Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2014 | |
Entity Registrant Name | 'EQT Midstream Partners, LP |
Entity Central Index Key | '0001540947 |
Document Type | '10-Q |
Document Period End Date | 31-Mar-14 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Accelerated Filer |
Entity Common Units, Units Outstanding | 30,468,902 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q1 |
Subordinated Units | ' |
Entity Common Units, Units Outstanding | 17,339,718 |
General Partner Units outstanding | ' |
Entity Common Units, Units Outstanding | 975,686 |
Statements_of_Consolidated_Ope
Statements of Consolidated Operations (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Operating revenues: | ' | ' | ||
Operating revenues - affiliate | $27,129 | $34,386 | [1] | |
Operating revenues - third party | 35,444 | 9,979 | [1] | |
Total operating revenues | 62,573 | 44,365 | [1] | |
Operating expenses: | ' | ' | ||
Operating and maintenance | 8,124 | 6,632 | [1] | |
Selling, general and administrative | 7,359 | 4,263 | [1] | |
Depreciation and amortization | 6,849 | 5,041 | [1],[2] | |
Total operating expenses | 22,332 | 15,936 | [1] | |
Operating income | 40,241 | 28,429 | [1] | |
Other income, net | 269 | 297 | [1] | |
Interest expense, net | 5,655 | 204 | [1] | |
Income before income taxes | 34,855 | 28,522 | [1] | |
Income tax expense | ' | 1,733 | [1] | |
Net income | 34,855 | [2] | 26,789 | [2] |
Calculation of limited partner interest in net income: | ' | ' | ||
Net income | 34,855 | [2] | 26,789 | [2] |
Less pre-acquisition income allocated to parent | ' | -2,710 | [1] | |
Less general partner interest in net income | -1,723 | -505 | [1] | |
Limited partner interest in net income | $33,132 | $23,574 | [1] | |
Net income per limited partner unit - basic (in dollars per unit) | $0.69 | $0.68 | [1] | |
Net income per limited partner unit - diluted (in dollars per unit) | $0.69 | $0.68 | [1] | |
Weighted average limited partner units outstanding - basic (in shares) | 47,819 | 34,679 | [1] | |
Weighted average limited partner units outstanding - diluted (in shares) | 47,938 | 34,768 | [1] | |
Cash distributions declared per unit (in dollars per share) | $0.49 | [3] | $0.37 | [1],[3] |
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect Sunrise Pipeline, LLC (Sunrise), which merged into Equitrans, LP (Equitrans), a wholly owned subsidiary of EQT Midstream Partners, LP, on July 22, 2013 (Sunrise Merger). See Note B for further discussion. | |||
[2] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. | |||
[3] | (2) Represents the cash distribution declared on April 22, 2014 which related to the first quarter of 2014 and the cash distribution declared on April 23, 2013 which related to the first quarter of 2013, respectively. See Note J for further discussion. |
Statements_of_Consolidated_Cas
Statements of Consolidated Cash Flows (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Cash flows from operating activities: | ' | ' | ||
Net income | $34,855 | [1] | $26,789 | [1] |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ||
Depreciation and amortization | 6,849 | 5,041 | [1],[2] | |
Deferred income taxes | ' | -508 | [1] | |
Other income | -269 | -297 | [1] | |
Non-cash long term compensation expense | 978 | 353 | [1] | |
Non-cash adjustments | ' | -250 | [1] | |
Changes in other assets and liabilities: | ' | ' | ||
Accounts receivable | -5,625 | -756 | [1] | |
Accounts payable | 764 | -5,293 | [1] | |
Due to/from EQT affiliates | 19,420 | 18,268 | [1] | |
Other assets and liabilities | -5,774 | -4,325 | [1] | |
Net cash provided by operating activities | 51,198 | 39,022 | [1] | |
Cash flows from investing activities: | ' | ' | ||
Capital expenditures | -19,388 | -12,073 | [1] | |
Net cash used in investing activities | -19,388 | -12,073 | [1] | |
Cash flows from financing activities: | ' | ' | ||
Short-term loans | 110,000 | ' | ||
Sunrise Merger payment | -110,000 | ' | ||
Distributions paid to unitholders | -23,039 | -12,386 | [1] | |
Credit facility origination fees | -2,020 | ' | ||
Capital contributions | -118 | 2,382 | [1] | |
Capital lease principal payments | -948 | ' | ||
Net cash used in financing activities | -26,125 | -10,004 | [1] | |
Net change in cash and cash equivalents | 5,685 | 16,945 | [1] | |
Cash and cash equivalents at beginning of year | 18,363 | 50,041 | [1] | |
Cash and cash equivalents at end of year | 24,048 | 66,986 | [1] | |
Cash paid during the period for: | ' | ' | ||
Interest paid | 4,866 | ' | ||
Non-cash activity during the year: | ' | ' | ||
Capital lease asset/obligation | $3,625 | ' | ||
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. | |||
[2] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect Sunrise Pipeline, LLC (Sunrise), which merged into Equitrans, LP (Equitrans), a wholly owned subsidiary of EQT Midstream Partners, LP, on July 22, 2013 (Sunrise Merger). See Note B for further discussion. |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Current assets: | ' | ' | ||
Cash and cash equivalents | $24,048 | $18,363 | ||
Accounts receivable (net of allowance for doubtful accounts of $736 as of March 31, 2014 and $152 as of December 31, 2013) | 14,088 | 8,463 | ||
Accounts receivable - affiliate | 9,949 | 12,758 | ||
Due from related party | ' | 6,454 | ||
Other current assets | 1,879 | 537 | ||
Total current assets | 49,964 | 46,575 | ||
Property, plant and equipment | 1,028,007 | 1,007,299 | ||
