UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018
2023
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER001-38629
EQUITRANS MIDSTREAM CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIAPennsylvania83-0516635
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)

2200 Energy Drive, Canonsburg, Pennsylvania     15317
(Address of principal executive offices)     (Zip code)
(724) 271-7600
625 Liberty Avenue, Suite 2000, Pittsburgh, Pennsylvania15222
(Address of principal executive offices)(Zip code)
(724) 271-7200
(Registrant's telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, no par valueETRNNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨☒  No  x☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x☒  No  ¨☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer¨
☒
Accelerated Filer                 ¨
☐
Emerging Growth Company¨☐
Non-Accelerated Filerx
☐
Smaller Reporting Company¨
☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        Yes  ¨☐  No  x☒

AsThe number of November 30, 2018, 254,269 shares of common stock outstanding (in thousands), no par value,as of the registrant were outstanding.October 30, 2023: 433,261



EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
Explanatory Note
Equitrans Midstream Corporation (Equitrans Midstream or the Company) was formed on May 11, 2018 as a wholly-owned subsidiary of EQT Corporation (EQT) (NYSE: EQT) to hold the assets, liabilities and results of operations of EQT's Midstream Business (defined herein). On February 21, 2018, EQT announced plans to separate its Midstream Business, which is composed of the separately-operated natural gas gathering, transmission and storage and water services of EQT (collectively, the Midstream Business), from its Upstream Business, which is composed of the natural gas, oil and natural gas liquids development, production and sales and commercial operations of EQT (collectively, the Upstream Business) (the Separation).
On November 12, 2018, the Separation was effected through a series of transactions that culminated in EQT's contribution of the Midstream Business to the Company and the distribution of 80.1% of the shares in Equitrans Midstream to existing EQT shareholders (the Distribution). EQT retained the remaining 19.9% of the shares in Equitrans Midstream (the Retained Interest).
These condensed combined consolidated financial statements and related notes include the assets, liabilities and results of operations of the Midstream Business and represent the predecessor for accounting purposes of Equitrans Midstream (the Predecessor) for each of the periods presented.

2


EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
Index
Page No.
43
Item 1.
5
6
7
8
910
Item 2.
2620
Item 3.
37
Item 4.
3839
Item 1.
40
Item 1.1A.
3944
Item 1A.2.
4244
Item 5.
44
Item 6.
4345
4647

2
3

Table of Contents






EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
Glossary of Commonly Used Terms, Abbreviations and Measurements
2021 Water Services Agreement – that certain mixed-use water services agreement entered into on October 22, 2021 by the Company and EQT (as defined below), as subsequently amended, which became effective on March 1, 2022.
Allowance for Funds Used During Construction (AFUDC) – carrying costs for the construction of certain long-lived regulated assets are capitalized and amortized over the related assets' estimated useful lives. The capitalized amount for construction of regulated assets includes interest cost and a designated cost of equity for financing the construction of these regulated assets.
Amended EQM Credit Facility – that certain Third Amended and Restated Credit Agreement, dated as of October 31, 2018, among EQM, as borrower, Wells Fargo Bank, National Association, as the administrative agent, swing line lender, and a letter of credit (L/C) issuer, the lenders party thereto from time to time and any other persons party thereto from time to time (as amended by that certain First Amendment to Third Amended and Restated Credit Agreement, dated as of March 30, 2020, by that certain Second Amendment to Third Amended and Restated Credit Agreement, dated April 16, 2021, by that certain Third Amendment to the Third Amended and Restated Credit Agreement, dated as of April 22, 2022, by that certain Fourth Amendment to Third Amended Restated Credit Agreement, dated as of October 6, 2023, and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time). For the avoidance of doubt, any reference to the Amended EQM Credit Facility as of any particular date shall mean the Amended EQM Credit Facility as in effect on such date.
Annual Revenue Commitments (ARC or ARCs) – contractual term in a water services agreement that obligates the customer to pay for a fixed amount of water services annually.
Appalachian Basin – the area of the United States composed of those portions of West Virginia, Pennsylvania, Ohio, Maryland, Kentucky and Virginia that lie in the Appalachian Mountains.
British thermal unit – a measure of the amount of energy required to raise the temperature of one pound of water one-degree Fahrenheit.
EQGPdelivery point– EQGP Holdings, LP (formerly known as EQT GP Holdings, LP) (NYSE: EQGP) and its subsidiaries. the point where gas is delivered into a downstream gathering system or transmission pipeline.
EQM – EQM Midstream Partners, LP (formerly known as EQT Midstream Partners, LP) (NYSE: EQM) and its subsidiaries. EQM is a wholly owned subsidiary of Equitrans Midstream Corporation.
EQT – EQT Corporation (NYSE: EQT) and its subsidiaries.
EQT Global GGA – that certain Gas Gathering and Compression Agreement entered into on February 26, 2020 (the EQT Global GGA Effective Date) by the Company with EQT and certain affiliates of EQT for the provision of certain gas gathering services to EQT in the Marcellus and Utica Shales of Pennsylvania and West Virginia, as subsequently amended.
Equitrans Midstream Preferred Shares –    the Equitrans Midstream Corporation Series A Perpetual Convertible Preferred Shares, no par value.
firm contracts – contracts for gathering, transmission, storage and water services that reserve an agreed upon amount of pipeline or storage capacity regardless of the capacity used by the customer during each month, and generally obligate the customer to pay a fixed, monthly charge.
firm reservation fee revenues –contractually obligated revenues that include fixed monthly charges under firm contracts and fixed volumetric charges under MVC (as defined below) and ARC (as defined above) contracts.
gas – natural gas.
liquefied natural gas (LNG) – natural gas that has been cooled to minus 161 degrees Celsius for transportation, typically by ship. The cooling process reduces the volume of natural gas by 600 times.
Minimum volume commitments (MVC or MVCs) – contracts for gathering or water services that obligate the customer to pay for a fixed amount of volumes daily, monthly, annually or over the life of the contract.
3
Table of Contents


Mountain Valley Pipeline (MVP) – an estimated 300-mile, 42-inch diameter natural gas interstate pipeline with a targeted capacity of 2.0 Bcf per day that is designed to span from the Company's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, providing access to the growing Southeast demand markets.
Mountain Valley Pipeline, LLC (MVP Joint Venture) – a joint venture formed among the Company and, as applicable, affiliates of each of NextEra Energy, Inc., Consolidated Edison, Inc. (Con Edison), AltaGas Ltd. and RGC Resources, Inc. (RGC) for purposes of the MVP and the MVP Southgate (as defined below) projects.
MVP Southgate – a contemplated interstate pipeline that was approved by the FERC to extend approximately 75 miles from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. The MVP Joint Venture is continuing to engage with the project shipper, Dominion Energy North Carolina, and a prospective customer regarding the project as discussed in "MVP Southgate Project" in "Outlook" in Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q.
natural gas liquids (NGLs) – those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing plants. Natural gas liquids include ethane, propane, pentane, butane and iso-butane.
Preferred Interest – the preferred interest that EQMthe Company has in EQT Energy Supply, LLC (EES)., a subsidiary of EQT.
RMP Rager Mountain natural gas storage field incident – RM Partners LP (formerly known as Rice Midstream Partners LP) and its subsidiaries.that certain venting of natural gas, of which the Company first became aware on November 6, 2022, at a storage well (well 2244) at Equitrans, L.P.'s Rager Mountain natural gas storage facility, located in Jackson Township, a remote section of Cambria County, Pennsylvania.
throughput – the volume of natural gas transported or passing through a pipeline, plant, terminal or other facility during a particular period.
wellhead– the equipment at the surface of a well used to control the well's pressure and the point at which the hydrocarbons and water exit the ground. 
Unless the context otherwise requires, a reference to a “Note” herein refers to the accompanying Notes to Consolidated Financial Statements contained in Part I, "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q and all references to "we," "us," "our" and "the Company" refer to Equitrans Midstream Corporation and its subsidiaries.
AbbreviationsMeasurements
AROASC – asset retirement obligationsAccounting Standards Codification
Btu = one British thermal unit
ASU – Accounting Standards Update
BBtu = billion British thermal units
EPA– United States Environmental Protection Agency
Bcf   = billion cubic feet
FASB –Financial Accounting Standards Board
BcfMcf = billionthousand cubic feet
FERC – United States Federal Energy Regulatory Commission
Dth MMBtu =  dekatherm or million British thermal units
GAAP – United States Generally Accepted Accounting Principles
Mcf = thousand cubic feet
IDRs – incentive distribution rights
MMBtu  = million British thermal units
IPO – Initial Public Offering
MMcf  = million cubic feet
IRS – United States Internal Revenue Service
MMgal  = million gallons
NGA – Natural Gas Act of 1938, as amended
NYMEX – New York Mercantile Exchange
NYSE – New York Stock Exchange
PHMSA – Pipeline and Hazardous Materials Safety Administration of the United States Department of Transportation
SEC – United States Securities and Exchange Commission


4

Table of Contents





PART I.  FINANCIAL INFORMATION
Item 1. Financial Statements

EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
STATEMENTS OF CONDENSED COMBINED CONSOLIDATED OPERATIONSStatements of Consolidated Comprehensive Income (Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2023
2022 (a)
2023
2022 (a)
 (Thousands, except per share amounts)
Operating revenues$338,514 $331,751 $1,033,320 $1,002,508 
Operating expenses:  
Operating and maintenance43,046 35,297 131,675 100,820 
Selling, general and administrative55,627 33,348 145,181 92,074 
Depreciation69,348 68,572 208,783 203,272 
Amortization of intangible assets16,204 16,204 48,614 48,614 
Total operating expenses184,225 153,421 534,253 444,780 
Operating income154,289 178,330 499,067 557,728 
Equity income (b)
73,810 48 97,618 91 
Impairment of equity method investment— (583,057)— (583,057)
Other (expense) income, net(3,037)2,465 8,670 8,124 
Loss on extinguishment of debt— — — (24,937)
Net interest expense(106,334)(101,085)(314,935)(289,323)
Income (loss) before income taxes118,728 (503,299)290,420 (331,374)
Income tax (benefit) expense(10,976)(366)(14,295)7,927 
Net income (loss)129,704 (502,933)304,715 (339,301)
Net income attributable to noncontrolling interest2,272 2,932 8,356 10,655 
Net income (loss) attributable to Equitrans Midstream127,432 (505,865)296,359 (349,956)
Preferred dividends14,628 14,628 43,884 43,884 
Net income (loss) attributable to Equitrans Midstream common shareholders$112,804 $(520,493)$252,475 $(393,840)
Earnings (loss) per share of common stock attributable to Equitrans Midstream common shareholders - basic$0.26 $(1.20)$0.58 $(0.91)
Earnings (loss) per share of common stock attributable to Equitrans Midstream common shareholders - diluted$0.26 $(1.20)$0.58 $(0.91)
Weighted average common shares outstanding - basic434,080 433,348 433,917 433,333 
Weighted average common shares outstanding - diluted439,034 433,348 435,658 433,333 
Statement of comprehensive income (loss):
Net income (loss)$129,704 $(502,933)$304,715 $(339,301)
Other comprehensive income, net of tax:
Pension and other post-retirement benefits liability adjustment, net of tax expense of $7, $10, $21 and $3422 36 66 104 
Other comprehensive income22 36 66 104 
Comprehensive income (loss)129,726 (502,897)304,781 (339,197)
Less: Comprehensive income attributable to noncontrolling interest2,272 2,932 8,356 10,655 
Less: Comprehensive income attributable to preferred dividends14,628 14,628 43,884 43,884 
Comprehensive income (loss) attributable to Equitrans Midstream common shareholders$112,826 $(520,457)$252,541 $(393,736)
Dividends declared per common share$0.15 $0.15 $0.45 $0.45 
(Unaudited)(a)Certain line items of the previously issued unaudited interim consolidated financial statements for the three and nine months ended September 30, 2022 have been revised. See Note 1 for more information.
(b)Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note 4.
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Operating revenues (a)
$364,584
 $206,293
 $1,110,307
 $603,180
Operating expenses:     
  
Operating and maintenance (b)
48,092
 19,589
 118,534
 54,721
Selling, general and administrative (b)
27,380
 19,302
 82,853
 54,316
Transaction costs (b)
16,681
 3,876
 47,995
 5,396
Depreciation43,722
 22,244
 127,235
 64,191
Amortization of intangible assets10,387
 —
 31,160
 —
Total operating expenses146,262
 65,011
 407,777
 178,624
Operating income218,322
 141,282
 702,530
 424,556
Equity income (c)
16,087
 6,025
 35,836
 15,413
Other income1,345
 637
 3,193
 3,576
Net interest expense (d)
36,862
 10,210
 68,848
 24,870
Income before income taxes198,892
 137,734
 672,711
 418,675
Income tax expense12,926
 22,283
 43,394
 68,357
Net income185,966
 115,451
 629,317
 350,318
Less: Net income attributable to noncontrolling interests103,141
 82,117
 362,696
 250,349
Net income attributable to Equitrans Midstream$82,825
 $33,334
 $266,621
 $99,969

(a)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, and $827.8 million and $445.8 million for the nine months ended September 30, 2018 and 2017, respectively. See Note 5.
(b)Operating and maintenance expense included charges from EQT of $14.0 million and $10.7 million for the three months ended September 30, 2018 and 2017, respectively, and $38.4 million and $29.8 million for the nine months ended September 30, 2018 and 2017, respectively. Selling, general and administrative expense included charges from EQT of $26.2 million and $18.6 million for the three months ended September 30, 2018 and 2017, respectively, and $76.9 million and $52.0 million for the nine months ended September 30, 2018 and 2017, respectively. See Note 5. Transaction costs represent selling, general and administrative expenses related to the Rice Merger, the EQM-RMP Mergers, the Drop-Down Transaction (each defined in Note 1) and the Separation and included charges allocated to Equitrans Midstream from EQT of $11.0 million and $3.9 million for the three months ended September 30, 2018 and 2017, respectively, and $34.6 million and $5.4 million for the nine months ended September 30, 2018 and 2017, respectively. See Notes 1 and 5.
(c)Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note 6.
(d)Net interest expense included interest income on the Preferred Interest of $1.6 million and $1.7 million for the three months ended September 30, 2018 and 2017, respectively, and $5.0 million and $5.1 million for the nine months ended September 30, 2018 and 2017, respectively.


The accompanying notes are an integral part of these condensed combined consolidated financial statements.

5

Table of Contents





EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
STATEMENTS OF CONDENSED COMBINED CONSOLIDATED CASH FLOWSStatements of Consolidated Cash Flows (Unaudited)
(Unaudited)
 Nine Months Ended September 30,
 2023
2022 (a)
 (Thousands)
Cash flows from operating activities:  
Net income (loss)$304,715 $(339,301)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation208,783 203,272 
Amortization of intangible assets48,614 48,614 
Provision for credit losses on accounts receivable and contract asset write-down10,234 — 
Deferred income tax (benefit) expense(20,832)7,392 
Impairment of equity method investment— 583,057 
Equity income (b)
(97,618)(91)
Other income, net(8,169)(8,391)
Loss on extinguishment of debt— 24,937 
Non-cash long-term compensation expense33,423 12,142 
Changes in other assets and liabilities:
Accounts receivable37,050 34,921 
Accounts payable(7,932)2,255 
Accrued interest(44,310)(57,375)
Deferred revenue240,414 261,013 
Other assets and other liabilities20,488 (25,906)
Net cash provided by operating activities724,860 746,539 
Cash flows from investing activities:  
Capital expenditures(279,463)(276,828)
Capital contributions to the MVP Joint Venture(280,471)(158,178)
Proceeds from sale of gathering assets— 3,719 
Principal payments received on the Preferred Interest4,347 4,110 
Net cash used in investing activities(555,587)(427,177)
Cash flows from financing activities:  
Proceeds from revolving credit facility borrowings627,000 284,500 
Payments on revolving credit facility borrowings(322,000)(394,500)
Proceeds from the issuance of long-term debt— 1,000,000 
Debt discounts, debt issuance costs and credit facility arrangement fees(60)(19,880)
Payment for retirement of long-term debt(98,941)(1,021,459)
Dividends paid to holders of Equitrans Midstream Preferred Shares(43,884)(43,884)
Dividends paid to common shareholders(194,930)(194,733)
Distributions paid to noncontrolling interest(22,440)(16,000)
Other items(1,307)— 
Net cash used in financing activities(56,562)(405,956)
Net change in cash and cash equivalents112,711 (86,594)
Cash and cash equivalents at beginning of period67,898 134,661 
Cash and cash equivalents at end of period$180,609 $48,067 
Cash paid during the period for:  
Interest, net of amount capitalized$354,962 $339,285 
Income taxes, net$4,505 $1,243 
 Nine Months Ended September 30,
 2018 2017
 (Thousands)
Cash flows from operating activities: 
  
Net income$629,317
 $350,318
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation127,235
 64,191
Amortization of intangible assets31,160
 —
Deferred income taxes(164,333) 12,245
Equity income(35,836) (15,413)
AFUDC — equity(3,585) (4,128)
Non-cash long-term compensation expense1,293
 451
Changes in other assets and liabilities:   
Accounts receivable2,193
 (1,106)
Accounts payable27,623
 1,848
Due to/from affiliates63,798
 68,484
Other assets and other liabilities22,528
 3,620
Net cash provided by operating activities701,393
 480,510
Cash flows from investing activities: 
  
Capital expenditures(624,359) (224,591)
Capital contributions to the MVP Joint Venture(446,049) (103,448)
Principal payments received on the Preferred Interest3,281
 3,103
Net cash used in investing activities(1,067,127) (324,936)
Cash flows from financing activities: 
  
Proceeds from credit facility borrowings2,524,000
 334,000
Payments on credit facility borrowings(2,968,000) (229,000)
Proceeds from the issuance of EQM's long-term debt2,500,000
 —
Net proceeds from (payments on) EQGP's Working Capital Facility loan32
 (55)
Net distributions to EQT(1,138,412) (846,535)
Distributions paid to noncontrolling interest unitholders(279,539) (172,498)
Acquisition of 25% of Strike Force Midstream LLC(175,000) —
Debt discount and debt issuance costs(34,249) (2,257)
Net cash provided by (used in) financing activities428,832
 (916,345)
    
Net change in cash and cash equivalents63,098
 (760,771)
Cash and cash equivalents at beginning of period121,004
 966,270
Cash and cash equivalents at end of period$184,102
 $205,499
    
Cash paid during the period for: 
  
Interest, net of amount capitalized$42,655
 $31,093
    
Non-cash activity during the period for:
 
  
Settlement of transaction costs with EQT$87,982
 $—
Net settlement of current income taxes payable with EQT$54,033
 $115,819
(a)Certain line items of the previously issued unaudited interim consolidated financial statements for the nine months ended September 30, 2022 have been revised. See Note 1 for more information.
(b)Represents equity income from the MVP Joint Venture. See Note 4.
The accompanying notes are an integral part of these condensed combined consolidated financial statements.

6

Table of Contents





EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
CONDENSEDCOMBINED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 September 30, 2018 December 31, 2017
 (Thousands)
ASSETS 
Current assets: 
  
Cash and cash equivalents$184,102
 $121,004
Accounts receivable (net of allowance for doubtful accounts of $717 and $446 as of September 30, 2018 and December 31, 2017, respectively)58,358
 60,551
Accounts receivable — affiliate167,481
 158,720
Other current assets10,318
 14,565
Total current assets420,259
 354,840
    
Property, plant and equipment6,138,895
 5,516,527
Less: accumulated depreciation(518,718) (405,665)
Net property, plant and equipment5,620,177
 5,110,862
    
Investment in unconsolidated entity1,300,430
 460,546
Goodwill1,384,872
 1,384,872
Net intangible assets586,500
 617,660
Deferred income taxes473,475
 257,128
Other assets157,071
 142,888
Total assets$9,942,784
 $8,328,796
    
LIABILITIES AND EQUITY 
  
Current liabilities: 
  
Accounts payable$133,569
 $105,364
Due to affiliate293,636
 363,058
Capital contribution payable to the MVP Joint Venture463,733
 105,734
Accrued interest46,165
 11,067
Accrued liabilities21,149
 20,995
Total current liabilities958,252
 606,218
    
Credit facility borrowings22,000
 466,000
EQM senior notes3,455,296
 987,352
Regulatory and other long-term liabilities31,819
 30,462
Total liabilities4,467,367
 2,090,032
    
Equity: 
  
Parent net investment258,200
 1,143,769
Noncontrolling interests5,217,217
 5,094,995
Total equity5,475,417
 6,238,764
Total liabilities and equity$9,942,784
 $8,328,796
The accompanying notes are an integral part of these condensed combined consolidated financial statements.

7

Table of Contents



EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
STATEMENTS OF CONDENSED COMBINED CONSOLIDATED EQUITY
Consolidated Balance Sheets (Unaudited)
September 30, 2023December 31, 2022
(Thousands)
ASSETS
Current assets:  
Cash and cash equivalents$180,609 $67,898 
Accounts receivable (net of allowance for credit losses of $5,465 and $3,031 as of September 30, 2023 and December 31, 2022, respectively)240,006 246,887 
Other current assets67,210 74,917 
Total current assets487,825 389,702 
Property, plant and equipment9,633,507 9,365,051 
Less: accumulated depreciation(1,684,025)(1,480,720)
Net property, plant and equipment7,949,482 7,884,331 
Investments in unconsolidated entities (a)
1,290,996 819,743 
Goodwill486,698 486,698 
Net intangible assets538,338 586,952 
Other assets279,318 278,159 
Total assets$11,032,657 $10,445,585 
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY  
Current liabilities:  
Current portion of long-term debt$299,616 $98,830 
Accounts payable53,998 60,528 
Capital contributions payable to the MVP Joint Venture126,564 34,355 
Accrued interest91,452 135,762 
Accrued liabilities79,300 83,835 
Total current liabilities650,930 413,310 
Long-term liabilities:
   Revolving credit facility borrowings840,000 535,000 
   Long-term debt6,044,044 6,335,320 
   Contract liability1,211,919 968,535 
   Regulatory and other long-term liabilities131,370 112,974 
Total liabilities8,878,263 8,365,139 
Mezzanine equity:
Equitrans Midstream Preferred Shares, 30,018 shares issued and outstanding as of September 30, 2023 and December 31, 2022681,842 681,842 
Shareholders' equity:  
Common stock, no par value, 433,261 and 432,781 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively4,009,368 3,974,127 
Retained deficit(3,000,865)(3,053,590)
Accumulated other comprehensive loss(1,266)(1,332)
Total common shareholders' equity1,007,237 919,205 
Noncontrolling interest465,315 479,399 
Total shareholders' equity1,472,552 1,398,604 
Total liabilities, mezzanine equity and shareholders' equity$11,032,657 $10,445,585 
 Parent Net Noncontrolling  
 Investment Interests Total Equity
 (Thousands)
Balance at January 1, 2017$(66,300) $3,258,966
 $3,192,666
Net income99,969
 250,349
 350,318
Net distributions to EQT(730,716) —
 (730,716)
Equity-based compensation plans261
 190
 451
Distributions to noncontrolling interest unitholders ($2.675 and $0.578 per common unit for EQM and EQGP, respectively)—
 (172,498) (172,498)
Balance at September 30, 2017$(696,786) $3,337,007
 $2,640,221
      
Balance at January 1, 2018$1,143,769
 $5,094,995
 $6,238,764
Net income266,621
 362,696
 629,317
Net distributions to EQT(996,397) —
 (996,397)
Equity-based compensation plans340
 953
 1,293
Distributions to noncontrolling interest unitholders ($3.18, $0.808 and $0.5966 per common unit for EQM, EQGP and RMP, respectively)—
 (279,539) (279,539)
Purchase of Strike Force Midstream LLC noncontrolling interests1,818
 (176,818) (175,000)
Net changes in ownership of combined consolidated entities(157,951) 214,930
 56,979
Balance at September 30, 2018$258,200
 $5,217,217
 $5,475,417
(a)Represents investment in the MVP Joint Venture. See Note 4.

The accompanying notes are an integral part of these condensed combined consolidated financial statements.

7
8

Table of Contents





EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
NOTES TO CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
Statements of Consolidated Shareholders' Equity and Mezzanine Equity (Unaudited)
Mezzanine
Equity
AccumulatedEquitrans
Common StockOtherMidstream
 SharesNoRetainedComprehensiveNoncontrollingTotalPreferred
 Outstanding
Par Value (a)
Deficit (a)
LossInterest
Equity (a)
Shares
 (Thousands, except per share amounts)
Balance at January 1, 2022432,522 $3,955,918 $(2,464,573)$(2,054)$483,195 $1,972,486 $681,842 
Other comprehensive income (net of tax):
Net income— — 80,490 — 3,775 84,265 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12— — — 34 — 34 — 
Dividends on common shares ($0.15 per share)— — (65,584)— — (65,584)— 
Share-based compensation plans, net155 4,670 — — — 4,670 — 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at March 31, 2022432,677 $3,960,588 $(2,449,667)$(2,020)$486,970 $1,995,871 $681,842 
Other comprehensive income (net of tax):
Net income— — 46,163 — 3,948 50,111 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $12— — — 34 — 34 — 
Dividends on common shares ($0.15 per share)— — (64,991)— — (64,991)— 
Share-based compensation plans, net104 4,470 — — — 4,470 — 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at June 30, 2022432,781 $3,965,058 $(2,468,495)$(1,986)$490,918 $1,985,495 $681,842 
Other comprehensive income (net of tax):
Net (loss) income— — (520,493)— 2,932 (517,561)14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $10— — — 36 — 36 — 
Dividends on common shares ($0.15 per share)— — (65,681)— — (65,681)— 
Share-based compensation plans, net— 4,533 — — — 4,533 — 
Distributions paid to noncontrolling interest in Eureka Midstream Holdings, LLC— — — — (16,000)(16,000)— 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at September 30, 2022432,781 $3,969,591 $(3,054,669)$(1,950)$477,850 $1,390,822 $681,842 
1.Financial Statements
Organization. Equitrans Midstream was formed on May 11, 2018 as a wholly-owned subsidiary of EQT to hold the assets, liabilities and results of operations of EQT's Midstream Business. On February 21, 2018, EQT announced the Separation. On November 12, 2018, the Separation was effected through the Distribution. See Note 12 for further discussion
(a)Certain line items of the Separation and Distribution.
Post-Separation, the Company holds investments in the entities conducting the Midstream Business, including limited and general partner interests in EQGP, which owns limited and general partner interests and IDRs in EQM. EQGP is a subsidiary of Equitrans Gathering Holdings, LLC (formerly known as EQT Gathering Holdings, LLC) (Equitrans Gathering Holdings) that owns partnership interests in EQM. EQM owns, operates, acquires and develops midstream assets in the Appalachian Basin. EQM Midstream Services, LLC (formerly known as EQT Midstream Services, LLC) (the EQM General Partner) is a wholly-owned subsidiary of EQGP and is EQM's general partner. EQGP Services, LLC (formerly known as EQT GP Services, LLC) (the EQGP General Partner) is a wholly-owned subsidiary of Equitrans Gathering Holdings and is EQGP's general partner.
The Company's assets, liabilities and results of operations also include the legacy assets of Rice Midstream Holdings LLC (Rice Midstream Holdings). EQT obtained control of Rice Midstream Holdings on November 13, 2017 (the Rice Merger Date), when, pursuant to the agreement and plan of merger dated June 19, 2017 (as amended, the EQT-Rice Merger Agreement) by and among EQT, Rice Energy Inc. (Rice Energy) and a wholly-owned subsidiary of EQT (EQT Merger Sub), Rice Energy became a wholly-owned, indirect subsidiary of EQT, and EQT became the indirect parent of Rice Midstream Holdings (the Rice Merger). The operations of Rice Midstream Holdings were primarily conducted through RMP, Rice West Virginia Midstream LLC (now known as EQM West Virginia Midstream LLC) (EQM West Virginia), Rice Olympus Midstream LLC (now known as EQM Olympus Midstream LLC) (EQM Olympus) and Strike Force Midstream Holdings LLC (Strike Force Holdings). At the Rice Merger Date, Strike Force Holdings owned 75% of the outstanding limited liability company interests in Strike Force Midstream LLC (Strike Force Midstream), a Delaware limited liability company. Rice Midstream Holdings, through its wholly-owned, indirect subsidiary Rice Midstream GP Holdings LP (RMGP), owned Rice Midstream Management LLC (now known as EQM Midstream Management LLC), RMP's general partner (the RMP General Partner), as well as limited partner interests and all of the IDRs in RMP. Rice Midstream Holdings controlled the RMP General Partner and therefore consolidated the results of RMP. In 2018, EQM obtained control of the operating entities of Rice Midstream Holdings through the following transactions:
On April 25, 2018, EQM, RMP and certain of their affiliates entered into an agreement and plan of merger, pursuant to which EQM acquired RMP and the RMP General Partner (the EQM-RMP Mergers). The EQM-RMP Mergers closed on July 23, 2018.
On May 1, 2018, EQM acquired 25% of the outstanding limited liability company interests in Strike Force Midstream from Gulfport Midstream Holdings, LLC (Gulfport Midstream), an affiliate of Gulfport Energy Corporation, in exchange for a cash contribution of $175 million (the Gulfport Transaction).
On May 22, 2018, EQM, through its wholly-owned subsidiary EQM Gathering Holdings, LLC, a Delaware limited liability company (EQM Gathering), acquired all the outstanding limited liability company interests in each of EQM West Virginia, EQM Olympus and Strike Force Holdings (collectively the Drop-Down Entities), pursuant to the terms of a contribution and sale agreement dated as of April 25, 2018 by and among EQM, EQM Gathering, EQT and Rice Midstream Holdings, in exchange for an aggregate of 5,889,282 EQM common units and a cash consideration of $1.15 billion, plus working capital adjustments (the Drop-Down Transaction). As a result of the closing of the Drop-Down Transaction, effective May 1, 2018, the Drop-Down Entities and Strike Force Midstream are wholly-owned subsidiaries of EQM Gathering.
Basis of Presentation. These condensed combinedpreviously issued unaudited interim consolidated financial statements (financial statements)for the three and related notes include the assets, liabilities and results of operations of the Midstream Business and represent the Predecessornine months ended September 30, 2022 have been revised. See Note 1 for accounting purposes of Equitrans Midstream for each of the periods presented. The Predecessor includes the Midstream Business and is composed of the interests in the following: (i) Equitrans Gathering Holdings, except for its interests in EQT's Upstream Business that were distributed to and retained by EQT prior to the Separation; combined with (ii) Rice Midstream Holdings as of and from the Rice Merger Date.more information.


