Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2015 | |
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2015 |
Entity Registrant Name | Rice Midstream Partners LP |
Entity Central Index Key | 1,620,928 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Current assets: | |||
Cash | [1],[2] | $ 23,882 | $ 26,834 |
Accounts receivable | [1] | 9,148 | 297 |
Accounts receivable - affiliate | [1] | 430 | 2,049 |
Deposits, prepaid expenses and other | [1] | 598 | 233 |
Total current assets | [1] | 34,058 | 29,413 |
Property and equipment, net | [1] | 545,648 | 323,871 |
Deferred financing costs, net | [1] | 2,462 | 2,874 |
Goodwill | [1] | 39,142 | 39,142 |
Intangible assets, net | [1] | 46,568 | 47,791 |
Total assets | [1] | 667,878 | 443,091 |
Current liabilities: | |||
Accounts payable | [1] | 28,863 | 109 |
Accrued capital expenditures | [1] | 35,115 | 7,502 |
Payable to affiliate | [1] | 0 | 156 |
Other accrued liabilities | [1] | 1,542 | 1,577 |
Total current liabilities | [1] | 65,520 | 9,344 |
Long-term liabilities: | |||
Long-term debt | [1] | 72,000 | 0 |
Deferred tax liability | [1] | 7,699 | 1,903 |
Other long-term liabilities | [1] | 2,294 | 1,900 |
Total liabilities | [1] | 147,513 | 13,147 |
Partners’ capital: | |||
Parent net equity | [1] | 113,486 | 36,594 |
Common and subordinated units | 406,879 | 393,350 | |
Total partners’ capital | [1],[3] | 520,365 | 429,944 |
Total liabilities and partners’ capital | [1] | 667,878 | 443,091 |
Common | |||
Partners’ capital: | |||
Common and subordinated units | [1] | 450,600 | 442,451 |
Subordinated | |||
Partners’ capital: | |||
Common and subordinated units | [1] | $ (43,721) | $ (49,101) |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||
[3] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Condensed Combined Balance She3
Condensed Combined Balance Sheets (Parenthetical) - shares | Sep. 30, 2015 | Dec. 31, 2014 | |
Common | |||
Common and Subordinated units issued | [1] | 28,753,623 | 28,753,623 |
Common and Subordinated units outstanding | [1] | 28,753,623 | 28,753,623 |
Subordinated | |||
Common and Subordinated units issued | [1] | 28,753,623 | 28,753,623 |
Common and Subordinated units outstanding | [1] | 28,753,623 | 28,753,623 |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Condensed Combined Statements o
Condensed Combined Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
Operating revenues: | |||||||
Affiliate | [1] | $ 23,947 | $ 68 | $ 72,289 | $ 237 | ||
Third-party | [1] | 6,128 | 1,552 | 12,857 | 2,842 | ||
Total operating revenues | [1] | 30,075 | 1,620 | 85,146 | 3,079 | ||
Operating expenses: | |||||||
Operation and maintenance expense | [1] | 4,421 | 1,605 | 10,028 | 3,420 | ||
General and administrative expense | [1],[2] | 4,137 | 1,501 | 10,322 | 8,732 | ||
Incentive unit (income) expense | [1],[3] | (75) | 5,987 | 1,048 | [4] | 11,791 | [4] |
Equity compensation expense | [1],[5] | 1,105 | 273 | 3,316 | 406 | ||
Depreciation expense | [1] | 4,417 | 1,150 | 10,454 | 2,612 | ||
Amortization of intangible assets | [1] | 407 | 408 | 1,223 | [4] | 748 | [4] |
Other (income) expense | [1] | (347) | 0 | 492 | 0 | ||
Total operating expenses | [1] | 14,065 | 10,924 | 36,883 | 27,709 | ||
Operating income (loss) | [1] | 16,010 | (9,304) | 48,263 | (24,630) | ||
Other income | [1] | 2 | 0 | 11 | 0 | ||
Interest expense | [1],[6] | (814) | (3,146) | (2,070) | (11,748) | ||
Amortization of deferred finance costs | [1] | (144) | 0 | (432) | [4] | 0 | [4] |
Income (loss) before income taxes | [1] | 15,054 | (12,450) | 45,772 | (36,378) | ||
Income tax (expense) benefit | [1] | (1,794) | 2,567 | (5,796) | 9,985 | ||
Net income (loss) | [1] | 13,260 | (9,883) | 39,976 | [4] | (26,393) | [4],[7] |
Calculation of limited partner interest in net income: | |||||||
Less: Pre-acquisition net income allocated to general partner | [1],[8] | 990 | 6,306 | [7] | |||
Limited partner net income | [1] | $ 12,270 | $ 33,670 | [7] | |||
Net income per limited partner unit: | |||||||
Net income per limited partner unit - basic: | $ 0.21 | $ 0.59 | |||||
Net income per limited partner unit - diluted: | 0.21 | 0.58 | |||||
Cash distributions declared per limited partner unit: | |||||||
Cash distributions declared per limited partner unit | [9],[10] | $ 0.1935 | $ 0.5715 | ||||
Rice Energy | |||||||
Operating expenses: | |||||||
Equity compensation expense | $ 144 | 273 | $ 356 | 406 | |||
Interest expense | (257) | (662) | |||||
Cash distributions declared per limited partner unit: | |||||||
General and administrative expenses from Rice Energy | 3,600 | $ 1,100 | 8,800 | $ 6,200 | |||
Common | |||||||
Calculation of limited partner interest in net income: | |||||||
Limited partner net income | $ 6,135 | $ 16,835 | |||||
Net income per limited partner unit: | |||||||
Net income per limited partner unit - basic: | [1] | $ 0.21 | $ 0.59 | ||||
Net income per limited partner unit - diluted: | [1] | 0.21 | 0.58 | ||||
Cash distributions declared per limited partner unit: | |||||||
Cash distributions declared per limited partner unit | [1],[9],[10],[11] | $ 0.1935 | $ 0.5715 | ||||
Subordinated | |||||||
Calculation of limited partner interest in net income: | |||||||
Limited partner net income | $ 6,135 | $ 16,835 | |||||
Net income per limited partner unit: | |||||||
Net income per limited partner unit - basic: | $ 0.21 | $ 0.59 | |||||
Net income per limited partner unit - diluted: | [1],[12] | 0.21 | 0.59 | ||||
Subordinated units (basic and diluted) | [1] | 0.21 | 0.59 | ||||
Cash distributions declared per limited partner unit: | |||||||
Cash distributions declared per limited partner unit | [1],[9],[10],[11] | $ 0.1935 | $ 0.5715 | ||||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[2] | General and administrative expenses include charges from Rice Energy of $3.6 million and $1.1 million for the three months ended September 30, 2015 and 2014, respectively, and $8.8 million and $6.2 million for the nine months ended September 30, 2015 and 2014, respectively. | ||||||
[3] | Incentive unit expense was allocated from Rice Energy to the Partnership during the three and nine months ended September 30, 2014. In addition, incentive unit expense was allocated from Rice Energy to the Water Assets for the three and nine months ended September 30, 2014 and 2015. | ||||||
[4] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[5] | Equity compensation expense includes stock compensation expense allocated by Rice Energy of $0.1 million and $0.4 million for the three and nine months ended September 30, 2015, respectively, and stock compensation expense allocated by Rice Energy of $0.3 million and $0.4 million for the three and nine months ended September 30, 2014, respectively. | ||||||
[6] | Interest expense of $0.3 million and $0.7 million for the three and nine months ended September 30, 2015, respectively, and all interest expense for the three and nine months ended September 30, 2014 was allocated from Rice Energy. | ||||||
[7] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[8] | Pre-acquisition net loss allocated to the general partner relates to operations of the Water Assets for periods prior to their acquisition on November 4, 2015. | ||||||
[9] | Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015, respectively, related to phantom units. | ||||||
[10] | See Note 12 for further discussion of cash distributions declared for the period presented. | ||||||
[11] | Net income per limited partner unit is presented only for periods subsequent to the Partnership’s initial public offering and does not include results attributable to the Water Assets as these results are not attributable to limited partners of the Partnership. | ||||||
[12] | Diluted net income per limited partner unit is presented as if all earnings for the period had been distributed, and while it appears that more income is allocated to the subordinated unit holders than the common unitholders based on the dilution of the common units from the LTIP for the three and nine months ended September 30, 2015, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. |
Condensed Combined Statements 5
Condensed Combined Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | ||||
Cash flows from operating activities: | |||||
Net income (loss) | [1],[2] | $ 39,976 | $ (26,393) | [3] | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
Depreciation expense | [2] | 10,454 | 2,612 | ||
Amortization of intangibles | [1],[2] | 1,223 | 748 | ||
Amortization of deferred financing costs | [1],[2] | 432 | 0 | ||
Incentive unit expense | [1],[2],[4] | 1,048 | 11,791 | ||
Equity compensation expense | [2] | 3,316 | 406 | ||
Deferred income tax benefit | [2] | 5,796 | (9,985) | ||
Changes in operating assets and liabilities: | |||||
Increase in accounts receivable and receivable from affiliate | [2] | (8,852) | (1,482) | ||
Increase in prepaid expenses and other assets | [2] | (407) | (260) | ||
Increase in accounts payable and payable to affiliate | [2] | 3,764 | 341 | ||
Increase in accrued liabilities and other | [2] | 280 | 1,821 | ||
Net cash provided by (used in) operating activities | [2] | 57,030 | (20,401) | ||
Cash flows from investing activities: | |||||
Capital expenditures | [2] | (178,104) | (69,579) | ||
Acquisition of Marcellus joint venture | [2] | 0 | (55,000) | ||
Acquisition of Momentum assets | [2] | 0 | (111,448) | ||
Net cash used in investing activities | [2] | (178,104) | (236,027) | ||
Cash flows from financing activities: | |||||
Proceeds from borrowings | [2] | 72,000 | 0 | ||
Costs related to IPO | [2] | (129) | 0 | ||
Additions to deferred financing costs | [2] | (21) | (862) | ||
Contributions from parent | [2] | 69,182 | 258,339 | ||
Distribution to Rice Midstream Holdings | [2] | (11,456) | 0 | ||
Distributions paid to unitholders | [2] | (11,454) | 0 | ||
Net cash provided by financing activities | [2] | 118,122 | 257,477 | ||
Net (decrease) increase in cash | [2] | (2,952) | 1,049 | ||
Cash at the beginning of the year | [2] | 26,834 | [5] | 148 | |
Cash at the end of the period | [2] | $ 23,882 | [5] | $ 1,197 | |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||
[3] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||
[4] | Incentive unit expense was allocated from Rice Energy to the Partnership during the three and nine months ended September 30, 2014. In addition, incentive unit expense was allocated from Rice Energy to the Water Assets for the three and nine months ended September 30, 2014 and 2015. | ||||
[5] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Condensed Combined Statements 6
Condensed Combined Statements of Partners' Capital - USD ($) $ in Thousands | Total | Common | Subordinated | Limited PartnersCommon | Limited PartnersSubordinated | Parent Net Equity | ||||
Balance at Dec. 31, 2013 | [1] | $ 66,622 | $ 66,622 | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Contribution from parent | [1] | 258,339 | 258,339 | |||||||
Tax impact of parent initial public offering | [1] | (15,909) | (15,909) | |||||||
Incentive unit expense | [1] | 11,791 | 11,791 | |||||||
Stock compensation expense | [1] | 406 | 406 | |||||||
Net income (loss) | [1] | (26,393) | [2],[3] | (26,393) | ||||||
Balance at Sep. 30, 2014 | [1] | 294,856 | 294,856 | |||||||
Balance at Dec. 31, 2014 | [1] | 429,944 | [4] | $ 442,451 | $ (49,101) | 36,594 | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||||
Contribution from parent | [1] | 69,182 | 69,182 | |||||||
Incentive unit expense | [1] | 1,048 | 1,048 | |||||||
Stock compensation expense | [1] | 356 | 356 | |||||||
Equity compensation | [1] | 2,898 | 2,898 | 0 | ||||||
Offering costs related to the IPO | [1] | (129) | (129) | 0 | ||||||
Distributions to unitholders | [1] | (22,910) | (11,455) | (11,455) | ||||||
Net income (loss) | [2],[3] | 39,976 | ||||||||
Pre-acquisition net income attributable to the general partner | [1] | 6,306 | [2],[5] | 6,306 | ||||||
Limited partner net income | 33,670 | [1],[2] | $ 16,835 | $ 16,835 | 16,835 | [1] | 16,835 | [1] | ||
Balance at Sep. 30, 2015 | [1] | $ 520,365 | [4] | $ 450,600 | $ (43,721) | $ 113,486 | ||||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | |||||||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | |||||||||
[3] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | |||||||||
[4] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | |||||||||