Less: accumulated depreciation | -164,772 | -158,411 | ||
Net property, plant and equipment | 863,235 | 848,888 | ||
Regulatory assets | 16,323 | 16,246 | ||
Other assets | 4,604 | 1,304 | ||
Total assets | 934,126 | 913,013 | ||
Current liabilities: | ' | ' | ||
Accounts payable | 8,092 | 7,328 | ||
Short-term loans | 110,000 | ' | ||
Due to related party | 9,878 | 110,000 | ||
Lease obligation - current | 2,967 | 662 | ||
Accrued liabilities | 5,094 | 11,088 | ||
Total current liabilities | 136,031 | 129,078 | ||
Lease obligation | 134,105 | 133,733 | ||
Other long-term liabilities | 6,763 | 6,014 | ||
Total liabilities | 276,899 | 268,825 | ||
Partners' capital: | ' | ' | ||
Common units (30,468,902 units issued and outstanding at March 31, 2014 and December 31, 2013) | 826,693 | 818,431 | ||
Subordinated units (17,339,718 units issued and outstanding at March 31, 2014 and December 31, 2013) | -171,898 | -175,996 | ||
General partner interest (975,686 units issued and outstanding at March 31, 2014 and December 31, 2013) | 2,432 | 1,753 | ||
Total partners' capital | 657,227 | [1] | 644,188 | [1] |
Total liabilities and partners' capital | $934,126 | $913,013 | ||
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $736 | $152 |
Common units issued | 30,468,902 | 30,468,902 |
Common units outstanding | 30,468,902 | 30,468,902 |
Subordinated units issued | 17,339,718 | 17,339,718 |
Subordinated units outstanding | 17,339,718 | 17,339,718 |
General partner interest, units issued | 975,686 | 975,686 |
General partner interest, units outstanding | 975,686 | 975,686 |
Statements_of_Consolidated_Par
Statements of Consolidated Partners' Capital (USD $) | Total | Limited Partners Common | Limited Partners Subordinated | General Partner | Predecessor Equity | |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2012 | [1] | $672,849 | $313,304 | $153,664 | $8,108 | $197,773 |
Increase (Decrease) in Partners' Capital | ' | ' | ' | ' | ' | |
Net income | [1] | 26,789 | 11,154 | 12,420 | 505 | 2,710 |
Capital contribution | [1] | 1,105 | 541 | 541 | 23 | ' |
Equity-based compensation plans | [1] | 353 | 353 | ' | ' | ' |
Distributions to unitholders | [1] | -12,386 | -6,069 | -6,069 | -248 | ' |
Balance at Mar. 31, 2013 | [1] | 688,710 | 319,283 | 160,556 | 8,388 | 200,483 |
Balance at Dec. 31, 2013 | [1] | 644,188 | 818,431 | -175,996 | 1,753 | ' |
Increase (Decrease) in Partners' Capital | ' | ' | ' | ' | ' | |
Net income | [1] | 34,855 | 21,116 | 12,016 | 1,723 | ' |
Capital contribution | [1] | 163 | 102 | 58 | 3 | ' |
Equity-based compensation plans | [1] | 1,060 | 1,060 | ' | ' | ' |
Distributions to unitholders | [1] | -23,039 | -14,016 | -7,976 | -1,047 | ' |
Balance at Mar. 31, 2014 | [1] | $657,227 | $826,693 | ($171,898) | $2,432 | ' |
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. |
Financial_Statements
Financial Statements | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Financial Statements | ' | ||||||||
Financial Statements | ' | ||||||||
A. Financial Statements | |||||||||
Organization | |||||||||
EQT Midstream Partners, LP (EQT Midstream Partners or the Partnership) is a growth-oriented Delaware limited partnership. EQT Midstream Services, LLC, a wholly owned subsidiary of EQT Corporation, is the Partnership’s general partner. References in these consolidated financial statements to EQT refer collectively to EQT Corporation and its consolidated subsidiaries. | |||||||||
Limited Partner and General Partner Units | |||||||||
The following table summarizes common, subordinated and general partner units issued from January 1, 2013 through March 31, 2014. | |||||||||
Limited Partner Units | General | ||||||||
Common | Subordinated | Partner Units | Total | ||||||
Balance at January 1, 2013 | 17,339,718 | 17,339,718 | 707,744 | 35,387,180 | |||||
July 2013 equity offering | 12,650,000 | — | — | 12,650,000 | |||||
Sunrise Merger consideration | 479,184 | — | 267,942 | 747,126 | |||||
Balance at December 31, 2013 | 30,468,902 | 17,339,718 | 975,686 | 48,784,306 | |||||
Balance at March 31, 2014 | 30,468,902 | 17,339,718 | 975,686 | 48,784,306 | |||||
As of March 31, 2014, EQT retained a 44.6% equity interest in the Partnership, which includes 3,443,902 common units, 17,339,718 subordinated units and 975,686 general partner units. EQT also holds the incentive distribution rights. | |||||||||
Basis of Presentation | |||||||||
The accompanying unaudited consolidated financial statements have been prepared in accordance with 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 footnotes required by United States GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Form 10-Q) necessary for a fair presentation of the financial position of the Partnership as of March 31, 2014 and December 31, 2013 and the results of its operations and cash flows for the three months ended March 31, 2014 and 2013. Certain previously reported amounts have been reclassified to conform to the current year presentation. | |||||||||
The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by United States GAAP for complete financial statements. | |||||||||
