|
2015 Results Announced for EQT Midstream Partners and EQT GP Holdings
EQT Midstream Partners, LP (NYSE: EQM) today announced full-year and
fourth quarter 2015 financial and operating results. For the year, EQT
Midstream Partners, LP (EQM) net income totaled $393.5 million, while
adjusted EBITDA was $449.0 million and distributable cash flow was
$406.5 million. For the fourth quarter, EQM net income totaled $112.7
million, while adjusted EBITDA was $128.6 million and distributable cash
flow was $111.9 million. Adjusted operating income for the fourth
quarter was $117.0 million, or 24% higher than the same quarter last
year. The non-GAAP financial measures are reconciled in the Non-GAAP
Disclosures section of this news release.
EQT GP Holdings, LP (NYSE: EQGP) today announced net income attributable
to EQT GP Holdings, LP (EQGP) of $145.9 million for the full-year 2015
and $45.2 million for the fourth quarter.
2015 EQM Highlights:
-
Achieved 23% year-over-year per unit distribution growth
-
Maintained a 1.67x coverage ratio for the year
-
Generated 82% of revenue from firm reservation fees
-
Completed Northern West Virginia Marcellus Gathering System acquisition
-
Placed in-service 300 MMcf per day of firm gathering capacity
-
Received approval to commence construction of the Ohio Valley Connector
-
Added new demand-focused partners and shippers to the Mountain Valley
Pipeline
In December 2013, EQM entered into a capital lease with EQT Corporation
(EQT) for its Allegheny Valley Connector facilities (AVC), which
includes a 200-mile pipeline regulated by the Federal Energy Regulatory
Commission (FERC). EQM operates the AVC and the related revenue and
expenses are included in the financial statements; however, the monthly
lease payment to EQT offsets the impact on distributable cash flow. As a
result, fourth quarter 2015 operating results are discussed on an
adjusted basis, excluding the AVC. Payments due under the lease totaled
$6.7 million for the fourth quarter and $22.1 million for the full-year.
The revenue and expenses associated with the AVC are found in the
reconciliation table in the Non-GAAP Disclosures section of this news
release.
EQM fourth quarter adjusted operating revenue increased $27.1 million,
or 21%, compared to the same quarter last year, primarily due to an
increase in both contracted firm gathering capacity and gathered
volumes. Adjusted operating expenses were up $4.4 million versus the
fourth quarter of 2014, consistent with the growth of the business.
QUARTERLY DISTRIBUTION
EQM
For the fourth quarter of 2015, EQM will pay a quarterly cash
distribution of $0.71 per unit. The distribution will be paid on
February 12, 2016 to EQM unitholders of record at the close of business
on February 1, 2016. The quarterly cash distribution is $0.035 per unit,
or 5% higher than the third quarter of 2015 and $0.13 per unit, or 22%
higher than the fourth quarter of 2014.
EQGP
For the fourth quarter of 2015, EQGP will pay a quarterly cash
distribution of $0.122 per unit. The distribution represents a 17%
increase to the third quarter of 2015. The distribution will be paid on
February 22, 2016 to EQGP unitholders of record at the close of business
on February 1, 2016. For the quarter, EQGP expects to receive $33.0
million of cash distributions from EQM and will distribute $32.5
million. The expected fourth quarter 2015 cash distributions from EQM
are 80% higher than the comparable distributions EQT received from EQM
in the fourth quarter of 2014, which was prior to the EQGP initial
public offering.
GUIDANCE
EQM forecasts first quarter 2016 adjusted EBITDA of $132 – $137 million
and reiterates its full-year 2016 adjusted EBITDA forecast of $530 –
$550 million, and distributable cash flow of $460 – $480 million. EQM
forecasts a per unit distribution of $3.19 for 2016, which is 21% higher
than the 2015 per unit distribution of $2.635. EQGP forecasts a per unit
distribution of $0.62 for 2016, which is 55% higher than the pro-forma
full-year 2015 per unit distribution of $0.40.
EQM lowered its 2016 forecast of growth capital expenditures, including
capital contributions to Mountain Valley Pipeline, LLC by $25 million to
approximately $695 – $725 million. The update reflects the reduction in
EQM’s ownership interest in Mountain Valley Pipeline, LLC (MVP JV),
which is discussed in the Project Updates section of this news release.
The financial and distribution guidance does not include financial
impacts of potential acquisitions.