[5] | Pre-acquisition net loss allocated to the general partner relates to operations of the Water Assets for periods prior to their acquisition on November 4, 2015. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed combined financial statements of the Partnership have been prepared by the Partnership’s management in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The unaudited condensed combined financial statements included herein contain all adjustments which are, in the opinion of management, necessary to present fairly the Partnership’s financial position as of September 30, 2015 and December 31, 2014 and its unaudited condensed combined statements of operations for the three and nine months ended September 30, 2015 and 2014 and cash flows for the nine months ended September 30, 2015 and 2014 . For periods prior to December 22, 2014, those condensed combined financial statements have been prepared from the separate records maintained by Rice Energy and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods prior to the Partnership’s IPO. Because a direct ownership relationship did not exist among the businesses comprising the Predecessor, the net investment in the Predecessor is shown as parent net equity in the condensed combined financial statements. Subsequent to the Partnership’s IPO, the unaudited condensed combined financial statements include the accounts of the Partnership and its subsidiaries, Rice Midstream OpCo LLC (“Rice Midstream OpCo”) and Rice Poseidon. Transactions between the Partnership and Rice Energy have been identified in the unaudited condensed combined financial statements as transactions between related parties. Our unaudited condensed combined financial statements have been retrospectively recast for all periods presented to include the historical results of the Water Assets, which were acquired on November 4, 2015, with an effective date of November 1, 2015, as the transaction is accounted for as a combination of entities under common control. Our Predecessor included certain fresh water distribution assets and operations in Pennsylvania that were distributed to Rice Midstream Holdings concurrently with the closing of the Partnership’s IPO. These fresh water distribution assets are included as part of the Water Assets that were acquired on November 4, 2015, and as such, the historical results related to those operations are included for all periods presented. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On November 4, 2015, the Partnership entered into the Purchase Agreement by and between the Partnership and Rice Energy, pursuant to which the Partnership acquired the Water Assets and the Option. In consideration for the acquisition of the Water Assets and the Option, the Partnership paid Rice Energy $200.0 million in cash plus an additional amount, if certain of the conveyed systems’ capacities increase by 5.0 MMgal/d on or prior to December 31, 2017, equal to $25.0 million less the capital expenditures expended by the Partnership to achieve such increase, in accordance with the terms of the Purchase Agreement. The Partnership funded the consideration with borrowings under the Partnership’s revolving credit facility. The acquisition of the Water Assets is accounted for as a combination of entities under common control. The historical condensed combined statements of operations of the Partnership for the three and nine months ended September 30, 2015 and 2014 have been retrospectively recast to include the historical results of the Water Assets, as presented below: (Unaudited) Three Months Ended September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 15,578 $ 8,369 $ 23,947 Third-party 4,564 1,564 6,128 Total operating revenues 20,142 9,933 30,075 Operating expenses: Direct operating expense 1,727 2,694 4,421 General and administrative expense 2,828 1,309 4,137 Incentive unit income — (75 ) (75 ) Equity compensation expense 961 144 1,105 Depreciation expense 1,597 2,820 4,417 Amortization of intangible assets 407 — 407 Other operating income (347 ) — (347 ) Total operating expenses 7,173 6,892 14,065 Operating income 12,969 3,041 16,010 Other income 2 — 2 Interest expense (557 ) (257 ) (814 ) Amortization of deferred financing costs (144 ) — (144 ) Income before income taxes 12,270 2,784 15,054 Income tax expense — (1,794 ) (1,794 ) Net income $ 12,270 $ 990 $ 13,260 (Unaudited) Three Months Ended September 30, 2014 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 68 $ — $ 68 Third-party 1,552 — 1,552 Total operating revenues 1,620 — 1,620 Operating expenses: Direct operating expense 1,495 110 1,605 General and administrative expense 1,115 386 1,501 Incentive unit expense 5,878 109 5,987 Equity compensation expense 260 13 273 Depreciation expense 955 195 1,150 Amortization of intangible assets 408 — 408 Total operating expenses 10,111 813 10,924 Operating loss (8,491 ) (813 ) (9,304 ) Interest expense (2,744 ) (402 ) (3,146 ) Loss before income taxes (11,235 ) (1,215 ) (12,450 ) Income tax benefit 2,119 448 2,567 Net loss from continuing operations (9,116 ) (767 ) (9,883 ) Discontinued operations, net of tax (1,630 ) 1,630 — Net loss $ (10,746 ) $ 863 $ (9,883 ) (Unaudited) Nine Months Ended September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 44,745 $ 27,544 $ 72,289 Third-party 11,294 1,563 12,857 Total operating revenues 56,039 29,107 85,146 Operating expenses: Direct operating expense 3,985 6,043 10,028 General and administrative expense 7,344 2,978 10,322 Incentive unit expense — 1,048 1,048 Equity compensation expense 2,960 356 3,316 Depreciation expense 4,531 5,923 10,454 Amortization of intangible assets 1,223 — 1,223 Other operating expense 492 — 492 Total operating expenses 20,535 16,348 36,883 Operating income 35,504 12,759 48,263 Other income 6 5 11 Interest expense (1,408 ) (662 ) (2,070 ) Amortization of deferred financing costs (432 ) — (432 ) Income before income taxes 33,670 12,102 45,772 Income tax expense — (5,796 ) (5,796 ) Net income $ 33,670 $ 6,306 $ 39,976 (Unaudited) Nine Months Ended September 30, 2014 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 237 $ — $ 237 Third-party 2,842 — 2,842 Total operating revenues 3,079 — 3,079 Operating expenses: Direct operating expense 2,863 557 3,420 General and administrative expense 7,791 941 8,732 Incentive unit expense 10,526 1,265 11,791 Equity compensation expense 378 28 406 Depreciation expense 1,851 761 2,612 Amortization of intangible assets 748 — 748 Total operating expenses 24,157 3,552 27,709 Operating loss (21,078 ) (3,552 ) (24,630 ) Interest expense (10,502 ) (1,246 ) (11,748 ) Loss before income taxes (31,580 ) (4,798 ) (36,378 ) Income tax benefit 8,531 1,454 9,985 Net loss from continuing operations (23,049 ) (3,344 ) (26,393 ) Discontinued operations, net of tax (3,036 ) 3,036 — Net loss $ (26,085 ) $ (308 ) $ (26,393 ) The historical condensed combined balance sheets of the Partnership as of September 30, 2015 and December 31, 2014 have been retrospectively recast to include the historical results of the Water Assets, as presented below. (Unaudited) September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Assets Current assets: Cash $ 18,961 $ 4,921 $ 23,882 Accounts receivable 7,229 1,919 9,148 Accounts receivable - affiliate 4,592 (4,162 ) 430 Deposits, prepaid expenses and other 271 327 598 Total current assets 31,053 3,005 34,058 Property and equipment, net 408,074 137,574 545,648 Deferred financing costs, net 2,462 — 2,462 Goodwill 39,142 — 39,142 Intangible assets, net 46,568 — 46,568 Total assets $ 527,299 $ 140,579 $ 667,878 Liabilities and partners’ capital Current liabilities: Accounts payable 25,278 3,585 28,863 Accrued capital expenditures 21,974 13,141 35,115 Other accrued liabilities 1,106 436 1,542 Total current liabilities 48,358 17,162 65,520 Long-term liabilities: Long term debt 72,000 — 72,000 Deferred tax liabilities — 7,699 7,699 Other long-term liabilities 62 2,232 2,294 Total liabilities 120,420 27,093 147,513 Partners’ capital 406,879 — 406,879 Parent net equity — 113,486 113,486 Total liabilities and partners’ capital $ 527,299 $ 140,579 $ 667,878 December 31, 2014 (in thousands) Previously Reported Water Assets As Recast Assets Current assets: Cash $ 26,832 $ 2 $ 26,834 Accounts receivable 297 — 297 Accounts receivable - affiliate 2,049 — 2,049 Prepaid expenses and other 32 — 32 Deposits 201 — 201 Total current assets 29,411 2 29,413 Property and equipment, net 280,077 43,794 323,871 Deferred financing costs, net 2,874 — 2,874 Goodwill 39,142 — 39,142 Intangible assets, net 47,791 — 47,791 Total assets $ 399,295 $ 43,796 $ 443,091 Liabilities and partners’ capital Current liabilities: Accounts payable 109 — 109 Accrued capital expenditures 4,103 3,399 7,502 Payable to affiliate 156 — 156 Other accrued liabilities 1,577 — 1,577 Total current liabilities 5,945 3,399 9,344 Long-term liabilities: Deferred tax liabilities — 1,903 1,903 Asset retirement obligations — 1,900 1,900 Total liabilities 5,945 7,202 13,147 Partners ’ capital: 393,350 — 393,350 Parent net equity — 36,594 36,594 Total liabilities and partners’ capital $ 399,295 $ 43,796 $ 443,091 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On December 22, 2014 , Rice Midstream OpCo e ntered into a revolving credit agreement (the “revolving credit facility”) with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of lenders with a maximum credit amount of $450.0 million with an additional $200.0 million of commitments available under an accordion feature subject to lender approval. The credit facility provides for a letter of credit sublimit of $50.0 million . As of September 30, 2015 , Rice Midstream OpCo had $72.0 million of borrowings outstanding and no letters of credit under this facility. The revolving credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes. The Partnership is the guarantor of the obligations under the revolving credit facility, which matures on December 22, 2019 . Principal amounts borrowed are payable on the maturity date, and interest is payable quarterly for base rate loans and at the end of the applicable interest period for Eurodollar loans. The Partnership has a choice of borrowing in Eurodollars or at the base rate. Eurodollar loans bear interest at a rate per annum equal to the applicable LIBOR Rate plus an applicable margin ranging from 175 to 275 basis points, depending on the leverage ratio then in effect. Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month Eurodollar loans plus 100 basis points, plus an applicable margin ranging from 75 to 175 basis points, depending on the leverage ratio then in effect. The carrying amount of the revolving credit facility is comprised of borrowings for which interest accrues under a fluctuating interest rate structure. Accordingly, the carrying value approximates fair value as of September 30, 2015 and represents a Level 2 measurement. The Partnership also pays a commitment fee based on the undrawn commitment amount ranging from 35 to 50 basis points. The revolving credit facility is secured by mortgages and other security interests on substantially all of its properties and guarantees from the Partnership and its restricted subsidiaries. The revolving credit facility limits the Partnership’s ability to, among other things: • incur or guarantee additional debt; • redeem or repurchase units or make distributions under certain circumstances; • make certain investments and acquisitions; • incur certain liens or permit them to exist; • enter into certain types of transactions with affiliates; • merge or consolidate with another company; and • transfer, sell or otherwise dispose of assets. The revolving credit facility also requires the Partnership to maintain the following financial ratios: • an interest coverage ratio, which is the ratio of the Partnership’s consolidated EBITDA (as defined within the revolving credit facility) to its consolidated current interest expense of at least 2.50 to 1.0 at the end of each fiscal quarter; • a consolidated total leverage ratio, which is the ratio of consolidated debt to consolidated EBITDA, of not more than 4.75 to 1.0, and after electing to issue senior unsecured notes, a consolidated total leverage ratio of not more than 5.25 to 1.0, and, in each case, with certain increases in the permitted total leverage ratio following the completion of a material acquisition; and • if the Partnership elects to issue senior unsecured notes, a consolidated senior secured leverage ratio, which is the ratio of consolidated senior secured debt to consolidated EBITDA, of not more than 3.50 to 1.0. The Partnership was in compliance with such covenants and ratios effective as of September 30, 2015 . Interest paid in cash was approximately $0.6 million and $1.0 million for the three and nine months ended September 30, 2015 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations The Partnership has lease obligations for compression equipment under existing contracts with third parties. Rent expense included in operation and maintenance expense for the three and nine months ended September 30, 2015 was $0.4 million and $1.3 million , respectively, and for the three and nine months ended September 30, 2014 was $0.2 million and $0.4 million , respectively. Future payments for this equipment as of September 30, 2015 totaled $5.7 million (2015- $0.4 million , 2016- $1.6 million , 2017- $0.9 million , 2018- $0.9 million , 2019- $0.9 million and thereafter- $1.0 million ). Environmental Obligations The Partnership is subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. The Partnership believes there are currently no such regulatory or environmental matters that will have a material adverse effect on its results of operations, cash flows or financial position. |