As discussed in Note B, the Sunrise Merger was a transaction between entities under common control; therefore, the Partnership was required to record the assets and liabilities of Sunrise at their carrying amounts to EQT on the date of the Sunrise Merger. The difference between EQT’s net carrying amount and the total consideration paid to EQT was recorded as a capital transaction with EQT, which resulted in a reduction in partners’ capital. The Partnership recast its consolidated financial statements to retrospectively reflect the Sunrise Merger; however, the consolidated financial statements are not necessarily indicative of the results of operations that would have occurred if the Partnership had owned the assets during the periods reported. | |||||||||
Due to the seasonal nature of the Partnership’s utility customer contracts, the interim statements for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |||||||||
For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013 as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. | |||||||||
Sunrise_Merger
Sunrise Merger | 3 Months Ended |
Mar. 31, 2014 | |
Sunrise Merger | ' |
Sunrise Merger | ' |
B. Sunrise Merger | |
On July 15, 2013, the Partnership and Equitrans entered into an Agreement and Plan of Merger with EQT and Sunrise, a wholly owned subsidiary of EQT and the owner of the Sunrise Pipeline. Effective July 22, 2013, Sunrise merged with and into Equitrans, with Equitrans continuing as the surviving company. Upon closing, the Partnership paid EQT consideration of $540 million, consisting of a $507.5 million cash payment, 479,184 Partnership common units and 267,942 Partnership general partner units. Prior to the Sunrise Merger, Equitrans entered into a precedent agreement with a third party for firm transportation service on the Sunrise Pipeline over a twenty-year term (the Precedent Agreement). Pursuant to the Agreement and Plan of Merger, following the effectiveness of the transportation agreement contemplated by the Precedent Agreement in December 2013, the Partnership was obligated to pay additional consideration of $110 million. The Partnership made this additional payment to EQT in January 2014. | |
Prior to the Sunrise Merger, the Partnership operated the Sunrise Pipeline as part of its transmission and storage system under a lease agreement with EQT. The lease was a capital lease under GAAP; therefore, prior to the merger, revenues and expenses associated with Sunrise were included in the Partnership’s historical consolidated financial statements and the Sunrise Pipeline was depreciated over the lease term of 15 years. Effective as of the closing of the Sunrise Merger on July 22, 2013, the lease agreement was terminated. Because the Sunrise Merger was a transaction between entities under common control, the Partnership has recast its financial statements to retrospectively reflect the merger. This included recasting depreciation expense recognized for the periods prior to the merger to reflect the pipeline’s useful life of 40 years. The decrease in depreciation expense and interest expense associated with the capital lease increased previously reported net income in the first quarter of 2013. | |
Financial_Information_by_Busin
Financial Information by Business Segment | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Financial Information by Business Segment | ' | ||||||
Financial Information by Business Segment | ' | ||||||
C. Financial Information by Business Segment | |||||||
Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and is subject to evaluation by the chief operating decision maker in deciding how to allocate resources. | |||||||
The Partnership reports its operations in two segments, which reflect its lines of business. Transmission and storage includes the Partnership’s FERC-regulated interstate pipeline and storage business. Gathering includes the FERC-regulated low pressure gathering system. The operating segments are evaluated on their contribution to the Partnership’s results based on operating income. | |||||||
All of the Partnership’s operating revenues, income from operations and assets are generated or located in the United States. | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Revenues from external customers: | |||||||
Transmission and storage | $ | 59,317 | $ | 41,065 | |||
Gathering | 3,256 | 3,300 | |||||
Total | $ | 62,573 | $ | 44,365 | |||
Operating income (loss): | |||||||
Transmission and storage | $ | 42,037 | $ | 30,461 | |||
Gathering | -1,796 | -2,032 | |||||
Total operating income | $ | 40,241 | $ | 28,429 | |||
Reconciliation of operating income to net income: | |||||||
Other income, net | 269 | 297 | |||||
Interest expense, net | 5,655 | 204 | |||||
Income tax expense | — | 1,733 | |||||
Net income | $ | 34,855 | $ | 26,789 | |||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Segment assets: | |||||||
Transmission and storage | $ | 853,831 | $ | 828,053 | |||
Gathering | 80,295 | 84,960 | |||||
Total assets | $ | 934,126 | $ | 913,013 | |||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Depreciation and amortization: | |||||||
Transmission and storage | $ | 6,159 | $ | 4,311 | |||
Gathering | 690 | 730 | |||||
Total | $ | 6,849 | $ | 5,041 | |||
Expenditures for segment assets: | |||||||
Transmission and storage | $ | 14,001 | $ | 10,939 | |||
Gathering | 5,469 | 1,134 | |||||
Total | $ | 19,470 | $ | 12,073 |
RelatedParty_Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related-Party Transactions | ' |
Related-Party Transactions | ' |
D. Related-Party Transactions | |
In the ordinary course of business, the Partnership has transactions with affiliated companies. The Partnership has various contracts with affiliates including, but not limited to, transportation service and precedent agreements, storage agreements and gas gathering agreements. | |
