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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Eqgp Holdings, Lp | NYSE:EQGP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 19.97 | 0 | 01:00:00 |
(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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or
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 001-37380
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DELAWARE
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30-0855134
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania
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15222
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(Address of principal executive offices)
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(Zip code)
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(412) 553-5700
(Registrant’s telephone number, including area code)
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Page No.
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Abbreviations
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Measurements
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ASU
– Accounting Standards Update
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Btu
= one British thermal unit
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FASB
–
Financial Accounting Standards Board
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BBtu
= billion British thermal units
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FERC
– Federal Energy Regulatory Commission
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Bcf
= billion cubic feet
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GAAP
– United States Generally Accepted Accounting Principles
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Dth
= dekatherm or million British thermal units
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IPO
– Initial Public Offering
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MMBtu
= million British thermal units
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IRS
– Internal Revenue Service
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Mcf
= thousand cubic feet
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SEC
– Securities and Exchange Commission
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MMcf
= million cubic feet
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
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2017
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2016
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2017
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2016
|
||||||||
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(Thousands, except per unit amounts)
|
||||||||||||||
Operating revenues
(2)
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$
|
198,966
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$
|
178,042
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$
|
402,392
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$
|
363,828
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Operating expenses:
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||||
Operating and maintenance
(3)
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20,581
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16,353
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40,867
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33,489
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||||
Selling, general and administrative
(3)
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16,482
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18,903
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35,174
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37,383
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||||
Depreciation and amortization
|
21,400
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|
14,531
|
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|
41,947
|
|
|
28,538
|
|
||||
Total operating expenses
|
58,463
|
|
|
49,787
|
|
|
117,988
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|
|
99,410
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|
||||
Operating income
|
140,503
|
|
|
128,255
|
|
|
284,404
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|
|
264,418
|
|
||||
Other income
(4)
|
6,709
|
|
|
10,409
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|
12,718
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|
18,011
|
|
||||
Net interest expense
(5)
|
8,658
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|
|
4,092
|
|
|
16,580
|
|
|
8,643
|
|
||||
Income before income taxes
|
138,554
|
|
|
134,572
|
|
|
280,542
|
|
|
273,786
|
|
||||
Income tax expense
|
—
|
|
|
3,485
|
|
|
—
|
|
|
6,920
|
|
||||
Net income
|
138,554
|
|
|
131,087
|
|
|
280,542
|
|
|
266,866
|
|
||||
Net income attributable to noncontrolling interests
|
75,224
|
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72,744
|
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155,836
|
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|
150,531
|
|
||||
Net income attributable to EQT GP Holdings, LP
|
$
|
63,330
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$
|
58,343
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$
|
124,706
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|
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$
|
116,335
|
|
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|
||||||||
Calculation of limited partners' interest in net income:
|
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|
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|
||||||||
Net income attributable to EQT GP Holdings, LP
|
$
|
63,330
|
|
|
$
|
58,343
|
|
|
$
|
124,706
|
|
|
$
|
116,335
|
|
Less pre-acquisition net income allocated to parent
|
—
|
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(7,097
|
)
|
|
—
|
|
|
(14,767
|
)
|
||||
Limited partners' interest in net income
|
$
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63,330
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$
|
51,246
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$
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124,706
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$
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101,568
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||||||||
Net income per limited partner unit – basic and diluted
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$
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0.24
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$
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0.19
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$
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0.47
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$
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0.38
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Weighted average common units outstanding – basic and diluted
|
266,186
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266,176
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266,184
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266,174
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||||
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||||||||
Cash distributions declared per unit
(6)
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$
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0.21
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$
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0.15
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$
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0.401
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$
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0.284
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(1)
|
As discussed in Note A, EQGP’s consolidated financial statements for the
three and six
months ended
June 30, 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.
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(2)
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Operating revenues included affiliate revenues from EQT of
$148.2 million
and
$137.5 million
for the
three months ended June 30, 2017
and
2016
, respectively, and
$291.6 million
and
$272.9 million
for the
six months ended June 30, 2017
and
2016
, respectively. See Note E.