Partners' Capital
Partners' Capital | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Partners' Capital | Partners’ Capital On December 22, 2014 , the Partnership completed an underwritten IPO of 28,750,000 common units representing limited partner interests in the Partnership. Rice Energy retained a 50% equity interest in the Partnership, consisting of 3,623 common units and 28,753,623 subordinated units. Concurrent with the IPO, Rice Energy contributed to the Partnership 100% of Rice Poseidon. A wholly-owned subsidiary of Rice Energy serves as the general partner of the Partnership. The Partnership received cash proceeds, net of issuance costs, of approximately $444.1 million upon the closing of the IPO. Approximately $414.4 million of the proceeds were distributed to Rice Energy, $25.0 million were used by the Partnership to fund 2015 expansion capital expenditures, approximately $2.0 million were used to pay expenses of the IPO and $2.7 million were used by the Partnership to pay origination fees associated with the credit agreement entered into by the Partnership at the closing of the IPO. |
Phantom Unit Awards
Phantom Unit Awards | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Phantom Unit Awards | Phantom Unit Awards In connection with the closing of the IPO, the Partnership’s general partner granted phantom unit awards under the Rice Midstream Partners LP 2014 Long Term Incentive Plan (the “LTIP”) to certain non-employee directors of the Partnership and executive officers and employees of Rice Energy. The Partnership recorded $1.0 million and $3.0 million of equity compensation expense related to these awards in the three and nine months ended September 30, 2015 , respectively. Total unrecognized compensation expense expected to be recognized over the remaining vesting periods as of September 30, 2015 is $3.8 million for these awards. See Note 10 for a discussion of Rice Energy’s allocation of expense related to its stock compensation plans prior to the IPO. |
Net Income per Limited Partner
Net Income per Limited Partner Unit and Cash Distributions | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Income per Limited Partner Unit and Cash Distributions | Net Income per Limited Partner Unit and Cash Distributions The Partnership’s net income is allocated to the limited partners, including subordinated unitholders, in accordance with their respective ownership percentages, and when applicable, giving effect to the incentive distribution rights held by Rice Midstream Holdings LLC, a wholly-owned subsidiary of Rice Energy (“Rice Midstream Holdings”). The allocation of undistributed earnings, or net income in excess of distributions, to the incentive distribution rights is limited to cash available for distribution for the period. 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. Net income attributable to the Water Assets for the periods prior to their acquisition was not allocated to the limited partners for purposes of calculating net income per limited partner unit as these results are not attributable to limited partners of the Partnership. 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 LTIP, were exercised, settled or converted into common units. When it is determined that potential common units should be included in diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method. The following table presents Partnership’s calculation of net income per limited partner unit for common and subordinated limited partner units. Net income attributable to the periods prior to the IPO and to the Water Assets for periods prior to their acquisition on November 4, 2015 are not allocated to the limited partners for purposes of calculating net income per limited partner unit. (in thousands, except unit data) Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Net income $ 13,260 $ 39,976 Less: Pre-acquisition net income allocated to general partner (1) 990 6,306 Limited partner net income $ 12,270 $ 33,670 Net income allocable to common units $ 6,135 $ 16,835 Net income allocable to subordinated units 6,135 16,835 Limited partner net income $ 12,270 $ 33,670 Weighted-average limited partner units outstanding - basic: Common units 28,753,623 28,753,623 Subordinated units 28,753,623 28,753,623 Total 57,507,246 57,507,246 Weighted-average limited partner units outstanding - diluted: Common units (2) 28,899,075 28,844,202 Subordinated units 28,753,623 28,753,623 Total 57,652,698 57,597,825 Net income per limited partner unit - basic: Common units $ 0.21 $ 0.59 Subordinated units 0.21 0.59 Total $ 0.21 $ 0.59 Net income per limited partner unit - diluted: Common units $ 0.21 $ 0.58 Subordinated units (3) 0.21 0.59 Total $ 0.21 $ 0.58 Cash distributions declared per limited partner unit: (4) Common units $ 0.1935 $ 0.5715 Subordinated units 0.1935 0.5715 Total $ 0.1935 $ 0.5715 (1) Pre-acquisition net loss allocated to the general partner relates to operations of the Water Assets for periods prior to their acquisition on November 4, 2015. (2) Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015 , respectively, related to phantom units. (3) Diluted net income per limited partner unit is presented as if all earnings for the period had been distributed, and while it appears that more income is allocated to the subordinated unit holders than the common unitholders based on the dilution of the common units from the LTIP for the three and nine months ended September 30, 2015, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. (4) See Note 12 for further discussion of cash distributions declared for the period presented. Subordinated Units Rice Midstream Holdings owns all of the Partnership’s subordinated units. The principal difference between the Partnership’s common units and subordinated units is that, for any quarter during the “subordination period,” holders of the subordinated units will not be entitled to receive any distribution from operating surplus until the common units have received the minimum quarterly distribution for such quarter plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages. When the subordination period ends, each outstanding subordinated unit will convert into one common unit, which will then participate pro rata with the other common units in distributions. Incentive Distribution Rights All of the incentive distribution rights are held by Rice Midstream Holdings. Incentive distribution rights represent the right to receive increasing percentages ( 15% , 25% and 50% ) of quarterly distributions from operating surplus after the minimum quarterly distribution and the target distribution levels (described below) have been achieved. For any quarter in which the Partnership has distributed cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum distribution, then the Partnership will distribute any additional available cash from operating surplus for that quarter among the unitholders and the incentive distribution rights holders within 60 days after the end of each quarter in the following manner: Marginal Percentage Interest in Distributions Total Quarterly Distribution Per Unit Unitholders Incentive Distribution Rights Holders Minimum Quarterly Distribution $0.1875 100% —% First Target Distribution above $0.1875 up to $0.2156 100% —% Second Target Distribution above $0.2156 up to $0.2344 85% 15% Third Target Distribution above $0.2344 up to $0.2813 75% 25% Thereafter above $0.2813 50% 50% On August 13, 2015 , a cash distribution of $0.1905 per common and subordinated unit was paid to the Partnership’s unitholders related to the second quarter of 2015. On October 23, 2015, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the third quarter of 2015 of $ 0.1935 per common and subordinated unit. The cash distribution [will be paid] on November 12, 2015 to unitholders of record at the close of business on November 3, 2015. |
Financial Information by Busine
Financial Information by Business Segment | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Financial Information by Business Segment | Financial Information by Business Segment The Partnership operates in two business segments: (i) gathering and compression and (ii) water services. The gathering and compression segment provides natural gas gathering and compression services for Rice Energy and third parties in the Appalachian Basin. The water services segment is engaged in the provision of water services to support well completion activities and to collect and recycle or dispose of flowback and produced water for Rice Energy and third parties in the Appalachian Basin. Business segments are evaluated for their contribution to the Partnership’s combined results based on operating income, which is defined as segment operating revenues less expenses. Other income and expenses, interest and income taxes are managed on a consolidated basis. The segment accounting policies are the same as those described in Note 1 to the Partnership’s Combined Financial Statements for the year ended December 31, 2014 contained in its 2014 Annual Report. Three months ended September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 15,578 $ 8,369 $ 23,947 Third-party 4,564 1,564 6,128 Total operating revenues 20,142 9,933 30,075 Operating expenses: Direct operating expense 1,727 2,694 4,421 General and administrative expense 2,828 1,309 4,137 Incentive unit income — (75 ) (75 ) Equity compensation expense 961 144 1,105 Depreciation expense 1,597 2,820 4,417 Amortization of intangible assets 407 — 407 Other operating income (347 ) — (347 ) Total operating expenses 7,173 6,892 14,065 Operating income $ 12,969 $ 3,041 $ 16,010 Capital expenditures for segment assets $ 44,544 $ 23,759 $ 68,303 Three Months Ended September 30, 2014 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Third-party $ 1,552 $ — $ 1,552 Affiliate 68 — 68 Total operating revenues 1,620 — 1,620 Operating expenses: Direct operating expense 1,495 110 1,605 General and administrative expense 1,115 386 1,501 Incentive unit expense 5,878 109 5,987 Equity compensation expense 260 13 273 Depreciation expense 955 195 1,150 Amortization of intangible assets 408 — 408 Total operating expenses 10,111 813 10,924 Operating loss $ (8,491 ) $ (813 ) $ (9,304 ) Capital expenditures for segment assets $ 23,005 $ 5,786 $ 28,791 Nine Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 44,745 $ 27,544 $ 72,289 Third-party 11,294 1,563 12,857 Total operating revenues 56,039 29,107 85,146 Operating expenses: Direct operating expense 3,985 6,043 10,028 General and administrative expense 7,344 2,978 10,322 Incentive unit expense — 1,048 1,048 Equity compensation expense 2,960 356 3,316 Depreciation expense 4,531 5,923 10,454 Amortization of intangible assets 1,223 — 1,223 Other operating expense 492 — 492 Total operating expenses 20,535 16,348 36,883 Operating income $ 35,504 $ 12,759 $ 48,263 Capital expenditures for segment assets $ 91,451 $ 86,653 $ 178,104 Nine Months Ended September 30, 2014 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 237 $ — $ 237 Third-party 2,842 — 2,842 Total operating revenues 3,079 — 3,079 Operating expenses: Direct operating expense 2,863 557 3,420 General and administrative expense 7,791 941 8,732 Incentive unit expense 10,526 1,265 11,791 Equity compensation expense 378 28 406 Depreciation expense 1,851 761 2,612 Amortization of intangible assets 748 — 748 Total operating expenses 24,157 3,552 27,709 Operating loss $ (21,078 ) $ (3,552 ) $ (24,630 ) Capital expenditures for segment assets $ 62,944 $ 6,635 $ 69,579 As of September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 527,299 $ 140,579 $ 667,878 Goodwill $ 39,142 $ — $ 39,142 As of December 31, 2014 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 