EQM is a growth-oriented Delaware limited partnership. EQM Midstream Services, LLC (formerly known as EQT Midstream Services, LLCLLC) (EQM General Partner), is a direct wholly owned subsidiary of EQGP Holdings, LP (formerly known as EQT GP Holdings, LPLP) (EQGP), and is the general partner of EQM.

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring adjustments, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of EQM as of September 30, 20172018 and December 31, 2016,2017, the results of its operations for the three and nine months ended September 30, 20172018 and 20162017, and its cash flows and equity for the nine months ended September 30, 20172018 and 2016.2017. Certain previously reported amounts have been reclassified to conform to the current year presentation. The balance sheet at December 31, 20162017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Due to the seasonal nature of EQM’sEQM's utility customer contracts, the interim statements for the three and nine months ended September 30, 20172018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

For further information, refer to the consolidated financial statements and related footnotes thereto included in EQM’s Annual Report on Form 10-K for the year ended December 31, 2016 as well as “Management's2017 and "Management's Discussion and Analysis of Financial Condition and Results of Operations” contained therein.

The following table summarizes EQM's limited partner common units and general partner units issued from January 1, 20162018 through December 31, 2016. EQM did not issue any units during the nine months ended September 30, 2018. There were no issuances in 2017.

As of September 30, 2017,2018, EQGP and its subsidiaries owned 21,811,643 EQM common units, representing a 26.6%17.9% limited partner interest, 1,443,015 EQM general partner units, representing a 1.8%1.2% general partner interest, and all of the IDRs in EQM. As of September 30, 2017,2018, EQT owned 15,433,812 EQM common units, representing a 12.7% limited partner interest in EQM, 100% of the non-economic general partner interest in EQGP and a 90.1%91.3% limited partner interest in EQGP.

In the ordinary course of business, EQM engages in transactions with EQT and its affiliates including, but not limited to, gas gathering agreements, transportation service and precedent agreements, storage agreements and gas gatheringwater services agreements. Pursuant to thean omnibus agreement (the EQM Omnibus Agreement), EQT performs centralized corporate, general and administrative services for EQM. In exchange, EQM reimburses EQT for the expenses incurred by EQT in providing these services, including directservices. The EQM Omnibus Agreement also provides for certain indemnification obligations between EQM and indirect costs and expenses attributable to EQT's long-term incentive programs.EQT. Pursuant to an operation and management servicesa secondment agreement, EQT Gathering, LLC (EQT Gathering), an indirect wholly owned subsidiaryemployees of EQT provides EQM’s pipelines and storage facilitiesits affiliates may be seconded to EQM to provide operating and other services with certain operationalrespect to EQM's business under the direction, supervision and management services.control of EQM. EQM reimburses EQT Gatheringand its affiliates for suchthe services pursuant toprovided by the terms of the omnibus agreement.seconded employees. The expenses for which EQM reimburses EQT and its subsidiariesaffiliates may not necessarily reflect the actual expenses that EQM would incur on a stand-alone basis andbasis. EQM is unable to estimate what those expenses would be on a stand-alone basis.

In August 2017,September 2018, the MVP Joint Venture issued a capital call notice to MVP Holdco, LLC (MVP Holdco), a direct wholly owned subsidiary of EQM, for $48.0$456.0 million, of which $27.2$175.2 million was paid inas of October 20172018, and the remaining $20.8$280.8 million is expected to be paid in November 2017.the fourth quarter of 2018. In addition, in September 2018, the MVP Joint Venture issued a capital call notice to MVP Holdco for $7.7 million for funding of the MVP Southgate project that is expected to be paid in the fourth quarter of 2018. The capital contribution payable haspayables have been reflected on the consolidated balance sheet as of September 30, 20172018 with a corresponding increaseincreases to EQM's investment in the MVP Joint Venture.

As of September 30, 2017,2018, EQM had issued a $91 million performance guarantee in favor of the MVP Joint Venture to provideVenture. The guarantee provides performance assurances forof MVP Holdco's obligations to fund its proportionate share of the MVP construction budget for the MVP. Upon the FERC’s initial release to begin construction of the MVP, EQM's guarantee will terminate. EQM will then be obligated to issue a new guarantee in an amount equal to 33% of MVP Holdco’s proportionate share of the then remaining construction budget, less, subject to certain limits, any credit assurances issued by any affiliate of EQM under such affiliate's precedent agreement with the MVP Joint Venture.