9
8

Table of Contents





Mezzanine
Equity
AccumulatedEquitrans
Common StockOtherMidstream
SharesNoRetainedComprehensiveNoncontrollingTotalPreferred
OutstandingPar ValueDeficitLossInterestEquityShares
(Thousands, except per share amounts)
Balance at January 1, 2023432,781 $3,974,127 $(3,053,590)$(1,332)$479,399 $1,398,604 $681,842 
Other comprehensive income (net of tax):
Net income— — 87,054 — 4,409 91,463 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $7— — — 22 — 22 — 
Dividends on common shares ($0.15 per share)— — (65,121)— — (65,121)— 
Share-based compensation plans, net402 3,050 — — — 3,050 — 
Distributions paid to noncontrolling interest in Eureka Midstream Holdings, LLC— — — — (8,000)(8,000)— 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at March 31, 2023433,183 $3,977,177 $(3,031,657)$(1,310)$475,808 $1,420,018 $681,842 
Other comprehensive income (net of tax):
Net income— — 52,617 — 1,675 54,292 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $7— — — 22 — 22 — 
Dividends on common shares ($0.15 per share)— — (68,227)— — (68,227)— 
Share-based compensation plans, net78 23,853 — — — 23,853 — 
Distributions paid to noncontrolling interest in Eureka Midstream Holdings, LLC— — — — (12,000)(12,000)— 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at June 30, 2023433,261 $4,001,030 $(3,047,267)$(1,288)$465,483 $1,417,958 $681,842 
Other comprehensive income (net of tax):
Net income— — 112,804 — 2,272 115,076 14,628 
Pension and other post-retirement benefits liability adjustment, net of tax expense of $7— — — 22 — 22 — 
Dividends on common shares ($0.15 per share)— — (66,402)— — (66,402)— 
Share-based compensation plans, net— 8,338 — — — 8,338 — 
Distributions paid to noncontrolling interest in Eureka Midstream Holdings, LLC— — — — (2,440)(2,440)— 
Dividends paid to holders of Equitrans Midstream Preferred Shares ($0.4873 per share)— — — — — — (14,628)
Balance at September 30, 2023433,261 $4,009,368 $(3,000,865)$(1,266)$465,315 $1,472,552 $681,842 
The EQGP General Partner is a wholly-owned subsidiaryaccompanying notes are an integral part of Equitrans Gathering Holdingsthese consolidated financial statements.
9
Table of Contents


EQUITRANS MIDSTREAM CORPORATION
Notes to Consolidated Financial Statements (Unaudited)
1.    Financial Statements
Nature of Business. The Company's operating subsidiaries provide midstream services to the Company's customers in Pennsylvania, West Virginia and controls EQGPOhio through its general partner interest in EQGP; therefore,three primary assets: the financial statementsgathering system, which includes predominantly dry gas gathering systems of Equitrans Gathering Holdings consolidate EQGP. The EQM General Partner is a wholly-owned subsidiaryhigh-pressure gathering lines; the transmission system, which includes FERC-regulated interstate pipelines and storage systems; and the water network, which primarily consists of EQGPwater pipelines and controls EQM through its general partner interest in EQM; therefore, the financial statementsother facilities that support well completion activities and produced water handling activities.
Basis of EQGP consolidate EQM.
Presentation. References in these financial statements to Equitrans Midstream or the Company refer collectively to Equitrans Midstream Corporation and the Predecessor for all historical periods prior to the Separation.
These financial statements have been derived from EQT'sits consolidated financial statements and accounting records and reflect the historical results of operations, financial position and cash flows of the Company as if the Midstream Business had been combinedsubsidiaries for all periods presented. presented, unless otherwise indicated.
The financial statements include expense allocations for certain corporate functions historically performed by EQT, such as executive oversight, accounting, treasury, tax, legal, procurement, information technology and equity-based compensation. See Note 5. The Company believes the assumptions underlying these financial statements are reasonable; however, as organizational structure and strategic focus dictate expenses incurred, the financial statements may not include all expenses that would have been incurred had the Company existed as a standalone, publicly traded corporation. Similarly, the financial statements may not reflect the results of operations, financial position and cash flows had the Company existed as a standalone, publicly traded corporation.
Theseaccompanying unaudited consolidated financial statements have been prepared in accordance with GAAPgenerally accepted accounting principles in the United States (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 notesfootnotes 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)disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of the Company as of September 30, 2018 and December 31, 2017,2023, the results of its operations and equity for the three and nine months ended September 30, 20182023 and 20172022 and its cash flows and equity for the nine months ended September 30, 20182023 and 2017.2022. The condensed combined consolidated balance sheet at December 31, 20172022 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022, which includes all disclosures required by GAAP.
Due to, among other things, the seasonal nature of the Company's utility customer contracts, as well as producers’ well completion activities and varying needs for fresh and produced water (which are primarily driven by horizontal lateral lengths and the number of completion stages per well), the interim statements for the three and nine months ended September 30, 20182023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.2023.
For further information, refer to the Company's annual combined consolidated financial statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and "Management's2022, as well as Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" includedcontained herein.
Revisions of Previously Issued Financial Statements.
In the course of its 2022 year-end process, the Company identified certain corrections in Amendment No. 3its previously issued unaudited interim consolidated financial statements primarily related to the Equitrans Midstream Corporation Registration Statementaccounting for the Henry Hub cash bonus payment provision (as defined in Note 7). In accordance with Staff Accounting Bulletin (SAB) No. 99, Materiality, and SAB No. 108, Consideringthe Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the corrections and, based on its analysis of quantitative and qualitative factors, determined that the related impact was not material to the Company's affected unaudited interim consolidated financial statements presented within this Quarterly Report on Form 10 dated October 24, 201810-Q. The Company has made the appropriate revisions to its previously issued interim consolidated financial statements in order to correct the Henry Hub cash bonus payment provision, and filed withalso made other immaterial revisions to its nine months ended September 30, 2022 unaudited interim consolidated financial statements. For more information, see Notes 1 and 16 to the SECconsolidated financial statements in the Company's Annual Report on October 24, 2018 (as subsequently declared effective,Form 10-K for the Registration Statement).year ended December 31, 2022.
Recently Issued Accounting StandardsStandards.
In May 2014,March 2020, the FASB issued ASU No. 2014-09, Revenue2020-04, Reference Rate Reform (Topic 848), which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from Contracts with Customers. The standard requires entitiesreference rates that are expected to recognize revenue inbe discontinued. This guidance is applicable to the calculation of each dividend following March 31, 2024 for the Equitrans Midstream Preferred Shares pursuant to the Company's Second Amended and Restated Articles of Incorporation, as well as any Company contracts that use the London Inter-Bank Offered Rate as a manner that depictsreference rate. In December 2022, the transfer of goods or servicesFASB also issued ASU 2022-06, which amended Topic 848 to customers at an amount that reflectsdefer the considerationsunset date to apply the entity expects in exchange for those goods or services.practical expedients until December 31, 2024. The Company adopted this standard on JanuaryApril 1, 2018 using the modified retrospective method of adoption. Adoption of the standard did not require an adjustment to the opening balance of equity. The Company has implemented processes2023 and controls to review new contracts for appropriate accounting treatment in the context of the standard and to generate disclosures required under the standard. For the disclosures required by the standard, see Note 2.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The standard primarily affects the accounting for equity investments, the accounting for financial liabilities measured under the fair value option and the presentation and disclosure of financial instruments and eliminates the cost method of accounting for equity investments. The Company adopted this standard in the first quarter of 2018 withit had no significant effect on its financial statements or related disclosures.
In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires entities to record assets and obligations for contracts currently recognized as operating leases. In July 2018, the FASB targeted improvements to ASU 2016-02 through its issuance of ASU No. 2018-11. This update provides entities with an optional transition method, which permits an entity to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has elected to use the optional transition method. The standard will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. The Company is using a lease accounting system to document its current population of contracts classified as leases, which will be updated as the Company's lease population changes. The Company continues to

10

Table of Contents



evaluate new business processes and related internal controls and is assessing and documenting the accounting effects related to the standard. Although the evaluation is ongoing, the Company expects that the adoption will affect its financial statements as the standard requires recognition of a right of use asset and corresponding lease liabilityimpact on the balance sheets.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard amends guidance on reporting credit losses on assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this standard eliminates the probable initial recognition threshold and, in its place, requires entities to recognize the current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope of the standard that have the contractual right to receive cash. The standard will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. The Company is currently evaluating the effect this standard will have on itsCompany's financial statements and related disclosures.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business. The standard provides guidance on evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The Company adopted the standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test of Goodwill Impairment. The standard simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill. Instead, an entity would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.
In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation: Scope of Modification Accounting. The standard provides guidance on evaluating whether a change to the terms or conditions of an equity-based award require modification accounting. The Company adopted the standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. The standard will be applied prospectively to awards modified on or after the adoption date.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement, Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes to the hierarchy associated with Level 1, 2 and 3 fair value measurements and the related disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect this standard will have on its financial statements and related disclosures but does not expect the adoption of this standard to have a material effect on its financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other: Internal-Use Software, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect this standard will have on its financial statements and related disclosures but does not expect the adoption of this standard to have a material effect on its financial statements and related disclosures.

11
10

Table of Contents





Unaudited Pro Forma2.    Financial Information - Earnings Per Shareby Business Segment
The following unaudited pro forma combined financial information presentsCompany reports its operations in three segments that reflect its three lines of business of Gathering, Transmission and Water, which reflects the Company's basic earnings per share as thoughmanner in which management evaluates the Separationbusiness for making operating decisions and Distribution hadassessing performance.
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
 (Thousands)
Revenues from customers:  
Gathering$220,087 $227,180 $641,033 $672,284 
Transmission98,575 91,557 330,021 293,430 
Water19,852 13,014 62,266 36,794 
Total operating revenues$338,514 $331,751 $1,033,320 $1,002,508 
Operating income (loss):  
Gathering$101,134 $112,279 $286,448 $345,695 
Transmission55,808 64,077 203,181 209,480 
Water(2,251)2,342 10,652 3,537 
Headquarters (a)
(402)(368)(1,214)(984)
Total operating income$154,289 $178,330 $499,067 $557,728 
Reconciliation of operating income to net income (loss): 
Equity income (b)
$73,810 $48 $97,618 $91 
Impairment of equity method investment (b)
— (583,057)— (583,057)
Other (expense) income, net (c)
(3,037)2,465 8,670 8,124 
Loss on extinguishment of debt— — — (24,937)
Net interest expense(106,334)(101,085)(314,935)(289,323)
Income tax (benefit) expense(10,976)(366)(14,295)7,927 
Net income (loss)$129,704 $(502,933)$304,715 $(339,301)
(a)Includes certain unallocated corporate expenses.
(b)Equity income and impairment of equity method investment are included in the Transmission segment.
(c)Includes unrealized (loss) gain on derivative instruments recorded in the Gathering segment.
September 30, 2023December 31, 2022
 (Thousands)
Segment assets:  
Gathering$7,605,477 $7,610,233 
Transmission (a)
2,808,259 2,333,896 
Water209,967 218,680 
Total operating segments10,623,703 10,162,809 
Headquarters, including cash408,954 282,776 
Total assets$11,032,657 $10,445,585 
(a)The equity method investment in the MVP Joint Venture is included in the Transmission segment.
11
Table of Contents


 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
 (Thousands)
Depreciation:  
Gathering$48,585 $49,125 $147,321 $145,953 
Transmission14,004 13,909 41,796 41,707 
Water6,655 5,162 19,029 14,483 
Headquarters104 376 637 1,129 
Total$69,348 $68,572 $208,783 $203,272 
Capital expenditures:
Gathering (a)
$67,551 $73,589 $199,157 $195,925 
Transmission (b)
31,332 12,429 54,896 22,994 
Water9,574 17,041 31,798 49,132 
Headquarters— — — 13 
Total (c)
$108,457 $103,059 $285,851 $268,064 
(a)Includes capital expenditures related to the noncontrolling interest in Eureka Midstream Holdings, LLC (Eureka Midstream) of approximately $3.3 million and $11.5 million for the three and nine months ended September 30, 2023, respectively, and approximately $5.9 million and $17.6 million for the three and nine months ended September 30, 2022, respectively.
(b)Transmission capital expenditures do not include aggregate capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $209.9 million and $280.5 million for the three and nine months ended September 30, 2023, respectively, and approximately $46.4 million and $158.2 million for the three and nine months ended September 30, 2022, respectively.
(c)The Company accrues capital expenditures when the work has been completed at January 1, 2017. See Note 12but the associated bills have not yet been paid. Accrued capital expenditures are excluded from the statements of consolidated cash flows until they are paid. The net impact of non-cash capital expenditures, including the effect of accrued capital expenditures, transfers to/from inventory as assets are completed/assigned to a project and capitalized share-based compensation costs were $(0.9) million and $(6.4) million for discussion of the Separationthree and Distribution.nine months ended September 30, 2023, respectively, and $10.7 million and $8.8 million for the three and nine months ended September 30, 2022, respectively.
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands, except per share amounts)
Net income attributable to Equitrans Midstream$82,825
 $33,334
 $266,621
 $99,969
Pro forma shares of common stock of Equitrans Midstream254,269
 254,269
 254,269
 254,269
Pro forma basic earnings per share$0.33
 $0.13
 $1.05
 $0.39
Unaudited Pro Forma Information - Rice Merger
The following unaudited pro forma combined financial information presents the Company's results as though the Rice Merger had been completed at January 1, 2017. The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Rice Merger taken place on January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.
 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
 (Thousands)
Pro forma operating revenues$327,380
 $918,162
Pro forma net income$177,738
 $479,665
Pro forma net income attributable to noncontrolling interests$113,659
 $331,185
Pro forma net income attributable to Equitrans Midstream$64,079
 $148,480
2.
3.    Revenue from Contracts with Customers
As discussed in Note 1, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, on January 1, 2018 using the modified retrospective method of adoption. The Company applied the standard to all open contracts as of the date of initial application. Adoption of the standard did not require an adjustment to the opening balance of equity and did not materially change the amount or timing of the Company's revenues.
For the three and nine months ended September 30, 20182023 and 2017,2022, substantially all revenues recognized on the Company's statements of condensed combined consolidated operations arecomprehensive income were from contracts with customers. As of September 30, 20182023 and December 31, 2017,2022, all receivables recorded on the Company's condensed combined consolidated balance sheets representrepresented performance obligations that have been satisfied and for which an unconditional right to consideration exists.
Gathering, Transmission and Storage Service Contracts. The Company provides gathering, transmission and storage services in two manners: firm service and interruptible service. Firm service contracts are typically long-term and include firm reservation fees, which are fixed, monthly charges for the guaranteed reservation of pipeline access or storage capacity. Volumetric-based fees can also be charged under firm contracts for each firm volume transported, gathered or stored as well as for volumes transported, gathered or stored in excess of the firm contracted volume. Interruptible service contracts include volumetric-based fees, which are charges for the volume of gas gathered, transported or stored and generally do not guarantee access to the pipeline or storage facility. These contracts can be short- or long-term. Firm and interruptible contracts are billed at the end of each calendar month, with payment typically due within 21 days.
Under a firm contract, the Company has a stand-ready obligation to provide the service over the life of the contract. The performance obligation for firm reservation fee revenue is satisfied over time as the pipeline capacity is made available to the customer. As such, the Company recognizes firm reservation fee revenue evenly over the contract period using a time-elapsed output method to measure progress. The performance obligation for volumetric-based fee revenue is generally satisfied upon the Company's monthly billing to the customer for volumes gathered, transported or stored during the month. The amount

12

Table of Contents



billed corresponds directly to the value of the Company's performance to date as the customer obtains value as each volume is gathered, transported or stored.
Certain of the Company's gas gathering agreements are structured with minimum volume commitments (MVC), which specify minimum quantities for which a customer will be charged regardless of quantities gathered under the contract. Revenue is recognized for MVC's when the performance obligation has been met, which is the earlier of when the gas is gathered or when it is remote that the producer will be able to meet its MVC.
Water Service Contracts. Water service revenues represent fees charged by the Company for the delivery of fresh water to a customer at a specified delivery point and for the collection and recycling or disposal of flowback and produced water. All of the Company's water service revenues are generated pursuant to variable price per volume contracts with customers. For fresh water service contracts, the only performance obligation in each contract is for the Company to provide water (usually a minimum daily volume of water) to the customer at a designated delivery point. For flowback and produced water, the performance obligation is collection and disposition of the water, which typically occur within the same day. Water service contracts are billed on a monthly basis, with payment typically due within 21 days.
Summary of Disaggregated Revenues. disaggregated revenues.The tables below provide disaggregated revenue information by business segment.
Three Months Ended September 30, 2023
GatheringTransmissionWaterTotal
(Thousands)
Firm reservation fee revenues (a)
$147,137 $82,508 $11,029 $240,674 
Volumetric-based fee revenues72,950 16,067 8,823 97,840 
Total operating revenues$220,087 $98,575 $19,852 $338,514 
Three Months Ended September 30, 2022
GatheringTransmissionWaterTotal
(Thousands)
Firm reservation fee revenues (a)
$144,730 $84,584 $9,375 $238,689 
Volumetric-based fee revenues82,450 6,973 3,639 93,062 
Total operating revenues$227,180 $91,557 $13,014 $331,751 
 Three Months Ended September 30, 2018
 Gathering Transmission Water Total
 (Thousands)
Firm reservation fee revenues$112,598
 $82,669
 $—
 $195,267
Volumetric-based fee revenues:       
Usage fees under firm contracts (a)
8,661
 5,331
 —
 13,992
Usage fees under interruptible contracts (b)
131,602
 1,350
 —
 132,952
Total volumetric based fee revenues140,263
 6,681
 —
 146,944
Water service revenues—
 —
 22,373
 22,373
Total operating revenues$252,861
 $89,350
 $22,373
 $364,584
Nine Months Ended September 30, 2023
GatheringTransmissionWaterTotal
(Thousands)
Firm reservation fee revenues (a)
$428,945 $266,477 $29,793 $725,215 
Volumetric-based fee revenues (b)
212,088 63,544 32,473 308,105 
Total operating revenues$641,033 $330,021 $62,266 $1,033,320 
Nine Months Ended September 30, 2022
GatheringTransmissionWaterTotal
(Thousands)
Firm reservation fee revenues (a)
$415,932 $272,129 $24,502 $712,563 
Volumetric-based fee revenues256,352 21,301 12,292 289,945 
Total operating revenues$672,284 $293,430 $36,794 $1,002,508 
 Nine Months Ended September 30, 2018
 Gathering Transmission Water Total
 (Thousands)
Firm reservation fee revenues$334,233
 $262,666
 $—
 $596,899
Volumetric-based fee revenues:       
Usage fees under firm contracts (a)
30,725
 13,981
 —
 44,706
Usage fees under interruptible contracts (b)
366,482
 8,782
 —
 375,264
Total volumetric based fee revenues397,207
 22,763
 —
 419,970
Water service revenues—
 —
 93,438
 93,438
Total operating revenues$731,440
 $285,429
 $93,438
 $1,110,307
(a)Includes fees on volumes gathered and transported in excess of firm contracted capacity as well as usage fees and fees on all volumes transported under firm contracts.
(b)Includes volumes from contracts under which the Company has agreed to hold capacity available without charging a capacity reservation fee.

(a) Firm reservation fee revenues associated with Gathering included MVC unbilled revenues of approximately $1.8 million and $7.5 million for the three and nine months ended September 30, 2023, respectively, and $8.5 million and $17.4 million for the three and nine months ended September 30, 2022, respectively.
13(b) For the nine months ended September 30, 2023, volumetric-based fee revenues associated with Gathering and Transmission included one-time contract buyouts by a customer for approximately $5.0 million and $23.8 million, respectively.

Contract assets. The Company's contract assets related to the Company's future MVC deficiency payments are generally expected to be collected within the next twelve months and are primarily included in other current assets in the Company's consolidated balance sheets until such time as the MVC deficiency payments are invoiced to the customer.

The following table presents changes in the Company's unbilled revenue balance:
Nine Months Ended September 30,
20232022
(Thousands)
Balance as of beginning of period$27,493 $16,772 
    Revenue recognized in excess of amounts invoiced (a)
7,530 19,436 
    Minimum volume commitments invoiced (b)
(23,558)(14,884)
    Amortization (c)
(494)(334)
Balance as of end of period$10,971 $20,990 
Table(a)Primarily includes revenues associated with MVCs that are generally included in firm reservation fee revenues within the Gathering and Water segments.
(b)Unbilled revenues are transferred to accounts receivable once the Company has an unconditional right to consideration from the customer.
(c)Amortization of Contentscapitalized contract costs paid to customers over the expected life of the agreement.

Contract liabilities. The Company's contract liabilities consist of deferred revenue primarily associated with the EQT Global GGA. Contract liabilities are classified as current or non-current according to when such amounts are expected to be recognized.

On July 8, 2022, the Company received written notice from EQT, pursuant to the EQT Global GGA, of EQT’s irrevocable election under the agreement to forgo up to approximately $145 million of potential gathering fee relief in the first twelve-month period beginning the first day of the quarter in which the MVP full in-service date occurs and up to approximately $90 million of potential gathering fee relief in the second such twelve-month period in exchange for a cash payment from the Company to EQT in the amount of approximately $195.8 million (the EQT Cash Option). As a result of EQT’s election to forgo potential rate relief in exchange for the cash option payment, the Company recorded a reduction to the contract liability of approximately $195.8 million and an increase to the EQT Cash Option liability on the consolidated balance sheets as of September 30, 2022. The Company utilized borrowings under the Amended EQM Credit Facility to effect such payment and the payment was made to EQT on October 4, 2022.

The following table presents changes in the Company's contract liability balances:
Nine Months Ended September 30,
20232022
(Thousands)
Balance as of beginning of period$973,087 $822,416 
  Amounts recorded during the period (a)
250,061 266,792 
  Change in estimated variable consideration (b)
(5,330)(4,837)
  Amounts transferred during the period (c)
(4,317)(942)
  EQT Cash Option— (195,820)
Balance as of end of period$1,213,501 $887,609 
(a)Includes deferred billed revenue during the nine months ended September 30, 2023 and 2022 primarily associated with the EQT Global GGA.
(b)For the nine months ended September 30, 2023, the change in estimated variable consideration represents the decrease in total deferred revenue due to changes in MVP timing assumptions. For the nine months ended September 30, 2022, the change in estimated variable consideration represents the decrease in total deferred revenue required for gathering MVC revenue with a declining rate structure, resulting from the EQT Cash Option election that required total estimated gathering consideration to be increased.
(c)Deferred revenues are recognized as revenue upon satisfaction of the Company's performance obligation to the customer.
Summary of Remaining Performance Obligations. remaining performance obligations. The following table summarizes the estimated transaction price allocated to the Company's remaining performance obligations under all contracts with firm reservation fees, and MVC'sMVCs and/or ARCs as of September 30, 2018.2023 that the Company will invoice or transfer from contract liabilities and recognize in future periods.
 
2023(a)
2024202520262027ThereafterTotal
 (Thousands)
Gathering firm reservation fees$25,390 $156,078 $177,127 $167,692 $161,018 $1,726,068 $2,413,373 
Gathering revenues supported by MVCs114,809 427,169 456,995 489,335 487,366 3,169,121 5,144,795 
Transmission firm reservation fees94,184 394,879 394,766 393,300 394,490 3,149,178 4,820,797 
Water revenues supported by ARCs9,375 45,706 48,441 45,159 44,065 166,644 359,390 
Total (b)
$243,758 $1,023,832 $1,077,329 $1,095,486 $1,086,939 $8,211,011 $12,738,355 
 
2018 (a)
 2019 2020 2021 2022 Thereafter Total
 (Thousands)
Gathering firm reservation fees$113,018
 $476,270
 $552,197
 $562,196
 $562,196
 $2,834,111
 $5,099,988
Gathering revenues supported by MVC's—
 65,700
 71,370
 71,175
 71,175
 136,875
 416,295
Transmission firm reservation fees94,077
 346,893
 344,328
 339,588
 334,522
 2,477,808
 3,937,216
Total$207,095
 $888,863
 $967,895
 $972,959
 $967,893
 $5,448,794
 $9,453,499
(a)    October 1, 2023 through December 31, 2023.
(a)October 1 through December 31.
(b)    Includes assumptions regarding timing for placing certain projects in-service. Such assumptions may not be realized and delays in the in-service dates for projects have substantially altered, and any future additional delays may further substantially alter, the remaining performance obligations for certain contracts with firm reservation fees, MVCs and/or ARCs. The MVP Joint Venture is accounted for as an equity method investment and those amounts are not included in the table above.
Based on total projected contractual revenues, including projected contractual revenues from additional pipelinefuture capacity that will resultexpected from expansion projects that are not yet fully constructed or not yet fully in-service for which the Company has executed firm contracts, the Company's firm gathering contracts and firm transmission and storage contracts had weighted average remaining terms of approximately 813 years and 1511 years, respectively, as of December 31, 2017.September 30, 2023.
3.Investments in Consolidated, Non-Wholly-Owned Entities
4.    Investment in EQGP. On May 22, 2018, pursuant to an IDR purchase and sale agreement dated April 25, 2018, by and among EQT, RMGP and EQGP, EQGP acquired from RMGP all of the issued and outstanding IDRs in RMP in exchange for 36,293,766 EQGP common units (the IDR Transaction). As a result of the IDR Transaction, the Company's percentage ownership of the outstanding EQGP common units increased from 90.1% to 91.3%.Unconsolidated Entities
As of September 30, 2018, the Company owned 276,008,766 EQGP common units, representing a 91.3% limited partner interest, and the entire non-economic general partner interest in EQGP.
Investment in EQM. As described in Note 1, the Drop-Down Transaction was completed effective May 1, 2018. As part of the consideration for the Drop-Down Transaction, EQM issued 5,889,282 EQM common units to a wholly-owned subsidiary of the Company.
On July 23, 2018, in connection with the EQM-RMP Mergers discussed in Note 1, the 102,323,796 RMP common units issued and outstanding converted into 33,963,753 EQM common units based on the exchange rate of 0.3319, the 36,220 outstanding RMP phantom units fully vested and converted into 12,024 EQM common units, based on the exchange rate of 0.3319, less applicable tax withholding, and the issued and outstanding IDRs in RMP were canceled. Of the RMP common units issued and outstanding at the time of the EQM-RMP Mergers, the Company owned 28,757,246 RMP common units, which converted into 9,544,530 EQM common units.
As of September 30, 2018, EQGP owned 21,811,643 EQM common units, representing a 17.9% limited partner interest, 1,443,015 EQM general partner units, representing a 1.2% general partner interest, and all of the IDRs in EQM. In addition, as of September 30, 2018, the Company owned 15,433,812 EQM common units, representing a 12.7% limited partner interest in EQM.
During the nine months ended September 30, 2018, as a result of EQGP and EQM equity transactions, the Company recorded, in the aggregate, a $157.9 million reduction to parent net investment, an increase in noncontrolling interest in EQM of $214.9 million and a decrease in deferred tax liability of $57.0 million.
4.    Financial Information by Business Segment
The Company conducts its business through three business segments: Gathering, Transmission and Water. Gathering includes the Company's high-pressure gathering lines and FERC-regulated low-pressure gathering lines; Transmission includes the Company's FERC-regulated interstate pipeline and storage system; and Water consists of the Company's water pipelines, impoundment facilities, pumping stations, take point facilities and measurement facilities.
As discussed in Note 1, the financial statements include expense allocations for certain corporate functions historically performed by EQT. The financial statements may not include all expenses that would have been incurred had the Company existed as a standalone, publicly traded corporation.

14

Table of Contents



 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Revenues from external customers (including affiliates):     
  
Gathering$252,861
 $116,522
 $731,440
 $330,996
Transmission89,350
 89,771
 285,429
 272,184
Water22,373
 —
 93,438
 —
Total operating revenues$364,584
 $206,293
 $1,110,307
 $603,180
Operating income (loss):     
  
Gathering$177,902
 $85,932
 $510,755
 $243,061
Transmission58,691
 59,770
 198,784
 189,237
Water(3,093) —
 35,627
 —
Other (a)
(15,178) (4,420) (42,636) (7,742)
Total operating income$218,322
 $141,282
 $702,530
 $424,556
        
Reconciliation of operating income to net income:       
Equity income (b)
16,087
 6,025
 35,836
 15,413
Other income1,345
 637
 3,193
 3,576
Net interest expense36,862
 10,210
 68,848
 24,870
Income tax expense12,926
 22,283
 43,394
 68,357
Net income$185,966
 $115,451
 $629,317
 $350,318
(a)Other operating loss includes selling, general and administrative expense, transaction costs and depreciation that are not allocated to the business segments.
(b)Equity income is included in the Transmission segment.
 September 30, 2018 December 31, 2017
 (Thousands)
Segment assets: 
  
Gathering$6,131,380
 $5,656,094
Transmission (a)
2,833,519
 1,947,566
Water177,126
 208,273
Total operating segments9,142,025
 7,811,933
Headquarters, including cash800,759
 516,863
Total assets$9,942,784
 $8,328,796
(a)The equity investment in the MVP Joint Venture is included in the Transmission segment.

15

Table of Contents



 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Depreciation:     
  
Gathering$25,359
 $9,983
 $72,309
 $28,398
Transmission12,357
 12,261
 37,228
 35,793
Water5,851
 —
 17,420
 —
Other155
 —
 278
 —
Total$43,722
 $22,244
 $127,235
 $64,191
Expenditures for segment assets:       
Gathering$194,477
 $48,182
 $515,072
 $150,728
Transmission37,626
 22,312
 84,517
 73,679
Water7,981
 —
 17,358
 —
Other11,819
 —
 11,819
 —
Total (a)
$251,903
 $70,494
 $628,766
 $224,407
(a)The Company accrues capital expenditures when the capital work has been completed but the associated bills have not been paid. Accrued capital expenditures are excluded from the statements of condensed combined consolidated cash flows until they are paid. Accrued capital expenditures were approximately $95.2 million and $90.7 million at September 30, 2018 and December 31, 2017, respectively. Accrued capital expenditures were approximately $26.5 million and $26.7 million at September 30, 2017 and December 31, 2016, respectively.
5.Related Party Transactions
In the ordinary course of business, the Company, through EQGP and EQM, engages in transactions with EQT and its affiliates, including, but not limited to, gathering agreements, transportation service and precedent agreements, storage agreements and water service agreements.
As of September 30, 2018, EQGP and EQM each had an omnibus agreement with EQT. The EQGP omnibus agreement was entered into by EQGP, the EQGP General Partner and EQT. The EQM omnibus agreement was entered into by EQM, the EQM General Partner and EQT. Pursuant to the omnibus agreements, EQT performed centralized corporate general and administrative services for EQGP and EQM and provided a license for EQGP's and EQM's use of the name "EQT" and related marks in connection with their businesses. In exchange, EQGP and EQM reimbursed EQT for the expenses incurred by EQT in providing these services. EQM's omnibus agreement also provided for certain indemnification obligations between EQM and EQT. Pursuant to a secondment agreement, available employees of EQT and its affiliates could be seconded to EQM to provide operating and other services with respect to EQM's business under the direction, supervision and control of EQM. In exchange, EQM reimbursed EQT and its affiliates for the services provided by the seconded employees.
As of September 30, 2018, RMP had an omnibus agreement with EQT. The RMP omnibus agreement was entered into by EQT, EQT RE, LLC (EQT RE), RMP, EQM Midstream Management LLC and EQM Poseidon Midstream LLC (formerly known as Rice Poseidon Midstream LLC) and had terms similar to those of the EQM omnibus agreement, including the provision for certain indemnification obligations between RMP and EQT.
Reimbursements to EQT may not necessarily reflect the actual expenses that the Company would have incurred on a standalone basis. The Company is unable to estimate what those expenses would be on a standalone basis.
See Note 12 for discussion of the related party transaction activity that occurred subsequent to September 30, 2018.
6.Investment in Unconsolidated Entity
As of September 30, 2018, the EQM is the operator of the Mountain Valley Pipeline (MVP) and owned a 45.5% interest in the MVP Joint Venture (the MVP Interest). Pipeline. The MVP Joint Venture is constructing the MVP,Mountain Valley Pipeline (MVP), an estimated 300-mile natural gas interstate pipeline that spansis designed to span from northern West Virginia to southern Virginia. The Company will operate the MVP and owned a 47.7% interest in the MVP project as of September 30, 2023. On November 4, 2019, Consolidated Edison, Inc. (Con Edison) exercised an option to cap its investment in the construction of the MVP project at approximately $530 million (excluding AFUDC). On May 4, 2023, RGC Resources, Inc. (RGC) also exercised an option for the Company to fund RGC's portion of future capital contributions with respect to the MVP project, which funding the Company commenced in June 2023 and will continue through the full in-service date of the MVP. The Company and NextEra Energy, Inc. are obligated to, and RGC prior to the exercise of its option described above had opted to, fund the shortfall in Con Edison's capital contributions, on a pro rata basis. Following RGC's exercise of its option, the Company is also funding RGC's portion of Con Edison's shortfall. Such funding by the Company in respect of the Con Edison shortfall and RGC's portion of capital contributions has and will correspondingly increase the Company's interests in the MVP project and decrease Con Edison's and RGC's respective interests, as applicable, in the MVP project.
12
Table of Contents

On June 3, 2023, the President of the United States signed into law the Fiscal Responsibility Act of 2023 that, among other things, ratified and approved all permits and authorizations necessary for the construction and initial operation of the MVP, directed the applicable federal officials and agencies to maintain such authorizations, required the Secretary of the Army to issue not later than June 24, 2023 all permits or verifications necessary to complete construction of the MVP and allow for the MVP’s operation and maintenance, and divested courts of jurisdiction to review agency actions on approvals necessary for MVP construction and initial operation. Following enactment of the Fiscal Responsibility Act of 2023, the Fourth Circuit issued a stay halting MVP project construction in the Jefferson National Forest and a stay of the new Biological Opinion and Incidental Take Statement for the MVP project effectively halting forward construction for the entirety of the project, on July 10, 2023 and July 11, 2023, respectively. The MVP Joint Venture subsequently filed an emergency application to vacate the stays with the U.S. Supreme Court and the U.S. Supreme Court vacated the stays on July 27, 2023. Accordingly, the MVP Joint Venture recommenced forward construction.
On October 18, 2023, the Company announced that following the MVP Joint Venture's comprehensive review of progress achieved since the resumption of forward construction in August 2023 and construction activity remaining for completion of the MVP project, the MVP Joint Venture refined the targeted timing for completing construction of the project from year-end 2023 to the first quarter of 2024, with the total project cost anticipated to be approximately $7.2 billion (excluding AFUDC), which includes approximately $120 million of contingency. Based on such targeted completion timing and following in-service authorization from the FERC, contractual obligations accordingly would commence on or before April 1, 2024. If the project were to be completed in the first quarter of 2024 and at a total project cost of approximately $7.2 billion (excluding AFUDC), the Company expects its equity ownership in the MVP project would progressively increase from approximately 47.7% to approximately 48.8%.
The MVP Joint Venture is a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. The Company through EQM, is not the primary beneficiary of the MVP Joint Venture because the Company does not have the power to direct the activities that most significantly affect the MVP Joint Venture's economic performance. Certain business decisions, such as decisions to make distributions of cash, require a greater than 66 2/3% ownership interest approval, and no one member owns more than a 66 2/3% interest.