399,295 $ 43,796 $ 443,091 Goodwill $ 39,142 $ — $ 39,142 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Partnership is not subject to federal and state income taxes as a result of its limited partner structure. For federal and state income tax purposes, all income, expenses, gains, losses and tax credits generated by the Partnership flow through to the unitholders. As such, the Partnership does not record a provision for income taxes in the current period. Prior to the IPO, the Partnership’s income was included as part of Rice Energy’s consolidated federal tax return. The Partnership did not report any income tax benefit or expense for periods prior to January 29, 2014, which was the date of Rice Energy’s initial public offering, because Rice Energy’s accounting predecessor was a limited liability company that was not subject to federal income tax. For the period beginning January 29, 2014 and ending December 21, 2014, Rice Energy allocated an income tax benefit to the Predecessor. Prior to the acquisition of the Water Assets, the operations of the Water Assets were subject to income taxes and were included as part of Rice Energy’s consolidated federal tax return. Accordingly, the income tax effects associated with the operations of the Water Assets continued to be subject to income taxes until the Water Assets were acquired by the Partnership. Due to the Partnership’s status for U.S. federal and state income tax purposes, net current and deferred income tax liabilities of the Water Assets will be eliminated through equity for periods following the effective date of their acquisition by the Partnership on November 1, 2015. Tax expense of $1.8 million and $5.8 million for the three and nine months ended September 30, 2015 , respectively, is recorded in the combined financial statements, resulting in an effective tax rate of approximately 11.91% and 12.66% , for the three and nine months ended September 30, 2015 , respectively. A tax benefit of $2.6 million and $10.0 million was recorded in the combined financial statements for the three and nine months ended September 30, 2014, respectively, resulting in an effective tax rate of approximately 20.62% and 27.45% for the three and nine months ended September 30, 2014, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In the ordinary course of business, the Partnership has transactions with affiliated companies. During the nine months ended September 30, 2015 and 2014 , related parties included Rice Energy and certain of its subsidiaries. Prior to the IPO, the push-down impact of the transactions were recorded in the combined statements of operations, and although no cash settlement occurred, all transactions with Rice Energy and its subsidiaries were recorded in parent net equity. Upon completion of the IPO, the Partnership entered into an omnibus agreement (the “Omnibus Agreement”) with its general partner, Rice Energy, Rice Poseidon and Rice Midstream Holdings. Pursuant to the Omnibus Agreement, Rice Energy performs centralized corporate and general and administrative services for the Partnership, such as financial and administrative, information technology, legal, health, safety and environmental, human resources, procurement, engineering, business development, investor relations, insurance and tax. In exchange, the Partnership reimburses Rice Energy for the expenses incurred in providing these services, except for any expenses associated with Rice Energy’s long-term incentive programs as these are not expenses of the Partnership subsequent to the IPO. The expenses for which the Partnership reimburses Rice Energy and its subsidiaries related to corporate and general and administrative services may not necessarily reflect the actual expenses that the Partnership would incur on a stand-alone basis. The Partnership is unable to estimate what the costs would have been with an unrelated third party. Also upon completion of the IPO, the Partnership entered into a 15 year, fixed-fee gas gathering and compression agreement (the “Gas Gathering and Compression Agreement”) with Rice Drilling B and Alpha Shale, pursuant to which the Partnership gathers Rice Energy’s natural gas and provides compression services on the Partnership’s gathering systems located in Washington County and Greene County, Pennsylvania. Pursuant to the Gas Gathering and Compression Agreement, the Partnership will charge Rice Energy a gathering fee of $0.30 per Dth and a compression fee of $0.07 per Dth per stage of compression, each subject to annual adjustment for inflation based on the Consumer Price Index. The Gas Gathering and Compression Agreement covers substantially all of Rice Energy’s acreage position in the dry gas core of the Marcellus Shale in southwestern Pennsylvania as of September 30, 2015 and any future acreage it acquires within these counties, other than 19,000 gross acres subject to a pre-existing third-party dedication. In connection with the closing of the acquisition of the Water Assets on November 4, 2015, we entered into Amended and Restated Water Services Agreements (the “Water Services Agreements”) with Rice Energy, whereby we have agreed to provide certain fluid handling services to Rice Energy, including the exclusive right to provide fresh water for well completions operations in the Marcellus and Utica Shales and to collect and recycle or dispose of flowback and produced water for Rice Energy within areas of dedication in defined service areas in Pennsylvania and Ohio. The initial term of the Water Services Agreements is until December 22, 2029 and from month to month thereafter. Under the agreements, Rice Energy will pay the Partnership (i) a variable fee, based on volumes of water supplied, for freshwater deliveries by pipeline directly to the well site, subject to annual CPI adjustments and (ii) a produced water hauling fee of actual out-of-pocket cost incurred by us, plus a 2% margin. During the nine months ended September 30, 2014 , Rice Energy granted stock compensation awards to certain non-employee directors and employees. The awards consisted of restricted stock units, which vest upon the passage of time, and performance stock units, which vest based upon attainment of specified performance criteria. Stock compensation expense related to these awards allocated to the Partnership based on its estimate of the expense attributable to its operations, prior to the IPO, was $0.3 million and $0.4 million for the three and nine months ended September 30, 2014 , respectively. Additionally, stock compensation expense of $0.1 million and $0.4 million was allocated to the Water Assets by Rice Energy for the three and nine months ended September 30, 2015, respectively, and $13.1 thousand and $27.6 thousand was allocated to the Water Assets by Rice Energy for the three and nine months ended September 30, 2014 , respectively. For periods subsequent to the IPO, no stock compensation expense has been allocated to the Partnership by Rice Energy. However, equity compensation expense includes amounts allocated to the Water Assets by Rice Energy for periods subsequent to the Partnership’s IPO through the acquisition date. See Note 6 for a discussion of the Partnership’s equity compensation expense subsequent to the its IPO. Prior to Rice Energy’s initial public offering on January 29, 2014, the only long-term incentives offered to certain executives and employees were through grants of incentive units, which were profits interests representing an interest in the future profits (once a certain level of proceeds has been generated) of Rice Energy’s predecessor parent entity Rice Energy Appalachia, LLC (“REA”) and granted pursuant to the limited liability company agreement of REA. The compensation expense recognized in these unaudited condensed combined financial statements is a non-cash charge, with the settlement obligation resting on NGP Rice Holdings, LLC (“NGP Holdings”) and Rice Energy Holdings LLC (“Rice Holdings”). Payments on the incentive units will be made by Rice Holdings and NGP Holdings and not by Rice Energy or the Partnership, and as such, are not dilutive to Rice Energy or the Partnership. Incentive unit expense allocated to the Partnership based on its estimate of the expense attributable to its operations was $5.9 million and $10.5 million for the three and nine months ended September 30, 2014 , respectively. Additionally, incentive unit (income) expense allocated to the Water Assets by Rice Energy was $0.1 million and $1.0 million for the three and nine months ended September 30, 2015 , respectively, and $0.1 million and $1.3 million for the three and nine months ended September 30, 2014 , respectively. No expense was recognized prior to Rice Energy’s initial public offering as the performance conditions related to the incentive units were deemed not probable of occurring. For periods subsequent to the Partnership’s IPO, no incentive unit expense has been allocated to the Partnership by Rice Energy. However, incentive unit expense includes amounts allocated to the Water Assets from Rice Energy for periods subsequent to the Partnership’s IPO through the acquisition date. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. The FASB created Topic 606 which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. Additionally, ASU 2014-09 will reduce the number of requirements which an entity must consider in recognizing revenue, as this update will replace multiple locations for guidance. The FASB and International Accounting Standards Board initiated this joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for both U.S. GAAP and International Financial Reporting Standards. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year. ASU 2014-09 will now be effective for annual reporting periods beginning after December 15, 2017 and should be applied retrospectively. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. The Partnership has not yet selected a transition method and is currently evaluating the standard and the impact on its combined financial statements and footnote disclosures. In February 2015, the FASB issued ASU, 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for periods beginning after December 15, 2015 with early adoption permitted. The Partnership is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. In April 2015, the FASB issued ASU, 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplification of Debt Issuance Costs.” ASU 2015-03 was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU 2015-03 is effective for periods beginning after December 15, 2015 with early adoption permitted. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Partnership is currently evaluating the impact of the provisions of ASU 2015-03 and ASU 2015-15. In April 2015, the FASB issued ASU, 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions.” ASU 2015-6 was issued to clarify the process for updating historical earnings per unit disclosures under the two-class method when a drop-down transaction occurs between entities under common control. ASU 2015-06 is effective for periods beginning after December 15, 2015. The guidance should be applied retrospectively and early adoption is permitted. The Partnership is currently evaluating the impact of the guidance on its combined financial statements. In September 2015, the FASB issued ASU, 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for periods beginning after December 15, 2015 with early adoption permitted. The Partnership is currently evaluating the impact of the provisions of ASU 2015-16. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 23, 2015, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the third quarter of 2015 of $ 0.1935 per common and subordinated unit. The cash distribution [will be paid] on November 12, 2015 to unitholders of record at the close of business on November 3, 2015. On November 4, 2015 , the Partnership entered into the Purchase Agreement by and between the Partnership and Rice Energy, pursuant to which the Partnership acquired the Water Assets and the Option. In consideration for the acquisition of the Water Assets and the receipt of the Option, the Partnership paid Rice Energy $200.0 million in cash plus an additional amount, if certain of the conveyed systems’ capacities increase by 5.0 MMgal/d on or prior to December 31, 2017 , equal to $25.0 million less the capital expenditures expended by the Partnership to achieve such increase, in accordance with the terms of the Purchase Agreement. The Partnership funded the consideration with borrowings under the Partnership’s revolving credit facility. The acquisition is accounted for as a combination of entities under common control at historical cost. In connection with the closing of the acquisition of the Water Assets, on November 4, 2015 , Rice Energy entered into the Water Services Agreements with PA Water and OH Water, respectively, whereby PA Water and OH Water, as applicable, have agreed to provide certain fluid handling services to Rice Energy, including the exclusive right to provide fresh water for well completions operations in the Marcellus and Utica Shales and to collect and recycle or dispose of flowback, produced water and other fluids for Rice within areas of dedication in defined service areas in Pennsylvania and Ohio. The initial term of the Water Services Agreements is until December 22, 2029 and from month to month thereafter. Under the agreements, Rice Energy will pay (i) a variable fee, based on volumes of water supplied, for freshwater deliveries by pipeline directly to the well site, subject to annual CPI adjustments and (ii) a produced water hauling fee of actual out-of-pocket cost incurred by PA Water and OH Water, plus a 2% margin. In addition, on November 4, 2015 , the Partnership entered into a Common Unit Purchase Agreement with certain institutional investors to sell 13,409,961 common units in a private placement for gross proceeds of approximately $175.0 million (the “Private Placement”). The Private Placement closed on November 10, 2015 . The Partnership used the proceeds of the Private Placement to repay a portion of the borrowings under the Partnership’s credit facility. As of November 13, 2015, after giving effect to the acquisition of the Water Assets, expansion capital expenditures and the Private Placement proceeds, the Partnership had $122.0 million of borrowings outstanding under its revolving credit facility. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed combined financial statements of the Partnership have been prepared by the Partnership’s management in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The unaudited condensed combined financial statements included herein contain all adjustments which are, in the opinion of management, necessary to present fairly the Partnership’s financial position as of September 30, 2015 and December 31, 2014 and its unaudited condensed combined statements of operations for the three and nine months ended September 30, 2015 and 2014 and cash flows for the nine months ended September 30, 2015 and 2014 . For periods prior to December 22, 2014, those condensed combined financial statements have been prepared from the separate records maintained by Rice Energy and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods prior to the Partnership’s IPO. Because a direct ownership relationship did not exist among the businesses comprising the Predecessor, the net investment in the Predecessor is shown as parent net equity in the condensed combined financial statements. Subsequent to the Partnership’s IPO, the unaudited condensed combined financial statements include the accounts of the Partnership and its subsidiaries, Rice Midstream OpCo LLC (“Rice Midstream OpCo”) and Rice Poseidon. Transactions between the Partnership and Rice Energy have been identified in the unaudited condensed combined financial statements as transactions between related parties. Our unaudited condensed combined financial statements have been retrospectively recast for all periods presented to include the historical results of the Water Assets, which were acquired on November 4, 2015, with an effective date of November 1, 2015, as the transaction is accounted for as a combination of entities under common control. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. The FASB created Topic 606 which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. Additionally, ASU 2014-09 will reduce the number of requirements which an entity must consider in recognizing revenue, as this update will replace multiple locations for guidance. The FASB and International Accounting Standards Board initiated this joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for both U.S. GAAP and International Financial Reporting Standards. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.” The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year. ASU 2014-09 will now be effective for annual reporting periods beginning after December 15, 2017 and should be applied retrospectively. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that period. The Partnership has not yet selected a transition method and is currently evaluating the standard and the impact on its combined financial statements and footnote disclosures. In February 2015, the FASB issued ASU, 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-02 is effective for periods beginning after December 15, 2015 with early adoption permitted. The Partnership is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements. In April 2015, the FASB issued ASU, 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplification of Debt Issuance Costs.” ASU 2015-03 was issued to simplify the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU 2015-03 is effective for periods beginning after December 15, 2015 with early adoption permitted. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Partnership is currently evaluating the impact of the provisions of ASU 2015-03 and ASU 2015-15. In April 2015, the FASB issued ASU, 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions.” ASU 2015-6 was issued to clarify the process for updating historical earnings per unit disclosures under the two-class method when a drop-down transaction occurs between entities under common control. ASU 2015-06 is effective for periods beginning after December 15, 2015. The guidance should be applied retrospectively and early adoption is permitted. The Partnership is currently evaluating the impact of the guidance on its combined financial statements. In September 2015, the FASB issued ASU, 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for periods beginning after December 15, 2015 with early adoption permitted. The Partnership is currently evaluating the impact of the provisions of ASU 2015-16. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Combined Statement of Income | The historical condensed combined statements of operations of the Partnership for the three and nine months ended September 30, 2015 and 2014 have been retrospectively recast to include the historical results of the Water Assets, as presented below: (Unaudited) Three Months Ended September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 15,578 $ 8,369 $ 23,947 Third-party 4,564 1,564 6,128 Total operating revenues 20,142 9,933 30,075 Operating expenses: Direct operating expense 1,727 2,694 4,421 General and administrative expense 2,828 1,309 4,137 Incentive unit income — (75 ) (75 ) Equity compensation expense 961 144 1,105 Depreciation expense 1,597 2,820 4,417 Amortization of intangible assets 407 — 407 Other operating income (347 ) — (347 ) Total operating expenses 7,173 6,892 14,065 Operating income 12,969 3,041 16,010 Other income 2 — 2 Interest expense (557 ) (257 ) (814 ) Amortization of deferred financing costs (144 ) — (144 ) Income before income taxes 12,270 2,784 15,054 Income tax expense — (1,794 ) (1,794 ) Net income $ 12,270 $ 990 $ 13,260 (Unaudited) Three Months Ended September 30, 2014 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 68 $ — $ 68 Third-party 1,552 — 1,552 Total operating revenues 1,620 — 1,620 Operating expenses: Direct operating expense 1,495 110 1,605 General and administrative expense 1,115 386 1,501 Incentive unit expense 5,878 109 5,987 Equity compensation expense 260 13 273 Depreciation expense 955 195 1,150 Amortization of intangible assets 408 — 408 Total operating expenses 10,111 813 10,924 Operating loss (8,491 ) (813 ) (9,304 ) Interest expense (2,744 ) (402 ) (3,146 ) Loss before income taxes (11,235 ) (1,215 ) (12,450 ) Income tax benefit 2,119 448 2,567 Net loss from continuing operations (9,116 ) (767 ) (9,883 ) Discontinued operations, net of tax (1,630 ) 1,630 — Net loss $ (10,746 ) $ 863 $ (9,883 ) (Unaudited) Nine Months Ended September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 44,745 $ 27,544 $ 72,289 Third-party 11,294 1,563 12,857 Total operating revenues 56,039 29,107 85,146 Operating expenses: Direct operating expense 3,985 6,043 10,028 General and administrative expense 7,344 2,978 10,322 Incentive unit expense — 1,048 1,048 Equity compensation expense 2,960 356 3,316 Depreciation expense 4,531 5,923 10,454 Amortization of intangible assets 1,223 — 1,223 Other operating expense 492 — 492 Total operating expenses 20,535 16,348 36,883 Operating income 35,504 12,759 48,263 Other income 6 5 11 Interest expense (1,408 ) (662 ) (2,070 ) Amortization of deferred financing costs (432 ) — (432 ) Income before income taxes 33,670 12,102 45,772 Income tax expense — (5,796 ) (5,796 ) Net income $ 33,670 $ 6,306 $ 39,976 (Unaudited) Nine Months Ended September 30, 2014 (in thousands) Previously Reported Water Assets As Recast Operating revenues: Affiliate $ 237 $ — $ 237 Third-party 2,842 — 2,842 Total operating revenues 3,079 — 3,079 Operating expenses: Direct operating expense 2,863 557 3,420 General and administrative expense 7,791 941 8,732 Incentive unit expense 10,526 1,265 11,791 Equity compensation expense 378 28 406 Depreciation expense 1,851 761 2,612 Amortization of intangible assets 748 — 748 Total operating expenses 24,157 3,552 27,709 Operating loss (21,078 ) (3,552 ) (24,630 ) Interest expense (10,502 ) (1,246 ) (11,748 ) Loss before income taxes (31,580 ) (4,798 ) (36,378 ) Income tax benefit 8,531 1,454 9,985 Net loss from continuing operations (23,049 ) (3,344 ) (26,393 ) Discontinued operations, net of tax (3,036 ) 3,036 — Net loss $ (26,085 ) $ (308 ) $ (26,393 ) |
Schedule of Combined Balance Sheet | The historical condensed combined balance sheets of the Partnership as of September 30, 2015 and December 31, 2014 have been retrospectively recast to include the historical results of the Water Assets, as presented below. (Unaudited) September 30, 2015 (in thousands) Previously Reported Water Assets As Recast Assets Current assets: Cash $ 18,961 $ 4,921 $ 23,882 Accounts receivable 7,229 1,919 9,148 Accounts receivable - affiliate 4,592 (4,162 ) 430 Deposits, prepaid expenses and other 271 327 598 Total current assets 31,053 3,005 34,058 Property and equipment, net 408,074 137,574 545,648 Deferred financing costs, net 2,462 — 2,462 Goodwill 39,142 — 39,142 Intangible assets, net 46,568 — 46,568 Total assets $ 527,299 $ 140,579 $ 667,878 Liabilities and partners’ capital Current liabilities: Accounts payable 25,278 3,585 28,863 Accrued capital expenditures 21,974 13,141 35,115 Other accrued liabilities 1,106 436 1,542 Total current liabilities 48,358 17,162 65,520 Long-term liabilities: Long term debt 72,000 — 72,000 Deferred tax liabilities — 7,699 7,699 Other long-term liabilities 62 2,232 2,294 Total liabilities 120,420 27,093 147,513 Partners’ capital 406,879 — 406,879 Parent net equity — 113,486 113,486 Total liabilities and partners’ capital $ 527,299 $ 140,579 $ 667,878 December 31, 2014 (in thousands) Previously Reported Water Assets As Recast Assets Current assets: Cash $ 26,832 $ 2 $ 26,834 Accounts receivable 297 — 297 Accounts receivable - affiliate 2,049 — 2,049 Prepaid expenses and other 32 — 32 Deposits 201 — 201 Total current assets 29,411 2 29,413 Property and equipment, net 280,077 43,794 323,871 Deferred financing costs, net 2,874 — 2,874 Goodwill 39,142 — 39,142 Intangible assets, net 47,791 — 47,791 Total assets $ 399,295 $ 43,796 $ 443,091 Liabilities and partners’ capital Current liabilities: Accounts payable 109 — 109 Accrued capital expenditures 4,103 3,399 7,502 Payable to affiliate 156 — 156 Other accrued liabilities 1,577 — 1,577 Total current liabilities 5,945 3,399 9,344 Long-term liabilities: Deferred tax liabilities — 1,903 1,903 Asset retirement obligations — 1,900 1,900 Total liabilities 5,945 7,202 13,147 Partners ’ capital: 393,350 — 393,350 Parent net equity — 36,594 36,594 Total liabilities and partners’ capital $ 399,295 $ 43,796 $ 443,091 |
Net Income per Limited Partne21