The following tables summarize the unaudited condensed financial statements for the investment in unconsolidated entity accounted for under the equity method of accounting.

As of September 30, 2017,2018, EQM was in compliance with all debt provisions and covenants.

Disclosures in this Quarterly Report on Form 10-Q 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 and usually identified by the use of words such as “anticipate,” “estimate,” “could,” “would,” “will,” “may,” “forecast,” “approximate,” “expect,” “project,” “intend,” “plan,” “believe”"anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section captioned “Outlook”"Outlook" in “Management’s"Management's Discussion and Analysis of Financial Condition and Results of Operations,”" and the expectations of plans, strategies, objectives, and growth and anticipated financial and operational performance of EQM and its subsidiaries, including guidance regarding EQM’sEQM's gathering, and transmission and storage and water revenue and volume growth; the weighted average contract life of gathering, transmission and storage contracts; infrastructure programs (including the timing, cost, capacity and sources of funding with respect to gathering, transmission and transmissionwater expansion projects); the cost, capacity, timing of regulatory approvals and anticipated in-service date of the MVP project;and MVP Southgate projects; the ultimate terms, partners and structure of the MVP Joint Venture; expansion projects in EQM's operating areas of operations and in areas that would provide access to new markets; asset acquisitions, including EQM’sEQM's ability to complete asset acquisitions from EQT or third parties;acquisitions; the expected benefits to EQMgrowth of production volumes in EQM's areas of production; the impact and outcome of pending and future litigation; the timing of the proposed separation of EQT's proposed acquisition of Rice Energy Inc. (Rice), including whether EQT willproduction and midstream businesses (the Separation) and the parties' ability to complete the proposed acquisition and, if so, whether it will sell Rice's remaining midstream assets to EQM;Separation; the amount and timing of distributions, including expected increases; the structure and timing of any simplification of the midstream structure to address the IDRs, if pursued and implemented; the amounts and timing of projected capital contributions and operating and capital expenditures, including the amount of capital expenditures reimbursable by EQT; the impact of commodity prices on EQM's business; liquidity and financing requirements, including sources and availability;availability and EQM's plan to increase its borrowing capacity up to $3 billion; the effects of government regulation and litigation;regulation; and tax position. The forward-looking statements included in this Quarterly Report on Form 10-Q 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 has based these forward-looking statements on current expectations and assumptions about future events. While EQM considers 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 are beyond EQM’sEQM's control. The risks and uncertainties that may affect the operations, performance and results of EQM’sEQM's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors”"Risk Factors" in EQM’sEQM's Annual Report on Form 10-K for the year ended December 31, 2016.

Any forward-looking statement speaks only as of the date on which such statement is made and EQM does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

In reviewing any agreements incorporated by reference in or filed with this Quarterly Report on Form 10-Q, please remember that such agreements are included to provide information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about EQM. The agreements may contain representations and warranties by EQM, which should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements should those statements prove to be inaccurate. The representations and warranties were made only as of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments. Accordingly, these representations and warranties alone may not describe the actual state of affairs of EQM or its affiliates as of the date they were made or at any other time.

For the three months ended September 30, 2017, EQM reported2018, net income of $142.9attributable to EQM was $209.9 million compared to $133.7$142.9 million for the three months ended September 30, 2016.2017. The increase resulted primarily resulted from higher revenues from both gathering and transmission,water revenues, which were driven mainly by affiliatethe EQM-RMP Merger and third partythe May 2018 Acquisition, which support production development in the Marcellus Shale, and lowerUtica Shales, and higher equity income, taxes, partly offset by an increase inhigher operating expenses and higher net interest expense and lower other income.expense.

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. Other income and net interest expense are managed on a consolidated basis. EQM has presented each segment's operating income and various operational measures in the following sections. Management believes that the presentation of this information provides useful information to management and investors regarding the financial condition, results of operations and trends of segments. EQM has reconciled each segment’ssegment's operating income to EQM’sEQM's consolidated operating income and net income in Note DE to the consolidated financial statements.