PITTSBURGH--(BUSINESS WIRE)--Please replace the release with the following corrected version due to a
correction in the 2018 Adjusted EBITDA.
The corrected release reads:
Q3 2018 RESULTS ANNOUNCED FOR EQM MIDSTREAM PARTNERS AND EQGP HOLDINGS
EQM Midstream Partners, LP (NYSE: EQM) today announced third quarter
2018 results, including net income of $209.9 million, adjusted EBITDA of
$280.1 million, net cash provided by operating activities of $242.6
million, and distributable cash flow of $218.6 million. EQM operating
income was $233.5 million, which was 60% higher than last year. The
Non-GAAP Disclosures section of this news release provides
reconciliations of non-GAAP financial measures to their most comparable
GAAP financial measure as well as important disclosures regarding
projected adjusted EBITDA and projected distributable cash flow.
EQGP Holdings, LP (NYSE: EQGP) today announced net income attributable
to EQGP of $97.5 million for the third quarter 2018.
HIGHLIGHTS:
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Increased EQM per unit distribution by 14% and EQGP by 38% compared to
Q3 2017
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Generated 93% of transmission and storage operating revenue from firm
reservation fees
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Generated 45% of gathering operating revenue from firm reservation fees
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Adjusted EBITDA increases more than 50% over next three years
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Equitrans Midstream Corporation expected to begin Regular Way trading
on November 13, 2018
On July 23, 2018 EQM closed the acquisition of Rice Midstream Partners
LP (RMP), with each RMP unitholder receiving 0.3319 units of EQM. On May
1, 2018 EQM acquired the Olympus gathering system and a 75% interest in
the Strike Force gathering system (May 2018 Acquisition) from EQT
Corporation (EQT). EQM also purchased the remaining 25% interest in the
Strike Force gathering system from Gulfport Energy on May 1, 2018. As a
result of the RMP acquisition and the May 2018 Acquisition, EQM's
financial statements have been retrospectively recast to include the
pre-acquisition results of each acquisition from the time common control
began on November 13, 2017, which is when EQT closed its acquisition of
Rice Energy.
EQM's third quarter operating revenue increased $158.3 million, a 77%
increase compared to the same quarter last year. The RMP acquisition and
the May 2018 Acquisition accounted for $147.8 million of the increase,
with the remaining increase from higher contracted firm transmission and
gathering capacity. Operating expenses increased $70.5 million versus
the third quarter of 2017, with approximately $67.0 million resulting
from the RMP acquisition and the May 2018 Acquisition. The remaining
increase was primarily related to $2.2 million in transaction costs
related to the RMP acquisition, and higher system throughput and
additional assets placed in service, consistent with the growth in the
business.
QUARTERLY DISTRIBUTION
EQM
For the third quarter of 2018, EQM will pay a quarterly cash
distribution of $1.115 per unit, which will be paid on November 14, 2018
to EQM unitholders of record at the close of business on November 2,
2018. The quarterly cash distribution is 2% higher than the second
quarter of 2018 and is 14% higher than the third quarter of 2017.
EQGP
For the third quarter of 2018, EQGP will pay a quarterly cash
distribution of $0.315 per unit, which will be paid on November 23, 2018
to EQGP unitholders of record at the close of business on November 2,
2018. The quarterly cash distribution is 3% higher than the second
quarter of 2018 and is 38% higher than the third quarter 2017
distribution. For the quarter, EQGP expects to receive $97.7 million of
cash distributions from EQM and distribute $95.3 million.
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OUTLOOK
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EQM 2018 Guidance
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Full-year 2018
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Net Income ($MM)*
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$930 – $950
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Adjusted EBITDA ($MM)**
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$990 – $1,010
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Distributable Cash Flow ($MM)
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$810 – $830
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*
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Reflects financial recast for May 2018 Acquisition and RMP.
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**
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The original release had an incorrect range for the projected
full-year 2018 EQM adjusted EBITDA. This range is corrected in
this news release.
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Please see the Non-GAAP Disclosures section of this news release for
information regarding reconciliations of projected Non-GAAP measures.
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Growth Projections
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2019
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2020
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2021
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EQM Net Income ($B)
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$1.0
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$1.1
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$1.2
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EQM Adjusted EBITDA ($B)
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$1.3
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$1.7
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$1.8
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Expansion Capex + MVP capital contributions ($B)
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$2.0
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$0.7
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$0.5
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EQM EXPANSION & ONGOING MAINTENANCE CAPITAL
EXPENDITURES
Expansion
Expansion capital expenditures and capital contributions to Mountain
Valley Pipeline, LLC (MVP JV), totaled $489 million for the third
quarter 2018 and $1.0 billion year-to-date.