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(3)
|
Operating and maintenance expense included charges from EQT of
$9.3 million
and
$8.6 million
for the
three months ended June 30, 2017
and
2016
, respectively, and
$19.2 million
and
$16.7 million
for the
six months ended June 30, 2017
and
2016
, respectively. Selling, general and administrative expense included charges from EQT of
$15.7 million
and
$17.5 million
for the
three months ended June 30, 2017
and
2016
, respectively, and
$33.4 million
and
$34.6 million
for the
six months ended June 30, 2017
and
2016
, respectively. See Note E.
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(4)
|
For the
three and six
months ended
June 30, 2017
, other income included equity income from Mountain Valley Pipeline, LLC (MVP Joint Venture) of
$5.1 million
and
$9.4 million
, respectively. For the
three and six
months ended
June 30, 2016
, other income included distributions received from EES of
$2.8 million
and
$5.5 million
, respectively, and equity income from the MVP Joint Venture of
$1.9 million
and
$3.4 million
, respectively. See Note F.
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(5)
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For the
three and six
months ended
June 30, 2017
, net interest expense included
$1.7 million
and
$3.4 million
, respectively, of interest income on the Preferred Interest in EES.
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(6)
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Represents the cash distributions declared related to the period presented. See Note K.
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Six Months Ended
June 30, |
||||||
|
2017
|
|
2016
|
||||
|
(Thousands)
|
||||||
Cash flows from operating activities:
|
|
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|
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Net income
|
$
|
280,542
|
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$
|
266,866
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
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|
|
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Depreciation and amortization
|
41,947
|
|
|
28,538
|
|
||
Deferred income taxes
|
—
|
|
|
5,997
|
|
||
Equity income
|
(9,388
|
)
|
|
(3,439
|
)
|
||
AFUDC – equity
|
(3,297
|
)
|
|
(8,730
|
)
|
||
Non-cash long-term compensation expense
|
451
|
|
|
373
|
|
||
Changes in other assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(599
|
)
|
|
1,639
|
|
||
Accounts payable
|
2,425
|
|
|
5,528
|
|
||
Due to/from EQT affiliates
|
2,197
|
|
|
(26,685
|
)
|
||
Other assets and other liabilities
|
5,377
|
|
|
5,032
|
|
||
Net cash provided by operating activities
|
319,655
|
|
|
275,119
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capital expenditures
|
(149,413
|
)
|
|
(308,769
|
)
|
||
Capital contributions to the MVP Joint Venture
|
(59,940
|
)
|
|
(40,663
|
)
|
||
Sales of interests in the MVP Joint Venture
|
—
|
|
|
12,533
|
|
||
Principal payments received on the Preferred Interest
|
2,054
|
|
|
—
|
|
||
Net cash used in investing activities
|
(207,299
|
)
|
|
(336,899
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from the issuance of EQM common units, net of offering costs
|
—
|
|
|
217,102
|
|
||
Proceeds from EQM credit facility borrowings
|
150,000
|
|
|
260,000
|
|
||
Payments on EQM credit facility borrowings
|
(110,000
|
)
|
|
(559,000
|
)
|
||
(Payments on)/proceeds from the EQGP Working Capital Facility loan
|
(29
|
)
|
|
125
|
|
||
Distributions paid to noncontrolling interest unitholders of EQM
|
(102,260
|
)
|
|
(81,140
|
)
|
||
Distributions paid to EQGP unitholders
|
(97,949
|
)
|
|
(68,138
|
)
|
||
Capital contributions
|
216
|
|
|
5,884
|
|
||
Net contributions from EQT
|
—
|
|
|
10,346
|
|
||
Net cash used in financing activities
|
(160,022
|
)
|
|
(214,821
|
)
|
||
|
|
|
|
||||
Net change in cash and cash equivalents
|
(47,666
|
)
|
|
(276,601
|
)
|
||
Cash and cash equivalents at beginning of period
|
60,453
|
|
|
360,957
|
|
||
Cash and cash equivalents at end of period
|
$
|
12,787
|
|
|
$
|
84,356
|
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
|
||
Interest, net of amount capitalized
|
$
|
20,998
|
|
|
$
|
8,505
|
|
(1)
|
As discussed in Note A, EQGP’s consolidated financial statements for the
six months ended June 30, 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.