16

TableThe Company reviews the carrying value of Contents



its investments in unconsolidated entities for impairment whenever events or changes in circumstances indicate that the fair value may have declined in value. In connection with its assessment as of September 30, 2022, the Company identified an increased risk of one or more permitting delays resulting primarily from then recent legal developments and regulatory uncertainties, as well as macroeconomic pressures primarily due to increased interest rates that impacted the discount rate used within the estimated fair value of its investment in the MVP Joint Venture. The MVP Interest is anCompany considered these factors to be indicators of a decline in value. As such, the Company evaluated if the carrying value of its equity method investment in the MVP Joint Venture as of September 30, 2022 exceeded the fair value and, if so, whether that decline in value was other-than-temporary.
The Company estimated the fair value of its investment in the MVP Joint Venture using an income approach that primarily considered revised probability-weighted scenarios of discounted future net cash flows based on the estimates of total project costs and revenues. These scenarios reflected assumptions and judgments regarding potential delays and cost increases resulting from various then ongoing legal and regulatory matters affecting the MVP and MVP Southgate projects.The Company’s analysis also took into account, among other things, probability-weighted growth expectations from additional compression expansion opportunities. The Company generally used an after-tax discount rate of 7.5% in the analysis derived based on a market participant approach. The Company considered scenarios under which then ongoing or new legal and regulatory matters could further delay the completion and increase the total costs of the project; all required legal and regulatory approvals and authorizations and certain compression expansion opportunities are realized; and the MVP project is canceled. As a result of the assessment, the Company recognized a pre-tax impairment charge of approximately $583 million that reduced the carrying value of its equity investment in the MVP Joint Venture to approximately $784 million as of September 30, 2022. Given the significant assumptions and judgments used in estimating the fair value of the Company's investment in the MVP Joint Venture, the fair value of the investment in the MVP Joint Venture represented a Level 3 measurement.
In September 2023, the MVP Joint Venture issued a capital call notice for accounting purposes because EQM has the abilityfunding of the MVP project to exercise significant influence overMVP Holdco, LLC (MVP Holdco), a wholly owned subsidiary of the Company, for $126.3 million, which was paid in October 2023. In October 2023, the MVP Joint Venture issued a capital call notice for the funding of the MVP project to MVP Holdco for $327.0 million, which is expected to be paid in the fourth quarter of 2023.
Pursuant to the MVP Joint Venture's operating and financial policies. Accordingly,limited liability company agreement, MVP Holdco is obligated to provide performance assurances in respect of the MVP project, which may take the form of a guarantee from EQM records adjustments to(provided that EQM's debt is rated as investment grade in accordance with the investment balance for contributions torequirements of the MVP Joint Venture's limited liability company agreement), a letter of credit or distributions fromcash collateral, in favor of the MVP Joint Venture andto provide assurance as to the funding of
13
Table of Contents

MVP Holdco's proportionate share of the construction budget for EQM's pro-ratathe MVP project. As of September 30, 2023, the letter of credit with respect to the MVP project was in the amount of approximately $219.7 million. The letter of credit with respect to the MVP project is expected to continue to reduce over time as the Company contributes capital to fund MVP Holdco's remaining proportionate share of the construction budget.
The Company's ownership interest in the MVP Joint Venture earnings.related to the MVP project is significant for the nine months ended September 30, 2023 as defined by the SEC's Regulation S-X Rule 1-02(w). Accordingly, as required by Regulation S-X Rule 3-09, the following tables summarize the unaudited condensed consolidated financial statements of the MVP Joint Venture in relation to the MVP project.
Condensed Balance Sheets
September 30, 2023December 31, 2022
(Thousands)
Current assets$250,231 $71,535 
Non-current assets7,510,768 6,737,064 
Total assets$7,760,999 $6,808,599 
Current liabilities$236,947 $118,679 
Equity7,524,052 6,689,920 
Total liabilities and equity$7,760,999 $6,808,599 
Condensed Statements of Operations
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
(Thousands)
Operating (expense) income$— $(20)$— $20 
Other income1,368 — 1,930 — 
Net interest income46,191 120 61,114 172 
AFUDC - equity107,785 — 142,607 — 
Net income$155,344 $100 $205,651 $192 
MVP Southgate Project. In April 2018, the MVP Joint Venture announced the MVP Southgate project, which is a proposed 70-milecontemplated interstate pipeline that willwas approved by the FERC to extend approximately 75-miles from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. As of September 30, 2018, EQMThe Company is the operator ofexpected to operate the MVP Southgate pipeline and owned a 32.7%47.2% interest in the MVP Southgate project.
Inproject as of September 2018,30, 2023. The MVP Joint Venture continues to engage with the project shipper, Dominion Energy North Carolina, and a prospective customer regarding refining the MVP Southgate project’s design, scope and/or timing for the benefit of such customers in lieu of pursuing the project as originally contemplated. Dominion Energy North Carolina’s obligations under the precedent agreement in support of the original project are subject to certain conditions, including, among others, that the MVP Joint Venture issued a capital call notice for the fundingwill have completed construction of the MVPproject facilities by December 31, 2023. The Company is unable to MVP Holdco, LLC (MVP Holdco), an indirect, wholly-owned subsidiaryensure the results of EQM, for $456.0 million, of which $175.2 million and $199.7 million were paid in October 2018 and November 2018, respectively, and the remaining $81.1 million is expected to be paid in December 2018. The capital contribution payable and the corresponding increase to the investment balance are reflected on the condensed combined consolidated balance sheet as of September 30, 2018. In addition, in September 2018,continued engagement between the MVP Joint Venture issuedand Dominion Energy North Carolina and a capital call notice forprospective customer, including the fundingultimate design, scope, timing, undertaking or completion of the project.
Pursuant to the MVP Joint Venture's limited liability company agreement, MVP Holdco is obligated to provide performance assurances in respect of MVP Southgate, which performance assurances may take the form of a guarantee from EQM (provided that EQM's debt is rated as investment grade in accordance with the requirements of the MVP Joint Venture's limited liability company agreement), a letter of credit or cash collateral. On April 6, 2023, EQM’s $14.2 million letter of credit with respect to the MVP Southgate project was terminated, following the determination to temporarily defer partners’ obligations to post performance assurances with respect to the MVP Southgate project, which may be reinstated upon further developments. Upon the FERC’s initial release to begin construction of the MVP Southgate project, the Company will be obligated to deliver an allowable form of performance assurance in an amount equal to 33% of MVP Holdco for $7.7 million,Holdco’s proportionate share of the remaining capital obligations under the applicable construction budget.
14
Table of Contents

5.     Share-based Compensation Plans
In December 2021, at the recommendation of the Human Capital and Compensation Committee (the Compensation Committee) and approval of the Company’s Board of Directors (the Board), the Company granted a special, one-time, performance award program designed to reward all employees should the Company’s most complex and strategically significant project, the MVP project, be placed in-service (the MVP PSU Program). The Company granted 1,450,110 shares to all participants in the 2018 Long-Term Incentive Plan, as amended, as of November 1, 2021 (LTIP Participants), except the Company’s named executive officers (NEOs) and certain other senior leaders (collectively, the Senior Executives), and 1,158,030 shares to the Senior Executives. The MVP PSU Program awards were granted on December 6, 2021 and will be paid in Company common stock, contingent on the MVP Joint Venture being authorized by the FERC to commence service on the MVP (such authorization, the In-Service Date) on or before a specified expiration date of January 1, 2024 (the Expiration Date, the continued applicability of which is expecteddiscussed below), subject to continued service through the applicable payment date:
•As to shares issued to the LTIP Participants, 100% will be paid on the date selected by the Company that is not later than 90 days after the In-Service Date;
•As to shares issued to the Senior Executives:
•50% will be paid on the date selected by the Company that is not later than 90 days after the In-Service Date;
•25% will be paid on the date selected by the Company that is not later than 30 days after the first anniversary of the In-Service Date; and
•25% will be paid on the date selected by the Company that is not later than 30 days after the second anniversary of the In-Service Date.
Dividends are eligible to be paid in December 2018.cash upon vesting on each share of common stock as dividends are declared on the Company's common stock during the vesting period.
Equity income, which is primarily related to EQM's pro-rata shareThe achievement of the MVP Joint Venture's AFUDC,Venture being authorized by the FERC to commence service on the MVP on or before the Expiration Date represented a performance condition as defined by ASC 718, Share-based Compensation, that should be assessed at the end of each reporting period as to whether the performance condition is reported in equity income inprobable of being achieved. Due to the Company's statements of condensed combined consolidated operations.
As of September 30, 2018, EQM had issued a $91 million performance guarantee in favorgraded vesting of the MVP Joint Venture. The guarantee provides performance assurances of MVP Holdco's obligationsPSU Program awards to fund its proportionate sharethe Senior Executives, the Company recognizes compensation cost over the requisite service period for each separately vested tranche of the MVP construction budget. As of September 30, 2018,award as though each award was, in substance, its own award. In June 2023, the Company's maximum financial statement exposure related toperformance condition associated with the MVP Joint VenturePSU Program awards was approximately $1,391 million, which consists of the investment in unconsolidated entity balance on the condensed combined consolidated balance sheet as of September 30, 2018 and amounts that could have become due under EQM's performance guarantee as of that date.
The following tables summarize the unaudited condensed financial statements of the MVP Joint Venture.
Condensed Consolidated Balance Sheets
 September 30, 2018 December 31, 2017
 (Thousands)
Current assets$1,260,789
 $330,271
Noncurrent assets2,330,467
 747,728
Total assets$3,591,256
 $1,077,999
    
Current liabilities$726,528
 $65,811
Equity2,864,728
 1,012,188
Total liabilities and equity$3,591,256
 $1,077,999
Condensed Statements of Consolidated Operations
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Net interest income$11,958
 $3,227
 $25,873
 $8,205
AFUDC — equity23,417
 10,055
 52,906
 25,710
Net income$35,375
 $13,282
 $78,779
 $33,915

17

Table of Contents



7.Debt
EQGP Working Capital Facility. As of September 30, 2018, EQGP had a working capital loan agreement with EQT (the Working Capital Facility), through which EQT agreeddeemed to make interest-bearing loans available in an aggregate principal amount not to exceed $50 million outstanding at any one time.

EQGP had approximately $0.2 million of borrowings outstanding under the Working Capital Facility as of September 30, 2018 and December 31, 2017, which were included in due to affiliates on the condensed combined consolidated balance sheets.be probable. During the nine months ended September 30, 2018 and 2017,2023, the maximum outstanding borrowings were $0.2Company recognized compensation cost of approximately $19.4 million and $0.3that includes the cumulative catch-up of approximately $14.1 million respectively, andto reflect the weighted average annual interest rates were 3.3% and 2.4%, respectively.
EQM Revolving Credit Facility.requisite service period of each award that has been provided to date. As of September 30, 2018, EQM had2023, there was approximately $4.9 million of unrecognized compensation cost related to non-vested MVP PSU Program awards that is expected to be recognized over a $1 billion credit facilityremaining weighted average vesting term of approximately 0.8 years.
The following table provides detailed information on the MVP PSU Program as of September 30, 2023:
MVP PSU ProgramNon-vested SharesGrant Date Fair Value (a)Fair Value (Thousands)Requisite Service PeriodUnrecognized Compensation Cost (Thousands)
LTIP Participants1,367,983 $9.59$13,119 28 months$1,551 
Senior Executives T1579,015 $9.595,553 28 months666 
Senior Executives T2289,511 $9.592,776 40 months1,126 
Senior Executives T3289,504 $9.592,776 52 months1,530 
(a)    Determined based upon the closing price of the Company's common stock on the day before the grant date.
In connection with considering the Company’s ongoing efforts to complete the MVP project, the Board took note of the significant legal and regulatory obstacles that delayed progress on the MVP project that were outside of the control of the Company, particularly since the inception of the MVP PSU Program, the efforts undertaken by many of the Company’s employees, including the NEOs, to overcome these obstacles, and ongoing risks. The Board also is focused on and seeks to promote the Company's top priority of completing the MVP project safely and in compliance with applicable environmental standards. Taking into account these factors, the proximity of the Expiration Date, and noting the potential that the Expiration
15
Table of Contents

Date could distract from, or be cited by project opponents as a distraction from, a focus on safety and environmental compliance, the Board, on July 26, 2023, with the recommendation of the Compensation Committee, approved an amendment to the MVP PSU Program to eliminate the Expiration Date as a term of the MVP PSU Program and all award agreements thereunder (the MVP PSU Amendment).
Accordingly, the Equitrans Midstream Corporation Senior Executive 2021 MVP Performance Share Units Award Agreements to which the NEOs are parties and the Equitrans Midstream Corporation LTIP Participant 2021 MVP Performance Share Units Award Agreements were amended to reflect the elimination of the Expiration Date, and the calculation of shares retained in the event of a participant’s termination due to death, disability or retirement also was amendedclarified. All other terms of the award agreements remain in full force and restatedeffect.
The MVP PSU Amendment resulted in October 2018a change to increase the borrowing capacity to $3 billion (the EQM Facility). The EQM Facility is availableoriginal performance condition of the MVP PSU Program. As such, the Company accounted for general partnership purposes, including to purchase assets, and to fund working capital requirements and capital expenditures, pay distributions and repurchase units. The EQM Facility contains various provisions that, if violated, couldthe MVP PSU Amendment as a Type Ι modification in accordance with ASC 718, which did not result in termination of the credit facility, early payment of amounts outstanding or similar actions. Significant covenants require maintenance of a permitted leverage ratio and limit restricted payments and transactions with affiliates. Significant events of default include insolvency, nonpayment of scheduled principal or interest obligations, change of control and cross-defaultany additional compensation cost related to the acceleration or default of certain other financial obligations. Under theawards.
6.    Debt

Amended EQM Facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions).
Credit Facility. As of September 30, 2023, the Company had aggregate commitments available under that certain Third Amended and Restated Credit Agreement, dated as of October 31, 2018 (as amended, supplemented or otherwise modified, the Amended EQM Credit Facility), among EQM, as borrower, Wells Fargo Bank, National Association, as the administrative agent, swing line lender, and an L/C issuer, the lenders party thereto from time to time and any other persons party thereto from time to time, of approximately $2.16 billion before October 31, 2023, with approximately $1.55 billion in aggregate commitments available on and after October 31, 2023 and prior to April 30, 2025. As of September 30, 2023, EQM had $22approximately $525 million of borrowings outstanding and $1$220.7 million of letters of credit outstanding under the Amended EQM Credit Facility. The amount EQM is able to borrow under the Amended EQM Credit Facility is bounded by a maximum Consolidated Leverage Ratio (as defined in the Amended EQM Credit Facility) that, as of September 30, 2023, could not exceed 5.50 to 1.00. Effective as of October 1, 2023 (the MVP Mobilization Effective Date, as defined in the Amended EQM Credit Facility), the maximum Consolidated Leverage Ratio permitted with respect to the fiscal quarter ending December 31, 2023 and the end of each of EQM’s three consecutive fiscal quarters thereafter is 5.85 to 1.00, with the then-applicable ratio being tested as of the end of each fiscal quarter. As of the MVP Mobilization Effective Date, as defined in the Amended EQM Credit Facility, EQM expects to have the ability to borrow approximately $0.6 billion under the Amended EQM Credit Facility. As of December 31, 2017,2022, EQM had $180approximately $240 million of borrowings outstanding and no$234.9 million of letters of credit outstanding under the Amended EQM Credit Facility. For the avoidance of doubt, any reference to the Amended EQM Credit Facility as of any particular date shall mean the Amended EQM Credit Facility as in effect on such date.
During the three and nine months ended September 30, 2023, the maximum outstanding borrowings at any time were approximately $525 million and the average daily balances were approximately $337 million and $263 million, respectively. EQM incurred interest at weighted average annual interest rates of approximately 8.2% and 7.9% for the three and nine months ended September 30, 2023, respectively. For the three and nine months ended September 30, 2023, commitment fees of $2.0 million and $6.4 million, respectively, were paid to maintain credit availability under the Amended EQM Credit Facility. During the three and nine months ended September 30, 2018,2022, the maximum outstanding borrowings at any time were $74approximately $190 million and $420$280 million, respectively, and the average daily balances were approximately $22$143 million and $147$176 million, respectively, and therespectively. EQM incurred interest at weighted average annual interest rates of approximately 4.8% and 3.8% for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2022, commitment fees of $2.3 million and $6.1 million, respectively, were 3.7%paid to maintain credit availability under the Amended EQM Credit Facility. As of September 30, 2023, no term loans were outstanding under the Amended EQM Credit Facility.
See Note 10 for a discussion of the Fourth Amendment (as defined in Note 10) to the Amended EQM Credit Facility.
Eureka Credit Facility. On May 13, 2021, Eureka Midstream, LLC (Eureka) entered into a $400 million senior secured revolving credit facility withSumitomo Mitsui Banking Corporation, as administrative agent, the lenders party thereto from time to time and 3.2%any other persons party thereto from time to time (the 2021 Eureka Credit Facility). On March 29, 2023, Eureka entered into an amendment (the First Eureka Amendment) to the 2021 Eureka Credit Facility. The First Eureka Amendment replaced the London Interbank Offered Rate with the Secured Overnight Financing Rate as the benchmark rate for borrowings, including a credit spread adjustment of 0.10% for all applicable interest periods, as well as for daily swing line borrowings. Any reference to the 2021 Eureka Credit Facility as of any particular date shall mean the 2021 Eureka Credit Facility as in effect on such date.
As of September 30, 2023, and December 31, 2022, Eureka had approximately $315 million and $295 million, respectively, of borrowings outstanding under the 2021 Eureka Credit Facility. For the three and nine months ended September 30, 2023, the
16
Table of Contents

maximum amount of outstanding borrowings under the 2021 Eureka Credit Facility at any time were approximately $315 million, the average daily balances were approximately $315 million and $307 million, respectively, and Eureka incurred interest at weighted average annual interest rates of approximately 8.0% and 7.6%, respectively. For the three and nine months ended September 30, 2023, commitment fees of $0.1 million and $0.3 million, respectively, were paid to maintain credit availability under the 2021 Eureka Credit Facility. For the three and nine months ended September 30, 2022, the maximum amount of outstanding borrowings under the 2021 Eureka Credit Facility at any time was approximately $295 million, the average daily balances were approximately $290 million and $296 million, respectively, and Eureka incurred interest at weighted average annual interest rates of approximately 4.8% and 4.3%, respectively. For the three and nine months ended September 30, 2022, commitment fees of $0.1 million and $0.4 million, respectively, were paid to maintain credit availability under the 2021 Eureka Credit Facility.
See Note 10 for a discussion of the Second Eureka Amendment (as defined in Note 10) to the 2021 Eureka Credit Facility.
2023 Senior Notes Redemption. On June 21, 2023 (the Redemption Date), EQM redeemed in full its remaining outstanding 4.75% Senior Notes due 2023 (the 2023 Notes) in the aggregate principal amount of $98.9 million, pursuant the Indenture, dated as of August 1, 2014, by and between EQM, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (BNYMTC), as trustee, as supplemented by that certain Third Supplemental Indenture, dated as of June 25, 2018, by and between the EQM and BNYMTC, at a redemption price equal to 100% of the principal amount of the 2023 Notes, plus accrued and unpaid interest to, but not including, the Redemption Date. Upon the redemption by EQM of the 2023 Notes, the Third Supplemental Indenture was discharged and ceased to be of further effect except as to rights thereunder. EQM utilized cash on hand to effect payment of the redemption on the Redemption Date.
2022 Senior Notes. On June 7, 2022, EQM completed a private offering of $500 million aggregate principal amount of new 7.50% senior notes due 2027 (the 2027 Notes) and $500 million aggregate principal amount of new 7.50% senior notes due 2030 (the 2030 Notes and, together with the 2027 Notes, the 2022 Senior Notes) and received net proceeds from the offering of approximately $984.5 million inclusive of a discount of approximately $12.5 million and debt issuance costs of approximately $3.0 million.
EQM used the net proceeds from the offering of the 2022 Senior Notes and cash on hand to purchase (i) an aggregate principal amount of approximately $501.1 million of its then outstanding 2023 Notes pursuant to a tender offer for any and all of the outstanding 2023 Notes (the Any and All Tender Offer) and an open market purchase following the expiration of the Any and All Tender Offer, and (ii) an aggregate principal amount of $300 million of its outstanding 6.00% notes due 2025 (2025 Notes), and an aggregate principal amount of $200 million of its outstanding 4.00% notes due 2024 (2024 Notes), pursuant to tender offers (the Maximum Tender Offers, together with the Any and All Tender Offer, the 2022 Tender Offers) for the 2025 Notes and 2024 Notes, which such Maximum Tender Offers reflected a maximum aggregate principal amount of 2025 Notes and 2024 Notes to be purchased of $500 million (such amount, the Aggregate Maximum Principal Amount).
2022 Tender Offers. On June 6, 2022, the Any and All Tender Offer expired and, on June 7, 2022 and June 9, 2022, EQM purchased an aggregate principal amount of approximately $496.8 million of 2023 Notes at an aggregate cost of approximately $506.7 million pursuant to the Any and All Tender Offer. On June 10, 2022, which was after the closing of the Any and All Tender Offer, EQM also repurchased an aggregate principal amount of approximately $4.3 million of 2023 Notes in the open market at an aggregate cost of approximately $4.4 million. On June 13, 2022, which was the early tender deadline for the Maximum Tender Offers, the Aggregate Maximum Principal Amount was fully subscribed by the 2024 Notes and 2025 Notes then tendered, and, on June 14, 2022, EQM purchased an aggregate principal amount of $200 million of 2024 Notes and $300 million of 2025 Notes at an aggregate cost of approximately $509 million (inclusive of the applicable early tender premium for the 2024 Notes and 2025 Notes described in that certain Offer to Purchase of EQM dated May 31, 2022, as amended).
During the nine months ended September 30, 2022, the Company incurred a loss on extinguishment of debt of approximately $24.9 million related to the payment of the 2022 Tender Offers and open market repurchase premiums and fees, and write off of the respective unamortized discounts and financing costs associated with the purchase of portions of 2023, 2024 and 2025 Notes in the 2022 Tender Offers. This amount is included in the loss on extinguishment of debt line on the statements of consolidated comprehensive income.
As of September 30, 2023, EQM and Eureka were in compliance with all debt provisions and covenants.
7.    Fair Value Measurements
Assets Measured at Fair Value on a Recurring Basis. The Company records derivative instruments at fair value on a gross basis in its consolidated balance sheets. The EQT Global GGA provides for potential cash bonus payments payable by EQT to the Company during the period beginning on the first day of the calendar quarter in which the MVP full in-service date occurs
17

through the calendar quarter ending December 31, 2024 (the Henry Hub cash bonus payment provision). The potential cash bonus payments are conditioned upon the quarterly average of certain Henry Hub natural gas prices exceeding certain price thresholds. The Henry Hub cash bonus payment provision is accounted for as a derivative instrument and recorded at its estimated fair value using a Monte Carlo simulation model. Significant inputs used in the fair value measurement include NYMEX Henry Hub natural gas futures prices as of the date of valuation, probability-weighted assumptions regarding MVP project completion, risk-free interest rates based on U.S. Treasury rates, expected volatility of NYMEX Henry Hub natural gas futures prices and an estimated credit spread of EQT. The probability-weighted assumptions regarding MVP project completion utilizing internally developed methodologies, and the expected volatility of NYMEX Henry Hub natural gas futures prices, used in the valuation methodology represent significant unobservable inputs causing the Henry Hub cash bonus payment provision to be designated as a Level 3 fair value measurement. An expected average volatility of approximately 50.0% was utilized in the valuation model, which is based on market-quoted volatilities of relevant NYMEX Henry Hub natural gas forward prices.
As of September 30, 2023, the fair value of the Henry Hub cash bonus payment provision was $30.4 million, of which $25.3 million was recorded in other current assets and $5.1 million was recorded in other assets on the Company's consolidated balance sheets. As of December 31, 2022, the fair value of the Henry Hub cash bonus payment provision was $23.0 million which was recorded in other assets on the Company's consolidated balance sheets. During the three and nine months ended September 30, 2017,2023, the maximum outstanding borrowings for each period were $177 million, the average daily balances were approximately $95Company recognized a loss of $3.4 million and $32a gain of $7.5 million, respectively, and the weighted average annual interest rates for each period were 2.7%.
EQM 364-Day Facility. As of September 30, 2018, EQM had a $500 million, 364-day, uncommitted revolving loan agreement with EQT. Interest accrued on outstanding borrowings at an interest rate equal to the rate then applicable to similar loans under the EQM Facility, less the sum of (i) the then applicable commitment fee under the EQM Facility and (ii) 10 basis points.
EQM had no borrowings outstanding under the 364-Day Facility as of September 30, 2018 and December 31, 2017. Under the 364-Day Facility, there were no borrowings outstanding at any time during the three and nine months ended September 30, 2018. During2022, the three and nine months ended September 30, 2017, the maximum outstanding borrowings were $40Company recognized a loss of $0.8 million and $100a gain of $4.5 million, respectively, representing the average daily balances were approximately $11 million and $30 million, respectively, and the weighted average annual interest rates were 2.4% and 2.2%, respectively.
EQM Term Loan Facility. On April 25, 2018, EQM entered into a $2.5 billion unsecured multi-draw 364-day term loan facility with a syndicate of lenders (the EQM Term Loan Facility). The EQM Term Loan Facility was used to fund the cash consideration for the Drop-Down Transaction, to repay borrowings under the EQM Facility and for other general partnership purposes. In connection with EQM's issuancechange in estimated fair value of the EQM $2.5 Billion Senior Notes (defined below), on June 25, 2018,derivative instrument during the outstanding balance under the EQM Term Loan Facility was repaid and the EQM Term Loan Facility agreement was terminated. As a result of the termination, EQM expensed $3 million of deferred issuance costs. Under the EQM Term Loan Facility, from April 25, 2018 through June 25, 2018, the maximum outstanding borrowing was $1,825 million, the average daily balance was approximately $1,231 million, and the weighted average annual interest rate was 3.3%.
EQM $2.5 Billion Senior Notes. During the second quarter of 2018, EQM issued 4.750% senior notes due July 15, 2023respective periods, which in each case are recorded in other (expense) income, net in the aggregate principal amountCompany's statements of $1.1 billion, 5.500% senior notes due July 15, 2028 in the aggregate principal amount of $850 million and 6.500% senior notes due July 15, 2048 in the aggregate principal amount of $550 million (collectively, the EQM $2.5 Billion Senior Notes). EQM received net proceeds from the offering of $2,465.8 million, inclusive of a discount of $11.8 million and estimated debt issuance costs of $22.4 million. The net proceeds were used to repay the outstanding balances under the EQM Term Loan Facility and the RMP $850 Million Facility (defined below), and the remainder is expected to be used for general partnership purposes. The EQM $2.5 Billion Senior Notes were issued pursuant to new supplemental indentures to EQM's existing indenture dated August 1, 2014. The EQM $2.5 Billion Senior Notes contain covenants that limit EQM's ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of EQM's assets.consolidated comprehensive income.

18

Table of Contents



RMP $850 Million Facility. RM Operating LLC (formerly Rice Midstream OpCo LLC), a wholly-owned subsidiary of RMP, had an $850 million credit facility (the $850 Million Facility) that was terminated on July 23, 2018 in conjunction with the EQM-RMP Mergers. Prior to its termination, the $850 Million Facility was available for general partnership purposes, including to purchase assets, and to fund working capital requirements and capital expenditures, pay distributions and repurchase units. RM Operating LLC had $286 million of borrowings outstanding and $1 million of letters of credit outstanding under the $850 Million Facility as of December 31, 2017. Under the $850 Million Facility, for the period from July 1, 2018 through July 23, 2018, the maximum outstanding borrowing was $260 million, the average daily balance was approximately $249 million and the weighted average interest rate was 4.1%. For the period from January 1, 2018 through July 23, 2018, the maximum outstanding borrowing was $375 million, the average daily balance was approximately $300 million and the weighted average interest rate was 3.8%.
As of September 30, 2018, EQGP and EQM were in compliance with all debt provisions and covenants.
See Note 12 for discussion of the debt activity that occurred subsequent to September 30, 2018.
8.Fair Value Measurements
Owing to their short maturity, theOther Financial Instruments. The carrying values of cash and cash equivalents, accounts receivable amounts due to/from affiliates and accounts payable are assumed to approximate fair value; as such, their fairvalue due to the short maturity of the instruments. The carrying values are Level 1of borrowings under the Amended EQM Credit Facility and the 2021 Eureka Credit Facility approximate fair value measurements. Interestas the interest rates on credit facility borrowings are based on prevailing market rates, so the carrying values of the credit facilityrates. As EQM's borrowings approximate fair value and the fair values are Level 1 fair value measurements. As EQM'sunder its senior notes are not actively traded, their fair values are estimated using an income approach model that applies a discount rate based on prevailing market rates for debt with similar remaining time-to-maturity and credit risk; as such, their fair values are Level 2 fair value measurements. As of September 30, 2018 and December 31, 2017, the estimated fair value of EQM's senior notes was approximately $3,532 million and $1,006 million, respectively, and the carrying value of EQM's senior notes was approximately $3,455 million and $987 million, respectively. The fair value of the Preferred Interest is a Level 3 fair value measurement and is estimated using an income approach model that applies a market-based discount rate based on prevailing market rates and is a Level 3 fair value measurement.rate. As of September 30, 20182023, and December 31, 2017,2022, the estimated fair valuevalues of the Preferred Interest waswere approximately $122$88.5 million and $133$95.2 million, respectively, and the carrying values of the Preferred Interest were approximately $90.0 million and $94.3 million, respectively. As of September 30, 2023, the carrying value of the Preferred Interest exceeded its estimated fair value, which was approximately $116 millionconsidered temporary and $119 million, respectively.not material.
9.Cash Distributions
8.    Earnings Per Share
The following table summarizes cash distributions declared byCompany excluded 1,033 (in thousands) of weighted average anti-dilutive securities related to stock-based compensation awards from the Boardscomputation of Directorsdiluted weighted average common shares outstanding for the nine months ended September 30, 2023. The Company excluded 844 and 782 (in thousands) of weighted average anti-dilutive securities related to stock-based compensation awards from the EQGP General Partner and the EQM General Partner to their respective unitholderscomputation of diluted weighted average common shares outstanding for the three and nine months ended September 30, 2022, respectively. The Equitrans Midstream Preferred Shares were anti-dilutive to the computation of diluted weighted average common shares outstanding for all periods presented.
 EQGP Distribution EQM Distribution
Quarter Endedper Common Unit per Common Unit
2017   
March 31$0.191
 $0.89
June 300.21
 0.935
September 300.228
 0.98
December 310.244
 1.025
2018   
March 31$0.258
 $1.065
June 300.306
 1.09
September 30 (a)
0.315
 1.115
(a)On October 23, 2018, the Boards of Directors of the EQGP General Partner and the EQM General Partner declared cash distributions to their respective unitholders for the third quarter of 2018. On November 23, 2018, EQGP paid this cash distribution to its unitholders of record at the close of business on November 2, 2018. On November 14, 2018, EQM paid this cash distribution to its unitholders of record at the close of business on November 2, 2018.
The RMP General Partner declaredCompany grants Equitrans Midstream phantom units to non-employee directors that will be paid in Equitrans Midstream common stock upon the director's termination of service from the Company's Board of Directors. As there are no remaining service, performance or market conditions related to these awards, 819 and paid a $0.3049723 (in thousands) Equitrans Midstream phantom units were included in the computation of basic and $0.2917 cash distribution to RMP unitholdersdiluted weighted average common shares outstanding for the first quarterthree and nine months ended September 30, 2023, respectively, and 567 and 599 (in thousands) Equitrans Midstream phantom units were included in the computation of 2018basic and fourth quarter of 2017, respectively. As a result of the EQM-RMP Mergers, the RMP General Partner did not declare a cash distributiondiluted weighted average common shares outstanding for the second or third quarters of 2018.three and nine months ended September 30, 2022, respectively.