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$MM
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Three Months Ended
September 30, 2018
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Nine Months Ended
September 30, 2018
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2018 Full-year
Forecast*
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Mountain Valley Pipeline
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$263
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$446
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$900
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Gathering
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$183
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$501
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$750
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Transmission
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$35
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$70
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$100
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Water
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$8
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$17
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$25
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Total
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$489
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$1,034
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$ 1,775
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* Includes full-year May 2018 Acquisition and RMP expansion
capital expenditures. Approximately $51.8 million of expansion
capital expenditures had been spent on the May 2018 Acquisition
assets prior to the May 2018 Acquisition. Approximately $84.5
million of expansion capital expenditures had been spent on the
RMP assets prior to the RMP acquisition.
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Ongoing Maintenance
Ongoing maintenance capital expenditures are cash expenditures made to
maintain, over the long-term, EQM operating capacity or operating
income. EQM ongoing maintenance capital expenditures, net of expected
reimbursements, totaled $14 million in the third quarter 2018 and $25
million year-to-date. EQM forecasts full-year 2018 ongoing maintenance
capital expenditures of $45 million.
PROJECT UPDATE
Mountain Valley Pipeline
On October 2, 2018, the U.S. Court of Appeals for the Fourth Circuit
issued a decision to vacate the Clean Water Act Section 404 stream and
wetland crossing permit (Nationwide 12 permit) issued by the Huntington
District of the U.S. Army Corps of Engineers (USACE). Subsequently, the
Norfolk District and the Pittsburgh District of the USACE suspended its
Nationwide 12 permit pending resolution of the Nationwide 12 permit by
the Huntington District. The court decision and suspension impacts
stream and wetland crossings in West Virginia and Virginia.
During the past few months, the West Virginia Department of
Environmental Protection (WVDEP) has proposed modifications to its
Section 401 Nationwide Permit Certification which clarify that a 72-hour
limitation does not apply to dry-cut crossing methods and other
environmentally protective crossing methods. MVP JV intends to apply for
a new or reissued permit with the USACE as soon as practical following
the WVDEP modification process. MVP JV expects to secure the Nationwide
12 permit from the USACE in Q1 2019.
MVP JV continues construction activities at the three compressor sites
and along much of the upland portions of the route. MVP JV anticipates a
fourth quarter 2019 in-service date and estimates a total project cost
of $4.6 billion, with EQM funding $2.2 billion. MVP JV has secured a
total of 2 Bcf per day of firm capacity commitments at 20-year terms.
MVP Southgate
The MVP Southgate project will receive gas from MVP and extend
approximately 70 miles south to new delivery points in Rockingham and
Alamance Counties, North Carolina. The project is anchored by a 300 MMcf
per day firm capacity commitment from PSNC Energy. The preliminary
project cost estimate is $350 to $500 million, depending on final
project scope. The capital is expected to be spent in 2019 and 2020. EQM
has a 33% ownership interest and will operate the pipeline. Subject to
approval by the FERC, MVP Southgate has a targeted in-service date of
the fourth quarter 2020.
Hammerhead Pipeline
The Hammerhead pipeline is designed as a 1.2 Bcf per day gathering
header pipeline that will traverse approximately 64 miles from
southwestern Pennsylvania to Mobley, West Virginia, where both the MVP
and the Ohio Valley Connector originate. The pipeline is estimated to
cost $555 million and is expected to be placed in-service during the
fourth quarter of 2019 in-conjunction with MVP.
EQUITRANS MIDSTREAM CORPORATION
In February 2018 EQT announced a plan to separate its upstream and
midstream businesses. Following the separation, Equitrans Midstream
Corporation (NYSE: ETRN) will own the midstream interest held by EQT,
which consists of the general partner interest in EQGP, 276.0 million
units of EQGP and 15.4 million units of EQM.
Each share of EQT common stock held as of the close of business on
November 1, 2018 (Record Date) will receive 0.8 share of ETRN common
stock. The distribution date is November 12, 2018.