|
|
June 30,
2017 |
|
December 31, 2016
|
||||
ASSETS
|
(Thousands, except number of units)
|
||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
12,787
|
|
|
$
|
60,453
|
|
Accounts receivable (net of allowance for doubtful accounts of $329 as of June 30, 2017 and $319 as of December 31, 2016)
|
21,261
|
|
|
20,662
|
|
||
Accounts receivable – affiliate
|
85,433
|
|
|
81,358
|
|
||
Other current assets
|
6,605
|
|
|
9,912
|
|
||
Total current assets
|
126,086
|
|
|
172,385
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
3,049,658
|
|
|
2,894,858
|
|
||
Less: accumulated depreciation
|
(353,504
|
)
|
|
(316,024
|
)
|
||
Net property, plant and equipment
|
2,696,154
|
|
|
2,578,834
|
|
||
|
|
|
|
||||
Investment in unconsolidated entity
|
260,737
|
|
|
184,562
|
|
||
Other assets
|
138,210
|
|
|
140,668
|
|
||
Total assets
|
$
|
3,221,187
|
|
|
$
|
3,076,449
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
42,755
|
|
|
$
|
35,831
|
|
Due to related party
|
25,847
|
|
|
20,360
|
|
||
EQM credit facility borrowings
|
40,000
|
|
|
—
|
|
||
Capital contribution payable to MVP Joint Venture
|
18,318
|
|
|
11,471
|
|
||
Accrued interest
|
10,057
|
|
|
12,016
|
|
||
Accrued liabilities
|
13,214
|
|
|
8,755
|
|
||
Total current liabilities
|
150,191
|
|
|
88,433
|
|
||
|
|
|
|
||||
Long-term debt
|
986,542
|
|
|
985,732
|
|
||
Other long-term liabilities
|
9,974
|
|
|
9,562
|
|
||
Total liabilities
|
1,146,707
|
|
|
1,083,727
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
|
|
||
Common (266,165,000 common units issued and outstanding at June 30, 2017 and December 31, 2016)
|
(1,049,108
|
)
|
|
(1,077,100
|
)
|
||
Noncontrolling interests
|
3,123,588
|
|
|
3,069,822
|
|
||
Total equity
|
2,074,480
|
|
|
1,992,722
|
|
||
Total liabilities and equity
|
$
|
3,221,187
|
|
|
$
|
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
|
14,767
|
|
|
101,568
|
|
|
150,531
|
|
|
266,866
|
|
||||
Capital contributions
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
||||
Equity-based compensation plans
|
—
|
|
|
212
|
|
|
161
|
|
|
373
|
|
||||
Distributions to noncontrolling interest unitholders of EQM
|
—
|
|
|
—
|
|
|
(81,140
|
)
|
|
(81,140
|
)
|
||||
Net contributions from EQT
|
10,346
|
|
|
—
|
|
|
—
|
|
|
10,346
|
|
||||
Distributions to EQGP unitholders
|
—
|
|
|
(68,138
|
)
|
|
—
|
|
|
(68,138
|
)
|
||||
EQM equity transactions
(2)
|
—
|
|
|
—
|
|
|
217,102
|
|
|
217,102
|
|
||||
Changes in ownership of EQM, net
|
—
|
|
|
44,936
|
|
|
(44,936
|
)
|
|
—
|
|
||||
Balance at June 30, 2016
|
$
|
300,658
|
|
|
$
|
(1,125,769
|
)
|
|
$
|
3,013,276
|
|
|
$
|
2,188,165
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at January 1, 2017
|
$
|
—
|
|
|
$
|
(1,077,100
|
)
|
|
$
|
3,069,822
|
|
|
$
|
1,992,722
|
|
Net income
|
—
|
|
|
124,706
|
|
|
155,836
|
|
|
280,542
|
|
||||
Capital contributions
|
—
|
|
|
974
|
|
|
—
|
|
|
974
|
|
||||
Equity-based compensation plans
|
—
|
|
|
261
|
|
|
190
|
|
|
451
|
|
||||
Distributions to noncontrolling interest unitholders of EQM
|
—
|
|
|
—
|
|
|
(102,260
|
)
|
|
(102,260
|
)
|
||||
Distributions to EQGP unitholders
|
—
|
|
|
(97,949
|
)
|
|
—
|
|
|
(97,949
|
)
|
||||
Balance at June 30, 2017
|
$
|
—
|
|
|
$
|
(1,049,108
|
)
|
|
$
|
3,123,588
|
|
|
$
|
2,074,480
|
|
(1)
|
As discussed in Note A, EQGP’s consolidated financial statements for the
six months ended June 30, 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)
|
Includes the impact of EQM's public equity offerings.