The Partnership has various agreements with EQT. Pursuant to an omnibus agreement, EQT performs centralized corporate, general and administrative services for the Partnership, such as legal, corporate recordkeeping, planning, budgeting, regulatory, accounting, billing, business development, treasury, insurance administration and claims processing, risk management, health, safety and environmental, information technology, human resources, investor relations, cash management and banking, payroll, internal audit, taxes and engineering. In exchange, the Partnership reimburses EQT for the expenses incurred in providing these services, except for any expenses associated with EQT’s long-term incentive programs. The omnibus agreement further requires that the Partnership reimburse EQT for the Partnership’s allocable portion of the premiums on any insurance policies covering the Partnership’s assets. EQT does not record any profit or margin for the administrative and operational services charged to the Partnership. | |
Pursuant to an operation and management services agreement, EQT Gathering, LLC (EQT Gathering) provides the Partnership’s pipelines and storage facilities with certain operational and management services. The Partnership reimburses EQT Gathering for such services pursuant to the terms of the omnibus agreement. | |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
E. Income Taxes | |
As a result of its limited partnership structure, the Partnership is not subject to federal and state income taxes. For federal and state income tax purposes, all income, expenses, gains, losses and tax credits generated by the Partnership flow through to the unitholders; accordingly, the Partnership does not record a provision for income taxes. As discussed in Note B, the Partnership completed the Sunrise Merger on July 22, 2013 which was a transaction between entities under common control. Prior to this transaction, Sunrise’s income was included in EQT’s consolidated federal tax return; therefore, the Sunrise financial statements included U.S. federal and state income tax. The income tax effects associated with Sunrise’s operations prior to the Sunrise Merger are reflected in the Partnership’s consolidated financial statements for those periods. | |
Debt
Debt | 3 Months Ended |
Mar. 31, 2014 | |
Debt | ' |
Debt | ' |
F. Debt | |
In February 2014, the Partnership amended its credit facility to increase the borrowing capacity to $750 million. The amended credit facility will expire in February 2019. The credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions, to repurchase units and for general partnership purposes. | |
As of March 31, 2014, the Partnership had $110 million outstanding on the credit facility. There were no amounts outstanding on the credit facility as of December 31, 2013. The maximum amount of the Partnership’s outstanding short-term loans at any time during the three months ended March 31, 2014 was $110 million. The average daily balance of short-term loans outstanding was approximately $92.9 million for the three months ended March 31, 2014. The loans bear interest at a weighted average rate of 1.72%. The carrying value of short-term borrowings approximates fair value as the interest rates are based on prevailing market rates. | |
Lease_Obligations
Lease Obligations | 3 Months Ended |
Mar. 31, 2014 | |
Lease Obligations | ' |
Lease Obligations | ' |
G. Lease Obligations | |
On December 17, 2013, the Partnership entered into a lease with EQT for the Allegheny Valley Connector (AVC) facilities. Under the lease, the Partnership operates the facilities as part of its transmission and storage system under the rates, terms and conditions of its FERC-approved tariff. The AVC facilities are strategically located to connect Marcellus Shale supply and demand and include an approximately 200 mile pipeline that interconnects with the Partnership’s transmission and storage system. Additionally, the AVC facilities provide 450 BBtu per day of additional firm capacity to the Partnership’s system and are supported by 4 associated natural gas storage reservoirs with approximately 260 MMcf per day of peak withdrawal capability and 15 Bcf of working gas capacity. Of the total 15 Bcf of working gas capacity, the Partnership leases and operates 13 Bcf of working gas capacity. The lease payment due each month is the lesser of the following alternatives: (1) a revenue-based payment reflecting the revenues generated by the operation of the AVC facilities minus the actual costs of operating the AVC facilities and (2) a payment based on depreciation expense and pre-tax return on invested capital for the AVC facilities. As a result, the payments to be made under the AVC lease will be variable. | |
The AVC lease is a capital lease under GAAP. The gross capital lease assets and obligations recorded in 2013 were approximately $134.4 million. The Partnership expects modernization capital expenditures will be incurred by EQT to upgrade the AVC facilities. As the capital expenditures are incurred, the capital lease asset and obligations will increase. In the first quarter of 2014, the fair value of the leased property increased by approximately $3.6 million as a result of the modernization capital expenditures. | |
For the three months ended March 31, 2014, interest expense of $4.9 million and depreciation expense of $1.3 million were recorded related to the capital lease. At March 31, 2014, accumulated depreciation was $1.7 million, net capital lease assets were $136.3 million and capital lease obligations were $137.1 million. |