The “when issued” trading period for ETRN will run from October 31, 2018
through November 12, 2018. ETRN will trade under the symbol “ETRN WI”
during “when issued” trading. Trades made in ETRN during the “when
issued” period will settle after the completion of the distribution. On
November 13, 2018, “regular-way” trading will commence on the NYSE for
ETRN under the symbol “ETRN.”
In connection with the separation, ETRN will hold an investor
presentation on Monday, October 29, 2018. The presentation will be
webcast live beginning at approximately 10:00 AM until 11:30 AM, Eastern
Time via EQT’s web site at www.eqt.com
and via ETRN’s web site at www.equitransmidstream.com,
with a replay available for seven days following the call.
NON-GAAP DISCLOSURES
EQM Adjusted EBITDA and Distributable Cash Flow
As used in this news release, EQM adjusted EBITDA means net income
attributable to EQM plus net interest expense, depreciation,
amortization of intangible assets, payments on EQM's preferred interest
in EQT Energy Supply, LLC (Preferred Interest), non-cash long-term
compensation expense and transaction costs less equity income, AFUDC -
equity and adjusted EBITDA of assets prior to acquisition. Adjusted
EBITDA attributable to RMP for the three months ended September 30, 2018
was calculated as net income plus net interest expense, depreciation and
non-cash compensation expense. Run rate adjusted EBITDA as used in this
news release means EQM’s adjusted EBITDA for the third quarter of 2018
plus the RMP adjusted EBITDA prior to merger, annualized for four
quarters. As used in this news release, distributable cash flow means
EQM adjusted EBITDA less net interest expense excluding interest income
on the Preferred Interest, capitalized interest and AFUDC - debt,
ongoing maintenance capital expenditures net of expected reimbursements
and transaction costs. Distributable cash flow should not be viewed as
indicative of the actual amount of cash that EQM has available for
distributions from operating surplus or that EQM plans to distribute.
Adjusted EBITDA, run rate adjusted EBITDA and distributable cash flow
are non-GAAP supplemental financial measures that management and
external users of EQM’s consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies, use to assess:
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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;
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the ability of EQM’s assets to generate sufficient cash flow to make
distributions to EQM unitholders;
-
EQM’s ability to incur and service debt and fund capital expenditures;
and
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the viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
EQM believes that adjusted EBITDA, run rate adjusted EBITDA and
distributable cash flow provide useful information to investors in
assessing EQM’s results of operations and financial condition. Adjusted
EBITDA, run rate adjusted EBITDA and distributable cash flow should not
be considered as alternatives to net income, operating income, net cash
provided by operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP. Adjusted
EBITDA, run rate adjusted EBITDA and distributable cash flow have
important limitations as analytical tools because they exclude some, but
not all, items that affect net income and net cash provided by operating
activities. Additionally, because adjusted EBITDA and distributable cash
flow may be defined differently by other companies in its industry,
EQM’s definitions of adjusted EBITDA, run rate adjusted EBITDA and
distributable cash flow may not be comparable to similarly titled
measures of other companies, thereby diminishing the utility of the
measures. The table below reconciles adjusted EBITDA and distributable
cash flow with net income and net cash provided by operating activities
as derived from the statements of consolidated operations and cash flows
to be included in EQM’s quarterly report on Form 10-Q for the quarter
ended September 30, 2018.
Projected firm project EBITDA means the projected earnings before
interest, taxes and depreciation of EQM’s firm capacity gathering and
transmission projects, including the Hammerhead, Equitrans Expansion and
other gathering projects, plus EQM’s proportionate interest of the
projected earnings before interest, taxes and depreciation of Mountain
Valley Pipeline, LLC’s MVP and MVP Southgate projects. Projected water
EBITDA means the projected earnings before interest, taxes and
depreciation of EQM’s water services business. Projected firm project
EBITDA and projected water EBITDA are non-GAAP supplemental financial
measures that management and external users of EQM’s consolidated
financial statements, such as industry analysts, investors, lenders and
rating agencies, use to assess the anticipated impact of EQM’s firm
capacity projects, both on an aggregate and project-by-project basis,
and EQM’s water services business on EQM’s operating performance, the
project returns on firm capacity projects and EQM’s ability to incur and
service debt and fund capital expenditures. Firm project EBITDA and
water EBITDA should not be considered as alternatives to net income,
operating income or any other measure of financial performance presented
in accordance with GAAP. Firm project EBITDA and water EBITDA have
important limitations as analytical tools because they exclude some, but
not all, items that affect net income. Additionally, because firm
project EBITDA and water EBITDA may be defined differently by other
companies in EQM’s industry, the definitions of firm project EBITDA and
water EBITDA may not be comparable to similarly titled measures of other
companies, thereby diminishing the utility of the measures.