|
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
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands)
|
||||||||||||||
Revenues from external customers (including affiliates):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
112,145
|
|
|
$
|
100,155
|
|
|
$
|
214,474
|
|
|
$
|
198,164
|
|
Transmission
|
86,821
|
|
|
77,887
|
|
|
187,918
|
|
|
165,664
|
|
||||
Total operating revenues
|
$
|
198,966
|
|
|
$
|
178,042
|
|
|
$
|
402,392
|
|
|
$
|
363,828
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
83,310
|
|
|
$
|
73,175
|
|
|
$
|
156,899
|
|
|
$
|
145,779
|
|
Transmission
|
57,782
|
|
|
55,854
|
|
|
129,306
|
|
|
120,370
|
|
||||
Headquarters
|
(589
|
)
|
|
(774
|
)
|
|
(1,801
|
)
|
|
(1,731
|
)
|
||||
Total operating income
|
$
|
140,503
|
|
|
$
|
128,255
|
|
|
$
|
284,404
|
|
|
$
|
264,418
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of operating income to net income:
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income
|
6,709
|
|
|
10,409
|
|
|
12,718
|
|
|
18,011
|
|
||||
Net interest expense
|
8,658
|
|
|
4,092
|
|
|
16,580
|
|
|
8,643
|
|
||||
Income tax expense
|
—
|
|
|
3,485
|
|
|
—
|
|
|
6,920
|
|
||||
Net income
|
$
|
138,554
|
|
|
$
|
131,087
|
|
|
$
|
280,542
|
|
|
$
|
266,866
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(Thousands)
|
||||||
Segment assets:
|
|
|
|
|
|
||
Gathering
|
$
|
1,382,076
|
|
|
$
|
1,292,713
|
|
Transmission
|
1,441,607
|
|
|
1,413,631
|
|
||
Total operating segments
|
2,823,683
|
|
|
2,706,344
|
|
||
Headquarters, including cash
|
397,504
|
|
|
370,105
|
|
||
Total assets
|
$
|
3,221,187
|
|
|
$
|
3,076,449
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands)
|
||||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
9,555
|
|
|
$
|
7,594
|
|
|
$
|
18,415
|
|
|
$
|
14,857
|
|
Transmission
|
11,845
|
|
|
6,937
|
|
|
23,532
|
|
|
13,681
|
|
||||
Total
|
$
|
21,400
|
|
|
$
|
14,531
|
|
|
$
|
41,947
|
|
|
$
|
28,538
|
|
|
|
|
|
|
|
|
|
||||||||
Expenditures for segment assets:
|
|
|
|
|
|
|
|
||||||||
Gathering
|
$
|
53,708
|
|
|
$
|
86,278
|
|
|
$
|
102,546
|
|
|
$
|
159,365
|
|
Transmission
|
29,978
|
|
|
115,946
|
|
|
51,367
|
|
|
176,017
|
|
||||
Total
(1)
|
$
|
83,686
|
|
|
$
|
202,224
|
|
|
$
|
153,913
|
|
|
$
|
335,382
|
|
(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
$31.2 million
,
$34.0 million
and
$26.7 million
at
June 30, 2017
,
March 31, 2017
and
December 31, 2016
, respectively. Accrued capital expenditures were approximately
$50.7 million
,
$32.7 million
and
$24.1 million
at
June 30, 2016
,
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
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(Thousands)
|
||||||
Assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
11,530
|
|
|
$
|
60,368
|
|
Accounts receivable
|
21,261
|
|
|
20,662
|
|
||
Accounts receivable – affiliate
|
85,433
|
|
|
81,358
|
|
||
Other current assets
|
6,601
|
|
|
9,671
|
|
||
Net property, plant and equipment
|
2,696,154
|
|
|
2,578,834
|
|
||
Investment in unconsolidated entity