199.     Income Taxes

Table of Contents



10. Income Taxes
The Company's effective tax rate was 6.5%(9.2)% for the three months ended September 30, 20182023 compared to 16.2%0.1% for the three months ended September 30, 2017 and2022. The Company's effective tax rate was 6.5%(4.9)% for the nine months ended September 30, 2018,2023 compared to 16.3%(2.4)% for the nine months ended September 30, 2017. Excluding other items,2022. The Company calculates the provision for income taxes for interim periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (income (loss) before income taxes excluding unusual or infrequently occurring items) for the periods. The effective tax rate was lower for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022 and lower compared to the statutory rate for the three and nine months ended September 30, 2023 primarily due to the impact of projected AFUDC – equity on the MVP project and the impact of changes in the valuation allowance that
18
Table of Contents

limit tax benefits for the Company’s federal and state deferred tax assets. The effective tax rate for the three and nine months ended September 30, 2022 was lower than the statutory rate due to the increase in the valuation allowances that limit tax benefits for the Company’s federal and state deferred tax assets, primarily due to the impairment of the Company's equity method investment in the MVP Joint Venture and its impact on the loss before income taxes.
For the nine months ended September 30, 2023, the Company recorded unrecognized tax benefits and interest of $1.2 million. During the three months ended September 30, 2023, unrecognized tax benefits and interest decreased by approximately $1.0 million due to the expiration of statutes of limitation, which impacted the effective tax rates have been reduced becauserate. Interest on unrecognized tax benefits was $0.2 million for the nine months ended September 30, 2023, which was recorded as a component of income tax expense.
For the nine months ended September 30, 2023, the Company doesbelieves that it is more likely than not recordthat the benefit from a portion of its federal and state net operating loss (NOL) carryforwards, deferred tax assets related to interest disallowance under Internal Revenue Code Section 163(j), and certain state deferred tax assets, net of offsetting deferred tax liabilities, will not be realized and accordingly, the Company maintains related valuation allowances. For the nine months ended September 30, 2023, the Company recorded approximately $68.3 million income tax expense on the portionsbenefit related to changes in valuation allowances because of its income attributable to the noncontrolling limited partners of EQGPdecreases in federal and EQM and, for the period prior to May 1, 2018, attributable to Gulfport Midstream's 25% interest in Strike Force Midstream.
On December 22, 2017, the U.S. Congress enacted the Tax Cuts and Jobs Act of 2017 (the Tax Reform Legislation), which made significant changes to U.S. federal income tax law, including lowering the federal corporate tax rate to 21% from 35% beginning January 1, 2018. The Company is still analyzing certain aspects of the Tax Reform Legislation and refining calculations, which could potentially affect the measurement ofstate deferred tax balances or potentially give riseassets. As of September 30, 2023 and December 31, 2022, the valuation allowances related to newfederal and state deferred tax amounts. The Company will refine its estimates to incorporate new or better information as it becomes available through management's evaluation of EQT's 2017 U.S. income tax returns in the fourth quarter of 2018.
11. Consolidated Variable Interest Entities
EQGPassets were approximately $88.4 million and EQM are variable interest entities. Through the Company's ownership and control of the EQGP General Partner and control of the EQM General Partner, the Company has the power to direct the activities that most significantly affect EQGP's and EQM's economic performance,$156.7 million, respectively.
Through its limited partner interests in EQGP and EQM and through EQGP's general partner interest, limited partner interest and IDRs in EQM, the Company has the right to receive benefits from, as well as the obligation to absorb the losses of, EQGP and EQM.
As the Company is the primary beneficiary of and has a controlling financial interest in EQGP and EQM, the Company consolidates EQGP, which consolidates EQM. For additional information, including discussion of the key risks associated with EQGP's and EQM's operations, see Note 14 to the Company's annual combined consolidated financial statements included in the Registration Statement. In addition, for discussion of related party transactions, see Note 5 to both these financial statements and the Company's annual combined consolidated financial statements included in the Registration Statement.
The following table presents assets and liabilities included in the Company's condensed combined consolidated balance sheets that were for the use or obligation of EQGP or EQM.
 September 30, 2018 December 31, 2017
 (Thousands)
ASSETS 
  
Cash and cash equivalents$6,062
 $2,857
Accounts receivable58,358
 28,804
Accounts receivable — affiliate167,481
 103,304
Other current assets9,394
 12,877
Net property, plant and equipment5,608,358
 2,804,059
Investment in unconsolidated entity1,300,430
 460,546
Goodwill1,384,872
 —
Net intangible assets586,500
 —
Other assets146,685
 137,178
LIABILITIES   
Accounts payable$134,027
 $47,042
Due to affiliate44,285
 33,206
Capital contribution payable to the MVP Joint Venture463,733
 105,734
Accrued interest46,165
 10,926
Accrued liabilities16,401
 16,871
Credit facility borrowings22,000
 180,000
EQM Senior notes3,455,296
 987,352
Regulatory and other long-term liabilities31,010
 20,273

20

Table of Contents



The following table summarizes EQGP and EQM's statements of condensed combined consolidated operations and cash flows, inclusive of affiliate amounts.
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Operating revenues$364,584
 $206,293
 $1,110,307
 $603,180
Operating expenses133,665
 61,134
 370,880
 173,226
Other expenses23,534
 2,752
 37,632
 7,005
Net income$207,385
 $142,407
 $701,795
 $422,949
        
Net cash provided by operating activities$422,938
 $159,911
 $863,009
 $479,566
Net cash used in investing activities$(575,624) $(117,637) $(2,252,293) $(324,936)
Net cash (used in) provided by financing activities$(536,246) $(48,128) $1,340,446
 $(208,150)
12.10.     Subsequent Events
Separation and Distribution
On November 12, 2018, Equitrans Midstream, EQT and, for certain limited purposes, EQT Production Company entered into a separation and distribution agreement (the Separation and Distribution Agreement), pursuant to which, among other things, EQT effected the Separation, including the transfer of certain assets and liabilities to the Company, and to distribute 80.1% of the shares of outstanding common stock of Equitrans Midstream to EQT shareholders of record as of the close of business on November 1, 2018, the record date for the Distribution. The Distribution was effective at 11:59 p.m., Eastern Time, on November 12, 2018. As a result of the Distribution, Equitrans Midstream is now an independent public company and its common stock is listed under the ticker symbol ETRN on the New York Stock Exchange.
Following the Distribution, and based on the 254.6 million shares of outstanding common stock of EQT (EQT Common Stock) as of the record date for the Distribution, there were 254.3 million shares of common stock, no par value, of Equitrans Midstream (Equitrans Midstream Common Stock) outstanding, of which 50.6 million, or 19.9%, comprised the Retained Interest.
Transition Services Agreement
On November 12, 2018, in connection with the Separation and Distribution, Equitrans Midstream and EQT entered into a transition services agreement (the Transition Services Agreement). Pursuant to the Transition Services Agreement, each party agreed to provide certain services to the other on an interim, transitional basis, including services related to information technology and the administration of certain employee benefits as well as other administrative services. The Transition Services Agreement will terminate on the expiration of the term of the last service provided under it, which will generally be up to 12 months following the Distribution, subject to each party's right to terminate a service prior to the scheduled expiration date.
Tax Matters Agreement
On November 12, 2018, in connection with the Distribution, Equitrans Midstream and EQT entered into a Tax Matters Agreement that governs the parties' respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution and certain related transactions to qualify as generally tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation with respect to tax matters.
In addition, the Tax Matters Agreement imposes certain restrictions on the Company and its subsidiaries, including restrictions on share issuances, business combinations, sales of assets and similar transactions, that are designed to preserve the tax-free status of the Distribution and certain related transactions. Subject to certain exceptions described in the Tax Matters Agreement, the Tax Matters Agreement prohibits the Company and, where applicable, its subsidiaries, from the following:
merging with another entity;
liquidating or partially liquidating;

21

Table of Contents



in a single transaction or series of transactions, selling or transferring: (i) all or substantially all of the assets that were transferred to the Company in certain pre-Distribution transactions or all or substantially all of the assets of EQM, EQGP or their respective subsidiaries; (ii) 50% or more of the Company's gross operating assets; or (iii) 30% or more of the Company's consolidated gross assets;
issuing any stock (other than stock as compensation or stock pursuant to a retirement plan);
redeeming or repurchasing any stock (except for open market repurchases of less than 20% of Equitrans Midstream Common Stock in the aggregate);
amending its certificate of incorporation to affect its shareholders' voting rights;
causing or permitting the issuance, redemption, reclassification or transfer of any equity interest of EQGP or EQM, directly or indirectly, or taking any other action that would cause the Company to hold less than a 35% interest, directly or indirectly through EQGP, in each of the profit, loss and capital in EQM (taking into account the IDRs in EQM held by EQGP);
ceasing to provide "active and substantial management functions" to EQGP and EQM; or
taking any other action that would or reasonably could be expected to jeopardize the intended tax treatment of the Distribution and related transactions.
The Tax Matters Agreement provides special rules that allocate tax liabilities in the event that the Distribution, together with certain related transactions, is not tax-free. In general, under the Tax Matters Agreement, each party is expected to be responsible for any taxes, whether imposed on the Company or EQT, that arise from (i) the failure of the Distribution, together with certain related transactions, to qualify for tax-free treatment, or (ii) if certain related transactions were to fail to qualify for their intended tax treatment, in each case, to the extent that the failure to qualify is attributable to actions, events or transactions relating to such party's respective stock, assets or business or a breach of the relevant representations or covenants made by that party in the Tax Matters Agreement.
Employee Matters Agreement
On November 12, 2018, in connection with the Separation and Distribution, Equitrans Midstream and EQTOctober 5, 2023, Eureka entered into an employee matters agreementamendment (the Employee Matters Agreement). PursuantSecond Eureka Amendment) to the Employee Matters Agreement,2021 Eureka Credit Facility. The Second Eureka Amendment extended the Company and EQT allocated liabilities and responsibilities relatedstated maturity date of the 2021 Eureka Credit Facility, with such extension only applicable for the lenders approving the Second Eureka Amendment, from November 13, 2024 to employment and compensation and benefits matters and generally agreedNovember 13, 2025.
On October 6, 2023 (the Fourth Amendment Date), EQM entered into an amendment (the Fourth Amendment) to the Company's assumption of liabilities associated with employees transferred from EQT toAmended EQM Credit Facility. The Fourth Amendment extended the Company in connection with the Separation and Distribution. The Company also agreed to establish certain retirement and welfare plans that mirrored similar plans in effect at EQT, and EQT and the Company agreed to the adjustment and replacement of equity compensation awards denominated in EQT Common Stock in part with awards respective to Equitrans Midstream Common Stock.
Rights Agreement
On November 13, 2018, the Board of Directors of Equitrans Midstream (the Board) declared a dividend of one preferred share purchase right (Right) for each outstanding share of Equitrans Midstream Common Stock and adopted a shareholder rights plan, as set forth in the rights agreement, dated as of November 13, 2018 (the Rights Agreement), by and between Equitrans Midstream and American Stock Transfer & Trust Company, LLC, as rights agent. The dividend was paid on November 23, 2018 to Equitrans Midstream shareholders of record asstated maturity date of the close of business onAmended EQM Credit Facility with such date.
The Rights Agreement was adopted to assist the Board in managing the period immediately following the Separation and Distribution, by protecting against creeping accumulations or other share acquisition activity that the Board believes would not be in the best interest of shareholders. The Rights Agreement works by imposing a significant penalty upon any person or group that acquires 10% (or 15% in the case of a 13G Investor, as defined in the Rights Agreement, or 20% in the case of EQT and a single permitted transferee of the Retained Interest) or more of the outstanding shares of Equitrans Midstream Common Stock without the approval of the Board. The Rights Agreement should not interfere with any merger or other business combination approved by the Board. The Rights Agreement is short term and will expire on March 31, 2019, unless earlier redeemed by the Company.
Upon certain triggering events, each Right would entitle the holder to purchase from the Company one one-hundredth (subject to adjustment) of one share of Series A Junior Participating Preferred Stock, without par value (Preferred Stock), of the Company at an exercise price of $100 (the Exercise Price) per one one-hundredth of a share of Preferred Stock. The following are the potential consequences of a person or group becoming an Acquiring Person, as defined in the Rights Agreement:

22

Table of Contents



Flip In. If a person or group becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may,extension only applicable for the Exercise Price, purchase shares of Equitrans Midstream Common Stock with a market value of $200, based onlenders approving the market price of Equitrans Midstream Common Stock priorFourth Amendment, from April 30, 2025 to such acquisition.
Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of the outstanding shares of Equitrans Midstream Common Stock, the Board may extinguish the Rights by exchanging one share of Equitrans Midstream Common Stock, or an equivalent security, for each Right other than the Rights held by the Acquiring Person.
Flip Over. If the Company is later acquired in a merger or similar transaction after the date that the Rights become exercisable, all holders of Rights, except the Acquiring Person may, for the Exercise Price, purchase shares of the acquiring corporation with a market value of $200 based on the market price of the acquiring corporation's stock prior to such transaction.
Simplification Transactions
Unit Purchases. On November 29, 2018, the Company entered into multiple unit purchase agreements (the Unit Purchase Agreements) with funds managed by Neuberger Berman Investment Adviser LP; Goldman Sachs Asset Management, L.P.; Cushing Asset Management, LP; Kayne Anderson Capital Advisors, L.P.; and ZP Energy Fund, L.P. (collectively, the Selling Unitholders). Pursuant to the Unit Purchase Agreements the Company agreed to purchase an aggregate of 12,763,292 EQGP common units for a purchase price of $20.00 per EQGP common unit (the Purchase Price), or $255.3 million in the aggregate (such transactions, the Unit Purchases).
The Unit Purchases are expected to close at 9:00 a.m., Eastern Time, on December 31, 2018, unless the Company delivers written notice to a Selling Unitholder no later than one calendar day prior to December 31, 2018 that specifies a later date (the later date being no more thanApril 30, days following December 31, 2018). Following the closing of all of the Unit Purchases, the Company will own 288,772,058 EQGP common units, representing approximately 95.5% ownership of the outstanding EQGP common units based on 302,470,474 EQGP common units outstanding on November 30, 2018.
Limited Call Right. Following the closing of a sufficient number of the Unit Purchases that would result in the Company and its affiliates owning more than 95% of the outstanding EQGP common units, the Company intends to purchase any and all remaining outstanding EQGP common units (other than the EQGP common units owned by the Company and its affiliates, including those acquired in the Unit Purchases) at a price per EQGP common unit not less than the Purchase Price pursuant to the exercise of the limited call right (the Limited Call Right) provided for in Section 15.1(a) of the Second Amended and Restated Agreement of Limited Partnership of EQGP, dated as of October 12, 2018.2026. After giving effect to the exercise of the Limited Call Right, the Company and its affiliates will own all of the outstanding EQGP common units. If one or more closings of the Unit Purchases do not occur such that the Company and its affiliates do not own more than 95% of the outstanding EQGP common units, the Company may not be able to exercise the Limited Call Right. For purposes of calculating the number of EQGP common units ownedextension contemplated by the CompanyFourth Amendment, EQM has aggregate commitments available under the Amended EQM Credit Facility of approximately $2.16 billion before October 31, 2023, approximately $1.55 billion in aggregate commitments available on and its affiliates, directorsafter October 31, 2023 and officers of the Companyprior to April 30, 2025, and EQGP are deemed notapproximately $1.45 billion in aggregate commitments available on and after April 30, 2025 and prior to be "affiliates."April 30, 2026.
Debt Commitment Letter. On November 28, 2018, the Company entered into a commitment letter (the Debt Commitment Letter) with Goldman Sachs Bank USA, Guggenheim Securities, LLC and certain financing sources party thereto (collectively, the Commitment Parties), pursuant to which the Commitment Parties have committed to provide the Company with a senior secured term loan B facility of up to an aggregate principal amount of $650 million (the Term Facility). The Term Facility will be available to the Company to finance, among other things, the Unit Purchases, the exercise of the Limited Call Right and the payment of associated fees and expenses, subject to customary conditions contained in the Debt Commitment Letter, including, without limitation, (a) the execution and delivery of definitive documentation, (b) the substantially concurrent consummation of the Unit Purchases and (c) since November 12, 2018, there not occurring a material adverse effect on the business, operations or financial condition of the Company and its subsidiaries, taken as a whole.
Proposed IDR Transaction. On November 30, 2018, the Company made a proposal to the Board of Directors of the EQM General Partner, conditioned upon completion of the Limited Call Right such that EQGP is a wholly-owned subsidiary of the Company, pursuant to which to the Company would exchange the IDRs and general partner units in EQM that it holds, directly or indirectly, for (a) newly-issued EQM common units, representing limited partner interests in EQM, and newly-issued payment-in-kind units (EQM PIK Units), representing limited partner interests in EQM, and (b) a non-economic general partner interest in EQM (the Proposed IDR Transaction). The Proposed IDR Transaction would be accomplished by merging a subsidiary of EQM with and into EQGP, with EQGP surviving as a wholly-owned subsidiary of EQM. In the merger, (i) the Company's non-economic general partner interest in EQGP would be exchanged for the non-economic general partner interest in EQM, (ii) the Company's economic interests in EQGP would be exchanged for a combination of EQM common units and EQM PIK Units and (iii) the IDRs and economic general partner interest in EQM held by EQGP would be cancelled. The


23
19

Table of Contents




aggregate number of EQM common units and EQM PIK Units issued by EQM in the Proposed IDR Transaction would be 95 million.
The EQM PIK Units would be a new class of units identical to EQM common units in all respects except that distributions on the EQM PIK Units would be paid through the issuance of additional EQM PIK Units. The EQM PIK Units would automatically convert into newly-issued EQM common units on a one-for-one basis, subject to adjustments for any unit split or combination or other similar transaction, at a date to be determined. The Proposed IDR Transaction is subject to negotiation with the Board of Directors of the EQM General Partner or its conflicts committee and there can be no assurances that the Proposed IDR Transaction is completed on the terms set forth herein or at all.
Related Party Transactions
Termination of EQGP's, EQM's and RMP's Omnibus Agreements with EQT. On November 12, 2018, EQT terminated the EQGP, EQM and RMP omnibus agreements described in Note 5. Certain indemnification obligations of EQT and EQM remain in effect following the termination, and the Company is generally responsibility for the surviving obligations of EQT under the Separation and Distribution Agreement.
EQGP Omnibus Agreement with Equitrans Midstream. On November 13, 2018, in connection with the Separation and Distribution, Equitrans Midstream, EQGP, the EQGP General Partner and, for certain limited purposes, EQM entered into an omnibus agreement (the EQGP Omnibus Agreement). Pursuant to the EQGP Omnibus Agreement, EQM agrees to provide a license for the Company's and EQGP's use of the name "Equitrans" and related marks in connection with EQGP's business; the Company agrees to perform centralized corporate general and administrative services for EQGP; and EQGP agrees to reimburse the Company for the expenses incurred by the Company in providing these general and administrative services.
EQM Omnibus Agreement with Equitrans Midstream. On November 13, 2018, in connection with the Separation and Distribution, Equitrans Midstream, EQM and the EQM General Partner entered into an omnibus agreement (the EQM Omnibus Agreement). Pursuant to the EQM Omnibus Agreement, EQM agrees to provide a license for the Company's use of the name "Equitrans" and related marks in connection with the Company's business; the Company agrees to perform centralized corporate general and administrative service for EQM; and EQM agrees to reimburse the Company for the expenses incurred by the Company in providing these general and administrative services.
EQM Secondment Agreement with Equitrans Midstream. On November 13, 2018, in connection with the Separation and Distribution, Equitrans Midstream, EQM and the EQM General Partner entered into a secondment agreement (the EQM Secondment Agreement). Pursuant to the EQM Secondment Agreement, available employees of Equitrans Midstream could be seconded to EQM to operate EQM's assets in exchange for EQM's reimbursement to the Company and its affiliates for the services provided by the seconded employees.
Investment in Unconsolidated Entity
See Note 6 for discussion of the capital call notices issued by the MVP Joint Venture to MVP Holdco.
As of November 30, 2018, EQM is required to provide a $345 million performance guarantee in favor of the MVP Joint Venture. The guarantee provides performance assurances of MVP Holdco's obligations to fund its proportionate share of the MVP construction budget.
Debt
Amendment to the EQM Facility. On October 31, 2018, EQM amended and restated the EQM Facility to increase the borrowing capacity under the facility from $1 billion to $3 billion and extend the term to October 2023. The amended and restated facility is available for general partnership purposes, including to purchase assets, and to fund working capital requirements and capital expenditures, pay distributions and repurchase units. Subject to satisfaction of certain conditions, the amended and restated credit facility has an accordion feature that allows EQM to increase the available borrowings under the facility by up to an additional $750 million. The amended and restated credit facility has a sublimit of up to $250 million for same-day swing line advances and a sublimit of up to $400 million for letters of credit.
Equitrans Midstream Credit Facility. On October 31, 2018, Equitrans Midstream entered into a credit facility agreement that provides for $100 million in borrowing capacity and matures in October 2023 (the Equitrans Midstream Credit Facility). The Equitrans Midstream Credit Facility is available for general corporate purposes and to fund ongoing working capital requirements. Subject to satisfaction of certain conditions, the Equitrans Midstream Credit Facility has an accordion feature that allows the Company to increase the available borrowings under the facility by up to an additional $200 million. The Equitrans Midstream Credit Facility has a sublimit of up to $25 million for same-day swing line advances and a sublimit of up to $15 million for letters of credit.

24

Table of Contents



Loans under the Equitrans Midstream Credit Facility are guaranteed by certain of the Company's subsidiaries (the Guarantors) that own limited partner interests in EQGP and EQM and are secured by a first priority security interest in the equity interests of the Guarantors owned by the Company and the limited partner interests of EQGP and EQM owned by the Guarantors.
The Equitrans Midstream Credit Facility contains various provisions that, if violated, could result in termination of the credit facility, early payment of amounts outstanding or similar actions. Significant covenants require maintenance of a permitted leverage ratio and limit restricted payments and transactions with affiliates. Significant events of default include insolvency, nonpayment of scheduled principal or interest obligations, change of control and cross-default related to the acceleration or default of certain other financial obligations. Under the Equitrans Midstream Credit Facility, the Company is required to maintain a consolidated leverage ratio of not more than 3.50 to 1.00, excluding the indebtedness of EQM and EQGP as Unrestricted Subsidiaries (as defined in the Equitrans Midstream Credit Facility agreement).
Termination of EQM 364-Day Facility. On November 12, 2018, EQT terminated the EQM 364-Day Facility.
Termination of EQGP Working Capital Facility with EQT. On November 12, 2018, EQGP repaid $3.2 million of borrowings outstanding under the Working Capital Facility and EQT terminated the Working Capital Facility.
EQGP Working Capital Facility with Equitrans Midstream. On November 13, 2018, Equitrans Midstream entered into a working capital loan agreement with EQGP (the EQGP Working Capital Facility), through which Equitrans Midstream agreed to make interest-bearing loans available in an aggregate principal amount not to exceed $20 million outstanding at any one time. The EQGP Working Capital Facility will mature on the earlier of October 31, 2023 or at least 90 days after the Company gives notice of termination.
Cash Distributions.See Note 9.

25

Table of Contents



EQUITRANS MIDSTREAM CORPORATION PREDECESSOR
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of financial condition and results of operations in conjunction with the consolidated financial statements, and the notes thereto, included elsewhere in this report.
CAUTIONARY STATEMENTS
The following discussion and analysis should be read in conjunction with Amendment No. 3 to the Equitrans Midstream Corporation Registration Statement on Form 10 dated October 24, 2018 and filed with the SEC on October 24, 2018 (as subsequently declared effective, the Registration Statement), including sections "Risk Factors," "Cautionary Statement Concerning Forward-LookingCautionary Statements" "Unaudited Pro Forma Condensed Combined Financial Statements," "Business," "Selected Historical Combined Consolidated Financial Data" and the Equitrans Midstream Predecessor audited annual combined consolidated financial statements for the period ended December 31, 2017 and the Equitrans Midstream Predecessor unaudited condensed combined consolidated financial statements for the period ended June 30, 2018.
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 (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended.amended (the Securities Act). 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"“aim,” “anticipate,” “approximate,” “aspire,” “assume,” “believe,” “budget,” “continue,” “could,” “design,” “estimate,” “expect,” “focused,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “pursue,” “scheduled,” “seek,” “should,” “strategy,” “strive,” “target,” “view,” “will,” or “would” 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" in "Management'sPart I, "Item 2. 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 Equitrans Midstream EQGP and EQM andCorporation (together with its subsidiaries, Equitrans Midstream or the Company), including the following and/or statements with respect thereto, as applicable:
•guidance regarding EQM'sand any changes in such guidance in respect of the Company’s gathering, transmission and storage and water services revenue and volume, growth; including the anticipated effects associated with the EQT Global GGA and related documents entered into with EQT;
•projected revenue (including from firm reservation fees) and volumes, gathering rates, deferred revenues, expenses and contract liabilities, and the effects on liquidity, leverage, projected revenue, deferred revenue and contract liabilities associated with the EQT Global GGA and the MVP project (including changes in timing for such project);
•the ultimate gathering MVC fee relief, and timing thereof, provided to EQT under the EQT Global GGA and related agreements;
•the Company's ability to de-lever and timing and means thereof;
•the ultimate financial, business, reputational and/or operational impacts resulting, directly or indirectly, from the Rager Mountain natural gas storage field incident;
•the weighted average contract life of gathering, transmission and storage contracts;
•infrastructure programs (including the targeted or ultimate timing, cost, capacity and sources of funding with respect to gathering, transmission and storage and water expansion projects);
•the cost to construct or restore right-of-way for, capacity of, shippers for, timing and durability of regulatory approvals and anticipatedconcluding litigation, final design (including project scope, expansions, extensions or refinements and capital related thereto), ability and timing to contract additional capacity on, mitigate emissions from, targeted in-service datedates of, and completion (including potential timing of such completion) of current, planned or in-service projects or assets, in each case as applicable;
•the effect of the Fiscal Responsibility Act of 2023 on the MVP Joint Venture's ability to complete the MVP project;
•the ability to achieve, and targeted timing for achieving, completion of the MVP project, risks related thereto, the realizability of the MVP performance award program, and the degree to which, if at all, the MVP Southgate projects; PSU Amendment (as defined in Note 5) fosters the Company completing the MVP project safely and in compliance with environmental standards;
•the targeted total MVP project cost and schedule, including the timing for contractual obligations to commence, and the ability to continue construction in the winter, potential receipt of in-service authorization, and the realizability of the perceived benefits of the MVP project;
•the realizability of all or any portion of the Henry Hub cash bonus payment provision of the EQT Global GGA;
20
Table of Contents

•the potential for future bipartisan support for, and the potential timing for, additional federal energy infrastructure permitting reform legislation to be enacted;
•the ultimate terms, partnerspartner relationships and structure of the MVP Joint Venture;Venture and ownership interests therein;
•the impact of changes in assumptions and estimates relating to the potential completion and full in-service timing of the MVP project (as well as changes in such timing) on, among other things, the fair value of the Henry Hub cash bonus payment provision of the EQT Global GGA, gathering rates, the amount of gathering MVC fee relief and the estimated transaction price allocated to the Company's remaining performance obligations under certain contracts with firm reservation fees and MVCs;
•the Company's ability to identify and complete opportunities to optimize its existing asset base and/or expansion projects in EQM'sthe Company's operating areas and in areas that would provide access to new markets; asset acquisitions, including EQM's
•the Company's ability to bring, and targeted timing for bringing, in-service the backbone of its mixed-use water system (and expansions thereto), and realize benefits therefrom in accordance with its strategy for its water services business segment;
•     the Company's ability to identify and complete asset acquisitions;acquisitions and other strategic transactions, including joint ventures, effectively integrate transactions into the expected growthCompany's operations, and achieve synergies, system optionality, accretion and other benefits associated with transactions, including through increased scale;
•     the potential for the MVP project, EQM's leverage, customer credit ratings changes, defaults, acquisitions, dispositions and financings to impact EQM's credit ratings and the potential scope of production volumes in EQM's areas of production;any such impacts;
•     the impacteffect and outcome of pendingcontractual disputes, litigation and other proceedings, including regulatory investigations and proceedings;
•     the potential effects of any consolidation of or effected by upstream gas producers, including acquisitions of midstream assets, whether in or outside of the Appalachian Basin;
•     the potential for, timing, amount and effect of future litigation;issuances or repurchases of the Company's securities;
•     the effects of conversion, if at all, of the Equitrans Midstream Preferred Shares;
•     the effects of seasonality;
•     expected cash flows, cash flow profile (and support therefor from certain contract structures) and MVCs, including those associated with the EQT Global GGA, and the potential impacts thereon of the commission and in-service timing (or absence thereof) and cost of the MVP project;
•     projected capital contributions and capital and operating expenditures, including the amount and timing of distributions,reimbursable capital expenditures, capital budget and sources of funds for capital expenditures;
•     the Company's ability to recoup replacement and related costs;
•     future dividend amounts, timing and rates;
•     statements regarding macroeconomic factors' effects on the Company's business, including expected increases;future commodity prices and takeaway capacity constraints in the structure andAppalachian Basin;
•     future decisions of customers in respect of production growth, curtailing natural gas production, timing of turning wells in line, rig and completion activity and related impacts on the Company's business, and the effect, if any, simplification ofon such future decisions should the midstream structureMVP be brought in-service, as well as the potential for increased volumes to addressflow to the IDRs, if pursuedCompany's gathering and implemented;transmission system to supply the amounts and timing of EQM's projected capital contributions and operating and capital expenditures, includingMVP following in-service;
•     the amount of capital expenditures reimbursable by EQT or the Company; the impact of commodity prices on EQM's business;Company's liquidity and financing position and requirements, including sources, availability and availability;sufficiency;
•     statements regarding future interest rates and/or reference rates and the potential impacts thereof;
•     the ability of the Company's subsidiaries (some of which are not wholly owned) to service debt under, and comply with the covenants contained in, their respective credit agreements;
•     expectations regarding natural gas and water volumes in the Company's areas of operations;
21
Table of Contents

•     the Company's ability to achieve anticipated benefits associated with the execution of the EQT Global GGA and other commercial agreements;
•     the Company's ability to position itself for a lower carbon economy, achieve, and create value from, its environmental, social and governance (ESG) and sustainability initiatives, targets and aspirations (including targets and aspirations set forth in its climate policy) and respond, and impacts of responding, to increasing stakeholder scrutiny in these areas;
•     the effectiveness of the Company's information technology and operational technology systems and practices to detect and defend against evolving cyberattacks on United States critical infrastructure;
•     the effects and associated cost of compliance with existing or new government regulation;regulations including any quantification of potential impacts of regulatory matters related to climate change on the Company; and
•     future tax rates, status and 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. Equitrans MidstreamThe Company has based these forward-looking statements on management's current expectations and assumptions about future events. While Equitrans Midstreamthe Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, judicial, construction and other risks and uncertainties, many of which are difficult to predict and are beyond Equitrans Midstream's control.the Company's control, including, as it pertains to the MVP project, risks and uncertainties such as the physical construction conditions, including steep slopes and any further unexpected geological impediments, continued crew availability and productivity realizable in the winter season, project opposition, the receipt of certain time of year and other variances and approvals, and potential winter weather. The risks and uncertainties that may affect the operations, performance and results of Equitrans Midstream's, EQGP's and EQM's businessesthe Company's business and forward-looking statements include, but are not limited to, those set forth under Part I, "Item 1A. Risk Factors" in the Registration Statement.Company's Annual Report on Form 10-K for the year ended December 31, 2022, as updated by this Quarterly Report on Form 10-Q, as applicable.
Any forward-looking statement speaks only as of the date on which such statement is made, and Equitrans Midstreamthe Company does not intend to correct or update any forward-looking statement, unless required by securities laws, whether as a result of new information, future events or otherwise. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
In reviewing any agreements incorporated by reference in or filed with this Quarterly Report on Form 10-Q, 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 Equitrans Midstream, EQGP or EQM. The agreements may contain representations and warranties by Equitrans Midstream, EQGP or 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 Equitrans Midstream or its affiliates as of the date they were made or at any other time.