EQM has not provided projected net income from the firm projects or the
projected net income of EQM’s water business segment, the most
comparable financial measures calculated in accordance with GAAP, or
reconciliation of projected firm project EBITDA or projected water
EBITDA to projected net income of the firm projects or projected net
income of EQM’s water business segment. The projects are under
construction projects that, upon completion, will be reported in EQM’s
Gathering and Transmission business segments. EQM does not allocate
certain costs, such as interest expenses, to individual assets within
its business segments. In addition, for the MVP and MVP Southgate
projects, EQM does not provide guidance with respect to the intra-year
timing of its or Mountain Valley Pipeline, LLC’s capital spending, which
impact AFUDC-debt and equity and equity earnings, among other things,
that are reconciling items between adjusted firm project EBITDA and net
income of the projects. The timing of capital expenditures is volatile
as it depends on weather, regulatory approvals, contractor availability,
system performance and various other items. Therefore, the projected net
income of the firm projects, in the aggregate or on a project-by-project
basis, and the projected net income of EQM’s water business segment, and
reconciliations of projected firm project EBITDA and projected water
EBITDA to projected net income of the firm projects and projected net
income of EQM’s water business segment are not available without
unreasonable effort.
EQM is unable to project net cash provided by operating activities or
provide the related reconciliation of projected net cash provided by
operating activities to projected distributable cash flow, the most
comparable financial measure calculated in accordance with GAAP, because
net cash provided by operating activities includes the impact of changes
in operating assets and liabilities. Changes in operating assets and
liabilities relate to the timing of EQM’s cash receipts and
disbursements that may not relate to the period in which the operating
activities occurred, and EQM is unable to project these timing
differences with any reasonable degree of accuracy to a specific day,
three or more months in advance. EQM is also unable to provide a
reconciliation of its projected adjusted EBITDA or run rate adjusted
EBITDA to projected net income, the most comparable financial measure
calculated in accordance with GAAP, because EQM does not provide
guidance with respect to the intra-year timing of its or Mountain Valley
Pipeline, LLC’s capital spending, which impact AFUDC-debt and equity and
equity earnings, among other items, that are reconciling items between
adjusted EBITDA and net income. The timing of capital expenditures is
volatile as it depends on weather, regulatory approvals, contractor
availability, system performance and various other items. EQM provides a
range for the forecasts of net income, adjusted EBITDA and distributable
cash flow to allow for the variability in the timing of cash receipts
and disbursements, capital spending and the impact on the related
reconciling items, many of which interplay with each other. Therefore,
the reconciliations of projected distributable cash flow, run rate
adjusted EBITDA and adjusted EBITDA to projected net cash provided by
operating activities and net income, as applicable, are not available
without unreasonable effort.
RMP adjusted EBITDA and distributable cash flow are non-GAAP
supplemental financial measures that management and external users of
EQM’s consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, may use to assess impact of the
measures on EQM’s future financial results and cash flows.
EQM believes that RMP adjusted EBITDA and distributable cash flow
provide useful information to investors in assessing its financial
condition and results of operations. RMP adjusted EBITDA and
distributable cash flow should not be considered as alternatives to
RMP’s net income, operating income, net cash provided by operating
activities or any other measure of financial performance or liquidity
presented in accordance with GAAP. RMP adjusted EBITDA and distributable
cash flow have important limitations as analytical tools because they
exclude some, but not all, items that affect net income and net cash
provided by operating activities. Additionally, because RMP adjusted
EBITDA and distributable cash flow may be defined differently by other
companies in EQM’s industry, RMP adjusted EBITDA and distributable cash
flow may not be comparable to similarly titled measures of other
companies, thereby diminishing the utility of the measures.
