PITTSBURGH--(BUSINESS WIRE)--EQT Midstream Partners, LP (NYSE: EQM) today announced first quarter
2018 results, including net income of $177.2 million, adjusted EBITDA of
$204.4 million, net cash provided by operating activities of $182.4
million, and distributable cash flow of $187.2 million. EQM operating
income was $178.3 million, which was 23% 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.
EQT GP Holdings, LP (NYSE: EQGP) today announced net income attributable
to EQGP of $80.7 million for the first quarter 2018.
EQM HIGHLIGHTS:
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Announced streamlining transaction in a separate news release issued
today
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Increased EQM per unit distribution by 20% compared to Q1 2017
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Maintained a 1.42x coverage ratio for the quarter
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Generated 89% of operating revenue from firm reservation fees
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Commenced construction of the Mountain Valley Pipeline
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Initiated a binding open season for the MVP Southgate project
EQM first quarter operating revenue increased $32.8 million, 16% higher
compared to the same quarter last year. The increase was primarily due
to higher contracted firm transmission and gathering capacity and
increased seasonal storage related services. During the quarter, 89% of
operating revenue was generated by firm reservation fees. Operating
expenses were flat versus the first quarter of 2017, as higher operating
and maintenance (O&M) expense and depreciation and amortization expense
were offset by lower selling, general and administrative (SG&A) expense.
The increase in O&M expense was driven by higher system throughput and
SG&A expense was lower primarily from a decrease in personnel costs.
STREAMLINING TRANSACTION
EQM, EQGP, Rice Midstream Partners LP (NYSE: RMP), and EQT Corporation
(NYSE: EQT) today announced a midstream streamlining transaction that
includes:
-
EQM's purchase of EQT's retained midstream assets for $1.15 billion in
cash and 5.9 million EQM common units and Gulfport Energy's 25%
ownership in the Strike Force Gathering System for $175 million in
cash.
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The merger of EQM and RMP in a unit-for-unit transaction at an
exchange ratio of 0.3319x, which implies a transaction value of $2.4
billion, including the assumption of RMP debt. The RMP debt balance
was $325 million as of March 31, 2018.
-
EQGP's purchase of the RMP Incentive Distribution Rights from EQT for
36.3 million EQGP common units.
For details on the streamlining transaction please refer to the news
release issued today and available at www.eqtmidstreampartners.com
or www.ricemidstream.com.
QUARTERLY DISTRIBUTION
EQM
For the first quarter of 2018, EQM will pay a quarterly cash
distribution of $1.065 per unit, which will be paid on May 15, 2018 to
EQM unitholders of record at the close of business on May 4, 2018. The
quarterly cash distribution is 4% higher than the fourth quarter of 2017
and is 20% higher than the first quarter of 2017.
EQGP
For the first quarter of 2018, EQGP will pay a quarterly cash
distribution of $0.258 per unit, which will be paid on May 24, 2018 to
EQGP unitholders of record at the close of business on May 4, 2018. The
quarterly cash distribution is 6% higher than the fourth quarter of 2017
and is 35% higher than the first quarter 2017 distribution. For the
quarter, EQGP expects to receive $69.7 million of cash distributions
from EQM and distribute $68.7 million.
GUIDANCE
The financial projections for full-year and Q2 2018 assume a May 1, 2018
effective date for the acquisition of EQT's retained midstream assets
and Gulfport Energy's 25% ownership of Strike Force (Ohio Gathering
Assets) and a September 1, 2018 closing date for the RMP merger. Over
the long-term, EQM is targeting 3.5x debt to EBITDA, which is an
investment grade metric; and a 1.1x-1.2x distribution coverage ratio.
EQM continues to target annual distribution per unit growth of 15% to
20% for several years. Based on the strength of EQM’s credit metrics and
the current organic growth project backlog, EQM is not forecasting any
additional public equity issuance at least through 2020.