26

Table of Contents



Management believes the assumptions underlying these financial statements are reasonable; however, as organizational structure and strategic focus dictate expenses incurred, the financial statements may not include all expenses that would have been incurred had the Company existed as a standalone, publicly traded corporation. Similarly, the financial statements may not reflect the results of operations, financial position and cash flows had the Company existed as a standalone, publicly traded corporation.
EXECUTIVE OVERVIEWExecutive Overview
Net income (loss) attributable to Equitrans Midstream common shareholders was $82.8$112.8 million, $0.26 per diluted share, for the three months ended September 30, 20182023 compared with $33.3to $(520.5) million, $(1.20) per diluted share, for the three months ended September 30, 2017.2022. The increase resulted primarily from higher gathering and water revenues andan impairment of the Company's equity method investment in the MVP Joint Venture incurred during the three months ended September 30, 2022, higher equity income partlyand higher income tax benefit, partially offset by higher operating expenses, net interest expense and net income attributable to noncontrolling interests.expenses.
Net income (loss) attributable to Equitrans Midstream common shareholders was $266.6$252.5 million, $0.58 per diluted share, for the nine months ended September 30, 20182023 compared with $100.0to $(393.8) million, $(0.91) per diluted share, for the nine months ended September 30, 2017.2022. The increase resulted primarily from higher gathering, water and transmission revenues and higheran impairment of the Company's equity income, partly offset by higher operating expenses, net income attributable to noncontrolling interests and net interest expense.
The following table reconcilesmethod investment in the differences between operating income attributable to EQM as reported in EQM's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2018 and 2017 and operating income attributable to Equitrans Midstream for the same period.
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Operating income attributable to EQM$233,500
 $145,702
 $745,166
 $432,298
Less:       
Selling, general and administrative503
 544
 1,874
 2,346
Transaction costs:       
Rice Merger transaction costs4,918
 3,876
 13,385
 5,396
EQM-RMP Mergers, Drop-Down Transaction and Separation transaction costs9,602
 —
 27,099
 —
Total transaction costs14,520
 3,876
 40,484
 5,396
Depreciation155
 —
 278
 —
Operating income attributable to Equitrans Midstream$218,322
 $141,282
 $702,530
 $424,556
Selling, General and Administrative Expense. The Company and EQGP incur selling, general and administrative expenses separate from and in addition to similar costsMVP Joint Venture incurred by EQM. These expenses included allocations from EQT for compensation, centralized general and administrative services and auditing, legal and regulatory fees.
Transaction Costs. Transaction costs represent selling, general and administrative expenses related to the Rice Merger, the EQM-RMP Mergers, the Drop-Down Transaction and the Separation and included charges allocated to Equitrans Midstream from EQT of $11.0 million and $3.9 million for the three months ended September 30, 2018 and 2017, respectively, and $34.6 million and $5.4 million forduring the nine months ended September 30, 20182022, higher equity income, higher operating revenues, a loss on extinguishment of debt incurred during the nine months ended September 30, 2022 and 2017, respectively.higher income tax benefit, partially offset by higher operating expenses and higher interest expense.
In the course of its 2022 year-end process, the Company identified certain corrections in its previously issued unaudited interim consolidated financial statements primarily related to the accounting for the Henry Hub cash bonus payment provision. The Company determined that the related impact was not material and has revised its previously issued unaudited interim consolidated financial statements for the affected prior periods. See Note 1 for additional information.
In September 2023, the Company announced that, effective January 1, 2024, Mr. Thomas F. Karam will step down as Chief Executive Officer (CEO) of the Company and Diana M. Charletta, currently the Company’s President and Chief Operating Officer, will succeed Mr. Karam as CEO. Mr. Karam will remain with the Company as Executive Chairman. Also in September 2023, Mr. Karam was awarded and paid a $7.5 million bonus (Bonus) in express recognition of Mr. Karam’s relentless efforts towards navigating legal and regulatory setbacks to the MVP project, including, specifically, building consensus over a substantial period of time regarding the importance of the MVP project to the nation’s energy security and reliability with a variety of stakeholders, particularly with members of the United States Congress and the Biden Administration, which was
22
Table of Contents

reflected in the historic inclusion of provisions mandating the completion of the MVP project in the Fiscal Responsibility Act of 2023.
Business Segment Results
Operating segments are revenue-producing components of an 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. OtherHeadquarters costs consist primarily of certain unallocated corporate expenses and transaction costs, as applicable. Net interest expense, loss on extinguishment of debt, components of other income (expense), net interest expense and income tax expense (benefit) are managed on a combined consolidated basis. The Company has presented each segment's operating income (loss), other income (expense), net, equity income, impairment of equity method investment and various operational measures, as applicable, in the following sections. Management believes that the presentation of this information is useful to management and investors regarding the financial condition, results of operations and trends and uncertainties of its segments. The Company has reconciled each segment's operating income (loss) to the Company's condensed combined consolidated operating income (loss) and net income (loss) in Note 42.
Gathering Results of Operations
 Three Months Ended September 30,Nine Months Ended September 30,
20232022%
Change		20232022%
Change
(Thousands, except per day amounts)
FINANCIAL DATA
Firm reservation fee revenues (a)
$147,137 $144,730 1.7 $428,945 $415,932 3.1 
Volumetric-based fee revenues (b)
72,950 82,450 (11.5)212,088 256,352 (17.3)
Total operating revenues220,087 227,180 (3.1)641,033 672,284 (4.6)
Operating expenses:
Operating and maintenance23,799 27,855 (14.6)70,331 71,971 (2.3)
Selling, general and administrative30,365 21,717 39.8 88,319 60,051 47.1 
Depreciation48,585 49,125 (1.1)147,321 145,953 0.9 
Amortization of intangible assets16,204 16,204 — 48,614 48,614 — 
Total operating expenses118,953 114,901 3.5 354,585 326,589 8.6 
Operating income$101,134 $112,279 (9.9)$286,448 $345,695 (17.1)
Other (expense) income, net (c)
$(3,445)$2,904 (218.6)$7,477 $8,210 (8.9)
OPERATIONAL DATA   
Gathered volumes (BBtu per day)
Firm capacity (d)
5,628 5,125 9.8 5,399 5,199 3.8 
Volumetric-based services2,356 2,413 (2.4)2,198 2,600 (15.5)
Total gathered volumes7,984 7,538 5.9 7,597 7,799 (2.6)
Capital expenditures (e)
$67,551 $73,589 (8.2)$199,157 $195,925 1.6 
(a)For the three and nine months ended September 30, 2023, firm reservation fee revenues included approximately $1.8 million and $7.5 million, respectively, of MVC unbilled revenues. For the three and nine months ended September 30, 2022, firm reservation fee revenues included approximately $8.5 million and $17.4 million, respectively, of MVC unbilled revenues.
(b)For the nine months ended September 30, 2023, volumetric-based fee revenues included a one-time contract buyout by a customer for approximately $5.0 million.
(c)Other (expense) income, net includes the unrealized (loss) gain on derivative instruments associated with the Henry Hub cash bonus payment provision and gain on sale of gathering assets. See Note 7 for further information on the Henry Hub cash bonus payment provision.
(d)Includes volumes up to the financial statements.

contractual MVC under agreements structured with MVCs. Volumes in excess of the contractual MVC are reported under volumetric-based services.
27
23

Table of Contents




(e)Includes approximately $3.3 million and $11.5 million of capital expenditures related to the noncontrolling interest in Eureka Midstream for the three and nine months ended September 30, 2023, respectively, and includes approximately $5.9 million and $17.6 million of capital expenditures related to such noncontrolling interest for the three and nine months ended September 30, 2022, respectively.
GATHERING RESULTS OF OPERATIONS
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 %
Change		 2018 2017 %
Change
FINANCIAL DATA(Thousands, except per day amounts)
Firm reservation fee revenues$112,598
 $104,772
 7.5 $334,233
 $300,901
 11.1
Volumetric based fee revenues:           
Usage fees under firm contracts(a)
8,661
 7,873
 10.0 30,725
 19,173
 60.3
Usage fees under interruptible contracts(b)
131,602
 3,877
 3,294.4 366,482
 10,922
 3,255.4
Total volumetric based fee revenues140,263
 11,750
 1,093.7 397,207
 30,095
 1,219.8
Total operating revenues252,861
 116,522
 117.0 731,440
 330,996
 121.0
Operating expenses:           
Operating and maintenance18,850
 10,104
 86.6 54,551
 30,737
 77.5
Selling, general and administrative20,363
 10,503
 93.9 62,665
 28,800
 117.6
Depreciation25,359
 9,983
 154.0 72,309
 28,398
 154.6
Amortization of intangible assets10,387
 —
 100.0 31,160
 —
 100.0
Total operating expenses74,959
 30,590
 145.0 220,685
 87,935
 151.0
Operating income$177,902
 $85,932
 107.0 $510,755
 $243,061
 110.1
            
OPERATIONAL DATA 
  
        
Gathered volumes (BBtu per day)           
Firm capacity reservation2,114
 1,838
 15.0 2,029
 1,783
 13.8
Volumetric based services(c)
4,437
 370
 1,099.2 4,291
 292
 1,369.5
Total gathered volumes6,551
 2,208
 196.7 6,320
 2,075
 204.6
            
Capital expenditures$194,477
 $48,182
 303.6 $515,072
 $150,728
 241.7
(a)Includes fees on volumes gathered in excess of firm contracted capacity.
(b)Includes fees from contracts under which EQM has agreed to hold capacity available but for which it does not receive a capacity reservation fee.
(c)Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity.
Three Months Ended September 30, 20182023 Compared to Three Months Ended September 30, 20172022
Gathering operating revenues increaseddecreased by $136.3$7.1 million for the three months ended September 30, 20182023 compared to the three months ended September 30, 2017, driven primarily by revenue earned by RMP and the Drop-Down Entities, which came under common control of the Company on November 13, 2017, and by affiliate and third-party production development in the Marcellus and Utica Shales.2022. Firm reservation fee revenues increased primarily as a result of increased affiliate contracted gathering capacity and higher rates on various affiliate wellhead expansion projects in the current period. Usage fees under firm contracts increasedby $2.4 million due to increased third-party volumes gathered in excess of firm contracted capacity. The increase in usage fees under interruptible contracts was drivenVolumetric-based fee revenues decreased by $9.5 million primarily by revenue earned by RMP and the Drop-Down Entities of $69.7 million and $58.4 million, respectively.due to lower effective rates.
Gathering operating expenses increased by $44.4$4.1 million for the three months ended September 30, 20182023 compared to the three months ended September 30, 2017, driven2022. Selling, general and administrative expenses increased by $8.6 million largely due to higher personnel costs primarily attributable to the Bonus. The increase in selling, general and administrative expenses is partially offset by expenses incurred by RMP and the Drop-Down Entities of $17.9 million and $24.5 million, respectively. In addition,a decrease in operating and maintenance expense increasedexpenses of $4.1 million primarily due to higherlower operating expenses associated with the divestiture of the regulated low pressure gathering assets in June 2023 and lower repairs and maintenance expense, consistentpartially offset by higher personnel costs.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Gathering operating revenues decreased by $31.3 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Firm reservation fee revenues increased by $13.0 million primarily due to $17.1 million of higher firm reservation fees associated with the growthEQT Global GGA due to assumption changes impacting the estimated total consideration in the prior year and increased contracted capacity, partially offset by lower average rates on a certain customer MVC. Volumetric-based fee revenues decreased by $44.3 million primarily due to lower gathered volumes resulting from reduced producer activity and lower effective rates, partially offset by a one-time contract buyout by a customer of approximately $5.0 million.
Gathering operating expenses increased by $28.0 million for the business.nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Selling, general and administrative expenseexpenses increased by $28.3 million primarily due to transactionhigher personnel costs primarily attributable to expenses associated with the MVP PSU Program that included a cumulative catch-up of $2.2 million.$8.4 million since the inception of the award and the Bonus. Operating and maintenance expenses decreased by $1.6 million primarily due to lower repairs and maintenance expenses, lower operating expenses associated with the divestiture of the regulated low pressure gathering assets in June 2023, partially offset by higher personnel costs and higher property taxes. Depreciation expense increased by $1.4 million as a result of additional assets placed in-service. Amortization
See "Outlook" for discussions of intangible assets relatesthe EQT Global GGA, and the transactions related thereto, including periodic gathering MVC fees declines even if MVP would not achieve full in-service. Additionally, as discussed in "Outlook," in connection with MVP full in-service the EQT Global GGA provides for more significant potential gathering MVC fees declines in certain contract years. Firm reservation fee revenues under the Company’s Hammerhead gathering agreement with EQT are expected to contribute to an increase in the Drop-Down Entities'Company’s firm reservation fee revenues following achievement of the Hammerhead pipeline full commercial in-service in conjunction with full MVP in-service. However, the percentage of the Company's operating revenues that are generated by firm reservation fees may vary year to year depending on various factors, including customer contract intangible.

volumes and the rates realizable under the Company’s contracts, including the EQT Global GGA. See also "Commodity Price Risk" in Part I, "Item 3. Quantitative and Qualitative Disclosures About Market Risk" of this Quarterly Report on Form 10-Q for additional information on factors that could affect the Company's operating revenues. Also, see Note 5 for further discussion on the MVP PSU Program.
28
24

Table of Contents




Transmission Results of Operations
 Three Months Ended September 30,Nine Months Ended September 30,
 20232022%
Change		20232022%
Change
(Thousands, except per day amounts)
FINANCIAL DATA
Firm reservation fee revenues$82,508 $84,584 (2.5)$266,477 $272,129 (2.1)
Volumetric-based fee revenues (a)
16,067 6,973 130.4 63,544 21,301 198.3 
Total operating revenues98,575 91,557 7.7 330,021 293,430 12.5 
Operating expenses:
Operating and maintenance13,559 4,143 227.3 42,305 15,973 164.9 
Selling, general and administrative15,204 9,428 61.3 42,739 26,270 62.7 
Depreciation14,004 13,909 0.7 41,796 41,707 0.2 
Total operating expenses42,767 27,480 55.6 126,840 83,950 51.1 
Operating income$55,808 $64,077 (12.9)$203,181 $209,480 (3.0)
Equity income$73,810 $48 153,670.8 $97,618 $91 107,172.5 
Impairment of equity method investment$— $(583,057)100.0 $— $(583,057)100.0 
OPERATIONAL DATA   
Transmission pipeline throughput (BBtu per day)
Firm capacity reservation3,496 3,058 14.3 3,351 3,082 8.7 
Volumetric-based services14 65 (78.5)15 41 (63.4)
Total transmission pipeline throughput3,510 3,123 12.4 3,366 3,123 7.8 
Average contracted firm transmission reservation commitments (BBtu per day)3,515 3,748 (6.2)3,765 4,009 (6.1)
Capital expenditures (b)
$31,332 $12,429 152.1 $54,896 $22,994 138.7 
(a)For the nine months ended September 30, 2023, volumetric-based fee revenues included a one-time contract buyout by a customer for approximately $23.8 million.
(b)Transmission capital expenditures do not include aggregate capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $209.9 million and $280.5 million for the three and nine months ended September 30, 2023, respectively, and $46.4 million and $158.2 million for the three and nine months ended September 30, 2022, respectively.
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Transmission operating revenues increased by $7.0 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Firm reservation fee revenues decreased by $2.1 million primarily due to lower contracted capacity payments resulting from the one-time contract buyout that occurred during the first quarter of 2023. Volumetric-based fee revenues increased $9.1 million primarily as a result of increased throughput volumes.
Operating expenses increased by $15.3 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022. Operating and maintenance expense increased $9.4 million primarily due to lower sales of over-recovered gas to third parties and to the Gathering segment for replenishment gas on the regulated low pressure gathering assets which were divested in June 2023, expenses associated with the Rager Mountain natural gas storage field incident and higher repairs and maintenance expenses. Selling, general and administrative expenses increased by $5.8 million largely due to higher personnel costs primarily attributable to the Bonus and higher professional fees.
Impairment of equity method investment reflects the impairment of the Company's equity method investment in the MVP Joint Venture during the third quarter of 2022. See Note 4 for further information.
25
Table of Contents

Nine Months Ended September 30, 20182023 Compared to Nine Months Ended September 30, 20172022
GatheringTransmission operating revenues increased by $400.4$36.6 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 2017, driven primarily by revenue earned by RMP and the Drop-Down Entities, which came under common control of the Company on November 13, 2017, and by affiliate and third-party production development in the Marcellus and Utica Shales.2022. Firm reservation fee revenues decreased by $5.7 million primarily due to lower contracted capacity payments resulting from the one-time contract buyout included in volumetric-based fee revenues that occurred during the first quarter of 2023, partially offset by higher average reservation rates. Volumetric-based fee revenues increased $42.2 million primarily as a result of increased affiliate and third-party contracted gathering capacity and higher rates on various affiliate wellhead expansion projects in the current period. Usage fees under firm contracts increased due to increased third-party and affiliate volumes gathered in excessa one-time contract buyout by a customer of firm contracted capacity. The increase in usage fees under interruptible contracts was driven primarily by revenue earned by RMP and the Drop-Down Entities of $193.5approximately $23.8 million and $161.9 million, respectively.increased throughput volumes.
Gathering operatingOperating expenses increased by $132.8$42.9 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 2017, driven primarily by operating expenses incurred by RMP and the Drop-Down Entities of $53.2 million and $72.8 million, respectively. In addition, operating2022. Operating and maintenance expense increased $26.3 million primarily due to lower sales of over-recovered gas to third parties and to the Gathering segment for replenishment gas on the regulated low pressure gathering assets which were divested in June 2023, expenses associated with the Rager Mountain natural gas storage field incident, increased personnel costs, and higher repairs and maintenance expense consistent with the growth of the business.expenses, partially offset by lower property taxes. Selling, general and administrative expenseexpenses increased $16.5 million resulting primarily from higher personnel costs primarily due to transactionexpenses associated with the MVP PSU Program that included a cumulative catch-up of $3.2 million since the inception of the award and the Bonus, an increased reserve for bad debt expense and higher professional fees.
Impairment of equity method investment reflects the impairment of the Company's equity method investment in the MVP Joint Venture during the third quarter of 2022. See Note 4 for further information.
In August 2023, the root cause analysis, which was conducted by an independent, third-party company with expertise in reservoir management and well and corrosion engineering, was submitted to the PHMSA, which root cause analysis indicated that the direct cause of the venting from the relevant Rager Mountain facility storage well (well #2244) was due to corrosion caused by the infiltration of water, oxygen and debris into the well's annulus, and such corrosion resulted in a failure of the well casing. Based on results of an inventory verification test conducted after the venting incident was resolved, the Company’s initial gas loss estimate for well #2244 was approximately 1.29 Bcf. Following completion of the root cause analysis, the cumulative gas loss was determined to be approximately 1.164 Bcf, approximately 1.037 Bcf of which was vented to the atmosphere and roughly 0.127 Bcf was diverted to and contained within formation(s) located at approximately 1,800’ and/or 3,000’ below ground. Post-incident workstreams related to the safe and environmentally responsible operation of the Rager Mountain facility and other storage fields are ongoing.
The Company worked with various third-party experts to identify and address the causes and/or contributors to the November 2022 incident. The damaged casing on well #2244 has been replaced, and the well remains temporarily plugged. It has not yet been determined whether the well will be permanently plugged or returned to service. Additionally, several other Rager wells have undergone top joint casing replacements to address proactively less-aggressive corrosion that was identified. The Company also has performed supplemental evaluations and testing, including updated wireline logging, on all other wells at the Rager Mountain facility. In October 2023, following authorization from PHMSA of the Company's injection plan for the Rager Mountain facility, the Company returned the Rager Mountain facility, other than well #2244 and two additional wells, to injection operations, subject to requirements specified in the consent agreement between the PHMSA and the Company. The Company is continuing and expects to continue to incur costs of $7.5 million. Depreciation expense increasedand expenses as a result of additional assets placed in-service, including those associated with the Range Resources header pipeline project and various wellhead gathering expansion projects. Amortization of intangible assets relatesor arising in relation to the Drop-Down Entities' customer contract intangible.
TRANSMISSION RESULTS OF OPERATIONS
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 %
Change		 2018 2017 %
Change
FINANCIAL DATA(Thousands, except per day amounts)
Firm reservation fee revenues$82,669
 $84,438
 (2.1) $262,666
 $256,224
 2.5
Volumetric based fee revenues:           
Usage fees under firm contracts(a)
5,331
 3,427
 55.6
 13,981
 9,787
 42.9
Usage fees under interruptible contracts1,350
 1,906
 (29.2) 8,782
 6,173
 42.3
Total volumetric based fee revenues6,681
 5,333
 25.3
 22,763
 15,960
 42.6
Total operating revenues89,350
 89,771
 (0.5) 285,429
 272,184
 4.9
Operating expenses:           
Operating and maintenance10,721
 9,485
 13.0
 27,082
 23,984
 12.9
Selling, general and administrative7,581
 8,255
 (8.2) 22,335
 23,170
 (3.6)
Depreciation12,357
 12,261
 0.8
 37,228
 35,793
 4.0
Total operating expenses30,659
 30,001
 2.2
 86,645
 82,947
 4.5
Operating income$58,691
 $59,770
 (1.8) $198,784
 $189,237
 5.0
            
Equity income$16,087
 $6,025
 167.0
 $35,836
 $15,413
 132.5
            
OPERATIONAL DATA 
  
  
      
Transmission pipeline throughput (BBtu per day)           
Firm capacity reservation2,927
 2,517
 16.3
 2,857
 2,288
 24.9
Volumetric based services(b)
104
 21
 395.2
 62
 22
 181.8
Total transmission pipeline throughput3,031
 2,538
 19.4
 2,919
 2,310
 26.4
            
Average contracted firm transmission reservation commitments (BBtu per day)3,658
 3,474
 5.3
 3,801
 3,519
 8.0
            
Capital expenditures$37,626
 $22,312
 68.6
 $84,517
 $73,679
 14.7
(a)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.

29

Table of Contents



(b)Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity.
Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017
incident and future costs and expenses would be reflected in the Company's future Transmission operating revenues decreasedresults. For additional information, see Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q. See also, "The November 2022 incident involving the venting of natural gas from a well at Equitrans, L.P.’s Rager Mountain natural gas storage facility required that we incur costs and expenses to halt such venting, and investigate and respond to the incident, including undertaking ongoing reviews of other storage assets. Activities and investigations responsive to the incident are ongoing, and, consequently, we are incurring and in the future we expect to incur further costs and expenses, whether resulting from or arising out of the incident, which could, depending on their scope and timing, materially adversely affect our business, financial condition, results of operations, liquidity and ability to pay dividends to our shareholders." included in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Equity income increased by $0.4$73.8 million for the three months ended September 30, 20182023 compared to the three months ended September 30, 2017. Firm reservation fee revenues decreased as a result of a third quarter 2017 FERC-approved retroactive negotiated rate adjustment of $3.42022 and $97.5 million for the period from October 1, 2016 through June 30, 2017, partly offset by increased affiliate firm capacity and higher contractual rates on existing contracts with third parties in the current period. Usage fees under firm contracts increased primarily due to higher affiliate and third-party volumes and increased commodity charges on higher firm contracted volumes. The decrease in usage fees under interruptible contracts primarily relates to lower parking revenue, which does not have associated pipeline throughput.
Transmission operating expenses increased by $0.7 million for the threenine months ended September 30, 20182023 compared to the threenine months ended September 30, 2017 primarily as a result of higher operating and maintenance personnel costs, partly offset by lower selling, general and administrative expenses that resulted from lower allocations from EQT and professional fees.
Equity income increased $10.1 million for the three months ended September 30, 2018 compared to the three months ended September 30, 20172022, respectively, due to the increase in the MVP Joint Venture's AFUDC on the MVP.MVP project resulting from the resumption of growth construction activities. The Company's equity income in future periods will continue to be affected by the MVP project growth construction activities and associated AFUDC, and the timing of the completion of the MVP project, and such impact could continue to be substantial. See Note 4, "Outlook" below and Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q for information on factors that have affected and/or, as applicable, could affect MVP project growth construction activities.
26
Table of Contents

Water Results of Operations
Three Months Ended September 30,Nine Months Ended September 30,
20232022%
Change		20232022%
Change
(Thousands, except MMgal amounts)
FINANCIAL DATA
Firm reservation fee revenues$11,029 $9,375 17.6 $29,793 $24,502 21.6 
Volumetric-based fee revenues8,823 3,639 142.5 32,473 12,292 164.2 
Total operating revenues19,852 13,014 52.5 62,266 36,794 69.2 
Operating expenses:
Operating and maintenance5,666 3,280 72.7 18,965 12,818 48.0 
Selling, general and administrative9,782 2,230 338.7 13,620 5,956 128.7 
Depreciation6,655 5,162 28.9 19,029 14,483 31.4 
Total operating expenses22,103 10,672 107.1 51,614 33,257 55.2 
Operating (loss) income$(2,251)$2,342 (196.1)$10,652 $3,537 201.2 
OPERATIONAL DATA
Water services volumes (MMgal)
Firm capacity reservation (a)
170 107 58.9 392 323 21.4 
Volumetric-based services188 96 95.8 707 358 97.5 
Total water volumes358 203 76.4 1,099 681 61.4 
Capital expenditures$9,574 $17,041 (43.8)$31,798 $49,132 (35.3)
(a)    Includes volumes up to the contractual MVC under agreements structured with MVCs or ARCs, as applicable. Volumes in excess of the contractual MVC are reported under volumetric-based services.
Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022
Water operating revenues increased by $6.8 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 as a result of increased volumetric-based fee revenues primarily due to higher volumes and higher average rates. Firm reservation fee revenues increased by $1.7 million primarily as a result of increased MVC revenues.
Water operating expenses increased by $11.4 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. Selling, general and administrative expense increased $7.6 million primarily due to a contract asset write-down. Operating and maintenance expense increased $2.4 million due to higher pipeline expenses and higher purchased water costs as a result of increased activity and higher mixed-use water storage expenses related to storage facilities placed in-service during 2023. Depreciation expense increased $1.5 million due to additional assets placed in-service.
Nine Months Ended September 30, 20182023 Compared to Nine Months Ended September 30, 20172022
TransmissionWater operating revenues increased by $13.2$25.5 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 2017.2022. Firm reservation fee revenues increased by $5.3 million primarily as a result of increased revenues associated with ARCs associated with the 2021 Water Services Agreement that commenced in March 2022. Volumetric-based fee revenues increased by $20.2 million primarily due to higher contractual rates on existing contracts with third partiesvolumes and affiliates in the current period and affiliates contracting for additional firm capacity. Usage fees under firm contracts increased primarily due to increased commodity charges. The increase in usage fees under interruptible contracts primarily relates to higher parking revenue, which does not have associated pipeline throughput.average rates.
TransmissionWater operating expenses increased by $3.7$18.4 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 20172022. Selling, general and administrative expense increased $7.7 million primarily due to a contract asset write-down. Operating and maintenance expense increased $6.1 million due to higher mixed-use water storage expenses related to storage facilities placed in-service during the nine months ended September 30, 2023 and higher purchased water costs resulting from increased activity. Depreciation expense increased by $4.5 million due to additional assets placed in-service.
The Company’s volumetric-based water services are directly associated with producers’ well completion activities and fresh and produced water needs (which are primarily driven by horizontal lateral lengths and the number of completion stages per well). Therefore, the Water volumetric operating results traditionally fluctuate from year-to-year in response to producers’ well
27
Table of Contents

completion activities. Firm reservation revenues are expected to be mostly consistent due to the ARC under the 2021 Water Services Agreement that became effective March 1, 2022. See "Outlook" for further discussion of the 2021 Water Services Agreement.
Other Income Statement Items
Other (Expense) Income, Net
Other (expense) income, net decreased by $5.5 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The decrease was primarily due to a $3.4 million unrealized loss on derivative instruments during the three months ended September 30, 2023, as compared to a $0.8 million unrealized loss on derivative instruments during the three months ended September 30, 2022, primarily due to the impact of changes in the targeted in-service date for the MVP project and changes in NYMEX Henry Hub natural gas futures prices associated with the growthHenry Hub cash bonus payment provision, as well as a $3.7 million gain on the sale of non-core gathering assets during the business.three months ended September 30, 2022.
EquityOther (expense) income, net increased $20.4by $0.5 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 20172022. The increase was primarily due to the increase in the MVP Joint Venture's AFUDCa $7.5 million unrealized gain on derivative instruments during the MVP.
WATER RESULTS OF OPERATIONS
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 %
Change		 2018 2017 %
Change
FINANCIAL DATA(Thousands)
Water service revenues$22,373
 $—
 100.0
 $93,438
 $—
 100.0
            
Operating expenses:           
Operating and maintenance18,521
 —
 100.0
 36,901
 —
 100.0
Selling, general and administrative1,094
 —
 100.0
 3,490
 —
 100.0
Depreciation5,851
 —
 100.0
 17,420
 —
 100.0
Total operating expenses25,466
 —
 100.0
 57,811
 —
 100.0
Operating (loss) income$(3,093) $—
 100.0
 $35,627
 $—
 100.0
            
OPERATIONAL DATA           
Water service volumes (MMgal)449
 —
 100.0
 1,740
 —
 100.0
            
Capital expenditures$7,981
 $—
 100.0
 $17,358
 $—
 100.0
Water provides fresh water for well completion operations in the Marcellus and Utica Shales and collects flowback and produced water for recycling or disposal. Substantially all of Water's services are provided to EQT's Upstream Business. Water offers its services on a volumetric basis, supported by an acreage dedication from EQT for certain drilling areas. The fee that Water charges per gallon of water is tiered and thus is lower on a per gallon basis once certain volumetric thresholds are met. During the three and nine months ended September 30, 2018, operating expenses were composed of2023, as compared to a $4.5 million unrealized gain on derivative instruments during the customary expenses

30

Table of Contents



for a water services business, including water procurement costs. The operating loss for the threenine months ended September 30, 2018 was2022, primarily due to timingchanges in probability-weighted assumptions regarding MVP project completion, as well as changes in NYMEX Henry Hub natural gas futures prices associated with the Henry Hub cash bonus payment provision and sublease income, partially offset by a $3.7 million gain on the sale of costsnon-core gathering assets during the nine months ended September 30, 2022.
See also "Outlook" for a discussion of factors affecting the estimated fair value of the derivative asset attributable to the Henry Hub cash bonus payment provision that is recognized in other income, net on the Company's statements of consolidated comprehensive income.
Loss on Extinguishment of Debt
During the nine months ended September 30, 2022, the Company incurred a loss on extinguishment of debt of approximately $24.9 million related to activities on drilling pads.
OTHER INCOME STATEMENT ITEMSthe 2022 Tender Offers for senior notes and open market repurchase premiums and fees, and write off of the respective unamortized discounts and financing costs associated with the purchase of portions of 2023, 2024 and 2025 Notes in such tender offers.
Net Interest Expense
Net interest expense increased by $26.7$5.2 million for the three months ended September 30, 20182023 compared to the three months ended September 30, 20172022 primarily due to increased interest expense of $33.7 million onrates and borrowings under the EQM $2.5 Billion Senior Notes, partlyrevolving credit facilities, partially offset by the redemption of the 2023 Notes effected in June 2023 and increased capitalized interest AFUDC – debt and interest income earned on cash on hand.income.
Net interest expense increased by $44.0$25.6 million for the nine months ended September 30, 20182023 compared to the nine months ended September 30, 20172022 primarily due to interest expense of $35.9 million on the EQM $2.5 Billion Senior Notes,senior notes issued in 2022 and increased interest rates and borrowings under EQM's and RMP'sthe revolving credit facilities, and recognitionpartially offset by the impact of the deferred issuance costs on the EQM Term Loan Facility, partly offset by increased capitalized interest, AFUDC – debt and interest income earned on cash on hand.2022 Tender Offers.
See Note 7 to the financial statements6 and Note 10 for a discussion of the EQM Term Loan Facility termination and the EQM $2.5 Billion Senior Notes issuance. See "Investing Activities" and "EQM Capital Requirements" under "Capital Resources and Liquidity" for discussion of capital expenditures.
Income Taxes
The Company's operations have been included in EQT's consolidated income tax return for federal and state tax purposes for all periods presented. As a result, the financial statements include the income taxes incurred by the Company computed on a separate return basis. EQM and EQGP are limited partnerships for U.S. federal and state income tax purposes and are not subject to U.S. federal or state income taxes. In addition, as of September 30, 2018, Rice Midstream Holdings LLC was a multi-member LLC and was not subject to U.S. federal or state income taxes. Post-Distribution, the Company is a corporation for U.S. federal and state income tax purposes and will prepare its own income tax provision.
On December 22, 2017, the U.S. Congress enacted the Tax Reform Legislation, which made significant changes to U.S. federal income tax law, including lowering the federal corporate tax rate to 21% from 35% beginning January 1, 2018. The Tax Reform Legislation contains several other provisions, such as limiting the utilization of net operating losses generated after December 31, 2017 that are carried into future years to 80% of taxable income and limitations on the deductibility of interest expense, which are not expected to have a material effect on the Company’s results of operations. As of December 31, 2017, the Company has not completed its accounting for the effectscertain of the Company's outstanding debt.
Income Tax Reform Legislation but has recorded provisional amountsExpense (Benefit)
See Note 9 for the revaluing of net deferred tax assets as well as the state income tax effects related to the Tax Reform Legislation. The Company also considered whether existing deferred tax amounts will be recovered in future periods under this legislation. However, the Company is still analyzing certain aspectsan explanation of the Tax Reform Legislation and refining calculations, which could potentially affect the measurement of deferred tax balances or potentially give rise to new deferred tax amounts. The Company will refine its estimates to incorporate new or better information as it becomes available through management's evaluation of EQT's 2017 U.S. income tax returnschanges in the fourth quarter of 2018.
All of EQGP's and EQM's income is included in the Company’s pre-tax income; however, the Company does not record income tax expense onfor the portions of its income attributablethree and nine months ended September 30, 2023 compared to the noncontrolling limited partners of EQGPthree and EQM and, for the period prior to May 1, 2018, to Gulfport Midstream. This reduces the Company's effective tax rate in periods when the Company has consolidated pre-tax income. Also, given that Rice Midstream Holdings was a multi-member limited liability company as ofnine months ended September 30, 2018, the Company was not required2022.
Net Income Attributable to record income tax expense on Rice Midstream Holdings' income.
Noncontrolling Interests
The publicly-held limited partnership interests in EQGP and EQM and, for the period prior to May 1, 2018, the 25% ownership interest in Strike Force Midstream owned by Gulfport Midstream resulted in net income allocations to noncontrolling interests in the statements of condensed combined consolidated operations. Net income attributable to noncontrolling interests fluctuates based on the amount of net income earned by the entities with noncontrolling interests, the amount of net income allocated to IDRs and any changes in the noncontrolling ownership percentages.Interest
Net income attributable to noncontrolling interests increasedinterest decreased by $0.7 million and $2.3 million for the three and nine months ended September 30, 2023, respectively, compared to the three and nine months ended September 30, 2022, respectively, as a result of higherlower net income as well as additional noncontrolling interests outstanding due to EQM equity offerings.on Eureka Midstream.
Capital Expenditures
See "Investing Activities" and "Capital Requirements" under "Capital Resources and Liquidity" for a discussion of capital expenditures.