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Reconciliation of EQM Adjusted EBITDA and Distributable Cash
Flow
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(Thousands)
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Three Months Ended
September 30, 2018
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Net income
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$
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209,927
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Add:
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Net interest expense
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41,005
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Depreciation
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43,567
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Amortization of intangible assets
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10,387
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Preferred Interest payments
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2,746
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Non-cash long-term compensation expense
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636
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Transaction costs
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2,161
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Less:
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Equity income
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(16,087
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)
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AFUDC – equity
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(1,448
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)
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Adjusted EBITDA attributable to RMP prior to the merger
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(12,825
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)
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Adjusted EBITDA
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$
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280,069
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Less:
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Net interest expense excluding interest income on the Preferred Interest
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(42,921
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)
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Capitalized interest and AFUDC – debt
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(3,202
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)
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Ongoing maintenance capital expenditures net of expected reimbursements
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(13,181
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)
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Transaction costs
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(2,161
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)
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Distributable cash flow
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$
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218,604
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Distributions declared (1):
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Limited Partner
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$
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134,309
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General Partner
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73,426
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Total
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$
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207,735
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Coverage Ratio
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1.05x
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Net cash provided by operating activities
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$
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242,575
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Adjustments:
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Capitalized interest and AFUDC – debt
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(3,202
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)
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Principal payments received on the Preferred Interest
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1,109
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Ongoing maintenance capital expenditures net of expected reimbursements
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(13,181
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)
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Adjusted EBITDA attributable to RMP prior to the merger
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(12,825
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)
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Other, including changes in working capital
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4,128
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Distributable cash flow
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$
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218,604
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(1)
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Reflects cash distribution of $1.115 per limited partner unit for
the third quarter 2018 and 120,456,425 limited partner units
outstanding as of July 25, 2018. If limited partner units are
issued on or prior to November 2, 2018, the aggregate level of all
distributions will be higher.
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Q3 2018 Webcast Information
EQM and EQGP will host a joint live webcast with security analysts today
at 11:30 a.m. ET. Topics include third quarter 2018 financial results,
operating results, the separation of EQT’s production and midstream
businesses and other matters. The webcast is available at www.eqm-midstreampartners.com,
with a replay available for seven days following the call.
EQT, which owns EQGP’s general partner and holds a 91% limited partner
interest in EQGP, will also host a webcast with security analysts today
at 10:30 a.m. ET. EQM and EQGP unitholders are encouraged to listen to
EQT’s webcast, as the discussion may include topics relevant to EQM and
EQGP, such as EQT's financial and operational results, specific
reference to EQM and EQGP third quarter 2018 results and the separation
of EQT’s production and midstream businesses. The webcast can be
accessed via
www.eqt.com
,
with a replay available for seven days following the call.
About EQM Midstream Partners:
EQM Midstream Partners, LP (EQM) is a growth-oriented limited
partnership formed by EQT Corporation to own, operate, acquire, and
develop midstream assets in the Appalachian Basin. As the third largest
gatherer of natural gas in the United States, EQM provides midstream
services to EQT Corporation and other producers through its
strategically located natural gas transmission, storage, and gathering
systems, and water services to support energy development and production
in the Marcellus and Utica regions. EQM owns approximately 950 miles of
FERC-regulated interstate pipelines and approximately 2,130 miles of
high-and low-pressure gathering lines.
Visit EQM Midstream Partners, LP at
www.eqm-midstreampartners.com
.
About EQGP Holdings:
EQGP Holdings, LP is a limited partnership that owns the general partner
interest, all of the incentive distribution rights, and a portion of the
limited partner interests in EQM Midstream Partners, LP. EQT Corporation
owns the general partner interest and a 91% limited partner interest in
EQGP Holdings, LP.
Visit EQGP Holdings, LP at
www.eqm-midstreampartners.com
.
EQM and EQGP management speak to investors from time to time and the
analyst presentation for these discussions, which is updated
periodically, is available via the EQM and EQGP website at
www.eqm-midstreampartners.com
.
Cautionary Statements
The distribution amounts from EQM to EQGP are subject to change if EQM
issues additional common units on or prior to the record date for the
third quarter 2018 distribution.
