Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 01, 2016 | |
Document and Entity Information [Line Items] | ||
Entity Registrant Name | Rice Midstream Partners LP | |
Trading Symbol | RMP | |
Entity Central Index Key | 1,620,928 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Units Outstanding | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 73,149,233 | |
Entity Subordinated Units Outstanding | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,753,623 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 7,634 | $ 7,597 |
Accounts receivable | 8,831 | 9,926 |
Accounts receivable - affiliate | 10,636 | 6,438 |
Prepaid expenses, deposits and other | 104 | 192 |
Total current assets | 27,205 | 24,153 |
Property and equipment, net | 644,625 | 578,026 |
Deferred financing costs, net | 2,002 | 2,310 |
Goodwill | 39,142 | 39,142 |
Intangible assets, net | 44,937 | 46,159 |
Total assets | 757,911 | 689,790 |
Current liabilities: | ||
Accounts payable | 2,587 | 13,484 |
Accrued capital expenditures | 12,270 | 15,277 |
Other accrued liabilities | 6,396 | 3,067 |
Total current liabilities | 21,253 | 31,828 |
Long-term liabilities: | ||
Long-term debt | 0 | 143,000 |
Other long-term liabilities | 3,283 | 3,128 |
Total liabilities | 24,536 | 177,956 |
Partners’ capital: | ||
Total partners’ capital | 733,375 | 511,834 |
Total liabilities and partners’ capital | 757,911 | 689,790 |
Common | ||
Partners’ capital: | ||
Common and subordinated units | 830,135 | 624,557 |
Subordinated | ||
Partners’ capital: | ||
Common and subordinated units | $ (96,760) | $ (112,723) |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
Common | ||
Common and Subordinated units issued | 52,432,851 | 42,163,749 |
Common and Subordinated units outstanding | 52,432,851 | 42,163,749 |
Subordinated | ||
Common and Subordinated units issued | 28,753,623 | 28,753,623 |
Common and Subordinated units outstanding | 28,753,623 | 28,753,623 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Operating revenues: | |||||
Affiliate | $ 28,260 | $ 23,947 | $ 105,267 | $ 72,289 | |
Third-party | 12,807 | 6,128 | 36,890 | 12,857 | |
Total operating revenues | 41,067 | 30,075 | 142,157 | 85,146 | |
Operating expenses: | |||||
Operation and maintenance expense | 4,596 | 4,421 | 17,348 | 10,028 | |
General and administrative expense | [1],[2] | 4,945 | 5,242 | 15,408 | 13,638 |
Incentive unit (income) expense | [3] | 0 | (75) | 0 | 1,048 |
Depreciation expense | 5,489 | 4,417 | 17,714 | 10,454 | |
Acquisition costs | 0 | 0 | 73 | 0 | |
Amortization of intangible assets | 411 | 407 | 1,222 | 1,223 | |
Other expense (income) | 90 | (347) | 239 | 492 | |
Total operating expenses | 15,531 | 14,065 | 52,004 | 36,883 | |
Operating income | 25,536 | 16,010 | 90,153 | 48,263 | |
Other income | 0 | 2 | 0 | 11 | |
Interest expense | [4] | (402) | (814) | (2,369) | (2,070) |
Amortization of deferred finance costs | (145) | (144) | (433) | (432) | |
Income before income taxes | 24,989 | 15,054 | 87,351 | 45,772 | |
Income tax expense | 0 | (1,794) | 0 | (5,796) | |
Net income | 24,989 | 13,260 | 87,351 | 39,976 | |
Calculation of limited partner interest in net income: | |||||
Less: Pre-acquisition net income allocated to general partner | [5] | 0 | 990 | 0 | 6,306 |
Less: General partner interest in net income attributable to incentive distribution rights | 427 | 0 | 540 | 0 | |
Limited partner net income | $ 24,562 | $ 12,270 | $ 86,811 | $ 33,670 | |
Net income per limited partner unit: | |||||
Net income per limited partner unit - basic (in dollars per unit) | $ 0.30 | $ 0.21 | $ 1.16 | $ 0.59 | |
Net income per limited partner unit - diluted (in dollars per unit) | 0.30 | 0.21 | 1.15 | 0.58 | |
Cash distributions declared per limited partner unit: | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [6] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
Rice Energy | |||||
Operating expenses: | |||||
Interest expense | $ (300) | $ (700) | |||
Cash distributions declared per limited partner unit: | |||||
General and administrative expenses from Rice Energy | $ 4,400 | 3,600 | $ 12,700 | 8,800 | |
General and administrative expense | Phantom unit | |||||
Cash distributions declared per limited partner unit: | |||||
Equity compensation expense | 600 | 1,100 | 2,700 | 3,300 | |
Common | |||||
Calculation of limited partner interest in net income: | |||||
Limited partner net income | $ 15,862 | $ 6,135 | $ 53,199 | $ 16,835 | |
Net income per limited partner unit: | |||||
Net income per limited partner unit - basic (in dollars per unit) | [7] | $ 0.30 | $ 0.21 | $ 1.15 | $ 0.59 |
Net income per limited partner unit - diluted (in dollars per unit) | [7] | 0.30 | 0.21 | 1.14 | 0.58 |
Cash distributions declared per limited partner unit: | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [6] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
Subordinated | |||||
Calculation of limited partner interest in net income: | |||||
Limited partner net income | $ 8,700 | $ 6,135 | $ 33,612 | $ 16,835 | |
Net income per limited partner unit: | |||||
Net income per limited partner unit - basic (in dollars per unit) | $ 0.30 | $ 0.21 | $ 1.17 | $ 0.59 | |
Net income per limited partner unit - diluted (in dollars per unit) | [8] | 0.30 | 0.21 | 1.17 | 0.59 |
Subordinated units (basic and diluted) (in dollars per unit) | [7] | 0.30 | 0.21 | 1.17 | 0.59 |
Cash distributions declared per limited partner unit: | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [6] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
[1] | Equity-based compensation expense related to phantom unit awards of $0.6 million and $2.7 million is included in general and administrative expense for the three and nine months ended September 30, 2016, respectively. Equity-based compensation expense related to phantom unit awards of $1.1 million and $3.3 million is included in general and administrative expense for the three and nine months ended September 30, 2015, respectively. | ||||
[2] | General and administrative expense includes charges from Rice Energy of $4.4 million and $3.6 million for the three months ended September 30, 2016 and 2015, respectively, and $12.7 million and $8.8 million for the nine months ended September 30, 2016 and 2015, respectively. | ||||
[3] | Incentive unit expense for the three and nine months ended September 30, 2015 was allocated from Rice Energy. | ||||
[4] | Interest expense includes charges from Rice Energy of $0.3 million and $0.7 million for the three and nine months ended September 30, 2015, respectively. | ||||
[5] | Pre-acquisition net income allocated to the general partner relates to operations of the Water Assets for the period prior to their acquisition. | ||||
[6] | See below for further discussion of cash distributions declared for the period presented. | ||||
[7] | Net income per limited partner unit does not include results attributable to PA Water and OH Water (collectively, the “Water Assets”) prior to their acquisition as these results are not attributable to limited partners of the Partnership. | ||||
[8] | Diluted income per limited partner unit is presented as if all earnings for the period had been distributed, and while it appears that more income is allocated to the subordinated unitholders than the common unitholders based on the dilution of the common units from the LTIP for the nine months ended September 30, 2016, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Cash flows from operating activities: | |||
Net income | $ 87,351 | $ 39,976 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation expense | 17,714 | 10,454 | |
Amortization of intangibles | 1,222 | 1,223 | |
Amortization of deferred financing costs | 433 | 432 | |
Incentive unit expense | [1] | 0 | 1,048 |
Equity compensation expense | 2,672 | 3,316 | |
Deferred income tax benefit | 0 | 5,796 | |
Changes in operating assets and liabilities: | |||
Increase in accounts receivable and receivable from affiliate | (3,102) | (8,852) | |
Increase in prepaid expenses and other assets | (5) | (407) | |
Increase in accounts payable and payable to affiliate | 26 | 3,764 | |
Increase in accrued liabilities and other | 3,193 | 280 | |
Net cash provided by operating activities | 109,504 | 57,030 | |
Cash flows from investing activities: | |||
Capital expenditures | (97,679) | (178,104) | |
Net cash used in investing activities | (97,679) | (178,104) | |
Cash flows from financing activities: | |||
Proceeds from borrowings | 43,000 | 72,000 | |
Repayments of borrowings | (186,000) | 0 | |
Costs related to IPO | 0 | (129) | |