expenditures and capital contributions.
31
28

Table of Contents




OUTLOOKOutlook
The Company's assets,strategically located in southwestern Pennsylvania, northern West Virginia and southeastern Ohio,assets overlay core acreage in the prolific Marcellus and Utica basin.Appalachian Basin. The location of the Company's assets allows itits producer customers to access major demand markets.markets in the U.S. The Company is currentlyone of the third largest natural gas gatherergatherers in the U.S., and its largest customer, EQT, iswas one of the number onelargest natural gas producerproducers in the U.S. Additionally,based on average daily sales volumes as of September 30, 2023 and EQT's public senior debt had investment grade credit ratings from Standard & Poor's Global Ratings (S&P), Fitch Ratings (Fitch) and Moody's Investors Service (Moody's) as of that date. During the nine months ended September 30, 2023, approximately 70% of the Company's operating revenues were generated from firm reservation fee revenues. Generally, the Company maintains a stableis focused on utilizing contract structures reflecting long-term firm capacity, MVC or ARC commitments which are intended to provide support to its cash flow profile, with over 50%profile. The percentage of its revenuethe Company's operating revenues that are generated by firm reservation charges.fees (as well as the Company's revenues generally) may vary year to year depending on various factors, including customer volumes and the rates realizable under the Company's contracts, including the EQT Global GGA which provides for periodic gathering MVC fees declines through January 1, 2028 (with the fees then remaining fixed throughout the remaining term), including if MVP would not achieve full in-service. Additionally, as discussed below, in connection with MVP full in-service the EQT Global GGA provides for more significant potential gathering MVC fees declines in certain contract years.
The Company's strategyprincipal strategic aim is to leverage its existing and planned growth projects to achieve thegreater scale and scope, enhance the durability of its financial strength and to continue to work to position itself for a top-tier midstream company. To do this,lower carbon economy, which the Company expects will first focus on buildingdrive future growth and completinginvestment. The Company’s strategy reflects its keycontinued pursuit of its organic growth projects, including particularly the MVP given the Company’s belief that the MVP will, among other benefits, allow for greater natural gas production in the southwestern Appalachian Basin (and/or result in increased volumes flowing to the Company's gathering and transmission system given the Company's belief in the system's current unique positioning to provide the supply path to MVP), focusing on identifying opportunities to use its existing assets to deepen and grow its customer relationships at optimized levels of capital spending and taking into account the Company's leverage, and continuing to prudently invest resources in its sustainability-oriented initiatives. The Company is also continuing to focus on maintaining and strengthening its balance sheet. Additionally, the Company periodically evaluates strategically aligned inorganic growth opportunities (whether within its existing footprint or to extend the Company's reach into the southeast United States and to become closer to key demand markets, such as the Gulf of Mexico LNG export market).
As part of its approach to organic growth, the Company is focused on its projects and assets outlined below, many of which are backedsupported by contracts with firm commitments. The Company expects to increase its percentage of firm reservation revenue to over 60% by the end of 2021, with the primary drivers of this growth described in detail below.
In addition to growth from firm projects, the Company expects growth from its water services business, volumetric gathering opportunities and interruptible transmission and storage services. The water service business is complementary to the gathering business, and the Company sees opportunity to expand the existing asset footprint and provide potential solutions for produced water handling. Additionally, the Company is focused on optimizing and integrating its Pennsylvania gathering systems. This will create additional system gathering capacity, and provide high- and low-pressure gathering solutions for its customers. These growth efforts, coupled with disciplined capital spending and operating cost control, will help the Company achieve its strategic goals.MVC or ARC commitments.
The Company expects that the following expansion projectsMVP (should it be placed in-service), together with the Hammerhead pipeline and Equitrans, L.P. Expansion Project (EEP), will primarily drive the Company's organic growth, as discussed in further detail below. In addition, the Company continues to focus on de-levering its balance sheet (which the Company views as a critical strategic objective), including in connection with the MVP (should it be the primary growth drivers:placed in-service).
•Mountain Valley Pipeline. The MVP Joint Venture is being constructed by a joint venture withamong the Company and affiliates of each of NextEra Energy, Inc. (NEE), Consolidated Edison, Inc. (Con Edison), AltaGas Ltd. and RGC Resources, Inc. EQM is(RGC). As of September 30, 2023, the operator of the MVP andCompany owned a 45.5%an approximate 47.7% interest in the MVP Joint Venture as of September 30, 2018.project and will operate the MVP. The MVP is an estimated 300-mile, 42-inch diameter MVP hasnatural gas interstate pipeline with a targeted capacity of 2.0 Bcf per day andthat is estimateddesigned to span 300 miles extending from Transmission'sthe Company's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, towhich will provide access to the growing Southeastsoutheast demand markets. As currently designed, the MVP is estimated to cost a total of approximately $4.6 billion, excluding AFUDC, with EQM funding approximately $2.2 billion through capital contributions made to the MVP Joint Venture, including approximately $65 million in excess of EQM's ownership interest. In 2018, EQM expects to provide capital contributions of $0.8 billion to $1.0 billion to the MVP Joint Venture. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms and is currently in negotiation with additionalterms. Additional shippers that have expressed interest in the MVP project. Although the current targeted capacity of the MVP is fully subscribed, additional shippers have expressed an interest in subscribing to the MVP ifproject and the MVP Joint Venture adds compression tois evaluating an expansion opportunity that could add approximately 0.5 Bcf per day of capacity through the currently planned pipeline system, which would allow additional volumes to be transported without additional pipe in the ground, or extends the pipeline through projects such as the MVP Southgate project.
installation of incremental compression.
In October 2017, the FERC issued the Certificate of Public Convenience and Necessity for the project.MVP. In the first quarter of 2018, the MVP Joint Venture received limited notice to proceed with certain construction activities from the FERC and commenced construction. AsHowever, as discussed under in "The regulatory approval process for the construction of new midstream assets is very challenging, has significantly increased costs and recentdelayed then-targeted in-service dates, and decisions by regulatory and judicial authorities in pending or potential proceedings, couldparticularly with respect to litigation in the Fourth Circuit regarding MVP, are likely to impact EQM'sour or the MVP Joint Venture's ability to obtain or maintain in effect all approvals and authorizations necessary to complete certain projects on the projected time framein a timely manner or at all, or our ability to achieve the expected investment returnreturns on the projectprojects." under "Risk Factors – Risks Related to EQM's Business" included in Part I, "Item 1A. Risk Factors" in the RegistrationCompany's Annual Report on Form 10-K for the year ended December 31, 2022, as well as in Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q, the MVP project was
29
Table of Contents

repeatedly, significantly delayed and subject to cost increases because of legal and regulatory setbacks, particularly in respect of litigation in the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit).
Notwithstanding such prior setbacks, the MVP Joint Venture continued to engage in pursuing the authorizations necessary under applicable law from the relevant agencies to complete the MVP project, including on February 28, 2023, the U.S. Department of the Interior’s Fish and Wildlife Service (FWS) issuing a new Biological Opinion and Incidental Take Statement (2023 BiOp) for the MVP project and in May 2023, the U.S. Forest Service and Bureau of Land Management issuing authorizations related to MVP’s segment in the Jefferson National Forest (JNF). In conjunction with the pursuit of outstanding authorizations, the Company urged the United States Congress to expeditiously pass, and for there are several pendingto be enacted, federal energy infrastructure permitting reform legislation that specifically requires the completion of the MVP project.
On June 3, 2023, the President of the United States signed into law the Fiscal Responsibility Act of 2023 that, among other things, ratified and approved all permits and authorizations necessary for the construction and initial operation of the MVP, directed the applicable federal officials and agencies to maintain such authorizations, required the Secretary of the Army to issue not later than June 24, 2023 all permits or verifications necessary to complete construction of the MVP and allow for the MVP’s operation and maintenance, and divested courts of jurisdiction to review agency actions on approvals necessary for MVP construction and initial operation.
Thereafter, on June 8, 2023, the West Virginia Department of Environmental Protection issued a new Section 401 water quality certification for the MVP project, on June 23, 2023, the Huntington, Pittsburgh and Norfolk Districts of the U.S. Army Corps of Engineers issued the MVP Joint Venture an Individual Permit to effect approximately 300 water crossings utilizing open cut techniques, and, on June 28, 2023, the FERC authorized the MVP Joint Venture to resume all construction activities in all MVP project locations, including the remaining portion of the Exclusion Zone discussed in Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q, and the MVP Joint Venture recommenced forward construction activity.
As further discussed in Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q, project opponents continue to challenge MVP project-related authorizations. In connection with certain of such challenges, to certain aspectsthe Fourth Circuit issued a stay halting MVP project construction in the JNF and a stay of the 2023 BiOp, effectively halting forward construction for the entirety of the MVP project, that must be resolved before the MVP project can be completed.on July 10, 2023 and July 11, 2023, respectively. The MVP Joint Venture is workingsubsequently filed an emergency application to respondvacate the stays with the U.S. Supreme Court and the U.S. Supreme Court vacated the stays on July 27, 2023. Accordingly, the MVP Joint Venture recommenced forward construction activity.
On October 18, 2023, the Company announced that following the MVP Joint Venture's comprehensive review of progress achieved since the resumption of forward construction in August 2023 and construction activity remaining for completion of the MVP project, the MVP Joint Venture refined the targeted timing for completing construction of the project from year-end 2023 to the courtfirst quarter of 2024, with the total project cost anticipated to be approximately $7.2 billion (excluding AFUDC), which includes approximately $120 million of contingency. Based on such targeted completion timing and agency decisionsfollowing in-service authorization from the FERC, contractual obligations accordingly would commence on or before April 1, 2024.
Certain unforeseen factors have substantially affected the pace of construction and restore all permits.account for more than half of the increase in estimated project costs. The ramp up of MVP’s contractor workforce has been slower and more challenging than expected, due to multiple crews electing not to work on the project based on the history of court-related construction stops, and the inability to recruit crews with required and sufficient experience. Additionally, productivity and cost have been adversely affected in areas of challenging terrain and geology, in part because of the MVP Joint Venture’s commitment to, and application of, heightened environmental protocols. The MVP Joint Venture will continue to prioritize the safety of its workforce, communities, and assets, and the project’s compliance with applicable environmental standards and regulations.
The remaining increase in total project cost is targetedattributable to a number of other factors, including certain financial settlements with contractors, labor and fuel inflation, and enhanced safety and security measures. While the remaining construction is subject to certain factors, including, among others, the physical construction conditions, crew availability, and productivity during the winter season, the MVP Joint Venture has made meaningful forward construction progress and construction will continue into the winter months, with the goal of responsibly completing the remaining construction activity and realizing the benefits of the MVP project for a diverse mix of stakeholders as promptly as practicable. Further adverse developments however, whatever the cause, affecting the MVP project could further increase project costs and/or further delay completion of the project, and adversely affect the Company. See
30
Table of Contents

also "Expanding our business by constructing new midstream assets subjects us to construction, regulatory, environmental, political and legal uncertainties that are beyond our control." included in Part I, "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. See also Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q.
On November 4, 2019, Con Edison exercised an option to cap its investment in the construction of the MVP project at approximately $530 million (excluding AFUDC). On May 4, 2023, RGC exercised an option for the Company to fund RGC’s portion of future capital contributions with respect to the MVP project, which funding the Company commenced in June 2023 and will continue through the full in-service date of the MVP. The Company and NEE are obligated, and RGC prior to the exercise of its option described above had opted, to fund the shortfall in Con Edison's capital contributions on a pro rata basis. Following RGC’s exercise of its option, the Company is also funding RGC’s portion of Con Edison’s shortfall. Such funding by the Company in respect of the Con Edison shortfall and RGC’s portion of capital contributions has and will correspondingly increase the Company's interests in the MVP project and decrease Con Edison's and RGC’s respective interest, as applicable, in the MVP project. If the project were to be placedcompleted in service during the fourthfirst quarter of 2019, subject to litigation2024 and regulatory-related delay as further discussed under "Risk Factors"at a total project cost of approximately $7.2 billion (excluding AFUDC), the Company expects its equity ownership in the Registration Statement.MVP project would progressively increase from approximately 47.7% to approximately 48.8%.
Through September 30, 2023, the Company had funded approximately $3.0 billion to the MVP Joint Venture for the MVP project. If the MVP project were to be completed in the first quarter of 2024 and at a total project cost of approximately $7.2 billion (excluding AFUDC), the Company expects it would make total capital contributions to the MVP Joint Venture in 2023 of approximately $725 million to $745 million primarily related to forward construction, and expects that it would incur a total of approximately $3.7 billion over the project's construction, inclusive of approximately $220 million in excess of the Company's ownership interest.
•Wellhead Gathering Expansion Projects and Hammerhead Project. In 2018,Pipeline. During the nine months ended September 30, 2023, the Company estimatesinvested approximately $199.2 million in gathering projects (inclusive of capital expenditures related to the noncontrolling interest in Eureka Midstream). For 2023, the Company expects to invest approximately $255 million to $275 million in gathering projects (inclusive of expected capital expenditures of approximately $750$15 million on gatheringrelated to the noncontrolling interest in Eureka Midstream). The primary projects include infrastructure expansion projects, primarily driven by wellhead and header projectsoptimization in core development areas in the Marcellus and Utica Shales in southwestern Pennsylvania, southeastern Ohio and northern West Virginia for EQT, Range Resources Corporation (Range Resources) and Ohio. Theseother producers. The Company has seen and expects that it will continue to see the benefits of return-to-pad drilling and system integrations in 2023, and accordingly, continues to estimate gathering projects includecapital expenditures required to maintain flat gathered volumes in a given year would be approximately $225$200 million on expansion of the legacy RMP gathering system, approximately $235 million on expansion of the legacy Drop-Down Entities gathering systems and approximately $150 million on commencing construction activities on the Hammerhead project. for 2023.
The Hammerhead projectpipeline is a 1.21.6 Bcf per day gathering header pipeline connectingthat is primarily designed to connect natural

32

Table of Contents



gas produced in Pennsylvania and West Virginia to the MVP, Texas Eastern Transmission and Eastern Gas Transmission, is supported by a 20-year term, 1.2 Bcf per day, firm capacity commitment from EQT, and costs approximately $540 million. The Company expects Hammerhead pipeline full commercial in-service to commence in conjunction with full MVP in-service and is focused on obtaining additional firm capacity commitments for the pipeline.
The Company also has an agreement with a producer customer to install approximately 32,000 horsepower booster compression to existing facilities. The project is backed by a long-term firm commitment and is targeted to be in-service in early 2024. The Company expects to invest approximately $60 million, with a majority of the capital spend in 2023, which is reflected within the range of 2023 investments for gathering projects noted above, and 2024.
•Transmission Projects and Equitrans Expansion Project. During the nine months ended September 30, 2023, the Company invested approximately $54.9 million in transmission projects. For 2023, the Company expects to invest approximately $80 million to $90 million in transmission projects. This includes an estimate of $5 million to $10 million of capital expenditures related to the Rager Mountain natural gas storage field incident based on current information. The $80 million to $90 million of expected investment in transmission projects also includes capital expenditures expected for 2023 associated with the Company's Ohio Valley Connector expansion project (OVCX). The Company expects OVCX will increase deliverability on the Company's existing Ohio Valley Connector pipeline (OVC) by approximately 350 MMcf per day, create new receipt and delivery transportation paths, and enhance long-term reliability. The project is supported by new long-term firm capacity commitments of 330 MMcf per day, as well as an extension of approximately 1.0 Bcf per day of existing contracted mainline capacity for EQT. OVCX is designed to meet growing demand in key markets in the mid-continent and gulf coast through existing interconnects with long-haul pipelines in Clarington, Ohio. On January 20, 2023, the FERC issued the Final Environmental Impact Statement
31
Table of Contents

for the project. On June 15, 2023, the FERC issued the Certificate of Public Convenience and Necessity for OVCX. On July 31, 2023, the FERC issued the Notice to Proceed and the Company commenced construction during the third quarter. The Company is targeting the incremental capacity to be in-service during the first half of 2024. The Company expects to invest approximately $160 million in the project, including approximately $60 million in 2023. The OVCX project, as well as the Company's recent successful open season for the available transmission capacity that was the subject of the one-time transmission customer's contract buyout during the first quarter of 2023, is consistent with the Company's ongoing efforts to optimize existing assets and achieve capital efficiency.
The EEP is one of the Company's transmission projects and is designed to provide north-to-south capacity on the mainline Equitrans, L.P. system, including primarily for EQT, that is expecteddeliveries to cost a totalthe MVP. A portion of $555 million and be placed inthe EEP commenced operations with interruptible service in the fourththird quarter of 2019. The EEP provides capacity of approximately 600 MMcf per day and offers access to several markets through interconnects with Texas Eastern Transmission, Eastern Gas Transmission and Columbia Gas Transmission. In connection with MVP full in service, firm transportation agreements for 550 MMcf per day of capacity will commence under 20-year terms.
•MVP Southgate Project. In April 2018, the MVP Joint Venture announced the MVP Southgate project, which is a proposed 70-milecontemplated interstate pipeline that willwas approved by the FERC to extend approximately 75 miles from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. ThisThe Company is expected to operate the MVP Southgate project is anchored byand owned a firm capacity commitment from PSNC Energy.47.2% interest in the MVP Southgate project as of September 30, 2023. The preliminaryMVP Southgate project, as originally designed, was estimated to cost estimate is $350a total of approximately $450 million to $500 million, a portion of which the Company expected to fund.
The MVP Joint Venture submitted the MVP Southgate certificate application to the FERC in November 2018. In June 2020, the FERC issued the Certificate of Public Convenience and Necessity (MVP Southgate Certificate) for the MVP Southgate; however, the FERC, while authorizing the project, directed the Office of Energy Projects not to issue a notice to proceed with construction until necessary federal permits are received for the MVP project and the Director of the Office of Energy Projects lifts the stop work order and authorizes the MVP Joint Venture to continue constructing the MVP project. The FERC conditioned its authorization on the MVP Southgate project being built and made available for service by June 18, 2023. On June 15, 2023, the MVP Joint Venture filed a request with the FERC for an extension of time to June 18, 2026 to complete the MVP Southgate. The public comment period in respect of such request ended July 24, 2023, with various parties commenting on the request, and the request is pending. In addition, there have been certain other litigation and regulatory-related delays affecting completion of the MVP Southgate project, including on August 11, 2020, the North Carolina Department of Environmental Quality denied the MVP Southgate project's application for a Clean Water Act Section 401 Individual Water Quality Certification and Jordan Lake Riparian Buffer Authorization due to then existing legal and regulatory uncertainty surrounding the completion of the MVP project, which denial was reissued in April 2021 following an appellate proceeding. On December 3, 2021, the Virginia State Air Pollution Control Board denied the permit for the MVP Southgate project’s Lambert compressor station, which decision the MVP Joint Venture initially appealed before withdrawing its request to review the denial.
The MVP Joint Venture continues to engage with Dominion Energy North Carolina and a prospective customer regarding refining the MVP Southgate project’s design, scope and/or timing for the benefit of such customers in lieu of pursuing the project as originally contemplated. Dominion Energy North Carolina’s obligations under the precedent agreement in support of the original project are subject to certain conditions, including, among others, that the MVP Joint Venture will have completed construction of the project facilities by December 31, 2023. The Company is unable to ensure the results of the continued engagement between the MVP Joint Venture and Dominion Energy North Carolina and the other prospective customer, including the ultimate design, scope, timing, undertaking or completion of the project.
•Water Operations. During the nine months ended September 30, 2023, the Company invested approximately $31.8 million in its water infrastructure, primarily to continue to construct the initial mixed-use water system buildout. The Company placed portions of the initial mixed-use water system in service during 2022 and its second above ground water storage facility into service in July 2023, which brings its total water storage capacity to 350,000 barrels. The backbone of the mixed-use water system is expected to be spentsubstantially completed in 20192023. In May 2023, the Company executed an agreement with a producer customer to provide fresh and 2020. EQM has a 32.7% ownership interest inmixed use water delivery service. The Company expects to invest approximately $30 million, primarily across 2023 and 2024, to complete the project and will operate the pipeline. Subject to approvalbuild out. The 10-year agreement is backed by the FERC, the MVP Southgate project has a targeted in-service date of the fourth quarter 2020.
Transmission Expansion. In 2018,minimum volume commitment. For 2023, the Company estimates capital expenditures ofexpects to invest approximately $100$45 million, for other transmission expansion projects, primarily attributablerelated to the Equitrans, L.P. Expansion project. The Equitrans, L.P. Expansion project is designed to provide north-to-south capacity on the mainline Equitrans, L.P.continued construction of its mixed-use water system for deliveries to the MVP.
buildout.
See further discussion of capital expenditureexpenditures in the "Capital Requirements."Requirements" section below.
Separation
32
Table of Contents

EQT Global GGA. On February 26, 2020 (the EQT Global GGA Effective Date), the Company entered into a Gas Gathering and Distribution.Compression Agreement (as subsequently amended, the EQT Global GGA) with EQT and certain affiliates of EQT for the provision by the Company of certain gas gathering services to EQT in the Marcellus and Utica Shales of Pennsylvania and West Virginia. The EQT Global GGA is intended to, among other things, incentivize combo and return-to-pad drilling by EQT. Pursuant to the EQT Global GGA, EQT is subject to an initial annual MVC of 3.0 Bcf per day that gradually steps up to 4.0 Bcf per day through December 2031 following the full in-service date of the MVP (should it be placed in-service) and the dedication of a substantial majority of EQT's core acreage in southwestern Pennsylvania and West Virginia. The EQT Global GGA runs from the EQT Global GGA Effective Date through December 31, 2035, and will renew annually thereafter unless terminated by EQT or the Company expectspursuant to recordits terms. Pursuant to the EQT Global GGA, the Company has certain obligations to build connections to connect EQT wells to its gathering system, which are subject to limitations, including geographical in relation to the dedicated area, as well as the distance of such connections to the Company's then-existing gathering system, which have provided and could further provide capital efficiencies to EQM. In addition to the fees related to gathering services, the EQT Global GGA provides for potential cash bonus payments payable by EQT to the Company during the period beginning on the first day of the calendar quarter in which the MVP full in-service date occurs through the calendar quarter ending December 31, 2024 (the Henry Hub cash bonus payment provision). The potential cash bonus payments are conditioned upon the quarterly average of certain Henry Hub natural gas prices exceeding certain price thresholds.
Under the EQT Global GGA, the performance obligation is to provide daily MVC capacity and as such the total consideration is allocated proportionally to the daily MVC over the life of the contract. In periods that the gathering MVC revenue billed will exceed the allocated consideration, the excess will be deferred to the contract liability and recognized in revenue when the performance obligation has been satisfied. While the 3.0 Bcf per day MVC capacity became effective on April 1, 2020, additional daily MVC capacity and the associated gathering MVC fees payable by EQT to the Company as set forth in the EQT Global GGA are conditioned upon the full in-service date of the MVP. The performance obligation, the allocation of the total consideration over the life of the contract and the gathering MVC fees payable by EQT under the contract have been in the past, and in the future could be, affected by changes in the potential timing of the full in-service date of the MVP.
Under the EQT Global GGA, the gathering MVC fees periodically decline through January 1, 2028 (with the fees then remaining fixed throughout the remaining term), including if MVP would not achieve full in-service. Before January 1, 2026, beginning the first day of the quarter in which the full in-service date of the MVP occurs under the EQT Global GGA, the gathering MVC fees payable by EQT to the Company are subject to more significant potential declines for certain contract years as set forth in the EQT Global GGA, which, prior to EQT's exercise of the EQT Cash Option (defined below), provided for estimated aggregate fee relief of up to approximately $65 million to $75$270 million in non-recurring costs associated with the Separationfirst twelve-month period, up to approximately $230 million in the second twelve-month period and Distribution. These costs are expectedup to be related primarily to third-party consulting, legal, contractor or other fees directly associated with the Separation process. Of the total amount, the Company expects to record approximately $35 million in the third twelve-month period. Given that the MVP full in-service date did not occur by January 1, 2022, on July 8, 2022, EQT irrevocably elected under the EQT Global GGA to $45forgo up to approximately $145 million of the potential gathering MVC fee relief in expensessuch first twelve-month period and up to approximately $30$90 million of the potential gathering MVC fee relief in capital expenditures to relocate or augment corporate facilities and create new IT systems.
Simplification Plan. On November 30, 2018,such second twelve-month period in exchange for a cash payment from the Company announcedto EQT in the Unit Purchases.amount of approximately $195.8 million (the EQT Cash Option). As a result of EQT exercising the EQT Cash Option (and payment by the Company thereof), the maximum aggregate potential fee relief applicable under the EQT Global GGA in such first twelve-month period and such second twelve-month period was reduced to be up to approximately $125 million and $140 million, respectively. The Unit Purchasesgathering MVC fees and potential declines are expectedsubject to closecertain provisions related to inflation adjustment in accordance with the terms of the EQT Global GGA, including if MVP would not achieve full in-service. Additionally, the EQT Global GGA provides for a fee credit to the gathering rate for certain gathered volumes that also receive separate transmission services under certain transmission contracts.
Based on or about December 31, 2018, after whichthe Henry Hub natural gas forward strip prices as of October 27, 2023 and the terms of the Henry Hub cash bonus payment provision, any further delays in the full in-service date for the MVP project and, if applicable, corresponding changes to probability-weighted assumptions regarding the project completion could decrease the estimated fair value of the derivative asset attributable to the Henry Hub cash bonus payment provision, and such decrease may be substantial and ultimately be reduced to zero. For a discussion of the potential effect of hypothetical changes to the NYMEX Henry Hub natural gas future prices on the estimated fair value of the derivative asset attributable to the Henry Hub cash bonus payment provision, see "Commodity Price Risk" in Part I, "Item 3. Quantitative and Qualitative Disclosures About Market Risk" of this Quarterly Report on Form 10-Q. Changes in estimated fair value are recognized in other income, net, on the Company’s statements of consolidated comprehensive income.
2021 Water Services Agreement. On October 22, 2021, the Company and its affiliates will own 95.5%EQT entered into a new 10-year, mixed-use water services agreement covering operations within a dedicated area in southwestern Pennsylvania. The 2021 Water Services
Agreement became effective on March 1, 2022. Pursuant to the 2021 Water Services Agreement, EQT has agreed to pay the Company a minimum ARC for water services equal to $40 million in each of the outstanding EQGP common units.
Upon the closingfirst five years of the Unit Purchases,10-year contract term and equal to $35 million per year for the Company intends to purchase any and all remaining outstanding EQGP common units pursuant to the exercisefive years of the Limited Call Right. Ifcontract term.
33
Table of Contents

For a discussion of the Limited Call Right is exercised, the remaining holders of EQGP common units will receive at least the same cash price per unit that will be paidCompany's commercial relationship with EQT and related considerations, including risk factors, see Part I, "Item 1A. Risk Factors" in the Unit Purchases. The Limited Call Right is expected to close in January 2019 and will be a taxable transactionCompany's Annual Report on Form 10-K for EQGP unitholders.
On November 30, 2018, the Company also announced the Proposed IDR Transaction, pursuant to which the Company would exchange the IDRs and general partner units in EQM that it holds, directly or indirectly, for (a) newly-issued EQM common units and newly-issued EQM PIK Units, both representing limited partner interests in EQM, and (b) a non-economic general partner interest in EQM. Distributions on the EQM PIK Units would be paid through the issuance of additional EQM PIK Units. The EQM PIK Units would automatically convert into newly-issued EQM common units on a one-for-one basis, subject to adjustments for any unit split or combination or other similar transaction, at a date to be determined. The Proposed IDR Transaction is subject to negotiation with the Board of Directors of the EQM General Partner or its conflicts committee. Assuming an agreement is reached, the Company expects that the Proposed IDR Transaction will close in the first quarter of 2019.
Upon completion of the Unit Purchases, exercise of the Limited Call Right and completion of the Proposed IDR Transaction, the Company will have accomplished a full simplification of EQGP and EQM, resulting in a projected 61% ownership of EQM. Additionally, EQM will be the only publicly traded partnership under Equitrans Midstream and is expected to benefit from the elimination of the IDR burden, as well as stronger coverage and balance sheet metrics.
Seeyear ended December 31, 2022. For further discussion of the MVP project, see "Outlook" above and Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q.
Potential Future Impairments. The accounting estimates related to impairments are susceptible to change, including estimating fair value which requires considerable judgment. For goodwill, management’s estimate of a reporting unit’s future financial results is sensitive to changes in assumptions, such as changes in stock prices, weighted-average cost of capital, terminal growth rates and industry multiples. Similarly, cash flow estimates utilized for purposes of evaluating long-lived assets and equity method investment (such as in the MVP Joint Venture) require the Company to make projections and assumptions for many years into the future for pricing, demand, competition, operating costs, commencement (or recommencement, as applicable) of operations and timing thereof (if at all), resolution of relevant legal and regulatory matters, and other factors. The Company evaluates long-lived assets and equity method investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable (meaning, in the case of its equity method investment, that such investment has suffered other-than-temporary declines in value under ASC 323). The Company believes the estimates and assumptions used in estimating its reporting units’, its long-lived assets' and its equity method investment's fair values are reasonable and appropriate as of September 30, 2023; however, assumptions and estimates are inherently subject to significant business, economic, competitive, regulatory, judicial, construction and other risks that could materially affect the calculated fair values and the resulting conclusions regarding impairments, which could materially affect the Company’s results of operations and financial position. Additionally, actual results could differ from these estimates and assumptions may not be realized. When estimating the fair value of its equity method investment, the Company utilizes an income approach under which significant judgments and assumptions, including the discount rate and probability-weighted scenarios, are sensitive to change. The Company also continues to monitor the progress of the MVP project and to monitor the MVP Southgate project. Future adverse developments, as well as potential macroeconomic factors, including other than temporary market fluctuations, changes in interest rates, cost increases and other unanticipated events, could require that the Company further modify assumptions reflected in the probability-weighted scenarios of discounted future net cash flows (including with respect to the probability of success) utilized to estimate the fair value of its equity method investment in the MVP Joint Venture, which could result in an other-than-temporary decline in value, resulting in an incremental impairment of that investment. While macroeconomic factors in and of themselves may not be a direct indicator of impairment, should an impairment indicator be identified in the future, macroeconomic factors such as changes in interest rates could ultimately impact the size and scope of any potential impairment. The Company cannot predict the likelihood or magnitude of any future impairment. See “Impairments of our assets, including property, plant, and equipment, intangible assets, goodwill and our equity method investment in the MVP Joint Venture, previously have significantly reduced our earnings, and additional impairments could further reduce our earnings.” included in Part I, “Item 1A. Risk Factors" and the Company's simplification plandiscussion of "Critical Accounting Estimates" included in Note 12."Outlook" in Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," each in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
For a discussion of capital expenditures, see "Capital Requirements" under "Capital Resources and Liquidity" below.
CAPITAL RESOURCES AND LIQUIDITY
Capital Resources and Liquidity
The Company's principal liquidity requirements are to finance its operations, fundits capital expenditures, potential acquisitions and other strategic transactions and capital contributions to joint ventures, including the MVP Joint Venture, to pay cash dividends to its shareholders, pay cashand distributions, to the noncontrolling interests in EQGPwhen declared, and EQM andto satisfy any indebtedness obligations. Additionally, the Company or its affiliates may, at any time and from time to time, seek to retire or purchase outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as the Company may determine, and will depend on prevailing market conditions, the Company's other liquidity requirements, contractual restrictions and other factors and the amounts involved may be material. The Company's ability to meet these liquidity requirements will dependdepends on the Company's cash flow from operations, the continued ability of the Company to borrow under its ability to generate cash insubsidiaries' credit facilities and the future as well as itsCompany's ability to raise capital in banking and capital markets. We believe that our cash on hand, future cash generated from operations and future cash received from potential distributions from the MVP Joint Venture, together with available borrowing capacity under our subsidiaries' credit facilities and our access to banking and capital markets, will provide adequate resources to fund our short-term and long-term capital, operating and financing needs. However, cash flow and capital raising activities may be affected by prevailing economic conditions in the natural gas industry and other markets.financial and business factors, including factors discussed in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (such as those market forces discussed in “Our business is subject to climate change-related transitional risks (including evolving climate-focused regulation and climate change-driven trends emphasizing financing non-fossil fuel businesses and prompting pursuit of emissions reductions, lower-carbon technologies and alternative forms of energy) and physical risks that could
34
Table of Contents

significantly increase our operating expenses and capital costs, adversely affect our customers’ development plans, and reduce demand for our products and services."), some of which are beyond the Company's control. The Company's available sources of liquidity include cash generated from operations, cash on hand, borrowings under its subsidiaries' revolving credit facilities, cash on hand,issuances of additional debt offerings and issuances of additional equity interests, including shares of the Company or limited partner units of EQM or EQGP. Pursuant the Tax Matters Agreement,securities. The amount the Company is restricted from participating in certain corporate actions including issuing equity securities beyond certain thresholdsable to borrow under the Amended EQM Credit Facility is bounded by a maximum Consolidated Leverage Ratio. Effective as set forthof the MVP Mobilization Effective Date, as defined in the Tax Matters Agreement.Amended EQM Credit Facility, the maximum Consolidated Leverage Ratio permitted with respect to the fiscal quarter ending December 31, 2023 and the end of each of EQM’s three consecutive fiscal quarters thereafter is 5.85 to 1.00, with the then-applicable ratio being tested as of the end of each fiscal quarter. As of the MVP Mobilization Effective Date, as defined in the Amended EQM Credit Facility, EQM expects to have the ability to borrow approximately $0.6 billion under the Amended EQM Credit Facility. See Note 6 for further information regarding the Amended EQM Credit Facility. See also "We may determineOur subsidiaries’ significant indebtedness, and any future indebtedness, as well as the restrictions under our subsidiaries’ debt agreements, could adversely affect our operating flexibility, business, financial condition, results of operations, liquidity and ability to forgo or be requiredpay dividends to forgo certain transactions in order to avoid the