|
260,737
|
|
|
184,562
|
|
||
Other assets
|
$
|
137,926
|
|
|
$
|
140,385
|
|
Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
42,755
|
|
|
$
|
35,830
|
|
Due to related party
|
23,754
|
|
|
19,027
|
|
||
EQM credit facility borrowings
|
40,000
|
|
|
—
|
|
||
Capital contribution payable to MVP Joint Venture
|
18,318
|
|
|
11,471
|
|
||
Accrued interest
|
10,057
|
|
|
12,016
|
|
||
Accrued liabilities
|
13,214
|
|
|
8,648
|
|
||
Long-term debt
|
986,542
|
|
|
985,732
|
|
||
Other long-term liabilities
|
$
|
9,974
|
|
|
$
|
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
|
|
$
|
0.89
|
|
|
$
|
104,238
|
|
|
$
|
51,933
|
|
|
$
|
0.191
|
|
|
$
|
50,838
|
|
June 30
(1)
|
|
$
|
0.935
|
|
|
$
|
111,455
|
|
|
$
|
56,505
|
|
|
$
|
0.21
|
|
|
$
|
55,895
|
|
(1)
|
On
July 25, 2017
, the Board of Directors of the EQM General Partner declared a cash distribution to EQM's unitholders for the
second quarter
of
2017
of
$0.935
per common unit. The cash distribution will be paid on
August 14, 2017
to unitholders of record at the close of business on
August 4, 2017
. Based on the
80,581,758
EQM common units outstanding on
July 27, 2017
, cash distributions to EQGP will be approximately
$20.4 million
related to its limited partner interest,
$1.9 million
related to its general partner interest and
$34.2 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
second quarter
2017
distribution.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands)
|
||||||||||||||
Net income attributable to EQM
|
$
|
139,139
|
|
|
$
|
131,859
|
|
|
$
|
282,335
|
|
|
$
|
268,594
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to EQM noncontrolling interests
|
75,224
|
|
|
72,744
|
|
|
155,836
|
|
|
150,531
|
|
||||
Additional expenses, net
|
585
|
|
|
772
|
|
|
1,793
|
|
|
1,728
|
|
||||
Net income attributable to EQGP
|
$
|
63,330
|
|
|
$
|
58,343
|
|
|
$
|
124,706
|
|
|
$
|
116,335
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
FINANCIAL DATA
|
(Thousands, other than per day amounts)
|
||||||||||||||||||||
Firm reservation fee revenues
|
$
|
101,858
|
|
|
$
|
83,560
|
|
|
21.9
|
|
|
$
|
196,129
|
|
|
$
|
165,567
|
|
|
18.5
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Usage fees under firm contracts
(1)
|
6,479
|
|
|
11,039
|
|
|
(41.3
|
)
|
|
11,300
|
|
|
21,491
|
|
|
(47.4
|
)
|
||||
Usage fees under interruptible contracts
|
3,808
|
|
|
5,556
|
|
|
(31.5
|
)
|
|
7,045
|
|
|
11,106
|
|
|
(36.6
|
)
|
||||
Total volumetric based fee revenues
|
10,287
|
|
|
16,595
|
|
|
(38.0
|
)
|
|
18,345
|
|
|
32,597
|
|
|
(43.7
|
)
|
||||
Total operating revenues
|
112,145
|
|
|
100,155
|
|
|
12.0
|
|
|
214,474
|
|
|
198,164
|
|
|
8.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance
|
10,408
|
|
|
9,123
|
|
|
14.1
|
|
|
20,863
|
|
|
18,068
|
|
|
15.5
|
|
||||
Selling, general and administrative
|
8,872
|
|
|
10,263
|
|
|
(13.6
|
)
|
|
18,297
|
|
|
19,460
|
|
|
(6.0
|
)
|
||||
Depreciation and amortization
|
9,555
|
|
|
7,594
|
|
|
25.8
|
|
|
18,415
|
|
|