EQM CAPITAL EXPENDITURES
Expansion
Total expansion capital expenditures, including capital contributions to
MVP JV, totaled $86 million in the fourth quarter 2015 and $420 million
for the year.
During the fourth quarter, EQM continued its gathering infrastructure
expansion with approximately $47 million in investments related to
gathering pipeline and compression projects for EQT and third-party
producers. A majority of the investment was related to the Jupiter
Gathering System (Jupiter), the Northern West Virginia Marcellus
Gathering System (NWV Gathering), and the trunk-line project for Range
Resources. During the quarter, EQM installed a new compressor station in
NWV Gathering, which increased the firm capacity to 560 MMcf per day.
For the year, EQM invested approximately $200 million in gathering
infrastructure and added a total of 300 MMcf per day of firm capacity,
including 200 MMcf per day in Jupiter and 100 MMcf per day in NWV
Gathering.
EQM invested approximately $32 million in the Ohio Valley Connector
(OVC) project during the fourth quarter and $101 million during the
year. The 2015 capital was primarily related to pipe, compression,
rights-of-way, and environmental assessments.
Additional investment in other transmission expansion projects totaled
$8 million during the quarter and $44 million for the year. During 2015,
EQM added 100 MMcf per day of firm capacity to the Equitrans
Transmission System.
EQM made capital contributions of $75 million to MVP JV in 2015.
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 $11.3 million in the fourth quarter 2015 and
$20.1 million for the full-year 2015.
Project Updates
Ohio Valley Connector
On December 30, 2015, EQM received the FERC certificate authorizing the
construction of the 37-mile OVC pipeline. The pipeline will provide
access to Mid-West and Gulf Coast markets through planned pipeline
interconnects in Clarington, Ohio. Construction is underway and the
pipeline, which will provide approximately 1.0 Bcf per day of
transmission capacity, is expected to be placed in-service by year-end
2016. EQM has entered into a 20-year transportation service agreement
with an affiliate of EQT Corporation for a total of 650 MMcf per day of
firm transmission capacity on the OVC.
Mountain Valley Pipeline
On October 23, 2015, MVP JV filed the formal application requesting FERC
authorization to construct the 301-mile Mountain Valley Pipeline (MVP).
The interstate pipeline will extend from EQM’s transmission and storage
system in Wetzel County, West Virginia to TransCo Station 165 in
Pittsylvania County, Virginia and is expected to be fully in-service
during the fourth quarter of 2018. The pipeline will connect the growing
natural gas demand markets in the Mid-Atlantic, Southeast, and Northeast
regions with reliable, low-cost Marcellus and Utica supply.
On January 22, 2016, MVP JV announced that Consolidated Edison, Inc.
(Con Edison), through its subsidiaries, has contracted for 250 MMcf per
day of firm capacity on the MVP and has acquired a 12.5% ownership
interest in MVP JV. In addition to its MVP capacity commitment, Con
Edison has also agreed to 250 MMcf per day of firm transmission capacity
on EQM’s Equitrans Transmission System.
EQM will be the operator of the proposed pipeline and holds a 45.5%
ownership interest in MVP JV. The pipeline is estimated to cost $3.0 -
$3.5 billion, with EQM funding its proportionate share, which is
approximately $1.5 billion. In addition to EQM and Con Edison, the other
MVP JV owners are affiliates of NextEra Energy, Inc. at 31% ownership;
WGL Holdings, Inc. at 7%; Vega Energy Partners, Ltd. at 3%; and RGC
Resources, Inc. at 1% ownership.
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 interest expense, depreciation and amortization expense, income tax
expense (if applicable), and non-cash long-term compensation expense
less equity income, other income, capital lease payments and NWV
Gathering adjusted EBITDA prior to acquisition. As used in this news
release, distributable cash flow means EQM adjusted EBITDA less interest
expense, excluding capital lease interest 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:
-
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 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.