Additions to deferred financing costs | (206) | (21) | |
Contributions from parent | 39 | 69,182 | |
Employee tax withholding for settlement of common unit award vestings | (1,280) | 0 | |
Distributions to related parties | (18,228) | (11,456) | |
Distributions to public unitholders | (28,855) | (11,454) | |
Net cash (used in) provided by financing activities | (11,788) | 118,122 | |
Net increase (decrease) in cash | 37 | (2,952) | |
Cash at the beginning of the year | 7,597 | 26,834 | |
Cash at the end of the period | 7,634 | 23,882 | |
At the Market Common Unit Offering Program | |||
Cash flows from financing activities: | |||
Proceeds from ATM program and Proceeds from June 2016 equity offering, net | 15,713 | 0 | |
Common units issued in June equity 2016 | |||
Cash flows from financing activities: | |||
Proceeds from ATM program and Proceeds from June 2016 equity offering, net | $ 164,029 | $ 0 | |
[1] | Incentive unit expense for the three and nine months ended September 30, 2015 was allocated from Rice Energy. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Partners' Capital (Unaudited) - USD ($) $ in Thousands | Total | Common units issued in June equity 2016 | At the Market Common Unit Offering Program | Common | Limited PartnersCommon | Limited PartnersCommonCommon units issued in June equity 2016 | Limited PartnersCommonAt the Market Common Unit Offering Program | Limited PartnersSubordinated & Incentive Distribution Right Holders | Limited PartnersSubordinated & Incentive Distribution Right HoldersCommon units issued in June equity 2016 | Limited PartnersSubordinated & Incentive Distribution Right HoldersAt the Market Common Unit Offering Program | Parent Net Equity | ||
Balance at Dec. 31, 2014 | $ 429,944 | $ 442,451 | $ (49,101) | $ 36,594 | |||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Contributions from parent | 69,182 | 69,182 | |||||||||||
Incentive unit expense | 1,048 | 1,048 | |||||||||||
Equity compensation expense | 3,254 | 2,898 | 356 | ||||||||||
Offering costs related to the IPO | (129) | (129) | 0 | ||||||||||
Distributions to unitholders | (22,910) | (11,455) | (11,455) | ||||||||||
Pre-acquisition net income attributable to the general partner | 6,306 | [1] | 6,306 | ||||||||||
Net income | 33,670 | $ 16,835 | 16,835 | 16,835 | |||||||||
Net income | 39,976 | ||||||||||||
Balance at Sep. 30, 2015 | 520,365 | 450,600 | (43,721) | 113,486 | |||||||||
Balance at Dec. 31, 2015 | 511,834 | 624,557 | (112,723) | 0 | |||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Contributions from parent | 39 | 39 | |||||||||||
Equity compensation expense | 1,492 | 1,492 | 0 | ||||||||||
Distributions to unitholders | (47,083) | (28,855) | (18,228) | ||||||||||
Common units issued, net of offering costs | $ 164,029 | $ 15,713 | $ 164,029 | $ 15,713 | $ 0 | $ 0 | |||||||
Pre-acquisition net income attributable to the general partner | [1] | 0 | |||||||||||
Net income | 86,811 | $ 53,199 | |||||||||||
Net income | 87,351 | 53,199 | 34,152 | ||||||||||
Balance at Sep. 30, 2016 | $ 733,375 | $ 830,135 | $ (96,760) | $ 0 | |||||||||
[1] | Pre-acquisition net income allocated to the general partner relates to operations of the Water Assets for the period prior to their acquisition. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Rice Midstream Partners LP (the “Partnership”) is a Delaware limited partnership formed by Rice Energy Inc. (“Rice Energy”) in August 2014. References in these unaudited condensed consolidated financial statements to Rice Energy refer collectively to “Rice Energy” and its consolidated subsidiaries, other than the Partnership and its consolidated subsidiaries. The accompanying unaudited condensed consolidated 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 consolidated 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, 2016 and December 31, 2015 and its condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015 and of cash flows for the nine months ended September 30, 2016 and 2015 . On February 17, 2016, Rice Energy, Rice Midstream Holdings LLC, a Delaware limited liability company (“Rice Midstream Holdings”) and subsidiary of Rice Energy, and Rice Midstream GP Holdings LP (“GP Holdings”), entered into a securities purchase agreement with EIG Energy Fund XVI, L.P., EIG Energy Fund XVI-E, L.P., and EIG Holdings (RICE) Partners, LP (collectively, the “Purchasers”) pursuant to which, among other things, GP Holdings agreed to sell common units representing an 8.25% limited partner interest in GP Holdings to the Purchasers (the “Midstream Holdings Investment”). The transaction closed on February 22, 2016 and had no direct impact on the Partnership’s condensed consolidated financial statements. Prior to the closing of the transaction, Rice Midstream Holdings assigned all of its equity interests in the Partnership, consisting of 3,623 common units, 28,753,623 subordinated units and all of its incentive distribution rights in the Partnership, to GP Holdings. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On December 22, 2014 , Rice Midstream OpCo LLC (“Rice Midstream OpCo”) e ntered into a revolving credit agreement (as amended, the “revolving credit facility”) with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of lenders. As of September 30, 2016, the revolving credit facility had 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, 2016 , Rice Midstream OpCo had no borrowings outstanding and no letters of credit under this facility. The average daily outstanding balance of the credit facility was approximately $96.5 million and interest was incurred on the facility at a weighted average interest rate of 3.3% during the nine months ended September 30, 2016 . The revolving credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions, to repurchase units and for general partnership purposes. The Partnership is the guarantor of the obligations under the revolving credit facility, which matures on December 22, 2019 . In connection with the completion of the Partnership’s acquisition from Rice Energy of the entities owning the midstream assets associated with Rice Energy’s acquisition of Vantage Energy, LLC and Vantage Energy II, LLC (collectively, “Vantage”) and their subsidiaries (the “Vantage Acquisition”) (the “Vantage Midstream Asset Acquisition”), on October 19, 2016, Rice Midstream OpCo entered into a second amendment (the “Second Amendment”) to its credit agreement to, among other things, (i) permit the completion of the Vantage Midstream Asset Acquisition, (ii) increase the Partnership’s ability to borrow under the facility from $450.0 million ( with an additional $200.0 million of commitments available under an accordion feature) to $850.0 million and (iii) adjust the interest rate payable on amounts borrowed thereunder (as described below). The Partnership completed the Vantage Midstream Asset Acquisition on October 19, 2016 . See Note 11 for additional information. 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. Rice Midstream OpCo may elect to borrow in Eurodollars or at the base rate. Following the effectiveness of the Second Amendment, Eurodollar loans bear interest at a rate per annum equal to the applicable LIBOR Rate plus an applicable margin ranging from 200 to 300 basis points, depending on the leverage ratio then in effect, and 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 100 to 200 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, 2016 and represents a Level 2 measurement. Following the effectiveness of the Second Amendment, Rice Midstream OpCo also pays a commitment fee based on the undrawn commitment amount ranging from 37.5 to 50 basis points. The Partnership’s revolving credit facility also contains certain financial covenants and customary events of default. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the revolving credit facility to be immediately due and payable. The Partnership was in compliance with its covenants and ratios effective as of September 30, 2016 . Interest paid in cash was approximately $0.4 million and $2.7 million for the three and nine months ended September 30, 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time the Partnership is party to various legal and/or regulatory proceedings arising in the ordinary course of business. While the ultimate outcome and impact to the Partnership cannot be predicted with certainty, the Partnership believes that all such matters are without merit and involve amounts which, if resolved unfavorably, either individually or in the aggregate, will not have a material adverse effect on its financial condition, results of operations or cash flows. When it is determined that a loss is probable of occurring and is reasonably estimable, the Partnership accrues an undiscounted liability for such contingencies based on its best estimate using information available at the time. The Partnership discloses contingencies where an adverse outcome may be material, or in the judgment of management, the matter should otherwise be disclosed. 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, 2016 was $0.4 million and $1.2 million , respectively, and for the three and nine months ended September 30, 2015 was $0.4 million and $1.3 million , respectively. Future payments for this equipment as of September 30, 2016 totaled $4.2 million (remainder of 2016: $0.7 million ; 2017: $0.9 million ; 2018: $0.9 million ; 2019: $0.8 million ; 2020: $0.3 million and thereafter: $0.6 million ). |