14,857
|
|
|
23.9
|
|
||||
Total operating expenses
|
28,835
|
|
|
26,980
|
|
|
6.9
|
|
|
57,575
|
|
|
52,385
|
|
|
9.9
|
|
||||
Operating income
|
$
|
83,310
|
|
|
$
|
73,175
|
|
|
13.9
|
|
|
$
|
156,899
|
|
|
$
|
145,779
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathered volumes (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm capacity reservation
|
1,780
|
|
|
1,535
|
|
|
16.0
|
|
|
1,754
|
|
|
1,478
|
|
|
18.7
|
|
||||
Volumetric based services
(2)
|
281
|
|
|
462
|
|
|
(39.2
|
)
|
|
253
|
|
|
469
|
|
|
(46.1
|
)
|
||||
Total gathered volumes
|
2,061
|
|
|
1,997
|
|
|
3.2
|
|
|
2,007
|
|
|
1,947
|
|
|
3.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
53,708
|
|
|
$
|
86,278
|
|
|
(37.8
|
)
|
|
$
|
102,546
|
|
|
$
|
159,365
|
|
|
(35.7
|
)
|
(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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
FINANCIAL DATA
|
(Thousands, other than per day amounts)
|
||||||||||||||||||||
Firm reservation fee revenues
|
$
|
79,512
|
|
|
$
|
60,284
|
|
|
31.9
|
|
|
$
|
171,786
|
|
|
$
|
130,393
|
|
|
31.7
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Usage fees under firm contracts
(1)
|
3,503
|
|
|
14,245
|
|
|
(75.4
|
)
|
|
6,360
|
|
|
27,674
|
|
|
(77.0
|
)
|
||||
Usage fees under interruptible contracts
|
3,806
|
|
|
3,358
|
|
|
13.3
|
|
|
9,772
|
|
|
7,597
|
|
|
28.6
|
|
||||
Total volumetric based fee revenues
|
7,309
|
|
|
17,603
|
|
|
(58.5
|
)
|
|
16,132
|
|
|
35,271
|
|
|
(54.3
|
)
|
||||
Total operating revenues
|
86,821
|
|
|
77,887
|
|
|
11.5
|
|
|
187,918
|
|
|
165,664
|
|
|
13.4
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance
|
10,173
|
|
|
7,230
|
|
|
40.7
|
|
|
20,004
|
|
|
15,421
|
|
|
29.7
|
|
||||
Selling, general and administrative
|
7,021
|
|
|
7,866
|
|
|
(10.7
|
)
|
|
15,076
|
|
|
16,192
|
|
|
(6.9
|
)
|
||||
Depreciation and amortization
|
11,845
|
|
|
6,937
|
|
|
70.8
|
|
|
23,532
|
|
|
13,681
|
|
|
72.0
|
|
||||
Total operating expenses
|
29,039
|
|
|
22,033
|
|
|
31.8
|
|
|
58,612
|
|
|
45,294
|
|
|
29.4
|
|
||||
Operating income
|
$
|
57,782
|
|
|
$
|
55,854
|
|
|
3.5
|
|
|
$
|
129,306
|
|
|
$
|
120,370
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm capacity reservation
|
2,218
|
|
|
1,486
|
|
|
49.3
|
|
|
2,171
|
|
|
1,554
|
|
|
39.7
|
|
||||
Volumetric based services
(2)
|
21
|
|
|
570
|
|
|
(96.3
|
)
|
|
24
|
|
|
528
|
|
|
(95.5
|
)
|
||||
Total transmission pipeline throughput
|
2,239
|
|
|
2,056
|
|
|
8.9
|
|
|
2,195
|
|
|
2,082
|
|
|
5.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average contracted firm transmission reservation commitments (BBtu per day)
|
3,341
|
|
|
2,401
|
|
|
39.2
|
|
|
3,542
|
|
|
2,703
|
|
|
31.0
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
29,978
|
|
|
$
|
115,946
|
|
|
(74.1
|
)
|
|
$
|
51,367
|
|
|
$
|
176,017
|
|
|
(70.8
|
)
|
(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
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands)
|
||||||||||||||
Net income
|
$
|
139,139
|
|
|
$
|