EQM believes that adjusted EBITDA and distributable cash flow provide
useful information to investors in assessing EQM’s financial condition
and results of operations. 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 measure. 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 annual report on Form
10-K for the year ended December 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of EQM Adjusted EBITDA and Distributable Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31, 2015
|
|
|
|
December 31, 2015
|
|
|
|
|
|
(in thousands)
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
Transmission and storage
|
|
|
|
$
|
79,488
|
|
|
|
|
$
|
296,895
|
|
|
Gathering
|
|
|
|
|
86,433
|
|
|
|
|
|
317,239
|
|
|
Total operating revenues
|
|
|
|
|
165,921
|
|
|
|
|
|
614,134
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
|
18,094
|
|
|
|
|
|
68,261
|
|
|
Selling, general and administrative
|
|
|
|
|
12,840
|
|
|
|
|
|
56,425
|
|
|
Depreciation and amortization
|
|
|
|
|
14,238
|
|
|
|
|
|
51,640
|
|
|
Total operating expenses
|
|
|
|
|
45,172
|
|
|
|
|
|
176,326
|
|
|
Operating income
|
|
|
|
|
120,749
|
|
|
|
|
|
437,808
|
|
|
Equity income
|
|
|
|
|
1,220
|
|
|
|
|
|
2,367
|
|
|
Other income
|
|
|
|
|
2,040
|
|
|
|
|
|
5,639
|
|
|
Interest expense
|
|
|
|
|
11,300
|
|
|
|
|
|
45,661
|
|
|
Income tax expense
|
|
|
|
|
–
|
|
|
|
|
|
6,703
|
|
|
Net income
|
|
|
|
$
|
112,709
|
|
|
|
|
$
|
393,450
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
11,300
|
|
|
|
|
|
45,661
|
|
|
Depreciation and amortization expense
|
|
|
|
|
14,238
|
|
|
|
|
|
51,640
|
|
|
Income tax expense
|
|
|
|
|
–
|
|
|
|
|
|
6,703
|
|
|
Non-cash long-term compensation expense
|
|
|
|
|
334
|
|
|
|
|
|
1,467
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Equity income
|
|
|
|
|
(1,220
|
)
|
|
|
|
|
(2,367
|
)
|
|
Other income
|
|
|
|
|
(2,040
|
)
|
|
|
|
|
(5,639
|
)
|
|
Capital lease payments
|
|
|
|
|
(6,710
|
)
|
|
|
|
|
(22,059
|
)
|
|
Adjusted EBITDA attributable to NWV Gathering prior to acquisition(1)
|
|
|
|
|
–
|
|
|
|
|
|
(19,841
|
)
|
|
Adjusted EBITDA
|
|
|
|
$
|
128,611
|
|
|
|
|
$
|
449,015
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Interest expense, excluding capital lease interest
|
|
|
|
|
(5,465
|
)
|
|
|
|
|
(22,436
|
)
|
|
Ongoing maintenance capital expenditures, net of reimbursements
|
|
|
|
|
(11,272
|
)
|
|
|
|
|
(20,099
|
)
|
|
Distributable cash flow
|
|
|
|
$
|
111,874
|
|
|
|
|
$
|
406,480
|
|
|
Distributions declared(2):
|
|
|
|
|
|
|
|
|
|
Limited Partner
|
|
|
|
$
|
55,039
|
|
|
|
|
$
|
191,936
|
|
|
General Partner
|
|
|
|
|
17,536
|
|
|
|
|
|
51,721
|
|
|
Total
|
|
|
|
$
|
72,575
|
|
|
|
|
$
|
243,657
|
|
|
Coverage ratio
|
|
|
|
1.54x
|
|
|
|
1.67x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
(in thousands)
|
|
Net cash provided by operating activities
|
|
|
|
$
|
143,613
|
|
|
|
|
$
|
463,476
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
11,300
|
|
|
|
|
|
45,661
|
|
|
Current tax expense
|
|
|
|
|
–
|
|
|
|
|
|
3,705
|
|
|
Capital lease payments
|
|
|
|
|
(6,710
|
)
|
|
|
|
|
(22,059
|
)
|
|
Adjusted EBITDA attributable to NWV Gathering prior to acquisition (1)
|
|
|
|
|
–
|
|
|
|
|
|
(19,841
|
)
|
|
Other, including changes in working capital
|
|
|
|
|
(19,592
|
)
|
|
|
|
|
(21,927
|
)
|
|
Adjusted EBITDA
|
|
|
|
$
|
128,611
|
|
|
|
|
$
|
449,015
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
Adjusted EBITDA attributable to NWV Gathering prior to acquisition
was excluded from EQM’s adjusted EBITDA calculation as these amounts
were generated by NWV Gathering prior to EQM’s acquisition;
therefore, they were not amounts that could have been distributed to
EQM’s unitholders. Adjusted EBITDA attributable to NWV Gathering for
the year ended December 31, 2015 was calculated as net income of
$11.1 million plus depreciation and amortization expense of $2.0
million plus income tax expense of $6.7 million.