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EQM
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2018
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2019
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2020
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Net Income ($B)
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$0.70 – $0.80
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$0.95 – $1.05
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$1.00 – $1.10
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Adjusted EBITDA ($B)
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$0.90 – $1.00
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$1.40 – $1.50
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$1.55 – $1.65
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Distributable Cash Flow ($B)
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$0.75 – $0.85
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$1.15 – $1.25
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$1.25 – $1.35
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Distribution per unit (using midpoint of guidance)*
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$4.50
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$5.29
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$6.21
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EQGP
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2018
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2019
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2020
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Distribution per unit*
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$1.21
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$1.67
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$2.09
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Distribution per unit year-over-year growth*
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39%
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38%
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25%
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*Based on midpoint of 15% - 20% year-over-year distribution
growth rate guidance for EQM.
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EQM
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Q2 2018
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Net Income ($MM)
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$170 – $180
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Adjusted EBITDA ($MM)
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$205 – $215
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Due to the seasonal nature of some transmission and storage services,
primarily from utility customer contracts, second quarter 2018 revenue
from these contracts and services will be lower than first quarter by
approximately $20 million.
EQM is unable to provide a projection of its full-year 2018, 2019 or
2020 net cash provided by operating activities, the most comparable
financial measure to distributable cash flow calculated in accordance
with GAAP. Please see the Non-GAAP Disclosures section of this news
release.
EQM EXPANSION & ONGOING MAINTENANCE CAPITAL
EXPENDITURES
Expansion
Expansion capital expenditures and capital contributions to Mountain
Valley Pipeline, LLC (MVP JV), totaled $198 million in the first quarter
2018. The full-year pro forma forecast below assumes a May 1, 2018
effective date for acquisition of the Ohio Gathering Assets and a
September 1, 2018 closing of the EQM/RMP merger.
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$MM
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Three Months Ended
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2018 Full-year
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March 31, 2018
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Pro Forma Forecast
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Mountain Valley Pipeline
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$117
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$1,000 - $1,200
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Gathering
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$67
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$485
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Transmission
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$14
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$100
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Water
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-
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$15
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Total
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$198
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$1,600 - $1,800
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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 $3.9 million in the first quarter 2018. EQM
forecasts pro forma full-year 2018 ongoing maintenance capital
expenditures of $45 million.
PROJECT UPDATE
Mountain Valley Pipeline
In January 2018, MVP JV began filing requests for partial Notices to
Proceed with the Federal Energy Regulatory Commission (FERC), and
subsequently has received permission to begin construction activities in
nearly all areas along the route. In the first quarter, MVP JV completed
all tree-felling activities subject to the March 31 biological deadline.
The 303-mile pipeline is estimated to cost $3.5 billion, with EQM
funding its proportional share, or approximately $1.6 billion. MVP JV
has secured a total of 2 Bcf per day of firm capacity commitments at
20-year terms and continues to target a late 2018 in-service date.
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 firm
capacity commitment from PSNC Energy. The final project scope will be
determined after a binding open season, which is scheduled to end on May
11, 2018. The preliminary project cost estimate is $350 to $500 million.
EQM is expected to have between 33% and 48% ownership in the project 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 55 miles from
southwestern Pennsylvania to Mobley, West Virginia, where both the MVP
and the Ohio Valley Connector originate. The pipeline is estimated to
cost $460 million and is expected to be placed in-service during the
third quarter of 2019.
MANAGEMENT
On March 14, 2018, Jerry Ashcroft was named President and Chief
Executive Officer of EQM, EQGP, and Rice Midstream Partners LP. Jerry
was previously senior vice president and chief operating officer for the
general partner of EQM. He has more than 15 years of experience in the
oil, gas, and pipeline industries – including most recently as chief
executive officer of Gulf Oil L.P.
NON-GAAP DISCLOSURES
EQM Adjusted EBITDA and Distributable Cash Flow
As used in this news release, EQM adjusted EBITDA means EQM’s net income
plus net interest expense, depreciation and amortization expense,
payments on EQM's preferred interest in EQT Energy Supply, LLC
(Preferred Interest) and non-cash long-term compensation expense less
equity income and AFUDC - equity. 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, and ongoing maintenance capital expenditures
net of expected reimbursements. 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 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;
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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 and distributable cash flow provide
useful information to investors in assessing EQM’s results of operations
and financial condition. 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 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 definition
of 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 March 31, 2018.