Disclosures in this news release contain certain forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended. Statements that do not relate strictly to historical or
current facts are forward-looking. Without limiting the generality of
the foregoing, forward-looking statements contained in this news release
specifically include the expectations of plans, strategies, objectives
and growth and anticipated financial and operational performance of EQGP
and its subsidiaries, including EQM, including guidance regarding EQM’s
gathering, transmission and storage and water revenue and volume growth;
revenue and expense projections; infrastructure programs (including the
timing, cost, capacity and sources of funding with respect to gathering,
transmission and water projects); the cost, capacity, timing of
regulatory approvals and anticipated in-service date of the Mountain
Valley Pipeline (MVP) mainline and MVP Southgate projects; the ultimate
terms, partners and structure of, and EQM's ownership interests in, the
MVP joint ventures; the timing of the proposed separation of EQT's
production and midstream businesses, the parties' ability to complete
the separation and the effects of the change of control of EQM and EQGP
on the partnerships; the expected synergies resulting from the
streamlining transactions and the expected disynergies associated with
the separation of EQT’s production and midstream businesses; asset
acquisitions, including EQM’s ability to complete any asset purchases
and anticipated synergies and accretion associated with any acquisition;
the expected benefits to EQM resulting from EQT's acquisition of Rice
Energy Inc. and EQM’s acquisition of RMP; internal rate of return (IRR);
compound annual growth rate (CAGR); capital commitments, projected
capital contributions and capital and operating expenditures, including
the amount and timing of capital expenditures reimbursable by EQT,
capital budget and sources of funds for capital expenditures, including
EQM’s plan to increase its borrowing capacity to up to $3 billion;
liquidity and financing requirements, including funding sources and
availability; distribution amounts, rates and growth; the structure and
timing of any simplification of the midstream structure to address EQM’s
incentive distribution rights, if pursued and implemented; projected net
income, projected adjusted EBITDA, projected distributable cash flow and
projected coverage ratio; the timing and amount of future issuances of
EQM common units; changes in EQM’s credit ratings; the effects of
government regulation and litigation; and tax position. These forward
looking statements involve risks and uncertainties that could cause
actual results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking statements
as a prediction of actual results. EQM and EQGP have based these
forward-looking statements on current expectations and assumptions about
future events. While EQM and EQGP consider these expectations and
assumptions to be reasonable, they are inherently subject to significant
business, economic, competitive, regulatory and other risks and
uncertainties, many of which are difficult to predict and beyond the
partnerships’ control. The risks and uncertainties that may affect the
operations, performance and results of EQM’s and EQGP’s business and
forward-looking statements include, but are not limited to, those set
forth under Item 1A, “Risk Factors” of EQM’s Form 10-K for the year
ended December 31, 2017 as filed with the Securities and Exchange
Commission (SEC) and Item 1A, “Risk Factors” of EQGP’s Form 10-K for the
year ended December 31, 2017 as filed with the SEC, in each case as may
be updated by any subsequent Form 10-Qs. Any forward-looking statement
speaks only as of the date on which such statement is made, and neither
EQM nor EQGP intends to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise.
Information in this news release regarding EQT Corporation and its
subsidiaries, other than EQM and EQGP, is derived from publicly
available information published by EQT.
This release serves as qualified notice to nominees under Treasury
Regulation Sections 1.1446-4(b)(4) and (d). Please note that 100% of
EQM’s and EQGP’s distributions to foreign investors are attributable to
income that is effectively connected with a United States trade or
business. Accordingly, all of EQM’s and EQGP’s distributions to foreign
investors are subject to federal income tax withholding at the highest
effective tax rate for individuals or corporations, as applicable.
Nominees, and not EQM or EQGP, as applicable, are treated as the
withholding agents responsible for withholding on the distributions
received by them on behalf of foreign investors.
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EQM MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(1)
|
|
|
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Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
(Thousands, except per unit
amounts)
|
Operating revenues (2)
|
|
$
|
364,584
|
|
|
$
|
206,293
|
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
48,092
|
|
|
19,589
|
|
Selling, general and administrative
|
|
29,038
|
|
|
18,758
|
|
Depreciation
|
|
43,567
|
|
|
22,244
|
|
Amortization of intangible assets
|
|
10,387
|
|
|
—
|
|
Total operating expenses
|
|
131,084
|
|
|
60,591
|
|
Operating income
|
|
233,500
|
|
|
145,702
|
|
Equity income
|
|
16,087
|
|
|
6,025
|
|
Other income
|
|
1,345
|
|
|
637
|
|
Net interest expense
|
|
41,005
|
|
|
9,426
|
|
Net income
|
|
$
|
209,927
|
|
|
$
|
142,938
|
|
|
|
|
|
|
Calculation of limited partner interest in net income:
|
|
|
|
|
Net income
|
|
$
|
209,927
|
|
|
$
|
142,938
|
|
Less pre-acquisition net income allocated to parent
|
|
(8,490
|
)
|
|
—
|
|
Less general partner interest in net income – general partner units
|
|
(2,379
|
)
|
|
(2,515
|
)
|
Less general partner interest in net income – incentive
distribution rights
|
|
(70,967
|
)
|
|
(37,615
|
)
|
Limited partner interest in net income
|
|
$
|
128,091
|
|
|
$
|
102,808
|
|
|
|
|
|
|
Net income per limited partner unit – basic and diluted
|
|
$
|
1.14
|
|
|
$
|
1.28
|
|
Weighted average limited partner units outstanding – basic and
diluted
|
|
111,980
|
|
|
80,603
|
|
|
|
|
|
|
|
|
(1)
|
|
EQM’s consolidated financial statements have been retrospectively
recast to include the pre-acquisition results of Rice Olympus
Midstream LLC (ROM), Strike Force Midstream Holdings LLC (Strike
Force) and Rice West Virginia Midstream LLC (Rice WV), which were
acquired by EQM effective on May 1, 2018 (the May 2018 Acquisition)
and RMP, which was merged with and into EQM effective on July 23,
2018 (the EQM-RMP Merger).