Partners' Capital
Partners' Capital | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Partners' Capital | Partners’ Capital On June 13, 2016, the Partnership completed an underwritten public offering of an aggregate of 9,200,000 common units representing limited partner interests in the Partnership at a price to the public of $18.50 per unit, which included 1,200,000 common units sold pursuant to the exercise of the underwriters’ option to purchase additional units. After deducting underwriting discounts and commissions of approximately $6.0 million and transaction costs, the Partnership received net proceeds of approximately $164.1 million . The Partnership used a portion of the net proceeds to repay outstanding debt and intends to use the remainder for general partnership purposes, including acquisitions and capital expenditures. During the second quarter of 2016, the Partnership entered into an equity distribution agreement that established an at-the-market common unit offering program (the “ATM program”), pursuant to which the Partnership may sell from time to time through a group of managers, acting as the Partnership’s sales agents, the Partnership’s common units having an aggregate offering price of up to $100.0 million . As of September 30, 2016 , the Partnership had issued and sold 944,700 common units at an average price per unit of $17.21 through its ATM program. The Partnership intends to use the net proceeds of $15.8 million for general partnership purposes, including repayment of outstanding debt, acquisitions and capital expenditures. The following table presents the Partnership’s common and subordinated units issued from December 31, 2015 through September 30, 2016 : Limited Partners Common Subordinated Total Balance, December 31, 2015 42,163,749 28,753,623 70,917,372 Equity offering in June 2016 9,200,000 — 9,200,000 Common units issued under ATM program 944,700 — 944,700 Vested phantom units, net 124,402 — 124,402 Balance, September 30, 2016 52,432,851 28,753,623 81,186,474 As of September 30, 2016 , GP Holdings owned approximately 35% of the Partnership consisting of 3,623 common units, 28,753,623 subordinated units and all of the incentive distribution rights. Rice Energy owned 91.75% of the limited partnership interest in GP Holdings as of September 30, 2016 . |
Phantom Unit Awards
Phantom Unit Awards | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Phantom Unit Awards | Phantom Unit Awards The Partnership’s general partner can grant 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 that provide services to the Partnership under an omnibus agreement (the “Omnibus Agreement”). Pursuant to the LTIP, the maximum aggregate number of common units that may be issued pursuant to any and all awards under the LTIP shall not exceed 5,000,000 common units, subject to adjustment due to recapitalization or reorganization, or related to forfeitures or the expiration of awards, as provided under the LTIP. The equity-based awards are valued at the date of issuance and the related compensation cost is recognized into earnings on a straight-line basis over the vesting period. The equity-based awards will cliff vest at the end of the requisite service period from one to two years. Included in general and administrative expense is $0.6 million and $2.6 million of equity compensation cost related to these awards in the three and nine months ended September 30, 2016 , respectively, and $1.0 million and $3.0 million of equity compensation cost related to these awards in the three and nine months ended September 30, 2015 , respectively. Total unrecognized compensation cost expected to be recognized over the remaining vesting periods as of September 30, 2016 is $0.8 million for these awards. |
Net Income per Limited Partner
Net Income per Limited Partner Unit and Cash Distributions | 9 Months Ended |
Sep. 30, 2016 | |
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 GP 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. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except unit data) 2016 2015 2016 2015 Net income $ 24,989 $ 13,260 $ 87,351 $ 39,976 Less: Pre-acquisition net income allocated to general partner (1) — 990 — 6,306 Less: General partner interest in net income attributable to incentive distribution rights 427 — 540 — Limited partner net income $ 24,562 $ 12,270 $ 86,811 $ 33,670 Net income allocable to common units $ 15,862 $ 6,135 $ 53,199 $ 16,835 Net income allocable to subordinated units 8,700 6,135 33,612 16,835 Limited partner net income $ 24,562 $ 12,270 $ 86,811 $ 33,670 Weighted-average limited partner units outstanding - basic: Common units 52,419,942 28,753,623 46,376,896 28,753,623 Subordinated units 28,753,623 28,753,623 28,753,623 28,753,623 Total 81,173,565 57,507,246 75,130,519 57,507,246 Weighted-average limited partner units outstanding - diluted: Common units (2) 52,641,582 28,899,075 46,637,415 28,844,202 Subordinated units 28,753,623 28,753,623 28,753,623 28,753,623 Total 81,395,205 57,652,698 75,391,038 57,597,825 Net income per limited partner unit - basic: Common units $ 0.30 $ 0.21 $ 1.15 $ 0.59 Subordinated units 0.30 0.21 1.17 0.59 Total $ 0.30 $ 0.21 $ 1.16 $ 0.59 Net income per limited partner unit - diluted: Common units $ 0.30 $ 0.21 $ 1.14 $ 0.58 Subordinated units (3) 0.30 0.21 1.17 0.59 Total $ 0.30 $ 0.21 $ 1.15 $ 0.58 Cash distributions declared per limited partner unit: (4) Common units $ 0.2370 $ 0.1935 $ 0.6705 $ 0.5715 Subordinated units 0.2370 0.1935 0.6705 0.5715 Total $ 0.2370 $ 0.1935 $ 0.6705 $ 0.5715 (1) Pre-acquisition net income allocated to the general partner relates to operations of the Water Assets for the period prior to their acquisition. (2) Diluted weighted-average limited partner common units includes the effect of 221,640 and 260,519 units for the three and nine months ended September 30, 2016 , respectively, and 145,452 and 90,579 units for the three and nine months ended September 30, 2015 , respectively, in each case related to phantom units. (3) Diluted 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 unitholders than the common unitholders based on the dilution of the common units from the LTIP for the nine months ended September 30, 2016, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. (4) See below for further discussion of cash distributions declared for the period presented. Subordinated Units GP 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 GP 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 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 11, 2016 , a cash distribution of $0.2235 per common and subordinated unit was paid to the Partnership’s unitholders related to the second quarter of 2016. On October 20, 2016 , the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the third quarter of 2016 of $0.2370 per common and subordinated unit. The cash distribution will be paid on November 10, 2016 to unitholders of record at the close of business on November 1, 2016 . Also on November 10, 2016 , a cash distribution of $0.4 million will be made to GP Holdings related to its incentive distribution rights in the Partnership based upon the level of distribution paid per common and subordinated unit. |
Financial Information by Busine
Financial Information by Business Segment | 9 Months Ended |
Sep. 30, 2016 | |