EQM is unable to project net cash provided by operating activities or
provide the related reconciliation between projected distributable cash
flow and projected net cash provided by operating activities, 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 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 the MVP JV’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 and
adjusted EBITDA to projected net cash provided by operating activities
and net income are not available without unreasonable effort.
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)
EBITDA means the earnings before interest, taxes and depreciation of the
EQT's retained midstream assets. EBITDA of these assets is a non-GAAP
supplemental financial measure that management and external users of
EQM’s consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, use to assess the impact of the
potential sale of the retained midstream assets from EQT Corporation
(EQT) to EQM through one or more drop-down transactions on EQM’s future
results of operations.
EQM believes that the projected EBITDA of the retained midstream assets
provides useful information to investors in assessing the impact of the
potential drop-down transactions on EQM’s future results of operations.
EBITDA should not be considered as an alternative to net income,
operating income, or any other measure of financial performance or
liquidity presented in accordance with GAAP. EBITDA has important
limitations as an analytical tool because it excludes some, but not all,
items that affect net income. Additionally, because EBITDA may be
defined differently by other companies in EQM’s industry, the definition
of EBITDA may not be comparable to similarly titled measures of other
companies, thereby diminishing the utility of the measure.
EQM has not provided projected net income from the retained midstream
assets, the most comparable financial measure calculated in accordance
with GAAP, or a reconciliation of projected EBITDA to projected net
income of the assets. The retained midstream assets are operated as part
of EQT’s Production business segment, and EQT does not allocate certain
costs, such as interest and tax expenses, to individual assets within
its business segments. Therefore, the projected net income of the
retained midstream assets and a reconciliation of projected EBITDA of
the assets to projected net income from those assets are not available
without unreasonable effort.
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Reconciliation of EQM Adjusted EBITDA and Distributable Cash
Flow
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Three Months Ended
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(Thousands)
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March 31, 2018
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Net income
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$
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177,218
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Add:
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Net interest expense
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10,833
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Depreciation and amortization expense
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23,179
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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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331
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Less:
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Equity income
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(8,811
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)
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AFUDC – equity
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(1,065
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)
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Adjusted EBITDA
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$
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204,431
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Less:
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Net interest expense excluding interest income on the Preferred
Interest
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(12,500
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)
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Capitalized interest and AFUDC – debt
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(817
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Ongoing maintenance capital expenditures net of expected
reimbursements
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(3,865
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)
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Distributable cash flow
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$
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187,249
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Distributions declared (1):
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Limited Partner
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$
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85,830
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General Partner
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46,491
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Total
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$
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132,321
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Coverage Ratio
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1.42x
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Net cash provided by operating activities
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$
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182,402
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Adjustments:
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Capitalized interest and AFUDC – debt
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(817
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)
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Principal payments received on the Preferred Interest
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1,079
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Ongoing maintenance capital expenditures net of expected
reimbursements
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(3,865
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)
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Other, including changes in working capital
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8,450
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Distributable cash flow
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$
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187,249
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(1)
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Reflects cash distribution of $1.065 per limited partner unit for
the first quarter 2018 and 80,591,366 limited partner units
outstanding as of March 31, 2018. If limited partner units are
issued on or prior to May 4, 2018, the aggregate level of all
distributions will be higher.
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Q1 2018 Webcast Information
EQM and EQGP will host a joint live webcast with security analysts today
at 11:30 a.m. ET. Topics include first quarter 2018 financial results,
operating results, the midstream streamlining transaction and other
matters. The webcast is available at
www.eqtmidstreampartners.com
,
with a replay available for seven days following the call.
EQT, which owns EQGP’s general partner and holds a 90% 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 first quarter 2018 results and the midstream
streamlining transaction. The webcast can be accessed via
www.eqt.com
,
with a replay available for seven days following the call.