|
(2)
|
|
Operating revenues included affiliate revenues from EQT of $276.9
million and $154.2 million for the three months ended September 30,
2018 and 2017, respectively.
|
|
EQM MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
GATHERING RESULTS OF OPERATIONS
(1)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
FINANCIAL DATA
|
|
(Thousands, except per day
amounts)
|
Firm reservation fee revenues
|
|
$
|
112,598
|
|
|
$
|
104,772
|
Volumetric based fee revenues:
|
|
|
|
|
Usage fees under firm contracts (2)
|
|
8,661
|
|
|
7,873
|
Usage fees under interruptible contracts (3)
|
|
131,602
|
|
|
3,877
|
Total volumetric based fee revenues
|
|
140,263
|
|
|
11,750
|
Total operating revenues
|
|
252,861
|
|
|
116,522
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
18,850
|
|
|
10,104
|
Selling, general and administrative
|
|
20,363
|
|
|
10,503
|
Depreciation
|
|
25,359
|
|
|
9,983
|
Amortization of intangible assets
|
|
10,387
|
|
|
—
|
Total operating expenses
|
|
74,959
|
|
|
30,590
|
Operating income
|
|
$
|
177,902
|
|
|
$
|
85,932
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
Gathering volumes (BBtu per day)
|
|
|
|
|
Firm capacity reservation
|
|
2,114
|
|
|
1,838
|
Volumetric based services (4)
|
|
4,437
|
|
|
370
|
Total gathered volumes
|
|
6,551
|
|
|
2,208
|
|
|
|
|
|
Capital expenditures
|
|
$
|
194,477
|
|
|
$
|
48,182
|
|
(1)
|
|
EQM’s consolidated financial statements have been retrospectively
recast to include the pre-acquisition results of the May 2018
Acquisition and the EQM-RMP Merger.
|
(2)
|
|
Includes fees on volumes gathered in excess of firm contracted
capacity.
|
(3)
|
|
Includes volumes from contracts under which EQM has agreed to hold
capacity available without charging a capacity reservation fee.
|
(4)
|
|
Includes volumes gathered under interruptible contracts and volumes
gathered in excess of firm contracted capacity.
|
|
EQM MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
TRANSMISSION RESULTS OF OPERATIONS
(1)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
FINANCIAL DATA
|
|
(Thousands, except per day
amounts)
|
Firm reservation fee revenues
|
|
$
|
82,669
|
|
|
$
|
84,438
|
Volumetric based fee revenues:
|
|
|
|
|
Usage fees under firm contracts (2)
|
|
5,331
|
|
|
3,427
|
Usage fees under interruptible contracts
|
|
1,350
|
|
|
1,906
|
Total volumetric based fee revenues
|
|
6,681
|
|
|
5,333
|
Total operating revenues
|
|
89,350
|
|
|
89,771
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
10,721
|
|
|
9,485
|
Selling, general and administrative
|
|
7,581
|
|
|
8,255
|
Depreciation
|
|
12,357
|
|
|
12,261
|
Total operating expenses
|
|
30,659
|
|
|
30,001
|
Operating income
|
|
$
|
58,691
|
|
|
$
|
59,770
|
|
|
|
|
|
Equity income
|
|
$
|
16,087
|
|
|
$
|
6,025
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
Firm capacity reservation
|
|
2,927
|
|
|
2,517
|
Volumetric based services (3)
|
|
104
|
|
|
21
|
Total transmission pipeline throughput
|
|
3,031
|
|
|
2,538
|
|
|
|
|
|
Average contracted firm transmission reservation commitments (BBtu per
day)
|
|
3,658
|
|
|
3,474
|
|
|
|
|
|
Capital expenditures
|
|
$
|
37,626
|
|
|
$
|
22,312
|
|
(1)
|
|
EQM’s consolidated financial statements have been retrospectively
recast to include the pre-acquisition results of the May 2018
Acquisition and the EQM-RMP Merger.