|
|
(2)
|
|
|
|
Reflects cash distributions declared of $0.71 per limited partner
unit for the fourth quarter and $2.635 for the full-year 2015.
|
|
|
|
|
|
|
EQM Adjusted Operating Revenues, Adjusted Operating Expenses,
Adjusted Operating Income and Adjusted Income Before Income Taxes
EQM adjusted operating revenues, adjusted operating expenses, adjusted
operating income and adjusted income before income taxes, all of which
exclude the impact of the AVC, are non-GAAP supplemental financial
measures that are presented because they are important measures used by
management to evaluate EQM’s performance. The AVC did not have a net
positive or negative impact on EQM’s distributable cash flow. Adjusted
operating revenues, adjusted operating expenses, adjusted operating
income and adjusted income before income taxes should not be considered
as alternatives to operating revenues, operating expenses, operating
income or income before income taxes, or any other measure of financial
performance presented in accordance with GAAP. The table below
reconciles adjusted operating revenues, adjusted operating expenses,
adjusted operating income and adjusted income before income taxes with
operating revenues, operating expenses, operating income and income
before income taxes as derived from the statements of consolidated
operations to be included in EQM’s annual report on Form 10-K for the
year ended December 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Reported
|
|
|
|
Adjustment to
|
|
|
|
Results
|
|
(in thousands)
|
|
|
|
Results
|
|
|
|
exclude AVC
|
|
|
|
(excludes AVC)
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues – affiliate
|
|
|
$
|
121,686
|
|
|
$
|
–
|
|
|
|
$
|
121,686
|
|
Operating revenues – third party
|
|
|
|
44,235
|
|
|
|
(9,557
|
)
|
|
|
|
34,678
|
|
Total operating revenues
|
|
|
|
165,921
|
|
|
|
(9,557
|
)
|
|
|
|
156,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
18,094
|
|
|
|
(1,488
|
)
|
|
|
|
16,606
|
|
Selling, general and administrative
|
|
|
|
12,840
|
|
|
|
(1,359
|
)
|
|
|
|
11,481
|
|
Depreciation and amortization
|
|
|
|
14,238
|
|
|
|
(2,952
|
)
|
|
|
|
11,286
|
|
Total operating expenses
|
|
|
|
45,172
|
|
|
|
(5,799
|
)
|
|
|
|
39,373
|
|
Operating income
|
|
|
|
120,749
|
|
|
|
(3,758
|
)
|
|
|
|
116,991
|
|
Equity income
|
|
|
|
1,220
|
|
|
|
–
|
|
|
|
|
1,220
|
|
Other income
|
|
|
|
2,040
|
|
|
|
–
|
|
|
|
|
2,040
|
|
Interest expense
|
|
|
|
11,300
|
|
|
|
(5,835
|
)
|
|
|
|
5,465
|
|
Income before income taxes
|
|
|
$
|
112,709
|
|
|
$
|
2,077
|
|
|
|
$
|
114,786
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2014(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
|
|
|
|
|
|
Reported
|
|
|
|
Adjustment to
|
|
|
|
Results
|
|
(in thousands)
|
|
|
|
Results
|
|
|
|
exclude AVC
|
|
|
|
(excludes AVC)
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues – affiliate
|
|
|
$
|
94,588
|
|
|
$
|
–
|
|
|
|
$
|
94,588
|
|
Operating revenues – third party
|
|
|
|
43,802
|
|
|
|
(9,107
|
)
|
|
|
|
34,695
|
|
Total operating revenues
|
|
|
|
138,390
|
|
|
|
(9,107
|
)
|
|
|
|
129,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
15,074
|
|
|
|
(1,665
|
)
|
|
|
|
13,409
|
|
Selling, general and administrative
|
|
|
|
10,411
|
|
|
|
(400
|
)
|
|
|
|
10,011
|
|
Depreciation and amortization
|
|
|
|
13,076
|
|
|
|
(1,489
|
)
|
|
|
|
11,587
|
|
Total operating expenses
|
|
|
|
38,561
|
|
|
|
(3,554
|
)
|
|
|
|
35,007
|
|
Operating income
|
|
|
|
99,829
|
|
|
|
(5,553
|
)
|
|
|
|
94,276
|
|
Other income
|
|
|
|
715
|
|
|
|
–
|
|
|
|
|
715
|
|
Interest expense
|
|
|
|
9,912
|
|
|
|
(4,874
|
)
|
|
|
|
5,038
|
|
Income before income taxes
|
|
|
$
|
90,632
|
|
|
$
|
(679
|
)
|
|
|
$
|
89,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Q4 2014 has been recast to include the
historical results of NWV Gathering.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 and Full-year 2015 Webcast Information
EQM and EQGP will host a joint live webcast with security analysts today