Net Income per Limited Partner Unit and Cash Distributions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents Partnership’s calculation of net income per limited partner unit for common and subordinated limited partner units. Net income attributable to the periods prior to the IPO and to the Water Assets for periods prior to their acquisition on November 4, 2015 are not allocated to the limited partners for purposes of calculating net income per limited partner unit. (in thousands, except unit data) Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Net income $ 13,260 $ 39,976 Less: Pre-acquisition net income allocated to general partner (1) 990 6,306 Limited partner net income $ 12,270 $ 33,670 Net income allocable to common units $ 6,135 $ 16,835 Net income allocable to subordinated units 6,135 16,835 Limited partner net income $ 12,270 $ 33,670 Weighted-average limited partner units outstanding - basic: Common units 28,753,623 28,753,623 Subordinated units 28,753,623 28,753,623 Total 57,507,246 57,507,246 Weighted-average limited partner units outstanding - diluted: Common units (2) 28,899,075 28,844,202 Subordinated units 28,753,623 28,753,623 Total 57,652,698 57,597,825 Net income per limited partner unit - basic: Common units $ 0.21 $ 0.59 Subordinated units 0.21 0.59 Total $ 0.21 $ 0.59 Net income per limited partner unit - diluted: Common units $ 0.21 $ 0.58 Subordinated units (3) 0.21 0.59 Total $ 0.21 $ 0.58 Cash distributions declared per limited partner unit: (4) Common units $ 0.1935 $ 0.5715 Subordinated units 0.1935 0.5715 Total $ 0.1935 $ 0.5715 (1) Pre-acquisition net loss allocated to the general partner relates to operations of the Water Assets for periods prior to their acquisition on November 4, 2015. (2) Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015 , respectively, related to phantom units. (3) Diluted net income per limited partner unit is presented as if all earnings for the period had been distributed, and while it appears that more income is allocated to the subordinated unit holders than the common unitholders based on the dilution of the common units from the LTIP for the three and nine months ended September 30, 2015, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. (4) See Note 12 for further discussion of cash distributions declared for the period presented. |
Schedule of Incentive Distribution Rights | For any quarter in which the Partnership has distributed cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum distribution, then the Partnership will distribute any additional available cash from operating surplus for that quarter among the unitholders and the incentive distribution rights holders within 60 days after the end of each quarter in the following manner: Marginal Percentage Interest in Distributions Total Quarterly Distribution Per Unit Unitholders Incentive Distribution Rights Holders Minimum Quarterly Distribution $0.1875 100% —% First Target Distribution above $0.1875 up to $0.2156 100% —% Second Target Distribution above $0.2156 up to $0.2344 85% 15% Third Target Distribution above $0.2344 up to $0.2813 75% 25% Thereafter above $0.2813 50% 50% |
Financial Information by Busi22
Financial Information by Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Three months ended September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 15,578 $ 8,369 $ 23,947 Third-party 4,564 1,564 6,128 Total operating revenues 20,142 9,933 30,075 Operating expenses: Direct operating expense 1,727 2,694 4,421 General and administrative expense 2,828 1,309 4,137 Incentive unit income — (75 ) (75 ) Equity compensation expense 961 144 1,105 Depreciation expense 1,597 2,820 4,417 Amortization of intangible assets 407 — 407 Other operating income (347 ) — (347 ) Total operating expenses 7,173 6,892 14,065 Operating income $ 12,969 $ 3,041 $ 16,010 Capital expenditures for segment assets $ 44,544 $ 23,759 $ 68,303 Three Months Ended September 30, 2014 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Third-party $ 1,552 $ — $ 1,552 Affiliate 68 — 68 Total operating revenues 1,620 — 1,620 Operating expenses: Direct operating expense 1,495 110 1,605 General and administrative expense 1,115 386 1,501 Incentive unit expense 5,878 109 5,987 Equity compensation expense 260 13 273 Depreciation expense 955 195 1,150 Amortization of intangible assets 408 — 408 Total operating expenses 10,111 813 10,924 Operating loss $ (8,491 ) $ (813 ) $ (9,304 ) Capital expenditures for segment assets $ 23,005 $ 5,786 $ 28,791 Nine Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 44,745 $ 27,544 $ 72,289 Third-party 11,294 1,563 12,857 Total operating revenues 56,039 29,107 85,146 Operating expenses: Direct operating expense 3,985 6,043 10,028 General and administrative expense 7,344 2,978 10,322 Incentive unit expense — 1,048 1,048 Equity compensation expense 2,960 356 3,316 Depreciation expense 4,531 5,923 10,454 Amortization of intangible assets 1,223 — 1,223 Other operating expense 492 — 492 Total operating expenses 20,535 16,348 36,883 Operating income $ 35,504 $ 12,759 $ 48,263 Capital expenditures for segment assets $ 91,451 $ 86,653 $ 178,104 Nine Months Ended September 30, 2014 (in thousands) Gathering and Compression Water Services Combined Total Operating revenues: Affiliate $ 237 $ — $ 237 Third-party 2,842 — 2,842 Total operating revenues 3,079 — 3,079 Operating expenses: Direct operating expense 2,863 557 3,420 General and administrative expense 7,791 941 8,732 Incentive unit expense 10,526 1,265 11,791 Equity compensation expense 378 28 406 Depreciation expense 1,851 761 2,612 Amortization of intangible assets 748 — 748 Total operating expenses 24,157 3,552 27,709 Operating loss $ (21,078 ) $ (3,552 ) $ (24,630 ) Capital expenditures for segment assets $ 62,944 $ 6,635 $ 69,579 |
Reconciliation of Assets from Segment to Consolidated | As of September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 527,299 $ 140,579 $ 667,878 Goodwill $ 39,142 $ — $ 39,142 As of December 31, 2014 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 399,295 $ 43,796 $ 443,091 Goodwill $ 39,142 $ — $ 39,142 |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated | As of September 30, 2015 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 527,299 $ 140,579 $ 667,878 Goodwill $ 39,142 $ — $ 39,142 As of December 31, 2014 (in thousands) Gathering and Compression Water Services Combined Total Segment assets $ 399,295 $ 43,796 $ 443,091 Goodwill $ 39,142 $ — $ 39,142 |
Basis of Presentation (Details)
Basis of Presentation (Details) - subsidiary | Nov. 04, 2015 | Jan. 29, 2014 | Jan. 28, 2014 |
Water Assets | Subsequent Event | Subsidiary of Common Parent | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of subsidiaries acquired | 2 | ||
Predecessor | Alpha Shale Joint Venture | |||
Subsidiary, Sale of Stock [Line Items] | |||
Percentage of voting interests acquired | 50.00% | ||
Equity investment ownership percentage | 50.00% |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - Subsequent Event - Subsidiary of Common Parent - Water Assets gal in Millions, $ in Millions | Nov. 04, 2015USD ($)gal |
Business Acquisition [Line Items] | |
Aggregate purchase price | $ 200 |
Increase in conveyed systems' capacities | gal | 5 |
Amount of earn out provision | $ 25 |
Acquisitions (Schedule of Combi
Acquisitions (Schedule of Combined Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
Operating revenues: | |||||||
Affiliate | [1] | $ 23,947 | $ 68 | $ 72,289 | $ 237 | ||
Third-party | [1] | 6,128 | 1,552 | 12,857 | 2,842 | ||
Total operating revenues | [1] | 30,075 | 1,620 | 85,146 | 3,079 | ||
Operating expenses: | |||||||
Operation and maintenance expense | [1] | 4,421 | 1,605 | 10,028 | 3,420 | ||
General and administrative expense | [1],[2] | 4,137 | 1,501 | 10,322 | 8,732 | ||
Incentive unit (income) expense | [1],[3] | (75) | 5,987 | 1,048 | [4] | 11,791 | [4] |
Equity compensation expense | [1],[5] | 1,105 | 273 | 3,316 | 406 | ||
Depreciation expense | [1] | 4,417 | 1,150 | 10,454 | 2,612 | ||
Amortization of intangible assets | [1] | 407 | 408 | 1,223 | [4] | 748 | [4] |
Other (income) expense | [1] | (347) | 0 | 492 | 0 | ||
Total operating expenses | [1] | 14,065 | 10,924 | 36,883 | 27,709 | ||
Operating income (loss) | [1] | 16,010 | (9,304) | 48,263 | (24,630) | ||
Other income | [1] | 2 | 0 | 11 | 0 | ||
Interest expense | [1],[6] | (814) | (3,146) | (2,070) | (11,748) | ||
Amortization of deferred finance costs | [1] | (144) | 0 | (432) | [4] | 0 | [4] |
Income (loss) before income taxes | [1] | 15,054 | (12,450) | 45,772 | (36,378) | ||
Income tax (expense) benefit | [1] | (1,794) | 2,567 | (5,796) | 9,985 | ||
Net loss from continuing operations | (9,883) | (26,393) | |||||
Discontinued operations, net of tax | 0 | 0 | |||||
Net income (loss) | [1] | 13,260 | (9,883) | 39,976 | [4] | (26,393) | [4],[7] |
Previously Reported | |||||||
Operating revenues: | |||||||
Affiliate | 15,578 | 68 | 44,745 | 237 | |||
Third-party | 4,564 | 1,552 | 11,294 | 2,842 | |||
Total operating revenues | 20,142 | 1,620 | 56,039 | 3,079 | |||
Operating expenses: | |||||||
Operation and maintenance expense | 1,727 | 1,495 | 3,985 | 2,863 | |||
General and administrative expense | 2,828 | 1,115 | 7,344 | 7,791 | |||
Incentive unit (income) expense | 0 | 5,878 | 0 | 10,526 | |||
Equity compensation expense | 961 | 260 | 2,960 | 378 | |||
Depreciation expense | 1,597 | 955 | 4,531 | 1,851 | |||
Amortization of intangible assets | 407 | 408 | 1,223 | 748 | |||
Other (income) expense | (347) | 492 | |||||
Total operating expenses | 7,173 | 10,111 | 20,535 | 24,157 | |||
Operating income (loss) | 12,969 | (8,491) | 35,504 | (21,078) | |||
Other income | 2 | 6 | |||||
Interest expense | (557) | (2,744) | (1,408) | (10,502) | |||
Amortization of deferred finance costs | (144) | (432) | |||||
Income (loss) before income taxes | 12,270 | (11,235) | 33,670 | (31,580) | |||
Income tax (expense) benefit | 0 | 2,119 | 0 | 8,531 | |||
Net loss from continuing operations | (9,116) | (23,049) | |||||
Discontinued operations, net of tax | (1,630) | (3,036) | |||||
Net income (loss) | 12,270 | (10,746) | 33,670 | (26,085) | |||
Water Assets | Water Assets | |||||||
Operating revenues: | |||||||
Affiliate | 8,369 | 0 | 27,544 | 0 | |||
Third-party | 1,564 | 0 | 1,563 | 0 | |||
Total operating revenues | 9,933 | 0 | 29,107 | 0 | |||
Operating expenses: | |||||||
Operation and maintenance expense | 2,694 | 110 | 6,043 | 557 | |||
General and administrative expense | 1,309 | 386 | 2,978 | 941 | |||
Incentive unit (income) expense | (75) | 109 | 1,048 | 1,265 | |||
Equity compensation expense | 144 | 13 | 356 | 28 | |||
Depreciation expense | 2,820 | 195 | 5,923 | 761 | |||
Amortization of intangible assets | 0 | 0 | 0 | 0 | |||
Other (income) expense | 0 | 0 | |||||
Total operating expenses | 6,892 | 813 | 16,348 | 3,552 | |||
Operating income (loss) | 3,041 | (813) | 12,759 | (3,552) | |||
Other income | 0 | 5 | |||||
Interest expense | (257) | (402) | (662) | (1,246) | |||
Amortization of deferred finance costs | 0 | 0 | |||||
Income (loss) before income taxes | 2,784 | (1,215) | 12,102 | (4,798) | |||
Income tax (expense) benefit | (1,794) | 448 | (5,796) | 1,454 | |||
Net loss from continuing operations | (767) | (3,344) | |||||
Discontinued operations, net of tax | 1,630 | 3,036 | |||||
Net income (loss) | $ 990 | $ 863 | $ 6,306 | $ (308) | |||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[2] | General and administrative expenses include charges from Rice Energy of $3.6 million and $1.1 million for the three months ended September 30, 2015 and 2014, respectively, and $8.8 million and $6.2 million for the nine months ended September 30, 2015 and 2014, respectively. | ||||||
[3] | Incentive unit expense was allocated from Rice Energy to the Partnership during the three and nine months ended September 30, 2014. In addition, incentive unit expense was allocated from Rice Energy to the Water Assets for the three and nine months ended September 30, 2014 and 2015. | ||||||
[4] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[5] | Equity compensation expense includes stock compensation expense allocated by Rice Energy of $0.1 million and $0.4 million for the three and nine months ended September 30, 2015, respectively, and stock compensation expense allocated by Rice Energy of $0.3 million and $0.4 million for the three and nine months ended September 30, 2014, respectively. | ||||||
[6] | Interest expense of $0.3 million and $0.7 million for the three and nine months ended September 30, 2015, respectively, and all interest expense for the three and nine months ended September 30, 2014 was allocated from Rice Energy. | ||||||
[7] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Acquisitions (Schedule of Com26
Acquisitions (Schedule of Combined Balance Sheets) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |||
Current assets: | |||||||
Cash | [2] | $ 23,882 | [1] | $ 26,834 | [1] | $ 1,197 | $ 148 |
Accounts receivable | [1] | 9,148 | 297 | ||||