|
(2)
|
|
Includes fees on volumes transported in excess of firm contracted
capacity as well as usage fees and fees on all volumes transported
under firm contracts.
|
(3)
|
|
Includes volumes transported under interruptible contracts and
volumes transported in excess of firm contracted capacity.
|
|
EQM MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
WATER RESULTS OF OPERATIONS
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
FINANCIAL DATA
|
|
(Thousands)
|
Water services revenues
|
|
$
|
22,373
|
|
|
$
|
—
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
18,521
|
|
|
—
|
Selling, general and administrative
|
|
1,094
|
|
|
—
|
Depreciation
|
|
5,851
|
|
|
—
|
Total operating expenses
|
|
25,466
|
|
|
—
|
Operating (loss) income
|
|
$
|
(3,093
|
)
|
|
$
|
—
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
Water services volumes (MMgal)
|
|
449
|
|
|
—
|
|
|
|
|
|
Capital expenditures
|
|
$
|
7,981
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
EQM MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
CAPITAL EXPENDITURE SUMMARY
(1)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
(Thousands)
|
Expansion capital expenditures (2)
|
|
$
|
226,078
|
|
|
$
|
60,679
|
Ongoing maintenance capital expenditures
|
|
14,006
|
|
|
9,815
|
Total capital expenditures
|
|
$
|
240,084
|
|
|
$
|
70,494
|
|
(1)
|
|
EQM’s consolidated financial statements have been retrospectively
recast to include the pre-acquisition results of the May 2018
Acquisition and the EQM-RMP Merger.
|
(2)
|
|
Expansion capital expenditures do not include capital contributions
made to the MVP JV of $263.2 million and $43.5 million for the three
months ended September 30, 2018 and 2017, respectively.
|
|
EQGP HOLDINGS, LP AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(1)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
(Thousands, except per unit
amounts)
|
Operating revenues (2)
|
|
$
|
364,584
|
|
|
$
|
206,293
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
48,092
|
|
|
19,589
|
Selling, general and administrative
|
|
31,619
|
|
|
19,301
|
Depreciation
|
|
43,567
|
|
|
22,244
|
Amortization of intangible assets
|
|
10,387
|
|
|
—
|
Total operating expenses
|
|
133,665
|
|
|
61,134
|
Operating income
|
|
230,919
|
|
|
145,159
|
Equity income
|
|
16,087
|
|
|
6,025
|
Other income
|
|
1,345
|
|
|
637
|
Net interest expense
|
|
40,966
|
|
|
9,414
|
Net income
|
|
207,385
|
|
|
142,407
|
Net income attributable to noncontrolling interests
|
|
109,896
|
|
|
75,463
|
Net income attributable to EQGP
|
|
$
|
97,489
|
|
|
$
|
66,944
|
|
|
|
|
|
Calculation of limited partner interest in net income:
|
|
|
|
|
Net income attributable to EQGP
|
|
$
|
97,489
|
|
|
$
|
66,944
|
Less pre-acquisition net income allocated to parent
|
|
(2,386
|
)
|
|
—
|
Limited partner interest in net income
|
|
$
|
95,103
|
|
|
$
|
66,944
|
|
|
|
|
|
Net income per common unit – basic and diluted
|
|
$
|
0.31
|
|
|
$
|
0.25
|
Weighted average common units outstanding – basic and diluted
|
|
302,490
|
|
|
266,186
|
|
(1)
|
|
EQGP’s consolidated financial statements have been retrospectively
recast to include the pre-acquisition results of the May 2018
Acquisition and the EQM-RMP Merger.
|
(2)
|
|
Operating revenues included affiliate revenues from EQT of $276.9
million and $154.2 million for the three months ended September 30,
2018 and 2017, respectively.
|
Contacts:
For EQM Midstream Partners, LP and EQGP Holdings, LP
Analyst inquiries:
Nate Tetlow, 412-553-5834
Investor Relations Director
[email protected]
or
Media inquiries:
Natalie Cox, 412-395-3941
Corporate Director, Communications
[email protected]