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 consolidated results based on operating income, which is defined as segment operating revenues less operating 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 2015 Annual Report. The operating results and assets of the Partnership’s reportable segments were as follows for the three months ended September 30, 2016 . Three Months Ended September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 33,503 $ 7,564 $ 41,067 Total operating expenses 8,833 6,698 15,531 Operating income $ 24,670 $ 866 $ 25,536 Depreciation expense $ 2,406 $ 3,083 $ 5,489 Capital expenditures for segment assets $ 21,399 $ 1,261 $ 22,660 The operating results of the Partnership’s reportable segments were as follows for the three months ended September 30, 2015 . Three Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 20,142 $ 9,933 $ 30,075 Total operating expenses 7,173 6,892 14,065 Operating income $ 12,969 $ 3,041 $ 16,010 Depreciation expense $ 1,597 $ 2,820 $ 4,417 Capital expenditures for segment assets $ 44,544 $ 23,759 $ 68,303 The operating results of the Partnership’s reportable segments were as follows for the nine months ended September 30, 2016 . Nine Months Ended September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 90,339 $ 51,818 $ 142,157 Total operating expenses 26,015 25,989 52,004 Operating income $ 64,324 $ 25,829 $ 90,153 Depreciation expense $ 7,026 $ 10,688 $ 17,714 Capital expenditures for segment assets $ 93,100 $ 4,579 $ 97,679 The operating results of the Partnership’s reportable segments were as follows for the nine months ended September 30, 2015 . Nine Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 56,039 $ 29,107 $ 85,146 Total operating expenses 20,535 16,348 36,883 Operating income $ 35,504 $ 12,759 $ 48,263 Depreciation expense $ 4,531 $ 5,923 $ 10,454 Capital expenditures for segment assets $ 91,451 $ 86,653 $ 178,104 The assets of the Partnership’s reportable segments were as follows as of September 30, 2016 . As of September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 622,162 $ 135,749 $ 757,911 Goodwill $ 39,142 $ — $ 39,142 The assets of the Partnership’s reportable segments were as follows as of December 31, 2015. As of December 31, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 547,810 $ 141,980 $ 689,790 Goodwill $ 39,142 $ — $ 39,142 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
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 Partnership’s initial public offering in December 2014 (the “IPO”), the Partnership’s income was included as part of Rice Energy’s consolidated federal tax return. 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. Tax expense related to the Water Assets of $1.8 million and $5.8 million for the three and nine months ended September 30, 2015 , respectively, was recorded in the unaudited condensed consolidated statement of operations, resulting in an effective tax rate of approximately 12% and 13% for the three and nine months ended September 30, 2015 , respectively. The assignment of the common and subordinated units in the Midstream Holdings Investment resulted in the sale or exchange of more than 50 percent or more of its capital and profits interests of the Partnership within 12 months. Accordingly, the Partnership is considered to have “technically terminated” as a partnership for U.S. federal income tax purposes. The technical termination will not affect the Partnership’s consolidated financial statements, nor will it affect the Partnership’s classification as a partnership or the nature or extent of its “qualifying income” for U.S. federal income tax purposes. The taxable year for all unitholders ended on February 22, 2016 and will result in a deferral of depreciation deductions that were otherwise allowable in computing the taxable income of the Partnership’s unitholders for the period from January 1, 2016 through February 22, 2016. The Vantage Acquisition completed on October 19, 2016 resulted in a second technical termination of the Partnership. The taxable year for all unitholders ended on October 19, 2016 and will result in a deferral of depreciation deductions that were otherwise allowable in computing the taxable income of the Partnership’s unitholders for the period February 23, 2016 through October 19, 2016. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 and 2015 , related parties included Rice Energy and certain of its subsidiaries. On December 22, 2014, upon completion of the IPO, the Partnership entered into the Omnibus Agreement with its general partner, Rice Energy, Rice Poseidon Midstream LLC 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. 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 LLC, a wholly-owned subsidiary of Rice Energy, and Alpha Shale Resources, LP, 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 charges 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 (“CPI”). 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, 2016 and any future acreage it acquires within Washington County and Greene County, Pennsylvania, excluding the first 40 MDth/d of Rice Energy’s production from approximately 18,000 gross acres subject to a pre-existing third-party dedication. In connection with the closing of the acquisition of the Water Assets, the Partnership entered into Amended and Restated Water Services Agreements (the “Water Services Agreements”) with Rice Energy, whereby the Partnership has 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 terms of the Water Services Agreements are until December 22, 2029 and from month to month thereafter. Under the agreements, Rice Energy pays 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 the Partnership, plus a 2% margin. For periods subsequent to the IPO, no equity 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 prior to their acquisition. Equity compensation expense recorded in general and administrative 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. 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 consolidated 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 are 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. For periods subsequent to the IPO, no incentive unit expense has been allocated to the Partnership by Rice Energy; however, incentive unit expense was allocated to the Water Assets by Rice Energy prior to their acquisition. 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. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
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. 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. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” In May 2016, the FASB issued ASU 2016-11, “Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients.” These updates do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather provide further guidance with respect to implementation of ASU 2014-09. The effective date for ASU 2016-10, 2016-11, 2016-12 and ASU 2014-09, as amended by ASU 2015-14, is for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Partnership has not yet selected a transition method and is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. 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. 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 Securities and Exchange Commission (“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 adopted ASU 2015-15 in the first quarter of 2016 and presents debt issuance costs associated with the Partnership’s revolving credit facility (defined in Note 2) as deferred financing costs, net in our unaudited condensed consolidated balance sheets. Additionally, the Partnership will utilize the guidance in ASU 2015-03 for the presentation of debt issuance costs that are the result of an issuance of future debt. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Partnership has not yet selected a transition method and is currently evaluating the impact of the new guidance on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include: (i) income tax consequences, (ii) classification of awards as either equity or liabilities, (iii) classification on the statement of cash flows and (iv) forfeiture rate calculations. The updated guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption of the update is permitted. The Partnership is currently evaluating the impact of this guidance on its consolidated financial statements, but does not intend to early adopt this standard. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and thereby reduce the current diversity in practice. ASU 2016-15 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. The Partnership does not anticipate that this guidance will have a material impact on its consolidated financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On September 26, 2016, the Partnership entered into a Purchase and Sale Agreement relating to the Vantage Midstream Asset Acquisition, as amended, (the “Midstream Purchase Agreement”) by and between the Partnership and Rice Energy. Pursuant to the terms of the Midstream Purchase Agreement, and following the close of the Vantage Acquisition, on October 19, 2016, the Partnership acquired from Rice Energy all of the outstanding membership interests of Vantage Energy II Access, LLC and Vista Gathering, LLC (collectively, the “Vantage Midstream Entities”) (the “Midstream Closing”). The Vantage Midstream Entities, which became wholly-owned subsidiaries of Rice Energy in connection with the Vantage Acquisition, own midstream assets, including approximately 30 miles of dry gas gathering and compression assets. In consideration for the Vantage Midstream Asset Acquisition, the Partnership paid Rice Energy $600.0 million in aggregate consideration, which the Partnership paid in cash with the net proceeds of its private placement of common units (the “Private Placement”) of $441.0 million and borrowings under its revolving credit facility of $159.0 million . The preliminary purchase price allocation, which was performed at the Rice Energy level, ascribed approximately $158.0 million to gas gathering and compression assets and $442.0 million to goodwill. The Partnership’s acquisition of the Vantage Midstream Entities from Rice Energy is accounted for as a combination of entities under common control at historical cost. The final purchase price allocation will be determined by the Partnership subsequent to closing the Vantage Midstream Asset Acquisition. The final purchase price allocation may differ from these estimates and could differ materially from the preliminary allocation described above until Rice Energy has completed the detailed valuations and necessary calculations. The following unaudited pro forma combined financial information presents the Partnership’s results as though the acquisition of the Vantage Midstream Entities and the Private Placement had been completed at January 1, 2016 and 2015. Nine Months Ended September 30, (in thousands, except per share data) 2016 2015 Pro forma operating revenues $ 191,871 $ 112,152 Pro forma limited partner net income $ 115,626 $ 47,860 Pro forma earnings per common unit (basic) $ 1.20 $ 0.61 Pro forma earnings per common unit (diluted) $ 1.20 $ 0.61 On October 7, 2016, the Partnership issued 20,930,233 common units representing limited partner interests in the Partnership in the Private Placement for gross proceeds of approximately $450.0 million, or $21.50 per unit. The Partnership used the proceeds of the Private Placement to fund a portion of the Vantage Midstream Asset Acquisition and for general partnership purposes. After giving effect to the Private Placement, GP Holdings owns approximately 28% of the Partnership, consisting of 3,623 common units, 28,753,623 subordinated units and all of the incentive distribution rights. On October 19, 2016, Rice Midstream OpCo, as borrower, and the Partnership, as parent guarantor, entered into the Second Amendment to its credit agreement, dated October 19, 2016, among Rice Midstream OpCo, the Partnership, Wells Fargo Bank, N.A., as administrative agent and each of the lenders party thereto, which became effective concurrently with the Midstream Closing. The Second Amendment, among other things, (i) increased the aggregate commitments of the lenders under the credit agreement from $450.0 million (with an additional $200.0 million of commitments available under an accordion feature) to $850.0 million in connection with the Vantage Midstream Asset Acquisition and (ii) adjusted the interest rate payable on amounts borrowed thereunder. On October 20, 2016 , the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the third quarter of 2016 of $ 0.2370 per common and subordinated unit. The cash distribution will be paid on November 10, 2016 to unitholders of record at the close of business on November 1, 2016 . Also on November 10, 2016 , a cash distribution of $0.4 million will be made to GP Holdings related to its incentive distribution rights in the Partnership. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated 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 consolidated 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, 2016 and December 31, 2015 and its condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015 and of cash flows for the nine months ended September 30, 2016 and 2015 . |
Commitments and Contingencies | From time to time the Partnership is party to various legal and/or regulatory proceedings arising in the ordinary course of business. While the ultimate outcome and impact to the Partnership cannot be predicted with certainty, the Partnership believes that all such matters are without merit and involve amounts which, if resolved unfavorably, either individually or in the aggregate, will not have a material adverse effect on its financial condition, results of operations or cash flows. When it is determined that a loss is probable of occurring and is reasonably estimable, the Partnership accrues an undiscounted liability for such contingencies based on its best estimate using information available at the time. The Partnership discloses contingencies where an adverse outcome may be material, or in the judgment of management, the matter should otherwise be disclosed. |
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. 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. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” In May 2016, the FASB issued ASU 2016-11, “Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients.” These updates do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather provide further guidance with respect to implementation of ASU 2014-09. The effective date for ASU 2016-10, 2016-11, 2016-12 and ASU 2014-09, as amended by ASU 2015-14, is for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Partnership has not yet selected a transition method and is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures. 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. 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 Securities and Exchange Commission (“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 adopted ASU 2015-15 in the first quarter of 2016 and presents debt issuance costs associated with the Partnership’s revolving credit facility (defined in Note 2) as deferred financing costs, net in our unaudited condensed consolidated balance sheets. Additionally, the Partnership will utilize the guidance in ASU 2015-03 for the presentation of debt issuance costs that are the result of an issuance of future debt. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Partnership has not yet selected a transition method and is currently evaluating the impact of the new guidance on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include: (i) income tax consequences, (ii) classification of awards as either equity or liabilities, (iii) classification on the statement of cash flows and (iv) forfeiture rate calculations. The updated guidance is effective for annual periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption of the update is permitted. The Partnership is currently evaluating the impact of this guidance on its consolidated financial statements, but does not intend to early adopt this standard. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by current GAAP and thereby reduce the current diversity in practice. ASU 2016-15 is effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, with early application permitted. The Partnership does not anticipate that this guidance will have a material impact on its consolidated financial statements. |
Partners' Capital (Tables)
Partners' Capital (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Capital Units | The following table presents the Partnership’s common and subordinated units issued from December 31, 2015 through September 30, 2016 : Limited Partners Common Subordinated Total Balance, December 31, 2015 42,163,749 28,753,623 70,917,372 Equity offering in June 2016 9,200,000 — 9,200,000 Common units issued under ATM program 944,700 — 944,700 Vested phantom units, net 124,402 — 124,402 Balance, September 30, 2016 52,432,851 28,753,623 81,186,474 |
Net Income per Limited Partne20