Accounts receivable - affiliate | [1] | 430 | 2,049 | ||||
Deposits, prepaid expenses and other | [1] | 598 | 233 | ||||
Prepaid expenses and other | 32 | ||||||
Deposits | 201 | ||||||
Total current assets | [1] | 34,058 | 29,413 | ||||
Property and equipment, net | [1] | 545,648 | 323,871 | ||||
Deferred financing costs, net | [1] | 2,462 | 2,874 | ||||
Goodwill | [1] | 39,142 | 39,142 | ||||
Intangible assets, net | [1] | 46,568 | 47,791 | ||||
Total assets | [1] | 667,878 | 443,091 | ||||
Current liabilities: | |||||||
Accounts payable | [1] | 28,863 | 109 | ||||
Accrued capital expenditures | [1] | 35,115 | 7,502 | ||||
Payable to affiliate | 156 | ||||||
Other accrued liabilities | [1] | 1,542 | 1,577 | ||||
Total current liabilities | [1] | 65,520 | 9,344 | ||||
Long-term liabilities: | |||||||
Long-term debt | [1] | 72,000 | 0 | ||||
Deferred tax liability | [1] | 7,699 | 1,903 | ||||
Other long-term liabilities | [1] | 2,294 | 1,900 | ||||
Asset retirement obligations | 1,900 | ||||||
Total liabilities | [1] | 147,513 | 13,147 | ||||
Partners’ capital: | |||||||
Partners’ capital | 406,879 | 393,350 | |||||
Parent net equity | [1] | 113,486 | 36,594 | ||||
Total liabilities and partners’ capital | [1] | 667,878 | 443,091 | ||||
Previously Reported | |||||||
Current assets: | |||||||
Cash | 18,961 | 26,832 | |||||
Accounts receivable | 7,229 | 297 | |||||
Accounts receivable - affiliate | 4,592 | 2,049 | |||||
Deposits, prepaid expenses and other | 271 | ||||||
Prepaid expenses and other | 32 | ||||||
Deposits | 201 | ||||||
Total current assets | 31,053 | 29,411 | |||||
Property and equipment, net | 408,074 | 280,077 | |||||
Deferred financing costs, net | 2,462 | 2,874 | |||||
Goodwill | 39,142 | 39,142 | |||||
Intangible assets, net | 46,568 | 47,791 | |||||
Total assets | 527,299 | 399,295 | |||||
Current liabilities: | |||||||
Accounts payable | 25,278 | 109 | |||||
Accrued capital expenditures | 21,974 | 4,103 | |||||
Payable to affiliate | 156 | ||||||
Other accrued liabilities | 1,106 | 1,577 | |||||
Total current liabilities | 48,358 | 5,945 | |||||
Long-term liabilities: | |||||||
Long-term debt | 72,000 | ||||||
Deferred tax liability | 0 | 0 | |||||
Other long-term liabilities | 62 | ||||||
Asset retirement obligations | 0 | ||||||
Total liabilities | 120,420 | 5,945 | |||||
Partners’ capital: | |||||||
Partners’ capital | 406,879 | 393,350 | |||||
Parent net equity | 0 | 0 | |||||
Total liabilities and partners’ capital | 527,299 | 399,295 | |||||
Water Assets | Water Assets | |||||||
Current assets: | |||||||
Cash | 4,921 | 2 | |||||
Accounts receivable | 1,919 | 0 | |||||
Accounts receivable - affiliate | (4,162) | 0 | |||||
Deposits, prepaid expenses and other | 327 | ||||||
Prepaid expenses and other | 0 | ||||||
Deposits | 0 | ||||||
Total current assets | 3,005 | 2 | |||||
Property and equipment, net | 137,574 | 43,794 | |||||
Deferred financing costs, net | 0 | 0 | |||||
Goodwill | 0 | 0 | |||||
Intangible assets, net | 0 | 0 | |||||
Total assets | 140,579 | 43,796 | |||||
Current liabilities: | |||||||
Accounts payable | 3,585 | 0 | |||||
Accrued capital expenditures | 13,141 | 3,399 | |||||
Payable to affiliate | 0 | ||||||
Other accrued liabilities | 436 | 0 | |||||
Total current liabilities | 17,162 | 3,399 | |||||
Long-term liabilities: | |||||||
Long-term debt | 0 | ||||||
Deferred tax liability | 7,699 | 1,903 | |||||
Other long-term liabilities | 2,232 | ||||||
Asset retirement obligations | 1,900 | ||||||
Total liabilities | 27,093 | 7,202 | |||||
Partners’ capital: | |||||||
Partners’ capital | 0 | 0 | |||||
Parent net equity | 113,486 | 36,594 | |||||
Total liabilities and partners’ capital | $ 140,579 | $ 43,796 | |||||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | Dec. 22, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) |
Debt Instrument [Line Items] | |||
Interest paid in cash | $ 600,000 | $ 1,000,000 | |
Revolving Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee based on undrawn commitment (basis points) | 0.35% | ||
Revolving Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee based on undrawn commitment (basis points) | 0.50% | ||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 1.75% | ||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 2.75% | ||
Revolving Credit Facility | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 0.50% | ||
Revolving Credit Facility | One Month Eurodollar | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 1.00% | ||
Revolving Credit Facility | One Month Eurodollar, Additional Margin | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 0.75% | ||
Revolving Credit Facility | One Month Eurodollar, Additional Margin | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin (basis points) | 1.75% | ||
Revolving Credit Facility | Wells Fargo Bank, N.A. | |||
Debt Instrument [Line Items] | |||
Maximum credit amount | $ 450,000,000 | ||
Additional commitments available under accordion feature | $ 200,000,000 | ||
Borrowings outstanding | 72,000,000 | 72,000,000 | |
Consolidated current interest expense ratio | 2.50 | ||
Consolidated total leverage ratio | 4.75 | ||
Consolidated total leverage ratio after electing to issue senior unsecured notes | 5.25 | ||
Consolidated senior secured leverage ratio | 3.50 | ||
Revolving Credit Facility | Wells Fargo Bank, N.A. | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum credit amount | $ 50,000,000 | ||
Borrowings outstanding | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Compression equipment - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other Commitments [Line Items] | ||||
Future payments for equipment | $ 5.7 | $ 5.7 | ||
2,015 | 0.4 | 0.4 | ||
2,016 | 1.6 | 1.6 | ||
2,017 | 0.9 | 0.9 | ||
2,018 | 0.9 | 0.9 | ||
2,019 | 0.9 | 0.9 | ||
Thereafter | 1 | 1 | ||
Operation and Maintenance Expense | ||||
Other Commitments [Line Items] | ||||
Rent expense | $ 0.4 | $ 0.2 | $ 1.3 | $ 0.4 |
Partners' Capital (Details)
Partners' Capital (Details) - USD ($) $ in Millions | Dec. 22, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Common | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common and Subordinated units outstanding | [1] | 28,753,623 | 28,753,623 | |
Subordinated | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common and Subordinated units outstanding | [1] | 28,753,623 | 28,753,623 | |
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of common units underwritten in IPO | 28,750,000 | |||
Cash proceeds received net of issuance costs | $ 444.1 | |||
Proceeds distributed to Rice Energy | 414.4 | |||
Proceeds retained to pre-fund certain maintenance capital expenditures | 25 | |||
Proceeds retained to pay expenses of IPO | 2 | |||
Proceeds used to pay origination fees associated with the credit agreement | $ 2.7 | |||
Rice Energy | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Equity interest retained in partnership (percentage) | 50.00% | |||
Rice Energy | IPO | Subsidiary of Common Parent | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Percentage of interest of Rice Poseidon contributed to Partnership | 100.00% | |||
Rice Energy | IPO | Common | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common and Subordinated units outstanding | 3,623 | |||
Rice Energy | IPO | Subordinated | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common and Subordinated units outstanding | 28,753,623 | |||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Phantom Unit Awards (Details)
Phantom Unit Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity compensation expense | [1],[2] | $ 1,105 | $ 273 | $ 3,316 | $ 406 |
Rice Midstream Partners LP 2014 LTIP | Phantom unit awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity compensation expense | 1,000 | 3,000 | |||
Unrecorded compensation expense | $ 3,800 | $ 3,800 | |||
[1] | Equity compensation expense includes stock compensation expense allocated by Rice Energy of $0.1 million and $0.4 million for the three and nine months ended September 30, 2015, respectively, and stock compensation expense allocated by Rice Energy of $0.3 million and $0.4 million for the three and nine months ended September 30, 2014, respectively. | ||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Net Income per Limited Partne31
Net Income per Limited Partner Unit and Cash Distributions (Schedule of Calculation of Net Income per Limited Partner Unit) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | [2],[3] | |||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||
Limited partner net income | [1] | $ 13,260 | $ (9,883) | $ 39,976 | [2] | $ (26,393) | |
Less: Pre-acquisition net income allocated to general partner | [1],[4] | 990 | 6,306 | [3] | |||
Limited partner net income | [1] | $ 12,270 | $ 33,670 | [3] | |||
Weighted-average limited partner units outstanding - basic: | |||||||
Weighted-average limited partner units outstanding - basic: | 57,507,246 | 57,507,246 | |||||
Weighted-average limited partner units outstanding - diluted: | |||||||
Weighted-average limited partner units outstanding - diluted: | 57,652,698 | 57,597,825 | |||||
Net income per limited partner unit - basic: | |||||||
Net income per limited partner unit - basic: | $ 0.21 | $ 0.59 | |||||
Net income per limited partner unit - diluted: | |||||||
Net income per limited partner unit - diluted: | 0.21 | 0.58 | |||||
Unitholders | |||||||
Cash distributions declared per limited partner unit | [5],[6] | $ 0.1935 | $ 0.5715 | ||||
Phantom unit | |||||||
Unitholders | |||||||
Shares considered anti-dilutive | 145,452 | 90,579 | |||||
Common | |||||||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||
Limited partner net income | $ 6,135 | $ 16,835 | |||||
Weighted-average limited partner units outstanding - basic: | |||||||
Weighted-average limited partner units outstanding - basic: | 28,753,623 | 28,753,623 | |||||
Weighted-average limited partner units outstanding - diluted: | |||||||
Weighted-average limited partner units outstanding - diluted: | [5] | 28,899,075 | 28,844,202 | ||||
Net income per limited partner unit - basic: | |||||||
Net income per limited partner unit - basic: | [1] | $ 0.21 | $ 0.59 | ||||
Net income per limited partner unit - diluted: | |||||||
Net income per limited partner unit - diluted: | [1] | 0.21 | 0.58 | ||||
Unitholders | |||||||
Cash distributions declared per limited partner unit | [1],[5],[6],[7] | $ 0.1935 | $ 0.5715 | ||||
Subordinated | |||||||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||
Limited partner net income | $ 6,135 | $ 16,835 | |||||
Weighted-average limited partner units outstanding - basic: | |||||||
Weighted-average limited partner units outstanding - basic: | 28,753,623 | 28,753,623 | |||||
Weighted-average limited partner units outstanding - diluted: | |||||||
Weighted-average limited partner units outstanding - diluted: | 28,753,623 | 28,753,623 | |||||
Net income per limited partner unit - basic: | |||||||
Net income per limited partner unit - basic: | $ 0.21 | $ 0.59 | |||||
Net income per limited partner unit - diluted: | |||||||
Net income per limited partner unit - diluted: | [1],[8] | 0.21 | 0.59 | ||||
Unitholders | |||||||
Cash distributions declared per limited partner unit | [1],[5],[6],[7] | $ 0.1935 | $ 0.5715 | ||||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[3] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[4] | Pre-acquisition net loss allocated to the general partner relates to operations of the Water Assets for periods prior to their acquisition on November 4, 2015. | ||||||
[5] | Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015, respectively, related to phantom units. | ||||||
[6] | See Note 12 for further discussion of cash distributions declared for the period presented. | ||||||
[7] | Net income per limited partner unit is presented only for periods subsequent to the Partnership’s initial public offering and does not include results attributable to the Water Assets as these results are not attributable to limited partners of the Partnership. | ||||||
[8] | Diluted net income per limited partner unit is presented as if all earnings for the period had been distributed, and while it appears that more income is allocated to the subordinated unit holders than the common unitholders based on the dilution of the common units from the LTIP for the three and nine months ended September 30, 2015, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. |
Net Income per Limited Partne32
Net Income per Limited Partner Unit and Cash Distributions (Incentive Distribution Rights) (Details) - $ / shares | Oct. 23, 2015 | Aug. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