at 11:30 a.m. ET. Topics include fourth quarter and full-year 2015
financial results, operating results, 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-in,
as the discussion may include topics relevant to EQM and EQGP, such as
EQT's financial and operational results, potential asset dropdown
transactions, and specific reference to EQM and EQGP fourth quarter and
full-year 2015 results. 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 700
miles and operates an additional 200 miles of FERC-regulated interstate
pipelines; and also owns more than 1,600 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 a 27.6% limited
partner interest and 1.8% general partner interest, including 100% of
the incentive distribution rights, in EQT Midstream Partners, LP. EQT
Corporation owns a 90.1% 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
EQM is unable to provide a reconciliation of its projected adjusted
EBITDA and projected distributable cash flow to projected net income or
projected net cash provided by operating activities, the most comparable
financial measures calculated in accordance with generally accepted
accounting principles (GAAP), because of uncertainties associated with
projecting future net income and changes in assets and liabilities.
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
transmission and storage and gathering revenue and volume growth;
revenue projections; infrastructure programs (including the timing,
cost, capacity and sources of funding with respect to transmission and
gathering projects); the timing, cost, capacity and expected
interconnects with facilities and pipelines of the Ohio Valley Connector
and the Mountain Valley Pipeline (MVP); the ultimate terms, partners and
structure of the MVP joint venture; natural gas production growth in
EQM’s operating areas for EQT and third parties; asset acquisitions,
including EQM’s ability to complete any asset purchases from EQT or
third parties and anticipated synergies and accretion associated with
any acquisition; internal rate of return (IRR); compound annual growth
rate (CAGR); capital commitments, projected 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 adjusted EBITDA and projected distributable cash flow,
including the effect of the AVC lease on distributable cash flows;
future AVC lease payments; the timing and amount of future issuances of
EQM common units under EQM’s $750 million at the market equity
distribution program; the use of proceeds from EQM capital market
transactions; 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 (i) Item 1A, “Risk Factors” of EQM’s Form 10-K for the year
ended December 31, 2014 as filed with the SEC and Item 1A, “Risk
Factors” of EQM’s Form 10-K for the year ended December 31, 2015 to be
filed with the SEC, and (ii) Part II, Item 1A, “Risk Factors” of EQGP’s
Form 10-Q for the quarter ended June 30, 2015 as filed with the SEC and
Item 1A, “Risk Factors” of EQGP’s Form 10-K for the year ended December
31, 2015 to be 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.
|
|
|
|
|
|
|
|
|
|
|
EQT Midstream Partners, LP
|
|
Statements of Consolidated Operations
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
(in thousands, except per unit amounts)
|
|
|
|
2015
|
|
|
|
2014(1)
|
|
|
|
2015(1)
|
|
|
|
2014(1)
|
|
Operating revenues(2)
|
|
|
$
|
165,921
|
|
|
|
$
|
138,390
|
|
|
|
$
|
614,134
|
|
|
|
$
|
476,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
18,094
|
|
|
|
|
15,074
|
|
|
|
|
68,261
|
|
|
|
|
55,276
|
|
|
Selling, general and administrative
|
|
|
|
12,840
|
|
|
|
|
10,411
|
|
|
|
|
56,425
|
|
|
|
|
48,505
|
|
|
Depreciation and amortization
|
|
|
|
14,238
|
|
|
|
|
13,076
|
|
|
|
|
51,640
|
|
|
|
|
46,054
|
|
|
Total operating expenses
|
|
|
|
45,172
|
|
|
|
|
38,561
|
|
|
|
|
176,326
|
|
|
|
|
149,835
|
|
|
Operating income
|
|
|
|
120,749
|
|
|
|
|
99,829
|
|
|
|
|
437,808
|
|
|
|
|
326,712
|
|
|
Equity income
|
|
|
|
1,220
|
|
|
|
|
–
|
|
|
|
|
2,367
|
|
|
|
|
–
|
|
|
Other income
|
|