Net_Income_per_Limited_Partner
Net Income per Limited Partner Unit | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Net Income per Limited Partner Unit | ' | ||||||
Net Income per Limited Partner Unit | ' | ||||||
H. Net Income per Limited Partner Unit | |||||||
The Partnership’s net income is allocated to the general partner and limited partners, including subordinated unitholders, in accordance with their respective ownership percentages, and when applicable, giving effect to incentive distributions allocable to the general partner. The allocation of undistributed earnings, or net income in excess of distributions, to the incentive distribution rights is limited to available cash (as defined by the Partnership’s partnership agreement) for the period. Net income allocated to the general partner includes amounts attributed to incentive distributions, as applicable. The Partnership’s net income allocable to the limited partners is allocated between common and subordinated unitholders by applying the provisions of the Partnership’s partnership agreement that govern actual cash distributions as if all earnings for the period had been distributed. Any common units issued during the period are included on a weighted-average basis for the days in which they were outstanding. The phantom units granted to the independent directors of the Partnership’s general partner will be paid in common units on a director’s termination of service on the general partner’s Board of Directors. As there are no remaining service, performance or market conditions related to these awards, 10,861 phantom unit awards were included in the calculation of basic weighted average limited partner units outstanding for the three months ended March 31, 2014. | |||||||
Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the long-term incentive plan, were exercised, settled or converted into common units. When it is determined that potential common units resulting from an award subject to performance or market conditions should be included in the diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method. Potentially dilutive securities, consisting of performance awards, included in the calculation of diluted net income per limited partner unit totaled 118,642 and 88,815 for the three months ended March 31, 2014 and 2013, respectively. The 2014 EQM Value Driver Awards granted in the first quarter of 2014 were not included in potentially dilutive securities because the performance condition was not yet met. | |||||||
The following table presents the Partnership’s calculation of net income per limited partner unit for common and subordinated limited partner units. Net income attributable to the Sunrise Pipeline assets for periods prior to July 22, 2013 is not allocated to the limited partners for purposes of calculating net income per limited partner unit. | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands, except per unit | |||||||
data) | |||||||
Net income | $ | 34,855 | $ | 26,789 | |||
Less: | |||||||
Pre-acquisition net income allocated to parent | — | -2,710 | |||||
General partner interest in net income – 2% | -697 | -505 | |||||
General partner interest in net income attributable to incentive distribution rights | -1,026 | — | |||||
Limited partner interest in net income | $ | 33,132 | $ | 23,574 | |||
Net income allocable to common units | $ | 21,116 | $ | 11,154 | |||
Net income allocable to subordinated units | 12,016 | 12,420 | |||||
Limited partner interest in net income | $ | 33,132 | $ | 23,574 | |||
Weighted average limited partner units outstanding – basic | |||||||
Common units | 30,479 | 17,339 | |||||
Subordinated units | 17,340 | 17,340 | |||||
Total | 47,819 | 34,679 | |||||
Weighted average limited partner units outstanding – diluted | |||||||
Common units | 30,598 | 17,428 | |||||
Subordinated units | 17,340 | 17,340 | |||||
Total | 47,938 | 34,768 | |||||
Net income per limited partner unit – basic | |||||||
Common units | $ | 0.69 | $ | 0.64 | |||
Subordinated units | 0.69 | 0.72 | |||||
Total | $ | 0.69 | $ | 0.68 | |||
Net income per limited partner unit – diluted | |||||||
Common units | $ | 0.69 | $ | 0.64 | |||
Subordinated units | 0.69 | 0.72 | |||||
Total | $ | 0.69 | $ | 0.68 |
Subsidiary_Guarantors
Subsidiary Guarantors | 3 Months Ended |
Mar. 31, 2014 | |
Subsidiary Guarantors | ' |
Subsidiary Guarantors | ' |
I. Subsidiary Guarantors | |
The Partnership filed a registration statement on Form S-3 with the SEC on July 1, 2013 to register, among other securities, debt securities. Certain subsidiaries of the Partnership are co-registrants with the Partnership (Subsidiary Guarantors), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors (other than EQT Midstream Finance Corporation, a 100% owned subsidiary of the Partnership whose sole purpose is to act as co-issuer of debt securities). The Subsidiary Guarantors are 100% owned by the Partnership and any guarantees by the Subsidiary Guarantors will be full and unconditional. Subsidiaries of the Partnership other than the Subsidiary Guarantors and EQT Midstream Finance Corporation are minor. The Partnership has no assets or operations independent of the Subsidiary Guarantors, and there are no significant restrictions upon the ability of the Subsidiary Guarantors to distribute funds to the Partnership by dividend or loan. In the event that more than one of the Subsidiary Guarantors provide guarantees of any debt securities issued by the Partnership, such guarantees will constitute joint and several obligations. None of the assets of the Partnership or the Subsidiary Guarantors represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act of 1933, as amended. | |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