Period after the end of each quarter in which the partnership intends to distribute the minimum quarterly distribution | 60 days | ||||
Minimum Quarterly Distribution, Total Quarterly Distribution Per Unit | $ 0.1875 | ||||
Unitholders | |||||
Minimal Quarterly Distribution, Marginal Percentage Interest in Distributions, Unitholders | 100.00% | ||||
First Target Distribution, Marginal Percentage Interest in Distributions, Unitholders | 100.00% | ||||
Second Target Distribution, Marginal Percentage Interest in Distributions, Unitholders | 85.00% | ||||
Third Target Distribution, Marginal Percentage Interest in Distributions, Unitholders | 75.00% | ||||
Thereafter, Marginal Percentage Interest in Distributions, Unitholders | 50.00% | ||||
Incentive Distribution Rights Holders | |||||
Minimal Quarterly Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders | 0.00% | ||||
First Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders | 0.00% | ||||
Second Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders | 15.00% | ||||
Third Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders | 25.00% | ||||
Thereafter, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders | 50.00% | ||||
Cash distribution paid per common and subordinated unit | $ 0.1905 | ||||
Cash distributions declared per limited partner unit | [1],[2] | $ 0.1935 | $ 0.5715 | ||
Subsequent Event | |||||
Incentive Distribution Rights Holders | |||||
Cash distributions declared per limited partner unit | $ 0.1935 | ||||
Minimum | |||||
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
First Target Distribution, Total Quarterly Distribution Per Unit | 0.1875 | ||||
Second Target Distribution, Total Quarterly Distribution Per Unit | 0.2156 | ||||
Third Target Distribution, Total Quarterly Distribution Per Unit | 0.2344 | ||||
Thereafter, Total Quarterly Distribution Per Unit | 0.2813 | ||||
Maximum | |||||
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||
First Target Distribution, Total Quarterly Distribution Per Unit | 0.2156 | ||||
Second Target Distribution, Total Quarterly Distribution Per Unit | 0.2344 | ||||
Third Target Distribution, Total Quarterly Distribution Per Unit | $ 0.2813 | ||||
[1] | Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015, respectively, related to phantom units. | ||||
[2] | See Note 12 for further discussion of cash distributions declared for the period presented. |
Financial Information by Busi33
Financial Information by Business Segment (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015business_segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Financial Information by Busi34
Financial Information by Business Segment (Schedule of Operating Results and Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
Segment Reporting Information [Line Items] | |||||||
Affiliate | [1] | $ 23,947 | $ 68 | $ 72,289 | $ 237 | ||
Third-party | [1] | 6,128 | 1,552 | 12,857 | 2,842 | ||
Total operating revenues | [1] | 30,075 | 1,620 | 85,146 | 3,079 | ||
Operation and maintenance expense | [1] | 4,421 | 1,605 | 10,028 | 3,420 | ||
General and administrative expense | [1],[2] | 4,137 | 1,501 | 10,322 | 8,732 | ||
Incentive unit (income) expense | [1],[3] | (75) | 5,987 | 1,048 | [4] | 11,791 | [4] |
Equity compensation expense | [1],[5] | 1,105 | 273 | 3,316 | 406 | ||
Depreciation expense | [1] | 4,417 | 1,150 | 10,454 | 2,612 | ||
Amortization of intangible assets | [1] | 407 | 408 | 1,223 | [4] | 748 | [4] |
Other (income) expense | [1] | (347) | 0 | 492 | 0 | ||
Total operating expenses | [1] | 14,065 | 10,924 | 36,883 | 27,709 | ||
Operating income (loss) | [1] | 16,010 | (9,304) | 48,263 | (24,630) | ||
Capital expenditures for segment assets | 68,303 | 28,791 | 178,104 | 69,579 | |||
Gathering and Compression | |||||||
Segment Reporting Information [Line Items] | |||||||
Affiliate | 15,578 | 68 | 44,745 | 237 | |||
Third-party | 4,564 | 1,552 | 11,294 | 2,842 | |||
Total operating revenues | 20,142 | 1,620 | 56,039 | 3,079 | |||
Operation and maintenance expense | 1,727 | 1,495 | 3,985 | 2,863 | |||
General and administrative expense | 2,828 | 1,115 | 7,344 | 7,791 | |||
Incentive unit (income) expense | 0 | 5,878 | 0 | 10,526 | |||
Equity compensation expense | 961 | 260 | 2,960 | 378 | |||
Depreciation expense | 1,597 | 955 | 4,531 | 1,851 | |||
Amortization of intangible assets | 407 | 408 | 1,223 | 748 | |||
Other (income) expense | (347) | 492 | |||||
Total operating expenses | 7,173 | 10,111 | 20,535 | 24,157 | |||
Operating income (loss) | 12,969 | (8,491) | 35,504 | (21,078) | |||
Capital expenditures for segment assets | 44,544 | 23,005 | 91,451 | 62,944 | |||
Water Services | |||||||
Segment Reporting Information [Line Items] | |||||||
Affiliate | 8,369 | 0 | 27,544 | 0 | |||
Third-party | 1,564 | 0 | 1,563 | 0 | |||
Total operating revenues | 9,933 | 0 | 29,107 | 0 | |||
Operation and maintenance expense | 2,694 | 110 | 6,043 | 557 | |||
General and administrative expense | 1,309 | 386 | 2,978 | 941 | |||
Incentive unit (income) expense | (75) | 109 | 1,048 | 1,265 | |||
Equity compensation expense | 144 | 13 | 356 | 28 | |||
Depreciation expense | 2,820 | 195 | 5,923 | 761 | |||
Amortization of intangible assets | 0 | 0 | 0 | 0 | |||
Other (income) expense | 0 | 0 | |||||
Total operating expenses | 6,892 | 813 | 16,348 | 3,552 | |||
Operating income (loss) | 3,041 | (813) | 12,759 | (3,552) | |||
Capital expenditures for segment assets | $ 23,759 | $ 5,786 | $ 86,653 | $ 6,635 | |||
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[2] | General and administrative expenses include charges from Rice Energy of $3.6 million and $1.1 million for the three months ended September 30, 2015 and 2014, respectively, and $8.8 million and $6.2 million for the nine months ended September 30, 2015 and 2014, respectively. | ||||||
[3] | Incentive unit expense was allocated from Rice Energy to the Partnership during the three and nine months ended September 30, 2014. In addition, incentive unit expense was allocated from Rice Energy to the Water Assets for the three and nine months ended September 30, 2014 and 2015. | ||||||
[4] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||
[5] | Equity compensation expense includes stock compensation expense allocated by Rice Energy of $0.1 million and $0.4 million for the three and nine months ended September 30, 2015, respectively, and stock compensation expense allocated by Rice Energy of $0.3 million and $0.4 million for the three and nine months ended September 30, 2014, respectively. |
Financial Information by Busi35
Financial Information by Business Segment (Schedule of Assets of Reportable Segments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Segment assets | [1] | $ 667,878 | $ 443,091 |
Gathering and Compression | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Segment assets | 527,299 | 399,295 | |
Water Services | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Segment assets | $ 140,579 | $ 43,796 | |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Financial Information by Busi36
Financial Information by Business Segment (Schedule of Goodwill of Reportable Segments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Goodwill | [1] | $ 39,142 | $ 39,142 |
Gathering and Compression | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Goodwill | 39,142 | 39,142 | |
Water Services | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Goodwill | $ 0 | $ 0 | |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Income Tax Disclosure [Abstract] | |||||
Income tax (expense) benefit | [1] | $ (1,794) | $ 2,567 | $ (5,796) | $ 9,985 |
Effective tax rate percentage | (11.91%) | (20.62%) | (12.66%) | (27.45%) | |
[1] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Related Party Transactions (Det
Related Party Transactions (Details) a in Thousands | Nov. 04, 2015 | Dec. 22, 2014a$ / MMBTU | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |||
Related Party Transaction [Line Items] | |||||||||
Equity compensation expense | [1],[2] | $ 1,105,000 | $ 273,000 | $ 3,316,000 | $ 406,000 | ||||
Incentive unit (income) expense | [2],[3] | (75,000) | 5,987,000 | 1,048,000 | [4] | 11,791,000 | [4] | ||
Subsidiary of Common Parent | Water Assets | Subsequent Event | |||||||||
Related Party Transaction [Line Items] | |||||||||
Margin percentage | 2.00% | ||||||||
Fixed-Fee Gas Gathering and Compression Agreement | Gas Gathering and Compression Agreement | Subsidiary of Common Parent | |||||||||
Related Party Transaction [Line Items] | |||||||||
Duration of fixed fee gas gathering and compression agreement | 15 years | ||||||||
Gas Gathering and Compression Agreement, Gathering Fee | Gas Gathering and Compression Agreement | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gathering fee (per Dth) | $ / MMBTU | 0.30 | ||||||||
Gas Gathering and Compression Agreement, Compression Fee | Gas Gathering and Compression Agreement | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gathering fee (per Dth) | $ / MMBTU | 0.07 | ||||||||
Gross Acres subject to Pre-existing Third Party Dedication | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gross acres covered | a | 19 | ||||||||
Stock Compensation Awards Granted by Related Party | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity compensation expense | 300,000 | 400,000 | |||||||
Stock Compensation Awards Granted by Related Party | Affiliated Entity | Water Assets | |||||||||
Related Party Transaction [Line Items] | |||||||||
Equity compensation expense | 100,000 | 13,100 | 400,000 | 27,600 | |||||
Incentive Units Granted Pursuant to Limited Liability Company Agreement of Rice Energy Appalachia LLC | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Incentive unit (income) expense | 5,878,000 | 10,526,000 | |||||||
Incentive Units Granted Pursuant to Limited Liability Company Agreement of Rice Energy Appalachia LLC | Affiliated Entity | Water Assets | |||||||||
Related Party Transaction [Line Items] | |||||||||
Incentive unit (income) expense | $ (75,000) | $ 109,000 | $ 1,048,000 | $ 1,265,000 | |||||
[1] | Equity compensation expense includes stock compensation expense allocated by Rice Energy of $0.1 million and $0.4 million for the three and nine months ended September 30, 2015, respectively, and stock compensation expense allocated by Rice Energy of $0.3 million and $0.4 million for the three and nine months ended September 30, 2014, respectively. | ||||||||
[2] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. | ||||||||
[3] | Incentive unit expense was allocated from Rice Energy to the Partnership during the three and nine months ended September 30, 2014. In addition, incentive unit expense was allocated from Rice Energy to the Water Assets for the three and nine months ended September 30, 2014 and 2015. | ||||||||
[4] | Financial statements for the periods presented have been retrospectively recast to reflect the acquisition of the Water Assets. See Note 2 for additional information. |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) $ / shares in Units, gal in Millions, $ in Millions | Nov. 10, 2015USD ($)shares | Nov. 04, 2015USD ($)gal | Oct. 23, 2015$ / shares | Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Nov. 13, 2015USD ($) | |
Subsequent Event [Line Items] | |||||||
Cash distributions declared per limited partner unit | $ / shares | [1],[2] | $ 0.1935 | $ 0.5715 | ||||
Revolving Credit Facility | Wells Fargo Bank, N.A. | |||||||
Subsequent Event [Line Items] | |||||||
Borrowings outstanding | $ 72 | $ 72 | |||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Cash distributions declared per limited partner unit | $ / shares | $ 0.1935 | ||||||
Subsequent Event | Revolving Credit Facility | Wells Fargo Bank, N.A. | |||||||
Subsequent Event [Line Items] | |||||||
Borrowings outstanding | $ 122 | ||||||
Subsequent Event | Private Placement | |||||||
Subsequent Event [Line Items] | |||||||
Common units sold in private placement | shares | 13,409,961 | ||||||
Net proceeds from sale of common units | $ 175 | ||||||
Subsequent Event | Subsidiary of Common Parent | Water Assets | |||||||
Subsequent Event [Line Items] | |||||||
Aggregate purchase price | $ 200 | ||||||
Increase in conveyed systems' capacities | gal | 5 | ||||||
Amount of earn out provision | $ 25 | ||||||
Margin percentage | 2.00% | ||||||
[1] | Diluted weighted-average limited partner common units includes the effect of 145,452 and 90,579 units for the three and nine months ended September 30, 2015, respectively, related to phantom units. | ||||||
[2] | See Note 12 for further discussion of cash distributions declared for the period presented. |