33

Table of Contents



risk of incurring material tax-related liabilities or indemnification obligations under the tax matters agreement.our shareholders." under "Risk Factors – Risks Related to Investment in Us" included in Part I, "Item 1A. Risk Factors" of the Registration Statement. EQM is not forecasting any public equity issuanceCompany's Annual Report on Form 10-K for the foreseeable future.year ended December 31, 2022.
See “Security Ratings” below for a discussion of EQM’s credit ratings during 2023. Based on EQM's credit rating levels, EQM has delivered credit support to the MVP Joint Venture in the form of a letter of credit, which is for the MVP project, and was in the amount of approximately $219.7 million as of September 30, 2023, which is subject to adjustment based on the applicable construction budget. See Note 4 for further information. See "A further downgrade of EQM’s credit ratings, which are determined by independent third parties, could impact our liquidity, access to capital, and costs of doing business." included in Part I, "Item 1A. Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
The following table is a summary of the cash flows by activity for the nine months ended September 30, 2023 and 2022, respectively.
Nine Months Ended September 30,
20232022
(Thousands)
Cash flows
Net cash provided by operating activities$724,860 $746,539 
Net cash used in investing activities(555,587)(427,177)
Net cash used in financing activities(56,562)(405,956)
Net increase (decrease) in cash and cash equivalents$112,711 $(86,594)
Operating Activities
Net cash flows provided by operating activities were $701.4decreased approximately $21.7 million for the nine months ended September 30, 20182023 as compared to $480.5 million for the nine months ended September 30, 2017.2022. The increasedecrease was primarily driven primarily by higher operating income, for which contributing factors are discussed in "Executive Overview"interest payments and "Business Segment Results," partly offset by higher interestthe timing of other working capital receipts and payments.
Investing Activities
Net cash flows used in investing activities were $1,067.1increased by approximately $128.4 million for the nine months ended September 30, 20182023 as compared to $324.9the nine months ended September 30, 2022. The increase was primarily due to an increase in capital contributions to the MVP Joint Venture. As construction of the MVP project continues, through completion of the project, the Company expects higher investing cash outflows as a result of higher capital contributions to the MVP Joint Venture. See “Capital Requirements” below for a discussion of forecasted 2023 capital expenditures and capital contributions to the MVP Joint Venture.
35
Table of Contents

Financing Activities
Net cash flows used in financing activities decreased by $349.4 million for the nine months ended September 30, 2017. The increase was attributable primarily2023 as compared to increased capital expenditures, as further described in "Capital Requirements," and increased capital contributions to the MVP Joint Venture consistent with the start of construction on the MVP.
Financing Activities
Net cash flows provided by financing activities were $428.8 million for the nine months ended September 30, 2018 compared to net cash flows used in financing activities of $916.3 million for the nine months ended September 30, 2017.2022. For the nine months ended September 30, 2018, the primary source of financing cash flows was proceeds from the issuance of the EQM $2.5 Billion Senior Notes, while2023, the primary uses of financing cash flows were netrepayments on borrowings under the revolving credit facility repayments, net distributionsfacilities, the payments of dividends to EQT,shareholders, the redemption of the 2023 Notes and distributions paid to noncontrolling interest, unitholders andwhile the Gulfport Transaction.primary source of financing cash flows were borrowings under the revolving credit facilities. For the nine months ended September 30, 20172022, the primary uses of financing cash flows were net distributionsthe purchase of certain tranches of EQM's outstanding long-term indebtedness pursuant to EQTthe 2022 Tender Offers and distributions paidan open market purchase, repayments on borrowings under the revolving credit facilities, and the payments of dividends to noncontrolling interest unitholders.shareholders, while the primary source of financing cash flows were the issuance of the 2022 Senior Notes and borrowings under the revolving credit facilities. As construction of the MVP project continues, through the completion of the project, the Company expects higher financing cash flows as a result of higher borrowings under its Amended EQM Credit Facility.
Capital Requirements
The gathering, transmission and storage and water services businesses are capital intensive, requiring significant investment to develop new facilities and to maintain and upgrade existing operations.
 Three Months Ended September 30, Nine Months Ended September 30,
 2018 2017 2018 2017
 (Thousands)
Expansion capital expenditures (a)
$226,078
 $60,679
 $587,783
 $207,548
Maintenance capital expenditures14,006
 9,815
 29,164
 16,859
Other capital expenditures11,819
 —
 11,819
 —
Total capital expenditures (b)
$251,903
 $70,494
 $628,766
 $224,407
(a)Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture of $263.2 million and $43.5 million for the three months ended September 30, 2018 and 2017, respectively, and $446.0 million and $103.4 million for the nine months ended September 30, 2018 and 2017, respectively.
(b)
The Company accrues capital expenditures when the capital work has been completed but the associated bills have not been paid. Accrued capital expenditures are excluded from the statements of condensed combined consolidated cash flows until they are paid. See Note 4.
Expansion capitalCapital expenditures in 2023 are expenditures incurred for capital improvements thatexpected to be approximately $380 million to $410 million (including approximately $15 million attributable to the noncontrolling interest in Eureka Midstream). The Company expects will increase its operating income or operating capacity over the long term. Expansion capital expenditures increased by $165.4 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 and $380.2 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 primarily as a result of capital expenditures spent on assets owned by the Drop-Down Entities and RMP, spending on the Hammerhead project, the Equitrans, L.P. Expansion project and various wellhead gathering expansion projects, partly offset by decreased spending on the Range Resources header pipeline project. The final phase of the Range Resources header pipeline project was placed in service during the second quarter of 2017.
Maintenance capital expenditures are expenditures made to maintain, over the long term, EQM's operating capacity or operating income. Maintenance capital expenditures increased by $4.2 million for the three months ended September 30, 2018

34

Table of Contents



compared to the three months ended September 30, 2017 and $12.3 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 primarily as a result of higher assets in service and timing of ongoing maintenance projects.
In 2018,make total capital contributions to the MVP Joint Venture in 2023 of approximately $725 million to $745 million primarily related to forward construction of the MVP project. Capital contributions payable to the MVP Joint Venture are expected to be $0.8 billion to $1.0 billion, expansionaccrued upon the issuance of a capital expenditures are expected to be approximately $875 million and maintenance capital expenditures are expected to be approximately $45 million, net of reimbursements.call by the MVP Joint Venture. The Company's futureshort-term and long-term capital investments may vary significantly from period to period based on the available investment opportunities, andthe timing of the construction of the MVP. Maintenance capital expenditures are also expected to vary quarter to quarter.MVP and other projects, and maintenance needs. The Company expects to fund futureshort-term and long-term capital expenditures and capital contributions primarily through cash on hand, cash generated from operations, available borrowings under its subsidiaries' credit facilities debt offerings and issuances of additional equity interests. The Company does not forecastits access to banking and capital expenditures associated with potential projects that are not committed as of the filing of this Quarterly Report on Form 10-Q.markets.
Credit Facility Borrowings
See Notes 7 and 12 to the financial statementsNote 6 for a discussion of the Company's, EQGP'sAmended EQM Credit Facility and EQM's credit facilities.the 2021 Eureka Credit Facility.
Security Ratings
The Company and EQGP are not currently rated by Moody's Investors Service (Moody's), Standard & Poor's Ratings Services (S&P) or Fitch Ratings (Fitch).
The table below sets forth the credit ratings for EQM's debt instruments of EQM at NovemberSeptember 30, 2018.
2023.
EQM Senior Notes
Rating ServiceSenior NotesRatingOutlook
Moody'sBa1Ba3Stable
S&PBBB-StableBB-Negative
FitchBBB-StableBBN/A

On August 29, 2023, Fitch affirmed EQM's credit rating on Rating Watch Positive. EQM's credit ratings are subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. EQMThe Company cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn entirely by a credit rating agency if, in its judgment, circumstances so warrant. If any credit rating agency downgrades or withdraws EQM's ratings, EQM'sincluding for reasons relating to the MVP project (such as delays affecting the MVP project or increases in such project’s targeted costs), EQM’s leverage or credit ratings of the Company's customers, the Company's access to the capital markets may be limited,could become more challenging, borrowing costs couldwill likely increase, EQMthe Company may, depending on contractual provisions in effect at such time, be required to provide additional credit assurances in support of commercial agreements such as joint venture agreements and construction contracts, the(the amount of which may be substantial,substantial) and the potential pool of investors and funding sources may decrease. In order to be considered investment grade, a company must be rated Baa3 or higher by Moody's, BBB- or higher by S&P, or BBB- or higher by Fitch. Anything below theseAll of EQM's credit ratings including EQM's current credit rating of Ba1 by Moody's, isare considered non-investment grade.
Distributions
See Note 9 to the financial statements for discussion of distributions.
Commitments and Contingencies
As of November 30, 2018, the Company and EQGP were not partyFrom time to any legal proceedings.
In the ordinary course of business,time, various legal and regulatory claims and proceedings are pending or threatened against EQM.the Company and its subsidiaries. While the amounts claimed may be substantial, EQMthe Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. EQMThe Company accrues legal and other direct costs related to loss contingencies when
36
Table of Contents

incurred. EQMThe Company establishes reserves whenever it believes it to be appropriate for pending matters andmatters. Furthermore, after consultation with counsel and considering available insurance. Furthermore, EQMthe availability, if any, of insurance, the Company believes, although no assurance can be given, that the ultimate outcome of any matter currently pending against EQMit or any of its consolidated subsidiaries will not materially adversely affect its business, financial condition, results of operations, liquidity or ability to make distributionspay dividends to EQM's unitholders, including the Company and EQGP.its shareholders.
See also "The regulatory approval process for the construction of new midstream assets is very challenging, has significantly increased costs and recentdelayed then-targeted in-service dates, and decisions by regulatory and judicial authorities in pending or potential proceedings, couldparticularly with respect to litigation in the Fourth Circuit regarding MVP, are likely to impact EQM'sour or the MVP Joint Venture's ability to obtain or maintain in effect all approvals and authorizations necessary to complete certain projects on the projected time framein a timely manner or at all or our ability to achieve the expected investment returnreturns on the projectprojects." under "Risk Factors—Risks Relatedand "The November 2022 incident involving the venting of natural gas from a well at Equitrans, L.P.'s Rager Mountain natural gas storage facility required that we incur costs and expenses to EQM's Business"halt such venting, and investigate and respond to the incident, including undertaking ongoing reviews of other storage assets. Activities and investigations responsive to the incident are ongoing, and, consequently, we are incurring and in the future we expect to incur further costs and expenses, whether resulting from or arising out of the incident, which could, depending on their scope and timing, materially adversely affect our business, financial condition, results of operations, liquidity and ability to pay dividends to our shareholders." included in Part I, "Item 1A. Risk Factors" of the Registration StatementCompany's Annual Report on Form 10-K for the year ended December 31, 2022. See also Part II, "Item 1. Legal Proceedings" of this Quarterly Report on Form 10-Q for a discussion of thecertain litigation and regulatory proceedings, including related to the MVP project.

35

Table of Contents



project and the Rager Mountain natural gas storage field incident.
See Note 1215 to the Company's annual combined consolidated financial statements included in the Registration StatementCompany's Annual Report on Form 10-K for the year ended December 31, 2022 for further discussion of the Company's commitments and contingencies.
Off-Balance Sheet ArrangementsDividends
See Notes 6On October 25, 2023, the Company's Board of Directors declared cash dividends for the third quarter of 2023 of $0.15 per common share and 12$0.4873 per Equitrans Midstream Preferred Share to shareholders of record at the financial statements for discussionclose of the MVP Joint Venture guarantee.business on November 3, 2023.
Critical Accounting Policies and Estimates
The Company's critical accounting policies are described in Note 1 to the Company's annual combined consolidated financial statements included in the Registration Statement and "Management'sPart II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" includedcontained in the Registration Statement.Company's Annual Report on Form 10-K for the year ended December 31, 2022. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in Note 1the notes to thesethe Company's consolidated financial statements.statements in Part I, "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q. Preparation of financial statements requires management to make estimates and judgmentsassumptions that affect the reported amounts in the Company's consolidated financial statements and accompanying notes. The Company's critical accounting policies are considered critical due to the significant judgments and estimates used in the preparation of assets, liabilities, revenues and expensesthe Company's consolidated financial statements and the related disclosuresmaterial impact on the results of contingent assets and liabilities. Management uses historical experience and all available information to make estimates and judgments. Management believes the estimates and judgments underlying theseoperations or financial statements are reasonable, however, actualcondition. Actual results could differ from estimated results.those judgments and estimates.

36

Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest RateExcept for Commodity Price Risk and Credit Risk described below, information about market risks for the nine months ended September 30, 2023, does not differ materially from that discussed under Part II, "Item 7A." of the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as updated for the nine months ended September 30, 2023.
Commodity Price Risk. ChangesThe Company's business is dependent on continued natural gas production and the availability and development of reserves in interest ratesits areas of operation. Prices for natural gas and NGLs, including regional basis differentials, have previously adversely affected, and may in the future adversely affect, timing of development of additional reserves and production that is accessible by the Company’s pipeline and storage assets, which also negatively affects the Company’s water services business, and the creditworthiness of the Company’s customers.
As of October 27, 2023, the natural gas forward price strip reflected significantly lower Henry Hub and Appalachian Basin natural gas prices for the remainder of 2023 relative to prices in the fourth quarter of 2022. Lower natural gas prices, particularly in the Appalachian region, have in the past caused, and may in the future cause, producers such as EQT to determine to take actions to slow production growth and/or maintain flat or reduce production, which when effected by our producer customers limits growth in or may reduce the demand for, and usage of, our services. For instance, in certain periods of low natural gas prices prior to 2023, temporary production curtailments resulted in a decrease in our volumetric-based
37
Table of Contents

gathering fee revenues. Based on such forward price strip, the Company perceives continued risk that EQT and/or other producers could curtail production in 2023, which, depending on the nature and duration of any such curtailment, could have a significant negative effect on the demand for our services, our volumetric-based fee revenue, and therefore our results of operations. See also “Decreases or a lack of growth in production of natural gas in our areas of operation, whether as a result of regional takeaway constraints, producer corporate capital allocation strategies, lower regional natural gas prices, natural well decline, and/or other factors, have adversely affected, and in the future could adversely affect, our business and operating results and reduce our cash available to pay cash dividends to our shareholders.”, "The lack of diversification of our assets and geographic locations could adversely affect us." and “We generate a substantial majority of our revenues from EQT. Therefore, we are subject to the business and liquidity risks of EQT, and any decrease in EQT's drilling or completion activity (or significant production curtailments) or a shift in such activity away from our assets could adversely affect our business and operating results. Various factors have affected and may further affect our ability to realize the benefits associated with the EQT Global GGA at the time of its execution.”, each included in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Price declines and sustained periods of low natural gas and NGL prices could have an adverse effect on the creditworthiness of the Company's customers and related ability to pay firm reservation fees under long-term contracts and/or affect, as discussed above, activity levels and, accordingly, volumetric-based fees, which could affect the amount of interest the Company earns on cash, cash equivalents and short-term investments and the interest rates the Company pays on borrowings under its credit facilities. EQM's senior notes are fixed rate and thus do not expose the Company to fluctuations in itsCompany’s results of operations, liquidity or financial position. Credit risk and related management is further discussed under “Credit Risk” in Part I, “Item 3. Quantitative and Qualitative Disclosures About Market Risk” of this Quarterly Report on Form 10-Q.
Increases in natural gas prices do not necessarily result in corresponding increases to the production forecasts of the Company's customers. Even when natural gas prices have been commercially attractive, certain of the Company's customers maintained largely flat production forecasts in light of, among other things, the absence of incremental takeaway capacity from the Appalachian Basin and the Company's customers may still maintain flat or modest increases to production forecasts based on various factors, which could include regional takeaway capacity limitations, access to capital, investor expectations regarding free cash flow, a desire to reduce or refinance leverage or other factors.
Additionally, lower natural gas prices (including regionally), corporate capital allocation strategies or regional takeaway constraints, could cause producers to determine in the future that drilling activities in areas outside of the Company's current areas of operation are strategically more attractive to them.
Many of the Company’s customers, including EQT, have entered into long-term firm reservation gathering, transmission and water services contracts or contracts with MVCs or ARCs, as applicable, on the Company's systems and approximately 70% of the Company's operating revenues for the nine months ended September 30, 2023 was generated by firm reservation fee revenues. The Company believes that such contract structure is advantageous to its overall business, although significant declines in gas production in the Company's areas of operations would likely adversely affect the Company's results of operations, financial condition and liquidity from changesas approximately 30% of the Company’s operating revenues for the nine months ended September 30, 2023 was generated by volumetric-based fee revenues. See "Our exposure to direct commodity price risk may increase in market interest rates. Changes in interest rates dothe future and NYMEX Henry Hub futures prices affect the fair value, and may affect the realizability, of EQM's fixed rate debt. See Notes 9 and 1potential cash payments to us by EQT pursuant to the Company's annual combined consolidated financial statementsEQT Global GGA." and “We generate a substantial majority of our revenues from EQT. Therefore, we are subject to business and liquidity risks of EQT, and any decrease in EQT’s drilling or completion activity (or significant production curtailments) or a shift in such activity away from our assets could adversely affect our business and operating results. Various factors have affected and may further affect our ability to realize the benefits associated with the EQT Global GGA at the time of its execution." included in Part I, "Item 1A. Risk Factors" in the Registration StatementCompany's Annual Report on Form 10-K for the year ended December 31, 2022.
Unless the Company is successful in attracting and retaining new customers, the Company's ability to maintain or increase the capacity subscribed and volumes transported, gathered or provided on its systems above MVC levels will be dependent on receiving consistent or increasing commitments and production from its existing customers, which may be impacted by regional takeaway capacity limitations, commodity prices, including regional commodity prices and/or other factors, including corporate capital allocation strategies. While EQT has dedicated a substantial portion of its core acreage in southwestern Pennsylvania and West Virginia to the Company and has entered into long-term firm gathering and transmission contracts and contracts with MVCs on certain of the Company's systems, EQT may determine in the future that drilling or continuing to produce gas from existing wells in the Company's areas of operations is not economical above the amount to fulfill its required MVCs or otherwise strategically determine to curtail volumes on the Company's systems. Other than with respect to its MVCs and other firm commitments under existing contracts, EQT is under no contractual obligation to continue to develop its acreage dedicated to the Company. See also "Outlook" in Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q for a discussion of debtthe EQT Global GGA and the 2021 Water Services Agreement.
38
Table of Contents

The fair value measurements, respectively. The Company may from time to time hedgeof the interestCompany’s derivative instruments is, in part, determined by estimates of the NYMEX Henry Hub natural gas forward price curve. A hypothetical 10% increase in NYMEX Henry Hub natural gas futures prices would increase the valuation of the Company’s derivative instruments by approximately $4.2 million, while a hypothetical 10% decrease in NYMEX Henry Hub natural gas futures prices would decrease the valuation of the Company’s derivative instruments by approximately $4.8 million. This fair value change assumes volatility based on portionsprevailing market parameters at September 30, 2023. See Note 7 and "Outlook" in Part I, "Item 2. Management's Discussion and Analysis of its borrowings underFinancial Condition and Results of Operations" of this Quarterly Report on Form 10-Q for a discussion of the credit facilities in order to manage risks associated with floating interest rates.Henry Hub cash bonus payment provision.
Credit Risk. The Company is exposed to credit risk, which is the risk that it may incur a loss if a counterparty fails to perform under a contract. The Company actively manages its exposure to credit risk associated with customers through credit analysis, credit approval credit limits and monitoring procedures. For certain transactions, the Company may requestrequests letters of credit, cash collateral, prepayments or guarantees as forms of credit support. Equitrans, L.P.'s FERC tariffs require tariff customers that do not meet specified credit standards to provide three months of credit support; however, the Company is exposed to credit risk beyond this three-month period when its tariffs do not require its customers to provide additional credit support. For some of the Company's more recent long-term contracts associated with system expansions, it has entered into negotiated credit agreements that provide for enhanced forms ofother credit support if certain credit standards are not met. The Company has historically experienced only minimal credit losses in connection with its receivables. Approximately 80% of revenues were from investment grade counterparties for the nine months ended September 30, 2018.
The Company is exposed to the credit risk of EQT,its customers, including its largest customer.customer, EQT, including as a result of changes in customer credit ratings, liquidity and access to capital markets. In connection with EQM's IPOAugust 2023, Moody's upgraded EQT's public senior debt to an investment grade credit rating and as of September 30, 2023, EQT's public debt has investment grade credit ratings from S&P, Fitch and Moody's. See "Credit Letter Agreement" included in 2012,Part I, "Item 1. Business" of the Company's Annual Report on Form 10-K for the year ended December 31, 2022, for information regarding the Credit Letter Agreement and associated EQT credit rating requirements. In addition, EQT has guaranteed allthe payment obligations of certain of its subsidiaries, up to a maximum amount of $50$115 million, due$131 million and payable$30 million related to Equitrans, L.P. by EQT Energy, LLC, onegathering, transmission and water services, respectively, across all applicable contracts, for the benefit of Equitrans, L.P.'s largest customers and a wholly owned subsidiarythe subsidiaries of EQT. The EQT guaranty will terminate on November 30, 2023 unless terminated earlier by EQT upon 10 days' written notice. At September 30, 2018, EQT's public senior debt had an investment grade credit rating.the Company providing such services. See Note 1114 to the Company's annual combined consolidated financial statements included in the Registration Statementin the Company's Annual Report on Form 10-K for the year ended December 31, 2022, for further discussion of the Company's exposure to certain credit risk.risks.
Commodity Prices. The Company's business is dependent on the continued availability of natural gas production and reserves in its areas of operation. Low prices for natural gas, including those resulting from regional basis differentials, could adversely affect development of additional reserves and production that is accessible by the Company's pipeline and storage assets, or lower drilling activity, which would decrease demand for the Company's water services. Lower regional natural gas prices could cause producers to determine in the future that drilling activities in areas outside of the Company's current areas of operation are strategically more attractive to them. EQT, or third-party customers on the Company's systems, may reduce capital spending in the future based on commodity prices or other factors. Unless the Company is successful in attracting and retaining unaffiliated third-party customers, which accounted for 45% of transmission and storage revenues, 20% of gathering revenues and 7% of water service revenues for the nine months ended September 30, 2018, its ability to maintain or increase the capacity subscribed and volumes transported under service arrangements on its transmission and storage system, the volumes gathered on its gathering systems, or the volumes of water provided by its water service business will be dependent on receiving consistent or increasing commitments from EQT. While EQT has dedicated acreage to the Company and has entered into long-term firm transmission and gathering contracts on the Company's systems, EQT may determine in the future that drilling in the Company's areas of operations is not economical or that drilling in areas outside of the Company's current areas of operations is strategically more attractive to it. EQT is under no contractual obligation to continue to develop its acreage dedicated to the Company.
For the year ended December 31, 2017, approximately 84% of total revenues, and 60% of total revenues on a pro forma basis, were derived from firm reservation fees. As a result, the Company believes that short- and medium-term declines in volumes of gas produced, gathered, transported or stored on its systems will not have a significant effect on its results of operations, liquidity, financial position or ability to pay distributions because these firm reservation fees are paid regardless of volumes supplied to the system by customers. Longer term price declines could have an effect on customer creditworthiness and related ability to pay firm reservation fees under long-term contracts which could affect the Company's results of operations, liquidity or financial position. Additionally, long-term declines in gas production in the Company's areas of operations would limit the Company's growth potential.
Other Market Risks. The EQM Facility is underwritten by a syndicate of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by EQM. No one lender of the financial institutions in the syndicate holds more than 10% of the facility. EQM's large syndicate group and relatively low percentage of participation by each lender is expected to limit EQM's exposure to disruption or consolidation in the banking industry.

37

Table of Contents



Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial Officer, an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), was conducted as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
Internal Control over Financial Reporting. The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules that generally require every company that files reports with the SEC to include in their annual reports a report of management on the company's internal control over financial reporting and the registered public accounting firm's attestation report. Based on transition period relief established by the SEC rules that are applicable to new public companies, the Company is not required to include a report of management on the Company's internal control over financial reporting or our registered public accounting firm's attestation report as part of an annual report until the filing of our Annual Report on Form 10-K for the year ending December 31, 2019. In its Annual Report on Form 10-K for the year ending December 31, 2019, management and the Company's independent registered public accounting firm will be required to provide an assessment as to the effectiveness of the Company's internal control over financial reporting.
Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the third quarter of 20182023 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

38
39

Table of Contents




PART II.  OTHER INFORMATION
Item 1. Legal Proceedings
The Company and EQGP are not currently partiesFrom time to any legal proceedings; however, in the ordinary course of business,time, various legal and regulatory claims and proceedings are pending or threatened against EQM.the Company and its subsidiaries. While the amounts claimed may be substantial, EQMthe Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. EQMThe Company accrues legal and other direct costs related to loss contingencies when incurred. EQMThe Company establishes reserves whenever it believes it to be appropriate for pending matters. Furthermore, after consultation with counsel and considering availablethe availability, if any, of insurance, EQMthe Company believes, although no assurance can be given, that the ultimate outcome of any matter currently pending against EQMit or any of its consolidated subsidiaries will not materially adversely affect its business, financial condition, results of operations, liquidity or ability to make distributionspay dividends to EQM unitholders, including the Company and EQGP.its shareholders.
Environmental Proceedings
Allegheny Valley Connector, CambriaPratt Storage Field. On October 31, 2018, a gas explosion occurred in Morgan Township, Greene County, Pennsylvania. Between September 2015 and February 2016, EQM, asPennsylvania (the Incident). Following the operator of the Allegheny Valley Connector (AVC) facilities, which, at that time, were owned by EQT, received eight notices of violation (NOVs) fromexplosion, the Pennsylvania Department of Environmental Protection (PADEP)(the PADEP), the Pennsylvania Public Utilities Commission and the PHMSA began investigating the Incident. In January 2020, the PADEP notified the Company that it was required to submit an investigation report pursuant to the state’s gas migration regulations due to the Incident's proximity to the Company's Pratt Storage Field assets. The Company, while disputing the applicability of the regulations, submitted a report to the PADEP in March 2020. In September 2020, the PADEP responded to the Company’s investigation report with a request for additional information. The Company responded to the September 2020 request. Over the next months the Company provided many responses to the PADEP’s continuing information requests.The PADEP issued a final report and closed its investigation and the Company does not expect further inquiry from the PADEP on this matter. On October 23, 2023, the Company received permission from the FERC to plug and abandon the well in the Pratt Storage Field that is the subject of the PADEP’s investigation of the Company.Additionally, the Company is continuing to defend in a civil litigation related to the Incident.
On October 30, 2023, the Company received a criminal complaint from the State Attorney General’s Office charging the Company with violations of the Clean Streams Law (the Pratt Complaint). In response to the Pratt Complaint, the Company intends to fully assert its rights and defenses to the claims raised. The NOVsPratt Complaint carries the possibility of a monetary sanction, that if imposed could result in a fine in excess of $300,000. The Pratt Complaint could also cause reputational or other adverse impacts.
Rager Mountain Storage Field. On November 6, 2022, the Company became aware of natural gas venting from one of the storage wells, well 2244, at Equitrans, L.P.’s Rager Mountain natural gas storage facility (Rager Mountain facility), located in Jackson Township, a remote section of Cambria County, Pennsylvania. The venting of natural gas from well 2244 was halted on November 19, 2022. The PADEP, the PHMSA and other investigators are continuing to conduct civil and criminal investigations of the incident and the Company is cooperating in such investigations. On December 7, 2022, the Company and its subsidiary Equitrans, L.P. each separately received an order from the PADEP alleging, in connection with earth disturbance activities undertaken to halt the venting of natural gas from well 2244, (i) in the case of the order received by the Company, violations of Pennsylvania’s Clean Streams Law and requiring certain remedial actions and (ii) in the case of the order received by Equitrans, L.P., violations of Pennsylvania’s 2012 Oil and Gas Act, Clean Streams Law and Solid Waste Management Act and requiring certain remedial actions. On December 8, 2022, the PADEP submitted a compliance order to Equitrans, L.P. relating to certain alleged violations of law in respect of wells at the Rager Mountain natural gas storage field and the venting of natural gas, including from well 2244. The December 8, 2022 order also prohibited Equitrans, L.P. from injecting natural gas into the storage wells at the Rager Mountain facility. The Company and Equitrans, L.P. disputed aspects of the applicable orders, and on January 5, 2023, the Company and Equitrans, L.P., as applicable, appealed each of the orders to the Commonwealth of Pennsylvania Clean Streams Law in connection with inadvertent releasesEnvironmental Hearing Board. Additionally, the Company and Equitrans, L.P., as applicable, have received, and may continue to receive, notices of sediment and bentonite to water that occurred while drilling for a pipeline replacement project in Cambria County, Pennsylvania. EQT and EQM immediately addressed the releases and fully cooperated with the PADEP. In October 2016, EQM acquired the AVC facilities from EQT, including any future obligationsviolation (NOVs) related to these releases. On November 1, 2018, EQMthe incident which allege violations of various Pennsylvania statutes and regulations. Equitrans, L.P. and the PADEP agreedentered into a Stipulation of Settlement on April 12, 2023 that, among other things, resulted in the PADEP rescinding its December 8, 2022 order and Equitrans, L.P. withdrawing its appeal of such order. Equitrans, L.P.’s and the Company's appeals of the December 7, 2022 orders remain pending and negotiations regarding a potential consent order with respect to such NOVs remain ongoing. On December 29, 2022, the PHMSA issued the Company a ConsentNotice of Proposed Safety Order that included proposed remedial requirements related to the Rager Mountain natural gas storage field incident, including, but not limited to, completing a root cause analysis. The Company addressed certain proposals in advance of an order from the agency. These efforts included conducting testing, evaluating other wells at the Rager field and Agreement that requires ongoing monitoringhiring a third-party specialist firm to undertake a root cause analysis, and paymentsubsequently on May 26, 2023, the PHMSA issued a consent order to the Company incorporating the terms of a civil penaltyconsent agreement between the parties, which, among other things, required the completion of $163,000.a root cause analysis and a remedial
MVP Matters
40
Table of Contents
The MVP Joint Venture is currently defending certain agency actions
work plan, and judicial challengesspecified that the Company may not resume injection operations at the Rager Mountain facility until authorized by the PHMSA. As discussed in “Transmission Results of Operation” in Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q, in August 2023, the Company submitted a root cause analysis to the MVP mainline project that must be resolved beforePHMSA in accordance with the project can be completed, includingconsent order and later submitted a remedial work plan and, following completion of all actions in its remedial work plan, an injection plan to the following:
In February 2018, the Sierra Club filed a lawsuit in the Fourth Circuit Court of Appeals challenging the use of U.S. Army Corps of Engineers Nationwide Permit 12 in West Virginia for the MVP project. In May 2018, the Army Corps suspended its Nationwide Permit 12 verifications for four river crossings in West Virginia. Plaintiffs then sought a preliminary injunction staying the Army Corps' approvalPHMSA seeking authority to proceed under Nationwide Permit 12 forresume injections at Rager Mountain using all stream crossings in West Virginia, arguing that the project could not meet one of the express conditions of Nationwide Permit 12 in West Virginia limiting the duration of stream crossings. In June 2018, the Fourth Circuit granted the motion and stayed the Army Corps' verification that Nationwide Permit 12 could be used to authorize stream crossings in West Virginia. Accordingly, the MVP Joint Venture temporarily stopped construction of the portions of the MVP project affected by this ruling. The Army Corps reinstated its verifications for four of the West Virginia stream crossings in July 2018, and then moved for the Fourth Circuit to lift the stay. The court granted the Army Corps' motion, on August 28, 2018, and lifted its stay. Following the court's ruling, MVP resumed construction of the portions of the MVP affected by the stay.wells except three, which remain disconnected. On October 2, 2018,2023, the Fourth Circuit issuedPHMSA approved the Company’s injection plan. The Company began injections at Rager Mountain on October 5, 2023. On October 5, 2023, Equitrans, L.P. received a preliminary order vacatingNOV from the Army Corps’ Nationwide Permit 12 authorizationsPADEP related to the release of uncontrolled hydrocarbons to the atmosphere during the Rager Mountain natural gas storage field incident.
If penalties are pursued and ultimately imposed related to the Rager Mountain natural gas storage field incident, the penalties are expected to result in West Virginia. On November 27, 2018,monetary sanctions in excess of $300,000. While the court issued its final order. AsCompany does not believe that penalties, if imposed, would have a material adverse impact on the Company's financial condition, results of operations or liquidity, there can be no assurance as of the filing of this Quarterly Report on Form 10-Q regarding the scope of potential (or ultimately actual) financial or other impacts to the Company as a result of the order, Rager Mountain natural gas storage field incident.
MVP cannot perform construction activities in watersMatters
There remain certain legal and wetlands alongregulatory matters relevant to the 160-mile route that is covered byMVP project, the Huntington District. In August,outcome of which could have adverse effects with respect to the West Virginia Departmentproject and consequently the Company, including certain matters pending with the U.S. Court of Environmental Protection (WVDEP) initiated a regulatory process to revise West Virginia’s Clean Water Act Section 401 Certification of the Army Corps Nationwide Permit. Upon receipt of West Virginia’s final revised 401 Certification of the Nationwide Permit, MVP anticipates that the Corps will initiate its regulatory process to republish the Nationwide Permit for West Virginia that will incorporate West Virginia’s revised 401 Certification. MVP will reapplyAppeals for the Nationwide Permit 12 verification. Allowing time to addressDistrict of Columbia (D.C. Circuit) and the issues raised in the court's final order, MVP now expects to receive the revised Nationwide Permit within the first half of 2019. However, MVP cannot guarantee that the agencies will act in a timely manner or that the action will not be challenged.PHMSA described below:
•Jefferson National Forest (JNF) Crossing and Associated Authorizations. In June 2018, following the Fourth Circuit's West Virginia decision, the Sierra Club, filed a petition in theet al. v. U.S. Forest Service, et al., consolidated under Case No. 17-2399, Fourth Circuit seeking review and a stay of the Army Corps' decision to grant authorization under Nationwide Permit 12 for stream crossings in Virginia. The court denied the Sierra Club's request for a stay on August 28, 2018. On October 5, 2018, the Army Corps’ Norfolk District suspended its authorizations under Nationwide Permit 12 for stream and waterbody crossings in Virginia pending the resolution of the Fourth Circuit matter discussed above regarding Nationwide Permit 12 authorizations in the Army Corps’ Huntington District.