131,859
|
|
|
$
|
282,335
|
|
|
$
|
268,594
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Net interest expense
|
8,662
|
|
|
4,094
|
|
|
16,588
|
|
|
8,646
|
|
||||
Depreciation and amortization expense
|
21,400
|
|
|
14,531
|
|
|
41,947
|
|
|
28,538
|
|
||||
Income tax expense
|
—
|
|
|
3,485
|
|
|
—
|
|
|
6,920
|
|
||||
Preferred Interest payments received post conversion
|
2,746
|
|
|
—
|
|
|
5,492
|
|
|
—
|
|
||||
Non-cash long-term compensation expense
|
—
|
|
|
—
|
|
|
225
|
|
|
195
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Equity income
|
(5,111
|
)
|
|
(1,850
|
)
|
|
(9,388
|
)
|
|
(3,439
|
)
|
||||
AFUDC – equity
|
(1,598
|
)
|
|
(5,793
|
)
|
|
(3,297
|
)
|
|
(8,730
|
)
|
||||
Pre-acquisition capital lease payments for AVC
(1)
|
—
|
|
|
(4,036
|
)
|
|
—
|
|
|
(13,400
|
)
|
||||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(2)
|
—
|
|
|
(4,154
|
)
|
|
—
|
|
|
(7,617
|
)
|
||||
Adjusted EBITDA
|
$
|
165,238
|
|
|
$
|
138,136
|
|
|
$
|
333,902
|
|
|
$
|
279,707
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Net interest expense excluding interest income on the Preferred Interest
|
(10,374
|
)
|
|
(4,094
|
)
|
|
(20,026
|
)
|
|
(8,645
|
)
|
||||
Capitalized interest and AFUDC – debt
|
(1,008
|
)
|
|
(1,808
|
)
|
|
(2,608
|
)
|
|
(3,544
|
)
|
||||
Ongoing maintenance capital expenditures net of expected reimbursements
(3)
|
(3,462
|
)
|
|
(3,161
|
)
|
|
(6,070
|
)
|
|
(5,130
|
)
|
||||
Distributable cash flow
|
$
|
150,394
|
|
|
$
|
129,073
|
|
|
$
|
305,198
|
|
|
$
|
262,388
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
158,883
|
|
|
$
|
160,046
|
|
|
$
|
320,305
|
|
|
$
|
276,373
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Pre-acquisition capital lease payments for AVC
(1)
|
—
|
|
|
(4,036
|
)
|
|
—
|
|
|
(13,400
|
)
|
||||
Capitalized interest and AFUDC – debt
|
(1,008
|
)
|
|
(1,808
|
)
|
|
(2,608
|
)
|
|
(3,544
|
)
|
||||
Principal payments received on the Preferred Interest
|
1,034
|
|
|
—
|
|
|
2,054
|
|
|
—
|
|
||||
Ongoing maintenance capital expenditures net of expected reimbursements
(3)
|
(3,462
|
)
|
|
(3,161
|
)
|
|
(6,070
|
)
|
|
(5,130
|
)
|
||||
Current tax expense
|
—
|
|
|
463
|
|
|
—
|
|
|
923
|
|
||||
Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition
(2)
|
—
|
|
|
(4,154
|
)
|
|
—
|
|
|
(7,617
|
)
|
||||
Other, including changes in working capital
|
(5,053
|
)
|
|
(18,277
|
)
|
|
(8,483
|
)
|
|
14,783
|
|
||||
Distributable cash flow
|
$
|
150,394
|
|
|
$
|
129,073
|
|
|
$
|
305,198
|
|
|
$
|
262,388
|
|
(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 AVC, Rager and the Gathering Assets prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM’s unitholders. Adjusted EBITDA attributable to the October 2016 Acquisition prior to acquisition for the three and six months ended June 30, 2016
|
(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
six months ended June 30, 2017
and
2016
, respectively. Additionally, it excludes ongoing maintenance attributable to AVC, Rager and the Gathering Assets prior to acquisition of