About EQT Midstream Partners:
EQT Midstream Partners, LP is a growth-oriented limited partnership
formed by EQT Corporation to own, operate, acquire, and develop
midstream assets in the Appalachian Basin. The Partnership provides
midstream services to EQT Corporation and third-party companies through
its strategically located transmission, storage, and gathering systems
that service the Marcellus and Utica regions. The Partnership owns
approximately 950 miles of FERC-regulated interstate pipelines; and also
owns approximately 1,800 miles of high- and low-pressure gathering lines.
Visit EQT Midstream Partners, LP at
www.eqtmidstreampartners.com
.
About EQT GP Holdings:
EQT GP 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 EQT Midstream Partners, LP.
EQT Corporation owns the general partner interest and a 90% limited
partner interest in EQT GP Holdings, LP.
Visit EQT GP Holdings, LP at
www.eqtmidstreampartners.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.eqtmidstreampartners.com
.
Cautionary Statements
EQT is under no obligation to sell EQT's retained midstream assets to
EQM, is not restricted from competing with EQM and may acquire,
construct or dispose of midstream assets without any obligation to offer
EQM the opportunity to purchase or construct the assets.
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
first 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 and transmission and storage revenue and volume growth;
revenue and expense projections; infrastructure programs (including the
timing, cost, capacity and sources of funding with respect to gathering
and transmission projects); the cost, capacity, timing of regulatory
approvals and anticipated in-service date of the Mountain Valley
Pipeline (MVP) and MVP Southgate project; the ultimate terms, partners
and structure of, and EQM's ownership interest in, the MVP joint
venture; the timing of the proposed separation of EQT's production and
midstream businesses and the midstream streamlining transaction, and the
parties' ability to complete the separation and streamlining
transaction; the expected synergies resulting from the streamlining
transaction; asset acquisitions, including EQM’s ability to complete any
asset purchases from third parties and anticipated synergies and
accretion associated with any acquisition; the expected benefits to EQM
resulting from EQT's acquisition of Rice Energy Inc; 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;
liquidity and financing requirements, including funding sources and
availability; distribution amounts, rates and growth; projected net
income, projected adjusted EBITDA, projected EBITDA for EQT's retained
midstream assets and projected distributable cash flow; the timing and
amount of future issuances of EQM common units under EQM’s $750 million
at the market equity distribution program; 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.
No Offer or Solicitation
This release is for informational purposes only and shall not constitute
an offer to sell or the solicitation of an offer to buy any securities
pursuant to the proposed transactions or otherwise, nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction. No
offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find It
In connection with their proposed business combination transaction, EQM
and RMP intend to file a registration statement on Form S-4, containing
a proxy statement/prospectus (the Form S-4) with the SEC. This
communication is not a substitute for the registration statement,
definitive proxy statement/prospectus or any other documents that EQM or
RMP may file with the SEC or send to RMP unitholders in connection with
the proposed transaction. UNITHOLDERS OF RMP ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE FORM S-4 AND THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS INCLUDED THEREIN IF AND WHEN
FILED, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. When
available, investors and security holders will be able to obtain copies
of these documents, including the proxy statement/prospectus and the
registration statement, and any other documents that may be filed with
the SEC with respect to the proposed transaction free of charge at the
SEC’s website, http://www.sec.gov
or as described in the following paragraph.
The documents filed with the SEC by EQT and its publicly traded
subsidiaries (including EQM, RMP and EQGP) may be obtained free of
charge at the applicable website (www.eqt.com
for EQT, www.eqtmidstreampartners.com
for EQGP and EQM, and www.ricemidstream.com
for RMP) or by requesting them by mail at EQT Corporation, 625 Liberty
Avenue, Suite 1700, Pittsburgh, PA 15222, Attention: Investor Relations,
or by telephone at (412) 553-5700.
Participants in the Solicitation
EQT, EQM, RMP and EQGP (EQM, RMP and EQGP collectively, the
Partnerships) and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies
from the unitholders of RMP in connection with the proposed transaction.
Information about the directors and executive officers of the general
partners of EQM, RMP and EQGP is set forth, respectively, in the Annual
Report on Form 10-K for the year ended December 31, 2017 filed by such
Partnership with the SEC on February 15, 2018 and certain of the
Partnerships’ respective Current Reports on Form 8-K. Information
regarding EQT’s directors and executive officers is available in its
Annual Report on Form 10-K for the year ended December 31, 2017 filed by
EQT with the SEC on February 15, 2018, EQT’s definitive proxy statement
for its 2017 annual meeting of shareholders filed with the SEC on
February 17, 2017 and certain of EQT’s Current Reports on Form 8-K.