|
|
2,040
|
|
|
|
|
715
|
|
|
|
|
5,639
|
|
|
|
|
2,349
|
|
|
Interest expense
|
|
|
|
11,300
|
|
|
|
|
9,912
|
|
|
|
|
45,661
|
|
|
|
|
30,856
|
|
|
Income before income taxes
|
|
|
|
112,709
|
|
|
|
|
90,632
|
|
|
|
|
400,153
|
|
|
|
|
298,205
|
|
|
Income tax expense
|
|
|
|
–
|
|
|
|
|
5,799
|
|
|
|
|
6,703
|
|
|
|
|
31,705
|
|
|
Net income
|
|
|
$
|
112,709
|
|
|
|
$
|
84,833
|
|
|
|
$
|
393,450
|
|
|
|
$
|
266,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of limited partner interest in net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
112,709
|
|
|
|
$
|
84,833
|
|
|
|
$
|
393,450
|
|
|
|
$
|
266,500
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-acquisition net income allocated to parent
|
|
|
|
–
|
|
|
|
|
(10,277
|
)
|
|
|
|
(11,106
|
)
|
|
|
|
(53,878
|
)
|
|
General partner interest in net income
|
|
|
|
(18,297
|
)
|
|
|
|
(6,551
|
)
|
|
|
|
(54,447
|
)
|
|
|
|
(15,705
|
)
|
|
Limited partner interest in net income
|
|
|
$
|
94,412
|
|
|
|
$
|
68,005
|
|
|
|
$
|
327,897
|
|
|
|
$
|
196,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per limited partner unit - basic
|
|
|
$
|
1.27
|
|
|
|
$
|
1.12
|
|
|
|
$
|
4.71
|
|
|
|
$
|
3.53
|
|
|
Net income per limited partner unit - diluted
|
|
|
$
|
1.26
|
|
|
|
$
|
1.12
|
|
|
|
$
|
4.70
|
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average limited partner units outstanding – basic
|
|
|
|
74,626
|
|
|
|
|
60,699
|
|
|
|
|
69,612
|
|
|
|
|
55,745
|
|
|
Weighted average limited partner units outstanding – diluted
|
|
|
|
74,788
|
|
|
|
|
60,877
|
|
|
|
|
69,773
|
|
|
|
|
55,883
|
|
|
|
|
|
|
(1)
|
|
The twelve months ended December 31, 2015 and the three months ended
December 31, 2014 have been recast to include historical results of
NWV Gathering. The twelve months ended December 31, 2014 have been
recast to include historical results of NWV Gathering and Jupiter.
|
|
(2)
|
|
Operating revenues included affiliate revenues of $121.7 million and
$94.6 million for the three months ended December 31, 2015 and 2014,
respectively. Operating revenues included affiliate revenues of
$447.6 million and $328.5 million for the twelve months ended
December 31, 2015 and 2014, respectively.
|
|
|
|
|
|
|
|
|
|
EQT Midstream Partners, LP
|
|
Operating Revenues
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
(in thousands)
|
|
|
2015
|
|
|
2014(1)
|
|
|
2015(1)
|
|
|
2014(1)
|
|
Transmission and Storage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm reservation fee revenues
|
|
|
$
|
65,139
|
|
|
$
|
63,214
|
|
|
|
$ 247,231
|
|
|
|
$
|
202,112
|
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Usage fees under firm contracts(2)
|
|
|
|
12,429
|
|
|
|
7,845
|
|
|
|
42,646
|
|
|
|
|
41,828
|
|
|
Usage fees under interruptible contracts
|
|
|
|
1,920
|
|
|
|
2,883
|
|
|
|
7,018
|
|
|
|
|
10,880
|
|
|
Total volumetric based fee revenues
|
|
|
|
14,349
|
|
|
|
10,728
|
|
|
|
49,664
|
|
|
|
|
52,708
|
|
|
Total transmission and storage revenues
|
|
|
$
|
79,488
|
|
|
$
|
73,942
|
|
|
|
$ 296,895
|
|
|
|
$
|
254,820
|
|
|
Gathering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm reservation fee revenues
|
|
|
$
|
73,777
|
|
|
$
|
16,370
|
|
|
|
$ 256,217
|
|
|
|
$
|
37,449
|
|
|
Volumetric based fee revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Usage fees under firm contracts(2)
|
|
|
|
7,845
|
|
|
|
17,162
|
|
|
|
33,021
|
|
|
|
|
44,594
|
|
|
Usage fees under interruptible contracts
|
|
|
|
4,811
|
|
|
|
30,916
|
|
|
|
28,001
|
|
|
|
|
139,684
|
|
|
Total volumetric based fee revenues
|
|
|
|
12,656
|
|
|
|
48,078
|
|
|
|
61,022
|
|
|
|
|
184,278
|
|
|
Total gathering revenues
|
|
|
$
|
86,433
|
|
|
$
|
64,448
|
|
|
|
$ 317,239
|
|
|
|
$
|
221,727
|
|
|
|
|
|
|
(1)
|
|
The twelve months ended December 31, 2015 and the three months ended
December 31, 2014 have been recast to include historical results of
NWV Gathering. The twelve months ended December 31, 2014 have been
recast to include historical results of NWV Gathering and Jupiter.