39

Table of Contents



On October 19, 2018, in response to the Nationwide Permit 12 verification suspensions in the Army Corps’ Huntington and Norfolk Districts discussed above, the Army Corps’ Pittsburgh District suspended its authorizations under Nationwide Permit 12 for stream and wetlands crossings in northern West Virginia.
In a different Fourth Circuit lawsuit, filed in December 2017, the Sierra Club challenged a U.S. Department of Interior, Bureau of Land Management (the BLM)(BLM) decision to grant a right-of-way to the MVP Joint Venture and a U.S. Forest Service (the USFS)(USFS) decision to amend its management plan to accommodate the MVP, both affectingof which affected the MVP's 3.6-mileapproximate 3.5-mile segment in the Jefferson National ForestJNF in Virginia. On July 27, 2018, agreeing in part with the courtSierra Club, the Fourth Circuit vacated the BLM and USFS decisions, finding fault with USFS' analysis of erosion and sedimentation effects and BLM's analysisdecisions. On January 11, 2021, the MVP Joint Venture received final approval of the practicalityRecord of alternate routes. Decision from the USFS and, on January 15, 2021, the BLM issued a new required right-of-way permit for the MVP’s 3.5-mile segment in the JNF in Virginia (2021 JNF Right-of-Way). On January 11, 2021, Sierra Club, et al. filed a petition with the Fourth Circuit to reverse the USFS approval of the Record of Decision and, on January 15, 2021, filed a petition with the Fourth Circuit challenging BLM’s grant of the 2021 JNF Right-of-Way. See Wild Virginia, et al. v. United States Forest Service, et al., No. 21-1039(L).On January 25, 2022, the Fourth Circuit, agreeing in part with the petitioners, vacated and remanded the Record of Decision and the 2021 JNF Right-of-Way. In May 2023, the MVP Joint Venture received a new Record of Decision from the USFS and was issued a new right-of-way permit by the BLM (2023 JNF Right-of-Way). On June 2, 2023, The Wilderness Society filed a petition with the Fourth Circuit to reverse the USFS’ approval of the new Record of Decision (No. 23-1592) and the BLM’s grant of the 2023 JNF Right-of-Way (No. 23-1594). See The Wilderness Society v. U.S. Forest Service, et al., consolidated under Case No. 23-1592, Fourth Circuit. Given provisions in the Fiscal Responsibility Act of 2023 discussed in “Mountain Valley Pipeline” in "Outlook" in Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q divesting courts of jurisdiction to review agency actions on approvals necessary for MVP’s construction and initial operation, the MVP Joint Venture and the U.S. Department of Justice filed motions to dismiss the proceeding on June 5, 2023 and June 15, 2023, respectively. The Wilderness Society subsequently moved for a stay of the authorizations pending review and a temporary administrative stay of the authorizations on July 3, 2023 and July 6, 2023, respectively. On July 10, 2023, the Fourth Circuit granted the stay pending review in a summary order. The MVP Joint Venture subsequently filed on July 14, 2023, an emergency application to vacate the stay with the U.S. Supreme Court which was granted on July 27, 2023. On August 11, 2023, the MVP Joint Venture’s and the U.S. Department of Justice’s motions to dismiss were granted by the Fourth Circuit. No party sought rehearing. The Fourth Circuit subsequently issued its mandate closing the proceeding.
On August 3, 2018, citing the court'scourt’s vacatur and remand in Sierra Club, et al. v. U.S. Forest Service, et al., consolidated under Case No. 17-2399, the FERC issued a stop work order for the entire pipeline pending the agency actions on remand. The FERC modified its stop on work order on August 29, 2018 to allow work to continue on all but approximately 25 miles of the project.project (the Exclusion Zone) and made certain other limited modifications of the stop work order. On October 9, 2020, the FERC authorized construction to resume project-wide (as it had been stopped by the FERC on October 15, 2019 in relation to a separate matter), other than with respect to the Exclusion Zone, which required additional authorization. On December 17, 2020, the FERC again modified the stop work order and authorized construction to resume in 17 miles of the Exclusion Zone. The FERC’s October 9, 2020 and December 17, 2020 actions are the subject of challenges filed by the Sierra Club in Sierra Club, et al. v. FERC, Case No. 20-1512
41
Table of Contents

(consolidated with No. 21-1040), D.C. Circuit Court of Appeals on December 22, 2020 and January 25, 2021, respectively. Briefing in Sierra Club, et al. v. FERC, Case No. 20-1512 (consolidated with No. 21-1040), D.C. Circuit Court of Appeals resulted in the D.C. Circuit issuing a decision on May 26, 2023, rejecting all of the petitioners’ challenges except one and remanding without vacatur the October and December 2020 FERC orders on the basis of the FERC inadequately having explained whether a supplemental environmental impact statement under National Environmental Policy Act (NEPA) was necessary before allowing construction to resume pursuant to the orders. On June 28, 2023, the FERC authorized the MVP Joint Venture has resumedto resume all construction of those portions ofactivities in all MVP project locations, including the pipeline.
On October 10, 2018, the Fourth Circuit granted MVP’s petition for rehearing clarifying that the July 27, 2018 order did not vacate theremaining portion of the BLM’s RecordExclusion Zone. No party sought rehearing of Decision authorizing a right-of-waythe FERC’s June 28, 2023 authorization. Given provisions in the Fiscal Responsibility Act of 2023 discussed in "Mountain Valley Pipeline" in "Outlook" in Part I, "Item 2. Management's Discussion and temporary use permit for MVP to cross the WestonAnalysis of Financial Condition and Gauley Bridge Turnpike Trail in Braxton County West Virginia. On October 15, 2018, MVP filed withResults of Operations" of this Quarterly Report on Form 10-Q, on July 31, 2023, the FERC filed a requestmotion to modifydismiss Case No. 20-1512 (consolidated with No. 21-1040), and on August 25, 2023, the August 3, 2018 stop work order to allow MVP to complete bore and install the pipeline under the Weston and Gauley Bridge Turnpike Trail. On October 24, 2018, the FERCD.C. Circuit granted the requestmotion to dismiss and allowed constructionfurther ordered that the petitions for review be dismissed as moot and the decision of May 26, 2023, be vacated. No party sought rehearing. The D.C. Circuit subsequently issued its mandate closing the proceeding.
Challenges to resume at this location.
FERC Certificate, D.C. Circuit. Multiple parties have sought judicial review of the FERC'sFERC’s order issuing a certificate of public convenience and necessity to the MVP Joint Venture and/or the exercise by the MVP Joint Venture of eminent domain authority. There areOn February 19, 2019, the D.C. Circuit issued an order rejecting multiple consolidated petitions before the Court of Appeals for the District of Columbia Circuit seeking direct review of the FERC order under the Natural Gas Act. Those petitioners have requested a stayAct of 1938, as amended (NGA) and certain challenges to the FERC's order pending the resolution of the petitions, which the FERC andexercise by the MVP Joint Venture have opposed. The Court of Appeals denied the request for a stay on August 30, 2018. Briefing on the merits of theeminent domain authority in Appalachian Voices, et al. v. FERC, et al., consolidated under Case No. 17-1271. No petitions for review is scheduled to be completedrehearing or petitions for rehearing en banc were filed by December 2018.the April 5, 2019 deadline. The mandate was issued on April 17, 2019. Another group of parties filed a complaint in the U.S. District Court for the District of Columbia asserting that the FERC'sFERC’s order issuing certificates is unlawful on constitutional and other grounds.grounds in Bold Alliance, et al. v. FERC, et al., Case No. 17-1822. The district court plaintiffs seeksought declaratory relief as well as an injunction preventing the MVP Joint Venture from developing its project or exercising eminent domain authority. In December 2017 and January 2018, the FERC and the MVP Joint Venture, respectively, moved to dismiss the petitions for lack of subject matter jurisdiction. The court granted the motion and dismissed thisplaintiffs’ complaint on September 28, 2018.
Several landowners have challenged On October 26, 2018, plaintiffs appealed the constitutionalitydecision in Case No. 17-1822 to the D.C. Circuit in Bold Alliance, et al. v. FERC, et al., Case No. 18-5322. On December 3, 2018, the FERC, as appellee, filed a joint motion with the appellants to hold Case No. 18-5322 in abeyance pending completion of the eminent domain provisionsappeals of the Natural Gas Act.final agency orders related to the MVP certificate in consolidated Case No. 17-1271 and Atlantic Coast Pipeline’s (ACP) certificate. The U.S. District CourtMVP Joint Venture filed a motion to dismiss the case as to some of the plaintiffs. On February 15, 2019, the D.C. Circuit entered an order holding this appeal in abeyance pending rulings on the appeals from the ACP and MVP FERC proceedings. The ACP petitioners on November 16, 2022, filed a joint motion for voluntary dismissal of all petitions for review pertaining to ACP, except for the Western DistrictBold Alliance proceeding. The court granted the motion on November 17, 2022. On January 5, 2023, the D.C. Circuit entered an order holding the Bold Alliance proceeding in abeyance pending further order of Virginia dismissed the challenge for lackcourt and requiring the parties to file motions to govern future proceedings within 60 days of subject matter jurisdiction in January 2018. The Fourth Circuit affirmed this judgment on appeal in July 2018. In October 2018, the plaintiffs petitioned the U.S. Supreme Court disposition of the petition for a writ of certiorari with respect to these jurisdictional rulings. The Court has not yet issuedin Bohon et al. v. FERC et al., discussed below. On June 26, 2023, the court entered an order continuing the abeyance of Bold Alliance until 30 days after the disposition of Case No. 20-5203, discussed below.
Similarly, another group of parties filed a determination on that petition.
Several landowners have filed challenges in various U.S. District Courts to the condemnation proceedings by which the MVP Joint Venture obtained access to their property. In each case, the district court found that the MVP Joint Venture was entitled to immediate possession of the easements, and the landowners appealed to the Fourth Circuit. The Fourth Circuit has consolidated these cases and held oral argument in September 2018. The court has not yet issued a decision. If one or more of these challenges is successful, it could prevent the MVP Joint Venture from constructing all or a portion of the pipeline or require the MVP Joint Venture to seek an alternate route for the pipeline or a portion thereof, which could require additional regulatory proceedings before the FERC and other interested federal and state agencies, the outcome of which we cannot predict. A successful challenge could also increase the cost of obtaining necessary rights of way to construct and operate the pipeline.
In November 2017, subsequent to Fayette County, West Virginia's denial of the MVP Joint Venture's rezoning request to permit construction of a compressor station, the MVP Joint Venture brought suitcomplaint in the U.S. District Court for the Southern District of West Virginia seeking a judgment declaringColumbia in Bohon et al. v. FERC et al., Case No. 20-00006, asserting that the County's denial was preempted by federal law and a permanent injunction preventing the county from enforcing the zoning constraint with respectdelegation of authority to the FERC under the NGA violates the nondelegation doctrine and separation-of-powers principle of the U.S. Constitution. The MVP project.Joint Venture and the FERC filed motions to dismiss which were granted by the court. On July 6, 2020, the landowners filed a notice of appeal to the D.C. Circuit in Case No. 20-5203. On November 30, 2020, appellants asked the D.C. Circuit to overturn the decision of the lower court. The D.C. Circuit issued an order on September 15, 2021 denying appellants’ motion for summary reversal of the decision of the lower court and supplemental briefing was completed as of October 6, 2021. On June 21, 2022, the D.C. Circuit upheld the lower court’s decision to dismiss the lawsuit. On September 15, 2022, the petitioners filed a petition for writ of certiorari with the U.S. Supreme Court. The FERC and the MVP Joint Venture filed responses to the petition in November 2022. On April 24, 2023, the U.S. Supreme Court granted the petition for certiorari, vacated the judgment, and remanded the case to the D.C. Circuit for further consideration in light of the U.S. Supreme Court's April 14, 2023 opinion in Axon Enterprises, Inc. v. FTC. The D.C. Circuit subsequently issued an order authorizing, among other things, the parties to address in their supplemental briefing the implications of Section 324 of the Fiscal Responsibility Act of 2023 in addition to Axon. Supplemental briefing in the Bohon matter is scheduled to conclude on November 13, 2023. On October 24, 2023, the D.C. Circuit denied a stay motion filed by the petitioners. If any of these challenges were successful, it could result in the MVP Joint Venture’s certificate of public convenience and necessity being vacated and/or additional proceedings before the FERC, the
42
Table of Contents

outcome of which the Company cannot ensure, and cause a delay or further delay in the full in-service date for the MVP project (and consequent impacts related to such delay), or otherwise have adverse effects.
Due to the uncertainty regarding the timing of permitting and the outcome of legal challenges facing the MVP project, on August 25, 2020, the MVP Joint Venture filed a request with the FERC for and, on October 9, 2020, the FERC granted, an extension of time to complete the MVP project for an additional two years through October 13, 2022. On December 22, 2020, a challenge to the FERC’s action to grant an extension of time to complete the MVP project was filed in the D.C. Circuit in Sierra Club, et al. v. FERC, Case No. 20-1512 (consolidated with No. 21-1040, D.C. Circuit). Briefing in Sierra Club, et al. v. FERC, Case No. 20-1512 (consolidated with No. 21-1040, D.C. Circuit), was completed in January 2022 and oral argument occurred on April 7, 2022. On May 26, 2023, the D.C. Circuit held that the petitioners’ challenge to the October 9, 2020 extension order was moot. Separately, on June 24, 2022, citing litigation and regulatory matters, the MVP Joint Venture filed a request with the FERC for an extension of time to complete the MVP project through October 13, 2026, which was granted on August 23, 2022. Parties filed timely requests for rehearing with the FERC regarding such approval, which were denied by the FERC on October 24, 2022 and February 17, 2023. Parties also filed petitions for review of such approval with the D.C. Circuit (Case Nos. 22-1330 and 23-1117, which were consolidated). On June 21, 2023, the MVP Joint Venture filed a motion to dismiss for lack of jurisdiction or, in the alternative, for summary judgment in February 2018. The court granted MVP's motiondenials of the consolidated petitions. Petitioners on June 22, 2023 moved for summary judgment and dismissedvoluntary dismissal of the complaint on August 29, 2018. The court entered a judgment in favor ofconsolidated petitions, which the MVP Joint Venture on November 8, 2018.
In August 2017,opposed. On September 7, 2023, the Greenbrier River Watershed Association appealedD.C. Circuit issued an order granting the petitioners’ motion for voluntary dismissal with prejudice and dismissing as moot the MVP project's Natural Stream Preservation Act Permit obtained from the West Virginia Environmental Quality Board (the WVEQB) for the Greenbrier River crossing. Petitioners alleged that the issuanceJoint Venture’s cross-motions based on Section 324 of the permit failed to comply with West Virginia's Water QualityFiscal Responsibility Act of 2023. That same day, the D.C. Circuit issued its mandate closing the proceeding.

40

Table•Appalachian Voices, et al. v. U.S. Dep’t of Contents



Standards for turbidity and sedimentation. WVEQB dismissed the appeal in June 2018. In July 2018, the Greenbrier River Watershed Association appealed the decision to theInterior, et al., Fourth Circuit Court of Summers County, askingAppeals, Case No. 20-2159. In August 2019, Wild Virginia and certain other petitioners filed a petition in the court to remand the permit with instructions to impose state-designated construction windows and pre- and post-construction monitoring requirements as well as a reversalFourth Circuit in Wild Virginia et al. v. United States Department of the WVEQB's decision thatInterior; Case No. 19-1866, to challenge the permitMVP Joint Venture’s Biological Opinion and Incidental Take Statement issued by FWS which was lawful.approved in November 2017 (the Original BiOp). On September 18, 2018,October 11, 2019, the Fourth Circuit Court granted a stay. A hearing onissued an order approving the merits was held onpetitioners’ requested stay of the Original BiOp and holding the litigation in abeyance until January 11, 2020. On October 23, 2018. The court has not yet15, 2019, the FERC issued a decision. In the event of an adverse decision,order requiring the MVP Joint Venture would appeal or workto cease all forward-construction progress (the FERC modified this order on October 9, 2020 and December 17, 2020 and on June 28, 2023, the FERC issued an order authorizing all construction activities). On September 4, 2020, the FWS issued the MVP Joint Venture a new Biological Opinion and Incidental Take Statement (the 2020 BiOp) for the MVP project and the Fourth Circuit subsequently dismissed the litigation regarding the Original BiOp. On October 27, 2020, Appalachian Voices et al. filed a petition with the West VirginiaFourth Circuit challenging the 2020 BiOp. On February 2, 2022, the Fourth Circuit vacated and remanded the 2020 BiOp. On February 28, 2023, the FWS issued a new Biological Opinion and Incidental Take Statement for the MVP project (the 2023 BiOp). The petitioners appealed the 2023 BiOp to the Fourth Circuit on April 10, 2023. See Appalachian Voices, et al. v. U.S. Dep’t of Interior, et al., Fourth Circuit Court of Appeals Case No. 23-1384. On April 24, 2023, the petitioners filed an administrative stay with the FWS, which stay request was denied on April 27, 2023. The petitioners filed a motion to stay the 2023 BiOp in the Fourth Circuit on April 27, 2023. On June 5, 2023, given provisions in the Fiscal Responsibility Act of 2023 discussed in “Mountain Valley Pipeline” in "Outlook" in Part I, "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q divesting courts of jurisdiction to review agency actions on approvals necessary for MVP’s construction and initial operation, the MVP Joint Venture and the U.S. Department of Environmental ProtectionJustice filed motions to resolvedismiss the issues identifiedproceeding on June 5, 2023 and June 15, 2023, respectively. On July 11, 2023, in a summary order, the Fourth Circuit granted the petitioners’ request for stay of the 2023 BiOp pending review. The MVP Joint Venture subsequently filed on July 14, 2023, an emergency application to vacate the stay with the U.S. Supreme Court which was granted on July 27, 2023. On August 11, 2023, the MVP Joint Venture’s and the U.S. Department of Justice’s motions to dismiss were granted by the court.Fourth Circuit. No party sought rehearing. The Fourth Court subsequently issued its mandate closing the proceeding.

•Mountain Valley Pipeline PHMSA Consent Order. On October 3, 2023, the PHMSA issued a consent order incorporating the terms of a consent agreement entered into by the PHMSA and the Company as the operator of the MVP project. The consent agreement resolves the Notice of Proposed Safety Order (NOPSO) that the PHMSA issued to the Company on August 11, 2023, for the MVP project, without admission or denial of any of the allegations in the NOPSO. The consent agreement outlines the steps being taken by the MVP Joint Venture to responsibly complete construction, including, among other things, enhancing MVP’s existing coating, remediation and inspection processes, mandating or accelerating certain previously planned MVP inline inspections, accelerating the regulatory timeline for conducting cathodic protection surveys, and implementing additional measures to assess cathodic protection following
41
43

Table of Contents




MVP full in-service. Failure to comply with the terms of the consent agreement could have adverse effects on the project, including affecting project timing (and consequent impacts related to any delay).
Item 1A. Risk Factors
The Company incorporates by referenceis subject to a variety of significant risks in addition to the matters set forth under the forward-looking statements section in Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Quarterly Report on Form 10-Q. The Company has identified a number of these risk factors discussed underin Part I, Item 1A, "Risk Factors" includedFactors," in its Annual Report on Form 10-K for the Registration Statement. year ended December 31, 2022, which risk factors, as modified by this Quarterly Report on Form 10-Q, are incorporated herein by reference. These risk factors should be considered carefully in evaluating the Company’s risk profile.
There have been no material changes from the risk factors previously disclosed in these risk factors.the Company's Annual Report on Form 10-K for the year ended December 31, 2022.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities
The following table sets forth the Company's repurchases of equity securities registered under Section 12 of the Exchange Act that occurred during the three months ended September 30, 2023:
Period
Total number of shares purchased (a)
Average price paid per shareTotal number of shares purchased as part of publicly announced plans or programsApproximate dollar value of shares that may yet be purchased under the plans or programs
July 2023 (July 1 - July 31)— $— — $— 
August 2023 (August 1 - August 31)— — — — 
September 2023 (September 1 - September 30)— — — — 
Total— $— — $— 
(a)Reflects shares withheld by the Company to pay taxes upon vesting of restricted stock.
Item 5. Other Information
During the three months ended September 30, 2023, no director or officer of the Company subject to Section 16 of the Exchange Act adopted, terminated or modified a ‘Rule 10b5-1 trading arrangement’ or ‘non-Rule 10b5-1 trading arrangement,’ as each term is defined in Item 408(a) of Regulation S-K.
42
44

Table of Contents




Item 6. Exhibits
Exhibit No.
Document DescriptionMethod of Filing
2.1

Separation and Distribution Agreement, dated as of November 12, 2018, by and among EQT Corporation, Equitrans Midstream Corporation and, solely for certain limited purposes therein, EQT Production Company.Incorporated herein by reference to Exhibit 2.1 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
2.2

Transition Services Agreement, dated as of November 12, 2018, by and between EQT Corporation and Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 2.2 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
2.3

Tax Matters Agreement, dated as of November 12, 2018, by and between EQT Corporation and Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 2.3 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
2.4

Employee Matters Agreement, dated as of November 12, 2018, by and between EQT Corporation and Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 2.4 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
3.1

Amended and Restated Articles of Incorporation of Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 3.1 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
3.2

Amended and Restated Bylaws of Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 3.2 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
3.3

Statement with Respect to Shares of Series A Junior Participating Preferred Stock.Incorporated herein by reference to Exhibit 3.3 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
3.4

Certificate of Amendment to Certificate of Limited Partnership of EQT GP Holdings, LP, dated as of October 12, 2018.Incorporated herein by reference to Exhibit 3.1 to EQGP Holdings, LP’s Form 8-K (#001-37380) filed on October 15, 2018.
3.5

Certificate of Amendment of Certificate of Formation of EQT GP Services, LLC, dated as of October 12, 2018.Incorporated herein by reference to Exhibit 3.2 to EQGP Holdings, LP’s Form 8-K (#001-37380) filed on October 15, 2018.
3.6

Certificate of Amendment to Certificate of Limited Partnership of EQT Midstream Partners, LP, dated as of October 12, 2018.Incorporated by reference herein to Exhibit 3.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on October 15, 2018.
3.7

Certificate of Amendment to Certificate of Formation of EQT Midstream Services, LLC, dated as of October 12, 2018.Incorporated by reference herein to Exhibit 3.2 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on October 15, 2018.
3.8

Second Amended and Restated Agreement of Limited Partnership of EQGP Holdings, LP, dated as of October 12, 2018.Incorporated herein by reference to Exhibit 3.3 to EQGP Holdings, LP’s Form 8-K (#001-37380) filed on October 15, 2018.

43

Table of Contents



3.910.1*

Form of Equitrans Midstream Corporation Senior Executive 2021 MVP Performance Share Units Award Agreement Notice.Second Amended and Restated Limited Liability Company Agreement of EQGP Services, LLC, dated as of October 12, 2018.Incorporated herein by reference to Exhibit 3.410.02 to EQGP Holdings, LP’s Form 8-K (#001-37380) filed on October 15, 2018.
3.10

Second Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of October 12, 2018.Incorporated by reference herein to Exhibit 3.3 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on October 15, 2018.
3.11

Fourth Amended and Restated Limited Liability Company Agreement of EQM Midstream Services, LLC, dated as of October 12, 2018.Incorporated by reference herein to Exhibit 3.4 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on October 15, 2018.
4.1

Shareholder and Registration Rights Agreement, dated as of November 12, 2018, by and between EQT Corporation and Equitrans Midstream Corporation.Incorporated herein by reference to Exhibit 4.1 to Equitrans Midstream Corporation’s Form 8-K10-Q (#001-38629) filed on November 13, 2018.August 1, 2023.
4.210.02*

RightsTransition Agreement dated as of November 13, 2018, by and between Equitrans Midstream Corporation and American Stock Transfer & Trust Company, LLC, which includes the form of Statement of Designation as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C.Thomas F. Karam.Incorporated herein by reference to Exhibit 4.2 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.1

Revolving Credit Agreement, dated as of October 31, 2018, by and among Equitrans Midstream Corporation, PNC Bank, National Association, as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders party thereto.Incorporated herein by reference to Exhibit 10.1 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on October 31, 2018.September 7, 2023.
10.210.3*

ThirdSecond Amendment to Amended and Restated CreditConfidentiality, Non-Solicitation and Non-Competition Agreement, dated as of October 31, 2018,January 15, 2019, by and among EQM Midstream Partners, LP, Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders party thereto.Incorporated herein by reference to Exhibit 10.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on October 31, 2018.
10.3

Omnibus Agreement, dated as of November 13, 2018, by and amongbetween Equitrans Midstream Corporation EQGP Holdings, LP and EQGP Services, LLC.Diana M. Charletta.Incorporated herein by reference to Exhibit 10.1 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.4

Omnibus Agreement, dated as of November 13, 2018, by and among Equitrans Midstream Corporation, EQM Midstream Partners, LP and EQM Midstream Services, LLC.Incorporated herein by reference to Exhibit 10.2 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.September 7, 2023.
10.510.4*

Secondment Agreement, dated as of November 13, 2018, by and among Equitrans Midstream Corporation, EQM Midstream Partners, LP and EQM Midstream Services, LLC.Incorporated herein by reference to Exhibit 10.3 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.6

Working Capital Loan Agreement, dated as of November 13, 2018, between Equitrans Midstream Corporation and EQGP Holdings, LP.Incorporated herein by reference to Exhibit 10.4 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.7

Equitrans Midstream Corporation Directors' Deferred Compensation Plan.Incorporated herein by reference to Exhibit 4.3 to Equitrans Midstream Corporation’s Registration Statement on Form S-8 (File No. 333-228340) filed on November 9, 2018.

44

Table of Contents



10.8

Equitrans Midstream Corporation 2018 Long-Term Incentive Plan.Incorporated herein by referenceSecond Amendment to Exhibit 4.3 to Equitrans Midstream Corporation’s Registration Statement on Form S-8 (File No. 333-228337) filed on November 9, 2018.
10.9

Equitrans Midstream Corporation Executive Short-Term Incentive Plan.Incorporated herein by reference to Exhibit 10.7 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.10

Equitrans Midstream Corporation 2018 Payroll Deduction and Contribution Program.Incorporated herein by reference to Exhibit 10.8 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.
10.11

Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of November 13, 2018, by and between Equitrans Midstream Corporation and Thomas F. Karam.Incorporated herein by reference to Exhibit 10.910.3 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.September 7, 2023.
10.1210.5*

Second Amendment to Amended and Restated Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of November 13, 2018, by and between Equitrans Midstream Corporation and Kirk R. Oliver.Incorporated herein by reference to Exhibit 10.1010.4 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.September 7, 2023.
10.1310.6*

Form of Agreement of Assignment ofSecond Amendment to Confidentiality, Non-Solicitation and Non-Competition Agreement.Agreement, dated as of April 15, 2019, by and between Equitrans Midstream Corporation and Stephen M. Moore.Incorporated herein by reference to Exhibit 10.1110.5 to Equitrans Midstream Corporation’s Form 8-K (#001-38629) filed on November 13, 2018.September 7, 2023.
10.1410.7*

FormFirst Amendment to Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of February 20, 2023, by and between Equitrans Midstream Corporation Director and/or Executive Officer Indemnification Agreement.and Brian P. Pietrandrea.Incorporated herein by reference to Exhibit 10.1610.6 to EquitransForm 8-K (#001-38629) filed on September 7, 2023.
10.8*
Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of October 6, 2023, by and among EQM Midstream Corporation's Registration Statement onPartners, LP, the lender parties thereto and Wells Fargo Bank, National Association, as administrative agent.Incorporated herein by reference to Exhibit 10.1 to Form 10/A8-K (#001-38629) filed on October 18, 2018.10, 2023.
10.9#
Letter Agreement, dated as of October 3, 2023, by and among EQM Gathering Opco, LLC, EQT Corporation, EQT Production Company, Rice Drilling B LLC, and EQT Energy, LLC.Filed herewith as Exhibit 10.9.
10.10#
Fifth Amendment to Gas Gathering and Compression Agreement, dated as of October 4, 2023, by and among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering Opco, LLC.Filed herewith as Exhibit 10.10.
10.11#
Letter Agreement, dated as of October 5, 2023, by and among EQM Gathering Opco, LLC, Equitrans, L.P., EQT Corporation, EQT Production Company, Rice Drilling B LLC, and EQT Energy, LLC.Filed herewith as Exhibit 10.11.
10.12#
Amended and Restated Letter Agreement, dated as of October 12, 2023, by and among EQM Gathering Opco, LLC, EQT Corporation, EQT Production Company, Rice Drilling B LLC, and EQT Energy, LLCFiled herewith as Exhibit 10.12.
31.1

Rule 13(a)-14(a) Certification of Principal Executive Officer.Filed herewith as Exhibit 31.1.
31.2

Rule 13(a)-14(a) Certification of Principal Financial Officer.Filed herewith as Exhibit 31.2.
32

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.Furnished herewith as Exhibit 32.
101
Inline Interactive Data File.Filed herewith as Exhibit 101.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).Filed herewith as Exhibit 104.




45

Table of Contents


# Certain portions of the exhibits that are not material and is of the type Equitrans Midstream treats as confidential have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. Copies of the unredacted exhibits will be furnished to the SEC upon request.

*Management contract and compensatory arrangement in which any named executives officer participates.

46

Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
Equitrans Midstream Corporation
(Registrant)
Equitrans Midstream Corporation
(Registrant)
By:
By:/s/ Kirk R. Oliver
Kirk R. Oliver
Senior Vice President and Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
Date:  December 3, 2018October 31, 2023



46

47