Net Income per Limited Partner Unit and Cash Distributions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except unit data) 2016 2015 2016 2015 Net income $ 24,989 $ 13,260 $ 87,351 $ 39,976 Less: Pre-acquisition net income allocated to general partner (1) — 990 — 6,306 Less: General partner interest in net income attributable to incentive distribution rights 427 — 540 — Limited partner net income $ 24,562 $ 12,270 $ 86,811 $ 33,670 Net income allocable to common units $ 15,862 $ 6,135 $ 53,199 $ 16,835 Net income allocable to subordinated units 8,700 6,135 33,612 16,835 Limited partner net income $ 24,562 $ 12,270 $ 86,811 $ 33,670 Weighted-average limited partner units outstanding - basic: Common units 52,419,942 28,753,623 46,376,896 28,753,623 Subordinated units 28,753,623 28,753,623 28,753,623 28,753,623 Total 81,173,565 57,507,246 75,130,519 57,507,246 Weighted-average limited partner units outstanding - diluted: Common units (2) 52,641,582 28,899,075 46,637,415 28,844,202 Subordinated units 28,753,623 28,753,623 28,753,623 28,753,623 Total 81,395,205 57,652,698 75,391,038 57,597,825 Net income per limited partner unit - basic: Common units $ 0.30 $ 0.21 $ 1.15 $ 0.59 Subordinated units 0.30 0.21 1.17 0.59 Total $ 0.30 $ 0.21 $ 1.16 $ 0.59 Net income per limited partner unit - diluted: Common units $ 0.30 $ 0.21 $ 1.14 $ 0.58 Subordinated units (3) 0.30 0.21 1.17 0.59 Total $ 0.30 $ 0.21 $ 1.15 $ 0.58 Cash distributions declared per limited partner unit: (4) Common units $ 0.2370 $ 0.1935 $ 0.6705 $ 0.5715 Subordinated units 0.2370 0.1935 0.6705 0.5715 Total $ 0.2370 $ 0.1935 $ 0.6705 $ 0.5715 (1) Pre-acquisition net income allocated to the general partner relates to operations of the Water Assets for the period prior to their acquisition. (2) Diluted weighted-average limited partner common units includes the effect of 221,640 and 260,519 units for the three and nine months ended September 30, 2016 , respectively, and 145,452 and 90,579 units for the three and nine months ended September 30, 2015 , respectively, in each case related to phantom units. (3) Diluted 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 unitholders than the common unitholders based on the dilution of the common units from the LTIP for the nine months ended September 30, 2016, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders. (4) See below 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 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 Busi21
Financial Information by Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The operating results and assets of the Partnership’s reportable segments were as follows for the three months ended September 30, 2016 . Three Months Ended September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 33,503 $ 7,564 $ 41,067 Total operating expenses 8,833 6,698 15,531 Operating income $ 24,670 $ 866 $ 25,536 Depreciation expense $ 2,406 $ 3,083 $ 5,489 Capital expenditures for segment assets $ 21,399 $ 1,261 $ 22,660 The operating results of the Partnership’s reportable segments were as follows for the three months ended September 30, 2015 . Three Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 20,142 $ 9,933 $ 30,075 Total operating expenses 7,173 6,892 14,065 Operating income $ 12,969 $ 3,041 $ 16,010 Depreciation expense $ 1,597 $ 2,820 $ 4,417 Capital expenditures for segment assets $ 44,544 $ 23,759 $ 68,303 The operating results of the Partnership’s reportable segments were as follows for the nine months ended September 30, 2016 . Nine Months Ended September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 90,339 $ 51,818 $ 142,157 Total operating expenses 26,015 25,989 52,004 Operating income $ 64,324 $ 25,829 $ 90,153 Depreciation expense $ 7,026 $ 10,688 $ 17,714 Capital expenditures for segment assets $ 93,100 $ 4,579 $ 97,679 The operating results of the Partnership’s reportable segments were as follows for the nine months ended September 30, 2015 . Nine Months Ended September 30, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Total operating revenues $ 56,039 $ 29,107 $ 85,146 Total operating expenses 20,535 16,348 36,883 Operating income $ 35,504 $ 12,759 $ 48,263 Depreciation expense $ 4,531 $ 5,923 $ 10,454 Capital expenditures for segment assets $ 91,451 $ 86,653 $ 178,104 |
Reconciliation of Assets from Segment to Consolidated | The assets of the Partnership’s reportable segments were as follows as of September 30, 2016 . As of September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 622,162 $ 135,749 $ 757,911 Goodwill $ 39,142 $ — $ 39,142 The assets of the Partnership’s reportable segments were as follows as of December 31, 2015. As of December 31, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 547,810 $ 141,980 $ 689,790 Goodwill $ 39,142 $ — $ 39,142 |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated | The assets of the Partnership’s reportable segments were as follows as of September 30, 2016 . As of September 30, 2016 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 622,162 $ 135,749 $ 757,911 Goodwill $ 39,142 $ — $ 39,142 The assets of the Partnership’s reportable segments were as follows as of December 31, 2015. As of December 31, 2015 (in thousands) Gathering and Compression Water Services Consolidated Total Segment assets $ 547,810 $ 141,980 $ 689,790 Goodwill $ 39,142 $ — $ 39,142 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Business Acquisition, Pro Forma Information | The following unaudited pro forma combined financial information presents the Partnership’s results as though the acquisition of the Vantage Midstream Entities and the Private Placement had been completed at January 1, 2016 and 2015. Nine Months Ended September 30, (in thousands, except per share data) 2016 2015 Pro forma operating revenues $ 191,871 $ 112,152 Pro forma limited partner net income $ 115,626 $ 47,860 Pro forma earnings per common unit (basic) $ 1.20 $ 0.61 Pro forma earnings per common unit (diluted) $ 1.20 $ 0.61 |
Basis of Presentation (Details)
Basis of Presentation (Details) - shares | Feb. 22, 2016 | Sep. 30, 2016 | Feb. 21, 2016 | Dec. 31, 2015 |
Common | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Equity interests assigned (number of units) | 52,432,851 | 42,163,749 | ||
Subordinated | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Equity interests assigned (number of units) | 28,753,623 | 28,753,623 | ||
Limited Partners | GP Holdings | Private Placement | Common | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Limited partner interest percentage | 8.25% | |||
Limited Partners | GP Holdings | Common | Partnership Interest | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Equity interests assigned (number of units) | 3,623 | 3,623 | ||
Limited Partners | GP Holdings | Subordinated | Partnership Interest | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Equity interests assigned (number of units) | 28,753,623 | 28,753,623 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | Dec. 22, 2014 | Sep. 30, 2016 | Sep. 30, 2016 | Oct. 19, 2016 | Oct. 18, 2016 |
Debt Instrument [Line Items] | |||||
Interest paid in cash | $ 400,000 | $ 2,700,000 | |||
Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee based on undrawn commitment (basis points) | 0.375% | ||||
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) | 2.00% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (basis points) | 3.00% | ||||
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) | 1.00% | ||||
Revolving Credit Facility | One Month Eurodollar, Additional Margin | Maximum | |||||
Debt Instrument [Line Items] | |||||
Applicable margin (basis points) | 2.00% | ||||
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 | $ 0 | 0 | |||
Average daily outstanding balance of credit facility | $ 96,500,000 | ||||
Weighted average interest rate | 3.30% | 3.30% | |||
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 | |||
Subsequent Event | Revolving Credit Facility | Wells Fargo Bank, N.A. | |||||
Debt Instrument [Line Items] | |||||
Additional commitments available under accordion feature | $ 200,000,000 | ||||
Amount of borrowing capacity under facility | $ 850,000,000 | $ 450,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Compression equipment - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Commitments [Line Items] | ||||
Future payments for equipment | $ 4.2 | $ 4.2 | ||
Remainder of 2016 | 0.7 | 0.7 | ||
2,017 | 0.9 | 0.9 | ||
2,018 | 0.9 | 0.9 | ||
2,019 | 0.8 | 0.8 | ||
2,020 | 0.3 | 0.3 | ||
Thereafter | 0.6 | 0.6 | ||
Midstream operation and maintenance expense | ||||
Other Commitments [Line Items] | ||||
Rent expense | $ 0.4 | $ 0.4 | $ 1.2 | $ 1.3 |
Partners' Capital (Details)
Partners' Capital (Details) - USD ($) | Jun. 13, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Feb. 21, 2016 | Dec. 31, 2015 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Underwriting discounts and commissions | $ 0 | $ 129,000 | ||||
Equity interest retained in partnership (percentage) | 35.00% | 35.00% | ||||
