests in the Partnership, which represented 40.6% of the Partnership’s outstanding equity. The Company retained a 59.4% equity interest in the Partnership, including 2,964,718 common units, 17,339,718 subordinated units and a 2% general partner interest. Prior to the IPO, the Company contributed to the Partnership 100% of Equitrans, LP (Equitrans, the Company’s FERC-regulated transmission, storage and gathering subsidiary). An indirect wholly-owned subsidiary of EQT serves as the general partner of the Partnership, and the Company continues to operate the Equitrans business pursuant to the contractual arrangements set forth below. The Company continues to consolidate the results of the Partnership but records an income tax provision only as to its ownership percentage. EQT records the noncontrolling interest of the public limited partners in EQT’s financial statements. Also, in connection with the closing of the IPO: · The Partnership, its general partner and EQT entered into an Omnibus Agreement (Omnibus Agreement), pursuant to which, among other things, EQT agreed to provide the Partnership with general and administrative services and a license to use the name “EQT” and related marks in connection with the Partnership’s business. The Omnibus Agreement also provides for certain indemnification and reimbursement obligations between EQT and the Partnership. · EQT’s subsidiary, EQT Gathering, LLC (EQT Gathering), and the Partnership entered into an operation and management services agreement (Services Agreement), pursuant to which EQT Gathering provides the Partnership’s pipelines and storage facilities with certain operational and management services. The Services Agreement also provides for certain indemnification and reimbursement obligations between the Partnership and EQT Gathering. · The Partnership entered into a $350 million revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders, which will expire on July 2, 2017. The credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes. The Company is not a guarantor of the Partnership’s obligations under the credit facility. · As a result of the IPO, the Company reversed $5.4 million of net deferred tax liability related to temporary differences between book and tax basis that will no longer impact the Company. · The Company and the Partnership granted certain EQT employees, including executive officers of the Company and the Partnership’s general partner, performance awards representing 146,490 common units of the Partnership. The Company accounted for these awards as equity awards using the grant date fair value. Additionally, the Partnership’s general partner granted each of its independent directors 4,780 share-based phantom units of the Partnership, which units vested upon grant. The value of the phantom units will be paid in common units of the Partnership on the earlier of the director’s death or retirement from the general partner’s Board of Directors. The Company accounts for these awards as equity awards and, as such, recorded compensation expense for the fair value of the awards at the grant date fair value. The Partnership received cash proceeds, net of issuance costs, of approximately $277 million upon closing of the IPO, which increased the noncontrolling interest component of total equity. Approximately $231 million of the proceeds were distributed to EQT, $12 million was retained by the Partnership to replenish amounts distributed by Equitrans to EQT prior to the IPO, $32 million was retained by the Partnership to pre-fund certain maintenance capital expenditures and $2 million was used by the Partnership to pay revolving credit facility origination fees associated with the revolving credit agreement entered into by the Partnership at the closing of the IPO. The Partnership paid distributions of $5.0 million to noncontrolling interests at $0.35 per common unit during 2012.

2. EQT Midstream Partners, LP

On July 2, 2012, the Partnership, a subsidiary of the Company, completed an underwritten initial public offering (IPO) of 14,375,000 common units representing limited partner interests in the Partnership, which represented 40.6% of the Partnership’s outstanding equity. The Company retained a 59.4% equity interest in the Partnership, including 2,964,718 common units, 17,339,718 subordinated units and a 2% general partner interest. Prior to the IPO, the Company contributed to the Partnership 100% of Equitrans, LP (Equitrans, the Company’s FERC-regulated transmission, storage and gathering subsidiary). An indirect wholly-owned subsidiary of EQT serves as the general partner of the Partnership, and the Company continues to operate the Equitrans business pursuant to the contractual arrangements set forth below. The Company continues to consolidate the results of the Partnership but records an income tax provision only as to its ownership percentage. EQT records the noncontrolling interest of the public limited partners in EQT’s financial statements.

Also, in connection with the closing of the IPO:

· The Partnership, its general partner and EQT entered into an Omnibus Agreement (Omnibus Agreement), pursuant to which, among other things, EQT agreed to provide the Partnership with general and administrative services and a license to use the name “EQT” and related marks in connection with the Partnership’s business. The Omnibus Agreement also provides for certain indemnification and reimbursement obligations between EQT and the Partnership.

· EQT’s subsidiary, EQT Gathering, LLC (EQT Gathering), and the Partnership entered into an operation and management services agreement (Services Agreement), pursuant to which EQT Gathering provides the Partnership’s pipelines and storage facilities with certain operational and management services. The Services Agreement also provides for certain indemnification and reimbursement obligations between the Partnership and EQT Gathering.

· The Partnership entered into a $350 million revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders, which will expire on July 2, 2017. The credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes. The Company is not a guarantor of the Partnership’s obligations under the credit facility.

· As a result of the IPO, the Company reversed $5.4 million of net deferred tax liability related to temporary differences between book and tax basis that will no longer impact the Company.

· The Company and the Partnership granted certain EQT employees, including executive officers of the Company and the Partnership’s general partner, performance awards representing 146,490 common units of the Partnership. The Company accounted for these awards as equity awards using the grant date fair value. Additionally, the Partnership’s general partner granted each of its independent directors 4,780 share-based phantom units of the Partnership, which units vested upon grant. The value of the phantom units will be paid in common units of the Partnership on the earlier of the director’s death or retirement from the general partner’s Board of Directors. The Company accounts for these awards as equity awards and, as such, recorded compensation expense for the fair value of the awards at the grant date fair value.

The Partnership received cash proceeds, net of issuance costs, of approximately $277 million upon closing of the IPO, which increased the noncontrolling interest component of total equity. Approximately $231 million of the proceeds were distributed to EQT, $12 million was retained by the Partnership to replenish amounts distributed by Equitrans to EQT prior to the IPO, $32 million was retained by the Partnership to pre-fund certain maintenance capital expenditures and $2 million was used by the Partnership to pay revolving credit facility origination fees associated with the revolving credit agreement entered into by the Partnership at the closing of the IPO.

The Partnership paid distributions of $5.0 million to noncontrolling interests at $0.35 per common unit during 2012.