|
|
(2)
|
|
Includes commodity charges and fees on volumes in excess of firm
contracted capacity.
|
|
|
|
|
|
|
|
|
|
|
|
EQT Midstream Partners, LP
|
|
Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2015
|
|
|
|
2014(1)
|
|
|
|
|
|
2015(1)
|
|
|
|
|
|
2014(1)
|
|
|
|
OPERATING DATA (in BBtu per day):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission pipeline throughput (excluding AVC)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm capacity reservation
|
|
|
|
1,596
|
|
|
|
1,646
|
|
|
|
|
|
1,706
|
|
|
|
|
|
1,255
|
|
|
|
Volumetric based services(2)
|
|
|
|
384
|
|
|
|
238
|
|
|
|
|
|
280
|
|
|
|
|
|
371
|
|
|
|
Total transmission pipeline throughput (excluding AVC)
|
|
|
|
1,980
|
|
|
|
1,884
|
|
|
|
|
|
1,986
|
|
|
|
|
|
1,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average contracted firm transmission reservation commitments
(excluding AVC)
|
|
|
|
2,453
|
|
|
|
2,341
|
|
|
|
|
|
2,363
|
|
|
|
|
|
1,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVC transmission pipeline throughput
|
|
|
|
137
|
|
|
|
189
|
|
|
|
|
|
136
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathered volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm reservation
|
|
|
|
1,281
|
|
|
|
300
|
|
|
|
|
|
1,115
|
|
|
|
|
|
180
|
|
|
|
Volumetric based services(2)
|
|
|
|
340
|
|
|
|
1,061
|
|
|
|
|
|
391
|
|
|
|
|
|
973
|
|
|
|
Total gathered volumes
|
|
|
|
1,621
|
|
|
|
1,361
|
|
|
|
|
|
1,506
|
|
|
|
|
|
1,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURES (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expansion capital expenditures(3)
|
|
|
$
|
86,976
|
|
|
$
|
112,445
|
|
|
|
|
$
|
344,908
|
|
|
|
|
$
|
329,206
|
|
|
|
Maintenance capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ongoing maintenance(4)
|
|
|
|
11,356
|
|
|
|
5,120
|
|
|
|
|
|
27,928
|
|
|
|
|
|
16,493
|
|
|
|
Funded regulatory compliance
|
|
|
|
928
|
|
|
|
1,654
|
|
|
|
|
|
3,379
|
|
|
|
|
|
7,603
|
|
|
|
Total maintenance capital expenditures
|
|
|
|
12,284
|
|
|
|
6,774
|
|
|
|
|
|
31,307
|
|
|
|
|
|
24,096
|
|
|
|
Total capital expenditures
|
|
|
$
|
99,260
|
|
|
$
|
119,219
|
|
|
|
|
$
|
376,215
|
|
|
|
|
$
|
353,302
|
|
|
|
|
|
|
|
(1)
|
|
The twelve months ended December 31, 2015 and the three months ended
December 31, 2014 have been recast to include historical results of
NWV Gathering. The twelve months ended December 31, 2014 have been
recast to include historical results of NWV Gathering and Jupiter.
|
|
(2)
|
|
Includes volumes transported or gathered under interruptible
contracts and volumes in excess of firm contracted capacity.
|
|
(3)
|
|
Does not include capital contributions made to MVP.