$2.1 million
and
$5.0 million
for the
three and six
months ended
June 30, 2016
, respectively.
|
•
|
Affiliate Wellhead 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
June 30, 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
|
•
|
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 AVC modernization projects primarily consist of the replacement of approximately 20 miles of pipeline.
|
•
|
Supply Hub Expansion
.
These expansion projects are designed to increase deliverable capacity to EQM's Mobley hub, which is the origin of both the OVC and the MVP. These gathering and/or transmission 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 to EQM's systems.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Thousands)
|
||||||||||||||
Expansion capital expenditures
(1)
|
$
|
80,224
|
|
|
$
|
196,820
|
|
|
$
|
146,869
|
|
|
$
|
324,770
|
|
Maintenance capital expenditures:
|
|
|
|
|
|
|
|
||||||||
Ongoing maintenance
|
3,462
|
|
|
5,303
|
|
|
7,044
|
|
|
10,336
|
|
||||
Funded regulatory compliance
|
—
|
|
|
101
|
|
|
—
|
|
|
276
|
|
||||
Total maintenance capital expenditures
|
3,462
|
|
|
5,404
|
|
|
7,044
|
|
|
10,612
|
|
||||
Total capital expenditures
(2)
|
$
|
83,686
|
|
|
$
|
202,224
|
|
|
$
|
153,913
|
|
|
$
|
335,382
|
|
(1)
|
Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of
$40.2 million
and
$29.2 million
for the
three months ended June 30, 2017
and
2016
, respectively, and
$59.9 million
and
$40.7 million
for the
six months ended June 30, 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
$31.2 million
,
$34.0 million
and
$26.7 million
at
June 30, 2017
,
March 31, 2017
and
December 31, 2016
, respectively. Accrued capital expenditures were approximately
$50.7 million
,
$32.7 million
and
$24.1 million
at
June 30, 2016
,
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
|
10.1
|
|
Amendment No. 1 to Gas Gathering Agreement for the WG-100 Gas Gathering System, dated as of April 1, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.
|
10.2
|
|
Amendment No. 4 to Jupiter Gas Gathering Agreement, dated as of June 1, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.
|
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
|
10.1
|
|
|
Amendment No. 1 to Gas Gathering Agreement for the WG-100 Gas Gathering System, dated as of April 1, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.
|
|
Incorporated herein by reference to Exhibit 10.1 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended June 30, 2017.
|
10.2
|
|
|
Amendment No. 4 to Jupiter Gas Gathering Agreement, dated as of June 1, 2017, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand.
|
|
Incorporated herein by reference to Exhibit 10.2 to EQT Midstream Partners, LP’s Form 10-Q (#001-35574) for the quarterly period ended June 30, 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.
|
1 Year EQT GP HOLDINGS, LP Chart |
1 Month EQT GP HOLDINGS, LP Chart |
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