These documents can be obtained free of charge from the sources
indicated above. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in the
proxy statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
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EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
|
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
|
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Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
|
|
(Thousands, except per unit
amounts)
|
Operating revenues (1)
|
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$
|
232,842
|
|
|
$
|
200,072
|
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
18,176
|
|
|
16,817
|
|
Selling, general and administrative
|
|
13,145
|
|
|
17,400
|
|
Depreciation and amortization
|
|
23,179
|
|
|
20,547
|
|
Total operating expenses
|
|
54,500
|
|
|
54,764
|
|
Operating income
|
|
178,342
|
|
|
145,308
|
|
Equity income
|
|
8,811
|
|
|
4,277
|
|
Other income
|
|
898
|
|
|
1,537
|
|
Net interest expense
|
|
10,833
|
|
|
7,926
|
|
Net income
|
|
$
|
177,218
|
|
|
$
|
143,196
|
|
|
|
|
|
|
Calculation of limited partner interest in net income:
|
|
|
|
|
Net income
|
|
$
|
177,218
|
|
|
$
|
143,196
|
|
Less general partner interest in net income – general partner units
|
|
(3,117
|
)
|
|
(2,519
|
)
|
Less general partner interest in net income – incentive distribution
rights
|
|
(44,164
|
)
|
|
(30,686
|
)
|
Limited partner interest in net income
|
|
$
|
129,937
|
|
|
$
|
109,991
|
|
|
|
|
|
|
Net income per limited partner unit – basic and diluted
|
|
$
|
1.61
|
|
|
$
|
1.36
|
|
Weighted average limited partner units outstanding – basic and
diluted
|
|
80,607
|
|
|
80,602
|
|
(1)
|
|
Operating revenues included affiliate revenues from EQT of
$160.6 million and $143.4 million for the three months ended March
31, 2018 and 2017, respectively.
|
|
|
|
|
|
|
EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
|
GATHERING RESULTS OF OPERATIONS
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
FINANCIAL DATA
|
|
(Thousands, except per day
amounts)
|
Firm reservation fee revenues
|
|
$
|
109,933
|
|
|
$
|
94,271
|
Volumetric based fee revenues:
|
|
|
|
|
Usage fees under firm contracts (1)
|
|
12,108
|
|
|
4,821
|
Usage fees under interruptible contracts
|
|
3,867
|
|
|
3,237
|
Total volumetric based fee revenues
|
|
15,975
|
|
|
8,058
|
Total operating revenues
|
|
125,908
|
|
|
102,329
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
10,625
|
|
|
10,340
|
Selling, general and administrative
|
|
5,654
|
|
|
9,425
|
Depreciation and amortization
|
|
10,738
|
|
|
8,860
|
Total operating expenses
|
|
27,017
|
|
|
28,625
|
Operating income
|
|
$
|
98,891
|
|
|
$
|
73,704
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
Gathering volumes (BBtu per day)
|
|
|
|
|
Firm capacity reservation
|
|
1,964
|
|
|
1,728
|
Volumetric based services (2)
|
|
600
|
|
|
224
|
Total gathered volumes
|
|
2,564
|
|
|
1,952
|
|
|
|
|
|
Capital expenditures
|
|
$
|
68,933
|
|
|
$
|
48,838
|
(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.