|
|
(4)
|
|
Approximately $7.5 million of the 2015 ongoing maintenance capital
expenditures are expected to be reimbursed by EQT.
|
|
|
|
|
|
|
|
|
|
|
|
EQT GP Holdings, LP
|
|
Statements of Consolidated Operations
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
(in thousands, except per unit amounts)
|
|
|
|
2015
|
|
|
|
2014(1)
|
|
|
|
2015(1)
|
|
|
|
2014(1)
|
|
Operating revenues(2)
|
|
|
$
|
165,921
|
|
|
$
|
138,390
|
|
|
|
$
|
614,134
|
|
|
|
$
|
476,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and maintenance
|
|
|
|
18,094
|
|
|
|
15,074
|
|
|
|
|
68,261
|
|
|
|
|
55,276
|
|
|
Selling, general and administrative
|
|
|
|
13,524
|
|
|
|
10,411
|
|
|
|
|
58,481
|
|
|
|
|
48,505
|
|
|
Depreciation and amortization
|
|
|
|
14,238
|
|
|
|
13,076
|
|
|
|
|
51,640
|
|
|
|
|
46,054
|
|
|
Total operating expenses
|
|
|
|
45,856
|
|
|
|
38,561
|
|
|
|
|
178,382
|
|
|
|
|
149,835
|
|
|
Operating income
|
|
|
|
120,065
|
|
|
|
99,829
|
|
|
|
|
435,752
|
|
|
|
|
326,712
|
|
|
Equity income
|
|
|
|
1,220
|
|
|
|
–
|
|
|
|
|
2,367
|
|
|
|
|
–
|
|
|
Other income
|
|
|
|
2,040
|
|
|
|
715
|
|
|
|
|
5,639
|
|
|
|
|
2,349
|
|
|
Interest expense
|
|
|
|
11,301
|
|
|
|
9,912
|
|
|
|
|
45,664
|
|
|
|
|
30,856
|
|
|
Income before income taxes
|
|
|
|
112,024
|
|
|
|
90,632
|
|
|
|
|
398,094
|
|
|
|
|
298,205
|
|
|
Income tax expense
|
|
|
|
–
|
|
|
|
23,165
|
|
|
|
|
25,770
|
|
|
|
|
70,619
|
|
|
Net income
|
|
|
$
|
112,024
|
|
|
$
|
67,467
|
|
|
|
$
|
372,324
|
|
|
|
$
|
227,586
|
|
|
Net income attributable to noncontrolling interests
|
|
|
|
66,823
|
|
|
|
44,201
|
|
|
|
|
226,397
|
|
|
|
|
124,025
|
|
|
Net income attributable to EQT GP Holdings, LP
|
|
|
$
|
45,201
|
|
|
$
|
23,266
|
|
|
|
$
|
145,927
|
|
|
|
$
|
103,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of limited partners' interest in net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to EQT GP Holdings, LP
|
|
|
$
|
45,201
|
|
|
|
N/A
|
|
|
|
$
|
145,927
|
|
|
|
|
N/A
|
|
|
Less: results attributable to the pre-IPO period
|
|
|
|
–
|
|
|
|
N/A
|
|
|
|
|
(42,238
|
)
|
|
|
|
N/A
|
|
|
Limited partners' interest in net income
|
|
|
$
|
45,201
|
|
|
|
|
|
|
$
|
103,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per limited partner unit – basic and diluted
|
|
|
$
|
0.17
|
|
|
|
N/A
|
|
|
|
$
|
0.39
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average limited partner units outstanding – basic and
diluted
|
|
|
|
266,168
|
|
|
|
N/A
|
|
|
|
|
266,168
|
|
|
|
|
N/A
|
|
|
|
|
|
|
(1)
|
|
The twelve months ended December 31, 2015 and the three and twelve
months ended December 31, 2014 have been recast to include
historical results of NWV Gathering.
|
|
(2)
|
|
Operating revenues included affiliate revenues of $121.7 million and
$94.6 million for the three months ended December 31, 2015 and 2014,
respectively. Operating revenues included affiliate revenues of
$447.6 million and $328.5 million for the twelve months ended
December 31, 2015 and 2014, respectively.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160204005340/en/ Copyright Business Wire 2016
Source: Business Wire
(February 4, 2016 - 6:33 AM EST)
News by QuoteMedia
www.quotemedia.com
|