Common | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Equity interests assigned (number of units) | 52,432,851 | 52,432,851 | 42,163,749 | |||
Subordinated | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Equity interests assigned (number of units) | 28,753,623 | 28,753,623 | 28,753,623 | |||
GP Holdings | Limited Partners | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Equity interest retained in partnership (percentage) | 91.75% | 91.75% | ||||
GP Holdings | Partnership Interest | Common | Limited Partners | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Equity interests assigned (number of units) | 3,623 | 3,623 | 3,623 | |||
GP Holdings | Partnership Interest | Subordinated | Limited Partners | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Equity interests assigned (number of units) | 28,753,623 | 28,753,623 | 28,753,623 | |||
Common units issued in June equity 2016 | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Limited partner common units sold through underwritten public offering (number of units) | 9,200,000 | |||||
Price per limited partner common unit | $ 18.50 | |||||
Underwriting discounts and commissions | $ 6,000,000 | |||||
Aggregate offering price | $ 164,100,000 | |||||
Over-Allotment Option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Limited partner common units sold through underwritten public offering (number of units) | 1,200,000 | |||||
At the Market Common Unit Offering Program | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Limited partner common units sold through underwritten public offering (number of units) | 944,700 | |||||
Aggregate offering price | $ 15,800,000 | |||||
At the Market Common Unit Offering Program | Maximum | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Net proceeds | $ 100,000,000 | |||||
At the Market Common Unit Offering Program | Weighted Average | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Price per limited partner common unit | $ 17.21 | $ 17.21 |
Partners' Capital (Schedule of
Partners' Capital (Schedule of Common and Subordinated Units Issued) (Details) | 9 Months Ended |
Sep. 30, 2016shares | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance, December 31, 2015 (in units) | 70,917,372 |
Equity offering in June 2016 (in units) | 9,200,000 |
Common units issued under ATM program (in units) | 944,700 |
Vested phantom units, net (in units) | 124,402 |
Balance, September 30, 2016 (in units) | 81,186,474 |
Limited Partners | Common | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance, December 31, 2015 (in units) | 42,163,749 |
Equity offering in June 2016 (in units) | 9,200,000 |
Common units issued under ATM program (in units) | 944,700 |
Vested phantom units, net (in units) | 124,402 |
Balance, September 30, 2016 (in units) | 52,432,851 |
Limited Partners | Subordinated | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance, December 31, 2015 (in units) | 28,753,623 |
Equity offering in June 2016 (in units) | 0 |
Common units issued under ATM program (in units) | 0 |
Vested phantom units, net (in units) | 0 |
Balance, September 30, 2016 (in units) | 28,753,623 |
Phantom Unit Awards (Details)
Phantom Unit Awards (Details) - Phantom unit awards - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity compensation expense | $ 0.6 | $ 1.1 | $ 2.7 | $ 3.3 |
Rice Midstream Partners LP 2014 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum aggregate number of common units that may be issued | 5,000,000 | 5,000,000 | ||
Unrecorded compensation expense | $ 0.8 | $ 0.8 | ||
Rice Midstream Partners LP 2014 LTIP | General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity compensation expense | $ 0.6 | $ 1 | $ 2.6 | $ 3 |
Rice Midstream Partners LP 2014 LTIP | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 1 year | |||
Rice Midstream Partners LP 2014 LTIP | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 2 years |
Net Income per Limited Partne29
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Net income | $ 24,989 | $ 13,260 | $ 87,351 | $ 39,976 | |
Less: Pre-acquisition net income allocated to general partner | [1] | 0 | (990) | 0 | (6,306) |
Less: General partner interest in net income attributable to incentive distribution rights | 427 | 0 | 540 | 0 | |
Limited partner net income | $ 24,562 | $ 12,270 | $ 86,811 | $ 33,670 | |
Weighted-average limited partner units outstanding - basic: | |||||
Weighted-average limited partner units outstanding - basic (in units) | 81,173,565 | 57,507,246 | 75,130,519 | 57,507,246 | |
Weighted-average limited partner units outstanding - diluted: | |||||
Weighted-average limited partner units outstanding - diluted (in units) | 81,395,205 | 57,652,698 | 75,391,038 | 57,597,825 | |
Net income per limited partner unit - basic: | |||||
Net income per limited partner unit - basic (in dollars per unit) | $ 0.30 | $ 0.21 | $ 1.16 | $ 0.59 | |
Net income per limited partner unit - diluted: | |||||
Net income per limited partner unit - diluted (in dollars per unit) | 0.30 | 0.21 | 1.15 | 0.58 | |
Unitholders | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [2] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
Phantom unit | |||||
Unitholders | |||||
Shares considered anti-dilutive | 221,640 | 145,452 | 260,519 | 90,579 | |
Common | |||||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Limited partner net income | $ 15,862 | $ 6,135 | $ 53,199 | $ 16,835 | |
Weighted-average limited partner units outstanding - basic: | |||||
Weighted-average limited partner units outstanding - basic (in units) | 52,419,942 | 28,753,623 | 46,376,896 | 28,753,623 | |
Weighted-average limited partner units outstanding - diluted: | |||||
Weighted-average limited partner units outstanding - diluted (in units) | [3] | 52,641,582 | 28,899,075 | 46,637,415 | 28,844,202 |
Net income per limited partner unit - basic: | |||||
Net income per limited partner unit - basic (in dollars per unit) | [4] | $ 0.30 | $ 0.21 | $ 1.15 | $ 0.59 |
Net income per limited partner unit - diluted: | |||||
Net income per limited partner unit - diluted (in dollars per unit) | [4] | 0.30 | 0.21 | 1.14 | 0.58 |
Unitholders | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [2] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
Subordinated | |||||
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Limited partner net income | $ 8,700 | $ 6,135 | $ 33,612 | $ 16,835 | |
Weighted-average limited partner units outstanding - basic: | |||||
Weighted-average limited partner units outstanding - basic (in units) | 28,753,623 | 28,753,623 | 28,753,623 | 28,753,623 | |
Weighted-average limited partner units outstanding - diluted: | |||||
Weighted-average limited partner units outstanding - diluted (in units) | 28,753,623 | 28,753,623 | 28,753,623 | 28,753,623 | |
Net income per limited partner unit - basic: | |||||
Net income per limited partner unit - basic (in dollars per unit) | $ 0.30 | $ 0.21 | $ 1.17 | $ 0.59 | |
Net income per limited partner unit - diluted: | |||||
Net income per limited partner unit - diluted (in dollars per unit) | [5] | 0.30 | 0.21 | 1.17 | 0.59 |
Unitholders | |||||
Cash distributions declared per limited partner unit (in dollars per unit) | [2] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 |
[1] | Pre-acquisition net income allocated to the general partner relates to operations of the Water Assets for the period prior to their acquisition. | ||||
[2] | See below for further discussion of cash distributions declared for the period presented. | ||||
[3] | Diluted weighted-average limited partner common units includes the effect of 221,640 and 260,519 units for the three and nine months ended September 30, 2016, respectively, and 145,452 and 90,579 units for the three and nine months ended September 30, 2015, respectively, in each case related to phantom units. | ||||
[4] | Net income per limited partner unit does not include results attributable to PA Water and OH Water (collectively, the “Water Assets”) prior to their acquisition as these results are not attributable to limited partners of the Partnership. | ||||
[5] | Diluted 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 unitholders than the common unitholders based on the dilution of the common units from the LTIP for the nine months ended September 30, 2016, 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 Partne30
Net Income per Limited Partner Unit and Cash Distributions (Incentive Distribution Rights) (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 10, 2016 | Oct. 20, 2016 | Aug. 11, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | ||||||||