|
|
|
|
|
|
|
EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
|
TRANSMISSION RESULTS OF OPERATIONS
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
FINANCIAL DATA
|
|
(Thousands, except per day
amounts)
|
Firm reservation fee revenues
|
|
$
|
97,775
|
|
|
$
|
92,274
|
Volumetric based fee revenues:
|
|
|
|
|
Usage fees under firm contracts (1)
|
|
3,822
|
|
|
2,857
|
Usage fees under interruptible contracts
|
|
5,337
|
|
|
2,612
|
Total volumetric based fee revenues
|
|
9,159
|
|
|
5,469
|
Total operating revenues
|
|
106,934
|
|
|
97,743
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
7,551
|
|
|
6,477
|
Selling, general and administrative
|
|
7,491
|
|
|
7,975
|
Depreciation and amortization
|
|
12,441
|
|
|
11,687
|
Total operating expenses
|
|
27,483
|
|
|
26,139
|
Operating income
|
|
$
|
79,451
|
|
|
$
|
71,604
|
|
|
|
|
|
OPERATIONAL DATA
|
|
|
|
|
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
Firm capacity reservation
|
|
2,815
|
|
|
2,119
|
Volumetric based services (2)
|
|
42
|
|
|
31
|
Total transmission pipeline throughput
|
|
2,857
|
|
|
2,150
|
|
|
|
|
|
Average contracted firm transmission reservation commitments (BBtu
per day)
|
|
4,140
|
|
|
3,743
|
|
|
|
|
|
Capital expenditures
|
|
$
|
18,929
|
|
|
$
|
21,389
|
(1)
|
|
Includes fees on volumes transported in excess of firm
contracted capacity as well as commodity charges and fees on all
volumes transported under firm contracts.
|
(2)
|
|
Includes volumes transported under interruptible contracts and
volumes transported in excess of firm contracted capacity.
|
|
|
|
|
|
|
EQT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
|
CAPITAL EXPENDITURE SUMMARY
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
|
|
(Thousands)
|
Expansion capital expenditures (1)
|
|
$
|
80,554
|
|
|
$
|
66,645
|
Maintenance capital expenditures:
|
|
|
|
|
Ongoing maintenance
|
|
6,664
|
|
|
3,582
|
Funded regulatory compliance
|
|
644
|
|
|
—
|
Total maintenance capital expenditures
|
|
7,308
|
|
|
3,582
|
Total capital expenditures
|
|
$
|
87,862
|
|
|
$
|
70,227
|
(1)
|
|
Expansion capital expenditures do not include capital
contributions made to the MVP JV of $117.0 million and $19.8
million for the three months ended March 31, 2018 and 2017,
respectively.
|
|
|
|
|
|
|
|
|
EQT GP HOLDINGS, LP AND SUBSIDIARIES
|
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
|
2017
|
|
|
(Thousands, except per unit
amounts)
|
Operating revenues (1)
|
|
$
|
232,842
|
|
$
|
200,072
|
Operating expenses:
|
|
|
|
|
Operating and maintenance
|
|
18,176
|
|
16,817
|
Selling, general and administrative
|
|
14,372
|
|
18,612
|
Depreciation and amortization
|
|
23,179
|
|
20,547
|
Total operating expenses
|
|
55,727
|
|
55,976
|
Operating income
|
|
177,115
|
|
144,096
|
Equity income
|
|
8,811
|
|
4,277
|
Other income
|
|
898
|
|
1,537
|
Net interest expense
|
|
10,817
|
|
7,922
|
Net income
|
|
176,007
|
|
141,988
|
Net income attributable to noncontrolling interests
|
|
95,334
|
|
80,612
|
Net income attributable to EQT GP Holdings, LP
|
|
$
|
80,673
|
|
$
|
61,376
|
|
|
|
|
|
Net income per common unit – basic and diluted
|
|
$
|
0.30
|
|
$
|
0.23
|
Weighted average common units outstanding – basic and diluted
|
|
266,193
|
|
266,183
|
(1)
|
|
Operating revenues included affiliate revenues from EQT of
$160.6 million and $143.4 million for the three months ended March
31, 2018 and 2017, respectively.
|
|
|
|
Contact:
EQT Midstream Partners, LP and EQT GP Holdings, LP
Analyst inquiries:
Nate Tetlow, 412-553-5834
Investor Relations Director
ntetlow@eqtmidstreampartners.com
or
Patrick Kane, 412-553-7833
Chief Investor Relations Officer
pkane@eqt.com
or
Media inquiries:
Natalie Cox, 412-395-3941
Corporate Director, Communications
ncox@eqt.com