J. Subsequent Events | |
On April 22, 2014, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the first quarter of 2014 of $0.49 per common and subordinated unit, $0.5 million to the general partner related to its 2% general partner interest and $1.0 million to the general partner related to its incentive distribution rights. The cash distribution will be paid on May 15, 2014 to unitholders of record at the close of business on May 6, 2014. | |
Financial_Statements_Tables
Financial Statements (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Financial Statements | ' | ||||||||
Summary of common, subordinated and general partner units issued | ' | ||||||||
Limited Partner Units | General | ||||||||
Common | Subordinated | Partner Units | Total | ||||||
Balance at January 1, 2013 | 17,339,718 | 17,339,718 | 707,744 | 35,387,180 | |||||
July 2013 equity offering | 12,650,000 | — | — | 12,650,000 | |||||
Sunrise Merger consideration | 479,184 | — | 267,942 | 747,126 | |||||
Balance at December 31, 2013 | 30,468,902 | 17,339,718 | 975,686 | 48,784,306 | |||||
Balance at March 31, 2014 | 30,468,902 | 17,339,718 | 975,686 | 48,784,306 |
Financial_Information_by_Busin1
Financial Information by Business Segment (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Financial Information by Business Segment | ' | ||||||
Schedule of revenue from external customers and operating income (loss) and reconciliation to net income | ' | ||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Revenues from external customers: | |||||||
Transmission and storage | $ | 59,317 | $ | 41,065 | |||
Gathering | 3,256 | 3,300 | |||||
Total | $ | 62,573 | $ | 44,365 | |||
Operating income (loss): | |||||||
Transmission and storage | $ | 42,037 | $ | 30,461 | |||
Gathering | -1,796 | -2,032 | |||||
Total operating income | $ | 40,241 | $ | 28,429 | |||
Reconciliation of operating income to net income: | |||||||
Other income, net | 269 | 297 | |||||
Interest expense, net | 5,655 | 204 | |||||
Income tax expense | — | 1,733 | |||||
Net income | $ | 34,855 | $ | 26,789 | |||
Schedule of segment assets | ' | ||||||
March 31, | December 31, | ||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Segment assets: | |||||||
Transmission and storage | $ | 853,831 | $ | 828,053 | |||
Gathering | 80,295 | 84,960 | |||||
Total assets | $ | 934,126 | $ | 913,013 | |||
Schedule of depreciation, depletion and amortization and expenditures for segment assets | ' | ||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands) | |||||||
Depreciation and amortization: | |||||||
Transmission and storage | $ | 6,159 | $ | 4,311 | |||
Gathering | 690 | 730 | |||||
Total | $ | 6,849 | $ | 5,041 | |||
Expenditures for segment assets: | |||||||
Transmission and storage | $ | 14,001 | $ | 10,939 | |||
Gathering | 5,469 | 1,134 | |||||
Total | $ | 19,470 | $ | 12,073 |
Net_Income_per_Limited_Partner1
Net Income per Limited Partner Unit (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Net Income per Limited Partner Unit | ' | ||||||
Schedule of partnership's calculation of net income per limited partner unit for common and subordinated limited partner units | ' | ||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
(Thousands, except per unit | |||||||
data) | |||||||
Net income | $ | 34,855 | $ | 26,789 | |||
Less: | |||||||
Pre-acquisition net income allocated to parent | — | -2,710 | |||||
General partner interest in net income – 2% | -697 | -505 | |||||
General partner interest in net income attributable to incentive distribution rights | -1,026 | — | |||||
Limited partner interest in net income | $ | 33,132 | $ | 23,574 | |||
Net income allocable to common units | $ | 21,116 | $ | 11,154 | |||
Net income allocable to subordinated units | 12,016 | 12,420 | |||||
Limited partner interest in net income | $ | 33,132 | $ | 23,574 | |||
Weighted average limited partner units outstanding – basic | |||||||
Common units | 30,479 | 17,339 | |||||
Subordinated units | 17,340 | 17,340 | |||||
Total | 47,819 | 34,679 | |||||
Weighted average limited partner units outstanding – diluted | |||||||
Common units | 30,598 | 17,428 | |||||
Subordinated units | 17,340 | 17,340 | |||||
Total | 47,938 | 34,768 | |||||
Net income per limited partner unit – basic | |||||||
Common units | $ | 0.69 | $ | 0.64 | |||
Subordinated units | 0.69 | 0.72 | |||||
Total | $ | 0.69 | $ | 0.68 | |||
Net income per limited partner unit – diluted | |||||||
Common units | $ | 0.69 | $ | 0.64 | |||
Subordinated units | 0.69 | 0.72 | |||||
Total | $ | 0.69 | $ | 0.68 |
Financial_Statements_Details
Financial Statements (Details) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
EQT | Limited Partners Common | Limited Partners Common | Limited Partners Common | Limited Partners Subordinated | Limited Partners Subordinated | Limited Partners Subordinated | General Partner | General Partner | General Partner | General Partner | |||
Sunrise | Sunrise | ||||||||||||