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 (in dollars per unit) | $ 0.2235 | |||||||
Cash distributions declared per limited partner unit (in dollars per unit) | [1] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 | |||
Subsequent Event | ||||||||
Incentive Distribution Rights Holders | ||||||||
Cash distributions declared per limited partner unit (in dollars per unit) | $ 0.2370 | |||||||
Subsequent Event | Scenario, Forecast | Limited Partners | GP Holdings | ||||||||
Incentive Distribution Rights Holders | ||||||||
Amount of cash distribution related to incentive distribution rights | $ 0.4 | |||||||
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] | See below for further discussion of cash distributions declared for the period presented. |
Financial Information by Busi31
Financial Information by Business Segment (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016business_segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
Financial Information by Busi32
Financial Information by Business Segment (Schedule of Operating Results and Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total operating revenues | $ 41,067 | $ 30,075 | $ 142,157 | $ 85,146 |
Total operating expenses | 15,531 | 14,065 | 52,004 | 36,883 |
Operating income | 25,536 | 16,010 | 90,153 | 48,263 |
Depreciation expense | 5,489 | 4,417 | 17,714 | 10,454 |
Capital expenditures for segment assets | 22,660 | 68,303 | 97,679 | 178,104 |
Gathering and Compression | ||||
Segment Reporting Information [Line Items] | ||||
Total operating revenues | 33,503 | 20,142 | 90,339 | 56,039 |
Total operating expenses | 8,833 | 7,173 | 26,015 | 20,535 |
Operating income | 24,670 | 12,969 | 64,324 | 35,504 |
Depreciation expense | 2,406 | 1,597 | 7,026 | 4,531 |
Capital expenditures for segment assets | 21,399 | 44,544 | 93,100 | 91,451 |
Water Services | ||||
Segment Reporting Information [Line Items] | ||||
Total operating revenues | 7,564 | 9,933 | 51,818 | 29,107 |
Total operating expenses | 6,698 | 6,892 | 25,989 | 16,348 |
Operating income | 866 | 3,041 | 25,829 | 12,759 |
Depreciation expense | 3,083 | 2,820 | 10,688 | 5,923 |
Capital expenditures for segment assets | $ 1,261 | $ 23,759 | $ 4,579 | $ 86,653 |
Financial Information by Busi33
Financial Information by Business Segment (Schedule of Assets of Reportable Segments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | $ 757,911 | $ 689,790 |
Gathering and Compression | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | 622,162 | 547,810 |
Water Services | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Segment assets | $ 135,749 | $ 141,980 |
Financial Information by Busi34
Financial Information by Business Segment (Schedule of Goodwill of Reportable Segments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Segment Reporting, Other Significant Reconciling Item [Line Items] | ||
Goodwill | $ 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 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 0 | $ (1,794) | $ 0 | $ (5,796) |
Effective tax rate percentage | (12.00%) | (13.00%) |
Related Party Transactions (Det
Related Party Transactions (Details) a in Thousands, MMBTU in Thousands | Nov. 04, 2015 | Dec. 22, 2014a$ / MMBTU | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)MMBTU | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||||||
Incentive unit (income) expense | [1] | $ 0 | $ (75,000) | $ 0 | $ 1,048,000 | |||
Water Assets | General and administrative expense | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity compensation expense | 100,000 | 400,000 | ||||||
Subsidiary of Common Parent | Water Assets | ||||||||
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 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Production from gross acres subject to pre-existing third-party dedication (MDth/d) | MMBTU | 40 | |||||||
Gross Acres subject to Pre-existing Third Party Dedication | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Gross acres covered | a | 18 | |||||||
Stock Compensation Awards Granted by Related Party | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity compensation expense | $ 0 | |||||||
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 | $ 0 | |||||||
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 | $ (100,000) | $ 1,000,000 | ||||||
[1] | Incentive unit expense for the three and nine months ended September 30, 2015 was allocated from Rice Energy. |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | Nov. 10, 2016USD ($) | Oct. 20, 2016$ / shares | Oct. 19, 2016USD ($)mi | Oct. 07, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015$ / shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / shares | Oct. 18, 2016USD ($) | Dec. 31, 2015USD ($)shares | Dec. 22, 2014USD ($) | |
Subsequent Event [Line Items] | ||||||||||||
Proceeds from borrowings | $ 43,000,000 | $ 72,000,000 | ||||||||||
Goodwill | $ 39,142,000 | $ 39,142,000 | $ 39,142,000 | |||||||||
Number of units outstanding | shares | 81,186,474 | 81,186,474 | 70,917,372 | |||||||||
Cash distributions declared per limited partner unit (in dollars per unit) | $ / shares | [1] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 | |||||||
Revolving Credit Facility | Wells Fargo Bank, N.A. | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Additional commitments available under accordion feature | $ 200,000,000 | |||||||||||
Common | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash distributions declared per limited partner unit (in dollars per unit) | $ / shares | [1] | 0.237 | 0.1935 | 0.6705 | 0.5715 | |||||||
Subordinated | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash distributions declared per limited partner unit (in dollars per unit) | $ / shares | [1] | $ 0.237 | $ 0.1935 | $ 0.6705 | $ 0.5715 | |||||||
Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Cash distributions declared per limited partner unit (in dollars per unit) | $ / shares | $ 0.2370 | |||||||||||
Subsequent Event | Revolving Credit Facility | Wells Fargo Bank, N.A. | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Amount of borrowing capacity under facility | $ 850,000,000 | $ 450,000,000 | ||||||||||
Additional commitments available under accordion feature | 200,000,000 | |||||||||||
Subsequent Event | Limited Partners | GP Holdings | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Ownership percentage | 28.00% | |||||||||||
Subsequent Event | Limited Partners | GP Holdings | Common | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of units outstanding | shares | 3,623 | |||||||||||
Subsequent Event | Limited Partners | GP Holdings | Subordinated | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of units outstanding | shares | 28,753,623 | |||||||||||
Subsequent Event | Limited Partners | GP Holdings | Scenario, Forecast | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Amount of cash distribution related to incentive distribution rights | $ 400,000 | |||||||||||
Subsequent Event | Vantage Midstream Entities | Revolving Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from borrowings | 159,000,000 | |||||||||||
Subsequent Event | Vantage Midstream Entities | Private Placement | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Gross proceeds from private placement | $ 441,000,000 | $ 450,000,000 | ||||||||||
Limited partner common units in private placement | shares | 20,930,233 | |||||||||||
Price per limited partner common unit | $ / shares | $ 21.50 | |||||||||||
Subsequent Event | Vantage Midstream Entities | Subsidiary of Common Parent | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of miles of dry gas gathering and compression assets | mi | 30 | |||||||||||
Aggregate consideration | $ 600,000,000 | |||||||||||
Goodwill | 442,000,000 | |||||||||||
Subsequent Event | Vantage Midstream Entities | Subsidiary of Common Parent | Gas Gathering and Processing Equipment | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Gas gathering and compression assets | $ 158,000,000 | |||||||||||
[1] | See below for further discussion of cash distributions declared for the period presented. |
Subsequent Events (Schedule of
Subsequent Events (Schedule of Pro Forma Information) (Details) - Vantage Midstream Entities - Subsidiary of Common Parent - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||
Pro forma operating revenues | $ 191,871 | $ 112,152 |
Pro forma limited partner net income | $ 115,626 | $ 47,860 |
Pro forma earnings per common unit (basic) | $ 1.20 | $ 0.61 |
Pro forma earnings per common unit (diluted) | $ 1.20 | $ 0.61 |