Increase (Decrease) in Partners' Capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance | 35,387,180 | 48,784,306 | ' | 17,339,718 | 30,468,902 | ' | 17,339,718 | 17,339,718 | 17,339,718 | 975,686 | 975,686 | 707,744 | ' |
Issued in connection with public offering | 12,650,000 | ' | ' | 12,650,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sunrise Merger consideration | 747,126 | ' | ' | ' | ' | 479,184 | ' | ' | ' | ' | ' | ' | 267,942 |
Balance | 48,784,306 | 48,784,306 | ' | 30,468,902 | 30,468,902 | ' | 17,339,718 | 17,339,718 | 17,339,718 | 975,686 | 975,686 | 707,744 | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity interest retained by parent (as a percent) | ' | ' | 44.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common units held by parent (in shares) | ' | ' | 3,443,902 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subordinated units held by parent (in shares) | ' | ' | 17,339,718 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General partner units held by parent (in shares) | ' | ' | 975,686 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sunrise_Merger_Details
Sunrise Merger (Details) (USD $) | 3 Months Ended | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Jul. 22, 2013 | Dec. 31, 2013 | |
Pipelines | Sunrise | EQT | EQT | |||
Sunrise Merger | ' | ' | ' | ' | ' | ' |
Consideration paid | ' | ' | ' | ' | $540,000,000 | ' |
Cash payment | 110,000,000 | ' | ' | ' | 507,500,000 | ' |
Common units issued | 30,468,902 | 30,468,902 | ' | ' | 479,184 | ' |
General partner units issued | 975,686 | 975,686 | ' | ' | 267,942 | ' |
Term of the transportation precedent agreement | ' | ' | ' | '20 years | ' | ' |
Additional cash consideration related to the transportation precedent agreement | ' | ' | ' | ' | ' | $110,000,000 |
Life of the lease | ' | ' | '15 years | ' | ' | ' |
Estimated service life | ' | ' | '40 years | ' | ' | ' |
Financial_Information_by_Busin2
Financial Information by Business Segment (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||
item | |||||
Financial Information by Business Segment | ' | ' | ' | ||
Number of operating segments | 2 | ' | ' | ||
Segment Information | ' | ' | ' | ||
Revenues from external customers: | $62,573 | $44,365 | [1] | ' | |
Operating income (loss): | 40,241 | 28,429 | [1] | ' | |
Reconciliation of operating income to net income: | ' | ' | ' | ||
Other income, net | 269 | 297 | [1] | ' | |
Interest expense, net | 5,655 | 204 | [1] | ' | |
Income tax expenses | ' | 1,733 | [1] | ' | |
Net income | 34,855 | [2] | 26,789 | [2] | ' |
Segment assets: | 934,126 | ' | 913,013 | ||
Depreciation and amortization | 6,849 | 5,041 | [1],[2] | ' | |
Expenditures for segment assets | 19,470 | 12,073 | ' | ||
Transmission and storage | ' | ' | ' | ||
Segment Information | ' | ' | ' | ||
Revenues from external customers: | 59,317 | 41,065 | ' | ||
Operating income (loss): | 42,037 | 30,461 | ' | ||
Reconciliation of operating income to net income: | ' | ' | ' | ||
Segment assets: | 853,831 | ' | 828,053 | ||
Depreciation and amortization | 6,159 | 4,311 | ' | ||
Expenditures for segment assets | 14,001 | 10,939 | ' | ||
Gathering | ' | ' | ' | ||
Segment Information | ' | ' | ' | ||
Revenues from external customers: | 3,256 | 3,300 | ' | ||
Operating income (loss): | -1,796 | -2,032 | ' | ||
Reconciliation of operating income to net income: | ' | ' | ' | ||
Segment assets: | 80,295 | ' | 84,960 | ||
Depreciation and amortization | 690 | 730 | ' | ||
Expenditures for segment assets | $5,469 | $1,134 | ' | ||
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect Sunrise Pipeline, LLC (Sunrise), which merged into Equitrans, LP (Equitrans), a wholly owned subsidiary of EQT Midstream Partners, LP, on July 22, 2013 (Sunrise Merger). See Note B for further discussion. | ||||
[2] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. |
Debt_Details
Debt (Details) (USD $) | Mar. 31, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
In Millions, unless otherwise specified | Revolving credit facility | Revolving credit facility | Revolving credit facility | Short-term loans |
Long-term debt | ' | ' | ' | ' |
Maximum borrowing capacity | ' | $750 | ' | ' |
Maximum amount of outstanding short-term loans at any time during the period | ' | ' | ' | 110 |
Average daily balance of short-term loans outstanding | ' | ' | ' | 92.9 |
Weighted average interest rate (as a percent) | ' | ' | ' | 1.72% |
Amounts outstanding | $110 | ' | $0 | ' |
Lease_Obligations_Details
Lease Obligations (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
Dec. 17, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | |
MMcf | |||
mi | |||
item | |||
Lease obligations | ' | ' | ' |
Modernization capital expenditures incurred | ' | $3,625,000 | ' |
AVC | ' | ' | ' |
Lease obligations | ' | ' | ' |
Length of pipeline (in miles) | 200 | ' | ' |
Additional per day firm capacity provided to the system (in TBtu per day) | 0.45 | ' | ' |
Number of associated natural gas storage reservoirs which supports pipeline system | 4 | ' | ' |
Peak withdrawal capability per day of associated natural gas storage reservoirs (in MMcf per day) | 260 | ' | ' |
Working gas capacity of associated natural gas storage reservoirs (in Mcf) | 15,000 | ' | ' |
Working gas capacity of associated natural gas storage reservoirs which the entity leases and operates (in Mcf) | 13,000 | ' | ' |
Capital lease obligations | ' | 137,100,000 | 134,400,000 |
Modernization capital expenditures incurred | ' | 3,600,000 | ' |
Interest expense on capital lease | ' | 4,900,000 | ' |
Depreciation expense | ' | 1,300,000 | ' |
Accumulated depreciation | ' | 1,700,000 | ' |
Net capital lease assets | ' | $136,300,000 | $134,400,000 |
Net_Income_per_Limited_Partner2
Net Income per Limited Partner Unit (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Net Income per Limited Partner Unit | ' | ' | ||
General partner's ownership interest (as a percent) | 2.00% | ' | ||
Partnership's calculation of net income per unit for common and subordinated limited partner units: | ' | ' | ||
Net income | $34,855 | [1] | $26,789 | [1] |
Less pre-acquisition income allocated to parent | ' | -2,710 | [2] | |
Less: general partner interest in net income - 2% | -697 | -505 | ||
General partner interest in net income attributable to incentive distribution rights | -1,026 | ' | ||
Limited partner interest in net income | 33,132 | 23,574 | [2] | |
Limited Partners' net income allocable to common units and subordinated units | ' | ' | ||
Limited partner interest in net income | 33,132 | 23,574 | [2] | |
Weighted average limited partner units outstanding - basic | ' | ' | ||
Total (in shares) | 47,819,000 | 34,679,000 | [2] | |
Weighted average limited partner units outstanding - diluted | ' | ' | ||
Total (in shares) | 47,938,000 | 34,768,000 | [2] | |
Net income per limited partner unit - basic | ' | ' | ||
Basic (in dollars per share) | $0.69 | $0.68 | [2] | |
Net income per limited partner unit - diluted | ' | ' | ||
Diluted (in dollars per share) | $0.69 | $0.68 | [2] | |
Common Units | ' | ' | ||
Partnership's calculation of net income per unit for common and subordinated limited partner units: | ' | ' | ||
Net income | 21,116 | [1] | 11,154 | [1] |
Limited partner interest in net income | 21,116 | 11,154 | ||
Limited Partners' net income allocable to common units and subordinated units | ' | ' | ||
Limited partner interest in net income | 21,116 | 11,154 | ||
Weighted average limited partner units outstanding - basic | ' | ' | ||
Total (in shares) | 30,479,000 | 17,339,000 | ||
Weighted average limited partner units outstanding - diluted | ' | ' | ||
Total (in shares) | 30,598,000 | 17,428,000 | ||
Net income per limited partner unit - basic | ' | ' | ||
Basic (in dollars per share) | $0.69 | $0.64 | ||
Net income per limited partner unit - diluted | ' | ' | ||
Diluted (in dollars per share) | $0.69 | $0.64 | ||
Subordinated Units | ' | ' | ||
Partnership's calculation of net income per unit for common and subordinated limited partner units: | ' | ' | ||
Net income | 12,016 | [1] | 12,420 | [1] |
Limited partner interest in net income | 12,016 | 12,420 | ||
Limited Partners' net income allocable to common units and subordinated units | ' | ' | ||
Limited partner interest in net income | $12,016 | $12,420 | ||
Weighted average limited partner units outstanding - basic | ' | ' | ||
Total (in shares) | 17,340,000 | 17,340,000 | ||
Weighted average limited partner units outstanding - diluted | ' | ' | ||
Total (in shares) | 17,340,000 | 17,340,000 | ||
Net income per limited partner unit - basic | ' | ' | ||
Basic (in dollars per share) | $0.69 | $0.72 | ||
Net income per limited partner unit - diluted | ' | ' | ||
Diluted (in dollars per share) | $0.69 | $0.72 | ||
Performance awards and phantom units | ' | ' | ||
Net Income per Limited Partner Unit | ' | ' | ||
Potentially dilutive securities included in the calculation of diluted net income per limited partner unit (in shares) | 118,642 | 88,815 | ||
Phantom Units | ' | ' | ||
Weighted average limited partner units outstanding - basic | ' | ' | ||
Total (in shares) | 10,861 | ' | ||
[1] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect the Sunrise Merger. See Note B for further discussion. | |||
[2] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect Sunrise Pipeline, LLC (Sunrise), which merged into Equitrans, LP (Equitrans), a wholly owned subsidiary of EQT Midstream Partners, LP, on July 22, 2013 (Sunrise Merger). See Note B for further discussion. |
Subsidiary_Guarantors_Details
Subsidiary Guarantors (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Subsidiary Guarantors | ' |
Ownership interest held (as a percent) | 100.00% |
Restricted net assets | $0 |
EQT Midstream Finance Corporation | ' |
Subsidiary Guarantors | ' |
Ownership interest held (as a percent) | 100.00% |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Apr. 22, 2014 | Apr. 22, 2014 | ||
Subsequent Events | Subsequent Events | |||||
General Partner | ||||||
Subsequent Events | ' | ' | ' | ' | ||
Cash distribution to the company's common and subordinated unitholders declared (in dollars per share) | $0.49 | [1] | $0.37 | [1],[2] | $0.49 | ' |
Partners' capital: | ' | ' | ' | ' | ||
Cash distribution declared to the general partner | ' | ' | ' | $0.50 | ||
General partner's interest (as a percent) | 2.00% | ' | ' | 2.00% | ||
Incentive distribution rights | ' | ' | ' | $1 | ||
[1] | (2) Represents the cash distribution declared on April 22, 2014 which related to the first quarter of 2014 and the cash distribution declared on April 23, 2013 which related to the first quarter of 2013, respectively. See Note J for further discussion. | |||||
[2] | (1) Financial statements for the first three months of 2013 have been retrospectively recast to reflect Sunrise Pipeline, LLC (Sunrise), which merged into Equitrans, LP (Equitrans), a wholly owned subsidiary of EQT Midstream Partners, LP, on July 22, 2013 (Sunrise Merger). See Note B for further discussion. |